Table of Contents
As filed with the Securities and Exchange Commission on June 20, 2013
No. 333-189121

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Pre-Effective Amendment No. 1 to
Form F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
(Exact name of Registrant as specified in its charter)
Volaris Aviation Holding Company
(Translation of Registrant’s name into English)

 
					
United Mexican States	 	4512	 	None	
(State or other jurisdiction of
incorporation or organization)	 	(Primary Standard Industrial
Classification Code Number)	 	(I.R.S. Employer
Identification No.)	
Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B
Colonia Zedec Santa Fe
United Mexican States, D.F. 01210
+(52) 55-1105-2300
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Corporation Service Company
1090 Vermont Avenue NW, Suite 430
Washington, DC 20005
1-800-927-9800
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Antonia E. Stolper, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022	 	Michael L. Fitzgerald, Esq.
Paul Hastings LLP
75 East 55th Street
New York, New York 10022	
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:     ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     ¨

CALCULATION OF REGISTRATION FEE

 	
Title of each class of securities to be registered	 	Proposed maximum
aggregate offering
price(1)(2)	 	Amount of
registration fee	
Ordinary Participation Certificates (Certificados de Participación Ordinarios) (“CPOs”)(3)	 	U.S.$100,000,000	 	U.S.$13,640	
Series A shares of common stock, no par value(4)	 	—	 	—	
 	
(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.	
(2)	Includes public offering price of CPOs which the underwriters may purchase to cover over-allotments, if any, and CPOs that are to be offered and sold outside the United States but that may be resold in the United States in transactions requiring registration under the Securities Act of 1933, as amended.	
(3)	American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of the CPOs registered hereby will be registered under a separate registration statement on Form F-6. Each such American Depositary Share represents ten CPOs and each CPO represents a financial interest in one share of the registrant’s Series A common stock, no par value.	
(4)	The Series A shares of common stock comprise the CPOs registered hereby and are not being offered hereby.	
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
PRELIMINARY PROSPECTUS (Subject to Completion, Dated June 20, 2013)
Ordinary Participation Certificates
in the form of American Depositary Shares

 
 
We are offering 160,715,000 Series A shares of common stock and the selling shareholders are offering 125,000,000 Series A shares of common stock of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Volaris Aviation Holding Company), for a total of 285,715,000 Series A shares of common stock, in a global offering consisting of (i) an offering of Series A shares in Mexico and (ii) a concurrent international offering of Ordinary Participation Certificates ( Certificados de Participación Ordinarios ), or CPOs, in the form of American Depositary Shares, or ADSs, in the United States and other countries outside of Mexico. The ADSs will be evidenced by American Depositary Receipts, or ADRs. The CPOs will be issued by Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, or the CPO trustee. Each ADS represents ten CPOs and each CPO represents a financial interest in one Series A share. The CPOs will grant no voting rights and consequently the ADSs will grant no voting rights.
We are offering             CPOs and the selling shareholders are offering             CPOs, both in the form of ADSs, in the United States and other countries outside of the United Mexican States, or Mexico, through the international underwriters named in this prospectus. In addition, we are offering                 Series A shares and the selling shareholders are offering             Series A shares in Mexico in a concurrent public offering, approved by the Mexican National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ), or CNBV, conducted by the lead Mexican underwriters named elsewhere in this prospectus. No Series A shares are being offered in the form of CPOs and the CPOs will not be listed on any stock exchange. The closings of the international and Mexican offerings are conditioned upon each other.
This is our initial public offering and no public market currently exists for the Series A shares, CPOs or ADSs. We anticipate that the initial public offering price will be between U.S.$         and U.S.$         per ADS and between U.S.$         and U.S.$         per CPO. We have applied to list the ADSs on the New York Stock Exchange under the symbol “VLRS” and the Series A shares on the Bolsa Mexicana de Valores, S.A.B. de C.V., or the Mexican Stock Exchange, under the symbol “VOLAR.”
Application has been made for the registration of the Series A shares underlying the CPOs in the Mexican National Securities Registry ( Registro Nacional de Valores ), or RNV, maintained by the CNBV. Such registration is expected to be obtained on or before the closing of this offer. Registration of the Series A shares will not be a certification as to the investment quality of the securities, the solvency of the issuer or the accuracy or completeness of the information contained in this prospectus. The CPOs are not required to be and will not be registered in the RNV.
Investing in the CPOs, in the form of ADSs, and Series A shares involves risks. See “ Risk Factors ” beginning on page 16.

 
																	
 	  	Price to public	 	  	Underwriting
discounts and
commissions	 	  	Net proceeds to us	 	  	Net proceeds to
selling
shareholders	 	
Per ADS	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	
Per CPO	  				  				  				  				
Per Series A share (1)	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	
Total	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	  	U.S.$	 	  	

(1)	The price to public per Series A share in the Mexican prospectus is Ps.             . This peso amount was converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.12.3546 per U.S.$1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013.	
We have agreed to reimburse the international underwriters for certain expenses in connection with the offering. See “Expenses of the Global Offering.”
The selling shareholders have granted to the international underwriters and the Mexican underwriters independent options, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of              additional CPOs in the form of ADSs and              additional Series A shares, respectively, at the public offering prices listed above, less underwriting discounts and commissions. The international underwriters and the Mexican underwriters may exercise these options solely for the purpose of covering over-allotments, if any, made in connection with the offering of the ADSs and Series A shares offered under this prospectus and the Mexican prospectus, respectively, on an independent but coordinated basis.
Neither the Securities and Exchange Commission, or the SEC, the CNBV nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We expect that delivery of the CPOs, in the form of ADSs, to purchasers will be made on or about                     , 2013.

 
											
Deutsche Bank Securities	  	Morgan Stanley	  	UBS Investment Bank	
											
          Barclays	  	Cowen and Company	  	Evercore Partners	  	Santander	
The date of this prospectus is                     , 2013.

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Table of Contents
 TABLE OF CONTENTS

 	  	Page	 	
GLOSSARY OF AIRLINES AND AIRLINE TERMS	  	 	iii	  	
PRESENTATION OF FINANCIAL AND OTHER INFORMATION	  	 	vi	  	
PROSPECTUS SUMMARY	  	 	1	  	
THE OFFERING	  	 	7	  	
SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA	  	 	11	  	
RISK FACTORS	  	 	16	  	
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	  	 	43	  	
USE OF PROCEEDS	  	 	45	  	
EXCHANGE RATES	  	 	46	  	
CAPITALIZATION	  	 	47	  	
DILUTION	  	 	48	  	
SELECTED CONSOLIDATED FINANCIAL INFORMATION	  	 	49	  	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	  	 	54	  	
REGULATION	  	 	83	  	
INDUSTRY	  	 	89	  	
BUSINESS	  	 	94	  	
MANAGEMENT	  	 	110	  	
PRINCIPAL AND SELLING SHAREHOLDERS	  	 	122	  	
RELATED PARTY TRANSACTIONS	  	 	125	  	
DESCRIPTION OF CAPITAL STOCK	  	 	127	  	
DESCRIPTION OF CPOS	  	 	138	  	
DESCRIPTION OF AMERICAN DEPOSITARY SHARES	  	 	143	  	
MARKET INFORMATION	  	 	149	  	
DIVIDEND POLICY	  	 	158	  	
TAXATION	  	 	159	  	
UNDERWRITERS	  	 	167	  	
EXPENSES OF THE GLOBAL OFFERING	  	 	173	  	
VALIDITY OF SECURITIES	  	 	174	  	
EXPERTS	  	 	175	  	
WHERE YOU CAN FIND MORE INFORMATION	  	 	175	  	
ENFORCEABILITY OF CIVIL LIABILITIES	  	 	176	  	
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	  	 	F-1	  	

You should rely only on the information contained in this prospectus. Neither we, the selling shareholders nor the international underwriters have authorized any other person to provide you with different or additional information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. Neither we, the selling shareholders nor the international underwriters are making an offer to sell the ADSs in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, results of operations, financial condition and prospects may have changed since that date.
We and the selling shareholders are offering ADSs in the United States and countries other than Mexico solely on the basis of the information contained in this prospectus. No offer or sale of the ADSs may be made in Mexico.
 
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We and the selling shareholders are also offering Series A shares in Mexico through a Spanish-language Mexican prospectus. The Mexican prospectus, which will be filed with, and approved by, the CNBV, is in a format different from that of this prospectus and contains information substantially similar to the information contained in this prospectus.
The ADSs are being offered in the United States and other countries outside of the United Mexican States, or Mexico. Persons outside the United States who have come into possession of this prospectus must inform themselves about and observe restrictions relating to the offering of the ADSs and the distribution of this prospectus outside of the United States.

In this prospectus, we use the term “Volaris” to refer to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., “Volaris Opco” to refer to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., “Comercializadora” to refer to Comercializadora Volaris, S.A. de C.V., “Servicios Corporativos” to refer to Servicios Corporativos Volaris, S.A. de C.V. and “Servicios Administrativos” to refer to Servicios Administrativos Volaris, S.A. de C.V. Volaris Opco, Comercializadora, Servicios Corporativos and Servicios Administrativos are wholly-owned subsidiaries of Volaris. The terms “we,” “our” and “us” in this prospectus refer to Volaris, together with its subsidiaries, and to properties and assets that they own or operate, unless otherwise specified. References to “Series A shares” refer to Series A shares of Volaris.

 
 
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 GLOSSARY OF AIRLINES AND AIRLINE TERMS
Set forth below is a glossary of industry terms used in this prospectus:
“Aerocalifornia” means Aerocalifornia, S.A. de C.V.
“Aeroméxico” means Aerovías de México, S.A. de C.V.
“AirAsia” means AirAsia Berhad.
“Airbus” means Airbus S.A.S.
“Aladia” means Aladia Airlines, S.A. de C.V.
“Alaska Air” means Alaska Air Group, Inc.
“Allegiant” means Allegiant Travel Company.
“Alma” means Aerolíneas Mesoamericanas, S.A. de C.V.
“Aeroméxico Connect” means Aerolitoral, S.A. de C.V.
“American” means AMR Corporation.
“Available seat miles” or “ASMs” means the number of seats available for passengers multiplied by the number of miles the seats are flown.
“Average daily aircraft utilization” means flight hours or block hours, as applicable, divided by number of days in the period divided by average aircraft in the period.
“Average economic fuel cost per gallon” means total fuel expense divided by the total number of fuel gallons consumed.
“Average ticket revenue per booked passenger” means total passenger revenue divided by booked passengers.
“Average stage length” means the average number of miles flown per passenger flight segment.
“Aviacsa” means Consorcio Aviaxsa, S.A. de C.V.
“Avianca-TACA” means Avianca-TACA Ltd.
“Avolar” means Avolar Aerolíneas, S.A. de C.V.
“Azteca” means Líneas Aéreas Azteca, S.A. de C.V.
“Azul” means Azul Linhas Aéreas Brasileiras S.A.
“Block hours” means the number of hours during which the aircraft is in revenue service, measured from the time it leaves the gate until the time it arrives to the gate at destination.
“Booked passengers” means the total number of passengers booked on all flight segments.
 
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“CASM” or “unit costs” means total operating expenses, net divided by ASMs.
“CASM ex fuel” means total operating expenses, net excluding fuel expense divided by ASMs.
“CBP” means United States Customs and Border Protection.
“Copa” means Copa Holding S.A.
“Delta” means Delta Air Lines, Inc.
“DGAC” means the Mexican Civil Aeronautic Authority ( Dirección General de Aeronáutica Civil ).
“DOT” means the United States Department of Transportation.
“EPA” means the United States Environmental Protection Agency.
“FAA” means the United States Federal Aviation Administration.
“FCC” means the United States Federal Communications Commission.
“Flight hours” means the number of hours during which the aircraft is in revenue service, measured from the time it takes off until the time it lands at the destination.
“Gol” means Linhas Aéreas Inteligentes, S.A.
“Grupo Aeroméxico” means Grupo Aeroméxico, S.A.B. de C.V., which includes Aeroméxico and Aeroméxico Connect.
“Grupo Mexicana” means Grupo Mexicana de Aviación, S.A. de C.V., which is the holding company for three airlines, Compañía Mexicana de Aviación, Mexicana Click and Mexicana Link.
“Grupo TACA” means Taca International Airlines, S.A.
“IATA” means the International Air Transport Association.
“Interjet” means ABC Aerolíneas, S.A. de C.V.
“LATAM” means LATAM Airlines Group S.A.
“Latin America” means, collectively, Mexico, the Caribbean, Central America and South America.
“Latin American publicly traded airline carriers” means, collectively, Aeroméxico, Avianca-TACA, Copa, Gol and LATAM.
“Legacy carrier” means an airline that typically offers scheduled flights to major domestic and international routes (directly or through membership in an alliance) and serves numerous smaller cities, operates mainly through a “hub-and-spoke” network route system and has higher cost structures than low-cost carriers due to higher labor costs, flight crew and aircraft scheduling inefficiencies, concentration of operations in higher cost airports and multiple classes of services.
“Load factor” means RPMs divided by ASMs and expressed as a percentage.
 
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“Low-cost carrier” means an airline that typically flies direct, point-to-point flights, often serves major markets through secondary, lower cost airports in the same regions as major population centers, provides a single class of service, thereby increasing the number of seats on each flight and avoiding the significant and incremental cost of offering premium-class services, and tends to operate fleets with only one or two aircraft families, in order to maximize the utilization of flight crews across the fleet, improve aircraft scheduling efficiency and flexibility and minimize inventory and aircraft maintenance costs.
“NEO” means new engine option.
“Nova Air” means Polar Airlines de Mexico, S.A. de C.V.
“On-time” means flights arriving within 15 minutes of the scheduled arrival time.
“Other Latin American publicly traded airlines” means, collectively, Avianca-TACA, Copa, Gol, Grupo Aeroméxico and LATAM.
“Passenger flight segments” means the total number of passengers flown on all flight segments.
“RASM” means passenger revenue divided by ASMs.
“Revenue passenger miles” or “RPMs” means the number of miles flown by passengers.
“Ryanair” means Ryanair Holdings plc.
“SCT” means the Mexican Communications and Transportation Ministry ( Secretaría de Comunicaciones y Transportes ).
“Southwest Airlines” means Southwest Airlines Co.
“Spirit” means Spirit Airlines, Inc.
“Tiger” means Tiger Airways Holdings Limited.
“Total operating revenue per ASM,” or “TRASM” means total revenue divided by ASMs.
“TSA” means the United States Transportation Security Administration.
“Trip” means TRIP Linhas Aéreas S.A.
“ULCC” or “ultra-low-cost carrier” means an airline that belongs to a subset of low-cost carriers, which distinguishes itself by using a business model with an intense focus on low-cost, efficient asset utilization, unbundled revenue sources aside from the base fares with multiple products and services offered for additional fees. In the United States, Spirit and Allegiant define themselves as ULCCs and Volaris and VivaAerobus follow the ULCC model in Mexico.
“United” means United Continental Holdings, Inc.
“U.S.-based publicly traded target market competitors” means Alaska Air, American, Delta and United.
“VFR” means passengers who are visiting friends and relatives.
“VivaAerobus” means Aeroenlaces Nacionales, S.A. de C.V.
“Webjet” means Linhas Aéreas Econômicas.
“Wizz” means Wizz Air Holdings Plc.
 
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 PRESENTATION OF FINANCIAL AND OTHER INFORMATION
This prospectus includes our audited consolidated financial statements at December 31, 2011 and 2012 and for each of the three years in the period ended December 31, 2012, and our unaudited interim condensed consolidated financial statements as of March 31, 2013 and for the three months ended March 31, 2012 and 2013, which have been prepared in accordance with International Financial Reporting Standards, or IFRS, including International Accounting Standard 34, or IAS 34, as issued by the International Accounting Standards Board, or IASB.
Unless otherwise specified, all references to “U.S. dollars,” “dollars,” “U.S.$” or “$” are to United States dollars, the legal currency of the United States, and references to “pesos” or “Ps.” are to Mexican Pesos, the legal currency of Mexico. Except as otherwise indicated, peso amounts have been converted to U.S. dollars at the exchange rate of Ps.12.3546 per U.S.$1.00, as reported by the Mexican Central Bank ( Banco de México ) as the rate for the payment of obligations denominated in foreign currency payable in Mexico ( tipo de cambio para solventar obligaciones denominadas en moneda extranjera, pagaderas en México ) in effect on March 31, 2013. Such conversions are for the convenience of the reader and should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all. For more information on exchange rates, see “Exchange Rates.” Amounts presented in this prospectus may not add up due to rounding.
Industry and Market Data
We obtained the industry and market data used in this prospectus from research, surveys or studies conducted by third parties on our behalf, information contained in third-party publications, such as the Mexican Institute of Statistics and Geography ( Instituto Nacional de Estadística y Geografía ), or INEGI, reports from the Mexican Civil Aeronautic Authority ( Dirección General de Aeronáutica Civil ), or the DGAC, reports from the Mexican Central Bank and other publicly available sources. Third-party publications generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we believe that this data and information is reliable, we have not independently verified it. Additionally, certain market share data is based on published information available for the Mexican states. There is no comparable data available relating to the particular cities we serve. In presenting market share estimates for these cities, we have estimated the size of the market on the basis of the published information for the state in which the particular city is located. We believe this method is reasonable, but the results have not been verified by any independent source.
Other Information
Unless otherwise indicated, all information contained in this prospectus, including all references to the number of CPOs or ADSs outstanding or to the economic or voting interests of holders of CPOs or ADSs following the international and the Mexican offerings, as well as any information involving the computation of per CPO or ADS amounts or proceeds to us from the international and the Mexican offerings, assume no exercise of the over-allotment option granted to the international underwriters in respect of the international offering and the Mexican underwriters in respect of the Mexican offering.
 
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 PROSPECTUS SUMMARY
This summary highlights selected information about us and this offering. It does not contain all of the information that may be important to you. Before investing in the ADSs, you should read the entire prospectus carefully for a more complete understanding of our business and this offering, including our financial statements and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Overview
We are an ultra-low-cost carrier, or ULCC, based in Mexico. We utilize our ULCC business model and efficient operations to offer low base fares and to stimulate demand while aiming to provide high quality customer service. We target passengers who are visiting friends and relatives, or VFR, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States. Our unbundled pricing strategy allows us to provide low base fares and enables our passengers to select and pay for a range of optional products and services for additional fees. We had net income of Ps.203.3 million (U.S.$16.5 million) in 2012 and net loss of Ps.64.6 million (U.S.$5.2 million) in the three months ended March 31, 2013. In addition, our revenues were Ps.11,686.4 million (U.S.$945.9 million) in 2012 and Ps.3,061.6 million (U.S.$247.8 million) in the three months ended March 31, 2013.
Since we began operations in 2006, we have increased our routes from five to 80 and grown our cost-efficient Airbus A320 family aircraft from four to 43 as of March 31, 2013. We currently operate up to 220 daily flight segments on routes that connect 30 cities in Mexico and ten cities in the United States. We have substantial market presence in the top five airports in Mexico, based on number of passengers, comprising Cancún, Guadalajara, Mexico City, Monterrey and Tijuana. The ten cities that we serve in the United States are home to some of the most populous Mexican communities based on data from the Pew Hispanic Research Center.
We are the lowest cost carrier based on cost per available seat mile, or CASM, among publicly traded airlines in Latin America, which include Avianca-TACA, Copa, Gol, Grupo Aeroméxico and LATAM, or collectively the other Latin American publicly traded airlines. In 2012, our CASM was Ps.1.223 (U.S.$0.099), compared to an average CASM of U.S.$0.140 for the other Latin American publicly traded airlines. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air, American, Delta and United, which had an average CASM of U.S.$0.145 in 2012. With our ULCC business model, we have grown significantly while maintaining a low CASM over the last five years. We have achieved this through our efficient and uniform fleet, high asset utilization, our emphasis on direct sales and distribution and our variable, performance-based compensation structure. We have a relentless focus on low costs as part of our organizational culture, and we believe that we can further lower our CASM by deploying additional sharklet technology (a new large wingtip device, designed to improve fuel consumption, lower carbon emissions and expand the carrying capacity of the A320 family aircraft) equipped Airbus A320 aircraft and leveraging our existing infrastructure to drive economies of scale. We believe that further reductions to our CASM will allow us to continue to lower base fares, stimulate market demand and increase non-ticket revenue opportunities.
Our ULCC business model and low CASM allow us to compete principally through offering low base fares to stimulate demand. We use our yield management system to set our fares in an effort to achieve appropriate yields and load factors on each route we operate. We use promotional fares to stimulate demand and our base fares are priced to compete with long-distance bus fares in Mexico. During 2012, our average base fare was Ps.1,374 (U.S.$111) and we regularly offer promotional base fares of Ps.499 (U.S.$40) or less. Since May 2012, we have unbundled certain components of our air travel service as part of a strategy to enable our passengers to select and pay for the products and services they want to use. This unbundling strategy has allowed us to significantly grow our non-ticket and total revenue. We plan to continue to use low base fares to stimulate

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additional passenger demand, shift bus passengers to air travel and increase our load factor. In 2012, our average load factor was 82.9%, compared to an average load factor of 76.0% for the other Latin American publicly traded airlines and 83.6% for our U.S.-based publicly traded target market competitors. Higher load factors help us generate additional non-ticket and total revenue, which in turn, allow us to further lower base fares and stimulate new demand.
In addition to low fares, we also aim to deliver a high quality flying experience to our passengers. We strive to deliver on-time performance to our customers, with an 83.6% on-time performance rate in 2012. We believe that we have developed strong brand recognition due to our focus on delivering good value and a positive traveling experience to our customers. We believe that our corporate culture of positive “customer relationship management” has also been a key element of our success.
Our Markets and Growth Opportunities
Our principal target markets in Mexico and the United States are large and we believe present us with significant growth opportunities for VFR, cost-conscious business people and leisure travelers. Mexico has a population of approximately 112 million, with an estimated annual population growth rate of approximately 1.4%, according to the INEGI. In addition, Mexico is the fifth largest emerging economy worldwide and the second largest in Latin America, with an estimated gross domestic product, or GDP, of U.S.$1.30 trillion in 2012 and GDP growth of 3.9% in 2012, according to the INEGI. Mexico is projected to have GDP growth of 3.5% in 2013, according to the Mexican Central Bank. This projected GDP growth is expected to result in an increase in the number of middle-income homes in Mexico. We believe these trends are likely to lead to significant long-term growth in passenger volumes due to the strong historical correlation between economic growth and increased airline traffic.
In 2012, Mexico had 28.1 million domestic air travelers as compared to 24.4 million in 2009, which represents a three-year compound annual growth rate, or CAGR, of 4.8%. In the international market, Mexico had 28.5 million travelers in 2012 as compared to 24.2 million in 2009, which represents a three-year CAGR of 5.6%. Of those international passengers, approximately 19.4 million or 68% travelled to the United States. However, we believe that the Mexican air transportation industry still remains under-developed. Domestic and international air trips per capita in 2011, adjusted for income, were 0.46 in Mexico, compared to 1.71 in the United States, 1.78 in Panama and 0.58 in Colombia, according to the DGAC in Mexico, the Bureau of Transportation Statistics in the United States, the Civil Aviation Authority ( Autoridad Aeronáutica Civil ) in Panama and the Civil Aviation Authority ( Aeronáutica Civil ) in Colombia, respectively. We believe that substantial investments made in airport infrastructure in Mexico over the last ten years will help to sustain this expected growth.
As a key growth market, we target executive and luxury bus passengers who travel more than five hours. We have been able to successfully stimulate demand for our services among long-distance bus passengers by offering fares that are low enough to make it economical for these passengers to switch from bus to air travel. There is a large bus industry in Mexico, with total passenger segments of approximately 2.8 billion in 2012, of which approximately 74.4 million were executive and luxury passenger segments, according to the Mexican Authority of Ground Transportation ( Dirección General de Autotransporte Federal ), including both long- and short-distance travel. We believe a small shift of bus passengers to air travel would dramatically increase the number of airline passengers and bring Mexico’s air trips per capita figures closer to those of other countries in the Americas. There are limited passenger rail services in Mexico.
In the face of substantial competition, we have been able to expand our business. Since we introduced our ULCC business model in 2006, eight airlines have gone out of business in Mexico, including Grupo Mexicana, which ceased operations in 2010. We believe that we will continue to compete successfully as a result of our ULCC business model, revenue unbundling strategy, and high quality customer focus that stimulate demand.

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Our Strengths
We were established and are operated to achieve the following goals: (i) to create a profitable and sustainable business model; (ii) to successfully compete by creating structural advantages over other carriers serving Mexico through our ULCC business model; (iii) to provide affordable air travel with a high quality experience for our customers; and (iv) to create a dynamic, cost conscious and entrepreneurial working culture for our employees. We believe that our strengths are:
Lowest Cost Structure . We believe that in 2012 we had the lowest cost structure of any of the other Latin American publicly traded airlines, with CASM of Ps.1.223 (U.S.$0.099), compared to Avianca-TACA at U.S.$0.179, Copa at U.S.$0.111, Gol at U.S.$0.136, Grupo Aeroméxico at U.S.$0.157 and LATAM at U.S.$0.117. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air at U.S.$0.131, American at U.S.$0.149, Delta at U.S.$0.150 and United at U.S.$0.149 in 2012. We achieve our low operating costs in large part due to: 
 
 	•	 	Efficient and Uniform Fleet . We operate a uniform and efficient fleet of Airbus A320 family aircraft, which is the youngest fleet in Mexico, with an average aircraft age of 4.1 years as of December 31, 2012, according to information from the DGAC.	
 
 	•	 	High Asset Utilization . Our fleet has a uniform, high density seat configuration and we had one of the highest worldwide average aircraft utilization rates of 12.4 block hours per day in 2012.	
 
 	•	 	Direct Sales Distribution . We encourage our customers to purchase tickets via our website, call center or airport service desks as these distribution channels are the lowest cost to us. We sell 87% of our tickets through these channels. We do not use global distribution systems, or GDS.	
 
 	•	 	Variable, Performance-Based Compensation Structure . We compensate our employees on the basis of their performance, and we reward them for the contribution they make to the success of the company rather than their seniority.	
Ancillary Revenue Generation . We have been able to grow our non-ticket revenue by allowing our passengers to choose what additional products and services they purchase and use. Thanks to our “ Tú Decides ” (“You Decide”) strategy, we have increased average non-ticket revenue per passenger flight segment from approximately U.S.$7 in 2009 to U.S.$15 in 2012 by, among other things:
 
 	•	 	charging for excess baggage (over the 25 kilograms of free luggage required by Mexican regulations);	
 
 	•	 	utilizing our excess aircraft belly space to transport cargo;	
 
 	•	 	passing through all distribution-related expenses;	
 
 	•	 	charging for advance seat selection, extra legroom, and carriage of sports equipment;	
 
 	•	 	consistently enforcing ticketing policies, including change fees;	
 
 	•	 	generating subscription fees from our ultra-low-fare subscription service, V-Club;	
 
 	•	 	deriving brand-based fees from proprietary services, such as our Volaris affinity credit card program;	
 
 	•	 	selling itinerary attachments, such as hotel and car rental reservations and airport parking, and making available trip interruption insurance commercialized by third parties, through our website; and	
 
 	•	 	selling onboard advertising.	
Core Focus on VFR, Cost-conscious Business People and Leisure Travelers in High Growth Markets . We primarily target VFR, cost-conscious business people and leisure travelers in Mexico and the United States. We believe these people represent the highest potential for growth in our target markets. By offering low promotional fares, we stimulate demand for VFR and leisure travel, and attract new customers, including those 

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who previously may have only traveled by bus. We use our yield management system to set prices based on the time of booking. We regularly manage yield and load factor, including through targeted promotional fares that can be as low as Ps.499 (U.S.$40). We have found that many Mexicans and Mexican Americans living in the United States buy airline tickets for themselves and their family members in Mexico. In addition, we have over 15,000 points of payment throughout Mexico and the United States that allow travelers, particularly in Mexico, who do not have credit cards, or are reluctant to provide credit card information over the web or call center, to reserve seats using the web or call center and pay with cash the next day. Furthermore, we offer night flights, which appeal to our domestic and international customer base that seek to save on lodging expenses.
Disciplined Approach to Market and Route Selection . We select target markets and routes where we believe we can achieve profitability within a reasonable timeframe, and we only continue operating on routes where we can achieve and maintain our target level of profitability. When developing our route network, we focus on gaining market share on routes that have been underserved or are served primarily by higher cost airlines where we have a competitive cost advantage. We thereby stimulate new demand with low base fares and attempt to shift market share from incumbent operators. We have developed a profitable route network, on an annual basis based on the results of our most recently completed fiscal year, and built a leading market share in several of our markets. As of December 31, 2012, we had more than 50% passenger market share in 48 of our 71 routes, a 75% share in the Tijuana Airport and a 51% share in the North Pacific corridor, which consists of 12 airports in northwestern Mexico, according to DGAC. As of December 31, 2012, we faced no competition from any other carrier on 28% of our domestic seat capacity. We entered the U.S. market in July 2009 and by 2012 derived 24% of our passenger revenues from our U.S. routes and attributed 26% of our ASMs to U.S. routes. 
Market Leading Efficiency and Performance . We believe we are one of the most efficient airline carriers in Latin America. In 2012, we achieved an average passenger load factor of 82.9% and an average aircraft utilization rate of 12.4 block hours per day with a standard turnaround time between flights of approximately 35 minutes. For our fleet type, our average aircraft utilization rate of 12.4 block hours per day was among the highest worldwide and was 46% higher than the industry average of 8.5 block hours per day for all Airbus A319 aircraft and 36% higher than the 9.1 block hours per day for all Airbus A320 aircraft, according to information for the year ended December 31, 2012 available from Airbus. The high-density, single-class seating configurations on our aircraft allow us to increase ASMs and reduce fixed costs per seat as compared to a lower density configuration flown by certain of our competitors. In addition, we strive for market-leading operational performance, with an 83.6% on-time performance rate, 99.7% flight completion rate and a mishandled baggage rate of only 1.92 bags per 1,000 passengers in 2012.
Brand Recognition with a Fast Growing Fan Base . We believe that we have developed strong brand recognition due to our focus on delivering good value and a positive traveling experience to our customers. According to a 2011 study made with data obtained from Facebook and published in the magazine Merca 2.0 ® , we have one of the fastest growing fan bases and number of followers on social media sites in Mexico. As of May 13, 2013, we had approximately 566,620 total followers on Facebook and 348,800 total followers on Twitter, both of which we primarily use for marketing and promotion. In addition, according to a study of the most socially devoted brands and industries on Facebook by Socialbakers, we ranked first among airlines for customer care in social media in 2012. Our social media reach has been a very low cost, yet effective, marketing tool for us and has afforded us the capability to develop highly effective, targeted marketing promotions on a very short notice. We have also established various programs to make air travel more inviting for first time travelers and other passengers who may desire extra services, such as an unaccompanied senior program. 
Balance Sheet Positioned for Growth . We have a low level of financial debt, since we have principally financed our operations through equity and operating cash flows and we have only used operating leases for our aircraft. Proceeds from the global offering will also further strengthen our balance sheet. We believe that our strong financial position enables us to prudently finance the emerging growth opportunities in our markets and to defend our existing network from our competitors.

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Strong Company Culture, Experienced Management Team and Principal Shareholders . We have developed a strong company culture among our employees that is focused on safety, meritocracy, efficiency and profitability, with a significant component of performance-based variable compensation. From 2009 through 2013, we were named a “Great Place to Work” by the Great Place to Work Institute de México, S.A. de C.V., or the Great Place to Work Institute in Mexico. Our management team, the majority of which has been with us since our inception, has been assembled with experienced executives in their respective fields, including in the aviation, sales and marketing, finance or IT industries in Latin America. In addition, our principal shareholders have extensive prior experience in funding, establishing and leading airline carriers around the world. Their expertise has helped us develop our ULCC business model and allowed us to benefit from their procurement power and relationships with key vendors.
Our Growth Strategy
Our goal is to continue to grow profitability on an annual basis and maintain our leadership position in the Mexican aviation market by operating our ULCC business model and focusing on VFR, cost-conscious business people and leisure travelers. The key elements of our growth strategy include:
Remain the Low Cost Carrier of Choice . We believe that by deploying additional cost-efficient Airbus A320 aircraft with higher seat density, spreading our low fixed cost infrastructure over a larger scale of operations, outsourcing operating functions and keeping sales and marketing overhead low, we can continue to improve operating efficiencies while maintaining low costs. Our ULCC business model enables us to operate profitably, on an annual basis based on the results of our most recently completed fiscal year, at low fare levels, and we intend to continue to maintain low fares to stimulate demand. We also make flying easy and strive to remain the low-cost carrier of choice for our existing and new customers as we continue to focus on providing an affordable and high quality travel experience to our customers across our expanding operations in Mexico and the United States.
Grow Non-ticket Revenue while Maintaining Low Base Fare to Stimulate Demand . We intend to increase our non-ticket revenues by further unbundling our fare structure and by offering our passengers new and innovative products and services. Through our multiple points of interaction with our customers during each stage of their travel, from ticket purchase through flight and post-trip, we have the opportunity to offer third party products, such as hotel rooms, car rentals and trip interruption insurance, on which we receive commissions. In addition, we plan to start selling in-flight products and to introduce and expand upon products and services that are unrelated to passenger travel. In June 2012, we started a membership based ultra-low-fare subscription service called V-Club which had approximately 35,200 members as of December 31, 2012. We intend to generate additional fees from proprietary brand-based services such as the Volaris affinity card which was introduced in January 2013. We also continue to aggressively expand the cargo transportation services we provide on our aircraft. As we broaden our ancillary products and services and increase our non-ticket revenue, we believe that we will be able to further lower base fares and continue to stimulate demand.
Gain Additional Market Share by Stimulating Demand in our Existing Markets . We plan to continue to grow our existing markets by adding routes that connect cities in which we currently have operations and by adding capacity on existing routes where we believe we can continue to stimulate demand. We also intend to continue to aggressively target long-distance bus passengers who we believe may shift to airplane travel. We set certain promotional fares at prices lower than bus fares for similar routes, and we believe this will encourage bus travelers to switch to air travel.
Continue our Disciplined Fleet Growth . We have firm commitments for 49 sharklet technology equipped Airbus A320 aircraft that will be delivered over the next eight years, including 30 of the next generation Airbus A320 new engine option, or NEO. We have obtained committed financing for the pre-delivery payments for the deliveries through December 2014. We also plan to grow from 17 Airbus A320 aircraft in 2012 to all Airbus A320 in 2020, each configured with 174 passenger seats, resulting in a 21% increase in the number of seats per 

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aircraft as compared to the smaller A319 with 144 passenger seats. Consistent with our ULCC model, our new Airbus A320 aircraft offers 16% more passenger seats than Interjet, one of our competitors that offers 150 passenger seats per Airbus A320 aircraft. Our contracts provide that new aircraft will be equipped with fuel-saving sharklet technology and eventually NEOs, and will replace certain aircraft that are going off-lease. We believe that a disciplined ramp-up in young and efficient aircraft as our market share expands reduces the risk of over extension and our exposure to market conditions. We intend to maintain our commitment to a single fleet type because we believe it is the most efficient option for our markets and operations.
Grow Passenger Volume by Profitably Establishing New Routes . We believe our focus on low fares and customer service will stimulate growth in overpriced, underserved and inefficient new markets. We will continue our disciplined approach to domestic and international market entry by using our rigorous selection process where we identify and survey possible target markets that have the potential to be profitable within our business model. For example, in February 2013, we added two new routes from Mexico City to Mérida and Tuxla Gutiérrez in response to strong market demographics and opportunities for market stimulation. As part of our continuous monitoring of routes and markets for profitability, we have a proven track record of withdrawing routes that do not meet our profitability expectations. For our future growth opportunities, we have identified approximately 180 routes within Mexico serving markets in excess of 250,000 inhabitants and other leisure destinations, and that have stage lengths of at least 170 miles, and approximately 150 routes internationally that have stage lengths of at least 200 miles.
Corporate and Other Information
We are a sociedad anónima bursátil de capital variable , or a variable capital public stock corporation, organized under the laws of Mexico. Our headquarters are located at Av. Antonio Dovalí Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fe, México, D.F. 01210 and our general phone number is +(52) 55-5261-6400. Our website address (the contents of which are not part of, and are not incorporated into, this prospectus) is www.volaris.com . 
Although we currently meet the emerging growth company definition under the Jumpstart Our Business Startups Act, or the JOBS Act, we have decided not to avail ourselves of any benefits resulting therefrom. We will cease to meet such definition when our total annual gross revenues are more than U.S.$1 billion during our most recently completed fiscal year.

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 THE OFFERING
 
Issuer	Controladora Vuela Compañía de Aviación, S.A.B. de C.V.	
 
Selling shareholders	Discovery Air Investments, L.P., HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Emisión de Certificados Bursátiles F/262374, Blue Sky Investments, S.à r.l., Emilio Diez Barroso Azcárraga, Ignacio Guerra Pellegaud, Pedro Carlos Aspe Armella, Alfredo Castellanos Heuer, María Eugenia Braña Escalera, Sergio Sánchez García, Carlos Fernández González, Indigo Mexico Coöperatief U.A., Long Bar LatAm LLC, Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, Fideicomiso de Administración y Custodia denominado como “DAIIMX/VOLARIS” e identificado bajo el número F/1405 and HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Administración número F/307750.	
 
Global offering	The global offering consists of the international offering and the concurrent Mexican offering. The closing of the international and Mexican offerings are conditioned upon each other.	
 
International offering	We are offering                    CPOs in the form of ADSs, and the selling shareholders are offering                    CPOs in the form of ADSs through the international underwriters in the United States and countries other than Mexico.	
 
Mexican offering	Concurrently with the international offering, we are offering            Series A shares and the selling shareholders are offering                Series A shares in Mexico in a public offering approved by the CNBV conducted by the lead Mexican underwriters through a Spanish-language Mexican prospectus.	
 
Offering price range	U.S.$         and U.S.$         per ADS, and U.S.$         and U.S.$         per CPO.	
 
Share capital after global offering	Immediately after the global offering, we will have an aggregate of 865,494,296 Series A shares (some of which underlie CPOs and ADSs) and an aggregate of 134,020,471 Series B shares, totaling an aggregate of 999,514,767 shares outstanding. The Series B shares will be convertible into Series A shares at any time or upon their transfer to any person other than to our principal shareholders (or their affiliates) that originally held Series B shares or their affiliates. The Series A shares will represent 51% and the Series B shares will represent 49% of our outstanding capital stock (excluding Series A shares underlying CPOs) immediately after the global offering. CPOs may represent up to 90% of our outstanding capital stock and may only have Series A shares as underlying securities.	
 
Over-allotment options	The selling shareholders have granted to each of the international underwriters and the Mexican underwriters independent options,	

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 	exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of                      additional CPOs in the form of ADSs and                      additional Series A shares, respectively, at the public offering prices listed on the cover page of this prospectus, less underwriting discounts and commissions. The international underwriters and the Mexican underwriters may exercise these options solely for the purpose of covering over-allotments, if any, made in connection with the offering of the ADSs and Series A shares offered by this prospectus and the Mexican prospectus, respectively, on an independent but coordinated basis.	
 
CPOs	Each CPO represents a financial interest in one Series A share. The CPO trustee, Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, or NAFIN, will issue the CPOs as trustee under the CPO trust agreement and pursuant to a CPO trust deed.	
 
ADSs	Each ADS represents ten CPOs. The ADSs initially will be evidenced by one or more ADRs. The ADSs will be issued under a deposit agreement among us, The Bank of New York Mellon, as depositary, and the registered holders and beneficial owners from time to time of ADSs issued thereunder.	
 
Use of proceeds	We estimate that the net proceeds that we will receive from the global offering will be U.S.$         million. We currently intend to use the net proceeds from the global offering for the repayment of indebtedness and for general corporate purposes, including pre-delivery payments of aircraft. We will not receive any proceeds from the sale of Series A shares or ADSs by the selling shareholders. See “Use of Proceeds.”	
 
Listing and registry	We have applied to list the ADSs on the New York Stock Exchange under the symbol “VLRS.” We have applied to list the Series A shares on the Mexican Stock Exchange under the symbol “VOLAR.” We have applied to register the Series A shares in the RNV maintained by the CNBV. Our Series B Shares will not be listed or registered, and the CPOs will only be registered with the SEC and will not be listed.	
 
Voting rights of our shares	Holders of ADSs or CPOs will not be entitled to vote, at any time, the underlying Series A shares.	
 
 	Mexican holders of Series A shares will be entitled to vote their shares on all matters. The CPO trustee will vote the CPOs in accordance with the vote of the majority of the outstanding Series A shares voted by Mexicans at the relevant shareholders’ meeting.	
 
 	Holders of Series B shares will be entitled to vote their shares on all matters and, for so long as such Series B shares represent 12% or more of our outstanding capital stock, their affirmative vote will be required to approve any matters related to (i) by-law amendments affecting Series B shares, (ii) delisting of Series A shares from any	

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 	stock exchange, (iii) mergers or spinoffs affecting us, (iv) incurring indebtedness or granting guarantees if the Lease-Adjusted Net Debt to EBIDTAR ratio exceeds 4.25 times in 2013 and 3.25 times thereafter (Lease-Adjusted Net Debt is the sum of short-term and long-term debt, 7.0 times the aircraft rentals for the last four quarters, less cash and cash equivalents at the end of the last quarter for which financial statements have been prepared), and (v) material change of accounting policies. See “Description of Capital Stock—Shareholders’ Meetings.”	
 
 	Holders of Series B shares have the right to elect three directors, so long as such Series B shares represent 12% or more of our outstanding capital stock.	
 
 	Holders of Series A shares have the right to elect one director for each 10% block of our outstanding capital stock.	
 
Ownership limitations	As required by Mexican law, our by-laws provide that no transfer of shares of our capital stock to or acquisition or subscription of shares of our capital stock by an investor deemed to be non-Mexican will be permitted if such transfer, acquisition or subscription would result in non-Mexicans holding directly (not considering non-Mexicans holding ADSs or CPOs having underlying Series A shares) in excess of 49% of the total number of shares of our capital stock then outstanding not held by the CPO trustee (i.e., both Series A and Series B shares). Series B shares do not exceed such limit and are held by our non-Mexican principal shareholders. Immediately following the global offering, our outstanding capital stock will consist exclusively of common stock comprised of Series A shares and Series B shares. Series B shares are convertible, at any time, into Series A shares. Non-Mexicans will not be entitled to directly hold Series A shares. Mexican holders of ADSs will be entitled to withdraw the underlying CPOs and exchange such CPOs for Series A shares. See “Description of Capital Stock—Ownership Restrictions,” “Description of Capital Stock—Other Provisions—Foreign Investment Regulations” and “Description of CPOs.”	
 
Change of Control	Provisions of Mexican law and our by-laws may make it difficult and costly for a third-party to pursue a tender offer or takeover attempt resulting in a change of control. Our by-laws contain provisions which, among other things, require approval of our board of directors prior to any person or group of persons acquiring, directly or indirectly, (i) 5% or more of our shares (whether directly or by acquiring ADSs or CPOs), or (ii) 20% or more of our shares (whether directly or by acquiring ADSs or CPOs) and in the case of this item (ii) if such approval is obtained, require the acquiring person to make a tender offer to purchase 100% of our shares and CPOs (or other securities that represent them) at a substantial premium over the market price of our shares to be determined by our board of directors, based upon the advice of a financial advisor. These provisions could substantially impede the ability of a third party to control us, and could be detrimental to shareholders willing to benefit from any	

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 	change of control premium paid on the sale of the company in connection with a tender offer. See “Description of Capital Stock—Change of Control Provisions,” “Description of Capital Stock—Ownership Restrictions,” “Description of Capital Stock—Voting Rights” and “Description of Capital Stock—Other Provisions—Foreign Investment Regulations.”	
 
Dividends	We have not paid any cash dividends in the past and do not expect to pay any cash dividends on our common stock for the foreseeable future. We currently intend to retain any additional future earnings to finance our operations and growth. In addition, our revolving line of credit with Banco Santander (México) S.A., Institución de Banca Múltiple, Grupo Financiero Santander, or Banco Santander México, and Banco Nacional de Comercio Exterior, S.N.C., or Bancomext, may limit our ability to declare and pay dividends in the event that we fail to comply with the payment terms thereunder. See “Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Loan Agreements.”	
 
Taxation	Under current Mexican law, dividends paid to holders of ADSs who are not residents of Mexico for tax purposes, and the sale of ADSs by holders who are not residents of Mexico for tax purposes are generally not subject to any Mexican withholding or other similar tax if the sale is conducted on a recognized stock exchange. See “Taxation.”	
 
Lock-up agreement	We, the selling shareholders, our executive officers and certain of our directors and other shareholders, who beneficially own substantially all of the shares of our common stock, have agreed that, subject to certain limited exceptions, we and they will not offer, pledge, sell, lend or otherwise transfer until 180 days after the date of this prospectus any ADSs, CPOs, Series A shares or Series B shares or any options or warrants to purchase the ADSs, CPOs, Series A shares or Series B shares, or any securities convertible into, or exchangeable for, or that represent the right to receive, ADSs, CPOs, Series A shares or Series B shares. In addition, in the event that either (i) during the last 17 days of the “lock-up” period, we release earnings results or material news or a material event relating to us occurs or (ii) prior to the expiration of the “lock-up” period, we announce that we will release earnings results during the 16-day period beginning on the last day of the “lock-up” period, then in either case the expiration of the “lock-up” will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC waive in writing such an extension. See “Underwriting.”	
 
Risk factors	See “Risk Factors” beginning on page 16 and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in the ADSs.	

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 SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA
The following tables summarize the financial and operating data for our business for the periods presented. You should read this summary consolidated financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, all included elsewhere in this prospectus. We prepare our consolidated financial statements in accordance with IFRS and IAS 34.
We derived the summary consolidated statements of operations data for the years ended December 31, 2010, 2011 and 2012 and the summary consolidated statements of financial position data as of December 31, 2011 and 2012 from our audited financial statements included in this prospectus. We derived the summary consolidated statements of financial position data as of December 31, 2010 from our historical consolidated financial statements not included herein. We derived the summary consolidated statements of operations data for the three months ended March 31, 2012 and 2013 and the summary consolidated statements of financial position data as of March 31, 2013 from our unaudited interim condensed consolidated financial statements included in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos, except share and
per share data and operating data)	 	 	(in thousands of
U.S. dollars) (1)	 	 	(unaudited in thousands of
pesos, except share and per
share data and operating data)	 	 	(unaudited in
thousands of  U.S.
dollars) (1)	 	
CONSOLIDATED STATEMENTS OF OPERATIONS	 				 				 				 				 				 				 				
Operating revenues:	 				 				 				 				 				 				 				
Passenger	 	 	6,278,469	  	 	 	8,036,275	  	 	 	10,176,747	  	 	 	823,721	  	 	 	2,099,908	  	 	 	2,587,535	  	 	 	209,439	  	
Non-ticket	 	 	498,921	  	 	 	842,341	  	 	 	1,509,668	  	 	 	122,195	  	 	 	312,241	  	 	 	474,052	  	 	 	38,370	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	6,777,390	  	 	 	8,878,616	  	 	 	11,686,415	  	 	 	945,916	  	 	 	2,412,149	  	 	 	3,061,587	  	 	 	247,809	  	
Other operating income	 	 	(158	) 	 	 	(73,831	) 	 	 	(68,800	) 	 	 	(5,569	) 	 	 	(19,413	) 	 	 	(24,240	) 	 	 	(1,962	) 	
Fuel	 	 	2,146,011	  	 	 	3,823,232	  	 	 	4,730,089	  	 	 	382,861	  	 	 	1,088,405	  	 	 	1,198,628	  	 	 	97,019	  	
Aircraft rent	 	 	1,197,022	  	 	 	1,508,135	  	 	 	1,885,696	  	 	 	152,631	  	 	 	445,508	  	 	 	514,297	  	 	 	41,628	  	
Salaries and benefits	 	 	852,123	  	 	 	1,120,359	  	 	 	1,302,971	  	 	 	105,464	  	 	 	296,836	  	 	 	362,840	  	 	 	29,369	  	
Landing, take-off and navigation expenses	 	 	867,690	  	 	 	1,281,583	  	 	 	1,639,945	  	 	 	132,740	  	 	 	370,961	  	 	 	460,772	  	 	 	37,296	  	
Sales, marketing and distribution expenses (2)	 	 	615,431	  	 	 	750,474	  	 	 	751,919	  	 	 	60,861	  	 	 	162,739	  	 	 	186,573	  	 	 	15,101	  	
Maintenance expenses (3)	 	 	276,128	  	 	 	379,626	  	 	 	498,836	  	 	 	40,377	  	 	 	116,242	  	 	 	141,268	  	 	 	11,434	  	
Other operating expenses 	 	 	255,413	  	 	 	359,046	  	 	 	356,517	  	 	 	28,857	  	 	 	74,981	  	 	 	102,227	  	 	 	8,274	  	
Depreciation and amortization (4)	 	 	56,572	  	 	 	102,977	  	 	 	211,002	  	 	 	17,079	  	 	 	41,678	  	 	 	81,245	  	 	 	6,576	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	6,266,232	  	 	 	9,251,601	  	 	 	11,308,175	  	 	 	915,301	  	 	 	2,577,937	  	 	 	3,023,610	  	 	 	244,376	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	 	511,158	  	 	 	(372,985	) 	 	 	378,240	  	 	 	30,615	  	 	 	(165,788	) 	 	 	37,977	  	 	 	3,074	  	
Finance income	 	 	5,091	  	 	 	5,539	  	 	 	13,611	  	 	 	1,102	  	 	 	2,616	  	 	 	4,355	  	 	 	353	  	
Finance cost	 	 	(52,221	) 	 	 	(57,718	) 	 	 	(89,731	) 	 	 	(7,263	) 	 	 	(18,769	) 	 	 	(18,415	) 	 	 	(1,491	) 	
Exchange (loss) gain, net	 	 	(56,144	) 	 	 	110,150	  	 	 	(95,322	) 	 	 	(7,716	) 	 	 	(87,812	) 	 	 	(107,830	) 	 	 	(8,728	) 	
Other financing cost	 	 	(3,455	) 	 	 	—  	 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	(106,729	) 	 	 	57,971	  	 	 	(171,442	) 	 	 	(13,877	) 	 	 	(103,965	) 	 	 	(121,890	) 	 	 	(9,866	) 	
Income (loss) before income tax	 	 	404,429	  	 	 	(315,014	) 	 	 	206,798	  	 	 	16,738	  	 	 	(269,753	) 	 	 	(83,913	) 	 	 	(6,792	) 	
Income tax benefit (expense)	 	 	238,684	  	 	 	(476	) 	 	 	(3,481	) 	 	 	(281	) 	 	 	4,532	  	 	 	19,291	  	 	 	1,561	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	

 
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 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos, except share and
per share data and operating data)	 	 	(in thousands of
U.S. dollars) (1)	 	 	(unaudited in thousands of pesos,
except share and per share
data and operating data)	 	 	(unaudited in
thousands of  U.S.
dollars) (1)	 	
Attribution of net income (loss):	 				 				 				 				 				 				 				
Equity holders of the parent	 	 	572,234	  	 	 	(293,540	) 	 	 	215,239	  	 	 	17,422	  	 	 	(222,940	) 	 	 	(62,286	) 	 	 	(5,042	) 	
Non-controlling interest	 	 	70,879	  	 	 	(21,950	) 	 	 	(11,922	) 	 	 	(965	) 	 	 	(42,281	) 	 	 	(2,336	) 	 	 	(189	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding	 				 				 				 				 				 				 				
Basic and diluted (5)	 	 	727,595,544	  	 	 	727,595,544	  	 	 	732,441,216	  	 	 	—  	  	 	 	727,595,544	  	 	 	796,916,380	  	 	 	—  	  	
Earnings (loss) per share	 				 				 				 				 				 				 				
Basic and diluted (5)	 	 	0.000786	  	 	 	(0.000403	) 	 	 	0.000294	  	 	 	0.000024	  	 	 	(0.000306	) 	 	 	(0.000078	) 	 	 	(0.000006	) 	
Pro forma weighted average shares outstanding	 				 				 				 				 				 				 				
Basic (6)	 	 	—  	  	 	 	—  	  	 	 	893,156,216	  	 	 	—  	  	 	 	—  	  	 	 	957,631,380	  	 	 	—  	  	
Diluted (7)	 	 	—  	  	 	 	—  	  	 	 	935,039,603	  	 	 	—  	  	 	 	—  	  	 	 	999,514,767	  	 	 	—  	  	
Pro forma earnings per share	 				 				 				 				 				 				 				
Basic (6)	 	 	—  	  	 	 	—  	  	 	 	0.000298	  	 	 	0.000024	 	 	 	—  	  	 	 	(0.000046)	  	 	 	(0.000004)	  	
Diluted (7)	 	 	—  	  	 	 	—  	  	 	 	0.000284	  	 	 	0.000023	 	 	 	—  	  	 	 	(0.000044)	  	 	 	(0.000004)	  	
Pro forma earnings per ADS	 	 	—  	  	 	 	—  	  	 				 				 	 	—  	  	 				 				
Basic (8)	 	 	—  	  	 	 	—  	  	 	 	0.002976	  	 	 	0.000241	 	 	 	—  	  	 	 	(0.000464)	  	 	 	(0.000038)	  	
Diluted (9)	 	 	—  	  	 	 	—  	  	 	 	0.002842	  	 	 	0.000230	 	 	 	—  	  	 	 	(0.000445)	  	 	 	(0.000036)	  	
								
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	 				 				 				 				 				 				 				
Cash and cash equivalents	 	 	676,913	  	 	 	441,068	  	 	 	822,076	  	 	 	66,540	  	 	 	687,083	  	 	 	925,898	  	 	 	74,944	  	
Accounts receivable, net	 	 	202,525	  	 	 	238,939	  	 	 	387,316	  	 	 	31,350	  	 	 	315,083	  	 	 	638,504	  	 	 	51,682	  	
Guarantee deposits—current portion	 	 	330,071	  	 	 	169,647	  	 	 	238,242	  	 	 	19,285	  	 	 	203,815	  	 	 	284,135	  	 	 	22,998	  	
Total current assets	 	 	1,396,808	  	 	 	1,130,547	  	 	 	1,815,018	  	 	 	146,911	  	 	 	1,517,046	  	 	 	2,234,344	  	 	 	180,852	  	
Total assets	 	 	3,700,631	  	 	 	5,061,681	  	 	 	5,701,558	  	 	 	461,494	  	 	 	5,429,923	  	 	 	6,027,846	  	 	 	487,902	  	
Short-term liabilities	 	 	1,927,096	  	 	 	3,178,922	  	 	 	3,721,897	  	 	 	301,257	  	 	 	3,747,351	  	 	 	4,199,941	  	 	 	339,949	  	
Long-term liabilities	 	 	547,528	  	 	 	1,023,020	  	 	 	904,994	  	 	 	73,252	  	 	 	1,075,056	  	 	 	808,482	  	 	 	65,440	  	
Total liabilities	 	 	2,474,624	  	 	 	4,201,942	  	 	 	4,626,891	  	 	 	374,509	  	 	 	4,822,407	  	 	 	5,008,423	  	 	 	405,389	  	
Capital stock	 	 	1,966,313	  	 	 	1,966,313	  	 	 	2,376,098	  	 	 	192,325	  	 	 	1,966,313	  	 	 	2,376,098	  	 	 	192,325	  	
Total equity	 	 	1,226,007	  	 	 	859,739	  	 	 	1,074,667	  	 	 	86,985	  	 	 	607,516	  	 	 	1,019,423	  	 	 	82,513	  	
								
CASH FLOW DATA	 				 				 				 				 				 				 				
Net cash flows provided by (used in) operating activities	 	 	539,001	  	 	 	(147,705	) 	 	 	497,448	  	 	 	40,263	  	 	 	262,471	  	 	 	271,606	  	 	 	21,983	  	
Net cash flows (used in) provided by investing activities	 	 	(321,347	) 	 	 	(628,030	) 	 	 	187,161	  	 	 	15,150	  	 	 	(78,230	) 	 	 	61,863	  	 	 	5,007	  	
Net cash flows (used in) provided by financing activities	 	 	(90,065	) 	 	 	562,373	  	 	 	(271,898	) 	 	 	(22,008	) 	 	 	43,307	  	 	 	(204,281	) 	 	 	(16,535	) 	
								
OTHER FINANCIAL DATA	 				 				 				 				 				 				 				
EBITDA (10)	 	 	513,250	  	 	 	(159,858	) 	 	 	493,920	  	 	 	39,978	  	 	 	(211,922	) 	 	 	11,392	  	 	 	922	  	
Adjusted EBITDA (10)	 	 	572,849	  	 	 	(270,008	) 	 	 	589,242	  	 	 	47,694	  	 	 	(124,110	) 	 	 	119,222	  	 	 	9,650	  	
Adjusted EBITDAR (10)	 	 	1,769,871	  	 	 	1,238,127	  	 	 	2,474,938	  	 	 	200,325	  	 	 	321,398	  	 	 	633,519	  	 	 	51,278	  	

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 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos, except share and
per share data and operating data)	 	 	(in thousands of
U.S. dollars) (1)	 	 	(unaudited in thousands of pesos,
except share and per share
data and operating data)	 	 	(unaudited in
thousands of  U.S.
dollars) (1)	 	
OPERATING DATA (11)	 				 				 				 				 				 				 				
Aircraft at end of period	 	 	26	  	 	 	34	  	 	 	41	  	 	 	—  	  	 	 	35	  	 	 	43	  	 	 	—  	  	
Average daily aircraft utilization (block hours)	 	 	12.99	  	 	 	13.38	  	 	 	12.40	  	 	 	—  	  	 	 	12.07	  	 	 	11.86	  	 	 	—  	  	
Average daily aircraft utilization (flight hours)	 	 	11.33	  	 	 	11.38	  	 	 	10.42	  	 	 	—  	  	 	 	10.28	  	 	 	9.93	  	 	 	—  	  	
Airports served at end of period	 	 	29	  	 	 	31	  	 	 	37	  	 	 	—  	  	 	 	31	  	 	 	39	  	 	 	—  	  	
Departures	 	 	38,740	  	 	 	51,255	  	 	 	58,806	  	 	 	—  	  	 	 	13,090	  	 	 	15,699	  	 	 	—  	  	
Average stage length (miles)	 	 	1,038	  	 	 	1,042	  	 	 	1,023	  	 	 	—  	  	 	 	1,052	  	 	 	1,007	  	 	 	—  	  	
Passenger flight segments (thousands)	 	 	4,200	  	 	 	5,644	  	 	 	7,037	  	 	 	—  	  	 	 	1,511	  	 	 	1,868	  	 	 	—  	  	
Booked passengers (thousands)	 	 	4,416	  	 	 	5,934	  	 	 	7,408	  	 	 	—  	  	 	 	1,601	  	 	 	1,961	  	 	 	—  	  	
Revenue passenger miles (RPMs) (thousands)	 	 	4,628,014	  	 	 	6,290,707	  	 	 	7,668,202	  	 	 	—  	  	 	 	1,702,655	  	 	 	2,000,245	  	 	 	—  	  	
Available seat miles (ASMs) (thousands)	 	 	5,853,823	  	 	 	7,939,365	  	 	 	9,244,425	  	 	 	—  	  	 	 	2,100,551	  	 	 	2,474,978	  	 	 	—  	  	
Load factor	 	 	79	% 	 	 	79	% 	 	 	83	% 	 	 	—  	  	 	 	81	% 	 	 	81	% 	 	 	—  	  	
Average ticket revenue per booked passenger	 	 	1,422	  	 	 	1,354	  	 	 	1,374	  	 	 	111.2	  	 	 	1,312	  	 	 	1,320	  	 	 	106.8	  	
Total operating revenue per ASM (TRASM) (cents)	 	 	115.8	  	 	 	111.8	  	 	 	126.4	  	 	 	10.2	  	 	 	114.8	  	 	 	123.7	  	 	 	10.0	  	
Passenger revenue per ASM (RASM) (cents)	 	 	107.3	  	 	 	101.2	  	 	 	110.1	  	 	 	8.9	  	 	 	100.0	  	 	 	104.5	  	 	 	8.5	  	
Operating expenses per ASM (CASM) (cents)	 	 	107.0	  	 	 	116.5	  	 	 	122.3	  	 	 	9.9	  	 	 	122.7	  	 	 	122.2	  	 	 	9.9	  	
CASM ex fuel (cents)	 	 	70.4	  	 	 	68.4	  	 	 	71.2	  	 	 	5.8	  	 	 	70.9	  	 	 	73.7	  	 	 	6.0	  	
Fuel gallons consumed (thousands)	 	 	74,075	  	 	 	97,970	  	 	 	112,225	  	 	 	—  	  	 	 	25,260	  	 	 	29,181	  	 	 	—  	  	
Average economic fuel cost per gallon	 	 	29.0	  	 	 	39.0	  	 	 	42.1	  	 	 	3.4	  	 	 	43.1	  	 	 	41.1	  	 	 	3.3	  	
Employees per aircraft at end of period	 	 	71	  	 	 	67	  	 	 	63	  	 	 	—  	  	 	 	68	  	 	 	60	  	 	 	—  	  	

*	We decided to restate our consolidated financial statements as detailed in note 1(u) to our audited consolidated financial statements and note 2 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.	
(1)	Peso amounts were converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.12.3546 per U.S.$1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such conversions should not be construed as a representation that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all.	
(2)	Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5.1 million. These amounts were recognized in sales, marketing and distribution expenses. See note 11 to our consolidated financial statements included elsewhere in this prospectus.	
(3)	Includes routine and ordinary maintenance expenses only. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Description of Our Principal Line Items.”	
(4)	Includes, among other things, major maintenance expenses, which are capitalized and subsequently amortized. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Description of Our Principal Line Items.”	
(5)	Unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and non-dilutive at such date, and accordingly, they have been excluded in the determination of weighted average diluted shares outstanding and disregarded in the calculation of diluted earnings per share.	
(6)	The basis used for the computation of the pro forma information in respect of basic shares for the year ended December 31, 2012 is as follows: (i) Ps.215.2 million of net income attributed to equity holders of the parent in 2012 plus an aggregate of Ps.50.5 million in accrued interest in 2012 under the loans with Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa, or Banco Inbursa, International Finance Corporation, or IFC, and Pasprot, S.A. de C.V., or Pasprot, for an aggregate principal amount of Ps.390.5	

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 	million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 893,156,216, which is the weighted average of basic shares outstanding in 2012 equal to 732,441,216 plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.390.5 million.	
    	The basis used for the computation of the pro forma information in respect of basic shares for the three months ended March 31, 2013 is as follows: (i) Ps.62.3 million of net loss attributed to equity holders of the parent for the three months ended March 31, 2013 plus an aggregate of Ps.17.8 million in accrued interest for the three months ended March 31, 2013 under the loans with Banco Inbursa, IFC and Pasprot for an aggregate principal amount of Ps.383.9 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 957,631,380, which is the weighted average of basic shares outstanding for the three months ended March 31, 2013 equal to 796,916,380 plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.383.9 million.	
(7)	The basis used for the computation of the pro forma information in respect of diluted shares for the year ended December 31, 2012 additionally gives effect to the shares subject to the management incentive plan and our swap shares and is as follows: (i) Ps.215.2 million of net income attributed to equity holders of the parent in 2012 plus an aggregate of Ps.50.5 million in accrued interest in 2012 under the loans with Banco Inbursa, IFC, and Pasprot, for an aggregate principal amount of Ps.390.5 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 935,039,603, which is the pro forma weighted average of diluted shares outstanding in 2012 equal to 774,324,603 (i.e., the unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and have been included in the determination of the pro forma weighted average diluted shares outstanding and in the calculation of pro forma diluted earnings per share) plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.390.5 million.	
    	The basis used for the computation of the pro forma information in respect of diluted shares for the three months ended March 31, 2013 additionally gives effect to the shares subject to the management incentive plan and our swap shares and is as follows: (i) Ps.62.3 million of net loss attributed to equity holders of the parent for the three months ended March 31, 2013 plus an aggregate of Ps.17.8 million in accrued interest for the three months ended March 31, 2013 under the loans with Banco Inbursa, IFC and Pasprot for an aggregate principal amount of Ps.383.9 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 999,514,767, which is the weighted average of diluted shares outstanding for the three months ended March 31, 2013 equal to 838,799,767 (i.e., the unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and have been included in the determination of the pro forma weighted average diluted shares outstanding and in the calculation of pro forma diluted earnings per share) plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.383.9 million.	
(8)	The basis used for the computation of the pro forma information is to multiply the pro forma earnings per basic share obtained pursuant to footnote (6) above by ten, which is the number of CPOs represented by each ADS. Each CPO, in turn, represents a financial interest in one Series A share of common stock of Volaris.	
(9)	The basis used for the computation of the pro forma information is to multiply the pro forma earnings per diluted share obtained pursuant to footnote (7) above by ten, which is the number of CPOs represented by each ADS. Each CPO, in turn, represents a financial interest in one Series A share of common stock of Volaris.	
(10)	EBITDA, Adjusted EBITDA and Adjusted EBITDAR are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR are well recognized performance measurements in the airline industry that are frequently used by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry. However, because derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not determined in accordance with IFRS, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR as presented may not be directly comparable to similarly titled measures presented by other companies.	
(11)	See “Glossary of Airlines and Airline Terms” elsewhere in this prospectus for definitions of terms used in this table.	

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The following table represents the reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR to net (loss) income for the periods indicated below:

 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2010	 	 	2011
(Restated) (*)	 	 	2012	 	 	2012	 	 	2012	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos)	 	 	(in thousands of
U.S. dollars) (1)	 	 	(unaudited in thousands
of pesos, except per
share and share
amounts)	 	 	(unaudited
in thousands
of U.S.
dollars) (1)	 	
Reconciliation:	 				 				 				 				 				 				 				
Net income (loss)	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	
Plus (minus):	 				 				 				 				 				 				 				
Finance cost	 	 	52,221	  	 	 	57,718	  	 	 	89,731	  	 	 	7,263	  	 	 	18,769	  	 	 	18,415	  	 	 	1,491	  	
Finance income	 	 	(5,091	) 	 	 	(5,539	) 	 	 	(13,611	) 	 	 	(1,102	) 	 	 	(2,616	) 	 	 	(4,355	) 	 	 	(353	) 	
(Benefit)/provision for income tax	 	 	(238,684	) 	 	 	476	  	 	 	3,481	  	 	 	281	  	 	 	(4,532	) 	 	 	(19,291	) 	 	 	(1,561	) 	
Depreciation and amortization	 	 	56,572	  	 	 	102,977	  	 	 	211,002	  	 	 	17,079	  	 	 	41,678	  	 	 	81,245	  	 	 	6,576	  	
Business alliance amortization	 	 	5,119	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	 	 	513,250	  	 	 	(159,858	) 	 	 	493,920	  	 	 	39,978	  	 	 	(211,922	) 	 	 	11,392	  	 	 	922	  	
Exchange (gain) loss, net	 	 	56,144	  	 	 	(110,150	) 	 	 	95,322	  	 	 	7,716	  	 	 	87,812	  	 	 	107,830	  	 	 	8,728	  	
Other financing cost	 	 	3,455	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	572,849	  	 	 	(270,008	) 	 	 	589,242	  	 	 	47,694	  	 	 	(124,110	) 	 	 	119,222	  	 	 	9,650	  	
Aircraft rent	 	 	1,197,022	  	 	 	1,508,135	  	 	 	1,885,696	  	 	 	152,631	  	 	 	445,508	  	 	 	514,297	  	 	 	41,628	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDAR	 	 	1,769,871	  	 	 	1,238,127	  	 	 	2,474,938	  	 	 	200,325	  	 	 	321,398	  	 	 	633,519	  	 	 	51,278	  	

 	*	We decided to restate our consolidated financial statements as detailed in note 1(u) to our audited consolidated financial statements and note 2 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.	

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 RISK FACTORS
An investment in the ADSs involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, results of operations and financial condition could be materially and adversely affected by any of these risks. The trading price of the ADSs could decline due to any of these risks or other factors, and you may lose all or part of your investment.
The risks described below are those that we currently believe may adversely affect us or the ADSs. In general, investing in the securities of issuers in emerging market countries, such as Mexico, involves risks that are different from the risks associated with investing in the securities of U.S. companies and companies located in other countries with developed capital markets. Any of these risks could materially and adversely affect our business and results of operations.
To the extent that information relates to, or is obtained from sources related to, the Mexican government or Mexican macroeconomic data, the following information has been extracted from official publications of the Mexican government and has not been independently verified by us.
Risks related to Mexico
Political and social events in Mexico as well as changes in Mexican federal governmental policies may have an adverse effect on our business, results of operations, financial condition and prospects.
Our business, results of operations and financial condition are affected by economic, political or social developments in Mexico, including, among others, any political or social instability in Mexico, changes in the rate of economic growth or contraction, changes in the exchange rate between the peso and the U.S. dollar, an increase in inflation or interest rates, changes in Mexican taxation and any amendments to existing Mexican laws, federal governmental policies and regulations.
Adverse social or political developments in or affecting Mexico could negatively affect us and Mexican financial markets generally, thereby affecting our ability to obtain financing. Presidential and federal congressional elections took place in July 2012. The candidate from the Partido Revolucionario Institucional , or PRI, Enrique Peña Nieto won the presidential election and took office on December 1, 2012. In his economic platform, President Peña Nieto proposed energy and fiscal reforms, among others, in order to foster economic growth. However, since the PRI did not win a majority in Congress, the approval of these reforms would require the approval of representatives of other parties, besides the PRI, and negotiations between the political parties. The absence of a clear majority and the lack of alignment between the legislative branch and the administration could result in deadlock and prevent the timely implementation of such reforms, which in turn could have an adverse effect on the Mexican economic policy and economy. We cannot provide any assurance that the current political situation or any future developments in Mexico will not have a material adverse effect on our business, results of operations, financial condition or prospects.
In addition, the Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. In particular, Mexican federal governmental actions and policies concerning air transportation and similar services could have a significant impact on us. We cannot assure you that changes in Mexican federal governmental and air transportation policies, such as opening Mexican domestic segments to airlines from other countries, will not adversely affect our business, results of operations, financial condition and prospects or the price of the ADSs.
Adverse economic conditions in Mexico may adversely affect our business, results of operations and financial condition.
Most of our operations are conducted in Mexico and our business is affected by the performance of the Mexican economy. The recent global credit crisis and the economic recession has had significant adverse
 
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consequences on the Mexican economy, which contracted by 6.0% in terms of GDP in 2009, according to the INEGI. In 2010, 2011 and 2012, the Mexican economy grew 5.3%, 3.9% and 3.9%, respectively, in terms of GDP, according to the INEGI. Moreover, in the past, Mexico has experienced prolonged periods of economic crises, caused by internal and external factors, over which we have no control. Those periods have been characterized by exchange rate instability, high inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high unemployment rates. Decreases in the growth rate of the Mexican economy, or periods of negative growth, or increases in inflation may result in lower demand for our flights, lower fares or a shift to ground transportation options, such as long-distance buses. We cannot assure you that economic conditions in Mexico will not worsen, or that those conditions will not have an adverse effect on our business, results of operations and financial condition.
If inflation rates in Mexico increase, demand for our services may decrease and our costs may increase.
Mexico historically has experienced levels of inflation that are higher than the annual inflation rates of its main trading partners. The annual rate of inflation, as measured by changes in the Mexican national consumer price index calculated and published by the Mexican Central Bank and INEGI was 4.40% for 2010, 3.82% for 2011 and 3.57% for 2012. High inflation rates could adversely affect our business and results of operations by reducing consumer purchasing power, thereby adversely affecting consumer demand for our services, increasing our costs beyond levels that we could pass on to our customers and by decreasing the benefit to us of revenues earned to the extent that inflation exceeds growth in our pricing levels.
Currency fluctuations or the devaluation and depreciation of the peso could adversely affect our business, results of operations, financial condition and prospects.
Foreign currency exchange gains or losses included in our total financing cost result primarily from the impact of changes in the U.S. dollar-peso exchange rate on our U.S. dollar-denominated monetary liabilities (such as U.S. dollar-denominated debt, U.S. dollar-denominated aircraft lease payments and accounts payable arising from imports of spare parts and equipment) and assets (such as U.S. dollar-denominated cash, cash equivalents and accounts receivable). Because historically our U.S. dollar-denominated monetary assets (including cash, security deposits and non-finance reserves) have exceeded our U.S. dollar-denominated liabilities, the devaluation and appreciation of the peso resulted in exchange gains and losses, respectively.
The value of the peso has been subject to significant fluctuations with respect to the U.S. dollar in the past and may be subject to significant fluctuations in the future. In 2008, as a consequence of the global economic and financial crisis, the peso depreciated 26.7% against the U.S. dollar in nominal terms. In 2009, 2010 and 2012, the peso appreciated 5.5%, 5.17% and 6.9%, respectively, against the U.S. dollar in nominal terms, and in 2011 the peso depreciated 12.9% against the U.S. dollar in nominal terms. For the three months ended March 31, 2013, the peso depreciated 5% against the U.S. dollar in nominal terms.
In 2012, approximately 69% of our total operating costs and 34% of our collections were U.S. dollar-linked or denominated. The remainder of our expenses were denominated in pesos. If the peso declines in value against the U.S. dollar, our revenues, expressed in U.S. dollars, and our operating margin would be adversely affected. We may not be able to adjust our fares denominated in pesos to offset any increases in U.S. dollar-denominated expenses, increases in interest or rental expense or exchange losses on fixed obligations. In addition, 77% of our outstanding financial debt and 100% of our lease payments as of the date of this prospectus are denominated in U.S. dollars. Severe devaluation or depreciation of the peso could also result in governmental intervention or disruption of foreign exchange markets. For example, the Mexican government could institute restrictive exchange control policies in the future, as it has done in the past. This would limit our ability to convert and transfer pesos into U.S. dollars for purposes of purchasing or leasing aircraft and other parts and equipment necessary to operate and expand and upgrade our fleet, paying amounts due under some of our maintenance contracts and servicing our U.S. dollar-denominated indebtedness.
 
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Devaluation or depreciation of the peso against the U.S. dollar may adversely affect the U.S. dollar value of an investment in the ADSs, as well as the U.S. dollar value of any dividend or other distributions that we may make.
Fluctuations in the exchange rate between the peso and the U.S. dollar, particularly depreciations in the value of the peso, may adversely affect the U.S. dollar equivalent of the peso price of the Series A shares on the Mexican Stock Exchange. Such peso depreciations will likely affect the market price of the ADSs. Exchange rate fluctuations would also affect the U.S. dollar equivalent value of any dividends and other distributions we may elect to make in the future, and may affect the timely payment of any peso cash dividends and other distributions to holders of CPOs that we may elect to pay in the future in respect of the Series A shares.
Developments in other countries could adversely affect the Mexican economy, the market value of our securities, our financial condition and results of operations.
The market value of securities of Mexican companies is affected by economic and market conditions in developed and other emerging market countries. Although economic conditions in those countries may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries, may have an adverse effect on the market value of securities of Mexican issuers. In recent years, for example, prices of both Mexican debt and equity securities have sometimes suffered substantial drops as a result of developments in other countries. In 2008-2009, credit issues in the United States related principally to the sale of sub-prime mortgages resulted in significant fluctuations in securities traded in global financial markets, including Mexico.
In addition, the direct correlation between economic conditions in Mexico and the United States has sharpened in recent years because of the North American Free Trade Agreement, or NAFTA, and increased economic activity between the two countries (including increased remittances of U.S. dollars from Mexican workers in the United States to their families in Mexico). As a result, economic downturns in the United States, the termination of NAFTA or other related events, could have a material adverse effect on the Mexican economy, which, in turn, could affect our financial condition and results of operations. Terrorist acts in the United States and elsewhere could depress economic activity in the United States and globally, including Mexico. These events could have a material adverse effect on our operations and revenues, which could affect the market price of our securities, including the ADSs.
Mexican antitrust provisions may affect the fares we are permitted to charge to customers.
The Mexican Aviation Law ( Ley de Aviación Civil ) provides that in the event that the SCT considers that there is no effective competition among permit and concession holders (required to operate airlines in Mexico), the SCT may request the opinion of the Mexican Antitrust Commission ( Comisión Federal de Competencia ) and then issue regulations governing the fares that may be charged for air transportation services by airlines operating in Mexico. Such regulations will be maintained only during the existence of the conditions that resulted in their establishment. The imposition of fare regulations by the SCT could materially affect our business, results of operations and financial condition.
Violent crime in Mexico has adversely impacted, and may continue to adversely impact, the Mexican economy and may have a negative effect on our business, results of operations or financial condition.
Mexico has experienced high levels of violent crime over the past few years relating to illegal drug trafficking, particularly in Mexico’s northern states near the U.S. border. This violence has had an adverse impact on the economic activity in Mexico. In addition, violent crime may further affect travel within Mexico and between Mexico and other countries, including the United States, affect the airports or cities in which we operate, including airports or cities in the north of Mexico in which we have significant operations, and increase our insurance and security costs. We cannot assure you that the levels of violent crime in Mexico or their expansion to a larger portion of Mexico, over which we have no control, will not increase or decrease and will have no further adverse effects on the country’s economy and on our business, results of operations or financial condition.
 
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Risks related to the airline industry
We operate in an extremely competitive industry.
We face significant competition with respect to routes, fares, services and slots in airports. Within the airline industry, we compete with legacy carriers, regional airlines and low-cost airlines on many of our routes. The intensity of the competition we face varies from route to route and depends on a number of factors, including the strength of competing airlines. Our competitors may have better brand recognition and greater financial and other resources than we do. In the event our competitors reduce their fares to levels which we are unable to match while sustaining profitable operations or are more successful in the operation of certain routes (as a result of service or otherwise), we may be required to reduce or withdraw services on the relevant routes, which may cause us to incur losses or may impact our growth, financial condition or results of operations.
The airline industry is particularly susceptible to price discounting, because once a flight is scheduled, airlines incur only nominal additional costs to provide service to passengers occupying otherwise unsold seats. Increased fare or other price competition could adversely affect our results of operations and financial condition. Moreover, other airlines have begun to unbundle services by charging separate fees for services such as baggage transported, alcoholic beverages consumed onboard and advance seat selection. This unbundling and potential reduction of costs could enable competitor airlines to reduce fares on routes that we serve, which may result in an improvement in their ability to attract customers and may affect our results of operations and financial condition.
In addition, airlines increase or decrease capacity in markets based on perceived profitability. Decisions by our competitors that increase overall industry capacity, or capacity dedicated to a particular region, market or route, could have a material adverse impact on our business. Our growth and the success of our ULCC business model could stimulate competition in our markets through our competitors’ development of their own ULCC strategies or new market entrants. Any such competitor may have greater financial resources and access to cheaper sources of capital than we do, which could enable them to operate their business with a lower cost structure than we can. If these competitors adopt and successfully execute a ULCC business model, we could be materially adversely affected, including our business, results of operations and financial condition.
Furthermore, we also face competition from air travel substitutes. On our domestic routes, we face competition from other transportation alternatives, such as bus or automobile. In addition, technology advancements may limit the desire for air travel. For example, video teleconferencing and other methods of electronic communication may reduce the need for in-person communication and add a new dimension of competition to the industry as travelers seek lower cost substitutes for air travel. If we are unable to adjust rapidly in the event the basis of competition in our markets changes, it could have a material adverse effect on our business, results of operations and financial condition.
The airline industry is heavily impacted by the price and availability of fuel. Continued volatility in fuel costs or significant disruptions in the supply of fuel could have a material adverse effect on our business, results of operations and financial condition.
Fuel is a major cost component for airlines and is our largest operating expense. The cost of fuel accounted for 34%, 41% and 42% of our total operating costs in 2010, 2011 and 2012, respectively. The cost of fuel accounted for 42% and 39% of our total operating costs for the three months ended March 31, 2012 and 2013, respectively. As such, our operating results are significantly affected by changes in the cost and availability of fuel. Both the cost and the availability of fuel are subject to economic, social and political factors and other events occurring throughout the world, which we can neither control nor accurately predict. Fuel prices have been subject to high volatility, fluctuating substantially over the past several years and very sharply beginning in 2008. Due to the large proportion of fuel costs in our total operating cost base, even a relatively small increase in the price of fuel can have a significant negative impact on our operating costs and on our business, results of operations and financial condition.
 
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Our inability to renew our concession or the revocation by the Mexican government of our concession would materially adversely affect us.
We hold a government concession authorizing us to provide domestic air transportation services of passengers, cargo and mail within Mexico, or our Concession. Our Concession was granted by the Mexican federal government through the SCT on May 9, 2005 initially for a period of five years and was extended by the SCT on February 17, 2010 for an additional period of ten years. Mexican law provides that concessions may be renewed several times. However, each renewal may not exceed 30 years and requires that the concessionaire (i) has complied with the obligations set forth in the concession title to be renewed, (ii) requests the renewal one year before the expiration of the applicable concession terms, (iii) has made an improvement in the quality of the services during the term of the concession, and (iv) accepts the new conditions established by the SCT according to the Mexican Aviation Law ( Ley de Aviación Civil ). Although we expect to apply for, and to comply with, all necessary conditions to renew our Concession from time to time and as may be required, we cannot assure you that our Concession will be renewed, or what terms will apply to the renewal, as the SCT has discretion over the final approval and may determine for any reason or without reason, not to extend our Concession. Failure to renew our Concession would have a material adverse effect on our business, results of operations, financial condition and prospects and would prevent us from continuing to conduct our business.
We are required under the terms of our Concession to comply with certain ongoing obligations. Failure to comply with these obligations could result in penalties against us. In addition, the Mexican government has the right to revoke our Concession and the permits we currently hold for various reasons including: service interruptions; our failure to comply with the terms of our Concession; if we assign or transfer rights under our Concession or permits; if we fail to maintain insurance required under applicable law; if we charge fares different from fares registered with the SCT; if we violate statutory safety conditions; and if we fail to pay statutory indemnification or if we fail to pay to the Mexican government the required compensation. For more information on the potential causes for revocation of our Concession and permits, see “Regulation.” If our Concession or permits are revoked, we will be unable to operate our business as it is currently operated and be precluded from obtaining a new concession or permit for five years from the date of revocation.
Under Mexican law, our assets could be taken or seized by the Mexican government under certain circumstances.
Pursuant to Mexican law and our Concession, the Mexican federal government may take or seize our assets, temporarily or permanently, including the aircraft, in the event of natural disasters, war, serious changes to public order or in the event of imminent danger to the national security, internal peace or the national economy. The Mexican federal government, in all cases, except in the event of international war, must indemnify us by paying the respective losses and damages at market value. In these circumstances, we would not be able to continue with our normal operations. Applicable law is unclear as to how indemnification is determined and the timing of payment thereof. A temporary seizure of our assets is likely to have a material adverse effect on our business, results of operations and financial condition.
The airline industry is particularly sensitive to changes in economic conditions. The recent global economic contraction or a reoccurrence of similar conditions could negatively impact our business, results of operations and financial condition.
Our business and the airline industry in general are affected by changing economic conditions beyond our control, including, among others:
 
 	•	 	changes and volatility in general economic conditions, including the severity and duration of any downturn in Mexico, the United States or global economy and financial markets;	
 
 	•	 	changes in consumer preferences, perceptions, spending patterns or demographic trends, including any increased preference for higher-fare carriers offering higher amenity levels, and reduced preferences for low-fare carriers offering more basic transportation, during better economic times or for other reasons;	
 
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 	•	 	higher levels of unemployment and varying levels of disposable or discretionary income;	
 
 	•	 	health outbreaks and concerns with safety;	
 
 	•	 	depressed housing and stock market prices; and	
 
 	•	 	lower levels of actual or perceived consumer confidence.	
These factors can adversely affect our results of operations and financial condition, our ability to obtain financing on acceptable terms and our liquidity generally. Current unfavorable general economic conditions, such as higher unemployment rates, a constrained credit market, housing-related pressures and increased focus on reducing business operating costs can reduce spending for leisure, VFR and business travel. For many travelers, in particular the leisure and VFR travelers we serve, air transportation is a discretionary purchase that they can eliminate from their spending in difficult economic times. Unfavorable economic conditions could affect our ability to raise prices to counteract increased fuel, labor or other costs, which could result in a material adverse effect on our business, results of operations and financial condition. In addition, we are currently striving to increase demand for our flights among the portion of the population in Mexico that has traditionally used ground transportation for travel due to price constraints, by offering lower fares that compete with bus fares on similar routes. Unfavorable economic conditions could affect our ability to offer these lower fares and could affect this population segment’s discretionary spending in a more adverse manner than other travelers.
The airline industry is heavily regulated and our financial condition and results of operations could be materially adversely affected if we fail to maintain the required U.S. and Mexican governmental concessions or authorizations necessary for our operations.
The airline industry is heavily regulated and we are subject to regulation in Mexico and in the United States for the routes we serve between Mexico and the United States. In order to maintain the necessary concessions or authorizations issued by the SCT, acting through the DGAC, and the U.S. Federal Aviation Administration, or FAA, including authorizations to operate our routes, we must continue to comply with applicable statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future. We cannot predict which criteria the SCT will apply for awarding rights to landing slots, bi-lateral agreements, and international routes, which may prevent us from obtaining routes that may become available. In addition, international routes are limited by bi-lateral agreements and not obtaining them will limit our expansion plans in the international market. Furthermore, we cannot predict or control any actions that the DGAC or FAA may take in the future, which could include restricting our operations or imposing new and costly regulations. Also, our fares are subject to review by the DGAC and FAA, either of which may in the future impose restrictions on our fares. Our business, results of operations and financial condition could be materially adversely affected if we fail to maintain the required U.S. and Mexican governmental concessions or authorizations necessary for our operations.
The airline industry is subject to increasingly stringent environmental regulations and non-compliance therewith may adversely affect our financial condition and results of operations.
The airline industry is subject to increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to the air, levels of noise, discharges to surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials. Compliance with all environmental laws and regulations can require significant expenditures and any future regulatory developments in Mexico, the United States and other countries could adversely affect operations and increase operating costs in the airline industry. For example, some form of federal regulation may be forthcoming in the United States with respect to greenhouse gas emissions (including carbon dioxide (CO 2 )) and/or ‘cap and trade’ legislation, compliance with which could result in the creation of substantial additional costs to us. The U.S. Congress is considering climate change legislation and the Environmental Protection Agency issued a rule that regulates larger emitters of greenhouse gases. Concerns about climate change and greenhouse gases may result in additional regulation or taxation of aircraft emissions in
 
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the United States and Mexico. Future operations and financial results may vary as a result of such regulations in the United States and equivalent regulations adopted by other countries, including Mexico. Compliance with these regulations and new or existing regulations that may be applicable to us in the future could increase our cost base and could have a material adverse effect on our business, results of operations and financial condition. Governmental authorities in several cities in the United States and abroad are also considering or have already implemented aircraft noise reduction programs, including the imposition of nighttime curfews and limitations on daytime take-offs and landings. We have been able to accommodate local noise restrictions imposed to date, but our operations could be adversely affected if locally-imposed regulations become more restrictive or widespread.
Compliance with airline industry regulations involves significant costs and regulations enacted in both Mexico and the United States may increase our costs significantly in the future.
Airlines are subject to extensive regulatory and legal compliance requirements, both domestically and internationally, that involve significant costs. In the last several years, the U.S. Congress has passed laws, and the DOT, FAA and TSA have issued regulations, relating to the operation of airlines that have required significant expenditures. FAA requirements cover, among other things, collision avoidance systems, airborne wind shear avoidance systems, noise abatement and other environmental issues, and increased inspections and maintenance procedures to be conducted on older aircraft. We expect to continue to incur expenses in connection with complying with government regulations. Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel. If adopted, these measures could have the effect of raising ticket prices, reducing revenue and increasing costs. For example, the DOT finalized rules, taking effect on April 29, 2010, requiring new procedures for customer handling during long onboard tarmac delays, as well as additional reporting requirements for airlines that could increase the cost of airline operations or reduce revenues.
The DOT released additional rules, most of which became effective beginning in August 2011, that address, among other things, concerns about how airlines handle interactions with passengers through advertising, the reservations process, at the airport and on board the aircraft, including requirements for disclosure of base fares plus a set of regulatory mandated options and limits on cancellations and change fees. Failure to remain in full compliance with these rules, or new rules as enacted from time to time, may subject us to fines or other enforcement action, which could have a material effect on our business, results of operations and financial condition.
In addition, the TSA mandates the federalization of certain airport security procedures in the United States and imposes additional security requirements on airports and airlines, most of which are funded by a per ticket tax on passengers and a tax on airlines. The U.S. federal government has on several occasions proposed a significant increase in the per ticket tax. The proposed ticket tax increase, if implemented, could negatively impact our business, results of operations and financial condition.
Our ability to operate as an airline in the United States is dependent on maintaining our certifications issued to us by the DOT and the FAA. The FAA has the authority to issue mandatory orders relating to, among other things, the grounding of aircraft, inspection of aircraft, installation of new safety-related items and removal and replacement of aircraft parts that have failed or may fail in the future. A decision by the FAA to ground, or require time consuming inspections of or maintenance on, our aircraft, for any reason, could negatively affect our business, results of operations and financial condition. U.S. federal law requires that air carriers operating large aircraft be continuously ‘fit, willing and able’ to provide the services for which they are licensed. Our “fitness” is monitored by the DOT, which considers factors such as unfair or deceptive competition, advertising, baggage liability and disabled passenger transportation. While the DOT has seldom revoked a carrier’s certification for lack of fitness, such an occurrence would render it impossible for us to continue operating as an airline in the United States. The DOT may also institute investigations or administrative proceedings against airlines for violations of regulations.
 
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Furthermore, we cannot assure you that airline industry regulations enacted in the future in Mexico and the United States will not increase our costs significantly.
Airlines are often affected by factors beyond their control, including air traffic congestion at airports, weather conditions, health outbreaks or concerns, or increased security measures, any of which could harm our business, results of operations and financial condition.
Like other airlines, we are subject to delays caused by factors beyond our control, including air traffic congestion at airports, air traffic control inefficiencies, adverse weather conditions, health outbreaks or concerns, increased security measures and new travel related taxes. Delays frustrate passengers, reduce aircraft utilization and increase costs, all of which in turn could adversely affect profitability. The federal governments of Mexico and the United States control all Mexican and U.S. airspace, respectively, and airlines are completely dependent on the DGAC and FAA to operate these airspaces in a safe, efficient and affordable manner. The air traffic control system, which is operated by Servicios a la Navegación en el Espacio Aéreo Mexicano in Mexico and the FAA in the United States, faces challenges in managing the growing demand for air travel. U.S. and Mexican air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes resulting in delays. Adverse weather conditions and natural disasters can cause flight cancellations or significant delays. Cancellations or delays due to weather conditions or natural disasters, air traffic control problems, health outbreaks or concerns, breaches in security or other factors and any resulting reduction in airline passenger traffic could have a material adverse effect on our business, results of operations and financial condition.
Airline consolidations and reorganizations could adversely affect the industry.
The airline industry has undergone substantial consolidation throughout the years and recently, and it may undergo additional consolidation in the future. Any consolidation or significant alliance activity within the airline industry could increase the size and resources of our competitors. The airline industry in Mexico has recently seen a sharp contraction, with the exit of seven Mexican airlines since 2007 (Aerocalifornia, Aladia, Alma, Aviacsa, Avolar, Azteca and Nova Air) and the cessation of operations of Grupo Mexicana when it filed for reorganization ( concurso mercantil ) in August 2010. Prior to ceasing operations, Grupo Mexicana was one of our most significant competitors. We cannot predict the outcome of Grupo Mexicana’s reorganization, its future financial condition or whether we will be awarded any of its routes and/or slots, some of which we currently operate. In late 2010 and 2011, we began operating 15 routes that had been primarily operated by Grupo Mexicana prior to it ceasing operations. If Grupo Mexicana exits reorganization and resumes operations, we may not be able to continue operating these routes, which could lower our profitability. Successful completion of Grupo Mexicana’s reorganization could also lower its operating costs through renegotiation of labor, supply and financing contracts. In addition, air carriers involved in reorganizations have historically engaged in substantial fare discounting in order to maintain cash flows and to enhance continued customer loyalty. Such fare discounting could lower yields for all carriers, including us.
Because the airline industry is characterized by high fixed costs and relatively elastic revenues, airlines cannot quickly reduce their costs to respond to shortfalls in expected revenue.
The airline industry is characterized by low gross profit margins, high fixed costs and revenues that generally exhibit substantially greater elasticity than costs. The operating costs of each flight do not vary significantly with the number of passengers flown and, therefore, a relatively small change in the number of passengers, fare pricing or traffic mix could have a significant effect on operating and financial results. These fixed costs cannot be adjusted quickly to respond to changes in revenues and a shortfall from expected revenue levels could have a material adverse effect on our results of operations and financial condition.
 
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Increases in insurance costs and/or significant reductions in coverage would harm our business, results of operations and financial condition.
Following the September 11, 2001 terrorist attacks, premiums for insurance against aircraft damage and liability to third parties increased substantially, and insurers could reduce their coverage or increase their premiums even further in the event of additional terrorist attacks, hijackings, airline crashes or other events adversely affecting the airline industry. In the future, certain aviation insurance could become unaffordable, unavailable or available only for reduced amounts of coverage that are insufficient to comply with the levels of insurance coverage required by aircraft lenders and lessors or applicable government regulations. Governments in other countries have agreed to indemnify airlines for liabilities that they might incur from terrorist attacks or provide low-cost insurance for terrorism risks. In that respect, the Mexican government provided certain loans to help airlines face increases in aircraft insurance right after the 2001 terrorist attacks. However, the Mexican government has not indicated an intention to provide similar benefits to us now or at any time in the future. Increases in the cost of insurance may result in both higher fares and a decreased demand for air travel generally, which could materially and negatively affect our business, results of operations and financial condition.
Downturns in the airline industry caused by terrorist attacks or war, which may alter travel behavior or increase costs, may adversely affect our business, results of operations and financial condition.
Demand for air transportation may be adversely affected by terrorist attacks, war or political and social instability, natural disasters and other events. Furthermore, these types of situations could have a prolonged effect on air transportation demand and on certain cost items.
The terrorist attacks in the United States on September 11, 2001, for example, have had a severe and lasting adverse impact on the airline industry. Airline traffic in the United States fell dramatically after the attacks and decreased less severely throughout Latin America. The repercussions of September 11, including increases in security, insurance and fear of similar attacks, continue to affect us and the airline industry. Since September 11, 2001, the Department of Homeland Security and the TSA in the United States have implemented numerous security measures that restrict airline operations and increase costs, and are likely to implement additional measures in the future. For example, following the widely publicized attempt of an alleged terrorist to detonate plastic explosives hidden underneath his clothes on a Northwest Airlines flight on Christmas Day in 2009, international passengers became subject to enhanced random screening, which may include pat-downs, explosive detection testing or body scans. Enhanced passenger screening, increased regulation governing carry-on baggage and other similar restrictions on passenger travel may further increase passenger inconvenience and reduce the demand for air travel. In addition, increased or enhanced security measures have tended to result in higher governmental fees imposed on airlines, resulting in higher operating costs for airlines. Therefore, any future terrorist attacks or threat of attacks, whether or not involving commercial aircraft, any increase in hostilities relating to reprisals against terrorist organizations, including an escalation of military involvement in the Middle East, or otherwise and any related economic impact, could result in decreased passenger traffic and materially and adversely affect our business, results of operations and financial condition.
Public health threats, such as the H1N1 flu virus, the bird flu, Severe Acute Respiratory Syndrome (SARS) and other highly communicable diseases, affect travel behavior and could have a material adverse effect on the airline industry.
During the second quarter of 2009, passenger traffic was negatively affected as a result of the H1N1 flu crisis, which resulted in lower overall demand for intra-Latin America travel, especially to and from Mexico. It is impossible to determine if and when health threats, similar to the H1N1 flu, or perceived health threats, will occur, when the resulting adverse effects will abate and the extent to which they will further decrease demand for air travel, which could materially and negatively affect our business, results of operations and financial condition.
 
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Risks related to our business
We may not be able to implement our growth strategy.
Our growth strategy includes increasing the flights to markets we currently serve, expanding the number of markets served where we expect our ultra-low-cost structure to be successful and acquiring additional aircraft. Effectively implementing our growth strategy is critical for our business to achieve economies of scale and to sustain or increase our profitability.
We face numerous challenges in implementing our growth strategy, including our ability to:
 
 	•	 	maintain profitability;	
 
 	•	 	access airports located in our targeted geographic markets where we can operate routes in a manner that is consistent with our cost strategy;	
 
 	•	 	maintain our high level of service notwithstanding the number of different ground transportation services and airport companies that we use in the course of our business;	
 
 	•	 	maintain satisfactory economic arrangements (including benefits) with our executives and our union;	
 
 	•	 	access sufficient gates, slots and other services at airports we currently serve or may seek to serve;	
 
 	•	 	obtain authorization of new routes;	
 
 	•	 	renew or maintain our Concession;	
 
 	•	 	gain access to international routes; and	
 
 	•	 	obtain financing to acquire new aircraft and in connection with our operations.	
Our growth depends upon our ability to maintain a safe and secure operation. An inability to hire and retain trained personnel, maintain suitable arrangements with our union, timely secure the required equipment, facilities and airport services in a cost-effective manner, operate our business efficiently or obtain or maintain the necessary regulatory approvals may adversely affect our ability to achieve our growth strategy, which could harm our business. In addition, expansion to new international markets may have other risks due to factors specific to those markets. We may be unable to foresee all of the risks attendant upon entering certain new international markets or respond adequately to these risks, and our growth strategy and our business may suffer as a result. In addition, our competitors may reduce their fares and/or offer special promotions following our entry into a new market. We cannot assure you that we will be able to profitably expand our existing markets or establish new markets.
Our target growth markets are in Mexico and the United States. In the future, we also intend to target markets in Latin America, including countries with less developed economies that may be vulnerable to more unstable economic and political conditions, such as significant fluctuations in GDP, interest and currency exchange rates, civil disturbances, government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by governments. The occurrence of any of these events in markets served by us and the resulting instability may adversely affect our ability to implement our growth strategy.
Expansion of our markets and services may also strain our existing management resources and operational, financial and management information systems to the point that they may no longer be adequate to support our operations, requiring us to make significant expenditures in these areas. We expect that we will need to develop further financial, operational and management controls, reporting systems and procedures to accommodate future growth. We cannot assure you that we will be able to develop these controls, systems or procedures on a timely basis, and the failure to do so could harm our business.
 
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Our ultra-low-cost structure is one of our primary competitive advantages and many factors could affect our ability to control our costs.
Our ultra-low-cost structure is one of our primary competitive advantages. However, we have limited control over many of our costs. For example, we have limited control over the price and availability of fuel, aviation insurance, airport and related infrastructure taxes, the cost of meeting changing regulatory requirements, and our cost to access capital or financing. We cannot guarantee we will be able to maintain a cost advantage over our competitors. If our cost structure increases and we are no longer able to maintain a cost advantage over our competitors, it could have a material adverse effect on our business, results of operations, financial condition and prospects.
Our fuel hedging strategy may not reduce our fuel costs.
Our fuel hedging policy is to enter into fuel derivative contracts to hedge against changes in fuel prices when we have excess cash available to support the costs of such hedges. As of March 31, 2013, we had hedged approximately 9.0% and 4.0% of our projected fuel requirements for the second and third quarters of 2013, respectively. However, we cannot provide any assurance that our fuel hedging program is sufficient to protect us against significant increases in the price of fuel. There is no assurance that we will be able to secure new fuel derivative contracts on terms which are commercially acceptable to us or at all. Furthermore, our ability to react to the cost of fuel is limited since we set the price of tickets in advance of incurring fuel costs. Our ability to pass on any significant increases in fuel costs through fare increases is also limited by our low-cost, low-fare business model.
We have a significant amount of fixed obligations that could impair our liquidity and thereby harm our business, results of operations and financial condition.
The airline business is capital intensive and, as a result, many airline companies are highly leveraged. All of our aircraft and spare engines are leased, and we paid the lessors rent and maintenance reserves aggregating U.S.$135.6 million and U.S.$54.2 million, respectively, in 2012, and have future operating lease obligations aggregating approximately U.S.$817.6 million over the next 11 years. In addition, we have significant obligations for aircraft and engines that we have ordered from Airbus and IAE International Aero Engines AG, or IAE, respectively, for delivery over the next three years. Our ability to pay the fixed costs associated with our contractual obligations will depend on our operating performance and cash flow, which will in turn depend on, among other things, the success of our current business strategy, whether fuel prices continue at current price levels and/or further increase or decrease, further weakening or improvement in the Mexican and U.S. economies, whether financing is available on reasonable terms or at all, as well as general economic and political conditions and other factors that are, to some extent, beyond our control. The amount of our aircraft related fixed obligations could have a material adverse effect on our business, results of operations and financial condition and could:
 
 	•	 	require a substantial portion of cash flow from our operations for operating lease and maintenance deposit payments, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;	
 
 	•	 	limit our ability to make required pre-delivery deposit payments to Airbus for our aircraft on order;	
 
 	•	 	limit our ability to obtain additional financing to support our expansion plans and for working capital and other purposes on acceptable terms or at all;	
 
 	•	 	make it more difficult for us to pay our other obligations as they become due during adverse general economic and market industry conditions because any related decrease in revenues could cause us to not have sufficient cash flows from operations to make our scheduled payments;	
 
 	•	 	reduce our flexibility in planning for, or reacting to, changes in our business and the airline industry and, consequently, place us at a competitive disadvantage to our competitors with less fixed payment obligations; and	
 
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 	•	 	cause us to lose access to one or more aircraft and forfeit our rent and purchase deposits if we are unable to make our required aircraft lease rental payments or purchase installments and our lessors exercise their remedies under the lease agreement including under cross default provisions in certain of our leases.	
A failure to pay our operating leases and other fixed cost obligations or a breach of our contractual obligations could result in a variety of adverse consequences, including the exercise of remedies by our creditors and lessors. In such a situation, it is unlikely that we would be able to fulfill our obligations, make required lease payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.
Inability to obtain lease or debt financing for additional aircraft would impair our growth strategy.
We presently finance our aircraft through operating leases as well as sale and leaseback arrangements. In the future, we may elect to own a portion of our fleet as well as continue to lease aircraft through long-term operating leases. We may not be able to obtain lease or debt financing on terms attractive to us, or at all. To the extent we cannot obtain such financing on acceptable terms or at all, we may be required to modify our aircraft acquisition plans or to incur higher than anticipated financing costs, which would have an adverse impact on the execution of our growth strategy and business.
Our limited lines of credit and borrowing facilities make us highly dependent upon our operating cash flows.
We have limited lines of credit and borrowing facilities, and rely primarily on operating cash flows to provide working capital. Unless we secure additional lines of credit, borrowing facilities or equity financing, we will be dependent upon our operating cash flows to fund our operations and to make scheduled payments on our debt and other fixed obligations. If we fail to generate sufficient funds from our operations to meet these cash requirements or are unable to secure additional lines of credit, other borrowing facilities or equity financing, we could default on our debt and other fixed obligations. Our inability to meet our obligations as they become due would materially adversely affect our ability to grow and seriously harm our business, results of operations and financial condition.
We are highly dependent on the Mexico City, Tijuana, Guadalajara and Cancún airports for a large portion of our business.
Our business is heavily dependent on our routes to and from the Mexico City, Tijuana, Guadalajara and Cancún airports, which account for 64% of all departing ASMs as of the first quarter of the year 2013. Routes through Mexico City, Tijuana, Guadalajara and Cancún make up a large portion of the balance of our routes, accounting for 19%, 22%, 17% and 7% of our ASM capacity, respectively. Our slots in Mexico City have currently been granted on a temporary basis and could be withdrawn in the future. Any significant increase in competition, redundancy in demand for air transportation or disruption in service or the fuel supply at these airports, could have a material adverse impact on our business, results of operations and financial condition. In addition, conditions affecting services at these airports or our slots, such as adverse changes in local economic or political conditions, negative public perception of these destinations, unfavorable weather conditions, violent crime or drug related activities, could also have a material adverse impact on our business, results of operations and financial condition.
Our maintenance costs will increase as our fleet ages.
As of December 31, 2012, the average age of our 41 aircraft in service was approximately 4.1 years according to the DGAC. Our relatively new aircraft require less maintenance now than they will in the future. Our fleet will require more maintenance as it ages and our maintenance and repair expenses for each of our aircraft will be incurred at approximately the same intervals. In addition, the terms of our lease agreements require us to pay supplemental rent, also known as maintenance reserves, to be paid to the lessor in advance of
 
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the performance of major maintenance, resulting in our recording significant prepaid deposits on our statements of financial position. We expect scheduled and unscheduled aircraft maintenance expenses to increase as a percentage of our revenue over the next several years. Any significant increase in maintenance and repair expenses would have a material adverse effect on our margins and our business, results of operations and financial condition.
Our business could be harmed by a change in the availability or cost of air transport infrastructure and airport facilities.
The lack of adequate air transport infrastructure can have a direct adverse impact on our business operations, including our future expansion plans. The availability and cost of terminal space, slots and aircraft parking are critical to our operations. Additional ground and maintenance facilities, including gates and hangars and support equipment will be required to operate additional aircraft in line with our expansion plans and may be unavailable in a timely or economic manner in certain airports. Our inability to lease, acquire or access airport facilities on reasonable terms, at preferred times or based upon adequate service, to support our operations and growth could have a material adverse effect on our operations. Further, as old airports become modernized or new airports are constructed, this may lead to increases in the costs of using airport infrastructure and facilities, and may also result in an increase in related costs such as landing charges. Such increases may adversely affect our business, results of operations and financial condition. Our ability to pass on such increased costs to our passengers is limited by several factors, including economic and competitive conditions.
We are exposed to increases in landing charges and other airport access fees and restrictions, and cannot be assured access to adequate facilities and landing rights necessary to achieve our expansion plans.
We must pay fees to airport operators for the use of their facilities. Any substantial increase in airport charges could have a material adverse impact on our results of operations and financial condition. Passenger taxes and airport charges have also increased in recent years, sometimes substantially. We cannot assure you that the airports used by us will not impose, or further increase, passenger taxes and airport charges in the future, particularly in light of increased competition, and any such increases could have an adverse effect on our results of operations and financial condition.
Certain airports that we serve (or that we plan to serve in the future) are subject to capacity constraints and impose slot restrictions during certain periods of the day. As a result, we cannot assure you that we will be able to obtain a sufficient number of slots, gates and other facilities at airports to maintain or expand our services as we are proposing to do. It is also possible that airports not currently subject to capacity constraints may become so in the future. In addition, an airline must use its slots on a regular and timely basis or risk having those slots reallocated to other airlines. Where slots or other airport resources are not available or their availability is restricted in some way, we may have to amend our schedules, change routes or reduce aircraft utilization, any of which could have an adverse effect on our business, results of operations and financial condition.
In addition, some of the airports we serve impose various restrictions, including limits on aircraft noise levels, limits on the number of average daily departures and curfews on runway use. We cannot assure you that airports at which there are no such restrictions may not implement restrictions in the future or that, where such restrictions exist, they may not become more onerous. Such restrictions may limit our ability to continue to provide or to increase services at such airports.
Our reputation and business could be adversely affected in the event of an emergency, accident or similar incident involving our aircraft.
We are exposed to potential significant losses and material adverse effects on our business in the event that any of our aircraft is subject to an emergency, accident, terrorist incident or other similar incident, and significant costs related to passenger claims, repairs or replacement of a damaged aircraft and its temporary or permanent loss from service. There can be no assurance that we will not be affected by such events, or that the amount of
 
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our insurance coverage will be adequate in the event such circumstances arise and any such event could cause a substantial increase in our insurance premiums. See “—Increases in insurance costs and/or significant reductions in coverage would harm our business, results of operations and financial condition.” In addition, any future aircraft emergency, accident or similar incident, even if fully covered by insurance or even if it does not involve our airline, may create a public perception that our airline or the equipment we fly is less safe or reliable than other transportation alternatives, which could have an adverse impact on our reputation and could have a material adverse effect on our business, results of operations and financial condition.
We are exposed to certain risks against which we do not have insurance.
In line with industry practice, we leave some business risks uninsured including business interruption, loss of profit or revenue and consequential business losses arising from mechanical breakdown. To the extent that uninsured risks materialize, we could be materially and adversely affected. There can also be no assurance that our insurance coverage will cover actual losses incurred. To the extent that actual losses incurred by us exceed the amount insured, we may have to bear substantial losses which could have a material adverse effect on our financial condition and results of operations.
A failure to comply with covenants contained in our aircraft or engine lease agreements, or the occurrence of an event of default thereunder, could have a negative impact on us and our financial condition and results of operations.
We have entered into aircraft and engine operating lease agreements and sale and leaseback arrangements with various lessors. These agreements contain certain events of default and also require us to comply with certain covenants, including covenants triggered by a change of control, during the term of each agreement. The lease agreements generally provide for events of default if (i) we fail to obtain or maintain the insurance required, (ii) we breach any covenant or representation and warranty and do not cure it within the agreed time periods, (iii) we do not have unencumbered control or possession of the aircraft or engines, (iv) we discontinue (temporarily or otherwise) business or sell or otherwise dispose of all or substantially all of our assets, (v) we no longer possess the licenses, certificates and permits required for the conduct of our business as a certificated air carrier, (vi) Volaris Opco experiences a change of control, or (vii) we fail to pay when due any airport or navigation charges or any landing fees assessed with respect to the aircraft or any aircraft operated by us which, if unpaid, may give rise to any lien, right of detention, right of sale or other security interest in relation to the aircraft or parts thereof. The lease agreements also provide for events of default in case of certain insolvency events and if a material adverse change occurs in our financial condition which, in lessor’s reasonable opinion, would materially and adversely affect our ability to perform our obligations under the lease agreements and related documents. Failure to comply with covenants could result in a default under the relevant agreement, and ultimately in a re-possession of the relevant aircraft or engine. Certain of these agreements also contain cross default clauses, as a result of which defaults under one agreement may be treated as defaults under other lease agreements. As such, a failure to comply with the covenants in our aircraft and engine lease agreements, or the occurrence of an event of default thereunder, could have a negative impact on us and, as a result, on our financial condition and results of operations.
We rely on maintaining a high daily aircraft utilization rate to implement our ultra-low-cost structure, which makes us especially vulnerable to flight delays or cancellations or aircraft unavailability.
One of the key elements of our business strategy is to maintain a high daily aircraft utilization rate. Our average daily aircraft utilization was 12.99 block hours in 2010, 13.38 block hours in 2011, and 12.40 block hours in 2012. Aircraft utilization is the average amount of time per day that our aircraft spend carrying passengers in flight. Our revenue per aircraft can be increased by high daily aircraft utilization, which is achieved in part by reducing turnaround times at airports, so we can fly more hours on average in a day. Aircraft utilization is reduced by delays and cancellations arising from various factors, many of which are beyond our control, including air traffic congestion at airports or other air traffic control problems, adverse weather conditions,
 
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increased security measures or breaches in security, international or domestic conflicts, terrorist activity, health outbreaks or other changes in business conditions. In addition, pulling aircraft out of service for unscheduled and scheduled maintenance, which will increase as our fleet ages, may materially reduce our average fleet utilization. High aircraft utilization increases the risk that if an aircraft falls behind schedule during the day, it could remain behind schedule during the remainder of that day and potentially into the next day, which can result in disruption in operating performance, leading to passenger dissatisfaction related to delayed or cancelled flights and missed connections. Due to the relatively small size of our fleet and high daily aircraft utilization rate, the unavailability of one or more aircraft and resulting reduced capacity or our failure to operate within time schedules, could have a material adverse effect on our business, results of operations and financial condition.
The growth of our operations to the United States is dependent on Mexico’s continued favorable safety assessment.
The FAA periodically audits the aviation regulatory authorities of other countries. As a result of their investigation, each country is given an International Aviation Safety Assessment, or IASA, rating. In December 2010, Mexico’s IASA rating was upgraded back to Category 1 from Category 2, six months after it had been downgraded due to alleged deficiencies in Mexican air safety standards. We cannot assure you that the government of Mexico, and the DGAC in particular, will continue to meet international safety standards, and we have no direct control over their compliance with IASA guidelines. If Mexico’s IASA rating were to be downgraded in the future, it could restrict our ability to maintain or increase service to the United States, which would in turn adversely affect our business, results of operations and financial condition.
We rely heavily on technology and automated systems to operate our business and any failure of these technologies or systems or failure by their operators could harm our business.
We are highly dependent on technology and automated systems to operate our business and achieve low operating costs. These technologies and systems include our computerized airline reservation system, flight operations system, financial planning, management and accounting system, telecommunications systems, website, maintenance systems and check-in kiosks. For our operations to work efficiently, our website and reservation system must be able to accommodate a high volume of traffic, maintain secure information and deliver flight information. Substantially all of our tickets are issued to passengers as electronic tickets. We depend on our reservation system, which is hosted and maintained by third-party service providers, to be able to issue, track and accept these electronic tickets. If our reservation system fails or experiences interruptions and we are unable to book seats for any period of time, we could lose significant amounts of revenues as customers book seats on competing airlines. We have experienced short duration reservation system outages from time to time and may experience similar outages in the future. Furthermore, if our flight operations system were to fail, our operations would be materially and adversely affected.
We also rely on third-party service providers of our other automated systems for technical support, system maintenance and software upgrades. In addition, we are currently implementing new systems for the management and sale of non-ticket items. If our automated systems are not functioning or function partially or if the current providers were to fail to adequately provide updates or technical support for any one of our key existing systems, we could experience service disruptions and delays, which could harm our business and result in the loss of important data, increase our expenses and decrease our revenues. In the event that one or more of our primary technology or systems’ vendors goes into bankruptcy, ceases operations or fails to perform as contemplated in the agreements, replacement services may not be readily available on a timely basis, at competitive rates or at all and any transition time to a new system may be significant.
We retain personal information received from customers and have put in place security measures to protect against unauthorized access to such information. Personal information is further protected under applicable Mexican law. Personal information held both offline and online is highly sensitive and, if third parties were to access such information without the customers’ prior consent or if third parties were to misappropriate that
 
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information, our reputation could be adversely affected and customers could bring legal claims against us, any of which could adversely affect our business, results of operations and financial condition. In addition, we may be liable to credit card companies should any credit card information be accessed and misused as a result of lack of sufficient security systems implemented by us.
In addition, our automated systems cannot be completely protected against events that are beyond our control, including natural disasters, computer viruses or telecommunications failures. Substantial or sustained system failures could cause service delays or failures and result in our customers purchasing tickets from other airlines. We have implemented security measures and have disaster recovery plans; however, we cannot assure you that these measures are adequate to prevent disruptions. Disruption in, changes to or a breach of, these systems could result in the disruption to our business and the loss of important data. These disruptions may also result in adverse economic consequences. Any of the foregoing could result in a material adverse effect on our business, results of operations and financial condition.
We rely on third-party service providers to perform functions integral to our operations.
We have entered into agreements with third-party service providers to furnish certain facilities and services required for our operations, including Lufthansa Technik AG for certain technical services and Aeromantenimiento S.A., or Aeroman, a FAA-approved maintenance provider, for our heavy airframe and engine maintenance, as well as other third-party service providers, including the concessionaries’ of the Mexican airports in which we operate, for ground handling, catering, passenger handling, engineering, refueling and airport facilities as well as administrative and support services. We are likely to enter into similar service agreements in new markets we decide to enter, and there can be no assurance that we will be able to obtain the necessary services at acceptable rates.
Although we seek to monitor the performance of third-party service providers, their efficiency, timeliness and quality of contract performance are often beyond our control, and any failure by any of them to perform their contracts may have an adverse impact on our business and operations. We expect to be dependent on such third-party arrangements for the foreseeable future.
Furthermore, our agreements with third parties are subject to termination upon short notice. The loss or expiration of these contracts or any inability to renew them or negotiate and enter into contracts with other providers at comparable rates could harm our business. Our reliance upon others to provide essential services on our behalf also gives us less control over costs, and the efficiency, timeliness and quality of contract services.
Our processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation.
In the processing of our customer transactions, we receive, process, transmit and store a large volume of identifiable personal data, including financial data such as credit card information. This data is subject to legislation and regulation, intended to protect the privacy of personal data that is collected, processed and transmitted. More generally, we rely on consumer confidence in the security of our system, including our internet site on which we sell the majority of our tickets. Our business, results of operations and financial condition could be adversely affected if we are unable to comply with existing privacy obligations or legislation or regulations are expanded to require changes in our business practices. Furthermore, lawsuits may be initiated against us and our reputation may be negatively affected if we fail to comply with applicable law and privacy obligations.
We depend on our non-ticket revenue to remain profitable, and we may not be able to maintain or increase our non-ticket revenue base.
Our business strategy significantly relies upon our portfolio of non-ticket revenues, including ancillary products and services and cargo revenue, on which we depend to remain profitable due to our ULCC strategy of low base fares. There can be no assurance that passengers will pay for additional ancillary products and services
 
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or that passengers will continue to choose to pay for the ancillary products and services we currently offer. Failure to maintain our non-ticket revenues would have a material adverse effect on our results of operations and financial condition. Furthermore, if we are unable to maintain and grow our non-ticket revenues, we may not be able to execute our strategy to continue to lower base fares in order to stimulate demand for air travel. In addition, our strategy to increase and develop non-ticket revenue by charging for additional ancillary services may be adversely perceived by our customers and negatively affect our business.
Restrictions on or increased taxes applicable to fees or other charges for ancillary products and services paid by airlines passengers could harm our business, results of operations and financial condition.
Our non-ticket revenues are generated from fees for, among other things, baggage, advance seat selection, change fees, and sales of onboard products and other items sold in conjunction with our scheduled air service. In April 2011, the DOT published a broad set of final rules relating to, among other things, how airlines handle interactions with passengers through advertising, the reservations process, at the airport and on board the aircraft. The final rules require airlines to publish a full fare for a flight, including mandatory taxes and fees, and to enhance disclosure of the cost of optional products and services, including baggage charges. The rules restrict airlines from increasing ticket prices post-purchase (other than increases resulting from changes in government-imposed fees or taxes) and increasing significantly the amount and scope of compensation payable to passengers involuntarily denied boarding due to oversales. The final rules also extend the applicability of penalties to include international flights and provide that reservations made more than one week prior to flight date may be held at the quoted fare without payment, or cancelled without penalty, for 24 hours. Failure to remain in full compliance with these rules may subject us to fines or other enforcement action, including requirements to modify our passenger reservations system, which could have a material adverse effect on our business. Moreover, we cannot assure you that compliance with these new rules will not have a material adverse effect on our business.
In addition, the U.S. Congress and Federal administrative agencies have undertaken investigations of the airline industry practice of unbundling services, including public hearings held in 2010. If new taxes are imposed on non-ticket revenues, or if other laws or regulations are adopted that make unbundling of services impermissible, or more cumbersome or expensive than the new rules described above, our business, results of operations and financial condition could be materially adversely affected. Congressional and other government agency scrutiny may also change industry practice or public willingness to pay for ancillary services. See also “Compliance with airline industry regulations involves significant costs and regulations enacted in Mexico and the United States in the future may increase our costs significantly”.
Changes in how we or others are permitted to operate at airports could have a material adverse effect on our business, results of operations and financial condition.
Our results of operations may be affected by actions taken by the Mexican airports’ concessionaires, governmental or other agencies or authorities having jurisdiction over our operations at airports, including, but not limited to:
 
 	•	 	termination of our airport use agreements, some of which can be terminated by the other party or airport authorities with little notice to us;	
 
 	•	 	international travel regulations such as customs and immigration;	
 
 	•	 	increases in taxes;	
 
 	•	 	changes in the law that affect the services that can be offered by airlines in particular markets and at particular airports;	
 
 	•	 	strikes and other similar disruptions affecting airports;	
 
 	•	 	restrictions on competitive practices;	
 
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 	•	 	the adoption of statutes or regulations that impact customer service standards, including security and health standards and termination of licenses or concessions to operate airports; and	
 
 	•	 	the adoption of more restrictive locally-imposed noise regulations or curfews.	
In general, any changes in airport operations could have a material adverse effect on our business, results of operations and financial condition.
We rely on a number of single suppliers for our fuel, aircraft and engines.
We purchase fuel from Aeropuertos y Servicios Auxiliares , or ASA, which also supplies fuel and fills our aircraft tanks in Mexico, where we do most of the fillings. In the United States, we have entered into fuel supply agreements with suppliers such as World Fuel Services, or WFS, pursuant to which WFS or its affiliates sell fuel to us at various airports as specified in the agreements. The agreement with ASA expires in March 2015 and may be terminated by us with 60-days prior notice and by ASA only if we do not pay for the fuel provided. The agreement with WFS expires in October 2013 and may be terminated by either party with 30-days prior notice. If either ASA or WFS offers fuel to one or more of our competitors at a more competitive price or with more advantageous terms, it may materially affect our ability to compete against other airlines, and may have a material effect on our business. If either of ASA or WFS terminates its agreement with us, is unwilling to renew it upon termination or is unable or unwilling to cover our fuel needs, we would have to seek an alternative source of fuel. Currently, no substitute exists for ASA as a fuel supplier in Mexico. We cannot assure you that we will be able to find another fuel provider or, if so, whether we will be able to find one that provides fuel in such a cost-effective a manner as our current agreements with ASA and WFS. Failure to renew agreements or to source fuel from alternate sources will materially and adversely affect our business, results of operations and financial condition.
One of the elements of our business strategy is to save costs by operating an aircraft fleet consisting solely of Airbus A319 and A320 aircraft, narrow body aircraft, powered by engines manufactured by IAE. We currently intend to continue to rely exclusively on these aircraft and engine manufacturers for the foreseeable future. If Airbus or IAE becomes unable to perform its contractual obligations, or if we are unable to acquire or lease aircraft or engines or spare parts from other owners, operators or lessors on acceptable terms, we would have to find other suppliers for a similar type of aircraft, engine or spare parts. If we have to lease or purchase aircraft from another supplier, we would lose the significant benefits we derive from our current single fleet composition. We may also incur substantial transition costs, including costs associated with retraining our employees, replacing our manuals and adapting our facilities and maintenance programs. Our operations could also be materially affected by the failure or inability of aircraft, engine and parts suppliers to provide sufficient spare parts or related support services on a timely basis.
Any real or perceived problem with the Airbus A320 family aircraft or IAE engines could adversely affect our operations.
We operate a uniform fleet of Airbus A319 and A320 aircraft, which belong to the Airbus A320 family aircraft. Our aircraft also exclusively use IAE engines. Our dependence on the Airbus A319 and A320 aircraft and IAE engines makes us particularly vulnerable to any problems that might be associated with the Airbus A320 family aircraft or engines. If any design defect or mechanical problem is discovered, or if the technology relating to such aircrafts should become obsolete, our aircraft may have to be grounded while such defect or problem is corrected, assuming it could be corrected at all. Any such defect or problem may also result in aviation authorities in Mexico and the United States implementing certain airworthiness directives which may require substantial cost to comply with. Further, our operations could be materially adversely affected if passengers avoid flying with us as a result of an adverse perception of the Airbus A320 family aircraft or IAE engines due to real or perceived safety concerns or other problems.
 
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If we are unable to attract and retain qualified personnel or fail to maintain our company culture, our business, results of operations and financial condition could be harmed.
We require large numbers of pilots, flight attendants, maintenance technicians and other personnel, and our growth strategy will require us to hire, train and retain a significant number of new employees in the future. The airline industry has from time to time experienced a shortage of qualified personnel, particularly with respect to pilots and maintenance technicians. This has been particularly acute for Mexico. In addition, as is common with most of our competitors, we have faced considerable turnover of our employees. We may be required to increase wages and/or benefits or to implement additional training programs in order to attract and retain qualified personnel. If we are unable to hire, train and retain qualified employees, our business could be affected adversely and we may be unable to complete our growth plans.
In addition, as we hire more people and grow, we believe it may be increasingly challenging to continue to hire people who will maintain our company culture. Our company culture, which is one of our competitive strengths, is important to providing high-quality customer service and having a productive, accountable workforce that helps keep our costs low. As we continue to grow, we may be unable to identify, hire or retain enough people who meet the above criteria, including those in management or other key positions. Our company culture could otherwise be adversely affected by our growing operations and geographic diversity. If we fail to maintain the strength of our company culture, our competitive ability and our business, results of operations and financial condition could be harmed.
Increased labor costs, union disputes, employee strikes, and other labor-related disruption may adversely affect our operations.
Our business is labor intensive, with labor costs representing approximately 14%, 12% and 12% of our total operating costs for the fiscal years 2010, 2011 and 2012, respectively. As of March 31, 2013, approximately 75% of our workforce was represented by the general aviation union (Sindicato de Trabajadores de la Industria Aeronaútica, Similares y Conexos de la República Méxicana—STIAS ) and thereby covered by substantially the same collective bargaining agreement entered into between us and each of our subsidiaries. The collective bargaining agreements are negotiated every two years in respect of general labor conditions and every year in connection with wages. Our current agreements with this union expire in February 2015. The terms and conditions of our future collective bargaining agreements may be affected by the results of collective bargaining negotiations at other airlines that may have a greater ability, due to larger scale, greater efficiency or other factors, to bear higher costs than we can. We cannot assure you that our labor costs going forward will remain competitive because in the future our labor agreements may be amended and new agreements could have terms with higher labor costs or more onerous conditions, one or more of our competitors may significantly reduce their labor costs, thereby reducing or eliminating our comparative advantages as to one or more of such competitors, or our labor costs may increase in connection with our growth. Traditionally, the relationship between Mexican legacy carriers and their unions has been complex. We may also become subject to additional collective bargaining agreements in the future as non-unionized workers may unionize or unionized workers may decide to join a different union. If we are unable to reach agreement with any of our unionized work groups on future negotiations regarding the terms of their collective bargaining agreements, we may be subject to work interruptions or stoppages. Any such action or other labor dispute with unionized employees (including negotiation of more onerous conditions), or the deterioration of the relationship between unions and businesses in Mexico, could disrupt our operations, reduce our profitability, or interfere with the ability of our management to focus on executing our business strategies.
Our business, results of operations and financial condition could be materially adversely affected if we lose the services of our key personnel.
Our success depends to a significant extent upon the efforts and abilities of our senior management team and key financial and operating personnel. Competition for highly qualified personnel is intense, and the loss of any executive officer, senior manager or other key employee without adequate replacement or the inability to
 
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attract new qualified personnel could have a material adverse effect on our business, results of operations and financial condition. Experienced executives in the airline industry are difficult to source. We do not maintain key-man life insurance on our management team.
Because we have a limited operating history, it is difficult to evaluate an investment in the ADSs.
We began flight operations in March 2006. It is difficult to evaluate our future prospects and an investment in the ADSs because of our limited operating history. Our prospects are uncertain and must be considered in light of the risks, uncertainties and difficulties frequently encountered by companies in the early stage of operations. Historically, there has been a high failure rate among start-up airlines, particularly in Mexico. Our future performance will depend upon a number of factors, including our ability to implement our growth strategy, choose new markets successfully, maintain our ultra-low-cost structure, provide high-quality customer service at low prices, attract, retain and motivate qualified personnel, hedge against fuel price, react to customer and market demands, operate at airports providing adequate service, and maintain the safety of our operations. We cannot assure you that we will successfully address any of these factors, and our failure to do so could adversely affect our business, financial condition, results of operations and the market price of the ADSs.
Our results of operations will fluctuate.
The airline industry is by nature cyclical and seasonal, and our operating results can be expected to vary from quarter to quarter. We generally expect demand to be greater during the summer months in the northern hemisphere, in December and around Easter, which can fall either in the first or second quarter, compared to the rest of the year. We generally experience our lowest levels of passenger traffic in February, September and October. Given our high proportion of fixed costs, seasonality can affect our profitability from quarter to quarter. Demand for air travel is also affected by factors such as economic conditions, war or the threat of war, fare levels, security and health concerns and weather conditions.
In addition, we expect our quarterly operating results to fluctuate in the future based on a variety of other factors, including:
 
 	•	 	the timing and success of our growth plans as we increase flights in existing markets and enter new markets;	
 
 	•	 	changes in fuel, security, health and insurance costs;	
 
 	•	 	increases in personnel, marketing, aircraft ownership and other operating expenses to support our anticipated growth; and	
 
 	•	 	the timing and amount of maintenance expenditures.	
Due to the factors described above and others described in this prospectus, quarter-to-quarter comparisons of operating results may not be good indicators of our future performance. In addition, it is possible that in any quarter our operating results could be below the expectations of investors and any published reports or analyses regarding our company. In that event, the price of the ADSs could decline, perhaps substantially.
We will not maintain a control group after the global offering.
Upon completion of the global offering, we will not have a control group and corporate decisions requiring shareholder approval, such as the election of a majority of the board of directors, will be made by the majority of our Series A shareholders, which shares are required to be owned by Mexican nationals. We will not have a control group after completion of the global offering because holders of ADSs and CPOs will have no voting rights, and the CPOs and ADSs will be voted by the CPO trustee in the same manner as the majority of the holders of Series A shares that are not represented by CPOs or ADSs. Thus, there will be no large groups holding a large block. Furthermore, it is unlikely that a significant block of shareholders will form in the future because
 
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no person or group of persons is permitted to acquire more than 5% of our outstanding capital stock without our board of directors’ consent. As a result, a shareholder or shareholders of a very small number of Series A shares could determine the outcome of any shareholder vote without being a control group.
We require the affirmative vote of our principal shareholders to make certain corporate decisions.
Our current principal non-Mexican shareholders, Discovery Air, Blue Sky Investments and Indigo, will own Series B shares, that are convertible into Series A shares, subsequent to the offering. Series A shares that are converted may be deposited in the CPO trust. The Series B shares are not and are not intended to be listed on any exchange and will initially represent 49% of our outstanding capital stock that is not represented by CPOs (including ADSs). Holders of Series B shares will be entitled to vote their shares on all matters and, for so long as such Series B shares represent 12% or more of our outstanding capital stock, their affirmative vote will be required to approve any matters related to (i) by-law amendments affecting Series B shares, (ii) delisting of Series A shares from any stock exchange, (iii) mergers or spinoffs affecting us, (iv) incurring indebtedness or granting guarantees if the Lease-Adjusted Net Debt to EBIDTAR ratio exceeds 4.25 times in 2013 and 3.25 times thereafter (Lease-Adjusted Net Debt is the sum of short-term and long-term debt, 7.0 times the aircraft rentals for the last four quarters, less cash and cash equivalents at the end of the last quarter for which financial statements have been prepared), and (v) change of material accounting policies. The exercise of any such consent rights may conflict with the interests of our majority shareholders.
Volaris is a holding company and does not have any material assets other than the shares of its subsidiaries.
Volaris is a holding company that conducts its operations through a series of operating subsidiaries. We support these operating subsidiaries with technical and administrative services through various other subsidiaries of Volaris. All of the assets we use to perform administrative and technical services and to operate the concessions and authorizations are held at the subsidiary level. As a result, Volaris does not have any material assets other than the shares of its subsidiaries. Dividends or payments that Volaris may be required to make will be subject to the availability of cash provided by its subsidiaries. Transfers of cash from Volaris’ subsidiaries to Volaris may be further limited by corporate and legal requirements, or by the terms of the agreements governing our indebtedness. If a shareholder were to assert a claim against Volaris, the enforcement of any related judgment would be limited to the available assets of Volaris, rather than the assets of Volaris and its combined subsidiaries.
Risks related to our securities and the global offering
A public market for the ADSs and our Series A shares does not currently exist and may not develop.
Prior to the global offering, there has been no public market for the ADSs or our Series A shares. We have applied to list the ADSs on the New York Stock Exchange under the symbol “VLRS” and the Series A shares on the Mexican Stock Exchange under the symbol “VOLAR.” However, we cannot predict the extent to which investor interest in the ADSs or Series A shares will lead to the development of an active trading market in the United States, Mexico or elsewhere. If the trading volume of the ADSs on the New York Stock Exchange or our Series A shares on the Mexican Stock Exchange were to decline below certain levels, the ADSs or the Series A shares could be delisted or deregistered, further reducing liquidity of the ADSs and Series A shares.
The trading prices for the ADSs and our Series A shares may fluctuate significantly after the global offering.
The initial offering price for the ADSs and Series A shares will be determined by negotiations between us, the selling shareholders, the underwriters and the Mexican underwriters based upon a number of factors. The initial offering price may not be indicative of prices that will prevail in the market after completion of the global offering. Future trading prices of the ADSs or Series A shares may be volatile, and could be subject to wide fluctuations in response to various factors, including:
 
 	•	 	changes in the market valuation of companies that provide similar services;	
 
 	•	 	economic, regulatory, political and market conditions in Mexico, the United States and other countries;	
 
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 	•	 	industry conditions or trends;	
 
 	•	 	availability of routes and airport space;	
 
 	•	 	the introduction of new services by us or by our competitors;	
 
 	•	 	our historical and anticipated quarterly and annual operating results;	
 
 	•	 	variations between our actual or anticipated results and analyst and investor expectations;	
 
 	•	 	announcements by us or others and developments affecting our business;	
 
 	•	 	changes in technology affecting our aircraft;	
 
 	•	 	announcements, results or actions taken by our competitors;	
 
 	•	 	investors’ perceptions of our company or the services we provide;	
 
 	•	 	changes in financial or economic estimates by securities analysts;	
 
 	•	 	our announcement of significant transactions or capital commitments;	
 
 	•	 	currency devaluations and imposition of capital controls;	
 
 	•	 	additions or departures of key management;	
 
 	•	 	future sales of the ADSs and Series A shares;	
 
 	•	 	strategic actions by us or our competitors, such as acquisitions or restructurings;	
 
 	•	 	accidents, health concerns and other events affecting airline operations;	
 
 	•	 	media reports and publications about the safety of our aircraft or the aircraft type we operate;	
 
 	•	 	changes in the price of fuel;	
 
 	•	 	announcements concerning the availability of the type of aircraft we use;	
 
 	•	 	changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations; or	
 
 	•	 	sales of our common stock or other actions by investors with significant shareholdings.	
Many of these factors are beyond our control. Broad market and industry factors could materially and adversely affect the market price of the ADSs and Series A shares, regardless of our actual operating performance.
The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies. These types of broad market fluctuations may adversely affect the trading price of our common stock. In the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business or results of operations.
The relatively low liquidity and high volatility of the Mexican securities market may cause trading prices and volumes of our Series A shares and the ADSs to fluctuate significantly.
The Mexican Stock Exchange is one of Latin America’s largest exchanges in terms of aggregate market capitalization of the companies listed therein, but it remains relatively illiquid and volatile compared to other major foreign stock markets. Although the public participates in the trading of securities on the Mexican Stock Exchange, a substantial portion of trading activity on the Mexican Stock Exchange is conducted by or on behalf of large institutional investors. The trading volume for securities issued by emerging market companies, as Mexican companies, tends to be lower than the trading volume of securities issued by companies in more
 
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developed countries. These market characteristics may limit the ability of a holder of our Series A shares to sell its Series A shares and may also adversely affect the market price of the Series A shares and, as a result, the market price of the ADSs.
If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
If we issue additional equity securities in the future, shareholders may suffer dilution, and trading prices for our securities may decline.
In connection with our business strategy of expanding through acquisitions, we may finance corporate needs and expenditures, or future transactions, by issuing additional capital stock. Any such issuances of capital stock would result in the dilution of shareholders’ ownership stake. In addition, future issuances of our equity securities or sales by our shareholders or management, or the announcement that we or they intend to make such an issuance or sale, could result in a decrease in the market price of the ADSs and Series A shares.
You will likely suffer dilution in the book value of your investment.
The initial public offering price of the ADSs and Series A shares is considerably more than the adjusted net tangible book value per share of our outstanding common stock. This reduction in the value of your equity is known as dilution. This dilution occurs in large part because our earlier investors in our shares of common stock paid substantially less than the initial public offering price of the ADSs or Series A shares when they purchased their shares. Investors purchasing ADSs in this offering (as well as investors purchasing Series A shares in the Mexican offering) will incur immediate dilution of U.S.$         in as adjusted net tangible book value per ADS, based on the initial public offering price of U.S.$         per ADS, the midpoint of the price range on the front cover of this prospectus. In addition, if we raise funds by issuing additional securities, the newly issued shares will further dilute your percentage ownership of us. See “Dilution.”
Provisions of Mexican law and our by-laws make a takeover more difficult, which may impede the ability of holders of Series A shares or ADSs to benefit from a change in control or to change our management and board of directors.
Provisions of Mexican law and our by-laws may make it difficult and costly for a third party to pursue a tender offer or other takeover attempt resulting in a change of control. Holders of ADSs may desire to participate in one of these transactions, but may not have an opportunity to do so. For example, our by-laws contain provisions which, among other things, require board approval prior to any person or group of persons acquiring, directly or indirectly, (i) 5% or more of our shares (whether directly or by acquiring ADSs or CPOs), or (ii) 20% or more of our shares (whether directly or by acquiring ADSs or CPOs) and in the case of this item (ii) if such approval is obtained, require the acquiring person to make a tender offer to purchase 100% of our shares and CPOs (or other securities that represent them) at a substantial premium over the market price of our shares to be determined by the board of directors, based upon the advice of a financial advisor.
These provisions could substantially impede the ability of a third party to control us, and be detrimental to shareholders desiring to benefit from any change of control premium paid on the sale of the company in connection with a tender offer. See “Description of Capital Stock—Change of Control Provisions,” “Description of Capital Stock—Ownership Restrictions,” “Description of Capital Stock—Voting Rights” and “Description of Capital Stock—Other Provisions—Foreign Investment Regulations.”
 
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Substantial sales of the ADSs or Series A shares after the global offering could cause the price of the ADSs or Series A shares to decrease.
We, the selling shareholders, our executive officers and certain of our directors and other shareholders, who beneficially own substantially all of the shares of our common stock, have agreed that, subject to certain limited exceptions, we and they will not offer, pledge, sell, lend or otherwise transfer until 180 days after the date of this prospectus any ADSs, CPOs, Series A shares or Series B shares or any options or warrants to purchase the ADSs, CPOs, Series A shares or Series B shares, or any securities convertible into, or exchangeable for, or that represent the right to receive, ADSs, CPOs, Series A shares or Series B shares. In addition, in the event that either (i) during the last 17 days of the “lock-up” period, we release earnings results or material news or a material event relating to us occurs or (ii) prior to the expiration of the “lock-up” period, we announce that we will release earnings results during the 16-day period beginning on the last day of the “lock-up” period, then in either case the expiration of the “lock-up” will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC waive in writing, such an extension. After these lock-up agreements expire, their ADSs and Series A shares will be eligible for sale in the public market. The market price of the ADSs and Series A shares could drop significantly if the holders of the ADSs or Series A shares sell them or the market perceives that they intend to sell them. We may finance future corporate needs and expenditures by using shares of Series A common stock, to be evidenced by Series A shares or ADSs. Any such issuances of such shares could result in a dilution of your ownership stake or a decrease in the market price of the ADSs or the Series A shares. In addition, after the global offering, our principal shareholders will be entitled to rights with respect to registration of their shares under the Securities Act of 1933, as amended, or the Securities Act, pursuant to a registration rights agreement. Please see “Principal and Selling Shareholders—Registration Rights.” If they exercise their registration rights with respect to such shares, then there will be additional Series A shares eligible for trading in the public market, which may have an adverse effect on the market price of our Series A shares and ADSs.
Non-Mexican investors may not hold our Series A shares directly and must have them held in a CPO trust at all times.
Each ADS represents ten CPOs and each CPO represents a financial interest in one Series A share. Non-Mexican investors in the ADSs may not directly hold the underlying Series A shares, but may hold them only indirectly through CPOs issued by a Mexican bank as trustee under the CPO trust or ADSs evidencing CPOs. Upon expiration of the 50-year term of our CPO trust agreement, the underlying Series A shares must be placed in a new trust similar to the current CPO trust for non-Mexican investors to hold an economic interest in such Series A shares, or be sold to third parties or be delivered to non-Mexican holders to the extent then permitted by applicable law (not currently permitted). See “Description of CPOs.” We cannot assure you that a new trust similar to the CPO trust will be created if the current CPO trust terminates, or that, if necessary, the Series A shares represented by the CPOs will be sold at an adequate price, or that Mexican law will be amended to permit the transfer of Series A shares to non-Mexican holders in the event that the trust is terminated. In that event, unless Mexican law has changed to permit non-Mexican investors to hold our shares directly, non-Mexican holders may be required to cause all of the Series A shares represented by the CPOs to be sold to a Mexican individual or corporation.
We have obtained authorization from the Mexican Ministry of Economy ( Secretaría de Economía ) for the issuance up to 90% of our outstanding capital stock in CPOs. Since non-Mexican investors are required to invest in CPOs in order to hold any interest in our capital stock, if this 90% threshold were to be met, we would be unable to obtain additional capital contributions from non-Mexican investors.
Holders of the ADSs and CPOs will have no voting rights.
Holders of the ADSs and CPOs will not be entitled to vote the underlying Series A shares. As a result, holders of the ADSs and CPOs will not have any influence over the decisions made relating to our company’s business or operations, nor will they be protected from the results of any such corporate action taken by our
 
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holders of Series A shares and Series B shares. Mexican investors will determine the outcome of substantially all shareholder matters, subject to the rights of the holders of Series B shares that are required to vote affirmatively to approve certain limited matters. For a more complete description of the circumstances under which holders of our securities may vote, see “Description of Capital Stock.”
Preemptive rights may be unavailable to non-Mexican holders of the ADSs and CPOs and, as a result, such holders may suffer dilution.
Except in certain circumstances, under Mexican law, if we issue new shares of common stock for cash as part of a capital increase, we generally grant our shareholders the right to subscribe and pay for a sufficient number of shares to maintain their existing ownership percentage in our company. Rights to subscribe and pay for shares in these circumstances are known as preemptive rights. We may not legally be permitted to allow holders of ADSs and CPOs in the United States to exercise any preemptive rights in any future capital increase unless we file a registration statement with the SEC with respect to that future issuance of shares or the offering qualifies for an exemption from the registration requirements of the Securities Act. Similar restrictions may apply to holders of ADSs and CPOs in other jurisdictions. We cannot assure you that we will file a registration statement with the SEC, or any other regulatory authority, to allow holders of ADSs and CPOs in the United States, or any other jurisdiction, to participate in a preemptive rights offering. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC and any other factors that we consider important to determine whether we will file such a registration statement. Under Mexican law, sales by the depositary of preemptive rights and distribution of the proceeds from such sales to you, the ADS holders, is not possible.
In addition, additional CPOs may be issued only if the CPO deed permits the issuance of a number of CPOs sufficient to represent the shares to be issued to and held by the CPO trustee upon the exercise of preemptive rights. Because non-Mexican holders of ADSs and CPOs are not entitled to acquire direct ownership of the underlying Series A shares in respect of such ADSs and CPOs, they may not be able to exercise their preemptive rights if the CPO deed will not permit additional CPOs to be delivered in an amount sufficient to represent the shares of common stock to be issued as a result of the exercise of preemptive rights on behalf of non-Mexican ADS or CPO holders, unless the CPO deed is modified, or a new CPO deed is entered into, which permits delivery of the number of CPOs necessary to represent the shares to be subscribed and paid as a result of the exercise of such preemptive rights. Although we expect to take all measures necessary to maintain sufficient CPOs available to permit non-Mexican holders of ADSs and CPOs to exercise preemptive rights, if and when applicable, no assurances can be made that we will be able to do so, particularly because regulatory approvals in Mexico are necessary for the issuance and delivery of CPOs. As a result of the limitations described above, if we issue additional shares in the future in connection with circumstances giving rise to preemptive rights, the equity interests of holders of ADSs and CPOs may be diluted. See “Description of Capital Stock—Preemptive Rights” and “Description of CPOs—Preemptive Rights.”
We do not intend to pay cash dividends for the foreseeable future, and our revolving line of credit with Banco Santander México and Bancomext may limit our ability to declare and pay dividends.
We have never declared or paid cash dividends on our common stock. We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or future financing instruments and such other factors as our board of directors deems relevant. In addition, our revolving line of credit with Banco Santander México and Bancomext may limit our ability to declare and pay dividends in the event that we fail to comply with the payment terms thereunder. See “Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Loan Agreements.”
 
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Minority shareholders may be less able to enforce their rights against us, our directors, or our controlling shareholders in Mexico.
Under Mexican law, the protections afforded to minority shareholders are different from those afforded to minority shareholders in the United States. For example, because Mexican laws concerning fiduciary duties of directors (i.e., the duty of care and the duty of loyalty) have been in existence for a relatively short period and are not as developed as securities laws in other jurisdictions, it is complex for minority shareholders to bring an action against directors for breach of this duty, as would be permitted in some other foreign jurisdictions. Also, such actions may not be initiated as a direct action, but as a shareholder derivative suit (that is for the benefit of our company). The grounds for shareholder derivative actions under Mexican law are limited. Even though applicable law has been modified to so permit, and procedures for class action lawsuits have been adopted, there is very limited experience with regards to class action lawsuits and how procedures for such suits are followed in Mexico. Therefore, it will be much more difficult for minority shareholders to enforce their rights against us, our directors, or our controlling shareholders than it would be for minority shareholders of a U.S. company.
Mexico has different corporate disclosure and accounting standards than those in the United States and other countries.
A principal objective of the securities laws of the United States, Mexico and other countries is to promote full and fair disclosure of all material corporate information, including accounting information. However, there may be different or less publicly available information about issuers of securities in Mexico than is regularly made available by public companies in countries with highly developed capital markets, including the United States.
We will be required to assess our internal control over financial reporting on an annual basis and any future adverse findings from such assessment could result in a loss of investor confidence in our financial reports, and significant expenses to remediate any internal control deficiencies and could ultimately have an adverse effect on the market price of the ADSs and Series A shares.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and beginning with our Annual Report on Form 20-F for the year ending December 31, 2014, our management will be required to report on the effectiveness of our internal control over financial reporting. In addition, although our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 because we currently meet the emerging growth company definition under the JOBS Act, we have determined that we will not avail ourselves of the exemption to Section 404 for emerging growth companies under Section 404(b) and that, consequently, we intend to cause our independent registered public accounting firm to provide such attestation. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. We are currently in the process of reviewing, documenting and testing our internal control over financial reporting. We may encounter problems or delays in completing the implementation of any changes necessary to make a favorable assessment of our internal control over financial reporting. In connection with the attestation process by our independent registered public accounting firm, we may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation. In addition, if we fail to maintain the adequacy of our internal control over financial reporting we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
As a public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act of 2002 and related rules implemented
 
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by the SEC. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers and may divert management’s attention. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Series A shares and ADSs, fines, sanctions and other regulatory action and potentially civil litigation.
 
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 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee or assurance of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:
 
 	•	 	the competitive environment in our industry;	
 
 	•	 	ability to keep cost low;	
 
 	•	 	changes in our fuel cost, the effectiveness of our fuel cost, hedges and our ability to hedge fuel costs;	
 
 	•	 	the impact of worldwide economic conditions, including the impact of the economic recession on customer travel behavior;	
 
 	•	 	actual or threatened terrorist attacks, global instability and potential U.S. military actions or activities;	
 
 	•	 	ability to generate non-ticket revenues;	
 
 	•	 	external conditions, including air traffic congestion, weather conditions and outbreak of disease;	
 
 	•	 	ability to maintain slots in the airports that we operate and service provided by airport operators;	
 
 	•	 	ability to operate through new airports that match our operative criteria;	
 
 	•	 	air travel substitutes;	
 
 	•	 	labor disputes, employee strikes and other labor-related disruptions, including in connection with our negotiations with the union representing our flight attendants;	
 
 	•	 	ability to attract and retain qualified personnel;	
 
 	•	 	loss of key personnel;	
 
 	•	 	aircraft-related fixed obligations;	
 
 	•	 	dependence on cash balances and operating cash flows;	
 
 	•	 	our aircraft utilization rate;	
 
 	•	 	maintenance costs;	
 
 	•	 	our reliance on automated systems and the risks associated with changes made to those systems;	
 
 	•	 	use of personal data;	
 
 	•	 	lack of marketing alliances;	
 
 	•	 	government regulation and interpretation and supervision of compliance with applicable law;	
 
 	•	 	maintaining and renewing our permits and concessions;	
 
 	•	 	our ability to execute our growth strategy;	
 
 	•	 	operational disruptions;	
 
 	•	 	our indebtedness;	
 
 	•	 	our liquidity;	
 
 	•	 	our reliance on third-party vendors and partners;	
 
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 	•	 	our reliance on a single fuel provider in Mexico;	
 
 	•	 	an aircraft accident or incident;	
 
 	•	 	our aircraft and engine suppliers;	
 
 	•	 	changes in the Mexican and VFR markets;	
 
 	•	 	insurance costs;	
 
 	•	 	environmental regulations; and	
 
 	•	 	other risk factors included under “Risk Factors” in this prospectus.	
In addition, in this prospectus, the words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “potential” and similar expressions, as they relate to our company, our business and our management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this prospectus. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
 
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 USE OF PROCEEDS
The net proceeds to us from the sale of the Series A shares and ADSs in the global offering are expected to be approximately U.S.$         million after deducting estimated discounts and commissions and expenses payable by us and assuming an initial public offering of U.S.$         per ADS, the midpoint of the range set forth on the cover of this prospectus. We currently intend to use a portion of the net proceeds from the global offering to prepay principal and interest under our loans with:
(a) Banco Inbursa, dated May 12, 2009, in an aggregate principal amount outstanding of Ps.257.1 million. Interest under this loan is payable semi-annually at an annual rate of the Mexican Interbank Rate of Equilibrium ( Tasa de Interé s Interbancaria de Equilibrio ) plus a spread. Currently, the principal may be prepaid subject to certain conditions including a prepayment premium equivalent to 25% of the amount to be prepaid (Ps.64.3 million). Also, 50% of any principal balance has to be paid on May 12, 2015 and any remaining principal balance has to be paid on May 12, 2016;
(b) Pasprot, dated May 12, 2009, in an aggregate principal amount outstanding of Ps.3.3 million. The prepayment premium is Ps.0.8 million. This loan agreement has substantially the same terms as the loan agreement with Banco Inbursa, including the terms relating to prepayments; and
(c) IFC, dated June 23, 2006, in an aggregate principal amount outstanding of U.S.$10.0 million under tranche C. Interest is payable semi-annually at the London Interbank Offered Rate, or LIBOR, plus a spread. Principal may be prepaid subject to certain conditions. The final maturity under tranche C is June 15, 2014.
The remaining net proceeds will be used for general corporate purposes, including pre-delivery payments of aircraft.
We will not receive any proceeds from the sale of Series A shares or ADSs by the selling shareholders.
For every U.S.$1.00 increase or decrease in the price per ADS in the global offering, the amount of proceeds to us will increase or decrease by approximately U.S.$         million.
 
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 EXCHANGE RATES
The following table sets forth, for the periods indicated, the high, low period-end and average buying rates, in each case for the purchase of U.S. dollars, all expressed in nominal pesos per U.S. dollar. We make no representation that the peso amounts referred to in this annual report could have been or could be converted into U.S. dollars at any particular rate or at all.

 	  	Rate (1)	 	
 	  	High	 	  	Low	 	  	Period  End (2)	 	  	Average (3)	 	
2006	  	 	11.4809	  	  	 	10.4303	  	  	 	10.8755	  	  	 	10.9010	  	
2007	  	 	11.2676	  	  	 	10.6639	  	  	 	10.8662	  	  	 	10.9269	  	
2008	  	 	13.9183	  	  	 	9.9180	  	  	 	13.5383	  	  	 	11.1383	  	
2009	  	 	15.3650	  	  	 	12.5969	  	  	 	13.0587	  	  	 	13.5095	  	
2010	  	 	13.1819	  	  	 	12.1575	  	  	 	12.3571	  	  	 	12.6367	  	
2011	  	 	14.2443	  	  	 	11.5023	  	  	 	13.9787	  	  	 	12.4273	  	
2012	  	 	14.3949	  	  	 	12.6299	  	  	 	13.0101	  	  	 	13.1685	  	
December 2012	  	 	13.0101	  	  	 	12.7236	  	  	 	13.0101	  	  	 	12.8730	  	
January 2013	  	 	12.9880	  	  	 	12.5868	  	  	 	12.7134	  	  	 	12.7128	  	
February 2013	  	 	12.8680	  	  	 	12.6294	  	  	 	12.8680	  	  	 	12.7164	  	
March 2013	  	 	12.8322	  	  	 	12.3546	  	  	 	12.3546	  	  	 	12.5490	  	
April 2013	  	 	12.3612	  	  	 	12.0691	  	  	 	12.1550	  	  	 	12.2156	  	
May 2013	  	 	12.6328	  	  	 	11.9807	  	  	 	12.6328	  	  	 	12.2394	  	
June 2013 (through June 19th)	  	 	12.9079	  	  	 	12.6916	  	  	 	12.7370	  	  	 	12.8039	  	

(1)	Mexican Central Bank.	
(2)	As published by the Mexican Central Bank as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on the period end.	
(3)	Average of month-end rates or daily rates, as applicable.	
Except for the period from September through December 1982, during a liquidity crisis, the Mexican Central Bank has consistently made foreign currency available to Mexican private-sector entities (such as us) to meet their foreign currency obligations, although amounts made available have, from time to time, been limited. Nevertheless, in the event of renewed shortages of foreign currency, there can be no assurance that foreign currency would continue to be available to private-sector companies or that foreign currency needed by us to service foreign currency obligations or to import goods could be purchased in the open market without substantial additional cost.
On June 19, 2013 the rate for the payment of obligations denominated in foreign currency payable in Mexico as published by the Mexican Central Bank for pesos was Ps.12.7370 per U.S.$1.00.
 
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 CAPITALIZATION
The following table sets forth our consolidated capitalization at March 31, 2013 on an actual basis and as adjusted to reflect the receipt of U.S.$         million in net proceeds from the issuance and sale of the Series A shares and ADSs in the global offering after deducting estimated discounts and commissions and expenses payable by us and the application of such net proceeds to our outstanding indebtedness as described in “Use of Proceeds”. These adjustments are based on our assumed initial price of U.S.         per ADS, the midpoint of the range set forth on the cover of this prospectus. This table should be read in conjunction with, and is qualified in its entirety by reference to, “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Consolidated Financial Information,” and our consolidated financial statements and the notes thereto included elsewhere in this prospectus.

 	  	March 31, 2013	 	
 	  	Actual	 	 	As Adjusted	 	
 	  	Pesos	 	 	Dollars	 	 	Pesos	 	  	Dollars	 	
 	  	(In thousands of pesos and thousands of
U.S. dollars) (1)	 	
Cash and cash equivalents	  	 	925,898	  	 	 	74,944	  	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Short-term liabilities—financial debt :	  				 				 				  				
Financial debt	  	 	368,441	  	 	 	29,822	  	 	 	—  	  	  	 	—  	  	
Accrued interest	  	 	22,222	  	 	 	1,799	  	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total short-term debt	  	 	390,663	  	 	 	31,621	  	 	 	—  	  	  	 	—  	  	
Long-term liabilities—financial debt :	  				 				 				  				
Financial debt	  	 	548,329	  	 	 	44,383	  	 	 	— (2	)  	  	 	— (2	)  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total debt	  	 	938,992	  	 	 	76,004	  	 	 	—  	  	  	 	—  	  	
Equity :	  				 				 				  				
Capital stock	  	 	2,376,098	  	 	 	192,325	  	 	 	—  	  	  	 	—  	  	
Treasury shares	  	 	(133,723	) 	 	 	(10,824	) 	 	 	—  	  	  	 	—  	  	
Contributions for future capital increases	  	 	1	  	 	 	—  	  	 	 	—  	  	  	 	—  	  	
Legal reserve	  	 	38,250	  	 	 	3,096	  	 	 	—  	  	  	 	—  	  	
Additional paid-in capital	  	 	(190,850	) 	 	 	(15,448	) 	 	 	—  	  	  	 	—  	  	
Accumulated losses	  	 	(991,931	) 	 	 	(80,288	) 	 	 	— (3	)  	  	 	— (3	)  	
Other accumulated comprehensive losses	  	 	(98,724	) 	 	 	(7,991	) 	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total equity attributable to equity holders of the parent	  	 	999,121	  	 	 	80,870	  	 	 	—  	  	  	 	—  	  	
Non-controlling interest	  	 	20,302	  	 	 	1,643	  	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total equity (4)	  	 	1,019,423	  	 	 	82,513	  	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total capitalization	  	 	1,958,415	  	 	 	158,517	  	 	 	—  	  	  	 	—  	  	

(1)	Peso amounts were converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.12.3546 per U.S.$1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such conversions should not be construed as a representation that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all.	
(2)	Contemplates repayment of loans with Banco Inbursa in an aggregate principal amount outstanding of Ps.257.1 million, with Pasprot in an aggregate principal amount outstanding of Ps.3.3 million and with IFC in an aggregate principal amount outstanding of U.S.$10.0 million (Ps.123.5 million). See “Use of Proceeds.”	
(3)	Includes prepayment premium of the loans with Banco Inbursa of Ps.64.3 million and with Pasprot of Ps.0.8 million. See “Use of Proceeds.”	
(4)	For every U.S.$1.00 increase or decrease in the price per ADS in the global offering, total equity will increase or decrease by approximately U.S.$         million.	
 
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 DILUTION
As of March 31, 2013, our total shareholders’ equity was Ps.           million. At March 31, 2013, we had a net tangible book value under IFRS of Ps.         per Series A share or U.S.$         per ADS based on the ratio of one Series A share of common stock per CPO and ten CPOs per ADS. Net tangible book value represents the amount of our total tangible assets less total liabilities, divided by the total number of equity shares outstanding at March 31, 2013. After giving effect to the sale of the ADSs offered by us in the international offering and the Series A shares offered in the Mexican offering, and, assuming no exercise of the underwriters’ over-allotment options, at a price of U.S.$         per ADS, the midpoint of the range set forth on the cover of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value estimated at March 31, 2013 would have been approximately Ps.          , representing Ps.         per Series A share or U.S.$         per ADS. At an assumed initial public offering price of U.S.$         per ADS, this represents an immediate increase in net tangible book value of Ps.         per Series A share or U.S.$         per ADS, to existing shareholders and an immediate dilution in net tangible book value of U.S.$         per ADS to new investors purchasing ADSs in this offering. Dilution for this purpose represents the difference between the price per Series A share or ADS paid by these purchasers and net tangible book value per Series A share or ADS immediately after the completion of the global offering.
The following table illustrates the dilution in net tangible book value per ADS to purchasers of ADSs in the global offering as of March 31, 2013:

 	  	U.S.$	
Assumed initial public offering price per ADS (1)	  		
Net tangible book value per ADS at March 31, 2013	  		
Increase in net tangible book value per ADS attributable to new investors	  		
	  	 	
Pro forma net tangible book value per ADS after this offering	  		
	  	 	
Dilution per ADS to new investors (2)	  		

(1)	Taking into consideration the sale of ADSs offered by us in the international offering, assuming no exercise of the over-allotment options, at a price of U.S.$         per ADS, the midpoint of the range set forth on the cover of this prospectus.	
(2)	A U.S.$1.00 increase (decrease) in the assumed initial offering price of U.S.$         per ADS would increase (decrease) the dilution in the net tangible book value to investors in this offering by U.S.$         per ADS.	
The following table summarizes on a pro forma basis the difference between our existing shareholders and new investors with respect to the number of shares issued by us, the total consideration paid and the average price per share paid as of March 31, 2013.

 	  	Shares Purchased	 	 	Total Consideration	 	 	Average
Price per
Share	 	
 	  	Number	  	Percentage	 	 	Amount	 	  	Percentage	 	 			
 	  	(in thousands)	 	
						
Existing Shareholders	  		  	 	    	% 	 	 	Ps.                 	  	  	 	    	% 	 	 	Ps.         	  	
						
New Investors	  		  	 	    	% 	 				  	 	    	% 	 				

Total	  		  	 	      	% 	 	 	Ps.                 	  	  	 	      	% 	 	 	Ps.         	  	
The foregoing discussions and tables are based upon 999,514,767 shares of our common stock issued and outstanding as of March 31, 2013, after giving pro forma effect to the stock split and capital increase related to the global offering.  
To the extent outstanding options, or options or warrants we may issue in the future with exercise prices below the initial public offering price, are exercised, there will be further dilution to new public investors.
 
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 SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following tables summarize the financial and operating data for our business for the periods presented. You should read this summary financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, all included elsewhere in this prospectus. We prepare consolidated financial statements in accordance with IFRS.
We derived the selected consolidated statements of operations data for the years ended December 31, 2010, 2011 and 2012 and the summary consolidated statements of financial position data as of December 31, 2011 and 2012 from our audited financial statements included in this prospectus. We derived the selected consolidated statements of operations data for the years ended December 31, 2008 and 2009 and the selected consolidated statements of financial position data as of December 31, 2008, 2009 and 2010 from our historical consolidated financial statements not included herein. We derived the selected consolidated statements of operations data for the three months ended March 31, 2012 and 2013 and the selected consolidated statements of financial position data as of March 31, 2013 from our unaudited interim condensed consolidated financial statements included in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2008	 	 	2009	 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos,
except share and per share data and operating data)	 	 	(in thousands
of U.S.
dollars) (1)	 	 	(unaudited in thousands
of pesos, except share
and per share data and
operating data)	 	 	(unaudited in
thousands
of U.S.
dollars) (1)	 	
CONSOLIDATED STATEMENTS OF OPERATIONS	 				 				 				 				 				 				 				 				 				
Operating revenues:	 				 				 				 				 				 				 				 				 				
Passenger	 	 	4,090,854	  	 	 	4,717,225	  	 	 	6,278,469	  	 	 	8,036,275	  	 	 	10,176,747	  	 	 	823,721	  	 	 	2,099,908	  	 	 	2,587,535	  	 	 	209,439	  	
Non-ticket	 	 	328,306	  	 	 	328,650	  	 	 	498,921	  	 	 	842,341	  	 	 	1,509,668	  	 	 	122,195	  	 	 	312,241	  	 	 	474,052	  	 	 	38,370	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	4,419,160	  	 	 	5,045,875	  	 	 	6,777,390	  	 	 	8,878,616	  	 	 	11,686,415	  	 	 	945,916	  	 	 	2,412,149	  	 	 	3,061,587	  	 	 	247,809	  	
Other operating income	 	 	(113,474	) 	 	 	(78,966	) 	 	 	(158	) 	 	 	(73,831	) 	 	 	(68,800	) 	 	 	(5,569	) 	 	 	(19,413	) 	 	 	(24,240	) 	 	 	(1,962	) 	
Fuel	 	 	1,904,038	  	 	 	1,479,190	  	 	 	2,146,011	  	 	 	3,823,232	  	 	 	4,730,089	  	 	 	382,861	  	 	 	1,088,405	  	 	 	1,198,628	  	 	 	97,019	  	
Aircraft rent	 	 	825,980	  	 	 	1,211,401	  	 	 	1,197,022	  	 	 	1,508,135	  	 	 	1,885,696	  	 	 	152,631	  	 	 	445,508	  	 	 	514,297	  	 	 	41,628	  	
Salaries and benefits	 	 	608,549	  	 	 	687,713	  	 	 	852,123	  	 	 	1,120,359	  	 	 	1,302,971	  	 	 	105,464	  	 	 	296,836	  	 	 	362,840	  	 	 	29,369	  	
Landing, take-off and navigation expenses	 	 	503,883	  	 	 	569,919	  	 	 	867,690	  	 	 	1,281,583	  	 	 	1,639,945	  	 	 	132,740	  	 	 	370,961	  	 	 	460,772	  	 	 	37,296	  	
Sales, marketing and distribution expenses (2)	 	 	454,275	  	 	 	445,317	  	 	 	615,431	  	 	 	750,474	  	 	 	751,919	  	 	 	60,861	  	 	 	162,739	  	 	 	186,573	  	 	 	15,101	  	
Maintenance expenses (3)	 	 	136,219	  	 	 	177,778	  	 	 	276,128	  	 	 	379,626	  	 	 	498,836	  	 	 	40,377	  	 	 	116,242	  	 	 	141,268	  	 	 	11,434	  	
Other operating expenses	 	 	178,695	  	 	 	198,532	  	 	 	255,413	  	 	 	359,046	  	 	 	356,517	  	 	 	28,857	  	 	 	74,981	  	 	 	102,227	  	 	 	8,274	  	
Depreciation and amortization (4)	 	 	41,182	  	 	 	45,929	  	 	 	56,572	  	 	 	102,977	  	 	 	211,002	  	 	 	17,079	  	 	 	41,678	  	 	 	81,245	  	 	 	6,576	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	4,539,347	  	 	 	4,736,813	  	 	 	6,266,232	  	 	 	9,251,601	  	 	 	11,308,175	  	 	 	915,301	  	 	 	2,577,937	  	 	 	3,023,610	  	 	 	244,376	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	 	 	(120,187	) 	 	 	309,062	  	 	 	511,158	  	 	 	(372,985	) 	 	 	378,240	  	 	 	30,615	  	 	 	(165,788	) 	 	 	37,977	  	 	 	3,074	  	
Finance income	 	 	4,624	  	 	 	4,821	  	 	 	5,091	  	 	 	5,539	  	 	 	13,611	  	 	 	1,102	  	 	 	2,616	  	 	 	4,355	  	 	 	353	  	
Finance cost	 	 	(31,523	) 	 	 	(86,856	) 	 	 	(52,221	) 	 	 	(57,718	) 	 	 	(89,731	) 	 	 	(7,263	) 	 	 	(18,769	) 	 	 	(18,415	) 	 	 	(1,491	) 	
Exchange gain (loss), net	 	 	256,060	  	 	 	(12,820	) 	 	 	(56,144	) 	 	 	110,150	  	 	 	(95,322	) 	 	 	(7,716	) 	 	 	(87,812	) 	 	 	(107,830	) 	 	 	(8,728	) 	
Other financing (costs) income, net (5)	 	 	(1,077,791	) 	 	 	9,283	  	 	 	(3,455	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	(848,630	) 	 	 	(85,572	) 	 	 	(106,729	) 	 	 	57,971	  	 	 	(171,442	) 	 	 	(13,877	) 	 	 	(103,965	) 	 	 	(121,890	) 	 	 	(9,866	) 	
(Loss) income before income tax	 	 	(968,817	) 	 	 	223,490	  	 	 	404,429	  	 	 	(315,014	) 	 	 	206,798	  	 	 	16,738	  	 	 	(269,753	) 	 	 	(83,913	) 	 	 	(6,792	) 	
Income tax benefit (expense)	 	 	4,495	  	 	 	(2,218	) 	 	 	238,684	  	 	 	(476	) 	 	 	(3,481	) 	 	 	(281	) 	 	 	4,532	  	 	 	19,291	  	 	 	1,561	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	 	 	(964,322	) 	 	 	221,272	  	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Attribution of net (loss) income:	 				 				 				 				 				 				 				 				 				
Equity holders of the parent	 	 	(829,350	) 	 	 	196,655	  	 	 	572,234	  	 	 	(293,540	) 	 	 	215,239	  	 	 	17,422	  	 	 	(222,940	) 	 	 	(62,286	) 	 	 	(5,042	) 	
Non-controlling interest	 	 	(134,972	) 	 	 	24,617	  	 	 	70,879	  	 	 	(21,950	) 	 	 	(11,922	) 	 	 	(965	) 	 	 	(42,281	) 	 	 	(2,336	) 	 	 	(189	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	 	 	(964,322	) 	 	 	221,272	  	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	

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 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2008	 	 	2009	 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos,
except share and per share data and operating data)	 	 	(in thousands
of U.S.
dollars) (1)	 	 	(unaudited in thousands of
pesos, except share and per
share data and operating
data)	 	 	(unaudited in
thousands
of U.S.
dollars) (1)	 	
Weighted average shares outstanding	 				 				 				 				 				 				 				 				 				
Basic and diluted (6)	 	 	331,788,288	  	 	 	658,684,962	  	 	 	727,595,544	  	 	 	727,595,544	  	 	 	732,441,216	  	 	 	—  	 	 	 	727,595,544	  	 	 	796,916,380	  	 	 	—  	 	
Earnings (loss) per share	 				 				 				 				 				 				 				 				 				
Basic and diluted (6)	 	 	(0.002500	) 	 	 	0.000299	  	 	 	0.000786	  	 	 	(0.000403	) 	 	 	0.000294	  	 	 	0.000024	  	 	 	(0.000306	) 	 	 	(0.000078	) 	 	 	(0.000006	)	
Pro forma weighted average share outstanding	 				 				 				 				 				 				 				 				 				
Basic (7)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	893,156,216	  	 	 	—  	  	 	 	—  	  	 	 	957,631,380	  	 	 	—  	  	
Diluted (8)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	935,039,603	  	 	 	—  	  	 	 	—  	  	 	 	999,514,767	  	 	 	—  	  	
Pro forma earnings per share	 				 				 				 				 				 				 				 				 				
Basic (7)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.000298	  	 	 	0.000024	  	 	 	—  	  	 	 	(0.000046	) 	 	 	(0.000004	) 	
Diluted (8)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.000284	  	 	 	0.000023	  	 	 	—  	  	 	 	(0.000044	) 	 	 	(0.000004	) 	
Pro forma earnings per ADS	 				 				 				 				 				 				 				 				 				
Basic (9)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.002976	  	 	 	0.000241	  	 	 	—  	  	 	 	(0.000464	) 	 	 	(0.000038	) 	
Diluted (10)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.002842	  	 	 	0.000230	  	 	 	—  	  	 	 	(0.000445	) 	 	 	(0.000036	) 	
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	 				 				 				 				 				 				 				 				 				
Cash and cash equivalents	 	 	113,513	  	 	 	574,584	  	 	 	676,913	  	 	 	441,068	  	 	 	822,076	  	 	 	66,540	  	 	 	687,083	  	 	 	925,898	  	 	 	74,944	  	
Accounts receivable, net	 	 	149,684	  	 	 	272,184	  	 	 	202,525	  	 	 	238,939	  	 	 	387,316	  	 	 	31,350	  	 	 	315,083	  	 	 	638,504	  	 	 	51,682	  	
Guarantee deposits – current portion	 	 	—  	 	 	 	64,090	  	 	 	330,071	  	 	 	169,647	  	 	 	238,242	  	 	 	19,285	  	 	 	203,815	  	 	 	284,135	  	 	 	22,998	  	
Total current assets	 	 	388,358	  	 	 	1,059,499	  	 	 	1,396,808	  	 	 	1,130,547	  	 	 	1,815,018	  	 	 	146,911	  	 	 	1,517,046	  	 	 	2,234,344	  	 	 	180,852	  	
Total assets	 	 	2,167,028	  	 	 	2,818,532	  	 	 	3,700,631	  	 	 	5,061,681	  	 	 	5,701,558	  	 	 	461,494	  	 	 	5,429,923	  	 	 	6,027,846	  	 	 	487,902	  	
Short-term liabilities	 	 	1,805,583	  	 	 	1,421,886	  	 	 	1,927,096	  	 	 	3,178,922	  	 	 	3,721,897	  	 	 	301,257	  	 	 	3,747,351	  	 	 	4,199,941	  	 	 	339,949	  	
Long-term liabilities	 	 	284,355	  	 	 	722,602	  	 	 	547,528	  	 	 	1,023,020	  	 	 	904,994	  	 	 	73,252	  	 	 	1,075,056	  	 	 	808,482	  	 	 	65,440	  	
Total liabilities	 	 	2,089,938	  	 	 	2,144,488	  	 	 	2,474,624	  	 	 	4,201,942	  	 	 	4,626,891	  	 	 	374,509	  	 	 	4,822,407	  	 	 	5,008,423	  	 	 	405,389	  	
Capital stock	 	 	1,718,007	  	 	 	1,966,313	  	 	 	1,966,313	  	 	 	1,966,313	  	 	 	2,376,098	  	 	 	192,325	  	 	 	1,966,313	  	 	 	2,376,098	  	 	 	192,325	  	
Total equity	 	 	77,090	  	 	 	674,044	  	 	 	1,226,007	  	 	 	859,739	  	 	 	1,074,667	  	 	 	86,985	  	 	 	607,516	  	 	 	1,019,423	  	 	 	82,513	  	
CASH FLOW DATA	 				 				 				 				 				 				 				 				 				
Net cash flows (used in) provided by operating activities	 	 	(567,747	) 	 	 	(31,310	) 	 	 	539,001	  	 	 	(147,705	) 	 	 	497,448	  	 	 	40,263	  	 	 	262,471	  	 	 	271,606	  	 	 	21,983	  	
Net cash flows (used in) provided by investing activities	 	 	(250,395	) 	 	 	40,507	  	 	 	(321,347	) 	 	 	(628,030	) 	 	 	187,161	  	 	 	15,150	  	 	 	(78,230	) 	 	 	61,863	  	 	 	5,007	  	
Net cash flows provided by (used in) financing activities	 	 	553,368	  	 	 	459,859	  	 	 	(90,065	) 	 	 	562,373	  	 	 	(271,898	) 	 	 	(22,008	) 	 	 	43,307	  	 	 	(204,281	) 	 	 	(16,535	) 	
OTHER FINANCIAL DATA	 				 				 				 				 				 				 				 				 				
EBITDA (11)	 	 	(900,736	) 	 	 	359,645	  	 	 	513,250	  	 	 	(159,858	) 	 	 	493,920	  	 	 	39,978	  	 	 	(211,922	) 	 	 	11,392	  	 	 	922	  	
Adjusted EBITDA (11)	 	 	(79,005	) 	 	 	363,182	  	 	 	572,849	  	 	 	(270,008	) 	 	 	589,242	  	 	 	47,694	  	 	 	(124,110	) 	 	 	119,222	  	 	 	9,650	  	
Adjusted EBITDAR (11)	 	 	746,975	  	 	 	1,574,583	  	 	 	1,769,871	  	 	 	1,238,127	  	 	 	2,474,938	  	 	 	200,325	  	 	 	321,398	  	 	 	633,519	  	 	 	51,278	  	
OPERATING DATA (12)	 				 				 				 				 				 				 				 				 				
Aircraft at end of period	 	 	21	  	 	 	21	  	 	 	26	  	 	 	34	  	 	 	41	  	 	 	—  	 	 	 	35	  	 	 	43	  	 	 	—  	 	
Average daily aircraft utilization (block hours)	 	 	13.09	  	 	 	11.72	  	 	 	12.99	  	 	 	13.38	  	 	 	12.40	  	 	 	—  	 	 	 	12.07	  	 	 	11.86	  	 	 	—  	 	
 
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 	 	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
 	 	2008	 	 	2009	 	 	2010	 	 	2011
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2012
(Restated) (*)	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	 	(in thousands of pesos,
except share and per share data and operating data)	 	 	(in thousands
of U.S.
dollars) (1)	 	 	(unaudited in thousands
of pesos, except share and
per share data and
operating data)	 	 	(unaudited in
thousands
of U.S.
dollars) (1)	 	
Average daily aircraft utilization (flight hours)	 	 	11.08	  	 	 	10.03	  	 	 	11.33	  	 	 	11.38	  	 	 	10.42	  	 	 	—  	 	 	 	10.28	  	 	 	9.93	  	 	 	—  	 	
Airports served at end of period	 	 	25	  	 	 	24	  	 	 	29	  	 	 	31	  	 	 	37	  	 	 	—  	 	 	 	31	  	 	 	39	  	 	 	—  	 	
Departures	 	 	33,823	  	 	 	34,249	  	 	 	38,740	  	 	 	51,255	  	 	 	58,806	  	 	 	—  	 	 	 	13,090	  	 	 	15,699	  	 	 	—  	 	
Average stage length (miles)	 	 	890	  	 	 	982	  	 	 	1,038	  	 	 	1,042	  	 	 	1,023	  	 	 	—  	 	 	 	1,052	  	 	 	1,007	  	 	 	—  	 	
Passenger flight segments (thousands)	 	 	3,363	  	 	 	3,332	  	 	 	4,200	  	 	 	5,644	  	 	 	7,037	  	 	 	—  	 	 	 	1,511	  	 	 	1,868	  	 	 	—  	 	
Booked passengers (thousands)	 	 	3,505	  	 	 	3,479	  	 	 	4,416	  	 	 	5,934	  	 	 	7,408	  	 	 	—  	 	 	 	1,601	  	 	 	1,961	  	 	 	—  	 	
Revenue passenger miles (RPMs) (thousands)	 	 	3,177,100	  	 	 	3,465,040	  	 	 	4,628,014	  	 	 	6,290,707	  	 	 	7,668,202	  	 	 	—  	 	 	 	1,702,655	  	 	 	2,000,245	  	 	 	—  	 	
Available seat miles (ASMs) (thousands)	 	 	4,296,000	  	 	 	4,892,349	  	 	 	5,853,823	  	 	 	7,939,365	  	 	 	9,244,425	  	 	 	—  	 	 	 	2,100,551	  	 	 	2,474,978	  	 	 	—  	 	
Load factor	 	 	74	% 	 	 	71	% 	 	 	79	% 	 	 	79	% 	 	 	83	% 	 	 	—  	 	 	 	81	% 	 	 	81	% 	 	 	—  	 	
Average ticket revenue per booked passenger	 	 	1,167	  	 	 	1,356	  	 	 	1,422	  	 	 	1,354	  	 	 	1,374	  	 	 	111.2	  	 	 	1,312	  	 	 	1,320	  	 	 	106.8	  	
Total operating revenue per ASM (TRASM) (cents)	 	 	102.9	  	 	 	103.1	  	 	 	115.8	  	 	 	111.8	  	 	 	126.4	  	 	 	10.2	  	 	 	114.8	  	 	 	123.7	  	 	 	10.0	  	
Passenger revenue per ASM (RASM) (cents)	 	 	95.2	  	 	 	96.4	  	 	 	107.3	  	 	 	101.2	  	 	 	110.1	  	 	 	8.9	  	 	 	100.0	  	 	 	104.5	  	 	 	8.5	  	
Operating expenses per ASM (CASM) (cents)	 	 	105.7	  	 	 	96.8	  	 	 	107.0	  	 	 	116.5	  	 	 	122.3	  	 	 	9.9	  	 	 	122.7	  	 	 	122.2	  	 	 	9.9	  	
CASM ex fuel (cents)	 	 	61.3	  	 	 	66.6	  	 	 	70.4	  	 	 	68.4	  	 	 	71.2	  	 	 	5.8	  	 	 	70.9	  	 	 	73.7	  	 	 	6.0	  	
Fuel gallons consumed (thousands)	 	 	56,437	  	 	 	61,115	  	 	 	74,075	  	 	 	97,970	  	 	 	112,225	  	 	 	—  	 	 	 	25,260	  	 	 	29,181	  	 	 	—  	 	
Average economic fuel cost per gallon	 	 	33.7	  	 	 	24.2	  	 	 	29.0	  	 	 	39.0	  	 	 	42.1	  	 	 	3.4	  	 	 	43.1	  	 	 	41.1	  	 	 	3.3	  	
Employees per aircraft at end of period	 	 	68	  	 	 	75	  	 	 	71	  	 	 	67	  	 	 	63	  	 	 	—  	 	 	 	68	  	 	 	60	  	 	 	—  	 	

*	We decided to restate our consolidated financial statements as detailed in note 1(u) to our audited consolidated financial statements and note 2 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.	
(1)	Peso amounts were converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.12.3546 per U.S.$1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such conversions should not be construed as a representation that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all.	
(2)	Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5.1 million. These amounts were recognized in sales, marketing and distribution expenses. See note 11 to our consolidated financial statements included elsewhere in this prospectus.	
(3)	Includes routine and ordinary maintenance expenses only. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Description of Our Principal Line Items.”	
(4)	Includes, among other things, major maintenance expenses, which are capitalized and subsequently amortized. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Description of Our Principal Line Items.”	
(5)	During the year ended December 31, 2008, the Company had derivative financial instruments related to jet fuel and foreign currency transactions that were classified as trading. Accordingly, the Company recognized a loss of Ps.1,077.8 million under the caption other financing costs in the consolidated statement of operations in respect of changes in the fair value of those derivative financial instruments.	
(6)	Unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and non-dilutive at such date, and accordingly, they have been excluded in the determination of weighted average diluted shares outstanding and disregarded in the calculation of diluted earnings per share.	
(7)	The basis used for the computation of the pro forma information in respect of basic shares for the year ended December 31, 2012 is as follows: (i) Ps.215.2 million of net income attributed to equity holders of the parent in 2012 plus an aggregate of Ps.50.5 million in accrued interest in 2012 under the loans with Banco Inbursa, IFC, and Pasprot, for an aggregate principal amount of Ps.390.5 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 893,156,216, which is the pro forma weighted average of basic shares outstanding in 2012 equal to 732,441,216 plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.390.5 million.	
 
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The basis used for the computation of the pro forma information in respect of basic shares for the three months ended March 31, 2013 is as follows: (i) Ps.62.3 million of net loss attributed to equity holders of the parent for the three months ended March 31, 2013 plus an aggregate of Ps.17.8 million in accrued interest for the three months ended March 31, 2013 under the loans with Banco Inbursa, IFC and Pasprot for an aggregate principal amount of Ps.383.9 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 957,631,380, which is the pro forma weighted average of basic shares outstanding for the three months ended March 31, 2013 equal to 796,916,380 plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.383.9 million.
(8)	The basis used for the computation of the pro forma information in respect of diluted shares for the year ended December 31, 2012 additionally gives effect to the shares subject to the management incentive plan and our swap shares and is as follows: (i) Ps.215.2 million of net income attributed to equity holders of the parent in 2012 plus an aggregate of Ps.50.5 million in accrued interest in 2012 under the loans with Banco Inbursa, IFC, and Pasprot, for an aggregate principal amount of Ps.390.5 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 935,039,603, which is the pro forma weighted average of diluted shares outstanding in 2012 equal to 774,324,603 (i.e., the unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and have been included in the determination of the pro forma weighted average diluted shares outstanding and in the calculation of pro forma diluted earnings per share) plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.390.5 million.	
The basis used for the computation of the pro forma information in respect of diluted shares for the three months ended March 31, 2013 additionally gives effect to the shares subject to the management incentive plan and our swap shares and is as follows: (i) Ps.62.3 million of net loss attributed to equity holders of the parent for the three months ended March 31, 2013 plus an aggregate of Ps.17.8 million in accrued interest for the three months ended March 31, 2013 under the loans with Banco Inbursa, IFC and Pasprot for an aggregate principal amount of Ps.383.9 million expected to be repaid with a portion of the net proceeds from the global offering, divided by (ii) 999,514,767, which is the weighted average of diluted shares outstanding for the three months ended March 31, 2013 equal to 838,799,767 (i.e., the unvested shares awarded under the management incentive plan and our swap shares are deemed treasury shares and have been included in the determination of the pro forma weighted average diluted shares outstanding and in the calculation of pro forma diluted earnings per share) plus 160,715,000 shares issued in connection with the capital increase relating to the global offering. Using the midpoint of the price range per ADS on the front cover of this prospectus of U.S.$        , we would need net proceeds from the sale of              ADSs to repay such aggregate principal amount of Ps.383.9 million.
(9)	The basis used for the computation of the pro forma information is to multiply the pro forma earnings per basic share obtained pursuant to footnote (7) above by ten, which is the number of CPOs represented by each ADS. Each CPO, in turn, represents a financial interest in one Series A share of common stock of Volaris.	
(10)	The basis used for the computation of the pro forma information is to multiply the pro forma earnings per diluted share obtained pursuant to footnote (8) above by ten, which is the number of CPOs represented by each ADS. Each CPO, in turn, represents a financial interest in one Series A share of common stock of Volaris.	
(11)	EBITDA, Adjusted EBITDA and Adjusted EBITDAR are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR are well recognized performance measurements in the airline industry that are frequently used by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry. However, because derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR are not determined in accordance with IFRS, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR as presented may not be directly comparable to similarly titled measures presented by other companies.	
(12)	See “Glossary of Airlines and Airline Terms” elsewhere in this prospectus for definitions of terms used in this table.	
 
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The following table represents the reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR to net (loss) income for the periods indicated below:

   	  	For the Years ended December 31,	 	 	Three Months Ended March 31,	 	
   	  	2008	 	 	2009	 	 	2010	 	 	2011
(Restated) (*)	 	 	2012	 	 	2012	 	 	2012	 	 	2013
(Restated) (*)	 	 	2013
(Restated) (*)	 	
 	  	(in thousands of pesos)	 	 	(in thousands of
U.S. dollars) (1)	 	 	(unaudited in
thousands of pesos,
except per share and
share amounts)	 	 	(unaudited
in
thousands
of U.S.
dollars) (1)	 	
Reconciliation:	  				 				 				 				 				 				
Net (loss) income	  	 	(964,322	) 	 	 	221,272	  	 	 	643,113	  	 	 	(315,490	) 	 	 	203,317	  	 	 	16,457	  	 	 	(265,221	) 	 	 	(64,622	) 	 	 	(5,231	) 	
Plus (minus):	  				 				 				 				 				 				
Finance cost	  	 	31,523	  	 	 	86,856	  	 	 	52,221	  	 	 	57,718	  	 	 	89,731	  	 	 	7,263	  	 	 	18,769	  	 	 	18,415	  	 	 	1,491	  	
Finance income	  	 	(4,624	) 	 	 	(4,821	) 	 	 	(5,091	) 	 	 	(5,539	) 	 	 	(13,611	) 	 	 	(1,102	) 	 	 	(2,616	) 	 	 	(4,355	) 	 	 	(353	) 	
(Benefit)/provision for income tax	  	 	(4,495	) 	 	 	2,218	  	 	 	(238,684	) 	 	 	476	  	 	 	3,481	  	 	 	281	  	 	 	(4,532	) 	 	 	(19,291	) 	 	 	(1,561	) 	
Depreciation and amortization	  	 	41,182	  	 	 	45,929	  	 	 	56,572	  	 	 	102,977	  	 	 	211,002	  	 	 	17,079	  	 	 	41,678	  	 	 	81,245	  	 	 	6,576	  	
Business alliance amortization	  	 	—	  	 	 	8,191	  	 	 	5,119	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	  	 	(900,736	) 	 	 	359,645	  	 	 	513,250	  	 	 	(159,858	) 	 	 	493,920	  	 	 	39,978	  	 	 	(211,922	) 	 	 	11,392	  	 	 	922	  	
Exchange (gain) loss, net	  	 	(256,060	) 	 	 	12,820	  	 	 	56,144	  	 	 	(110,150	) 	 	 	95,322	  	 	 	7,716	  	 	 	87,812	  	 	 	107,830	  	 	 	8,728	  	
Other financing cost (income), net**	  	 	1,077,791	  	 	 	(9,283	) 	 	 	3,455	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	  	 	(79,005	) 	 	 	363,182	  	 	 	572,849	  	 	 	(270,008	) 	 	 	589,242	  	 	 	47,694	  	 	 	(124,110	) 	 	 	119,222	  	 	 	9,650	  	
Aircraft rent	  	 	825,980	  	 	 	1,211,401	  	 	 	1,197,022	  	 	 	1,508,135	  	 	 	1,885,696	  	 	 	152,631	  	 	 	445,508	  	 	 	514,297	  	 	 	41,628	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDAR	  	 	746,975	  	 	 	1,574,583	  	 	 	1,769,871	  	 	 	1,238,127	  	 	 	2,474,938	  	 	 	200,325	  	 	 	321,398	  	 	 	633,519	  	 	 	51,278	  	

 	*	We decided to restate our consolidated financial statements as detailed in note 1(u) to our audited consolidated financial statements and note 2 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.	
 	**	During the year ended December 31, 2008, the Company had derivative financial instruments related to jet fuel and foreign currency transactions that were classified as trading. Accordingly, the Company recognized a loss of Ps.1,077.8 million under the caption other financing costs in the consolidated statement of operations in respect of changes in the fair value of those derivative financial instruments.	
 
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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this prospectus. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”
Overview
We are a ULCC based in Mexico and utilize our ULCC business model and efficient operations to offer low base fares and to stimulate demand while aiming to provide high quality customer service. We target passengers who are VFR, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States. Our unbundled pricing strategy allows us to provide low base fares and enables our passengers to select and pay for a range of optional products and services for additional fees. We had net income of Ps.203.3 million (U.S.$16.5 million) in 2012 and net loss of Ps.64.6 million (U.S.$5.2 million) in the three months ended March 31, 2013. In addition, our revenues were Ps.11,686.4 million (U.S.$945.9 million) in 2012 and Ps.3,061.6 million (U.S.$247.8 million) in the three months ended March 31, 2013.
Since we began operations in 2006, we have increased our routes from five to 80 and grown our cost-efficient Airbus A320 family aircraft from four to 43 as of March 31, 2013. We currently operate up to 220 daily flight segments on routes that connect 30 cities in Mexico and ten cities in the United States. We have substantial market presence in the top five airports in Mexico, based on number of passengers, comprising Cancún, Guadalajara, Mexico City, Monterrey and Tijuana. The ten cities that we serve in the United States are home to some of the most populous Mexican communities in the United States based on data from the Pew Hispanic Research Center.
We are the lowest cost carrier based on CASM among the other Latin American publicly traded airlines. In 2012, our CASM was Ps.1.223 (U.S.$0.099), compared to an average CASM of U.S.$0.140 for the other Latin American publicly traded airlines. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air, American, Delta and United, which had an average CASM of U.S.$0.145 in 2012. With our ULCC business model, we have grown significantly while maintaining a low CASM over the last five years. We have achieved this through our efficient and uniform fleet, high asset utilization, our emphasis on direct sales and distribution and our variable, performance-based compensation structure. We have a relentless focus on low costs as part of our organizational culture, and we believe that we can further lower our CASM by deploying additional Airbus A320 aircraft and leveraging our existing infrastructure to drive economies of scale. We believe that further reductions to our CASM will allow us to continue to lower base fares, stimulate market demand and increase non-ticket revenue opportunities.
Our ULCC business model and low CASM allow us to compete principally through offering low base fares to stimulate demand. We use our yield management system to set our fares in an effort to achieve appropriate yields and load factors on each route we operate. We use promotional fares to stimulate demand and our base fares are priced to compete with long-distance bus fares in Mexico. During 2012, our average base fare was Ps.1,374 (U.S.$111) and we regularly offer promotional base fares of Ps.499 (U.S.$40) or less. Since May 2012, we have unbundled certain components of our air travel service as part of a strategy to enable our passengers to select and pay for the products and services they want to use. This unbundling strategy has allowed us to significantly grow our non-ticket and total revenue. We plan to continue to use low base fares to stimulate additional passenger demand, shift bus passengers to air travel and increase our load factor. In 2012, our average load factor was 82.9%, compared to an average load factor of 76.0% for the other Latin American publicly traded
 
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airlines and 83.6% for our U.S.-based publicly traded target market competitors. Higher load factors help us generate additional non-ticket and total revenue, which in turn, allow us to further lower base fares and stimulate new demand.
In addition to low fares, we also aim to deliver a high quality flying experience to our passengers. We strive to deliver on-time performance to our customers, with an 83.6% on-time performance rate in 2012. We believe that we have developed strong brand recognition due to our focus on delivering good value and a positive traveling experience to our customers. We believe that our corporate culture of positive “customer relationship management” has also been a key element of our success.
Prior to the consummation of the offering, we will have only two classes of outstanding shares, Series A shares reserved for Mexican holders, and Series B shares for non-Mexican holders. Holders of ADSs or CPOs will not be entitled to vote, at any time, the underlying Series A shares. Mexican holders of Series A shares will be entitled to vote their shares on all matters. The CPO trustee will vote the CPOs in accordance with the vote of the majority of the outstanding Series A shares voted directly by Mexican investors at the relevant shareholders’ meeting. Holders of Series B shares will be entitled to vote their shares on all matters and, for so long as such Series B shares represent 12% or more of our outstanding capital stock, their affirmative vote will be required to approve any matters related to (i) by-law amendments affecting Series B shares, (ii) de-registration of Series A shares from the National Securities Registry, (iii) mergers or spinoffs, (iv) the incurrence indebtedness or granting of guarantees if the Lease-Adjusted Net Debt to EBITDAR ratio exceeds 4.25 times in 2013 and 3.25 times thereafter (Lease-Adjusted Net Debt is the sum of short-term and long-term debt, 7.0 times the aircraft rent expense for the last four quarters, less cash and cash equivalents at the end of the last quarter for which financial statements have been prepared and EBITDAR shall have the meaning set forth herein), and (v) any material changes to accounting policies. Holders of Series B shares have the right to elect three directors, so long as such Series B shares represent 12% or more of our outstanding capital stock. Holders of Series A shares have the right to elect one director for each 10% block of our outstanding capital stock. All shares representing our capital stock, either Series A shares or Series B shares, grants the holders the same economic rights and there are no preferences and/or restrictions attaching to that any class or series of shares on the distribution of dividends and other distributions made in respect thereto.
Description of Our Principal Line Items
Operating Revenues
Passenger Revenue . We derive our operating revenues primarily from transporting passengers on our aircraft. Approximately 87% of our total operating revenues were derived from passenger fares in 2012. Passenger revenues are based upon our capacity, load factor and the average ticket revenue per booked passenger. Our capacity is measured in terms of ASMs, which represents the number of seats we make available on our aircraft multiplied by the number of miles the seats are flown. Load factor, or the percentage of our capacity that is actually used by paying customers, is calculated by dividing RPMs by ASMs. The average ticket revenue per booked passenger represents the total passenger revenue divided by booked passengers.
 
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Non-ticket Revenue . We derived approximately 13% of our total operating revenues in 2012 from non-ticket revenue. Non-ticket revenue is composed of fees relating to transportation of cargo, charter flight services, excess baggage, advance seat selection, extra legroom, carriage of sports equipment and pets, ticket changes, V-Club subscriptions, the Volaris affinity credit card and onboard advertising. The following table shows each of the line items in our consolidated statements of operations for the periods indicated as a percentage of our total operating revenues for that period:

 	  	For the
Years ended December 31,	 	
 	  	2010	 	 	2011
(Restated)	 	 	2012	 	
Operating revenues:	  				 				 				
Passenger	  	 	93	% 	 	 	91	% 	 	 	87	% 	
Non-ticket	  	 	7	% 	 	 	9	% 	 	 	13	% 	
Total operating revenues	  	 	100	% 	 	 	100	% 	 	 	100	% 	
Other operating income	  	 	0	% 	 	 	(1	%) 	 	 	(1	%) 	
Fuel	  	 	32	% 	 	 	43	% 	 	 	40	% 	
Aircraft rent	  	 	17	% 	 	 	17	% 	 	 	17	% 	
Salaries and benefits	  	 	13	% 	 	 	13	% 	 	 	11	% 	
Landing, take-off and navigation expenses	  	 	13	% 	 	 	14	% 	 	 	14	% 	
Sales, marketing and distribution expenses (1)	  	 	9	% 	 	 	9	% 	 	 	7	% 	
Maintenance expenses	  	 	4	% 	 	 	4	% 	 	 	4	% 	
Other operating expenses	  	 	3	% 	 	 	4	% 	 	 	3	% 	
Depreciation and amortization	  	 	1	% 	 	 	1	% 	 	 	2	% 	
Total operating expenses, net	  	 	92	% 	 	 	104	% 	 	 	97	% 	
Operating income (loss)	  	 	8	% 	 	 	(4	%) 	 	 	3	% 	
Finance income	  	 	0	% 	 	 	0	% 	 	 	0	% 	
Finance cost	  	 	(1	%) 	 	 	(1	%) 	 	 	(1	%) 	
Exchange (loss) gain, net	  	 	(1	%) 	 	 	1	% 	 	 	0	% 	
Other financing income, net	  	 	0	% 	 	 	0	% 	 	 	0	% 	
Income (loss) before income tax	  	 	6	% 	 	 	(4	%) 	 	 	2	% 	
Income tax (expense) benefit	  	 	3	% 	 	 	0	% 	 	 	0	% 	
Net income (loss)	  	 	9	% 	 	 	(4	%) 	 	 	2	% 	

(1)	Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5.1 million. This amount was recognized in sales, marketing and distribution expenses. See note 11 to our financial statements included elsewhere in this prospectus.	
Revenues from our international operations represented 15.1%, 23.6% and 24.4% of our total revenues in 2010, 2011 and 2012, respectively, and revenues from our domestic operations represented 84.9%, 76.4% and 75.6% of our total revenues in 2010, 2011 and 2012, respectively.
Revenue Recognition . Revenues from the air transportation of passengers and commissions from ground transportation services are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel. Ticket sales for future flights are initially recognized as liabilities under the caption unearned transportation revenue and, upon provision of the corresponding transportation service or expiration of the ticket, the earned revenue is credited to operations as revenues and the liability account is reduced by the same amount. All of our tickets are non-refundable, and subject to change upon the payment of a fee. Additionally, we do not operate a frequent flier program. Non-ticket revenue includes fees relating to transportation of cargo, charter flight services, excess baggage, advance seat selection, extra legroom, carriage of sports equipment and pets, ticket changes, V-Club subscriptions, the Volaris affinity credit card and onboard advertising. All such revenues are collected from passengers and recognized as non-ticket revenue when the service has been provided, which is typically the flight date.
 
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We are also required to collect certain taxes and fees from customers on behalf of government agencies and airports and remit these back to the applicable governmental entity or airport on a periodic basis. These taxes and fees include value added tax, federal transportation taxes, federal security charges, airport passenger facility charges, and foreign arrival and departure taxes. These items are collected from customers at the time they purchase their tickets, but are not included in passenger revenue. We record a liability upon collection from the customer and discharge the liability when payments are remitted to the applicable governmental entity or airport.
Operating Expenses, net
Our operating expenses consist of the following line items.
Other Operating Income . Other operating income primarily includes the gains from sale and leaseback operations of our aircraft, engines and components.
Fuel . Fuel expense is our single largest operating expense. It includes the cost of fuel, related taxes, fueling into-plane fees and transportation fees. It also includes realized gains and losses that arise from any fuel price derivative activity qualifying for hedge accounting.
Aircraft Rent . Aircraft rent expense consists of monthly lease rents for our 41 aircraft and five spare engines, as of December 31, 2012, under the terms of the related operating leases and is recognized on a straight line basis. Aircraft rent expense also includes gains and losses related to our interest rate swap contracts that qualify for hedge accounting. Additionally, if we determine that we will probably not recover the guarantee deposits we pay to the lessor as maintenance reserves, we record these amounts as additional aircraft rent (supplemental and contingent rent) from the time we make the determination.
Salaries and Benefits . Salaries and benefits expense includes the salaries, hourly wages, employee health insurance coverage and variable compensation that are provided to employees for their services, as well as the related expenses associated with employee benefit plans and employer payroll taxes.
Landing, Take-off and Navigation Expenses . Landing, take-off and navigation expenses include airport fees, handling charges, and other rents, which are fixed and variable facilities’ expenses, such as the fees charged by airports for the use or lease of airport facilities, as well as costs associated with ground handling services that we outsource at certain airports. This expense also includes route charges, which are the costs of using a country’s or territory’s airspace, and are levied depending on the distance flown over such airspace.
Sales, Marketing and Distribution Expenses . Sales, marketing and distribution expenses consist of advertising and promotional expenses directly related to our services, including the cost of web support, our outsourced call center, travel agent commissions, and credit card discount fees that are associated with the sale of tickets and other products and services.
Maintenance Expenses . Maintenance expenses include all parts, materials, repairs and fees for repairs performed by third-party vendors directly required to maintain our fleet. It excludes the direct labor cost of our own mechanics, which is included under salaries and benefits and includes only routine and ordinary maintenance expenses. Major maintenance expenses are capitalized and subsequently amortized as described in “—Depreciation and Amortization—” below.
Other Operating Expenses . Other operating expenses include (i) administrative support such as travel expenses, stationery, administrative training, monthly rent paid for our headquarters’ facility, professional fees and all other administrative and operational overhead expenses; (ii) premiums and all expenses related to the aviation insurance policy (hull and liability); (iii) costs for technological support, communication systems, cell phones, and internal and operational telephone lines; and (iv) outsourced ground services and the cost of snacks and beverages that we serve on board to our passengers.
 
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Depreciation and Amortization . Depreciation and amortization expense includes the depreciation of all rotable spare parts, furniture and equipment we own and leasehold improvements to flight equipment. It also includes the amortization of major maintenance expenses we defer under the deferral method of accounting for major maintenance events associated with the aging of our fleet and recognize over the shorter period of the next major maintenance event or the remaining lease term, which is on a utilization basis.
A common measure of per unit costs in the airline industry is cost per available seat mile (CASM). The following table shows the breakdown of CASM for the periods indicated:

 	  	For the years ended December 31,	 	
 	  	2010	 	  	2011
(Restated)	 	 	2012	 	 	2012	 	
 	  	(In Ps. cents)	 	 	(In U.S.$ cents) (1)	 	
Other operating income	  	 	0.0	  	  	 	(0.9	) 	 	 	(0.7	) 	 	 	(0.1	) 	
Fuel	  	 	36.7	  	  	 	48.2	  	 	 	51.2	  	 	 	4.1	  	
Aircraft rent	  	 	20.4	  	  	 	19.0	  	 	 	20.4	  	 	 	1.7	  	
Salaries and benefits	  	 	14.6	  	  	 	14.1	  	 	 	14.0	  	 	 	1.1	  	
Landing, take-off and navigation expenses	  	 	14.8	  	  	 	16.1	  	 	 	17.7	  	 	 	1.5	  	
Sales, marketing and distribution expenses (2)	  	 	10.5	  	  	 	9.5	  	 	 	8.1	  	 	 	0.7	  	
Maintenance expenses	  	 	4.7	  	  	 	4.8	  	 	 	5.4	  	 	 	0.4	  	
Other operating expenses	  	 	4.4	  	  	 	4.4	  	 	 	3.9	  	 	 	0.3	  	
Depreciation and amortization	  	 	1.0	  	  	 	1.3	  	 	 	2.3	  	 	 	0.2	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses, net	  	 	107.0	  	  	 	116.5	  	 	 	122.3	  	 	 	9.9	  	

(1)	Peso amounts were converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.12.3546 per U.S.$1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such conversions should not be construed as a representation that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all.	
(2)	Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5.1 million. This amount was recognized in sales, marketing and distribution expenses. See note 11 to our consolidated financial statements included elsewhere in this prospectus.	
Trends and Uncertainties Affecting Our Business
We believe our operating and business performance is driven by various factors that affect airlines and their markets, trends affecting the broader travel industry, and trends affecting the specific markets and customer base that we target. The following key factors may affect our future performance.
Economic Conditions in Mexico. Mexico’s GDP is expected to grow by 3% to 5% per year for the next ten years according to the Mexican Central Bank, which is 1% to 2% above the expected annual growth for the United States during the same period as reported by the U.S. Federal Reserve. Mexico’s projected GDP growth is expected to result in the number of middle-income homes continuing their growth trend, having already grown from 5.1 million in 1992 to 15.8 million in 2008. Regarding population dynamics as of 2010, around 39% of the Mexican population was under 20 years of age, which benefits us by providing a strong base of potential customer growth. Inflation in Mexico during 2012 was 3.57% according to the INEGI. As of December 31, 2012, international reserves were at U.S.$163,592 million.
Competition . The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price, flight schedules, aircraft type, passenger amenities and related services, number of routes served from a city, customer service, safety record and reputation, code-sharing relationships and frequent flier programs and redemption opportunities. Our current and potential competitors include traditional network airlines, low-cost carriers, regional airlines and new entrant airlines. We typically compete in markets served by
 
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legacy carriers and other low-cost carriers, and, to a lesser extent, regional airlines. Some of our current or future competitors may have greater liquidity and access to capital and may serve more routes than we do.
Our principal competitive advantages are our low base fares and our focus on VFR travelers, leisure travelers and cost-conscious business people. These low base fares are facilitated by our low CASM, which at Ps.1.223 (U.S.$0.099) we believe was the lowest CASM in Latin America in 2012, compared to Avianca-TACA at U.S.$0.177, Copa at U.S.$0.111, Gol at U.S.$0.143, Grupo Aeroméxico at U.S.$0.157 and LATAM at U.S.$0.117. We also have lower costs than our publicly traded target market competitors in the United States, including Alaska Air at U.S.$0.131, American at U.S.$0.149, Delta at U.S.$0.150 and United at U.S.$0.149.
Our principal competitors for the domestic market are Grupo Aeroméxico, Interjet and VivaAerobus. Interjet and VivaAerobus are low-cost carriers in Mexico. In December 2012, the Mexican low-cost carriers (including us) combined had 60.3% of the domestic market based on passenger flight segments. We had 23.3% of the domestic market which placed us as second, according to the DGAC.
We also face domestic competition from ground transportation alternatives, primarily long-distance bus companies. There are limited passenger rail services in Mexico. There is a large bus industry in Mexico, with total passenger segments of approximately 2.8 billion in 2012, of which approximately 74.4 million were executive and luxury passenger segments, according to the Mexican Authority of Ground Transportation ( Dirección General de Autotransporte Federal ) and which could include both long- and short-distance travel. We set certain of our promotional fares at prices lower than bus fares for similar routes in order to stimulate demand for air travel among passengers who in the past have traveled long distances primarily by bus. We believe a small shift of bus passengers to air travel would dramatically increase the number of airline passengers and bring the air trips per capita figures in Mexico closer to those of other countries in the Americas.
Our principal competitors for the international routes between Mexico and the United States are Grupo Aeroméxico, Alaska Air, Delta and United. We have grown rapidly in the international market since we started international operations in 2009, reaching 40% market share on the routes that we operate and 8% market share considering all routes between Mexico and the United States in December 2012, according to the DGAC.
Seasonality and Volatility . Our results of operations for any interim period are not necessarily indicative of those for the entire year because our business is subject to seasonal fluctuations. We generally expect demand to be greater during the summer in the northern hemisphere, in December and around Easter, which can fall either in the first or second quarter, compared to the rest of the year. Our business is also volatile and highly affected by economic cycles and trends. Consumer confidence and discretionary spending, fear of terrorism or war, health outbreaks, weakening economic conditions, fare initiatives, fluctuations in fuel prices, labor actions, weather and other factors have resulted in significant fluctuations in our revenues and results of operations in the past. Particularly, in 2008, the demand for air transportation services was significantly adversely affected by both the severe economic recession and the record high fuel prices. We believe, however, that demand for business travel historically has been more sensitive to economic pressures than demand for low-price leisure and VFR travel, which are the primary markets we serve.
Fuel . Fuel costs represent the single largest operating expense for most airlines, including ours. Fuel costs have been subject to wide price fluctuations in recent years and could continue to rise. In 2012, for example, our fuel costs increased 23.7% due to an increase in our operations coupled with an 8.0% increase in average economic fuel cost per gallon. Fuel availability and pricing are also subject to refining capacity, periods of market surplus and shortage, and demand for heating oil, gasoline and other petroleum products, as well as economic, social and political factors and other events occurring throughout the world, which we can neither control nor accurately predict. We source a significant portion of our fuel from refining sources located in Mexico. For the year ended December 31, 2012, we hedged approximately 4.23% of our forecasted fuel requirements using over-the-counter swaps. Our fuel hedging practices are dependent upon many factors, including our assessment of market conditions for fuel, our access to the capital necessary to support margin
 
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requirements under swap agreements and the pricing of hedges and other derivative products in the market. As of December 31, 2012, we had hedged approximately 14.0% and 1.3% of our projected fuel requirements for the first and second quarter of 2013, respectively. As of December 31, 2012, we purchased our domestic fuel under the ASA fuel service contract, and the international fuel under the WFS fuel service contract. The cost and future availability of fuel cannot be predicted with any degree of certainty.
Foreign Exchange Gains and Losses. We receive all of our revenue in pesos and U.S. dollars. U.S. dollar-denominated collections accounted for 33% and 34% of our total collections in 2011 and 2012, respectively, which provides a natural partial hedge against a portion of our U.S. dollar costs. However, the majority of our operating costs are denominated in or indexed to U.S. dollars, constituting 68% and 69% of our total operating costs in 2011 and 2012. Our key U.S. dollar-denominated operating costs include fuel, aircraft rentals, maintenance, and material and repair costs.
We manage our foreign exchange risk exposure by a policy of matching, to the extent possible, receipts and local payments in each individual currency. Most of the surplus funds are converted into U.S. dollars. However, we are exposed to fluctuations in exchange rates between the peso and the U.S. dollar. As a result of the significant depreciation and appreciation of the peso against the U.S. dollar in the last three years, we recorded a foreign exchange (loss)/gain, net of Ps.(56.1) million in 2010, Ps.110.1 million in 2011 and Ps.(95.3) million in 2012.
Maintenance Expenses . We are required to conduct varying levels of aircraft and engine maintenance which involve significantly different labor and materials inputs. Maintenance requirements depend on the age and type of aircraft and the route network over which they operate. Fleet maintenance requirements may involve short cycle engineering checks, for example, component checks, monthly checks, annual airframe checks and periodic major maintenance and engine checks. Aircraft maintenance and repair costs for routine and non-routine maintenance are divided into three general categories:
 
 	(i)	Routine maintenance requirements consist of daily and weekly scheduled maintenance checks on our aircraft, including pre-flight, daily, weekly and overnight checks, diagnostic and routine repairs and any necessary unscheduled tasks performed. These types of line maintenance are currently serviced by our mechanics and are primarily completed at the main airports that we currently serve. All other maintenance activities are sub-contracted to qualified maintenance, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can take from seven to 14 days to accomplish and are required approximately every 22 months. All routine maintenance costs are expensed as incurred.	
 
 	(ii)	Major maintenance consists of a series of more complex tasks that can take from one to eight weeks to accomplish and are generally required approximately every five to six years. Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance and major overhaul and repair is capitalized as improvements to leased assets and amortized over the shorter period of the next major maintenance event or the remaining lease term.	
 
 	(iii)	Engine services are provided pursuant to an engine flight hour agreement that guarantees a cost per overhaul, provides miscellaneous engine coverage, caps the cost of foreign objects damage events, ensures protection from annual escalations and grants an annual credit for scrapped components. We also have a power-by-hour agreement for component services, which guarantees the availability of aircraft parts for our fleet when they are required and provides aircraft parts that are not included in the redelivery conditions of the contract without constituting an additional cost at the time of redelivery. The costs associated with the miscellaneous engine coverage and the component services agreements is recorded in the consolidated statement of operations.	
Due to the young age of our fleet (approximately 4.1 years on average as of December 31, 2012, as reported by the DGAC), maintenance expense in 2011 and 2012 remained relatively low. In December 2010, we recognized our first major maintenance event in the amount of Ps.38.1 million, and for the years ended December 31, 2011 and 2012 we capitalized major maintenance events as part of leasehold improvements to the
 
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flight equipment in the amount of Ps.162.6 million and Ps.129.9 million, respectively. For the years ended December 2010, 2011 and 2012 the amortization of these deferred major maintenance expenses was Ps.1.5 million, Ps.37.5 million and Ps.126.3 million, respectively. The amortization of deferred maintenance expenses is included in depreciation and amortization rather than total maintenance costs as described in “—Critical Accounting Polices and Estimates.” In 2011 and 2012, total maintenance costs amounted to Ps.379.6 million and Ps.498.8 million, respectively. As the fleet ages, we expect that maintenance costs will increase in absolute terms. The amount of total maintenance costs and related amortization of heavy maintenance expense is subject to many variables such as future utilization rates, average stage length, the size and makeup of the fleet in future periods and the level of unscheduled maintenance events and their actual costs. Accordingly, we cannot reliably quantify future maintenance expenses for any significant period of time. However, we estimate that based on our scheduled maintenance events, current maintenance expense and maintenance-related amortization expense will be approximately Ps.809.9 million (U.S.$62.3 million) in 2013.
Maintenance Reserve Obligations . The terms of our aircraft lease agreements require us to pay maintenance reserves, sometimes referred to as supplemental rent, to be paid to the lessor in advance of and as collateral for the performance of major maintenance events, resulting in our recording significant prepaid deposits on our consolidated statements of financial position. As a result, the cash costs of scheduled major maintenance events are paid well in advance of the recognition of the maintenance event in our results of operations. Please see “—Critical Accounting Policies and Estimates—Maintenance Reserves.”
Ramp-up Period for New Routes . In late 2010 and 2011, we took advantage of the opportunity to start operating 15 routes that had been primarily operated by Grupo Mexicana before it ceased operations. This allowed us to, among other things, obtain access to six bi-lateral routes from the Mexico City international airport to the United States that were otherwise unavailable. It also meant additional costs and operational challenges as we had to change certain routes in Mexico City from the Toluca airport to the busier and more complex Mexico City international airport. We launched the new routes on short notice. Since then and after a ramp-up period, we have regularized our performance-related customer service measures and load factor. If Grupo Mexicana were to restart operations, we may be unable to continue operating these new routes. See “Risk Factors—Risks Related to the Airline Industry—Airline consolidations and reorganizations could adversely affect the industry.”
During 2012 we opened 18 new routes and added two more in the first quarter of 2013, eight of which were new routes to the United States that in our experience take more time to mature. As we continue to grow, we would expect to continue to experience a lag between when new routes are put into service and when they reach their full profit potential.
Critical Accounting Policies and Estimates
The following discussion and analysis of our consolidated financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with IFRS. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements. Note 1 to our consolidated financial statements included herein provides a detailed discussion of our significant accounting policies.
Critical accounting policies are defined as those policies that reflect significant judgments or estimates about matters that are both inherently uncertain and material to our financial condition or results of operations.
Maintenance Reserves. Our lease agreements provide that we pay maintenance reserves or supplement rent to aircraft lessors to be held as collateral in advance of our performance of major maintenance activities. Maintenance reserves are held as collateral in cash. These lease agreements provide that maintenance reserves are reimbursable to us upon completion of the maintenance event in an amount equal to the lesser of (i) the
 
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amount of the maintenance reserve held by the lessor associated with the specific maintenance event or (ii) the qualifying costs related to the specific maintenance event. Substantially all of these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles, and are used solely to collateralize the lessor for maintenance time run off the aircraft until the completion of the maintenance of the aircraft. We paid Ps.275.3 million, Ps.674.0 million and Ps.349.2 million in maintenance reserves, net of reimbursements, to our lessors for the years ended December 31, 2010, 2011 and 2012, respectively.
At lease inception and at each consolidated statement of financial position date, we assess whether the maintenance reserve payments required by the lease agreements are substantively and contractually related to the maintenance of the leased asset. Maintenance reserve payments that are substantively and contractually related to the maintenance of the leased asset are accounted for as maintenance deposits. Maintenance deposits expected to be recovered from lessors are reflected as guarantee deposits in the accompanying consolidated statement of financial position.
The portion of prepaid maintenance deposits that are deemed unlikely to be recovered, primarily relate to the rate of differential between the maintenance reserve payments and the expected cost for the next related maintenance event that the reserves serve to collateralize is recognized as supplemental rent. Thus, any excess of the required deposit over the expected cost of the major maintenance event is recognized as supplemental rent starting from the period the determination is made. When it is not probable that we will recover amounts currently on deposit with a lessor, such amounts are expensed as supplemental rent. We expensed Ps.38.7 million in 2010, Ps.36.7 million in 2011 and Ps.27.2 million in 2012 of maintenance reserve payments as supplemental rent.
As of December 31, 2010, 2011 and 2012, we had prepaid maintenance deposits of Ps.1,039.7 million, Ps.1,713.7 million and Ps. 2,063.0 million, respectively, on our consolidated statement of financial position. We have concluded that these prepaid maintenance deposits are likely to be recovered primarily due to the rate differential between the maintenance reserve payments and the expected cost for the related next maintenance event that the reserves serve to collateralize.
Our lease agreements also provide that most maintenance reserves held by the lessor at the expiration of the lease are nonrefundable to us and will be retained by the lessor. Consequently, we have determined that any usage-based maintenance reserve payments after the last major maintenance event are not substantively related to the maintenance of the leased asset and therefore are accounted for as contingent rent. We accrue contingent rent beginning when it becomes probable and reasonably estimable we will incur such nonrefundable maintenance reserve payments. Maintenance reserves held by lessors that are refundable to us at the expiration of the lease are accounted for as prepaid maintenance deposits on the consolidated statement of financial position when they are paid. For the years ended December 31, 2010, 2011 and 2012, we expensed as contingent rent Ps.59.9 million, Ps.94.6 million and Ps.99.4 million, respectively.
During the year ended December 31, 2011, we extended the lease terms of six aircraft lease agreements, which made available to us maintenance deposits that were recognized in prior periods in the consolidated statement of operations as supplemental rent of Ps.163.0 million. This lease extension was recognized as a guarantee deposit and a deferred liability in the consolidated statement of financial position in the caption “other liabilities” and is being amortized on a straight line basis prospectively over the next six years (the remaining revised leased term at December 31, 2012). For the years ended December 31, 2011 and 2012, we amortized Ps.10.4 million and Ps.23.3 million, respectively, and these amounts were recognized as a reduction of rent expense in the consolidated statement of operations.
Aircraft Maintenance . We account for major maintenance under the deferral method. Under the deferral method, the cost of major maintenance is capitalized (leasehold improvements) and amortized as a component of depreciation and amortization expense until the next major maintenance event or during the remaining contractual lease term, whichever occurs first. The next major maintenance event is estimated based on assumptions including estimated usage maintenance intervals mandated by the FAA in the United States and the DGAC in Mexico and
 
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average removal times suggested by the manufacturer. These assumptions may change based on changes in the utilization of aircraft, changes in government regulations and changes in suggested manufacturer maintenance intervals. In addition, these assumptions can be affected by unplanned incidents that could damage an airframe, engine, or major component to a level that would require a major maintenance event prior to a scheduled maintenance event. To the extent the planned usage increases, the estimated useful life would decrease before the next maintenance event, resulting in additional amortization expense over a shorter period.
In December 2010, we performed our first major maintenance event at a cost of Ps.38.1 million, of which Ps.1.5 million was amortized in the same year. In 2011 and 2012, we capitalized costs of major maintenance events of Ps.162.6 million and Ps.129.9 million and recognized amortization expenses, of which Ps.37.5 million and Ps.126.3 million were amortized, respectively. The amortization of deferred maintenance expenses is included under the caption depreciation and amortization expense in our consolidated statement of operations. If the amortization of major maintenance expenditures were classified as maintenance expense, they would amount to Ps.277.7 million, Ps.417.1 million and Ps.625.1 million for the years ended December 31, 2010, 2011 and 2012, respectively.
Gains and Losses on Sale and Leaseback . For aircraft acquired through a sale and leaseback transaction, any profit or loss is accounted for as follows: (i) profit or loss is recognized immediately when it is clear that the transaction is established at fair value; (ii) if the sale price is below fair value, any profit or loss is recognized immediately; however, if the loss is compensated for by future lease payments at below market price, such loss is recognized as an asset on the consolidated statements of financial position and loss recognition is deferred and amortized to the consolidated statements of operations in proportion to the lease payments over the contractual lease term; and (iii) if the sale price is above fair value, the excess is deferred and amortized to the consolidated statements of operations over the asset’s expected lease term, including probable renewals, with the amortization recorded as a reduction of rent expense.
During the year ended December 31, 2011 and 2012, we sold and transferred aircraft and engines to third parties, giving rise to a gain of approximately Ps.72.8 million and Ps.61.3 million, respectively, that was recorded under other operating income in the consolidated statement of operations. During the year ended December 31, 2010, we did not sell or transfer aircraft or engines to third parties. In addition, during the year ended December 31, 2011, we entered into a sale and leaseback transaction, resulting in a loss of approximately Ps.30.7 million on the sale. This loss was recorded in the consolidated statements of financial position as an asset and is being amortized as a portion of the aircraft rent over the contractual lease term. During 2011 and 2012, the current portion of Ps.3.0 million was recorded as prepaid expenses and other current assets, and the non-current portion of Ps.26.6 million and Ps.23.6 million were recorded as other assets, respectively.
During 2011 and 2012, we amortized Ps.1.0 million and Ps.3.0 million, respectively. After the sale, the aircraft and engines were leased back under operating lease agreements.
Furthermore, in August 2012, we entered into a total support agreement with Lufthansa Technik AG for a six-year term, which includes a total component support agreement (power-by-hour) and ensures the availability of aircraft components for our fleet when they are required. The cost of the total component support agreement is applied monthly to the results of operations. Additionally, this transaction includes a sale and leaseback agreement for certain components. As part of this total support agreement, we received credit notes of Ps.46.5 million, which was deferred on the consolidated statement of financial position and is being amortized on a straight line basis, prospectively during the term of the agreement. As of December 31, 2012, we amortized Ps.3.5 million, received Ps.25.3 million and recorded an accounts receivable of Ps.21.2 million for the unused portion of the credit notes which will be applied against future payments due under the total support agreement.
Equity-settled Transactions . Equity-settled transactions are measured at fair value at the date the equity benefits are conditionally granted to employees.
 
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The management incentive plan has been classified as an equity-settled transaction because as of the grant date the fair value of the transaction is fixed and is not adjusted by subsequent changes in the fair value of capital instruments.
During 2012, we did not recognize any compensation expense associated with the management incentive plan in our consolidated statement of operations. Once the equity benefits are conferred, we will recognize the cost using the accelerated method between the consummation of the condition for exercise and such determination. In April 2012, when the board of directors authorized the incentive plan for the benefit of certain key employees, the Company obtained a contemporaneous valuation by an independent valuation specialist that used the binomial model published by Hull & White. The Company expected to make the grants at the time, however, the regulatory approvals necessary to reorganize the Company (to permit foreign investment to be deemed as neutral and exceed regulatory limits) that was a necessary precondition to the actual grant took eight months as the reorganization had to be approved by a number of governmental agencies in Mexico, including the Foreign Investment Bureau of the Ministry of Economy. The necessary approvals did not come until December 2012 and therefore the actual grant date was December 24, 2012. In connection with the actual grant, the Company updated the valuation using the methodology that was approved in April 2012. The December 2012 valuation was prepared by management using the same binomial model.
The Company determined, at the grant date, that the fair value of the awards issued under the management incentive plan was Ps.2.7 million. This amount will be expensed over the vesting period, which will start when the related condition for exercise has been or is likely to be met (i.e., consummation of the global offering or a change of control), until December 31, 2015. Under the methodology utilized by the Company, as of December 31, 2012 the fair value of the common stock did not represent a material change in the intrinsic value of the granted shares.
The factors considered in the valuation model included a volatility estimated with historical returns on common stock of comparable companies and other inputs obtained from independent and observable sources, such as Bloomberg. The share spot price fair value was determined using the market approach valuation methodology, with the following assumptions:

 	  	2012	 	
Dividend yield (%)	  	 	0.00	% 	
Volatility (%)	  	 	37.00	% 	
Risk–free interest rate (%)	  	 	5.96	% 	
Expected life of share options (years)	  	 	8.80	  	
Exercise share price (in Mexican pesos Ps.)	  	 	5.31	  	
Exercise multiple	  	 	1.10	  	
Fair value of the stock at grant date	  	 	1.73	  	
The dividend yield was set at zero because at the time the management incentive plan was valued and as of the date of this prospectus, the Company does not have any plans to pay a dividend.
The volatility was determined based on average historical volatilities. Such volatilities were calculated according to a database including up to 18 months of historical stock price returns of U.S. and Latin American publicly traded airlines. The expected volatility reflects the assumption that the historical volatility of comparable companies is indicative of future trends, which may not necessarily be the actual outcome.
The risk-free interest rate is the interbank interest rate in Mexico, continuously expressed, accordingly to the corresponding term.
The expected life of the share options is an output of the valuation model, and represents the average time the option is expected to remain viable, assuming the employee does not leave during the vesting period.
 
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The management incentive plan explicitly incorporates the employee’s early exercise policy by assuming that early exercise happens when the stock price is a certain multiple, M , of the exercise price. The exercise multiple M , of 1.1 incorporates the assumption of the employee’s exercise of the options can occur when the share prices are 1.1 times the exercise price, i.e. 10% above the exercise price.
Movements during the year
The following table illustrates the number of shares options and fixed exercise prices during the year:

 	  	Number	 	  	Exercise price
in Mexican pesos	 	
Outstanding as of December 31, 2011	  	 	—	  	  	 	Ps.—	  	
Granted during the year	  	 	25,164,126	  	  	 	5.31	  	
Forfeited during the year	  	 	—	  	  	 	—	  	
Exercised during the year	  	 	—	  	  	 	—	  	
Outstanding as of December 31, 2012	  	 	25,164,126	  	  	 	Ps.5.31	  	
We believe that there are several factors that have occurred since April 2012 (the date the plan was approved by our board of directors) and December 2012 (when all of the governmental approvals were in place) which will lead to the large estimated increase in the initial public offering price compared to fair value of the shares at the grant date. These factors include: (i) a significant change in our business model, as the we began implementing its unbundled pricing launched during the middle of 2012; (ii) the stabilization of our new routes to the United States and within Mexico that are expected to contribute to better performance in 2013; (iii) first quarter 2013 performance, that reflected significantly higher operating income due to a turnaround in performance; (iv) dramatic improvement in the stock prices of airline securities after April 2012 and even more dramatic increases in the price of the stock of ULCC since December 2012 (for example, a 74.5% increase for Spirit); (v) improvements in the performance of the airline sector overall (the Dow Jones U.S. Airlines Index is up 66.2% since April 2012 and 37.8% since December 2012); (vi) the broader stock market is up significantly in 2013 (as of the date hereof, the S&P 500 Index is up 16.5% since April 2012 and 15.0% since December 2012 and the Mexican BMV Consumer Discretionary & Services (Sector) Index is up 40.5% and 22.9%, since April 2012 and December 2012, respectively); (vii) improvements in the Mexican economy and significant changes in perception after the recent federal election and new government taking office, mostly exhibited since January 2013 when new reforms began to be put in place; and (viii) the public offering will lead to liquidity for options and remove illiquidity discount from the valuation.
Fair Value of Financial Instruments . Where the fair value of financial assets and financial liabilities recorded in our consolidated statement of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Derivative Financial Instruments and Hedge Accounting . We mitigate certain financial risks, such as volatility in the price of aircraft fuel, adverse changes in interest rates and exchange rate fluctuations, through a controlled risk management program that includes the use of derivative financial instruments. The derivative financial instruments are recognized in the consolidated statement of financial position at fair value. The effective portion of a cash flow hedge’s unrecognized gain or loss is recognized in “Accumulated other comprehensive income (loss) items,” while the ineffective portion is recognized in current year earnings. The realized gain or loss of derivative financial instruments that qualify as hedging is recorded in the same statements of operations as the realized gain or loss of the hedged item. Derivative financial instruments that are not designated as or not effective as a hedge are recognized at fair value with changes in fair value recorded in current year earnings. Outstanding derivative
 
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financial instruments may require collateral to guarantee a portion of the unsettled loss prior to maturity. The amount of collateral delivered in guarantee, which is presented as part of “Guarantee deposits,” is reviewed and adjusted on a daily basis, based on the fair value of the derivative position.
 
 	(i) 	Aircraft Fuel Price Risk. We account for derivative financial instruments at fair value and recognize them in the consolidated statement of financial position as an asset or liability. The cost of aircraft fuel consumed in 2010, 2011 and 2012 represented 34%, 41% and 42% of our operating expenses, respectively. To manage aircraft fuel price risk, we periodically enter into derivatives financial instruments. During 2010, 2011 and 2012, we entered into aircraft fuel swap hedges that gave rise to a gain of Ps.1.1 million, Ps.9.3 million and Ps.19.9 million, respectively. Since these instruments qualify as accounting hedges, the cost and related gains or losses are considered a portion of the fuel cost in the consolidated statement of operations. As of December 31, 2010, 2011 and 2012, the fair value of these instruments was Ps.7.3 million, Ps.0.9 million and Ps.2.4 million, respectively.	
 
 	(ii) 	Foreign Currency Risk. Foreign currency risk is the risk that the fair value of future cash flows will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities (when revenue or expense is denominated in a different currency than pesos). Exchange exposure relates to amounts payable arising from U.S. dollar-denominated and U.S. dollar-linked expenses and payments. To mitigate this risk in 2010 and 2011, we use foreign exchange derivative financial instruments.	
In 2010 and 2011, the exchange rate hedges resulted in a loss of Ps.0.4 million and Ps.1.1 million, respectively that was recorded as a portion of the financial expense. All of our positions matured in January 2011, so accordingly there was no fair value as of December 31, 2011. During the year ended December 31, 2012, we did not enter into exchange rate derivatives financial instruments.
Our foreign exchange exposure as of December 31, 2010, 2011 and 2012 was a net asset position of U.S.$134.9 million, U.S.$169.7 million and U.S.$208.2 million, respectively.
 
 	(iii) 	Interest Rate Risk. Interest rate risk is the risk that the fair value of future cash flows will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our long-term debt and lease obligations with floating interest rates. As of December 31, 2010, 2011 and 2012, we had outstanding hedging contracts in the form of interest rate swaps with fair value of Ps.99.2 million, Ps.162.8 million and Ps.147.7 million, respectively. These instruments are included as liabilities in our consolidated statement of financial position. In 2010, 2011 and 2012, the reported loss on the instruments was Ps.36.4 million, Ps.35.9 million and Ps.36.6 million, respectively, which was recognized as a portion of the rental expense in the consolidated statements of operations.	
The table below presents the payments required by our financial liabilities:

 	  	Year ended December 31, 2012	 	
 	  	Within one
Year	 	 	One to five
Years	 	  	In five Years
or more	 	  	Total	 	
 	  	(In thousands of pesos)	 	
Interest-bearing borrowings	  				 				  				  				
Pre-delivery payment facilities	  	 	517,320	  	 	 	242,053	  	  	 	—  	 	  	 	759,373	  	
Working capital	  	 	—  	 	 	 	390,487	  	  	 	—  	 	  	 	390,487	  	
Derivative financial instruments	  				 				  				  				
Fuel swaps	  	 	(2,360	) 	 	 	—  	 	  	 	—  	 	  	 	(2,360	) 	
Interest rate swaps	  	 	37,011	  	 	 	110,702	  	  	 	—  	 	  	 	147,713	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	551,971	  	 	 	743,242	  	  	 	—  	 	  	 	1,295,213	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Income Taxes . We account for income taxes using the liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss
 
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and credit carry-forwards. In assessing our ability to realize deferred tax assets, our management considers whether it is more likely than not that some or all of the deferred tax assets will be realized. In evaluating our ability to utilize our deferred tax assets, we consider all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. At December 31, 2010, 2011 and 2012, we had tax loss carry-forwards amounting to Ps.1,456.6 million, Ps.2,200.0 million and Ps.2,014.9 million, respectively. These losses relate to our and our subsidiaries’ operations on a stand-alone basis, which in conformity with current Mexican Income Tax Law may be carried forward against taxable income generated in the succeeding ten years and may not be used to offset taxable income elsewhere in our consolidated group. During the years ended December 31, 2010, 2011 and 2012, we used tax-loss carry-forwards of Ps.156.9 million, Ps.0.8 million and Ps.256.6 million, respectively.
Impairment of Long-Lived Assets . The carrying value of rotable spare parts, furniture and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable and the cumulative impairment losses are shown as a reduction in the carrying value of rotable spare parts, furniture and equipment.
We record impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value in use.
The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.
For the years ended December 31, 2010, 2011 and 2012, there were no indications of impairment and therefore no impairment charges were recorded in respect of our long-lived assets.
Doubtful Accounts. An allowance for doubtful receivables is established when there is objective evidence that we will not be able to collect all amounts due according to the original terms of the receivables. For the years ended December 31, 2010, 2011 and 2012, the allowance for doubtful accounts was Ps.16.0 million, Ps.21.3 million and Ps.21.7 million.
RESULTS OF OPERATIONS
Operating Revenues
First quarter 2012 compared to first quarter 2013

 	  	For the three months ended March 31,	 	
 	  	2012	 	 	2013	 	 	Variation	 	
 	  	(In thousands of pesos, except for % and operating data)	 	
Operating Revenues	  				 				 				  				
Passenger	  	 	2,099,908	  	 	 	2,587,535	  	 	 	487,627	  	  	 	23.2	% 	
Non-ticket	  	 	312,241	  	 	 	474,052	  	 	 	161,811	  	  	 	51.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Total operating revenues	  	 	2,412,149	  	 	 	3,061,587	  	 	 	649,438	  	  	 	26.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Operating Data	  				 				 				  				
Capacity (in ASMs in thousands)	  	 	2,100,551	  	 	 	2,474,978	  	 	 	374,427	  	  	 	17.8	% 	
Load factor	  	 	81	% 	 	 	81	% 	 	 	—  	  	  	 	(0.3	%) 	
Average ticket revenue per booked passenger	  	 	1,312	  	 	 	1,320	  	 	 	8	  	  	 	0.6	% 	
Average non-ticket revenue per booked passenger	  	 	195	  	 	 	242	  	 	 	47	  	  	 	24.0	% 	
Revenue passenger miles (RPMs in thousands)	  	 	1,702,655	  	 	 	2,000,245	  	 	 	297,590	  	  	 	17.5	% 	
Passenger Revenue . The 23.2% increase in passenger revenue for the three months ended March 31, 2013 compared to the same period in 2012 was primarily due to a 17.8% growth in ASM capacity resulting from the
 
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incorporation of eight new aircraft and the 0.6% increase in average ticket revenue per booked passenger. Our traffic as measured in terms of RPMs increased 17.5% for the three months ended March 31, 2013 also resulting from the incorporation of the new aircraft.
Non-ticket Revenue . The 51.8% increase in non-ticket revenue for the three months ended March 31, 2013 compared to the same period in 2012 was primarily driven by a 22.5% increase in booked passengers, which resulted in more passengers purchasing non-ticket items, and a 24.0% increase in average non-ticket revenue per passenger. Such increases were primarily the result of an increase in extra baggage, distribution channels and pre-seat selection fees. In addition, our V-Club subscription service added approximately 7,924 new members for a total of 43,124 members as of March 31, 2013.
2011 compared to 2012

 	  	For the years ended December 31,	 	
 	  	2011	 	 	2012	 	 	Variation	 	
 	  	(In thousands of pesos, except for % and operating data)	 	
Operating Revenues	  				 				 				 				
Passenger	  	 	8,036,275	  	 	 	10,176,747	  	 	 	2,140,472	  	 	 	26.6	% 	
Non-ticket	  	 	842,341	  	 	 	1,509,668	  	 	 	667,327	  	 	 	79.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating revenues	  	 	8,878,616	  	 	 	11,686,415	  	 	 	2,807,799	  	 	 	31.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Operating Data	  				 				 				 				
Capacity (in ASMs in thousands)	  	 	7,939,365	  	 	 	9,244,425	  	 	 	1,305,060	  	 	 	16.4	% 	
Load factor	  	 	79	% 	 	 	83	% 	 	 	4	% 	 	 	4.7	% 	
Average ticket revenue per booked passenger	  	 	1,354	  	 	 	1,374	  	 	 	20	  	 	 	1.4	% 	
Average non-ticket revenue per booked passenger	  	 	142	  	 	 	204	  	 	 	62	  	 	 	43.6	% 	
Revenue passenger miles (RPMs in thousands)	  	 	6,290,707	  	 	 	7,668,202	  	 	 	1,377,495	  	 	 	21.9	% 	
Passenger Revenue . The 26.6% increase in passenger revenue in 2012 was primarily due to a 16.4% growth in ASM capacity resulting from the incorporation of seven new aircraft. We also benefited from a 4.7% increase in the load factor, mainly as the result of our stimulation of demand and an increase of 1.4% in average ticket revenue per passenger. Our traffic as measured in terms of RPMs increased by 21.9% in 2012 also resulting from the incorporation of seven new aircraft.
Non-ticket Revenue . The 79.2% increase in non-ticket revenue in 2012 was primarily driven by a 24.8% increase in booked passengers, which resulted in more passengers purchasing non-ticket items, and a 43.6% increase in average non-ticket revenue per passenger. Such increases were mainly the result of launching unbundled fares in the second quarter of 2012 in order to lower base fares to increase the load factor, as well as increasing fees for baggage, premium distribution channels and seat selection. In addition, we started a membership based ultra-low-fare subscription service called V-Club which has attracted approximately 35,200 members as of December 31, 2012.
 
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2010 compared to 2011

 	  	For the years ended December 31,	 	
 	  	2010	 	 	2011
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for % and operating
data)	 	
Operating Revenues	  				 				 				 				
Passenger	  	 	6,278,469	  	 	 	8,036,275	  	 	 	1,757,806	  	 	 	28.0	% 	
Non-ticket	  	 	498,921	  	 	 	842,341	  	 	 	343,420	  	 	 	68.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating revenues	  	 	6,777,390	  	 	 	8,878,616	  	 	 	2,101,226	  	 	 	31.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Operating Data	  				 				 				 				
Capacity (in ASMs in thousands)	  	 	5,853,823	  	 	 	7,939,365	  	 	 	2,085,542	  	 	 	35.6	% 	
Load factor	  	 	79	% 	 	 	79	% 	 	 	0	% 	 	 	0.2	% 	
Average ticket revenue per booked passenger	  	 	1,422	  	 	 	1,354	  	 	 	(68	) 	 	 	(4.7	%) 	
Average non-ticket revenue per booked passenger	  	 	113	  	 	 	142	  	 	 	29	  	 	 	25.7	% 	
Revenue passenger miles (RPMs in thousands)	  	 	4,628,014	  	 	 	6,290,707	  	 	 	1,662,693	  	 	 	35.9	% 	
Passenger Revenue . The 28.0% increase in passenger revenue in 2011 was primarily due to a growth in capacity, with a 35.6% increase in ASMs, as a result of the incorporation of eight new aircraft. However, the increase in passenger revenue was partially offset due to a reduction in our average ticket revenue per booked passenger by 4.7% in order to stimulate additional demand on the 15 new routes that we started operating in late 2010 and in the beginning of 2011.
Non-ticket Revenue . The 68.8% increase in non-ticket revenue in 2011 was primarily due to an increase in passengers paying for ancillary services, higher cargo revenue and higher fees charged for ancillary services, such as excess baggage, commissions on third-party insurance and other services.
Operating Expenses, net
First quarter 2012 compared to first quarter 2013

 	  	For the three months ended March 31,	 	
 	  	2012	 	 	2013
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Other operating income	  	 	(19,413	) 	 	 	(24,240	) 	 	 	(4,827	) 	 	 	24.9	% 	
Fuel	  	 	1,088,405	  	 	 	1,198,628	  	 	 	110,223	  	 	 	10.1	% 	
Aircraft rent	  	 	445,508	  	 	 	514,297	  	 	 	68,789	  	 	 	15.4	% 	
Salaries and benefits	  	 	296,836	  	 	 	362,840	  	 	 	66,004	  	 	 	22.2	% 	
Landing, take-off and navigation expenses	  	 	370,961	  	 	 	460,772	  	 	 	89,811	  	 	 	24.2	% 	
Sales, marketing and distribution expenses	  	 	162,739	  	 	 	186,573	  	 	 	23,834	  	 	 	14.6	% 	
Maintenance expenses	  	 	116,242	  	 	 	141,268	  	 	 	25,026	  	 	 	21.5	% 	
Other operating expenses	  	 	74,981	  	 	 	102,227	  	 	 	27,246	  	 	 	36.3	% 	
Depreciation and amortization	  	 	41,678	  	 	 	81,245	  	 	 	39,567	  	 	 	94.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating expenses, net	  	 	2,577,937	  	 	 	3,023,610	  	 	 	445,673	  	 	 	17.3	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating expenses net, increased by 17.3% for the three months ended March 31, 2013 compared to the same period in 2012, primarily as a result of the growth of our operations and the other factors described below.
Other Operating Income . Other operating income increased by Ps.4.8 million for the three months ended March 31, 2013 compared to the same period in 2012, primarily because of higher gains from sale and leaseback transactions.
 
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Fuel . Fuel expense increased 10.1% in the three months ended March 31, 2013 compared to the same period in 2012 as a result of a 15.5% increase in fuel gallons consumed and an increase in our capacity and operations. This increase was partially offset by a 4.7% decrease in the average economic fuel cost per gallon.
Aircraft Rent . Aircraft rent increased 15.4% for the three months ended March 31, 2013 compared to the same period in 2012 mainly due to an increase of Ps.86.2 million in rent expenses relating to eight new Airbus A320 aircraft received after March 31, 2012. This increase was partially offset by a decrease in rent in peso terms due to a 2.8% appreciation of the peso against the U.S. dollar and a Ps.5.8 million amortization benefit resulting from the extension of the terms of six aircraft lease agreements renegotiated during 2011.
Salaries and Benefits . The 22.2% increase in salaries and benefits for the three months ended March 31, 2013 compared to the same period in 2012 was primarily the result of growing our operations by 19.9% (measured in departures), which required an 8.5% increase in our total employees, as we increased our fleet size by 22.9% via the addition of eight aircraft from April 1, 2012 to March 31, 2013. The increase in labor costs for the three months ended March 31, 2013 was also driven by higher bonuses connected to increased operations and improved financial results compared to the same period in 2012.
Landing, Take-off and Navigation Expenses . The 24.2% increase in landing, take-off and navigation expenses for the three months ended March 31, 2013 compared to the same period in 2012 was primarily due to a 25.8% increase in the number of airports served. In addition, our booked passengers increased 22.5%.
Sales, Marketing and Distribution Expenses . Sales, marketing and distribution expenses increased 14.6% for the three months ended March 31, 2013 primarily due to a significant increase in sales, which led to higher distribution costs.
Maintenance Expenses . The 21.5% increase in maintenance expenses for the three months ended March 31, 2013 compared to the same period in 2012 was the result of a 22.9% increase in the size of our fleet. Additionally, the maintenance expenses increased as a result of the timing of scheduled maintenance events and the aging of our fleet. As the fleet ages, we expect that maintenance costs and related out of service time to complete the maintenance will increase.
Other Operating Expenses . Other operating expenses increased 36.3% in the three months ended March 31, 2013 compared to the same period in 2012 primarily as a result of:
 
 	•	 	additional administrative support due to the expansion in our flight operations and employees, and a rise in miscellaneous administrative expenses, such as consulting and legal fees;	
 
 	•	 	additional technical and communications support required due to the growth of our operations; and	
 
 	•	 	servicing more passengers on board and the expansion of our international routes.	
Depreciation and Amortization . Depreciation and amortization increased 94.9% in the three months ended March 31, 2013 compared to the same period in 2012. This increase was primarily due to the amortization of major maintenance events associated with the aging of our fleet by Ps.36.7 million, which was accounted for using the deferral method.
 
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2011 compared to 2012

 	  	For the years ended December 31,	 	
 	  	2011
(Restated)	 	 	2012	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Other operating income	  	 	(73,831	) 	 	 	(68,800	) 	 	 	5,031	  	 	 	(6.8	%) 	
Fuel	  	 	3,823,232	  	 	 	4,730,089	  	 	 	906,857	  	 	 	23.7	% 	
Aircraft rent	  	 	1,508,135	  	 	 	1,885,696	  	 	 	377,561	  	 	 	25.0	% 	
Salaries and benefits	  	 	1,120,359	  	 	 	1,302,971	  	 	 	182,612	  	 	 	16.3	% 	
Landing, take-off and navigation expenses	  	 	1,281,583	  	 	 	1,639,945	  	 	 	358,362	  	 	 	28.0	% 	
Sales, marketing and distribution expenses	  	 	750,474	  	 	 	751,919	  	 	 	1,445	  	 	 	0.2	% 	
Maintenance expenses	  	 	379,626	  	 	 	498,836	  	 	 	119,210	  	 	 	31.4	% 	
Other operating expenses	  	 	359,046	  	 	 	356,517	  	 	 	(2,529	) 	 	 	(1.0	%) 	
Depreciation and amortization	  	 	102,977	  	 	 	211,002	  	 	 	108,025	  	 	 	104.9	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating expenses, net	  	 	9,251,601	  	 	 	11,308,175	  	 	 	2,056,574	  	 	 	22.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating expenses, net increased by 22.2% in 2012 primarily as a result of the growth of our operations and higher fuel costs and the other factors described below.
Other Operating Income . Other operating income decreased by Ps.5.0 million, or 6.8%, in 2012 primarily because of lower gains from sale and leaseback transactions.
Fuel . Fuel expense increased 23.7% in 2012 as a result of an increase in average economic fuel cost per gallon of 8% and an increase in fuel gallons consumed of 14.6%, which in turn was due to an increase in capacity and operations.
Aircraft Rent. Aircraft rent increased 25% mainly because of: (i) a Ps.127.2 million increase in rent expenses relating to seven new Airbus A320 aircraft received in 2012, and (ii) a Ps.238.7 million increase relating to the eight new aircraft received in late 2011 which were financed via operating leases. In addition, aircraft rent in peso terms also increased because of the depreciation of approximately 5.9% of the average exchange rate of the peso against the U.S. dollar. This increase was partially offset by Ps.23.2 million in 2012 corresponding to the amortization of the benefit of the lease term extension of six aircraft lease agreements renegotiated during 2011 which allowed us to recognize maintenance deposits from prior periods in the amount of Ps.163.0 million as lease extension benefit.
Salaries and Benefits . The 16.3% increase in salaries and benefits in 2012 was primarily the result of growing our operations by 14.7% (measured in departures), which required a 9.0% increase in our total employees, as we increased our fleet size by 20.6% via the addition of seven aircraft in 2012. The increase in labor costs was also driven by the increase in crew labor rates by approximately 4.2% during 2012 due to the renegotiation of our collective bargaining agreements and the fact that we achieved the financial result required for the payments of higher bonuses, which we did not do in 2011.
Landing, Take-off and Navigation Expenses. The 28.0% increase in landing, take-off and navigation expenses in 2012 was primarily due to a 19.4% increase in airports served. In addition, our booked passengers increased by 24.8%.
Maintenance Expenses . The 31.4% increase in maintenance expenses in 2012 was the result of a 20.6% increase in the size of our fleet due to the addition seven new aircraft in 2012. The maintenance expenses increased as a result of the timing of scheduled maintenance events and the aging of our fleet. As the fleet ages, we expect that maintenance costs and related out-of-service time to complete the maintenance will increase.
 
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Other Operating Expenses . Other operating expenses decreased 1.0%. This was due to the fact that in 2012 we did not record any additional transaction costs related to a suspended equity transaction, compared to 2011. The decrease in the operating expenses was partially offset by:
 
 	•	 	additional administrative expenses related to the expansion in our flight operations and employees, and a rise in miscellaneous administrative expenses, such as travel costs and consulting and legal fees;	
 
 	•	 	required additional technical and communications support due to the growth of our operations; and	
 
 	•	 	servicing more passengers on board and the expansion of our international routes.	
Depreciation and Amortization . Depreciation and amortization increased 104.9% in 2012 primarily due to the amortization of major maintenance events associated with the aging of our fleet under the deferral method, which increased by Ps.88.8 million from 2011 to 2012.
2010 compared to 2011

 	  	For the years ended December 31,	 	
 	  	2010	 	 	2011
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Other operating income	  	 	(158	) 	 	 	(73,831	) 	 	 	(73,673	) 	 	 	100	% 	
Fuel	  	 	2,146,011	  	 	 	3,823,232	  	 	 	1,677,221	  	 	 	78.2	% 	
Aircraft rent	  	 	1,197,022	  	 	 	1,508,135	  	 	 	311,113	  	 	 	26.0	% 	
Salaries and benefits	  	 	852,123	  	 	 	1,120,359	  	 	 	268,236	  	 	 	31.5	% 	
Landing, take-off and navigation expenses	  	 	867,690	  	 	 	1,281,583	  	 	 	413,893	  	 	 	47.7	% 	
Sales, marketing and distribution expenses (1)	  	 	615,431	  	 	 	750,474	  	 	 	135,043	  	 	 	21.9	% 	
Maintenance expenses	  	 	276,128	  	 	 	379,626	  	 	 	103,498	  	 	 	37.5	% 	
Other operating expenses	  	 	255,413	  	 	 	359,046	  	 	 	103,633	  	 	 	40.6	% 	
Depreciation and amortization	  	 	56,572	  	 	 	102,977	  	 	 	46,405	  	 	 	82.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total operating expenses, net	  	 	6,266,232	  	 	 	9,251,601	  	 	 	2,985,369	  	 	 	47.6	% 	

(1)	Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5.1 million. This amount was recognized in sales, marketing and distribution expenses. See note 11 to our consolidated financial statements included elsewhere in this prospectus.	
Total operating expenses, net increased by 47.6% in 2011 primarily as a result of the growth of our operations and higher fuel costs and the other factors described below.
Other Operating Income . Other operating income increased by Ps.73.7 million, or 100%, in 2011 as we did not enter into aircraft sale and leaseback transactions during 2010.
Fuel . Fuel expense increased 78.2% in 2011 as a result of an increase in average economic fuel cost per gallon by 34.7%, and an increase in fuel consumption by 32.3% as a result of the incorporation of eight new aircrafts, which in turn was due to an increase in capacity and operations.
Aircraft Rent . Aircraft rent increased 26% in 2011 mainly as a result of a Ps.172.6 million increase in rent expenses relating to eight new Airbus A320 aircraft received in 2011 as well as a Ps.155.4 million increase corresponding to five new aircraft received in late 2010 which were financed via operating leases. We also expensed higher contingent and supplemental rent by Ps.43.2 million in 2011, accounting for the portion of aircraft maintenance deposits paid to lessors that were not deemed reimbursable during the period in accordance with our accounting policies. This increase was partially offset by Ps.10.4 million corresponding to the amortization benefit of the lease term extension of six aircraft lease agreements renegotiated during 2011, which made available maintenance deposits of Ps.163.0 million that were recognized in prior periods as lease extension
 
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benefit. This lease incentive has been deferred and amortized on a straight line basis prospectively over the remaining revised leased term. In addition, aircraft rent in peso terms also decreased because of the 1.7% appreciation of the average exchange rate which represented approximately Ps.43.1 million.
Salaries and Benefits . The 31.5% increase in salaries and benefits in 2011 was primarily the result of growing our operations by 32.3%, which required a 22.6% increase in our total employees. The increase in labor costs was also driven by the increase in crew labor rates by approximately 3.9% in 2011 as a result of the renegotiation of our collective bargaining agreements.
Landing, Take-off and Navigation Expenses. The 47.7% increase in landing, take-off and navigation expenses in 2011 was primarily due to a 34.4% increase in booked passengers. In addition, our airports served increased by 6.9%.
Sales, Marketing and Distribution Expenses . Sales, marketing and distribution expenses increased 21.9% in 2011 primarily due to a significant increase in sales, which led to higher distribution costs. In the year ended December 31, 2010, we recorded business alliance amortization expenses of Ps.5.1 million. For more information, see note 11 to our financial statements included elsewhere in this prospectus.
Maintenance Expenses . The 37.5% increase in maintenance expenses in 2011 was a result of a 30.8% increase in the size of our fleet, a 3.0% increase in average daily utilization, and higher maintenance costs associated with the aging of our fleet.
Other Operating Expenses . Other operating expenses increased 40.6% in 2011 primarily as a result of:
 
 	•	 	additional transaction costs of Ps.26.4 million incurred in prior years related to a suspended equity transaction.	
 
 	•	 	additional administrative support due to the expansion in our flight operations and employees, and a rise in miscellaneous administrative expenses, such as travel costs and consulting and legal fees;	
 
 	•	 	additional technical and communications support required as a result of the growth of our operations; and	
 
 	•	 	servicing more passengers on board and the expansion of our international routes.	
Depreciation and Amortization . Depreciation and amortization increased 82.0% in 2011 primarily due to the amortization of major maintenance events under the deferral method, which increased by Ps.36.0 million from 2010 to 2011.
Operating Results
First quarter 2012 compared to first quarter 2013

 	  	For the three months ended March 31,	 	
 	  	2012	 	 	2013
(Restated)	 	  	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Operating Results	  				 				  				  				
Total operating revenues	  	 	2,412,149	  	 	 	3,061,587	  	  	 	649,438	  	  	 	26.9	% 	
Total operating expenses, net	  	 	2,577,937	  	 	 	3,023,610	  	  	 	445,673	  	  	 	17.3	% 	
	  	 	 	 	 	 	 	 	  	 	 	 	  				
Operating (loss) income	  	 	(165,788	) 	 	 	37,977	  	  	 	203,765	  	  	 	n.a.	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  				
Operating Income . As a result of the factors outlined above, our operating income was Ps.37.9 million for the three months ended March 31, 2013. This was a Ps.203.8 million increase over our operating loss of Ps.165.8 million during the same period in 2012.
 
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2011 compared to 2012

 	  	For the years ended December 31,	 	
 	  	2011
(Restated)	 	 	2012	 	  	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Operating Results	  				 				  				  				
Total operating revenues	  	 	8,878,616	  	 	 	11,686,415	  	  	 	2,807,799	  	  	 	31.6	% 	
Total operating expenses, net	  	 	9,251,601	  	 	 	11,308,175	  	  	 	2,056,574	  	  	 	22.2	% 	
	  	 	 	 	 	 	 	 	  	 	 	 	  				
Operating (loss) income	  	 	(372,985	) 	 	 	378,240	  	  	 	751,225	  	  	 	n.a.	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  				
Operating Income. As a result of the factors outlined above, our operating income was Ps.378.2 million in 2012, a 201.4% increase compared to our operating loss of Ps.373.0 million in 2011.
2010 compared to 2011

 	  	For the years ended December 31,	 	
 	  	2010	 	  	2011
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Operating Results	  				  				 				 				
Total operating revenues	  	 	6,777,390	  	  	 	8,878,616	  	 	 	2,101,226	  	 	 	31.0	% 	
Total operating expenses, net	  	 	6,266,232	  	  	 	9,251,601	  	 	 	2,985,369	  	 	 	47.6	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	 				
Operating income (loss)	  	 	511,158	  	  	 	(372,985	) 	 	 	(884,143	) 	 	 	n.a.	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 				
Operating Income (loss). As a result of the factors outlined above, we had an operating loss of Ps.373.0 million in 2011, compared to an operating income of Ps.511.2 million in 2010.
Financial Results
First quarter 2012 compared to first quarter 2013

 	  	For the three months ended March 31,	 	
 	  	2012	 	 	2013	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Financing Results	  				 				 				 				
Finance income	  	 	2,616	  	 	 	4,355	  	 	 	1,739	  	 	 	66.5	% 	
Finance cost	  	 	(18,769	) 	 	 	(18,415	) 	 	 	354	  	 	 	(1.9	%) 	
Exchange loss, net	  	 	(87,812	) 	 	 	(107,830	) 	 	 	(20,018	) 	 	 	22.8	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total financing results	  	 	(103,965	) 	 	 	(121,890	) 	 	 	(17,925	) 	 	 	17.2	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total Financing Results . The variation in financing results was primarily due to the appreciation of the peso against the U.S. dollar for the three months ended March 31, 2013, compared to the same period in 2012, because we have a U.S. dollar net asset position.
 
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2011 compared to 2012

 	  	For the years ended December 31,	 	
 	  	2011	 	 	2012	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Financing Results	  				 				 				 				
Finance income	  	 	5,539	  	 	 	13,611	  	 	 	8,072	  	 	 	n.a.	  	
Finance cost	  	 	(57,718	) 	 	 	(89,731	) 	 	 	(32,013	) 	 	 	55.5	% 	
Exchange gain (loss), net	  	 	110,150	  	 	 	(95,322	) 	 	 	(205,472	) 	 	 	n.a.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total financing results	  	 	57,971	  	 	 	(171,442	) 	 	 	(229,413	) 	 	 	n.a.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total Financing Results . The variation in financing results was primarily due to the appreciation of the peso against the U.S. dollar in 2012 because we have a U.S. dollar net asset position.
2010 compared to 2011

 	  	For the years ended December 31,	 	
 	  	2010	 	 	2011	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Financing Results	  				 				 				 				
Finance income	  	 	5,091	  	 	 	5,539	  	 	 	448	  	 	 	8.8	% 	
Finance cost	  	 	(52,221	) 	 	 	(57,718	) 	 	 	(5,497	) 	 	 	10.5	% 	
Exchange (loss) gain, net	  	 	(56,144	) 	 	 	110,150	  	 	 	166,294	  	 	 	n.a.	  	
Other financing costs	  	 	(3,455	) 	 	 	0	  	 	 	3,455	  	 	 	n.a.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total financing results	  	 	(106,729	) 	 	 	57,971	  	 	 	164,700	  	 	 	n.a.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Total Financing Results . The variation in financing results was primarily due to the depreciation of the peso against the U.S. dollar in 2011 because we have a U.S. dollar net asset position.
Income Tax Expense and Net Income
First quarter 2012 compared to first quarter 2013

 	  	For the three months ended March 31,	 	
 	  	2012	 	 	2013
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Net loss	  				 				 				  				
Loss before income tax	  	 	(269,753	) 	 	 	(83,913	) 	 	 	185,840	  	  	 	(68.9	%) 	
Income tax (expense) benefit	  	 	4,532	  	 	 	19,291	  	 	 	14,759	  	  	 	n.a.	  	
Attribution of net loss	  				 				 				  				
Equity holders of the parent	  	 	(222,940	) 	 	 	(62,286	) 	 	 	160,654	  	  	 	(72.1	%) 	
Non-controlling interest	  	 	(42,281	) 	 	 	(2,336	) 	 	 	39,945	  	  	 	(94.5	%) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Net loss	  	 	(265,221	) 	 	 	(64,622	) 	 	 	200,599	  	  	 	(75.6	%) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
We recorded net loss of Ps.64.6 million in the three months ended March 31, 2013 compared to a net loss of Ps.265.2 million in the same period in 2012. The decrease in net loss for the three months ended March 31, 2013 was primarily due to an increase of 26.9% in operating revenues, partially offset by an increase in operating expenses of 17.3%.
As of March 31, 2012 and 2013, our estimated effective tax rate was recognized at the end of each period, resulting in a higher income tax benefit of Ps.20.8 million for the three months ended March 31, 2013.
 
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2011 compared to 2012

 	  	For the years ended December 31,	 	
 	  	2011
(Restated)	 	 	2012	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Net (loss) income	  				 				 				 				
(Loss) income before income tax	  	 	(315,014	) 	 	 	206,798	  	 	 	521,812	  	 	 	n.a.	  	
Income tax (expense) benefit	  	 	(476	) 	 	 	(3,481	) 	 	 	(3,005	) 	 	 	n.a.	  	
Attribution of net (loss) income	  				 				 				 				
Equity holders of the parent	  	 	(293,540	) 	 	 	215,239	  	 	 	508,779	  	 	 	n.a.	  	
Non-controlling interest	  	 	(21,950	) 	 	 	(11,922	) 	 	 	10,028	  	 	 	(45.7	%) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
Net (loss) income	  	 	(315,490	) 	 	 	203,317	  	 	 	518,807	  	 	 	n.a.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 				
We recorded net income of Ps.203.3 million in 2012 compared to a net loss of Ps.315.5 million in 2011. The net loss in 2011 was primarily due to the ramp-up period of the new 15 routes that we launched in late 2010 and 2011. See “Trends and Uncertainties Affecting Our Business—Ramp-up Period for New Routes.”
At December 31, 2012 and 2011, we had tax loss carry-forwards amounting to Ps.2,014.9 million and Ps.2,200.0 million, respectively. These losses relate to our operations, which in conformity with current Mexican Income Tax Law may be carried forward and used to offset taxable income generated in the succeeding ten years by the entity and may not be used to offset taxable income elsewhere in our consolidated group. During the years ended December 31, 2012, and 2011, we used Ps.256.6 million and Ps.0.8 million, respectively, in tax loss carry-forwards.
2010 compared to 2011

 	  	For the years ended December 31,	 	
 	  	2010	 	  	2011
(Restated)	 	 	Variation	 	
 	  	(In thousands of pesos, except for %)	 	
Net income (loss)	  				  				 				 				
Income (loss) before income tax	  	 	404,429	  	  	 	(315,014	) 	 	 	(719,443	) 	 	 	n.a.	  	
Income tax benefit (expense)	  	 	238,684	  	  	 	(476	) 	 	 	(239,160	) 	 	 	n.a.	  	
Attribution of net income (loss)	  				  				 				 				
Equity holders of the parent	  	 	572,234	  	  	 	(293,540	) 	 	 	(865,774	) 	 	 	n.a.	  	
Non-controlling interest	  	 	70,879	  	  	 	(21,950	) 	 	 	(92,829	) 	 	 	n.a.	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 				
Net income (loss)	  	 	643,113	  	  	 	(315,490	) 	 	 	(958,603	) 	 	 	n.a.	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 				
We recorded a net loss of Ps.315.5 million in 2011 compared to net income of Ps.643.1 million in 2010. In 2010 we recognized a deferred tax benefit related to our previously unrecognized deferred tax asset, because at that time we expected to be profitable in the foreseeable future.
 
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Quarterly Financial Data (unaudited)
The following table shows the financial and operating data for our business for the periods presented:

 	  	Three Months Ended	 	
 	  	March 31,
2012	 	 	June 30,
2012	 	 	September 30,
2012	 	 	December 31,
2012	 	
 	  	(In thousands of pesos, except share and per share amounts and other
operating statistics)	 	
Operating revenues	  	 	2,412,149	  	 	 	2,704,821	  	 	 	3,349,289	  	 	 	3,220,156	  	
Passenger	  	 	2,099,908	  	 	 	2,384,073	  	 	 	2,933,151	  	 	 	2,759,615	  	
Non-ticket	  	 	312,241	  	 	 	320,748	  	 	 	416,138	  	 	 	460,541	  	
Operating (loss) income	  	 	(165,788	) 	 	 	39,246	  	 	 	335,321	  	 	 	169,461	  	
Attribution of net (loss) income	  				 				 				 				
Equity holders of the parent	  	 	(222,940	) 	 	 	96,979	  	 	 	212,036	  	 	 	129,164	  	
Non-controlling interest	  	 	(42,281	) 	 	 	12,114	  	 	 	17,817	  	 	 	428	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	  	 	(265,221	) 	 	 	109,093	  	 	 	229,853	  	 	 	129,592	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other financial data (unaudited):	  				 				 				 				
EBITDA (1)	  	 	(211,922	) 	 	 	178,266	  	 	 	305,014	  	 	 	222,562	  	
Adjusted EBITDA (1)	  	 	(124,110	) 	 	 	84,674	  	 	 	389,450	  	 	 	239,228	  	
Adjusted EBITDAR	  	 	321,398	  	 	 	547,873	  	 	 	880,003	  	 	 	725,664	  	
Earnings per share	  				 				 				 				
Basic and diluted	  	 	(0.000306	) 	 	 	0.000133	  	 	 	0.000291	  	 	 	0.000176	  	
Earnings per ADS	  				 				 				 				
Basic and diluted	  	 	(0.003064	) 	 	 	0.001333	  	 	 	0.002914	  	 	 	0.001763	  	
Weighted average shares outstanding	  				 				 				 				
Basic and diluted	  	 	727,595,544	  	 	 	727,595,544	  	 	 	727,595,544	  	 	 	732,441,216	  	
Other operating statistics	  				 				 				 				
Aircraft at end of period	  	 	35	  	 	 	36	  	 	 	37	  	 	 	41	  	
Average daily Aircraft utilization (flight hours)	  	 	10.28	  	 	 	10.02	  	 	 	10.99	  	 	 	10.34	  	
Airports served	  	 	31	  	 	 	32	  	 	 	37	  	 	 	37	  	
Departures	  	 	13,090	  	 	 	13,850	  	 	 	16,110	  	 	 	15,756	  	
Average stage length (miles)	  	 	1,052	  	 	 	1,011	  	 	 	1,020	  	 	 	1,014	  	
Booked passenger (thousands)	  	 	1,601	  	 	 	1,805	  	 	 	2,050	  	 	 	1,952	  	
Revenue passenger miles (RPMs) (thousands)	  	 	1,702,655	  	 	 	1,844,382	  	 	 	2,116,676	  	 	 	2,004,489	  	
Available seat miles (ASMs) (thousands)	  	 	2,100,551	  	 	 	2,140,382	  	 	 	2,522,792	  	 	 	2,480,700	  	
Load factor	  	 	81	% 	 	 	86	% 	 	 	84	% 	 	 	81	% 	
Average ticket revenue per booked passenger	  	 	1,312	  	 	 	1,321	  	 	 	1,431	  	 	 	1,414	  	
Total operating revenue per ASM (TRASM) (cents)	  	 	114.8	  	 	 	126.4	  	 	 	132.8	  	 	 	129.8	  	
Passenger revenue per ASM (RASM) (cents)	  	 	100.0	  	 	 	111.4	  	 	 	116.3	  	 	 	111.2	  	
CASM (cents)	  	 	122.7	  	 	 	124.5	  	 	 	119.5	  	 	 	123.0	  	
CASM ex fuel (cents)	  	 	70.9	  	 	 	72.0	  	 	 	68.2	  	 	 	73.7	  	
Fuel gallons consumed (thousands)	  	 	25,260	  	 	 	26,188	  	 	 	30,970	  	 	 	29,806	  	
Average economic fuel cost per gallon	  	 	43.1	  	 	 	43.0	  	 	 	41.7	  	 	 	41.0	  	

(1)	EBITDA, Adjusted EBITDA and Adjusted EBITDAR are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR are well recognized performance measurements in the airline industry that are frequently used by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry. However, because derivations of EBITDA, Adjusted EBITDA	
 
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 	and Adjusted EBITDAR are not determined in accordance with IFRS, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of EBITDA, Adjusted EBITDA and Adjusted EBITDAR as presented may not be directly comparable to similarly titled measures presented by other companies.	
The following table represents the reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDAR to net income (loss) for the periods indicated below:

 	  	For the three months ended	 	
 	  	March 31,
2012	 	 	June 30,
2012	 	 	September 30,
2012	 	 	December 31,
2012	 	
 	  	(In thousands of pesos)	 	
Reconciliation:	  				 				 				 				
Net (loss) income	  	 	(265,221	) 	 	 	109,093	  	 	 	229,853	  	 	 	129,592	  	
Plus (minus):	  				 				 				 				
Finance cost	  	 	18,769	  	 	 	24,510	  	 	 	23,943	  	 	 	22,509	  	
Finance income	  	 	(2,616	) 	 	 	(2,629	) 	 	 	(6,837	) 	 	 	(1,529	) 	
(Benefit)/provision for income tax	  	 	(4,532	) 	 	 	1,864	  	 	 	3,926	  	 	 	2,223	  	
Depreciation and amortization	  	 	41,678	  	 	 	45,428	  	 	 	54,129	  	 	 	69,767	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	  	 	(211,922	) 	 	 	178,266	  	 	 	305,014	  	 	 	222,562	  	
Exchange (gain) loss, net	  	 	87,812	  	 	 	(93,592	) 	 	 	84,436	  	 	 	16,666	  	
Adjusted EBITDA	  	 	(124,110	) 	 	 	84,674	  	 	 	389,450	  	 	 	239,228	  	
Aircraft rent	  	 	445,508	  	 	 	463,199	  	 	 	490,553	  	 	 	486,436	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDAR	  	 	321,398	  	 	 	547,873	  	 	 	880,003	  	 	 	725,664	  	
LIQUIDITY AND CAPITAL RESOURCES
Our primary source of liquidity is cash provided by operations, with our primary uses of liquidity being working capital and capital expenditures.

 	  	For the years ended December 31,	 	 	For the three months
ended March 31,	 	
 	  	2010	 	 	2011	 	 	2012	 	 	2012	 	 	2013	 	
 	  	(In thousands of pesos)	 	 	 	 	 	 	 	
Net cash flows provided by (used in) operating activities	  	 	539,001	  	 	 	(147,705	) 	 	 	497,448	  	 	 	262,471	  	 	 	271,606	  	
Net cash flows (used in) provided by investing activities	  	 	(321,347	) 	 	 	(628,030	) 	 	 	187,161	  	 	 	(78,230	) 	 	 	61,863	  	
Net cash flows (used in) provided by financing activities	  	 	(90,065	) 	 	 	562,373	  	 	 	(271,898	) 	 	 	43,307	  	 	 	(204,281	) 	
In recent years, we have been able to meet our working capital requirements through cash from our operations. Our capital expenditures consist primarily of technology investments and acquisition of rotable spare parts, furniture and equipment. From time to time, we finance pre-delivery payments related to our aircraft with revolving lines of credit with the IFC, commercial banks and/or aircraft leasing companies. We have obtained committed financing for the pre-delivery payments in respect of all the aircraft to be delivered between 2013 and 2014.
Our cash and cash equivalents increased by Ps.238.8 million, from Ps.687.1 million as of March 31, 2012 to Ps.925.9 million as of March 31, 2013. At March 31, 2013 and 2012, we had available credit lines totaling Ps.1,349.0 million and Ps.2,020.7 million, respectively, of which Ps.1,158.7 million and Ps.1,900.7 million, respectively, were related to financial debt and Ps.190.2 million and Ps.120.0 million, respectively, were related to letters of credit. As of March 31, 2013 and 2012, Ps.247.6 million and Ps.550.5 million, respectively, remained undisbursed.
 
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Our cash and cash equivalents increased by Ps.381.0 million, from Ps.441.1 million at December 31, 2011 to Ps.822.1 million at December 31, 2012. At December 31, 2012, we had available credit lines totaling Ps.1,403.5 million, of which Ps.1,206.4 million were related to financial debt and Ps.197.1 million were related to letters of credit (Ps.59.3 million were undisbursed). At December 31, 2011, we had available credit lines totaling Ps.2,172.9 million, of which Ps.2,045.0 million were related to financial debt and Ps.127.9 million were related to letters of credit (Ps.689.1 million were undisbursed). At December 31, 2010, we had available credit lines totaling Ps.649.7 million, of which Ps.625.0 million were related to financial debt and Ps.24.7 million were related to letters of credit (Ps.4.1 million were undisbursed).
We have an investment policy to optimize the performance and ensure availability of, and minimize the risk associated with, the investment of cash, cash equivalents and short-term investments. Such policy provides for guidelines regarding minimum balance, currency mix, instruments, deadlines, counterparties and credit risk. At December 31, 2012, 26% of our cash, cash equivalents and short-term investments were denominated in pesos and 74% were denominated in U.S. dollars. See note six to our consolidated financial statements included elsewhere in this prospectus.
Net cash flows (used in) provided by operating activities. We rely primarily on cash flows from operations to provide working capital for current and future operations. During the three months ended March 31, 2013 and 2012, net cash flows provided by operating activities totaled Ps.271.6 million and Ps.262.5 million, respectively. Net cash flows provided by operating activities totaled Ps.497.4 million and Ps.539.0 million in 2012 and 2010, respectively. Net cash flows used in operating activities totaled Ps.147.7 million in 2011, including Ps.24.7 million used in settlements of derivative financial instruments. The increase in operating cash flows from 2011 to 2012 was primarily due to the ramp-up period of the 15 new routes that we launched in late 2010 and 2011.
Net cash flows provided by (used in) investing activities . For the three months ended March 31, 2013, the cash flow generated by investing activities totaled Ps.61.9 million, which consisted primarily of aircraft pre-delivery payment reimbursements of Ps.252.8 million from completed sale and leaseback transactions. These reimbursements were partially offset by Ps.190.9 million in capital expenditures, primarily related to flight equipment, spare parts acquisition and major maintenance costs, net of proceeds from disposals during the same period. For the three months ended March 31, 2012, the cash flow used in investing activities totaled Ps.78.2 million, which consisted primarily of capital expenditures of Ps.194.9 million net from disposals offset by net aircraft pre-delivery payment reimbursements of Ps.116.7 million.
During 2012, the cash flow generated by investing activities totaled Ps.187.2 million, which consisted primarily of aircraft pre-delivery payments reimbursements of Ps.874.5 million. These reimbursements were offset by Ps.687.3 million primarily due to capital expenditures, which consisted of expenditures related to flight equipment, spare parts acquisitions and major maintenance costs, net of disposals during the same period. During 2011, the cash flow generated by investing activities totaled Ps.628.0 million, which consisted primarily of expenditures related to aircraft pre-delivery payments and major maintenance cost. During 2010, capital expenditures totaled Ps.321.3 million.
Net cash flows provided by (used in) financing activities. Financing activities during the three months ended March 31, 2013 consisted primarily of interest paid on aircraft financing pre-delivery facilities and financial debt of Ps.11.0 million. In addition, financing activities included aircraft financing pre-delivery payments under Mexican trust structures for an aggregate net amount of Ps.193.3 million (through sale and leaseback transactions). Financing activities during the three months ended March 31, 2012 consisted primarily of interest payments on aircraft financing pre-delivery facilities and financial debt of Ps.17.0 million. In addition, financing activities included aircraft pre-delivery payments under Mexican trust structures to the aircraft manufacturer, for an aggregate net amount of Ps.60.3 million (through sale and leaseback transactions).
Financing activities during 2012 consisted primarily of interest paid on aircraft financing pre-delivery facilities and financial debt for Ps.127.4 million. In addition, financing activities during 2012 included payments of aircraft financing pre-delivery payments under Mexican trust structures for an aggregate net amount of
 
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Ps.144.5 million (through sale and leaseback transactions). Financing activities during 2011 consisted primarily of interest paid on aircraft financing pre-delivery payments and credit lines in the amount of Ps.55.2 million. In addition, financing activities during 2011 included aircraft financing pre-delivery payments under Mexican trust structures for an aggregate net amount of Ps. 617.6 million. Financing activities during 2010 consisted primarily of interest paid corresponding to aircraft financing pre-delivery payments and credit lines in the amount of Ps.60.2 million and transaction and legal costs paid in connection with our July 2010 change in our ownership structure with the incorporation of new equity shareholders for Ps.75.9 million. In addition, financing activities during 2010 included aircraft financing pre-delivery payments under the IFC loan for Ps.46.1 million.
Commitments and Contractual Obligations
The following table sets forth certain contractual obligations as of March 31, 2013:

 	  	Contractual Obligations
 Payments due by Period 	 	
 	  	Total	 	  	Less than
1 year	 	  	1 to 3
years	 	  	3 to 5
years	 	  	More than
5 years	 	
 	  	(In thousands of pesos)	 	
Debt (1)	  	 	938,992	  	  	 	390,663	  	  	 	548,329	  	  	 	—	  	  	 	—	  	
Operating lease obligations (2)	  	 	10,850,026	  	  	 	1,325,441	  	  	 	3,203,013	  	  	 	2,431,529	  	  	 	3,890,043	  	
						
Flight equipment, spare engines and spare parts purchase obligations (3)	  	 	6,368,129	  	  	 	459,952	  	  	 	1,448,751	  	  	 	1,529,773	  	  	 	2,929,653	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total future payments on contractual obligations	  	 	18,157,147	  	  	 	2,176,056	  	  	 	5,200,093	  	  	 	3,961,302	  	  	 	6,819,696	  	

(1)	Includes scheduled interest payments.	
(2)	Does not include maintenance reserve payments because they depend on the utilization of the aircraft.	
(3)	Our contractual purchase obligations consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies. At March 31, 2013, 14 options had been converted into 14 firm aircraft orders of Airbus A320 aircraft, nine of which have been delivered and five of which will be delivered through 2013 and 2014. In December 2011, we signed an amendment to our purchase agreement with Airbus for an additional order of 44 A320 family aircraft for delivery through 2015 and 2020.	
Committed expenditures for these aircraft, spare engines, spare parts and related flight equipment, including estimated amounts for contractual price escalations of pre-delivery payments, will be approximately Ps.6,369 million from 2013 to 2020.
In 2013, we expect our capital expenditures, excluding pre-delivery payments, to be Ps.341.6 million, consisting primarily of aircraft parts and rotable spare parts, construction and improvements to leased assets, and major maintenance costs (leasehold improvements to flight recorded into rotable spare parts furniture and equipment, net).
Off Balance Sheet Arrangements
None of our operating lease obligations are reflected on our statements of financial position. We are responsible for all maintenance, insurance and other costs associated with operating these aircraft; however, we have not made any residual value guarantee to our lessors.
 
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Market Risk Sensitive Instruments and Positions
We are subject to certain market risks, including commodity prices, specifically fuel. The adverse effects of changes in these markets could pose a potential loss as discussed below. The sensitivity analysis provided below does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.
Fuel . Our results of operations can vary materially due to changes in the price and availability of fuel. Fuel expense for the years ended December 31, 2010, 2011 and 2012 represented approximately 34%, 41% and 42%, respectively, of our operating expenses. Increases in fuel prices or a shortage of supply could have a material adverse effect on our operations and operating results. We source a significant portion of our fuel from refining resources located in Mexico. Gulf Coast fuel is subject to volatility and supply disruptions, particularly during hurricane season when refinery shutdowns have occurred, or when the threat of weather-related disruptions has caused Gulf Coast fuel prices to spike above other regional sources. For the year ended December 31, 2012, we hedged approximately 4.23% of our forecasted fuel requirements using swaps. US Gulf Coast Jet Fuel 54 is the crude utilized to determine the cost of the fuel produced by our suppliers. Based on our 2012 annual fuel consumption, a 10% increase in the average price per gallon of the U.S. Gulf Coast Jet Fuel 54, would have increased our fuel budget expense for 2012 by approximately Ps.473.0 million. To attempt to manage fuel price risk, from time to time we use derivative financial instruments to mitigate the risk in cash flows attributable to changes in the fuel price. The fair value of our fuel derivative contracts as of December 31, 2010, 2011 and 2012 was Ps.7.31 million, Ps.0.93 million and Ps.2.36 million net asset, respectively. We measure our derivative financial instruments at fair value. We measure the fair value of the derivative instruments based on either quoted market prices or values provided by the counterparty. Outstanding derivative financial instruments expose us to credit loss in the event of nonperformance by the counterparties to the agreements. However, we do not expect the counterparties to fail to meet their obligations. As of December 31, 2012, we believe the credit exposure related to these fuel forward contracts was minor.
Foreign Exchange . Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities (when revenue or expense is denominated in a different currency from our functional currency). In order to mitigate such risk, we use from time to time derivative financial instruments. Although 26% of our revenues came from operations in the United States for the year ended December 31, 2012 (compared to 24% in 2011), the U.S. dollar denominated collections accounted for 34% and 33% of our total collections in 2012 and 2011, respectively. Our foreign exchange exposure as of December 31, 2011 and 2012 are a net asset position by U.S.$169.7 million and U.S.$208.2 million, respectively. During the year ended December 31, 2012, we did not enter into exchange rate derivatives financial instruments. For the years ended December 31, 2011 and 2010, we entered into exchange rate derivatives financial instruments. During the years ended December 31, 2011 and 2010, these hedges resulted in a loss of Ps.1,069 million and Ps.390 million, respectively. All our derivatives positions matured in January 2011, accordingly, there is no fair value as of December 31, 2011. The fair value of our exchange rate derivatives as of December 31, 2010 was Ps.318 million. This amount was recognized in the statement of financial position as “short-term liabilities” with a corresponding credit recognized as “other comprehensive income”.
Interest Rates . We have market risk associated with changes in variable interest rates due to the LIBOR-based rates in two of our aircraft leases. A hypothetical 100 bps increase in LIBOR in 2012 would have affected our aircraft rent expense in 2012 by Ps.8.0 million. We use derivative financial instruments to reduce our exposure to fluctuations in market interest rates. At December 31, 2010, 2011 and 2012, we had derivative financial instruments in the form of interest rate swaps with net liability of Ps.99.1 million, Ps.162.7 million and Ps.147.7 million, respectively.
Our debt, as recognized in our consolidated statements of financial position, consists of loans from the IFC, Banco Inbursa, Pasprot and the revolving line of credit with Banco Santander México and Bancomext. A hypothetical 100 bps increase in market interest rates as of December 31, 2012 would have increased our debt interest expense in 2012 on our consolidated statement of financial position by Ps.11.6 million.
 
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Loan Agreements
The loan agreement with the IFC, dated June 23, 2006, as amended, provides for two tranches, a tranche A revolving line of credit for up to U.S.$30 million for the partial payment of pre-delivery payments of aircraft and a tranche C of up to U.S.$10 million for other purposes relating to our start-up, development and operation. Interest is payable semi-annually at LIBOR plus a spread, which is higher for the tranche C. Principal may be prepaid subject to certain conditions. The tranche A was fully paid in December 2011. The final maturity under tranche C is June 15, 2014. This loan agreement limits our ability to, among others, declare and pay dividends, create liens, enter into certain derivative transactions and dispose of certain assets. This loan agreement requires us to maintain at all times a minimum level of shareholders’ equity. In addition, this loan agreement provides for a debt basket to incur debt and limits our ability to incur debt above such debt basket unless we comply with certain financial ratios. We intend to use a portion of the net proceeds from the global offering to prepay this loan.
The loan agreement with Banco Inbursa, dated May 12, 2009, provides for a general corporate purpose loan of Ps.257.1 million. Interest is payable semi-annually at an annual rate of Mexican Interbank Rate of Equilibrium (Tasa de Interés Interbancaria de Equilibrio) plus a spread. Currently, principal may be prepaid subject to certain conditions including the payment of a premium equivalent to 25% of the amount to be prepaid. Also, 50% of any principal balance has to be paid on May 12, 2015 and any remaining principal balance has to be paid on May 12, 2016. Principal paid may not be re-borrowed. This loan agreement provides for a debt basket to incur debt and limits our ability to incur debt above such debt basket unless we comply with certain financial ratios. This loan agreement also provides for other limitations, including limits to our ability to, among others, declare and pay dividends, create liens, reduce our capital beyond certain threshold and dispose of certain assets. We intend to use a portion of the net proceeds from the global offering to prepay this loan.
The loan agreement with Pasprot, S.A. de C.V., dated May 12, 2009, provides for a general corporate purpose loan of Ps.3.3 million. This loan agreement has substantially the same terms as the loan agreement with Banco Inbursa. We intend to use a portion of the net proceeds from the global offering to prepay this loan.
The revolving line of credit with Banco Santander México and Bancomext, dated July 27, 2011, under which we are a guarantor, provides financing for pre-delivery payments in connection with our purchase of seven Airbus A320 aircraft. The aggregate principal amount of this revolving line is for up to U.S.$62.7 million, of which U.S.$37.7 million is provided by Banco Santander México and $25.0 million by Bancomext. Interest is payable at an annual rate of three-month LIBOR plus 2.65%. The final maturity is on December 1, 2014. Any principal repaid may be re-borrowed until December 31, 2013. This revolving line of credit may limit our ability to, among others, declare and pay dividends in the event that we fail to comply with the payment terms thereunder, dispose of certain assets, incur indebtedness and create certain liens.
As of March 31, 2013, we were current with principal and interest payments as well as in compliance with the covenants under our loan agreements and revolving line of credit.
 
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 REGULATION
Mexican Regulation
Operational Regulation
Air transportation services for passengers provided on a regular basis, as opposed to charter flights and permits, are considered a public service in Mexico. To render regular air transportations services, a concession granted by the Mexican federal government is required. The legal framework of the air transportation industry in Mexico is primarily established by the Mexican Aviation Law ( Ley de Aviación Civil ) and its regulations, the Mexican Airport Law ( Ley de Aeropuertos ) and its regulations, the General Communications Ways Law ( Ley de Vias Generales de Comunicación ), and applicable Mexican Official Rules ( Normas Oficiales Mexicanas ). The main regulatory authority overseeing air transportation is the SCT, acting mainly through the DGAC.
Pursuant to the Mexican Aviation Law, the SCT, through the DGAC, is responsible and has the authority, among others, to (i) impose and conduct the policies and programs for the regulation and development of air transportation services; (ii) grant concessions and permits, oversee compliance with, and, if applicable, resolve amendments to or termination of such concessions or permits; (iii) issue the Mexican Official Rules and other administrative provisions; (iv) provide and control the air navigation services; (v) issue and enforce the safety and health rules that must be observed in air transportation services; (vi) issue certificates of registration, certificates of airworthiness, and certificates to air services providers and declare the suspension, cancellation, revalidation or revocation of such certificates; (vii) maintain and operate the Mexican Aeronautical Registry ( Registro Aéronautico Mexicano ), where aircraft and leases over aircrafts are regulated; (viii) participate in the international agencies and in the negotiation of treaties; (ix) promote the development and training of the aeronautical technical staff; (x) issue and, if applicable, revalidate or cancel the licenses of the aeronautical technical staff; (xi) interpret the Mexican Aviation Law and its regulations for administrative purposes; (xii) authorize the verification visits; (xiii) appoint or, if applicable, remove the regional commanding officer and the commanding officers for airports, heliports and civil airdromes in general, and (xiv) approve flight plans.
The DGAC primarily oversees and verifies compliance by the concessionaires, licensees, operators and airline services providers with the Mexican Aviation Law, its regulations, the Mexican Official Rules and any other applicable provisions.
A concession granted by the SCT is required to render domestic and regular air transportation services in Mexico. Any such concession may only be granted to Mexican entities which meet certain technical, financial, legal and administrative requirements that are deemed necessary to adequately provide services with quality, safety, and timeliness. Other requirements to be met to obtain a concession are (i) the availability of aircraft and aircraft equipment, which is required to comply with technical requirements of safety, airworthiness conditions and environmental conditions; (ii) the availability of hangars, repair shops and infrastructure needed for operations, as well as the availability of technical and administrative staff trained for the operation of the concession; and (iii) experience in the industry. To provide any other air transportation service in Mexico, different from domestic and regular air transportation, a permit from the SCT is required pursuant to the Mexican Aviation Law.
Concession and Permits
Through our subsidiary Volaris Opco, we hold (i) the Concession, which authorizes us to provide domestic regular passenger, cargo and mail air transportation services within Mexico, (ii) a permit for domestic charter air transportation passenger services, and (iii) a permit for international regular passenger and charter passenger air transportation services.
Our Concession was granted by the Mexican federal government through SCT, on May 9, 2005 originally for a period of five years, and was extended by SCT on February 17, 2010 for an additional period of ten years.
 
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The Concession authorizes us the use of certain aircraft and certain routes. Pursuant to the terms of the Mexican Aviation Law, our Concession, together with specific authorizations granted to us by the DGAC, allow us to provide domestic and international regular air transportation services. Pursuant to our Concession, we have to pay to the Mexican federal government certain fees arising from the services we render. The exhibits to the Concession must be updated every time new aircraft is operated by Volaris Opco, any time new routes are added, or existing routes are modified. For more information regarding our aircraft and routes, see “Business—Route Network” and “Business —Fleet.”
The permit for domestic charter air transportation of passengers was granted by the SCT on April 16, 2007, without a termination date; it authorizes certain aircraft to operate under such permit and specifies, among other terms and conditions, that Volaris Opco is required to request authorization from the DGAC before carrying out any flight.
The permit for international charter air transportation of passengers was granted by the DGAC on June 3, 2009 for an unspecified period of time; it authorizes certain aircraft to operate under such permit and indicates, among other terms and conditions, that Volaris Opco is required to request authorization from the DGAC, before carrying out any flight.
To operate our aircraft, each aircraft is required to have on board its certificate of registration, its certificate of airworthiness, and its insurance policy. All aircraft must have on board all documents and equipment required by the treaties, the Mexican Aviation Law and all applicable provisions. We believe we hold all necessary operating and airworthiness authorizations, certificates and licenses, and carry all necessary insurance policies and are operating in compliance with applicable law.
The Mexican Aviation Law provides that concessions and permits may be revoked for any of the following principal reasons: (i) failure to exercise rights conferred by the concessions or permits for a period exceeding 180 calendar days from the date that such concessions or permits were granted; (ii) failure to maintain in effect the insurance required pursuant to the Mexican Aviation Law; (iii) change of nationality of the holder of the concession or permit; (iv) assignment, mortgage, transfer or conveyance of concessions, permits or rights thereunder to any foreign government or foreign state; (v) assignment, mortgage, transfer or conveyance of concessions, permits or rights thereunder to any person without the approval of the SCT; (vi) applying fares different from the registered or approved fares, as applicable; (vii) interruption of the services without authorization from the SCT, except in the events of acts of God or force majeure; (viii) rendering services different to those set forth in the respective permit or concession; (ix) failure to comply with safety conditions; (x) failure to indemnify from damages arising from the services rendered and (xi) in general, failure to comply with any obligation or condition set forth in the Mexican Aviation Law, its regulations or the respective concession or permit. In the event our Concession was revoked, for any of the reasons specified above, we will not be entitled to any compensation and we will be unable to continue to conduct our business.
Aircraft
Pursuant to the Mexican Aviation Law and our Concession, all the aircraft used to provide our services must be registered in Mexico before the Mexican Aeronautical Registry and flagged as Mexican aircraft and, if registered in other countries, such aircraft need to be authorized to operate in Mexico. The registration with the Mexican Aeronautical Registry is granted subject to compliance with certain legal and technical requirements. All the aircraft which comprise our fleet as of this date have been authorized by and registered with the DGAC.
We have to maintain our aircraft in airworthiness condition. The maintenance must be provided as specified in the manufacturers’ maintenance manuals and pursuant to a maintenance program approved by the DGAC. The DGAC has authority to inspect our aircraft, their maintenance records and our safety procedures. Based on such inspections, the DGAC may declare our aircraft unfit to fly and in certain cases revoke our Concession.
 
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Routes
Pursuant to the Mexican Aviation Law and our Concession, we may only provide our services on routes approved under our Concession. Any new route or change in the existing routes must be approved by the DGAC. Domestic Routes are subject to our Concession and the Mexican Aviation Law. As we only fly in international routes to the United States, such routes are subject to our Concession, the international routes authorization permits issued by the DGAC, the Mexican Aviation Law and the USA Mexico Bilateral Air Transport Agreement dated August 16, 1960, as amended on December 12, 2005. The USA Mexico Bilateral Air Transport Agreement provides a legal framework for the international routes of Mexican and U.S. carriers between the United States and Mexico and vice versa. Under the USA Mexico Bilateral Air Transport Agreement, each of the governments has the right to appoint two (or three) airlines of each city pair, as the airlines authorized to render air transportation services in each route from the United States to Mexico and vice versa.
Fares
According to the Mexican Aviation Law, concessionaries or licensees of air transportation may freely set fares for the services provided by them on terms that permit the rendering of services in satisfactory conditions of quality, competitiveness, safety and consistency. The international fares must be approved by the SCT pursuant to applicable treaties. The fares (both domestic and international) must be registered with the SCT and be permanently available to users of the services. The SCT may deny the registration of fares set by the concessionaires or licensees if such fares imply predatory or monopolistic practices, dominance in the market from a competition perspective or disloyal competition which prevents the participation in the market of other concessionaires or licensees. The SCT may also set minimum and maximum levels of fares (restricting, in that case, the ability of concessionaires and holders of licenses to freely determine rates), as applicable, for the corresponding services, to promote competition. The fares will describe clearly and explicitly the restrictions such fares are subject to and will remain valid for the time and under the conditions offered.
The Mexican Aviation Law provides that in the event that the SCT considers that there is no competition among concession and permit holders, the SCT may request the opinion of the Mexican Antitrust Commission and then approve regulations governing fares that may be charged for air transportation services, thus limiting the ability of participants to freely determine rates. Such regulations will be maintained only during the existence of the conditions that resulted in the negative competition effects.
Slots
Under Mexican Law, a “slot” is the schedule for the landing and taking off of aircraft. The regulation of the slots is provided by the Mexican Airport Law and its regulations. A slot is assigned to an operator by the airport administrator considering the recommendation of a committee of operations, for the organization and planning of the flights at the relevant airport. According to the regulations to the Mexican Airport Law, the operating rules of each airport in Mexico, must contain the guidelines for the assignment of slots. Therefore, the different airports’ administrations will establish in such guidelines how slots are to be assigned considering (i) the operation schedule of the airport, (ii) safety and efficiency criteria, (iii) capacity of the services providers, (iv) schedule availability, and (v) compliance with of the requirements for the assignment of the slots.
Taking or Seizure
Pursuant to Mexican law and our Concession, the Mexican federal government may take or seize our assets temporarily or permanently, in the event of natural disasters, war, serious changes to public order or in the event of imminent danger to the national security, internal peace or the national economy. The Mexican federal government, in all cases, except in the event of international war, must indemnify us by paying the respective losses and damages at market value. See “Risk Factors—Risks related to the airline industry—Under Mexican law, our assets could be taken or seized by the Mexican government under certain circumstances.”
 
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Foreign Ownership
The Mexican Foreign Investment Law ( Ley de Inversión Extranjera ) limits foreign investment in companies rendering domestic air transportation services up to 25% of such companies’ voting stock. This limit applies to Volaris Opco, but not to us as a holding company. We, as a holding company, must remain a Mexican-investor controlled entity, as a means to control Volaris Opco. The acquisition of our Series A shares through the CPOs, that strip-out voting rights but grant any and all economic rights, by foreign investors, is deemed neutral, from a foreign investment perspective, and is not, as a result, counted as foreign investment excluded from this restriction. For a discussion of the procedures we instituted to ensure compliance with these foreign ownership rules, see “Description of Capital Stock—Other Provisions—Foreign Investment Regulations.”
Environmental Regulation
We are subject to regulations relating to the protection of the environment such as the General Law of Ecological Balance and Environmental Protection ( Ley General del Equilibrio Ecológico y la Protección al Ambiente ), the regulations of the General Law of Ecological Balance and Environmental Protection regarding Environmental Impact, Prevention and Control of Air Pollution and of Hazardous Waste ( Reglamentos en Materia de Evaluación del Impacto Ambiental, Prevención y Control de Contaminación del Aire y Desperdicios Peligrosos ), the General Law for Prevention and Handling of Wastes ( Ley General de Prevención y Gestión Integral de Riesgos ) and the National Waters Law ( Ley Nacional de Aguas ) and its regulations, official Mexican standards, international treaties, bilateral agreements and specifically by an Official Rule NOM 036 SCT3 2000 which regulates the maximum limits of the aircraft noise emissions as well as the requirements to comply with such limits. Volaris Opco is ISO 14,000 certified.
Labor Regulation
We are subject to the provisions of the Mexican Labor Law ( Ley Federal del Trabajo ) and the provisions contained in the collective bargaining agreements with Sindicato de Trabajadores de la Industria Aeronáutica, Similares y Conexos de la República Mexicana -STIAS. For more information on our relationship with such labor union and our labor collective bargaining agreements, see “Business—Employees.”
U.S. and International Regulation
Operational Regulation
The airline industry is heavily regulated by the U.S. government. Two of the primary regulatory authorities overseeing air transportation in the United States are the DOT and the FAA. The DOT has jurisdiction over economic issues affecting air transportation, such as unfair or deceptive competition, advertising, baggage liability and disabled passenger transportation. The DOT has authority to issue permits required for airlines to provide air transportation. We hold DOT permits authorizing us to engage in scheduled air transportation of passengers, property and mail to and from certain destinations in the United States. Each permit is valid for one year and renewable for one-year terms.
The FAA is responsible for regulating and overseeing matters relating to air carrier flight operations, including airline operating certificates, aircraft certification and maintenance and other matters affecting air safety. The FAA requires each commercial airline to obtain and hold an FAA air carrier certificate and to comply with Federal Aviation Regulations 129 and 145. This certificate, in combination with operations specifications issued to the airline by the FAA, authorizes the airline to operate at specific airports using aircraft approved by the FAA. As of December 31, 2012, we had FAA airworthiness certificates for seventeen of our aircraft (the remainder being registered with the DGAC), we had obtained the necessary FAA authority to fly to all of the cities we currently serve and all of aircraft had been certified for over-water operations. Pilots operating and mechanics providing maintenance services on “N” or U.S.-registered aircraft require a special license issued by the FAA. We hold all necessary operating and airworthiness authorizations, certificates and licenses and are operating in compliance with applicable DOT and FAA regulations, interpretations and policies.
 
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International Regulation
Our service to the U.S. is also subject to U.S. Customs and Border Protection, or CBP (a law enforcement agency that is part of the U.S. Department of Homeland Security), immigration and agriculture requirements and the requirements of equivalent foreign governmental agencies. Like other airlines flying international routes, from time to time we may be subject to civil fines and penalties imposed by CBP if un-manifested or illegal cargo, such as illegal narcotics, is found on our aircraft. These fines and penalties, which in the case of narcotics are based upon the retail value of the seizure, may be substantial. We have implemented a comprehensive security program at our airports to reduce the risk of illegal cargo being placed on our aircraft, and we seek to cooperate actively with CBP and other U.S. and foreign law enforcement agencies in investigating incidents or attempts to introduce illegal cargo.
Security Regulation
The TSA was created in 2001 with the responsibility and authority to oversee the implementation, and ensure the adequacy, of security measures at airports and other transportation facilities in the United States. Since the creation of the TSA, airport security has seen significant changes including enhancement of flight deck security, the deployment of federal air marshals onboard flights, increased airport perimeter access security, increased airline crew security training, enhanced security screening of passengers, baggage, cargo and employees, training of security screening personnel, increased passenger data to CBP and background checks. Funding for passenger security is provided in part by a per enplanement ticket tax (passenger security fee) of U.S.$2.50 per passenger flight segment, subject to a U.S.$5 per one-way trip cap. The TSA was granted authority to impose additional fees on air carriers if necessary to cover additional federal aviation security costs. Pursuant to its authority, the TSA may revise the way it assesses this fee, which could result in increased costs for passengers and/or us. We cannot forecast what additional security and safety requirements may be imposed in the future or the costs or revenue impact that would be associated with complying with such requirements. The TSA also assess an Aviation Security Infrastructure Fee, or ASIF, on each airline.
Environmental Regulation
We are subject to various federal, state and local U.S. laws and regulations relating to the protection of the environment and affecting matters such as aircraft engine emissions, aircraft noise emissions, and the discharge or disposal of materials and chemicals, which laws and regulations are administered by numerous state and federal agencies. The Environmental Protection Agency, or EPA, regulates our operations in the United States, including air carrier operations, which affect the quality of air in the United States. We believe the aircraft in our fleet meet all emission standards issued by the EPA. Concern about climate change and greenhouse gases may result in additional regulation or taxation of aircraft emissions in the United States and abroad.
U.S. law recognizes the right of airport operators with special noise problems to implement local noise abatement procedures so long as those procedures do not interfere unreasonably with interstate and foreign commerce and the national air transportation system. These restrictions can include limiting nighttime operations, directing specific aircraft operational procedures during takeoff and initial climb, and limiting the overall number of flights at an airport. None of the airports we serve currently restricts the number of flights or hours of operation, although it is possible one or more of such airports may do so in the future with or without advance notice.
Other Regulations
In the U.S., we are subject to certain provisions of the Communications Act of 1934, as amended, and are required to obtain an aeronautical radio license from the Federal Communications Commission, or FCC. To the extent we are subject to FCC requirements, we will take all necessary steps to comply with those requirements. We are also subject to state and local laws and regulations at locations where we operate and the regulations of various local authorities that operate the airports we serve.
 
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Future Regulations
The Mexican, U.S. and other foreign governments may consider and adopt new laws, regulations, interpretations and policies regarding a wide variety of matters that could directly or indirectly affect our results of operations. We cannot predict what laws, regulations, interpretations and policies might be considered in the future, nor can we judge what impact, if any, the implementation of any of these proposals or changes might have on our business.
 
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 INDUSTRY
There are two main categories of passenger airlines that operate in the domestic and international Mexican market: (i) the traditional legacy network carriers, which include Grupo Aeroméxico and Grupo Mexicana (currently not operating and undergoing reorganization ( concurso mercantil ), and (ii) the low-cost carriers, which include Interjet, VivaAerobus and Volaris. The ULCC business model is a subset of the low-cost carrier market.
Legacy carriers offer scheduled flights to major domestic and international routes (directly or through membership in an alliance, such as Star Alliance, Oneworld and/or Skyteam) and serve numerous smaller cities. These carriers operate mainly through a “hub-and-spoke” network route system. This system concentrates most of an airline’s operations in a limited number of hub cities, serving other destinations in the system by providing one-stop or connecting service through hub airports to end destinations on the spokes. Such an arrangement permits travelers to fly from a given point of origin to more destinations without switching to another airline. Traditional legacy carriers typically have higher cost structures than low-cost carriers due to higher labor costs, flight crew and aircraft scheduling inefficiencies, concentration of operations in higher cost airports, and multiple classes of services. Other examples of legacy carriers in the Latin American market include Avianca-TACA, Copa, and LATAM.
Low-cost carriers typically fly direct, point-to-point flights, which tends to improve aircraft and crew scheduling efficiency. In addition, low-cost carriers often serve major markets through secondary, lower cost airports in the same regions as major population centers. Many low-cost carriers only provide a single class of service, thereby increasing the number of seats on each flight and avoiding the significant and incremental cost of offering premium-class services. Finally, low-cost carriers tend to operate fleets with only one or two aircraft families at most, in order to maximize the utilization of flight crews across the fleet, improve aircraft scheduling flexibility and minimize inventory and aircraft maintenance costs. The Mexican market, which has a large population of VFR and leisure travelers, has seen demand for these low-cost carriers expand in recent years. Low-cost carriers have made a significant emergence in the Latin American market in recent years, particularly in Brazil, where Gol, Webjet (merged with Gol in 2012), Azul, and Trip (merged with Azul in 2012) have started operations in the last ten years.
In recent years, many traditional legacy network carriers globally have undergone significant financial restructuring, including ceasing operations or merging and consolidating with one another. These restructurings have allowed legacy carriers to reduce high labor costs, restructure debt, modify or terminate pension plans and generally reduce their cost structure. This has resulted in improved workforce flexibility and reduced costs while simultaneously improving product offerings similar to those of other low-cost carriers. Furthermore, many of the legacy carriers have made these improvements while still maintaining their expansive route networks, alliances and frequent flier programs.
One result of the restructuring of the network carriers is that the difference in the cost structures, and the competitive advantage previously enjoyed by low-cost airlines, has somewhat diminished. We believe that this trend has provided an opportunity for the introduction of the ULCC business model in Mexico as a subset of the more mature group of low-cost carriers. The ULCC business model involves, among other things, intense focus on low cost, efficient asset utilization, unbundled revenue sources aside from the basic fare with multiple products and services offered for additional fees. Globally, ULCCs with highly successful business models include Allegiant and Spirit in the United States, Ryanair and Wizz in Europe, and AirAsia in Asia.
ULCCs are able to achieve low-cost operations due to highly efficient and uniform fleets with high density seating and single aisle configurations. Additionally, ULCCs provide extremely low fares to customers in order to stimulate market demand and generate high aircraft utilization rates. With high aircraft utilization rates, ULCCs are able to generate substantial ancillary revenues through the offering of additional products and services, such as baggage fees, advanced seat selection, extra legroom, ticket change fees, and/or itinerary
 
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attachments such as hotels, airport transportation, and rental cars. ULCCs focus on VFR and leisure customers as opposed to business travelers. The ULCC product appeals to the cost-conscious customer because they are offered a low base-fare and are able to choose to pay for only the additional products and services they want to receive.
Economic and Demographic Trends
We believe the Mexican airline industry has strong potential for growth, given the country’s young demographics, improving macroeconomic base and growing middle class, which will likely facilitate organic expansion of the airline sector. In addition, the national airline industry is relatively underpenetrated when compared to other countries of similar size and demographic characteristics. These elements combine at a time when the industry is under considerable attrition due in part from some of the legacy operators ceasing operations.
In terms of the macroeconomic environment, GDP growth in Mexico is expected to be 3.5% for both 2013 and 2014 according to the International Monetary Fund. This estimate is greater than the estimate for the United States by 1.5% in 2013 and 0.5% in 2014. This projected GDP growth is expected to result in the continuing growth trend of middle-income homes, having already grown from 12.0 million in 2000 to 15.2 million in 2010, according to information derived from the Mexican Association of Market Research and Public Opinion Agencies ( Asociación Mexicana de Agencias de Investigación de Mercado y Opinión Pública, A.C. ) and the National Statistics and Geography Institute ( Instituto Nacional de Estadística y Geografía ). As of 2010, approximately 39% of the Mexican population was under 20 years of age, which we believe benefits Volaris by providing a strong base of young, potential passengers in the future. This contrasts favorably with more mature aviation markets like the United States, where approximately 27% of the population is currently under 20 years of age. Additionally, the Mexican aviation market is currently underpenetrated, as evidenced by the number of trips per capita. On a global basis the World Bank estimates that there are, on average 0.38 annual trips per capita, whereas in Mexico the number is roughly one-third of that.
The Mexican low-cost airline industry competes with ground transportation alternatives, primarily long-distance bus companies. Given the limited passenger rail services in Mexico, travel by bus has traditionally been the only low-cost option for long-distance travel for a significant portion of the Mexican population. In 2012, bus companies transported over 2.8 billion passengers in Mexico, of which approximately 74.4 million were executive and luxury passenger segments, as measured in segments which include both long- (five hours or greater) and short-distance travel, according to the Mexican General Direction of Ground Transportation Authority. We believe that just a small shift of bus passengers to air travel would significantly increase the number of airline passengers. We believe that an increased shift in demand from bus to air travel in Mexico presents a significant opportunity as the macroeconomic environment improves and rising demographics take shape across the country. Furthermore, we believe that long-distance bus passengers will continue to shift to airplane travel when certain promotional fares are priced lower than bus fares for similar routes.
In recent years the Mexican government has made a substantial investment in developing Mexico’s airport infrastructure. In 1998, the Mexican government created a program to open Mexico’s airports to private investments. Three private airport operators (Grupo Aeroportuario del Pacífico, S.A.B. de C.V., Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and Aeropuertos del Sureste de Mexico, S.A.B. de C.V.) were incorporated and granted 50-year concessions to operate airports in Mexico. In the first stage of the privatization process, the Mexican government sold a minority stake to strategic partners. The privatization process culminated in mid-2006, when the Mexican government sold the balance of its holdings to the public via initial public offerings. The Mexican government still manages and operates the Mexico City International Airport (AICM), which it considers strategic, as well as other minor airports in the country. The 2007-2012 National Infrastructure Development Program (NIP) carried out by the previous administration invested a total of Ps.20.0 billion in the airport infrastructure sector from 2007 to 2011, according to the NIP’s Fifth Execution Report ( Quinto Informe de Ejecución ). According to the Mexican government, a new NIP will be announced
 
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during the first quarter of 2013 and is expected to include new investment plans for the sector from 2013 to 2018. We believe this strong foundational infrastructure, and continued investment and development will result in significant growth potential for the Mexican airline market.
Boeing estimates that the Latin American airline industry will have a higher growth rate than that of the global industry over the next 20 years, with an average passenger to economic growth ratio (RPK/GDP) of 1.6 times. As a result, a GDP growth of 4.1% in the next 20 years could imply an industry growth rate of around 38% by 2018 and over 90% by 2023.
The Mexican aviation industry has undergone a significant transformation due to the emergence of low-cost carriers, including us, Interjet and VivaAerobús, the exit of seven carriers (Aerocalifornia, Aladia, Alma, Aviacsa, Avolar, Azteca and Nova Air), and the cessation of operations of Grupo Mexicana when it entered reorganization ( concurso mercantil ) in August 2010. Changes in the Mexican airline competitive environment have resulted in an important increase in the domestic market load factor for the remaining carriers. While load factor in Mexico has historically lagged more than in developed markets, this positive trend will likely drive greater profitability among the remaining airlines in Mexico. This dramatic capacity reduction and its low-fare strategy allowed Volaris to increase load factor to 83% in 2012.
Market Environment
The airline industry is highly competitive. The principal competitive factors in the airline industry include fare pricing, total ticket price, flight schedules, aircraft type, passenger amenities, number of routes/destinations served from a city, customer service, safety record and reputation, code-sharing relationships, frequent flier programs and redemption opportunities. The airline industry is particularly susceptible to price discounting because once a flight is scheduled, airlines incur only nominal incremental costs to provide service to passengers occupying otherwise unsold seats. The expenses of a scheduled aircraft flight do not vary significantly with the number of passengers carried, and, as a result, a relatively small change in the number of passengers or in pricing can have a disproportionate effect on an airline’s operating and financial results. Price competition occurs on a market-by-market basis through price discounts, changes in pricing structures, fare matching, targeted promotions and frequent flier initiatives. Airlines typically use discount fares and other promotions to stimulate traffic during normally slower travel periods to generate cash flow and to maximize revenue per ASM. The prevalence of discount fares can be particularly acute when an airline has excess capacity and is under financial pressure to sell tickets.
In Mexico and the United States the scheduled passenger service market consists of three principal groups of travelers: business travelers, leisure travelers, and travelers visiting friends and relatives, or VFR. Leisure travelers and VFR travelers typically place most of their emphasis on lower fares, whereas business travelers typically place a high emphasis on flight frequency, scheduling flexibility, breadth of network and service enhancements, including loyalty programs and airport lounges, as well as price.
VFR and leisure passengers travel for a number of reasons, including social visits and vacation travel. We believe that VFR and leisure traffic are the most important components of the traffic in the markets we target and serve and are important contributors to our non-ticket revenue production. We believe that VFR and leisure passengers represent a significant percentage of our total passenger volume. As part of our route development strategy, we target markets that will likely appeal to VFR and leisure travels at price points that were previously not available. This strategy allows us to stimulate demand in new markets by encouraging travel by VFR and leisure travelers.
 
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Domestic passenger volumes have grown in Mexico by a CAGR of 4.0% and international volumes have grown by a CAGR of 1.5% from 2006 to 2012 according to the DGAC. The following table sets forth the historical passenger volumes on international and domestic routes in Mexico from 2006 to 2012:

Passenger Volumes
(millions of segment passengers)	  	2006	 	 	2007	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	2012	 	
International	  	 	27.4	  	 	 	27.2	  	 	 	27.9	  	 	 	24.2	  	 	 	25.8	  	 	 	26.8	  	 	 	28.5	  	
% growth	  	 	6.1	% 	 	 	(0.5	%) 	 	 	2.5	% 	 	 	(13.2	%) 	 	 	6.3	% 	 	 	4.1	% 	 	 	6.5	% 	
Domestic	  	 	22.2	  	 	 	27.4	  	 	 	27.6	  	 	 	24.4	  	 	 	24.5	  	 	 	25.5	  	 	 	28.1	  	
% growth	  	 	11.8	% 	 	 	23.6	% 	 	 	0.9	% 	 	 	(11.6	%) 	 	 	0.3	% 	 	 	3.9	% 	 	 	10.3	% 	
Total	  	 	49.5	  	 	 	54.6	  	 	 	55.6	  	 	 	48.7	  	 	 	50.3	  	 	 	52.3	  	 	 	56.6	  	
% growth	  	 	8.6	% 	 	 	10.3	% 	 	 	1.7	% 	 	 	(12.4	%) 	 	 	3.3	% 	 	 	4.0	% 	 	 	8.4	% 	
 
Source: DGAC
Our international growth strategy has focused on targeting markets in the United States with large Mexican and Mexican-American communities in order to stimulate VFR demand and leisure traffic in those markets. Approximately 68% of international passengers in Mexico fly to the United States, making the United States the largest international destination for air passengers in Mexico. All of the major U.S. legacy carriers fly to and from Mexico, but at a higher cost than low-cost carriers. We have learned that many Mexicans in the United States purchase airline tickets for family members living in Mexico to fly to the United States to visit. For this reason, we focus our international routes on U.S. cities with significant Mexican and Mexican-American communities. These cities include Chicago, Los Angeles, San Diego and San Francisco-Oakland, with Mexicans and Mexican-Americans in each of them amounting to 1.5 million, 4.6 million, 0.9 million and 0.7 million, respectively, according to PEW Research Hispanic Center based on U.S. Census Bureau data.
In December 2012, the Mexican low-cost and ULCCs (Interjet, VivaAerobus and Volaris) together maintained 60.3% of the domestic market, based on passenger flight segments, according to the DGAC. The following table sets forth the historical market shares on domestic routes, based on passenger flight segments, of each major market participant for December 2012 and each of the years indicated:

Market Share (1)
Domestic	  	2006	 	 	2007	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	2012	 	 	December
2012	 	
Volaris (2)	  	 	4.04	% 	 	 	7.94	% 	 	 	12.16	% 	 	 	12.82	% 	 	 	14.79	% 	 	 	18.05	% 	 	 	20.48	% 	 	 	23.30	% 	
Grupo Aeroméxico	  	 	32.91	% 	 	 	28.58	% 	 	 	28.01	% 	 	 	32.28	% 	 	 	36.20	% 	 	 	40.10	% 	 	 	37.73	% 	 	 	34.59	% 	
Grupo Mexicana (3)	  	 	26.99	% 	 	 	24.07	% 	 	 	24.05	% 	 	 	27.16	% 	 	 	18.55	% 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Interjet (4)	  	 	5.65	% 	 	 	7.04	% 	 	 	10.83	% 	 	 	12.71	% 	 	 	16.35	% 	 	 	24.90	% 	 	 	23.92	% 	 	 	22.90	% 	
VivaAerobus (5)	  	 	0.30	% 	 	 	4.44	% 	 	 	4.83	% 	 	 	5.83	% 	 	 	8.85	% 	 	 	11.54	% 	 	 	12.53	% 	 	 	14.08	% 	
 
Source: DGAC
(1)	Market share is obtained by dividing each airline’s number of passengers by the total number of passengers for all airlines for the period indicated.	
(2)	Began operations in March 2006.	
(3)	Ceased operation in August 2010.	
(4)	Began operations in December 2005.	
(5)	Began operations in November 2006.	
The airline industry in Mexico has recently seen sharp attrition, with the exit of eight airlines since 2007, including the cessation of operations of Grupo Mexicana when it entered reorganization ( concurso mercantil ) in August 2010. Prior to ceasing operations, Grupo Mexicana was one of the largest operators in the Mexican market. Grupo Mexicana’s cessation of operations has created opportunities for its competitors to gain market share both in Mexico and the United States. In late 2010 and 2011, we decided to take advantage of the opportunity to start operating 15 routes that had been primarily operated by Grupo Mexicana. This allowed us to,
 
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among other things, obtain access to six extra bi-lateral routes from the Mexico City international airport to the United States that were otherwise unavailable. This allowed us to further expand our international product offering in a very short timeframe.
The following table sets forth the historical market shares on international routes between Mexico, the United States and other countries, based on passenger flight segments, of key Mexican industry participants for December 2012 and each of the years indicated:

Market Share (1)
International	  	2006	 	 	2007	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	2012	 	 	December
2012	 	
Volaris (2)	  	 	—	 	 	 	—	 	 	 	—	 	 	 	2.92	% 	 	 	9.38	% 	 	 	21.95	% 	 	 	21.91	% 	 	 	22.73	% 	
Grupo Aeroméxico	  	 	31.68	% 	 	 	34.05	% 	 	 	31.73	% 	 	 	31.06	% 	 	 	39.83	% 	 	 	74.87	% 	 	 	66.96	% 	 	 	61.57	% 	
Grupo Mexicana (3)	  	 	64.56	% 	 	 	63.85	% 	 	 	66.08	% 	 	 	65.36	% 	 	 	49.94	% 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Interjet (4)	  	 	—  	 	 	 	0.10	% 	 	 	0.28	% 	 	 	—  	 	 	 	—  	 	 	 	1.56	% 	 	 	8.95	% 	 	 	14.06	% 	
VivaAerobus (5)	  	 	—  	 	 	 	—  	 	 	 	0.85	% 	 	 	0.43	% 	 	 	0.84	% 	 	 	1.60	% 	 	 	2.18	% 	 	 	1.64	% 	
 
Source: DGAC
(1)	Market share is obtained by dividing each Mexican airline’s number of passengers by the total number of passengers for all Mexican airlines for the period indicated.	
(2)	Began operations in March 2006.	
(3)	Ceased operation in August 2010.	
(4)	Began operations in December 2005.	
(5)	Began operations in November 2006.	
We have been able to grow our international market share substantially over the past four years even with significant competition from leading U.S. carriers including United, American, U.S. Airways, Alaska Airways, and Delta. As of December 2012, we were the seventh largest international carrier in terms of passenger flight segments out of all airlines flying internationally to and from Mexico. We have been able to grow our international market share substantially due to the Grupo Méxicana reorganization and our strategy to target and stimulate markets in the United States with large Mexican and Mexican-American communities.
In terms of both domestic and international ticketed passengers, our total passenger volume increased at a CAGR of 41.5% from 2006 to 2012, with approximately 0.9 million booked passengers in 2006 and 7.4 million booked passengers in 2012. We attribute the rapid growth of our business to the favorable economic environment in Mexico, our dedicated ULCC strategy targeted at VFR and leisure travelers, our strong focus on delivering high quality customer service, and our tremendous brand recognition among domestic and international travelers in Mexico and the United States.
 
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 BUSINESS
Overview
We are a ULCC based in Mexico and we utilize our ULCC business model and efficient operations to offer low base fares and to stimulate demand while aiming to provide high quality customer service. We target passengers who are VFR, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States. Our unbundled pricing strategy allows us to provide low base fares and enables our passengers to select and pay for a range of optional products and services for additional fees. We had net income of Ps.203.3 million (U.S.$16.5 million) in 2012 and net loss of Ps.84.9 million (U.S.$6.9 million) in the three months ended March 31, 2013. In addition, our revenues were Ps.11,686.4 million (U.S.$945.9 million) in 2012 and Ps.3,061.6 million (U.S.$247.8 million) in the three months ended March 31, 2013.
Since we began operations in 2006, we have increased our routes from five to 80 and grown our cost-efficient Airbus A320 family aircraft from four to 43 as of March 31, 2013. We currently operate up to 220 daily flight segments on routes that connect 30 cities in Mexico and ten cities in the United States. We have substantial market presence in the top five airports in Mexico, based on number of passengers, comprising Cancún, Guadalajara, Mexico City, Monterrey and Tijuana. The ten cities we currently serve are home to some of the most populous Mexican communities in the United States based on data from the Pew Hispanic Research Center.
We are the lowest cost carrier based on CASM among the other Latin American publicly traded airlines. In 2012, our CASM was Ps.1.223 (U.S.$0.099), compared to an average CASM of U.S.$0.140 for the other Latin American publicly traded airlines. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air, American, Delta and United, which had an average CASM of U.S.$0.145 in 2012. With our ULCC business model, we have grown significantly while maintaining a low CASM over the last five years. We have achieved this through our efficient and uniform fleet, high asset utilization, our emphasis on direct sales and distribution and our variable, performance-based compensation structure. We have a relentless focus on low costs as part of our organizational culture, and we believe that we can further lower our CASM by deploying additional sharklet technology equipped Airbus A320 aircraft and leveraging our existing infrastructure to drive economies of scale. We believe that further reductions to our CASM will allow us to continue to lower base fares, stimulate market demand and increase non-ticket revenue opportunities.
Our ULCC business model and low CASM allow us to compete principally through offering low base fares to stimulate demand. We use our yield management system to set our fares in an effort to achieve appropriate yields and load factors on each route we operate. We use promotional fares to stimulate demand and our base fares are priced to compete with long-distance bus fares in Mexico. During 2012, our average base fare was Ps.1,374 (U.S.$111) and we regularly offer promotional base fares of Ps.499 (U.S.$40) or less. Since May 2012, we have unbundled certain components of our air travel service as part of a strategy to enable our passengers to select and pay for the products and services they want to use. This unbundling strategy has allowed us to significantly grow our non-ticket and total revenue. We plan to continue to use low base fares to stimulate additional passenger demand, shift bus passengers to air travel and increase our load factor. In 2012, our average load factor was 82.9%, compared to an average load factor of 76.0% for the other Latin American publicly traded airlines and 83.6% for our U.S.-based publicly traded target market competitors. Higher load factors help us generate additional non-ticket and total revenue, which in turn, allow us to further lower base fares and stimulate new demand.
In addition to low fares, we also aim to deliver a high quality flying experience to our passengers. We strive to deliver on-time performance to our customers, with an 83.6% on-time performance rate in 2012. We believe that we have developed strong brand recognition due to our focus on delivering good value and a positive traveling experience to our customers. We believe that our corporate culture of positive “customer relationship management” has also been a key element of our success.
 
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Our Strengths
We were established and are operated to achieve the following goals: (i) to create a profitable and sustainable business model; (ii) to successfully compete by creating structural advantages over other carriers serving Mexico through our ULCC business model; (iii) to provide affordable air travel with a high quality experience for our customers; and (iv) to create a dynamic, cost conscious and entrepreneurial working culture for our employees. We believe that our strengths are:
Lowest Cost Structure . We believe that in 2012 we had the lowest cost structure of any of the other Latin American publicly traded airlines, with CASM of Ps.1.223 (U.S.$0.099), compared to Avianca-TACA at U.S.$0.179, Copa at U.S.$0.111, Gol at U.S.$0.136, Grupo Aeroméxico at U.S.$0.157 and LATAM at U.S.$0.117. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air at U.S.$0.131, American at U.S.$0.149, Delta at U.S.$0.150 and United at U.S.$0.149 in 2012. We achieve our low operating costs in large part due to: 
 
 	•	 	Efficient and Uniform Fleet . We operate a uniform and efficient fleet of Airbus A320 family aircraft, which is the youngest fleet in Mexico, with an average aircraft age of 4.1 years as of December 31, 2012, according to information from the DGAC.	
 
 	•	 	High Asset Utilization . Our fleet has a uniform, high density seat configuration and we had one of the highest worldwide average aircraft utilization rates of 12.4 block hours per day in 2012.	
 
 	•	 	Direct Sales Distribution . We encourage our customers to purchase tickets via our website, call center or airport service desks as these distribution channels are the lowest cost to us. We sell 87% of our tickets through these channels. We do not use GDS.	
 
 	•	 	Variable, Performance-Based Compensation Structure . We compensate our employees on the basis of their performance, and we reward them for the contribution they make to the success of the company rather than their seniority.	
Ancillary Revenue Generation . We have been able to grow our non-ticket revenue by allowing our passengers to choose what additional products and services they purchase and use. Thanks to our “ Tú Decides ” (“You Decide”) strategy, we have increased average non-ticket revenue per passenger flight segment from approximately U.S.$7 in 2009 to U.S.$15 in 2012 by, among other things:
 
 	•	 	charging for excess baggage (over the 25 kilograms of free luggage required by Mexican regulations);	
 
 	•	 	utilizing our excess aircraft belly space to transport cargo;	
 
 	•	 	passing through all distribution-related expenses;	
 
 	•	 	charging for advance seat selection, extra legroom, and carriage of sports equipment;	
 
 	•	 	consistently enforcing ticketing policies, including change fees;	
 
 	•	 	generating subscription fees from our ultra-low-fare subscription service, V-Club;	
 
 	•	 	deriving brand-based fees from proprietary services, such as our Volaris affinity credit card program;	
 
 	•	 	selling itinerary attachments, such as hotel and car rental reservations and airport parking, and making available trip interruption insurance commercialized by third parties, through our website; and	
 
 	•	 	selling onboard advertising.	
Core Focus on VFR, Cost-conscious Business People and Leisure Travelers in High Growth Markets . We primarily target VFR, cost-conscious business people and leisure travelers in Mexico and the United States. We believe these people represent the highest potential for growth in our target markets. By offering low promotional fares, we stimulate demand for VFR and leisure travel, and attract new customers, including those who previously may have only traveled by bus. We use our yield management system to set prices based on the 
 
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time of booking. We regularly manage yield and load factor, including through targeted promotional fares that can be as low as Ps.499 (U.S.$40). We have found that many Mexicans and Mexican Americans living in the United States buy airline tickets for themselves and their family members in Mexico. In addition, we have over 15,000 points of payment throughout Mexico and the United States that allow travelers, particularly in Mexico, who do not have credit cards, or are reluctant to provide credit card information over the web or call center, to reserve seats using the web or call center and pay with cash the next day. Furthermore, we offer night flights, which appeal to our domestic and international customer base that seek to save on lodging expenses.
Disciplined Approach to Market and Route Selection . We select target markets and routes where we believe we can achieve profitability within a reasonable timeframe, and we only continue operating on routes where we can achieve and maintain our target level of profitability. When developing our route network, we focus on gaining market share on routes that have been underserved or are served primarily by higher cost airlines where we have a competitive cost advantage. We thereby stimulate new demand with low base fares and attempt to shift market share from incumbent operators. We have developed a profitable route network, on an annual basis based on the results of our most recently completed fiscal year, and built a leading market share in several of our markets. As of December 31, 2012, we had more than 50% passenger market share in 48 of our 71 routes, a 75% share in the Tijuana Airport and a 51% share in the North Pacific corridor, which consists of 12 airports in northwestern Mexico, according to DGAC. As of December 31, 2012, we faced no competition from any other carrier on 28% of our domestic seat capacity. We entered the U.S. market in July 2009 and by 2012 derived 24% of our passenger revenues from our U.S. routes and attributed 26% of our ASMs to U.S. routes. 
Market Leading Efficiency and Performance . We believe we are one of the most efficient airline carriers in Latin America. In 2012, we achieved an average passenger load factor of 82.9% and an average aircraft utilization rate of 12.4 block hours per day with a standard turnaround time between flights of approximately 35 minutes. For our fleet type, our average aircraft utilization rate of 12.4 block hours per day was among the highest worldwide and was 46% higher than the industry average of 8.5 block hours per day for all Airbus A319 aircraft and 36% higher than the 9.1 block hours per day for all Airbus A320 aircraft, according to information for the year ended December 31, 2012 available from Airbus. The high-density, single-class seating configurations on our aircraft allow us to increase ASMs and reduce fixed costs per seat as compared to a lower density configuration flown by certain of our competitors. In addition, we strive for market-leading operational performance, with an 83.6% on-time performance rate, 99.7% flight completion rate and a mishandled baggage rate of only 1.92 bags per 1,000 passengers in 2012.
Brand Recognition with a Fast Growing Fan Base . We believe that we have developed strong brand recognition due to our focus on delivering good value and a positive traveling experience to our customers. According to a 2011 study made with data obtained from Facebook and published in the magazine Merca 2.0 ® , we have one of the fastest growing fan bases and number of followers on social media sites in Mexico. As of May 13, 2013, we had approximately 566,620 total followers on Facebook and 348,800 total followers on Twitter, both of which we primarily use for marketing and promotion. In addition, according to a study of the most socially devoted brands and industries on Facebook by Socialbakers, we ranked first among airlines for customer care in social media in 2012. Our social media reach has been a very low cost, yet effective, marketing tool for us and has afforded us the capability to develop highly effective, targeted marketing promotions on a very short notice. We have also established various programs to make air travel more inviting for first time travelers and other passengers who may desire extra services, such as an unaccompanied senior program. 
Balance Sheet Positioned for Growth . We have a low level of financial debt, since we have principally financed our operations through equity and operating cash flows and we have only used operating leases for our aircraft. Proceeds from the global offering will also further strengthen our balance sheet. We believe that our strong financial position enables us to prudently finance the emerging growth opportunities in our markets and to defend our existing network from our competitors.
Strong Company Culture, Experienced Management Team and Principal Shareholders . We have developed a strong company culture among our employees that is focused on safety, meritocracy, efficiency and
 
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profitability, with a significant component of performance-based variable compensation. From 2009 through 2013, we were named a “Great Place to Work” by the Great Place to Work Institute in Mexico. Our management team, the majority of which has been with us since our inception, has been assembled with experienced executives in their respective fields, including in the aviation, sales and marketing, finance or IT industries in Latin America. In addition, our principal shareholders have extensive prior experience in funding, establishing and leading airline carriers around the world. Their expertise has helped us develop our ULCC business model and allowed us to benefit from their procurement power and relationships with key vendors.
Our Growth Strategy
Our goal is to continue to grow profitability on an annual basis and maintain our leadership position in the Mexican aviation market by operating our ULCC business model and focusing on VFR, cost-conscious business people and leisure travelers. The key elements of our growth strategy include:
Remain the Low Cost Carrier of Choice . We believe that by deploying additional cost-efficient Airbus A320 aircraft with higher seat density, spreading our low fixed cost infrastructure over a larger scale of operations, outsourcing operating functions and keeping sales and marketing overhead low, we can continue to improve operating efficiencies while maintaining low costs. Our ULCC business model enables us to operate profitably, on an annual basis based on the results of our most recently completed fiscal year, at low fare levels, and we intend to continue to maintain low fares to stimulate demand. We also make flying easy and strive to remain the low-cost carrier of choice for our existing and new customers as we continue to focus on providing an affordable and high quality travel experience to our customers across our expanding operations in Mexico and the United States.
Grow Non-ticket Revenue while Maintaining Low Base Fare to Stimulate Demand . We intend to increase our non-ticket revenues by further unbundling our fare structure and by offering our passengers new and innovative products and services. Through our multiple points of interaction with our customers during each stage of their travel, from ticket purchase through flight and post-trip, we have the opportunity to offer third party products, such as hotel rooms, car rentals and trip interruption insurance, on which we receive commissions. In addition, we plan to start selling in-flight products and to introduce and expand upon products and services that are unrelated to passenger travel. In June 2012, we started a membership based ultra-low-fare subscription service called V-Club which had approximately 35,200 members as of December 31, 2012. We intend to generate additional fees from proprietary brand-based services such as the Volaris affinity card which was introduced in January 2013. We also continue to aggressively expand the cargo transportation services we provide on our aircraft. As we broaden our ancillary products and services and increase our non-ticket revenue, we believe that we will be able to further lower base fares and continue to stimulate demand.
Gain Additional Market Share by Stimulating Demand in our Existing Markets . We plan to continue to grow our existing markets by adding routes that connect cities in which we currently have operations and by adding capacity on existing routes where we believe we can continue to stimulate demand. We also intend to continue to aggressively target long-distance bus passengers who we believe may shift to airplane travel. We set certain promotional fares at prices lower than bus fares for similar routes, and we believe this will encourage bus travelers to switch to air travel.
Continue our Disciplined Fleet Growth . We have firm commitments for 49 sharklet technology equipped Airbus A320 aircraft that will be delivered over the next eight years, including 30 of the next generation Airbus A320 NEO. We have obtained committed financing for the pre-delivery payments for the deliveries through December 2014. We also plan to grow from 17 Airbus A320 aircraft in 2012 to all Airbus A320 in 2020, each configured with 174 passenger seats, resulting in a 21% increase in the number of seats per aircraft as compared to the smaller A319 with 144 passenger seats. Consistent with our ULCC model, our new Airbus A320 aircraft offers 16% more passenger seats than Interjet, one of our competitors that offers 150 passenger seats per Airbus A320 aircraft. Our contracts provide that new aircraft will be equipped with fuel-saving sharklet technology and eventually NEOs, and will replace certain aircraft that are going off-lease. We believe that a disciplined ramp-up 
 
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in young and efficient aircraft as our market share expands reduces the risk of over extension and our exposure to market conditions. We intend to maintain our commitment to a single fleet type because we believe it is the most efficient option for our markets and operations.
Grow Passenger Volume by Profitably Establishing New Routes . We believe our focus on low fares and customer service will stimulate growth in overpriced, underserved and inefficient new markets. We will continue our disciplined approach to domestic and international market entry by using our rigorous selection process where we identify and survey possible target markets that have the potential to be profitable within our business model. For example, in February 2013, we added two new routes from Mexico City to Mérida and Tuxla Gutiérrez in response to strong market demographics and opportunities for market stimulation. As part of our continuous monitoring of routes and markets for profitability, we have a proven track record of withdrawing routes that do not meet our profitability expectations. For our future growth opportunities, we have identified approximately 180 routes within Mexico serving markets in excess of 250,000 inhabitants and other leisure destinations, and that have stage lengths of at least 170 miles, and approximately 150 routes internationally that have stage lengths of at least 200 miles.
Our History
We were founded on October 27, 2005 under the name Controladora Vuela Compañía de Aviación, S.A. de C.V. by Blue Sky Investments, S.à r.l., Discovery Air Investments, L.P., Corporativo Vasco de Quiroga, S.A. de C.V. and Sinca Inbursa, S.A. de C.V., Sociedad de Inversión de Capitales.
In July 2010, we underwent a change in our ownership with the incorporation of Mexican investors, certain investment funds managed by Discovery Americas (including Discovery Air), Blue Sky Investments and Indigo as new equity shareholders with expertise in the aviation industry.
On July 16, 2010, we became a sociedad anónima promotora de inversión de capital variable , or variable capital investment promotion stock corporation. In June 2013, we became a sociedad anónima bursátil de capital variable, or variable capital public stock corporation. See “Description of the Capital Stock—Mexican Securities Market Law” for a description of the differences between these two forms of legal entities.
Our Organizational Structure
The following is an organizational chart showing Volaris and its subsidiaries:

Volaris Opco is our airline operating subsidiary. Comercializadora is our operating subsidiary that is primarily engaged in marketing, advertising and other commercial matters. Servicios Corporativos and Servicios Administrativos employ our non-unionized and unionized employees, respectively.
In December 2012, we underwent a reorganization pursuant to which all shareholders who previously held shares of Volaris Opco became direct shareholders of Volaris by transferring their shares of Volaris Opco to Volaris, with the exception of 2.05% of Volaris Opco shares held in a Mexican trust that is beneficially owned by
 
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Volaris. Once the trust agreement is executed shares of Volaris Opco held in this Mexican trust may be exchanged for Series A shares of Volaris pursuant to a call option that will expire in 2018. If the call option is not exercised by the expiration date, then the shares will be automatically converted on such date. As of December 31, 2012, Volaris had not signed the trust agreement. See “Principal and Selling Shareholders.”
Our Business Model
Our business model is based on that of other ULCCs operating elsewhere in the world, such as Allegiant and Spirit in the United States, Ryanair in Europe and AirAsia in Asia. We utilize our ULCC business model and efficient operations to offer low base fares and to stimulate demand while aiming to provide high quality customer service. Our unbundled pricing strategy allows us to provide low base fares and enables our passengers to select and pay for a range of optional products and services for additional fees. We target VFR, cost-conscious business people and leisure travelers in Mexico and to select destinations in the United States.
Since May 2012, we have unbundled certain components of our air travel service as part of a strategy to enable our passengers to select and pay for the products and services they want to use. This unbundling strategy has allowed us to significantly grow our non-ticket and total revenue. We plan to continue to use low base fares to stimulate additional passenger demand, shift bus passengers to air travel and increase our load factor. We believe a small percentage shift of bus passengers to air travel would dramatically increase the number of airline passengers. Higher load factors help us generate additional non-ticket and total revenue, which in turn, allow us to further lower base fares and stimulate new demand.
We have a relentless focus on low costs as part of our organizational culture. We are the lowest cost airline carrier in Latin America, based on CASM, compared to the other Latin American publicly traded companies. We are also the lowest cost carrier in our target markets in Mexico and the United States, compared to our target market competitors, according to public information available from such competitors. We are able to keep our costs low due to our efficient and uniform fleet, high asset utilization, our emphasis on direct sales and distribution and our variable, performance-based compensation structure.
Our Operations
Passenger Revenue
Passenger revenues accounted for approximately Ps.10,177 million, or 87% of our total operating revenues in 2012. VFR traffic makes up the largest component of our customers, and we believe our VFR customers are the most cost-conscious and time/schedule flexible of all of our travelers. Our VFR market tends to complement our leisure-driven market from both a seasonal and week-day perspective. VFR traffic is strongest during the summer, Christmas and New Year season, followed by Easter. Leisure traffic makes up the second largest component of our customers. This segment responds well to demand stimulation based on low fares. Leisure traffic tends to coincide with holidays, school schedules and cultural events with peaks in July and August and again in December and January. Cost-conscious business people make up the third largest component of our customers. Although business travel can be cyclical with the economy, this segment tends to travel steadily throughout the year regardless of the season. We do not operate a frequent flier program.
Non-Ticket Revenue
Non-ticket revenues include fees relating to transportation of cargo, charter flight services, excess baggage, advance seat selection, extra legroom, carriage of sports equipment and pets, ticket changes, V-Club subscription, the Volaris affinity credit card launched in 2013 and onboard advertising. We generate fees from our subscription service V-Club by charging an individual annual membership of U.S.$52 or a group annual membership of U.S.$52 for the head member and U.S.$31 for each additional group member. V-Club subscriptions accounted for approximately 1.1% of our non-ticket revenues in 2012. Members of the V-Club have exclusive access to the lowest fares and promotions available. Members have access to an Internet booking
 
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engine similar to our website that displays last minute fares and discounted fares. We generate fees from our affinity credit card by charging fees on all purchases made with the credit card. Fees from the Volaris affinity credit card accounted for approximately 0.2% of our non-ticket revenues as of March 31, 2013. As of March 31, 2013, we had approximately 43,000 V-Club members and 19,000 affinity credit card holders. The typical fees for advance seat selection, extra legroom, carriage of sports equipment and pets and ticket changes are approximately U.S.$3 to U.S.$6, U.S.$13 to U.S.$16, U.S.$86 to U.S.$99 and U.S.$45 to U.S.$65, respectively and we generate such fees in Mexico and in the United States. We also make available trip insurance commercialized by third parties through our website. In 2012, we derived approximately Ps.1,510 million, or 13% of our total operating revenues from non-ticket revenues.
We make efficient use of extra capacity in our aircraft by carrying cargo on our passenger flights. We offer cargo transportation services on all domestic routes. We outsourced all ground cargo handling services, including storage, to several third-party providers and the related cost of such services are paid by our cargo clients. We offer competitive rates and our service includes reception, check-in, shipping and delivery to the final destination.
In addition, we offer charter services, which generally account for one flight a month, but do not represent a significant part of our total operating revenues. In 2012, we had 12 chartered flights.
Route Network
We currently serve 40 airports throughout Mexico and the United States and operate up to 220 daily segments on routes that connect 30 cities in Mexico, including highly demanded destinations such as Cancún, Guadalajara, Mexico City, Monterrey and Tijuana, and ten cities in the United States: Chicago, Denver, Fresno, Las Vegas, Los Angeles, Oakland, Orlando, Sacramento, San Diego and San Jose. Our route network is designed to provide service within Mexico and between Mexico and cities in the United States with large Mexican and Mexican American communities, primarily in California. Many of our routes operate through Tijuana, which account for approximately 43% of our current capacity measured by ASMs. Routes through Mexico City, Guadalajara and Cancún make up a large portion of the balance of our routes, accounting for 38%, 34% and 12% of our ASM capacity, respectively. We have 75%, 16%, 38% and 30% of the market for our routes operating through Tijuana, Mexico City, Guadalajara and Cancún, respectively.
As part of our point-to-point strategy and route network, we generally offer direct flights between cities with high traffic volumes. We believe this model of scheduling allows us to more frequently serve a greater number of cities and to generate higher load factors, enabling us to increase aircraft utilization and providing us with greater flexibility in our scheduling options.
We schedule a morning bank and an evening bank of flights, with flights timed to arrive at each destination and depart a short time later in order to minimize turnaround times. Many of our evening flights are intended to provide red-eye travel for the longer routes we cover and to appeal to customers who want to save on lodging expenses. Our day flights allow us to maximize our fleet utilization and utilize the employees at our airports efficiently.
 
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The map below sets forth the destinations we currently serve.

Sales, Distribution, Marketing and Advertising
Sales and Distribution . We currently sell our product through four primary distribution channels: our website, our call center, airports and third parties such as travel agents. We use our website, www.volaris.com (the contents of which are not a part of, and are not incorporated by reference into, this Prospectus), as the primary platform for ticket sales. After our website, our distribution sources are our outsourced call center, third-party travel agents and airport counter sales. The following table sets forth the approximate percentage of our ticket sales in 2012 per distribution source and applicable fees:

Distribution Source	  	% of tickets
Sold in  2012	 	 	Fee in  pesos (1)	 	
Website	  	 	58	% 	 	 	—  	 	
Call center	  	 	23	% 	 	 	68	  	
Third-party travel agents	  	 	13	% 	 	 	68	  	
Airport counters	  	 	6	% 	 	 	68	  	
 
Source: Volaris
(1)	Standard fee charged per customer.	
Sales through our website represent our lowest cost distribution channel, and it is the channel through which we offer our lowest fares. For all other channels, we pass the additional costs associated with them through to our customers.
Our passengers may pay for their tickets at the time of booking on our website or through our call center by credit or debit card, or within 24 hours in cash at one of the various points of payment, located at several different businesses we have made available. Approximately 80% of our sales are paid by credit and debit card and 20% by money orders and cash. We have entered into agreements with Telecomunicaciones de México, Cadena Comercial OXXO, S.A. de C.V., Sanborn Hermanos S.A., Sears Roebuck de México, S.A. de C.V., and MoneyGram Payment Services, Inc. to provide our customers with the possibility to pay in cash for their tickets
 
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at over 15,000 points of payment. These agreements are generally entered into for one- or two-year periods, are subject to termination upon short notice and are renewable by mutual agreement. In 2012, we expensed an aggregate of Ps.282.5 million in commissions, the cost of which was transferred to the customers using this service.
We have entered into an agreement with Atento Mexicana, S.A. de C.V., or Atento, to outsource our call center. Pursuant to this agreement, Atento receives calls from our customers to book flights and provides our customers with information about our fares, schedules and availability. Atento also makes calls to our customers at our request and provides us with reports. As with our online bookings, purchases through our call center can be paid for at the time of booking by credit or debit card, or within 24 hours in cash at one of our points of payment. The agreement with Atento expires in December 2013 and is renewable with 60-day prior notice.
We have signed agreements with Sabre Inc. and Navitaire LLC, major suppliers of IT solutions in the global airline industry. Through these agreements, we are provided with technology systems that allow us to conduct our operations.
Pursuant to our master agreement with Sabre Inc. and a work order thereunder, Sabre Inc. provides us with hosted reservations services, which includes customer management tools, such as reservations, product merchandising and inventory, ticketing, check-in, internet booking and self-service check-in. In addition, Sabre Inc. provides us with consulting and technical services, such as calibration, connectivity, customization, training and implementation support. The work order related to the hosted reservations services will terminate on November 30, 2013. In addition, we may terminate the master agreement with prior notice subject to certain conditions.
Pursuant to our agreement with Navitaire LLC, Navitaire LLC will provide us with hosted reservation services, including reservations, revenue management, revenue accounting, and operations management and recovery, as well as certain services related thereto. The services under this agreement are expected to be implemented no later than September 30, 2013. This agreement has an initial term of ten years and certain additional renewal periods, unless it is terminated with prior notice subject to certain conditions.
The foregoing description of the terms of the agreements with Sabre Inc. and Navitaire LLC is intended as a summary only and is qualified in its entirety by reference to the copies thereto filed as exhibits to the registration statement which includes this prospectus.
Marketing and Advertising . Our marketing and advertising activities include the use of the Internet, television, radio and billboards. We focus on direct consumer marketing for our markets, by offering promotional fares and maintaining a strong presence in social media, such as Facebook, Twitter, Google+ and YouTube. As of May 13, 2013, we had approximately 566,620 total followers on Facebook and 348,800 total followers on Twitter, which we primarily use for marketing and promotion.
We directly reach our customers by holding promotional events that build brand recognition, such as concerts on our aircraft and on-board runway shows of new crew uniforms. We also advertise on billboards and in venues that our core consumers frequently attend, including concerts, school campuses, and bus stations, among others. We have Internet promotions directed at current customers, who can register on our website. In addition, we send emails with promotions and advertisement to approximately 700,000 e-mail addresses on a weekly basis. We also have special promotions like “your name on a plane,” where we place the first name of the winning customer on the fuselage of an aircraft for a one year period. We strive to have the highest marketing impact at the lowest cost.
In June 2012, we started a membership based ultra-low-fare subscription service called V-Club which had approximately 35,200 members as of December 31, 2012. The V-Club is an annual subscription based service that allows members exclusive access to the lowest fares on offer and discounted baggage fees. V-Club members pay a small annual fee for first access to offerings of low fares. The membership provides benefits such as guaranteed exclusive, member-only fare sales (at least once every six weeks) and private offers on hotels, rental cars and other travel necessities.
 
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In January 2013, we launched the Volaris affinity credit card program. This credit card provides holders with cash back on Volaris-related purchases, grants priority boarding and ten extra kilograms of luggage on our flights, and access to the Visa lounge in Mexico City’s international airport. We receive a fee from all purchases made with the card.
Pricing and Yield Management
Our emphasis on keeping our operating costs low has allowed us to set low base fares and ancillary revenues while achieving and increasing profitability. We have designed our fare structure to balance our load factors and yields in a way that we believe will generate the highest revenue per block hour on our flights. Most of our seats are sold in the low and mid fare ranges. With the exception of special offers and promotions, we do not have advance purchase restrictions, minimum stays or any other fare restrictions, such as required Saturday night stays. For some of our flights, we set very low discounted base fares based upon the fares charged by bus lines for travel to the same destinations in order to increase our customer base by adding customers who have previously used other forms of transportation.
We have one single base fare type which is a basic, “unbundled fare” that only includes 15 kilograms of checked luggage and 10 kilograms of cabin luggage. Our fares are non-refundable and passengers changing their travel plans on our flights are subject to flight alteration fees. In addition to our base fare, customers can chose a variety of additional products and services to customize their travel experience. These range from pre-selecting a higher baggage allowance, to an on-time performance guarantee. Additional products and services can be purchased at different points in time, including at the time of purchase, before the flight and at the airport. We increase the prices of these products and services the closer the customer purchases them to the departure date.
We use yield management in an effort to maximize revenues per flight, which is also linked to our route and schedule planning and our sales and distribution methods. Yield management is an integrated set of business procedures and mathematical models that provide us with the ability to understand markets, anticipate customer behavior and respond quickly to opportunities. The number of seats we offer at each fare class in each market is based on a continuous process of analysis and forecasting. Past booking history, seasonality, the effects of competition and current booking trends are used to forecast demand. Current fares and knowledge of upcoming events at destinations we serve that we believe will affect traffic volumes are also included in our forecasting model to arrive at an optimal seat allocation for our fares on specific routes. We use a combination of approaches, taking into account yields and flight load factors, depending on the characteristics of the markets served, to design a strategy to achieve the best possible TRASM by balancing the average fare charged and ancillary services sold against the corresponding effect on our load factors. Since 2009, we have used Sabre Inc.’s AirVision Suite to implement our yield management system, a sophisticated revenue optimization tool.
Customer Service
We are committed to providing our customers with value for their money and on-time and reliable performance. We believe that our low fares initially attract customers and that our exceptional service strengthens customer loyalty and enhances our brand recognition through word-of-mouth as our customers tell others about their experience.
We hire employees who we believe will treat customers in a courteous and friendly manner, and emphasize customer service during their training and as a general part of our company culture. We call our employees ambassadors. We also focus on other details that can improve the travel experience, including on-line check-in and seat assignment options, e-ticket travel, single-class seating, modern aircraft interiors and discounted shuttle services between certain airports and drop-off zones on certain routes. We provide personalized in-cabin support for customers who need it and the option of special assistance for unaccompanied minors and seniors. We believe our customer relationship management has been a key element of our success.
 
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We are committed to compensating our employees on the basis of their performance, rewarding them for the contribution that they make to our success instead of seniority. We base part of our employee compensation on customer service, which is measured through a net promoter score obtained from customer interviews. We currently conduct approximately 765 monthly interviews; as we expand our operations, this number will likely increase.
We understand that efficient and punctual operations are important to our customers, and we intend to continue to excel in operational performance. The following table sets forth certain performance-related customer service measures for the years ended 2010, 2011 and 2012:

 	  	2010	 	 	2011	 	 	2012	 	
On-time performance (1)	  	 	90.0	% 	 	 	82.2	% 	 	 	83.6	% 	
Completion factor (2)	  	 	99.7	% 	 	 	99.7	% 	 	 	99.7	% 	
Mishandled baggage (3)	  	 	1.12	  	 	 	1.24	  	 	 	1.92	  	
 
Source: Volaris
(1)	Percentage of our scheduled flights that were operated by us and that arrived on time (within 15 minutes of the scheduled arrival time).	
(2)	Percentage of our scheduled flights that were operated by us, whether or not delayed (i.e., not cancelled).	
(3)	Our incidence of delayed, mishandled or lost baggage per 1,000 passengers.	
Competition
The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price (including ancillary services), flight schedules, aircraft type, passenger amenities, number of routes served from a city, customer service, safety record and reputation, code sharing relationships, and frequent flier programs and redemption opportunities. Our current and potential competitors include traditional network airlines, low-cost carriers, regional airlines and new entrant airlines. We typically compete in markets served by legacy carriers and other low-cost carriers, and, to a lesser extent, regional airlines. Some of our current or future competitors may have greater liquidity and access to capital, and serve more routes than we do.
Our principal competitive advantages are our low base fares and our focus on VFR travelers, leisure travelers and cost-conscious business people. These low base fares are facilitated by our low CASM, which is the lowest among the other Latin American publicly traded airlines. In 2012, our CASM was Ps.1.223 (U.S.$0.099), compared to an average CASM of U.S.$0.140 for the other Latin American publicly traded airlines. We also have lower costs than our U.S.-based publicly traded target market competitors, including Alaska Air, American, Delta and United, which had an average CASM of U.S.$0.145 in 2012.
Our principal competitors in Mexico are Grupo Aeroméxico, Interjet and VivaAerobus. Internationally, we compete with Grupo Aeroméxico and many U.S.-based carriers, including Alaska Air, American, Delta and United.
Fleet
Since we began operations in March 2006, we have increased our fleet from four to 43 aircraft as of March 31, 2013. We fly only Airbus A319 and A320 aircraft, which provides us with significant operational and cost advantages compared to airlines that operate multiple fleet types. The Airbus A320 family is based on a common aircraft type with the same cabin cross-section, and virtually the same systems, cockpit controls, operating and maintenance procedures, and pilot type rating. The Airbus A320 family aircraft are fuel efficient and allow flight crews to be interchangeable across all of our aircraft while decreasing training, maintenance, spare parts inventory and other operational costs. Due to the commonality among the Airbus A320 family, we can retain the benefits of a fleet comprised of a single type of aircraft while still having the flexibility to match the capacity and range of the aircraft to the demands of each of our routes.
 
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As of March 31, 2013, our fleet of 43 Airbus narrow-body aircraft consisted of 24 Airbus A319s and 19 A320s. In addition, we expect to take delivery of three Airbus A320 aircraft in the remainder of 2013. We have a young fleet with the average age of our fleet being 4.1 years as of December 31, 2012, as compared to an average of 12.9 years for the other Mexican airlines according to the DGAC. A young fleet leads to better reliability in terms of the performance of our aircraft, greater fuel efficiency and lower maintenance costs.
Consistent with our ULCC business model, each of our aircraft is configured with a single-class high density seating configuration. Our Airbus A319s accommodate 138 or 144 passengers and our Airbus A320s accommodate 174 passengers. Each of our Airbus A320 family aircraft is equipped with IAE engines. We have taken delivery of five spare engines for service replacement and for periodic rotation through our fleet, and we can take delivery of one additional engine in the last quarter of 2013, if needed, under our contract. In addition, we have an option to purchase three additional engines.
The following table shows the historical development of our fleet from the start of our operations in March 2006 through December 31, 2012:

 	  	2006	 	  	2007	 	  	2008	 	  	2009	 	  	2010	 	  	2011	 	  	2012	 	
Fleet additions	  				  				  				  				  				  				  				
A319	  	 	6	  	  	 	8	  	  	 	5	  	  	 	—  	 	  	 	5	  	  	 	—  	 	  	 	—  	 	
A320	  	 	—  	 	  	 	—  	 	  	 	2	  	  	 	—  	 	  	 	—  	 	  	 	8	  	  	 	7	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total fleet	  	 	6	  	  	 	14	  	  	 	21	  	  	 	21	  	  	 	26	  	  	 	34	  	  	 	41	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The following table shows the development of our fleet from 2013 to 2020 pursuant to our current contracts:

 	  	2013E	 	 	2014E	 	  	2015E	 	  	2016E	 	  	2017E	 	  	2018E	 	  	2019E	 	  	2020E	 	
Fleet additions	  				 				  				  				  				  				  				  				
A319	  	 	(2	) (1)	 	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
A320	  	 	5	(2)  	 	 	2	  	  	 	5	  	  	 	9	  	  	 	2	  	  	 	6	  	  	 	10	  	  	 	12	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total fleet (3)	  	 	44	  	 	 	46	  	  	 	51	  	  	 	60	  	  	 	62	  	  	 	68	  	  	 	78	  	  	 	90	  	

(1)	We are in the process of returning two Airbus A319 aircraft.	
(2)	As of March 31, 2013, we have received two of these Airbus A320 airfraft.	
(3)	Does not include fleet returns under our lease agreements, other than the two returns mentioned in footnote (1) above, as we believe that we can negotiate extensions under those agreements as we have done in the past.	
We have financed the acquisition of our aircraft through a combination of pre-delivery payment financing (including the revolving line of credit with Banco Santander México and Bancomext under which we act as a guarantor), purchase and leaseback transactions and direct leases, all of which meet the conditions for consideration as operating leases. With respect to purchase and leaseback transactions, we have entered into agreements to purchase aircraft from Airbus which are sold to lessors and are simultaneously leased back through leaseback agreements. We have obtained committed financing for the pre-delivery payments in respect of all the aircraft to be delivered between 2013 and 2014.
As of December 31, 2012, we had 41 aircraft leased pursuant to long-term lease agreements for an average term of 9.2 years each. The operating leases for these aircraft expire between 2013 and 2023. We make monthly rent payments and are not required to make termination payments at the end of the lease unless there is an event of default or total loss of the aircraft. Our aircraft leases provide for fixed rent payments except for two, which provide for variable rent payments which fluctuate based on changes in LIBOR. We are required to make certain non-refundable monthly maintenance payments and to return the aircraft in the agreed upon condition at the end of the lease term. We are responsible for the maintenance, servicing, insurance, repair and overhaul of the aircraft during the term of the lease.
 
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The purchase agreement with Airbus requires us to accept delivery of 49 Airbus A320 family aircraft in the next eight years. As detailed in the table above, the agreement provides for the addition of 19 classic A320 and 30 NEOs to our fleet as follows: five in 2013 (two of which we have received as of March 31, 2013), two in 2014, five in 2015, nine in 2016, two in 2017, six in 2018, ten in 2019, and 12 in 2020. We have decided to move to a bigger gauge aircraft by taking delivery of Airbus A320 aircraft instead of Airbus A319 aircraft, as we believe this will result in a reduction in our CASM. The basic price for each of the firm-order aircraft to be delivered pursuant to our contracts may be adjusted for changes in economic conditions as published by the United States Department of Labor. We must make pre-delivery payments at specific dates prior to the scheduled delivery. Although the purchase agreement with Airbus does not include the option to have fewer aircraft delivered, we cannot guarantee that our fleet will increase as indicated in the table above.
We have 17 scheduled aircraft returns in the next four years: four in 2013 (two of which we are in the process of returning), three in 2014, two in 2015, and eight in 2016. However, we believe we can negotiate extensions under our lease agreements as we have done in the past, which increases our fleet flexibility. In addition, we have been able to lease aircraft from lessors and have the flexibility to do so again in the future. For certain risks related to our lease agreements, see “Risk Factors—Risks related to our business—A failure to comply with covenants contained in our aircraft or engine lease agreements, or the occurrence of an event of default thereunder, could have a negative impact on us and our financial condition and results of operations.”
We are in the process of selecting the engine manufacturer for 44 of the 49 Airbus A320 family aircraft deliveries that we have under the purchase agreement with Airbus, and we expect to make an announcement about this transaction shortly.
Maintenance
We have a DGAC and FAA mandated and approved maintenance program administered by our maintenance engineering department. Our maintenance technicians undergo extensive initial and ongoing training to ensure the safety of our aircraft, and all of them are FAA-certified.
Aircraft maintenance and repair consists of routine and non-routine maintenance, and the work performed is divided into three general categories: line maintenance, major maintenance and component service. Line maintenance consists of routine daily and weekly scheduled maintenance checks on our aircraft, including pre-flight, daily, weekly and overnight checks, any diagnostics and routine repairs and any unscheduled items on an as needed basis. Line maintenance events are currently serviced by in-house mechanics and supplemented by contract labor and are primarily completed at airports we currently serve. Line maintenance also includes scheduled tasks that can take from seven to 14 days to complete and are typically required approximately every 18 months.
Heavy airframe maintenance checks consist of a series of more complex tasks that can take from one to four weeks to complete and are typically required approximately every five to six years. Heavy engine maintenance is performed approximately every five to six years and includes a more complex work scope. Due to our relatively small fleet size and projected fleet growth, we believe outsourcing all of our major maintenance, such as engine servicing and major part repairs, is more efficient. We have entered into a long-term flight hour agreement with IAE for our engine overhaul services and Lufthansa Technik AG on a power-by-hour basis for component services. We contract with Lufthansa Technik AG for certain technical services and Aeroman for our heavy airframe maintenance. Aeroman is an FAA-approved maintenance provider, has been named the number one maintenance facility by Airbus, has been awarded the FAA’s Corporate Diamond Certificate of Excellence and airlines like Jet Blue and Southwest Airlines also outsource their maintenance requirements to Aeroman.
Our recent maintenance expenses have been lower than what we expect to incur in the future because of the relatively young age of our aircraft fleet. Our maintenance costs are expected to increase as the frequency of repair increases with our aircraft’s age. As our aircraft age, scheduled scope work and frequency of unscheduled maintenance events are likely to increase as with any mature fleet.
 
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Safety
We are committed to the safety and security of our passengers and employees. Some of the safety and security measures we have taken include (i) aircraft security and surveillance, (ii) positive bag matching procedures, (iii) enhanced passenger and baggage screening and search procedures, and (iv) secured cockpit doors. We strive to comply with or exceed health and safety regulation standards. In pursuing these goals, we maintain an active aviation safety program and all of our personnel are expected to participate in the program and take an active role in the identification, reduction and elimination of hazards.
Our ongoing focus on safety relies on training our employees to use the proper safety equipment and take the proper safety measures by providing them with the tools and equipment they require to perform their job functions in a safe and efficient manner. Safety in the workplace targets several areas of our operation including flight operations, maintenance, in-flight, dispatch and station operations. We have received the IOSA (IATA’s Operational Safety Audit) certification.
The TSA is charged with aviation security for both airlines and airports in the United States. We maintain active, open lines of communication with the TSA at all of our locations to ensure proper standards for the security of our personnel, customers, equipment and facilities are exercised throughout our operation. In Mexico, the Mexican Civil Aeronautic Authority through the Assistant General Aviation Authority ( Dirección General Adjunta de Aviación ) is in charge of air traffic safety and has the authority to establish or modify the operations condition of air traffic and to coordinate and control the airports. See “Regulation.”
Fuel
Fuel is a major cost component for airlines and is our largest operating expense. Fuel accounted for 34%, 41% and 42% of our total operating costs in 2010, 2011 and 2012, respectively. We purchase fuel from ASA which also supplies fuel and fills our aircraft tanks in Mexico. Under our agreement with ASA, the price of fuel is determined by the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público ) and this agreement may be terminated by either party upon short notice. In the United States we have entered into fuel supply agreements with suppliers such as World Fuel Services, pursuant to which these suppliers or their affiliates sell fuel to us at various airports as specified in the agreements. See “Risk Factors—Risks Related to Our Business—We rely on a number of single suppliers for our fuel, aircraft, engines and ticket reservation system.”
Fuel costs experienced substantial variance in 2008 and 2009, and the cost of fuel cannot be predicted with any degree of certainty since it is subject to many global and geopolitical factors. Fuel prices are dependent on crude oil prices, which are quoted in U.S. dollars. If the value of the U.S. dollar rises against the peso, our fuel costs, expressed in pesos, may increase even absent any increase in the U.S. dollar price of crude oil. Our fuel hedging policy is to enter into fuel derivative contracts to hedge against changes in fuel prices up to 18 months forward subject to certain financing controls. See “Risk Factors—Risks Related to Our Business—Our fuel hedging strategy may not reduce our fuel costs.”
Employees
We believe that having well-trained and driven employees impacts our growth potential and the quality of the service we provide. We therefore expend significant effort on selecting and training individuals who we believe are the best qualified for our company and will fit well within our corporate culture of customer service, meritocracy and efficient operations.
As of March 31, 2013, we had 2,580 employees, which consisted of 412 pilots, 720 flight attendants, 123 ramp operations personnel, 537 airport and customer service personnel, 176 maintenance personnel and 612 management and administrative personnel. 1,933 of our employees (approximately 75%) are part of the Sindicato de Trabajadores de la Indústria Aeronaútica, Similares y Conexos de la República Méxicana —STIAS
 
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and the remaining 25% of our employees are not part of any union. We and each of our subsidiaries entered into substantially the same collective bargaining agreement with our pilots and flight attendants on February 16, 2013 for a term of two years. Salaries under these collective bargaining agreements are negotiated yearly, whereas other benefits are negotiated every two years. We believe we have a good relationship with our employees, and have never had labor strikes or work stoppages. In 2009, 2010, 2011 and 2012, we were recognized as a Great Place to Work by Great Place to Work Institute in Mexico.
The following table sets forth the number of our employees per category and average of employees per aircraft for the periods indicated below:

 	  	For the Years ended
December 31,	 	  	Three Months
Ended March 31,	 	
Employees	  	2010	 	  	2011	 	  	2012	 	  	2013	 	
Pilots	  	 	295	  	  	 	388	  	  	 	404	  	  	 	412	  	
Flight attendants	  	 	444	  	  	 	602	  	  	 	715	  	  	 	720	  	
Ramp operations personnel	  	 	156	  	  	 	108	  	  	 	114	  	  	 	123	  	
Airport and customer service personnel	  	 	329	  	  	 	413	  	  	 	548	  	  	 	537	  	
Maintenance personnel	  	 	144	  	  	 	144	  	  	 	180	  	  	 	176	  	
Management and administrative personnel	  	 	490	  	  	 	624	  	  	 	608	  	  	 	612	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,858	  	  	 	2,279	  	  	 	2,569	  	  	 	2,580	  	
Average of employees per aircraft	  	 	71	  	  	 	67	  	  	 	63	  	  	 	60	  	
We provide extensive training to our pilots, flight attendants, technical staff and customer service representatives, which complies with Mexican and international standards. We have implemented employee accountability initiatives both at the time of hiring and on an ongoing basis in order to maintain the quality of our crew and customer service.
Our compensation strategy is meant to retain talented and motivated employees and is designed to align the interests of our employees with our own. Approximately 90% of our employees, including pilots, flight attendants, ground employees and management, are subject to variable compensation employment arrangements, which are intended to promote efficiency, operating performance and profitable results. In addition, there is no seniority pay escalation among our pilots in order to encourage meritocracy.
Facilities
We lease all of our facilities at each of the airports we serve. Our leases for our terminal passenger service facilities, which include ticket counter and gate space, operations support area and baggage service offices, generally have terms ranging from one to three years and contain provisions for periodic adjustments of lease rates. We expect to either renew these leases or find alternative space that would permit us to continue providing our services. We also are responsible for maintenance, insurance and other facility-related expenses and services. We have also entered into use agreements at each of the airports we serve that provide for the non-exclusive use of runways, taxiways and other facilities. Landing fees under these agreements are based on the number of landings and weight of the aircraft.
Our primary corporate offices and headquarters are located in Mexico City at Av. Antonio Dovalí Jaime No.70, 13th Floor, Tower B, Colonia Zedec Santa Fe, México, D.F. 01210, where we lease 6,656 square meters under a lease that expires in May 2022. We also lease a 1,500 square-meter warehouse for storage, located in Toluca within the airport area, under a lease that expires in 2015. In addition, we lease a hangar facility in Toluca, under a lease that expires in December 2013.
Insurance
We maintain insurance policies we believe are of the types customary in the airline industry and as required by the Mexican and U.S. aviation authorities. In connection with our operations, we carry insurance coverage
 
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against loss and damages, including war and terrorist risks, for our entire fleet of aircraft, spares and equipment. We carry passenger and third-party liability insurance coverage at levels that we believe are adequate and consistent with general industry standards. We also hold non-aviation insurance coverage that includes directors’ and officers’ liability, vehicles value and liability and life and major medical expenses insurance for our employees.
Intellectual Property
We have registered the trademark “Volaris” with the trademark office in Mexico and the United States. We have also registered several additional trademarks and slogans with the trademark office in Mexico.
We operate software products under licenses from our vendors, including Sabre Inc. and Navitaire LLC. Under our agreements with Airbus, we use Airbus’ proprietary information to maintain our aircraft.
Legal Proceedings
We are subject to various legal proceedings in the ordinary course of our business which we believe are incidental to the operation of our business. We believe that the outcome of the proceedings to which we are currently a party will not, individually or in the aggregate, have a material adverse effect on our consolidated financial statements.
 
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 MANAGEMENT
Board of Directors
Our by-laws provide that the board of directors be comprised of no more than 21 members and their corresponding alternates, in which at least 25% of the members and their corresponding alternates are required to be independent pursuant to the Mexican Securities Market Law. A determination about independence must be made by our shareholders and it may be challenged by the CNBV. Upon the closing of the offering, our board of directors will be comprised of 11 principal members, of which 25% are independent and three of which have been appointed by our Series B shareholders.
Under our by-laws, Series B shareholders will have the right to appoint three directors as long as the Series B shares represent at least 12% of Volaris’ outstanding capital stock. If the Series B shares, which are convertible into Series A Shares, represent less than 12% of our outstanding capital stock, the right to appoint directors by Series B shareholders will be based on the Mexican Securities Market Law.
Under our by-laws and the Mexican Securities Market Law, any shareholder or group of shareholders representing 10% of Volaris’ outstanding capital stock, have the right to appoint one director for each such 10% ownership stake.
Set forth below are the name, age, position and biographical description of each of our directors as of the date of the completion of the global offering. The business address of our directors is that of our principal office.

Name	  	Age	 	  	Title	  	Alternate*	
Gilberto Perezalonso Cifuentes	  	 	70	  	  	Director and Chairman of the Board	  		
Pedro Carlos Aspe Armella	  	 	63	  	  	Director	  	Carlos Miguel Mendoza Valencia	
Brian H. Franke	  	 	49	  	  	Director	  	Andrew Broderick	
William A. Franke	  	 	76	  	  	Director	  	John R. Wilson	
Harry F. Krensky	  	 	49	  	  	Director	  	Alberto Moreno Ruiz Esparza	
Roberto José Kriete Ávila	  	 	60	  	  	Director	  	Rodrigo Salcedo Moore	
Rodolfo Montemayor Garza	  	 	61	  	  	Director	  	Dean Donovan	
Jorge Antonio Vargas Diez Barroso	  	 	64	  	  	Director	  	Marco Baldocchi Kriete	
José Luis Fernández Fernández	  	 	54	  	  	Independent Director	  		
Joaquín Alberto Palomo Déneke	  	 	62	  	  	Independent Director	  		
John A. Slowik	  	 	62	  	  	Independent Director	  		

*	Alternate directors are authorized to act on behalf of their respective directors in the event of such directors’ inability to attend board meetings.	
Gilberto Perezalonso Cifuentes has been one of our directors and chairman of the board since 2011. He is also a director at Grupo Gigante, Grupo Marhnos, and Southern Copper. Previously, Mr. Perezalonso was chief executive officer of Aeroméxico, executive vice president of Administration and Finance of Grupo Televisa and chief executive officer of Corporación Geo. Mr. Perezalonso holds a Bachelor of Laws from the Universidad Iberoamericana, and a Master of Business Administration from INCAE. He has also completed the Corporate Finance Program at Harvard University.
Pedro Carlos Aspe Armella has been one of our directors since the date we were founded and was the chairman of the board until 2011. Mr. Aspe also sits on the board of directors of Evercore Partners (where he is co-chairman), the McGraw-Hill Companies and Televisa. He is a member of Discovery Americas I LLP’s Investment Committee, the Visiting Committee of the Department of Economics of the Massachusetts Institute of Technology and of the Advisory Boards of Marvin & Palmer and Endeavor. Previously, Mr. Aspe held a
 
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number of positions with the Mexican government: he was founder of the INEGI, Secretary of the Budget and Secretary of the Treasury. Mr. Aspe holds a Bachelor of Arts in Economics from the Instituto Tecnológico Autónomo de México and a Ph.D. in Economics from the Massachusetts Institute of Technology.
Brian H. Franke has been one of our directors since 2010. Mr. Franke has previously been a member of the board of directors of Tiger Airways Holdings (Singapore) since 2008 and Tiger Airways Australia since May 2009. Currently, he is a principal specializing in aviation investments with Indigo Partners LLC, a private equity firm based in the United States. Prior to that, Mr. Franke was vice president of Franke & Company Inc., a boutique private equity firm focused on small and medium enterprises investments. He was also a director in marketing for Anderson Company, a U.S. real estate developer, from 1989 to 1992 and a marketing manager for United Brands Inc., a U.S. distribution and licensing company for consumer goods, from 1987 to 1989. Mr. Franke holds a Bachelor of Science in Business from the University of Arizona and a Masters of International Management from Thunderbird School of Global Management. He is William A. Franke’s son.
William A. Franke has been one of our directors since 2010. He is also a member of the boards of directors of Spirit and Wizz Air Holdings Plc (Hungary). He is currently the managing member of Indigo Partners LLC (since 2002) and a managing partner of Newbridge Latin America L.P. (since 1996), both of which are private equity firms. Mr. Franke was the founding chairman of Tiger Airways Holdings (Singapore) and was the chief executive officer/chairman of America West Airlines from 1993 to 2001. Mr. Franke has undergraduate and graduate degrees from Stanford University. He also has an honorary doctorate from Northern Arizona University awarded in 2008. He is Brian H. Franke’s father.
Harry F. Krensky has been one of our directors since our founding. He is also a member of the board of directors of transportation companies Corporación Lipu, Fondo de Transporte México and Ike Asistencia, hospital operator H+ABC (SISI) and education company AMCO International. Mr. Krensky is managing partner of the private equity firms Discovery Americas and Discovery Air. Previously, he was a founder of emerging market hedge fund managers Discovery Capital Management and Atlas Capital Management, and a founder of Deutsche Bank’s emerging market hedge fund. He has also served as an adjunct professor of international business at New York University’s Stern School of Business. He is a member of the Board of Trustees of Colby College, where he is chairman of its investment committee. Mr. Krensky has a Bachelor of Arts from Colby College, a master’s degree from the London School of Economics and Political Science and a Master of Business Administration from the Columbia University Graduate School of Business.
Roberto José Kriete Avila was a founder of Volaris and has been one of our directors since 2005. He has an active role in managing private investments in sectors such as aviation, real estate, agribusiness and hotels. Mr. Kriete is also chairman of the board of AviancaTaca, president of the Latin American and Caribbean Air Transport Association (ALTA), and a member of the boards of Teléfonos de Mexico, S.A.B. de C.V. and Escuela Superior de Economía y Negocios (ESEN). He has also served as a member of the boards of Banco Agrícola of El Salvador, Fundación Empresarial para el Desarrollo Educativo (FEPADE) and Fundación Salvadoreña para la Salud y el Desarrollo Humano (FUSAL). Mr. Kriete has an undergraduate degree from the University of Santa Clara and a Master of Business Administration from Boston College. He is Marco Baldocchi Kriete’s uncle.
Rodolfo Montemayor Garza has been one of our directors since 2010. He also sits on the board of directors of Financiera Educativa de Mexico, INITE, Mexfund, LG Capital Fund and Grupo Empresarial Guerra. He is a founder and sits as chairman of the board of Human Capital International, Legare, Consultora Tecnológico Administrativa de México and SDS Latam. He worked in several responsibilities in Grupo CYDSA and served as managing director for the North Latin American Region in Uniroyal Chemical & Crompton and Knowles, and as chief executive officer at Grupo Guepell. Mr. Montemayor has a college degree in accounting from Instituto Tecnológico de Monterrey, and Master of Business Administration from Tulane and AD-2 degree from the Instituto Panamericano de Alta Dirección de Empresa.
Jorge Antonio Vargas Diez Barroso has been one of our directors since 2012. He is also a member of the boards of Grupo Lipu, S.A. de C.V., Inmuebles Metro Park, S.A. de C.V., and Dilomak S.A. de C.V. Mr. Vargas
 
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has been the director of Corporación Triangulo, S.A. de C.V. since 1996. He worked at Grupo Televisa as vice president of news and sports from 1982 until 1996. Mr. Vargas has a college degree in public accounting from Universidad Nacional Autónoma de México.
José Luis Fernández Fernández has been one of our independent directors since 2012 and he also serves as the chairman of our audit committee. He is also a member of the audit committees of various companies, including Grupo Televisa, S.A.B., and Genomma Lab Internacional, S.A.B. de C.V. (of which he is the chairperson), and an alternate member of the board of Mexichem, S.A.B. de C.V., Grupo Pochteca, S.A.B. de C.V. and Arca Continental, S.A.B. de C.V. Mr. Fernández is a partner at Chevez Ruiz Zamarripa. Mr. Fernández has a degree in Public Accounting from Universidad Iberoamericana and a certification issued by the Mexican Institute of Public Accountants.
Joaquín Alberto Palomo Déneke has been one of our directors since 2005 and he also serves as a member of our audit committee. He is also a member of the boards of directors of Aeroman and Avianca-TACA. Mr. Palomo has over two decades of experience in the financial air transportation and commercial aerospace sectors, where he created and implemented the first organization for Grupo TACA. He also actively participated in the planning, purchasing negotiations, closing, organization and final merger of AVIATECA, Tan/Sahsa, TACA de Honduras, Nica, Lacsa, Isleña de Inversiones, La Costeña, Aeroperlas and Trans American Airlines to form Grupo TACA. Mr. Palomo negotiated the financing of more than $1 billion in aircraft leases, sales and leasebacks. Mr. Palomo has a Bachelor of Science degree in Agricultural Economics from Texas A&M University.
John A. Slowik has been one of our directors since 2012 and he also serves as a member of our audit committee. He has over three decades of experience in the air transportation and commercial aerospace sectors as a banker at Citi (and its predecessors) and Credit Suisse, where he managed its America’s Airline Industry investment banking practice. His extensive experience includes corporate and investment banking, where his activities involved public and private capital raising, structured debt issuance, aircraft leasing, principal investment and mergers and acquisitions advisory work. Mr. Slowik is also a member of the board of directors of Rotor Engine Securitization, Ltd., a private commercial jet engine leasing company operating out of Ireland. Mr. Slowik has an undergraduate degree in Mechanical Engineering from Marquette University and a Masters in Management from the Kellogg School, Northwestern University.
Authority of the Board of Directors
Our management is entrusted to the board of directors and the chief executive officer. The board of directors sets forth the guidelines and general strategy for the conduct of our business and supervises the execution thereof.
Pursuant to the Mexican Securities Market Law and our by-laws, the board of directors must approve, among other matters:
 
 	•	 	our general strategy;	
 
 	•	 	the monitoring of our management and that of our subsidiaries;	
 
 	•	 	with prior input from the audit and the corporate governance committee, on a case-by-case basis, (i) transactions with related parties, subject to certain limited exceptions, (ii) the election of our chief executive officer, his compensation and removal, and policies for the description and comprehensive remuneration of other executive officers, (iii) our guidelines for internal controls and internal audits, including those for our subsidiaries (iv) our accounting policies, (v) our financial statements and those of our subsidiaries, (vi) unusual or non-recurring transactions and any transactions or series of related transactions during any calendar year that involve (a) the acquisition or sale of assets with a value equal to or exceeding 5% of our consolidated assets, or (b) the giving of collateral or guarantees or the assumption of liabilities, equal to or exceeding 5% of our consolidated assets, and (vii) the selection of the external auditors;	
 
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 	•	 	calling shareholders’ meetings and taking action based upon their resolutions;	
 
 	•	 	the annual submission to our general shareholders’ meeting of (i) the chief executive officer’s report, and (ii) the opinion of the board of directors in respect of such report;	
 
 	•	 	creation of special committees and granting authority to such committees, provided that the committees will not have the authority which by law or under our by-laws is expressly reserved to our shareholders or our board of directors;	
 
 	•	 	determining how to vote the shares that we hold in our subsidiaries; and	
 
 	•	 	policies for disclosure of information.	
Our by-laws provide that meetings of our board of directors are validly convened and held if a majority of the members or their respective alternates are present. Resolutions passed at these meetings will be valid if approved by a majority of the disinterested members of the board of directors (i.e. members that do not have a conflict of interest), except as described below. The chairman of the board of directors will not have a tie-breaking vote.
Duty of Care and Duty of Loyalty
The Mexican Securities Market Law imposes duties of care and of loyalty on directors.
For a description of the duties of care and loyalty of our directors, see “Market Information—Duty of Care and Loyalty of Directors” and “Description of Capital Stock—Duty of Care and Duty of Loyalty.”
Board Practices
The members of our board of directors are elected annually at our ordinary general meeting of shareholders. All board members hold their positions for one year and may be reelected. The current members of the board of directors were reelected or selected pursuant to the unanimous resolutions adopted by our shareholders prior to the offering referred to herein.
Audit and Corporate Governance Committee
The Mexican Securities Market Law requires us to have an audit and corporate governance committee, which must be comprised of at least three independent members. We established an audit and corporate governance committee pursuant to the unanimous resolutions adopted by our shareholders outside of a general shareholders meeting in June 2013. We believe that all of the members of the audit and corporate governance committee are independent under the Mexican Securities Market Law and Exchange Act Rule 10A-3.
The audit and corporate governance committee’s principal duties are (i) supervising and evaluating our external auditors and analyzing their reports (including their opinion of our annual report), (ii) analyzing and supervising the preparation of our financial statements and making a recommendation to the board of directors on their approval, (iii) informing the board of directors of the status of our internal controls, our internal audit and their adequacy, (iv) supervising the execution of related party transactions and transactions representing 20% or more of consolidated assets being undertaken pursuant to applicable law, (v) requesting reports from our executive officers or independent experts whenever it deems appropriate, (vi) investigating and informing the board of directors of any irregularities that it may encounter, (vii) receiving and analyzing recommendations and observations made by the shareholders, members of the board of directors, executive officers or any third party and taking the necessary actions, (viii) calling shareholders’ meetings, (ix) supervising compliance by our chief executive officer of instructions provided by our board or shareholders, (x) providing an annual report to the board in respect of accounting policies, their sufficiency and adequacy, and consistency, (xi) rendering opinions to the board of directors in connection with the designation of our chief executive officer, his compensation and
 
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removal and policies for the description and comprehensive remuneration of other executive officers, (xii) supervising and reporting on the performance of our key officers, (xiii) rendering its opinion to the board of directors in connection with transactions with related parties, (xiv) requesting opinions from independent third party experts, (xv) calling shareholders’ meetings, (xvi) providing assistance to the board of directors in the preparation of reports for the annual shareholders’ meeting and (xvii) hiring or recommending auditors to shareholders and approving them.
As of the date of this prospectus, the audit and corporate governance committee has at least one financial expert, José Luis Fernández Fernández, and is composed of three members.
The current members of our audit and corporate governance committee are:

Name	  	Title	
José Luis Fernández Fernández	  	Chairman of the Audit and Corporate Governance Committee, Independent Director	
Joaquín Alberto Palomo Déneke	  	Independent Director	
John A. Slowik	  	Independent Director	
Compensation and Nominations Committee
Our board of directors has created a compensation and nominations committee, which is comprised by five non-independent members, as determined by our board of directors from time to time, appointed by our board of directors. We established a compensation and nominations committee pursuant to the unanimous resolutions adopted by our shareholders in June 2013.
The compensation and nominations committee is responsible for, among other things, (i) submitting proposals to the board of directors relating to the removal of officers within the first two corporate levels, (ii) proposing the creation, amendment or termination of any incentive plan for officers, (iii) consulting with third-party experts in connection with any issues related to compensation, organizational development, and other related matters, (iv) proposing compensation packages for officers within the first four corporate levels, (v) proposing to our board of directors the entering into, amendment or termination of any collective bargaining agreements, (vi) informing our board of directors of any material contingencies, and (vii) submitting periodic reports to our board of directors.
As of the date of this prospectus, the current members of the compensation and nominations committee are:

Name	  	Title	 	
Roberto José Kriete Ávila	  	 	Chairman	  	
Pedro Carlos Aspe Armella	  	 	Member	  	
Brian H. Franke	  	 	Member	  	
Harry F. Krensky	  	 	Member	  	
Rodolfo Montemayor Garza	  	 	Member	  	
Senior Management
Our executive officers are appointed by our board of directors, pursuant to a proposal made by our compensation committee, for an indefinite term and may be removed by our board of directors at will, provided the corresponding severance payments are made, if applicable, in accordance with Mexican labor law and the applicable labor contract.
 
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Set forth below are the name, age, position and a description of the business experience of each of our executive officers not described above, as of the date of this prospectus. The business address of our executive officers is that of our principal office.

Name	  	Age	  	Position	  	 	
Enrique Beltranena	  	50	  	Chief Executive Officer	  		
Fernando Suárez	  	40	  	Chief Financial Officer	  		
Jaime Pous	  	44	  	General Counsel	  		
Holger Blankenstein	  	38	  	Chief Commercial Officer	  		
James Nides	  	63	  	Chief Operating Officer	  		
Carlos Alberto González	  	39	  	Corporate Controller Director	  		
Jimmy Zadigue	  	40	  	Internal Audit Director	  		
Enrique Beltranena has been our chief executive officer since March 2006. Previously he worked as Grupo TACA’s chief operating officer, human resources and institutional relations vice president, cargo vice president and commercial director for Mexico and Central America. He also held the position of general director of Aviateca in Guatemala. Mr. Beltranena started his career in the aerospace industry in 1988. During the 1990s he was responsible for the commercial merger of Aviateca, Sahsa, Nica, Lacsa and TACA Peru, which consolidated them into a single management entity called Grupo TACA. While at Grupo TACA, Mr. Beltranena also led the development of single operating codeshare and the negotiation of open skies bilateral agreements among each of the Central American countries and the United States. In 2001, Mr. Beltranena led Grupo TACA’s complete restructuring as its chief operating officer. Mr. Beltranena was named to the Entrepreneur of The Year Hall of Fame in Monaco after being nominated by Ernst & Young—Innovation in 2012. He was also named Entrepreneur of The Year in Mexico after being nominated by Ernst & Young—Mexico in 2011.
Fernando Suárez has been our chief financial officer since January 2006. Mr. Suárez worked as an investment banker for Salomon Brothers in New York. Mr. Suárez has been responsible for negotiating pre-delivery payment financing, purchase and leaseback transactions and direct leases for all of our aircraft. Prior to joining us, he worked at Grupo Televisa where he had been director of corporate finance. Mr. Suárez received his Master of Business Administration from University of California, Los Angeles and holds a Bachelor of Arts in Economics from the Instituto Tecnológico Autónomo de México.
Jaime Pous has been our general counsel since January 2013. Prior to joining us, Mr. Pous worked at Grupo Televisa, where he had been legal director from 1999 to 2012. Mr. Pous received his LLM from The University of Texas at Austin, School of Law and holds a law degree from the Instituto Tecnológico Autónomo de México.
Holger Blankenstein has been our chief commercial officer since 2009. He heads the areas of sales, marketing, and planning, which includes revenue management, and he also oversees the cargo business. Mr. Blankenstein was responsible for structuring our various channels of distribution and entrance into the U.S. market as well as developing and implementing our unbundled fares and ancillary products. Previously, Mr. Blankenstein was director of strategic development planning at Grupo TACA and was a consultant at Bain & Company. He has a Master’s of Business Administration and a Bachelor of Arts in Business degrees from Goethe University in Frankfurt.
James Nides has been our chief operating officer since July 2011. Mr. Nides was previously the vice president flight operations and maintenance at ExpressJet Airlines (doing business as Continental Express and United Express) from July 1998 to July 2011. Mr. Nides was responsible for the operation of more than 450 aircraft, over 4,000 pilots, 1,100 mechanics, six nose-to-tail heavy check maintenance bases in Shreveport and Knoxville, a state-of the art paint facility in Saltillo, Mexico, and an interior shop in Houston, Texas. He was responsible for the combination of Atlantic Southeast Airlines and ExpressJet Airlines, and successfully obtaining a single operating certificate from the FAA in less than one year. Prior to working at ExpressJet Airlines, he held the position of vice president of flight operations for Northwest Airlink’s operation in Memphis, Tennessee, from
 
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1995 to 1998. Before working at Northwest Airlink, Mr. Nides held various positions in flight operations and maintenance at Comair Airlines for 18 years, including captain, chief pilot, director of operations and director of technical services. Mr. Nides is a licensed commercial pilot with over 14,000 hours of flight time and is qualified on more than five different aircraft. He graduated from the University of Cincinnati with a degree in Economics.
Carlos Alberto González has been our corporate controller director since June 2010. Currently, he is responsible for accounting, reporting, controls, revenue assurance, and taxes and accounting operations. He has been with us since April 2006. Prior to joining us, he worked as a financial planning and control manager in Mexico and in Spain for Grupo Telefonica Moviles. Additionally, he previously was a senior associate at PricewaterhouseCoopers and an internal auditor analyst at Scotiabank Inverlat. Mr. González is a Certified Public Accountant with a post-graduate degree in Corporate Finance from ISEC University and he also holds a Masters of Business Administration degree from Antonio de Nebrija University in Spain.
Jimmy Zadigue has been our internal audit director since April 2011. Previously, Mr. Zadigue worked as the director of operations, finance and administration at Swarovski in Mexico and as the director of finance and business control at Bombardier North America. Mr. Zadigue is also a Certified Management Accountant in Canada. He holds a Bachelor of Business Administration degree from HEC-Montreal and a Master of Science degree in Accounting Sciences from the Université du Québec.
Activities of Senior Management
Our chief executive officer and members of our senior management ( directivos relevantes ) are required to focus their activities on creating value for the company and will be liable for damages to the corporation for: (i) favoring a shareholder or group of shareholders, (ii) approving transactions between the company (or its subsidiaries) with related persons without satisfying legal requirements, such as obtaining a fairness opinion and the approval of our board of directors, on a case-by-case basis, (iii) using (or authorizing a third party to use) our assets in a manner that is against our policies, (iv) making inappropriate use of our non-public information, (v) taking advantage of corporate opportunities or consulting a third party to take advantage of corporate opportunities without approval from our board of directors, (vi) knowingly disclosing or revealing false or misleading information or omitting the disclosure of material information, (vii) ordering that transactions undertaken be omitted from registration, (viii) destroying or modifying company results or information and (ix) filing false or misleading information with the CNBV.
Our chief executive officer is required, primarily, to (i) implement the instructions established at our shareholders’ meeting and that of our board of directors, (ii) submit to the board of directors for approval the principal strategies for the business, (iii) submit to the audit and corporate governance committee proposals for our internal control system, (iv) disclose all material information to the public, (v) comply with applicable law in connection with share repurchases and subsequent purchases, (vii) initiate actions in respect of liabilities caused by us, (viii) comply with applicable law in respect of dividend payments, and (ix) maintain adequate accounting and registration internal control systems and mechanisms.
Director and Executive Compensation
In 2012, the senior manager positions listed in this prospectus, received an aggregate compensation of approximately Ps.36.1 million. The chairman and the independent members of our board of directors received an aggregate compensation of approximately Ps.5.8 million, and the rest of the directors received no compensation. In addition, see “—Management Incentive Plan.”
Our directors or executive officers are not entitled to any benefits upon termination, except for indemnification payments provided under the Mexican Federal Labor Law ( Ley Federal del Trabajo ), if any.
 
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Management Incentive Plan
In December 2012, our shareholders approved a share incentive plan for the benefit of certain executive officers. Under this plan, designated officers generally may receive up to 3.0% of our capital stock on a fully diluted basis immediately prior to the completion of the related performance condition (consummation of the global offering or change of control), exercisable after such performance condition and for a period of ten years. To implement the plan, our shareholders approved (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of our capital stock, (ii) the transfer of such shares to a Mexican trust for the benefit of certain officers and (iii) the execution of share sales agreements setting forth the terms and conditions upon which the officers will receive purchased shares from the trustee for the Mexican trust.
On December 24, 2012, the trust was created and the share sales agreements were executed. On December 27, 2012, the trust acquired the aforementioned shares. The shares will accrue any dividends paid by us during the time elapsing prior to the delivery to officers upon payment therefor.
External Auditors
Our independent registered public accounting firm is Mancera, S.C. (a member practice of Ernst & Young Global), and its offices are located at Avenida Ejército Nacional 843-B, Antara Polanco, Mexico City, Distrito Federal, 11510. Our external auditors were appointed by our board of directors based upon the recommendations of our audit committee and taking into account Mancera, S.C.’s experience, quality and service standards.
Audited consolidated financial statements included in this prospectus were audited by Mancera, S.C., which has served as our external auditor since fiscal year 2005. In the past three years that they have audited us they have not issued a qualified opinion or a negative opinion, nor have they refrained from giving an opinion on our financial statements. During 2010, 2011 and 2012, Mancera, S.C. provided us audit services. During 2010, 2011 and 2012, we paid Ps.2.4 million, Ps.12.3 million and Ps.6.8 million, respectively, for audit services.
Internal Control
We have internal control policies and procedures designed to provide reasonable assurance that our transactions and other aspects of our operations are carried out, recorded and reported pursuant to guidelines set forth by our management using IFRS, applied in conformity with available interpretive guidance thereunder. In addition, our operational processes are subject to periodic internal audits that are reviewed by our audit committee.
Corporate Governance Practices
Pursuant to Section 303A.11 of the Listed Company Manual of the New York Stock Exchange (NYSE) and Rule 4350(a)(1) of the NASDAQ Stock Market, Inc. (NASDAQ) Marketplace Rules, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NYSE and NASDAQ listing standards.
 
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The table below discloses the significant differences between our corporate governance practices and the NYSE and NASDAQ standards.

NYSE Standards	  	NASDAQ Standards	  	Our Corporate Governance Practices	
Director Independence . Majority of board of directors must be independent. “Controlled companies,” which would include our company if we were a U.S. issuer, are exempt from this requirement. A controlled company is one in which more than 50% of the voting power is held by an individual, group or another company, rather than the public. §303A.01	  	Director Independence . Majority of board of directors must be independent and directors deemed independent must be identified in a listed company’s proxy statement (or annual report on Form 10-K or 20-F if the issuer does not file a proxy statement). “Controlled companies,” which would include our company if we were a U.S. issuer, are exempt from this requirement. A controlled company is one in which more than 50% of the voting power is held by an individual, group or another company, rather than the public. Rules 4350(c)(1) & (c)(5)	  	Director Independence .
Pursuant to the Mexican
Securities Market Law and our
by-laws, our shareholders are
required to appoint the members
of our board of directors
comprised of no more than 21
members, 25% of whom must be
independent. Certain persons are
per se non-independent,
including insiders, control
persons, major suppliers and
relatives of such persons. In
accordance with the Mexican
Securities Market Law, our
shareholders’ meeting is required
to make a determination as to the
independence of our directors,
though such determination may
be challenged by the CNBV. See
“Management” and “Description
of Capital Stock—Election of
Directors.”	
			
Executive Sessions . Non-management directors must meet regularly in executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03	  	Executive Sessions . Independent directors must meet regularly in executive sessions at which only independent directors are present. Rule 4350(c)(2)	  	Executive Sessions . Non-
management directors are not
required to meet in executive
sessions without management.	
			
Nominating/Corporate Governance Committee . Nominating/corporate governance committee of independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. “Controlled companies” are exempt from these requirements. §303A.04
 
As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.	  	Nominating Committee . Director nominees must be selected, or recommended for the board’s selection, either by a nominating committee comprised solely of independent directors or by a majority of independent directors. Each listed company also must certify that it has adopted a formal charter or board resolution addressing the nominations process. “Controlled companies” are exempt from this requirement. Rules 4350(c)(4)(A)-(B) & (c)(5)
 
As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.	  	Nominating Committee . We
are not required to have a
nominating committee.
However, we maintain a
compensation committee which
may, among other things, submit
proposals to our board of
directors in respect of the
appointment of principal
officers, the inaction,
amendment or formation of
incentive plans for officers and
compensation of officers within
the first four corporate levels.
See “Compensation Committee”
for further information.	
 
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NYSE Standards	  	NASDAQ Standards	  	Our Corporate Governance Practices	
Compensation Committee . Compensation committee of independent directors is required, which must evaluate and approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. “Controlled companies” are exempt from this requirement. §303A.05
 
As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.	  	Compensation Committee . CEO compensation must be determined, or recommended to the board for determination, either by a compensation committee comprised solely of independent directors or a majority of the independent directors and the CEO may not be present during voting or deliberations. Compensation of all other executive officers must be determined in the same manner, except that the CEO, and any other executive officers, may be present. “Controlled companies” are exempt from this requirement. Rules 4350(c)(3)(A)-(B) & (c)(5)
 
As a controlled company, we would be exempt from this requirement if we were a U.S. issuer.	  	Compensation Committee . We
are not required to have a
compensation committee.
However, we maintain a
compensation committee that
makes proposals to the board of
directors in respect of
compensation of officers within
the first four corporate levels.
See “Compensation Committee”
for further information.	
			
Audit Committee . Audit committee satisfying the independence and other requirements of Exchange Act Rule 10A-3 and the more stringent requirements under the NYSE standards is required. §§303A.06, 303A.07	  	Audit Committee . Audit committee satisfying the independence and other requirements of Exchange Act Rule 10A-3 and the more stringent requirements under the NASDAQ standards is required. Rule 4350(d)	  	Audit Committee . We have an
audit committee comprised of
three members. Each member of
the audit committee is
independent, as independence is
defined under the Mexican
Securities Market Law, and also
meets the independence
requirements of Exchange Act
Rule 10A-3. Our audit
committee operates primarily
pursuant to Mexican Securities
Market Law and our by-laws.
For a detailed description of the
duties of our audit committee,
see “Management—Audit
Committee” and “Description of
Capital Stock—Committees of
the Board of Directors.”	
			
Equity Compensation Plans . Equity compensation plans require shareholder approval, subject to limited exemptions. §§303A.08 & 312.03	  	Equity Compensation Plans . Equity compensation plans require shareholder approval, subject to limited exemptions. Rule 4350(i)(1)(A)	  	Equity Compensation Plans .
Shareholder approval is required
for the adoption and amendment
of an equity-compensation plan
based upon the recommendation
of our board of directors and the
opinion of our compensation
committee.	
 
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NYSE Standards	  	NASDAQ Standards	  	Our Corporate Governance Practices	
Shareholder Approval for Issuance of Securities . Issuances of securities(1) that will result in a change of control of the issuer,(2) that are to a related party or someone closely related to a related party,(3) that have voting power equal to at least 20% of the outstanding common stock voting power before such issuance or(4) that will increase the number of shares by at least 20% of the number of outstanding shares before such issuance require shareholder approval. §§312.03(b)-(d)	  	Shareholder Approval for Issuance of Securities . Issuances of securities (1) that will result in a change of control of the issuer, (2) in connection with certain acquisitions of the stock or assets of another company or (3) in connection with certain transactions other than public offerings require shareholder approval. Rules 4350(i)(1)(B)-(D)	  	Shareholder Approval for
Issuance of Securities . Mexican
law and our by-laws require our
shareholders to authorize any
share issuance. Any issuance of
shares is subject to mandatory
preemptive rights, except in the
event of a public offering and
other limited circumstances.
Shares issued that have cleared
preemptive rights or that are the
subject of public offerings, may
be allocated as a result of a
resolution from our directors.
Shares repurchased by us in the
open market may be placed
again based upon resolutions by
our directors.	
			
Code of Business Conduct and Ethics . Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers. The code must contain compliance standards and procedures that will facilitate the effective operation of the code. §303A.10	  	Code of Business Conduct and Ethics . Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver and the reasons for such waiver for directors or executive officers. The code must include an enforcement mechanism. Rule 4350(n)	  	Code of Business Conduct and
Ethics . We have adopted a code
of ethics, which has been
accepted by all of our directors
and executive officers and other
personnel.	
			
Conflicts of Interest . Determination of how to review and oversee related party transactions is left to the listed company. The audit committee or comparable body, however, could be considered the forum for such review and oversight. §307.00. Certain issuances of common stock to a related party require shareholder approval. §312.03(b)	  	Conflicts of Interest . Appropriate review of all related party transactions for potential conflict of interest situations and approval by an audit committee or another independent body of the board of directors of such transactions is required. Rule 4350(h)	  	Conflicts of Interest . In
accordance with Mexican law
and our by-laws, our board of
directors is required to approve,
on a case-by-case basis,
transactions involving a conflict
of interest (other than
transactions in the ordinary
course of business that satisfy
our procedures), based upon the
opinion of our corporate
governance committee, that may
request the opinion of a third-
party expert. Pursuant to the
Mexican Securities Market Law,
our board of directors may
establish guidelines regarding
related party transactions that do
not require board of directors
approval.	
 
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NYSE Standards	  	NASDAQ Standards	  	Our Corporate Governance Practices	
			
Solicitation of Proxies . Solicitation of proxies and provision of proxy materials is required for all meetings of shareholders. Copies of such proxy solicitations are to be provided to NYSE. §§402.00 & 402.04	  	Solicitation of Proxies . Solicitation of proxies and provision of proxy materials is required for all meetings of shareholders. Copies of such proxy solicitations are to be provided to NASDAQ. Rule 4350(g)	  	Solicitation of Proxies . We are
required under Mexican law to
solicit proxies and provide
proxy materials for meetings of
shareholders. In accordance with
Mexican law and our by-laws,
we are also required to inform
shareholders of all meetings by
notice provided in newspapers
of wide distribution in Mexico,
and which specify the
requirements for admission to
the meeting, provides a
mechanism by which
shareholders can vote by proxy,
and makes proxies available.
Shareholders that are Mexican
investors and are entitled to
vote, may attend a shareholders’
meeting and cast votes at such
meeting. Under the deposit
agreement relating to the ADSs,
holders of the ADSs receive
notices of shareholders’
meetings. As foreign investors,
holders of ADSs (or CPOs
underlying the securities) are not
entitled to vote at our
shareholders’ meetings.	
			
	  	Peer Review . A listed company must be audited by an independent public accountant that (i) has received an external quality control review by an independent public accountant (“peer review”) that determines whether the auditor’s system of quality control is in place and operating effectively and whether established policies and procedures and applicable auditing standards are being followed or (ii) is enrolled in a peer review program and within 18 months receives a peer review that meets acceptable guidelines. Rule 4350(k)	  	Peer Review . Under Mexican
law we must be audited by a
public accountant that qualifies
as independent, and satisfies the
requirements specified under
applicable law, maintaining
certain quality standards.	
 
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 PRINCIPAL AND SELLING SHAREHOLDERS
Our Principal Shareholders
Our shareholders are Mexican investors, investment funds managed by Discovery Americas and Columbia Equity Partners, or Discovery Air, investment funds managed by Blue Sky Investments, and investment funds managed by Indigo Partners LLC, or Indigo. Our shareholders have a long history of investing in Mexico and some of them have experience in the airline industry by having formed, or by holding interests in, Avianca-TACA, Spirit, Tiger and Wizz.
Major Shareholders and Share Ownership
The following table sets forth information with respect to beneficial ownership of our capital stock, after giving effect to the stock split described in note 18 to our consolidated financial statements included elsewhere in this prospectus but without giving effect to the capital increase relating to the global offering, by:
 
 	•	 	each person that is a beneficial owner of 5% or more of our outstanding shares of capital stock;	
 
 	•	 	each of our executive officers;	
 
 	•	 	each of our directors;	
 
 	•	 	all of our executive officers and directors as a group; and	
 
 	•	 	each other selling stockholder.	

 	 	Common Stock	 	
Shareholders	 	Beneficial Ownership	 	 	Shares
Underlying CPOs
Being Offered (1)	 	Beneficial Ownership
After the Offering	 	
 	 	Number	 	 	Percentage	 	 		 	Number	 	 	Percentage	 	
5% Shareholders:	 	 	Series A	  	 	 	Series B	  	 	 	Series A	  	 	 	Series B	  	 	 	Series A	  	 	Series B	 	 	Series A	  	 	 	Series B	  	 	 	Series A	  	 	 	Series B	  	
Blue Sky Investments, S.à. r.l. (2)	 	 	166,380,162 	(6)  	 	 	44,857,124	  	 	 	19.84	% 	 	 	5.35	% 	 	 	36,803,087	  	 		 	 	129,577,075	  	 	 	44,857,124	  	 	 	12.96	% 	 	 	4.49	% 	
Discovery Air and other funds managed by Discovery Americas (3)	 	 	197,117,778 	(6)  	 	 	45,968,598	  	 	 	23.50	% 	 	 	5.48	% 	 	 	36,038,513	  	 		 	 	161,079,265	  	 	 	45,968,598	  	 	 	16.12	% 	 	 	4.60	% 	
Funds managed by Indigo (4)	 	 	160,214,262 	(6)  	 	 	43,194,749	  	 	 	19.10	% 	 	 	5.15	% 	 	 	30,156,187	  	 		 	 	130,058,075	  	 	 	43,194,749	  	 	 	13.01	% 	 	 	4.32	% 	
Named Executive Officers and Directors:	 				 				 				 				 				 		 				 				 				 				
William A. Franke (4)	 	 	160,214,262 	(6)  	 	 	43,194,749	  	 	 	19.10	% 	 	 	5.15	% 	 	 	30,156,187	  	 		 	 	130,058,075	  	 	 	43,194,749	  	 	 	13.01	% 	 	 	4.32	% 	
Pedro Carlos Aspe Armella	 	 	12,614,303	  	 	 	—  	 	 	 	1.50	% 	 	 	—  	 	 	 	1,870,120	  	 		 	 	10,744,183	  	 	 	—  	 	 	 	1.07	% 	 	 	—  	 	
Harry Krensky (3)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
All Executive officers and directors as a group (three persons) (5)	 	 	25,164,126	  	 	 	—  	 	 	 	3.00	% 	 	 	—  	 	 	 	3,730,681	  	 		 	 	21,433,445	  	 	 	—  	 	 	 	2.14	% 	 	 	—  	 	
Other Selling Shareholders:	 				 				 				 				 				 		 				 				 				 				
Emilio Diez Barroso Azcárraga	 	 	37,843,715	  	 	 	—  	 	 	 	4.51	% 	 	 	—  	 	 	 	5,610,480	  	 		 	 	32,233,235	  	 	 	—  	 	 	 	3.22	% 	 	 	—  	 	
Ignacio Guerra Pellegaud	 	 	37,843,715	  	 	 	—  	 	 	 	4.51	% 	 	 	—  	 	 	 	5,610,480	  	 		 	 	32,233,235	  	 	 	—  	 	 	 	3.22	% 	 	 	—  	 	
Alfredo Castellanos Heuer	 	 	252,278	  	 	 	—  	 	 	 	0.03	% 	 	 	—  	 	 	 	37,401	  	 		 	 	214,877	  	 	 	—  	 	 	 	0.02	% 	 	 	—  	 	
María Eugenia Braña Escalera	 	 	756,834	  	 	 	—  	 	 	 	0.09	% 	 	 	—  	 	 	 	756,834	  	 		 	 	—  	  	 	 	—  	 	 	 	0.00	% 	 	 	—  	 	
Sergio Sánchez García	 	 	252,278	  	 	 	—  	 	 	 	0.03	% 	 	 	—  	 	 	 	37,401	  	 		 	 	214,877	  	 	 	—  	 	 	 	0.02	% 	 	 	—  	 	
Carlos Fernández González	 	 	12,614,303	  	 	 	—  	 	 	 	1.50	% 	 	 	—  	 	 	 	1,870,120	  	 		 	 	10,744,183	  	 	 	—  	 	 	 	1.07	% 	 	 	—  	 	
Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as trustee of the trust “DAIIMX/VOLARIS” number F/1405 (3)	 	 	16,719,261	  	 	 	—  	 	 	 	1.99	% 	 	 	—  	 	 	 	2,478,696	  	 		 	 	14,240,565	  	 	 	—  	 	 	 	1.42	% 	 	 	—  	 	

(1)	Assumes no exercise of the underwriters’ over-allotment options. The selling shareholders have granted, pro rata to the number of Series A shares that they are selling in the global offering, to the international underwriters and the Mexican underwriters under the respective underwriting agreements over-allotment options for a total of 42,857,250 Series A shares, some of which may be in the form of ADSs.	
 
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(2)	Consists of 44,857,124 Series B shares and 166,380,162 Series A shares (underlying CPOs) held by Blue Sky Investments, S.à r.l. Rodrigo Antonio Escobar Nottebohm and Christophe Gaul are the managers of Blue Sky Investments, S.à r.l. and share voting and investment power over the shares held by Blue Sky Investments, S.à r.l. Messrs. Escobar Nottebohm and Gaul disclaim beneficial ownership of the shares held by Blue Sky Investments, S.à r.l. except to the extent of their respective individual pecuniary interests in these shares. Blue Sky Investments, S.à r.l. has a principal business address at: 17, rue des Jardiniers, L-1835 Luxembourg.	
(3)	Consists of 45,968,598 Series B shares and 192,014,186 Series A shares (deposited in the CPO trust) held by Discovery Air Investments, L.P., and 5,103,592 Series A shares held by HSBC México, S.A., as trustee of the trust F/262374 (“Discovery Americas II Mex”). In addition, Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as trustee of the trust “DAIIMX/VOLARIS” number F/1405 holds 16,719,261 Series A shares, of which HSBC México, S.A., as trustee of the trust F/262374 (“Discovery Americas II Mex”), is the beneficial owner pursuant to a call option that expires in 2018. If the call option is not exercised by the expiration date, then the shares will be mandatorily exchanged on such date. Harry Krensky has management responsibilities in respect of Discovery Air Investments, L.P. that include voting the Discovery Air Investments, L.P.’s ownership interest in Volaris, but he does not have sole power to dispose of such interest and he disclaims any beneficial ownership nor any voting rights on the shares held by Discovery Americas II Mex. The investment committees of the respective Discovery Americas funds have dispositive power over these shares. Discovery Air has a principal business address at: c/o Discovery Air, 189 Baldwin Road, Mt. Kisco, NY 10549.	
(4)	Consists of 42,194,100 Series B shares and 156,503,035 Series A shares (deposited in the CPO trust) held by Indigo Mexico Cöoperatief U.A., and 1,000,649 Series B shares and 3,711,227 Series A shares (deposited in the CPO trust) held by Long Bar LatAm, LLC. William A. Franke is the managing member of a fund that is the general partner of Indigo Mexico Cöoperatief U.A, and is manager of a fund that is the manager of Long Bar LatAm, LLC and as such, has voting and dispositive power over these shares. Mr. Franke disclaims beneficial ownership of the shares held by these entities except to the extent of any pecuniary interest therein. Each entity listed herein whose shares are beneficially owned by Indigo has a principal business address at: c/o Indigo Partners, 2525 East Camelback Road, Suite 800, Phoenix, Arizona 85016.	
(5)	Certain executive officers benefit from a share incentive plan pursuant to which they have the right to receive an aggregate of 25,164,126 Series A shares, representing 3.0% of our outstanding capital stock. Such shares are fully paid and held in trust for the benefit of certain of our executive officers. The shares will accrue any dividends paid by us during the time that they are deposited in the trust and prior to their release by the trustee to us. See “Management—Management Incentive Plan.”	
(6)	Series A shares will be deposited into the CPO trust and the shareholders thereof will hold CPOs representing a financial interest in such Series A shares.	
For additional disclosure about the selling shareholders and their relationship with the broker dealers, see “Underwriting.”
Registration Rights
We have granted the registration rights described below to our principal shareholders, to register shares of capital stock (and/or CPOs having such shares as underlying securities) owned by each of them after the offering with the Securities and Exchange Commission under the Securities Act, pursuant to the terms of a registration rights agreement filed as an exhibit to the registration statement which includes this prospectus, or the Registration Rights Agreement. No registration rights are necessary or will be granted to our principal shareholders in respect of the registration of our shares with the RNV maintained by the CNBV, because all of our Series A shares will be registered thereat concurrently with the offering, and such registration will be updated, from time to time, as required under applicable Mexican law.
The following description of the terms of the Registration Rights Agreement is intended as a summary only and is qualified in its entirety by reference to the copy filed as an exhibit to the registration statement which includes this prospectus.
Demand and Short-Form Registration Rights
After the completion of the global offering, our principal shareholders will be entitled to certain demand and short-form registration rights. At any time at least 180 days following the consummation of the global offering, the holders of at least a majority of the shares (and/or CPOs having such shares as underlying securities) subject to the registration rights can, on not more than two occasions, request that we register all or a portion of their shares (and/or CPOs having such shares as underlying securities) under the Securities Act.
In addition, following the global offering, these holders will be entitled to certain short-form registration rights. The holders of shares (and/or CPOs having such shares as underlying securities) with a proposed aggregate offering price of at least U.S.$20 million at the time of the request may make a written request that we register their shares (and/or CPOs having such shares as underlying securities) on a short form registration, if we are eligible to file a registration statement on Form F-3. These holders may make an unlimited number of requests for registration on Form F-3. However, we will not be required to effect a demand or short-form registration within 90 days after the effective date of a previous demand or short-form registration.
 
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Moreover, once every 12 months, we may postpone for up to six months the filing or the effectiveness of a registration statement for a demand or a short-form registration, if our board of directors determines that such registration would have a material adverse effect on any of our proposals or plans to engage in any acquisitions of assets, merger, consolidation, tender offer or any other material transaction.
Piggyback Registration Rights
At any time at least 180 days following the consummation of the global offering, in the event that we propose to register any of our securities under the Securities Act, our principal shareholders will be entitled to certain “piggyback” registration rights allowing the holder to include their shares (and/or CPOs having such shares as underlying securities) in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act (pursuant to a demand or short-form registration, or pursuant to a registration on Form F-4 or F-8 or any successor or similar forms), our current principal shareholders holding these shares (and/or CPOs having such shares as underlying securities) are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares (and/or CPOs having such shares as underlying securities) included in the registration, to include their shares (and/or CPOs having such shares as underlying securities) in the registration.
Expenses of Registration, Restriction and Indemnification
We will pay all registration expenses, including the legal fees of one counsel for all holders under the Registration Rights Agreement. In addition, we will reimburse such holders for the reasonable fees and disbursements of each additional counsel retained for the purpose of rendering any legal opinion if and to the extent required by underwriters or us.
The demand, short-form and piggyback registration rights are subject to customary restrictions such as blackout periods and any limitations on the number of shares (and/or CPOs having such shares as underlying securities) to be included in the underwritten offering imposed by any lead underwriter. The Registration Rights Agreement also contains indemnification provisions that we believe are customary for similar transactions.
Significant Changes in Share Ownership
On July 16, 2010 each of Corporativo Vasco de Quiroga, S.A. de C.V. and Sinca Inbursa, S.A. de C.V. sold their shares, which together represented 50% of our outstanding capital stock.
Differences in Voting Rights
See “Description of Capital Stock.”
 
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 RELATED PARTY TRANSACTIONS
We have engaged in a number of transactions with related parties.
Aeroman
Aeroman is a related party because Roberto José Kriete Ávila, a member of our board of directors, and members of his immediate family are shareholders of Aeroman. We entered into an aircraft repair and maintenance service agreement with Aeroman on March 6, 2007. This agreement provides that we have to use Aeroman, exclusively for our aircraft repair and maintenance services, subject to availability. Under this agreement, Aeroman provides us with inspection, maintenance, repair and overhaul services for our aircraft. We make payments under this agreement depending on the services performed. This agreement is for a 10 year term. As of December 31, 2012 and 2011, the balances due under our agreement with Aeroman were Ps.3.4 million and Ps.0.6 million, respectively. We also incurred expense under this agreement of Ps.135.6 million and Ps.72.9 million for the years ended December 31, 2012 and 2011, respectively.
Grupo TACA
Grupo TACA, together with Technical and Training Services, S.A. de C.V. and Aeroman, are a related party because Roberto José Kriete Ávila is a member of our board of directors and a shareholder of each of these companies. In the ordinary course of our business, we utilize Grupo TACA’s Airbus A320 full flight simulator and Airbus A320 virtual procedure trainers for the training of our pilots. As of December 31, 2012, our balance due under this agreement was Ps.3 thousand and we incurred an expense under this agreement of Ps.0.3 million and Ps.0.4 million for the year ended December 31, 2012 and 2011 respectively.
We have received consulting, training and technical support from Grupo TACA in the past, for which we paid fees of Ps.1 million in 2011. As of December 31, 2012, we had no balance due in connection therewith and we did not incur any expense thereunder for the year ended December 31, 2012.
IKÉ
ARSA Asesoría Integral Profesional, S.A. de C.V. is a related party because Discovery Americas I, LP, an affiliate of Discovery Air Investments, LP, one of our principal shareholders, is also a shareholder of ARSA Asesoría Integral Profesional, S.A. de C.V. We have entered into an advertising agreement with ARSA Asesoría Integral Profesional, S.A. de C.V. Under this agreement, we advertise and offer optional and additional travel insurance commercialized by IKÉ to our passengers. As of December 31, 2012, the balance due under this agreement to us from ARSA Asesoría Integral Profesional, S.A. de C.V. was Ps.2.2 million and Ps.2.6 million in 2011. We received Ps.44.2 million as payment of advertising commissions under this agreement for the year ended December 31, 2012 and Ps.23.4 million in 2011.
Human Capital International
We entered into a professional services agreement with Human Capital International HCI, S.A. de C.V. (invoiced through Expediente, S.A. de C.V.), or Human Capital International, on December 15, 2011, for the selection and hiring of executives. Rodolfo Montemayor Garza, member of our board of directors, is a founder and chairman of the board of directors of Human Capital International. As of December 31, 2012, our balance due under this agreement was Ps.7 thousand and we accrued an expense under this agreement of Ps.0.6 million for the year ended December 31, 2012.
Evercore Partners
Evercore Partners, one of the underwriters of this offering, is a related party because Pedro Carlos Aspe Armella, a shareholder and the co-chairman of its board of directors, has been one of our directors since the date
 
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we were founded and was the chairman of our board of directors until 2011. For more information on our underwriting arrangement with Evercore Partners in connection with this offering see, “Underwriters.”
Pasprot
Pasprot is a related party because Pedro Carlos Aspe Armella, shareholder of 99% of its capital stock, has been one of our directors since the date we were founded and was the chairman of our board of directors until 2011. On May 12, 2009, we entered into a loan agreement with Pasprot which provides for a general corporate purpose loan of Ps.3.3 million. We intend to use a portion of the net proceeds from the global offering to prepay this loan.
 
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 DESCRIPTION OF CAPITAL STOCK
The following information describes our capital stock that will be outstanding after the offering and provisions of our by-laws that will be in effect upon the completion of the global offering. This description may not contain all of the information that is important to you. To understand them fully, you should read our by-laws, a copy of which is filed with the SEC as an exhibit to the registration statement of which this prospectus is a part. The following descriptions are qualified in their entirety by reference to the by-laws and to the applicable provisions of Mexican law.
General
We are currently incorporated under the name Controladora Vuela Compañía de Aviación, S.A.B. de C.V., as a variable capital investment promotion stock corporation, under the laws of Mexico. Our shareholders have passed resolutions pursuant to which they approved our adoption of the Sociedad Anónima Bursátil de Capital Variable form, and approved the amendment of our by-laws to comply with the Mexican Securities Market Law. A copy of our by-laws as amended has been filed with the CNBV and the Mexican Stock Exchange and is available for inspection at the Mexican Stock Exchange and at the Mexican Stock Exchange’s website: www.bmv.com.mx (the contents of which are not a part of, and are not incorporated by reference into, this Prospectus), and an English translation thereof will be filed with the SEC and will be available at: www.sec.gov (the contents of which are not a part of, and are not incorporated by reference into, this Prospectus). Our corporate domicile is Mexico City, Federal District and our headquarters are located at Av. Antonio Dovalí Jaime No. 70, 13th Floor, Tower B, Colonia Zedec Santa Fe Mexico, D.F. 01210.
Outstanding Capital Stock
Our capital stock is divided into two series of shares, Series A shares and Series B shares. Series A shares are common shares and may only be owned directly by Mexican individuals or entities controlled by Mexican individuals. Series B Shares are common shares and may be purchased by Mexican or non-Mexican individuals or entities.
Series B shares may be convertible at any time into Series A shares pursuant to a mechanism set forth in our by-laws. Series A shares may underlie CPOs, but while Series B shares are not transferable to third parties (other than our principal shareholders or their affiliates) as Series B shares, may not represent more than 49% of our outstanding capital stock that is not underlying CPOs and will maintain minority rights provided for in our by-laws so long as Series B shares represent at least 12% of our outstanding capital stock. The Series B shares will be automatically converted into Series A shares upon their transfer to a third party (other than our principal shareholders or their affiliates).
Holders of Series B shares have the right to appoint three directors, so long as such Series B shares represent 12% or more of our outstanding capital stock. The Series B shares will not be listed on the Mexican Stock Exchange or any other stock market nor registered in the Mexican National Securities Registry.
Since we are a variable capital stock corporation, our capital stock must have a fixed portion, represented by Series A shares and may have a variable portion represented both by Series A shares and Series B shares. Our by-laws set forth that Series B shares may not represent more than 49% of our outstanding capital stock that is not underlying CPOs at any time. Upon completion of the global offering, our outstanding capital stock will consist of 865,494,296 Series A shares and 134,020,471 Series B shares. All or a portion of our Series A shares may underlie CPOs and can be purchased by non-Mexican investors.
Upon the consummation of the offering our current non-Mexican shareholders will be the holders of all the outstanding Series B shares and a certain number of CPOs and our current Mexican shareholders will hold Series A shares directly.
 
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Non-Mexican investors will only be entitled to hold Series A shares through CPOs (including CPOs in the form of ADSs), which will give non-Mexican investors economic rights but not voting rights. We only intend to sell CPOs in the form of ADSs, not CPOs or Series A shares, in the international offering.
We have obtained authorization from the Mexican Ministry of Economy ( Secretaría de Economía ) to issue up to 90% of our outstanding shares representing capital stock in the form of CPOs.
Changes to Capital Stock
The fixed portion of our capital stock may be increased or decreased by a resolution adopted at a general extraordinary shareholders’ meeting and upon amendment of our by-laws. The variable portion of our capital stock may be increased or decreased by a resolution adopted at a general ordinary shareholders’ meeting without amending our by-laws. Increases or decreases in the fixed or variable portion of the capital stock must be recorded in our registry of capital variations. New shares cannot be issued unless the then-issued shares have been paid in full.
Registration and Transfer
Our shares are evidenced by share certificates in registered form. Our shareholders may hold their Series A shares in the form of physical certificates if they are Mexican investors (although no Series A shares are being offered in the international offering), or through Series A (in the case of Mexican investors) or CPOs (in the case of non-Mexican investors) that are maintained in book-entry form with institutions which have accounts with the Mexican depositary institution, S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., or Indeval. The CPO trustee will be the holder of record of the Series A shares underlying our CPOs. Accounts may be maintained at Indeval by brokers, banks and other financial institutions and entities authorized for this purpose. We maintain a stock registry and only those persons listed in such stock registry and holding certificates issued in their name as registered holders, or persons holding Series A shares or CPOs through institutions that maintain accounts with Indeval, will be recognized as our shareholders.
Pursuant to Mexican law, any transfer of shares must be registered in our stock registry, if effected physically, or through book entries that may be traced back from our stock registry to the records of Indeval, if effected through book-entry CPOs or Series A shares.
Change of Control Provisions
Subject to certain exceptions (including those applicable to transfers or acquisitions or certain other transactions by or among our current shareholders), our by-laws require that any acquisition of our Series A shares (whether directly or by acquiring ADSs or CPOs), resulting in beneficial ownership of shares representing 5% or more of our outstanding capital stock, or any proposal by any person or group of persons to enter into an agreement among shareholders that would result in such person or group of persons effectively having control of the voting rights of 20% or more of our outstanding capital stock or will result in a change of control, will require the prior approval of our board of directors. In the event that approval is not granted, our board of directors or our shareholders may decide, among other things, to require any such person or group of persons to reverse the transaction or to transfer the Series A shares (whether held directly or through ADSs or CPOs) to a third party interested in acquiring the securities at a reference price specified by our board of directors. In addition, such person or group of persons desiring to purchase 5% or more of our outstanding capital stock will be required to follow certain procedures, including observing certain time periods specified in our by-laws.
Any potential purchaser who proposes to acquire our Series A shares (whether directly or by acquiring ADSs or CPOs), resulting in beneficial ownership of 20% or more of our outstanding capital stock, will be required to make a tender offer for 100% of our outstanding capital stock (including any Series A shares evidenced by CPOs or ADSs) at a price at least equal to the highest of (i) the most recent publicly reported book value per share, (ii) the highest trading price of our Series A shares on the Mexican Stock Exchange within the
 
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365 days prior to the request for approval or approval of the board of directors of the relevant transaction, and (iii) the highest price per share or CPO, as the case may be, paid by the purchaser or, in the case of the ADSs the equivalent thereto, plus, in each case, a 30% premium or a different premium determined by our board of directors, considering the opinion of a reputable investment bank.
Any acquisition of our Series A shares, CPOs or ADSs in contravention of the procedures described above will result in the purchaser not having any voting rights in respect to the purchased securities. No transfer in breach of these provisions will be registered in our stock registry.
Shareholders’ Meetings
Calls. Under Mexican law and our by-laws, shareholders’ meetings may be called by:
 
 	•	 	our board of directors, the president of our board of directors or the secretary of the board of directors;	
 
 	•	 	shareholders representing at least 10% of our outstanding capital stock who may request that the president of any of the board of directors or the audit committees call a shareholders’ meeting;	
 
 	•	 	any shareholder, provided that no annual ordinary meeting has been held for two consecutive years or the annual shareholders’ meeting did not address the matters required to be addressed in the annual shareholders’ meetings;	
 
 	•	 	a Mexican court of competent jurisdiction, in the event the board of directors does not comply with a valid request of the shareholders described in the two bullet points above; and	
 
 	•	 	the audit committee and the corporate governance committee.	
Calls for shareholders’ meetings will be required to be published in the Official Gazette of the Federation or in a newspaper of general circulation of our corporate domicile, such as El Universal , Reforma or El Financiero at least 15 days before the scheduled date of the shareholders’ meeting in the case of first call. Calls will have to contain the matters to be addressed at the meeting. From the date on which a call is published until the date of the corresponding meeting, all relevant information will be made available to the shareholders at our executive offices. To attend a shareholders’ meeting, shareholders will have to be either registered in the stock registry, present evidence of the deposit of their certificates with a financial institution or deposit them with our secretary, or present certificates issued by the custodian of the holder of our Series A shares, together with an Indeval certification. Investors holding our CPOs may not vote nor cause the underlying Series A shares to be voted by the CPO trustee.
Shareholders’ Meetings. General shareholders’ meetings may be general ordinary shareholders’ meetings or general extraordinary shareholders’ meetings. Shareholders may also hold special meetings for classes of shares outstanding (as for example, meetings of Series B shareholders, as a means to exercise their rights).
General ordinary shareholders’ meetings will be those called to discuss any issues not reserved for extraordinary meetings. General ordinary shareholders’ meetings will have to be held at least once a year, during the first four months following the end of each fiscal year to:
 
 	•	 	approve financial statements for the preceding fiscal year;	
 
 	•	 	discuss and approve the audit and corporate governance committees’ annual reports, and determine how to allocate net profits for the preceding year (including, if applicable, the payment of dividends);	
 
 	•	 	elect directors;	
 
 	•	 	appoint the president of the audit committee and the corporate governance committees;	
 
 	•	 	approve any increase or decrease in the variable portion of our capital stock and the issuance of the corresponding shares;	
 
 	•	 	approve the chief executive officer’s annual report together with the board of directors’ report and the board of directors’ opinion;	
 
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 	•	 	determine the maximum amount of resources allocated to share repurchases; and	
 
 	•	 	approve any transaction representing 20% or more of our consolidated assets during any fiscal year.	
General extraordinary shareholders’ meetings will be those called to consider:
 
 	•	 	an extension of our duration or voluntary dissolution;	
 
 	•	 	an increase or decrease in the fixed portion of our capital stock and the issuance of the outstanding stock;	
 
 	•	 	issuance of shares for purposes of a public offering;	
 
 	•	 	any change in our corporate purpose or nationality;	
 
 	•	 	any merger or transformation into another type of company;	
 
 	•	 	any issuance of preferred stock;	
 
 	•	 	the redemption of shares with retained earnings;	
 
 	•	 	any amendments to our by-laws including amendments to provisions addressing change of control;	
 
 	•	 	any other matters provided for by law or our by-laws; and	
 
 	•	 	the cancellation of the registration of shares at the Mexican National Securities Registry.	
A special shareholders’ meeting, comprising a single class of shares, may be called if an action is proposed to be taken that may only affect such class. After giving effect to the unanimous shareholder resolution proposed before the initiation of the offering we expect to hold special Series B shareholders’ meetings from time to time. The quorum for a special meeting of shareholders and the vote required to pass a resolution at a special Series B shareholders’ meeting are identical to those required for extraordinary meetings of shareholders, except that the calculations are based upon the number of outstanding Series B shares.
Except as described below, the attendance quorum for general ordinary shareholders’ meetings will be 51% of the outstanding capital stock, and resolutions may be taken by a majority of the capital stock represented therein. If the attendance quorum is not met upon the first call, a subsequent meeting may be called, the attendance quorum of which will also be 51% of the outstanding capital stock and resolutions may be taken by a majority of the capital stock represented at such meeting. Except as described below, the attendance quorum for general extraordinary shareholders’ meetings will be at least 75% of our outstanding capital stock. If an attendance quorum is not met upon the first call, a subsequent meeting may be called, at which at least 51% of the capital stock must be represented. In either case, resolutions must be taken by the vote of shares representing at least 50% plus one of the shares representing our outstanding capital stock, except for resolutions in respect to the cancellation of the registration of shares at the Mexican National Securities Registry which require that at least 95% of the outstanding capital stock vote in favor of such resolution.
As long as the Series B shares represent at least 12% of our outstanding capital stock, the attendance and affirmative vote of at least 75% of the outstanding Series B shares is required at all times, if the following matters are discussed and resolved:
 
 	•	 	amendment to our by-laws resulting in changes that affect the rights of Series B shareholders;	
 
 	•	 	cancellation of the representation of Series A shares at the Mexican National Securities Registry;	
 
 	•	 	mergers or spinoffs of Volaris;	
 
 	•	 	incurring indebtedness or granting guarantees if the Lease-Adjusted Net Debt to EBIDTAR ratio exceeds 4.25 times in 2013 and 3.25 times thereafter (Lease-Adjusted Net Debt is the sum of short-term and long-term debt, 7.0 times the aircraft rentals for the last four quarters, less cash and cash equivalents at the end of last quarter for which financial statements have been prepared); and	
 
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 	•	 	change of material accounting policies.	
Holders of our shares, will not have cumulative voting rights.
Voting Rights
Holders of ADSs and CPOs will not be entitled to vote, at any time, the underlying Series A shares. Mexican holders of Series A shares will be entitled to vote their shares on all matters. Holders of Series B shares will be entitled to vote their shares on all matters and will have the specific voting rights described under “—Shareholders’ Meetings.”
Series A shares underlying the CPOs and CPOs underlying the ADSs will be voted by the CPO trustee in the same manner as the majority of Series A shares votes cast at the relevant shareholders’ meeting under all circumstances.
Election of Directors
Our board of directors is currently comprised of eleven principal members and seven alternate members. Three members of our board of directors currently qualify as independent. Whether a director qualifies as independent must be determined by our shareholders (at the general shareholders’ meeting at which the director is elected), and such determination may be challenged by the CNBV within 30 days following the date in which the appointment of the director is notified to the CNBV. The CNBV may only challenge the appointment after a hearing with us and the affected director. Our officers, individuals who have a material influence on us or authority to direct our management or business decisions, and individuals who are part of our group of controlling shareholders may not be deemed independent directors.
Under our by-laws, Series B shareholders will have the right to appoint three directors as long as the Series B shares represent at least 12% of our outstanding capital stock. If the Series B shares, which are convertible into Series A Shares, represent less than 12% of our outstanding capital stock, the right to appoint directors by Series B shareholders will be based on the Securities Market Law.
Under our by-laws and the Securities Market Law, any shareholder or group of shareholders representing 10% of our outstanding capital stock, have the right to appoint one director for each such 10% ownership stake.
Authority of the Board of Directors
Our management is entrusted to a chief executive officer and a board of directors. The board of directors sets forth the guidelines and general strategy for the conduct of our business and supervises the execution thereof.
Pursuant to the Mexican Securities Market Law and our by-laws, the board of directors must approve, among other matters:
 
 	•	 	our general strategy;	
 
 	•	 	the monitoring of our management and that of our subsidiaries;	
 
 	•	 	with prior input from the audit or the corporate governance committee, on a case-by-case basis (i) transactions with related parties, subject to certain limited exceptions, (ii) the election of our chief executive officer, his compensation and removal, and policies for the description and comprehensive remuneration of other executive officers, (iii) our guidelines for internal controls and internal audits, including those for our subsidiaries (iv) our accounting policies, (v) our financial statements, (vi) unusual or non-recurring transactions and any transactions or series of related transactions during any calendar year that involve (a) the acquisition or sale of assets with a value equal to or exceeding	
 
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 	5% of our consolidated assets, or (b) the giving of collateral or guarantees or the assumption of liabilities, equal to or exceeding 5% of our consolidated assets, and (vii) the selection of the external auditors;	
 
 	•	 	calling shareholders’ meetings and taking action based upon their resolutions;	
 
 	•	 	the annual submission to our general shareholders’ meeting of (i) the chief executive officer’s report and (ii) the opinion of the board of directors in respect of such report;	
 
 	•	 	creation of special committees and granting authority to such committees, provided that the committees will not have the authority to take action which by law or under our by-laws is expressly reserved to our shareholders or our board of directors;	
 
 	•	 	determining how to vote the shares that we hold in our subsidiaries; and	
 
 	•	 	policies for disclosure of information.	
Our by-laws provide that meetings of our board of directors are validly convened and held if a majority of the members or their respective alternates are present. Resolutions passed at these meetings will be valid if approved by a majority of the disinterested members of the board of directors (i.e. members that do not have a conflict of interest). The chairman of the board of directors will not have a tie-breaking vote.
Meetings of our board of directors may be called by (i) 25.0% of our board members, (ii) the president of the board of directors, and (iii) the president of the audit or the corporate governance committee.
Duty of Care and Duty of Loyalty
The Mexican Securities Market Law imposes duties of care and loyalty on directors.
The duty of care generally requires that our directors obtain sufficient information and be sufficiently prepared to act in our best interest. The duty of care is discharged, principally, by (i) requesting and obtaining from us all information that may be necessary to make decisions, (ii) obtaining information from third parties, (iii) requiring the attendance of, and information from, our officers that may be necessary to make decisions, and (iv) attending board meetings and disclosing to the board of directors material information in possession of the relevant director. Failure to act with care by a director subjects the relevant director to joint and several liability with other directors involved in the act, for damages and losses caused to us and our subsidiaries. An indemnity for claims related to a breach of a director’s duty of care has been incorporated into our by-laws. Furthermore, we carry insurance to protect our directors for breaches of their duty of care.
The duty of loyalty consists, primarily, of a duty to maintain the confidentiality of information received in connection with the performance of a director’s duties, to abstain from discussing or voting on matters where the director has a conflict of interest and to abstain from taking advantage of corporate opportunities resulting from its actions as a director. In addition, the duty of loyalty is breached if a shareholder or group of shareholders is knowingly favored.
The duty of loyalty is also breached if the director uses corporate assets or approves the use of corporate assets in violation of our policies, discloses false or misleading information, orders not to or causes the failure to, register any transaction in our records that could affect our financial statements, or causes material information not to be disclosed or to be modified.
The violation of the duty of loyalty will render the breaching director jointly and severally liable with all breaching directors, for damages and losses caused to us and to the persons we control. Liability may also arise if damages and losses result from benefits obtained by the directors or third parties as a result of activities carried out by such directors.
Claims for breach of the duty of care and the duty of loyalty may be brought solely for our benefit (as a derivative suit), as opposed to for the benefit of the claimant, and may only be brought by us or by shareholders
 
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or groups of shareholders representing at least 5.0% of our outstanding shares. Claims may be exercised by the trustee issuing CPOs or by holders of CPOs, in each case holding underlying shares representing at least 5% of our outstanding Series A shares.
As a safe harbor for the benefit of directors, the Mexican Securities Market Law provides that liabilities arising from a breach of the duty of care or the duty of loyalty will not arise if the director acted in good faith and (i) complied with applicable law and our by-laws, (ii) acted based upon facts and information provided by officers, external auditors or third-party experts, the capacity and credibility of which may not be the subject of reasonable doubt, and (iii) selected the more adequate alternative in good faith, or if the negative effects of the director’s decision could not have been reasonably foreseeable, based upon the then available information. Mexican courts have not yet interpreted the meaning of this provision and, as a result, the extent and enforceability of this safe harbor remains uncertain.
Under the Mexican Securities Market Law and our by-laws, our chief executive officer and our principal officers are also required to act for our benefit and not for the benefit of a shareholder or group of shareholders. Our officers are required to submit to the board of directors for approval, the principal strategies for our business and the business of the companies we control, to submit to the audit committee proposals relating to internal control systems, to prepare all material information related to our activities and the activities of the companies we control, to disclose all material information to the public, to maintain adequate accounting and registration systems and internal control mechanisms, to prepare and submit to the board the yearly financial statements, and to implement internal control mechanisms.
Committees of the Board of Directors
Like all public companies in Mexico, we are required to have an audit and corporate governance committee. The members of our audit and corporate governance committee must be independent members, elected by our board of directors except for the chairman who is elected by our shareholders. Our audit and corporate governance committee is required to prepare an annual report, to be submitted to ourboard of directors, that must include (i) a report of our internal control systems and our internal audit procedures and any deficiencies, (ii) the evaluation of our external auditors, (iii) the results arising from the review of our financial statements, and (iv) any amendments to our accounting policies. The quorum for any session of our audit and corporate governance committee is the majority of its members and decisions must be taken by majority of its members.
In addition, our audit and corporate governance committee has the following principal duties:
 
 	•	 	supervising and evaluating our external auditors and analyzing their reports (including their audit opinion);	
 
 	•	 	analyzing and supervising the preparation of our financial statements and making a recommendation to the board of directors for their approval;	
 
 	•	 	informing the board of directors of the status of our internal controls and internal audit and their adequacy;	
 
 	•	 	supervising the execution of related party transactions and transactions representing 20% or more of consolidated assets being undertaken pursuant to applicable law;	
 
 	•	 	requesting reports from our executive officers or independent experts whenever it deems appropriate;	
 
 	•	 	investigating and informing the board of directors of any irregularities that it may encounter;	
 
 	•	 	receiving and analyzing recommendations and observations made by the shareholders, members of the board of directors, executive officers or any third party and taking necessary action;	
 
 	•	 	calling shareholders’ meetings;	
 
 	•	 	supervising compliance by our chief executive officer of the instructions provided by our board or shareholders;	
 
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 	•	 	providing an annual report to the board in respect of our accounting policies, their sufficiency and adequacy, and consistency.	
 
 	•	 	rendering opinions to the board of directors in connection with the designation, compensation and removal of our chief executive officer and policies for the description and comprehensive remuneration of other executive officers;	
 
 	•	 	supervising and reporting on the performance of our key officers;	
 
 	•	 	rendering its opinion to the board of directors in connection with transaction with related parties;	
 
 	•	 	requesting opinions from independent third-party experts;	
 
 	•	 	calling shareholders’ meetings; and	
 
 	•	 	providing assistance to the board of directors with the preparation of reports for the annual shareholders’ meeting.	
We also maintain a compensation and nominations committee, which is comprised of, five non-independent members, as determined by our board of directors from time to time, appointed by our board of directors. We established a compensation and nominations committee pursuant to the unanimous resolutions adopted by our shareholders in June 2013.
The compensation committee is responsible for, among other things:
 
 	•	 	submitting proposals to the board of directors relating to the removal of officers within the first two corporate levels;	
 
 	•	 	proposing the creation, amendment or termination of any incentive plan for officers;	
 
 	•	 	consulting with third-party experts in connection with any issues related to compensation, organizational development, and other related matters;	
 
 	•	 	proposing compensation packages for officers within the first four corporate levels;	
 
 	•	 	proposing to our board of directors the entering into, amendment or termination of any collective bargaining agreements;	
 
 	•	 	informing our board of directors of any material contingencies; and	
 
 	•	 	submitting periodic reports to our board of directors.	
Preemptive Rights
Under Mexican law, our shareholders (holding shares directly or through CPOs) have preemptive rights for all share issuances except in the cases noted below. Generally, if we issue additional shares of capital stock, our shareholders will have the right to purchase the number of shares necessary (or CPOs, subject to applicable U.S. securities laws, representing such shares and subject to the CPO trustee being permitted to issue or release the necessary additional CPOs) to maintain their existing ownership percentage. Shareholders must exercise their preemptive rights within the time period set forth by our shareholders at the meeting approving the relevant issuance of additional shares. This period must be equal to at least 15 days following the publication of notice of the issuance in the Official Gazette of the Federation. Under Mexican law, shareholders cannot waive their preemptive rights in advance, and preemptive rights may not be represented by an instrument that is negotiable separately from the corresponding share.
The preemptive rights specified in the prior paragraph will not apply (i) in the case of shares issued in connection with mergers, (ii) in the case of resale of shares held in our treasury, as a result of repurchases of shares conducted on the Mexican Stock Exchange or otherwise, (iii) in the event that holders of our shares entitled to vote approve the issuance of the unsubscribed shares for purposes of a public offering at an
 
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extraordinary shareholders’ meeting called for such purpose provided requirements specified in Article 53 of the Mexican Securities Market Law are satisfied, and (iv) in respect of shares issued for conversion of any convertible securities.
If we issue new Series A shares for cash, in accordance with our by-laws and the CPO trust, non-Mexican holders of our CPOs (directly or through ADSs) may not exercise their preemptive rights, unless we cause the CPO trustee to issue additional CPOs (to the extent possible), to permit the non-Mexican holders of CPOs to exercise preemptive rights by purchasing and holding newly issued Series A shares through CPOs. Although we expect to take all measures necessary to maintain sufficient CPOs available to permit non-Mexican holders of CPOs to exercise preemptive rights in respect of underlying Series A shares, no assurances can be made that we will be able to do so, particularly because regulatory approvals in Mexico are necessary for the issuances of additional CPOs. Mexican holders of Series A shares may exercise their preemptive rights if we issue new Series A shares for cash. Non-Mexican holders of CPOs may suffer dilution if we issue new Series A shares in exchange for cash and CPOs are not available to represent the additional Series A shares.
Dividends
Our board of directors must submit our financial statements for the previous fiscal year, proposed and prepared by our chief executive officer and supplemented by a report of our board of directors, at our annual ordinary general shareholders’ meeting for approval. Once our shareholders approve our financial statements, they are required to allocate net profits for the previous fiscal year. Under Mexican law and our by-laws, prior to any distribution of dividends, 5% of our net earnings must be allocated to a legal reserve fund, until such legal reserve fund is equal to at least 20% of our paid-in capital stock. Additional amounts may be allocated to other reserve funds as the shareholders may determine, including the amount allocated to the reserve fund for the repurchase of shares. The remaining balance, if any, may be distributed as dividends.
Redemption
In accordance with our by-laws, shares representing our capital stock are subject to redemption in connection with either (i) a reduction of capital stock, or (ii) a redemption with retained earnings, which in either case must be approved by our shareholders. In connection with a capital reduction, the redemption of shares will be made pro rata among the shareholders but in no case will the redemption price be less than the book value of such shares as determined pursuant to our latest statements of financial position approved at a general ordinary shareholders’ meeting or by means of a tender offer conducted on the Mexican Stock Exchange at prevailing market prices, in accordance with the Mexican Corporations Law, the Mexican Securities Market Law and our by-laws.
Dissolution or Liquidation
Upon our dissolution or liquidation, our shareholders will appoint one or more liquidators at an extraordinary general shareholders’ meeting to wind up our affairs. All fully paid and outstanding shares of capital stock will be entitled to participate equally in any liquidating distributions.
Certain Minority Protections
Pursuant to the Mexican Securities Market Law and the Mexican Corporations Law, our by-laws include a number of minority shareholder protections. These minority protections will include provisions that permit:
 
 	•	 	holders of at least 10% of our outstanding capital stock:	
 
 	•	 	to request a call for a shareholders’ meeting;	
 
 	•	 	to request that resolutions with respect to any matter on which they were not sufficiently informed be postponed; and	
 
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 	•	 	to appoint one member of our board of directors and one alternate member of our board of directors.	
 
 	•	 	holders of 20% of our outstanding capital stock to oppose any resolution adopted at a shareholders’ meeting and file a petition for a court order to suspend the resolution temporarily, within 15 days following the adjournment of the meeting at which the action was taken, provided that (i) the challenged resolution violates Mexican law or our by-laws, (ii) the opposing shareholders neither attended the meeting nor voted in favor of the challenged resolution, and (iii) the opposing shareholders deliver a bond to the court to secure payment of any damages that we may suffer as a result of suspending the resolution, in the event that the court ultimately rules against the opposing shareholder; and	
 
 	•	 	holders of 5% of our outstanding capital stock may initiate a shareholder derivative suit against some or all of our directors, for violations of their duty of care or duty of loyalty, for the benefit of Volaris, in an amount equal to the damages or losses caused to us. Actions initiated on these grounds have a five year statute of limitations.	
Other Provisions
Foreign Investment Regulations
Mexico’s Foreign Investment Law restricts ownership by non-Mexicans of our capital stock to 49% of the capital stock not otherwise represented by CPOs. Our amended by-laws establish that only Mexican investors may acquire our Series A shares directly. Non-Mexican investors may acquire our Series B shares directly. As required by Mexican law, our by-laws provide that if a non-Mexican investor acquires a direct interest or participation in a Series A share representing the capital stock of our company at any time, such Series A share will be forfeited to the Mexican government. The Foreign Investment Law permits non-Mexican investors to hold our Series A shares indirectly through neutral shares or securities such as the CPOs.
Duration
Our corporate existence under our by-laws is indefinite.
Purchase of Shares by Us
We will be able to purchase our shares (or CPOs evidencing such shares) through the Mexican Stock Exchange at the prevailing market prices for the shares at the time of purchase. The economic and voting rights corresponding to repurchased shares will not be exercised during the period the shares are owned by us, and the shares will not be deemed outstanding for purposes of calculation any quorum or vote at any shareholders’ meeting. We will not be required to create a special reserve for the repurchase of shares and we will not require the approval of our board of directors to effect share repurchases. However, we will require the approval of our shareholders in respect of the maximum amount that may be used for share repurchases and our board of directors must appoint an individual or group of individuals for effecting share repurchases. Share repurchases will have to be made subject to the provisions of applicable law, including the Mexican Securities Market Law, and carried out, reported and disclosed in the manner specified by the CNBV. If we intend to repurchase shares representing more than 1% of our outstanding capital stock at a single trading session, we will be required to inform the public of such intention, at least ten minutes before submitting our bid. If we intend to repurchase shares representing 3% or more of our outstanding capital stock during any rolling period of twenty trading days, we will be required to conduct a public tender offer for such shares.
Purchases of Shares by our Subsidiaries
Our subsidiaries or other entities controlled by us may not purchase, directly or indirectly, shares representing our capital stock or shares of companies or entities that are our shareholders.
 
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Conflicts of Interest
Under Mexican law, any shareholder that has an opposing interest to ours, must abstain from discussing and voting on the relevant matter. Any such shareholder that votes in a transaction in which its interests conflict with our interest may be liable for damages and losses, but only if the transaction would not have been approved without such shareholder’s vote.
A member of the board of directors that has an opposing interest to ours must disclose such opposing interest and abstain from any deliberation or vote in connection therewith. A breach by any member of the board of directors of any such obligations may result in the director being liable for damages and losses.
Exclusive Jurisdiction
Our by-laws provide that, in connection with any controversy between our shareholders and us, or between our shareholders, in connection with any matter related to us, both we and our shareholders must submit to the jurisdiction of the courts of Mexico City, Federal District, Mexico.
Appraisal Rights
Whenever our shareholders approve a change in our corporate purpose, jurisdiction of organization or transformation from one corporate form to another, any shareholder entitled to vote that voted against the matters approved has the right to withdraw and receive the book value of its shares as set forth in the financial statements last approved by our shareholders, provided that the shareholder exercises this appraisal right within 15 days after the meeting at which the relevant matter was approved. Since holders of our CPOs may have no voting rights, appraisal rights will generally not be available to them.
Cancellation of Registration in the Mexican National Securities Registry
In accordance with our by-laws, and as set forth in the Mexican Securities Market Law, we will be required to make a public tender offer for the purchase of stock held by minority shareholders, in the event that the registration of our Series A shares with the Mexican National Securities Registry is cancelled, either as a result of our determination or by an order of the CNBV. Our controlling shareholders will be secondarily liable for these obligations. A controlling shareholder will be deemed to be a shareholder that holds a majority of our capital stock, has the ability to control the outcome of decisions made at a shareholders or board of directors meeting, or has the ability to appoint a majority of the members of our board of directors. The price at which the stock must be purchased is the higher of
 
 	•	 	the average quotation price on the Mexican Stock Exchange for the 30 days prior to the date of the tender offer, or	
 
 	•	 	the book value, as reflected in the report filed with the CNBV and the Mexican Stock Exchange.	
If the tender for cancellation is requested by the CNBV, it must be initiated within 180 days from the date of the request. If initiated by us, under the Mexican Securities Market Law, the cancellation must be approved by 95% of our shareholders.
Our board of directors must make a determination with respect to fairness of the tender offer price, taking into consideration the minority shareholders’ interest, and disclose its opinion within 10 business days from the commencement of the offering. The resolution of the board of directors may be accompanied by a fairness opinion issued by an expert selected by our audit committee. Directors and first level officers are required to disclose whether or not each of them will sell their shares in connection with the tender offer.
 
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 DESCRIPTION OF CPOS
The following information describes the CPOs that will be outstanding and provisions of the CPO trust and CPO deed that will be in effect upon the completion of the global offering. This description may not contain all of the information that is important to you. To understand it fully, you should read the CPO trust agreement and CPO trust deed, translated copies of which are filed with the SEC as an exhibit to the registration statement of which this prospectus is a part. The following descriptions are qualified in their entirety by reference to the CPO trust agreement and CPO trust deed and to the applicable provisions of Mexican law.
Overview
Under our by-laws and Mexican law, non-Mexican investors cannot directly hold Series A shares. However, Mexican law permits non-Mexican investors to hold our shares indirectly through neutral shares or securities. Because the CPO trust qualifies as a neutral investment trust under the Mexican Foreign Investment Law, non-Mexican investors can beneficially own our equity. However, all holders of CPOs will not have any rights to vote or to direct the CPO trustee to vote the Series A shares underlying the CPOs.
CPOs are negotiable instruments which must be issued by a financial institution acting as trustee under Mexican law. Series A shares will underlie each CPO. The CPO trust has a maximum term of 50 years. After such period has expired, the CPO trust can either be extended or terminated in accordance with its terms, or substituted by a new CPO trust. If the CPO trust is terminated, holders of CPOs that are non-Mexican investors will not be entitled to hold the underlying Series A shares directly and will be required to cause their interest in such shares to be sold to Mexican individuals or corporations.
The CPO trustee, Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Dirección Fiduciaria, will issue the CPOs pursuant to the following agreements:
 
 	•	 	the CPO trust agreement; and	
 
 	•	 	a CPO trust deed, pursuant to which the CPO trustee will issue CPOs in accordance with the CPO trust agreement and the CPO deed.	
Under Mexican law we are required to obtain the approval of the Ministry of Economy to create and execute the CPO trust agreement. We have obtained authorization from the Mexican Ministry of Economy ( Secretaría de Economía ) to issue up to 90% of our outstanding capital stock in CPOs. Non-Mexican holders of CPOs cannot direct the CPO trustee to vote the Series A shares underlying the CPOs. For all matters, the CPO trustee will vote the Series A shares underlying the CPOs, pursuant to the terms of the CPO trust agreement, which requires the CPO trustee to vote the corresponding Series A shares in the same manner as the majority of the outstanding Series A shares that are voted at the relevant meeting.
Registration and Authorization
We have obtained authorization from the Mexican Ministry of Economy ( Secretaría de Economía ) to issue up to 90% of our outstanding capital stock in CPOs, under which such CPOs are deemed as a neutral investment.
Deposit and Withdrawal of Shares
We, and some of our shareholders, will transfer Series A shares to the CPO trust prior to the offering, so that the CPO trustee may issue the corresponding CPOs. Initially, all of the CPOs may be evidenced by one or more certificates. Indeval and the CPO trustee will maintain records of ownership and transfer of ownership.
The Series A shares underlying the CPOs will be voted by the CPO trustee in the same manner as the majority of the outstanding Series A shares are voted at the relevant shareholders’ meeting.
 
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Investors who purchase CPOs in the offering contemplated in this prospectus (through ADSs) will not receive physical certificates evidencing their CPOs. However, CPO holders may request certification from their custodian, coupled with a certification from Indeval as to their ownership of CPOs. In connection with the issuance of ADSs, CPOs underlying ADSs will be credited by book-entry transfer to an account maintained with Indeval by Banco Inbursa, as custodian for the depositary in Mexico.
Non-Mexican holders of CPOs may not hold Series A shares directly, but they may transfer such CPOs to Mexican investors who will automatically hold the underlying Series A shares upon acquisition. Non-Mexican holders of ADSs may withdraw the underlying CPOs and hold them directly, but they may not withdraw the Series A shares underlying the CPOs underlying the ADSs; provided, however, that non-Mexican holders may be beneficial owners of Series A shares only in the event that the CPO trust is terminated and strictly for the purposes described in this prospectus.
Upon termination of the CPO trust, holders of CPOs must cause the Series A shares underlying the CPOs to be sold, create a new trust similar to the current CPO trust to deposit the Series A shares underlying the CPOs or extend the CPO trust, as a means to comply with our by-laws and Mexican foreign ownership laws.
Registration and Transfer
CPOs may only be held in book-entry form. The CPOs may be maintained in book-entry form by institutions that have accounts with Indeval, a securities depositary that acts as a clearinghouse, depositary, and custodian, as well as a settlement, transfer, and registration agent for transactions conducted on the Mexican Stock Exchange, eliminating the need for physical transfer of securities. Accounts may be maintained at Indeval by authorized brokers, banks and other financial institutions and entities.
Dividends and Other Distributions
If we declare and pay a dividend or a distribution on our Series A shares, holders of CPOs will be entitled to receive the dividend or the distribution in proportion to the number of Series A shares underlying their CPOs. Holders of CPOs would also be entitled to a proportional share of the proceeds from the sale of the Series A shares upon the termination of the CPO trust agreement, if applicable. According to Mexican law, dividends paid and received in pesos by the CPO trustee, may be paid to the depositary and converted into U.S. dollars for distribution. Also any dividends or other distributions from the CPO trust that CPO holders do not receive or claim within three years will become the property of the Mexican Ministry of Health ( Secretaría de Salud ).
Cash Dividends . The CPO trustee will distribute cash dividends and other cash distribution received on our Series A shares to holders of CPOs, including those represented by ADSs, in proportion to their holdings, in the same currency in which they were received. In the case of CPOs, the CPO trustee will distribute cash dividends and other cash distributions to the relevant custodian acting for the holder of CPOs. Cash dividends and other cash distributions on the shares represented by CPOs will be distributed to CPOs holders in U.S. dollars in accordance with the relevant deposit agreement to the extent dividends received in pesos may be freely convertible into U.S. dollars; if no such conversion may be made, the depositary will distribute the dividends in pesos or as otherwise permissible under Mexican law.
Stock Dividends. If we distribute our dividends in Series A shares, dividend shares in respect of Series A shares will be held in the CPO trust, and the CPO trustee will distribute additional CPOs to holders of CPOs, including those represented by ADSs, in proportion to their holdings.
If the CPO deed does not allow us to cause additional CPOs to be issued in an amount sufficient to represent the Series A shares paid as a dividend, we would be required to modify the CPO deed or enter into a new CPO deed to issue the number of CPOs necessary to represent the Series A shares issued as a dividend. If the CPO trustee receives a distribution in a form other than cash or additional Series A shares, the CPO trustee will make the distribution pursuant to the instructions of the technical committee.
 
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Preemptive Rights
Under Mexican law, our shareholders generally have preemptive rights. See “Description of Capital Stock—Preemptive Rights.” If we offer our shareholders the right to subscribe for additional Series A shares, the CPO trustee must make these rights available to holders of CPOs. We will place the additional Series A shares in the CPO trust, and the CPO trustee will release additional CPOs to each CPO holder who exercises the preemptive rights. If the CPO deed does not allow us to cause additional CPOs to be issued in an amount sufficient to represent the Series A shares subscribed and paid as a result of the exercise of preemptive rights, we will need to modify the CPO deed or enter into a new CPO deed that will permit us to issue the number of CPOs necessary to represent the Series A shares subscribed and paid as a result of the exercise of preemptive rights.
The CPO trustee will offer holders of CPOs preemptive rights only if the offer is legal and valid in the CPO holders’ country of residence. The sale in the United States of additional Series A shares in the form of CPOs would require registration under the Securities Act or an exemption therefrom.
Under Mexican law, preemptive rights may not be sold separately from shares. As a result, if the CPO trustee cannot offer preemptive rights or is effectively prohibited from disposing of preemptive rights, such holders would not receive the value of these rights, and their equity interest would be diluted.
If we issue new shares of Series A shares for cash, in accordance with our by-laws and the CPO trust, non-Mexican holders of the CPOs and ADSs may not be able to exercise their preemptive rights associated with Series A shares underlying such CPOs, unless a sufficient number of CPOs may be available for release under our CPO deed or unless we cause the CPO trustee to issue additional CPOs (to the extent possible), by amending the existing CPO deed or entering into a new CPO deed, to permit the non-Mexican holders of CPOs or ADSs to exercise preemptive rights by purchasing and holding newly issued Series A shares through CPOs. Although we expect to take all measures necessary to maintain sufficient CPOs available to permit non-Mexican holders of CPOs or ADSs to exercise preemptive rights, no assurances can be made that we will be able to do so, particularly because regulatory approvals in Mexico are necessary for the issuances of CPOs. To the extent preemptive rights are extended to holders of the CPOs and any of such holders exercises such rights, we will transfer the additional shares of Series A shares in the CPO trust, and the CPO trustee will release additional CPOs to each CPO holder who exercises the preemptive rights. See “Risk Factors—Risks related to our securities and the global offering—Preemptive rights may be unavailable to non-Mexican holders of the ADSs and CPOs and, as a result, they may suffer dilution.”
Changes Affecting the CPOs
As set forth in the CPO trust, the CPO trustee will, pursuant to the instructions of the technical committee, release additional CPOs or call for the surrender of outstanding CPOs to be exchanged for new CPOs should the following circumstances occur:
 
 	•	 	a split or a consolidation of our Series A shares;	
 
 	•	 	a capitalization affecting, or redemption of, our Series A shares;	
 
 	•	 	any other reclassification or restructuring of our Series A shares; or	
 
 	•	 	any merger, consolidation, or spin-off.	
The CPO trustee, as instructed by the technical committee, will also decide if any changes or required amendments must be made to the CPO trust agreement and the CPO trust deeds. If the CPO deed does not allow us to cause additional CPOs to be released in an amount sufficient to represent the Series A shares necessary to reflect the corporate events specified above, we will need to modify the CPO deed or enter into a new CPO deed that will permit us to issue the number of CPOs necessary to represent the Series A shares that reflect any such event. If we consolidate our capital stock in a way that is no longer consistent with the structure of the CPO trust,
 
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the CPO trustee, as instructed by the CPO trust’s technical committee, will determine how the corpus of the CPO trust should be modified to reflect such consolidation. If we call for a redemption of the Series A shares held in the CPO trust, the CPO trustee will follow the instructions of the CPO trust’s technical committee, and will act pursuant to applicable law, to determine which CPOs will be redeemed, in a number equal to the number of Series A shares held in the CPO trust called for redemption. The CPO trustee will then pay the holders of the redeemed CPOs their proportional share of the consideration.
Voting of the Series A shares
Holders of CPOs are not entitled to exercise any voting rights with respect to our Series A shares held by the CPO trustee. Voting rights attributable to Series A shares underlying CPOs are exercisable only by the CPO trustee.
With respect to any matters that are resolved at a general ordinary or extraordinary shareholders’ meeting, the CPO trustee will vote the corresponding Series A shares underlying CPOs in the same manner as the majority of the outstanding Series A shares voted at the relevant meeting.
Administration of the CPO Trust
The CPO trustee will administer the CPO trust under the direction of a CPO technical committee. The CPO technical committee is comprised of three members: two appointed by us and one appointed by the committee representing the holders of CPOs. Actions taken by the CPO technical committee must be approved by a majority vote of committee members. The CPO technical committee can also act without a meeting, if it has unanimous consent of its members. Among other matters, the CPO technical committee has the authority to instruct the CPO trustee to increase the maximum number of CPOs that may be issued, appoint a representative to vote the Series A shares deposited in the CPO trust and resolve questions not addressed in the CPO trust.
The Common Representative . We will appoint Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as the common representative of the holders of CPOs. The duties of the common representative include, among others:
 
 	•	 	verification of the due execution and terms of the CPO trust;	
 
 	•	 	verification of the existence of the Series A shares being held in the CPO trust;	
 
 	•	 	authentication, by its signature, of the certificates evidencing the CPOs;	
 
 	•	 	exercise the rights of CPO holders in connection with the payment of any dividend to which they are entitled;	
 
 	•	 	undertaking of any other action required to protect the rights, actions or remedies to which they are entitled;	
 
 	•	 	calling and presiding over general meetings of CPO holders; and	
 
 	•	 	execution of decisions adopted at general meetings of CPO holders.	
The common representative may ask the CPO trustee for all information and data necessary to satisfy its duties. The CPO holders may, by resolution at a general CPO holders’ meeting, revoke the appointment of the common representative, appoint a substitute common representative or instruct the common representative to take certain actions regarding the CPO trust.
General Meetings of CPO Holders . Under Mexican law, any individual holder or group of holders holding at least 10% of the outstanding CPOs may ask the common representative to call a general meeting of all CPO holders. The request must include the proposed agenda for the meeting. At least ten days before the relevant meeting, the common representative must publish announcements of the CPO general meetings in the Official Gazette of the Federation and in one of the newspapers of our domicile. The announcement must include the meeting’s agenda.
 
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In order for CPO holders to attend CPO general meetings, they must request a receipt of deposit from Indeval for their certificates and a certificate from the relevant custodian at least two days before the meeting.
At CPO general meetings, CPO holders will have one vote. Resolutions must be approved by a majority vote of the holders of CPOs present. A quorum is required at these meetings. For a meeting held upon first notice of the meeting, a quorum is met by holders representing at least a majority of the outstanding CPOs. If no quorum is present on first call, any CPO holders present at a subsequently called CPO general meeting will constitute a quorum. Duly adopted resolutions will bind all CPO holders, including absent and dissenting holders.
Some special matters must be approved by holders at a special CPO general meeting. These matters include the appointment and removal of the common representative and the granting of consents or waivers and the amendment of the CPO trust deed. At these special meetings, holders of at least 75% of the outstanding CPOs must be present to constitute a quorum at the first call. Resolutions with respect to these special matters must be approved by the majority vote of the CPOs entitled to exercise their vote at this meeting. If a quorum is not present, a reconvened special meeting may be called. At this reconvened meeting, a majority of the CPOs present, regardless of the percentage of outstanding CPOs represented at such meeting, may take action, by majority of holders of CPOs present.
Enforcement of Rights of CPO Holders
With certain limitations, CPO holders may individually and directly exercise certain rights by instituting a proceeding in a Mexican court of law. These rights include:
 
 	•	 	the right to cause the CPO trustee to distribute dividends or other distributions it has received;	
 
 	•	 	the right to cause the common representative to enforce and protect rights of CPO holders; and	
 
 	•	 	the right to bring action against the common representative, for civil liabilities in the event of willful misconduct.	
Disputes may only be submitted to courts located in Mexico City. All parties to the CPO trust agreement, including CPO holders, expressly agree that they will not submit disputes to courts located elsewhere.
Any non-Mexican who holds CPOs has agreed not to invoke the protection of its government. If a non-Mexican holder of CPOs invokes this protection, it will forfeit its CPOs to the Mexican government. In the opinion of Ritch Mueller, S.C., our Mexican counsel, a non-Mexican holder of CPOs may be deemed to have invoked the protection of its home government by, for example, asking its government to interpose a diplomatic claim against the Mexican government or by bringing suit in its home jurisdiction against the Mexican government.
Termination of the CPO Trust
The CPO trust agreement and the CPOs issued by the CPO trustee thereunder will expire 50 years after the date of execution of the CPO trust agreement, which is the maximum term permitted by Mexican law. At that time, the CPO trustee, pursuant to the instruction of the CPO trust’s Technical Committee, will (i) sell the Series A shares in the CPO trust, and then distribute the proceeds to CPO holders on a pro rata basis, (ii) extend the period for the CPO trust agreement, or (iii) create a new trust similar to the CPO trust to which it will transfer all of the Series A shares underlying their CPOs, so that the non-Mexican holders may be the beneficiaries of economic rights in respect of such shares on a pro rata basis.
Fees of the CPO Trustee and the Common Representative
We will pay the fees of the CPO trustee for the administration of the CPO trust and the fees of the common representative.
 
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 DESCRIPTION OF AMERICAN DEPOSITARY SHARES
The following is a summary of the material terms of the ADS deposit agreement that will be in effect upon the completion of the global offering. This description may not contain all of the information that is important to you. To understand it fully, you should read the ADS deposit agreement. The following descriptions are qualified in their entirety by reference to the ADS deposit agreement. See “Where You Can Find More Information” for directions on how to obtain copies of those documents.
The Bank of New York Mellon, as depositary, will register and deliver American Depositary shares, also referred to as ADSs. Each ADS will represent ten CPOs (or a right to receive ten CPOs) deposited with             , as custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The depositary’s office at which the ADSs will be administered is located at 101 Barclay Street, New York, New York 10286.
ADSs may be held either (a) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or DRS, or (b) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.
The DRS is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership is confirmed by periodic statements sent by the depositary to the registered holders of uncertificated ADSs.
We will not treat ADS holders as one of our shareholders and ADS holders will not have shareholder rights under Mexican law and our by-laws. A deposit agreement among us, the depositary and you, as an ADS holder, and the beneficial owners of ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.
Dividends and Other Distributions
The depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives in respect of the underlying CPOs or other deposited securities, after deducting its fees and expenses described below. ADS holders will receive these distributions in proportion to the number of CPOs their ADRs represent.
Cash Dividends and Distributions . The depositary will convert any cash dividend or other cash distribution we pay on the shares underlying the applicable CPOs into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any Mexican government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest. If the depositary can only convert a portion of the cash dividend into U.S. dollars, it can either distribute the unconverted portion in the foreign currency or hold the foreign currency on the account of the ADS holders. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, ADS holders may lose some or all of the value of the distributions. Before making a distribution, the depositary will deduct any withholding taxes that must be paid. See “Taxation.” It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent.
Share Dividends and Distributions . The depositary may distribute additional ADSs representing any additional CPOs issued as a result of our issuing a share dividend or distribution. The depositary will only
 
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distribute whole ADSs. It will sell CPOs or Series A Shares, which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new CPOs. The depositary may sell a portion of the distributed CPOs or Series A shares sufficient to pay its fees and expenses in connection with that distribution.
Rights to Purchase Additional CPOs . If the CPO trustee offers CPO holders any rights to subscribe for additional CPOs or any other rights, the depositary may make these rights available to you. If the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. Under current Mexican law, preemptive rights with respect to our common stock may not be sold apart from the applicable shares. The depositary will allow rights that are not distributed or sold to lapse. In that case, ADS holders will receive no value for them. If the depositary makes rights to purchase CPOs available to ADS holders, it will exercise the rights and purchase the CPOs on their behalf. The depositary will then deposit the CPOs and deliver ADSs to the applicable holders. It will only exercise rights if holders pay it the exercise price and any other charges required by the terms of the rights. U.S. securities laws may restrict transfers and cancellation of the ADSs representing CPOs purchased upon exercise of rights. For example, holders may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.
Other Distributions . The depositary will send to ADS holders anything else the CPO trustee distributes on deposited securities by any means it determines to be legal, fair and practical. If the depositary determines that it cannot make the distribution in a legal, fair and practical manner, it may sell the distributed assets and distribute the net proceeds, in the same way as it does with cash or determine to hold the distributed assets, in which case ADSs will also represent the newly distributed assets. However, the depositary is not required to distribute any securities (other than ADSs) unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.
Unlawful or Impracticable Distributions . The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, CPOs, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, CPOs, rights or anything else to ADS holders. This means that ADS holders may not receive the distributions we make on our common stock or any value for such distributions if it is illegal or impractical for us to make them available to such holders.
Deposit, Withdrawal and Cancellation
The depositary will deliver ADSs upon the deposit of CPOs or evidence of rights to receive CPOs with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names requested and will deliver the ADSs to the persons requested.
Upon surrender of ADSs to the depositary, upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the CPOs and any other deposited securities underlying the surrendered ADSs to the person surrendering the ADSs or a person designated by them at the office of the custodian or, at the holder’s request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible; provided, however, that non-Mexican holders may not hold Series A shares directly, but will hold CPOs representing a financial interest in such Series A shares as described in this prospectus.
 
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Voting Rights
ADS holders have no voting rights and do not have the power to instruct the depositary to vote the shares underlying the CPOs underlying such ADSs.
Fees and Expenses
The following table sets forth the applicable fees for various services, transactions and activities related to the ADSs.

Persons Depositing CPOs or ADR Holders Must Pay:	  	For:	
		
U.S.$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	  	Issuance of ADSs, including issuances resulting from a distribution of CPOs or rights or other property	
		
	  	Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates	
		
U.S.$0.05 (or less) per ADS	  	Any cash distribution to ADS holders	
		
A fee equivalent to the fee that would be payable if securities distributed to you had been CPOs and the CPOs had been deposited for issuance of ADSs	  	Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders	
		
U.S.$0.05 (or less) per ADS per calendar year	  	Depositary services	
		
Registration or transfer fees	  	Transfer and registration of CPOs on our CPO register to or from the name of the depositary or its agent when you deposit or withdraw CPOs	
		
Expenses of the depositary	  	Conversion of foreign currency to U.S. dollars	
		
Expenses of the depositary	  	Cable, telex and facsimile transmission (when expressly provided in the deposit agreement)	
		
Taxes and other governmental charges the depositary or the custodian have to pay on any ADSs or CPOs underlying ADSs, for example, stock transfer taxes, stamp duty or withholding taxes, any charges incurred by the depositary or its agents for servicing deposited securities	  	As necessary	
		
The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.	  		
 
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Persons Depositing CPOs or ADR Holders Must Pay:	  	For:	
		
From time to time, the depositary may make payments to us to reimburse and / or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.	  		
Payment of Taxes
The depositary may deduct the amount of any taxes owed from any payments to ADS holders. It may also sell deposited securities, by public or private sale, to pay any taxes owed. ADS holders will remain liable if the proceeds of the sale are not enough to pay the taxes. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay or distribute to applicable ADS holder any proceeds or property remaining after it has paid the taxes.
Reclassifications, Recapitalizations and Mergers

If We:	  	Then:	
		
Change the nominal or par value of the CPOs	  	The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities.	
		
Reclassify, split up or consolidate any of the deposited securities	  	The depositary may distribute some or all of the cash, shares or other securities it received. It may also deliver new ADRs or ask ADR holders to surrender their outstanding ADRs in exchange for new ADRs identifying the new deposited securities.	
		
Distribute securities on the CPOs that are not distributed to ADS holders	  		
		
Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action	  		
Amendment and Termination
We may agree with the depositary to amend the deposit agreement and the ADRs for any reason without the consent of the ADS holders. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, ADS holders are considered, by continuing to hold ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.
The depositary will terminate the deposit agreement if we ask it to do so. The depositary may also terminate the deposit agreement if the depositary has told us that it would like to resign and we have not appointed a new depositary bank within 60 days. In either case, the depositary must notify ADS holders at least 30 days before termination.
 
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After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: (a) advise ADS holders that the deposit agreement is terminated, (b) collect distributions on the deposited securities, (c) sell rights and other property, and (d) deliver CPOs and other deposited securities upon surrender of ADSs. Four months or more after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. The depositary’s only obligations will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.
Shareholder Communications and Inspection of Register of Holders of ADSs
The depositary will make available for your inspection at its office all communications that it receives from us or the CPO trustee as a holder of deposited securities that we or the COP trustee make generally available to holders of deposited securities. The depositary will send you copies of those communications if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.
Limitations on Obligations and Liability
The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:
 
 	•	 	are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;	
 
 	•	 	are not liable if either of us is prevented or delayed by law or circumstances beyond our control from performing our obligations under the deposit agreement;	
 
 	•	 	are not liable if either of us exercises discretion permitted under the deposit agreement;	
 
 	•	 	are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;	
 
 	•	 	have no obligation to become involved in a lawsuit or other proceeding related to the ADRs or the deposit agreement on an ADR holder’s behalf or on behalf of any other party; and	
 
 	•	 	may rely upon any documents we believe in good faith to be genuine and to have been signed or presented by the proper party.	
In the deposit agreement, we agree to indemnify the depositary for acting as depositary, except for losses caused by the depositary’s own negligence or bad faith, and the depositary agrees to indemnify us for losses resulting from its negligence or bad faith.
Requirements for Depositary Actions
Before the depositary will deliver or register a transfer of an ADS, make a distribution of ADSs, or permit withdrawal of CPOs, the depositary may require:
 
 	•	 	payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any CPOs or other deposited securities;	
 
 	•	 	satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and	
 
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 	•	 	compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.	
The depositary may refuse to deliver ADSs or register transfers of ADSs generally when the transfer books of the depositary, the CPO trustee or our transfer books are closed or at any time if the depositary or we think it advisable to do so.
ADS Holders’ Right to Receive the CPOs Underlying ADSs
ADS holders have the right to surrender their ADSs and withdraw the underlying CPOs at any time except:
 
 	•	 	when temporary delays arise because: (i) the depositary or the CPO trustee has closed its transfer books or we have closed our transfer books; (ii) the transfer of CPOs is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our common stock or any other security deposited with the CPO trustee;	
 
 	•	 	if the ADS holder owes money to pay fees, taxes and similar charges; and	
 
 	•	 	when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of CPOs or other deposited securities.	
This right of withdrawal may not be limited by any other provision of the deposit agreement.
Pre-release of ADSs
The deposit agreement permits the depositary to deliver ADSs before deposit of the underlying CPOs. This is called a pre-release of the ADSs. The depositary may also deliver CPOs upon cancellation of pre-released ADSs (even if the ADSs are surrendered before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying CPOs are delivered to the depositary. The depositary may receive ADSs instead of CPOs to close out a pre-release. The depositary may pre-release ADSs only under the following conditions: (a) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the CPOs or ADSs to be deposited; (b) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (c) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so.
 
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 MARKET INFORMATION
Prior to this offering, there has been no public market for the ADSs. Consequently, the offering price for the ADSs was determined by negotiations between us and the representatives of the international underwriters and the Mexican underwriters. Among the factors considered in determining the offering price were our historic results of operations, our current financial condition, our future prospects, our markets, the economic conditions in and future prospects for the industry in which we operate, our management, currently prevailing general conditions in the equity securities markets in Mexico and the United States, including current market valuations of publicly traded companies considered comparable to our company, and multiples used to valuate companies in our industry. The ADSs will constitute a new class of securities with no established trading market and granting no voting rights. Therefore, we cannot assure you that an active trading market will develop for the ADSs, or that the ADSs will trade in the public market subsequent to the offering at or above the initial public offering price. Each ADS will represent ten CPOs, and each CPO will represent a financial interest in our share of Series A common stock. We have applied to list the ADSs for trading on the New York Stock Exchange under the symbol “VLRS” and the Series A shares for trading on the Mexican Stock Exchange under the symbol “VOLAR”. The CPOs will not be listed or traded on any stock exchange. Trading of the ADSs on the New York Stock Exchange is expected to commence on the day following the date of the final prospectus related to this offering; trading of the Series A shares is expected to commence on the Mexican Stock Exchange on the day following the date of the final prospectus related to this offering.
The information concerning the Mexican securities market set forth below has been prepared based on materials obtained from public sources, including the CNBV, the Mexican Stock Exchange and information made public by market participants. The following summary does not purport to be a comprehensive description of all of the material aspects related to the Mexican securities market.
Trading on the Mexican Stock Exchange
The Mexican Stock Exchange, located in Mexico City, is the only stock exchange currently operating in Mexico. Operating continuously since 1907, the Mexican Stock Exchange is organized as a variable capital public stock corporation. Securities trading on the Mexican Stock Exchange occurs each business day from 8:30 a.m. to 3:00 p.m., Mexico City time subject to adjustments to operate uniformly with certain markets in the United States.
Since January 1999, all trading on the Mexican Stock Exchange has been effected electronically. The Mexican Stock Exchange may impose a number of measures to promote an orderly and transparent trading price of securities, including the operation of a system of automatic suspension of trading in shares of a particular issuer, when price fluctuations exceed certain limits.
Settlement of transactions with equity securities on the Mexican Stock Exchange are effected three business days after a share transaction is agreed to. Deferred settlement is not permitted without the approval of the Mexican Stock Exchange, even where mutually agreed. Securities traded on the Mexican Stock Exchange are on deposit in book-entry form through the facilities of Indeval, a privately owned securities depositary that acts as a clearinghouse, depositary, and custodian, as well as a settlement, transfer, and registration agent for Mexican Stock Exchange transactions, eliminating the need for physical transfer of securities. Transactions must be settled in pesos except under limited circumstances and in respect of limited transactions in which settlement in foreign currencies may be permitted.
Market Regulation
In 1925, the Mexican National Banking Commission ( Comisión Nacional Bancaria ) was established to regulate banking activity and in 1946, the Mexican Securities Commission ( Comisión Nacional de Valores ) was established to regulate stock market activity. In 1995, these two entities merged to form the CNBV.
 
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Among other things, the CNBV regulates the public offering and trading of securities, public companies and their regime and participants in the Mexican securities market (including brokerage houses and the Mexican Stock Exchange), and imposes sanctions for the illegal use of insider information and other violations of the Mexican Securities Market Law. The CNBV regulates the Mexican securities market, the Mexican Stock Exchange, and brokerage firms, through its staff and a board of governors comprised of thirteen members.
Mexican Securities Market Law
The current Mexican Securities Market Law was enacted on December 8, 2005, published in the Official Gazette of the Federation ( Diario Oficial de la Federación ) or Official Gazette of the Federation on December 30, 2005, and became effective on June 28, 2006, and is referred to as the Mexican Securities Market Law. The Mexican Securities Market Law changed Mexican securities laws in various material respects to further align Mexican laws with the securities and corporate governance standards laws in effect in other jurisdictions that maintained more developed securities markets.
In particular, the Mexican Securities Market Law:
 
 	•	 	establishes the sociedad anónima promotora de inversión , a form of corporate organization that permits agreements among shareholders, mediating rights of first offer and refusal, tag-along rights, vetoes, non-compete provisions and other terms that enhance rights of minority shareholders;	
 
 	•	 	establishes the variable capital public stock corporation, a corporate form of organization that is subject to the general requirements of the Mexican Corporations Law, but is subject to specific requirements for issuers with stock registered with the CNBV and listed in the Mexican Stock Exchange;	
 
 	•	 	includes private placement exemptions directed to Mexican institutional and qualified investors, and specifies the requirements that need to be satisfied for an issuer or underwriter to fall within the exemption;	
 
 	•	 	includes improved rules for tender offers, dividing them in either voluntary or mandatory;	
 
 	•	 	establishes standards for disclosure of holdings applicable to shareholders of public companies;	
 
 	•	 	expands and strengthens the role of the board of directors of public companies;	
 
 	•	 	defines the role of the chief executive officer and other relevant officers of public corporations;	
 
 	•	 	defines the standards applicable to the board of directors and the duties and potential liabilities and penalties applicable to each director, the chief executive officer and other executive officer and of members of the technical committee and the corporate governance committee (introducing concepts as the duty of care, duty of loyalty and safe harbors for actions attributable to directors, committee members and officers);	
 
 	•	 	replaces the statutory auditor ( comisario ) with the audit committee and establishes the corporate governance committee with clearly defined responsibilities;	
 
 	•	 	improves the rights of minority shareholders (including rights to initiate shareholders’ derivative suits);	
 
 	•	 	defines applicable sanctions for violation of law;	
 
 	•	 	provides for flexibility to allow regulated Mexican brokerage firms to engage in certain limited activities;	
 
 	•	 	regulates stock exchanges, clearinghouses, futures and derivatives markets, and rating agencies;	
 
 	•	 	establishes penalties (including incarceration), arising from violations of the Securities Market Law and regulations thereunder;	
 
 	•	 	establishes that public companies are considered a single economic unit with the entities they control;	
 
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 	•	 	introduces concepts such as consortiums, groups of related persons or entities, control, related parties and decision-making power;	
 
 	•	 	defines rules relating to types of securities that may be offered by public companies;	
 
 	•	 	sets forth information for share repurchases; and	
 
 	•	 	specifies requirements for implementing anti-takeover measures.	
In March 2003, the CNBV issued certain general regulations applicable to issuers and other securities market participants, which regulations have since been amended, or the General Regulations, and in September 2004, the CNBV issued certain general regulations applicable to brokerage firms. The General Regulations, which repealed several previously enacted CNBV regulations, provide a consolidated set of rules governing public offerings, reporting requirements and issuer activity, among other things.
Registration and Listing Standards
In order to offer securities to the public in Mexico, an issuer must meet specific qualitative and quantitative requirements. Only securities that have been registered with the Mexican National Securities Registry ( Registro Nacional de Valores ) or the RNV, pursuant to an approval by the CNBV may be listed on the Mexican Stock Exchange. In addition, the Mexican Stock Exchange has created a parallel quotation system, named the international quotation system or “SIC,” where debt and equity securities issued by non-Mexican issuers may be listed, for trading by institutional and accredited investors. Issuers listed on the SIC have limited disclosure and reporting requirements and may comply with obligations through a sponsor and by providing disclosure made available in their home market. These securities may be listed through the SIC if (i) the securities are not already listed on the RNV, (ii) the market of origin of the company issuing the shares has received, based on its characteristics, recognition from the CNBV, and (iii) the securities satisfy the listing requirements of the applicable stock exchange.
The General Regulations require the Mexican Stock Exchange to adopt minimum requirements for issuers that seek to list their securities in Mexico. These requirements relate to operating history, financial and capital structure, and minimum public floats applicable to shares of public companies, among other things. The General Regulations also require the Mexican Stock Exchange to implement minimum requirements (including minimum public floats) for issuers to maintain their listing in Mexico. These requirements relate to the issuer’s financial condition, capital structure and public float, among others. The CNBV may waive some of these requirements in certain circumstances. In addition, some of the requirements are applicable for each series of shares of the relevant issuer.
The CNBV’s approval for registration with the RNV does not imply any kind of certification or assurance related to the investment quality of the securities, the solvency of the issuer, or the accuracy or completeness of any information delivered to the CNBV or included in any offering document.
The Mexican Stock Exchange may review compliance with the foregoing requirements and other requirements at any time, but will normally do so on an annual, semi-annual and quarterly basis. The Mexican Stock Exchange must inform the CNBV of the results of its review, and this information must, in turn, be disclosed to investors. If an issuer fails to comply with any of these minimum requirements, the Mexican Stock Exchange will request that the issuer propose a plan to cure the violation. If the issuer fails to propose a plan, if the plan is not satisfactory to the Mexican Stock Exchange, or if an issuer does not make substantial progress with respect to the implementation of the corrective plan, trading of the relevant series of shares on the Mexican Stock Exchange may be temporarily suspended. In addition, if an issuer fails to implement the plan in full, the CNBV may cancel the registration of the shares, in which case the majority shareholder or any controlling group will be required to carry out a tender offer to acquire all of the outstanding shares of the issuer in accordance with the tender offer provisions set forth in the Mexican Securities Market Law (under which all holders must be treated in the same manner).
 
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Reporting Obligations
Issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements (together with an explanation thereof) and periodic reports, in particular reports dealing with material events, with the CNBV and the Mexican Stock Exchange. Mexican issuers must file the following reports with the CNBV:
 
 	•	 	a comprehensive annual report prepared in accordance with the General Regulations, by no later than April 30 of each year;	
 
 	•	 	quarterly reports, within 20 days following the end of each of the first three quarters and 40 days following the end of the fourth quarter;	
 
 	•	 	reports disclosing material information;	
 
 	•	 	reports and disclosure memoranda revealing corporate restructurings such as mergers, spin-offs or acquisitions or sales of assets, to be approved by shareholders’ meeting or the board of directors;	
 
 	•	 	reports regarding the policies and guidelines with respect to the use of the company’s (or its subsidiaries) assets by related persons; and	
 
 	•	 	details dealing with agreements among shareholders.	
Pursuant to the General Regulations, the internal rules of the Mexican Stock Exchange were amended to implement an automated electronic information transfer system ( Sistema Electrónico de Envío y Difusión de Información, or SEDI) called Sistema Electrónico de Comunicación con Emisoras de Valores , or EMISNET, for information required to be filed with the Mexican Stock Exchange. Issuers of listed securities must prepare and disclose their financial and other information via EMISNET. Immediately upon receipt, the Mexican Stock Exchange makes this financial and other information available to the public.
The General Regulations and the rules of the Mexican Stock Exchange require issuers of listed securities to file through SEDI information that relates to any event or circumstance that could influence an issuer’s share prices and investor decisions to acquire stock. If listed securities experience unusual price volatility, the Mexican Stock Exchange must immediately request that an issuer inform the public as to the causes of the volatility or, if the issuer is unaware of the causes, that it make a statement to the effect that it is unaware of the causes of such volatility. In addition, the Mexican Stock Exchange must immediately request that issuers disclose any information relating to material events when it deems the available public information to be insufficient, as well as instruct issuers to clarify information when necessary. The Mexican Stock Exchange may request that issuers confirm or deny any material event that has been disclosed to the public by third parties when it deems that the material event may affect or influence the price of the listed securities. The Mexican Stock Exchange must immediately inform the CNBV of any such request. In addition, the CNBV may also make any of these requests directly to issuers. An issuer may delay the disclosure of material events if:
 
 	•	 	the issuer implements adequate confidentiality measures (including maintaining a log with the names of parties in possession of confidential information and the date when each such party became aware of the relevant information);	
 
 	•	 	the information is related to incomplete transactions;	
 
 	•	 	there is no misleading public information relating to the material event; and	
 
 	•	 	no unusual price or volume fluctuation occurs.	
Similarly, if an issuer’s securities are traded on both the Mexican Stock Exchange and a foreign securities exchange, the issuer must simultaneously file the information that it is required to file pursuant to the laws and regulations of the foreign jurisdiction with the CNBV and the Mexican Stock Exchange.
 
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Suspension of Trading
In addition to the authority of the Mexican Stock Exchange under its internal regulations described above, the CNBV and the Mexican Stock Exchange may suspend trading in an issuer’s securities:
 
 	•	 	if the issuer does not disclose a material event; or	
 
 	•	 	upon price or volume volatility or changes in the trading of the relevant securities that are not consistent with the historic performance of the securities and cannot be explained solely through information made publicly available pursuant to the General Regulations.	
The Mexican Stock Exchange must immediately inform the CNBV and the general public of any suspension. An issuer may request that the CNBV or the Mexican Stock Exchange permit trading to resume if it demonstrates that the causes triggering the suspension have been resolved and that it is in full compliance with periodic reporting requirements. If an issuer’s request has been granted, the Mexican Stock Exchange will determine the appropriate mechanism to resume trading (which may include a bidding process to determine applicable prices). If trading in an issuer’s securities is suspended for more than 20 business days and the issuer is authorized to resume trading without conducting a public offering, the issuer must disclose via SEDI, before trading may resume, a description of the causes that resulted in the suspension.
Under consent regulations, the Mexican Stock Exchange may consider the measures adopted by other non-Mexican exchanges to suspend and/or resume trading of an issuer’s shares, in cases where the relevant securities are simultaneously traded on stock exchanges located outside of Mexico.
Insider Trading, Trading Restrictions and Tender Offers
The Mexican Securities Market Law contains specific regulations regarding insider trading, including the requirement that persons in possession of information deemed privileged abstain (i) from directly or indirectly, trading in the relevant issuer’s securities, or derivatives with respect to such securities, the trading price of which may be affected by such information, (ii) from making recommendations or providing advice to third parties to trade in such securities, and (iii) disclosing or communicating such privileged information to third parties (except for persons to whom such information must be disclosed as a result of their positions or employment, as governmental authorities).
Pursuant to the Mexican Securities Market Law, the following persons must notify the CNBV of any transactions undertaken by them with respect to a listed issuer’s securities, whether on a case-by-case basis or quarterly:
 
 	•	 	members of a listed issuer’s board of directors;	
 
 	•	 	shareholders controlling 10% or more of a listed issuer’s outstanding capital stock;	
 
 	•	 	advisors;	
 
 	•	 	groups controlling 25% or more of a listed issuer’s outstanding capital stock; and	
 
 	•	 	other insiders.	
These persons must also inform the CNBV of the effect of the transactions within five days following their completion, or, alternatively, that the transactions have not been consummated. In addition, insiders must abstain from purchasing or selling securities of the issuer within three months from the last sale or purchase, respectively.
Also, for purposes of preparing annual reports, holders of 1% or more of the outstanding shares of a Mexican public company, must disclose their holdings and the relevant issuer.
 
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Subject to certain exceptions, any acquisition of a public company’s shares that results in the acquirer owning 10.0% or more, but less than 30.0%, of an issuer’s outstanding capital stock, must be publicly disclosed to the CNBV and the Mexican Stock Exchange by no later than one business day following the acquisition.
Any acquisition or disposition by an insider that results in the insider holding an additional 5% or more of a public company’s outstanding capital stock or that reduces such insider’s holdings by 5% or more, must also be publicly disclosed to the CNBV and the Mexican Stock Exchange no later than one business day following the acquisition or disposition. Some insiders must also notify the CNBV of share purchases or sales that occur within any three-month or five-day period and that exceed certain value thresholds. The Mexican Securities Market Law requires that convertible securities, warrants and derivatives to be settled in kind be taken into account in the calculation of share ownership percentages of public companies.
The Mexican Securities Market Law requires that convertible securities, warrants, and derivatives to be settled in kind be considered in determining whether any of the foregoing percentages is reached or affected.
Tender Offers
The Mexican Securities Market Law contains provisions relating to public tender offers and certain other share acquisitions occurring in Mexico. Under the Securities Market Law, tender offers may be voluntary or mandatory. Voluntary tender offers, or offers where there is no requirement that they be initiated or completed, are required to be made pro rata. Any intended acquisition of a public company’s shares that results in the acquirer owning 30% or more, but less than a percentage that would result in the acquirer obtaining control, of a company’s voting shares requires the acquirer to make a mandatory tender offer for the greater of (a) the percentage of the capital stock intended to be acquired, or (b) 10% of the company’s outstanding capital stock. Finally, any intended acquisition of a public company’s shares that is aimed at obtaining control requires the potential acquirer to make a mandatory tender offer for 100% of the company’s outstanding capital stock (however, under certain circumstances, the CNBV may permit an offer for less than 100%). The tender offer must be made at the same price to all shareholders and classes of shares. The board of directors, with the advice of the audit committee, must issue its opinion in respect of the fairness of the price applicable to any tender offer resulting in a change of control, which opinion must take minority shareholder rights into account and which may be accompanied by an independent fairness opinion. Directors and officers of a public company, in respect of which a tender offer has been made, must disclose whether or not each of them will tender his respective shares in the tender offer.
Under the Mexican Securities Market Law, all tender offers must be open for at least 20 business days and purchases thereunder are required to be made pro rata to all tendering shareholders. The Mexican Securities Market Law also permits the payment of certain amounts to controlling shareholders over and above the offering price if these amounts are fully disclosed, approved by the board of directors, and paid solely in connection with non-compete or similar obligations. The law also provides exceptions to the mandatory tender offer requirements and specifically sets forth remedies for non-compliance with these tender offer rules ( e.g. , suspension of voting rights, possible annulment of purchases, etc.) and other rights available to prior shareholders of the issuer.
Joint Trading of Common Shares and Limited or Non-Voting Shares
The Mexican Securities Market Law does not permit issuers to implement mechanisms for common shares and limited or non-voting shares to be jointly traded or offered to public investors, unless the limited or non-voting shares are convertible into common shares within a period of up to five years, or when, because of the nationality of the holder, the shares or the securities representing the shares limit the right to vote to comply with foreign investment laws. In addition, the aggregate amount of shares with limited or non-voting rights may not exceed 25% of the aggregate amount of publicly held shares. The CNBV may increase this 25% limit by an additional 25%, provided that the limited or non-voting shares exceeding 25% of the aggregate amount of publicly held shares are convertible into common shares within five years of their issuance.
 
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Anti-Takeover Protections
The Mexican Securities Market Law provides that public companies may include anti-takeover provisions in their by-laws if such provisions (i) are approved by a majority of the shareholders, without shareholders representing 5% or more of the capital stock present at the meeting voting against such provision, (ii) do not exclude any shareholders or group of shareholders, (iii) do not restrict, in an absolute manner, a change of control, and (iv) do not contravene legal provisions related to tender offers or have the effect of disregarding the economic rights related to the shares held by the acquiring party.
Board of Directors and Committees
Under the Mexican Securities Market Law, public companies must have a board of directors comprised of no more than 21 members, of which at least 25% must be independent. Independent members must be selected based on their experience, ability and reputation at the issuer’s shareholders’ meeting; whether or not a director is independent must be determined by the issuer’s shareholders and such determination may be challenged by the CNBV. As a departure from legislative precedents, the Mexican Securities Market Law permits then-acting members of the board of directors (as opposed to shareholders) to select, under certain circumstances, on a temporary basis, new members of the board of directors.
Boards of directors of public companies are required to meet at least four times during each calendar year and have the following principal duties:
 
 	•	 	determine general strategies applicable to the issuer;	
 
 	•	 	approve guidelines for the use of corporate assets;	
 
 	•	 	approve, on an individual basis, transactions with related parties, subject to certain limited exceptions;	
 
 	•	 	approve unusual or non-recurrent transactions and any transactions that imply the acquisition or sale of assets with a value equal to or exceeding 5% of the issuer’s consolidated assets or that imply the provision of collateral or guarantees or the assumption of liabilities equal to or exceeding 5% of the issuer’s consolidated assets;	
 
 	•	 	approve the appointment or removal of the chief executive officer;	
 
 	•	 	approve waivers in respect of corporate opportunities;	
 
 	•	 	approve accounting and internal control policies;	
 
 	•	 	approve the chief executive officers’ annual report and corrective measures for irregularities; and	
 
 	•	 	approve policies for disclosure of information.	
Directors have the general duty to act for the benefit of the issuer, without favoring any shareholder or groups of shareholders.
The Mexican Securities Market Law requires the creation of two committees, the audit committee and the corporate governance committee, each of which must maintain at least three members appointed by the board of directors and which members must all be independent (except for the corporate governance committee of corporations controlled by a person or group maintaining 50% or more of the outstanding capital stock, where the majority must be independent). The audit committee (together with the board of directors, which has added duties) replaces the statutory auditor ( comisario ) that had been previously required under the Mexican Corporations Law.
The corporate governance committee is required to provide opinions to the board of directors, request and obtain opinions from independent third-party experts, call shareholders’ meetings, provide assistance to the board in the preparation of annual reports and provide a report to the board of directors.
 
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The audit committee’s principal role is to supervise the external auditors of the issuer, analyze the external auditor’s reports, discuss yearly financial statements and, when applicable, recommend their approval, inform the board of directors in respect of existing internal controls, require the issuer’s executive to prepare reports when deemed necessary, inform the board of directors of any irregularities that it encounters, investigate breaches of operating policies internal control and internal audit systems, supervise the activities of the issuer’s chief executive officer, call shareholders’ meetings, and provide an annual report to the board of directors.
Duty of Care and Loyalty of Directors
The Mexican Securities Market Law also imposes duties of care and of loyalty on directors (and members of committees and principal officers).
The duty of care generally requires that directors obtain sufficient information and be sufficiently prepared to support their decisions and to act in the best interest of the issuer. The duty of care is discharged, principally, by requesting and obtaining from the issuer and its officers all the information required to participate in discussions, obtaining information from third parties, attending board meetings and disclosing material information in possession of the relevant director. Failure to act with care by one or more directors subjects the relevant directors to joint liability with the other directors involved in the act for damages and losses caused to the issuer and its subsidiaries, which may be limited (except in the instances of bad faith or illegal acts or willful misconduct).
The duty of loyalty primarily consists of a duty to maintain the confidentiality of information received in connection with the performance of a director’s duties and to abstain from discussing or voting on matters where the director has a conflict of interest. In addition, the duty of loyalty is breached if a shareholder or group of shareholders is knowingly favored or if, without the express approval of the board of directors, a director takes advantage of a corporate opportunity. The duty of loyalty is also breached if a shareholder or group of shareholders is knowingly favored, if the director discloses false or misleading information or fails to register any transaction in the issuer’s records that could affect its financial statements. The duty of loyalty is also breached if the director uses corporate assets or approves the use of corporate assets in violation of an issuer’s policies. The violation of the duty of loyalty subjects the offending director to joint liability for damages and losses caused to the issuer and its subsidiaries. Liability also arises if damages and losses result from benefits obtained by the directors or third parties, as a result of activities carried out by the directors. Liability for breach of the duty of loyalty may not be limited by the company’s by-laws, by resolution of a shareholders’ meeting or otherwise.
Claims for breach of the duty of care or the duty of loyalty may be brought solely for the benefit of the issuer (as a derivative suit) and may only be brought by the issuer or by shareholders representing at least 5% of any outstanding shares. Claims may be exercised by trustees issuing ordinary participation certificates or by holders of such certificates, in each case holding underlying shares representing at least 5% of any outstanding shares.
As a safe-harbor for directors, the liabilities specified above will not be applicable if the director acted in good faith and (i) complied with applicable law and the by-laws, (ii) acted based upon information provided by officers, external auditors or third-party experts, the capacity and credibility of which may not be the subject of reasonable doubt, (iii) selected the more adequate alternative in good faith or in a case where the negative effects of such decision may not have been foreseeable, based upon the then available information, and (iv) actions were taken in compliance with resolutions adopted at the shareholders’ meeting.
Under the Mexican Securities Market Law, the issuer’s chief executive officer and principal executives are also required to act for the benefit of the company and not of a shareholder or group of shareholders. Principally, these executives are required to submit to the board of directors for approval the principal strategies for the business, to submit to the audit committee proposals relating to internal control systems, to disclose all material information to the public and to maintain adequate accounting and registration systems and internal control mechanisms.
 
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Disclosure of Shareholders’ Agreements
Any shareholders’ agreements containing non-compete clauses, any agreements related to the sale, transfer or exercise of preemptive rights, any agreements which allow for the sale and purchase of shares (including any tag-along, drag-along and put or call rights), voting rights, and sale of shares in a public offering, must be notified to the company within five business days following their execution, to allow the company to disclose such agreements to the investors through the stock exchanges on which its securities are traded and to be made public in an annual report prepared by the company. These agreements (i) will be available for the public to review at the company’s offices, (ii) will not be enforceable against the company and a breach of such agreements will not affect the validity of the vote at a shareholders’ meeting, and (iii) will only be effective among the relevant parties once they have been disclosed to the public.
Miscellaneous
The Mexican Securities Market Law also specifies that any transaction or series of transactions that, during any fiscal year, represent 20% or more of the consolidated assets of a public company, must be considered and approved by a meeting of shareholders.
In addition to the right granted to minority shareholders of a public company representing 5% or more of the outstanding shares to initiate a shareholder derivative suit against directors for a breach of the duty of care or the duty of loyalty, the Mexican Securities Market Law recognizes the right of shareholders representing 10% or more of the outstanding shares to appoint a director and call a shareholders’ meeting and request that vote on resolutions in respect of which they were not sufficiently informed be postponed. Holders of 20% or more of the outstanding voting shares may judicially oppose resolutions that were passed by a shareholders’ meeting and file a petition for a court order to suspend the resolution, if the claim is filed within 15 days following the adjournment of the meeting at which the action was taken, provided that (i) the challenged resolution violates Mexican law or the company’s by-laws, (ii) the opposing stockholders either did not attend the meeting or voted against the challenged resolution, and (iii) the opposing stockholders deliver a bond to the court to secure payment of any damages that the company may suffer as a result of suspending the resolution in the event that the court ultimately rules against the opposing stockholder; these provisions have seldom been invoked in Mexico and, as a result, any action that may be taken by a competent court is uncertain.
 
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 DIVIDEND POLICY
We have not paid any cash dividends in the past and do not expect to pay any cash dividends on our common stock for the foreseeable future. We currently intend to retain any additional future earnings to finance our operations and growth. Any future determination to pay cash dividends on our common stock will be at the discretion of our shareholders on the recommendation of our board of directors and will depend on our earnings, financial condition, results of operations, capital requirements and contractual, regulatory and other restrictions on the payment of dividends and other factors our shareholders deem relevant. In addition, we may not pay any dividend unless such dividend is paid from our net profit account and the financial statements including such net profit and the payment of the relevant dividend have been approved by a shareholder resolution. Furthermore, our revolving line of credit with Banco Santander México and Bancomext may limit our ability to declare and pay dividends in the event that we fail to comply with the payment terms thereunder. See “Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Loan Agreements.”
Mexican law requires that at least 5% of a company’s net income each year (after profit sharing and other deductions required by Mexican law) be allocated to a legal reserve fund until such fund reaches an amount equal to at least 20% of its capital stock from time to time (without adjustment for inflation). In 2011, we allocated Ps.38.2 million, corresponding to our net income for 2010, to the legal reserve fund. For the year ended December 31, 2011, we have not created such reserve. As of December 31, 2012, our reserve fund was Ps.38.2 million, or 1.7% of our capital stock.
Mexican companies may pay dividends only out of earnings (including retained earnings after all losses have been absorbed or paid up), after allocation to the legal reserve fund and only if shareholders have approved the yearly financials from which such earnings are derived and the payment of the dividend. The reserve fund is required to be funded on a stand-alone basis for each company, rather than on a consolidated basis. The level of earnings available for the payment of dividends is determined under IFRS. Our subsidiaries are required to allocate earnings to their respective legal reserve funds prior to paying dividends to us.
Dividends that are paid from a company’s distributable earnings that have not been subject to corporate income tax are subject to a corporate-level tax payable by us. Companies are entitled to apply any such tax on the distribution of earnings as a credit against their Mexican corporate income tax corresponding to the fiscal year in which the dividend was paid or against the Mexican corporate income tax of the two fiscal years following the date in which the dividend was paid. Dividends paid from a company’s distributable earnings that have been subject to corporate income tax are not subject to this corporate-level dividend income tax. Dividends paid to resident and non-resident holders with respect to the CPOs and ADSs are currently not subject to Mexican withholding or similar tax.
In the event we were to declare dividends, they would be in pesos. In the case of CPOs represented by ADSs, the cash dividends would be paid to the depositary and, subject to the terms of the Deposit Agreement, converted into and paid in U.S. dollars at the prevailing rate of exchange, net of conversion expenses of the depositary and applicable Mexican withholding tax. Fluctuations in exchange rates would affect the amount of dividends that ADS holders would receive. For a more detailed discussion, see “Description of American Depositary Shares.”
 
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 TAXATION
The following summary contains a general description of certain U.S. federal income tax consequences and Mexican federal tax consequences relating to the acquisition, ownership and disposition of ADSs and CPOs. This summary is based on laws and regulations now in effect in Mexico, laws, regulations, rulings and decisions now in effect in the United States, and the provisions of the tax treaty for the avoidance of double taxation between the United States and Mexico and protocols thereto, referred to herein as the “U.S.-Mexico Tax Treaty.” It is also based in part on representations by the CPO trustee and the ADS depositary and assumes that each obligation under the CPO trust agreement, the ADS deposit agreement and any related agreements will be performed in accordance with their terms.
This summary does not describe all of the tax considerations that may be relevant to a specific investor, including Mexican investors, particularly if such investor is subject to special tax rules. Prospective investors are encouraged to consult their own independent tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of ADSs in light of their own particular circumstances, including the tax consequences under state, local, municipal, or other tax laws.
U.S. Federal Income Taxation
The following is a general discussion of certain U.S. federal income tax consequences relating to the acquisition, ownership and disposition of ADSs. This discussion deals only with U.S. Holders (as defined below) that hold ADSs as capital assets (generally, property held for investment). This discussion does not address the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as banks or other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, partnerships or other pass-through entities for U.S. federal income tax purposes or investors in such entities, investors liable for the alternative minimum tax, individual retirement accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, investors that hold ADSs as part of a straddle or hedging, constructive sale, integrated or conversion transactions for U.S. federal income tax purposes, a person that actually or constructively owns 10% or more of the total combined voting power in Volaris stock, traders in securities that have elected the mark-to-market method of accounting for their securities, U.S. expatriates or persons whose functional currency is not the U.S. dollar).
The discussion is based on the U.S. Internal Revenue Code of 1986, as amended through the date hereof, or the Code, its legislative history, existing and proposed U.S. Treasury regulations thereunder, published rulings and court decisions, all as of the date hereof and all subject to change at any time, perhaps with retroactive effect. No assurance can be given that the Internal Revenue Service, or the IRS, will agree with the views expressed in this discussion, or that a court will not sustain any challenge by the IRS in the event of litigation. This discussion does not include any description of the tax laws of any state, local, municipal or non-U.S. government (except for certain Mexican federal tax consequences, discussed below) that may be applicable to a particular investor and does not consider any aspects of U.S. federal tax law other than income taxation.
As used herein, the term “U.S. Holder” means a beneficial owner of an ADS that is, for U.S. federal income tax purposes: (a) an individual who is a citizen or resident of the United States; (b) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or d) a trust if (i) a court within the United States can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of that trust or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
If a partnership or an entity or an arrangement that is treated as a partnership for U.S. federal income tax purposes holds ADSs, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partners in partnerships that hold ADSs are encouraged to consult their tax advisors.
 
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Except where specifically described below, this discussion assumes that Volaris is not a passive foreign investment company, or a PFIC, for U.S. federal income tax purposes. See the discussion under “—Passive Foreign Investment Company Considerations” below.
The discussion below assumes that the representations contained in the CPO trust agreement and ADS deposit agreement are true and that the obligations in the CPO trust agreement, ADS deposit agreement and any related agreements will be complied with in accordance with their terms. In general, for U.S. federal income tax purposes, U.S. Holders who own ADSs will be treated as the beneficial owners of the CPOs represented by those ADSs and each CPO should represent a beneficial interest in the Series A Shares represented by those CPOs. The U.S. Treasury Department has expressed concern that depositaries for ADRs, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking actions that are inconsistent with the claiming of U.S. foreign tax credits by U.S. Holders of such receipts or shares. These actions would also be inconsistent with claiming the reduced rate for “qualified dividend income” described below. Accordingly, the analysis regarding the availability of a U.S. foreign tax credit for Mexican withholding taxes and availability of the reduced rate for qualified dividend income could be affected by future actions that may be taken by the ADS depository and the U.S. Treasury Department.
For U.S. federal income tax purposes, U.S. Holders who own ADSs will be treated as the beneficial owners of the CPOs represented by those ADSs. Based on the nature of the CPO trust and the applicable legal authorities, a U.S. Holder who owns CPOs, or is treated as owning CPOs, should be treated as the beneficial owner of the Series A Shares represented by the CPOs. However, the U.S. federal income tax treatment of U.S. Holders that are beneficial owners of CPOs is not entirely clear. The IRS could assert that such U.S. Holders should be treated as owning an interest in an entity or arrangement treated as a foreign trust for U.S. federal income tax purposes. In that case, the U.S. federal income tax consequences to the U.S. Holder should be the same as outlined below; however, the U.S. Holder may also be subject to certain additional tax reporting obligations under the foreign trust rules. If these tax reporting obligations were determined to apply to a U.S. Holder and the U.S. Holder did not comply with such obligations, the U.S. Holder could be subject to substantial penalties. U.S. Holders seeking to obtain CPOs in exchange for ADSs are encouraged to consult their own tax advisors regarding the treatment of the CPOs, including the possibility, and U.S. federal income tax consequences of, the CPO trust being treated as a foreign trust.
EACH PERSON CONSIDERING THE ACQUISITION OF ADSs IS ENCOURAGED TO CONSULT ITS OWN INDEPENDENT TAX ADVISOR REGARDING THE SPECIFIC U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSIDERATIONS OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE ADSs.
Taxation of Dividends and Other Distributions
Subject to the “passive foreign investment company” rules discussed below, distributions of cash or property with respect to ADSs (including the amount of any Mexican taxes withheld on any such distribution, if any) will constitute ordinary dividend income to the extent of Volaris’ current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), which generally will be includible in a U.S. Holder’s gross income on the day on which the dividends are received by the CPO trustee. Any distributions in excess of such earnings and profits will constitute a nontaxable return of capital and reduce a U.S. Holder’s tax basis in such ADSs. To the extent such distributions exceed a U.S. Holder’s tax basis in its ADSs, such excess will constitute capital gain and will generally be treated as described below under “—Sale or Other Taxable Disposition of ADSs.” Dividends on ADSs will not be eligible for the dividends received deduction allowed to U.S. corporations. We do not currently intend to maintain calculations of our earnings and profits under U.S. federal income tax principles. Accordingly, U.S. Holders should expect that all distributions made with respect to the ADSs will generally be treated as dividends (as described above).
A U.S. Holder may be entitled, subject to a number of complex limitations and conditions (including a minimum holding period requirement), to claim a U.S. foreign tax credit in respect of any Mexican income taxes
 
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withheld on dividends received in respect of the ADSs. A U.S. Holder who does not elect to claim a credit for any foreign income taxes paid during the taxable year may instead claim a deduction in respect of such income taxes provided the U.S. Holder elects to deduct (rather than credit) all foreign income taxes for that year. Dividends received in respect of ADSs generally will be treated as foreign-source income, subject to various classifications and other limitations and generally will be treated as passive category income for most U.S. Holders. The rules relating to computing foreign tax credits or deducting foreign taxes are extremely complex, and U.S. Holders are encouraged to consult their own tax advisors regarding the availability of foreign tax credits under their particular circumstances.
Dividends paid in pesos (including the amount of any Mexican taxes withheld therefrom, if any) will be includible in a U.S. Holder’s gross income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the pesos are actually or constructively received by the CPO trustee, regardless of whether the dividends are converted into U.S. dollars at that time. If the pesos are converted to U.S. dollars on the date of such receipt, a U.S. Holder generally will not recognize a foreign currency gain or loss. However, if the U.S. Holder converts the pesos into U.S. dollars on a later date, the U.S. Holder must include in gross income any gain or loss resulting from any exchange rate fluctuations. The gain or loss will be equal to the difference between (i) the U.S. dollar value of the amount included in income when the dividend was received and (ii) the amount received on the conversion of the pesos into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend is includible in a U.S. Holder’s gross income to the date such payment is converted into U.S. dollars will be exchange gain or loss and will be treated as ordinary income or loss. Such gain or loss will generally be treated as income from sources within the United States. U.S. Holders are encouraged to consult their own independent tax advisors regarding the treatment of foreign currency gain or loss, if any, on any pesos received that are converted into U.S. dollars on a date subsequent to receipt by the CPO trustee.
Distributions treated as dividends that are received by a non-corporate U.S. Holder (including an individual) from “qualified foreign corporations” generally qualify for a reduced rate of taxation so long as certain holding period and other requirements are met. Dividends paid on ADSs should qualify for the reduced rate if Volaris is treated as a “qualified foreign corporation.” For this purpose, a qualified foreign corporation means any foreign corporation provided that: (i) the corporation was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a “passive foreign investment company” (as discussed below), (ii) certain holding period requirements are met and (iii) either (A) the corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the IRS has approved for the purposes of the qualified dividend rules or (B) the stock with respect to which such dividend was paid is readily tradable on an established securities market in the United States. The ADSs should be considered to be readily tradable on an established securities market in the United States if they are listed on the New York Stock Exchange as is expected. U.S. Holders are encouraged to consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to the ADSs.
Sale or Other Taxable Disposition of ADSs
Subject to the passive foreign investment company rules discussed below, upon the sale or other taxable disposition of ADSs, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized on the sale or other taxable disposition and such U.S. Holder’s tax basis in such ADSs. The amount realized on a sale or other taxable disposition of ADSs generally will be equal to the sum of the amount of cash and the fair market value of any other property received. Gain or loss recognized by a U.S. Holder on such sale or other taxable disposition generally will be long-term capital gain or loss if, at the time of the sale or other taxable disposition, the ADSs have been held for more than one year. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deduction of a capital loss is subject to limitations for U.S. federal income tax purposes. Deposits and withdrawals of CPOs by U.S. Holders in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.
 
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If Mexican income tax is withheld on the sale or other taxable disposition of ADSs, the amount realized by a U.S. Holder will include the gross amount of the proceeds of that sale or other taxable disposition before deduction of the Mexican income tax A U.S. Holder who is eligible for the benefits of the U.S.-Mexican income tax treaty, can elect to treat capital gain or loss, if any, realized on the sale or other taxable disposition of ADSs that is subject to Mexican income tax as foreign source gain or loss for U.S. foreign tax credit purposes. Consequently, in the case of a gain from the disposition of an ADS that is subject to Mexican income tax (see— “Mexican Taxation—Disposition of ADSs or CPOs”), a U.S. Holder, subject to a number of complex limitations and conditions (including a minimum holding period requirement), may be able to benefit from the foreign tax credit for that Mexican income tax. Otherwise, any gain from the disposition of an ADS that is subject to Mexican income tax will be treated as a U.S. source gain and a U.S. Holder may not be able to benefit from the foreign tax credit for that Mexican income tax (i.e., because the gain from the disposition would be U.S. source), unless the U.S. Holder can apply the credit against U.S. federal income tax payable on other income from foreign sources. Alternatively, the U.S. Holder may elect to take a deduction for the Mexican income tax, provided that the U.S. Holder elects to deduct all foreign taxes paid or accrued for the taxable year. The rules governing foreign tax credits are complex and a U.S. Holder are encouraged to consult its own tax advisor regarding the availability of foreign tax credits under its particular circumstances.
Passive Foreign Investment Company Considerations
Special U.S. federal income tax rules apply to U.S. persons owning shares of a PFIC. A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules with respect to the income and assets of subsidiaries, either:
 
 	•	 	at least 75% of its gross income is passive income, or	
 
 	•	 	at least 50% of the gross value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income.	
For this purpose, passive income generally includes, among other things, dividends, interest, rents, royalties, gains from the disposition of passive assets (other than gains from the disposition of property that is inventory) and gains from commodities and securities transactions. In addition, if the non-U.S. corporation owns, directly or indirectly, at least 25%, by value, of the shares of another corporation, it will be treated as if it holds directly its proportionate share of the assets and receives directly its proportionate share of the income of such other corporation.
The determination as to whether a non-U.S. corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, the composition of the income and assets of the non-U.S. corporation from time to time and the nature of the activities performed by such non-U.S. corporation. Based on current estimates of Volaris’ gross income and gross assets, the nature of its business and its current business plans (all of which are subject to change), Volaris does not believe it was classified as a PFIC for its 2012 taxable year and it does not expect to be classified as such for its current taxable year (although the determination cannot be made until the end of such taxable year), and Volaris intends to continue its operations in such a manner that it does not expect to be classified as a PFIC in the foreseeable future. There can be no assurance in this regard, because the PFIC determination is made annually and is based on the portion of Volaris’ assets and income that is characterized as passive under the PFIC rules. Moreover, Volaris’ business plans may change, which may affect the PFIC determination in future years. Because of these uncertainties, it is possible that Volaris may be a PFIC for the current or any other taxable year.
If Volaris is or becomes a PFIC for any taxable year during which a U.S. Holder holds ADSs, the U.S. Holder will be subject to special tax rules with respect to any “excess distributions” that the U.S. Holder receives and any gain realized from a sale or other disposition of the ADSs, unless the U.S. Holder makes a “mark-to-market” election or a “qualified electing fund” election, as discussed below. Distributions received by a U.S.
 
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Holder in a taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the ADSs will be treated as excess distributions. Under these special tax rules:
 
 	•	 	the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs;	
 
 	•	 	the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which Volaris became a PFIC, will be treated as ordinary income; and	
 
 	•	 	the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.	
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ADSs cannot be treated as capital, even if a U.S. Holder holds the ADSs as capital assets. If Volaris were a PFIC, certain subsidiaries and other entities in which Volaris has a direct or indirect interest may also be PFICs, or Lower-tier PFICs. Under attribution rules, U.S. Holders would be deemed to own their proportionate shares of Lower-tier PFICs and would be subject to U.S. federal income tax according to the rules described above on (i) certain distributions by a Lower-tier PFIC and (ii) a disposition of shares of a Lower-tier PFIC, in each case as if the U.S. Holder held such shares directly, even though such U.S. Holder had not received the proceeds of those distributions or dispositions.
If Volaris is a PFIC, a U.S. Holder may avoid taxation under the rules described above by making a “qualified electing fund” election to include such U.S. Holder’s share of Volaris’ income on a current basis, provided that Volaris furnishes such U.S. Holder annually with certain tax information. If Volaris concludes that it should be treated as a PFIC for any taxable year, Volaris intends to notify each U.S. Holder of such fact. However, there can be no guarantee that Volaris will be willing or able to provide the information needed by any U.S. Holder to make a “qualified electing fund” election with respect the ADSs.
If a U.S. Holder makes a “qualified electing fund” election, such U.S. Holder will generally be taxable currently on its pro rata share of Volaris’ ordinary earnings and net capital gains (at ordinary income and capital gain rates, respectively) for each taxable year during which Volaris is treated as a PFIC, regardless of whether or not such U.S. Holder receives distributions, so that the U.S. Holder will recognize taxable income without the corresponding receipt of cash from Volaris with which to pay the resulting tax obligation. The basis in the ADSs held by such U.S. Holder will be increased to reflect taxed but undistributed income. Distributions of income that were previously taxed will result in a corresponding reduction of basis in the ADSs, and will not be taxed again as distributions to the U.S. Holder.
Alternatively, a U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election with respect to such stock (but not for the shares of any Lower-tier PFIC) to elect out of the tax treatment discussed above. A U.S. Holder electing the mark-to-market regime generally would compute gain or loss at the end of each taxable year as if the ADSs had been sold at fair market value. Any gain recognized by the U.S. Holder under mark-to-market treatment, or on an actual sale, would be treated as ordinary income, and the U.S. Holder would be allowed an ordinary deduction for any decrease in the value of its ADSs as of the end of any taxable year, and for any loss recognized on an actual sale, but only to the extent, in each case, of previously included mark-to-market income not offset by previously deducted decreases in value. Any loss on an actual sale of ADSs would be a capital loss to the extent it exceeds previously included mark-to-market income not offset by previously deducted decreases in value. A U.S. Holder’s basis in ADSs will be adjusted to reflect any such income or loss amounts. If a U.S. Holder makes such an election, the tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by Volaris, except that the reduced 15% rate discussed above under “—Taxation of Dividends and Other Distributions” would not apply.
 
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The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. The New York Stock Exchange is a qualified exchange. We expect that the ADSs will be listed on the New York Stock Exchange and, consequently, if the ADSs are regularly traded, the mark-to-market election would be available to a U.S. Holder of ADSs if Volaris were treated as a PFIC.
A U.S. Holder who owns ADSs during any taxable year that Volaris is treated as a PFIC would be required to file IRS Form 8621. U.S. Holders should also be aware that recently enacted legislation may broaden the current IRS Form 8621 filing requirements or impose an additional annual filing requirement for U.S. persons owning shares of a PFIC. The legislation does not describe what information would be required to be included in either situation, but grants the Secretary of the U.S. Treasury Department power to make this determination. U.S. Holders are encouraged to consult their own tax advisors regarding the application of the PFIC rules to the ADSs, the availability and advisability of making a mark-to-market election to avoid the adverse tax consequences of the PFIC rules should Volaris be considered a PFIC for any taxable year and the application of the recently enacted legislation to their particular situation.
Additional Tax on Net Investment Income
If a U.S. holder is not a corporation, a U.S. Holder will generally be subject to a 3.8% tax on the lesser of (i) the U.S. Holder’s “net investment income” for the taxable year and (ii) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold. A U.S. Holder’s net investment income will generally include any dividend income on the ADSs and gain recognized by the U.S. holder with respect to the sale or other taxable disposition of the ADSs, unless such income or gain is derived in the ordinary course of the U.S. Holder’s trade or business (other than a trade or business that consists of certain passive or trading activities). U.S. Holders that are individuals, estates or trusts are encouraged to consult their own tax advisors regarding the applicability the additional tax on net investment income to their income and gain in respect of the ADSs.
U.S. Information Reporting and Backup Withholding
Dividend payments with respect to ADSs and proceeds from the sale, exchange or redemption of ADSs may be subject to information reporting to the IRS and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding and establishes such exempt status. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund in a timely manner with the IRS and furnishing any required information. U.S. Holders are encouraged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
In addition, U.S. Holders should be aware that recently enacted legislation imposes new reporting requirements with respect to the holding of certain foreign financial assets, including stock of foreign issuers which is not held in an account maintained by certain financial institutions, if the aggregate value of all of such assets exceeds U.S.$50,000. U.S. Holders are encouraged to consult their own tax advisors regarding the application of the information reporting rules to ADSs and the application of the recently enacted legislation to their particular situations.
PROSPECTIVE INVESTORS ARE ENCOURAGED TO CONSULT THEIR OWN INDEPENDENT TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF ADSs.
 
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Mexican Taxation
General
The following summary of certain Mexican federal income tax consequences of the purchase, ownership and disposition of ADSs or CPOs or the Series A shares underlying the CPOs, is based upon the federal tax laws of Mexico as in effect on the date of this prospectus, which are subject to change. Prospective purchasers of ADSs or CPOs are encouraged to consult their own tax advisors as to the Mexican or other tax consequences of the purchase, ownership and disposition of ADSs or CPOs and indirectly the Series A shares underlying the CPOs, including, in particular, the effect of any foreign, state or municipal tax laws.
This summary is based upon the Mexican federal income tax laws in effect on the date of this prospectus, which are subject to change and does not describe any tax consequences arising under the laws of any state or municipality, other than the federal laws of Mexico.
Holders of ADSs or CPOs are encouraged to consult their own tax advisors as to their entitlement to the benefits, if any, afforded by the U.S.-Mexico Tax Treaty regarding income tax.
Mexico has also entered into and is negotiating several other tax treaties with various countries, that may have an impact on the tax treatment of the purchase, ownership and disposition of ADSs, CPOs or the Series A shares underlying the CPOs. Prospective purchasers of the ADSs or CPOs are encouraged to consult their own tax advisors as to the tax consequences, if any, of any such treaties.
The following summary of the Mexican federal income tax consequences of the purchase, ownership or disposition of ADSs or CPOs is a general summary of the principal consequences, under Mexican tax law and the U.S.-Mexico Tax Treaty, as currently in effect, of such purchase, ownership or disposition of ADSs or CPOs by non-Mexican holders (but not by holders who are or may be deemed residents of Mexico for tax purposes), that will not hold ADSs or CPOs in connection with the conduct of a trade or business through a permanent establishment for tax purposes, in Mexico.
For purposes of Mexican taxation, individuals are residents of Mexico for tax purposes if they have established their place of residence in Mexico, unless they have a place of residence in a different country, in which case such individuals will only be considered residents of Mexico for tax purposes if they have their center of vital interests ( centro de intereses vitales ) in Mexico. Mexican law considers individuals to have their center of vital interests in Mexico if (i) at least 50% of their income is derived from Mexican sources or (ii) their principal center of professional activities is located in Mexico, among others. An individual will also be considered a resident of Mexico if such individual is a state employee, regardless of the location of such person’s core of vital interests. A legal entity is a resident of Mexico if it is incorporated under the laws of Mexico, or if it maintains the principal administration of its business or the effective location of its management in Mexico.
A permanent establishment in Mexico of a non-Mexican resident will be regarded as a resident of Mexico for tax purposes, and any and all income attributable to such permanent establishment will be required to pay taxes in Mexico in accordance with applicable law.
Dividends
Under the provisions of the Mexican Income Tax Law ( Ley del Impuesto Sobre la Renta ), dividends paid to non-Mexican holders with respect to ADSs or CPOs are currently not subject to Mexican withholding or similar taxes.
Dividends paid from distributable earnings that have not been subject to Mexican corporate income tax, are subject to a tax at the corporate level payable by us (and not by shareholders or holders of ADSs or CPOs). This corporate tax on the distribution of earnings is not final for us, and may be credited by us against income tax payable during the fiscal year in which the tax was paid and for the following two fiscal years. Dividends paid from distributable earnings, after corporate income tax has been paid with respect to those earnings, are not subject to this corporate tax.
 
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Disposition of ADSs or CPOs
The sale or the disposition of ADSs or CPOs by a non-Mexican holder will not be subject to any Mexican tax, if the transaction is carried out through the Mexican Stock Exchange or other securities markets approved by the Ministry of Finance and Public Credit ( Secretariá de Hacienda y Crédito Público ).
The exemption referred to in the previous paragraph would not be applicable (i) if the person or group of persons that directly or indirectly hold 10% or more of the shares of Volaris, in a period of 24 months, sell 10% or more of such shares, through one transaction or through more than one simultaneous or successive transactions, including transactions conducted through derivatives or in any other analogous or similar manner, and (ii) if a person or group of persons who control Volaris sell their control through one transaction or more than one simultaneous or successive transactions in a period of 24 months, including transactions conducted through derivatives or in any other analogous or similar manner. For purposes of the above, “control” and “group of persons” have the meaning ascribed to them in the Mexican Securities Market Law. Gains received by a non-resident holder arising out of the sale or other transfers of ADSs or CPOs made in any of the circumstances described in (i) and (ii) above, are deemed as income arising from Mexican source subject to Mexican income tax.
Gain on sales or other dispositions of ADSs or CPOs made in circumstances other than those described in the first paragraph of this section, generally would be subject to Mexican tax at a rate of 25% based on the aggregate proceeds received from the transaction or, subject to certain requirements applicable to the seller (including the appointment of a representative in Mexico for tax purposes to pay the applicable taxes), on any gain arising from a sale or other disposition as described in the next paragraph. If income of a non-resident holder is subject to a preferential tax regime (as defined by the Mexican Income Tax Law), the applicable rate may be up to 40% on the gross income obtained.
A non-resident holder may elect to pay taxes on the gains realized from the sale of our shares on a net basis (sales price less tax cost basis) at a rate of 30%, provided that the income of the non-resident holder is not subject to a preferential tax regime (as such terms are defined by the Mexican Income Tax Law), the non-resident holder appoints a legal representative in Mexico for purposes of the disposition of the shares and the representative files a tax notice claiming the election and a tax return coupled with a report issued by a public accountant.
Pursuant to the U.S.-Mexico Tax Treaty, gains realized by a holder of ADSs or CPOs that is eligible to claim benefits thereunder may be exempt from Mexican income tax on gains realized on a sale or other disposition of shares, if such holder owned, directly or indirectly, less than 25% of our outstanding capital stock during the 12-month period preceding such disposition provided certain requirements are met. These requirements include the obligation to (i) prove tax treaty residence, (ii) appoint a legal representative in Mexico for taxation purposes, and (iii) present tax reports prepared by authorized certified public accountants.
Single Rate Business Tax Law and Value Added Tax
The disposition of the ADSs or CPOs made by non-resident holders would be exempt from the payment of the Single Rate Business Tax, pursuant to the Single Rate Business Tax Law ( Ley del Impuesto Empresarial a Tasa Única ).
Likewise, according to the provisions of the Value Added Tax Law ( Ley del Impuesto al Valor Agregado ), the disposition of the ADSs or CPOs made by non-resident holders would be exempt from the Value Added Tax.
Other Mexican Taxes
There are currently no Mexican estate, gift, inheritance or value added taxes applicable to the purchase, ownership or disposition of ADSs or CPOs. However, gratuitous transfers of ADSs or CPOs may result in the imposition of a Mexican federal income tax upon the recipient in certain circumstances.
There are currently no Mexican stamp, registration or similar taxes payable with respect to the purchase, ownership or disposition of ADSs or CPOs.
 
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 UNDERWRITERS
Under the terms and subject to the conditions contained in an underwriting agreement for sales outside of Mexico, dated the date of this prospectus, or the international underwriting agreement, the international underwriters, for whom Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC are acting as representatives, have agreed to purchase, and we and the selling shareholder have agreed to sell to the international underwriters, the number of ADSs indicated below:

Name	  	Number of ADSs	
Deutsche Bank Securities Inc.	  		
Morgan Stanley & Co. LLC	  		
UBS Securities LLC	  		
Barclays Capital Inc.	  		
Cowen and Company, LLC	  		
Evercore Group L.L.C.	  		
Santander Investment Securities Inc.	  		
	  	 	
Total	  		
We and the selling shareholders have also entered into an underwriting agreement ( contrato de colocación ) with Deutsche Securities, S.A. de C.V. Casa de Bolsa, Morgan Stanley México, Casa de Bolsa, S.A. de C.V., UBS Casa de Bolsa, S.A. de C.V., Grupo Financiero UBS, Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander and Evercore Casa de Bolsa, S.A. de C.V., providing for the concurrent offer and sale of Series A shares in a public offering in Mexico for the number of shares indicated below:

Name	  	Number of
Series A shares	
Deutsche Securities, S.A. de C.V. Casa de Bolsa	  		
Morgan Stanley México, Casa de Bolsa, S.A. de C.V.	  		
UBS Casa de Bolsa, S.A. de C.V., Grupo Financiero UBS	  		
Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander	  		
Evercore Casa de Bolsa, S.A. de C.V.	  		
	  	 	
Total	  		
The international underwriters are offering the ADSs subject to their acceptance of the ADSs from us and the selling shareholders and subject to prior sale. The international underwriting agreement provides that the obligations of the international underwriters to pay for and accept delivery of the ADSs offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The international underwriters are obligated to take and pay for all of the ADSs offered by this prospectus if any such ADSs are taken. However, the international underwriters are not required to take or pay for the ADSs covered by the international underwriters’ over- allotment option described below.
The international underwriters initially propose to offer a portion of the ADSs directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of U.S.$        an ADS under the public offering price (which is to be equivalent to the public offering price, in pesos, to be applicable to Series A shares sold in the Mexican public offering). The international underwriters may allow, and such dealers may reallow, a concession not in excess of U.S.$        an ADS to certain dealers. After the initial offering of the ADSs, the offering price and other selling terms may from time to time be varied by the international underwriters. The international underwriters will receive underwriting discounts and commissions calculated based upon approximately    % of the global offering. The international underwriters may sell the ADSs through their affiliates.
 
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The international underwriters and the Mexican underwriters have entered into an intersyndicate agreement providing for the coordination of their activities. Under the intersyndicate agreement, the international underwriters and the Mexican underwriters are permitted to purchase and sell ADSs and Series A shares among each other, are permitted to exercise the over-allotment option on an independent but consolidated basis, and may also engage in coordinated stabilization activities, subject to the consent of and at the direction of the international underwriters. Subject to certain exceptions, under the terms of the intersyndicate agreement:
 
 	•	 	the international underwriters, and any bank, broker or dealer to whom they sell ADSs, will not offer to sell or resell ADSs to any person whom they believe to be a Mexican person or to any person whom they believe intends to resell ADSs to a Mexican person; and	
 
 	•	 	the Mexican underwriters, and any Mexican broker-dealer part of the underwriting syndicate, will offer to sell or resell Series A shares only to persons whom they believe to be Mexican persons and to persons whom they believe intend to resell Series A shares only to Mexican persons.	
The closing of this offering and the Mexican offering are conditioned upon one another.
The selling shareholders have granted to the international underwriters and the Mexican underwriters independent options, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of                      additional CPOs in the form of ADSs and                      additional Series A shares, respectively, at the public offering price listed on the cover page of this prospectus less underwriting discounts and commissions. The international underwriters and the Mexican underwriters may exercise these options solely for the purpose of covering over-allotments, if any, made in connection with the offering of the ADSs and Series A shares offered by this prospectus and the Mexican prospectus, respectively, on an independent but coordinated basis. If the international underwriters’ option is exercised in full, the total amount of the offering to the public would be U.S.$        , the total international underwriters’ discounts and commissions would be U.S.$        and total proceeds to us and the selling shareholders would be U.S.$        million.
We have applied to list the ADSs on the New York Stock Exchange under the symbol “VLRS” and the Series A shares on the Mexican Stock Exchange under the symbol “VOLAR.”
We, the selling shareholders, the executive officers and certain of our directors and other shareholders, who beneficially own substantially all of the shares of our common stock, have agreed that, without the prior written consent of Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC, it will not, during the period ending 180 days after the date of this prospectus:
 
 	•	 	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any of the ADSs, CPOs, Series A shares, or Series B shares beneficially owned by it, or any securities convertible into or exercisable or exchangeable for the ADSs, CPOs, Series A shares or Series B shares;	
 
 	•	 	file any registration statement with the SEC or the CNBV relating to the offering of any of the ADSs, CPOs, Series A shares, or Series B shares or any securities convertible into or exercisable or exchangeable for the ADSs, CPOs, Series A shares or Series B shares; or	
 
 	•	 	enter into any swap or other arrangement that transfers to another person, in whole or in part, any of the economic consequences of ownership of the ADSs, CPOs, Series A shares or Series B shares;	
whether any transaction described above is to be settled by delivery of the ADSs or Series A shares or such other securities, in cash or otherwise. The determination regarding whether to release a party from the restrictions described above will be based on the expected impact on the trading price of the ADSs or the Series A shares. The restrictions described in this paragraph do not apply to:
 
 	•	 	the sale of the ADSs or Series A shares to the international underwriters or the Mexican underwriters; or	
 
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 	•	 	the issuance by us of the ADSs or Series A shares upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the international underwriters have been advised in writing.	
In addition, in the event that either (1) during the last 17 days of the “lock- up” period, we release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the “lockup” period, we announce that we will release earnings results during the 16-day period beginning on the last day of the “lock-up” period, then in either case the expiration of the “lock-up” will be extended until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless the international underwriters waive, in writing, such an extension. The restrictions described above are subject to certain exceptions. 
In order to facilitate the offering of the ADSs, the international underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the ADSs. Specifically, the international underwriters may sell more ADSs than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of ADSs available for purchase by the international underwriters under the over-allotment option. The international underwriters can close out a covered short sale by exercising the over-allotment option or purchasing ADSs in the open market. In determining the source of ADSs to close out a covered short sale, the international underwriters will consider, among other things, the open market price of ADSs compared to the price available under the over-allotment option. The international underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The international underwriters must close out any naked short position by purchasing ADSs in the open market. A naked short position is more likely to be created if the international underwriters are concerned that there may be downward pressure on the price of the ADSs in the open market after pricing that could adversely affect investors who purchase in the offering. Mexican underwriters may not create naked shorts. As an additional means of facilitating the offering, the international underwriters may bid for, and purchase, ADSs in the open market to stabilize the price of the ADSs. The underwriting syndicate may also reclaim selling concessions allowed to the international underwriters or a dealer for distributing the ADSs in the offering, if the syndicate repurchases previously distributed ADSs to cover syndicate short positions or to stabilize the price of the ADSs. These activities may raise or maintain the market price of the ADSs above independent market levels or prevent or retard a decline in the market price of the ADSs. Similarly, the international underwriters may, in order to facilitate the offering of the Series A shares in Mexico, engage in transactions that stabilize the price of the Series A shares. The underwriters are not required to engage in these activities, and may end any of these activities at any time.
From time to time, the international underwriters and the Mexican underwriters have provided, and continue to provide, investment banking services to us.
Evercore Partners Inc., or Evercore, an affiliate of Evercore Group L.L.C., one of the underwriters of the international offering, has a beneficial ownership interest of less than one percent of our common shares through its subsidiary Protego, PE S. de R.L., or Protego, which holds an indirect interest in Discovery Air, one of our principal shareholders. Pedro Aspe Armella, one of the members of our board of directors, is co-chairman of the board of directors of Evercore. Mr. Aspe currently beneficially owns approximately 1.50% of our common shares. In addition, a senior managing director of Evercore Group L.L.C. and an officer of Protego, collectively, beneficially own an aggregate of less than one percent of our common shares.
We, the selling shareholders and the international underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.
The selling shareholders and any broker-dealers that act in connection with the sale of CPOs in the form of ADSs may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act, and any commissions received by such broker-dealers and any profit on the resale of shares sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities Act.
 
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Pricing of the Offering
Prior to this offering, there has been no public market for the Series A shares or ADSs. The initial public offering price was determined by negotiations among us, the selling shareholders and the international underwriters. Among the factors considered in determining the initial public offering price were the future prospects of our company and our industry in general, our sales, earnings and certain other financial operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to those of our company.
Selling Restrictions
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each international underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and will not make an offer of ADSs which are the subject of the offering contemplated by this prospectus to the public in that Relevant Member State, other than:
 
 	(a)	to any legal entity which is a qualified investor as defined in the Prospectus Directive;	
 
 	(b)	to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representative for any such offer; or	
 
 	(c)	in any other circumstances falling within Article 3(2) of the Prospectus Directive,	
provided that no such offer of ADSs shall result in a requirement for the publication by us or the international underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of the above, the expression an “offer of ADSs to the public” in relation to any ADSs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the ADSs to be offered so as to enable an investor to decide to purchase or subscribe the ADSs, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in that Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
United Kingdom
The international underwriters have represented and agreed that they have only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of the ADSs in circumstances in which Section 21(1) of such Act does not apply to us and they have complied and will comply with all applicable provisions of such Act with respect to anything done by them in relation to any ADSs in, from or otherwise involving the United Kingdom.
Switzerland
No ADSs will be publicly offered or distributed in Switzerland. ADSs shall be offered in Switzerland privately only to a select circle of investors without the use of any public means of information or advertisement. This document does not constitute an offer prospectus within the meaning of Art. 652a of the Swiss Code of Obligations. It has not been filed with or approved by any Swiss regulatory authority or stock exchange. The
 
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ADSs will not be registered in Switzerland or listed at any Swiss stock exchange. This document may not be distributed or used in Switzerland without our prior written approval.
Hong Kong
The ADSs may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ADSs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ADSs may not be circulated or distributed, nor may the ADSs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the “SFA,” (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the ADSs are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire capital stock of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
Japan
The ADSs have not been and will not be registered under the Securities and Exchange Law of Japan, or the “Securities and Exchange Law,” and the underwriter has agreed that it will not offer or sell any ADSs, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
Dubai
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or DFSA. This prospectus is intended for distribution only to persons of a type
 
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specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
 
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 EXPENSES OF THE GLOBAL OFFERING
We estimate that our expenses in connection with the global offering, other than underwriting discounts and commissions, will be as follows:

Expenses	  	Amount	 	
Securities and Exchange Commission registration fee	  	U.S.$	                	  	
Exchange listing fees	  	 	150,000	  	
FINRA filing fee	  	 	58,000	  	
Mexican fees, including Mexican Stock Exchange listing fee	  	 	324,252	  	
Printing and engraving expenses	  	 	385,000	  	
Legal fees and expenses	  	 	2,027,242	  	
Accountant fees and expenses	  	 	337,000	  	
Miscellaneous costs	  	 	1,400,000	  	
	  	 	 	 	
Total	  	U.S.$	                	  	
	  	 	 	 	
All amounts in the table are estimated except the Securities and Exchange Commission registration fee, the exchange listing fee, the FINRA filing fee and the Mexican fees.
The depositary has agreed to pay some of these expenses on our behalf, subject to the closing of the global offering.
The total underwriting discounts and commissions that we are required to pay will be U.S.$                    , or 4.0% of the gross proceeds of the global offering to us. We have also agreed to reimburse the international underwriters for certain of their expenses in the amount of up to US$0.6 million.
 
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 VALIDITY OF SECURITIES
The validity of the Series A shares and the CPOs will be passed upon for us by Ritch Mueller, S.C. and for the underwriters by Raz Guzman, S.C. The validity of the ADSs will be passed upon for us by Shearman & Sterling LLP and for the underwriters by Paul Hastings LLP.
 
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 EXPERTS
The consolidated financial statements of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. at December 31, 2012 and 2011, and for each of the three years in the period ended December 31, 2012, appearing in this prospectus, have been audited by Mancera, S.C., independent registered public accounting firm and a member practice of Ernst & Young Global, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
 WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit. Each statement regarding a contract, agreement or other document is qualified in its entirety by reference to the actual document.
We are subject to the informational requirements of the Exchange Act, applicable to foreign private issuers and, in accordance therewith, file reports and other information with the SEC. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information to be filed with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington D.C. 20549. Copies of the materials may be obtained from the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov, from which you can electronically access the registration statement and its materials.
As a foreign private issuer, we are not subject to the same disclosure requirements as a domestic U.S. Registrant under the Exchange Act. For example, we are not required to prepare and issue quarterly reports. However, we will be required to file annual reports on Form 20-F within the time period required by the SEC, which is currently four months from December 31, the end of our fiscal year. As a foreign private issuer, we are exempt from Exchange Act rules regarding proxy statements and short-swing profits.
We will provide the depositary with annual reports in English, which will include a review of operations and annual audited consolidated financial statements prepared according to IFRS.
You may request a copy of our SEC filings, at no cost, by contacting us at the number or address specified below.
Av. Antonio Dovalí Jaime No. 70, 13th Floor, Tower B
Colonia Zedec Santa Fe
México, D.F. 01210
Attention: Investor Relations
Tel.: +52-55-5261-6400
 
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 ENFORCEABILITY OF CIVIL LIABILITIES
We are a variable capital public stock corporation ( sociedad anónima bursatil de captial variable ) organized under the laws of the United Mexican States, or Mexico, and our by-laws are governed by Mexican law. Substantially all of our directors and officers and certain of the experts named herein are non-U.S. residents, and all or a significant portion of the assets of those persons may be, and the most significant portion of our assets are, located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon those persons or to enforce against them or against us in U.S. courts judgments predicated upon civil liability provisions of the U.S. federal or state securities laws. We have been advised by our Mexican counsel, Ritch Mueller, S.C, that there is doubt as to the enforceability, in original actions in Mexican courts, of liabilities predicated solely on the U.S. federal securities laws and as to the enforceability in Mexican courts of judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Additionally, Ritch Mueller, S.C. has advised us, among other things, that no treaty is currently in effect between the United States and Mexico that addresses the reciprocal enforcement of foreign judgments, and that service of process by mail does not constitute effective service under Mexican law and if a final judgment is obtained based on service of process by mail, it would not be enforceable in Mexico.
 
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 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 	  	Page	 	
Report of Independent Registered Public Accounting Firm	  	 	F-2	  	
		
Audited Consolidated Financial Statements:	  				
		
Consolidated Statements of Financial Position	  	 	F-3	  	
Consolidated Statements of Operations	  	 	F-4	  	
Consolidated Statements of Comprehensive Income	  	 	F-5	  	
Consolidated Statements of Changes in Equity	  	 	F-6	  	
Consolidated Statements of Cash Flows	  	 	F-7	  	
Notes to Consolidated Financial Statements	  	 	F-8	  	
		
Unaudited Interim Condensed Consolidated Financial Statements	  				
		
Unaudited Interim Condensed Consolidated Statements of Financial Position	  	 	F-54	  	
Unaudited Interim Condensed Consolidated Statements of Operations	  	 	F-56	  	
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income	  	 	F-57	  	
Unaudited Interim Condensed Consolidated Statements of Changes in Equity	  	 	F-58, F-59	  	
Unaudited Interim Condensed Consolidated Statements of Cash Flows	  	 	F-60	  	
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	  	 	F-61	  	
 
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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries
We have audited the accompanying consolidated statements of financial position of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with International Financial Reporting Standards, as issued by the International Accounting Standards Board.
As mentioned in Note 1(u), the Company decided to restate its consolidated financial statements as of December 31, 2012 and 2011 and for the year ended December 31, 2011.

	  	 	Mancera, S.C.	  	
	  	 	A member practice of	  	
	  	 	Ernst & Young Global	  	
		
	  	 	/s/ Francisco Álvarez del Campo	  	
Mexico City, Mexico
June 11, 2013	  				
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Consolidated Statements of Financial Position
(In thousands of Mexican pesos)

 	  	Thousands of U.S.
dollars 2012	 	 	At December 31,	 	
	  			 	2012
(Restated)	 	 	2011
(Restated)	 	
Assets	  				 				 				
Current assets:	  				 				 				
Cash and cash equivalents (Note 6)	  	US$	66,540	  	 	Ps.	822,076	  	 	Ps.	441,068	  	
Accounts receivable:	  				 				 				
Related parties (Note 7)	  	 	293	  	 	 	3,619	  	 	 	3,072	  	
Other accounts receivable, net (Note 8)	  	 	19,210	  	 	 	237,331	  	 	 	160,420	  	
Recoverable taxes	  	 	11,847	  	 	 	146,366	  	 	 	75,447	  	
Inventories (Note 9)	  	 	7,863	  	 	 	97,150	  	 	 	80,010	  	
Prepaid expenses and other current assets (Note 12)	  	 	21,682	  	 	 	267,874	  	 	 	199,950	  	
Financial instruments (Note 3)	  	 	191	  	 	 	2,360	  	 	 	933	  	
Guarantee deposits (Note 13)	  	 	19,285	  	 	 	238,242	  	 	 	169,647	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	  	 	146,911	  	 	 	1,815,018	  	 	 	1,130,547	  	
Non-current assets:	  				 				 				
Rotable spare parts, furniture and equipment, net (Note 10)	  	 	96,750	  	 	 	1,195,319	  	 	 	1,517,298	  	
Intangible assets (Note 11)	  	 	4,876	  	 	 	60,235	  	 	 	58,204	  	
Deferred income tax (Note 19)	  	 	25,899	  	 	 	319,969	  	 	 	302,125	  	
Guarantee deposits (Note 13)	  	 	181,688	  	 	 	2,244,665	  	 	 	2,002,005	  	
Other assets	  	 	4,374	  	 	 	54,045	  	 	 	51,502	  	
Assets classified as held for sale (Note 10)	  	 	996	  	 	 	12,307	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	US$	461,494	  	 	Ps.	5,701,558	  	 	Ps.	5,061,681	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and equity	  				 				 				
Short-term liabilities:	  				 				 				
Unearned transportation revenue	  	US$	101,879	  	 	Ps.	1,258,670	  	 	Ps.	825,390	  	
Accounts payable:	  				 				 				
Suppliers	  	 	42,118	  	 	 	520,345	  	 	 	535,464	  	
Related parties (Note 7)	  	 	275	  	 	 	3,399	  	 	 	2,097	  	
Accrued liabilities (Note 15a)	  	 	61,985	  	 	 	765,792	  	 	 	651,049	  	
Taxes payable	  	 	45,361	  	 	 	560,418	  	 	 	426,023	  	
Financial instruments (Note 3)	  	 	2,996	  	 	 	37,011	  	 	 	28,713	  	
Financial debt (Note 5)	  	 	42,687	  	 	 	527,383	  	 	 	686,932	  	
Other liabilities (Note 15b)	  	 	3,956	  	 	 	48,879	  	 	 	23,254	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total short-term liabilities	  	 	301,257	  	 	 	3,721,897	  	 	 	3,178,922	  	
Long-term liabilities:	  				 				 				
Financial instruments (Note 3)	  	 	8,960	  	 	 	110,702	  	 	 	134,037	  	
Financial debt (Note 5)	  	 	51,199	  	 	 	632,540	  	 	 	725,462	  	
Other liabilities (Note 15b)	  	 	11,893	  	 	 	146,929	  	 	 	160,708	  	
Employee benefits (Note 16)	  	 	333	  	 	 	4,111	  	 	 	2,813	  	
Deferred income taxes (Note 19)	  	 	867	  	 	 	10,712	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	  	 	374,509	  	 	 	4,626,891	  	 	 	4,201,942	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Equity (Note 18):	  				 				 				
Capital stock	  	 	192,325	  	 	 	2,376,098	  	 	 	1,966,313	  	
Treasury shares	  	 	(10,825	) 	 	 	(133,723	) 	 	 	—  	  	
Contributions for future capital increases	  	 	—  	  	 	 	1	  	 	 	1	  	
Legal reserve	  	 	3,096	  	 	 	38,250	  	 	 	38,250	  	
Additional paid-in capital	  	 	(15,448	) 	 	 	(190,850	) 	 	 	—  	  	
Accumulated losses	  	 	(75,246	) 	 	 	(929,645	) 	 	 	(1,144,884	) 	
Other accumulated comprehensive losses	  	 	(8,734	) 	 	 	(107,910	) 	 	 	(109,120	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total equity attributable to equity holders of the parent	  	 	85,168	  	 	 	1,052,221	  	 	 	750,560	  	
Non-controlling interest	  	 	1,817	  	 	 	22,446	  	 	 	109,179	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total equity	  	 	86,985	  	 	 	1,074,667	  	 	 	859,739	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and equity	  	US$	461,494	  	 	Ps.	5,701,558	  	 	Ps.	5,061,681	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Amounts for 2012 and 2011 are restated (see Note 1u).
The accompanying notes are an integral part of these consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Consolidated Statements of Operations
(In thousands of Mexican pesos, except for earnings per share)

 	 	Thousands of U.S.
dollars 2012
except for earnings
per share	 	 	For the years ended
December 31,	 	
	 			 	2012	 	 	2011
(Restated)	 	 	2010	 	
Operating revenues (Note 1d):	 				 				 				 				
Passenger	 	US$	823,721	  	 	Ps.	10,176,747	  	 	Ps.	8,036,275	  	 	Ps.	6,278,469	  	
Non-ticket	 	 	122,195	  	 	 	1,509,668	  	 	 	842,341	  	 	 	498,921	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	945,916	  	 	 	11,686,415	  	 	 	8,878,616	  	 	 	6,777,390	  	
Other operating income (Note 20)	 	 	(5,569	) 	 	 	(68,800	) 	 	 	(73,831	) 	 	 	(158	) 	
Fuel	 	 	382,861	  	 	 	4,730,089	  	 	 	3,823,232	  	 	 	2,146,011	  	
Aircraft rent (Note 14c)	 	 	152,631	  	 	 	1,885,696	  	 	 	1,508,135	  	 	 	1,197,022	  	
Salaries and benefits	 	 	105,464	  	 	 	1,302,971	  	 	 	1,120,359	  	 	 	852,123	  	
Landing, take-off and navigation expenses	 	 	132,740	  	 	 	1,639,945	  	 	 	1,281,583	  	 	 	867,690	  	
Sales, marketing and distribution expenses	 	 	60,861	  	 	 	751,919	  	 	 	750,474	  	 	 	615,431	  	
Maintenance expenses	 	 	40,377	  	 	 	498,836	  	 	 	379,626	  	 	 	276,128	  	
Other operating expenses (Note 20)	 	 	28,857	  	 	 	356,517	  	 	 	359,046	  	 	 	255,413	  	
Depreciation and amortization (Note 10 and 11)	 	 	17,079	  	 	 	211,002	  	 	 	102,977	  	 	 	56,572	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	 	30,615	  	 	 	378,240	  	 	 	(372,985	) 	 	 	511,158	  	
Finance income	 	 	1,102	  	 	 	13,611	  	 	 	5,539	  	 	 	5,091	  	
Finance cost	 	 	(7,263	) 	 	 	(89,731	) 	 	 	(57,718	) 	 	 	(52,221	) 	
Exchange (loss) gain, net	 	 	(7,716	) 	 	 	(95,322	) 	 	 	110,150	  	 	 	(56,144	) 	
Other financing cost	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(3,455	) 	
Income (loss) before income tax	 	 	16,738	  	 	 	206,798	  	 	 	(315,014	) 	 	 	404,429	  	
Income tax (expense) benefit (Note 19)	 	 	(281	) 	 	 	(3,481	) 	 	 	(476	) 	 	 	238,684	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	US$	16,457	  	 	Ps.	203,317	  	 	Ps.	(315,490	) 	 	Ps.	643,113	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Attribution of net income (loss):	 				 				 				 				
Equity holders of the parent	 	US$	17,422	  	 	Ps.	215,239	  	 	Ps.	(293,540	) 	 	Ps.	572,234	  	
Non-controlling interest	 	 	(965	) 	 	 	(11,922	) 	 	 	(21,950	) 	 	 	70,879	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	US$	16,457	  	 	Ps.	203,317	  	 	Ps.	(315,490	) 	 	Ps.	643,113	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per share basic and diluted*:	 	US$	0.000024	  	 	Ps.	0.000294	  	 	Ps.	(0.000403	) 	 	Ps.	0.000786	  	
Amounts for 2011 are restated (see Note 1 u).
 
*	Per share amounts in the Company’s consolidated statements of operations reflect the retrospective application of the stock split adopted on June 11, 2013 (see Note 18).	
The accompanying notes are an integral part of these consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Consolidated Statements of Comprehensive Income
(In thousands of Mexican pesos)

 	  	Thousands of U.S.
dollars 2012	 	 	For the years ended
December 31,	 	
 	  			 	2012	 	 	2011
(Restated)	 	 	2010	 	
Net income (loss) for the year	  	US$	16,457	  	 	 	Ps.203,317	  	 	Ps.	(315,490	) 	 	Ps.	643,113	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income:	  				 				 				 				
Net gain (loss) on cash flow hedges, net of income tax effect	  	 	924	  	 	 	11,425	  	 	 	(46,704	) 	 	 	(11,555	) 	
Actuarial loss of employee benefits, net of income tax effect	  	 	(27	) 	 	 	(336	) 	 	 	(4,074	) 	 	 	(3,710	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income (loss) for the year, net of tax	  	US$	17,354	  	 	 	Ps.214,406	  	 	Ps.	(366,268	) 	 	Ps.	627,848	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Attributable to:	  				 				 				 				
Equity holders of the parent	  	US$	17,520	  	 	 	Ps.216,449	  	 	Ps.	(339,351	) 	 	Ps.	558,178	  	
Non-controlling interest	  	 	(166	) 	 	 	(2,043	) 	 	 	(26,917	) 	 	 	69,670	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	US$	17,354	  	 	 	Ps.214,406	  	 	Ps.	(366,268	) 	 	Ps.	627,848	  	

 
Amounts for 2011 are restated (see Note 1 u).
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Consolidated Statements of Changes in Equity
For the years ended December 31, 2012, 2011 and 2010
(In thousands of Mexican pesos)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	Attributable to the equity holders of the parent	 	 	 	 	 	 	 	
 	 	Capital
stock	 	 	Treasury
shares	 	 	Contributions
for future
capital
increases	 	 	Legal
reserve	 	 	Additional
paid-in
capital	 	 	Accumulated
losses	 	 	Employee
benefits	 	 	Cash flow
hedge	 	 	Total	 	 	Non-controlling
interest	 	 	Total
equity	 	
Balance as of January 1, 2010	 	Ps.	1,966,313	  	 	Ps.	—  	  	 	Ps.	1	  	 	Ps.	—  	  	 	Ps.	—  	  	 	Ps.	(1,309,492	) 	 	Ps.	(197	) 	 	Ps.	(49,056	) 	 	Ps.	607,569	  	 	Ps.	66,475	  	 	Ps.	674,044	  	
Legal costs incurred on behalf of shareholders	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(75,836	) 	 	 	—  	  	 	 	—  	  	 	 	(75,836	) 	 	 	(49	) 	 	 	(75,885	) 	
Net income for the period	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	572,234	  	 	 	—  	  	 	 	—  	  	 	 	572,234	  	 	 	70,879	  	 	 	643,113	  	
Other comprehensive loss items	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(3,701	) 	 	 	(10,355	) 	 	 	(14,056	) 	 	 	(1,209	) 	 	 	(15,265	) 	
	 				 				 				 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	572,234	  	 	 	(3,701	) 	 	 	(10,355	) 	 	 	558,178	  	 	 	69,670	  	 	 	627,848	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2010	 	 	1,966,313	  	 	 	—  	  	 	 	1	  	 	 	—  	  	 	 	—  	  	 	 	(813,094	) 	 	 	(3,898	) 	 	 	(59,411	) 	 	 	1,089,911	  	 	 	136,096	  	 	 	1,226,007	  	
Legal reserve	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	38,250	  	 	 	—  	  	 	 	(38,250	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Net loss for the period	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(293,540	) 	 	 	—  	  	 	 	—  	  	 	 	(293,540	) 	 	 	(21,950	) 	 	 	(315,940	) 	
Other comprehensive loss items	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(4,085	) 	 	 	(41,726	) 	 	 	(45,811	) 	 	 	(4,967	) 	 	 	(50,778	) 	
	 				 				 				 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(293,540	) 	 	 	(4,085	) 	 	 	(41,726	) 	 	 	(339,351	) 	 	 	(26,917	) 	 	 	(366,268	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2011 (Restated)	 	 	1,966,313	  	 	 	—  	  	 	 	1	  	 	 	38,250	  	 	 	—  	  	 	 	(1,144,884	) 	 	 	(7,983	) 	 	 	(101,137	) 	 	 	750,560	  	 	 	109,179	  	 	 	859,739	  	
Capital stock increase	 	 	498,632	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	498,632	  	 	 	—  	  	 	 	498,632	  	
Paid treasury shares (Note 18)	 	 	—  	  	 	 	(133,723	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(133,723	) 	 	 	—  	  	 	 	(133,723	) 	
Unpaid capital and treasury shares (Note 18)	 	 	(88,847	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(88,847	) 	 	 	—  	  	 	 	(88,847	) 	
Acquisition of non-controlling interest	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(190,850	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(190,850	) 	 	 	(84,690	) 	 	 	(275,540	) 	
Net income (loss) for the period	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	215,239	  	 	 	—  	  	 	 	—  	  	 	 	215,239	  	 	 	(11,922	) 	 	 	203,317	  	
Other comprehensive (loss) income items	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(342	) 	 	 	1,552	  	 	 	1,210	  	 	 	9,879	  	 	 	11,089	  	
	 				 				 				 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	215,239	  	 	 	(342	) 	 	 	1,552	  	 	 	216,449	  	 	 	(2,043	) 	 	 	214,406	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2012 (Restated)	 	Ps.	2,376,098	  	 	Ps.	(133,723	) 	 	Ps.	1	  	 	Ps.	38,250	  	 	Ps.	(190,850	) 	 	Ps.	(929,645	) 	 	Ps.	(8,325	) 	 	Ps.	(99,585	) 	 	Ps.	1,052,221	  	 	Ps.	22,446	  	 	Ps.	1,074,667	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2012	 	US$	192,325	  	 	US$	(10,825	) 	 	US$	—  	  	 	US$	3,096	  	 	US$	(15,448	) 	 	US$	(75,246	) 	 	US$	(673	) 	 	US$	(8,061	) 	 	US$	85,168	  	 	US$	1,817	  	 	US$	86,985	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts for 2012 and 2011 are restated (see Note 1 u).
The accompanying notes are an integral part of these consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Consolidated Statements of Cash Flows
(In thousands of Mexican pesos)

 	  	Thousands of  U.S.
dollars 2012	 	 	For the years ended December 31,	 	
 	  			 	2012	 	 	2011
(Restated)	 	 	2010	 	
Operating activities	  				 				 				 				
Income (loss) before income tax	  	US$	16,738	  	 	Ps.	206,798	  	 	Ps.	(315,014	) 	 	Ps.	404,429	  	
Non-cash adjustment to reconcile profit before tax to net cash flows from operating activities:	  				 				 				 				
Depreciation and amortization (Note 10 and 11)	  	 	17,079	  	 	 	211,002	  	 	 	102,977	  	 	 	61,691	  	
Allowance for doubtful accounts (Note 8)	  	 	279	  	 	 	3,442	  	 	 	10,901	  	 	 	—  	  	
Finance income	  	 	(1,102	) 	 	 	(13,611	) 	 	 	(5,539	) 	 	 	(5,091	) 	
Finance cost	  	 	7,263	  	 	 	89,731	  	 	 	57,718	  	 	 	52,221	  	
Foreign exchange	  	 	(5,690	) 	 	 	(70,292	) 	 	 	176,587	  	 	 	29,825	  	
Financial instruments	  	 	1,344	  	 	 	16,590	  	 	 	27,717	  	 	 	35,673	  	
Net gain on disposal of rotable spare parts, furniture and equipment and gain of sale and leaseback transaction (Note 20)	  	 	(3,779	) 	 	 	(46,683	) 	 	 	(71,754	) 	 	 	(8	) 	
Employee benefits (Note 15)	  	 	98	  	 	 	1,208	  	 	 	1,109	  	 	 	745	  	
Aircraft lease extension benefit and other benefits by services agreement (Note 1j and 15b)	  	 	(2,164	) 	 	 	(26,738	) 	 	 	(10,428	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from operating activities before changes in working capital and provisions	  	 	30,066	  	 	 	371,447	  	 	 	(25,726	) 	 	 	579,485	  	
Changes in operating assets and liabilities:	  				 				 				 				
Related parties	  	 	61	  	 	 	755	  	 	 	(4,944	) 	 	 	31,572	  	
Other accounts receivable	  	 	(6,525	) 	 	 	(80,609	) 	 	 	(28,922	) 	 	 	(88,838	) 	
Recoverable taxes	  	 	(5,740	) 	 	 	(70,919	) 	 	 	(17,072	) 	 	 	127,224	  	
Inventories	  	 	(1,387	) 	 	 	(17,140	) 	 	 	(35,225	) 	 	 	(4,457	) 	
Prepaid expenses	  	 	(6,537	) 	 	 	(80,767	) 	 	 	(59,245	) 	 	 	(16,031	) 	
Other assets	  	 	(206	) 	 	 	(2,543	) 	 	 	(47,174	) 	 	 	(8,924	) 	
Guarantee deposits	  	 	(25,193	) 	 	 	(311,255	) 	 	 	(800,588	) 	 	 	(315,844	) 	
Suppliers	  	 	(1,224	) 	 	 	(15,119	) 	 	 	88,127	  	 	 	250,302	  	
Accrued liabilities	  	 	9,833	  	 	 	121,487	  	 	 	209,671	  	 	 	(139,723	) 	
Taxes payable	  	 	10,084	  	 	 	124,595	  	 	 	173,577	  	 	 	(33,199	) 	
Unearned transportation revenue	  	 	35,070	  	 	 	433,280	  	 	 	320,578	  	 	 	206,589	  	
Financial instruments	  	 	(1,353	) 	 	 	(16,719	) 	 	 	(24,777	) 	 	 	(56,708	) 	
Other liabilities	  	 	3,131	  	 	 	38,685	  	 	 	98,952	  	 	 	2,712	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	 	40,080	  	 	 	495,178	  	 	 	(152,768	) 	 	 	534,160	  	
Interest received	  	 	654	  	 	 	8,084	  	 	 	5,539	  	 	 	5,091	  	
Income tax paid	  	 	(471	) 	 	 	(5,814	) 	 	 	(476	) 	 	 	(250	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows provided by (used in) operating activities	  	 	40,263	  	 	 	497,448	  	 	 	(147,705	) 	 	 	539,001	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investing activities	  				 				 				 				
Acquisitions of rotable spare parts, furniture and equipment (Note 10)	  	 	(67,206	) 	 	 	(830,305	) 	 	 	(1,193,844	) 	 	 	(286,660	) 	
Acquisitions of intangible assets (Note 11)	  	 	(2,096	) 	 	 	(25,900	) 	 	 	(21,055	) 	 	 	(34,822	) 	
Proceeds from disposals of rotable spare parts, furniture and equipment (Note 10)	  	 	84,452	  	 	 	1,043,366	  	 	 	586,869	  	 	 	135	  	
	  				 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows provided by (used in) investing activities	  	 	15,150	  	 	 	187,161	  	 	 	(628,030	) 	 	 	(321,347	) 	
	  				 	 	 	 	 	 	 	 	 	 	 	 	
Financing activities	  				 				 				 				
Legal costs incurred on behalf of shareholders	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(75,886	) 	
Interest paid	  	 	(10,310	) 	 	 	(127,375	) 	 	 	(55,224	) 	 	 	(60,237	) 	
Payments of financial debt	  	 	(56,197	) 	 	 	(694,292	) 	 	 	(261,387	) 	 	 	—  	  	
Proceeds from financial debt	  	 	44,499	  	 	 	549,769	  	 	 	878,984	  	 	 	46,058	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows (used in) provided by financing activities	  	 	(22,008	) 	 	 	(271,898	) 	 	 	562,373	  	 	 	(90,065	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Increase (decrease) in cash and cash equivalents	  	 	33,405	  	 	 	412,711	  	 	 	(213,362	) 	 	 	127,589	  	
Net foreign exchange differences on the cash balance	  	 	(2,566	) 	 	 	(31,703	) 	 	 	(22,483	) 	 	 	(25,260	) 	
Cash and cash equivalents at beginning of year	  	 	35,701	  	 	 	441,068	  	 	 	676,913	  	 	 	574,584	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of year	  	US$	66,540	  	 	Ps.	822,076	  	 	Ps.	441,068	  	 	Ps.	676,913	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non cash transactions	  				 				 				 				
Corporate Restructure	  	US$	22,345	  	 	Ps.	276,062	  	 	Ps.	—  	  	 	Ps.	—  	  	
Amounts for 2011 are restated (see Note 1u).
The accompanying notes are an integral part of these consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Notes to Consolidated Financial Statements
For the years ended December 31, 2012, 2011 and 2010
(In thousands of Mexican pesos and thousands of U.S. dollars, except when indicated otherwise)
1.  Description of the business and summary of significant accounting policies
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “Company” or “Controladora”) was incorporated in Mexico in accordance with Mexican Corporate laws on October 27, 2005. The Company is domiciled in Mexico, City at Av. Antonio Dovali Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fe, Mexico D.F.
The Company, through its subsidiary, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“Concesionaria”), has a concession to provide air transportation services for passengers, cargo and mail throughout Mexico and abroad.
The Company Concession was granted by the Mexican federal government through the Mexican Communications and Transportation Ministry ( Secretaría de Comunicaciones y Transportes, or “SCT”) on May 9, 2005 initially for a period of five years and was extended by the SCT on February 17, 2010 for an additional period of ten years.
Concesionaria made its first commercial flight as a low-cost airline on March 13, 2006. The Company operates under the trade name of “Volaris”.
These consolidated financial statements and their accompanying notes were approved by the Company’s shareholders on June 11, 2013. The Company’s shareholders have the authority to approve or modify the Company’s consolidated financial statements. Subsequent events have been considered through June 11, 2013 (see Note 23).
a)  Relevant events
Change of name—Subsequent event
On June 11, 2013, Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. changed its corporate name to Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (See Note 18).
Corporate restructure
Acquisition of additional interest in Concesionaria
Through unanimous resolutions dated November 27, 2012, December 21, 2012 and December 26, 2012, the Company´s shareholders approved a corporate restructuring with the sole purpose of acquiring the shares held by other shareholders of Concesionaria in exchange for the capital stock of the Company.
As a consequence, the Company increased its direct and indirect holding of the outstanding shares of Concesionaria by acquiring on November 27, 2012, an additional 5.28% interest in the voting shares of Concesionaria and on December 21, 2012, an additional 3.24% interest in the voting shares of Concesionaria, increasing its ownership interest after both acquisitions to 97.95%.
The difference of Ps.190,850 between the consideration paid and the carrying value of the interest acquired has been recognized in additional paid-in capital within equity and attributed to the owners of the parent.
 
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b)  Basis of preparation
Statement of compliance
These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2012 and 2011 and for the three years in the period ended December 31, 2012, and were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, using Mexican pesos as the functional and reporting currency.
Basis of measurement and presentation
The accompanying consolidated financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value. The carrying value of recognized financial assets and liabilities that are designated and accounted for as cash flow hedges are adjusted to record changes in fair values attributable to the risks that are being hedged.
Non-controlling interests represent the portion of profits or losses and net assets representing ownership interests in subsidiaries not held by the Company. Non-controlling interests are presented separately in the consolidated statement of comprehensive income and in equity in the consolidated statement of financial position separately from the Company’s own equity.
Acquisitions of non-controlling interest are recognized as equity transactions (transactions with owners in their capacity as owners). The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid are recognized directly in equity and attributed to the owners of the parent (Note 1a).
The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and notes. Actual results could differ from those estimates.
c)  Basis of consolidation
The accompanying consolidated financial statements comprise the financial statements of the Company and its subsidiaries. At December 31, 2012 and 2011, the majority owned subsidiaries of the Company are as follows:

Name	  	2012	 	 	2011	 	
Concesionaria	  	 	97.95	% 	 	 	89.43	% 	
Comercializadora Volaris, S.A. de C.V. (“Comercializadora”)	  	 	98.00	% 	 	 	98.00	% 	
Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”)	  	 	98.00	% 	 	 	98.00	% 	
Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”)	  	 	98.00	% 	 	 	98.00	% 	
Deutsche Bank México, S.A., Trust 1462	  	 	100.00	% 	 	 	100.00	% 	
Deutsche Bank México, S.A., Trust 1484	  	 	100.00	% 	 	 	100.00	% 	
Deutsche Bank México, S.A., Trust 1498	  	 	100.00	% 	 	 	100.00	% 	
Fideicomiso irrevocable de administración number F/307750	  	 	100.00	% 	 	 	100.00	% 	
The Company, through its subsidiary Comercializadora, provides airport shuttle service to different destinations in Mexico and the United States.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies. All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance.
 
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In conformity with Standing Interpretation Committee (“SIC”) 12 , the financial statements of the trusts to which the Company assigned its rights and obligations during 2012 and 2011, are consolidated into the Company’s financial statements, as the trusts are considered special purpose entities.
d)  Revenue recognition
Revenues from the air transportation of passengers and commissions from ground transportation services are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel.
Ticket sales for future flights are initially recognized as liabilities under the caption unearned transportation revenue and, once the transportation service is provided by the Company, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All of the Company’s tickets are non-refundable, subject to change upon a payment of a fee. Additionally the Company does not operate a frequent flier program.
Non-ticket revenue includes: cargo services, charter flight services, fees charged to passengers for excess baggage, travel assistance, advance seat selection, carriage of sports equipment check-in, commission from sales of insurance by third parties and other services. All such revenues are collected from passengers and recognized as non-ticket revenue when the service has been provided, which is typically the flight date.
The Company is also required to collect certain taxes and fees from customers on behalf of government agencies and airports and remit these back to the applicable governmental entity or airport on a periodic basis. These taxes and fees include value added tax, federal transportation taxes, federal security charges, airport passenger facility charges, and foreign arrival and departure taxes. These items are collected from customers at the time they purchase their tickets, but are not included in passenger revenue. The Company records a liability upon collection from the customer and discharge the liability when payments are remitted to the applicable governmental entity or airport.
e)  Cash and cash equivalents
Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date.
For the purpose of the consolidated statement of cash flows, cash and cash equivalent consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts. As of December 31, 2012 and 2011, the Company did not have any outstanding bank overdrafts.
f)  Financial assets and liabilities
Financial instruments – initial recognition and subsequent measurement
i) Financial assets
Initial recognition and measurement
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognized initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss.
 
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Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.
Loans and receivables
Loans and receivables and other accounts receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective Interest Rate (“EIR”) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the income statement. The losses arising from impairment are recognized in the income statement in finance costs for loans and in cost of sales or other operating expenses for receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:
 
 	a)	The rights to receive cash flows from the asset have expired;	
 
 	b)	The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or	
 
 	c)	When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.	
ii) Impairment of financial assets
The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
 
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Financial assets carried at amortized cost
For financial assets carried at amortized cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR.
For the years ended December 31, 2012, 2011 and 2010, the Company did not record any losses for impairment in financial assets.
iii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.
The Company’s financial liabilities include accounts payable to suppliers, unearned transportation revenue, other accounts payable, loans and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by IAS 39.
Gains or losses on liabilities held for trading are recognized in the income statement. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IAS 39 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the income statement.
 
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Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated income statement.
g)  Other accounts receivables and allowance for doubtful receivables
Other accounts receivables are due primarily from major credit card processors associated with the sales of tickets, stated at cost less allowances made for doubtful accounts, which approximates fair value given their short-term nature.
An allowance for doubtful receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivable through risk analysis and taking into account the historical analysis of the recovery of arrears.
h)  Inventories
Inventories consist primarily of flight equipment expendable parts, materials and supplies, and are recorded at acquisition cost. Inventories are carried at the lower of cost and their net realization value, which do not exceed respective replacement value. The cost is determined on the basis of the weighted average cost method and expensed when used in operations.
i)  Intangibles assets
Cost related to the purchase or development of computer software that is separable from an item of related hardware is capitalized separately and amortized over the period in which it will generate benefits not exceeding five years on a straight-line basis. The Company annually reviews the estimated useful lives and salvage values of intangible assets and any changes are accounted for prospectively.
We record impairment charges on intangible assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value in use.
The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.
For the years ended December 31, 2012, 2011 and 2010, the Company did not record any losses from impairment in the value of intangible assets.
j)  Guarantee deposits
Guarantee deposits consist primarily of aircraft maintenance deposits paid to lessors, deposits for rent of flight equipment and other guarantee deposits. Aircraft and engine deposits are in U.S. dollars held by lessors and are presented as current assets and non-current assets, based on the recovery dates of each deposit established in the related agreements (Note 13).
Aircraft maintenance deposits paid to lessors
The Company’s lease agreements provide that the Company pays maintenance deposits to aircraft lessors to be held as collateral in advance of the Company’s performance of major maintenance activities.
 
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These lease agreements provide that maintenance deposits are reimbursable to the Company upon completion of the maintenance event in an amount equal to the lesser of (i) the amount of the maintenance deposits held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event.
Substantially all of these maintenance deposits are calculated based on a utilization measure of the leased aircrafts and engines, such as flight hours or cycles, and are used solely to collateralize the lessor for maintenance time run off the aircraft and engines until the completion of the maintenance of the aircraft and engine.
Maintenance deposits expected to be recovered from lessors are reflected as guarantee deposits in the accompanying consolidated statement of financial position. The portion of prepaid maintenance deposits that is deemed unlikely to be recovered primarily relating to the rate differential between the maintenance deposits payments and the expected cost for the next related maintenance event that the deposits serve to collateralize, and is recognized as supplemental rent. Thus, any excess of the required deposit over the expected cost of the major maintenance event is recognized as supplemental rent starting from the period the determination is made.
For the years ended December 31, 2012, 2011 and 2010, the Company expensed as supplemental rent Ps.27,216, Ps.36,750 and Ps.38,668, respectively.
Any usage-based maintenance deposits paid, related with the last major maintenance event that are nonrefundable to the Company and are not substantively related to the maintenance of the leased asset are accounted for as contingent rent in the consolidated statements of operations. The Company records lease payment as contingent rent when it becomes probable and reasonably estimable that the maintenance deposits payments will not be refunded.
For the years ended December 31, 2012, 2011 and 2010, the Company expensed as contingent rent Ps.99,390, Ps.94,645 and Ps.59,945, respectively.
The Company makes certain assumptions at the inception of the lease and at each consolidated statement of financial position date to determine the recoverability of maintenance deposits. These assumptions are based on various factors such as the estimated time between the maintenance events, the date the aircraft is due to be returned to the lessor, and the number of flight hours the aircraft and engines is estimated to be utilized before it is returned to the lessor.
In the event that lease extensions are negotiated, any extension benefit is recognized as a liability. The aggregate benefit of extension is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
During the year ended December 31, 2011, the Company extended the lease terms of six aircraft lease agreements, which made available to the Company maintenance deposits that were recognized in prior periods in the consolidated statement of operations as supplemental rent of Ps.163,024. The maintenance event for which the maintenance deposits were previously expensed was scheduled to occur after the original lease term and as such the supplemental rental payments were expensed as they were not substantially and contractually related to maintenance. However when the leases were amended the maintenance deposits amounts became probable of recovery due to the longer lease term and as such they are being recognized as an asset. This lease extension was recognized as a guarantee deposit and a deferred liability in the consolidated statement of financial position at the time of lease extension (Note 15).
Because the lease extension is being considered as a lease incentive, the deferred liability is included in the caption other liabilities and is being amortized on a straight-line basis prospectively over the next six years (the remaining revised lease term at December 31, 2012). For the years ended December 31, 2012 and 2011, the Company amortized Ps.23,254 and Ps.10,428, respectively, of this amount which was recognized as a reduction of rent expenses in the consolidated statement of operations.
 
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k)  Aircraft and engine maintenance
The Company is required to conduct diverse levels of aircraft maintenance. Maintenance requirements depend on the type of aircraft, age and the route network over which it operates.
Fleet maintenance requirements may involve short cycle engineering checks, for example, component checks, monthly checks, annual airframe checks and periodic major maintenance and engine checks.
Aircraft maintenance and repair consists of routine and non-routine works, divided into three general categories: (i) routine maintenance, (ii) major maintenance and (iii) component service.
(i) Routine maintenance requirements consists in scheduled maintenance checks on the Company’s aircraft, including pre-flight, daily, weekly and overnight checks, any diagnostics and routine repairs and any unscheduled tasks performed as required. This type of line maintenance events are currently serviced by the Company mechanics and are primarily completed at the main airports that the Company currently serves. All other maintenance activities are sub-contracted to qualified maintenance business partner, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can take from seven to 14 days to accomplish and typically are required approximately every 22 months. All routine maintenance costs are expensed as incurred.
(ii) Major maintenance consist of a series of more complex tasks that can take from one to eight weeks to accomplish and typically are required approximately every five to six years.
Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance and major overhaul and repair is capitalized (improvements to leased assets) and amortized over the shorter period of the next major maintenance event or the remaining contractual lease term. The next major maintenance event is estimated based on assumptions including estimated usage. The United States Federal Aviation Administration (“FAA”) in the United States and the Mexican Civil Aeronautic Authority (Dirección General de Aeronáutica Civil or “DGAC”) in Mexico mandated maintenance intervals and average removal times as suggested by the manufacturer.
These assumptions may change based on changes in the utilization of aircraft, changes in government regulations and suggested manufacturer maintenance intervals. In addition, these assumptions can be affected by unplanned incidents that could damage an airframe, engine, or major component to a level that would require a heavy maintenance event prior to a scheduled maintenance event. To the extent the planned usage increases, the estimated life would decrease before the next maintenance event, resulting in additional expense over a shorter period.
During the years ended December 31, 2012 and 2011, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of Ps.129,876 and Ps.162,587, respectively.
For the years ended December 31, 2012, 2011 and 2010, the amortization of deferred major maintenance costs was Ps.126,303, Ps.37,530 and Ps.1,551, respectively.
(iii) The Company has an engine flight hour agreement that guarantees a cost per overhaul, provides miscellaneous engine coverage, caps the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants an annual credit for scrapped components. The cost associated with the miscellaneous engine coverage is recorded as incurred in the consolidated statement of operations.
The Company has a power-by-hour agreement for component services, which guarantees the availability of aircraft parts for the Company’s fleet when they are required. It also provides aircraft parts that are included in the redelivery conditions of the contract (hard time) without constituting an additional cost at the time of redelivery. The monthly maintenance cost associated to this agreement is recorded to the consolidated statement of operations.
 
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l)  Rotable spare parts, furniture and equipment, net
Rotable spare parts, furniture and equipment, are recorded at cost and are depreciated to estimated residual values over their estimated useful lives using the straight-line method.
Pre-delivery payments refer to prepayments made to aircraft and engine manufacturers incurred during the manufacture of the aircraft.
The borrowing costs related to the acquisition or construction of qualifying asset is capitalized as part of the cost of that asset.
During the years ended December 31, 2012, 2011 and 2010 the Company capitalized borrowing costs which amounted to Ps.64,452, Ps.28,102 and Ps.10,033, respectively. The rate used to determine the amount of borrowing cost was 6.12%.
Depreciation rates are as follows:

 	  	Annual depreciation rate	 	
 	  	The shorter of: (i) lease term, or (ii) the
next major maintenance event	 	
Leasehold improvements to flight equipment	  				
Computer equipment	  	 	25	% 	
Mobile lounges	  	 	25	% 	
Communications equipment	  	 	10	% 	
Miscellaneous equipment	  	 	10	% 	
Electric power equipment	  	 	10	% 	
Workshop machinery and tools	  	 	10	% 	
Office furniture and equipment	  	 	10	% 	
Aircraft parts and rotable spare parts	  	 	8.3	% 	
The Company reviews annually the useful lives and salvage values of these assets and any changes are accounted for prospectively.
The Company records impairment charges on rotable spare parts, furniture and equipment used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value in use.
The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.
For the years ended December 31, 2012, 2011 and 2010, there were no indicators of impairment and therefore no impairment charges were recorded in respect of the Company’s rotable spare parts, furniture and equipment.
m)  Foreign currency transactions and exchange differences
The Mexican peso is the functional currency of the Company and its subsidiaries.
Transactions in foreign currencies are translated into the Company’s functional currency at the exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are subsequently translated at the exchange rate at the consolidated statement of financial position date. Any differences resulting from the currency translation are recognized in the consolidated statement of operations.
 
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Non-monetary items that are measured in terms of historical cost in a foreign currency are not subject to remeasurement after the dates of the initial transactions.
n)  Liabilities and provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
For certain operating leases, the Company is contractually obligated to return the leased aircraft and engines in a specific return condition. The Company accrues for restitution costs related to aircrafts held under operating leases throughout the term of the lease, based upon the estimated cost of satisfying the return condition criteria for each aircraft.
The Company records aircraft lease return liabilities that are calculated based on the best estimate of the return obligation costs under each aircraft lease agreement. These return obligations are related to the possible costs incurred in the reconfiguration of aircraft (interior and exterior), painting, carpeting and other costs, which are estimated based on current cost adjusted for the inflation.
o)  Employee benefits
i) Personnel vacations
The Company recognizes a reserve for the costs of paid absences, such as vacation time, based on the accrual method.
ii) Seniority premiums
Seniority premiums other than those arising from restructurings, are recognized based upon actuarial calculations, the cost of benefits are determined using the projected unit credit method.
The latest actuarial computation was prepared as of December 31, 2012.
Actuarial gains and losses are recognized in full in the period in which they occur in other comprehensive income. Such actuarial gains and losses are not reclassified to profit or loss in subsequent periods.
Past service costs are recognized immediately following the introduction of, or changes to, a pension plan.
The defined benefit asset or liability comprises the present value of the defined benefit obligation using a discount rate based on government bonds ( Certificados de la Tesorería de la Federación “CETES” in Mexico), less the fair value of plan assets out of which the obligations are to be settled.
iii) Incentives
The Company has a quarterly incentive plan for certain personnel whereby cash bonuses are awarded for compliance with performance targets. These incentives are accounted for as a short-term benefit under IAS 19R. A provision is recognized based on the estimated amount of the incentive payment.
 
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iv) Long-term retention plan
During 2011, the Company implemented an employee long-term retention plan, the purpose of this plan is to retain high performing employees within the organization by paying incentives depending on the Company´s performance. Incentives under this plan are payable in three equal annual installments and the cost is determined using the projected unit credit method.
During the years ended December 31 2012 and 2011 the Company expensed of Ps.6,453 and Ps.7,407, respectively as bonuses as part of the caption salaries and benefits.
v) Management incentive plan
Certain key employees of the Company receive additional benefits through a share purchase agreement, which has been classified as an equity-settled share-based payment. The equity-settled compensation cost is recognized in consolidated statement of operations under the caption of salaries and benefits, over the vesting period (Note 17).
vi) Employee profit sharing
Employee profit sharing is computed at the rate of 10% of the individual company taxable income, except for depreciation of historical rather restated values, foreign exchange gains and losses, which are not included until the asset is disposed of or the liability is due and other effects of inflation are also excluded. The cost of employee profit sharing earned for the current-year is presented as an expense in the consolidated statement of operations (Note 15).
p)  Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
Property and equipment lease agreements are recognized as finance leases if the risks and benefits incidental to ownership of the leased assets have been transferred to the Company when (i) the ownership of the leased asset is transferred to the Company upon termination of the lease; (ii) the agreement includes an option to purchase the asset at a reduced price; (iii) the term of the lease is for the major part of the economic life of the leased asset; (iv) the present value of minimum lease payments is basically the same as the fair value of the leased asset, net of any future benefit or scrap value; or (v) the leased asset is of a specialized nature for the Company.
When the risks and benefits incidental to the ownership of the leased asset remain mostly with the lessor, they are classified as operating leases and rental payments are charged to results of operations on a straight-line over the term of the lease.
Lease contracts for aircraft, engines and components parts are classified as operating leases.
Sale and leaseback
The Company enters into sale and leaseback agreements whereby an aircraft or engine is sold to a lessor upon delivery and the lessor agrees to lease such aircraft or engine back to the Company. Leases under sale and leaseback agreements meet the conditions for treatment as operating leases.
Profit or loss related to a sale transaction followed by an operating lease, is accounted for as follows:
 
(i)	Profit or loss is recognized immediately when it is clear that the transaction is established at fair value.	
 
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(ii) If the sale price is below fair value, any profit or loss is recognized immediately. However, if the loss is compensated for by future lease payments at below market price, such loss is recognized as an asset in the consolidated statements of financial position, and loss recognition is deferred and amortized to the consolidated statements of operations in proportion to the lease payments over the contractual lease term.
(iii) If the sale price is above fair value, the excess of the price above the fair value is deferred and amortized to the consolidated statements of operations over the asset’s expected lease term, including probable renewals, with the amortization recorded as a reduction of rent expense.
q)  Income taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the income statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences.
Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
r)  Derivative financial instruments and hedge accounting
The Company mitigates certain financial risks, such as volatility in the price of fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes the use of derivative financial instruments.
In accordance with IAS 39, derivative financial instruments are recognized on the consolidated statement of financial position at fair value. The effective portion of a cash flow hedge’s gain or loss is recognized in accumulated other comprehensive income (loss) in equity, while the ineffective portion is recognized in current year earnings.
The realized gain or loss on valuation of derivative financial instruments that qualify for hedge accounting is recorded in the same consolidated statement of operations caption as the realized gain or loss as on the hedged item.
Derivative financial instruments that are not designated as a hedge or are not effective hedges, are recognized at fair value with changes in fair value recorded in current year earnings.
 
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Outstanding derivative financial instruments may require collateral to guarantee a portion of the unsettled loss prior to maturity. The amount of collateral delivered in pledge, is presented as part of non-current assets under the caption guarantee deposits, and the amount of the collateral is reviewed and adjusted on a daily basis based on the fair value of the derivative position (Note 13).
s)  Financial instruments – Disclosures
IFRS 7 requires a three-level hierarchy for fair value measurement disclosures and requires entities to provide additional disclosures about the relative reliability of fair value measurements (Notes 4 and 5).
t)  Operating segments
The Company is managed as a single business unit that provides air transportation and related services. The Company has two geographic areas identified as domestic (Mexico) and international (United States of America), all assets and liabilities are located in Mexico (Note 22).
u) Error correction—Equity transaction costs
The Company incurred transaction costs of Ps. 25,105 in 2011, related to an equity transaction that was suspended. The transaction costs were erroneously deferred pending a future decision to proceed with the transaction but should have been expensed when it became clear that such equity transaction would not be resumed within a short period of time.
The Company decided to restate its financial statements as of December 31, 2012 and 2011 and for the year ended December 31, 2011, in order to reflect the expense incurred through fiscal year 2011 in such year.
The effects of the restatement in the consolidated financial statements for the years ended December 31, 2012 and 2011 are summarized as follows:
Consolidated Statements of Financial Position at December 31, 2012 and 2011

 	  	2012
As  originally
issued	 	 	2012
Restated	 	
Prepaid expenses and other current assets	  	Ps.	292,979	  	 	Ps.	267,874	  	
Current assets	  	 	1,840,123	  	 	 	1,815,018	  	
Total assets	  	 	5,726,663	  	 	 	5,701,558	  	
			
Accumulated losses	  	 	(905,879	) 	 	 	(929,645	) 	
Additional paid-in capital	  	 	(189,772	) 	 	 	(190,850	) 	
Total equity attributable to equity holders of the parent	  	 	1,077,065	  	 	 	1,052,221	  	
Non-controlling interest	  	 	22,707	  	 	 	22,446	  	
Total equity	  	Ps.	1,099,772	  	 	Ps.	1,074,667	  	
			
 	  	2011
As  originally
issued	 	 	2011
Restated	 	
Prepaid expenses and other current assets	  	Ps.	225,055	  	 	Ps.	199,950	  	
Current assets	  	 	1,155,652	  	 	 	1,130,547	  	
Total assets	  	 	5,086,786	  	 	 	5,061,681	  	
			
Accumulated losses	  	 	(1,121,118	) 	 	 	(1,144,884	) 	
Total equity attributable to equity holders of the parent	  	 	774,326	  	 	 	750,560	  	
Non-controlling interest	  	 	110,518	  	 	 	109,179	  	
Total equity	  	Ps.	884,844	  	 	Ps.	859,739	  	
 
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Consolidated Statements of Operations for the year ended December 31, 2011

 	  	2011
As  originally
issued	 	 	2011
Restated	 	
Other operating expenses	  	Ps.	333,941	  	 	Ps.	359,046	  	
Loss before income tax	  	 	(289,909	) 	 	 	(315,014	) 	
Net loss	  	 	(290,385	) 	 	 	(315,490	) 	
Losses per share basic and diluted	  	Ps.	(0.000371	) 	 	Ps.	(0.000403	) 	
Consolidated Statements of Changes in Equity Operations for the years ended December 31, 2012 and 2011

 	  	As originally
issued	 	 	Restated	 	
Balance at December 31, 2010	  	Ps.	1,226,007	  	 	Ps.	1,226,007	  	
Net loss for the period	  	 	(290,385	) 	 	 	(315,490	) 	
Balance at December 31, 2011	  	 	884,844	  	 	 	859,739	  	
Net income for the period	  	 	203,317	  	 	 	203,317	  	
Balance at December 31, 2012	  	Ps.	1,099,772	  	 	Ps.	1,074,667	  	
Statement of Cash Flows at December 31, 2011

 	  	2011
As originally
issued	 	 	2011
Restated	 	
Operating activities	  				 				
Loss before income tax	  	 	Ps.(289,909)	  	 	 	Ps.(315,014)	  	
			
Cash flows from operating activities before changes in working capital and provisions	  	 	(621	) 	 	 	(25,726	) 	
v)  Impact of new International Financial Reporting Standards
The accounting policies applied are consistent with those of the previous financial year.
New standards issued but not yet effective up to the date of issuance of the Company’s consolidated financial statements are listed below. This listing is of standards and interpretations issued, which the Company seasonably expects to be applicable at a future date. The Company intends to adopt those standards when they become effective.
IAS 1 Financial Statement Presentation: Presentation of Items of OCI
The amendments to IAS 1 change the grouping of items presented in OCI. Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified.
The amendment affects presentation only and has no impact on the Company’s financial position or performance. The amendment becomes effective for annual periods beginning on or after July 1, 2012.
IFRS 7 Financial Instruments: Disclosures Enhanced Derecognition Disclosure Requirements 
The amendment requires additional disclosure about financial assets that have been transferred but not derecognized to enable the user of the Company’s financial statements to understand the relationship with those assets that have not been derecognized and their associated liabilities. In addition, the amendment requires disclosures about continuing involvement in derecognized assets to enable the user to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognized assets. The amendment becomes effective for annual periods beginning on or after July 1, 2012.
 
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This standard has not been early adopted by the Company. The Company has yet to complete its evaluation, of whether this standard will have a material impact on its consolidated financial statements.
IFRS 9 Financial Instruments: Classification and Measurement 
IFRS 9 as issued reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after January 1, 2013, but Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to January 1, 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Company´s financial assets, but will potentially have no impact on classification and measurements of financial liabilities. The Company will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.
This standard has not been early adopted by the Company. The Company has yet to complete its evaluation, of whether this standard will have a material impact on its consolidated financial statements.
IFRS 10 Consolidated Financial Statements 
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC-12 Consolidation Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities including special purpose entities.
The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and, therefore, are required to be consolidated by a parent, compared with the requirements that were in IAS 27. This standard becomes effective for annual periods beginning on or after January 1, 2013.
This standard has not been early adopted by the Company. The Company has yet to complete its evaluation, of whether this standard will have a material impact on its consolidated financial statements.
IFRS 12 Disclosure of Involvement with Other Entities 
IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities.
A number of new disclosures are also required. This standard becomes effective for annual periods beginning on or after January 1, 2013.
This standard has not been early adopted by the Company. The Company has yet to complete its evaluation, of whether this standard will have a material impact on its consolidated financial statements.
IFRS 13 Fair Value Measurement 
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted.
This standard has not been early adopted by the Company. The Company has yet to complete its evaluation, of whether this standard will have a material impact on its consolidated financial statements.
 
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Annual Improvements May 2012
These improvements will not have an impact on the Company, but include:
IAS 1 Presentation of Financial Statements
This improvement clarifies the difference between voluntary additional comparative information and the minimum required comparative information. Generally, the minimum required comparative information is the previous period.
IAS 16 Property Plant and Equipment
This improvement clarifies that major spare parts and servicing equipment that meet the definition of property; plant and equipment are not inventory.
IAS 32 Financial Instruments, Presentation
This improvement clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes.
These improvements are effective for annual periods beginning on or after January 1, 2013. The Company has yet to complete its evaluation, of whether the annual improvements will have material impact on its consolidated financial statements.
w)  Convenience translation
U.S. dollar amounts at December 31, 2012 shown in the financial statements have been included solely for the convenience of the reader and are translated from Mexican pesos at March 31, 2013, divided by an exchange rate of Ps.12.3546 per U.S. dollar, as reported by the Mexican Central Bank (Banco de México) as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such translation should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollars at this or any other rate. The referred information in U.S. dollars is solely for information purposes and does not represent the amounts are in accordance with IFRS or the equivalent in U.S. dollars in which the transactions were conducted or in which the amounts presented in Mexican pesos can be translated or realized.
2.  Significant accounting judgments, estimates and assumptions
The preparation of these financial statements requires management to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Company’s consolidated financial statements. Note 1 to the Company’s consolidated financial statements provides a detailed discussion of the significant accounting policies.
Certain of the Company’s accounting policies reflect significant judgments or estimates about matters that are both inherently uncertain and material to the Company financial position or results of operations.
Actual results could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
 
i)  Aircraft	maintenance deposits paid to lessors	
The Company makes certain assumptions at the inception of a lease and at each reporting date to determine the recoverability of maintenance deposits. The key assumptions include the estimated time between the
 
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maintenance events, the date the aircraft is due to be returned to the lessor and the number of flight hours the aircraft is estimated to be flown before it is returned to the lessor (Note 13).
 
ii)  Management	incentive plan	
The Company measures the cost of its equity-settled transactions at fair value at the date the equity benefits are conditionally granted to employees.
The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. For grants that vest on meeting performance conditions, compensation cost is recognized when it becomes probable that the performance condition will be met. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest.
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 17.
 
iii)  Deferred	taxes	
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management’s judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning opportunities to advance taxable profit before expiration of unused tax losses.
At December 31, 2012, the Company has tax loss carry-forwards amounting to Ps.2,014,874 (Ps.2,200,030 at December 31, 2011). These losses relate to operations of the Company and of its subsidiaries on a stand-alone basis, which in conformity with current Mexican Income Tax Law may be carried forward against taxable income generated in the succeeding ten years and may not be used to offset taxable income elsewhere in the Company’s consolidated group (Note 19).
During the years ended December 31, 2012, 2011 and 2010, the Company used Ps.256,589, Ps.770 and Ps.156,864, respectively, of the unused tax loss carry-forwards (Note 19).
 
iv)  Fair	value of financial instruments	
Where the fair value of financial assets and financial liabilities recorded in the consolidated statements of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments (Note 3).
 
v)  Impairment	of long-lived assets	
The Company assesses whether there are any indicators of impairment for long-lived assets annually and at other times when such indicators exist. Impairment exists when the carrying amount of a long-lived asset or cash
 
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generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value-in-use. The value-in-use calculation is based on a discounted cash flow model, using the Company’s projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.
 
vi)  Allowance	for doubtful accounts	
An allowance for doubtful accounts receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables.
3.  Financial instruments
Concentration of risk
The Company’s activities are exposed to different financial risks: (i) market risk, (ii) credit risk, and (iii) liquidity risk. The Company’s global risk management program is focused on uncertainty in the financial markets and tries to minimize the potential adverse effects on the net earnings. The Company uses derivatives to hedge part of these risks. The Company does not engage in derivatives for speculative purposes.
Market risk
a)  Fuel price risk
The Company is exposed to fuel price risk and the management of fuel price risk strategy aims to provide the Company with protection against sudden and significant increases in fuel prices. Pursuing this objective, the risk management program allows the use of derivative financial instruments available on the over the counter markets with approved counterparties and within approved limits.
Aircraft fuel consumed in the years ended December 31, 2012, 2011 and 2010 represented 42%, 41% and 34%, of the Company´s operating expenses, respectively. To manage this risk, the Company periodically enters into derivatives financial instruments.
During the years ended December 31, 2012, 2011 and 2010, the Company entered into fuel swap contracts that are being accounted for as cash flow hedges that gave rise to a gain of Ps.19,984, Ps.9,260, and Ps.1094, respectively. These instruments qualify for hedge accounting and accordingly, the effects of the hedge are presented as part of fuel cost in the consolidated statements of operations.
As of December 31, 2012 and 2011, the fair value of these financial instruments was Ps.2,360 and Ps.933, respectively and is presented as part of current assets.
The following table includes the notional amounts and strike prices of the derivative financial instruments outstanding as of the end of the year:

Position as of December 31, 2012	 	Maturities	
Fuel risk	 	1Q13	 	2Q13	 	Total	
Notional volume in gallons (thousands)*	 	4,134	 	412	 	4,546	
Future agreed rate per gallon (U.S. dollars)**	 	US$2.9678	 	US$2.9595	 	US$2.9671	
Total in thousands of Mexican pesos ***	 	    Ps.159,619    	 	    Ps.15,863    	 	    Ps.175,482    	
Approximate percentage of hedge (of expected consumption value)	 	14.0%	 	1.3%	 	7.5%	
 
*	US Gulf Coast Jet 54 as underlying asset	
**	Weighted average	
***	Exchange rate at December 31, 2012 was Ps.13.0101	
 
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The following table illustrates the sensitivity of financial instruments to a reasonably possible change in fuel prices, with all other variables held constant, on the caption of accumulated other comprehensive income. The calculations were made considering a parallel movement of 5% in the forward curve of the US Gulf Coast Jet 54 as of December 31, 2012:

 	  	Sensitivity of position
as of December 31, 2012
effect on equity
(thousands of U.S.$)	 	
US Gulf Coast Jet Fuel 54 forward level	  				
+5%	  	 	684	  	
-5%	  	 	-684	  	
b)  Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities, when revenue or expense is denominated in a different currency from the Company’s functional currency (including the amounts payable arising from U.S. dollar denominated expenses and U.S. dollars linked expenses and payments). To mitigate this risk, the Company may use foreign exchange derivative financial instruments.
Most of the Company’s revenue is generated in Mexican pesos, although 26% of its revenues came from operations in the United States of America for the year ended at December 31, 2012 (24% at December 31, 2011) and U.S. dollar denominated collections accounted for 34% and 33% of the Company’s total collections in 2012 and 2011, respectively. However, its liabilities, particularly those related to aircraft leasing and acquisition, are U.S. dollar denominated. The Company’s foreign exchange exposure at December 31, 2012 and 2011 is as set forth below:

 	  	Thousands of U.S. dollars	 	
 	  	2012	 	  	2011	 	
Assets:	  				  				
Aircraft maintenance deposits paid to lessors	  	US$	158,568	  	  	US$	122,597	  	
Pre-delivery payments*	  	 	69,940	  	  	 	89,061	  	
Cash and cash equivalents	  	 	46,965	  	  	 	21,459	  	
Deposits for rental of flight equipment	  	 	22,573	  	  	 	25,910	  	
Collateral of derivative financial instruments	  	 	6,272	  	  	 	6,160	  	
	  	 	 	 	  	 	 	 	
Total assets	  	 	304,318	  	  	 	265,187	  	
			
Liabilities:	  				  				
Financial debt	  	 	68,667	  	  	 	82,102	  	
Foreign suppliers	  	 	27,425	  	  	 	13,341	  	
	  	 	 	 	  	 	 	 	
Total liabilities	  	 	96,092	  	  	 	95,443	  	
	  	 	 	 	  	 	 	 	
Net foreign currency position	  	US$	208,226	  	  	US$	169,744	  	

*	These assets are included as part of rotable, spare parts, furniture and equipment, and therefore are not revalued.	

 	 	Thousands of U.S. dollars	 	
 	 	2012	 	 	2011	 	
Off-balance sheet transactions exposure:	 				 				
Aircraft operating leases (Note 14)	 	US$	817,622	  	 	US$	672,740	  	
Aircraft and engine commitments (Note 21)	 	 	521,959	  	 	 	571,016	  	
	 	 	 	 	 	 	 	 	
Total foreign currency	 	US$	1,339,581	  	 	US$	1,243,756	  	

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During the year ended on December 31, 2012, the Company did not enter into exchange rate derivatives financial instruments, however for the years ended December 31, 2011, and 2010 the Company did.
During the year ended on December 31, 2011, these exchange rate derivatives resulted in a loss of Ps.1,069. All of the Company’s positions matured in January 2011, and therefore there is no balance outstanding as of December 31, 2011. For the year ended December 31, 2010 the exchange rate hedges resulted in a loss of Ps.390 that was recorded as part of finance cost.
c)  Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations and flight equipment operating lease agreements with floating interest rates.
The Company’s results are affected by fluctuations in market interest rates due to the impact that such changes may have on lease payments indexed to London Inter Bank Offered Rate (“LIBOR”). The Company uses derivative financial instruments to reduce its exposure to fluctuations in market interest rates and accounts for these instruments as an accounting hedge. In general, when a derivative can be defined within the terms and cash flows of a leasing agreement, this may be designed as a “cash flow hedge” and the effective portion of fair value variations are recorded in equity until the date the cash flow of the hedged lease payment becomes due.
At December 31, 2012 and 2011, the Company had outstanding hedging contracts in the form of interest rate swaps whose notional amount is US$70,000 and their fair value were Ps.147,713 and Ps.162,750, respectively, recorded in liabilities. For the years ended December 31, 2012, 2011 and 2010, the reported loss on the instruments was Ps.36,574, Ps.35,908 and Ps.36,377, respectively, which was recognized as part of rental expense in the consolidated statement of operations.
The following table illustrates the sensitivity of financial instruments on the Company’s accumulated other comprehensive income (due to changes in the fair value of forward contracts) to a reasonably possible change in LIBOR interest rates. The calculations are based on financial instruments held at each consolidated statement of financial position date and were made increasing (decreasing) 100 basis points to the LIBOR curve. All other variables were held constant.

 	  	Position at December,
31, 2012
effect on equity
(millions of U.S.$)	 	
Increase (decrease) in curve	  				
+100 basis points	  	 	2.85	  	
-100 basis points	  	 	-3.09	  	
Liquidity risk
Liquidity risk represents the risk that the Company has insufficient funds to meet its obligations.
Because of the cyclical nature of the business, the operations, and its investment and financing needs related to the acquisition of new aircraft and renewal of its fleet, the Company requires liquid funds to meet its payment obligations.
The Company attempts to manage its cash and cash equivalents and its financial assets, matching the term of investments with those of its obligations. Its policy is that the average term of its investments may not exceed the average term of its obligations. This cash and cash equivalents position is invested in highly-liquid short-term instruments through financial entities.
 
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The Company has future obligations related to maturities of bank borrowings and derivative contracts. The Company’s off-balance sheet exposure represents the future obligations related to operating lease contracts and aircraft purchase contracts.
The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value:

 	  	December 31, 2012	 	
 	  	Within one
year	 	 	One to five
years	 	  	Total	 	
Interest-bearing borrowings:	  				 				  				
Pre-delivery payments facilities	  	Ps.	 517,320	  	 	Ps.	 242,053	  	  	Ps.	 759,373	  	
Working capital	  	 	—  	  	 	 	390,487	  	  	 	390,487	  	
				
Derivative financial instruments:	  				 				  				
Fuel swaps	  	 	(2,360	) 	 	 	—  	  	  	 	(2,360	) 	
Interest rate swaps	  	 	37,011	  	 	 	110,702	  	  	 	147,713	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	Ps.	551,971	  	 	Ps.	743,242	  	  	Ps.	 1,295,213	  	

																	
 	  	December 31, 2011	 	
 	  	Within one
year	 	 	One to five
years	 	  	In five years
or more	 	  	Total	 	
Interest-bearing borrowings:	  				 				  				  				
Pre-delivery payments facilities	  	Ps.	 642,881	  	 	Ps.	 353,246	  	  	Ps.	—  	  	  	Ps.	 996,127	  	
Working capital	  	 	27,957	  	 	 	372,216	  	  	 	—  	  	  	 	400,173	  	
Derivative financial instruments:	  				 				  				  				
Fuel swaps	  	 	(933	) 	 	 	—  	  	  	 	—  	  	  	 	(933	) 	
Interest rate swaps	  	 	28,713	  	 	 	125,031	  	  	 	9,006	  	  	 	162,750	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Total	  	Ps.	698,618	  	 	Ps.	850,493	  	  	Ps.	 9,006	  	  	Ps.	 1,558,117	  	
	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Credit risk
Credit risk is the risk that any counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Financial instruments that expose the Company to credit risk involve mainly cash equivalents and accounts receivable. Credit risk on cash equivalents relate to amounts invested with major financial institutions.
Credit risk on accounts receivable relates primarily to amounts receivable from the major international credit card companies.
The Company has a high receivable turnover; hence management believes credit risk is minimal due to the nature of its businesses, which have a large portion of their sales settled in cash.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
Some of the outstanding derivative financial instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. The amount of such credit exposure is generally the
 
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unrealized gain, if any, in such contracts. To manage credit risk, the Company selects counterparties based on credit assessments, limits overall exposure to any single counterparty and monitors the market position with each counterparty. The Company does not purchase or hold derivative financial instruments for trading purposes.
Capital management
Management believes that the resources available to the Company are sufficient for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the 2013 fiscal year.
The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios to support its business and maximize the shareholder’s value.
No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2012 and 2011.
The Company is not subject to any externally imposed capital requirement, other than the legal reserve.
4.  Fair value measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in an arm’s length transaction between knowledgeable willing parties. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy that requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
 
 	•	 	Level 1 – Quoted prices in active markets for identical assets or liabilities.	
 
 	•	 	Level 2 – Observable inputs other than quoted priced included in Level 1. The Company values assets and liabilities included in this level using dealer and broker quotations, bid prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.	
 
 	•	 	Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.	
For the Company, the only assets and liabilities recognized at fair value on a recurring basis are the derivative financial instruments.
The following table summarizes the fair value measurements at December 31, 2012:

 	  	Fair value measurement at December 31, 2012	 	
 	  	Level 1	 	  	Level 2	 	 	Level 3	 	  	Total	 	
Assets	  				  				 				  				
Financial instruments assets	  	 	Ps.—  	  	  	Ps.	2,360	  	 	 	Ps.—  	  	  	Ps.	2,360	  	
					
Liabilities	  				  				 				  				
Financial instruments liabilities	  	 	—  	  	  	 	147,713	  	 	 	—  	  	  	 	147,713	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Net	  	 	Ps.—  	  	  	Ps.	(145,353	) 	 	 	Ps.—  	  	  	Ps.	(145,353	) 	

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The following table summarizes the fair value measurements at December 31, 2011:

 	  	Fair value measurement at December 31, 2011	 	
   	  	Level 1	 	  	Level 2	 	 	Level 3	 	  	Total	 	
Assets	  				  				 				  				
Financial instruments assets	  	Ps.	—  	  	  	Ps.	933	  	 	Ps.	—  	  	  	Ps.	933	  	
					
Liabilities	  				  				 				  				
Financial instruments liabilities	  	 	—  	  	  	 	162,750	  	 	 	—  	  	  	 	162,750	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Net	  	Ps.	—  	  	  	Ps.	(161,817	) 	 	Ps.	—  	  	  	Ps.	(161,817	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
At December 31, 2012 and 2011, the fair value of total financial debt is Ps.1,220,559, and Ps.1,494,111, respectively.
5.  Financial assets and liabilities
At December 31, 2012 and 2011, the Company’s financial assets are represented by cash and cash equivalents, trade and other accounts receivable, accounts receivable with carrying amounts that approximate their fair value.
Financial debt
At December 31, 2012 and 2011, the Company’s short-term and long-term debt consists of the following:

 	 	 	  	2012	 	  	2011	 	
I.	 	Revolving line of credit with Jackson Square Aviation (“JSA”), in U.S. dollars, to finance the pre-delivery payments, maturing on July 10, 2012, bearing annual interest rate at the three-month LIBOR rate plus 5 percentage points.	  	Ps.	—  	  	  	Ps.	407,028	  	
II.	 	Revolving line of credit with Banco Santander (“México”), S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on December 1, 2014, bearing annual interest rate at the three-month LIBOR rate plus 2.65 percentage points.	  	 	759,373	  	  	 	353,246	  	
III.	 	Revolving line of credit with General Electric Capital Aviation Services (“GECAS”), in U.S. dollars, to finance pre-delivery payments, maturing on November 26, 2012, bearing annual interest at the one-month LIBOR rate plus 5 percentage points.	  	 	—  	  	  	 	235,853	  	
IV.	 	Loan agreement with Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa (“Inbursa”), in Mexican pesos, for working capital. Such loan matures on May 12, 2015 and 2016 (50% of the outstanding balance at each date, respectively) and bears interest at the Mexican interbank rate of equilibrium (TIIE), plus 10.0 percentage points, which increased by 2.5 percentage points from May 14, 2012.	  	 	257,081	  	  	 	257,081	  	
V.	 	Loan agreement with related party Pasprot, S.A. de C.V. (“Pasprot”), in Mexican pesos, for working capital. Such loan matures on May 12, 2015 and 2016 (50% of the outstanding balance at each date, respectively) and bears interest at TIIE, plus 10.0 percentage points, which increased by 2.5 percentage points from May 14, 2012.	  	 	3,305	  	  	 	3,305	  	
VI.	 	Loan agreement with International Finance Corporation (“IFC”), tranche C, in U.S. dollars, for working capital, maturing on June 15, 2014, bearing annual interest at the six-month LIBOR plus 6 percentage points.	  	 	130,101	  	  	 	139,787	  	
VII.	 	Accrued interest	  	 	10,063	  	  	 	16,094	  	
	 		  	 	 	 	  	 	 	 	
	 		  	 	1,159,923	  	  	 	1,412,394	  	
Less: Short-term maturities	  	 	527,383	  	  	 	686,932	  	
	 		  	 	 	 	  	 	 	 	
Long-term total	  	Ps.	632,540	  	  	Ps.	725,462	  	

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The following table provides a summary of the Company’s principal payments of short and long-term debt obligations and accrued interest at December 31, 2012:

 	  	2013	 	  	2014	 	 	2015	 	  	2016	 	  	Thereafter
Total	 	
Local currency:	  				  				 				  				  				
Inbursa loan	  	Ps.	6,090	  	  	Ps.	—  	  	 	Ps.	128,540	  	  	Ps.	128,540	  	  	Ps.	263,170	  	
Pasprot loan	  	 	78	  	  	 	—  	  	 	 	1,653	  	  	 	1,653	  	  	 	3,384	  	
						
Foreign currency:	  				  				 				  				  				
IFC tranche C	  	 	330	  	  	 	130,101	* 	 	 	—  	  	  	 	—  	  	  	 	130,431	  	
Santander/Bancomext	  	 	520,885	  	  	 	242,053	  	 	 	—  	  	  	 	—  	  	  	 	762,938	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Total	  	Ps.	527,383	  	  	Ps.	372,154	  	 	Ps.	130,193	  	  	Ps.	130,193	  	  	Ps.	1,159,923	  	

*	IFC tranche C is considered to be paid in a single installment on June 15, 2014 (Ps.130,101).	
During 2011, the Company entered into 100% pre-delivery payments financings with JSA, Santander and Bancomext for ten A320 aircrafts type to be delivered in 2012, 2013 and 2014, respectively. On the same date, the Company entered into a 67% pre-delivery payments financing with GECAS for four A320 aircraft type, which were delivered in 2012. A Mexican trust structure was created whereby (i) the Company assigned its rights and obligations, including its obligation to make pre-delivery payments, under its purchase agreement with Airbus to the Mexican trusts, (ii) the Company guaranteed the obligations of the Mexican trusts under the financing agreements, (iii) the Company transferred its purchase rights to JSA and GECAS prior to the delivery date of the aircraft pursuant to the terms of the purchase agreement with Aibus, and (iv) the Company entered into lease agreements with JSA and GECAS for these seven aircraft out of the fourteen previously mentioned (sale and leaseback transaction).
The Inbursa and Pasprot loan agreements have an option of early partial or total prepayment after two years of their start day (May 12, 2009) with a prepayment premium equivalent to the higher of: (i) the present value of the future interests payable, or (ii) 15% of the amount to be prepaid. Upon an initial public offering (“IPO”), the Company has the option to prepay the loans with a liquidation premium of 15%, 20% or 25% if the IPO is effective within the first three years, in the fourth year, or anytime thereafter, respectively. If the Company does not take the option to prepay, Inbursa and Pasprot then will have the option to convert the principal amount of the financial debt into shares with a discount of 15%, 20% or 25% if the IPO is effective within the first three years, in the fourth year, or anytime thereafter, respectively.
The Inbursa loan and Pasprot loan agreements limit the Company’s ability to finance purchases under the Company’s purchase agreement with Airbus up to 44 aircraft and related engines, and to incur working capital debt for up to US$25 million, unless certain financial ratios are met.
The IFC loan agreement, tranche C, limits the Company’s ability to finance aircraft operating leases up to 51 additional aircraft and related engines than the ones operated by the Company at December 31, 2012, and to incur working capital debt for up to US$50 million, unless certain financial ratios are met.
Some of these loan agreements provide for certain covenants, including limits to the ability to, among others:
i) Declare and pay dividends, or make any distribution on the Company’s share capital unless: (a) the proposed payment or distribution is out of net profits of the previous fiscal year (excluding any amount resulting from the revaluation of any of the Company’s assets); (b) no event of default or potential event of default has occurred and is continuing; and (c) after giving effect to any such action, the Company’s consolidated unrestricted cash less short-term debt is at certain level in respect of its consolidated revenues. The Company has not declared or paid cash dividends on its common stock in the past;
 
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ii) Create liens.
iii) Reduce the capital beyond a certain threshold.
iv) Enter into certain derivatives transactions and dispose of certain assets.
At December 31, 2012 and 2011, the Company was in compliance with the covenants under the above-mentioned loan agreements.
In addition, the loan agreements with Inbursa and Pasprot and the IFC loan, tranche C, provide for a debt basket to incur debt and limits the ability to incur debt above such debt basket unless the Company complies with certain financial ratios. At December 31, 2012, the Company was not required to comply with these ratios since the Company had not incurred debt above the provided debt basket.
At December 31, 2012, the Company had available credit lines totaling Ps.1,403,506, of which Ps.1,206,403 were related to financial debt and Ps.197,103 were related to letters of credit (Ps.59,274 were undisbursed).
6.  Cash and cash equivalents
An analysis of this caption is as follows:

 	  	2012	 	  	2011	 	
Cash on hand	  	Ps.	3,101	  	  	Ps.	3,593	  	
Cash in banks	  	 	42,559	  	  	 	88,657	  	
Short-term investments	  	 	776,416	  	  	 	348,818	  	
	  	 	 	 	  	 	 	 	
Total cash and cash equivalents	  	Ps.	822,076	  	  	Ps.	441,068	  	
	  	 	 	 	  	 	 	 	
7.  Related parties
a) An analysis of balances due from/to related parties at December 31, 2012 and 2011 is provided below. All companies are considered affiliates, since the Company’s primary shareholders are also direct or indirect shareholders of the related parties:

 	  	Type of transactions	 	Country of
origin	 	2012	 	 	2011	 	 	Terms	 	
Due from:	  		 		 				 				 				
ARSA Asesoría Integral Profesional, S.A. de C.V.	  	Insurance passenger commissions	 	Mexico	 	Ps.	2,169	  	 	Ps.	2,657	  	 	 	30 days	  	
Arrendadora de Vehículo Alfa, S.A.P.I. de C.V.	  	Transporting services commissions	 	Mexico	 	 	—  	  	 	 	415	  	 	 	30 days	  	
Marketing Modelo, S.A. de C.V.	  	Advertising	 	Mexico	 	 	1,450	  	 	 	—  	  	 	 	30 days	  	
	  		 		 	 	 	 	 	 	 	 	 				
	  		 		 	Ps.	3,619	  	 	Ps.	3,072	  	 				
	  		 		 	 	 	 	 	 	 	 	 				
Due to:	  		 		 				 				 				
Technical and Training Services, S. A. de C. V.	  	Aircraft components supplies	 	El Salvador	 	Ps.	—  	  	 	Ps.	1,493	  	 	 	30 days	  	
Aeromantenimiento, S.A.	  	Aircraft and engine maintenance	 	El Salvador	 	 	3,389	  	 	 	604	  	 	 	30 days	  	
TACA International Airlines, S.A.	  	Maintenance/pilot training	 	El Salvador	 	 	3	  	 	 	—  	  	 	 	30 days	  	
Expediente, S.A. de C.V.	  	Professional fees	 	Mexico	 	 	7	  	 	 	—  	  	 	 	30 days	  	
	  		 		 	 	 	 	 	 	 	 	 				
	  		 		 	Ps.	3,399	  	 	Ps.	2,097	  	 				

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For the years ended December 31, 2012, 2011 and 2010, the Company did not recognize any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
b) During the years ended December 31, 2012, 2011 and 2010, the Company had the following transactions with related parties:

Related party transactions	  	Country of origin	  	2012	 	  	2011	 	  	2010	 	
Revenues:	  		  				  				  				
Other commissions	  	Mexico	  	Ps.	44,205	  	  	Ps.	23,486	  	  	Ps.	8,423	  	
Advertising	  	Mexico	  	 	2,500	  	  	 	2,500	  	  	 	—  	  	
Other	  	Mexico	  	 	—  	  	  	 	1,866	  	  	 	22	  	
Transporting services commissions	  	Mexico	  	 	—  	  	  	 	354	  	  	 	850	  	
Expenses:	  		  				  				  				
Maintenance	  	El Salvador	  	Ps.	135,640	  	  	Ps.	72,983	  	  	Ps.	49,299	  	
Fees	  	Mexico/El Salvador/USA	  	 	—  	  	  	 	—  	  	  	 	248	  	
Pilot training	  	El Salvador	  	 	—  	  	  	 	979	  	  	 	3,669	  	
Other	  	Mexico/El Salvador	  	 	857	  	  	 	1,628	  	  	 	1,115	  	
c) During the years ended December 31, 2012, 2011 and 2010, all of the Company’s senior managers received an aggregate compensation of short and long-term benefits by Ps.63,003, Ps.61,735 and Ps.50,035, respectively.
During the year ended December 31, 2012, the chairman and the independent members of the Company’s board of directors received an aggregate compensation of approximately Ps.5,775, and the rest of the directors received no compensation.
During years ended December 31, 2011 and 2010, the Company did not have an independent chairman nor independent members as part of its Board of Directors.
8.  Other accounts receivable, net
An analysis of other accounts receivable at December 31, 2012 and 2011 is detailed below:

 	  	2012	 	 	2011	 	
Short-term:	  				 				
Credit cards	  	Ps.	91,411	  	 	Ps.	105,613	  	
Cargo clients	  	 	66,863	  	 	 	24,718	  	
Travel agencies	  	 	35,331	  	 	 	18,694	  	
Credit notes from suppliers (Note 10)	  	 	21,151	  	 	 	—  	  	
Other points of sales	  	 	19,057	  	 	 	6,387	  	
Employees	  	 	4,211	  	 	 	9,971	  	
Other accounts receivable	  	 	21,029	  	 	 	16,334	  	
Allowance for doubtful accounts	  	 	(21,722	) 	 	 	(21,297	) 	
	  	 	 	 	 	 	 	 	
	  	Ps.	237,331	  	 	Ps.	160,420	  	

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Accounts receivable have the following maturity:

 	  	2012	 	  	2011	 	
Days	  				  				
00–30	  	Ps.	223,918	  	  	Ps.	152,165	  	
31–60	  	 	23,113	  	  	 	9,906	  	
61–90	  	 	5,194	  	  	 	3,462	  	
91–120	  	 	6,828	  	  	 	16,184	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	259,053	  	  	Ps.	181,717	  	
	  	 	 	 	  	 	 	 	
The movement in the allowance for doubtful accounts from January 1, 2010 to December 31, 2012 is as follows:

Balance as of January 1, 2010	  	Ps.	(25,058	) 	
Write-offs	  	 	9,046	  	
Increase in allowance	  	 	—  	  	
	  	 	 	 	
Balance as of December 31, 2010	  	 	(16,012	) 	
Write-offs	  	 	5,616	  	
Increase in allowance	  	 	(10,901	) 	
	  	 	 	 	
Balance as of December 31, 2011	  	 	(21,297	) 	
Write-offs	  	 	3,017	  	
Increase in allowance	  	 	(3,442	) 	
	  	 	 	 	
Balance as of December 31, 2012	  	Ps.	(21,722	) 	
	  	 	 	 	
9.  Inventories
An analysis of inventories at December 31, 2012 and 2011 is as follows:

 	  	2012	 	  	2011	 	
Spare parts and accessories of flight equipment	  	Ps.	91,403	  	  	Ps.	74,071	  	
Meals, beverages and utensils	  	 	5,747	  	  	 	5,939	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	97,150	  	  	Ps.	80,010	  	
	  	 	 	 	  	 	 	 	
The inventory items are used mainly in consumption of in flight-services and for maintenance services by the Company and its passengers and are valued at average acquisition cost. The resulting amounts do not exceed the respective replacement values.
During the years ended as of December 31, 2012, 2011 and 2010, the amount of consumption of inventories, recorded as an expense was Ps.114,521, Ps.116,657 and Ps.70,653, respectively.
 
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10.  Rotable spare parts, furniture and equipment, net
a) The detail and movement of the different categories of rotable spare parts, furniture and equipment are shown below:

 	 	Gross value	 	 	Accumulated depreciation	 	 	Net value	 	
 	 	At
December 31,
2012	 	 	At
December 31,
2011	 	 	At
December  31,
2012	 	 	At
December 31,
2011	 	 	At
December  31,
2012	 	 	At
December 31,
2011	 	
Aircraft parts and rotable spare parts	 	Ps.	161,630	  	 	Ps.	293,548	  	 	Ps.	(53,069	) 	 	Ps.	(93,384	) 	 	Ps.	108,561	  	 	Ps.	200,164	  	
Constructions and improvements	 	 	47,973	  	 	 	71,990	  	 	 	(27,616	) 	 	 	(34,269	) 	 	 	20,357	  	 	 	37,721	  	
Standardization	 	 	33,682	  	 	 	23,022	  	 	 	(23,370	) 	 	 	(20,258	) 	 	 	10,312	  	 	 	2,764	  	
Computer equipment	 	 	20,794	  	 	 	16,147	  	 	 	(14,710	) 	 	 	(12,615	) 	 	 	6,084	  	 	 	3,532	  	
Office furniture and equipment	 	 	24,372	  	 	 	16,977	  	 	 	(4,883	) 	 	 	(5,460	) 	 	 	19,489	  	 	 	11,517	  	
Electric power equipment	 	 	12,789	  	 	 	10,494	  	 	 	(4,448	) 	 	 	(3,482	) 	 	 	8,341	  	 	 	7,012	  	
Motorized transport equipment platform	 	 	4,969	  	 	 	4,950	  	 	 	(4,429	) 	 	 	(4,349	) 	 	 	540	  	 	 	601	  	
Communications equipment	 	 	6,621	  	 	 	5,519	  	 	 	(2,473	) 	 	 	(1,876	) 	 	 	4,148	  	 	 	3,643	  	
Workshop machinery and equipment	 	 	3,302	  	 	 	1,848	  	 	 	(991	) 	 	 	(741	) 	 	 	2,311	  	 	 	1,107	  	
Service carts on board	 	 	3,629	  	 	 	1,783	  	 	 	—  	  	 	 	—  	  	 	 	3,629	  	 	 	1,783	  	
Reserve for obsolescence	 	 	(619	) 	 	 	(294	) 	 	 	—  	  	 	 	—  	  	 	 	(619	) 	 	 	(294	) 	
Pre-delivery payments	 	 	861,052	  	 	 	1,102,355	  	 	 	—  	  	 	 	—  	  	 	 	861,052	  	 	 	1,102,355	  	
Workshop tools	 	 	10,395	  	 	 	10,395	  	 	 	—  	  	 	 	—  	  	 	 	10,395	  	 	 	10,395	  	
Construction and improvements in process	 	 	13,639	  	 	 	11,492	  	 	 	—  	  	 	 	—  	  	 	 	13,639	  	 	 	11,492	  	
Leasehold improvements to flight equipment	 	 	292,463	  	 	 	162,587	  	 	 	(165,383	) 	 	 	(39,081	) 	 	 	127,080	  	 	 	123,506	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	Ps.	1,496,691	  	 	Ps.	1,732,813	  	 	Ps.	(301,372	) 	 	Ps.	(215,515	) 	 	Ps.	1,195,319	  	 	Ps.	1,517,298	  	

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 	 	Aircraft
parts
and rotable
spare parts	 	 	Constructions
and
improvements	 	 	Standardization	 	 	Computer
equipment	 	 	Office
furniture
and
equipment	 	 	Electric
power
equipment	 	 	Workshop
tools	 	 	Construction
and
improvements
in process	 	 	Motorized
transport
equipment
platform	 	 	Communications
equipment	 	 	Workshop
machinery
and
equipment	 	 	Service
carts on
board	 	 	Reserve for
obsolescence	 	 	Pre-delivery
payments	 	 	Improvements
to leased
assets	 	 	Total	 	
Net book amount as of December 31, 2010	 	Ps.	181,013	  	 	Ps.	43,456	  	 	Ps.	6,481	  	 	Ps.	5,233	  	 	Ps.	8,716	  	 	Ps.	8,068	  	 	Ps.	7,352	  	 	Ps.	1,558	  	 	Ps.	1,196	  	 	Ps.	2,861	  	 	Ps.	1,282	  	 	Ps.	1,494	  	 	Ps.	(367	) 	 	Ps.	616,171	  	 	Ps.	36,516	  	 	Ps.	921,030	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Additions	 	 	43,346	  	 	 	4,261	  	 	 	285	  	 	 	1,036	  	 	 	4,321	  	 	 	—  	  	 	 	3,043	  	 	 	11,492	  	 	 	—  	  	 	 	1,288	  	 	 	11	  	 	 	289	  	 	 	—  	  	 	 	1,000,233	* 	 	 	124,520	  	 	 	1,194,125	  	
Disposals	 	 	(287	) 	 	 	(59	) 	 	 	—  	  	 	 	—  	  	 	 	(39	) 	 	 	—  	  	 	 	—  	  	 	 	(546	) 	 	 	—  	  	 	 	(31	) 	 	 	—  	  	 	 	—  	  	 	 	73	  	 	 	(514,049	) 	 	 	—  	  	 	 	(514,938	) 	
Other movements	 	 	—  	  	 	 	807	  	 	 	—  	  	 	 	198	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1,012	) 	 	 	—  	  	 	 	7	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 				 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation	 	 	(23,908	) 	 	 	(10,744	) 	 	 	(4,002	) 	 	 	(2,935	) 	 	 	(1,481	) 	 	 	(1,056	) 	 	 	—  	  	 	 	—  	  	 	 	(595	) 	 	 	(482	) 	 	 	(186	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(37,530	) 	 	 	(82,919	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of December 31, 2011	 	 	200,164	  	 	 	37,721	  	 	 	2,764	  	 	 	3,532	  	 	 	11,517	  	 	 	7,012	  	 	 	10,395	  	 	 	11,492	  	 	 	601	  	 	 	3,643	  	 	 	1,107	  	 	 	1,783	  	 	 	(294	) 	 	 	1,102,355	  	 	 	123,506	  	 	 	1,517,298	  	
Cost	 	 	293,548	  	 	 	71,990	  	 	 	23,022	  	 	 	16,147	  	 	 	16,977	  	 	 	10,494	  	 	 	10,395	  	 	 	11,492	  	 	 	4,950	  	 	 	5,519	  	 	 	1,848	  	 	 	1,783	  	 	 	(294	) 	 	 	1,102,355	  	 	 	162,587	  	 	 	1,732,813	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated depreciation	 	 	(93,384	) 	 	 	(34,269	) 	 	 	(20,258	) 	 	 	(12,615	) 	 	 	(5,460	) 	 	 	(3,482	) 	 	 	—  	  	 	 	—  	  	 	 	(4,349	) 	 	 	(1,876	) 	 	 	(741	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(39,081	) 	 	 	(215,515	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net book amount as of December 31, 2011	 	 	200,164	  	 	 	37,721	  	 	 	2,764	  	 	 	3,532	  	 	 	11,517	  	 	 	7,012	  	 	 	10,395	  	 	 	11,492	  	 	 	601	  	 	 	3,643	  	 	 	1,107	  	 	 	1,783	  	 	 	(294	) 	 	 	1,102,355	  	 	 	123,506	  	 	 	1,517,298	  	
Additions	 	 	45,578	  	 	 	4,834	  	 	 	10,660	  	 	 	5,192	  	 	 	10,641	  	 	 	7,117	  	 	 	—  	  	 	 	13,607	  	 	 	363	  	 	 	1,078	  	 	 	1,454	  	 	 	1,846	  	 	 	(325	) 	 	 	633,226	* 	 	 	129,876	  	 	 	865,147	  	
Disposals	 	 	(106,535	) 	 	 	(10,041	) 	 	 	—  	  	 	 	(10	) 	 	 	(3,864	) 	 	 	(4,727	) 	 	 	—  	  	 	 	(214	) 	 	 	(73	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(874,529	) 	 	 	—  	  	 	 	(999,993	) 	
Other movements	 	 	—  	  	 	 	7,045	  	 	 	—  	  	 	 	—  	  	 	 	4,177	  	 	 	—  	  	 	 	—  	  	 	 	(11,246	) 	 	 	—  	  	 	 	24	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Depreciation	 	 	(30,646	) 	 	 	(19,202	) 	 	 	(3,112	) 	 	 	(2,630	) 	 	 	(2,982	) 	 	 	(1,061	) 	 	 	—  	  	 	 	—  	  	 	 	(351	) 	 	 	(597	) 	 	 	(250	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(126,302	) 	 	 	(187,133	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of December 31, 2012	 	 	108,561	  	 	 	20,357	  	 	 	10,312	  	 	 	6,084	  	 	 	19,489	  	 	 	8,341	  	 	 	10,395	  	 	 	13,639	  	 	 	540	  	 	 	4,148	  	 	 	2,311	  	 	 	3,629	  	 	 	(619	) 	 	 	861,052	  	 	 	127,080	  	 	 	1,195,319	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost	 	 	161,630	  	 	 	47,973	  	 	 	33,682	  	 	 	20,794	  	 	 	24,372	  	 	 	12,789	  	 	 	10,395	  	 	 	13,639	  	 	 	4,969	  	 	 	6,621	  	 	 	3,302	  	 	 	3,629	  	 	 	(619	) 	 	 	861,052	  	 	 	292,463	  	 	 	1,496,691	  	
Accumulated depreciation	 	 	(53,069	) 	 	 	(27,616	) 	 	 	(23,370	) 	 	 	(14,710	) 	 	 	(4,883	) 	 	 	(4,448	) 	 	 	—  	  	 	 	—  	  	 	 	(4,429	) 	 	 	(2,473	) 	 	 	(991	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(165,383	) 	 	 	(301,372	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net book amount as of December 31, 2012	 	Ps.	108,561	  	 	Ps.	20,357	  	 	Ps.	10,312	  	 	Ps.	6,084	  	 	Ps.	19,489	  	 	 	Ps. 8,341	  	 	Ps.	10,395	  	 	Ps.	13,639	  	 	 	Ps. 540	  	 	 	Ps. 4,148	  	 	Ps.	2,311	  	 	Ps.	3,629	  	 	Ps.	(619	) 	 	 	Ps. 861,052	  	 	 	Ps. 127,080	  	 	Ps.	1,195,319	  	

*	As of December 31, 2012 and 2011 , these amounts include capitalized borrowing cost of Ps.64,452 and Ps.28,102, respectively .	
 
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b) Depreciation expense for the years ended December 31, 2012, 2011 and 2010, was Ps.187,133, Ps.82,919 and Ps.44,896, respectively. Depreciation charges for the year are recognized as a component of operating expenses in the consolidated statements of operations.
c) On October 2005 and December 2006, the Company entered into purchase agreements with Airbus and IAE for the purchase of aircraft and engines, respectively. Under such agreements and prior to the delivery of each aircraft and engine, the Company agreed to make pre-delivery payments, which were calculated based on the reference price of each aircraft and engine, and following a formula established for such purpose in the agreements. The Company took the delivery of the aircraft in accordance with a schedule, based on which at December 31, 2011 a total of 16 aircraft deliveries and 5 engines were delivered.
Additionally, based on the original Airbus purchase agreement, the Company had an option to buy 20 additional aircraft under the same commercial terms. On June 22, 2007, the Company converted 14 aircraft (out of the 20 aforementioned additional aircraft) to binding orders. On January 4, 2011, the Company amended the schedule of these 14 additional aircraft to be delivered as follows: seven in 2012, five in 2013 and two in 2014. On the same date, the Company modified these 14 new orders from A319 aircraft type to A320 aircraft type.
In December 2011, the Company amended the agreement with Airbus for the purchase of 44 A320 family aircraft to be delivered from 2015 to 2020. The new order includes 14 Classic Engine Option (“CEO”) aircraft and 30 New Engine Option (“NEO”) aircraft. Upon signature of a memorandum of understanding, pre-delivery payments were made for Ps.40,537 (US$3 million) on November 16, 2011.
During the years ended December 31, 2012 and 2011, the amounts paid for aircraft pre-delivery payments were of Ps.633,226 (US$44.25 million) and Ps.1,000,233 (US$71.54 million), respectively.
d) On August 27, 2012, the Company entered into a total support agreement with Lufthansa Technik AG (“LHT”) for a six year term, which includes:
 
(i)	Total component support agreement (power-by-hour) which replaces the services performed by Aveos Fleet Performance, Inc. under the component services and pooling agreement. The agreement guarantees the availability of aircraft components for the Company’s fleet when they are required. The cost of the total component support agreement is recognized in the consolidated statements of operations.	
 
(ii)	Sale and leaseback agreement of certain components. As of December 31, 2012, some of these components totaling Ps.12,307 were still held by the Company and have been classified as held for sale.	
As part of the total support agreement, the Company received credit notes of Ps.46,461 (US$3.5 million), which are being amortized on a straight line basis, prospectively during the lease term. As of December 31, 2012, the Company amortized a corresponding benefit from these credit notes of Ps.3,485 in the consolidated statement of operations.
The Company applied Ps.25,310 to outstanding LHT invoices and also recorded an account receivable of Ps.21,151 for the unused portion of the credit notes. This account receivable will be applied against future invoices payable to LHT under the total support agreement (Note 8).
Commitments to acquisitions of property, plant and equipment are disclosed in Note 21.
 
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11.  Intangibles assets
The composition and movement of intangible assets are as follows:

 	  	Amortization
rate	 	 	Gross value	 	 	Accumulated amortization	 	Net value	 	
 	  	 	 	 	At December 31,	 	
 	  	 	 	 	2012	 	 	2011	 	 	      2012      	 	  	      2011      	 	2012	 	 	2011	 	
Software	  	 	33.33	% 	 	 	Ps.121,594	  	 	Ps.	95,949	  	 	 	Ps.(61,359)	  	  	Ps.(37,745)	 	 	Ps.60,235	  	 	Ps.	58,204	  	
							
Balance as of January 1, 2010	  	 	 	Ps.  39,180	  	 				 				  		 				 				
Additions	  	 	 	34,822	  	 				 				  		 				 				
Amortization	  	 	 	(16,795	) 	 				 				  		 				 				
		 	 	 	 	 				 				  		 				 				
Balance as of December 31, 2010	  	 	 	57,207	  	 				 				  		 				 				
Additions	  	 	 	21,055	  	 				 				  		 				 				
Amortization	  	 	 	(20,058	) 	 				 				  		 				 				
		 	 	 	 	 				 				  		 				 				
Balance as of December 31, 2011	  	 	 	58,204	  	 				 				  		 				 				
Additions	  	 	 	25,900	  	 				 				  		 				 				
Amortization	  	 	 	(23,869	) 	 				 				  		 				 				
		 	 	 	 	 				 				  		 				 				
Balance as of December 31, 2012	  	 	 	Ps.  60,235	  	 				 				  		 				 				
	  				 	 	 	 	 				 				  		 				 				
a) Business alliance
In February 2009, the Company through its subsidiary, Concesionaria, signed a distribution agreement with Southwest Airlines Co. (SW) under which the customers of SW are able to purchase airplane tickets to the Company’s different destinations both in Mexico and the United States of America through SW’s website at www.southwest.com , for which the Company paid Ps.13,310 (US$1 million) and recorded it as an intangible asset. This agreement came into effect on April 28, 2009, under which, the Company agreed to pay SW a commission amount for all Volaris ticketed sales purchased through SW’s website.
Additionally, in March 2009, the Company through its subsidiary, Concesionaria signed a code share agreement through which the customers of both airlines may fly to a wide range of destinations both in Mexico and the United States. In November 2010, the first phase of the code share agreement became operational with SW.
Business alliance amortization expense for the year ended December 31, 2010 (year in which it was fully amortized) was Ps.5,119. This amount was recognized under the caption sales, marketing and distribution expenses in the consolidated statement of operations.
As a result of changes in the Company’s and SW’s business strategy, both parties made the decision to end the business alliance on February 22, 2013, without any penalty. Customers holding tickets for future travel will be able to contact SW and the Company for assistance through August 9, 2013.
b) Software amortization expense for the years ended December 31, 2012, 2011 and 2010 was Ps.23,869, Ps.20,058 and Ps.16,795, respectively. These amounts were recognized in operating expenses in the consolidated statement of operations.
 
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12.  Prepaid expenses and other current assets
An analysis of prepaid expenses and other current assets at December 31, 2012 and 2011 is as follows:

 	  	2012	 	  	2011	 	
Short-term:	  				  				
Prepaid major maintenance	  	Ps.	128,201	  	  	Ps.	60,911	  	
Prepaid aircraft rent	  	 	64,733	  	  	 	59,984	  	
Transaction costs on the issuance of equity	  	 	6,398	  	  	 	—  	  	
Prepaid insurance	  	 	26,615	  	  	 	22,419	  	
Sales commission to travel agencies for unused tickets	  	 	25,006	  	  	 	20,800	  	
Prepaid expenses for constructions of aircraft and engine	  	 	7,747	  	  	 	22,959	  	
Advances to suppliers	  	 	6,086	  	  	 	6,061	  	
Loss on sale and leaseback transactions to be amortized (Note 14)	  	 	3,047	  	  	 	3,047	  	
Others	  	 	41	  	  	 	3,769	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	267,874	  	  	Ps.	199,950	  	
	  	 	 	 	  	 	 	 	
13.  Guarantee deposits
An analysis of this caption at December 31, 2012 and 2011 is as follows:

 	  	2012	 	  	2011	 	
Current asset:	  				  				
Aircraft maintenance deposits paid to lessors (Note 1j)	  	Ps.	202,478	  	  	Ps.	165,293	  	
Other guarantee deposits	  	 	35,764	  	  	 	4,354	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	238,242	  	  	Ps.	169,647	  	
Non-current asset:	  				  				
Aircraft maintenance deposits paid to lessors (Note 1j)	  	Ps.	1,860,507	  	  	Ps.	1,548,459	  	
Deposits for rental of flight equipment	  	 	293,660	  	  	 	362,336	  	
Collateral of derivative financial instruments (Note 1r)	  	 	81,597	  	  	 	86,108	  	
Other guarantee deposits	  	 	8,901	  	  	 	5,102	  	
	  	 	 	 	  	 	 	 	
	  	 	2,244,665	  	  	 	2,002,005	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	2,482,907	  	  	Ps.	2,171,652	  	
	  	 	 	 	  	 	 	 	
14.  Operating leases
The most significant operating leases are as follows:
a) Aircraft and engines rent. The Company leases 41 aircrafts and five spare engines under operating leases that have maximum terms through 2023. Rents are guaranteed by deposits in cash or letters of credit. The agreements contain certain covenants to which the Company is bound. The most significant covenants include the following:
 
 	(i)	Maintain the records, licenses and authorizations required by the competent aviation authorities and make the corresponding payments.	
 
 	(ii)	Provide maintenance services to the equipment based on the approved maintenance program.	
 
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 	(iii)	Maintain insurance policies on the equipment for the amounts and risks stipulated in each agreement.	
 
 	(iv)	Periodic submission of financial and operating information to the lessor.	
 
 	(v)	Comply with the technical conditions relative to the return of aircraft.	
As of December 31, 2012 and 2011, the Company was in compliance with the covenants under the above mentioned aircraft lease agreements.
b) Rental of land and buildings. The Company has entered into land and property lease agreements with third parties for the premises where it provides its services and where its offices are located.
Composition of the fleet, operating leases:

Aircraft
Type	  	Model	 	  	At December 31,
2012	 	  	At
December 31,
2011	 	  	At
December 31,
2010	 	
A319	  	 	132	  	  	 	11	  	  	 	11	  	  	 	11	  	
A319	  	 	133	  	  	 	13	  	  	 	13	  	  	 	13	  	
A320	  	 	233	  	  	 	13	  	  	 	6	  	  	 	2	  	
A320	  	 	232	  	  	 	4	  	  	 	4	  	  	 	—  	  	
	  				  	 	 	 	  	 	 	 	  	 	 	 	
	  				  	 	41	  	  	 	34	  	  	 	26	  	
	  				  	 	 	 	  	 	 	 	  	 	 	 	
Provided below is an analysis of future minimum aircraft rent payments in U.S. dollars and its equivalent to Mexican pesos:

 	  	Operating leases
in U.S. dollars	 	  	Operating leases
of Mexican pesos	 	
2013	  	US$	136,520	  	  	Ps.	1,776,135	  	
2014	  	 	127,792	  	  	 	1,662,586	  	
2015	  	 	115,438	  	  	 	1,501,865	  	
2016	  	 	103,922	  	  	 	1,352,041	  	
2017	  	 	76,863	  	  	 	999,993	  	
2018 and thereafter	  	 	257,087	  	  	 	3,344,726	  	
	  	 	 	 	  	 	 	 	
Total	  	US$	817,622	  	  	Ps.	10,637,346	  	
	  	 	 	 	  	 	 	 	
Such amounts are determined based on the stipulated rent contained within the agreements considering renewals and on the prevailing exchange rate and interest rates at December 31, 2012.
c) Rental expense charged to results of operations is as follows:

 	  	2012	 	  	2011	 	  	2010	 	
Aircraft and engines (Note 1p)	  	Ps.	1,885,696	  	  	Ps.	1,508,135	  	  	Ps.	1,197,022	  	
Real estate:	  				  				  				
Airports facilities	  	 	49,277	  	  	 	38,161	  	  	 	32,514	  	
Offices, maintenance warehouse and hangar (Note 20)	  	 	20,227	  	  	 	14,346	  	  	 	10,931	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total rental expenses on real estate	  	 	69,504	  	  	 	52,507	  	  	 	43,445	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total cost of operating leases	  	Ps.	1,955,200	  	  	Ps.	1,560,642	  	  	Ps.	1,240,467	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
During the years ended December 31, 2012, 2011 and 2010, the Company sold aircraft and engines to third parties, giving rise to a gain of Ps.61,269, Ps.72,820 and Ps.158, respectively, that was recorded under the caption other income in the consolidated statement of operations (Notes 1l and 20).
 
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During the year ended December 31, 2011, the Company entered into sale and leaseback transactions, which resulted in a loss of Ps.30,706. This loss was deferred on the consolidated statements of financial position and is being amortized over the contractual lease term. As of December 31, 2012 and 2011, the current portion amounts to Ps.3,047 and Ps.3,047, respectively, which are recorded in the caption of prepaid expenses and other current assets (see Note 12), and the non-current portion amounts to Ps.23,601 and Ps.26,645, respectively, which are recorded in the caption of other assets.
For the years ended December 31, 2012 and 2011, the Company amortized a loss of Ps.3,047 and Ps.1,011, respectively.
During 2010, the Company did not conduct any sale and lease back transactions.
15.  Accrued liabilities
a) An analysis of accrued liabilities at December 31, 2012 and 2011 is as follows:

 	  	2012	 	  	2011	 	
Fuel and traffic expenses	  	Ps.	488,829	  	  	Ps.	371,955	  	
Maintenance and aircraft parts expenses	  	 	18,719	  	  	 	48,331	  	
Maintenance reserves	  	 	73,857	  	  	 	66,068	  	
Information and communication expenses	  	 	39,578	  	  	 	31,666	  	
Sale, marketing and distribution expenses	  	 	32,410	  	  	 	10,287	  	
Salaries, short-term benefits payable	  	 	21,516	  	  	 	22,985	  	
Administrative expenses	  	 	16,457	  	  	 	3,569	  	
Employee profit sharing	  	 	7,230	  	  	 	8,143	  	
Others	  	 	67,196	  	  	 	88,045	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	765,792	  	  	Ps.	651,049	  	
	  	 	 	 	  	 	 	 	
b) An analysis of other liabilities is as follows:

 	  	Balance as of
January 1,
2012	 	  	Increase for
the year	 	  	Payments	 	  	Amortization	 	  	Balance as of
December 31,
2012	 	
Aircraft maintenance	  	Ps.	22,559	  	  	Ps.	—  	  	  	Ps.	22,559	  	  	Ps.	—  	  	  	Ps.	—  	  	
Aircraft lease return liabilities	  	 	6,337	  	  	 	2,468	  	  	 	—  	  	  	 	—  	  	  	 	8,805	  	
Aircraft lease extension benefit (Note 1j)	  	 	152,596	  	  	 	—  	  	  	 	—  	  	  	 	23,254	  	  	 	129,342	  	
Supplier services agreement (Note 10)	  	 	—  	  	  	 	46,461	  	  	 	—  	  	  	 	3,484	  	  	 	42,977	  	
Others	  	 	2,470	  	  	 	14,684	  	  	 	2,470	  	  	 	—  	  	  	 	14,684	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	183,962	  	  	Ps.	63,613	  	  	Ps.	25,029	  	  	Ps.	26,738	  	  	Ps.	195,808	  	

Less: Short-term maturities	  				  				  				  				  	Ps.	48,879	  	
Long-term	  				  				  				  				  	Ps.	146,929	  	
						
 	  	Balance as of
January 1,
2011	 	  	Increase for
the year	 	  	Payments	 	  	Amortization	 	  	Balance as of
December 31,
2011	 	
Aircraft maintenances	  	Ps.	76,764	  	  	Ps.	—  	  	  	Ps.	54,205	  	  	Ps.	—  	  	  	Ps.	22,559	  	
Aircraft lease return liabilities	  	 	4,327	  	  	 	2,010	  	  	 	—  	  	  	 	—  	  	  	 	6,337	  	
Aircraft lease extension benefit (Note 1j)	  	 	163,024	  	  	 	—  	  	  	 	—  	  	  	 	10,428	  	  	 	152,596	  	
Others	  	 	6,313	  	  	 	—  	  	  	 	3,843	  	  	 	—  	  	  	 	2,470	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	250,428	  	  	Ps.	2,010	  	  	Ps.	58,048	  	  	Ps.	10,428	  	  	Ps.	183,962	  	

Less: Short-term maturities	  				  				  				  				  	Ps.	23,254	  	
Long-term	  				  				  				  				  	Ps.	160,708	  	
 
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16.  Employment benefits
The components of net period cost recognized in the consolidated statement of operations and the obligations for seniority premium at December 31, 2012, 2011 and 2010, are as follows:

 	  	2012	 	  	2011	 	  	2010	 	
Analysis of net period cost:	  				  				  				
Labor cost of current services	  	Ps.	1,006	  	  	Ps.	960	  	  	Ps.	637	  	
Financial cost	  	 	202	  	  	 	149	  	  	 	108	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net period cost	  	Ps.	1,208	  	  	Ps.	1,109	  	  	Ps.	745	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net projected liability	  	Ps.	4,111	  	  	Ps.	2,813	  	  	Ps.	2,087	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Changes in the present value of the defined benefit obligation are as follows:

 	  	2012	 	 	2011	 	 	2010	 	
Defined benefit obligation at January 1,	  	Ps.	2,813	  	 	Ps.	2,087	  	 	Ps.	1,429	  	
Net period cost	  	 	1,208	  	 	 	1,109	  	 	 	745	  	
Actuarial loss	  	 	436	  	 	 	(139	) 	 	 	(87	) 	
Payments made	  	 	(346	) 	 	 	(244	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Defined benefit obligation at December 31,	  	Ps.	4,111	  	 	Ps.	2,813	  	 	Ps.	2,087	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The principal assumptions used in the computation of the actuarial present value of the current defined benefit obligation, the accumulated current benefit obligation, the projected benefit obligation and the net cost of the plan are as follows:

 	  	2012	 	 	2011	 	 	2010	 	
Financial:	  				 				 				
Annual discount rate	  	 	7.00	% 	 	 	7.50	% 	 	 	7.50	% 	
Expected rate of salary increases	  	 	5.50	% 	 	 	5.50	% 	 	 	5.50	% 	
Annual increase in minimum salary	  	 	4.00	% 	 	 	4.00	% 	 	 	4.00	% 	
Biometric:	  				 				 				
Mortality (1)	  	 	EMSA 82-89	  	 	 	EMSA 82-89	  	 	 	EMSA 82-89	  	
Disability (2)	  	 	IMSS-97	  	 	 	IMSS-97	  	 	 	IMSS-97	  	
 
(1)	EMSSA. Mexican Experience of social security.	
(2)	IMSS. Mexican Experience of Instituto Mexicano de la Seguridad Social.	
Variation in the assumptions
Short-term employee benefits at December 31, 2012 and 2011, respectively, are as follows:

 	  	2012	 	  	2011	 	
Employee profit-sharing	  	Ps.	7,230	  	  	Ps.	5,443	  	
	  	 	 	 	  	 	 	 	
The key management personnel of the Company include the members of the Board of Directors (Note 7).
 
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17.  Management incentive plan
In April 2012, the Board of Directors authorized a management incentive plan for the benefit of certain key employees, subject to shareholders’ approval. On December 21, 2012, the shareholders approved the management incentive plan consisting of: (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of the Company´s fully diluted capital stock; (ii) a grant of options to acquire shares of the Company or Ordinary Participation Certificates (“CPOs”) having shares as underlying securities for which, as long as certain conditions occur, the employees will have the right to request the delivery of those shares (iii) the creation of a trust to deposit such shares in escrow until they are delivered to the officers or returned to the Company in the case that certain conditions do not occur; and (iv) the execution of share sale agreements setting forth the terms and conditions upon which the officers may exercise its shares at Ps.5.31 (five Mexican pesos 31/100) per share.
On December 24, 2012, the trust was created and the share sale agreements were executed. On December 27, 2012, the trust borrowed Ps.133,723 from the Company and immediately after the trust paid the Company the same amount borrowed as purchase price for the shares. The share sale agreements provide that the officers may pay for the shares at the same price upon the occurrence of either an initial public offering of our capital stock or a change of control and as long as they remain employees until the options are exercised, with a maximum term of ten years. Upon payment of the shares by the officers to the trust, the trust has to pay such amount back to the Company as repayment of the loan, for which the Company charges no interest.
The management incentive plan has been classified as “equity-settled,” by which, the grant date, fair value is fixed and is not adjusted by subsequent changes in the fair value of capital instruments. Equity-settled transactions are measured at fair value at the date the equity benefits are conditionally granted to employees. The total cost of the management incentive plan determined by the Company was Ps.2,722 to be recognized from the time it becomes probable the performance condition will be met over the vesting period. This cost was determined by using the improved Binomial valuation model from Hull and White, on the date in which the plan had already been approved by the shareholders and a shared understanding of the terms and conditions of the plan was reached with the employees (December 24, 2012, defined as the grant date), with the following assumptions:

 	  	2012	 	
Dividend yield (%)	  	 	0	% 	
Volatility (%)	  	 	37	% 	
Risk–free interest rate (%)	  	 	5.96	% 	
Expected life of share options (years)	  	 	8.8	  	
Exercise share price (in Mexican pesos Ps.)	  	 	5.31	  	
Exercise multiple	  	 	1.1	  	
Fair value of the stock at grant date	  	 	1.73	  	
The expected volatility reflects the assumption that the historical volatility of comparable companies is indicative of future trends, which may not necessarily be the actual outcome.
Under the methodology followed by the Company, at the grant date and December 31, 2012 the granted shares had no positive intrinsic value.
 
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Movements during the year
The following table illustrates the number of shares options and fixed exercise prices during the year:

 	  	Number	 	  	Exercise price
in Mexican  pesos	 	
Outstanding as of December 31, 2011	  	 	—  	  	  	Ps.	—  	  	
Granted during the year	  	 	25,164,126	  	  	 	5.31	  	
Forfeited during the year	  	 	—  	  	  	 	—  	  	
Exercised during the year	  	 	—  	  	  	 	—  	  	
Outstanding as of December 31, 2012	  	 	25,164,126	  	  	Ps.	5.31	  	
18.  Equity
Stock Split and Share Conversion – Subsequent Event
On June 5, 2013 the Company’s shareholders adopted certain unanimous resolutions (the “June 5 Resolutions”), pursuant to which they approved, among other things: (i) a stock split and share conversion, (ii) a capital increase which is conditioned to an effective IPO, (iii) change to the Company’s bylaws, including the name of the Company and (iv) the 2012 and 2011 consolidated financial statements.
On June 11, 2013 the Company’s shareholders adopted new unanimous resolutions. In the new resolutions the Company’s shareholders revoked the June 5 Resolutions and approved, among other things: (i) a stock split and share conversion, (ii) a capital increase which is conditioned to an effective IPO, (iii) changes to the Company’s bylaws, including the name of the Company and (iv) the 2012 and 2011 consolidated financial statements.
Considering the stock split (which consisted of a 1 to 403 split of the Company’s total number of shares), the total number of authorized shares as of December 31, 2012 was 838,799,767 (2011 and 2010—727,595,544), represented by common registered shares, issued and with no par value, fully subscribed, comprised as follows:

 	  	Shares	 	 	Total	 	
 	  	Fixed Class I	 	  	Variable Class II	 	 			
Series A	  	 	3,224	  	  	 	704,776,072	  	 	 	704,779,296	  	
Series B	  	 	20,956	  	  	 	133,999,515	  	 	 	134,020,471	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180	  	  	 	838,775,587	  	 	 	838,799,767	  	
Treasury shares	  				  				 				
Stock swap option unpaid (Series A)	  	 	—  	  	  	 	(16,719,261	) 	 	 	(16,719,261	) 	
Management incentive plan (Series A)	  	 	—  	  	  	 	(25,164,126	) 	 	 	(25,164,126	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180	  	  	 	796,892,200	  	 	 	796,916,380	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
As a result of the above, the Company now has only two classes of outstanding shares, Series A shares reserved for Mexican holders and Series B shares for non-Mexican holders. All shares representing the Company’s capital stock, either Series A shares or Series B shares, grant the holders the same economic rights and there are no preferences and/or restrictions attaching to any class of shares on the distribution of dividends and the repayment of capital. Mexican holders of Series A shares will be entitled to vote their shares on all matters. Holders of American Depositary Shares or Ordinary Participation Certificates (“CPOs”) will not be entitled to vote, at any time, the underlying Series A shares. The CPO trustee will vote the CPOs in accordance with the vote of the majority of the outstanding Series A shares voted directly by Mexican investors at the relevant shareholders’ meeting. Holders of Series B shares will be entitled to vote their shares on all matters and, for so long as such Series B shares represent 12% or more of the Company’s outstanding capital stock, their affirmative vote will be required to approve any matters related to (i) by-law amendments affecting Series B shares, (ii) de-registration of Series A shares from the National Securities Registry, (iii) mergers or spinoffs, (iv) the incurrence indebtedness or granting of guarantees if the Lease-Adjusted Net Debt to earnings before interests, taxes, depreciation,
 
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amortization and rent (“EBITDAR”) ratio exceeds 4.25 times in 2013 and 3.25 times thereafter (Lease-Adjusted Net Debt is the sum of short-term and long-term debt, 7.0 times the aircraft rent expense for the last four quarters, less cash and cash equivalents at the end of the last quarter for which financial statements have been prepared and EBITDAR shall have the meaning set forth herein), and (v) any material changes to accounting policies. Holders of Series B shares have the right to elect three directors, so long as such Series B shares represent 12% or more of the Company’s outstanding capital stock. Holders of Series A shares have the right to elect one director for each 10% block of the Company’s outstanding capital stock.
Corporate Restructuring
Through unanimous resolutions dated November 27, 2012 and December 21, 2012, the Company’s shareholders approved a corporate restructuring with the sole purpose of acquiring the shares held by other shareholders of Concesionaria in exchange for the capital stock of the Company, through the capitalization of promissory notes by Ps.136,297 and Ps.139,764, respectively.
The following table shows the Company’s capital stock (after giving effect to the stock split discussed above):

 	  	Number of shares	 	  	Thousand of
Mexican pesos	 	
Ordinary shares issued and fully paid	  				  				
At December 31, 2010	  	 	727,595,544	  	  	Ps.	1,966,313	  	
At December 31, 2011	  	 	727,595,544	  	  	 	1,966,313	  	
Capital Increases, fully subscribed and paid:	  				  				
November 27, 2012	  	 	43,020,250	  	  	 	136,298	  	
December 21, 2012	  	 	26,300,586	  	  	 	139,764	  	
Treasury shares	  				  				
December 26, 2012 (Management incentive plan) Note 17	  	 	25,164,126	  	  	 	133,723	  	
	  	 	 	 	  	 	 	 	
	  	 	822,080,506	  	  	Ps.	2,376,098	  	
	  	 	 	 	  	 	 	 	
Treasury shares	  				  				
Capital increase, fully subscribed and unpaid:	  				  				
December 21, 2012 (Stock swap option unpaid)	  	 	16,719,261	  	  	 	88,847	  	
	  	 	 	 	  	 	 	 	
At December 31, 2012	  	 	838,799,767	  	  	Ps.	2,464,945	  	
	  	 	 	 	  	 	 	 	
Additionally, on December 21, 2012 the shareholders of Company through unanimous resolution, approved:
a) The creation of certain unpaid Stock Swap Option (the “Swap”) regarding 16,173,599 shares representing 2.05% of the common equity of Concesionaria (“Concesionaria Swap Shares”) owned by HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Emisión de Certificados Bursátiles F/262374 (“FICAP”), whereby FICAP will have the option to sell to Controladora any or all of Concesionaria Swap Shares in consideration for either (i) a payment in kind with shares from Company’s capital stock, taking into account 1.03374 shares of Company per each share of Concesionaria, or (ii) a cash settlement amount, at a total price of Ps.88,847; and
b) The issuance of an aggregate of 16,719,261 Series A shares (the “Company Swap Shares”) to be held in the treasury until the Swap is exercised at a total price of Ps.88,847.
Although the creation of the Swap and the issuance of the Company Swap Shares were approved on December 21, 2012, the trust implementing the transaction was not created until February 22, 2013 and the Company did not become a party to such trust until April 10, 2013. Therefore, no obligation of the Company existed until April 10, 2013. The option of FICAP to receive payment in kind was subsequently exercised on April 19, 2013 and equity-settled on April 22, 2013. (See Note 23).
 
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As a consequence of the corporate restructuring, at December 31 2012, the Company’s capital stock, which is represented by common registered shares, issued and with no par value, fully subscribed, is comprised as follows:

 	  	Shares	 	 	 	 	
 	  	Fixed
Class I	 	  	Variable
Class II	 	 	At December 31,
2012	 	
Fixed capital:	  				  				 	Ps.	65	  	
Series A	  	 	3,224	  	  	 	181,973,441	  	 				
Series B1	  	 	7,254	  	  	 	45,961,344	  	 				
Series B2	  	 	6,851	  	  	 	44,850,273	  	 				
Series B3	  	 	6,851	  	  	 	43,187,898	  	 				
Series B4	  	 	—  	  	  	 	4,194,021	  	 				
Series N	  	 	—  	  	  	 	518,608,610	  	 				
Variable capital:	  				  				 	 	2,464,880	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180	  	  	 	838,775,587	  	 	Ps.	2,464,945	  	
Treasury shares	  				  				 				
Stock swap option unpaid (Series A)	  	 	—  	  	  	 	(16,719,261	) 	 	 	(88,847	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180	  	  	 	822,056,326	  	 	 	2,376,098	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Management incentive plan (Series A and B4)	  	 	—  	  	  	 	(25,164,126	) 	 	 	(133,723	) 	
Acquisition of non-controlling interest
On November 27 and December 21, 2012, some of the minority shareholders of Concesionaria reimbursed their shares with the corresponding capital reduction in Concesionaria and some of the minority shareholders sold their shares to Controladora, for the sole purpose of participating in Controladora’s capital stock and in exchange they received a promissory note for an amount of Ps.276,062. These promissory notes were recognized as capital contributions upon the issuance of new shares of Controladora for the same value.
At December 31, 2011 and 2010, Controladora’s capital stock, which is represented by common registered shares, issued and with no par value, fully subscribed and paid, is comprised as follows:

 	  	Shares	 	  	 	 	
 	  	Fixed
Class I	 	  	Variable
Class II	 	  	At December 31,
2011	 	
Fixed capital:	  				  				  	Ps.	65	  	
Series A	  	 	7,254	  	  	 	216,465,405	  	  				
Series B	  	 	6,851	  	  	 	211,230,435	  	  				
Series C	  	 	6,851	  	  	 	203,402,160	  	  				
Series D	  	 	3,224	  	  	 	96,473,364	  	  				
Variable capital:	  				  				  	 	1,966,248	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	24,180	  	  	 	727,571,364	  	  	Ps.	1,966,313	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
(i) The Company’s fixed portion of capital stock is represented by common registered shares with no par value. Fixed minimum capital is Ps.65,346 (sixty-five thousand three hundred and forty-six Mexican pesos 00/100) and are represented by Class I shares.
(ii) There is no limit on the number of shares that represent the variable portion of capital, and variable portion of capital is represented by Class II shares.
(iii) Series A, B1, B2, B3 and B4 common registered shares with no par value grant full voting rights. Series N common registered shares with no par value, grant no voting rights. Additionally, in order for a general extraordinary shareholders meeting to consider and approve Important Matters, as defined in the Company’s
 
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bylaws, the affirmative vote of (a) at least 62% of the Series A shares, plus (b) the majority of either the Series B1, B2 or B3, as applicable, as long as each such series of shares maintain a participation of 12.50% in the Company’s capital stock, is needed. Series A may be subscribed and held solely by Mexican investors, Series B1, B2, B3, B4 and N may be subscribed and held by foreign investors under the terms of the legislation applicable to foreign investment in Mexico. The board of directors shall be composed of a minimum of 9 and a maximum of 13 members, which will be appointed by the shareholders. Holders of Series A shares shall have the right to appoint the majority of its members and Series B1, B2, and B3 shall have the right to select a maximum of two board members. All shares representing the Company’s capital stock grant the holders the same economic rights and there are no preferences and/or restrictions attaching to that any class or series of shares on the distribution of dividends and the repayment of capital.
The following table shows the calculations of the basic and diluted earnings per share for the years ended December 31, 2012, 2011 and 2010.

 	  	At December 31,	 	
 	  	2012	 	  	2011	 	 	2010	 	
Net profit (loss) for the period attributable to equity holders of the parent	  	Ps.	215,239	  	  	Ps.	(293,540	) 	 	Ps.	572,234	  	
Weighted average number of shares outstanding (in thousands)	  				  				 				
Basic and diluted	  	 	732,441	  	  	 	727,596	  	 	 	727,596	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Earnings (loss) per share	  				  				 				
Basic and diluted*	  	Ps.	0.000294	  	  	Ps.	(0.000403	) 	 	Ps.	0.000786	  	
 
*	Unvested shares awarded under the management incentive plan and the Company’s swap shares are non- dilutive at such date, and accordingly, they have been excluded in the determination of weighted average diluted shares outstanding and disregarded in the calculation of diluted earnings per share.	
c) In conformity with the Mexican Corporations Act, the Company is required to allocate at least 5% of the net income of each year to increase the legal reserve. This practice must be continued until the legal reserve reaches 20% of capital stock.
At an ordinary general shareholders’ meeting held on April 7, 2011, the shareholders approved to allocate the legal reserve by an amount of Ps.38,250.
d) Any distribution of earnings in excess of the net tax profit account (CUFIN) balance will be subject to corporate income tax, payable by the Company, at the enacted income tax rate at that time.
e) Shareholders may contribute certain amounts for future increases in capital stock, either in the fixed or variable capital. Said contributions will be kept in a special account until the shareholders meeting authorizes an increase in the capital stock of the Company, at which time each shareholder will have a preferential right to subscribe and pay the increase with the contributions previously made. As it is not strictly regulated in Mexican law, the shareholders meeting may agree to return the contributions to the shareholders or even set a term in which the increase in the capital stock has to be authorized. As of December 31, 2012 and 2011, there are not contributions for future increases in capital stock.
f) In 2010, two of the former shareholders of the Company wanted to sell their shares representing an aggregate of 50% of the Company’s capital stock. The Company was required to hired legal and financial advisors to analyze its strategic options and to facilitate the shareholder transaction. The advisory services it contracted for included valuation of the Company, negotiation of contractual provisions and documents, and finding new potential shareholders. On July 16, 2010, new investors and some of the existing shareholders purchased such 50% stake without any proceeds to the Company. Subsequently, it was decided by a meeting of the Board of Directors that the Company would pay such legal and financial expenses on behalf of its shareholders. The Company paid the expenses and accounted for them against equity as a deemed dividend to shareholders.
 
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19.  Income tax and flat rate business tax (FRBT)
In accordance with Mexican tax law, the Company is subject to income tax and Flat Rate Business Tax (“FRBT”) and files its tax returns on an individual entity basis and the related tax results are combined in the accompanying consolidated financial statements. The income tax is computed taking into consideration the taxable and deductible effects of inflation, such as depreciation calculated on restated asset values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the annual inflation adjustment.a) On December 7, 2009, a tax reform was published. This tax reform changed, amended and annulled some tax dispositions that were effective on January 1, 2010.
On December 17, 2012, the 2013 tax reform was published. This tax reform changes the income tax rate for 2013 to 2015 as mention below, which will be 30%, and is effective as of January 1, 2013.
(i) From 2013 the rate will be 30%
(ii) For 2014 the rate will be 29%
(iii) For 2015 and succeeding years 28%
b) Current-year FRBT is computed by applying the 17.5% in 2012, 2011 and 2010. The rate to income is determined on the basis of cash flows, net of authorized credits.
FRBT shall be payable only to the extent it exceeds income tax for the same period. In other words, to determine FRBT payable, income tax paid in a given period shall first be subtracted from the FRBT of the same period and the difference shall be the FRBT payable.
Should a negative FRBT base be determined because deductions exceed taxable income, there will be no FRBT payable. The amount of the negative base multiplied by the FRBT rate results in a FRBT credit, which may be applied against income tax for the same year or, if applicable, against FRBT payable in the next ten years.
Based on its tax result projections, the Company considers that it will be subject to the payment of income tax in future years.
c) For the year ended December 31, 2012 the Company reported on a combined basis a tax profit of Ps.308,633, and Ps.256,588 was applied against tax losses from prior years. For the year ended December 31, 2011, the Company reported on combined basis for financial purposes a tax loss of Ps.532,414, and for the year ended December 31, 2010, the Company reported a tax profit on combined basis of Ps.62,366.
Tax losses in conformity with the Mexican Income Tax law may be carried forward against taxable income generated in the succeeding ten years. In accordance with Mexican tax law, the tax losses are restated using the inflation rate.
d) An analysis of combined tax on profits charged to results of operations of the years ended December 31, 2012, 2011 and 2010 is as follows:

 	  	2012	 	 	2011	 	 	2010	 	
Current year income tax expense	  	Ps.	(15,614	) 	 	Ps.	(7,498	) 	 	Ps.	(251	) 	
Deferred income tax benefit	  	 	12,133	  	 	 	7,022	  	 	 	238,935	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total tax (expenses) benefit on profits	  	Ps.	(3,481	) 	 	Ps.	(476	) 	 	Ps.	238,684	  	

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e) A reconciliation of the statutory corporate income tax rate to the effective tax rate recognized by the Company for financial reporting purposes is as follows:

 	  	2012	 	 	2011	 	 	2010	 	
Statutory income tax rate	  	 	30.00%	  	 	 	30.00%	  	 	 	30.00%	  	
Annual inflation adjustment	  	 	7.04%	  	 	 	(4.33%	) 	 	 	1.25%	  	
Non deductible expenses	  	 	2.03%	  	 	 	(3.42%	) 	 	 	—  	  	
Fixed asset inflation	  	 	(0.64%	) 	 	 	1.40%	  	 	 	1.98%	  	
Tax losses released	  	 	(33.01%	) 	 	 	(66.38%	) 	 	 	(108.64%	) 	
Unused tax losses carryforward	  	 	—  	  	 	 	—  	  	 	 	11.85%	  	
Inflation of tax losses	  	 	(10.36%	) 	 	 	7.82%	  	 	 	—  	  	
Adjustment to beginning balance	  	 	10.29%	  	 	 	25.32%	  	 	 	—  	  	
				
Other tax adjustments	  	 	(6.17%	) 	 	 	9.28%	  	 	 	0.56%	  	
Tax rate change	  	 	2.5%	  	 	 	0.16%	  	 	 	3.00%	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
	  	 	1.68%	  	 	 	(0.15%	) 	 	 	(60.00%	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
For Mexican purposes, corporate income tax is computed on accrued basis. Corporate Income Tax Law requires that taxable profit be determined by considering the revenue less tax deductions and the result is carried forward to the tax losses for previous years. After the amortization of unused tax losses, a 30% tax rate must be applied to the final tax result.
For tax purposes, income received is considered taxable at the earlier of: (i) time the revenue is collected, (ii) the service is provided or (iii) timing of the issuance of the invoice. Expenses are deductible for tax purposes generally on accrual basis, with some exceptions, once the requirements established in the tax law are fulfilled.
 
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f) An analysis of combined deferred taxes is as follows:

 	  	2012	 	 	2011	 	
 	  	Consolidated
statement of
financial position	 	  	Consolidated
statement of
operations	 	 	Consolidated
statement of financial
position	 	  	Consolidated
statement of
operations	 	
Deferred income tax assets:	  				  				 				  				
Unearned transportation revenue	  	Ps.	37,760	  	  	Ps.	12,998	  	 	Ps.	24,762	  	  	Ps.	7,028	  	
Allowance for doubtful accounts	  	 	6,639	  	  	 	(1,029	) 	 	 	7,668	  	  	 	7,668	  	
Provisions	  	 	102,537	  	  	 	(8,135	) 	 	 	110,672	  	  	 	63,265	  	
Employee benefits	  	 	1,151	  	  	 	363	  	 	 	788	  	  	 	(490	) 	
Employee profit sharing	  	 	2,169	  	  	 	1,832	  	 	 	337	  	  	 	(5	) 	
Financial instruments	  	 	44,363	  	  	 	(21	) 	 	 	48,896	  	  	 	71	  	
Extension Lease Agreement	  	 	51,696	  	  	 	51,696	  	 	 	—  	  	  	 	—  	  	
Tax losses available for offsetting against future taxable income	  	 	427,567	  	  	 	43,969	  	 	 	383,598	  	  	 	41,818	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
	  	 	673,882	  	  	 	101,673	  	 	 	576,721	  	  	 	119,355	  	
Deferred income tax liabilities:	  				  				 				  				
Inventories	  	 	29,067	  	  	 	5,064	  	 	 	24,003	  	  	 	11,560	  	
Financial instruments	  	 	757	  	  	 	(18	) 	 	 	350	  	  	 	(812	) 	
Furniture and equipment	  	 	31,834	  	  	 	(21,459	) 	 	 	53,293	  	  	 	98	  	
Prepaid expenses and other assets	  	 	100,020	  	  	 	42,471	  	 	 	57,279	  	  	 	13,762	  	
Supplemental rent	  	 	202,947	  	  	 	63,212	  	 	 	139,671	  	  	 	87,725	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
	  	 	364,625	  	  	 	89,540	  	 	 	274,596	  	  	 	112,333	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Deferred tax asset, net	  	Ps.	309,257	  	  	Ps.	12,133	  	 	Ps.	302,125	  	  	Ps.	7,022	  	

									
 	  	2012	 	 	2011	 	
Reflected in the consolidated statement of financial position as follows:	  				 				
Deferred tax assets	  	Ps.	319,969	  	 	Ps.	302,125	  	
Deferred tax liabilities	  	 	(10,712	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Deferred tax net	  	Ps.	309,257	  	 	Ps.	302,125	  	
	  	 	 	 	 	 	 	 	
A reconciliation of deferred tax asset is as follows:

 	  	2012	 	 	2011	 	  	2010	 	
Opening balance as of January 1,	  	Ps.	302,125	  	 	Ps.	273,338	  	  	Ps.	4,353	  	
Tax income (expense) during the current year recorded in profit	  	 	12,133	  	 	 	7,022	  	  	 	238,935	  	
Tax income (expense) during the current year recorded in accumulated other comprehensive income	  	 	(5,001	) 	 	 	21,765	  	  	 	30,050	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Closing balance as of December 31,	  	Ps.	309,257	  	 	Ps.	302,125	  	  	Ps.	273,338	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
At December 31, 2012 and 2011 the table shown above includes deferred income tax asset recognized by Concesionaria for tax losses carry-forwards to the extent that the realization of the related tax benefit trough future taxable profits is probable.
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
 
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g) According to IAS 12, a deferred tax asset should be recognized for the carryforward of unused tax losses to the extent that it is probable that future taxable income will be available against which the unused tax losses can be utilized. In this regards Company has recognized at December 31, 2012 and 2011 a deferred tax asset for tax losses of Ps.427,567 and Ps.383,598, respectively.
The Company recognized a deferred tax asset for the carryforward of unused tax losses as it believes that it has convincing evidence to support their continued recognition as of December 31, 2012. Specifically, it believes that the amounts will be recovered through sufficient taxable temporary differences relating to the same taxation authority which will result in taxable amounts against which the unused tax losses can be utilized before they expire.
An analysis of the available tax losses carry-forward of the Company at December 31, 2012 is as follows:

Year of
   loss	  	Historical
loss	 	  	Restated
tax loss	 	  	Utilized	 	  	Total
remaining  amount	 	  	Year of
expiration	 	
2005	  	Ps.	115,170	  	  	Ps.	142,044	  	  	Ps.	142,044	  	  	Ps.	—  	  	  	 	2015	  	
2006	  	 	297,422	  	  	 	385,480	  	  	 	261,911	  	  	 	123,569	  	  	 	2016	  	
2007	  	 	333,206	  	  	 	423,663	  	  	 	1,140	  	  	 	422,523	  	  	 	2017	  	
2008	  	 	317,209	  	  	 	382,783	  	  	 	245	  	  	 	382,538	  	  	 	2018	  	
2009	  	 	344,154	  	  	 	393,810	  	  	 	5,622	  	  	 	388,188	  	  	 	2019	  	
2010	  	 	95,334	  	  	 	105,201	  	  	 	2,463	  	  	 	102,738	  	  	 	2020	  	
2011	  	 	559,623	  	  	 	596,974	  	  	 	1,656	  	  	 	595,318	  	  	 	2021	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  				
	  	Ps.	2,062,118	  	  	Ps.	2,429,955	  	  	Ps.	415,081	  	  	Ps.	2,014,874	  	  				
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  				
A breakdown of available tax loss carry-forward of Controladora and its subsidiaries at December 31, 2012 is as follows:

 	  	Historical
loss	 	  	Restated
tax loss	 	  	Utilized	 	  	Total
remaining  amount	 	
Concesionaria	  	Ps.	1,687,494	  	  	Ps.	2,016,796	  	  	Ps.	374,466	  	  	Ps.	1,642,330	  	
Controladora	  	 	359,909	  	  	 	397,176	  	  	 	29,485	  	  	 	367,691	  	
Comercializadora	  	 	13,735	  	  	 	14,968	  	  	 	10,115	  	  	 	4,853	  	
Servicios Administrativos	  	 	980	  	  	 	1,015	  	  	 	1,015	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	2,062,118	  	  	Ps.	2,429,955	  	  	Ps.	415,081	  	  	Ps.	2,014,874	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
h) At December 31, 2012, the Company had the following tax balances:

Restated contributed capital account (“CUCA”)	  	Ps.	2,961,368	  	
Net tax profit account (“CUFIN”)	  	 	27,432	  	
20.  Other operating income and expenses
An analysis of other operating income is as follows:

 	  	2012	 	  	2011	 	  	2010	 	
Aircraft gain on sale and leaseback
(Note 14)	  	Ps.	61,269	  	  	Ps.	72,820	  	  	Ps.	8	  	
Others	  	 	7,531	  	  	 	1,011	  	  	 	150	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	68,800	  	  	Ps.	73,831	  	  	Ps.	158	  	

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An analysis of other operating expenses is as follows:

 	  	2012	 	  	2011	 	  	2010	 	
Administrative and operational support expenses (Note 1u)	  	Ps.	116,257	  	  	Ps.	144,035	  	  	Ps.	85,995	  	
Technology and communications	  	 	72,962	  	  	 	56,493	  	  	 	42,384	  	
Insurance	  	 	66,903	  	  	 	50,861	  	  	 	57,349	  	
Passenger services	  	 	53,395	  	  	 	46,393	  	  	 	39,622	  	
Rents of offices, maintenance warehouse and hangar (Note 14c)	  	 	20,227	  	  	 	14,346	  	  	 	10,931	  	
Loss on disposal of rotable spare parts, furniture and equipment	  	 	14,586	  	  	 	1,066	  	  	 	—  	  	
Penalty of anticipated IT contract cancellation	  	 	—  	  	  	 	34,245	  	  	 	—  	  	
Others	  	 	12,187	  	  	 	11,607	  	  	 	19,132	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	356,517	  	  	Ps.	359,046	  	  	Ps.	255,413	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
21.  Commitments
Aircraft-related commitments and financing arrangements
Committed expenditures for aircraft purchase and related flight equipment, including estimated amounts for contractual prices escalations and pre-delivery payments, will be as follows:

 	  	Commitment
expenditures in U.S.
dollars	 	  	Commitment
expenditures
equivalent in
Mexican pesos	 	
2013	  	US$	43,742	  	  	Ps.	569,086	  	
2014	  	 	58,991	  	  	 	767,476	  	
2015	  	 	58,273	  	  	 	758,141	  	
2016	  	 	41,547	  	  	 	540,534	  	
2017	  	 	82,275	  	  	 	1,070,405	  	
2018 and thereafter	  	 	237,131	  	  	 	3,085,092	  	
	  	 	 	 	  	 	 	 	
	  	US$	521,959	  	  	Ps.	6,790,734	  	
	  	 	 	 	  	 	 	 	
Litigation
The Company is a party to legal proceedings and claims that arise during the ordinary course of business. The Company believes the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
22.  Operating segments
The Company is managed as a single business unit that provides air transportation services. The Company has two geographic segments identified below:

Revenues:	  	2012	 	  	2011	 	  	2010	 	
Domestic (Mexico)	  	Ps.	8,834,864	  	  	Ps.	6,781,571	  	  	Ps.	5,751,132	  	
United States of America	  	 	2,851,551	  	  	 	2,097,045	  	  	 	1,026,258	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total revenues	  	Ps.	11,686,415	  	  	Ps.	8,878,616	  	  	Ps.	6,777,390	  	

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23.  Subsequent events
Subsequent to December 31, 2012 and prior to June 11, 2013:
(i) The Company opened six new routes, reaching a total of 73 routes. During the same period the Company’s fleet increased from 41 to 42 aircraft.
(ii) On February 22, 2013, through the creation of a trust, FICAP contributed all of its Series A shares of Concesionaria (16,173,599 shares).
(iii) On April 10, 2013 the trustee executed an Adherence Agreement under which Controladora adhered to the INVEX Trust and issued a promissory note for the purchase price of the Company swap shares in favor of the INVEX Trust.
(iv) On April 19, 2013 the promissory note was cancelled by the INVEX Trust and the Controladora Swap Shares were transferred by Controladora to the INVEX Trust. The Concesionaria swap shares are held in escrow by the INVEX trust, until the option to sell such shares is exercised by the FICAP, as beneficiary of the INVEX trust. The option of FICAP to receive payment in kind was exercised on April 19, 2013 and equity-settled on April 22, 2013.
Upon the exercise of the Swap to purchase the Concesionaria swap shares, the Company will increase its direct and indirect holding of the outstanding shares of Concesionaria by acquiring an additional 2.04% interest in the voting shares of Concesionaria, increasing its ownership to 99.99%.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Unaudited Interim Condensed Consolidated Statements of Financial Position
(In thousands of Mexican pesos)

 	  	Thousands of U.S.
dollars, 2013	 	  	At March  31,
2013
Unaudited
(Restated)	 	  	At December 31,
2012 Audited
(Restated)	 	  	At March 31,
2012
Unaudited
(Restated)	 	
Assets	  				  				  				  				
Current assets:	  				  				  				  				
Cash and cash equivalents (Note 8)	  	US$	74,944	  	  	Ps.	925,898	  	  	Ps.	822,076	  	  	Ps.	687,083	  	
Accounts receivable:	  				  				  				  				
Related parties (Note 9)	  	 	402	  	  	 	4,963	  	  	 	3,619	  	  	 	2,144	  	
Other accounts receivable, net (Note 10)	  	 	38,614	  	  	 	477,059	  	  	 	237,331	  	  	 	204,396	  	
Recoverable taxes	  	 	12,666	  	  	 	156,482	  	  	 	146,366	  	  	 	108,543	  	
Inventories	  	 	8,818	  	  	 	108,945	  	  	 	97,150	  	  	 	76,531	  	
Prepaid expenses and other current assets (Note 13)	  	 	22,410	  	  	 	276,862	  	  	 	267,874	  	  	 	234,534	  	
Financial instruments (Note 5)	  	 	—  	  	  	 	—  	  	  	 	2,360	  	  	 	—  	  	
Guarantee deposits (Note 14)	  	 	22,998	  	  	 	284,135	  	  	 	238,242	  	  	 	203,815	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total current assets	  	 	180,852	  	  	 	2,234,344	  	  	 	1,815,018	  	  	 	1,517,046	  	
					
Non-current assets:	  				  				  				  				
Rotable spare parts, furniture and equipment, net (Note 11)	  	 	88,443	  	  	 	1,092,683	  	  	 	1,195,319	  	  	 	1,582,930	  	
Intangible assets (Note 12)	  	 	4,781	  	  	 	59,069	  	  	 	60,235	  	  	 	55,400	  	
Deferred income tax	  	 	27,575	  	  	 	340,694	  	  	 	319,969	  	  	 	303,860	  	
Guarantee deposits (Note 14)	  	 	182,346	  	  	 	2,252,808	  	  	 	2,244,665	  	  	 	1,914,931	  	
Other assets	  	 	3,451	  	  	 	42,638	  	  	 	54,045	  	  	 	55,756	  	
Assets classified as held for sale	  	 	454	  	  	 	5,610	  	  	 	12,307	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	US$	487,902	  	  	Ps.	6,027,846	  	  	Ps.	5,701,558	  	  	Ps.	5,429,923	  	

Liabilities and equity	  				  				  				  				
Short-term liabilities:	  				  				  				  				
Unearned transportation revenue	  	US$	130,859	  	  	Ps.	1,616,713	  	  	Ps.	1,258,670	  	  	Ps.	1,327,340	  	
Accounts payable:	  				  				  				  				
Suppliers	  	 	41,091	  	  	 	507,662	  	  	 	520,345	  	  	 	455,001	  	
Related parties (Note 9)	  	 	602	  	  	 	7,439	  	  	 	3,399	  	  	 	5,645	  	
Accrued liabilities (Note 16)	  	 	67,764	  	  	 	837,200	  	  	 	765,792	  	  	 	708,572	  	
Taxes payable	  	 	60,830	  	  	 	751,532	  	  	 	560,418	  	  	 	625,979	  	
Financial instruments (Note 5)	  	 	2,941	  	  	 	36,331	  	  	 	37,011	  	  	 	27,715	  	
Financial debt (Note 7)	  	 	31,621	  	  	 	390,663	  	  	 	527,383	  	  	 	573,845	  	
Other liabilities	  	 	4,241	  	  	 	52,401	  	  	 	48,879	  	  	 	23,254	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total short-term liabilities	  	 	339,949	  	  	 	4,199,941	  	  	 	3,721,897	  	  	 	3,747,351	  	
					
Long-term liabilities:	  				  				  				  				
Financial instruments (Note 5)	  	 	7,728	  	  	 	95,476	  	  	 	110,702	  	  	 	115,297	  	
Financial debt (Note 7)	  	 	44,383	  	  	 	548,329	  	  	 	632,540	  	  	 	806,240	  	
Other liabilities	  	 	12,075	  	  	 	149,185	  	  	 	146,929	  	  	 	150,311	  	
Employee benefits	  	 	380	  	  	 	4,692	  	  	 	4,111	  	  	 	3,007	  	
Deferred income taxes	  	 	874	  	  	 	10,800	  	  	 	10,712	  	  	 	201	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total liabilities	  	 	405,389	  	  	 	5,008,423	  	  	 	4,626,891	  	  	 	4,822,407	  	

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 	  	Thousands of U.S.
dollars, 2013	 	 	At March  31,
2013
Unaudited
(Restated)	 	 	At December 31,
2012 Audited
(Restated)	 	 	At March  31,
2012
Unaudited
(Restated)	 	
Equity (Note 18):	  				 				 				 				
Capital stock	  	 	192,325	  	 	 	2,376,098	  	 	 	2,376,098	  	 	 	1,966,313	  	
Treasury shares	  	 	(10,824	) 	 	 	(133,723	) 	 	 	(133,723	) 	 	 	—  	  	
Contributions for future capital increases	  	 	—  	  	 	 	1	  	 	 	1	  	 	 	1	  	
Legal reserve	  	 	3,096	  	 	 	38,250	  	 	 	38,250	  	 	 	38,250	  	
Additional paid-in capital	  	 	(15,448	) 	 	 	(190,850	) 	 	 	(190,850	) 	 	 	—  	  	
Accumulated losses	  	 	(80,288	) 	 	 	(991,931	) 	 	 	(929,645	) 	 	 	(1,367,824	) 	
Other accumulated comprehensive losses	  	 	(7,991	) 	 	 	(98,724	) 	 	 	(107,910	) 	 	 	(97,494	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity attributable to equity holders of the parent	  	 	80,870	  	 	 	999,121	  	 	 	1,052,221	  	 	 	539,246	  	
Non-controlling interest	  	 	1,643	  	 	 	20,302	  	 	 	22,446	  	 	 	68,270	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	  	 	82,513	  	 	 	1,019,423	  	 	 	1,074,667	  	 	 	607,516	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and equity	  	US$	487,902	  	 	Ps.	6,027,846	  	 	Ps	.5,701,558	  	 	Ps	.5,429,923	  	

 
Amounts for 2013 and 2012 are restated (see Note 2).
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Unaudited Interim Condensed Consolidated Statements of Operations
(In thousands of Mexican pesos, except for loss per share)

 	  	Thousands of  U.S.
dollars 2013, except
for losses per share	 	 	For the three month periods ended
March 31,	 	
 	  			 	    2013    	 	 	    2012    	 	
 	  			 	Unaudited	 	
 	  			 	      (Restated)	 	
Operating revenues:	  				 				 				
Passenger	  	US$	209,439	  	 	Ps.	2,587,535	  	 	Ps.	2,099,908	  	
Non-ticket	  	 	38,370	  	 	 	474,052	  	 	 	312,241	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
	  	 	247,809	  	 	 	3,061,587	  	 	 	2,412,149	  	
Other operating income	  	 	(1,962	) 	 	 	(24,240	) 	 	 	(19,413	) 	
Fuel	  	 	97,019	  	 	 	1,198,628	  	 	 	1,088,405	  	
Aircraft rent (Note 15)	  	 	41,628	  	 	 	514,297	  	 	 	445,508	  	
Salaries and benefits	  	 	29,369	  	 	 	362,840	  	 	 	296,836	  	
Landing, take-off and navigation expenses	  	 	37,296	  	 	 	460,772	  	 	 	370,961	  	
Sales, marketing and distribution expenses	  	 	15,101	  	 	 	186,573	  	 	 	162,739	  	
Maintenance expenses	  	 	11,434	  	 	 	141,268	  	 	 	116,242	  	
Other operating expenses (Note 20)	  	 	8,274	  	 	 	102,227	  	 	 	74,981	  	
Depreciation and amortization (Note 11 and Note 12)	  	 	6,576	  	 	 	81,245	  	 	 	41,678	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	3,074	  	 	 	37,977	  	 	 	(165,788	) 	
				
Finance income	  	 	353	  	 	 	4,355	  	 	 	2,616	  	
Finance cost	  	 	(1,491	) 	 	 	(18,415	) 	 	 	(18,769	) 	
Foreign exchange loss, net	  	 	(8,728	) 	 	 	(107,830	) 	 	 	(87,812	) 	

Loss before income tax	  	 	(6,792	) 	 	 	(83,913	) 	 	 	(269,753	) 	
Income tax benefit (Note 19)	  	 	1,561	  	 	 	19,291	  	 	 	4,532	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Consolidated net loss	  	US$	(5,231	) 	 	Ps.	(64,622	) 	 	Ps.	(265,221	) 	

Attributable to:	  				 				 				
Equity holders of the parent	  	 	(5,042	) 	 	 	(62,286	) 	 	 	(222,940	) 	
Non-controlling interest	  	 	(189	) 	 	 	(2,336	) 	 	 	(42,281	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Consolidated net loss	  	US$	(5,231	) 	 	Ps.	(64,622	) 	 	Ps.	(265,221	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Loss per share basic and diluted:*	  	US$	(0.000006	) 	 	Ps	.(0.000078)	  	 	Ps.	(0.000306	) 	
Amounts for 2013 are restated (see Note 2).
 
*	Per share amounts in the Company’s unaudited interim condensed consolidated statements of operations reflected the retrospective application of the stock split effected on June 11, 2013 (see Note 18).	
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Unaudited Interim Condensed Consolidated Statements of Comprehensive Income
(In thousands of Mexican pesos)

 	  	Thousands of
U.S. dollars
2013	 	 	For the three
months ended
March 31,	 	
 	  			 	2013	 	 	2012	 	
 	  	 	 	 	Unaudited	 	
 	  	 	 	 	   (Restated)	 	
Consolidated net loss for the period	  	 	US$(5,231)	  	 	Ps.	(64,622)	  	 	Ps.	(265,221)	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income:	  				 				 				
Other comprehensive income to be reclassified to profit or loss in subsequent periods:	  				 				 				
Net gain on cash flow hedges,
net of income tax effect	  	 	760	  	 	 	9,378	  	 	 	12,998	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss for the period, net of tax	  	 	US$(4,471)	  	 	Ps.	(55,244)	  	 	Ps.	(252,223)	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Attributable to:	  				 				 				
Equity holders of the parent	  	 	(4,298	) 	 	 	(53,100	) 	 	 	(211,314	) 	
Non-controlling interest	  	 	(173	) 	 	 	(2,144	) 	 	 	(40,909	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
	  	 	US$(4,471)	  	 	Ps.	(55,244)	  	 	Ps.	(252,223)	  	

 
 
Amounts for 2013 are restated (see Note 2).
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN,
S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Unaudited Interim Condensed Consolidated Statements of Changes in Equity
For the three months ended March 31, 2013
(In thousands of Mexican pesos)

   	 	Attributable to the equity holders of the parent	 	 	 	 	 	 	 	 	 	 	
 	 	Capital
Stock	 	 	Treasury
Shares	 	 	Contributions for
future capital
increases	 	 	Legal
Reserve	 	 	Additional
paid-in
capital	 	 	Accumulated
losses	 	 	Employee
Benefits	 	 	Cash flow
hedges	 	 	Total	 	 	Non-controlling
interest	 	 	Total equity	 	
Balances as of January 1, 2013 (Restated)	 	Ps.	2,376,098	  	 	Ps.	(133,723)	  	 	Ps.	1	  	 	Ps.	38,250	  	 	Ps.	(190,850)	  	 	Ps.	(929,645)	  	 	Ps.	(8,325)	  	 	Ps.	(99,585)	  	 	Ps.	1,052,221	  	 	Ps.	22,446	  	 	Ps.	1,074,667	  	
Net loss for the period	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(62,286	) 	 	 	—  	  	 	 	—  	  	 	 	(62,286	) 	 	 	(2,336	) 	 	 	(64,622	) 	
Other comprehensive income items	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	9,186	  	 	 	9,186	  	 	 	192	  	 	 	9,378	  	
	 				 				 				 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive (loss) income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(62,286)	  	 	 	—  	  	 	 	9,186	  	 	 	(53,100	) 	 	 	(2,144	) 	 	 	(55,244	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balances as of March 31, 2013 (Restated)	 	Ps.	2,376,098	  	 	Ps.	(133,723)	  	 	Ps.	1	  	 	 	Ps.38,250	  	 	Ps.	(190,850)	  	 	Ps.	(991,931)	  	 	Ps.	(8,325)	  	 	Ps.	(90,399)	  	 	Ps.	99,121	  	 	Ps.	20,302	  	 	Ps.	1,019,423	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balances as of March 31, 2013 (Unaudited)	 	US$	192,325	  	 	US$	(10,824	) 	 	US$	—  	  	 	US$	3,096	  	 	US$	(15,448	) 	 	US$	(80,288	) 	 	US$	(674	) 	 	US$	(7,317	) 	 	US$	80,870	  	 	US$	1,643	  	 	US$	82,513	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts for 2013 are restated (see Note 2).
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN,
S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
For the three months ended March 31, 2012
(In thousands of Mexican pesos)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	Attributable to the equity holders of the
parent	 	 	 	 	 	 	 	 	 	 	
 	 	Capital
stock	 	 	Treasury
Shares	 	 	Contributions for
future capital
increases	 	 	Legal
reserve	 	 	Accumulated
losses	 	 	Employee
benefits	 	 	Cash flow
hedges	 	 	Total	 	 	Non-controlling
interest	 	 	Total equity	 	
Balance as of January 1, 2012 (Restated)	 	Ps.	1,966,313	  	 	Ps.	—  	  	 	Ps.	1	  	 	Ps.	38,250	  	 	Ps.	(1,144,884)	  	 	Ps.	(7,983)	  	 	Ps.	(101,137)	  	 	Ps.	750,560	  	 	Ps.	109,179	  	 	Ps.	859,739	  	
Net loss for the period	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(222,940	) 	 	 	—  	  	 	 	—  	  	 	 	(222,940	) 	 	 	(42,281	) 	 	 	(265,221	) 	
Other comprehensive income items	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	11,626	  	 	 	11,626	  	 	 	1,372	  	 	 	12,998	  	
	 				 				 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive(loss) income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(222,940	) 	 	 	—  	  	 	 	11,626	  	 	 	(211,314	) 	 	 	(40,909	) 	 	 	(252,223	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2012 (Unaudited)	 	Ps.	1,966,313	  	 	Ps.	—  	  	 	Ps.	1	  	 	Ps.	38,250	  	 	Ps.	(1,367,824)	  	 	Ps.	(7,983)	  	 	Ps.	( 89,511)	  	 	Ps.	539,246	  	 	Ps.	68,270	  	 	Ps.	607,516	  	

Amounts for 2012 are restated (see Note 2).
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Unaudited Interim Condensed Consolidated Statements of Cash Flows
(In thousands of Mexican pesos)

 	 	Thousands of
U.S. dollars	 	 	For the three months ended
March 31,	 	
 	 	2013	 	 	2013	 	 	2012	 	
 	 	 	 	 	Unaudited	 	
 	 	(Restated)	 	
Operating activities	 				 				 				
Loss before income tax	 	US$	(6,792	) 	 	Ps.	(83,913	) 	 	Ps.	(269,753	) 	
Non-cash adjustment to reconcile loss before tax to net cash flows from operating activities:	 				 				 				
Depreciation and amortization (Note 11 and 12)	 	 	6,576	  	 	 	81,245	  	 	 	41,678	  	
Allowance for doubtful accounts	 	 	246	  	 	 	3,013	  	 	 	5,931	  	
Finance income	 	 	(353	) 	 	 	(4,355	) 	 	 	(2,616	) 	
Finance cost	 	 	1,491	  	 	 	18,415	  	 	 	18,769	  	
Foreign exchange	 	 	(1,182	) 	 	 	(14,600	) 	 	 	(119,627	) 	
Financial instruments	 	 	99	  	 	 	1,220	  	 	 	6,116	  	
Net gain on disposal of rotable spare parts, furniture and equipment and gain of sale and leaseback transaction (Note 20)	 	 	(1,805	) 	 	 	(22,306	) 	 	 	(17,239	) 	
Employee benefits	 	 	78	  	 	 	959	  	 	 	302	  	
Aircraft lease extension benefit and other benefits by services agreement	 	 	(659	) 	 	 	(8,136	) 	 	 	(5,814	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from operating activities before changes in working capital and provisions	 	 	(2,301	) 	 	 	(28,458	) 	 	 	(342,253	) 	
Changes in operating assets and liabilities:	 				 				 				
Related parties	 	 	218	  	 	 	2,696	  	 	 	4,476	  	
Other accounts receivable	 	 	(19,659	) 	 	 	(242,875	) 	 	 	(50,237	) 	
Recoverable taxes	 	 	(819	) 	 	 	(10,116	) 	 	 	(33,096	) 	
Inventories	 	 	(955	) 	 	 	(11,795	) 	 	 	3,479	  	
Prepaid expenses	 	 	(1,154	) 	 	 	(14,253	) 	 	 	(34,584	) 	
Other assets	 	 	923	  	 	 	11,407	  	 	 	(4,254	) 	
Guarantee deposits	 	 	(4,372	) 	 	 	(54,010	) 	 	 	52,906	  	
Suppliers	 	 	(1,027	) 	 	 	(12,683	) 	 	 	(80,464	) 	
Accrued liabilities	 	 	5,780	  	 	 	71,408	  	 	 	57,524	  	
Taxes payable	 	 	15,288	  	 	 	188,879	  	 	 	195,736	  	
Unearned transportation revenue	 	 	28,981	  	 	 	358,043	  	 	 	501,950	  	
Financial instruments	 	 	(111	) 	 	 	(1,368	) 	 	 	(6,348	) 	
Other liabilities	 	 	1,095	  	 	 	13,534	  	 	 	(4,693	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	21,887	  	 	 	270,409	  	 	 	260,142	  	
Interest received	 	 	350	  	 	 	4,329	  	 	 	2,616	  	
Income tax paid	 	 	(254	) 	 	 	(3,132	) 	 	 	(287	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows provided by operating activities	 	 	21,983	  	 	 	271,606	  	 	 	262,471	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Investing activities	 				 				 				
Acquisitions of rotable spare parts, furniture and equipment (Note 11)	 	 	(18,417	) 	 	 	(227,532	) 	 	 	(208,400	) 	
Acquisitions of intangible assets	 	 	(509	) 	 	 	(6,291	) 	 	 	(2,216	) 	
Proceeds from disposals of rotable spare parts, furniture and equipment	 	 	23,933	  	 	 	295,686	  	 	 	132,386	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows provided by (used in) investing activities	 	 	5,007	  	 	 	61,863	  	 	 	(78,230	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Financing activities	 				 				 				
Interest paid	 	 	(895	) 	 	 	(11,053	) 	 	 	(17,040	) 	
Payments of financial debt	 	 	(20,462	) 	 	 	(252,798	) 	 	 	(116,725	) 	
Proceeds from financial debt	 	 	4,822	  	 	 	59,570	  	 	 	177,072	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows (used in) provided by financing activities	 	 	(16,535	) 	 	 	(204,281	) 	 	 	43,307	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Increase in cash and cash equivalents	 	 	10,455	  	 	 	129,188	  	 	 	227,548	  	
Net foreign exchange differences on the cash balance	 	 	(2,051	) 	 	 	(25,366	) 	 	 	18,467	  	
Cash and cash equivalents at beginning of year	 	 	66,540	  	 	 	822,076	  	 	 	441,068	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of year	 	US$	74,944	  	 	Ps.	925,898	  	 	Ps.	687,083	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts for 2013 are restated (see Note 2).
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
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CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. AND SUBSIDIARIES
(d.b.a. VOLARIS)
 Notes to the Unaudited Interim Condensed Consolidated Financial Statements
At March 31, 2013 and December 31, 2012
(In thousands of Mexican pesos and thousands of U.S. dollars, except when indicated otherwise)
1.  Corporate information
These unaudited interim condensed consolidated financial statements and their accompanying notes were authorized for issuance by the Company’s Chief Executive Officer, Enrique Beltranena and the Chief Financial Officer, Fernando Suarez on June 11, 2013. Subsequent events have been considered through June 11, 2013 (see Note 23).
Subsequent event
On June 11, 2013, Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. changed its corporate name to Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “Company” or “Controladora”) was incorporated in Mexico in accordance with Mexican Corporate laws on October 27, 2005. The Company is domiciled in Mexico, City at Av. Antonio Dovali Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fe, Mexico D.F.
2.  Basis of preparation
The unaudited interim condensed consolidated financial statements for the three months ended March 31, 2013 have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting .
The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Company’s consolidated financial statements as of December 31, 2012.
The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2012, except for the adoption of new standards and interpretations as of January 1, 2013, noted bellow:
As required by IAS 34, the nature and the effect of these changes are disclosed below. In addition, the application of IFRS 12 Disclosure of Interest in Other Entities will result in additional disclosures in the annual consolidated financial statements.
Error correction—Equity transaction costs
During the three months ended March 31, 2013, the Company previously expensed transaction costs of Ps. 25,105 in 2011, related to an equity transaction that was suspended. The transaction costs were erroneously deferred pending a future decision to proceed with the transaction but should have been expensed when it became clear that such equity transaction would not be resumed within a short period of time. However, the Company decided to restate its financial statements as of March 31, 2012 and for the three months period ended March 31, 2013, in order to reflect the expense incurred through fiscal year 2011 in such year.
 
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The effects of the restatement in the unaudited interim condensed consolidated financial statements as of March 31, 2013 and 2012 and for the three months then ended are summarized as follows:
Unaudited Interim Condensed Consolidated Statements of Financial Position at March 31, 2013 and 2012

 	  	March 2013
As originally
issued	 	 	March 2013
Restated	 	
Prepaid expenses and other current assets	  	Ps	. 275,568	  	 	Ps.	 276,862	  	
Current assets	  	 	2,233,050	  	 	 	2,234,344	  	
Deferred income tax	  	 	346,763	  	 	 	340,694	  	
Total assets	  	 	6,032,621	  	 	 	6,027,846	  	
Accumulated losses	  	 	(988,295	) 	 	 	(991,931	) 	
Additional paid-in capital	  	 	(189,772	) 	 	 	(190,850	) 	
Total equity attributable to equity holders of the parent	  	 	1,003,835	  	 	 	999,121	  	
Non-controlling interest	  	 	20,363	  	 	 	20,302	  	
Total equity	  	Ps.	1,024,198	  	 	Ps.	1,019,423	  	

 	  	March 2012
As originally
issued	 	 	March 2012
Restated	 	
Prepaid expenses and other current assets	  	Ps.	259,639	  	 	Ps.	234,534	  	
Current assets	  	 	1,542,151	  	 	 	1,517,046	  	
Total assets	  	 	5,455,028	  	 	 	5,429,923	  	
Accumulated losses	  	 	(1,344,058	) 	 	 	(1,367,824	) 	
Total equity attributable to equity holders of the parent	  	 	563,012	  	 	 	539,246	  	
Non-controlling interest	  	 	69,609	  	 	 	68,270	  	
Total equity	  	Ps.	632,621	  	 	Ps.	607,516	  	
Unaudited Interim Condensed Consolidated Statements of Operations for the three months ended March 31, 2013

 	  	2013
As originally
issued	 	 	2013
Restated	 	
Other operating expenses	  	Ps.	128,626	  	 	Ps.	102,227	  	
Loss before income tax	  	 	(110,312	) 	 	 	(83,913	) 	
Income tax benefit	  	 	25,360	  	 	 	19,291	  	
Net loss	  	 	(84,952	) 	 	 	(64,622	) 	
Losses per share basic and diluted	  	Ps.	(0.000103	) 	 	Ps.	(0.000078	) 	
Unaudited Interim Condensed Consolidated Statements of Changes in Equity Operations for the three months ended March 31, 2013 and 2012

 	  	March 2013
As originally
issued	 	 	March 2013
Restated	 	
Balance at December 31, 2012	  	 	Ps.1,099,772	  	 	 	Ps.1,074,667	  	
Net loss for the period	  	 	(84,952	) 	 	 	(64,622	) 	
Balance at March 31, 2013	  	 	Ps.1,024,198	  	 	 	Ps.1,019,423	  	

 	  	March 2012
As originally
issued	 	 	March 2012
Restated	 	
Balance at December 31, 2011	  	Ps.	884,844	  	 	Ps.	859,739	  	
Net loss for the period	  	 	(265,221	) 	 	 	(265,221	) 	
Balance at March 31, 2012	  	Ps.	632,621	  	 	Ps.	607,516	  	
 
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Unaudited Interim Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2013

 	  	March 2013
As originally
issued	 	 	March 2013
Restated	 	
Operating activities	  				 				
Loss before income tax	  	 	Ps.(110,312	) 	 	 	Ps.(83,913	) 	
Cash flows from operating activities before changes in working capital and provisions	  	 	(54,857	) 	 	 	(28,458	) 	
New Standards
Several other new standards and amendments apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Company or the unaudited interim condensed consolidated financial statements of the Company.
IAS 1 Financial Statement Presentation: Presentation of Items of OCI
The amendments to IAS 1 introduce the grouping of items presented in other comprehensive income (“ OCI” ). Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, upon derecognition or settlement) now have to be presented separately from items that will never be reclassified (for example actuarial gain and losses on defined benefit obligations). The amendment affected the financial statements presentation and had no impact on the Company’s financial position or performance.
IAS 1 Financial Statement Presentation: Comparative Information
The amendment to IAS 1 clarifies the difference between voluntary additional comparative information and the minimum required comparative information. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The additional voluntarily comparative information does not need to be presented in a complete set of financial statements.
An unaudited interim condensed consolidated statement of financial position as of March 31, 2012 is included for comparison purposes.
IFRS 7 Financial Instruments: Disclosures Enhanced and Derecognition Disclosure Requirements
The amendment requires an entity to disclose information about rights to set-off financial instruments and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognized financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation . The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. As the Company is not setting off financial instruments in accordance with IAS 32 and does not have offsetting arrangements, the amendment does not have an impact on the Company.
IFRS 7 requires specific disclosures on fair values. Some of these disclosures are specifically required for financial instruments by IAS 34.16A (j), thereby affecting the unaudited interim condensed consolidated financial statements period. The Company provides these disclosures in Notes 5 and 6.
IFRS 10 Consolidated Financial Statements
IFRS 10 establishes a single control model that applies to all entities including special purpose entities. IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities .
 
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IFRS 10 changes the definition of control such that an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. To meet the definition of control in IFRS 10, all three criteria must be met, including: (i) an investor has power over an investee; (ii) the investor has exposure, or rights, to variable returns from its involvement with the investee; and (iii) the investor has the ability to use its power over the investee to affect the amount of the investor’s returns.
Application of IFRS 10 had no impact on the consolidated investments held by the Company.
IFRS 12 Disclosure of Involvement with Other Entities
IFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. None of these disclosure requirements are applicable for unaudited interim condensed consolidated financial statements, unless significant events and transactions in the interim period require that they are provided. Accordingly, the Company has not made such disclosures.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not impacted the fair value measurements carried out by the Company.
IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required for financial instruments by IAS 34.16A (j), thereby affecting the unaudited interim condensed consolidated financial statements period. The Company provides these disclosures in Notes 5 and 6.
The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The consolidated financial statements for the year ended December 31, 2012 include a description of standards issued but not yet effective.
3.  Convenience translation
U.S. dollar amounts at March 31, 2013 shown in the unaudited interim condensed consolidated financial statements have been included solely for the convenience of the reader and are translated from Mexican pesos at March 31, 2013, divided by an exchange rate of Ps.12.3546 per U.S. dollar, as reported by the Mexican Central Bank (Banco de México) as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on March 31, 2013. Such translation should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollars at this or any other rate. The referred information in U.S. dollars is solely for information purposes and does not represent the amounts are in accordance with IFRS or the equivalent in U.S. dollars in which the transactions were conducted or in which the amounts presented in Mexican pesos can be translated or realized.
4.  Seasonality of operations
The results of operations for any interim period are not necessarily indicative of those for the entire year because the business is subject to seasonal fluctuations. The Company expect demand to be greater during the summer in the northern hemisphere, in December and around Easter, which can fall either in the first or second quarter, compared to the rest of the year. The Company and subsidiaries generally experience their lowest levels of passenger traffic in February, September and October, given their proportion of fixed costs, seasonality can affect their profitability from quarter to quarter. This information is provided to allow for a better understanding of the results, however management has concluded that this does not constitute “highly seasonal” as considered by IAS 34.
 
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5.  Financial instruments
Set out below is an overview of financial instruments by classification, other than cash and short-term deposits, held by the Company at March 31, 2013:

 	  	Loans and
receivables	 	  	Fair value
through other
comprehensive
Income	 	
Financial assets:	  				  				
			
Related parties and other accounts receivable (Notes 9 and 10)	  	Ps.	 482,022	  	  	Ps.	—  	  	

Total current	  	 	482,022	  	  	 	—  	  	

Total	  	Ps.	482,022	  	  	Ps.	—  	  	

									
 	  	Amortized Cost	 	  	Fair value
through other
comprehensive
Income	 	
Financial liabilities:	  				  				
Accounts payable (suppliers) and related parties	  	Ps.	515,101	  	  	Ps.	 —  	  	
Financial debt	  	 	390,663	  	  	 	—  	  	
Derivative financial instruments	  	 	—  	  	  	 	36,331	  	
	  	 	 	 	  	 	 	 	
Total current	  	 	905,764	  	  	 	36,331	  	
	  	 	 	 	  	 	 	 	
Financial debt	  	 	548,329	  	  	 	—  	  	
Derivative financial instruments	  	 	—  	  	  	 	95,476	  	
	  	 	 	 	  	 	 	 	
Total non-current	  	 	548,329	  	  	 	95,476	  	
	  	 	 	 	  	 	 	 	
Total	  	Ps.	 1,454,093	  	  	Ps.	 131,807	  	
	  	 	 	 	  	 	 	 	
Concentration of risk
The Company’s activities are exposed to different financial risks: (i) market risk, (ii) credit risk, and (iii) liquidity risk. The Company’s global risk management program is focused on mitigating the uncertainty in the financial markets and tries to minimize the potential adverse effects on the net earnings. The Company uses derivatives to hedge part of these risks. The Company does not engage in derivatives for speculative purposes.
Market risk
a)  Fuel price risk
The Company is exposed to fuel price risk and the management of fuel price risk strategy aims to provide the Company with protection against sudden and significant increases in fuel prices. Pursuing this objective, the risk management program allows the use of derivative financial instruments available on the over the counter markets with approved counterparties and within approved limits.
For the three months ended March 31, 2013, the Company entered into fuel swap hedges that gave rise to a gain of Ps.7,248. These instruments qualify for hedge accounting and, accordingly, the effects of the hedge are presented as part of fuel cost in the consolidated statements of operation. During the same period, the Company also entered into fuel swaps hedges that are being accounted for as cash flow hedges. These contracts are intended to hedge a percentage of the second and third quarters of 2013 projected fuel consumption. As of March 31, 2013 the fair value of these instruments was Ps.986, recorded in short-term liabilities.
 
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As of December 31, 2012 the Company had outstanding fuel swaps intended to hedge a percentage of the first and second quarters of 2013 projected fuel consumption. As of December 31, 2012 the fair value of these financial instruments was Ps.2,360 and is presented as part of current assets.
For the three months ended March 31, 2012, the Company did not enter into fuel hedges; however as of December 31, 2011, the Company had entered into fuel swaps, intended to hedge approximately 3.9% of its projected fuel requirements for the first quarter of 2012, these instruments gave rise to a gain of Ps. 3,100. All positions matured on January 2012, so accordingly there is no fair value as of March 31, 2012.
The following table includes the notional amounts and strike prices of the derivative financial instruments outstanding as of the end of March 31, 2013:

Position as of March 31, 2013	  	Maturities	 	
Fuel Risk	  	2Q13	 	 	3Q13	 	 	Total	 	
Notional volume in gallons (thousands)*	  	 	2,735	  	 	 	1,314	  	 	 	4,049	  	
Future agreed rate per gallon (U.S. dollars)**	  	US$	2.9867	  	 	US$	2.9816	  	 	US$	2.9851	  	
Total in thousands of Mexican pesos ***	  	Ps.	100,920	  	 	Ps.	48,403	  	 	Ps.	149,323	  	
Approximate percentage of hedge (of expected consumption value)	  	 	8.69	% 	 	 	3.65	% 	 	 	6.00	% 	
 
*	US Gulf Cost Jet 54 as underling asset	
**	Weighted average	
***	Exchange rate at March 31, 2013 was Ps. 12.3546	
b)  Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional currency).
The Company’s exchange exposure relates primarily to amounts payable arising from U.S. dollar denominated expenses and U.S. dollars linked expenses and payments. To mitigate this risk, the Company may use foreign exchange derivative financial instruments.
Most of the Company’s revenue is generated in Mexican pesos, although 26% of its revenues came from operations in the United States of America for the three months ended March 31, 2013 (26% for the year ended December 2012, and 27% for the three months ended at March 31, 2012) and U.S. dollar denominated collections accounted for 32%, 34% and 35% of the Company’s total collections at March 31, 2013, December 31, 2012 and March 31, 2012, respectively. However, its liabilities, particularly those related to aircraft leasing and acquisition, are U.S. dollar denominated.
 
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The Company’s foreign exchange exposure at March 31, 2013, December 31, 2012 and March 31, 2012 is as set forth below:

 	  	Thousands of U.S. dollars at	 	
 	  	March 31,
2013	 	  	December 31,
2012	 	  	March 31,
2012	 	
Assets:	  				  				  				
Aircraft maintenance deposits paid to lessors	  	US$	 169,601	  	  	US$	 158,568	  	  	US$	 132,452	  	
Pre-delivery payments*	  	 	56,426	  	  	 	69,940	  	  	 	93,382	  	
Cash and cash equivalents	  	 	31,318	  	  	 	46,965	  	  	 	25,465	  	
Deposits for rental of flight equipment	  	 	26,236	  	  	 	22,573	  	  	 	25,309	  	
Collateral of derivative financial instruments	  	 	5,611	  	  	 	6,272	  	  	 	6,152	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	 	289,192	  	  	 	304,318	  	  	 	282,760	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Liabilities:	  				  				  				
Financial debt	  	 	53,512	  	  	 	68,667	  	  	 	85,893	  	
Foreign suppliers	  	 	27,412	  	  	 	27,425	  	  	 	19,251	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total liabilities	  	 	80,924	  	  	 	96,092	  	  	 	105,144	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net foreign currency position	  	US$	208,268	  	  	US$	208,226	  	  	US$	177,616	  	

*	These assets are included as part of rotable, spare parts, furniture and equipment, and therefore are not revalued.	

 	  	Thousands of U.S. dollars at	 	
 	  	March 31,
2013	 	  	December 31,
2012	 	  	March 31,
2012	 	
Off-balance sheet transactions exposure:	  				  				  				
Aircraft operating leases	  	US$	878,218	  	  	US$	817,622	  	  	US$	662,448	  	
Aircraft and engines commitments	  	 	515,446	  	  	 	521,959	  	  	 	557,324	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total foreign currency	  	US$	 1,393,664	  	  	US$	 1,339,581	  	  	US$	 1,219,772	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
For the three months ended March 31, 2013 and 2012, the Company did not enter into exchange rate derivatives financial instruments, and accordingly, there is no fair value as of March 31, 2013 and 2012. Also, during the year ended on December 31, 2012, the Company did not enter into exchange rate derivatives financial instruments.
c)  Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations and flight equipment operating lease agreements with floating interest rates.
The Company’s results are affected by fluctuations in market interest rates due to the impact that such changes may have on lease payments indexed to London Inter Bank Offered Rate (“LIBOR”). The Company uses derivative financial instruments to reduce its exposure to fluctuations in market interest rates and accounts for these instruments as an accounting hedge. In general, when a derivative can be defined within the terms and cash flows of a leasing agreement, this may be designed as a “cash flow hedge” and the effective portion of fair value variations are recorded in equity until the date the cash flow of the hedged lease payment becomes due.
 
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As of March 31, 2013, December 2012 and March 2012, the Company had outstanding hedging contracts in the form of interest rate swaps whose notional amount was US$70,000 and their fair values were Ps.130,821, Ps.147,713 and Ps.143,012, respectively, recorded in liabilities. For the three months ended March 31, 2013 and 2012 the reported loss on the instruments was Ps.8,467 and Ps.9,215, respectively, which was recognized as part of rental expense in the consolidated statement of operations.
Liquidity risk
Liquidity risk represents the risk that the Company has insufficient funds to meet its obligations.
Because of the cyclical nature of the business, the operations, and its investment and financing needs related to the acquisition of new aircraft and renewal of its fleet, the Company requires liquid funds to meet its payment obligations.
The Company attempts to manage its cash and cash equivalents and its financial assets, matching the term of investments with those of its obligations. Its policy is that the average term of its investments may not exceed the average term of its obligations. Its cash and cash equivalents position is invested in highly-liquid short-term instruments through financial entities.
The Company has future obligations related to maturities of bank borrowings and derivative contracts. The Company’s off-balance sheet exposure represents the future obligations related to operating lease contracts and aircraft purchase contracts.
The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value:

 	  	March 31, 2013	 	
 	  	Within one year	 	  	One to five years	 	  	Total	 	
Interest-bearing borrowings:	  				  				  				
Pre-delivery payments facilities	  	Ps.	368,442	  	  	Ps.	164,396	  	  	Ps.	532,838	  	
Working capital	  	 	—  	  	  	 	383,932	  	  	 	383,932	  	
Derivative financial instruments:	  				  				  				
Fuel swaps	  	 	986	  	  	 	—  	  	  	 	986	  	
Interest rate swaps	  	 	35,345	  	  	 	95,476	  	  	 	130,821	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	Ps.	404,773	  	  	Ps.	643,804	  	  	Ps.	1,048,577	  	

													
 	  	December 31, 2012	 	
 	  	Within one year	 	 	One to five years	 	  	Total	 	
Interest-bearing borrowings:	  				 				  				
Pre-delivery payments facilities	  	Ps.	517,320	  	 	Ps.	242,053	  	  	Ps.	759,373	  	
Working capital	  	 	—  	  	 	 	390,487	  	  	 	390,487	  	
Derivative financial instruments:	  				 				  				
Fuel swaps	  	 	(2,360	) 	 	 	—  	  	  	 	(2,360	) 	
Interest rate swaps	  	 	37,011	  	 	 	110,702	  	  	 	147,713	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	Ps.	551,971	  	 	Ps.	743,242	  	  	Ps.	1,295,213	  	

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 	  	March 31, 2012	 	
 	  	Within one year	 	  	One to five years	 	  	Total	 	
Interest-bearing borrowings:	  				  				  				
Pre-delivery payments facilities	  	Ps.	523,770	  	  	Ps.	443,062	  	  	Ps.	966,832	  	
Working capital	  	 	—  	  	  	 	388,875	  	  	 	388,875	  	
Derivative financial instruments:	  				  				  				
Fuel swaps	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Interest rate swaps	  	 	27,715	  	  	 	115,297	  	  	 	143,012	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	Ps.	551,485	  	  	Ps.	947,234	  	  	Ps.	1,498,719	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Credit risk
Credit risk is the risk that any counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Financial instruments that expose the Company to credit risk involve mainly cash equivalents and accounts receivable. Credit risk on cash equivalents relate to amounts invested with major financial institutions.
Credit risk on accounts receivable relates primarily to amounts receivable from the major international credit card companies.
The Company has a high receivable turnover; hence management believes credit risk is minimal due to the nature of its businesses, which have a large portion of their sales settled in cash.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
Some of the outstanding derivative financial instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. The amount of such credit exposure is generally the unrealized gain, if any, in such contracts. To manage credit risk, the Company selects counterparties based on credit assessments, limits overall exposure to any single counterparty and monitors the market position with each counterparty. The Company does not purchase or hold derivative financial instruments for trading purposes.
Capital management
Management believes that the resources available to the Company are sufficient for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the 2013 fiscal year.
The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios to support its business and maximize shareholder’s value.
No changes were made in the objectives, policies or processes for managing capital during the three months ended March 31, 2013 and 2012.
The Company is not subject to any externally imposed capital requirement, other than the legal reserve.
 
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6.  Fair value measurements and valuation techniques
Set out below is a comparison of the carrying amounts and fair values of financial instruments as at March 31, 2013:

 	  	Carrying
amount	 	  	Fair Value	 	
Financial liabilities:	  				  				
Financial debt	  	Ps.	 390,663	  	  	Ps.	 395,352	  	
Derivative financial instruments	  	 	36,331	  	  	 	36,331	  	
	  	 	 	 	  	 	 	 	
Total current	  	 	426,994	  	  	 	431,683	  	
Financial debt	  	 	548,329	  	  	 	611,487	  	
Derivative financial instruments	  	 	95,476	  	  	 	95,476	  	
	  	 	 	 	  	 	 	 	
Total non-current	  	 	643,805	  	  	 	706,963	  	
	  	 	 	 	  	 	 	 	
Total	  	Ps.	 1,070,799	  	  	Ps.	 1,138,646	  	
	  	 	 	 	  	 	 	 	
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy that requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
 
 	•	 	Level 1 – Quoted prices in active markets for identical assets or liabilities.	
 
 	•	 	Level 2 – Observable inputs other than quoted priced included in Level 1. The Company values assets and liabilities included in this level using dealer and broker quotations, bid prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.	
 
 	•	 	Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.	
For the Company, the only assets and liabilities recognized at fair value on a recurring basis are the derivative financial instruments.
The following table summarizes the fair value measurements at March 31, 2013:

 	  	Level 1	 	  	Level 2	 	 	Level 3	 	  	Total	 	
Liabilities	  				  				 				  				
Financial instruments Liabilities	  	 	Ps. —  	  	  	 	Ps.(131,807	) 	 	 	Ps. —  	  	  	 	Ps.(131,807	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Net	  	 	Ps. —  	  	  	 	Ps.(131,807	) 	 	 	Ps. —  	  	  	 	Ps.(131,807	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
The following table summarizes the fair value measurements at December 31, 2012:

 	  	Level 1	 	  	Level 2	 	 	Level 3	 	  	Total	 	
Assets	  				  				 				  				
Financial instruments assets	  	 	Ps. —  	  	  	Ps.	 2,360	  	 	Ps.	 —  	  	  	Ps.	 2,360	  	
Liabilities	  				  				 				  				
Financial instruments liabilities	  	 	—  	  	  	 	147,713	  	 	 	—  	  	  	 	147,713	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Net	  	 	Ps. —  	  	  	Ps.	(145,353	) 	 	Ps.	—  	  	  	Ps.	(145,353	) 	

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The following table summarizes the fair value measurements at March 31, 2012:

 	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Assets	  				  				  				  				
Financial instruments assets	  	Ps.	—  	  	  	Ps.	—  	  	  	 	Ps.—  	  	  	Ps.	—  	  	
Liabilities	  				  				  				  				
Financial instruments liabilities	  	 	—  	  	  	 	(143,012)	  	  	 	—  	  	  	 	(143,012)	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net	  	Ps.	—  	  	  	Ps	.(143,012)	  	  	Ps.	—  	  	  	Ps.	(143,012)	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
During the three month period ended March 31, 2013, there were no transfers between level 2 and level 1 fair value measurements, and no transfers into or out of level 3 fair value measurements. As of March 31, 2013 the fair value of the Company´s financial instruments decreased Ps.13,546 in comparison with December 31, 2012. The fair value decrease was recorded in other comprehensive income.
7.  Financial assets and liabilities
At March 31, 2013, the Company’s financial assets are represented by cash and cash equivalents and trade and other accounts receivable, with carrying amounts that approximate their fair value.
a) Financial debt
At March 31, 2013, December 31, 2012 and March 31, 2012, the Company’s short- and long-term debt consists of the following:

 	  	At March 31,
2013	 	  	At December 31,
2012 	 	  	At March 31,
2012 	 	
I.       Revolving line of credit with Jackson Square Aviation (“JSA”), in U.S. dollars, to finance pre-delivery payments, maturing on July 10, 2012, bearing annual interest rate at the three-month LIBOR rate plus 5 percentage points.	  	Ps.	—  	  	  	Ps.	—  	  	  	Ps.	249,421	  	
II.     Revolving line of credit with Banco Santander (“México”), S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on December 1, 2014, bearing annual interest rate at the three-month LIBOR rate plus 2.65 percentage points.	  	 	532,838	  	  	 	759,373	  	  	 	443,062	  	
III.    Revolving line of credit with General Electric Capital Aviation Services (“GECAS”), in U.S. dollars, to finance pre-delivery payments, maturing on November 26, 2012, bearing annual interest at the one-month LIBOR rate plus 5 percentage points.	  	 	—  	  	  	 	—  	  	  	 	274,349	  	
IV.   Loan agreement with Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa (“Inbursa”), in Mexican pesos, for working capital. Such loan matures on May 12, 2015 and 2016 (50% of the outstanding balance at each date, respectively) and bears interest at the Mexican interbank rate of equilibrium (“TIIE”), plus 10.0 percentage points, which increased by 2.5 percentage points from May 14, 2012.	  	 	257,081	  	  	 	257,081	  	  	 	257,081	  	
V.     Loan agreement with related party Pasprot, S.A. de C.V. (“Pasprot”), in Mexican pesos, for working capital. Such loan matures on May 12, 2015 and 2016 (50% of the outstanding balance at each date, respectively) and bears interest at TIIE, plus 10.0 percentage points, which increased by 2.5 percentage points from May 14, 2012.	  	 	3,305	  	  	 	3,305	  	  	 	3,305	  	
 
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 	  	At March 31,
2013	 	  	At December 31,
2012 	 	  	At March 31,
2012 	 	
VI.   Loan agreement with International Finance Corporation (“IFC”), tranche C, in U.S. dollars, for working capital, maturing on June 15, 2014, bearing annual interest at the six-month LIBOR plus 6 percentage points.	  	 	123,546	  	  	 	130,101	  	  	 	128,489	  	
VII. Accrued interest	  	 	22,222	  	  	 	10,063	  	  	 	24,378	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	 	938,992	  	  	 	1,159,923	  	  	 	1,380,085	  	
Less: Short-term maturities	  	 	390,663	  	  	 	527,383	  	  	 	573,845	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Long-term total	  	Ps.	548,329	  	  	Ps.	632,540	  	  	Ps.	806,240	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The following table provides a summary of the Company’s principal payments of short and long-term debt obligations and accrued interest at March 31, 2013:

 	  	At March 2014	 	  	At March 2015	 	  	At March 2016	 	  	Thereafter
Total	 	
Local currency:	  				  				  				  				
Inbursa loan	  	Ps.	17,275	  	  	Ps.	—  	  	  	Ps.	257,081	  	  	Ps.	274,356	  	
Pasprot loan	  	 	222	  	  	 	—  	  	  	 	3,305	  	  	 	3,527	  	
					
Foreign currency:	  				  				  				  				
IFC tranche C	  	 	2,325	  	  	 	*123,546	  	  	 	—  	  	  	 	125,871	  	
Santander/Bancomext	  	 	370,841	  	  	 	164,397	  	  	 	—  	  	  	 	535,238	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	Ps.	390,663	  	  	Ps.	287,943	  	  	Ps.	260,386	  	  	Ps.	938,992	  	

*	IFC tranche C is considered to be paid in a single installment on June 15, 2014 (Ps.123,546).	
The Inbursa and Pasprot loan agreements have an option of early partial or total prepayment after two years of their start day (May 12, 2009) with a prepayment premium equivalent to the higher of: (i) the present value of the future interests payable, or (ii) 15% of the amount to be prepaid. Upon an initial public offering (“IPO”), the Company has the option to prepay the loans with a liquidation premium of 15%, 20% or 25% if the IPO is effective within the first three years, in the fourth year, or anytime thereafter, respectively. If the Company does not take the option to prepay, Inbursa and Pasprot then will have the option to convert the principal amount of the financial debt into shares with a discount of 15%, 20% or 25% if the IPO is effective within the first three years, in the fourth year, or anytime thereafter, respectively.
The Inbursa loan and Pasprot loan agreements limit the Company’s ability to finance purchases under the Company’s purchase agreement with Airbus up to 44 aircraft and related engines, and to incur working capital debt for up to US$25 million, unless certain financial ratios are met.
The IFC loan agreement, tranche C, limits the Company’s ability to finance aircraft operating leases up to 51 additional aircraft and related engines than the ones operated by the Company at December 31, 2012, and to incur working capital debt for up to US$50 million, unless certain financial ratios are met.
In addition, some of these loan agreements provide for certain covenants, including limits to the ability to, among others, declare and pay dividends, create liens, reduce the capital beyond certain threshold, enter into certain derivatives transactions and dispose of certain assets.
At March 31, 2013, December 31, 2012 and March 2012, the Company was in compliance with the covenants under the above-mentioned loan agreements.
In addition, the loan agreements with Inbursa and Pasprot and the IFC loan, tranche C, provide for a debt basket to incur debt and limit the ability to incur debt above such debt basket unless the Company complies with certain
 
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financial ratios. At March 31, 2013, December 2012 and March 31, 2012, the Company was not required to comply with these ratios since the Company had not incurred debt above the provided debt basket.
At March 31, 2013 and 2012, the Company had available credit lines totaling Ps.1,348,971 and Ps.2,020,728, of which Ps.1,158,739 and Ps.1,900,720 were related to financial debt and Ps.190,232 and Ps.120,009, were related to letters of credit, respectively (Ps.247,623 and Ps.550,538 were undisbursed at March in 2013 and 2012, respectively). At December 31, 2012, the Company had available credit lines totaling Ps.1,403,506, of which Ps.1,206,403 were related to financial debt and Ps.197,103 were related to letters of credit (Ps.59,274 were undisbursed).
8.  Cash and cash equivalents
For the purpose of the unaudited interim condensed consolidated statements of cash flows, cash and cash equivalents at March 31, 2013, December 31, 2012 and March 31, 2012 are comprised of the following:

 	  	At March 31,
2013	 	  	At December 31,
2012 	 	  	At March 31,
2012 	 	
Cash on hand	  	Ps.	3,045	  	  	Ps.	3,101	  	  	Ps.	2,964	  	
Cash in banks	  	 	22,755	  	  	 	42,559	  	  	 	4,600	  	
Short-term investments	  	 	900,098	  	  	 	776,416	  	  	 	679,519	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total cash and cash equivalents	  	Ps.	925,898	  	  	Ps.	822,076	  	  	Ps.	687,083	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
9.  Related parties
a) The following table provides the balances with related parties at March 31, 2013, December 31, 2012 and March 31, 2012:

 	 	Type of transactions	 	Country of
origin	 	At March 31,
2013	 	 	At December 31,
2012 	 	 	At March 31,
2012 	 	 	Terms	 	
Due from:	 		 		 				 				 				 				
ARSA Asesoría Integral Profesional, S.A. de C.V.	 	Insurance passenger commissions	 	Mexico	 	Ps.	4,957	  	 	Ps.	2,169	  	 	Ps.	1,491	  	 	30 days	 	  	
TACA International Airlines, S.A.	 	Maintenance and pilot training	 	El Salvador	 	 	6	  	 	 	—  	  	 	 	—  	  	 	30 days	 	  	
Arrendadora de Vehículo Alfa, S.A.P.I. de C.V.	 	Transporting services commissions	 	Mexico	 	 	—  	  	 	 	—  	  	 	 	28	  	 	30 days	 	  	
	 		 		 				 				 				 				
Marketing Modelo, S.A. de C.V.	 	Advertising	 	Mexico	 	 	—  	  	 	 	1,450	  	 	 	625	  	 	30 days	 	  	
	 		 		 	 	 	 	 	 	 	 	 	 	 	 	 				
	 		 		 	Ps.	4,963	  	 	Ps.	3,619	  	 	Ps.	2,144	  	 				
	 		 		 	 	 	 	 	 	 	 	 	 	 	 	 				
Due to:	 		 		 				 				 				 				
Technical and Training Services, S. A. de C. V.	 	Aircraft components supplies	 	El Salvador	 	Ps.	—  	  	 	Ps.	—  	  	 	 	Ps. 2	  	 	30 days	 	  	
Aeromantenimiento, S.A.	 	Aircraft and engines maintenance	 	El Salvador	 	 	7,439	  	 	 	3,389	  	 	 	5,292	  	 	30 days	 	  	
TACA International Airlines, S.A.	 	Maintenance/pilot training	 	El Salvador	 	 	—  	  	 	 	3	  	 	 	15	  	 	30 days	 	  	
Expediente, S.A. de C.V.	 	Professional fees	 	Mexico	 	 	—  	  	 	 	7	  	 	 	336	  	 	30 days	 	  	
	 		 		 	 	 	 	 	 	 	 	 	 	 	 	 				
	 		 		 	Ps.	7,439	  	 	Ps.	3,399	  	 	Ps.	5,645	  	 				
	 		 		 	 	 	 	 	 	 	 	 	 	 	 	 				
For the year ended December 31, 2012 and for the three months ended March 31, 2013 and 2012, the Company did not recognize any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
 
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b) The following table provides the total amount of transactions that have been entered into with related parties during the three months ended March 31, 2013 and 2012:

Related party transactions 	  	Country of origin 	  	2013	 	  	2012 	 	
Revenues:	  		  				  				
Other commissions	  	Mexico	  	Ps.	14,289	  	  	Ps.	8,100	  	
Advertising	  	Mexico	  	 	—  	  	  	 	625	  	
Other	  	Mexico	  	 	6	  	  	 	—  	  	
Transporting services commissions	  	Mexico	  	 	—  	  	  	 	26	  	
Expenses:	  		  				  				
Maintenance	  	El Salvador	  	Ps.	14,455	  	  	Ps.	29,151	  	
Other	  	Mexico/El Salvador	  	 	213	  	  	 	305	  	
c) For the three months ended March 31, 2013 and 2012, all of the Company’s senior managers received an aggregate cash compensation and short term benefits by Ps.2,481 and Ps.2,184, respectively.
During the three months ended March 31, 2013 and 2012, the chairman and the independent members of the Company’s board of directors received an aggregate compensation of approximately Ps.280 and Ps.1,550, respectively, and the rest of the directors received no compensation.
10.  Other accounts receivable, net
An analysis of other accounts receivable at March 31, 2013, December 31, 2012 and March 31, 2012 is detailed below:

 	  	At March 31,
2013	 	 	At December 31,
2012 	 	 	At March 31,
2012 	 	
Short-term:	  				 				 				
Credit cards	  	Ps.	261,101	  	 	Ps.	91,411	  	 	Ps.	129,809	  	
Cargo clients	  	 	68,023	  	 	 	66,863	  	 	 	28,642	  	
Travel agencies	  	 	45,319	  	 	 	35,331	  	 	 	31,428	  	
Credit notes from suppliers	  	 	9,990	  	 	 	21,151	  	 	 	—  	  	
Other points of sales	  	 	16,511	  	 	 	19,057	  	 	 	6,706	  	
Employees	  	 	3,905	  	 	 	4,211	  	 	 	9,363	  	
Other accounts receivable	  	 	96,373	  	 	 	21,029	  	 	 	24,610	  	
Allowance for doubtful accounts	  	 	(24,163	)  	 	 	(21,722	) 	 	 	(26,162	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
	  	Ps.	477,059	  	 	Ps.	237,331	  	 	Ps.	204,396	  	

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11.  Rotable spare parts, furniture and equipment, net
a) The detail and movement of the different categories of rotable spare parts, furniture and equipment are shown below:

 	 	Gross value	 	 	Accumulated depreciation	 	 	Net value	 	
 	 	At
March  31,
2013	 	 	At
December 31,
2012	 	 	At
March 31,
2012	 	 	At
March  31,
2013	 	 	At
December 31,
2012	 	 	At
March 31,
2012	 	 	At
March  31,
2013	 	 	At
December 31,
2012	 	 	At
March 31,
2012	 	
Aircraft parts and rotable spare parts	 	Ps.	159,550	  	 	Ps.	161,630	  	 	Ps.	295,858	  	 	Ps.	(51,621)	  	 	Ps.	(53,069)	  	 	Ps.	(100,396)	  	 	Ps.	107,929	  	 	Ps.	108,561	  	 	Ps.	195,462	  	
Constructions and improvements	 	 	59,505	  	 	 	47,973	  	 	 	77,383	  	 	 	(30,286	) 	 	 	(27,616	) 	 	 	(37,248	) 	 	 	29,219	  	 	 	20,357	  	 	 	40,135	  	
Standardization	 	 	40,415	  	 	 	33,682	  	 	 	23,022	  	 	 	(24,171	) 	 	 	(23,370	) 	 	 	(21,061	) 	 	 	16,244	  	 	 	10,312	  	 	 	1,961	  	
Computer equipment	 	 	21,072	  	 	 	20,794	  	 	 	16,147	  	 	 	(15,347	) 	 	 	(14,710	) 	 	 	(13,282	) 	 	 	5,725	  	 	 	6,084	  	 	 	2,865	  	
Office furniture and equipment	 	 	25,454	  	 	 	24,372	  	 	 	18,286	  	 	 	(5,738	) 	 	 	(4,883	) 	 	 	(5,908	) 	 	 	19,716	  	 	 	19,489	  	 	 	12,378	  	
Electric power equipment	 	 	14,705	  	 	 	12,789	  	 	 	10,494	  	 	 	(4,893	) 	 	 	(4,448	) 	 	 	(3,743	) 	 	 	9,812	  	 	 	8,341	  	 	 	6,751	  	
Motorized transport equipment platform	 	 	4,969	  	 	 	4,969	  	 	 	4,950	  	 	 	(4,507	) 	 	 	(4,429	) 	 	 	(4,465	) 	 	 	462	  	 	 	540	  	 	 	485	  	
Communications equipment	 	 	7,030	  	 	 	6,621	  	 	 	5,610	  	 	 	(2,647	) 	 	 	(2,473	) 	 	 	(2,012	) 	 	 	4,383	  	 	 	4,148	  	 	 	3,598	  	
Workshop machinery and equipment	 	 	3,301	  	 	 	3,302	  	 	 	2,000	  	 	 	(1,071	) 	 	 	(991	) 	 	 	(790	) 	 	 	2,230	  	 	 	2,311	  	 	 	1,210	  	
Service carts on board	 	 	3,629	  	 	 	3,629	  	 	 	2,194	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	3,629	  	 	 	3,629	  	 	 	2,194	  	
Reserve for obsolescence	 	 	(3,359	) 	 	 	(619	) 	 	 	(294	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(3,359	) 	 	 	(619	) 	 	 	(294	) 	
Pre-delivery payments	 	 	743,173	  	 	 	861,052	  	 	 	1,175,587	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	743,173	  	 	 	861,052	  	 	 	1,175,587	  	
Workshop tools	 	 	10,395	  	 	 	10,395	  	 	 	10,395	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10,395	  	 	 	10,395	  	 	 	10,395	  	
Construction and improvements in process	 	 	5,426	  	 	 	13,639	  	 	 	6,604	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5,426	  	 	 	13,639	  	 	 	6,604	  	
Leasehold improvements to flight equipment	 	 	359,227	  	 	 	292,463	  	 	 	186,830	  	 	 	(221,528	) 	 	 	(165,383	) 	 	 	(63,231	) 	 	 	137,699	  	 	 	127,080	  	 	 	123,599	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	Ps.	1,454,492	  	 	Ps.	1,496,691	  	 	Ps.	1,835,066	  	 	Ps.	(361,809)	  	 	Ps.	(301,372)	  	 	Ps.	(252,136)	  	 	Ps.	1,092,683	  	 	Ps.	1,195,319	  	 	Ps.	1,582,930	  	

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b) During the three months ended March 31, 2013 and 2012 the Company acquired rotable spare parts, furniture and equipment with a cost of Ps.227,532 and Ps.208,400, respectively.
c) Depreciation expense for the three months ended March 31, 2013 and 2012 was Ps.73,789 and Ps.36,658, respectively. This amount was recognized as a component of operating expenses in the unaudited interim condensed consolidated statements of operations.
The Company entered into an agreement with Airbus S.A.S. (“Airbus”) and IAE International Aero Engines AG (“IAE”) for the purchase of aircraft and engines, respectively. Under such agreement and prior to the delivery of each aircraft and spare engines, the Company agrees to make pre-delivery payments, which are calculated based on the price of each aircraft and engines, and following a formula established for such purpose in the agreement.
During the three months ended March 2013 and 2012, the amounts paid for aircraft pre-delivery payments were Ps.143,821 (US$11.2 million) and Ps.177,072 (US$13.7 million), respectively.
During the year ended December 31, 2012, the amount paid for aircraft pre-delivery payments was Ps.633,226 (US$44.25 million).
d) On August 27, 2012, the Company entered into a total support agreement with Lufthansa Technik AG (“LHT”) for a six year term. As part of the total support agreement, the Company received credit notes of Ps.46,461 (US$3.5 million), which are being amortized on a straight line basis, prospectively during the lease term.
During the three months ended March 31, 2013, the Company amortized a corresponding benefit from these credit notes of Ps.2,323 in the unaudited interim condensed consolidated statement of operations. As of December 31, 2012, the Company amortized a corresponding benefit from these credit notes of Ps.3,485 in the consolidated statement of operations
As of December 31, 2012 the Company recorded an account receivable of Ps.21,151 for the unused portion of the credit notes. During the three months ended March 31, 2013, the Company applied Ps.9,922 to outstanding LHT invoices.
The total support agreement also included a sale and leaseback transaction of certain components. As of December 31, 2012, some of these components were not sold and therefore were classified as held for sale by an amount of Ps.12,307. During the three months ended March 31, 2013, the Company sold components in an amount of Ps.6,697.
12.  Intangibles
a) Software amortization expense for the three months ended March 31, 2013 and 2012, was Ps.7,456 and Ps.5,020, respectively. These amounts were recognized in operating expenses in the unaudited interim condensed consolidated statement of operations.
b) In February 2009, the Company through its subsidiary, Concesionaria, signed a distribution agreement with Southwest Airlines Co. (SW) under which the customers of SW are able to purchase airplane tickets to the Company’s different destinations both in Mexico and the United States of America through SW’s website at www.southwest.com . This agreement came into effect on April 28, 2009, under which, the Company agreed to pay SW a commission amount for all Volaris ticketed sales purchased through SW’s website.
Additionally, in March 2009, the Company through its subsidiary, Concesionaria signed a code share agreement through which the customers of both airlines may fly to a wide range of destinations both in Mexico and the United States.
 
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As a result of changes in the Company’s and SW’s business strategy, both parties made the decision to end the business alliance on February 22, 2013, without any penalty. Customers holding tickets for future travel will be able to contact SW and the Company for assistance through August 9, 2013.
13.  Prepaid expenses and other current assets
An analysis of prepaid expenses and other current assets at March 31, 2013, December 31, 2012 and March 31, 2012, is as follows:

 	  	At March 31,
2013	 	  	At December 31,
2012	 	  	At March 31,
2012	 	
Short-term:	  				  				  				
Prepaid major maintenance	  	Ps.	127,045	  	  	Ps.	128,201	  	  	Ps.	71,600	  	
Prepaid aircraft rent	  	 	61,323	  	  	 	64,733	  	  	 	56,930	  	
Transaction costs on the issuance of equity	  	 	5,725	  	  	 	6,398	  	  	 	597	  	
Prepaid insurance	  	 	28,484	  	  	 	26,615	  	  	 	22,677	  	
Sales commission to travel agencies for unused tickets	  	 	20,808	  	  	 	25,006	  	  	 	36,177	  	
Prepaid expenses for constructions of aircraft and engines	  	 	10,098	  	  	 	7,747	  	  	 	11,888	  	
Advances to suppliers	  	 	20,332	  	  	 	6,086	  	  	 	22,137	  	
Loss on sale and leaseback transactions to be amortized	  	 	3,047	  	  	 	3,047	  	  	 	3,047	  	
Others	  	 	—  	  	  	 	41	  	  	 	9,481	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	276,862	  	  	Ps.	267,874	  	  	Ps.	234,534	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
14.  Guarantee deposits
An analysis of this caption at March 31, 2013, December 31, 2012 and March 31, 2012 is as follows:

 	  	At March 31,
2013	 	  	At December 31,
2012	 	  	At March 31,
2012	 	
Current asset:	  				  				  				
Aircraft maintenance deposits paid to lessors	  	Ps.	243,749	  	  	Ps.	202,478	  	  	Ps.	198,002	  	
Other guarantee deposits	  	 	40,386	  	  	 	35,764	  	  	 	5,813	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	284,135	  	  	Ps.	238,242	  	  	Ps.	203,815	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Non-current asset:	  				  				  				
Aircraft maintenance deposits paid to lessors	  	Ps.	1,851,610	  	  	Ps.	1,860,507	  	  	Ps.	1,503,867	  	
Deposits for rental of flight equipment	  	 	323,959	  	  	 	293,660	  	  	 	325,233	  	
Collateral of derivative financial instruments	  	 	69,317	  	  	 	81,597	  	  	 	79,044	  	
Other guarantee deposits	  	 	7,922	  	  	 	8,901	  	  	 	6,787	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	 	2,252,808	  	  	 	2,244,665	  	  	 	1,914,931	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	2,536,943	  	  	Ps.	2,482,907	  	  	Ps.	2,118,746	  	

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15.  Operating leases
a) Composition of the fleet

Aircraft
  Type	  	Model	 	  	At March 31,
2013	 	  	At December 31,
2012	 	  	At March 31,
2012	 	
A319	  	 	132	  	  	 	11	  	  	 	11	  	  	 	11	  	
A319	  	 	133	  	  	 	13	  	  	 	13	  	  	 	13	  	
A320	  	 	233	  	  	 	15	  	  	 	13	  	  	 	7	  	
A320	  	 	232	  	  	 	4	  	  	 	4	  	  	 	4	  	
	  				  	 	 	 	  	 	 	 	  	 	 	 	
	  				  	 	43	  	  	 	41	  	  	 	35	  	
	  				  	 	 	 	  	 	 	 	  	 	 	 	
The Company expects to take delivery of 3 Airbus A320 aircraft in the remainder of 2013 based on the terms of the original Airbus purchase agreement.
Provided below is an analysis of future minimum aircraft rent payments in U.S. dollars and its equivalent to Mexican pesos:

 	  	Operating leases in
U.S. dollars	 	  	Operating leases of
equivalent in
Mexican pesos	 	
April - December 2013	  	US$	107,283	  	  	Ps.	1,325,441	  	
2014	  	 	135,805	  	  	 	1,677,818	  	
2015	  	 	123,452	  	  	 	1,525,195	  	
2016	  	 	111,936	  	  	 	1,382,920	  	
2017	  	 	84,876	  	  	 	1,048,609	  	
2018 and thereafter	  	 	314,866	  	  	 	3,890,043	  	
	  	 	 	 	  	 	 	 	
Total	  	US$	878,218	  	  	Ps.	10,850,026	  	
	  	 	 	 	  	 	 	 	
Such amounts are determined based on the stipulated rent contained within the agreements considering renewals and on the prevailing exchange and interest rates at March 31, 2013.
Aircraft and engines rent expense charged to results of operations for the three months ended March 31, 2013 and 2012 is as follows:

 	  	2013	 	  	2012	 	
Aircraft and engines	  	Ps	.514,297	  	  	Ps.	445,508	  	
Real estate:	  				  				
Airports facilities	  	 	9,493	  	  	 	11,435	  	
Offices, maintenance warehouse and hangar	  	 	5,705	  	  	 	3,779	  	
	  	 	 	 	  	 	 	 	
Total rental expenses on real estate	  	 	15,198	  	  	 	15,214	  	
	  	 	 	 	  	 	 	 	
Total cost of operating leases	  	Ps.	529,495	  	  	Ps.	460,722	  	
	  	 	 	 	  	 	 	 	
b) During the year ended December 31, 2011, the Company extended the lease terms of six aircraft lease agreements, which made available to the Company maintenance deposits that were recognized in prior periods in the consolidated statement of operations as supplemental rent of Ps.163,024. As of December 31, 2011, this lease extension was recognized as a guarantee deposit and a deferred liability in the consolidated statement of financial position at the time of lease extension.
The deferred liability is included in the caption other liabilities and is being amortized on a straight line basis prospectively over the remaining revised lease term. For the three months ended March 31, 2013 and 2012, the
 
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Company amortized Ps.5,813. This amortization was recognized as a reduction of rent expenses in the unaudited interim condensed consolidated statement of operations.
c) During the year ended December 31, 2011, the Company entered into sale and leaseback transactions, which resulted in a loss of Ps.30,706. This loss was deferred on the consolidated statements of financial position and is being amortized over the contractual lease term. As of March 31, 2013 and 2012, the current portion amounts to Ps.3,047 and Ps.3,047, respectively, which are recorded in the caption of prepaid expenses and other current assets, and the non-current portion amounts to Ps.26,899 and Ps.29,946, respectively, which are recorded in the caption of other assets.
For the three months ended March 31, 2013 and 2012, the Company amortized a loss of Ps.760 for each period.
d) During the three months ended March 31, 2013 and 2012, the Company entered into sale and leaseback transactions, which resulted in a gain of Ps.23,970 and Ps.17,239, respectively. This gain was recorded in the caption other income in the unaudited interim condensed statement of operations.
e) For the three months ended March 31, 2013 and 2012, the Company expensed as supplemental rent Ps.4,037 and Ps.6,471, respectively.
f) For the three months ended March 31, 2013 and 2012, the Company expensed as contingent rent Ps.26,151 and Ps.21,027, respectively.
16.  Accrued liabilities
An analysis of accrued liabilities at March 31, 2013, December 31, 2012 and March 31, 2012 is as follows:

 	  	At March 31,
2013	 	  	At December 31,
2012	 	  	At March 31,
2012	 	
Fuel and traffic expenses	  	Ps.	465,757	  	  	Ps.	488,829	  	  	Ps.	342,534	  	
Maintenance and aircraft parts expenses	  	 	41,496	  	  	 	18,719	  	  	 	45,815	  	
Maintenance reserves	  	 	65,652	  	  	 	73,857	  	  	 	54,729	  	
Information and communication expenses	  	 	52,934	  	  	 	39,578	  	  	 	45,556	  	
Sale, marketing and distribution expenses	  	 	85,403	  	  	 	32,410	  	  	 	95,753	  	
Salaries, short term benefits payable	  	 	33,294	  	  	 	21,516	  	  	 	28,006	  	
Administrative expenses	  	 	19,605	  	  	 	16,457	  	  	 	10,290	  	
Employee profit sharing	  	 	9,204	  	  	 	7,230	  	  	 	6,768	  	
Others	  	 	63,855	  	  	 	67,196	  	  	 	79,121	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	Ps.	837,200	  	  	Ps.	765,792	  	  	Ps.	708,572	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
17.  Management incentive plan
The following table illustrates the number of shares options and fixed exercise prices as of December 31, 2012 and March 31, 2013:

 	  	Number	 	  	Exercise price
in Mexican  pesos	 	
Outstanding as of December 31, 2012	  	 	25,164,126	  	  	Ps.	5.31	  	
Granted during the year	  	 	—  	  	  	 	—  	  	
Forfeited during the year	  	 	—  	  	  	 	—  	  	
Exercised during the year	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	
Outstanding as of March 31, 2013	  	 	25,164,126	  	  	Ps.	5.31	  	

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18.  Equity
Stock Split and Share Conversion
On June 5, 2013 the Company’s shareholders adopted certain unanimous resolutions (the “June 5 Resolutions”), pursuant to which they approved, among other things: (i) a stock split and share conversion, (ii) a capital increase which is conditioned to an effective IPO, (iii) change to the Company’s bylaws, including the name of the Company and (iv) the 2012 and 2011 consolidated financial statements.
On June 11, 2013 the Company’s shareholders adopted new unanimous resolutions. In the new resolutions the Company’s shareholders revoked the June 5 Resolutions and approved, among other things: (i) a stock split and share conversion, (ii) a capital increase which is conditioned to an effective IPO, (iii) changes to the Company’s bylaws, including the name of the Company and (iv) the 2012 and 2011 consolidated financial statements.
Considering the stock split (which consisted of a 403 split of the Company’s total number of shares), the total number of authorized shares as of December 31, 2012 was 838,799,767, represented by common registered shares, issued and with no par value, fully subscribed, comprised as follows:

 	  	Shares	 	 	 	 	
 	  	Fixed
Class I	 	  	Variable
Class II	 	 	Total	 	
Series A	  	 	3,224 	  	  	 	704,776,072 	  	 	 	704,779,296	  	
Series B	  	 	20,956 	  	  	 	133,999,515 	  	 	 	134,020,471	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180 	  	  	 	838,775,587 	  	 	 	838,799,767	  	
Treasury shares	  				  				 				
Stock swap option unpaid (Series A)	  	 	—   	  	  	 	( 16,719,261 	)  	 	 	(16,719,261	)  	
Management incentive plan (Series A)	  	 	—   	  	  	 	( 25,164,126 	)  	 	 	(25,164,126	)  	
	  	 	 	 	  	 	 	 	 	 	 	 	
	  	 	24,180 	  	  	 	796,892,200 	  	 	 	796,916,380	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
As a result of the above, the Company now has only two classes of outstanding shares, Series A shares reserved for Mexican holders and Series B shares for non-Mexican holders. All shares representing the Company’s capital stock, either Series A shares or Series B shares, grant the holders the same economic rights and there are no preferences and/or restrictions attaching to any class of shares on the distribution of dividends and repayment of capital.
On December 21, 2012 the shareholders of Company through unanimous resolution, approved:
(a) The creation of certain unpaid Stock Swap Option (the “Swap”) regarding 16,173,599 shares representing 2.05% of the common equity of Concesionaria (“Concesionaria Swap Shares”) owned by HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Emisión de Certificados Bursátiles F/262374 (“FICAP”), whereby FICAP will have the option to sell to Controladora any or all of Concesionaria Swap Shares in consideration for either (i) a payment in kind with shares from Company’s capital stock, taking into account 1.03374 shares of the Company per each share of Concesionaria, or (ii) a cash settlement amount, at a total price of Ps.88,847; and
(b) The issuance of an aggregate of 16,719,261 Series A shares (the “Company Swap Shares”) to be held in the treasury until the Swap is exercised at a total price of Ps.88,847.
Although the creation of the Swap and the issuance of the Company Swap Shares were approved on December 21, 2012, the trust implementing the transaction was not created until February 22, 2013 and the Company did not become a party to such trust until April 10, 2013. Therefore, no obligation of the Company existed until April 10, 2013. The option of FICAP to receive payment in kind was exercised on April 19, 2013 and equity-settled on April 22, 2013. (See Note 23).
 
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The following table shows the calculations of the basic and diluted losses per share for the three months ended March 31, 2013 and 2012:

 	  	2013	 	  	2012	 	
Net loss for the period attributable to equity holders of the parent	  	Ps.	(62,286)	  	  	Ps.	(222,940)	  	
Weighted average number of shares outstanding (in thousands)	  				  				
Basic and diluted	  	 	796,916	  	  	 	727,596	  	
	  	 	 	 	  	 	 	 	
Loss per share	  				  				
Basic and diluted	  	Ps.	(0.000078)*	  	  	Ps.	(0.000306)	  	
 
*	Unvested shares awarded under the management incentive plan and the Company’s swap shares are non-dilutive at such date, and accordingly, they have been excluded in the determination of weighted average diluted shares outstanding and disregarded in the calculation of diluted earnings per share.	
19.  Income tax
The Company calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.
The major components of income tax expense in the unaudited interim condensed consolidated statement of operations for the three months ended March 31, 2013 and 2012 are:

 	  	2013	 	  	2012	 	
Current year loss tax expense	  	Ps.	(3,762)	  	  	Ps.	(2,574)	  	
Deferred income tax benefit	  	 	23,053	  	  	 	7,106	  	
	  	 	 	 	  	 	 	 	
Total tax benefit on profits	  	Ps.	19,291	  	  	Ps.	4,532	  	
	  	 	 	 	  	 	 	 	
20.  Other operating income and expenses
An analysis of other operating income is as follows for the three months ended March 2013 and 2012:

 	  	2013	 	  	2012	 	
Aircraft gain on sale and leaseback	  	Ps.	23,970	  	  	Ps.	17,239	  	
Others	  	 	270	  	  	 	2,174	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	24,240	  	  	Ps.	19,413	  	
	  	 	 	 	  	 	 	 	
An analysis of other operating expenses is as follows for the three months ended March 2013 and 2012:

 	  	2013	 	  	2012	 	
Administrative and operational support expenses	  	Ps.	31,380	  	  	Ps.	24,664	  	
Technology and communications	  	 	22,616	  	  	 	14,705	  	
Passenger services	  	 	14,540	  	  	 	12,611	  	
Insurance	  	 	15,281	  	  	 	16,972	  	
Rents of offices, maintenance warehouse and hangar (Note 15)	  	 	5,705	  	  	 	3,779	  	
Loss on disposal of rotable spare parts, furniture and equipment	  	 	1,664	  	  	 	—  	  	
Penalty of early lease termination	  	 	7,601	  	  	 	—  	  	
Others	  	 	3,440	  	  	 	2,250	  	
	  	 	 	 	  	 	 	 	
	  	Ps.	102,227	  	  	Ps.	74,981	  	

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21. Commitments
Aircraft-related commitments and financing arrangements
Committed expenditures for aircraft purchase and related flight equipment, including estimated amounts for contractual prices escalations and pre-delivery payments, will be as follows:

 	  	Commitment
expenditures in
U.S. dollars	 	  	Commitment
expenditures
equivalent in
Mexican pesos	 	
April-December 2013	  	US$	37,229	  	  	Ps.	459,952	  	
2014	  	 	58,991	  	  	 	728,808	  	
2015	  	 	58,273	  	  	 	719,943	  	
2016	  	 	41,547	  	  	 	513,299	  	
2017	  	 	82,275	  	  	 	1,016,474	  	
2018 and thereafter	  	 	237,131	  	  	 	2,929,653	  	
	  	 	 	 	  	 	 	 	
	  	US$	515,446	  	  	Ps.	6,368,129	  	
	  	 	 	 	  	 	 	 	
Litigation
The Company is a party to legal proceedings and claims that arise during the ordinary course of business. The Company believes the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
22.  Operating segments
The Company is managed as a single business unit that provides air transportation services. The Company has two geographic segments identified.

 	  	For the three months ended
March 31,	 	
   	  	2013	 	  	2012	 	
Revenues:	  				  				
Domestic (Mexico)	  	Ps.	2,251,872	  	  	Ps.	1,750,665	  	
United States of America	  	 	809,715	  	  	 	661,484	  	
	  	 	 	 	  	 	 	 	
Total revenue	  	Ps.	3,061,587	  	  	Ps.	2,412,149	  	
	  	 	 	 	  	 	 	 	
23.  Subsequent events
Subsequent to March 31, 2013 and prior to June 11, 2013:
On April 10, 2013 the trustee executed an Adherence Agreement under which Controladora adhered to the INVEX Trust and issued a promissory note for the purchase price of the Company swap shares in favor of the INVEX Trust.
On April 19, 2013 the promissory note was cancelled by the INVEX Trust and the Controladora Swap Shares were transferred by Controladora to the INVEX Trust. The Concesionaria swap shares are held in escrow by the INVEX trust, until the option to sell such shares is exercised by the FICAP, as beneficiary of the INVEX trust. The option of FICAP to receive payment in kind was exercised on April 19, 2013 and equity-settled on April 22, 2013.
Upon the exercise of the swap to purchase the Concesionaria swap shares, the Company will increase its direct and indirect holding of the outstanding shares of Concesionaria by acquiring an additional 2.04% interest in the voting shares of Concesionaria, increasing its ownership to 99.99%.
 
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Table of Contents

Ordinary Participation Certificates
in the form of American Depositary Shares

 

 
Deutsche Bank Securities
Morgan Stanley
UBS Investment Bank
Barclays
Cowen and Company
Evercore Partners
Santander
 
Through and including                     , 2013 (the 25 th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

 

Table of Contents
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers
The Registrant’s bylaws provide for the indemnification of the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers of the Registrant in connection with the performance of their duties, against any claim, suit, proceeding or investigation initiated in Mexico or in any jurisdiction where the Registrant’s shares or any other securities having as underlying asset such shares or other fixed-income or variable-income securities of the Registrant are registered or listed, or in any jurisdiction where the Registrant or the entities it controls operate; provided, however, that the indemnity will not apply if such claims, suits, proceedings or investigations result from gross negligence, willful misconduct or bad faith of the relevant indemnified party. Such indemnification includes the payment of any damage or loss that may have been caused by the conduct of such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant, and the amount needed, if deemed appropriate, to reach a settlement. Indemnification also includes all fees and expenses of legal counsel and other advisors working for the interests of the indemnified individuals. Pursuant to the Registrant’s bylaws, the board of directors retains the right to determine whether hiring of separate legal counsel and advisors to represent or advise the indemnified individuals is necessary.
Policies of insurance may be maintained by the Registrant under which the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of, and certain liabilities which might be imposed as a result of, claims, suits, proceedings or investigations to which they are parties by reason of being or having been such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant.
Item 7. Recent Sales of Unregistered Securities
During the last three years, the Registrant made sales of the following unregistered securities:
(1) Through unanimous resolutions dated November 27, 2012, December 21, 2012 and December 26, 2012, the Registrant’s shareholders approved a corporate restructuring with the sole purpose of acquiring the shares held by other shareholders of Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., or Volaris Opco, in exchange for 86,040,097 Series A shares of capital stock of the Registrant. As a consequence, the Registrant increased its direct and indirect holding of the outstanding shares of Volaris Opco by acquiring on November 27, 2012 an additional 5.28% interest in the voting shares of Volaris Opco and on December 21, 2012 an additional 3.24% interest in the voting shares of Volaris Opco, increasing its ownership interest after both acquisitions to 97.95%. The difference of Ps.189.8 million between the consideration paid and the carrying value of the interest acquired has been recognized in additional paid-in capital within equity and attributed to the owners of the Registrant.
(2) In December 2012, the Registrant’s shareholders approved a share incentive plan for the benefit of certain executive officers. Under this plan, designated officers generally may receive up to 3.0% of the Registrant’s capital stock on a fully diluted basis immediately prior to the completion of the related performance condition (consummation of the global offering or change of control), exercisable after such performance condition and for a period of ten years. To implement the plan, the Registrant’s shareholders approved (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of the Registrant’s capital stock, (ii) the transfer of such shares to a Mexican trust for the benefit of certain officers and (iii) the execution of share sales agreements setting forth the terms and conditions upon which the officers will receive purchased shares from the trustee for the Mexican trust. On December 24, 2012, the trust was created and the share sales agreements were executed. On December 27, 2012, the trust acquired the aforementioned shares. The shares will accrue any dividends paid by the Registrant during the time elapsing prior to the delivery to officers upon payment therefor.
 
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The sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act and/or Regulation S under the Securities Act. The Registrant believes that the recipients of the securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. All recipients had adequate access, through their relationships with the Registrant, to information about it. There were no underwriters employed in connection with any of these transactions.
Item 8. Exhibits
(a) The following documents are filed as part of this registration statement:
The exhibit index attached hereto is incorporated herein by reference.
(b) Financial Statement Schedules
No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.
Item 9. Undertakings
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(4) The Registrant will provide to the Underwriters at the closing specified in the Underwriting Agreement ADSs and CPOs in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.
 
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this pre-effective amendment No. 1 to the Registration Statement on Form F-1 and has duly caused this pre-effective amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in Mexico City, Mexico, on this 20th day of June, 2013.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V.	
		
By:	 	/ S /    J AIME P OUS        	
Name:	 	Jaime Pous	
Title:	 	General Counsel	
		
By:	 	/ S /    F ERNANDO S UÁREZ        	
Name:	 	Fernando Suárez	
Title:	 	Chief Financial Officer	
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, Carlos Alberto González constitutes and appoints Fernando Suárez and Jaime Pous, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendment or post-effective amendment to the registration statement on Form F-1, including, without limitation, any additional registration statement filed pursuant to Rule 462 under the Securities Act with respect thereto and to file the same, with exhibits thereto and other documents in connection therewith, with the SEC, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this pre-effective amendment No. 1 to the Registration Statement on Form F-1 has been signed by the following persons in the capacities indicated.
Date: June 20, 2013

Signature	  	Title	
		
*
Enrique Beltranena	  	Chief Executive Officer	
		
*
Fernando Suárez	  	Chief Financial Officer	
		
/ S /    C ARLOS A LBERTO G ONZÁLEZ        
Carlos Alberto González	  	Corporate Controller Director	
		
*
Gilberto Perezalonso Cifuentes	  	Director and Chairman of the Board	
		
*
Pedro Carlos Aspe Armella	  	Director	
 
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Signature	  	Title	
		
*
Brian H. Franke	  	Director	
		
*
William A. Franke	  	Director	
		
*
Harry F. Krensky	  	Director	
		
*
Roberto José Kriete Ávila	  	Director	
		
*
Rodolfo Montemayor Garza	  	Director	
		
*
Jorge Antonio Vargas Diez Barroso	  	Director	
		
*
José Luis Fernández Fernández	  	Independent Director	
		
*
Joaquín Alberto Palomo Déneke	  	Independent Director	
		
*
John A. Slowik	  	Independent Director	
		
*
Donald Puglisi	  	Authorized U.S. Representative	

		
*By:	 	/ S /    J AIME P OUS        	
	 	Jaime Pous
Attorney-in-Fact
Pursuant to Power of Attorney	

		
*By:	 	/ S /    F ERNANDO S UÁREZ        	
	 	Fernando Suárez
Attorney-in-Fact
Pursuant to Power of Attorney	
 
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EXHIBIT INDEX

Exhibit
Number	  	Exhibit	
		
1.1	  	Form of Underwriting Agreement	
		
3.1	  	By-laws of the Registrant (estatutos) (English translation)	
		
4.1	  	Specimen certificate representing certificate for Series A share (English translation)	
		
4.2	  	Specimen certificate representing a Certificado de Participación Ordinario (English translation)	
		
4.3	  	Form of CPO Trust Agreement, between the Registrant and Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (English translation)	
		
4.4	  	Form of CPO Deed, among Nacional Financiera, Sociedad Nacional de Crédito, Institucíon de Banca de Desarrollo, Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero and Comisíon Nacional Bancaria y de Valores (English translation)	
		
4.5	  	Form of Deposit Agreement among the Registrant, The Bank of New York Mellon, as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the form of American Depositary Receipts	
		
4.6	  	Form of American Depositary Receipt (included in Exhibit 4.5)	
		
4.7*	  	Form of Registration Rights Agreement among the Registrant and the shareholders named therein	
		
5.1	  	Opinion of Ritch Mueller, S.C., Mexican legal counsel of the Registrant, as to the legality of the Series A shares and CPOs	
		
10.1†	  	Engine Lease Agreement, dated as of November 24, 2009, between the Company, RRPF Engine Leasing Limited and Rolls-Royce & Partners Finance Limited	
		
10.2†	  	Engine Lease Agreement, dated as of June 28, 2007, between the Company and Celestial Aviation Trading 50 Limited, as amended by the Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association	
		
10.3†	  	Amended and Restated Component Services and Pooling Agreement, dated as of February 10, 2009, between the Company and Aveos Fleet Performance Inc.	
		
10.4†	  	Lease Agreement, dated as of August 21, 2008, between the Company and Engine Lease Finance Corporation	
		
10.5†	  	Fleet Hour Agreement, dated as of June 8, 2007 between the Company and IAE International Aero Engines AG	
		
10.6†	  	Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation, as amended by the Lease Extension and Amendment Agreement No. 1, dated as of September 30, 2011 between the Company and Engine Lease Finance Corporation	
		
10.7†	  	Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation	
		
10.8†	  	Aircraft Repair and Maintenance Service Agreement, dated as of March 6, 2007, between the Company and Aeromantenimiento, S.A.	
		
10.9†	  	General Terms of Sale Agreement, dated as of December 8, 2006, between the Company and IAE International Aero Engines AG	
		
10.10†	  	A320 Family Purchase Agreement, dated as of October 28, 2005, between the Company and Airbus S.A.S., including Amendment No. 1, dated as of June 22, 2007, Amendment No. 2, dated as of July 11, 2008, Amendment No. 3, dated as of January 30, 2009, Amendment No. 4, dated as of October 28, 2010, Amendment No. 5, dated as of December 15, 2010, Amendment No. 6, dated as of December 15, 2010, Amendment No. 7, dated as of January 4, 2011 and Amendments Nos. 8 and 9 both dated as of December 28, 2011	
		
10.11†	  	Lease Agreement, dated as of March 9, 2007 between the Company Concesionaria Vuela and International Lease Finance Corporation	

Table of Contents

Exhibit
Number	  	Exhibit	
		
10.12†	  	Lease Agreement, dated as of March 9, 2007 between the Company Concesionaria Vuela and International Lease Finance Corporation	
		
10.13†	  	Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited	
		
10.14†	  	Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited	
		
10.15†	  	Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited	
		
	  	Amendment Agreement, dated as of September 17, 2007, between Company and RBS Aerospace Limited with Wells Fargo Northwest, National Association	
		
10.16†	  	Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited	
		
	  	Amendment Agreement, dated as of October 10, 2007, between Company and RBS Aerospace Limited with Wells Fargo Northwest, National Association	
		
10.17†	  	Lease Agreement, dated as of March 26, 2007, between the Company and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Múltiple, Entidad Regulada Grupo Financiero Inbursa	
		
10.18†	  	Lease Agreement, dated as of April 20, 2007, between the Company and International Lease Finance Corporation	
		
10.19†	  	Lease Agreement, dated as of June 18, 2007, between the Company and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Múltiple, Entidad Regulada Grupo Financiero Inbursa	
		
10.20†	  	Lease Agreement, dated as of January 25, 2008, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.21†	  	Lease Agreement, dated as of January 25, 2008, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.22†	  	Lease Agreement, dated as of November 7, 2008, between the Company and Amentum Leasing No. Four Limited	
		
10.23†	  	Lease Agreement, dated as of November 30, 2009, between the Company and CIT Aerospace International	
		
10.24†	  	Lease Agreement, dated as of November 30, 2009, between the Company and CIT Aerospace International	
		
10.25†	  	Lease Agreement, dated as of August 23, 2010, as amended between the Company and Macquarie Airfinance Acquisitions (Ireland) Limited	
		
10.26†	  	Lease Agreement, dated as of August 23, 2010, as amended between the Company and Macquarie Aerospace Ireland Limited	
		
10.27†	  	Lease Agreement, dated as of November 9, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited	
		
10.28†	  	Lease Agreement, dated as of November 17, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited	
		
10.29†	  	Lease Agreement, dated as of November 17, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited	
		
10.30†	  	Lease Agreement, dated as of April 7, 2011, between the Company and MASL Ireland (22) Limited	
		
10.31†	  	Lease Agreement, dated as of April 13, 2011, between the Company and Wells Fargo Bank Northwest, National Association	

Table of Contents

Exhibit
Number	  	Exhibit	
		
10.32†	  	Lease Agreement, dated as of April 29, 2011, between the Company and Amentum Leasing No. Three Limited	
		
10.33†	  	Lease Agreement, dated as of April 29, 2011, between the Company and Amentum Leasing No. Three Limited	
		
10.34†	  	Common Terms Agreement, dated as of June 28, 2007, between the Company and GE Commercial Aviation Services Limited, as amended by the Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association	
		
10.35†	  	Fuel Sales Agreement, dated as of January 1, 2012, between the Company and World Fuel Services, Inc.	
		
10.36†	  	Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.37†	  	Lease Agreement, dated as of June 26, 2012, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.38†	  	Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.39†	  	Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.40†	  	Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.41†	  	Lease Agreement, dated as of March 15, 2012, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.42†	  	Lease Agreement, dated as of June 26, 2012, between the Company and Wells Fargo Bank Northwest, National Association	
		
10.43†	  	Aircraft Lease Agreement “A”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.44†	  	Aircraft Lease Agreement “B”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.45†	  	Aircraft Lease Agreement “C”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.46†	  	Aircraft Lease Agreement “D”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.47†	  	Agreement on Technical Services for A319/A320 Aircraft, dated as of August 15, 2012 between the Company and Lufthansa Technik AG;	
		
	  	Attachment 1: Total Component Support to Agreement on Technical Services for A310/320 Aircraft between Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. and Lufthansa Technik AG dated August 15, 2012.	
		
10.48†	  	Aircraft Lease Agreement “A”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.49†	  	Aircraft Lease Agreement “B”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company	

Table of Contents

Exhibit
Number	  	Exhibit	
		
10.50†	  	Aircraft Lease Agreement “C”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company	
		
10.51†	  	The Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association	
		
10.52	  	Revolving Credit Line Agreement dated July 27, 2011 among the Company, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander and Banco Nacional de Comercio Exterior, S.N.C. and the First Amendment dated February 28, 2012	
		
10.53†	  	Master Agreement, dated as of July 20, 2009, between the Company and Sabre, Inc. and Work Order Number 1, dated as of July 20, 2009 under the Master Agreement	
		
10.54†	  	Navitaire Hosted Services Agreement, dated January 29, 2013	
		
21.1	  	List of the Subsidiaries of the Registrant	
		
23.1	  	Consent of Mancera S.C. (a member practice of Ernst & Young Global)	
		
23.2	  	Consent of Ritch Mueller S.C., Mexican legal counsel of the Registrant (included in Exhibit 5.1)	
		
24.1	  	Powers of Attorney (included on signature page to the Registration Statement)	
		
99.1	  	Concession Title, dated as of May 9, 2005, as amended from time to time, granted to the Registrant by the Ministry of Communications and Transportation ( Secretaria de Comunicaciones y Transportes )	
 
(*)	To be filed by amendment.	
†	Portions of the exhibit will be omitted pursuant to a request for confidential treatment.	

Exhibit 1.1
[ — ], 2013
Deutsche Bank Securities Inc.
Morgan Stanley & Co. LLC
UBS Securities LLC
  As Representatives of the several International Underwriters
  listed in Schedule II hereto
Deutsche Bank Securities Inc.
60 Wall Street, 5th Floor
New York, New York 10005
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
UBS Securities LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), a sociedad anónima bursátil de capital variable organized under the laws of the United Mexican States (“ Mexico ”), proposes to sell to the International Underwriters named in Schedule II hereto (the “ International Underwriters ”), for whom you (the “ Representatives ”) are acting as representatives, an aggregate of [ — ] Certificados de Participación Ordinarios (“ Ordinary Participation Certificates ”, or “ CPOs ”), that have as underlying securities [ — ] Series A shares of the Company’s common stock, with no par value (the “ Common Stock ”), and certain shareholders of the Company (the “ Selling Shareholders ”) named in Schedule I hereto, severally and not jointly, propose to sell to the International Underwriters an aggregate of [ — ] CPOs, that have as underlying securities [ — ] shares of Common Stock, each Selling Shareholder selling the amount set forth opposite such Selling Shareholder’s name in Schedule I hereto, in each case in the form of American Depositary Shares (the “ ADSs ” and, together with the Common Stock and the CPOs, the “ Securities ”). Such aggregate of [ — ] CPOs, in the form of ADSs, are hereinafter referred to as the “ Firm Securities ” in an offering outside of Mexico. References to ADSs herein shall be deemed to include the corresponding CPOs and Common Stock underlying such ADSs.
The Selling Shareholders also propose to sell to the International Underwriters not more than an additional [ — ] CPOs, in the form of ADSs (the “ Additional Securities ”), if and to the extent that you, as the Representatives, shall have determined to exercise, on behalf of the International Underwriters, the right to purchase such Additional Securities granted to the International Underwriters in Section 3 hereof.
The Firm Securities and the Additional Securities are herein collectively referred to as the “ Offered Securities ”.

The ADSs will be evidenced by American Depositary Receipts (“ ADRs ”) to be issued pursuant to a Deposit Agreement, each dated as of the Closing Date (defined herein) (the “ Deposit Agreement ”), among the Company, The Bank of New York Mellon, as depositary (the “ Depositary ”), and the holders and beneficial holders from time to time of the ADRs. Each ADS will represent ten CPOs.
The Company and the Selling Shareholders are hereinafter sometimes collectively referred to as the “ Sellers .”
The CPOs will be issued by Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Direccion Fiduciaria (“ Nafin ”), as trustee (the “ CPO Trustee ”) under a Trust Agreement, dated as of [ — ] (the “ CPO Trust Agreement ”), entered into between the Company and the CPO Trustee, pursuant to a deed ( acta de emisión) dated as of [ — ] (the “ CPO Deed ”), granted by Nafin, as trustee, and acknowledged by Banco Invex, S.A., Institucion de Banca Multiple, Invex Grupo Financiero, as common representative of the holders of CPOs (the “ Common Representative ”), and the Mexican National Banking and Securities Commission (the “ Comisión Nacional Bancaria y de Valores ” or the “ CNBV ”). Each CPO will represent a financial interest in one share of Common Stock. Whenever computations are contemplated herein that involve the numbers of ADSs, CPOs or shares of Common Stock, they shall be made on a consistent basis, by first converting the number of ADSs into the number of CPOs underlying such ADSs and then converting such CPOs into the number of shares of Common Stock underlying such CPOs.
It is understood that the Company and the Selling Shareholders are concurrently entering into a Mexican law-governed underwriting agreement ( contrato de colocacion ) dated the date hereof (the “ Mexican Underwriting Agreement ”, and, together with this Agreement, the “ Underwriting Agreements ”) with Morgan Stanley Mexico, Casa de Bolsa, S.A. de C.V., Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander México, Deutsche Securities, S.A. de C.V., Casa de Bolsa, UBS Casa de Bolsa, S.A. de C.V., UBS Grupo Financiero, and Evercore Casa de Bolsa, S.A. de C.V. (the “ Mexican Underwriters ”), providing for the concurrent offer and sale of [ — ] shares of Common Stock of the Company (the “ Mexican Firm Securities ”), and, if the over-allotment option granted to the Mexican Underwriters is exercised in connection therewith, such an offer and sale of not more than an additional [ — ] shares of Common Stock (the “ Mexican Additional Securities ” and, together with the Mexican Firm Securities, the “ Mexican Securities ”).
The Mexican Underwriters have entered into an intersyndicate agreement (the “ Intersyndicate Agreement ”) with the International Underwriters. Such agreement provides, among other things, that the Mexican Underwriters will offer and sell the Mexican Securities in Mexico and the International Underwriters and the Mexican Underwriters may purchase and sell among each other such number of ADSs and shares of Common Stock, and stabilize and exercise the over-allotment option in a coordinated manner and as required under applicable law.
The Company has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement, including a prospectus, relating to the CPOs offered in the form of ADSs and a registration statement relating to the American Depositary Shares
 
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corresponding to the CPOs. The registration statement relating to the CPOs offered in the form of ADSs as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the “ Securities Act ”), is hereinafter referred to as the “ Registration Statement ”; the prospectus in the form first used to confirm sales of the ADSs (or in the form first made available to the International Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “ Prospectus ”. The registration statement relating to the ADSs, as amended at the time it becomes effective, is hereinafter referred to as the “ ADR Registration Statement .” If the Company has filed abbreviated registration statements to register additional CPOs and additional ADSs pursuant to Rule 462(b) under the Securities Act (the “ Rule 462 Registration Statements ”), then any reference herein to the term “ Registration Statement ” and the “ ADR Registration Statement ” shall be deemed to include the corresponding Rule 462 Registration Statement.
For purposes of this Agreement, “ free writing prospectus ” has the meaning set forth in Rule 405 under the Securities Act, “ Time of Sale Prospectus ” means the preliminary prospectus together with the free writing prospectuses, if any, each identified in Schedule III hereto and the information orally conveyed to investors, which information is identified in Schedule III hereto. The term “ broadly available road show ” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person. As used herein, the terms “ Registration Statement ,” “ preliminary prospectus ,” “ Time of Sale Prospectus ” and “ Prospectus ” shall include the documents, if any, incorporated by reference therein. “Time of Sale” means [    ]:00 [a.m./p.m.] New York City time, on [            ], 2013.
 
 	1.	Representations and Warranties of the Company.	
The Company represents and warrants to and agrees with each of the International Underwriters, as of the date hereof, the Time of Sale and the Closing Date(as defined in Section 5), that:
(a) The Registration Statement and the ADR Registration Statement have each become effective; no stop orders suspending the effectiveness of the Registration Statement or the ADR Registration Statement are in effect, and no proceedings for such purpose are pending before or, to the best knowledge of the Company, threatened by the Commission.
(b) (i) Each of the Registration Statement and the ADR Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement, the ADR Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) the Time of Sale Prospectus does not, and at the Time of Sale and at the Closing Date, the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the
 
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light of the circumstances under which they were made, not misleading, (iv) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (v) the Prospectus does not contain and, as amended or supplemented, if applicable, will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the ADR Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use therein.
(c) The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Except for the free writing prospectuses, if any, identified in Schedule III hereto, and electronic road shows, if any, each furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any free writing prospectus.
(d) The Company has been duly incorporated, is validly existing as a sociedad anónima búrsatil de capital variable under the laws of Mexico, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and, to the extent applicable, is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the properties, financial condition, results of operations or prospects of the Company and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”).
(e) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation and, if applicable, in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and, except as described in the Time of Sale Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.
 
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(f) Each of this Agreement and the Deposit Agreement has been duly authorized, executed and delivered by the Company.
(g) The authorized capital stock of the Company and the terms of the CPOs and ADSs conform as to legal matters in all material respects to the description thereof contained in each of the Time of Sale Prospectus and the Prospectus.
(h) The shares of Common Stock (including shares of Common Stock underlying CPOs) have been duly authorized and are validly issued, and are fully paid and non-assessable, other than the shares of Common Stock underlying CPOs to be offered for subscription and payment by the Company, which will be fully paid and non-assessable when issued and delivered in accordance with the terms of this Agreement and paid for by the International Underwriters; and the Common Stock (and the shares of Common Stock underlying the CPOs) are not subject to any preemptive or similar rights, that have not been duly waived.
(i) Upon the due issuance by the Depositary of ADRs against the deposit of the CPOs in accordance with the provisions of the Deposit Agreement, such ADRs will be duly and validly issued under the Deposit Agreement and persons in whose names such ADRs are registered will be entitled to the rights of registered holders of ADRs specified therein and in the Deposit Agreement.
(j) The CPO Trust Agreement has been duly authorized and executed, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company pursuant to its terms, subject to bankruptcy, insolvency, concurso mercantil and similar laws affecting rights of creditors generally. The CPO Deed has been granted by Nafin, and acknowledged by the Common Representative and the CNBV. The CPO Deed has been filed for registration with the Public Registry of Commerce of the Federal District in Mexico city (the “ Public Registry ”). The CPOs will be deposited and held in the book-entry system of S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V. (“ Indeval ”), and the persons that directly or indirectly hold the CPOs, will be entitled to the rights specified in the CPO Trust Agreement and the CPO Deed; and the CPO Trust Agreement and the CPO Deed conform in all material respects to the descriptions thereof contained in each of the Time of Sale Prospectus and the Prospectus. The Company has filed for and obtained the approval of the Ministry of Economy ( Secretaria de Economía ) for the CPOs to constitute a “neutral investment” ( inversión neutral ) for purposes of the Mexican foreign investment laws, and such approval is in full force and effect.
(k) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Deposit Agreement and the CPO Trust Agreement will not contravene any provision of (i) applicable law (ii) the estatutos sociales of the Company (iii) any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, except in each case described in clauses (i), (iii) and (iv) above for such contraventions as would not, individually or in the aggregate, result in a Material Adverse Effect or affect the power or ability of the Company to perform its obligations under this Agreement or the Deposit Agreement or to consummate the transactions contemplated by
 
5

the Time of Sale Prospectus. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Deposit Agreement, the CPO Trust Agreement and the Mexican Underwriting Agreement, except (i) registration of the ADSs under the Securities Act, such as have been obtained and made or will have been obtained and made on or prior to the Closing Date, (ii) the approval of the public offering of the Mexican Securities in Mexico, which has been obtained from the CNBV, (iii) the registration of the Common Stock with the Mexican National Registry of Securities maintained by the CNBV, which has been obtained, (iv) the listing for trading of the Common Stock with the Mexican Stock Exchange ( Bolsa Mexicana de Valores, S.A.B. de C.V. ), which has been obtained, (v) approval of the issuance of the CPOs by the Ministry of the Economy, which has been obtained, (vi) approval of listing on the New York Stock Exchange, which is subject only to official notice of issuance, (vii) such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the ADSs, (viii) the approval of the Financial Institutions Regulatory Authority, Inc. (“ FINRA ”) of the underwriting terms and arrangements in connection with the purchase and distribution of the ADSs by the International Underwriters or (ix) the absence of which would not have a Material Adverse Effect or have a material adverse effect on the power or ability of the Company to perform its obligations under this Agreement or the Deposit Agreement or to consummate the transactions contemplated by the Time of Sale Prospectus.
(l) On or prior to the Closing Date, the Company will have validly transferred to the CPO Trustee the shares of Common Stock underlying the CPOs, and upon such transfer to the CPO Trustee all right, title and interest in such shares of Common Stock, subject to the terms of the CPO Trust Agreement and CPO Deed, will have been transferred to the CPO Trustee, free and clear of all liens, encumbrances, equities or claims; upon the deposit of the CPOs underlying the ADSs with the Depositary pursuant to the Deposit Agreement against issuance of the ADRs representing such ADSs, all right, title and interest in such CPOs, subject to the Deposit Agreement, will be transferred to the Depositary or its nominee, as the case may be, free and clear of all liens, encumbrances, equities or claims; and upon the sale and delivery of the ADSs to the International Underwriters, and payment therefor pursuant to this Agreement, good and valid title to such ADSs, free and clear of all liens, encumbrances, equities or claims, will be transferred to the International Underwriters.
(m) There has not occurred any Material Adverse Effect on the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus.
(n) There are no legal or governmental proceedings pending or, to the best knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Time of Sale Prospectus and proceedings that would not have a Material Adverse Effect, or on the power or ability of the Company to perform its obligations under this Agreement, the Deposit Agreement and the CPO Trust Agreement or to consummate the transactions contemplated by the Time of Sale Prospectus or (ii) that are required to be described in the Registration Statement or the Prospectus and are not so described; and there are no statutes, regulations, contracts, concessions or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described in all material respects or filed as required.
 
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(o) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.
(p) The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
(q) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and municipal laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants, atmosphere emissions and external noise generation (“ Environmental Laws ”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect.
(r) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a Material Adverse Effect.
(s) Except as described in the Time of Sale Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities with the ADSs registered pursuant to the Registration Statement.
(t) Neither the Company nor any of its subsidiaries or affiliates, nor any director, officer, or employee, nor, to the Company’s knowledge, any agent or representative of the Company or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Company and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.
 
7

(u) The operations of the Company and its subsidiaries are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements and the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Anti-Money Laundering Laws ”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(v) (i) Neither the Company nor any of its subsidiaries, nor any director, officer, or employee thereof, nor, to the Company’s knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (“ Person ”) that is, or is owned or controlled by a Person that is:
(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“ OFAC ”), the United Nations Security Council (“ UNSC ”), the European Union (“ EU ”), Her Majesty’s Treasury (“ HMT ”), or other relevant sanctions authority (collectively, “ Sanctions ”), nor
(B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).
(ii) The Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).
(iii) For the past five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(w) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor
 
8

entered into any material transaction; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, respectively.
(x) The Company and its subsidiaries have good and marketable title to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except (i) such as are described in the Time of Sale Prospectus, (ii) as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries, or (iii) as would not, individually or in the aggregate, have a Material Adverse Effect. Any real property, buildings, aircraft and aircraft engines held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases, subject to the effects of bankruptcy, reorganization, concurso mercantil , insolvency, fraudulent conveyance, moratorium or other laws affecting creditors’ rights generally from time to time in effect and general principles of equity (whether considered in a proceeding in equity or at law), with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except (i) as described in the Time of Sale Prospectus or (ii) as would not have a Material Adverse Effect.
(y) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by them in connection with the business now operated by them, except where the failure to so own or possess or have the right to use would not have a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(z) No labor dispute with the employees of the Company or any of its subsidiaries exists, except as described in the Time of Sale Prospectus, or, to the knowledge of the Company, is imminent, except, in each case, as would not have a Material Adverse Effect; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that would have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries, and their respective properties, are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except as described in the Time of Sale Prospectus.
 
9

(bb) The Company and its subsidiaries possess all concessions, certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations and permits, individually and in the aggregate, would not have a Material Adverse Effect, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such concession, certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as described in the Time of Sale Prospectus.
(cc) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Time of Sale Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(dd) Except as described in the Time of Sale Prospectus, the Company has not sold, issued or distributed any shares of capital stock during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.
(ee) Neither the Company nor any of its subsidiaries is (i) in violation of its by-laws ( estatutos sociales ) in effect, (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any obligation, term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease agreement, concession or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation of any law or statute or any judgment, order, rule or regulation applicable to the Company of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its properties, as applicable, other than, in the cases of clauses (ii) and (iii), such violations and defaults that would not, singly or in the aggregate, have a Material Adverse Effect.
(ff) The financial statements of the Company and its consolidated subsidiaries, and the related schedules and notes thereto, included in the Registration Statement, the Time of Sale Prospectus and the Prospectus were prepared in accordance with International Financial
 
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Reporting Standards, as issued by the International Accounting Standards Board (“ IFRS ”), consistently applied and present fairly in all material respects the financial position of the Company and its subsidiaries, on a consolidated basis, at the relevant dates and the results of operations and changes in financial position of each of the Company and its subsidiaries, on a consolidated basis, for the periods in respect of which they have been prepared. The selected financial information and the summary financial information included in the Registration Statement, the Time of Sale Prospectus and the Prospectus have been derived from the financial statements and accounting records of the Company and present fairly in all material respects the information shown therein.
(gg) Mancera, S.C. a member practice of Ernst & Young Global, who has audited the financial statements included in the Registration Statement and who will deliver the letters referred to in Section 6, is an independent registered public accounting firm with respect to the Company and its subsidiaries within the meaning of the Securities Act and the applicable published rules and regulations thereunder.
(hh) The Company and each of its subsidiaries have filed all applicable federal, state and local income, franchise or similar tax, excise, withholding, documentary or stamp tax (each a “ Tax ” and collectively “ Taxes ”) returns as well as Tax returns required by any other jurisdictions required to be filed through the date of this Agreement or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate, have a Material Adverse Effect) and have paid all Taxes required to be paid (except for cases in which the failure to file or pay would not have a Material Adverse Effect, or, except as currently being contested in good faith and for which reserves required by IFRS have been created in the financial statements of the Company), and no Tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company nor any of its subsidiaries have any notice or knowledge of any Tax deficiency which could be determined adversely to the Company or its subsidiaries and which could have) a Material Adverse Effect.
(ii) No stamp, issue, registration, documentary, capital gains, income, withholding or other taxes or duties, including interest and penalties, are payable in Mexico or in the United States or any political subdivision or taxing authority thereof on or in connection with (i) the execution and delivery of this Agreement, the Deposit Agreement, the CPO Trust Agreement and the CPO Deed; (ii) the issuance of the Common Stock by the Company, (iii) the issuance of the CPOs and the ADSs under the CPO Deed and the Deposit Agreement, respectively, or (iv) the sale of the ADSs to the International Underwriters in the manner contemplated herein; or (v) the resale and delivery of the ADSs by the International Underwriters in the manner contemplated in the Time of Sale Prospectus, provided, in each case, the International Underwriters are not deemed to have a permanent establishment in Mexico for tax purposes, are not residents of Mexico for tax purposes or are not otherwise subject to taxation in Mexico.
(jj) To ensure the legality, validity, enforceability or admissibility into evidence in a legal proceeding in Mexico of this Agreement and the Deposit Agreement in Mexico, it is not necessary that this Agreement and the Deposit Agreement be filed or recorded with any court or other authority in Mexico or that any registration tax, stamp duty or similar tax be paid in Mexico on or in respect of any of this Agreement and the Deposit Agreement other than court costs, including (without limitation) filing fees and deposits to guarantee judgment required by a
 
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Mexican court of law, and except that in the event that any legal proceedings are brought to the courts of Mexico, a Spanish translation of this Agreement and the Deposit Agreement, as applicable, and any other documents required in such proceedings that are not in the Spanish language, prepared by a court-approved translator, would have to be approved by the Mexican court after the defendant had been given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.
(kk) Except for the appointment of the International Underwriters and the Mexican Underwriters, who may engage in stabilization activities and as to whose actions the Company makes no representation, neither the Company nor any of its subsidiaries has taken, or will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.
(ll) Except as otherwise disclosed in the Time of Sale Prospectus and the Prospectus, no material indebtedness (actual or contingent) and no material contract or material arrangement is outstanding between the Company or any of its subsidiaries on the one hand and any director or executive officer, including his/her spouse, infant children and any company or undertaking in which he/she holds a controlling interest, of the Company or any such subsidiary on the other hand. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders or other Affiliates of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in the Registration Statement, Time of Sale Prospectus and the Prospectus.
(mm) The Company has the power to submit, and pursuant to Section 13 of this Agreement and Section [7.06] of the Deposit Agreement, has legally, validly, effectively and irrevocably, submitted, to the jurisdiction of any federal or state court in the State of New York, County of New York, and has the power to designate, appoint and empower, and pursuant to Section 13 of this Agreement and Section [7.06] of the Deposit Agreement and to appointment and acceptance letters and to a notarized irrevocable power-of-attorney granted under Mexican law, has legally and validly designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement or the Deposit Agreement in any federal or state court in the State of New York.
(nn) No exchange control authorization or any other authorization, approval, consent or license of any governmental authority or agency in Mexico is required for the payment of any dividends or other distributions by the Company of any amounts in United States dollars and except as described in the Time of Sale Prospectus and the Prospectus, all such payments made to holders of Securities who are non-residents of Mexico and who do not hold the Securities through a permanent establishment in Mexico for tax purposes, will not be subject to income, withholding or other similar taxes under laws and regulations of Mexico and will otherwise be free and clear of any other tax, duty, withholding or deduction in Mexico.
(oo) [Except as described in the Time of Sale Prospectus], no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, nor due to any judgment, order or decree of any government authority, agency or court having jurisdiction over such subsidiary, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from
 
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repaying to the Company any loans or advances to such subsidiary from the Company in accordance with the terms of any such loan or advance, or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.
(pp) Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market related data included in the Time of Sale Prospectus and the Prospectus is not based on or derived from sources that are reliable in all material respects.
(qq) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) contained in the Registration Statement, the Prospectus or the Time of Sale Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed in other than good faith.
(rr) The Company has no reason to believe that the indemnification and contribution provisions set forth in Section 10 contravene Mexican law or public policy.
(ss) The Company, its subsidiaries and their obligations under this Agreement or the Deposit Agreement are subject to civil and commercial law and to suit, and neither the Company nor any of its subsidiaries nor any of their respective properties or assets has any right of immunity, on any grounds, from any action, suit or proceeding, from the giving of any relief in any action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any Mexican or U.S. federal or New York state court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or from other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter arising out of or relating to this Agreement or the Deposit Agreement.
(tt) Neither the Company nor any of its subsidiaries was a “passive foreign investment company” (a “ PFIC ”) as defined in Section 1297 of the U.S. Internal Revenue Code, as amended, and the Treasury Regulations promulgated thereunder for the taxable year ended December 31, 2012, and neither the Company nor any of its subsidiaries expects to become a PFIC in the taxable year ending December 31, 2013.
(uu) The Company is not a “foreign personal holding company” within the meaning of the United States Internal Revenue Code of 1986, as amended.
(vv) The Deposit Agreement has been duly authorized by the Company and when executed and delivered by the Company, will be a valid and binding agreement of the Company, except as may be limited by bankruptcy, insolvency, reorganization, concurso mercantil , moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(ww) The ADRs, when issued by the Depositary against the deposit of the Securities in respect thereof in accordance with the provisions of the Deposit Agreement, will be duly authorized and validly issued and the persons in whose names such ADRs are registered will be entitled to the rights of registered holders of ADRs specified therein and in the Deposit Agreement.
 
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(xx) The Deposit Agreement, the ADSs, the CPOs and the Common Stock conform in all material respects as to legal matters to the description thereof contained in the Prospectus.
(yy) The ADSs, when issued, will be freely transferable to or for the account of the several International Underwriters and (to the extent described in the Time of Sale Prospectus) the initial purchasers thereof; except as described in the Time of Sale Prospectus, and there are no restrictions on subsequent transfers of the ADSs under the laws of Mexico or the United States.
(zz) The CPO Trust is not, and after giving effect to the offering and sale of the CPOs, as described in the Time of Sale Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
 
 	2.	Representations and Warranties of the Selling Shareholders.	
Each Selling Shareholder, severally and not jointly, represents and warrants to and agrees with each of the International Underwriters as of the date hereof, the Time of Sale and the Closing Date, that:
(a) This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement will not contravene (i) any provision of applicable law, (ii) the certificate of incorporation or by-laws of such Selling Shareholder (if such Selling Shareholder is a corporation), (iii) any agreement or other instrument binding upon such Selling Shareholder or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder except, in the case of clauses (i), (iii) and (iv), where such contravention would not impair in any material respects such Selling Shareholder’s ability to fulfill its obligations under this Agreement. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement, except (i) registration of the ADSs under the Securities Act, such as have been obtained and made or will have been obtained and made on or prior to the Closing Date, (ii) the approval of the public offering of the Mexican Securities in Mexico, which has been obtained from the CNBV, (iii) the registration of the Common Stock with the Mexican National Registry of Securities maintained by the CNBV, which has been obtained, (iv) the listing for trading of the Common Stock with the Mexican Stock Exchange, which has been obtained, (v) approval of the Ministry of Economy ( Secretaria de Economía ) for the CPOs to constitute a “neutral investment” ( inversión neutral ) for purposes of the Mexican foreign investment laws, which has been obtained, (vi) approval of listing on the New York Stock Exchange, which is subject only to official notice of issuance, (vii) such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the CPOs in the form of ADSs, (viii) the approval of FINRA of the underwriting terms and arrangements in connection with the purchase
 
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and distribution of the CPOs in the form of ADSs by the underwriters or (ix) the absence of which would not impair in any material respects such Selling Shareholder’s ability to fulfill its obligations under this Agreement.
(c) The shares of Common Stock underlying the CPOs to be sold by such Selling Shareholder are and on the Closing Date will be free and clear of all security interests, claims, liens, equities or other encumbrances and the legal right and power, and such Selling Shareholder has all authorization and approval required by law, to enter into this Agreement and to sell, transfer and deliver the shares of Common Stock underlying the CPOs to be sold by such Selling Shareholder.
(d) Subject to the assumptions set forth below, upon payment for the CPOs to be sold by such Selling Shareholder pursuant to this Agreement, delivery of ADSs representing such CPOs, as directed by the International Underwriters, to Cede & Co. (“ Cede ”) or such other nominee as may be designated by the Depository Trust Company (“ DTC ”), registration of such ADSs in the name of Cede or such other nominee and the crediting of such ADSs on the books of DTC to securities accounts of the International Underwriters (assuming that neither DTC nor any such International Underwriter has notice of any adverse claim (within the meaning of Section 8-105 of the New York Uniform Commercial Code (the “ UCC ”) to such ADSs)), (A) under Section 8-501 of the UCC, the International Underwriters will acquire a valid security entitlement in respect of such ADSs and (B) no action based on any “adverse claim”, within the meaning of Section 8-102 of the UCC, to such ADSs may be asserted against the International Underwriters with respect to such security entitlement; provided that for the purposes of the foregoing, such Selling Shareholder has assumed, with the agreement of the International Underwriters, that when such payment, delivery and crediting occur, (x) such ADSs will have been registered in the name of Cede or another nominee designated by DTC, in each case on the registry of the depositary for the ADSs in accordance with the terms of the deposit agreement between the Company and such depositary, (y) DTC will be registered as a “clearing corporation” within the meaning of Section 8-102 of the UCC and (z) appropriate entries to the accounts of the several International Underwriters on the records of DTC will have been made pursuant to the UCC.
(e) Except for the appointment of the International Underwriters and the Mexican Underwriters, who may engage in stabilization activities and as to whose actions such Selling Shareholder makes no representation, such Selling Shareholder has not taken, or will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.
(f) Such Selling Shareholder has no reason to believe that the representations and warranties of the Company contained in Section 1 are not true and correct, is familiar with the Registration Statement, the Time of Sale Prospectus and the Prospectus and has no knowledge of any material fact, condition or information not disclosed in the Time of Sale Prospectus or the Prospectus that has had, or may have, a Material Adverse Effect. Such Selling Shareholder is not prompted by any information concerning the Company or its subsidiaries which is not set forth in the Time of Sale Prospectus to sell its CPOs in the form of ADSs pursuant to this Agreement.
 
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(g) (i) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (ii) the Time of Sale Prospectus does not, and at the Time of Sale and at the Closing Date, the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (iii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph 2(g) do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use therein. The preceding sentences in this paragraph (g) apply only to statements in or omissions from any such document in reliance upon and in conformity with written information furnished to the Company by such Selling Stockholder specifically for use therein, it being understood and agreed that the only such information consists of information with respect to such Selling Stockholder that appear in the table and corresponding footnotes thereto under the caption “Principal and Selling Shareholders” in the Time of Sale Prospectus and the Prospectus (the “Selling Stockholder Information”).
 
 	3.	Agreements to Sell and Purchase.	
Each Seller, severally and not jointly, hereby agrees to sell to the International Underwriters, and each International Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from such Seller at $         per ADS (the “ Purchase Price ”) the number of Firm Securities (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the number of Firm Securities to be sold by such Seller as the number of Firm Securities set forth in Schedule II hereto opposite the name of such International Underwriter bears to the total number of Firm Securities. All of the Firm Securities to be purchased by the International Underwriters will be delivered in the form of ADSs. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, each Selling Shareholder, severally and not jointly, agrees to sell to the International Underwriters the Additional Securities, and the International Underwriters shall have the right to purchase, severally and not jointly, up to [ — ] Additional Securities at the Purchase Price. You may exercise this right on behalf of the International Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional Securities to be purchased by the International Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least three business days after the written notice is given and may not be earlier than the closing date for the Firm Securities nor later than ten business days after the date of such notice. Additional Securities may be purchased as provided
 
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in Section 5 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Securities. On each day, if any, that Additional Securities are to be purchased (an “ Option Closing Date ”), each International Underwriter agrees, severally and not jointly, to purchase the number of Additional Securities (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the total number of Additional Securities to be purchased on such Option Closing Date as the number of Firm Securities set forth in Schedule II hereto opposite the name of such International Underwriter bears to the total number of Firm Securities. All of the Additional Securities that the International Underwriters may elect to purchase will be delivered in the form of ADSs.
 
 	4.	Terms of Public Offering.	
The Sellers are advised by you that the International Underwriters propose to make a public offering of their respective portions of the ADSs as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Sellers are further advised by you that the ADSs are to be offered to the public initially at $         per ADS (the “ Public Offering Price ”) and to certain dealers selected by you at a price that represents a concession not in excess of $         per ADS under the Public Offering Price, and that any International Underwriter may allow, and such dealers may reallow, a concession, not in excess of $         per ADS, to any International Underwriter or to certain other dealers.
 
 	5.	Payment and Delivery.	
Payment for the Firm Securities to be sold by each Seller shall be made to such Seller in Federal or other funds immediately available in New York City against delivery of such Firm Securities for the respective accounts of the International Underwriters at 10:00 a.m., New York City time, on [ — ], 2013 or at such other time on the same or such other date, not later than [ — ], 2013 as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the “ Closing Date .”
Payment for any Additional Securities shall be made to each Seller in Federal or other funds immediately available in New York City against delivery of such Additional Securities for the respective accounts of the International Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 3 or at such other time on the same or on such other date, in any event not later than [ — ], 2013 as shall be designated in writing by you.
The ADSs representing the Firm Securities and Additional Securities shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The ADRs corresponding to the ADSs representing the Firm Securities and Additional Securities shall be delivered to you on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the International Underwriters, with any transfer taxes payable in connection with the transfer of the CPOs in the form of ADSs to the International Underwriters duly paid, against payment of the Purchase Price therefor.
 
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 	6.	Conditions to the International Underwriters’ Obligations.	
The obligations of the Sellers to sell the CPOs in the form of ADSs to the International Underwriters and the several obligations of the International Underwriters to purchase and pay for the CPOs in the form of ADSs on the Closing Date are subject to the condition that the Registration Statement shall have become effective not later than [3:00] pm (New York City time) on the date hereof.
The several obligations of the International Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus as of the date of this Agreement that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the ADSs on the terms and in the manner contemplated in the Time of Sale Prospectus.
(b) The International Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 6(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied in all material respects with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.
(c) The International Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of each Selling Shareholder, to the effect that the representations and warranties of such Selling Shareholder contained in this Agreement are true and correct as of the Closing Date and that such Selling Shareholder has complied in all material respects with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.
(d) The International Underwriters shall have received on the Closing Date an opinion of Jaime Pous, General Counsel for the Company, dated the Closing Date in form and substance satisfactory to counsel for the International Underwriters. Such opinion shall be rendered to the International Underwriters at the request of the Company and shall so state therein.
 
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(e) The International Underwriters shall have received on the Closing Date an opinion, including a customary negative assurance letter, of Shearman & Sterling LLP, outside U.S. counsel for the Company and the Selling Shareholders, dated the Closing Date in form and substance satisfactory to counsel for the International Underwriters. Such opinion shall be rendered to the International Underwriters at the request of the Company and shall so state therein.
(f) The International Underwriters shall have received on the Closing Date an opinion, including a customary negative assurance letter, of Ritch Mueller, S.C., special Mexican counsel for the Company and the Selling Shareholders, dated the Closing Date in form and substance satisfactory to counsel for the International Underwriters. Such opinion shall be rendered to the International Underwriters at the request of the Company and shall so state therein.
(i) The International Underwriters shall have received on the Closing Date an opinion, including a customary negative assurance letter, of Paul Hastings LLP, U.S. counsel for the International Underwriters, dated the Closing Date, with respect to such matters as the International Underwriters may reasonably request.
(j) The International Underwriters shall have received on the Closing Date an opinion, including a customary negative assurance letter, of Raz Guzman Abogados, S.C., Mexican counsel for the International Underwriters, dated the Closing Date, with respect to such matters as the International Underwriters may reasonably request.
(k) The International Underwriters shall have received on the Closing Date an opinion of [    ], [    ] counsel for [Selling Shareholder], dated the Closing Date, with respect to such matters as the International Underwriters may reasonably request.
(l) The International Underwriters shall have received on the Closing Date an opinion of Emmet, Marvin & Martin, LLP, U.S. counsel for the Depositary, dated the Closing Date in form and substance satisfactory to counsel for the International Underwriters.
(m) The International Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the International Underwriters, from Mancera, S.C., a member practice of Ernst & Young Global, an independent registered public accounting firm, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to International Underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.
(n) The closing of the purchase of the Mexican Firm Securities to be issued and sold by the Company pursuant to the Mexican Underwriting Agreement shall occur concurrently with the closing of the purchase of the Firm Securities described herein.
(o) The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you and the officers, directors and shareholders listed on Schedule IV, relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.
 
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(p) The ADSs shall have been approved for listing on New York Stock Exchange, subject only to official notice of issuance.
(q) (i) The CNBV shall have (1) approved the offering of the Common Stock publicly in Mexico and the registration of the Common Stock in the National Securities Registry and (2) acknowledged the execution of the CPO Deed, (ii) the Mexican Stock Exchange shall have approved the listing, for trading, of the Common Stock in Mexico, and (iii) the Ministry of Economy shall have approved the CPOs to constitute a “neutral investment” ( inversión neutral ) for purposes of the Mexican foreign investment laws, all of which approvals shall be in full force and effect.
(r) The Company shall have appointed, pursuant to a duly notarized, irrevocable power-of-attorney granted under Mexican law, CSC as its process agent and CSC shall have accepted such appointment.
The several obligations of the International Underwriters to purchase Additional Securities hereunder are subject to the delivery to you on the applicable Option Closing Date of such documents, opinions (including negative assurance letters) and auditor “comfort letter” as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Securities to be sold on such Option Closing Date and other matters related to the issuance of such Additional Securities.
 
 	7.	Covenants of the Company.	
The Company covenants with each International Underwriter as follows:
(a) To furnish to you, without charge, two signed copies of each of the Registration Statement and the ADR Registration Statement (including exhibits thereto) and for delivery to each other International Underwriter a conformed copy of each of the Registration Statement and the ADR Registration Statement (without exhibits thereto) and to furnish to you in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Sections 7(e) or 7(f) below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration Statement or the ADR Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement, the ADR Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.
 
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(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object.
(d) Not to take any action that would result in an International Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the International Underwriter that the International Underwriter otherwise would not have been required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy the ADSs at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the International Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the International Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of the ADSs as in the opinion of counsel for the International Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection with sales by an International Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the International Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the International Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Securities may have been sold by you on behalf of the International Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.
(g) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request; provided, however, that nothing contained in this Section 7(g) shall require the Company to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits or to subject itself to taxation in any jurisdiction in which it is otherwise not so subject other than suits and taxes arising out of the offering.
 
21

(h) To make generally available to the Company’s security holders and to you as soon as practicable an earning statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.
(i) To take any action necessary to ensure that neither the Company nor the CPO Trustee, acting to satisfy the purposes of the CPO Trust is required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
 
 	8.	Expenses.	
Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Sellers agree to pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s U.S. counsel, the Company’s Mexican counsel, the Company’s accountants and counsel for the Selling Shareholders, in connection with the filing of the registration statement and delivery of the ADSs under the Securities Act and all registration and other fees or expenses in connection with the preparation and filing of the Registration Statement, the ADR Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the International Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the ADSs to the International Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the ADSs under state securities laws and all expenses in connection with the qualification of the ADSs for offer and sale under state securities laws as provided in Section 7(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the International Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Common Stock and all costs and expenses incident to listing the ADSs on the New York Stock Exchange, listing the Common Stock on the Mexican Stock Exchange and registering the Common Stock with the Mexican National Securities Registry maintained by the CNBV, (v) the cost of printing certificates representing the ADSs, (vi) the costs and charges of any transfer agent, registrar or depositary, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the ADSs, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show,
 
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(viii) the document production charges and expenses associated with printing this Agreement, and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 10 entitled “Indemnity and Contribution”, and the last paragraph of Section 12 below, the International Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the ADSs by them and any advertising expenses connected with any offers they may make, provided, however, that the Company agrees to reimburse the International Underwriters for any and all of their expenses up to US$600,000.
The foregoing costs and expenses will be paid by the Company to the International Underwriters promptly upon receipt by the Company of an invoice(s) from the International Underwriters setting forth in reasonable detail the items requiring reimbursement or payment.
The provisions of this Section shall not supersede or otherwise affect any agreement that the Sellers may otherwise have for the allocation of such expenses among themselves.
 
 	9.	Covenants of the International Underwriters.	
Each International Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such International Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the International Underwriter.
 
 	10.	Indemnity and Contribution.	
(a) The Company agrees to indemnify and hold harmless each International Underwriter, its directors, officers, employees and selling agents and each person, if any, who controls any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any International Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, the ADR Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any road show as defined in Rule 433(h) under the Securities Act not constituting an issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use therein.
 
23

(b) Each Selling Shareholders, severally and not jointly, agrees to indemnify and hold harmless each International Underwriter, its directors, officers, employees and selling agents and each person, if any, who controls any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any International Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, the ADR Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any road show as defined in Rule 433(h) under the Securities Act not constituting an issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use therein, provided , however , that each Selling Shareholder shall be subject to such liability only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission is based upon the applicable Selling Shareholder Information; and provided , further , that the liability of each Selling Shareholder under the indemnity agreement contained in this paragraph shall be limited to an amount equal to the aggregate Public Offering Price of the Offered Securities sold by such Selling Shareholder under this Agreement.
(c) Each International Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the Selling Shareholders, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company or any Selling Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, the ADR Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use in the Registration Statement, the ADR Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus or the Prospectus or any amendment or supplement thereto.
 
24

(d) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 10(a), 10(b) or 10(c), such person (the “ indemnified party ”) shall promptly notify the person against whom such indemnity may be sought (the “ indemnifying party ”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all International Underwriters and all persons, if any, who control any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any International Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section and (iii) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Selling Shareholders and all persons, if any, who control any Selling Shareholder within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the International Underwriters and such control persons and affiliates of any International Underwriters, such firm shall be designated in writing by the Representatives. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. In the case of any such separate firm for the Selling Shareholders and such control persons of any Selling Shareholders, such firm shall be designated in writing by the persons named as attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and
 
25

indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and does not include an admission of fault or culpability or a failure to act by or on behalf of such indemnified party.
(e) To the extent the indemnification provided for in Section 10(a), 10(b) or 10(c) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the ADSs or (ii) if the allocation provided by clause 10(e)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 10(e)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Sellers on the one hand and the International Underwriters on the other hand in connection with the offering of the ADSs shall be deemed to be in the same respective proportions as the net proceeds from the offering of the ADSs (before deducting expenses) received by each Seller and the total underwriting discounts and commissions received by the International Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the ADSs. The relative fault of the Sellers on the one hand and the International Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Sellers or by the International Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The International Underwriters’ respective obligations to contribute pursuant to this Section 10 are several in proportion to the respective number of ADSs they have purchased hereunder, and not joint.
(f) The Sellers and the International Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the International Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 10(e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 10(e) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no International Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the ADSs underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such International Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 10 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
 
26

(g) The indemnity and contribution provisions contained in this Section 10 and the representations, warranties and other statements of the Company and the Selling Shareholders contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any International Underwriter, any person controlling any International Underwriter or any affiliate of any International Underwriter, any Selling Shareholder or any person controlling any Selling Shareholder, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the ADSs.
 
 	11.	Termination.	
The International Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the NASDAQ Global Market or the Mexican Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States or Mexico shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State or Mexican authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the ADSs on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.
 
 	12.	Effectiveness; Defaulting International Underwriters.	
This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the International Underwriters shall fail or refuse to purchase the ADSs that it has or they have agreed to purchase hereunder on such date, and the aggregate number of ADSs which such defaulting International Underwriter or International Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the ADSs to be purchased on such date, the other International Underwriters shall be obligated severally in the proportions that the number of Firm Securities set forth opposite their respective names in Schedule II bears to the aggregate number of Firm Securities set forth opposite the names of all such non-defaulting International Underwriters, or in such other proportions as you may specify, to purchase the ADSs which such defaulting International Underwriter or International Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of ADSs that any International Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 12 by an amount in excess of one-ninth of such number of
 
27

ADSs without the written consent of such International Underwriter. If, on the Closing Date, any International Underwriter or International Underwriters shall fail or refuse to purchase Firm Securities and the aggregate number of Firm Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Firm Securities to be purchased on such date, and arrangements satisfactory to you, the Company and the Selling Shareholders for the purchase of such Firm Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting International Underwriter, the Company or the Selling Shareholders. In any such case either you or the relevant Sellers shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any International Underwriter or International Underwriters shall fail or refuse to purchase Additional Securities and the aggregate number of Additional Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Securities to be purchased on such Option Closing Date, the non-defaulting International Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Securities to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional Securities that such non-defaulting International Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting International Underwriter from liability in respect of any default of such International Underwriter under this Agreement.
If this Agreement shall be terminated by the International Underwriters, or any of them, because of any failure or refusal on the part of any Seller to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason any Seller shall be unable to perform its obligations under this Agreement, other than by reason of a default by the International Underwriters under this Agreement, the Sellers will reimburse the International Underwriters or such International Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such International Underwriters in connection with this Agreement or the offering contemplated hereunder.
 
 	13.	Submission to Jurisdiction; Appointment of Agent for Service.	
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of any New York State or United States Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Agreement, the Time of Sale Prospectus, the Prospectus, the Deposit Agreement or the offering of the ADSs. Such parties irrevocably waive, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court, any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum and any right to which any of them may be entitled, on account of place of residence or domicile. To the extent that the Sellers have or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Sellers irrevocably waive, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding.
 
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The Sellers hereby irrevocably appoint CSC Corporation Service Company, at 1180 Avenue of the Americas, Second Floor, New York, New York 10036-272, as their authorized agent (“ Authorized Agent ”) for service of process in any suit, action or proceeding described in the preceding paragraph and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. The Sellers waive, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Sellers represent and warrant that such Authorized Agent has agreed to act as the Sellers’ agent for service of process for the Sellers, and the Sellers agree to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.
 
 	14.	Judgment Currency.	
If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the International Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of each Seller with respect to any sum due from it to the International Underwriters or any person controlling the International Underwriters shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by the International Underwriters or controlling person of any sum in such other currency, and only to the extent that the International Underwriters or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to the International Underwriters or controlling person hereunder, the Sellers agree as a separate joint and several obligation and notwithstanding any such judgment, to indemnify the International Underwriters or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to the International Underwriters or controlling person hereunder, the International Underwriters or controlling person agree to pay to the Sellers an amount equal to the excess of the dollars so purchased over the sum originally due to the International Underwriters or controlling person hereunder.
 
 	15.	No Additional Fees.	
All payments to be made by the Sellers under this Agreement shall be paid in United States dollars and free and clear of and without deduction or withholding for or on account of, any present or future Taxes, or other levies, imposts, duties, fees, assessments or other charges or whatever nature, imposed by Mexico or by any department, agency or other political subdivision or taxing authority thereof or therein (the “ Taxing Jurisdiction ”), and all interest, penalties or similar liabilities with respect thereto (collectively, “ Withholding Taxes ”), except to the extent required by law and except if any International Underwriter shall be required to pay any taxes in Mexico as a result of it being deemed as having a permanent establishment in Mexico for tax purposes, being a resident of Mexico or otherwise being subject to taxation in Mexico. Except as set forth in the immediately preceding sentence, if any Withholding Taxes are required by law to be deducted or withheld in connection with such payments, the Sellers will increase the amount
 
29

paid so that the full amount of such payment is received by the International Underwriters. In addition, the Sellers, jointly and severally, agree to indemnify and hold harmless each International Underwriter, each person, if any, who controls any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any International Underwriter within the meaning of Rule 405 under the Securities Act, for any Taxes or Withholding Taxes imposed by any jurisdiction other than the United States or any political subdivision thereof, attributable to the transactions contemplated by this Agreement, the Deposit Agreement, the CPO Trust Agreement and the CPO Deed.
 
 	16.	Entire Agreement.	
(a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the ADSs, represents the entire agreement between the Company and the Selling Shareholders, on the one hand, and the International Underwriters, on the other, with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the ADSs.
(b) The Company acknowledges that in connection with the offering of the ADSs: (i) the International Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the International Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the International Underwriters may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the International Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the ADSs.
 
 	17.	Counterparts.	
This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
 
 	18.	Applicable Law.	
This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
 
 	19.	Headings.	
The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.
 
 	20.	Notices.	
All communications hereunder shall be in writing and effective only upon receipt and if to the International Underwriters shall be delivered, mailed or sent to the Representatives, in care of
 
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Deutsche Bank Securities Inc. at 60 Wall Street, 5th Floor, New York, New York 10005, Attention: [ — ], Morgan Stanley & Co. LLC at 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal Department, and UBS Securities LLC at 299 Park Avenue, New York, New York 10171, Attention: [ — ] ; if to the Company shall be delivered, mailed or sent to [address] and if to the Selling Shareholders shall be delivered, mailed or sent to [address].
 
31

			
Very truly yours,	
	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
The Selling Shareholders named in Schedule I hereto, acting severally and not jointly	
		
By:	 	 	
	 	[Attorney-in-Fact] [TBD]	
(Underwriting Agreement Signature Page)

			
Accepted as of the date hereof	
	
Deutsche Bank Securities Inc.	
Morgan Stanley & Co. LLC	
UBS Securities LLC	
	
Acting severally on behalf of themselves and the International Underwriters named in Schedule II hereto	
		
By:	 	Deutsche Bank Securities Inc.	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	Morgan Stanley & Co. LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	UBS Securities LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	 	
	 	Name:	
	 	Title:	
(Underwriting Agreement Signature Page)

Exhibit 1.1
 
SCHEDULE I

Selling Shareholder	  	Number of Firm
Securities
To  Be Sold	
		
Discovery Air Investments, L.P.	  		

HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Emisión de Certificados Bursátiles F/262374	  		

Blue Sky Investments, S.à r.l.	  		

Emilio Diez Barroso Azcárraga	  		

Ignacio Guerra Pellegaud	  		

Pedro Carlos Aspe Armella	  		

Alfredo Castellanos Heuer	  		

María Eugenia Braña Escalera	  		

Sergio Sánchez García	  		

Carlos Fernández González	  		

Indigo Mexico Coöperatief U.A.	  		

Long Bar LatAm LLC	  		

Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, Fideicomiso de Administración y Custodia denominado como “DAIIMX/VOLARIS” e identificado bajo el número F/1405	  		

HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Administración número F/307750	  		

Total:	  		

I-1

Exhibit 1.1
 
SCHEDULE II

International Underwriter	  	Number of Firm
Securities
To  Be Purchased	
		
Deutsche Bank Securities Inc.	  		

Morgan Stanley & Co. LLC	  		

UBS Securities LLC	  		

Barclays Capital Inc.	  		

Cowen and Company, LLC	  		

Evercore Group L.L.C.	  		

Santander Investment Securities Inc.	  		

Total:	  		

II-1

Exhibit 1.1
 
SCHEDULE III
Time of Sale Prospectus
 
1.	Preliminary Prospectus issued [ — ], 2013	
 
2.	[identify all free writing prospectuses filed by the Company under Rule 433(d) of the Securities Act]	
 
3.	[orally communicated pricing information]	
 
III-1

Exhibit 1.1
 
SCHEDULE IV
Parties Subject to Lock-up
Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
Discovery Air Investments, L.P.
HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Emisión de Certificados Bursátiles F/262374
Blue Sky Investments, S.à r.l.
Emilio Diez Barroso Azcárraga
Ignacio Guerra Pellegaud
Pedro Carlos Aspe Armella
Alfredo Castellanos Heuer
María Eugenia Braña Escalera
Sergio Sánchez García
Carlos Fernández González
Indigo Mexico Coöperatief U.A.
Long Bar LatAm LLC
Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, Fideicomiso de Administración y Custodia denominado como “DAIIMX/VOLARIS” e identificado bajo el número F/1405
HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, Fideicomiso Irrevocable de Administración número F/307750
Enrique Beltranena
Fernando Suárez
Jaime Pous
Holger Blankenstein
 
IV-1

Exhibit 1.1
 
James Nides
Carlos Alberto González
Jimmy Zadigue
 
IV-2

Exhibit 1.1
 
EXHIBIT A
FORM OF LOCK-UP LETTER
[ — ], 2013
Deutsche Bank Securities Inc.
Morgan Stanley & Co. LLC
UBS Securities LLC
as Representatives of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
 
c/o	Deutsche Bank Securities Inc.	
60 Wall Street, 5th Floor
New York, New York 10005
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
UBS Securities LLC
299 Park Avenue
New York, New York 10171
and
Deutsche Securities, S.A. de C.V., Casa de Bolsa
Morgan Stanley México, Casa de Bolsa, S.A. de C.V.
UBS Casa de Bolsa, S.A. de C.V., UBS Grupo Financiero
Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander México
Evercore Casa de Bolsa, S.A. de C.V.
Ladies and Gentlemen:
The undersigned understands that (i) Deutsche Bank Securities Inc. (“ Deutsche Bank ”), Morgan Stanley & Co. LLC (“ Morgan Stanley ”) and UBS Securities LLC (“ UBS ”) propose to enter into an Underwriting Agreement (the “ Underwriting Agreement ”) with Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), a sociedad anónima bursátil de capital variable organized under the laws of the United Mexican States (“ Mexico ”), providing for the public offering (the “ International Public Offering ”) by the several International Underwriters to be named in the Underwriting Agreement (the “ International Underwriters ”), of the Company’s Series A common stock (the “ Common Stock ”) represented by Certificados de Participación Ordinarios (the “ CPOs ”, each representing a financial interest in one share of Common Stock), in the form of American Depositary Shares (the “ ADSs ” and,

together with the Common Stock, the CPOs and the Company’s Series B common stock, the “ Securities ”) and (ii) Deutsche Securities, S.A. de C.V., Casa de Bolsa, Morgan Stanley México, Casa de Bolsa, S.A. de C.V., Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander México, UBS Casa de Bolsa, S.A. de C.V., UBS Grupo Financiero and Evercore Casa de Bolsa, S.A. de C.V. (the “ Mexican Underwriters ”) propose to enter into a Mexican Underwriting Agreement (the “ Mexican Underwriting Agreement ”) with the Company, providing for the public offering in Mexico (the “ Mexican Public Offering ” and together with the International Public Offering, the “ Public Offering ”) by the several Mexican Underwriters to be named in a Mexican Underwriting Agreement (the “ Mexican Underwriting Agreement ”) of the Company’s Common Stock.
To induce the International Underwriters and the Mexican Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Deutsche Bank, Morgan Stanley and UBS on behalf of the International Underwriters and the Mexican Underwriters, it will not, during the period commencing on the date hereof and ending 180 days after the date of the final prospectus relating to the Public Offering (the “ Prospectus ”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Securities beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), by the undersigned or any other securities so owned convertible into or exercisable or exchangeable for any Securities, or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Securities or such other securities, in cash or otherwise or (3) file any registration statement with the Securities and Exchange Commission (the “ Commission ”) or the Mexican National Banking and Securities Commission (the “ Comisión Nacional Bancaria y de Valores ” or the “ CNBV ”) relating to the offering of any Securities or any securities convertible into or exercisable or exchangeable for any Securities. The foregoing sentence shall not apply to (a) transactions relating to Securities or other securities acquired in open market transactions after the completion of the Public Offering, (b) transfers of Securities (or any security convertible into any Securities) as a bona fide gift, or (c) distributions of Securities (or any security convertible into any Securities) to limited partners or stockholders of the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), each donee or distributee shall sign and deliver a lock-up letter substantially in the form of this letter, or (d) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Securities, provided that such plan does not provide for the transfer of Securities during the 180-day restricted period and no public announcement or filing under the Exchange Act regarding the establishment of such plan shall be required of or voluntarily made by or on behalf of the undersigned or the Company. In addition, the undersigned agrees that, without the prior written consent of Deutsche Bank, Morgan Stanley and UBS on behalf of the International Underwriters and the Mexican Underwriters, it will not, during the period commencing on the date hereof and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any Securities or any security convertible into or exercisable or exchangeable for any Securities. In addition, the undersigned hereby waives any and all notice requirements and right to compel registration under the Securities Act of 1933, as amended, of securities pursuant to any
 
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agreement, understanding, security or otherwise, including any registration rights agreement to which the undersigned and the Company may be party; provided that such waiver shall apply only to the proposed Public Offering and any other action taken by the Company in connection with the proposed Public Offering.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Securities (or any other securities so owned convertible into or exercisable or exchangeable for any Securities) except in compliance with the foregoing restrictions.
If:
(1) during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period;
the restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.
The undersigned shall not engage in any transaction that may be restricted by this agreement during the 34-day period beginning on the last day of the initial restricted period unless the undersigned requests and receives prior written confirmation from the Company or Deutsche Bank, Morgan Stanley and UBS that the restrictions imposed by this agreement have expired.
If the undersigned is an officer or director of the Company, (1) Deutsche Bank, Morgan Stanley and UBS each agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of any Securities, Deutsche Bank, Morgan Stanley and UBS will notify the Company of the impending release or waiver, and (2) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by Deutsche Bank, Morgan Stanley and UBS hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (i) the release or waiver is effected solely to permit a transfer not for consideration and (ii) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.
The undersigned understands that the Company, the International Underwriters and the Mexican Underwriters are relying upon this agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.
 
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The undersigned acknowledges that whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. The undersigned further acknowledges that any International Public Offering will only be made pursuant to the Underwriting Agreement and any Mexican Offering will only be made pursuant to the Mexican Underwriting Agreement, the terms of which are subject to negotiation between the Company and the selling stockholders and the International Underwriters and the Mexican Underwriters, as applicable.
Notwithstanding anything herein to the contrary, provisions of this letter shall be of no further force or effect if (1) prior to payment for and delivery of any CPOs in the form of ADSs in the Public Offering, the Company (A) withdraws the registration statement registering the shares of Common Stock and CPOs (the “ Registration Statement ”) or (B) deregisters all of the securities covered by the Registration Statement, (2) the Underwriting Agreement and the Mexican Underwriting Agreement are each executed but are terminated (other than with respect to those provisions of the Underwriting Agreement or the Mexican Underwriting Agreement which, by its terms, survive such termination) prior to payment for and delivery of any of the CPOs in the form of ADSs, or (3) the closing of the Public Offering has not occurred prior to December 31, 2013.

Very truly yours,	

(Name)	

(Address)	
 
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Exhibit 3.1
[Translation for informational purposes only]
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.
CORPORATE BY-LAWS
CHAPTER ONE
NAME, CORPORATE PURPOSE, TERM, DOMICILE AND NATIONALITY
FIRST. Name . The name of the Company is “Controladora Vuela Compañía de Aviación”, whose name shall always be followed by the words “Sociedad Anónima Bursátil” or the abbreviation thereof, “S.A.B.”
SECOND. Corporate Purpose . The purpose of the Company is to:
1. Acquire, under any legal title, shares, interests, participations, partnership interests, participation certificates, ordinary participation certificates or any other securities, as they may be denominated, in any kind of commercial, civil or any other kind of entity, domestic or foreign, whether participating in its incorporation or by subsequent acquisition and dispose, transfer and negotiate such shares, interests, participations, partnership interests, participation certificates or ordinary participation certificates, including any other instrument or security.
2. Pursuant to the Securities Market Law ( Ley del Mercado de Valores ) and provided that the shares of the Company are registered with the National Securities Registry ( Registro Nacional de Valores ), place or acquire shares representing its capital stock, without granting to its shareholders preemptive rights to subscribe such shares, as permitted pursuant to the Mexican Market Securities Law.
3. Hold any concession, license or authorization of any nature, derived from any legislation, granted by any foreign or Mexican federal, state or municipal governmental authority that is necessary to conduct any legal business in any jurisdiction.
4. Operate, by any means and in any form, including through any entity, association or vehicle of any nature and regardless of its nationality, any legal business.
5. Receive from other legal entities or persons, as well as render and provide to other legal entities or persons, either directly or through its affiliates or subsidiaries, any service necessary for the achievement of its goals or purposes such as administrative, financial, treasury, audit, marketing, preparation of balance sheets and budgets, preparation of programs and guidelines, analysis of operations results, assessment, productivity data, preparation of studies on capital availability, technical assistance and consulting or advisory services.

6. Obtain, acquire, develop, market, improve, use, grant and receive licenses, concessions, permits and any kind of authorizations, use under any legal title, any kind of patents, trademarks, invention certificates, commercial names, utility models, industrial designs, trade secrets and any other industrial property rights in any country and pursuant to any applicable law as well as copyright and related or similar rights, or options upon such rights.
7. Obtain and grant all kinds of loans, credits, financing and surety bonds ( fianzas ) (civil or commercial), as well as issue debentures, commercial paper, participation certificates, ordinary participation certificates, stock certificates ( certificados bursátiles) , debentures, promissory notes, bonds ( bonos ), warrants, bills of exchange and, in general, any negotiable instrument, in series or in bulk, or any instrument representing obligations of the Company, which may be issued at this moment or in the future, in the United Mexican States (“ Mexico ”) or abroad, pursuant to the laws of any jurisdiction, to be placed among the public investors or among certain determined investors, through public or private offer, with or without specific guarantee.
8. Grant any type of security interests in real property, including pledge, mortgage or any other type of guaranty permitted pursuant to applicable law (including foreign law), and execute any type of trusts or trust agreements, including guaranty trusts.
9. Grant any type of personal guaranties, as guarantor, joint guarantor or under any other capacity pursuant to the laws of any jurisdiction, and act as joint or several obligor, to guarantee obligations and debts of third parties (including subsidiaries and affiliates).
10. Execute any type of derivative financial transactions either in recognized stock markets or not, including without limitation, options, forwards and warrants pursuant to Mexican or foreign law, regardless of their denomination, the currency in which they are denominated, their settlement form, or the relevant underlying assets; in any case, such instruments will be used exclusively as hedge instruments.
11. Issue, endorse, guarantee, accept and negotiate all kinds of negotiable instruments of any nature governed under the laws of any jurisdiction.
12. Execute, supervise or hire, on its own behalf or on behalf of third parties, all kinds of constructions, real estate developments, urban developments, buildings or office facilities, operation centers or any type of establishment.
13. Lease, rent or enter into bailment, acquire, possess, exchange, transfer, convey, dispose or encumber the property or possession of any type of movable and real property and other real property rights or personal rights thereof, which are necessary or convenient for its purpose or for the operations or purposes of the commercial or civil entities, associations and institutions, of any nature and regardless of their denomination, in which the Company has any interest or participation of any nature.
 
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14. Act as broker, mediator, agent, legal representative, distributor or intermediary of any person or entity.
15. The production, transformation, adaptation, importation, exportation, lease and sale by any title of machinery, equipment, spare parts, materials, raw materials, industrial products and merchandise of any kind.
16. Enter into any kind of agreements, contracts, instruments and documents, including, but not limited to, purchase and sale agreements, subscription agreements, capitalization agreements, credit agreements, loan agreements, lease agreements (financial or otherwise), trust agreements, exchange agreements, management agreements, operation agreements, franchise agreements, services agreements, technical assistance agreements, consulting agreements, marketing agreements, agency agreements, joint venture agreements, association agreements and any other agreement pursuant to domestic or foreign law, as it may be necessary or convenient.
17. Issue non-subscribed shares, for their placement among the public, under the terms of Article 53 (fifty three) of the Mexican Securities Market Law or any provision replacing it, in accordance with the procedure set forth in these By-laws and the applicable law.
18. Undertake any action and create any committee as may be required or permitted by the applicable law, including the Mexican Securities Market Law.
19. In general, undertake any type of act, and execute any type of agreements, instruments and documents, including those of commercial and civil nature, permitted by the applicable law, in Mexico or in any other jurisdiction.
THIRD. Term . The term of the Company is indefinite.
FOURTH. Domicile . The domicile of the Company will be Mexico City, Federal District. The Company may establish offices, warehouses, distribution and sale centers, agencies, branches or any type of office necessary for its operations, and designate conventional domiciles in or outside Mexico, without considering that the domicile has changed.
FIFTH. Nationality . The Company is of Mexican nationality. Any foreigner who at the time of incorporation or at any time thereafter acquires shares of the Company, agrees with the Ministry of Foreign Affairs to be treated as Mexican national with respect to (a) the shares or rights acquired of the Company and (b) the properties, rights, governmental concessions, participations or interests owned by the Company and (c) any rights and obligations derived from the agreements entered into by the Company; and it shall be understood that each foreigner agrees not to invoke the protection of his government, under penalty, in case of failure to comply with such agreement, of forfeiture of the acquired rights and assets in favor of the Mexican nation.
 
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CHAPTER TWO
CAPITAL STOCK AND SHARES
SIXTH. Capital Stock and Shares . The capital stock of the Company is variable. The minimum fixed portion, not subject to withdrawal, shall be the sum of $65,346.00 (sixty five thousand three hundred forty six pesos 00/100) M.N. and represented by Class I shares, and the authorized variable stock shall be unlimited and represented by Class II shares.
The Company may issue shares of the following Series:
 
 	(a)	Series A shares, which will be ordinary and nominative (the “ Series A Shares ”), shall be only subscribed and paid for or acquired by Mexican individuals or Mexican entities with majority of Mexican capital (any of them, a “ Mexican Investor ” and, jointly, the “ Mexican Investors ”), in accordance with applicable laws on foreign investment and shall, at all times, represent at least 51% (fifty-one percent) of the outstanding capital stock of the Company.	
 
 	(b)	Series B shares, which will be ordinary and nominative, may be subscribed and paid for or acquired without any distinctions by Mexican Investors or foreign investors in accordance with the applicable laws on foreign investment in Mexico (the “ Series B Shares ”), being expressly stipulated that Series B Shares subscribed, paid-in or acquired by Mexican Investors shall qualify as Mexican investment for the purposes provided by the Mexican law. All Series B Shares issued by the Company shall not, at any time, exceed 49% (forty-nine percent) of the outstanding capital stock of the Company. Series B Shares will have the rights set forth in these corporate By-laws and those determined by the General Shareholders Meeting approving their issuance.	
The Series B Shares issued by the Company may be freely convertible into Series A shares, at any time (i) by notice in advance from the respective shareholder to the Secretary of the Board of Directors submitted at least 5 (five) business days prior to the conversion date requested or (ii) automatically, at the moment the respective shareholder transfers the Series B Shares he owns to a third party that is not an Affiliate (as such term is defined below) or to another shareholder of Series B Shares. The Secretary of the Board of Directors will proceed to convert the Series B Shares to Series A Shares, prior delivery by the respective shareholder of the shares certificates representing the Series B Shares to be converted, against delivery of shares certificates representing the relevant Series A Shares and registration of such exchange in the Stock Registry Book. Such conversion may be with respect to the totality or a part of the Series B Shares covered by the certificates delivered, and in the case of partial
 
4

conversion, the Secretary will issue new certificates reflecting the Series B Shares that were not converted and representing the Series A Shares in which such were converted.
In case the shareholder requesting the conversion is a foreign investor, at the moment of the conversion, the Company will contribute, on behalf of the relevant foreign investor, the Series A Shares corresponding to the trustee of the neutral investment trust, issuer of the ordinary participation certificates, as indicated by the shareholder or by any third party who is a Mexican Investor and as indicated by the foreign investor that requested the conversion.
The mechanics of conversion under this subsection shall be always observed and, in case of any breach hereof, the relevant conversion shall be ineffective against the Company, its shareholders or any third party and such conversion will not be registered in the Stock Registry Book by the Secretary of the Board of Directors of the Company.
 
 	(c)	Any other kind of Shares different from the shares mentioned in paragraphs (a) and (b) above, with special, preferred or limited rights, as determined by the General Shareholders Meeting of the Company and pursuant to Article 54 (fifty four) of the Mexican Securities Market Law, prior authorization from the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ).	
Shares other than ordinary shares, with no voting rights or with limited or restricted voting rights, may not exceed 25% (twenty five percent) of the capital stock that the National Banking and Securities Commission deems placed among the public investors. Non-voting shares shall not be taken into account when determining the quorum required for General Shareholders Meetings, whereas limited or restricted voting shares shall only be taken into account in order to legally hold meetings at Shareholders Meetings to which their holders shall be conveyed in order to exercise their voting right.
At the time of the issuance of non-voting shares or shares with limited voting rights, the General Shareholders Meeting will determine the rights corresponding to such shares. In any case, the non-voting shares or the shares with limited voting rights issued pursuant to the paragraph above will be of a series different to the Series A Shares and the Series B Shares.
SEVENTH. Treasury Shares; Placement . The Company may issue unsubscribed shares, which shall be kept in the treasury of the Company and delivered upon subscription and payment therefore.
Additionally, the Company may issue unsubscribed shares for its placement among public investors, pursuant to and subject to compliance with, the provisions set forth in Article 53 (fifty three) of the Mexican Securities Market Law, including the authorization
 
5

for a public offer from the National Banking and Securities Commission. The preemptive right referred to in Article 132 (one hundred thirty two) of the Mexican General Corporations Law and Clause Twelfth of these By-laws shall not apply to any increases of the capital stock made through public offerings made in accordance with Article 53 (fifty three) of the Mexican Securities Market Law or any regulation that may substitute it.
EIGHTH. Acquisition of Shares by the Company; Change of Control Provisions; Restrictions in the Transfer of Series B Shares.
(a) Acquisition of Shares by the Company . The Company may acquire shares representing its own capital stock or negotiable instruments or any other instruments that represent such shares without being subject to the prohibition established in the first paragraph of Article 134 (one hundred thirty four) of the Mexican General Corporations Law. The acquisition of its own shares shall take place in any national or foreign securities exchange or in any foreign market at market prices, except in case of public bids or auctions authorized by the National Banking and Securities Commission. The acquisition of its own shares shall be made against its net worth, in which case the Company may maintain the acquired shares with no need of reducing its capital stock, or, against its capital stock, in which case such shares shall become unsubscribed and be maintained in its treasury, with no need of an agreement by the General Shareholders Meeting.
The General Ordinary Shareholders Meeting shall expressly agree for each fiscal year, the maximum amount of resources that may be used for the acquisition of its own shares or negotiable instruments or other instruments representing them, with the only limitation being that the total resources for the corresponding acquisition may not exceed the sum of the total net profits of the Company, including the profits retained from previous years. In any event, the Company must be up to date in the payment of the obligations arising from debt instruments registered with the National Securities Registry. The Board of Directors shall appoint the responsible persons of the acquisition and placement of its own shares.
As long as the acquired shares belong to the Company, such shares may not be represented or voted in the General Shareholders Meetings, nor exercise any kind of corporate or economic rights with respect to such shares.
The acquisition and sale of shares under this Clause, the reports of the transactions about such transactions which shall be submitted to the General Ordinary Shareholders Meeting, the rules of financial information disclosure, as well as the manner and terms under which these transactions shall be reported to the National Banking and Securities Commission, the relevant stock exchange and the public investors, shall be subject to the provisions of the Mexican Securities Market Law and the general provisions issued by such Commission.
 
6

(b) Change of Control Provisions
 
 	(A)	Defined Terms	
For purposes of this paragraph of Clause Eighth, the following terms shall have the meanings ascribed to them:
“ Shares ” means any and all the shares representing the capital stock of the Company, of whatever class, series or name, or any security, instrument, right (detachable or not, represented or not by any instrument, or resulting from contractual provisions and not by any instrument) or instrument issued or created based on such shares, including ordinary participation certificates or depositary certificates in respect thereto, irrespective of their governing law or the market where they may be placed, executed or granted, or of its name, or that otherwise grants its holders rights to such shares or is convertible into or exchangeable for such shares, including financial instruments and operations known as derivative transactions, options, warrants or other similar or equivalent rights or instruments, or any complete or partial right in respect of or related to shares evidencing the capital stock of the Company, including in all cases within the definition, notwithstanding they may not be strictly considered as shares.
“ Voting Arrangement ” shall have the meaning ascribed to such term in this Clause Eighth.
“ Affiliate ” means (i) any company that Controls, is Controlled by, or is under common Control of any Person, and (ii) with respect to an individual, any of the parents, siblings, spouse, previous spouse, concubines, direct descendants, without limit of degree, the spouses and previous spouses of such descendants, as well as any trust or agreement or equivalent executed with the purpose to benefit such individuals.
“ Competitor ” means any Person involved, directly or indirectly, through any means and through any entity, vehicle or contract, in a preponderant or sporadic manner, in (i) the business of air transportation services of passengers, cargo, currier and/or mixed, and/or (ii) any activity in which the Company or any of its Subsidiaries is at any time involved, and which represents 5% (five percent) or more of the consolidated gross income of the Company and its Subsidiaries, provided that the Board of Directors may, on a case by case basis, agree to exempt any Person from falling into this definition, by passing resolutions pursuant to these By-laws.
“ Consortium ” means the group of entities, of any nature, form or denomination, irrespective of their denomination or jurisdiction of incorporation, connected amongst each other through one or more individuals that forming or not a Group of Persons, have Control over such entities, provided that, as part of the concept entity, a trust or similar contract shall be deemed included regardless of the applicable law under which such entities are incorporated or executed, and regardless of its denomination.
 
7

“ Control ”, “ Controls ” or “ Controlled ” means the ability of a Person or Group of Persons, whatever their nature or denomination (including a Consortium or Corporate Group) and irrespective of the jurisdiction of incorporation or existence, to carry out any of the following acts (i) impose, directly or indirectly, decisions in the general shareholders meetings or partners meetings or equivalent bodies, or to appoint or remove the majority of the directors or equivalent positions in the Company, (ii) maintain ownership of any class of Shares or rights derived from such Shares, that allow, directly or indirectly, the exercise of the voting right of more than 50% (fifty percent) of the capital stock of the Company, or (iii) direct, or in any other form determine, directly or indirectly, the management, the strategy or the principal policies of the Company, whether such ability results from holding securities or from a contractual arrangement or from any other means.
“ Relevant Directors ” means the Chief Executive Officer, as well as the individuals who by holding a position, post or commission in the Company or in the entities Controlled by the Company or Controlling such Company, make decisions that significantly transcend the administrative, financial, operational or legal position of the Company or the Corporate Group to which it belongs, without comprising within this definition the members of the Board of Directors or of the board of directors of the concerned Person.
“ Corporate Group ” means a group of entities, whatever their nature or denomination, irrespective of their jurisdiction of incorporation, organized under a scheme of direct or indirect equity participation, or otherwise, in which one entity Controls the other entities, provided that, as in the definition of entity, trusts or similar agreements shall be deemed included, regardless of the laws under which such trusts or similar arrangements are created or executed and regardless of their corporate name.
“ Group of Persons ” means the Persons, including Corporate Groups, that have entered into agreements, of any type, oral or written, apparent or implicit, pursuant to which they have agreed to make decisions in the same direction or to act jointly (even if not in the same direction). It shall be presumed, unless otherwise evidenced, that the following are “ Groups of Persons ”:
 
 	(a)	persons who are related by blood or law, up to the fourth degree, related by affinity up to the third degree, spouses and concubines; and	
 
 	(b)	legal entities, whatever their nature and irrespective of their jurisdiction of incorporation, that belong to the same Consortium or Corporate Group and the Person or Group of Persons that has Control over such legal entities, provided that, in the definition of entity, trusts or similar agreements, regardless of their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.	
 
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“ Significant Influence ” means the ownership of rights which allow, directly or indirectly, by any means, including through a Consortium, Group of Persons or Corporate Group, the exercise of voting rights in respect of at least 20% (twenty percent) of the capital stock of a Person, provided that, in the definition of entity, trusts or similar agreements, regardless their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“ 20% Participation ” means the ownership or title, of at least the 20% (twenty percent) or more of the shares, partnership interest or any other interest regardless of whether it is held individually or jointly, directly or indirectly through a legal entity, trust or similar figure, vehicle, enterprise, company, Consortium, Group of Persons or Corporate Group, or other form of economic or commercial association, of any nature and however denominated, having legal existence or not and irrespective of its jurisdiction of organization, with respect to any Person.
“ Person ” means any individual or legal entity, company, corporation, investment vehicle, trust or similar figure, vehicle, enterprise, or any other form of economic or commercial association or any of its Subsidiaries or Affiliates, of any nature and however denominated, having legal existence or not and irrespective of their jurisdiction of organization, or any Consortium, Group of Persons or Corporate Group, acting or attempting to act jointly, in concert or in coordination for purposes of this Clause.
“ Related Parties ” means the Persons that, with respect to a Person or the Company, fall into any of the following categories:
 
 	(a)	the Persons that Control or have Significant Influence or a 20% Participation in any legal entity that is part of the Corporate Group or Consortium to which the Company belongs, as well as the directors, managers, or Relevant Directors of the Persons comprising said Consortium or Corporate Group;	
 
 	(b)	the Persons with the decision making power, of any nature, in respect of any Person that belongs to the Corporate Group or Consortium to which the relevant Person or the Company belongs;	
 
 	(c)	the spouse or concubine and blood or civil relatives up to the fourth degree and relationship by affinity up to the third degree, of the individuals referred to in paragraphs (a) and (b) above, as well as the partners and co-owners of the persons mentioned in such paragraphs or those with whom they maintain business relationships;	
 
 	(d)	the legal entities that belong to the same Corporate Group or Consortium as the respective Person or Company;	
 
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 	(e)	the legal entities Controlled by any of the Persons referred to in paragraphs (a) through (c) above, or in which such Persons have Significant Influence.	
“ Subsidiary ” means any corporation in which a Person is the owner of the majority of the shares of its capital stock or in which a Person has the right to appoint the majority of the members of its board of directors (or equivalent body) or its manager.
 
 	(B)	Authorization by the Board of Directors for the Acquisition of Securities.	
Any and all acquisition or attempt of acquisition of Shares, of any kind, and whatever its form or denomination, that is intended to be performed by any means or title, whether it be through a single transaction or a succession of transactions, without any time limit between one and another, including for these purposes mergers, consolidations or other similar transactions, directly or indirectly, by one or more Persons, Related Parties, Groups of Persons, Corporate Groups or Consortiums, shall require, to be valid, the prior written authorization of the Board of Directors, every time that the number of Shares that is intended to be acquired, together with the Shares already held by the intended acquirer, directly or indirectly, results in a number equal or greater than any percentage of capital stock of 5 (five) or any multiple of 5 (five).
The prior approval by the Board of Directors shall be required regardless of whether the acquisition of the Shares is intended to be performed through a stock exchange, directly or indirectly, in one or more transactions of whatever legal nature, simultaneously or successively, without any time limit, in Mexico or abroad.
The prior written approval by the Board of Directors will also be required, for the execution of any agreement of any kind, in oral or written form, regardless of its name, as a result of which voting mechanisms or arrangements, or agreements for associated voting or joint voting, regardless of whether it is in the same direction, that imply a change in the Control of the Company, a 20% Participation or a Significant Influence in the Company (each, a “ Voting Arrangement ” and jointly, the “ Voting Arrangements ”).
For these purposes, any Person who severally or jointly with any other Person, any Related Party, Group of Persons, Corporate Group or Consortium seeks to carry out an acquisition (including mergers, consolidations or similar transactions), or enter into any Voting Arrangements, shall comply with the following:
 
 	1.	The interested parties must submit a written request for authorization to the Board of Directors. Such request must be addressed and delivered through a notary public to the Chairman of the Board of Directors at the domicile of the Company with a copy delivered to the Secretary of the Board of Directors of the Company. The request shall contain the following:	
 
 	a.	the number and class or series of the Shares which the respective Person and/or any Related Party, Group of Persons, Corporate Group or Consortium (i) owns or co-owns, whether directly or through any Person or Related Party, and/or (ii) in respect of which, they share or enjoy any right, whether it be pursuant to an agreement or otherwise, including any Voting Arrangement;	
 
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 	b.	the number and class or series of Shares that are intended to be purchased, whether directly or indirectly, by any means or pursuant to a Voting Arrangement;	
 
 	c.	the number and class or series of the Shares pursuant to which any right is intended to be shared, whether it is pursuant to a Voting Arrangement or otherwise;	
 
 	d.	(i) the percentage that the Shares referred to in paragraph a. above represent the total issued Shares of the Company , (ii) the percentage that the Shares referred to in paragraph a. represent of the total number of Shares of the same class or series, (iii) the percentage that the Shares referred to in paragraphs b. and c. above, represent of the total Shares issued by the Company, and (iv) the percentage that the Shares referred to in paragraphs b. and c. above represent of the total number of Shares of the same class or series of Shares;	
 
 	e.	the identity and nationality of the Person or Persons, Group of Persons, Corporate Group or Consortium that intends to purchase the Shares or execute the respective Voting Arrangement, provided that if any of them is a legal entity, investment company, trust or its equivalent, or any other vehicle, entity, company or form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, the identity and nationality of the partners or shareholders, settlors and trustees, members of the technical committee, successors, managers, members or associates, or its equivalents, shall be specified, as well as the identity and nationality of the Person or Persons that Control, directly or indirectly, the legal entity, investment company, trust, vehicle, entity, company or form of economic or commercial association, or equivalent, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, until the Person or individual who Controls or has any right, interest or final participation, of any nature, over the legal entity, trust or its equivalent, vehicle, entity, company or any form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, are identified;	
 
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 	f.	the reasons and objectives sought through the purchase of the Shares, subject of the requested authorization, or the execution of the relevant Voting Arrangement specifically mentioning if it intends to purchase, directly or indirectly, (i) any additional Shares to the ones referred to in the authorization request, (ii) a 20% Participation in the Company, (iii) the Control of the Company, or (iv) Significant Influence in the Company;	
 
 	g.	if it is, directly or indirectly, a Competitor of the Company or of any Subsidiary or Affiliate of the Company and if it has the legal capacity to purchase the Shares or enter into the relevant Voting Arrangement, in accordance with the provisions of these By-laws and the applicable law; where appropriate, if it is in the process of obtaining any consent or authorization, indicate the person that will grant the consent or authorization, and the terms and time period within which it expects to obtain it; and if the Person or Persons that intend to purchase the relevant Shares have Related Parties that may be considered a Competitor of the Company or of any Subsidiary or Affiliate of the Company, or if it has any economic or business relationship with a Competitor or any interest or participation whether in the form of an equity participation in or in the management or operation of a Competitor, directly or by means of any Person or Related Party;	
 
 	h.	the source of the funds to be used to pay the price for the acquisition of the Shares intended to be acquired; in the event that the source of the funds is a loan or other financing, the intended acquirer shall specify the identity and nationality of the Person providing such funding, the financial statements or other proof that evidences the solvency of such Person and shall deliver, as an attachment to the authorization request, the documentation evidencing and explaining the terms and conditions of such financing, including a commitment, signed by such Person, not subject to any material conditions, which shall include any collateral agreed upon to be provided. The Board of Directors may request that the intended acquirer (i) post a bond ( fianza ), (ii) create a security trust, (iii) provide an irrevocable letter of credit, (iv) make a deposit, or (v) provide any other security or guaranty approved by the Board of Directors, to secure up to 100% (one hundred percent) of the price of the Shares that are intended to be purchased or that are the subject of the relevant Voting Arrangement, designating the Company or the shareholders, through the Company, as the beneficiaries, and to secure the compensation for any damages and losses that the Company or its shareholders may suffer as a consequence of any misstatements of the information provided or as a consequence of the request or as a result of any action or omission of the applicant, directly or indirectly;	
 
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 	i.	if it has received funding in the form of a loan or in any other form, from a Related Party or Competitor or has provided funding to a Related Party or Competitor, to obtain the funds to pay the Shares intended to be acquired or to enter into the relevant Voting Arrangement;	
 
 	j.	the identity and nationality of the financial institution to act as intermediary, in the event that the relevant acquisition is carried out through a tender offer;	
 
 	k.	if applicable, because of the need of a public offering, a copy of the information memorandum or similar document that is intended to be used in connection with the purchase of the Shares or in connection with the transaction or agreement at issue, and a statement that the acquisition has been approved or submitted for approval by the competent authorities (including the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ); and	
 
 	l.	an address in Mexico City, Mexico, to receive notices relating to its request.	
The Board of Directors may determine, in the event that certain information is impossible to produce at the time of submitting the request, that such information be omitted from the request and the Board of Directors may waive the requirement to comply with any of the above-mentioned requirements.
 
 	2.	Within 8 (eight) business days following the date in which the request for authorization referred to in paragraph 1 above is received, the Chairman or Secretary of the Board of Directors shall call for a meeting of the Board of Directors to discuss and decide on the request for authorization. The call for the meeting of the Board of Directors shall be made in writing and sent by the Chairman or the Secretary to each of the Directors or alternate members of the Board Members with the anticipation provided for in these By-laws, by certified mail, courier, or e-mail, to the addresses designated by the members of the Board of Directors in writing for purposes of this Clause of the By-laws. The calls shall specify the date, time and place of the meeting and the relevant Agenda.	
 
 	3.	The Board of Directors shall resolve any request for authorization that is submitted pursuant to this Clause of the By-laws, within 90 (ninety) calendar days following, and counted from, the date in which the request was filed, provided that the request contains all the information that is required pursuant to this Clause. If the Board of Directors does not make a decision on the authorization within the 90 (ninety) calendar day period referred to above, the authorization request shall be deemed as denied.	
 
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The Board of Directors may request that the person who intends to acquire the relevant shares or to execute the relevant Voting Arrangement, provide any additional documentation, and any clarifications it deems necessary, as well as to hold any meetings that the Board of Directors deems convenient, to decide on the requested authorization for the acquisition; provided that the terms set forth in this provision shall not begin running, and the request will not be considered completed, until the Person that intends to acquire the Shares or enter into the relevant Voting Arrangement, provides all additional information and clarifications that the Board of Directors deems necessary.
 
 	4.	The attendance of at least 75% (seventy five percent) of the principal or alternate members of the Board of Directors will be required to consider a meeting called to resolve any matter related to the authorization of an acquisition or an agreement in terms of this Clause, to be validly installed in first or subsequent calls. The resolutions will be valid when made by 75% (seventy five percent) of the members of the Board of Directors. The meetings of the Board of Directors will be called for and the resolutions adopted therein shall relate solely to the request for authorization referred to in this Clause (or fragments of such request for authorization).	
 
 	5.	In the event that the Board of Directors authorizes the intended acquisition of Shares or the entering into of the Voting Arrangement, and such acquisition, transaction or agreement results in (i) the acquisition of a 20% Participation or greater, or (ii) a change in Control, or (iii) the acquisition of a Significant Influence with respect to the Company, notwithstanding if such authorization was granted, the intended acquirer or party entering into the Voting Arrangement shall have to make a public offering to acquire 100% (one hundred percent) of the outstanding Shares of the Company minus one Share, for a price, in cash, that is the higher of the following:	
 
 	a.	the book value per Share, according to the last quarterly financial statements approved by the Board of Directors or filed before the National Banking and Securities Commission or any stock exchange; or	
 
 	b.	the highest closing price per Share traded in the stock exchange, over the 365 (three hundred sixty five) calendar days prior to the date of the Board of Directors’ authorization or request; or	
 
 	c.	the highest purchase price per Share paid at any time, by the Person that, severally or jointly, directly or indirectly, intends to acquire the Shares or to enter into a Voting Arrangement authorized by the Board of Directors,	
 
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plus in each case, an additional premium equal to 30% (thirty percent) of the price per Share payable in connection with the acquisition whose authorization is requested, provided however , that the Board of Directors may increase or decrease the amount of any such premium, taking into account the opinion of a reputable investment bank.
The public purchase offering referred to in this Clause must be completed within 90 (ninety) natural days from the date in which the acquisition or the execution of the Voting Arrangement is authorized by the Board of Directors, pursuant to the procedure set forth in this Clause.
The price paid for each Share shall be the same, regardless of the class or series of such Share.
In the event that on or before the relevant acquisition or execution of the Voting Arrangement, the Board of Directors receives another written request for authorization to purchase the relevant Shares (including through a merger, consolidation or similar transaction), with terms more favorable for the shareholders of the Company, then the Board of Directors shall be entitled to consider and, if appropriate, approve the second request and suspend the previously approved transaction, and it shall submit both bids to the consideration of the Board of Directors, provided that , any approval shall be granted without affecting the obligation to carry out a public tender offer pursuant to the terms of this Clause and applicable law.
 
 	6.	Acquisitions of Shares or a Voting Arrangement that would not result in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company or (iii) the acquisition of Significant Influence with respect to the Company, may be recorded in the Shareholders Registry Book of the Company once they have been duly authorized by the Board of Directors and concluded. Acquisitions resulting in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company, or (iii) the acquisition of Significant Influence with respect to the Company, will not be recorded in the Shares Registry Book of the Company, until the public offer referred to in this Clause has been completed. Thus, the rights under the acquired Shares shall not be capable of being exercised until the relevant public offer has been completed.	
 
 	7.	The Board of Directors may deny its approval of the requested acquisition of Shares or the execution of the proposed Voting Arrangement, in which case it shall inform the proposed acquirer in writing the grounds and reasons for such denial, and it may likewise inform the acquirer of the terms and conditions pursuant to which it would be in a position to authorized the proposed acquisition of Shares or Voting Arrangement. The proposed acquirer will have the right to request and hold a meeting with the Board of Directors or an ad-hoc committee appointed by the Board of Directors, to explain, expand or clarify the terms of the request, as well as to present its position in a written document for the Board of Directors.	
 
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 	(C)	General Provisions.	
For purposes of this Clause, it shall be deemed that a Person is the owner of all Shares owned by such Person, as well as of all of the Shares (i) owned by any Related Party, or (ii) any legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that holds title when that legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, is Controlled by the mentioned Person. Furthermore, when one or more Persons are seeking to purchase Shares jointly, in a coordinated or concerted manner, through a single transaction or successive transactions, regardless of their legal form, it shall be deemed, for the purposes of this Clause, as a single Person who owns all such Shares. The Board of Directors may determine other cases in which one or more Persons that intend to acquire Shares or enter into Voting Arrangements shall be deemed as a single Person for purposes of this Clause. In making this determination, the Board of Directors may consider any legal or de facto information that is available.
In order to evaluate any request for authorization submitted to the Board of Directors in terms of this Clause, the Board of Directors shall take into consideration any information that they deem appropriate, taking into consideration the best interests of the Company and its shareholders, including considerations as to the financial, market, business, moral and economic solvency of intended acquirer, the source of the funds to be used in the acquisition, potential conflicts of interest, protection of minority shareholders, the expected benefits for the future development of the Company, the impact in the Company’s plans and budgets on the quality, accuracy and veracity of the information submitted to it in terms of this Clause, the viability of the offer, the price offered, the conditions of the bid, the identity and credibility of the bidders (as far as may be determined and without any liability to the Board Members), the reasons for the execution and the temporality of the Voting Arrangement, the sources of funding, if any and time for completion, and any others that they deemed appropriate.
Any acquisition of Shares or Voting Arrangement restricted by this Clause, entered into without the prior written authorization of the Board of Directors shall grant no rights to the holders of the Shares acquired or subject to any such Voting Arrangement and such holders shall not be able to vote any such Shares at any Shareholders’ Meeting of the Company, nor exercise any economic rights thereunder, which shall be the acquirer or group of acquirers’ sole responsibility. The Shares acquired pursuant to any such acquisitions or Voting Arrangements shall not be recorded in the Shareholders Registry Book of the Company, and any entries previously made shall be canceled and the Company will not recognize or give any value to the registration or listings referred to in Article 290 (two hundred ninety) of the Securities Exchange Act ( Ley del Mercado de Valores ), therefore the ownership of the Shares shall not be capable of being proved, and
 
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the right to attend any Shareholders Meeting shall not be capable of being credited, nor shall the holders of such Shares be able to exercise any action, including those of a procedural nature.
The authorizations granted by the Board of Directors pursuant to this Clause will cease to be effective if the information and documentation on which such authorization was based is false or ceases to be true and/or legal.
In the event that any transaction entered into is in violation of this Clause, the Board of Directors may agree upon the following measures amongst others: (i) the reversal of the transaction, with mutual restitution between the parties, when possible, or (ii) the transferring of the relevant Shares to an interested third party approved by the Board of Directors at the minimum price that the Board of Directors establishes.
The provisions in this Clause will not be applicable to (a) the acquisitions or transfers of Shares made by succession, either by inheritance or legacy, or (b) the acquisition or transfer of Shares, or any other agreement or arrangement, (i) by the Person or Persons that collectively have the Control of the Company or Significant Influence in the Company as of the date in which this Clause is approved by the General Shareholders Meeting (that is, immediately before the initial public offering subscription of shares), (ii) by any legal entity, trust, vehicle, entity, company or any other form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that is under the Control of the Person or Persons referred to in subsection (i) above, (iii) by the estate of the Person or Persons referred to in subsection (i) above; (iv) by the ascendants or descendants in a direct line within the third degree of the Person or Persons referred to in subsection (i) above, (v) by the Person or Persons referred to in subsection (i) above, when purchasing the Shares from any company, trust, vehicle, entity, company, any form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, ascendants or descendants referred to in subsections (iii) and (iv) above, and (vi) by the Company or its Subsidiaries, or by trusts created by the Company or its Subsidiaries or by any other Person Controlled by the Company or by its Subsidiaries, or (c) the future transfer of Shares into a trust or similar entity by the existing shareholders of the Company on the date of the public offering of Shares in Mexico, made at any moment in the future.
The provisions contained in this Clause shall be applicable in addition to the provisions of the statutes or laws and mandatory general provisions related to securities acquisitions that are effective in the market in which the Shares, or other securities related to these or rights arising thereof are listed; in case that any provision in this Clause contravenes, in whole or in part, any provision in such laws, the provisions of the relevant statute and mandatory general provisions related to securities acquisitions shall prevail.
This Clause shall be filed for registration in the Public Registry of Commerce of the domicile of the Company and shall be expressly included in the share certificates representing the capital stock of the Company, in order to ascertain effect against third parties.
 
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This Clause may only be modified or deleted from the By-laws, through a favorable resolution of the shareholders with at least 90% (ninety percent) of the outstanding Shares at the moment of approval, elimination or relevant amendment, provided that no shareholders representing at least 5% (five percent) of the outstanding Shares of the Company at the time of the vote, vote against any such elimination or amendment.
(c) Restrictions on the Transfer of Series B Shares.
Series B Shares will only be transferable in transactions of any nature and any kind, including, for these purposes, mergers, consolidations or other similar transactions, directly or indirectly, to the shareholders holding Series B Shares or to an Affiliate of the shareholders holding Series B Shares precisely on the date of the initial public offering subscription of the Shares. In the event that any transfer of Series B Shares contravenes the preceding or is made to any third party, such Series B Shares will be automatically converted into Series A Shares and the provisions established in this Clause will be applicable.
NINTH. Shareholdera’ Registry . The Company shall maintain a Shareholders Registry Book, pursuant to Articles 128 (one hundred twenty eight) and 129 (one hundred twenty nine) of the Mexican General Corporations Law and in accordance with Article 290 (two hundred ninety) of the Mexican Securities Market Law. The Shareholders Registry Book of the Company shall be kept by the Secretary of the Board of Directors of the Company, unless the shareholders or the Board of Directors appoint a different person to perform such registration. The Company may, under the relevant legal terms, entrust to securities deposit institutions, the registration of shares and the registration of the respective entries in the Shareholders Registry Book.
The Company shall recognize, as legitimate holder of the shares representing the capital stock, to any person registered as such in the Shareholders Registry Book.
In the event that the shares representing the capital stock of the Company are placed in stock exchanges, their registration in such Book will suffice to indicate such situation and the securities deposit institutions in which such certificate or certificates representing such shares are being held, and, if so, the Company shall recognize as shareholders, those who evidence such capacity with the record issued by the relevant securities deposit institution, supplemented by a list of the relevant shareholders prepared by those who appear as depositors in such registries, in accordance with Article 290 (two hundred ninety) of the Mexican Securities Market Law.
The Shareholders Registry Book of the Company shall be closed as of the date in which the certificates are issued in accordance with Article 290 (two hundred ninety) of the Mexican Securities Market Law, until the next business day after the respective Meeting was held. During such periods no registration shall be made in the Book.
 
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TENTH. Acquisition of Shares by Related Parties . The legal entities in which the Company has the power to (i) impose decisions directly or indirectly at the General Shareholders Meetings thereof, or designate and remove most of the Directors, administrators or equivalent officers thereof, (ii) hold rights enabling it to directly or indirectly cast votes representing more than 50% (fifty percent) of the capital stock thereof, or (iii) directly or indirectly direct the management, strategy or main policies thereof, either by holding securities, by means of an agreement or contract or through any other means, shall not be able to acquire, directly or indirectly, shares from the capital stock or negotiable instruments or by any other instrument that represents such shares, except (a) for acquisitions to be made by investment companies or (b) in the case that entities in which the Company participates as a shareholder acquire shares of the Company to comply with options or share purchase plans that are formed or can be designed or subscribed to employees or officers of such companies or the Company, provided that the number of shares acquired for this purpose does not exceed 25% (twenty percent) of total outstanding shares of Company.
ELEVENTH. Increases of Capital . Except for (i) capital increases through the issuance of unsubscribed shares for their placement among the public investors pursuant to Article 53 (fifty three) of the Mexican Securities Market Law and Clause Seventh of these By-laws, (ii) capital increases resulting from the placement of the Company’s own shares referred to in paragraph (a) of Clause Eighth above, (iii) the conversion of convertible obligations for shares and the shares issued for such purposes, and (iv) the shares issued as a result of mergers, regardless of the Company’s nature with respect to it (that is, as a merged or as a merging company), capital increases shall be agreed upon by means of a resolution of the General Ordinary or Extraordinary Shareholders Meeting, as applicable, pursuant to the provisions of the Mexican General Corporations Law and the rules provided in this Clause.
Increases in the minimum fixed portion of the capital stock shall be approved through a resolution of the General Extraordinary Shareholders Meeting pursuant to these By-laws, with the corresponding amendment to the By-laws.
Increases in the variable portion of the capital stock shall be approved upon resolution of the General Ordinary Shareholders Meeting pursuant to these By-laws, provided that the corresponding minutes shall be formalized before a certifying public officer, without the need to register the corresponding public deed in the Public Registry of Commerce of the domicile of the Company.
When resolving on capital increases, the General Shareholders Meeting approving such increase or any subsequent General Shareholders Meeting, shall determine the terms and conditions under which such increase shall be carried out, and such authority may be delegated to the Board of Directors.
 
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The shares that upon resolution of the Meeting are approved for issuance and to be delivered upon their subscription, may be offered for subscription and payment by the Board of Directors or by the delegate or the special delegates, according to the authority granted by the relevant General Shareholders Meeting; provided , that , except for the cases described above, the preemptive rights set forth in Clause Twelfth below shall be observed.
The increases in the capital stock may be made through the capitalization of the capital stock account in accordance with the provisions of Article 116 (one hundred sixteen) of the Mexican General Corporations Law by means of payment in cash or in kind, through the capitalization of liabilities or through any other means permitted by the applicable law. In capital increases through the capitalization of capital stock accounts, all shares shall have the right to their respective proportion of the increase, without having to issue new shares representing such increase.
Except for the capital increases resulting from the placement of the Company’s own shares acquired by the Company in the terms of the first part of Clause Eighth of these By-laws, every increase of the capital stock shall be registered in the Capital Variations Book that for such purpose the Company shall maintain pursuant to the provisions of Article 219 (two hundred nineteen) of the Mexican General Corporations Law, through the Secretary of the Board of Directors.
TWELFTH. Preemptive Right . In capital increases, the shareholders shall have the preemptive right to subscribe the new shares issued in proportion to the number of shares they hold at the time of the resolution approving the relevant capital increase. This right shall be exercised within the term established for such purpose by the General Shareholders Meeting that approved the capital increase, which in no case shall be less than 15 (fifteen) calendar days as of the date of publication of a notice for such purposes in the official gazette of the Company’s corporate domicile. The shareholders shall not have the preemptive right referred to in this Clause in respect of the shares issued (i) by reason of the merger or a similar transaction of the Company (regardless whether the Company is the merged or the merging company), (ii) for the conversion of convertible obligations for shares of the Company or as a result of such conversion, (iii) for the placement of the Company’s own shares acquired under the terms of the first part of Clause Eighth of these By-laws, and (iv) for its public offering in terms of Article 53 (fifty-three) of the Securities Market Law and Article Seventh of these By-laws.
In case that after the period during which the shareholders may exercise their preemptive right, any shares remain unsubscribed, such shares may be offered for subscription and payment, in the conditions and terms determined by the General Shareholders Meeting which approved the capital increase, or if so resolved by the Meeting, in the terms established by the Board or Directors of the delegates appointed by the General Shareholders Meeting.
 
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In case the shares are not subscribed and paid, they may remain in the treasury of the Company or may be canceled, in both cases prior reduction of the capital stock as agreed by the Meeting.
THIRTEENTH. Capital Reduction . Except for capital reductions resulting from the right of separation provided for by the Mexican General Corporations Law, and those resulting from the acquisition of the Company’s own shares referred to in paragraph (a) of Clause Eighth above, the capital stock may only be reduced upon resolution of the General Ordinary or Extraordinary Shareholders Meeting, as applicable, as provided in this Clause.
Reductions in the minimum fixed portion of the capital stock shall be agreed upon resolution of the General Extraordinary Shareholders Meeting pursuant to these By-laws. In such case, these By-laws shall be amended pursuant to the provisions contained in Article 9 (nine) of the Mexican General Corporations Law, except for capital reductions resulting from the acquisition of own shares referred to in paragraph (a) of Clause Eighth above.
Reductions in the variable portion of the capital stock shall be agreed upon resolution of the General Ordinary Shareholders Meeting pursuant to these By-laws, provided that the corresponding minutes shall be formalized before a certifying public officer, without the need to register the corresponding public deed in the Public Registry of Commerce; provided , however , that, when the shareholders exercise their right of separation or in case of capital reductions resulting from the acquisition of the Company’s own shares referred to in paragraph (a) of Clause Eighth above, no Shareholders Meeting resolution shall be necessary.
Capital reductions may be made in order to absorb losses, in the event of exercising the right of separation, as a result of the acquisition of the Company’s own shares in the terms established in paragraph (a) of Clause Eighth of these By-laws or as otherwise permitted under applicable law.
Capital reductions to absorb losses shall be made proportionately among all the shares representing the capital stock, without need to cancel the shares, since such shares do not have par value.
Pursuant to Article 50 (fifty) of the Securities Market Law, the holders of shares or negotiable instruments representing the variable portion of the capital stock of the Company shall not have the right of withdrawal referred to in Article 220 (two hundred twenty) of the Mexican General Corporations Law.
Except for capital reductions resulting from the acquisition of shares of the Company made in the terms of the first part of Clause Eighth of these By-laws, every reduction of the capital stock shall be registered in the Capital Variations Book that for such purpose the Company shall maintain pursuant to the provisions of Article 219 (two hundred nineteen) of the Mexican General Corporations Law, through the Secretary of the Board of Directors.
 
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FOURTEENTH. Redemption of Shares . The General Extraordinary Shareholders Meeting may agree upon the redemption of shares with distributable profits, in compliance with the provisions of Article 136 (one hundred thirty-six) of the Mexican General Corporations Law or by any other fair means to the shareholders.
In case of shares listed on a stock exchange, the redemption shall be made through the acquisition of its own shares in the relevant stock exchange, pursuant to the system, prices, terms and other conditions agreed for this purpose by the Shareholders Meeting, which may delegate to the Board of Directors or to the special delegates the power to determine the system, prices, terms and other conditions for such purposes.
The redeemed shares and the certificates or titles representing them shall be canceled, with the corresponding reduction in the capital stock of the Company.
FIFTEENTH. Cancellation of Registration . In case of cancellation of the registration of the shares or certificates representing the capital of the Company in the National Securities Registry, whether upon request of the Company with a prior resolution of the General Extraordinary Shareholders Meeting adopted by the affirmative vote of the holders of shares or certificates representing whether voting shares, limited voting shares or non-voting shares, the 95% (ninety five percent) of the capital stock of the Company, or by resolution of the National Banking and Securities Commission, the Company shall make, prior to such cancellation, a public offer to purchase within a 180 calendar day period following the request of the Company or the resolution of the National Banking and Securities Commission, as applicable, in accordance with Article 108 (one hundred eight) of the Mexican Securities Market Law, Articles 96 (ninety six), 97 (ninety seven), 98 (ninety eight), sections I and II and, 101 (one hundred one) first paragraph, and other applicable Articles of the Mexican Securities Market Law
The shareholders forming the control group (as defined in the Mexican Securities Market Law) shall have subordinated liability with the Company for the fulfillment of the terms contained in this Clause when a cancellation resolution is issued by the Mexican National Banking and Securities Commission.
In order to meet the requirements set forth in Article 108 (one hundred eight) of the Mexican Securities Market Law, and in accordance with Article 101 (one hundred one) of the Mexican Securities Market Law, the Board of Directors of the Company shall prepare and disclose to public investors, within 10 (ten) business days from the start of the public offer to purchase, after listening to the Audit and Corporate Practices Committee, an opinion on the purchase price of the public offering and the conflicts of interest that each of the members of the Board of Directors may have with respect to the offering, if any. Such opinion may be accompanied with another opinion by an independent expert. The members of the Board of Directors and the Chief Executive Officer of the Company shall further disclose to the public investors, in addition to the aforementioned opinion, their decision with respect to the shares or securities referring to shares owned by them.
 
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SIXTEENTH. Certificates Representing the Shares . The definitive or provisional share certificates representing the shares of the Company shall be nominative and may represent one or more shares, they shall include the requirements contained in Articles 124 (one hundred twenty four) and 125 (one hundred twenty five) of the Mexican General Corporations Law, as well as the indication of its series, and shall contain Clause Fifth and Eighth of these By-laws, and will be signed by 2 (two) members of the Board of Directors.
Either When share certificates deposited at a securities deposit institution or when such institutions receive directly from the Company securities arising from the exercise of economic rights on behalf of the depositors thereof, the Company may, with the prior approval of the securities deposit institution, deliver to it multiple share certificates or one single share certificate covering the shares subject of the issuance and the deposit, in which case the institutions shall make the necessary entries to determine the rights of the respective depositors. In such case, the share certificates representing such shares shall be issued indicating that the shares are deposited at the relevant securities deposit institution, without being necessary to mention the name, address or nationality of the holder in the document.
The Company may issue certificates without coupons attached to the certificates. In such case, the certificates issued by the relevant securities deposit institution shall be used as coupons for all legal purposes, in terms of the Securities Market Law.
CHAPTER THREE
SHAREHOLDERS’ MEETINGS
SEVENTEENTH. The Shareholders Meeting . Shareholders Meetings shall be General or Special, and General Meetings may be Ordinary or Extraordinary. The Shareholders Meetings is the supreme body of the Company. Extraordinary Shareholders Meeting shall be those conveyed to discuss any of the matters set forth in Article 182 (one hundred eighty two) of the Mexican General Corporations Law, and those held to deliberate any of the matters set forth in Clause Twenty-Second hereunder. Ordinary Meetings shall be those convened to discuss any of the matter set forth in Article 181 (one hundred eighty one) of the Mexican General Corporations Law and to deliberate any other matter not reserved to Extraordinary Meetings, including those held to deliberate any of the matters set for the in Clause Twenty-Second, section 1, of these By-laws.
Special Meetings shall be those held in order to discuss matters that may affect the rights of one series of shares. Attendance quorum, voting, and formalization of minutes of Special Meetings shall be subject to the provisions applicable to General Extraordinary Meetings.
 
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EIGHTEENTH. Calls . Calls for Shareholders Meetings shall be made by the Board of Directors, the Secretary of the Board of Directors or the Chairman of the Board of Directors, or the Audit and Corporate Practices Committee. Shareholders holding shares with voting rights, even those with limited or restricted voting rights, who individually or jointly hold 10% (ten percent) of the Company’s capital stock may request the Chairman of the Board of Directors and the Chairman of the Audit and Corporate Practices Committee to convene a General Shareholders Meeting without the need to comply with the percentage required by Article 184 (one hundred eighty four) of the Mexican General Corporations Law.
Any holder of 1 (one) ordinary share shall have the right set forth in the last sentence of the previous paragraph, in any of the events referred to in Article 185 (one hundred eighty five) of the Mexican General Corporations Law which is conferred to the Board of Directors or the Audit and Corporate Practices Committee. If no call is made within 15 (fifteen) calendar days following the date in which the request was made, a Civil or District Judge of the Company’s domicile may convene the Meeting at the request of any interested shareholder, who shall evidence the ownership of the shares.
Calls for General Ordinary Meetings, Extraordinary or Special Meetings shall be published in the official gazette or in any of the following newspapers: “ El Universal ”, “ Reforma ” or “ El Financiero ”, no less than fifteen (15) calendar days before the date of the meeting. Calls shall contain the Agenda of the Meeting and shall be signed by the person or persons responsible for such call.
From the date on which the call of meeting is published, any information and documents related to each of the items of the Agenda shall be made immediately available to the shareholders at the Company’s offices, at no charge, including forms referenced in Article 49 (forty nine), section III of the Securities Market Law.
In accordance with the second paragraph of Article 178 (one hundred seventy eight) of the Mexican General Corporations Law, the unanimous resolutions adopted without holding a Meeting by the shareholders with voting rights or with the relevant special series, shall be, for all legal effects and purposes, as valid as those adopted at a General or Special meeting, provided that they are confirmed in writing.
NINETEENTH. Evidence of Ownership . Persons registered as shareholders in the Shares Registry Book, as well as those who submit certificates issued by S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V. , or any other institution acting as a securities depository, complemented with the depositor lists of such institutions, shall have the right to appear or be represented at the Shareholders Meetings, for which the provisions of the Mexican General Corporations Law shall be applicable. The members of the Company’s Board of Directors shall not represent any shareholder at the Company’s Shareholder Meetings. Shareholders may be represented at the Meetings by the person or persons designated for such purpose by means of a power of attorney granted in the Company’s proxies form, which must meet the requirements set forth in paragraph III of Article 49 (forty nine) of the Securities Market Law and that the Company shall maintain
 
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available through the intermediaries of the securities market or in the offices of the Company, within at least fifteen (15) calendar days prior to holding a Shareholders Meeting, and the Secretary of the Board shall examine the compliance of this disposition and shall inform the same to the Shareholders Meeting making the corresponding notations in the minutes of the Shareholders Meeting.
In order to attend to the relevant Special or General Shareholders Meeting, the corresponding shareholder shall evidence to the Secretary of the Board Directors, that he is not under any of the situations that require the approval of the Board of Directors of the Company referred to in Clause Eighth of these By-laws.
TWENTIETH. Meeting Minutes . The Shareholders’ Meeting minutes shall be prepared by the Secretary, will be transcribed in the corresponding book and will be signed by the Chairman, Secretary and the appointed tellers.
TWENTY-FIRST. Chairman and Secretary . Shareholders Meetings shall be presided by the Chairman of the Board of Directors and when absent, by the person appointed by the majority vote of the shareholders.
The Secretary of the Shareholders Meetings shall be the Secretary of the Board of Directors or by the Assistant Secretary, and when absent, the person designated by the majority vote of the shareholders. The Chairman shall appoint 2 (two) tellers within the shareholders, representatives or guests attending the relevant Meetings, in order to count the number of shares represented at the Meeting, determine if the legal quorum has or has not been met and, as the case may be, count the votes cast.
TWENTY-SECOND. 1. General Ordinary Meetings . General Ordinary Shareholders Meetings shall be held at least once a year within the first four (4) months following the closing of each fiscal year, in order to discuss the matters set forth in the corresponding Agenda, as well as any of the following matters:
 
 	(a)	discuss, approve or modify, and determine any matters arising in connection with the reports of the Chief Executive Officer and the Board of Directors, regarding the Company’s financial situation and other accounting documents as set forth in Article 172 (one hundred seventy two) of the Mexican General Corporations Law and the Securities Market Law;	
 
 	(b)	discuss, approve or modify the reports of the Chairman of the Audit and Corporate Practices Committee;	
 
 	(c)	discuss, approve or modify the report rendered by the Chief Executive Officer pursuant to Article 44 (forty four), Section XI, of the Securities Market Law;	
 
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 	(d)	discuss, approve or modify the report of the Board of Directors submitted in terms of Article 172 (one hundred seventy two) subsection b) of the Mexican General Corporations Law and Article 28 (twenty eight), Section IV, of the Securities Market Law;	
 
 	(e)	learn the opinion of the Board of Directors in connection with the content of the report rendered by the Chief Executive Officer;	
 
 	(f)	decide on the use of the Company’s profit, if any;	
 
 	(g)	appoint the members of the Board of Directors, including its alternates, the Secretary and the Assistant Secretary, and appoint or remove the Chairman of the Audit and Corporate Practices Committee;	
 
 	(h)	if applicable, set the maximum amount of resources that may be destined to repurchase the Company’s shares;	
 
 	(i)	approve any transactions intended by the Company or the companies under its control, that in a fiscal year represent 20% (twenty percent) or more of the Company’s consolidated assets, based upon figures of the immediately preceding quarter, regardless of how they are to be executed, whether jointly or subsequently, but that by their characteristics may be considered one single transaction. The holders of shares with voting rights may vote at such Meetings, regardless of whether their voting rights are limited or restricted;	
 
 	(j)	evaluate the independence of independent Directors.	
2. General Extraordinary Shareholders Meetings . General Extraordinary Shareholders’ Meetings shall be held in order to discuss any of the matters referred to in Article 182 (one hundred eighty two) of the Mexican General Corporations Law. Also, any of the following matters shall be discussed in the General Extraordinary Shareholders Meetings:
 
 	(a)	redemption of shares issued by the Company with distributable profits, as well as the issuance of beneficial shares ( acciones de goce ), limited voting, preferred or any other kind of shares other than common shares;	
 
 	(b)	cancellation of registration of shares of the Company or any certificates representing thereof in the National Securities Registry;	
 
 	(c)	capital increases in accordance with Article 53 (fifty three) of the Mexican Securities Market Law;	
 
 	(d)	any other matters that require a special quorum under applicable laws or these By-laws.	
 
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TWENTY-THIRD. Quorum for and Resolutions of Ordinary Meetings . The General Ordinary Shareholders Meeting shall be legally convened by virtue of a first call, if the attending shareholders represent at least 51% (fifty one percent) of the outstanding voting shares of the Company, and its resolutions shall be valid when adopted by the vote of the majority of the voting shares present. In the event of a second or subsequent call, the Ordinary Shareholders Meeting shall be legally convened if the attending shareholders represent at least 51% (fifty one percent) of the outstanding voting shares of the Company, and its resolutions shall be valid when adopted by the vote of the majority of the present voting shares.
TWENTY-FOURTH . Quorum and Resolutions by Extraordinary Shareholders Meetings . General Extraordinary Shareholders Meeting shall be legally installed by virtue of first call, if the attending shareholders represent at least 75% (seventy five percent) of the outstanding voting shares of the Company, and its resolutions shall be valid when adopted by the vote of more than half of the outstanding voting shares of the Company, and for the event provided in Clause Twenty-Second subsection 2(b), the affirmative vote of 95% (ninety five percent) of the outstanding voting shares of the Company will be required. In the event of a second call or subsequent call, the Extraordinary Shareholders Meeting shall be legally installed if at least fifty one percent (51%) of the outstanding voting shares are present, and its resolutions shall be valid when adopted by the vote of the more than half of the outstanding voting shares of the Company, except in case set forth in Clause Twenty-Second subsection 2(b), in which case the vote of 95% (ninety-five percent) of the capital Stock of the Company will be required.
TWENTY-FIFTH. Special Voting Requirements
In addition to the voting requirements set forth in Clauses Twenty-Third and Twenty-Fourth of these By-laws, the vote of at least 75% (seventy-five percent) of the Series B Shares, through its shareholders gathered in Special Meeting, is required to address and approve any of the following issues:
 
 	(a)	any modification of the By-laws that that affects the voting rights of the holder of Series B Shares;	
 
 	(b)	the cancellation of the registration of the Series A Shares representing the capital stock of the Company or the cancellation of the certificates representing such shares (if they were registered) in the National Securities Registry;	
 
 	(c)	mergers of the Company with any other company or splits of the Company;	
 
 	(d)	the contracting of any type of debt or the granting of guarantees when such debt or guarantees have, as a consequence, that the ratio of Lease-Adjusted	
 
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 	Net Debt to EBITDAR exceeds 4.25 (four point twenty five) times during 2013, or 3.25 (three point twenty five) times from 2014. For the effect of these By-laws, the “ Lease-Adjusted Net Debt ” is the sum of the short-term debt and the long-term debt of the Company, plus 7 (seven) times the amount of the rents for aircrafts in the last four quarters, minus the cash or cash equivalent of the Company, on a consolidated basis, at the end of the quarter for which the financial statements of the Company were prepared, and “ EBITDAR ” will have the meaning set forth in the financial statements of the Company;	
 
 	(e)	changes to the accounting policies of the Company.	
At the moment in which the outstanding Series B Shares constitute less than 12% (twelve percent) of the outstanding capital stock of the Company, the provisions set forth herein will cease to have effect and will be held to be non-existent.
TWENTY-SIXTH. Certain Minority Rights .
(a) Postponement . Pursuant to Article 50 (fifty), section III of the Mexican Securities Market Law. the holders of voting shares, including limited or restricted voting shares, that represent 10% (ten percent) or more of the voting shares, including limited or restricted voting shares, represented at an Ordinary or Extraordinary General Shareholders Meeting may, for one single occasion, present a motion to adjourn the Meeting for 3 (three) calendar days and without requiring a new call, in order to vote on certain matters in which they do not believe they are sufficiently informed, in which case the percentage referred to in Article 199 (one hundred ninety-nine) of the Mexican General Corporations Law shall not apply.
(b) Opposition Right. The holders of voting shares, including limited or restricted voting shares, that represent at least twenty percent (20%) of the capital stock may judicially contest the resolutions adopted by the General Meetings in connection with matters in respect of which they are entitled to vote, in which case the percentage referred to in Article 201 (two hundred one) of the Mexican General Corporations Law shall not apply.
(c) Liability Actions Against Directors . The holders of voting shares, including limited or restricted voting shares, that represent 5% (five percent) or more of the capital stock of the Company, whether individually or jointly, shall be entitled to bring liability actions against any Directors, the Chief Executive Officer or any relevant officer for any breach to the duties of loyalty and care owed to the Company or any legal entity controlled by it and over which it has significant influence.
TWENTY-SEVENTH . Special Meetings . The same rules set forth in Clause Twenty-Fourth above for General Extraordinary Shareholders’ Meetings shall be applicable to Special Meetings, but referred to the relevant special category of shares.
 
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CHAPTER FOUR
MANAGEMENT AND SURVEILLANCE OF THE COMPANY
TWENTY-EIGHTH. Board of Directors . The management of the business and assets of the Company shall be entrusted to a Board of Directors and a Chief Executive Officer.
(a) The Board of Directors shall be composed of no more than 21 (twenty one) members, as determined by the relevant Shareholders Meeting, provided that at least 25% (twenty five percent) shall be independent pursuant to Articles 24 (twenty four) and 26 (twenty six) of the Mexican Securities Market Law and pursuant to any other applicable provisions. An alternate Director may be appointed for each principal Director, provided that alternate Directors of the independent Directors shall also be independent.
All shareholders or group of shareholders representing at least 10% (ten percent) of the voting shares, including limited and restricted voting shares, shall have the right to appoint and revoke one Director and its respective alternate. Such appointment may only be revoked by the other shareholders when the appointment of the rest of the Directors is also revoked, in such case the persons being replaced may not be appointed as directors within the 12 (twelve) months immediately following the date of revocation.
Notwithstanding the above, the shareholders holding Series B Shares shall have the right to appoint and revoke the appointment of 3 (three) Directors and their respective alternates, provided that , as of the date when the Series B shares represent less than 12% (twelve percent) of the outstanding capital stock of the Company, the provisions established in this paragraph shall automatically cease to have effect and shall be construed as if they were not part of these By-laws, applying the general provisions applicable to the appointment of members of the Board of Directors set forth in this Clause Twenty-Eighth.
The appointment or election of the members of the Board of Directors shall be made by the General Ordinary Shareholders Meeting or by the Special Shareholders Meeting, as applicable, by the favorable vote of the majority of the holders with voting shares of the capital stock represented at the corresponding Meeting.
(b) Members of the Board of Directors shall hold office for a period of 1 (one) year; they may be reelected and their appointment may be revoked at any time, including the Directors appointed by the shareholders exercising minority rights and shall receive the compensations determined by the General Ordinary Shareholders Meeting. Notwithstanding the foregoing, the Ordinary Shareholders Meeting may only revoke the appointment of Directors designated by the minorities when the appointment of all the other Directors is also revoked.
 
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Members of the Board of Directors shall continue to hold office for a period of up to thirty (30) calendar days, after expiration of the period for which they were designated or upon resignation, if no substitute is designated or if the designated substitute fails to assume office, without being subject to Article 154 (one hundred fifty four) of the Mexican General Corporations Law.
The Board of Directors may appoint provisional Directors without the intervention of the Shareholders Meeting in case any of the events abovementioned or any of the events specified in the last paragraph of Article 155 (one hundred fifty five) of the Mexican General Corporations Law occurs. The Shareholders Meeting shall ratify such appointments or shall appoint substitute Directors in the following Meeting, notwithstanding the provisions set forth in section (a) of the third paragraph of this Clause.
Neither the members of the Board of Directors nor the executive officers or managers shall grant any guarantee in order to ensure the fulfillment of their responsibilities that they may incur during the performance of their duties, unless the General Shareholders Meeting appointing them establishes such obligation.
(c) Documented and reasonable expenses of the members of the Board of Directors residing outside of Mexico, incurred for the fulfillment of their responsibilities (including the attendance to any meeting), will be paid or reimbursed by the Company.
TWENTY-NINTH. Directors Requirements . The members of the Board of Directors may or may not be shareholders. The following individuals will not be able to be members of the Board of Directors: (i) individuals who are not qualified by law to exercise commerce; and/or (ii) individuals who have acted as external auditor of the Company or as external auditor of any of the entities integrating the business group or consortium to which it belongs, during the 12 (twelve) months prior to the date of the appointment.
For purposes of these By-laws, independent Directors shall be those individuals appointed by their experience, capacity, and professional prestige according to the requirements set forth in Article 26 (twenty six) of the Mexican Securities Market Law and any other general regulations issued by the National Banking and Securities Commission.
The General Ordinary Shareholders Meeting shall be responsible to determine the independence of the Directors. The National Banking and Securities Commission, after hearing the opinion of the Company and the respective, may object the independence of the members of the Board of Directors within the 30 (thirty) days following the notice made by the Company, as long as there are circumstances that prove the lack of independence.
THIRTIETH. Chairman and Secretary of the Board of Directors. The Chairman of the Board of Directors shall be appointed by the General Ordinary
 
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Shareholders Meeting. If no appointment has been made by the Shareholders Meeting, the Board of Directors in the first meeting after its appointment shall appoint among its members the Chairman and, if applicable, the alternate Chairman.
Where not appointed by the General Shareholders Meeting, the Board of Directors shall appoint a Secretary and an Assistant Secretary who shall not be part of such Board of Directors, and who will be subject to the obligations and responsibilities set forth in the Mexican Securities Market Law and these By-laws. Likewise, the Board of Directors shall appoint the individuals for the rest of the positions created, if applicable, for a better performance of its duties. Alternate directors shall attend the meeting of the Board of Directors in the event of temporary or definitive absences of the principal Directors.
The Chairman of the Board of Directors may be of any nationality, he will chair the meetings of the Board of Directors and, in his absence, the meetings shall be chaired by the director designated by the majority of the directors attending the meeting and shall comply with and execute, if applicable, the resolutions taken by the Shareholders Meeting and the Board of Directors without need of any special resolution. The Chairman will also chair the Shareholders Meetings and the meetings of the Compensation and Nomination Committee referred to in Clause Thirty Third below. The Chairman will have no casting vote.
The Chairman of the Board of Directors will also be the Delegate Director. As such, he shall comply with the resolutions of the Shareholders Meetings and with the resolutions of the Board of Directors, with no need of any special resolution adopted for such purpose, and, due to its appointment, he shall have the authority conferred upon the Board of Directors according to these By-laws, except for those that may only be exercised by the Board of Directors pursuant to applicable law.
Any copies or certificates of the meetings minutes of the Board of Directors, minutes of the Committees and the minutes of the Shareholders Meetings, as well as the entries made in the corporate books and registries and, in general, of any document of the Company’s archive, may be authorized and certified by the Secretary of the Board of Directors or by the Assistant Secretary, who shall be permanent delegates to appear before the certifying public officer of their choice in order to formalize the minutes of the Board of Directors Meetings and of the Shareholders Meetings, as well as to grant powers of attorney on behalf of the Board of Directors. The Secretary of the Board of Directors or the Assistant Secretary shall prepare and record in the relevant books the minutes derived from any of the meetings of the Shareholders, Board of Directors, or the Audit and Corporate Practices Committee, and to issue any certifications in connection thereof, and of any appointments, signatures, and capacities of the Company’s officers.
THIRTY-FIRST. Board of Directors Meetings .
(a) The Board of Directors shall convene at least 4 (four) times during each fiscal year.
 
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(b) Calls for the meetings of the Board of Directors shall be sent by mail, courier or email, to the domicile of the members of the Board of Directors at least 5 (five) days prior to the date of the meeting (and no later than 3 (three) business days before in case of special or urgent meetings), and evidence of the delivery of any such call must exist. Calls shall contain the agenda for the meeting and specify the place, date and hour of the meeting.
The Chairman of the Board of Directors, and the Audit and Corporate Practices Committee, as well as 25% (twenty five percent) of the Directors of the Company may call a meeting of the Board of Directors.
The external auditor of the Company may be convened to, and attend, the meetings of the Board of Directors as guest with voice but with no voting rights, and shall not be present in the discussion of those items of the agenda that may pose a conflict of interest or that may compromise his independence.
(c) The minutes of the Board of Directors meetings shall be authorized by those acting as Chairman and Secretary of the meeting and shall be registered in a book destined for this purpose.
(d) Resolutions may be adopted without holding a meeting of the Board of Directors by the unanimous vote of its members, and such resolutions shall, for all legal effects, be as valid as those adopted in a meeting, provided they are ratified in writing. The document containing such resolutions shall be sent to the Secretary of the Board of Directors who shall transcribe the resolutions into the corresponding book, and shall indicate that the resolutions were adopted pursuant to these By-laws.
THIRTY-SECOND. Quorum and Resolutions Adopted by the Board of Directors . Unless expressly required in the contrary by these By-laws, the meetings of the Board of Directors shall be valid when the majority of its members attend the meeting, and their resolutions shall be valid when adopted by the majority of votes of its members, which must include, in any case, the vote of the Chairman of the Board of Directors. In case of a tie, the Chairman of the Board of Directors shall not have a tie-breaking vote.
The meetings of the Board of Directors shall be held at the Company’s corporate domicile, or in any other place that the Board of Directors deems convenient.
THIRTY-THIRD. Powers and Duties . The Board of Directors shall fulfill its duties in order to create value for the benefit of the Company, without favoring a single shareholder or group of shareholders. The Board of Directors shall be the company’s attorney-in-fact and shall have authority to carry out, on its name and on its behalf, all actions not reserved by applicable law or these By-laws to the General Shareholders Meeting and shall have, without limitation, the following powers:
 
 	(a)	power of attorney for lawsuits and collections with all general and special powers that require a special Clause as provided by law, without limitation, pursuant to the first paragraph of Article 2554 (two thousand five hundred fifty four) of the Federal Civil Code and its correlative articles of the Civil Codes of all the States of Mexico and the Federal District; the Board of Directors may, without limitation, desist from initiated actions, including amparo ; compromise, submit to arbitration, take and answer depositions, assign assets, challenge judges, receive payments and execute all acts specifically mandated by law, including, representing the Company before judicial and administrative, criminal, civil or other authorities, with the authority to file criminal complaints, grant pardon and become co-party to the Public Prosecutor in criminal procedures, before labor authorities and courts and before any governmental authority;	
 
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 	(b)	general power of attorney for acts of administration for labor matters, empowered with the legal representation of the Company as stated in article eleven of the Federal Labor Law and, with such representation, carry out any actions before the unions with which the Company has or has not executed any collective bargaining agreements and for all collective disputes, and for purposes of all individual disputes; in general they may exercise this power of attorney for all employer-employee matters and before the labor and social services authorities. In the terms of this power of attorney, appear before all the labor authorities referred to in article 523 (five hundred twenty-three) of the Federal Labor Law, as well as before the Institute of National Housing Fund for Workers ( Instituto del Fondo Nacional de la Vivienda para los Trabajadores ) and the Mexican Institute of Social Security ( Instituto Mexicano del Seguro Social ), Institute of the National Fund For the Workers’ Consumption and the National Commission for the Retirement Savings System ( Comisión Nacional de Sistema de Ahorro para el Retiro ) or any other body or authority related to the Retirement Savings System, to carry out all negotiations and legal proceedings necessary to solve all issues submitted to the Company, before those appearing as representatives of the Company in accordance with Article 11 (eleven) of the Federal Labor Law, which states: “The officers, administrators, managers and others performing management and administrative functions of the company will be considered as representatives of the employer and must act in such capacity when dealing with employees”.	
Consequently, they may exercise the following powers, including, but not limited to, the power to appear in the capacity of managers, and therefore, as representatives of the Company, in accordance with Articles 11 (eleven), 692 (II) (six hundred ninety two) and 876 (eight hundred seventy six) of the Federal Labor Law, before any type of labor authority, as well as social welfare, jurisdictional and administrative authorities, before the
 
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Conciliation and Arbitration Boards ( Tribunales de Conciliación y Arbitraje ), the Insitute of National Housing Fund for Workers, the Mexican Institute of Social Security, the Institute of the National Fund for the Workers’ Consumption and before the National Commission for the Retirement Savings System or any other entity related to the Retirement Savings System, appear in conciliation, complaint, evidentiary and argumentative hearings to which the grantor is summoned by the Conciliation and Arbitration Boards ( Juntas de Conciliación y Arbitraje) or by the Federal Tribunal for the Conciliation and Aribitration ( Tribunal Federal de la Conciliación y Arbitraje) with all the general and even the special powers of attorney that in accordance with the law require a special power of attorney or specific authority, in accordance with the terms of the second paragraph of Article 2554 (two thousand five hundred fifty four) of the Federal Civil Code, the Civil Code for the Federal District and the corresponding articles in the Civil Codes of the other states of Mexico, with the power to respond to and propound interrogatories.
Similarly, they will have the power to act before labor unions with which the Company has collective bargaining agreements and for all matters of individual conflicts; in general, for all employee-employer related matters and to be exercised before any and all labor and social welfare authorities referred to in Article 523 (five hundred twenty three) of the Federal Labor Law; similarly, they will be able to appear before the Juntas de Conciliación y Arbitraje whether they are Local or Federal; consequently, they will act in the capacity of representatives of their employer for purposes of Article 11 (eleven), 46 (forty six) and 47 (forty seven), as well as the legal representative of the Company, for purposes of certifying its identity and capacity in or outside of legal proceedings, in accordance with Article 692 (six hundred ninety two) subsections 2 (two) and 3 (three) of the Federal Labor Law; will be able to submit confessional evidence in court in accordance with Article 787 (seven hundred eighty seven) and 788 (seven hundred eighty eight) of the Federal Labor Law with the power to respond to and propound interrogatories, to submit confessional evidence in court; will be able to identify domiciles to receive notices in accordance with Article 875 (eight hundred seventy five), 876 (eight hundred seventy six) subsections first and second, 877 (eight hundred seventy seven), 878 (eight hundred seventy eight), 879 (eight hundred seventy nine), and 880 (eight hundred eighty); may also attend the hearing where confessional evidence is presented, in accordance with article 873 (eight hundred seventy three), and 874 (eight hundred seventy four); similarly, they have the power to propose settlements, reach settlement agreements, make any type of decisions, negotiate and sign labor agreements, at the same time, they will be able to act as representatives of the Company in the capacity of managers, with respect to all types of trials or work-related proceedings before each and any authority. At the same
 
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time, they will be able to enter into and rescind labor agreements. For such purposes, they will have all of the general powers of attorney to litigate and collect payments, and for general managerial acts in accordance with the first paragraphs of Article 2554 (two thousand five hundred fifty four), 2587 (two thousand five hundred eighty seven), and 2574 (two thousand five hundred seventy four) of the Federal Civil Code, the Civil Code for the Federal District, and the corresponding articles in the other Civil Codes of the states of Mexico where the power of attorney is exercised.
The Board of Directors may delegate all or part of the power of attorney provided for in this section 2, including the authority to delegate this power of attorney;
 
 	(c)	power of attorney for administrative acts pursuant to the second paragraph of Article 2554 (two thousand five hundred fifty four) of the Federal Civil Code and the correlative articles for the Civil Codes of all the States of Mexico and the Federal District, with the authority to, without limitation, execute lease agreements, sublease agreements, bailment agreements, credit facility agreements and loan agreements;	
 
 	(d)	power of attorney for ownership acts pursuant to the third paragraph of Article 2554 (two thousand five hundred fifty four) of the Federal Civil Code and the correlative articles for the Civil Codes of all the States of Mexico and the Federal District, with the authority to, without limitation, execute any kind of agreement or action, including disposal or lien of real estate or personal property of the Company;	
 
 	(e)	power of attorney to acquire and sell shares and partnership interests of other Companies;	
 
 	(f)	power of attorney to issue, subscribe, endorse, guarantee, and in any other way negotiate with all kind of negotiable instruments, in terms of Article 9 (nine) of the General Law of Credit Instruments and Transactions ( Ley General de Títulos y Operaciones de Crédito ) and to appoint the persons authorized to execute those actions;	
 
 	(g)	power to open and cancel bank accounts or accounts with any other financial intermediary, in any jurisdiction and pursuant to any legal provisions applicable, as well as to make deposits and draw against such accounts, and designate the persons that may draw against them and their specific authorities;	
 
 	(h)	authority to call General Ordinary, Extraordinary or Special Shareholders Meetings, in any case specified in these By-laws, or if convenient, establish place, date and time of such Meetings and execute its resolutions;	
 
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 	(i)	authority to prepare and to present to the competent authorities internal labor rules;	
 
 	(j)	power of attorney to establish branches and agencies of the Company anywhere in Mexico or abroad;	
 
 	(k)	at general extraordinary or ordinary meetings of companies where the Company is a shareholder, authority to determine the way the votes shall be casted corresponding with shares owned by the Company, and appoint representatives for voting in accordance with the resolutions of the Board of Directors;	
 
 	(l)	power of attorney to grant, revoke, and/or cancel general or special powers of attorney within the scope of its powers, granting substitution and delegation of any such powers, including this power to delegate, except for those powers reserved for the exclusive exercise of the Board of Directors pursuant to the Law or these By-laws, reserving always the exercise of these powers;	
 
 	(m)	power of attorney to execute all actions authorized by these By-laws or that may be a consequence of them, including the issuance of any kind of opinions required pursuant to the Mexican Securities Market Law and applicable regulations issued by the National Banking and Securities Commission;	
 
 	(n)	power of attorney to establish a Compensation and Nomination Committee and select the members of the Audit and Corporate Practices Committee, excluding the appointment of the relevant Chairmen;	
 
 	(o)	power of attorney to establish other Committees that the Board of Directors may consider necessary for the development of the Company’s operations, mentioning the authorities and obligations of such Committees and appointment of their members ( except for the members of the Compensation and Nomination Committee), as well as the rules for its operation;	
 
 	(p)	authority to approve, with the prior opinion of the competent Committee:	
 
 	(i)	the policies and guidelines for the use and enjoyment of the assets of the Company and the legal entities it controls;	
 
 	(ii)	each individual transaction with related parties that the Company or the legal entities it controls intend to execute, except for (1) transactions that are not significant to the Company or the legal entities it controls, based on the amount thereof, (2) transactions executed by the Company and the legal entities it controls, or in	
 
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 	which it has a significant influence, or between any of them, provided that the same are (A) carried out in the ordinary course of business and on an arms-length basis, and (B) executed under market price or backed-up by valuations made by specialist third-party advisors, and (3) transactions executed with employees, provided that they are subject to the same conditions applicable to any customer or client or as a result of general labor practices;	
 
 	(iii)	transactions executed simultaneously or subsequently by the Company or the legal entities it controls within the same fiscal year that may be considered as one and the same transaction, based on the characteristics thereof, if they are unusual, infrequent or their amount represent, based on the figures corresponding to the closing of the immediately preceding trimester, in any of the following events: (1) the acquisition or sale of assets with a value equal to or higher than 5% (five percent) of the consolidated assets of the Company; or (2) the granting of guarantees or the assumption of liabilities in an amount equal to or higher than 5% (five percent) of the consolidated assets of the Company, except for investments in securities provided that they are made pursuant to the policies approved by the Board of Directors;	
 
 	(iv)	appointment, election and, as the case may be, removal of the Chief Executive Officer of the Company, his integral compensation, and the policies for appointing and compensating other officers immediately below the Executive Officer;	
 
 	(v)	the policies for the granting of credits or loans, or any type of financing and guarantees to related parties;	
 
 	(vi)	waivers for the Directors, Relevant Directors and persons with decision making power in order to enable them to take advantage of business opportunities favorable to them or to third parties, that correspond to the Company or the legal entities it controls or in which it has a significant influence. Waivers for transactions in amounts lower than the amount referred to in paragraph (c) above may be delegated to the Audit and Corporate Practices Committee;	
 
 	(vii)	guidelines regulating internal controls and internal audits of the Company and the legal entities it controls;	
 
 	(viii)	the accounting policies of the Company, in accordance with the accounting principles recognized or issued by the National Banking and Securities Commission by means of general regulations or by any other competent stock exchange authority;	
 
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 	(ix)	the financial statements of the Company;	
 
 	(x)	the hiring of the legal entity to provide external audit services and, as applicable, additional or ancillary services related thereto;	
 
 	(xi)	appoint provisional Directors in accordance with, and subject to, the provisions of the Mexican Securities Market Law;	
 
 	(xii)	approve the terms and conditions of a judicial agreement to conclude any liability actions started against a Director for breach of the duties of loyalty and care.	
In case the decisions of the Board of Directors are not compatible with the opinions of the corresponding Committee, such Committee shall instruct the Chief Executive Officer to disclose such circumstance to the public through the stock exchange in which the Company’s shares or the certificates representing them, are traded, subject to the terms and conditions set forth in the internal rules of such stock exchange;
 
 	(q)	submit to the General Shareholders Meeting held in connection with the closing of the fiscal year (a) the annual report prepared by the Audit and Corporate Practices Committee, (b) the report prepared by the Chief Executive Officer in accordance with Article 172 (one hundred seventy two) of the Mexican Companies Law, except for that provided in subsection b), enclosing the report prepared by the external auditor, (c) the opinion of the Board of Directors on the content of the report prepared by the Chief Executive Officer abovementioned, (d) the report of the Board of Directors referred to in Article 172 (one hundred seventy two), subsection b) of the Mexican Companies Law, setting forth the main accounting and information policies and criteria followed in the preparation of the financial information and (e) report on the operations and activities in which it was involved;	
 
 	(r)	follow up on the main risks to which the Company and the legal entities it controls are exposed to, as identified based on the information presented by the Committees, the Chief Executive Officer and the external auditor, as well as those risks that may affect the accounting systems, internal control and internal audits, records, files or information of the Company and its subsidiaries through the Audit and Corporate Practices Committee;	
 
 	(s)	approve the information and communication policies with the shareholders and the market, as well as with the Directors and relevant officers;	
 
 	(t)	determine the appropriate actions in order to remedy any irregularities and implement the respective corrective measures;	
 
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 	(u)	establish the terms and conditions to which the Chief Executive Officer shall be subject to in exercising its powers of attorney for acts of ownership;	
 
 	(v)	instruct the Chief Executive Officer to disclose to the public the relevant events without prejudice to the Chief Executive Officer’s obligation contained in Article 44 (forty four), section V of the Mexican Securities Market Law;	
 
 	(w)	approve the terms and conditions for the public offering and sale of treasury shares of the Company issued pursuant to Article 53 (fifty three) of the Mexican Securities Market Law;	
 
 	(x)	appoint the person or persons in charge of the execution of any acquisitions or trading of shares authorized by the Shareholders Meeting, pursuant to Article 56 (fifty six) of the Mexican Securities Market Law, and define the terms and conditions for such acquisitions and trading, within the limits established in the Mexican Securities Market Law and by the Shareholders Meeting, and inform the Shareholders Meeting the result of the exercise of such attributions every fiscal year; and	
 
 	(y)	all others set forth in the Mexican Securities Market Law or in these By-laws.	
THIRTY-FOURTH. Committees .
(a) The Company may have a Compensation and Nomination Committee that shall be composed of the number of principal directors and alternate directors determined by the Board of Directors of the Company. The appointment of the members of the Compensation and Nomination Committee, including the Chairman of the relevant Committee, shall be made by the Board of Directors but the General Ordinary Shareholders Meeting may assume such authority. The Board of Directors may appoint, in case of absence of a director of the Compensation and Nomination Committee, 1 (one) alternate for each principal director of such committee. Members of the Compensation and Nomination Committee shall remain in office 1 (one) year, unless they are relieved from their duties, nevertheless they shall retain their duties until the designated substitute assume the office. Members of the Compensation and Nomination Committee may be reelected and shall receive the compensations determined by the Board of Directors.
The Compensation and Nomination Committee shall meet prior call made by the Secretary of the Board of Directors or its alternate, or by the request of the Chairman of the Board or any 2 (two) of its members, within at least 3 (three) days prior to the date of the meeting. The Company’s external auditor may be convened as a guest with voice but no voting rights. The call to the Committee meeting shall be sent by mail, telegram, fax, courier or any other means which ensures that the members of the Committee receive said notice at least 3 (three) days in advance.
 
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The meetings of the Compensation and Nomination Committee shall be valid when the majority of its members attend to the meeting, and their resolutions shall be valid when adopted by the majority of votes of the attending members.
Resolutions may be adopted without holding a meeting of the Compensation and Nomination Committee by the unanimous vote of its members, and such resolutions shall, for all legal effects, be as valid as those adopted in a meeting, provided they are ratified in writing. The resolutions adopted in accordance with this paragraph shall be transcribed into the special book pursuant to the last paragraph of this Clause.
The Compensation and Nomination Committee shall have the following authorities:
 
 	(i)	submit for the consideration of the Board of Directors, the names of the persons that it deems should be appointed to the positions in two highest hierarchical levels of the Company, as well as their removal;	
 
 	(ii)	propose to the Board of Director the adoption or modification of any incentives plan for employees of the Company;	
 
 	(iii)	consult third party experts when it deems necessary in matters of compensation, organizational development, labor market studies and all of those related to these matters, in order to expose and propose such to the Board of Directors, who shall adopt the resolutions it deems necessary;	
 
 	(iv)	propose the compensation schemes for the positions in the four highest hierarchical levels of the Company or those that it determines for the consideration of the Board of Directors;	
 
 	(v)	make a report on its activities at least once a year, when it is requested to, or when it deems it necessary to inform the Board of Directors for its consideration;	
 
 	(vi)	propose to the Board of Directors the performance, amendment or termination of any collective union agreement;	
 
 	(vii)	inform to the Board of Directors about contingencies derived from labor proceedings exceeding $250,000.00 (two hundred fifty thousand dollars 00/100 USD), individually or in aggregate; and	
 
 	(viii)	inform the Board of Directors and the Audit and Corporate Practices Committee about the payment and compensation packages of the individuals referred to in Article 28 (twenty eight), section III, subsection d) of the Mexican Securities Market Law.	
 
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The Compensation and Nomination Committee shall not execute any activities reserved exclusively, by the applicable law or by these By-laws, to the General Ordinary Shareholders Meeting or to the Board of Directors. The Compensation and Nomination Committee shall not delegate its authority to any persons, but may appoint the persons that shall execute its resolutions; the Chairman (as permanent delegate) and the Secretary shall be authorized to execute the resolutions of the Committee.
The minutes for each meeting held by the Compensation and Nomination Committee shall be prepared and transcribed in a special book. The assistance of the members of the Committee and the resolutions adopted shall be included in the minutes which shall be signed by those who acted as Chairman and Secretary of the Compensation and Nomination Committee.
(b) In the areas of Audit and Corporate Practices, the Board of Directors shall have an Audit and Corporate Practices Committee.
The Audit and Corporate Practices Committee shall be composed exclusively by independent directors, except as provided in the following paragraph, and by a minimum of 3 (three) members, who shall be appointed and/or removed from their duties by the Board of Directors, as proposed by the Chairman, provided that the Chairman of such Committee shall be exclusively appointed and/or removed by the General Shareholders Meeting. Chairman of the Audit and Corporate Practices Committee shall not preside over the Board of Directors, and shall be selected for its experience, capacity, and professional prestige.
In the event that the Company is controlled by a person or group of persons that holds 50% (fifty percent) or more of the capital stock, it shall not be necessary that the Audit and Corporate Practices Committee shall be composed exclusively by independent directors, it may be composed by a majority of independent directors, provided that such circumstance is disclosed to the public. This shall not apply if the activities dealing with corporate and auditing practices are executed by a single Audit and Corporate Practices Committee as provided in this section.
(c) The Audit and Corporate Practices Committee shall be responsible of the development of the following activities:
 
 	(i)	give opinion to the Board of Directors in matters within its competence under applicable law;	
 
 	(ii)	request the opinion of independent experts when it deems it necessary, for the adequate fulfillment of its duties or when required under applicable law or general regulations;	
 
 	(iii)	call a Shareholders Meeting and include into its Agenda the issues it deems pertinent;	
 
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 	(iv)	support the Board of Directors in the preparation of the reports referred to in Article 28 (twenty eight), section IV, subsection d) and e) of the Mexican Securities Market Law;	
 
 	(v)	any other issue established by the applicable law or these By-laws.	
 
 	(vi)	give opinion to the Board of Directors on matters within its competence in accordance with the applicable law;	
 
 	(vii)	evaluate the performance of the legal entity providing external audit services, and analyze the certificate, opinions or reports prepared and executed by the external auditor. For such effect, the Committee may require the presence of such auditor when appropriate, notwithstanding the auditor shall meet at least once a year with the Committee;	
 
 	(viii)	discuss the financial statements of the Company with the persons responsible for its preparation and review, and on that basis recommend its approval to the Board of Directors;	
 
 	(ix)	report to the Board of Directors the conditions of the internal control and internal audit systems of the Company or of the legal entities under its control, including the irregularities detected, if any;	
 
 	(x)	prepare the opinion referred to in Article 28 (twenty eight), section IV, subsection c) of the Mexican Securities Market Law and submit it to the Board of Directors for its subsequent submission to the Shareholders Meeting, based, inter alia , in the opinion of the external auditor. Such opinion shall address, at least:	
 
 	(A)	whether the policies and accounting and information standards used by the Company are adequate and sufficient, taking into account the particular circumstances of it;	
 
 	(B)	whether such policies and standards have been applied consistently in the information submitted by the Chief Executive Officer;	
 
 	(C)	whether as a result of paragraphs (A) and (B) above, the information submitted by the Chief Executive Officer reasonably reflects the financial position and results of the Company;	
 
 	(xi)	support the Board of Directors in the preparation of the reports referred to in Article 28 (twenty eight), section IV, subsections d) and e) of the Mexican Securities Market Law;	
 
 	(xii)	oversee that the operations referred to in Articles 28 (twenty eight), section III, and 47 (forty seven) of the Mexican Securities Market Law, are executed in accordance with the purpose established in those articles, as well as the policies resulting from such articles;	
 
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 	(xiii)	request the opinion of independent experts when it deems appropriate, for the adequate performance of its duties or when it is required in accordance with applicable law or general provisions;	
 
 	(xiv)	require from the relevant directors and other employees of the Company or from the legal entities under the control of the Company, reports related to the preparation of financial information and any other information deemed necessary for the performance of its functions;	
 
 	(xv)	review the potential breaches of which it has knowledge, the transactions, guidelines and operating policies, internal control and audit systems and accounting records, either from the Company or the legal entities under its control, to which it shall evaluate the documentation, records and other evidence, to the extent necessary in order to carry out such surveillance;	
 
 	(xvi)	receive comments from shareholders, directors, Relevant Directors, employees and, in general, from any third party, regarding the matters referred to in the preceding section, and execute the procedures that it deems appropriate in connection with such comments;	
 
 	(xvii)	request periodical meetings with Relevant Directors, as well as the delivery of any information related with the internal control and internal audit of the Company or the entities under its control;	
 
 	(xviii)	inform the Board of Directors of relevant irregularities identified during the course of its duties and, when appropriate, of the corrective measures taken or propose the respective measures to be implemented;	
 
 	(xix)	call to Shareholders Meetings and request including the matters that it deems relevant in the agenda of such meetings;	
 
 	(xx)	oversee compliance by the Chief Executive Officer of the resolutions taken by the Shareholders Meetings and the Board of Directors in accordance with the instructions given by the respective Shareholders Meeting or the Board of Directors;	
 
 	(xxi)	oversee the creation of mechanisms and internal controls in order to verify that the acts and operations of the Company and the legal entities under its control are in accordance to the applicable regulations, as well as to implement methodologies for the review of such mechanisms and internal controls;	
 
 	(xxii)	any other activity set forth in the Mexican Securities Market Law or in these By-laws, according to the Mexican Securities Market Law.	
 
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The Chairman of the Audit and Corporate Practices Committee shall prepare an annual report of the activities of such Committee and submit it to the Board of Directors. This report will include, at least, the following matters (i) observations regarding the performance of the relevant directors, (ii) the transactions with related parties during the year under review, detailing the characteristics of significant transactions, (iii) the waivers granted by the Board of Directors as provided in Article 28 (twenty eight), section III, subsection f) of the Mexican Securities Market Law.
(d) For the preparation of the respective report, as well as for the preparation of the opinions mentioned in subsection (c) of this Clause Thirty-Third, the Audit and Corporate Practices Committee shall hear the relevant directors; in the event there are different opinions, such differences shall be mentioned in the above-mentioned reports and opinions.
(e) If so agreed by the Board of Directors, as intermediate management bodies, one or more committees may be established in addition to the Audit and Corporate Practices Committee and the Compensation and Nomination Committees, each one of them composed by an odd number of directors and alternate members appointed by the Board of Directors from among its directors or alternates.
The Audit and Corporate Practices Committee and the Compensation and Nomination Committees as well as the other Committees shall always act as a collegiate body.
The Committee members appointed pursuant to this Clause shall remain in office 1 (one) year, but in any case they shall remain in office until the person appointed to replace them takes possession; they may be reelected or revoked from their appointment at any time and shall receive the compensations determined by the General Ordinary Shareholders Meeting. The appointment of any member shall be deemed as revoked at the moment in which it ceases to be a member of the Board of Directors.
The Compensation and Nomination Committee, the Audit and Corporate Practices Committee, and any other committee established under this Clause, shall meet at the dates and with the frequency determined by each committee in the first or the last meeting held during each fiscal year (in the latter case with respect to the calendar of the meetings to be held in the subsequent fiscal year), without having to call its members to each meeting if it was previously scheduled according to the meetings schedule approved by the Committee. Except as expressly provided by the Compensation and Nomination Committee under this Clause Thirty Fourth, each Committee shall meet when so determined by the Chairman of such Committee or any 2 (two) of its principal members, with prior notice 3 (three) calendar days in advance, to all the principal members of the Committee and the required alternates. The external auditor of the Company may be convened to attend meetings of the Committees as a guest with voice but no voting rights.
 
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The call to the Committee meetings shall be sent by mail, messenger, electronic, optic or any other means which ensures that the members of the Committee receive such notice at least 3 (three) calendar days in advance. The call may be signed by the Chairman of such Committee or by the Secretary of the Board of Directors of the Company, or by the alternate Secretary, who shall act in such capacity at the Committee. The Committees may meet at any time without prior notice if all of the principal members are present.
Except as expressly provided for the Compensation and Nomination Committee under this Clause Thirty Fourth, the attendance of the majority of its members is required to consider the meetings of the Committees legally convened, and the resolutions shall be approved by the affirmative vote of the majority of the members of the Committee.
The Committees to be incorporated under this Clause shall have the powers expressly granted to them by the Board of Directors. The delegated powers shall in no case include those reserved by applicable law or by these By-laws to the General Shareholders Meeting, the Board of Directors or the Audit and Corporate Practices Committee.
None of the Committees may delegate its powers to any person, but may appoint delegates to execute their resolutions. The Chairman of each Committee shall be empowered to execute such resolutions individually without the need to have authorization. Each Committee incorporated under this Clause shall inform the Board of Directors on an annual basis of the activities undertaken, or, when it deems that relevant facts or events arise for the Company. The minutes to be transcribed in a special book shall be prepared for each Committee meeting. The assistance of the members of the Committee and the resolutions adopted shall be included in the minutes which shall be signed by those who acted as Chairman and Secretary.
THIRTY-FIFTH. Responsibility of the Directors and Limitations to such Responsibility.
(a) Duty of Care . The members of the Board of Directors and of any of the Committees shall in all cases act in accordance with the duty of care set forth in Article 30 (thirty) and subsequent articles of the Mexican Securities Market Law.
For such purposes, the directors shall have the right to request, at any time and under the terms they consider convenient, information of the officers of the Company or of any other entity controlled by the Company.
In accordance with the Mexican Securities Market Law and the general regulations issued by the National Banking and Securities Commission, the breach by any director or member of any of the Committees of his duty of care, shall make such director jointly and severally responsible with any other directors breaching such duty, for any damages and losses caused to the Company, which will be limited to the direct
 
45

losses and damages caused to the Company and to the cases in which the respective director or member of whichever Committee has acted with willful misconduct, bad faith, gross negligence or against the law.
(b) Duty of Loyalty . The members of the Board of Directors and of any of the Committees shall act according to the duty of loyalty set forth in Article 34 (thirty four) and subsequent articles of the Mexican Securities Market Law.
Any director or member of any Committee having a conflict of interest, shall refrain from participating in the respective matter and shall not be present in the deliberation or voting of such matter, without such absence affecting the quorum required for the validity of the board meeting.
The directors will be jointly and severally liable with the previous directors for the irregularities incurred if, upon learning of such irregularities, such directors do not inform them to the Audit and Corporate Practices Committee and the external auditor of the Company. Likewise, the directors shall inform the Audit and Corporate Practices Committee and the external auditor of the Company all such irregularities that during the discharge of their duties they had knowledge and which are related to the Company or with the entities controlled by the Company or with entities where the Company has Significant Influence.
According to the Mexican Securities Market Law, specifically Articles 34 (thirty four) to 37 (thirty seven) of such law, and according to the general regulations issued by the National Banking and Securities Commission, the breach by any director or member of any of the Committees, of their duty of loyalty, shall make such director or member of any of the Committees jointly and severally liable with other directors or members of its Committees breaching the duty of loyalty, for any damages and losses caused to the Company which shall be limited to direct damages and losses caused to the Company, and in all cases the respective individuals shall be removed from their duties.
(c) Responsibility Action . Any responsibility resulting from the breach of the duty of care or the duty of loyalty shall be solely for the benefit of the Company or for the benefit of the entity controlling the Company, as applicable, and may be brought by the Company or by the shareholders who individually or collectively represent at least five percent (5%) or more of the capital stock of the Company. The party that brought the claim may only settle the amount of the indemnity of the damages and losses of such claim if the Board of Directors has previously approved the corresponding court-approved agreement.
(d) Exclusion from Responsibility . The members of the Board of Directors or of the relevant Committee shall not be liable for the damages and losses caused to the Company or the entities which the Company controls or in which it has a Significant Influence, when the respective director or member of the relevant Committee acts in good faith and the safe-harbor exceptions referred to in Article 40 (forty) of the Mexican Securities Market Law are applicable.
 
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THIRTY-SIXTH. Chief Executive Officer .
(a) The duties of management and execution of the business of the Company and the entities it controls shall be responsibility of the Chief Executive Officer in terms of Article 44 (forty four) of the Mexican Securities Market Law, subject to the strategies, policies and guidelines approved by the Board of Directors.
(b) The Chief Executive Officer, for the performance of his duties, shall have the broadest powers of attorney to represent the Company for acts of administration, lawsuits and collections, including special powers of attorney requiring special clauses in accordance to law. For acts of ownership, it shall be subject to the provisions set forth in Article 28 (twenty eight), section VIII, of the Mexican Securities Market Law.
The Chief Executive Officer, without limitation of the above-mentioned, shall:
 
 	i.	submit to the Board of Directors, the business strategy of the Company and of the legal entities controlled by it, based on the information provided by the Company and such entities to the Chief Executive Officer;	
 
 	ii.	execute the resolutions adopted by the Shareholders Meetings and the Board of Directors Meetings, in accordance with the instructions given by such Shareholders Meeting or the respective Board of Director Meeting;	
 
 	iii.	propose to the Audit and Corporate Practices Committee, the guidelines for the internal control and audit system of the Company and the legal entities controlled by it, and execute any guidelines approved by the Board of Directors to that effect;	
 
 	iv.	prepare and release the relevant information of the Company, together with the Relevant Directors in charge of preparing the same, within the scope of their respective duties;	
 
 	v.	disclose the relevant information and the events that must be disclosed to the public in accordance with the Securities Market Law;	
 
 	vi.	comply with any provision related to the execution of acquisition transactions and placement of the own shares of the Company;	
 
 	vii.	exercise any applicable corrective and responsibility action whether directly or through an authorized delegate;	
 
 	viii.	confirm the capital contributions made by the shareholders, if any;	
 
 	ix.	satisfy the legal and corporate requirements established with respect to the dividends paid to the shareholders;	
 
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 	x.	take the necessary actions to ensure the maintenance of accounting, registration, filing or information systems of the Company;	
 
 	xi.	prepare and submit to the Board of Directors the report referred to in Article 172 (one hundred seventy two) of the Mexican General Corporations Law, except for the report referred to in item (b) of such legal provision;	
 
 	xii.	establish the internal mechanisms and controls necessary to verify that the acts and transactions of the Company and the legal entities controlled by it comply with applicable laws and regulations, and follow-up the results of such internal mechanisms and controls and take the necessary actions, if any;	
 
 	xiii.	exercise the liability actions referred to in the Mexican Securities Market Law against related parties or third parties that allegedly caused a damage to the Company or to the legal entities controlled by it, or in which the Company has a significant influence, unless the alleged damage is not relevant, as determined by the Board of Directors with the prior opinion of the Audit and Corporate Practices Committee; and	
 
 	xiv.	any other action pursuant to the Mexican Securities Market Law or these By-laws in accordance with the authorities provided for in the Mexican Securities Market Law.	
(c) The Chief Executive Officer, for the performance of his duties and activities, as well as for fulfillment of his obligations, shall be assisted by the relevant directors appointed for such purpose and by any employee of the Company or of the legal entities it controls.
(d) The Chief Executive Officer and the other relevant directors shall be subject to the liability set forth in the Mexican Securities Market Law for their respective positions, therefore they shall be liable for the damages and losses incurred in connection with their respective duties. Likewise, any safe-harbor limitations referred to in Articles 33 (thirty three) and 40 (forty) of the Mexican Securities Market Law shall be applicable according to Clause Thirty-Fifth of these By-laws.
Additionally, the Chief Executive Officer and the other relevant directors shall be responsible for any damages and losses caused to the Company or to the legal entities under its control due to (i) the lack of timely and diligent answer to any request of information by the directors of the Company, (ii) the disclosure or submission of false or misleading information, (iii) the performance of the acts refer to in Article 35 (thirty five), sections III and IV to VII and Article 36 (thirty six) of the Mexican Securities Market Law.
 
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THIRTY-SEVENTH. Surveillance of the Company . The supervision of the management and execution of the business of the Company and the legal entities it controls shall be the responsibility of the Board of Directors through the Audit and Corporate Practices Committee, as well as through the legal entity conducting the external audit of the Company.
THIRTY-EIGHTH. Guarantee . Neither the members of the Board of Directors, nor the members of the Compensation and Nomination Committee, nor the Audit and Corporate Practices Committee, nor the Secretary, nor the Assistant Secretary, nor the respective alternates of such persons, nor the officers or managers shall have the obligation to provide any kind of guarantee to secure the fulfillment of the responsibilities in which they may incur during the performance of their duties, unless the Shareholders Meeting appointing them establishes such obligation.
THIRTY-NINTH. Indemnity . The Company agrees to indemnify and hold harmless the members, either principal or alternate, and the officers of the Board of Directors, the Compensation and Nomination Committee, the Audit and Corporate Practices Committee, and any other Committee created by the Company, as well as the Secretary and the Assistant Secretary of the Company and the Chief Executive Officer and/or any other relevant officer in connection with the performance of their duties, against any claim, suit, proceeding or investigation initiated in Mexico or in any other country in which the shares of the Company or any other securities issued having as underlying asset the shares issued by the Company or other fixed-income or variable-income securities issued by the Company are registered or listed, or in any jurisdiction where the Company or the entities it controls operate, in which such persons, as members of such bodies, either as principal or alternate directors, or as officers may be a party, including the payment of any damage or loss that may have been caused and the amounts necessary to reach, if deemed appropriate, a settlement, and all the fees and expenses of legal counsel and other advisors working for the interests of such individuals, provided that the Board of Directors shall be the body empowered to determine in the above-mentioned cases, if it is convenient the hiring of counsel and advisors different to those advising the Company in the relevant case. This indemnity shall not be applicable if such claims, suits, proceedings or investigations result from gross negligence, willful misconduct or bad faith of the relevant indemnified party.
CHAPTER FIVE
FISCAL YEAR AND FINANCIAL INFORMATION
FORTIETH. Fiscal year . The fiscal year of the Company shall be the same as the calendar year. If the Company is liquidated or merged, its fiscal year shall terminate in advance on the date of the liquidation or merger.
 
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FORTY-FIRST. Financial Information . Within the first (4) four months of each fiscal year, the Chief Executive Officer and the Board of Directors, within the scope of their duties, shall prepare the following financial information and any other documentation necessary pursuant to provisions of the applicable law, within its respective duties and responsibilities, pursuant to the provisions of these By-laws and the Mexican Securities Market Law, which will be delivered to the Shareholders’ Meeting by the Board of Directors:
 
 	(a)	a report on the progress of the Company and its main subsidiaries during the fiscal year, and on the policies followed by the Board of Directors and, if any, on the major existing projects;	
 
 	(b)	a report stating and explaining the main information and accounting policies and criteria used for the preparation of the financial information;	
 
 	(c)	a statement showing the financial position of the Company at the end of the fiscal year;	
 
 	(d)	a statement showing, and duly explaining and classifying, the results of the Company during the fiscal year;	
 
 	(e)	a statement showing the changes in the financial position of the Company during the fiscal year;	
 
 	(f)	a statement showing the changes in the items conforming the assets of the Company during the fiscal year; and	
 
 	(g)	any necessary notes to supplement and clarify the information provided by the above-mentioned statements.	
CHAPTER SIX
PROFITS AND LOSSES
FORTY-SECOND. Profits . The net profits of each fiscal year, pursuant to the financial statements, once the necessary amounts are separated (i) for the payment of taxes, (ii) pursuant to applicable law, and (iii) if applicable, for the payment of the losses of previous years, shall be applied as follows:
 
 	(a)	5% (five percent) to create, increase, or, if applicable, reconstitute the legal reserve fund until such fund reaches an amount equal to 20% (twenty percent) of the paid capital stock;	
 
 	(b)	the amount determined by the Shareholders Meeting to create or increase the general or special reserve funds;	
 
50

 	(c)	the amount that the Shareholders Meeting establishes for the acquisition of its own shares pursuant to the applicable law and these By-laws; and	
 
 	(d)	the remaining profits shall be applied as the Shareholders Meeting determines, including, if applicable, the payment of dividends to all shareholders, in proportion to the shares they hold.	
FORTY-THIRD. Losses . The losses, if any, shall be borne by all the shareholders, in proportion to the number of shares they own, and up to the amount paid by them.
CHAPTER SEVEN
DISSOLUTION AND LIQUIDATION
FORTY-FOURTH. Dissolution . The Company shall be dissolved in the cases set forth in Article 229 (two hundred twenty nine) of the Mexican General Corporations Law.
FORTY-FIFTH. Liquidation . Upon dissolution, the Company shall be placed in liquidation. The General Extraordinary Shareholders Meeting shall appoint one or more liquidators, who shall have the authority set forth in the Mexican General Corporations Law or the authority determined by the Shareholders Meeting that appointed them.
FORTY-SIXTH. Liquidation Bases . The liquidator or the liquidators shall carry out the liquidation pursuant to the bases, if applicable, determined by the Shareholders’ Meeting or pursuant to the following general provisions and the provisions of the relevant chapter of the Mexican General Corporations Law:
 
 	(a)	termination of the outstanding business in the most convenient manner;	
 
 	(b)	collection of receivables and payment of Company’s debt;	
 
 	(c)	sale of the assets of the Company;	
 
 	(d)	preparation of the final liquidation balance sheet; and	
 
 	(e)	distribution of the remaining balance among the shareholders, in proportion to their shares and to the payment made with respect to each Share, once the final liquidation balance sheet is approved.	
During the liquidation, the Shareholders Meetings shall meet as provided in these By-laws, and the liquidator or the liquidators shall perform the duties corresponding to the Board of Directors of the Company, and Audit and Corporate Practices Committee shall continue performing its duties, with respect to the liquidator or the liquidators of the Company.
 
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CHAPTER EIGHT
APPLICABLE LAW AND JURISDICTION
FORTY-SEVENTH. Applicable Law . For everything that is not expressly provided in these By-laws, the provisions of the Mexican Securities Market Law, the Mexican General Corporations Law, the general regulations issued by the National Banking and Securities Commission and other applicable law shall apply.
FORTY-EIGHT. Jurisdiction . Each and every conflict, dispute or disagreement arising between 2 (two) or more Shareholders or between 2 (two) or more group of shareholders or between any of them and the Company, including the holders of any instrument having as underlying assets the shares of the Company and arising from these By-laws or in connection thereto, shall be resolved by the competent courts sitting in the Mexico City, Federal District, Mexico, and the parties expressly submit to the jurisdiction of such competent courts, waiving any other jurisdiction to which they may be entitled by reason of their present or future domiciles or otherwise.
 
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Exhibit 4.1
[Translation for informational purposes only]

Provisional Certificate No.     	  	Represents      ordinary, nominative, Series “A”, Class I
shares, without expression of nominal value,
representative of the minimum fixed capital.	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

	 	CORPORATE DOMICILE:	 	Mexico City, Federal District.	  		
	 	TERM:	 	Indefinite.	  		
This Title is deposited in administration with S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., in terms and for the purposes of Article 282 of the Securities Market Law and represents      ordinary, nominative, Series “A”, Class I shares, without expression of nominal value, fully paid and subscribed, representative of the minimum fixed capital of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), of the total ordinary, nominative, Series “A”, Class I shares, without expression of nominal value, representative of the minimum fixed capital of the Company.
The Company was incorporated under the name “Controladora Vuela Compañía de Aviación, S.A. de C.V.”, by means of public deed No. 83.537, dated October 27, 2005, granted before Lic José Visoso del Valle, Notary Public number 92 of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number 342,507, on January 20, 2006.
By public deed number     dated          , 2013, granted before Lic     , Notary Public number      of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number     , on     ,     , it was resolved, among other things, to adopt the form of a Sociedad Anónima Bursátil de Capital Variable and, consequently, the amendment to the corporate name of the Company to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., and the amendment to the Company’s By-laws.
“ FIFTH. Nationality . The Company is of Mexican nationality. Any foreigner who at the time of incorporation or at any time thereafter acquires shares of the Company, agrees with the Ministry of Foreign Affairs to be treated as Mexican national with respect to (a) the shares or rights acquired of the Company and (b) the properties, rights, governmental concessions, participations or interests owned by the Company and (c) any rights and obligations derived from the agreements entered into by the Company; and it shall be understood that each foreigner agrees not to invoke the protection of his government, under penalty, in case of failure to comply with such agreement, of forfeiture of the acquired rights and assets in favor of the Mexican nation.” 
Mexico City, Federal District,      de 2013.

	 	 	  		  	 	  		
	 	[                    ]	  		  	[                    ]	  		
	 	Director	  		  	Director	  		

Main Rights and Obligations of the Shareholders
In accordance with the provisions of the Bylaws, the following is the full text of the Clause Eight of the Bylaws:
EIGHTH. Acquisition of Shares by the Company; Change of Control Provisions; Restrictions in the Transfer of Series B Shares.
(a) Acquisition of Shares by the Company. The Company may acquire shares representing its own capital stock or negotiable instruments or any other instruments that represent such shares without being subject to the prohibition established in the first paragraph of Article 134 (one hundred thirty four) of the Mexican General Corporations Law. The acquisition of its own shares shall take place in any national or foreign securities exchange or in any foreign market at market prices, except in case of public bids or auctions authorized by the National Banking and Securities Commission. The acquisition of its own shares shall be made against its net worth, in which case the Company may maintain the acquired shares with no need of reducing its capital stock, or, against its capital stock, in which case such shares shall become unsubscribed and be maintained in its treasury, with no need of an agreement by the General Shareholders Meeting.
The General Ordinary Shareholders Meeting shall expressly agree for each fiscal year, the maximum amount of resources that may be used for the acquisition of its own shares or negotiable instruments or other instruments representing them, with the only limitation being that the total resources for the corresponding acquisition may not exceed the sum of the total net profits of the Company, including the profits retained from previous years. In any event, the Company must be up to date in the payment of the obligations arising from debt instruments registered with the National Securities Registry. The Board of Directors shall appoint the responsible persons of the acquisition and placement of its own shares.
As long as the acquired shares belong to the Company, such shares may not be represented or voted in the General Shareholders Meetings, nor exercise any kind of corporate or economic rights with respect to such shares.
The acquisition and sale of shares under this Clause, the reports of the transactions about such transactions which shall be submitted to the General Ordinary Shareholders Meeting, the rules of financial information disclosure, as well as the manner and terms under which these transactions shall be reported to the National Banking and Securities Commission, the relevant stock exchange and the public investors, shall be subject to the provisions of the Mexican Securities Market Law and the general provisions issued by such Commission.
(b) Change of Control Provisions
(A) Defined Terms
For purposes of this paragraph of Clause Eighth, the following terms shall have the meanings ascribed to them:
“Shares” means any and all the shares representing the capital stock of the Company, of whatever class, series or name, or any security, instrument, right (detachable or not, represented or not by any instrument, or resulting from contractual provisions and not by any instrument) or instrument issued or created based on such shares, including ordinary participation certificates or depositary certificates in respect thereto, irrespective of their governing law or the market where they may be placed, executed or granted, or of its name, or that otherwise grants its holders rights to such shares or is convertible into or exchangeable for such shares, including financial instruments and operations known as derivative transactions, options, warrants or other similar or equivalent rights or instruments, or any complete or partial right in respect of or related to shares evidencing the capital stock of the Company, including in all cases within the definition, notwithstanding they may not be strictly considered as shares.
“Voting Arrangement” shall have the meaning ascribed to such term in this Clause Eighth.
“Affiliate” means (i) any company that Controls, is Controlled by, or is under common Control of any Person, and (ii) with respect to an individual, any of the parents, siblings, spouse, previous spouse, concubines, direct descendants, without limit of degree, the spouses and previous spouses of such descendants, as well as any trust or agreement or equivalent executed with the purpose to benefit such individuals.
“Competitor” means any Person involved, directly or indirectly, through any means and through any entity, vehicle or contract, in a preponderant or sporadic manner, in (i) the business of air transportation services of passengers, cargo, currier and/or mixed, and/or (ii) any activity in which the Company or any of its Subsidiaries is at any time involved, and which represents 5% (five percent) or more of the consolidated gross income of the Company and its Subsidiaries, provided that the Board of Directors may, on a case by case basis, agree to exempt any Person from falling into this definition, by passing resolutions pursuant to these By-laws.
“Consortium” means the group of entities, of any nature, form or denomination, irrespective of their denomination or jurisdiction of incorporation, connected amongst each other through one or more individuals that forming or not a Group of Persons, have Control over such entities, provided that, as part of the concept entity, a trust or similar contract shall be deemed included regardless of the applicable law under which such entities are incorporated or executed, and regardless of its denomination.
“Control”, “Controls” or “Controlled” means the ability of a Person or Group of Persons, whatever their nature or denomination (including a Consortium or Corporate Group) and irrespective of the jurisdiction of incorporation or existence, to carry out any of the following acts (i) impose, directly or indirectly, decisions in the general shareholders meetings or partners meetings or equivalent bodies, or to appoint or remove the majority of the directors or equivalent positions in the Company, (ii) maintain ownership of any class of Shares or rights derived from such Shares, that allow, directly or indirectly, the exercise of the voting right of more than 50% (fifty percent) of the capital stock of the Company, or (iii) direct, or in any other form determine, directly or indirectly, the management, the strategy or the principal policies of the Company, whether such ability results from holding securities or from a contractual arrangement or from any other means.
“Relevant Directors” means the Chief Executive Officer, as well as the individuals who by holding a position, post or commission in the Company or in the entities Controlled by the Company or Controlling such Company, make decisions that significantly transcend the administrative, financial, operational or legal position of the Company or the Corporate Group to which it belongs, without comprising within this definition the members of the Board of Directors or of the board of directors of the concerned Person.
“Corporate Group” means a group of entities, whatever their nature or denomination, irrespective of their jurisdiction of incorporation, organized under a scheme of direct or indirect equity participation, or otherwise, in which one entity Controls the other entities, provided that, as in the definition of entity, trusts or similar agreements shall be deemed included, regardless of the laws under which such trusts or similar arrangements are created or executed and regardless of their corporate name.
“Group of Persons” means the Persons, including Corporate Groups, that have entered into agreements, of any type, oral or written, apparent or implicit, pursuant to which they have agreed to make decisions in the same direction or to act jointly (even if not in the same direction). It shall be presumed, unless otherwise evidenced, that the following are “Groups of Persons”: (a) persons who are related by blood or law, up to the fourth degree, related by affinity up to the third degree, spouses and concubines; and (b) legal entities, whatever their nature and irrespective of their jurisdiction of incorporation, that belong to the same Consortium or Corporate Group and the Person or Group of Persons that has Control over such legal entities, provided that, in the definition of entity, trusts or similar agreements, regardless of their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“Significant Influence” means the ownership of rights which allow, directly or indirectly, by any means, including through a Consortium, Group of Persons or Corporate Group, the exercise of voting rights in respect of at least 20% (twenty percent) of the capital stock of a Person, provided that, in the definition of entity, trusts or similar agreements, regardless their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“20% Participation” means the ownership or title, of at least the 20% (twenty percent) or more of the shares, partnership interest or any other interest regardless of whether it is held individually or jointly, directly or indirectly through a legal entity, trust or similar figure, vehicle, enterprise, company, Consortium, Group of Persons or Corporate Group, or other form of economic or commercial association, of any nature and however denominated, having legal existence or not and irrespective of its jurisdiction of organization, with respect to any Person.
“Person” means any individual or legal entity, company, corporation, investment vehicle, trust or similar figure, vehicle, enterprise, or any other form of economic or commercial association or any of its Subsidiaries or Affiliates, of any nature and however denominated, having legal existence or not and irrespective of their jurisdiction of organization, or any Consortium, Group of Persons or Corporate Group, acting or attempting to act jointly, in concert or in coordination for purposes of this Clause.
“Related Parties” means the Persons that, with respect to a Person or the Company, fall into any of the following categories: (a) the Persons that Control or have Significant Influence or a 20% Participation in any legal entity that is part of the Corporate Group or Consortium to which the Company belongs, as well as the directors, managers, or Relevant Directors of the Persons comprising said Consortium or Corporate Group; (b) the Persons with the decision making power, of any nature, in respect of any Person that belongs to the Corporate Group or Consortium to which the relevant Person or the Company belongs; (c) the spouse or concubine and blood or civil relatives up to the fourth degree and relationship by affinity up to the third degree, of the individuals referred to in paragraphs (a) and (b) above, as well as the partners and co-owners of the persons mentioned in such paragraphs or those with whom they maintain business relationships; (d) the legal entities that belong to the same Corporate Group or Consortium as the respective Person or Company; (e) the legal entities Controlled by any of the Persons referred to in paragraphs (a) through (c) above, or in which such Persons have Significant Influence.
“Subsidiary” means any corporation in which a Person is the owner of the majority of the shares of its capital stock or in which a Person has the right to appoint the majority of the members of its board of directors (or equivalent body) or its manager.
(B) Authorization by the Board of Directors for the Acquisition of Securities.
Any and all acquisition or attempt of acquisition of Shares, of any kind, and whatever its form or denomination, that is intended to be performed by any means or title, whether it be through a single transaction or a succession of transactions, without any time limit between one and another, including for these purposes mergers, consolidations or other similar transactions, directly or indirectly, by one or more Persons, Related Parties, Groups of Persons, Corporate Groups or Consortiums, shall require, to be valid, the prior written authorization of the Board of Directors, every time that the number of Shares that is intended to be acquired, together with the Shares already held by the intended acquirer, directly or indirectly, results in a number equal or greater than any percentage of capital stock of 5 (five) or any multiple of 5 (five).
The prior approval by the Board of Directors shall be required regardless of whether the acquisition of the Shares is intended to be performed through a stock exchange, directly or indirectly, in one or more transactions of whatever legal nature, simultaneously or successively, without any time limit, in Mexico or abroad. The prior written approval by the Board of Directors will also be required, for the execution of any agreement of any kind, in oral or written form, regardless of its name, as a result of which voting mechanisms or arrangements, or agreements for associated voting or joint voting, regardless of whether it is in the same direction, that imply a change in the Control of the Company, a 20% Participation or a Significant Influence in the Company (each, a “Voting Arrangement” and jointly, the “Voting Arrangements”). For these purposes, any Person who severally or jointly with any other Person, any Related Party, Group of Persons, Corporate Group or Consortium seeks to carry out an acquisition (including mergers, consolidations or similar transactions), or enter into any Voting Arrangements, shall comply with the following: 1. The interested parties must submit a written request for authorization to the Board of Directors. Such request must be addressed and delivered through a notary public to the Chairman of the Board of Directors at the domicile of the Company with a copy delivered to the Secretary of the Board of Directors of the Company. The request shall contain the following: a. the number and class or series of the Shares which the respective Person and/or any Related Party, Group of Persons, Corporate Group or Consortium (i) owns or co-owns, whether directly or through any Person or Related Party, and/or (ii) in respect of which, they share or enjoy any right, whether it be pursuant to an agreement or otherwise, including any Voting Arrangement;
b. the number and class or series of Shares that are intended to be purchased, whether directly or indirectly, by any means or pursuant to a Voting Arrangement; c. the number and class or series of the Shares pursuant to which any right is intended to be shared, whether it is pursuant to a Voting Arrangement or otherwise; d. (i) the percentage that the Shares referred to in paragraph a. above represent the total issued Shares of the Company , (ii) the percentage that the Shares referred to in paragraph a. represent of the total number of Shares of the same class or series, (iii) the percentage that the Shares referred to in paragraphs b. and c. above, represent of the total Shares issued by the Company, and (iv) the percentage that the Shares referred to in paragraphs b. and c. above represent of the total number of Shares of the same class or series of Shares; e. the identity and nationality of the Person or Persons, Group of Persons, Corporate Group or Consortium that intends to purchase the Shares or execute the respective Voting Arrangement, provided that if any of them is a legal entity, investment company, trust or its equivalent, or any other vehicle, entity, company or form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, the identity and nationality of the partners or shareholders, settlors and trustees, members of the technical committee, successors, managers, members or associates, or its equivalents, shall be specified, as well as the identity and nationality of the Person or Persons that Control, directly or indirectly, the legal entity, investment company, trust, vehicle, entity, company or form of economic or commercial association, or equivalent, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, until the Person or individual who Controls or has any right, interest or final participation, of any nature, over the legal entity, trust or its equivalent, vehicle, entity, company or any form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, are identified; f. the reasons and objectives sought through the purchase of the Shares, subject of the requested authorization, or the execution of the relevant Voting Arrangement specifically mentioning if it intends to purchase, directly or indirectly, (i) any additional Shares to the ones referred to in the authorization request, (ii) a 20% Participation in the Company, (iii) the Control of the Company, or (iv) Significant Influence in the Company; g. if it is, directly or indirectly, a Competitor of the Company or of any Subsidiary or Affiliate of the Company and if it has the legal capacity to purchase the Shares or enter into the relevant Voting Arrangement, in accordance with the provisions of these By-laws and the applicable law; where appropriate, if it is in the process of obtaining any consent or authorization, indicate the person that will grant the consent or authorization, and the terms and time period within which it expects to obtain it; and if the Person or Persons that intend to purchase the relevant Shares have Related Parties that may be considered a Competitor of the Company or of any Subsidiary or Affiliate of the Company, or if it has any economic or business relationship with a Competitor or any interest or participation whether in the form of an equity participation in or in the management or operation of a Competitor, directly or by means of any Person or Related Party; h. the source of the funds to be used to pay the price for the acquisition of the Shares intended to be acquired; in the event that the source of the funds is a loan or other financing, the intended acquirer shall specify the identity and nationality of the Person providing such funding, the financial statements or other proof that evidences the solvency of such Person and shall deliver, as an attachment to the authorization request, the documentation evidencing and explaining the terms and conditions of such financing, including a commitment, signed by such Person, not subject to any material conditions, which shall include any collateral agreed upon to be provided. The Board of Directors may request that the intended acquirer (i) post a bond (fianza), (ii) create a security trust, (iii) provide an irrevocable letter of credit, (iv) make a deposit, or (v) provide any other security or guaranty approved by the Board of Directors, to secure up to 100% (one hundred percent) of the price of the Shares that are intended to be purchased or that are the subject of the relevant Voting Arrangement, designating the Company or the shareholders, through the Company, as the beneficiaries, and to secure the compensation for any damages and losses that the Company or its shareholders may suffer as a consequence of any misstatements of the information provided or as a consequence of the request or as a result of any action or omission of the applicant, directly or indirectly; i. if it has received funding in the form of a loan or in any other form, from a Related Party or Competitor or has provided funding to a Related Party or Competitor, to obtain the funds to pay the Shares intended to be acquired or to enter into the relevant Voting Arrangement; j. the identity and nationality of the financial institution to act as intermediary, in the event that the relevant acquisition is carried out through a tender offer; k. if applicable, because of the need of a public offering, a copy of the information memorandum or similar document that is intended to be used in connection with the purchase of the Shares or in connection with the transaction or agreement at issue, and a statement that the acquisition has been approved or submitted for approval by the competent authorities (including the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores); and l. an address in Mexico City, Mexico, to receive notices relating to its request. The Board of Directors may determine, in the event that certain information is impossible to produce at the time of submitting the request, that such information be omitted from the request and the Board of Directors may waive the requirement to comply with any of the above-mentioned requirements. 2. Within 8 (eight) business days following the date in which the request for authorization referred to in paragraph 1 above is received, the Chairman or Secretary of the Board of Directors shall call for a meeting of the Board of Directors to discuss and decide on the request for authorization. The call for the meeting of the Board of Directors shall be made in writing and sent by the Chairman or the Secretary to each of the Directors or alternate members of the Board Members with the anticipation provided for in these By-laws, by certified mail, courier, or e-mail, to the addresses designated by the members of the Board of Directors in writing for purposes of this Clause of the By-laws. The calls shall specify the date, time and place of the meeting and the relevant Agenda. 3. The Board of Directors shall resolve any request for authorization that is submitted pursuant to this Clause of the By-laws, within 90 (ninety) calendar days following, and counted from, the date in which the request was filed, provided that the request contains all the information that is required pursuant to this Clause. If the Board of Directors does not make a decision on the authorization within the 90 (ninety) calendar day period referred to above, the authorization request shall be deemed as denied. The Board of Directors may request that the person who intends to acquire the relevant shares or to execute the relevant Voting Arrangement, provide any additional documentation, and any clarifications it deems necessary, as well as to hold any meetings that the Board of Directors deems convenient, to decide on the requested authorization for the acquisition; provided that the terms set forth in this provision shall not begin running, and the request will not be considered completed, until the Person that intends to acquire the Shares or enter into the relevant Voting Arrangement, provides all additional information and clarifications that the Board of Directors deems necessary. 4. The attendance of at least 75% (seventy five percent) of the principal or alternate members of the Board of Directors will be required to consider a meeting called to resolve any matter related to the authorization of an acquisition or an agreement in terms of this Clause, to be validly installed in first or subsequent calls. The resolutions will be valid when made by 75% (seventy five percent) of the members of the Board of Directors. The meetings of the Board of Directors will be called for and the resolutions adopted therein shall relate solely to the request for authorization referred to in this Clause (or fragments of such request for authorization). 5. In the event that the Board of Directors authorizes the intended acquisition of Shares or the entering into of the Voting Arrangement, and such acquisition, transaction or agreement results in (i) the acquisition of a 20% Participation or greater, or (ii) a change in Control, or (iii) the acquisition of a Significant Influence with respect to the Company, notwithstanding if such authorization was granted, the intended acquirer or party entering into the Voting Arrangement shall have to make a public offering to acquire 100% (one hundred percent) of the outstanding Shares of the Company minus one Share, for a price, in cash, that is the higher of the following: a. the book value per Share, according to the last quarterly financial statements approved by the Board of Directors or filed before the National Banking and Securities Commission or any stock exchange; or b. the highest closing price per Share traded in the stock exchange, over the 365 (three hundred sixty five) calendar days prior to the date of the Board of Directors’ authorization or request; or c. the highest purchase price per Share paid at any time, by the Person that, severally or jointly, directly or indirectly, intends to acquire the Shares or to enter into a Voting Arrangement authorized by the Board of Directors, plus in each case, an additional premium equal to 30% (thirty percent) of the price per Share payable in connection with the acquisition whose authorization is requested, provided however, that the Board of Directors may increase or decrease the amount of any such premium, taking into account the opinion of a reputable investment bank. The public purchase offering referred to in this Clause must be completed within 90 (ninety) natural days from the date in which the acquisition or the execution of the Voting Arrangement is authorized by the Board of Directors, pursuant to the procedure set forth in this Clause. The price paid for each Share shall be the same, regardless of the class or series of such Share. In the event that on or before the relevant acquisition or execution of the Voting Arrangement, the Board of Directors receives another written request for authorization to purchase the relevant Shares (including through a merger, consolidation or similar transaction), with terms more favorable for the shareholders of the Company, then the Board of Directors shall be entitled to consider and, if appropriate, approve the second request and suspend the previously approved transaction, and it shall submit both bids to the consideration of the Board of Directors, provided that, any approval shall be granted without affecting the obligation to carry out a public tender offer pursuant to the terms of this Clause and applicable law. 6. Acquisitions of Shares or a Voting Arrangement that would not result in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company or (iii) the acquisition of Significant Influence with respect to the Company, may be recorded in the Shareholders Registry Book of the Company once they have been duly authorized by the Board of Directors and concluded. Acquisitions resulting in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company, or (iii) the acquisition of Significant Influence with respect to the Company, will not be recorded in the Shares Registry Book of the Company, until the public offer referred to in this Clause has been completed. Thus, the rights under the acquired Shares shall not be capable of being exercised until the relevant public offer has been completed. 7. The Board of Directors may deny its approval of the requested acquisition of Shares or the execution of the proposed Voting Arrangement, in which case it shall inform the proposed acquirer in writing the grounds and reasons for such denial, and it may likewise inform the acquirer of the terms and conditions pursuant to which it would be in a position to authorized the proposed acquisition of Shares or Voting Arrangement. The proposed acquirer will have the right to request and hold a meeting with the Board of Directors or an ad-hoc committee appointed by the Board of Directors, to explain, expand or clarify the terms of the request, as well as to present its position in a written document for the Board of Directors.
(C) General Provisions.
For purposes of this Clause, it shall be deemed that a Person is the owner of all Shares owned by such Person, as well as of all of the Shares (i) owned by any Related Party, or (ii) any legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that holds title when that legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, is Controlled by the mentioned Person. Furthermore, when one or more Persons are seeking to purchase Shares jointly, in a coordinated or concerted manner, through a single transaction or successive transactions, regardless of their legal form, it shall be deemed, for the purposes of this Clause, as a single Person who owns all such Shares. The Board of Directors may determine other cases in which one or more Persons that intend to acquire Shares or enter into Voting Arrangements shall be deemed as a single Person for purposes of this Clause. In making this determination, the Board of Directors may consider any legal or de facto information that is available. In order to evaluate any request for authorization submitted to the Board of Directors in terms of this Clause, the Board of Directors shall take into consideration any information that they deem appropriate, taking into consideration the best interests of the Company and its shareholders, including considerations as to the financial, market, business, moral and economic solvency of intended acquirer, the source of the funds to be used in the acquisition, potential conflicts of interest, protection of minority shareholders, the expected benefits for the future development of the Company, the impact in the Company’s plans and budgets on the quality, accuracy and veracity of the information submitted to it in terms of this Clause, the viability of the offer, the price offered, the conditions of the bid, the identity and credibility of the bidders (as far as may be determined and without any liability to the Board Members), the reasons for the execution and the temporality of the Voting Arrangement, the sources of funding, if any and time for completion, and any others that they deemed appropriate. Any acquisition of Shares or Voting Arrangement restricted by this Clause, entered into without the prior written authorization of the Board of Directors shall grant no rights to the holders of the Shares acquired or subject to any such Voting Arrangement and such holders shall not be able to vote any such Shares at any Shareholders’ Meeting of the Company, nor exercise any economic rights thereunder, which shall be the acquirer or group of acquirers’ sole responsibility. The Shares acquired pursuant to any such acquisitions or Voting Arrangements shall not be recorded in the Shareholders Registry Book of the Company, and any entries previously made shall be canceled and the Company will not recognize or give any value to the registration or listings referred to in Article 290 (two hundred ninety) of the Securities Exchange Act (Ley del Mercado de Valores), therefore the ownership of the Shares shall not be capable of being proved, and the right to attend any Shareholders Meeting shall not be capable of being credited, nor shall the holders of such Shares be able to exercise any action, including those of a procedural nature. The authorizations granted by the Board of Directors pursuant to this Clause will cease to be effective if the information and documentation on which such authorization was based is false or ceases to be true and/or legal. In the event that any transaction entered into is in violation of this Clause, the Board of Directors may agree upon the following measures amongst others: (i) the reversal of the transaction, with mutual restitution between the parties, when possible, or (ii) the transferring of the relevant Shares to an interested third party approved by the Board of Directors at the minimum price that the Board of Directors establishes. The provisions in this Clause will not be applicable to (a) the acquisitions or transfers of Shares made by succession, either by inheritance or legacy, or (b) the acquisition or transfer of Shares, or any other agreement or arrangement, (i) by the Person or Persons that collectively have the Control of the Company or Significant Influence in the Company as of the date in which this Clause is approved by the General Shareholders Meeting (that is, immediately before the initial public offering subscription of shares), (ii) by any legal entity, trust, vehicle, entity, company or any other form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that is under the Control of the Person or Persons referred to in subsection (i) above, (iii) by the estate of the Person or Persons referred to in subsection (i) above; (iv) by the ascendants or descendants in a direct line within the third degree of the Person or Persons referred to in subsection (i) above, (v) by the Person or Persons referred to in subsection (i) above, when purchasing the Shares from any company, trust, vehicle, entity, company, any form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, ascendants or descendants referred to in subsections (iii) and (iv) above, and (vi) by the Company or its Subsidiaries, or by trusts created by the Company or its Subsidiaries or by any other Person Controlled by the Company or by its Subsidiaries, or (c) the future transfer of Shares into a trust or similar entity by the existing shareholders of the Company on the date of the public offering of Shares in Mexico, made at any moment in the future. The provisions contained in this Clause shall be applicable in addition to the provisions of the statutes or laws and mandatory general provisions related to securities acquisitions that are effective in the market in which the Shares, or other securities related to these or rights arising thereof are listed; in case that any provision in this Clause contravenes, in whole or in part, any provision in such laws, the provisions of the relevant statute and mandatory general provisions related to securities acquisitions shall prevail. This Clause shall be filed for registration in the Public Registry of Commerce of the domicile of the Company and shall be expressly included in the share certificates representing the capital stock of the Company, in order to ascertain effect against third parties. This Clause may only be modified or deleted from the By-laws, through a favorable resolution of the shareholders with at least 90% (ninety percent) of the outstanding Shares at the moment of approval, elimination or relevant amendment, provided that no shareholders representing at least 5% (five percent) of the outstanding Shares of the Company at the time of the vote, vote against any such elimination or amendment.
(c) Restrictions on the Transfer of Series B Shares.
Series B Shares will only be transferable in transactions of any nature and any kind, including, for these purposes, mergers, consolidations or other similar transactions, directly or indirectly, to the shareholders holding Series B Shares or to an Affiliate of the shareholders holding Series B Shares precisely on the date of the initial public offering subscription of the Shares. In the event that any transfer of Series B Shares contravenes the preceding or is made to any third party, such Series B Shares will be automatically converted into Series A Shares and the provisions established in this Clause will be applicable.
 
2

			
Provisional Certificate No.     	 	Represents      ordinary, nominative, Series “A”, Class II
shares, without expression of nominal value,
representative of the variable capital.	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

	 	CORPORATE DOMICILE:	 	Mexico City, Federal District.	  		
	 	TERM:	 	Indefinite.	  		
This Title is deposited in administration with S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., in terms and for the purposes of Article 282 of the Securities Market Law and represents      ordinary, nominative, Series “A”, Class II shares, without expression of nominal value, fully paid and subscribed, representative of the variable capital of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), of the total ordinary, nominative, Series “A”, Class II shares, without expression of nominal value, representative of the variable capital of the Company.
The Company was incorporated under the name “Controladora Vuela Compañía de Aviación, S.A. de C.V.”, by means of public deed No. 83.537, dated October 27, 2005, granted before Lic José Visoso del Valle, Notary Public number 92 of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number 342,507, on January 20, 2006.
     of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number     , on     ,     , it was resolved, among other things, to adopt the form of a Sociedad Anónima Bursátil de Capital Variable and, consequently, the amendment to the corporate name of the Company to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., and the amendment to the Company’s By-laws.
“ FIFTH. Nationality . The Company is of Mexican nationality. Any foreigner who at the time of incorporation or at any time thereafter acquires shares of the Company, agrees with the Ministry of Foreign Affairs to be treated as Mexican national with respect to (a) the shares or rights acquired of the Company and (b) the properties, rights, governmental concessions, participations or interests owned by the Company and (c) any rights and obligations derived from the agreements entered into by the Company; and it shall be understood that each foreigner agrees not to invoke the protection of his government, under penalty, in case of failure to comply with such agreement, of forfeiture of the acquired rights and assets in favor of the Mexican nation.” 
Mexico City, Federal District,      de 2013.

	 	 	  		  	 	  		
	 	[                    ]	  		  	[                    ]	  		
	 	Director	  		  	Director	  		
 
3

Main Rights and Obligations of the Shareholders
In accordance with the provisions of the Bylaws, the following is the full text of the Clause Eight of the Bylaws:
EIGHTH. Acquisition of Shares by the Company; Change of Control Provisions; Restrictions in the Transfer of Series B Shares.
(a) Acquisition of Shares by the Company. The Company may acquire shares representing its own capital stock or negotiable instruments or any other instruments that represent such shares without being subject to the prohibition established in the first paragraph of Article 134 (one hundred thirty four) of the Mexican General Corporations Law. The acquisition of its own shares shall take place in any national or foreign securities exchange or in any foreign market at market prices, except in case of public bids or auctions authorized by the National Banking and Securities Commission. The acquisition of its own shares shall be made against its net worth, in which case the Company may maintain the acquired shares with no need of reducing its capital stock, or, against its capital stock, in which case such shares shall become unsubscribed and be maintained in its treasury, with no need of an agreement by the General Shareholders Meeting.
The General Ordinary Shareholders Meeting shall expressly agree for each fiscal year, the maximum amount of resources that may be used for the acquisition of its own shares or negotiable instruments or other instruments representing them, with the only limitation being that the total resources for the corresponding acquisition may not exceed the sum of the total net profits of the Company, including the profits retained from previous years. In any event, the Company must be up to date in the payment of the obligations arising from debt instruments registered with the National Securities Registry. The Board of Directors shall appoint the responsible persons of the acquisition and placement of its own shares.
As long as the acquired shares belong to the Company, such shares may not be represented or voted in the General Shareholders Meetings, nor exercise any kind of corporate or economic rights with respect to such shares.
The acquisition and sale of shares under this Clause, the reports of the transactions about such transactions which shall be submitted to the General Ordinary Shareholders Meeting, the rules of financial information disclosure, as well as the manner and terms under which these transactions shall be reported to the National Banking and Securities Commission, the relevant stock exchange and the public investors, shall be subject to the provisions of the Mexican Securities Market Law and the general provisions issued by such Commission.
(b) Change of Control Provisions
(A) Defined Terms
For purposes of this paragraph of Clause Eighth, the following terms shall have the meanings ascribed to them:
“Shares” means any and all the shares representing the capital stock of the Company, of whatever class, series or name, or any security, instrument, right (detachable or not, represented or not by any instrument, or resulting from contractual provisions and not by any instrument) or instrument issued or created based on such shares, including ordinary participation certificates or depositary certificates in respect thereto, irrespective of their governing law or the market where they may be placed, executed or granted, or of its name, or that otherwise grants its holders rights to such shares or is convertible into or exchangeable for such shares, including financial instruments and operations known as derivative transactions, options, warrants or other similar or equivalent rights or instruments, or any complete or partial right in respect of or related to shares evidencing the capital stock of the Company, including in all cases within the definition, notwithstanding they may not be strictly considered as shares.
“Voting Arrangement” shall have the meaning ascribed to such term in this Clause Eighth.
“Affiliate” means (i) any company that Controls, is Controlled by, or is under common Control of any Person, and (ii) with respect to an individual, any of the parents, siblings, spouse, previous spouse, concubines, direct descendants, without limit of degree, the spouses and previous spouses of such descendants, as well as any trust or agreement or equivalent executed with the purpose to benefit such individuals.
“Competitor” means any Person involved, directly or indirectly, through any means and through any entity, vehicle or contract, in a preponderant or sporadic manner, in (i) the business of air transportation services of passengers, cargo, currier and/or mixed, and/or (ii) any activity in which the Company or any of its Subsidiaries is at any time involved, and which represents 5% (five percent) or more of the consolidated gross income of the Company and its Subsidiaries, provided that the Board of Directors may, on a case by case basis, agree to exempt any Person from falling into this definition, by passing resolutions pursuant to these By-laws.
“Consortium” means the group of entities, of any nature, form or denomination, irrespective of their denomination or jurisdiction of incorporation, connected amongst each other through one or more individuals that forming or not a Group of Persons, have Control over such entities, provided that, as part of the concept entity, a trust or similar contract shall be deemed included regardless of the applicable law under which such entities are incorporated or executed, and regardless of its denomination.
“Control”, “Controls” or “Controlled” means the ability of a Person or Group of Persons, whatever their nature or denomination (including a Consortium or Corporate Group) and irrespective of the jurisdiction of incorporation or existence, to carry out any of the following acts (i) impose, directly or indirectly, decisions in the general shareholders meetings or partners meetings or equivalent bodies, or to appoint or remove the majority of the directors or equivalent positions in the Company, (ii) maintain ownership of any class of Shares or rights derived from such Shares, that allow, directly or indirectly, the exercise of the voting right of more than 50% (fifty percent) of the capital stock of the Company, or (iii) direct, or in any other form determine, directly or indirectly, the management, the strategy or the principal policies of the Company, whether such ability results from holding securities or from a contractual arrangement or from any other means.
“Relevant Directors” means the Chief Executive Officer, as well as the individuals who by holding a position, post or commission in the Company or in the entities Controlled by the Company or Controlling such Company, make decisions that significantly transcend the administrative, financial, operational or legal position of the Company or the Corporate Group to which it belongs, without comprising within this definition the members of the Board of Directors or of the board of directors of the concerned Person.
“Corporate Group” means a group of entities, whatever their nature or denomination, irrespective of their jurisdiction of incorporation, organized under a scheme of direct or indirect equity participation, or otherwise, in which one entity Controls the other entities, provided that, as in the definition of entity, trusts or similar agreements shall be deemed included, regardless of the laws under which such trusts or similar arrangements are created or executed and regardless of their corporate name.
“Group of Persons” means the Persons, including Corporate Groups, that have entered into agreements, of any type, oral or written, apparent or implicit, pursuant to which they have agreed to make decisions in the same direction or to act jointly (even if not in the same direction). It shall be presumed, unless otherwise evidenced, that the following are “Groups of Persons”: (a) persons who are related by blood or law, up to the fourth degree, related by affinity up to the third degree, spouses and concubines; and (b) legal entities, whatever their nature and irrespective of their jurisdiction of incorporation, that belong to the same Consortium or Corporate Group and the Person or Group of Persons that has Control over such legal entities, provided that, in the definition of entity, trusts or similar agreements, regardless of their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“Significant Influence” means the ownership of rights which allow, directly or indirectly, by any means, including through a Consortium, Group of Persons or Corporate Group, the exercise of voting rights in respect of at least 20% (twenty percent) of the capital stock of a Person, provided that, in the definition of entity, trusts or similar agreements, regardless their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“20% Participation” means the ownership or title, of at least the 20% (twenty percent) or more of the shares, partnership interest or any other interest regardless of whether it is held individually or jointly, directly or indirectly through a legal entity, trust or similar figure, vehicle, enterprise, company, Consortium, Group of Persons or Corporate Group, or other form of economic or commercial association, of any nature and however denominated, having legal existence or not and irrespective of its jurisdiction of organization, with respect to any Person.
“Person” means any individual or legal entity, company, corporation, investment vehicle, trust or similar figure, vehicle, enterprise, or any other form of economic or commercial association or any of its Subsidiaries or Affiliates, of any nature and however denominated, having legal existence or not and irrespective of their jurisdiction of organization, or any Consortium, Group of Persons or Corporate Group, acting or attempting to act jointly, in concert or in coordination for purposes of this Clause.
“Related Parties” means the Persons that, with respect to a Person or the Company, fall into any of the following categories: (a) the Persons that Control or have Significant Influence or a 20% Participation in any legal entity that is part of the Corporate Group or Consortium to which the Company belongs, as well as the directors, managers, or Relevant Directors of the Persons comprising said Consortium or Corporate Group; (b) the Persons with the decision making power, of any nature, in respect of any Person that belongs to the Corporate Group or Consortium to which the relevant Person or the Company belongs; (c) the spouse or concubine and blood or civil relatives up to the fourth degree and relationship by affinity up to the third degree, of the individuals referred to in paragraphs (a) and (b) above, as well as the partners and co-owners of the persons mentioned in such paragraphs or those with whom they maintain business relationships; (d) the legal entities that belong to the same Corporate Group or Consortium as the respective Person or Company; (e) the legal entities Controlled by any of the Persons referred to in paragraphs (a) through (c) above, or in which such Persons have Significant Influence.
“Subsidiary” means any corporation in which a Person is the owner of the majority of the shares of its capital stock or in which a Person has the right to appoint the majority of the members of its board of directors (or equivalent body) or its manager.
(B) Authorization by the Board of Directors for the Acquisition of Securities.
Any and all acquisition or attempt of acquisition of Shares, of any kind, and whatever its form or denomination, that is intended to be performed by any means or title, whether it be through a single transaction or a succession of transactions, without any time limit between one and another, including for these purposes mergers, consolidations or other similar transactions, directly or indirectly, by one or more Persons, Related Parties, Groups of Persons, Corporate Groups or Consortiums, shall require, to be valid, the prior written authorization of the Board of Directors, every time that the number of Shares that is intended to be acquired, together with the Shares already held by the intended acquirer, directly or indirectly, results in a number equal or greater than any percentage of capital stock of 5 (five) or any multiple of 5 (five).
The prior approval by the Board of Directors shall be required regardless of whether the acquisition of the Shares is intended to be performed through a stock exchange, directly or indirectly, in one or more transactions of whatever legal nature, simultaneously or successively, without any time limit, in Mexico or abroad. The prior written approval by the Board of Directors will also be required, for the execution of any agreement of any kind, in oral or written form, regardless of its name, as a result of which voting mechanisms or arrangements, or agreements for associated voting or joint voting, regardless of whether it is in the same direction, that imply a change in the Control of the Company, a 20% Participation or a Significant Influence in the Company (each, a “Voting Arrangement” and jointly, the “Voting Arrangements”). For these purposes, any Person who severally or jointly with any other Person, any Related Party, Group of Persons, Corporate Group or Consortium seeks to carry out an acquisition (including mergers, consolidations or similar transactions), or enter into any Voting Arrangements, shall comply with the following: 1. The interested parties must submit a written request for authorization to the Board of Directors. Such request must be addressed and delivered through a notary public to the Chairman of the Board of Directors at the domicile of the Company with a copy delivered to the Secretary of the Board of Directors of the Company. The request shall contain the following: a. the number and class or series of the Shares which the respective Person and/or any Related Party, Group of Persons, Corporate Group or Consortium (i) owns or co-owns, whether directly or through any Person or Related Party, and/or (ii) in respect of which, they share or enjoy any right, whether it be pursuant to an agreement or otherwise, including any Voting Arrangement;
b. the number and class or series of Shares that are intended to be purchased, whether directly or indirectly, by any means or pursuant to a Voting Arrangement; c. the number and class or series of the Shares pursuant to which any right is intended to be shared, whether it is pursuant to a Voting Arrangement or otherwise; d. (i) the percentage that the Shares referred to in paragraph a. above represent the total issued Shares of the Company , (ii) the percentage that the Shares referred to in paragraph a. represent of the total number of Shares of the same class or series, (iii) the percentage that the Shares referred to in paragraphs b. and c. above, represent of the total Shares issued by the Company, and (iv) the percentage that the Shares referred to in paragraphs b. and c. above represent of the total number of Shares of the same class or series of Shares; e. the identity and nationality of the Person or Persons, Group of Persons, Corporate Group or Consortium that intends to purchase the Shares or execute the respective Voting Arrangement, provided that if any of them is a legal entity, investment company, trust or its equivalent, or any other vehicle, entity, company or form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, the identity and nationality of the partners or shareholders, settlors and trustees, members of the technical committee, successors, managers, members or associates, or its equivalents, shall be specified, as well as the identity and nationality of the Person or Persons that Control, directly or indirectly, the legal entity, investment company, trust, vehicle, entity, company or form of economic or commercial association, or equivalent, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, until the Person or individual who Controls or has any right, interest or final participation, of any nature, over the legal entity, trust or its equivalent, vehicle, entity, company or any form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, are identified; f. the reasons and objectives sought through the purchase of the Shares, subject of the requested authorization, or the execution of the relevant Voting Arrangement specifically mentioning if it intends to purchase, directly or indirectly, (i) any additional Shares to the ones referred to in the authorization request, (ii) a 20% Participation in the Company, (iii) the Control of the Company, or (iv) Significant Influence in the Company; g. if it is, directly or indirectly, a Competitor of the Company or of any Subsidiary or Affiliate of the Company and if it has the legal capacity to purchase the Shares or enter into the relevant Voting Arrangement, in accordance with the provisions of these By-laws and the applicable law; where appropriate, if it is in the process of obtaining any consent or authorization, indicate the person that will grant the consent or authorization, and the terms and time period within which it expects to obtain it; and if the Person or Persons that intend to purchase the relevant Shares have Related Parties that may be considered a Competitor of the Company or of any Subsidiary or Affiliate of the Company, or if it has any economic or business relationship with a Competitor or any interest or participation whether in the form of an equity participation in or in the management or operation of a Competitor, directly or by means of any Person or Related Party; h. the source of the funds to be used to pay the price for the acquisition of the Shares intended to be acquired; in the event that the source of the funds is a loan or other financing, the intended acquirer shall specify the identity and nationality of the Person providing such funding, the financial statements or other proof that evidences the solvency of such Person and shall deliver, as an attachment to the authorization request, the documentation evidencing and explaining the terms and conditions of such financing, including a commitment, signed by such Person, not subject to any material conditions, which shall include any collateral agreed upon to be provided. The Board of Directors may request that the intended acquirer (i) post a bond (fianza), (ii) create a security trust, (iii) provide an irrevocable letter of credit, (iv) make a deposit, or (v) provide any other security or guaranty approved by the Board of Directors, to secure up to 100% (one hundred percent) of the price of the Shares that are intended to be purchased or that are the subject of the relevant Voting Arrangement, designating the Company or the shareholders, through the Company, as the beneficiaries, and to secure the compensation for any damages and losses that the Company or its shareholders may suffer as a consequence of any misstatements of the information provided or as a consequence of the request or as a result of any action or omission of the applicant, directly or indirectly; i. if it has received funding in the form of a loan or in any other form, from a Related Party or Competitor or has provided funding to a Related Party or Competitor, to obtain the funds to pay the Shares intended to be acquired or to enter into the relevant Voting Arrangement; j. the identity and nationality of the financial institution to act as intermediary, in the event that the relevant acquisition is carried out through a tender offer; k. if applicable, because of the need of a public offering, a copy of the information memorandum or similar document that is intended to be used in connection with the purchase of the Shares or in connection with the transaction or agreement at issue, and a statement that the acquisition has been approved or submitted for approval by the competent authorities (including the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores); and l. an address in Mexico City, Mexico, to receive notices relating to its request. The Board of Directors may determine, in the event that certain information is impossible to produce at the time of submitting the request, that such information be omitted from the request and the Board of Directors may waive the requirement to comply with any of the above-mentioned requirements. 2. Within 8 (eight) business days following the date in which the request for authorization referred to in paragraph 1 above is received, the Chairman or Secretary of the Board of Directors shall call for a meeting of the Board of Directors to discuss and decide on the request for authorization. The call for the meeting of the Board of Directors shall be made in writing and sent by the Chairman or the Secretary to each of the Directors or alternate members of the Board Members with the anticipation provided for in these By-laws, by certified mail, courier, or e-mail, to the addresses designated by the members of the Board of Directors in writing for purposes of this Clause of the By-laws. The calls shall specify the date, time and place of the meeting and the relevant Agenda. 3. The Board of Directors shall resolve any request for authorization that is submitted pursuant to this Clause of the By-laws, within 90 (ninety) calendar days following, and counted from, the date in which the request was filed, provided that the request contains all the information that is required pursuant to this Clause. If the Board of Directors does not make a decision on the authorization within the 90 (ninety) calendar day period referred to above, the authorization request shall be deemed as denied. The Board of Directors may request that the person who intends to acquire the relevant shares or to execute the relevant Voting Arrangement, provide any additional documentation, and any clarifications it deems necessary, as well as to hold any meetings that the Board of Directors deems convenient, to decide on the requested authorization for the acquisition; provided that the terms set forth in this provision shall not begin running, and the request will not be considered completed, until the Person that intends to acquire the Shares or enter into the relevant Voting Arrangement, provides all additional information and clarifications that the Board of Directors deems necessary. 4. The attendance of at least 75% (seventy five percent) of the principal or alternate members of the Board of Directors will be required to consider a meeting called to resolve any matter related to the authorization of an acquisition or an agreement in terms of this Clause, to be validly installed in first or subsequent calls. The resolutions will be valid when made by 75% (seventy five percent) of the members of the Board of Directors. The meetings of the Board of Directors will be called for and the resolutions adopted therein shall relate solely to the request for authorization referred to in this Clause (or fragments of such request for authorization). 5. In the event that the Board of Directors authorizes the intended acquisition of Shares or the entering into of the Voting Arrangement, and such acquisition, transaction or agreement results in (i) the acquisition of a 20% Participation or greater, or (ii) a change in Control, or (iii) the acquisition of a Significant Influence with respect to the Company, notwithstanding if such authorization was granted, the intended acquirer or party entering into the Voting Arrangement shall have to make a public offering to acquire 100% (one hundred percent) of the outstanding Shares of the Company minus one Share, for a price, in cash, that is the higher of the following: a. the book value per Share, according to the last quarterly financial statements approved by the Board of Directors or filed before the National Banking and Securities Commission or any stock exchange; or b. the highest closing price per Share traded in the stock exchange, over the 365 (three hundred sixty five) calendar days prior to the date of the Board of Directors’ authorization or request; or c. the highest purchase price per Share paid at any time, by the Person that, severally or jointly, directly or indirectly, intends to acquire the Shares or to enter into a Voting Arrangement authorized by the Board of Directors, plus in each case, an additional premium equal to 30% (thirty percent) of the price per Share payable in connection with the acquisition whose authorization is requested, provided however, that the Board of Directors may increase or decrease the amount of any such premium, taking into account the opinion of a reputable investment bank. The public purchase offering referred to in this Clause must be completed within 90 (ninety) natural days from the date in which the acquisition or the execution of the Voting Arrangement is authorized by the Board of Directors, pursuant to the procedure set forth in this Clause. The price paid for each Share shall be the same, regardless of the class or series of such Share. In the event that on or before the relevant acquisition or execution of the Voting Arrangement, the Board of Directors receives another written request for authorization to purchase the relevant Shares (including through a merger, consolidation or similar transaction), with terms more favorable for the shareholders of the Company, then the Board of Directors shall be entitled to consider and, if appropriate, approve the second request and suspend the previously approved transaction, and it shall submit both bids to the consideration of the Board of Directors, provided that, any approval shall be granted without affecting the obligation to carry out a public tender offer pursuant to the terms of this Clause and applicable law. 6. Acquisitions of Shares or a Voting Arrangement that would not result in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company or (iii) the acquisition of Significant Influence with respect to the Company, may be recorded in the Shareholders Registry Book of the Company once they have been duly authorized by the Board of Directors and concluded. Acquisitions resulting in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company, or (iii) the acquisition of Significant Influence with respect to the Company, will not be recorded in the Shares Registry Book of the Company, until the public offer referred to in this Clause has been completed. Thus, the rights under the acquired Shares shall not be capable of being exercised until the relevant public offer has been completed. 7. The Board of Directors may deny its approval of the requested acquisition of Shares or the execution of the proposed Voting Arrangement, in which case it shall inform the proposed acquirer in writing the grounds and reasons for such denial, and it may likewise inform the acquirer of the terms and conditions pursuant to which it would be in a position to authorized the proposed acquisition of Shares or Voting Arrangement. The proposed acquirer will have the right to request and hold a meeting with the Board of Directors or an ad-hoc committee appointed by the Board of Directors, to explain, expand or clarify the terms of the request, as well as to present its position in a written document for the Board of Directors.
(C) General Provisions.
For purposes of this Clause, it shall be deemed that a Person is the owner of all Shares owned by such Person, as well as of all of the Shares (i) owned by any Related Party, or (ii) any legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that holds title when that legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, is Controlled by the mentioned Person. Furthermore, when one or more Persons are seeking to purchase Shares jointly, in a coordinated or concerted manner, through a single transaction or successive transactions, regardless of their legal form, it shall be deemed, for the purposes of this Clause, as a single Person who owns all such Shares. The Board of Directors may determine other cases in which one or more Persons that intend to acquire Shares or enter into Voting Arrangements shall be deemed as a single Person for purposes of this Clause. In making this determination, the Board of Directors may consider any legal or de facto information that is available. In order to evaluate any request for authorization submitted to the Board of Directors in terms of this Clause, the Board of Directors shall take into consideration any information that they deem appropriate, taking into consideration the best interests of the Company and its shareholders, including considerations as to the financial, market, business, moral and economic solvency of intended acquirer, the source of the funds to be used in the acquisition, potential conflicts of interest, protection of minority shareholders, the expected benefits for the future development of the Company, the impact in the Company’s plans and budgets on the quality, accuracy and veracity of the information submitted to it in terms of this Clause, the viability of the offer, the price offered, the conditions of the bid, the identity and credibility of the bidders (as far as may be determined and without any liability to the Board Members), the reasons for the execution and the temporality of the Voting Arrangement, the sources of funding, if any and time for completion, and any others that they deemed appropriate. Any acquisition of Shares or Voting Arrangement restricted by this Clause, entered into without the prior written authorization of the Board of Directors shall grant no rights to the holders of the Shares acquired or subject to any such Voting Arrangement and such holders shall not be able to vote any such Shares at any Shareholders’ Meeting of the Company, nor exercise any economic rights thereunder, which shall be the acquirer or group of acquirers’ sole responsibility. The Shares acquired pursuant to any such acquisitions or Voting Arrangements shall not be recorded in the Shareholders Registry Book of the Company, and any entries previously made shall be canceled and the Company will not recognize or give any value to the registration or listings referred to in Article 290 (two hundred ninety) of the Securities Exchange Act (Ley del Mercado de Valores), therefore the ownership of the Shares shall not be capable of being proved, and the right to attend any Shareholders Meeting shall not be capable of being credited, nor shall the holders of such Shares be able to exercise any action, including those of a procedural nature. The authorizations granted by the Board of Directors pursuant to this Clause will cease to be effective if the information and documentation on which such authorization was based is false or ceases to be true and/or legal. In the event that any transaction entered into is in violation of this Clause, the Board of Directors may agree upon the following measures amongst others: (i) the reversal of the transaction, with mutual restitution between the parties, when possible, or (ii) the transferring of the relevant Shares to an interested third party approved by the Board of Directors at the minimum price that the Board of Directors establishes. The provisions in this Clause will not be applicable to (a) the acquisitions or transfers of Shares made by succession, either by inheritance or legacy, or (b) the acquisition or transfer of Shares, or any other agreement or arrangement, (i) by the Person or Persons that collectively have the Control of the Company or Significant Influence in the Company as of the date in which this Clause is approved by the General Shareholders Meeting (that is, immediately before the initial public offering subscription of shares), (ii) by any legal entity, trust, vehicle, entity, company or any other form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that is under the Control of the Person or Persons referred to in subsection (i) above, (iii) by the estate of the Person or Persons referred to in subsection (i) above; (iv) by the ascendants or descendants in a direct line within the third degree of the Person or Persons referred to in subsection (i) above, (v) by the Person or Persons referred to in subsection (i) above, when purchasing the Shares from any company, trust, vehicle, entity, company, any form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, ascendants or descendants referred to in subsections (iii) and (iv) above, and (vi) by the Company or its Subsidiaries, or by trusts created by the Company or its Subsidiaries or by any other Person Controlled by the Company or by its Subsidiaries, or (c) the future transfer of Shares into a trust or similar entity by the existing shareholders of the Company on the date of the public offering of Shares in Mexico, made at any moment in the future. The provisions contained in this Clause shall be applicable in addition to the provisions of the statutes or laws and mandatory general provisions related to securities acquisitions that are effective in the market in which the Shares, or other securities related to these or rights arising thereof are listed; in case that any provision in this Clause contravenes, in whole or in part, any provision in such laws, the provisions of the relevant statute and mandatory general provisions related to securities acquisitions shall prevail. This Clause shall be filed for registration in the Public Registry of Commerce of the domicile of the Company and shall be expressly included in the share certificates representing the capital stock of the Company, in order to ascertain effect against third parties. This Clause may only be modified or deleted from the By-laws, through a favorable resolution of the shareholders with at least 90% (ninety percent) of the outstanding Shares at the moment of approval, elimination or relevant amendment, provided that no shareholders representing at least 5% (five percent) of the outstanding Shares of the Company at the time of the vote, vote against any such elimination or amendment.
(c) Restrictions on the Transfer of Series B Shares.
Series B Shares will only be transferable in transactions of any nature and any kind, including, for these purposes, mergers, consolidations or other similar transactions, directly or indirectly, to the shareholders holding Series B Shares or to an Affiliate of the shareholders holding Series B Shares precisely on the date of the initial public offering subscription of the Shares. In the event that any transfer of Series B Shares contravenes the preceding or is made to any third party, such Series B Shares will be automatically converted into Series A Shares and the provisions established in this Clause will be applicable.
 
4

			
Provisional Certificate No.     	 	Represents      ordinary, nominative, Series “B”, Class I
shares, without expression of nominal value,
representative of the minimum fixed capital.	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

	 	CORPORATE DOMICILE:	 	Mexico City, Federal District.	  		
	 	TERM:	 	Indefinite.	  		
This Title is deposited in administration with S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., in terms and for the purposes of Article 282 of the Securities Market Law and represents      ordinary, nominative, Series “B”, Class I shares, without expression of nominal value, fully paid and subscribed, representative of the minimum fixed capital of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), of the total ordinary, nominative, Series “B”, Class I shares, without expression of nominal value, representative of the minimum fixed capital of the Company.
The Company was incorporated under the name “Controladora Vuela Compañía de Aviación, S.A. de C.V.”, by means of public deed No. 83.537, dated October 27, 2005, granted before Lic José Visoso del Valle, Notary Public number 92 of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number 342,507, on January 20, 2006.
By public deed number      dated     , 2013, granted before Lic     , Notary Public number      of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number     , on     ,     , it was resolved, among other things, to adopt the form of a Sociedad Anónima Bursátil de Capital Variable and, consequently, the amendment to the corporate name of the Company to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., and the amendment to the Company’s By-laws.
“ FIFTH. Nationality . The Company is of Mexican nationality. Any foreigner who at the time of incorporation or at any time thereafter acquires shares of the Company, agrees with the Ministry of Foreign Affairs to be treated as Mexican national with respect to (a) the shares or rights acquired of the Company and (b) the properties, rights, governmental concessions, participations or interests owned by the Company and (c) any rights and obligations derived from the agreements entered into by the Company; and it shall be understood that each foreigner agrees not to invoke the protection of his government, under penalty, in case of failure to comply with such agreement, of forfeiture of the acquired rights and assets in favor of the Mexican nation.” 
Mexico City, Federal District,      de 2013.

	 	 	  		  	 	  		
	 	[                    ]	  		  	[                    ]	  		
	 	Director	  		  	Director	  		
 
5

Main Rights and Obligations of the Shareholders
In accordance with the provisions of the Bylaws, the following is the full text of the Clause Eight of the Bylaws:
EIGHTH. Acquisition of Shares by the Company; Change of Control Provisions; Restrictions in the Transfer of Series B Shares.
(a) Acquisition of Shares by the Company. The Company may acquire shares representing its own capital stock or negotiable instruments or any other instruments that represent such shares without being subject to the prohibition established in the first paragraph of Article 134 (one hundred thirty four) of the Mexican General Corporations Law. The acquisition of its own shares shall take place in any national or foreign securities exchange or in any foreign market at market prices, except in case of public bids or auctions authorized by the National Banking and Securities Commission. The acquisition of its own shares shall be made against its net worth, in which case the Company may maintain the acquired shares with no need of reducing its capital stock, or, against its capital stock, in which case such shares shall become unsubscribed and be maintained in its treasury, with no need of an agreement by the General Shareholders Meeting.
The General Ordinary Shareholders Meeting shall expressly agree for each fiscal year, the maximum amount of resources that may be used for the acquisition of its own shares or negotiable instruments or other instruments representing them, with the only limitation being that the total resources for the corresponding acquisition may not exceed the sum of the total net profits of the Company, including the profits retained from previous years. In any event, the Company must be up to date in the payment of the obligations arising from debt instruments registered with the National Securities Registry. The Board of Directors shall appoint the responsible persons of the acquisition and placement of its own shares.
As long as the acquired shares belong to the Company, such shares may not be represented or voted in the General Shareholders Meetings, nor exercise any kind of corporate or economic rights with respect to such shares.
The acquisition and sale of shares under this Clause, the reports of the transactions about such transactions which shall be submitted to the General Ordinary Shareholders Meeting, the rules of financial information disclosure, as well as the manner and terms under which these transactions shall be reported to the National Banking and Securities Commission, the relevant stock exchange and the public investors, shall be subject to the provisions of the Mexican Securities Market Law and the general provisions issued by such Commission.
(b) Change of Control Provisions
(A) Defined Terms
For purposes of this paragraph of Clause Eighth, the following terms shall have the meanings ascribed to them:
“Shares” means any and all the shares representing the capital stock of the Company, of whatever class, series or name, or any security, instrument, right (detachable or not, represented or not by any instrument, or resulting from contractual provisions and not by any instrument) or instrument issued or created based on such shares, including ordinary participation certificates or depositary certificates in respect thereto, irrespective of their governing law or the market where they may be placed, executed or granted, or of its name, or that otherwise grants its holders rights to such shares or is convertible into or exchangeable for such shares, including financial instruments and operations known as derivative transactions, options, warrants or other similar or equivalent rights or instruments, or any complete or partial right in respect of or related to shares evidencing the capital stock of the Company, including in all cases within the definition, notwithstanding they may not be strictly considered as shares.
“Voting Arrangement” shall have the meaning ascribed to such term in this Clause Eighth.
“Affiliate” means (i) any company that Controls, is Controlled by, or is under common Control of any Person, and (ii) with respect to an individual, any of the parents, siblings, spouse, previous spouse, concubines, direct descendants, without limit of degree, the spouses and previous spouses of such descendants, as well as any trust or agreement or equivalent executed with the purpose to benefit such individuals.
“Competitor” means any Person involved, directly or indirectly, through any means and through any entity, vehicle or contract, in a preponderant or sporadic manner, in (i) the business of air transportation services of passengers, cargo, currier and/or mixed, and/or (ii) any activity in which the Company or any of its Subsidiaries is at any time involved, and which represents 5% (five percent) or more of the consolidated gross income of the Company and its Subsidiaries, provided that the Board of Directors may, on a case by case basis, agree to exempt any Person from falling into this definition, by passing resolutions pursuant to these By-laws.
“Consortium” means the group of entities, of any nature, form or denomination, irrespective of their denomination or jurisdiction of incorporation, connected amongst each other through one or more individuals that forming or not a Group of Persons, have Control over such entities, provided that, as part of the concept entity, a trust or similar contract shall be deemed included regardless of the applicable law under which such entities are incorporated or executed, and regardless of its denomination.
“Control”, “Controls” or “Controlled” means the ability of a Person or Group of Persons, whatever their nature or denomination (including a Consortium or Corporate Group) and irrespective of the jurisdiction of incorporation or existence, to carry out any of the following acts (i) impose, directly or indirectly, decisions in the general shareholders meetings or partners meetings or equivalent bodies, or to appoint or remove the majority of the directors or equivalent positions in the Company, (ii) maintain ownership of any class of Shares or rights derived from such Shares, that allow, directly or indirectly, the exercise of the voting right of more than 50% (fifty percent) of the capital stock of the Company, or (iii) direct, or in any other form determine, directly or indirectly, the management, the strategy or the principal policies of the Company, whether such ability results from holding securities or from a contractual arrangement or from any other means.
“Relevant Directors” means the Chief Executive Officer, as well as the individuals who by holding a position, post or commission in the Company or in the entities Controlled by the Company or Controlling such Company, make decisions that significantly transcend the administrative, financial, operational or legal position of the Company or the Corporate Group to which it belongs, without comprising within this definition the members of the Board of Directors or of the board of directors of the concerned Person.
“Corporate Group” means a group of entities, whatever their nature or denomination, irrespective of their jurisdiction of incorporation, organized under a scheme of direct or indirect equity participation, or otherwise, in which one entity Controls the other entities, provided that, as in the definition of entity, trusts or similar agreements shall be deemed included, regardless of the laws under which such trusts or similar arrangements are created or executed and regardless of their corporate name.
“Group of Persons” means the Persons, including Corporate Groups, that have entered into agreements, of any type, oral or written, apparent or implicit, pursuant to which they have agreed to make decisions in the same direction or to act jointly (even if not in the same direction). It shall be presumed, unless otherwise evidenced, that the following are “Groups of Persons”: (a) persons who are related by blood or law, up to the fourth degree, related by affinity up to the third degree, spouses and concubines; and (b) legal entities, whatever their nature and irrespective of their jurisdiction of incorporation, that belong to the same Consortium or Corporate Group and the Person or Group of Persons that has Control over such legal entities, provided that, in the definition of entity, trusts or similar agreements, regardless of their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“Significant Influence” means the ownership of rights which allow, directly or indirectly, by any means, including through a Consortium, Group of Persons or Corporate Group, the exercise of voting rights in respect of at least 20% (twenty percent) of the capital stock of a Person, provided that, in the definition of entity, trusts or similar agreements, regardless their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“20% Participation” means the ownership or title, of at least the 20% (twenty percent) or more of the shares, partnership interest or any other interest regardless of whether it is held individually or jointly, directly or indirectly through a legal entity, trust or similar figure, vehicle, enterprise, company, Consortium, Group of Persons or Corporate Group, or other form of economic or commercial association, of any nature and however denominated, having legal existence or not and irrespective of its jurisdiction of organization, with respect to any Person.
“Person” means any individual or legal entity, company, corporation, investment vehicle, trust or similar figure, vehicle, enterprise, or any other form of economic or commercial association or any of its Subsidiaries or Affiliates, of any nature and however denominated, having legal existence or not and irrespective of their jurisdiction of organization, or any Consortium, Group of Persons or Corporate Group, acting or attempting to act jointly, in concert or in coordination for purposes of this Clause.
“Related Parties” means the Persons that, with respect to a Person or the Company, fall into any of the following categories: (a) the Persons that Control or have Significant Influence or a 20% Participation in any legal entity that is part of the Corporate Group or Consortium to which the Company belongs, as well as the directors, managers, or Relevant Directors of the Persons comprising said Consortium or Corporate Group; (b) the Persons with the decision making power, of any nature, in respect of any Person that belongs to the Corporate Group or Consortium to which the relevant Person or the Company belongs; (c) the spouse or concubine and blood or civil relatives up to the fourth degree and relationship by affinity up to the third degree, of the individuals referred to in paragraphs (a) and (b) above, as well as the partners and co-owners of the persons mentioned in such paragraphs or those with whom they maintain business relationships; (d) the legal entities that belong to the same Corporate Group or Consortium as the respective Person or Company; (e) the legal entities Controlled by any of the Persons referred to in paragraphs (a) through (c) above, or in which such Persons have Significant Influence.
“Subsidiary” means any corporation in which a Person is the owner of the majority of the shares of its capital stock or in which a Person has the right to appoint the majority of the members of its board of directors (or equivalent body) or its manager.
(B) Authorization by the Board of Directors for the Acquisition of Securities.
Any and all acquisition or attempt of acquisition of Shares, of any kind, and whatever its form or denomination, that is intended to be performed by any means or title, whether it be through a single transaction or a succession of transactions, without any time limit between one and another, including for these purposes mergers, consolidations or other similar transactions, directly or indirectly, by one or more Persons, Related Parties, Groups of Persons, Corporate Groups or Consortiums, shall require, to be valid, the prior written authorization of the Board of Directors, every time that the number of Shares that is intended to be acquired, together with the Shares already held by the intended acquirer, directly or indirectly, results in a number equal or greater than any percentage of capital stock of 5 (five) or any multiple of 5 (five).
The prior approval by the Board of Directors shall be required regardless of whether the acquisition of the Shares is intended to be performed through a stock exchange, directly or indirectly, in one or more transactions of whatever legal nature, simultaneously or successively, without any time limit, in Mexico or abroad. The prior written approval by the Board of Directors will also be required, for the execution of any agreement of any kind, in oral or written form, regardless of its name, as a result of which voting mechanisms or arrangements, or agreements for associated voting or joint voting, regardless of whether it is in the same direction, that imply a change in the Control of the Company, a 20% Participation or a Significant Influence in the Company (each, a “Voting Arrangement” and jointly, the “Voting Arrangements”). For these purposes, any Person who severally or jointly with any other Person, any Related Party, Group of Persons, Corporate Group or Consortium seeks to carry out an acquisition (including mergers, consolidations or similar transactions), or enter into any Voting Arrangements, shall comply with the following: 1. The interested parties must submit a written request for authorization to the Board of Directors. Such request must be addressed and delivered through a notary public to the Chairman of the Board of Directors at the domicile of the Company with a copy delivered to the Secretary of the Board of Directors of the Company. The request shall contain the following: a. the number and class or series of the Shares which the respective Person and/or any Related Party, Group of Persons, Corporate Group or Consortium (i) owns or co-owns, whether directly or through any Person or Related Party, and/or (ii) in respect of which, they share or enjoy any right, whether it be pursuant to an agreement or otherwise, including any Voting Arrangement;
b. the number and class or series of Shares that are intended to be purchased, whether directly or indirectly, by any means or pursuant to a Voting Arrangement; c. the number and class or series of the Shares pursuant to which any right is intended to be shared, whether it is pursuant to a Voting Arrangement or otherwise; d. (i) the percentage that the Shares referred to in paragraph a. above represent the total issued Shares of the Company , (ii) the percentage that the Shares referred to in paragraph a. represent of the total number of Shares of the same class or series, (iii) the percentage that the Shares referred to in paragraphs b. and c. above, represent of the total Shares issued by the Company, and (iv) the percentage that the Shares referred to in paragraphs b. and c. above represent of the total number of Shares of the same class or series of Shares; e. the identity and nationality of the Person or Persons, Group of Persons, Corporate Group or Consortium that intends to purchase the Shares or execute the respective Voting Arrangement, provided that if any of them is a legal entity, investment company, trust or its equivalent, or any other vehicle, entity, company or form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, the identity and nationality of the partners or shareholders, settlors and trustees, members of the technical committee, successors, managers, members or associates, or its equivalents, shall be specified, as well as the identity and nationality of the Person or Persons that Control, directly or indirectly, the legal entity, investment company, trust, vehicle, entity, company or form of economic or commercial association, or equivalent, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, until the Person or individual who Controls or has any right, interest or final participation, of any nature, over the legal entity, trust or its equivalent, vehicle, entity, company or any form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, are identified; f. the reasons and objectives sought through the purchase of the Shares, subject of the requested authorization, or the execution of the relevant Voting Arrangement specifically mentioning if it intends to purchase, directly or indirectly, (i) any additional Shares to the ones referred to in the authorization request, (ii) a 20% Participation in the Company, (iii) the Control of the Company, or (iv) Significant Influence in the Company; g. if it is, directly or indirectly, a Competitor of the Company or of any Subsidiary or Affiliate of the Company and if it has the legal capacity to purchase the Shares or enter into the relevant Voting Arrangement, in accordance with the provisions of these By-laws and the applicable law; where appropriate, if it is in the process of obtaining any consent or authorization, indicate the person that will grant the consent or authorization, and the terms and time period within which it expects to obtain it; and if the Person or Persons that intend to purchase the relevant Shares have Related Parties that may be considered a Competitor of the Company or of any Subsidiary or Affiliate of the Company, or if it has any economic or business relationship with a Competitor or any interest or participation whether in the form of an equity participation in or in the management or operation of a Competitor, directly or by means of any Person or Related Party; h. the source of the funds to be used to pay the price for the acquisition of the Shares intended to be acquired; in the event that the source of the funds is a loan or other financing, the intended acquirer shall specify the identity and nationality of the Person providing such funding, the financial statements or other proof that evidences the solvency of such Person and shall deliver, as an attachment to the authorization request, the documentation evidencing and explaining the terms and conditions of such financing, including a commitment, signed by such Person, not subject to any material conditions, which shall include any collateral agreed upon to be provided. The Board of Directors may request that the intended acquirer (i) post a bond (fianza), (ii) create a security trust, (iii) provide an irrevocable letter of credit, (iv) make a deposit, or (v) provide any other security or guaranty approved by the Board of Directors, to secure up to 100% (one hundred percent) of the price of the Shares that are intended to be purchased or that are the subject of the relevant Voting Arrangement, designating the Company or the shareholders, through the Company, as the beneficiaries, and to secure the compensation for any damages and losses that the Company or its shareholders may suffer as a consequence of any misstatements of the information provided or as a consequence of the request or as a result of any action or omission of the applicant, directly or indirectly; i. if it has received funding in the form of a loan or in any other form, from a Related Party or Competitor or has provided funding to a Related Party or Competitor, to obtain the funds to pay the Shares intended to be acquired or to enter into the relevant Voting Arrangement; j. the identity and nationality of the financial institution to act as intermediary, in the event that the relevant acquisition is carried out through a tender offer; k. if applicable, because of the need of a public offering, a copy of the information memorandum or similar document that is intended to be used in connection with the purchase of the Shares or in connection with the transaction or agreement at issue, and a statement that the acquisition has been approved or submitted for approval by the competent authorities (including the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores); and l. an address in Mexico City, Mexico, to receive notices relating to its request. The Board of Directors may determine, in the event that certain information is impossible to produce at the time of submitting the request, that such information be omitted from the request and the Board of Directors may waive the requirement to comply with any of the above-mentioned requirements. 2. Within 8 (eight) business days following the date in which the request for authorization referred to in paragraph 1 above is received, the Chairman or Secretary of the Board of Directors shall call for a meeting of the Board of Directors to discuss and decide on the request for authorization. The call for the meeting of the Board of Directors shall be made in writing and sent by the Chairman or the Secretary to each of the Directors or alternate members of the Board Members with the anticipation provided for in these By-laws, by certified mail, courier, or e-mail, to the addresses designated by the members of the Board of Directors in writing for purposes of this Clause of the By-laws. The calls shall specify the date, time and place of the meeting and the relevant Agenda. 3. The Board of Directors shall resolve any request for authorization that is submitted pursuant to this Clause of the By-laws, within 90 (ninety) calendar days following, and counted from, the date in which the request was filed, provided that the request contains all the information that is required pursuant to this Clause. If the Board of Directors does not make a decision on the authorization within the 90 (ninety) calendar day period referred to above, the authorization request shall be deemed as denied. The Board of Directors may request that the person who intends to acquire the relevant shares or to execute the relevant Voting Arrangement, provide any additional documentation, and any clarifications it deems necessary, as well as to hold any meetings that the Board of Directors deems convenient, to decide on the requested authorization for the acquisition; provided that the terms set forth in this provision shall not begin running, and the request will not be considered completed, until the Person that intends to acquire the Shares or enter into the relevant Voting Arrangement, provides all additional information and clarifications that the Board of Directors deems necessary. 4. The attendance of at least 75% (seventy five percent) of the principal or alternate members of the Board of Directors will be required to consider a meeting called to resolve any matter related to the authorization of an acquisition or an agreement in terms of this Clause, to be validly installed in first or subsequent calls. The resolutions will be valid when made by 75% (seventy five percent) of the members of the Board of Directors. The meetings of the Board of Directors will be called for and the resolutions adopted therein shall relate solely to the request for authorization referred to in this Clause (or fragments of such request for authorization). 5. In the event that the Board of Directors authorizes the intended acquisition of Shares or the entering into of the Voting Arrangement, and such acquisition, transaction or agreement results in (i) the acquisition of a 20% Participation or greater, or (ii) a change in Control, or (iii) the acquisition of a Significant Influence with respect to the Company, notwithstanding if such authorization was granted, the intended acquirer or party entering into the Voting Arrangement shall have to make a public offering to acquire 100% (one hundred percent) of the outstanding Shares of the Company minus one Share, for a price, in cash, that is the higher of the following: a. the book value per Share, according to the last quarterly financial statements approved by the Board of Directors or filed before the National Banking and Securities Commission or any stock exchange; or b. the highest closing price per Share traded in the stock exchange, over the 365 (three hundred sixty five) calendar days prior to the date of the Board of Directors’ authorization or request; or c. the highest purchase price per Share paid at any time, by the Person that, severally or jointly, directly or indirectly, intends to acquire the Shares or to enter into a Voting Arrangement authorized by the Board of Directors, plus in each case, an additional premium equal to 30% (thirty percent) of the price per Share payable in connection with the acquisition whose authorization is requested, provided however, that the Board of Directors may increase or decrease the amount of any such premium, taking into account the opinion of a reputable investment bank. The public purchase offering referred to in this Clause must be completed within 90 (ninety) natural days from the date in which the acquisition or the execution of the Voting Arrangement is authorized by the Board of Directors, pursuant to the procedure set forth in this Clause. The price paid for each Share shall be the same, regardless of the class or series of such Share. In the event that on or before the relevant acquisition or execution of the Voting Arrangement, the Board of Directors receives another written request for authorization to purchase the relevant Shares (including through a merger, consolidation or similar transaction), with terms more favorable for the shareholders of the Company, then the Board of Directors shall be entitled to consider and, if appropriate, approve the second request and suspend the previously approved transaction, and it shall submit both bids to the consideration of the Board of Directors, provided that, any approval shall be granted without affecting the obligation to carry out a public tender offer pursuant to the terms of this Clause and applicable law. 6. Acquisitions of Shares or a Voting Arrangement that would not result in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company or (iii) the acquisition of Significant Influence with respect to the Company, may be recorded in the Shareholders Registry Book of the Company once they have been duly authorized by the Board of Directors and concluded. Acquisitions resulting in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company, or (iii) the acquisition of Significant Influence with respect to the Company, will not be recorded in the Shares Registry Book of the Company, until the public offer referred to in this Clause has been completed. Thus, the rights under the acquired Shares shall not be capable of being exercised until the relevant public offer has been completed. 7. The Board of Directors may deny its approval of the requested acquisition of Shares or the execution of the proposed Voting Arrangement, in which case it shall inform the proposed acquirer in writing the grounds and reasons for such denial, and it may likewise inform the acquirer of the terms and conditions pursuant to which it would be in a position to authorized the proposed acquisition of Shares or Voting Arrangement. The proposed acquirer will have the right to request and hold a meeting with the Board of Directors or an ad-hoc committee appointed by the Board of Directors, to explain, expand or clarify the terms of the request, as well as to present its position in a written document for the Board of Directors.
(C) General Provisions.
For purposes of this Clause, it shall be deemed that a Person is the owner of all Shares owned by such Person, as well as of all of the Shares (i) owned by any Related Party, or (ii) any legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that holds title when that legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, is Controlled by the mentioned Person. Furthermore, when one or more Persons are seeking to purchase Shares jointly, in a coordinated or concerted manner, through a single transaction or successive transactions, regardless of their legal form, it shall be deemed, for the purposes of this Clause, as a single Person who owns all such Shares. The Board of Directors may determine other cases in which one or more Persons that intend to acquire Shares or enter into Voting Arrangements shall be deemed as a single Person for purposes of this Clause. In making this determination, the Board of Directors may consider any legal or de facto information that is available. In order to evaluate any request for authorization submitted to the Board of Directors in terms of this Clause, the Board of Directors shall take into consideration any information that they deem appropriate, taking into consideration the best interests of the Company and its shareholders, including considerations as to the financial, market, business, moral and economic solvency of intended acquirer, the source of the funds to be used in the acquisition, potential conflicts of interest, protection of minority shareholders, the expected benefits for the future development of the Company, the impact in the Company’s plans and budgets on the quality, accuracy and veracity of the information submitted to it in terms of this Clause, the viability of the offer, the price offered, the conditions of the bid, the identity and credibility of the bidders (as far as may be determined and without any liability to the Board Members), the reasons for the execution and the temporality of the Voting Arrangement, the sources of funding, if any and time for completion, and any others that they deemed appropriate. Any acquisition of Shares or Voting Arrangement restricted by this Clause, entered into without the prior written authorization of the Board of Directors shall grant no rights to the holders of the Shares acquired or subject to any such Voting Arrangement and such holders shall not be able to vote any such Shares at any Shareholders’ Meeting of the Company, nor exercise any economic rights thereunder, which shall be the acquirer or group of acquirers’ sole responsibility. The Shares acquired pursuant to any such acquisitions or Voting Arrangements shall not be recorded in the Shareholders Registry Book of the Company, and any entries previously made shall be canceled and the Company will not recognize or give any value to the registration or listings referred to in Article 290 (two hundred ninety) of the Securities Exchange Act (Ley del Mercado de Valores), therefore the ownership of the Shares shall not be capable of being proved, and the right to attend any Shareholders Meeting shall not be capable of being credited, nor shall the holders of such Shares be able to exercise any action, including those of a procedural nature. The authorizations granted by the Board of Directors pursuant to this Clause will cease to be effective if the information and documentation on which such authorization was based is false or ceases to be true and/or legal. In the event that any transaction entered into is in violation of this Clause, the Board of Directors may agree upon the following measures amongst others: (i) the reversal of the transaction, with mutual restitution between the parties, when possible, or (ii) the transferring of the relevant Shares to an interested third party approved by the Board of Directors at the minimum price that the Board of Directors establishes. The provisions in this Clause will not be applicable to (a) the acquisitions or transfers of Shares made by succession, either by inheritance or legacy, or (b) the acquisition or transfer of Shares, or any other agreement or arrangement, (i) by the Person or Persons that collectively have the Control of the Company or Significant Influence in the Company as of the date in which this Clause is approved by the General Shareholders Meeting (that is, immediately before the initial public offering subscription of shares), (ii) by any legal entity, trust, vehicle, entity, company or any other form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that is under the Control of the Person or Persons referred to in subsection (i) above, (iii) by the estate of the Person or Persons referred to in subsection (i) above; (iv) by the ascendants or descendants in a direct line within the third degree of the Person or Persons referred to in subsection (i) above, (v) by the Person or Persons referred to in subsection (i) above, when purchasing the Shares from any company, trust, vehicle, entity, company, any form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, ascendants or descendants referred to in subsections (iii) and (iv) above, and (vi) by the Company or its Subsidiaries, or by trusts created by the Company or its Subsidiaries or by any other Person Controlled by the Company or by its Subsidiaries, or (c) the future transfer of Shares into a trust or similar entity by the existing shareholders of the Company on the date of the public offering of Shares in Mexico, made at any moment in the future. The provisions contained in this Clause shall be applicable in addition to the provisions of the statutes or laws and mandatory general provisions related to securities acquisitions that are effective in the market in which the Shares, or other securities related to these or rights arising thereof are listed; in case that any provision in this Clause contravenes, in whole or in part, any provision in such laws, the provisions of the relevant statute and mandatory general provisions related to securities acquisitions shall prevail. This Clause shall be filed for registration in the Public Registry of Commerce of the domicile of the Company and shall be expressly included in the share certificates representing the capital stock of the Company, in order to ascertain effect against third parties. This Clause may only be modified or deleted from the By-laws, through a favorable resolution of the shareholders with at least 90% (ninety percent) of the outstanding Shares at the moment of approval, elimination or relevant amendment, provided that no shareholders representing at least 5% (five percent) of the outstanding Shares of the Company at the time of the vote, vote against any such elimination or amendment.
(c) Restrictions on the Transfer of Series B Shares.
Series B Shares will only be transferable in transactions of any nature and any kind, including, for these purposes, mergers, consolidations or other similar transactions, directly or indirectly, to the shareholders holding Series B Shares or to an Affiliate of the shareholders holding Series B Shares precisely on the date of the initial public offering subscription of the Shares. In the event that any transfer of Series B Shares contravenes the preceding or is made to any third party, such Series B Shares will be automatically converted into Series A Shares and the provisions established in this Clause will be applicable.
 
6

			
Provisional Certificate No.     	 	Represents      ordinary, nominative, Series “B”, Class II
shares, without expression of nominal value,
representative of the variable capital.	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

	 	CORPORATE DOMICILE:	 	Mexico City, Federal District.	  		
	 	TERM:	 	Indefinite.	  		
This Title is deposited in administration with S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., in terms and for the purposes of Article 282 of the Securities Market Law and represents      ordinary, nominative, Series “B”, Class II shares, without expression of nominal value, fully paid and subscribed, representative of the variable capital of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), of the total ordinary, nominative, Series “B”, Class II shares, without expression of nominal value, representative of the variable capital of the Company.
The Company was incorporated under the name “Controladora Vuela Compañía de Aviación, S.A. de C.V.”, by means of public deed No. 83.537, dated October 27, 2005, granted before Lic José Visoso del Valle, Notary Public number 92 of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number 342,507, on January 20, 2006.
By public deed number      dated     , 2013, granted before Lic     , Notary Public number      of the Federal District, which first official transcript was registered with the Public Registry of Property and Commerce of the Federal District, under the commercial folio number     , on     ,     , it was resolved, among other things, to adopt the form of a Sociedad Anónima Bursátil de Capital Variable and, consequently, the amendment to the corporate name of the Company to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., and the amendment to the Company’s By-laws.
“ FIFTH. Nationality . The Company is of Mexican nationality. Any foreigner who at the time of incorporation or at any time thereafter acquires shares of the Company, agrees with the Ministry of Foreign Affairs to be treated as Mexican national with respect to (a) the shares or rights acquired of the Company and (b) the properties, rights, governmental concessions, participations or interests owned by the Company and (c) any rights and obligations derived from the agreements entered into by the Company; and it shall be understood that each foreigner agrees not to invoke the protection of his government, under penalty, in case of failure to comply with such agreement, of forfeiture of the acquired rights and assets in favor of the Mexican nation.” 
Mexico City, Federal District,      de 2013.

	 	 	  		  	 	  		
	 	[                    ]	  		  	[                    ]	  		
	 	Director	  		  	Director	  		
 
7

Main Rights and Obligations of the Shareholders
In accordance with the provisions of the Bylaws, the following is the full text of the Clause Eight of the Bylaws:
EIGHTH. Acquisition of Shares by the Company; Change of Control Provisions; Restrictions in the Transfer of Series B Shares.
(a) Acquisition of Shares by the Company. The Company may acquire shares representing its own capital stock or negotiable instruments or any other instruments that represent such shares without being subject to the prohibition established in the first paragraph of Article 134 (one hundred thirty four) of the Mexican General Corporations Law. The acquisition of its own shares shall take place in any national or foreign securities exchange or in any foreign market at market prices, except in case of public bids or auctions authorized by the National Banking and Securities Commission. The acquisition of its own shares shall be made against its net worth, in which case the Company may maintain the acquired shares with no need of reducing its capital stock, or, against its capital stock, in which case such shares shall become unsubscribed and be maintained in its treasury, with no need of an agreement by the General Shareholders Meeting.
The General Ordinary Shareholders Meeting shall expressly agree for each fiscal year, the maximum amount of resources that may be used for the acquisition of its own shares or negotiable instruments or other instruments representing them, with the only limitation being that the total resources for the corresponding acquisition may not exceed the sum of the total net profits of the Company, including the profits retained from previous years. In any event, the Company must be up to date in the payment of the obligations arising from debt instruments registered with the National Securities Registry. The Board of Directors shall appoint the responsible persons of the acquisition and placement of its own shares.
As long as the acquired shares belong to the Company, such shares may not be represented or voted in the General Shareholders Meetings, nor exercise any kind of corporate or economic rights with respect to such shares.
The acquisition and sale of shares under this Clause, the reports of the transactions about such transactions which shall be submitted to the General Ordinary Shareholders Meeting, the rules of financial information disclosure, as well as the manner and terms under which these transactions shall be reported to the National Banking and Securities Commission, the relevant stock exchange and the public investors, shall be subject to the provisions of the Mexican Securities Market Law and the general provisions issued by such Commission.
(b) Change of Control Provisions
(A) Defined Terms
For purposes of this paragraph of Clause Eighth, the following terms shall have the meanings ascribed to them:
“Shares” means any and all the shares representing the capital stock of the Company, of whatever class, series or name, or any security, instrument, right (detachable or not, represented or not by any instrument, or resulting from contractual provisions and not by any instrument) or instrument issued or created based on such shares, including ordinary participation certificates or depositary certificates in respect thereto, irrespective of their governing law or the market where they may be placed, executed or granted, or of its name, or that otherwise grants its holders rights to such shares or is convertible into or exchangeable for such shares, including financial instruments and operations known as derivative transactions, options, warrants or other similar or equivalent rights or instruments, or any complete or partial right in respect of or related to shares evidencing the capital stock of the Company, including in all cases within the definition, notwithstanding they may not be strictly considered as shares.
“Voting Arrangement” shall have the meaning ascribed to such term in this Clause Eighth.
“Affiliate” means (i) any company that Controls, is Controlled by, or is under common Control of any Person, and (ii) with respect to an individual, any of the parents, siblings, spouse, previous spouse, concubines, direct descendants, without limit of degree, the spouses and previous spouses of such descendants, as well as any trust or agreement or equivalent executed with the purpose to benefit such individuals.
“Competitor” means any Person involved, directly or indirectly, through any means and through any entity, vehicle or contract, in a preponderant or sporadic manner, in (i) the business of air transportation services of passengers, cargo, currier and/or mixed, and/or (ii) any activity in which the Company or any of its Subsidiaries is at any time involved, and which represents 5% (five percent) or more of the consolidated gross income of the Company and its Subsidiaries, provided that the Board of Directors may, on a case by case basis, agree to exempt any Person from falling into this definition, by passing resolutions pursuant to these By-laws.
“Consortium” means the group of entities, of any nature, form or denomination, irrespective of their denomination or jurisdiction of incorporation, connected amongst each other through one or more individuals that forming or not a Group of Persons, have Control over such entities, provided that, as part of the concept entity, a trust or similar contract shall be deemed included regardless of the applicable law under which such entities are incorporated or executed, and regardless of its denomination.
“Control”, “Controls” or “Controlled” means the ability of a Person or Group of Persons, whatever their nature or denomination (including a Consortium or Corporate Group) and irrespective of the jurisdiction of incorporation or existence, to carry out any of the following acts (i) impose, directly or indirectly, decisions in the general shareholders meetings or partners meetings or equivalent bodies, or to appoint or remove the majority of the directors or equivalent positions in the Company, (ii) maintain ownership of any class of Shares or rights derived from such Shares, that allow, directly or indirectly, the exercise of the voting right of more than 50% (fifty percent) of the capital stock of the Company, or (iii) direct, or in any other form determine, directly or indirectly, the management, the strategy or the principal policies of the Company, whether such ability results from holding securities or from a contractual arrangement or from any other means.
“Relevant Directors” means the Chief Executive Officer, as well as the individuals who by holding a position, post or commission in the Company or in the entities Controlled by the Company or Controlling such Company, make decisions that significantly transcend the administrative, financial, operational or legal position of the Company or the Corporate Group to which it belongs, without comprising within this definition the members of the Board of Directors or of the board of directors of the concerned Person.
“Corporate Group” means a group of entities, whatever their nature or denomination, irrespective of their jurisdiction of incorporation, organized under a scheme of direct or indirect equity participation, or otherwise, in which one entity Controls the other entities, provided that, as in the definition of entity, trusts or similar agreements shall be deemed included, regardless of the laws under which such trusts or similar arrangements are created or executed and regardless of their corporate name.
“Group of Persons” means the Persons, including Corporate Groups, that have entered into agreements, of any type, oral or written, apparent or implicit, pursuant to which they have agreed to make decisions in the same direction or to act jointly (even if not in the same direction). It shall be presumed, unless otherwise evidenced, that the following are “Groups of Persons”: (a) persons who are related by blood or law, up to the fourth degree, related by affinity up to the third degree, spouses and concubines; and (b) legal entities, whatever their nature and irrespective of their jurisdiction of incorporation, that belong to the same Consortium or Corporate Group and the Person or Group of Persons that has Control over such legal entities, provided that, in the definition of entity, trusts or similar agreements, regardless of their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“Significant Influence” means the ownership of rights which allow, directly or indirectly, by any means, including through a Consortium, Group of Persons or Corporate Group, the exercise of voting rights in respect of at least 20% (twenty percent) of the capital stock of a Person, provided that, in the definition of entity, trusts or similar agreements, regardless their denomination or the applicable law under which such were executed or incorporated, shall be deemed included.
“20% Participation” means the ownership or title, of at least the 20% (twenty percent) or more of the shares, partnership interest or any other interest regardless of whether it is held individually or jointly, directly or indirectly through a legal entity, trust or similar figure, vehicle, enterprise, company, Consortium, Group of Persons or Corporate Group, or other form of economic or commercial association, of any nature and however denominated, having legal existence or not and irrespective of its jurisdiction of organization, with respect to any Person.
“Person” means any individual or legal entity, company, corporation, investment vehicle, trust or similar figure, vehicle, enterprise, or any other form of economic or commercial association or any of its Subsidiaries or Affiliates, of any nature and however denominated, having legal existence or not and irrespective of their jurisdiction of organization, or any Consortium, Group of Persons or Corporate Group, acting or attempting to act jointly, in concert or in coordination for purposes of this Clause.
“Related Parties” means the Persons that, with respect to a Person or the Company, fall into any of the following categories: (a) the Persons that Control or have Significant Influence or a 20% Participation in any legal entity that is part of the Corporate Group or Consortium to which the Company belongs, as well as the directors, managers, or Relevant Directors of the Persons comprising said Consortium or Corporate Group; (b) the Persons with the decision making power, of any nature, in respect of any Person that belongs to the Corporate Group or Consortium to which the relevant Person or the Company belongs; (c) the spouse or concubine and blood or civil relatives up to the fourth degree and relationship by affinity up to the third degree, of the individuals referred to in paragraphs (a) and (b) above, as well as the partners and co-owners of the persons mentioned in such paragraphs or those with whom they maintain business relationships; (d) the legal entities that belong to the same Corporate Group or Consortium as the respective Person or Company; (e) the legal entities Controlled by any of the Persons referred to in paragraphs (a) through (c) above, or in which such Persons have Significant Influence.
“Subsidiary” means any corporation in which a Person is the owner of the majority of the shares of its capital stock or in which a Person has the right to appoint the majority of the members of its board of directors (or equivalent body) or its manager.
(B) Authorization by the Board of Directors for the Acquisition of Securities.
Any and all acquisition or attempt of acquisition of Shares, of any kind, and whatever its form or denomination, that is intended to be performed by any means or title, whether it be through a single transaction or a succession of transactions, without any time limit between one and another, including for these purposes mergers, consolidations or other similar transactions, directly or indirectly, by one or more Persons, Related Parties, Groups of Persons, Corporate Groups or Consortiums, shall require, to be valid, the prior written authorization of the Board of Directors, every time that the number of Shares that is intended to be acquired, together with the Shares already held by the intended acquirer, directly or indirectly, results in a number equal or greater than any percentage of capital stock of 5 (five) or any multiple of 5 (five).
The prior approval by the Board of Directors shall be required regardless of whether the acquisition of the Shares is intended to be performed through a stock exchange, directly or indirectly, in one or more transactions of whatever legal nature, simultaneously or successively, without any time limit, in Mexico or abroad. The prior written approval by the Board of Directors will also be required, for the execution of any agreement of any kind, in oral or written form, regardless of its name, as a result of which voting mechanisms or arrangements, or agreements for associated voting or joint voting, regardless of whether it is in the same direction, that imply a change in the Control of the Company, a 20% Participation or a Significant Influence in the Company (each, a “Voting Arrangement” and jointly, the “Voting Arrangements”). For these purposes, any Person who severally or jointly with any other Person, any Related Party, Group of Persons, Corporate Group or Consortium seeks to carry out an acquisition (including mergers, consolidations or similar transactions), or enter into any Voting Arrangements, shall comply with the following: 1. The interested parties must submit a written request for authorization to the Board of Directors. Such request must be addressed and delivered through a notary public to the Chairman of the Board of Directors at the domicile of the Company with a copy delivered to the Secretary of the Board of Directors of the Company. The request shall contain the following: a. the number and class or series of the Shares which the respective Person and/or any Related Party, Group of Persons, Corporate Group or Consortium (i) owns or co-owns, whether directly or through any Person or Related Party, and/or (ii) in respect of which, they share or enjoy any right, whether it be pursuant to an agreement or otherwise, including any Voting Arrangement;
b. the number and class or series of Shares that are intended to be purchased, whether directly or indirectly, by any means or pursuant to a Voting Arrangement; c. the number and class or series of the Shares pursuant to which any right is intended to be shared, whether it is pursuant to a Voting Arrangement or otherwise; d. (i) the percentage that the Shares referred to in paragraph a. above represent the total issued Shares of the Company , (ii) the percentage that the Shares referred to in paragraph a. represent of the total number of Shares of the same class or series, (iii) the percentage that the Shares referred to in paragraphs b. and c. above, represent of the total Shares issued by the Company, and (iv) the percentage that the Shares referred to in paragraphs b. and c. above represent of the total number of Shares of the same class or series of Shares; e. the identity and nationality of the Person or Persons, Group of Persons, Corporate Group or Consortium that intends to purchase the Shares or execute the respective Voting Arrangement, provided that if any of them is a legal entity, investment company, trust or its equivalent, or any other vehicle, entity, company or form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, the identity and nationality of the partners or shareholders, settlors and trustees, members of the technical committee, successors, managers, members or associates, or its equivalents, shall be specified, as well as the identity and nationality of the Person or Persons that Control, directly or indirectly, the legal entity, investment company, trust, vehicle, entity, company or form of economic or commercial association, or equivalent, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, until the Person or individual who Controls or has any right, interest or final participation, of any nature, over the legal entity, trust or its equivalent, vehicle, entity, company or any form of economic or commercial association, of any nature, having legal existence or not, and incorporated under the laws of any jurisdiction, are identified; f. the reasons and objectives sought through the purchase of the Shares, subject of the requested authorization, or the execution of the relevant Voting Arrangement specifically mentioning if it intends to purchase, directly or indirectly, (i) any additional Shares to the ones referred to in the authorization request, (ii) a 20% Participation in the Company, (iii) the Control of the Company, or (iv) Significant Influence in the Company; g. if it is, directly or indirectly, a Competitor of the Company or of any Subsidiary or Affiliate of the Company and if it has the legal capacity to purchase the Shares or enter into the relevant Voting Arrangement, in accordance with the provisions of these By-laws and the applicable law; where appropriate, if it is in the process of obtaining any consent or authorization, indicate the person that will grant the consent or authorization, and the terms and time period within which it expects to obtain it; and if the Person or Persons that intend to purchase the relevant Shares have Related Parties that may be considered a Competitor of the Company or of any Subsidiary or Affiliate of the Company, or if it has any economic or business relationship with a Competitor or any interest or participation whether in the form of an equity participation in or in the management or operation of a Competitor, directly or by means of any Person or Related Party; h. the source of the funds to be used to pay the price for the acquisition of the Shares intended to be acquired; in the event that the source of the funds is a loan or other financing, the intended acquirer shall specify the identity and nationality of the Person providing such funding, the financial statements or other proof that evidences the solvency of such Person and shall deliver, as an attachment to the authorization request, the documentation evidencing and explaining the terms and conditions of such financing, including a commitment, signed by such Person, not subject to any material conditions, which shall include any collateral agreed upon to be provided. The Board of Directors may request that the intended acquirer (i) post a bond (fianza), (ii) create a security trust, (iii) provide an irrevocable letter of credit, (iv) make a deposit, or (v) provide any other security or guaranty approved by the Board of Directors, to secure up to 100% (one hundred percent) of the price of the Shares that are intended to be purchased or that are the subject of the relevant Voting Arrangement, designating the Company or the shareholders, through the Company, as the beneficiaries, and to secure the compensation for any damages and losses that the Company or its shareholders may suffer as a consequence of any misstatements of the information provided or as a consequence of the request or as a result of any action or omission of the applicant, directly or indirectly; i. if it has received funding in the form of a loan or in any other form, from a Related Party or Competitor or has provided funding to a Related Party or Competitor, to obtain the funds to pay the Shares intended to be acquired or to enter into the relevant Voting Arrangement; j. the identity and nationality of the financial institution to act as intermediary, in the event that the relevant acquisition is carried out through a tender offer; k. if applicable, because of the need of a public offering, a copy of the information memorandum or similar document that is intended to be used in connection with the purchase of the Shares or in connection with the transaction or agreement at issue, and a statement that the acquisition has been approved or submitted for approval by the competent authorities (including the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores); and l. an address in Mexico City, Mexico, to receive notices relating to its request. The Board of Directors may determine, in the event that certain information is impossible to produce at the time of submitting the request, that such information be omitted from the request and the Board of Directors may waive the requirement to comply with any of the above-mentioned requirements. 2. Within 8 (eight) business days following the date in which the request for authorization referred to in paragraph 1 above is received, the Chairman or Secretary of the Board of Directors shall call for a meeting of the Board of Directors to discuss and decide on the request for authorization. The call for the meeting of the Board of Directors shall be made in writing and sent by the Chairman or the Secretary to each of the Directors or alternate members of the Board Members with the anticipation provided for in these By-laws, by certified mail, courier, or e-mail, to the addresses designated by the members of the Board of Directors in writing for purposes of this Clause of the By-laws. The calls shall specify the date, time and place of the meeting and the relevant Agenda. 3. The Board of Directors shall resolve any request for authorization that is submitted pursuant to this Clause of the By-laws, within 90 (ninety) calendar days following, and counted from, the date in which the request was filed, provided that the request contains all the information that is required pursuant to this Clause. If the Board of Directors does not make a decision on the authorization within the 90 (ninety) calendar day period referred to above, the authorization request shall be deemed as denied. The Board of Directors may request that the person who intends to acquire the relevant shares or to execute the relevant Voting Arrangement, provide any additional documentation, and any clarifications it deems necessary, as well as to hold any meetings that the Board of Directors deems convenient, to decide on the requested authorization for the acquisition; provided that the terms set forth in this provision shall not begin running, and the request will not be considered completed, until the Person that intends to acquire the Shares or enter into the relevant Voting Arrangement, provides all additional information and clarifications that the Board of Directors deems necessary. 4. The attendance of at least 75% (seventy five percent) of the principal or alternate members of the Board of Directors will be required to consider a meeting called to resolve any matter related to the authorization of an acquisition or an agreement in terms of this Clause, to be validly installed in first or subsequent calls. The resolutions will be valid when made by 75% (seventy five percent) of the members of the Board of Directors. The meetings of the Board of Directors will be called for and the resolutions adopted therein shall relate solely to the request for authorization referred to in this Clause (or fragments of such request for authorization). 5. In the event that the Board of Directors authorizes the intended acquisition of Shares or the entering into of the Voting Arrangement, and such acquisition, transaction or agreement results in (i) the acquisition of a 20% Participation or greater, or (ii) a change in Control, or (iii) the acquisition of a Significant Influence with respect to the Company, notwithstanding if such authorization was granted, the intended acquirer or party entering into the Voting Arrangement shall have to make a public offering to acquire 100% (one hundred percent) of the outstanding Shares of the Company minus one Share, for a price, in cash, that is the higher of the following: a. the book value per Share, according to the last quarterly financial statements approved by the Board of Directors or filed before the National Banking and Securities Commission or any stock exchange; or b. the highest closing price per Share traded in the stock exchange, over the 365 (three hundred sixty five) calendar days prior to the date of the Board of Directors’ authorization or request; or c. the highest purchase price per Share paid at any time, by the Person that, severally or jointly, directly or indirectly, intends to acquire the Shares or to enter into a Voting Arrangement authorized by the Board of Directors, plus in each case, an additional premium equal to 30% (thirty percent) of the price per Share payable in connection with the acquisition whose authorization is requested, provided however, that the Board of Directors may increase or decrease the amount of any such premium, taking into account the opinion of a reputable investment bank. The public purchase offering referred to in this Clause must be completed within 90 (ninety) natural days from the date in which the acquisition or the execution of the Voting Arrangement is authorized by the Board of Directors, pursuant to the procedure set forth in this Clause. The price paid for each Share shall be the same, regardless of the class or series of such Share. In the event that on or before the relevant acquisition or execution of the Voting Arrangement, the Board of Directors receives another written request for authorization to purchase the relevant Shares (including through a merger, consolidation or similar transaction), with terms more favorable for the shareholders of the Company, then the Board of Directors shall be entitled to consider and, if appropriate, approve the second request and suspend the previously approved transaction, and it shall submit both bids to the consideration of the Board of Directors, provided that, any approval shall be granted without affecting the obligation to carry out a public tender offer pursuant to the terms of this Clause and applicable law. 6. Acquisitions of Shares or a Voting Arrangement that would not result in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company or (iii) the acquisition of Significant Influence with respect to the Company, may be recorded in the Shareholders Registry Book of the Company once they have been duly authorized by the Board of Directors and concluded. Acquisitions resulting in (i) the acquisition of a 20% Participation or greater, (ii) a change in Control of the Company, or (iii) the acquisition of Significant Influence with respect to the Company, will not be recorded in the Shares Registry Book of the Company, until the public offer referred to in this Clause has been completed. Thus, the rights under the acquired Shares shall not be capable of being exercised until the relevant public offer has been completed. 7. The Board of Directors may deny its approval of the requested acquisition of Shares or the execution of the proposed Voting Arrangement, in which case it shall inform the proposed acquirer in writing the grounds and reasons for such denial, and it may likewise inform the acquirer of the terms and conditions pursuant to which it would be in a position to authorized the proposed acquisition of Shares or Voting Arrangement. The proposed acquirer will have the right to request and hold a meeting with the Board of Directors or an ad-hoc committee appointed by the Board of Directors, to explain, expand or clarify the terms of the request, as well as to present its position in a written document for the Board of Directors.
(C) General Provisions.
For purposes of this Clause, it shall be deemed that a Person is the owner of all Shares owned by such Person, as well as of all of the Shares (i) owned by any Related Party, or (ii) any legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that holds title when that legal entity, trust, vehicle, entity, company or economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, is Controlled by the mentioned Person. Furthermore, when one or more Persons are seeking to purchase Shares jointly, in a coordinated or concerted manner, through a single transaction or successive transactions, regardless of their legal form, it shall be deemed, for the purposes of this Clause, as a single Person who owns all such Shares. The Board of Directors may determine other cases in which one or more Persons that intend to acquire Shares or enter into Voting Arrangements shall be deemed as a single Person for purposes of this Clause. In making this determination, the Board of Directors may consider any legal or de facto information that is available. In order to evaluate any request for authorization submitted to the Board of Directors in terms of this Clause, the Board of Directors shall take into consideration any information that they deem appropriate, taking into consideration the best interests of the Company and its shareholders, including considerations as to the financial, market, business, moral and economic solvency of intended acquirer, the source of the funds to be used in the acquisition, potential conflicts of interest, protection of minority shareholders, the expected benefits for the future development of the Company, the impact in the Company’s plans and budgets on the quality, accuracy and veracity of the information submitted to it in terms of this Clause, the viability of the offer, the price offered, the conditions of the bid, the identity and credibility of the bidders (as far as may be determined and without any liability to the Board Members), the reasons for the execution and the temporality of the Voting Arrangement, the sources of funding, if any and time for completion, and any others that they deemed appropriate. Any acquisition of Shares or Voting Arrangement restricted by this Clause, entered into without the prior written authorization of the Board of Directors shall grant no rights to the holders of the Shares acquired or subject to any such Voting Arrangement and such holders shall not be able to vote any such Shares at any Shareholders’ Meeting of the Company, nor exercise any economic rights thereunder, which shall be the acquirer or group of acquirers’ sole responsibility. The Shares acquired pursuant to any such acquisitions or Voting Arrangements shall not be recorded in the Shareholders Registry Book of the Company, and any entries previously made shall be canceled and the Company will not recognize or give any value to the registration or listings referred to in Article 290 (two hundred ninety) of the Securities Exchange Act (Ley del Mercado de Valores), therefore the ownership of the Shares shall not be capable of being proved, and the right to attend any Shareholders Meeting shall not be capable of being credited, nor shall the holders of such Shares be able to exercise any action, including those of a procedural nature. The authorizations granted by the Board of Directors pursuant to this Clause will cease to be effective if the information and documentation on which such authorization was based is false or ceases to be true and/or legal. In the event that any transaction entered into is in violation of this Clause, the Board of Directors may agree upon the following measures amongst others: (i) the reversal of the transaction, with mutual restitution between the parties, when possible, or (ii) the transferring of the relevant Shares to an interested third party approved by the Board of Directors at the minimum price that the Board of Directors establishes. The provisions in this Clause will not be applicable to (a) the acquisitions or transfers of Shares made by succession, either by inheritance or legacy, or (b) the acquisition or transfer of Shares, or any other agreement or arrangement, (i) by the Person or Persons that collectively have the Control of the Company or Significant Influence in the Company as of the date in which this Clause is approved by the General Shareholders Meeting (that is, immediately before the initial public offering subscription of shares), (ii) by any legal entity, trust, vehicle, entity, company or any other form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, that is under the Control of the Person or Persons referred to in subsection (i) above, (iii) by the estate of the Person or Persons referred to in subsection (i) above; (iv) by the ascendants or descendants in a direct line within the third degree of the Person or Persons referred to in subsection (i) above, (v) by the Person or Persons referred to in subsection (i) above, when purchasing the Shares from any company, trust, vehicle, entity, company, any form of economic or commercial association, or its equivalent, of any nature and incorporated under the laws of any jurisdiction, ascendants or descendants referred to in subsections (iii) and (iv) above, and (vi) by the Company or its Subsidiaries, or by trusts created by the Company or its Subsidiaries or by any other Person Controlled by the Company or by its Subsidiaries, or (c) the future transfer of Shares into a trust or similar entity by the existing shareholders of the Company on the date of the public offering of Shares in Mexico, made at any moment in the future. The provisions contained in this Clause shall be applicable in addition to the provisions of the statutes or laws and mandatory general provisions related to securities acquisitions that are effective in the market in which the Shares, or other securities related to these or rights arising thereof are listed; in case that any provision in this Clause contravenes, in whole or in part, any provision in such laws, the provisions of the relevant statute and mandatory general provisions related to securities acquisitions shall prevail. This Clause shall be filed for registration in the Public Registry of Commerce of the domicile of the Company and shall be expressly included in the share certificates representing the capital stock of the Company, in order to ascertain effect against third parties. This Clause may only be modified or deleted from the By-laws, through a favorable resolution of the shareholders with at least 90% (ninety percent) of the outstanding Shares at the moment of approval, elimination or relevant amendment, provided that no shareholders representing at least 5% (five percent) of the outstanding Shares of the Company at the time of the vote, vote against any such elimination or amendment.
(c) Restrictions on the Transfer of Series B Shares.
Series B Shares will only be transferable in transactions of any nature and any kind, including, for these purposes, mergers, consolidations or other similar transactions, directly or indirectly, to the shareholders holding Series B Shares or to an Affiliate of the shareholders holding Series B Shares precisely on the date of the initial public offering subscription of the Shares. In the event that any transfer of Series B Shares contravenes the preceding or is made to any third party, such Series B Shares will be automatically converted into Series A Shares and the provisions established in this Clause will be applicable.
 
8

Exhibit 4.2
[Translation for information purposes only]
NACIONAL FINANCIERA, S.N.C.,
INSTITUCIÓN DE BANCA DE DESARROLLO,
DIRECCIÓN FIDUCIARIA
NON-REDEEMABLE ORDINARY PARTICIPATION CERTIFICATES
Listing Code:             
Represents:              Non-Redeemable Ordinary Participation Certificates
TOTAL AMOUNT OF THE ISSUANCE
$         (         MILLION PESOS         /100, LAWFUL CURRENCY OF THE UNITED MEXICAN STATES)
NOMINATIVE VALUE OF EACH NON-REDEEMABLE ORDINARY PARTICIPATION CERTIFICATES
$         (         PESOS         /100, LAWFUL CURRENCY OF THE UNITED MEXICAN STATES)
This title represents              (            ) non-redeemable ordinary participation certificates (“ CPOs ”) denominated “            ”, each of them with a nominal value of $         (             pesos 00/100 lawful currency of the United Mexican States), issued by Nacional Financiera, S.N.C., Institución de Banca de Desarrollo, Dirección Fiduciaria (the “ Trustee ”), as trustee of the Irrevocable Trust Agreement No.             , incorporated on             , (the “ Trust ”); the trust agreement pursuant to which the Trust was incorporated was authorized by the General Office of Foreign Investment ( Dirección General de Inversión Extranjera ), by means of the official communication number              dated             , 2013, in terms of the Foreign Investment Law and the Regulations of the Foreign Investment Law.
The abovementioned securities are issued exclusively for the purposes set forth in Articles 228 l and 228 m of the General Law of Negotiable Instruments and Credit Operations ( Ley General de Títulos y Valores ) and in accordance with the opinion referred to in Article 228 h of the General Law of Negotiable Instruments and Credit Operations.
Given that the CPOs will be non-redeemable, the Trustee shall not be required to pay the CPOs holders the nominal value thereof, in accordance with Article 228 k of the General Law of Negotiable Instruments and Credit Operations.
To make the issuance, prior authorization from the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ) was obtained in terms of Article 228 o of the General Law of Negotiable Instruments and Credit Operations, by means of the

official communication number              dated             , 2013. All the CPOs are registered with the National Securities Registry of the National Banking and Securities Commission, under number             .
The issue was granted by a unilateral declaration of intent of Nacional Financiera, S.N.C., Institución de Banca de Desarrollo, División Fiduciaria, by means of indenture formalized in public deed No.              dated              of 2013, granted before Lic             , head of the Notary Public No.              of Mexico City, Federal District, which first official transcript was registered with the Public Registry of Commerce of the Federal District on             ,              under commercial folio No.             .
This title is issued in accordance with the provisions of Article 282 of the Securities Market Law and for purposes of such provision and other applicable provisions of the Securities Market Law will remain on deposit in the S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V. (“ Indeval ”), and will not have coupons attached, the records issued by Indeval, for all legal purposes, being deemed as coupons. Holders of CPOs will demonstrate the ownership thereof and legitimize with the records issued in terms of Article 290 of the Securities Market Law. All payments, if any, required to be made to the holders of the CPOs will be made through the Indeval systems in its domicile located at Paseo de la Reforma 255, third floor, Colonia Cuauhtemoc, 06500, Federal District, Mexico.
The CPOs represent to their holders the rights set forth in Clauses Fourth, Fifth, Sixth, Seventh and Eighth of the Indenture.
Transcribed below are the main clauses of the Indenture:
“ FIRST . Issuance . The Issuer, by unilateral declaration of intent and in order to comply with the Purposes of the Trust and considering the instructions of the Technical Committee of the Trust, issues a total of                      (                    ) CPOs, with a nominal value of                      (                     pesos 00/100 M.N.) for each CPO and with a total nominal value of the Issuance of $         (             pesos 00/100 M.N.); such amounts are determined only for the purposes of Article 228 m (two hundred twenty eight paragraph m) of the LGTOC and initially places a total of                      (                    ) CPOs.
The Trustee may increase or decrease the number of outstanding CPOs under this CPO Deed (without the need to amend this CPO Deed), (1) to deliver CPOs derived from contributions, of Series A Shares that any person, as the Settlor by Adhesion or on behalf of a Settlor by Adhesion may carry out, to the Common Fund of this Issuance, including without limitation, Series A Shares contributed by Volaris or any third party, on behalf of Foreign Investors as a result of the conversion of outstanding Series B Shares of Volaris into Series A Shares, and / or (2) to deliver Series A Shares in the account of Indeval indicated by the Mexican Investors upon acquisition of CPOs by such Mexican Investors.
 
Page 2 of 10

The Trustee may increase the number of CPOs under this Issuance to recognize benefits or returns resulting from the CPOs or any other event affecting the Trust Shares under the terms of subparagraph a) of Article 228 a (two hundred twenty eight subparagraph a) of the LGTOC, as long as such benefits, returns or events have as a consequence an increase in Volaris’ shares in the Trust Estate which is the base of the Issuance and such increase is also based on the following assumptions:
ONE. An increase in the capital stock of Volaris by means of a capitalization of dividends or a payment of dividends with Series A Shares or any other similar event affecting Series A Shares.
TWO. An increase in the capital stock of Volaris subscribed by the Trustee and paid pursuant to the instructions of the Holders of CPOs and resulting from the exercise of the preemptive right provided by Article 132 (one hundred thirty two) of the General Corporations Law or from any other similar right.
In such cases, the Trustee shall follow the following procedure:
 
 	a)	An institution authorized under the LGTOC will prepare an opinion on the new Series A Shares which may be part of the Common Fund of the Issuance.	
 
 	b)	The Trustee, based on such opinion, shall request authorization from the CNBV, to increase the number of CPOs under the Issuance and if necessary, Volaris will request the CNBV to update the registration of the Shares and CPOs in the National Registry of Securities ( Registro Nacional de Valores , the “ RNV ”).	
 
 	c)	The Trustee, with the appearance of the CNBV and the Common Representative, by unilateral declaration of intent granted before a notary public, will amend only the First Clause of this Deed, to evidence the new number of CPOs to be issued, considering the increase resulting from the corresponding event, of the numerals ONE and TWO above-mentioned, without the need to hold a general meeting of CPO holders, since the rights of CPO holders will not be affected.	
 
 	d)	The Trustee will replace the global certificate or the certificates representing the CPOs with one or more new certificates reflecting the new number of CPOs issued. The previous certificate or certificates will be canceled and the new certificate or certificates will be deposited at the Indeval pursuant to Clause Fifth below.	
 
Page 3 of 10

 	e)	Each CPO issued will represent a Series A Share, subject to the terms and conditions set forth in Clause Fourth of this Deed.	
 
 	f)	The Common Representative will publish an updated notice of the number of CPOs to be issued.	
THREE. With respect to the increase of shares by means of any split or by means of any other similar event resulting from any corporate act, the Issuer will exchange the certificates previously deposited at Indeval for new certificates, which shall indicate the corresponding number of CPOs pursuant to the increase of the number of Series A Shares. In order to register the new number of CPOs, the previously issued number will be multiplied by the same multiple used for the Series A Shares, and notice to the CNBV shall be given. Notwithstanding the above, Volaris will have to request to the CNBV the update of the registration of the Series A Shares in the RNV for each of the above-mentioned cases.
To the extent necessary, the Issuer with the appearance of the CNBV and the Common Representative, by unilateral declaration of intent granted before a notary public, will amend this Clause of the CPO Deed only to certify the new number of CPOs issued, provided, that the opinion referred to in the immediately preceding subsection (a) will be required; for the amendment the consent of the holders of the CPOs will not be required since their rights will remain protected without suffering any impairment; provided , however , that if any clause of the Trust Agreement were to be amended, it shall be authorized by the meeting of the CPOs Holders.
SECOND . Common Fund . The Common Fund (the “ Common Fund ”) of this Issuance is formed with:
(a) The Series A Shares initially contributed to the estate Trust consisting of                      (                    ) Series A Shares which value was established in the report made in accordance with the terms of Article 228 h (two hundred twenty eight h) of the LGTOC.
(b) The rest of the Series A Shares received by the Trustee from other shareholders of Volaris or from third parties acting on behalf of the shareholders of Volaris (including Series B Shares converted into Series A Shares) for the exchange of such shares for CPOs issued by the Trustee in accordance with the terms and conditions agreed in the Trust Agreement.
The Trustee will integrate to the Common Fund of the Issuance, the Series A Shares which the Adhesion Settlors, or any other third party on their behalf, contribute at any time during the term of the Trust Agreement.
 
Page 4 of 10

(c) the Series A Shares subscribed by the Trustee in proportion to the number of Series A Shares held by the Trustee, as a result of a capital increase by new contributions resolved by the shareholders meetings of Volaris, as long as it timely receives the necessary funds from the holders of the CPOs.
(d) the Series A Shares received by the Trustee in proportion to the number of Shares Series A held by the Trustee, as a result of a capital increase through capitalization of capital premiums, profits and other equity items that can be legally capitalized, resolved by the shareholders meeting of Volaris.
(e) the Series A Shares received by the Issuer as a result of payment of dividends payable in Series A Shares.
(f) any and all Series A Shares received by the Trustee for any other reason.
FOURTH . Characteristics of the CPOs .
The CPOs will have the following characteristics:
 
 	a)	will be negotiable instruments and will contain a reference indicating that such instruments are non- redeemable ordinary participation certificates.	
 
 	b)	will be nominative;	
 
 	c)	will be non-redeemable;	
 
 	d)	for the purposes described under Article 228 m (two hundred twenty eight m) of LGTOC, will contain an indication of their nominal value;	
 
 	e)	pursuant to the terms of Article 228 k (two hundred twenty eight k) of LGTOC, the Trustee will not be obligated to pay to the holders the nominal value of the CPOs;	
 
 	f)	will not have any guaranteed fixed return;	
 
 	g)	will confer to their holders the rights indicated in Clauses Sixth and Seventh below;	
 
 	h)	will contain all other requirements and mentions set forth in Article two hundred twenty eight n (228 n) of LGTOC;	
 
 	i)	the Series A Shares underlying the CPOs will be registered in the RNV of the CNBV. The CPOs are intended to be acquired by Foreign Investors in accordance with	
 
Page 5 of 10

 	the provisions of the Foreign Investment Law and its Regulations ( Ley de Inversión Extranjera y su Reglamento ), in terms of the official communication No. DAJCNIE.315.12.769 dated November 6, 2012, supplemented by official communication number                      (                    ) dated                      two thousand thirteen issued by the Ministry of Economy referred to in the Recitals of this CPO Deed;	
 
 	j)	the CPOs will be issued based on the Common Fund of the Issuance at a ratio of one (1) ordinary, nominative, no par value, Series A Share representing the variable portion of the capital stock of Volaris in the Trust per one (1) CPO that the Trustee shall place, up to the amount specified in the first paragraph of Clause First of this CPO Deed.	
Under no circumstances will the Trustee be able to place a higher number of CPOs than the number of Volaris Series A Shares that are contributed in accordance with the Trust Agreement and which have become part of the Common Fund for this Issuance.
SIXTH . Rights of the Holders .
The Holders of the CPOs will have the following rights:
(a) A share of the dividends and any and other distribution of any nature corresponding to the Trust Shares which form part of the Common Fund of this Issuance, in accordance with and under the terms approved by the shareholders general meeting of Volaris.
(b) through the Trustee, to subscribe and pay the capital increases resolved by Volaris in the exercise of the applicable preemptive rights, as long as they are applicable and the necessary funds are provided to the Trust.
(c) Upon expiration or early termination of the Trust Agreement, as applicable, to receive from the Trustee the Series A Shares or the product resulting from the sale of Series A Shares corresponding to them pursuant to the provisions of Clause Sixteenth of the Trust Agreement.
(d) The Holders of CPOs may withdraw the underlying Series A Shares in the event that (i) the bylaws of Volaris allow such withdrawal, (ii) for any reason, the Holder is a Mexican Investor, or (iii) the Mexican Foreign Investment Law permits such withdrawal.
(e) Any other right resulting from the Trust Agreement, the applicable law or from the holding of CPOs.
 
Page 6 of 10

SEVENTH . Corporate Rights .
(A) Holders of CPOs will not have any voting rights with respect to the underlying Series A Shares, therefore the Trustee will grant a power of attorney to the person or persons indicated by the Technical Committee at least two (2) days before the date of the respective Volaris shareholders meeting, so that such legal representative or representatives may exercise the corresponding Series A Share rights, voting consistently in the same form in which most of the Series A Shares vote at such shareholders meeting, provided , however , that if the Trustee does not receive instructions from the Technical Committee, it will vote or cause to be voted such Trust Shares by the legal representatives it determines, in the same form in which the majority of the Series A Shares vote at such shareholders meeting.
(B) The Holders of CPOs, even if they are Foreign Investors, may instruct the Trustee in writing so that the Trustee exercises the applicable minority rights corresponding to the Trust Shares underlying the CPOs held by such Holders, in accordance with the applicable law and the by-laws of Volaris, providing the Trustee with the required funds to do so, provided, however , that such rights may be exercised directly by the Holders of CPOs, and therefore, the Trustee agrees to carry out the acts reasonably requested by the Holders of CPOs who will be responsible for any cost or expense derived from such acts.
With respect to the exercise of rights arising from or related to the Trust Shares which are subject to or related to a certain percentage of the capital stock of Volaris in accordance with the applicable law, the Trustee shall consider, for such purposes, the percentage representing the Trust Shares underlying the CPOs of the CPO holders who wish to exercise the corresponding rights with respect to the total outstanding shares of capital stock of Volaris.
The Trustee will not be responsible for how the Series A Shares are voted by the legal representatives or for the absence of such representatives at the general or special shareholders meetings of Volaris, as long as such representatives are appointed by the Technical Committee.
NINTH . Acceptance and Obligations of the Common Representative .
                     S.A., Institución de Banca Múltiple,                     , División Fiduciaria, through its representative, accepts its appointment as Common Representative of the Holders. The Common Representative agrees to have all rights and obligations derived from this deed, the Trust Agreement and the LGTOC, for which it has verified the existence of the Trust Estate and the authenticity of the report prepared by Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, and it authorizes with his signature, the CPOs issued in accordance with this CPO Deed in accordance with article 228 r (two hundred twenty eight r) of the LGTOC.
 
Page 7 of 10

The Common Representative of the Holders of this issuance shall have, in addition to those provided by applicable law, the following rights and obligations:
(a) to review, at any time, the status of the Common Fund of the Issuance;
(b) to verify the creation and terms of the Trust Agreement;
(c) to verify the existence of the Trust Shares;
(d) to authenticate with his signature the certificates representing the CPOs;
(e) to exercise the rights of the Holders of CPOs in connection with the payment of any dividend or distribution, of any nature, to which they are entitled;
(f) to request from Volaris, the holders of the CPOs and the Trustee any information reasonably necessary to comply with the obligations derived from its appointment;
(g) to ensure the proper compliance of the obligations contained in the Trust Agreement and in this CPO Deed;
(h) to call and chair the general meeting of the holders of CPOs;
(i) to preserve all notices and reports sent by the Trustee and to maintains available such information for the holders of the CPOs;
(j) to monitor the interests of the holders of the CPOs and their rights under this CPO Deed, the Trust Agreement and the applicable law;
(k) to carry out any action to protect the rights, actions or resources of the holders of the CPOs;
(l) to execute the resolutions taken at the general meetings of the holders of the CPOs.
In order for the Common Representative to exercise and comply with the rights and obligations resulting from its appointment, Volaris, the Holders of the CPOs and the Trustee shall provide to the Common Representative or to the people indicated by the Common Representative, the information reasonably required under applicable law, which will have the right to request; provided , however , that the Common Representative shall keep such information confidential, unless there is an obligation to disclose it under the terms of applicable law or by a court order or by express permission of the party that would have given the information.
 
Page 8 of 10

The holders of CPOs, by resolution taken at a general meeting of holders of the CPOs (subject to the provisions of the LGTOC) may revoke the appointment of the Common Representative and appoint a substitute Common Representative, provided , that , such revocation shall only have effects from the date on which a substitute common representative has been appointed, has accepted the position and has taken possession of it.
FOURTEENTH . Term . The term of the CPOs will be the same as the term of the Trust Agreement.
In case of termination of the Trust Agreement and therefore, extinction of the Trust, the Trustee will proceed in accordance with clause Sixteenth of the Trust Agreement.”
The foreign entities, foreign individuals, foreign economic units without legal personality, Mexican companies in which foreign capital holds a controlling interest and immigrants who are related to any foreign economic decision-making center, solely by reason of the acquisition and possession of the certificates referred to in this title, shall be deemed to agree with the Mexican Government before the Ministry of Foreign Affairs to be considered as nationals in respect to the certificates acquired and of which they are legitimate holders and agree, solely by reason of acquisition and possession, not to invoke the protection of their governments under penalty, otherwise, of losing the ownership of the certificates for the benefit of the Mexican Nation. They may not be holders of certificates issued by the Government or by Official Foreign Offices.
All payments required to be made to the holders of the certificates issued shall be made in the Indeval, located at Paseo de la Reforma 255, third floor, Colonia Cuauhtemoc, 06500, Federal District, Mexico, while such Institution is depository of the certificates.
This Title is issued for its deposit in Indeval, in terms of Articles 280, 282 and 283 of the Securities Market Law.
This title consists of ten (10) pages and is subscribed in Mexico, Federal District, the             , 2013.

ISSUER
 
NACIONAL FINANCIERA, S.N.C.,
INSTITUCIÓN DE BANCA DE DESARROLLO,
DIRECCIÓN FIDUCIARIA	
		
By:	 	 	
Name:	 	 	
Title:	 	Trust Delegate	
 
Page 9 of 10

COMMON REPRESENTATIVE
                    , S.A. INSTITUCIÓN DE BANCA MÚLTIPLE,                     
 
Page 10 of 10

Exhibit 4.3
[Translation for informational purposes only]
Irrevocable Trust Agreement Number                     , entered into by and among Controladora Vuela Compañía de Aviación, Sociedad Anónima Bursátil de Capital Variable (hereinafter referred to as “ Volaris ”), represented herein by Mr.                     , and Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Dirección Fiduciaria (hereinafter the “ Trustee ”), represented herein by its general trustee delegate, Mr. Juan Manuel Altamirano León, pursuant to the following Representations and Clauses:
REPRESENTATIONS
I. Volaris represents, through its representative, that:
 
 	a.	It is a variable capital investment promotion stock corporation ( sociedad anónima promotora de inversión de capital variable ), duly organized and validly existing under the laws of the United Mexican States (“ Mexico ”), as evidenced by public deed number                     , dated                     , granted before Mr.                     , notary public number                      of the Federal District, duly registered before the Public Registry of Property and Commerce of Mexico City, Federal District, under file number                     , on                     , which has been further amended from time to time.	
 
 	b.	On                      2013, its shareholders resolved by means of unanimous shareholders resolutions, among other matters, to enter into this Agreement in order for: (i) the Trustee to receive from Volaris Series A shares (as such term is defined below), representing its capital stock, which result from an approved increase in capital stock, as well as other Series A shares to be contributed directly by any of the current shareholders of Volaris, (ii) the Trustee to issue CPOs (as such term is defined below) that refer to, and whose underlying securities are, the Trust Shares (as defined below), (iii) the Series A Shares underlying the CPOs, to be registered in the National Securities Registry ( Registro Nacional de Valores ), as well as registered for their trading in the Mexican Stock Exchange ( Bolsa Mexicana de Valores, S.A.B. de C.V. , “ BMV ”), and (iv) the CPOs with Series A Shares as underlying securities issued by the Trustee, to also be registered before the Securities and Exchange Commission (“ SEC ”) of the United States of America as well as for quotation as ADSs (as such term is defined below) in the New York Stock Exchange (“ NYSE ”) or in the National Association of Securities Dealers Automated Quotation (“ NASDAQ ”) or in any securities market abroad;	

 	c.	It wishes to and has the authority to enter into this Agreement and bind itself under the terms hereof;	
 
 	d.	It has obtained all authorizations, which are effective as of the date hereof, from its competent corporate boards and from third parties, including the governmental authorizations necessary in accordance with the applicable legislation, to enter into the Agreement and be bound by the terms hereof;	
 
 	e.	Its legal representative has the necessary authority to enter into this Agreement and bind it pursuant to its terms, as evidenced by Public Deed number                     , dated                     , granted before Mr.                     , notary public number                      for Mexico City, Federal District, whose first original copy was registered before the Public Registry of Property and Commerce of the Federal District, under file number                     , dated                     , and whose authority has not been revoked, amended or limited in any manner whatsoever.	
II. The Trustee represents, through its general fiduciary delegate, that:
 
 	a.	It is a national credit corporation, development banking institution ( sociedad nacional de crédito, institución de banca de desarrollo ), duly incorporated and authorized to act as trustee in accordance with applicable law in Mexico and, in particular, in accordance with its Organic Law, first published on December 26, 1986 in the Diario Oficial de la Federación , and its Organic Regulations, to execute this Agreement and perform its obligations under the terms hereunder;	
 
 	b.	It wishes to act as trustee in accordance with this Agreement and in accordance with its Organic Law, Organic Regulations, the Financial Institutions Law ( Ley de Instituciones de Crédito ) and other applicable provisions, it has the legal capacity to do so;	
 
 	c.	Volaris requested and obtained from the Ministry of the Economy the authorization to enter into the Agreement and for the CPOs to be considered as, and to constitute, neutral investment under the terms and for purposes of Article 19 of the LIE (as such term is defined below), in accordance with the official communication No. DAJCNIE.315.12.769, dated November 12, 2012 and official communication No.                    , dated                     , 2013. Copies of the authorizations issued by such Ministry are attached hereto as Exhibit A ;	
 
 	d.	in accordance with the provisions of paragraph b., section XIX, Article 106 of the Financial Institutions Law, it has unequivocally informed Volaris of the content and legal scope of such provision, which is transcribed in Clause Nineteenth hereunder;	
 
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 	e.	Its general fiduciary delegate has sufficient authority to enter into the Agreement and bind it pursuant to its terms, as evidenced by Public Deed number 35,985, dated June 9 th , 2004, granted before Mr. Gabriel Benjamín Díaz Soto, Notary Public number 131 for Mexico City, Federal District, whose first original copy was registered before the Public Registry of Property and Commerce of the Federal District, under file number 1275, dated June 23 rd , 2004, whose authority has not been revoked, amended or limited in any manner whatsoever.	
Based on the above-mentioned Representations, the parties to this Agreement agree as follows:
CLAUSES
FIRST. Definitions . (a) The following terms will have the following meanings when the first letter is capitalized:
“ Shares ” means the shares, present or future, regardless of the corresponding Series, representing the capital stock of Volaris, irrespective of the represented Series.
“ Trust Shares ” means, jointly, the total amount of Series A Shares issued by Volaris from time to time or that are outstanding, and that are contributed to the Trust to form part of the Trust Estate, whether directly by Volaris, any shareholders of Volaris, or any third party on behalf of any shareholder of Volaris (including, without limitation, the Series A Shares contributed by Volaris or a third party on behalf of Foreign Investors as a result of the conversion of Series B Shares into Series A Shares), provided that the Series B Shares will not be Trust Shares for purposes of this Agreement.
“ Series A Shares ” means the outstanding Series A shares, present or future, representing the capital stock of Volaris.
“ Series B Shares ” means the outstanding Series B shares, present or future, representing the capital stock of Volaris.
“ CPO Trust Deed ” means any CPOs trust deed in accordance with the terms of this Agreement, executed by the Trustee in connection with the issuance of CPOs, in terms and for purposes of article 228 m of the LGTOC (as defined hereunder), as periodically amended, supplemented or modified.
“ ADSs ” means American Depositary Shares.
 
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“ Initial Contribution ” means the amount of $1.00 (One Peso, Mexican currency) that Volaris contributes to the Trust Estate, in accordance with Clause Fourth of this Agreement.
“ BMV ” has the meaning ascribed to such term in Representation I b.
“ CPOs ” means the non-redeemable participation certificates, based on the Trust Shares, issued and distributed by the Trustee, in accordance with this Agreement, and whose underlying value shall initially be one Trust Share for each ordinary participation certificate, or a different number of Trust Shares higher than one (1) as may be periodically resolved by the Technical Committee, pursuant to the terms of this Agreement (and as provided in Clause Ninth), and the non-redeemable participation certificates issued but not distributed by the Trustee until Trust Shares are contributed to the Trust Estate to form part of the Common Fund in terms of this Agreement, and whose underlying value shall initially be one Trust Share for each ordinary participation certificate or a different number of Trust Shares higher than (1) as may be periodically resolved by the Technical Committee, pursuant to the terms of this Agreement (including the provisions of Clause Ninth).
“ CNBV ” means the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ).
“ Technical Committee ” means the technical committee set up in accordance with Clause Thirteenth hereunder.
“ Adhesion Agreement ” means any agreement between the Trustee and any third party who intends to act as settlor after the date this Agreement is entered into.
“ Business Day ” means any day other than a Saturday, Sunday or a day in which banks or financial institutions in Mexico City, Federal District, Mexico, and/or in New York City, United States of America, must or are allowed to close to the public.
“ Trust ” means the irrevocable trust that is the subject matter hereof.
“ Settlors ” means jointly, Volaris and any Settlor by Adhesion.
“ Settlors by Adhesion ” means the individuals or corporate entities that in the future convey Series A Shares to the Trust as part of the Trust Estate.
“ Beneficiaries ” means, jointly, Volaris, the Settlors by Adhesion, if applicable, and the foreign individuals or corporate entities who hold CPOs, in accordance with Clause Third hereunder.
 
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“ Trustee ” shall have the meaning ascribed to such term in the preamble of this Agreement.
“ Purposes of the Trust ” has the meaning ascribed to such term in Clause Fifth of this Agreement.
“ Indeval ” means S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V.
“ Foreign Investors ” means the individuals or entities that are not of Mexican nationality, and Mexican entities which are classified as foreign investors under the terms of the LIE and its regulations.
“ Mexican Investors ” means Mexican individuals and Mexican entities which have a majority of Mexican capital and/or otherwise are classified as Mexican investors under the terms of the LIE and its regulations.
“ LGTOC ” means the General Law of Negotiable Instruments and Credit Transactions ( Ley General de Títulos y Operaciones de Crédito )
“ LIE ” means the Foreign Investment Law ( Ley de Inversión Extranjera ).
“ LMV ” means the Securities Market Law ( Ley del Mercado de Valores ).
“ NASDAQ ” shall have the meaning ascribed to such term in Representation I b.
“ NYSE ” shall have the meaning ascribed to such term in Representation I b.
“ Trust Estate ” shall have the meaning ascribed to such term in Clause Fourth of this Agreement.
“ Common Representative ” means                     .
“ SEC ” shall have the meaning ascribed to such term in Representation I b.
“ Holder ” means any holder of CPOs.
“ Volaris ” shall have the meaning ascribed to such term in the preamble of this Agreement.
(b) Unless expressly established otherwise, all references to the numbers or letters of Clauses, sections, paragraphs or sub-paragraphs refer to the Clauses, sections, paragraphs or sub-paragraphs hereof, and all references to Exhibits refer to the Exhibits attached hereto and incorporated herein by reference. The terms “herein”, “hereof”, “in accordance herewith”, “hereinafter” and
 
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words of similar meaning refer to the Agreement as a whole and not to any Clause, section, paragraph or sub-paragraph in particular. It shall be considered that the words “include”, “includes” and “including” shall be followed by the words “but not limited to”, unless agreed otherwise.
(c) If there is any discrepancy between the definitions established in paragraph (a) of Clause First and any other provision contained hereunder, the definition of the latter provision shall prevail.
(d) It shall be considered that any reference to any law or regulation includes the amendments thereto and any law or regulation that replaces it.
SECOND. Creation; Appointment and Acceptance; Additional Contributions . 
(a) In order to comply with and carry out the Purposes of the Trust, Volaris hereby irrevocably contributes the Initial Contribution to the Trust and transfers it to the Trustee.
(b) The Trustee hereby (i) accepts its appointment as trustee of the Trust and undertakes to faithfully fulfill the Purposes of the Trust and all other obligations assumed by the Trustee, under the terms hereof; and (ii) acknowledges and accepts the ownership of the Trust Estate and agrees to maintain the same in order to fulfill the Purposes of the Trust.
(c) The Trust Estate shall consist of, and may be increased in accordance with, the provisions of Clause Fourth and other applicable clauses of this Agreement, provided that when any Series A Shares are contributed to the Trust Estate, each Settlor that transfers the Series A Shares or each Settlor on whose behalf the Series A Shares are transferred, (A)(i) will endorse in favor of the Trustee, as trustee of the Trust, or will cause the delivery to the Trustee of the Series A Shares certificates or provisional certificates of the shares contributed to the Trust, evidencing the Trustee as owner of such shares, (ii) shall deliver the Series A Shares certificates or the provisional certificates endorsed, if applicable, to the Trustee, and (iii) shall provide the Trustee with a certification issued by the Secretary of the Board of Directors of Volaris certifying that the Trust Shares transferred to the Trustee have been duly and validly registered in the shares registry book of Volaris or (B) shall transfer the Trust Shares through transfers in accounts of Indeval participants to the Trustee’s account (or the participant indicated by the Trustee).
(d) The Trustee shall not be liable for the validity or authenticity of the contributed Series A Shares.
 
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THIRD. Parties . 
The following persons are parties hereof:

Settlor:	  	Volaris, in connection with the Series A Shares periodically contributed to the Trust and that will be identified in the form agreed by the Trustee, in the corresponding date of contribution.	
		
Settlors by Adhesion:	  	The Mexican or foreign individuals or entities, acting on their own behalf, provided that in case of foreign individuals or entities, such persons may become Settlors by Adhesion when acting through any third party, that, after the creation of this Trust, by means of the execution of an Adhesion Agreement, irrevocably transfer, or instruct to transfer to the Trust, the Series A Shares they own or in respect of which they have Trustee rights, as trustee, in accordance with the Trust.	
		
Trustee:	  	Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Dirección Fiduciaria.	
		
Beneficiaries:	  	Volaris, in respect to the rights contained hereunder;
 
the Settlors by Adhesion, in respect to the right to receive (1) one CPO per Trust Share, or by the higher and different number of Series A Shares approved by the Technical Committee in terms hereof (including the provisions of Clause Ninth), once the Trustee, as holder, has received the Series A Shares contributed by the Settlors by Adhesion, or contributed on behalf of any Settlor by Adhesion, as well as to exercise their corresponding rights on such CPOs, in accordance herewith; and
 
the Foreign Investors that are Holders of CPOs in accordance with Clause Tenth below, in connection to rights that correspond to them in accordance with this Agreement and the corresponding CPO Trust Deed.	
 
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FOURTH. Trust Estate . 
The estate of the Trust (the “ Trust Estate ”) shall consist of:
(a) the Initial Contribution hereby contributed by Volaris to the Trust;
(b) the Series A Shares that periodically contributed to the Trustee by any Settlor, including any Settlor by Adhesion, or by any third party on behalf of any Settlor, or by Volaris, in order to constitute the Trust Estate, including, but not limited to, the Series A Shares contributed by Volaris or by a Settlor by Adhesion, for itself or through any third party, as a result of the conversion of Series B Shares into Series A Shares;
(c) the Series A Shares received by the Trustee as a result of the payment of dividends on Series A Shares resolved by Volaris, for the capitalization of premiums, profits withheld, reserves or any other compoundable items or the restatement of capital stock, or for any other reason;
(d) the Series A Shares issued by Volaris to increase its capital stock, and that the Trustee, as holder of the Trust Shares, subscribes and pays with the funds contributed by the Holders according to this Agreement;
(e) the Series A Shares received by the Trustee, as holder of the Trust Shares, as a result of any merger, spin-off, restructuring, sub-division or any other similar corporate action agreed or carried out by Volaris or affecting Volaris;
(f) the sums in cash received by the Trustee, including such amounts received from payment of dividends, reductions of capital stock of Volaris, redemption of the Trust Shares and/or any similar circumstance, after being distributed among the Holders in accordance with the provisions set forth hereunder and any related documentation; and
(g) any other asset or right contributed and transferred in the future to the Trustee, as trustee according to this agreement, provided that, in no event, the Trustee shall hold securities other than Series A Shares issued by Volaris or any successor or thereof;
 
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FIFTH. Purposes of the Trust .
The purposes of this Trust (the “ Purposes of the Trust ”) are the following:
(a) the acquisition of the Trust Estate by the Trustee, the administration of the Trust Estate as agreed hereunder and for the term of this Agreement, and the maintenance under its custody of all the Trust Shares, either by keeping them directly or by depositing them in any securities deposit institutions;
(b) the establishment of a mechanism, with the nature of neutral investment, and the execution of the necessary agreements, to place the CPOs, in an issuance and as required periodically, either directly or represented by ADSs or other securities, either primarily and/or secondarily, through the BMV, NYSE, NASDAQ and/or any other stock market in Mexico or abroad, to various investors, in any case, through public or private offerings, provided that the CPOs placed through the BMV may only be acquired by Foreign Investors, and not by Mexican Investors, who will automatically acquire Series A Shares;
(c) the subscription of the Series A Shares issued and placed by Volaris, in order to ensure their placement, among Foreign Investors, through CPOs, in accordance with applicable legislation, this Agreement and the instructions from Volaris, through their contribution to this Trust and, if applicable, the delivery to Volaris of the proceeds derived from the placement of such Series A Shares, through CPOs or ADSs, provided that the CPOs placed through the BMV, may only be acquired by Foreign Investors, and not by Mexican Investors, who will automatically acquire Series A Shares;
(d) the acquisition by the Trustee of the Series A Shares resulting or issued as a result of (i) increases in capital stock derived from capitalization of reserves or profits or restructurings of Series A Shares, (ii) if applicable, mergers or spin-offs, transformations or corporate restructurings of any kind, or in which Volaris participates or affecting Volaris and having the nature of Series A Shares, or (iii) contributions of Series A Shares that any person, as Settlor or Settlor by Adhesion or on behalf of any Settlor by Adhesion, transfers to this Trust, including, without limitation, the Series A Shares contributed by Volaris or by any third party, on behalf of Foreign Investors as a result of the conversion of Series B Shares into Series A Shares;
(e) the subscription and payment by the Trustee of increases of capital stock resolved by Volaris, in accordance with the provisions set forth in Clause Twelfth below, provided that the Trustee receives, in a timely manner, the necessary and sufficient funds from the Holders who wish to subscribe and pay-in such CPOs that refer to the underlying Series A Shares issued by Volaris to represent the corresponding capital stock increase, the custody by the Trustee of the Shares resulting from such increase in capital as Trust Shares, and the issuance of additional CPOs representing such Trust Shares, in favor of the Foreign Investors who subscribe and pay-in the relevant capital stock increase, provided that in the event of any increases in
 
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the capital stock carried out through the BMV by holders of securities, the Mexican Investors may only acquire Series A Shares and not CPOs, and will do so automatically;
(f) the issuance and payment by the Trustee of CPOs referred to, and having as underlying shares, the Trust Shares, through ADSs or for the benefit of Foreign Investors, provided that, the Trustee will issue and deliver to such Foreign Investors one (1) CPO per Trust Share, so that the pro rata part of the Trust Estate corresponding to each CPO and, as a consequence, to the Holders, Foreign Investors or through ADSs, shall be composed of one (1) Series A Share or for the different and higher number of Series A Shares indicated by the Technical Committee pursuant to the terms of this Agreement (and as provided in Clause Ninth), provided , however , that such quota may be amended through recapitalizations, reinvestment of distributed profits, restructurings, conversions, decreases in capital stock, redemption of Series A Shares, or by mergers or spin-offs in which Volaris participates, in accordance with the applicable legislation, or by any other action or fact affecting the Series A Shares or in the manner determined by the Technical Committee;
(g) the issuance, without allocation, of CPOs by the Trustee, in order to place and deliver such CPOs to those Settlors contributing Series A Shares for such purposes, and whose underlying shares are the Trust Shares, provided that the Trustee will issue, place and deliver one (1) CPO for each Trust Share or the different and higher number of Series A Shares indicated by the Technical Committee pursuant to the terms of this Agreement (and as provided in Clause Ninth), therefore, the quota of the Trust Estate corresponding to each CPO and, as a consequence, to the Holders, shall be composed of one (1) Series A Share or the different and higher number of Series A Shares indicated by Technical Committee pursuant to the terms of this Agreement (and as provided in Clause Ninth) and that such CPOs, if placed through the BMV, shall only be delivered to Foreign Investors, provided , accordingly , that such quota may be amended through recapitalizations, reinvestment of distributed profits, restructurings, conversions, decreases in capital stock, redemption of Series A Shares, or by mergers or spin-offs in which Volaris participates, in accordance with the applicable legislation, or by any other action or fact affecting the Series A Shares or in the manner determined by the Technical Committee;
(h) the exercise by the Trustee of the voting rights corresponding to the Trust Shares underlying the CPOs and placed among Foreign Investors or through ADSs in the corresponding general and special shareholders meetings of Volaris in the same form as the holders of the majority of Series A Shares vote; in every case, the Trustee shall exercise the voting rights corresponding to the Trust Shares through the respective representatives as set forth in Clause Eleventh and other applicable Clauses of this Agreement;
 
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(i) the exercise by the Trustee of the minority rights (including any actions) referred to in Clause Eleventh, paragraphs (b) and (c) as instructed by the corresponding Holders of the CPOs;
(j) the collection and distribution among the Holders by the Trustee, pursuant to their respective participation in the Trust Estate, of the dividends or any other distribution that, in each case, corresponds to the Trust Shares underlying the CPOs, and in general, the exercise by the Trustee of the estate rights derived or resulting from the Trust Estate;
(k) the increase or decrease by the Trustee of the number of outstanding CPOs issued by means of this Trust and under the CPO Trust Deed, in accordance with the instructions of the Technical Committee, in order to recognize splits, reverse splits, conversion of Shares, splits or reductions, restructuring of Shares, mergers or spin-offs or any other similar corporate act carried out by Volaris or in which Volaris participates;
(l) the increase or decrease by the Trustee of the number of outstanding CPOs issued by means of this Trust and under CPO Trust Deed, (i) in order to deliver CPOs derived from the contribution of Series A Shares that any person, as Settlor by Adhesion or on behalf of a Settlor by Adhesion, gives to the Trust Estate, including, without limitation, the Series A Shares contributed by Volaris or by any third party on behalf of Foreign Investors as a consequence of the conversion of Series B Shares into Series A Shares, on behalf of Foreign Investors or in connection with ADSs, and/or (ii) in order to deliver Series A Shares in the Indeval account indicated, or that benefit, the Mexican Investors, in the event that such Mexican Investors acquired CPOs;
(m) if applicable, the temporary acquisition by the Trustee with the contribution of the necessary funds by Volaris (or once Volaris has made the corresponding direct payment), of the CPOs issued, subject to the provisions of the LMV, the corporate by-laws of Volaris and the applicable general provisions issued by the CNBV, if applicable, and pursuant to the instructions from the Technical Committee, provided that Volaris may directly acquire the Series A Shares underlying the CPOs;
(n) the withdrawal by the Trustee of the CPOs representing Series A Shares cancelled by Volaris as a consequence of the repurchase of the CPOs or the underlying Series A Shares, in accordance with what the LMV, the corporate by-laws of Volaris and the general provisions issued by the CNBV permit;
(o) the withdrawal by the Trustee of the corresponding CPOs, as provided in Clause Ninth below, in the event of repurchase or
 
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amortization of the Trust Shares underlying such CPOs by Volaris, or in the event of reduction of Volaris’ capital stock by refund or in any other similar corporate action carried out by Volaris;
(p) the carrying out of any proceeding or process and the execution of all types of documents or instruments, and the submission of any filing with public or private institutions, Mexican or foreign, including the CNBV, the SEC, the General Foreign Investment Department (and any other applicable departments or areas of the Ministry of the Economy), the Ministry of Communications and Transports, the Mexican Central Bank, the BMV, the NYSE, the NASDAQ, and other securities markets or securities quotation systems in Mexico, and any other Mexican or foreign authority or institution, in order to fulfill the Purposes of the Trust, through the attorney-in-fact appointed by the Technical Committee, and in accordance with the instructions issued by the Technical Committee for such purposes;
(q) the execution by the Trustee of any document, agreement, instrument or certification and the carrying out of the suitable or necessary acts to fulfill the Purposes of the Trust, provided that, except for certifications, the Trustee shall, in all cases, have written instructions from the Technical Committee;
(r) the withdrawal and cancellation of the CPOs by the Trustee upon termination of the term hereof and in accordance with Clause Sixteenth, and the return of the Trust Shares underlying the CPOs to the holders of the CPOs or to whomever has the right thereupon (including third parties designated by the CPOs holders), or the sale proceeds of such Trust Shares underlying the CPOs, in accordance with the procedure set forth in Clause Sixteenth hereof, or the execution of any other necessary or suitable act to terminate the term of this Agreement;
(s) the execution by the Trustee of any CPO Trust Deed or any amendment to the CPO Trust Deed that might be necessary, as instructed by the Technical Committee, and the subscription of the CPOs issued thereunder and the deposit of such CPOs with Indeval;
(t) the request and obtaining by the Trustee, through the attorney-in-fact appointed by the Technical Committee, or by the majority of the Holders for the exercise of their corresponding rights, in accordance with this Agreement or the applicable legislation, of any and all authorizations, subscriptions, records, judicial, governmental, or third party notes, of any nature, that are necessary or suitable to carry out the Purposes of this Agreement;
(u) the execution by the Trustee of any and all agreements and the carrying out of all acts as may be instructed or requested to do, in writing, by the Technical Committee pursuant to this Agreement, including the execution of any necessary Adhesion Agreement, and the
 
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recognition of third parties, as the case may be, as Settlors by Adhesion, issuing and delivering the corresponding CPOs, considering the Trust’s Series A Shares; and
(v) in general, the performance by the Trustee of all necessary acts, of any nature and irrespective of how they are referred to, in accordance with the applicable laws in any jurisdiction, in order to comply with the Purposes of the Trust.
SIXTH. Authority and Obligations of the Trustee .
(a) The Trustee shall have the sufficient authority to carry out and fulfill the Purposes of the Trust, including, but not limited to, the authority provided by the LGTOC. Specifically, the Trustee shall have the authority to grant powers of attorney to such individuals specified by the Technical Committee or, as the case may be, to Holders of CPOs, in accordance with the terms of this Agreement, including Clause Eleventh below, or the applicable legislation, which shall include, without limitation, carrying out the acts and entering into the agreements or instruments necessary to fulfill the Purposes of this Agreement, such as the participation in the shareholder meetings of Volaris.
(b) In the event that a suit or litigation arises, or that a legal proceeding or action is initiated related to Trust Shares and/or any other asset or right that is part of the Trust Estate, the Trustee shall (i) immediately notify the Technical Committee and Volaris in writing, and in any case within five (5) Business Days following the date in which the Trustee received the respective notice or in which it learned of the matter at issue by any other means, and (ii) grant the necessary authority to the person or persons as instructed in writing by the Technical Committee, or by the majority of Holders, if they had the right, to exercise their corresponding rights, and subject to the terms and conditions that may be determined, in each case, in order to defend and preserve the Trust Estate.
(c) Under no circumstances will the Trustee be liable for the acts carried out by the attorneys-in-fact in the exercise of their powers of attorney; however, it will be liable for its own willful misconduct, bad faith or negligence in the granting of such powers of attorney, or in the event such powers of attorney are not granted in a timely manner in urgent situations.
(d) In accordance with the provisions set forth in Section 5.2 of Circular 1/2005 issued by the Mexican Central Bank ( Banco de México ), the Trustee shall be liable for damages and lost profits caused by the breach of its obligations under this Agreement.
(e) In no case shall the Trustee hold in the Trust Estate more than ninety percent (90%) of the total amount of Shares, unless
 
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otherwise expressly authorized by the General Foreign Investment Department of the Ministry of the Economy or any other competent authority or governmental entity thereto in the future.
SEVENTH. Issuance and Public Offering of CPOs .
(a) Having obtained the relevant authorization and once the transfer and contribution of Series A Shares to the Trustee has been performed in accordance with this Agreement, the Trustee shall issue the CPOs pursuant to the relevant CPO Trust Deed, for its placement among Foreign Investors, including through ADSs, provided that, initially, the Trustee shall issue one (1) CPO per each Trust Share, with the ability to change such relation in the future, at the discretion of the Technical Committee, in accordance with this Agreement, including Clause Ninth below.
(b) The Series A Shares must be registered in the National Securities Registry and in the list of securities authorized to be quoted in the BMV, and/or the CPOs, and, if applicable, the ADSs before any authority or any other securities market that is necessary, if applicable, for the offering, placement and/or quotation of CPOs, directly or through ADSs or other securities, in foreign stock markets, including the SEC, the NYSE and the NASDAQ.
(c) Volaris shall, if applicable and/or with the participation of intermediaries or other authorized institutions and brokers, carry out the placement of CPOs, through ADSs, issued by the Trustee in connection with the Trust Shares, among Foreign Investors on the NYSE, in the NASDAQ, or in other foreign stock exchanges. The Trustee shall, through Indeval, transfer the CPOs issued in connection with the Trust Shares to the individuals or corporate entities that as Foreign Investors have acquired them upon their placement to the account(s) of the broker(s) that the Technical Committee specifies in writing, and it shall receive, or ensure that Volaris receives, the funds resulting from such placement, which shall be used to pay the subscription price of any Series A Shares subscribed. In the event of a secondary offer, it shall deliver or ensure delivery of the proceeds of the placement to the relevant Settlors who have conveyed the Trust Shares or that have been conveyed on their account. If it is agreed with Volaris, in the event that not all the CPOs issued in connection with the Series A Shares are placed, the Trustee shall withdraw from circulation any CPOs not placed and return to Volaris the respective certificates that cover the Trust Shares that have been subscribed but not paid-in, leaving such subscription without effects.
(d) Volaris shall have the sole and exclusive right to receive from the Trustee, or from a third party who has agreed with the Trustee, the proceeds derived from any placement through a primary offering carried out through the issuance of CPOs or through ADSs to Foreign Investors, with the prior contribution of Series A Shares
 
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issued for such purposes or repurchased by Volaris and contributed to this Trust under the terms of applicable legislation. In the same manner, Volaris shall be entitled to receive the CPOs repurchased by the Trustee with the funds provided by Volaris, or which Volaris directly reacquires (including as Series A Shares). Similarly, the Settlors by Adhesion that contribute Series A Shares so that they may be placed among the investing public shall be entitled to receive from the Trustee, if received by the Trustee, the proceeds of any placement made through the issuance of CPOs.
EIGHTH. Characteristics of the CPOs .
(a) The CPOs issued by the Trustee to fulfill the Purposes of the Trust may be represented by one (1) or more certificates that cover one (1) or more CPOs, which shall be kept at all times in Indeval or in any other securities deposit institution, in accordance with the provisions of applicable legislation. The holders of the CPOs, through ADSs or Foreign Investors, shall prove the ownership thereof, and shall prove the rights and justify the exercising of the rights originating from or related to the Trust Shares with the certificates issued by Indeval pursuant to the terms of Article 290 and other applicable articles of the LMV and other applicable legal provisions, complemented with the certificates issued by the depositors of Indeval and, if applicable, the relevant custodians. If applicable and if possible, the CPOs shall be delivered and transferred according to the procedure set forth in the LMV and other provisions established in the applicable legislation. The certificates representing the CPOs must meet the requirements set forth in Article 228 n of the LGTOC.
(b) Holders of CPOs shall not have voting rights with regards to the underlying Trust Shares; such rights shall be exercised by the Trustee pursuant to the provisions set forth in section (h) of Clause Fifth and Clause Eleventh below.
(c) The amount of the issuance and the par value of the CPOs shall be established exclusively for purposes of Articles 228, l and 228, n of the LGTOC, and will not bind the Trustee or Volaris to pay holders the par value of the CPOs, under the terms of Article 228, k of the LGTOC. The par value of each CPO shall be calculated by dividing the amount of the proceeds from issuance by the number of CPOs that are issued and placed.
NINTH. Restructures and Similar Acts .
(a) In the event Volaris redeems Series A Shares with distributable profits, reduces its capital stock as a result of the redemption or repurchase of CPOs or Series A Shares, as permitted by applicable law, agrees to conversions, splits or reverse splits of Series A Shares, or performs any other similar act, the Trustee shall
 
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proceed in accordance with the resolutions approved by the general shareholders meeting of Volaris, and shall make the announcements, exchanges and take all other necessary actions, modifying, as may be required, the composition of the Trust Estate that corresponds to each CPO.
(b) In the event of mergers and spin-offs, the Trustee shall perform all acts needed to replace and receive the shares or securities of the Trust Shares that will be part of the Trust Estate, with the consequent adjustment of the Trust Estate corresponding to each CPO.
(c) If any of the events specified in paragraphs (a) and (b) above, any change to the structure of the capital stock of Volaris, or any other event takes place and requires an increase in the number of CPOs issued and that may be placed, or a decrease in the number of CPOs issued, the Trustee shall take all measures, as instructed by the Technical Committee, to increase or decrease the number of CPOs issued, as the case may be, including the amending of this Agreement, any CPO Trust Deed, the certificates representing the CPOs, or enter into any contract or agreement, provided that the consent of the holders of CPOs will only be requested in cases where it is specified by applicable legislation.
TENTH. Holders of CPOs .
(a) The CPOs may be acquired by Foreign Investors in accordance with the provisions set forth in the applicable law, including the LIE and its Regulations and the corresponding CPO Trust Deed.
(b) Holders of CPOs, the Settlors and the Beneficiaries, by acquiring and holding CPOs and, if applicable, by the simple contribution of Series A Shares, shall be subject to the terms and conditions established herein as well as in the CPO Trust Deed and the certificate or certificates that cover the CPOs.
(c) The Holders may withdraw the underlying Series A Shares if (i) Volaris’ by-laws permit such withdrawal, (ii) for any reason, the holder of CPOs is a Mexican Investor, or (iii) the LIE permits such withdrawal.
ELEVENTH. Corporate Rights .
(a) The Holders shall not have any voting rights with respect to the underlying Trust Shares, therefore the Trustee shall grant a power of attorney to the individual or individuals appointed by the Technical Committee at least two (2) days prior to the date in which the shareholders general or special meeting of Volaris shall convene, so that such attorney or attorneys-in-fact exercise the corresponding rights to the Trust Shares, voting systematically in the same form as
 
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the majority of Series A Shares that are represented in such shareholders general or special meeting, provided , however , that in the event the Trustee does not receive instructions from the Technical Committee, it will vote or will ensure that the voting of the Trust Shares by the relevant attorneys-in-fact is made in the same form as the majority of the Series A Shares represented in such shareholders general or special meeting of Volaris;
(b) The CPOs Holders, despite being Foreign Investors, may instruct the Trustee in writing in order to exercise the applicable minority rights, different to the voting rights, corresponding to the underlying Trust Shares of the CPOs to which they hold title, in accordance with the applicable law and Volaris’ by-laws, including the exercise of any action corresponding to the owners of the minority interest in the Shares, providing the Trustee with the amounts and other resources necessary for such purposes.
(c) With respect to the exercise of the rights of the minority shareholders, different to the voting rights, derived or related to the Trust Shares, that are subject or referred to a determined percentage of the capital stock of Volaris pursuant to the applicable legislation, the Trustee shall consider, for such purposes and for the necessary calculation, the percentage represented by the Trust Shares underlying the CPOs of the holders that wish to exercise such minority rights, with respect to the total outstanding Shares representative of the capital stock of Volaris.
(d) The Trustee shall not be liable for the manner in which the attorneys-in-fact referred to in paragraph (a) above vote the Series A Shares, nor for their absence in the general or special shareholders meetings of Volaris, when the attorneys-in-fact are appointed by the Technical Committee.
TWELFTH. Subscription of New Series A Shares; Contributions .
(a) In the event the capital stock of Volaris is increased by new contributions in cash and subscription rights were applicable with respect to the shares of Volaris issued to represent such increase, the Trustee shall offer the Holders the right to make contributions to the Trust through a notice to be delivered to the CPOs Holders, if necessary, through the Common Representative (who may be assisted by Indeval), at least 10 (ten) days prior to the deadline for the subscription of such increase, and under the terms and taking into account the offer of the preferential subscription right made by Volaris. Such contributions shall be used so that the Trustee proportionally subscribes and pays the relevant Series A Shares and issues and places the new necessary CPOs, only if such offer can be carried out under the terms of the applicable legislation in the country of residence of the corresponding Holder, provided that (i) the Trustee shall only deliver one (1) CPO per Series A Share
 
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subscribed and contributed to the Trust Estate, or the different and higher number of Series A Shares provided by the Technical Committee in accordance with the terms hereof (including the provisions of Clause Ninth), and (ii) if necessary and by instructions of the Technical Committee, the Trustee may execute a new CPO Trust Deed.
(b) In the event the Holders provide the Trustee the necessary funds for the Trustee to subscribe and pay the corresponding Series A Shares of the new issuance, once such Series A Shares are contributed to or become part of the Trust Estate, the Trustee shall issue the corresponding CPOs, which it shall deliver to the respective Holders in proportion to their contributions in cash.
(c) Unless it receives written instructions to the contrary from the Technical Committee, the Trustee shall only subscribe Series A Shares under the terms previously agreed upon, provided that the Holders have furnished the sufficient funds at least two (2) Business Days prior the date on which the relevant payment must be made and according to the terms set forth in this Clause Twelfth.
(d) Notwithstanding anything to the contrary contained herein, if the respective governmental authorizations are obtained, the Trustee may issue the CPOs to cover the Series A Shares issued in terms and for the purposes set forth in Article 53 of the LMV, and the legislation applicable to public offers, in which case, the preferential subscription rights will not be applicable, and it is agreed that the Trustee may subscribe the Series A Shares and pay them by using the proceeds from the placement and sale of CPOs subject to the public offer.
(e) The Settlor, any Settlor by Adhesion and the Holders, through the acquisition of CPOs, recognize and agree that the contributions in cash and other resources to the Trust Estate may only be made by notifying the Trustee at the latest at 12:00 pm (noon), Mexico City time, of the day in which the contribution is to be made, and such notice must include the purpose for such contribution, provided that (i) if the notice is not given in a timely manner, the Trustee will not be required to recognize it, register and pay it, until it has been notified, and it will not accrue any interest until such date of notification, and (ii) said notice will not be necessary with respect to Holders that subscribe and pay the CPOs and the underlying Series A Shares, in the event of a capital increase by Volaris.
THIRTEENTH. Technical Committee; Composition .
(a) Pursuant to the provisions of the last paragraph of Article 80 of the Financial Institutions Law, a Technical Committee for this Trust is hereby created, and it shall have three (3) proprietary members and their respective alternates, two (2) of
 
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whom shall be appointed by shareholders who represent the majority of Volaris’ outstanding shares with voting rights, directly, and the third shall be appointed by the Common Representative. The parties appoint the following persons as initial members of the Technical Committee:

Principal Member	  	Alternate Member	

	  		
(b) The party who is entitled to appoint the members of the Technical Committee shall appoint new members in the absence, by any reason, of members previously appointed, and shall do so through a written instruction sent to the Trustee by the party having the respective right.
FOURTEENTH. Technical Committee; Operation .
(a) The Technical Committee shall convene, as often as necessary, either physically or by telephone conference, provided that it is convened by any of its proprietary members or by the Trustee, through a written notice to be delivered to all members by courier service, facsimile or e-mail, with a copy to the Trustee and the Common Representative, at least three (3) Business Days before the date selected for the meeting, and the notice should include the agenda for the meeting. The Trustee and the Common Representative, independently, shall be entitled to appoint a representative to attend the meetings of the Technical Committee, who shall have the right to be heard but not to vote.
(b) The Technical Committee shall be chaired by the person appointed from among the members that are appointed by the shareholders representing the majority of the Series A Shares, provided that they are holders of at least ten percent (10%) of the Series A Shares and the secretary shall be appointed by the majority vote of the Technical Committee.
(c) The meetings of the Technical Committee shall be considered validly convened when attended by at least the majority of its members. Alternate members may replace the proprietary member whom they were appointed to represent if the proprietary member is absent.
(d) Resolutions or agreements of the Technical Committee shall be passed by a majority of favorable votes of its members. The Chairman shall have the defining vote in the event of a tie.
(e) Meeting minutes shall be prepared for each meeting and must be signed by all attending members. The minutes shall record the resolutions or agreements adopted by the committee, and these shall be followed up by the special delegate appointed for such purposes.
 
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(f) The Trustee shall be notified in writing of the resolutions adopted by the Technical Committee by the Chairman of the Committee, the secretary, or the person appointed as special delegate. In the last case, the signature of the special delegate must be certified by the Technical Committee in the meeting in order to send the instructions to the Trustee.
FIFTEENTH. Technical Committee; Authority .
The Technical Committee shall have the authority to:
(a) instruct the Trustee to issue the CPOs to fulfill the Purposes of the Trust, specifying the amount and other characteristics of each issuance, previously having obtained any necessary government authorizations, and in accordance with the execution of the necessary CPO Trust Deeds;
(b) instruct the Trustee about the persons who shall act as attorneys-in-fact at the general or special shareholders meetings of Volaris; provided that the Trustee may exercise the voting rights as established herein through such attorneys-in-fact;
(c) instruct the Trustee to subscribe and pay for any increases in the capital stock of Volaris, as well as, if applicable, in connection with issuances performed under Article 53 of the LMV (that entail the issuance and placement of CPOs), and the repurchase of CPOs;
(d) give instructions to the Trustee in the cases set forth in Clause Ninth hereof;
(e) deal with any situation not contemplated herein or in any indenture of the CPOs or that it is considered ambiguous or subject to various interpretations;
(f) appoint an attorney-in-fact or attorneys-in-fact to defend the Trust Estate;
(g) ensure that the Trustee meets its obligation set forth in Clause Sixth herein; and
(h) any other authorities derived hereunder or that are necessary to carry out the Purposes of the Trust, including the event provided for in Clause Fifth herein.
 
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SIXTEENTH. Term; Expiration; Irrevocability .
(a) The parties agree that this Trust is established as an irrevocable trust, under the terms of Article 392 of the LGTOC. The term of this Agreement shall be 50 (fifty) years counted from the date of its execution. Once the limit date of the Trust has been reached, the parties, by common agreement, and with the participation of the Common Representative, may agree to set up a new Trust under terms similar to those herein, to which the parties or the Trustee shall transfer the Trust Estate in the manner instructed by the Technical Committee. If the parties do not agree to set up a new trust under similar terms, the Trust shall terminate in accordance with paragraph (b) below.
(b) In the event that all the Series A Shares or the CPOs issued thereof are withdrawn from circulation as a consequence of the provisions of Clause Ninth hereunder, the Trustee shall cancel the issuance of CPOs and shall terminate this Trust.
(c) In addition, the Trustee may terminate the Trust at any moment and under any of the circumstances set forth in Article 392 of the LGTOC, except as provided for in section VI of such Article.
(d) The Trust may also be terminated by means of a written notice from Volaris to the Trustee, if Volaris is able to prove to the Trustee that the applicable legislation has been amended and that the corporate by-laws of Volaris have been amended, so that the Series A Shares may be subscribed freely, both by Mexican Investors and Foreign Investors.
(e) If the Trust is terminated, the Trustee, based on the instructions of the Technical Committee, shall proceed, because it is dealing with Foreign Investors, and in accordance with the instructions of the Technical Committee, to (i) (A) sell the Trust Shares underlying the CPOs with the participation of the Common Representative of the Holders and, subsequently, distribute the sale proceeds among Foreign Investors that are Holders of the CPOs, in proportion to their respective Participation, or (B) incorporate a trust, having obtained the relevant authorization, and transfer all the underlying Trust Shares underling the CPOs held by Foreign Investors, so that Foreign Investors are the beneficiaries, through the CPOs, of such Series A Shares, according to their participation in the Trust Estate, or (C) if so allowed by applicable legislation, deliver the underlying Trust Shares of the CPOs to the Foreign Investors who hold the CPOs, in proportion to their respective participation in the Trust Estate, or (ii) take any other action, that under relevant circumstances, and taking into account the instructions of the Technical Committee, is necessary or suitable.
(f) The termination of this Trust shall, in all cases, be subject to the provisions set forth in Article 228 t of the LGTOC.
 
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SEVENTEENTH. Foreign Investors; Loss of Title to the CPOs .
It shall be understood that Foreign Investors, by acquiring and holding CPOs, have agreed with the Mexican Government, through the Ministry of Foreign Affairs, to be considered as Mexican nationals with respect to the CPOs that they acquire and which they hold, and they agree that by acquiring and holding the same, they will not invoke the protection of their governments, or will be penalized by giving title to the CPOs at issue to the Mexican Nation.
EIGHTEENTH. Expenses, Fees and Taxes .
(a) All reasonable expenses, fees and taxes incurred for the execution of this Agreement or the fulfillment thereof shall be paid by Volaris, who must pay them within five (5) Business Days following the date in which the Trustee receives the written notice thereof.
(b) If the Trustee receives notification from any tax authority regarding any interpretation that would make the activities subject to this agreement taxable and, as a consequence, the Trustee would have to withhold and pay any and all taxes in accordance herewith or any other related act hereto, Volaris undertakes to pay the applicable taxes and hold the Trustee harmless and provide it with the funds necessary to meet such obligations, in accordance with the applicable legislation. The Trustee shall not be liable in any manner for its actions regarding such withholdings and payments, and if it is fined or sanctioned in any way, Volaris undertakes to immediately refund any such expense or cost that the Trustee incurs.
NINETEENTH. Legal Prohibition .
In accordance with the provisions set forth in paragraph b), section XIX, of Article 106 of the Financial Institutions Law, which reads as follows:
“Financial institutions will be prohibited from
[…]
XIX. In connection with the transactions described in section XV of article 46 of this Law:
b) Being held accountable to the grantors or principals, for any default by the debtors, for the loans granted thereto, or of issuers, for the securities acquired, unless it is due to their own fault, as set forth in the last paragraph of article 391 of the General Law of Negotiable Instruments and Credit Operations, or from guaranteeing certain returns in connection with funds, the investment of which is requested therefrom.
 
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If upon termination of the trust, mandate or agency established to grant loans, any such loans shall not be repaid by the debtors, the institution shall transfer them to the settlor or the beneficiary, as the case may be, or to the representative or principal, without repaying any outstanding amounts.
In any trust, mandate or agency agreements, the provisions of this section shall be inserted conspicuously as well as a representation from the institution to the effect that it has, clearly and without doubt, made its meaning be known to the persons from which it has received assets or rights for assignment in a trust.
Any agreement that contradicts the provisions of the preceding sections will be null.”
In addition, in accordance with section 5.5 of the Circular number 1/2005 issued by the Central Bank, the trustee is subject to the prohibitions transcribed below and set forth in section 6 of such Circular 1/2005:
“ 6.1 In Trust transactions, Trustee Institutions will be prohibited from the following:
a) Applying to the trust prices that differ from the ones in which the transaction was agreed;
b) Guaranteeing proceeds or prices resulting from the funds it is required to manage;
c) Entering into transactions on terms and conditions contrary to its internal policies and sound financial practice;
6.2 Trustee Institutions may not enter into transactions with securities, negotiable instruments or any other financial instrument that do not comply with the specifications that were agreed upon in the corresponding trust agreement.
[…]
6.4 In no event may Trustee Institutions pay, with funds contained in the trust estate, fines applied to such Trustee Institutions by any authority.
[…]”
 
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TWENTIETH. Trustee Fees .
(a) The Trustee shall receive as fees for performing its functions in accordance herewith, such amounts agreed upon in the documents attached hereto as Exhibit B .
(b) The fees of the Trustee, and any other expenses incurred to carry out the obligations herein and for the issuance of CPOs and any amendments thereto, shall be paid by Volaris.
(c) Likewise, Volaris shall pay all expenses incurred by the Trustee (including reasonable and documented legal fees and expenses) to defend the Trust Estate as well as the fees and expenses that Volaris and the Trustee agree upon in order to carry out the acts that the Technical Committee instructs the Trustee to undertake in the fulfillment of the Purposes of the Trust.
(d) If Volaris does not pay such expenses, the Trustee must advise the Holders, by means of the Common Representative, who shall be entitled, but not obligated to pay them.
TWENTY-FIRST. Defense of the Trust Estate .
Without prejudice to the provisions set forth in Clause Sixth, the Trustee shall grant the powers of attorney to such persons and with all the authority instructed by the Technical Committee in order to defend the Trust Estate, or instructed by the majority of the Holders to exercise their corresponding rights, without the Trustee being liable for the performance or the fees and expenses incurred in the exercising of such power of attorney.
TWENTY SECOND. Indemnity .
(a) Volaris shall defend and hold the Trustee harmless, and any of its trustee delegates, officers, employees and attorneys-in-fact, for any liability, damage, obligation, lawsuit, judgment, transaction, notification, expense and/or cost of any kind, including reasonable and documented lawyers’ fees that are directly or indirectly asserted as the result of, imposed by, incurred by, on account of, or as a consequence of the acts performed by the Trustee in the fulfillment of this Agreement and in defending the Trust Estate (except when any of the foregoing are a consequence of the willful misconduct, fraud or negligence of the Trustee or when the Trustee performs any act not authorized hereby) or for any claim, fine, penalty or any other debt of any kind in connection with the Trust Estate or this Agreement, imposed by any administrative or judicial authority, arbitration tribunal, or any other authority, either local or federal, Mexican or foreign.
(b) The Trustee shall not be obligated to spend any amount from its own estate, or to incur any financial obligation other than those that it assumes as Trustee, in the fulfillment of the purposes of the Trust.
 
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(c) The Trustee shall not be obliged to confirm or ensure the authenticity of any means of identification, power of attorney, reports or certificates that it receives in accordance herewith. The Trustee shall not be liable for any declaration made by any of the other parties hereto or in the documents hereto. The parties hereby acknowledge and agree that the duties performed by the Trustee shall be limited to those of the Trustee of this Agreement, in accordance with the terms hereof.
(d) The Trustee shall be liable to the parties and/or to any third party up to the sum of the Trust Estate, without having any personal liability if the Trust Estate is insufficient to meet the obligations of the parties in accordance herewith.
(e) The Trustee shall not be liable for the actions, events or omissions of the parties or of third parties that hinder the performance of its duties for the purposes hereof.
TWENTY-THIRD. Registration before the National Registry of Foreign Investments .
The Trustee shall request the registration of this Agreement and the Trust before the National Registry of Foreign Investments, within forty (40) days from the date of execution of this Agreement.
TWENTY FOURTH. Securities Deposit Institution .
The parties shall take all necessary measures to ensure that Indeval operates, on behalf the Trustee, the debiting and crediting of the accounts with respect to the CPOs, needed for the proper accounting and supervision of all transactions made in connection with this Trust, and to issue the financial statements, certificates or equivalent documents that reflect the transactions of the Trust Estate, as well as the CPOs placed or withdrawn in accordance with the terms established herein.
TWENTY-FIFTH. Amendments .
(a) This Agreement may not be amended without the prior authorization of the Technical Committee, the approval of the CNBV, and the Ministry of the Economy if necessary, provided that once the CPOs have been issued, the consent of the majority of the Holders present in the holder’s general meeting is required, and must be given through the Common Representative.
(b) The amendment of the remaining documents signed by the Trustee in order to fulfill the Purposes of the Trust shall be governed by the provisions thereof and by the applicable legislation.
 
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TWENTY-SIXTH. Information, Accounting .
(a) In accordance with the provisions set forth in the Internal Regulations of the BMV, the Trustee, Volaris or any other person who has obligations in connection with the CPOs issued and released hereunder, must provide the BMV, as applicable, with the information referred to in such Regulations, as well as the information referred to in Section Two of Chapter Five of Title Four of such Regulations, with respect to the Trust Estate and the CPOs, respectively. The Trustee and Volaris agree that if such obligation is not met, they shall be liable for the sanctions and disciplinary measures set forth in Title Eleventh of the aforementioned Regulations. For such purposes, the Trustee and Volaris shall appoint the officers responsible for submitting to the BMV the information that is required by the relevant provisions.
Volaris and the Trustee must also meet all requirements regarding the presentation or disclosure of information to which the settlors or trustees are bound under the terms of the LMV and other applicable legislation.
(b) During the term of this Agreement and through the “Online Trustee” system ( Sistema Fiduciario en Línea ), the Trustee agrees to provide Volaris any and all Settlors by Adhesion, and the Common Representative, with financial statements that contain a general balance sheet, an income statement and a trial balance, along with monthly account statements, within 20 (twenty) Business Days following the end of each calendar month, with respect to the assets that are part of the Trust Estate, the CPOs released as of that date, and any and all investments related to the same.
(c) Upon receiving the financial statements and other above-mentioned information, which the Trustee must deliver, Volaris, any and all Settlors by Adhesion, and the Common Representative will have 20 (twenty) Business Days from the date such financial statements and other information have been actually received independently by each of them, to request the Trustee, in writing, as may be applicable, any corrections or explanations of the same, and once such term has expired without any request for corrections or explanations, such financial statements and other information will be considered approved for all effects and purposes, except in cases where there is fraud, willful misconduct, bad faith or illegality, or where the errors or misconduct are not readily ascertainable from the review of the financial statements and other information.
 
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(d) Every financial statement and other information presented by the Trustee to Volaris, the Settlors by Adhesion or the Common Representative, will be prepared in accordance with the forms that have been institutionally pre-determined, if such forms have been pre-determined, and will contain the information that the parties agree and that the Trustee deems appropriate pursuant to the institutional policies, as well as the additional information that the parties reasonably request to the Trustee, and the Trustee must ensure that such information is clear, correct and complete.
TWENTY SEVENTH. Notifications and Domiciles, Use of Electronic Media .
(a) All the communications made between the parties pursuant to this Agreement must be made in writing and sent by certified mail, with acknowledgment of receipt, by facsimile, e-mail or by any other means that ensures their receipt, to the following addresses provided that the notices to the Technical Committee, its members or any Settlor by Adhesion, will be delivered to the addresses they provide the Trustee with:
Volaris:
Av. Antonio Dovalí Jaime No.70, torre B, piso 13
Col. Zedec Santa Fe
01210, México, Distrito Federal
Tel: (01-55)             
Fax: (01-55)             
Email:             
Attention:             
The Trustee:
Insurgentes Sur No. 1972
Torre Norte
Piso 6
Colonia Guadalupe Inn
Delegación Álvaro Obregón
01020 México, Distrito Federal.
Tel: 5325-6090
Fax: 5325-6090 ext. 6090
Email:             
Attention: Dirección Fiduciaria
(b) If any of the parties changes its address , it must notify the other parties in the manner specified hereunder and as of the day following the receipt of the notification, its address shall be considered as changed for the purposes hereof; otherwise, it shall be understood that said notices, notifications or communications to be given hereunder shall be legally effective when delivered to the most recent address of which the other parties are aware.
 
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(c) Volaris, as Settlor, the Trustee and the members of the Technical Committee, because of their respective positions, agree to use the Internet, through the system entitled “Fiduciario en Línea”, that the Trustee will use and will make available to Volaris and to the Technical Committee and its members, through which they will give instructions to the Trustee, make transactions with liquid assets that are part of the Trust Estate, if applicable, before their distribution in accordance with the provisions hereof, through the person or persons designated by the Technical Committee or by Volaris, as the case may be, pursuant to the applicable provisions and proceedings that from time to time are agreed upon with the Trustee. The parties accept, from this moment onwards, any liability for the use of the password provided by the Trustee for the use of such electronic media; notwithstanding the foregoing, Volaris, the Technical Committee or its members may use other written means to send any and all instructions.
(d) Internet may be used, subject to the provisions of this Agreement, pursuant to the following:
(i) The identification of corresponding authorized user will be done through the use of access codes and passwords provided in writing by the Trustee, and which, for purposes of Article 52 of the Financial Institutions Law, will be considered as the identification mechanism, and the designated people will be solely liable for the use of such means of identification.
(ii) The instructions sent through the above-mentioned electronic means will have the same legal effect as the written authorizations signed by the person or persons with the authorization to use the liquid assets that constitute the Trust Estate; the Trustee must ensure the integrity of the information transmitted through such means.
(iii) The creation, transmission, modification or expiration of the rights and obligations resulting from all operations or services instructed through electronic means will be recorded in a logbook that will be kept by the Trustee and will contain all the information about the received instructions.
(iv) User authentication will be done through the use of access codes and passwords provided by the Trustee, as well as through a second authentication mechanism that employs dynamic information for monetary transactions, and if necessary, the Trustee must keep them up-to-date and must take all necessary measures to ensure users know how to use them properly.
 
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(v) The confirmation of the monetary transactions made by the Trustee through electronic means, which the Trustee agrees to do, may be done through the same electronic means, using the following options:
 
 	•	 	express written confirmation, sent to the appropriate party pursuant to the terms of this Agreement;	
 
 	•	 	in the case of parties other than the Trustee, activity consultation and balance inquiries due to investment contracts, provided that for such purposes, the Trustee agrees to register immediately any activity and maintain accurate records of the respective activity;	
 
 	•	 	instructions for deposit, withdrawal, transfer, payment of fees and pending instructions, which the Trustee agrees to acknowledge and sign, if so requested by the holder of the right;	
 
 	•	 	in the case of parties other than the Trust, financial information consisting in the account statement which the Trustee agrees to prepare and make available to the holder of the respective right.	
(vi) The Trustee informs Volaris, the Settlors by Adhesion (at the moment of the adhesion), and the Technical Committee and its members that the main risks existing for the use of electronic means, in terms of this clause, are the risks listed below, and the Trustee agrees to (A) develop and maintain systems limiting such risks, (B) periodically take the measures within its powers to reduce such risks and to improve its systems in order to reduce the risks, and (C) immediately notify the occurrence, or the potential occurrence of any of the following risks, which are considered the main risks:
 
 	•	 	Theft of the profile using a malignant code or possible electronic fraud;	
 
 	•	 	Impossibility to carry out transactions, in which case alternative means agreed upon by the parties may be used, as facsimile and delivery of written instructions personally;	
 
 	•	 	Possible theft of sensitive data of the title-holder, which will be notified by the Trustee as soon as it has knowledge of it, agreeing to assist, as necessary, for the exercise of rights by the affected party;	
 
 	•	 	Access to portals that may compromise the security profile of the user.	
 
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(vii) The parties agree, exclusively with respect to the provisions of this Agreement, that in order to prevent irregular or illegal transactions:
 
 	•	 	the Trustee agrees to maintain the operating system and all of its components up-to-date;	
 
 	•	 	they will use a reputable antivirus software and keep it up-to-date;	
 
 	•	 	in the case of the Trustee, it will install a personal firewall;	
 
 	•	 	in the case of the Trustee, it will install anti-spyware software and keep it up-to-date;	
 
 	•	 	they will set the security and privacy levels of the applicable internet browser to at least medium;	
 
 	•	 	they will take reasonable precautions to ensure being in safe websites to make commercial and electronic banking transactions;	
 
 	•	 	they will not disclose confidential or personal information authorized for it;	
 
 	•	 	they will change the user names and passwords on a regular basis, in all cases (i) as long as this is possible considering the means available for the Trustee; and (ii) at the request of the Trustee;	
 
 	•	 	they will avoid doing financial transactions in public places or through wireless networks; and	
 
 	•	 	as it relates to the Settlor, any Settlor by Adhesion or the Technical Committee, they will contact the Trustee in the event any irregularity is detected.	
(e) The Technical Committee, through a representative appointed for such purposes, Volaris and the Trustee, as the case may be, will inform the other parties of any change in the record of users authorized to use the electronic media.
 
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TWENTY-EIGHTH. Jurisdiction and Applicable Law .
(a) This Agreement shall be construed and fulfilled in accordance with the laws of Mexico.
(b) For any dispute that may arise hereunder, the parties agree to expressly submit themselves to the jurisdiction and competence of the competent federal courts of Mexico City, Federal District, waiving their rights to any other jurisdiction to which they may be entitled by reason of their present or future domicile or otherwise.
(c) The agreement is executed in five (5) counterparts in Mexico City, Federal District, on             , 2013.
Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Dirección Fiduciaria

 	
By:	 	Juan Manuel Altamirano León	
Title:	 	General Trustee Delegate	
 
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Controladora Vuela Compañía de Aviación, Sociedad Anónima Promotora de Inversión de Capital Variable

 	
By:	 	 	
Title:	 	Attorney in Fact	
SIGNATURE PAGES TO THE IRREVOCABLE TRUST AGREEMENT ENTERED INTO BY AND AMONG NACIONAL FINANCIERA, SOCIEDAD NACIONAL DE CRÉDITO, INSTITUCIÓN DE BANCA DE DESARROLLO, DIRECCIÓN FIDUCIARIA, AND CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE ON             , 2013.
 
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Exhibit A
Authorization from the Ministry of Economy
 
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Exhibit B
Trustee Fees
1. For assessment and acceptance [$100,000.00 (one hundred thousand Mexican Pesos)], to be paid to the Trustee on the date of execution of this Agreement, in addition to the value added tax.
2. For the management of the Agreement, a fixed yearly fee of [$600,000.00 (six hundred thousand Mexican Pesos)], to be paid quarterly, in addition to the value added tax, provided that this amount will be revised every year, starting in 2015, in accordance with the positive variation, if any, of the national consumer price index published by the Bank of Mexico of the immediately preceding calendar year.
 
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Exhibit 4.4
[Translation for informational purposes only]
CPO DEED
In Mexico City, Federal District, on                     ,                     , two thousand thirteen I, Mr.                     , notary public number                      of the Federal District, hereby certify the ISSUANCE OF NON-REDEEMABLE ORDINARY PARTICIPATION CERTIFICATES denominated “VOLARIS.CPO” (the “ CPOs ” and each of them, a “ CPO ”) granted by unilateral declaration of intent Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (the “ Trustee ” or the “ Issuer ”), hereby represented by Mr.                     , a Trust Delegate, as trustee and pursuant to the purposes of the Irrevocable Trust Agreement No.                      dated                     (the “ Trust Agreement ”), with the consent of                      Institución de Banca Múltiple, Grupo Financiero, División Fiduciaria, (the “ Common Representative ”), hereby represented by Mr.                     , in order to accept its appointment as Common Representative of the Holders of the CPOs; with the appearance of the National Banking and Securities Commission (“ CNBV ”), hereby represented by [Mrs. Andrea Fabiola Tinoco Hernández, acting as General Legal Counsel of the Securities Department], in accordance with the following Recitals, Representations and Clauses:
RECITALS
I. UNANIMOUS SHAREHOLDERS RESOLUTIONS
On                      two thousand thirteen, the shareholders of Controladora Vuela Compañía de Aviación, Sociedad Anónima Bursátil de Capital Variable (“ Volaris ”), by unanimous resolutions resolved, among other matters, the execution of an Irrevocable Trust Agreement which purposes are, among others, the following: (i) the receipt by the Trustee of Series A shares from Volaris resulting from an approved increase of capital stock, as well as other Series A shares contributed directly by any of the current shareholders of Volaris; (ii) the issuance by the Trustee of CPOs referred to, and which have as underlying shares, the Trust Shares (as this term is defined below); (iii) the registration of the CPOs, issued by the Trustee pursuant to the Trust Agreement which have as underlying shares the Series A shares, with the Securities and Exchange Commission (“ SEC ”) of the United States of America, and the listing in the form of American Depositary Shares (“ ADSs ”) on the New York Stock Exchange, or the National Association of Securities Dealers Automated Quotation and/or with any other securities authorities or in any other securities market exchange, copy of which is attached hereto under the same number of this instrument and letter A corresponding to it; and (iv) the delivery of the CPOs to the foreign investors entitled to receive them, who otherwise
 
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would not be able to acquire directly Series A shares representing the capital stock of Volaris, so that such persons may participate through CPOs (and ADSs) as investors in Volaris, having economic rights but not voting rights, with respect to the underlying Series A shares of the CPOs, a copy of which is attached hereto under the same number of this instrument and letter A corresponding to it.
II. TRUST
On                      two thousand thirteen, Volaris as Settlor, executed with the Issuer, acting as trustee, the Trust Agreement, so that the Trustee may, based on the Volaris Series A shares that are contributed to the Trust as a result of the Trust Agreement, issue the CPOs referred to in this deed under the terms and conditions indicated by the Technical Committee of the Trust Agreement, a copy of which is attached to this instrument with the letter B .
III. TRUST ASSETS
Up to 90% (ninety percent) of the sum of (i) the ordinary, nominative, no par value, Series A shares representing the outstanding capital stock of Volaris, and (ii) the ordinary, nominative, no par value, Series A shares converted from the ordinary, nominative, no par value, Series B shares, representing the outstanding capital stock of Volaris (such shares, together with other Series A shares of Volaris issued in the future, the “ Series A Shares ”), which may be transferred to the Trustee in the trust, will provide the basis for this issuance of CPOs and such shares may constitute the Common Fund (as defined below) (any of such Series A Shares part of the Common Fund, the “ Trust Shares ”).
IV. MINUTES OF THE TRUST TECHNICAL COMMITTEE
The Technical Committee in accordance with the Trust Agreement, in the meeting held on                      two thousand thirteen, resolved, pursuant to the authority granted under the Trust Agreement, to carry out this issuance of CPOs (the “ Issuance ”) according to the terms and conditions indicated in the minutes of such Technical Committee’s meeting, a copy of which is attached to this instrument with the letter C .
V. REPORT
Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, formulated the report referred to in Article 228 h (two hundred twenty eight h) of the General Law of Negotiable Instruments and Credit Operations ( Ley General de Títulos y Valores, herein after “ LGTOC ”) so that based on the value of the Volaris’ shares underlying the CPOs, the total value of the Issuance be determined, a copy of which is attached to this instrument with the letter D .
 
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VI. AUTHORIZATION OF THE MINISTRY OF ECONOMY
By means of the official communication number DAJCNIE.315.12.769 dated November 6, 2012, supplemented by official communication number                     , dated                      two thousand thirteen, the Ministry of Economy, through the General Office of Foreign Investment, approved the creation of a neutral investment trust having a trust estate formed by Series A Shares (the “ Authorization of Foreign Investment ”), a copy of which is attached to this instrument with the letter E .
VII. REQUEST TO THE NATIONAL BANKING AND SECURITIES COMMISSION
The Trustee filed a written request to the CNBV requesting approval to carry out this CPOs Issuance, a copy of which is attached to this instrument with the letter F .
VIII. APPROVAL FROM THE NATIONAL BANKING AND SECURITIES COMMISSION
The CNBV issued its approval to carry out the CPOs Issuance referred to in this instrument, a copy of which is attached to this instrument with the letter G .
REPRESENTATIONS
 
 	A.	REPRESENTATIONS OF THE ISSUER´S LEGAL REPRESENTATIVE	
I. LEGAL CAPACITY. Mr.                     , trust delegate of Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, evidences the legal existence of such entity and his legal capacity with certified copies of the corresponding instruments, a copy of which are attached to this instrument with the letter H .
II. REPRESENTATION. The Issuer is a sociedad nacional de credito (national credit company) of Mexican nationality, duly incorporated and existing, and authorized to operate as a credit institution, under the terms of the Organic Law and the Law of Financial Institutions, and to act as a Trustee in trusts that have as purpose the issuance of redeemable ordinary participation certificates. The domicile of the Issuer is Mexico City, Federal District and its principal offices are located at Avenida Insurgentes Sur mil novecientos setenta y uno, Colonia Guadalupe Inn, código postal cero mil veinte in Mexico, Federal District.
 
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III. AUTHORITY. The Issuer has the authority to execute this CPO Deed, which does not contravene the terms of the Trust Agreement.
 
 	B.	REPRESENTATIONS OF THE REPRESENTATIVE OF THE NATIONAL BANKING AND SECURITIES COMMISION	
I. LEGAL CAPACITY. The legal representative of the CNBV represents that he is the [General Legal Counsel of the Securities Department of the CNBV, as evidenced by the terms of the resolutions through which the President of the National Banking and Securities Commission delegates his authority to the Vice-Presidents, General Directors and Managing Directors of the CNBV, published in the Federal Official Gazette on the      day of              of the year two thousand             ] and further represents that such authority has not been revoked or limited in any manner whatsoever.
 
 	C.	REPRESENTATIONS OF THE COMMON REPRESENTATIVE	
I. LEGAL CAPACITY. The legal representative of the Common Representative, evidences the legal existence of such entity and his legal capacity with certified copies of the corresponding instruments, a copy of which are attached to this instrument with the letter I .
II. APPOINTMENT. The Settlor appointed                     , División Fiduciaria, as Common Representative of the Holders of the CPOs issued in this Issuance.
III. AUTHORITY. The Common Representative has the authority to execute this CPO Deed which does not contravene any applicable law or contractual provision.
IV. VERIFICATIONS. In order to comply with the provisions of Article 228 m (two hundred twenty eight paragraph m), Section XI (Eleventh), and Article 228 r (two hundred twenty eight paragraph r) of the LGTOC, the Common Representative has verified:
1. the creation of the Trust resulting from the Trust Agreement; and
2. the existence of the trust estate resulting from the Trust Agreement referred to in the report which is attached to this deed under the letter J , and the authenticity of such report.
D. DEFINED TERMS. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Trust Agreement.
 
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In witness of the recitals and representations above, the Parties agree to the following:
IN WITNESS OF THE RECITALS AND REPRESENTATIONS ABOVE, the Trustee grants this Issuance pursuant to the following:
CLAUSES
FIRST . Issuance . The Issuer, by unilateral declaration of intent and in order to comply with the Purposes of the Trust and considering the instructions of the Technical Committee of the Trust, issues a total of                      (                    ) CPOs, with a nominal value of                      (                     pesos 00/100 M.N.) for each CPO and with a total nominal value of the Issuance of $                      (                     pesos 00/100 M.N.); such amounts are determined only for the purposes of Article 228 m (two hundred twenty eight paragraph m) of the LGTOC and initially places a total of                      (                    ) CPOs.
The Trustee may increase or decrease the number of outstanding CPOs under this CPO Deed (without the need to amend this CPO Deed), (1) to deliver CPOs derived from contributions, of Series A Shares that any person, as the Settlor by Adhesion or on behalf of a Settlor by Adhesion may carry out, to the Common Fund of this Issuance, including without limitation, Series A Shares contributed by Volaris or any third party, on behalf of Foreign Investors as a result of the conversion of outstanding Series B Shares of Volaris into Series A Shares, and / or (2) to deliver Series A Shares in the account of Indeval indicated by the Mexican Investors upon acquisition of CPOs by such Mexican Investors.
The Trustee may increase the number of CPOs under this Issuance to recognize benefits or returns resulting from the CPOs or any other event affecting the Trust Shares under the terms of subparagraph a) of Article 228 a (two hundred twenty eight subparagraph a) of the LGTOC, as long as such benefits, returns or events have as a consequence an increase in Volaris’ shares in the Trust Estate which is the base of the Issuance and such increase is also based on the following assumptions:
ONE. An increase in the capital stock of Volaris by means of a capitalization of dividends or a payment of dividends with Series A Shares or any other similar event affecting Series A Shares.
TWO. An increase in the capital stock of Volaris subscribed by the Trustee and paid pursuant to the instructions of the Holders of CPOs and resulting from the exercise of the preemptive right provided by Article 132 (one hundred thirty two) of the General Corporations Law or from any other similar right.
 
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In such cases, the Trustee shall follow the following procedure:
 
 	(a)	An institution authorized under the LGTOC will prepare an opinion on the new Series A Shares which may be part of the Common Fund of the Issuance.	
 
 	(b)	The Trustee, based on such opinion, shall request authorization from the CNBV, to increase the number of CPOs under the Issuance and if necessary, Volaris will request the CNBV to update the registration of the Shares and CPOs in the National Registry of Securities ( Registro Nacional de Valores , the “ RNV ”).	
 
 	(c)	The Trustee, with the appearance of the CNBV and the Common Representative, by unilateral declaration of intent granted before a notary public, will amend only the First Clause of this Deed, to evidence the new number of CPOs to be issued, considering the increase resulting from the corresponding event, of the numerals ONE and TWO above-mentioned, without the need to hold a general meeting of CPO holders, since the rights of CPO holders will not be affected.	
 
 	(d)	The Trustee will replace the global certificate or the certificates representing the CPOs with one or more new certificates reflecting the new number of CPOs issued. The previous certificate or certificates will be canceled and the new certificate or certificates will be deposited at the Indeval pursuant to Clause Fifth below.	
 
 	(e)	Each CPO issued will represent a Series A Share, subject to the terms and conditions set forth in Clause Fourth of this Deed.	
 
 	(f)	The Common Representative will publish an updated notice of the number of CPOs to be issued.	
THREE. With respect to the increase of shares by means of any split or by means of any other similar event resulting from any corporate act, the Issuer will exchange the certificates previously deposited at Indeval for new certificates, which shall indicate the corresponding number of CPOs pursuant to the increase of the number of Series A Shares. In order to register the new number of CPOs, the previously issued number will be multiplied by the same multiple used for the Series A Shares, and notice to the CNBV shall be given. Notwithstanding the above, Volaris will have to request to the CNBV the update of the registration of the Series A Shares in the RNV for each of the above-mentioned cases.
 
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To the extent necessary, the Issuer with the appearance of the CNBV and the Common Representative, by unilateral declaration of intent granted before a notary public, will amend this Clause of the CPO Deed only to certify the new number of CPOs issued, provided, that the opinion referred to in the immediately preceding subsection (a) will be required; for the amendment the consent of the holders of the CPOs will not be required since their rights will remain protected without suffering any impairment; provided , however , that if any clause of the Trust Agreement were to be amended, it shall be authorized by the meeting of the CPOs Holders.
SECOND . Common Fund . The Common Fund (the “ Common Fund ”) of this Issuance is formed with:
(a) The Series A Shares initially contributed to the estate Trust consisting of                      (                    ) Series A Shares which value was established in the report made in accordance with the terms of Article 228 h (two hundred twenty eight h) of the LGTOC.
(b) The rest of the Series A Shares received by the Trustee from other shareholders of Volaris or from third parties acting on behalf of the shareholders of Volaris (including Series B Shares converted into Series A Shares) for the exchange of such shares for CPOs issued by the Trustee in accordance with the terms and conditions agreed in the Trust Agreement.
The Trustee will integrate to the Common Fund of the Issuance, the Series A Shares which the Adhesion Settlors, or any other third party on their behalf, contribute at any time during the term of the Trust Agreement.
(c) the Series A Shares subscribed by the Trustee in proportion to the number of Series A Shares held by the Trustee, as a result of a capital increase by new contributions resolved by the shareholders meetings of Volaris, as long as it timely receives the necessary funds from the holders of the CPOs.
(d) the Series A Shares received by the Trustee in proportion to the number of Shares Series A held by the Trustee, as a result of a capital increase through capitalization of capital premiums, profits and other equity items that can be legally capitalized, resolved by the shareholders meeting of Volaris.
(e) the Series A Shares received by the Issuer as a result of payment of dividends payable in Series A Shares.
(f) any and all Series A Shares received by the Trustee for any other reason.
 
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THIRD . Date of the Issuance .
The date of Issuance of the CPOs will be on                      , 2013.
FOURTH . Characteristics of the CPOs .
The CPOs will have the following characteristics:
 
 	(a)	will be negotiable instruments and will contain a reference indicating that such instruments are non- redeemable ordinary participation certificates.	
 
 	(b)	will be nominative;	
 
 	(c)	will be non-redeemable;	
 
 	(d)	for the purposes described under Article 228 m (two hundred twenty eight m) of LGTOC, will contain an indication of their nominal value;	
 
 	(e)	pursuant to the terms of Article 228 k (two hundred twenty eight k) of LGTOC, the Trustee will not be obligated to pay to the holders the nominal value of the CPOs;	
 
 	(f)	will not have any guaranteed fixed return;	
 
 	(g)	will confer to their holders the rights indicated in Clauses Sixth and Seventh below;	
 
 	(h)	will contain all other requirements and mentions set forth in Article two hundred twenty eight n (228 n) of LGTOC;	
 
 	(i)	the Series A Shares underlying the CPOs will be registered in the RNV of the CNBV. The CPOs are intended to be acquired by Foreign Investors in accordance with the provisions of the Foreign Investment Law and its Regulations ( Ley de Inversión Extranjera y su Reglamento ), in terms of the official communication No. DAJCNIE.315.12.769 dated November 6, 2012, supplemented by official communication number                      (                    ) dated                      two thousand thirteen issued by the Ministry of Economy referred to in the Recitals of this CPO Deed;	
 
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 	(j)	the CPOs will be issued based on the Common Fund of the Issuance at a ratio of one (1) ordinary, nominative, no par value, Series A Share representing the variable portion of the capital stock of Volaris in the Trust per one (1) CPO that the Trustee shall place, up to the amount specified in the first paragraph of Clause First of this CPO Deed.	
Under no circumstances will the Trustee be able to place a higher number of CPOs than the number of Volaris Series A Shares that are contributed in accordance with the Trust Agreement and which have become part of the Common Fund for this Issuance.
FIFTH . CPOs Certificates .
The CPOs herein issued shall be evidenced by one (1) or more certificates that will be deposited at Indeval, under the terms and for purposes of Articles 282 (two hundred eighty two), 283 (two hundred eighty three), 290 (two hundred and ninety) and other relevant articles of the Securities Law ( Ley del Mercado de Valores ), and the holders of the CPOs will validate their rights in relation with the Trust Shares in accordance with Article 290 (two hundred and ninety) and other relevant articles of the Securities Law.
SIXTH . Rights of the Holders .
The Holders of the CPOs will have the following rights:
(a) A share of the dividends and any and other distribution of any nature corresponding to the Trust Shares which form part of the Common Fund of this Issuance, in accordance with and under the terms approved by the shareholders general meeting of Volaris.
(b) through the Trustee, to subscribe and pay the capital increases resolved by Volaris in the exercise of the applicable preemptive rights, as long as they are applicable and the necessary funds are provided to the Trust.
(c) Upon expiration or early termination of the Trust Agreement, as applicable, to receive from the Trustee the Series A Shares or the product resulting from the sale of Series A Shares corresponding to them pursuant to the provisions of Clause Sixteenth of the Trust Agreement.
(d) The Holders of CPOs may withdraw the underlying Series A Shares in the event that (i) the bylaws of Volaris allow such withdrawal, (ii) for any reason, the Holder is a Mexican Investor, or (iii) the Mexican Foreign Investment Law permits such withdrawal.
(e) Any other right resulting from the Trust Agreement, the applicable law or from the holding of CPOs.
 
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SEVENTH . Corporate Rights .
(A) Holders of CPOs will not have any voting rights with respect to the underlying Series A Shares, therefore the Trustee will grant a power of attorney to the person or persons indicated by the Technical Committee at least two (2) days before the date of the respective Volaris shareholders meeting, so that such legal representative or representatives may exercise the corresponding Series A Share rights, voting consistently in the same form in which most of the Series A Shares vote at such shareholders meeting, provided , however , that if the Trustee does not receive instructions from the Technical Committee, it will vote or cause to be voted such Trust Shares by the legal representatives it determines, in the same form in which the majority of the Series A Shares vote at such shareholders meeting.
(B) The Holders of CPOs, even if they are Foreign Investors, may instruct the Trustee in writing so that the Trustee exercises the applicable minority rights corresponding to the Trust Shares underlying the CPOs held by such Holders, in accordance with the applicable law and the by-laws of Volaris, providing the Trustee with the required funds to do so, provided, however , that such rights may be exercised directly by the Holders of CPOs, and therefore, the Trustee agrees to carry out the acts reasonably requested by the Holders of CPOs who will be responsible for any cost or expense derived from such acts.
With respect to the exercise of rights arising from or related to the Trust Shares which are subject to or related to a certain percentage of the capital stock of Volaris in accordance with the applicable law, the Trustee shall consider, for such purposes, the percentage representing the Trust Shares underlying the CPOs of the CPO holders who wish to exercise the corresponding rights with respect to the total outstanding shares of capital stock of Volaris.
The Trustee will not be responsible for how the Series A Shares are voted by the legal representatives or for the absence of such representatives at the general or special shareholders meetings of Volaris, as long as such representatives are appointed by the Technical Committee.
EIGHT . Meetings . The general meetings of the holders of CPOs will be carried out in accordance with the provisions of Articles 218 (two hundred and eighteen), 219 (two hundred and nineteen), 220 (two hundred and twenty), 221 (two hundred twenty one) and 228 s (two hundred twenty eight, paragraph s) of LGTOC and in accordance with the provisions of the Trust Agreement and other applicable provisions of the LGTOC and pursuant to the following provisions:
(a) The general meetings of Holders of CPOs will represent them as a group and will meet whenever they are called by the Common Representative.
 
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Any Holder or group of Holders of CPOs representing at least ten percent (10%) of the outstanding CPOs may request the Common Representative to call a general meeting of CPOs Holders indicating in his petition the issues to be addressed at the meeting. The Common Representative shall issue the call for the meeting within a period of twenty (20) days as of the date the request was received. If the Common Representative fails to comply with this obligation, the judge of the domicile of the Trustee, at the request of the corresponding Holders of CPOs, shall issue the call for the general meeting of holders.
(b) The call for the meeting of holders of CPOs (with respect to first or subsequent call) will be published in the Official Federal Gazette and in one of the major newspapers of the domicile of the Trustee, at least 10 (ten) days prior to the date of the meeting. The call shall indicate the agenda to be discussed by the meeting. No call will be required if all Holders meet.
(c) Except as provided in the next paragraph, for the meeting of holders of CPOs to be considered legally convened by virtue of a first call, the Holders of at least half plus one of the outstanding CPOs must be represented, and in second or subsequent calls, the meetings shall be deemed legally convened with any number of CPOs represented in the meeting. The decisions will be valid if approved by Holders representing a majority of the CPOs represented in the general holders meeting.
(d) In the following cases, for the meeting of Holders of CPOs to be considered legally convened by virtue of a first call, the Holders of at least seventy-five percent (75%) of the outstanding CPOs in this Issuance shall be represented, and in second or subsequent calls, the meeting shall be deemed legally convened with any number of CPOs represented in the meeting. The following decisions will only be valid when they are approved by half plus one of the votes comprising the totality of all the Holders of CPOs:
(i) the revocation of the appointment of the Common Representative;
(ii) the appointment of a new Common Representative; and
(iii) the impairment of any rights corresponding to the Holders of the CPOs, with respect to the Series A Shares or in any other form (including the voting rights of the CPOs per se, in any general meeting of the Holders of CPOs,
 
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notwithstanding the absence of voting rights, for the Holders of the CPOs with respect to the underlying Trust Shares).
(e) In order to attend the general meetings of the Holders, the Holders shall evidence their ownership through certificates issued by Indeval and by any custodian maintaining accounts in Indeval, filing the corresponding documentation (and any additional documentation required, including any power of attorney or proxy granting authority to an attorney or representative) in the place designated in the call for a general meeting of the Holders no later than one day before the schedule date for the meeting. The Holders may be represented in the general meeting of Holders by their legal representative authorized by means of a proxy.
(f) The general meeting of the holders shall be chaired by the Common Representative and the Holders will have the right to cast as many votes as they are entitled to, pursuant to the CPOs held by each of the Holders, having (1) one vote for each CPO issued.
(g) The Holders of the CPOs having a conflict of interest in a particular transaction shall refrain from any deliberation or vote related to such transaction.
NINTH . Acceptance and Obligations of the Common Representative .
                     S.A., Institución de Banca Múltiple,                     , División Fiduciaria, through its representative, accepts its appointment as Common Representative of the Holders. The Common Representative agrees to have all rights and obligations derived from this deed, the Trust Agreement and the LGTOC, for which it has verified the existence of the Trust Estate and the authenticity of the report prepared by Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, and it authorizes with his signature, the CPOs issued in accordance with this CPO Deed in accordance with article 228 r (two hundred twenty eight r) of the LGTOC.
The Common Representative of the Holders of this issuance shall have, in addition to those provided by applicable law, the following rights and obligations:
(a) to review, at any time, the status of the Common Fund of the Issuance;
(b) to verify the creation and terms of the Trust Agreement;
(c) to verify the existence of the Trust Shares;
 
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(d) to authenticate with his signature the certificates representing the CPOs;
(e) to exercise the rights of the Holders of CPOs in connection with the payment of any dividend or distribution, of any nature, to which they are entitled;
(f) to request from Volaris, the holders of the CPOs and the Trustee any information reasonably necessary to comply with the obligations derived from its appointment;
(g) to ensure the proper compliance of the obligations contained in the Trust Agreement and in this CPO Deed;
(h) to call and chair the general meeting of the holders of CPOs;
(i) to preserve all notices and reports sent by the Trustee and to maintains available such information for the holders of the CPOs;
(j) to monitor the interests of the holders of the CPOs and their rights under this CPO Deed, the Trust Agreement and the applicable law;
(k) to carry out any action to protect the rights, actions or resources of the holders of the CPOs;
(l) to execute the resolutions taken at the general meetings of the holders of the CPOs.
In order for the Common Representative to exercise and comply with the rights and obligations resulting from its appointment, Volaris, the Holders of the CPOs and the Trustee shall provide to the Common Representative or to the people indicated by the Common Representative, the information reasonably required under applicable law, which will have the right to request; provided , however , that the Common Representative shall keep such information confidential, unless there is an obligation to disclose it under the terms of applicable law or by a court order or by express permission of the party that would have given the information.
The holders of CPOs, by resolution taken at a general meeting of holders of the CPOs (subject to the provisions of the LGTOC) may revoke the appointment of the Common Representative and appoint a substitute Common Representative, provided , that , such revocation shall only have effects from the date on which a substitute common representative has been appointed, has accepted the position and has taken possession of it.
 
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TENTH . Fees of the Common Representative . The Common Representative will receive the fees agreed with Volaris in a separate document which will be paid by Volaris.
ELEVENTH . Fees of the Trustee . The Issuer will charge the amounts indicated in the Trust Agreement, which will be paid by Volaris. Also, Volaris will pay all the expenses, duties and fees related to the granting, cancellation and registration of this Issuance.
TWELFTH . Fees of Indeval . Volaris shall pay the fees generated by the deposit and administration of the CPOs deposited at Indeval.
THIRTEENTH . Amendments . This CPO Deed may only be amended with the prior approval of the CNBV in accordance with the terms of Article 228 o (two hundred twenty eight paragraph o) of the LGTOC.
FOURTEENTH . Term . The term of the CPOs will be the same as the term of the Trust Agreement.
In case of termination of the Trust Agreement and therefore, extinction of the Trust, the Trustee will proceed in accordance with clause Sixteenth of the Trust Agreement.
FIFTHTEENTH . Notices . Under the terms of Article 228 m (two hundred twenty eight paragraph m) of LGTOC, the Trustee and the underwriters placing among Foreign Investors the CPOs, initially and in any subsequent placement shall insert in the notices or respective advertising the information indicated in such number.
SIXTEENTH. Submission . For the specific purposes of this Issuance, the persons acquiring CPOs after the Issuance will be subject to the provisions of this CPO Deed and the Trust Agreement.
Similarly, foreign legal entities, foreign individuals, foreign economic units without legal personality, Mexican entities with mostly foreign capital participation and immigrants linked with any foreign economic decision-making center, by the mere fact of the acquisition and possession of CPOs shall be considered as Mexican nationals with respect to the CPOs that they acquire and which they hold, and they agree that by acquiring and holding the same, they will not invoke the protection of their governments, or will be penalized by giving title to the CPOs at issue to the Mexican Nation
SEVENTEENTH . Applicable Law and Jurisdiction . For the interpretation, execution and enforcement of this CPO Deed, the LGTOC, the laws and the banking securities and commercial practices of Mexico will be applicable; therefore, the parties
 
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and the Holders of the CPOs hereto irrevocably submit to the jurisdiction of the courts located in Mexico City, Federal District, with respect to any claim or action arising from this Agreement and hereby waives any other jurisdiction to which they may be entitled by virtue of their present or future domicile, or for any other reason.
EIGHTEENTH . Additional Provisions .
Any matter not specifically provided for in this CPO Deed shall be governed by the provisions of the Trust Agreement and the applicable law.
 
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Exhibit 4.5

 
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.
AND
THE BANK OF NEW YORK MELLON
As Depositary
AND
OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES
Deposit Agreement
Dated as of             , 2013

 

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS	  	 	1	  	
SECTION 1.01	 	American Depositary Shares.	  	 	1	  	
SECTION 1.02	 	Business Day.	  	 	2	  	
SECTION 1.03	 	Commission.	  	 	2	  	
SECTION 1.04	 	Common Representative.	  	 	2	  	
SECTION 1.05	 	Company.	  	 	2	  	
SECTION 1.06	 	CPOs.	  	 	2	  	
SECTION 1.07	 	CPO Trust; CPO Trust Agreement.	  	 	3	  	
SECTION 1.08	 	CPO Trustee.	  	 	3	  	
SECTION 1.09	 	Custodian.	  	 	3	  	
SECTION 1.10	 	Deliver; Surrender.	  	 	3	  	
SECTION 1.11	 	Deposit Agreement.	  	 	4	  	
SECTION 1.12	 	Depositary; Corporate Trust Office.	  	 	4	  	
SECTION 1.13	 	Deposited Securities.	  	 	4	  	
SECTION 1.14	 	Dollars.	  	 	4	  	
SECTION 1.15	 	DTC.	  	 	4	  	
SECTION 1.16	 	Foreign Registrar.	  	 	4	  	
SECTION 1.17	 	Holder.	  	 	4	  	
SECTION 1.18	 	Indeval.	  	 	5	  	
SECTION 1.19	 	Owner.	  	 	5	  	
SECTION 1.20	 	Receipts.	  	 	5	  	
SECTION 1.21	 	Registrar.	  	 	5	  	
SECTION 1.22	 	Restricted Securities.	  	 	5	  	
SECTION 1.23	 	Securities Act of 1933.	  	 	6	  	
SECTION 1.24	 	Shares.	  	 	6	  	
		
ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES	  	 	6	  	
SECTION 2.01	 	Form of Receipts; Registration and Transferability of American Depositary Shares.	  	 	6	  	
SECTION 2.02	 	Deposit of CPOs.	  	 	7	  	
SECTION 2.03	 	Delivery of American Depositary Shares.	  	 	8	  	
SECTION 2.04	 	Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.	  	 	9	  	
SECTION 2.05	 	Surrender of American Depositary Shares and Withdrawal of Deposited Securities.	  	 	10	  	
SECTION 2.06	 	Limitations on Delivery, Transfer and Surrender of American Depositary Shares.	  	 	10	  	
 
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SECTION 2.07	 	Lost Receipts, etc.	  	 	11	  	
SECTION 2.08	 	Cancellation and Destruction of Surrendered Receipts.	  	 	12	  	
SECTION 2.09	 	Pre-Release of American Depositary Shares.	  	 	12	  	
SECTION 2.10	 	DTC Direct Registration System and Profile Modification System.	  	 	12	  	
		
ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES	  	 	13	  	
SECTION 3.01	 	Filing Proofs, Certificates and Other Information.	  	 	13	  	
SECTION 3.02	 	Liability of Owner for Taxes.	  	 	14	  	
SECTION 3.03	 	Warranties on Deposit of CPOs.	  	 	14	  	
SECTION 3.04	 	Disclosure of Interests.	  	 	14	  	
		
ARTICLE 4. THE DEPOSITED SECURITIES	  	 	15	  	
SECTION 4.01	 	Cash Distributions.	  	 	15	  	
SECTION 4.02	 	Distributions Other Than Cash, CPOs or Rights.	  	 	15	  	
SECTION 4.03	 	Distributions in CPOs.	  	 	16	  	
SECTION 4.04	 	Rights.	  	 	16	  	
SECTION 4.05	 	Conversion of Foreign Currency.	  	 	18	  	
SECTION 4.06	 	Fixing of Record Date.	  	 	19	  	
SECTION 4.07	 	Voting of Deposited Securities.	  	 	19	  	
SECTION 4.08	 	Changes Affecting Deposited Securities Redemption of Deposited Securities.	  	 	20	  	
SECTION 4.09	 	Reports.	  	 	21	  	
SECTION 4.10	 	Lists of Owners.	  	 	21	  	
SECTION 4.11	 	Withholding.	  	 	22	  	
		
ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY	  	 	22	  	
SECTION 5.01	 	Maintenance of Office and Transfer Books by the Depositary.	  	 	22	  	
SECTION 5.02	 	Prevention or Delay in Performance by the Depositary or the Company.	  	 	23	  	
SECTION 5.03	 	Obligations of the Depositary, the Custodian and the Company.	  	 	23	  	
SECTION 5.04	 	Resignation and Removal of the Depositary.	  	 	24	  	
SECTION 5.05	 	The Custodians.	  	 	25	  	
SECTION 5.06	 	Notices and Reports.	  	 	26	  	
SECTION 5.07	 	Distribution of Additional CPOs, Rights, etc.	  	 	26	  	
SECTION 5.08	 	Indemnification.	  	 	27	  	
SECTION 5.09	 	Charges of Depositary.	  	 	28	  	
 
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SECTION 5.10	 	Retention of Depositary Documents.	  	 	29	  	
SECTION 5.11	 	Exclusivity.	  	 	29	  	
SECTION 5.12	 	List of Restricted Securities Owners.	  	 	29	  	
		
ARTICLE 6. AMENDMENT AND TERMINATION	  	 	29	  	
SECTION 6.01	 	Amendment.	  	 	29	  	
SECTION 6.02	 	Termination.	  	 	30	  	
		
ARTICLE 7. MISCELLANEOUS	  	 	31	  	
SECTION 7.01	 	Counterparts.	  	 	31	  	
SECTION 7.02	 	No Third Party Beneficiaries.	  	 	31	  	
SECTION 7.03	 	Severability.	  	 	31	  	
SECTION 7.04	 	Owners and Holders as Parties; Binding Effect.	  	 	32	  	
SECTION 7.05	 	Notices.	  	 	32	  	
SECTION 7.06	 	Submission to Jurisdiction; Appointment of Agent for Service of Process; Jury Trial Waiver.	  	 	33	  	
SECTION 7.07	 	Waiver of Immunities.	  	 	33	  	
SECTION 7.08	 	Governing Law.	  	 	34	  	
 
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DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of             , 2013 among CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V., a variable capital public stock corporation ( sociedad anónima bursátil de capital variable ) incorporated under the laws of the United Mexican States (herein called the “Company”), THE BANK OF NEW YORK MELLON, a New York banking corporation (herein called the “Depositary”), and all Owners and Holders (each as hereinafter defined) from time to time of American Depositary Shares issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of CPOs (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Deposit Agreement, for the creation of American Depositary Shares representing the CPOs so deposited and for the execution and delivery of American Depositary Receipts evidencing the American Depositary Shares; and
WHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as follows:
ARTICLE 1. DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:
SECTION 1.01 American Depositary Shares.
The term “American Depositary Shares” shall mean the securities created under this Deposit Agreement representing rights with respect to the Deposited Securities. American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to both certificated and uncertificated American Depositary Shares. Each American Depositary Share shall represent the
 
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number of CPOs specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional American Depositary Shares are not delivered, and thereafter American Depositary Shares shall represent the amount of CPOs or Deposited Securities specified in such Sections.
SECTION 1.02 Business Day.
The term “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.
SECTION 1.03 Commission.
The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.
SECTION 1.04 Common Representative.
The term “Common Representative” shall mean Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, as common representative of holders of CPOs, or any other Mexican banking institution appointed by the CPO holders as their common representative in accordance with the Mexican Law of Negotiable Instruments.
SECTION 1.05 Company.
The term “Company” shall mean Controladora Vuela Compañía de Aviación, S.A.B. de C.V., a company incorporated under the laws of the United Mexican States, and its successors.
SECTION 1.06 CPOs.
The term “CPOs” shall mean the certificados de participacion ordinarios issued under the CPO Trust Agreement representing financial interests, but no voting rights, in Shares that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the CPO Trust; provided , however , that, if there shall occur any change in or reclassification of the CPOs or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the CPOs, the term “CPOs” shall thereafter also mean the successor securities resulting from such change, reclassification exchange or conversion. Each CPO represents a financial interest, but no voting rights, in one Share.
 
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SECTION 1.07 CPO Trust; CPO Trust Agreement.
The term “CPO Trust” shall mean the Mexican trust resulting from the Trust Agreement dated                      (as that agreement may be amended, the “CPO Trust Agreement”) between the Company, as grantor, and the CPO Trustee.
SECTION 1.08 CPO Trustee.
The term “CPO Trustee” shall mean Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, as trustee for the CPO Trust, or its successor as such trustee.
SECTION 1.09 Custodian.
The term “Custodian” shall mean the principal Mexico City office of Banco Inbursa, S.A., as agent of the Depositary for the purposes of this Deposit Agreement, and any other firm or corporation which may hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian or custodians hereunder, as the context shall require and shall also mean all of them collectively.
SECTION 1.10 Deliver; Surrender.
(a) The term “deliver”, or its noun form, when used with respect to CPOs or other Deposited Securities, shall mean (i) book-entry transfer of those CPOs or other Deposited Securities to an account maintained by an institution authorized under applicable law to effect transfers of such securities designated by the person entitled to that delivery or (ii) physical transfer of certificates evidencing those CPOs or other Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments of transfer to, the person entitled to that delivery.
(b) The term “deliver”, or its noun form, when used with respect to American Depositary Shares, shall mean (i) book-entry transfer of American Depositary Shares to an account at DTC designated by the person entitled to such delivery, evidencing American Depositary Shares registered in the name requested by that person, (ii) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (iii) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts.
(c) The term “surrender”, when used with respect to American Depositary Shares, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (ii) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (iii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.
 
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SECTION 1.11 Deposit Agreement.
The term “Deposit Agreement” shall mean this Deposit Agreement, as the same may be amended from time to time in accordance with the provisions hereof.
SECTION 1.12 Depositary; Corporate Trust Office.
The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Deposit Agreement is 101 Barclay Street, New York, New York 10286.
SECTION 1.13 Deposited Securities.
The term “Deposited Securities” as of any time shall mean CPOs at such time deposited or deemed to be deposited under this Deposit Agreement, including without limitation CPOs that have not been successfully delivered upon surrender of American Depositary Shares, and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held under this Deposit Agreement, subject as to cash to the provisions of Section 4.05.
SECTION 1.14 Dollars.
The term “Dollars” shall mean United States dollars.
SECTION 1.15 DTC.
The term “DTC” shall mean The Depository Trust Company or its successor.
SECTION 1.16 Foreign Registrar.
The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the CPOs or any successor as registrar for the CPOs and any other agent of the Company for the transfer and registration of CPOs, including without limitation any securities depository for the CPOs.
SECTION 1.17 Holder.
The term “Holder” shall mean any person holding a Receipt or a security entitlement or other interest in American Depositary Shares, whether for its own account or for the account of another person, but that is not the Owner of that Receipt or those American Depositary Shares.
 
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SECTION 1.18 Indeval.
The term “Indeval” shall mean S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V., the Mexican securities depository institution, and any successor which performs substantially the same functions in Mexico.
SECTION 1.19 Owner.
The term “Owner” shall mean the person in whose name American Depositary Shares are registered on the books of the Depositary maintained for such purpose.
SECTION 1.20 Receipts.
The term “Receipts” shall mean the American Depositary Receipts issued hereunder evidencing certificated American Depositary Shares, as the same may be amended from time to time in accordance with the provisions hereof.
SECTION 1.21 Registrar.
The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, that is appointed by the Depositary to register American Depositary Shares and transfers of American Depositary Shares as herein provided.
SECTION 1.22 Restricted Securities.
The term “Restricted Securities” shall mean Shares or CPOs, or American Depositary Shares representing Shares or CPOs, that are acquired directly or indirectly from the Company or its affiliates (as defined in Rule 144 under the Securities Act of 1933) in a transaction or chain of transactions not involving any public offering, or that are subject to resale limitations under Regulation D under the Securities Act of 1933 or both, or which are held by an officer, director (or persons performing similar functions) or other affiliate of the Company, or that would require registration under the Securities Act of 1933 in connection with the offer and sale thereof in the United States, or that are subject to other restrictions on sale or deposit under the laws of the United States or Mexico, or under a shareholder agreement or the articles of association or similar document of the Company.
 
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SECTION 1.23 Securities Act of 1933.
The term “Securities Act of 1933” shall mean the United States Securities Act of 1933, as from time to time amended.
SECTION 1.24 Shares.
The term “Shares” shall mean Series A shares of the Company that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the Company; provided , however , that, if there shall occur any change in nominal value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Share, the term “Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.
ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES
SECTION 2.01 Form of Receipts; Registration and Transferability of American Depositary Shares.
Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or a Registrar. The Depositary shall maintain books on which (x) each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered and (y) all American Depositary Shares delivered as hereinafter provided and all registrations of transfer of American Depositary Shares shall be registered. A Receipt bearing the facsimile signature of a person that was at any time a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary, notwithstanding that such person was not a proper officer of the Depositary on the date of issuance of that Receipt.
The Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulations thereunder or with the rules and regulations of any securities exchange upon which American Depositary Shares may be listed or to conform
 
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with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.
American Depositary Shares evidenced by a Receipt, when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under this Deposit Agreement to any Holder of American Depositary Shares (but only to the Owner of those American Depositary Shares).
SECTION 2.02 Deposit of CPOs.
Subject to the terms and conditions of this Deposit Agreement, CPOs may be deposited by delivery thereof to any Custodian hereunder, accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form reasonably satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in such order, the number of American Depositary Shares representing such deposit.
No CPO shall be accepted for deposit unless accompanied by evidence reasonably satisfactory to the Depositary that any necessary approval has been granted by any governmental body in Mexico that is then performing the function of the regulation of currency exchange, if applicable. If required by the Depositary, CPOs presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend in respect of such CPOs, or right to subscribe for additional CPOs or to receive other property which any person in whose name the CPOs are or have been recorded may thereafter receive upon or in respect of such deposited CPOs, or in lieu thereof, such agreement of indemnity or other agreement as shall be reasonably satisfactory to the Depositary.
The Depositary may refuse to accept for deposit any CPOs that the Depositary believes to be Restricted Securities. The Depositary may, but is not obligated to, require an opinion of recognized counsel in the United States upon which the Depositary may rely, in determining whether or not any CPOs are Restricted Securities.
 
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The Depositary will comply with reasonable written instructions of the Company not to accept for deposit hereunder any CPOs identified in such instructions at such times and under such circumstances as may be specified in such instructions in order to facilitate the Company’s compliance with U.S. securities laws.
At the request and risk and expense of any person proposing to deposit CPOs, and for the account of such person, the Depositary may receive certificates for CPOs to be deposited, together with the other instruments herein specified, for the purpose of forwarding such CPO certificates to the Custodian for deposit hereunder.
Upon each delivery to a Custodian of a certificate or certificates for CPOs to be deposited hereunder, together with the other documents specified above, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the CPOs being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.
Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.
SECTION 2.03 Delivery of American Depositary Shares.
Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder, together with the other documents required as specified above, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order American Depositary Shares are deliverable in respect thereof and the number of American Depositary Shares to be so delivered. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee). Upon receiving such notice from such Custodian, or upon the receipt of CPOs or evidence of the right to receive CPOs by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall deliver, to or upon the order of the person or persons entitled thereto, the number of American Depositary Shares issuable in respect of that deposit, but only upon payment to the Depositary of the fees and expenses of the Depositary for the delivery of such American Depositary Shares as provided in Section 5.09, and, if applicable, of all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the Deposited Securities.
 
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SECTION 2.04 Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of American Depositary Shares on its transfer books from time to time, upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall deliver those American Depositary Shares to or upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and deliver to the Owner the same number of certificated American Depositary Shares.
The Depositary may, upon at least 20 days’ prior notice to the Company, appoint one or more co-transfer agents for the purpose of effecting registration of transfers of American Depositary Shares and combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. The Depositary shall require each Registrar, co-registrar and co-transfer agent that it appoints to accept that appointment in writing and agree to be bound by the applicable terms of this Deposit Agreement. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the Depositary.
 
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SECTION 2.05 Surrender of American Depositary Shares and Withdrawal of Deposited Securities.
Upon surrender at the Corporate Trust Office of the Depositary of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Such delivery shall be made, as hereinafter provided, without unreasonable delay.
A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank. The Depositary may require the surrendering Owner to execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order. Thereupon the Depositary shall direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American Depositary Shares, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by those American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
At the request, risk and expense of any Owner so surrendering American Depositary Shares, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates, if applicable, and other proper documents of title for, the Deposited Securities represented by the surrendered American Depositary Shares to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.
SECTION 2.06 Limitations on Delivery, Transfer and Surrender of American Depositary Shares.
As a condition precedent to the delivery, registration of transfer or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may
 
10

require payment from the depositor of CPOs or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to CPOs being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof reasonably satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.
The delivery of American Depositary Shares against deposit of CPOs generally or against deposit of particular CPOs may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or any securities exchange on which the American Depositary Shares or CPOs are listed, or under any provision of this Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Notwithstanding anything to the contrary in this Deposit Agreement, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of CPOs in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any CPOs which would be required to be registered under the provisions of the Securities Act of 1933 for public offer and sale in the United States unless a registration statement is in effect as to such CPOs for such offer and sale.
SECTION 2.07 Lost Receipts, etc.
In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form or, if requested by the Owner, execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt, upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall deliver American Depositary Shares in uncertificated form or execute and deliver a new Receipt, in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.
 
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SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled.
SECTION 2.09 Pre-Release of American Depositary Shares.
Notwithstanding Section 2.03 hereof, unless requested in writing by the Company to cease doing so, the Depositary may deliver American Depositary Shares prior to the receipt of CPOs pursuant to Section 2.02 (a “Pre-Release”). The Depositary may, pursuant to Section 2.05, deliver CPOs upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of CPOs in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom American Depositary Shares or CPOs are to be delivered, that such person, or its customer, (i) owns the CPOs or American Depositary Shares to be remitted, as the case may be, (ii) transfers all beneficial right, title and interest in such CPOs or American Depositary Shares, as the case may be, to the Depositary in its capacity as such and for the benefit of the Owners, and (iii) will not take any action with respect to such CPOs or American Depositary Shares, as the case may be, that is inconsistent with the transfer of ownership (including, without the consent of the Depositary, disposing of CPOs or American Depositary Shares, as the case may be, other than in satisfaction of such Pre-Release), (b) at all times fully collateralized with cash or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) Business Days’ notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of CPOs represented by American Depositary Shares that are outstanding at any time as a result of Pre-Release will not normally exceed thirty percent (30%) of the CPOs deposited hereunder; provided , however , that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with the foregoing.
SECTION 2.10 DTC Direct Registration System and Profile Modification System.
(a) Notwithstanding the provisions of Section 2.04, the parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon
 
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acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.
(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.
ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES
SECTION 3.01 Filing Proofs, Certificates and Other Information.
Any person presenting CPOs for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. Upon the reasonable written request of the Company, at the Company’s expense, the Depositary shall provide the Company, as promptly as practicable, with copies of any such proofs or citizenship or residence, or exchange control approval which it receives, to the extent that disclosure is permitted under applicable law.
 
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SECTION 3.02 Liability of Owner for Taxes.
If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner of such American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner thereof any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner of such American Depositary Shares shall remain liable for any deficiency.
SECTION 3.03 Warranties on Deposit of CPOs.
Every person depositing CPOs under this Deposit Agreement shall be deemed thereby to represent and warrant that such CPOs and the Shares represented thereby, and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding CPOs or Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such CPOs and the sale of American Depositary Shares representing such CPOs by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of CPOs and delivery of American Depositary Shares.
SECTION 3.04 Disclosure of Interests.
To the extent that provisions or terms of or laws or regulations governing any Deposited Securities (including, in the case of CPOs, the Shares underlying such CPOs) may require the disclosure of beneficial or other ownership of Deposited Securities, other CPOs and other securities to the Company or the CPO Trustee and provide for blocking of Owners’ transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply with reasonable and practicable instructions of the Company as to American Depositary Shares in respect of any such enforcement or limitation. Owners shall comply with all such disclosure requirements and shall cooperate with the Depositary’s compliance with such instructions and by their holding of American Depositary Shares are deemed to consent to any such limitation or blocking of rights.
 
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ARTICLE 4. THE DEPOSITED SECURITIES
SECTION 4.01 Cash Distributions.
Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, as promptly as practicable, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided , however , that in the event that the Custodian or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owner of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in Mexico all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.
SECTION 4.02 Distributions Other Than Cash, CPOs or Rights.
Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act of 1933 in order to be distributed to Owners or Holders) the Depositary deems such distribution not to be feasible, the Depositary may, after consulting with the Company to the extent practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in
 
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the manner and subject to the conditions described in Section 4.01. The Depositary may withhold any distribution of securities under this Section 4.02 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Section 4.02 that is sufficient to pay its fees and expenses in respect of that distribution.
SECTION 4.03 Distributions in CPOs.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, CPOs, the Depositary may deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, an aggregate number of American Depositary Shares representing the amount of CPOs received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of CPOs and issuance of American Depositary Shares, including withholding of any tax or governmental charge as provided in Section 4.11 and payment of the fees and expenses of the Depositary as provided in Section 5.09 (and the Depositary may sell, by public or private sale, an amount of the CPOs received sufficient to pay its fees and expenses in respect of that distribution). The Depositary may withhold any such delivery of American Depositary Shares if it has not received reasonably satisfactory assurances from the Company that such distribution does not require registration under the Securities Act of 1933. In lieu of delivering fractional American Depositary Shares in any such case, the Depositary may sell the amount of CPOs represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional CPOs distributed upon the Deposited Securities represented thereby.
SECTION 4.04 Rights.
In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional CPOs or Shares that may be delivered in the form of CPOs or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its discretion that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.
 
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In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.
If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the CPOs to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the CPOs, and the Company shall cause the CPOs so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the CPOs so purchased to be deposited pursuant to Section 2.02, and shall, pursuant to Section 2.03, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Section, such deposit shall be made, and depositary shares shall be delivered, under depositary arrangements which provide for issuance of depositary shares subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.
If the Depositary determines in its discretion that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.
The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under
 
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the provisions of such Act; provided , that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.
The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.
Any distribution of net proceeds to the Owners under this Section 4.04 shall be made to the Owners entitled thereto in the manner and subject to the conditions set forth in Section 4.01.
SECTION 4.05 Conversion of Foreign Currency.
Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, as promptly as possible, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall, as promptly as practicable file, or cause to be filed, such application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the
 
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Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.
SECTION 4.06 Fixing of Record Date.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of CPOs or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of CPOs that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee or charge assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of CPOs. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively and to give voting instructions and to act in respect of any other such matter.
SECTION 4.07 Voting of Deposited Securities.
Upon receipt of notice of any meeting of holders of CPOs or other Deposited Securities (including any meeting of holders of Shares with respect to which holders of Deposited Securities will be entitled to vote or give voting instructions), if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Mexican law, the articles of association or similar documents of the Company and the instrument pursuant to which CPOs shall have been
 
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issued, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of CPOs or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner of American Depositary Shares on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted, or give or cause to be given voting instruction with respect to, the amount of CPOs or other Deposited Securities represented by those American Depositary Shares in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to, or give voting instructions with respect to, the CPOs or other Deposited Securities, other than in accordance with such instructions.
There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction cutoff date to ensure that the Depositary will vote or give voting instructions with respect to the CPOs or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.
In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under this Section 4.07, the Company shall give the Depositary notice of any such meeting and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.
SECTION 4.08 Changes Affecting Deposited Securities Redemption of Deposited Securities.
Upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional American Depositary Shares are delivered pursuant to the following sentence. In any such case the Depositary may deliver additional American Depositary Shares as in the case of a dividend in CPOs, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.
If the Depositary receives a notice that Deposited Securities or securities underlying Deposited Securities have been or are to be redeemed for cash or otherwise
 
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purchased for cash and Deposited Securities registered in the name of the Custodian are called for redemption in a transaction that will be mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary shall (i) give a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that, upon that Redemption, the called American Depositary Shares will convert into a right only to receive the money or other property received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.05 or 6.02, (ii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date and (iii) distribute the money or other property received upon the Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.05 (and, for the avoidance of doubt, Owners shall not be entitled to receive that money or other property under Section 4.01 or 4.02). If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner.
SECTION 4.09 Reports.
The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports and communications, including any proxy solicitation material, received from the Company, the Common Representative or the CPO Trustee which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company, the Common Representative or the CPO Trustee. The Depositary shall also, upon written request by the Company, send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.
SECTION 4.10 Lists of Owners.
Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names American Depositary Shares are registered on the books of the Depositary.
 
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SECTION 4.11 Withholding.
In the event that the Depositary determines that any distribution in property (including CPOs and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including CPOs and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.
The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.
ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY
SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.
Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain in the Borough of Manhattan, The City of New York, facilities for the execution and delivery, registration, registration of transfers and surrender of American Depositary Shares in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books, at its Corporate Trust Office, for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.
The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder.
If any American Depositary Shares are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such American Depositary Shares in accordance with any requirements of such exchange or exchanges.
 
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The Company shall have the right to inspect transfer and registration records of the Depositary relating to the American Depositary Shares at any reasonable time, to take copies thereof and to require the Depositary, the Registrar and any co-transfer agents or co-registrars to supply, at the Company’s expense, copies of such portions of such records as the Company may reasonably request in writing.
SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder (i) if by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the articles of association or similar document of the Company or the CPO Trust Agreement, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or the Deposited Securities it is provided shall be done or performed, (ii) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (iii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iv) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Holders, or (v) for any special, consequential or punitive damages for any breach of the terms of this Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.
SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.
The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.
 
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The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares on behalf of any Owner or Holder or any other person.
Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting CPOs for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information.
The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.
The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise.
The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.
No disclaimer of liability under the Securities Act of 1933 is intended by any provision of this Deposit Agreement.
SECTION 5.04 Resignation and Removal of the Depositary.
The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by 120 days prior written notice of such removal, to become effective upon the later of (i) the 120th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.
 
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In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor and shall deliver to such successor a list of the Owners of all outstanding American Depositary Shares. Any such successor depositary shall promptly mail notice of its appointment to the Owners.
Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.
SECTION 5.05 The Custodians.
The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. Any Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. If upon such resignation there shall be no Custodian acting hereunder, the Depositary shall, promptly after receiving such notice, appoint a substitute custodian or custodians, each of which shall thereafter be a Custodian hereunder. The Depositary in its discretion may appoint a substitute or additional custodian or custodians, each of which shall thereafter be one of the Custodians hereunder. The Depositary shall notify the Company of the appointment of the substitute or additional Custodian at least 20 days prior to the date on which such appointment is to become effective, if practicable. Upon demand of the Depositary any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian or such substitute or additional custodian or custodians. Each such substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary. The Depositary shall give the Company notice of any change in Custodian as promptly as practicable.
Upon the appointment of any successor depositary hereunder, each Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such
 
25

successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority as agent hereunder of such successor depositary.
SECTION 5.06 Notices and Reports.
On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of CPOs or other Deposited Securities or Shares, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in the form given or to be given to holders of CPOs or other Deposited Securities or Shares.
The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company, the Common Representative or the CPO Trustee to holders of its CPOs. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.
SECTION 5.07 Distribution of Additional CPOs, Rights, etc.
If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional CPOs or Shares, (2) rights to subscribe for CPOs or Shares, (3) securities convertible into CPOs or Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act of 1933 in effect that will cover that Distribution. In the event such registration under the Securities Act of 1933 would be required in connection with any such Distribution, the Company will have no obligation to effect such registration.
 
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The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any CPOs, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such CPOs under the Securities Act of 1933 or the Company delivers to the Depositary an opinion of United States counsel, reasonably satisfactory to the Depositary, to the effect that, upon deposit, those CPOs will be eligible for public resale without restriction in the United States without further registration under the Securities Act of 1933.
SECTION 5.08 Indemnification.
The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any fees and expenses incurred in seeking, enforcing or collecting such indemnity and the reasonable fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof in the United States or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit Agreement and the American Depositary Shares, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except (A) for any liability or expense arising out of the negligence or bad faith of either of them or (B) to the extent that such liability or expense arises out of information relating to the Depositary or the Custodian, as applicable, furnished in writing to the Company by the Depositary expressly for use in any registration statement, proxy statements, prospectus (or placement memorandum) or preliminary prospectus (or preliminary placement memorandum) relating to the American Depositary Shares or the Deposited Securities represented thereby or omissions from such information, if provided (it being acknowledged by the Company that the Depositary has not furnished any information of that kind as of the date of this Deposit Agreement), or (ii) by the Company or any of its directors, employees, agents and affiliates or the CPO Trustee.
The indemnities contained in the preceding paragraph shall not extend to any liability or expense which arises solely and exclusively out of a Pre-Release (as defined in Section 2.09) of American Depositary Shares in accordance with Section 2.09 and which would not otherwise have arisen had such American Depositary Shares not been the subject of a Pre-Release pursuant to Section 2.09; provided , however , that the indemnities provided in the preceding paragraph shall apply to any such liability or expense (i) to the extent that such liability or expense would have arisen had American Depositary Shares not be the subject of a Pre-Release, or (ii) which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of American Depositary Shares, except to the extent any such liability or expense arises out
 
27

of (i) information relating to the Depositary or any Custodian (other than the Company), as applicable, furnished in writing and not materially changed or altered by the Company expressly for use in any of the foregoing documents (it being acknowledged by the Company that, as of the date of this Deposit Agreement, the Depositary has not furnished any information of that kind) or (ii) if such information is provided, the failure to state a material fact necessary to make the information provided not misleading.
The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.
SECTION 5.09 Charges of Depositary.
The Company agrees to pay the fees and out-of-pocket expenses of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time.
The following charges shall be incurred by any party depositing or withdrawing CPOs or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.03), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of CPOs generally on the CPO register of the Company or Foreign Registrar and applicable to transfers of CPOs to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 and the surrender of American Depositary Shares pursuant to Section 2.05 or 6.02, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04 hereof, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were CPOs) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under clause 6, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided
 
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in clause 9 below, and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of CPOs or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be payable at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).
The Depositary may collect any of its fees by deduction from any cash distribution payable to Owners that are obligated to pay those fees.
The Depositary, subject to Section 2.09 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.
SECTION 5.10 Retention of Depositary Documents.
The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company requests that such papers be retained for a longer period or turned over to the Company or to a successor depositary.
SECTION 5.11 Exclusivity.
The Company agrees not to appoint any other depositary for issuance of American or global depositary shares or receipts so long as The Bank of New York Mellon is acting as Depositary hereunder.
SECTION 5.12 List of Restricted Securities Owners.
From time to time, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update that list as changes occur. The Company agrees to advise in writing each of the persons or entities so listed that such Restricted Securities are ineligible for deposit hereunder. The Depositary may rely on such a list or update but shall not be liable for any action or omission made in reliance thereon.
ARTICLE 6. AMENDMENT AND TERMINATION
SECTION 6.01 Amendment.
The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect which they
 
29

may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.
SECTION 6.02 Termination.
The Company may at any time terminate this Deposit Agreement by instructing the Depositary to mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date included in such notice. The Depositary may likewise terminate this Deposit Agreement if at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and if a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04; in such case the Depositary shall mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date. This Deposit Agreement will automatically terminate on the date of termination of the CPO Trust (as of the date of this Deposit Agreement the CPO Trust was scheduled to terminate fifty years after the date of execution of the CPO Trust Agreement). The Company will notify the Depositary at least 40 days prior to termination of the CPO Trust and, upon receipt of that notice, the Depositary shall notify the Owners of the termination date. On and after the date of termination, the Owner of American Depositary Shares will, upon (a) surrender of such American Depositary Shares, (b) payment of the fee of the Depositary for the surrender of American Depositary Shares referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by those American Depositary Shares. If any American Depositary Shares shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of American Depositary Shares, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, upon surrender of American
 
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Depositary Shares (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges).
At any time after the expiration of four months from the date of termination, the Depositary may sell the Deposited Securities then held under this Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds; provided , however , that in the case of termination of this Deposit Agreement in connection with termination of the CPO Trust, the Depositary shall use reasonable efforts to sell the Deposited Securities as soon as practicable after that termination. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.
ARTICLE 7. MISCELLANEOUS
SECTION 7.01 Counterparts.
This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Holder during business hours.
SECTION 7.02 No Third Party Beneficiaries.
This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.
SECTION 7.03 Severability.
In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
 
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SECTION 7.04 Owners and Holders as Parties; Binding Effect.
The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of American Depositary Shares or any interest therein.
SECTION 7.05 Notices.
Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., Av. Antonio Dovani Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fee, D.F. 01210, Mexico, Attention: Jaime Pous, General Counsel, or any other place to which the Company may have transferred its principal office with notice to the Depositary.
Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.
Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for American Depositary Shares of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.
 
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SECTION 7.06 Submission to Jurisdiction; Appointment of Agent for Service of Process; Jury Trial Waiver.
Each of the parties hereto hereby consents and submits to the jurisdiction of any state or federal court in the State of New York in which any suit or proceeding arising out of or relating to the CPOs or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement may be instituted. The Company hereby (i) irrevocably designates and appoints CT Corporation System, 111 Eighth Avenue, New York, New York 10011, in the State of New York, as the Company’s authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the CPOs or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement and (ii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of this Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or this Deposit Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.
EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THIS DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 7.07 Waiver of Immunities.
To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or
 
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proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the CPOs or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.
SECTION 7.08 Governing Law.
This Deposit Agreement and the Receipts shall be interpreted and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by the laws of the State of New York, except with respect to its authorization and execution by the Company, which shall be governed by the laws of Mexico.
 
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IN WITNESS WHEREOF, CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any interest therein.

CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
THE BANK OF NEW YORK MELLON,
as Depositary	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
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EXHIBIT A

	  	AMERICAN DEPOSITARY SHARES
(Each American Depositary Share represents
ten deposited CPOs)	
THE BANK OF NEW YORK MELLON
AMERICAN DEPOSITARY RECEIPT
FOR CERTIFICADOS DE PARTICIPACION ORDINARIOS
REPRESENTING FINANCIAL INERESTS, BUT NO VOTING RIGHTS, IN
SERIES A SHARES
OF
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.
(INCORPORATED UNDER THE LAWS OF THE UNITED MEXICAN STATES)
The Bank of New York Mellon, as depositary (hereinafter called the “Depositary”), hereby certifies that                                         , or registered assigns IS THE OWNER OF                                         
AMERICAN DEPOSITARY SHARES
representing deposited c ertificados de participacion ordinarios (herein called “CPOs”) representing financial interests, but no voting rights, in deposited Series A shares (herein called “Shares”) of Controladora Vuela Compañía de Aviación, S.A.B. de C.V., a variable capital public stock corporation ( sociedad anónima bursátil de capital variable ) incorporated under the laws of the United Mexican States (herein called the “Company”). At the date hereof, each American Depositary Share represents ten CPOs deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at the principal Mexico City office of Banco Inbursa, S.A. (herein called the “Custodian”) and each CPO represents financial interests in one Share. The Depositary’s Corporate Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office is located at 101 Barclay Street, New York, N.Y. 10286, and its principal executive office is located at One Wall Street, New York, N.Y. 10286.
THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286
 
1.	THE DEPOSIT AGREEMENT .	
This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued upon the terms and conditions set forth in the deposit
 
1

agreement dated as of                     , 2013 (herein called the “Deposit Agreement”) among the Company, the Depositary and all Owners and Holders from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Holders and the rights and duties of the Depositary in respect of the CPOs deposited thereunder and any and all other securities, property and cash from time to time received in respect of such CPOs and held thereunder (such CPOs, securities, property, and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.
2. SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF DEPOSITED SECURITIES .
Upon surrender at the Corporate Trust Office of the Depositary of American Depositary Shares, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Shares is entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for CPOs or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.
 
3.	TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS .	
Transfers of American Depositary Shares may be registered on the books of the Depositary by the Owner in person or by a duly authorized attorney, upon surrender of those American Depositary Shares properly endorsed for transfer or accompanied by proper instruments of transfer, in the case of a Receipt, or pursuant to a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit Agreement), in the case of uncertificated American Depositary Shares, and funds sufficient to pay any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. The Depositary, upon surrender of certificated American Depositary Shares
 
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for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel those certificated American Depositary Shares and send the Owner a statement confirming that the Owner is the Owner of uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares and deliver to the Owner the same number of certificated American Depositary Shares. As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the CPOs or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to CPOs being deposited or withdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement.
The delivery of American Depositary Shares against deposit of CPOs generally or against deposit of particular CPOs may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Notwithstanding anything to the contrary in the Deposit Agreement or this Receipt, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of CPOs in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement any CPOs which would be required to be registered under the provisions of the Securities Act of 1933, unless a registration statement is in effect as to such CPOs for such offer and sale.
 
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4.	LIABILITY OF OWNER FOR TAXES .	
If any tax or other governmental charge shall become payable with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner shall remain liable for any deficiency.
 
5.	WARRANTIES ON DEPOSIT OF SHARES .	
Every person depositing CPOs under the Deposit Agreement shall be deemed thereby to represent and warrant, that such CPOs and the Shares represented thereby, and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding CPOs or Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such CPOs and the sale of American Depositary Shares representing such CPOs by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of CPOs and delivery of American Depositary Shares.
 
6.	FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION .	
Any person presenting CPOs for deposit or any Owner or Holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of any American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. No CPO shall be accepted for deposit unless accompanied by evidence reasonably satisfactory to the Depositary that any necessary approval has been granted by any governmental body in Mexico that is then performing the function of the regulation of currency exchange. The Depositary may refuse to accept for deposit any CPOs that the Depositary believes to be Restricted Securities. The Depositary may, but is not obligated to, require an opinion of recognized counsel in the United States upon which the Depositary may rely, in determining whether or not any CPOs are Restricted Securities. The Depositary will comply with reasonable written instructions of the Company not to accept for deposit hereunder any CPOs
 
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identified in such instructions at such times and under such circumstances as may be specified in such instructions in order to facilitate the Company’s compliance with U.S. securities laws. Upon the reasonable written request of the Company, the Depositary shall provide the Company, as promptly as practicable, with copies of any such proofs or citizenship or residence, or exchange control approval which it receives, to the extent that disclosure is permitted under applicable law.
 
7.	CHARGES OF DEPOSITARY .	
The following charges shall be incurred by any party depositing or withdrawing CPOs or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of CPOs generally on the CPO register of the Company or Foreign Registrar and applicable to transfers of CPOs to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of American Depositary Shares pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.05 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were CPOs) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under clause 6, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in clause 9 below, and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of CPOs or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be payable at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).
 
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The Depositary may collect any of its fees by deduction from any cash distribution payable to Owners that are obligated to pay those fees.
The Depositary, subject to Article 8 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.
From time to time, the Depositary may make payments to the Company to reimburse and / or share revenue from the fees collected from Owners or Holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the American Depositary Shares program. In performing its duties under the Deposit Agreement, the Depositary may use brokers, dealers or other service providers that are affiliates of the Depositary and that may earn or share fees or commissions.
 
8.	PRE-RELEASE OF RECEIPTS .	
Notwithstanding Section 2.03 of the Deposit Agreement, unless requested in writing by the Company to cease doing so, the Depositary may deliver American Depositary Shares prior to the receipt of CPOs pursuant to Section 2.02 of the Deposit Agreement (a “Pre-Release”). The Depositary may, pursuant to Section 2.05 of the Deposit Agreement, deliver CPOs upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of CPOs in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom American Depositary Shares or CPOs are to be delivered, that such person, or its customer, (i) owns the CPOs or American Depositary Shares to be remitted, as the case may be, (ii) transfers all beneficial right, title and interest in such CPOs or American Depositary Shares, as the case may be, to the Depositary in its capacity as such and for the benefit of the Owners, and (iii) will not take any action with respect to such CPOs or American Depositary Shares, as the case may be, that is inconsistent with the transfer of ownership (including, without the consent of the Depositary, disposing of CPOs or American Depositary Shares, as the case may be, other than in satisfaction of such Pre-Release), (b) at all times fully collateralized with cash or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) Business Days’ notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of American Depositary Shares that are outstanding at any time as a result of Pre-Release will not normally exceed thirty percent (30%) of the CPOs deposited under the Deposit Agreement; provided , however , that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with the foregoing.
 
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9.	TITLE TO RECEIPTS .	
It is a condition of this Receipt and every successive Owner and Holder of this Receipt by accepting or holding the same consents and agrees that when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of the State of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under the Deposit Agreement to any Holder of American Depositary Shares unless that Holder is the Owner of those American Depositary Shares.
 
10.	VALIDITY OF RECEIPT .	
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual signature of a duly authorized signatory of the Depositary; provided , however that such signature may be a facsimile if a Registrar for the Receipts shall have been appointed and such Receipts are countersigned by the manual signature of a duly authorized officer of the Registrar.
 
11.	REPORTS; INSPECTION OF TRANSFER BOOKS .	
The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and, accordingly, files reports with the Commission. Those reports will be available for inspection and copying through the Commission’s EDGAR system on the Internet at www.sec.gov or at public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington, D.C. 20549.
The Depositary will make available for inspection by Owners at its Corporate Trust Office any reports, notices and other communications, including any proxy soliciting material, received from the Company, the Common Representative or the CPO Trustee that are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company, the Common Representative or the CPO Trustee. The Depositary will also, upon written request by the Company, send to Owners copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.
 
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The Depositary will keep books, at its Corporate Trust Office, for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the American Depositary Shares.
 
12.	DIVIDENDS AND DISTRIBUTIONS .	
Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, as promptly as practicable if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States, and subject to the Deposit Agreement, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) to the Owners entitled thereto; provided , however , that in the event that the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly.
Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided , however , that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, after consulting with the Company to the extent practicable, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may withhold any distribution of securities under Section 4.02 of the Deposit Agreement if it has not received reasonably satisfactory assurances from the Company that the distribution does not require registration under the Securities Act of 1933. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Article that is sufficient to pay its fees and expenses in respect of that distribution.
 
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If any distribution consists of a dividend in, or free distribution of, CPOs, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary Shares representing the amount of CPOs received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of CPOs and issuance of American Depositary Shares, including withholding of any tax or governmental charge as provided in Section 4.11 of the Deposit Agreement and payment of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of CPOs received sufficient to pay its fees and expenses in respect of that distribution). The Depositary may withhold any such delivery of American Depositary Shares if it has not received reasonably satisfactory assurances from the Company that such distribution does not require registration under the Securities Act of 1933. In lieu of delivering fractional American Depositary Shares in any such case, the Depositary may sell the amount of CPOs represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional CPOs distributed upon the Deposited Securities represented thereby.
In the event that the Depositary determines that any distribution in property (including CPOs and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including CPOs and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.
 
13.	RIGHTS .	
In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional CPOs (or Shares that maybe delivered in the form of CPOs) or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its discretion that it is lawful and feasible to make such rights
 
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available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.
In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner under the Deposit Agreement, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.
If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the CPOs to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the CPOs, and the Company shall cause the CPOs so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the CPOs so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Article 13, such deposit shall be made, and depositary shares shall be delivered, under depositary arrangements which provide for issuance of depositary shares subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.
If the Depositary determines in its discretion that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.
 
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The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.
The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.
 
14.	CONVERSION OF FOREIGN CURRENCY .	
Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, as promptly as possible, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall, as promptly as practicable file, or cause to be filed, such application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may
 
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distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.
 
15.	RECORD DATES .	
Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of CPOs or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of CPOs that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of CPOs, subject to the provisions of the Deposit Agreement.
 
16.	VOTING OF DEPOSITED SECURITIES .	
Upon receipt of notice of any meeting of holders of CPOs or other Deposited Securities (including any meeting of holders of Shares with respect to which holders of Deposited Securities will be entitled to vote or give voting instructions), if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners of Receipts a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of law and of the articles of association or similar documents of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of CPOs or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner of American Depositary Shares on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable to vote
 
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or cause to be voted, or give or cause to be given voting instructions with respect to, the amount of CPOs or other Deposited Securities represented by those American Depositary Shares in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to, or give voting instructions with respect to, the CPOs or other Deposited Securities, other than in accordance with such instructions.
There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction date to ensure that the Depositary will vote the CPOs or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.
In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under Section 4.07 of the Deposit Agreement, the Company shall give the Depositary notice of any such meeting or solicitation and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.
17. CHANGES AFFECTING DEPOSITED SECURITIES REDEMPTION OF DEPOSITED SECURITIES .
Upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may deliver additional American Depositary Shares as in the case of a dividend in CPOs, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.
If the Depositary receives a notice that Deposited Securities or securities underlying Deposited Securities have been or are to be redeemed for cash or otherwise purchased for cash and Deposited Securities registered in the name of the Custodian are called for redemption in a transaction that will be mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary shall (i) give a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that, upon that Redemption, the called American Depositary Shares will convert into a right only to receive the money or other property received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which
 
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Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.05 or 6.02 of the Deposit Agreement, (ii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date and (iii) distribute the money or other property received upon the Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.05 of that Agreement (and, for the avoidance of doubt, Owners shall not be entitled to receive that money or other property under Section 4.01 or 4.02) of that Agreement. If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner.
 
18.	LIABILITY OF THE COMPANY AND DEPOSITARY .	
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder, (i) if by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority, or by reason of any provision, present or future, of the articles of association or any similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or Deposited Securities it is provided shall be done or performed, (ii) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (iii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iv) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Holders, or (v) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, or for any other reason, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary shall not make such distribution or offering, and shall allow
 
14

any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner or Holder or other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting CPOs for deposit, any Owner or Holder, or any other person believed by it in good faith to be competent to give such advice or information. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions of any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.
No disclaimer of liability under the Securities Act of 1933 is intended by any provision of the Deposit Agreement.
 
19.	RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN .	
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 120 days prior written notice of such removal, to become effective upon the later of (i) the 120th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary in its discretion may appoint a substitute or additional custodian or custodians.
 
20.	AMENDMENT .	
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Holders in any respect which they may
 
15

deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and Holder of American Depositary Shares, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.
 
21.	TERMINATION OF DEPOSIT AGREEMENT .	
The Company may terminate the Deposit Agreement by instructing the Depositary to mail notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date included in such notice. The Depositary may likewise terminate the Deposit Agreement, if at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and if a successor depositary shall not have been appointed and accepted its appointment as provided in the Deposit Agreement; in such case the Depositary shall mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date. . The Deposit Agreement will automatically terminate on the date of termination of the CPO Trust (as of the date of the Deposit Agreement the CPO Trust was scheduled to terminate fifty years after the date of execution of the CPO Trust Agreement). The Company will notify the Depositary at least 40 days prior to termination of the CPO Trust and, upon receipt of that notice, the Depositary shall notify the Owners of the termination date. On and after the date of termination, the Owner of American Depositary Shares will, upon (a) surrender of such American Depositary Shares, (b) payment of the fee of the Depositary for the surrender of American Depositary Shares referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by those American Depositary Shares. If any American Depositary Shares shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of American Depositary Shares, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, upon
 
16

surrender of American Depositary Shares (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). At any time after the expiration of four months from the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. However , in the case of termination of the Deposit Agreement in connection with termination of the CPO Trust, the Depositary shall use reasonable efforts to sell the Deposited Securities as soon as practicable after that termination. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.
 
22.	DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM .	
(a) Notwithstanding the provisions of Section 2.04 of the Deposit Agreement, the parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.
(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting registration of transfer and delivery described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding
 
17

any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement, shall not constitute negligence or bad faith on the part of the Depositary.
 
23.	DISCLOSURE OF INTERESTS .	
To the extent that provisions or terms of or laws or regulations governing any Deposited Securities (including, in the case of CPOs, the Shares underlying such CPOs) may require the disclosure of beneficial or other ownership of Deposited Securities, other CPOs and other securities to the Company or the CPO Trustee and provide for blocking of Owners’ transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply with reasonable and practicable instructions of the Company as to the American Depositary Shares in respect of any such enforcement or limitation. Owners shall comply with all such disclosure requirements and shall cooperate with the Depositary’s compliance with such instructions and by their holding of American Depositary Shares are deemed to consent to any such limitation or blocking of rights.
 
24.	SUBMISSION TO JURISDICTION; JURY TRIAL WAIVER; WAIVER OF IMMUNITIES .	
In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 111 Eighth Avenue, New York, New York 10011, in the State of New York, as the Company’s authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the CPOs or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) together with the Depositary, consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.
EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) THEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
 
18

To the extent that the Company or any of its properties, assets or revenues may have or hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the CPOs or Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.
 
25.	DESCRIPTION OF CPOs .	
The issuance of CPOs, as neutral investment instruments, from the perspective of applicable Mexican foreign investment laws has been authorized by the General Directorate of Foreign Investments ( Dirreción General de Inversiones Extranjeras ). The National Banking and Securities Commission of Mexico ( Comisión Nacional Bancaria y de Valores ) has acknowledged the issuance of CPOs by the CPO Trustee. Registration of the Shares underlying the CPOs upon their issuance in the National Registry of Securities and Intermediaries ( Registrio Nacional de Valores e Intermediarios ) has been approved by the National Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores ). Nacional Financiera, S.N.C. is the CPO Trustee of the CPO Trust. The CPO Trust operates through Indeval, the central depository for participants trading on the Mexican Securities Exchange, which maintains ownership records of the CPOs in book-entry form. The principal executive office of the CPO Trustee is located as of the date of the Deposit Agreement at: Insurgentes Sur 1971, Col. Guadalupe Inn, C.P. 01020, México D.F., México. An English translation of the CPO Trust Agreement has been filed with the Commission as an exhibit to the Registration Statement on Form F-6 for the American Depositary Shares. The terms of the CPO Trust (As in effect as of the date of the Deposit Agreement) are briefly described as follows (which description may not be considered to be a representation or warranty by the Company, the Depositary, or any Custodian and is qualified by and subject to the terms of the CPO Trust Agreement): (i) each CPO represents financial interests, but no voting rights, in one (1) Share held in the CPO Trust; (ii) The CPOs have no voting rights with respect to the underlying Shares; the CPO Trustee will vote all those Shares in the same manner as the majority of Shares that are not held in the CPO Trust are voted at the relevant shareholders’ meeting; (iii) dividends on the Shares underlying the CPOs are credited to the CPO holders’ accounts by the CPO Trustee through Indeval, upon receipt thereof from the Company; (iv) as
 
19

determined by the CPO Trustee, CPO holders may receive reports and other shareholder communications at the same time as direct holders of Shares receive such materials, (v) any rights pertaining to the CPOs may be exercised by CPO holders through the CPO Trustee; (vi) any securities resulting from dividends, splits or plans of reorganization are distributed by CPO holders through Indeval and the CPO Trustee, at the same time as direct holders of Shares receive any such rights; (vii) the CPO Trust is scheduled to terminate fifty years after the date of execution of the CPO Trust Agreement, at which time the Depositary will take the actions contemplated in Section 6.02 of the Deposit Agreement, unless otherwise extended by the Company and the Depositary; and (viii) holders of CPOs are entitled to withdraw Shares from the CPO Trust if they are Mexican nationals or Mexican corporations whose by-laws exclude foreign ownership of their shares. No fees or charges are imposed directly or indirectly against CPO holders under the CPO Trust.
 
20

Exhibit 5.1
June 20, 2013
Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
Av. Antonio Dovalí Jaime No. 70
Torre B
Piso 13
Colonia Zedec Santa Fe
Delegación Alvaro Obregón
01210 México, Distrito Federal
México
Ladies and Gentlemen:
We are acting as special Mexican counsel to Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (the “ Company ”), in connection with the offering by the Company and certain selling shareholders of American Depositary Shares (“ ADSs ”), evidenced by American Depositary Receipts, each ADS having ten (10) ordinary participation certificates ( certificados de participación ordinarios ; “ CPOs ”) as underlying securities, and each CPO evidencing economic interests, but granting no voting rights, in one series A share of the Company (together, the “ Series A Shares ”), under the registration statement, as amended, on Form F-1, provided to us and as filed by the Company with the United States Securities and Exchange Commission (the “ Registration Statement ”), pursuant to the United States Securities Act of 1933, as amended (the “ Securities Act ”).
In rendering the opinion expressed below, we have examined copies of (i) the Company’s combined articles of incorporation and by-laws ( estatutos sociales ) in effect on the date hereof, (ii) the Registration Statement, (iii) a draft of the trust agreement (the “ CPO Trust Agreement ”) to be entered into between Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, Direccion Fiduciaria, as trustee (the “ Trustee ”), and the Company, and (iv) a draft of the deed ( acta de emisión ; the “ CPO Deed ”), to be granted by the Trustee and acknowledged by Banco Invex, S.A., Institucion de Banca Multiple, Invex Grupo Financiero, as common representative of the holders of CPOs, and the Mexican National Banking and Securities Commission, and (v) such documents and corporate records of the Company and the Trustee and such other instruments and other certificates of officers and representatives of the Company and the Trustee, and such other persons, and have made investigations of laws, as we have deemed relevant or appropriate in connection with the giving of this opinion.
We have assumed, without any independent investigation or verification of any kind, (i) the genuineness of all signatures and the
 
1

authenticity of all opinions, documents and papers submitted to us, and (ii) that copies of all opinions, documents and papers submitted to us are complete and conform to the originals thereof.
As to questions of fact material to the opinion hereinafter expressed, we have, when relevant facts were not independently established by us, relied upon originals or copies, certified or otherwise identified to our satisfaction, of all such corporate records of the Company and the Trustee, and such other instruments or certificates of public officials, officers and representatives of the Company and the Trustee, and such other persons as we have deemed necessary or appropriate for the opinion expressed below.
Based upon the foregoing and subject to the qualifications set forth below, we are of the opinion that:
1. All the outstanding Series A Shares of the Company have been duly authorized and validly issued, and such Series A Shares are fully paid and non-assessable, other than the Series A Shares, underlying CPOs, and underlying ADSs, that are the subject of a public offering being proposed by the Company and the aforementioned selling shareholders (the “ Offering ”).
2. The CPOs that may be sold, directly or as securities underlying ADSs, pursuant to the Offering, upon execution of the CPO Trust Agreement and the CPO Deed substantially in the form of the drafts reviewed, will have been validly issued in accordance with the terms of the CPO Trust Agreement and the CPO Deed, and the holders thereof will be entitled to the rights specified in the CPO Trust Agreement and the CPO Deed.
We are qualified to practice law in Mexico. We express no opinion as to any laws other than the laws of Mexico or as to any matters not expressly covered herein.
We consent to (i) the filing of this opinion as an exhibit to the Registration Statement, and (ii) the use of the name of our firm in the Registration Statement, under the captions “Enforcement of Civil Liabilities,” and “Validity of Securities.” In giving this consent we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,	
	
Ritch Mueller, S.C.	
		
By 	 	/s/ LUIS A. NICOLAU	
	 	Luis A. Nicolau, a partner	
 
2

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.01
THIS ENGINE LEASE AGREEMENT is made on      November, 2009
BETWEEN:-
 
(1)	RRPF ENGINE LEASING LIMITED , whose registered office is at 65 Buckingham Gate, London SW1E 6AT, England ( Lessor );	
 
(2)	ROLLS-ROYCE & PARTNERS FINANCE LIMITED , whose registered office is at 65 Buckingham Gate, London SW1E 6AT, England ( RRPF ); and	
 
(3)	CONCESIONARIA VUELA COMPAÑIA DE AVIACIÓN, S.A. de C.V. , whose registered office is located at Prolongacion Paseo de la Reforma, No 490 1er Piso, Colonia Santa Fe, Mexico City, Mexico ( Lessee ).	
This Engine Lease Agreement is executed pursuant to the Master Engine Lease Agreement (the Master Agreement ) dated as of      November, 2009 between Lessor, RRPF and Lessee.
The parties hereto agree that Lessee will take the Engine (defined below) on lease from Lessor pursuant to this Engine Lease Agreement, which incorporates the terms of the Master Agreement, as amended, varied or modified hereby, and together constituting a single contract applicable to the leasing of the Engine and shall hereinafter be referred to as the Lease .
Part 1 - Referenced Provisions.
For purposes of the Master Agreement (“N/A” denotes non-applicability):
Agreed Value means *****;
Assumed LIBOR means ***** per annum; 
Assumed Rent means either (a) *****, if calculating Floating Rent or (b) ***** if calculating Fixed Rent;
Assumed Swap Rate means ***** per annum;
Current Swap Rate means (in percentage terms) the actual five year US$ swap rate published in the Financial Times, as at the date falling 5 Business Days prior to the date on which Fixed Rent is due to become payable;
Delivery Location means:
 
(a)	the Engine Manufacturer’s facility in Connecticut, USA; or	
 
(b)	such other location as Lessor and Lessee may agree in writing;	
Deposit means *****;
Early Termination Date has the meaning given to that term in paragraph (a) of Part 3 of this Engine Lease Agreement;
Early Termination Option has the meaning given to that term in paragraph (a) of Part 3 of this Engine Lease Agreement; 
Engine means:
 
(a)	one International Aero Engines IAE V2527E-A5 engine in bare engine configuration, including transportation stand and MVP bag, having manufacturer’s serial number V13183, together with all Parts installed thereon at Delivery and includes, where the context admits, the Technical Documents; and	
 
(b)	all Parts;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Engine Manufacturer means International Aero Engines AG;
Engine Threshold means *****;
Fixed Rent means the amount calculated in accordance with Clause 6.2(d); 
Floating Rent means the Assumed Rent as adjusted in accordance with Clause 6.2(c); 
Floating Rental Adjustment Factor means the rental adjustment factor appearing adjacent to the relevant Rental Adjustment Date set out below:

Rental Adjustment Date	 	Floating Rental Adjustment Factor	
		
Delivery Date	 	***** x Purchase Price	
		
11 th February 2010	 	***** x Purchase Price	
		
11 th August 2010	 	***** x Purchase Price	
		
11 th February 2011	 	***** x Purchase Price	
		
11 th August 2011	 	***** x Purchase Price	
		
11 th February 2012	 	***** x Purchase Price	
		
11 th August 2012	 	***** x Purchase Price	
		
11 th February 2013	 	***** x Purchase Price	
		
11 th August 2013	 	***** x Purchase Price	
		
11 th February 2014	 	***** x Purchase Price	
		
11 th August 2014	 	***** x Purchase Price	
		
11 th February 2015	 	***** x Purchase Price	
		
11 th August 2015	 	***** x Purchase Price	
		
11 th February 2016	 	***** x Purchase Price	
		
11 th August 2016	 	***** x Purchase Price	
		
11 th February 2017	 	***** x Purchase Price	
Full Engine Refurbishment has the meaning set out in the Annex;
Management Programme means the latest issue of the Maintenance Management Plan for the V2500 – A5 engine agreed between the Engine Manufacturer and Lessee and all service bulletins issued by the Engine Manufacturer with a compliance category of any of 6, 5, 4, 3, 2, or 1; 
Maximum Flight Hours means 3,000 Flight Hours since the Engine’s most recent Qualifying Refurbishment; 
Minimum Cyclic Life means 7,500 Cycles; 
Purchase Price means ***** (or such other amount as may be identified by way of an addendum to this Engine Lease Agreement); 
Qualifying Refurbishment has the meaning set out in the Annex;
Redelivery Location means Miami International Airport, United States of America or such other location as Lessor and Lessee may agree in writing;
Release Form  means an EASA Form 1 or FAA Form 8130 (or the equivalent);
Relevant Documents means the Lease, the Acceptance Certificate, the Maintenance Reserves Letter, any Recognition Agreements or other third party acknowledgments and all notices, consents, certificates and other documents to be issued or to be issued pursuant to any of the foregoing, in anyway related to the Engine and “ Relevant Documents ” means any one of such documents;
Required Liability Amount means ***** (or, in the case of the war risk and allied perils policy only, *****);
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Scheduled Delivery Date means 15 th November 2009 or such other date as may be agreed by the parties in writing;
State of Incorporation in respect of RRPF and Lessor means England and in respect of Lessee means Mexico;
State of Registration means Mexico or, if the Engine is sub-leased under Clause 9.6 of the Master Agreement, such other jurisdiction in which registration of the Aircraft has been effected;
Term Date means 92 months after the Delivery Date or, if Lessee exercises the Early Termination Option, the Early Termination Date; and
Termination Notice has the meaning given to that term in paragraph (a) of Part 3 of this Engine Lease Agreement.
Part 2 – Engine Specific Maintenance and Redelivery Obligations.
Lessee will not allow any Life Limited Parts to remain in the Engine upon release from a Qualifying Refurbishment or Full Engine Refurbishment which has less than 10,000 Cycles remaining or such other limit as may be subsequently published in the then current issue of the time limits manual issued by the Engine Manufacturer.
Part 3 – Modifications
For the purposes of the leasing of the Engine pursuant to the Lease, the following modifications to the Master Agreement shall apply:
 
(a)	Early Termination Option	
Lessor grants Lessee the option to terminate the Lease Period on any date falling no earlier than 68 months after the Delivery Date as notified by Lessee to Lessor (the Early Termination Date ) (the Early Termination Option ). The Early Termination Option is subject to:
 
 	(i)	Lessee providing Lessor notice in writing of its intention to exercise the Early Termination Option not later than 9 months before the Early Termination Date (which notice shall be irrevocable) (the Termination Notice );	
 
 	(i)	Lessee redelivering the Engine to Lessor on the Early Termination Date and in accordance with Clause 18 of the Master Agreement;	
 
 	(iii)	Lessor not having terminated the Lease Period in accordance with Clause 16.2 of the Master Agreement on or before the Early Termination Date; and	
 
 	(iv)	no Default continuing under the Lease on the date of the Termination Notice or on the Early Termination Date.	
 
(b)	Rent	
 
 	(a)	The definition of “Daily Rate” in Schedule 8 is deleted and replaced with the following:	
“means (i) if Lessee has elected to pay Floating Rent, the Floating Rent divided by 30; or (ii) if Lessee has elected to pay Fixed Rent, the Fixed Rent divided by 30;”

 	(b)	Clause 6.3 is deleted and replaced with the following:	
 
 	“(a)	Lessee may elect, by providing irrevocable written notice to Lessor no later than 3 Business Days before the Scheduled Delivery Date, to pay Fixed Rent for the duration of the Lease Period. If Lessee fails to make an election in accordance with the Lease, Lessee will pay Floating Rent.	
 
 	(b)	Lessee will pay to Lessor, or to its order, on each Rent Date throughout the Lease Period, an instalment of Rent in advance (i) equal to the Floating Rent or the Fixed Rent (as applicable); or (ii) calculated in accordance with Clause 6.2(f).	
 
 	(c)	Unless Lessee elects to pay Fixed Rent, on each Rental Adjustment Date, the applicable Assumed Rent shall be adjusted by the addition (if positive) or the subtraction (if negative) of the following calculation:	
((Actual LIBOR – Assumed LIBOR) x 100) x the applicable Floating Rental Adjustment Factor.
 
 	(d)	If Lessee elects to pay Fixed Rent, the Fixed Rent shall be calculated by adjusting the applicable Assumed Rent by the addition (if positive) or the subtraction (if negative) of the following calculation:	
((Current Swap Rate – Assumed Swap Rate) x 100) x (0.000667 x the Purchase Price).
Lessor will notify Lessee no later than two Business Days prior to the Scheduled Delivery Date of the amount of Fixed Rent payable.
 
 	(e)	Unless Lessee has elected to pay Fixed Rent, Lessor will notify Lessee no later than two Business Days prior to each Rental Adjustment Date of the amount of Floating Rent payable on each Rent Date for the period commencing on such Rental Adjustment Date until the next Rental Adjustment Date.	
 
 	(f)	The instalment of Rent payable on the Delivery Date (or, if required in accordance with Clause 5.1(c), the Scheduled Delivery Date) will be payable in advance on the Delivery Date (or, if applicable, the Scheduled Delivery Date) and will be equal to the Daily Rate multiplied by the number of days in the period from the Delivery Date (or, if applicable, the Scheduled Delivery Date) to the day immediately preceding the second Rent Date. The instalment of Rent due for the period starting on the last Rent Date shall be payable in advance on that Rent Date and will be equal to the Daily Rate multiplied by the number of days in the period from that Rent Date to the Term Date.”	
 
(c)	Lease Letter of Credit	
In lieu of the payment by Lessee of the Deposit in cash, Lessee may provide Lessor with a Lease Letter of Credit in the amount of the Deposit in accordance with Clause 6.2 of the Master Agreement.

Part 4 - Execution
IN WITNESS WHEREOF each of the parties has executed this Engine Lease Agreement on the date stated above.

RRPF	  		  		  		  		
			
RRPF ENGINE LEASING LIMITED	  		  	ROLLS-ROYCE & PARTNERS FINANCE LIMITED	
					
BY:	  	/s/ Christopher Jackson	  		  	BY:	  	/s/ Christopher Jackson	
					
NAME:	  	Christopher Jackson	  		  	NAME:	  	Christopher Jackson	
					
TITLE:	  	Attorney-In-Fact	  		  	TITLE:	  	Attorney-In-Fact	

LESSEE	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	
		
BY:	 	/s/ Alfonso Ascencio Triujeque	
		
NAME:	 	Alfonso Ascencio Triujeque	
		
TITLE:	 	General Counsel	

ANNEX
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Exhibit 10.02
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Execution Form

ENGINE LEASE AGREEMENT (MSN V12671)

Dated as of 28 June, 2007
between
Celestial Aviation Trading 50 Limited
as Lessor
And
Concesionaria Vuela Compania de Aviacion, S.A. de C.V.
as Lessee
in respect of one IAE V2527M-A5 Engine
Serial No: V12671

incorporating the provisions of an
ENGINE LEASE
COMMON TERMS AGREEMENT
Dated the same date as this Engine Lease Agreement

TO THE EXTENT THAT THIS ENGINE LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS ENGINE LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY GE COMMERCIAL AVIATION SERVICES LIMITED.
 
ENGINE LEASE AGREEMENT   

ENGINE LEASE AGREEMENT (MSN V12671)
THIS ENGINE LEASE AGREEMENT is made on      June, 2007,
BETWEEN:
(1) CELESTIAL AVIATION TRADING 50 LIMITED , a company incorporated under the Laws of Ireland, having its principal place of business and registered office at Aviation House, Shannon, County Clare, Ireland (“ Lessor ”); and
(2) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a sociedad anonima de capital variable organized under the Laws of Mexico, having its principal place of business and chief executive office at Prolongacion Paseo De La Reforma No. 490, Piso 1 (Edificio GE), Col. Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F. 01012 Mexico (“ Lessee ”).
WHEREAS :
 
(A)	Lessor as buyer wishes to purchase the Engine (as defined below) from Lessee as seller and Lessee as seller wishes to sell the Engine to Lessee as buyer, on the terms and subject to the conditions provided in the Engine Purchase Agreement (as defined below);	
 
(B)	Lessee wishes to lease the Engine (as defined below) from Lessor, and Lessor wishes to lease the Engine to Lessee, on the terms and subject to the conditions provided herein;	
 
(C)	GE Commercial Aviation Services Limited and Lessee have entered into the CTA (as defined below) in respect of commercial aircraft engines and related equipment that may be leased from time to time by Lessee from Lessor; and	
 
(D)	Lessor and Lessee wish to incorporate by reference such CTA into this Engine Lease Agreement.	
IT IS AGREED as follows:
 
1.	INTERPRETATION	
 
1.1	Definitions; Interpretation . Unless otherwise defined herein, words and expressions defined in the CTA have the same respective meanings for the purposes of this Engine Lease Agreement. The construction provisions of Section 1.2 of the CTA shall apply to this Engine Lease Agreement. In this Engine Lease Agreement, the following capitalized words and expressions shall have the following meanings:	
Agreed Value shall have the meaning specified in Schedule B, Part 1 hereto.
Annual Supplemental Rent Adjustment and Assumed Ratio have the meanings specified in Schedule B hereto .
CTA means the Engine Lease Common Terms Agreement, dated as of the same date as this Engine Lease Agreement executed by Lessor and Lessee (as in effect on the date hereof without, unless Lessor and Lessee otherwise expressly agree, giving any effect to any subsequent amendment, supplement, waiver or other modification thereto), and which forms part of this Engine Lease Agreement.
Damage Notification Threshold shall have the meaning specified in Schedule B, Part I hereto.
Deductible Amount shall have the meaning specified in Schedule B, Part I hereto.
 
ENGINE LEASE AGREEMENT 2

Delivery Condition Requirements means the requirements specified in Part II of Schedule A hereto.
Delivery Location means the State of Delaware, United States of America , or such other location as Lessor and Lessee shall agree, as evidenced in the Certificate of Acceptance.
Deposit means all amounts payable pursuant to Section 3.1 (Deposit) hereof.
Discount Rate shall have the meaning specified in Schedule B, Part II hereto.
Engine means whether or not installed on any airframe, each engine of the manufacturer and model specified in Part I of Schedule A which Lessor tenders to Lessee on the Delivery Date, together in each case with the LRU, accessories and the Engine Documents and Records as described in Part I of Schedule A hereto and tendered for Delivery by Lessor to Lessee relating to such Engine and otherwise subject to the terms and conditions of this Lease. The term “ Engine ” includes, as of any date of determination, all the foregoing equipment then leased hereunder and includes all modules and other Parts from time to time belonging to or installed in that Engine.
Engine Cycles Restriction shall have the meaning specified in Schedule B, Part VI hereto.
Engine Flight Hours Restriction shall have the meaning specified in Schedule B, Part VI hereto.
Engine LLP Supplemental Rent is defined in Schedule B hereto.
Engine Purchase Agreement means the engine purchase agreement dated the same date as this Engine Lease Agreement entered into by Lessee as seller and Lessor as buyer in respect of the Engine.
Engine Supplemental Rent is defined in Schedule B hereto.
Final Delivery Date means December 31, 2007.
Indemnitee means each of Lessor, Owner, General Electric Capital Corporation and GECAS and their respective successors and permitted assigns, and each of their respective shareholders, subsidiaries, affiliates, partners, contractors, directors, officers, representatives, agents and employees.
Interest Rate is defined in Schedule B, Part II hereto.
Lease means and includes this Engine Lease Agreement, Schedules A and B and the Common Terms Agreement.
Lessor’s Account is defined in Section 3.3 herein.
LRU means line replaceable units.
Manufacturer means the manufacturer of the Engine or any separate item of equipment, as the case may be, as set forth on Schedule A hereto.
Minimum Component Calendar Life is defined in Schedule B, Part IV.
Minimum Engine Cycles is defined in Schedule B, Part VI.
Minimum Engine Flight Hours is defined in Schedule B, Part VI.
 
ENGINE LEASE AGREEMENT 3

Minimum Liability Coverage is defined in Schedule B, Part I.
Modification Approval Amount is defined in Schedule B, Part
Owner means Lessor.
Pre-Approved Bank means any bank organized under the laws of the United States or any State thereof, or the New York branch of a major international bank, in each case (a) for only so long as its long-term Dollar denominated unsecured debt (or if it does not have long-term unsecured Dollar denominated debt, its parent corporation’s long-term unsecured Dollar denominated debt) carries a rating from S&P of A+ or better, and (b) so long as each Letter of Credit issued by any such bank to Lessor permits drawings thereunder by facsimile.
Pre-Approved Sub-Lessee means any of the following operators: TACA International Airlines, S.A.
Redelivery Location means the GE On-Wing Support at London Heathrow, or at Lessee’s option, a storage location of Lessor in the continental United States that is acceptable to Lessor.
Related Airframe means the airframe operated by Lessee bearing the Manufacturer’s Serial Number as notified by Lessee to Lessor in the Recognition of Rights Agreement or the Technical Report.
Related Airframe Type means an Airbus A319 on which the Engine may be installed.
Rent is defined in Schedule B, Part II.
Rent Commencement Date means the date on which Lessor tenders the Engine under Section 4.3.(a) (Delivery and Acceptance) of the CTA and the Lessee Conditions Precedent are met or could reasonably be expected to be met if the Delivery of the Engine had occurred.
Scheduled Delivery Date means 29 th  June, 2007.
Scheduled Delivery Month means June, 2007.
Scheduled Expiry Date means the date falling sixty eight months (68) after the Rent Commencement Date (or in the event that such date is a day that is not a Business Day, the immediately preceding Business Day), which date shall be specifically set forth in the Certificate of Acceptance.
Spares Deductible Amount is defined in Schedule B, Part I.
Tax Indemnitee means each of Owner, Lessor, and each member of the consolidated group of which Lessor and Owner is a member for United States Federal income tax purposes, and their successors and permitted assigns.
 
2.	LEASING	
 
2.1	Term . Subject to the terms and conditions of the Lease, Lessor will lease the Engine to Lessee and Lessee will take delivery of and lease the Engine from Lessor in accordance with the Lease for the duration of the Term. Lessee shall evidence such Delivery and acceptance by executing and delivering a Certificate of Acceptance as provided in Clause 4.3 of the Common Terms Agreement.	
 
ENGINE LEASE AGREEMENT 4

3.	PAYMENTS	
 
3.1	Deposit; Rent; Supplemental Rent; Lessee shall pay to Lessor the Deposit, Rent and Supplemental Rent as provided in the CTA and as set forth in Schedule B, Part II (Deposit), Part III (Rent) and Part V (Supplemental Rent), respectively.	
 
3.2	Lessor’s Maintenance Contribution : Lessor shall pay to Lessee Lessor’s Maintenance Contribution in accordance with Section 7.2 of the CTA.	
 
3.3	Lessor’s Bank Account: For the purposes of Section 5.5 (Payments) of the CTA, Lessor’s bank account and wire transfer particulars, to which all payments to Lessor shall be made by Lessee, are at the date hereof (“Lessor’s Account”):	

Transfer to:	  	*****	
ABA No:	  	*****	
SWIFT Code:	  	*****	
		
For Account Of: *****	  		
SWIFT Code:	  	*****	
*****	  		
For Credit To:	  	*****	
Account No:	  	*****	
 
3.4	Subpart F Benefits : The provisions of Schedule B, Part IV shall apply under this Lease.	
 
4.	CONDITION OF THE ENGINE AT DELIVERY	
On the Delivery Date, as a condition to Lessee’s obligation to accept delivery thereof, the Engine shall be in the condition provided in Part II of Schedule A hereto. Lessor shall coordinate with Lessee, in anticipation of delivery of the Engine, in the exercise of Lessor’s inspection rights under the purchase agreement relating to the Engine.
 
5.	CONDITION OF THE EQUIPMENT AT REDELIVERY	
On the Return Occasion, Lessee shall redeliver the Engine to Lessor at the location specified in the CTA and at such redelivery the Engine shall be in the condition provided in the CTA, including Part 2 of Schedule 6 (Procedure and Operating Condition at Redelivery) , the CTA.
 
6.	NAMEPLATE INSCRIPTION	
Lessee shall install a Nameplate on the Engine to read:
“THIS ENGINE IS OWNED BY CELESTIAL AVIATION TRADING 50 LIMITED, AS OWNER, AND IS LEASED TO CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. AND MAY NOT BE OPERATED BY ANY OTHER PERSON WITHOUT THE CONSENT OF OWNER ”
 
ENGINE LEASE AGREEMENT 5

7.	ADDRESSES FOR NOTICES	
The addresses and facsimile and numbers of Lessor and Lessee are as follows:
Lessor:
c/o: GECAS
Aviation House
Shannon
County Clare
Ireland
Attention: Contracts Leader
Facsimile: + 353 61 706867
Lessee:
Prolongacion Paseo De La Reforma No. 490
Piso 1 (Edificio GE)
Col. Santa Fe Pena Blanca
Del. Alvaro Obregon
Mexico, D.F. 01012 Mexico
Attention: Director Jurídico
Facsimile: + 5255 616460
 
8.	THE SCHEDULES AND COMMON TERMS AGREEMENT	
ALL THE PROVISIONS OF SCHEDULES A AND B HERETO, AND THE CTA, ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS ENGINE LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF LESSOR AND LESSEE ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE ENGINE HEREUNDER IS ON AN “ AS IS , WHERE IS ” BASIS AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, THE SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE CTA ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS ENGINE LEASE AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
 
9.	NO AMENDMENT EXCEPT IN WRITING	
No provision of this Lease, including any provision of Schedule A, Schedule B or the CTA, may be amended, rescinded, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except in writing signed by both parties.
 
ENGINE LEASE AGREEMENT 6

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Engine Lease Agreement, on the date shown at the beginning of this Engine Lease Agreement.

LESSOR:	
	
CELESTIAL AVIATION TRADING 50 LIMITED	
		
By:	 	/s/ Mauricio Fuchs	
		
Name:	 	Mauricio Fuchs	
		
Title:	 	Attorney-in-fact	
	
LESSEE:	
	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
		
By:	 	/s/ Alfonso Ascencio Triujeque	
		
Name:	 	Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
 
ENGINE LEASE AGREEMENT 7

SCHEDULE A
PART I-ENGINE AND RELATED EQUIPMENT DESCRIPTION
ENGINE

Manufacturer:	  	IAE International Aero Engines AG	
		
Model:	  	V2527M-A5	
		
Manufacturer’s Serial Number:	  	V12671 	
		
QEC Manufacturer:	  	N/A 	
		
Nose Cowl Manufacturer:	  	N/A 	
		
Engine Bag:	  	P/No. IAE6R19563	
		
QEC:	  	N/A 	
		
LRU:	  	Reference V12671 VSL	
		
Other Accessories:	  	Reference V12671 VSL	
		
Engine Documents and Records:	  	Listed in Part 1 below.	
The engine serial number stated above is that advised to Lessor by Manufacturer. If Manufacturer advises of any change to any serial number, the new number will be deemed inserted under “Engine Serial Number” above.
ENGINE DOCUMENTS AND RECORDS
 
 	1.	Engine Records	
 
 	•	 	FAA 8130	
 
 	•	 	IAE Certificate of Conformity	
 
 	•	 	IAE VSL Data Report	
 
ENGINE LEASE AGREEMENT 8

PART II-DELIVERY CONDITION REQUIREMENTS
Set forth below is a description of the condition in which the Engine must be in order for Lessee to be obligated to accept the Engine under the Lease. It is solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Engine or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the CTA.
Delivery Condition Requirements:
The Engine shall be new, ex-factory certificated for operation at 27,000 pounds with engine stand, engine cover, LRU, other accessories and Engine Documents and Records as listed herein.
 
ENGINE LEASE AGREEMENT 9

SCHEDULE A
PART III-RETURN CONDITION REQUIREMENTS
In addition to and supplementing Lessee’s obligations set forth in Clause 12 and Schedule 6 of the Common Terms Agreement, Lessee shall redeliver the Engine to Lessor on the Return Occasion meeting the following requirements:
 
(1)	Section 1.3(a) of Schedule 6 to the CTA shall be deleted and replaced with the following:	
“(a) Each Engine Flight Hour and Engine Cycle controlled Hard Time Component shall have not more than the Minimum Hard Time Component Flight Hours and shall have not less than the Minimum Hard Time Component Cycles of life remaining to the next expected Engine Refurbishment based on the Manufacturer’s mean time between removals for such Engine and shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as JAR form 1 or FAA form 8130-1; for this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Maintenance Programme and which can have life fully restored through appropriate maintenance;
 
(2)	Section 1.4(a) of Schedule 6 to the CTA shall be deleted and replaced with the following:	
“(a) have not more than the Minimum Engine Flight Hours life remaining to the next expected removal and each of the LLPs shall have not less than the Minimum Engine Cycles release life remaining. The expected life remaining will be determined by the inspection and checks accomplished by Lessor in accordance with the Lease, including the Manufacturer’s maintenance planning document;”
 
(3)	Section 1.4(g) of Schedule 6 to the CTA shall be deleted and shall be replaced by the following paragraph (g):	
“(g) immediately prior to redelivery, will have the required EGT Margin, the EGT Margin shall be of a level , and the Engine shall otherwise be in a condition, consistent with the EGTM as at last performance restoration minus the expected deterioration for the hours and cycles accrued since the last performance restoration. The Engine will have performance characteristics consistent with engines of a similar age and time since performance restoration in the return condition, and expected EGTM deterioration according to the Manufacturer’s statistics. This, together with other performance characteristics, will be determined by a full performance test run in either (i) a test cell in accordance with the Manufacturer’s procedures or (ii) at Lessor’s option on-wing engine performance run in accordance with Test No. 13 (Task 71-00-00-700-011 of the Aircraft Maintenance Manual) including vibration survey in accordance with Test No. 8 (Task 71-00-00-700-022-A of the Aircraft Maintenance Manual) to successfully demonstrate the take-off power in accordance with the limits shown in Manufacturer’s manual; report 04 (Take Off) should be obtained during acceptance on-wing performance run in order to calculate EGT Margin for the Engine, as per SIL 057 latest revision instructions, and confirmed that it is consistent with the Engine Flight Hours and Engine Cycles operated by the Engine since its last Engine Refurbishment but in any event, no less than 30° C at maximum rated take-off power. After satisfactory completion of the full performance test cell run or on-wing engine performance run (whichever is applicable), the Engine’s fuel and oil systems should be long term preserved for a 365 day period and will have completed a full unrestricted (all-ports) Video/DVD (preferred) borescope inspection, at Lessee’s cost, which will demonstrate compliance with the Manufacturer’s requirements. Lessee will correct, at its cost, any discrepancies found in the test and/or borescope inspections. In correcting any such discrepancies, no deferred items or repetitive inspections will be acceptable upon completion of the required repairs. In all cases, the engine condition monitoring (ECM) data will be available for Lessor’s review, will cover periods of installation sufficient to have initialized a baseline on the trend plot and will exhibit no abnormal trends or acceleration in the deterioration of the performance of the Engine.
 
ENGINE LEASE AGREEMENT 10

SCHEDULE B
COMMERCIAL TERMS
The definitions and other commercial and financial terms set forth in this Schedule B shall apply to the leasing of the Engine under the Lease.
The commercial and financial information contained in this Schedule B are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee shall, and any of their assignees, upon becoming such shall agree that they shall, treat this Schedule B as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sublessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its best reasonable efforts to obtain confidential treatment of this Schedule B and the other party will cooperate in making and supporting any such request for confidential treatment.
PART I PART I-CASUALTY OCCURRENCE DEFINITIONS
Agreed Value ***** , it being agreed, however, that, notwithstanding the foregoing, the Agreed Value shall be ***** on and with effect from each anniversary of the Delivery Date during the Term, provided that during each 12 month period leading up to each such anniversary of the Delivery Date, the Engine shall have been operated for at least 1,000 Engine Flight Hours.
Damage Notification Threshold means *****.
Deductible Amount means *****.
Minimum Liability Coverage means *****, except that for war risk liability purposes, the Minimum Liability Coverage amount shall not be less than *****.
Spares Deductible Amount means *****.
PART II        DEPOSIT; DISCOUNT RATE; LC AMOUNT; INTEREST RATE
Deposit: The amount of the Deposit required by Section 3.1 hereof shall be payable at the following times and in the following amounts. Lessee shall pay Lessor a Deposit in cash in the sum of ***** which shall be payable no later than two (2) Business Days prior to Delivery.
Discount Rate means ***** per annum.
Interest Rate: The Interest Rate shall be the “prime rate” as quoted in the Wall Street Journal from time to time during the applicable period plus ***** per annum, but not to exceed the maximum amount permitted by Law.
 
ENGINE LEASE AGREEMENT 11

PART III        RENT
The Rent payable in respect of each Rental Period during the Term shall be payable in sixty eight (68) consecutive monthly instalments, in advance on each Rent Date.
The Rent payable in respect of the first Rental Period during the Term will be calculated as follows and shall be the same amount for each Rental Period thereafter:
*****
Where:
*****
*****
T means the interest rate (expressed as a number rather than a percentage) in respect of a 5.5 year U.S. dollar fixed interest rate swap as quoted on Bloomberg Page IRSB (on the ask side of the page) and obtained by Lessor on the Quotation Date; provided that if no rate is quoted on such Bloomberg page for the relevant swap then such rate shall be obtained by linear interpolation of the rates (to two decimal places) of the two swap rates having a maturity closest (one longer, one shorter) to 5.5 years on that Bloomberg screen;
*****
Quotation Date means the date falling two Business Days before the Delivery Date.
PART IV        TAX DEFINITIONS; SPECIAL TAX INDEMNITY
Lessor/Owner Tax Jurisdiction means Ireland.
Subpart F Benefits and Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended with respect to income from the Lease nor will the Engine be treated as “United States property” for the purposes of Subpart F of the such Code (“Subpart F Benefits”).
(a) Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:
(i) the Engine will be located outside the United States more than 50 per cent of the time; or
(ii) more than 50 per cent of the miles traversed in the use of the Engine will be traversed outside the United States.
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least 12 hours, is considered to be a flight traversed entirely within the United States.
 
ENGINE LEASE AGREEMENT 12

Lessee will make available to Lessor any records relating to the use and location of the Engine that Lessor may reasonably request to fulfil Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)	(i) Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive the indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within 30 days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
(ii) Lessee’s indemnity obligation in respect of a breach of the covenant contained in paragraph (a) above, shall, subject to Clause 5.10 of the Common Terms Agreement, be the actual amount of Subpart F Benefits lost or disallowed (including any interest, penalties, and additions to tax payable as a result of the breach, reduced, however, by any tax benefits ultimately realized by Lessor or any of the Tax Indemnitees as a result of the loss or disallowance of such Subpart F Benefits, including but not limited to the exclusion of previously taxed income from the income of the Lessor or any of the Tax Indemnitees for United States income tax purposes upon a distribution from Lessor; provided that after taking into account any tax benefits realized by Lessor or other Tax Indemnitees, neither Lessor nor the Tax Indemnitees will be worse off than they would have been had there been no loss or disallowance of the Subpart F Benefits.
PART V        SUPPLEMENTAL RENT
The Supplemental Rent payable will be determined with reference to the following:
Annual Supplemental Rent Adjustment means in the case of: (i) the ***** per annum and (ii) Engine LLP Supplemental Rent, the year on year increase in the total price of the entire LLP stack as determined from OEM IAE2500-A5 LLP catalogue list prices.
Assumed Ratio means a 1.8 hour to one cycle ratio (1.8:1).
Assumed Ratio Adjustment: For the purposes of Section 5.4 (Supplemental Rent) of the CTA, any adjustment from the Assumed Ratio shall be based upon the following table:

Ratio:	  	 	1.2	  	  	 	1.4	  	  	 	1.6	  	  	 	1.8	  	  	 	2.0	  	  	 	2.2	  	  	 	2.4	  	
								
Engine Supplemental	  				  				  				  				  				  				  				
								
Rent Rate:	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Engine LLP Supplemental Rent means in respect of the LLP for each Engine ***** for each Engine Cycle operated by that Engine during that calendar month or any part of such calendar month during the Term.
Engine Supplemental Rent: Notwithstanding the provisions of Section 5.4(a) of the Common Terms Agreement, Lessee shall not be required to pay Engine Supplemental Rent in relation to each calendar month in respect of the leasing of the Engine. Instead, on the Expiry Date, Lessee shall pay Lessor an amount equal to the Engine Supplemental Rent Rate multiplied by the number of Engine Flight Hours operated by the Engine during the Term since new or, if later, since the last Engine Full Performance Restoration Shop Visit. For the avoidance of doubt, paragraphs (b) and (c) of Section 5.4 of the Common Terms Agreement apply to Engine Supplemental Rent payable by Lessee under this Engine Lease Agreement. For the avoidance of doubt, the provisions of Section 7.2(a)(ii)(Engine Refurbishment) of the Common Terms Agreement shall not apply with respect to any Engine Supplemental Rent payments made by Lessee.
 
ENGINE LEASE AGREEMENT 13

Engine Supplemental Rent Rate: means in respect of the Engine, ***** for each Engine Flight Hour (or fraction thereof) operated by that Engine, regardless of whether the Engine is operated at a thrust rating of 24,000 lbs or 27,000 lbs during the Term.

PART VI	 		 	MAINTENANCE AND RETURN CONDITION DEFINITIONS; MAINTENANCE PAYMENTS AT REDELIVERY; AIRWORTHINESS DIRECTIVE SHARING PAYMENTS	
AD Compliance Period means the 180 days following redelivery of the Engine in compliance with Section 12 (Return of Engines) of the CTA.
EGT Margin means the margin which will remain following the Engine Flight Hours and Engine Cycles actually operated by the Engine since the last defined Engine Full Performance Restoration Shop Visit, and established by deduction of the EGT margin consumed from the EGT margin restored at the Engine Full Performance Restoration Shop Visit. The EGT margin consumed since the last Engine Full Performance Shop Visit will be mutually agreed between Lessor and Lessee, but in no event will be greater than the Manufacturer’s data on the expected EGTM deterioration curve and the position of the Engine on the curve at redelivery .
Engine Cycles Restriction means not less than 7,500 Engine Cycles of expected life remaining to its next scheduled removal.
Engine Flight Hours Restriction means no more than 3,000 Engine Flight Hours since the last Engine Full Performance Restoration Shop Visit.
Engine Full Performance Restoration Shop Visit means an Engine Refurbishment that includes the following:
Shop Visit Workscope

Module:	 	Hot Section Refurbishment	
Fan Module	 	L3	
Low Pressure Compressor	 	L2	
Internal Gearbox/Front Bearing Compartment	 	L1	
Fan Case and Fan Frame	 	L2	
High Pressure Compressor Module	 	L2.3 or higher	
Diffuser	 	L2	
Combustor	 	L3	
No. 4 Bearing Compartment	 	L3	
Nozzle Guide Vane Group	 	L3	
High Pressure Turbine Module	 	L3	
Low Pressure Turbine Module	 	L1	
Turbine Exhaust Case	 	L2	
External Gear Box	 	L1	
Minimum Component Calendar Life is not applicable to this Engine Lease Agreement.
Minimum Engine Cycles means not less than 7,500 Engine Cycles of expected life remaining to any LLP replacement.
Minimum Engine Flight Hours means no more than 3,000 Engine Flight Hours since the last Engine Refurbishment consisting of a an Engine Full Performance Restoration Shop Visit.
 
ENGINE LEASE AGREEMENT 14

Minimum Hard Time Component Cycles is not applicable to this Engine Lease Agreement.
Minimum Hard Time Component Flight Hours is not applicable to this Engine Lease Agreement.
Modification Approval Amount means *****.
PART VII        INDEMNITY
Section 10 of the Common Terms Agreement shall, for the purposes of this Engine Lease Agreement only, be amended as follows:
 
(a)	In Section 10(a), the for avoidance of doubt provision in respect of “ownership” shall not prejudice Lessor’s rights as buyer to compensation from Lessee as seller for any losses arising under the Engine Purchase Agreement incurred by Lessor in relation to any defect in its title to the Engine acquired from Lessee as seller;	
 
(b)	Section 10(b)(iv) relating to exclusions from Lessee’s indemnity obligations to the extent that a Loss is caused by an event which occurs before the commencement of the Term, shall not apply to this Engine Lease Agreement since Lessor is acquiring title to the Engine from Lessee as seller pursuant to the terms of the Engine Purchase Agreement.	
 
ENGINE LEASE AGREEMENT 15

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.03
FINAL

Amended and Restated
Component Services and Pooling Agreement
Between
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (VOLARIS)
and
AVEOS FLEET PERFORMANCE INC.

Dated as of February 10 th , 2009
 
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TABLE OF CONTENTS

Cover Page	 		    		  	 	1	  	
Section 1	 	DEFINITIONS AND CONSTRUCTION	  	 	4	  	
	 	1.1  	    	Definitions	  	 	4	  	
	 	1.2  	    	Construction	  	 	8	  	
			
Section 2	 	PROGRAM SERVICES	  	 	8	  	
	 	2.1  	    	Program Services	  	 	8	  	
	 	2.2  	    	In-Scope Services	  	 	8	  	
	 	2.3  	    	INTENTIONALLY LEFT IN BLANK	  	 	9	  	
	 	2.4  	    	Out-of-Scope Services	  	 	9	  	
	 	2.5  	    	Consumables and Expendables Support	  	 	9	  	
	 	2.6  	    	INTENTIONALLY LEFT IN BLANK	  	 	10	  	
	 	2.7  	    	ATEC and Inventory Warehouse in Toluca	  	 	10	  	
	 	2.8  	    	AOG Support	  	 	10	  	
			
Section 3	 	PROGRAM SERVICES SPECIFICATIONS	  	 	10	  	
	 	3.1  	    	Components	  	 	10	  	
	 	3.2  	    	Component / Parts Certification	  	 	10	  	
	 	3.3  	    	AVEOS On-site services representative	  	 	11	  	
	 	3.4  	    	Facilities	  	 	12	  	
	 	3.5  	    	Shipping	  	 	12	  	
	 	3.6  	    	PMA Parts, DERs and engineering support	  	 	13	  	
	 	3.7  	    	BER	  	 	13	  	
	 	3.8  	    	Obsolescence	  	 	13	  	
	 	3.9  	    	Periodic meetings	  	 	13	  	
	 	3.10	    	Reporting and documentation	  	 	13	  	
	 	3.11	    	Changes to Part Number List	  	 	14	  	
	 	3.12	    	Tooling and equipment	  	 	14	  	
	 	3.13	    	New aircraft inductions and removals	  	 	14	  	
	 	3.14	    	Standards	  	 	15	  	
	 	3.15	    	Part Exchange Process	  	 	15	  	
	 	3.16	    	Intentionally Left Blank	  	 	15	  	
	 	3.17	    	Intentionally Left Blank	  	 	15	  	
			
Section 4	 	INTENTIONALLY LEFT BLANK	  	 	15	  	
			
Section 5	 	PRICING	  	 	15	  	
	 	5.1  	    	Currency	  	 	15	  	
	 	5.2  	    	Cost Per Flight Hour	  	 	15	  	
	 	5.3  	    	Over and Above Rates	  	 	15	  	
	 	5.4  	    	Other rates	  	 	16	  	
	 	5.5  	    	Escalation	  	 	16	  	
	 	5.6  	    	Set-off	  	 	16	  	
	 	5.7  	    	Invoicing and payment	  	 	17	  	
	 	5.8  	    	Disputed amounts	  	 	18	  	
	 	5.9  	    	Overdue amount	  	 	18	  	
	 	5.10	    	Early payment discount	  	 	18	  	
	 	5.11	    	Reconciliation	  	 	18	  	
			
Section 6	 	PERFORMANCE REQUIREMENTS	  	 	18	  	
	 	6.1  	    	Intentionally Left Blank	  	 	18	  	
	 	6.2  	    	Intentionally Left Blank	  	 	18	  	
	 	6.3  	    	Defect	  	 	18	  	
	 	6.4  	    	NFF	  	 	19	  	
 
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	 	6.5  	 	Warranties	  	 	19	  	
	 	6.6  	 	VOLARIS engineering and reliability	  	 	20	  	
	 		 	6.6.1 Reliability performance	  	 	20	  	
	 		 	6.6.2 Rogue Parts	  	 	21	  	
			
Section 7	 	INDEMNITY AND INSURANCE	  	 	21	  	
	 	7.1  	 	Indemnification	  	 	21	  	
	 	7.2  	 	Limitation on liability	  	 	22	  	
	 	7.3  	 	Insurance requirements	  	 	22	  	
			
Section 8	 	TERM AND TERMINATION	  	 	23	  	
	 	8.1  	 	Term	  	 	23	  	
	 	8.2  	 	Termination	  	 	23	  	
	 		 	8.2.1 Termination for market conditions	  	 	23	  	
	 		 	8.2.2 Termination for material default	  	 	23	  	
	 		 	8.2.3 VOLARIS’s merger and acquisition	  	 	23	  	
	 		 	8.2.4 Other termination by VOLARIS	  	 	24	  	
	 		 	8.2.5 Other termination by AVEOS	  	 	24	  	
	 		 	8.2.6 Termination due to performance	  	 	24	  	
	 	8.3  	 	General provisions regarding termination	  	 	24	  	
			
Section 9	 	MISCELLANEOUS PROVISIONS	  	 	25	  	
	 	9.1  	 	Title to Components and Parts	  	 	25	  	
	 	9.2  	 	Other fines and penalties	  	 	25	  	
	 	9.3  	 	Taxes and Duties	  	 	25	  	
	 	9.4  	 	Notices	  	 	26	  	
	 	9.5  	 	Assignment	  	 	27	  	
	 	9.6  	 	Further assurances	  	 	27	  	
	 	9.7  	 	Confidentiality	  	 	27	  	
	 	9.8  	 	Disputes	  	 	28	  	
	 	9.9  	 	Governing law	  	 	28	  	
	 	9.10	 	Order of precedence	  	 	29	  	
	 	9.11	 	Entire Agreement	  	 	29	  	
	 	9.12	 	Severability and interpretation	  	 	29	  	
	 	9.13	 	Benefit of the Agreement	  	 	29	  	
	 	9.14	 	Counterparts	  	 	29	  	
			
	 	APPENDIX A: AIRCRAFT LIST	  	 	31	  	
			
	 	APPENDIX B: PRICING	  	 	32	  	
			
	 	APPENDIX C: CONSUMABLES AND EXPENDABLES	  	 	33	  	
			
	 	APPENDIX D: ADDITIONAL SERVICES	  	 	37	  	
			
	 	APPENDIX E: PARTS EXCHANGE PROCESS	  	 	38	  	
			
	 	APPENDIX F: ENGINEERING SERVICES	  	 	39	  	
			
	 	APPENDIX G: SOFT-TIMES FOR COMPONENTS	  	 	41	  	
			
	 	APPENDIX H: PROGRAM SERVICES PERFORMANCE	  	 	42	  	
			
	 	APPENDIX I: COMPONENT PARTS LIST	  	 	45	  	
 
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AMENDED AND RESTATED COMPONENT MAINTENANCE SERVICES AND POOLING AGREEMENT
THIS AMENDED AND RESTATED COMPONENT SERVICES AND POOLING AGREEMENT (as subsequently amended or modified as provided herein, this “ Agreement ”), dated as of February 10 th , 2009, is made by and between CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN , S.A. DE C.V., located at Prolongación Paseo de la Reforma 490, primer piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, Distrito Federal, hereinafter referred to as “ VOLARIS ” or “ Customer ” and AVEOS FLEET PERFORMANCE INC., having its head office located at 2311 Boulevard Alfred-Nobel, Saint-Laurent, Quebec, Canada, hereinafter referred to as “ AVEOS ” or “ Service Provider ” (and together with VOLARIS the “ Parties ”). Capitalized terms used and not otherwise defined elsewhere herein shall have the meaning set forth in Section 1 below.
Recitals
WHEREAS, VOLARIS requires component provision, inventory pooling and related support services, together with incidental maintenance, repair, overhaul and related logistics services, with respect to its A320 Family Fleet and all other services and materials included in this Agreement; and
WHEREAS, AVEOS is prepared to provide such services to VOLARIS on the terms and conditions set forth herein.
Agreement
NOW THEREFORE, in consideration of the foregoing and the mutual covenants hereinafter contained, VOLARIS and AVEOS agree as follows:
SECTION 1: DEFINITIONS AND CONSTRUCTION
 
1.1	Definitions	
For the purpose of this Agreement, the following capitalized terms shall have the meanings set forth in this Section 1.1:
“AD” means Airworthiness Directive.
“Allotment Inventory” means Components or Parts, owned by a third party, on allotment inventory in Toluca.
“Alternate Part” means a Component (as defined below) that serves the same function and occupies the same relative position on an aircraft or engine as a Primary Part, but that is not included on the parts list in Appendix I.
“AOG” means Aircraft on Ground.
“AOG Requirement” has the meaning set forth in Section 2.8 and Appendix E.
“ATEC” means the services related to the installation in Toluca, Mexico, operation and availability to VOLARIS of an automated test equipment computer as detailed in Appendix D.
“A320 Family Fleet” means Airbus A-319 and A-320, fleet operated by VOLARIS and/or any other Grupo VOLARIS Airline.
 
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“BER” means Beyond Economical Repair.
“BITE” shall mean Built In Test Equipment.
“Business Days” means a day other than Saturdays and Sundays in which commercial banks are open in USA, Mexico or Canada, as applicable.
“CMM” means Component Maintenance Manual.
“Component” means any self-contained Rotable or Repairable Part, or combination of Parts, sub-assemblies or units, which perform a distinctive function necessary to the operation of a system. The word Component includes the Primary Parts and the Alternate Parts as set out in Appendix I.
“Component Services and Pooling Agreement” means this Agreement, including Appendixes and any amendments hereto.
“Consignment Inventory” has the meaning set forth in Section 1 of Appendix C.
“Consumable” or “Consumable Part” means the collection of low value Parts such as nuts, bolts, washers, pins, rivets, gaskets, lubricants, etc. which are used or consumed in assembling an Engine, Component or Part.
“Consumables and Expendables Initial Inventory” has the meaning set forth in Section 2.3.
“Consumables and Expendables Support” means the Program Services to be provided by AVEOS to VOLARIS according to Section 2 of Appendix C.
“Core Unit” has the meaning set forth in Appendix E.
“CPFH Rate” or “Cost per Flight Hour Rate” means the price for In-Scope Services specified in Section 5.2. of this Agreement.
“Currency” or “Dollars” means United States of America dollars.
“Day” shall mean a calendar day.
“DER” means Designated Engineering Representative.
“Designated Location” shall mean any of the following: TLC (Toluca International Airport), MEX (Benito Juarez International Airport, Mexico City, Mexico), and TIJ (Tijuana International Airport, Tijuana, Mexico).
“DOD” means Domestic Object Damage.
“EASA” means European Aero Space Agency.
“Effective Date” shall have the meaning set forth in Section 8.1.
“Engine” means the thrust generating device(s), as installed on an aircraft of the A320 Family Fleet, complete with QEC, or quick engine change components.
“Engine LRU” means a Component or Part that can be removed from an Engine and replaced in a reasonable amount of time, while an Engine is still installed on an aircraft.
 
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“Exchange Component” means a Component that is provided as part of the Exchange Program by AVEOS.
“Exchange Program” has the meaning according to Section 2.7 hereof.
“Exchange Support” has the meaning according to Appendix E.
“Expendable Part” or “Expendable” means any Part for which no authorized Repair procedure exists, or whose cost of Repair would normally exceed that of replacement cost.
“FAA” means Federal Aviation Administration.
“Federal Aviation Regulation (FAR)” means Federal Aviation Regulations in the United States of America as in effect from time to time.
“Flight Hour” means each hour or part thereof elapsing from the moment the wheels of an aircraft leave the ground on take-off until the wheels of such aircraft next touch the ground. For example if the time between wheels of an aircraft leaving the ground on take-off until the wheels of such aircraft next touching the ground is 95 minutes, then the Flight Hours is equal to 1.58 Flight Hours.
“FOD” means Foreign Object Damage.
“Force Majeure” means any caused outside of the reasonable control of either Party such as acts of God or government, civil commotion, military authority, war, riots, and fire.
“Initial Term” has the meaning set forth in Section 8.1.
“In-Scope Services” are the services specified in Section 2.2 that are included in the CPFH Rate.
“Inventory Warehouse in Toluca” has the meaning set forth in Appendix D.
“IPC” means Illustrated Parts Catalog.
“Life Limited Part” or “LLP” A Part for which an appropriate authority has specified a time after which the Part must be removed from service.
“LRU” means Line Replaceable Unit.
“Maintenance” means work performed on a Component or Part thereof such as test, Repair and/or Overhaul.
“Minimum Annual Guaranteed Flight Hours” shall mean 3,000 flight hours per Aircraft per year. (or the pro-rata amount minimum flying hours in the case of an aircraft being delivered or removed from service on any day other than the first day of the year).
“Minimum Monthly Flight Hours” shall mean 250 flight hours per Aircraft per month. (or the pro-rata amount minimum flying hours in the case of an aircraft being delivered or removed from service on any day other than the first day of the month).
“MPM” means Maintenance Procedures Manual.
“MTBF” means Mean Time Between Failure.
“MTBR” means Mean Time Between Removal.
 
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“MTTF” means Mean Time to Failure as per Section 6.6.1.
“NFF” or “No Fault Found” has the meaning set forth in Section 6.4.
“OEM” means Original Equipment Manufacturer
“Out-of-Scope Services” are the Program Services specified in Section 2.4, which services are not included in the CPFH Rate and will be charged for at the Over and Above Rates.
“Overhaul” means the restoration of a Component to a complete renewal that will be equal to or higher than the manufacturer’s standards.
“Over and Above Rates” means the rates for Out-of-Scope Services that are specified in Section 5.3.
“Part” means one piece or two pieces joined together, which are not normally subject to disassembly without destruction of the designed use.
“Performance Measurement” has the meaning set forth in Section 6.6.1.
“PFR” means Post Flight Report.
“PMA” means Parts Manufacturing Approval.
“Primary Part” means each of the Components included in the parts list in Appendix I, for which a given function and position on the aircraft is included on such parts list.
“Program Services” has the meaning set forth in Section 2.1.
“Reliability Performance Penalties” means penalties specified in Section 6.6.1
“Repair” means the restoration of a Component to a serviceable and airworthy condition in accordance with the applicable aviation authority.
“Repairable Part” means a Component commonly economical to Repair and subject to being rehabilitated to a fully serviceable condition over a period less than the life of the flight equipment to which it is related.
“Rogue Part” has the meaning set forth in Section 6.6.2 below.
“Rotable” means a Component that can be economically restored to a serviceable condition and, in the normal course of operations, is repeatedly rehabilitated to a serviceable condition over a period approximating the life of the flight equipment to which it is related.
“SB” means Service Bulletin.
“TAT” means Turn Around Time measured in Days and is defined as set forth in Section 6.1.
“Term” means Initial Term, as the same may be extended pursuant to Section 8.1 and / or, terminated pursuant to Section 8.2.
“TSI” means time since last installation.
 
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1.2	Construction	
In this Agreement unless otherwise expressly provided or the context otherwise requires:
1.2.1 words importing the plural shall include the singular and vice versa.
1.2.2 a reference to a Section, Article, Appendix or Exhibit is a reference to a Section, Article, Appendix or Exhibit to this Agreement, as the same may modified, supplemented and amended from time to time.
SECTION 2: PROGRAM SERVICES
 
2.1	Program Services	
AVEOS shall provide the Program Services to VOLARIS according to the terms and conditions of this Agreement. The program services include: the provision of Component inventory, pooling and related support/logistics services for those Components set out in Appendix “A”, Allotment Inventory, Consignment Inventory , ATEC machine and Inventory Warehouse in Toluca (“ In-Scope Services ”) as described in Section 2.2 below, together with incidental Component maintenance, repair, overhaul services (“ Out-of-Scope Services ”) with respect to its A320 Family Fleet as set out in Appendix “ — ” and any other services set forth in this Agreement (the “ Program Services ”).
 
2.2	In-Scope Services	
The In-Scope Services include the following Program Services:
 
1	The provision of serviceable Components in support of VOLARIS Aircraft with respect to: (i) normal line operational requirements, (ii) AOG situations arising, (iii) called Component removal during heavy airframe checks, (iv) removals due to non-routine findings during heavy airframe checks and removals of engine components (“Engine LRUs”) during an engine shop visit;	
 
2	Provision of In-Scope Services in accordance with Service Level and Demand Fill commitments as set out in Appendix “H”;	
 
3	Engineering services as specified in Appendix F;	
 
4	All relevant shipping coordination and costs, as specified in Section 3.5 and handling costs;	
 
5	Testing and re-certification performed due to requirements of the Airbus Maintenance Planning Data;	
 
6	Removals based on “soft times” for selected Components. The “soft times” for Components agreed by the Parties is specified in Appendix G and the same may be amended from time to time by mutual agreement of the Parties;	
 
7	Warranty management as specified in Section 6.5;	
 
8	All current mandatory and reliability (Categories 1-4) SBs and ADs, as of May 30 th , 2007. Any future mandatory and reliability (Categories 1-4) SBs and ADs issued after May 30 th , 2007 are capped at ***** per SB / AD per Component serial number;	
 
9	Provide shipping containers if preferred by AVEOS according to Section 3.5;	
 
10	For stored aircraft, any Component removal after the 1st week of an aircraft being put back in service;	
 
11	Provide an on-site service representative as specified in Section 3.3. and Appendix F;	
 
12	Reporting and documentation as specified in this Agreement;	
 
13	Replacement of Components or Parts deemed BER, provided such BER was not caused by any of the circumstances described as Out-of-Scope Services in Section 2.4 Numbers 3,4,7,9 or 10, and any shipping, handling fees including other similar charges from third party suppliers to AVEOS associated with replacement of Components or Parts deemed BER;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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14	AOG support as specified in Section 2.8;	
 
15	Tooling and equipment as specified in Section 3.12;	
 
16	Component allotment and pooling. Warehouse locations shall be in the vicinity of Toluca Airport and other locations within the United States and Canada as agreed between the parties; and	
 
17	Support as specified in Section 3.9	
The In-Scope Services will be provided by AVEOS to VOLARIS at the CPFH Rate.
 
2.3	INTENTIONALLY LEFT BLANK	
 
2.4	Out-of-Scope Services	
Program Services under the following circumstances shall constitute Out-of-Scope Services and will be billed to VOLARIS at Over and Above Rates:
 
 	1.	For any mandatory (Categories 1-4) SBs or ADs removed from the Aircraft and placed in the inventory pool;	
 
 	2.	Repairs for Components due to: (i) operation of the Component not in accordance with the OEM instructions or flight manual or aircraft operating parameters, so long as it caused the Component failure, (ii) damaged due to VOLARIS’s negligence, (iii) damage due to Aircraft accident or incident and (iv) solely by events classified as Force Majeure.	
 
 	3.	Repairs of Components, which on removal from Aircraft that have been repaired or modified by either VOLARIS or its line maintenance provider;	
 
 	4.	Any required modification for lease return, except for Repairs for failed Components as specified in Section 2.2 Number 15.	
 
 	5.	For stored aircraft, any removal for repair during the 1st week of an Aircraft being put back in service.	
 
 	6.	FOD and DOD.	
 
 	7.	Repairs covered and paid by VOLARIS’s insurance	
 
 	8.	Parts or Components which are not compatible with those Parts or Components listed in Appendix I which are introduced into the VOLARIS fleet because of acquisition or lease.	
 
 	9.	Inadequate packaging, storage or handling of a Component by VOLARIS or its agents, unless expressly indicated by AVEOS, so long as such inadequate packaging, storage or handling caused the Component failure.	
 
 	10	Repairs for components not listed in Appendix I and/or with the same functionality than those described in Appendix I.	
TAT for Out-of-Scope Services shall be mutually agreed upon between the Parties prior to any work commencing on the applicable Component or Part. Work estimates will include TAT, which shall also be subject to the SL penalties for missed SL as applicable and as specified in this Agreement. In case the approval is not received within 48 hours, AVEOS reserves the right to repair unit at VOLARIS expense so that the SLA is not jeopardized.
Additionally, for any mandatory (Categories 1-4) SBs or ADs removed from the Aircraft under a removal and upgrade campaign shall be agreed in advance and coordinated between the parties to ensure the orderly replacement of Parts or Components to ensure compliance and not adversely affect the provisioning or repair cycle.
 
2.5	Consumables and Expendables Support	
AVEOS shall provide to VOLARIS the Consumables and Expendables Support as specified in Appendix C.
 
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2.6	INTENTIONALLY LEFT BLANK	
 
2.7	ATEC and Inventory Warehouse in Toluca	
Aveos will provide the ATEC and Inventory Warehouse in Toluca and all services related thereto specified in Appendix D.
 
2.8	AOG Support	
AOG support process is described in Appendix E to this Agreement
SECTION 3: PROGRAM SERVICES SPECIFICATIONS
 
3.1	Components	
AVEOS understands that it will provide Program Services to the Components covered by this Agreement, which are listed in Appendix I and/or with the same functionality than those described in Appendix I. The addition or deletion of a Component from those listed in Appendix I shall be mutually agreed, including any agreed adjustment (up or down) in the CPFH Rate.
VOLARIS will provide a copy of the Airbus and International Aero Engines IPCs and applicable RSPL to AVEOS, as they are made available and updated to VOLARIS from time to time.
Upon the induction or removal of Airbus 320 Family Fleet aircraft in VOLARIS’s fleet the parties shall amend the Aircraft listing in Appendix “A”. Prior to the introduction of any Aircraft, the parties shall review the modification status of the Components or Parts covered under the Agreement. Should the Component or Parts not be of the same modification status or not otherwise compatible, then the subject Components or Parts either shall be excluded from the In-Scope Services or shall be subject to Out-of-Scope charges for the first shop visit only.
 
3.2	Component / Part Certification	
For all In-Scope Services performed, all Components or Parts provided under this Agreement shall come from an approved source and must be Part 145 FAA / EASA certified or have equivalent certification in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Union and Canada.
Every Component or Part delivered to VOLARIS under the terms of this Agreement shall be accompanied by a FAA form 8130, and EASA Form 1, duel certification or equivalent, as applicable.
AVEOS shall make available, upon request, the Component, or Part Teardown data and ADs and SBs completed status report.
For any Out-of-Scope Services, AVEOS and any subcontractor used in the performance of the Services must be Part 145 FAA / EASA certified or have equivalent certification in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Union and Canada and be on VOLARIS’s approved supplier list, or be approved in writing by VOLARIS prior to using such subcontractor. VOLARIS reserves the right at its sole discretion, acting reasonably, to remove and/or add vendors into the approved suppliers list which will be notified to AVEOS in a timely manner.
 
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Additionally:
 
 	•	 	All Services performed shall be done in accordance with any applicable terms and conditions of this Agreement, VOLARIS’s maintenance specifications and FAA’s and EASA approved directives;	
 
 	•	 	Any work performed by subcontractors will not relieve AVEOS of any obligation it has to VOLARIS under this Agreement and will remain liable to VOLARIS as if AVEOS had performed such work itself;	
 
 	•	 	VOLARIS is not responsible for any incremental costs resulting from AVEOS’ use of a subcontractor. VOLARIS shall pay AVEOS the rates per each of the Program Services specified in this Agreement. No extra charge and/or handling fee will be payable for Program Services performed by AVEOS subcontractors;	
 
 	•	 	With respect to Out-of-Scope Services, VOLARIS shall have the right to reject/refuse the acceptance of any work and/or services performed by an AVEOS subcontractor, should such subcontractor either not be approved by VOLARIS or after being approved by VOLARIS, the subcontractor loses any required license or certification which has an impact on the certification of any Part.	
 
3.3	AVEOS on-site services representative	
An on-site service representative will be based at VOLARIS’s base in Toluca International Airport Licenciado Adolfo López Mateos in Toluca and available to assist VOLARIS as a single point of contact for management of the Program Services under this Agreement. The support will encompass the management of the different activities relevant for an efficient interface between VOLARIS and AVEOS. These activities will be related but not limited to: customer support and logistics. In addition, the on-site representative will also facilitate and coordinate engineering services specified in Appendix F.
An on-site service representative will provide support on day-to-day activities related, but not limited to the following:
 
 	•	 	Daily meetings with VOLARIS’s repairs personnel for prioritization of component needs (AOG Requests, MEL deferred items, critical requests, Advance Exchanges);	
 
 	•	 	Provide prompt assistance with the solution of quarantined items;	
 
 	•	 	Provide assistance with invoicing discrepancies;	
 
 	•	 	Coordinate all related activities to the transport of Components and materials (Logistics);	
 
 	•	 	Interact with VOLARIS’s Shipping and Receiving departments for Components and materials deliveries (inbound and outbound);	
 
 	•	 	Closely coordinate with VOLARIS’s customs dedicated personnel to ensure smooth flow of Components and materials;	
 
 	•	 	Liaise with subcontracted customs personnel (if applicable) for Components and materials import/export;	
 
 	•	 	Closely coordinate with VOLARIS’s inventory planning personnel to:	
 
 	•	 	Determine the correct allocation of repairs returning to VOLARIS depending on current inventory levels;	
 
 	•	 	Coordinate for Consignment Inventory replenishment, if applicable	
 
 	•	 	Provide support to VOLARIS’s finance personnel as necessary, including without limitation with respect to invoices;	
 
 	•	 	Liaise with any other AVEOS departments as needed by VOLARIS with respect to the Program Services;	
 
 	•	 	Availability of an on-site service representative shall be during normal VOLARIS business hours. However, on special AOG situations it can be expected by VOLARIS to have the support of the on-site representative after hours as reasonably requested by VOLARIS’s operation;	
 
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 	•	 	Coordinate AOG support with AVEOS and VOLARIS respective Customs representative;	
 
 	•	 	Any additional duties and responsibilities may be agreed by the parties in writing from time to time	
AVEOS acknowledges that VOLARIS has the right, acting reasonably, to: (a) request AVEOS to replace the on-site service representative, or (b) exchange the local representative position at the Miami Logistic Center.
 
3.4	Facilities	
Relative to Out-of-Scope Services, VOLARIS shall have access to visit any of AVEOS’ and sub-contractor’s facilities before the Effective Date of the Agreement.
During the Term of this Agreement, VOLARIS shall have access, with twenty four (24) hours prior notice, to perform a thorough examination of AVEOS’ and sub-contractor’s facilities (to the extent AVEOS can cause such access to a sub-contractor’s facilities) to ensure compliance with VOLARIS’s requirements and any applicable regulations. All repair stations must be Part 145 FAA / EASA certified or possess the equivalent certification through the applicable aviation authority so long as they are equivalent in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Community and Canada.
VOLARIS shall retain right to inspect all facilities, records, manuals, safety procedures, and employee training procedures, which relate to the successful performance of this Agreement.
 
3.5	Shipping	
The shipping responsibilities between VOLARIS and AVEOS are as follows:

Currently, the shipping and receiving stations for VOLARIS are as follows:
 
 	•	 	VOLARIS: Any of the Designated Locations as specified by VOLARIS.	
VOLARIS reserves the right to change the above Designated Locations in the future, owing to any changes in strategic direction. If the changes in Designated Locations result in material change in shipping costs, discussions between the Parties shall be conducted in good faith on potential impact on pricing with applicable adjustments to be agreed.
VOLARIS will be responsible for all shipping containers required to transport Components from VOLARIS’s Designated Locations to AVEOS and serviceable Components from AVEOS to VOLARIS’s Designated Locations. If AVEOS prefers to use containers other than those provided by VOLARIS, AVEOS is responsible for providing such containers, at its sole cost and expense. Removed Components will be shipped directly to AVEOS’ repair facility from the VOLARIS’s Designated Locations. AVEOS will return serviceable Components to VOLARIS’s Designated Location specified by VOLARIS on a case-by-case basis. VOLARIS shall notify AVEOS of the applicable Designated Location in advance so as not to affect AVEOS’ SL under this Agreement. AVEOS carries the risk of loss and damage for the containers and/or Components while in transit between the VOLARIS Designated Location and AVEOS’ locations, both directions. Risk of loss
 
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transfers to VOLARIS upon delivery by AVEOS (received at a Designated Location and under VOLARIS’s control) to VOLARIS. AVEOS will be liable for loss or damage to VOLARIS’s containers and/or Components while at AVEOS’ premises or when in transit. VOLARIS will be liable for loss or damage to containers and/or Components while at VOLARIS’s premises.
 
3.6	PMA Parts, DERs and engineering support	
The use of PMA Parts (14 CFR 21.303) will be allowed only if the PMA Parts or Components (Class II or Class III) have been approved in writing by VOLARIS. If not agreed by VOLARIS, AVEOS shall not provide or deliver any PMA Part.
VOLARIS reserves the right to incorporate the use of specific PMAs into its maintenance program that it deems appropriate. AVEOS shall not unreasonably refuse the specified PMA Part.
AVEOS shall use DERs and “Extended” DER repairs.
 
3.7	BER	
AVEOS shall replace any Part or Component deemed BER at no additional cost to VOLARIS, except for BER caused by any of the circumstances described as Out-of-Scope in Section 2.4.
Either party may provide a used or new replacement Part instead of a new Part without the prior consent of the other party as long as conditions set forth in Section 3.15 are met.
 
3.8	Obsolescence	
In the event that a Part or Component is declared obsolete, other than for configuration changes as required by the Aircraft manufacturer or VOLARIS, AVEOS will provide a new Part or Component to replace it, under the terms of this Agreement, at no additional cost to VOLARIS.
 
3.9	Periodic meetings	
AVEOS will meet at least once every six (6) months with VOLARIS to review the productivity, efficiency, and other reliability related aspects within the scope of this Agreement. The review meetings with AVEOS, related to reliability aspects, may be scheduled at more frequent intervals, if deemed reasonably necessary by VOLARIS. During these meetings, VOLARIS will share internal reports / analysis by its engineering group with AVEOS. AVEOS shall provide necessary support to improve the overall reliability performance for its entire A320 Family Fleet.
Volaris shall assign an individual to participate to coordinate Volaris requirements through to implemention of the inventory management software currently under development.
 
3.10	Reporting and documentation	
AVEOS must provide the following requirements for reporting with the serviceability certification tag or on a request basis:
 
 	•	 	If an Exchange Component is provided, the same level of reporting is required at the time the Component is provided to VOLARIS;	
 
 	•	 	Reports must be provided to the appropriate maintenance correspondent at VOLARIS;	
 
 	•	 	All teardown reports, detailing the actual work performed.	
Additionally, AVEOS will be required to submit monthly reliability reports and provide insight into trends that affect system components and aircraft dispatch reliability.
 
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Every Component and/or Exchange Component delivered to VOLARIS under the terms of this Agreement shall be accompanied by the documentation:
 
 	•	 	FAA form 8130, or EASA Form 1, or equivalent, as applicable	
 
 	•	 	Teardown data	
 
 	•	 	ADs and SBs completed	
 
 	•	 	Dual release (FAA/EASA) airworthiness certificate or equivalent in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Community and Canada	
 
 	•	 	Packing Slip	
 
 	•	 	Proforma Invoice.	
In the case of an Exchange Component AVEOS additionally shall make available, upon VOLARIS` request, full traceability of such Exchange Component.
AVEOS should provide access to online, internet-based customer support functions such as ability to monitor the status of ongoing Repairs, access to Repairs history, and download capability of repair documents such as teardown reports, release certificates FAA 8130 / EASA Form 1 or the equivalent in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Community and Canada
AVEOS shall keep full and complete records of all Maintenance carried out hereunder in accordance with FAA and EASA applicable requirements (or the equivalent in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Union and Canada) which records shall be opened for examination and inspection to VOLARIS during normal business hours. AVEOS shall furnish such current information with respect to such records as VOLARIS may reasonably require, together with copies.
 
3.11	Changes to Part Number List	
Either party may request changes to the Part Number List as set out in Appendix I with respect to functionality of parts or the list itself, subject to agreement with the other party and an appropriate adjustment in the CPFH Rate, if any.
 
3.12	Tooling and equipment	
AVEOS will be responsible, at no additional cost to VOLARIS, for all routine and non-routine tooling, fixtures and equipment that are required to complete the repair and pooling requirements outlined in this Agreement.
 
3.13	New aircraft inductions and removals	
VOLARIS may add or remove aircraft from coverage under this Agreement. VOLARIS will provide all necessary data (i.e. delivery docs, serialized item list, IPC and RSPL or any other document deemed necessary by AVEOS to fulfill its obligations hereunder) to AVEOS upon addition or removal of an aircraft at least 30 days in advance for AVEOS’ review and planning. If an aircraft is added to or removed from this Agreement, no adjustments to the CPFH Rate (other than those set out in this Agreement) shall be made nor shall there be any other charges for such additions or removals, except for the event that the parts listed in Appendix I or the functionality of those parts are alternated.
If additional aircraft with Alternate Parts not included on the parts lists in Appendix I are introduced into VOLARIS’s A320 Family Fleet, AVEOS reserve the right to review the CPFH to incorporate costs of either (a) servicing the Alternate Parts with the same terms that apply to Primary Parts, or (b) replacing the Alternate Parts with the Primary Parts with VOLARIS’s written approval.
 
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3.14	Standards	
All Program Services shall be performed in compliance with the OEM’s CMM, VOLARIS’s maintenance program, airworthiness regulations and specifications issued by the FAA and the EASA or any other applicable aviation authority. Additionally AVEOS shall observe all the performance standards set forth in this Agreement.
All Components, materials, piece parts or other Parts used in the performance of the Program Services shall:
a) be FAA and EASA approved, or equivalent in accordance with bilateral transport agreements between applicable aviation authorities of United States of America/European Community and Canada
b) comply with AVEOS’ inspection criteria,
c) comply with OEM’s CMM,
d) comply with airworthiness regulations and specifications issued by the FAA, EASA or any other relevant authority, and
e) company with VOLARIS’s maintenance program.
 
3.15	Part Exchange Process	
The process for the exchange of Component or Parts is set out in Appendix E to this Agreement.
 
3.16	INTENTIONALLY LEFT BLANK	
 
3.17	INTENTIONALLY LEFT BLANK	
SECTION 4: INTENTIONALLY LEFT BLANK
SECTION 5: PRICING
 
5.1	Currency	
The currency used in this Agreement for invoicing and payment shall be United States Dollars.
 
5.2	Cost Per Flight Hour	
For the In-Scope Services, VOLARIS shall pay AVEOS the Cost per Flight Hour Rate by aircraft age category and fleet type listed in Appendix B in accordance with the following invoice process:
Rates will be charged by month for the number of Flight Hours flown by all aircraft in the A320 Family Fleet by each age group.
 
5.3	Over and Above Rates	
For all Program Services that are Out-of-Scope Services, AVEOS will charge VOLARIS based on direct labor time and materials at the following rates (“Over and Above Rates”): The labor rate used in calculating direct labor shall be ***** per hour at an AVEOS repair facility outside of Central America, Mexico, and South America and ***** per hour within Central America, Mexico, and South America. All materials will be charged at OEM list price.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Shipping charges and handling fees will be capped at ***** of material purchase price, or ***** per item, whichever is less. No additional material costs or mark-ups shall be applicable.
This Over and Above Rates shall only be effective for charges paid by VOLARIS. In the event that Over and Above Rates are payable by a third party, AVEOS may charge on a time and material basis at its own discretion.
 
5.4	Other rates	
The rates for the following Program Services are specified in the Appendixes set forth below:

Consignment Inventory	 	Appendix C, Section 3.1.1	
Consumables and Expendables Support	 	Appendix C, Section 3.1.2	
Advance Exchanges	 	Appendix E, Section 3.1.1	
ATEC operation for Out-of-Scope Services	 	Appendix D, Section 1.1.1	
The rates specified above in Sections 5.2, 5.3 and 5.4 are the only charges to be paid by VOLARIS. Subject to Section 5.5, no additional charges shall apply.
 
5.5	Escalation	
Escalation rate is based on the United States Consumer Price Index ( U.S. CPI), capped at ***** when the U.S. CPI is less than or equal to *****. If the U.S. CPI exceeds *****, ***** of the increase above ***** shall be shared between VOLARIS and AVEOS.
For example, if the U.S. CPI is *****, AVEOS will use the following equation:
***** + ***** * ***** = ***** annual escalation rate
The first escalation will occur on February 1 st , 2010 and every year thereafter on February 1 st . No other escalation will be permitted.
For escalation calculation purposes, US CPI - All Urban Consumers, provided by U.S. Department of Labor, Bureau of Labor Statistics (Select “More Formatting Options” on this link: to obtain 12-month percent change) shall be used.
Escalation is applicable to CPFH Rate, Over and Above Rates (except for ***** cap on shipping charges and handling fees), pricing for Logistics Services in Miami in Appendix D, SL penalties, NFF penalties in Section 6.4, Reliability Performance Penalties in Section 6.6.1.
 
5.6	Set-off	
VOLARIS reserves the right to withhold and/or set-off any payment due to AVEOS as a result of the application of any penalties according to the terms of this Agreement against any AVEOS outstanding invoices. VOLARIS agrees to not withhold any other payment(s) of invoices which are due and owing to AVEOS, except for disputed payments as set forth in Section 5.8.
In the event that VOLARIS has withheld any penalties in error under any invoices from AVEOS pursuant to this Agreement, VOLARIS will immediately pay to AVEOS such withheld payment(s) together with interest at the rate of *****, pro-rated daily, from the date at which such payment(s) should have been made in accordance with this Agreement to the date of the actual payment of such withheld payment(s).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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5.7	Invoicing and payment	
5.7.1 Pool Access Charges : Each month, AVEOS shall send VOLARIS, by the first (1st) day of the month, an invoice representing the current months’ Minimum Monthly Flight Hours multiplied by the Flight Hour Rate multiplied by the number of Aircraft for the Pool Access Charges as set out in Appendix B. Not later than thirty (30) days from date of the invoice VOLARIS shall remit payment of such invoice.
On or before the fifteenth (15 th ) Business Day of each month, VOLARIS shall report to AVEOS, Customer Invoicing group, the actual total Flight Hours Flown by each Aircraft during the previous month. The total Flight Hours Flown shall be reported to AVEOS’ by email or fax as advised by AVEOS or by alternate means as agreed between the Parties.
Upon receipt of the information referred to above, AVEOS shall then issue a detailed invoice reflecting: (i) the actual amount due resulting from the calculation of the actual total Flight Hours Flown during the previous calendar month multiplied by the Flight Hour Rate multiplied by the actual number of Aircraft; and (ii) the credit of the amount of the invoice paid as per the paragraph above.
The net of any amounts due to or due from AVEOS, as calculated on the detailed invoices described in the preceding paragraph shall be issued as either a credit invoice or a payable invoice, which shall be due and payable in accordance with this Agreement.
5.7.2 Repair/Overhaul & Out-of-Scope Charges: AVEOS will invoice VOLARIS on a monthly basis. Pricing will be applicable to the actual or Minimum Flight Hours by Aircraft, whichever is greater, for the previous month. VOLARIS will provide AVEOS with actual Flight Hours for the previous month by the fifteenth (15th) calendar day of the following month. Payment is due forty-five (45) from invoice receipt date. AVEOS’ invoice and VOLARIS’s payment shall be in United States currency. Invoices for Out-of-Scope Services and charges not included in the CPFC, shall be paid by VOLARIS by wire transfer within forty-five (45) days from date of receipt of the invoice.
Invoices should be sent to:
Concesionaria Vuela Compañía de Aviación,
Attn. Cuentas por Pagar, Accounts Payable Manager
Prolongación Paseo de la Reforma No. 490
Piso 1 (Edificio GE)
Col. Santa Fe Pena Blanca
Del. Álvaro Obregón
01210 México, D.F.
Tel. (+5255) 5261 6400
Fax. (+5255) 5261 6460
Payments will be made to:

Bank:	  	The Bank of Nova Scotia	
	  	Montreal, QC, Canada	
SWIFT:	  	NOSCUS33	
ABA:	  	*****	
Transit:	  	*****	
USD Account:	  	*****	
Beneficiary:	  	Aveos Fleet Performance Inc.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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or such other account as shall be notified by AVEOS in writing.
 
5.8	Disputed amounts	
In the event that there should arise between VOLARIS and AVEOS a dispute as to any particular item set forth in an invoice from AVEOS, VOLARIS agrees that it shall act reasonably in determining any disputed items and that it shall make prompt payment of all non-disputed items and shall be entitled to withhold payment only in respect of the disputed amount until such time as such dispute is resolved between the Parties.
 
5.9	Overdue amounts	
In the event that AVEOS shall not have received payment of any invoiced amount which is not in dispute, when due, AVEOS shall charge VOLARIS, and VOLARIS agrees that it shall be liable for, in addition to the amount due stated on the relevant invoice, interest on such overdue amount at a rate of ***** per month, except for amounts in dispute.
 
5.10	Early payment discount	
An early payment discount of ***** of the invoice amount will be granted if VOLARIS pays within ten (10) Days of invoice receipt.
 
5.11	Reconciliation	
An annual reconciliation shall occur in September of each calendar year for the previous 12 months. Any amounts due to VOLARIS or AVEOS shall be settled within thirty (30) Days.
SECTION 6: PERFORMANCE REQUIREMENTS
 
6.1	INTENTIONALLY LEFT BLANK	
 
6.2	INTENTIONALLY LEFT BLANK	
 
6.3	Defect	
VOLARIS reserves the right to reject acceptance of a Component in any of the following events:
 
 	a)	If the Components fail to meet compatibility to VOLARIS’s Aircraft.	
 
 	b)	If the Component is damaged;	
 
 	c)	If the Component(s) received by VOLARIS contains any discrepancy in the accompanying paperwork or has any documents missing;	
 
 	d)	If a Component(s) received by VOLARIS is defective because of workmanship and/or materials; or	
 
 	e)	If the Component fails to meet any other requirement set forth in this Agreement.	
In any of the foregoing events VOLARIS shall have the right to return the Components to AVEOS for Repair. AVEOS will cover the cost of shipping and related customs and duties between any VOLARIS Designated Location and AVEOS’ maintenance station in each case as required. In the case specified in paragraph c) above, VOLARIS shall have the right to return such Component to AVEOS only if after three (3) Business Days after VOLARIS has notified AVEOS of such
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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discrepancy AVEOS has not cured such discrepancy. During such three (3) Business Day period the Component will be quarantined. After such three (3) day period has elapsed without the paperwork been remedied, the Component(s) will be deemed rejected and will be returned to AVEOS at its cost.
If a Component is not accepted by VOLARIS as provided above, such Component shall not be deemed received for the purpose of SL measurement and applicable SL penalty calculations.
Any defects found after acceptance of a Component, will be covered by the warranty specified below, if applicable. In such event, such Components will also be subject to SL requirements.
 
6.4	NFF	
CPFH Rate includes “No Fault Founds” (NFF) removals up to ***** for the first two (2) years of the Term and up to ***** for the remainder of the Term.
For the purpose of clarity, the NFF thresholds (***** or ***** as applicable) are measured over a twelve (12) months period starting in ***** and each year of the Term thereafter. If the NFF exceeds ***** or *****, as applicable, VOLARIS will bear the transportation costs and bench check costs for the repairs, capped at ***** per NFF event over NFF thresholds set forth in this paragraph.
If the NFF is between ***** and *****, a joint committee will be set up between VOLARIS and AVEOS to work together to reduce the NFF rate.
If the VOLARIS NFF rate is lower than ***** of the historical NFF rate, measured over last twelve (12) month period as of September 2008 and each year of the Term thereafter, VOLARIS will receive a credit of ***** per NFF event improvement. For example, if the historical rate is nine percent (9%) and VOLARIS’s observed NFF is ***** (which is below ***** improvement requirement of *****, VOLARIS will receive a credit of ***** times the number of NFF events, resulting from the improvement of *****.
VOLARIS will provide Post Flight Reports (PFR) and Built In Test Equipment (BITE) test reports, whenever available through aircraft systems.
 
6.5	Warranties (Out-of-Scope)	
AVEOS warrants that all Components shall be free from defects in material and workmanship for a period of twelve (12) months or three thousand five hundred (3,500) Flight Hours, which ever may occur first, from the date of delivery of the Component to VOLARIS. AVEOS warranty coverage shall include:
 
 	a)	Repair or replacement of the Component	
 
 	b)	Shipping to/from VOLARIS’s Designated Locations	
 
 	c)	Import and/or export duties and taxes, if applicable	
 
 	d)	Labor, workmanship, and materials	
AVEOS shall review and administer all OEM or subcontractors warranty opportunities and claims and act as an agent for VOLARIS in identifying warranty claims and submitting them on VOLARIS’s behalf as part of this Agreement. VOLARIS agrees to provide all relevant information to AVEOS on a timely basis for all such warranty administration.
Warranties provided in relation to the Components, materials, and workmanship provided hereunder may be transferred to third parties.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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6.6	VOLARIS engineering and reliability	
 
6.6.1 	Reliability	
AVEOS must maintain Component reliability performance equal to or better than previous performance levels for all Components.
In addition to any other remedies set forth in this Agreement, if the ratio of the Performance Metric (as defined and calculated below) in the observed period to the rates of the Performance Metric in the in base period (“Performance Measurement”), is below zero point nine (0.9), AVEOS shall compensate VOLARIS with ***** per additional removal below zero point nine (0.9) threshold (“Reliability Performance Penalty”).
Performance Measurement will be assessed starting March 2008, and every six (6) months thereafter for the duration of the Term. The observed period is the last six months before the review date. The base period is the six months prior to the observed period.
Performance Measurement for the Term will be calculated as follows:
*****
For period of Effective Date until March 1, 2009, the following formula will be used to calculate Performance Metric:
Performance Metric:

(Total flight hours for the entire active A320 Family Fleet)	 		
(Total Component removals due to confirmed failure across the entire active A320 Family Fleet)	
Total Component removals across the entire active A320 Family Fleet will exclude any first removals (i.e., components that have never been repaired previously).
For period of March 2009 until the end of the Term, the following formula will be used to calculate Performance Metric:
Performance Metric:
MTTF per Component = (Sum of TSI across all units per Component) / (Total removals per Component) for all removals due to confirmed failure
Total removals per Component will exclude any first removals (i.e., components that have never been repaired previously).
Calculation for Reliability Performance Penalty assessment:
If any Performance Measurement as measured above is lower than 0.90, the penalty calculation is as shown below.
For the period: Effective Date until March 1, 2009
[*****] * *****
# of removals means total Component removals across the entire active A320 Family Fleet for confirmed failure
flight hours means total flight hours for the entire active A320 Family Fleet
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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For the period: March 1, 2009 to end of the Term
For each Component, penalty is calculated as follows:
In the event of an MTTF for the observed period of a component is lower than 0.9* MTTF for the based period of the same Component:
(Number of removals for observed period where TSI is lower than 0.9 * MTTF for the based period) * *****
Number of removals means all removals for a given Component due to confirmed failures.
In addition, in the event that VOLARIS determines that a Component or group of Components exhibit performance below industry standards, and such performance is of a persistent or reoccurring nature and is due to AVEOS workmanship, VOLARIS will notify AVEOS of such performance degradation. Upon receipt of notification from VOLARIS, AVEOS will have sixty (60) days to implement corrective action and display performance improvements. If no noticeable improvements are displayed after the sixty (60) day correction period, then VOLARIS, acting reasonably, reserves the right to require AVEOS to send such Component(s) to OEM or its designated repair station to perform Maintenance at no additional cost to VOLARIS.
 
6.6.2 	Rogue Parts	
VOLARIS reserves the right to refuse exchanges where the Component is recognized as a Rogue Part. A Rogue Part is defined as a Component that has been removed from an aircraft three (3) times within the last twelve (12) months, regardless of whether a failure was found or not. If a Component has been identified as a Rogue Part before the start of the Agreement, Maintenance to the same shall be perform at Over and Above Rate. If a Component becomes a Rogue Part during the Term, it is the responsibility of AVEOS to replace the Rogue Part with a new Component, at no additional cost to VOLARIS. AVEOS may provide a used Component instead of a new Component for valid reasons (e.g., longer lead times for new part) with VOLARIS’s consent, as long as conditions set forth in Section 3.15 are met. AVEOS will cover the cost of shipping and related customs and duties.
In order to isolate potential Rogue Parts during the Term, VOLARIS reserves the right to request a “full in-depth investigation” for those Components that have failed two (2) times during the last twelve (12) months and have been determined to be NFF. If a Component fails a consecutive third time within such twelve (12) months, then it shall be considered under the Rogue Parts procedure described in the previous paragraph in this Section 6.6.2.
SECTION 7: INDEMNITY AND INSURANCE
 
7.1	Indemnification	
(A) VOLARIS agrees to hold harmless, defend and indemnify AVEOS, its affiliates, and their directors, officers, employees, agents and representatives (each an “AVEOS Indemnitee”), from and against any claim of third parties which may be suffered by, accrued against, chargeable to, or recoverable from AVEOS as a result of death of or bodily injury to any person or persons whomsoever (including, without limitation, VOLARIS’s employees but excluding AVEOS employees) and for loss of or damage to, destruction of, any property whatsoever (including, without limitation components, the Aircraft and any loss of use thereof), in any manner arising out of or in any way connected with the Program Services furnished or to be furnished by AVEOS under this
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Agreement, except in the case of claims arising out of the gross negligence or willful misconduct of AVEOS. VOLARIS shall, at the request of AVEOS, negotiate and defend any claim brought against any AVEOS Indemnitee or in which any AVEOS lndemnitee is joined as a party defendant based upon any other matters for which VOLARIS has agreed to indemnify each AVEOS lndemnitee as provided above. VOLARIS’s obligation hereunder will survive any expiration, termination, or cancellation of this Agreement.
(B) AVEOS agrees to hold harmless, defend and indemnify VOLARIS, its affiliates, and their officers, directors, servants, agents, representatives and employees (each a “VOLARIS Indemnitee”) from and against any claims of third parties, which may be suffered by, accrued against, chargeable to, or recoverable from VOLARIS as a result of injury to or death of any person (including, without limitation, AVEOS’s employees and excluding VOLARIS’s employees), or damage to, loss or destruction of property arising out of or in any way connected with the Program Services provided or to be provided by AVEOS under this Agreement, except in the case of claims arising out of the gross negligence or willful misconduct of VOLARIS. AVEOS shall, at the request of VOLARIS, negotiate and defend any claim brought against any VOLARIS Indemnitee or in which any VOLARIS lndemnitee is joined as a party defendant based upon any other matters for which AVEOS has agreed to indemnify each VOLARIS lndemnitee as provided above. AVEOS’ obligation hereunder will survive any expiration, termination or cancellation of this Agreement.
 
7.2	Limitation on liability	
The total liability of AVEOS, including its subcontractors or suppliers, in connection this Agreement and/or for any and all claims, whether in contract, warranty, tort, products liability, patent infringement, or otherwise, (excluding gross negligence or willful misconduct), arising out of, connected with, or resulting from this Agreement, or from the performance or breach thereof, or the use, possession, operation, shipping, delivery, or maintenance of the Components shall be limited to *****
Notwithstanding the above AVEOS shall be fully responsible for all loss and/or damage occurring to VOLARIS’s property while in the custody, control or possession of AVEOS or AVEOS’s subcontractors. AVEOS shall not be responsible for loss or damage resulting from normal wear and tear and depreciation while in AVEOS’s custody.
Except as otherwise provided in this Agreement, it is agreed between the Parties that in no event shall either Party be liable for special, incidental or consequential damages under this Agreement, unless such damages are the result of the intentional and/or malicious acts of either Party.
 
7.3	Insurance requirements	
(A) VOLARIS shall, at its sole cost and expense, procure and maintain in full force and effect during the term of this Agreement, (i) Hull all risks (including spare parts) insurance policies covering the aircraft and components subject to Program Services under this Agreement, (ii) Aircraft Liability, Aviation Third Party Legal Liability, Comprehensive General Third Party Liability, and Personal Injury insurance coverages, each having a combined single limit of not less than ***** for any one occurrence. (B) AVEOS shall, at its sole cost and expense, procure and maintain in full force and effect during the term of this Agreement, (i) comprehensive general third party liability and hangar keepers’ liability insurance (including Products and Completed Operations Liability insurance) having a combined single limit of not less than ***** for any one occurrence and (ii) adequate workers’ compensations coverage. Each of VOLARIS and AVEOS agree that the foregoing insurance coverage must be reasonably satisfactory to the other party and that proof shall be provided to the requesting party upon reasonable request.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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SECTION 8: TERM AND TERMINATION
 
8.1	Term	
The Agreement will be effective from February 10, 2009 (“Effective Date”) to August 31, 2017 (the “Initial Term”). At the end of the Initial Term, VOLARIS reserves the right to unilaterally extend the Initial Term for an additional term of five (5) years, under the same terms and conditions of this Agreement, including without limitation CPFH Rate as the same may escalate in accordance with this Agreement.
 
8.2	Termination	
 
8.2.1	Termination for market conditions	
This Agreement will allow market reviews at third (3 rd ) and sixth (6 th ) anniversary from February 1, 2009. If during these reviews, VOLARIS is offered lower comparative prices by another supplier for the same Program Services, AVEOS will have an opportunity to match the new market pricing. If the new offer presented by AVEOS is not at or below the new comparative market offer, then VOLARIS shall have the right to terminate the Agreement without penalties.
VOLARIS will provide to AVEOS a summary of the relevant information, prepared under its sole discretion but acting in good faith and reasonably, submitted by such alternate supplier, certified as true by one of VOLARIS’s officers, one (1) month prior to the review date in years three (3) and six (6). AVEOS shall have thirty (30) Days from the date of receipt of summary of the commercial terms to present an offer for the same Program Services.
If the alternative offer cannot be matched by AVEOS and VOLARIS elects to terminate this Agreement, it shall provide AVEOS a three (3) months prior notice of termination.
 
8.2.2 	Termination for material default	
In the event of a material breach of this Agreement or any of its Appendixes by either VOLARIS or AVEOS remaining uncured for more than thirty (30) Days after receipt of written notification of such breach by the nonbreaching party, then upon providing at least three (3) months prior written notice of termination to the breaching party, the nonbreaching party may terminate in its entirety this Agreement and all applicable Appendixes, at its sole discretion, without penalties.
 
8.2.3 	VOLARIS’s merger or acquisition	
If VOLARIS were to participate in a merger or acquisition, and the acquired or acquiring company has lower cost comparative component maintenance agreements in terms of pricing and other key commercial and operational terms, VOLARIS will provide to AVEOS a summary of the relevant information, prepared under its sole discretion, certified as true by one of VOLARIS’s officers. AVEOS will have an opportunity to match these prices and terms. VOLARIS reserves the right to accept the new offer presented by AVEOS. If the new offer presented by AVEOS is not acceptable to VOLARIS, acting reasonably and in good faith, VOLARIS can terminate this Agreement, without penalties. Any termination will be effective, at VOLARIS’s sole discretion, not earlier than three (3) months after termination notice has been given, without penalties.
 
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8.2.4 	Other termination by VOLARIS	
VOLARIS shall also have the right to immediately terminate this Agreement, without penalties, upon providing at least three (3) months prior notice of termination to AVEOS except in the events specified in b) and d) where termination is immediate, at any time, if any of the following events occur:
 
a)	VOLARIS ceases to operate A320 Family Fleet;	
 
b)	AVEOS files for insolvency, bankruptcy, reorganization, arrangement, dissolution, liquidation or similar proceedings;	
 
c)	Subject to Section 9.5, if any single person or group of persons other than persons currently shareholders of AVEOS or any successors or assigns acquire direct control of AVEOS or any successors or assigns, or if it consolidates or merges with another person and any of those events would have, at VOLARIS sole discretion, an adverse effect on the ability of AVEOS or any successors or assigns to perform its obligations under this Agreement and any or all of its Appendixes;	
 
d)	If AVEOS fails to maintain such licenses, permits, certificates, and / or authorizations required by any applicable aviation authority to perform the Program Services.	
 
8.2.5 	Other termination by AVEOS	
AVEOS shall also have the right to immediately terminate this Agreement, at any time and without penalties, if any of the following events occur:
 
 	•	 	VOLARIS files for insolvency, bankruptcy, reorganization, arrangement, dissolution, liquidation or similar proceedings;	
 
8.2.6 	Termination due to performance	
VOLARIS shall have the right to terminate this Agreement at any time without penalties, with due notice of no less than three (3) months, if the operational and/or reliability performance standards set forth in this Agreement are not met. These occurrences will include, but are not limited to, the following terms:
 
 	•	 	SLA performance	
 
 	•	 	AOG: AVEOS must maintain or exceed VOLARIS’s historical operational performance to avoid AOGs. If the observed AOGs are due to Component shortages resulting from non compliance of any of the terms of this Agreement, as outlined in Section 4, and is ***** of VOLARIS’s historical levels (past year performance) for any month; or	
 
 	•	 	Performance Measurement: if the Performance Measurement, as shown in Appendix H is not achieved.	
 
 	•	 	Other standards: If AVEOS fails to meet any other standard set forth in this Agreement and does not cure such breach within a cure period of thirty (30) Days from receipt of default notice from VOLARIS.	
 
8.3	General provisions regarding termination	
If VOLARIS terminates this Agreement for any of the causes specified in Sections 8.2.2, 8.2.4 (b), 8.2.4 (c), 8.2.4 (d), or 8.2.6, in addition to any other remedies provided to VOLARIS under this Agreement or applicable law, AVEOS shall compensate VOLARIS an amount equal to the total amount invoiced by AVEOS and paid by VOLARIS under this Agreement over the three (3) month’s immediately prior to the date of termination of this Agreement.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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In the event the Agreement is terminated by either Party, VOLARIS shall remain obligated to pay AVEOS for all goods or services rendered under this Agreement up to and including the effective date of the termination.
SECTION 9: MISCELLANEOUS PROVISIONS
 
9.1	Title to Components and Parts	
Transfer of title shall only occur in case of: a) Upon removal and installation on Aircraft of the Exchange Components according to the terms of Appendix E, b) withdrawal by VOLARIS of the Consignment Inventory according to the terms of Appendix C, and c) purchase by VOLARIS of Consumables and Expendables based on Consumables and Expendables Support, according to the terms of Appendix C.
 
9.2	Other fines and penalties	
AVEOS shall assume any and all charges, penalties or fines imposed on VOLARIS by any applicable authority having jurisdiction over VOLARIS as a direct result of AVEOS’ negligent acts or omissions related to the Program Services.
 
9.3	Taxes and Duties	
VOLARIS shall be responsible for any and all sales taxes, use taxes, imposts, withholdings, duties, or any other taxes or similar charges levied by the governments or similar authorities of Mexico and Canada on or in connection with any of the Program Services performed hereunder or things delivered under this Agreement, except for taxes levied by any governmental authority based on AVEOS’ net income or capital. Applicable taxes will be separately identified in each invoice.
VOLARIS further agrees to defend, indemnify and hold AVEOS harmless from and against the aforesaid taxes, duties and charges which are VOLARIS’s responsibilities according to this Section 9.3, and all reasonable legal fees, costs and expenses incurred in connection therewith. AVEOS further agrees to defend, indemnify and hold VOLARIS harmless from and against the aforesaid taxes, duties and charges which are AVEOS’s responsibilities according to this Section 9.3, and all reasonable legal fees, costs and expenses incurred in connection therewith.
Where Program Services are performed outside Mexico, Canada and the US the amount of VOLARIS’s tax liability pursuant to this Section 9.3 shall not exceed the amount of tax liability that would have arisen had Program Services been performed entirely in countries listed above. AVEOS will cover and be responsible for any difference in such amount.
Should the increase in VOLARIS’s net cost be attributable to a new Canadian tax or an increase in a currently existing tax applicable in Canada, then VOLARIS shall not be responsible for that tax and net cost increase, which will be borne by AVEOS.
If a claim is made against AVEOS for such taxes, duties or charges, AVEOS shall promptly notify VOLARIS. If requested by VOLARIS in writing, AVEOS shall not pay any such assessment or penalty or interest thereon except under protest, and if payment is made, AVEOS shall use reasonable efforts to obtain a refund thereof, or permit VOLARIS to protest such payment in AVEOS’ name. If all or any part of such assessment, penalty or interest be refunded, AVEOS shall repay to VOLARIS so much thereof as VOLARIS shall have paid. VOLARIS shall pay to AVEOS upon demand VOLARIS’s proportionate share of all expenses incurred by AVEOS to protest such payment or obtain a refund thereof.
 
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9.4	Notices	
Any notices, requests, demands and other communications pursuant to this Agreement, unless otherwise specifically provided in this Agreement, including the schedules, shall be in writing and shall be deemed to have been duly given if delivered by hand, or mailed first class postage prepaid, or sent by facsimile to the respective parties at the following addresses, which may be changed by written notice:
To VOLARIS:
Concesionaria Vuela Compañía de Aviación,
Attn. Chief Operating Officer
Prolongación Paseo de la Reforma No. 490
Piso 1 (Edificio GE)
Col. Santa Fe Pena Blanca
Del. Álvaro Obregón
01210 México, D.F.
Tel: (+5255) 5261 6400
Fax: (+5255) 5261 6460
cc:
Attn. Director Juridico- General Counsel
Prolongación Paseo de la Reforma No. 490
Piso 1 (Edificio GE)
Col. Santa Fe Pena Blanca
Del. Álvaro Obregón
01210 México, D.F.
Tel. (+5255) 5261 6400
Fax. (+5255) 5261 6460
To AVEOS:
AVEOS FLEET PERFORMANCE INC.
AVEOS Headquarters Building – ZIP 8062
2311 Boulevard Alfred-Nobel
Saint-Laurent, QC
CANADA
H4S 2B6

Attention:	  	Legal Department	
	  	Fax: +1 514 856 7164	
Cc:	  	Director, Customer Service	
	  	Fax: +1 514 856 7427	
 
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9.5	Assignment	
Neither Party shall be entitled to assign or transfer this Agreement or any part of its rights or obligations hereunder, without the other party’s prior written consent, which consent shall not be unreasonably withheld or delayed, provided that, AVEOS shall be entitled to assign or transfer this Agreement to any affiliate of AVEOS (or any successors or assigns of AVEOS), or to any acquirer of all or substantially all of the assets and business of AVEOS without the consent of VOLARIS, provided that as a result of any such acquisition, assignment or transfer, (A) VOLARIS shall not bear any increased costs which it would not otherwise have incurred in accordance with this Agreement but for any such acquisition, assignment or transfer, and, (B) the acquirer, assignee or transferee, after giving effect to the acquisition, assignment or transfer (i) has a substantially similar net worth as AVEOS (or any successors or assigns of AVEOS) (ii) has the ability and has confirmed in writing to VOLARIS that it shall carry out the terms of this Agreement, including but not limited to all warranties and penalties which arose prior to such acquisition, assignment or transfer and holds all necessary licenses, permits and authorizations required by the relevant aviation authority, (iii) is not a competitor of VOLARIS or any of its affiliates. VOLARIS acknowledges that as of the effective time of any such acquisition, assignment or transfer, it shall (a) look to the acquirer in respect of all obligations, duties and liabilities of AVEOS under this Agreement and (b) release AVEOS from all obligations, duties and liabilities under this Agreement.
As soon as is reasonably practicable after any such acquisition, assignment or transfer by AVEOS, AVEOS shall notify VOLARIS in writing. Until VOLARIS receives the notice of acquisition, assignment or transfer by AVEOS, all payments made by VOLARIS will be made in accordance with the terms of section 5.8 of this Agreement.
 
9.6	Further assurances	
Subject to the terms and conditions provided in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings, and to avoid the entry or remove any injunctions, temporary restraining orders or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement. In addition, each of the parties hereto agrees, and agrees to instruct its respective counsel, to cooperate with each other to facilitate and to obtain all necessary waivers, consents and approvals at the earliest practicable date.
 
9.7	Confidentiality	
Each Party hereby covenants and agrees to maintain the confidential nature of the terms and conditions of this Agreement and any other information disclosed to such Party pursuant to the terms hereof and/or in any way related to this Agreement and not to disclose the same by any means or for any purpose, except as follows: (1) to its accountants, attorneys and other professional advisors which are bound by a confidentiality agreement, (2) to its directors, officers, employees, its affiliates and their employees, directors and officers who specifically need to know such information, (3) as required by force of law or by judicial or administrative process, (4) to a potential assignee or transferee of all or substantially all of the assets of such Party and such persons respective accountants, attorneys and other professional advisors, in which event such Party shall assure that such potential assignee or transferee agrees to be bound by the same covenant and agreement, (5) as expressly contemplated under this Agreement, or (6) as may be necessary in the opinion of such Party to the exercise of any remedies hereunder; provided that
 
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in case of a disclosure referred to in Clause (3) above, the Party requiring disclosure shall use its commercially reasonable efforts to limit the extent of such disclosure to the extent permitted by law and such disclosing Party will provide the other Party with prompt advance written notice (which shall not be less than ten (10) Business Days in advance of the time for any such mandatory disclosure) so that the other Party may seek a protective order, confidential treatment, waiver or other appropriate protective relief with respect to all or part of such request or requirement, or waive compliance with the provisions of this Agreement with respect to all or part of such request or requirements. In the event that such protective order, confidential treatment, waiver or other remedy is not obtained prior to the deadline for complying with such request or requirement, and upon advice of counsel a Party reasonably believes that it is legally compelled to disclose information, then such Party may disclose only that portion of the information which it is advised in writing by counsel that it is legally compelled to disclose. Each Party will use its reasonable efforts to assist the other Party, and in no event will oppose any action by the other Party to obtain appropriate confidential treatment or protective relief as contemplated by this Section 9.7.
The obligations set forth in this Agreement shall not apply to information disclosed to such Party pursuant to the terms hereof 1) which has come into the public domain through no breach of this Agreement or any other confidentiality obligation between the parties; 2) which was lawfully disclosed to the Receiving Party by a third party not bound by a non-disclosure agreement with the disclosing party; or 3) which was rightfully known to the receiving party under no confidentiality obligation prior to entering into this Agreement, or 4) any disclosure specifically authorized in writing by the disclosing party
Any copies of such information made by the receiving Party shall reproduce the proprietary markings and any other legends contained thereon. This Section 9.7 shall survive termination or expiration of this Agreement for a period of three (3) years. .
Notwithstanding the foregoing, VOLARIS shall have the right to disclose the provisions of this Agreement to any of its codeshare partners for audit purposes without making available the commercial terms.
VOLARIS shall own all of the wordings and language, except pricing, used in all RFP materials (including but not limited to RFP, RFP addendum) Memorandum Of Understanding between the parties dated July 1 st , 2007 and this Agreement and its Appendixes.
Additionally, AVEOS shall not be permitted any publicity in relation to this Agreement, nor may it use VOLARIS’s name, logo or corporate style, without VOLARIS’s prior written consent.
 
9.8	Disputes	
Any dispute, claim, or controversy between the Parties shall be first resolved by discussions between them to find amicable settlement of such dispute, claim, or controversy within sixty (60) Days. If the same cannot be resolved within such period of time, then legal action can be initiated by either Party in the courts specified in Section 9.9.
 
9.9	Governing law	
This Agreement shall be governed by the laws of the state of New York without reference to conflict of laws principles. The provisions of the Convention of the International Sale of Goods shall not apply. Any suit must be brought in courts of the State of New York and the United States District Courts located in the Borough of Manhattan, New York, New York, and the Parties irrevocably consent to personal and exclusive jurisdiction and forum of, and agree to be bound by any judgment and orders rendered by, these courts.
 
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9.10	Order of precedence	
The terms and conditions of this Agreement herein shall take precedence over the “Terms and Conditions” printed on the reverse of AVEOS’ “General Conditions of Sale” or the reverse of AVEOS’ order acknowledgment forms or any standard terms on any document provided by VOLARIS or AVEOS, including, but not limited to purchase orders and repair orders.
 
9.11	Entire agreement	
This Agreement together with its Appendixes embodies the entire agreement and understanding of the Parties and, as of its Effective Date, terminates and supersedes all prior or independent agreements and understandings between the Parties covering the same subject matter.
 
9.12	Severability and interpretation	
Headings in this Agreement are for the purpose of convenience only and shall not be used in the interpretation of any part of this Agreement. In this Agreement, the use of the singular includes the plural and vice versa and the use of any one gender includes all genders. Each provision of this Agreement is severable from the other. In the event that any such provision is declared by a court of competent jurisdiction to be unenforceable, or is rendered unenforceable or illegal by any statutory or regulatory change, the validity of the remainder of this Agreement shall not be affected. In the event that a material provision of this Agreement is rendered unenforceable, the parties shall negotiate in good faith to amend such provision sufficiently to render it enforceable.
 
9.13	Benefit of the agreement	
This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns.
 
9.14	Counterparts	
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute and be one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
 
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IN WITNESS WHEREOF VOLARIS and AVEOS have caused this Agreement to be executed as of the day and year written below.

Aveos Fleet Performance Inc.	  		 	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
			
By: /s/ Robert Comeau                                                	  		 	By: /s/ Fernando Suárez Gerard                             	
Robert Comeau	  		 	Fernando Suárez Gerard	
Vice President Chief Financial Officer	  		 	Chief Financial Officer	
			
I have the authority to bind the company.	  		 	I have the authority to bind the company.	
			
By: /s/ Thomas G. Wilson                                           	  		 		
Thomas G. Wilson	  		 		
Vice President,
Component Maintenance Solutions	  		 		
			
I have the authority to bind the company.	  		 		
 
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APPENDIX A: AIRCRAFT LISTING

AIRCRAFT GENERAL INFORMATION	 	ENGINE INFORMATION	
NO	 	TAIL	 	MSN	 	MANUFACTURER
DATE	 	DELIVERY
DATE	 	MODEL	 	TYPE	 	MODEL	 	POS 1
SN	 	POS 2
SN	
1	 	N473TA	 	1140	 	1999/11/17	 	1999/11/17	 	1999	 	A319-132	 	V2524-A5	 	V10660	 	V10645	
2	 	N474TA	 	1159	 	2000/01/18	 	2000/01/18	 	2000	 	A319-132	 	V2524-A5	 	V10657	 	V10648	
3	 	XA-VOI	 	2657	 	2006/02/28	 	2006/02/28	 	2006	 	A319-132	 	V2524-A5	 	V12285	 	V12146	
4	 	XA-VOL	 	2666	 	2006/02/28	 	2006/02/28	 	2006	 	A319-132	 	V2524-A5	 	V12170	 	V12172	
5	 	XA-VOC	 	2997	 	2007/01/17	 	2007/01/17	 	2007	 	A319-132	 	V2524-A5	 	V12490	 	V12476	
6	 	N502VL	 	3463	 	2008/04/18	 	2008/04/18	 	2006	 	A319-132	 	V2524-A5	 	V12891	 	V12893	
7	 	N503VL	 	3491	 	2008/04/21	 	2008/04/21	 	2006	 	A319-132	 	V2524-A5	 	V12908	 	V12912	
8	 	N504VL	 	3590	 	2008/07/22	 	2008/07/22	 	2006	 	A319-132	 	V2524-A5	 	V13000	 	V13002	
9	 	XA-VOA	 	2771	 	2006/05/30	 	2006/05/30	 	2006	 	A319-133	 	V2527M-A5	 	V12671	 	V12278	
10	 	XA-VOB	 	2780	 	2006/05/30	 	2006/05/30	 	2006	 	A319-133	 	V2527M-A5	 	V12286	 	V12288	
11	 	N501VL	 	2979	 	2007/01/19	 	2007/01/19	 	2007	 	A319-133	 	V2527M-A5	 	V12472	 	V12487	
12	 	XA-VOD	 	3045	 	2007/03/15	 	2007/03/15	 	2007	 	A319-133	 	V2527M-A5	 	V12532	 	V12545	
13	 	XA-VOE	 	3069	 	2007/03/16	 	2007/03/16	 	2007	 	A319-133	 	V2527M-A5	 	V12557	 	V12559	
14	 	XA-VOF	 	3070	 	2007/03/28	 	2007/03/28	 	2007	 	A319-133	 	V2527M-A5	 	V12883	 	V12563	
15	 	XA-VOG	 	3175	 	2007/06/22	 	2007/06/22	 	2007	 	A319-133	 	V2527M-A5	 	V12636	 	V12638	
16	 	XA-VOH	 	3253	 	2007/09/21	 	2007/09/21	 	2007	 	A319-133	 	V2527M-A5	 	V12708	 	V12706	
17	 	XA-VOJ	 	3279	 	2007/10/19	 	2007/10/19	 	2007	 	A319-133	 	V2527M-A5	 	V12728	 	V12736	
18	 	XA-VOK	 	3450	 	2008/03/28	 	2008/03/28	 	2006	 	A319-133	 	V2527M-A5	 	V12274	 	V12886	
19	 	XA-VOO	 	3705	 	2008/11/13	 	2008/11/13	 	2006	 	A319-133	 	V2527M-A5	 	V13093	 	V13095	
20	 	XA-VON	 	3672	 	2008/11/10	 	2008/11/10	 	2006	 	A320-233	 	V2527E-A5	 	V13073	 	V13079	
21	 	XA-VOM	 	3624	 	2008/10/08	 	2008/10/08	 	2006	 	A320-233	 	V2527E-A5	 	V13051	 	V13053	
	 	Spare	 		 		 		 		 		 	V2524-A5	 	V12144	 		
	 	Spare	 		 		 		 		 		 	V2527M-A5	 	V13063	 		
	 	Spare	 		 		 		 		 		 	V2527M-A5	 	V12567	 		
 
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*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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APPENDIX C: CONSUMABLES AND EXPENDABLES
1. Consignment Inventory
AVEOS agrees to provide to VOLARIS a consignment inventory of Consumables and Expendables (hereinafter referred to as “Consignment Inventory”), which will be placed at the Inventory Warehouse in Toluca. Orders placed by VOLARIS from such Consignment Inventory will be subject to payment of the corresponding invoices at the rates specified in Section 3.1.1 of this Appendix C.
The part numbers and associated quantities for the Consignment Inventory will be mutually agreed by VOLARIS and AVEOS at the bi-annual review meeting or at any other time as needed. Consignment Inventory will be replenished by AVEOS according to the terms and conditions of this Agreement.
 
 	1.1.	Execution procedures	
A detailed procedures document will be proposed by AVEOS, reviewed with VOLARIS and agreed by both Parties. This procedures document will include a section detailing performance metrics mutually agreed by both Parties to measure AVEOS’s performance under this Agreement. A procedures document will be jointly developed and mutually agreed upon by AVEOS and VOLARIS. Thereafter, AVEOS shall fully perform all of its obligations with respect to this Appendix C within two (2) months following agreement of the procedures document. AVEOS and VOLARIS will jointly work to ensure full performance of the obligations in this Appendix C to start no later than thirty (30) Days after the Effective Date. This procedures document will be revised as required during the Term.
The procedures, details, terms or provisions of such document shall in no way alter, modify, supersede, diminish or contradict the terms and provisions of this Agreement. In case of conflict between the procedures document and the Agreement, the Agreement shall prevail.
 
 	1.2.	Duties of the Parties	
 
 	1.2.1	VOLARIS duties	
VOLARIS will provide the following services at its own cost:
a) VOLARIS shall supply to AVEOS, on a regular basis, a list of additional Consumables and Expendables to be purchased to supplement the Consignment Inventory.
 
 	1.2.2	AVEOS duties	
AVEOS will provide the following duties at its own cost :
 
 	a)	Consignment Inventory: part numbers and suggested quantities for Consignment Inventory will be provided by VOLARIS.	
 
 	b)	Warehousing and storage capabilities for the Consignment Inventory at the Inventory Warehouse in Toluca.	
 
 	c)	Compliance with applicable FAA or EASA regulation regarding storage of Consumables and Expendables.	
 
 	d)	Appropriate workforce to perform administration, distribution and handling of the Consignment Inventory	
 
 	e)	AVEOS shall at all times keep ownership of the Consignment Inventory. However VOLARIS shall be entitled to order from said Consignment Inventory.	
 
 	f)	Replenishment at minimum inventory level to be mutually agreed between the Parties or at VOLARIS’ request according to fleet and operation evolution. After the delivery of the Consignment Inventory, AVEOS will immediately place the order to replenish any items of the Consignment Inventory when the agreed minimum stock level is reached.	
 
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 	g)	AVEOS shall ensure that paperwork, as required to comply with any airworthiness and legal requirements related to the Consumables and Expendables, accompanies any delivery of Consumables or Expendables. The required paperwork shall be agreed within thirty (30) Days of the execution of this Agreement.	
 
 	h)	During the Term AVEOS shall provide in an electronic format any changes to the levels of this Exchange Inventory on a day-to-day basis.	
For each request, VOLARIS shall send an order to AVEOS. Such order shall specify:
 
 	(i)	Description of the Consumables or Expendables,	
 
 	(ii)	The part number, if applicable,	
 
 	(iii)	The quantity requested,	
 
 	(iv)	The delivery time.	
The order shall be addressed to AVEOS, as per the contact details specified in the procedures document.
The Consumables and Expendables necessary to replenish the Consignment Inventory will be shipped, as soon as possible.
2. Consumables and Expendables Support
Upon VOLARIS’ request, AVEOS will provide Consumables and Expendables which are not included in the Consignment Inventory, at the rates specified in 3.1.2 of this Appendix C.
VOLARIS shall provide AVEOS with a list of necessary Consumables and Expendables to be purchased by AVEOS on behalf of VOLARIS.
For each request, VOLARIS shall send an order to AVEOS. Such order shall specify:
 
 	(i)	Description of the Consumables or Expendables,	
 
 	(ii)	The part number, if applicable,	
 
 	(iii)	The quantity requested,	
 
 	(iv)	The delivery time	
The order shall be addressed to AVEOS, as per the contact details specified in the procedures document.
The Consumables or Expendables will be delivered and invoiced to VOLARIS as specified in the delivery time request, stated above.
3. Financial Conditions
 
3.1	Pricing	
 
3.1.1	Consumables and Expendables drawn by VOLARIS from the Consignment Inventory will be invoiced at a price of ***** of OEM Catalogue List Price ***** mark-up during the Term. Mark up value is capped at ***** per item.	
 
3.1.2	Non-consigned Consumables and Expendables supplied by AVEOS upon specific request from VOLARIS according to the Consumables and Expendables Support will be invoiced at a price of ***** of OEM Catalogue List Price plus ***** mark-up during the Term. Mark up value is capped at ***** per item.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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3.1.3	Any shipping costs and related duties and taxes which arise pursuant to AVEOS’s provisioning of Consumables and Expendables with respect to Sections 3.1.1 and 3.1.2 of this Appendix C shall be borne ****. The duties and taxes which arise pursuant to VOLARIS’ usage of the Consignment Inventory will be paid *****.	
4. Additional terms
 
4.1	Shipping procedure - packing - transportation and delivery	
 
4.1.1	General	
Each Party undertakes that any Consumables or Expendables sent by one Party to another for the purpose of this Agreement shall be packed in accordance with the manufacturer’s and all applicable ATA 300 recommendations and, if applicable, regulations concerning transportation of hazardous material. The Parties undertake to maintain the packing containers or frames in good and reusable condition, if applicable.
 
4.1.2	Packing - transportation and delivery	
 
 	(i)	If applicable according to Section 4.5 of this Appendix C, VOLARIS shall return to AVEOS all the Consumables and Expendables covered by this Agreement Delivery Duty Unpaid (DDU) at VOLARIS’ base at Toluca International Airport.	
 
 	(ii)	All Consumables and Expendables will be put at the disposal of VOLARIS for collection DDU at VOLARIS’ base at Toluca International Airport.	
 
4.1.3	Shipping address	
CONCESIONARIA VUELA COMPAÑIA DE AVIACIÓN, S.A. DE C.V.
Materials Manager
Aeropuerto Internacional de Toluca
Puerta No.1
Almacén Técnico de Volaris
San Pedro Totoltepec, C.P. 50130
Toluca Estado de México, México
Tel.52 (722) 277 1200 Ext. 1325
Fax 52 (722) 277 1283; 52 (722) 277 1282
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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4.2	Transfer of risk and title	
 
4.2.1	Transfer of risk	
Risks shall be transferred from AVEOS to VOLARIS upon acceptance by VOLARIS at VOLARIS’ base at Toluca International Airport.
 
4.2.2	Transfer of title	
The Consumables and Expendables of the Consignment Inventory shall remain the property of AVEOS until acceptance from the Consignment Inventory by VOLARIS.
The Consumables and Expendables provided to VOLARIS under the Consumables and Expendables Support will pass to VOLARIS upon acceptance by VOLARIS.
Transfer of title will occur without further act, free and clear of all liens.
 
4.3	Warranty	
AVEOS shall assign to VOLARIS any and all manufacturer warranties with respect to all Consumables and Expendables (to the extent that such warranties may effectively be assigned). These manufacturer warranties shall be the sole warranties, and exclude all other warranties in respect of the Consumables and Expendables covered under this Agreement.
 
4.4	Insurance	
AVEOS shall bear the entire risks of loss of the Consignment Inventory.
VOLARIS shall not be responsible for loss or damage resulting from normal wear and tear and depreciation while in AVEOS’ custody.
 
4.5	Options upon termination	
At termination date of the Agreement, VOLARIS shall have the option to purchase all or a part of the Consignment Inventory at the original purchase price.
 
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*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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APPENDIX E: PARTS EXCHANGE PROCESS
 
 	1.	Request for Exchange Component or Part 	
 
 	a.	VOLARIS will make a request for a serviceable Component or Part (planned in advance) or directly sends an unserviceable Component or Part to AVEOS’ third party warehouse and logistics provider (‘ Logistics Provider’ ) with type of request, ***** process in accordance with the inventory classification.	
 
 	b.	Logistics Provider will process the request through to AVEOS inventory facilities and advise VOLARIS of delivery status	
 
 	c.	Logistics Provider will route the Component or Part to the designated repair facility.	
 
 	d.	If there is serviceable Component or Part inventory located at Logistics Provider, then such serviceable Component or Part will be delivered to VOLARIS in accordance with the criticality priority. Title of the Component or Part shall transfer from the inventory provider to VOLARIS.	
 
 	e.	VOLARIS shall deliver within ***** of removal from the Aircraft the corresponding unserviceable Component to Logistics Provider. Should such unserviceable Component is not returned within the stipulated time period, then the Component shall be excluded from any Program Service Performance and Penalty calculations, if applicable. Title to such unserviceable Component shall transfer from VOLARIS to AVEOS’ inventory provider.	
 
 	f.	In the event that the required Component is not located at Logistics Provider, Logistics Provider will then process the request through to AVEOS inventory facilities and advise VOLARIS of delivery status	
 
 	g.	VOLARIS shall act as Importer of Record for all importation of Components and Parts.	
 
 	h.	Logistics Provider, will perform initial inspection of the Components or Parts and confirm receipt of required documentation.	
 
 	i.	Logistics Provider will obtain a ‘Certificate Deposito’ and retain custody of the Allotment Inventory pending an Exchange request from VOLARIS.	
 
 	j.	Logistics Provider will track Component or Part at a serial number level.	
 
 	2.	Allotment Inventory – Toluca	
 
 	a.	VOLARIS will provide a listing of Component and Parts, as specified in Appendix I, designated Category A, B, C, D.	
 
 	b.	AVEOS, *****, will establish the level of inventory in Toluca sufficient to meet the performance obligations as set out in Appendix G.	
 
 	c.	VOLARIS shall act as Importer of Record for all importation of Components and Parts.	
 
 	d.	Logistics Provider will perform initial inspection of the Components or Parts and confirm receipt of required documentation.	
 
 	e.	Logistics Provider will obtain a ‘Certificate Deposito’ and retain custody of the Allotment Inventory pending an Exchange request from VOLARIS.	
 
 	f.	Logistics Provider will track Component or Part at a serial number level.	
 
 	2.	AOG Handling	
Should VOLARIS request a serviceable Component with no inventory available in Toluca nor at its United States or Canadian inventory location, AVEOS (through Logistics Provider) will coordinate all activities through AVEOS’ AOG desks to obtain such serviceable Component. Should AVEOS be unsuccessful in obtaining such serviceable Component, *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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APPENDIX F: ENGINEERING SERVICES
The on-site representative should facilitate the following engineering services.
1. Liaison among AVEOS and VOLARIS engineering & maintenance divisions.
 
 	a)	Analysis of VOLARIS’s maintenance & reliability reports	
 
 	b)	Figures (NFF, special cases investigations) presentation in VOLARIS’s maintenance and reliability meetings.	
 
 	c)	Report presentations (retrofit programs, improvement programs) in VOLARIS’s maintenance and reliability meetings.	
 
 	d)	Obtain repair information when requested by VOLARIS engineering, as an example, when a unit is offered.	
2. Retrofit and other improvement programs technical & administrative control.
 
 	a)	Perform retrofit and other improvement programs control in strict adherence to VOLARIS’s internal procedures.	
 
 	b)	Obtain and provide commercial offers in response to VOLARIS’s engineering & maintenance department requests.	
 
 	c)	Keep retrofit or other improvement programs control matrix up to date.	
 
 	d)	Plan and coordinate retrofit or other improvement programs accomplishment with VOLARIS’s engineering, planning and maintenance departments.	
 
 	e)	Retrofit programs and other modification projects technical and economical impact measurement reports.	
3. NFF technical & administrative control
 
 	a)	Perform all NFF control in strict adherence to VOLARIS’s internal procedures.	
 
 	b)	Keep NFF VOLARIS’s Information and Computations up to date.	
 
 	c)	Perform NFF Investigations.	
 
 	d)	Keep deep-test Information and associated controls up to date.	
 
 	e)	Keep “on-watch” (prone to repeated failure) Components control updated and available to VOLARIS.	
 
 	f)	For this contract purposes, ***** would be accommodated to include and cover all Components listed in the “in-Scope” list, provided the corresponding VOLARIS provides proof of failure and demonstrate failure occurred.	
 
 	g)	Components meeting previous criteria would not be considered NFF and would not be counted against NFF figure.	
4. Rogue Part technical & administrative control
 
 	a)	Perform Rogue Parts Control in strict adherence to VOLARIS’s internal procedures.	
 
 	b)	Keep Rogue Parts VOLARIS’s Information and Computations up to date.	
 
 	c)	Perform Rogue Parts investigations and obtain final solutions.	
 
 	d)	Keep VOLARIS’s repair and exchanges information (Exchange Component and Core Units) up to date and available to VOLARIS.	
5. Engineering Investigations
 
 	a)	Perform engineering investigations in strict adherence to VOLARIS’s internal procedures.	
 
 	b)	Perform engineering investigations when failure mode points out to component poor performance.	
 
 	c)	Engineering Investigation would be validated by corresponding VOLARIS engineering departments.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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6. MTBR Analysis
 
 	a)	Perform MTBR Analysis and Surveillance in adherence to VOLARIS’s internal procedures.	
 
 	b)	Keep MTBR Information and Computations up to date.	
 
 	c)	Perform MTBR Investigations and obtain final solutions when alerts are triggered.	
 
 	d)	Special attention and work would be devoted to premature failures, which should be adequately clarified and preventive action must be proposed.	
In order to perform these tasks, AVEOS would obtain access to VOLARIS’s relevant information resources, which are adequate. Correspondingly, VOLARIS would obtain access to adequate information resources, sufficient for proper validation and approval of reports and data produced by AVEOS.
No report, control, chart or data issued by AVEOS would be considered official unless the same has been properly analyzed accepted and approved by the corresponding VOLARIS engineering departments.
AVEOS would establish on-line information systems which would allow the VOLARIS representatives direct access to up-to-date repair information needed for engineering analysis and investigations.
 
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APPENDIX G: SOFT-TIMES FOR COMPONENTS

PART DESCRIPTION	  	P/N	  	MINOR SOFT
TIME	
COOLER I.D.G. OIL	  	6844-000	  	*****	
FUEL PUMP	  	5009913G	  	*****	
FUEL METERING UNIT (FMU)	  	8061-637	  	*****	
FUEL METERING UNIT (FMU) TRW - Lucas	  	FMU560/570	  	*****	
RAD. AIRE B.#4-ACAC	  	D1876-1000A	  	*****	
HPT STG. 10 AIR MAKE UP VALVE	  	5860010-108	  	*****	
HPT STG. 10 AIR MAKE UP SOLENOID	  	AC69674	  	*****	
ACC VALVE	  	5860016-134	  	*****	
ACC ACTUATOR	  	5860017-139	  	*****	
OIL PUMP & amp; FILTER	  	4A7110	  	*****	
ACOC - AIR COOLED OIL COOLER	  	50026001-1	  	*****	
FCOC - FUEL COOLED OIL COOLER	  	55022001-11	  	*****	
OIL COOLER AIR MODULATING VALVE	  	8910-620	  	*****	
OIL SCAVENGE PUMP	  	4A7121	  	*****	
#4 BRG. COMPART. SCAVENGE VALVE	  	32F0003	  	*****	
The soft-times specified in this Appendix G are subject to change by a mutual agreement of the Parties.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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APPENDIX H: PROGRAM SERVICES PERFORMANCE
 
1.	ADMINISTRATION OF POOL FOR COMPONENTS	
 
 	1.1	Service Level	

PRIORITY CODE 1	  	DEFINITION	  	Routine Delivery	
CODE 1	  	NO-GO	  	Not to exceed *****	
CODE 2	  	GO-IF	  	Not to exceed *****	
CODE 2A	  	GO-IF	  	Not to exceed *****	
CODE 2B	  	GO-IF	  	Not to exceed *****	
CODE 2C	  	GO-IF	  	Not to exceed *****	
CODE 2D	  	GO	  	*****	
CODE 3	  	GO	  	*****	
CODE 3A	  	GO IF [Customer
Convenience
Items]	  	Not to exceed *****	
NOT CODED 2	  	Engine LRUs	  	*****	
 
Note  1:	VOLARIS may revise the category of a component upon advice to Aveos and agreement on effectively of such revision.	
Note  2:	‘Not-Coded’ Components will not be considered for pool performance measurement purposes.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	1.2	Service Level Agreement	
Service Level performance will be monitored monthly and corrective action taken to ensure that the agreed Service Levels are maintained.
Penalties, if any, will be calculated on the basis of performance over a ***** period and assessed on the corresponding six month cumulative invoices for pool inventory access.
In the event of a Service Level credit is due to VOLARIS, then a credit note will be issued and applied to the subsequent month`s invoice.
In addition, if the Service Provider is late ***** for the same Part Number within a ***** period, then VOLARIS reserves the right to purchase an additional part and place it within VOLARIS inventory to use for the lasting of the Pool contract, at cost to the Service Provider. In the event that the Service Provider has lower than ***** on Global Service Level ***** in succession, or ***** out of *****, VOLARIS will have the right to terminate the Agreement in accordance with Section 8.2.6.
In the event that the Service Provider is not able to provide the required part within the specified timeframe, VOLARIS shall be allowed to rent or purchase, if necessary, the Part required to fill the requirement at cost to the Service Provider, including logistics, duties and taxes. In advance of this occurrence, the Service Provider will make all reasonable efforts to acquire the Part at their own expense.
In case of an AOG situation caused by a non delivered component from the Pool, the Service Provider should cover the total expenses derived from this failure to VOLARIS, including but not limited to: purchase, exchange, lease, loan or any other method determined by VOLARIS to cover the requirement as well as commercial repercussions like passenger protections, OTP warranty program and others. Penalties assessed as commercial repercussions are to be capped at ***** per AOG caused by non delivery from the pool.
 
 	1.3	Service Level and Penalties for Pool Access	
Service Level : Shall be calculated according to the following rules:
Demand events shall be fulfilled within ***** at an ***** percent success rate
Demand events shall be fulfilled within ***** at an ***** percent success rate
Penalty Application: At the end of a given ***** period, the total number of successful delivery events to for both the ***** delivery will be calculated and compared to the Pool Service Level threshold success rate for the ***** period. For the purposes of clarity, the penalty, calculation shall exclude statutory holidays in the U.S or Mexico.
Example: [Review Period: February – July inclusive]
120 out of 150 requests delivered within *****
28 out of the remaining 30 requests delivered within *****
150 total requests
*****
Such percentage shall then be applied to the cumulative total of the monthly Pool Access invoices for the preceding 6 months and paid as a credit invoice, to be applied to the next issued invoice.
Example:
Cumulative monthly invoice amounts for Pool Access for 6 month period = *****
Credit to be applied = *****
 
 	1.4	Transition Agreement and Plan	
Subsequent to the Effective date of this amended and restated Agreement, the parties, agree to the following transition and implementation plan and conditions:
 
 	1.4.1	Inventory Pool : The Inventory pool shall be established for all Categories as of the Effective Date of the Agreement.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	1.4.2	Penalty Assessment : Penalty calculation and assessment will apply for all items as of the Effective Date.	
 
 	1.4.3	Special Handling During Transition : For the duration of the initial thirty (30) days from the Effective Date, should VOLARIS declare an AOG or similar urgent requirement for a listed Part, then Aveos will expedite the delivery of the required Part to VOLARIS on a best commercial efforts basis.	
 
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*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 45 of 45

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.04
EXECUTION COPY
Lease No. 2
THIS LEASE is made the 21st day of August 2008 BETWEEN
 
(1)	ENGINE LEASE FINANCE CORPORATION (“Lessor”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V . (d/b/a Volaris) (“Lessee”).	
WHEREAS Lessor and Lessee have entered into an aircraft engine general terms agreement (the “GTA”, a copy of which is attached hereto as Exhibit A which is hereby ratified and confirmed) dated 28 April 2006 and this is a Lease as defined therein.
IT IS HEREBY AGREED : 
 
1.	Lease	
By the execution and delivery of this Lease, Lessor agrees subject to Lessor acquiring title to the Engine on the Delivery Date to lease the Engine to Lessee and Lessee agrees to lease the Engine from Lessor upon the terms set out in the GTA (which are incorporated herein and form part hereof) and the more particular terms set out herein:

		
Engine:	  	One (1) International Aero Engines model V2527M-A5 engine bearing manufacturer’s serial number V13063 (described on the International Registry drop down menu as INTERNATIONAL AERO ENGINES model V2500-A5 with serial number V13063) rated over 550 horsepower with transportation stand and MPV bag as more particularly described in Appendix A;	
		
Delivery Condition:	  	as specified in Appendix A to the Acceptance Certificate executed and delivered by Lessee on the Delivery Date;	
		
Delivery Location:	  	the State of Delaware, USA;	
		
Scheduled Delivery Date:	  	21 August 2008 or such other date as may be agreed between Lessor and Lessee and on which date Lessor acquires title to the Engine;	
		
Final Delivery Date:	  	31 August 2008 or such other date as may be agreed in writing between Lessor and Lessee;	
		
Agreed Value:	  	As defined in Appendix D;	
		
Rent:	  	As defined in Appendix D;	

			
		
Deposit:	  	As defined in Appendix D;	
		
Lessor’s Security:	  	As defined in Appendix D;	
		
Default Rate:	  	As defined in Appendix D;	
		
Side Letter:	  	As defined in Appendix D;	
		
Scheduled Expiry Date:	  	the date falling either 62 or 68 months after the Delivery Date which shall be confirmed in the Acceptance Certificate by Lessee;	
		
Option Exercise Date:	  	the date (if any) on which Lessee exercises the option granted by Clause 2 by delivering notice to Lessor in accordance therewith;	
		
Primary Lease Period:	  	the period commencing on the Delivery Date and ending on the Scheduled Expiry Date;	
		
Secondary Lease Period:	  	the period (if any) to be agreed by Lessor and Lessee commencing on the Scheduled Expiry Date;	
		
Secondary Lease Period Expiry Date:	  	the date scheduled as the last day of the Secondary Lease Period on the Option Exercise Date;	
		
Engine Sale Agreement:	  	the engine sale agreement dated on or about the date hereof made between Lessee and Lessor;	
		
Hourly Reserve:	  	As defined in Appendix D;	
		
Level 1 ESV:	  	As defined in Appendix D;	
		
Level 2 ESV:	  	As defined in Appendix D;	
		
Engine Heavy Maintenance	  	As defined in Appendix D;	
		
LLP Reserve:	  	As defined in Appendix D;	
		
Major Modules:	  	As defined in Appendix D;	
		
Minimum Flight Hours and Cycles remaining on Redelivery:	  	As defined in Appendix D;	
		
Minimum EGT Margin at Redelivery:	  	As defined in Appendix D;	
		
Utilisation Report:	  	the report set out in Appendix C;	
		
Redelivery Location:	  	Miami International Airport, Florida, United States of America or such other location as Lessor and Lessee shall agree;	
		
Lessee’s Country:	  	Mexico.	

2.	Option	
Provided that no Relevant Event has occurred and is continuing on the Option Exercise Date or the Scheduled Expiry Date, the parties may opt to lease the Engine for the Secondary Lease Period. The option may be exercised by an unconditional notice to Lessor not later than 3 months prior to the Scheduled Expiry Date. Once such notice has been given by Lessee and received by Lessor, it shall be irrevocable and shall oblige Lessee to lease the Engine for the Secondary Lease Period upon the terms of the GTA provided that Lessor has consented thereto which consent shall be at Lessor’s sole discretion.
 
3.	Additional Provisions	
 
3.1	The following shall be additional conditions precedent to this Lease and shall be satisfied on or prior to the Delivery Date:	
(a) Lessee delivering to Lessor the written undertaking from the Manufacturer referred to in paragraph 2 of Appendix D together with a certified copy of the relevant portions of the FHA between Lessee and Manufacturer reflecting the scope of services provided thereunder and any conditions as to the availability of such services provided however that Lessor shall have entered into a non-disclosure agreement with Manufacturer pursuant to which Manufacturer has consented to the disclosure of such provisions of the FHA to Lessor;
(b) the board of directors of Lessee approving this Lease and the transactions contemplated herein;
(c) Lessor receiving title to and delivery of the Engine from Seller under the Engine Sale Agreement;
(d) Lessee’s delivery of the Engine to the Delivery Location at Lessee’s cost;
(e) Lessor receiving the Side Letter duly executed by Lessee; and
(f) Satisfactory inspection by Lessor of the Engine and the Engine Technical Records prior to delivery of the Engine.
 
3.2	The following shall be conditions subsequent to this Lease:	
(a) Lessee delivering to Lessor a copy of the import permit ( pedimento de importación) within 5 Business Days of the Delivery Date; and
(b) Removal of the Engine from the Delivery Location no later than 2 Business Days after the Delivery Date.
Lessee agrees that any failure to satisfy (a) and (b) above shall constitute an Event of Default.
 
3.3	The following shall be additional redelivery conditions under this Lease:	
(a) the Engine shall not have been operated by Lessee or any Sublessee at a thrust rating higher than V2527M-A5 for more than five per cent (5%) of the total time in Flight Hours or Cycles since last Engine Heavy Maintenance or new (whichever is the latter); and

(b) notwithstanding the provisions of Clause 20.3 and item 3 (b) of section 2 to Schedule 4 of the GTA, the Engine shall be redelivered with an FAA 8130-3 and EASA Form 1 (dual release) serviceability tag.
 
3.4	Lessor hereby confirms that any maintenance and repair performer or service agency licensed by the FAA or EASA to undertake maintenance work on the Engine and used by the Manufacturer to maintain the Engine under the FHA is hereby approved as an Authorised Repairer.	
 
4.	Amendment and/or disapplication of certain GTA provisions incorporated in this Lease by cross-reference	
 
4.1	The following sentence is added at the end of Clause 1.4 of the GTA:	
“Lessee shall be responsible for all costs associated with the shipment of the Engine from the Delivery Location, which shall include but not be limited to insurance, storage costs, customs duties, fees or other charges.”
 
4.2	The parties agree that Clause 17.8 of the GTA shall not apply to this Lease.	

			
SIGNED for and on behalf of	
ENGINE LEASE FINANCE CORPORATION	
		
By:	 	/s/ Michael Moloney	
Name:	 	Michael Moloney	
Title:	 	Executive Vice President	

in the presence of:	
Name :	
Occupation :	
Address :	
SIGNED for and on behalf of
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (d/b/a Volaris)

By:	 	/s/ Fernando Suárez Gerard	
Name:	 	Fernando Suárez Gerard	
Title:	 	CFO	

in the presence of:	
Name :	
Occupation :	
Address :	

Appendix A –Acceptance Certificate
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (d/b/a Volaris) (“Lessee”) hereby acknowledges that on      at      hours it accepted delivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated              2008 (the “Lease”) made between Engine Lease Finance Corporation (“Lessor”) and Lessee and confirms that:-
 
(a)	at              it has received from Lessor possession of one IAE V2527M-A5 engine, bearing manufacturer’s serial number V13063, all parts attached thereto and thereon in a new condition, as more particularly described in Annex 1 hereto;	
 
(b)	following inspection, it has accepted delivery of the Engine “as is where is”;	
 
(c)	the Engine Flight Hours and Cycles and the Life Limited Parts Flight Hours and Cycles are all zero and such figures shall be used for the purpose of calculating any payments due to be made by Lessee at the time of Redelivery of the Engine to Lessor;	
 
(d)	the Engine and the Engine Technical Records as more particularly described in Annex 1 have been delivered to and accepted by Lessee on the Delivery Date and, as between Lessor and Lessee, are to Lessee’s full satisfaction and in accordance with the provisions of the Lease;	
 
(e)	the Lease Period commenced on the date of this Certificate and Lessee became obliged to pay to Lessor the amounts provided for in the Lease and the Side Letter including in particular a Deposit of $[            ] and Rent of US$[            ] payable in advance on the [    ] day of each month;	
 
(f)	the Engine is insured in accordance with the terms of the Lease;	
 
(g)	all representations and warranties made by Lessee pursuant to the Lease remain and if made on this date, would be true and correct in all respects;	
 
(h)	no Relevant Event has occurred or will result from Delivery taking place;	
 
(i)	it has obtained all required permits, authorisations and licences necessary to lease and operate the Engine pursuant to and in accordance with the Lease;	
 
(j)	the Agreed Value of the Engine for the purposes of the Lease is $[            ]; and	
 
(k)	the Scheduled Expiry Date for the purposes of the Lease is the date falling [62/68] months from the date hereof.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
IN WITNESS WHEREOF, Lessee has caused this Acceptance Certificate to be executed by its duly authorised officer as of the date first set forth above.
Dated this      day of              2008
 
6

Signed for and on behalf of: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (d/b/a Volaris)

By:	 	 	
Name:	 	 	
Title:	 	 	
 
7

Annex 1 to Appendix A (Acceptance Certificate)
Description of Engine
 
1.	Description	
 
1.1	Engine Type: New and unused V2527M-A5 in bare configuration with a transportation stand and MPV bag;	
 
1.2	Serial no.: V13063;	
 
1.3	Manufacturer: IAE International Aero Engines AG; and	
 
1.4	Transportation Stand: P/N IAE6R18897; Cradle S/N: c502 and Base S/N b496;	
 
1.5	MPV Bag: P/N IAE6R19563;	
 
1.6	Maintenance Programme references: on-wing: Volaris Maintenance Program Rev 08 dated August 01, 2008; shop:                     	
 
2.	Condition	
The Engine is new and unused, tagged serviceable with both TSN and CSN being zero but otherwise in the condition noted in the following documents, copies of which were delivered to Lessee on or before Delivery:-
 
2.1	Export certificate of airworthiness at manufacture;	
 
2.2	Vital Statistics Log;	
 
2.3	Airworthiness Directive status; and	
 
2.4	Test cell Report.	
 
8

Appendix B – Redelivery Acceptance Certificate
ENGINE LEASE FINANCE CORPORATION (“Lessor”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (d/b/a/ Volaris) (“Lessee”) hereby acknowledge that on [            ] at [    ] hours the Lessor accepted Redelivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated [            ] (the “Lease”) made between Lessor and Lessee and confirm that at [Delivery Location] Lessor has received from Lessee possession of:-
 
(a)	one IAE V2527M-A5 aircraft engine, bearing manufacturer’s serial number V13063, all Parts attached thereto and thereon as more particularly described in Annex 1; and	
 
(b)	the Engine Technical Records as listed in Section 2 of Schedule 4 of the general terms agreement incorporated by reference into the Lease, including all manuals, technical records and historical information regarding the Engine and all Parts attached thereto and thereon;	
Lessor and Lessee also hereby acknowledge that:-
 
(c)	the Engine Flight Hours and Cycles since new or last ESV level 1 and ESV Level 2 and the Life Limited Parts Flight Hours and Cycles since new are as stated in Annex 2 and that such figures shall be used for the purpose of calculating any payments due to be made by Lessee to Lessor in accordance with the Lease;	
 
(d)	the Engine and Engine Technical Records are hereby accepted by Lessor subject to (i) the provisions of the Lease and (ii) correction by Lessee within [number of days] of the discrepancies specified in Annex 3 hereto which Lessee hereby undertakes to correct the discrepancies to the complete satisfaction of Lessor; and	
 
(e)	the leasing of the Engine by Lessor to Lessee pursuant to the terms of the Lease is hereby terminated without prejudice to Lessee’s continuing obligations under the terms of the Lease including, without limitation subparagraph (d) above.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
Dated this [    ] day of [            ]
Signed for and on behalf of:

CONCESIONARIA VUELA	 		 		 	ENGINE LEASE FINANCE	
COMPAÑIA DE AVIACION, S.A.	 		 		 	CORPORATION	
DE C.V. (d/b/a Volaris)	 		 		 		
					
By:	 	 	 		 		 	 	
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	
 
9

Annex 1 to Appendix B (Redelivery Acceptance Certificate )
Description of Redelivery Engine
 
1.	Description	
 
1.1	Engine Type: V2527M-A5 in bare configuration with a transportation stand and MPV bag;	
 
1.2	Serial no.: V13063	
 
1.3	Manufacturer: IAE International Aero Engines AG;	
 
1.4	Transportation Stand: P/N IAE6R18897; Cradle S/N: c502 and Base S/N b496;	
 
1.5	MPV Bag: P/N IAE6R19563;	
 
1.6	Maintenance Programme references: on-wing: [            ];shop:[            ]	
 
2.	Condition	
At Redelivery the Engine shall be in the condition noted in Annex 2 to this Redelivery Acceptance Certificate and in the Technical Records listed in Section 2 to Schedule 4 of the GTA
 
10

Annex 2 to Appendix B (Redelivery Acceptance Certificate)
Redelivery Condition
 
11

Annex 3 to Appendix B (Redelivery Acceptance Certificate)
Engine and Engine Technical Record discrepancies at Redelivery
 
12

Appendix C - Utilisation Report
[On Lessee’s headed notepaper]
ENGINE MONTHLY UTILISATION REPORT
 
TO:	ENGINE TECHNICAL RECORDS MANAGER	
ENGINE LEASE FINANCE CORPORATION
SHANNON BUSINESS PARK,
SHANNON, CO. CLARE, IRELAND.
FACSIMILE NO. +353 61 361785
EMAIL: utilisation@elfc.com
ENGINE TYPE: V2527M-A5 in bare configuration 
M.S.N. V13063
REPORT DATE: [                    ]
Section 1 must be completed and returned within 10 days after the end of each calendar month and on the termination date.
Section 2 must be completed after each Engine’s Shop Visit for any reason.
SECTION 1
Date Installed
Aircraft Reg.
Aircraft owner:
Present wing/tail Location
T.S.N.
C.S.N.
Hrs Flown this mth
Cycles flown this month
Thrust Rating this month
SECTION 2
Date last shop visit
TSN at shop visit
CSN at shop visit
Cycles to next shop visit
Next limiting component
IMPORTANT NOTE
Attach listing of all modifications, Airworthiness Directives, service bulletins carried out during each Engine Shop Visit as it occurs. Also attach a copy of the Engine Shop Visit findings report and the latest revision to the Engine’s Life Limited Parts (disk) profile.
Signed:
Authorised Quality Assurance/Engineering Officer
 
13

Appendix D – Commercial Terms
The definitions and other commercial and financial terms set forth in this Appendix D shall apply to the leasing of the Engine under the Lease.
The commercial and financial information contained in this Appendix D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee shall, and any of their assignees, upon becoming such shall agree that they shall, treat this Appendix D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any person, except to (a) its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties and sublessees as necessary or appropriate for the leasing transaction which is the subject hereof; (b) as may be required by applicable law or pursuant to an order, or a valid and binding request, issued by any court or other government entity having jurisdiction over Lessor, or Lessee or the assignee of any of them, as the case may be, or (c) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Engine and the Lease.
None of the foregoing confidentiality provisions shall apply to Lessor after an Event of Default has occurred and is continuing.
DEFINITIONS

		
Agreed Value	  	means the amount calculated in accordance with the Side Letter and confirmed in the Acceptance Certificate;	
		
Rent	  	means the amount calculated in accordance with the Side Letter and confirmed in the Acceptance Certificate;	
		
Deposit	  	means the amount calculated in accordance with the Side Letter and confirmed in the Acceptance Certificate;	
		
Lessor’s Security	  	not applicable;	
		
Side Letter	  	means the side letter dated as of the date of the Lease between Lessor and Lessee for the purpose of determining the Rent, Deposit and Agreed Value amounts in respect of this Lease	
		
Default Rate	  	***** per annum over US Prime, compounded monthly and calculated on the basis of a 360 day year;	
		
Hourly Reserve	  	subject to paragraph 2 below of this Appendix D, the applicable Dollar amount specified in Annex 1 hereto. The amounts stated in Annex 1 assume that the Engine will be operated at a thrust rating of V2527-A5 or lower and are adjustable in accordance with Clause 4.2 of the GTA whether or not Lessee is obligated to pay Hourly Reserves;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
14

			
		
Level 1 ESV:	  	an Engine Shop Visit at which the minimum workscope applied to each of the Major Modules is not equal to the Minimum eMMP Maintenance Level for ESV2 as stated in Annex 2 but is at least equal to the Minimum eMMP Maintenance Level for ESV1 as stated in Annex 2 and with a minimum Life Limited Part build life to be agreed between Lessor and Lessee reflecting Lessee’s expected minimum release life for Life Limited Parts following the application of such workscope provided always that no Life Limited Part shall have less than 9,000 Cycles remaining to scheduled removal;	
		
Level 2 ESV:	  	an Engine Shop Visit at which the minimum workscope applied to each of the Major Modules is at least equal to the Minimum eMMP Maintenance Level for ESV2 as stated in Annex 2 and with a minimum Life Limited Part build life to be agreed between Lessor and Lessee reflecting Lessee’s expected minimum release life for Life Limited Parts following the application of such workscope provided always that no Life Limited Part shall have less than 11,000 Cycles remaining to scheduled removal;	
		
Engine Heavy Maintenance	  	An Engine Shop Visit where either a Level 1 ESV or Level 2 ESV was performed;	
		
LLP Reserve:	  	***** per Cycle and adjustable in accordance with Clause 4.3 of the GTA;	
		
Major Modules:	  	as specified in Annex 2;	
		
Minimum Flight Hours and Cycles remaining on Redelivery:	  	not more than 3,000 Flight Hours since new or last Engine Heavy Maintenance and not less than 7,500 Cycles remaining on any Life Limited Part until the next Engine Heavy Maintenance;	
		
Minimum EGT Margin at Redelivery:	  	sufficient (following a test cell run) to achieve the balance of the then Life Limited Part build life remaining at Redelivery based upon Lessee’s historical performance loss in EGT margin in the preceding three (3) years of operation for engines of the same type as the Engine;	
 
1.	Redelivery Condition Compensation	
 
1.1	Lessee shall compensate Lessor for use of the Engine between Delivery and Redelivery by an amount equal to $X by applying the following formula:	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
15

	
occurred in the three years prior to Redelivery for similar engines to the Engine operated at the same thrust rating as the Engine.	
The process of obtaining quotations for C1 and C2 above shall commence two months prior to Redelivery and Lessee herby agrees to furnish Lessor with all necessary data to substantiate data to be used in the formula above.
 
1.2	Lessee shall compensate Lessor for use of each Life Limited Part between Delivery and Redelivery by an amount equal to $Y by applying the following formula:	
*****
 
1.3	Provided that no Relevant Event has occurred and is continuing, Lessor shall apply Hourly Reserves and LLP Reserves then held and not subject to a claim for reimbursement or payment to Lessee in accordance with the GTA to the compensation amounts payable to Lessor under this paragraph 1.	
 
2.	Hourly Reserve Provisions	
 
2.1	Notwithstanding Clause 4 of the GTA, provided that:	
 
 	(a)	the Engine continues to be maintained under and enjoy the benefit of a fleet hour agreement between Lessee and Manufacturer (the “FHA”); and	
 
 	(b)	Lessee continues to comply with the provisions of the FHA,	
then Lessee shall not be obligated to pay Hourly Reserves to Lessor during the Lease Period.
Lessee shall procure an undertaking from Manufacturer in favour of Lessor promptly to notify Lessor in writing if either or both of (a) and (b) above ceases to be the case. If Lessor receives such notification from Manufacturer and/or (a) and/or (b) ceases to be the case and if the event which is the cause of same (if capable of being cured) has not been cured by Lessee within 30 Business Days then Lessee shall immediately make a payment to Lessor in an amount equal to the aggregate amount of Hourly Reserves that would have been payable by Lessee for all Flight Hours flown by the Engine since the last Engine Heavy Maintenance equivalent to a Level 2 ESV or since new if the Engine has not had a Level 2 ESV to the date that of such notification and Lessee shall thereafter pay Lessor Hourly Reserves for Flight Hours operated by the Engine for the remaining duration of the Lease Period which shall be held and applied in accordance with the GTA.
 
2.2	Lessee shall not be entitled to make any claim under Clause 4 of the GTA during the continuance of a Relevant Event.	
 
2.3	For the avoidance of doubt, Lessor shall not be obligated to pay Lessee more than the aggregate amount that Lessee has paid to Lessor by way of Hourly Reserves less any previous amounts paid by Lessor in respect of completed Engine Shop Visits.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
16

3.	Subleasing	
 
3.1	Subject to the provisions of Clause 20.2(a) of the GTA, Lessee may sublease the Engine to one or more airlines with Grupo TACA.	
 
17

Annex 1
Hourly Reserves

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>3.00	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
18

Annex 2

Principal Maintenance
Assembly/Modular
Description	  	Illustrated Parts
Catalogue Reference	 	Minimum eMMP
Maintenance Level for
ESV1	 	Minimum eMMP
Maintenance Level for
ESV2	
Fan Module	  	*****	 	*****	 	*****	
Intermediate Case Module	  	*****	 	*****	 	*****	
LP Booster sub module	  	*****	 	*****	 	*****	
Internal Gearbox sub module	  	*****	 	*****	 	*****	
Stub Shaft assembly sub module	  	*****	 	*****	 	*****	
HP Compressor Module	  	*****	 	*****	 	*****	
Diffuser	  	*****	 	*****	 	*****	
Combustor	  	*****	 	*****	 	*****	
No. 4 Bearing Compartment	  	*****	 	*****	 	*****	
HPT St. 1 Nozzle Module	  	*****	 	*****	 	*****	
HPT Module	  	*****	 	*****	 	*****	
LP Turbine Module	  	*****	 	*****	 	*****	
Accessory Gearbox Module	  	*****	 	*****	 	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
19

Appendix D – FAA
INTENTIONALLY DELETED FROM THE VERSION OF THIS DOCUMENT FILED WITH THE FAA CONTAINING CONFIDENTIAL AND PROPRIETARY INFORMATION
 
20

Exhibit A to Lease
General Terms Agreement dated 28 April 2006
Please see Exhibit 10-9
 
21

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.05
IAE PROPRIETARY INFORMATION
FLEET HOUR AGREEMENT
between
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
and
IAE INTERNATIONAL AERO ENGINES AG
 
Page 1 of 37

IAE PROPRIETARY INFORMATION
 
Table of Contents

1.	 	Definitions	  	 	3	  	
2.	 	FHA Services	  	 	7	  	
3.	 	Period of Cover	  	 	7	  	
4.	 	Shop Visit Coverage	  	 	8	  	
5.	 	Lease Engine Support	  	 	9	  	
6.	 	Transportation	  	 	10	  	
7.	 	General Fleet Hour Agreement Services	  	 	10	  	
8.	 	Excess Work	  	 	10	  	
9.	 	Obligations of Vuela	  	 	12	  	
10.	 	FHA Rates and Payment	  	 	14	  	
11.	 	Escalation Protection	  	 	18	  	
12.	 	Warranties	  	 	18	  	
13.	 	Delays	  	 	19	  	
14.	 	Duplicate Benefits	  	 	19	  	
15.	 	Intellectual Property	  	 	20	  	
16.	 	Amendment	  	 	21	  	
17.	 	Assignment	  	 	21	  	
18.	 	Exhibits	  	 	21	  	
19.	 	Headings	  	 	21	  	
20.	 	Notices	  	 	21	  	
21.	 	Exclusion of Other Provisions and Previous Understandings	  	 	21	  	
22.	 	Termination, Expiration and Events of Default	  	 	22	  	
23.	 	Negation of Waiver	  	 	23	  	
24.	 	Severability And Partial Invalidity	  	 	23	  	
25.	 	Governing Law	  	 	23	  	
26.	 	Limitation of Liability	  	 	24	  	
27.	 	Publicity	  	 	24	  	
28.	 	Confidentiality	  	 	24	  	
29.	 	Records and Audit	  	 	24	  	
		
Exhibit A Eligible Engine List	  	 	26	  	
		
Exhibit B IAE FHA Escalation Formula	  	 	27	  	
		
Exhibit C Accessories	  	 	28	  	
		
Exhibit D Powerplant – Description	  	 	30	  	
		
Exhibit E Addresses	  	 	33	  	
		
Exhibit F IAE Engine Monitoring Services	  	 	36	  	
		
Exhibit G Excess Work Labor and Fee Rates	  	 	37	  	
		
Exhibit H FHA Rate Adjustment	  	 	38	  	
 
Page 2 of 37

IAE PROPRIETARY INFORMATION
 
Fleet Hour Agreement
THIS FLEET HOUR AGREEMENT (the “ Agreement ”) is made this          day of          June 2007, between

IAE INTERNATIONAL AERO ENGINES AG	 	A joint stock company organized and existing under the laws of Switzerland, with a place of business at 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108, USA, (hereinafter called “ IAE ”).	
AND	 		
		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	 	A corporation organized and existing under the laws of Mexico with a place of business at Av. Prolongación Reforma # 490 Primer Piso, Colonia Lomas Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01210 Mexico (hereinafter called “ Vuela ”).	
	 		
(IAE and VUELA may be referred to herein collectively as the “ Parties ”, or individually as a “ Party ”.)
WHEREAS:
 
A.	Vuela is acquiring from Airbus ***** new firm A319 aircraft powered by new V2527M-A5 engines and up to *****new option V2500 powered A320 family aircraft, and is purchasing from IAE ***** new V2527M-A5 firm spare engines as well as any additional option V2500-A5 spare engines necessary to support option aircraft acquired by Vuela;	
 
B.	Vuela and IAE have entered a General Terms Agreement, of even date herewith, for the sale of the spare V2527M-A5 engines and the supply of certain support services and parts for V2527M-A5 engines; and	
 
C.	IAE and Vuela now wish to agree upon terms whereby IAE shall arrange for, manage and subcontract certain maintenance of Vuela’s Eligible Engines (as hereinafter defined).	
NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
1.	Definitions	
 
 	1.1	“ Accessory ” or “ Accessories ” includes those items listed in Exhibit C to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible engines.	
 
 	1.2	“ Airbus ” shall mean Airbus Industrie SAS.	
 
 	1.3	“ Aircraft ” shall mean all or each of	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 3 of 37

IAE PROPRIETARY INFORMATION
 
 	1.3.1	The ***** Airbus A319 Firm Aircraft to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time;	
 
 	1.3.2	Up to ***** new V2500-A5 powered Airbus A320 family aircraft which Vuela may acquire in addition to the Aircraft identified in Clauses 1.3.1 above.	
 
 	1.4	“ Aircraft Maintenance Manual ” or “ AMM ” means the aircraft maintenance manual published by Airbus for the Aircraft.	
 
 	1.5	“ Airworthiness Directive ” shall mean any applicable airworthiness directive issued by the Aviation Authority based on certification rules current as of the date of this Agreement.	
 
 	1.6	“ Aviation Authority ” shall mean the United States Federal Aviation Administration.	
 
 	1.7	“ Beyond Economic Repair ” shall mean wear, tear or damage to an item of Eligible Engine that is beyond economic repair.	
 
 	1.8	“ BFE Item ” shall mean those buyer furnished equipment items listed as such in Exhibit D of this Agreement.	
 
 	1.9	“ Business Day(s) ” shall mean a Day other than a Saturday, Sunday or holiday scheduled by law for commercial banking institutions in the City of New York, New York, United States.	
 
 	1.10	“ Day ” means a calendar day.	
 
 	1.11	“ DGAC ” shall mean the Dirección General de Aeronáutica Civil of Mexico.	
 
 	1.12	“ EBU Item ” shall mean those engine build up items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.	
 
 	1.13	“ Eligible Engine(s) ” shall mean (a) the new Engines operated by Vuela originally installed on the Aircraft, (b) the Spare Engines, and (c) any other Engines mutually agreed by the parties and listed in Exhibit A, in each case so long as such Engine is operated by Vuela. Exhibit A to this Agreement identifies the Eligible Engines as of the date hereof by serial number, and will be updated by the Parties from time to time to identify Eligible Engines by serial number as Vuela takes delivery of the Aircraft and the Spare Engines (or as the parties agree to cover other Engines under this Agreement).	
 
 	1.14	“ Eligible Engine Flight Cycles ” shall mean, for each Eligible Engine, the number of times the wheels of an Aircraft on which the Eligible Engine is installed leaves the ground on take-off during regularly scheduled revenue service.	
 
 	1.15	“ Eligible Engine Flight Hours ” shall mean, for each Eligible Engine, the sum total of each hour or part thereof (fractions thereof measured to two decimal places) elapsing from the moment the wheels of an Aircraft on which the Eligible Engine is installed leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 4 of 37

IAE PROPRIETARY INFORMATION

 	1.16	“ Eligible Removal ” shall mean the necessary removal of an Eligible Engine from an Aircraft during the Period of Cover following all reasonable and appropriate line maintenance actions and troubleshooting in accordance with the AMM and the FHA Manager’s recommendations, where such removal is due to (i) exceedance of AMM limits for continued operation as mutually agreed by Vuela and the FHA Manager to be necessary (such agreement not to be unreasonably withheld); (ii) Life Limited Parts time expiry, provided the last Shop Visit for the Eligible Engine was performed by IAE during the Period of Cover; or (iii) the written recommendation of the FHA Manager.	
 
 	1.17	“ Engine(s) ” shall mean the basic IAE V2500-A5 turbofan engine, described in the V2500 Turbofan Engine Model Specifications set forth in Exhibit A of the Support Contract, and which excludes Accessories, EBU Items and QEC Items.	
 
 	1.18	“ Engine Manual ” shall mean the IAE document which sets forth the requirements for Engine off-wing repair.	
 
 	1.19	“ Excess Work ” shall mean work undertaken by the Maintenance Center during a Shop Visit pursuant to this Agreement that is not covered by the FHA Rates, as further described in Clause 0 of this Agreement.	
 
 	1.20	“ Failure ” shall mean the breakage or malfunction of a Part (or Parts) rendering the Engine unserviceable and incapable of continued operation without corrective action which is not as a result of misuse, neglect, accident, maintenance error, or improper maintenance activities by any party other than IAE or the Maintenance Center.	
 
 	1.21	“ FHA ” shall mean this Fleet Hour Agreement.	
 
 	1.22	“ FHA Manager ” shall mean the manager provided by IAE for the support of the operation of this Agreement in accordance with the provisions of Clause 7 of this Agreement.	
 
 	1.23	“ FHA Rate(s) ” shall mean the rate(s) collectively as set forth in Clause 10.1 below.	
 
 	1.24	“ Foreign Object Damage ” shall mean damage to an Eligible Engine caused by the non-negligent ingestion of birds, hailstones or Runway Debris only.	
 
 	1.25	“ Life Limited Parts ” or “ LLPs ” shall mean the Parts identified in Chapter 5 of the V2500-A5 Engine Manual as having specific life limits.	
 
 	1.26	“ Maintenance Center ” shall mean the IAE shareholder maintenance center(s) designated by IAE and agreed by Vuela (such agreement not to be unreasonably withheld, conditioned, or delayed) from time to time to perform services under this Agreement and which is approved by the Aviation Authority as a certified repair station.	
 
Page 5 of 37

IAE PROPRIETARY INFORMATION
 
 	1.27	“ Maintenance Management Plan ” or “ MMP ” shall mean the then-current V2500 engine maintenance planning documents described in Clause 7 of this Agreement, as customized for Vuela.	
 
 	1.28	“ Miscellaneous Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal resulting from Failure of a Part in an Eligible Engine or any other unplanned cause and which does not result in a Restoration Shop Visit being undertaken.	
 
 	1.29	“ Part(s) ” shall mean Engine part(s) provided under this Agreement and delivered by IAE to Vuela as original equipment in an Eligible Engine, or Engine spare parts sold to Vuela by IAE or Engine spare parts delivered to the designated Maintenance Center in support of Eligible Engines, excluding Accessories, EBU Items and QEC Items.	
 
 	1.30	“ Period of Cover ” shall mean the applicable period for which IAE agrees to provide the services for each Eligible Engine pursuant to this Agreement, as set forth in Clause 3 of this Agreement.	
 
 	1.31	“ QEC Item ” shall mean those items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.	
 
 	1.32	“ Restoration Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal to accomplish Engine performance restoration sufficient to make the Eligible Engine serviceable in accordance with the then current revision of the MMP for the relevant Engine (or any successor to such MMP), IAE technical publications, Airworthiness Directives, and other IAE and Airworthiness Authority approved maintenance procedures, and which, as a minimum, includes a Level 3 refurbishment of the combustor and high pressure turbine.	
 
 	1.33	“ Runway Debris ” shall mean any stones, gravel, or other small organic objects commonly found on properly maintained commercial airport runways.	
 
 	1.34	“ Service Bulletin(s) ” shall mean those IAE target V2500-A5 service bulletins (excluding service bulletins for Accessories) as indicated in the MMP for Vuela, including service bulletins with a compliance code ***** which provide reliability and maintenance cost improvements;	
 
 	1.35	“ Shop Visit ” shall mean either a Restoration Shop Visit or a Miscellaneous Shop Visit, as applicable.	
 
 	1.36	“ Spare Engine(s) ” shall mean all or each of the new V2500-A5 Engines currently identified as Spare Engines in the Support Contract and either purchased or to be purchased by Vuela from IAE and to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 6 of 37

IAE PROPRIETARY INFORMATION

 	1.37	“ Support Contract ” shall mean the V2500 General Terms Agreement, between IAE and Vuela dated of even date herewith, including all side letters and amendments thereto.	
 
 	1.38	“ Taxes ” shall mean imposts, taxes, duties, levies, fees, assessments or other like charges imposed by any government entity or taxing authority.	
 
 	1.39	“ Testable Engine ” shall mean an Eligible Engine with Accessories (including without limitation the Pneumatic Starter, ATA Code 80-13-41, and the Pneumatic Starter Valve, ATA Code 80-13-51) installed so as to enable the Engine to be tested either prior to or following its repair without the need for making use of units provided by the Maintenance Center, as further described in the applicable Engine Manual.	
 
 	1.40	“ Vuela Affiliates ” shall mean any subsidiaries or other affiliates of Vuela that are either wholly-owned or otherwise controlled by Vuela or its shareholders.	
 
 	1.41	“ Workscope ” shall mean an IAE written repair request to the Maintenance Center(s) compliant with the MMP that authorizes the Maintenance Center(s) to undertake work on Eligible Engines.	
 
2.	FHA Services	
IAE shall provide to Vuela the following FHA service coverage for the Period of Cover for each Eligible Engine:
 
 	2.1	Engine Shop Visit Coverage in accordance with the terms of Clause 4;	
 
 	2.2	Lease Engine Coverage in accordance with the terms of Clause 5;	
 
 	2.3	General FHA Services in accordance with the terms of Clause 7; and	
 
 	2.4	Excess Work as required in accordance with the terms of Clause 0.	
The provision of such coverage by IAE is subject to Vuela not being in material breach (beyond any applicable grace period) of its obligations under Clause 9.
 
3.	Period of Cover	
 
 	3.1	FHA coverage and payment as set forth in this FHA will begin for each Eligible Engine as of the date of each Engine’s initial entry into service and will remain in force and effect for each Eligible Engine as follows:	
 
 	3.1.1	For fifty percent (50%) of the Eligible Engines, until the expiration of ten (10) years after delivery of each such Eligible Engine (“ Period of Cover A ”); and	
 
 	3.1.2	For each of the remaining fifty percent (50%) of the Eligible Engines, until the later of (a) the expiration of ten (10) years after delivery of each such Eligible Engine; and (b) completion of two (2) Restoration Shop Visits for each such Eligible Engine (“ Period of Cover B ”).	
 
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IAE PROPRIETARY INFORMATION

 	3.2	Vuela shall have the option to elect which Period of Cover is applicable for each Eligible Engine within the constraints listed above by providing written notice to the IAE FHA Manager of its election for each Eligible Engine by no later than the date of induction for the first Restoration Shop Visit of each such Engine. For each Eligible Engine for which Vuela has not provided notice of its election prior to such Engine’s first Restoration Shop Visit, the applicable Period of Cover shall be Period of Cover A.	
 
 	3.3	In the event that after the Period of Cover for an Eligible Engine has been determined in accordance with 3.2 above, Vuela sells or otherwise transfers such Engine to a lessor or financier as part of a sale and leaseback or similar financing arrangement, then Vuela at its election may request in writing that such Eligible Engine be reallocated from Period of Cover A to Period of Cover B (or vice versa). Following IAE’s receipt of Vuela’s request, the Parties will mutually evaluate whether some or all of the Eligible Engines can be reallocated between the two Period of Cover options to accommodate Vuela’s change in financing while at the same time maintaining (a) the Period of Cover balance set forth in Clause 3.1 and (b) the economic effects of the previous allocation. If the Parties determine that such reallocation can be accomplished within the criteria set forth in the preceding sentence, the Parties will amend Exhibit A to this Agreement to reflect the agreed-upon reallocation.	
 
 	3.4	The Parties agree to amend Exhibit A to this Agreement from time to time to accurately reflect the Period of Cover applicable for each Eligible Engine, as determined in accordance with this Clause 3.	
 
4.	Shop Visit Coverage	
Following an Eligible Removal, the affected Eligible Engine shall be forwarded to the Maintenance Center. IAE shall provide Vuela with the proposed Workscope as early as possible (but in no event less than 3 days) prior to induction for a Shop Visit. IAE shall reasonably consider any modifications or additions to the Workscope proposed by Vuela and shall incorporate into such Workscope all such modifications or additions which are required to be made in accordance with the MMP and this Agreement. Notwithstanding the foregoing, the parties acknowledge that IAE shall have the ultimate control of the Workscope. IAE shall communicate the Workscope to the Maintenance Center and cause the Maintenance Center to complete the Shop Visit and provide Shop Visit reports with respect thereto in a timely manner. IAE shall pay to the Maintenance Center all charges directly incurred in respect of goods, work and services carried out during the Shop Visit, excluding charges for Excess Work (if such charges have been invoiced directly to Vuela), including for the following items:
 
 	4.1	Labor, new and used material, handling fees and charges, vendor fees, and test cell fees (including fuel and oil consumed at test) required to:	
 
 	4.1.1	perform Engine reconditioning and repair in accordance with the Workscope to make the Eligible Engine serviceable to the specifications established in accordance with the then current customized MMP for Vuela, IAE technical publications, Airworthiness Directives and other IAE or FAA approved maintenance procedures.	
 
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 	4.1.2	perform required Eligible Engine testing and retesting required by the Maintenance Center;	
 
 	4.1.3	inspect, repair or replace Parts as required by Airworthiness Directives;	
 
 	4.1.4	incorporate Service Bulletins ***** in accordance with the customized MMP;	
 
 	4.1.5	Remove, repair or replace LLPs, except as provided in Clause 8.1.16 below;	
 
 	4.1.6	provide Shop Visit documentation as follows:	
 
 	(a)	serviceability tag FAA Form 8130-3 or -4, as applicable, and FAA Form 337;	
 
 	(b)	a shop findings report on the services accomplished, including a report stating any damage detected and repairs accomplished;	
 
 	(c)	a list of all Service Bulletins and Airworthiness Directives incorporated;	
 
 	(d)	a list of all LLPs with associated times and cycles since new;	
 
 	(e)	test cell performance data;	
 
 	(f)	a list of Accessories by serial number.	
 
 	4.2	IAE’s obligations for an Eligible Engine Shop Visit caused by Foreign Object Damage shall be limited to the provision of repair work and Parts provided through the Maintenance Center to a maximum of ***** per event and such liability shall only be incurred to the extent that the damage is uninsured or not covered by insurance for failure to have met any deductible.	
 
5.	Lease Engine Support	
*****
 
 	5.2	IAE’s obligation to provide such V2500-A5 lease Engine to Vuela is contingent on Vuela being in compliance with its obligations under Clause 9 and Vuela demonstrating the availability of reasonably sufficient Spare Engines, Accessories, components and Parts to maintain proper support of the Eligible Engines.	
 
 	5.3	Unless otherwise agreed in writing by the FHA Manager, Vuela shall ship to IAE any lease Engines furnished pursuant to 5.1 above within the earlier of the thirty (30) days (as extended if applicable) as described above, or five (5) days after a Vuela Engine becomes available for installation at Vuela’s facilities.	
 
 	5.4	Should Vuela require a spare Engine to support a shop visit not covered by this Agreement or that does not otherwise meet the above conditions, all terms of the STOBL then in effect between IAE and Vuela, including all applicable rates, charges and fees, shall apply.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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6.	Transportation	
 
 	6.1	Following an Eligible Removal, Vuela shall deliver the affected Eligible Engines to the Maintenance Center in a Testable Engine configuration, with all Accessories attached and in a serviceable condition.	
 
 	6.2	Vuela shall be responsible for transportation of Eligible Engines to the applicable Maintenance Center, and the return of such Engines from the Maintenance Center, including risk of loss or damage during such transportation.	
 
7.	General Fleet Hour Agreement Services	
IAE shall provide the following additional services:
 
 	7.1	A customized MMP for the Eligible Engines will be produced for Vuela by IAE in consultation with Vuela, taking into account the specifics of the operation of the Aircraft and Eligible Engines. The MMP shall be determined in good faith and on a nondiscriminatory basis by IAE, and approved by Vuela (such approval not to be unreasonably withheld or delayed). The MMP shall establish maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning.	
 
 	7.2	Engine monitoring data program services set forth in Exhibit E;	
 
 	7.3	The following FHA Engine management and maintenance planning services (which shall normally be undertaken by the FHA Manager):	
 
 	7.3.1	overall FHA program coordination;	
*****
 
8.	Excess Work	
 
 	8.1	If a Maintenance Center charges Vuela or IAE for Excess Work, such charges shall be paid for by Vuela directly to the Maintenance Center or, if the Maintenance Center has invoiced IAE for such charges, to IAE in accordance with Clause 10.3 of this Agreement. “Excess Work” shall mean any labor, material and other charges for Eligible Engines that arise from the following:	
 
 	8.1.1	repairs for inflight and/or ground accident damage, except Foreign Object Damage to the extent of IAE’s responsibility under Clause 4.2;	
 
 	8.1.2	Service Bulletins requested by Vuela which are not required in accordance with the MMP;	
 
 	8.1.3	Maintenance of any items other than Eligible Engines;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	8.1.4	Line Maintenance requirements, except if performed at a Shop Visit in accordance with the requirements of the MMP;	
 
 	8.1.5	Incremental shop visits or additional work that was not required to be performed in accordance with the requirements of the MMP and was requested and authorized by Vuela in order to enable it to meet any lease return conditions;	
 
 	8.1.6	Misuse, neglect, accident or maintenance error or improper maintenance activity by any party other than IAE or the Maintenance Center;	
 
 	8.1.7	The removal and replacement of non-IAE approved part(s) or repaired part(s) and damage caused by such part(s);	
 
 	8.1.8	Occurrences outside the course of Vuela’s normal business activities as a civil commercial airline, such occurrences including, but not limited to, acts of God, use by government agencies and services, acts of war, rebellion, seizure, terrorism, riots or other belligerent acts;	
 
 	8.1.9	Exceedance of Engine operating limits published by IAE;	
 
 	8.1.10	Work required to repair damage resulting from Engine operation in an abrasive or corrosive environment, excluding normal operations (for example ingestion of volcanic ash, fire extinguishing chemicals, or desiccants, etc.). *****	
 
 	8.1.11	Delivery to the Maintenance Center with missing or non-serviceable Parts or Accessories, requiring the use of units provided by the Maintenance Center to permit the testing of the Eligible Engine following its refurbishment;	
 
 	8.1.12	Delivery to the Maintenance Center with Parts or Accessories which require re-certification;	
 
 	8.1.13	The exchanging of QEC Items or EBU Items between installed Engines and Spare Engines or the provisioning of such QEC Items or EBU Items;	
 
 	8.1.14	Work requested by Vuela which is not covered by the terms of this Agreement;	
 
 	8.1.15	Charges associated with placing an Eligible Engine into a Testable Engine configuration, unless the Eligible Engine was delivered by Vuela to the Maintenance Center in a Testable Engine configuration;	
 
 	8.1.16	Charges for material and handling associated with replacing Life Limited Parts due to time expiry or MMP build requirements;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	8.1.17	Inspection, repair, or replacement of Accessories, QEC Items, EBU Items, or BFE Items, and provisioning, restocking, and availability of such items; or	
 
 	8.1.18	Charges associated with IAE’s provision to Vuela of any accident and disassembly reports and pictures or “dirty fingerprint” records that may be reasonably requested by Vuela from time to time.	
 
 	8.2	In addition to the above, at the discretion of IAE, “Excess Work” may mean any labor, material and other charges for Eligible Engines that arise from the failure of Vuela to undertake any of its obligations as set out in Clause 9 below. IAE shall provide ***** days’ notice that such failure shall result in Excess Work, during which time, Vuela may rectify such failure.	
 
 	8.3	In the event IAE determines that the Workscope for a Shop Visit of an Eligible Engine will consist entirely of Excess Work, then the FHA Manager shall so notify Vuela and obtain Vuela’s written authorization to proceed prior to the commencement of such work.	
 
9.	Obligations of Vuela	
Vuela agrees to fulfill, or to cause the Vuela Affiliates that operate or maintain the Aircraft and Engines to fulfill, the following responsibilities and perform the following tasks and to reasonably cooperate with IAE in the performance of IAE’s responsibilities hereunder.
 
 	9.1	Data and Procedures	
Vuela shall at its own expense maintain Eligible Engine electronic condition monitoring capabilities for each Eligible Engine, and with respect to information and data required for the performance of this Agreement, Vuela shall:
 
 	9.1.1	maintain, collect and provide to IAE performance trend monitoring data on each Eligible Engine in accordance with Exhibit E, maintain timely records in form and detail sufficient for the accurate and expeditious administration of the terms of this Agreement including the assessment of operating conditions relative to those set out in Clause 10.5 of this Agreement;	
 
 	9.1.2	make available, and provide access to IAE’s provider of electronic condition monitoring data analysis, all data collected in accordance with 9.1.1 above in an electronic format agreed to by IAE, as required for the operation and administration of this Agreement;	
 
 	9.1.3	implement and follow the IAE recommendations resulting from analysis of the performance trend monitoring data;	
 
 	9.1.4	within ***** Days after the end of each month during the Period of Cover, report to IAE, in an electronic format agreed to by IAE, the hours and cycles flown, take off derate, and temperature (ISA+X° C) for each flight by each Eligible Engine during the preceding month;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	9.1.5	ensure that all data that is available to Vuela and requested by IAE to facilitate the correction and/or diagnosis of any problem causing an Eligible Engine Removal is promptly made available to IAE;	
 
 	9.1.6	ensure that each Eligible Engine delivered to the Maintenance Center is accompanied by a record of Eligible Engine total time and cycles, date of Eligible Engine removal, and reason for removal;	
 
 	9.1.7	upon written request from IAE, confirm the serial numbers of Eligible Engines installed on the Aircraft; and	
 
 	9.1.8	after Eligible Removals, ship Eligible Engines to the applicable Maintenance Center in a Testable Engine configuration.	
 
 	9.2	Engine Preparation for Transportation	
For the purposes of the transportation of Eligible Engines as required under this Agreement, Vuela shall:
 
 	9.2.1	unless otherwise mutually agreed in writing, make Eligible Engines available for shipment as soon as practicable following Eligible Removal, but in any event Vuela shall deliver Eligible Engines to the Maintenance Center prior to the scheduled induction date for each Eligible Engine Shop Visit;	
 
 	9.2.2	maintain in a serviceable condition one (1) IAE approved transportation stand per spare Engine plus one (1) additional serviceable IAE approved transportation stand; and	
 
 	9.2.3	at the time of an Eligible Removal, remove the Eligible Engine from the Aircraft, mount it on an IAE approved transportation stand and prepare such Eligible Engine for shipment, all in accordance with the procedures specified in the applicable IAE manuals.	
 
 	9.3	Operation, Maintenance and Troubleshooting of Eligible Engines	
Vuela shall operate, maintain and troubleshoot the Eligible Engines consistent with standard industry practice in accordance with the applicable Airbus operating, maintenance and troubleshooting manuals, the then current MMP for Vuela, and IAE’s written recommendations and instructions (including, but not limited to, service information letters, all operator wires and non-modification service bulletins, component maintenance manuals and Airworthiness Directives), provided that such recommendations and instructions are (i) reasonable with reference to industry standards, and (ii) apply generally to and are applied generally (on a non-discriminatory basis) to V2500-A5 engines and operators operating under similar conditions. Vuela shall incorporate the relevant provisions of the MMP into its then current airworthiness maintenance program.
 
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 	9.4	Administration	
Vuela shall cooperate with IAE to fulfill any reasonable administrative or other requirements of the Maintenance Center, including endorsement of Workscopes for Aviation Authority and DGAC requirements. Vuela shall accomplish quality audits and obtain certifications required by the Aviation Authority, the DGAC, and the Maintenance Center for accomplishment of work on the Eligible Engines at the Maintenance Center(s).
 
 	9.5	One Time Concessions	
Vuela shall not unreasonably withhold its approval of any IAE proposed utilization of on-wing or off-wing “One Time Concessions” on Eligible Engines.
 
 	9.6	Payment	
Vuela shall make payments as required in accordance with Clause 10 of this Agreement.
 
 	9.7	Records and Audit	
Vuela shall comply with the provisions of Clause 29 of this Agreement.
 
10.	FHA Rates and Payment	
 
 	10.1	FHA Rates	
 
 	10.1.1	The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A319 and A320 Aircraft shall be as follows:	

Engine/Derate	 	At RSV 1	 	At RSV 2	 	At RSV 3	
*****	 	*****	 	*****	 	*****	
				
*****	 	*****	 	*****	 	*****	
				
*****	 	*****	 	*****	 	*****	
				
*****	 	*****	 	*****	 	*****	
The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A321 Aircraft shall be as follows:

Engine/Derate	 	At RSV 1	 	At RSV 2	 	At RSV 3	
*****	 	*****	 	*****	 	*****	
				
*****	 	*****	 	*****	 	*****	
IAE shall invoice Vuela at induction of the Eligible Engine into the Maintenance Center for a Restoration Shop Visit, an amount equal to the above applicable FHA Rate (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown by such
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	Eligible Engine since new or if the Eligible Engine has had a prior Restoration Shop Visit, since its last Restoration Shop Visit. The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit G to the extent applicable.	
 
 	10.1.2	The FHA Rate for Miscellaneous Shop Visit Coverage shall be ***** per Eligible Engine Flight Hour during the Period of Cover. IAE shall invoice Vuela on a monthly basis in an amount equal to the FHA Rate for Miscellaneous Shop Visit Coverage (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown in the previous month by Eligible Engines within their respective Periods of Cover; *****	
 
 	10.2	All FHA Rates in Clause 10.1 shall be paid in accordance with Clause 10.6.1 below, and are subject to escalation from the base month of January 2004 to the date of calculation of the applicable FHA Rate invoice in accordance with the formula set forth in Exhibit B.	
 
 	10.3	Excess Work Rates	
 
 	10.3.1	Charges for Excess Work shall be invoiced to Vuela by IAE in accordance with the rates identified in Exhibit F. However, where prior to the applicable Shop Visit Vuela notifies IAE that it has contracted Excess Work rates directly with the applicable Maintenance Center, IAE will consent to the Maintenance Center’s directly invoicing Vuela for such Excess Work charges, provided that such Maintenance Center agrees not to charge IAE for such Excess Work.	
 
 	10.3.2	IAE may invoice Vuela its reasonable estimate of the cost of any Excess Work prior to commencement, or during the execution, of such Excess Work. IAE shall invoice Vuela for the balance of the cost of any Excess Work upon receipt of the corresponding invoice from the Maintenance Center (or either promptly credit Vuela’s account with IAE or, upon the parties’ mutual agreement, refund by electronic transfer to Vuela, the amount of any excess payment received from Vuela).	
 
 	10.4	Payment for Additional or Loss of LLP Life	
Where IAE provides a replacement LLP (the “ Replacement LLP ”) as a result of damage to an LLP (the “ Damaged LLP ”) and the Replacement LLP is provided pursuant to the coverage provided for under the terms of this Agreement, then either (a) Vuela shall pay to IAE the amount by which the value of the Replacement LLP exceeds the value of the Damaged LLP; or (b) IAE shall pay to Vuela the amount by which the value of the Damaged LLP exceeds the value of the Replacement LLP, in each case as determined in accordance with the following formula:
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Where:

*****	  	=	  	*****	
*****	  	=	  	*****	
*****	  	=	  	*****	
*****	  	=	  	*****	
*****	  	=	  	*****	
Upon completion of any Shop Visit at which IAE has provided a Replacement LLP, payment of the amount determined in accordance with the above formula shall be due (i) to IAE from Vuela in the event the calculation above results in a positive amount or (ii) to Vuela from IAE in the event the calculation above results in a negative amount. Vuela shall pay all invoices submitted by IAE pursuant to this Clause 10.4 in accordance with Clause 10.6.1. IAE will credit Vuela’ account with IAE with any amount due to Vuela from IAE under this Clause 10.4. Such credits may be used by Vuela toward the payment of FHA invoices from IAE, or for other goods and services provided by IAE.
 
 	10.5	General Conditions	
The FHA Rates are predicated upon Vuela:
 
 	10.5.1	maintaining within its fleet of Aircraft an annual average flight cycle length of ***** hours per cycle (calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);	
 
 	10.5.2	maintaining an average engine thrust derate of ***** relative to the V2527M-A5 thrust rating, ***** relative to the V2524-A5 thrust rating, or ***** relative to the V2522-A5 thrust rating, as applicable;	
 
 	10.5.3	maintaining an average ambient temperature for take-off no greater than ISA + *****	
 
 	10.5.4	taking delivery of all of the Aircraft and Spare Engines in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.	
IAE may make adjustments to the FHA Rates in accordance with Exhibit G if there is a change in any of the operational parameters set forth in Clauses 10.5.1 through 10.5.3.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	10.6	Payment	
 
 	10.6.1	Except as otherwise provided for herein, Vuela shall pay invoices submitted by IAE within ***** Days after submission.	
 
 	10.6.2	Vuela undertakes that IAE shall receive the full amount of payments falling due under this Clause 10, without any withholding or deduction whatsoever.	
 
 	10.6.3	All payments under this Clause 10 shall be made by electronic transfer and shall be deposited not later than the due date of payment with:	
Bank of America
1185 Avenue of Americas
New York, NY 10038-4924
*****
or to such other account as IAE may from time to time designate in writing, which designation shall be effective upon receipt by Vuela of such notice.
 
 	10.6.4	Should Vuela fail to make any payment to IAE required as set forth in this Clause 10, then, notwithstanding any rights which IAE may have in contract or in law, IAE reserves the right to assess interest on such late payment at the rate of ***** of the outstanding amount per month from the date the payment was due to be made until the date such payment is received by IAE.	
 
 	10.7	Taxes and Other Like Charges	
In addition to amounts stated to be payable by Vuela pursuant to this Agreement, Vuela shall pay:
 
 	10.7.1	any and all Taxes (excluding (i) any income, gains, or excess profit, franchise and similar Taxes imposed, levied, or assessed on, or otherwise payable by, IAE or the Maintenance Center; and (ii) any Taxes which would not have been imposed but for IAE’s failure to comply with applicable regulations or filing requirements (collectively, the “ Excluded Taxes ”) arising from IAE’s and the Maintenance Center’s performance under this Agreement; and	
 
 	10.7.2	Taxes other than Excluded Taxes payable by IAE in connection with or pursuant to contracts for goods, work and/or services with Maintenance Center for or in connection with Eligible Engines.	
If either IAE or Vuela becomes aware of any Taxes for which the other Party is responsible, the relevant party will promptly notify the other party, and both parties agree to consult in good faith and take such other reasonable steps in order to mitigate payment and/or the amount of such Taxes.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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All amounts stated to be payable by Vuela pursuant to this Agreement exclude any value added tax, sales tax or taxes on turnover. In the event that the supply of goods or services under this Agreement is chargeable to any value added tax, sales tax or taxes on turnover such tax will be borne by Vuela, subject to the receipt of any appropriate documentation that may be required to enable or assist Vuela to claim or verify any tax credit, exemption, set off, rebate or refund in respect of such Taxes paid or payable in connection with this Agreement. IAE shall give due consideration to whether any Parts provided by IAE to Vuela are exempt from Taxes under any applicable law.
 
11.	Escalation Protection	
Except as otherwise noted to the contrary, for the period beginning January 1, 2006 and ending January 1, 2012 (the “ Cap Period ”), IAE agrees to cap escalation of all credits, FHA Rates, and other items escalated in accordance with the formula in Exhibit B (“ Base Amounts ”) at a cumulative rate of *****, compounding annually, provided that for any year in which escalation exceeds ***** over the previous year, such escalation exceedance above 6.5% shall be shared ***** by IAE and ***** by Vuela, as follows:
*****
 
12.	Warranties	
 
 	12.1	If IAE fails to comply with its obligations set out in this Agreement, IAE shall, as its sole responsibility for such failure, undertake, at its sole cost and expense, all work necessary to achieve such obligations.	
 
 	12.2	IAE shall warrant Excess Work to Vuela as follows: IAE will repair any Eligible Engines in which any defect in the Excess Work performed by the Maintenance Center or in any Parts incorporated by the Maintenance Center becomes evident, in each case within three thousand (3,000) flight hours or within eighteen (18) months after installation on an Aircraft or, if not installed on an Aircraft, within twenty-four (24) months after delivery of the Eligible Engine from the applicable Shop Visit, whichever occurs first. Transportation charges for the return of defectively serviced goods to IAE or the Maintenance Center, and their reshipment to Vuela and risk of loss thereof shall be borne by IAE only if such goods are returned in accordance with reasonable written shipping instructions from IAE.	
 
 	12.3	IAE warrants to Vuela that that title to Parts or components thereof installed on an Eligible Engine by a Maintenance Center shall pass to the owner of such Eligible Engine free and clear of all security interests and rights of IAE, the Maintenance Center, or others upon installation. IAE’s liability and Vuela’s remedy under this warranty are limited to the removal of any title defect or, at the election of IAE, to the replacement of the new Parts or components thereof which are defective in title; provided, however, that the rights and remedies of the Parties with respect to patent infringement shall be limited to the provisions of Clause 15 of this Agreement.	
 
 	12.4	Vuela warrants that title to Parts or components thereof removed from an Eligible Engine by a Maintenance Center shall pass to IAE free and clear of all security	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	interests and rights of Vuela or others at the time that title to the replacement Part passes to Vuela. Vuela’s liability and IAE’s remedy under this warranty are limited to the removal of any title defect or, at the election of Vuela, to the replacement of the Parts or components thereof which are defective in title.	
 
 	12.5	THE FOREGOING WARRANTIES TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO VUELA IN ACCORDANCE WITH THIS AGREEMENT ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED IN LIEU OF (I) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (II) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT, TORT OR STRICT LIABILITY AGAINST IAE OR ITS SHAREHOLDERS, WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED, OF IAE OR ITS SHAREHOLDERS. THE REMEDIES OF VUELA SHALL BE LIMITED TO THOSE PROVIDED HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING, WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES, REMEDIES OR THIS LIMITATION SHALL BE BINDING UPON IAE UNLESS IN WRITING, SIGNED BY A DULY AUTHORIZED OFFICER OF IAE.	
 
13.	Delays	
 
 	13.1	Excusable Delays	
IAE shall not be charged with any liability for delay in the performance of any of its obligations when such delay is caused by acts of God or the public enemy, compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it proves to be invalid, fires, riots, labor disputes, unusually severe weather, delays of suppliers as a result of any of the aforementioned reasons, or any cause beyond the reasonable control of IAE. To the extent that such causes actually delay performance on the part of IAE, the time for the performance shall be extended for as many days as are required to obtain removal of such causes. This provision shall not, however, relieve IAE from using commercially reasonable efforts to avoid or remove such causes, perform obligations not prevented by such causes, or continue performance with reasonable dispatch whenever such causes are removed.
 
 	13.2	Non-Excusable Delay	
If IAE delays the delivery of an Eligible Engine from a Shop Visit beyond the time for delivery specified in the Workscope (as such time may be extended pursuant to the provisions of this Agreement) for any reason other than those specified in Clause 13.1 above, IAE’s obligations shall be as set forth in Clause 5.
 
14.	Duplicate Benefits	
Vuela and IAE agree that it is not the intention to provide duplicate benefits under the terms of this Agreement and the Support Contract or under any other arrangement between IAE or IAE’s suppliers or Airbus and Vuela. In the event of any such
 
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duplication of benefits, Vuela may, at the relevant time in respect of the relevant circumstances, opt to receive any one such benefit to the exclusion of all other duplicate benefits.
 
15.	Intellectual Property	
 
 	15.1	IAE shall conduct, at its own expense, the entire defense of any claim, suit or action brought against Vuela alleging that the use or resale by Vuela or any subsequent purchaser or user of the Parts furnished by IAE or a Maintenance Center hereunder infringes any United States patent or any patent of any other country that is a signatory to Article 27 of the Convention of International Aviation signed by the United States at Chicago on December 7, 1944, in which Vuela is authorized to operate.	
 
 	15.2	Vuela shall provide prompt written notice to IAE of such claim, suit or action and shall provide IAE with full opportunity and authority to assume the sole defense thereof, including settlement and appeals, and all information available to Vuela or subsequent purchaser or user for such defense.	
 
 	15.3	Provided that such Parts have been made according to a specification or design furnished by IAE or, if a process patent is involved, the process performed with such Parts if recommended in writing by IAE, IAE shall, at its own expense, either settle said claim, suit or action or shall pay all damages awarded by the court thereon, and, if the use or resale of such Parts is finally enjoined, IAE shall, at IAE’s option:	
 
 	15.3.1	procure for Vuela the right to use or resell the Parts,	
 
 	15.3.2	replace them with equivalent non-infringing Parts,	
 
 	15.3.3	modify them so they become non-infringing but equivalent, or	
 
 	15.3.4	remove them and refund the purchase price (less a reasonable allowance for use, damage and obsolescence).	
 
 	15.3.5	IAE shall not be liable to Vuela for any consequential damage or any loss of use of any Parts or of the Aircraft in which the Parts may be incorporated arising as a result directly or indirectly of any claim subject to this Clause 15.3.	
 
 	15.4	The indemnity contained in Clause 15.3 shall not apply to any claim, suit or action based on infringement in respect of:	
 
 	i)	Parts manufactured to a design or specification furnished by Vuela; or	
 
 	ii)	Parts not of IAE design (but IAE shall in the event of any claim for infringement pass on to Vuela, so far as it has the right to do so, the benefits of any indemnity given to IAE by the designer, manufacturer or supplier of such Parts); or	
 
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IAE PROPRIETARY INFORMATION

 	iii)	the manner of method in which any of the Parts have been installed in the Aircraft; or	
 
 	iv)	the performance of a process not recommended in writing by IAE, or	
 
 	v)	the use or sale of the Parts delivered hereunder in combination with other new parts not delivered to Vuela by IAE.	
 
16.	Amendment	
This Agreement shall not be amended, changed, or modified in any way other than by agreement in writing, signed by the Parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement.
 
17.	Assignment	
Neither Party may assign any of its rights or obligations hereunder without the written consent of the other Party, except that IAE may assign its rights to receive money hereunder, and may assign any or all of its rights and/or obligations hereunder to any of IAE’s shareholders. Any assignment made in violation of this Clause 17 shall be null and void. IAE shall support Vuela in its pursuit to secure a workmanship warranty from the Maintenance Center for the Eligible Engines at the end of the Period of Cover.
 
18.	Exhibits	
In the event of any conflict or discrepancy between the Exhibits (which are hereby incorporated by reference as part of this Agreement) and the Clauses of this Agreement, the Clauses of this Agreement shall prevail.
 
19.	Headings	
Captions, clause headings, and the Table of Contents are for convenience of reference only and shall not be deemed or construed in any way as forming a part of this Agreement, nor shall they govern or affect the interpretation of the language or provisions of this Agreement.
 
20.	Notices	
Any notice to be served pursuant to this Agreement shall be sent by registered mail, by internationally recognized overnight courier, or by facsimile (with the original notice sent by registered mail or internationally recognized overnight courier) to the applicable addresses indicated in 0.
 
21.	Exclusion of Other Provisions and Previous Understandings	
 
 	21.1	This Agreement is the sole and entire agreement of the Parties with respect to the subject matter hereof and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of Vuela, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either Party relating to such services.	
 
Page 21 of 37

IAE PROPRIETARY INFORMATION
 
 	21.2	The Parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Agreement, whether orally or in writing, relating to such services, other than those expressly incorporated in this Agreement, which has been negotiated on the basis that its provisions represent their entire agreement relating to such services and shall supersede all such representations, agreements, statements and understandings.	
 
22.	Termination, Expiration and Events of Default	
 
 	22.1	Bankruptcy/Insolvency	
Either Party shall have the option, at its sole discretion, to terminate this Agreement upon the occurrence of any of the following events: (a) a receiver or trustee is appointed for any of the other Party’s property, or (b) the other Party is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) the other Party becomes insolvent or makes an assignment for the benefit of creditors.
 
 	22.2	Failure to Make Payments or to Meet Obligations	
A non-defaulting Party shall have the right to declare an event of default and terminate this Agreement (i) if the other Party fails to pay any amount hereunder not reasonably subject to dispute when and as the same becomes due and payable and such default continues for a period of ***** or more; or (ii) if the other Party fails to perform any other material obligation under this Agreement and such default or failure shall not have been fully corrected within thirty (30) days after the non-defaulting Party gives notice thereof to the defaulting Party.
If Vuela fails to make any payment to IAE as set forth in Clause 10 of this Agreement (including any late interest due thereon) not reasonably subject to dispute and such default continues for a period of *****, then, without prejudice to IAE’s other rights which IAE may have in contract or in law, IAE reserves the right not to induct, to suspend all work on, or not to release from the Maintenance Center(s) any Eligible Engine, Accessory, EBU Item or QEC Item until full payment is made by Vuela to IAE.
The obligation of IAE to provide, or cause to be provided, the services set out in this Agreement shall be subject to the non-existence of a continuing event of default by Vuela, after the expiration of any applicable grace or cure period, in any payment or other obligation of Vuela under any other agreement in effect between the Parties (an “ Event of Default ”). Should any such Event of Default exist, IAE reserves the right not to induct, to stop all work on, or not to release from the Maintenance Center any Eligible Engine until such Event of Default is rectified by Vuela to IAE’s satisfaction.
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 22 of 37

IAE PROPRIETARY INFORMATION

 	22.4	Expiration	
This Agreement shall be effective from the day and year first above written until the end of the Period of Cover for each Eligible Engine.
 
 	22.5	Effect of Termination or Expiration	
Except as otherwise set out in this Clause 22.5 and any rights or obligations arising under applicable law, the rights and obligations of the Parties under this Agreement shall terminate upon the termination or expiration of this Agreement, and Vuela shall no longer be provided with FHA coverage under the terms of this Agreement.
Upon any termination or expiration of this Agreement, all liabilities and obligations (including payment obligations) that have accrued prior to such termination or expiration (including payment for Excess Work) shall survive.
This Clause 22.5 and Clauses 25 and 26 of this Agreement shall survive any expiration or termination of this Agreement.
 
23.	Negation of Waiver	
Failure by either Party to enforce any term of this Agreement shall not constitute a waiver of such term.
 
24.	Severability And Partial Invalidity	
If any provision of this Agreement or the application thereof to either Party shall be invalid, illegal or unenforceable to any extent, the remainder of the Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.
 
25.	Governing Law	
This Agreement shall be construed and the performance thereof determined in accordance with the laws of the State of New York, United States of America2, without regard to its conflict of laws provisions. The Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.
The Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, United States of America, in connection with any suit, action or proceeding arising out of or relating to this Agreement and irrevocably waive to the fullest extent permitted by law, any objection to the laying of venue of any such suit, action or proceeding in any such court or any claim that any suit, action or proceeding has been brought in an inconvenient forum. Further, the Parties hereto agree to waive any rights either of them may have to a jury trial in connection with any such suit, action or proceeding.
 
Page 23 of 37

IAE PROPRIETARY INFORMATION

26.	Limitation of Liability	
 
 	26.1	The liability of IAE to Vuela arising out of, connected with, or resulting from the furnishing of Parts and services under this Agreement, whether in contract, tort (including, negligence, but excluding gross negligence, reckless misconduct, and intentionally wrongful conduct) or otherwise, shall be as expressly set forth in this Agreement, and shall not in any event exceed per claim the fair market value of the Engine giving rise to Vuela’s claim. The foregoing shall constitute the sole remedy of Vuela and the sole liability of IAE. In no event shall IAE be liable for special, incidental or consequential damages, including, damage to, or loss of use, revenue or profit with respect to any aircraft, engine, or part thereof.	
 
 	26.2	For the purpose of this Clause 26, “IAE” shall be deemed to include IAE; Pratt and Whitney of East Hartford, Connecticut, USA; Rolls-Royce plc of London, United Kingdom; JAEC, Japanese Aero Engine Corporation, of Tokyo, Japan; and MTU Aero Engines, Motoren und Turbinen Union Munchen, of Munich, Germany and the respective directors, officers, employees and agents of each.	
 
27.	Publicity	
Vuela shall not use the name of IAE or the V2500 engine in any publicity material without the prior written consent of IAE.
 
28.	Confidentiality	
Each of IAE and Vuela acknowledge and understand that certain commercial and financial information contained in or provided in connection with this Agreement is considered by the other to be confidential. IAE and Vuela each hereby agree, for the benefit of the other, that it shall treat the contents of this Agreement as confidential and shall not, without the prior written consent of the other, disclose or cause to be disclosed the terms hereof to any person except to its legal and financial advisors and auditors, or expect as may be required by applicable law or governmental regulation, including federal and state securities laws, or pursuant to an order issued by any court or governmental authority having jurisdiction over Vuela or IAE as the case may be.
 
29.	Records and Audit	
The Parties shall maintain adequate records as required to meet their obligations and compliance with the applicable provisions of this FHA.
A Party shall not unreasonably condition or deny the other Party access to such adequate and applicable records for the administration of this Agreement. Vuela or its nominee may visit the premises of IAE or the Maintenance Center at a time mutually agreeable to the Parties and upon reasonable notice to IAE, for the purpose of quality assurance and to inspect the materials, parts, equipment and tools being used, the work being performed, and to review the quality assurance system in use by IAE and the Maintenance Center.
If IAE or its nominee requires access to the premises of Vuela under this FHA it shall provide reasonable written notice to Vuela and such visit or inspection will be at a time mutually agreeable to the Parties.
 
Page 24 of 37

IAE PROPRIETARY INFORMATION
 
Each Party will comply and ensure that its personnel comply with the other Party’s conduct policies, rules, regulations and directions governing the conduct of visitors upon their premises.
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorized officers as of the day and year first above written:

IAE International Aero Engines AG	  		  	Controladora Vuela Compañía de Aviación, S.A. de C.V.	
			
/s/ Robert G. J. Stire
Name	  		  	/s/ Andres Fabre
Name	
			
Robert G. J. Stire
Printed Name	  		  	Andres Fabre
Printed Name	
			
Commercial Director
Title	  		  	Technology Director
Title	
 
Page 25 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit A
Eligible Engine List

No.	 	Thrust
Rating	 	Serial
Number	 	Delivery
Date	 	Period of
Cover	
1	 	V2527-A5	 	V12285	 	Mar-06	 	TBD	
2	 	V2524-A5	 	V12274	 	May-06	 	TBD	
3	 	V2524-A5	 	V12278	 	May-06	 	TBD	
4	 	V2524-A5	 	V12286	 	May-06	 	TBD	
5	 	V2524-A5	 	V12288	 	May-06	 	TBD	
6	 	V2527M-A5	 	V12487	 	Jan-07	 	TBD	
7	 	V2527M-A5	 	V12472	 	Jan-07	 	TBD	
8	 	V2527M-A5	 	V12545	 	Mar-07	 	TBD	
9	 	V2527M-A5	 	V12532	 	Mar-07	 	TBD	
10	 	V2527M-A5	 	V12559	 	Mar-07	 	TBD	
11	 	V2527M-A5	 	V12557	 	Mar-07	 	TBD	
12	 	V2527M-A5	 	V12561	 	Mar-07	 	TBD	
13	 	V2527M-A5	 	V12563	 	Mar-07	 	TBD	
14	 	V2527-A5	 	TBD	 	Nov-07	 	TBD	
15	 	V2527-A5	 	TBD	 	Nov-07	 	TBD	
16	 	V2527-A5	 	TBD	 	Jan-08	 	TBD	
17	 	V2527-A5	 	TBD	 	Jun-08	 	TBD	
18	 	V2527-A5	 	TBD	 	Jun-08	 	TBD	
19	 	V2527-A5	 	TBD	 	Jul-08	 	TBD	
20	 	V2527-A5	 	TBD	 	Jul-08	 	TBD	
21	 	V2527-A5	 	TBD	 	Oct-08	 	TBD	
22	 	V2527-A5	 	TBD	 	Oct-08	 	TBD	
23	 	V2527-A5	 	TBD	 	Jan-09	 	TBD	
24	 	V2527-A5	 	TBD	 	Jan-09	 	TBD	
25	 	V2527-A5	 	TBD	 	Mar-09	 	TBD	
26	 	V2527-A5	 	TBD	 	Mar-09	 	TBD	
27	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
28	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
29	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
30	 	V2527-A5	 	TBD	 	Sep-09	 	TBD	
31	 	V2527-A5	 	TBD	 	Sep-09	 	TBD	
32	 	V2527-A5	 	TBD	 	Nov-09	 	TBD	
33	 	V2527-A5	 	TBD	 	Nov-09	 	TBD	
34	 	V2527-A5	 	TBD	 	Mar-10	 	TBD	
35	 	V2527-A5	 	TBD	 	Mar-10	 	TBD	
 
Page 26 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit B
IAE FHA Escalation Formula
 
1.	FHA Rates will be subject to escalation in accordance with the formula set forth below:	
*****
Where:
*****
Base Month shall mean the base month specified for the FHA Rates in the Proposal.
*****
For avoidance of doubt, the quarterly values of CIU2023211000000I will apply to each month of a given quarter.
 
2.	The values of the factors *****, and ***** respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.	
 
3.	If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period.	
 
4.	If the application of the formula contained in this Exhibit results in an FHAR for the month which is lower than FHARb, FHAR for the month will be set equal to FHARb.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 27 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit C
Accessories

TYP PART NUMBER	  	PART NAME	  	ATA
CHAPTER	 	  	FIG	 	  	ITEM	 	
16844-000	  	COOLER, IDG OIL	  	 	242142	  	  	 	1	  	  	 	100	  	
7702-03	  	DETECTOR, ASSY FIRE ACCESSORY	  	 	261215	  	  	 	1	  	  	 	100	  	
7827-02	  	DETECTOR, ASSY FIRE	  	 	261217	  	  	 	1	  	  	 	100	  	
AC69576	  	VALVE, SOLENOID STAGE 10 BLE	  	 	361157	  	  	 	1	  	  	 	100	  	
005RL05	  	BOX, RELAY	  	 	715149	  	  	 	1	  	  	 	100	  	
5009913G	  	PUMP, FUEL LP/HP	  	 	731241	  	  	 	1	  	  	 	100	  	
17300G09	  	VALVE, FUEL DIVERTER & RETUR	  	 	731342	  	  	 	1	  	  	 	100	  	
2A0526	  	VALVE, FUEL FLOW DIVIDER	  	 	731343	  	  	 	1	  	  	 	20	  	
2A3343	  	PROBE, TOTAL PRESS&TEMP	  	 	732211	  	  	 	1	  	  	 	10	  	
2A1126	  	PROBE, TEMP&PRESS DIFSR CASE	  	 	732215	  	  	 	1	  	  	 	30	  	
2A3504	  	CONTROL, ELECTRONIC ENGINE	  	 	732234	  	  	 	1	  	  	 	280	  	
430153	  	GENERATOR, STATOR ALTERNATOR	  	 	732238	  	  	 	1	  	  	 	100	  	
FMU550MK1	  	METER, FUEL	  	 	732252	  	  	 	1	  	  	 	100	  	
9-217-59	  	TRANSMITTER, FUEL FLOW	  	 	733117	  	  	 	1	  	  	 	100	  	
21SN04-300B	  	SWITCH, FUEL FILT DIFF PRESS	  	 	733415	  	  	 	1	  	  	 	10	  	
22912-000	  	THERMOCOUPLE, FUEL TEMP	  	 	733515	  	  	 	1	  	  	 	100	  	
5U0012	  	EXCITER, IGNITION	  	 	741138	  	  	 	1	  	  	 	120	  	
5U0012	  	EXCITER, IGNITION	  	 	741138	  	  	 	1	  	  	 	520	  	
5U0072	  	LEAD, IGNITION	  	 	742143	  	  	 	1	  	  	 	100	  	
D1876-1000A	  	COOLER, AIR NO.4 BRG COMP	  	 	752241	  	  	 	1	  	  	 	100	  	
5860010-108	  	VALVE, AIR STG 10 TO HPT	  	 	752351	  	  	 	1	  	  	 	100	  	
5860016-131	  	VALVE, AIR HPT/LPT ACC	  	 	752451	  	  	 	1	  	  	 	100	  	
5860017-139	  	ACTUATOR,VALVE HPT/LPT ACC	  	 	752452	  	  	 	1	  	  	 	100	  	
1777MK2	  	ACTUATOR, MASTER LPC BLEED	  	 	753142	  	  	 	1	  	  	 	100	  	
1778MK1	  	ACTUATOR, SLAVE-LPC BLEED	  	 	753143	  	  	 	1	  	  	 	100	  	
2607MK2	  	ACTUATOR VARIABLE STATOR	  	 	753241	  	  	 	1	  	  	 	100	  	
AC69572	  	VALVE, SOLENOID STG 7 HPC	  	 	753251	  	  	 	1	  	  	 	100	  	
AC69572	  	VALVE, SOLENOID STG 7 HPC	  	 	753251	  	  	 	1	  	  	 	100	  	
AC69572	  	VALVE, SOLENOID STG 7 HPC	  	 	753251	  	  	 	1	  	  	 	100	  	
AC69924	  	VALVE, BLEED ST7 HP COMPRESS	  	 	753252	  	  	 	1	  	  	 	100	  	
AC69924	  	VALVE, BLEED ST7 HP COMPRESS	  	 	753252	  	  	 	1	  	  	 	100	  	
AC69924	  	VALVE, BLEED ST7 HP COMPRESS	  	 	753252	  	  	 	1	  	  	 	100	  	
AC69574	  	VALVE, SOLENOID STG 10 HPC	  	 	753253	  	  	 	1	  	  	 	400	  	
5950041-108	  	VALVE, BLEED ST 10 HP COMP	  	 	753254	  	  	 	1	  	  	 	400	  	
RP 162-02	  	SENSOR, NACELLE TEMPERATURE	  	 	754115	  	  	 	1	  	  	 	100	  	
2A2159	  	THERMOCOUPLE OPTION	  	 	772115	  	  	 	20	  	  	 	100	  	
144-171-000-031	  	*TRANSDUCER, VIBRATION	  	 	773215	  	  	 	1	  	  	 	100	  	
4A7110	  	PUMP & FILTER A/O PRESS.	  	 	792141	  	  	 	1	  	  	 	1	  	
4A7111	  	PUMP & FILTER A/O PRESS.	  	 	792142	  	  	 	2	  	  	 	2	  	
4A7112	  	PUMP & FILTER A/O PRESS.	  	 	792143	  	  	 	3	  	  	 	3	  	
4A7113	  	PUMP & FILTER A/O PRESS.	  	 	792144	  	  	 	4	  	  	 	4	  	
4A7114	  	PUMP & FILTER A/O PRESS.	  	 	792145	  	  	 	5	  	  	 	5	  	
4A7115	  	PUMP & FILTER A/O PRESS.	  	 	792146	  	  	 	6	  	  	 	6	  	
4A7116	  	PUMP & FILTER A/O PRESS.	  	 	792147	  	  	 	7	  	  	 	7	  	
4A7117	  	PUMP & FILTER A/O PRESS.	  	 	792148	  	  	 	8	  	  	 	8	  	
 
Page 28 of 37

IAE PROPRIETARY INFORMATION

TYP PART NUMBER	  	PART NAME	  	ATA
CHAPTER	 	  	FIG	 	  	ITEM	 	
4A7118	  	PUMP & FILTER A/O PRESS.	  	 	792149	  	  	 	9	  	  	 	9	  	
4A7119	  	PUMP & FILTER A/O PRESS.	  	 	792150	  	  	 	10	  	  	 	10	  	
4A7120	  	PUMP & FILTER A/O PRESS.	  	 	792151	  	  	 	11	  	  	 	11	  	
4A7121	  	PUMP & FILTER A/O PRESS.	  	 	792152	  	  	 	12	  	  	 	12	  	
4A7122	  	PUMP & FILTER A/O PRESS.	  	 	792153	  	  	 	13	  	  	 	13	  	
4A7123	  	PUMP & FILTER A/O PRESS.	  	 	792154	  	  	 	14	  	  	 	14	  	
4A7124	  	PUMP & FILTER A/O PRESS.	  	 	792155	  	  	 	15	  	  	 	15	  	
4A7125	  	PUMP & FILTER A/O PRESS.	  	 	792156	  	  	 	16	  	  	 	16	  	
 
Page 29 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit D
Powerplant – Description
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 30 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit E
Addresses
 
1.	Vuela ADDRESSES	
 
 	(a)	Address for Notices:	
Av. Prolongacion Reforma # 490,
Primer Piso,
Colonia Lomas Santa Fe,
Delegacion Alvaro Obregon
Mexico,
Distrito Federal
C.P 01210
Facsimile No. 52 55 5261 6460
Attention: Chief Financial Officer
 
 	(b)	Address for Invoices:	
Av. Prolongacion Reforma # 490,
Primer Piso,
Colonia Lomas Santa Fe,
Delegacion Alvaro Obregon
Mexico,
Distrito Federal
C.P 01210
Facsimile No. 52 55 5261 6460
Attention: Financial Controller
 
2.	IAE ADDRESSES	
 
 	(a)	Address for Notices:	
Attention: Chief Legal Officer & Company Secretary
IAE International Aero Engines AG
400 Main Street
Mail Stop 121-10
East Hartford, CT 06108
Fax: (860) 565-5220
 
 	(b)	Address for Invoices:	
Attention: Accounts Receivable Manager
IAE International Aero Engines AG
400 Main Street
Mail Stop 121-10
East Hartford, CT 06108
Fax: (860) 565-9332
 
Page 31 of 37

IAE PROPRIETARY INFORMATION

 	(c)	Address for all Other FHA Matters:	
Attention: Customer Fleet Director
IAE International Aero Engines AG
400 Main Street
Mail Stop 121-10
East Hartford, CT 06108
Fax: (860) 565-xxxx
 
Page 32 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit F
IAE Engine Monitoring Services
 
1.	IAE will provide the following Engine monitoring services (“ Services ”) through the ***** system:	
 
 	(a)	Engine Trend Monitoring	
 
 	(i)	Provide processing of in-flight Engine data received from Vuela into IAE’s EHM database as provided per the data input and transmission requirements set forth in Section 3 herein. All processed data will be provided to Vuela via IAE’s web portal. Daily updates require web portal access described in Section 1(b) herein.	
 
 	(ii)	Provide automated mechanical exceedance reporting for those Aircraft that are equipped with required on-board hardware and software.	
 
 	(iii)	Provide technical analysis of Eligible Engines’ performance data and report anomalies indicated by such data to designated Vuela personnel as required.	
 
 	(iv)	Provide access to monthly Eligible Engine operating trend analysis report covering post Period of Cover operations to assist Vuela in the planning and scheduling of Eligible Engines for shop visits.	
 
 	(v)	Provide automated alert notification of parameters that have exceeded level and rate change limits.	
 
 	(vi)	Provide access to alert details reports that identify Aircraft and Eligible Engines by serial number and provide the date, time, magnitude and details of occurrences when such Eligible Engine exceeds specific performance parameters and provide the ability to store comments associated with a given alert.	
 
 	(vii)	Provide exhaust gas temperature (subject to data availability) Watch-Lists, updated monthly utilizing data received from Vuela to assist Vuela in scheduling Eligible Engine removals for maintenance purposes. The Watch-Lists provide an engine ranking and predicted removal date for a given Eligible Engine based on the measured parameter and deterioration rate to assist with proactive on-wing management and maintenance planning.	
 
 	(viii)	Provide access to the following engine performance parameter trend plots that are updated real-time as new in-flight Engine data is received from Vuela:	
 
 	•	 	EGT Margin	
 
 	•	 	Sea Level Outside Air Temperature Limits	
 
 	•	 	N1 and N2 Shaft Speeds	
 
 	•	 	Fuel Flow	
 
 	•	 	Vibration	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 33 of 37

IAE PROPRIETARY INFORMATION

 	•	 	Oil Temperature	
 
 	•	 	Oil Pressure	
 
 	•	 	P2.5, T2.5, P3.0, T3.0, P12.5	
 
 	(ix)	Upon special request, raw in-flight Engine data can be supplied to Vuela.	
 
 	(x)	Input data files and individually processed records will be stored for a minimum period of five (5) years.	
 
 	(b)	WEB PORTAL ACCESS	
 
 	(i)	Provide twenty-four (24) hour per day access to reports and processed information, provided to under Section 1(a) herein, through a secure web portal created and maintained by IAE. Such web portal access shall be created and provided to Vuela approximately thirty (30) days from the execution of this Agreement. Vuela must meet IAE defined requirements for access as detailed in Section 2 herein. IAE will use all reasonable efforts to ensure a service availability target of 96% when measured on an annual basis and that down time of the system is no longer than one (1) Business Day for any one incident.	
 
 	(ii)	IAE shall provide Services under the terms of this Agreement contingent upon the timely receipt of data required by IAE from Vuela. It is understood between the parties that the ability of IAE to provide timely and accurate reports and processed information through these web-based services is dependent upon the quality and timeliness of the data received from Vuela.	
 
 	(iii)	If email, or pager or cell phone alert notifications are required by Vuela, Vuela shall be responsible for acquiring and maintaining the required pager and cell phone hardware and software and pay any associated communications fees. It is Vuela’s responsibility to establish an alert notification contact list and advise IAE of any changes.	
 
2.	ACCESSIBILITY	
 
 	(a)	To facilitate internet portal access, Vuela is required to maintain the following: (i)  internet access; (ii)  Internet Explorer version 5.5 or higher; (iii) 128 bit Secure Socket Layer (“ SSL ”) encryption capability; and (iv)  a minimum internet speed of 56K bits per second to access the internet portal.	
 
 	(b)	All information being transmitted through the internet portal will be protected using SSL encryption. In addition, each user of the internet portal will be authenticated at logon with a unique user identification and password. Once authenticated to the internet portal, Vuela will only be allowed to access the information that Vuela and IAE mutually agree a specific user may review. IAE shall review security requirements for web portal access from time to time to ensure an appropriate level of data protection. Updated security requirements shall be communicated to Vuela on a timely basis.	
 
Page 34 of 37

IAE PROPRIETARY INFORMATION

3.	TRANSMISSION OF DATA BY VUELA	
 
 	(a)	Vuela shall provide all data requested by IAE in order to perform the Services, including but not limited to the date and time the data was recorded, aircraft and engine number, engine position, altitude and mach (or air speed), total air temperature, engine pressure ratio, rotor speeds, fuel flow, oil temperature, oil pressure, mechanical exceedances and pertinent maintenance actions (EHM Eligible Engine changes, sensor changes, other items that may impact engine performance). Vuela shall electronically transmit engine condition monitoring data to IAE’s designated ground station via air-to-ground service providers (e.g., ARINC and SITA) or via such other routing as the parties mutually agree.	
 
 	(b)	Using the facilities available within IAE’s V2500 engine monitoring program services, Vuela shall provide feedback of on-wing maintenance actions taken as a result of an alert notification as provided in accordance with Section 1(a)(v) herein.	
 
Page 35 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit G
Excess Work Labor and Fee Rates

Item	 	Basis	 	Rates/Fees 4	
Hourly labor rate	 	Labor hours	 	*****	
			
Handling fee, new parts	 	Current catalog part price	 	*****	
			
Handling fee, LLP’s	 	Current catalog part price 1	 	*****	
			
Handling fee, used parts	 	***** of current catalog part price	 	*****	
			
Handling fee, customer supplied material	 	Current catalog part price	 	*****	
			
Handling fee, vendor repair	 	Vendor invoice amount	 	*****	
			
Rotable fee 3	 	Vendor invoice amount	 	*****	
Notes:
 
1.	The price of used LLPs will be adjusted pro-rata on the basis LLP cycle life remaining.	
 
2.	A line item cap of *****applies.	
 
3.	Rotable transactions are subject to both the rotable material fee and the vendor repair handling fee.	
 
4.	The above labor rates are expressed in United States Dollars and are subject to escalation from the base month of January 2004 in accordance with the formula set forth in Exhibit B (as may be modified in accordance with the provisions of Clause 11 to this Agreement.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 36 of 37

IAE PROPRIETARY INFORMATION
 
Exhibit H
FHA Rate Adjustment
For each Eligible Engine whose individual operational parameters differ from those set forth in Clause 10.5 of the Agreement, the Restoration Shop Visit FHA Rates shall be adjusted for the different parameters in accordance with the following formula:
*****
Where:

*****	 	=	    	*****	
*****	 	=	    	*****	
*****	 	=	    	*****	
*****	 	=	    	*****	
The MTBR model will be Model V1.2.TB, as provided by IAE to Vuela.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Page 37 of 37

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.06
Lease No. 1
THIS LEASE is made the 28 day of April 2006 BETWEEN
 
(1)	ENGINE LEASE FINANCE CORPORATION (“Lessor”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“Lessee”).	
WHEREAS Lessor and Lessee have entered into an aircraft engine general terms agreement (the “GTA”) dated 28 th  April 2006 and this is a Lease as defined therein.
IT IS HEREBY AGREED : 
 
1.	Lease	
By the execution and delivery of this Lease, Lessor agrees subject to Lessor acquiring title to the Engine on the Delivery Date to lease the Engine to Lessee and Lessee agrees to lease the Engine from Lessor upon the terms set out in the GTA (which are incorporated herein and form part hereof) and the more particular terms set out herein:

Engine:	  	One new and unused V2527M-A5; M.S.N: V12285;	
		
QEC:	  	as specified in Appendix A;	
		
Delivery Condition:	  	as specified in Appendix A;	
		
Delivery Location:	  	Such mutually agreed location as will minimise or exclude tax consequences adverse to Lessee and Lessor;	
		
Scheduled Delivery Date:	  	21 April 2006 or such other date as may be agreed between Lessor and Lessee and on which date Lessor acquires title to the Engine;	
		
Final Delivery Date:	  	28 April 2006 or such other date as may be agreed between Lessor and Lessee;	
		
Agreed Value:	  	*****	
		
Rent:	  	***** payable on the 27 th day of each month (as adjusted in accordance with Clause 3);	
		
Deposit:	  	***** payable on or before the Delivery Date and refundable to Lessee without interest (i) in accordance with clause 3.2(a)(iv) of the GTA within ten (10) Business Days of full discharge of all Lessee obligations in accordance with this Lease or (ii) within ten (10) Business Days of termination of this Lease where such termination occurs pursuant to clause 15.5 of the GTA;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

			
Lessor’s Security:	  	not applicable;	
		
Default Rate:	  	***** per annum over US Prime, compounded monthly and calculated on the basis of a 360 day year;	
		
Scheduled Expiry Date:	  	the date falling 68 months after the Delivery Date;	
		
Option Exercise Date:	  	the date (if any) on which Lessee exercises the option granted by Clause 2 by delivering notice to Lessor in accordance therewith;	
		
Primary Lease Period:	  	the period commencing on the Delivery Date and ending on the Scheduled Expiry Date;	
		
Secondary Lease Period:	  	the period to be agreed by Lessor and Lessee commencing on the Scheduled Expiry Date;	
		
Secondary Lease Period Expiry Date:	  	the date scheduled as the last day of the Secondary Lease Period on the Option Exercise Date;	
		
Hourly Reserve:	  	subject to Clause 5 below, the applicable $ amount specified in Annex 1 hereto and adjustable in accordance with clause 4.2 of the GTA whether or not Lessee is obligated to pay Hourly Reserves;	
		
EHM Claim Cap:	  	***** of the Hourly Reserves balance held by Lessor based on a minimum of a Level 1 ESV workscope; and ***** of the Hourly Reserves balance held by Lessor based on a minimum Level 2 ESV workscope;	
		
Level 1 ESV:	  	an Engine Shop Visit at which the minimum workscope applied to each of the Major Modules is not equal to the Minimum eMMP Refurbishment Level for ESV2 as stated in Annex 2 but is at least equal to the Minimum eMMP Refurbishment Level for ESV1 as stated in Annex 2 and with a minimum Life Limited Part build life to be agreed between Lessor and Lessee reflecting Lessee’s expected minimum release life for Life Limited Parts following the application of such workscope provided always that no Life Limited Part shall have less than 9,000 Cycles remaining to scheduled removal;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

			
Level 2 ESV:	  	an Engine Shop Visit at which the minimum workscope applied to each of the Major Modules is at least equal to the Minimum eMMP Refurbishment Level for ESV2 as stated in Annex 2 and with a minimum Life Limited Part build life to be agreed between Lessor and Lessee reflecting Lessee’s expected minimum release life for Life Limited Parts following the application of such workscope provided always that no Life Limited Part shall have less than 11,000 Cycles remaining to scheduled removal;	
		
Engine Heavy Maintenance	  	An Engine Shop Visit where either a Level 1 ESV or Level 2 ESV was performed;	
		
LLP Reserve:	  	***** and adjustable in accordance with clause 4.3 of the GTA;	
		
Major Modules:	  	as specified in Annex 2;	
		
Minimum Flight Hours and Cycles remaining on Redelivery:	  	not more than 1,000 Flight Hours and Cycles since new or last Engine Heavy Maintenance;	
		
Minimum EGT Margin at Redelivery:	  	sufficient to achieve the balance of the last Engine Heavy Maintenance Life Limited Part build life remaining at Redelivery based upon Lessee’s historical performance loss in EGT margin in the preceding three (3) years of operation for engines of the same type as the Engine;	
		
Stub Life:	  	for each Life Limited Part is ***** of the certified life limit for that Part;	
		
Utilisation Report:	  	the report set out in Appendix C;	
		
Redelivery Location:	  	Miami International Airport, Florida, United States of America or such other location as Lessor and Lessee shall agree;	
		
Lessee’s Country:	  	Mexico.	
 
2.	Option	
Provided that no Relevant Event has occurred and is continuing on the Option Exercise Date or the Scheduled Expiry Date, the parties may opt to lease the Engine for the Secondary Lease Period. The option may be exercised by an unconditional notice to Lessor not later than 3 months prior to the Scheduled Expiry Date. Once such notice has been given by Lessee and received by Lessor, it shall be irrevocable and shall oblige Lessee to lease the Engine for the Secondary Lease Period upon the terms of the GTA provided that Lessor has consented thereto which consent shall be at Lessor’s sole discretion.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

3.	Rent Adjustment	
The Rent is based upon ***** LIBOR and ***** US$ Swap Rate as quoted to Lessor by Bank of America on March 2nd, 2006 at ***** and ***** respectively. To the extent that the equivalent US$ Swap Rate and one month LIBOR on the Delivery Date are greater or lower than this, Lessor will adjust the Lease Factor accordingly and the Rent shall be calculated by reference to such adjusted Lease Factor and the Rent so calculated shall be fixed for the duration of the Primary Lease Period. Any such adjustment shall be notified by Lessor to Lessee and absent manifest error, the adjusted amount so calculated shall thereupon be the Rent.
 
4.	Redelivery Condition Compensation	
 
4.1	Lessee shall compensate Lessor for Flight Hours used since Delivery as follows:-	
 
 	(a)	If the last Engine Heavy Maintenance prior to Redelivery was at least equivalent to a Level 1 ESV but not equivalent to a Level 2 ESV, Lessee shall compensate Lessor in $ for each Flight Hour flown since last Level 1 ESV at the Level 1 ESV Compensation Rate at the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and Redelivery) plus an amount in $ for each Flight Hour flown since new or last Level 2 ESV (whichever is applicable) at the ESV Level 2 Compensation Rate at the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and Redelivery); or	
 
 	(b)	If the last Engine Heavy Maintenance prior to redelivery was at least equivalent to a Level 2 ESV, Lessee shall compensate Lessor in $ for each Flight Hour flown since last Level 2 ESV at the ESV Base Compensation Rate at the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and Redelivery); or	
 
 	(c)	If there has been no Engine Heavy Maintenance since Delivery then Lessee shall compensate Lessor in $ for each Flight Hour flown since new at the ESV Base Compensation Rate at the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and Redelivery).	
 
4.2	Lessee shall pay Lessor compensation in $ for life used on each Life Limited Parts between Delivery and Redelivery in an amount per Cycle calculated by dividing the then current Manufacturer list price of such Life Limited Part by the then current life limit of such Life Limited Part minus the Stub Life.	
 
4.3	Provided that no Relevant Event has occurred and is continuing, Lessor shall apply Hourly Reserves and LLP Reserves then held and not subject to a claim for reimbursement or payment to Lessee in accordance with the GTA to the compensation amounts payable to Lessor under this Clause 4.	
 
5.	Alternative Hourly Reserve Provisions	
 
5.1	Notwithstanding clause 4 of the GTA, provided that:	
 
 	(a)	the Engine continues to be maintained under and enjoy the benefit of a fleet hour agreement between Lessee and Manufacturer (the “FHA”); and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 	(b)	Lessee continues to comply with the provisions of the FHA,	
then Lessee shall not be obligated to pay Hourly Reserves to Lessor during the Lease Period.
Lessee shall procure an undertaking from Manufacturer in favour of Lessor promptly to notify Lessor in writing if either or both of (a) and (b) above ceases to be the case. If Lessor receives such notification from Manufacturer and/or (a) and/or (b) ceases to be the case and if the event which is the cause of same (if capable of being cured) has not been cured by Lessee within any applicable cure period stated in the FHA then Lessee shall immediately make a payment to Lessor in an amount equal to the aggregate amount of Hourly Reserves that would have been payable by Lessee for all Flight Hours flown by the Engine to the date that such payment becomes payable hereunder which amount shall be calculated as follows:-
 
 	(i)	if the Engine has not had any Engine Heavy Maintenance since new then such amount shall be calculated in respect of each Flight Hour since new at the ESV Base Compensation Rate determined in accordance with the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and the date such amount is payable hereunder), or	
 
 	(ii)	if the last Engine Heavy Maintenance to occur was at least equivalent to a Level 1 ESV but not equivalent to a Level 2 ESV then such amount shall be calculated in respect of each Flight Hour since last Level 1 ESV at the Level 1 ESV Compensation Rate determined in accordance with the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and the date such amount is payable hereunder) and in respect of each Flight Hour since last Level 2 ESV or new (whichever is applicable) at the Level 2 ESV Compensation Rate determined in accordance with the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and the date such amount is payable hereunder, or	
 
 	(iii)	if the last Engine Heavy Maintenance was at least equivalent to a Level 2 ESV, then such amount shall be calculated in respect of each Flight Hour since last Level 2 ESV at the ESV Base Compensation Rate determined in accordance with the applicable Cycle ratio as stated in Annex 1 (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and the date such amount is payable hereunder,	
and Lessee shall thereafter pay Lessor Hourly Reserves for Flight Hours operated by the Engine for the remaining duration of the Lease Period which shall be held and applied in accordance with the GTA.
 
5.2	Notwithstanding clause 4 of the GTA, the maximum amounts that Lessor is obligated to pay to Lessee in respect of a completed Engine Heavy Maintenance shop visits under clause 4.4 (a) of the GTA shall be ***** (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

the date of induction for such Engine Heavy Maintenance) in respect of a Level 1 ESV and ***** (as adjusted in accordance with clause 4.2(a) of the GTA between Delivery and the date of induction for such Engine Heavy Maintenance) in respect of a Level 2 ESV.
 
5.3	For the avoidance of doubt, Lessor shall not be obligated to pay Lessee more than the aggregate amount that Lessee has paid to Lessor by way of Hourly Reserves less any previous amounts paid by Lessor in respect of completed Engine Shop Visits.	
 
6.	Subleasing	
Subject to the provisions of clause 8.2 of the GTA, Lessee may sublease the Engine to one or more airlines within Grupo TACA.
 
7.	Alternative Redelivery Provisions	
Notwithstanding clause 20.2(a) of the GTA, Lessee shall not be obliged to perform a test cell run if the Engine has been removed from a Host Aircraft immediately prior to redelivery, provided that:-
 
 	(a)	Lessee provides to Lessor take-off trend monitoring data for each of the last 25 flights operated by the Engine immediately prior to redelivery; and	
 
 	(b)	such take-off trend monitoring data does not indicate that the Engine may not comply with the Redelivery Condition.	
If, in Lessor’s opinion (acting reasonably), a review of the take-off trend monitoring data indicates that the Engine may not meet the Redelivery Condition or, in Lessor’s opinion (acting reasonably), such take-off trend monitoring data is not an accurate gauge of the condition of the Engine, then Lessee shall perform or cause to be performed at Lessee’s sole cost and expense a full performance test cell run.
 
8.	Additional Provisions	
 
8.1	The Engine shall not be operated by Lessee or any Sublessee at any time during the Lease Period at a thrust rating higher than V2524-A5 rating except that Lessee or any Sublessee may operate the Engine at V2527-A5 thrust rating for up to 5% of the total time in Flight Hours or Cycles between Engine Heavy Maintenance shop visits.	
 
8.2	It shall be an additional condition precedent to this Lease that Lessee deliver to Lessor the written undertaking from the Manufacturer referred to in Clause 5 together with a certified copy of the relevant portions of the FHA between Lessee and Manufacturer reflecting the scope of services provided thereunder and any conditions as to the availability of such services provided however that Lessor shall have entered into a non-disclosure agreement with Manufacturer pursuant to which Manufacturer has consented to the disclosure of such provisions of the FHA to Lessor.	
 
8.3	Lessor hereby confirms that any maintenance and repair performer or service agency licensed by the FAA or EASA to undertake maintenance work on the Engine and used by the Manufacturer to maintain the Engine under the FHA is hereby approved as an Authorised Repairer.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

SIGNED for and on behalf of
ENGINE LEASE FINANCE CORPORATION

By:	 	/s/ Tom Barret	
Name:	 	Tom Barret	
Title:	 	Executive Vice President Chief Financial and Administrative Officer	

,in the presence of :	
Name	 	:	
Occupation	 	:	
Address :	 		
SIGNED for and on behalf of
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Alfonso Ascencio Triujeque	
Title:	 	General Counsel	

in the presence of :	
Name	 	:	
Occupation	 	:	
Address :	

Annex 1
ESV Base Compensation Rate \ Hourly Reserve

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
ESV Level 1 Compensation Rate

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
ESV Level 2 Compensation Rate

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-179	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
9

Annex 2

Principal Maintenance
Assembly/Modular
Description	  	Illustrated Parts
Catalogue Reference	  	Minimum eMMP
Refurbishment Level
for ESV1	  	Minimum eMMP
Refurbishment Level
for ESV2	
Fan Module	  	72-31-00-01-001	  	3	  	3	
Intermediate Case Module	  	72-32-00-01-001	  	1	  	2	
LP Booster sub module	  	72-32-80	  	1	  	3	
Internal Gearbox sub module	  	72-32-10	  	1	  	3	
Stub Shaft assembly sub module	  	72-32-50	  	1	  	3	
HP Compressor Module	  	72-41-00-01-001	  	1	  	3	
Diffuser	  	72-42-00	  	2	  	3	
Combustor	  	72-42-00	  	3	  	3	
No. 4 Bearing Compartment	  	72-43-00	  	3	  	3	
HPT St. 1 Nozzle Module	  	72-44-00-01-001	  	3	  	3	
HPT Module	  	72-45-00-01-001	  	3	  	3	
LP Turbine Module	  	72-50-00-01-001	  	1	  	3	
Accessory Gearbox Module	  	72-60-00-01-001	  	1	  	2	
 
10

Appendix A –Acceptance Certificate
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“Lessee”) hereby acknowledges that on          at                      hours it accepted delivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated      April 2006 (the “Lease”) made between Engine Lease Finance Corporation (“Lessor”) and Lessee and confirms that:-
 
(a)	at                      it has received from Lessor possession of one V2527M-A5, bearing manufacturer’s serial number V12285, all parts attached thereto and thereon in a new condition, as more particularly described in Annex 1 hereto;	
 
(b)	following inspection, it has accepted delivery of the Engine “as is where is”;	
 
(c)	the Engine Flight Hours and Cycles and the Life Limited Parts Flight Hours and Cycles are all zero and such figures shall be used for the purpose of calculating any payments due to be made by Lessee at the time of Redelivery of the Engine to Lessor;	
 
(d)	the Engine and the Engine Technical Records as more particularly described in Annex 1 have been delivered to and accepted by Lessee on the Delivery Date and, as between Lessor and Lessee, are to Lessee’s full satisfaction and in accordance with the provisions of the Lease;	
 
(e)	the Lease Period commenced on the date of this Certificate and Lessee became obliged to pay to Lessor the amounts provided for in the Lease including in particular a Deposit of ***** and Rent is ***** payable on the 27th day of each month;	
 
(f)	the Engine is insured in accordance with the terms of the Lease;	
 
(g)	all representations and warranties made by Lessee pursuant to the Lease remain and if made on this date, would be true and correct in all respects;	
 
(h)	no Relevant Event has occurred or will result from Delivery taking place; and	
 
(i)	it has obtained all required permits, authorisations and licences necessary to lease and operate the Engine pursuant to and in accordance with the Lease.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
IN WITNESS WHEREOF, Lessee has caused this Acceptance Certificate to be executed by its duly authorised officer as of the date first set forth above.
Dated this      day of April 2006
Signed for and on behalf of: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

By:	 	 	
Name:	 	 	
Title:	 	 	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
11

Annex 1 to Appendix A (Acceptance Certificate)
Description of Engine
 
1.	Description	
 
1.1	Engine Type: New and unused V2527M-A5 in bare configuration with a transportation stand and MPV bag;	
 
1.2	Serial no.: V12285;	
 
1.3	Manufacturer: IAE International Aero Engines AG;	
 
1.4	Transportation Stand: P/N             ; S/N             ; and	
 
1.5	Maintenance Programme references: on-wing             ; shop             .	
 
2.	Condition	
The Engine is in the condition noted in the following documents, copies of which were delivered to Lessee on or before Delivery:-
 
2.1	Export certificate of airworthiness at manufacture;	
 
2.2	Vital Statistics Log;	
 
2.3	Airworthiness Directive status; and	
 
2.4	Test cell Report.	
 
12

Appendix B – Redelivery Acceptance Certificate
ENGINE LEASE FINANCE CORPORATION (“Lessor”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“Lessee”) hereby acknowledge that on [    ] at [    ] hours the Lessor accepted Redelivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated [    ] (the “Lease”) made between Lessor and Lessee and confirm that at [Delivery Location] Lessor has received from Lessee possession of:-
 
(a)	one V2527M-A5, bearing manufacturer’s serial number [ — ], all Parts attached thereto and thereon as more particularly described in Annex 1; and	
 
(b)	the Engine Technical Records as listed in Section 2 of Schedule 4 of the general terms agreement incorporated by reference into the Lease, including all manuals, technical records and historical information regarding the Engine and all Parts attached thereto and thereon;	
 
Lessor	and Lessee also hereby acknowledge that:-	
 
(c)	the Engine Flight Hours and Cycles since new or last ESV level 1 and ESV Level 2 and the Life Limited Parts Flight Hours and Cycles since new ] are as stated in Annex 2 and that such figures shall be used for the purpose of calculating any payments due to be made by Lessee to Lessor in accordance with the Lease;	
 
(d)	the Engine and Engine Technical Records are hereby accepted by Lessor subject to (i) the provisions of the Lease and (ii) correction by Lessee within [number of days] of the discrepancies specified in Annex 3 hereto which Lessee hereby undertakes to correct the discrepancies to the complete satisfaction of Lessor; and	
 
(e)	the leasing of the Engine by Lessor to Lessee pursuant to the terms of the Lease is hereby terminated without prejudice to Lessee’s continuing obligations under the terms of the Lease including, without limitation subparagraph (d) above.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
Dated this [    ] day of [            ]
Signed for and on behalf of:

[CONCESIONARIA VUELA	  		  	ENGINE LEASE FINANCE	
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.]	  		  	CORPORATION	
				
By:	  	 	  		  	 	
Name:	  	 	  		  	 	
Title:	  	 	  		  	 	
 
13

Annex 1 to Appendix B (Redelivery Acceptance Certificate )
Description of Redelivery Engine
 
1.	Description	
 
1.1	Engine Type: V2527M-A5 in bare configuration with a transportation stand and MPV bag	
 
1.2	Serial no.: [ — ]	
 
1.3	Manufacturer: IAE International Aero Engines AG;	
 
1.4	Transportation Stand: P/N [            ]; S/N [            ]; and	
 
1.5	Maintenance Programme references: on-wing [    ]; shop [            ]	
 
2.	Condition	
At redelivery the Engine shall be in the condition noted in Annex 2 to this Redelivery Acceptance Certificate and in the Technical Records listed in Section 2 to Schedule 4 of the GTA
 
14

Annex 2 to Appendix B (Redelivery Acceptance Certificate )
Redelivery Condition
 
15

Annex 3 to Appendix B (Redelivery Acceptance Certificate)
Engine and Engine Technical Record discrepancies at Redelivery
 
16

Appendix C - Utilisation Report
[On Lessee’s headed notepaper]
ENGINE MONTHLY UTILISATION REPORT
 
TO:	ASSET AND DATABASE MANAGER	
ENGINE LEASE FINANCE CORPORATION
SHANNON BUSINESS PARK,
SHANNON, CO. CLARE, IRELAND.
FACSIMILE NO.    +353 61 361785
ENGINE TYPE:     V2527M-A5 in bare configuration with a transportation stand and MPV bag 
M.S.N. [ — ]
REPORT DATE: [                    ]
Section 1 must be completed and returned within 10 days after the end of each calendar month and on the termination date.
Section 2 must be completed after each Engine’s Shop Visit for any reason.
SECTION 1
Date Installed
Aircraft Reg.
Aircraft owner:
Present wing/tail Location
T.S.N.
C.S.N.
Hrs Flown this mth
Cycles flown this mth
Thrust Rating this mth
SECTION 2
Date last shop visit
TSN at shop visit
CSN at shop visit
Cycles to next shop visit
Next limiting component
IMPORTANT NOTE
Attach listing of all modifications, Airworthiness Directives, service bulletins carried out during each Engine Shop Visit as it occurs. Also attach a copy of the Engine Shop Visit findings report and the latest revision to the Engine’s Life Limited Parts (disk) profile.
Signed:
Authorised Quality Assurance/Engineering Officer
 
17

ENGINE LEASE FINANCE CORPORATION
AND
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
LEASE EXTENSION AND AMENDMENT AGREEMENT NO.1 IN RESPECT OF
THE ENGINE LEASE AGREEMENT DATED 28 April 2006 IN RESPECT OF
ONE (1) V2527M-A5 AIRCRAFT ENGINE MSN V12285
Volaris – Extension and Amendment ESN V12285 Execution

This Lease Extension and Amendment Agreement No.1 is dated as of the 30 day of September 2011 (“Agreement”)
BETWEEN:
 
 	(1)	Engine Lease Finance Corporation (the “Lessor”); and	
 
 	(2)	Concesionaria Vuela Campañía de Aviación, S.A.P.I. de C.V. (formerly known as Concesionaria Vuela Campañía de Aviación, S.A. de C.V.) (the “Lessee”).	
WHEREAS:
 
(A)	Lessor and Lessee are parties to an aircraft engine lease agreement entitled “Lease No.1”, incorporating the terms of an aircraft engine general terms agreement (the “GTA”) both dated 28 April 2006 (the “Lease”); and	
 
(B)	Lessor and Lessee wish to extend the leasing of the Engine under the Lease and to make certain amendments to the Lease as set out in this Agreement.	
IT IS HEREBY AGREED as follows:- 
 
1.	Words and phrases used in this Agreement and not defined shall have the same meanings as in the Lease and the following words shall bear the following meanings:	
“Conditions Precedent” means:
 
 	a.	Evidence satisfactory to Lessor of Lessee’s authority to enter into and perform its obligations under this Agreement and an incumbency certificate containing the name(s), title(s) and specimen signature(s) of the person or persons authorised to execute this Agreement on behalf of Lessee;	
 
 	b.	Receipt by Lessor of originals of this Agreement duly executed by all parties;	
 
 	c.	No Relevant Event or Event of Default having occurred or being continuing on the Effective Date;	
 
 	d.	Receipt by Lessor of insurance/reinsurance certificates and a letter of undertaking from Lessee’s insurance brokers evidencing satisfactory to Lessor that the Engine will be insured in accordance with the Lease after the Effective Date;	
Volaris – Extension and Amendment ESN V12285 Execution
 
1

 	e.	Evidence of the extension of the appointment by Lessee of the Process Agent and of the Process Agent’s acceptance of such appointment;	
 
 	f.	Information concerning the Lessee including; (i) adequate disclosure of its current financial condition; and (ii) as may be required to satisfy the “know your customer” and “anti-money laundering” requirements of Lessor;	
 
 	g.	No adverse change in the circumstance affecting the aviation/finance markets generally and/or Lessee in particular;	
“Effective Date” means the later to occur of the 27 th  December 2011 or the date on which Lessor notifies Lessee in writing that the Conditions Precedent have been satisfied.
 
2.	With effect from the Effective Date, Lessor hereby agrees to extend the leasing of the Engine for a Secondary Lease Period of seventy-six (76) months commencing on the Scheduled Expiry Date (being, for the avoidance of doubt, December 27, 2011). The extension of the leasing of the Engine referred to in this clause 2 is deemed to be made in accordance with the requirements of Clause 2 (Option) of the Lease.	
 
3.	Lessor and Lessee agree that with effect from the Effective Date the Lease shall be amended as follows:	
 
 	a.	Clause 1 (Lease) shall be amended as follows:	
 
 	(i)	The definition of “Rent” shall be deleted and replaced with the following:	

	 	“Rent:    	    		    	***** payable on the 27th day of each month;”	
 
 	(ii)	The definition of “Lessor’s Security” shall be deleted and replaced with the following;	

	 	“Lessor’s Security:	    		    	Lessee shall have the option to provide a Letter of Credit in compliance with Clause 9 below instead of paying cash LLP Reserves (the “LLP Reserves LC”);”	
Volaris – Extension and Amendment ESN V12285 Execution
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
2

 	(iii)	The definition of “Level 1 ESV” shall be deleted and replaced with the following:	

“Level 1 ESV:	    	An Engine Shop Visit at which the minimum workscope applied to each of the Major Modules is not equal to the Minimum eMMP Refurbishment Level for ESV2 as stated in Annex 2 but is at least equal to the Minimum eMMP Refurbishment Level for ESV1 as stated in Annex 2 and with a minimum Life Limited Part build life to be agreed between Lessor and Lessee reflecting Lessee’s expected minimum release life for Life Limited Parts following the application of such workscope provided always that no Life Limited Part shall have less than 8,000 Cycles remaining to scheduled removal.	
 
 	(iv)	The definition of “Minimum Flight Hours and Cycles remaining on Redelivery” shall be deleted and replaced with the following:	

“Minimum Flight Hours Cycles remaining on Redelivery:	    	not more than 5,000 Flight Hours since last Engine Heavy and Maintenance and not less than 2,500 Cycles remaining on any Life Limited Part until the next Engine Heavy Maintenance;	
 
 	(v)	The definition of “Secondary Lease Period” shall be deleted and replaced with the following:	

“Secondary Lease Period:	  	Seventy-six (76) months commencing on the Scheduled Expiry Date;”	
 
 	b.	A new Clause 9 shall be inserted as follows:	
 
 	“9.	LLP Reserve Letter of Credit Option	
 
 	9.1	If Lessee elects to provide the LLP Reserves LC, then on or before the Effective Time, Lessee shall procure an irrevocable stand-by letter of credit in form and substance acceptable to Lessor and issued by a bank reasonably acceptable to Lessor with a minimum long term debt rating of	
Volaris – Extension and Amendment ESN V12285 Execution
 
3

at least “A” in accordance with Standard & Poor’s rating agency criteria and confirmed by a bank acceptable to Lessor in either Dublin, Ireland or London, England and otherwise in compliance with the provisions of this Clause 9.
 
 	9.2	The LLP Reserves LC shall have a validity of 12 months from the Effective Time (or following the first issue of the Reserves LC, the anniversary of the Effective Time) and thereafter shall be renewed by the Lessee annually.	
 
 	9.3	If Lessee fails to provide a renewal LLP Reserves LC on any annual renewal date during the Lease Period or if at any time the LLP Reserves LC ceases to be valid and effective or if any Relevant Event occurs, at Lessor’s option and upon written notice to Lessee, Lessee shall promptly pay to Lessor the applicable cash amount notified by Lessor to Lessee which shall be the amount in respect of LLP Reserves owing up to the date of calculation pursuant to the terms of this Lease and thereafter Lessee shall pay LLP Reserves in accordance with Clause 4 of the GTA. Upon receipt of the cash amount as per this Clause 9.3, Lessor shall return any LLP Reserves LC to the Lessee for cancellation.	
 
 	9.4	The initial LLP Reserves LC and each annual renewal of the LLP Reserves LC shall be calculated as the aggregate of the following:-	
 
 	(a)	the actual amount of Cycles used on each Life Limited Part at the end of the calendar month prior to the Effective Date multiplied by the then current cost per Cycle (using a 7% Stub Life) of such Life Limited Part; and	
 
 	(b)	the then current LLP Reserve rate multiplied by the average annual utilization in Cycles of Lessee’s V2500 powered A320 fleet.	
 
 	9.5	Upon receipt of the original LLP Reserves LC in the amounts required as per this Clause 9, subject to the terms and conditions of this Lease, Lessor shall refund the amount of LLP Reserves currently held and shall waive Lessee’s obligation to pay LLP Reserves in cash.	
 
 	c.	Annex 2 shall be deleted and replace with Annex 2 attached hereto.	
 
4.	Lessee and Lessor shall each bear their own costs and expenses incurred in connection with this Agreement.	
 
5.	The representations, warranties and covenants of Lessee set out in Clause 9.1 of the GTA are repeated on the date hereof and on the Effective Date as if they were made in respect of this Agreement. In addition, Lessee represents that as of the date hereof that the Engine was imported into Mexico by Lessee under a temporary import permit and that this will continue to be the case for the remainder of the Lease Period (as extended hereby).	
Volaris – Extension and Amendment ESN V12285 Execution
 
4

6.	Save as varied by this Agreement, or the subsequent written agreement of the parties, all of the terms and conditions of the Lease shall continue in full force and effect throughout the Lease Period and this Agreement shall not constitute a novation of the Lease but only an extension and amendment thereof.	
 
7.	This Agreement is a Lessee Document.	
 
8.	Paragraph (a) of Clause 18.7 (Counterparts) and Clauses 18.3 (Further Assurance), 18.9 (Confidentiality), 18.12 (Notices) and 18.13 (Jurisdiction) of the GTA shall apply, mutatis mutandis, to this Agreement.	
IN WITNESS WHEREOF , this Agreement has been signed on behalf of the parties hereto the date and year first above written.
Volaris – Extension and Amendment ESN V12285 Execution
 
5

SIGNED for and on behalf of 
ENGINE LEASE FINANCE CORPORATION

By:	 	/s/ Tom Barrett	
Name:	 	Tom Barrett	
Title:	 	Executive Vice President, Chief Financial & Administrative Officer	
SIGNED for and on behalf of 
CONCESIONARIA VUELA COMPAÑÍA de AVIACIÓN, S.A.P.I. de C.V.

By:	 	/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Title:	 	Financial and Fleet Planning Director	
Volaris – Extension and Amendment ESN V12285 Execution
 
6

Annex 2
ESV Base Compensation Rate \ Hourly Reserve

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
ESV Level 1 Compensation Rate

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	  	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	  	*****	
ESV Level 2 Compensation Rate

Cycle Ratio	 	1.00-1.19	 	1.20-1.39	 	1.40-1.59	 	1.60-1.79	 	1.80-1.99	 	2.00-2.19	 	2.20-2.39	 	2.40-2.59	 	2.60-2.79	 	2.80-2.99	 	>2.99	
US$ per Flight Hour	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
Volaris – Extension and Amendment ESN V12285 Execution
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
7

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.07
ENGINE LEASE FINANCE CORPORATION
- and -
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
AIRCRAFT ENGINE LEASE GENERAL TERMS AGREEMENT
To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer of possession of any counterpart other than the original counterpart which shall be identified as the counterpart which has been marked “Original “on the signature page hereof.
CLYDE & CO
51 EASTCHEAP
LONDON
EC3M 1JP
UK

INDEX

 	  	Contents	  	Page No.	 	
			
	  	PART A: PRE-DELIVERY AND DELIVERY MATTERS	  				
			
1.	  	Interpretation, Conditions Precedent, Lease and Delivery	  	 	3	  	
2.	  	Acknowledgements, Waivers and Disclaimers	  	 	4	  	
			
	  	PART B: POST-DELIVERY AND OPERATIONAL MATTERS	  				
			
3.	  	Payments and Security	  	 	5	  	
4.	  	Maintenance Reserves	  	 	8	  	
5.	  	Maintenance and Repair	  	 	9	  	
6.	  	Engine and Parts	  	 	11	  	
7.	  	Engine Technical Records	  	 	15	  	
8.	  	Subleasing	  	 	15	  	
			
	  	PART C: LIABILITY MATTERS	  				
			
9.	  	Representations and Warranties	  	 	16	  	
10.	  	Lessor’s Title	  	 	18	  	
11.	  	General Covenants	  	 	19	  	
12.	  	Assignment, Transfer and Interest of Lender	  	 	21	  	
13.	  	Manufacturer’s Warranties	  	 	21	  	
14.	  	Insurances	  	 	22	  	
15.	  	Loss or Damage	  	 	23	  	
16.	  	Costs and Indemnities	  	 	25	  	
17.	  	Taxation	  	 	26	  	
18.	  	Miscellaneous	  	 	29	  	
			
	  	PART D: TERMINATION AND REDELIVERY	  				
			
19.	  	Term, Events of Default and Termination	  	 	34	  	
20.	  	Redelivery of Engines	  	 	38	  	
			
	  	PART E: DEFINITIONS	  	 	40	  	
			
	  	SCHEDULE 1 – Conditions Precedent	  	 	48	  	
	  	SCHEDULE 2 – Lease	  	 	50	  	
	  	SCHEDULE 3 – Insurance Requirements	  	 	59	  	
	  	SCHEDULE 4 – Redelivery Condition	  	 	61	  	

THIS AGREEMENT is made the      day of April 2006
BETWEEN:
 
(1)	ENGINE LEASE FINANCE CORPORATION , a company incorporated under the laws of the State of Nevada, U.S.A. having its principal place of business at Shannon Business Park, Shannon, Co. Clare, Ireland as lessor (“Lessor”), and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. , sociedad anónima de capital variable organised and existing under the laws of Mexico with its principal place of business at Paseo de la Reforma 505, Piso 15, Edificio Torre Mayor, Cuauhtemoc, Mexico DF, 06500 Mexico as lessee (“Lessee”).	
WHEREAS Lessor and Lessee have agreed to enter into this Agreement to set out the general terms which shall apply if Lessor from time to time leases one or more aircraft engines to Lessee AND WHEREAS it is expected that such engines will be installed on aircraft registered with the FAA, DGAC or the Irish aircraft registry and leased to the Lessee.
For the consideration hereinafter set out, IT IS HEREBY AGREED :
 
PART A	PRE-DELIVERY AND DELIVERY MATTERS	
 
1.	Interpretation, Conditions Precedent, Lease and Delivery	
 
1.1	Capitalised words used in this Agreement and each Lease have the meaning given to them in Part E and this Agreement and each Lease shall be construed as set out in Part E.	
 
1.2	If Lessor agrees to lease an engine to Lessee it may do so by requiring Lessee to execute a Lease in respect of such engine whereupon the parties shall be obliged to lease the Engine specified therein in accordance with the terms of such Lease.	
 
1.3	Subject to Lessee having fulfilled the conditions precedent set out in Schedule 1 and no Total Loss, Relevant Event or Force Majeure having occurred, the leasing of an Engine under this Agreement shall commence on the Delivery Date relating thereto and shall terminate on the Termination Date relating thereto.	
 
1.4	Each Engine shall be accepted by Lessee at the Delivery Location when tendered for delivery by Lessor in conformity with and in such condition as required herewith and with the relevant Lease and on such Delivery Date Lessee shall sign and deliver to Lessor an Acceptance Certificate in respect of such Engine.	
 
1.5	If Delivery of an Engine has not occurred by the Final Delivery Date specified therefor, the parties shall have no further obligation to lease such Engine save that Lessor shall return to Lessee any amounts thereof paid by Lessee on behalf of Lessee to Lessor in respect of such Engine provided that no Event of Default has occurred and is then continuing.	
 
3

2.	Acknowledgements, Waivers and Disclaimers	
 
2.1	LESSEE ACKNOWLEDGES AND AGREES IN RESPECT OF EACH ENGINE FOR WHICH IT EXECUTES AN ACCEPTANCE CERTIFICATE THAT, AS BETWEEN LESSOR AND LESSEE:	
 
 	(a)	THE CONDITION OF THE ENGINE ON DELIVERY SHALL BE “AS IS WHERE IS” AND ITS PRIOR INSPECTION SHALL BE THE SOLE RESPONSIBILITY OF LESSEE. DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE SHALL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT THE ENGINE CONFORMS TO ITS DESCRIPTION AS SET OUT IN THE RELEVANT LEASE FOR IDENTIFICATION PURPOSES ONLY;	
 
 	(b)	LESSOR SHALL NOT BE LIABLE FOR ANY LOSS ARISING DIRECTLY OR INDIRECTLY FROM ANY DEFECT OR MECHANICAL MALFUNCTION IN THE ENGINE OR FROM ANY DELAY IN DELIVERY OF OR FAILURE TO DELIVER THE ENGINE WHERE SUCH DELAY OR FAILURE IS ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY THIRD PARTY OR CIRCUMSTANCE OUTSIDE OF LESSOR’S DIRECT CONTROL;	
 
 	(c)	LESSOR IS NOT THE MANUFACTURER OF THE ENGINE, HAS NEVER OPERATED THE ENGINE AND NO TERM, CONDITION, WARRANTY, COLLATERAL WARRANTY, REPRESENTATION, COVENANT, UNDERTAKING OR GUARANTEE WHATSOEVER EXPRESS OR IMPLIED (HEREINAFTER “WARRANTIES”) HAVE BEEN GIVEN OR MADE BY, OR ON BEHALF OF, LESSOR IN RESPECT OF THE ENGINE;	
 
 	(d)	IN ENTERING THIS AGREEMENT AND SUCH LEASE, LESSEE HAS RELIED ON ITS OWN INDEPENDENT INSPECTION OF THE ENGINE AND ON ITS OWN ADVICE AND NOT ON ANY LESSOR’S WARRANTY IN RELATION TO THE ENGINE INCLUDING AS TO (1) ITS DESCRIPTION, CONDITION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE ENGINE OR USE THE ENGINE TECHNICAL RECORDS IN ANY JURISDICTION), VALUE, WORKMANSHIP, DESIGN, DURABILITY, SUITABILITY, OPERATION OR PERFORMANCE AND/OR (2) THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE KNOWN OR UNKNOWN APPARENT OR CONCEALED EXTERIOR OR INTERIOR AND/OR (3) THE ABSENCE OF ANY INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT AND/OR (4) ANY IMPLIED WARRANTY ARISING FROM ANY COURSE OF PERFORMANCE, ANY COURSE OF DEALING OR USAGE OF TRADE ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED;	
 
 	(e)	EXCEPT AS SET FORTH IN THE ENGINE WARRANTY AGREEMENT, NO THIRD PARTY HAS MADE TO LESSEE NOR IS AUTHORISED TO MAKE, FOR AND/OR ON BEHALF OF LESSOR, ANY WARRANTY RELATING TO THE ENGINE OR THE ENGINE’S DESCRIPTION, CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, VALUE OR USE;	
 
 	(f)	LESSOR HAS GIVEN NO WARRANTIES AS TO WHAT USE OR APPLICATION MAY BE MADE OF THE ENGINE IN THE CONDITION IN WHICH THE ENGINE IS DELIVERED NOR AS TO WHETHER THE ENGINE COMPLIES WITH, OR IS CAPABLE OF BEING MODIFIED SO AS TO COMPLY WITH, ANY PRESENT OR FUTURE ENVIRONMENTAL RESTRICTIONS OR REQUIREMENTS IMPOSED BY ANY GOVERNMENTAL ENTITY, INCLUDING NOISE ABATEMENT AND EMISSION CONTROL REQUIREMENTS AND IT IS FURTHER AGREED THAT LESSEE SHALL BE SOLELY RESPONSIBLE FOR OBTAINING	
 
4

 	WHATEVER CERTIFICATION, APPROVAL, WAIVER OR EXEMPTION IS REQUIRED FROM ANY COMPETENT AUTHORITY FOR THE USES OR APPLICATION TO WHICH LESSEE INTENDS TO EMPLOY THE ENGINE.	
 
2.2	SOLEY AS BETWEEN LESSOR AND LESSEE TO THE GREATEST EXTENT PERMISSIBLE UNDER LAW, LESSEE HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ITS RIGHTS TO THE BENEFIT OF ALL WARRANTIES SAVE FOR SUCH WARRANTIES AS LESSOR HAS ASSIGNED TO LESSEE PURSUANT TO THE ENGINE WARRANTY AGREEMENT, IN RELATION TO THE ENGINE WHETHER OR NOT REFERRED TO IN CLAUSE 2.1 ABOVE AND WHETHER GRANTED TO LESSEE BY STATUTE, CUSTOM, JUDICIAL OR LEGAL PRECEDENT OR OTHERWISE. LESSEE ALSO IRREVOCABLY AND UNCONDITIONALLY WAIVES AS AGAINST LESSOR ANY RIGHTS WHICH IT MAY HAVE IN TORT IN RESPECT OF ANY OF THE MATTERS REFERRED TO IN CLAUSE 2.1 AND IRREVOCABLY AND UNCONDITIONALLY AGREES THAT LESSOR SHALL HAVE NO GREATER LIABILITY IN TORT IN RESPECT OF ANY SUCH MATTER THAN IT WOULD HAVE IN CONTRACT AFTER TAKING ACCOUNT OF THE FOREGOING EXCLUSIONS.	
 
2.3	NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED HEREIN IS INTENDED TO OBVIATE, REMOVE OR WAIVE ANY RIGHTS OF WARRANTY OR OTHER CLAIMS RELATING THERETO WHICH LESSEE OR LESSOR MAY HAVE AGAINST THE MANUFACTURER OR SUPPLIER OF THE ENGINE OR ANY PARTY.	
 
2.4	SUBJECT TO CLAUSE 9.3, LESSOR SHALL NOT BE LIABLE TO LESSEE, ANY SUBLESSEE OR ANY OTHER PARTY, WHETHER IN CONTRACT OR IN TORT FOR ANY UNAVAILABILITY, LOSS OF USE OR SERVICE, LOSS OR DELAY IN CONNECTION WITH THE ENGINE WHATSOEVER, WHETHER ON BOARD A HOST AIRCRAFT OR ELSEWHERE EXCEPT TO THE EXTENT THAT THE SAME SHALL ARISE AS A RESULT OF THE, WILFUL MISCONDUCT OR BREACH OF THIS AGREEMENT BY LESSOR.	
 
2.5	AFTER DELIVERY, LESSOR SHALL NOT BE LIABLE FOR ANY EXPENSE IN REPAIRING OR REPLACING THE ENGINE OR TO SUPPLY ANOTHER ENGINE IN LIEU IF IT IS LOST, CONFISCATED, DAMAGED, DESTROYED OR OTHERWISE RENDERED UNFIT FOR USE.	
 
2.6	THE PARTIES HAVE DISCUSSED AND NEGOTIATED CLAUSE 2 AND FULLY UNDERSTAND THAT LESSEE’S PAYMENT OBLIGATIONS AND COVENANTS AND UNDERTAKINGS WERE CALCULATED AND AGREED HAVING SPECIFICALLY CONSIDERED CLAUSE 2.	
 
PART B	POST-DELIVERY AND OPERATIONAL MATTERS	
 
3.	Payments and Security	
 
3.1	Lessee shall pay Rent to Lessor and provide Lessor’s Security in respect of each Engine when and as specified in the Lease relating to such Engine.	
 
3.2		(a)	Regarding the Deposit specified in any Lease:-	
 
 	(i)	it shall be held by Lessor, commingled with its own funds, as security for the full, punctual performance of all of Lessee’s obligations under the Lessee Documents. Lessor may but shall not be obliged to apply	
 
5

 	the Deposit in whole or in part for the payment of any amounts owing from time to time by Lessee or to perform any of Lessee’s obligations or otherwise remedy any Event of Default. Upon any depletion of the Deposit, Lessee shall, promptly following receipt of a written notice from Lessor that all or any portion of the Deposit has been depleted, restore the Deposit to its full cash amount;	
 
 	(ii)	Lessee shall not attempt to subject the Deposit to any Encumbrance or assign any interest therein to any other party. Subject to Clause 12, the Deposit may be assigned by Lessor in whole but not in part to the Lender or any assignee or transferee of Lessor provided, however, that any such Lender, assignee or transferee shall have agreed in writing for the benefit of Lessee to hold, apply and return such Deposit solely for the purposes and as provided in this Agreement or the relevant Lease;	
 
 	(iii)	upon the occurrence of an Event of Default, the Deposit shall automatically and without further act be applied against any amount due and payable to Lessor, unless Lessor thereafter elects otherwise by notice to Lessee;	
 
 	(iv)	upon Lessor’s acceptance of but no later than 10 days following Redelivery of the Engine in conformity herewith and with the applicable Lease and the full and complete performance of all of Lessee’s accrued obligations in respect of such Engine at that time, the relevant Deposit or the remaining part thereof shall be repaid to Lessee; and	
 
 	(v)	nothing in Clause 3.2(a) shall create a relationship of trust or any duty of a fiduciary nature between Lessor and Lessee.	
 
 	(b)	Lessor’s Security shall be in a form and substance satisfactory to Lessor.	
 
3.3	All payments shall be made when due without prior demand by wire transfer in immediately available funds in Dollars to the following bank account:	

Bank:	  	*****	
		
ABA Routing:	  	*****	
		
Account Name:	  	*****	
		
Account Number:	  	*****	
 
    	or to such other bank account in the United States as Lessor may nominate from time to time. Payments which are due on a specified date shall be received not later than 1.00 p.m. (New York time) on the due date and all other payments shall be made for same day value in accordance with Lessor’s directions.	
 
3.4	If any payment falls due on a non Business Day payment shall be made on the immediately succeeding Business Day. Payments shall be considered to be made on the date on which they are received by Lessor’s bank.	
 
3.5	Lessee’s obligation to make all payments under this Agreement is absolute and unconditional irrespective of any contingency whatsoever including, but not limited to:	
 
 	(i)	any right of set-off, counterclaim, recoupment, defence or other right which either party hereto may have against the other;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
6

 	(ii)	any unavailability of an Engine for any reason whatsoever, including, any lack or invalidity of title, airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind of an Engine, or the ineligibility of an Engine for any particular use, or for registration under the laws of any relevant jurisdiction, or any partial loss of, or any damage to, an Engine;	
 
 	(iii)	any failure or delay of either party hereto, whether with or without fault on its part, in performing or complying with any of the terms of this Agreement;	
 
 	(iv)	any insolvency or, similar proceedings by or against Lessor or Lessee or any Sublessee;	
 
 	(v)	any lack of due authorisation of, or other defect in, this Agreement and/or any arrest, confiscation, seizure, impounding, forfeiture, detention, exercise or purported exercise of any possessory lien or other claim or exercising of any rights of attachment in execution of any judgment or otherwise in relation to an Engine; or	
 
 	(vi)	the occurrence of a Total Loss of an Engine after Delivery until receipt by Lessor of its Agreed Value.	
Notwithstanding the foregoing, nothing herein shall be deemed to constitute a waiver by or otherwise prohibit Lessee from bringing or pursuing any claim it may have against Lessor in connection will this Agreement or any Lease.
 
3.6	If Lessee fails to make any payment within 3 Business Days of its due date, Lessee shall pay to Lessor as supplemental rent from time to time on demand interest at the Default Rate specified in any Lease (both before and after judgment) on that amount, from the due date to the actual date of receipt in full of that amount by Lessor.	
 
3.7	During the continuance of a Relevant Event, Lessor may partly or wholly apply any money received by Lessor from Lessee or on its behalf either to Rent due at the time such payment is made or to any other sums then properly due and payable under this Agreement. Lessor may also apply payments received in respect of any one Engine against obligations owed by Lessee in respect of any other Engine.	
 
3.8	Lessor may set off any matured obligation owed by Lessor to Lessee under this Agreement against any amount accrued and payable by Lessee to Lessor, arising under this Agreement and regardless of the place of payment or currency. If the respective obligations of the parties are expressed in different currencies, Lessor may, for the purposes of effecting set-off, convert either or both currencies into Dollars or any other currency which Lessor may in its absolute discretion determine at the prevailing rate of exchange available in the New York market at the time of conversion. Lessor shall not be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due to Lessor by Lessee under any agreement between them remain unpaid and any such amounts which would otherwise be due will fall due, only if and when Lessee has paid all such sums except to the extent that Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing.	
 
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3.9	If Lessee fails to make any payment to any other party in connection with any Engine, Lessor may but shall not be obliged to do so make any such payment to any such party. Lessee shall reimburse Lessor any such amount paid by Lessor to any such party together with interest thereon at the Default Rate within five Business Days of demand.	
 
4.	Maintenance Reserves	
 
    	Except as otherwise set forth in or modified in respect of any Engine, by any Lease, Lessee shall pay Maintenance Reserves as follows:-	
 
4.1	Within 10 days after the end of each calendar month during the Lease Period and on the Termination Date, Lessee shall pay to Lessor the current Hourly Reserve for each Flight Hour and the current LLP Reserve for each Flight Hour or Cycle (whichever may be applicable) operated by the Engine as recorded in the Utilisation Report.	
 
4.2	The Hourly Reserve shall be varied in favour of Lessor or Lessee (as applicable) as follows:-	
 
 	(a)	each year on the anniversary of Delivery the Hourly Reserve shall be increased by *****	
 
 	(b)	at any time if the ongoing ratio of Flight Hours to Cycles as provided for in the Lease is changed or if any material change is made to the Maintenance Programme, Operating Procedures, or if there is in the reasonable opinion of Lessor any material change in Lessee’s standards of maintenance, by an amount to be determined by Lessor and Lessee, both acting reasonably.	
 
 	(c)	if the Engine is operated at a thrust rating other than as provided for in the Lease, by an amount to be determined by Lessor and Lessee, both acting reasonably.	
 
4.3	The LLP Reserve shall be varied in favour of Lessor or Lessee (as applicable) as follows:-	
 
 	(a)	each year on the anniversary of Delivery the LLP Reserve shall be adjusted by the percentage change during the 12 months prior to the said anniversary in the price of Life Limited Parts as calculated by reference to the prices published by the Manufacturer;	
 
 	(b)	any time the Manufacturer reduces or increases the certified life limit of any installed Life Limited Part; or	
 
 	(c)	any time the Engine is operated at a thrust rating other than as provided for in the Lease and such operation requires the certified life limit of any installed Life Limited Part to be reduced or increased.	
 
4.4	Lessor shall pay to Lessee, within 15 Business Days after each claim made by Lessee, subject to such claim being supported by an invoice in reasonable detail certified by the applicable service provider, such amounts as are equal to the costs of completed Engine Heavy Maintenance shop visits. Lessor shall process a maximum of two claims only from the Hourly Reserves and LLP Reserves attributable to the Engine in respect of each Engine Heavy Maintenance shop visit during the Lease Period. Payment shall be made to Lessee or direct to the Authorised Repairer upon receipt of a request from Lessee PROVIDED:-	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(a)	for each Engine Heavy Maintenance the amount that can be claimed from the Hourly Reserves shall be limited to the EHM Claim Cap stated in the Lease;	
 
 	(b)	payment shall be made from the LLP Reserve in respect of replacement (but not service, modification or repair) of Life Limited Parts (excluding handling charges) up to but not exceeding the amount of LLP Reserves paid by Lessee to Lessor less any amounts previously paid to Lessee in respect of replacement of Life Limited Parts provided further that payment in respect of replacement of each Life Limited Part shall be limited to an amount equal to the cost of replacement of such Life Limited Part multiplied by a percentage amount, which percentage amount shall be calculated in each case as follows:	
 
 	    	*****	
 
 	    	*****	
 	(c)	no payment shall be made from the Hourly Reserves for the replacement of Life Limited Parts;	
 
 	(d)	the total amounts payable at any time by Lessor to Lessee pursuant to this Clause 4.4 shall not in any event exceed the balance of any funds paid by Lessee to Lessor pursuant to Clause 4.1 at the time of the Engine Heavy Maintenance shop visit for which the claim is made less any repair or overhaul expenditure which Lessor has, in accordance with the terms of this Agreement, incurred;	
 
 	(e)	if, on any occasion, the maximum amount available to Lessee pursuant to this Clause 4.4 in respect of the Engine is insufficient to meet a claim for payment, the shortfall may not be carried forward or made the subject of any further claim for payment;	
 
 	(f)	Lessee shall not be entitled to make any claim under this Clause 4.4 during the continuance of any Event of Default; and	
 
 	(g)	any amounts paid to Lessor pursuant to Clause 4.1 which have not been claimed by Lessee under this Clause 4.4 on or before the thirtieth day after the Termination Date shall be retained by, and accrue for the benefit of, Lessor.	
 
4.5	Repayment Upon Total Loss	
Following the occurrence of an Event of Loss and upon receipt by Lessor of the Agreed Value in respect of the relevant Engine and all other amounts then due and payable by Lessee to Lessor, Lessor shall return to Lessee all amounts then held by Lessor as Hourly Reserves and LLP Reserves in respect of such Engine.
 
5.	Lessee’s Covenants in Respect of Maintenance and Repair	
Lessee covenants that, throughout each Lease Period, it shall:
 
 	(a)	carry out scheduled maintenance, condition monitored maintenance and on-condition maintenance including preventive maintenance tests, system checks and all necessary related work, store, preserve, transport, service,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	repair and overhaul, alter, modify or make additions to the Engine so as to keep it in a serviceable state of repair and in a fully operational and airworthy condition compliant with all laws or regulatory requirements and the Maintenance Programme, Engine and Host Aircraft maintenance manuals and in accordance with the terms of this Agreement;	
 
 	(b)	perform all checks and other special inspections and modifications required by the Manufacturer and the Aviation Authority including, requirements contained in any Airworthiness Directives issued during the Lease Period which require terminating action within 6 months after the end of such Lease Period. Save as is otherwise agreed by Lessor, where modification or alteration is required by such Airworthiness Directives it shall be implemented by Lessee within the specified time limit as specified in the Airworthiness Directive;	
 
 	(c)	substitute, replace and renew all Parts which reach their limiting number of Cycles or Flight Hours or are lost, damaged beyond repair or otherwise become unfit for use with replacement parts having no less Cycles or Flight Hours remaining to their next expected overhaul or removal than is required to comply with the Redelivery Condition and are of the same make, Part number and the same or an improved model and are of the latest applicable modification standard and are approved by the Manufacturer for use in the Engine, the installation of which will have no adverse affect on the value or airworthiness of the Engine. No serviceable Part shall be replaced unless the replacement part has at least the same number of Cycles or Flight Hours remaining to the next expected overhaul or removal as the Part which it is replacing and is of the same make, Part number and the same or an improved model and is the latest applicable modification standard and is approved by the Manufacturer for use in the Engine;	
 
 	(d)	procure that, all repairs performed on any Part or on any replacement part to be installed in or on the Engine shall be approved by the Manufacturer for use in the Engine;	
 
 	(e)	procure that, all relevant certificates of maintenance and release to service shall be obtained or issued when required by the Aviation Authority;	
 
 	(f)	procure that upon completion of each Engine Shop Visit an FAA Form 337 and FAA 8130-3 or EASA Form 1 together with a detailed shop visit report are issued and certified by a duly authorised FAA or EASA certified inspector and retained with the Engine Technical Records;	
 
 	(g)	procure that, save as provided in this Agreement, the Engine shall at all times be maintained in such manner as will at all times qualify it (and not disqualify any potential Host Aircraft) to obtain an FAA Form 8130-3 (or equivalent) and will enable Lessor on the Termination Date to obtain possession in such a condition that it is immediately operable and useable on an aircraft registered with the FAA as a commercial category aircraft and the Engine shall be maintained and repaired in accordance with FAA Federal Aviation Regulations Parts 129 and 145 (as same are amended and/or supplemented from time to time and similar regulations of the EASA while on a Host Aircraft registered in Ireland) and such other FAA regulations applicable to engines of the same make and model as the Engine installed on commercial airline aircraft except to the extent necessary to avoid violation of the regulations of the Aviation Authority (any such deviation and/or discrepancy to be notified forthwith by Lessee to Lessor and agreed in writing by Lessor such agreement not to be unreasonably withheld);	
 
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 	(h)	procure that after due consultation with Lessor on any proposed workscope Lessee shall provide Lessor with a copy of any proposed final workscope to be performed in respect of the Engine promptly after establishment of such workscope but in any event prior to Engine reassembly;	
 
 	(i)	procure that Lessee shall not discriminate against the Engine with regard to operation and maintenance compared with any other engines of like make and model in its fleet in any way save as may be expressly required by the terms of this Agreement;	
 
 	(j)	transport the Engine in accordance with the Manufacturer’s guidelines/recommended procedures including but not limited to road transportation without other cargo on a full air ride (cab and trailer) vehicle;	
 
 	(k)	if the Engine is of ETOPS standard when delivered, maintain it to such standard at all times; and	
 
 	(l)	permit Lessor to have performed additional work and/or modification on the Engine during any Engine Shop Visit at Lessor’s cost provided this does not impact adversely on the Engine turnaround time.	
 
6.	Lessee’s Covenants in Respect of Engine and Parts	
 
6.1	Lessee covenants that, throughout each Lease Period, it shall ensure that the Engine:	
 
 	(a)	is operated, used and controlled in accordance with the Operating Procedures when installed on any aircraft with qualified, authorised and duly licensed pilots and engineers and when not installed on an aircraft with such engineers, and in accordance with all applicable requirements of the Aviation Authority, any other regulatory authority in Lessee’s Country and anywhere the Engine may from time to time be or be operated and in accordance with the Insurances;	
 
 	(b)	except where the Engine is the possession of a Sublessee, undergoing an Engine Shop Visit in accordance with the provisions of this Agreement or otherwise with the prior consent of Lessor, the Engine shall be based in and operated from Lessee’s Country and that the Engine shall not be located outside of Lessee’s Country for a period of more than 15 consecutive days without Lessor’s prior consent or pursuant to any other provision of this Agreement;	
 
 	(c)	shall at all times when not installed on a Host Aircraft or undergoing an Engine Shop Visit be stored and preserved at Lessee’s facilities in Mexico and made available at Lessee’s cost for an annual inspection by Lessor;	
 
 	(d)	subject to Clause 6.3, has no Part installed in or on the Engine or is at any time removed therefrom otherwise than as required by Clause 5(a), and then only if such Part is promptly reinstalled or replaced or substituted by a Part;	
 
 	(e)	except in accordance with Clause 6.3, has no Part installed, whether by way of substitution, replacement, renewal, mandatory improvement or addition	
 
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 	unless it is at such time owned by Lessor, or is such that upon installation, title thereto shall vest in Lessor without further formality save for prompt recording in the Engine Technical Records and become subject to this Agreement, free from Encumbrances (other than Permitted Liens). Any Part removed from the Engine shall remain property of Lessor until such time as a compliant replacement Part shall have been installed and until title thereto shall have passed to Lessor in accordance with the Governing Law and the lex situs, or the replacement part is itself replaced by another replacement part, unencumbered title to which passes to Lessor; and	
 
 	(f)	is not modified changed or altered in any way which will reduce its value, marketability, remaining useful life or utility or impair its condition or airworthiness except as is necessitated by this Agreement, or required by the Manufacturer, or the Aviation Authority.	
 
6.2	Lessee undertakes that, throughout each Lease Period, it shall:	
 
 	(a)	provide Lessor with all information reasonably requested by Lessor regarding the location, operation, use, maintenance and condition of each Engine, including:	
 
 	(i)	copies of any agreements in any way affecting title to the Engine and its maintenance;	
 
 	(ii)	reasonable notice of all Engine or Host Aircraft heavy maintenance tasks to be undertaken so as to afford Lessor reasonable opportunity to plan to be present during such maintenance if Lessor so desires;	
 
 	(iii)	following the installation or removal of the Engine on or from a Host Aircraft, full details of the registration number, position, operator, owner and all Interested Third Parties;	
 
 	(iv)	any Engine performance parameter limit exceedance and the action or proposed action taken or to be taken by Lessee to remedy same to include the expected date of release to service;	
 
 	(v)	any requirement, recommendation, Airworthiness Directive or mandatory service bulletin made by the Manufacturer or the Aviation Authority or by any competent authority which is not complied with or terminated within the required period;	
 
 	(vi)	any notice given by any competent authority non-compliance with which would adversely affect the Engine or Lessee’s ability to operate the Engine or any Host Aircraft or Lessor’s interest therein;	
 
 	(vii)	whenever it is to be based at a location other than that specified in Clause 6.1 (c) for a period in excess of 15 consecutive days and	
 
 	(viii)	following any Engine Shop Visit provide Lessor with a copy of the certification and shop visit report and if requested by Lessor a copy of all dirty fingerprint records and task cards relating to such Engine Shop Visit.	
 
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 	(b)	within 10 days after the end of each calendar month provide Lessor with the Utilisation Report defined in the Lease for each Engine in respect of such calendar month;	
 
 	(c)	permit Lessor all necessary facilities to inspect and/or survey each Engine at all reasonable times wherever the Engine shall be located including without limitation at any time when the Engine is being repaired, maintained or overhauled to ascertain the value of the Engine and/or the condition of the Engine to ensure that Lessee is complying with Clauses 5, 6 and 7 and shall permit Lessor to make copies of the Engine Technical Records at Lessor’s cost. Provided no Relevant Event has occurred and is continuing, the cost of such inspections and surveys shall be paid by Lessor. All repairs or replacements or maintenance or improved record keeping as shall be shown by the inspection or survey to be required shall be made by Lessee within one month from the date of notification by Lessor. All time taken in respect of inspection, survey or repairs shall form part of the Lease Period. Lessor shall have no duty or liability whatsoever to carry out or take any action arising out of any visit, inspection or survey. So long as a Relevant Event has not occurred and is continuing, Lessor shall not exercise such right other than on reasonable notice and so as not to disrupt unreasonably, Lessee’s commercial operations and no more frequently than twice a year. For the purpose of carrying out such inspections and surveys, Lessee agrees to make available to Lessor air transportation on aircraft operated by Lessee on a seat available basis;	
 
 	(d)	procure that no Indemnitee is at any time represented as carrying goods or passengers on any Host Aircraft, or as being in any way connected or associated with any operation of carriage which may be undertaken by Lessee, or as having any operational interest in, or operational responsibility for, the Engine and/or any Host Aircraft;	
 
 	(e)	authorise in writing the Aviation Authority and any other relevant air traffic control or airport authority to furnish to Lessor on request from time to time, statements of account of all sums due by Lessee or any Sublessee to such authorities in respect of all aircraft operated by Lessee or any Sublessee;	
 
 	(f)	so far as it is able to do so without breaching its obligations under this Agreement, comply in all material respects with all obligations contained in any other agreement with any Interested Third Party relating to the Engine or any engine which is installed on any Host Aircraft or is to be removed to enable the installation of the Engine in such engine’s place;	
 
 	(g)	use all reasonable efforts to prevent the occurrence of any act which could reasonably be expected to result in a Host Aircraft or, the Engine being arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from Lessee’s possession (herein a “seizure”) and, if any such seizure occurs, Lessee will give Lessor immediate written notice thereof and procure the prompt release and/or return of the Host Aircraft and/or the Engine by discharging any debt (other than debt arising as a result of or in connection with a Lessor Lien) and/or providing bail, or other required security and Lessee shall comply fully with the terms imposed by any creditor and/or governmental or other authority regarding the release or return of any Host Aircraft and/or the Engine;	
 
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 	(h)	not pledge the credit of any Indemnitee for any maintenance, service, repairs, overhauls of, or modifications to, or changes or alterations, the Engine or for any other purpose whatsoever;	
 
 	(i)	do nothing which might reasonably be expected to jeopardise Lessor’s title, rights and interests in the Engines;	
 
 	(j)	do all that Lessor may reasonably request to secure such protections as may be afforded by the Geneva Convention in any jurisdiction which may ratify it and in which the parties may operate or into which the Engines may come;	
 
 	(k)	ensure that excepting standard revisions introduced by the Manufacturer or as required by the Aviation Authority, Lessor’s prior consent (which consent shall not be unreasonably withheld or delayed) is obtained before amending and/or revising the Maintenance Programme or introducing other amendments or revisions to which the Manufacturer has no technical objection to make such revisions available for review by Lessor;	
 
 	(l)	ensure that the Engine shall in no event be located, operated, or used, directly or indirectly, in a Prohibited Jurisdiction or by a Prohibited Person in any manner that would breach or render Lessor or any Indemnitee liable to civil or criminal sanction or the Engine liable to seizure pursuant to any Prohibition.	
 
6.3	Provided no Relevant Event shall have occurred and be continuing, Lessee may install a part on the Engine by way of substitution or replacement for any Part notwithstanding that such installation is not in accordance with Clause 6.1 (d) and (e) if:	
 
 	(a)	a Part shall not have been available to Lessee at the time and in the place that it was required, and	
 
 	(b)	it would have resulted in an unreasonable disruption of the operation of the Engine and/or Lessee’s business to have grounded the Host Aircraft until such time as a compliant part became available, and	
 
 	(c)	as soon as practicable after installation of such part, Lessee ensures that any such non-compliant part is removed and replaced or substituted by a Part, and	
 
 	(d)	Lessee notifies Lessor if the requirements of Clause 6.1(d) and (e) are not satisfied for any period exceeding 30 days.	
 
6.4	Unless expressly provided in any Lease, Lessee shall not permit any pooling agreement or arrangement with any third party in respect of the Engine or any Part without the prior written consent of Lessor (which consent shall not be unreasonably withheld or delayed).	
 
6.5	Title Exchange	
To the extent that the laws of Lessee’s Country or any jurisdiction into which the Engine may come may deem that title to the Engine transfers to the owner or mortgagee of any Host Aircraft, Lessee shall ensure that pending a retransfer of title, there shall be simultaneously vested in Lessor title to an engine of equal value and condition, that Lessor’s interest in such replacement engine shall be noted on the Insurances in like manner as the Engine and the efficacy of such arrangement shall be confirmed by opinion of legal counsel furnished by Lessee.
 
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7.	Engine Technical Records	
Lessee covenants that, throughout each Lease Period, it shall procure that:
 
 	(a)	accurate, complete and current records of all flights made by the Engine and of all maintenance and repairs carried out thereon are kept in conformity with the regulations from time to time in force of the Aviation Authority and/or the FAA , the requirements of the Maintenance Programme and with the normal practices of major international public air transport operators similarly situated;	
 
 	(b)	a duplicate copy of the above records shall be separately stored in a fire and flood-proof safe on computer disk and/or in paper format;	
 
 	(c)	full traceable records (which shall include initial Manufacturer release certificates) since new relating to each Life Limited Part and Hard Life Part are retained and stored with the Engine Technical Records; and	
 
 	(d)	operation and maintenance manuals and all other records, logs and documents which are required by the Aviation Authority to be maintained are maintained to the latest applicable standard;	
 
 	(e)	all of the Engine Technical Records are kept with the Engine to which they relate and in Lessee’s or Authorised Repairer’s possession and in no other party’s possession, except as required by applicable law (but only to such extent) or with Lessor’s prior consent.	
 
8.	Subleasing	
 
8.1	Except as provided in Clause 8.3 below, Lessee will not, at any time, without Lessor’s prior written consent, (which shall not be unreasonably withheld if the conditions set out in Clause 8.2 are fully complied with) sublease, hire or otherwise part with the possession or operational control of any Engine other than for the purposes of Clause 5.	
 
8.2	The following conditions must be undertaken before Lessor will consider consenting to the subleasing of an Engine to any Sublessee and fulfilled no later than the commencement date of the relevant Sublease:-	
 
 	(a)	Lessee must remain primarily liable for all of its obligations under this Agreement;	
 
 	(b)	the Sublease shall be subject and subordinate to all of the provisions of this Agreement and Sublessee shall acknowledge the same in writing;	
 
 	(c)	Sublessee must have no greater rights than Lessee and the Sublessee must be obliged to discharge all of Lessee’s obligations hereunder;	
 
 	(d)	the Sublease term must not extend beyond the Lease Period;	
 
 	(e)	Sublessee shall be expressly prohibited from further subleasing the Engine;	
 
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 	(f)	the Engine must at all times remain subject to the Insurance;	
 
 	(g)	the use, operation or location of the Engine in the country in which Sublessee’s principal place of business is located, must not violate the Insurances or the applicable laws of such country;	
 
 	(h)	Lessee undertakes to use all commercially reasonable efforts to procure that each party who may become an Interested Third Party following the commencement of the proposed Sublease enters into a Cooperation Agreement;	
 
 	(i)	The Sublease shall contain a provision substantially similar to Clause 10.3 if the Sublessee is an entity organised in the United States or a state or subdivision thereof; and	
 
 	(j)	Lessee will provide Lessor with the name, address and jurisdiction of organisation of Sublessee and the location of each subleased Engine, which address, jurisdiction and location will in no event be in a Prohibited Jurisdiction and which Sublessee shall in no event be a Prohibited Person.	
 
8.3	If Sublessee is an entity organised in the United States or any state or subdivision thereof, the Engine shall not be delivered to such Sublessee until Lessor receives a copy of the Sublease duly executed. In the case of a Sublessee organised in the United States, the Sublease and this Agreement shall, upon or prior to delivery of the relevant Engine to Sublessee, be filed for recording with the FAA and all required financing statements shall have been filed and Lessor shall have received a legal opinion in a form and from FAA counsel satisfactory to Lessor to such effect.	
 
8.4	Provided that no Relevant Event shall have occurred and be continuing and notwithstanding anything to the contrary set forth herein or in any Lease, Lessee shall be entitled to sublease the Engine, at any time and from time to time, to TACA International Airlines, S.A. or to an Affiliate provided however that any such sublease shall be subject and subordinate to this Agreement and the relevant Lease.	
 
PART C	LIABILITY AND MISCELLANEOUS MATTERS	
 
9.	Representations and Warranties	
 
9.1	Lessee acknowledges that Lessor has entered into the Lessee Documents and may enter into Leases in full reliance on the following representations and warranties made by Lessee, now and on each Delivery Date and payment date (other than sub-paragraphs (d) and (g) below):	
 
 	(a)	Lessee is a corporation duly incorporated, validly existing and in good standing in the state of its incorporation;	
 
 	(b)	Lessee has the corporate authority to enter into this Agreement and has duly authorised and delivered this Agreement and the Lease;	
 
 	(c)	Lessee’s execution, delivery and performance of this Agreement and the Lease do not violate any applicable law;	
 
 	(d)	no litigation, arbitration or administrative proceedings are pending or to its knowledge threatened against Lessee, which, if adversely determined, would have a material adverse effect upon its ability to perform its obligations under the Lessee Documents or any Leases;	
 
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 	(e)	no written information provided by Lessee to Lessor in connection with this Agreement, any Engine, the Insurances, and Lessee’s ability to comply with its obligations hereunder, contains any untrue or misleading statement or omits to state any material fact and all expressions of expectation, intention, belief and opinion are made in good faith, on reasonable grounds after due enquiry by Lessee;	
 
 	(f)	any operator of the Engine shall be an air carrier currently operating under a valid air operator’s certificate issued by the relevant governmental authority of Lessee’s Country;	
 
 	(g)	there is no material adverse change in Lessee’s financial position from that represented by the most recent financial information provided by Lessee to Lessor;	
 
 	(h)	every consent, authorisation, licence, approval of, registration with, or declaration to relevant authorities or courts required by Lessee to authorise, or required by Lessee in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Lessee Documents or the performance by Lessee of its obligations thereunder, has been obtained or made and is in full force and effect and there has been no material default in the observance of the conditions or restrictions (if any) imposed in same that has not been corrected;	
 
 	(i)	no Relevant Event has occurred and is continuing;	
 
 	(j)	Lessee is not (nor would be with the giving of notice or lapse of time or both) in material breach of or in default under any material agreement to which it is a party which breach has had or threatens to have a material adverse affect on Lessee’s ability to perform its obligations under the Lessee Documents or any of them; and	
 
 	(k)	the leases, conditional sale agreement, instalment sale agreement, mortgage or other security document with respect to the Host Aircraft contain provisions which contemplate the arrangements contemplated by the definition of Cooperation Agreement and Lessor will be able to rely on such provisions notwithstanding it is not a party to such documents or Lessee will cause any lessor, mortgagee, conditional seller or instalment seller of a Host Aircraft to enter into an agreement substantially in the form of the Cooperation Agreement for the benefit of Lessor prior to the installation of an Engine on such Host Aircraft.	
 
9.2	Lessor’s rights and remedies in relation to any misrepresentation or breach of warranty by Lessee shall not be prejudiced by any investigation by Lessor into Lessee’s affairs, by the performance of the Lessee Documents or by anything which may be done or omitted to be done by Lessor under Lessee Documents and which would or might, but for this Clause 9.2, prejudice such rights and remedies.	
 
9.3	Lessor represents, warrants and undertakes that:	
 
 	(a)	subject to the terms of the Lessee Documents and no Relevant Event or Event of Default having occurred and being continuing, Lessor will not	
 
17

 	interfere with nor permit any person or entity lawfully claiming by or through Lessor to interfere with Lessee’s quiet use, possession and enjoyment of the Engine during the Lease Period;	
 
 	(b)	at the time of Delivery of any Engine, Lessor will have and thereafter Lessor or a permitted transferee of Lessor shall have unfettered power to lease such Engine to Lessee pursuant to the terms of this Agreement and otherwise to perform its obligations hereunder and under and in respect of any Lease; and	
 
 	(c)	for avoidance of doubt, it shall not utilize nor permit any other person or entity lawfully claiming by or through Lessor to utilize the Deregistration Power, for any purpose whatsoever, until there shall have occurred an Event of Default hereunder and unless such Event of Default is continuing.	
 
10.	Lessor’s Title	
 
10.1	Each Lease shall constitute an agreement to lease and nothing herein or therein shall be construed as conveying to Lessee (nor shall Lessee claim) any right, title or interest in any Engine except as a lessee only. Unless otherwise expressly provided in a Lease, all Engines shall remain the sole property of Lessor.	
 
10.2	Lessee shall take all such steps as may be necessary to safeguard and protect Lessor’s title and rights in and to the Engine and any Encumbrance relating to the Engine granted or given by Lessor from time to time and in particular Lessee shall:-	
 
 	(a)	attach to the Engine and its stand within ten Business Days of its Delivery and keep so attached during the Lease Period, a fireproof plate (having dimensions of not less than 3 inches by 4 inches) reading as follows (or as Lessor may otherwise direct in writing):-	
“NOTICE OF OWNERSHIP
This [Engine/Engine Stand] is the property of ENGINE LEASE FINANCE CORPORATION and is subject to a first priority mortgage in favour of [INSERT NAME OF LENDER];”
 
 	(b)	not remove or cover up any such plate and or place any other notice (affecting the ownership of the Engine or otherwise relating to Lessor’s rights and dealing with the rights of any party other than Lessor) in, or on, the Engine without Lessor’s prior consent;	
 
 	(c)	whenever relevant, inform third parties that the Engine is Lessor’s property and (if it is the case) is subject to an Encumbrance created by Lessor and that Lessee has no power to sell, charge, lease, swap or otherwise part with possession of, dispose of or create an Encumbrance over or affecting the Engine save for any Permitted Lien;	
 
 	(d)	procure that all Interested Third Parties or an agent or representative thereof execute and deliver to Lessor the Cooperation Agreement or an alternative acknowledgement of Lessor’s interests or waiver of interest in the Engine in terms acceptable to Lessor acting reasonably prior to the installation of the Engine on a Host Aircraft and Lessee shall not install or permit the installation of the Engine on any Host Aircraft until the Cooperation Agreement or such acceptable alternative acknowledgement or waiver has been executed and delivered to Lessor by or on behalf of all Interested Third Parties;	
 
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 	(e)	use all commercially reasonable efforts to procure that all agreements to be entered into from time to time between Lessee and any Interested Third Party contain a provision obliging any Interested Third Party to enter into and deliver to Lessor the Cooperation Agreement or acceptable alternative acknowledgement prior to the Engine being installed on any Host Aircraft;	
 
 	(f)	take all such other steps as Lessor may reasonably require from time to time in order to ensure that Lessor’s title and rights are protected and safeguarded to the greatest extent possible; and	
 
 	(g)	promptly pay and discharge all Losses that may from time to time give rise to or create, any liens on, or claims enforceable against, the Engine (save for debts owing in respect of any Permitted Lien which in any event shall be discharged by Lessee in a timely manner and in compliance with any applicable credit terms relating thereto) save in respect of Losses which are being contested in good faith, by appropriate proceedings and for the payment of which adequate reserves have been provided (so long as the same do not involve any material likelihood of the detention, seizure, forfeiture, sale or loss of or of any interest in, the Engine).	
 
10.3	To the extent that the Engine may be affected by the United States Bankruptcy Code, Lessee hereby agrees in accordance with Section 1110 thereof, or any superseding section, that Lessee shall not contest any attempt by Lessor to repossess the relevant Engine(s) pursuant to and in accordance with the provisions of Section 1110 or other analogous part of any superseding statute.	
 
11.	General Covenants	
 
11.1	Lessee undertakes with Lessor that, until Redelivery of all Engines to Lessor in the Redelivery Condition and thereafter until satisfaction of all Lessee’s accrued and outstanding obligations hereunder, it shall:	
 
 	(a)	inform Lessor of any occurrence (including an Event of Default) of which Lessee becomes aware which might reasonably be likely to materially and adversely affect Lessee’s ability to perform its obligations under this Agreement;	
 
 	(b)	obtain, maintain in full force and effect and comply in full with the conditions and restrictions of every consent, authorisation, license or approval of any regulatory authority and do all which may be necessary for the (i) continued due performance of all of Lessee’s obligations under this Agreement, and/or (ii) operation of the Engine and the registration, licensing and operation of any Host Aircraft operated by Lessee and the carrying out of Lessee’s obligations hereunder authorising Lessee to operate aircraft of the same type as any Host Aircraft. Lessee will comply with all requirements relating to the Engine or the operation or airworthiness thereof of the Aviation Authority or by any country to whose jurisdiction the Engine may become subject;	
 
 	(c)	prepare audited financial statements in respect of each financial year in accordance with generally accepted accounting principles in Lessee’s Country or International Accounting Standards or US GAAP which have been consistently applied (save as disclosed in the relevant financial statements) and prepare unaudited financial statements in respect of each quarter on the same basis as the annual financial statements;	
 
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 	(d)	subject to Clause 11.2, deliver to Lessor a copy of the audited and unaudited financial and profit and loss statements referred to in Clause 11(c) as soon as practicable but not later than 120 days (in the case of annual audited financial statements) and 60 days (in the case of quarterly unaudited financial statements) at the end of the financial period to which they relate and a copy of every report, notice or like document issued by it to its creditors generally (in each case at the time of such issue ) and provide Lessor with such additional financial information concerning Lessee as Lessor may from time to time reasonably require;	
 
 	(e)	preserve and maintain Lessee’s corporate existence, and all of its material rights, privileges and franchises in every jurisdiction which the character of the property owned or the nature of the business transacted by Lessee may so require and as may be necessary to meet its obligations under this Agreement;	
 
 	(f)	subject only to Lessee’s right to contest any such Taxes in good faith by appropriate proceedings, so long as adequate reserves have been provided , pay all Taxes prior to the date on which penalties may attach thereto and all lawful claims, which, if not paid, might result in a lien or charge upon the Engine;	
 
 	(g)	notify Lessor of any proceedings before any governmental agency or any litigation which might reasonably be expected to materially adversely affect Lessee’s ability to perform its obligations hereunder or under any Lease;	
 
 	(h)	notify Lessor of any indebtedness of Lessee in excess of ***** which is not paid when due after giving effect to any applicable grace period and in respect of which the applicable creditor has accelerated such debt and commenced proceedings to enforce the same unless Lessee shall be contesting in good faith the amount or enforceability of the same; and	
 
 	(i)	not merge or consolidate with or into any other entity or sell, lease or otherwise dispose of all or substantially all of its assets and/or properties without Lessor’s prior consent provided that:	
 
 	(1)	Lessee may merge or consolidate with another entity if:	
 
 	(A)	Lessee is the surviving entity or if Lessee is not the surviving entity, the surviving entity shall have agreed in writing, in form and substance reasonably acceptable to Lessor, to assume and perform all obligations of Lessee under the Lessee Documents; and	
 
 	(B)	immediately after giving effect to such merger or consolidation, Lessee’s or the relevant surviving entity’s (as the case may be) net worth is at least equal to Lessee’s net worth immediately prior to such merger or consolidation;	
 
 	(2)	Lessee may reorganise pursuant to a solvent reorganisation to which Lessor shall have consented (such consent to be unreasonably withheld or delayed by Lessor); or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(3)	Lessee may undergo an initial public offering and such further public offerings of Lessee’s shares as it may deem appropriate (subject to applicable laws) provided that immediately after giving effect to such initial or further public offerings (as the case may be), the net worth of Lessee shall be at least equal to Lessee’s net worth immediately prior to such initial or further public offerings (as the case may be).	
 
11.2	If Lessee shall become a publicly traded company and it files periodic financial statements on the website of any Mexican or United States of America supervisory or regulatory authority or, pursuant to applicable laws, on Lessee’s website, the publication of such information on the relevant website shall constitute due performance of Lessee’s corresponding obligation to provide such financial statements to Lessor pursuant to Clause 11.1(d) provided such information is readily accessible and available to Lessor.	
 
12.	Assignment, Transfer and Interest of Lender	
 
12.1	Except as otherwise permitted herein, Lessee may not assign, novate, charge, or otherwise transfer any of its rights or obligations under any lease and/or with respect to any Engine without the prior written consent of Lessor.	
 
12.2	Lessor may, at any time and from time to time, sell, assign, transfer or otherwise dispose of any and all of its rights, title and/or interests in, under and/or to any lease or with respect to any Engine to any party other than an air carrier or affiliated entity thereof competing with Lessee or its affiliates on any of their respective routes or create any Encumbrance in favour of any Lender PROVIDED that Lessee’s rights shall not be diminished thereby or its obligations increased and further provided that any assignee or other transferee of Lessor shall have agreed in writing to be bound by and, other than in respect of a collateral assignment for security purposes, perform all obligations of Lessor under the GTA and the applicable Lease including without limitation Lessor’s obligation in respect of Lessee’s rights of quiet enjoyment.	
 
12.3	Subject to compliance with Clause 12.2 above, Lessee shall execute and deliver all such documents as Lessor, Lessor’s assignee, transferee or Lender may reasonably require in connection with any assignment, sale, transfer or charge by Lessor of any or all of its rights and/or interest in and to this Agreement and/or any Engine and/or to confirm Lessee’s obligations under this Agreement.	
 
12.4	All obligations and liabilities contained in any lease shall accrue for the benefit of Lessor’s permitted assignee, permitted transferee or Lender and their respective permitted successors and assigns and the term “Lessor” shall be deemed to include such permitted assignees and transferees wherever applicable.	
 
13.	Manufacturers’ Warranties	
Lessor, to the extent to which it may do so effectively without any third party consents, hereby assigns to Lessee for the duration of any Lease Period the benefit of all assignable warranties and indemnities given by any Manufacturer, supplier or repairer of the Engine which have been assigned to Lessor or to the benefit of which Lessor is otherwise entitled. At the expiry of such Lease Period, Lessee shall, at its own expense take all such action or execute any such documents as may be reasonably necessary to, reassign to Lessor or its nominee the benefit of any such assigned warranty or indemnity together with all warranties and indemnities given to Lessee during the Lease Period in respect of the Engine. Lessee undertakes to give
 
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such notices as may be necessary to complete such assignments using its reasonable endeavours to obtain any third party consents. If any warranties and indemnities shall not be assignable or if consent to assignment shall be refused, then either party shall take such action as the other may reasonably request to enforce any such warranties or indemnities and this obligation shall survive the termination of this Agreement and of each relevant Lease Period.
 
14.	Insurances	
 
14.1	As and from Delivery of each Engine and throughout the Lease Period relating thereto Lessee shall maintain the Insurances. Lessor’s current requirements in relation to the Insurances are set out in Schedule 3, but Lessor reserves the right to vary its requirements from time to time if there shall have been an adverse change in the aviation insurance market in order to respond to or reflect such change.	
 
14.2	Lessee shall ensure that it and the Insurances shall comply with all applicable laws and Lessee shall promptly notify Lessor of any variation in the Insurances and if any applicable law or regulation requires additional insurance to be maintained, Lessee shall immediately effect same in a manner completely satisfactory to Lessor.	
 
14.3	If the Insurances are not kept in full force and effect and in accordance with the provisions of this Agreement, Lessor shall be entitled (but not bound):	
 
 	(a)	to require the Engine to remain at an airport or, as the case may be, (after taking out new insurances pursuant to Clause 14.3) to remain at, or be transported to any location nominated by Lessor until the Insurances are in full force and effect; and/or	
 
 	(b)	to pay the premiums due in respect of the Insurances or to take out and maintain new insurances complying with the requirements of Clause 14, including an owner’s interest policy in such form as Lessor may require	
and any monies spent by Lessor in doing either of the foregoing shall become immediately due and payable to Lessor by Lessee together with interest thereon at the Default Rate from the date of expenditure by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment).
 
14.4	Lessee shall be responsible for any deductible or excess payment payable under the provisions of the Insurances and shall indemnify Lessor against any Losses in connection therewith.	
 
14.5	Lessee shall not, without the prior written consent of Lessor, take out insurances, in respect of any Engine other than as required under this Agreement where such insurances may prejudice the Insurances or recovery thereunder. Lessee shall not create or permit to exist any Encumbrance over the Insurances, or its interest therein, save as constituted by this Agreement and/or any of the other Lessee Documents.	
 
14.6	Lessor shall be entitled, after the Termination Date of each Lease Period, to require Lessee to maintain insurance with respect to Lessee’s liability under the indemnities set forth in Clause 16 for a period which shall be the earlier of two years or until the next Engine Shop Visit, such insurance shall name the Indemnitees as additional insured to the extent of their respective interests. The obligation of Lessee to effect such insurances shall continue notwithstanding Lessee ceasing to be the user or operator of the relevant Engine and/or Lessor ceasing to be the owner of the relevant Engine.	
 
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14.7	If any of the Insurances referred to in Paragraph 1 of Schedule 3 are subject to an annual aggregate limit and by reason of any claims made thereunder during the course of any policy year in respect of any property subject to such policy, the aggregate amount of coverage available thereunder in respect of the balance of such policy year shall have been reduced, Lessee shall forthwith notify Lessor of the amount of any such reduction and Lessor shall be entitled to require Lessee, in writing, to increase the aggregate limit under the relevant policy to such amount as may be necessary to ensure coverage of the Engines.	
 
14.8	Lessee undertakes that, upon the request of Lessor, it shall from time to time enter into an Assignment of Insurances in an amount not to exceed the Agreed Value.	
 
14.9	If Lessor assigns all or any of its rights under this Agreement or otherwise disposes of any interest in any Engine to any party, Lessee will, upon request and subject to the agreement of the Insurers, procure that such party shall be named as additional insured on the Insurances so that such party will enjoy the same rights enjoyed by Lessor under the Insurances.	
 
14.10	Negotiations for renewal of Insurances shall commence prior to the expiration of any required insurance. Lessee’s broker shall give Lessor in due course, prior to the expiration, confirmation of renewal of insurance, and, within 7 days of each renewal date, the renewal certificate of insurance.	
 
14.11	Lessee shall procure that its insurance brokers give Lessor such information as to claims made under the Insurances or as to any related matter as Lessor may reasonably request and Lessee shall use its reasonable endeavours to assist and provide all information reasonably requested by Lessor to enable Lessor to collect or recover any monies payable in respect of the Insurances.	
 
14.12	The Hull All Risks and Hull War Risks and/or Insurances maintained by Lessee shall be amended by endorsement or otherwise so as to ensure that when the Engine is attached to an airframe that the agreed value of the insurances in respect of that airframe are automatically and without further act or document increased by the Agreed Value of the Engine so that in the event of a Total Loss occurring whilst the Engine is attached to an airframe the insurers/reinsurers will be obliged to pay out the agreed value for the relevant airframe and the Agreed Value for the Engine.	
 
14.13	Where the Insurances are reinsured through reinsurers approved by Lessor, the Insurances and reinsurances shall contain a “cut-through” clause in standard market form.	
 
15.	Loss or Damage and Payment of Insurance Proceeds	
 
15.1	If a Total Loss of an Engine occurs prior to Delivery of it, neither party shall have any further obligation to the other in respect of such Engine save as expressly set out herein.	
 
15.2	From the moment of Delivery and throughout the Lease Period, Lessee shall bear the full risk of any loss, destruction, hi-jacking, theft, condemnation, confiscation, seizure or requisition of or damage to each Engine and any other occurrence of whatever kind which shall deprive Lessee or the operator of any Engine for the time being of the use, possession or enjoyment of such Engine.	
 
15.3	Lessee shall give Lessor immediate notice of any such occurrence as is referred to in Clause 15.2 or which may otherwise give rise to a claim under the Insurances other than repairable damage the likely cost of rectification of which will not exceed in aggregate *****.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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15.4	If any Engine shall become a Total Loss during the Lease Period relating thereto, Lessee shall procure that the Insurers pay to Lessor as the loss payee under the Insurances within 60 days (or such longer period as may be required having due regard to the advices of Lessee’s insurance brokers) of the date on which the Total Loss occurred, the Agreed Value in respect of such Engine.	
 
15.5	Lessee shall continue to make all payments due under the terms of this Agreement in the amounts and manner required notwithstanding the occurrence of a Total Loss PROVIDED that no further Rent or maintenance reserves shall become due after the date upon which all sums due under Clause 15.4 shall have been received in full by Lessor (or its nominee) whereupon the Lease Period shall terminate.	
 
15.6	In the event of the occurrence of repairable damage to an Engine or its partial loss or destruction, Lessor (or its nominee) as the loss payee under the Insurances shall either pay any insurance monies received to Lessee upon receiving evidence that such damage has been repaired to Lessor’s satisfaction (acting reasonably) or pay such insurance monies to the repairer in settlement of its charges PROVIDED that if a Relevant Event has occurred and is continuing, Lessor shall be entitled to require that such insurance monies be applied in or towards settlement of any amounts due and payable by Lessee to Lessor under this Agreement. If the insurance monies paid in respect of repairable damage are insufficient to pay the cost or estimated costs of repairing such damage, Lessee shall pay any deficiency.	
 
15.7	All third party liability claims under the Insurances shall be settled directly with such third party.	
 
15.8	If any Engine and/or any Host Aircraft is requisitioned for hire by any governmental or other competent authority during the Lease Period then, unless and until the Engine becomes a Total Loss following such requisition and Lessee shall have made payment of all sums due under the terms of this Agreement, the leasing of the Engine hereunder shall continue (subject always to Lessor’s rights under Clause 19) and Lessee shall remain fully responsible for all of its obligations other than such obligations which Lessee is unable to perform solely by virtue of such requisition. Subject to no Relevant Event having occurred and Lessor’s rights under Clause 19, Lessee shall, during the Lease Period, be entitled to all requisition hire paid to Lessor or to Lessee on account of such requisition.	
 
15.9	Lessee shall, as soon as practicable after the end of any requisition for hire, cause each affected Engine to be put into the condition required by this Agreement, and where that requisition shall end after the date upon which the Lease Period in respect of such Engine would otherwise have expired or terminated but for such requisition, Lessee shall, as soon as practicable, cause the Engine to be put into the Redelivery Condition and Lessee shall comply with all of its obligations under Clause 20 and the relevant Lease and redeliver the Engine to Lessor, allowance being made for fair wear and tear in respect of the period from the date on which the Lease Period would otherwise have expired or terminated but for such requisition until the actual expiry or termination.	
 
15.10	Lessor shall be entitled to all compensation payable in respect of any change in the structure, state or condition of any Engine arising during the period of requisition for hire. Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under Clause 15.9 PROVIDED that if a Relevant Event	
 
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 	has occurred and is continuing, Lessor shall be entitled to apply such compensation in or towards settlement of any amounts owing by Lessee under this Agreement and any excess compensation not so applied shall be paid to Lessee upon ceasing of the Relevant Event.	
 
16.	Costs and Indemnities	
 
16.1	Lessee indemnifies Lessor in respect of any Loss incurred by Lessor:-	
 
 	(a)	as a consequence of the non-acceptance of any Engine by Lessee, under this Agreement other than as a result of such Engine’s failure to meet the conditions or requirements hereof or a failure of Lessor to tender the engine for lease hereunder;	
 
 	(b)	in respect of any breach of this Agreement by Lessee; and	
 
 	(c)	in respect of all overhaul costs and/or replacement costs (including without limitation removal and installation costs) of Life Limited Parts in respect of each Engine resulting directly from the loss of or maintenance by Lessee of inadequate historical records relating to each Engine and/or any Part, including without limitation any and all Life Limited Parts.	
 
16.2	Lessee indemnifies the Indemnitees in full on demand from:	
 
 	(a)	any Loss which Lessee has agreed to pay but which shall nevertheless be claimed from or assessed against and paid by any Indemnitee;	
 
 	(b)	any Taxes which Lessee has agreed to pay but which shall nevertheless be claimed from or assessed against and paid by any Indemnitee, and against any liability incurred by any Indemnitee by reason of any delay or failure of Lessee to pay any such Taxes including any delay or failure of Lessee to make any such deduction or withholding as is referred to in Clause 17.4 or by reason of any increased payment as is referred to in Clause 17.5 not being made on the due date for such payment;	
 
 	(c)	any Loss:-	
 
 	(i)	resulting from or arising out of the design, manufacture, testing, delivery, import, export, registration, ownership, possession, control, use, operation, leasing, subleasing (including all administrative and other costs associated with approval of any Sublease), insurance, maintenance, repair, refurbishment, condition, service, overhaul, modification, change, alteration, loss, damage, removal, storage, redelivery, sale or disposal of, in or to the Engine, or relating to the loss or destruction of or damage to any property, or death or injury of, or other loss of whatsoever nature suffered by, any party caused by, relating to, or arising from or out of (in each case whether directly or indirectly) any of the foregoing matters, referable to the Lease Period;	
 
 	(ii)	on the grounds that any design, article, component or material in the Engine or the operation or use thereof constitutes an infringement of any intellectual property right of any kind whatsoever; and	
 
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 	(iii)	in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Engine, or in securing the release of the Engine.	
 
 	(d)	Notwithstanding anything to the contrary herein set forth, the indemnity obligations of Lessee, shall not apply to any Loss which (i) results from or arises out of the wilful misconduct or gross negligence of Lessor and/or any Indemnitee; (ii) any Loss arising out of the period before the Delivery Date or after the Expiry Date and return of the Engine in accordance with applicable provisions hereof, (iii) constitute Taxes and other amounts which are indemnified pursuant to or excluded from indemnification under any other clause or provision of this Agreement; (iv) Loss would not have arisen but for a breach by any Indemnitee of any provision of this Agreement or as a result of the inaccuracy or falsity of any representation or warranty made or given by any Indemnitee; (v) would not have occurred but for the existence of an Encumbrance which Lessee is not responsible for discharging under this Lease; (vi) are ordinary and usual operating or overhead expenses of any Indemnitee other than any such Claim arising in connection with an Event of Default by Lessee hereunder; or (vii) which arises as a result of any financing of any Engine by Lessor/or its permitted successors or assigns or by any voluntary or involuntary transfer of any of Lessor’s right title and interest in and to any Engine or this Agreement except as a result of the exercise by Lessor and/or Lender of any remedy following the occurrence and during the existence of an Event of Default.	
 
 	(e)	Should an Indemnitee obtain a repayment of any amount previously paid to it by Lessee, at such time as there exists no Event of Default, Lessor shall or shall cause such Indemitee to pay promptly to Lessee the amount of such repayment, together with the amount of interest received by such Indemnitee on account of such repayment.	
 
16.3	Monies becoming due by Lessee to the Indemnitees under Clause 16 or elsewhere in this Agreement shall be paid in full upon receipt of a written demand and shall be paid together with interest thereon at the Default Rate from the date of such written demand to the date of payment by Lessee (before as well as after judgment) and such additional amounts (whether payable to such Indemnitee or any third party or taxation authority) as are necessary to ensure that such Indemnitee suffers no liability to Tax as a result of such payments.	
 
16.4	Any obligation imposed on Lessee under the Lessee Documents which Lessee has failed to perform or which Lessor has the right to perform on Lessee’s behalf may be performed by Lessor at Lessee’s expense unless otherwise expressly stated.	
 
17.	Taxation	
 
17.1	All amounts receivable by Lessor under any Lease are stated herein exclusive of any Taxes payable in respect thereof and shall be made gross, free of any rights of counterclaim or set-off and without any deductions or withholdings of any nature.	
 
17.2	Lessee shall be responsible for payment of the following Taxes:	
 
 	(a)	all Taxes assessed and payable in Lessee’s Country in connection howsoever with any Lease other than Taxes imposed upon Lessor as a result of any connection with Lessee’s Country or business conducted by Lessor therein which is not related to this Agreement or to the possession, use, storage or manufacture of the Engine therein;	
 
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 	(b)	all Taxes assessed and payable outside Lessee’s Country resulting from the delivery, use, possession, operation, return, storage, maintenance, , import or export of any Engine or any Host Aircraft prior to the end of the Lease Period relating to the affected Engine;	
 
 	(c)	all Taxes assessed and payable outside Lessee’s country on the income, profits or gains of Lessee;	
 
 	(d)	all Taxes resulting from any Encumbrances except any Lessor’s Lien; and	
 
 	(e)	all Taxes imposed on any indemnity payments due from Lessee to any Indemnitee pursuant to any Lease.	
 
17.3	Lessor shall be responsible for payment of the following Taxes:	
 
 	(a)	all Taxes assessed and payable outside Lessee’s Country on Lessor resulting solely and directly from Lessor’s ownership of any Engine;	
 
 	(b)	all Taxes assessed and payable in Ireland or the United States of America on Lessor unless such Taxes result from the delivery, use, possession, operation, return, storage, maintenance, import or export of any Engine or any Host Aircraft after Delivery but prior to the end of the Lease Period relating to the affected Engine;	
 
 	(c)	all Taxes resulting from any voluntary or involuntary sale, assignment or transfer by Lessor of any of its right, title or interest in any Engine or of its obligations hereunder or under any Lease pursuant to Clause 12.2 (unless such transfer, sale or assignment occurs as a result of an Event of Default or Total Loss) to the extent (if any) to which the amount of such Taxes exceeds the amount of the Taxes (determined as at the date of the sale, assignment or transfer taking into account laws then in effect or enacted or scheduled to come into effect to the extent applicable to such sale, assignment or transfer) which would have been payable by Lessee if such assignment or transfer had not taken place;	
 
 	(d)	any and all Taxes assessed and payable outside Lessee’s Country (or inside Lessee’s Country to the extent Lessor is responsible therefor pursuant to Clause 17.2(a)) on or allocated with reference to Lessor’s gross or net income, turnover or gains;	
 
 	(e)	any and all Taxes assessed and payable outside Lessee’s Country to the extent the same would not have been imposed but for any failure of Lessor to perform any of the obligations hereunder or under any Lease or to provide any information (following Lessee’s written request to Lessor which request Lessor has unreasonably failed to comply with) required for the proper filing of any information or return required to be filed by Lessee in respect of any Tax to be paid by Lessee hereunder; and	
 
 	(f)	any and all Taxes arising as a result of any connection of Lessor and the taxing jurisdiction unrelated to this Agreement, the Lease(s) or the transactions contemplated hereunder or thereunder.	
 
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17.4	If Lessee is required by law in any relevant jurisdiction to make any deduction or withholding from any payment hereunder, it shall (i) promptly notify Lessor of such requirement (ii) do so in full and on time and (iii) to the extent to which Lessee is responsible for the payment of such deduction or withholding, the sum due from Lessee in respect of such payment shall be increased to the extent necessary to ensure that, after such deduction or withholding, Lessor receives and retains (free of any liability) a net sum equal to the sum it would have received and retained had no deduction or withholding been required. Not more than once in any 12 month period or one fiscal year, Lessor may request in writing Lessee to give Lessor a detailed statement of all such deductions or withholdings made during the preceding twelve month period or fiscal year and copy receipts in respect of same.	
 
17.5	If gross payments are prevented by law, Lessee shall indemnify Lessor against all Losses reasonably incurred by Lessor through its receipt of a sum less than the full amount due from Lessee hereunder. The amount for which Lessee is obliged to indemnify Lessor shall be no greater than the amount of the deduction or withholding, together with interest at the Default Rate from the date such full amount would have been paid to Lessor if Lessee had been able to make a gross payment until the date of Lessee’s payment in respect thereof pursuant to this Clause 17.5.	
 
17.6	If, following the making of any deduction or withholding in respect of sums payable hereunder and the payment by Lessee of any increased amount in accordance with Clause 17, Lessor receives or is granted a credit against, remission for, or repayment of any Tax payable by it (herein a “credit”), which credit is referable to that increased amount so paid by Lessee, Lessor shall, to the extent that it is reasonably satisfied that it can do so without prejudice to the retention of such credit, reimburse Lessee with the amount of such credit as will leave Lessor in no worse position after Taxation than it would have been in had there been no such deduction or withholding. Lessor shall use reasonable endeavours to recover any such credit or will cooperate reasonably with Lessee’s efforts to recover such credit provided that Lessor shall not be obliged to take or not take any action which might have an adverse effect on any of Lessor’s other tax affairs or incur any costs which Lessee shall not discharge on demand.	
 
17.7	If a claim is made against Lessor or any Indemnitee for Taxes with respect to which Lessee is liable for a payment or indemnity under this Agreement, Lessor or such Indemnitee will promptly give notice in writing of such claim; provided, however, that Lessor’s or such Indemnitee’s failure to give notice will not relieve Lessee of its obligations hereunder except to the extent that any such failure adversely affects Lessee’s right to contest such Taxes in accordance with this Clause 17.7. So long as (i) such Tax exceeds *****; (ii) a contest of such Taxes would not involve any material danger of the sale, forfeiture or loss of the Engine or any interest therein, and (iii) adequate reserves have been made for such Taxes or an adequate bond has been posted, then Lessor and such Indemnitee at Lessee’s written request will, in good faith, with diligence and at Lessee’s reasonable expense, contest (or permit Lessee to contest in the name of Lessor and/or such Indemnitee) the validity, applicability or amount of such Taxes. Should Lessor or any such Indemnitee determine in any particular instance with respect to any Taxes that a contest of such Taxes would not be in its best interest, Lessor or any such Indemnitee may request that Lessee forego its rights to contest the same and Lessee shall not contest the same provided however, that in every such case, Lessor and all relevant Indemnitees shall, in writing addressed to Lessee, waive in respect of such Taxes, any and all of their respective rights to seek indemnification of such Taxes from Lessee, its officers, shareholders, directors, agents and affiliates and agree to hold Lessee, its officers, directors, shareholders, agents and affiliates harmless for any and all claims arising	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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17.8	Mexican Asset Tax	
Lessee shall elect to consider each Engine as part of its assets in terms of Article 25 of the Mexican Asset Tax Law Regulations (Reglamento de la Ley del Impuesto al Activo) and provide evidence of such election to Lessee within 10 days from Delivery of the relevant Engine.
 
18.	Miscellaneous	
 
18.1	Entire Agreement	
The Lessee Documents contain the entire agreement between the parties relating to the leasing of Engines and supersede all previous proposals, agreements and any other written and oral communications in relation to the matters therein contained, and the terms of the Lessee Documents shall not be varied or any matters deemed consented to by Lessor otherwise than in writing executed by the parties’ duly authorised representatives.
 
18.2	Delegation by Lessor	
Lessor may delegate to any party, acting as an agent or representative on its behalf all or any of Lessor’s rights, powers or discretions set forth in any Lease and upon such terms as Lessor in its absolute discretion thinks fit provided that:
 
 	(a)	such agent or representative shall exercise any such rights, powers or discretions in such manner as is required hereunder or under any Lease;	
 
 	(b)	no such delegation shall be construed so as to relieve Lessor of its obligations hereunder for the performance of which Lessor (subject to Clause 12.2) shall remain fully liable; and	
 
 	(c)	no such delegation shall result in an increase of any obligation of Lessee hereunder or a reduction of Lessee’s rights hereunder provided that no Relevant Event has occurred and is continuing.	
 
18.3	Further Assurance	
 
 	(a)	Lessee undertakes to execute, sign, perfect, do and (if required) register every such further document as in Lessor’s reasonable opinion may be necessary or desirable to carry out more effectively the intent and purpose of any Lease and/or as may be required by any applicable law and to establish, protect and maintain Lessor’s rights and remedies created or intended to be created thereunder.	
 
 	(b)	If the state in which Lessee is situated has, or at any time brings into force, any legislative or other provisions giving effect to the Convention on International Interests in Mobile Equipment (the “ Convention ”) and/or the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the “ Protocol ”), Lessee, at Lessor’s written request, at Lessee’s cost and expense, shall from time to time do or cause to be done any and all acts and things which may be required or desirable (in the reasonable opinion of Lessor) to ensure that Lessor and the Lenders have the full benefit of the Convention and/or the Protocol in connection with the Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting, preserving and/or enhancing any international interest(s) vested in Lessor and/or the Lenders with respect to the Engine and constituted by this Agreement and/or the Lease;	
 
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 	(ii)	entry in to agreements (subordination or otherwise) to protect and/or maintain the priority of any international interest(s) referred to in the foregoing paragraph (i); and	
 
 	(iii)	excluding in writing the application of any provisions of the Convention and/or Protocol that Lessor and Lessee may deem desirable in connection with the foregoing.	
 
(c)	In sub-clause (b) above, the following terms have the following meanings:	
“international interest” has the meaning as expressed in the Convention and Protocol;
“state” has the meaning as expressed in the Convention and Protocol; and
“state in which Lessee is situated” shall be constructed in accordance with the expression “state in which the debtor is situated in” as set out in Article 4 of the Convention.
 
18.4	No Waiver	
No failure or delay on Lessor’s part in exercising any right, power or remedy under any Lease shall operate as a waiver thereof nor shall any single or partial exercise by Lessor of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy whether under any Lease or otherwise. Lessor’s rights and remedies set forth in each Lease are cumulative and are not exclusive of any rights and remedies provided to Lessor by any applicable law or otherwise.
 
18.5	Time of the Essence	
Subject to any of grace periods referred to in any Lease, time shall be of the essence as regards Lessee’s performance of its obligations under each Lease.
 
18.6	Enforcement	
 
 	(a)	If at any time any provision of any Lease or the application thereof to any party or circumstance shall to any extent be or become, illegal, invalid or unenforceable under the laws of any jurisdiction the remainder of such Lease, or the application of such provision to parties or circumstances other than those as to which it is already illegal, invalid or unenforceable, shall not be affected or impaired thereby. The parties agree in such event to substitute valid, legal and enforceable provisions so as to implement the intentions of the parties hereto to the extent legally possible.	
 
 	(b)	If such substitution mentioned in Clause 18.6(a) is not possible or is not achieved to Lessor’s satisfaction, the parties shall negotiate to seek an alternative means to implement their initial intentions, failing which Lessor may, upon 30 days written notice to Lessee, terminate this Agreement and Lessee shall pay to Lessor (as agreed compensation for loss of bargain and	
 
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 	not as a penalty) the amount notified by Lessor to Lessee as being the aggregate of the amounts more particularly set forth in Clause 19. In such event, Lessee shall immediately redeliver the Engine to Lessor at the Redelivery Location in the Redelivery Condition. Subject to Clause 18.6(c) below, if, however, the illegality is a result of any change in the laws of Ireland or the United States of America after the date of a Lease, Lessee shall return the relevant Engine in the Redelivery Condition but shall pay, in lieu of the amounts set forth above, an amount equal to two (2) months Rent.	
 
 	(c)	If by reason of any change in law or in the reasonable interpretation thereof, (i) it becomes unlawful or impossible for Lessee to pay Lessor any sum payable under any Lease or any provision of any Lease becomes invalid or unenforceable or (ii) the Engine is located, operated or based in a jurisdiction which shall have become a Prohibited Jurisdiction pursuant to a Prohibition or operated by a person who shall have become a Prohibited Person pursuant to a Prohibition in such a manner as would render it liable to seizure or Lessor or any Indemnitee liable to civil or criminal sanction pursuant to any Prohibition, Lessee shall notify Lessor. In the case of (i) above, if it is permissible under such law and if Lessor is satisfied that its rights in the Engines will not in any way be prejudiced, Lessor and Lessee shall consult for a period not exceeding 10 Business Days with a view to determining whether the leasing of the Engines under the Leases can be restructured on terms acceptable to Lessor in a way which would circumvent such difficulty. If such consultation is not permissible or if Lessor is not satisfied or if agreement is not reached within the time prescribed, Lessee shall pay Lessor such amounts specified in Clause 19 as are applicable and upon receipt by Lessor of such amounts, the Lease Period in respect of all Engines shall terminate subject to the provisions of the Leases. In the case of (ii) above, Lessee shall promptly cause the relevant Engine to cease to be operated by a Prohibited Person or located, operated or used in a Prohibited Jurisdiction in violation of the relevant Prohibition.	
 
 	(d)	If Lessee is prevented by law from indemnifying Lessor under Clause 17.5, the parties shall forthwith endeavour in good faith to find an alternative solution within ninety days of such event, failing which Lessee shall redeliver each Engine to Lessor in accordance with Clause 20 and pay to Lessor on demand the applicable amounts specified in Clause 19 and upon receipt by Lessor of such amounts, the Lease Period in respect of all Engines shall terminate subject to the provisions of the Leases.	
 
18.7	Counterparts	
 
 	(a)	This Agreement and each Lease may be executed in any number of counterparts each of which shall be an original and all such counterparts taken together shall be deemed to constitute one and the same agreement.	
 
 	(b)	To the extent, if any, that this Agreement or any Lease constitutes chattel paper (as such term is defined in the United States Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Agreement or such Lease may be created through the transfer of possession of any counterpart other than the original counterpart which shall be identified as the counterpart which has been marked “Original” on the signature page hereof or thereof.	
 
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18.8	No Brokerage	
Lessor and Lessee each agree that there has been no third party as agent or broker involved in the transaction contemplated by the Lessee Documents and each party agrees to indemnify the other from liability for fees, commissions or other claims made upon them out of any such claim caused by the other.
 
18.9	Confidentiality	
Lessee shall keep the provisions of the Lessee Documents confidential and not disclose them to any other party save (a) to any officer, employee or contractor of Lessee in connection with the performance by Lessee of its obligations and agreements thereunder or (b) to any professional adviser appointed by the Lessee to advise on such performance PROVIDED that such parties agree to be bound by the terms of this Clause 18.9 (for which Lessee shall be responsible) or (c) as required by law or (d) to any relevant regulatory body whether or not the requirement under which the disclosure is made has the force of law.
 
18.10	Survival	
The representations, warranties, covenants, agreements and indemnities of Lessee set forth in each Lease, and Lessee’s obligations thereunder, shall survive the expiration or termination of each Lease to the extent required for full performance and satisfaction thereof.
 
18.11	Registration of Lease	
 
 	(a)	If Lessor records any Lease with the FAA Registry, Oklahoma City, U.S.A., upon its termination for any reason whatsoever, each of the parties will execute and deliver to the other party promptly such documents as the other party may reasonably request in order to file such termination with the FAA.	
 
 	(b)	If required in writing by Lessor, Lessee, at Lessor’s cost and expense, will file this Agreement and each Lease with Registro Aeronáuitco Mexicano (Mexican Aeronautical Registry), of the Dirección General de Aeronáutica Civil (General Civil Aeronautics Directorship), in connection with which, at Lessee’s written request, Lessor, at its sole cost and expense, shall provide to the Lessee an original counterpart of this Agreement and the Lease, executed on behalf of the Lessor and notarised and apostilled.	
 
18.12	Notices	
Each communication to be made under any Lease shall be in writing in English, made by facsimile or letter delivered by hand or reputable overnight courier service. Communications shall (unless the addressee has by 15 days’ notice specified another address) be addressed as follows:

(a)	  	If to Lessor to:	  	Engine Lease Finance Corporation	
			
	  		  	Shannon Business Park, Shannon	
	  		  	County Clare, Ireland	
	  	Fax No.:	  	(353) 61-361785	
	  	Attention :	  	Assistant Corporation Secretary	
			
(b)	  	If to Lessee to:	  	Concesionaria Vuela Compañia de Aviación, S.A. de C.V., Paseo de la Reforma 505, Piso 15, Edificio Torre Mayor, Cuauhtemoc, Mexico DF, 06500 Mexico	
	  	Fax No.	  	503 2267 8166	
	  	Attention:	  	General Counsel	
 
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The time of delivery shall be (a) when made or delivered in the case of a delivery by hand during normal business hours, (b) in the case of delivery by reputable overnight courier service, at the time shown by the records of such delivery service or, (c) in the case of a facsimile, when receipt has been confirmed by telephone or return facsimile.
 
18.13	Jurisdiction	
 
 	(a)	The Lessee Documents shall be governed by and construed in accordance with the Governing Law including all matters of construction validity and performance (without reference to conflicts of laws principles other than Title 14 of Article 5 of the General Obligations Law).	
 
 	(b)	Each of the parties irrevocably:	
 
 	(i)	consent that any legal action with respect to any of its rights or obligations arising under or related to the Lessee Documents or any of them shall either (at the option of the plaintiff):	
 
 	(A)	finally settled under the Commercial Arbitration Rules (the “Rules ”) of the American Arbitration Association (the “ AAA” ) by three arbitrators appointed in accordance with the Rules (in which case the place of arbitration shall be New York, United States of America and the language of the arbitration shall be English); or	
 
 	(B)	brought in any court in the State of New York and any federal court of the United States of America in each case, sitting in the City, County and State of New York, and irrevocably submits to the jurisdiction of such courts in respect of any suit, action or proceedings relating to the Lessee Documents or any of them provided , however , that nothing in this Agreement shall preclude either party from institution of proceedings against the other party in such other party’s country of domicile, for the purpose of protecting and enforcing its rights under the Lessee Documents or any of them;	
 
 	(ii)	waives any objection which it may now or hereafter have to the laying of venue of any suit, action or proceedings relating to the Lessee Documents or any of them in the County of New York, New York and further irrevocably waives any claim that the County of New York, New York is not a convenient forum for any such suit, action or proceedings.	
 
 	(c)	Each of the parties agrees that in any proceedings taken against it or its assets in connection with the Lessee Documents no immunity from proceedings shall be claimed by or on its behalf or with respect to any of its assets and each party hereby irrevocably and unconditionally waives any such right of immunity.	
 
 	(d)	If the appointment of Lessee’s Process Agent ceases to be effective, Lessee shall immediately appoint another person in the state of New York, United	
 
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 	States of America, to accept service of process on its behalf in such state and shall provide Lessor with full details of its new process agent together with written confirmation from the new process agent that it has accepted its appointment and proof that a replacement Process Agent Power of Attorney has been duly executed before a Mexican notary public.	
 
 	(e)	If the appointment of the Lessor’s Process Agent ceases to be effective, Lessor shall immediately appoint another person in the state of New York, United States of America, to accept service of process on its behalf in such state and shall provide Lessee with full details of its new process agent together with written confirmation from the new process agent that it has accepted its appointment.	
 
 	(f)	THE PARTIES IRREVOCABLY WAIVE AS AGAINST EACH OTHER ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION ARISING UNDER THIS AGREEMENT.	
 
PART D	TERMINATION AND REDELIVERY MATTERS	
 
19.	Term, Events of Default and Termination	
 
19.1	Unless terminated earlier by mutual agreement or in accordance with its terms this Agreement shall terminate, save only as to any unreserved rights and obligations upon expiry of the last subsisting Lease Period in respect of any Engine.	
 
19.2	It is a fundamental term and condition of this Agreement that none of the following events or circumstances shall occur during the Lease Period and that the occurrence of any of them shall constitute a material breach and repudiation by Lessee of this Agreement:	
 
 	(a)	Lessee fails to pay any sum payable by it under this Agreement within 3 Business Days of the date the same shall become due or, in the case of sums payable on written demand, within 5 Business Days of demand being made in the manner required by this Agreement; or	
 
 	(b)	Lessee breaches any of its obligations under any of Lessee Documents or any other agreement between the parties or their affiliates and, in respect of any such breach which in the opinion of Lessor (acting reasonably) is capable of remedy, such remedial action as Lessor may require shall not have been taken within 15 days from the date upon which Lessor notifies Lessee of such default and of the remedial action which Lessor requires Lessee to undertake PROVIDED that, the grace period set out in Clause 19.2(b) shall not entitle Lessee to operate the Engine otherwise than in accordance with all applicable laws; or	
 
 	(c)	any representation or warranty made or deemed to be repeated by Lessee is incorrect in any material respect if remediable, is not remedied within 15 days; or	
 
 	(d)	a creditor takes enforcement action (pursuant to a final judgment the amount of which equals or exceeds *****) against any of Lessee’s assets which is not discharged within 30 days; or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(e)	Lessee is unable to pay its debts as they fall due or commences negotiations with its creditors with a view to the general readjustment or rescheduling of all or part of its indebtedness or proposes any composition or other arrangement for the benefit of its creditors generally or any class of its creditors or proceedings are commenced in relation to any such reconstruction or re-adjustment of debts; or	
 
 	(f)	Lessee or any creditor takes any steps for (i) Lessee to be adjudicated insolvent or wound up, (ii) the appointment of a liquidator, trustee, receiver, examiner, administrator or similar officer to or in respect of Lessee or the whole or any part of its undertaking, assets, rights or revenues, or (iii) the judicial or court protection of Lessee from its creditors provided in the case of any involuntary proceeding the same shall not have been dismissed within 60 days; or	
 
 	(g)	Lessee threatens in writing to suspend or cease to carry on its business; or	
 
 	(h)	all or substantially all of the assets, rights or revenues of Lessee are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or	
 
 	(i)	Lessee threatens to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than for the purpose of a solvent reconstruction or amalgamation the terms of which have received the prior consent of Lessor such consent not to be unreasonably withheld or delayed or in respect of any merger, consolidation or offering not prohibited by Clause 11(i) above; or	
 
 	(j)	there occurs a material adverse change in Lessee’s ability to perform its obligations under the Lessee Documents or any of them; or	
 
 	(k)	there is any change (in excess of 50% whether by one or a series of transactions) in the legal and beneficial ownership of Lessee with the exception of any such change resulting from: (i) a merger, consolidation or offering not prohibited by Clause 11(i) above; (ii) a transfer of shares between or among current shareholders of Lessee or their affiliates which does not adversely affect Lessee’s net worth, (iii) a transfer to an entity having a net worth at the time of any such transfer, equal to or greater than that of Lessee, or (iv) a transfer in respect of which Lessee shall have requested and obtained Lessor’s prior written consent, which consent shall not be unreasonably withheld or (v) a change resulting from a merger, consolidation or offering permitted pursuant to Clause 11.1(i); or	
 
 	(l)	the Engine suffers any material repairable damage and Lessee fails to commence the repair of such damage within 30 days or such longer period as required by the Authorised Repairer provided that such longer period is acceptable to Lessor (acting reasonably) from the date upon which such damage occurred and/or thereafter frustrates or delays completion of such repair; or	
 
 	(m)	Lessee shall dispose of or sell the Engine or create or suffer to exist any Encumbrance (other than a Permitted Lien) over the Engine or challenge the ownership and title of Lessor to the Engine; or	
 
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 	(n)	any Lessor’s Security required pursuant to a Lease is no longer valid, binding and enforceable for whatever reason; or	
 
 	(o)	any litigation, arbitration or administrative proceedings (one or more such proceedings if there are a number of proceedings relating to the same incident or event or dispute) for an uninsured amount exceeding ***** which, if determined against Lessee would materially and adversely affect its ability to perform its obligations hereunder, are pending or threatened against Lessee.	
 
19.3	Lessor’s Rights Following the Occurrence of an Event of Default	
If an Event of Default occurs and is continuing, Lessor may at its option, at any time:
 
 	(a)	by notice to Lessee (hereinafter a “Termination Notice”) accept such repudiatory breach by Lessee and immediately terminate the Lease Period whereupon Lessee’s right to possess and operate the Engine pursuant to the terms of the Lease, shall terminate; and/or	
 
 	(b)	subject to any mandatory provisions of law in the jurisdiction in which the Engine is at such time located:	
 
 	(i)	take possession of the Engine, and Lessee agrees that Lessor may for this purpose enter upon any premises where the Engine may be located, and Lessor shall be entitled to act and is hereby constituted as attorney for Lessee in effecting such repossession and in carrying out all acts and executing all documents to effect such repossession and transportation to a location acceptable to Lessor, or	
 
 	(ii)	request Lessee to redeliver the Engine to the Redelivery Location or to such other airport as Lessor may in its absolute discretion nominate or direct that the Engine remain at the location where, at the time of issuing a Termination Notice, it is based without further use or operation; and/or	
 
 	(c)	require Lessee to take all steps necessary to effect the export of the Engine from the jurisdiction where it is for the time being situated and to enable the Engine to be redelivered to Lessor in the Redelivery Condition. Following termination of the Lease Period, Lessor shall be free to lease, sell or otherwise dispose of the Engine as it may in its absolute discretion think fit; and/or	
 
 	(d)	revoke or vary any Termination Notice PROVIDED that any such revocation or variation shall not prevent Lessor from subsequently issuing any further Termination Notice in relation to either any event occurring prior to upon or subsequent to the date of the revocation or variation of the original Termination Notice.	
 
19.4	Payments on Termination after Delivery	
If a Termination Notice issues after Delivery, Lessee shall pay the amount notified by Lessor to Lessee as being the aggregate of:
 
 	(a)	any sums (whether in respect of Default Interest, costs, fees, expenses or otherwise) then accrued or which may become due under any of the Lessee Documents;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(b)	any Loss which Lessor may sustain or incur as a direct result of the occurrence of an Event of Default including without limitation:	
 
 	(i)	any loss of profit suffered by Lessor because of its inability to place the Engine on lease with another lessee on economic terms as favourable to Lessor as the terms of the Lease or because whatever use, if any, to which Lessor is able to put the Engine upon its return to Lessor (or the funds arising upon a sale or other disposal thereof) is not as profitable to Lessor as the leasing of the Engine in accordance with the terms of the Lease would have been; and	
 
 	(ii)	all costs and expenses incurred by Lessor in connection with any modification of or to the Engine for the purposes of any other proposed leasing or disposal of the Engine; and	
 
 	(iii)	any amount of additional interest payments, fees or other sums whatsoever paid or payable on account of funds borrowed in order to fund any unpaid amount; and	
 
 	(iv)	any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the acquisition by Lessor of the Engine or in unwinding any swap, forward interest rate agreement, forward currency rate agreement, interest rate cap and collar agreement or other financial instrument relating in whole or in part to Lessor’s financing of the Engine; and	
 
 	(v)	any reasonable legal or taxation fees and related costs and expenses incurred by Lessor in connection with the cancellation or termination of this Agreement or any agreement to purchase the Engine for the express purpose of leasing same to Lessee or in connection with the releasing or sale of the Engine; and	
 
 	(vi)	all costs and expenses incurred by Lessor in connection with such termination and repossession of the Engine and in carrying out any work or modifications necessary to put the Engine into the Redelivery Condition; and	
 
 	(vii)	the value of all maintenance/service covenants and other obligations which would have fallen to be performed by Lessee under the Lease but for such termination.	
 
 	(c)	all further Losses resulting directly from such termination.	
Lessor shall be entitled, following the issue of a Termination Notice to issue demands thereafter on Lessee in respect of any amounts referred to in this Clause 19.4 which have not been incurred and/or quantified at the date of issue of the Termination Notice.
 
19.5	Double Counting	
Notwithstanding the provisions of Clauses 19.3 and 19.4 above, to the extent that Lessor is entitled to be indemnified or compensated by or on behalf of Lessee for any Loss arising out of any event or circumstance under a particular provision of the Lessee Documents, Lessor shall not be entitled to recovery of such Loss under another provision of the Lessee Documents to the extent that it has already received compensation for such Loss from or on behalf of Lessee.
 
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19.6	Mitigation	
In exercising any remedies or making any claim for Loss or damages under this Clause 19, Lessor shall take all reasonable actions to mitigate any such Loss or damage.
 
19.7	Lessor’s Right to Remedy	
If Lessee fails to comply with any of its obligations under any Lease, Lessor may, without being obliged to do so, or responsible for so doing, and without prejudice to its right to treat that non-compliance as an Event of Default, effect compliance on Lessee’s behalf, and if Lessor incurs any expenditure in doing so, Lessor shall be entitled to recover such expenditure from Lessee together with interest thereon at the Default Rate from the date upon which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment).
 
19.8	Pre-estimate of damages	
Lessee agrees that the amounts specified in any Termination Notice are payable by it as agreed liquidated damages and a genuine pre-estimate of the loss which will be incurred by Lessor as a direct result of a breach of any Lease by Lessee and not as a penalty. Lessor’s entitlement to such amount shall be without prejudice to (but without duplication of) any other rights and remedies of Lessor arising as a result of such breach or under any Lease but Lessor shall give credit for so much of such amount as it actually receives and is entitled to retain when recovering damages from Lessee for breach of any Lease.
 
19.9	Preservation of accrued rights	
The termination of any Lease for any cause whatsoever shall not affect Lessor’s right to retain all sums paid by Lessee to Lessor pursuant to any Lease and/or recover from Lessee any money due to Lessor on or before the date of such termination or affect the right of Lessor to recover any damages for breach of any Lease in each case in conformity in the terms of such Lease.
 
20.	Redelivery of Engines	
 
20.1	On the Termination Date relating to each Engine, Lessee shall redeliver such Engine to Lessor at the Redelivery Location in the Redelivery Condition. Unless otherwise stated all costs and expenses of such compliance shall be borne by Lessee.	
 
20.2	Prior to redelivery of the Engine to Lessor, Lessee shall give Lessor 7 days notice of and do each of the following:	
 
 	(a)	in the presence of Lessor’s technical representative perform a full performance test cell run on the Engine and record and evaluate the performance of the Engine, which shall be within the limits specified in the Manufacturer’s maintenance manual;	
 
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 	(b)	immediately following such test cell run perform a complete video borescope inspection of the Engine. A hard copy of the borescope inspection report shall be included in the Engine Technical Records;	
 
 	(c)	perform not less than 100 Flight Hours before removal of the Engine from service prior to redelivery, an initial oil SOAP analysis and again at redelivery a second oil SOAP analysis to confirm serviceability of the Engine. Such analysis shall be performed by a recognised laboratory approved by the Aviation Authority for such analyses and neither analysis shall exceed the limitations set out in the applicable approved documentation or indicate a rate of deterioration which would require immediate corrective action or further investigation.	
 
20.3	Lessee shall return the Engine with a “serviceable” or “okay to install” tag and an FAA 8130-3 or EASA Form 1. The tests referred to in Clause 20.2, together with the Engine historical and technical records and condition trend monitoring data for the Engine shall confirm to Lessor’s satisfaction:	
 
 	(a)	the Engine’s serviceability;	
 
 	(b)	that there is no indication of a deterioration in the performance of the Engine which is higher than normal based upon Lessee’s maintenance experience in operating engines of the same type as the Engine and;	
 
 	(c)	that the Engine can be operated for such number of Flight Hours and Cycles as are determined to be remaining to next Engine Heavy Maintenance (such determination to be made in accordance with the time between Engine Heavy Maintenance calculation set out in Section 1 item 8 of Schedule 4 to this Agreement) without requiring removal for any Engine Shop Visit.	
 
20.4	If the Engine fails to satisfy the requirements of Clause 20.3, Lessee shall correct such defects as are determined to be the cause of such failure and Lessee shall provide evidence satisfactory to Lessor confirming the correction of such defects so that the Engine can then satisfy the requirements of Clause 20.3.	
 
20.5	At the time of return shipment of the Engine, Lessee shall (1) cap and plug all openings; (2) preserve it for long term storage in excess of 90 days (to include the provision of desiccant bags); (3) completely seal it with heavy gauge vinyl plastic; and (4) otherwise prepare it for shipment in accordance with the Manufacturers’ specifications and install it upon its transportation stand.	
 
20.6	A surveyor nominated by Lessor will inspect the Engine upon its arrival at the Redelivery Location so as to ascertain if the Engine and any Part and the Engine Technical Records are in full compliance with the terms of this Agreement and such final inspection shall be used as the basis for determining the condition and maintenance status of the Engine upon redelivery.	
 
20.7	On redelivery, complete and up to date data regarding the life status of the Engine, Modules, Hard Life Parts and Life Limited Parts shall be recorded in the Engine Technical Records, which data shall be compared to equivalent data applicable in respect of the Engine at Delivery as noted in Annex 1 to Appendix A in the relevant Lease, for the purposes of the calculations set forth in such Lease.	
 
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20.8	Lessee shall provide all necessary assistance, as Lessor may reasonably require, in obtaining satisfactory export certificates in respect of the Engine to allow its export by Lessor as Lessor may direct.	
 
20.9	If upon redelivery the Engine is not in the Redelivery Condition, Lessor shall be entitled to require Lessee to place the Engine in such condition immediately. At Lessor’s option, Lessee shall promptly pay to Lessor the cost of effecting the correction of all discrepancies to place the Engine in such condition together with interest thereon at the Default Rate from the date any payment is made for such purpose by Lessor until reimbursement is received by Lessor (both before and after any judgment).	
 
20.10	If Lessee does not redeliver the Engine on the Termination Date and in the Redelivery Condition, Lessee’s obligations shall continue until the Engine shall have been redelivered in such condition PROVIDED that this Clause 20.10 shall not be considered a renewal of the terms of this Agreement or of Lessee’s rights to possession and use of the Engine or an extension of the Lease Period or a waiver of any right of Lessor hereunder and Lessor may at any time by issuing a Termination Notice terminate Lessee’s right to the continued possession of the Engine. Until such time as the Engine is redelivered in the Redelivery Condition, Rent shall continue to be paid and the performance of all other obligations of Lessee to Lessor shall continue.	
 
20.11	A Redelivery Acceptance Certificate substantially in the form set out in Appendix B to Schedule 2 shall be completed and signed by both parties noting the condition of the Engine upon redelivery.	
 
PART E	DEFINITIONS	
In this Agreement and each Lease, except where the context otherwise admits or requires, the following words and expressions shall have the following meanings and words and expressions defined in a Lease shall have the meanings set out therein:
“ Acceptance Certificate ” means a certificate substantially in the form set out in Appendix A to a Lease confirming the acceptance by Lessee from Lessor of an Engine subject to the terms of the Lease relating to such Engine;
“ Affiliate ” means any person under direct common control with Lessee;
“ Agreed Value ” means the amount in Dollars agreed between Lessor and Lessee as the value of the Engine referred to in any Lease for the duration of the Lease Period relating to such Engine;
“ Agreement ” means this agreement, including the Schedules and any Annexes hereto as the same may be amended and/or supplemented and/or substituted from time to time in accordance with the terms hereof or thereof including by the execution of one or more Leases;
“ Airworthiness Directive ” and “ AD ” means a written directive or order issued by the Manufacturer of an Engine, any Module or any Part and endorsed by the Aviation Authority (and, where different, by the Manufacturer’s aviation authority) in respect of such Engine, Module or Part mandating a specified action or course of action within a specified period of time;
 
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“ Assignment of Insurances ” means an agreement between Lessee and Lessor pursuant to which Lessee assigns to Lessor all of Lessee’s right, title and interest in and to the benefits of the Insurances or if the Insurances are placed through the New York insurance market, the proceeds of Insurances, relating to an Engine.
“ Authorised Repairer ” means a maintenance and repair performer or service agency licensed by the FAA or EASA to undertake maintenance work on an Engine and approved in writing by Lessor, such approval not to be unreasonably withheld;
“ Aviation Authority ” means the DGAC and each other party who shall from time to time be vested with the control and supervision of or have jurisdiction over the airworthiness and operation of an Engine and or any Host Aircraft to which an Engine is attached from time to time;
“ Business Day ” means a day on which banks are open for the transaction of business of the nature required by this Agreement in New York, U.S.A. and except in respect of payments, Mexico City, Mexico;
“ Confirming Opinion ” means a legal opinion issued by an international law firm reasonably acceptable to Lessor confirming that the arrangements contemplated by the definition of a Cooperation Agreement are contained within each relevant lease, conditional sale, instalment sale, mortgage or other security document or other agreement relating to each Host Aircraft existing as of the date hereof and Lessor will be able to rely on the provisions contained therein notwithstanding that it is not a party to such documents or to the effect that any Cooperation Agreements are dated binding and enforceable under the applicable laws thereof;
“ Cooperation Agreement ” means an agreement entered into or to be entered into between Lessor and all Interested Third Parties pursuant to which such parties (other than Lessor) agree to recognise Lessor’s right, title and interest in and to each Engine in return for Lessor agreeing to recognise the other parties’ right, title, and interest in and to any (a) Host Aircraft, or any engine which is removed from a Host Aircraft to enable any Engine to be installed on such Host Aircraft, or (b) any part which is temporarily installed on any Engine pursuant to this Agreement or such other document pursuant to which any Interested Third Party shall recognise Lessor’s (or all similarly situated lessors’) rights to the Engine or similar engines and waives any interest therein which agreement may be set forth in any relevant lease, conditional sale, instalment sale, mortgage or other security document or other agreement relating to a Host Aircraft provided the Lessor shall have received the Confirming Opinion;
“ Courts ” means the state and federal courts sitting in the state, county and city of New York, and to whose jurisdiction Lessor and Lessee irrevocably and unconditionally submit for all purposes relating to this Agreement;
“ Cycle ” means one start-up of an Engine prior to the take-off of a Host Aircraft for a flight and one shut-down of such Engine after such flight;
“ Delivery ” means, in respect of an Engine, the delivery and acceptance of such Engine in accordance with the terms of the relevant Lease;
“ Delivery Date ” means, in respect of an Engine, the date upon which Delivery of such Engine occurs as evidenced by the Acceptance Certificate relating thereto;
“ Delivery Location ” means the location nominated for the delivery of an Engine as specified in the Lease relating to such Engine or such other location as Lessor and Lessee may agree;
 
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“ Deposit ” means, in respect of each Engine, the amount in Dollars payable by Lessee to Lessor pursuant to the provisions of Clause 3.2 and the Lease relating to such Engine;
“ Deregistration Power of Attorney ” means a power of attorney granted by Lessee in favour of Lessor substantially in the form of Schedule 5;
“ DGAC ” means the Dirección General de Aeronáutica Civil (General Civil Aeronautics Directorship) of Mexico;
“ Dollars ” and “ $ ” means the lawful currency from time to time of the United States of America;
“ EASA ” means the European Aviation Safety Agency, the joint regulatory authority relating to aviation matters in the European Union or such other government or European Union entity which may replace the EASA from time to time;
“ EHM Claim Cap ” means the amount as stated in the Lease as being the maximum amount that Lessee may claim for any Engine Heavy Maintenance shop visit;
“ Encumbrance ” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security interest, title retention or other encumbrance of any kind securing, or any right conferring a priority of payment in respect of, any obligation of any party;
“ Engine ” means:
 
(i)	an engine (including QEC and engine transportation stand, if applicable) which becomes subject to this Agreement, and as more particularly described in Annex 1 to Appendix A of any Lease;	
 
(ii)	all substituted, renewed and replacement Parts at any particular time incorporated or installed in or on such engine in accordance with the terms and provisions of this Agreement; and	
 
(iii)	(Except with respect to Insurances) the Engine Technical Records relating thereto including in the case of (i) and (ii) any parts which, having been removed from such Engine, remain the property of Lessor pursuant to the terms and provisions of this Agreement but excluding any substitute or replacement made pursuant to the provisions of Clause 6.3 and references to the “Engine” shall be deemed to include any of the component parts of this definition (unless the context otherwise requires);	
“ Engine Heavy Maintenance ” means an Engine Shop Visit where the minimum workscope performed is as stated in the Lease;
“ Engine Shop Visit ” means the overhaul, refurbishment, restoration, repair, modification or inspection work carried out on an Engine by an Authorised Repairer involving separation of pairs of major flanges (other than for the purposes of transportation);
“ Engine Technical Records ” means all records, manuals and other documents which shall be maintained in English language (whether in paper form or in a computer/electronic readable form) relating to an Engine and any Part (i) provided to Lessee at Delivery (ii) listed in Section 2 of Schedule 4 to this Agreement; and/or (iii) required to be maintained by the Aviation Authority and/or the Maintenance Programme;
 
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“ Engine Warranty Agreement ” means the engine warranty agreement between Lessor, Lessee and Manufacturer with respect to an Engine;
“ Event of Default ” means any of the events referred to in Clause 19.2;
“ FAA” means the Federal Aviation Administration of the United States of America or any successor or replacement thereof relating to or dealing with civil aviation matters in the United States of America;
“ Final Delivery Date ” means, in respect of an Engine, the same as in the Lease relating to such Engine;
“ Flight Hour ” means each hour or part of an hour elapsing from a take-off to a landing of a Host Aircraft for the purpose of calculations under this Agreement measured in Flight Hours, such hours shall be calculated to two decimal places;
“ Force Majeure ” means acts of God or public enemy, civil war, insurrection or riot, fire, flood, explosion, earthquake, accident, epidemic, quarantine restriction, governmental priority or other action, allocation, regulation or order affecting directly or indirectly, an Engine, any Manufacturer, repairer, seller, Lessee, or Lessor of any materials or facilities, any strike or labour dispute causing cessation, slowdown or interruption of work (including any strike or labour dispute by Lessor’s workforce), inability after due and timely diligence to procure an Engine, equipment, data or materials from manufacturers, repairers, suppliers, any existing owner, seller, Lessor or Lessee in a timely manner, or any cause to the extent that such cause is beyond the control of Lessor whether above mentioned or not and whether or not similar to the foregoing;
“ Geneva Convention ” means the convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on the 19 June 1948 and any modification, alteration, amendment or restatement thereof;
“ Governing Law ” means the laws of the State of New York;
“ Hard Life Parts ” means Parts specified in the Maintenance Programme having an operational life limit in Flight Hours and/or Cycles the attainment of which requires removal of the Parts for inspection, testing, replacement, overhaul, modification or restoration;
“ Host Aircraft ” means an aircraft on which at any relevant time an Engine is installed;
“ Hourly Reserve ” means, in respect of an Engine, the sum stated in the Lease relating to such Engine as adjusted in accordance with Clause 4.2;
“ Indemnitees ” means Lessor, the Lender and each of their respective shareholders, affiliates, directors, officers, servants, agents and employees;
“ Insurances ” means any and all approved contracts or policies of insurance and/or reinsurance complying with industry endorsements AVN67B and, to the extent at any relevant time the Insurers have included the exclusions set forth in AVN2000 or its equivalents the limited write back provisions of AVN 2001 and AVN 2002 or such other best market practice prevailing from time to time required to be effected and maintained pursuant to the terms of this Agreement;
“ Insurers ” means any insurer and/or re-insurer of recognised international standing in a major aviation insurance market in respect of the Insurances;
 
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“ Interested Third Party ” means any party (other than Lessee) (i) who is the legal and/or beneficial owner of (a) any Host Aircraft or (b) any engine which is removed from any Host Aircraft to enable an Engine to be installed on such Host Aircraft, or (c) any part which is temporarily installed on an Engine pursuant to this Agreement, and/or (ii) for whose benefit any Encumbrance may from time to time exist over (a) any Host Aircraft, or (b) in any engine which is removed from a Host Aircraft to enable an Engine to be installed on such Host Aircraft or, (c) any part which is temporarily installed on an Engine pursuant to this Agreement and “Interested Third Parties” shall be construed accordingly;
“ Lease Period ” means, in respect of an Engine, the period from the Delivery Date until the later of (i) the Scheduled Expiry Date and (ii) the date of redelivery of the Engine in the Redelivery Condition unless Lessee exercises any option set forth in the Lease to continue leasing the Engine after the Scheduled Expiry Date, in which case it shall be the period from the Delivery Date until the later of (i) the Secondary Lease Period Expiry Date and (ii) the date of redelivery of the Engine in the Redelivery Condition;
“ Lease ” means any lease substantially in the form of Schedule 2 hereto which incorporates the terms of this Agreement;
“ Lender ” means any bank or financial institution or other provider of finance to Lessor as may be notified from time to time by Lessor to Lessee;
“ Lessee Documents ” means this Agreement, any Lease, Lessor’s Security (if any), any assignment other than by way of security, any Assignment of Insurances, any Sublease Assignment, Engine Warranty Agreement, the Deregistration Power of Attorney, the Process Agent Power of Attorney and any notices, consents, certificates and other documents and agreements to which Lessee is a party to be issued pursuant to any of the foregoing;
“ Lessee’s Country ” means Lessee’s country of incorporation and, if different, its country of tax residence, both as specified in the Lease;
“ Lessee’s Process Agent ” means Corporation Service Company having its registered place of business at 1133 Avenue of the Americas, New York, New York 10036;
“ Lessor’s Lien ” means any Encumbrance arising from Lessor’s acts, omissions or defaults;
“ Lessor’s Process Agent ” means Corporation Service Company having its registered place of business at 1133 Avenue of the Americas, New York, New York 10036;
“ Lessor’s Security ” means such letter of credit, guarantee or other form of security as Lessor may require under any Lease to secure the due performance by Lessee of its obligations;
“ Life Limited Parts ” means Parts on which there are ultimate life limits which parts must be removed and discarded before a certain time in Flight Hours and/or Cycles as specified by the Manufacturer;
“ LLP Reserve ” means, in respect of an Engine, the sum stated in the Lease relating to such Engine as adjusted in accordance with Clause 4.3;
“ Loss ” means losses, costs, expenses, payments, charges, currency exchange rate differentials, demands, liabilities, claims, actions, proceedings, penalties, fines, damages, judgments, orders or other sanctions;
“ Maintenance Programme ” means, in respect of each Engine, Lessee’s on wing maintenance programme as amended from time to time as permitted herein and approved in
 
44

writing by the Aviation Authority pursuant to which such Engine will be maintained while installed on a Host Aircraft and the maintenance planning documentation or other such reference document used by Lessee for shop maintenance;
“ Major Module ” means, in respect of each Engine a grouping of individual Modules, mini Modules or Parts from the same section of such Engine each of which is defined in the applicable Manufacturer’s overhaul/repair manual and as further described in the relevant Lease;
“ Major Module Heavy Maintenance ” means the work carried out by an Authorised Repairer to overhaul all of the individual Modules, mini Modules or Parts of a Major Module to restore performance to the highest standard specified in the applicable Manufacturer’s overhaul/repair manual for such Engine;
“ Manufacturer ” means, in respect of each Engine, the manufacturer of such Engine and all Parts thereof;
“ Module ” means an assembly of Parts which is the subject of separate record keeping in accordance with the applicable Maintenance Programme;
“ Operating Procedures ” means, in respect of each Engine, Lessee’s operating procedures in respect of such Engine as approved by the Aviation Authority prior to Delivery and from time to time thereafter;
“ Parts ” means all appliances, accessories, Modules, components and other items of equipment including without limitation any quick engine change units which may from time to time be installed on an Engine or any of the aforesaid in a manner complying with Clause 6.1 (d) and (e) and which, having been removed from an Engine, remain the property of Lessor but excluding any substitute or replacement made pursuant to Clause 6.3;
“ Permitted Lien ” means in respect of an Engine:
 
 	(a)	any Lessor’s Lien;	
 
 	(b)	any Encumbrance for Taxes either not yet assessed or, if assessed, not yet due and payable or being contested in good faith by appropriate proceedings (and for payment of which adequate reserves have been set aside) so long as any such proceedings or the continued existence of any such Encumbrance does not, in Lessor’s sole opinion, involve any material likelihood of the sale, forfeiture or loss of, or of any interest in, any Engine; and	
 
 	(c)	airport hangar keeper’s, mechanic’s, material men’s, supplier’s, maintenance contractor’s, repairer’s, carrier’s, employee’s or other similar possessory liens arising in the ordinary course of business, by statute or by operation of law in respect of obligations not yet due or which are being contested in good faith and by appropriate proceedings (and for the payment of which adequate reserves have been provided and/or when required in order to pursue such proceedings, an adequate bond has been provided) so long as any such proceedings or the continued existence of any such Encumbrance does not, in Lessor’s sole opinion involve any likelihood of the detention, seizure, forfeiture, sale or loss of, or of any material interest in, any Engine;	
“ Process Agent Power of Attorney ” means a power of attorney granted by Lessee in favour of Lessor substantially in the form of Schedule 6;
 
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“ Prohibited Jurisdiction ” means any country or jurisdiction, from time to time, (a) that is the subject of a Prohibition, or (b) in which, or for which, Lessee, Lessor or any Indemnitee is otherwise prohibited or restricted, under laws, regulations, sanctions or restrictions applicable to it or its business, from extending credit, transferring property or assets, engaging in or facilitating trade or other economic activity, or otherwise doing business;
“ Prohibited Person ” means any person the subject of a Prohibition;
“ Prohibition ” means in respect of any jurisdiction or person, any applicable law, regulation, order or directive which would render the operation, use or location of an Engine in such jurisdiction or by such person illegal and/or result in the imposition of civil or criminal sanctions against Lessee, Lessor or any Indemnitee including any applicable rules, regulations orders or directives administered by the Office of Foreign Assets Control of the United States Treasury Department;
“ Redelivery ” means redelivery of the Engine in the Redelivery Condition as confirmed by Lessor’s execution of the Redelivery Acceptance Receipt;
“ Redelivery Condition ” means in respect of an Engine, the condition specified by Clause 20, Schedule 4 and the Lease;
“ Redelivery Acceptance Certificate ” means a certificate substantially in the form set out in Appendix B to a Lease confirming acceptance by Lessor from Lessee of an Engine;
“ Redelivery Location ” means in respect of an Engine, the same as in the Lease relating to such Engine;
“ Relevant Event ” means any Event of Default or any event which, with the giving of notice or the lapse of time, would constitute an Event of Default;
“ Rent ” means, in respect of each Engine, the amount of the monthly rental payments payable by Lessee pursuant to Clause 3.1 and stated in the Lease relating to such Engine;
“ Scheduled Delivery Date ” means, in respect of an Engine, the same as in the Lease relating to such Engine;
“ Scheduled Expiry Date ” means, in respect of an Engine, the same as in the Lease relating to such Engine;
“ Sublease ” means any sublease of any Engine entered into by Lessee and any Sublessee with the prior approval of Lessor;
“ Sublessee ” means any duly authorised operator of an Engine other than Lessee approved from time to time by Lessor as a potential sublessee of any Engine and/or as listed in a Lease;
“ Sublease Assignment ” means, in respect of an Engine, an assignment, in form and content acceptable to Lessor, of Lessee’s rights, title and interest in, under and to any Sublease granted or to be granted by Lessee in favour of Lessor;
“ Taxes ” means all forms of taxation, levy, impost, duty or charge or fee of similar nature and whether imposed by a government entity and, shall include, without limitation, any value added, sales, turnover, trade profits, stamp duty, documentary, registration, withholding, retention and other such taxes together with all surcharges, fines, penalties, costs, charges and expenses payable in connection with any failure to pay or delay in paying any taxes and references to “tax”, “taxation” and “Taxation” throughout this Agreement shall be construed accordingly;
 
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“ Termination Date ” means, in respect of any Engine, the last day of the Lease Period relating thereto;
“ Termination Notice ” means a written notice issued by Lessor to Lessee pursuant to the provisions of Clause 19.3;
“ Total Loss ” means, in respect of any Engine, any of the following events with respect to such Engine:
 
 	(a)	the actual or constructive total loss of the Engine (including any damage to the Engine which results in an insurance settlement on the basis of a total loss, or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(d)	the Engine being destroyed, damaged beyond repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(e)	the requisition of title, or other compulsory acquisition, appropriation, expropriation, capture, seizure, deprivation, confiscation or detention for any reason (whether de jure or de facto) of the Engine by any government entity or other such competent authority, but excluding requisition for use or hire not involving requisition of title; or	
 
 	(f)	the hijacking, theft, condemnation, confiscation, seizure, capture, detention or requisition for use or hire of the Engine which deprives any party so permitted by this Agreement to have possession and/or use of the Engine for more than 60 days; and	
“ US Prime ” means a fluctuating rate equal to the rate of prime interest or base lending rate published from time to time in The Wall Street Journal.
 
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Schedule 1 - Conditions Precedent
Part A
Lessor’s obligation to lease any Engine to Lessee is conditional upon receipt by Lessor, in form and substance satisfactory to Lessor, not later than two (2) days prior to the Delivery Date of the first Engine of:
 
1.	Board and investment committee approval of Lessor;	
 
2.	Evidence that all necessary licenses, approvals, registrations and filings have been obtained or effected on an unconditional basis and remain in full force and effect;	
 
3.	Draft legal opinion of legal counsel to Lessee in Lessee’s Country and, if applicable, special FAA counsel’s opinion;	
 
4.	Draft certificate(s) of insurance/reinsurance and letter of undertaking from Lessee’s insurance brokers and each addressed to Lessor which comply with Clause 14; and	
 
5.	UCC financing statements and all other such financing statements, charges or other such filings, in due form for filing.	
Part B
Lessor’s obligation to lease any Engine is conditional upon receipt by Lessor, in form and substance satisfactory to Lessor, prior to Delivery of such Engine;
 
1.	Originals of each of the Lessee Documents including the Lease duly executed by Lessee or any other party thereto;	
 
2.	Originals of the certificate of insurance/reinsurance and letter of undertaking referred to in Clause 14;	
 
3.	Original legal opinion(s) referred to in Paragraph 3 of Part A of this Schedule 1;	
 
4.	Counterpart Co-operation Agreement, recognition of rights, waiver of interest or similar agreement in respect of the Host Aircraft if any on which the Engine shall be installed duly executed by Lessee and prior to installation on any Host Aircraft by all Interested Third Parties or a Confirming Opinion;	
 
5.	Original of the Engine Warranty Agreement, duly executed by Lessee;	
 
6.	Evidence satisfactory to Lessor that all applicable customs duties, if any, in respect of the Engine have been paid in full by Lessee (or, if the same are not yet payable, that arrangements satisfactory to Lessor have been made for the payment thereof by Lessee when same become payable);	
 
7.	Original of all documents comprising Lessor’s Security (if any) together with any and all agreements, notices and/or acknowledgements and/or supporting documentation in relation thereto, duly executed by Lessee and/or the issuing bank and/or any party;	
 
8.	Receipt of the Commitment Fee (if any), Deposit and the first Rent payment to be made by Lessee to Lessor under the Lease; and	
 
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9.	Evidence of approval of the Maintenance Programme by the DGAC;	
 
10.	Such information and inspection of documents relating to the Maintenance Programme and Operating Procedures as Lessor may reasonably require;	
 
11.	Original Deregistration Power of Attorney duly executed by Lessee before a notary public in Mexico; and	
 
12.	Original Process Agent Power of Attorney duly executed by Lessee before a notary public in Mexico.	
 
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Schedule 2 – Form of Lease 1 
THIS LEASE is made the [    ] day of [                    ] BETWEEN
 
(1)	ENGINE LEASE FINANCE CORPORATION (“Lessor”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V (“Lessee”).	
WHEREAS Lessor and Lessee have entered into an aircraft engine general terms agreement (the “GTA”) dated [                    ] and this is a Lease as defined therein.
IT IS HEREBY AGREED : 
 
1.	Lease	
By the execution and delivery of this Lease, Lessor agrees [subject to Lessor acquiring title to the Engine on the Delivery Date] to lease the Engine to Lessee and Lessee agrees to lease the Engine from Lessor upon the terms set out in the GTA (which are incorporated herein and form part hereof) and the more particular terms set out herein:

Engine:	  	Model:                         ; M.S.N:                         ;	
		
QEC:	  	as specified in Appendix A;	
		
Delivery Condition:	  	as specified in Appendix A;	
		
Delivery Location:	  	[                    ] or such other mutually agreed location as will minimise or exclude tax consequences adverse to Lessee and Lessor;	
		
Scheduled Delivery Date:	  	[                    ] or such other date as may be agreed between Lessor and Lessee [and on which date Lessor acquires title to the Engine];	
		
Final Delivery Date:	  	[                    ] or such other date as may be agreed between Lessor and Lessee;	
		
Agreed Value:	  	$[        ];	
		
Rent:	  	$[        ] payable on the [            ] of each month (subject to Clause 3);	
		
Deposit:	  	$[        ] payable on or before the Delivery Date and refundable to Lessee without interest (i) in accordance with clause 3.2(a)(iv) of the GTA within ten (10) Business Days of full discharge of all Lessee obligations in accordance with this Lease or (ii) within ten (10) Business Days of termination of this Lease where such termination occurs pursuant to clause 15.5 of the GTA;	

1  	ELF - If not a sale and leaseback, please consider insertion of provision for remedies following termination prior to the Delivery Date	
 
50

			
		
Lessor’s Security:	  	[                    ];	
		
Default Rate:	  	***** per annum over US Prime, compounded monthly and calculated on the basis of a 360 day year;	
		
Scheduled Expiry Date:	  	the date falling [                    ] months after the Delivery Date;	
		
Option Exercise Date:	  	the date (if any) on which Lessee exercises the option granted by Clause 2 by delivering notice to Lessor in accordance therewith;	
		
Primary Lease Period:	  	the period commencing on the Delivery Date and ending on the Scheduled Expiry Date;	
		
Secondary Lease Period:	  	the period to be agreed by Lessor and Lessee commencing on the Scheduled Expiry Date;	
		
Secondary Lease Period Expiry
Date:	  	the date scheduled as the last day of the Secondary Lease Period on the Option Exercise Date;	
		
Hourly Reserve:	  	subject to Clause 5 below, the applicable $ amount specified in Annex 1 hereto and adjustable in accordance with clause 4.2 of the GTA whether or not Lessee is obligated to pay Hourly Reserves;	
		
EHM Claim Cap:	  	[                    ];	
		
Level 1 ESV:	  	[                    ];	
		
Level 2 ESV:	  	[                    ];	
		
Engine Heavy Maintenance:	  	[                    ];	
		
LLP Reserve:	  	[                    ] per Cycle and adjustable in accordance with clause 4.3 of the GTA;	
		
Major Modules:	  	as specified in Annex 2;	
		
Minimum Flight Hours and Cycles
remaining on Redelivery:	  	not more than [                    ] Flight Hours and Cycles since new or last Engine Heavy Maintenance;	
		
Minimum EGT Margin at
Redelivery:	  	sufficient to achieve the balance of the last Engine Heavy Maintenance Life Limited Part build life remaining at Redelivery based upon Lessee’s historical performance loss in EGT margin in the preceding three (3) years of operation for engines of the same type as the Engine;	
		
Stub Life:	  	for each Life Limited Part is 7 % of the certified life limit for that Part;	
		
Utilisation Report:	  	the report set out in Appendix C;	
		
Redelivery Location:	  	[                    ] or such other location as Lessor and Lessee shall agree;	
		
Lessee’s Country:	  	Mexico.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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2.	Option	
Provided that no Relevant Event has occurred and is continuing on the Option Exercise Date or the Scheduled Expiry Date, the parties may opt to lease the Engine for the Secondary Lease Period. The option may be exercised by an unconditional notice to Lessor not later than 3 months prior to the Scheduled Expiry date. Once such notice has been given by Lessee and received by Lessor, it shall be irrevocable and shall oblige Lessee to lease the Engine for the Secondary Lease Period upon the terms of the GTA provided that Lessor has consented thereto which consent shall be at Lessor’s sole discretion.
 
3.	Rent Adjustment	
The Rent is based upon one month LIBOR and five year US$ Swap Rate as quoted to Lessor by Bank of America on [                    ] at [    ] % and [    ] % respectively. To the extent that the equivalent US$ Swap Rate and one month LIBOR on the Delivery Date are greater or lower than this, Lessor will adjust the Lease Factor accordingly and the Rent shall be calculated by reference to such adjusted Lease Factor and the Rent so calculated shall be fixed for the duration of the Primary Lease Period. Any such adjustment shall be notified by Lessor to Lessee and absent manifest error, the adjusted amount so calculated shall thereupon be the Rent.
 
4.	Redelivery Condition Compensation	
[SUBJECT TO SPECIFIC ENGINE MODEL/PROFILE]
 
5.	Subleasing	
Subject to the provisions of clause 8.2 of the GTA, Lessee may sublease the Engine to one or more airlines within Grupo TACA.
 
6.	Alternative Redelivery Provisions	
[Notwithstanding clause 20.2(a) of the GTA, Lessee shall not be obliged to perform a test cell run if the Engine has been removed from a Host Aircraft immediately prior to redelivery, provided that:-
 
 	(a)	Lessee provides to Lessor take-off trend monitoring data for each of the last 25 flights operated by the Engine immediately prior to redelivery; and	
 
 	(b)	such take-off trend monitoring data does not indicate that the Engine may not comply with the Redelivery Condition.	
If, in Lessor’s opinion (acting reasonably), a review of the take-off trend monitoring data indicates that the Engine may not meet the Redelivery Condition or, in Lessor’s opinion (acting reasonably), such take-off trend monitoring data is not an accurate gauge of the condition of the Engine, then Lessee shall perform or cause to be performed at Lessee’s sole cost and expense a full performance test cell run.]
 
7.	Additional Provisions	
[Lessor hereby confirms that any maintenance and repair performer or service agency licensed by the FAA or EASA to undertake maintenance work on the Engine and used by the Manufacturer to maintain the Engine under the FHA is hereby approved as an Authorised Repairer.]
 
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SIGNED for and on behalf of
Engine Lease Finance Corporation
By : 
Name :
Title :
in the presence of:
Name :
Occupation :
Address :
SIGNED for and on behalf of
Concesionaria Vuela Compañia de Aviación, S.A. de C.V.
By : 
Name :
Title :
in the presence of:
Name :
Occupation :
Address :
 
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Appendix A –Delivery Acceptance Certificate
Concesionaria Vuela Compañia de Aviación, S.A. de C.V. (“Lessee”) hereby acknowledges that on [                    ] at [    ] hours it accepted delivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated [                    ] (the “Lease”) made between Engine Lease Finance Corporation (“Lessor”) and Lessee and confirms that:-
 
(a)	at [Delivery Location] it has received from Lessor possession of one [engine model] , bearing manufacturer’s serial number [                    ], all parts attached thereto and thereon in a [new\serviceable] condition, as more particularly described in Annex 1;	
 
(b)	following inspection, it has accepted delivery of the Engine “as is where is”;	
 
(c)	the Module Flight Hours and Cycles since new or last Engine Heavy Maintenance, the Life Limited Parts Flight Hours and Cycles since new and the Hard Life Parts Flight Hours since new or last overhaul are as stated in Annex 2 and that such figures shall be used for the purpose of calculating any payments due to be made by Lessee at the time of Redelivery of the Engine to Lessor;	
 
(d)	the Engine and the Engine Technical Records as more particularly described in Annex 1 have been delivered to and accepted by Lessee on delivery date and are to Lessee’s full satisfaction and in accordance with the provisions of the Lease;	
 
(e)	the Lease Period commenced on the date of this Certificate and Lessee became obliged to pay to Lessor the amounts provided for in the Lease including, in particular, a Deposit of $[        ] and Rent of $[        ] per month;	
 
(f)	the Engine is insured in accordance with the terms of the Lease;	
 
(g)	all representations and warranties made by Lessee pursuant to the Lease remain and if made on this date, would be true and correct in all respects;	
 
(h)	no Relevant Event has occurred or will result from Delivery taking place; and	
 
(i)	it has obtained all required permits, authorisations and licences necessary to lease and operate the Engine pursuant to and in accordance with the Lease.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
Dated this [    ] day of [            ]
Signed for and on behalf of : Concesionaria Vuela Compañia de Aviación, S.A. de C.V

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
54

Annex 1 to Appendix A
Description of Engine
 
1.	Description	
 
1.1	Engine Type :                                                  [ETOPS:]	
1.2	Serial no.:	
1.3	Engine Certified Thrust Rating:	
1.4	QEC: as set out in Annex 2 to Appendix A	
1.5	Maintenance Programme reference : [                    ]	
 
2.	Condition	
The Engine shall be in the condition noted in the following documents, copies of which were delivered to Lessee on or before Delivery:-
 
2.1	Delivery Condition as noted in Annex 2 to this Appendix A;	
 
[2.2	Last Engine shop visit report;]	
[2.3	Aviation Authority airworthiness release certificate;]	
[2.4	Complete accessory listing;]	
[2.5	Airworthiness Directive status;]	
[2.6	Service Bulletin status report;]	
[2.7	Log book;]	
[2.8	QEC build specification;]	
[2.9	Export certificate of airworthiness;]	
[2.10	Configuration status report at manufacture;]	
[2.11	Trend monitoring data;]	
[2.12	Latest Engine run report;]	
[2.13	Latest test cell run report;]	
[2.14	Module log cards; and]	
[2.15	Serviceable tag.]	
Annex 2 to Appendix A
Delivery Condition

MODULE PROFILE	
Module No.	 	Description	 	Module Serial
No.	 	TSN	 	Module
TSEHM	 	Module Soft	 	Hours Limit
to Go	 	Module
CSEHM	 	Module Soft	 	Cycles Limit
to Go	
	
DISK PROFILE	
LLP No.	 	Description	 	P/N	 	S/N	 	TSN	 	Hrs Limit	 	Hrs to Go	 	CSN	 	Cycle Limit	 	Cycles to Go	

Hard Life Parts	
   	 	Description	 	P/N	 	S/N	 	TSN	 	TSO	 	TBO	 	T Remaining	
 
55

Appendix B – Redelivery Acceptance Certificate
Engine Lease Finance Corporation (“Lessor”) and Concesionaria Vuela Compañia de Aviación, S.A. de C.V. (“Lessee”) hereby acknowledge that on [    ] at [    ] hours the Lessor accepted Redelivery of the Engine (hereinafter described) pursuant to the terms of the Lease dated [                    ] (the “Lease”) made between Lessor and Lessee and confirm that at [Delivery Location] Lessor has received from Lessee possession of:-
 
(a)	one [engine model] , bearing manufacturer’s serial number [            ], all Parts attached thereto and thereon as more particularly described in Annex 1; and	
 
(b)	the Engine Technical Records as listed in Section 2 of Schedule 4 of the general terms agreement incorporated by reference into the Lease, including all manuals, technical records and historical information regarding the Engine and all Parts attached thereto and thereon;	
Lessor and Lessee also hereby acknowledge that:-
 
(c)	the Module Flight Hours and Cycles since new or last Engine Heavy Maintenance, the Life Limited Parts Flight Hours and Cycles since new and the Hard Life Parts Flight Hours since new or last overhaul are as stated in Annex 2 and that such figures shall be used for the purpose of calculating any payments due to be made by Lessee to Lessor in accordance with the Lease;	
 
(d)	the Engine and Engine Technical records are hereby accepted by Lessor subject to (i) the provisions of the Lease and (ii) correction by Lessee within [number of days] of the discrepancies specified in Annex 3 hereto and Lessee hereby undertakes to correct the discrepancies to the complete satisfaction of Lessor; and	
 
(e)	the leasing of the Engine by Lessor to Lessee pursuant to the terms of the Lease is hereby terminated without prejudice to Lessee’s continuing obligations under the terms of the Lease including, without limitation subparagraph (d) above.	
Words used herein with capital letters and not otherwise defined shall have the same meanings given to them in the Lease.
Dated this [    ] day of [            ]
Signed for and on behalf of :

Concesionaria Vuela Compañia	  		  	Engine Lease Finance Corporation	
de Aviación, S.A. de C.V.	  		  		
				
By:	 	 	  		  	 	
				
Name:	 	 	  		  	 	
				
Title:	 	 	  		  	 	
 
56

Annex 1 to Appendix B
 
21.	Description of Redelivery Engine	
 
1.	Description	
 
1.1	Engine Type :                                              [ETOPS:]	
1.2	Serial no.:	
1.3	Engine Certified Thrust Rating:	
1.4	QEC: as set out in Annex 2 to Appendix A	
1.5	Maintenance Programme reference : [                    ]	
 
2.	Condition	
At redelivery the Engine shall be in the condition noted in Annex 2 to this Appendix and in the Technical Records listed in Section 2 to Schedule 4 of the GTA
Annex 2 to Appendix B
Redelivery Condition

MODULE PROFILE	
Module
No.	 	Description	 	Module Serial
No.	 	TSN	 	Module
TSEHM	 	Module Soft	 	Hours Limit
to Go	 	Module
CSEHM	 	Module
Soft	 	Cycles Limit
to Go	

DISK PROFILE	
LLP No.	 	Description	 	P/N	 	S/N	 	TSN	 	Hrs Limit	 	Hrs to Go	 	CSN	 	Cycle Limit	 	Cycles to Go	

Hard Life Parts	
 	 	Description	 	P/N	 	S/N	 	TSN	 	TSO	 	TBO	 	T Remaining	
Annex 3 to Appendix B
Engine and Technical record discrepancies at Redelivery
 
57

Appendix C - Utilisation Report
[On Lessee’s headed notepaper]
ENGINE MONTHLY UTILISATION REPORT

TO:	  	ASSET AND DATABASE MANAGER	
	  	ENGINE LEASE FINANCE CORPORATION	
	  	SHANNON BUSINESS PARK,	
	  	SHANNON, CO. CLARE, IRELAND.	
	  	FACSIMILE NO. +353 61 361785	
		
FROM:	  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
ENGINE TYPE:	  	[                                     ]	
		
M.S.N.	  	[                                     ]	
		
REPORT DATE:	  	[                    ]	
Section 1 must be completed and returned within 10 days after the end of each calendar month and on the termination date.
Section 2 must be completed after each Engine’s Shop Visit for any reason.
SECTION 1
Date Installed
Aircraft Reg.
Aircraft owner:
Present wing/tail Location
T.S.N.
C.S.N.
Hrs Flown this mth
Cycles flown this mth
Thrust Rating this mth
SECTION 2
Date last shop visit
TSN at shop visit
CSN at shop visit
Cycles to next shop visit
Next limiting component
IMPORTANT NOTE
Attach listing of all modifications, Airworthiness Directives, service bulletins carried out during each Engine Shop Visit as it occurs. Also attach a copy of the Engine Shop Visit findings report and the latest revision to the Engine’s Life Limited Parts (disk) profile.
Signed:
Authorised Quality Assurance/Engineering Officer
 
58

Schedule 3 - Insurance Requirements 2 
 
1.	Lessee shall effect and maintain the following insurances:	
 
1.1	Aircraft third party insurance including passenger, baggage, cargo and mail, airline general third party legal liability, product liability and personal injury (libel, slander, wrongful eviction, etc.) liability coverage (in accordance with AV52C) and including Lessor and Lender as additional insureds in amounts satisfactory to Lessor but in no event less than ***** combined single limit (bodily injury/property damage) in respect of any one accident/occurrence;	
 
1.2	Hull “all risks” insurance whilst flying and on the ground (coverage to include all parts removed from the Engine from time to time and replaced by substitute parts) and to include the Engine while attached to an airframe or removed and not replaced and to include spares insurance (including transit) while the Engine is not attached to an airframe, on an agreed value basis in Dollars for not less than the Agreed Value at the time of placement or renewal, such policy to include a 50/50 clause (in accordance with the London underwriters agreement known as AVS 103);	
 
1.3	Hull war risks insurance on an agreed value basis in Dollars for not less than the Agreed Value at the time of placement or renewal covering the risks presently excluded from hull all risk policies by Lloyds Clause AVN 48(B) “War Hijacking and other Perils Exclusion Clauses (Aviation)” or similar clause, if applicable in the form and to the extent available from the insurance market, a 50/50 clause (in accordance with the London underwriters agreement AVS 103), spares coverage (including while in storage or transit while the Engine is not attached to an airframe) and coverage for confiscation by the state of registration for any airframe to which the Engine may be attached from time to time;	
 
1.4	All Risks Aviation Hull Deductible Insurance such policy shall insure the difference between the standard market deductible under the Hull All Risks Insurances and a self insured retention of *****;	
 
1.5	Search and Rescue Expense Insurance in an amount not less than ***** any one occurrence to the extent that such insurances reasonably obtainable in the airline insurance market.	
 
2.	The Insurances and each related broker’s certificate and letter of undertaking shall be in form and substance reasonably satisfactory to Lessor and shall and be with Insurers and shall:	
 
2.1	provide, as respects the additional insureds, that the Insurances shall not be invalidated by any action or inaction by Lessee regardless of any breach or violation by Lessee or any other of any of the additional insureds of any warranty, declaration or condition contained in each policy;	
 
2.2	provide for world-wide coverage (subject only to such geographical limits as may be imposed by the war and allied perils insurance or such other exceptions as are customary in the market from time to time or as the additional insureds may agree);	
 
2.3	provide that the Insurances shall not be invalidated, so far as the additional assureds are concerned, by any act or omission (including non-disclosure and misrepresentation) by Lessee or any other party and insure the interests of the	

2  	May be replaced by form of certificate of insurance if acceptable to ELF and its insurance advisor	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
59

 	additional insureds regardless of any breach or violation by Lessee or any other party of any term, condition or warranty contained in such policy, provided that the relevant additional insureds have not caused, contributed to or knowingly condoned the said act or omission;	
 
2.4	in respect of liability insurances, provide by means of a severability of interests/cross-liability clause that all the provisions thereof, except the limits of liability, shall operate to give each additional insured the same protection as if there was a separate policy issued to each additional insured.	
 
60

Schedule 4 – Redelivery Condition
Section 1: Operating Condition at Redelivery
To comply with the Redelivery Condition, the Engine shall:-:
 
1.	in all respects be in a condition that fully complies with all the terms of this Agreement and the obligations of Lessee hereunder;	
 
2.	be free and clear of all Encumbrances (except Lessor Liens) and shall have installed thereon the Parts installed at the commencement of the Lease Period or replacements therefor installed in accordance with the provisions of Clause 6.3 of the GTA provided that title thereto is vested in Lessor;	
 
3.	be fully serviceable and available for immediate use in ordinary commercial airlines operations;	
 
4.	be in as good condition as at the commencement of the Lease Period, normal wear and tear and changes or alterations properly made by Lessee as permitted under this Agreement excepted and any performance deterioration beyond Manufacturers’ stipulated tolerances shall have been corrected;	
 
5.	be free of all deferred or carry-over maintenance items, including pilot log book reports and defects requiring repetitive inspections (other than Airworthiness Directives or Service Bulletins requiring the same);	
 
6.	have performed on a terminating action basis (if terminating action is available) all Airworthiness Directives requiring completion within six months after the end of the Lease Period;	
 
7.	have installed on it all applicable Manufacturers’ service bulletin kits received free of charge by Lessee in respect of the Engine, and if not installed, such kits shall be delivered free of charge to Lessor with the Engine;	
 
8.	have not less than the minimum number of Flight Hours and Cycles specified in the Lease remaining to its next scheduled shop visit for Engine Heavy Maintenance. The time between Engine Heavy Maintenance shall be determined in Flight Hours or Cycles (whichever is the more limiting) by calculating the lesser of (1) the mean time in Flight Hours and Cycles between Engine Heavy Maintenance for similar engines in Lessee’s fleet operated at the same thrust rating as the Engine which have undergone at least two shop visits for Engine Heavy Maintenance or (2) applicable Manufacturer’s published data for similar operational conditions;	
 
9.	have at least the number of Flight Hours and Cycles specified in the Lease remaining to scheduled removal on all Life Limited Parts and Hard Life Parts;	
 
10.	have all QEC/EBU rotable components delivered with the Engine (if any) redelivered in the state specified in the Lease since scheduled overhaul;	
 
11.	have the minimum available EGT margin specified in the Lease and as determined by the test cell performance run referred to in Clause 20.2;	
 
12.	be configured for a certified thrust rating not less than at Delivery;	
 
13.	have corrective action taken, if necessary to ensure that oil consumption is within the limit set forth in the Maintenance Manual.	
 
61

 
Section 2: Engine Technical Records at Redelivery
The following documents shall be furnished with the Engine together with the original Engine Technical Records in a current, up-to-date and correct status in accordance with the provisions of this Agreement.
 
1.	Airworthiness Directives Documentation	
 
 	(a)	A single, complete and current status list of the AD and mandatory Aviation Authority (and FAA and/or EASA if applicable) regulations applicable to the Engine model. This list shall be provided in a format acceptable to Lessor and shall include:	
 
 	(i)	A.D. and revision number;	
 
 	(ii)	A.D. title;	
 
 	(iii)	Specification whether the AD is applicable, terminated or repetitive and stated means by which compliance was accomplished (e.g. modified, repaired, inspected);	
 
 	(iv)	Date of accomplishment and\or of last maintenance accomplishment if repetitive and state next “inspection due date/time”;	
 
 	(v)	Manufacturers’ Service Bulletin references, engineering documentation references and cross references where appropriate;	
 
 	(vi)	Name and number of the internal maintenance form or work order used to document accomplishment.	
The list shall be typed, certified and signed by an authorised quality assurance representative in compliance with the applicable regulatory body of Lessee or by Lessee’s Authorised Repairer quality assurance inspector.
 
 	(b)	Legible copies of the work instruction/completion documents that accomplish each AD. If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and the mechanic’s/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the AD number and company authorisation which covered the AD.	
 
 	(c)	Exemptions or deviations granted by the FAA and/or EASA (or equivalent) to Lessee on AD compliance, including copy of exemption request.	
 
2.	Engineering Documentation	
 
 	(a)	A single, current master list of all service bulletins applicable to the Engine type and an associated list indicating compliance with applicable service bulletins. Such list shall identify any and all service bulletins required to comply with the Host Aircraft extended range requirements;	
 
 	(b)	One copy of all non-Manufacturer, non-FAA and non-EASA approved repairs or alternatives;	
 
 	(c)	Latest amendment to the Maintenance Programme.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
62

3.	One copy of the following individual Engine Records	
 
 	(a)	A certified non incident or accident statement and/or incident reports and major damage reports, if any;	
 
 	(b)	FAA Form 8130-3 and serviceable tag or return to service certificate completed by an authorised inspector of Lessee or Lessee’s Authorised Repairer;	
 
 	(c)	Last test cell run report for the Engine;	
 
 	(d)	Borescope history for current installation for the Engine including video thereof if available;	
 
 	(e)	Latest available Engine trend monitoring report for a minimum period of three months prior to removal for Redelivery;	
 
 	(f)	Life Limited Parts data including full and substantiated traceability back to birth for any replacement LLP, such substantiation to include but not be limited to (i) on-logs for each previous installation of such LLP showing the then TSN/CSN of both the host engine and the LLP; (ii) off-logs for each previous removal of such LLP showing the then TSN/CSN of both the host engine and the LLP; confirmation of all thrust ratings such LLP previously operated at; (iv) FAA 8130-3 or EASA Form 1 certification for such LLP; and (v) where such replacement LLP is not new at the time of installation on the Engine a non-incident statement for such LLP;	
 
 	(g)	All issued FAA Form 337’s and 8130-3’s or EASA Form 1’s together with detailed Authorised Repairer Engine Shop Visit reports related to each Engine Shop Visit during the Lease Period including updated complete Engine data submittal or equivalent issued by the Authorised Repairer which shall include the TSN, CSN and TSO of the HPT airfoils;	
 
 	(h)	Engine logbook and Module logcards or listing of status of Engine Modules, Hard Life Parts, Life Limited Parts and accessories by description, part number, serial number, TSN, CSN, TSO, CSO, TSLSV, CSLSV, time remaining to scheduled removal, inspection, bench test, overhaul (as appropriate);	
 
 	(i)	Accessory and QEC/EBU to the extent applicable listing and status;	
 
 	(j)	Export certificate of airworthiness. If Lessee’s Aviation Authority does not normally issue such a certificate, Lessor will accept an equivalent letter from the Aviation Authority confirming that the Engine complies in all respects with the requirements in force at that time if it were installed on a Host Aircraft which itself qualifies for an export certificate of airworthiness;	
 
 	(k)	Any SOAP analysis performed pursuant to Clause 20.2.	
 
63

Schedule 5 – Form of Deregistration Power of Attorney
[PODER ESPECIAL IRREVOCABLE EN FAVOR DE ENGINE LEASE FINANCE CORPORATION A SER OTORGADO ANTE NOTARIO PUBLICO MEXICANO]
En la Ciudad de         , a los     días del mes de     de dos mil seis, ante mí             , titular de la Notaría Pública Número             de             , comparecieron los señores          en su carácter de apoderados jurídicos generales de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE (la “Sociedad”) quienes manifestaron:
Que ocurren a otorgar y conferir MANDATO ESPECIAL IRREVOCABLE en los siguientes términos:
PODER ESPECIAL IRREVOCABLE LIMITADO PARA CANCELACIÓN DE REGISTRO Y EXPORTACIÓN DE MOTORES EN FAVOR DE ENGINE LEASE FINANCE CORPORATION PARA QUE EL APODERADO LO EJERZA EN NOMBRE Y EN REPRESENTACION DE LA SOCIEDAD PODERDANTE CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE
CLÁUSULAS
PRIMERA. Los señores             en su calidad de REPRESENTANTES LEGALES de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE otorga en favor de ENGINE LEASE FINANCE CORPORATION, o cualquier apoderado de ésta o quien ésta designe, (el “ Apoderado ”), PODER ESPECIAL CON CARÁCTER DE IRREVOCABLE por otorgarse en cumplimiento y como condición de y sujeto a una obligación bilateral conforme al Aircraft Engine Lease General Terms Agreement celebrado entre Engine Lease Finance Corporation y la Sociedad, de fecha                      (el “ Contrato ”), y conforme a lo previsto en el Artículo 2596 del Código Civil Federal y así como sus correlativos de los Códigos Civiles para el Distrito Federal y los demás Estados de la República Mexicana, con facultades generales para PLEITOS Y COBRANZAS y para ACTOS DE ADMINISTRACIÓN, en los términos de los dos primeros párrafos del Artículo 2554 y del Artículo 2587 del Código Civil Federal así como sus correlativos de los Códigos Civiles para el Distrito Federal y los demás Estados de la República Mexicana, limitado en cuanto a su objeto para que, en nombre y representación de la Sociedad, conjunta o separadamente solicite ante la Dirección General de Aeronáutica Civil y el Registro Aeronáutico Mexicano, ambas dependientes de la Secretaría de Comunicaciones y Transportes, ante la Secretaría de Hacienda y Crédito Público, el Servicio de Administración Tributaria o ante cualquier otra autoridad administrativa o judicial en México o en cualquier otro país, o ante cualquier agente aduanal, la cancelación del registro de los motores (los “ Motores ”) descritos en el Lease (el “ Arrendamiento ”) de conformidad con el Contrato y/o la exportación de dichos Motores, y tome todas las acciones y realice todos los trámites que sean necesarios o convenientes en relación con dicha cancelación y/o exportación y/o trámites. En el ejercicio de sus facultades, cada uno de los apoderados estará facultado para delegar total o parcialmente dichas facultades y revocar tales delegaciones, en el entendido además, que cualesquier acto desempeñado conforme a los poderes aquí otorgados serán vinculantes entre la Sociedad y cualesquiera de dichos apoderados delegados, en los mismos términos que si éste poder hubiese sido otrogado directamente a dichos apoderados delegados.
Los términos con mayúscula inicial utilizados en este poder y no definidos en el mismo, tendrán el significado que se les atribuye en el Contrato.
 
64

SEGUNDA. Los actos que el APODERADO JURÍDICO ESPECIAL ENGINE LEASE FINANCE CORPORATION o sus apoderados delegados lleve a cabo y ejecute en el desempeño de este MANDATO dentro de las facultades que se les confieren y otorgan, en nombre y representación de la Sociedad, serán legalmente vinculantes para la Sociedad.
[ENGLISH TRANSLATION FOR INFORMATION PURPOSES ONLY]
SPECIAL IRREVOCABLE POWER-OF-ATTORNEY IN FAVOR OF ENGINE LEASE FINANCE CORPORATION TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC
In the City of                     , on the      th day of the month of             , 200    , before me,             , Notary Public No.     , of                     , appeared Messrs.              and                     , in their capacity of general attorneys-in-fact of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANONIMA DE CAPITAL VARIABLE (the “Company”), and declared:
That he appears to deliver and grant SPECIAL IRREVOCABLE MANDATE in the following terms:
SPECIAL IRREVOCABLE LIMITED POWER-OF-ATTORNEY FOR DEREGISTRATION AND EXPORT OF ENGINE IN FAVOR OF ENGINE LEASE FINANCE CORPORATION TO BE EXERCISED ON BEHALF OF THE GRANTOR OF SAID POWER CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANONIMA DE CAPITAL VARIABLE.
CLAUSES
FIRST. Messrs.              and              in their capacity as LEGAL REPRESENTATIVES of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANONIMA DE CAPITAL VARIABLE grant in favor of ENGINE LEASE FINANCE CORPORATION, a SPECIAL IRREVOCABLE POWER-OF-ATTORNEY, or any designee or appointee thereof, it being granted in compliance with and subject to the provisions of a bilateral obligation and it being a condition provided under the Aircraft Engine Lease General Terms Agreement between Engine Lease Finance Corporation and the Company dated                      (the “ Agreement ”), and in accordance with the provisions of Article 2596 of the Federal Civil Code as well as its correlative Articles in the Civil Codes for the Federal District and for the other States of the Mexican Republic, with general authority for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, in terms of the first two paragraphs of Article 2554 and Article 2587 of the Federal Civil Code as well as its correlative Articles in the Civil Codes for the Federal District and for the other States of the Mexican Republic, limited with respect to its purpose and scope so that it may request before the General Bureau of Civil Aviation ( Dirección General de Aeronáutica Civil ), the Mexican Aeronautic Registry ( Registro Aeronáutico Mexicano ), both depending from the Ministry of Communications and Transportation ( Secretaría de Comunicaciones y Transportes ), or before the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público ), the Revenue Administration Service ( Servicio de Administración Tributaria ) or before any other administrative or judicial authority in Mexico or in any other country, or before any customs broker ( agente aduanal ), the cancellation of the registration of the engine(s) (the “ Engine(s) ”) described in the applicable Lease (the “ Lease ”), pursuant to and in accordance with the Agreement and/or the exportation of said Engine(s), and take all necessary action and carry out all the filings that are necessary or convenient with respect to such cancellation and/or exportation. In the exercise of its authority, each of the attorneys-
 
65

in-fact shall be authorized to delegate totally or partially such authorities and to revoke such delegations, provided further that any action taken pursuant to the powers granted hereunder shall be binding upon the Company and any such delegate attorneys, in the same terms and creating the same legal relationship as if this power had been granted thereto directly by the Company to each such attorney.
Terms used as defined herein and not otherwise defined shall have the meaning ascribed thereto in the Agreement.
SECOND. Any acts carried out and executed by the SPECIAL ATTORNEY-IN-FACT ENGINE LEASE FINANCE CORPORATION or any of its delegate attorneys in the performance of this mandate and within the authorities granted and conferred hereunder in the name and representation of the Company, shall be binding on the Company.
 
66

Schedule 6 – Form of Process Agent Power of Attorney
[PODER ESPECIAL IRREVOCABLE A SER OTORGADO ANTE NOTARIO PUBLICO MEXICANO]
UNICA.- “CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN”, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE (la “ Sociedad ” ) , representada en este acto por los señores             , en cumplimiento de sus obligaciones conforme al Aircraft Engine Lease General Terms Agreement (el “ Contrato ” ) de fecha              celebrado entre la Sociedad y Engine Lease Finance Corporation en este acto y por el presente instrumento otorga y confiere a favor de “ CORPORATION SERVICE COMPANY” , sus empleados, funcionarios y apoderados (conjuntamente el “ Agente de Proceso ”), con oficinas ubicadas en esta fecha en 1133 (mil ciento treinta y tres) Avenue of the Americas, Suite 3100 (tres mil cien), New York, NY 10036 (diez mil treinta y seis), Estados Unidos de América, o cualesquier otra oficina o domicilio que pueda notificar a la Sociedad, un poder especial e irrevocable para pleitos y cobranzas, en términos del primer y cuarto párrafos del Artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil del Distrito Federal y sus artículos correlativos en el Código Civil Federal y los Códigos Civiles de las entidades federativas de los Estados Unidos Mexicanos. El Agente de Proceso estará facultado para actuar como su apoderado en nombre y representación de la Sociedad, exclusivamente para recibir cualquier emplazamiento en relación con cualquier demanda o procedimiento arbitral o administrativo que se origine de o en conexión con el Contrato o cualquier otro documento relacionado con el Contrato del cual la Sociedad sea parte.
El poder que se confiere en este acto tiene el carácter de irrevocable en los términos del Artículo 2596 (dos mil quinientos noventa y seis) del Código Civil del Distrito Federal y sus artículos correlativos en el Código Civil Federal y los Códigos Civiles de las entidades federativas de los Estados Unidos Mexicanos, e virtud de que se otorga en cumplimiento de una obligación bilateral, una condición y medio para que la Sociedad cumpla con sus obligaciones conforme al el Contrato.
[ENGLISH TRANSLATION FOR INFORMATION PURPOSES ONLY]
SPECIAL IRREVOCABLE POWER-OF-ATTORNEY TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC
SOLE.- “ CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANONIMA DE CAPITAL VARIABLE (the “ Company ” ), respresented hereby by Messrs.              and     , in compliance of a bilateral obligation and it being a condition provided under the Aircraft Engine Lease General Terms Agreement (the “ Agreement ”) between Engine Lease Finance Corporation and the Company dated                     , hereby grants in favor of “ CORPORATION SERVICE COMPANY” , its officers, employees and attorneys (jointly the “ Process Agent ”) with offices at 1133 Avenue of the Americas, Suite 3100, New York, NY 10036, United States of America and any other offices or addresses it my indicate in writing to the Company, a special power of attorney for lawsuits and collections in accordance with the provisions of the first and third paragraphs of article 2554 of the Federal Civil Code as well as its correlative Articles in the Civil Codes for the Federal District and for the other States of the United Mexican States. The Process Agent is authorized to act as attorney in name and representation of the Company solely to receive any notice of lawsuit or any other judicial, arbitration or administrative proceeding originated in respect of or related to the Agreement or any other document related to the Agreement to which the Company is a party.
 
67

This power is granted in accordance with the provisions of Article 2596 of the Federal Civil Code as well as its correlative Articles in the Civil Codes for the Federal District and for the other States of the United Mexican States as it is being granted in compliance of a bilateral obligation, a condition and as a means for compliance by the Company of its obligations under the Agreement
 
68

IN WITNESS whereof this Agreement has been signed on behalf of the parties hereto the day and year first above written.

ENGINE LEASE FINANCE CORPORATION	
		
By:	 	/s/ Tom Barrett	
Name:	 	Tom Barrett	
Title:	 	Executive Vice President Chief Financial, Administrative Officer	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Alfonso Ascencio Triujeque	
Title:	 	General Counsel	
To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer of possession of any counterpart other than the original counterpart which shall be identified as the counterpart which has been marked “Original “on the signature page hereof.
 
69

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.08
AEROMANTENIMIENTO, S.A.
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.
d/b/a VOLARIS
AIRCRAFT REPAIR AND
MAINTENANCE SERVICE
AGREEMENT

AIRCRAFT REPAIR AND MAINTENANCE SERVICE AGREEMENT
This AIRCRAFT REPAIR AND MAINTENANCE SERVICE AGREEMENT (hereinafter the “Agreement”) dated as of March 6, 2007 is entered into by AEROMANTENIMIENTO, S.A, a sociedad anónima organized under the laws of El Salvador, (hereinafter referred to as “Aeroman”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. d/b/a VOLARIS , a sociedad anónima organized under the laws of Mexico (hereinafter referred to as the “Customer”).
WITNESSETH:
WHEREAS, Aeroman maintains and operates a licensed facility at El Salvador International Airport for the inspection, maintenance, repair, overhaul and modification of jet aircraft and components; and
WHEREAS, Customer has requested, and Aeroman has agreed to perform, certain inspection, maintenance, repair and overhaul services on Customer’s Aircraft, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the Parties hereby agree as follows:
 
1.	DEFINITIONS	
As used herein, the following terms shall have the following meanings:
“Additional Services” shall mean any additional services that are not included in a Workscope and are mutually agreed by the parties.
“Agreement”, “herein”, “hereof”, “hereunder” and like terms shall refer to this Aircraft Repair and Maintenance Service Agreement, as the same may be amended and/or supplemented from time to time, together with the Annexes hereto.
“Aircraft” shall mean any aircraft owned, leased and/or operated by the Customer on which Aeroman performs Services in accordance with this Agreement
“Airworthiness Directive/AD” shall mean a modification or inspection to the Aircraft and/or Components classified as compulsory by the DGAC/FAA.
“Annexes” shall mean any of Annex A, Annex B, Annex C and each Annex D. 
“Approved Vendor List” shall mean Customer’s approved vendor list, as provided by Customer in writing from time to time.
“C-Check” shall mean Services consisting of a number of specific Task Cards, as more particularly described in each Annex D to be executed by the Parties from time to time for a specific Aircraft.
“Claims” shall mean any and all liabilities, losses, damages, demands, fines, penalties, and claims of any kind whatsoever, including without limitation all costs, expenses and reasonable attorneys’ fees incidental thereto (included but not limited to reasonable attorneys’ fees incurred by an Aeroman Indemnitee or a Customer Indemnitee, as the case may be, in establishing its right to indemnification pursuant to Article 10 of this Agreement).
“Component” means any Rotable or non-expendable repairable part or combination of parts or assembly that is part of the Aircraft.

“Consumable or Expendable” means any part that is not a Rotable (including, without limitation, major and minor structural sub-components, seals, gaskets, fittings, bushings and general hardware) for which no authorized Repair procedure exists, or for which cost of Repair would normally exceed replacement cost.
“Customer’s Maintenance Program” shall mean Customer’s DGAC/FAA approved aircraft maintenance schedule and program, and supplementary inspections and future revisions or versions, applicable to the Aircraft all of which are described in the MPM.
“Day” shall mean a calendar day of twenty-four (24) hours.
“Delivery” shall mean the tender of delivery of an Aircraft by Customer to Aeroman at the Aeroman Facility for the performance of Services thereon.
“Delivery Receipt” shall mean the receipt executed by the parties acknowledging Delivery of the Aircraft to Aeroman at the Aeroman Facility.
“Designated Engineering Representative (DER)” shall mean a Designated Engineering Representative under the rules and regulations of the Federal Aviation Administration of the United States of America.
“DGAC” shall mean the Dirección General de Aeronáutica Civil, Secretaría de Comunicaciones y Transportes of the United Mexican States or its successor.
“Documentation” shall have the meaning set forth in Section 2.2.
“Engine or Engines” shall mean an International Aero Engines V-2500, owned or leased and operated by Customer and installed on an Aircraft.
“Estimated TAT” shall have the meaning set forth in Section 4 of this Agreement.
“Extended Term” shall have the meaning set forth in Section 2.5 of this Agreement
“FAA” means the Federal Aviation Administration of the United States of America or its successor.
“Fixed Price” means the fixed price set forth in each Annex C, applicable to the Services to be performed pursuant to the list of routine Task Cards specified in each Annex D.
“Facility” or “Aeroman Facility” means the aircraft maintenance facility operated by Aeroman located at El Salvador International Airport.
“FARS” shall mean the Federal Aviation Regulations and any and all regulations promulgated by the FAA or any predecessor or successor agency, as set out in Title 14 of the Code of Federal Regulations of the United States, as from time to time in effect.
“Handling Fee” shall have the meaning set forth in Annex A.
“Hard Time Items” shall mean such time-controlled Rotables which have a definite potential for reuse through inspection, Overhaul, Repair or calibration.
“Indemnitee” shall have the meaning set forth in Section 10.1 of this Agreement.
“Initial Term” shall have the meaning set forth in Section 2.5 of this Agreement
“Labor Rate” shall have the meaning set forth in Annex A.
 
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“Maintenance Planning Document (MPD)” shall mean the Maintenance Planning Document as defined by the OEM.
“Materials” shall mean Rotables and Expendables.
“MPM” shall mean FAA/DGAC -approved Customer’s Maintenance Procedures Manual which outlines Customer’s maintenance policies and procedures.
“OEM” shall mean for any Part or Component the original equipment manufacturer of such Part or Component.
“Operations Specifications” shall mean Customer’s DGAC/FAA-issued operations specifications applicable to the Aircraft.
“Outside Services” shall mean any Services provided by third parties or subcontractors in accordance herewith.
“Overhaul” shall mean a restoration process necessary to return Components or Parts to the highest standard specified in the relevant manual.
“Part” shall mean any part of an Aircraft
“Parties” shall mean Customer and Aeroman.
“Redelivery” shall mean the tender for redelivery of an Aircraft to Customer by Aeroman in accordance with Section 8 of this Agreement after the performance (or cancellation) of Services thereon.
“Redelivery Receipt” shall mean the Redelivery Receipt executed by the Parties acknowledging Redelivery.
“Repair” shall mean the rectification of specific discrepancies in Aircraft, Parts or Components or the restoration of Aircraft, Parts or Components to a serviceable airworthy condition.
“Representative” shall mean the representative of Customer, designated in writing by Customer, which will carry out on Customer’s behalf any function as more particularly described in this Agreement or its successor/replacement as notified in writing by Customer to Aeroman.
“Rotable” shall mean a part that is renewable or time-controlled on a unit basis, identified by a serial number, with a definite potential for reuse through inspection, overhaul, repair, or calibration, including, without limitation, life-limited parts.
“Secondary Non-Routine Finding” shall mean a non-routine discrepancy finding during the performance of the Services or rectification not associated with the performance of the routine task card being performed as described in Annex D and that it would not be discovered due to access status or configuration of the Aircraft.
“Services” shall mean preventive maintenance, schedule and unscheduled maintenance and testing performed on Aircraft pursuant to this Agreement. Services shall include the Workscope, Additional Services and Outside Services.
“Service Bulletin” shall mean those technical documents issued by manufacturers which describe changes to Materials or configurations of products which may, at the option of Customer, be incorporated into the Services.
 
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“Significant Non-Routine Work” shall mean either (i) a single major non-routine work that by itself impacts the TAT or the critical path sequence resulting in a late Redelivery, or (ii) any non-routine work which exceeds more than ***** of the agreed labor applicable to the relevant Workscope.
“Special Tooling” shall mean any tooling not required to perform the Services described in Annex D, or any other tooling not commonly used by Aeroman.
“Turn Around Time” or “TAT”: shall mean the number of Days in the period commencing on the next regularly scheduled work shift following the Delivery of an Aircraft and ending on the Redelivery thereof. The TAT shall be the Estimated TAT, as the same may be extended pursuant to Section 4 of this Agreement.
“Term” shall have the meaning set forth in Section 2.5 of this Agreement
“Time and Material” shall mean the invoicing of Services not included in a Fixed Price based on a) the number of labor hours chargeable by Aeroman for such Services times the Labor Rate, b) Materials at its catalog price plus the Handling Fee, and c) Outside Services at their actual cost to Aeroman plus the Handling Fee.
“Task Cards” shall mean group of written approved maintenance instruction and procedures for the servicing, inspection, testing or repair of the Aircraft, Parts and/or Components.
“ Workscope ” shall mean the Services to be performed by Aeroman on a particular Aircraft (including but not limited to the Task Cards to be listed on each Annex D), which are described on an Aircraft Workscope Form substantially in the form of Annex C to this Agreement, which shall be signed by the Parties on or prior to Delivery of an Aircraft to the Aeroman Facility.
 
2.	SCOPE OF AGREEMENT, SERVICES, TERM AND TERMINATION	
2.1 SUBJECT AIRCRAFT, SCHEDULING AND WORKSCOPE . Aeroman shall provide Customer with Services for Aircraft designated by Customer from time to time subject to the following:
2.1.1 SCHEDULING . Aeroman agrees to provide to Customer the Services at the Aeroman Facility pursuant to the schedules to be agreed by Aeroman and Customer as set forth herein. Aeroman hereby acknowledges that as of the Effective Date, it has received the schedule of Aircraft to be delivered by Customer for the period of time commencing on January 1 st , 2007 and ending on December 31, 2007. No later than i) June 30 th of each year, beginning in 2007, Customer will provide Aeroman with the schedule of Aircraft to be delivered to Aeroman during the period of time commencing on January 1, and ending on June 30, of the following calendar year, and (ii) December 31 st of each year, beginning in 2007, Customer will provide Aeroman with the schedule of Aircraft to be delivered to Aeroman during the period of time commencing on July 1 st , and ending on December 31 st , of the following calendar year. Within thirty (30) days from receipt of the applicable schedule, Customer and Aeroman will mutually agree on the final schedule for such applicable six (6) month period, which will include the number and type of C-Checks, Fixed Price for each “C” Check” as mutually agreed by both Parties, and related Estimated TATs. The mutually agreed schedule and applicable Fixed Prices for such six month period shall be set forth in a written instrument in the form of Annex B hereto, which will be executed by both Parties. Customer reserves the right to amend the schedule from time to time, which may include changing the specific aircraft and check type to be performed. Except in the event of cancellations due to disagreements between the Parties with respect to the applicable Fixed Price, any cancellation with respect to the mutually agreed schedule without a prior one hundred eighty (180) days written notice will cause the Customer to pay to Aeroman as liquidated damages an amount calculated in accordance with the following formula:
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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where “ ***** ” is the number of days prior to the relevant scheduled delivery date and when the written notice is made by Customer.
Under no circumstances and notwithstanding anything to the contrary in this Section 2.1.1 or anywhere else in the Agreement, shall the liquidated damages described above exceed ***** per calendar year.
2.1.2 WORKSCOPE . The Services to be performed on each Aircraft delivered to Aeroman shall be described in a Workscope executed by the Parties prior to Delivery. Customer shall deliver to Aeroman its proposed Workscope for each Aircraft no later than thirty (30) days prior to the scheduled day of Delivery of the Aircraft to the Aeroman Facility. All changes to the Workscope will be provided to Aeroman no later than seven (7) days prior to the Delivery date unless such change is a safety of flight issue related to the Aircraft or otherwise agreed to between the Parties, subject to the availability of the required materials.
2.2 DOCUMENTATION . Customer shall, at its sole cost and expense, deliver or cause to be delivered, the Aircraft to Aeroman, at the Aeroman Facility, together with all current technical data, manuals, work sheets, Work Cards, and structural repair manuals and all Airworthiness Directives, Service Bulletins, all applicable and necessary legal documentation, manuals and technical documents, and any modifications and amendments thereto, including, but not limited to, the Customer’s Aircraft Maintenance Manual (“AMM”), the Illustrated Parts Catalog (“IPC”), the Structural Repair Manual (“SRM”), the Wiring Diagram Manual (“WDM”), the Minimum Equipment List (“MEL”), and any and all engineering orders and MPM, other published technical data that is applicable to Customer’s Aircraft and is necessary for Aeroman to perform the Services hereunder and any modifications and amendments thereto (the “Documentation”).
2.3 SERVICES . The Workscope shall be performed on the Aircraft in accordance with the standards set forth in this Agreement and Customer’s or its Representative’s requirements and instructions. Aeroman shall supply all necessary labor for the performance of such Workscope and may, pursuant to the terms and conditions set forth in Section 3.5.3 below, supply certain materials, tools not provided by Customer, which are necessary for the performance of such Workscope.
2.3.1 Aeroman agrees to provide adequate space to store all Customer furnished material in accordance with the MPM. If requested by Customer, Aeroman will provide an inventory report outlining all Customer material located at the Aeroman Facility.
2.3.2 Aeroman agrees to provide dedicated materials support specialist(s) for Customer’s heavy maintenance line. This person(s) will be available twenty four (24) hours a day, seven (7) days a week to address the material needs of the heavy maintenance line.
2.4 ADDITIONAL SERVICES . Any Additional Services on an Aircraft requested by Customer shall be mutually agreed between Customer and Aeroman
2.5 TERM AND TERMINATION . The term of this Agreement shall commence on the date first written hereinabove (the “Effective Date”) and shall be in full force and effect for a period of ten (10) years (the “Initial Term”). This Agreement may be extended for three (3) subsequent, additional periods of five (5) years each (each such additional period, an “Extended Term”), on terms mutually agreed by the Parties and always subject to Section 14.13 of the Agreement. The Parties must mutually agree to renew this Agreement no later than 24 months prior to the expiration of the Initial Term or any Extended Term, as applicable. The Initial Term and any Extended Term shall be herein referred to as the “Term”. However, upon expiration of the Term, except as otherwise provided herein, this Agreement shall remain in effect during the time required for the performance of uncompleted Services on any Aircraft and until all outstanding obligations contained herein and therein shall have been satisfied.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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2.5.1 In the event that (i) either party should fail to comply with any material term of this Agreement (including, but not limited to, Customer’s failure to make timely payment of all invoices), (ii) such party shall have received a written notice to that effect from the other party and (iii) such party shall have failed to cure the material non-compliance within thirty (30) Days of the date of the above referenced notice, then the other party shall have the right to terminate this Agreement and/or the applicable Annex.
2.5.2 Either Party shall have the right to immediately terminate this Agreement and all Annexes, upon the other Party filing a voluntary petition in bankruptcy or commencing a voluntary legal procedure for reorganization, arrangement, adjustment relief or composition of indebtedness or other similar law now or hereafter in effect, or applying for or consenting to the appointment of a receiver, liquidator, assignee, custodian or trustee (or similar official).
2.5.3 Neither the completion of the Services, nor the Redelivery of the Aircraft pursuant to the terms of this Agreement, nor any other termination of this Agreement, shall terminate the right of either party hereto to make any claim against the other party in respect of such other party’s failure to comply with any duty to perform or make any payment hereunder.
2.5.4 Upon termination of this Agreement for any cause whatsoever, Customer shall be liable to Aeroman for the payment of all amounts in respect of the Services performed up to the date of such termination, including without limitation, all labor charges, parts charges and all costs and out-of pocket expenses incurred by Aeroman in the preparation for the performance of the Services not completed and of the Aircraft for Redelivery, and Customer shall continue to be liable for liability which may have arisen or may later arise under Section 2.5.
2.6 TERMS OF AGREEMENT . Customer acknowledges and agrees that the terms of this Agreement as supplemented by any mutually agreed Annexes, special exhibits, and side letters shall be in lieu of any and all other terms and conditions appearing on any page or reverse side of any other document or purchase order submitted by Customer, all of which shall be disregarded.
 
3.	GENERAL SERVICE CONDITIONS	
3.1 STANDARDS . Notwithstanding the provisions of Section 3.2 below, Aeroman shall perform the Services according to the quality standards and requirements established by the Aircraft Manufacturer, the MPM and any applicable DGAC/FAA regulations or requirements.
3.2 MEETINGS RE PERFORMANCE AND SCHEDULING ETC . Customer and Aeroman will hold semi-annual meetings to discuss issues affecting the Parties’ performance under this Agreement, including but not limited to: scheduling issues and Aircraft Delivery dates, Maintenance Schedules, delays and cancellations, performance standards, TATs and technical issues.
3.3 SERVICE CERTIFICATE . The Services performed by Aeroman on an Aircraft pursuant to this Agreement shall be duly recorded by Aeroman in the Aircraft’s Flight log, records and applicable documents according to the MPM and/or current DGAC/FAA standards, as may be applicable. Such documents shall be provided to Customer upon Redelivery of the Aircraft to Customer.
3.4 TECHNICAL REPRESENTATIVE OF CUSTOMER . Customer shall appoint an individual (the “Representative”) to act as its representative with authority to legally bind Customer in connection with this Agreement. Customer shall identify the Representative by a written notice to Aeroman. Customer further agrees and acknowledges that the Representative shall be bound by the provisions of this Agreement including Section 7 below, a copy of which shall have been furnished to such Representative.
3.5 INVENTORY . Upon delivery of the Aircraft to Aeroman and prior to the commencement of the Services by Aeroman, Customer and Aeroman shall prepare a detailed list of all loose equipment
 
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and any additional Materials relating to the Aircraft in Aeroman’s possession (the “Inventory”). Such Inventory shall then be agreed upon by the Parties and such agreement shall be evidenced by the execution thereof by an authorized representative of each of the Parties.
3.5.1 Aeroman shall be responsible for the custody of the Inventory from the date of the execution of the Inventory until Redelivery of the related Aircraft to Customer.
3.5.2 Upon Redelivery of the Aircraft to Customer (whether upon completion of the Services, or upon the early termination of this Agreement in accordance with the terms of Section 2.5 hereof), Customer shall inspect the Aircraft and review all parts listed in the Inventory. Upon satisfaction that all parts and equipment listed in the Inventory have been returned, and after noting the condition of the Aircraft, Customer shall execute a Redelivery Receipt (as defined in Paragraph 8.2 below) for the Aircraft and the Inventory evidencing receipt of the Aircraft and Inventory.
3.5.3 Customer shall, at its sole cost and expense, provide Aeroman with any Materials, tools, spare Parts, replacement Parts and Components necessary or required for the performance of Services, pursuant to the terms and conditions contained in Annex A and C or in an individual Workscope. To the extent that certain Consumables or Rotables are needed for the performance of the Services and are not provided by Customer, Aeroman shall, upon written instruction to do so, purchase such Consumables and Rotables from vendors or suppliers approved by Costumer or procure such parts or components from its then current inventory and charge Customer an amount equal to the catalog price for such Consumables and Rotables plus the Handling Fee.
3.5.4 To the extent Customer supplies Parts or Components, such Parts or Components described in Section 3.5.3 above shall be delivered to Aeroman with sufficient advance time so as not to delay the completion of the Services beyond the TAT.
3.5.5 Aeroman may refuse to use any Material, tool, Part, Component or other material provided by Customer which, in its reasonable opinion, fails to meet the specifications or standards of the DGAC/FAA as to approved serviceability and/or airworthiness and which do not have the appropriate or relevant serviceability tags or forms.
3.6 TESTS UPON RECEIPT OF AIRCRAFT BY AEROMAN . Upon Delivery of an Aircraft to Aeroman, and prior to the commencement of any of the Services which according to the Workscope require an engine and systems operational tests, Aeroman will perform an engine and systems operational tests to establish the condition of the Aircraft at the time of Delivery. Any discrepancies detected during such engine and systems operations tests shall be acknowledged in writing by the Representative or an officer of Customer.
3.7 CORRECTION OF DISCREPANCIES . Aeroman shall submit to the Representative, for his or her written approval, a list of all repairs which are required to be performed by Aeroman in connection with the discrepancies noted pursuant to Section 3.6 above and which do not form part of the Workscope, and upon such approval such repairs shall be performed by Aeroman as Additional Services.
3.8 REPAIR OR REBUILDING OF COMPONENTS AND PARTS . If a Component or Part that is removed by Aeroman for the performance of the Services has a value exceeding *****, the Representative shall determine whether such Component or Part is to be replaced by a Component or Part provided by Customer, repaired or replaced by Aeroman or replaced by a vendor from the Approved Vendor List. Aeroman shall ensure that all Parts, tools and Materials provided by any such third party vendor conform in all respects to all relevant DGAC/FAA standards as applicable.
3.9 TEST FLIGHT . In the event it is necessary to conduct a test flight or any other flight for the verification of systems functionality at any time during the performance of the Services, such test flight
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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shall be carried out by Customer with Customer’s crew and at Customer sole cost, expense and risk. Any discrepancies detected as during such test flight and which are directly and solely attributable to Aeroman’s workmanship shall be corrected by Aeroman at Aeroman’s sole cost and expense. In the event that an additional test flight is required by the OEM Maintenance Manual to verify corrections of the discrepancies directly and solely attributable to the workmanship of Aeroman, Aeroman shall pay the costs of such additional test flight.
3.10 DELIVERY, TITLE AND RISK OF LOSS . All Customer items to be maintained, serviced, repaired, overhauled and/or modified by Aeroman shall be shipped to the Aeroman Facility (or to any other location specified in the applicable Annex) at Customer’s sole cost and expense, and shall, during such transit (if applicable), be appropriately insured by Customer. Title to all Parts, Materials and/or Components provided by Aeroman in connection with the performance of any Services on the Aircraft contemplated pursuant to this Agreement shall pass to Customer free and clear of all liens and encumbrances upon (i) installation of such items on the Aircraft and (ii) the payment in full of all of Customer’s obligations relating to the Services performed on the Aircraft. Risk of loss or damage to such parts, components and/or materials shall pass to Customer at the time and place of Redelivery to Customer.
3.11 EFFICIENCIES AND CUSTOMER REVIEW OF RECORDS . The following provisions shall be applicable to the performance of the Services:
3.11.1 Aeroman will be equipped and shall train its personnel to provide Customer its best direct labor efficiency, generating the least amount of man-hours in the performance of the Services as well as in each individual Task Card. The Parties agree to jointly work diligently and Aeroman will make reasonable efforts to develop an organization dedicated to continuous improvement, reduction of costs, reduction of TATs and in the resulting man-hours applied; and the parties agree that commencing with the second year of the Term, the Fixed Prices quoted by Aeroman for each type of maintenance check shall reflect the average number of man-hours consumed for the performance of such type of maintenance check in the preceding calendar year.
3.11.2 Aeroman shall provide to the Representative with production reports and regularly updated planning charts which will allow Customer to monitor the progress of the Workscope and Additional Services (if any). Additionally, on a weekly basis, Aeroman shall provide the Representative with a financial report showing the accumulated expenditures since Delivery of the Aircraft by Aeroman.
3.11.3 After Redelivery of an Aircraft, Aeroman shall provide Customer with information in electronic format containing man-hours and Material consumption for each non-routine Task Card. Customer’s Representative shall be permitted during normal business hours to review Aeroman´s records specified in, and in accordance with, Section 14.12. The information provided in this Section 3.11.3 shall not be used by Customer as an auditing tool to review Aeroman invoicing practices and policies.
 
4.	PLACE AND TURN TIMES FOR THE PERFORMANCE OF SERVICES	
4.1 WORK SITE . The Services shall be performed by Aeroman at the Aeroman Facility, except in the event of Outside Services, which are to be performed by an independent third party contractor, which contractor shall be approved by Customer.
4.2 TURN AROUND TIME . Customer and Aeroman shall include in each Workscope a written estimate of the TAT for the related Services, based on the TAT estimates to perform the required Task Cards for different types of C-Checks as detailed in the applicable Annex D and any other Services to be contained in each Workscope, and such other factors as Aeroman and Customer mutually agree (the “Estimated TAT”). Estimated TAT shall be increased for any time required to accomplish any Additional Services. Aeroman shall use commercially reasonable efforts to complete the Services within
 
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the Estimated TAT, as the same may be extended pursuant to Section 4.3. All Estimated TATs are based on prompt receipt by Aeroman of all Documentation, information, Parts, Components, tools and Materials necessary to allow Aeroman to proceed with the performance or the Services promptly and without interruption and Customer’s compliance with the terms of this Agreement are of the essence. Aeroman may Redeliver an Aircraft and/or all or any part of Customer items in respect of which Services have been completed in advance of the Estimated TAT.
4.3 EXTENSION OF TURN AROUND TIMES. The Estimated TAT shall automatically and without further act of the Parties be extended if:
4.3.1 Aeroman cannot obtain the Part, Material or Outside Services due to a significant disruption in the supply chain that is beyond the reasonable control of Aeroman, as verified by Customer.
4.3.2 any engineering approval for non-standard repairs required by Aeroman from Customer’s or an OEM’s engineering departments is unavailable and/or delayed.
4.3.3 Customer or any supplier delays or fails to timely deliver to Aeroman any Materials, tools and/or deliver any Materials in serviceable condition and/or in sufficient quantity, due to causes not directly attributable to Aeroman.
4.3.4 Customer fails to promptly perform any of its obligations under this Agreement which has a direct impact on the TAT, including but not limited to the provision of instructions and/or approvals to the extent required by this Agreement.
4.3.5 Aeroman discovers during the performance of Services any major defect or damage or Significant Non-Routine Work that requires a rectification.
4.3.6 Any delay results from a cause or condition described in Section 14.11 or any other circumstance beyond the control of Aeroman.
The Estimated TAT shall be extended for the period of time that performance by Aeroman is affected by any of the foregoing events or circumstances; provided, that in the event of a delay of the type specified in paragraph 4.3.5, the Estimated TAT shall be deemed extended by one (1) Day for every six hundred (600) man hours required to correct any major defect or damage or to perform Significant Non-Routine Work. Aeroman shall promptly provide Customer with written notice of the nature and anticipated duration of any delay permitted by subparagraphs 4.3.1 through 4.3.6 above.
The actual TAT shall be measured in Days from Delivery through Redelivery (“Actual TAT”).
Except when the delay is caused by any exceptions above, Aeroman shall pay, as a remedy for such delay, liquidated damages in an amount equal to (i) ***** for each Day that Aeroman exceeds the agreed TAT (as extended for reasons listed in this Section 4.3 above, if applicable), commencing on the second Day, and continuing through the fourth Day, and (ii) commencing on the fifth Day, ***** for each Day thereafter that Aeroman exceeds the agreed TAT (as extended for reasons listed in this Section 4.3, if applicable); provided, however, that the total amount payable by Aeroman in respect of non compliance with TAT by will not exceed ***** per Workscope. Payment of such liquidated damages shall be in lieu of any other damages in respect of such delay.
 
5.	RATES AND PRICE OF SERVICES	
5.1 FIXED PRICE . The price for routine Services performed by Aeroman on Customer’s Aircraft during the Term, associated to any “C-Check” included in each Annex D shall be the Fixed Price as previously quoted by Aeroman and mutually agreed by both Parties pursuant to Section 2.1.1 and as set forth in the applicable Annex C. The Fixed Prices and any other prices or rates included in Annex A
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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are expressed in United States Dollars. Any labor, tooling and material not included in a Fixed Price shall be invoiced to Customer on a Time and Material basis. Any Additional Services shall be charged to and be paid for by Customer at the prices and rates set forth in Annex A.
5.2 HANDLING FEES . In the event Aeroman procures Parts, Components or Materials form its inventory or purchases such Parts, Components or Materials for Customer as required for the provision of the Services, Customer shall pay Aeroman for such Parts, Components or Materials an amount equal to the catalog price plus the Handling Fee.
5.3 MAN-HOUR RATES . The man-hour rates applicable during the Term shall be as set forth in Annex A, as the same may be escalated in accordance with Annex A.
 
6.	PAYMENT	
6.1 CURRENCY . All payments for services rendered under this Agreement shall be made in United States Dollars.
6.2 FORM OF PAYMENT . Customer shall pay all amounts due under this Agreement in cash via bank wire transfer of immediately available same day funds to the account set forth in Section 6.4 below or to such other account as Aeroman may designate in writing to the Customer. All invoices shall be sent to Customer at the address set forth in Section 12 of this Agreement to the attention of Customer’s Finance Department.
6.3 PAYMENT SCHEDULE . Customer shall pay Aeroman for the performance of the Services in accordance with the payment schedule set forth in Annex A.
6.3.1 In addition to any and all other remedies available to Aeroman, if Customer fails to make payments in a timely manner, or upon commencement of any bankruptcy or reorganization proceeding, the payment for all Services performed will become due immediately.
6.3.2 Customer shall be solely responsible for payment to any vendor of any parts, components, tooling or materials supplied by Customer to Aeroman.
6.4 BANK ACCOUNT . Unless otherwise specified in writing, all payments to be made to Aeroman under this Agreement shall be made to:
BANK OF AMERICA
*****
6.5 DISPUTED AMOUNTS . In the event that there should arise between Customer and Aeroman a dispute as to any particular item set forth in an invoice from Aeroman, Customer shall be entitled to withhold from any payment any amounts that it disputes in good faith. In the event of any dispute, Aeroman and Customer agree to negotiate in good faith to resolve such dispute within thirty (30) Days after receipt of the relevant invoice by Customer. If such dispute is resolved in favor of Aeroman, the amount determined by such negotiations will be payable to Aeroman within fourteen (14) days of such resolution. Customer shall also have a right to seek reimbursement for any payments made in error pursuant to any invoices received within any preceding twelve (12) month period. If the Parties agree that Customer is entitled to a reimbursement for any reason, such amount will be refunded to Customer within fourteen (14) days of such resolution.
6.6 OVERDUE AMOUNTS . In the event that Aeroman shall not have received payment of any invoiced amount when due, Aeroman shall charge Customer, and Customer agrees that it shall be liable for, in addition to the amount due stated on the relevant invoice, interest on such overdue amount at
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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an interest rate per month equivalent to ***** (but no to exceed the maximum amount permitted by law), except for amounts in dispute. In the event Aeroman has not received from Customer payments due at Delivery for two (2) consecutive Aircraft, or if Customer fails to make a pre-Delivery payment within ten (10) days of notification by Aeroman that it has not received such pre-Delivery payment, whichever occurs first, then Aeroman may refuse acceptance of the next Aircraft tendered to it by Customer.
6.7 TAXES . If and when applicable, in addition to the price charged by Aeroman for the Services provided or performed hereunder, Customer shall pay to Aeroman, upon demand, or furnish to Aeroman evidence of exemption therefrom (including but not limited to legal opinions in relation to applicable law), any taxes (including without limitation, sales, use, excise, customs duties, turnover or value added taxes), duties, fees, charges or assessments of any nature (but excluding any taxes in the nature of income taxes) (collectively, the “ Taxes ”), assessed or levied by any governmental authority against Aeroman (except for any Taxes on the income of Aeroman), in connection with the performance of the Services, any sale, delivery, transfer, use, export, import or possession of any part, component, tools or materials, including any equipment attached thereto, or otherwise in connection with the terms of this Agreement whether or not confirmed and accepted in writing by Aeroman.
6.8 CUSTOMER AS RESPONSIBLE PARTY . Customer represents that it has all necessary authority to authorize the performance of the Services on the Aircraft by Aeroman. Customer shall hold harmless and defend Aeroman from and against any claims or charges asserted by any third Parties claiming an interest in the Aircraft and/or aircraft engines, or questioning the purchase of the Services by Customer from Aeroman.
 
7.	CUSTOMER’S TECHNICAL REPRESENTATIVE	
7.1 AUTHORIZED REPRESENTATIVE . Customer shall authorize and direct its Representative, and Aeroman shall allow such Representative, to be present at Aeroman Facility during the performance of the Services.
7.2 DUTIES . The Representative shall be duly authorized to represent the interests of Customer and shall perform such other functions, without prejudice to any other terms of this Agreement that may be assigned directly by Customer. The Representative’s main functions shall be as follows:
7.2.1 The Representative shall verify the adequate performance of the Services by Aeroman.
7.2.2 The Representative shall advise Aeroman of any pertinent observation needed to ensure the adequate performance of the Services.
7.2.3 The Representative shall coordinate with Aeroman in respect of any work to be performed under this Agreement and shall promptly authorize any actions required for the performance of any non-routine Services or any Additional Services which may be required.
7.2.4 The Representative shall sign, on behalf of Customer, the Redelivery Receipt for the Aircraft upon redelivery of the Aircraft to Customer, as provided in Section 7.3 below.
7.3 OFFICE FACILITIES . Aeroman shall provide the Representative with such office facilities as may be reasonably requested by the Representative for the performance of his or her duties. Such office facilities shall include access to communications equipment such as Internet, copying services, facsimile and telephone, excluding cell phones.
 
8.	REDELIVERY UPON COMPLETION OF SERVICES	
8.1 TESTS . Upon completion of the Services, and prior to Redelivery of the Aircraft to Customer, Aeroman shall perform all necessary functional tests on the Aircraft (except for any required
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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test flights which will performed as indicated in Section 3.9 of this Agreement), in accordance with the OEM Maintenance Manuals, Customer’s manuals, job cards, appropriate aircraft and engine manuals and applicable specifications for the Aircraft. The results of such functional tests shall be verified by Customer or its Representative, as the case may be.
8.2 REDELIVERY RECEIPT . Upon completion of the Services, Aeroman shall submit the Aircraft to the Representative for final inspection. Aeroman shall prepare a Redelivery Receipt for the Aircraft which receipt shall outline the Services performed on the Aircraft pursuant to this Agreement). The Redelivery Receipt shall be executed by each of the Parties hereto in two originals each party keeping one original of such document.
8.3 DOCUMENTATION . Upon execution of the Redelivery Receipt, Aeroman shall make the Aircraft together with all items listed in the Inventory and all relevant manuals, logs, records, certificates and documents for the Aircraft and all parts, tools and materials, available to Customer.
8.4 FULL PERFORMANCE AND SATISFACTION . Upon execution of the Redelivery Receipt the Aircraft shall be deemed to have been redelivered to and accepted by Customer in full satisfaction of the Services rendered under this Agreement, without prejudice to the warranty granted by Aeroman referred to in Section 9.1 below.
8.5 PARKING CHARGES . Customer agrees to remove the Aircraft from Aeroman’s facilities promptly upon execution of the Redelivery Receipt. In the event the Aircraft is not removed from Aeroman’s Facility on the day of the Redelivery, Aeroman shall park the Aircraft on the apron of El Salvador International Airport and Customer shall pay to Aeroman daily parking fees if the Aircraft has not been removed from parking within fourteen (14) days following execution of the Redelivery Receipt. Aeroman shall not be responsible for, and Customer shall bear all risk of, loss/damage to the Aircraft after Redelivery by Aeroman. Customer shall be responsible for all costs/fees and expenses charged by third parties and related to parking and Customer shall indemnify Aeroman for all costs, losses, claims, demands arising out of or as a result of the parking of the Aircraft by Aeroman as described above.
8.6 ADDITIONAL COSTS AT REDELIVERY TO CUSTOMER . All additional reasonable and documented costs and expenses (such as fuel and landing fees plus the Handling Fee set forth in the applicable Annex), incurred during the Redelivery process shall be paid by Customer.
 
9.	WARRANTY	
9.1 Aeroman hereby grants to Customer the following warranty in respect of the Services performed pursuant to this Agreement:
9.1.1 Aeroman warrants to Customer that the Services performed by Aeroman pursuant to this Agreement shall be free from material defects in workmanship for a period of no more than (i) Three hundred and sixty five (365) days from the date of the execution of the Redelivery Receipt by the Representative, or (ii) Three thousand seven hundred (3,700) flight hours of operation after Redelivery of the Aircraft to Customer, whichever occurs first. The foregoing warranty does not extend to normal wear and tear; rust, corrosion or the entry of foreign materials not caused by Aeroman or to any parts, material or third party services incorporated in the Aircraft.
9.1.2 Aeroman’s warranty does not extend to, or include Materials supplied by Aeroman and/or other manufacturers or Services performed by anyone other than Aeroman, including, without limitation, Outside Services. Aeroman shall use its best efforts to obtain the highest available warranties from any third party providing Outside Services.
9.1.3 Upon receipt of a timely notice (as set forth in Section 9.1.5(b) below) from Customer that a defect or failure in connection with the workmanship performed pursuant to this
 
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Agreement has been detected, Aeroman shall, at its option, either repair the defective work or refund to Customer the cost of repairing the defective work, including labor. The warranty period on any such repaired item shall be the same warranty period set forth in Section 9.1.1 on the initially repaired item.
9.1.4 In the event that Customer shall notify Aeroman that a defect or failure in connection with the workmanship performed pursuant to this Agreement has been detected, Customer shall provide Aeroman a statement indicating whether or not the affected part or component has been serviced, repaired and/or modified by any third party following the completion of the Services performed pursuant to this Agreement.
9.1.5 Notwithstanding the above the foregoing warranty shall be effective only if:
(a) any defects or failure attributable to the workmanship provided for in the performance of the Services manifest themselves and are detected during the warranty period indicated in Section 9.1.1 above, and
(b) Customer notifies Aeroman in writing no later than fifteen (15) days after the defect or failure is first detected.
9.1.6 No act or omission which may be attributable to Aeroman’s technical personnel shall be considered as noncompliance with this Agreement, if said act or omission is not in conflict with the technical procedures approved or recommended by the Aircraft manufacturer’s guidelines, bulletins, manuals, Customer’s manuals or recommendations for the repair or work performed by Aeroman.
9.1.7 Aeroman’s obligations and responsibilities in respect of the warranty granted by this Clause 9 are limited to the cost of workmanship and material needed by Aeroman to repair any defects resulting directly from Aeroman’s workmanship and any damage to Parts, Materials and Component resulting directly and solely therefrom.
9.1.8 Repair of all defects and malfunctions attributable to Aeroman’s workmanship shall be performed at Aeroman’s facilities in El Salvador or at a mutually agreed facility with any and all reasonable direct costs required for the correction thereof being for the account of Aeroman. In the event that the warranty is applicable, Aeroman will reimburse Customer for any aircraft ferry cost.
9.2 EXCEPT AS SET FORTH IN SECTION 10 OF THIS AGREEMENT, THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF AEROMAN AND THE REMEDIES OF CUSTOMER SET FORTH IN THIS AGREEMENT PERTAINING TO THE FOREGOING WARRANTY ARE EXCLUSIVE AND IN SUBSTITUTION OF, AND CUSTOMER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES AND LIABILITIES OF CUSTOMER AND RIGHTS, CLAIMS AND REMEDIES OF CUSTOMER AGAINST AEROMAN, EXPRESSED OR IMPLIED, ARISING BY LAW, EQUITY OR OTHERWISE, WITH RESPECT TO ANY DEFECT IN ANY WORKMANSHIP OR SERVICES PERFORMED UNDER THIS AGREEMENT OR ANY OTHER THINGS DELIVERED HEREUNDER, INCLUDING BUT NOT LIMITED TO: (A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN TORT, AND, (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY EQUIPMENT, OR FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY EQUIPMENT, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
9.3 In addition to the foregoing, and without limiting the terms thereof, this warranty shall be applicable only if the Aircraft and any relevant component thereof, are stored, installed, operated,
 
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handled, maintained and repaired in accordance with the then current recommendations of the relevant manufacturer as stated in such manufacturer’s manuals, bulletins or other written instructions and shall not apply to damage or defects caused by or in any manner or resulting from (i) operation of the Aircraft or component in a manner which exceeds or is otherwise inconsistent with the relevant manufacturer’s recommendations, guidelines, limits or specifications, (ii) gross negligence or willful misconduct, (iii) causes, acts or omissions outside of the control of Aeroman or within the control of parties other than Aeroman or its employees, (iv) service of the Aircraft or component by any person other than Aeroman between the time of completion of the Services and notice of any defect purportedly covered by this Section 9, (iv) any damage or failure resulting from the Services rendered which may originate or occur on a date after the warranty period described in Section 9.1.1 above, or (v) if the Aircraft has suffered damage due to external elements or has been involved in an accident or incident unrelated to Services.
9.4 Aeroman’s sole responsibility with respect to any components, spare parts or materials purchased by Aeroman for the performance of the Services, shall be limited to the endorsement and/or transfer to Customer of any warranties, if any and if transferable, granted by manufacturer or vendor of such components, spare parts or materials.
 
10.	INDEMNITY AND INSURANCE	
10.1 Customer agrees to hold harmless, defend and indemnify Aeroman, its affiliates, and their directors, officers, employees, agents and representatives (each an “Aeroman Indemnitee”), from and against any Claim of third parties which may be suffered by, accrued against, chargeable to, or recoverable from Customer as a result of death of or bodily injury to any person or persons whomsoever (including, without limitation, Customer’s employees but excluding Aeroman’s employees) and for loss of or damage to, destruction of, any property whatsoever (including, without limitation, the Aircraft and any loss of use thereof), in any manner arising out of or in any way connected with the Services furnished or to be furnished by Aeroman under this Agreement, except in the case of Claims arising out of the gross negligence or willful misconduct of Aeroman. Customer shall, at the request of Aeroman, negotiate and defend any Claim brought against any Aeroman Indemnitee or in which any Aeroman lndemnitee is joined as a party defendant based upon any other matters for which Customer has agreed to indemnify each Aeroman lndemnitee as provided above. Customer’s obligation hereunder will survive any expiration, termination or cancellation of this Agreement.
10.2 Aeroman agrees to hold harmless, defend and indemnify Customer, its affiliates, and their officers, directors, servants, agents, and employees (each a “Customer Indemnitee”) from and against any Claims, which may be suffered by, accrued against, chargeable to, or recoverable from Customer as a result of injury to or death of any person (including, without limitation, Aeroman’s employees and excluding Customer’s employees), or damage to, loss or destruction of property arising out of the Services provided under this Agreement, to the extent such Claims arise out of the gross negligence or willful misconduct of Aeroman. Aeroman shall, at the request of Customer, negotiate and defend any Claim brought against any Customer Indemnitee or in which any Customer lndemnitee is joined as a party defendant based upon any other matters for which Aeroman has agreed to indemnify each Customer lndemnitee as provided above. Aeroman’s obligation hereunder will survive any expiration, termination or cancellation of this Agreement.
10.3 Customer shall, at its sole cost and expense, procure and maintain in full force and effect during the term of this Agreement:
(a) Hull all risks (including spare parts) and hull war and other allied perils insurance policies covering the Aircraft to be serviced under this Agreement, including the time during which the Aircraft is under the care, control and/or custody of Aeroman;
(b) To include but not limited to Aircraft Liability, Aviation Third Party Legal Liability, Comprehensive General Third Party Liability, Personal Injury, Products and Completed Operations Liability, Ground and In-flight Hangarkeeper’s Liability and Contractual Liability all having a combined single limit of not less than ***** for any one occurrence.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Such limit shall be in the aggregate with respects to Products and Completed Operations coverage and further sub limited to ***** any one occurrence and in the aggregate with respects to Personal Injury coverage; however, such sub limit shall not apply with respects to passengers. Furthermore, such insurance shall include coverage for the Risk of War, Hijacking and Other Allied Perils defined in insurance clause AVN52E, or its market equivalent, and of the type and in substantially the amount usually carried by corporations engaged in the same or similar business and similarly situated with Customer (such limit shall be in the aggregate with respects to third party bodily injury and property damage).
(c) Workers’ Compensation and Employer’s Liability as required by applicable law.
10.4 The policies of insurance described in Section 10.2 above will be endorsed to (i) waive any rights of subrogation against the Indemnitees thereunder with respect to matters for which Customer has indemnified Aeroman pursuant to Section 10.1;(ii) with respect to the policies described in Section 10.3(b) and 10.3(c), name Aeroman, its directors, officers, employees and agents as additional insureds thereunder; (iii) include a warranty violation section in favor of the additional i insureds, (iv) include a section expressing that Customer’s insurance is primary and without any right of contribution from any policies carried by Aeroman, (v) with respect to the policies described in Section 10.3(b) provide a standard cross liability or severability of interest clause among parties; and (vi) acceptance by the Insurers of the contractual obligations of the Customer as set forth in this Agreement, and (vii) insurers agree to waive any rights to set off or counterclaim or deduction, whether by attachment or otherwise, against Aeroman Indemnitees. In the event Customer carries limits of insurance higher than those required under the terms of this Agreement, such higher limits shall be applicable to Aeroman Indemnitees in addition to Customer.
10.5 Customer shall provide Aeroman, prior to the Services being performed by Aeroman and on each renewal of the policies thereof, evidence of such insurance as required in Section 10.2 above satisfactory to Aeroman. Such policies shall include a provision that the coverage required hereunder shall not be cancelled or materially and adversely changed unless Customer’s insurance brokers issue notice to Aeroman at least thirty (30) days prior to such cancellation or material adverse change (seven (7) days, or such other period as is customarily available in the industry, in the case of War Risk and Other Allied Perils coverage).
10.6 Aeroman shall take all necessary measures to protect the integrity and security of the Aircraft while the same stays in its facilities under its care, control and/or custody.
10.7 Aeroman shall, at its sole cost and expense, procure and maintain in full force and effect during the term of this Agreement
(a) Comprehensive General Third Party Liability, Personal Injury, Products and Completed Operations Liability, Ground Hangarkeepers Liability and Contractual Liability all having a combined single limit of not less than ***** for any one occurrence. Such limit shall be in the aggregate with respects to Products and Completed Operations coverage and further sub limited to ***** any one occurrence and in the aggregate with respects to Personal Injury coverage. Furthermore, such insurance shall include coverage for the Risk of War, Hijacking and Other Allied Perils defined in insurance clause AVN52E, or its market equivalent, and of the type and in substantially the amount usually carried by corporations engaged in the same or similar business and similarly situated with Aeroman. Such coverage shall provide a limit up to ***** each occurrence and in the annual aggregate and such limit is part of and not in addition to the overall limit; and
(b) Workers Compensation as required by applicable law.
10.8 The policies of insurance described in Section 10.7 above shall be with companies having a favorable international reputation, subject to a commercially reasonable deductible and will be
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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endorsed to (i) waive any rights of subrogation against the Customer Indemnitees thereunder with respect to matters for which Aeroman has indemnified Customer pursuant to Section 10.6; (ii) name Customer, its directors, officers, employees and agents as additional insureds (with the exception of the Workers Compensation policy) thereunder; (iii) include a warranty violation section in favor of the additional insureds, (iv) include a section expressing that Aeroman’s insurance is primary and without any right of contribution from any policies carried by Customer, (v) provide a standard cross liability or severability of interest clause among parties; and (vi) acceptance by the Insurers of the contractual and indemnification obligations of Aeroman as set forth in this Agreement; (vii) insurers agree to waive any rights to set off or counterclaim or deduction, whether by attachment or otherwise, against Customer Indemnitees. In the event Aeroman carries limits of insurance higher than those required under the terms of this agreement, such higher limits shall be applicable to Customer Indemnitees in addition to the Aeroman.
10.9 Aeroman shall provide Customer, prior to the Services being performed by Aeroman and on each renewal of the policies thereof, evidence of such insurance as required in Section 10.7 above satisfactory to Customer. Such policies shall include a provision that the coverage required hereunder shall not be cancelled or materially and adversely changed unless Aeroman’s insurance brokers issue notice to Customer at least thirty (30) days prior to such cancellation or material adverse change (seven (7) days, or such other period as is customarily available in the industry, in the case of War Risk and Other Allied Perils coverage).
 
11.	LIMITATION OF LIABILITY	
EXCEPT AS SET FORTH IN SECTION 10 OF THIS AGREEMENT, THE TOTAL LIABILITY OF AEROMAN, INCLUDING ITS AFFILIATES, EMPLOYEES, SUBCONTRACTORS OR SUPPLIERS, ON ANY AND ALL CLAIMS, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE OF ANY DEGREE), PRODUCT LIABILITY, PATENT INFRINGEMENT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT, ANNEXES OR ANY OTHER AGREEMENT TO WHICH THE TERMS AND CONDITIONS OF THIS AGREEMENT APPLY OR FOR THE MANUFACTURE, SALE, DELIVERY, RESALE, REPAIR, OVERHAUL, REPLACEMENT, MODIFICATION OR USE OF ANY CUSTOMER ITEM OR THE FURNISHING OF ANY SERVICE, SHALL NOT EXCEED THE HIGHER OF A) ***** OR B) THE PRICE OF THE RELEVANT SERVICES PERFORMED ON THE AIRCRAFT. ANY SUCH LIABILITY SHALL TERMINATE UPON EXPIRATION OF THE WARRANTY PERIOD SPECIFIED IN SECTION 9 HEREOF. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE OF ANY DEGREE), PRODUCT LIABILITY, PATENT INFRINGEMENT, OR OTHERWISE, SHALL AEROMAN, OR ITS AFFILIATES, EMPLOYEES, SUBCONTRACTORS OR SUPPLIERS, BE LIABLE FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY EQUIPMENT OR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES ALL OF WHICH ARE EXPRESSLY WAIVED BY CUSTOMER TO THE FULLEST EXTENT ALLOWED BY LAW.
 
12.	COMMUNICATIONS AND NOTICES	
This Agreement may not be amended or substituted, except by a written document executed by both Parties. All communications or notices related to this Agreement shall be deemed as given by one party when sent to the other party by first class registered mail or facsimile with original sent via courier for next day delivery to the following addresses:

For Customer:	  	Concesionaria Vuela Compañía de Aviación, S.A.	
	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Col. Santa Fe Peña Blanca	
	  	Del. Álvaro Obregón	
	  	01210 México, D.F.	
	  	Attention: General Counsel	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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For Aeroman:	  	Aeromantenimiento, S.A.	
	  	El Salvador International Airport	
	  	Comalapa	
	  	La Paz, El Salvador	
	  	Attention: General Manager	
		
	  	Telephone No.: 011-503-2366-7502	
	  	Facsimile No.: 011-503-2339-9627	
 
13.	DISPUTE/ARBITRATION.	
13.1 RESOLUTION OF TECHNICAL DISPUTES . If a dispute of a technical nature should arise in respect of the services to be performed pursuant to this Agreement, such dispute shall be referred for final settlement to (a) an expert nominated by the Parties, or (b) if the Parties are unable to agree on a nominee within thirty (30) days of the beginning of such dispute, a person nominated by the FAA and/or DGAC principal maintenance inspector having jurisdiction (any such person pursuant to (a) or (b) above, the “ Expert ”).
13.1.1 The Expert shall be deemed to act as an expert and not as an arbitrator. For the avoidance of doubt, the Expert shall only be responsible for determining matters of a technical nature, and shall not be responsible for determining such things as liability and the quantum of damages payable. Matters of a technical nature shall include whether or not the Services performed by Aeroman are to the standard and otherwise in compliance with this Agreement, the proposal or the relevant Purchase Order.
13.1.2 The Expert’s decision shall (in the absence of clerical or manifest error) be final and binding on the Parties and the Expert’s fees for so acting shall be borne by the Parties in equal shares, unless the Expert rules that the conduct of either party is such that one party should bear all or a greater proportion of such fees.
13.2 ARBITRATION. All other disputes shall be settled and finally determined by binding arbitration in the State of New York, U.S.A., or any other location the Parties may agree, in accordance with the Commercial Arbitration Rules of the American Arbitration Association (effective as of November 1993). Parties hereby submit to the jurisdiction of the State of New York.
13.3 ARBITRATION PROCEDURE AND GOVERNING LAW. Each party will select one arbitrator and the arbitrators selected by each of the Parties will within (10) days of their appointment, select a third neutral arbitrator. In the event that they are unable to do so, the Parties or their attorneys may request the American Arbitration Association to appoint the third neutral arbitrator. The arbitral tribunal may hold pre-hearing conferences or adopt other procedures, including reasonable discovery and the Agreement shall be governed by, interpreted and construed in accordance with the substantive laws of the State of New York. Reasonable examination of opposing witnesses in oral hearing will be permitted. Each party will bear its own cost of presenting or defending its position in the arbitration. The award of the arbitrator rendered therein shall specify the finding of fact of the arbitrators and the reasons for such award. Any such award shall be final, binding and non-appealable and judgment may be entered thereon in any court having jurisdiction.
13.4 EXCLUSIVITY; CONFIDENTIALITY. Each of the Parties intend that the dispute resolution process set forth in this Section shall be the Parties’ exclusive remedy for any dispute. All statements made and documents provided or exchanged in connection with the dispute resolution process set forth in this Section shall not be disclosed unless such information is (i) generally available to
 
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the public (other than by disclosure in violation of this Agreement or any other agreement to which such person is a party); (ii) available to such party on a non-confidential basis from a source that, to the reasonable knowledge of the receiving party, is not prohibited from disclosing such information to such receiving party; or (iii) required to be disclosed in accordance with applicable law or any regulatory authority having jurisdiction, or (iv) after notice and an opportunity to contest, is required to be disclosed under applicable law or under subpoena or other process of law.
 
14.	MISCELLANEOUS	
14.1 SEVERABILITY . Any provision of this Agreement which may be determined by a competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof, and any such prohibition in any other jurisdiction, shall not invalidate or render unenforceable such provision in any other jurisdiction.
14.2 GOOD FAITH NEGOTIATIONS . Disputes that may arise between the Parties due to interpretation or application of this Agreement shall be attempted to be resolved in good faith, through direct negotiations. In the event such good faith negotiations should fail, the issues in controversy shall be negotiated by the presidents or the chief executive officers of each of the Parties hereto before the commencement of any legal action.
14.3 ENTIRE AGREEMENT . This Agreement together with all annexes and exhibits hereto, constitutes the entire agreement between the Parties hereto and supersedes any and all prior written or oral agreements between the Parties with regard to the subject matter hereof. This Agreement may be amended or modified only by a written agreement, duly executed by the representatives of the Parties to this Agreement.
14.4 WAIVER . The failure of either party to this Agreement to enforce any provision hereof shall not be construed to be a waiver of such provision or of such party’s respective rights to thereafter enforce the same, and no waiver of any breach shall be construed as an agreement to waive any subsequent breach of the same or other provision(s).
14.5 COUNTERPARTS . This Agreement, together with its Annexes, may be executed in one or more counterparts, each of which shall constitute an original, and when taken together shall constitute one and the same document.
14.6 CONFIDENTIAL INFORMATION . The terms of this Agreement and any information, in any format, whether written or oral, whether or not marked confidential, disclosed, provided or made available by a Party to the other Party in connection with this Agreement shall be deemed confidential information of the disclosing Party (“Confidential Information”) and shall not be disclosed or furnished by the receiving Party to any person, firm or corporation and such Confidential Information shall not be used by the receiving for any purpose other than to perform its obligations under this Agreement. Customer shall cause the Representative to comply with the terms of this Section. Except as may be required by applicable law, including federal, state or provincial securities laws, or pursuant to judicial proceedings, and to the extent required by government agencies, neither Party to this Agreement shall disclose any Confidential Information without first obtaining the written consent of the other Party, except to each Party’s accountants, attorneys, regulators, lenders, investment bankers and other professionals who are bound by confidentiality obligations or who have executed a confidentiality agreement containing terms substantially similar to the terms as hereunder. Customer acknowledges and agrees that the information, specifically but not limited to prices, contained in this Agreement is Confidential Information of Aeroman and is disclosed to Customer in confidence. Such information is the property of Aeroman and shall not be used, disclosed to others, or reproduced without the express written consent of Aeroman, and subject to the exceptions above mentioned.
 
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14.7 EXPIRATION . All proposals of Aeroman shall expire at the end of the validity period stipulated in each proposal. If no such period is stipulated then the proposal shall expire thirty (30) days from the date of issuance.
14.8 THIRD PARTY BENEFICIARIES . Except as expressly provided to the contrary herein the provisions of this document are for the benefit of the Parties hereto and not for the benefit of any third party other than, in respect of any outstanding warranty of Aeroman hereunder, any lessee or subsequent owner of the Aircraft who shall have received an assignment of such warranty with Aeroman’s prior written consent.
14.9 IMMUNITIES . To the extent that any Customer or any of its property is or becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit, or proceeding, or other legal process in any jurisdiction, Customer for itself and its property does hereby irrevocably and unconditionally waive, and agree not to plead or claim, any such immunity with respect to its obligations, liabilities or any other matter under or arising out of or in connection with any subject matter hereof. Such agreement shall be irrevocable and not subject to withdrawal in any and all jurisdictions.
14.10 ASSIGNMENTS . The assignment of any rights or obligations hereunder, by either party without the prior written consent of the other party is not permitted and shall be void, except that Customer’s consent shall not be required for the subcontracting of services when deemed necessary by Aeroman, or that substitution of a subsidiary or assignment to an affiliated company of Aeroman in place of Aeroman as the contracting party and the recipient of payments pertaining to all or any portion of the Purchase Order. In the event of such substitution/transfer, Customer shall be advised thereof in writing.
14.11 EXCUSED PERFORMANCE . Neither Party will be liable for, or be considered to be in breach of or default under this Agreement on account of any delay or failure to perform as required by this Agreement (other than with respect to the obligation to make payments under this Agreement) as a result of any cause or condition beyond such party’s reasonable control, including, but not limited to: fire, explosions, earthquakes, storms, flood, wind, drought and acts of God or the elements; court orders; acts, delays and failures to act by civil, military or other governmental authority; strikes, lockouts, labor interruptions or slowdowns, riots, insurrections, sabotage and war; breakdown or destruction of, or damage or casualty to, any equipment, facilities or other property; interruption, suspension, curtailment or other disruption of utilities; unavailability of materials, supplies, parts, equipment, personnel or other necessary items and, acts or omissions of persons or entities other than such party. Upon the occurrence of any of the foregoing events or conditions, Aeroman shall have reasonable opportunity to make alternative satisfactory arrangements to perform its obligations under this Agreement.
14.12 AUDIT. At any time during the Term (but not more than once per calendar year) and at its own expense, Customer may perform a review and audit of all records and reports relating to any fees or reimbursable expenses billed to Customer pursuant to this Agreement covering the prior twelve (12) month period; provided, however, that (i) the scope of such audit shall be limited to verifying whether or not the amounts invoiced to Customer by Aeroman were correctly calculated based on the commercial terms of this Agreement, and (ii) any records or reports relating to costs incurred by Aeroman shall not be subject to review or audit in any audit except to the extent that such records or reports relate to reimbursable expenses or fees invoiced to Customer, and, further provided that Aeroman shall be under no obligation to disclose information which would breach any confidentiality obligation owing to any third party. In the event the report generated out of such audit reveals that any fees or reimbursable expenses have been over-billed, Aeroman shall reimburse Customer for such over-billed amount. Conversely, in the event that any fees or expenses have been under-billed by Aeroman, Customer shall pay Aeroman such under-billed amount. No interest shall be payable on such amounts by Aeroman or Customer for the period between the original invoice date and payment.
14.13 SPECIAL PROVISION. During the Term of this Agreement, Aeroman agrees that the Economic Terms (as defined below) under which Aeroman provides Services to Customer under this Agreement for the Agreed Aircraft will not be less favorable to Customer than the Economic Terms under
 
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which Aeroman provides maintenance services to any other customer, except for ad hoc or drop-in customers (“MFN Pricing”). For the avoidance of doubt, this Section 14.13 shall apply to any maintenance services provided by Aeroman after the date hereof, whether such maintenance services are provided pursuant to an agreement entered into by Aeroman on or after the date hereof, are performed by Aeroman on its own behalf or as a subcontractor for another Party, or otherwise. For purposes of this Section 14.13, the term “Economic Terms” means (i) the price per man-hour and total hours per check visit for substantially similar services on the same or similar aircraft types as the Aircraft, and (ii) Aeroman’s standard payment terms and conditions respecting the invoicing of its maintenance services for customers which terms and conditions will be generally reflective of other major providers in the aircraft maintenance service market. The Parties hereby agree that Customer shall not be entitled to the annual price reduction granted to JetBlue Airways Corporation under its agreement(s) with Aeroman. For purposes of this Section 14.13, the expression “Agreed Aircraft” means (i) in respect of the Initial Term, the number of Aircraft operated by Customer during the Initial Term; and (ii) in respect of any Extended Term, the number of Aircraft operated by Customer as at the date of expiration of the Initial Term (“Initial Term Fleet”). Any additional aircraft operated by Customer other than the Aircraft comprised in the Initial Term Fleet shall not be subject to the MFN Pricing and Services rendered on such additional aircraft will be subject to mutually agreed terms and conditions. This MFN Pricing only applies to (i) Aircraft delivered factory new to Customer, (ii) Aircraft younger than six (6) years at the time they are purchased or leased and which the immediate prior operator or lessee was a well-known reputable international air carrier (iii) Aircraft which has been maintained by its prior operator or lessee under an FAA or EASA approved maintenance program, or (iv) Aircraft which the immediate prior operator was Taca International Airlines, S.A. or any of its affiliates for a period of not less than twenty four (24) months.
If Aeroman provides maintenance services to any other customer on Economic Terms that are more favorable than those provided to Customer hereunder, then (i) Aeroman shall provide Customer prompt written notice of that fact, which notice shall be accompanied by a description in reasonable detail of differences in the affected Economic Terms available to Customer hereunder and the more favorable Economic Terms offered or provided to another customer or customers, provided that Aeroman shall be under no obligation to disclose information which would breach any confidentiality obligation owing to any third party, and (ii) Aeroman and Customer shall promptly execute and deliver an amendment to this Agreement to amend the Economic Terms accordingly, which Amendment shall be effective retroactively from the date such Economic Terms were first provided to another customer. Any amount which is due and owing Customer as a result of an amendment to this Agreement that modifies the Economic Terms applicable to Services for which Customer has already paid Aeroman shall be credited to Customer’s account toward the payment of future Services, or, if the Term has ended, shall be paid to Customer.
Customer may, at Customer’s option, request in writing to Aeroman to have any Services or work performed at any of the ACTS current maintenance facilities as at the date of the Agreement. Upon such request by Customer, Aeroman shall cause ACTS to provide the best Economic Terms that ACTS provides to its customers at such requested maintenance facility.
Not later than January 31 of each year during the Term, commencing on January 31, 2008, Aeroman shall provide to Customer a certificate of its chief financial officer to the effect that such officer has reviewed Aeroman’s maintenance service agreements, including this Agreement, and the Economic Terms applicable to the Services provided by Aeroman to Customer and its other customers during the preceding calendar year, and on the basis of such review the chief financial officer shall certify that Aeroman has complied with this Section 14.13. In addition, at Customer’s election and expense, Aeroman shall provide a certificate of its independent auditors to the same effect.
14.14 EXCLUSIVITY . Customer agrees and understands that Aeroman will be its exclusive heavy maintenance services provider. For the avoidance of doubt, Aeroman has the right to perform similar work or services for other entities. The exclusivity provision contained herein shall not apply to i) any request by Customer for Additional Services or additional slots not contained in the mutually agreed schedules pursuant to Section 2.1.1 and in respect of which Aeroman is unable to provide such services or slots; or (ii) any Aircraft to which the MFN Pricing will not apply pursuant to Section 14.13 of this Agreement. This waiver of exclusivity shall be limited to the foregoing events only and shall not be
 
- 20 -

construed as a permanent waiver of exclusivity under the Agreement. Customer shall notify Aeroman of any request for Additional Services or additional slots not set forth in this Agreement and shall cooperate with Aeroman to accommodate such request for Additional Services or slots.
[S IGNATURES A PPEAR O N N EXT P AGE ]
 
- 21 -

IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be executed as of the date first above written.

AEROMANTENIMIENTO, S.A.	
		
By:	 	/s/ Ernesto Ruiz	
Name:	 	Ernesto Ruiz	
Title:	 	CEO	
	
CONCESIONARIA VUELA COMPAÑIA DE AVIACION, S.A. d/b/a VOLARIS	
		
By:	 	/s/ Andrés Fabre Robles	
Name:	 	Andrés Fabre Robles	
Title:	 	Director of Operations	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.09
THIS DOCUMENT CONTAINS MATTER WHICH IS PROPRIETARY TO IAE
INTERNATIONAL AERO ENGINES AG (“ IAE ”) AND CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“ VUELA ”). YOU MAY NOT POSSESS, USE, COPY
OR DISCLOSE THIS DOCUMENT OR ANY INFORMATION IN IT, FOR ANY PURPOSE
WITHOUT IAE’S AND VUELA’S EXPRESS WRITTEN PERMISSION. NEITHER RECEIPT
NOR POSSESSION OF THIS DOCUMENT ALONE FROM ANY SOURCES CONSTITUTES
IAE’S OR VUELA’S EXPRESS WRITTEN PERMISSION. POSSESSION, USE, COPYING OR
DISCLOSURE BY ANYONE WITHOUT IAE’S AND VUELA’S EXPRESS WRITTEN
PERMISSION IS NOT AUTHORIZED AND MAY RESULT IN CRIMINAL AND OR CIVIL
LIABILITY.
V2500 ®
GENERAL TERMS OF SALE BETWEEN
IAE INTERNATIONAL AERO ENGINES AG AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

IAE PROPRIETARY INFORMATION
TABLE OF CONTENTS

		
1. Definitions	  	 	4	  	
		
2. Sale of Purchased Items	  	 	6	  	
			
2.1	  	Intent	  	 	6	  	
2.2	  	Agreement to Purchase	  	 	6	  	
2.3	  	Type Approval and Changes in Specification	  	 	6	  	
2.4	  	Inspection and Acceptance	  	 	7	  	
2.5	  	Delivery, Shipping, Title and Risk of Loss or Damage	  	 	8	  	
2.6	  	Price	  	 	9	  	
2.7	  	Payment	  	 	9	  	
		
3. Spare Parts Provisions	  	 	10	  	
			
3.1	  	Intent and Term	  	 	10	  	
3.2	  	ATA Standards	  	 	12	  	
3.3	  	Initial Provisioning	  	 	12	  	
3.4	  	Change in Initial Provisioning Data	  	 	13	  	
3.5	  	Stocking of Spare Parts	  	 	13	  	
3.6	  	Lead Times	  	 	13	  	
3.7	  	Ordering Procedure	  	 	13	  	
3.8	  	Modifications to Spare Parts	  	 	14	  	
3.9	  	Inspection	  	 	15	  	
3.10	  	Delivery and Packing	  	 	15	  	
3.11	  	Prices	  	 	15	  	
3.12	  	Payment	  	 	16	  	
3.13	  	Conflict	  	 	17	  	
		
4. Warranties, Guarantees and Liabilities	  	 	17	  	
		
5. Product Support Services	  	 	19	  	
		
6. Miscellaneous	  	 	20	  	
			
6.1	  	Delay in Delivery	  	 	20	  	
6.2	  	Patents	  	 	21	  	
6.3	  	Credit Reimbursement and Right of Setoff	  	 	22	  	
6.4	  	Non-Disclosure and Non-Use	  	 	23	  	
6.5	  	Taxes	  	 	24	  	
6.6	  	Amendment	  	 	24	  	
6.7	  	Assignment	  	 	24	  	
6.8	  	Exhibits	  	 	25	  	
6.9	  	Headings	  	 	25	  	
6.10	  	Governing Law and Forum	  	 	25	  	
6.11	  	Notices	  	 	25	  	
6.12	  	Exclusion of Other Provisions and Previous Understandings	  	 	26	  	
6.13	  	Conditions Precedent	  	 	26	  	
6.14	  	Termination Events	  	 	27	  	
6.15	  	Effect of Termination	  	 	28	  	
6.16	  	No Construction Against Drafter	  	 	29	  	
		
Exhibit A Contract Specifications	  	 	30	  	

	  	Clause 1 – Definitions	  	Page 2 of 111	

IAE PROPRIETARY INFORMATION
 
TABLE OF CONTENTS

Exhibit A-1 V2524-A5 Turbofan Engine Model Specification	  	 	30	  	
Exhibit A-2 V2527M-A5 Turbofan Engine Model Specification	  	 	32	  	
		
Exhibit B Schedules	  	 	34	  	
		
Exhibit B-1 Aircraft Delivery Schedule	  	 	34	  	
		
Exhibit C Product Support Plan	  	 	37	  	
		
Exhibit D Warranties, Guarantees, and Plans	  	 	59	  	
*****

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 1 – Definitions	  	Page 3 of 111	

IAE PROPRIETARY INFORMATION
 
THIS CONTRACT is made this             day of             , 2006
BETWEEN

IAE INTERNATIONAL AERO ENGINES AG	  	a joint stock company organized and existing under the laws of Switzerland, with a place of business at IAE Building, 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108, USA (hereinafter called “ IAE ”); and	
		
CONTROLADORA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V.	  	a corporation organized and existing under the laws of Mexico (hereinafter called “Vuela”), whose principal place of business is at Av. Prolongación Reforma # 490, Primer Piso, Colonia Lomas Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01210.	
WHEREAS:
 
A.	Vuela has decided to acquire new A320 family aircraft to be powered by IAE V2500 Propulsion Systems, and	
 
B.	IAE is prepared to supply to Vuela V2500 engines, modules, spare parts, special tools, ground equipment, and product support services for the support and operation of the V2500 Propulsion Systems.	
NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
1.	Definitions	
  In this Contract unless the context otherwise requires:-
 
 	1.1	“ Aircraft ” shall mean (i) the ***** firm Airbus A319-100 aircraft powered by new Engines and being acquired by Vuela from Airbus for delivery as set forth in Exhibit B-1 to this Contract (the “ Firm Aircraft ”), and (ii) to the extent that (a) Vuela exercises its option to convert into a firmly ordered aircraft and purchase from the Aircraft Manufacturer one or more of the ***** option Airbus A320 family aircraft (the “ Option Aircraft ”), and/or the ***** rolling option Airbus A320 family aircraft (the “ Rolling Option Aircraft ”) and (b) such Option Aircraft or Rolling Option Aircraft are powered by new Engines, they shall be deemed to be “ Aircraft ” hereunder.	
 
 	1.2	“ Aircraft Manufacturer ” or “ Airbus ” shall mean Airbus S.A.S., with its principal place of business at 1, Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, together with its successors and assigns.	
 
 	1.3	“ Basic Contract Price ” shall mean the basic price of each of the Purchased Items as specified in Exhibit B-2 to this Contract.	
 
 	1.4	“ Certification Authority ” shall mean the regulatory authority referred to in Exhibit A responsible for the type certification of the Engine.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 1 – Definitions	  	Page 4 of 111	

IAE PROPRIETARY INFORMATION
 
 	1.5	“ Contract ” shall mean this Contract together with all exhibits hereto and all letter agreements executed in connection herewith, whether currently existing or hereafter entered into, that by their terms constitute part of this Contract, and as this Contract may be amended, modified or supplemented from time to time	
 
 	1.6	“ Engine(s) ” shall mean the IAE V2500-A5 aero engines described in the Specifications.	
 
 	1.7	“ Initial Provisioning ” shall mean the establishment by Vuela of an initial stock of Spare Parts.	
 
 	1.8	“ Initial Provisioning Data ” shall mean information supplied by IAE to Vuela for Initial Provisioning purposes.	
 
 	1.9	“ Initial Provisioning Orders ” shall mean orders for Spare Parts for Initial Provisioning purposes.	
 
 	1.10	“ Installation Items ” shall mean Engines described in the Specification, modules, accessories, exhaust systems, nacelles and all ancillary equipment therefor which are being supplied pursuant to this Contract for installation on the Aircraft.	
 
 	1.11	“ Lead Time ” shall mean the period specified in the Spare Parts Catalog which represents the minimum time required between acceptance by IAE of an order by Vuela for Supplies and commencement of delivery of such Supplies.	
 
 	1.12	“ Non-Installation Items ” shall mean tools, and all equipment (including handling, transportation and ground equipment) to be supplied pursuant to this Contract for use with the Installation Items and not for installation on the Aircraft.	
 
 	1.13	“ Purchased Items ” shall mean those Spare Engine(s) and Non-Installation Items (if any) specified in Exhibit B-2 to this Contract.	
 
 	1.14	“ Service Bulletins ” shall mean those service bulletins containing advice and instructions issued by IAE to Vuela from time to time in respect of Engines.	
 
 	1.15	“ Spare Parts ” shall mean spare parts for Engines excluding the items listed in the Specification as being items of supply by Vuela.	
 
 	1.16	“ Spare Parts Catalog ” shall mean the catalog published by IAE from time to time providing a description, Lead Time and price for Spare Parts and Vendor Parts available for purchase from IAE.	
 
 	1.17	“ Specification ” shall mean the IAE Engine Specification Nos. IAE S24A5/2 and IAE 27MA5/2, which form Exhibit A to this Contract.	
 
 	1.18	“ Supplies ” shall mean Installation Items, Non-Installation Items, Spare Parts and any other goods or services supplied pursuant to this Contract.	
 
 	1.19	“ Vendor Parts ” shall mean Spare Parts described in Initial Provisioning Data which are not manufactured pursuant to IAE’s detailed design and direction.	

	  	Clause 1 – Definitions	  	Page 5 of 111	

IAE PROPRIETARY INFORMATION
 
2.	Sale of Purchased Items	
 
 	2.1	Intent	
 
 	    	IAE agrees to sell to Vuela and Vuela agrees to buy from IAE, the Purchased Items, in accordance with the provisions of this Contract.	
 
 	2.2	Agreement to Purchase	
 
 	2.2.1	Agreement to Purchase Aircraft from Aircraft Manufacturer	
 
 	    	Vuela agrees to purchase from the Aircraft Manufacturer no less than ***** Firm Aircraft, powered by new V2500 Propulsion Systems for delivery according to the schedule set forth in Exhibit B-1 to this Contract and agrees with IAE that it will accept delivery of the Firm Aircraft according to the schedule set forth in Exhibit B-1 to this Contract. At the time of signature of this Contract it is noted that two (2) of the Firm Aircraft have been purchased by Vuela.	
 
 	    	Vuela has also procured from the Aircraft Manufacturer options to purchase ***** Option Aircraft and ***** Rolling Options Aircraft. Vuela agrees that to the extent it purchases A320 family aircraft in addition to the Firm Aircraft, until it has purchased the Requisite Number of additional A320 family aircraft all such aircraft shall be powered by V2500-A5 engines and become “ Aircraft ” hereunder. *****	
 
 	2.2.2	Agreement to Purchase Purchased Items from IAE	
 
 	(a)	Vuela hereby places a firm and unconditional order with IAE for the purchase of ***** new V2527M-A5 spare Engines (the “ Firm Spare Engines ”) for delivery according to the schedule set forth in Exhibit B-2 to this Contract, and IAE agrees to sell such Firm Spare Engines to Vuela.	
 
 	(b)	Vuela agrees to place a firm and unconditional order with IAE for the purchase of sufficient quantities and appropriate thrust ratings of Spare Engines (the “ Option Spare Engines ”) to support the Option Aircraft and Rolling Option Aircraft ordered and acquired by Vuela such that a Spare Engine to installed Engine ratio of not less than ***** is maintained across Vuela fleet, and IAE agrees to sell such Option Spare Engines to Vuela.	
 
 	2.3	Type Approval and Changes in Specification	
 
 	2.3.1	The Purchased Items will be manufactured to the standards set forth in the Specification. After the date of this Contract, the Purchased Items	

 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 2 – Sale of Purchased Items	  	Page 6 of 111	

IAE PROPRIETARY INFORMATION
 
 	may be varied from the standards set forth in the Specification and other IAE manufacturing specifications from time to time by Change Orders in writing, which shall set forth in detail:	
 
 	(a)	The changes to be made in the Purchased Items; and	
 
 	(b)	The effect (if any) of such changes on the Specification (including but not limited to performance and weight), on interchangeability of the Purchased Items in the airframe, on prices and on dates of delivery of the Purchased Items.	
Change Orders shall not be binding on either party until signed by IAE and Vuela but upon being so signed shall constitute amendments to this Contract.
 
 	2.3.2	IAE may make any changes in the Purchased Items which do not adversely affect the Specification, (including but not limited to performance and weight), interchangeability of the Purchased Items in the airframe, prices or dates of delivery of the Purchased Items. In the case of such permitted changes, a Change Order shall not be required or if issued shall not be binding until signed by IAE and Vuela.	
 
 	2.3.3	At the time of delivery of the Purchased Items there is to be in existence a Type Approval Certificate for the Purchased Items in accordance with the provisions of the Specification.	
 
 	2.3.4	The Specification has been drawn with a view to the requirements of the Certification Authority and the official interpretations of such requirements in existence at the date of this Contract (such requirements and interpretations being hereinafter referred to as “ Current Rules ”). Subject to Clause 2.3.2 above, IAE and Vuela agree that they will execute an appropriate Change Order in respect of any change required to the Purchased Items to enable such Purchased Items to conform to the requirements of the Certification Authority and the official interpretations of such requirements in force at the date of delivery of such Purchased Items.	
 
 	2.3.5	The price of any Change Order is to be paid:	
 
 	(a)	in the case of changes required to conform to the Current Rules or to enable the Spare Engines to conform to the requirements of this Contract - by IAE; and	
 
 	(b)	in any other case - by Vuela.	
 
 	2.4	Inspection and Acceptance	
 
 	2.4.1	Conformance of Purchased Items which are Engines to the Specification will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. An Export Certificate	
 	of Airworthiness or a Certificate of Conformity (as the case may be) will be issued and signed by personnel authorized for such purposes.	

	  	Clause 2 – Sale of Purchased Items	  	Page 7 of 111	

IAE PROPRIETARY INFORMATION
 
 	2.4.2	Conformance of Purchased Items which are Non-Installation Items to the Specification will be assured by IAE conformance documentation.	
 
 	2.4.3	Upon delivery pursuant to Clause 2.5.1 below and the issue of an Export Certificate of Airworthiness or a Certificate of Conformity pursuant to Clause 2.4.1 above or IAE conformance documentation pursuant Clause 2.4.2 above, Vuela shall be deemed to have accepted the Purchased Items and that the Purchased Items conform to the Specification. Vuela’s acceptance will in no way prejudice its warranty and support rights under this Contract. IAE shall, upon written request from Vuela and subject to the permission of the appropriate governmental authorities, arrange for Vuela to have reasonable access to the appropriate premises in order to examine the Purchased Items prior to the issue of conformance documentation and to witness Engine acceptance tests.	
 
 	2.4.4	If Vuela is unable to accept, refuses without reasonable cause or otherwise materially hinders delivery, or if IAE at Vuela’s written request agrees to delay delivery, of any of the Purchased Items for ***** from the scheduled date of delivery, unless otherwise mutually agreed, Vuela shall nevertheless pay or cause IAE to be paid therefor as if, for the purposes of payment and transfer of title only, the Purchased Items had been delivered.	
 
 	2.4.5	In any of the cases specified in Clause 2.4.4 above, Vuela shall also pay to IAE such reasonable sum as IAE shall require in respect of storage, maintenance and insurance of those Purchased Items; provided, that Vuela shall be entitled to receive the insurance proceeds of any loss or damage to any Purchased Items for which it has paid IAE.	
 
 	2.4.6	If IAE is unable to deliver a Spare Engine in accordance with the terms of this Contract, Clauses 2.4.4 and 2.4.5 shall not apply.	
 
 	2.5	Delivery, Shipping, Title and Risk of Loss or Damage	
 
 	2.5.1	IAE will deliver the Purchased Items, at its option, either Ex-Works (INCOTERMS 2000) Connecticut, United States of America or Ex-Works (INCOTERMS 2000) Derby, England, in accordance with the delivery schedule set out in Exhibit B-2 to this Contract. IAE will make reasonable efforts to deliver Vuela’s Spare Engines Ex-Works Connecticut U.S.A. (taking into consideration production schedules and other relevant and material factors.)	
 
 	2.5.2	Upon such delivery, title to and risk of loss of or damage to the Purchased Items shall pass to Vuela.	
 
 	2.5.3	Vuela will notify IAE at least ***** before the scheduled time for delivery of the Purchased Items of its instructions as to the marking and shipping of the Purchased Items.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 2 – Sale of Purchased Items	  	Page 8 of 111	

IAE PROPRIETARY INFORMATION
 
 	2.6	Price	
 
 	    	The Purchase Price for each of the Purchased Items shall be the Basic Contract Price, amended pursuant to Clause 2.3 above, and escalated in accordance with the escalation formula contained in Exhibit B-2 to this Contract.	
 
 	2.7	Payment	
 
 	2.7.1	Vuela will make payment in United States Dollars as follows:	
 
 	(a)	*****, to the extent that such amount has not already been paid by Vuela, Vuela shall pay to IAE a non-refundable deposit of ***** of the Estimated Purchase Price of the Purchased Items.	
 
 	(b)	***** before the scheduled delivery of each of the Purchased Items, Vuela shall pay to IAE a further non-refundable deposit of ***** of the Estimated Purchase Price of such item.	
 
 	(c)	***** before the scheduled delivery of each of the Purchased Items, Vuela shall pay to IAE a further non-refundable deposit of ***** of the Estimated Purchase Price of such item.	
 
 	(d)	Immediately prior to the delivery of each of the Purchased Items, Vuela shall pay to IAE the balance of the Purchase Price of such item.	
 
 	2.7.2	IAE shall have the right to require Vuela to make additional deposits in respect of price changes arising from the provisions of Clause 2.3 above on a similar basis to that specified in Clause 2.7.1 above if the change is requested by Vuela.	
 
 	2.7.3	Vuela undertakes that IAE shall receive the full amount of payments falling due under this Clause 2.7, without any withholding or deduction whatsoever, other than withholdings or deductions required by law for Taxes for which IAE is responsible in accordance with Clause 6.5.	
 
 	2.7.4	All payments under this Clause 2.7 shall be made by cable or telegraphic transfer and shall be deposited not later than the due date of payment with:	
Bank of America 1185
Ave of the Americas
New York, NY 10038-4924
*****
 
 	    	or as otherwise notified from time to time by IAE.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 2 – Sale of Purchased Items	  	Page 9 of 111	

IAE PROPRIETARY INFORMATION
 
 	2.7.5	For the purpose of this Clause 2.7 “payment” shall only be deemed to have been made to the extent cleared or good value funds are received in the numbered IAE bank account specified in Clause 2.7.4 above.	
 
 	2.7.6	If Vuela fails to make any payment for any Purchased Item on or before the date when such payment is due, then, without prejudice to any of IAE’s other rights, IAE will (a) be entitled to charge interest on the overdue amount, at the rate of *****, from the date such payment was due to the date such payment is made and (b) have the right (but not the obligation) to suspend work on the manufacture of such Purchased Item pending the remedy of such failure and to reschedule the date of delivery of such Purchased Item following the cure of such failure.	
 
 	2.7.7	For the purpose of this Clause 2.7, the “Estimated Purchase Pri ce ” of any of the Purchased Items shall be calculated in accordance with the following formula.	
*****
where:
*****
 
 	2.7.8	Those payments referred to in Clause 2.7.1 above as “non-refundable” shall be refunded to Vuela in the event Vuela validly (a) exercises its right to cancel its order for a Spare Engine pursuant to Clause 6.1.5 hereunder, or (b) terminates this Contract pursuant to a Vuela Termination Event in accordance with Clause 6.14 hereunder.	
 
3.	Spare Parts Provisions	
 
 	3.1	Intent and Term	
 
 	3.1.1	For as long as Vuela owns and operates one or more Aircraft in regular commercial service and is not in breach of any of its obligations to IAE under the Contract, IAE shall provide that reasonably adequate supplies of Spare Parts are available for sale to Vuela under this Contract. In consideration thereof, IAE shall sell to Vuela and, except as otherwise provided under Clause 3.1.2 below, Vuela shall buy from IAE, Vuela’s requirements of the following Spare Parts:	
 
 	(a)	All Spare Parts manufactured pursuant to the detailed design and order of IAE where IAE is the only source from which Vuela can purchase in an unused condition and in quantities sufficient to meet Vuela’s requirements; and	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 3 – Spare Parts Provisions	  	Page 10 of 111	

IAE PROPRIETARY INFORMATION
 
 	(b)	Vendor Parts for which direct supply arrangements between the manufacturers of such Vendor Parts and Vuela cannot be established. Except for the purposes of Initial Provisioning pursuant to Clause 3.3 below, Vuela shall notify IAE in writing not less than ***** before scheduled delivery requested by Vuela that Vuela intends to purchase such Vendor Parts from IAE. If Vuela notifies IAE less than ***** before the scheduled delivery requested by Vuela, IAE will use reasonable efforts to obtain such vendor Parts for sale to Vuela.	
 
 	3.1.2	In an emergency, IAE shall sell to Vuela Vendor Parts which it is not obliged to sell under this Contract, but which it has in stock or otherwise has reasonably available to it.	
 
 	3.1.3	Purchase by Vuela from Others	
 
 	(a)	Vuela may purchase from another A320 family aircraft operator Spare Parts, which by virtue of Clause 3.1.1 above are required to be purchased from IAE:	
 
 	(i)	on an occasional basis; or	
 
 	(ii)	where the said operator has published details of excessive stock holdings of the Spare Parts concerned; or	
 
 	(iii)	pursuant to a pooling arrangement or joint use agreement between Vuela and the said operator.	
 
 	(b)	Subject to the conditions specified below, in the following circumstances Vuela may obtain from established and IAE approved sources, other than IAE or other Aircraft operators, Spare Parts which by virtue of Clause 3.1.1 above are required to be purchased from IAE:	
 
 	(i)	as a temporary expedient in the event of a temporary but material failure by IAE to supply Spare Parts as required herein; or	
 
 	(ii)	during any period when IAE is hindered or prevented from delivering Spare Parts due to circumstances beyond its control provided Vuela is thereby able to obtain the Spare Parts it requires sooner than IAE is able to supply them, and provided further that Vuela will not unreasonably thereby increase its stock of the Spare Parts; or	
 
 	(iii)	where IAE identifies a Spare Part as a standard part.	
Vuela’s rights under Clause 3.1.3(b) above are subject to Vuela being unable to satisfy its requirements for Spare Parts under the provisions of Clause 3.1.3(a) above.
 
 	(c)	Nothing in this Clause 3.1.2 shall be deemed to extend the obligations of IAE or to diminish the limitations upon such obligations under the Warranties referred to in Clauses 4.1 and 4.2 below.	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 3 – Spare Parts Provisions	  	Page 11 of 111	

IAE PROPRIETARY INFORMATION
 
 	(d)	Notwithstanding any extension of the time of delivery in accordance with the provisions of Clause 6.1.1 below, Vuela shall be entitled to cancel all or part of any order on IAE for Spare Parts which, pursuant to the terms of Clauses 3.1.3(b)(i) and 3.1.3(b)(ii) are purchased from another source by giving reasonable written notice to IAE of cancellation of the said order.	
 
 	(e)	In the event that Vuela purchases Spare Parts under Clause 3.1.2, Vuela shall give written notice to IAE of the extent of such purchase supported by any other technical information which IAE may reasonably require.	
 
 	3.2	ATA Standards	
 
 	    	The parties to this Contract shall comply with the requirements of shipping procedures outlined in ATA Specifications 2000 and 300, provided that the parties shall be entitled to negotiate reasonable changes in those procedures or requirements of the said specifications which, if complied with exactly, would result in an undue operating burden or unnecessary economic penalty. In particular, on written notification by Vuela to IAE prior to placement of Initial Provisioning orders, IAE would agree to the use of ATA Specification 200 instead of ATA Specification 2000.	
 
 	3.3	Initial Provisioning	
 
 	3.3.1	To assist Vuela’s Initial Provisioning, IAE shall supply Vuela with Initial Provisioning Data in accordance with ATA Specification 2000, subject to Clause 3.2 above.	
 
 	3.3.2	Details of the format and precise nature of the said Initial Provisioning Data, including the applicable revision numbers of ATA Specification 2000, definition of Spare Parts Categories, and Lead Times, and agreement on technical publications shall be agreed between IAE and Vuela at a preliminary meeting held for this purpose at a time and place to be agreed.	
 
 	3.3.3	The said Initial Provisioning Data shall cover all Spare Parts, including agreed Vendor Parts, which in IAE’s opinion may be reasonably required for Vuela’s operation of the Installation Items.	
 
 	3.3.4	Before Vuela places Initial Provisioning Orders, a conference shall be held for the review of Initial Provisioning Data supplied by IAE under Clause 3.3.1 above. The said conference shall be held as soon as possible after this Contract is signed and shall be attended by the personnel of each party directly responsible for Initial Provisioning.	

	  	Clause 3 – Spare Parts Provisions	  	Page 12 of 111	

IAE PROPRIETARY INFORMATION
 
 	3.4	Change in Initial Provisioning Data	
 
 	    	IAE shall, free of charge, progressively and promptly revise Initial Provisioning Data in accordance with ATA Specification 2000 to take into account any changes which may materially affect provisioning decisions.	
 
 	3.5	Stocking of Spare Parts	
 
 	    	Upon IAE’s request, Vuela shall provide IAE with information reasonably required to enable IAE to plan and organize the manufacture and stocking of Spare Parts.	
 
 	3.6	Lead Times	
 
 	3.6.1	Spare Parts for Initial Provisioning shall be delivered on or before the dates specified in Vuela’s orders, provided that said dates comply with the lead time of at least ***** prior to the delivery date of the order and do not call for delivery more than ***** before the scheduled date of delivery of the first Aircraft to Vuela and provided further that delivery of the total Initial Provisioning quantity shall be effected in line with Vuela’s delivery schedule and Aircraft utilization.	
 
 	3.6.2	Except as herein provided, replenishment Spare Parts shall be delivered within the Lead Time specified in the IAE Spare Parts Catalog, except for certain major Spare Parts designated in the Spare Parts catalog as being available at prices and lead times to be quoted upon request.	
 
 	3.6.3	If any order for replenishment Spare Parts shall call for a quantity materially in excess of Vuela’s normal requirements, IAE shall notify Vuela and may request a special delivery schedule. If Vuela confirms that the full quantity ordered is required, delivery of the order shall be effected at delivery dates specified by IAE, but the Lead Times provided by this Clause shall not apply with respect to the excess quantity.	
 
 	3.6.4	In an emergency, IAE shall use reasonable efforts to deliver all Spare Parts within the time limits specified by Vuela. IAE will provide notice of the action to be taken on such orders within the following time periods from IAE’s receipt of such notice and based on the type of order:	
 
 	(a)	AOG (Aircraft on Ground) orders - within 4 hours;	
 
 	(b)	Critical (imminent AOG or work stoppage or other emergency order) - within 24 hours;	
 
 	(c)	Expedite (less than published or quoted lead time) - within 7 days.	
 
 	3.7	Ordering Procedure	
 
 	3.7.1	After receipt of Initial Provisioning Data, Vuela shall place its Initial Provisioning Orders at least ***** to the requested delivery date of the order in accordance with the Lead Times specified in Clause 3.6.1. Vuela shall use its best efforts to give priority to ordering major items designated in the Initial Provisioning Data.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 3 – Spare Parts Provisions	  	Page 13 of 111	

IAE PROPRIETARY INFORMATION
 
 	3.7.2	Subsequent orders for Spare Parts shall be placed by Vuela from time to time as may be appropriate to adequately support Vuela’s operation. Vuela shall give IAE as much notice as reasonably possible of any material change in its operation and maintenance of the Aircraft, including, but not limited to, changes in maintenance or overhaul arrangements affecting its requirements of Spare Parts, including Vendor Parts.	
 
 	3.7.3	IAE shall promptly acknowledge receipt of each order for Spare Parts in accordance with ATA Specification 2000 procedure. Unless qualified, such acknowledgment, subject to variation in accordance with Clause 3.6.3 above, shall constitute an acceptance of the order under the terms of this Contract.	
 
 	3.7.4	Standard package quantities shall be delivered and packed in accordance with the Spare Parts Catalog.	
 
 	3.7.5	Not later than one (1) month prior to the time of placing Initial Provisioning Orders, Vuela shall provide IAE in writing with full shipping instructions applicable to both Initial Provisioning Orders and to subsequent standard replenishment orders for Spare Parts to be placed by Vuela. Vuela may from time to time provide different shipping instructions by written notice to IAE.	
 
 	3.8	Modifications to Spare Parts	
 
 	3.8.1	IAE shall be entitled to make modifications or changes to the Spare Parts ordered by Vuela hereunder and modified spare parts shall be substituted for spare parts ordered, unless (with respect to modifications categorized in Service Bulletins as recommended or optional category) the modifications are considered by Vuela to be unacceptable and Vuela so states in writing to IAE within ninety (90) days of the transmittal date of a Service Bulletin, in which case Vuela shall be entitled to place a single order for Vuela’s anticipated total requirement of pre-modified Spare Parts (subject to availability), at a price and delivery schedule to be agreed. IAE shall promptly inform Vuela by means of Service Bulletins when such modified Spare Parts (or Spare Parts introduced by a repair scheme) become available for supply hereunder. Notification of such availability shall be given to Vuela before delivery.	
 
 	3.8.2	Unless Vuela notifies IAE in writing under the provisions of Clause 3.8.1 hereof, IAE may supply at the expense of Vuela a modification of any Spare Part ordered, provided that the said modification has received the approval of the Certification Authority. The delivery of such Spare Parts shall begin on dates indicated by Service Bulletin. The delivery schedule shall be agreed at the time when orders for modifications are accepted by IAE.	

	  	Clause 3 – Spare Parts Provisions	  	Page 14 of 111	

IAE PROPRIETARY INFORMATION
 
 	3.9	Inspection	
 
 	3.9.1	Conformance to the Specification of Installation Items will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. Conformance documentation will be issued by IAE to Vuela and signed by IAE personnel authorized for such purpose.	
 
 	3.9.2	Conformance of Non-Installation Items will be assured by IAE conformance documentation.	
 
 	3.9.3	Upon the issue of conformance documentation in accordance with Clauses 3.9.1 or 3.9.2 above, and provided the same shall not have been manifestly issued in error, Vuela shall be deemed to have accepted the Installation Items and Non-Installation Items and that such Items conform to the applicable specification, without prejudice to any of Vuela’s warranty and other rights under this Contract.	
 
 	3.10	Delivery and Packing	
 
 	3.10.1	IAE shall deliver Spare Parts Non-Installation Items Ex-Works (INCOTERMS 2000), the point of manufacture. Shipping documents and invoices shall be in accordance with ATA Specification 2000.	
 
 	3.10.2	Upon such delivery as described in Clause 3.10.1, title to and risk of loss of or damage to the said Spare Parts and Non-Installation Items shall pass to Vuela.	
 
 	3.10.3	In accordance with ATA Specification 2000 requirements, Vuela shall advise IAE at time of order of its instructions as to the marking and shipping of the Spare Parts and Non-Installation Items.	
 
 	3.10.4	The packaging of Spare Parts shall be in accordance with ATA Specification 300 Category 2 standard, unless deviations are otherwise agreed pursuant to Clause 3.2 and shall be free of charge to Vuela. Category 1 standard packaging, if required by Vuela, shall be paid for by Vuela.	
 
 	3.11	Prices	
 
 	3.11.1	Prices of all Spare Parts shall be quoted in U.S. Dollars, in the Spare Parts Price Catalog, or Initial Provisioning Data, or in individual quotations. Such prices shall represent net unit prices, Ex-Works (INCOTERMS 2000), IAE point of manufacture according to Clause 3.10.1 above.	
Prices and Lead Times in the Spare Parts Price Catalog or by individual quotations are valid for the time period as listed in the Spare Parts Catalog or as shown in the quotation.

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IAE PROPRIETARY INFORMATION
 
 	3.11.2	Prices applicable to each order placed by Vuela hereunder shall be the prices in effect according to the terms of the Spare Parts Price Catalog at the time of scheduled delivery.	
 
 	3.11.3	IAE may from time to time adjust its prices for Spare Parts upon not less than ninety (90) days’ notice to Vuela. Any individual price errors in the calculation of prices may be corrected without advance notice to Vuela.	
 
 	3.11.4	On request by Vuela, prices of Spare Parts or other materials not included in the Spare Parts Price Catalog shall be quoted within a reasonable time by IAE.	
 
 	3.12	Payment	
 
 	3.12.1	Payment for all purchases under this Clause 3 shall be made by Vuela to IAE ***** after the date of ex works delivery.	
 
 	3.12.2	Vuela undertakes that IAE shall receive payment in U.S. Dollars of the full amount of payments falling due under this Clause 3.12, without any withholding or deduction whatsoever.	
 
 	3.12.3	All payments under this Clause 3.12 shall be made by wire transfer to, and shall be deposited not later than the due date of payment with:	
Bank of America
1185 Ave of the Americas New York,
NY 10038-4924
*****
 
 	    	or as otherwise notified from time to time by IAE.	
 
 	3.12.4	For the purpose of this Clause 3.12, payment shall only be deemed to have been made to the extent immediately available funds are received in the account specified in sub-clause 3.12.3 above.	
 
 	3.12.5	Notwithstanding Clause 3.12.1 above, payments for all purchases shall be due from Vuela upon delivery, or at IAE’s option prior to delivery of the purchased items upon the occurrence and during the continuation of any of the following events: (a) a receiver or trustee is appointed for all or a substantial part of Vuela’s property, or (b) Vuela is adjudicated or voluntarily becomes a bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) Vuela becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a valid, final material judgment rendered against Vuela, or (e) Vuela is unable or refuses to make any undisputed payment to IAE in accordance with any of Vuela’s obligations to IAE.	
 
 	3.12.6	If Vuela fails to make any payment for any Spare Parts or Non-Installation Items on or before the date when such payment is due, then,	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 3 – Spare Parts Provisions	  	Page 16 of 111	

IAE PROPRIETARY INFORMATION
 
 	without prejudice to any other rights set forth herein or under applicable law, IAE will be entitled to charge interest on the overdue amount, at the rate of *****, from the date such payment was due to the date such payment is made.	
 
 	3.13	Conflict	
 
 	    	In the event of any conflict between the provisions of this Contract and the provisions of ATA Specifications 101, 2000 and 300, or purchase orders from Vuela the provisions of this Contract shall prevail.	
 
4.	Warranties, Guarantees and Liabilities	
 
 	4.1	IAE warrants to Vuela that, at the time of delivery, the Supplies sold hereunder will be free of defects in material and manufacture, and will conform substantially to applicable specifications and rules and regulations of the Certification Authority. IAE’s liability and Vuela’s remedies under this warranty are limited to the repair or replacement, at IAE’s election, of Supplies or parts thereof returned to IAE at the factory of manufacture which are shown to IAE’s reasonable satisfaction to have been defective; provided, that written notice of the defect shall have been given by Vuela to IAE within ninety (90) days after the first operation or use of the Supplies (or if the Supplies are installed in Vuela Aircraft, within ninety (90) days after acceptance of such Aircraft by its first operator) or within thirty (30) days after the defect has become apparent, but in no event later than one (1) year after the date of delivery of such Supplies by IAE. Transportation charges for the return of Supplies to IAE pursuant to this Clause and their reshipment to Vuela and the risk of loss thereof will be borne by IAE only if the Supplies are returned in accordance with written shipping instructions from IAE, and are defective.	
 
 	4.2	In addition, IAE grants and Vuela accepts the following:	
 
 	    	*****	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 4 – Warranties, Guarantees and	  	Page 17 of 111	

IAE PROPRIETARY INFORMATION
 
 	    	The Service Policies, Warranties and Guarantees referred to in this Clause 4.2 are hereinafter called the “Warranties”. The above Service Policies, Warranties and Guarantees together form Exhibit D to this Contract.	
 
 	4.3	The parties agree that those of the Warranties set out in Clauses 4.2.1 and 4.2.2 above shall also apply to any equipment which falls within the type of equipment covered by those Warranties, which are manufactured, supplied or inspected by IAE howsoever and whenever (whether before, on or after the date first above written) acquired by Vuela from whatsoever source, including but not limited to any V2500 aero engines and any associated equipment therefor, and any parts for such engines and associated equipment which form part of any aircraft (including the Aircraft) acquired from the Manufacturer.	
 
 	4.4	The Warranties are personal to Vuela and the obligations of IAE thereunder shall only apply insofar as Vuela operates the Supplies covered thereunder. Notwithstanding the foregoing, with IAE’s written consent (not to be unreasonably withheld) Vuela may assign the Warranties set out in Clauses 4.1, 4.21 and 4.2.2 above to a third party in connection with the financing (including sale leasebacks or similar transactions) of the Aircraft.	
 
 	4.5	Vuela shall inform any entity to whom it sells, leases, loans or otherwise disposes of any of the Supplies or equipment referred to in Clause 4.3 above that such entity may obtain from IAE, and upon request from Vuela, IAE hereby agrees to use all reasonable endeavors to enter into a direct warranty agreement with any such entity (at no additional charge to Vuela or such entity) incorporating those of the Warranties set out in Clauses 4.1, 4.2.1 and 4.2.2. Vuela shall also use its reasonable endeavors to ensure that such entity shall enter into a direct warranty agreement with IAE prior to delivery of any of the Supplies or such equipment to such entity.	
 
 	4.6	IAE and Vuela agree that the intent of the Warranties provided in Clause 4.2 is to provide specified benefits or remedies to Vuela as a result of specified events. It is not the intent, however, to duplicate benefits or remedies provided to Vuela by IAE or another source (e.g., another equipment manufacturer or lessor) as a result of the same event or cause. Therefore, notwithstanding the terms of the Warranties, Vuela agrees that it shall not be eligible to receive benefits or remedies from IAE if it stands to receive or has received duplicate benefits or remedies from IAE or another source as a result of the same event or cause. Furthermore, in no event shall IAE be required to provide duplicate benefits to Vuela and any other party such as a leasing company as a result of the same event or cause.	
 
 	    	Notwithstanding the above, as may arise, the following Guarantees may be used in combination with the warranties provided under Clause 4:	
 
 	    	*****	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 4 – Warranties, Guarantees and	  	Page 18 of 111	

IAE PROPRIETARY INFORMATION
 
 	4.7	Vuela accepts that the Warranties and rights granted to Vuela under Clauses 4.1, 4.2 and 4.3 above together with the express remedies provided to Vuela in respect of the Supplies in accordance with this Contract are expressly in lieu of, and Vuela hereby waives, all other remedies, conditions and warranties, expressed or implied including without limitation, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, and all other obligations and liabilities whatsoever of IAE and of its shareholders whether in contract or in tort or otherwise for any defect, deficiency, failure, malfunctioning or failure to function of any item of the Supplies or of the equipment referred to in Clause 4.3 above, howsoever and whenever acquired by Vuela from whatever sources. Vuela agrees that neither IAE nor any of its shareholders shall be liable to Vuela upon any claim therefor or upon any claim howsoever arising out of the manufacture or supply or inspection by IAE or any of its shareholders of any item of the Supplies or of such equipment or any other item of whatever nature, whether in contract or in tort or otherwise, except as expressly provided in the said Warranties, and Vuela assumes all risk and liability whatsoever not expressly assumed by IAE in the said Warranties. Except as may be otherwise agreed in this Contract, in no event shall IAE be liable to Vuela for special, incidental or consequential damages under this Contract, including damage to or loss of use, revenue or profit with respect to any Aircraft and/or Supplies.	
 
 	4.8	IAE and Vuela agree that this Clause 4 has been the subject of discussion and negotiation, is fully understood by the parties and the price of the Supplies and other mutual agreements of the parties set forth in this Contract are arrived at in consideration of:	
 
 	4.8.1	the express Warranties of IAE and Vuela’s rights thereunder; and	
 
 	4.8.2	the exclusions, waivers and limitations set forth in Clause 4.7 above.	
 
 	4.9	In consideration for the Warranties set out in Clauses 4.2.1 and 4.2.2. and coverage under the Fleet Hour Agreement, Vuela agrees that it will continue operation of the Installed and Spare Engines it purchases from IAE until the Engines have been operated for no less than ***** hours. Should Vuela decide to discontinue operation of any of the Engines prior to the ***** hour period, Vuela agrees to give IAE the option to purchase any such Engines at the then prevailing fair market value. Said conditions shall apply to any third party to which Vuela may sell, lease, loan or otherwise dispose of the Engines.	
 
5.	Product Support Services	
 
 	5.1	IAE will make available to Vuela the Product Support Services described in Exhibit C to this Contract. Except when identified in such Exhibit C as being at additional cost or as requiring separate contractual arrangements, such Product Support Services shall be supplied at no additional charge to Vuela and subject to the provisions of this Contract. IAE may delegate the performance of product support services to an affiliated company or any of IAE’s shareholders.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 5 – Product Support Services	  	Page 19 of 111	

IAE PROPRIETARY INFORMATION
 
 	5.2	Vuela will provide to any IAE customer support representative(s) working at its facility, free of charge:	
 
 	5.2.1	reasonable, secure office accommodation including furniture and office equipment and	
 
 	5.2.2	access to telephone, facsimile and secretarial services and	
 
 	5.2.3	access to such first-aid and emergency assistance as is customarily provided to Vuela’s own employees and	
 
 	5.2.4	air travel on Vuela’s network for travel away from such customer support representative(s)’ normal location at Vuela with respect to the provision of support under this Contract. Should Vuela request such representative to travel to a location not reached by Vuela’s network, Vuela will reimburse IAE for related travel expenses.	
 
 	    	Vuela further agrees that such customer support representative(s) will be entitled to all reasonable absences from work allowed pursuant to normal IAE practice, including but not limited to, leaves of absence relating to vacation, holiday and sick time.	
 
 	    	It is expressly agreed that such customer support representatives shall at no time be considered employees of Vuela and that Vuela shall not be responsible for the payment of such customer support representatives’ salary or benefits.	
 
6.	Miscellaneous	
 
 	6.1	Delay in Delivery	
 
 	6.1.1	If IAE is hindered or prevented from performing any obligation hereunder including but not limited to delivering any of the Supplies within the time for delivery specified in this Contract (as such time may be extended pursuant to the provisions of this Contract) by reason of:	
 
 	(a)	any cause beyond the reasonable control of IAE, or	
 
 	(b)	fires, industrial disputes or introduction of essential modifications required by the Certification Authority	
 
 	    	then, subject to the provisions of Clause 6.1.5 hereunder, the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented, and IAE shall not be under any liability whatsoever in respect of such delay.	
 
 	6.1.2	If, by reason of any of the causes specified in Clause 6.1.1 above, IAE is hindered or prevented from delivering any goods (which are the same as and include the Supplies) to purchasers (including Vuela) then IAE shall have the right to allocate in good faith such goods, as they become available, at its own discretion among all such purchasers and IAE shall not be under any liability whatsoever to Vuela for delay in delivery to Vuela resulting from such allocation by IAE and the time for delivery shall be extended by a period equal to the delay resulting from such allocation by IAE.	

	  	Clause 6 – Miscellaneous	  	Page 20 of 111	

IAE PROPRIETARY INFORMATION
 
 	6.1.3	Should IAE delay performance of any obligation hereunder, including but not limited to delivery of any item of the Supplies beyond the time for delivery specified in this Contract (as such time may be extended pursuant to the provisions of this Contract) for any reason other than the causes specified in Clause 6.1.1 above, then in respect of the ***** of such delay, IAE shall not be under any liability whatsoever and thereafter in respect of any further delay in delivery the damages recoverable by Vuela from IAE as Vuela’s sole remedy shall be its reasonable actual damages in an amount not to exceed ***** of the purchase price of the item of Supplies so delayed in respect of each month of such further delay (and prorata for any period of less than one month) subject to an overall maximum of ***** of the purchase price of the item of the Supplies so delayed.	
 
 	6.1.4	The right of Vuela to claim damages pursuant to Clause 6.1.3 shall be conditional upon the submission of a written claim therefor, within ***** from the date on which IAE notifies Vuela that the item of the Supplies so delayed is ready for delivery, or from the date on which Vuela exercises the right of cancellation in respect of such item conferred in accordance with Clause 6.1.5 below, whichever date shall first occur.	
 
 	6.1.5	Should IAE delay performance of any obligation hereunder including but not limited to delivery of any item of the Supplies beyond ***** from the time for delivery specified in this Contract (as such time may be extended pursuant to the provisions of this Contract) then, in addition to the right of Vuela under Clause 6.1.3, Vuela shall be entitled to refuse to take delivery of such item on giving IAE notice in writing within ***** after the expiration of such period of *****. Upon receipt of such notice IAE shall be free from any obligation in respect of such item except that IAE shall refund to Vuela any deposits made in respect of the purchase price of such item of the Supplies, together with interest from the date such deposits were received by IAE, calculated at the rate of *****, until the date they are returned to Vuela.	
 
 	6.1.6	No escalation shall apply during any period of delay unless such period of delay is caused by any of the causes specified in Clause 6.1.1.	
 
 	6.2	Patents	
 
 	6.2.1	IAE shall, subject to the conditions set out in this Clause and as the sole liability of IAE in respect of any claims for infringement of intellectual property rights, indemnify Vuela against any claim that the use of any of the Supplies by Vuela within any country to which at the date of such claim the benefits of Article 27 of the Convention on International Civil Aviation of 7th December 1944 (The Chicago Convention) apply, infringes any patent, design, or model duly granted or registered	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 6 – Miscellaneous	  	Page 21 of 111	

IAE PROPRIETARY INFORMATION
 
 	provided, however, that IAE shall not be liable to Vuela for any consequential damage or any loss of use of the Supplies or of the Aircraft in which the Supplies may be incorporated arising as a result directly or indirectly of any such claim.	
 
 	6.2.2	Vuela will give prompt notice in writing to IAE of any such claim whereupon IAE shall have the right at its own expense to assume the defense of or to dispose of or to settle such claim in its sole discretion. Vuela will give IAE all reasonable assistance and IAE will reimburse Vuela for its reasonable out-of-pocket expenses for providing such assistance to IAE. In addition, Vuela will not by any voluntary act or omission do knowingly anything which may directly or indirectly materially prejudice IAE in this connection.	
 
 	6.2.3	IAE shall at its option and own expense either (i) substitute for any allegedly infringing Supplies substantially equivalent non-infringing supplies, (ii) procure for Vuela the right to use any infringing Supplies or (iii) modify any infringing Supplies so they become non-infringing.	
 
 	6.2.4	The indemnity contained in Clause 6.2.1 above shall not apply to claims for infringement in respect of (i) Supplies manufactured to the specific design instructions of Vuela; (ii) Supplies not of IAE design (but IAE shall in the event of any claim for infringement pass on to Vuela so far as it has the right to do so the benefits of any indemnity given to IAE by the designer, manufacturer or supplier of such Supplies); (iii) the manner or method in which any of the Supplies is installed in the Aircraft; or (iv) any combination of any of the Supplies with any item or items other than Supplies.	
 
 	6.3	Credit Reimbursement and Right of Setoff.	
 
 	    	If Vuela does not take delivery of ***** Firm Aircraft and ***** Firm Spare Engines, IAE shall have the right to adjust the base credits granted on each of such sixteen (16) Firm Aircraft and three (3) Firm Spare Engines acquired by Vuela by the amount of ***** per Firm Aircraft and Firm Spare Engine not purchased by Vuela. Following such adjustment, Vuela will promptly reimburse IAE in an amount equal to (a) the value of the credits actually provided in excess of the adjusted amounts, plus (b) the interest on such excess amounts calculated from the time each respective amount was applied or value received until reimbursement. Interest will be calculated at *****.	
 
 	    	IAE shall without prejudice to any of its other rights have the right to set off against the credits that are from time to time made available by IAE under this Contract (either directly to Vuela or via the Aircraft Manufacturer or its affiliates), the amount of any undisputed payment for which Vuela remains in default after any applicable grace period, under (a) this Contract, or (b) any other agreement between IAE and Vuela. For the avoidance of doubt, IAE’s rights under this paragraph are in addition to all other rights and remedies IAE may have available under this Contract or under law, provided, that IAE shall be entitled to recover any payment for which Vuela is in default through the exercise of such rights under this paragraph and/or such other rights or remedies, without duplication.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 6 – Miscellaneous	  	Page 22 of 111	

IAE PROPRIETARY INFORMATION
 
 	6.4	Non-Disclosure and Non-Use	
 
 	6.4.1	Subject to Clause 6.4.3 below, each party agrees not to disclose to any third party (other than professional advisers of such party who agree to abide in advance by the non-disclosure requirements set forth in this Clause 6.4) any Information which it acquires directly or indirectly from IAE and agrees not to use the same other than for the purpose for which it was disclosed or for purposes of enforcement of this Contract in an arbitration of judicial proceeding, without the written approval of the other party. The expression “Information” in this Clause 6.4.1 includes but is not limited to all oral or written information, know-how, data, reports, drawings and specifications, and all provisions of this Contract.	
 
 	6.4.2	Each party shall be responsible for the observance of the provisions of Clause 6.4.1 above by its employees and professional advisors.	
 
 	6.4.3	The provisions of Clause 6.4.1 above shall not apply to information which is or becomes generally known in the aero engine industry nor shall the provisions of Clause 6.4.1 above prevent any necessary disclosure of information to enable Vuela itself to operate, maintain or overhaul Supplies nor to information required to be disclosed by a valid governmental, judicial or regulatory agency order.	
 
 	6.4.4	Vuela shall be responsible for obtaining any required authorization including any export licenses (other than export licenses for the country of manufacture), import licenses, exchange permits or any other governmental authorizations required in connection with the transactions contemplated under this Contract. IAE shall provide Vuela such information and other assistance as Vuela may reasonably request to permit Vuela to obtain such licenses, permits and authorizations. Vuela shall restrict disclosure of all information and data furnished under this Contract in obtaining such licenses, permits, or authorizations. Vuela shall only ship the Supplies and information and data furnished under this Contract to those destinations permitted under such licenses, permits, or authorizations.	
 
 	6.4.5	In the event that any of the Information as described in Clause 6.4.1 is required to be disclosed by a party through a valid governmental, judicial or regulatory agency order, the disclosing party agrees to advise the other party of the need for disclosure (in advance of such disclosure when possible) and to limit the disclosure to only those portions of the Information specifically required to be disclosed by such order, and to maintain the confidentiality of as much of the Information as legally possible.	

	  	Clause 6 – Miscellaneous	  	Page 23 of 111	

IAE PROPRIETARY INFORMATION
 
 	6.5	Taxes	
 
 	6.5.1	Subject to Clause 6.5.2 below, IAE shall pay all imposts, duties, fees, taxes and other like charges levied by any governmental taxing authority or agency, in connection with the Supplies prior to their delivery.	
 
 	6.5.2	All amounts stated to be payable by Vuela pursuant to this Contract exclude any value added tax, sales tax or taxes on turnover. In the event that the supply of goods or services under this Contract is chargeable to any value added tax, sales tax or taxes on turnover such tax will be borne by Vuela. To ensure so far as possible that Vuela is not charged with European Community value added tax (“ VAT ”), Vuela will within 30 days of signature hereof, inform IAE of its VAT Code (if any) for inclusion on IAE’s invoices. Further, each party agrees to reasonably cooperate with the other to reduce the tax liabilities of the other.	
 
 	6.5.3	Vuela shall pay all other imposts, duties, fees, taxes and other like charges by whomsoever levied other than (i) taxes on IAE’s gross or net income; (ii) taxes which would not have been imposed but for a connection between IAE and the taxing jurisdiction unrelated to this Contract; and (iii) taxes which would not have been imposed but for the gross negligence of willful misconduct of or a breach of this Contract by IAE.	
 
 	6.6	Amendment	
 
 	    	This Contract shall not be amended in any way other than by written agreement by the parties on or after the date of this Contract, which agreement is expressly stated to amend this Contract.	
 
 	6.7	Assignment	
 
 	    	Except as provided under Clause 5 above, neither party may assign any of its rights or obligations hereunder without the written consent of the other party (except that IAE may assign its rights to receive money hereunder or its rights and obligations, or a portion thereof, to any wholly owned subsidiary of IAE or to any of IAE’s shareholders subject to such subsidiary or shareholders being able to fulfill the obligations being assigned). Any assignment made in violation of this Clause 6.7 shall be null and void.	
 
 	    	IAE understands that Vuela may use any of various mechanisms (including sale leasebacks) to finance or acquire the Aircraft or any Spare Engine or any predelivery payments in respect thereof. IAE agrees to reasonably consider Vuela’s timely requests that IAE consent to the assignment of Vuela’s rights or obligations hereunder to facilitate any such financing or acquisition. In respect of the purchase of the Aircraft, IAE agrees that Vuela may assign this Contract with respect to a particular Aircraft to an affiliated special purpose entity or other entity formed for the purpose of facilitating the financing or acquisition of the Aircraft.	

	  	Clause 6 – Miscellaneous	  	Page 24 of 111	

IAE PROPRIETARY INFORMATION
 
 	    	IAE also understands that Vuela is not an operator of equipment and that Vuela’s Affiliates will be the ultimate users of the Aircraft and the Supplies. Furthermore, such Affiliates may be the purchasers of Supplies. Vuela may make an assignment to such Affiliates of the relevant portions of the Contract (including the relevant portions of Clauses 1, 3, 4 and 6) relating to the purchase of Supplies, subject to such subsidiary or shareholders being able to fulfill the obligations being assigned.	
 
 	    	For purposes of this Clause 6.7, “ Affiliates ” shall mean any subsidiaries or other affiliates that are either wholly-owned or otherwise controlled by Vuela or its shareholders.	
 
 	6.8	Exhibits	
 
 	    	In the event of any unresolved conflict or discrepancy between the Exhibits (which are hereby expressly made a part of this Contract) and Clauses of this Contract then the Clauses shall prevail.	
 
 	6.9	Headings	
 
 	    	The Clause headings and the Index do not form a part of this Contract and shall not govern or affect the interpretation of this Contract.	
 
 	6.10	Governing Law and Forum	
 
 	    	This Contract shall be subject to and interpreted and construed in accordance with the laws of the State of New York, United States of America (excluding its conflicts of law provisions). The parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods (1980). Any suit, action or proceeding against any of the Parties hereto with respect to this Contract and any judgment entered by any court in respect thereof may be brought in the Supreme Court of the State of New York, New York County, or in the United States District Court for the State of New York, as each party hereto in its sole discretion may elect, and each party hereto hereby submits to the non-exclusive jurisdiction of such New York courts for the purpose of any such suit, action or proceeding.	
 
 	6.11	Notices	
 
 	    	Any notice to be served pursuant to this Contract shall be in the English language and is to be sent by certified mail, recognized international carrier or facsimile (with confirmation copy by any of the other means) to:	
 
 	    	In the case of IAE:	
IAE International Aero Engines AG
IAE Building
400 Main Street, M/S 121-10,
East Hartford, Connecticut 06108, United States of America
Facsimile No. 860-565-5220

	  	Clause 6 – Miscellaneous	  	Page 25 of 111	

IAE PROPRIETARY INFORMATION
 
Attention: Chief Legal Officer and Company Secretary
 
 	    	In the case of Vuela:	
Vuela
Av. Prolongacion Reforma # 490,
Primer Piso,
Colonia Lomas Santa Fe,
Delegacion Alvaro Obregon
Mexico,
Distrito Federal
C.P 01210
Facsimile No. 52 55 5261 6460
Attention: Chief Financial Officer
 
 	    	or in each case to such other place of business as may be notified from time to time by the receiving party.	
 
 	6.12	Exclusion of Other Provisions and Previous Understandings	
 
 	6.12.1	This Contract contains the only provisions governing the sale and purchase of the Supplies and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of Vuela, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either party relating to the sale and purchase of the Supplies.	
 
 	6.12.2	The parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Contract, whether orally or in writing, relating to the Supplies, other than those expressly incorporated in this Contract, which has been negotiated on the basis that its provisions represent their entire agreement relating to the Supplies and shall supersede all such representations, agreements, statements and understandings.	
 
 	6.13	Conditions Precedent	
 
 	    	During the term of this Contract, the obligations of IAE to provide, or cause to be provided Supplies or any other benefits to Vuela pursuant to the terms hereof, shall be subject to the non-existence of any of the following events on the date when such Supplies or benefits become due, and should any such event then exist IAE shall be under no obligation to provide, or cause to be provided any Supplies or any other benefits to Vuela:	
 
 	6.13.1	A continuing event of default (taking into account any applicable grace period) by Vuela in (a) ***** or more due under this Contract (including any exhibits and letter agreements thereto), after giving effect to any credits owing to Vuela hereunder, or (b) the payment of any scheduled amount of principal, interest, lease rental or other similar payment of *****	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 6 – Miscellaneous	  	Page 26 of 111	

IAE PROPRIETARY INFORMATION
 
 	    	***** or more under any financing agreement between IAE and Vuela for an Aircraft; or	
 
 	6.13.2	Any event that is an IAE Termination Event (as defined below) or would be an IAE Termination Event, but for lapse of time, shall have occurred and be continuing.	
 
 	6.14	Termination Events	
 
 	    	IAE shall have the option, at its sole discretion, to terminate this Contract upon the occurrence of any of the following events (“IAE Termination Events”):	
 
 	6.14.1	Vuela commences any case, proceeding or other action with respect to Vuela or its property in any jurisdiction relating to bankruptcy, insolvency, reorganization, dissolution, liquidation, winding-up, or relief from, or with respect to, or readjustment of, debts or obligations; or	
 
 	6.14.2	Vuela seeks the appointment of a receiver, trustee, custodian or other similar official for Vuela for all or substantially all of its assets, or Vuela makes a general assignment for the benefit of its creditors; or	
 
 	6.14.3	Vuela otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses 6.14.1 or 6.14.2 which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or	
 
 	6.14.4	An action is commenced against Vuela seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which remains unstayed, undismissed or undischarged for a period of sixty (60) days;	
 
 	6.14.5	A continuing event of default (taking into account any applicable grace period) by Vuela on any payment of principal or interest on any indebtedness under any IAE financing agreement with Vuela for the Aircraft, or in the payment of any guarantee obligation or similar obligation in connection therewith, provided that IAE (or its affiliate or assignee, as the case may be), shall have declared such agreement to be in default (to the extent required thereunder), accelerated the maturity of Vuela’s indebtedness thereunder and commenced the exercise of remedies as a result thereof; or	
 
 	6.14.6	Vuela shall be in material default (taking into account any grace period) of any of its other obligations under the Contract.	
 
 	    	In the event of the occurrence of an IAE Termination Event, Vuela shall be deemed to be in material breach of this Contract, and IAE shall at its option have the right by written notice, effective immediately, to terminate this Contract; provided that, no such notice need be delivered, and this Contract shall automatically terminate upon the occurrence of an IAE Termination Event specified in Clause 6.14.1, 6.14.2, or 6.14.3.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 6 – Miscellaneous	  	Page 27 of 111	

IAE PROPRIETARY INFORMATION
 
 	    	Vuela shall have the option, at its sole discretion, to terminate this Contract upon the occurrence of any of the following events (“Vuela Termination Events”):	
 
 	6.14.7	IAE commences any case, proceeding or other action with respect to IAE or its property in any jurisdiction relating to bankruptcy, insolvency, reorganization, dissolution, liquidation, winding-up, or relief from, or with respect to, or readjustment of, debts or obligations; or	
 
 	6.14.8	IAE seeks the appointment of a receiver, trustee, custodian or other similar official for IAE for all or substantially all of its assets, or IAE makes a general assignment for the benefit of its creditors; or	
 
 	6.14.9	IAE otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses (i) or (ii) which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or	
 
 	6.14.10	An action is commenced against IAE seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or	
 
 	6.14.11	IAE shall be in material default (taking into account any grace period) on any of its obligations under this Contract or any IAE financing agreement.	
 
 	    	In the event of the occurrence of a Vuela Termination Event, IAE shall be deemed to be in material breach of this Contract, and Vuela shall at its option have the right by written notice, effective immediately, to terminate this Contract; provided that, no such notice need be delivered, and this Contract shall automatically terminate upon the occurrence of a Vuela Termination Event specified in Clause 6.14.7, 6.14.8, or 6.14.9.	
 
 	    	Except as may be otherwise agreed in this Contract, in no event shall either party be liable to the other party for special, incidental or consequential damages under this Contract	
 
 	6.15	Effect of Termination	
 
 	    	Upon any expiration or termination of this Contract, the rights and obligations of the parties under this Contract will terminate. Notwithstanding anything herein to the contrary, all liabilities and obligations that have accrued prior to termination or expiration (including any payment, warranty and service policy obligations) will survive, and upon any termination of this Contract by Vuela pursuant to Clause 6.14.11 IAE shall promptly refund to Vuela any deposits made in respect of the purchase price of any items of the Supplies not yet delivered, together with interest from the date such deposits were received by IAE, calculated at the rate of *****, until the date they are returned to Vuela. Notwithstanding the foregoing and for the avoidance of doubt, upon termination, IAE shall have no obligation to deliver goods not yet delivered.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	Clause 6 – Miscellaneous	  	Page 28 of 111	

IAE PROPRIETARY INFORMATION
 
 	6.16	No Construction Against Drafter	
 
 	    	This Contract has been the subject of negotiation between the parties. If an ambiguity or question of intent arises with respect to any provision of this Contract, this Contract will be construed as if drafted jointly by IAE and Vuela and no presumption or burden of proof will arise favoring or disfavoring either party by virtue of authorship of any of the provisions of this Contract.	
IN WITNESS WHEREOF the parties hereto have caused this Contract to be signed on their behalf by the hands of their authorized officers the day and year first before written:

For	 		 	For	
IAE International Aero Engines AG	 		 	Controladora Vuela Compañía de Aviación	
	 		 	S.A. de C.V.	

Name	 		 	Name	

Printed Name	 		 	Printed Name	

Title	 		 	Title	

	  	Clause 6 – Miscellaneous	  	Page 29 of 111	

Exhibit A
Contract Specifications
Exhibit A-1
V2524-A5 Turbofan Engine Model Specification

FAA Commercial Type Certificate E40NE	  	Model V2524 – A5	
	  	Spec. No. IAE S24A5/2	
SEA LEVEL STATIC RATINGS
(See General Notes)

 	  	Net
Thrust
lb	 	
Take-off Rating (5 min)	  	 	24,480	  	
Equivalent take-off thrust at 0.2 Mn	  	 	24,760	  	
Maximum Continuous Rating	  	 	19,200	  	
DESCRIPTION
Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.
Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.
FUEL AND OIL

Fuel - Specification:	  	MIL-T-5624, MIL-T-83133 or ASTM-D-1655	
Oil - Specification:	  	MIL-L-23699 Type II	
Oil Consumption:	  	Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr	
STANDARD EQUIPMENT
(Included in Engine Price)
FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:
LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.
IGNITION SYSTEM COMPRISING:
Ignition Exciter, Igniter Plug, Ignition Lead (2 each).
AIR SYSTEM COMPRISING:
No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.
 
Page 30 of 111

ENGINE INDICATING SYSTEM COMPRISING:
Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.
OIL SYSTEM COMPRISING:
Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.
MISCELLANEOUS:
Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.
ADDITIONAL EQUIPMENT
Available at Increased Price
Engine Storage Bag
Engine Transportation Stand
Enhanced Engine Condition Monitoring Instrumentation
Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.
GENERAL NOTES
The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.
Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 40oC (72oF) ambient temperatures.
Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 10oC (18oF) ambient temperature.
Maximum Climb Rating is the maximum thrust approved for normal climb operation.
Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.
Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.
 
Page 31 of 111

Exhibit A-2
V2527M-A5 Turbofan Engine Model Specification

FAA Commercial Type Certificate E40NE	  	Model V2527M - A5	
	  	Spec. No. IAE 27MA5/2	
SEA LEVEL STATIC RATINGS
(See General Notes)

 	  	Net
Thrust
lb	 	
Take-off Rating (5 min)	  	 	24,800	  	
Equivalent take-off thrust at 0.2 Mn	  	 	26,570	  	
Maximum Continuous Rating	  	 	22,240	  	
DESCRIPTION
Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.
Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.
FUEL AND OIL

Fuel - Specification:	  	MIL-T-5624, MIL-T-83133 or ASTM-D-1655	
Oil - Specification:	  	MIL-L-23699 Type II	
Oil Consumption:	  	Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr	
STANDARD EQUIPMENT
(Included in Engine Price)
FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:
LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.
IGNITION SYSTEM COMPRISING:
Ignition Exciter, Igniter Plug, Ignition Lead (2 each).
AIR SYSTEM COMPRISING:
No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.
 
Page 32 of 111

ENGINE INDICATING SYSTEM COMPRISING:
Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.
OIL SYSTEM COMPRISING:
Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.
MISCELLANEOUS:
Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.
ADDITIONAL EQUIPMENT
Available at Increased Price
Engine Storage Bag
Engine Transportation Stand
Enhanced Engine Condition Monitoring Instrumentation
Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.
GENERAL NOTES
The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.
Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 31oC (56oF) ambient temperatures.
Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 10oC (18oF) ambient temperature.
Maximum Climb Rating is the maximum thrust approved for normal climb operation.
Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.
Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.
 
Page 33 of 111

Exhibit B
Schedules
Exhibit B-1
Aircraft Delivery Schedule
*****
 
*	pending change to April 2008 subject to Airbus confirmation.	
 
**	pending change to November 2008 subject to Airbus confirmation.	
With respect to options to purchase up to twenty (20) Option Aircraft and up to twenty (20) Rolling Option Aircraft, no dates are specified for delivery of these Option Aircraft or Rolling Option Aircraft. Delivery dates for these Aircraft will be determined at the time options are exercised by Vuela.
The above delivery schedule is subject to modification in accordance with Section 6 of Side Letter No. 1 to this Contract. The parties agree that should the actual delivery dates differ from those set forth in the above delivery schedule due to delays caused by parties other than Vuela, the parties shall amend the delivery schedule as appropriate.

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
Page 34 of 111

Exhibit B-2
Purchased Items, Price, Escalation Formula, and Delivery
Purchased Items
*****
Base Prices (January 2004 US$)

A319 Models	  	Base Price	 	
V2527M-A5	  	 	US*****	  	
V2524-A5	  	 	US*****	  	
V2522-A5	  	 	US*****	  	
		
A320 Models	  	Base Price	 	
V2527E-A5	  	 	US*****	  	
V2527-A5	  	 	US*****	  	
		
A321 Models	  	Base Price	 	
V2533-A5	  	 	US*****	  	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
Page 35 of 111

Escalation Formula
*****

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
Page 36 of 111

Exhbit C
Product Support Plan
PRODUCT SUPPORT
FOR THE
V2500 ENGINE
IAE INTERNATIONAL AERO ENGINES AG
Issue No. 7
 
Page 37 of 111

TABLE OF CONTENTS

1.0 INTRODUCTION	  	 	39	  	
		
2.0 CUSTOMER SUPPORT	  	 	39	  	
			
2.1	  	CUSTOMER SUPPORT MANAGER	  	 	39	  	
2.2	  	CUSTOMER SUPPORT REPRESENTATIVES	  	 	40	  	
2.3	  	CUSTOMER TRAINING:	  	 	41	  	
2.4	  	ENGINE MAINTENANCE MANAGEMENT	  	 	42	  	
2.5	  	SPECIAL PROGRAMS	  	 	43	  	
		
3.0 BUSINESS SUPPORT	  	 	43	  	
			
3.1	  	ENGINE WARRANTY SERVICES	  	 	44	  	
3.2	  	MAINTENANCE CENTER SUPPORT	  	 	44	  	
3.3	  	MAINTENANCE FACILITIES PLANNING SERVICE	  	 	45	  	
3.4	  	ENGINE RELIABILITY AND ECONOMIC FORECASTS	  	 	45	  	
3.5	  	LOGISTICS SUPPORT STUDIES	  	 	45	  	
3.6	  	LEASE ENGINE PROGRAM	  	 	46	  	
		
4.0 TECHNICAL SERVICES	  	 	46	  	
			
4.1	  	TECHNICAL SERVICES	  	 	46	  	
4.2	  	POWERPLANT MAINTENANCE	  	 	48	  	
4.3	  	CUSTOMER PERFORMANCE	  	 	48	  	
4.4	  	DIAGNOSTIC SYSTEMS	  	 	49	  	
4.5	  	HUMAN FACTORS	  	 	50	  	
4.6	  	FLIGHT OPERATIONS	  	 	50	  	
4.7	  	REPAIR SERVICES	  	 	51	  	
4.8	  	TOOLING AND SUPPORT EQUIPMENT SERVICES	  	 	52	  	
4.9	  	TECHNICAL PUBLICATIONS	  	 	53	  	
		
5.0 SPARE PARTS	  	 	56	  	
			
5.1	  	SPARE PARTS SUPPORT	  	 	56	  	
 
Page 38 of 111

1.0	INTRODUCTION	
IAE International Aero Engines AG (IAE) will make the following support personnel and services available to the V2500 engine customer: Flight Operations, Customer Performance, Customer Support Representatives, Customer Maintenance Support, Technical Services, Powerplant Maintenance, Service Data Analysis, Human Factors, Repair Services, Warranty Administration, Maintenance Facilities Planning, Tooling and Support Equipment Services, Product Support Technical Publications, Customer Training, Spare Parts Support and Maintenance Center Support. In general, these services are provided at no charge to V2500 customers, however, some specific customized services as noted in the descriptions below, may be purchased from IAE.
To make these support services readily available to you, our customer, in the most efficient manner, the Customer Support Group has been established and assigned primary responsibility within IAE for customer liaison. A Customer Support Manager is assigned to maintain direct liaison with each individual Customer. A description of the various product support services available to each customer follows.
IAE reserves the right to withdraw or modify the services described herein at any time at its sole discretion. No such withdrawal or modification shall diminish the level of services and support which the Customer may be entitled to receive with respect to V2500 engines for which an acceptable order has been placed with IAE or with respect to aircraft with installed V2500 engines for which a firm and unconditional order has been placed with the aircraft manufacturer, prior to the announcement of any such withdrawal or modification.
 
2.0	CUSTOMER SUPPORT	
 
 	2.1	CUSTOMER SUPPORT MANAGER	
The Customer Support Manager provides a direct liaison between the airline customer’s Engineering, Maintenance, Operations, Logistics, Commercial and Financial organizations and the corresponding functions within IAE. The Customer Support Manager assigned to each airline is responsible for coordinating and monitoring the effort of the Product Support Department functional organization to achieve timely and responsive support for the airline.
The Customer Support Manager provides the following specific services to the airline customer:
 
 	•	 	Readiness Program and planning prior to EIS	
 
 	•	 	Technical recommendations and information.	
 
 	•	 	Engine Maintenance Management Plans	
 
 	•	 	Refurbishment, Modification and Conversion program planning assistance.	
 
 	•	 	Coordination of customer repair, maintenance and logistics requirements with the appropriate Product Support functional groups.	
 
 	•	 	Assist with critical engine warranty/service policy claims.	
The Customer Support Manager will represent the airline customer in IAE internal discussions to ensure that the best interests of the customer and IAE are considered when making recommendations to initiate a program, implement a change or improvement in the V2500 engine.
 
Page 39 of 111

 	2.2	CUSTOMER SUPPORT REPRESENTATIVES	
IAE Customer Support Representatives provide the following services to the airline customer:
 
 	•	 	24 Hour Support	
 
 	•	 	Maintenance Action Recommendations	
 
 	•	 	Daily Reporting on Engine Technical Situations	
 
 	•	 	On-The-Job Training	
 
 	•	 	Service Policy Preparation Assistance	
 
 	•	 	Prompt Communication with IAE	
 
 	2.2.1	Engine Maintenance Support Service:	
Customer Support Representatives assist airline customer personnel in the necessary preparation for engine operation and maintenance. The Representative, teamed with a Customer Support Manager will work closely with the airplane manufacturer’s support team particularly during the initial period of aircraft operation. Representatives are in frequent contact with the IAE offices on technical matters. Information and guidance received from the home office is transmitted promptly to the airline which allows the airline to share in all related industry experience.
The practice permits immediate use of the most effective procedures and avoidance of unsuccessful techniques. The IAE office contact ensures that IAE Representatives know, in detail, the latest and most effective engine maintenance procedures and equipment being used for maintenance and overhaul of V2500 engines. They offer technical information and recommendations to airline personnel on all aspects of maintenance, repair, assembly, balancing, testing, and spare parts support of IAE.
 
 	2.2.2	On The Job Training:	
Customer Support Representatives will conduct on-the-job training for the airline’s maintenance personnel. This training continues until the maintenance personnel have achieved the necessary level of proficiency. Training of new maintenance personnel will be conducted on a continuing basis.
 
 	2.2.3	Service Policy Administration:	
Customer Support Representatives will provide administrative and technical assistance in the application of the IAE Engine and Parts Service Policy to ensure expeditious and accurate processing of airline customer claims.
 
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 	2.3	CUSTOMER TRAINING:	
 
 	2.3.1	IAE Customer Training offers airline customers the following support:	
 
 	•	 	Technical Training at Purpose Built Facilities	
 
 	•	 	On-site Technical Training	
 
 	•	 	Technical Training Consulting Service	
 
 	•	 	Training Aids and Materials	
 
 	2.3.2	Training Program:	
 
 	  	The IAE Customer Training Center has an experienced full-time training staff which conducts formal training programs in English for airline customers’ maintenance, training and engineering personnel. The standard training programs are designed to prepare customer personnel, prior to the delivery of the first aircraft, to operate and maintain the installed engines. Standard courses in engine operation, line maintenance, modular maintenance, performance and trouble-shooting are also available throughout the production life of the engine. The courses utilize the latest teaching technology, training aids and student handouts. IAE Customer Support will coordinate the scheduling of specific courses as required. Training at the Customer Training Center is provided to a limit of fifty (50) man-days per aircraft. The following is the curriculum of standard courses available. On-site technical training, technical training consulting services and customized courses may be provided upon customer request and subject to separate contractual arrangements.	
 
 	2.3.3	General V2500 Familiarization:	
 
 	  	This two day course is designed for experienced gas turbine personnel who will be responsible for planning, provisioning and maintenance of the V2500 engine. This course is also designed to appropriately familiarize key staff, supervisory and operations planning personnel and flight crews. Discussions are concentrated in the following subject areas:	
 
 	•	 	Engine construction features internal and external hardware.	
 
 	•	 	Engine systems operation, major components accessibility for removal/replacement.	
 
 	•	 	Operational procedures	
 
 	•	 	Performance characteristics	
 
 	•	 	Maintenance concepts, repair and replacement requirements and special tooling.	
 
 	  	The course is normally conducted in preparation for fleet introductory discussions in the provisioning of spares and tooling, training and line maintenance areas to acquaint the customer with the engine, its systems, operations and procedures.	
 
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 	2.3.4	Line Maintenance and Troubleshooting:	
 
 	  	This course is designed for key line maintenance and troubleshooting personnel who have not received previous formal training on the V2500 engine. The classroom phases provide the student with the information essential for timely completion of line maintenance activities and the procedures for effective troubleshooting and correction of malfunctions in the V2500 engine systems and the engine/airframe interfaces. Classroom and shop training are provided for in the following areas:	
 
 	•	 	Engine Description	
 
 	•	 	Systems Operation	
 
 	•	 	Applied Performance	
 
 	•	 	Ground Operations	
 
 	•	 	Troubleshooting Procedures	
 
 	•	 	Practical Phase Line Maintenance Tasks	
 
 	  	Additional courses are available in Borescope utilization and Engine Conditioning Monitoring (ECM)	
 
 	2.3.5	V2500 Familiarization and Modular Maintenance:	
 
 	  	Provides experienced heavy maintenance personnel with engine modular disassembly and assembly training. The training is concentrated in the following subject areas:	
 
 	•	 	Engine Description Overview	
 
 	•	 	Engine Systems Overview	
 
 	•	 	Heavy Maintenance Tasks *	
 
 	•	 	Course duration and “hands-on” coverage are contingent on the availability of an engine and required tooling.	
 
 	2.4	ENGINE MAINTENANCE MANAGEMENT	
 
 	  	Planning documents, tailored for individual operators, are developed to serve as Engine Maintenance Management Program criteria and should reflect the FAA requirements under which Vuela will operate. These are directed toward the objective of ensuring cost-effective operation with acceptable post-repair test performance, providing engine reliability to achieve maximum time between shop visits, and minimizing the adverse effects to operation of inflight shutdowns and delays/cancellations. Through the institution of specific maintenance recommendations, proper engine performance, durability, and hot section parts lives can be achieved.	
 
 	2.4.1	Operations Monitoring:	
 
 	  	The following information is available to the airline customer from the IAE Product Information Process (IP) 2 Group:	
 
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 	2.4.2	Operation Experience Reports:	
 
 	  	IAE maintains a V2500 data base from which selected engine operations and reliability summary reports will be developed and made available on a scheduled basis to each airline customer. Data reported by IAE Customer Support Representatives serve as input to this data base. This computerized data maintenance and retrieval system will permit:	
 
 	•	 	A pooling and exchange of service experience for the benefit of the entire airline industry.	
 
 	•	 	A common statistical base.	
 
 	•	 	The selective querying of computer data files for answers to customer inquiries.	
 
 	  	In addition to providing operations, reliability and VIS reports, SDS serves in-house programs directed at improving engine design and enhancing overall customer support, including spare parts provisioning and warranty administration.	
 
 	2.5	SPECIAL PROGRAMS	
 
 	2.5.1	Engine Hardware Retrofit:	
 
 	  	Engine Retrofits are carried out to provide modification of engine hardware configuration when required on delivered engines. This involves assisting in the marshaling of hardware, special tools, manpower and the scheduling of engine and material to modification sites.	
 
 	2.5.2	Controlled Service Use Programs and Material:	
 
 	  	IAE shall assume responsibility for the planning, sourcing, scheduling and delivery of Controlled Service Use material, warranty replacement material, service campaign material and program support material subject to the terms of special contracts with customers.	
 
 	  	Urgent customer shipments, both inbound and outbound, are monitored, traced, routed and expedited as required. The receipt and movement of customer owned material returned to IAE is carefully controlled, thus assuring an accurate accounting at all times.	
 
3.0	BUSINESS SUPPORT	
 
  	The Business Support Group is dedicated to providing prompt and accurate assistance to you, our V2500 airline customer. This Group provides the following categories of assistance and support to the V2500 airline customer:	
 
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 	•	 	Engine Warranty Services	
 
 	•	 	Maintenance Support	
 
 	•	 	Lease Engine Program	
 
 	•	 	Engine Reliability and Economic Forecasts	
 
 	•	 	Logistic Support Studies	
 
 	3.1	ENGINE WARRANTY SERVICES	
 
 	  	Engine Warranty Services will provide the following support for the V2500 engine airline customer:	
 
 	•	 	Prompt administration of claims concerning Engine Warranty, Service Policy, other support programs and Guarantee Plans.	
 
 	•	 	Investigation of part condition and part failure.	
 
 	•	 	Material provisioning administration for Controlled Service Use programs and other material support.	
 
 	3.1.1	Prompt Administration:	
 
 	  	Each airline customer is assigned a Warranty Analyst whose job is to provide individual attention and obtain prompt and effective settlements of Warranty and Service Policy claims. A typical claim properly submitted is generally settled, including issuance of applicable credit memo, within thirty (30) days. Experience generated by much of the data derived from such claims often enables IAE to monitor trends in operating experience and to address and often eliminate potential problems.	
 
 	3.1.2	Investigation and Reports:	
 
 	  	Parts returned to IAE pursuant to the terms of the Service Policy are investigated in appropriate detail to analyze and evaluate part condition and cause of part failure. A report of findings is prepared and forwarded to the airline customer and to all IAE departments involved. In the case of vendor parts, the vendor is promptly informed. Where relevant, reports will include recommendations to preclude repetition of the problem.	
 
 	3.2	MAINTENANCE CENTER SUPPORT	
 
 	  	IAE has arranged for the establishment of Maintenance Centers which are available to accomplish repairs, modifications and conversions, as well as the complete overhaul of the V2500 engine subject to IAE’s standard terms and conditions for such work.	
 
 	  	Through the use of the IAE established Maintenance Centers and their capabilities, an operator can minimize or eliminate the need for investment in engine support areas depending on the level of maintenance he elects the Maintenance Center to perform. Savings in specific engine support areas, such as spare parts inventory, maintenance and test tooling, support equipment and test facilities, can be demonstrated. Use of Maintenance Centers can also minimize the need for off-wing maintenance and test personnel with their associated overhead.	
 
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 	3.3	MAINTENANCE FACILITIES PLANNING SERVICE	
 
 	  	Maintenance Facilities Planning Service offers the following support to IAE customer:	
 
 	•	 	General Maintenance Facility Planning Publications	
 
 	•	 	Customized Facility Plans	
 
 	•	 	Maintenance Facility and Test Cell Planning Consultation Services	
 
 	  	Maintenance Facilities Planning Service provides general and customized facility planning data and consultation services. Facility Planning Manuals for the V2500 engine will present the maintenance tasks, facility equipment and typical department floor plans showing arrangement of equipment required to accomplish the tasks for all levels of maintenance. The Facility Equipment Manual is a catalog of standard facility equipment such as lathes, process tanks, hoists, cranes, etc., which is suitable for use in the maintenance and testing of IAE engines.	
 
 	  	Customized facility planning services and consulting services are offered subject to separate contractual arrangements. Customized facility plans are developed to meet the requirements of customers’ specific fleet sizes, activities and growth plans. The plans identify floor space, facility equipment, utilities and manpower requirements. On-site surveys are conducted as a part of customized plan development to determine the adaptability of existing facilities and equipment for the desired maintenance program. These plans provide floor plan layouts to show recommended locations for work stations, major equipment, marshaling and storage areas, workflow patterns, and structural and utility requirements to accommodate all the engine models that are maintained in the customer’s shop. The Maintenance Facilities Planning Service also provides consultant services which are specifically related to the development of engine test cells, and the adaptation of existing maintenance facilities to accommodate expanding production requirements and/or new or additional IAE models.	
 
 	3.4	ENGINE RELIABILITY AND ECONOMIC FORECASTS	
 
 	  	Engine reliability and economic forecasts in the forms of predicted shop visit rates and maintenance costs can be provided to reflect the airline customers’ operating characteristics. Additionally, various analyses can be conducted to establish life probability profiles of critical engine parts, and to determine optimum part configuration and engine operating procedures.	
 
 	3.5	LOGISTICS SUPPORT STUDIES	
 
 	  	As required, logistics studies are conducted to assist in the planning of engine operational support. Such studies may include spare engine and spare module requirements forecasts, level of maintenance analyses, engine type economic evaluations and life cycle cost estimates.	
 
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 	3.6	LEASE ENGINE PROGRAM	
 
 	  	An engine lease program will be made available to V2500 Airline Customers subject to IAE’s standard terms and conditions of lease. Pool spares will be stationed at selected locations to assure emergency protection against aircraft-on-ground (AOG) situations or to provide supplemental support during “zero spares” conditions. Lease engines offered to Vuela will be of a configuration and certification standard acceptable to Vuela. Availability will be subject to prior demand; however, the program logistics will be continually reviewed to assure the most effective deployment of available pool engines.	
 
4.0	TECHNICAL SERVICES	
 
 	4.1	TECHNICAL SERVICES	
 
 	  	The Technical Services Group provides the following categories of technical support to the airline customer:	
 
 	•	 	Technical Services	
 
 	•	 	Powerplant Maintenance	
 
 	•	 	Customer Performance	
 
 	•	 	Diagnostic Systems	
 
 	•	 	Human Factors	
 
 	•	 	Flight Operations	
 
 	•	 	Repair Services	
 
 	•	 	Tooling and Support Equipment Services	
 
 	•	 	Technical Publications	
 
 	  	Technical Services is responsible for the overall technical support to the customers. The following services are provided:	
 
 	•	 	Technical Problem Identification/Corrective Action Implementation	
 
 	•	 	Technical Communication	
 
 	•	 	Engine Conversion Program Definition and Management	
 
 	•	 	Engine Upgrade and Commonality Studies	
 
 	•	 	Engine Incident Investigation Assistance	
 
 	  	Technical information supplied through IAE Customer Support Representatives, Customer Support Managers, customer correspondence and direct meetings with airlines’ representatives permits assessment of the factors involved in technical problems and their impact on engine reliability and operating costs. Resolution of these problems is coordinated with responsible groups within IAE and the necessary corrective action is defined. In certain situations the corrective action involves the establishment of Service Evaluation programs for proposed modifications, and the establishment of warranty assistance programs in conjunction with the IAE Warranty Administration Group. Technical Services will assist customers in the implementation of recommended corrective action and improvements principally through official IAE technical communications, and direct customer contact.	
 
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 	4.1.1	Technical Communications:	
 
 	  	Technical Services is responsible for the release of technical communications. Primary communication modes involves release of limits and procedures through engine and maintenance manual revisions and the requirements associated with engine upgrade and/or conversion, durability and performance improvements, and problem resolution through Service Bulletins is provided by All Operator Letters and/or wires or direct technical written response to individual customer inquiries.	
 
 	4.1.2	Engine Conversion Programs:	
 
 	  	Technical Services defines minimum configuration levels for conversion of service engine models. They serve to assist the customer with the implementation of conversion programs into existing fleets by providing preliminary planning cost estimates and technical planning information regarding tooling, material and instructional requirements. Conversion programs are monitored for problem areas and Technical Services initiates and implements corrective action as may be necessary.	
 
 	4.1.3	Engine Incident Investigation Assistance:	
 
 	  	Assistance is provided to an airline in conducting engine incident investigations in responding to the requirements of the appropriate Airworthiness authority.	
 
 	4.1.4	Line Maintenance and Troubleshooting:	
 
 	  	Line Maintenance and Troubleshooting Seminars can be conducted at the IAE Training Center with the objective of improving line maintenance effectiveness fleetwide. Specialized training on V2500 line maintenance and troubleshooting can be provided through on-site workshops by special contractual arrangement.	
 
 	  	Troubleshooting support is provided primarily through powerplant troubleshooting procedures which are published in IAE and airframe manufacturer’s manuals. When an airline encounters an engine problem and corrective action taken has not been effective, more direct support in troubleshooting and maintenance can also be provided to the customer’s line maintenance personnel. Instructions on V2500 powerplant troubleshooting and maintenance can also be provided to customer’s line maintenance personnel.	
 
 	4.1.5	Airline Shop Maintenance:	
 
 	  	Reviews of shop practices and procedures of individual airlines can be conducted to determine the most efficient and cost-effective methods for maintenance and repair of the V2500 in the environment in which the airline must maintain that engine.	
 
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 	4.2	POWERPLANT MAINTENANCE	
 
 	  	Powerplant Maintenance covers responsibility for maximizing engine maintainability, establishing maintenance concepts and requirements and providing maintenance support plant for IAE. This group provided the following services:	
 
 	•	 	Definition of Maintenance Tasks and Resource Requirements	
 
 	•	 	Planning Guides	
 
 	  	Powerplant Maintenance conducts design reviews and comprehensive maintenance analysis of new engine designs and engine design changes to maximize engine maintainability consistent with performance, reliability, durability and life cycle cost considerations. Maintenance concepts, requirements and tasks are established to minimize maintenance costs. This group represents the customer’s maintainability interests in internal IAE operations and upon request will assist the customer in resolving specific maintenance task problems.	
 
 	4.2.1	Progressive Maintenance Planning:	
 
 	  	Powerplant Maintenance also provides Planning Guides based upon Maintenance Task Analysis. The guides present engine maintenance requirements, their subordinate tasks and the required resources to accomplish on-aircraft engine maintenance and the off-aircraft repair of engines by modular section/build group replacement. Maintenance requirements are also presented for the refurbishment of modular section/build group by parts replacement, the complete repair of parts, the refurbishment of accessory components and for engine testing. The data in the Planning Guides is presented in a manner that is primarily intended to assist new operators by providing a phased introduction of new engines into their shops and to capitalize on the design maintainability features for the engine when they are developing their maintenance plans.	
 
 	  	Powerplant Maintenance Engineering will assist new operators in planning a gradual, technically feasible, and economically acceptable expansion from line maintenance of installed engines through the complete repair of parts and accessory components.	
 
 	4.3	CUSTOMER PERFORMANCE	
 
 	  	Customer Performance provides for the following types of technical assistance to the airline customer:	
 
 	•	 	Engine Performance Analysis Computer Programs for Test Cell Use	
 
 	•	 	Test Cell Correlation Analysis and Correction Factors	
 
 	•	 	Engine Stability Procedures and Problem Analysis	
 
 	  	Although much of the above support is provided in the form of procedures, data and recommendations in various publications, the group also answers inquiries of a performance nature which are forwarded to IAE by individual customers.	
 
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 	  	ENGINE PERFORMANCE ANALYSIS	
 
 	  	Technical support is provided in a number of areas related to operational suitability including the development of the test requirements and performance limits for the Adjustment and Test Section of the Engine Manual. Computer programs that will assist the operator in analyzing engine performance using test cell data can be provided subject to IAE then current standard license fees and Terms and Conditions.	
 
 	4.3.1	Test Cell Correlation:	
 
 	  	Technical assistance is provided to the customer for developing appropriate corrections to be used for specific test configurations at customer owned test cell facilities. Reports are provided presenting correlation analyses and IAE recommended test cell corrections which permit comparison of the performance of customer tested engines with the respective Engine Manual limits and guarantee plan requirements.	
 
 	4.3.2	Engine Stability:	
 
 	  	Technical support is provided to ensure that engine stability and starting reliability are maintained. Service evaluation programs for proposed improvements are initiated and monitored to determine their effectiveness. In addition, problems relating to engine control systems which impact engine stability and performance are analyzed.	
 
 	4.4	DIAGNOSTIC SYSTEMS	
 
 	  	Diagnostic Systems is responsible for the technical support of customer acquisition of inflight engine data and the assessment of engine performance through the use of that data. Diagnostic Systems personnel provide the following services:	
 
 	•	 	Guidance to help customers define their engine monitoring system requirements.	
 
 	•	 	Development of hardware specifications and computer programs (by separate contractual arrangement) to satisfy engine diagnostic requirements.	
 
 	•	 	Coordination of all IAE airborne diagnostic support activity.	
 
 	4.4.1	Guidance In Defining Engine Monitoring systems Requirements:	
 
 	  	Diagnostic Systems can provide consultation services to assist the customer in defining his engine condition and performance monitoring requirements and in selection of appropriate hardware and software systems to meet those requirements and options between the customer, airframe manufacturer, and Airborne Integrated Data System (AIDS) manufacturer.	
 
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 	4.4.2	Development and Coordination	
 
 	  	Diagnostic Systems personnel can develop hardware specification and make computer software available to accomplish Engine Condition Monitoring (ECM) and performance analysis of engine modules using AIDS data. Engine condition monitoring procedures, of both the manual and computerized variety can also be developed and provided in support of the customer’s selected method of engine condition monitoring. Computer software will be provided to the customer subject to IAE’s then current standard license fees and Terms and Conditions.	
 
 	  	Diagnostic Systems personnel also coordinate activities of cognizant functional groups at IAE to provide engine related information to the customer, airframe manufacturer, and AIDS equipment vendor during the planning, installation, and operation of AIDS.	
 
 	4.5	HUMAN FACTORS	
 
 	  	Human Factors supplies data on task time and skill requirements necessary for accomplishing maintenance procedures.	
 
 	  	Task data provided includes estimates of the man-hours, elapsed time and job skills necessary to accomplish maintenance tasks as described in IAE’s Manual and Service Bulletins. Data is supplied for “on” and “off” aircraft maintenance tasks up to modular disassembly/assembly. Additional selected task data can be supplied on disassembly/assembly to the piece part level and on parts repair. In addition, the group can help solve problems related to skill requirements, body dimensions, or excessive man-hours encountered in accomplishing maintenance tasks.	
 
 	4.6	FLIGHT OPERATIONS	
 
 	  	Flight Operations provides the airline customer with the following technical assistance concerning installed engine operations:	
 
 	•	 	Introduction of new equipment	
 
 	•	 	Problem resolution and assistance with in-service equipment	
 
 	•	 	Contractual commitment and development program support	
 
 	•	 	Publication of engine operations literature and performance aids	
 
 	4.6.1	New Equipment:	
 
 	  	In accordance with customer needs, Flight Operations can provide on-site assistance in the training of operations personnel and help in solving engine operational problems that might arise during the initial commercial service period. Such assistance can include participation in initial delivery flights, engine operational reviews, and flight crew training activity.	
 
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 	4.6.2	Problem Resolution - In-Service Equipment:	
 
 	  	In accordance with a mutually agreed upon plan, Flight Operations can perform cockpit observations to identify or resolve engine operating problems and to assess installed engine performance.	
 
 	4.6.3	Contractual Support and Development Programs:	
 
 	  	As required, Flight Operations can assist in evaluating installed engine performance relative to contractual commitments and engine improvements which have an impact on engine operations.	
 
 	4.6.4	Publication Support:	
 
 	  	Flight Operations is responsible for the issuance of Propulsion System Operating Instructions and correspondence pertaining to inflight engine operations. Such material is coordinated with the airframe manufacturers as required. Special Presentations and Reports are also issued, as required, to support the activity described above.	
 
 	4.7	REPAIR SERVICES	
 
 	  	Repair Services provides the following support to the airline customers:	
 
 	•	 	Coordinated Repair Development Activity	
 
 	•	 	Customer Assistance on Repair Procedures and Techniques	
 
 	•	 	Qualification of Repair Sources	
 
 	•	 	Repair Workshops	
 
 	•	 	Repair Development List	
 
 	4.7.1	Coordination of Repair Development:	
 
 	  	Repair Services provide direct contact with all sources that initiate repair schemes. The Group coordinates with representatives of Engineering and Support Services disciplines in identifying repair needs, evaluating various repair options and establishing repair development procedures and schedules. The Group participates in setting repair evaluation and approval requirements. When the repair is approved and substantiating data is documented, Repair Services releases the repair to the Engine Manual.	
 
 	4.7.2	Technical Assistance:	
 
 	  	Repair Services provides daily communications with airline customers via technical responses to inquiries direct from the airline or through our Customer Support Representative office at the airline facility. In addition, Repair Services make periodic visits to airline repair facilities to discuss new repairs under development, answer specific questions posed by the particular facility and review actual parts awaiting a repair/scrap decision. Occasionally, Repair Services make special visits to customer facilities to assist in training customer personnel in accomplishing particularly complex repairs.	
 
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 	4.7.3	Qualification of Repair Sources:	
 
 	  	Repair Services coordinates the qualification of repair sources for repairs proprietary to IAE or to an outside repair agency. They also perform a review of the qualifications of repair sources for critical, nonproprietary repairs for which a source demonstration is deemed necessary. The group participates in negotiation of the legal and business agreements associated with these qualification programs.	
 
 	4.8	TOOLING AND SUPPORT EQUIPMENT SERVICES	
 
 	  	The Tooling and Support Equipment Services Group assists the customer by providing the following services:	
 
 	•	 	Support Equipment Manufacturing/Procurement Documentation	
 
 	•	 	Engine Accessory Test Equipment and Engine Transportation Equipment Specifications	
 
 	•	 	Support Equipment Logistics Planning Assistance	
 
 	4.8.1	Support Equipment Documentation:	
 
 	  	The tooling and Support Equipment Services Group designs the special support equipment required to disassemble, assemble, inspect, repair and test IAE engines. Special support equipment design drawings and Support Equipment Master Data Sheets, which describe how to use the support equipment, are supplied to customers in the form of 35mm aperture cards. Support equipment designs are kept current with engine growth, and tool Bulletins are issued to customers as part of continuing configuration management service. Updated Design and Master Data Sheets Aperture Cards and Tool Bulletins are periodically distributed to all IAE customers.	
 
 	4.8.2	Engine Accessory Test Equipment and Engine Transportation Equipment Requirements:	
 
 	  	Engine accessory test equipment and engine transportation equipment general requirements and specifications are defined and made available to IAE customers. If requested, the Tooling and Support Equipment Group will assist customers in the definition of engine accessory test and engine transportation equipment required for specific IAE needs.	
 
 	4.8.3	Support Equipment Logistics Planning Assistance:	
 
 	  	The Tooling and Support Equipment Group will provide, at the customer’s request, special support equipment lists which reflect the customer’s unique requirements such as mix of engine models and desired level of maintenance to aid in support equipment requirements planning.	
 
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 	4.9	TECHNICAL PUBLICATIONS	
 
 	  	IAE and its subcontractors produce publications and maintenance information as described below to support the maintenance and modification requirements of the airline customer. The publications are prepared in general accordance with Air Transport Association of America (ATA) Specification No. 100. The necessary quantities of manuals and media options will be available subject to IAE’s current terms and conditions.	
 
 	4.9.1	On-Wing Maintenance Data:	
 
 	  	IAE supplies the airplane manufacturer with all the necessary information required to perform “On-Aircraft” engine maintenance, troubleshooting, and servicing. This information is developed through close coordination between the airplane manufacturer and IAE and is integrated by the airplane manufacturer into his maintenance publications.	
 
 	4.9.2	Technical Publications:	
 
 	  	Listed and described below are the publications that will be made available to support the airline customer’s maintenance program:	
 
 	4.9.3	Engine Manual	
 
 	  	The Engine Manual is a document which will be structured in accordance with ATA 100 section 2-13-0 with JEMTOSS applied in accordance with section 2-13-14. Potential customer applications will be applied. The manual will provide in one place the technical data requirements for information needed to maintain the engine and the maximum potential number of parts that could, regardless of design responsibility, remain with the engine when it is removed from the airplane. Additionally the manual includes coverage of interrelated parts (e.g. thrust reverser, cowlings, mounts, etc.) that can stay with the airplane when the engine is removed or can be removed for maintenance purpose in lieu of individual component maintenance manuals.	
 
 	4.9.4	Standard Practices Manual	
 
 	  	The Standard Practices Manual supplements the Engine Manual by providing, in a single document, all IAE recommended or approved general procedures covering general torques, riveting, lockwiring, cleaning policy, inspection policy standard repairs, etc., and marking of parts.	
 
 	4.9.5	Illustrated Parts Catalog	
 
 	  	The Illustrated Parts Catalog will be structured in accordance with ATA 2-14-0 and is a document which is used in conjunction with the Engine Manual for the identification and requisitioning of parts and assemblies. Its ATA structure is to be compatible with the Engine Manual Structure. Additionally the manual includes coverage of interrelated parts (e.g.	
 
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 	  	thrust reverser, cowlings, mounts, etc.) that can stay with the airplane when the engine is removed or can be removed for maintenance purpose in lieu of individual component maintenance manuals.	
 
 	4.9.6	IAE Proprietary Component Maintenance Manuals	
 
 	  	These manuals will be structured in accordance with ATA 2-5-0 and will cover data for chapters other than 71, 72, and 78.	
 
 	4.9.7	Subcontractor Component Maintenance Manuals	
 
 	  	These manuals will be structured in accordance with ATA 2-5-0 and are prepared directly by the accessory manufacturers. All accessory data is subject to IAE prepublication review and approval.	
 
 	4.9.8	Engine and Accessory Component service Bulletins	
 
 	  	Each Engine and Accessory Component Service Bulletin will be produced in accordance with ATA 2-7-0. They will cover planning information, engine or component effectivity, reason for Bulletin, recommended compliance, manpower requirements, and tooling information relating to parts repair or modification. Subcontractor prepared Accessory Component Service Bulletins are reviewed by IAE prior to issuance. Alert Service Bulletins will be issued on all matters requiring the urgent attention of the airline customer and will generally be limited to items affecting safety. The Bulletin will contain all the necessary information to accomplish the required action.	
 
 	4.9.9	Operating Instructions	
 
 	  	Engine operating instructions are presented in the form of General Operating Instructions supplemented by V2500 Specific Engine Operating Instructions which provide operating information, procedures, operating curves and engine limits.	
 
 	4.9.10	Facilities Planning and Facility Equipment Manuals	
 
 	  	The Facilities Planning Manual outlines the requirements for engine/component overhaul, maintenance, and test facilities in terms of basic operations, processes, time studies and equipment. The Facility Equipment Manual lists and describes the facility equipment used for engine maintenance, overhaul and repair.	
 
 	4.9.11	Support Equipment Numerical Index	
 
 	  	The Indexes, prepared for each major engine model, provide a listing, in numeric sequence, by maintenance level, of all IAE ground support equipment required to maintain and overhaul the engine. The Listings are cross-indexed to the applicable engine dash model and to the chapter and section of the Engine Manual.	
 
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 	4.9.12	Publications Index	
 
 	  	This index contains a listing of available technical manuals covering components of the V2500 Nacelle.	
 
 	4.9.13	Service Bulletin Index	
 
 	  	This index will be in a format and on a revision schedule as determined by IAE.	
 
 	4.9.14	Computer Software Manual	
 
 	  	Data, will be supplied in accordance with ATA 102 revision 2 except where such data are prohibited due to proprietary or Government restrictions.	
 
 	4.9.15	Vital Statistics Logbook	
 
 	  	The VSL provides the following information for each production engine, in an electronic readable format and/or as hard copy printout:	
 
 	•	 	Identification of major engine and nacelle components by part number, serial number and ATA - location.	
 
 	•	 	Engine Test Acceptance Certificate.	
 
 	•	 	List of all incorporated serialized parts by part number, serial number and ATA - Location. This list also includes an Industry Item List to identify specific parts by part number, serial number and ATA - Location which the airline customer may choose to monitor during the engine operational life. The parts listed represent approximately ***** of engine total value.	
 
 	•	 	List of all incorporated life limited parts by part number, serial number and ATA - location.	
 
 	•	 	List of all Service Bulletins that were incorporated during initial build of each new engine.	
 
 	•	 	List of all Service Bulletins that were not incorporated.	
 
 	•	 	List of all saleable pick level engine parts, identifying those parts for which Service Bulletins and service instructions have been issued.	
 
 	4.9.16	Revision Services:	
 
 	  	Regular, temporary, and “as required” revisions to technical publications will be made during the service life of IAE equipment. IAE’s current standard is ninety (90) days. The utilization of advanced techniques and equipment provides the airline customer with expedited revision service.	
 
 	4.9.17	Distribution Media Options:	
 
 	  	The primary medium for available IAE technical publications is roll microfilm at 24:1 reduction, magnetic tape or CD-ROM. Media options such as microfilm at 36:1 reduction, microfiche, and two side or one-sided paper copy of reproducible quality will be available for procurement at established prices.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 55 of 111	

5.0	SPARE PARTS	
 
 	5.1	SPARE PARTS SUPPORT	
 
 	  	The Spare Parts Group provides the following categories of spare parts support to airline customers:	
 
 	•	 	Individual Customer Account Representatives	
 
 	•	 	Provisioning	
 
 	•	 	Planning	
 
 	•	 	Order Administration	
 
 	•	 	Spare Parts Inventory	
 
 	•	 	Effective Expedite Service	
 
 	•	 	Worldwide Distribution	
 
 	5.1.1	Account Representative:	
 
 	  	An Account Representative is assigned to each customer using IAE equipment. This representative provides individualized attention for effective spare parts order administration, and is the customer’s interface on all matters pertaining to new part planning and procurement. Each representative is responsible for monitoring each assigned customer’s requirements and providing effective administrative support. The Account Representatives are thoroughly familiar with each customer’s spare parts ordering policies and procedures and are responsible for ensuring that all customer new parts orders are processed in an effective manner.	
 
 	5.1.2	Spare Parts Provisioning Planning:	
 
 	  	Prior to delivery of the first Vuela craft to an airline customer, preplanning discussions will be held to determine the aircraft/engine program, and engine spare parts provisioning and order plans. Mutually agreed upon provisioning target dates are then established and on-time completion tracked by the Customer Account Representative with the assistance of logistics specialists in Spare Parts Provisioning and Inventory Management. Meetings are held with airline customers at a mutually agreeable time to review suggested spare parts provisioning lists prepared by spare parts Provisioning. These lists are designed to support each customer’s particular fleet size, route structure and maintenance and overhaul program.	
 
 	5.1.3	Order Administration:	
 
 	  	IAE subscribes to the general principles of Air Transport Association of America (ATA) Specification No. 2000, Integrated Data Processing - Supply. The procedures of Air Transport Association of America (ATA) Specification No. 200 may be used for Initial Provisioning (Chapter II), Order Administration (either Chapter III or Chapter VI), or Invoicing (Chapter IV).	
 
Page 56 of 111

 	  	A spare parts supply objective is to maintain a 90 percent on-time shipment performance record to customer requirements. The lead time for replenishment spare parts is identified in the IAE spare Parts Price Catalog. Initial provisioning spare parts orders should be placed at least six months prior to required delivery, while conversions and major modifications require full manufacturing lead times.	
 
 	  	The action to be taken on emergency requests will be answered as follows:	
 
 	•	 	Aircraft-On-Ground (AOG) - within four hours (in these instances every effort is made to ship immediately).	
 
 	•	 	Critical (Imminent Aircraft-On-Ground (AOG) or Work Stoppage) — Within 24 hours.	
 
 	•	 	Stock Outage — Within seven working days (these items are shipped as per customer request).	
 
 	5.1.4	Spare Parts Inventory:	
 
 	  	To ensure availability of spare parts in accordance with published lead time, spare parts provisioning maintains a modern, comprehensive requirements planning and inventory management system which is responsive to changes in customer demand, special support programs and engineering design. Organized on an engine model basis, this system is intended to maintain part availability for delivery to customers consistent with published lead times.	
 
 	  	A majority of parts in the spare parts inventory are continually controlled by an Automatic Forecasting and Ordering System. Those parts which do not lend themselves to automatic control due to supercedure, unusual usage or conversion requirements are under the direct manual control of Spares Planning personnel. As additional protection against changes in production lead time or unpredicted demand, certain raw materials are also inventoried. Successful inventory management is keyed to accurate requirements planning. In support of the requirements planning effort, a wide ranging data retrieval and analysis program is offered. This program concerns itself both with the customer logistics and technical considerations as follows:	
 
 	•	 	Forecasts of life limited parts requirements are requested and received semi-annually from major customers.	
 
 	•	 	Engine technical conferences are held frequently within IAE to assess the impact of technical problems on parts.	
 
 	•	 	For a selected group of parts a provisioning conference system is offered which considers actual part inventory change, including usage and receipts, as reported monthly by participating customers.	
 
Page 57 of 111

 	5.1.5	Packaging	
 
 	  	All material is packaged in general compliance with Air Transport Association of America (ATA) Specification No. 300.	
 
 	5.1.6	World Airline Supplier’s Guide:	
 
 	  	IAE subscribes to the supply objectives set forth in the World Airlines Supplier’s Guide published by the Air Transport Association of America (ATA). IAE requires that its proprietary component vendors also perform in compliance with the precepts of the World Airline Suppliers’ Guide.	
 
Page 58 of 111

Exhibit D
Warranties, Guarantees, and Plans
 
Page 59 of 111

Exhibit D-1
V2500 Engine and Parts Service Policy
 
Page 60 of 111

IAE
INTERNATIONAL AERO ENGINES AG
V2500 ENGINE AND PARTS SERVICE POLICY
Issued: October 25, 1985
Revised: April, 1997
 
Page 61 of 111

IAE
INTERNATIONAL AERO ENGINES AG
V2500 ENGINE AND PARTS SERVICE POLICY
This Engine and Parts Service Policy (“Service Policy”) is a statement of the terms and conditions under which IAE International Aero Engines AG (“IAE”) will grant the Operators of new V2500 Engines certain Allowances and adjustments in the event that Parts of such Engines suffer Failure in Commercial Aviation Use, or in the event that a Parts Life Limit is established or reduced. This Service Policy becomes effective for the Operator’s first new leased or purchased V2500 Engine.
This Service Policy is divided into seven sections:

Section I	  	describes the Credit Allowances which will be granted should the Engine suffer a Failure.	  	Page 64	
			
Section II	  	describes the Credit Allowances which will be granted should a Primary Part Suffer a Failure.	  	Page 66	
			
Section III	  	lists the Class Life for those Primary Parts for which Credit Allowances will be granted.	  	Page 67	
			
Section IV	  	describes the Credit Allowances which will be granted when the establishment or reduction of a Parts Life Limit is mandated.	  	Page 69	
			
Section V	  	describes the Credit Allowances and adjustments which will be granted when IAE declares a Campaign Change.	  	Page 70	
			
Section VI	  	contains the definitions of certain words and terms used throughout this Service Policy. These words and terms are identified in the text of this Service Policy by the use of initial capital letters for such words and terms.	  	Page 73	
			
Section VII	  	contains the general conditions governing the application of this Service Policy.	  	Page 78	
 
Page 62 of 111

I.	ENGINE FAILURE CREDIT ALLOWANCES	
 
 	A.	First Run Engine, Module and Part	
 
 	1.	A First Run Engine is an Engine with ***** hours (or cycles, whichever comes first), or less Engine Time, a First Run Module is a Module with ***** hours (or cycles, whichever comes first), or less Module Time, and a First Run Part is a Part with ***** hours (or cycles, whichever comes first), or less Parts Time operating in a First Run Engine or a First Run Module.	
 
 	2.	If a First Run Part suffers Direct Damage or Resultant Damage, and provided that the Part causing Resultant Damage is also a First Run Part, IAE will grant to the Operator:	
 
 	a.	A ***** percent Parts Credit Allowance for any First Run Part Scrapped, or	
 
 	b.	A ***** percent Labor Credit Allowance for any First Run Part Repaired.	
 
 	3.	If such Damage of a First Run Part requires the removal of the Engine or a Module from the Aircraft, IAE will, in addition to Subparagraph A.2. above, grant to the Operator:	
 
 	a.	A ***** percent Labor Credit Allowance for disassembly, reassembly and necessary testing of the Engine or Module requiring Reconditioning as a result of such Damage of the First Run Part, and	
 
 	b.	A ***** percent Parts Credit Allowance for those Expendable Parts required in the Reconditioning of the Engine or Module.	
 
 	4.	If such Damage of a First Run Part requires the removal of the Engine or a Module from the Aircraft, IAE will arrange, upon request by the Operator, to Recondition the Engine or Module or accomplish the Parts Repair at no charge to the Operator rather than providing the above Credit Allowances. Such work will be accomplished at a V2500 Maintenance Center designated by IAE. Transportation charges to and from the Maintenance Center shall be paid by the Operator.	
 
 	B.	Extended First Run Engine, Module and Part	
 
 	1.	An Extended First Run Engine is an Engine with more than ***** hours (or cycles, whichever comes first), Engine Time but not more than ***** hours (or cycles, whichever comes first), Engine Time, an Extended Run Module is a Module with more than ***** hours (or cycles, whichever comes first), Module Time, but not more than ***** hours (or cycles, whichever comes first), Module Time, and an Extended First Run Part is a Part with ***** hours (or cycles, whichever comes first), or less Parts Time operating in an Extended First Run Engine or an extended First Run Module.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 63 of 111	

 	2.	If an Extended First Run Part suffers Direct Damage or Resultant Damage, and provided that the Part causing Resultant Damage is also an Extended First Run Part, IAE will grant to the Operator:	
 
 	a.	A pro rata Parts Credit Allowance for any Extended First Run Part Scrapped, or	
 
 	b.	A pro rata Labor Credit Allowance for any Extended First Run Part Repaired.	
 
 	  	If the Extended First Run Part is a Primary Part (Section III), the pro rata Credit Allowances will be based on ***** percent at ***** hours (or cycles, whichever comes first), Engine Time which then decreases, pro rata, to ***** percent at ***** hours (or cycles, whichever comes first), Engine Time, or, ***** percent to ***** hours Parts Time which then decreases, pro rata, to ***** percent at the end of its Class Life (Section III), whichever is greater.	
 
 	  	If the Extended First Run Part is not a Primary Part, the pro rata Credit Allowances will be based on ***** percent at ***** hours (or cycles, whichever comes first), Engine Time which then decrease, pro rata, to ***** percent at ***** hours (or cycles, whichever comes first), Engine Time.	
 
 	3.	If such Damage of an Extended First Run Part requires the removal of the Engine or a Module from the Aircraft, IAE will, in addition to Subparagraph B.2. above, grant to the Operator:	
 
 	a.	A pro rata Labor Credit Allowance for disassembly, reassembly and necessary testing of the Engine or Module requiring Reconditioning as a result of such Damage of the Extended First Run Part, and	
 
 	b.	A pro rata Parts Credit Allowance for those Expendable Parts required in the Reconditioning of the Engine or Module.	
 
 	  	The pro rata Credit Allowances will be based on ***** percent at ***** hours (or cycles, whichever comes first), Engine Time, which then decreases, pro rata, to ***** percent at ***** hours (or cycles, whichever comes first), Engine Time.	
 
 	Note:	Section VI, Paragraph D. contains the formulas to be used for computing the Credit Allowances described above.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 64 of 111	

 	C.	Engine or Module Failure Credit Allowances Illustration	
*****
 
 	Note:	The Primary Parts Credit Allowances Illustration (Section II, Paragraph B) is also applicable to the Credit Allowances which are based on Parts Time as described in Section I, Subparagraph B.2.	
 
II.	PRIMARY PARTS CREDIT ALLOWANCE	
 
 	A.	Primary Parts Other Than First Run Parts or Extended First Run Parts	
 
 	1.	Primary Parts are limited to those Parts listed in Section III while such Parts are within the Class Life indicated in Section III.	
 
 	2.	The Primary Parts Credit Allowances described in Subparagraph A.3 below will be based on ***** percent to ***** hours total Parts Time which then decreases, pro rata, to ***** percent at the end of the applicable hourly Class Life.	
 
 	3.	If a Primary Part suffers Direct Damage or Resultant Damage, and provided that the Part causing Resultant Damage is also a Primary Part, IAE will grant to the Operator:	
 
 	a.	A Parts Credit Allowance for any Primary Part Scrapped, or	
 
 	b.	A Labor Credit Allowance for any Primary Part Repaired in accordance with a Parts Repair designated in writing by IAE as being eligible for a Credit Allowance under this Section II, Paragraph A.	
 
 	Note:	Section VI, Paragraph D. contains the formulas to be used for computing the Credit Allowances described above.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 65 of 111	

 	B.	Primary Parts Credit Allowances Illustration	
*****
 
III	IDENTIFICATION OF PRIMARY PARTS	
 
  	The following Parts are defined as Primary Parts while such Parts are within the Class Life indicated. Class Life is the period, expressed in either hours or Parts Time or number of Parts Cycles during which IAE will grant Credit Allowances for Primary Parts which suffer Direct Damage or Resultant Damage, or for which a Parts Life Limit is established or reduced.	
CLASS A (***** HOURS PARTS TIME)
 
 	  	Cold Section Rotating Parts	
 
 	  	LP Compressor Inlet Cone - Spinner	
 	  	LP Compressor 1st Stage Blade - Fan	
 	  	LP Compressor 1st Stage Blade Annulus Fillers	
 	  	LP Compressor 2nd Stage Blade	
 	  	Radial Drive Bevel Gear	
 	  	Tower Shaft	
 	  	HP Compressor 3 through 12th Stage Blades	
 	  	HP Compressor Front and Rear Rotating Airseals	
 	  	LP Turbine Shaft Coupling Nut	
 
 	  	Cold Section Static Parts	
 
 	  	Fan Splitter Fairing	
 	  	LP Compressor Stage 2 Inlet and Exhaust Stator Assembly	
 	  	HP Compressor Stage 3 to Stage 6 Variable Stator Assembly	
 	  	Fan Aerodynamic OGV’s	
 	  	HP Compressor Stage 6 to ll Stator Assembly	
 	  	HP Compressor Exit Stator	
 
 	  	Hot Section Rotating Parts	
 
 	  	HP Turbine Stage l and 2 Blade	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 66 of 111	

HP Turbine Gage Spacer
HP Turbine Lock Nut
LP Turbine Stage 3 to 7 Blades
LP Turbine Lock Nut
Hot Section Static Parts
Fuel Injector
Combustion Chamber Assembly
HPT First Stage Cooling Duct Assembly (TOBI Duct)
HPT 1st and 2nd Stage Nozzle Guide Vane Assembly
HPT 1st and 2nd Stage Outer Airseal Assembly
HP to LP Turbine Transition Duct (Inner & Outer)
LPT Stage 3 to 7 Nozzle Guide Vane Assembly
LPT Stage 3 to 7 Outer Airseal Assembly
Main and Angle Gearbox
Gearshafts and Bearings
Lay Shaft
All Accessory Drive Shafts
Gearbox Oil Pumps (Pressure and Scavenge)
CLASS B *****HOURS PARTS TIME)
Fan Case Assembly (Includes Intermediate Case)
HP Compressor Front Casings (Split Casings)
HP Compressor Rear Casings
Diffuser Case
HP Turbine Case
LP Turbine Case
Turbine Exhaust Case
Main Gearbox Casing
Oil Tank
CLASS C *****HOURS PARTS TIME FOR DAMAGE
*****PARTS CYCLES FOR LIFE LIMIT REDUCTION)
Fan Disk
LPC Drum
HPC 3 to 8 Drum
HPC 9 to 12 Drum
HP Turbine Stage l and 2 Disks
HP Turbine Spacer Disk
HP Turbine Stage l Front Rotating Airseal
HP Turbine 2nd Stage Disk Rear Seal
LP Turbine Stage 3-7 Disks
LP Turbine Stage 3-7 Rotating Airseals
Shafts

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 67 of 111	

IV	PARTS LIFE LIMIT ALLOWANCES	
 
 	A.	A Parts Life Limit is the maximum allowable Parts Time or Parts Cycles for specific Parts as established by IAE and the United States Federal Aviation Administration.	
 
 	B.	Credit Allowances	
 
 	1.	Class A and Class B Primary Parts	
 
 	  	If a Parts Life Limit is established which results in Part Scrappage at less than ***** hours Parts Time for a Class A Primary Part or less than ***** hours Parts Time for a Class B Primary Part, IAE will grant for each such Primary Part Scrapped as a result thereof, a Parts Credit Allowance based on ***** percent to ***** hours total Parts Time which then decreases, pro rata, to ***** percent at the end of ***** hours total Parts Time for a Class A Primary Part or ***** hours total Parts Time for a Class B Primary Part.	
 
 	2.	Class C Primary Parts	
 
 	  	If a Parts Life Limit is established for a Class C Primary Part which results in Part Scrappage in less than ***** total Parts Cycles, IAE will grant for each such Primary Part Scrapped as a result thereof, a Parts Credit Allowance based on ***** percent to ***** total Parts Cycles which then decreases, pro rata, to ***** percent at ***** total Parts Cycles.	
 
 	  	In addition, IAE will grant a similarly calculated Labor Credit Allowance and Parts Credit Allowance for that labor and those Expendable Parts which are solely related to the removal and replacement of such Class C Primary Parts and is additional to other maintenance being performed on the Engine or Module.	
 
 	    	Note : Section VI, Paragraph D. contains the formulas to be used for computing the Credit Allowances described above.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 68 of 111	

 	C.	Parts Life Limit Credit Allowances Illustrations	
*****
 
V	CAMPAIGN CHANGE CREDIT ALLOWANCES AND ADJUSTMENTS	
 
 	A.	A Campaign Change is an IAE program, so designated in writing, for the Reoperation, replacement, addition, or deletion of a Part(s). IAE will grant the Credit Allowances and Adjustments specified in this Section V to the Operator when Campaign Change recommendations are complied with by the Operator.	
 
 	B.	Standard Allowances	
 
 	1.	A ***** percent Parts Credit Allowance for the replacing Parts specified in the Campaign Change for installed Parts or serviceable shelf stock Parts which are Scrapped with ***** hours (or cycles, whichever comes first), or less total Parts Time.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 69 of 111	

 	2.	A pro rata Parts Credit Allowance for the replacing Parts specified in the Campaign Change for installed Parts or serviceable shelf stock Parts which are Scrapped with more than ***** hours (or cycles, whichever comes first), total Parts Time but less than ***** hours (or cycles, whichever comes first), total Parts Time. The pro rata Parts Credit Allowance will be based on ***** percent at ***** hours (or cycles, whichever comes first), total Parts Time which then decreases, pro rata, to ***** percent at ***** hours (or cycles, whichever comes first), total Parts Time.	
 
 	3.	A ***** percent Parts Credit Allowance for the replacing Parts specified in the Campaign Change for installed Parts or serviceable shelf stock Parts which are Scrapped with more than ***** hours (or cycles, whichever comes first), total Parts Time.	
 
 	4.	A ***** percent Labor Credit Allowance for Reoperation of installed Parts or serviceable shelf stock Parts with ***** hours (or cycles, whichever comes first), or less total Parts Time which are Reoperated in accordance with the Campaign Change.	
 
 	5.	A pro rata Labor Credit Allowance for Reoperation of installed Parts or serviceable shelf stock Parts with more than ***** hours (or cycles, whichever comes first), total Parts Time but less than ***** hours (or cycles, whichever comes first), total Parts Time which are Reoperated in accordance with the Campaign Change. The pro rata Labor Credit Allowance will be based on ***** percent at ***** hours (or cycles, whichever comes first), total Parts Time which then decreases, pro rata, to ***** percent at ***** hours (or cycles, whichever comes first), total Parts Time.	
 
 	6.	A ***** percent Labor Credit Allowance for Reoperation of installed Parts or serviceable shelf stock Parts with more than ***** hours (or cycles, whichever comes first), total Parts Time which are Reoperated in accordance with the Campaign Change.	
 
 	7.	A ***** percent Labor Credit Allowance for disassembly and reassembly of the Engine or Module, if the disassembly of the Engine or Module is recommended by IAE for accomplishment of the Campaign Change and such disassembly is performed solely for the purpose of accomplishing the Campaign Change.	
 
 	Note :	Section VI, Paragraph D. contains the formulas to be used for computing the Credit Allowances described above.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 70 of 111	

 	C.	Campaign Change Credit Allowances Illustration	
*****
 
 	D.	Optional Credit Allowances and Adjustments	
 
 	1.	When IAE declares a Campaign Change, IAE, at its sole option, may grant to the Operator Credit Allowances and adjustments, such as, but not necessarily limited to:	
 
 	a.	No Charge material.	
 
 	b.	Specifically priced material.	
 
 	c.	Single credit settlements for the Operators’ fleet.	
 
 	d.	Fixed Credit Allowance support for each Engine.	
 
 	2.	These optional Credit Allowances and Adjustments may be provided:	
 
 	a.	Instead of the standard Credit Allowances of Section V, Paragraph B,	
 
 	b.	In addition to the standard Credit Allowances of Section V, Paragraph B, or	
 
 	c.	As a portion of the standard Credit Allowances of Section V, Paragraph B.	
 
 	3.	In no event shall the worth to the Operator, as reasonably determined by IAE, be less than the amount that would have been granted to the Operator as a standard Campaign Change Credit Allowance, per Section V, Paragraph B. In considering the use of these optional Credit Allowances and adjustments, IAE will attempt to minimize the financial and administrative impact on the Operator.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 71 of 111	

VI	DEFINITIONS	
 
 	A.	CAMPAIGN CHANGE is an IAE program, so designated in writing, for the Reoperation, replacement, addition or deletion of Part(s) and is characterized by the granting of certain Credit Allowances to the Operator when such program recommendations are complied with by the Operator.	
 
 	B.	CLASS LIFE is the period, expressed in either hours of Part Time or number of Parts Cycles, during which IAE will grant Credit Allowances for Primary Parts which suffer Direct Damage or Resultant Damage, or for which a Parts Life Limit is established or reduced.	
 
 	C.	COMMERCIAL AVIATION USE is the operation of Engines in Aircraft used for commercial, corporate or private transport purposes. The operation of Engines by government agencies or services is normally excluded except that IAE will consider written requests for the inclusion of such Engines under the provisions of this Service Policy.	
 
 	D.	CREDIT ALLOWANCES	
 
 	1.	PARTS CREDIT ALLOWANCE is an amount determined in accordance with the following formulas:	

a.	 		  	***** Parts Credit Allowance	  	=     P    		
					
b.	 		  	***** Parts Credit Allowance	  	  		
					
c.	 		  	Pro rata Parts Credit Allowance	  	=	  		
 
 	(1)	For a Primary Part which suffers Direct or Resultant Damage, or a Class A or Class B Primary Part for which a Parts Life Limit is established:	

 
 	(2)	For a Class C Primary Part for which a Parts Life Limit is established, which is greater than ***** total Parts Cycles but is less than ***** total Parts Cycles:	

 
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 72 of 111	

 	(3)	For replacement of a Part because of a Campaign Change, when such a Part has more than ***** hours (or cycles, whichever comes first), Parts Time but less than ***** hours (or cycles, whichever comes first), Parts Time:	

 	  		
 
 	d.	Extended First Run Parts Credit Allowance         =	

 	  		
 
 	2.	LABOR CREDIT ALLOWANCE is an amount determined in accordance with the following formulas, except that in no event shall the amount to be granted for repair of Parts exceed the amount of the Parts Credit Allowance which would have been granted if the Part had been Scrapped:	

a.	  	***** Labor Credit Allowance	  	 	=	  	  	 	H	×R 	 		
				
b.	  	***** Labor Credit Allowance	  	 	  	  	 		

c.	  	Pro rata Labor Credit Allowance	  	 	=	  	  				 		
 
 	(1)	For a Primary Part which suffers Direct or Resultant Damage, or a Class A or Class B Primary Part for which a Parts Life Limit is established:	

 
 	(2)	For a Class C Primary Part for which a Parts Life Limit is established which is greater than ***** total Parts Cycles but is less than ***** total Parts Cycles:	

 
 	(3)	For replacement of a Part because of a Campaign Change, which such a Part has more than ***** hours (or cycles, whichever comes first), Parts Time but less than ***** hours (or cycles, whichever comes first), Parts Time:	

 
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 73 of 111	

 

 	d.	Extended First Run Labor Credit Allowance         =	

 
 	3.	The variables used in calculating the above allowances are defined as:	

P	  	=	    	a.	  	For a Part Scrapped because of Direct Damage, Resultant Damage or a Parts Life Limit being established, the IAE commercial price of the Part Scrapped current at the time of either the Engine removal or Part removal, whichever occurs sooner, or	
				
	  		    	b.	  	For replacement of a Part because of a Campaign Change, the IAE commercial price of the replacing Part specified in the Campaign Change current at the time of notification to the Operator of the Campaign Change.	
				
T	  	=	    	a.	  	For a Primary Part which has suffered Direct Damage or Resultant Damage, the actual Parts Time on the Part minus ***** hours, or	
				
	  		    	b.	  	For a Class A or Class B Primary Part for which a Parts Life Limit is established, the actual Parts Time on the Part minus ***** hours, or the Parts Life Limit minus ***** hours, whichever is greater, or	
				
	  		    	c.	  	For replacement of a Part because of a Campaign Change, when such a Part has more than ***** hours (or cycles, whichever comes first), Parts Time but less than ***** hours (or cycles, whichever comes first), Parts Time, the actual Parts Time on the Part.	
			
C	  	=	    	For a Class C Primary Part for which a Parts Life Limit is established which is greater than ***** Total Parts Cycles but less than ***** Total Parts Cycles, the greater of either:	
				
	  		    	a.	  	The actual Parts Cycles on the Part minus ***** cycles, or	
				
	  		    	b.	  	The new Parts Life Limit minus ***** Cycles.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 74 of 111	

							
				
Lt	  	=	    	Either:	  		
				
	  		    	a.	  	For a Primary Part which has suffered Direct Damage or Resultant Damage, the hours indicated in Section III minus ***** hours, or	
				
	  		    	b.	  	For a Class A or Class B Primary Part for which a Parts Life Limit is established, the hours indicated in Section III minus ***** hours.	
			
L c	  	=	    	For a Class C Primary Part for which a Parts Life Limit is established which is greater than ***** total Parts Cycle, ***** Cycles.	
			
H	  	=	    	The man-hours required to accomplish the work as established in writing by IAE.	
			
R	  	=	    	The labor rate, expressed in U.S. Dollars per hour, which will be determined as follows:	
				
	  		    	a.	  	If the labor is performed at the Operator’s facility, or its subcontractor’s facility, the labor rate will be the greater of the Operator’s labor rate or the subcontractor’s labor rate, where the labor rates were determined in accordance with IAE Form XIAE380 and provided to the Operator in writing, or	
				
	  		    	b.	  	If the labor is performed by IAE, the labor rate will be the then-current labor rate of IAE.	
			
E	  	=	    	Actual Engine Time on an Extended First Run Engine.	
 
 	E.	DIRECT DAMAGE is the damage suffered by a Part itself upon its Failure.	
 
 	F.	ECONOMICALLY REPAIRABLE shall generally mean that the cost of the repair as determined by IAE, exclusive of modification and transportation costs, will be equal to or less than ***** percent of the IAE commercial price of the Part at the time the repair is considered, or, shall be as otherwise reasonably determined by IAE.	
 
 	G.	ENGINE(S) means those V2500 Engine(s), as described by IAE Specifications, sold by IAE for Commercial Aviation Use, whether installed as new equipment in aircraft by the manufacturer thereof and delivered to the Operator or delivered directly to the Operator from IAE for use as a spare Engine. An Engine which has been converted or upgraded in accordance with IAE instructions shall continue to qualify for Credit Allowances and Adjustments under the provisions of this Service Policy.	
 
 	H.	ENGINE OR MODULE TIME is the total number of flight hours of operation of an Engine or a Module.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 75 of 111	

 	I.	EXPENDABLE PARTS means those nonreusable Parts, as determined by IAE, which are required to be replaced during inspection or Reconditioning, regardless of the condition of the Part.	
 
 	J.	EXTENDED FIRST RUN ENGINE OR MODULE is an Engine or Module with more than ***** hours (or cycles, whichever comes first), Engine or Module Time but not more than ***** hours (or cycles, whichever comes first), Engine or Module Time.	
 
 	K.	EXTENDED FIRST RUN PART means a Part with ***** hours (or cycles, whichever comes first), or less Parts Time operating in an Extended First Run Engine.	
 
 	L.	FAILURE (FAILED) is the breakage, injury, or malfunction of a Part rendering it unserviceable and incapable of continued operation without corrective action.	
 
 	M.	FIRST RUN ENGINE OR FIRST RUN MODULE is an Engine or Module with ***** hours (or cycles, whichever comes first), or less Engine or Module Time.	
 
 	N.	FIRST RUN PART is an Engine Part with ***** hours (or cycles, whichever comes first), or less Parts Time operating in a First Run Engine.	
 
 	O.	MODULE(S) means any one or more of the following assemblies of Parts :	
 
 	  	Fan Assembly and Low Pressure Compressor Assembly	
 	  	High Pressure Compressor Assembly	
 	  	High Pressure Turbine Assembly Low Pressure Turbine Assembly	
 	  	Main gearbox	
 	  	Any other Assembly of Parts so designated by IAE	
 
 	P.	OPERATOR is the owner of one or more Engines operated for Commercial Aviation Use, the lessee if such Engine(s) is the subject of a long-term financing lease or as otherwise reasonably determined by IAE.	
 
 	Q.	PART(S) means Engine parts sold by IAE and delivered to the Operator as original equipment in an Engine or Engine parts sold and delivered by IAE to the Operator as new spare parts in support of an Engine.	
 
 	R.	PARTS CYCLE(S) means the aggregate total number of times a Part completes an Aircraft takeoff and landing cycle, whether or not thrust reverser is used on landing. As pilot training will involve extra throttle transients such as touch and go landings and takeoffs, IAE shall evaluate such transients for Parts Cycle determination.	
 
 	S.	PARTS LIFE LIMIT is the maximum allowable total Parts Time or total Parts Cycles for specific Parts, including Reoperation if applicable, as established by IAE or by the United States Federal Aviation Administration. Parts Life Limits are published in the Time Limits Section (Chapter 05) of the applicable V2500 Series Engine Manual.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 76 of 111	

 	T.	PARTS REPAIR means the IAE designated restoration of Failed Parts to functional serviceable status, excluding repair of normal wear and tear, as determined by IAE.	
 
 	U.	PARTS TIME is the total number of flight hours of operation of a Part.	
 
 	V.	PRIMARY PART(S) are limited to those Parts listed in Section III while such Parts are within the Class Life indicated in Section III.	
 
 	W.	RECONDITIONING means the restoration of an Engine or Module allowing substitution of new or serviceable used Parts, to the extent necessary for continued operation of the Engine or Module as a serviceable unit. When such Reconditioning is performed by IAE, the Parts Time or Parts Cycles, as applicable, of the replaced Part shall, for the purpose of this Service Policy, be applicable to the substituted new or serviceable used Part. Said replaced Part shall become the property of IAE.	
 
 	X.	REOPERATION is the alteration to or modification of a Part.	
 
 	Y.	RESULTANT DAMAGE is the damage suffered by a Part because of the Failure of another Part within the same Engine.	
 
 	Z.	SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those Parts determined by IAE to be unserviceable and not Economically Repairable. The Operator shall cause such Parts to be mutilated or disposed of in such a manner as to preclude any possible further use as an Engine Part.	
 
VII	GENERAL CONDITIONS	
   The following general conditions govern the application of this Service Policy:
 
 	A.	Records and Audit	
 
 	  	The Operator shall maintain adequate records for the administration of this Service Policy and shall permit IAE to audit such records at reasonable intervals.	
 
 	B.	Scrapping of Parts	
 
 	1.	Scrappage Verification	
 
 	  	Any Part for which a Parts Credit Allowance is requested shall be verified as Scrapped prior to the issuance of the Parts Credit Allowance. Verification of Scrappage shall occur as follows:	
 
 	a.	At the Operator’s, or its subcontractor’s, facility. Such verification shall be accomplished by the IAE Field Representative.	
 
 	b.	At IAE, provided that IAE concurs that the Part is to be Scrapped. Sufficient information to identify the Part, the Engine from which the Part was removed, and the reason for its return shall be provided.	
 
Page 77 of 111

 	2.	Return of Parts	
 
 	  	IAE, at its sole option, may require the Operator to return to IAE any Part for which a Parts Credit Allowance is requested. Such return shall be a condition for the issuance of a Parts Credit Allowance.	
 
 	3.	Transportation Expenses	
 
 	  	Transportation expenses shall be at the expense of the Operator if such Parts are shipped to and from IAE for examination and verification; except that IAE shall pay the expense if such Parts are shipped at the request of IAE.	
 
 	4.	Title	
 
 	  	Title to such Parts returned to IAE shall vest in IAE:	
 
 	a.	Upon determination by IAE that the Operator is eligible for a Parts Credit Allowance. If it is determined that the Parts are scrapped Parts but are not eligible for Service Policy coverage, the Operator will be notified of the decision and the Parts returned at the Operator’s expense if the Operator so requests; otherwise, the Parts will be disposed of by IAE without any type of adjustment, or	
 
 	b.	Upon shipment, when such Parts are determined to be Scrap at the Operator’s facility and are shipped to IAE at the request of IAE.	
 
 	C.	Repairability Requirements	
 
 	  	The Operator shall set aside and exclude from the operation of this Service Policy for a period of ***** months any Part for which IAE states it has, or plans to initiate, an active program to achieve a repair, corrective Reoperation or Parts Life Limit extension. In the event IAE has not released a repair procedure, corrective Reoperation, or Parts Life Limit extension by the expiration of this ***** month period, such Part shall be retained by the Operator and excluded from the operation of this Service Policy for additional periods beyond the expiration of said ***** month period only if agreed to by the Operator.	
 
 	D.	Exclusions from Service Policy	
 
 	  	This Service Policy will not apply to any Engine, Module or Part if it has been determined to the reasonable satisfaction of IAE that said Engine, Module or Part has Failed because it:	
 
 	1.	Has not been properly installed or maintained in accordance with IAE recommendations unless such improper installation or maintenance was performed by IAE, or	
 
 	2.	Has been used contrary to the operating and maintenance instructions or recommendations authorized or issued by IAE and current at the time, or	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 78 of 111	

 	3.	Has been repaired or altered other than by an IAE designated V2500 Maintenance Center in such a way as to impair its safety, operation or efficiency, or	
 
 	4.	Has been subjected to:	
 
 	a.	Misuse, neglect, or accident, or	
 
 	b.	Ingestion of foreign material, or	
 
 	5.	Has been affected in any way by a part not defined as a Part herein or by a repair or maintenance practice not approved by IAE, or	
 
 	6.	Has been affected in any way by occurrences not associated with ordinary use, such as, but not limited to, acts of war, rebellion, seizure or other belligerent acts.	
 
 	E.	Payment Options	
 
 	  	IAE at its option may grant any Parts Credit Allowance as either a credit to the Operator’s account with IAE or as a Part replacement.	
 
 	F.	Presentation of Claims	
 
 	  	Any request for a Credit Allowance must be presented to IAE not later than ***** days after the removal from service of the Engine or Part for which the Credit Allowance is requested. If IAE disallows the request, written notification will be provided to the Operator. The Operator shall have ***** days from such notification to request a reconsideration of the request for Credit Allowance. IAE shall have the right to refuse any request for a Credit Allowance which is not submitted within the stated time periods.	
 
 	G.	Duration of Service Policy	
 
 	  	This Service Policy will normally cease to apply to all Parts in any Engine that is more than ***** years old as measured from the date of shipment of the Engine from the factory. Unless advised to the contrary by IAE, this Service Policy shall, however, continue to be applicable to individual Engines after the expiration of the ***** year period on a year to year basis so that the Operator may continue to receive the benefits of the Service Policy on the Parts in these Engines.	
 
 	H.	General Administration	
 
 	  	On matters concerning this Service Policy, the Operator is requested to address all correspondence to:	
 
 	  	IAE International Aero Engines AG	
 	  	400 Main Street	
 	  	Mail Stop 121-10	
 	  	East Hartford, CT 06108	
 	  	Attention: Warranty Administration	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 79 of 111	

 	I.	Limitation of Liability	
 
 	1.	The express provisions of this Service Policy set forth the maximum liability of IAE with respect to any claims relating to this Service Policy. In the event of any conflict or inconsistency between the express provisions of this Service Policy and any Illustrations contained herein, the express provisions shall govern.	
 
 	2.	Except to the extent that the Credit Allowances and adjustments expressly set forth in this Service Policy may exceed the limitations of the corresponding portions of any warranties or representations included in any sales agreements, the provisions of this Service Policy do not modify, enlarge or extend in any manner the conditions governing the sale of its Engines and Parts by IAE.	
 
 	3.	IAE reserves the right to change or retract this Service Policy at any time at its sole discretion. No such retraction or change shall diminish the benefits which the Operator may be entitled to receive with respect to Engines for which an acceptable order has been placed with IAE or with respect to aircraft with installed Engines for which a firm unconditional order has been placed with the aircraft manufacturer prior to the announcement of any such retraction or change.	
 
 	J.	Assignment of Service Policy	
 
 	  	This Service Policy shall not be assigned, either in whole or in part, by either party. IAE will, however, upon the written request of the Operator consider an extension of Service Policy Credit Allowances and adjustments to Engines, Modules and Parts sold or leased by an Operator to another Operator, to the extent only, however, that such Credit Allowances and adjustments exist at the time of such sale or lease and subject to the terms and conditions of the Service Policy. IAE shall not unreasonably withhold such extension of such Credit Allowances.	
 
Page 80 of 111

Exhibit D-2
V2500 Nacelle and Parts Service Policy
 
Page 81 of 111

IAE
INTERNATIONAL AERO ENGINES AG
V2500 NACELLE AND PARTS SERVICE POLICY
Issued: November 16, 1988
 
Page 82 of 111

IAE
INTERNATIONAL AERO ENGINES AG
V2500 NACELLE AND PARTS SERVICE POLICY
This Nacelle and Parts Service Policy ( Service Policy ) is a statement of the terms and conditions under which IAE International Aero Engines AG (“ IAE ”) will grant the Operators of its V2500 Nacelles certain Allowances and adjustments in the event that Parts of such Nacelles suffer Failure in service.
This Service Policy is divided into four sections:

Section I	  	describes the Allowances and adjustments which will be granted should the Nacelle or Part(s) suffer a Failure.	  	Page 85	
			
Section II	  	describes the Allowances and adjustments which will be granted when IAE declares a Campaign Change.	  	Page 86	
			
Section III	  	contains the definitions of certain words and terms used throughout this Service Policy. These words and terms are identified in the text of this Service Policy by the use of initial capital letters for such words and terms.	  	Page 87	
			
Section IV	  	contains the general conditions governing the application of this Service Policy.	  	Page 90	
 
Page 83 of 111

I	ALLOWANCES AND ADJUSTMENTS	
 
 	A.	First Run Nacelle and Part	
 
 	1.	A First Run Nacelle is a Nacelle with ***** hours or less Nacelle Time and a First Run Part is a Part with ***** hours or less Parts Time operating in a First Run Nacelle.	
 
 	2.	If a First Run Part suffers Direct Damage or Resultant Damage, and provided that the Part causing Resultant Damage is also a First Run Part:	
 
 	a.	IAE will grant to the Operator:	
 
 	(1)	A ***** percent Parts Credit Allowance for any such First Run Part Scrapped, and	
 
 	(2)	A ***** percent Labor Allowance for Parts Repair of any First Run Part requiring Parts Repair.	
 
 	b.	If such Damage of a First Run Part causes the removal of the Nacelle from the Aircraft, IAE will, in addition to Subparagraph a. above, grant to the Operator:	
 
 	(1)	A ***** percent Labor Allowance for disassembly, reassembly and necessary testing of the Nacelle requiring Reconditioning as a result of such Damage of the First Run Part, and	
 
 	(2)	A ***** percent Parts Credit Allowance for those Expendable Parts required in the Reconditioning of the Nacelle.	
 
 	c.	If such Damage of a First Run Part causes the removal of the Nacelle from the Aircraft, IAE will arrange, upon request by the Operator, to Recondition the Nacelle or accomplish the Parts Repair at no charge to the Operator rather than providing the above Allowances. Such work will be accomplished at a V2500 Maintenance Center designated by IAE. Transportation charges to and from the Maintenance Center shall be paid by the operator.	
 
 	B.	Primary Part	
 
 	1.	A Primary Part is a Part other than a First Run Part but having not more than ***** hours Parts Time.	
 
 	2.	Primary Parts not eligible for those Allowances granted to First Run Parts are eligible for Allowances under this Section I, Paragraph B., provided that the Primary Part suffers Direct Damage or Resultant Damage and Provided that the Part causing Resultant Damage is also a Primary Part.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 84 of 111	

 	3.	IAE will grant to the Operator a Parts Credit Allowance for such a Primary Part Scrapped or a Labor Allowance for such a Primary Part for which a Parts Repair is designated in writing by IAE as being eligible for adjustment under this Section I, Paragraph B. Such Allowance will be based on ***** percent to ***** hours total Parts Time which then decreases, pro rata, to zero percent at ***** hours Parts time.	
 
II	CAMPAIGN CHANGE ALLOWANCES AND ADJUSTMENTS	
 
 	A.	A Campaign Change is an IAE program, so designated in writing, for the Reoperation, replacement, addition, or deletion of a Part(s). IAE will grant the Allowances and adjustments specified in this Section II to the Operator when Campaign Change recommendations are complied with by the Operator.	
 
 	B.	Standard Allowances	
 
 	1.	A ***** percent Parts Credit Allowance for the replacing Parts specified in the Campaign Change for installed or serviceable shelf stock Nacelle Parts which are Scrapped with ***** hours or less total Parts Time.	
 
 	2.	A ***** percent Parts Credit Allowance for the replacing Parts specified in the Campaign Change for installed or serviceable shelf stock Nacelle Parts which are Scrapped with more than ***** hours total Parts Time.	
 
 	3.	A ***** percent Labor Allowance for Reoperation of installed or serviceable shelf stock Nacelle Parts with ***** hours or less total Parts Time, which are Reoperated in accordance with the Campaign Change.	
 
 	4.	A ***** percent Labor Allowance for Reoperation of installed or serviceable shelf stock Nacelle Parts with more than ***** hours total Parts Time, which are Reoperated in accordance with the Campaign Change.	
 
 	5.	A ***** percent Labor Allowance for disassembly and reassembly of the Nacelle, if the disassembly is recommended by IAE for accomplishment of the Campaign Change and such disassembly is performed solely for the purpose of accomplishing the Campaign Change.	
 
 	C.	Optional Allowances and Adjustments	
 
 	1.	When IAE declares a Campaign Change, IAE, at its sole option, may grant to the Operator allowances and adjustments, such as, but not necessarily limited to:	
 
 	a.	No charge material	
 
 	b.	Specially priced material	
 
 	c.	Single payment settlements for the Operators’ fleet	
 
 	d.	Fixed allowance support for each Nacelle.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 85 of 111	

 	2.	These optional allowances and adjustments will be provided either:	
 
 	a.	Instead of the standard Allowances of Paragraph B.,	
 
 	b.	In addition to the standard Allowances of Paragraph B., or	
 
 	c.	As a portion of the standard Allowances of Paragraph B.	
 
 	3.	In no event shall the worth to the Operator, as reasonably determined by IAE, be less than the amount that would have been granted to the Operator as a standard Campaign Change Allowance, per Paragraph B. In considering the use of these optional allowances and adjustments, IAE will attempt to minimize the financial and administrative impact on the Operator.	
 
III	DEFINITIONS	
 
 	A.	ALLOWANCES	
 
 	1.	PARTS CREDIT ALLOWANCE is an amount determined in accordance with the following formula:	

a.	  	***** Parts Credit Allowance	  	=	  	P	  		
				
b.	  	***** Parts Credit Allowance	  	  	  		

c.	  	Pro rata Parts Credit Allowance	  	  	  		

 	2.	LABOR ALLOWANCE is an amount determined in accordance with the following formulas, except that in no event shall the amount to be granted for repair of Parts exceed the amount of the Parts Credit Allowance which would have been granted if the Part had been Scrapped.	

				
a.	  	***** Labor Allowance	  	            =     H×R	  		
			
b.	  	***** Labor Allowance	  	  	

c.	  	Pro rata Labor Allowance	  	  	

 	3.	The variables used in calculating the above Allowances are defined as:	

P	  	=	  	for a Part Scrapped because of Direct Damage or Resultant Damage, the IAE commercial price of the Part Scrapped current at the time of either the Nacelle removal or Part removal, whichever occurs sooner, or	
 
Page 86 of 111

							
			
	  		  	for replacement of Parts because of a Campaign Change, the IAE price of the replacing Part specified in the Campaign Change current at the time of notification to the Operator of the Campaign Change.	
			
T	  	=	  	actual Parts Time hours on a Part which has suffered Direct Damage or Resultant Damage or the Parts Life Limit as established for the Part.	
			
H	  	=	  	the man-hours required to accomplish the work as established in writing by IAE.	
			
R	  	=	  	the labor rate, expressed in dollars per hour, which will be determined as follows:	
				
	  		  	a.	  	If the labor is performed at the Operator’s facility, or its subcontractor’s facility, the labor rate will be the greater of the Operator’s labor rate or the subcontractor’s labor rate, where the labor rates were determined in accordance with IAE Form and provided to the Operator in writing, or	
				
	  		  	b.	  	If the labor is performed at a V2500 Maintenance Center designated by IAE, the labor rate will be the then current labor rate at that Center.	
 
 	B.	CAMPAIGN CHANGE is an IAE program, so designated in writing, for the Reoperation, replacement, addition or deletion of a Part(s) and is characterized by the granting of certain Allowances to the Operator when such recommendations are complied with by the Operator.	
 
 	C.	COMMERCIAL AVIATION USE is the operation of Nacelles in Aircraft used for commercial, corporate or private transport purposes. The operation of Nacelles by Government Agencies or Services is normally excluded except that IAE will consider written requests for the inclusion of such Nacelles under the provisions of this Service Policy.	
 
 	D.	DIRECT DAMAGE is the damage suffered by a Part itself upon its Failure.	
 
 	E.	ECONOMICALLY REPAIRABLE shall generally mean that the cost of the repair as determined by IAE exclusive of modification and transportation costs, will be equal to or less than ***** percent of the IAE commercial price of the Part at the time the repair is considered, or, shall be as otherwise reasonably determined by IAE.	
 
 	F.	EXPENDABLE PARTS means those nonreusable Parts, as determined by IAE, which are required to be replaced during inspection or Reconditioning, regardless of the condition of the Part.	
 
 	G.	FAILURE (FAILED) is the breakage, injury, or malfunction of a Part rendering it unserviceable and incapable of continued operation without corrective action.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 87 of 111	

 	H.	FIRST RUN NACELLE is a Nacelle with ***** hours or less Nacelle Time.	
 
 	I.	FIRST RUN PART is a Nacelle Part with ***** hours or less Parts Time operating in a First Run Nacelle.	
 
 	J.	NACELLE(S) means V2500 nacelle(s) and thrust reverser, as described in IAE Specifications referenced below, as such Specifications may be revised from time to time, sold by IAE for Commercial Aviation Use, whether installed as new equipment in aircraft by the manufacturer thereof and delivered to the Operator or delivered directly to the Operator from IAE for use as a spare nacelle. A Nacelle which has been converted or upgraded in accordance with IAE instructions shall continue to qualify for Allowances and adjustments under the provisions of this Service Policy.	

Model No.	  	Specification No.	  	Specification Date	
V2500	  	IAE-0004	  	*****	
 
 	K.	NACELLE TIME is the total number of flight hours of operation of a Nacelle.	
 
 	L.	OPERATOR is the owner of one or more Nacelles operated for Commercial Aviation use, the lessee if such Nacelle(s) is the subject of a long-term financing lease or as otherwise reasonably determined by IAE.	
 
 	M.	PART(S) means Nacelle parts sold by IAE and delivered to the Operator as original equipment in a Nacelle or Nacelle parts sold and delivered by IAE to the Operator as new spare parts in support of a Nacelle.	
 
 	N.	PARTS LIFE LIMIT is the maximum allowable Parts Time, for specific Parts as established by IAE or by the Federal Aviation Administration in an Airworthiness Directive.	
 
 	O.	PARTS REPAIR means the IAE designated restoration of Failed Parts to functional serviceable status, excluding repair of normal wear and tear, as determined by IAE.	
 
 	P.	PARTS TIME is the total number of flight hours of operation of a Part.	
 
 	Q.	PRIMARY PART means a Part other than a First Run Part but not having more than ***** hours Parts Time.	
 
 	R.	RECONDITIONING means the restoration of a Nacelle allowing substitution of new or serviceable used Parts, to the extent necessary for continued operation of the Nacelle as a serviceable unit. When such Reconditioning is performed by IAE designated V2500 Maintenance Center, the Parts Time, of the replaced Part shall, for the purpose of this Service Policy, be applicable to the substituted new or serviceable used Part. Said replaced Part shall become the property of IAE.	
 
 	S.	REOPERATION is the alternation to or modification of a Part.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 88 of 111	

 	T.	RESULTANT DAMAGE is the damage suffered by a Part because of the Failure of another Part within the same Nacelle.	
 
 	U.	SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those Parts determined by IAE to be unserviceable and not Economically Repairable. The Operator shall cause such Parts to be mutilated or disposed of in such a manner as to preclude any possible further use as a Nacelle Part.	
 
IV	GENERAL CONDITIONS	
 
  	The following general conditions govern the application of this Service Policy:	
 
 	A.	Records and Audit	
 
 	  	The Operator shall maintain adequate records for the administration of this Service Policy and shall permit IAE to audit such records at reasonable intervals.	
 
 	B.	Scrapping of Parts	
 
 	1.	Scrappage Verification	
 
 	  	Any Part for which a Parts Credit Allowance is requested shall be verified as Scrapped prior to the issuance of the Allowance. Verification of Scrappage shall occur as Follows:	
 
 	a.	At the Operator’s, or its subcontractor’s, facility. Such verification shall be accomplished by the IAE Field Representative.	
 
 	b.	At a V2500 Maintenance Center designated by IAE, provided that IAE concurs that the Part is to be Scrapped. Sufficient information to identify the Nacelle from which the Part was removed, and the reason for its return shall be provided.	
 
 	2.	Return of Parts	
 
 	  	IAE, at its sole option, may require the Operator to return to IAE any Part for which a Parts Credit Allowance is requested. Such return shall be a condition for the issuance of a Parts Credit Allowance.	
 
 	3.	Transportation Expenses	
 
 	  	Transportation expenses shall be at the expense of the Operator if such Parts are shipped to and from a V2500 Maintenance Center designated by IAE for examination and verification; except, that IAE shall pay the expense of transport of such Parts as are shipped at the request of IAE.	
 
 	4.	Title	
 
 	  	Title to such Parts returned to IAE shall vest in IAE.	
 
Page 89 of 111

 	a.	Upon determination by IAE that the Operator is eligible for a Parts Credit Allowance. If it is determined that the Parts are scrapped Parts but are not eligible for Service Policy coverage, the Operator will be notified of the decision and the Parts returned at the Operator’s expense if the Operator so requests; otherwise, the Parts will be disposed of by IAE without any type of adjustment, or	
 
 	b.	Upon shipment, when such Parts are determined to be Scrap at the Operator’s facility and are shipped to IAE at the request of IAE.	
 
 	C.	Repairability Requirements	
 
 	  	The Operator shall set aside and exclude from the operation of this Service Policy for a period of ***** months any Part for which IAE states it has, or plans to initiate, an active program to achieve a repair, corrective Reoperation or Parts Life Limit extension. In the event IAE has not released a repair procedure, corrective Reoperation, or Parts Life Limit extension by the expiration of this ***** month period, such Part shall be retained by the Operator and excluded from the operation of this Service Policy for additional periods beyond the expiration of said ***** month period only if agreed to by the Operator.	
 
 	D.	Exclusions from Service Policy	
 
 	  	This Service Policy will not apply to any Nacelle, or Part if it has been determined to the reasonable satisfaction of IAE that said Nacelle or Part has Failed because it:	
 
 	1.	Has not been properly installed or maintained in accordance with IAE recommendations unless such improper installation or maintenance was performed by IAE or at any V2500 Maintenance Center designated by IAE.	
 
 	2.	Has been used contrary to the operating and maintenance instructions or recommendations authorized or issued by IAE and current at the time, or	
 
 	3.	Has been repaired or altered outside any V2500 Maintenance Center in such a way as to impair its safety, operation or efficiency, or	
 
 	4.	Has been subjected to:	
 
 	a.	Misuse, neglect, or accident, or	
 
 	b.	Ingestion of foreign material, or	
 
 	5.	Has been affected in any way by a part not defined as a Part herein, or	
 
 	6.	Has been affected in any way by occurrences not associated with ordinary use, such as, but not limited to, acts of war, rebellion, seizure or other belligerent acts.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 90 of 111	

 	E.	Payment Options	
 
 	  	IAE at its option may grant any Parts Credit Allowance as either a credit to the Operator’s account or as a Part replacement.	
 
 	F.	Presentation of Claims	
 
 	  	Any request for an Allowance must be presented to IAE not later than ***** days after the removal from service of the Engine or Part for which the Allowance is requested. If IAE disallows the request, written notification will be provided to the Operator. The Operator shall have 90 days from such notification to request a reconsideration of the request for Allowance. IAE shall have the right to refuse any request for an Allowance which is not submitted within the stated time periods.	
 
 	G.	Duration of Service Policy	
 
 	  	This Service Policy will normally cease to apply to all Parts in any Nacelle that is more than ten years old as measured from the date of shipment of the Nacelle from the factory. This Service Policy shall, however, continue to be applicable to individual Nacelles after the expiration of the ten year period on a year to year basis so that the Operator may continue to receive the benefits of the Service Policy on the Parts in these Nacelles.	
 
 	H.	General Administration	
 
 	  	On matters concerning this Service Policy, the Operator is requested to address all correspondence to:	
 
 	  	IAE International Aero Engines AG	
 	  	400 Main Street	
 	  	Mail Stop 121-10	
 	  	East Hartford, CT 06108	
 
 	  	Attention: Warranty Administration	
 
 	I.	Limitation of Liability	
 
 	1.	The express provisions of this Service Policy set forth the maximum liability of IAE with respect to any claims relating to this Service Policy.	
 
 	2.	Except to the extent that the Allowances and adjustments expressly set forth in this Service Policy may exceed the limitations of the corresponding portions of any warranties or representations included in any sales agreements, the provisions of this Service Policy do not modify, enlarge or extend in any manner the conditions governing the sale of its Nacelles and Parts by IAE.	
 
 	3.	IAE reserves the right to change or retract this Service Policy at any time at its sole discretion. No such retraction or change shall diminish the benefits which the Operator may be entitled to receive with respect to	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 91 of 111	

 	  	Nacelles for which a acceptable order has been placed with IAE or with respect to aircraft with installed Nacelles for which firm orders have been placed or options obtained with the aircraft manufacturer prior to the announcement of any such retraction or change.	
 
 	J.	Assignment of Service Policy	
 
 	  	This Service Policy shall not be assigned, either in whole or in part, by either party. IAE will, however, upon the written request of the Operator consider an extension of Service Policy Allowances and adjustments to Nacelles and Parts sold or leased by an Operator to another Operator, to the extent only, however, that such Allowances and adjustments exist at the time of such sale or lease and subject to the terms and conditions of the Service Policy. IAE shall not unreasonably withhold such extension of such Allowances.	
 
Page 92 of 111

Exhibit D-3
Warranty for Special Tools and Ground Equipment
 
1.	If it is shown that a defect in material or workmanship has become apparent in any item of special tooling and ground equipment within one year from the date of receipt of such item by the Operator, then IAE will either as it may in its sole discretion determine repair or exchange such item free of charge.	
 
2.	The obligations of IAE under this Warranty are subject to the following terms and conditions.	
 
 	2.1	The defect must not be due to misuse, negligence of anyone other than IAE, accident or misapplication.	
 
 	2.2	Such item shall not have been used, maintained, modified, stored or handled other than in a manner approved by IAE.	
 
 	2.3	Any claim under this Warranty shall be made in writing to IAE within ***** days of the discovery of the defect and the defective item shall be made available or sent to IAE for inspection as it may require.	
 
3.	IAE shall not be liable for any incidental, consequential or resultant loss or damage howsoever occurring, nor for labor costs involved in removal or replacement of parts.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 93 of 111	

Exhibit D-4
Guarantee Terms
 
I.	SPECIFIC CONDITIONS	
 
  	The guarantees set out in Exhibit D-5 through Exhibit D-10 (the “ Guarantee(s) ”) are based on the following specific conditions with respect to the Aircraft and the Spare Engine(s) (the “ Specific Conditions ”):	
 
 	A.	an average flight cycle of no less than ***** hours;	
 
 	B.	thrust levels which are derated an average of ***** for take-off relative to full take-off ratings for a V2527M-A5 engine;	
 
 	C.	an average Aircraft utilization equal to or less than ***** flight hours per year per Aircraft;	
 
 	D.	Vuela maintaining a delivery schedule in respect to the Firm Aircraft and the Firm Spare Engines in accordance with the schedules set forth in Exhibit B hereto;	
 
 	E.	an average ambient temperature at takeoff consistent with Vuela’s current operation temperatures which is no greater than *****	
 
 	F.	Vuela operating and maintaining a minimum number of spare Engine(s) in support of its operation of the Aircraft, such that there is a minimum of one (1) spare engine or a direct ratio of spare Engines to Engines installed on Aircraft equal to or greater than ***** whichever is greater.	
 
II.	ELIGIBLE ENGINES	
 
  	The Engines that shall be eligible under the Guarantees shall be:	
 
 	i)	new Engines originally installed on each Firm Aircraft, Option Aircraft, or Rolling Option Aircraft which are acquired pursuant to this Contract;	
 
 	ii)	the Spare Engines and Option Spare Engines which are acquired pursuant to this Contract; and	
 
 	iii)	the Engines acquired in March 2006 from Atlantic Aircraft Holding Limited (Engine serial numbers V12144, V12146, V12170 and V12172)	
 
  	in each case, which are operated by Vuela during the Period of Guarantee (the “ Eligible Engines ”)?	
 
  	Engines shall remain Eligible Engines provided that Vuela or its authorized maintenance facility maintains them in accordance with the instructions and recommendations of IAE and the Aircraft Manufacturer contained in the applicable IAE and Aircraft Manufacturer publications including the latest electronic Maintenance Management Plan (“ eMMP ”) for Vuela.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 94 of 111	

  	The eMMP shall establish maintenance requirements including LLP management, incorporation of applicable Target Service Bulletins and Aviation Authority airworthiness directive requirements, and Eligible Engine removal planning. The customized eMMP shall be no less rigorous than the instructions for continued airworthiness of the Aircraft issued by the Airbus and production approval holders of components of the Aircraft and shall comply with all requirements of the applicable Aviation Authority, so long as such Aviation Authority imposes aircraft maintenance standards which are not materially different from those standards imposed by the FAA. The scope of the eMMP shall not be limited to the coverage of the requirements of this Contract.	
 
Page 95 of 111

III.	DUPLICATION OF BENEFITS	
 
  	The intent of the Guarantees is to provide specified benefits to Vuela as a result of the failure of Eligible Engines to achieve the reliability or performance level stipulated in the Guarantees. It is not the intent, however, to duplicate benefits provided to Vuela under any other applicable guarantee, sales warranty, service policy, or any special benefit of any kind as a result of the same failure.	
 
  	Therefore, except as provided in Clause 4.6 of the Contract, the terms and conditions of each Guarantee notwithstanding, if the terms of any Guarantee should make duplicate benefits available to Vuela from IAE or any third-party as a result of the failure of an Eligible Engine to achieve the reliability or performance level stipulated in the Guarantees, Vuela may elect to receive the benefits accruing as a result of such failure under any single Guarantee, but may not receive benefits under any other Guarantee, sales warranty, service policy or any special benefit provided by IAE other than those set forth in Clause 4.6 of the Contract.	
 
Page 96 of 111

Exhibit D-5
V2500 Reliability Guarantee
 
I	INTRODUCTION	
 
  	IAE assures Vuela that by the end of the ***** year period commencing with Vuela’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine Shop Visit Rate will not exceed a Guaranteed Rate of ***** per ***** Eligible Engine flight hours for the A320 fleet of Aircraft. Under this Guarantee, if the cumulative Engine Shop Visit Rates exceed the Guaranteed Rates, IAE will credit Vuela’s account with IAE an amount of ***** for each Eligible Engine Shop Visit determined to have been in excess of the Guaranteed Rates.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee will start on the date Vuela initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate ***** years from that date.	
 
 	B.	Eligible Shop Visits	
 
 	  	Eligible Shop Visits shall comprise the shop visits of Eligible Engines required for the following reasons:	
 
 	1.	a Failure of a Part in such Eligible Engines;	
 
 	2.	foreign object damage caused by the non-negligent ingestion of birds, hailstones or runway gravel;	
 
 	3.	an Airworthiness Directive issued by the applicable Certification Authority;	
 
 	4.	maintenance as recommended by IAE; and	
 
 	5.	removal for LLP time expiration so long as minimum build cycle requirement pursuant to the Maintenance Management Plan is adhered to.	
 
 	C.	Reporting of Engine Shop Visits and Engine Flight Hours	
 
 	  	Eligible Shop Visits shall be reported to IAE by Vuela within thirty (30) days after the date of such Engine Shop Visit using IAE Form SVR Rev 1, July 95 together with such other information as may be needed to determine the Eligibility of the Engine Shop Visit. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Engine Shop Visit, supporting information will be furnished.	
 
 	  	Flight hours accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by Vuela within ***** days after each month’s end to IAE on IAE Form SVR Rev 1, July 95 unless other procedures are established for the reporting of flight hours.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 97 of 111	

 	D.	Credit Allowance Calculation	
 
 	  	A credit of ***** will be granted by IAE for each Eligible Engine Shop Visit determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than ***** days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Engine Shop Visit records and Eligible Engine flight hour information have been reported to IAE.	
 
 	  	Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against Vuela’s account with IAE. Credits and debits will be applied to Vuela’s account with IAE not later than thirty (30) days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.	
 
 	  	Credit Allowance = (AR - GR) x *****	
 
 	  	Where:	

AR	  	=	  	Total Eligible Engine Shop Visits during the period of the calculation.	
			
GR	  	=	  	***** x total Engine flight hours accumulated on Eligible Engines during the period of the calculation.	
			
	  		  	(NOTE: GR will be rounded to the nearest whole number.)	
 
III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	
 
 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 98 of 111	

 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	
 
Page 99 of 111

Exhibit D-6
V2500 Delay and Cancellation
 
I	INTRODUCTION	
 
  	IAE assures Vuela that by the end of the ***** year period commencing with Vuela’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine-caused Delay and Cancellation Rate will not exceed a Guaranteed Rate of ***** per ***** Aircraft departures. Under this Guarantee, if the cumulative Engine-caused Delay and Cancellation Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE will credit Vuela’s account with IAE an amount of ***** for each excess Eligible Delay and Cancellation determined to have been in excess of the Guaranteed Rate.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee will start on the date Vuela initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate ***** years from that date.	
 
 	B.	Eligible Delay	
 
 	  	An Eligible Delay shall occur when by a Failure of a Part in an Eligible Engine installed in an Aircraft is the sole cause of a delay in the final Departure of that Aircraft by more than fifteen minutes after its programmed Departure in either of the following instances:	
 
 	1.	an originating flight departing later than its scheduled Departure time; or	
 
 	2.	a through flight or a turnaround flight remaining on the ground longer than its scheduled ground time.	
 
 	C.	Eligible Cancellation	
 
 	  	A single Cancellation shall occur when a Failure of a Part in an Eligible Engine installed in an Aircraft is the sole cause of the elimination of a Departure in either of the following instances:	
 
 	1.	cancellation of a trip comprising a single flight leg; or	
 
 	2.	cancellation of any or all of the flight legs of a multiple leg trip.	
 
 	  	A Departure which is cancelled after an Eligible Delay shall be an Eligible Cancellation not an Eligible Delay.	
 
 	  	Consecutive Delays and Cancellations for the same problem because corrective action had not been taken will be excluded.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 100 of 111	

 	D.	Departure	
 
 	  	A Departure comprises the movement of an Aircraft from the blocks for the purpose of an intended scheduled revenue flight provided that there can be only one Departure for each intended flight.	
 
 	E.	Reporting of Eligible Delays and Cancellations	
 
 	  	Eligible Delays and Cancellations shall be reported to IAE by Vuela within***** days after the date of such Delay or Cancellation using IAE Form DC Rev 1, July 95, together with such other information as may be needed to determine the Eligibility of the Delay or Cancellation. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Delay or Cancellation, supporting information will be furnished.	
 
 	  	Departures accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by Vuela within ***** days after each month’s end to IAE on IAE Form DC Rev 1, July 95, unless other procedures are established for the reporting of Departures.	
 
 	F.	Credit Allowance Calculation	
 
 	  	A credit of ***** will be granted by IAE for each Eligible Delay and Eligible Cancellation determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than ***** days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary records of Delays, Cancellation and Departure have been reported to IAE.	
 
 	  	Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the first year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against Vuela’s account with IAE. Credits and debits will be applied to Vuela’s account with IAE not later than ***** days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.	
 
 	  	Credit Allowance = (ADC - GDC) *****	
 
 	  	Where:	

	  	ADC	  	=	  	Total qualifying actual Engine Caused Delays and Cancellations claimed and accepted as eligible during the applicable period of the calculation.	
				
	  	GDC	  	=	  	***** x total Departures accumulated on Eligible Engines during the applicable period of calculation.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 101 of 111	

III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	
 
 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate , will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	
 
 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	
 
Page 102 of 111

Exhibit C-7
V2500 Inflight Shutdown Guarantee
 
I	INTRODUCTION	
 
  	IAE assures Vuela that by the end of the ***** year period commencing with Vuela’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine Inflight Shutdown Rate will not exceed a Guaranteed Rate of ***** per ***** Eligible Engine flight hours. Under this Guarantee, if the cumulative Eligible Inflight Shutdown Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE will credit Vuela’s account with IAE an amount of ***** for each Eligible Inflight Shutdown determined to have been in excess of the Guaranteed Rate.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee will start on the date Vuela initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate ***** years from that date.	
 
 	B.	Eligible Inflight Shutdowns	
 
 	  	Eligible Inflight Shutdowns shall comprise the inflight shutdown of an Eligible Engine during a scheduled revenue flight which is determined to have been caused by a Failure of a Part of such Engine. Multiple inflight shutdowns of the same Engine during the same flight leg for the same problem will be counted as one Eligible Inflight Shutdown. A subsequent inflight shutdown on a subsequent flight leg for the same problem because corrective action has not been taken will be excluded.	
 
 	C.	Reporting of Eligible Inflight Shutdowns	
 
 	  	Eligible Inflight Shutdowns shall be reported to IAE by Vuela within ***** days after the date of such Inflight Shutdown using IAE Form IFSD Rev 1, July 95 together with such other information as may be needed to determine the Eligibility of the Inflight Shutdown. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Inflight Shutdown, supporting information will be furnished.	
 
 	  	Flight hours accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by Vuela within ***** days after each month’s end to IAE on IAE Form IFSD Rev 1, July 95 unless other procedures are established for the reporting of flight hours.	
 
 	D.	Credit Allowance Calculation	
 
 	  	A credit of ***** will be granted by IAE for each Eligible Inflight Shutdown determined as calculated below to be in excess of the Guaranteed	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 103 of 111	

 	  	Rate during the Period of Guarantee. An annual calculation will be made no later than sixty (60) days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Inflight Shutdown records and Eligible Engine flight hour information have been reported to IAE.	
 
 	  	Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against Vuela’s account with IAE. Credits and debits will be applied to Vuela’s account with IAE not later than ***** days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.	
 
 	  	The Credit Allowance = (AI - GI) x *****	
 
 	  	Where:	

	 		 	AI	  	=	  	Total Eligible Inflight Shutdowns during the period of the calculation;	
					
	 		 	GI	  	=	  	***** x total Engine flight hours accumulated on Eligible Engines during the period of the calculation.	
					
	 		 		  		  	(NOTE: GI will be rounded to the nearest whole number.)	
 
III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	
 
 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate, will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	
 
 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 104 of 111	

Exhibit D-8
V2500 Fuel Consumption Retention Guarantee
 
I	INTRODUCTION	
 
  	IAE assures Vuela that during the ***** year period commencing with Vuela’s first commercial operation of Aircraft powered by V2500-A5 Engines, the fleet average cruise fuel consumption for Eligible Engines will not have increased by more than a Guaranteed Rate of *****. Under this Guarantee, if the fleet average cruise fuel consumption for Eligible Engines exceeds the Guaranteed Rate at the end of the Guarantee Period, IAE will credit Vuela’s account with IAE an amount in respect of excess fuel consumed for that portion of the Period of the Guarantee that the Guarantee level has been exceeded.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee will start on the date Vuela initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate ***** years from that date.	
 
 	B.	Fuel Consumption Measurement	
 
 	  	The inflight data required for administration of this Guarantee will be obtained by Vuela during stable cruise conditions using ECM data recordings and the ECM II software available from IAE (requires the ECM sales order option from Airbus).	
 
 	  	Provided that:	
 
 	1.	the fuel consumption data for any Eligible Engine on which the engine parameters indicate a possible malfunction (including associated Aircraft systems), other than normal gas path deterioration, that is subsequently confirmed by maintenance action will not be considered acceptable data, and	
 
 	2.	data which is obviously inaccurate under normal engine monitoring practices will not be considered acceptable data; this type of data will be rejected unless Vuela validity checks have established that Total Air Temperature, Fuel Flow Aircraft and Engine Bleed Systems and other Aircraft parameters are within normal operating ranges.	
 
 	C.	Periodic Fleet Average Cruise Fuel Consumption Deterioration	
 
 	  	The Periodic Fleet Average Cruise Fuel Consumption Deterioration shall be the average of the Cruise Fuel Flow Deterioration for all installed Eligible Engines for a ***** day reporting period. This is to be reported to IAE every ***** days.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 105 of 111	

 	D.	Fleet Average Cruise Fuel Consumption Deterioration	
 
 	  	The Fleet Average Cruise Fuel Consumption Deterioration is the average of the Periodic Fleet Average Cruise Fuel Consumption Deterioration values for all ***** day periods during the Period of Calculation (cumulative from start of Period of Guarantee to end of the *****, *****, *****, and *****years).	
 
 	E.	Operational Data	
 
 	  	Vuela shall provide the following data to IAE as indicated during the Period of the Guarantee:	
 
 	1.	Total quantity of fuel consumed by Eligible Engines during the Period (U.S. Gallons), every ***** days.	
 
 	2.	Average cost of fuel to Vuela over the Period of Guarantee (U.S. Dollars per U.S. Gallon), every ***** days.	
 
 	3.	Aircraft operating hours for each ***** day period during the Period of Guarantee.	
 
 	4.	Engine maintenance action information, as requested.	
 
 	F.	Excess Fuel Consumption Credit Calculation	
 
 	  	If at the end of each Period of Calculation the Fleet Average Fuel Consumption Deterioration exceeds the Guaranteed Rate, IAE will grant Vuela a credit in respect to excess fuel consumption calculated in accordance with the following formula:	
 
 	  	C = (D-GR)% YHF	
 
 	  	Where:	

				
	 	C	  	=	  	the amount of the credit in U.S. dollars	
				
	 	D	  	=	  	the Fleet Average Fuel Consumption Deterioration (in percent)	
				
	 	GR	  	=	  	the Guaranteed Rate	
				
	 	Y	  	=	  	initial cruise fuel flow of new Eligible Engines expressed in U.S. gallons per hour to be established within ***** days of start of operation (per ECM II program)	
				
	 	H	  	=	  	the total of all flight hours flown by Vuela’s Eligible Engines during that portion of the Period of Guarantee that the Guarantee level has been exceeded.	
				
	 	F	  	=	  	The average net cost to Vuela in U.S. Dollars per U.S. Gallon of aviation fuel consumed by Vuela during the Period of Guarantee.	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 106 of 111 

III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	
 
 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate , will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	
 
 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	
 
Page 107 of 111

Exhibit D-9
V2500 Exhaust Gas Temperature Guarantee
 
I	INTRODUCTION	
 
  	IAE assures Vuela that during the Period of Guarantee, the maximum stabilized takeoff exhaust gas temperature will not exceed the Certified Limit. Under this Guarantee if it is confirmed that the Certified Limit has been exceeded, IAE will credit Vuela’s account with IAE in the amount of *****. For the purpose of this Guarantee, the Certified Limit is exceeded if the Engine will not achieve the specified engine pressure ratio for takeoff thrust without exceeding the Certified Limit for its Exhaust Gas Temperature.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee for each Eligible Engine will start on the date Vuela initiates commercial operation of the first Aircraft powered by such Engine and will terminate upon the completion of the first shop visit of each such Eligible Engine hereunder.	
 
 	B.	Restoration of Installed Engine	
 
 	  	If during the Period of Guarantee, the maximum stabilized takeoff exhaust gas temperature of an Eligible Engine installed in an Aircraft operated by Vuela exceeds the Certified Limit, Vuela shall undertake on-wing Engine maintenance recommended by IAE, with technical assistance provided by IAE, to restore the performance of that Engine.	
 
 	C.	Calibration of Removed Engine	
 
 	  	If the performance of an installed Eligible Engine cannot be restored by the maintenance recommended under Section II, Paragraph C, Vuela shall promptly remove such Engine from the Aircraft and dispatch it at its cost for calibration in an IAE designated test cell. If such calibration verifies that the exhaust gas temperature of the Engine is not in excess of the Certified Limit or it is established that any excess is due to causes which are excluded by the General Conditions in Section III, then the cost of such test cell calibration and associated transportation will be borne by Vuela.	
 
 	D.	Credit Allowance	
 
 	  	A credit of ***** will be granted by IAE for each event not meeting the requirements set forth in Section I of this guarantee and as verified by Section II, Paragraph D above.	
 
III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 108 of 111	

 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate , will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	
 
 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	
 
Page 109 of 111

Exhibit D-10
V2500 Remote Site Removal Guarantee
 
I	INTRODUCTION	
 
  	IAE assures Vuela that by the end of the Period of Guarantee, the cumulative Remote Site Removal Rate shall not exceed a Guaranteed Rate of ***** per *****Eligible Engine flight hours for the Aircraft. Under this Guarantee, if the cumulative Eligible Remote Site Removal Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE shall credit Vuela’s account with IAE an amount of ***** for each Eligible Remote Site Removal determined to have been in excess of the Guaranteed Rate.	
 
II	GUARANTEE	
 
 	A.	Period of Guarantee	
 
 	  	The Period of Guarantee shall start on the date Vuela initiated commercial operation of its first Aircraft powered by Eligible Engines and shall terminate ***** year from that date (“Period of Guarantee’).	
 
 	B.	Eligible Remote Site Removals	
 
 	  	Eligible Remote Site Removals shall be the removals of Eligible Engines from Aircraft at an Vuela line station, other than Vuela’s main base or a base established by Vuela to perform routine Eligible Engine changes, which removal is determined to have been caused by a Failure of a Part of such Eligible Engine.	
 
 	C.	Reporting of Remote Site Removals	
 
 	  	Eligible Remote Site Removals shall be reported to IAE by Vuela in January of each year for the preceding year in an electronic form provided by IAE, together with such other information as may be needed to determine the eligibility of each Remote Site Removal. Each such form shall be verified by an authorized IAE representative before submission. Should it be necessary for such representative to disqualify a reported Remote Site Removal, supporting information shall be furnished.	
 
 	  	Flight hours accumulated by Eligible Engines shall be reported to IAE by Vuela in January of each year for the preceding year in an electronic form provided by IAE. This Guarantee shall only be administered where such information is provided to IAE by Vuela in a timely manner.	
 
 	D.	Credit Allowance Calculation	
 
 	  	A credit of ***** shall be granted by IAE for each Eligible Remote Site Removal determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation shall be made no later than ***** days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Remote Site Removal records and Eligible Engine flight hour information have been reported to IAE.	

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 110 of 111	

 	  	Each annual calculation shall be made using data that shall be cumulative from the start of the Period of Guarantee. An interim credit shall be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. Credits shall be applied to Vuela’s account with IAE not later than ***** days following a calculation for the second year and each subsequent year of the Guarantee Period, as applicable.	
 
 	  	Credit Allowance = (AR – GR) x *****	
 
 	  	Where:	

AR	  	=	  	Total Eligible Remote Site Removals during the period of the calculation.	
			
GR	  	=	  	***** x total Engine flight hours accumulated on Eligible Engines during the period of the calculation.	
			
	  		  	(Note: GR shall be rounded to the nearest whole number)	
 
III	DEFINITIONS AND CONDITIONS	
 
 	A.	All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Guarantee, this Guarantee shall govern.	
 
 	B.	The Guaranteed Rate is predicated on the operation by Vuela of the Eligible Engines in accordance with the Specific Conditions. IAE reserves the right to make appropriate adjustments to the Guaranteed Rate if there is, during the Period of Guarantee, a variation from the Specific Conditions which results in a material change to IAE’s risk. Such adjustments shall be made by IAE in good faith using the same methodology used to calculate the original guarantee rate , will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original guaranteed rate.	
 
 	C.	In the event credits are issued under this Guarantee, such credits shall be dedicated to the procurement of Parts aimed at correction of the situations contributing to exceedance of the Guarantee. Accordingly, Vuela and IAE shall establish jointly the modifications or Parts to be selected, and Vuela shall incorporate the modifications or Parts selected into the Eligible Engines.	
T x H x R
   *****
X
H
-
R2
*****

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  		  	Page 111 of 111	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.10
A320 FAMILY
PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as Seller
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
as Buyer
 
Forward – Page 1/4

CONTENTS

CLAUSES	 	TITLES	
0	 	DEFINITIONS AND INTERPRETATION	
		
1	 	SALE AND PURCHASE	
		
2	 	SPECIFICATION	
		
3	 	PRICES	
		
4	 	PRICE REVISION	
		
5	 	PAYMENTS	
		
6	 	MANUFACTURE PROCEDURE—INSPECTION	
		
7	 	CERTIFICATION	
		
8	 	BUYER’S TECHNICAL ACCEPTANCE	
		
9	 	DELIVERY	
		
10	 	EXCUSABLE DELAY	
		
11	 	NON-EXCUSABLE DELAY	
		
12	 	WARRANTIES AND SERVICE LIFE POLICY	
		
13	 	PATENT AND COPYRIGHT INDEMNITY	
		
14	 	TECHNICAL DATA AND SOFTWARE SERVICES	
		
15	 	SELLER’S REPRESENTATIVES	
		
16	 	TRAINING AND TRAINING AIDS	
		
17	 	EQUIPMENT SUPPLIER PRODUCT SUPPORT	
		
18	 	BUYER FURNISHED EQUIPMENT	
		
19	 	INDEMNIFICATION AND INSURANCE	
		
20	 	TERMINATION	
		
21	 	ASSIGNMENTS AND TRANSFERS	
		
22	 	MISCELLANEOUS PROVISIONS	
 
Forward – Page 2/4

CONTENTS

EXHIBITS	  	TITLES	
Exhibit  A	  	SPECIFICATION	
		
Exhibit  B	  	FORM OF SPECIFICATION CHANGE NOTICE	
		
Exhibit  C	  	PART 1 AIRFRAME PRICE REVISION FORMULA	
		
	  	PART 2 AE ENGINE PRICE REVISION FORMULA	
		
	  	PART 3 CFMI ENGINE PRICE REVISION FORMULA	
		
Exhibit  D	  	FORM OF CERTIFICATE OF ACCEPTANCE	
		
Exhibit  E	  	FORM OF BILL OF SALE	
		
Exhibit  F	  	SERVICE LIFE POLICY—ITEMS OF PRIMARY STRUCTURE	
		
Exhibit  G	  	TECHNICAL DATA INDEX	
		
Exhibit  H	  	MATERIAL SUPPLY AND SERVICES	
 
Forward – Page 3/4

A320 Family PURCHASE AGREEMENT
This A320 Family Purchase Agreement (the “ Agreement ”) is made 28 th October 2005
BETWEEN:
AIRBUS S.A.S. , a société par actions simplifiée , legal successor of Airbus S.N.C., formerly known as Airbus G.I.E. created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S. A. de C.V. a company organised under the laws of Mexico having its principal place of business at Blvd. Manuel Avila Camacho 36 Piso 22, Lomas de Chapultepec, 11000 Mexico, D.F. MEXICO (the “ Buyer ”).
WHEREAS subject to the terms and conditions of this Agreement, the Seller desires to sell the Aircraft to the Buyer and the Buyer desires to purchase the Aircraft from the Seller.
 
Forward – Page 4/4

NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
0	DEFINITIONS AND INTERPRETATION	
In addition to words and terms elsewhere defined in this Agreement, the initially capitalised words and terms used in this Agreement shall have the meaning set out below.

Affiliate	  	means with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity. For the purpose of this definition, “control” (including “controlled by” and “under control with”) means the power, directly or indirectly, to direct the management of such person, or the ownership of more than 50% of the voting securities of such person.	
		
Aircraft	  	means either an (a) Airbus A319-100 or (b) A320-200 or (c) A321-200 aircraft including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery under the terms and conditions of this Agreement.	
		
Aircraft Training Services	  	means all training courses, flight training, line training, flight assistance, line assistance, maintenance support, maintenance training (including Practical Training) or training support performed on aircraft and provided to the Buyer pursuant to this Agreement.	
		
Airframe	  	means the Aircraft excluding the Propulsion Systems.	
		
Airframe Basic Price	  	has the meanings set out in Clauses 3.1.1, 3.2.1 and 3.3.1.	
		
Airframe Price Revision Formula	  	is set out in Part 1 of Exhibit C.	
		
Aviation Authority	  	means when used in respect of any jurisdiction the government entity, which under the laws of such jurisdiction has control over civil aviation or the registration, airworthiness or operation of aircraft in such jurisdiction.	
		
Balance of Final Price	  	has the meaning set out in Clause 5.4.1.	
		
Basic Price	  	means, with respect to an Aircraft, the sum of the Airframe Basic Price and the Propulsion Systems Basic Price for such Aircraft.	
		
Bill of Sale	  	has the meaning set out in Clause 9.2.2.	
 
Clause 0 – Page 1/5

			
Buyer Furnished Equipment	    	has the meaning set out in Clause 18.1.1.	
		
Certificate of Acceptance	    	has the meaning set out in Clause 8.3.	
		
Default Rate	    	means the rate of default interest set forth in Clause 5.7.	
		
Delivery	    	means the tender of possession and transfer of title to the Aircraft from the Seller to the Buyer in accordance with Clause 9.	
		
Delivery Date	    	means the date on which Delivery occurs.	
		
Delivery Location	    	means the facilities of the Seller at the location of final assembly of the Aircraft.	
		
Engine Basic Prices	    	means the prices of a set of Engines as set out in Clauses 3.1.2, 3.2.2 and 3.3.2.	
		
Engine Manufacturer	    	means the manufacturer of the Engines as set out in Clause 2.2.	
		
Engine Reference Prices	    	means the reference prices of a set of Engines as set out in Prices 2 and 3 of Exhibit C.	
		
Engine Price Revision Formulae	    	is set out in Parts 2 and 3 of Exhibit C.	
		
Excusable Delay	    	has the meaning set out in Clause 10.1.	
		
Export Airworthiness Certificate	    	means an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location.	
		
Final Price	    	has the meaning set out in Clause 3.4.	
		
Ground Training Services	    	means all training courses performed in classrooms (classical or Airbus CBT courses), full flight simulator sessions, fixed base simulator sessions, field trips and any other services provided to the Buyer on the ground pursuant to this Agreement and which are not Aircraft Training Services.	
		
Manufacture Facilities	    	means the various manufacture facilities of the Seller, its Affiliates or any sub-contractor, where the Airframe or its parts are manufactured or assembled.	
		
Material	    	has the meaning set out in Clause 1.1 of Exhibit H.	
 
Clause 0 – Page 2/5

			
Non-Excusable Delay	    	has the meaning set out in Clause 11.1.	
		
Predelivery Payment	    	means the payment(s) made or determined in accordance with Clause 5.3.	
		
Propulsion Systems	    	has the meaning set out in Clause 2.2.	
		
Propulsion Systems Manufacturer	    	means the manufacturer of the Propulsion Systems as set out in Clause 2.2.	
		
Ready for Delivery	    	means, with respect to an Aircraft, the time when (i) the Technical Acceptance Process has been successfully completed for such Aircraft and (ii) the Export Airworthiness Certificate has been issued for such Aircraft.	
		
Scheduled Delivery Month	    	has the meaning set out in Clause 9.1.	
		
Seller’s Representatives	    	means the representatives of the Seller referred to in Clause 15.2.	
		
Seller Representatives Services	    	means the services provided by the Seller to the Buyer and from the Buyer to the Seller pursuant to Clause 15.	
		
Seller Service Life Policy	    	has the meaning set out in Clause 12.2.	
		
Spare Parts	    	means the items of equipment and material which may be provided pursuant to Exhibit H.	
		
Specification Change Notice or SCN	    	means an agreement in writing between the parties to amend the Specification pursuant to Clause 2.	
		
Specification	    	means with respect to each Aircraft type either (a) the Standard Specification if no SCNs are applicable or (b) if SCNs are issued, the Standard Specification as amended by all applicable SCNs.	
 
Clause 0 – Page 3/5

			
Standard Specification	  	means either :
 
(a)    the A319-100 standard specification document number *****, with the design weights
 
MTOW     *****
 
MLW        *****
 
MZFW      *****
 
(b)    the A320-200 standard specification document number *****, with the design weights
 
MTOW      *****
 
MLW         *****
 
MZFW       *****
 
(c)    the A321-200 standard specification document number *****, with the design weights
 
MTOW      *****
 
MLW         *****
 
MZFW       *****
copies of which have been annexed hereto as Exhibit A.	
		
Supplier	  	has the meaning set out in Clause 12.3.1.1.	
		
Supplier Part	  	has the meaning set out in Clause 12.3.1.2.	
		
Supplier Product Support Agreement	  	has the meaning set out in Clause 12.3.1.3.	
		
Technical Data	  	has the meaning set out in Clause 14.1.	
		
Total Loss	  	has the meaning set out in Clause 10.4.	
		
Type Certificate	  	has the meaning set out in Clause 7.1.	
		
Warranted Part	  	has the meaning set out in Clause 12.1.1.	
 
0.1	Clause headings and the Index are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.	
 
0.2	In this Agreement unless the context otherwise requires:	
 
 	(a)	references to Clauses, Appendices and Exhibits are to be construed as references to the Clauses of, and Appendices and Exhibits to this Agreement and references to this Agreement include its Schedules, Exhibits and Appendices;	
 
 	(b)	words importing the plural shall include the singular and vice versa; and	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 0 – Page 4/5

 	(c)	references to a person shall be construed as including, without limitation, references to an individual, firm, company, corporation, unincorporated body of persons and any state or agency of a state.	
 
Clause 0 – Page 5/5

1	SALE AND PURCHASE	
The Seller shall manufacture, sell and deliver and the Buyer shall buy and take delivery of sixteen (16) Aircraft on the Delivery Date at the Delivery Location upon the terms and conditions contained in this Agreement.
 
Clause 1 – Page 1/1

2	SPECIFICATION	
 
2.1	Airframe Specification	
 
2.1.1	Specification	
The Airframe shall be manufactured in accordance with the Standard Specification, as modified or varied prior to the date of this Agreement by the Specification Change Notices listed in Appendix 1 to Exhibit A.
 
2.1.2 	Specification Change Notice (SCN)	
The Specification may be amended by written agreement between the parties in a Specification Change Notice. Each Specification Change Notice shall be substantially in the form set out in Exhibit B and shall set out in detail the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, time of Delivery of the affected Aircraft, and on the text of the Specification. An SCN may result in an adjustment of the Basic Price which adjustment, if any, will be specified in the SCN.
In order to avoid delay in the agreement caused by major changes, the effect thereof on the price of the Aircraft may occasionally be expressed in the SCN form as a maximum increase or minimum decrease in the price, the actual effect being later agreed. All pricing with respect to new SCNs and amendments to SCNs shall be on a nondiscriminatory basis as among Buyer and other buyers of such similar aircraft.
 
2.1.3	Development Changes	
The Specification may also be revised by the Seller without the Buyer’s consent in order to incorporate development changes, provided that such changes do not adversely affect the price, time of Delivery, weight or performance of the Aircraft, interchangeability or replaceability requirements under the Specification. In any other case the Seller shall issue to the Buyer a Manufacturer Specification Change Notice which will be subject to Buyer’s acceptance. Development changes are changes deemed necessary by the Seller to improve the Aircraft, prevent delay or ensure compliance with this Agreement.
 
2.1.4 	Specification Change Notices for Certification	
The provisions relating to Specification Change Notices for certification are set out in Clauses 7.2 and 7.3.
 
2.1.5 	Buyer Import Requirements	
The provisions relating to Specification Change Notices for Buyer import requirements are set out in Clause 7.4.
 
Clause 2 – Page 1/2

2.1.6	Inconsistency	
In the event of any inconsistency between the Specification and any other part of this Agreement, this Agreement shall prevail to the extent of such inconsistency.
 
2.2	Propulsion Systems	
The Airframe can be equipped either with a set of INTERNATIONAL AERO Engines or CFM INTERNATIONAL Engines (the “ Engines ”), including nacelles and thrust reversers (together the “ Propulsion Systems ”).
 
2.2.1	Propulsion Systems selection lead time	
The Buyer shall select one of the above Propulsion System Manufacturers for all or any of the Aircraft and notify in writing the Seller *****
 
2.2.2	Engines Types	
The Aircraft can be equipped with a set of two (2) of the following Engines:
- For the A319-100 :
CFM INTERNATIONAL 56-5B5/P
or
INTERNATIONAL AERO ENGINE V2522-A5
- For the A320-200 :
CFM INTERNATIONAL 56-5B6/P
or
INTERNATIONAL AERO ENGINE V2527-A5
- For the A321-200 :
CFM INTERNATIONAL 56-5B3/P
or
INTERNATIONAL AERO ENGINE V2533-A5
 
2.3	Customisation Milestones Chart	
Within a reasonable period of time following signature of the Agreement, the Seller shall provide the Buyer with a Customisation Milestones Chart setting out the minimum lead times prior to the Scheduled Delivery Month of the Aircraft when a mutual agreement shall be reached (execution of an SCN) in order to integrate into the Specification any items requested by the Buyer from the Specification Changes Catalogues made available by the Seller.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 2 – Page 2/2

3	PRICES	
 
3.1	A319-100 Basic Price	
 
3.1.1	The A319-100 Airframe Basic Price is the sum of:	
 
 	(i)	the basic price of the Airframe as defined in the A319-100 Standard Specification (excluding Buyer Furnished Equipment), including nacelles and thrust reversers, which is:	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
 	(ii)	the sum of the basic prices of all SCNs set forth in Appendix 1.1 to Exhibit “A”, which is:	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
The A319-100 Airframe Basic Price corresponds to a theoretical delivery in ***** (the “ Base Period ”).
 
3.1.2	A319-100 Engines Basic Prices	
The basic price of a set of INTERNATIONAL AERO ENGINES V2522-A5, excluding nacelles and thrust reversers is
 
 	    	USD *****	
 
 	    	(US Dollars *****	
The basic price of a set of CFM INTERNATIONAL Engines CFM 56-5B5/P, excluding nacelles and thrust reversers is
 
 	    	USD *****	
 
 	    	(US Dollars *****	
The above Engine Basic Prices have been calculated from the Engine Reference Prices set forth in Exhibit C parts 2 and 3 in accordance with the delivery conditions prevailing in *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 3 – Page 1/4

3.2	A320-200 Basic Price	
 
3.2.1	The A320-200 Airframe Basic Price is the sum of:	
 
 	(i)	the basic price of the A320-200 Airframe as defined in the A320-200 Standard Specification (excluding Buyer Furnished Equipment), including nacelles and thrust reversers, which is:	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
 	(ii)	the sum of the basic prices of all SCNs set forth in Appendix 1.2 to Exhibit “A”, which is:	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
    	The A320-200 Airframe Basic Price corresponds to a theoretical delivery in ***** (the “ Base Period ”).	
 
3.2.2	A320-200 Engines Basic Prices	
 
    	The basic price of a set of INTERNATIONAL AERO ENGINES V2527-A5, excluding nacelles and thrust reversers is:	
 
    	USD *****	
 
    	(US Dollars *****	
 
    	The basic price of a set of CFM INTERNATIONAL Engines CFM 56-5B6/P, excluding nacelles and thrust reversers is:	
 
    	USD *****	
 
    	(US Dollars *****	
 
    	The above Engine Basic Prices have been calculated from the Engine Reference Prices set forth in Exhibit C parts 2 and 3 in accordance with the delivery conditions prevailing in *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 3 – Page 2/4

3.3	A321-200 Basic Price	
 
3.3.1	The A321-200 Airframe Basic Price is the sum of:	
 
 	(i)	the basic price of the A321-200 Airframe as defined in the A321-200 Standard Specification (excluding Buyer Furnished Equipment), including nacelles and thrust reversers , which is:	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
 	(ii)	the sum of the basic prices of all SCNs set forth in Appendix 1.3 to Exhibit “A”, which is	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
    	The A321-200 Airframe Basic Price corresponds to a theoretical delivery in *****  —  (the “ Base Period ”).	
 
3.3.2	A321-200 Engines Basic Prices	
 
    	The basic price of a set of INTERNATIONAL AERO ENGINES V2533-A5, excluding nacelles and thrust reversers is:	
 
 	    	USD *****	
 
 	    	US Dollars *****	
 
    	The basic price of a set of CFM INTERNATIONAL Engines CFM 56-5B3/P, excluding nacelles and thrust reversers is	
 
 	    	USD *****	
 
 	    	(US Dollars *****	
 
    	The above Engine Basic Prices have been calculated from the Engine Reference Prices set forth in Exhibit C parts 2 and 3 in accordance with the delivery conditions prevailing in *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 3 – Page 3/4

3.4	Final Price	
 
    	The Final Price of each Aircraft shall be the sum of:	
 
 	(i)	the Airframe Basic Price adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula as set forth in Clause 4.1; plus	
 
 	(ii)	the aggregate of all increases or decreases to the Airframe Basic Price as agreed in any Specification Change Notice or part thereof applicable to the Airframe subsequent to the date of this Agreement adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula as set forth in Clause 4.1; plus	
 
 	(iii)	the Engine Reference Price adjusted to the Delivery Date in accordance with the Engine Price Revision Formula as set forth in Clause 4.2; plus	
 
 	(iv)	the aggregate of all increases or decreases to the Engines Reference Price as agreed in any Specification Change Notice or part thereof applicable to the Engines subsequent to the date of this Agreement adjusted to the Delivery Date in accordance with the Engine Price Revision Formula as set forth in Clause 4.2; plus	
 
 	(v)	any other amount due by the Buyer to the Seller with respect to the particular Aircraft pursuant to this Agreement and/or any other written agreement between the Buyer and the Seller with respect to the Aircraft.	
 
Clause 3 – Page 4/4

4	PRICE REVISION	
 
4.1	Revision of Airframe Basic Price	
 
    	The Airframe Basic Price is subject to revision up to and including the Delivery Date in accordance with the Airframe Price Revision Formula set forth in Part 1 of Exhibit C.	
 
4.2	Revision of Engine Reference Price	
 
4.2.1	The Engine Reference Price is subject to revision up to and including the Delivery Date in accordance with the Engine Price Revision Formula set forth in Parts 2 and 3 of Exhibit C.	
 
4.2.2	Modification of Engine Reference Price and Engine Price Revision Formula	
 
    	The Engine Reference Price, the prices of the related equipment and the Engine Price Revision Formula are based on information received from the Engine Manufacturer and are subject to amendment by the Engine Manufacturer at any time prior to the Delivery Date provided such amendment affects all other Engines ordered by the Seller on or after the date the Seller places the order for the Engines to be installed on the Aircraft delivered to the Buyer. If the Engine Manufacturer makes any such amendment, the amendment shall be automatically incorporated into this Agreement and the Engine Reference Price, the prices of the related equipment and the Engine Price Revision Formula shall be adjusted accordingly. The Seller agrees to notify the Buyer as soon as it receives notice of any such amendment from the Engine Manufacturer.	
 
Clause 4 – Page 1/1

5	PAYMENTS	
 
5.1	Seller’s Account	
 
    	The Buyer shall pay the Predelivery Payments, the Balance of Final Price and/or any other amount due by the Buyer to the Seller, to the Seller’s account:	
 
    	Beneficiary Name: AIRBUS	
 
    	account identification: ***** with:	
 
    	CALYON	
    	SWIFT: *****	
    	ABA: *****	
    	1301 Avenue of the Americas	
    	New York, NY 10019	
    	USA	
 
    	or to such other account as may be designated by the Seller.	
 
5.2	*****	
 
5.3	Predelivery Payments	
 
5.3.1	The Buyer shall pay Predelivery Payments to the Seller calculated on the predelivery payment reference price of each Aircraft. The predelivery payment reference price is determined by the following formula:	
 
    	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 5 – Page 1/5

 
					
5.3.2            	    	*****	  		
	    	*****	  	*****	
	    	*****	  	*****	
	    	*****	  	*****	
	    	***** months	  	*****	
	    	***** months	  	*****	
	    	***** months	  	*****	
	    	***** months	  	*****	
	    	*****	  	*****	
	    	*****	  		
			
5.3.3	    	*****	  		
			
5.3.4	    	*****	  		
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 5 – Page 2/5

    	Month of the affected Aircraft consistent with the Seller’s other commitments and production capabilities.	
 
5.4	Balance of Final Price	
 
5.4.1	The Balance of Final Price payable by the Buyer to the Seller on the Delivery Date shall be an amount equal to the Final Price less the amount of Predelivery Payments received by the Seller on or before the Delivery Date.	
 
5.4.2	Following receipt of the Seller’s invoice, and immediately prior to Delivery, the Buyer shall pay to the Seller the Balance of Final Price.	
 
5.5	Other Charges	
 
    	Unless expressly stipulated otherwise, any other charges due under this Agreement with respect to an Aircraft, other than those set out in Clauses 5.2, 5.3 and 5.4, shall be paid by the Buyer at the same time as payment of the Balance of Final Price or, if invoiced after the Delivery Date, *****	
 
5.6	Method of Payment	
 
5.6.1	All payments provided for in this Agreement shall be made in United States Dollars (USD) in immediately available funds.	
 
5.6.2	All payments due to the Seller hereunder shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Buyer shall procure that the sums received by the Seller under this Agreement shall be equal to the full amounts expressed to be due to the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature. If the Buyer is compelled by law to make any such deduction or withholding the Buyer shall pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding shall be equal to the amounts which would have been received in the absence of such deduction or withholding and pay to the relevant taxation or other authorities within the period for payment permitted by applicable law, the full amount of the deduction or withholding.	
 
5.7	Default Interest	
 
    	If any payment due to the Seller under this Agreement including but not limited to any Predelivery Payment, commitment fee, option fees for the Aircraft as well as any payment due to the Seller for any spare parts, data, documents, training and services under this Agreement, is not received on the due date, without prejudice to the Seller’s other rights under this Agreement and at law, the Seller shall be entitled to interest on the late payment calculated on the amount due from and including the due date of payment up to and including the date when the payment is received by the Seller at a rate equal to the *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 5 – Page 3/5

    	***** in US Dollars (as published in the Financial Times on the due date) *****	
 
    	All such interest shall be calculated on the basis of the actual number of days elapsed in the month assuming a ***** month and a *****	
 
5.8	Taxes	
 
5.8.1	Provided that Buyer exports the Aircraft following Delivery the Seller shall pay any and all taxes, duties or similar charges of any nature whatsoever levied, assessed, charged or collected for or in connection with the manufacture, assembly, sale and delivery under this Agreement of any of the Aircraft, services, instructions and data delivered or furnished hereunder provided such charges have been promulgated and are enforceable under the laws of France, Federal Republic of Germany, Great Britain and Spain or any other jurisdiction where the Aircraft or any part or components (excluding Buyer Furnished Equipment as defined in sub-Clause 18 of the Agreement) thereof is manufactured or assembled. Upon request, the Buyer shall furnish the Seller with evidence of the exportation of an Aircraft following Delivery.	
 
5.8.2	The Buyer shall bear the costs of and pay any and all taxes, duties or similar charges of any nature whatsoever not assumed by the Seller under Clause 5.8.1 including but not limited to any duties or taxes due upon or in relation to the importation or registration of the Aircraft in the Buyer’s country or any permitted operator’s country or for importation or registration of the Aircraft in the United States of America and/or any withholdings or deductions levied or required in the Buyer’s country or any permitted operator’s country or the Aircraft in the United States of America in respect of the payment to the Seller of any amount due by the Buyer hereunder except:	
 
 	(i)	any taxes assessed upon or calculated in accordance with Seller’s or any member of Seller’s gross or net income, gross revenues or gains.	
 
 	(ii)	taxes which would not have been imposed but for Seller’s or its Affiliates’ gross negligence or wilful misconduct or failure to file any required tax return or other information with any taxing authority having jurisdiction over Seller or such Affiliate, as the case may be, or any connection of the Seller to the taxing jurisdiction other than as arising solely in respect hereof.	
 
5.9	Proprietary Interest	
 
    	The Buyer shall not, by virtue of anything contained in this Agreement (including, without limitation, any Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 5 – Page 4/5

5.10	Set-Off	
 
    	The Seller may set-off any matured obligation owed by the Buyer to the Seller against any obligation (whether or not matured) owed by the Seller to the Buyer, regardless of the place of payment or currency (it being understood that if this obligation is unascertainable it may be estimated and the set-off made in respect of such estimate). The Seller will promptly notify the Buyer in writing after such set-off.	
 
5.11	***** 	
 
5.11.1	*****	
 
5.11.2	*****	
 
    	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 5 – Page 5/5

6	MANUFACTURE PROCEDURE — INSPECTION	
 
6.1	Manufacture Procedure	
 
    	The Airframe shall be manufactured in accordance with the relevant requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.	
 
6.2	Inspection	
 
6.2.1	The Buyer or its duly authorised representatives (the “ Buyer’s Inspector(s) ”) shall be entitled to inspect the manufacture of the Airframe and all materials and parts obtained by the Seller for the manufacture of the Airframe on the following terms and conditions:	
 
 	(i)	any inspection shall be made according to a procedure to be agreed upon with the Buyer but shall be conducted pursuant to the Seller’s own system of inspection as developed under the supervision of the relevant Aviation Authority;	
 
 	(ii)	the Buyer’s Inspector(s) shall have access to such relevant technical data as is reasonably necessary for the purpose of the inspection;	
 
 	(iii)	any inspection and any related discussions with the Seller and other relevant personnel by the Buyer’s Inspector(s) shall be at reasonable times during business hours and shall take place in the presence of relevant inspection department personnel of the Seller;	
 
 	(iv)	the inspections shall be performed in a manner not to unduly delay or hinder the manufacture or assembly of the Aircraft or the performance of this Agreement by the Seller or any other work in progress at the Manufacture Facilities.	
 
6.2.2	Location of Inspections	
 
    	The Buyer’s Inspector(s) shall be entitled to conduct any such inspection at the relevant Manufacture Facility of the Seller or the Affiliates and where possible at the Manufacture Facilities of the sub-contractors provided that if access to any part of the Manufacture Facilities where the Airframe manufacture is in progress or materials or parts are stored is restricted for security or confidentiality reasons, the Seller shall be allowed reasonable time to make the relevant items available elsewhere.	
 
6.3	Seller’s Service for Buyer’s Inspector(s)	
 
    	For the purpose of the inspections, and commencing with the date of this Agreement until the Delivery Date of the last Aircraft, the Seller *****	

    	The Buyer shall pay for its telephone and fax invoices.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 6 – Page 1/1

7	CERTIFICATION	
 
7.1	Type Certification	
 
    	The Aircraft has been type certificated under European Aviation Safety Agency (EASA) procedures for certification in the transport category. The Seller shall obtain the relevant type certificate (the “ Type Certificate ”) to allow the issuance of an Export Certificate of Airworthiness valid for the export to Mexico, the United States of America or other country requested by the Buyer and reasonably acceptable to the Seller, such acceptance not be unreasonably withheld.	
 
7.2	Export Airworthiness Certificate	
 
7.2.1	The Aircraft shall be delivered to the Buyer with an Export Airworthiness Certificate.	
 
7.2.2	If, any time before the date on which the Aircraft is Ready for Delivery, any law or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law or regulation is issued which requires any change to the Specification for the purposes of obtaining the Export Airworthiness Certificate (a “ Change in Law ”), the Seller shall make the required variation or modification at Seller’s cost and the parties hereto shall sign a Specification Change Notice which specifies the effects, if any, upon the guaranteed performances, weights, interchangeability, time of Delivery of the Aircraft and text of the Specification.	
 
7.2.3	The Seller shall as far as practicable (but at its sole discretion and without prejudice to Clause 7.3.1(ii)) take into account the information available to it concerning any proposed law, regulation or interpretation which could become a Change in Law in order to minimise the costs of changes to the Specification as a result of such proposed law, regulation or interpretation becoming effective prior to the Aircraft being Ready for Delivery.	
 
7.2.4	The costs of implementing a variation or modification referred to in Clause 7.2.2 that relates to the Propulsion Systems shall be borne in accordance with such arrangements as may be made separately between the Buyer and the Propulsion Systems Manufacturer at no cost to the Seller.	
 
7.4	Validation of the Export Airworthiness Certificate	
 
7.4.1	Where the Buyer’s Aviation Authority requires a modification to comply with additional import aviation requirements and/or supply of additional data prior to the issuance of the Export Airworthiness Certificate, the Seller shall incorporate such modification and/or provide such data at costs to be borne by the Seller. The parties shall sign a Specification Change Notice which specifies the effects, if any, upon the guaranteed performances, weights, interchangeability and time of Delivery of the Aircraft.	
 
Clause 7 – Page 1/1

8	BUYER’S TECHNICAL ACCEPTANCE	
 
8.1	Technical Acceptance Process	
 
8.1.1	Prior to Delivery the Aircraft shall undergo a technical acceptance process, developed by the Seller for the Aircraft type (the “ Technical Acceptance Process ”). The Technical Acceptance Process shall demonstrate the satisfactory functioning of the Aircraft. The successful compliance with the Technical Acceptance Process shall be deemed to demonstrate the compliance with the Specification. Should it be established that the Aircraft does not comply with the Technical Acceptance Process requirements, the Seller shall without hindrance from the Buyer be entitled to carry out any necessary changes and, as soon as practicable thereafter, resubmit the Aircraft to such further Technical Acceptance Process as is necessary to demonstrate the elimination of the non-compliance.	
 
8.1.2	The Technical Acceptance Process shall:	
 
 	(i)	commence on a date notified by the Seller to the Buyer by *****	
 
 	(ii)	take place at the Delivery Location;	
 
 	(iii)	be carried out by the personnel of the Seller;	
 
 	(iv)	include a technical acceptance flight which shall ***** unless a discrepancy or defect discovered during the Technical Acceptance Process requires *****	
 
8.2	Buyer’s Attendance	
 
8.2.1	The Buyer shall be entitled to elect to attend the Technical Acceptance Process.	
 
8.2.2	If the Buyer elects to attend the Technical Acceptance Process, the Buyer:	
 
 	(i)	shall co-operate in complying with the reasonable requirements of the Seller with the intention of completing the Technical Acceptance Process within ***** after its commencement;	
 
 	(ii)	may have a ***** having access to the cockpit at any one time) accompany the Seller’s representatives on a technical acceptance flight and during such flight the Buyer’s representatives shall comply with the instructions of the Seller’s representatives.	
 
8.2.3	If the Buyer does not attend and/or fails to co-operate in the Technical Acceptance Process, the Seller shall be entitled to complete the Technical Acceptance Process and the Buyer shall be deemed to have accepted the Technical Acceptance Process as satisfactory in all respects (provided, that the Technical Acceptance Process shall have demonstrated the satisfactory functioning of the Aircraft).	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 8 – Page 1/2

8.3	Certificate of Acceptance	
 
    	Upon successful completion of the Technical Acceptance Process ***** the Buyer shall, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”).	
 
8.4	Aircraft Utilisation	
 
    	The Seller shall, without payment or other liability, be entitled to use the Aircraft prior to Delivery as may be necessary to obtain the certificates required under Clause 7, and such use shall not prejudice the Buyer’s obligation to accept Delivery of the Aircraft hereunder.	
 
    	However the Seller shall not be authorised to use the Aircraft during more than ***** for any other purpose without the specific agreement of the Buyer.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 8 – Page 2/2

9	DELIVERY	
 
9.1	Delivery Schedule	
 
9.1.1	Subject to Clauses 2, 7, 8, 10 and 18, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location within the following months:	

Aircraft Rank	 	Aircraft Type	 	Delivery Month	
- Aircraft N°01	 	A319-100	 	*****	 	*****	
- Aircraft N°02	 	A319-100	 	*****	 	*****	
- Aircraft N°03	 	A319-100	 	*****	 	*****	
- Aircraft N°04	 	A319-100	 	*****	 	*****	
- Aircraft N°05	 	A319-100	 	*****	 	*****	
- Aircraft N°06	 	A319-100	 	*****	 	*****	
- Aircraft N°07	 	A319-100	 	*****	 	*****	
- Aircraft N°08	 	A319-100	 	*****	 	*****	
- Aircraft N°09	 	A319-100	 	*****	 	*****	
- Aircraft N°10	 	A319-100	 	*****	 	*****	
- Aircraft N°11	 	A319-100	 	*****	 	*****	
- Aircraft N°12	 	A319-100	 	*****	 	*****	
- Aircraft N°13	 	A319-100	 	*****	 	*****	
- Aircraft N°14	 	A319-100	 	*****	 	*****	
- Aircraft N°15	 	A319-100	 	*****	 	*****	
- Aircraft N°16	 	A319-100	 	*****	 	*****	
 
    	Each of such months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.	
 
    	*****	
 
9.1.2	The Seller shall give the Buyer at least ***** prior written notice of the anticipated date on which the Aircraft shall be Ready for Delivery. Thereafter the Seller shall notify the Buyer of any change in such date necessitated by the conditions of manufacture or flight.	
 
9.2	Delivery	
 
9.2.1	The Buyer shall send its representatives to the Delivery Location to take Delivery of, and collect, the Aircraft within ***** after the date on which the Aircraft is Ready for Delivery and shall pay the Balance of the Final Price on or before the Delivery Date.	
 
9.2.2	The Seller shall deliver and transfer title to the Aircraft free and clear of all encumbrances to the Buyer provided that the Balance of the Final Price has been paid by the Buyer pursuant to Clause 5.4 and that the Certificate of Acceptance	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 9 – Page 1/2

    	has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller shall provide the Buyer with a bill of sale in the form of Exhibit E (the “ Bill of Sale ”) and/or such other documentation confirming transfer of title and receipt of the Final Price as may reasonably be requested by the Buyer. Title to, property in and risk of loss of or damage to the Aircraft shall be transferred to the Buyer on Delivery.	
 
9.2.3	If the Aircraft is Ready for Delivery and the Buyer fails to	
 
 	(i)	deliver the signed Certificate of Acceptance to the Seller within the delivery period as defined in Clause 9.2.1; or	
 
 	(ii)	pay the Balance of the Final Price for the Aircraft to the Seller within the above defined period;	
 
    	then the Buyer shall be in default with regard to the delivery of the Aircraft. In addition to Clause 5.7 and the Seller’s other rights under this Agreement, the Seller shall retain title to the Aircraft but the Buyer shall thereafter bear all risk of loss of or damage to the Aircraft and shall indemnify and hold the Seller harmless against any and all reasonable documented costs (including but not limited to any parking, storage, and insurance costs) and consequences resulting from such failure, it being understood that the Seller shall be under no duty to store, park, insure, or otherwise protect the Aircraft.	
 
9.3	Fly Away	
 
9.3.1	The Buyer and the Seller shall co-operate to obtain any licenses which may be required by the Aviation Authority of the Delivery Location for the purpose of exporting the Aircraft. In that case, the Buyer will be obligated to take delivery of the Aircraft only after such licenses have been obtained.	
 
9.3.2	All expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery shall be borne by the Buyer. The Buyer shall make direct arrangements with the supplying companies for the fuel and oil required for all post-Delivery flights.	
 
Clause 9 – Page 2/2

10	EXCUSABLE DELAY	
 
10.1	The Buyer acknowledges that the Aircraft (is) (are) to be manufactured by Seller in performance of this Agreement and that the Scheduled Delivery Month (s) (is) (are) based on the assumption that there shall be no delay due to causes beyond the control of the Seller. Accordingly, Seller shall not be responsible for any delay in the Delivery of the Aircraft or delay or interruption in the performance of the other obligations of the Seller hereunder due to causes beyond its control, and not occasioned by its fault or negligence including (but without limitation) acts of God or the public enemy, war, civil war, warlike operations, terrorism, insurrections or riots, fires, explosions, natural disasters, compliance with any applicable foreign or domestic governmental regulation or order, labour disputes causing cessation, slowdown or interruption of ***** inability after due and timely diligence to procure materials, equipment or parts, general hindrance in transportation or failure of a sub-contractor or supplier to furnish materials, equipment or parts due to the above mentioned causes. Any delay or interruption resulting from any of the foregoing causes is referred to as an “ Excusable Delay ”.	
 
10.2	If an Excusable Delay occurs:	
 
 	(i)	the Seller shall notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;	
 
 	(ii)	the Seller shall not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer;	
 
 	(iii)	the Seller shall not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay; and	
 
 	(iv)	the Seller shall as soon as practicable after the removal of the cause of the delay resume performance of its obligations under this Agreement and in particular shall notify to the Buyer the revised Scheduled Delivery Month.	
 
 	(v)	In addition, the result of the ***** as referred in ***** for the affected Aircraft shall be *****	
 
10.3	Termination on Excusable Delay	
 
10.3.1	If the Delivery of any Aircraft is delayed as a result of an Excusable Delay for a period of more than ***** then the Buyer may terminate this Agreement with respect to the Aircraft and related spare parts so affected by giving written notice to the Seller within ***** provided, that the Buyer shall not be entitled to terminate this Agreement pursuant to this Clause if the Excusable Delay results from a cause within its control.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 10 – Page 1/3

10.3.2	If the Seller concludes that the Delivery of any Aircraft shall be delayed for more than ***** due to an Excusable Delay and as a result thereof in good faith reschedules Delivery of such Aircraft in a non-discriminatory manner to a date or month reflecting such delay, then the Seller shall promptly notify the Buyer in writing to this effect and shall include in such notification the new Scheduled Delivery Month. The Buyer may thereupon terminate this Agreement with respect to such Aircraft by giving written notice to the Seller ***** If the Buyer chooses not to so terminate this Agreement, it and the Seller shall enter into an amendment in writing to reflect such rescheduled delivery date.	
 
10.3.3	If this Agreement shall not have been terminated with respect to the delayed Aircraft during the ***** referred to in either Clause 10.3.1 or 10.3.2 above, then the Seller shall be entitled to reschedule Delivery and the new Scheduled Delivery Month shall be notified to the Buyer and shall be binding on the parties and any further delay will be subject to the provisions of this Clause 10.	
 
10.4	Total Loss, Destruction or Damage	
 
    	If prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond repair (“ Total Loss ”), the Seller shall notify the Buyer to this effect ***** The Seller shall include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) the earliest date consistent with the Seller’s other commitments and production capabilities that an aircraft to replace the Aircraft may be delivered to the Buyer and the Scheduled Delivery Month shall be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft; provided, however, that in the event the specified extension of the Scheduled Delivery Month *****	
 
 	(i)	the Buyer notifies the Seller *****	
 
 	(ii)	the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month;	
 
    	provided, however, that nothing herein shall require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft which includes the Aircraft purchased hereunder.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 10 – Page 2/3

10.5	Termination Rights Exclusive	
 
    	***** such termination shall discharge all obligations and liabilities of the parties hereunder with respect to such affected Aircraft and undelivered material, services, data or other items applicable thereto and to be furnished *****	
 
    	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 10 – Page 3/3

11	NON-EXCUSABLE DELAY	
 
11.1	Liquidated Damages	
 
    	Should any of the Aircraft not be Ready for Delivery to the Buyer within ***** after the last day of the Scheduled Delivery Month (as varied by virtue of Clauses 2, 7 and 10) (the “ Delivery Period ”) and such delay is not as a result of an Excusable Delay or Total Loss (a “ Non-Excusable Delay ”), then the Buyer shall have the right to claim, and the Seller shall pay by way of liquidated damages to the Buyer ***** (delivery conditions January 2004) for each day of delay in the Delivery commencing on the date falling ***** after the last day of the Scheduled Delivery Month.	
 
    	The amount of such liquidated damages shall in no event exceed the total of ***** (delivery conditions ***** in respect of any one Aircraft.	
 
    	The Buyer’s right to be paid damages in respect of the Aircraft is conditional upon the Buyer submitting a claim in respect of such liquidated damages in writing to the Seller not later than***** after the last day of the Scheduled Delivery Month.	
 
    	In addition, the *****	
 
11.2	Re-negotiation	
 
    	If, as a result of Non-Excusable Delay, Delivery does not occur in the period ***** after the Delivery Period, the Buyer shall have the right exercisable by written notice to the Seller given not less than ***** nor more than ***** after the expiration of the ***** falling after the Delivery Period to require from the Seller a re-negotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such re-negotiation, re-negotiation shall not prejudice the Buyer’s right to receive liquidated damages in accordance with Clause 11.1 during the period of Non-Excusable Delay.	
 
11.3	Termination	
 
    	If, as a result of Non-Excusable Delay, Delivery does not occur ***** and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, the Buyer in its discretion and the Seller in the exercise of good faith shall have the right exercisable by written notice to the other party, given ***** to terminate this Agreement in respect of the affected Aircraft ***** and neither party shall have any claim against the other in respect of such non-delivery *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 11 – Page 1/2

    	*****	
 
    	*****	
 
    	The Seller, if the Buyer requests, *****	
 
11.4	Limitation of Damages	
 
    	The Buyer and the Seller agree that payment by the Seller of the amounts due pursuant to Clause 11.1 shall be considered to be a liquidated damages provision ( Clause pénale ) within the meaning of Articles 1152 and 1226 of the French Civil Code and has been calculated to compensate the Buyer for its entire damages for all losses of any kind due to Non-Excusable Delay. The Seller shall not in any circumstances have any liability whatsoever for Non-Excusable Delay other than as set forth in this Clause 11.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 11 – Page 2/2

12	WARRANTIES AND SERVICE LIFE POLICY	
 
    	This Clause covers the terms and conditions of the warranty and service life policy.	
 
12.1	Standard Warranty	
 
12.1.1	Nature of Warranty	
 
    	Subject to the conditions and limitations as hereinafter provided for and except as provided for in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and all Warranted Parts as defined hereinafter shall at Delivery to the Buyer:	
 
 	(i)	be free from defects in material;	
 
 	(ii)	be free from defects in workmanship, including without limitation processes of manufacture;	
 
 	(iii)	be free from defects in design (including without limitation the selection of materials) having regard to the state of the art at the date of such design;	
 
 	(iv)	be free from defects arising from failure to conform to the Specification, except to those portions of the Specification relating to performance or where it is expressly stated that they are estimates, approximations or design aims; and	
 
 	(v)	conform to the Customized Specifications as the same may be amended pursuant hereto.	
 
    	For the purpose of this Agreement the term “ Warranted Part ” shall mean any Seller proprietary component, equipment, accessory or part as installed on an Aircraft at Delivery of such Aircraft and	
 
 	(a)	which is manufactured to the detailed design of the Seller or a subcontractor of the Seller and	
 
 	(b)	which bears a part number of the Seller at the time of such delivery.	
 
12.1.2	Exclusions	
 
    	The warranties set forth in Clause 12.1.1 shall not apply to Buyer Furnished Equipment, nor to the Propulsion Systems, nor to any component, equipment, accessory or part purchased by the Seller that is not a Warranted Part except that:	
 
 	(i)	any defect in the Seller’s workmanship incorporated in the installation, storage and handling of such items in the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturer of such item that invalidates any applicable warranty from such manufacturer, shall constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in sub-Clause 12.1.1(ii); and	
 
Clause 12 – Page 1/16

 	(ii)	any defect inherent in the Seller’s design of the installation, in view of the state of the art at the date of such design, which impairs the use of such item shall constitute a defect in design for the purpose of this Clause 12.1 and be covered by the warranty set forth in sub-Clause 12.1.1(iii).	
 
12.1.3	Warranty Period	
 
    	The warranties contained in Clauses 12.1.1 and 12.1.2 shall be limited to those defects which become apparent within ***** after Delivery of the affected Aircraft (“ Warranty Period ”).	
 
12.1.4	Buyer’s Remedy and Seller’s Obligation	
 
12.1.4.1	The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are, at Sellers expense and option, limited to either (i) the repair, replacement or correction on the Aircraft of any Warranted Part which is defective, or (ii) the supply of modification kits rectifying the defect, or (iii) to furnish a credit to the Buyer equal to the price at which the Buyer is entitled to purchase a replacement for the defective Warranted Part. In all of the preceding cases, Seller will furnish a credit to the Buyer equal to the labor required for the removal and re-installation on the Aircraft of any Warranted Part which is defective at the rate established in Clause 12.1.7(v).	
 
    	Any replacement part shall not have less cycles, calendar time and flight hours (as the case may be) remaining, than the Warranted Part which it replaced.	
 
12.1.4.2	In the event of a defect covered by sub-Clauses 12.1.1(iii), 12.1.1(iv) and 12.1.2(ii) becoming apparent within the Warranty Period and the Seller is obliged to correct such defect, the Seller shall also, if so requested by the Buyer, make such correction in any Aircraft which has not yet been delivered to the Buyer; provided, however,	
 
 	(i)	that the Seller shall not be responsible nor deemed to be in default on account of any reasonable delay (the Seller shall use its reasonable efforts to minimize such delay) in delivery of any Aircraft or otherwise, in respect of the performance of this Agreement due to the Seller’s undertaking to make such correction and provided further	
 
 	(ii)	that, rather than accept a delay in the delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept delivery and thereafter file a warranty claim as though the defect had become apparent immediately after Delivery of such Aircraft.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 12 – Page 2/16

12.1.4.3	In addition to the remedies set forth in Clauses 12.1.4.1 and 12.1.4.2, the Seller shall reimburse the direct labor costs spent by the Buyer in performing inspections of the Aircraft to determine whether or not a defect exists in any Warranted Part within the Warranty Period or until the corrective technical solution removing the need for the inspection is provided by the Seller.	
 
    	The above commitment is subject to the following conditions:	
 
 	(i)	such inspections are recommended by a Seller Service Bulletin to be performed within the Warranty Period;	
 
 	(ii)	the inspection performed is not part of a scheduled maintenance check as recommended by the Sellers Maintenance Planning Document;	
 
 	(iii)	the reimbursement shall not apply for any inspections performed as an alternative to accomplishing corrective action when such corrective action has been made available to the Buyer and such corrective action could have reasonably been accomplished by the Buyer at the time such inspections are performed or earlier;	
 
 	(iv)	the labor rate to be used for the reimbursement shall be labor rate defined in Clause 12.1.7; and	
 
 	(v)	the man-hours used to determine such reimbursement shall not exceed the Sellers reasonable estimate of the man-hours required by the Buyer for such inspections.	
 
12.1.5	Warranty Claim Requirements	
 
    	Each Buyers warranty claim (“ Warranty Claim ”) shall be considered by the Seller only if the following conditions are first fulfilled:	
 
 	(i)	the defect having become apparent within the Warranty Period;	
 
 	(ii)	the Buyer having submitted to the Seller proof reasonably satisfactory to the Seller that the claimed defect is due to a matter embraced within this Clause 12.1, and that such defect has not resulted from any act or omission of the Buyer, including but not limited to, any failure to operate and maintain the affected Aircraft or part thereof in accordance with the standards set forth or any matter covered in Clause 12.1.10;	
 
 	(iii)	the Buyer having returned as soon as practicable the Warranted Part claimed to be defective to the repair facilities as may be reasonably designated by the Seller, except when the Buyer elects to repair a defective Warranted Part in accordance with the provisions of Clause 12.1.7;	
 
 	(iv)	the Seller having received a Warranty Claim as set forth in Clause 12.1.6.	
 
Clause 12 – Page 3/16

12.1.6 	Warranty Administration	
 
    	The warranties set forth in Clause 12.1 shall be administered as hereinafter provided for:	
 
 	(i)	Claim Determination	
 
 	    	Warranty Claim determination by the Seller shall be reasonably based upon the claim details, reports from the Seller’s local representative, historical data logs, inspection, tests, findings during repair, defect analysis and other suitable documents.	
 
 	(ii)	Transportation Costs	
 
 	    	Transportation costs for sending a defective Warranted Part to the facilities designated by the Seller and for the return therefrom of a repaired or replaced Warranted Part shall be borne by the Buyer on its network and by the Seller for the remainder of the transport.	
 
 	(iii)	Return of an Aircraft	
 
 	    	In the event of the Buyer desiring to return an Aircraft to the Seller for consideration of a Warranty Claim, the Buyer shall notify the Seller of its intention to do so and the Seller shall, prior to such return, have the right to inspect such Aircraft and thereafter, without prejudice to its rights hereunder, to repair such Aircraft, at its sole option, either at the Buyer’s facilities or at another place acceptable to the Seller. Return of any Aircraft by the Buyer to the Seller and return of such Aircraft to the Buyer’s facilities shall be at the Seller’s expense.	
 
 	(iv)	On-Aircraft Work by the Seller	
 
 	    	In the event that a defect subject to this Clause 12.1 may justify the dispatch by the Seller of a working team to repair or correct such defect through the embodiment of one or several Seller’s Service Bulletins at the Buyer’s facilities, or in the event of the Seller accepting the return of an Aircraft to perform or have performed such repair or correction, then the direct cost (including labor costs) for such on-Aircraft work are to be borne by the Seller.	
 
 	    	The condition which has to be fulfilled for on-Aircraft work by the Seller is that in the reasonable opinion of the Seller, the work necessitates the technical expertise of the Seller as manufacturer of the Aircraft.	
 
 	    	If said condition is fulfilled and if the Seller is requested to perform the work, the Seller and the Buyer shall agree on a schedule and place for the work to be performed.	
 
Clause 12 – Page 4/16

 	(v)	Warranty Claim Substantiation	
 
 	    	In connection with each claim by the Buyer made under this Clause 12.1, the Buyer shall file a Warranty Claim on the Buyer’s form within sixty (60) days after a defect became apparent. Such form must contain at least the following data:	
 
 	a)	description of defect and action taken, if any,	
 
 	b)	date of incident and/or removal date,	
 
 	c)	description of the defective part,	
 
 	d)	part number,	
 
 	e)	serial number (if applicable),	
 
 	f)	position on Aircraft,	
 
 	g)	total flying hours or calendar time, as applicable at the date of defect appearance,	
 
 	h)	time since last shop visit at the date of defect appearance,	
 
 	i)	manufacturer serial number (“ Manufacturer’s Serial Number ”) of the Aircraft and/or its registration,	
 
 	j)	Aircraft total flying hours and/or number of landings at the date of defect appearance,	
 
 	k)	Warranty Claim number,	
 
 	l)	date of Warranty Claim,	
 
 	m)	delivery date of Aircraft or part to the Buyer.	
 
 	    	Warranty Claims are to be addressed as follows:	
 
 	    	AIRBUS	
 	    	CUSTOMER SERVICES DIRECTORATE	
 	    	WARRANTY ADMINISTRATION	
 	    	Rond-Point Maurice Bellonte	
 	    	B.P. 33	
 	    	F-31707 BLAGNAC CEDEX	
 	    	FRANCE	
 
Clause 12 – Page 5/16

 	(vi)	Replacements	
 
 	    	Components, equipment, accessories or parts, which the Seller has replaced pursuant to this Clause, shall become the Seller’s property. The replacement components, equipment, accessories or parts provided by the Seller to the Buyer pursuant to this Clause shall become the Buyer’s property.	
 
 	(vii)	Seller’s Rejection	
 
 	    	The Seller shall provide reasonable written substantiation in case of rejection of a Warranty Claim. The Buyer shall refund to the Seller reasonable inspection and test charges incurred in connection with a rejected Warranty Claim if no defect has been substantiated in more than ***** of the Buyer’s Warranty Claims.	
 
 	(viii)	Seller’s Inspection	
 
 	    	The Seller shall have the right to inspect the affected Aircraft and documents and other records relating thereto in the event of any Warranty Claim under this Clause 12.1.	
 
12.1.7	Inhouse Warranty	
 
 	(i)	Seller’s Authorization	
 
 	    	The Seller hereby authorizes the Buyer to perform the repair of Warranted Parts (“ Inhouse Warranty ”) subject to the terms of this Clause 12.1.7.	
 
 	(ii)	Conditions for Seller’s Authorization	
 
 	    	The Buyer shall be entitled to repair such Warranted Parts only:	
 
 	-	 	if the Buyer notifies the Seller’s Representative of its intention to perform Inhouse Warranty repairs before any such repairs are started where the estimated cost of such repair is in excess of US Dollars ***** (US$ *****). The Buyer’s notification shall include sufficient detail regarding the defect, estimated labor hours and material to allow the Seller to ascertain the reasonableness of the estimate. The Seller agrees to use all reasonable efforts to ensure a prompt response and shall not unreasonably withhold authorization;	
 
 	-	 	if adequate facilities and qualified personnel are available to the Buyer;	
 
 	-	 	in accordance with the Seller’s written instructions set forth in the applicable Seller’s technical documentation;	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 12 – Page 6/16

 	-	 	to the extent specified by the Seller, or, in the absence of such specification, to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in Clause 12.1.10.	
 
 	(iii)	Seller’s Rights	
The Seller shall have the right to have any Warranted Part, or any part removed therefrom, claimed to be defective, returned to the Seller, as set forth in sub-Clause 12.1.6(ii) if, in the judgement of the Seller, the nature of the defect requires technical investigation. The Seller shall further have the right to have a representative present during the disassembly, inspection and testing of any Warranted Part claimed to be defective, subject to its presence being practical and not unduly delaying the repair.
 
 	(iv)	Inhouse Warranty Claim Substantiation	
Claims for Inhouse Warranty credit shall contain the same information as that required for Warranty Claims under sub-Clause 12.1.6(v) and in addition shall include:
 
 	a)	a report of technical findings with respect to the defect,	
 
 	b)	for parts required to remedy the defect:	
 
 	-	 	part numbers,	
 
 	-	 	serial numbers (if applicable),	
 
 	-	 	parts description,	
 
 	-	 	quantity of parts,	
 
 	-	 	unit price of parts,	
 
 	-	 	related Seller’s or third party’s invoices (if applicable),	
 
 	-	 	total price of parts,	
 
 	c)	detailed number of labor hours,	
 
 	d)	Inhouse Warranty Labor Rate,	
 
 	e)	total claim value.	
 
Clause 12 – Page 7/16

 	(v)	Credit	
The Buyer’s account shall be credited with an amount equal to the mutually agreed direct labor costs expended in performing the repair of a Warranted Part and to the direct costs of materials incorporated in said repair.
 
 	-	 	For the determination of direct labor costs only manhours spent on removal from the Aircraft, disassembly, inspection, repair, reassembly, and final inspection, re-installation and test of the Warranted Part and reinstallation thereof on the Aircraft are permissible. Any manhours required for maintenance work concurrently being carried out on the Aircraft or Warranted Part are not included.	
 
 	-	 	The manhours permissible above shall be multiplied by an agreed labor rate of US Dollars ***** paid to the Buyer’s employees whose jobs are directly related to the performance of the repair.	
 
 	-	 	Direct material costs are determined by the prices at which the Buyer acquired such material, excluding any parts and materials used for overhaul and as may be furnished by the Seller at no charge.	
 
 	(vi)	Limitation	
*****
 
 	(vii)	Scrapped Material	
The Buyer shall retain any defective Warranted Part beyond economic repair and any defective part removed from a Warranted Part during repair for a period of either ***** days after the date of completion of repair or ***** after submission of a claim for Inhouse Warranty credit relating thereto, whichever is longer. Such parts shall be returned to the Seller within ***** of receipt of the Seller’s request to that effect.
Notwithstanding the foregoing, the Buyer may scrap any such defective parts which are beyond economic repair and not required for technical evaluation locally with the agreement of the Seller’s local representative.
Scrapped Warranted Parts shall be evidenced by a record of scrapped material certified by an authorized representative of the Buyer.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 12 – Page 8/16

12.1.8	Standard Warranty Transferability	
The warranties provided for in this Clause 12.1 for any Warranted Part shall accrue to the benefit of any airline in revenue service, other than the Buyer, if the Warranted Part enters into the possession of any such airline as a result of a sale, pooling or leasing agreement between such airlines and the Buyer, in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties, and to the extent permitted by any applicable law or regulations.
 
12.1.9	Warranty for Corrected, Replaced or Repaired Warranted Parts	
Whenever any Warranted Part which contains a defect for which the Seller is liable under Clause 12.1 has been corrected, replaced or repaired pursuant to the terms of this Clause 12.1, the period of the Seller’s warranty with respect to such corrected, replaced or repaired Warranted Part whichever may be the case, shall be the remaining portion of the original warranty.
 
12.1.10	Accepted Industry Standard Practices—Normal Wear and Tear	
The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired, and operated in accordance with accepted industry standard practices, all technical documentation and any other instructions issued by the Seller and the Suppliers and the Propulsion Systems Manufacturer and all applicable rules, regulations and directives of relevant Aviation Authorities.
 
12.1.10.1	The Seller’s liability under this Clause 12.1 shall not extend to normal wear and tear nor to:	
 
 	(i)	any Aircraft or component, equipment, accessory or part thereof which has been repaired, altered or modified after Delivery except by the Seller or in a manner approved by the Seller;	
 
 	(ii)	any Aircraft or component, equipment, accessory or part thereof which has been knowingly operated in a damaged state (unless the continuation of such operation was unavoidable);	
 
 	(iii)	any component, equipment, accessory and part from which the trademark, name, part or serial number or other identification marks have been removed;	
Unless in any such case (except in the case of (iii) above) the Buyer submits reasonable evidence to the Seller that the defect did not arise from or was not attributable to any one or more of such causes.
 
Clause 12 – Page 9/16

12.1.11	Survival of the Warranty	
With respect to each Aircraft (including all Warranted Parts), the warranties set forth above shall survive any termination of this Agreement and delivery of the Aircraft.
 
12.2	Seller Service Life Policy	
 
12.2.1	In addition to the warranties set forth in Clause 12.1, the Seller further agrees that should any item listed in Exhibit “F” (“ Item ”), sustain any defect, and which materially impairs the utility of the Item (“ Failure ”), and subject to the general conditions and limitations set forth in Clause 12.2.4, then the provisions of this Clause 12.2 (“ Seller Service Life Policy ”) shall apply.	
 
12.2.2	Periods and Seller’s Undertakings	
The Seller agrees that if a Failure occurs in an Item before the Aircraft in which such Item has been originally installed has completed ***** the Delivery of said Aircraft to the Buyer, whichever shall first occur, the Seller shall at its own discretion and as promptly as practicable and with the Seller’s financial participation as hereinafter provided either:
 
12.2.2.1	design and furnish to the Buyer a correction for such Item with a Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or,	
 
12.2.2.2	replace such Item.	
 
12.2.3	Seller’s Participation in the Costs	
Any part or Item which the Seller is required to furnish to the Buyer under this Service Life Policy in connection with the correction or replacement of an Item shall be furnished to the Buyer with the Seller’s financial participation determined in accordance with the following formula:
*****
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 12 – Page 10/16

12.2.4	General Conditions and Limitations	
 
12.2.4.1	The undertakings given in this Clause 12.2 shall be valid after the period of the Seller’s warranty applicable to an Item under Clause 12.1.	
 
12.2.4.2	The Buyer’s remedy and the Seller’s obligation and liability under this Service Life Policy are subject to the prior compliance by the Buyer with the following conditions:	
 
 	(i)	the Buyer shall maintain log books and other historical records with respect to each Item adequate to enable determination of whether the alleged Failure is covered by this Service Life Policy and if so to define the costs to be borne by the Seller in accordance with Clause 12.2.3;	
 
 	(ii)	the Buyer shall keep the Seller informed of any significant incidents relating to an Aircraft howsoever occurring or recorded;	
 
 	(iii)	the Buyer shall comply with the conditions of Clause 12.1.10;	
 
 	(iv)	the Buyer shall carry out specific structural inspection programs for purposes of monitoring an identified Failure as may be established from time to time by the Seller. Such programs shall be as compatible as possible with the Buyer’s operational requirements and shall be carried out at the Buyer’s expense. Reports relating thereto shall be regularly furnished to the Seller;	
 
Clause 12 – Page 11/16

 	(v)	in the case of any breakage or defect, the Buyer must have reported the same in writing to the Seller within sixty (60) days after any breakage or defect in an Item becomes apparent whether or not said breakage or defect can reasonably be expected to occur in any other aircraft, and the Buyer shall have informed the Seller of the breakage or defect in sufficient detail to enable the Seller to determine whether said breakage or defect is subject to this Service Life Policy.	
 
12.2.4.3	Except as otherwise provided for in this Clause 12.2, any claim under this Service Life Policy shall be administered as provided for in and shall be subject to the terms and conditions of Clause 12.1.6.	
 
12.2.4.4	In the event that the Seller shall have issued a modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller may elect to supply the necessary modification kit free of charge or under a pro rata formula. If such a kit is so offered to the Buyer, then, to the extent of such Failure and any Failures that could ensue therefrom, the validity of the Seller’s commitment under this Clause 12.2 shall be subject to the Buyer’s incorporating such modification in the relevant Aircraft, as promulgated by the Seller and in accordance with the Seller’s instructions, within a reasonable time.	
 
12.2.4.5	This Service Life Policy is neither a warranty, performance guarantee, nor an agreement to modify any Aircraft or airframe components to conform to new developments occurring in the state of airframe design and manufacturing art.	
The Seller’s obligation herein is to furnish only those corrections to the Items or provide replacement therefor as provided for in Clause 12.2.3.
The Buyer’s sole remedy and relief for the non-performance of any obligation or liability of the Seller arising under or by virtue of this Service Life Policy shall be in monetary damages, limited to the amount the Buyer reasonably expends in procuring a correction or replacement for any Item which is the subject of a Failure covered by this Service Life Policy and to which such non-performance is related.
The Buyer hereby waives, releases and renounces all claims to any further damages, direct, incidental or consequential, including loss of profits and all other rights, claims and remedies, arising under or by virtue of this Service Life Policy.
 
12.2.5	Transferability	
The Buyer’s rights under this Clause 12.2 shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise, without the Seller’s prior consent thereto, which shall not be unreasonably withheld and given in writing.
Any unauthorized assignment, sale, transfer or other alienation of the Buyer’s rights under this Service Life Policy shall, as to the particular Aircraft involved, immediately void this Service Life Policy in its entirety.
 
Clause 12 – Page 12/16

12.3	Supplier Product Support Agreements	
Prior to the Delivery of the first Aircraft, the Seller shall provide the Buyer with such warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreement.
 
12.3.1	Definitions	
 
12.3.1.1	“ Supplier ” means any supplier of Supplier Parts.	
 
12.3.1.2	“ Supplier Part ” means any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof as to which there exists a Supplier Product Support Agreement. However, the Propulsion Systems and Buyer Furnished Equipment and other equipment selected by the Buyer to be supplied by Suppliers with whom the Seller has no existing enforceable warranty agreements are not Supplier Parts.	
 
12.3.1.3	“ Supplier Product Support Agreement ” means an agreement between the Seller and a Supplier containing enforceable and transferable warranties and, in the case of landing gear suppliers, service life policies for selected structural landing gear elements.	
 
12.3.2	Supplier’s Default	
 
12.3.2.1	In the event of any Supplier, under any standard warranty obtained by the Seller pursuant to Clause 12.3.1, defaulting in the performance of any material obligation with respect thereto and the Buyer submitting in reasonable time to the Seller reasonable proof that such default has occurred, then Clause 12.1 shall apply to the extent the same would have been applicable had such Supplier Part been a Warranted Part, except that the Supplier’s warranty period as indicated in the Supplier Product Support Agreement shall apply.	
 
12.3.2.2	In the event of any Supplier, under any Supplier Service Life Policy obtained by the Seller pursuant to Clause 12.3.1, defaulting in the performance of any material obligation with respect thereto and the Buyer submitting in reasonable time to the Seller reasonable proof that such default has occurred, then Clause 12.2 shall apply to the extent the same would have been applicable had such Supplier Item been listed in Exhibit F, Seller Service Life Policy, except that the Supplier’s Service Life Policy period as indicated in the Supplier Product Support Agreement shall apply.	
 
12.3.2.3	At the Seller’s request, the Buyer shall assign to the Seller, and the Seller shall be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to and arising by reason of such default and shall provide reasonable assistance to enable the Seller to enforce the rights so assigned.	
 
Clause 12 – Page 13/16

12.4	Interface Commitment	
 
12.4.1	Interface Problem	
If the Buyer experiences any technical problem in the operation of an Aircraft or its systems due to a malfunction, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer, but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft (“ Interface Problem ”), the Seller shall, if so requested by the Buyer, and without additional charge to the Buyer except for transportation of the Seller’s personnel to the Buyer’s facilities, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend such corrective action as may be feasible. The Buyer shall furnish to the Seller all data and information in the Buyer’s possession relevant to the Interface Problem, and shall cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required.
At the conclusion of such investigation the Seller shall promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action.
 
12.4.2	Seller’s Responsibility	
If the Seller determines that the Interface Problem is primarily attributable to the design of a Warranted Part, the Seller shall, if so requested by the Buyer and pursuant to the terms and conditions of Clause 12.1, correct the design of such Warranted Part to the extent of the Seller’s obligation as defined in Clause 12.1.
 
12.4.3	Supplier’s Responsibility	
If the Seller determines that the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller shall, if so requested by the Buyer, reasonably assist the Buyer in processing any warranty claim the Buyer may have against the Supplier.
 
12.4.4	Joint Responsibility	
If the Seller determines that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller shall, if so requested by the Buyer, seek a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier involved.
The Seller shall promptly advise the Buyer of such corrective action as may be proposed by the Seller and any such Supplier. Such proposal shall be consistent with any then existing obligations of the Seller hereunder and of any such Supplier to the Buyer. Such corrective action when accepted by the Buyer shall constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier with respect to such Interface Problem.
 
Clause 12 – Page 14/16

12.4.5	General	
 
12.4.5.1	All requests under this Clause 12.4 shall be directed to both the Seller and the Supplier.	
 
12.4.5.2	Except as specifically set forth in this Clause 12.4, this Clause shall not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Clause 12.	
 
12.4.5.3	All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 shall be deemed to be delivered under this Agreement and shall be subject to the terms, covenants and conditions set forth in this Clause 12.	
 
12.5	Waiver, Release and Renunciation	
THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 12 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE OR DATA DELIVERED UNDER THIS AGREEMENT INCLUDING BUT NOT LIMITED TO:
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE OR DATA DELIVERED UNDER THIS AGREEMENT.	
 
Clause 12 – Page 15/16

THE SELLER AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE OR DATA DELIVERED UNDER THIS AGREEMENT.
FOR THE PURPOSES OF THIS CLAUSE 12.5, “THE SELLER” SHALL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
 
12.6	Duplicate Remedies	
The Seller shall not be obliged to provide any remedy which duplicates any other remedy already provided to the Buyer in respect of the same defect under any part of this Clause 12 as such Clause may be amended, complemented or supplemented by other contractual agreements or by other Clauses of this Agreement.
 
12.7	Negotiated Agreement	
The Buyer specifically recognises that:
 
 	(i)	the Specification has been agreed upon after careful consideration by the Buyer using its judgment as a professional operator of aircraft used in public transportation and as such is a professional within the same industry as the Seller;	
 
 	(ii)	this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer;	
 
 	(iii)	the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the waiver, release and renunciation by the Buyer set forth in Clause 12.5.	
 
Clause 12 – Page 16/16

13	PATENT AND COPYRIGHT INDEMNITY	
 
13.1	Indemnity	
 
13.1.1	Subject to the provisions of Clause 13.2.3, the Seller shall indemnify the Buyer from and against any damages, costs or expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by the Airframe (or any part or software installed therein at Delivery) of:	
 
 	(i)	any British, French, German, Spanish or U.S. patent;	
and
 
 	(ii)	any patent granted by any other country in which any part, component or accessory of the Airframe or any such software is designed or manufactured at the request or direction of the Seller and any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that:	
 
 	(1)	from the time of design of such Airframe, accessory, equipment or part and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof,	
or in the alternative,
 
 	(2)	from such time of design and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the International Convention for the Protection of Industrial Property of March 20, 1883 (“ Paris Convention ”);	
and
 
 	(iii)	in respect of computer software installed on the Aircraft, any copyright, provided that the Seller’s obligation to indemnify shall be limited to infringements in countries which, at the time of infringement, are members of The Berne Union and recognise computer software as a “work” under the Berne Convention.	
 
13.1.2	Clause 13.1.1 shall not apply to	
 
 	(i)	Buyer Furnished Equipment or Propulsion Systems; or	
 
 	(ii)	parts not supplied pursuant to a Supplier Product Support Agreement; or	
 
 	(iii)	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 13 – Page 1/3

13.1.3	In the event that the Buyer is prevented from using the Aircraft (whether by a valid judgement of a court of competent jurisdiction or by a settlement arrived at between claimant, Seller and Buyer), the Seller shall at its expense either:	
 
 	(i)	procure for the Buyer the right to use the same free of charge to the Buyer; or	
 
 	(ii)	replace the infringing part of the Aircraft as soon as possible with a non-infringing substitute complying in all other respects with the requirements of this Agreement.	
 
13.2	Administration of Patent and Copyright Indemnity Claims	
 
13.2.1	If the Buyer receives a written claim or a suit is threatened or commenced against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer shall:	
 
 	(i)	forthwith notify the Seller giving particulars thereof;	
 
 	(ii)	furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to such patent or claim;	
 
 	(iii)	refrain from admitting any liability or making any payment or assuming any expenses, damages, costs or royalties or otherwise acting in a manner prejudicial to the defense or denial of such suit or claim provided always that nothing in this sub-Clause (iii) shall prevent the Buyer from paying such sums as may be required in order to obtain the release of the Aircraft, provided such payment is accompanied by a denial of liability and is made without prejudice;	
 
 	(iv)	at Sellers expense, fully co-operate with, and render all such assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim;	
 
 	(v)	to the extent commercially reasonable, act in such a way as to mitigate damages and / or to reduce the amount of royalties which may be payable as well as to minimise costs and expenses.	
 
Clause 13 – Page 2/3

13.2.2	The Seller shall be entitled either in its own name or on behalf of the Buyer to conduct negotiations with the party or parties alleging infringement and may assume and conduct the defense or settlement of any suit or claim in the manner which, in the Seller’s opinion, it deems proper.	
 
13.2.3	The Seller’s liability hereunder shall be conditional upon the strict and timely compliance by the Buyer with the terms of this Clause and is in lieu of any other liability to the Buyer express or implied which the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.	
 
Clause 13 – Page 3/3

APPENDIX B TO CLAUSE 14
 
14	TECHNICAL DATA AND SOFTWARE SERVICES	
This Clause covers the terms and conditions for the supply of technical data and software services (hereinafter “ Technical Data ”) to support the Aircraft operation.
 
14.1	Scope	
The Technical Data shall be supplied in the English language using the aeronautical terminology in common use.
Range, form, type, format, Air Transport Association (“ ATA ”) / Non ATA compliance, quantity and delivery schedule of the Technical Data to be provided under this Agreement are covered in Exhibit G.
If the Buyer does not use or only partially uses the Technical Data provided pursuant to this Clause, the Buyer shall not be entitled to compensation or credit.
 
14.2	Aircraft Identification for Technical Data	
 
14.2.1	For the customized Technical Data the Buyer agrees to the allocation of fleet serial numbers (“ Fleet Serial Numbers ”) in the form of block of numbers selected in the range from 001 to 999.	
 
14.2.2	The sequence shall not be interrupted except if two (2) different Propulsion Systems or two (2) different Aircraft models are selected.	
 
14.2.3	The Buyer shall indicate to the Seller the Fleet Serial Number allocated to each Aircraft corresponding to the Aircraft rank in the Delivery schedule set forth in Clause 9.1.1 hereof within ***** after execution of this Agreement. The subsequent allocation of such Fleet Serial Numbers to Manufacturer’s Serial Numbers for the purpose of producing customized Technical Data shall not constitute any property, insurable or other interest of the Buyer whatsoever in any Aircraft prior to the Delivery of such Aircraft as provided for in this Agreement.	
The affected customized Technical Data are:
 
 	-	Aircraft Maintenance Manual,	
 
 	-	Illustrated Parts Catalog,	
 
 	-	Trouble Shooting Manual,	
 
 	-	Aircraft Wiring Manual,	
 
 	-	Aircraft Schematics Manual,	
 
 	-	Aircraft Wiring Lists.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 1/21

APPENDIX B TO CLAUSE 14
 
14.3	Integration of Equipment Data	
 
14.3.1	Supplier Equipment	
Information relating to Supplier equipment which is installed on the Aircraft by the Seller shall be introduced into the customized Technical Data to the extent necessary for the comprehension of the systems concerned, at no additional charge to the Buyer for the Technical Data basic issue.
 
14.3.2	Buyer Furnished Equipment	
 
14.3.2.1	The Seller shall introduce Buyer Furnished Equipment data, for equipment which is installed on the Aircraft by the Seller, into the customized Technical Data at no additional charge to the Buyer for the Technical Data basic issue, provided such data is provided in accordance with the conditions set forth in Clauses 14.3.2.2 through 14.3.2.5 hereunder.	
 
14.3.2.2	The Buyer shall supply the data related to Buyer Furnished Equipment to the Seller at least ***** before the scheduled delivery of the customized Technical Data. The Buyer Furnished Equipment data supplied to the Buyer by the Seller shall be in English Language.	
 
14.3.2.3	The supplied Buyer Furnished Equipment data shall be established in compliance with ATA 2200 standard Specification, in the Revision applicable to the corresponding Aircraft type.	
Subsequent revisions of the ATA Specification shall be considered as applicable.
 
14.3.2.4	The Buyer and the Seller shall agree on the requirements for the provision to the Seller of BFE data for “on-aircraft maintenance”, such as but not limited to timeframe, media and format, for integration of such data into Technical Data, with the aim of managing the BFE data integration process in an efficient, expedite and economic manner.	
 
14.3.2.5	The Buyer Furnished Equipment data shall be delivered in digital format (SGML) and/or in Portable Document Format (PDF), as shall have been set forth in the Data Supply/Exchange Agreement.	
 
14.3.2.6	All costs related to the delivery to the Seller of the applicable Buyer Furnished Equipment data shall be borne by the Buyer *****	
 
14.4	Delivery	
 
14.4.1	The Technical Data are delivered on-line and/or off-line, as set forth in Exhibit G hereto.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 2/21

APPENDIX B TO CLAUSE 14
 
14.4.2	For Technical Data not delivered on-line, the Technical Data and corresponding revisions to be supplied by the Seller shall be sent to one address only as advised by the Buyer.	
 
14.4.3	Packing and shipment of the Technical Data and their revisions shall be carried out in consideration of the quickest transportation methods. The shipment shall be Free Carrier (FCA) TOULOUSE, FRANCE and/or Free Carrier (FCA) HAMBURG, FEDERAL REPUBLIC OF GERMANY, as the term Free Carrier (FCA) is defined by publication n° 560 of the International Chamber of Commerce, published in January 2000.	
 
14.4.4	The delivery schedule of the Technical Data shall be phased as mutually agreed to correspond with Aircraft Deliveries. The Buyer agrees to provide ***** notice when requesting a change to the delivery schedule.	
 
14.4.5	It shall be the responsibility of the Buyer to coordinate and satisfy local Aviation Authorities’ needs for Technical Data. Reasonable quantities of such Technical Data shall be supplied by the Seller ***** to the Buyer Free Carrier (FCA) TOULOUSE, FRANCE and/or Free Carrier (FCA) HAMBURG, FEDERAL REPUBLIC OF GERMANY.	
 
14.5	Revision Service	
Unless otherwise specifically stated, revision service shall be provided ***** for a period of *****
Thereafter revision service shall be provided at the standard conditions set forth in the then current Seller’s Customer Services Catalog.
 
14.6	Service Bulletins (SB) Incorporation	
During the period of revision service and upon the Buyer’s request for incorporation, which shall be made within two years after issuance of a Service Bulletin, Seller’s Service Bulletin information shall be incorporated into the Technical Data for the Buyer’s Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. The split effectivity for the corresponding Service Bulletin shall remain in the Technical Data until notification from the Buyer that embodiment has been completed on all the Buyer’s Aircraft. The above is applicable for Technical Data relating to maintenance. For the operational Data only the pre or post Service Bulletin status shall be shown.
 
14.7	Future Developments	
The Seller shall continuously monitor technological developments and apply them to data and document production and methods of transmission where beneficial and economical. The Buyer accepts to consider any new development proposed by the Seller for possible implementation.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 3/21

APPENDIX B TO CLAUSE 14
 
14.8	Technical Data Familiarization	
Upon request by the Buyer, the Seller is ready to provide a ***** Technical Data familiarization training at the Seller’s or at the Buyer’s facilities. If such familiarization is conducted at the Buyers facilities, the Buyer shall reimburse the Seller for all air travel (business class) and living expenses of the representatives of the Seller conducting such familiarization.
 
14.9	Customer Originated Changes (COC)	
 
14.9.1	Buyer originated data may be introduced as COC into the following customized Technical Data:	
 
 	-	Aircraft Maintenance Manual,	
 
 	-	Illustrated Parts Catalog,	
 
 	-	Trouble Shooting Manual,	
 
 	-	Aircraft Wiring Manual,	
 
 	-	Aircraft Schematics Manual,	
 
 	-	Aircraft Wiring Lists,	
 
 	-	Flight Crew Operating Manual,	
 
 	-	Quick Reference Handbook.	
 
14.9.2	COC data shall be established by the Buyer according to the Customer Guide for Customer Originated Changes, as issued by the Seller. The Buyer shall ensure that any such data is in compliance with the requirements of its local Aviation Authorities.	
COC data shall be incorporated by the Seller into all affected customized Technical Data unless the Buyer specifies in writing the documents of its choice into which the COC data shall be incorporated. The customized Technical Data into which the COC data are incorporated shall only show the Aircraft configuration reflecting the COC data and not the configuration before such COC data’s incorporation.
 
14.9.2.1	The Buyer hereby acknowledges and accepts that the incorporation of any COC into the Technical Data issued by the Seller shall be entirely at the Buyer’s risk and that the Seller shall not be required to check any COC data submitted for incorporation.	
Further, the Buyer acknowledges full liability for the effects, including all related costs, which any COC may have on any subsequent Service Bulletins and/or modifications.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 4/21

APPENDIX B TO CLAUSE 14
 
14.9.2.2	THE SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OR LIABILITIES, EXPRESSED OR IMPLIED, ORAL OR WRITTEN, ARISING BY LAW, COURSE OF DEALING OR OTHERWISE, AND WITHOUT LIMITATION ALL WARRANTIES AS TO QUALITY, OPERATION, MERCHANTABILITY, FITNESS FOR ANY INTENDED PURPOSE, AND ALL OTHER CHARACTERISTICS WHATSOEVER, INCLUDING ANY OMISSIONS OR INACCURACIES THEREIN, OF ANY CUSTOMER ORIGINATED CHANGES INCORPORATED INTO THE TECHNICAL DATA ISSUED BY THE SELLER.	
THE FOREGOING DISCLAIMER SHALL ALSO APPLY TO ANY OTHER PORTION OF THE SELLER’S TECHNICAL DATA WHICH MAY BE AFFECTED BY ANY SUCH CUSTOMER ORIGINATED CHANGES.
 
14.9.2.3	In the event of the Seller being required under any court order or settlement to indemnify any third party for injury, loss or damage incurred directly or indirectly as a result of incorporation of any COC into the Technical Data issued by the Seller, the Buyer agrees to reimburse the Seller for all payments or settlements made in respect of such injury, loss or damage including any expenses incurred by the Seller in defending such claims.	
 
14.9.2.4	In the event of the Buyer selling, leasing or otherwise transferring the Aircraft to which the COC data apply, the Buyer hereby agrees that, unless the COC data are removed from the Technical Data at the Buyer’s request and expense prior to such transfer:	
 
 	(i)	the Buyer shall remain fully liable for the COC data and any and all effects of their incorporation, as set forth in this Clause 14.9;	
 
 	(ii)	the Seller may disclose the COC data to the subsequent owner(s) or operator(s) of the transferred Aircraft;	
 
 	(iii)	it shall be the sole responsibility of the Buyer to notify, or cause to be notified, the subsequent owner(s) or operator(s) of the existence of the such COC data in the Technical Data applicable to the corresponding Aircraft.	
The Seller hereby disclaims any and all liabilities whatsoever for the COC data in the event of transfer, sale or lease as set forth hereabove.
 
14.9.3	The incorporation of any COC as aforesaid shall be performed under the conditions specified in the Seller’s then current Customer Services Catalog.	
 
14.10	Software Services	
 
14.10.1	*****	
 
14.10.1.1	In addition to the standard operational manuals, the Seller shall provide to the Buyer software components and databases composing the Performance Engineer’s Programs ( PEP ) for the Aircraft type covered under this Agreement under licence conditions as defined in Appendix A to this Clause.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 5/21

APPENDIX B TO CLAUSE 14
 
14.10.1.2	Use of the PEP shall be limited to ***** The PEP is intended for use on ground only and shall not be embarked on board of the Aircraft.	
 
14.10.1.3	The licence to use the PEP *****	
 
14.10.2	AirN@v and/or ADOC N@vigator Based Consultation	
Certain Technical Data are provided on DVD and/or on line under licence conditions as defined in Appendix A to this Clause.
The affected Technical Data under AirN@v are the following:
 
 	-	Trouble Shooting Manual,	
 
 	-	Aircraft Maintenance Manual,	
 
 	-	Illustrated Parts Catalog (Airframe),	
 
 	-	Aircraft Schematics Manual,	
 
 	-	Aircraft Wiring Lists,	
 
 	-	Aircraft Wiring Manual,	
 
 	-	Electrical Standard Practices Manual,	
 
 	-	Consumable Material List,	
 
 	-	Standards Manual.	
The affected Technical Data covered under an Advanced Consultation Tool based on ADOC N@vigator browser are:
 
 	-	Engineering Documentation Combined Index	
 
 	-	Engineering Drawings Parts Usage	
 
 	-	Engineering Drawings Parts List	
The ***** AirN@v and/or ADOC N@vigator based products *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 6/21

APPENDIX B TO CLAUSE 14
 
14.10.3	Airbus World Customer Portal	
 
14.10.3.1	The Buyer shall be entitled to obtain access to a wide range of information and services, including Technical Data, available in the secure zone of Airbus’ Customer Portal Airbus/World (“ Airbus World ”).	
Access to the secure zone of Airbus/World, which is reserved to Airbus owners and operators (the “ Secure Zone ”), shall be subject to the prior signature by the Buyer of the “General Terms and Conditions of Access to and Use of Airbus Secure Area of Customer Portal” (hereinafter the “ GTC .”).
A description of the Basic Services, which are available to the Buyer in the Secure Zone and are provided to the Buyer free of charge after signature of the GTC, for as long as the Buyer operates the Aircraft, is set forth in Appendix B to this Clause 14.
Furthermore, although part of the data available on Airbus/World is neither sensitive nor confidential and is also available to the general Internet public in the public zone of the portal (the “ Public Zone ”), it is however recommended that for simplicity of access the Buyer find this information in the Secure Zone.
 
14.10.3.2	On-Line Technical Data	
 
14.10.3.2.1	The Technical Data defined in Exhibit “G” as being provided on-line shall be made available to the Buyer through the Secure Zone.	
Such provision shall be ***** accordance with Clause 14.5
 
14.10.3.2.2	The list of the Technical Data available on-line may be extended from time to time.	
For any Technical Data which is or becomes available on-line, the Seller reserves the right to suppress other formats for the concerned Technical Data.
 
14.10.3.3	Access to the Secure Zone shall be granted ***** of the Buyer’s users (including one Buyer Administrator) for the Technical Data related to the Aircraft which shall be operated by the Buyer.	
 
14.10.3.4	For the sake of clarification, it is hereby specified that Technical Data accessed through the Secure Zone—which access shall be covered by terms and conditions set forth in the GTC — shall remain subject to the conditions of this Clause 14.	
In addition, should the Secure Zone provide access to Technical Data in software format, the use of such software shall be further subject to the conditions of Appendix A hereto.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 7/21

APPENDIX B TO CLAUSE 14
 
14.11	Warranties	
 
14.11.1	The Seller warrants that the Technical Data are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain errors or omissions, the sole and exclusive liability of the Seller shall be to take all reasonable and proper steps to, at its option, correct or replace such Technical Data. Notwithstanding the above, no warranties of any kind are given for the Customer Originated Changes, as set forth in Clause 14.9.	
 
14.11.2	THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 14 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:	
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY TECHNICAL DATA DELIVERED HEREUNDER.	
THE SELLER AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT.
 
Clause 14 – Page 8/21

APPENDIX B TO CLAUSE 14
 
FOR THE PURPOSES OF THIS CLAUSE 14.11.2, “THE SELLER” SHALL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
 
14.12	Proprietary Rights	
 
14.12.1	All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Data shall remain with the Seller and/or its Affiliates as the case may be.	
These proprietary rights shall also apply to any translation into a language or languages or media that may have been performed or caused to be performed by the Buyer.
 
14.12.2	Whenever this Agreement provides for manufacturing by the Buyer, the consent given by the Seller shall not be construed as express or implicit approval howsoever neither of the Buyer nor of the manufactured products. The supply of the Technical Data shall not be construed as any further right for the Buyer to design or manufacture any Aircraft or part thereof or spare part.	
 
14.13	Confidentiality	
 
14.13.1	The Technical Data and their content are designated as confidential. All such Technical Data are supplied to the Buyer for the sole use of the Buyer who undertakes not to disclose the contents thereof to any third party (except as necessary in connection with Buyer’s operations or maintenance of an Aircraft and provided such third party has executed the Data Release Agreement (“ DRA ”) issued by the Seller) without the prior written consent of the Seller save as permitted therein or otherwise pursuant to any government or legal requirement imposed upon the Buyer.	
 
14.13.2	In the case of the Seller having authorized the disclosure to third parties either under this Agreement or by an express prior written authorization, the Buyer shall undertake that such third party agree to be bound by the same conditions and restrictions as the Buyer with respect to the disclosed Technical Data.	
 
Clause 14 – Page 9/21

APPENDIX B TO CLALUSE 14
 
APPENDIX A TO CLAUSE 14
LICENCE FOR USE
OF
SOFTWARE
 
Clause 14 – Page 10/21

APPENDIX B TO CLAUSE 14
 
LICENCE FOR USE OF SOFTWARE
 
1.	Definitions	
For the purposes of this licence the following definitions shall apply:
“ Licensor ” means the Seller.
“ Licensee ” means the Buyer.
“ Software ” means the set of programs, configurations, processes, rules and, if applicable, documentation related to the operation of the data processing.
*****
“ Composite Work ” means the work composed of various elements, such as database, software or data, and which necessitates the use of the Software.
“ User Guide ” means the documentation, which may be in electronic format, designed to assist the Licensee to use the Software, ***** or Composite Work, as applicable.
Capitalized terms used herein and not otherwise defined in this Software Licence shall have the meaning assigned thereto in the Agreement.
 
2.	Grant	
The Licensor grants the Licensee the right to use the Software under the conditions set forth below (the “ Software Licence ”). The Software Licence shall also apply to any ***** and/or Composite Work delivered by the Licensor.
 
3.	Personal Licence	
The sole right granted to the Licensee under this Software Licence is the right to use the Software. The Software Licence is personal to the Licensee, for its own internal use, and is non-transferable and non-exclusive.
 
4.	Copies	
Use of the Software is limited to the number of copies delivered by the Licensor to the Licensee and to the medium on which the Software is delivered. No reproduction shall be made without the written consent of the Licensor. It is however agreed that the Licensee is authorized to copy the Software for back-up and archiving purposes. Any copy authorized by the Licensor to be made by the Licensee shall be performed under the sole responsibility of the Licensee. The Licensee agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Licensee makes of the Software.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 11/21

APPENDIX B TO CLAUSE 14
 
5.	Term	
Subject to the Licensee having complied with the terms of this Software Licence, the rights under the Software Licence shall be *****
 
6.	Conditions of Use	
Under the present Software Licence, the Licensee shall:
 
 	•	do its utmost to maintain the Software and the relating documentation in good working condition, in order to ensure the correct operation thereof;	
 
 	•	use the Software in accordance with such documentation and the User Guide, and ensure that the staff using the Software has received the appropriate training;	
 
 	•	use the Software exclusively in the technical environment defined in the applicable User Guide, except as otherwise agreed in writing between the parties (subject to said agreement, decompilation may be exceptionally agreed to by the Licensor in order for the Licensee to obtain the necessary information to enable the Software to function in another technical environment);	
 
 	•	use the Software for its own internal needs and on its network only, when technically possible, and exclusively on the machine referenced and the site declared;	
 
 	•	not alter, reverse engineer, modify or adapt the Software, nor integrate all or part of the Software in any manner whatsoever into another software product;	
 
 	•	when the source code is provided to the Licensee, the Licensee shall have the right to study and test the Software, under conditions to be expressly specified by the Licensor, but in no event shall the Licensee have the right to correct, modify or translate the Software;	
 
 	•	not correct the Software, except that such correction right may exceptionally be granted to the Licensee by the Licensor in writing;	
 
 	•	not translate, disassemble or decompile the Software, nor create a software product derived from the Software;	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 12/21

APPENDIX B TO CLAUSE 14
 
 	•	not attempt to or authorize a third party to discover or re-write the Software source codes in any manner whatsoever;	
 
 	•	not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights provided in the Software by the Licensor;	
 
 	•	not pledge, sell, distribute, grant, sub-licence, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilization of the Software, whether in whole or in part, for the benefit of a third party;	
 
 	•	not permit any third party to use the Software in any manner, including but not limited to, any outsourcing, loan, commercialization of the Software or commercialization by merging the Software into another software or adapting the Software, without prior written consent from the Licensor.	
The Licensor shall be entitled, subject to providing reasonable prior written notice thereof to the Licensee, to come and verify in the Licensee’s facilities whether the conditions specified in the present Software Licence are respected. This shall not however engage the responsibility of the Licensor in any way whatsoever.
 
7.	Training	
In addition to the User Guide provided with the Software, training and other assistance shall be provided upon the Licensee’s request on a chargeable basis.
 
8.	Proprietary Rights	
The Software is proprietary to the Licensor or the Licensor has acquired the intellectual property rights necessary to grant this Software Licence. The copyright and all other proprietary rights in the Software are and shall remain the property of the Licensor.
The Licensor reserves the right to modify any Software at its sole discretion without prior notice to the Licensee.
 
9.	Copyright Indemnity	
The Licensor shall defend and indemnify the Licensee against any claim that the normal use of the Software infringes the intellectual property rights of any third party, provided that the Licensee:
 
 	•	Immediately notifies the Licensor of any such claim;	
 
 	•	Makes no decision or settlement of any claim;	
 
 	•	Allows the Licensor to have sole control over all negotiations for its settlement;	
 
 	•	Gives the Licensor all reasonable assistance in connection therewith.	
 
Clause 14 – Page 13/21

APPENDIX B TO CLAUSE 14
 
Should the Licensee be prevented from using the Software by any enforceable court decision, the Licensor shall at its own costs and at its choice either modify the Software to avoid infringement or obtain for the Licensee the right to use the Software.
 
10.	Confidentiality	
The Software and its contents are designated as confidential. The Licensee undertakes not to disclose the Software or parts thereof to any third party without the prior written consent of the Licensor. In so far as it is necessary to disclose aspects of the Software to the employees, such disclosure is permitted solely for the purpose for which the Software is supplied and only to those employees who need to know the same.
The obligations of the Licensee to maintain confidentiality shall survive the termination of the Software Licence grant for a period of *****
 
11.	Warranty	
The Licensor warrants that the Software is prepared in accordance with the state of art at the date of its conception and shall perform substantially in accordance with its functional and technical specification at the time of delivery. Should the Software be found to contain any nonconformity or defect, the Licensee shall notify the Licensor promptly thereof and the sole and exclusive liability of the Licensor under this Software Licence shall be to correct the same.
THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LICENSOR AND/OR ITS SUPPLIERS AND REMEDIES OF THE LICENSEE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE LICENSEE HEREBY WAIVES, RELEASE AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LICENSOR AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE LICENSEE AGAINST THE LICENSOR, ITS SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY SOFTWARE DELIVERED UNDER THIS SOFTWARE LICENCE INCLUDING BUT NOT LIMITED TO:
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE LICENSOR’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 14/21

APPENDIX B TO CLAUSE 14
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY SOFTWARE DELIVERED HEREUNDER.	
THE LICENSOR AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY SOFTWARE DELIVERED UNDER THIS SOFTWARE LICENCE.
FOR THE PURPOSES OF THIS CLAUSE 11, “THE LICENSOR” SHALL INCLUDE THE LICENSOR, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
The Licensor shall have no liability for data that is entered into the Software by the Licensee and/or used for computation purposes.
 
12.	Liability and Indemnity	
The Software is supplied under the express condition that, except as otherwise provided in this Agreement, the Licensor shall have no liability in contract or in tort arising from or in connection with the use or possession by the Licensee of the Software and that the Licensee shall indemnify and hold the Licensor harmless from and against any liabilities and claims resulting from such use or possession.
 
13.	Excusable Delays	
 
13.1	The Licensor shall not be responsible nor be deemed to be in default on account of delays in delivery or otherwise in the performance of this Software Licence or any part thereof due to causes reasonably beyond Licensor’s or its subcontractors’ control including but not limited to: natural disasters, fires, floods, explosions or earthquakes, epidemics or quarantine restrictions, serious accidents, total or constructive total loss, any act of the government of the country of the Licensee or the governments of the countries of Licensor or its subcontractors, war, insurrections or riots, failure of transportation, communications or services, strikes or labor troubles causing cessation, slow down or interruption of services, inability after due and timely diligence to procure materials, accessories, equipment or parts, failure of a subcontractor or vendor to furnish materials, accessories, equipment or parts due to causes reasonably beyond such subcontractor’s or vendor’s control or failure of the Licensee to comply with its obligations arising out of the present Software Licence. The Licensor shall, as soon as practicable after becoming aware of any delay falling within the provisions of this Clause, notify the Licensee of such delay and of the probable extent thereof and shall, subject to the conditions as hereinafter provided and as soon as practicable after the removal of the cause or causes for delay, resume performance under the Software Licence.	
 
Clause 14 – Page 15/21

APPENDIX B TO CLAUSE 14
 
13.2	Should an event of force majeure last for a period extending beyond ***** the Software Licence shall be automatically terminated, as a matter of right, unless otherwise agreed in writing, without compensation for either the Licensor or the Licensee.	
 
14.	Termination	
In the event of breach of an obligation set forth in this Software Licence by either the Licensor or the Licensee, which is not cured within ***** from the date of receipt of a written notice notifying the breach, the non-breaching party shall be entitled to terminate this Software Licence.
In the event of termination for any cause, the Licensee shall no longer have any right to use the Software and shall return to the Licensor all copies of the Software and any relating documentation together with an affidavit to that effect. In case of breach by the Licensee, the Licensor shall be entitled to retain any amount paid for the ongoing year.
 
15.	General Provisions	
 
15.1	This Software Licence or part thereof shall not be assigned to a third party without the prior written consent of the other party such consent shall not be unreasonably withheld.	
 
15.2	This Software Licence shall be governed by the laws of France. All disputes arising in connection with this Software Licence shall be submitted to the competent courts of Toulouse, France.	
 
15.3	In the event that any provision of this Software Licence should for any reason be held ineffective, the remainder of this Software Licence shall remain in full force and effect. The invalid provision shall be replaced by such valid one as the parties would have chosen had they been aware of such invalidity.	
 
15.4	All notices and requests required or authorized hereunder shall be given in writing either by registered mail (return receipt requested) or by telefax. In the case of any such notice or request being given by registered mail, the date upon which the answerback is recorded by the addressee or, in case of a telefax, the date upon which the answerback is recorded by the sender’s telefax machine, shall be deemed to be the effective date of such notice or request.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 14 – Page 16/21

APPENDIX B TO CLAUSE 14
APPENDIX B TO CLAUSE 14
Airbus/World Customer Portal
SECURE ZONE
BASIC SERVICES
 
Clause 14 – Page 17/21

APPENDIX B TO CLAUSE 14
 
1.	General services	
 
1.1	GCS General Information	
Providing general information such as:
 
 	•	Airbus Abbreviations Dictionary (AAD)	
 
 	•	Airbus Monitored Retrofit Campaign	
 
 	•	Engineering and Technical Services (Contact List)	
 
 	•	Events & Symposium	
 
 	•	On-line Services General Information	
 
 	•	Training Catalogues	
 
 	•	Monthly Service Report	
 
 	•	Tutorials	
 
 	•	Spares Information	
 
 	•	Fast Magazine	
 
 	•	Upgrade Services	
 
1.2	FTP Site	
This service provides access on an ad-hoc basis to specific documents or data that first need to be downloaded onto the user’s local workstation for display and use, after prior arrangement with the corresponding Airbus technical counterpart.
 
1.3	“What is New” facility and E-mail notification	
The “What is New function” allows a user to be informed of new information put On-Line within a specific date range (default value is between user’s last login and “now”).
This facility is applicable to following services:
 
 	-	AIDA (Drawings)	
 
 	-	AOG RG	
 
 	-	CAWA	
 
 	-	ETAS	
 
 	-	General Information	
 
 	-	SPSA	
 
 	-	TPPO	
 
 	-	VIM	
As a complementary service to the “What is New facility”, a subscription to e-mail notification is available for some mainly used documents.
This function provides information of new data on-line, with direct access links, via e-mail, according to the user’s subscription.
 
Clause 14 – Page 18/21

APPENDIX B TO CLAUSE 14
 
2.	Technical Data	
 
2.1	ETDS (Engineering Technical Documentation) service	
The service provides access via a document index to the contents of:
 
 	•	Service Bulletins—all SB in PDF, but SB issued after July 1997 in PDF and SGML	
 
 	•	Technical Follow-Up (TFU)—all	
 
 	•	Modification Information Document (MID)—all	
 
 	•	All Operators Telex (AOT)—all	
 
 	•	Operators Information Telex (OIT)—all	
 
 	•	Flight Operations Telex (FOT)—all	
 
 	•	Service Information Letter (SIL)—all	
 
 	•	Consignes de Navigabilité (CN)—all	
 
 	•	Advisory Directives (AD)—all	
In addition, links between such documents are available through the service.
Documents can be printed or downloaded, depending of their electronic format.
SBs available in SGML format can be downloaded in SGML.
Printing will be based on PDF format.
 
2.2	STDO (Supplier Technical Manuals) service	
The Supplier Technical Manuals service provides an on-line consultation of Suppliers’ component maintenance manuals (CMMv) available in PDF.
It allows access to Suppliers’ CMMs that are effective for the Buyer’s fleet. Through the application interface, users are able to:
 
 	•	Search documents by Aircraft type, ATA references, document type, Supplier code and Part number;	
 
 	•	Access, print and download via the PDF reader plug in (Acrobat Reader) the available release of the Suppliers’ technical documentation.	
 
3.	Spare Parts and Repair	
 
3.1	ARG (AOG and Repair Guide) service	
Access to vendor and repairs stations by P/N.
 
Clause 14 – Page 19/21

APPENDIX B TO CLAUSE 14
 
3.2	ASDS (Airbus Support Data for Supplier) service	
This service offers for all Airbus aircraft:
 
 	•	Part number information such as price, lead-time, manufacturer code, stock status and location	
 
 	•	Part number interchangeability	
 
 	•	Single purchase order status	
 
 	•	Useful information such as contact details, help function and e-mail	
 
 	•	Internet parts ordering	
 
 	•	Information link to selected in-house forwarders	
 
 	•	Support guide and excess inventory list	
 
3.3	VIM (Vendor Information Manual) service	
The service offers:
 
 	•	List of Airbus vendors with location, fax, phones, addresses and contacts	
 
 	•	List of repairs stations	
 
 	•	List of equipment manufactured by the vendors	
 
3.4	SPSA (Supplier Product Support Agreements) service	
Information relative to agreements negotiated between Airbus and Aircraft Equipment Suppliers. DMC and MTBUR are available for the main Suppliers
 
3.5	Spares services	
This service is already available in an autonomous mode through the Spares Portal (http://spares.airbus.com).
The service offers for all AIRBUS aircraft:
 
 	•	Part number information such as price, lead-time, manufacturer code, stock status and location	
 
 	•	Part number interchangeability	
 
 	•	Single purchase order status	
 
 	•	Useful information such as contact details, help function and e-mail	
 
 	•	Internet parts ordering	
 
 	•	Information link to selected in-house forwarders	
 
 	•	Support guide and excess inventory list	
 
Clause 14 – Page 20/21

APPENDIX B TO CLAUSE 14
 
4.	Warranty	
 
4.1	CAWA (Contracts and Warranty Administration) service	
The Warranty Claim Service proposes four main functions:
 
 	•	Warranty claims booking	
 
 	•	Consultation of the warranty claims status	
 
 	•	Consultation of statistics on response time regarding closed/open files	
 
 	•	Consultation of warranty guide	
 
5.	Customize & Deliver	
 
5.1	ACCL (A/C Comparison List) service	
Aircraft configuration comparison list, 6 months and 1 month before Delivery.
 
5.2	CDIS (Customization and Delivery Information) services	
The following service provides access to:
 
 	•	RFC (Request For Change)	
 
 	•	AIR (Aircraft Inspection Report)	
 
 	•	SCN (Specification change Notices)	
 
 	•	CCR (Customer Change Register)	
 
 	•	Concessions	
 
Clause 14 – Page 21/21

APPENDIX A TO CLAUSE 15
 
15	SELLER REPRESENTATIVES	
 
15.1	Customer Support Manager	
 
    	*****	
 
15.2	Customer Services Representatives	
 
15.2.1	The Seller shall provide free of charge the services of Seller customer services representatives (“ Seller’s Representatives ”) acting in an advisory capacity as defined in Appendix A of this Clause 15.	
 
15.2.2	In the event of a need for non-routine technical assistance, the Buyer shall have non-exclusive access to the Seller’s Representatives closest to the Buyer’s main base after the end of the assignment of the Seller’s Representatives referred to in Appendix A of this Clause 15. A list of the contacts for the Seller’s Representatives closest to the Buyer’s main base shall be provided to the Buyer.	
 
15.2.3	The Seller shall cause similar services to be provided by competent representatives of the Propulsion System Manufacturer and by Supplier representatives when necessary and applicable.	
 
15.2.4	The Seller shall provide to the Buyer an annual written accounting of the consumed man-months and any remaining man-month balance. Absent manifest error, such accounting shall be deemed as final and acceptable to the Buyer unless the Seller receives written objection from the Buyer within thirty (30) days of receipt of such accounting.	
 
15.2.5	If requested by the Buyer, Seller Representative services exceeding the allocation specified in Appendix A of this Clause 15 may be provided by the Seller subject to terms and conditions to be mutually agreed.	
 
15.3	Buyer’s Service	
 
15.3.1	From the date of arrival of the first of the Seller’s Representatives and for the duration of the assignment, the Buyer shall provide free of charge a suitable lockable office, conveniently located with respect to the Buyer’s maintenance facilities, with complete office furniture and equipment including access to telephone and facsimile connections for the sole use of the Seller’s Representatives. The Seller shall pay for its telephone and fax invoices.	
 
15.3.2	The Buyer shall reimburse the Seller the costs for the initial and termination assignment travel of the Seller’s Representatives of one (1) confirmed ticket, Business Class, if available, to and from their place of assignment and the airport on the Buyer’s network nearest to TOULOUSE, FRANCE.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Clause 15 – Page 1/3

APPENDIX A TO CLAUSE 15
 
15.3.3	The Buyer shall also reimburse the Seller the costs for air transportation for the annual vacation of the Seller’s Representatives to and from their place of assignment and the airport on the Buyer’s network nearest to TOULOUSE, FRANCE.	
 
15.3.4	Should the Buyer request any of the Seller’s Representatives referred to in Clause 15.2 above, to travel on business to a city other than his usual place of assignment, the Buyer shall be responsible for all related transportation costs and expenses.	
 
15.3.5	The Buyer shall assist the Seller to obtain from the civil authorities of the Buyer’s country those documents which are necessary to permit the Seller’s Representatives to live and work in the Buyer’s country. Failure of the Seller to obtain the necessary documents shall relieve the Seller of any obligation to the Buyer under the provisions of Clause 15.2.	
 
15.3.6	The Buyer shall reimburse to the Seller charges, taxes, duties, imposts or levies of any kind whatsoever, imposed by authorities of the Buyer’s country upon:	
 
 	-	the entry into or exit from the Buyer’s country of the Seller’s Representatives and their families,	
 
 	-	the entry into or the exit from the Buyer’s country of the Seller’s Representatives and their families’ personal property,	
 
 	-	the entry into or the exit from the Buyer’s country of the Seller’s property.	
 
15.4	Withdrawal of the Seller’s Representatives	
The Seller shall have the right to withdraw its assigned Seller Representatives as it sees fit if conditions arise which are in the Seller’s opinion dangerous to their safety or health or prevent them from fulfilling their contractual tasks.
 
15.5	Seller’s Representatives’ Status	
In providing the above technical services, the Seller’s Representatives and other employees are deemed to be acting in an advisory capacity only and at no time shall they be deemed to act as Buyer’s employees or agents, either directly or indirectly.
 
15.6	Indemnities	
INDEMNIFICATION PROVISIONS APPLICABLE TO THIS CLAUSE 15 ARE SET FORTH IN CLAUSE 19.
 
Clause 15 – Page 2/3

APPENDIX A TO CLAUSE 15
 
SELLER REPRESENTATIVE ALLOCATION
The Seller Representative allocation that is provided to the Buyer pursuant to Clause 15.2 is defined hereunder.
 
1	*****	
 
2	*****	
 
3	*****	
 
4	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 15 – Page 3/3

16	TRAINING AND TRAINING AIDS	
 
16.1	General	
This Clause 16 covers the terms and conditions for the supply of training and training aids for the Buyer’s personnel to support the Aircraft operation.
 
16.2	Scope	
 
16.2.1	The range and quantity of training and training aids to be provided ***** under this Agreement are covered in Appendix A to this Clause 16.	
 
16.2.1.1	With respect to Maintenance Training, training courses shall be provided up to ***** ordered under this Agreement.	
 
16.2.1.2	With respect to Flight Operations Training, the quantity of training allocated to each Aircraft shall be provided
up to *****	
 
16.2.2	Unless otherwise agreed by the Seller, in the event that the Buyer should use none or only part of the training or training aids to be provided pursuant to this Clause 16, no compensation or credit of any sort shall be provided.	
 
16.3	Training Organisation / Location	
 
16.3.1	The Seller shall provide training at its training center in Blagnac, France, or in Hamburg, Germany (each the “ Seller’s Training Center ”) or its affiliated training centers in Miami, U.S.A., (the “ Affiliated Training Centers ”).	
 
16.3.2	In the event of the non-availability of facilities or scheduling imperatives making training by the Seller impractical, the Seller shall make arrangements for the provision to the Buyer of such training support elsewhere.	
 
16.3.2.1	Upon the Buyer’s request, the Seller may also provide certain training at a location other than the Seller’s Training Centers or Affiliated Training Centers, including one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 shall be borne by the Buyer.	
 
16.3.2.2	If the training as set forth in Clause 16.3.3.1 above is either an Airbus EASA — Part 147 (for maintenance training) or a Type Rating Training Organisation (TRTO) (for flight operation training) approved course, the Buyer shall provide access to its training facilities to the Seller’s and the relevant Aviation Authorities’ representatives for the necessary approval of such facilities for the training.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 1/22

16.4	Training Courses	
 
16.4.1	Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable brochure describing the various Seller’s training courses (the “ Seller’s Training Course Catalog ”) and shall be scheduled as mutually agreed upon during a training conference (the “ Training Conference ”).	
 
16.4.2	When training is performed by the Seller:	
 
 	(i)	Training courses shall be the Seller’s standard courses as described in the applicable Seller’s Training Course Catalog valid at the time of the execution of the course. The Seller shall be responsible for all training course syllabi, training aids and training equipment necessary for the organisation of the training courses; however, for the purpose of performing training, training equipment does not include aircraft;	
 
 	(ii)	The equipment used for training of flight and maintenance personnel shall not be fully customised, however such equipment and the training curricula used for training of flight and/or maintenance personnel shall be configured in order to obtain the relevant Aviation Authorities’ approval and to support the Seller’s training programs. Training data and documentation shall not be revised;	
 
 	(iii)	Training data and documentation for trainees receiving the training at the Seller’s Training Centers or Affiliated Training Centers shall be free-of-charge. Training data and documentation shall be marked “FOR TRAINING ONLY” and as such are supplied for the sole and express purpose of training;	
 
 	(iv)	Upon the Buyer’s request, the Seller shall collect and pack for consolidated shipment to the Buyer’s facility, all training data and documentation of the Buyer’s trainees attending training at the Seller’s Training Centers or Affiliated Training Centers at no charge to the Buyer;	
 
 	    	The above shipment shall be delivered Free Carrier (“ FCA ”) to the airport closest to the location at which the training actually takes place, as the term Free Carrier (“ FCA ”) is defined by publication N° 560 of the International Chamber of Commerce published in January 2000. Title to and risk of loss of said shipment shall pass to the Buyer upon delivery.	
 
16.4.3	When the Seller’s training courses are provided by the Seller’s instructors, the Seller shall deliver a Certificate of Recognition, a Certificate of Course Completion or an Attestation, as applicable, at the end of any such training course. Any such certificate shall not represent authority or qualification by any Aviation Authorities but may be presented to such Aviation Authorities in order to obtain relevant formal qualification.	
 
Clause 16 – Page 2/22

In the event of the training courses being provided by a training provider selected by the Seller, the Seller shall cause such training provider to deliver a Certificate of Recognition, a Certificate of Course Completion or an Attestation, as applicable, at the end of any such training course. Any such certificate shall not represent authority or qualification by any Aviation Authorities but may be presented to such Aviation Authorities in order to obtain relevant formal qualification.
 
16.4.4	In the event of the Buyer deciding to cancel or re-schedule a training course, if the cancellation is notified between ***** prior to the training, a cancellation charge of ***** shall be applied against the Buyer’s allocation for such training course.	
If the notification occurs less than ***** prior to the training, a cancellation charge of ***** shall be applied against the Buyer’s allocation for such training course.
 
16.5	Prerequisites and Conditions	
 
16.5.1	Training shall be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees shall have the prerequisite knowledge and experience defined in Appendix “B” to this Clause 16.	
The Buyer hereby acknowledges that the Seller’s training courses are “Standard Transition Training Courses” and not “Ab Initio Training Courses”.
The Buyer shall be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.
 
16.5.1.1	The Buyer shall provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to check the trainees’ proficiency and previous professional experience. The Seller shall in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training provided.	
 
16.5.1.2	The Buyer shall further return to the Seller the “Airbus Pre-Training Survey” or the “Maintenance Training Survey” as applicable, detailing the trainees’ associated background at the latest ***** before the start of the training course.	
 
16.5.1.3	In the event of the Buyer having to make a change to the trainees attendance list within the ***** period stated in Clause 16.5.2.2, the Buyer shall immediately inform the Seller thereof and send to the Seller an updated Airbus Pre-Training Survey or Maintenance Training Survey reflecting such change.	
 
16.5.2	Upon the Buyer’s request, the Seller may be consulted to direct the above mentioned trainee(s) through a relevant entry level training program, which shall be at the Buyer’s charge, and, if necessary, to coordinate with competent outside organisations for this purpose. Such consultation shall be held during the Training Conference.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 3/22

In the event of the Seller determining that a trainee lacks the required entry level, following consultation with the Buyer, such trainee shall be withdrawn from the program.
 
16.6	Logistics	
 
16.6.1	Trainees	
 
16.6.1.1 	*****	
 
16.6.1.2	Living and travel expenses for the Buyer’s trainees shall be borne by the Buyer.	
 
16.6.2	Training at External Location—Seller’s Instructors	
*****
In the event of training being provided by the Seller’s instructors at any location other than the Seller’s Training Centers or Affiliated Training Centers at the Buyer’s request or as otherwise detailed in this Clause 16, the Buyer shall reimburse the Seller for all the reasonable expenses related to the assignment of such instructors and their performance of the duties as aforesaid.
 
16.6.2.1	Living Expenses	
Such expenses, covering the entire period from day of departure from to day of return to the Seller’s base, shall include but shall not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. The Buyer shall reimburse the Seller for such expenses at the per diem rate currently used by the Seller for its personnel.
 
16.6.2.2	Air Travel	
The Buyer shall reimburse the Seller the costs for the Seller’s instructors in confirmed business class to and from the Buyer’s designated training site and the Seller’s Training Centers or Affiliated Training Center, as applicable.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 4/22

16.6.2.3	Training Material	
The Buyer shall reimburse the Seller the cost of shipment for the training material needed to conduct such courses.
 
16.6.2.4	Transportation	
The Buyer shall be solely liable for any and all delay in the performance of the training outside of the Seller’s or the Seller’s Affiliated Training Centers associated with any transportation described in this Clause 16.6.
 
16.6.3	Training Equipment Availability—Training at External Location	
Training equipment necessary for course performance at any course location other than the Seller’s Training Centers or Affiliated Training Centers or the facilities of the training provider selected by the Seller shall be provided by the Buyer in accordance with the Seller’s specifications.
 
16.7	Flight Operations Training	
 
16.7.1	Flight Crew Training Course	
 
16.7.1.1	The Seller shall perform a flight crew training course program (standard transition course or a cross crew qualification program as applicable) for the Buyer’s flight crews, each of which shall consist of ***** captain and ***** first officer, as defined in Appendix A to this Clause 16. The training manual used shall be the Seller’s Flight Crew Operating Manual (FCOM), except for base Flight training, for which the Buyer’s customized FCOM shall be used.	
 
16.7.1.2	Base Flight Training	
 
16.7.1.2.1	The Buyer shall use its delivered Aircraft, or any other aircraft operated by the Buyer, for any base flight training, which shall not exceed ***** session of ***** per pilot, according to the related Airbus training course definition.	
 
16.7.1.2.2	In the event of it being necessary to ferry the Buyer’s delivered Aircraft to the location where the base flight training shall take place, the additional flight time required for the ferry flight to and/or from the base training field shall not be deducted from the base flight training allowance.	
However, if the base flight training is performed outside of the zone where the Seller usually performs such training, the ferry flight to the location where the base flight training shall take place shall be performed by a crew composed of the Seller’s and/or the Buyer’s qualified pilots, in accordance with the Aviation Authorities’ regulations related to the place of performance of the base flight training.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 5/22

16.7.2	Flight Crew Line Initial Operating Experience	
 
16.7.2.1	To assist the Buyer with initial operating experience after Delivery of the first Aircraft, the Seller shall provide to the Buyer pilot instructor(s) as defined in Appendix A to this Clause 16.	
 
16.7.2.2	The Buyer shall reimburse the expenses for each such instructor in accordance with Clause 16.6.2. Additional pilot instructors can be provided at the Buyer’s expense and upon conditions to be mutually agreed upon.	
 
16.7.3	Instructor Cabin Attendants’ Familiarization Course	
The Seller shall provide instructor cabin attendants’ course(s) to the Buyer’s cabin attendants, as defined in Appendix A to this Clause 16, at one of the locations defined in Clause 16.3.1.
The instructor cabin attendants’ course, when incorporating the features of the Buyer’s Aircraft, can be given at the earliest two (2) weeks before the Delivery date of the Buyer’s first Aircraft.
 
16.7.4	Performance / Operations Course	
The Seller shall provide performance/operations training for the Buyer’s personnel as defined in Appendix A to this Clause 16.
The available courses are listed in the Seller’s applicable Training Courses Catalog.
 
16.7.5	Transition Type Rating Instructor (TRI) Course	
The Seller shall provide transition type rating instructor (TRI) training for the Buyer’s flight crew instructors as defined in Appendix A to this Clause 16.
This course provides the Buyer’s instructors with the training in flight instruction and synthetic instruction required to instruct on Airbus aircraft.
 
16.7.6	During any and all flights performed in accordance with this Clause 16.7, the Buyer shall bear full responsibility for the aircraft upon which the flight is performed, including but not limited to any required maintenance, all expenses such as fuel, oil or landing fees and the provision of insurance in line with Clause 16.12.	
 
16.8	Maintenance Training	
The Seller shall provide maintenance training for the Buyer’s ground personnel as defined in Appendix A to this Clause 16.
 
Clause 16 – Page 6/22

The available courses are listed in the Seller’s applicable Training Courses Catalog.
The Buyer shall provide the Seller with an attendance list of trainees at the latest ***** before the start of the training course.
The practical training provided in the frame of maintenance training is performed exclusively on the training devices in use in the Seller’s Training Centers or Affiliated Training Centers.
In the event of practical training on aircraft being requested by the Buyer, such practical training can be organized with the assistance of the Seller, in accordance with Clause 16.8.1 hereunder.
 
16.8.1	Practical Training on Aircraft	
If the practical training does not need to be covered by an EASA — Part 147 (or equivalent) certificate, the Seller may assist the Buyer in organizing such practical training on aircraft, at the Buyer’s expense.
In the event of the Buyer requiring a full EASA — Part 147 certificate from the Seller, the practical training on aircraft shall be conducted by the Seller, at the Buyer’s expense, in a EASA — Part 145 facility approved and selected by the Seller.
In the event of the Buyer requiring such practical training to be conducted at the Buyer’s EASA — Part 145 (or equivalent) approved facilities, such training shall be subject to prior approval by the Seller of the facilities at which the training is to be conducted.
The provision of an instructor by the Seller for the practical training shall be deducted from the trainee days allowance defined in Appendix A to this Clause 16, subject to the conditions detailed in Paragraph 3.2 thereof.
The Buyer shall reimburse the expenses for said instructor(s) in accordance with Clause 16.6.2.
 
16.8.2	Line Maintenance Initial Operating Experience Training	
In order to assist the Buyer during the entry into service of the Aircraft, the Seller shall provide to the Buyer maintenance instructor(s) at the Buyer’s base as defined in Appendix A to this Clause 16.
 
16.8.2.1	This line maintenance training shall cover training in handling and servicing of Aircraft, flight crew / maintenance coordination, use of Technical Data and any other activities that may be deemed necessary after Delivery of the first Aircraft.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 7/22

16.8.2.2	The Buyer shall reimburse the expenses for said instructor(s) in accordance with Clause 16.6.2. Additional maintenance instructors can be provided at the Buyer’s expense.	
 
16.9	Supplier and Propulsion System Manufacturer Training	
Upon the Buyer’s request, the Seller shall provide to the Buyer the list of the maintenance and overhaul training courses (the “ Supplier Training Catalog ”) provided by major Suppliers and the applicable Propulsion Systems Manufacturer on their products.
Airbus will ensure that all major Suppliers and the selected propulsion system manufacturer will provide maintenance and overhaul training on their products at appropriate times.
 
16.10	Training Aids for the Buyer’s Training Organisation	
 
16.10.1	The Seller shall provide to the Buyer training aids, consisting of the Airbus Computer Based Training (Airbus CBT) courseware , as used in the Seller’s Training Centers, and the Virtual Aircraft (Walk around and Component Location) , ***** as defined in Appendix A to this Clause 16.	
The Airbus CBT and training aids supplied to the Buyer shall be similar to those used in the Seller’s Training Centers for the training provided for the Buyer. The Airbus CBT and Virtual Aircraft in use at the Seller’s Training Centers are revised on a regular basis and such revision ***** under this Agreement, *****
 
16.10.2	Delivery	
 
16.10.2.1	The Seller shall deliver to the Buyer the Airbus CBT and training aids, as defined in Appendix A to this Clause 16, ***** during the Training Conference.	
 
16.10.2.2	The items supplied to the Buyer pursuant to Clause 16.10.1 shall be delivered FCA Toulouse, Blagnac Airport. Title to and risk of loss of said items shall pass to the Buyer upon delivery.	
 
16.10.2.3	All costs related to transportation and insurance of said items from the FCA point to the Buyer’s facilities shall be at the Buyer’s expense.	
 
16.10.3	Installation of the Airbus CBT	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 8/22

16.10.3.1.1	Before the initial delivery of the Airbus CBT, as defined in Appendix A hereto, the Seller shall provide to up to six (6) trainees of the Buyer, at the Buyer’s facilities, the Airbus CBT Administrator Course, as defined in Appendix C hereto.	
To conduct the course, the workstations and/or “Servers”, as applicable, shall be ready for use and shall comply with the latest “Airbus CBT Workstation Technical Specification” or “Airbus CBT Server Technical Specification”, as applicable (collectively the “ Airbus CBT Technical Specification ”).
 
16.10.3.1.2	The Airbus CBT shall be installed by the Buyer’s personnel, who shall have followed the Airbus CBT Administrator Course. The Seller shall be held harmless from any injury to person and/or damage to property caused by or in any way connected with the handling and/or installation of the Airbus CBT by the Buyer’s personnel.	
 
16.10.3.1	Upon the Buyer’s request and subject to conditions to be quoted by ***** Such assistance shall follow notification in writing that the various components, which shall be in accordance with the specifications defined in the Airbus CBT Technical Specification, are ready for installation and available at the Buyer’s facilities.	
 
16.10.3.2	The Buyer ***** in accordance with Clause 16.6.2, for the Seller’s personnel required at the Buyer’s facilities to conduct the Airbus CBT Administrator Course and/or provide installation assistance.	
 
16.10.4	Licences	
 
16.10.4.1	Airbus CBT License	
 
16.10.4.2	The Seller ***** defined in Appendix C to this Clause 16.	
 
16.10.4.1.2	Supply of sets of CBT Courseware, as defined in Appendix C, and additional to those indicated in Appendix A, as well as any extension to the Licence of such CBT Courseware, shall be subject to terms and conditions to be mutually agreed.	
 
16.10.4.3	Virtual Aircraft License	
 
16.10.4.2.1	The Seller ***** defined in Appendix C to this Clause 16. For the purpose of such Licence, the term “Airbus CBT” as used in such License shall mean the “Virtual Aircraft”.	
 
16.10.4.2.2 	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 9/22

16.10.5	The Seller shall not be responsible for and hereby disclaims any and all liabilities resulting from or in connection with the use by the Buyer of the Airbus CBT, the Virtual Aircraft and any other training aids provided under this Clause 16.10.	
 
16.11	Proprietary Rights	
The Seller’s training data and documentation, Airbus CBT, Virtual Aircraft and training aids are proprietary to the Seller and/or its Affiliates and/or its suppliers and the Buyer agrees not to disclose the content of the courseware or any information or documentation provided by the Seller in relation to training, in whole or in part, to any third party without the prior written consent of the Seller.
 
16.12	Indemnities and Insurance	
INDEMNIFICATION PROVISIONS AND INSURANCE REQUIREMENTS APPLICABLE TO THIS CLAUSE 16 ARE AS SET FORTH IN CLAUSE 19.
THE BUYER WILL PROVIDE THE SELLER WITH AN ADEQUATE INSURANCE CERTIFICATE PRIOR TO ANY TRAINING ON AIRCRAFT.
 
Clause 16 – Page 10/22

APPENDIX “A” TO CLAUSE 16
TRAINING ALLOWANCE
For the avoidance of doubt, all quantities indicated below are the total quantities granted for the whole of the Buyer’s fleet of sixteen (16) Aircraft, unless otherwise specified.
 
1.	FLIGHT OPERATIONS TRAINING	
 
1.1	Flight Crew Training (standard transition course or cross crew qualification (CCQ) as applicable)	
The Seller shall provide flight crew training (standard transition course or CCQ as applicable) ***** of the Buyer’s flight crews *****
 
1.2	Flight Crew Line Initial Operating Experience	
The Seller shall provide to the Buyer pilot instructor(s) *****
 
1.2.1	The ***** of pilot instructors present at any one time *****	
 
1.3	Instructor Cabin Attendants’ Familiarization Course	
The Seller shall provide to the Buyer instructor cabin attendants’ training ***** instructor cabin attendants.
 
1.4	Performance / Operations Course(s)	
 
1.4.1	The Seller shall provide to the Buyer ***** trainee days of performance/ operations training ***** for the Buyer’s personnel.	
 
1.4.2	The above trainee days shall be used solely for the performance/operations training courses as defined in the Seller’s applicable Training Course Catalog.	
 
1.5	Transition Type Rating Instructor (TRI) course	
The Seller shall provide to the Buyer transition type rating instructor training (transition or CCQ, as applicable) ***** of the Buyer’s flight instructors.
 
2.	MAINTENANCE TRAINING	
 
2.1	Maintenance Training Courses	
 
2.1.1	The Seller shall provide to the Buyer ***** trainee days of maintenance training ***** for the Buyer’s personnel.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 11/22

2.1.2	The above trainee days shall be used solely for the Maintenance training courses as defined in the Seller’s applicable Training Courses Catalog.	
 
2.1.3	Within the trainee days allowance in Paragraph 2.1.1 above, the number of Engine Run-up courses shall be limited to *****	
 
2.2	Line Maintenance Initial Operating Experience Training	
The Seller shall provide to the Buyer *****
 
3.	TRAINEE DAYS ACCOUNTING	
Trainee days are counted as follows:
 
3.1	For instruction at the Seller’s Training Centers or Affiliated Training Centers: ***** of instruction for ***** The number of trainees originally registered at the beginning of the course shall be counted as the number of trainees to have taken the course.	
 
3.2	For instruction outside of the Seller’s Training Centers or Affiliated Training Centers: *****	
 
3.3	For practical training, *****	
 
3.4	In the event of training being provided outside of the Seller’s Training Centers or Affiliated Training Centers specifically at the Seller’s request, Paragraph 3.1 hereabove shall be applicable to the trainee days accounting for such training.	
 
4.	TRAINING AIDS FOR BUYER’S TRAINING ORGANISATION	
The Seller shall provide to the Buyer *****:
 
 	-	***** Airbus CBT (flight and/or maintenance) Courseware related to the Aircraft type(s) as covered by this Agreement (including set of CBT Software for flight and set of CBT Software for maintenance). The detailed description of the Airbus CBT shall be provided to the Buyer at the Training Conference;	
 
 	-	***** Virtual Aircraft (Walk around and Component Location) related to the aircraft type (s) as covered in this Agreement.	
 
 	-	***** set of training documentation on CD-ROM;	
 
 	-	***** CD-ROM of cockpit panels for training.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 16 – Page 12/22

APPENDIX B TO CLAUSE 16
 
APPENDIX “B” TO CLAUSE 16
MINIMUM RECOMMENDED QUALIFICATION
IN RELATION TO TRAINING REQUIREMENTS
The prerequisites listed below are the minimum recommended requirements specified for Airbus training. If the appropriate Aviation Authorities or the specific airline policy of the trainee demand greater or additional requirements, they shall apply as prerequisites.
FLIGHT CREW Standard Transition Courses)
Captain prerequisites:
 
 	•	Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations	
 
 	•	Valid and Current Airline Transport Pilot License (ATPLY)	
 
 	•	Previous command experience	
 
 	•	Fluency in English (able to write, read and communicate at an adequately understandable level in English language)	
 
 	•	Jet experience	
 
 	•	Flight time :	
 
 	-	1 500 hours as pilot	
 
 	-	1 000 hours on JAR/FAR/CS 25 aircraft	
 
 	-	200 hours experience as airline, corporate or military transport pilot	
First Officer prerequisites:
 
 	•	Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations	
 
 	•	Aircraft and commercial operations valid and current CPL (Commercial pilot license) with Instrument rating,	
 
 	•	Fluency in English (able to write, read and communicate at an adequately understandable level in English language)	
 
 	•	Jet experience	
 
 	•	Flight time :	
 
 	-	500 hours as pilot	
 
 	-	300 hours on JAR/FAR/CS 25 aircraft	
 
 	-	200 hours experience as airline, corporate or military transport pilot	
If the Trainee does not speak English or is not fluent enough to follow the Standard Transition course, he shall follow the Adapted language transition and provide a translator as indicated by the Seller.
If no Jet experience, both CAPTAIN and/or FIRST OFFICER must follow before entering the transition course, a dedicated “Jet Familiarization entry level course”. Such course(s), if required, shall be at the Buyer’s expense.
 
Clause 16 – Page 13/22

APPENDIX B TO CLAUSE 16
 
First type rating course
This course is designed for Ab initio pilots who do not hold an aircraft type rating on their pilot license
Pilot prerequisites
 
 	•	Valid and current CPL (commercial pilot license)	
 
 	•	Valid and current Instrument Rating on multi engine aircraft	
 
 	•	APTLY written examination	
 
 	•	Fluency in English (able to write, read and communicate at an adequately understandable level in English language)	
 
 	•	Flight experience:	
 
 	-	220 hours as pilot	
 
 	-	100 hours as pilot in command (PIC)	
 
 	-	25 hours on multi engine aircraft (up to 10 hours can be completed in a simulator)	
In addition to the above conditions and in accordance to the JAR Flight Crew Licensing (FCL) and the Airbus Training Policy, a pilot applying for a first type rating must have followed either an approved JAR Multi Crew Cooperation (MCC) program or regulatory equivalent or the “Airbus Entry Level Training (ELT) program” (combined MCC and Jet familiarization course). Such course, if required, shall be at the Buyer’s expense.
CCQ additional prerequisites
In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, both CAPTAIN and FIRST OFFICER must:
 
 	•	be qualified and current on the base aircraft type	
 
 	•	have 150 hours minimum and 3 months minimum of operations on the base aircraft type.	
TRI course additional prerequisites
In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, it is the responsibility of the Buyer to:
 
 	-	select instructor candidate(s) with airmanship and behaviour corresponding to the role and responsibility of an airline instructor	
 
 	-	designate instructor candidate(s) with the Airbus prerequisite, which corresponds to the JAR requirements (ref JAR — FCL 1 — Requirements / Subparts H — Instructor rating (Aeroplane)	
 
Clause 16 – Page 14/22

APPENDIX B TO CLAUSE 16
 
Performance and Operations personnel prerequisites
The Buyer’s performance and operations personnel shall be fluent in English (able to write, read and communicate at an adequately understandable level in English language).
All further detailed prerequisites shall be provided by the Seller to the Buyer during the Training Conference, depending on the type of training course(s) selected by the Buyer.
Maintenance Personnel prerequisites
 
 	•	Fluency in English (understanding of English (able to write, read and communicate at an adequately understandable level in English language) adequate to be able to follow the training (If this is not the case, the Buyer shall assign a minimum of one (1) translator for eight (8) trainees).	
 
 	•	Technical experience in the line or/and base maintenance activity of commercial jet aircraft	
Additional prerequisites for Aircraft Rigging Course
Qualification as line or line and base mechanic on one type of Airbus aircraft family
Additional prerequisites for Maintenance Initial Operating Experience
Qualification as line or line and base mechanic on the concerned Airbus aircraft type (for Course)
Maintenance Training Difference Courses additional prerequisites
In addition to the prerequisites set forth for Maintenance Personnel, the personnel shall be current and operating on the base aircraft
 
Clause 16 – Page 15/22

APPENDIX C TO CLAUSE 16
LICENCE FOR USE OF AIRBUS COMPUTER BASED TRAINING

APPENDIX C TO CLAUSE 16
 
LICENCE FOR USE OF AIRBUS COMPUTER BASED TRAINING (AIRBUS CBT)
 
1.	DEFINITIONS	
 
1.1	For the purpose of this Appendix C to Clause 16, the following definitions shall apply:	
 
1.1.1	“ Airbus CBT ” means the combination of the Airbus CBT Software and the Airbus CBT Courseware.	
 
1.1.2	“ Airbus CBT Courseware ” means the programmed instructions that provide flight crew and maintenance training.	
 
1.1.3	“ Airbus CBT Software ” means the system software that permits the use of the Airbus CBT Courseware.	
 
1.1.4	“ Student / Instructor Mode ” means the mode that allows the Buyer to run the Airbus CBT Courseware.	
 
1.1.5	“ Airbus CBT Administrator Course ” means the training enabling the Buyer to load and use the Airbus CBT either on stand-alone workstations or in a Server mode.	
 
1.1.6	“ Network ”, means the group of the Buyer’s computers connected to each other through cables and allowing the transmission of data and instructions, which can be used by up to fifteen (15) of the Buyer’s computers so linked.	
 
1.1.7	“ Server ” means the computer dedicated to the administration of a Network and on which the Airbus CBT is installed and can be reached through the Network.	
 
1.1.8	“ Technical Specification ” means either the “Airbus CBT Workstation Technical Specification” or the “Airbus CBT Server Technical Specification”, as applicable.	
 
1.1.9	“ Intranet ” means the Buyer’s private and local Network using the same technical protocols as Internet but which is not open to public connection.	
 
1.1.10	“ Extranet ” means the network constituted of an external Intranet, allowing communication between the Buyer and certain defined external entities.	
 
1.1.11	“ User Guide ” means the documentation, which may be in electronic format, designed to assist the Buyer to use the Airbus CBT.	
 
1.2	Capitalised terms used herein and not otherwise defined in this Airbus CBT Licence shall have the meaning assigned thereto in the Agreement.	
 
1.3	Any and all hardware required for the operation of the Airbus CBT is not part of the Airbus CBT and shall be procured under the sole responsibility of the Buyer.	
 
Clause 16 – Page 17/22

APPENDIX C TO CLAUSE 16
 
The Seller shall not be responsible for any incompatibility of such hardware with the Airbus CBT.
 
2.	GRANT	
The Seller grants the Buyer the right, pursuant to the terms and conditions herein, to use the Airbus CBT for the Term of this licence (“ Airbus CBT Licence ”).
 
3.	COPIES	
Use of the Airbus CBT is limited to the number of copies delivered by the Seller to the Buyer and to the medium on which the Airbus CBT is delivered. No reproduction shall be made without the prior written consent of the Seller. Notwithstanding the above, specific rights as detailed hereafter shall be granted for respectively the Airbus CBT Software and the Airbus CBT Courseware.
 
3.1	Airbus CBT Software	
The Buyer shall be permitted to copy the Airbus CBT Software for back-up and archiving purposes and for loading of the Airbus CBT Software exclusively on the Buyer’s workstations or Server, as applicable. In such cases, the Buyer shall advise the Seller in writing of the number of any copies made. Any other copy for any other purpose is strictly prohibited.
 
3.2	Airbus CBT Courseware	
The Buyer shall be permitted to copy the Airbus CBT Courseware for the sole purpose of internal training of the Buyer’s personnel, explicitly such copies shall be used by the Buyer’s employees only on their laptops for training purposes.
In such cases, the Buyer shall advise the Seller in writing of the number of copies made and shall cause its employees to strictly comply with the conditions of use and the confidentiality provisions of this Airbus CBT Licence. In particular, the Buyer’s employees shall agree to use such copy for training purposes only and to make no additional copy. The Buyer shall further ensure that any copy provided to an employee is returned to the Buyer either upon request by the Buyer or upon termination of the employment of the employee. Any other copy for any other purpose is strictly prohibited.
 
3.3	Any copy made by the Buyer shall be performed under the sole responsibility of the Buyer. The Buyer agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Buyer makes of the Airbus CBT Software or the Airbus CBT Courseware. The Seller shall not provide revision service for any copies made.	
 
Clause 16 – Page 18/22

APPENDIX C TO CLAUSE 16
 
4.	TERM	
The rights under this Airbus CBT Licence shall be granted to the Buyer for as long as the Buyer operates the Seller’s Aircraft model to which the Airbus CBT Software and the Airbus CBT Courseware apply (the “ Term ”). At the end of the Term, the Buyer shall return the Airbus CBT and any copies thereof to the Seller, accompanied by a note certifying that the Buyer has returned all existing copies.
 
5.	PERSONAL ON-SITE LICENCE	
The sole right granted to the Buyer under this Airbus CBT Licence is the right to use the Airbus CBT. The Airbus CBT Licence is personal to the Buyer, for its own internal use, and is non-transferable and non-exclusive.
 
6.	CONDITIONS OF USE	
 
6.1	The Buyer shall:	
 
 	-	do its utmost to maintain the Airbus CBT and the relating documentation in good working condition, in order to ensure the correct operation thereof;	
 
 	-	use the Airbus CBT in accordance with such documentation and the User Guide, and ensure that the staff using the Airbus CBT has received the appropriate training;	
 
 	-	use the Airbus CBT exclusively in the technical environment defined in the Technical Specification, except as otherwise agreed in writing between the parties;	
 
 	-	use the Airbus CBT for its own internal needs and on its Network, when technically possible, only and exclusively on the machine referenced and the site declared;	
 
 	-	not transmit the Airbus CBT electronically by any means, nor use the Airbus CBT on either the internet, Intranet or Extranet;	
 
 	-	not alter, reverse engineer, modify or adapt the Airbus CBT, or integrate all or part of the Airbus CBT in any manner whatsoever into another software product;	
 
 	-	not correct the Airbus CBT, except that such correction right may exceptionally be granted to the Buyer by the Seller in writing;	
 
 	-	not translate, disassemble or decompile the Airbus CBT Software or create a software product derived from the Airbus CBT Software;	
 
 	-	not attempt to or authorise a third party to discover or re-write the Airbus CBT source codes in any manner whatsoever;	
 
Clause 16 – Page 19/22

APPENDIX C TO CLAUSE 16
 
 	-	not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights provided in the Airbus CBT by the Seller;	
 
 	-	not pledge, sell, distribute, grant, sub-license, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilisation of the Airbus CBT, whether in whole or in part, for the benefit of a third party;	
 
 	-	not permit any third party to use the Airbus CBT in any manner, including but not limited to, any outsourcing, loan, commercialisation of the Airbus CBT or commercialisation by merging the Airbus CBT into another software or adapting the Airbus CBT, without prior written consent from the Seller.	
The Seller shall be entitled, subject to providing reasonable prior written notice thereof to the Buyer, to come and verify in the Buyer’s facilities whether the conditions specified in this Airbus CBT License are respected. This shall not however commit the responsibility of the Seller in any way whatsoever.
 
6.2	Use of the Airbus CBT Software	
Notwithstanding Clause 6.1 above, the Buyer shall use the Airbus CBT Software for the exclusive purpose of, for the student delivery mode:
 
 	(i)	rostering students for one or several courses syllabi in order to follow students’ progression,	
 
 	(ii)	rearranging courses syllabi or creating new ones using available courseware modules.	
However, the Seller disclaims any responsibility regarding any course(s) that may be modified or rearranged by the Buyer.
 
6.3	Use of the Airbus CBT Courseware	
Notwithstanding Clause 5 above, the Buyer shall use the Airbus CBT Courseware for the exclusive purpose of performing training of its personnel, or of third party personnel contracted to perform maintenance work on the Buyer’s Aircraft on behalf of the Buyer. Such training shall be performed exclusively at the Buyer’s facility or at a subcontractor’s facility if performed by Buyer’s personnel and for the Buyer’s personnel.
 
7.	PROPRIETARY RIGHTS AND NON DISCLOSURE	
The Airbus CBT Software and Airbus CBT Courseware, the copyrights and any and all other author rights, intellectual, commercial or industrial proprietary rights of whatever nature in the Airbus CBT Software and Airbus CBT Courseware are and shall remain with the Seller and/or its Affiliates or suppliers, as the case may
 
Clause 16 – Page 20/22

APPENDIX C TO CLAUSE 16
 
be. The Airbus CBT Software and Airbus CBT Courseware and their contents are designated as confidential. The Buyer shall not take any commercial advantage by copy or presentation to third parties of the Airbus CBT Software, the documentation, the Airbus CBT Courseware, and/or any rearrangement, modification or copy thereof.
The Buyer acknowledges the Seller’s proprietary rights in the Airbus CBT and undertakes not to disclose the Airbus CBT Software or Airbus CBT Courseware or parts thereof or their contents to any third party without the prior written consent of the Seller. Insofar as it is necessary to disclose aspects of the Airbus CBT Software and Airbus CBT Courseware to the Buyer’s personnel, such disclosure is permitted only for the purpose for which the Airbus CBT Software and Airbus CBT Courseware are supplied to the Buyer under the present Airbus CBT Licence.
 
8.	WARRANTY	
 
8.1	The Seller warrants that the Airbus CBT is prepared in accordance with the state of art at the date of its conception. Should the Airbus CBT be found to contain any non-conformity or defect, the Buyer shall promptly notify the Seller thereof and the sole and exclusive liability of the Seller under this Clause 8.1 shall be to correct the same at its own expense.	
 
8.2	THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THE AIRBUS CBT LICENCE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN THE AIRBUS CBT DELIVERED UNDER THIS AGREEMENT INCLUDING BUT NOT LIMITED TO:	
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
Clause 16 – Page 21/22

APPENDIX C TO CLAUSE 16
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR THE AIRBUS CBT DELIVERED HEREUNDER.	
THE SELLER AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN THE AIRBUS CBT DELIVERED UNDER THIS AGREEMENT.
FOR THE PURPOSES OF THIS CLAUSE 8.2, “THE SELLER” SHALL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
 
9.	Copyright Indemnity	
The Licensor shall defend and indemnify the Licensee against any claim that the normal use of the Software infringes the intellectual property rights of any third party, provided that the Licensee:
 
 	•	Immediately notifies the Licensor of any such claim;	
 
 	•	Makes no decision or settlement of any claim;	
 
 	•	Allows the Licensor to have sole control over all negotiations for its settlement;	
 
 	•	Gives the Licensor all reasonable assistance in connection therewith.	
Should the Licensee be prevented from using the Software by any enforceable court decision, the Licensor shall at its own costs and at its choice either modify the Software to avoid infringement or obtain for the Licensee the right to use the Software.
 
Clause 16 – Page 22/22

Appendix 1.1 to Exhibit A
STANDARD SPECIFICATION Ref. ***** 
All prices are in USD at Delivery Conditions *****

EPAC Ref.	  	Title	  	Price per Aircraft
USD D.C. *****	 	
	  	Introduction of A319-100 Standard Specification at *****	  	 	*****	  	
		
ATA 02	  	Certification	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.12.*****	  	*****	  	 	*****	  	
02.12.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.40.*****	  	*****	  	 	*****	  	
		
ATA 03	  	Weights	  	
03.20.*****	  	*****	  	 	*****	  	
03.20.*****	  	*****	  	 	*****	  	
		
ATA 11	  	Placards and markings	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.1 to Exhibit A

ATA 21	  	Air conditioning	  	
21.27.*****	  	*****	  	 	*****	  	
21.27.*****	  	*****	  	 	*****	  	
21.30.*****	  	*****	  	 	*****	  	
21.50.*****	  	*****	  	 	*****	  	
		
ATA 22	  	Auto flight	  	
22.70. *****	  	*****	  	 	*****	  	
		
ATA 23	  	Communications	  	
23.73.*****	  	*****	  	 	*****	  	
23.00.*****	  	*****	  	 	*****	  	
23.11.*****	  	*****	  	 	*****	  	
23.13.*****	  	*****	  	 	*****	  	
23.50.*****	  	*****	  	 	*****	  	
23.51.*****	  	*****	  	 	*****	  	
23.71.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
    *** **	  	*****	  	 	*****	  	
		
ATA 24	  	Electrical power	  	
24.00.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
		
ATA 25	  	Cabin & cockpit	  	
    *****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
25.24.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
25.50.*****	  	*****	  	 	*****	  	
25.61.*****	  	*****	  	 	*****	  	
25.45.*****	  	*****	  	 	*****	  	
25.28.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.1 to Exhibit A

25.35.*****	  	*****	  	 	*****	  	
25.45.*****	  	*****	  	 	*****	  	
25.67.*****	  	*****	  	 	*****	  	
25.28.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
		
ATA 26	  	Fire protection	  	
26.21.*****	  	*****	  	 	*****	  	
		
ATA 27	  	Flight Controls	  	
27.92. *****	  	*****	  	 	*****	  	
		
ATA 29	  	Hydraulic Power	  	
29.10.*****	  	*****	  	 	*****	  	
29.21.*****	  	*****	  	 	*****	  	
		
ATA 30	  	Ice and Rain Protection	  	
30.11.*****	  	*****	  	 	*****	  	
		
ATA 31	  	Indicating/Recording	  	
31.33.*****	  	*****	  	 	*****	  	
31.33.*****	  	*****	  	 	*****	  	
31.52.*****	  	*****	  	 	*****	  	
31.60.*****	  	*****	  	 	*****	  	
		
ATA 32	  	Landing gear	  	
32.00.*****	  	*****	  	 	*****	  	
32.10.*****	  	*****	  	 	*****	  	
32.40.*****	  	*****	  	 	*****	  	
32.41.*****	  	*****	  	 	*****	  	
32.41.*****	  	*****	  	 	*****	  	
32.48.*****	  	*****	  	 	*****	  	
		
ATA 33	  	Lights	  	
33.50.*****	  	*****	  	 	*****	  	
		
ATA 34	  	Navigation	  	
34.10.*****	  	*****	  	 	*****	  	
34.13.*****	  	*****	  	 	*****	  	
34.13.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.1 to Exhibit A

34.20.*****	  	*****	  	 	*****	  	
34.41.*****	  	*****	  	 	*****	  	
34.42.*****	  	*****	  	 	*****	  	
34.42.*****	  	*****	  	 	*****	  	
34.43.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.50.*****	  	*****	  	 	*****	  	
34.58.*****	  	*****	  	 	*****	  	
		
ATA 35	  	Oxygen	  	
35.11.*****	  	*****	  	 	*****	  	
35.20.*****	  	*****	  	 	*****	  	
35.21.*****	  	*****	  	 	*****	  	
35.31.*****	  	*****	  	 	*****	  	
		
ATA 36	  	Pneumatic	  	
36.110.*****	  	*****	  	 	*****	  	
		
ATA 38	  	Water/Waste	  	
38.41.*****	  	*****	  	 	*****	  	
38.10.*****	  	*****	  	 	*****	  	
		
ATA 46	  	ATSU	  	
46.21.*****	  	*****	  	 	*****	  	
		
ATA 49	  	APU	  	
49.00.*****	  	*****	  	 	*****	  	
		
ATA 51	  	Structure	  	
51.22.*****	  	*****	  	 	*****	  	
		
ATA 52	  	Doors	  	
52.51.*****	  	*****	  	 	*****	  	
		
ATA 55	  	Stabilizers	  	
55.30.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.1 to Exhibit A

ATA 56	 	Windows	  	
56.10.*****	 	*****	 	 	*****	  	
56.10.*****	 	*****	 	 	*****	  	
		
ATA 72	 	Engines	  	
72.00.*****	 	*****	 	 	*****	  	
			
	 	TOTAL USD per Aircraft D.C. *****	 	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.2 to Exhibit A
STANDARD SPECIFICATION Ref. ***** 
All prices are in USD at Delivery Conditions *****

EPAC Ref.	  	Title	  	Price per Aircraft
USD D.C. *****	 	
	  	Introduction of A320-200 Standard Specification at *****	  	 	*****	  	
		
ATA 02	  	Certification	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
2.12.*****	  	*****	  	 	*****	  	
02.12.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.40.*****	  	*****	  	 	*****	  	
		
ATA 03	  	Weights	  	
03.20.*****	  	*****	  	 	*****	  	
03.20.*****	  	*****	  	 	*****	  	
		
ATA 11	  	Placards and markings	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.2 to Exhibit A

ATA 21	  	Air conditioning	  	
1.27.*****	  	*****	  	 	*****	  	
21.27.*****	  	*****	  	 	*****	  	
21.30.*****	  	*****	  	 	*****	  	
21.50.*****	  	*****	  	 	*****	  	
		
ATA 22	  	Auto flight	  	
22.70.*****	  	*****	  	 	*****	  	
		
ATA 23	  	Communications	  	
23.73.*****	  	*****	  	 	*****	  	
23.00.*****	  	*****	  	 	*****	  	
23.11.*****	  	*****	  	 	*****	  	
23.13.*****	  	*****	  	 	*****	  	
23.50.*****	  	*****	  	 	*****	  	
23.51.*****	  	*****	  	 	*****	  	
23.71.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
		
ATA 24	  	Electrical power	  	
24.00.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
		
ATA 25	  	Cabin & cockpit	  	
	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
25.24.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
25.50.*****	  	*****	  	 	*****	  	
25.61.*****	  	*****	  	 	*****	  	
25.45.*****	  	*****	  	 	*****	  	
25.28.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.2 to Exhibit A

25.35.*****	  	*****	  	*****	
25.45.*****	  	*****	  	*****	
25.67.*****	  	*****	  	*****	
*****	  	*****	  	*****	
25.28.*****	  	*****	  	*****	
	  	*****	  	*****	
		
ATA 26	  	Fire protection	
26.21.*****	  	*****	  	*****	
		
ATA 27	  	Flight Controls	
27.92.*****	  	*****	  	*****	
		
ATA 29	  	Hydraulic Power	
29.10.*****	  	*****	  	*****	
29.21.*****	  	*****	  	*****	
		
ATA 30	  	Ice and Rain Protection	
30.11.*****	  	*****	  	*****	
		
ATA 31	  	Indicating/Recording	
31.33.*****	  	*****	  	*****	
31.33.*****	  	*****	  	*****	
31.52.*****	  	*****	  	*****	
31.60.*****	  	*****	  	*****	
		
ATA 32	  	Landing gear	
32.00.*****	  	*****	  	*****	
32.10.*****	  	*****	  	*****	
32.40.*****	  	*****	  	*****	
32.41.*****	  	*****	  	*****	
32.41.*****	  	*****	  	*****	
32.48.*****	  	*****	  	*****	
		
ATA 33	  	Lights	
33.50.*****	  	*****	  	*****	
		
ATA 34	  	Navigation	
34.10.*****	  	*****	  	*****	
34.13.*****	  	*****	  	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.2 to Exhibit A

34.13.*****	  	*****	  	 	*****	  	
34.20.*****	  	*****	  	 	*****	  	
34.41.*****	  	*****	  	 	*****	  	
34.42.*****	  	*****	  	 	*****	  	
34.42.*****	  	*****	  	 	*****	  	
34.43.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.50.*****	  	*****	  	 	*****	  	
34.58.****	  	*****	  	 	*****	  	
		
ATA 35	  	Oxygen	  	
3.11.*****	  	*****	  	 	*****	  	
35.20.*****	  	*****	  	 	*****	  	
35.21.*****	  	*****	  	 	*****	  	
35.31.*****	  	*****	  	 	*****	  	
		
ATA 36	  	Pneumatic	  	
36.110.*****	  	*****	  	 	*****	  	
		
ATA 38	  	Water/Waste	  	
38.41.*****	  	*****	  	 	*****	  	
38.10.*****	  	*****	  	 	*****	  	
		
ATA 46	  	ATSU	  	
46.21.*****	  	*****	  	 	*****	  	
		
ATA 49	  	APU	  	
9.00.*****	  	*****	  	 	*****	  	
		
ATA 51	  	Structure	  	
51.22.*****	  	*****	  	 	*****	  	
		
ATA 52	  	Doors	  	
52.51.*****	  	*****	  	 	*****	  	
		
ATA 55	  	Stabilizers	  	
55.30.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.2 to Exhibit A

ATA 56	  	Windows	
56.10.*****	  	*****	  	*****	
56.10.*****	  	*****	  	*****	
		
ATA 72	  	Engines	
72.00.*****	  	*****	  	*****	
			
	  	TOTAL USD per Aircraft D.C. *****	  	***** 	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.3 to Exhibit A
STANDARD SPECIFICATION Ref. *****
All prices are in USD at Delivery Conditions *****

EPAC Ref.	  	Title	  	Price per Aircraft
USD D.C.*****	 	
	  	Introduction of A321-200 Standard Specification at *****	  	 	*****	  	
		
ATA 02	  	Certification	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.10.*****	  	*****	  	 	*****	  	
02.12.*****	  	*****	  	 	*****	  	
02.12.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.35.*****	  	*****	  	 	*****	  	
02.40.*****	  	*****	  	 	*****	  	
			
ATA 03	  	Weights	  				
03.20.*****	  	*****	  	 	*****	  	
			
ATA 11	  	Placards and markings	  				
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.00.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.30.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
11.20.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.3 to Exhibit A

			
ATA 21	  	Air conditioning	  				
21.27.*****	  	*****	  	 	*****	  	
21.27.*****	  	*****	  	 	*****	  	
21.30.*****	  	*****	  	 	*****	  	
21.50.*****	  	*****	  	 	*****	  	
			
ATA 22	  	Auto flight	  				
22.70.*****	  	*****	  	 	*****	  	
			
ATA 23	  	Communications	  				
23.73.*****	  	*****	  	 	*****	  	
23.00.*****	  	*****	  	 	*****	  	
23.11.*****	  	*****	  	 	*****	  	
23.13.*****	  	*****	  	 	*****	  	
23.50.*****	  	*****	  	 	*****	  	
23.51.*****	  	*****	  	 	*****	  	
23.71.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
23.36.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
			
ATA 24	  	Electrical power	  				
24.00.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
			
ATA 25	  	Cabin & cockpit	  				
    *****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
25.24.*****	  	*****	  	 	*****	  	
    *****	  	*****	  	 	*****	  	
25.50.*****	  	*****	  	 	*****	  	
25.61.*****	  	*****	  	 	*****	  	
25.45.*****	  	*****	  	 	*****	  	
25.28.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
25.35.*****	  	*****	  	 	*****	  	
25.36.*****	  	*****	  	 	*****	  	
25.45.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.3 to Exhibit A

25.67.*****	  	*****	  	 	*****	  	
25.28.*****	  	*****	  	 	*****	  	
	  	*****	  	 	*****	  	
		
ATA 26	  	Fire protection	  	
26.21.*****	  	*****	  	 	*****	  	
		
ATA 27	  	Flight Controls	  	
27.92.*****	  	*****	  	 	*****	  	
			
ATA 29	  	Hydraulic Power	  				
29.10.*****	  	*****	  	 	*****	  	
29.21.*****	  	*****	  	 	*****	  	
		
ATA 30	  	Ice and Rain Protection	  	
30.11.*****	  	*****	  	 	*****	  	
		
ATA 31	  	Indicating/Recording	  	
31.33.*****	  	*****	  	 	*****	  	
31.33.*****	  	*****	  	 	*****	  	
31.52.*****	  	*****	  	 	*****	  	
31.60.*****	  	*****	  	 	*****	  	
		
ATA 32	  	Landing gear	  	
32.00.*****	  	*****	  	 	*****	  	
32.10.*****	  	*****	  	 	*****	  	
32.40.*****	  	*****	  	 	*****	  	
32.41.*****	  	*****	  	 	*****	  	
32.41.*****	  	*****	  	 	*****	  	
32.48.*****	  	*****	  	 	*****	  	
		
ATA 33	  	Lights	  	
33.50.*****	  	*****	  	 	*****	  	
		
ATA 34	  	Navigation	  	
34.10.*****	  	*****	  	 	*****	  	
34.13.*****	  	*****	  	 	*****	  	
34.13.*****	  	*****	  	 	*****	  	
34.20.*****	  	*****	  	 	*****	  	
34.41.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.3 to Exhibit A

34.42.*****	  	*****	  	 	*****	  	
34.42.*****	  	*****	  	 	*****	  	
34.41*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.48.*****	  	*****	  	 	*****	  	
34.50.*****	  	*****	  	 	*****	  	
34.58.*****	  	*****	  	 	*****	  	
		
ATA 35	  	Oxygen	  	
35.11.*****	  	*****	  	 	*****	  	
35.20.*****	  	*****	  	 	*****	  	
35.5.*****	  	*****	  	 	*****	  	
35.31.*****	  	*****	  	 	*****	  	
		
ATA 36	  	Pneumatic	  	
36.110.*****	  	*****	  	 	*****	  	
		
ATA 38	  	Water/Waste	  	
38.41.*****	  	*****	  	 	*****	  	
38.10.*****	  	*****	  	 	*****	  	
		
ATA 46	  	ATSU	  	
46.21.*****	  	*****	  	 	*****	  	
		
ATA 49	  	APU	  	
49.00.*****	  	*****	  	 	*****	  	
		
ATA 51	  	Structure	  	
51.22.*****	  	*****	  	 	*****	  	
		
ATA 52	  	Doors	  	
52.51.*****	  	*****	  	 	*****	  	
		
ATA 55	  	Stabilizers	  	
55.30.*****	  	*****	  	 	*****	  	
		
ATA 56	  	Windows	  	
56.10.*****	  	*****	  	 	*****	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Appendix 1.3 to Exhibit A

56.10.*****	  	*****	  	 	*****	  	
		
ATA 72	  	Engines	  	
72.00.*****	  	*****	  	 	*****	  	
			
	  	TOTAL USD per Aircraft D.C. *****	  	 	$1,348,800.00	  	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

17	EQUIPMENT SUPPLIER PRODUCT SUPPORT	
 
a)	Equipment Supplier Product Support Agreements	
 
17.1.1	The Seller has obtained enforceable and transferable product support agreements from Suppliers of Seller Furnished Equipment listed in the Specification.	
 
17.1.2	These agreements are based on the “ World Airlines Suppliers Guide ” and include Supplier commitments as contained in the “ Supplier Product Support Agreements ” which include the following provisions:	
 
17.1.2.1	Technical data and manuals required to operate, maintain, service and overhaul the Supplier Parts. Such technical data and manuals shall be prepared in accordance with the applicable provisions of ATA Specification including revision service and be published in the English language. The Seller shall recommend that software data, where applicable, be supplied in the form of an appendix to the Component Maintenance Manual, such data shall be provided in compliance with the applicable ATA Specification.	
 
17.1.2.2	Warranties and guarantees including standard warranties. In addition, landing gear Suppliers shall provide service life policies for selected structural landing gear elements.	
 
17.1.2.3	Training to ensure efficient operation, maintenance and overhaul of the Supplier Parts for the Buyer’s instructors, shop and line service personnel.	
 
17.1.2.4	Spares data in compliance with ATA 200/2000 Specification, initial provisioning recommendations, spare parts and logistic service including routine and expedited deliveries.	
 
17.1.2.5	Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier Parts as well as required tooling and spares provisioning.	
 
b)	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 17 – Page 1/1

18	BUYER FURNISHED EQUIPMENT	
 
c)	Administration	
 
18.1.1	***** the Seller shall install on each Aircraft those items of equipment which are identified in the Specification as being furnished by the Buyer (“ Buyer Furnished Equipment ” or “ BFE ”), provided that they are referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at time of ordering of the concerned BFE.	
The Seller shall advise the Buyer of the dates by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition including the description of the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer shall furnish such detailed description and information by the dates so specified. Such information, dimensions and weights shall not thereafter be revised unless authorised by a Specification Change Notice.
The Seller shall also furnish in due time to the Buyer a schedule of dates and indication of shipping addresses for delivery of BEE and, where requested by the Seller, additional spare BFE to permit installation in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Buyer shall provide such equipment by such dates in a serviceable condition, in order to allow performance of any assembly, test, or acceptance process in accordance with the industrial schedule.
The Buyer shall also cause to provide, when requested by the Seller, at AIRBUS FRANCE S.A.S. works in TOULOUSE (FRANCE) and/or at AIRBUS DEUTSCHLAND GmbH, Division Hamburger Flugzeugbau Works in HAMBURG (FEDERAL REPUBLIC OF GERMANY) adequate field service including support from BFE suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.
 
18.1.2	The Seller shall be entitled to refuse any item of BFE which it considers incompatible with the Specification, the above mentioned engineering definition or the certification requirements.	
 
18.1.3	The BFE shall be imported into FRANCE or into the FEDERAL REPUBLIC OF GERMANY by the Buyer under a suspensive customs system (“ Régime de l’entrepôt industriel pour fabrication coordonnée ” or “ Zollverschluss ”) without application of any French or German tax or customs duty, and shall be Delivered Duty Unpaid (DDU) according to the Incoterms definition.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 18 – Page 1/3

Shipping Addresses:
AIRBUS FRANCE S.A.S.
316 Route de Bayonne
31300 TOULOUSE
FRANCE
or
AIRBUS DEUTSCHLAND GmbH
Division Hamburger Flugzeugbau
Kreetslag 10
21129 HAMBURG
FEDERAL REPUBLIC OF GERMANY
as provided in Clause 18.1.
 
18.1.4	*****	
 
d)	Aviation Authorities’ Requirements	
The Buyer is responsible for, at its expense, and warrants that BFE shall be manufactured by a qualified supplier, shall meet the requirements of the applicable Specification, shall comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, shall be approved by the Aviation Authorities delivering the Export Certificate of Airworthiness and by the Buyer’s Aviation Authority for installation and use on the Aircraft at the time of Delivery of such Aircraft.
 
e)	Buyer’s Obligation and Seller’s Remedies	
 
18.1.5	Any delay or failure in complying with the foregoing warranty or in providing the descriptive information or service representatives mentioned in Clause 18.1 or in furnishing the BFE in serviceable condition at the requested delivery date or in obtaining any required approval for such equipment under the above mentioned Aviation Authorities regulations may delay the performance of any act to be performed by the Seller, and cause the Final Price of the Aircraft to be adjusted in accordance with the updated delivery schedule and to include in particular the amount of the Seller’s additional costs, attributable to such delay or failure such as storage, taxes, insurance and costs of out-of-sequence installation.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 18 – Page 2/3

18.1.6	Further, in any such event, the Seller may:	
 
 	(i)	select, purchase and install an equipment similar to the involved one, in which event the Final Price of the affected Aircraft shall also be increased by the purchase price of such equipment plus reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and if so required and not already provided for in the price of the Aircraft for adjustment and calibration; or	
 
 	(ii)	if the BFE shall be so delayed by more than ***** or unapproved within ***** deliver the Aircraft without the installation of such equipment, notwithstanding the terms of Clause 7 insofar as it may otherwise have applied, and the Seller shall thereupon be relieved of all obligations to install such equipment. The Buyer may also elect to have the Aircraft so delivered.	
 
f)	Title and Risk of Loss	
Title to and risk of loss of any BFE shall at all times remain with the Buyer except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) shall be with the Seller for as long as such BFE shall be under the care, custody and control of the Seller.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 18 – Page 3/3

19	INDEMNIFICATION AND INSURANCE	
 
g)	Indemnities Relating to Inspection, Technical Acceptance Process and Ground Training	
 
19.1.1	The Seller shall, except in case of gross negligence or wilful misconduct of the Buyer, its directors, officers, agents or employees, be solely liable for and shall indemnify and hold harmless the Buyer, its Affiliates and each of their respective directors, officers, agents, employees and insurers from and against all liabilities, claims, damages, costs and expenses (including legal expenses and attorney fees) in respect of:	
 
 	(i)	loss of, or damage to, the Seller’s property;	
 
 	(ii)	injury to, or death of, the directors, officers, agents or employees of the Seller;	
 
 	(iii)	any damage caused by the Seller to third parties arising out of, or in any way connected with, any ground check, check or controls under Clause 6 or Clause 8 of this Agreement, the Seller Representative Services and/or Ground Training Services; and	
 
 	(iv)	any damage caused by the Buyer and/or the Seller to third parties arising out of, or in any way connected with, technical acceptance flights under Clause 8 of this Agreement.	
 
19.1.2	The Buyer shall, except in case of gross negligence or wilful misconduct of the Seller, its directors, officers, agents or employees, be solely liable for and shall indemnify and hold harmless the Seller, its Affiliates and each of their respective directors, officers, agents, employees, sub-contractors and insurers from and against all liabilities, claims, damages, costs and expenses (including legal expenses and attorney fees) in respect of:	
 
 	(i)	loss of, or damage to, the Buyer’s property;	
 
 	(ii)	injury to, or death of the directors, officers, agents or employees of the Buyer; and	
 
 	(iii)	any damage caused by the Buyer to third parties arising out of, or in any way connected with, any ground check, check or controls under Clause 6 or Clause 8 of this Agreement, the Seller Representative Services and/or Ground Training Services.	
 
h)	Indemnities Relating to Training on Aircraft after Delivery	
 
19.1.3	The Buyer shall, except in the case of gross negligence or wilful misconduct of the Seller, its directors, officers, agents and employees, be solely liable for and shall indemnify and hold harmless the Seller, its Affiliates and each of their	
 
Clause 19 – Page 1/3

respective directors, officers, agents, employees, sub-contractors and insurers from and against all liabilities, claims, damages, costs and expenses (including legal expenses and attorney fees) incident thereto or incident to successfully establishing the right to indemnification in respect of:
 
 	(i)	injury to, or death of, any person (including any of the Buyer’s directors, officers, agents and employees, but not directors, officers, agents and employees of the Seller); and	
 
 	(ii)	loss of, or damage to, any property and for loss of use thereof (including the aircraft on which the Aircraft Training Services are performed), arising out of, or in any way connected with, the performance of any Aircraft Training Services.	
 
19.1.4	The foregoing indemnity shall not apply with respect to the Seller’s legal liability towards any person other than the Buyer, its directors, officers, agents or employees arising out of an accident caused solely by a product defect in the Aircraft delivered to and accepted by the Buyer hereunder.	
 
i)	Indemnities relating to Seller Representatives Services	
The Buyer shall be solely liable for, and shall indemnify and hold harmless the Seller, its officers, agents, subcontractors and employees from and against all liabilities, damages, losses, costs and expenses (including all reasonable attorneys’ fees and costs, damages or fees necessary for the establishment of a right to indemnification if such right is successfully established) for all injuries to and death of persons excepting injuries to and death of the Seller’s Representatives Services, and for loss of or damage to property howsoever arising out of or in connection with performance of the Seller’s Representatives Services, except when due to gross negligence or wilful misconduct of the Seller, its directors, agents or employees.
The Seller hereby indemnifies and holds harmless the Buyer, its officers, agents, subcontractors and employees from and against all liabilities, damages, losses, costs and expenses (including all reasonable attorneys’ fees and costs, damages or fees necessary for the establishment of a right to indemnification if such right is successfully established) for injuries to or death of Seller’s said representatives during the performance of Seller’s Representatives Services, except when due to gross negligence or wilful misconduct of the Buyer, its directors, agents or employees.
 
j)	Insurances	
To the extent of the Buyer’s undertaking set forth in Clause 19.2.1, for all training periods on aircraft, the Buyer shall:
 
 	(i)	cause the Seller and its directors, officers, agents, employees, Affiliates and sub-contractors to be named as additional insureds under the Buyer’s	
 
Clause 19 – Page 2/3

Comprehensive Aviation Legal Liability insurance policies, including War Risks and Allied Perils such insurance shall include the AVN 52E Extended Coverage Endorsement Aviation Liabilities as well an additional coverage in respect of War and Allied Perils Third Parties Legal Liabilities Insurance; and
 
 	(ii)	with respect to the Buyer’s Hull All Risks and Hull War Risks insurances and Allied Perils, cause the insurers of the Buyer’s hull insurance policies to waive all rights of subrogation against the Seller and its directors, officers, agents, employees, Affiliates and sub-contractors.	
Any applicable deductible shall be borne by the Buyer.
With respect to the above policies, the Buyer shall furnish to the Seller, not less than ***** prior to the start of any such training period, certificates of insurance from the Buyer’s insurance broker(s), in English, evidencing the limit of liability cover and period of insurance in a form acceptable to the Seller certifying that such policies have been endorsed as follows:
 
 	(i)	under the Comprehensive Aviation Legal Liability Insurances, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller;	
 
 	(ii)	such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of War Risks and Allied Perils) prior written notice thereof to the Seller; and	
 
 	(iii)	under any such cover, all rights of subrogation against the Seller, its directors, officers, agents, employees, Affiliates and sub-contractors, and their respective insurers, have been waived to the extent of the Buyer’s undertaking and specifically referring to Clause 19.2.1 and to this Clause 19.4.	
 
k)	Notice of Claims	
If any claim is made or suit is brought against either party (or its respective directors, officers, agents, employees, Affiliates and sub-contractors) for damages for which liability has been assumed by the other party in accordance with the provisions of this Agreement, the party against which a claim is so made or suit is so brought shall promptly give notice to the other party, and the latter shall (unless otherwise requested by the party against which a claim is so made or suit is so brought, in which case the other party nevertheless shall have the right to) assume and conduct the defence thereof, or effect any settlement which it, in its opinion, deems proper.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 19 – Page 3/3

20	TERMINATION	
 
l)	* ****	
 
m)	*****	
 
n)	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 20 – Page 1/2

All costs referred to in Clause 9.2.3 and relating to the period between the notified date of delivery (as referred to in Clause 9.2.3) and the date of termination of all or part of this Agreement shall be borne by the Buyer.
 
o)	Termination for Default under other Agreements	
If the Buyer fails to perform or comply with any payment obligation in excess of ***** US Dollar (USD *****), expressed to be assumed by it in any Other Agreement between the Buyer and the Seller or any of its Affiliates and such failure is not remedied within ***** after the Seller has given notice thereof to the Buyer, then the Seller may, by written notice, terminate all or part of this Agreement.
 
p)	General	
 
20.1.1	To the full extent permitted by law, the termination of all or part of this Agreement pursuant to Clauses 20.1, 20.2, 20.3 and 20.4 shall become effective immediately upon receipt by the relevant party of the notice of termination sent by the other party without it being necessary for either party to take any further action or to seek any consent from the other party or any court having jurisdiction.	
 
20.1.2	The right for either party under Clause 20.1 and for the Seller under Clauses 20.2, 20.3, and 20.4 to terminate all or part of this Agreement shall be without prejudice to any other rights and remedies available to such party to seek termination of all or part of this Agreement before any court having jurisdiction pursuant to any failure by the other party to perform its obligations under this Agreement.	
 
20.1.3	If the party taking the initiative of terminating this Agreement decides to terminate part of it only, the notice sent to the other party shall specify those provisions of this Agreement which shall be terminated.	
 
20.1.4	In the event of termination of this Agreement following a default from the Buyer, including but not limited to a default under Clauses 20.1, 20.2, 20.3 and 20.4, the Seller without prejudice to any other rights and remedies available under this Agreement or by law, shall be entitled to retain from the Predelivery Payments, deposits, option fees and any other monies paid by the Buyer to the Seller under this Agreement an amount equal to the substantiated losses and damages incurred by the Seller and corresponding to the Aircraft, services, data and other items covered by such termination and the balance of such Predelivery Payments, deposits, option fees and any other monies paid by the Buyer to the Seller under this Agreement and not so retained shall be returned to the Buyer. The Seller shall use reasonable efforts to mitigate the amount of any such losses and damages.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 20 – Page 2/2

21	ASSIGNMENTS AND TRANSFERS	
 
q)	Assignments by Buyer	
Except as hereinafter provided, the Buyer may not sell, assign, novate or transfer its rights and obligations under this Agreement to any person without the prior written consent of the Seller, which shall not unreasonably be withheld.
 
21.1.1	Assignments for Predelivery Financing	
The Buyer shall be entitled to assign its rights under this Agreement at any time in order to provide security for the financing of any Predelivery Payments subject to such assignment being in form and substance reasonably acceptable to the Seller.
 
21.1.2	Assignments for Delivery Financing or Refinancing	
The Buyer shall be entitled to assign its rights under this Agreement at any time in connection with the financing of its obligation to pay the Final Price or any refinancing of indebtedness secured by the Aircraft subject to such assignment being in form and substance reasonably acceptable to the Seller.
 
21.1.3	Assignments to a Buyer’s Affiliate	
*****
 
r)	Assignments by Seller	
The Seller may at any time sell, assign, novate or transfer its rights and obligations under this Agreement to any person, provided such sale, assignment or transfer be notified to Buyer and shall not have a material adverse effect on any of Buyer’s rights and obligations under this Agreement nor additional costs or expenses for the Buyer.
 
s)	Post-delivery Sale or Lease of Aircraft	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Clause 21 – Page 1/1

22	MISCELLANEOUS PROVISIONS	
 
t)	Data Retrieval	
The Buyer shall provide the Seller, as the Seller may reasonably request, with all the necessary data as customarily compiled by the Buyer and pertaining to the operation of the Aircraft to assist the Seller in making efficient and coordinated survey of all reliability, maintainability, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.
 
u)	Notices	
All notices and requests required or authorized hereunder shall be given in writing either by personal delivery to an authorized representative of the party to whom the same is given or by registered mail (return receipt requested), express mail, or courier (tracking receipt requested) or by facsimile, to be confirmed by subsequent registered mail, and the date upon which any such notice or request is so personally delivered or if such notice or request is given by registered mail, the date upon which it is received by the addressee or, if given by facsimile, the date upon which it is sent with a correct confirmation printout, provided that if such date of receipt is not a business day notice shall be deemed to have been received on the first following business day, shall be deemed to be the effective date of such notice or request.
Seller’s address for notices is:
AIRBUS
Attn. To V. P. Contracts
Rond-Point Maurice Bellonte
31707 Blagnac Cedex
France
Buyer’s address for notices is:
CONTROLADORA VUELA
COMPANIA DE AVIACION, S. A. de C.V.
Blvd. Manuel Avila Camacho 36 Piso 22
Lomas de Chapultepec
Mexico, D.F.
MEXICO
or such other address or such other person as the party receiving the notice or request may reasonably designate from time to time.
 
Clause 22 – Page 1/4

v)	Waiver	
The failure of either party to enforce at any time any of the provisions of this Agreement, or to exercise any right herein provided, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part thereof or the right of the other party thereafter to enforce each and every such provision. The express waiver (whether made one (1) or several times) by either party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement.
 
w)	Law and Jurisdiction	
 
22.1.1	This Agreement shall be governed by and construed in accordance with the laws of France.	
 
22.1.2	Any dispute arising out of or in connection with this Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.	
 
x)	International Supply Contract	
The Buyer and the Seller recognise that this Agreement is an international supply contract which has been the subject of discussion and negotiation, that all its terms and conditions are fully understood by the parties, and that the Specification and price of the Aircraft and the other mutual agreements of the parties set forth herein were arrived at in consideration of, inter alia, all the provisions hereof specifically including all waivers, releases and renunciations by the Buyer set out herein.
The Buyer and the Seller hereby also agree that the United Nations Convention on Contracts for the International Sale of Goods will not apply to this transaction.
 
y)	Severability	
In the event that any provision of this Agreement should for any reason be held ineffective, the remainder of this Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.
 
z)	Alterations to Contract	
This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives.
 
Clause 22 – Page 2/4

aa)	Language	
All correspondence, documents and any other written matters in connection with this Agreement shall be in English.
 
bb)	Counterparts	
This Agreement has been executed in two (2) original copies.
Notwithstanding the above, this Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same Agreement.
 
cc)	Confidentiality	
This Agreement including any Exhibits, other documents or data exchanged between the Buyer and the Seller for the fulfilment of their respective obligations under the Agreement shall be treated by both parties as confidential and shall not be released in whole or in part to any third party except as may be required by law, or to professional advisors for the purpose of implementation hereof.
In particular, both parties agree:
 
 	-	not to make any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future addendum hereto without the prior written consent of the other party hereto.	
 
 	-	that any and all terms and conditions of the transaction contemplated in this Agreement are strictly personal and exclusive to the Buyer, including in particular, but not limited to, the Aircraft pricing (the “ Personal Information ”). The Buyer therefore agrees to enter into consultations with the Seller reasonably in advance of any required disclosure of Personal Information to financial institutions, including operating lessors, investment banks and their agents or other relevant institutions for aircraft sale and leaseback or any other Aircraft or Predelivery Payment financing purposes (the “ Receiving Party ”).	
Without prejudice to the foregoing, any disclosure of Personal Information to a Receiving Party shall be subject to written agreement between the Buyer and the Seller, including in particular, but not limited to:
 
 	(i)	the contact details of the Receiving Party,	
 
 	(ii)	the extent of the Personal Information subject to disclosure,	
 
 	(iii)	the Aircraft pricing to be provided to the Receiving Party.	
 
Clause 22 – Page 3/4

Furthermore, the Buyer shall use its best efforts to limit the disclosure of the contents of this Agreement to the extent legally permissible in any filing required to be made by the Buyer with any governmental or regulatory agency. The Buyer agrees that prior to any such disclosure or filing, the Seller and the Buyer shall jointly review and agree on the terms and conditions of the document to be filed or disclosed.
The provisions of this Clause 22.10 shall survive any termination of this Agreement for a period of *****
IN WITNESS WHEREOF this Agreement was entered into the day and year first above written.

For and on behalf of	 	 	 	For and on behalf of	
			
CONTROLADORA VUELA
COMPANIA DE AVIACION, S. A. de C.V.	 	 	 	AIRBUS S.A.S.	
					
Name:	 	/s/ Carlos Mendoza	 		 	Name:	 	/s/ Christian Scherer	
Title:	 	Legal Representative	 		 	Title:	 	Senior Vice-President Transactions and
Control Deputy Head of Commercial	
					
Name:	 	/s/ Luis Rubio	 		 		 		
Title:	 	Legal Representative	 		 		 		
 
Clause 22 – Page 4/4

EXHIBIT B
FORM OF SPECIFICATION CHANGE NOTICE
 
Exhibit B – Page 1/1

EXHIBIT C
 
PART 1	AIRFRAME PRICE REVISION FORMULA	
 
1.	Basic Price	
The Airframe Basic Price quoted in Clause 3.1 of the Agreement is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
2.	Base Period	
The Airframe Basic Price has been established in accordance with the average economic conditions prevailing in ***** as defined by “ECIb” and “ICb” index values indicated hereafter.
“ECIb” and “ICb” index values indicated herein shall not be subject to any revision.
 
3.	Indexes	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI SIC 3721W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 6, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, standard; industrial classification code SIC 3721, base month and year June 1989 = 100).
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: ECU28102i.
Material Index : “Industrial commodities” (hereinafter referred to as “ IC ”) as published in “Producer Price Indexes” (Table 6. Producer price indexes and percent changes for commodity groupings and individual items).
(Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.
 
4.	Revision Formula	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C1 – Page 1/3

PART 1	AIRFRAME PRICE REVISION FORMULA	
*****
 
5.	General Provisions	
 
5.1	Roundings	
The Labor Index average and the Material Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
Each quotient (ECIn/ECIb) and (ICn/ICb) shall be rounded to the nearest ten-thousandth (4 decimals). If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
The final factor shall be rounded to the nearest ten-thousandth (4 decimals).
The final price shall be rounded to the nearest whole number (0.5 or more rounded to 1).
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C1 – Page 2/3

PART 1	AIRFRAME PRICE REVISION FORMULA	
 
5.2	Substitution of Indexes for Airframe Price Revision Formula	
If;
 
 	(i)	the United States Department of Labor substantially revises the methodology of calculation of the Labor Index or the Material Index as used in the Airframe Price Revision Formula, or	
 
 	(ii)	the United States Department of Labor discontinues, either temporarily or permanently, such Labor Index or such Material Index, or	
 
 	(iii)	the data samples used to calculate such Labor Index or such Material Index are substantially changed;	
the Seller and the Buyer shall select a substitute index for inclusion in the Airframe Price Revision Formula (the “ Substitute Index ”).
The Substitute Index shall reflect as closely as possible the actual variance of the Labor Costs or of the material costs used in the calculation of the original Labor Index or Material Index as the case may be.
As a result of the selection of the Substitute Index, the Seller shall make an appropriate adjustment to the Airframe Price Revision Formula to combine the successive utilisation of the original Labor Index or Material Index (as the case may be) and of the Substitute Index.
 
5.3	Final Index Values	
The Index values as defined in Clause 4 above shall be considered final and no further adjustment to the basic prices as revised at Delivery of the Aircraft shall be made after Aircraft Delivery for any subsequent changes in the published Index values.
 
Exhibit C1 – Page 3/3

PART 2	INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA	
 
1.	Reference Price of the Engines	
The Reference Price of a set of two (2) INTERNATIONAL AERO ENGINES V2522-A5 Engines is:
*****
These Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
2.	Reference Period	
The above Reference Prices have been established in accordance with the ***** as defined, according to INTERNATIONAL AERO ENGINES by the ECIb and ICb index values indicated in Clause 4 of this Exhibit C.
 
3.	Indexes	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI SIC 3721W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 6, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table (Aircraft manufacturing, standard industrial classification code SIC 3721, base month and year June 1989 = 100).
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C2 – Page 1/3

PART 2	INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA	
The quarterly value released for a certain month *****
Index code for access on the Web site of the US Bureau of Labor Statistics: ECU28102i.
Material Index : “Industrial Commodities” (hereinafter referred to as “ IC ”) as published in “PPI Detailed report” (found in Table 6. “Producer price indexes and percent changes for commodity groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.
 
4.	Revision Formula	
*****
 
5.	General Provisions	
 
5.1	Roundings	
 
 	(i)	ECIn and ICn shall be calculated to the nearest tenth (1 decimal)	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C2 – Page 2/3

PART 2	INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA	
 
 	(ii)	Each quotient (ECIn/ECIb) and (ICn/ICb) shall be calculated to the nearest ten-thousandth (4 decimals).	
 
 	(iii)	The final factor shall be rounded to the nearest ten-thousandth (4 decimals),	
If the next succeeding place is five (5) or more the preceding decimal place shall be raised to the nearest higher figure.
After final computation Pn shall be rounded to the nearest whole number (0.5 rounds to 1).
 
5.2	Final Index Values	
The revised Reference Price at the date of Aircraft Delivery shall be the final price and shall not be subject to any further adjustments in the indexes.
If no final index values are available for any of the applicable month, the then published preliminary figures shall be the basis on which the Revised Reference Price shall be computed.
 
5.3	Interruption of Index Publication	
If the US Department of Labor substantially revises the methodology of calculation or discontinues any of the indexes referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by INTERNATIONAL AERO ENGINES, such substitute index to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this result,
 
5.4	Annulment of Formula	
Should the above escalation provisions become null and void by action of the US Government, the price shall be adjusted due to increases in the costs of labor and material which have occurred from the period represented by the applicable Reference Price Indexes to the Fifth (5 th ), Sixth(6 th ) and Seventh (7 th ) months averaged prior to the scheduled Aircraft Delivery.
 
5.5	Limitation	
Should the revised Reference Price be lower than the Reference Price, the final price shall be computed with the Reference Price.
 
Exhibit C2 – Page 3/3

PART 3	PROPULSION SYSTEMS PRICE REVISION FORMULA	
CFM INTERNATIONAL
 
1.	Reference Price of the Propulsion Systems	
The Reference Price of a set of CFM INTERNATIONAL Engines CFM 56-5B5/P. excluding nacelles and thrust reversers is:
*****
These Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions of Clauses 4 and 5 of this part 3 of Exhibit C.
 
2.	Reference Period	
The above Reference Prices have been established in accordance with the ***** as defined by CFM INTERNATIONAL by the Reference Composite Price Index (CPIb) of *****
 
3.	Indexes	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI SIC 3721W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 6, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, standard industrial classification code SIC 3721, base month and year June 1989 = 100.)
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C3 – Page 1/3

PART 3	PROPULSION SYSTEMS PRICE REVISION FORMULA	
CFM INTERNATIONAL
The quarterly value released for a certain month *****
Index code for access on the Web site of the US Bureau of Labor Statistics: ECU28102i.
Material Index : “Industrial Commodities” (hereinafter referred to as “ IC ”) as published in “PPI Detailed report” (found in Table 6. “Producer price indexes and percent changes for commodity groupings and individual items not seasonally adjusted or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.
 
4.	Revision Formula	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit C3 – Page 2/3

PART 3	PROPULSION SYSTEMS PRICE REVISION FORMULA	
CFM INTERNATIONAL
 
5.	General Provisions	
 
5.1	Roundings	
 
 	(i)	The Material index average (ICn) shall be rounded to the nearest second decimal place and the labor index average (ECIn) shall be rounded to the nearest first decimal place:	
 
 	(ii)	CPIn shall be rounded to the nearest second decimal place.	
 
 	(iii)	The final factor (CPIn/148:84) shall be rounded to the nearest third decimal place.	
If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
After final computation Pn shall be rounded to the nearest whole number (0.5 rounds to 1).
 
5.2	Final Index Values	
The revised Reference Price at the date of Aircraft Delivery shall not be subject to any further adjustments in the indexes:
 
5.3	Interruption of Index Publication	
If the US Department of Labor substantially revises the methodology of calculation or discontinues any to these indexes referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by CFM INTERNATIONAL, such substitute index to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this result.
 
5.4	Annulment of Formula	
Should the above escalation provisions become null and void by action of the US Government, the Reference Price shall be *****
 
5.5	Limitations	
Should the *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Exhibit C3 – Page 3/3

EXHIBIT D
CERTIFICATE OF ACCEPTANCE
In accordance with the terms of the A 320 Family Purchase Agreement dated 28th October 2005 and made between CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V and AIRBUS S.A.S., as amended (the “ Purchase Agreement ”), the acceptance tests relating to the A 319-100 aircraft, Manufacturer’s Serial Number: [ ], Registration Marks: [ ] (the “ Aircraft ”), have taken place at Blagnac (or Hamburg) Works on the [ ] day of [ ].
In view of said tests having been carried out with satisfactory results, CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V hereby approves the Aircraft as being in conformity with the provisions of the Purchase Agreement.
Said acceptance does not impair the rights that may be derived from the warranties relating to the Aircraft set forth in the Purchase Agreement.
Any right at law or otherwise to revoke this acceptance of the Aircraft is hereby waived.
The [         ] day of [         ]
CONCESIONARIA VUELA
COMPAÑÍA DE AVIACIÓN, S. A. de C.V
By:
Its:
 
Exhibit D Page 1/1

EXHIBIT E
BILL OF SALE
Know all men by these presents that Airbus S.A.S. (the “ Seller ”), a “ société par actions simplifiée ” existing under French law and whose address is 1 rond-point Maurice Bellonte, 31707 Blagnac Cedex, FRANCE, this [ ] 2006, is the owner of the title to the following airframe (the “ Airframe ”), the engines as specified (the “ Engines ”) and all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature, excluding Buyer Furnished Equipment (“ BFE ”), incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):

AIRFRAME :	  	ENGINES :	
		
AIRBUS Model A319-100	  	International Aero Engine Model V2522-A5	
		
MANUFACTURER’S	  	ENGINE SERIAL NUMBERS : 	
SERIAL NUMBER : [    ] 	  	LH: [    ]	
	  	RH: [    ]	
		
REGISTRATION MARKS : [    ] 	  		
and has such title to the BFE as was acquired by it from CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V as confirmed in a bill of sale dated [    ] (the “ BFE Bill of Sale ”).
The Airframe, Engines and Parts are hereafter together referred to as the Aircraft (the “ Aircraft ”).
The Seller confirms that it did this [ ] day of [    ] sell, transfer and deliver all of its above described rights, title and interest to the Aircraft and the BFE to the following company and to its successors and assigns forever, said Aircraft to be the property thereof:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V
The Seller hereby warrants to the Buyer, its successors and assigns that it had this day (i) good and lawful right to sell, deliver and transfer title to the Aircraft to the Buyer and that there was conveyed to the Buyer good, legal and valid title to the Aircraft, free and clear of all liens, claims, charges, encumbrances and rights of others and that the Seller will warrant and defend such title forever against all claims and demands whatsoever and (ii) such title to the BFE as Seller has acquired from CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V pursuant to the BFE Bill of Sale:
This Bill of Sale shall be governed by and construed in accordance with the laws of France.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this                      day of [    ] 2006.
 
Exhibit E Page 1/2

AIRBUS S.A.S:
By:
Title:
Signature:
 
Exhibit E Page 2/2

EXHIBIT F
EXHIBIT F
SERVICE LIFE POLICY
ITEMS OF PRIMARY STRUCTURE
 
Exhibit F – Page 1/4

SELLER SERVICE LIFE POLICY
 
1.	The Items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder:	
 
2.	WINGS—CENTER AND OUTER WING BOX (LEFT AND RIGHT)	
 
2.1	Wing Structure	
 
2.1.1	Spars	
 
2.1.2	Ribs and stringers inside the wing box	
 
2.1.3	Upper and lower wing skin panels of the wing box	
 
2.2	Fittings	
 
2.2.1	Support structure and attachment fittings for the flap structure	
 
2.2.2	Support structure and attachment fitting for the engine pylons	
 
2.2.3	Support structure and attachment fitting for the main landing gear	
 
2.2.4	Support structure and attachment fitting for the center wing box	
 
2.3	Auxiliary Support Structure	
 
2.3.1	For the slats:	
 
2.3.1.1	Ribs supporting the track rollers on wing box structure	
 
2.3.1.2	Ribs supporting the actuators on wing box structure	
 
2.3.2	For the ailerons:	
 
2.3.2.1	Hinge brackets and ribs on wing box rear spar or shroud box	
 
2.3.2.2	Actuator fittings on wing box rear spar or shroud box	
 
2.3.3	For airbrakes, spoilers, lift dumpers:	
 
2.3.3.1	Hinge brackets and ribs on wing box rear spar or shroud box	
 
2.3.3.2	Actuator fittings on wing box rear spar or shroud box	
 
2.4	Pylon	
 
2.4.1	For the Pylon Main Structural Box	
 
2.4.1.1	Spars	
 
Exhibit F – Page 2/4

2.4.1.2	Ribs	
 
2.4.1.3	Skin, doublers and stiffeners	
 
2.4.1.4	Support structure and attachment fitting for engine supports	
 
3.	FUSELAGE	
 
3.1	Fuselage structure	
 
3.1.1	Fore and aft bulkheads	
 
3.1.2	Pressurized floors and bulkheads surrounding the main and nose gear wheel well and center wing box	
 
3.1.3	Skins with doublers, stringers and frames from the forward pressure bulkheads to the frame supporting the rear attachment of horizontal stabilizer	
 
3.1.4	Window and windscreen attachment structure but excluding transparencies	
 
3.1.5	Passenger and cargo doors internal structure	
 
3.1.6	Sills, excluding scuff plates, and upper beams surrounding passenger and cargo door apertures	
 
3.1.7	Cockpit floor structure and passenger cabin floor beams excluding floor panels and seat rails	
 
3.1.8	Keel beam structure	
 
3.2	Fittings	
 
3.2.1	Landing gear support structure and attachment fitting	
 
3.2.2	Support structure and attachment fittings for the vertical and horizontal stabilizers	
 
3.2.3	Support structure and attachment fitting for the APU	
 
4.	STABILIZERS	
 
4.1	Horizontal Stabilizer Main Structural Box	
 
4.1.1	Spars	
 
4.1.2	Ribs	
 
4.1.3	Upper and lower skins and stringers	
 
4.1.4	Support structure and attachment fitting to fuselage and trim screw actuator	
 
Exhibit F – Page 3/4

4.1.5	Elevator support structure	
 
4.1.5.1	Hinge bracket	
 
4.1.5.2	Servo control attachment brackets	
 
4.2	Vertical Stabilizer Main Structural Box	
 
4.2.1	Spars	
 
4.2.2	Ribs	
 
4.2.3	Skins and stringers	
 
4.2.4	Support structure and attachment fitting to fuselage	
 
4.2.5	Rudder support structure	
 
4.2.5.1	Hinge brackets	
 
4.2.5.2	Servocontrol attachment brackets	
 
5.	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit F – Page 4/4

EXHIBIT G
EXHIBIT G
TECHNICAL DATA INDEX
 
Exhibit G – Page 1/14

TECHNICAL DATA INDEX
Where applicable data will be established in general compliance with ATA Specification 2200 (iSpec2200), Information Standards for Aviation Maintenance (Revision 2003).
The following index identifies the Technical Data provided in support of the Aircraft.
The explanation of the table is as follows:

NOMENCLATURE	  	Self-explanatory.	
		
ABBREVIATED DESIGNATION (Abbr)	  	Self-explanatory.	
		
AVAILABILITY (Avail)	  		
Technical Data can be available:
 
-	ON-LINE (ON) through the relevant Service on Airbus Customer Portal, and / or	
 
-	OFF-LINE (OFF) through the most suitable means applicable to the size of the concerned document (e.g.; CD or DVD).	
FORMAT (Form)
Following Data formats can be used:
 
-	SGML—Standard Generalized Mark-up Language: which allows further data processing by the Buyer.	
 
-	XML—Evolution of the SGML format to cope with WEB technology requirements.	
 
-	PDF (PDF)—Portable Document Format allowing data consultation.	
 
-	Advanced Consultation Tool—refers to Technical Data Consultation application that offers advanced consultation & navigation functionality compared with PDF: Both browser software & Technical Data are packaged together.	
 
-	P1 / P2, refers to manuals printed on one side, or both sides of the sheet.	
 
-	CD-P—refers to CD-Rom including Portable Document Format (PDF) Data.	
 
Exhibit G – Page 2/14

TYPE    C   CUSTOMIZED. Refers to manuals that are applicable to an individual Airbus customer/operator fleet or aircraft.
              G   GENERIC: Refers to manuals that are applicable for all Airbus aircraft types/models/series.
              E   ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a
                    specific aircraft type/model/series.

QUANTITY (Qty)	  	Self-explanatory for physical media.	
		
DELIVERY (Deliv)	  	Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day.
 
The number of days indicated shall be rounded up to the next regular revision release date.	
 
Exhibit G – Page 3/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	  	Deliv	  	Comments	
OPERATIONAL MANUALS AND DATA	
								
Flight Crew Operating Manual	  	FCOM	  	OFF	  	P2	  	C	  	*****	  	*****	  	Per crew quantity / Plus one copy per Aircraft at Delivery	
								
	  	FCOM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	PDF is fallback solution to paper for on-ground consultation only	
								
	  	FCOM	  	ON	  	Advanced Consultation Tool	  	C	  	*****	  	*****	  		
								
	  	FCOM	  	OFF	  	Advanced Consultation Tool on C	  	C	  	*****	  	*****	  	FCOM Module including OEB & TR download consultation	
								
	  	FCOM	  	OFF	  	SGML	  	C	  	*****	  	*****	  	SGML shall be used to process Buyer’s own FCOM for delivery to flight crew Applicable for SA and LR Aircraft.	
								
Flight Crew Training Manual	  	FCTM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	FCTM is a supplement to FCOM / a “Pilot’s guide” for use in training and in operations	
								
	  	FCTM	  	OFF	  	XML	  	C	  	*****	  	*****	  	XML data for further processing/customization by the Buyer	
								
Flight Manual	  	FM	  	OFF	  	P2	  	C	  	*****	  	*****	  	Plus one copy per Aircraft at Delivery	
								
Master Minimum Equipment List	  	MMEL	  	OFF	  	P2	  	C	  	*****	  	*****	  	Per crew quantity / Plus one copy per Aircraft at Delivery	
								
	  	MMEL	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	PDF CD is fallback solution to paper for on-ground consultation only (For Temporary Revisions & OEB’s, refer to paper)	
								
	  	MMEL	  	OFF	  	SGML	  	C	  	*****	  	*****	  	Applicable for SA and LR Aircraft. SGML data, including Parts 1 and 2, for further processing by the Buyer. Recommended for issue of MEL by using the ADOC Starter Pack (for conversion of SGML Data to e.g. Framemaker or MS Word RTF format)	
								
Quick Reference Handbook (if required by Airworthiness Authorities)	  	QRH	  	OFF	  	P2 CD-P	  	C	  	*****	  	*****	  	Per crew quantity / Plus one copy per Aircraft at Delivery	
								
Trim Sheet	  	TS	  	OFF	  	Word Doc	  	C	  	*****	  	*****	  	Office Automation format (.doc) for further processing by the Buyer	
WB = Wide Body: A310/A300-600 SA = Single Aisle: A318/A319 / A320/A321 1 LR = Long Range: A330 / A340
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 4/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	  	Deliv	  	Comments	
OPERATIONAL MANUALS AND DATA (Cont’d)	
								
Weight and Balance Manual	  	WBM	  	OFF	  	P1CD-P	  	C
 
C	  	*****
 
*****	  	*****
 
*****	  	Fleet customized WBM for reference in central Library (*) plus one copy per Aircraft at Delivery. For the WBM the flight deck copy is an advance copy only of the customized manual, not subject to revision or updating. Weighing Equipment List delivered two weeks after Aircraft Delivery	

Performance Engineer’s Programs	  	PEP	  	ON	  	Advanced Consultation Tool	  	C	  	*****	  	*****	  		
								
	  	PEP	  	OFF	  	Advanced Consultation Tool on CD	  	C	  	*****	  	*****	  		
								
Performance Programs Manual	  	PPM	  	OFF	  	Advanced Consultation Tool on CD	  		  	*****	  	*****	  	Included in the PEP CD	

NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	*****	  	*****	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS	  		
AirN@v, including: Aircraft Maintenance Manual Illustrated Parts Catalog (Airframe) Trouble Shooting Manual Aircraft Schematics Manual Aircraft Wiring Lists Aircraft Wiring Manual Electrical Standard Practices Manual Consumable Material List Standards Manual	  	AirN@v	  	ON	  	Advanced Consultation Tool	  	C	  	*****	  	*****	  		
	  	 
AirN@v	  	 
OFF	  	 
Advanced Consultation Tool on DVD	  	 
C	  	 
*****	  	 
*****	  	 
Recommended basic delivery quantity	
								
Technical Follow-up	  	TFU	  	OFF	  	CD-P	  	E	  	N/A	  	90	  	TFU for Trouble shooting & maintenance, to be used with AirN@v	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 5/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	  	Deliv	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)	
								
Aircraft Maintenance Manual	  	AMM	  	ON	  	PDF	  	C	  	*****	  	*****	  		
								
	  	AMM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	Fallback solution to AirN@v	
								
	  	AMM	  	OFF	  	SGML	  	C	  	*****	  	*****	  	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer (Graphics in TIFF or CGM, to be specified).	
								
Aircraft Schematics Manual	  	ASM	  	ON	  	PDF	  	C	  	*****	  	*****	  		
								
	  	ASM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	Fallback solution to AirN@v	
								
	  	ASM	  	OFF	  	SGML	  	C	  	*****	  	*****	  	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer (Graphics in TIFF or CGM, to be specified).	
								
Aircraft Wiring List	  	AWL	  	ON	  	PDF	  	C	  	*****	  	*****	  		
								
	  	AWL	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	Fallback solution to AirN@v	
								
	  	AWL	  	OFF	  	SGML	  	C	  	*****	  	*****	  	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer (Graphics in TIFF or CGM, to be specified).	
								
Aircraft Wiring Manual	  	AWM	  	ON	  	PDF	  	C	  	*****	  	*****	  		
								
	  	AWM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  	Fallback solution to AirN@v	
								
	  	AWM	  	OFF	  	SGML	  	C	  	*****	  	*****	  	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied Effective delivery will only take place upon explicit request from the Buyer (Graphics in TIFF or CGM, to be specified).	
								
Component Location Manual	  	CLM	  	ON	  	PDF	  	C	  	*****	  	*****	  	For SA and LR Aircraft	
								
	  	CLM	  	OFF	  	CD-P	  	C	  	*****	  	*****	  		
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 6/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	  	Deliv	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)	
								
Consumable Material List	  	CML	  	ON	  	PDF	  	G	  	*****	  	*****	  		
								
	  	CML	  	OFF	  	CD-P	  	G	  	*****	  	*****	  	Fallback solution to AirN@v .	
								
	  	CML	  	OFF	  	SGML	  	G	  	*****	  	*****	  	If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer	
								
Duct Repair Manual	  	DRM	  	ON	  	PDF	  	G	  	*****	  	*****	  		
								
	  	DRM	  	OFF	  	CD-P	  	G	  	*****	  	*****	  		
								
Ecam System Logic Data	  	ESLD	  	ON	  	PDF	  	E	  	*****	  	*****	  	For SA & LR aircraft	
								
	  	ESLD	  	OFF	  	CD-P	  	E	  	*****	  	*****	  		
								
Electrical Load Analysis	  	ELA	  	OFF	  	PDF/RTF/ Excel	  	C	  	*****	  	*****	  	One ELA supplied for each Aircraft, delivered one month after Aircraft Delivery
PDF File + Office automation format RTF & Excel file delivered on one single CD for ELA updating by the Buyer	
								
Electrical Standard Practices Manual	  	ESPM	  	ON	  	PDF	  	G	  	*****	  	*****	  		
								
	  	ESPM	  	OFF	  	CD-P	  	G	  	*****	  	*****	  	Fallback solution to AirN@v	
								
	  	ESPM	  	OFF	  	SGML	  	G	  	*****	  	*****	  	If selected by the Buyer, SGML format will not be automatically supplied
Effective delivery will only take place upon explicit request from the Buyer (Graphics format in TIFF or CGM, to be specified):	
								
Electrical Standard Practices booklet	  	ESP	  	OFF	  	P2*	  	G	  	*****	  	*****	  	*Pocket size format booklets for ground mechanics	
								
Flight Data Recording Parameter Library	  	FDRPL	  	OFF	  	Advanced Consultation Tool on CD	  	E	  	*****	  	*****	  	For WB ( A310 & A300-600), SA & LR aircraft	
								
Fuel Pipe Repair Manual	  	FPRM	  	ON	  	PDF	  	G	  	*****	  	*****	  		
								
	  	FPRM	  	OFF	  	CD-P	  	G	  	*****	  	*****	  		
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 7/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)	
								
Illustrated Parts Catalog (Airframe)	  	IPC	  	ON	  	PDF	  	C	  	*****	 	*****	 		
								
	  	IPC	  	OFF	  	CD-P	  	C	  	*****	 	*****	 	Fallback solution to AirN@v	
								
	  	IPC	  	OFF	  	SGML	  	C	  	*****	 	*****	 	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer (Graphics in TIFF or CGM, to be specified).	
								
Illustrated Parts Catalog (Powerplant)	  	PIPC	  	ON	  	PDF	  	C	  	*****	 	*****	 		
								
	  	PIPC	  	OFF	  	CD-P	  	C	  	*****	 	*****	 	Integrated in the SA aircraft IPC for IAE V2500 A1/A3 Engines. Integrated in the LR A340-500/-600 aircraft IPC for RR Trent 500 Engines. For other Aircraft and engine types, supplied by Propulsion Systems Manufacturer concurrently with the Airframe IPC.	
								
Maintenance Planning Document	  	MPD	  	ON	  	PDF	  	E	  	*****	 	*****	 	Includes 3 files : PDF, Excel and Text File	
								
	  	MPD	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
Maintenance Review Board Report	  	MRBR	  	ON	  	PDF	  	E	  	*****	 	*****	 	MRB Report document includes the Certification Maintenance Requirements (CMR) and Airworthiness Limitation Items (ALI) documents.	
								
	  	MRBR	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
Support Equipment Summary / SES Tool and Equipment Index / TEI Illustrated Tool and Equipment Manual / TEM	  	STT	  	ON	  	PDF	  	G	  	*****	 	*****	 		
								
	  	STT	  	OFF	  	CD-P	  	G	  	*****	 	*****	 	SES, TEI & TEM are grouped on a single CD	
								
Tool & Equipment Bulletins	  	TEB	  	OFF	  	P2	  	E	  	*****	 	*****	 		
								
Tool and Equipment Drawings	  	TED	  	ON	  	Advanced
Consultation
Tool	  	E	  	*****	 	*****	 	On-line Consultation from Engineering Drawings Service	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 8/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)	
								
Engineering Documentation Combined Index, including: Airworthiness Directives / AD Consignes de Navigabilite / CN (French DGAC) All Operator Telex / AOT Operator Information Telex / OIT Flight Operator Telex / FOT Modification / MOD Modification Proposal / MP Service Bulletin / SB Service information Letter / SIL Technical Follow-Up / TFU Vendor Service Bulletin / VSB	  	EDCI	  	ON	  	Advanced
Consultation
Tool	  	C	  	*****	 	*****	 		
	  	EDCI	  	OFF	  	Advanced
Consultation
Tool on
DVD	  	C	  	*****	 	*****	 	Outstations with no On-Line connection to Airbus Customer Portal to be supplied with one DVD set	
								
Trouble Shooting Manual	  	TSM	  	ON	  	PDF	  	C	  	*****	 	*****	 		
								
	  	TSM	  	OFF	  	CD-P	  	C	  	*****	 	*****	 	Fallback solution to AirN@v	
								
	  	TSM	  	OFF	  	SGML	  	C	  	*****	 	*****	 	Applicable for SA and LR Aircraft.
If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer
Graphics in TIFF or CGM format to be specified	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 9/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
STRUCTURAL MANUALS	
								
Nondestructive Testing Manual	  	NTM	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	NTM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
	  	NSRM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
Structural Repair Manual	  	SRM	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	SRM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
	  	SRM	  	OFF	  	SGML	  	E	  	*****	 	*****	 	Applicable for SA and LR Aircraft. If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place upon explicit request from the Buyer Graphics format in TIFF or CGM to be specified	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 10/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
OVERHAUL DATA	
								
Component Documentation Status	  	CDS	  	OFF	  	D	  	C	  	*****	 	*****	 	*****	
								
Component Evolution List	  	CEL	  	ON	  	PDF	  	G	  	*****	 	*****	 		
								
	  	CEL	  	OFF	  	CD-P	  	G	  	*****	 	*****	 	Delivered as follow-on for CDS.	
								
Component Maintenance Manual — Manufacturer	  	CMMM	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	CMMM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
Component Maintenance Manual — Vendor	  	CMMV	  	OFF	  	CD-P	  	E	  	*****	 	*****	 	PDF on CD to be provided by Vendors. If more than one Airbus aircraft type in operation with the Buyer, dispatch of the “common” CMMV only	
								
	  	CMMV	  	ON	  	PDF	  	E	  	*****	 	*****	 	Available from the “Suppliers Technical Manuals “ Service in the Airbus Customer Portal	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 11/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
ENGINEERING DOCUMENT	
								
Installation and Assembly Drawings (mechanical)	  	IAD	  	ON	  	Advanced
Consultation
Tool	  	C	  	*****	 	*****	 	On-line Consultation from Engineering Drawings Service in Airbus Customer Portal	
								
Parts Usage (Effectivity)	  	PU	  	ON	  	Advanced
Consultation
Tool	  	C	  	*****	 	*****	 	On-line Consultation from Engineering Drawings Service in Airbus Customer Portal	
								
Parts List	  	PL	  	ON	  	Advanced
Consultation
Tool	  	C	  	*****	 	*****	 	On-line Consultation from Engineering Drawings Service in Airbus Customer Portal	
								
Standards Manual	  	SM	  	ON	  	PDF	  	G	  	*****	 	*****	 		
								
	  	SM	  	OFF	  	CD-P	  	G	  	*****	 	*****	 	Fallback solution to AirN@v	
								
	  	SM	  	OFF	  	SGML	  	G	  	*****	 	*****	 	If selected by the Buyer, SGML format will not be automatically supplied.
Effective delivery will only take place upon explicit request from the Buyer	
								
Process and Material Specification	  	PMS	  	ON	  	PDF	  	G	  	*****	 	*****	 		
								
	  	PMS	  	OFF	  	CD-P	  	G	  	*****	 	*****	 		
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 12/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
MISCELLANEOUS PUBLICATIONS	
								
Airplane Characteristics for Airport Planning / AC Maintenance Facility Planning / MFP Ground Support Equipment Vendor Information Manual / GSE VIM	  	AMVG	  	ON	  	PDF	  	E	  	*****	 	*****	 	Available On-Line from the Airbus Customer Portal	
	  	 
AMVG	  	 
OFF	  	 
CD-P	  	 
E	  	 
*****	 	 
*****	 	 
AC, MFP and GSE VIM are grouped on one single CD/ Back-up set to On-Line access	
								
ATA Index	  	ATI	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
CADETS (Technical Publications Training)	  	CADETS	  	OFF	  	Advanced
Consultation
Tool on CD	  	G	  	*****	 	*****	 		
								
Aircraft Recovery Manual	  	ARM	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	ARM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 		
								
Aircraft Rescue & Firefighting Chart	  	ARFC	  	ON	  	PDF	  	E	  	*****	 	*****	 	Available On-Line from the Airbus Customer Portal	
								
Crash Crew Chart	  	CCC	  	OFF	  	P1	  	E	  	*****	 	*****	 		
								
Cargo Loading System Manual	  	CLS	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	CLS	  	OFF	  	CD-P	  	E	  	*****	 	*****	 	One CLS per delivered Aircraft CLS is Envelope (E) for SA and LR aircraft and Customized for WB aircraft	
								
List of Applicable Publications	  	LAP	  	OFF	  	PDF	  	C	  	*****	 	*****	 		
								
List of Radioactive and Hazardous Elements	  	LRE	  	ON	  	PDF	  	G	  	*****	 	*****	 		
								
	  	LRE	  	OFF	  	CD-P	  	G	  	*****	 	*****	 		
								
Livestock Transportation Manual	  	LTM	  	ON	  	PDF	  	E	  	*****	 	*****	 		
								
	  	LTM	  	OFF	  	CD-P	  	E	  	*****	 	*****	 	*****	
								
Service Bulletins	  	SB	  	ON	  	Advanced
Consultation
Tool	  	C	  	*****	 	*****	 	Full content available from the Airbus Customer Portal/ SB Index available from EDCI on DVD	
								
	  	SB	  	OFF	  	CD-P	  	C	  	*****	 	*****	 	One CD per SB issued and/or revised	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 13/14

															
NOMENCLATURE	  	Abbr	  	Avail	  	Form	  	Type	  	Qty	 	Deliv	 	Comments	
MISCELLANEOUS PUBLICATIONS	
								
Supplier Product Support Agreements 2000	  	SPSA	  	ON	  	PDF	  	G	  	*****	 	*****	 	Based on General Conditions of Purchase (GCP) 2000 issue 5	
								
	  	SPSA	  	OFF	  	CD-P	  	G	  	*****	 	*****	 		
								
Transportability Manual	  	TM	  	OFF	  	CD-P	  	G	  	*****	 	*****	 		
								
Vendor Information Manual	  	VIM	  	ON	  	Advanced
Consultation
Tool	  	G	  	*****	 	*****	 		
								
	  	VIM	  	OFF	  	Advanced
Consultation
Tool on CD	  	G	  	*****	 	*****	 		
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit G Page 14/14

EXHIBIT H
EXHIBIT “H”
MATERIAL
SUPPLY AND SERVICES
 
Exhibit H Page 1/24

1.	GENERAL	
 
1.1	This Exhibit defines the terms and conditions for the material support services offered by the Seller to the Buyer in the following areas:	
 
 	-	Initial provisioning of data and material	
 
 	-	Replenishment of material	
 
 	-	Lease of certain Seller Parts	
 
1.1.1	Capitalized terms used herein and not otherwise defined in this Exhibit “H” shall have the same meanings assigned thereto in the Agreement.	
 
1.1.2	References made to Clauses or sub-Clauses shall refer to Clauses or sub-Clauses of this Exhibit “H” unless otherwise specified.	
 
1.2	Scope of Material Support	
Material is classified into the following categories (hereinafter referred to as “ Material ”):
 
 	(i)	Seller Parts (Seller’s proprietary Material bearing an official part number of the Seller or Material for which the Seller has the exclusive sales rights);	
 
 	(ii)	Supplier Parts classified as Repairable Line Maintenance Parts in accordance with SPEC 2000;	
 
 	(iii)	Supplier Parts classified as Expendable Line Maintenance Parts in accordance with SPEC 2000;	
 
 	(iv)	Ground Support Equipment and Specific (To Type) Tools.	
 
1.2.1	Certain Seller Parts listed in Appendix A of Clause 6 are available for lease by the Seller to the Buyer.	
 
1.2.2	The Material support to be provided hereunder by the Seller covers items classified as Material in sub-Clauses 1.2(i) thru (iv) both for initial provisioning as described in Clause 2 (“ Initial Provisioning ”) and for replenishment as described in Clause 3.	
Repairable Line Maintenance Parts as specified in sub-Clauses 1.2(i) and 1.2(ii) above having less than fifty (50) flight-hours are considered as new.
 
1.2.3	Propulsion Systems, nacelles, quick engine change kit and thrust reverser accessories and parts, including associated parts, are not covered under this Exhibit “H” and shall be subject to direct agreements between the Buyer and the relevant Propulsion System Manufacturer. The Seller shall use its reasonable efforts to assist the Buyer in case of any difficulties with availability of Propulsion Systems and associated spare parts.	
 
Exhibit H Page 2/24

1.2.4	During a period commencing on the date hereof and continuing for ***** (the “ Term ”), the Seller shall maintain or have maintained such stock of Seller Parts as is deemed reasonable by the Seller and shall furnish at reasonable prices Seller Parts adequate to meet the Buyer’s needs for maintenance of the Aircraft.	
The Seller shall use its reasonable efforts to obtain a similar service from all Suppliers of parts which are originally installed on the Aircraft and not manufactured by the Seller.
 
1.3	Airbus Spares Support and Services Headquarter	
 
1.3.1	The Seller has established its Airbus Spares Support Centre in HAMBURG, FEDERAL REPUBLIC OF GERMANY (“ Airbus Spares Support Centre ”) and shall maintain or cause to be maintained during the Term a central store of Seller Parts.	
 
1.3.2	The Airbus Spares Support Centre is operated twenty-four (24) hours/day and seven (7) days/week.	
 
1.3.3	The Seller reserves the right to effect deliveries from distribution centres other than Airbus Spares Support Centre or from any designated production or Suppliers’ facilities:	
For efficient and convenient deliveries, the Seller and its Affiliate companies operate regional satellite stores.
 
1.4	Agreements of the Buyer	
 
1.4.1	The Buyer agrees to purchase from the Seller or its licensee(s) (the “ Licensees ”) the Seller Parts required for the Buyer’s own needs during the Term, provided that the provisions of this Clause 1.4 shall not in any way prevent the Buyer from resorting to the Seller Parts stocks of other operators using the same Aircraft or from purchasing Seller Parts from said operators or from distributors, provided said Seller Parts have been designed by the Seller and manufactured by the Seller or its Licensee(s).	
 
1.4.2	The Buyer may manufacture or have manufactured for its own use without paying any license fee to the Seller parts equivalent to Seller Parts:	
 
1.4.2.1	after expiration of the Term if at such time the Seller Parts are out of stock,	
 
1.4.2.2	at any time, to the extent Seller Parts are needed to effect aircraft on ground (“ AOG ”) repairs upon any Aircraft delivered under the Agreement and are not available from the Seller or its Licensees within a lead time shorter than or equal to the time in which the Buyer can procure such Seller Parts, and provided the Buyer shall not sell such Seller Parts,	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 3/24

1.4.2.3	in the event that the Seller fails to fulfill its obligations with respect to any Seller Parts pursuant to Clause 1.2 within a reasonable time after written notice thereof from the Buyer,	
 
1.4.2.4	in those instances where a Seller Part is identified as “Local Manufacture” in the Illustrated Parts Catalog (IPC).	
 
1.4.3.1	The rights granted to the Buyer in Clause 1.4.2 shall not in any way be construed as a license, nor shall they in any way obligate the Buyer to the payment of any license fee or royalty, nor shall they in any way be construed to affect the rights of third parties.	
 
1.4.3.2	Furthermore, in the event of the Buyer manufacturing or having manufactured any parts, subject to the conditions of Clause 1.4.2 such manufacturing and any use made of the manufactured part shall be under the sole liability of the Buyer and the consent given by the Seller shall not be construed as express or implicit approval howsoever either of the Buyer or of the manufactured parts.	
It shall further be the Buyer’s responsibility to ensure that such manufacturing is performed in accordance with the relevant procedures and Aviation Authority requirements.
 
1.4.3.3	The Buyer shall allocate or cause to be allocated its own part number to any part manufactured or caused to be manufactured subject to Clause 1.4.2 above. The Buyer shall not be allowed to use or cause to be used the Airbus Part number of the Seller Part to which such manufactured part is equivalent.	
 
1.4.3.4	Notwithstanding any right provided to the Buyer under Clause 1.4.2, the Buyer shall not be entitled under any circumstances to sell any part manufactured or caused to be manufactured under Clause 1.4.2 to any third party.	
 
Exhibit H Page 4/24

2.	INITIAL PROVISIONING	
 
2.1	Initial Provisioning Period	
The Initial Provisioning Period is defined as the period up to and expiring on the ninetieth (90th) day after Delivery of the last Aircraft subject to firm order under the Agreement.
 
2.2	Pre-Provisioning Meeting	
 
2.2.1	The Seller shall organize a pre-provisioning meeting (“ Pre-Provisioning Meeting ”) at its Airbus Spares Support Centre for the purpose of formulating an acceptable schedule and working procedure to accomplish the initial provisioning of Material.	
 
2.2.2	The date of the meeting shall be mutually agreed upon, allowing a minimum preparation time of ***** for the Initial Provisioning Conference referred to in Clause 2.4 below.	
 
2.3	Initial Provisioning Training	
Upon the request of the Buyer, the Seller can provide Initial Provisioning training for the Buyer’s provisioning and purchasing personnel. The following areas shall be covered:
 
 	(i)	The Seller during the Pre-Provisioning Meeting shall familiarize the Buyer with the provisioning documents.	
 
 	(ii)	The technical function as well as the necessary technical and commercial Initial Provisioning Data shall be explained during the Initial Provisioning Conference.	
 
 	(iii)	A familiarization with the Seller’s purchase order administration system shall be conducted during the Initial Provisioning Conference.	
 
2.4	Initial Provisioning Conference	
The Seller shall organize an Initial Provisioning conference (“ Initial Provisioning Conference ”) at the Airbus Spares Support Centre, including participation of major Suppliers as mutually agreed upon during the Pre-Provisioning Meeting.
Such conference shall not take place earlier than ***** after Manufacturer Serial Number allocation, Buyer Furnished Equipment selection or Contractual Definition Freeze, whichever is the latest.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 5/24

2.5	Seller-Supplied Data	
The Seller shall prepare and supply to the Buyer the data set forth hereunder.
 
2.5.1	Initial Provisioning Data	
Initial Provisioning data elements generally in accordance with SPEC 2000, Chapter 1, (“ Initial Provisioning Data ”) shall be supplied by the Seller to the Buyer in a form, format and a time-scale to be mutually agreed upon during the Pre-Provisioning Meeting.
 
2.5.1.1	Revision service shall be provided ***** up to the end of the Initial Provisioning Period.	
 
2.5.1.2	In any event, the Seller shall ensure that Initial Provisioning Data is released to the Buyer in due time to give the Buyer sufficient time to perform any necessary evaluation and allow the on-time delivery of any ordered Material.	
 
2.5.2	Supplementary Data	
The Seller shall provide the Buyer with supplementary data to the Initial Provisioning Data, including Local Manufacture Tables (X-File) and Ground Support Equipment and Specific (To-Type) Tools (W-File) in accordance with SPEC 2000, Chapter 1.
 
2.5.3	Data for Standard Hardware	
The Initial Provisioning Data provided to the Buyer shall include data for hardware and standard material.
 
2.6	Supplier-Supplied Data	
 
2.6.1	General	
The Seller shall obtain from Suppliers agreements to prepare and issue for their own products as per Clause 1.2(ii) repair/overhaul Initial Provisioning Data in the English language, for those components for which the Buyer has elected to receive data.
Said data (initial issue and revisions) shall be transmitted to the Buyer through the Suppliers and/or the Seller. The Seller shall not be responsible for the substance of such data.
In any event, the Seller shall exert its reasonable efforts to supply such Data to the Buyer in due time to give the Buyer sufficient time to perform any necessary evaluation and allow on-time deliveries.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 6/24

2.6.2 	Initial Provisioning Data	
Initial Provisioning Data elements for Supplier Parts as per sub-Clause 1.2(ii) generally in accordance with SPEC 2000, Chapter 1, shall be furnished as mutually agreed upon during a Pre-Provisioning Meeting with revision service assured up to the end of the Initial Provisioning period.
 
2.7	Initial Provisioning Data Compliance	
 
2.7.1	Initial Provisioning Data generated by the Seller and supplied to the Buyer shall comply with the latest configuration of the Aircraft to which such data relate as known ***** Said data shall enable the Buyer to order material conforming to its Aircraft as required for maintenance and overhaul.	
This provision shall not cover:
 
 	-	Buyer modifications not known to the Seller,	
 
 	-	modifications not agreed to by the Seller.	
 
2.8	Commercial Offer	
 
2.8.1	At the end of the Initial Provisioning Conference, the Seller shall, at the Buyer’s request, submit a commercial offer for all Material as defined in Clauses 1.2(i) thru 1.2(iv) mutually agreed as being Initial Provisioning based on the Seller’s sales prices valid at the time of finalization of the Initial Provisioning Conference. This commercial offer shall be valid for a period to be mutually agreed upon, irrespective of any price changes for Seller Parts during this period, except for significant error and/or price alterations due to part number changes and/or Supplier price changes.	
 
2.8.2	During the Initial Provisioning Period the Seller shall supply Material, as defined in Clause 1.2 and ordered from the Seller, which shall be in conformity with the configuration standard of the concerned Aircraft and with the Initial Provisioning Data transmitted by the Seller.	
 
2.8.3	The Seller shall in addition use its reasonable efforts to cause Suppliers to provide a similar service for their items.	
 
2.9	Delivery of Initial Provisioning Material	
 
2.9.1	To cover the requirements in Material for entry into service of the Aircraft, the Seller shall use its reasonable efforts to deliver Material ordered during the Initial Provisioning Period against the Buyer’s orders and according to a mutually agreed schedule. Such deliveries shall cover the Material requirements in line with the Aircraft fleet build up, only up to that portion of the ordered quantity that is recommended for the number of Aircraft operated during the Initial Provisioning Period.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 7/24

The Seller shall in addition use its reasonable efforts to cause Suppliers to provide to the Buyer a similar service for their items:
 
2.9.2	The Buyer may, subject to the Seller’s agreement, cancel or modify Initial Provisioning orders placed with the Seller, with no cancellation charge, not later than the quoted lead-time before scheduled delivery of said Material.	
 
2.9.3	In the event of the Buyer canceling or modifying (without any liability of the Seller for the cancellation or modification) any orders for Material outside the time limits defined in Clause 2.9.2, the Buyer shall reimburse the Seller for any costs incurred in connection therewith.	
 
2.9.4	All transportation costs for the return of Material under this Clause 2, including any insurance, customs and duties applicable or other related expenditures, shall be borne by the Buyer.	
 
2.10	*****	
 
2.10.1	*****	
 
2.10.2	*****	
 
2.10.3	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 8/24

3.	REPLENISHMENT AND DELIVERY	
 
3.1	General	
Buyer’s purchase orders are administered in accordance with SPEC 2000, Chapter 3.
For the purpose of clarification it is expressly stated that the provisions of Clause 3.2 do not apply to Initial Provisioning Data and Material as described in Clause 2.
 
3.2	Lead times	
In general, lead times are in accordance with the provisions of the “World Airlines and Suppliers’ Guide” (Latest Edition).
 
3.2.1	Seller Parts as per sub-Clause 1.2(i) listed in the Seller’s Spare Parts Price Catalog can be dispatched within the lead times defined in the Spare Parts Price Catalog.	
Lead times for Seller Parts, which are not published in the Seller’s Spare Parts Price Catalog, are quoted upon request.
 
3.2.2	Material of sub-Clauses 1.2(ii) thru 1.2(iv) can be dispatched within the Supplier’s lead-time augmented by the Seller’s own order and delivery processing time.	
 
3.2.3	Expedite Service	
The Seller shall provide a twenty-four (24) hours-a-day, seven (7) days-a-week expedite service to provide for the supply of the relevant Seller Parts available in the Seller’s stock, workshops and assembly line including long lead time spare parts, to the international airport nearest to the location of such part (“ Expedite Service ”).
 
3.2.3.1	The Expedite Service is operated in accordance with the “World Airlines and Suppliers’ Guide”, and the Seller shall notify the Buyer of the action taken to satisfy the expedite within:	
 
 	-	four (4) hours after receipt of an AOG Order,	
 
 	-	twenty-four (24) hours after receipt of a Critical Order (imminent AOG or work stoppage),	
 
 	-	seven (7) days after receipt of an Expedite Order from the Buyer.	
 
3.2.3.2	The Seller shall deliver Seller Parts requested on an Expedite basis against normal orders placed by the Buyer, or upon telephone or telex requests by the Buyer’s representatives. Such telephone or telex requests shall be confirmed by subsequent Buyer’s orders for such Seller Parts within a reasonable time.	
 
Exhibit H Page 9/24

3.3	Delivery Status	
The Seller shall make available to the Buyer on the Airbus Spares Portal the status of supplies against orders.
 
3.4	Excusable Delay	
Clause 10.1 of the Agreement shall apply to the Material support.
 
3.5	Shortages, Overshipments, Non-Conformity in Orders	
 
3.5.1	The Buyer shall immediately and not later than ***** days after receipt of Material delivered pursuant to a purchase order advise the Seller:	
 
 	(a)	of any alleged shortages or overshipments with respect to such order,	
 
 	(b)	of all non-conformities to specification of parts in such order subjected to inspections by the Buyer.	
In the event of the Buyer not having advised the Seller of any such alleged shortages, overshipments or non-conformity within the above defined period, the Buyer shall be deemed to have accepted the deliveries.
 
3.5.2	In the event of the Buyer reporting overshipments or non-conformity to the specifications within the period defined in Clause 3.5.1 the Seller shall, if the Seller accepts such overshipment or non-conformity, either replace the concerned Material or credit the Buyer for the returned Material: In such case, transportation costs shall be borne by the Seller.	
The Buyer shall endeavour to minimize such costs, particularly through the use of its own airfreight system for transportation at no charge to the Seller.
 
3.6	Packaging	
All Material shall be packaged in accordance with ATA 300 Specification, Category III for consumable/expendable material and Category II for rotables. Category I containers shall be used if requested by the Buyer and the difference between Category I and Category II packaging costs shall be paid by the Buyer together with payment for the respective Material.
 
3.7	Cessation of Deliveries	
The Seller reserves the right to restrict, stop or otherwise suspend deliveries if the Buyer fails to meet its obligations defined in Clauses 4.2 thru 4.4.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 10/24

4.	COMMERCIAL CONDITIONS	
 
4.1	Price	
 
4.1.1	The Material prices shall be:	
 
 	-	Free Carrier (FCA) the Airbus Spares Support Centre for deliveries from the Airbus Spares Support Centre.	
 
 	-	Free Carrier (FCA) place specified by the Seller for deliveries from other Seller or Supplier facilities as the term Free Carrier (FCA) is defined by the publication N°560 of the International Chamber of Commerce published in January 2000.	
 
4.1.2	Prices shall be the Seller’s sales prices in effect on the date of receipt of the order (subject to reasonable quantities and delivery time) and shall be expressed in US-Dollars.	
 
4.1.3	Prices of Seller Parts shall be in accordance with the current Seller’s Spare Parts Price Catalog. Prices shall be firm for each calendar year. The Seller, however, reserves the right to revise the prices of said parts during the course of the calendar year in the following cases:	
 
 	-	significant revision in manufacturing costs,	
 
 	-	significant revision in manufacturers purchase price of parts or materials (including significant variation of exchange rates),	
 
 	-	significant error in estimation or expression of any price.	
 
4.1.4	Prices of Material as defined in sub-Clauses 1.2(ii) thru 1.2(iv) shall be the valid list prices of the Supplier augmented by the Sellers handling charge. The percentage of the handling charge shall vary with the Material’s value and shall be determined item by item.	
 
4.2	Payment Procedures and Conditions	
 
4.2.1	Payment shall be made in immediately available funds in the quoted currency. In case of payment in any other free convertible currency, the exchange rate valid on the day of actual money transfer shall be applied for conversion.	
 
4.2.2	Payment shall be made by the Buyer to the Seller within ***** from date of the invoice to the effect that the value date of the credit to the Seller’s account of the payment falls within this ***** period.	
 
4.2.3	The Buyer shall make all payments hereunder to the Seller’s account with:	
VEREINS & WESTBANK AG—20457 Hamburg—Germany
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 11/24

Account: *****
Swift Address: *****
using international IBAN Code: *****
or as otherwise directed by the Seller.
 
4.2.4	All payments due to the Seller hereunder shall be made in full without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Buyer shall procure that the sums received by the Seller under this Exhibit “H” shall be equal to the full amounts expressed to be due to the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature except that if the Buyer is compelled by law to make any such deduction or withholding the Buyer shall pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding shall equal the amounts which would have been received in the absence of such deduction or withholding.	
 
4.2.5	If any payment due to the Seller is not received in accordance with the timescale provided in Clause 4.2.2, without prejudice to the Seller’s other rights under this Exhibit “H”, the Seller shall be entitled to interest for late payment calculated on the amount due from and including the due date of payment up to and including the date when the payment is received by the Seller at a rate equal *****	
 
4.3	Credit Assurance	
The Seller and the Buyer agree that the Seller has the right to request and the Buyer shall upon such request provide the Seller with sufficient financial means in due time in order to assure the Seller of full payment of the Buyers’ current and/or expected payment obligations.
 
4.4	Title	
Title to any Material purchased under this Exhibit “H” remains with the Seller until full payment of the invoices and any interest thereon has been received by the Seller.
The Buyer shall undertake that Material, title to which has not passed to the Buyer, shall be kept free from any debenture or mortgage or any similar charge or claim in favour of any third party.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 12/24

4.5	Buy-Back	
 
4.5.1	Buy-Back of Obsolete Material	
The Seller agrees to buy back unused Seller Parts which may become obsolete before Delivery of the first Aircraft to the Buyer as a result of mandatory modifications required by the Buyer’s or the Seller’s Aviation Authorities, subject to the following:
 
4.5.1.1	The Seller Parts involved shall be those, which the Buyer is directed by the Seller to scrap or dispose of and which cannot be reworked or repaired to satisfy the revised standard.	
 
4.5.1.2	The Seller shall credit to the Buyer the purchase price paid by the Buyer for any such obsolete parts, provided that the Seller’s liability in this respect does not extend to quantities in excess of the Seller’s Initial Provisioning recommendation.	
 
4.5.1.3	The Seller shall use its reasonable efforts to obtain for the Buyer the same protection	
 
4.5.2	Buy-Back of Initial Provisioning Surplus Material	
 
4.5.2.1	The Seller agrees that at any time after ***** to the Buyer, the Buyer shall have the right to return to the Seller, at a credit of ***** of the original purchase price paid by the Buyer, unused and undamaged Material as per sub-Clause 1.2(i) and at a credit of ***** of the original Supplier list price, unused and undamaged Material as per sub-Clause 1.2(ii) originally purchased from the Seller under the terms hereof, provided that the selected protection level does not ***** with a transit time of ***** and said Material was recommended for the Buyer’s purchase in the Seller’s Initial Provisioning recommendations to the Buyer and does not exceed the provisioning quantities recommended by the Seller, and is not shelflife limited, or does not contain any shelflife limited components with ***** shelflife remaining when returned to the Seller and provided that the Material is returned with the Seller’s original documentation (tag, certificates).	
 
4.5.2.2	In the event of the Buyer electing to procure Material in excess of the Seller’s recommendation, the Buyer shall notify the Seller thereof in writing, with due reference to the present Clause. The Seller’s agreement in writing is necessary before any Material in excess of the Seller’s recommendation shall be considered for buy-back.	
 
4.5.2.3	It is expressly understood and agreed that the rights granted to the Buyer under this Clause 4.5.2 shall not apply to Material which may become surplus to requirements due to obsolescence at any time or for any reason other than those set forth in Clause 4.5.1. above.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 13/24

4.5.2.4	Further, it is expressly understood and agreed that all credits described in this Clause 4.5.2 shall be provided by the Seller to the Buyer exclusively by means of credit notes to be entered into the Buyer’s spares account with the Seller.	
 
4.5.2.5	All transportation costs for the return of obsolete or surplus Material under this Clause 4, including any insurance and customs duties applicable or other related expenditures, shall be borne by the Buyer.	
 
4.6	Inventory Usage Data	
The Buyer undertakes to provide periodically to the Seller a quantitative list of the parts used for maintenance and overhaul of the Aircraft. The range and contents of this list shall be established according to SPEC 2000, Chapter 5, or as mutually agreed between the Seller and the Buyer.
 
Exhibit H Page 14/24

5.	WARRANTIES	
 
5.1	Seller Parts	
Subject to the limitations and conditions as hereinafter provided, the Seller warrants to the Buyer that all Seller Parts in sub-Clause 1.2(i) shall at delivery to the Buyer:
 
 	(i)	be free from defects in material,	
 
 	(ii)	be free from defects in workmanship, including without limitation processes of manufacture,	
 
 	(iii)	be free from defects arising from failure to conform to the applicable specification for such part.	
 
5.2	Warranty Period	
 
5.2.1	The standard warranty period for new Seller Parts is ***** after delivery of such parts to the Buyer.	
 
5.2.2	The standard warranty period for used Seller Parts delivered, by and/or repaired, modified, overhauled or exchanged by the Seller is ***** after delivery of such parts to the Buyer.	
 
5.3	Buyer’s Remedy and Seller’s Obligation	
The Buyers remedy and Sellers obligation and liability under this Clause 5 are limited to the repair, replacement or correction, at the Seller’s expense and option, of any Seller Part which is defective.
The Seller may equally at its option furnish a credit to the Buyer for the future purchase of Seller Parts equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Seller Parts.
The provisions of Clauses 12.1.5 thru 12.1.10 of the Agreement shall apply to this Clause 5 of this Exhibit “H”.
 
5.4	Waiver, Release and Renunciation	
THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 5 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR INSURERS EXPRESS OR IMPLIED, ARISING BY LAW OR
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 15/24

OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY MATERIAL DELIVERED UNDER THIS AGREEMENT INCLUDING BUT NOT LIMITED TO:
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY. WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR. NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR MATERIAL DELIVERED HEREUNDER.	
THE SELLER AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING; LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY MATERIAL DELIVERED UNDER THIS AGREEMENT.
FOR THE PURPOSES OF THIS CLAUSE 5.4, “THE SELLER” SHALL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
 
Exhibit H Page 16/24

6.	SELLER PARTS LEASING	
 
6.1	General	
The terms and conditions of this Clause 6 shall apply for the leasing of Seller Parts listed in Appendix A to this Clause 6, hereinafter “ Leased Parts ” or a “ Leased Part ”, and shall form a part of each lease of Seller Parts by the Buyer from the Seller.
 
6.1.1	The terms and conditions of this Clause 6 shall prevail over all other terms and conditions appearing on any order form or other document pertaining to Leased Parts. The Seller’s current proprietary parts Repair Guide shall be provided to the Buyer and shall be used, along with this Agreement, as the basis for Seller Parts lease transactions between the Buyer and the Seller. In case of discrepancy, this Agreement shall prevail.	
 
6.1.2	For the purposes of this Clause 6, the term “ Lessor ” refers to the Seller and the term “ Lessee ” refers to the Buyer.	
 
6.1.3	Parts not included in Appendix A to this Clause 6 shall be the subject of a separate lease agreement supplied by the Seller at the Buyer’s request.	
 
6.2	Leasing Procedure	
Upon the Lessee’s request by telephone (to be confirmed promptly in writing), facsimile, cable, SITA, letter or other written instrument, the Lessor shall lease such Leased Parts, which shall be made available in accordance with Clause 3.2.3 for the purpose of being substituted for a part removed from an Aircraft for repair or overhaul. Each lease of Leased Parts shall be evidenced by a lease document (hereinafter “ Lease ”) issued by the Lessor to the Lessee not later than seven (7) days after delivery of the Leased Part.
 
6.3	Lease Period	
 
6.3.1	The total term of the Lease (hereinafter “ Lease Period ”) shall be counted from inclusively the day the Leased Part is delivered Free Carrier (FCA) up to inclusively the day of receipt of the Leased Part back at the Lessor or at any other address indicated by the Lessor.	
 
6.3.2	If a Leased Part is not returned by the Lessee within ***** the Lease shall be converted into a sale. Should the Lessee not return the Leased Part to the Lessor within ***** and if the Lessor so elects, by giving prompt written notice to the Lessee, such non return shall be deemed to be an election by the Lessee to purchase the Leased Part and, upon the happening of such event, the Lessee shall pay the Lessor all amounts due under Clauses 6.4 and 6.8 for the Leased Part for the Lease Period of ***** plus the current sales price of the Leased Part at the moment of the conversion of the Lease.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 17/24

6.3.3	Notwithstanding the foregoing, the Lease Period shall end in the event of and upon the date that, the Lessee acquiring title to a Leased Part as a result of exercise of the Lessee’s option to purchase the Leased Part, as provided for herein.	
 
6.3.4	The chargeable period to lease a part is a minimum of seven (7) days. If the shipment of the Leased Part has been arranged and the Lessee cancels the lease order, the minimum chargeable period of seven (7) days shall apply.	
 
6.4	Lease Charges and Taxes	
The Lessee shall pay the Lessor:
 
 	(i)	a Lease fee per day of the Lease Period amounting to ***** of the part’s sales price as set forth in the Seller’s Spare Parts Price Catalog in effect on the date of the commencement of the Lease Period;	
 
 	(ii)	any reasonable additional costs which may be incurred by the Lessor as a direct result of such Lease, such as recertification, inspection, test, repair, overhaul, removal of paint and/or repackaging costs as required to place the Leased Part in a satisfactory condition for lease to a subsequent customer;	
 
 	(iii)	all transportation and insurance charges; and	
 
 	(iv)	any taxes, charges or custom duties imposed upon the Lessor or its property as a result of the Lease, sale, delivery, storage or transfer of any Leased Part. All payments due hereunder shall be made in accordance with Clause 4.	
 
6.5	Risk of Loss, Maintenance, Storing and Repair of the Leased Part	
 
 	(i)	The Lessee shall he liable for maintaining and storing the Leased Part in accordance with all applicable rules of the relevant aviation authorities and the technical documentation and other instructions issued by the Lessor.	
 
 	(ii)	Except for normal wear and tear, each Leased Part shall be returned to the Lessor in the same condition as when delivered to the Lessee.	
 
 	(iii)	The Leased Part shall be repaired solely at repair stations approved by the Lessor. If during the Lease Period any inspection, maintenance, rework and/or repair is carried out to maintain the Leased Part serviceable, in accordance with the standards of the Lessor, the Lessee shall provide details and documentation about the scope of the work performed, including respective inspection, work and test reports.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 18/24

 	(iv)	All documentation shall include, but not be limited to, evidence of incidents such as hard landings, abnormalities of operation and corrective action taken by the Lessee as a result of such incidents.	
 
 	(v)	The Leased Part must not be lent to a third party.	
 
 	(vi)	Risk of loss or damage to each Leased Part shall remain with the Lessee until such Leased Part is redelivered to the Lessor at the return location specified in the applicable Lease. If a Leased Part is lost, damaged beyond economical repair or damaged unrepairable, the Lessee shall be deemed to have exercised its option to purchase said Leased Part in accordance with Clause 6.8 as of the date of such loss or damage.	
 
6.6	Title	
Title to each Leased Part shall remain with the Lessor at all times unless the Lessee exercises its option to purchase in accordance with Clause 6.8, in which case title shall pass to the Lessee upon receipt by the Lessor of the payment for the purchased Leased Part.
 
6.7	Return of Leased Part	
 
6.7.1	The Lessee shall return the Leased Part at the end of the Lease Period to the address indicated on the individual lease document provided by the Lessor at the start of each Lease transaction.	
 
6.7.2	The return shipping document shall indicate the reference of the Lease document and the removal data such as:	
 
 	(i)	aircraft manufacturer serial number	
 
 	(ii)	removal date	
 
 	(iii)	total flight hours and flight cycles for the period the Leased Part was installed on the aircraft	
 
 	(iv)	documentation in accordance with Clause 6.5.	
If the Lessee cannot provide the above mentioned data and documentation for the Leased Part to be returned from Lease, lease charges of ***** of the Lessor’s current sales price for a new part plus ***** of the accumulated Lease fees shall be invoiced. According to the Lessor’s quality standards, parts are not serviceable without the maintenance history data outlined above and have to be scrapped on site.
 
6.7.3	The unserviceable or serviceable tag issued by the Lessee and the original Lessor certification documents must be attached to the Leased Part.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 19/24

6.7.4	Except for normal wear and tear, each Leased Part shall be returned to the Lessor in the same condition as when delivered to the Lessee. The Leased Part shall be returned with the same painting as when delivered (Airbus grey or primary paint). If the Lessee is not in a position to return the Leased Part in the same serviceable condition, the Lessee has to contact the Lessor for instructions.	
 
6.7.5	The Leased Part is to be returned in the same shipping container as that delivered by the Lessor. The container must be in a serviceable condition, normal wear and tear excepted.	
 
6.7.6	The return of an equivalent part different from the Leased Part delivered by the Lessor is not allowed without previous written agreement of the Lessor.	
 
6.8	Option to Purchase	
 
6.8.1	The Lessee may at its option, exercisable by written notice given to the Lessor during the Lease Period, elect to purchase the Leased Part, in which case the then current sales price for such Leased Part as set forth in the Seller’s Spare Parts Price Catalog shall be paid by the Lessee to the Lessor. Should the Lessee exercise such option, ***** of the Lease rental charges due pursuant to sub-Clause 6.4(i) shall be credited to the Lessee against said purchase price of the Leased Part.	
 
6.8.2	In the event of purchase, the Leased Part shall be warranted in accordance with Clause 5 as though such Leased Part were a Seller Part, but the warranty period shall be deemed to have commenced on the date such part was first installed on any Aircraft; provided however, that in no event shall such warranty period be less than ***** from the date of purchase of such Leased Part. A warranty granted under this Clause 6.8.2 shall be in substitution for the warranty granted under Clause 6.9 at the commencement of the Lease Period.	
 
6.9	Warranties	
 
6.9.1	The Lessor warrants that each Leased Part shall at the time of delivery be free from defects in material and workmanship which could materially impair the utility of the Leased Part.	
 
6.9.2	Warranty and Notice Periods	
The Lessee’s remedy and the Lessor’s obligation and liability under this Clause 6.9, with respect to each defect, are conditioned upon:
 
 	(i)	the defect having become apparent to the Lessee within the Lease Period and	
 
 	(ii)	the return by the Lessee as soon as practicable to the return location specified in the applicable Lease, or such other place as may be mutually agreed upon, of the Leased Part claimed to be defective and	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 20/24

 	(iii)	the Lessor’s warranty administrator having received written notice of the defect from the Lessee within ***** after the defect becomes apparent to the Lessee, with reasonable proof that the claimed defect is due to a matter embraced within the Lessor’s warranty under this Clause 6.9 and that such defect did not result from any act or omission of the Lessee, including but not limited to any failure to operate or maintain the Leased Part claimed to be defective or the Aircraft in which it was installed in accordance with applicable governmental regulations and the Lessor’s applicable written instructions.	
 
6.9.3	Remedies	
The Lessee’s remedy and the Lessor’s obligation and liability under this Clause 6.9 with respect to each defect are limited to the repair of such defect in the Leased Part in which the defect appears, or, as mutually agreed to the replacement of such Leased Part with a similar part free from defect.
Any replacement part furnished under this Clause 6.9.3 shall be deemed to be the Leased Part so replaced.
 
6.9.4	Suspension and Transportation Costs	
 
6.9.4.1	If a Leased Part is found to be defective and covered by this warranty, the Lease Period and the Lessee’s obligation to pay rental charges as provided for in sub-Clause 6.4(i) shall be suspended from the date on which the Lessee notifies the Lessor of such defect until the date upon which the Lessor has repaired, corrected or replaced the defective Leased Part, provided, however, that the Lessee has, promptly after giving such notice to the Lessor, withdrawn such defective Leased Part from use. If the defective Leased Part is replaced, such replaced part shall be deemed to no longer be a Leased Part under the Lease as of the date upon which such part was received by the Lessor at the return location specified in the applicable Lease.	
If a Leased Part is found to be defective upon first use by the Lessee and is covered by this warranty, no rental charges as provided in sub-Clause 6.4(i) shall accrue and be payable by the Lessee until the date on which the Lessor has repaired, corrected or replaced the defective Leased Part.
 
6.9.4.2	All transportation and insurance costs of returning the defective Leased Part and returning the repaired, corrected or replacement part to the Lessee shall be borne by the Lessor.	
 
6.9.5	Wear and Tear	
Normal wear and tear and the need for regular maintenance and overhaul shall not constitute a defect or non-conformance under this Clause 6.9.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Exhibit H Page 21/24

6.9.6	Waiver, Release and Renunciation	
THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LESSOR AND/OR ITS SUPPLIERS AND REMEDIES OF THE LESSEE SET FORTH IN THIS CLAUSE 6 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LESSOR AND/OR ITS SUPPLIERS AND RIGHTS. CLAIMS AND REMEDIES OF THE LESSEE AGAINST THE LESSOR, ITS SUPPLIERS AND/OR THEIR INSURERS EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY LEASED PART DELIVERED UNDER THESE LEASING CONDITIONS INCLUDING BUT NOT LIMITED TO:
 
 	(A)	ANY WARRANTY AGAINST HIDDEN DEFECTS ( GARANTIE DES VICES CACHES );	
 
 	(B)	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;	
 
 	(C)	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;	
 
 	(D)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY. WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE LESSOR’S OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND	
 
 	(E)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY LEASED PART DELIVERED HEREUNDER.	
THE LESSOR AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL. OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY LEASED PART DELIVERED UNDER THESE LEASING CONDITIONS.
FOR THE PURPOSES OF THIS CLAUSE 6.9.6, “THE LESSOR” SHALL INCLUDE THE LESSOR, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
 
Exhibit H Page 22/24

APPENDIX “A” TO CLAUSE 6 OF EXHIBIT “H”
SELLER PARTS AVAILABLE FOR LEASING
AILERONS
APU DOORS
CARGO DOORS
PASSENGER DOORS
ELEVATORS
FLAPS
LANDING GEAR DOORS
RUDDER
TAIL CONE
SLATS
SPOILERS
AIRBRAKES
WING TIPS
WINGLETS
 
Exhibit H Page 23/24

7.	TERMINATION OF SPARES PROCUREMENT COMMITMENTS	
 
7.1	In the event of the Agreement being terminated with respect to any Aircraft due to causes provided for in Clauses 10, 11 or 20 of the Agreement, such termination may also affect the terms of this Exhibit “H” to the extent set forth in Clause 7.2 below.	
 
7.2	Any termination under Clauses 10, 11 or 20 of the Agreement shall discharge all obligations and liabilities of the parties hereunder with respect to such undelivered spare parts, services, data or other items to be purchased hereunder which are applicable to those Aircraft for which the Agreement has been terminated. Unused spare parts in excess of the Buyer’s requirements due to such Aircraft cancellation shall be repurchased by the Seller as provided for in Clause 4.5.2.	
 
Exhibit H Page 24/24

LETTER AGREEMENT N°0
CONTENTS
LETTERS AGREEMENTS

Letter Agreement N° 1:	  	*****	
		
Letter Agreement N° 2:	  	FINANCING	
		
Letter Agreement N° 3:	  	*****	
		
Letter Agreement N° 4:	  	AIRCRAFT ***** AND DELIVERY DATE *****	
		
Letter Agreement N° 5:	  	PERFORMANCES GUARANTEES	
		
Letter Agreement N° 6:	  	PRODUCT SUPPORT	
		
Letter Agreement N° 7:	  	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N o 1 Page 1/1

LETTER AGREEMENT N°1
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: *****
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°1 Page 1/4

LETTER AGREEMENT N°1
 
1.	Airframe Base *****	
The seller shall *****
The Airframe Base *****
The Airframe Base *****
The Airframe Base *****
 
2.	*****	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°1 Page 2/4

LETTER AGREEMENT N°1
*****
 
3	*****	
The Seller shall *****
 
4	*****	
The Seller *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°1 Page 3/4

LETTER AGREEMENT N°1
*****
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	

CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°1 Page 4/4

LETTER AGREEMENT N°2
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: FINANCING SUPPORT
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de CV. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
Letter Agreement N°2 Page 1/3

LETTER AGREEMENT N°2
 
1.	ECA FINANCING SUPPORT	
The Seller will assist the Buyer in applying for support from the Export Credit Agencies of France, Germany and the United Kingdom (the “ ECAs ”) for the financing of the acquisition of the Aircraft.
Under the *****
The Seller shall assist the Buyer in its discussions with the ECAs. To this end, the Buyer and the Seller shall co-operate closely in order to provide all relevant information as may be requested by the ECAs, in due course.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°2 Page 2/3

LETTER AGREEMENT N°2
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	

CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
Letter Agreement N°2 Page 3/3

LETTER AGREEMENT N°3
CONTROLADORA COMPAÑÍA
DE AVIACIÓN, S.A. de CV
MEXICO
Subject: *****
CONTROLADORA COMPAÑÍA DE AVIACIÓN, S.A. de C.V (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°3 Page 1/4

LETTER AGREEMENT N°3
 
1	General	
The Seller hereby ***** as the sixteen (16) Aircraft subject to the Agreement, except that no delivery date is reserved.
The ***** shall be manufactured in accordance with the Aircraft definition specified in Clause 2 of the Agreement and including any development changes which are incorporated by the Seller prior to the delivery of the *****
 
2	***** 	
The Airframe Basic Price of the ***** of the Agreement for the firm ordered Aircraft. Without limiting the generality of the foregoing, the *****
The Engine Reference Price and associated price revision formula shall be as quoted by the corresponding Engine Manufacturer at the time of ***** or as otherwise agreed between the Buyer and the Engine Manufacturer.
 
3	***** 	
*****
 
4	***** and Delivery Date	
Buyer shall have the *****
Upon *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°3 Page 2/4

LETTER AGREEMENT N°3
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	

CONTROLADORA COMPAÑÍA
DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
Letter Agreement N°3 Page 3/4

LETTER AGREEMENT N°3
Upon confirmation of the Buyer’s acceptance of the Seller’s proposed ***** the Buyer shall transfer to Seller’s bank account the initial pre-delivery payment then due for such Aircraft according to Clause 5 of the Agreement, ***** If the Buyer does not accept the Seller’s proposed *****
 
5	*****	
In the event that the Buyer fails to *****
 
6	*****	
Upon the ***** according to the above procedure, the Seller ***** The Buyer shall pay to the Seller *****
The *****
 
7	Assignment	
The ***** are personal to the Buyer and cannot be assigned to any third party without the Seller’s prior written consent.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°3 Page 4/4

LETTER AGREEMENT N °4
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: AIRCRAFT ***** AND DELIVERY DATE*****
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°4 Page 1/3

LETTER AGREEMENT N°4
 
1	AIRCRAFT *****	
The Buyer shall have *****
Should the Buyer wish to ***** prior the delivery of the concerned Aircraft.
The *****
Upon confirmation from the Buyer of its *****
 
2	*****  DELIVERY POSITION	
Should the Buyer and *****
 
3	*****	
For ***** (as specified in Clause 9.1 of the Agreement), of its decision to ***** The Seller shall then provide the Buyer with *****
Upon confirmation of the ***** as specified in Clause 9.1 of the Agreement *****
The *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°4 Page 2/3

LETTER AGREEMENT N°4
Should the Buyer ***** shall not occur.
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (I) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	

CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S. A. de C.V.	  	AIRBUS S.A.S.	
				
By    	 	:        	  	By  	  	:        	
				
Its     	 	:        	  	Its	  	:        	
				
Date  	 	:        	  	Date  	  	:        	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°4 Page 3/3

LETTER AGREEMENT N°5 A
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: A319-100 PERFORMANCES GUARANTEES
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
Letter Agreement N°5 A Page 1/7

LETTER AGREEMENT N°5 A
 
1.	AIRCRAFT CONFIGURATION	
The guarantees defined below (the “ Guarantees ”) are applicable to the A319-100 Aircraft as described in the Standard Specification Ref.***** and amended by Specification Change Notices (SCN) for:
 
 	(i)	increase of the design weights as follows:	
 
 	    	Maximum Take-off Weight to *****	
 	    	Maximum Landing Weight to *****	
 	    	Maximum Zero Fuel Weight to *****	
 
 	(ii)	installation of International Aero Engines (IAE) V2527M-A5 engines	
hereinafter referred to as the “ Specification ”, and without taking into account any further changes thereto as provided in the Agreement
 
2.	***** GUARANTEES	
 
2.1	*****	
 
2.1.1	The Aircraft will be capable of ***** of ***** when operated under the conditions defined below:	
 
2.1.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure attitude at destination airport is *****
 
2.1.3	Allowances of *****	
 
2.1.4	***** the destination airport are	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 A Page 2/7

LETTER AGREEMENT N°5 A
conducted in ***** Climb and descent speeds *****
The ***** these climb, cruise and descent phases*****
 
2.1.5	Allowances of *****	
 
2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described above.	
Trip time is defined as the time spent during take-off and initial climb, climb, cruise, descent and approach and land as described above.
 
2.1.7	At the end of approach and land ***** will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.1.8	*****	
 
2.2	*****	
 
2.2.1	The Aircraft will be capable of ***** when operated under the conditions defined below:	
 
2.2.2	The departure airport conditions at ***** are assumed to be such as to allow the required take-off weight to be used without restriction. Pressure altitude at departure airport is *****	
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 A Page 3/7

LETTER AGREEMENT N°5 A
 
2.2.3	Allowances of ***** the departure airport with acceleration to climb speed.	
 
2.2.4	Climb from ***** Climb and descent speeds below ***** will be *****	
The ***** these climb, cruise and descent phases shall be *****
 
2.2.5	Allowances of ***** at the destination airport.	
 
2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described above.	
Trip time is defined as the time spent during take-off and initial climb, climb, cruise, descent and approach and land as described above.
 
2.2.7	At the end of approach and land ***** will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.8	*****	
 
3.	MANUFACTURER’S *****	
The Seller ***** that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 6.2 below, shall *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 A Page 4/7

LETTER AGREEMENT N°5 A
 
4.	GUARANTEE CONDITIONS	
 
4.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
4.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
4.3	When establishing ***** except if otherwise noted.	
 
4.4	***** in Section 21-30.31 of the Specification. *****	
 
4.5	The engines will be operated using ***** unless otherwise stated.	
Where applicable, *****
 
5.	GUARANTEE COMPLIANCE	
 
5.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
5.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
5.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A319-100 aircraft of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the Aircraft.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Letter Agreement N°5 A Page 5/7

LETTER AGREEMENT N°5 A
 
5.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
5.5	*****	
 
5.6	The Seller undertakes to furnish the Buyer with a report or reports *****	
 
6.	ADJUSTMENT OF GUARANTEES	
 
6.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“ Rule Change ”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
6.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of:	
 
 	(a)	Any further configuration change which is the subject of a SCN	
 
 	(b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
7.	EXCLUSIVE GUARANTEES	
***** in the Specification or any other document.
 
8.	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****
 
8.1	Should the Seller *****	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 A Page 6/7

LETTER AGREEMENT N°5 A
 
8.2	In the event the Seller develops and makes available ***** mentioned above *****	
 
8.3	The Seller’s *****	
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	
		
CONTROLADORA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By    :	  	By    :	
		
Its     :	  	Its     :	
		
Date :	  	Date :	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 A Page 7/7

LETTER AGREEMENT N°5 B
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject A320-200 PERFORMANCES GUARANTEES
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
Letter Agreement N°5 B Page 1/7

LETTER AGREEMENT N°5 B
 
1.	AIRCRAFT CONFIGURATION	
The guarantees defined below (the “ Guarantees ”) are applicable to the A320-200 Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	(i)	increase of the design weights as follows:	
 
 	    	Maximum Take-off Weight to *****	
 	    	Maximum Landing Weight to *****	
 	    	Maximum Zero Fuel Weight to *****	
 
 	(ii)	installation of International Aero Engines (IAE) V2527E-A5 engines	
hereinafter referred to as the “ Specification ”, and without taking into account any further changes thereto as provided in the Agreement.
 
2.	***** GUARANTEE	
*****
 
2.1	The Aircraft will be capable of ***** when operated under the conditions defined below:	
 
2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****
 
2.3	Allowances of ***** the departure airport with acceleration to climb speed.	
 
2.4	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 B Page 2/7

LETTER AGREEMENT N°5 B
***** airport are conducted in ISA+10°C conditions. Climb and descent speeds *****
The ***** these climb, cruise and descent phases shall be *****
 
2.5	Allowances ***** at the destination airport.	
 
2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described above.	
Trip time is defined as the time spent during take-off and initial climb, climb, cruise, descent and approach and land as described above.
 
2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.8	*****	
 
3.	MANUFACTURER’S *****	
The Seller ***** that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** with corrections according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 6.2 below, shall *****
 
4.	GUARANTEE CONDITIONS	
 
4.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 B Page 3/7

LETTER AGREEMENT N°5 B
 
4.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
4.3	When establishing *****	
 
4.4	***** as defined in Section 21-30.31 of the Specification. *****	
 
4.5	The engines will be operated *****	
 
4.6	Where applicable, *****	
 
5.	GUARANTEE COMPLIANCE	
 
5.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
5.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
5.3	Compliance with those parts of the Gaurantees ***** (or more, at the Seller’s discretion) A390-200 aircraft of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the Aircraft.	
 
5.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
5.5	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 B Page 4/7

LETTER AGREEMENT N°5 B
 
5.6	The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the Buyer’s A320-200 Aircraft.	
 
6.	ADJUSTMENT OF GUARANTEES	
 
6.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
6.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of:	
 
 	(a)	Any further configuration change which is the subject of a SCN	
 
 	(b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
7.	EXCLUSIVE GUARANTEES	
*****
 
8.	UNDERTAKING REMEDIES	
Should the Aircraft fail to meet any of the Guarantees the Seller *****
 
8.1	Should the Seller *****	
 
8.2	In the event the Seller develops and makes available ***** mentioned above *****	
 
8.3	The Seller’s *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°5 B Page 5/7

LETTER AGREEMENT N°5 B
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	
		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
Letter Agreement N°5 B Page 6/7

LETTER AGREEMENT N°6
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: PRODUCT SUPPORT
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
Letter Agreement N°6 Page 1/4

LETTER AGREEMENT N°6
 
1.	ADOC (Airbus Documentation On-line Consultation)	
For the purpose of the Buyer’s managing the technical Data content to fit with its requirements, the seller will *****
 
1.2	ADOC Job Card Package	
The Seller will provide the source data in SGML format. From the SGML documentation the Buyer builds its own formatted data for production of Job cards using standard Airbus Job Cards models. In addition to the above Customized Job card models can be developed from Buyer’s specifications.
The ADOC Job Card Package delivery includes:
*****
 
1.3	ADOC consultation Package	
The Seller will provide to the Buyer the ADOC consultation Package. The ADOC consultation package makes possible to distribute the data through intranet Extranet or Internet. The ADOC Consultation Packages contain:
*****
 
1.4	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°6 Page 2/4

LETTER AGREEMENT N°6
 
2.	AIRMAN (Aircraft Maintenance Analysis)	
The Seller has developed the AIRMAN software dedicated to maintenance operations for new aircraft equipped with an on-board monitoring function.
AIRMAN’s data analysis, synthesis and presentation provides:
 
 	-	simpler, more effective troubleshooting,	
 
 	-	preventive maintenance recommendations,	
 
 	-	more effective engineering support,	
The result is:
 
 	-	improved aircraft Dispatch Reliability,	
 
 	-	reduced operational costs, and	
 
 	-	reduced maintenance costs.	
*****
 
3.	******	
*****
 
4.	Maintenance and Ground Operation Training *****	
Notwithstanding Clause 16.2.3 of the Agreement, if the Buyer does not require some of the maintenance and ground operation training allowance (as defined in paragraph 1.4.1 and 2.1.1 of Appendix A of Clause 16 of the Agreement), the Seller and the Buyer shall review the situation *****
 
5.	*****	
The Seller shall provide, or cause to be provided, to the Buyer the *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°6 Page 3/4

LETTER AGREEMENT N°6
*****
Should the Buyer *****
 
6.	Maintenance Planning and Operation Support (Maintenance Planning Data System)	
The Seller will provide *****
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	
		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°6 Page 4/4

LETTER AGREEMENT N°7
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
MEXICO
Subject: *****
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS (the “ Seller ”) have entered into an A320 Family Purchase Agreement (the “ Agreement ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°7 Page 1/2

LETTER AGREEMENT N°7
*****
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted	  	Agreed and Accepted	
		
For and on behalf of	  	For and on behalf of	
		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.	  	AIRBUS S.A.S.	
		
By :	  	By :	
		
Its :	  	Its :	
		
Date :	  	Date :	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Letter Agreement N°7 Page 2/2

			
AIRBUS	  	CONCESIONARIA VUELA COMPANIA DE
AVIACION	
		
SPECIFICATION CHANGE NOTICE	  		
	  	SCN Number  32Y72J0011939S2A	
	  	Issue                2	
(SCN)	  	Dated             16-Jun-2006	
	  	Page 1 of 3	
Title: IAE engines - V2527M-A5 at 26 500 lbf nominal thrust (A319-133)
Description
*****
Effect on weight

Manufacturer’s Weight Empty Change	  	:	  	*****	
Operational Weight Empty Change	  	:	  	*****	
Allowable Payload Change	  	:	  	*****	
Remarks / References
Responds to RFC 32Y72J001A
Specification changed by this SCN
A319-100 Aircraft Standard Specification Reference N° J 000 01000
Issue 05 Revision 00 Temporary Revision 00 dated 17-Jan-2005
This SCN requires prior or concurrent acceptance of the following SCN (s) :
Note: This SCN issue replaces and cancels previous one.

Price per aircraft
US DOLLARS : Price and delivery conditions are mentioned above
AT DELIVERY CONDITIONS :
This change will be effective on VOLARIS A319 AIRCRAFT N° 1 and subsequent.
Already Accepted
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
Buyer approval	  	Seller approval	
		
By:	  	By:	
		
Date:	  	Date: 16/06/2006	

			
AIRBUS	  	CONCESIONARIA VUELA COMPANIA DE
AVIACION	
		
SPECIFICATION CHANGE NOTICE	  		
	  	SCN Number     32Y72J0011939S2A	
	  	Issue                   2	
(SCN)	  	Dated                  16-Jun-2006	
	  	Page                    2 of 3	
Specification repercussion:
After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

01-10.02.00	  	The aircraft shall be equipped with two (2) International Aero Engines IAE V2527M-A5 propulsion systems, at a nominal thrust rating of 26 500 lbf (117.0 kN), aircraft model designation A319-133.	
		
72-00.01.00	  	Turbofan engines of the type Int Aero Engines IAE V2527M-A5 shall be installed. -Reference to CFMI engines shall be deleted throughout.	
SFE changes:

Qty                  Description	  	Vendor	
                    Part/Spec N°	  	Remarks	
		
    2                   Engine	  	INT AERO ENGINES AG	
                    IAEV2527M-A5	  		

 

AIRBUS	  	CONCESIONARIA VUELA COMPANIA DE
AVIACION	
		
SPECIFICATION CHANGE NOTICE	  		
	  	SCN Number     32Y72J0011939S2A	
	  	Issue                   2	
(SCN)	  	Dated                  16-Jun-2006	
	  	Page                    3 of 3	
Scope of change (FOR INFORMATION ONLY) 
The Aircraft Flight Manual (AFM) and the Flight Crew Operating Manual (FCOM) shall be up-dated. Flight Management and Guidance Computer (FMGC) shall be pin-programmed.
The installation of the IAE V2527M-A5 engine is subject to successful flight test and certification.

			
FROM
Marlene EBERLE	  	TO
CONTROLADORA VUELA COMPANIA DE
AVIACION, S.A. DE C.V.	
		
LOCATION DEPARTMENT
Hamburg / CCDGA	  	Andrés FABRE	
		
DATE
24th April 2006	  	Technical Director 
andres.fabre@volaris.com	
		
PHONE
+49 40 743 78771	  	Fernando SUAREZ	
		
FAX
+49 40 743 76056	  	Financial Director 
fernando suarez@volar.com.mx	
		
E-MAIL
marlene.eberle@airbus.com	  		
		
REFERENCE
CCDGA ME/me No. 334.0097/06	  		
Subject : Delivery schedule for the A319 Aircraft MSN 2771 — Issue 2
Dear Sirs,
Further to your request, we would like to inform you that delivery of the above mentioned Aircraft has been modified and is currently scheduled in ***** as follows:

Ground Checks on	  	*****	
Acceptance Flight on	  	*****	
Technical Acceptance Completion on	  	*****	
Transfer of Title on	  	*****	
Best regards
Marlene EBERLE
Contracts Administration Manager – Hamburg
NOTA : with the exception of the relevant Airworthiness Authorities representatives, access to the Aircraft will be restricted to members of the delivery team who are your (Buyer’s) employees. Should you intend to delegate the technical acceptance in whole or in part to operators or other third parties, please be aware that a Participation Agreement or a Delegation Letter to that effect will have to be consented to by Airbus prior to the start of the technical acceptance process.
 
Cc:	Eric SAHORES	
Arturo BARREIRA
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
TO
Fernando Suarez - CFO	  	FROM
Matthieu GOBERT	
		
COMPANY
Controladora Vuela Campania de Aviacion
S.A. de C.V. (“Volaris”)	  	LOCATION/DEPARTMENT
CCDA	
		
E-MAIL
Femando.suarez@volaris.com.m	  	DATE
17 July 2006	
		
	  	PHONE
+33 (0)5 6193 3824	
		
COPY
Alfonso Ascencie – Volaris
Andres Fabre - Volaris	  	FAX
+33 (0)5 6193 3994	
		
	  	E-MAIL
matthieu.gobert@airbus.com	
		
	  	OUR REFERENC
MG 336.1120/06	
 
Subject :	A320 Family Purchase Agreement dated October 28, 2005 (the “Agreement”) rescheduling of the A319 Aircraft Rank #4 and Rank #5 (the “Advanced Aircraft”).	
This is to formalize Airbus and Volaris agreement to reschedule two A319-100 Aircraft as specified hereunder.
This Letter Agreement will become effective upon execution hereof and will formally amend the Agreement as further set out herein.
 
1.	Rescheduling of the A319-100 Aircraft Rank #4 and Rank #5	
 
1.1	Aircraft Types and Delivery Months	
Airbus and Volaris agree that the following A319-100 are rescheduled with new delivery dates as described hereunder:

Contractual Rank	 	Current Del. Month	 	New Del. Month	
A319-100 #4	 	*****	 	*****	
A319-100 #5	 	*****	 	*****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the Advanced Aircraft will be as forth in the Agreement for the A319 Aircraft.
 
1.2	Pre-delivery Payments	
With respect to the A319 Rank #4, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** (see exh. A hereto).
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 1/6

With respect to the A319 Rank #5 Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** (see exh. A hereto).
Such Predelivery Payments will be applied as Predelivery Payments with respect to the Advanced Aircraft.
As a result of the rescheduling, an amount of ***** will be due for each of the Advanced Aircraft respectively on ***** (see exh. A hereto).
Regarding the delta between the due amount and received amount for each Pre-delivery payment already paid, the total amount to be paid by Volaris on ***** is ***** (see exh. B hereto).
 
2.	Aircraft Definition	
Airbus hereby notifies and Volaris agrees that due to the industrial planning and advancement of the two Aircraft, the Advanced Aircraft will not be equipped with the ***** For the sake of clarity, the ***** to be delivered to Volaris starting from *****
 
3.	Miscellaneous	
The existing agreements between Airbus and Volaris shall be deemed amended to the extent herein provided, and, except as specifically amended hereby, shall continue in full force and effect in accordance with their original terms. All capitalized terms not otherwise defined herein shall have the meanings provided for in the existing agreements.
Please confirm your agreement on the above by countersigning this letter as “agreed and accepted”.

Yours sincerely,	  	Agreed and Accepted
Controladora Vuela Compania de Aviacion
S.A. de C.V	
		
Matthieu Gobert
Contracts Administration Manager	  	By:	
		
CC:   Eric Sahores – Airbus S.A.S.
Arturo Barreira – Airbus S.A.S.	  	Its:	
	  	Date:	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 2/6

Exhibit “A”
- New Predelivery Payments Schedule -
 
Page 3/6

									
AIRBUS
CCDAT	  	Simu : 03	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	12 Jul 2006	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 4/6

Exhibit “B”
- Delta on Predelivery Payments paid -

*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
TO
Fernando Suarez—CFO	  	FROM
Mathieu GOBERT	
		
COMPANY
Controladora Vuela Campania de Aviacian S.A. de C.V. (“ Volaris ”)	  	LOCATION / DEPARTMENT
CCDA	
		
E-MAIL
Fernando.suarez@vvolaris.com.mx	  	DATE
27 July 2007	
		
	  	PHONE
+33 (0)5 6193 3824	
		
COPY
Alfonso Ascencio – Volaris
Andres Fabre – Volaris	  	FAX
+33 (0)5 6193 3994	
		
	  	E-MAIL
matthieu.gobert@airbus.com	
		
	  	OUR REFERENC
MG 336.0754/	
 
Subject :	A320 Family Purchase Agreement dated October 28, 2005 (the “Agreement”) rescheduling of the A319 Aircraft Rank #14 (the “Deferred Aircraft”).	
This is to formalize Airbus and Volaris agreement to reschedule one A319-100 Aircraft as specified hereunder.
This Letter Agreement will become effective upon execution hereof and will formally amend the Agreement as further set out herein.
 
1.	Rescheduling of the A319-100 Aircraft Rank #14	
 
1.1	Aircraft Type and Delivery Month	
Airbus and Volaris agree that the following A319-100 is rescheduled with new Delivery Date as described hereunder:

Contractual Rank	 	Current Del. Month	 	New Del. Month	
A319-100 #14	 	*****	 	*****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the ***** will be set forth in the Agreement for the A319 Aircraft.
 
1.2	Pre-delivery Payments	
With respect to the A319 Rank #14, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** (see exh. A hereto).
Such Predelivery Payments will be applied as Predelivery Payments with respect to the *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 1/2

As a result of the rescheduling, an amount of ***** will be due for the Deferred Aircraft upon execution of this Letter Agreement (see exh. B hereto).
 
2.	Miscellaneous	
The existing agreements between Airbus and Volaris shall be deemed amended to the extent herein provided, and, except as specifically amended hereby, shall continue in full force and effect in accordance with their original terms. All capitalized terms not otherwise defined herein shall have the meanings provided for in the existing agreements.
Please confirm your agreement on the above by countersigning this Letter Agreement as “agreed and accepted”.

Yours sincerely,	  	Agreed and Accepted
Controladora Vuela Compania de Aviacion S.A.
de C.V.	
		
Matthieu Gobert
Contracts Administration Manager	  	By:	
		
CC:    Eric Sahores – Airbus S.A.S
Arturo Barreira – Airbus S.A.S.	  	Its:	
		
	  	Date:	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 2/2

									
AIRBUS
CCDAT	  	Exhibit “A”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	24 Jul 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “B”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	24 Jul 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
TO
Fernando Suarez—CFO	  	FROM
Matthieu GOBERT	
		
COMPANY
Controiadora Vuela Campania de Aviacion S.A. de C.V. (“ Volaris ”)	  	LOCATION/DEPARTMENT
CCDA	
		
E-MAIL
Fernando.suarezvolaris.com.mx	  	DATE
27 July 2007	
		
	  	PHONE
+33 (0)5 6193 3824	
		
COPY
Alfonso Ascencia—Volaris
Andres Fabre—Volaris	  	FAX
+33 (0)5 6193 3994	
		
	  	E-MAIL
matthieu.gobert@airbus.com	
		
	  	OUR REFERENC
MG 336.0753/07	
 
Subject :	A320 Family Purchase Agreement dated October 28, 2005 (the “Agreement”) rescheduling of the A319 Aircraft Rank #10 (the “Advanced Aircraft”).	
This is to formalize Airbus and Volans agreement to reschedule one A319-100 Aircraft as specified hereunder.
This Letter Agreement will become effective upon execution hereof and will formally amend the Agreement as further set out herein.
 
1.	Rescheduling of the A319-100 Aircraft Rank #10	
1.1 Aircraft Type and Delivery Month
Airbus and Volaris agree that the following A319-100 is rescheduled with new Delivery Date as described hereunder

Contractual Rank	 	Current Del. Month	 	New Del. Month	
A319-100 #10	 	*****	 	*****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the Advanced Aircraft will be as set forth in the Agreement for the A319 Aircraft.
1.2 Pre-delivery Payments
With respect to the A319 Rank#10, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** in cash (see exh. A hereto).
Such Predelivery Payments will be applied as Predelivery Payments with respect to the Advanced Aircraft.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 1/1

As a result of the rescheduling, an amount of ***** will be due for the Advanced Aircraft upon execution of this Letter Agreement (see exh. B hereto).
 
2.	Aircraft Definition	
Airbus hereby confirms that the Enhanced cabin and pylons will be embodied on the Advanced Aircraft.
 
3.	Miscellaneous	
The existing agreements between Airbus and Volaris shall be deemed amended to the extent herein provided, and, except as specifically amended hereby, shall continue in full force and effect in accordance with their original terms. All capitalized terms not otherwise defined herein shall have the meanings provided for in the existing agreements.
Please confirm your agreement on the above by countersigning this Letter Agreement as “agreed and accepted”.

		
Yours sincerely,	 	Agreed and Accepted Controladora Vuela
Compania de Aviacion S.A. de C.V.	
			
Matthieu Gobert	 	By:	 	 	
Contracts Administration Manager	 		 		
			
CC:    Eric Sahores – Airbus S.A.S	 	Its:	 	 	
Arturo Barreira – Airbus S.A.S	 		 		
			
	 	Date:	 	 	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “A”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	24 Jul 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “B”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	24 Jul 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
TO
Fernando Suarez – CFO	  	FROM
Matthieu GOBERT	
		
COMPANY
Controiadora Vuela Compania de Aviacion S.A. de C.V. (“ Volaris ”)	  	LOCATION/DEPARTMENT
CSCDA	
		
E-MAIL
Fernando.suarez@volaris.com.mx	  	DATE
19 November 2007	
		
	  	PHONE
+33 (0)5 6193 3824	
		
COPY
Alfonso Ascencia – Volaris
Andres Fabre – Volaris	  	FAX
+33 (0)5 6193 3994	
		
	  	E-MAIL
matthieu.gobert@airbus.com	
		
	  	OUR REFERENCE
MG 336.0753/07	
 
Subject:	A320 Family Purchase Agreement dated October 28, 2005 (the “Agreement”) Conversion and rescheduling of the A319-100 Aircraft Rank #12 of March 2009 into one A320-200 Aircraft in October 2008 (the “Converted Aircraft”).	
Rescheduling of the A319-100 Aircraft Rank #13 (the “Postponed Aircraft”).
This is to formalize Airbus and Volaris agreement to convert and reschedule two A319-100 Aircraft as specified hereunder.
This Letter Agreement will become effective upon execution hereof and will formally amend the Agreement as further set out herein.
 
1.	Conversion and rescheduling A319-100 Aircraft Rank #12	
 
1.1	Aircraft Type and Delivery Month	
Airbus and Volaris agree that the following A319-100 is converted and rescheduled with new Delivery Date as described hereunder:

A/C Rank	 	Cac Id	 	Current Aircraft Type and
Delivery Month	 	New Aircraft Type and
Delivery Month	
12	 	209851	 	A319-100—*****	 	A320-200n *****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the Advanced Aircraft will be as set forth in the Agreement for the A320 Aircraft.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 1/1

1.2	Pre-delivery Payments	
With respect to the A319 Rank #12, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** in cash (see exhibit “A hereto).
Such Predelivery Payments will be applied as Predelivery Payments with respect to the Converted Aircraft.
As a result of the conversion and rescheduling, an amount of ***** will be due for the Converted Aircraft upon execution of this Letter Agreement (see exhibit “B” hereto).
 
2.	Rescheduling of the A319-100 Aircraft Rank #13	
 
2.1	Aircraft Type and Delivery Month	
Airbus and Volaris agree that the following A319-100 is rescheduled with new Delivery Date as described hereunder.

A/C Rank	 	Cac Id	 	Current Delivery Month	 	New Delivery Month	
13	 	209852	 	*****	 	*****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the Postponed Aircraft will be as set forth in the Agreement for the A320 Aircraft.
 
2.2	Pre-delivery Payments	
With respect to the A319 Rank #13, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** in cash (see exhibit “C” hereto).
Such Predelivery Payments will be applied as Predelivery Payments with respect to the Postponed Aircraft.
As a result of the conversion and rescheduling, an amount of ***** will be due for the Postponed Aircraft upon execution of this Letter Agreement (see exhibit “D” hereto).
 
3.	Aircraft Definition	
Airbus hereby confirms that the Enhanced cabin and pylons will be embodied on the Advanced and on the Postponed Aircraft.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

4.	Miscellaneous	
The existing agreements between Airbus and Volans shall be deemed amended to the extent herein provided, and, except as specifically amended hereby, shall continue in full force and effect in accordance with their original terms. All capitalized terms not otherwise defined herein shall have the meanings provided for in the existing agreements.
Please confirm your agreement on the above by countersigning this Letter Agreement as “agreed and accepted”.

Yours sincerely,	 	Agreed and Accepted
Controladora Vuela Compania de Aviacion
S.A. de C.V.	
			
Matthieu Gobert	 	By:	 	 	
Contracts Administration Manager	 		 		
			
CC: Eric Sahores – Airbus S.A.S	 	Its:	 	 	
Arturo Barreira – Airbus S.A.S	 		 		
	 	Date:	 	 	

									
AIRBUS
CCDAT	    	Exhibit “A”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	19 Nov 2007	
	    		  		  		  	Page: 1	
	    		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “B”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	19 Nov 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “C”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	19 Nov 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “D”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	19 Nov 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

			
TO
Fernando Suarez – CFO	  	FROM
Matthieu GOBERT	
		
COMPANY
Controiadora Vuela Compania de Aviacion S.A. de C.V.
(“ Volaris ”)	  	LOCATION/DEPARTMENT
CSCDA	
		
E-MAIL
Fernando.suarez@volaris.com.mx	  	DATE
23 January 2008	
		
	  	PHONE
+33 (0)5 6193 3824	
		
COPY
Alfonso Ascencio – Volaris
Andres Fabre – Volaris	  	FAX
+33 (0)5 6193 3994	
		
	  	E-MAIL
matthieu.gobert@airbus.com	
		
	  	OUR REFERENCE
MG 336.0753/08	
 
Subject :	A320 Family Purchase Agreement dated October 28, 2005 (the “Agreement”) rescheduling of the A319 aircraft Rank #11 (the “Advanced Aircraft”).	
This is to formalize Airbus and Volaris agreement to reschedule one A319-100 Aircraft as specified hereunder.
This Letter Agreement will become effective upon execution hereof and will formally amend the Agreement as further set out herein.
 
1.	Rescheduling of the A319-100 Aircraft Rank #11	
 
1.1	Aircraft Type and Delivery Month	
Airbus and Volaris agree that the following A319-100 is rescheduled with new Delivery Date as described hereunder:

Contractual Rank	 	Current Del. Month	 	New Del. Month	
A319-100 #11	 	*****	 	*****	
It is hereby agreed that the terms and conditions governing the sale and purchase of the Advanced Aircraft will be as set forth in the Agreement for the A320 Aircraft.
 
1.2	Pre-delivery Payments	
With respect to the A319 Rank #11, Airbus hereby confirms having received Pre-delivery Payments in the amount of ***** in cash (see exh.A hereto)
Such Predelivery Payments will be applied as Predelivery payments with respect to the Advanced Aircraft.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 1/1

As a result of the rescheduling, Airbus has received an overdue payment of an amount of ***** Such overdue payment will be applied against the next Predelivery Payment due by Volaris under the PDP Schedule applicable to the Advanced Aircraft (see exh. B hereto).
As a consequence, en amount of ***** will be due for the Advanced Aircraft on May 01 st , 2008 (see exh. B hereto).
 
2.	Miscellaneous	
The existing agreements between Airbus and Volaris shall be deemed amended to the extent herein provided, and, except as specifically amended hereby, shall continue in full force and effect in accordance with their original terms. All capitalized terms not otherwise defined herein shall have the meanings provided for in the existing agreements.
Please confirm your agreement on the above by countersigning this Letter Agreement as “agreed and accepted”.

Yours sincerely,	 	Agreed and Accepted
Controladora Vuela Compania de Aviacion
S.A. de C.V.	
			
Matthieu Gobert	 	By:	 	 	
Contracts Administration Manager	 		 		
			
CC:    Eric Sahores – Airbus S.A.S	 	Its:	 	 	
Arturo Barreira – Airbus S.A.S	 		 		
			
	 	Date:	 	 	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Page 2/2

									
AIRBUS
CCDAT	    	Exhibit “A”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	23 Jan 2007	
	    		  		  		  	Page: 1	
	    		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

									
AIRBUS
CCDAT	  	Exhibit “B”	  	PREDELIVERY PAYMENT SCHEDULE PER AIRCRAFT (in USD)	  	 	  	23 Jan 2007	
	  		  		  		  	Page: 1	
	  		  	VOI - VOLARIS	  		  		
*****
- End -
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

AMENDMENT N° 1
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: 337.0029/07
 
1/1

CONTENTS

CLAUSES	  	TITLES	
		
1	  	*****	
		
2	  	PREDELIVERY PAYMENTS	
		
3	  	CUSTOMER SUPPORT	
		
4	  	CONDITIONS APPLICABLE TO THE *****
AIRCRAFT	
		
5	  	*****	
		
6	  	ENTRY INTO FORCE	
		
7	  	MISCELLANEOUS PROVISIONS	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

2/2

AMENDMENT N° 1 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 1 (hereinafter referred to as the “ Amendment N° 1 ”) is entered into as of the                      day of June 2007
BETWEEN:
AIRBUS S.A.S. , a société par actions simplifiée , legal successor of Airbus S.N.C., formerly known as Airbus G.I.E. [and Airbus Industrie G.I.E.] created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Pisa, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller wish to amend certain provisions of the Agreement as per the terms of this Amendment N° 1.	
 
 	C.	It is understood that the Amendment N° 1, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment N° 1, unless otherwise agreed upon herein.	
 
 	D.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof and “hereunder” and words of similar import refer to this Amendment N° 1.	
 
3/3

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	***** Aircraft Rights	
 
1.1	Following the decision of Buyer to exercise its right to purchase a number of ***** the Seller hereby agrees to manufacture, sell and deliver and the Buyer shall buy and take delivery of fourteen (14) additional A319 Aircraft (for the purpose of this Amendment No.1, the ***** Aircraft ”) upon the terms and conditions set out in the Agreement. Such Incremental Aircraft shall be referred to individually as Aircraft N° 17 to Aircraft N° 30 respectively.	
 
1.2	Sub-Clause 9.1.1 of the Agreement is hereby amended by addition of the following Scheduled Delivery Months for each of the Incremental Aircraft	
QUOTE

“Aircraft N°	 	Scheduled Delivery Month	
Aircraft N° 17	 	*****	
Aircraft N° 18	 	*****	
Aircraft N° 19	 	*****	
Aircraft N° 20	 	*****	
Aircraft N° 21	 	*****	
Aircraft N° 22	 	*****	
Aircraft N° 23	 	*****	
Aircraft N° 24	 	*****	
Aircraft N° 25	 	*****	
Aircraft N° 26	 	*****	
Aircraft N° 27	 	*****	
Aircraft N° 28	 	*****	
Aircraft N° 29	 	*****	
Aircraft N° 30	 	*****	
UNQUOTE
 
2.	Predelivery Payments	
Upon approval by the board of the Buyer of this Amendment N° 1, as set forth in Clause 6(ii) of this Amendment No. 1, the Buyer shall pay the first Predelivery Payment due, pursuant to Clause 5.3.2 of the Agreement *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
4/4

3.	Customer Support and Training	
 
3.1	Unless otherwise expressly stipulated herein, the terms and conditions applicable for the customer support and training to the Aircraft under the Agreement on a per Aircraft basis, shall apply to the *****Aircraft.	
 
3.2	In accordance with the provisions as set forth in Clause 15.1 of the Agreement, the Seller hereby grants to the Buyer ***** of Customer Support Representative services. Consequently the number of Customer Support Representative services set out in Clause 1 of the Appendix A to Clause 15 of the Agreement shall be hereby *****	
 
3.3	The Seller shall provide revision service ***** Aircraft.	
 
3.4	The Seller shall provide ***** Consequently the period of ***** revision services set out in Clause 14.5 of the Agreement shall be *****	
 
3.5	The Seller hereby agrees to provide to Buyer, ***** for the *****Aircraft and ***** Aircraft as defined in the Agreement and up to ***** Airbus *****, on a ***** For the sake of clarity, the Seller grants the Buyer, during a ***** the ***** Airbus aircraft in operation.	
LPC is an Airbus software provided in digital media form enabling the Buyer to consult Airbus Aircraft performance programs and the operational Technical Data for the Airbus Aircraft.
 
3.6	The Seller hereby grants to Buyer ***** of maintenance training ***** for the Buyer personnel. Consequently the number of maintenance training days set out in Clause 2.1 of Appendix A to Clause 16 of the Agreement shall be ***** maintenance training days.	
 
3.7	The Seller hereby agrees to ***** the ***** Aircraft ***** Consequently the period of ***** revision services set out in Clause 2 to Letter Agreement No. of the Agreement shall be *****	
 
3.8	The Seller shall provide to the Buyer ***** training ***** of the Buyer’s ***** Consequently the number of Buyer ***** training set out in Clause 1.3 of Appendix A to Clause 16 of the Agreement shall be *****	
 
3.9	The Seller shall provide to the Buyer *****/***** for the Buyer’s personnel. Consequently the number of trainee days of ***** training set out in Clause 1.4.1 of Appendix A to Clause 16 of the Agreement shall be ***** maintenance training days.	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
5/5

3.10	The Seller shall provide to the Buyer transition type rating instructor training (transition or CCQ, as applicable) ***** of the Buyer’s flight instructors.	
 
3.11	For the avoidance of doubt, all quantities of customer support and training indicated above are the total quantities granted for the ***** Aircraft covered by this Amendment No.1, unless otherwise specified.	
 
4.	Conditions applicable to Incremental Aircraft	
All of the terms and conditions of the Agreement (as they are modified by this Amendment No.1 and any letter agreements hereto), shall apply to the ***** Aircraft.
In case of any inconsistency between this Amendment N° 1 and the Agreement, this Amendment N° 1 shall prevail.
 
5.	*****	
In accordance with the provisions as set forth in Clause 6 of Letter Agreement N° 3 ***** to the Agreement, the Seller hereby grants to the Buyer ***** Aircraft (the ***** Aircraft ”) upon exercise of the ***** Aircraft,
The Decision Dates of the ***** Aircraft are the first Business Day of the following months:
*****    ***** Aircraft
*****    ***** Aircraft
*****    ***** Aircraft
For the avoidance of doubt, all other provisions set out in Clauses 2 and 3 of Letter Agreement N°3 to the Agreement shall be applicable to the ***** Aircraft.
 
6.	Entry into force	
This Amendment N° 1 shall enter into force and be binding on the parties upon satisfaction of the three following conditions precedent:
 
 	(i)	signature by the Buyer and the Seller of this Amendment N° 1 in two originals;	
 
 	(ii)	approval by the board of the Buyer with respect to this Amendment N° 1; and notification of such approval by the Buyer to the Seller; and	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
6/6

 	(iii)	receipt by the Seller of the Predelivery Payment referred to in Clause 2 of this Amendment N° 1.	
Upon satisfaction of the condition precedent in (i) above, and in consideration of the Seller reserving for the Buyer the terms and conditions, including the delivery positions, stated in this Amendment N° 1 until the Expiry Date, the Buyer shall pay ***** of this Amendment N° 1, a ***** commitment fee in an amount of ***** for each of the ***** Aircraft (the “ Commitment Fee ”). The Commitment Fee shall be credited against the Predelivery Payment referred to in Clause 2 of this Amendment N° 1 for the respective Incremental Aircraft.
If the above three conditions are not fulfilled on or before August 15, 2007 (the “ Expiry Date ”), and unless otherwise agreed in writing, the Buyer and the Seller shall have no obligation or liability to the other, whether in contract, tort or otherwise in respect of this Amendment N° 1, except that the Seller shall in such circumstances be entitled to retain the Commitment Fee referred to in the above paragraph.
 
7.	Miscellaneous Provisions	
This Amendment N° 1 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment N° 1 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment N° I shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
7/7

IN WITNESS WHEREOF this Amendment N° 1 was entered into the day and year first above written.

Agreed and accepted	 		 	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN S.A.P.I. de C V.	 		 	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		 	Name:	
Its:	 		 	Its:	
 
8/8

CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegacion Álvaro Obregón,
Mexico, D.F
SUBJECT: CONDITIONS APPLICABLE TO ***** AIRCRAFT N° 17 to 30
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. de C.V. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement dated 28 th October 2005 (the “ Agreement ”) and an Amendment N° 1 (the “ Amendment N° 1 ”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 2/2

1.	In consideration of the Buyer purchasing and taking delivery of the ***** Aircraft, the Seller is pleased to confirm that all of the credit memoranda provided to Buyer in Letter Agreement N° 1 to the Agreement with respect to A319-100 Aircraft shall apply to each of the ***** Aircraft.	
 
2.	***** Aircraft *****	
The Seller shall grant to the Buyer with respect to each Incremental Aircraft an additional credit memorandum (the ***** Aircraft *****) amounting to:
*****
*****
The ***** Aircraft ***** of each of the ***** Aircraft.
The ***** Aircraft ***** Clause 4.1 of the Agreement *****
At the option of the Buyer, the ***** Aircraft *****
 
3.	*****	
The Seller shall grant to the Buyer with respect to each ***** Aircraft a ***** amounting to:
For A319 Aircraft :
*****
*****
For A320 Aircraft :
*****
*****
The *****
The *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 3/3

***** Aircraft in accordance with the Price Revision Formula set forth in Clause 4.1 of the Agreement (as amended by Letter Agreement N° 7 thereto).
At the option of the Buyer, the Fleet Increase ***** may be applied at Delivery of ***** Aircraft against the Final Price of such Incremental Aircraft or may be used for the purchase of goods and services from the Seller and/or its subsidiaries.
 
4.	Price Revision Protection	
*****
 
5.	*****	
 
5.1	The following definition shall apply with regard to this clause 5:	
Backlog Aircraft means, in relation to the Agreement, the firmly ordered Aircraft N° 7 through to N° 16.
 
5.2	The Seller shall make available to the Buyer ***** (the *****) amounting to:	
*****
*****
The terms and conditions for the utilization of the Backlog Aircraft Fund are specified in Clauses 5.3, 5.4, and 5.5 hereafter.
 
5.3	Availability of the Backlog Aircraft Fund	
From the available balance of the Backlog Aircraft Fund, at Delivery to the Buyer of each of the Backlog Aircraft the Seller shall grant the Buyer a fleet harmonization credit (the “ Fleet Harmonization Credit ”) of *****
The ***** For any Backlog Aircraft delivered ***** as defined in Clause 2 of this Amendment No. 1.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 4/4

***** Backlog Aircraft, ***** of a Backlog Aircraft, the Buyer shall be entitled to *****
The ***** of the Agreement *****
Each time a *****
 
5.4	*****	
 
5.5	If the Agreement is terminated by the Seller due to a default by the Buyer and as a result the Buyer fails to take Delivery of the ***** Aircraft as defined in Amendment N° 1 to the Agreement, then *****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Page 5/5

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		  	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		  	For and on behalf of 
 
AIRBUS S.A.S.	

Name	 		  	Name	
			
Title	 		  	Title	
			
Date	 		  	Date	
 
Page 6/6

AMENDMENT N° 2
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT0801717
 
1/1

C O N T E N T S

CLAUSES    	  	TITLES	
1	  	CHANGE OF DELIVERY DATES	
		
2	  	PREDELIVERY PAYMENTS	
		
3	  	MISCELLANEOUS PROVISIONS	
 
2/2

AMENDMENT N° 2 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 2 (hereinafter referred to as the “ Amendment No.2 ”) is entered into as of the             day of July 2008
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifiée , legal successor of Airbus S.N.C., formerly known as Airbus G.I.E. [and Airbus Industrie G.I.E.] created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the A320 Family Purchase Agreement dated the 22 nd June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement	
 
 	C.	The Buyer and the Seller wish to enter into Amendment No.2 to the Purchase Agreement to advance the Delivery Dates of Aircraft Nos. 13 and 14.	
 
 	D.	It is understood that Amendment N° 2, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment N° 2, unless otherwise agreed upon herein.	
 
3/3

 	E.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof and “hereunder” and words of similar import refer to this Amendment N° 2.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Advancement of Delivery Dates	
The Buyer and the Seller wish to advance the Delivery Dates of the Aircraft below:

Aircraft No.	 	Aircraft CAC ID	 	Previous Delivery Date	 	New Delivery Date	
13	 	209852	 	*****	 	*****	
14	 	209853	 	*****	 	*****	
 
2.	Predelivery Payments	
*****
 
3.	Miscellaneous Provisions	
This Amendment N° 2 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment N° 2 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment N° 2 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
4/4

IN WITNESS WHEREOF this Amendment N° 2 was entered into the day and year first above written.

Agreed and accepted	 		  	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		  	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		  	Name:	
Its:	 		  	Its:	
 
5/5

AMENDMENT N° 3
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT0803484
 
1/1

C O N T E N T S

CLAUSES	  	TITLES	
1	  	CHANGE OF DELIVERY DATES	
		
2	  	PREDELIVERY PAYMENTS	
		
3	  	MISCELLANEOUS PROVISIONS	
 
2/2

AMENDMENT N° 3 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 3 (hereinafter referred to as the “ Amendment N° 3 ”) is entered into as of the             day of January 2009.
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifiée , created and existing under French law having its registered office at 1 Rond-Point Maurice Beilonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Goiania Santa Fe Peña Blanca, Código Postal 01210, Delegación Alvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the A320 Family Purchase Agreement dated the 22 nd June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement	
 
 	C.	The Buyer and the Seller have entered into an Amendment No.2 to the A320 Family Purchase Agreement dated the 11 th July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement	
 
 	D.	The Buyer and the Seller wish to enter into Amendment No 3 to the Agreement to defer the Scheduled Delivery Months of Aircraft Nos. 13, 14, 15 and 16.	
 
 	E.	It is understood that Amendment N° 3, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment N° 3, unless otherwise agreed upon herein.	
 
3/3

 	F.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N° 3.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Deferral of Delivery Dates	
The Buyer and the Seller wish to defer the Scheduled Delivery Months of the Aircraft below:

Aircraft No.	 	Aircraft CAC ID	 	Previous Scheduled Delivery Months	 	New Scheduled Delivery Months	
13	 	209852	 	*****	 	*****	
14	 	209853	 	*****	 	*****	
15	 	209854	 	*****	 	*****	
16	 	209855	 	*****	 	*****	
 
2.	Predelivery Payments	
 
2.1	*****	
 
2.2	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
4/4

*****
 
3.	Miscellaneous Provisions	
This Amendment N° 3 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment N° 3 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment N° 3 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
5/5

IN WITNESS WHEREOF this Amendment N°3 was entered into the day and year first above written.

Agreed and accepted	 		  	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		  	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		  	Name:	
Its:	 		  	Its:	
 
6/6

EXHIBIT A
Reallocation of Excess Payment US$
 
 	1)	Non financed portion	
*****
 
 	2)	Financed portion	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
7/7

AMENDMENT N° 4
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT0903591
 
1/1

AMENDMENT N° 4 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 4 (hereinafter referred to as the “ Amendment N° 4 ”) is entered into as of the 28 th day of October 2010.
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifiée , created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Alvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the A320 Family Purchase Agreement dated the 22 nd June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement.	
 
 	C.	The Buyer and the Seller have entered into an Amendment No.2 to the A320 Family Purchase Agreement dated the 11 th July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement.	
 
 	D.	The Buyer and the Seller have entered into an Amendment No.3 to the A320 Family Purchase Agreement dated the 30 th January 2009 (the “ Amendment No.3 ”) to amend certain provisions of the Agreement.	
 
2/2

 	E.	The Buyer and the Seller wish to enter into Amendment No.4 to the Agreement to amend certain provisions of the Agreement.	
 
 	F.	It is understood that Amendment N° 4, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment N° 4, unless otherwise agreed upon herein.	
 
 	G.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof’ and “hereunder” and words of similar import refer to this Amendment N° 4.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Aircraft bearing rank numbers 15 and 16:	
 
1.1	Aircraft Type Conversion	
Pursuant to the Buyer’s request to convert the aircraft type of Aircraft bearing rank numbers 15 and 16 and advance the Scheduled Delivery Month of Aircraft bearing rank number 15, the Parties hereby agree that the aircraft type of Aircraft with rank numbers 15 and 16, and Scheduled Delivery Month of Aircraft bearing rank number 15 shall hereby be amended as set out in the table here below:

Rank
numbers	 	Original
Aircraft
type	 	Revised
Aircraft
type	 	Original
Scheduled
Delivery Months	 	Revised
Scheduled
Delivery Month	
15	 	A319-100	 	A320-200	 	*****	 	*****	
16	 	A319-100	 	A320-200	 	*****	 	*****	
It is furthermore agreed by the Parties that the provisions and obligations set forth in clause 1 to letter agreement No.4 to the Agreement for Aircraft with rank numbers 15 and 16 shall herewith be considered fulfilled in their entirety and neither Party shall have any further rights and or obligations under clause 1 to letter agreement No.4 to the Agreement toward the other Party with respect thereto.
 
1.2	Predelivery Payments:	
The Parties hereby agree that upon signature of this Amendment N° 4, the Buyer shall with respect to the Aircraft with rank numbers 15 and 16, *****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
3/3

2.	Miscellaneous Provisions	
This Amendment N° 4 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the Parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment N° 4 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment N° 4 shall not be varied or modified except by an instrument in writing executed by both Parties or by their duly authorised representatives.
 
4/4

IN WITNESS WHEREOF this Amendment N° 4 was entered into the day and year first above written.

Agreed and accepted	 		  	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		  	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		  	Name:	
Its:	 		  	Its:	

Name:	 		  		
Its:	 		  		
 
5/5

AMENDMENT N° 5
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT003484
 
1/1

C O N T E N T S

CLAUSES	    	TITLES	
1	    	PREDELIVERY PAYMENTS	
		
2	    	AIRCRAFT BEARING RANK NUMBERS 29 AND 30	
		
3	    	CERTIFICATION FOR AUTOLAND CAPABILITY TO 9,200ft	
		
4	    	***** CUSTOMER SUPPORT	
		
5	    	MISCELLANEOUS PROVISIONS	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
2/2

AMENDMENT N° 5 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 5 (hereinafter referred to as the “ Amendment N° 5 ”) is entered into as of the              day of December 2010.
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifiée , created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V . a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the A320 Family Purchase Agreement dated the 22 nd June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement.	
 
 	C.	The Buyer and the Seller have entered into an Amendment No.2 to the A320 Family Purchase Agreement dated the 11 th July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement.	
 
 	D.	The Buyer and the Seller have entered into an Amendment No.3 to the A320 Family Purchase Agreement dated the 30 th January 2009 (the “ Amendment No.3 ”) to amend certain provisions of the Agreement.	
 
3/3

 	E.	The Buyer and the Seller have entered into an Amendment No.4 to the A320 Family Purchase Agreement dated the 28 th October 2010 (the “ Amendment No.4 ”) to amend certain provisions of the Agreement.	
 
 	F.	The Buyer and the Seller wish to enter into Amendment No.5 to the Agreement to amend certain provisions of the Agreement.	
 
 	G.	It is understood that Amendment No.5, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment No.5, unless otherwise agreed upon herein.	
 
 	H.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment No.5.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Predelivery Payments	
 
1.1	*****	
 
1.2	*****	
Further to the implementation of the above Clause 1.1, the ***** shall be applicable to the Predelivery Payments as set forth in the table below:

Original
Predelivery
Payment due
dates	 	Aircraft
Number	 	Scheduled
Delivery Month /
Scheduled
Delivery Quarter	 	Predelivery
Payment number	 	Amount	
*****	 	*****	 	*****	 	*****	 	*****	
*****
 
2.	Aircraft bearing rank numbers 29 and 30	
 
2.1	Delivery Schedule	
The Parties hereby agree that the Scheduled Delivery Quarters as the case may be, of Aircraft with rank numbers 29 and 30 shall be amended as set forth in the table here below:

Rank number	 	A/C Type	 	Original Scheduled
Delivery Quarters	 	Revised Scheduled
Delivery Quarters	
29	 	A319-100	 	*****	 	*****	
30	 	A319-100	 	*****	 	*****	
 
2.2	Predelivery Payments	
*****
 
2.3	Escalation Cap	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
4/4

3.	Certification for autoland capability to 9,200ft	
*****
 
4.	***** Customer Support:	
*****
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
5/5

5.	Miscellaneous Provisions	
This Amendment N° 5 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the Parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment N° 5 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment N° 5 shall not be varied or modified except by an instrument in writing executed by both Parties or by their duly authorised representatives.
 
6/6

IN WITNESS WHEREOF this Amendment N° 5 was entered into the day and year first above written.

Agreed and accepted	 		  	Agreed and accepted	
			
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		  	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		  	Name:	
Its:	 		  	Its:	

Name:	 		  		
Its:	 		  		
 
7/7

AMENDMENT N° 6
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT1006602
 
1/1

AMENDMENT N° 6 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment N° 6 (hereinafter referred to as the “ Amendment N° 6 ”) is entered into as of the                      day of December 2010.
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifée , created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B .	The Buyer and the Seller have entered into an Amendment No. I to the A320 Family Purchase Agreement dated the 22 nd June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement.	
 
 	C.	The Buyer and the Seller have entered into an Amendment No.2 to the A320 Family Purchase Agreement dated the 11 th July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement.	
 
 	D.	The Buyer and the Seller have entered into an Amendment No.3 to the A320 Family Purchase Agreement dated the 30 th January 2009 (the “ Amendment No.3 ”) to amend certain provisions of the Agreement.	
 
2/2

 	E.	The Buyer and the Seller have entered into an Amendment No.4 to the A320 Family Purchase Agreement dated the 28 th October 2010 (the “ Amendment No.4 ”) to amend certain provisions of the Agreement.	
 
 	F.	The Buyer and the Seller have entered into an Amendment No.5 to the A320 Family Purchase Agreement dated the                      December 2010 (the “ Amendment No.5 ”) to amend certain provisions of the Agreement.	
 
 	G.	The Buyer and the Seller wish to enter into Amendment No.6 to the Agreement to amend certain provisions of the Agreement.	
 
 	H.	It is understood that Amendment No.6, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment No.6, unless otherwise agreed upon herein.	
 
 	I.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment No.6.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Aircraft bearing rank numbers 13 and 14:	
 
1.1	Aircraft Type Conversion	
Pursuant to the Buyer’s request to convert the aircraft type of Aircraft bearing rank ***** the Parties hereby agree that the aircraft type and Scheduled Delivery Month of Aircraft with rank numbers 13 and 14, shall hereby be amended as set out in the table below:

Rank numbers	 	Original
Aircraft
type	 	Revised
Aircraft
type	 	Original Scheduled
Delivery Months	 	Revised Scheduled
Delivery Month	
*****	 	A319-100	 	A320-200	 	*****	 	*****	
*****	 	A319-100	 	A320-200	 	*****	 	*****	
It is furthermore agreed by the Parties that the provisions and obligations set forth in clause 1 to Letter Agreement No.4 to the Agreement for Aircraft with rank numbers ***** shall herewith be considered fulfilled in their entirety and neither party shall have any further rights and or obligations with respect to clause 1 to Letter Agreement No.4 to the Agreement toward the other party with respect thereto.
 
1.2	Predelivery Payments	
 
    	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

3/3

    	*****	
 
1.3	*****	
 
2.	Miscellaneous Provisions	
This Amendment No.6 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, with respect to such subject matter.
This Amendment No.6 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment No.6 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

4/4

IN WITNESS WHEREOF this Amendment No.6 was entered into the day and year first above written.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		 		 	Name:	
Its:	 		 		 	Its:	

Name:	 		 		 		
Its:	 		 		 		
 
5/5

AMENDMENT N° 7
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
 as “Seller”
AND
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.
 as “Buyer”
Reference: CT1006773
 
1/1

AMENDMENT N° 7 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment No.7 (hereinafter referred to as the “ Amendment No.7 ”) is entered into as of the 4 th day of January 2011.
BETWEEN:
AIRBUS S.A.S ., a société par actions simplifiée , created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, DE C.V . a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS:
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th  October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the A320 Family Purchase Agreement dated the 22 nd  June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement.	
 
 	C .	The Buyer and the Seller have entered into an Amendment No.2 to the A320 Family Purchase Agreement dated the 11 th July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement.	
 
 	D .	The Buyer and the Seller have entered into an Amendment No.3 to the A320 Family Purchase Agreement dated the 30 th January 2009 (the “ Amendment No.3 ”) to amend certain provisions of the Agreement.	
 
2/2

 	E.	The Buyer and the Seller have entered into an Amendment No.4 to the A320 Family Purchase Agreement dated the 28 th October 2010 (the “ Amendment No.4 ”) to amend certain provisions of the Agreement.	
 
 	F.	The Buyer and the Seller have entered into an Amendment No.5 to the A320 Family Purchase Agreement dated the 15 th December 2010 (the “ Amendment No.5 ”) to amend certain provisions of the Agreement.	
 
 	G.	The Buyer and the Seller have entered into an Amendment No.6 to the A320 Family Purchase Agreement dated the 15 th December 2010 (the “ Amendment No.6 ”) to amend certain provisions of the Agreement.	
 
 	H.	The Buyer and the Seller wish to enter into Amendment No.7 to the Agreement to amend certain provisions of the Agreement.	
 
 	I.	It is understood that Amendment No.7, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment No.7, unless otherwise agreed upon herein.	
 
 	J.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof’ and “hereunder” and words of similar import refer to this Amendment No.7.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
 
1.	Aircraft bearing rank numbers *****	
 
1.1	Aircraft Type Conversion from A319 to A320	
Pursuant to the Buyer’s request to convert the aircraft type from A319-100 to A320-200 for all fourteen (14) A319-100 Aircraft remaining on order, Aircraft bearing sequential rank numbers from 17 to 30 (the “ Up-Converted Aircraft ”), the Parties hereby agree that the type of such Up-Converted Aircraft shall be amended as set out in the table below:

Rank numbers	 	Original
Aircraft type	 	Revised
Aircraft type	 	Scheduled Delivery
Month (or quarter, as applicable)	
17	 	A319-100	 	A320-200	 	*****	
18	 	A319-100	 	A320-200	 	*****	
19	 	A319-100	 	A320-200	 	*****	
20	 	A319-100	 	A320-200	 	*****	
21	 	A319-100	 	A320-200	 	*****	
22	 	A319-100	 	A320-200	 	*****	
23	 	A319-100	 	A320-200	 	*****	
24	 	A319-100	 	A320-200	 	*****	
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

3/3

							
Rank numbers	 	Original
Aircraft type	 	Revised
Aircraft type	 	Scheduled Delivery
Month (or quarter, as applicable)	
25	 	A319-100	 	A320-200	 	*****	
26	 	A319-100	 	A320-200	 	*****	
27	 	A319-100	 	A320-200	 	*****	
28	 	A319-100	 	A320-200	 	*****	
29	 	A319-100	 	A320-200	 	*****	
30	 	A319-100	 	A320-200	 	*****	
It is furthermore agreed by the Parties that the provisions and obligations set forth in clause 1 to Letter Agreement No.4 to the Agreement for the Up-Converted Aircraft shall herewith be considered fulfilled in their entirety and neither party shall have any further rights or obligations with respect to clause 1 to Letter Agreement No.4 to the Agreement toward the other party with respect thereto.
 
1.2	Predelivery Payments	
*****
 
2.	Miscellaneous Provisions	
This Amendment No.7 together with the Agreement, its Exhibits and Letter Agreements contain the entire agreement between the parties with respect to the subject matter hereof and supersede any previous understandings, commitments, or representations whatsoever. whether oral or written, with respect to such subject matter.
 
*****        	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

4/4

This Amendment No.7 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment No.7 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
5/5

IN WITNESS WHEREOF this Amendment No.7 was entered into the day and year first above written.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of 
 
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	For and on behalf of 
 
AIRBUS S.A.S.	

Name:	 		 		 	Name:	
Its:	 		 		 	Its:	

Name:	 		 		 		
Its:	 		 		 		
 
6/6

AMENDMENT No 8
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
as “Seller”
A N D
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
as “Buyer”
Reference : D11032737

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AMENDMENT No 8 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment No. 8 (hereinafter referred to as the “ Amendment No. 8 ”) is entered into as of the 28 th day of December 2011.
BETWEEN:
AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS :
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th  October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits, appendices and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No. 1 to the Agreement dated the 22 nd  June 2007 (the “ Amendment No. 1 ”) to amend certain provisions of the Agreement.	
 
 	C.	The Buyer and the Seller have entered into an Amendment No. 2 to the Agreement dated the 11 th  July 2008 (the “ Amendment No. 2 ”) to amend certain provisions of the Agreement.	
 
 	D.	The Buyer and the Seller have entered into an Amendment No. 3 to the Agreement dated the 30 th  January 2009 (the “ Amendment No. 3 ”) to amend certain provisions of the Agreement.	
 
 	E.	The Buyer and the Seller have entered into an Amendment No. 4 to the Agreement dated the 28 th  October 2010 (the “ Amendment No. 4 ”) to amend certain provisions of the Agreement.	

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 	F.	The Buyer and the Seller have entered into an Amendment No. 5 to the Agreement dated the 15 th  December 2010 (the “ Amendment No. 5 ”) to amend certain provisions of the Agreement.	
 
 	G.	The Buyer and the Seller have entered into an Amendment No. 6 to the Agreement dated the 15 th  December 2010 (the “ Amendment No. 6 ”) to amend certain provisions of the Agreement.	
 
 	H.	The Buyer and the Seller have entered into an Amendment No. 7 to the Agreement dated the 4 th  January 2011 (the “ Amendment No. 7 ”) to amend certain provisions of the Agreement.	
 
 	I.	The Buyer and the Seller wish to enter into this Amendment No. 8 to the Agreement for the purchase by the Buyer and the sale by the Seller of fourteen (14) incremental Aircraft including the Sharklets.	
 
 	J.	Simultaneously with the execution of this Amendment No. 8, the Buyer and the Seller wish to enter into an amendment no. 9 to the Agreement (the “Amendment No. 9”) for the purchase by the Buyer and the sale by the Seller of thirty (30) incremental Aircraft including the neo option and the Sharklets.	
 
 	K.	It is understood that Amendment No. 8, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment No. 8, unless otherwise agreed upon herein. The provisions of this Amendment No. 8 shall supersede any contrary provisions of the Agreement in respect of the 2011 Incremental Aircraft.	
 
 	L.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment No. 8.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

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TABLE OF CONTENTS

Clauses	 	Titles	  	 	
			
0	 	SCOPE	  	5	
			
1	 	DEFINITIONS	  	6	
			
2	 	2011 INCREMENTAL AIRCRAFT SPECIFICATION	  	6	
			
3	 	2011 INCREMENTAL AIRCRAFT PRICES	  	7	
			
4	 	2011 INCREMENTAL AIRCRAFT DELIVERY SCHEDULE	  	9	
			
5	 	AGREEMENT AMENDMENTS	  	11	
			
6	 	MISCELLANEOUS PROVISIONS	  	12	
			
EXHIBIT A	 	PRICE REVISION FORMULAE	  	15	
	 	Part 1: Airframe Price Revision Formula	  	15	
	 	Part 2: Propulsion Systems Price Revision Formula – IAE	  	18	
	 	Part 3: Propulsion Systems Price Revision Formula – CFM International	  	21	
			
EXHIBIT B1	 	STANDARD SPECIFICATION	  	23	
			
EXHIBIT B2	 	SCN LISTS	  	24	
			
	 	Appendix 1: A319-100	  	24	
	 	Appendix 2: A320-200	  	27	
	 	Appendix 3: A321-200	  	30	
			
EXHIBIT B3	 	CABIN LAYOUTS	  	33	
			
	 	Appendix 1: A319-100	  	33	
	 	Appendix 2: A320-200	  	34	
	 	Appendix 3: A321-200	  	35	

			
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0.	SCOPE	
 
0.1	Sale and Purchase : Pursuant to and in accordance with the terms and conditions contained in this Amendment No. 8 (and incorporating the relevant provisions of the Agreement), the Seller shall sell and deliver and the Buyer shall buy and take delivery of fourteen (14) incremental Aircraft (hereinafter referred to as the “ 2011 Incremental Aircraft” ).	
 
0.2	Amendment of Existing Provisions : The Buyer and the Seller agree to amend certain provisions of the Agreement pursuant to the terms and conditions set out in this Amendment No. 8.	
 
0.3	With effect from the date hereof, all references to “Aircraft” in the Agreement shall be deemed to include the 2011 Incremental Aircraft unless expressly stipulated otherwise herein or elsewhere.	
 
0.4	Save to the extent specified to the contrary in this Amendment No. 8 (or any associated Letter Agreements), all of the terms and conditions respectively relating to A319-100, A320-200 and A321-200 set out in the Agreement and its Exhibits and Appendices shall apply to the relevant 2011 Incremental Aircraft.	
 
0.5	Applicability of Previous Letter Agreements	
 
0.5.1	The following Letter Agreements to the Agreement shall not apply in respect of the 2011 Incremental Aircraft and shall be replaced, where applicable, as follows:	
 
 	(a)	Letter Agreement No. 1 ***** – replaced by Letter Agreement No. 1 to this Amendment No. 8 ***** – 2011 Incremental Aircraft) ;	
 
 	(b)	Letter Agreement No. 2 ***** – replaced by Letter Agreement No. 2 to this Amendment No. 8 and to Amendment No. 9 (European Export Credit Financing);	
 
 	(c)	Letter Agreement No. 3 *****;	
 
 	(d)	Letter Agreement No. 4 (Aircraft ***** And Delivery Date ***** – replaced by Letter Agreement No. 4 to this Amendment No. 8 (***** – 2011 Incremental Aircraft);	
 
 	(e)	Letter Agreement No. 5A and Letter Agreement No. 5B (Performance Guarantees) – replaced by Letter Agreements No. 5A through Letter Agreement No. 5F to this Amendment No. 8 (Performance Guarantees Sharklet Aircraft);	
 
 	(f)	Letter Agreement No. 6 (Product Support) – replaced by Letter Agreement No. 6 to this Amendment No. 8 and to Amendment No. 9 (Product Support);	
 
 	(g)	Letter Agreement No. 7 ***** – replaced by Letter Agreement No. 7 to this Amendment No. 8 ***** – 2011 Incremental Aircraft);	
 
0.5.2	The following Letter Agreements shall be added in respect of the 2011 Incremental Aircraft:	
 
 	(a)	Letter Agreement No. 8 to this Amendment No. 8 and to Amendment No. 9 ***** Proposal Letter)	
 
 	(b)	Letter Agreement No. 9 to this Amendment No. 8 (***** Aircraft)	
 
 	(c)	Letter Agreement No. 10 to this Amendment No. 8 (PDPs – 2011 Incremental Aircraft)	
 
0.5.3	No other Letter Agreements or previous side letters to the Agreement or any amendment to the Agreement shall apply in respect of the 2011 Incremental Aircraft (except those quoted in this Clause 0.5).	

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1.	DEFINITIONS	
 
  	The following terms and their associated definitions shall replace or complement as appropriate Clause 0 of the Agreement in respect of the 2011 Incremental Aircraft:	

            Ready for Delivery:	  	means the time when the Technical Acceptance Process has been completed in accordance with Clause 8 and all technical conditions required for the issuance of the Export Airworthiness Certificate and/or the Statement of Conformity (as applicable) have been satisfied.	
		
            Sharklets:	  	means a new large wingtip device, currently under development by the Seller, designed to enhance the eco-efficiency and payload range performance of the A320 family aircraft.	
		
             Standard Specification:	  	means either:	
 
 	(a)	the A319-100 standard specification document number *****, amended to incorporate the design weights:	

MTOW	  	*****	
MLW	  	*****	
MZFW	  	*****	
 
 	(b)	the A320-200 standard specification document number D.000.02000 Issue 8 dated 20 th  June 2011, amended to incorporate the design weights:	

MTOW	  	*****	
MLW	  	*****	
MZFW	  	*****	
 
 	(c)	the A321-200 standard specification document number *****, amended to incorporate the design weights:	

MTOW	  	*****	
MLW	  	*****	
MZFW	  	*****	
 
 	  	copies of which have been annexed hereto as Exhibit B1.	
 
2.	2011 INCREMENTAL AIRCRAFT SPECIFICATIONS	
 
2.1	Airframe Specification: The relevant 2011 Incremental Aircraft shall be manufactured in accordance with the Standard Specification applicable to the relevant Aircraft type, as may already have been modified or varied prior to the date of this Amendment No. 8 by the Specification Change Notices listed in Appendices 1, 2 and 3 to Exhibit B2 hereof. The 2011 Incremental Aircraft shall be equipped with the Sharklets.	
 
2.2	Propulsion Systems : In respect of the 2011 Incremental Aircraft, Clause 2.2.2 of the Agreement shall be deleted and replaced by the following:	
 
  	QUOTE	

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 	2.2.1	Engines Types	
 
 	  	The 2011 Incremental Aircraft shall be equipped with a set of two (2) of the following Engines:	
 
 	•	 	For the A319-100 :	
CFM INTERNATIONAL 56-5B7/3
or
INTERNATIONAL AERO ENGINE V2524M-A5
 
 	•	 	For the A320-200 :	
CFM INTERNATIONAL 56-5B4/3
or
INTERNATIONAL AERO ENGINE V2527E-A5
 
 	•	 	For the A321-200 :	
CFM INTERNATIONAL 56-5B3/3
or
INTERNATIONAL AERO ENGINE V2533-A5
 
  	UNQUOTE	
 
  	If the Buyer has not selected the Propulsion Systems as of the date of this Amendment No. 8, such choice shall be made *****.	
 
3.	2011 INCREMENTAL AIRCRAFT PRICES	
 
  	With respect to the 2011 Incremental Aircraft only, the provisions contained in clauses 3.1 of the Agreement shall not apply and the following provisions shall apply in their place:	
 
  	QUOTE	
 
 	3.1	Price of 2011 Incremental Aircraft	
 
  	For each 2011 Incremental Aircraft, the Aircraft Basic Price shall be respectively, the sum of:	
 
 	i)	the Airframe Basic Price as defined in Clause 3.1.1 below and	
 
 	ii)	the Propulsion Systems Basic Price as defined in Clause 3.1.2 below.	

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 	3.1.1	Airframe Basic Price	
 
  	The Airframe Basic Price is the sum of:	
 
 	(i)	the basic price of the Airframe as defined in the relevant Standard Specification, including Nacelles and Thrust Reversers, and excluding Buyer Furnished Equipment:	

	 	For the A319-100:    	  	USD *****	
	 		  	(US Dollars *****)	
			
	 	For the A320-200:	  	USD *****)	
	 		  	(US Dollars *****)	
			
	 	For the A321-200:	  	USD *****	
	 		  	(US Dollars *****)	
 
 	(ii)	the basic price of the preliminary SCN’s defined and listed in Appendices 1, 2 and 3 of Exhibit B2 to Amendment No. 8:	

	 	For the A319-100:    	  	USD *****	
	 		  	(US Dollars *****)	
			
	 	For the A320-200:	  	USD *****	
	 		  	(US Dollars *****)	
			
	 	For the A321-200:	  	USD *****	
	 		  	(US Dollars *****)	
 
 	(iii)	the basic price of the irrevocable Sharklets SCN for the A319-100, A320-200 and A321-200:	

	 		  	USD *****
(US Dollars *****)	
 
  	All respective Airframe Basic Prices have been established in accordance with the average economic conditions prevailing in *****, *****, ***** and corresponding to a theoretical delivery in ***** (the “ Base Period ”).	
 
  	All respective Airframe Basic Prices shall be revised up to the date of delivery of each respective 2011 Incremental Aircraft in accordance with the Airframe Price Revision Formula set out in Part 1 of Exhibit A hereto.	

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 	3.1.2	Propulsion Systems Basic Price	
The basic price of the Propulsion Systems (the “Propulsion Systems Basic Price”) shall, depending on the Propulsion Systems selected by the Buyer, be as applicable pursuant to Clauses 3.1.2.1 or 3.1.2.2 hereeafter.
 
 	3.1.2.1	The base price of a set of two (2) CFM INTERNATIONAL Propulsion Systems	

	  	CFM56-5B7/3:	  	USD *****	  	for A319-100	
				
	  	CFM56-5B4/3:	  	USD *****	  	for A320-200	
				
	  	CFM56-5B3/3	  	USD *****	  	for A321-200	
The Propulsion Systems Basic Prices have been established in accordance with the delivery conditions prevailing in January 2011 have been computed from the Propulsion Systems Reference Price as set forth in Exhibit A Part 3 to this Amendment No. 8.
3.1.2.2 The base price for a set of two (2) IAE Propulsion Systems is:

	  	IAE V2527M-A5:	  	USD *****	  	for A319-100	
				
	  	IAE V2527E-A5:	  	USD *****	  	for A320-200	
				
	  	IAE V2533-A5:	  	USD *****	  	for A321-200	
The Propulsion Systems Basic Prices have been established in accordance with the delivery conditions prevailing in ***** have been computed from the Propulsion Systems Reference Price as set forth in Exhibit A Part 2 to this Amendment No. 8.
All respective Propulsion Systems Basic Prices shall be revised up to the date of delivery of each respective 2011 Incremental Aircraft in accordance with the relevant Propulsion Systems Price Revision Formula set out in Part 2 and Part 3 of Exhibit A hereto.
UNQUOTE
 
4.	2011 INCREMENTAL AIRCRAFT DELIVERY SCHEDULE	
 
4.1	2011 Incremental Aircraft Rank numbers: The 2011 Incremental Aircraft shall be ***** in the delivery schedule set forth in Clause 9.1.1 of the Agreement as amended.	
 
4.2	Updated Delivery Schedule : As a result of the order of the 2011 Incremental Aircraft, the delivery schedule set forth in Clause 9.1.1 of the Agreement as amended is hereby cancelled and replaced with the following delivery schedule:	
QUOTE
 
 	9.1.1	Delivery Schedule	
 
 	  	Subject to Clauses 2, 7, 8, 10 and 18, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location within the following months:	

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Aircraft Rank	  	Aircraft Type	  	Delivery Month
/Quarter	  	Year	
*****	  	A319-100	  	May	  	2006	
*****	  	A319-100	  	May	  	2006	
				
*****	  	A319-100	  	January	  	2007	
*****	  	A319-100	  	March	  	2007	
*****	  	A319-100	  	March	  	2007	
*****	  	A319-100	  	March	  	2007	
*****	  	A319-100	  	June	  	2007	
*****	  	A319-100	  	September	  	2007	
*****	  	A319-100	  	October	  	2007	
				
*****	  	A319-100	  	March	  	2008	
*****	  	A320-200	  	October	  	2008	
*****	  	A319-100	  	November	  	2008	
				
*****	  	A320-200	  	July	  	2011	
*****	  	A320-200	  	September	  	2011	
*****	  	A320-200	  	September	  	2011	
*****	  	A320-200	  	November	  	2011	
				
*****	  	A320-200	  	February	  	2012	
*****	  	A320-200	  	June	  	2012	
*****	  	A320-200	  	June	  	2012	
*****	  	A320-200	  	September	  	2012	
*****	  	A320-200	  	September	  	2012	
*****	  	A320-200	  	October	  	2012	
*****	  	A320-200	  	November	  	2013	
*****	  	A320-200	  	February	  	2013	
*****	  	A320-200	  	March	  	2013	
*****	  	A320-200	  	May	  	2013	
*****	  	A320-200	  	*****	  	2014	
*****	  	A320-200	  	*****	  	2014	
*****	  	A320-200	  	*****	  	2015	
*****	  	A320-200	  	*****	  	2015	
*****	  	A320-200	  	*****	  	2015	
*****	  	A320-200	  	*****	  	2015	
*****	  	A320-200	  	*****	  	2015	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
*****	  	A320-200	  	*****	  	2016	
Each of such months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.
With regard to Aircraft in the above Delivery Schedule for which the scheduled Delivery Date is indicated as a *****, each of such quarters shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery ***** ”. The Seller shall notify the Buyer no later than ***** months prior to the first day of the first month of the concerned Scheduled Delivery Quarter of the scheduled delivery month in respect of each such Aircraft. Following such notification by the Seller, each of such scheduled delivery months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.
For the sole purpose of calculating the Predelivery Payments*****.
The Seller shall give the Buyer at least ***** days prior written notice of the anticipated delivery week in which the Aircraft shall be ready for Delivery. Thereafter the Seller shall notify the Buyer of any change in such delivery week necessitated by the conditions of manufacture or flight.

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UNQUOTE
 
5.	AGREEMENT AMENDMENTS	
 
5.1	Buyer Furnished Equipment	
Clause 18.1.4 of the Agreement shall not apply to the 2011 Incremental Aircraft and the following provisions shall apply in its place:
QUOTE
18.1.4
*****
For each 2011 Incremental Aircraft, the Buyer shall make a ***** to the Seller ***** falling ***** months prior to the respective Scheduled Delivery Month.
At Delivery of each 2011 Incremental Aircraft, the Buyer shall pay to the Seller an amount equal to the total ***** made for the respective 2011 Incremental Aircraft.
UNQUOTE
 
5.2	Taxes	
Clause 5.8 of the Agreement shall not apply to the 2011 Incremental Aircraft and the following provisions shall apply in its place:
QUOTE
5.6 Taxes
5.6.1
*****
5.6.2
*****
*****
*****
5.6.3
The Buyer shall bear the costs of and pay any and all taxes, duties or similar charges of any nature arising in connection with this Agreement and not assumed by the Seller under Clause 5.6.2 including but not limited to any duties or taxes due upon or in relation to the importation or registration of the 2011 Incremental Aircraft in Buyer’s country and/or any withholdings or deductions levied or required in Buyer’s country in respect of the payment to the Seller of any amount due by the Buyer under the Agreement.
UNQUOTE
 
5.3	Predelivery Payments	

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Clause 5.3.4 of the Agreement shall not apply to the 2011 Incremental Aircraft and the following provisions shall apply in its place:
QUOTE
5.3.4
5.3.4.1
*****
5.3.4.2
*****
5.3.4.3
*****
5.3.4.4
*****
For the purpose of this Clause 5.3.4, the term Aircraft shall include any of the 2011 Incremental Aircraft and the NEO Aircraft (as the term is set forth in Amendment No. 9).
UNQUOTE
 
6.	MISCELLANEOUS PROVISIONS	
 
6.1	Effect of the Amendment	
The Agreement will be deemed amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment No. 8 supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment No. 8.
Both parties agree that this Amendment No. 8 will constitute an integral, non-severable part of the Agreement and shall be governed by its provisions, except that if the Agreement and this Amendment No. 8 have specific provisions that are inconsistent, the specific provisions contained in this Amendment No. 8 shall govern.
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Agreement and its Exhibits.
 
6.2	Confidentiality	
This Amendment No. 8 is subject to the confidentiality provisions set forth in Clause 22.10 of the Agreement.

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6.3	Law and Jurisdiction	
This Amendment No. 8 shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Amendment No. 8 shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
6.4	Severability	
In the event that any provision of this Amendment No. 8 should for any reason be held ineffective, the remainder of this Amendment No. 8 shall remain in full force and effect. To the extent permitted by applicable law, each Party hereby waives any provision of law which renders any provision of this Amendment No. 8 prohibited or unenforceable in any respect. Any provisions of this Amendment No. 8 which may prove to be or become illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Amendment No. 8.
This Amendment No. 8 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment No. 8 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
6.5	Validity	
In order to be valid, this Amendment No. 8 shall be executed together with Amendment No. 9 as of the same date as the date hereof.

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IN WITNESS WHEREOF this Amendment No. 8 was entered into the day and year first above written.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning
Director	 		 		 		

VOI A320 Family PA - AMDT 8 – Ref. D11032737 - December 2011	  	308/40	

EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
With respect to the 2011 Incremental Aircraft only, the Airframe Price Revision Formula contained in Part 1 of Exhibit C of the Agreement is hereby cancelled and replaced by the following Airframe Price Revision Formula:
 
PART 1	AIRFRAME PRICE REVISION FORMULA	
 
1	BASE PRICE	
 
  	The Airframe Base Price quoted in Clause 3.1 of the Agreement is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.	
 
2	BASE PERIOD	
 
  	The Airframe Base Price has been established in accordance with the average economic conditions prevailing in *****, *****, ***** and corresponding to a theoretical delivery in ***** as defined by “ECIb” and “ICb” index values indicated hereafter.	
 
3	INDEXES	
 
  	Labor Index: “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100).	
 
  	The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.	
 
  	Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I.	
 
  	Material Index: “Industrial Commodities” (hereinafter referred to as “IC”) as published in “PPI Detailed Report” (found in Table 6. “Producer price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).	
 
  	Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.	

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EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
 
4	REVISION FORMULA	
 
  	*****	
 
5	GENERAL PROVISIONS	
 
5.1	Roundings	
 
  	The Labor Index average and the Material Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
  	Each quotient (ECIn/ECIb) and (ICn/ICb) shall be rounded to the nearest ten-thousandth (4 decimals). If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
  	The final factor shall be rounded to the nearest ten-thousandth (4 decimals).	
 
  	The final price shall be rounded to the nearest whole number (0.5 or more rounded to 1).	

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EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
 
5.2	Substitution of Indexes for Airframe Price Revision Formula	
 
  	If:	
 
 	(i)	the United States Department of Labor substantially revises the methodology of calculation of the Labor Index or the Material Index as used in the Airframe Price Revision Formula, or	
 
 	(ii)	the United States Department of Labor discontinues, either temporarily or permanently, such Labor Index or such Material Index, or	
 
 	(iii)	the data samples used to calculate such Labor Index or such Material Index are substantially changed;	
the Seller shall select a substitute index for inclusion in the Airframe Price Revision Formula (the “Substitute Index”).
The Substitute Index shall reflect as closely as possible the actual variance of the Labor Costs or of the material costs used in the calculation of the original Labor Index or Material Index as the case may be.
As a result of the selection of the Substitute Index, the Seller shall make an appropriate adjustment to the Airframe Price Revision Formula to combine the successive utilization of the original Labor Index or Material Index (as the case may be) and of the Substitute Index.
 
5.3	Final Index Values	
 
  	The Index values as defined in Clause 4 above shall be considered final and no further adjustment to the base prices as revised at Delivery of the Aircraft shall be made after Aircraft Delivery for any subsequent changes in the published Index values.	
 
5.4	Limitation	
Should the sum of *****

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EXHIBIT A – PART 2 AND PART 3 – Propulsion Systems Price Revision Formula
With respect to the 2011 Incremental Aircraft only, the Propulsion Systems Price Revision Formula contained in Part 2 and Part 3 of Exhibit C of the Agreement are hereby cancelled and replaced by the following Propulsion Systems Price Revision Formula:
 
PART 2	PROPULSION SYSTEMS PRICE REVISION FORMULA	
    	INTERNATIONAL AERO ENGINES	
 
1	REFERENCE PRICE OF THE ENGINES	
 
1.1	The Reference Price of a set of two (2) INTERNATIONAL AERO ENGINES V2527M-A5 or V2527E-A5 Engines is:	
 
  	*****	
 
  	*****	
 
1.2	*****	
 
  	*****	
 
  	*****	
 
1.3	Above Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.	
 
2	REFERENCE PERIOD	
 
  	The above Reference Prices have been established in accordance with the *****, as defined according to INTERNATIONAL AERO ENGINES by the ECIb and ICb index values indicated in Clause 4 of this Exhibit C.	
 
3	INDEXES	
 
  	Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group” ,or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS code 336411, base month and year December 2005 = 100).	
 
  	The quarterly value released for a certain month *****	
 
  	Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I.	
 
  	Material Index: “Industrial Commodities” (hereinafter referred to as “IC”) as published in “PPI Detailed Report” (found in Table 6. “Producer price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).	

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EXHIBIT A – PART 2 AND PART 3 – Propulsion Systems Price Revision Formula
 
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15
 
4	REVISION FORMULA	
Pn = *****
*****
 
5	GENERAL PROVISIONS	
 
5.1	Roundings	
 
 	(i)	ECIn and ICn shall be calculated to the nearest tenth (1 decimal)	
 
 	(ii)	Each quotient ***** and ***** shall be calculated to the nearest ten-thousandth (4 decimals).	
 
 	(iii)	The final factor shall be rounded to the nearest ten-thousandth (4 decimals).	
If the next succeeding place is five (5) or more the preceding decimal place shall be raised to the nearest higher figure.
After final computation, Pn shall be rounded to the nearest whole number (0.5 rounds to 1).
 
5.2	Final Index Values	
The revised Reference Price at the date of Aircraft Delivery shall be the final price and shall not be subject to any further adjustments in the indexes.
If no final index values are available for any of the applicable month, the then published preliminary figures shall be the basis on which the Revised Reference Price shall be computed.
 
5.3	Interruption of Index Publication	
If the US Department of Labor substantially revises the methodology of calculation or discontinues any of the indexes referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by INTERNATIONAL AERO ENGINES, such substitute index to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this result.
 
5.4	Annulment of Formula	
Should the above escalation provisions become null and void by action of the US Government, the Reference Price shall be adjusted due to increases in the costs of labor and material which have occurred from the period represented by the applicable Reference Price Indexes to the ***** prior to the Aircraft Delivery.

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EXHIBIT A – PART 2 AND PART 3 – Propulsion Systems Price Revision Formula
 
5.5	Limitation	
Should the revised Reference Price be lower than the Reference Price, the final price shall be computed with the Reference Price.

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EXHIBIT A – PART 2 AND PART 3 – Propulsion Systems Price Revision Formula
 
PART 3	PROPULSION SYSTEMS PRICE REVISION FORMULA	
    	CFM INTERNATIONAL	
 
1	REFERENCE PRICE OF THE PROPULSION SYSTEMS	
 
1.1	The Reference Price of a set of two (2) CFM INTERNATIONAL CFM56-5B7/3 or CFM56-5B4/3 Engines is:	
*****
*****
 
1.2	*****	
*****
*****
 
1.3	This above Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions of Clauses 4 and 5 of this Exhibit C.	
 
2	REFERENCE PERIOD	
The above Reference Prices have been established in accordance with the economical conditions prevailing for a theoretical delivery in January 2002 as defined by CFM INTERNATIONAL by the Reference Composite Price Index (CPIb) of *****
 
3	INDEXES	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS code 336411, base month and year December 2005 = 100, hereinafter multiplied by 1.777 and rounded to the first decimal place.)
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I.
Material Index: “Industrial Commodities” (hereinafter referred to as “IC”) as published in “PPI Detailed Report” (found in Table 6. “Producer price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15

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EXHIBIT A – PART 2 AND PART 3 – Propulsion Systems Price Revision Formula
 
4	REVISION FORMULA	
*****
 
5	GENERAL PROVISIONS	
 
5.1	Roundings	
 
 	(i)	The Material index average (ICn) shall be rounded to the nearest second decimal place and the labor index average (ECIn) shall be rounded to the nearest first decimal place.	
 
 	(ii)	CPIn shall be rounded to the nearest second decimal place.	
 
 	(iii)	The final factor ***** shall be rounded to the nearest third decimal place.	
If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
After final computation, Pn shall be rounded to the nearest whole number (0.5 rounds to 1).
 
5.2	Final Index Values	
The revised Reference Price at the date of Aircraft Delivery shall not be subject to any further adjustments in the indexes.
 
5.3	Interruption of Index Publication	
If the US Department of Labor substantially revises the methodology of calculation or discontinues any to these indexes referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by CFM INTERNATIONAL, such substitute index to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this result.
 
5.4	Annulment of Formula	
Should the above escalation provisions become null and void by action of the US Government, the Reference Price shall be *****
 
5.5	Limitations	
Should the ratio *****

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EXHIBIT B1 – STANDARD SPECIFICATION
With respect to the 2011 Incremental Aircraft only, the Standard Specifications contained in Exhibit A of the Agreement as amended are hereby cancelled and replaced by the following Standard Specifications:
A319-100 standard specification document number ***** contained in a separate folder.
A320-200 standard specification document number ***** contained in a separate folder.
A321-200 standard specification document number ***** contained in a separate folder. 

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EXHIBIT B2 – SCN LISTS
With respect to the 2011 Incremental Aircraft only, the SCN lists contained in Appendix 1.1 through 1.3 to Exhibit A of the Agreement as amended are hereby cancelled and replaced by the following SCN lists:
Appendix 1: A319-100 SCN List
A319-100 STANDARD SPECIFICATION Ref. *****
All prices are in USD at Delivery Conditions specified on each column

EPAC TDU	  	Title	  	A319 Price per
a/c USD D.C
01/2011	  	Comments	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	

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EXHIBIT B2 – SCN LISTS

*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	

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EXHIBIT B2 – SCN LISTS

*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
Subject to certification, the ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be ***** USD (*****).
In addition, the Seller has presented to the Buyer the ***** which mainly consists of *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ***** becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, the Seller shall *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

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EXHIBIT B2 – SCN LISTS
 
Appendix 2: A320-200 SCN List
A320-200 STANDARD SPECIFICATION Ref. *****
All prices are in USD at Delivery Conditions specified on each column

EPAC TDU	 	Title	  	A320 Price per
a/c USD D.C
01/2011	 	Comments	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	

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EXHIBIT B2 – SCN LISTS

*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	

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EXHIBIT B2 – SCN LISTS

*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
Subject to certification, the ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be ***** (delivery conditions *****).
In addition, the Seller has presented to the Buyer the ***** which mainly consists of *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ***** becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, the Seller shall *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

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EXHIBIT B2 – SCN LISTS
 
Appendix 3: A321-200 SCN List
A321-200 STANDARD SPECIFICATION Ref. *****
All prices are in USD at Delivery Conditions specified on each column

EPAC TDU	 	Title	  	A321 Price per
a/c USD D.C
01/2011	 	Comments	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	

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EXHIBIT B2 – SCN LISTS

*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	

VOI A320 Family PA - AMDT 8 – Ref. D11032737 - December 2011	  	325/40	

EXHIBIT B2 – SCN LISTS

*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 	*****	
	 	*****	  	*****	 	*****	
Subject to certification, ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be ***** (delivery conditions *****).
In addition, the Seller has presented to the Buyer the ***** which mainly consists of *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ***** becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, the Seller shall *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

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EXHIBIT B3 – CABIN LAYOUTS
Appendix 1: A319-100 Cabin layout
*****

			
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EXHIBIT B3 – CABIN LAYOUTS
 
Appendix 2: A320-200 Cabin layout
*****

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EXHIBIT B3 – CABIN LAYOUTS
 
Appendix 3: A321-200 Cabin layout
*****

			
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LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – 2011 INCREMENTAL AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA01 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 1/6

LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
This Letter Agreement No. 1 is applicable to the 2011 Incremental Aircraft only and supersedes and replaces the original Letter Agreement No. 1 to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	Airframe *****	
The Seller shall ***** 2011 Incremental Aircraft a ***** (the “ Airframe ***** ”) amounting to:

USD	  	*****	  	for A319-100	
USD	  	*****	  	for A320-200	
USD	  	*****	  	for A321-200	
The Airframe ***** shall, at Buyers’ discretion, be ***** 2011 Incremental Aircraft *****.
The Airframe ***** is in US Dollars quoted in ***** Incremental Aircraft *****
 
2	2011 *****	
The Seller ***** 2011 Incremental Aircraft a ***** (the “ 2011 ***** ”) amounting to:

USD	  	*****	  	for A319-100	
USD	  	*****	  	for A320-200	
USD	  	*****	  	for A321-200	
The 2011 ***** shall, ***** Incremental Aircraft or *****.
The 2011 ***** is in US Dollars quoted in *****
 
3	Extended *****	
The Seller ***** 2011 Incremental Aircraft a ***** (the “ Extended ***** ”) *****

USD	  	*****	  	For A319-100	
USD	  	*****	  	For A320-200	
USD	  	*****	  	For A321-200	
The Extended ***** shall, *****, *****
The Extended ***** is in US Dollars quoted in *****
 
4	A321 *****	
The Seller shall ***** 2011 Incremental Aircraft ***** (the “ A321 ***** ”) *****:

USD	  	*****	
 
A320FAM PA – VOI – AMDT 8 LA01 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 2/6

LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
The A321 ***** shall, ***** 2011 Incremental Aircraft *****.
The A321 ***** is in US Dollars quoted in *****
 
5	*****	
The Seller shall ***** 2011 Incremental Aircraft ***** (the “ ***** ”)*****:

USD	  	*****	
The ***** shall, ***** 2011 Incremental Aircraft *****.
The ***** is in US Dollars quoted in ***** 2011 Incremental Aircraft *****
 
6	*****	
The Seller shall ***** Incremental Aircraft ***** (the “ ***** ”)*****:

USD	  	*****	  	for A320-200 delivered with *****	
USD	  	*****	  	for A321-200 delivered with *****	
	  		  		
The ***** shall, at Buyers’ discretion, ***** 2011 Incremental Aircraft *****.
The ***** is in US Dollars quoted in ***** Incremental Aircraft *****
 
7	*****	
The Seller shall ***** 2011 Incremental Aircraft a ***** (the “ Closing ***** ”) *****:

USD	  	*****	  	for A319-100	
USD	  	*****	  	for A320-200	
USD	  	*****	  	for A321-200	
The ***** shall, ***** 2011 Incremental Aircraft *****
The ***** is in US Dollars quoted in ***** delivery ***** 2011 Incremental Aircraft *****
 
8	2011 Deliveries *****	
In order to *****, ***** 2011 Incremental Aircraft ***** (the “ 2011 Deliveries ***** ”) *****

USD	  	*****	
The 2011 Deliveries ***** shall, ***** be ***** 2011 Incremental Aircraft *****
 
A320FAM PA – VOI – AMDT 8 LA01 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 3/6

LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
9	*****	
As a *****, the Seller is willing to *****, ***** 2011 Incremental Aircraft ***** (the “ ***** ”)*****:

USD	  	*****	
The ***** shall, ***** 2011 Incremental Aircraft *****
 
10	*****	
The Seller ***** 2011 Incremental Aircraft ***** (the “ ***** ”)*****

USD	  	*****	
The ***** shall be made available ***** and shall *****.
 
11	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
12	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
13	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
14	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
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- Letter Agreement No 1 -Page 4/6

LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
15	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA01 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 5/6

LETTER AGREEMENT No. 1 TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of
CONTROLADORA VUELA
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  	For and on behalf of
         AIRBUS S.A.S.	

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning
Director	 		 		 		
 
A320FAM PA – VOI – AMDT 8 LA01 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 6/6

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : EUROPEAN EXPORT CREDIT FINANCING
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “ Buyer ”) and the Seller S.A.S. (the “ Selle r”) have entered into a purchase agreement dated 28 th  October 2005 (the “ Purchase Agreement ”) as amended from time to time and into an amendment no.8 (the “ Amendment No. 8 ”) and an amendment no.9 (the “ Amendment No. 9 ”) dated as of even date herewith, which amendments cover the manufacture and the sale by the Seller and the purchase by the Buyer of (a) the 2011 Incremental Aircraft as described in the Amendment No. 8 and (b) the NEO Aircraft as described in the Amendment No. 9. The Purchase Agreement as amended together with the Amendment No. 8 and the Amendment No. 9 shall be referred to as the “ Agreement ”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement, Amendment No. 8 and/or Amendment No. 9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and Amendment No. 9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
For the purpose of this Letter Agreement, the 2011 Incremental Aircraft and NEO Aircraft shall be referred to as the “ Aircraft ”.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 1/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
1	If requested by the Buyer, the Seller shall support the Buyer by applying to the Export Credit Agencies of France (COFACE), Germany (EULER HERMES) and the United Kingdom (ECGD) (the “ Export Credit Agencies ”) with a view to obtaining financing through European Export Credit for the acquisition of an Aircraft (including the engines installed on such Aircraft). In this respect, the Seller and the Buyer shall need to co-operate closely to provide all necessary information as may be requested by the Export Credit Agencies, including detailed financial information, in due course.	
Subject (i) to the approval of the European authorities responsible for export credits and (ii) to the support of the Export Credit Agencies, an export credit facility (the “ Facility ”) in respect of an Aircraft as described hereafter may be granted to the Buyer (each such Aircraft hereafter referred to as a “ Relevant Aircraft ”).
The Facility shall include guarantees given by each Export Credit Agency in favour of international lending banks acceptable to the Export Credit Agencies (the “ Banks ).
The terms and conditions under which a Facility may be granted to the Buyer as at the date hereof are described in the attached Appendix A. Such terms and conditions are subject to amendment by the Export Credit Agencies and shall reflect the then prevailing terms of export credit for civil aircraft as governed by the Organisation for Economic Cooperation and Development (“ OECD ”). Upon request, the Seller will provide the Buyer with the latest version of the Appendix A reflecting the prevailing terms at the time.
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 2/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 3/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 	Agreed and accepted	
		
For and on behalf of	 	For and on behalf of	
CONTROLADORA VUELA	 	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name: Alfonso Ascencio Triujeque	 		 	Name: Christophe Mourey	
Its:       Directer Jurldico
             General Counsel	 		 	Its: Senior Vice President Contracts	

/s/ Mario E. Geyne	
Name: Mario E. Geyne	
Its:       Financial and Fleet Planning Director	
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 4/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
APPENDIX A
GENERAL TERMS AND CONDITIONS
Capitalized terms used herein and not otherwise defined in this Appendix shall have the meanings assigned thereto in the Agreement or as defined in the Sector Understanding on Export Credit for Civil Aircraft as entered into force on February 1, 2011 as may be further amended from time to time by the OECD.
Unless otherwise stated or decided by the Export Credit Agencies in their sole discretion, the following general terms and conditions shall apply to the Facility:
 
1	Purpose and Amount	
The amount of the Facility shall be up to a maximum of eighty-five percent (85%) if the Buyer is in risk category 2 or below, up to a maximum of eighty percent (80%) if the Buyer is in risk category 1, or such lesser percentage as may be selected by the Buyer or imposed by the Export Credit Agencies, in each case of the Net Aircraft Price of the Relevant Aircraft.
The list of these risk categories is defined by experts nominated by the members of the OECD. Such list is confidential to the OECD members and is updated on an on-going basis. The risk classifications reflect the senior unsecured credit rating of the Buyer (see Table 1 in appendix).
The Net Aircraft Price shall be equal to the Final Price (as defined in the Agreement) of the Relevant Aircraft including the engines/propulsion systems (the “ Engines ”) installed on such Relevant Aircraft after taking into account all price discounts and other cash credits, less all other credits or concessions of any kind of the Seller and/or the selected engine/propulsion system manufacturer (the “ Engine Manufacturer ”) related or fairly allocable thereto.
Subject to the Export Credit Agencies’ prior approval, the Net Aircraft Price may include Buyer Furnished Equipment installed on the Relevant Aircraft in an amount agreed by the Export Credit Agencies.
As requested by the Export Credit Agencies, the Buyer shall provide the Seller with a declaration signed by the selected Engine Manufacturer, indicating the total amount of the credit memoranda made available to the Buyer with respect to the Engines installed on the relevant Aircraft.
 
2	Participation and Currencies	
The level of participation in the Facility from the British, French and German Export Credit Agency shall depend on the aircraft type and the Engine selected by the Buyer.
The Buyer may select from the following eligible currencies the currency in which he wishes to denominate the Facility.
The currencies that are eligible for such Facility are Euros (“ EUR ”), Japanese Yen (“ JPY ”), UK Sterling Pounds (“ GBP ”), US Dollars (“ USD ”) and other fully convertible currencies for which there are market references.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 5/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
3	Drawdowns and Payment to the Seller	
The Facility relating to the Relevant Aircraft shall be drawn down upon delivery of such Relevant Aircraft and shall be disbursed directly to the Seller upon satisfactory presentation, inter alia, of the following documents:
 
 	(i)	an aircraft invoice issued by the Seller and	
 
 	(ii)	the Certificate of Acceptance	
in each case in respect of the Relevant Aircraft duly signed by a representative of the Buyer
Notwithstanding any decision by the Buyer to select a currency or currencies other than USD, the Seller shall receive the Final Price in USD at delivery of the Relevant Aircraft.
 
4	Term and Repayment of the Facility	
The term of the Facility (the “Term” ) shall not exceed twelve (12) years.
Unless otherwise decided by the Export Credit Agencies in their sole discretion, the British, French and German portions shall be repayable in a series of annuity style equal payments of rent in the case of a Lease Facility (as defined below) to amortise the Facility in respect of the Relevant Aircraft to zero over the Term.
There shall be no extension of the repayment Term by way of sharing of rights in the security on a pari passu basis with commercial lenders for the officially supported export credit.
The period between each payment shall be no greater than three (3) months and the first payment shall become payable no later than three (3) months after delivery of the Relevant Aircraft.
 
5	Interest	
Interest on the Facility shall be payable in arrears on the unpaid balance of principal, on the same date as and together with the instalments of principal except when lease payments in advance are requested as a Risk Mitigant (as defined below) and in the currency(ies) in which the Facility is denominated.
The rate of interest shall be negotiated directly with the Banks and shall be either a floating rate or a fixed rate. Subject to the Export Credit Agencies’ prior approval, the Facility may also include an option to switch from a floating rate to a fixed rate on terms and conditions to be defined.
 
6	Expenses and Taxes	
The Buyer shall be responsible for all legal expenses, professional fees as well as taxes and other costs arising out of or in connection with the application for, the provision and administration of the Facility, including the Export Credit Agencies’ travel expenses related to the Buyer’s presentation and/or to the negotiation of the Facility, whether or not the Facility is actually used. All corporate and governmental approvals necessary for the performance of the Buyer’s obligations under the Facility shall be obtained by the Buyer so that the payment of all amounts due to the Banks shall be satisfied without delay, such payments to be without deduction on
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 6/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
account of any existing or future withholding taxes, charges, levies or other duties whatsoever. If however any such deduction has to be made, the Buyer shall compensate the Banks for such deduction and shall obtain all necessary approvals for this purpose so that the Banks receive the same net amount as they would have received had no such deduction been made.
 
7	Security and Form of the Facility	
As security for the repayment of the Facility, the Buyer shall provide a full security package satisfactory to the Export Credit Agencies and the Banks.
The standard form of the Facility shall be a finance lease (the “ Lease Facility ”). Under the Lease Facility, the Banks shall create a special purpose vehicle (“ SPV ”) which (i) shall receive title to the Relevant Aircraft pursuant to an assignment to the SPV of the relevant rights and obligations of the Buyer under the Agreement, and (ii) shall lease such Relevant Aircraft to the Buyer for the Term of the Facility.
Upon expiry of the Lease Facility and provided that no event of default has occurred or is continuing and provided no cross default and no cross collateralization have been called by the ECAs, the Buyer shall be entitled to purchase the Relevant Aircraft for the greater of the amount of 1$ and the outstanding amount due under the Lease Facility. Upon the exercise by the Buyer of the purchase option and payment of all amounts due under the Lease Facility, title to the Relevant Aircraft shall be transferred from the SPV to the Buyer simultaneously. 
 
8	Premium	
The premium to be paid up-front by the Buyer to the Export Credit Agencies in respect of the Facility shall be decided by the Export Credit Agencies. It shall be no less than the Minimum Premium Rates, or if the Buyer is based in a State where the Cape Town Convention applies, the Minimum Premium Rates with a reduction of 10% [Table 1 sets out the current Minimum Premium Rates with and without the Cape Town discount.]
The Minimum Premium Rate incorporates (i) a Risk Based Rate which is reset every year to reflect Moody’s annual Loss Given Default over a four-year period, and (ii) a Market Reflective Surcharge which is adjusted every quarter.
The calculation of the Risk Based Rate depends on the risk classification of the Buyer. The premium payable is expressed as a percentage of the amount of the Facility granted by the Export Credit Agencies.
The Buyer may benefit from a 10% Premium reduction if the Buyer is based in a jurisdiction that has ratified the Cape Town Convention with the qualifying declarations as defined by the OECD and has incorporated the Treaty in its set of domestic laws.
 
9	Main Terms of Financing	
The Export Credit Agencies may, upon request of the Buyer, agree to provide financing support at or above the Minimum Premium Rate if all the conditions below are fulfilled to the satisfaction of the Export Credit Agencies and the Banks:
 
 	(i)	an asset-backed transaction	
 
 	(ii)	a first priority security interest in the Relevant Aircraft	
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 7/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
 	(iii)	no more than 85% advance rate of the Net Aircraft Price (except if the Buyer is in risk category 1 in which case it is no more than 80%)	
 
 	(iv)	no less frequently than quarterly mortgage-style payments	
 
 	(v)	cross default and cross collateralization of all aircraft and engines owned legally and beneficially by the same parties under the proposed financing.	
The transaction should be structured to include a minimum number of Risk Mitigants (as defined below) as set out in table below :

ASU Risk Category	  	Risk Rating	  	Risk Mitigants	
	  		  	Total “A” + “B” Risk
Mitigants	  	Minimum number of “A”
Risk Mitigants	  	Minimum number of “B”
Risk Mitigants	
1            	  	AAA to BBB-	  	0	  	0	  	0	
2            	  	BB+ and BB	  	0	  	0	  	0	
3            	  	BB-	  	1	  	1	  	0	
4            	  	B+	  	2	  	1	  	1	
5            	  	B	  	2	  	1	  	1	
6            	  	B-	  	3	  	2	  	1	
7            	  	CCC	  	4	  	3	  	1	
8            	  	CC to C	  	4	  	3	  	1	
Risk Mitigants shall be defined as follows:
“A” Risk Mitigants
 
 	I.	each 5% reduction from the 85% Net Aircraft Price advance rate, (e.g. 70% advance rate where three A Risk Mitigants are required);	
 
 	II.	a straight line amortisation	
 
 	III.	a repayment term, which does not exceed ten years	
“B” Risk Mitigants
 
I-	Security Deposit in an amount equal to one quarterly instalment of principal and interest	
 
II-	Lease payments in advance,	
 
III-	Maintenance reserves in a form and amount which reflect best market practices.	
Subject to prior approval by the Export Credit Agencies, one of the “A” Risk Mitigants may be replaced by a 15% surcharge on the applicable Minimum Premium Rate.
The Export Credit Agencies may also, upon request of the Buyer, agree to support the financing of the applicable premium with the amount of the premium being added to the initial amount of principal under the Facility.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 8/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
10	Fees	
 
10.1	Banks’ Fees	
The Buyer shall be responsible for negotiating with the Banks the fees to be paid to them in connection with the preparation, negotiation, execution and granting of the Facility.
 
10.2	Export Credit Agencies’ fees	
The Buyer shall pay a premium-holding fee on any undrawn portion of the official support during any premium-holding period, as follows:
 
 	(i)	for the first six months of the holding period: zero basis points per annum	
 
 	(ii)	for the second six months of the holding period: 12.5 basis points per annum	
 
 	(iii)	for the third six months of the holding period: 25 basis points per annum	
 
11	Miscellaneous	
 
11.1	The Buyer shall notify the Seller of its intention to request the Facility not less than six (6) months before the first day of the scheduled month of delivery of the relevant Aircraft with a view to entering into the Facility with the Banks not less than two (2) months before the scheduled date of delivery of the relevant Aircraft.	
 
11.2	The support of the Export Credit Agencies is subject, inter alia, to:	
 
 	(i)	a case-by-case assessment of the credit risk;	
 
 	(ii)	the financing structure, including securities, being acceptable to the Export Credit Agencies;	
 
 	(iii)	receipt by the Export Credit Agencies of all material information relating to the financial, operational and ownership situation of the Buyer (both historical and anticipated) in due time, and, if required, from time to time, a presentation of the then current situation by the Buyer to the Export Credit Agencies.	
The Export Credit Agencies may also require additional information from the Buyer before reaching a final decision. The Buyer shall be responsible for all costs relating to the provision of the information requested by the Export Credit Agencies.
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 9/10

LETTER AGREEMENT No. 2 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
Table 1
Minimum Premium Rates released as of October 15, 2011

Risk category	 	   	 	   	  	 	  	Up-Front
(%)	 	  	With the
Cape
Town
Discount	 	
1 (AAA)	 		 		  		  	 	7.72	  	  	 	6.95	  	
1 (AA)	 		 		  		  	 	7.72	  	  	 	6.95	  	
1 (A)	 		 		  		  	 	7.72	  	  	 	6.95	  	
1 (BBB+)	 		 		  		  	 	7.72	  	  	 	6.95	  	
1 (BBB)	 		 		  		  	 	7.72	  	  	 	6.95	  	
1 (BBB-)	 		 		  		  	 	7.72	  	  	 	6.95	  	
2 (BB+)	 		 		  		  	 	9.16	  	  	 	8.24	  	
2 (BB)	 		 		  		  	 	9.16	  	  	 	8.24	  	
3 (BB-)	 		 		  		  	 	10.03	  	  	 	9.03	  	
4(B+)	 		 		  		  	 	11.26	  	  	 	10.13	  	
5 (B)	 		 		  		  	 	12.67	  	  	 	11.40	  	
6 (B-)	 		 		  		  	 	13.20	  	  	 	11.88	  	
7 (CCC)	 		 		  		  	 	14.39	  	  	 	12.95	  	
8 (CC)	 		 		  		  	 	14.74	  	  	 	13.27	  	
8 (C)	 		 		  		  	 	14.74	  	  	 	13.27	  	
 
A320FAM PA – VOI – AMDT 8 and 9 LA02 – Ref. D11032737 - December 2011
- Letter Agreement No 2 -Page 10/10

LETTER AGREEMENT No. 4 TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – 2011 INCREMENTAL AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA04 – Ref. D11032737 - December 2011
- Letter Agreement No 4 - Page 1/4

LETTER AGREEMENT No. 4 TO AMENDMENT No. 8
 
This Letter Agreement No. 4 is applicable to the 2011 Incremental Aircraft only and supersedes and replaces the original Letter Agreement No. 4 to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	*****	
The Buyer shall have the right to ***** :
(a) up to a maximum of three (3) of the 2011 Incremental Aircraft ***** , and
(b) any of the 2011 Incremental Aircraft *****
(the “ ***** ”).
*****
 
A320FAM PA – VOI – AMDT 8 LA04 – Ref. D11032737 - December 2011
- Letter Agreement No 4 - Page 2/4

LETTER AGREEMENT No. 4 TO AMENDMENT No. 8
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA04 – Ref. D11032737 - December 2011
- Letter Agreement No 4 - Page 3/4

LETTER AGREEMENT No. 4 TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name: Alfonso Ascencio Triujeque	 		 	Name: Christophe Mourey	
Its:       Directer Jurldico
            General Counsel	 		 	Its: Senior Vice President Contracts	

/s/ Mario E. Geyne	
Name: Mario E. Geyne	
Its: Financial and Fleet Planning Director	
 
A320FAM PA – VOI – AMDT 8 LA04 – Ref. D11032737 - December 2011
- Letter Agreement No 4 - Page 4/4

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A319-100 SHARKLET PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 1/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
This Letter Agreement No. 5A is applicable to the 2011 Incremental Aircraft only and cancels and replaces the original Letter Agreement No. 5A to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A319-100 Aircraft as described in the Standard Specification ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of CFM International CFM56-5B7/3 engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	*****	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than 73,500 kg.
 
2.2	*****	
 
2.2.1	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****	
 
2.2.1.3	Allowances of *****	
 
2.2.1.4	***** the destination airport are conducted in ***** Conditions. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of ***** of time are included for approach and land at the destination *****.	
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 2/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
 
  	*****	
 
  	*****	
 
  	*****	
 
  	*****	
 
  	*****	
 
2.2.2	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of *****) are as follows:	
*****
*****
*****
*****
*****
*****
*****
*****
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is 13 feet.
 
2.2.2.3	Allowances of *****	
 
2.2.2.4	***** destination airport are conducted in *****. Climb and descent speeds *****.	
The ***** these climb, cruise and descent phases *****
 
2.2.2.5	Allowances of *****	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** will remain in the tanks. This represents the estimated fuel required for:	
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 3/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
*****
*****
*****
*****
*****
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A319-100 powered by CFM56-5B7/3 engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a ***** EPNdB.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing ***** except if otherwise noted.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using ***** unless otherwise stated.	
 
5.6	Where applicable, *****	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 4/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) ***** of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****
 
9.1	Should the Seller *****	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****	
 
9.3	The Seller’s *****	
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 5/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 6/7

LETTER AGREEMENT No. 5A TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	

/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Its:	 	Financial and Fleet Planning
Director	
 
A320FAM PA – VOI – AMDT 8 LA05A – Ref. D11032737 - December 2011
- Letter Agreement No 5A – A319 Sharklet CFM - Page 7/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A319-100 SHARKLETS PERFORMANCES GUARANTEES (IAE engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 1/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
This Letter Agreement No. 5B is applicable to the 2011 Incremental Aircraft only and cancels and replaces the original Letter Agreement No. 5A to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A319-100 Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of International Aero Engines (IAE) V2527M-A5 Select One engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1 	*****	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
*****
*****
*****
*****
*****
*****
the FAR certified take-off weight shall be not less than *****
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****	
 
2.2.1.3	Allowances of *****	
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 2/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
2.2.1.4	***** the destination airport are conducted in ***** conditions. Climb and descent speeds below *****	
 
2.2.1.5	Allowances of ***** of time are included for approach and land at the destination airport.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
*****
*****
*****
*****
 
2.2.2	*****	
 
2.2.2.1	The Aircraft will be capable to carry ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
*****
*****
*****
*****
*****
*****
*****
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****	
 
2.2.2.4	***** destination airport are conducted in ***** conditions. Climb and descent speeds *****	
The ***** during these climb, cruise and descent phases shall be *****
 
2.2.2.5	Allowances of *****	
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 3/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land 2,760 kg of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
*****
*****
*****
*****
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A319-100 powered by IAE V2527M-A5 engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a *****
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be deduced ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing ***** except if otherwise noted.	
 
5.4	***** Section 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated ***** unless otherwise stated.	
 
5.6	Where applicable, *****	
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 4/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A319-***** of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports ***** if the Buyer’s A319-100 Aircraft.	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****
 
9.1	Should the Seller *****	
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 5/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****	
 
9.3	The Seller’s *****	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 6/7

LETTER AGREEMENT No. 5B TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	

/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Its:	 	Financial and Fleet Planning
Director	
 
A320FAM PA – VOI – AMDT 8 LA05B – Ref. D11032737 - December 2011
- Letter Agreement No 5B – A319 Sharklet IAE - Page 7/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A320-200 SHARKLET PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 1/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
This Letter Agreement No. 5C is applicable to the 2011 Incremental Aircraft only and cancels and replaces the original Letter Agreement No. 5B to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A320-200 Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
 
 	Maximum	Take-off Weight to *****	
 	Maximum	Landing Weight to *****	
 	Maximum	Zero Fuel Weight to *****	
 
 	iii)	installation of CFM International CFM56-5B4/3 engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	*****	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than ***** kg.
 
2.2	*****	
 
2.2.1	*****	
 
2.2.1.1	When carrying a ***** (representing *****at ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in ***** conditions. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of ***** minutes of time are included for approach and land at the destination airport.	
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 2/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2	*****	
 
2.2.2.1	The Aircraft will be capable to carry a *****of ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** conducted in ***** conditions. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be increased by 3.5%.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A320-200 powered by CFM56-5B4/3 engines for ***** shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, with a ***** EPNdB.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 3/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing ***** except if otherwise noted.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using ***** unless otherwise stated.	
 
5.6	Where applicable, the *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A320-200 aircraft of the same ***** as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports ***** the Buyer’s A320-200 Aircraft.	
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 4/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of:	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above the *****.	
 
9.3	The Seller’s *****.	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 5/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 6/7

LETTER AGREEMENT No. 5C TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	

/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Its:	 	Financial and Fleet Planning
Director	
 
A320FAM PA – VOI – AMDT 8 LA05C – Ref. D11032737 - December 2011
- Letter Agreement No 5C – A320 Sharklet CFM - Page 7/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A320-200 SHARKLET PERFORMANCES GUARANTEES (IAE engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 1/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
This Letter Agreement No. 5D is applicable to the 2011 Incremental Aircraft only and cancels and replaces the original Letter Agreement No. 5B to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A320-200 Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of International Aero Engines (IAE) V2527E-A5 Select One engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** each) over ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4   *****	the destination airport are conducted in ***** conditions. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of ***** of time are included for approach and land at the destination airport.	
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 2/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
 
  	*****	
2.2.2	Mission Payload *****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
 
  	*****	
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** the destination airport are conducted in ***** conditions. Climb and descent speeds below *****.	
 
  	The ***** these climb, cruise and descent phases shall be *****.	
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** will remain in the tanks. This represents the estimated fuel required for:	
 
  	*****	
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A320-200 powered by IAE V2527E-A5 engines for ***** shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, with a ***** EPNdB.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 3/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
4	MANUFACTURER’S WEIGHT EMPTY GUARANTEE	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be deduced ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of 38,519 kg.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing *****	
 
5.4	***** Section 21-30.31 of the Specification. *****.	
 
5.5	The engines will be operated using ***** unless otherwise stated.	
 
5.6	Where applicable, *****	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A320-200 aircraft of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****	
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 4/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
a) Any further configuration change which is the subject of a SCN
b) Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****.	
 
9.3	*****	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 5/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 6/7

LETTER AGREEMENT No. 5D TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  		  	Agreed and accepted	
			
For and on behalf of	  		  	For and on behalf of	
CONTROLADORA VUELA	  		  	AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		  		  		
			
/s/ Alfonso Ascencio Triujeque	  		  	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	  		  	Name:	  	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	  		  	Its:	  	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	  		  		  		
Name:	 	Mario E. Geyne	  		  		  		
Its:	 	Financial and Fleet
Planning Director	  		  		  		
 
A320FAM PA – VOI – AMDT 8 LA05D – Ref. D11032737 - December 2011
- Letter Agreement No 5D – A320 Sharklet IAE - Page 7/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** SHARKLET PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 1/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
This Letter Agreement No. 5E is applicable to the 2011 Incremental Aircraft only.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the ***** as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of CFM International CFM56-5B3/3 engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1 	*****	
Under the following airport conditions (assumed representative of ***** runway *****):
 
  	*****	
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** above the destination airport are conducted in ISA+10°C conditions. Climb and descent speeds *****.	
 
2.2.1.5	Allowances of *****.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 2/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2 	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** above the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
  	The ***** these climb, cruise and descent phases shall be *****.	
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The ***** powered by CFM56-5B3/3 engines for ***** in accordance with the requirements of ***** of ICAO Annex 16, Volume I.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 3/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** provide the best results will be assumed.	
 
5.3	When establishing ***** except if otherwise noted.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using ***** unless otherwise stated.	
 
5.6	Where applicable, the *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) ***** of the same ***** as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 4/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of:	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
 
  	*****	
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available *****.	
 
9.3	The Seller’s *****.	
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 5/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 6/7

LETTER AGREEMENT No. 5E TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		

/s/ Alfonso Ascencio Triujeque	 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 	Name:	  	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 	Its:	  	Senior Vice President
Contracts	
		
/s/ Mario E. Geyne	  		
Name:	 	Mario E. Geyne	 		  		
Its:	 	Financial and Fleet
Planning Director	 		  		
 
A320FAM PA – VOI – AMDT 8 LA05E – Ref. D11032737 - December 2011
- Letter Agreement No 5E-A321 Sharklet CFM -Page 7/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** SHARKLET PERFORMANCES GUARANTEES (IAE engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 1/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
This Letter Agreement No. 5F is applicable to the 2011 Incremental Aircraft only.
 
1.	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the ***** Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	provisions for and installation of Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of International Aero Engines (IAE) V2533-A5 Select One engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1 	*****	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of *****.	
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 2/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2 	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of *****runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** destination airport are conducted in *****. *****	
The ***** these climb, cruise and descent phases shall be *****.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The ***** powered by IAE V2533-A5 engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I.
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 3/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** provide the best results will be assumed.	
 
5.3	When establishing ***** except if otherwise noted.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using ***** unless otherwise noted.	
 
5.6	Where applicable, *****	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A321-***** of the same ***** as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 4/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****
 
9.1	Should the Seller *****	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****	
 
9.3	The Seller’s *****	
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 5/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
11	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
15	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
16	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
17	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
18	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 6/7

LETTER AGREEMENT No. 5F TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		  		
		
/s/ Alfonso Ascencio Triujeque	  	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	  	Name:	  	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	  	Its:	  	Senior Vice President
Contracts	
		
/s/ Mario E. Geyne	  		
Name:	 	Mario E. Geyne	  		  		
Its:	 	Financial and Fleet
Planning Director	  		  		
 
A320FAM PA – VOI – AMDT 8 LA05F – Ref. D11032737 - December 2011
- Letter Agreement No 5F-A321 Sharklet IAE -Page 7/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : PRODUCT SUPPORT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) and an amendment no. 9 (the “Amendment No. 9”) dated as of even date herewith, which amendments cover the manufacture and the sale by the Seller and the purchase by the Buyer of (a) the 2011 Incremental Aircraft as described in the Amendment No. 8 and (b) the NEO Aircraft as described in the Amendment No. 9. The Purchase Agreement as amended together with the Amendment No. 8 and the Amendment No. 9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement, Amendment No. 8 and/or Amendment No. 9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and/or Amendment No. 9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
For the purpose of this Letter Agreement, the 2011 Incremental Aircraft and NEO Aircraft shall be referred to as the “Aircraft”.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 1/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
This Letter Agreement No. 6 is applicable to the 2011 Incremental Aircraft and NEO Aircraft only and supersedes and replaces the original Letter Agreement No. 6 to the Agreement to the extent relating to the 2011 Incremental Aircraft and NEO Aircraft.
The following support services are granted by the Seller to the Buyer in consideration of the purchase by the Buyer from the Seller of a total of forty-four (44) 2011 Incremental Aircraft and NEO Aircraft.
 
1	Seller Representative Services	
In accordance with the provisions as set forth in Clause 15.2 of the Purchase Agreement, the Seller grants to the Buyer ***** man months of Customer Support Representative services.
 
2	Training Services	
Pursuant to the provisions in Clause 16 Appendix A, the Seller hereby agrees to provide to the Buyer the following ***** training services:
 
2.1	Flight Crew Training (standard transition course)	
The Seller shall provide flight crew training (standard transition course) ***** of the Buyer’s flight crews *****.
If the Buyer reasonably demonstrates its need for additional flight crew training, the Seller shall ***** the flight crew training ***** by up to a total of ***** standard flight crew transition courses.
 
2.2	Flight Crew Line Initial Operating Experience	
The Seller shall provide to the Buyer pilot Instructor(s) ***** for a period of *****. Unless otherwise agreed during the Training Conference, in order to follow the Aircraft Delivery schedule, the maximum number of pilot Instructors present at any one time shall be limited to *****.
 
2.3	Type Specific Cabin Crew Training Course	
The Seller shall provide to the Buyer ***** type specific training for cabin crews for ***** cabin crew instructors, pursers or cabin attendants.
 
2.4	Airbus Pilot Instructor Course (APIC)	
The Seller shall provide to the Buyer transition Airbus Pilot Instructor Course(s) (APIC), for flight and synthetic instruction, ***** instructors. APIC courses shall be performed in groups of ***** trainees.
 
2.5	PERFORMANCE / OPERATIONS COURSE(S)	
The Seller shall provide to the Buyer ***** trainee days of performance / operations training ***** for the Buyer’s personnel.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 2/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
The Buyer shall be free to select courses from the Airbus Customer Services Catalog.
 
2.6	MAINTENANCE TRAINING	
The Seller shall provide to the Buyer ***** trainee days of maintenance training ***** for the Buyer’s personnel per firmly ordered aircraft (i.e. ***** days for ***** Aircraft).
The Buyer shall be free to select courses from the Airbus Customer Services Catalog.
 
2.7	Supplier and Engine Manufacturer Training	
The Seller shall ensure that all major Suppliers and the selected Propulsion System manufacturer shall provide maintenance and overhaul training on their products at appropriate times taking into account the Buyer’s operational demands and training needs.
A list of Supplier courses shall be made available.
 
3	Material Support	
 
3.1	Spare Parts Leasing	
In order to ensure flexibility and reduce costs, the Seller offers the Buyer a lease service for a variety of Seller parts with a price of at least ***** USD.
 
3.2	Repair Management Services	
The Seller offers the Buyer Repair Management Services for AIRBUS parts and supplier parts.
 
3.3	Customer Order Desk	
The Seller operates a “ Customer Order Desk” , the main functions of which are:
 
 	(i)	Management of order entries for all priorities, including Aircraft On Ground (“AOG”);	
 
 	(ii)	Management of order changes and cancellations;	
 
 	(iii)	Administration of Buyer’s routing instructions;	
 
 	(iv)	Management of Material returns;	
 
 	(v)	Clarification of delivery discrepancies;	
 
 	(vi)	Issuance of credit and debit notes.	
The Buyer hereby agrees to communicate its orders for Material to the Customer Order Desk either in electronic format (SPEC 2000) or via the Internet.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 3/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
4.	Engineering and Technical Support Services	
The Buyer may obtain from AIRBUS engineering services to support the Aircraft operation, compatible with the Buyer’s particular needs such as:
 
 	•	 	Engineering recommendations with regard to the actual technical status of the Aircraft, including trouble shooting advice,	
 
 	•	 	Identification and development of modifications and/or product improvements,	
 
 	•	 	Direct technical assistance, covering troubleshooting assistance and Aircraft repair assistance,	
 
 	•	 	Technical AOG service, 24 hours a day, 7 days a week.	
Other services according to the Buyer’s needs can be provided and customized accordingly.
 
5	Technical Data & Software	
 
5.1	Revision Service	
In respect of the 2011 Incremental Aircraft and NEO Aircraft only, Clause 14.5 (Revision Period) is hereby deleted in its entirety and replaced by the following;
QUOTE
 
 	14.5	Revision Service	
Unless otherwise specifically stated, revision service for the Technical Data shall be provided on a ***** for the period of ***** (the “Revision Service Period”).
UNQUOTE
For the avoidance of doubt this ‘Revision Service Period’ will apply to the Flight Operations Technical Data, Maintenance Technical Data Package and PEP software described in Clause 14 and Exhibit G.
 
5.2	CBT Software	
Pursuant to the provisions in Clause 16 - Appendix A No. 4 ‘Training Aids for Buyer’s Training Organisation’ and Clause 16—Appendix C No. 4 ‘Term’, the Buyer acknowledges that the Airbus CBT Software and Airbus CBT Courseware and Virtual Aircraft licences already extended to the Buyer also apply to NEO Aircraft.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 4/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
6	*****	
The Seller shall ***** 2011 Incremental Aircraft or NEO Aircraft a ***** (the *****:
USD *****
The ***** shall be ***** and shall be used by the Buyer *****.
Alternatively the *****, may, ***** 2011 Incremental Aircraft or NEO Aircraft, in which case the Buyer may ***** at the prices and conditions quoted in the then valid Customer Services Catalogue.
The ***** and shall be ***** 2011 Incremental Aircraft *****.
 
7	*****	
As a ***** from the Seller, the Seller shall ***** of each 2011 Incremental Aircraft or NEO Aircraft ***** (the *****:
USD *****
The ***** 2011 Incremental Aircraft or NEO Aircraft.
 
8	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
9	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
10	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
11	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 5/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
12	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 6/7

LETTER AGREEMENT No. 6 TO AMENDMENT No. 8 and AMENDMENT No. 9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of
CONTROLADORA VUELA
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  	For and on behalf of
         AIRBUS S.A.S.	
/s/ Alfonso Ascencio Triujeque	  	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	  	Name:	  	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	  	Its:	  	Senior Vice President
Contracts	
			
/s/ Mario E. Geyne	  		  		
Name:	 	Mario E. Geyne	  		  		
Its:	 	Financial and Fleet
Planning Director	  		  		
 
A320FAM PA – VOI – AMDT 8 and 9 LA6 – Ref. D11032737 - December 2011
- Letter Agreement No 6 -Page 7/7

LETTER AGREEMENT No. 7 TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – 2011 INCREMENTAL AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

A320FAM PA – VOI – AMDT 8 LA07 – Ref. D11032737 - December 2011
- Letter Agreement No 7 -Page 1/3

LETTER AGREEMENT No. 7 TO AMENDMENT No. 8
 
This Letter Agreement No. 7 is applicable to the 2011 Incremental Aircraft only and supersedes and replaces the original Letter Agreement No. 1 to the Agreement to the extent relating to the 2011 Incremental Aircraft.
 
1	*****	
 
1.1	*****	
*****
 
1.2	*****	
*****
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA07 – Ref. D11032737 - December 2011
- Letter Agreement No 7 -Page 2/3

LETTER AGREEMENT No. 7 TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	  	Agreed and accepted	
		
For and on behalf of	  	For and on behalf of	
CONTROLADORA VUELA	  	         AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	  		
		
/s/ Alfonso Ascencio Triujeque	  	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	  	Name:	  	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	  	Its:	  	Senior Vice President
Contracts	
			
/s/ Mario E. Geyne	  		  		
Name:	 	Mario E. Geyne	  		  		
Its:	 	Financial and Fleet
Planning Director	  		  		
 
A320FAM PA – VOI – AMDT 8 LA07 – Ref. D11032737 - December 2011
- Letter Agreement No 7 -Page 3/3

EXECUTION VERSION 23.12.11 12h00
Letter Agreement No. 8 to Amendment No. 8 and Amendment No. 9
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ,
Prolongación Paseo de la Reforma Número 490,
Piso 1, Colonia Santa Fe Peña Blanca,
01210 Mexico,
Delegación Álvaro Obregón,
México, D.F. México
 
SUBJECT:	    A320 FAMILY AND A320NEO FAMILY ***** SUPPORT PROPOSAL	
      LETTER AGREEMENT (the “ Letter Agreement ”) 
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Buyer ”) and AIRBUS S.A.S. (“ Airbus ”) have entered into two amendment agreements of even date herewith (“ Amendment No. 8 ” and “ Amendment No. 9 ”) each to the purchase agreement dated 28 October 2005 as supplemented and amended from time to time (together the “ Purchase Agreement ”) which sets out, amongst other things, the principal terms and conditions pursuant to which Airbus shall agree to manufacture and sell and the Buyer shall purchase an incremental fourteen (14) firmly ordered Airbus A320 family aircraft (the “ 2011 Incremental Aircraft ”) and thirty (30) firmly ordered Airbus A320neo family (the “ NEO Aircraft ”) aircraft (together the “ Aircraft ”).
Capitalised terms used in this Letter Agreement (and the Exhibit attached hereto) and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Purchase Agreement (including definitions incorporated therein by reference to another document). In this Letter Agreement, Airbus and the Engine Manufacturer (and any of their respective subsidiaries, affiliates or parent companies) shall collectively be referred to as the “ Manufacturers ” and “ affiliates ” shall mean, with respect to any entity (“ Entity ”), any other entity directly or indirectly controlling or controlled by the Entity or under direct or indirect common control with the Entity or any other member companies of the same group as the Entity, as the case may be.
The Buyer and the Seller agree that this Letter Agreement constitutes an integral, non-severable part of the Purchase Agreement and shall be governed by all its provisions save where such provisions have been specifically amended pursuant to this Letter Agreement. In the event of any conflict between the terms of this Letter Agreement (and the Exhibit attached hereto) and the terms of the Purchase Agreement (and any of the exhibits or appendices thereto), the terms of this Letter Agreement shall prevail.
Nothing in this Letter Agreement shall be construed as constituting any waiver or limitation of the obligations of the Buyer under the Purchase Agreement or in any way absolving the Buyer from its obligation to take delivery of any Aircraft under the Purchase Agreement.

*****
*****
 
Page 2/19

*****
 
Page 3/19

*****
 
Page 4/19

*****
 
Page 5/19

*****
 
Page 6/19

*****
 
Page 7/19

*****
 
Page 8/19

*****
 
Page 9/19

*****
 
Page 10/19

*****
 
Page 11/19

*****
 
Page 12/19

*****
 
Page 13/19

*****
 
Page 14/19

*****
 
Page 15/19

*****
 
Page 16/19

*****
 
Page 17/19

*****
 
Page 18/19

Exhibit
*****
………………………………….
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
 
Page 19/19

Letter Agreement No. 8 to Amendment No. 8 and Amendment No. 9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to Airbus.

Agreed and Accepted	 	Agreed and Accepted	
For and on behalf of	 	For and on behalf of	
		
CONTROLADORA VUELA
COMPAÑÍA DE AVIACIÓN,
S.A.P.I. DE C.V.	 	AIRBUS S.A.S.	

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
December 27, 2011
 
A320FAM PA – VOI – AMDT 8 and 9 LA8 – Ref. D11032737 - December 2011
- Letter Agreement No 9

LETTER AGREEMENT No. 9 TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – BACKLOG AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA09 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 1/3

LETTER AGREEMENT No. 9 TO AMENDMENT No. 8
 
This Letter Agreement No. 9 is applicable to the ***** as set forth in the delivery schedule in Clause 4 of Amendment No. 8 (the “***** Aircraft”) only.
 
1	In the context of the transactions outlined in Amendment No. 8 and Amendment No. 9, the Seller ***** Aircraft ***** Aircraft (the “*****”).	
The ***** is in US Dollars quoted in *****.
The Buyer understands and acknowledges that the Seller has *****.
*****
*****
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 8 LA09 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 2/3

LETTER AGREEMENT No. 9 TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 	Agreed and accepted	
		
For and on behalf of	 	For and on behalf of	
CONTROLADORA VUELA	 	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet
Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 8 LA09 – Ref. D11032737 - December 2011
- Letter Agreement No 1 -Page 3/3

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8
 
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : PDPs – 2011 INCREMENTAL AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no. 8 (the “Amendment No. 8”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No. 8. The Purchase Agreement as amended together with the Amendment No. 8 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No. 8.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No. 8 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 8 LA10 – Ref. D11032737 - December 2011
- Letter Agreement No 10 -Page 1/6

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8
 
This Letter Agreement No. 10 is applicable to the 2011 Incremental Aircraft only.
 
1	Predelivery Payment Schedule	
 
1.1	*****	
In respect of the 2011 Incremental Aircraft, Clause 5.2 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
5.2 *****
*****
UNQUOTE
 
1.2	Predelivery Payment Reference Price	
In respect of the 2011 Incremental Aircraft, Clause 5.3.1 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
5.3.1
The Buyer shall pay Predelivery Payments to the Seller calculated on the predelivery payment reference price of each 2011 Incremental Aircraft. The predelivery payment reference price is determined by the following formula:
*****
*****
*****
UNQUOTE
 
A320FAM PA – VOI – AMDT 8 LA10 – Ref. D11032737 - December 2011
- Letter Agreement No 10 -Page 2/6

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8

1.3	Predelivery Payment Schedule ***** Aircraft	
In respect of the 2011 Incremental Aircraft having their Scheduled Delivery Month (or Scheduled Delivery Quarter as the case may be) in the year ***** , Clause 5.3.2 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
Predelivery Payments for the ***** shall be made in accordance with the following schedule:

DUE DATE OF PAYMENTS	  	USD AMOUNT OR
PERCENTAGE OF
PREDELIVERY PAYMENT
REFERENCE PRICE	
*****	  	USD *****	
		
*****	  	USD *****	
		
*****	  	USD *****	
		
*****	  		
		
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	  	*****	
 
Total Payment prior to Delivery
UNQUOTE
 
A320FAM PA – VOI – AMDT 8 LA10 – Ref. D11032737 - December 2011
- Letter Agreement No 10 -Page 3/6

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8

1.4	Predelivery Payment Schedule ***** Aircraft *****	
In respect of the 2011 Incremental Aircraft not having their Scheduled Delivery Month (or Scheduled Delivery Quarter as the case may be) in the ***** , Clause 5.3.2 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
Predelivery Payments for the ***** shall be made in accordance with the following schedule:

DUE DATE OF PAYMENTS	  	USD AMOUNT OR
PERCENTAGE OF
PREDELIVERY PAYMENT
REFERENCE PRICE	
*****
*****	  	USD *****
USD *****	
		
*****	  	USD *****	
		
*****	  	USD *****	
		
*****	  	USD *****	
		
*****	  		
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	  	*****	
 
Total Payment prior to Delivery
UNQUOTE
 
A320FAM PA – VOI – AMDT 8 LA10 – Ref. D11032737 - December 2011
- Letter Agreement No 10 -Page 4/6

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
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- Letter Agreement No 10 -Page 5/6

LETTER AGREEMENT No. 10 TO AMENDMENT No. 8
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 	Agreed and accepted	
		
For and on behalf of	 	For and on behalf of	
CONTROLADORA VUELA	 	            AIRBUS S.A.S.	
COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico
General Counsel	 		 	Its:	 	Senior Vice President
Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet
Planning Director	 		 		 		
 
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- Letter Agreement No 10 -Page 6/6

AMENDMENT N° 9
TO THE
A320 FAMILY PURCHASE AGREEMENT
BETWEEN
AIRBUS S.A.S.
as “Seller”
A N D
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
as “Buyer”
Reference : D11032737

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AMENDMENT N° 9 TO THE
A320 FAMILY PURCHASE AGREEMENT
This Amendment No.9 (hereinafter referred to as the “ Amendment No.9 ”) is entered into as of the      day of December 2011.
BETWEEN:
AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),
and
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. DE C.V. a company organised under the laws of Mexico having its principal place of business at Prolongación Paseo de la Reforma 490, Primer Piso, Colonia Santa Fe Peña Blanca, Código Postal 01210, Delegación Álvaro Obregón, Mexico, D.F. Mexico (the “ Buyer ”).
Together the “ Parties ”
WHEREAS :
 
 	A.	The Buyer and the Seller entered into an A320 Family Purchase Agreement dated the 28 th  October 2005 for the sale by the Seller and the purchase by the Buyer of sixteen (16) A320 Family Aircraft (thereinafter together with its Exhibits, appendices and Letter Agreements referred to as the “ Agreement ”).	
 
 	B.	The Buyer and the Seller have entered into an Amendment No.1 to the Agreement dated the 22 nd  June 2007 (the “ Amendment No.1 ”) to amend certain provisions of the Agreement.	
 
 	C.	The Buyer and the Seller have entered into an Amendment No.2 to the Agreement dated the 11 th  July 2008 (the “ Amendment No.2 ”) to amend certain provisions of the Agreement.	
 
 	D.	The Buyer and the Seller have entered into an Amendment No.3 to the Agreement dated the 30 th  January 2009 (the “ Amendment No.3 ”) to amend certain provisions of the Agreement.	
 
 	E.	The Buyer and the Seller have entered into an Amendment No.4 to the Agreement dated the 28 th  October 2010 (the “ Amendment No.4 ”) to amend certain provisions of the Agreement.	

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 	F.	The Buyer and the Seller have entered into an Amendment No.5 to the Agreement dated the 15 th  December 2010 (the “ Amendment No.5 ”) to amend certain provisions of the Agreement.	
 
 	G.	The Buyer and the Seller have entered into an Amendment No.6 to the Agreement dated the 15 th  December 2010 (the “ Amendment No.6 ”) to amend certain provisions of the Agreement.	
 
 	H.	The Buyer and the Seller have entered into an Amendment No.7 to the Agreement dated the 4 th  January 2011 (the “ Amendment No.7 ”) to amend certain provisions of the Agreement.	
 
 	I.	The Buyer and the Seller wish to enter into this Amendment No.9 to the Agreement for the purchase by the Buyer and the sale by the Seller of thirty (30) incremental Aircraft including the Neo Option and the Sharklets.	
 
 	J.	Simultaneously with the execution of this Amendment No.9, the Buyer and the Seller wish to enter into an amendment no.8 to the Agreement (the “Amendment No.8”) for the purchase by the Buyer and the sale by the Seller of fourteen (14) incremental Aircraft including the Sharklets.	
 
 	K.	It is understood that Amendment No.9, upon execution thereof, shall constitute an integral and non-severable part of the Agreement and that all terms and conditions of the Agreement shall apply to this Amendment No.9, unless otherwise agreed upon herein. The provisions of this Amendment No.9 shall supersede any contrary provisions of the Agreement in respect of the 2011 Incremental Aircraft.	
 
 	L.	Capitalized terms used herein and not otherwise defined will have the meaning assigned to them in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment No.9.	
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

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T A B L E  O F  C O N T E N T S

Clauses	  	Titles	
		
0	  	SCOPE	
		
1	  	DEFINITIONS	
		
2	  	NEO AIRCRAFT SPECIFICATION	
		
3	  	NEO AIRCRAFT PRICES	
		
4	  	NEO AIRCRAFT DELIVERY SCHEDULE	
		
5	  	NEO AGREEMENT AMENDMENTS	
		
6	  	MISCELLANEOUS PROVISIONS	

EXHIBIT A	  	PRICE REVISION FORMULAE	
	  	Part 1: Airframe Price Revision Formula	
	  	Part 2: Propulsion Systems Price Revision Formula – PW	
	  	Part 3: Propulsion Systems Price Revision Formula – CFM International	
		
EXHIBIT B1	  	STANDARD SPECIFICATION	
		
EXHIBIT B2	  	SCN LISTS	
	  	Appendix 1: A319-100	
	  	Appendix 2: A320-200	
	  	Appendix 3: A321-200	
		
EXHIBIT B3	  	CABIN LAYOUTS	
	  	Appendix 1: A319-100	
	  	Appendix 2: A320-200	
	  	Appendix 3: A321-200	
		
EXHIBIT B4	  	FORM OF MANUFACTURER SPECIFICATION CHANGE NOTICE (MSCN)	

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0.	SCOPE	
 
0.1	Sale and Purchase : Pursuant to and in accordance with the terms and conditions contained in this Amendment No.9 (and incorporating the relevant provisions of the Agreement), the Seller shall sell and deliver and the Buyer shall buy and take delivery of thirty (30) A320NEO Aircraft (hereinafter referred to as the “ NEO Aircraft ” ).	
 
0.2	Amendment of Existing Provisions : The Buyer and the Seller agree to amend certain provisions of the Agreement pursuant to the terms and conditions set out in this Amendment No.9.	
 
0.3	With effect from the date hereof, all references to “Aircraft” in the Agreement shall be deemed to include the NEO Aircraft unless expressly stipulated otherwise herein or elsewhere.	
 
0.4	Save to the extent specified to the contrary in this Amendment No. 9 (or any associated Letter Agreements), all of the terms and conditions respectively relating to A319-100, A320-200 and A321-200 set out in the Agreement and its Exhibits and Appendices shall apply to the relevant NEO Aircraft.	
 
0.5	Applicability of Previous Letter Agreements	
 
0.5.1	The following Letter Agreements to the Agreement shall not apply in respect of the NEO Aircraft and shall be replaced , where applicable, as follows:	
 
 	(a)	Letter Agreement No. 1 ***** – replaced by Letter Agreement No.1 to this Amendment No.9 ***** – NEO Aircraft);	
 
 	(b)	Letter Agreement No. 2 ***** – replaced by Letter Agreement No.2 to this Amendment No.9 and to Amendment No.8 (European Export Credit Financing);	
 
 	(c)	Letter Agreement No. 3 ***** – replaced by Letter Agreement No.3 to this Amendment No.9 ***** – NEO Aircraft);	
 
 	(d)	Letter Agreement No. 4 (Aircraft ***** and Delivery Date *****) – replaced by Letter Agreement No.4 to this Amendment No.9 (***** – NEO Aircraft);	
 
 	(e)	Letter Agreement No. 5A and Letter Agreement No.5B (Performance Guarantees) – replaced by Letter Agreements No.5G through Letter Agreement No.5L to this Amendment No.9 (Performance Guarantees NEO Aircraft);	
 
 	(f)	Letter Agreement No. 6 (Product Support) – replaced by Letter Agreement No.6 to this Amendment No.9 and to Amendment No.8 (Product Support);	
 
 	(g)	Letter Agreement No. 7 ***** – replaced by Letter Agreement No.7 to this Amendment No.9 (***** – NEO Aircraft);	
 
0.5.2	The following Letter Agreements shall be added in respect of the NEO Aircraft:	
 
 	(a)	Letter Agreement No.8 to this Amendment No.9 and to Amendment No.8 (***** Proposal Letter)	
 
 	(b)	Letter Agreement No.9 to this Amendment No.9 (PDPs – NEO Aircraft)	
 
0.5.3	No other Letter Agreements or previous side letters to the Agreement or any amendment to the Agreement shall apply in respect of the NEO Aircraft (except those stated in this Clause 0.5).	

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1.	DEFINITIONS	
The following terms and their associated definitions shall replace or complement as appropriate Clause 0 of the Agreement in respect of the NEO Aircraft:

A319 NEO	  	means an Airbus A319-100 aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems and any part, component, furnishing or equipment installed on the Aircraft at Delivery under the terms and conditions of this Agreement, as amended and supplemented from time to time.	
		
A320 NEO	  	means an Airbus A320-200 aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems and any part, component, furnishing or equipment installed on the Aircraft at Delivery under the terms and conditions of this Agreement, as amended and supplemented from time to time.	
		
A321 NEO	  	means an Airbus A321-200 aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems and any part, component, furnishing or equipment installed on the Aircraft at Delivery under the terms and conditions of this Agreement, as amended and supplemented from time to time.	
		
NEO Aircraft:	  	means individually or collectively, an A319 NEO, A320 NEO or an A321 NEO.	
		
Irrevocable SCNs:	  	means the list of SCNs, which are irrevocably part of the NEO Aircraft specifications, as expressly set forth in Appendix 1 through 3 of Exhibit B2 to Amendment No.9 of this Agreement.	
		
NEO Airframe Basic Price:	  	has the meaning set forth in Clause 3 of Amendment No.9.	
		
NEO Propulsion Systems:	  	has the meaning set forth in Clause 2.3 of Amendment No.9.	
		
NEO Propulsion Systems Basic Price:	  	has the meaning set forth in Clause 3 of Amendment No.9.	
		
New Engine Option:	  	has the meaning set forth in Clause 2.1.2 of Amendment No.9.	
		
Ready for Delivery:	  	means the time when the Technical Acceptance Process has been completed in accordance with Clause 8 and all technical conditions required for the issuance of the Export Airworthiness Certificate and/or the Statement of Conformity (as applicable) have been satisfied.	
		
Sharklets:	  	means a new large wingtip device, currently under development by the Seller, designed to enhance the eco-efficiency and payload range performance of the A320 family aircraft, and which are, in respect of the NEO Aircraft, part of the New Engine Option and corresponding Irrevocable SCNs.	

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2.	NEO AIRCRAFT SPECIFICATION	
 
2.0	Clause 2 of the Agreement as amended shall not apply to the Neo Aircraft and the following provisions shall apply in their place:	
QUOTE
 
2.1	Neo Aircraft Specification	
 
2.1.1	The relevant NEO Aircraft shall be manufactured in accordance with the Standard Specification applicable to the relevant Aircraft type as follows:	
 
 	(a)	the A319-100 standard specification document number *****, amended to incorporate the design weights:	

	 		 	MTOW	  	*****	  		  		  		
	 		 	MLW	  	*****	  		  		  		
	 		 	MZFW	  	*****	  		  		  		
 
 	(b)	the A320-200 standard specification document number *****, amended to incorporate the design weights:	

	 		 	MTOW	  	*****	  		  		  		
	 		 	MLW	  	*****	  		  		  		
	 		 	MZFW	  	*****	  		  		  		
 
 	(c)	the A321-200 standard specification document number *****, amended to incorporate the design weights:	

	 		 	MTOW	  	*****	  		  		  		
	 		 	MLW	  	*****	  		  		  		
	 		 	MZFW	  	*****	  		  		  		
copies of which have been annexed hereto as Exhibit B1.
(the “NEO Aircraft Standard Specification”)
The NEO Aircraft Standard Specifications may already have been modified or varied prior to the date of this Amendment No.9 by the Specification Change Notices listed in Appendices 1, 2 and 3 of Exhibit B2 hereof.
 
2.1.2	New Engine Option	
 
2.1.2.1	The Seller is currently developing a new engine option (the “New Engine Option” or “NEO”), applicable to the A319-100 A320-200 and A321-200 type aircraft. The specifications of the A319 NEO, A320 NEO and A321 NEO shall be derived from the current A319-100, A320-200 and A321-200 respective Standard Specification(s) and based on the new NEO Propulsion Systems, as set forth in Clause 2.3 below, and Sharklets, combined with the required airframe structural adaptations, as well as Aircraft systems and software adaptations required to operate such NEO Aircraft. The foregoing is currently reflected in the ***** listed in Exhibit B2, the implementation of which is hereby irrevocably accepted by the Buyer.	

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With respect to each NEO Aircraft type, the NEO Aircraft Standard Specification together with the Irrevocable SCNs for the New Engine Option and Sharklets and any other issued and applicable SCN shall be referred to as the NEO Aircraft Specification.
 
2.1.2.2	The New Engine Option shall amend the MLW and MZFW design weights of the NEO Aircraft Standard Specification(s) as follows:	

 	  	A319 NEO	 	A320 NEO	 	A321 NEO	
MLW	  	*****	 	*****	 	*****	
MZFW	  	*****	 	*****	 	*****	
It is agreed and understood that the above design weights may be updated upon final NEO specification freeze.
 
2.2	NEO Specification Amendment	
The parties understand and agree that the NEO Specification may be further amended following signature of this Amendment No.9 in accordance with the terms of this Clause 2.2.
 
2.2.1	Specification Change Notice	
The NEO Specification may be amended by written agreement between the parties in a Specification Change Notice (SCN). Each SCN shall set out the SCN’s relevant NEO Aircraft embodiment Aircraft Rank No. (as specified in Clause 4 hereof) and shall also set forth, in detail, the particular change to be made to the NEO Specification and the effect, if any, of such change on design, performance, weight, Delivery Date of the relevant NEO Aircraft affected thereby and on the text of the NEO Specification. An SCN may result in an adjustment of the relevant NEO Aircraft Base Price, which adjustment, if any, shall be specified in the SCN.
 
2.2.2	Development Changes	
The NEO Specification may also be amended to incorporate changes deemed necessary by the Seller to improve the A320 NEO Family Aircraft, prevent delay or ensure compliance with this Amendment No.9 (“Development Changes”), as set forth in this Clause 2.
 
2.2.2.1	Manufacturer Specification Changes Notices	
 
2.2.2.1.1	The NEO Specification may be amended by the Seller through a Manufacturer Specification Change Notice (“MSCN”), which shall be substantially in the form set out in Exhibit B4 hereto, or by such other means as may be deemed appropriate, and shall set out the MSCN’s relevant NEO Aircraft embodiment Aircraft Rank No. as well as, in detail, the particular change to be made to the NEO Specification and the effect, if any, of such change on performance, weight, Base Price, Delivery Date of the relevant NEO Aircraft affected thereby and interchangeability or replaceability requirements under the Specification.	
 
2.2.2.1.2	Except when the MSCN is necessitated by an Aviation Authority directive or by demonstrated equipment obsolescence, in which case the MSCN shall be accomplished	

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 	without requiring the Buyer’s consent, the Seller shall notify the Buyer of a reasonable period of time during which the Buyer must accept or reject such MSCN. If the Buyer does not notify the Seller of the acceptance of the MSCN within such reasonable period, the MSCN shall be deemed rejected by the Buyer and the corresponding modification shall not be accomplished.	
 
2.2.2.2	In the event of the Seller revising the NEO Specification to incorporate Development Changes which have no adverse effect on any of the elements as set forth in 2.2.2.1.2 above, such revision shall be performed by the Seller without the Buyer’s consent.	
The Buyer shall have access to the details of any such changes through the relevant application in AirbusWorld.
 
2.2.2.3	The Seller is *****	
 
2.3	NEO Propulsion Systems	
The Airframe of the NEO Aircraft shall be equipped with a set of either two (2) CFM LEAP-X engines or two (2) Pratt & Whitney PW1100G engines, upon selection referred to respectively the “NEO Propulsion Systems”.

 	  	Pratt & Whitney	 	CFM INTERNATIONAL	
A319 NEO	  	PW1124G
*****	 	LEAP-X 1A24
*****	
A320 NEO	  	PW1127G
*****	 	LEAP-X 1A26
*****	
A321 NEO	  	PW1133G
*****	 	LEAP-X 1A32
*****	
*****
If the Buyer has not selected the NEO Propulsion Systems as of the date of this Amendment No.9, such choice shall be made *****

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2.4	Customization Milestones	
 
2.4.1	Customization Milestones Chart	
Within a reasonable period following signature of the Amendment No.9, the Seller shall provide the Buyer with a customization milestones chart (the “ Customization Milestone Chart ”), setting out how far in advance of the Scheduled Delivery Month of the NEO Aircraft an SCN must be executed in order to integrate into the NEO Specification any items requested by the Buyer from the Seller’s catalogues of NEO Specification change options (the “Option Catalogues”).
The Seller shall provide the Buyer with the Customization Milestone chart ***** (with the most restrictive lead-time) needs to be executed.
 
2.4.2	Contractual Definition Freeze	
The Customization Milestone Chart shall in particular define the date(s) by which the contractual definition of the NEO Aircraft must be finalized and all SCNs need to have been executed by the Buyer (the “Contractual Definition Freeze” or “CDF”) in order to enable their incorporation into the manufacturing of the Aircraft and Delivery of the NEO Aircraft in the Scheduled Delivery Month. Each such date shall be referred to as a “CDF Date”.
UNQUOTE
 
3.	NEO AIRCRAFT PRICES	
With respect to the NEO Aircraft only, the provisions contained in clauses 3.1 of the Agreement shall not apply and the following provisions shall apply in their place:
QUOTE
 
 	3.1	Price of NEO Aircraft	
For each NEO Aircraft, the NEO Aircraft Basic Price shall be respectively the sum of:
 
 	i)	the NEO Airframe Basic Price as defined in Clause 3.1.1 below and	
 
 	ii)	the NEO Propulsion Systems Basic Price as defined in Clause 3.1.2 below.	
 
 	3.1.1	NEO Airframe Basic Price	
The NEO Airframe Basic Price is the sum of:
 
 	(i)	the basic price of the Airframe as defined in the relevant NEO Standard Specification, including Nacelles and Thrust Reversers, and excluding Buyer Furnished Equipment:	

For the A319 NEO:	  	*****	
	  	(US Dollars *****)	
		
For the A320 NEO:	  	USD *****	
	  	(US Dollars *****)	

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For the A321 NEO:	  	USD *****	
	  	(US Dollars *****)	
 
 	(ii)	the basic price of the preliminary SCN’s defined and listed in Appendices 1, 2 and 3 of Exhibit B2 to Amendment No.9:	

For the A319 NEO:	  	USD *****	
	  	(US Dollars *****	
		
For the A320 NEO:	  	USD *****	
	  	(US Dollars *****	
		
For the A321 NEO:	  	USD *****	
	  	(US Dollars *****	
 
 	(iii)	the basic price of the ***** for Sharklets for the A319 NEO, A320 NEO or A321 NEO:	

	  	USD *****	
	  	(US Dollars *****)	
 
 	(iv)	the basic price of the ***** for the NEO Option:	

For the A319 NEO:	  	USD *****	
	  	(US Dollars *****)	
		
For the A320 NEO:	  	USD *****	
	  	(US Dollars *****)	
		
For the A321 NEO:	  	USD *****	
	  	(US Dollars *****)	
 
 	(v)	the basic price of the “*****”, if the Buyer selects CFM LEAP-X NEO Propulsion Systems for the A319 NEO, A320 NEO or A321 NEO:	

	  	USD *****	
	  	(US Dollars *****)	
All respective NEO Airframe Basic Prices have been established in accordance with the ***** and corresponding to a theoretical delivery in January 2011 (the “ Base Period ”).
All respective NEO Airframe Basic Prices shall be revised up to the date of delivery of each respective NEO Aircraft in accordance with the Airframe Price Revision Formula set out in Part 1 of Exhibit A hereto.
 
 	3.1.2	NEO Propulsion Systems Basic Price	
The basic price of the NEO Propulsion Systems (the “NEO Propulsion Systems Basic Price”) shall, depending on the Propulsion Systems selected by the Buyer, be as applicable pursuant to Clauses 3.1.2.1 or 3.1.2.2.
 
 	3.1.2.1	The base price of a set of two (2) CFM INTERNATIONAL Propulsion Systems	

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LEAP-X 1A24:	  	USD *****	  	for A319 NEO	  		  		
					
LEAP-X 1A26:	  	USD *****	  	for A320 NEO	  		  		
					
LEAP-X 1A32:	  	USD *****	  	for A321 NEO	  		  		
The NEO Propulsion Systems Basic Prices have been established in accordance with the delivery conditions prevailing in ***** have been computed from the Propulsion Systems Reference Price as set forth in Exhibit A Part 2 to this Amendment No.9. The Propulsion Systems Reference Price corresponds to the thrust ratings defined for the respective Propulsion Systems in Clause 2.3 and may be revised to reflect thrust rating adjustments upon final NEO Aircraft specification freeze.
 
 	3.1.2.2	The base price for a set of two (2) Pratt & Whitney Propulsion Systems is:	

PW1124G:	  	USD *****	  	for A319 NEO	  		  		
					
PW1127G:	  	USD *****	  	for A320 NEO	  		  		
					
PW1133G:	  	USD *****	  	for A321 NEO	  		  		
The NEO Propulsion Systems Basic Prices have been established in accordance with the delivery conditions prevailing in ***** have been computed from the Propulsion Systems Reference Price as set forth in Exhibit A Part 3 to this Amendment No.9. The Propulsion Systems Reference Price corresponds to the thrust ratings defined for the respective Propulsion Systems in Clause 2.3 and may be revised to reflect thrust rating adjustments upon final NEO Aircraft specification freeze.
All respective NEO Propulsion Systems Basic Prices shall be revised up to the date of delivery of each respective NEO Aircraft in accordance with the relevant Propulsion Systems Price Revision Formula set out in Part 2 and Part 3 of Exhibit A hereto.
UNQUOTE
 
4.	NEO AIRCRAFT DELIVERY SCHEDULE	
The NEO Aircraft shall have the ***** and shall be added to the delivery schedule (as set forth in Clause 9.1.1 of the Agreement as amended by Amendment No.8) in accordance with the following:
QUOTE
 
 	9.1.1	Delivery Schedule	
Subject to Clauses 2, 7, 8, 10 and 18, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location within the following months:

Aircraft Rank	  	Aircraft Type	  	Delivery Month
/Quarter	  	Year	
				
***** A320 NEO	  	*****    2017	  		  		
***** A320 NEO	  	*****    2017	  		  		
				
***** A320 NEO	  	*****    2018	  		  		
***** A320 NEO	  	*****    2018	  		  		

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***** A320 NEO	  	*****    2018	  		  		
***** A320 NEO	  	*****    2018	  		  		
***** A320 NEO	  	*****    2018	  		  		
***** A320 NEO	  	*****    2018	  		  		
				
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
***** A320 NEO	  	*****    2019	  		  		
				
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
***** A320 NEO	  	*****    2020	  		  		
Each of above ***** shall be, with respect to the corresponding NEO Aircraft, the “ Scheduled Delivery Quarter ”. The Seller shall notify the Buyer no later than ***** in respect of each such NEO Aircraft. Following such notification by the Seller, each of such scheduled delivery months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.
For the sole purpose of calculating the Predelivery Payments, *****.
The Seller shall give the Buyer at least ***** prior written notice of the anticipated delivery week in which the Aircraft shall be ready for Delivery. Thereafter the Seller shall notify the Buyer of any change in such delivery week necessitated by the conditions of manufacture or flight.
UNQUOTE
 
5.	NEO AGREEMENT AMENDMENTS	
 
5.1	Predelivery Payments	
Clause 5.3.4 of the Agreement shall not apply to the NEO Aircraft and the following provisions shall apply in its place:
QUOTE

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	13/53	

5.3.4
5.3.4.1
*****
5.3.4.2
***** USD ***** (US Dollars – *****)*****.
5.3.4.3
*****
5.3.4.4
*****
For the purpose of this Clause 5.3.4, the term Aircraft shall include any of the NEO Aircraft and the 2011 Incremental Aircraft (as the term is set forth in Amendment No.8).
UNQUOTE

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	14/53	

5.2	Non-Excusable Delay	
Clause 11.1 through 11.3 of the Agreement shall not apply to the NEO Aircraft and is hereby replaced by the following:
QUOTE
 
 	11.1	Liquidated Damages	
Should any of the NEO Aircraft not be Ready for Delivery to the Buyer ***** after the last day of the Scheduled Delivery Month (as varied by virtue of Clauses 2, 5, 7, 10) (the “NEO Delivery Period”) and such delay is not a result of an Excusable Delay or Total Loss (a “Non-Excusable Delay”) , then the Buyer shall have the right to claim, and the Seller shall *****:
 
 	(i)	*****	
*****
 
 	(ii)	*****	
*****
 
 	(iii)	*****	
*****
 
 	(iv)	*****	
*****
 
 	(v)	*****	
*****
The amount of such liquidated damages shall in no event exceed the following total amounts in respect of any one NEO Aircraft:
*****
The Buyer shall submit a claim in respect of such liquidated damages in writing to the Seller.
In respect of the NEO Aircraft having their Scheduled Delivery Month in the years 2019 and later,
 
 	(a)	the NEO Delivery Period ***** after the last day of the respective Scheduled Delivery Month and as varied by virtue of Clauses 2, 5, 7, 10 and the liquidated damages shall be payable on the date falling ***** after the last day of the Scheduled Delivery, and	
 
 	(b)	*****	
For the purpose of this Clause 5.2 and in the event of the scheduled delivery for the relevant NEO Aircraft quoted in Scheduled Delivery Quarter at the time of notification by the Seller of the occurrence of a Non-Excusable Delay as per above provisions, the term Scheduled Delivery Month herein, if applicable, *****.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	15/53	

All amounts stated in this Clause 11.1 shall be:
 
 	(a)	flat amounts in respect of the NEO Aircraft having their Scheduled Delivery Month in the *****, and	
 
 	(b)	quoted in ***** in respect of the NEO Aircraft having their Scheduled Delivery Month in the ***** and later and shall be revised up to the date of the initial Scheduled Delivery Month of each affected NEO Aircraft in accordance with the Airframe Price Revision Formula set out in Part 1 of Exhibit A of the Amendment No.9 as amended by Letter Agreement No.7 to the Amendment No.9.	
The Airframe Price Revision Formula a set forth in Part 1 of Exhibit A hereto shall not be applicable for any period of Non-Excusable Delay falling directly after the NEO Delivery Period when revising any amount subject to revision by the Airframe Price Revision Formula.
11.2 Re-negotiation
If, as a result of Non-Excusable Delay, Delivery does not occur in the period falling ***** after the NEO Delivery Period (the “Re-negotiation Period”), the Buyer shall have the right exercisable by written notice to the Seller given ***** after the expiration of the Re-negotiation Period to require from the Seller a re-negotiation of the Scheduled Delivery Month (or Scheduled Delivery Quarter as the case may be) for the affected NEO Aircraft. Unless otherwise agreed between the Seller and the Buyer during such re-negotiation, the re-negotiation shall not prejudice the Buyer’s right to receive liquidated damages in accordance with Clause 11.1 during the period of Non-Excusable Delay.
With respect to the NEO Aircraft having their Scheduled Delivery Month in the *****, the Re-negotiation Period *****.
11.3 Termination
If, as a result of Non-Excusable Delay, Delivery does not occur within ***** after the NEO Delivery Period (the “Termination Period”) and the parties have not re-negotiated the Delivery Date (or the Scheduled Delivery Month or Scheduled Delivery Quarter as the case may be) pursuant to Clause 11.2, the Buyer in its discretion and the Seller in the exercise of good faith shall have the right exercisable by written notice to the other party, given ***** after expiration of the Termination Period to terminate the Agreement in respect of the affected NEO Aircraft ***** and neither party shall have any claim against the other in respect of such non-delivery except that the Seller shall *****.
Such ***** payable pursuant to sub-Clause 11.1.
The Seller, *****.
With respect to the NEO Aircraft having their Scheduled Delivery Month in the *****, the Termination Period *****.
UNQUOTE
7.3.2.
Notwithstanding the provisions of sub-Clauses 7.3.1 (i) and (ii), if the Change in Law relates to the Propulsion Systems, the costs shall be borne in accordance with such arrangements as may be made separately between the Buyer and the Propulsion Systems Manufacturer.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	16/53	

UNQUOTE
 
5.3	Buyer Furnished Equipment	
Clause 18.1.4 of the Agreement shall not apply to the NEO Aircraft and the following provisions shall apply in its place:
QUOTE
18.1.4
*****
UNQUOTE
 
5.4	Taxes	
Clause 5.8 of the Agreement shall not apply to the NEO Aircraft and the following provisions shall apply in its place:
QUOTE
5.6 Taxes
5.6.1
*****
5.6.2
*****
5.6.3
The Buyer shall bear the costs of and pay any and all taxes, duties or similar charges of any nature arising in connection with this Agreement and not assumed by the Seller under Clause 5.6.2 including but not limited to any duties or taxes due upon or in relation to the importation or registration of the NEO Aircraft in Buyer’s country and/or any withholdings or deductions levied or required in Buyer’s country in respect of the payment to the Seller of any amount due by the Buyer under the Agreement.
UNQUOTE
 
6.	MISCELLANEOUS PROVISIONS	
 
6.1	Effect of the Amendment	
The Agreement will be deemed amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment No.9 supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment No.9.
Both parties agree that this Amendment No.9 will constitute an integral, non-severable part of the Agreement and shall be governed by its provisions, except that if the Agreement and this Amendment No.9 have specific provisions that are inconsistent, the specific provisions contained in this Amendment No.9 shall govern.

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Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Agreement and its Exhibits.
 
6.2	Confidentiality	
This Amendment No.9 is subject to the confidentiality provisions set forth in Clause 22.10 of the Agreement.
 
6.3	Law and Jurisdiction	
This Amendment No.9 shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Amendment No.9 shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
6.4	Severability	
In the event that any provision of this Amendment No.9 should for any reason be held ineffective, the remainder of this Amendment No.9 shall remain in full force and effect. To the extent permitted by applicable law, each Party hereby waives any provision of law which renders any provision of this Amendment No.9 prohibited or unenforceable in any respect. Any provisions of this Amendment No.9 which may prove to be or become illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Amendment No.9.
This Amendment No.9 is executed in two original English counterparts, each of which is an original and both of which together evidence the same agreement. This Amendment No.9 shall not be varied or modified except by an instrument in writing executed by both parties or by their duly authorised representatives.
 
6.5	Validity	
In order to be valid, this Amendment No.9 shall be executed together with Amendment No.8 as of the same date as the date hereof.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	18/53	

IN WITNESS WHEREOF this Amendment No.9 was entered into the day and year first above written.

Agreed and accepted	 		 	Agreed and accepted	
			
For and on behalf of	 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	19/53	

EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
With respect to the NEO Aircraft only, the Airframe Price Revision Formula contained in Part 1 of Exhibit C of the Agreement is hereby cancelled and replaced by the following Airframe Price Revision Formula:
 
PART 1	AIRFRAME PRICE REVISION FORMULA	
 
1	BASE PRICE	
The Airframe Base Price quoted in Clause 3.1 of the Agreement is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
2	BASE PERIOD	
The Airframe Base Price has been established in accordance with the average economic conditions prevailing in ***** as defined by “ECIb” and “ICb” index values indicated hereafter.
 
3	INDEXES	
Labor Index: “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100).
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I.
Material Index: “Industrial Commodities” (hereinafter referred to as “IC”) as published in “PPI Detailed Report” (found in Table 6. “Producer price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	20/53	

EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
 
4	REVISION FORMULA	

*****	 		 		  		  		
*****	 		 		  		  		
*****:	 	*****	 		  		  		
*****	 	:	 	*****	  		  		
*****	 	:	 	*****	  		  		
*****	 	:	 	*****	  		  		
*****	 	:	 	*****	  		  		
*****	 	:	 	*****	  		  		
*****	 	:	 	*****	  		  		
 
5	GENERAL PROVISIONS	
 
5.1	Roundings	
The Labor Index average and the Material Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
Each quotient ***** and ***** shall be rounded to the nearest ten-thousandth (4 decimals). If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
The final factor shall be rounded to the nearest ten-thousandth (4 decimals).
The final price shall be rounded to the nearest whole number (0.5 or more rounded to 1).

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EXHIBIT A – PART 1 – AIRFRAME PRICE REVISION FORMULA
 
5.2	Substitution of Indexes for Airframe Price Revision Formula	
If:
 
 	(i)	the United States Department of Labor substantially revises the methodology of calculation of the Labor Index or the Material Index as used in the Airframe Price Revision Formula, or	
 
 	(ii)	the United States Department of Labor discontinues, either temporarily or permanently, such Labor Index or such Material Index, or	
 
 	(iii)	the data samples used to calculate such Labor Index or such Material Index are substantially changed;	
the Seller shall select a substitute index for inclusion in the Airframe Price Revision Formula (the “Substitute Index”).
The Substitute Index shall reflect as closely as possible the actual variance of the Labor Costs or of the material costs used in the calculation of the original Labor Index or Material Index as the case may be.
As a result of the selection of the Substitute Index, the Seller shall make an appropriate adjustment to the Airframe Price Revision Formula to combine the successive utilization of the original Labor Index or Material Index (as the case may be) and of the Substitute Index.
 
5.3	Final Index Values	
The Index values as defined in Clause 4 above shall be considered final and no further adjustment to the base prices as revised at Delivery of the Aircraft shall be made after Aircraft Delivery for any subsequent changes in the published Index values.
 
5.4	Limitation	
*****

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	22/53	

EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
With respect to the NEO Aircraft only, the Propulsion Systems Price Revision Formula contained in Part 2 and Part 3 of Exhibit C of the Agreement are hereby cancelled and replaced by the following Propulsion Systems Price Revision Formula:
 
PART 2	PROPULSION SYSTEMS PRICE REVISION FORMULA	
CFM INTERNATIONAL
 
1	REFERENCE PRICE OF THE PROPULSION SYSTEMS	
 
1.1	The Reference Price of a set of two (2) CFM INTERNATIONAL CFM LEAP-X1A24 Engines is:	
*****
(US Dollars *****)
 
1.2	The Reference Price of a set of two (2) CFM INTERNATIONAL CFM LEAP-X1A26 Engines is:	
*****
(US Dollars *****)
 
1.3	The Reference Price of a set of two (2) CFM INTERNATIONAL CFM LEAP-X1A32 Engines is:	
USD *****
(US Dollars *****)
 
1.4	This above Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions of Clauses 4 and 5 of this Exhibit C.	
 
2.	REFERENCE PERIOD	
The Reference Price has been established in accordance with the ***** as defined by CFM INTERNATIONAL by the Reference Composite Price Index *****.
 
3.	INDEXES	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ ECI336411W ”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in: Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100, *****).
The quarterly value released for a certain month ***** shall be the one deemed to apply for the two preceding months.

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EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I
Material Index: “Industrial Commodities” (hereinafter referred to as “ IC ”) as published in “PPI detailed report” (found in Table 6. “Producer price indexes and percent changes for commodity groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15.
 
4.	REVISION FORMULA	
*****
*****
*****
*****
*****
*****
*****
*****
*****

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EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
5.	GENERAL PROVISIONS	
 
5.1	Roundings	
 
 	(i)	The Material index average (ICn) shall be rounded to the nearest second decimal place and the labor index average (ECIn) shall be rounded to the nearest first decimal place.	
 
 	(ii)	CPIn shall be rounded to the nearest second decimal place.	
 
 	(iii)	The final factor ***** shall be rounded to the nearest third decimal place.	
If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure. After final computation Pn shall be rounded to the nearest whole number (0.5 rounds to 1).
 
5.2	Final Index Values	
The revised Reference Price at the date of Aircraft Delivery shall not be subject to any further adjustments in the indexes.
 
5.3	Interruption of Index Publication	
If the US Department of Labor substantially revises the methodology of calculation or discontinues any of these indexes referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by CFM INTERNATIONAL, such substitute index to lead in application to the same adjustment result, insofar as possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this result.
 
5.4	Annulment of the Formula	
Should the above escalation provisions become null and void by action of the US Government, the Reference Price shall be adjusted due to increases in the costs of labor and materiel which have occurred from the period represented by the applicable Reference Composite Price Index to the twelfth (12th) month prior to the month of Aircraft Delivery.
 
5.5	Limitation	
Should the *****

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EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
PART 3	PROPULSION SYSTEMS PRICE REVISION FORMULA	
PRATT AND WHITNEY
 
1.	REFERENCE PRICE OF THE PROPULSION SYSTEMS	
 
1.1	The Reference Price of a set of two (2) PRATT AND WHITNEY PW1124G Engines is:	
USD *****
(US Dollars *****)
The Reference Price is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
1.2	The Reference Price of a set of two (2) PRATT AND WHITNEY PW1127G Engines is:	
USD *****
(US Dollars *****)
The Reference Price is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
1.3	The Reference Price of a set of two (2) PRATT AND WHITNEY PW1133G Engines is:	
USD *****
(US Dollars *****)
The Reference Price is subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics, and in accordance with the provisions hereof.
 
2.	BASE PERIOD	
The Reference Price has been established in accordance with the ***** and corresponding to a theoretical delivery in January 2010 as defined by “ECIb”, “ICb” and “C10b” index values indicated hereafter.

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EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
3.	INDEXES	
Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100).
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: CIU2023211000000I.
Material Index : “Industrial Commodities” (hereinafter referred to as “IC”) as published in “PPI Detailed Report” (found in Table 6. “Producer Price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publication title and/or table). (Base Year 1982 = 100)
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU03THRU15
Metal Index : “Metals and metal products” Code 10” (hereafter referred to as “C10”) as published in “PPI Detailed Report” (found in Table 6. “Producer Price indexes and percent changes for commodity and service groupings and individual items not seasonally adjusted” or such other names that may be from time to time used for the publications title and/or table). (Base 1982 = 100).
Index code for access on the Web site of the US Bureau of Labor Statistics: WPU10

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EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
4.	REVISION FORMULA	
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	28/53	

EXHIBIT A – PART 2 AND PART 3 – NEO Propulsion Systems Price Revision Formula
 
5.	GENERAL PROVISIONS	
 
5.1	Roundings	
The Labor Index average, the Material Index average and the Metal Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
Each quotient ***** shall be rounded to the nearest ten-thousandth (4 decimals). If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.
The final factor shall be rounded to the nearest ten-thousandth (4 decimals). The final price shall be rounded to the nearest whole number (0.5 or more rounded to 1).
 
5.2	Substitution of Indexes for Price Revision Formula	
If:
 
 	(i)	the United States Department of Labor substantially revises the methodology of calculation of the Labor Index , the Material Index or the Metal Index, as used in the Price Revision Formula, or	
 
 	(ii)	the United States Department of Labor discontinues, either temporarily or permanently, such Labor Index, such Material Index or such Metal Index, or	
 
 	(iii)	the data samples used to calculate such Labor Index, such Material Index, or such Metal Index are substantially changed;	
Pratt and Whitney shall select a substitute index for inclusion in the Price Revision Formula (the “Substitute Index”) and the Seller shall reflect such Substitute Index.
The Substitute Index shall reflect as closely as possible the actual variance of the labor costs, of the material costs or of the metal costs used in the calculation of the original Labor Index, Material Index or Metal Index, as the case may be.
As a result of the selection of the Substitute Index, an appropriate adjustment to the Price Revision Formula shall be performed, to combine the successive utilization of the original Labor Index, Material Index or Metal Index (as the case may be) and of the Substitute Index.
 
5.3	Final Index Values	
The Index values as defined in Clause 4 above shall be considered final and no further adjustment to the adjusted Reference Price as revised at Aircraft Delivery (or payment of such revised amounts, as the case may be) shall be respectively made after Delivery (or payment of such adjusted amounts, as the case may be) for any subsequent changes in the published Index values.
 
5.4	Limitation	
Should the sum of *****.

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EXHIBIT B1 – STANDARD SPECIFICATION
With respect to the NEO Aircraft only, the Standard Specifications contained in Exhibit A of the Agreement as amended are hereby cancelled and replaced by the following Standard Specifications:
A319-100 standard specification document number ***** contained in a separate folder.
A320-200 standard specification document number ***** contained in a separate folder.
A321-200 standard specification document number ***** contained in a separate folder.

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EXHIBIT B2 – SCN LISTS
With respect to the NEO Aircraft only, the SCN lists contained in Appendix 1.1 through 1.3 to Exhibit A of the Agreement as amended are hereby cancelled and replaced by the following SCN lists:
Appendix 1: A319 NEO SCN List
A319-100 STANDARD SPECIFICATION Ref. *****
All prices are in USD at Delivery Conditions specified on each column
NB: Certain options from the currently available catalogues and contained below may not be applicable and/or certified for NEO Aircraft

EPAC TDU	  	Title	  	A319 Price per a/c
USD D.C 01/2011	  	Comments	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.12. *****	  	*****	  	*****	  	*****	
CN02.40. *****	  	*****	  	*****	  	*****	
CN02.40. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.21. *****	  	*****	  	*****	  	*****	
CN11.22. *****	  	*****	  	*****	  	*****	
CN11.22. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN21.27. *****	  	*****	  	*****	  	*****	
CN21.70. *****	  	*****	  	*****	  	*****	
CN22.00. *****	  	*****	  	*****	  	*****	

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	31/53	

EXHIBIT B2 – SCN LISTS

CN22.70. *****	  	*****	  	*****	  	*****	
CN23.00. *****	  	*****	  	*****	  	*****	
CN23.11. *****	  	*****	  	*****	  	*****	
CN23.13. *****	  	*****	  	*****	  	*****	
CN23.50. *****	  	*****	  	*****	  	*****	
CN23.51. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
CN25.20. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.26. *****	  	*****	  	*****	  	*****	
CN25.27. *****	  	*****	  	*****	  	*****	
CN25.28. *****	  	*****	  	*****	  	*****	
CN25.28. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.45. *****	  	*****	  	*****	  	*****	
CN25.62. *****	  	*****	  	*****	  	*****	
CN25.65. *****	  	*****	  	*****	  	*****	
CN25.65. *****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	
CN29.10. *****	  	*****	  	*****	  	*****	
CN29.21. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN32.40. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.48. *****	  	*****	  	*****	  	*****	
CN33.12. *****	  	*****	  	*****	  	*****	
CN33.20. *****	  	*****	  	*****	  	*****	
CN33.50. *****	  	*****	  	*****	  	*****	
CN34.10. *****	  	*****	  	*****	  	*****	
CN34.13. *****	  	*****	  	*****	  	*****	
CN34.41. *****	  	*****	  	*****	  	*****	
CN34.42. *****	  	*****	  	*****	  	*****	
CN34.42. *****	  	*****	  	*****	  	*****	
CN34.43*****	  	*****	  	*****	  	*****	
CN34.48. *****	  	*****	  	*****	  	*****	
CN35.20. *****	  	*****	  	*****	  	*****	
CN35.31. *****	  	*****	  	*****	  	*****	
CN38.41. *****	  	*****	  	*****	  	*****	
CN46.21. *****	  	*****	  	*****	  	*****	
CN49.00. *****	  	*****	  	*****	  	*****	

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	32/53	

EXHIBIT B2 – SCN LISTS

CN51.22. *****	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  	*****	
CN52.51. *****	  	*****	  	*****	  	*****	
CN55.30. *****	  	*****	  	*****	  	*****	
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.21. *****	  	*****	  	*****	  	*****	
CN57.40. *****	  	*****	  	*****	  	*****	
CN72.00. *****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	
Subject to certification, ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be *****USD *****.
In addition, the Seller has presented to the Buyer the ***** which mainly consists of an *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ***** becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, the Seller shall *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	33/53	

EXHIBIT B2 – SCN LISTS
 
Appendix 2: A320 NEO SCN List
A320-200 STANDARD SPECIFICATION Ref. Issue 8.0
All prices are in USD at Delivery Conditions specified on each column
NB: Certain options from the currently available catalogues and contained below may not be applicable and/or certified for NEO Aircraft

EPAC TDU	  	Title	  	A320 Price per
a/c ***** *****	  	Comments	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.12. *****	  	*****	  	*****	  	*****	
CN02.40. *****	  	*****	  	*****	  	*****	
CN02.40. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.00. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.20. *****	  	*****	  	*****	  	*****	
CN11.21. *****	  	*****	  	*****	  	*****	
CN11.22. *****	  	*****	  	*****	  	*****	
CN11.22. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  	*****	
CN21.27. *****	  	*****	  	*****	  	*****	
CN21.70. *****	  	*****	  	*****	  	*****	
CN22.00. *****	  	*****	  	*****	  	*****	
CN22.70. *****	  	*****	  	*****	  	*****	
CN23.00. *****	  	*****	  	*****	  	*****	
CN23.11. *****	  	*****	  	*****	  	*****	

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	34/53	

EXHIBIT B2 – SCN LISTS

CN23.13. *****	  	*****	  	*****	  	*****	
CN23.50. *****	  	*****	  	*****	  	*****	
CN23.51. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
CN25.20. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.26. *****	  	*****	  	*****	  	*****	
CN25.28. *****	  	*****	  	*****	  	*****	
CN25.28. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.45. *****	  	*****	  	*****	  	*****	
CN25.62. *****	  	*****	  	*****	  	*****	
CN25.65. *****	  	*****	  	*****	  	*****	
CN25.65. *****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	
CN29.10. *****	  	*****	  	*****	  	*****	
CN29.21. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN32.40. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.48. *****	  	*****	  	*****	  	*****	
CN33.12. *****	  	*****	  	*****	  	*****	
CN33.20. *****	  	*****	  	*****	  	*****	
CN33.50. *****	  	*****	  	*****	  	*****	
CN34.10. *****	  	*****	  	*****	  	*****	
CN34.13. *****	  	*****	  	*****	  	*****	
CN34.41. *****	  	*****	  	*****	  	*****	
CN34.42. *****	  	*****	  	*****	  	*****	
CN34.42. *****	  	*****	  	*****	  	*****	
CN34.43. *****	  	*****	  	*****	  	*****	
CN34.48. *****	  	*****	  	*****	  	*****	
CN35.20. *****	  	*****	  	*****	  	*****	
CN35.31. *****	  	*****	  	*****	  	*****	
CN38.41. *****	  	*****	  	*****	  	*****	
CN46.21. *****	  	*****	  	*****	  	*****	
CN49.00. *****	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  	*****	
CN52.51. *****	  	*****	  	*****	  	*****	

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	35/53	

EXHIBIT B2 – SCN LISTS

CN55.30. *****	  	*****	  	*****	  	*****	
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.21. *****	  	*****	  	*****	  	*****	
CN57.40. *****	  	*****	  	*****	  	*****	
CN72.00. *****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	
Subject to certification, the ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be ***** USD *****.
In addition, the Seller has presented to the Buyer the ***** which mainly consists of *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ***** becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, the Seller shall *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	36/53	

EXHIBIT B2 – SCN LISTS
 
Appendix 3: A321 NEO SCN List
A321-200 STANDARD SPECIFICATION Ref. Issue 5.0
All prices are in USD at Delivery Conditions specified on each column
NB: Certain options from the currently available catalogues and contained below may not be applicable and/or certified for NEO Aircraft

EPAC TDU	  	Title	  	A321 Price per
a/c USD D.C
01/2011	  	Comments	
57-00	  	*****	  	*****	  	*****	
57-00	  	*****	  	*****	  	*****	
72-00	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.10. *****	  	*****	  	*****	  	*****	
CN02.12. *****	  	*****	  	*****	  		
CN02.40. *****	  	*****	  	*****	  		
CN02.40. *****	  	*****	  	*****	  		
CN11.00. *****	  	*****	  	*****	  		
CN11.00. *****	  	*****	  	*****	  		
CN11.00. *****	  	*****	  	*****	  		
CN11.00. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.20. *****	  	*****	  	*****	  		
CN11.21. *****	  	*****	  	*****	  		
CN11.22. *****	  	*****	  	*****	  		
CN11.22. *****	  	*****	  	*****	  		
CN11.30. *****	  	*****	  	*****	  		
CN11.30. *****	  	*****	  	*****	  	*****	
CN11.30. *****	  	*****	  	*****	  		
CN11.30. *****	  	*****	  	*****	  		
CN11.30. *****	  	*****	  	*****	  		
CN11.30. *****	  	*****	  	*****	  		
CN21.27. *****	  	*****	  	*****	  	*****	
CN21.70. *****	  	*****	  	*****	  	*****	
CN22.00. *****	  	*****	  	*****	  	*****	
CN22.70. *****	  	*****	  	*****	  	*****	
CN23.00. *****	  	*****	  	*****	  	*****	
CN23.11. *****	  	*****	  	*****	  	*****	

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	37/53	

EXHIBIT B2 – SCN LISTS

CN23.13. *****	  	*****	  	*****	  	*****	
CN23.50. *****	  	*****	  	*****	  	*****	
CN23.51. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  	*****	
CN23.71. *****	  	*****	  	*****	  		
CN23.71. *****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
CN25.20. *****	  	*****	  	*****	  		
CN25.23. *****	  	*****	  	*****	  	*****	
CN25.23. *****	  	*****	  	*****	  		
CN25.23. *****	  	*****	  	*****	  		
CN25.23. *****	  	*****	  	*****	  		
CN25.26. *****	  	*****	  	*****	  		
CN25.28. *****	  	*****	  	*****	  		
CN25.28. *****	  	*****	  	*****	  		
CN25.35. *****	  	*****	  	*****	  	*****	
CN25.35. *****	  	*****	  	*****	  		
CN25.35. *****	  	*****	  	*****	  		
CN25.45. *****	  	*****	  	*****	  		
CN25.62. *****	  	*****	  	*****	  		
CN25.65. *****	  	*****	  	*****	  	*****	
CN25.65. *****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	
CN29.10. *****	  	*****	  	*****	  	*****	
CN29.21. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  	*****	
CN31.33. *****	  	*****	  	*****	  		
CN32.40. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.41. *****	  	*****	  	*****	  	*****	
CN32.48. *****	  	*****	  	*****	  		
CN33.12. *****	  	*****	  	*****	  		
CN33.20. *****	  	*****	  	*****	  		
CN33.50. *****	  	*****	  	*****	  		
CN34.10. *****	  	*****	  	*****	  		
CN34.13. *****	  	*****	  	*****	  	*****	
CN34.41. *****	  	*****	  	*****	  		
CN34.42. *****	  	*****	  	*****	  		
CN34.42. *****	  	*****	  	*****	  		
CN34.43. *****	  	*****	  	*****	  	*****	
CN34.48. *****	  	*****	  	*****	  	*****	
CN35.20. *****	  	*****	  	*****	  	*****	
CN35.31. *****	  	*****	  	*****	  	*****	
CN38.41. *****	  	*****	  	*****	  		
CN46.21. *****	  	*****	  	*****	  		
CN49.00.105/06	  	*****	  	*****	  	*****	
CN51.22. *****	  	*****	  	*****	  		
CN51.22. *****	  	*****	  	*****	  		
CN51.22. *****	  	*****	  	*****	  		
CN52.51. *****	  	*****	  	*****	  		

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	38/53	

EXHIBIT B2 – SCN LISTS

CN55.30. *****	  	*****	  	*****	  		
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.10. *****	  	*****	  	*****	  	*****	
CN56.21. *****	  	*****	  	*****	  		
CN57.40. *****	  	*****	  	*****	  	*****	
CN72.00. *****	  	*****	  	*****	  	*****	
	  	*****
*****	  	*****	  	*****
*****	
Subject to certification, the ***** shall be selectable by the Buyer for the optional incorporation into the Specification by means of chargeable SCN. The applicable price of such SCN shall be ***** USD *****.
In addition, the Seller has presented to the Buyer the ***** which mainly consists of *****. The Buyer has shown interest for this option but acknowledges that it is not yet available by the Seller as of the effective date. However, if the ‘space flex’ option becomes available on any of the Aircraft, the Seller undertakes to promptly notify the Buyer, and within a reasonable timeframe submit a commercial proposal to the Buyer. In consideration for the execution of this Amendment, *****. It is understood that the Buyer shall reserve the right to accept or reject the offer made by the Seller by means of the formal acceptance of the then presented SCN.

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	39/53	

EXHIBIT B3 – CABIN LAYOUTS
 
Appendix 1: A319 NEO Cabin layout
*****

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	40/53	

EXHIBIT B3 – CABIN LAYOUTS
 
Appendix 2: A320 NEO Cabin layout
*****

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	41/53	

EXHIBIT B3 – CABIN LAYOUTS
 
Appendix 3: A321 NEO Cabin layout
*****

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	42/53	

EXHIBIT B4 – FORM OF MSCN
 
FORM OF MSCN

VOI A320 Family PA - AMDT 9 – Ref. D11032737 - December 2011	  	43/53	

			
 	 	
	  	For	
 
MANUFACTURER’S SPECIFICATION
CHANGE NOTICE
 
(MSCN)	  	 
MSCN Number
Issue
Dated
Page

Title:	  	 	
 	 	
Description:	  	 	

 	  	 	
Effect on weight	  	 	
 
Manufacturer’s Weight Empty Change:	  	 	
Operational Weight Empty Change:	  	 	
Allowable Payload Change	  	 	
 	 	
Remarks / References	  	 	
 	 	
Remarks / References	  	 	
 	
Specification changed by this MSCN	

 	
Price per aircraft	  	 	
 
US DOLLARS:	  	 	
 
AT DELIVERY CONDITIONS:	  	 	
 	
This change will be effective on AIRCRAFT N° and subsequent.	
 
Provided MSCN is not rejected by	  	 	
 	 	
Buyer Approval	  	Seller Approval	
 	 	
By:	  	By:	
 	 	
Date:
 	  	Date:	

			
 	 	
	  	For	
 
MANUFACTURER’S SPECIFICATION
CHANGE NOTICE
 
(MSCN)	  	 
MSCN Number
Issue
Dated
Page

Specification repercussion:	  	 	

 	  	 	

 	  	 	

 	  	 	

 	  	 	

 	

 	  	 	

 	

 	  	 	

 	 	

			
 	 	
	  	For	
 
MANUFACTURER’S SPECIFICATION
CHANGE NOTICE
 
(MSCN)	  	 
MSCN Number
Issue
Dated
Page

Scope of change (FOR INFORMATION ONLY)	  	 	

 	  	 	

 	  	 	

 	  	 	

 	  	 	

 	

 	  	 	

 	

 	  	 	

 	 	

LETTER AGREEMENT No.1 TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – NEO AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA01 – Ref. D11032737 - December 2011
- Letter Agreement N°1 -Page 1/5

LETTER AGREEMENT No.1 TO AMENDMENT No.9
 
This Letter Agreement is applicable to the NEO Aircraft only and supersedes and replaces the original Letter Agreement No.1 to the Agreement to the extent relating to the NEO Aircraft.
 
1	Airframe *****	
The Seller shall grant the *****:

USD	  	*****	  	for A319 NEO	
USD	  	*****	  	for A320 NEO	
USD	  	*****	  	for A321 NEO	
The Airframe *****.
The Airframe ***** in US Dollars quoted in *****.
 
2	*****	
The Seller shall *****:
USD        *****
The *****.
The ***** quoted in January 2011 delivery *****.
 
3	Extended *****	
The Seller shall *****:

USD	  	*****	  	for A319 NEO	
USD	  	*****	  	for A320 NEO	
USD	  	*****	  	for A321 NEO	
The Extended *****.
The Extended *****.
 
4	***** 	
The Seller shall *****:
USD        *****
The *****.
The *****.
 
A320FAM PA – VOI – AMDT 9 LA01 – Ref. D11032737 - December 2011
- Letter Agreement N°1 -Page 2/5

LETTER AGREEMENT No.1 TO AMENDMENT No.9
 
5	*****	
the Seller shall *****:

USD	  	1,138,000	  	for A319 NEO delivered with *****	
USD	  	618,100	  	for A320 NEO delivered with *****	
USD	  	608,500	  	for A321 NEO delivered with *****	
The *****.
The *****.
 
6	*****	
For any NEO Aircraft, *****:

USD	  	*****	  	for A319 NEO	
USD	  	*****	  	for A320 NEO	
USD	  	*****	  	for A321 NEO	
The *****.
The *****.
 
7	*****	
the Seller shall *****:

USD	  	*****	  	for A319 NEO	
USD	  	*****	  	for A320 NEO	
USD	  	*****	  	for A321 NEO	
The *****.
The *****.
 
8	*****	
*****
USD        *****
The *****.
 
9	*****	
The Seller shall *****:
USD        *****
The *****.
 
A320FAM PA – VOI – AMDT 9 LA01 – Ref. D11032737 - December 2011
- Letter Agreement N°1 -Page 3/5

LETTER AGREEMENT No.1 TO AMENDMENT No.9
 
11	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
12	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
13	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
14	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
15	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA01 – Ref. D11032737 - December 2011
- Letter Agreement N°1 -Page 4/5

LETTER AGREEMENT No.1 TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA01 – Ref. D11032737 - December 2011
- Letter Agreement N°1 -Page 5/5

LETTER AGREEMENT No.3 TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – NEO AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA03 – Ref. D11032737 - December 2011
- Letter Agreement N°3 -Page 1/4

LETTER AGREEMENT No.3 TO AMENDMENT No.9
 
This Letter Agreement No.3 is applicable to the NEO Aircraft only and supersedes and replaces the original Letter Agreement No.3 to the Agreement to the extent relating to the NEO Aircraft.
 
1	NEO *****	
The Buyer shall have the *****.
*****
Following the *****.
The *****set forth in Clause 1.2 of Letter Agreement No.7 to Amendment No.9 shall be amended whereby the *****.
The Predelivery Payments *****.
 
2	NEO Delivery *****	
2.1 Scope
The NEO Aircraft delivery schedule set forth in Clause 4 of Amendment No.9 is based on the Seller’s current production and certification projections prevailing at time of execution of Amendment No.9 by both parties for the New Engine Option industrialization and *****:
*****
 
2.2	*****	
 
2.2.1	In accordance with the provisions of clause 2.1 above, the Seller shall be entitled, subject to Clause 2.2.2 below, *****.	
 
2.2.2	Any exercise by the Seller *****.	
Notwithstanding the foregoing and any other rights of the Seller under the Agreement as amended, *****.
 
2.2.3	The Buyer and the Seller shall execute an amendment to the Agreement recording the effect of the *****.	
*****
 
3	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
A320FAM PA – VOI – AMDT 9 LA03 – Ref. D11032737 - December 2011
- Letter Agreement N°3 -Page 2/4

LETTER AGREEMENT No.3 TO AMENDMENT No.9
 
2	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
3	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
4	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
5	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA03 – Ref. D11032737 - December 2011
- Letter Agreement N°3 -Page 3/4

LETTER AGREEMENT No.3 TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA03 – Ref. D11032737 - December 2011
- Letter Agreement N°3 -Page 4/4

LETTER AGREEMENT No.4 TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : ***** – NEO AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA04 – Ref. D11032737 - December 2011
- Letter Agreement N°4 - Page 1/4

LETTER AGREEMENT No.4 TO AMENDMENT No.9
 
This Letter Agreement No.4 is applicable to the NEO Aircraft only and supersedes and replaces the original Letter Agreement No.4 to the Agreement to the extent relating to the NEO Aircraft.
 
1	NEO *****	
The Buyer shall have the right to *****:
(a) ***** of the NEO Aircraft having their *****
(b) any of the NEO Aircraft having their *****
(the “ NEO *****”).
The NEO *****.
*****
*****
*****
*****
 
A320FAM PA – VOI – AMDT 9 LA04 – Ref. D11032737 - December 2011
- Letter Agreement N°4 - Page 2/4

LETTER AGREEMENT No.4 TO AMENDMENT No.9
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA04 – Ref. D11032737 - December 2011
- Letter Agreement N°4 - Page 3/4

LETTER AGREEMENT No.4 TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA04 – Ref. D11032737 - December 2011
- Letter Agreement N°4 - Page 4/4

LETTER AGREEMENT No.5A TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A319NEO PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05A – Ref. D11032737 - December 2011
- Letter Agreement N°5A – A319 NEO CFM -Page 1/4

LETTER AGREEMENT No.5A TO AMENDMENT No.9
 
This Letter Agreement No. 5A is applicable to the NEO Aircraft only and cancels and replaces the original Letter Agreement No.5A to the Agreement to the extent relating to the NEO Aircraft.
 
1	In consideration of the development status of the NEO Aircraft at time of execution of Amendment No.9, the Seller shall provide the Buyer with performance guarantees for the A319 NEO until *****.	
 
A320FAM PA – VOI – AMDT 9 LA05A – Ref. D11032737 - December 2011
- Letter Agreement N°5A – A319 NEO CFM -Page 2/4

LETTER AGREEMENT No.5A TO AMENDMENT No.9
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives.
 
A320FAM PA – VOI – AMDT 9 LA05A – Ref. D11032737 - December 2011
- Letter Agreement N°5A – A319 NEO CFM -Page 3/4

LETTER AGREEMENT No.5A TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05A – Ref. D11032737 - December 2011
- Letter Agreement N°5A – A319 NEO CFM -Page 4/4

LETTER AGREEMENT No.5B TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A319NEO PERFORMANCES GUARANTEES (PW engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 1/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
This Letter Agreement No. 5B is applicable to the NEO Aircraft only and cancels and replaces the original Letter Agreement No.5A to the Agreement to the extent relating to the NEO Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A319NEO Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	New Engine Option (NEO) aircraft configuration including Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of Pratt and Whitney PW 1124G engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) *****.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of ***** of time are included for approach and land at the destination airport.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 2/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2 	*****	
 
2.2.2.1	The Aircraft will be capable to carry ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
 
*****		
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be *****.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
 
*****		
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A319NEO powered by PW 1124G engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a ***** EPNdB.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 3/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** provide the best results will be assumed.	
 
5.3	When establishing *****.	
 
5.4	***** in Section 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using *****.	
 
5.6	Where applicable, *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A319NEO aircraft of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 4/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above the *****.	
 
9.3	The Seller’s *****.	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 5/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 6/7

LETTER AGREEMENT No.5B TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05B – Ref. D11032737 - December 2011
- Letter Agreement N°5B – A319 NEO PW -Page 7/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A320NEO PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 1/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
This Letter Agreement No.5C is applicable to the NEO Aircraft only and cancels and replaces the original Letter Agreement No.5B to the Agreement to the extent relating to the NEO Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A320NEO Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	New Engine Option (NEO) aircraft configuration including Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight to *****
 
 	iii)	installation of CFM International CFM LEAP-X1A26 engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) ***** the Aircraft shall *****.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	*****the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of *****.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 2/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** airport are conducted in *****. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be *****
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A320NEO powered by CFM LEAP-X1A26 engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a *****.
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 3/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** provide the best results will be assumed.	
 
5.3	When establishing *****.	
 
5.4	***** as defined in Section 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using *****.	
 
5.6	Where applicable, *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A320NEO aircraft of the same aerodynamic configuration as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to	
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 4/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will use *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****.	
 
9.3	The Seller’s *****.	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 5/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives.
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 6/7

LETTER AGREEMENT No.5C TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05C – Ref. D11032737 - December 2011
- Letter Agreement N°5C – A320 NEO CFM -Page 7/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A320NEO PERFORMANCES GUARANTEES (PW engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 1/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
This Letter Agreement No.5D is applicable to the NEO Aircraft only and cancels and replaces the original Letter Agreement No.5B to the Agreement to the extent relating to the NEO Aircraft.
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A320NEO Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	New Engine Option (NEO) aircraft configuration including Sharklets	
 
 	ii)	increase of the design weights as follows:	
Maximum Take-off Weight to *****
Maximum Landing Weight to *****
Maximum Zero Fuel Weight *****
 
 	iii)	installation of Pratt and Whitney PW 1127G engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2	*****	
 
2.2.1	*****	
 
2.2.1.1	When carrying a fixed payload of ***** (representing ***** at ***** each) ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in ***** conditions. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of *****.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 2/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2	Mission Payload *****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be *****.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A320NEO powered by PW 1127G engines for ***** kg shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a ***** EPNdB.
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 3/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing *****.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.	
 
5.6	Where applicable, *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A320NEO aircraft of the same ***** purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 4/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING REMEDIES	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available corrective means mentioned above *****.	
 
9.3	The Seller’s ***** Aircraft *****.	
 
10	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 5/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
11	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
12	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
13	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
14	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 6/7

LETTER AGREEMENT No.5D TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05D – Ref. D11032737 - December 2011
- Letter Agreement N°5D – A320 NEO PW -Page 7/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A321NEO PERFORMANCES GUARANTEES (CFM engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 1/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
This Letter Agreement No.5E is applicable to the NEO Aircraft only:
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A321NEO Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	New Engine Option (NEO) aircraft configuration including Sharklets	
 
 	ii)	increase of the design weights as follows:	
 
 	    	Maximum Take-off Weight to *****	
 	    	Maximum Landing Weight to *****	
 	    	Maximum Zero Fuel Weight to *****	
 
 	iii)	installation of CFM International CFM LEAP-X1A32 engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2 	*****	
 
2.2.1 	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) ***** the Aircraft shall ***** when operated under the conditions defined below.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of *****.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 2/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2 	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be *****.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A321NEO powered by CFM LEAP-X1A32 engines for ***** shall be certified in accordance with the requirements of ***** of ICAO Annex 16, Volume I, with a ***** EPNdB.
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 3/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of ***** in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing *****.	
 
5.4	***** as defined in Section 21-30.31 of the Specification. *****.	
 
5.5	The engines will be operated *****.	
 
5.6	Where applicable, *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A321NEO aircraft of the same ***** as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****.	
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 4/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****.	
 
9.3	The Seller’s *****.	
 
10. 	*****	
In consideration of the development status of the NEO Aircraft type at time of execution of the Amendment No.9, the Seller shall provide to the Buyer *****.
 
11	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
12	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 5/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
13	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
14	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
15	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives.
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 6/7

LETTER AGREEMENT No.5E TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 	Agreed and accepted	
			
For and on behalf of	 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 	AIRBUS S.A.S.	

/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5E – A320 NEO PW -Page 7/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : A321NEO PERFORMANCES GUARANTEES (PW engines)
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the NEO Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA05E – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 1/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
This Letter Agreement No.5F is applicable to the NEO Aircraft only:
 
1	AIRCRAFT CONFIGURATION	
The guarantees defined below (“the Guarantees”) are applicable to the A321NEO Aircraft as described in the Standard Specification Ref. ***** and amended by Specification Change Notices (SCN) for:
 
 	i)	New Engine Option (NEO) aircraft configuration including Sharklets	
 
 	ii)	increase of the design weights as follows:	
 
 	    	Maximum Take-off Weight to *****	
 	    	Maximum Landing Weight to *****	
 	    	Maximum Zero Fuel Weight to *****	
 
 	iii)	installation of Pratt and Whitney PW 1133G engines	
hereinafter referred to as “the Specification”, and without taking into account any further changes thereto as provided in the Agreement.
 
2	GUARANTEED PERFORMANCE	
 
2.1	Take-off	
Under the following airport conditions (assumed representative of ***** runway *****):
*****
the FAR certified take-off weight shall be not less than *****.
 
2.2	*****	
 
2.2.1	*****	
 
2.2.1.1	When carrying a ***** (representing ***** at ***** each) *****.	
 
2.2.1.2	The departure and destination airport conditions are such as to allow the required takeoff weight and landing weight to be used without restriction. Pressure altitude at departure and destination airport is *****.	
 
2.2.1.3	Allowances of *****.	
 
2.2.1.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
 
2.2.1.5	Allowances of *****.	
 
2.2.1.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.1.4 above.	
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 2/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.1.3, 2.2.1.4 and 2.2.1.5 above.
 
2.2.1.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.2	*****	
 
2.2.2.1	The Aircraft will be capable to carry a ***** when operated under the conditions defined below.	
 
2.2.2.2	The departure airport conditions (assumed representative of ***** runway *****) are as follows:	
*****
The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude at destination airport is *****.
 
2.2.2.3	Allowances of *****.	
 
2.2.2.4	***** the destination airport are conducted in *****. Climb and descent speeds below *****.	
The ***** these climb, cruise and descent phases shall be *****.
 
2.2.2.5	Allowances of *****.	
 
2.2.2.6	Stage distance is defined as the distance covered during climb, cruise and descent as described in sub-paragraph 2.2.2.4 above.	
Trip fuel and is defined as the fuel used during take-off and initial climb, climb, cruise, descent and approach and landing as described in sub-paragraphs 2.2.2.3, 2.2.2.4 and 2.2.2.5 above.
 
2.2.2.7	At the end of approach and land ***** of fuel will remain in the tanks. This represents the estimated fuel required for:	
*****
 
2.2.3	*****	
 
3	EXTERIOR NOISE CERTIFICATION	
The A321NEO powered by PW 1133G engines for ***** shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, with a ***** EPNdB.
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 3/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.
 
4	MANUFACTURER’S *****	
The Seller guarantees that the Manufacturer’s ***** as described in the Specification defined in Paragraph 1 above and which will be ***** according to Section 13-10.00.00 of the Standard Specification and subject to adjustments as defined in paragraph 7.2 below, shall not be more than a guaranteed value of *****.
 
5	GUARANTEE CONDITIONS	
 
5.1	The certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.	
 
5.2	For the determination of take-off and landing performance a hard level dry runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted and the use of center of gravity position, speedbrakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.	
 
5.3	When establishing take-off and second segment performance, no air will be bled from the engines for cabin air conditioning or for anti-icing except if otherwise noted.	
 
5.4	***** 21-30.31 of the Specification. *****	
 
5.5	The engines will be operated using *****.	
 
5.6	Where applicable, *****.	
 
6	GUARANTEE COMPLIANCE	
 
6.1	Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.	
 
6.2	Compliance with the take-off element of the Guarantees will be demonstrated with reference to the approved Flight Manual.	
 
6.3	Compliance with those parts of the Guarantees ***** (or more, at the Seller’s discretion) A321NEO aircraft of the same ***** as those Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.	
 
6.4	Compliance with the Manufacturer’s ***** shall be demonstrated with reference to a Weight Compliance Report.	
 
6.5	*****	
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 4/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
6.6	The approved aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.	
 
6.7	The Seller undertakes to furnish the Buyer with a report or reports *****.	
 
7	ADJUSTMENT OF GUARANTEES	
 
7.1	In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.	
 
7.2	The Guarantees apply to the Aircraft as described in paragraph 1 above and may be adjusted in the event of :	
 
 	a)	Any further configuration change which is the subject of a SCN	
 
 	b)	Changes required to obtain certification which cause changes to the performance or weight of the Aircraft.	
 
8	EXCLUSIVE GUARANTEES	
*****
 
9	UNDERTAKING *****	
Should the Aircraft fail to meet any of the Guarantees the Seller will *****.
 
9.1	Should the Seller *****:	
 
9.1.1	*****	
 
9.1.2	*****	
 
9.1.3	*****	
 
9.2	In the event the Seller develops and makes available ***** mentioned above *****.	
 
9.3	The Seller’s *****.	
 
10.	*****	
In consideration of the development status of the NEO Aircraft type at time of execution of the Amendment No.9, the Seller shall provide to the Buyer *****.
 
11	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 5/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
12	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
13	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
14	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
15	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 6/7

LETTER AGREEMENT No.5F TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA05F – Ref. D11032737 - December 2011
- Letter Agreement N°5F – A321 NEO PW -Page 7/7

LETTER AGREEMENT No.7 TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : PRICE REVISION ***** – NEO AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA07 – Ref. D11032737 - December 2011
- Letter Agreement N o 7 -Page 1/4

LETTER AGREEMENT No.7 TO AMENDMENT No.9
 
This Letter Agreement No.7 is applicable to the NEO Aircraft only and supersedes and replaces the original Letter Agreement No.1 to the Agreement to the extent relating to the NEO Aircraft.
 
1	*****	
 
1.1	*****	
*****
*****
 
1.2	*****	
*****
*****
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA07 – Ref. D11032737 - December 2011
- Letter Agreement N°7 -Page 2/4

LETTER AGREEMENT No.7 TO AMENDMENT No.9
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA07 – Ref. D11032737 - December 2011
- Letter Agreement N°7 -Page 3/4

LETTER AGREEMENT No.7 TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA07 – Ref. D11032737 - December 2011
- Letter Agreement N°7 -Page 4/4

LETTER AGREEMENT No.9 TO AMENDMENT No.9
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490,
Primer Piso, Colonia Santa Fe Peña Blanca,
Código Postal 01210, Delegación Álvaro Obregón,
Mexico, D.F
SUBJECT : PDPs – NEO AIRCRAFT
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V. (the “Buyer”) and the Seller S.A.S. (the “Seller”) have entered into a purchase agreement dated 28 th  October 2005 (the “Purchase Agreement”) as amended from time to time and into an amendment no.9 (the “Amendment No.9”) dated as of even date herewith, which amendment covers the manufacture and the sale by the Seller and the purchase by the Buyer of the 2011 Incremental Aircraft as described in the Amendment No.9. The Purchase Agreement as amended together with the Amendment No.9 shall be referred to as the “Agreement”.
Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and/or Amendment No.9.
Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement as amended by Amendment No.9 and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.
 
A320FAM PA – VOI – AMDT 9 LA09 – Ref. D11032737 - December 2011
- Letter Agreement N o 9 -Page 1/5

LETTER AGREEMENT No.9 TO AMENDMENT No.9
 
This Letter Agreement No.9 is applicable to the NEO Aircraft only.
 
1	Predelivery Payment Schedule	
 
1.1	*****	
In respect of the NEO Aircraft, Clause 5.2 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
 
 	5.2	*****	
*****
UNQUOTE
 
1.2	Predelivery Payment Reference Price	
In respect of the NEO Aircraft, Clause 5.3.1 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
5.3.1
The Buyer shall pay Predelivery Payments to the Seller calculated on the predelivery payment reference price of each NEO Aircraft. The predelivery payment reference price is determined by the following formula:
 
 	    	*****	
 
 	    	*****	
 
 	    	*****	
UNQUOTE
 
A320FAM PA – VOI – AMDT 9 LA09 – Ref. D11032737 - December 2011
- Letter Agreement N°9 -Page 2/5

LETTER AGREEMENT No.9 TO AMENDMENT No.9
 
1.3	Predelivery Payment Schedule	
In respect of the NEO Aircraft, Clause 5.3.2 of the Agreement shall be deleted in its entirety and replaced by the following:
QUOTE
Predelivery Payments for the NEO Aircraft shall be made in accordance with the following schedule:

DUE DATE OF PAYMENTS	  	USD AMOUNT OR
PERCENTAGE OF
PREDELIVERY PAYMENT
REFERENCE PRICE	 	
		
*****	  	USD	 	***** 	
		
*****	  	USD	 	***** 	
		
*****	  	USD	 	***** 	
		
*****	  	USD	 	***** 	
		
*****	  	USD	 	***** 	
		
*****	  				
		
*****	  	 	    	***** 	
*****	  	 	    	***** 	
*****	  	 	    	***** 	
*****	  	 	    	***** 	
	  	 	    	***** 	
 
Total Payment prior to Delivery
UNQUOTE
 
2	Assignment	
Notwithstanding any other provision of this Letter Agreement and save for the provisions set forth in Clause 21 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this Clause shall be void and of no force or effect.
 
3	Confidentiality	
This Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement.
 
A320FAM PA – VOI – AMDT 9 LA09 – Ref. D11032737 - December 2011
- Letter Agreement N°9 -Page 3/5

LETTER AGREEMENT No.9 TO AMENDMENT No.9
 
4	Law and Jurisdiction	
This Letter Agreement shall be governed by and construed in accordance with the laws of France. Any dispute arising out of or in connection with this Letter Agreement shall be within the exclusive jurisdiction of the Tribunal de Commerce of Paris.
 
5	Severability	
In the event that any provision of this Letter Agreement should for any reason be held ineffective, the remainder of this Letter Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Letter Agreement prohibited or unenforceable in any respect. Any provisions of this Letter Agreement which may prove to be or become, illegal, invalid or unenforceable in whole or in part, shall as far as reasonably possible, and subject to applicable law, be preformed in accordance with the spirit and purpose of this Letter Agreement.
 
6	Alterations to Contract	
This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever oral or written in respect thereto. This Letter Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorised representatives. In the event of conflict between any provisions of the Agreement and the provisions of this Letter Agreement, the provisions of this Letter Agreement shall prevail.
 
A320FAM PA – VOI – AMDT 9 LA09 – Ref. D11032737 - December 2011
- Letter Agreement N°9 -Page 4/5

LETTER AGREEMENT No.9 TO AMENDMENT No.9
 
If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and accepted	 		 		 	Agreed and accepted	
				
For and on behalf of	 		 		 	For and on behalf of	
CONTROLADORA VUELA COMPAŇĺA DE AVIACIÓN, S.A.P.I. de C.V.	 		 		 	AIRBUS S.A.S.	
			
/s/ Alfonso Ascencio Triujeque	 		 	/s/ Christophe Mourey	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Christophe Mourey	
Its:	 	Directer Jurldico General Counsel	 		 	Its:	 	Senior Vice President Contracts	
				
/s/ Mario E. Geyne	 		 		 		
Name:	 	Mario E. Geyne	 		 		 		
Its:	 	Financial and Fleet Planning Director	 		 		 		
 
A320FAM PA – VOI – AMDT 9 LA09 – Ref. D11032737 - December 2011
- Letter Agreement N°9 -Page 5/5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.11

 
AIRCRAFT LEASE AGREEMENT
Dated as of March 9, 2007
BETWEEN
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
as LESSEE
and
INTERNATIONAL LEASE FINANCE CORPORATION
as LESSOR

 

	 	Aircraft Make and Model:	 	New Airbus A319-100	 		
				
	 	Aircraft Manufacturer’s Serial Number:	 	Per Estoppel and Acceptance Certificate	 		
				
	 	Make and Model of Engines:	 	IAE V2524-A5	 		
				
	 	Serial Numbers of Engines:	 	Per Estoppel and Acceptance Certificate	 		
NEW AIRCRAFT NO. 1

TABLE OF CONTENTS

ARTICLE 1	 	SUMMARY OF TRANSACTION	  	  2	
	 	  1.1	 	Description of Aircraft	  	  2	
	 	  1.2	 	Scheduled Delivery Date and Location	  	  2	
	 	  1.3	 	Initial Lease Term	  	  2	
	 	  1.4	 	Extension Lease Option	  	  2	
	 	  1.5	 	Security Deposit	  	  2	
	 	  1.6	 	Transaction Fee	  	  3	
	 	  1.7	 	Rent During Lease Term	  	  3	
	 	  1.8	 	Reserves	  	  4	
	 	  1.9	 	Additional Rent for Excess Airframe and Engine Cycles	  	  4	
	 	  1.10	 	Country of Airframe Registration	  	  4	
	 	  1.11	 	Agreed Value of Aircraft	  	  5	
	 	  1.12	 	LESSOR’s Bank Account	  	  5	
			
ARTICLE 2	 	DEFINITIONS	  	  6	
	 	  2.1	 	General Definitions	  	  6	
	 	  2.2	 	Specific Definitions	  	12	
			
ARTICLE 3	 	PLACE AND DATE OF DELIVERY	  	13	
	 	  3.1	 	Place and Delivery	  	13	
	 	  3.2	 	Scheduled Delivery Date	  	13	
	 	  3.3	 	Delivery subject to Manufacturer Delivery	  	13	
	 	  3.4	 	No LESSOR Liability	  	13	
	 	  3.5	 	Total Loss of Aircraft prior to Delivery	  	13	
	 	  3.6	 	Cancellation for Delay	  	13	
			
ARTICLE 4	 	LEASE TERM AND EXTENSION OPTION	  	14	
	 	  4.1	 	Initial Lease Term	  	14	
	 	  4.2	 	Lease Extension Option	  	14	
	 	  4.3	 	“Lease Term” and “Expiration Date”	  	14	
	 	  4.4	 	“Termination Date”	  	14	
			
ARTICLE 5	 	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	  	15	
	 	  5.1	 	Security Deposit	  	15	
	 	  5.2	 	Transaction Fee	  	16	

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	 	  5.3	 	Rent	  	16	
	 	  5.4	 	Reserves	  	17	
	 	  5.5	 	Additional Rent for Excess Cycles	  	18	
	 	  5.6	 	LESSOR’s Bank Account	  	18	
	 	  5.7	 	Default Interest	  	19	
	 	  5.8	 	No Deductions or Withholdings	  	19	
	 	  5.9	 	Value Added Taxes	  	20	
	 	  5.10	 	Wire Transfer Disbursement Report	  	20	
	 	  5.11	 	Net Lease	  	20	
	 	  5.12	 	Currency Indemnity	  	21	
	 	  5.13	 	LESSOR Performance of LESSEE Obligation	  	21	
	 	  5.14	 	Consideration for Rent and other Accounts	  	21	
			
ARTICLE 6	 	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	  	22	
	 	  6.1	 	LESSEE Selection of Aircraft	  	22	
	 	  6.2	 	Participation Agreement	  	22	
	 	  6.3	 	Procurement of BFE	  	22	
	 	  6.4	 	Assignment of Training	  	22	
	 	  6.5	 	LESSEE Inspection of Aircraft	  	22	
	 	  6.6	 	Aircraft at Delivery	  	22	
	 	  6.7	 	Delivery of the Aircraft to LESSEE	  	23	
	 	  6.8	 	LESSEE Acceptance of Aircraft	  	23	
			
ARTICLE 7	 	PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	  	24	
	 	  7.1	 	Pre-Delivery Requirements	  	24	
	 	  7.2	 	Delivery Requirements	  	25	
	 	  7.3	 	Post-Delivery Requirements	  	26	
			
ARTICLE 8	 	DISCLAIMERS AND WAIVERS	  	28	
	 	  8.1	 	“As Is, Where Is”	  	28	
	 	  8.2	 	Waiver of Warranty of Description	  	28	
	 	  8.3	 	LESSEE Waiver	  	29	
	 	  8.4	 	Conclusive Proof	  	29	
	 	  8.5	 	No Liability to Repair or Replace	  	29	
	 	  8.6	 	No Waiver	  	30	
	 	  8.7	 	Consideration for Waivers	  	30	
			
ARTICLE 9	 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	  	31	
	 	  9.1	 	Warranties	  	31	

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TABLE OF CONTENTS

	 	  9.2	 	Reassignment	  	31	
	 	  9.3	 	Warranty Claims	  	31	
			
ARTICLE 10	 	OPERATION OF AIRCRAFT	  	32	
	 	10.1	 	Cost of Operation	  	32	
	 	10.2	 	Compliance with Laws	  	32	
	 	10.3	 	Training	  	32	
	 	10.4	 	No Violation of Insurance Policies	  	32	
	 	10.5	 	Flight and Airport Charges	  	32	
			
ARTICLE 11	 	SUBLEASES	  	34	
	 	11.1	 	No Sublease without LESSOR Consent	  	34	
	 	11.2	 	LESSOR Costs	  	34	
	 	11.3	 	Permitted Sublessees	  	34	
	 	11.4	 	Any Approved Sublease	  	34	
	 	11.5	 	Assignment of Sublease	  	35	
	 	11.6	 	Application of Cape Town Convention	  	35	
	 	11.7	 	Wet Leases	  	35	
	 	11.8	 	Continued Responsibility of LESSEE	  	35	
			
ARTICLE 12	 	MAINTENANCE OF AIRCRAFT	  	36	
	 	12.1	 	General Obligation	  	36	
	 	12.2	 	Specific Engine Requirements	  	36	
	 	12.3	 	Specific Obligations	  	38	
	 	12.4	 	Replacement of Parts	  	39	
	 	12.5	 	Removal of Engines	  	40	
	 	12.6	 	Removal of APU	  	40	
	 	12.7	 	Pooling of Engines, APU and Parts	  	41	
	 	12.8	 	Installation of Engines on other Aircraft	  	41	
	 	12.9	 	Modifications	  	42	
	 	12.10	 	Performance of Work by Third Parties	  	43	
	 	12.11	 	Reporting Requirements	  	43	
	 	12.12	 	Maintenance Policies and Procedures Manuals	  	43	
	 	12.13	 	LESSOR Inspection Rights	  	44	
			
ARTICLE 13	 	USE OF RESERVES	  	45	
	 	13.1	 	Airframe Reserves (6 Year Check)	  	45	
	 	13.2	 	Airframe Reserves (12 Year Check)	  	45	
	 	13.3	 	Engine Performance Restoration Reserves	  	45	
	 	13.4	 	Engine LLP Reserves	  	45	

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TABLE OF CONTENTS

	 	13.5	 	Landing Gear Reserves	  	46	
	 	13.6	 	APU Reserves	  	46	
	 	13.7	 	Reimbursement	  	46	
	 	13.8	 	Reimbursement Adjustment	  	47	
	 	13.9	 	Costs in Excess of Reserves	  	48	
	 	13.10	 	Reimbursement after Termination Date	  	48	
	 	13.11	 	Total Loss	  	48	
			
ARTICLE 14	 	TITLE AND REGISTRATION	  	49	
	 	14.1	 	Title to the Aircraft	  	49	
	 	14.2	 	Registration of Aircraft	  	49	
	 	14.3	 	Cape Town Convention	  	49	
	 	14.4	 	Filing of this Lease	  	50	
			
ARTICLE 15	 	IDENTIFICATION PLATES	  	51	
	 	15.1	 	Airframe Identification Plates	  	51	
	 	15.2	 	Engine Identification Plates	  	51	
			
ARTICLE 16	 	TAXES	  	52	
	 	16.1	 	General Obligation of LESSEE	  	52	
	 	16.2	 	Exceptions to Indemnity	  	52	
	 	16.3	 	After-Tax Basis	  	54	
	 	16.4	 	Timing of Payment	  	54	
	 	16.5	 	Contests	  	54	
	 	16.6	 	Refunds	  	54	
	 	16.7	 	Cooperation in Filing Tax Returns	  	54	
	 	16.8	 	Survival of Obligations	  	54	
			
ARTICLE 17	 	INDEMNITIES	  	55	
	 	17.1	 	General Indemnity	  	55	
	 	17.2	 	Exceptions to General Indemnities	  	56	
	 	17.3	 	After-Tax Basis	  	57	
	 	17.4	 	Timing of Payment	  	57	
	 	17.5	 	Subrogation	  	57	
	 	17.6	 	Notice	  	57	
	 	17.7	 	Refunds	  	57	
	 	17.8	 	Defense of Claims	  	57	
	 	17.9	 	No Double Recovery	  	57	
	 	17.10	 	Survival of Obligation	  	57	
			
ARTICLE 18	 	INSURANCE	  	58	
	 	18.1	 	Categories of Insurance	  	58	
	 	18.2	 	Write-back of any Date Recognition Exclusion	  	58	

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TABLE OF CONTENTS

	 	18.3	 	Write-backs of LSW555.D and AVN48C Exclusions	  	58	
	 	18.4	 	Installation of Third Party Engine	  	58	
	 	18.5	 	LESSOR Coverage for LESSEE’s Employees	  	58	
	 	18.6	 	Insurance for Indemnities	  	59	
	 	18.7	 	Insurance required by Manufacturer	  	59	
	 	18.8	 	Renewal	  	59	
	 	18.9	 	Assignment of Rights by LESSOR	  	59	
	 	18.10	 	Insurance for Wet Lease Operations	  	59	
	 	18.11	 	Other Insurance	  	59	
	 	18.12	 	Information	  	60	
	 	18.13	 	Currency	  	60	
	 	18.14	 	Grounding of Aircraft	  	60	
	 	18.15	 	Failure to Insure	  	60	
	 	18.16	 	Reinsurance	  	60	
	 	18.17	 	Limit on Hull in favor of LESSEE	  	61	
			
ARTICLE 19	 	LOSS, DAMAGE AND REQUISITION	  	62	
	 	19.1	 	Definitions	  	62	
	 	19.2	 	Notice of Total Loss	  	63	
	 	19.3	 	Total Loss of Aircraft or Airframe	  	63	
	 	19.4	 	Surviving Engine(s)	  	64	
	 	19.5	 	Total Loss of Engine and not Airframe	  	64	
	 	19.6	 	Total Loss of APU	  	65	
	 	19.7	 	Other Loss or Damage	  	66	
	 	19.8	 	Copy of Insurance Policy	  	67	
	 	19.9	 	Government Requisition	  	67	
			
ARTICLE 20	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	  	68	
	 	20.1	 	Representations and Warranties	  	68	
	 	20.2	 	Covenants	  	70	
			
ARTICLE 21	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	  	73	
	 	21.1	 	Representations and Warranties	  	73	
	 	21.2	 	Covenant of Quiet Enjoyment	  	73	

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TABLE OF CONTENTS

ARTICLE 22	 	FINANCIAL AND OTHER INFORMATION	  	75	
			
ARTICLE 23	 	RETURN OF AIRCRAFT	  	76	
	 	23.1	 	Date of Return	  	76	
	 	23.2	 	Last Engine Shop Visits	  	76	
	 	23.3	 	Technical Report	  	76	
	 	23.4	 	Return Location	  	76	
	 	23.5	 	Full Aircraft Documentation Review	  	77	
	 	23.6	 	Maintenance Policies and Procedures Manuals	  	77	
	 	23.7	 	Aircraft Inspection	  	77	
	 	23.8	 	Certificate of Airworthiness Matters	  	78	
	 	23.9	 	General Condition of Aircraft at Return	  	79	
	 	23.10	 	Checks Prior to Return	  	82	
	 	23.11	 	Part Lives	  	84	
	 	23.12	 	Export and Deregistration of Aircraft	  	86	
	 	23.13	 	Delay in Return of Aircraft Due to LESSOR Work Requests	  	87	
	 	23.14	 	LESSEE’s Continuing Obligations	  	87	
	 	23.15	 	Airport and Navigation Charges	  	88	
	 	23.16	 	Return Acceptance Receipt	  	88	
	 	23.17	 	Indemnities and Insurance	  	88	
	 	23.18	 	Storage	  	88	
			
ARTICLE 24	 	ASSIGNMENT	  	89	
	 	24.1	 	No Assignment by LESSEE	  	89	
	 	24.2	 	Sale or Assignment by LESSOR	  	89	
	 	24.3	 	LESSOR’s Lender	  	90	
	 	24.4	 	LESSEE Cooperation	  	90	
	 	24.5	 	Advance Consent Under Cape Town Convention	  	90	
	 	24.6	 	Protections	  	90	
			
ARTICLE 25	 	DEFAULT OF LESSEE	  	92	
	 	25.1	 	LESSEE Notice to LESSOR	  	92	
	 	25.2	 	Events of Default	  	92	
	 	25.3	 	LESSOR’s General Rights	  	94	
	 	25.4	 	Deregistration and Export of Aircraft	  	95	
	 	25.5	 	Cape Town Convention Remedies	  	95	
	 	25.6	 	LESSEE Liability for Damages	  	96	
	 	25.7	 	Waiver of Default	  	97	
	 	25.8	 	Present Value of Payments	  	97	
	 	25.9	 	Use of “Termination Date”	  	97	

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TABLE OF CONTENTS

ARTICLE 26	 	NOTICES	  	 	98	  	
	 	26.1	 	Manner of Sending Notices	  	 	98	  	
	 	26.2	 	Notice Information	  	 	98	  	
			
ARTICLE 27	 	ARBITRATION	  	 	99	  	
	 	27.1	 	Arbitration of Any Dispute	  	 	99	  	
	 	27.2	 	Notice of Arbitration	  	 	99	  	
	 	27.3	 	Rules for Arbitration	  	 	99	  	
	 	27.4	 	Number of Arbitrators	  	 	99	  	
	 	27.5	 	Appointment of Arbitrator by Each Party	  	 	99	  	
	 	27.6	 	Appointment of Lead Arbitrator	  	 	99	  	
	 	27.7	 	Location of Arbitration	  	 	99	  	
	 	27.8	 	Language of Arbitration	  	 	99	  	
	 	27.9	 	Interim Measures of Protection	  	 	99	  	
	 	27.10	 	Substantive Law	  	 	100	  	
	 	27.11	 	Decision	  	 	100	  	
	 	27.12	 	Prevailing Party in Dispute	  	 	100	  	
	 	27.13	 	Waiver	  	 	100	  	
			
ARTICLE 28	 	GOVERNING LAW AND JURISDICTION	  	 	101	  	
	 	28.1	 	California Law	  	 	101	  	
	 	28.2	 	Non-Exclusive Jurisdiction in California	  	 	101	  	
	 	28.3	 	Protection of Interest in the Aircraft	  	 	101	  	
	 	28.4	 	LESSOR Actions in Certain Jurisdictions	  	 	101	  	
	 	28.5	 	Personal Jurisdiction	  	 	101	  	
	 	28.6	 	Service of Process	  	 	101	  	
	 	28.7	 	Prevailing Party in Dispute	  	 	102	  	
	 	28.8	 	Future Amendments or Agreements	  	 	102	  	
	 	28.9	 	Waiver	  	 	102	  	
			
ARTICLE 29	 	MISCELLANEOUS	  	 	103	  	
	 	29.1	 	Press Releases	  	 	103	  	
	 	29.2	 	Power of Attorney	  	 	103	  	
	 	29.3	 	LESSOR Performance for LESSEE	  	 	103	  	
	 	29.4	 	LESSOR’s Payment Obligations	  	 	103	  	
	 	29.5	 	Application of Payments	  	 	103	  	
	 	29.6	 	Usury Laws	  	 	103	  	
	 	29.7	 	Delegation by LESSOR	  	 	104	  	
	 	29.8	 	Confidentiality	  	 	104	  	

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	 	29.9	 	Rights of Parties	  	 	104	  	
	 	29.10	 	Further Assurances	  	 	104	  	
	 	29.11	 	Translation of Lease	  	 	105	  	
	 	29.12	 	Use of Word “including”	  	 	105	  	
	 	29.13	 	Headings	  	 	105	  	
	 	29.14	 	Invalidity of any Provision	  	 	105	  	
	 	29.15	 	Negotiation	  	 	105	  	
	 	29.16	 	Time is of the Essence	  	 	105	  	
	 	29.17	 	Amendments in Writing	  	 	105	  	
	 	29.18	 	Consents Not to be Delayed	  	 	105	  	
	 	29.19	 	Counterparts	  	 	105	  	
	 	29.20	 	Delivery of Documents by Fax or E-mail	  	 	105	  	
	 	29.21	 	Entire Agreement	  	 	105	  	
			
EXHIBIT A	 	AIRCRAFT DESCRIPTION	  	 	107	  	
			
EXHIBIT B	 	PARTICIPATION AGREEMENT	  	 	109	  	
			
EXHIBIT C	 	CERTIFICATE OF INSURANCE (FOR LESSOR)	  	 	127	  	
			
EXHIBIT D	 	BROKERS’ LETTER OF UNDERTAKING (FOR LESSOR)	  	 	133	  	
			
EXHIBIT E	 	AVIATION AUTHORITY UNDERTAKING LETTER	  	 	135	  	
			
EXHIBIT F	 	ESTOPPEL AND ACCEPTANCE CERTIFICATE	  	 	136	  	
			
EXHIBIT G	 	OPINION OF COUNSEL	  	 	139	  	
			
EXHIBIT H	 	FORM OF POWER OF ATTORNEY	  	 	143	  	
			
EXHIBIT I	 	FORM OF CAPE TOWN POWER OF ATTORNEY	  	 	145	  	
			
EXHIBIT J	 	ASSIGNMENT OF RIGHTS (AIRFRAME)	  	 	147	  	
			
EXHIBIT K	 	ASSIGNMENT OF RIGHTS (ENGINES)	  	 	154	  	
			
EXHIBIT L	 	RETURN ACCEPTANCE RECEIPT	  	 	158	  	
			
EXHIBIT M	 	MONTHLY REPORT	  	 	163	  	
			
EXHIBIT N	 	AIRCRAFT DOCUMENTATION	  	 	167	  	
			
EXHIBIT O	 	TECHNICAL EVALUATION REPORT	  	 	170	  	

	 	viii	 	TABLE OF CONTENTS	

AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (together with all Exhibits hereto, the “ Lease ”) is made and entered into as of March 9, 2007.
BETWEEN:
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”); and
INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation whose principal place of business is at 10250 Constellation Boulevard, 34 th Floor, Los Angeles, California 90067, United States of America (“ LESSOR ”).

	 	1	 	RECITALS	

The subject matter of this Lease is one (1) new Airbus A319-100 aircraft. In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and LESSEE hereby agrees to lease from LESSOR the aircraft and the parties further agree as follows:
 
 	ARTICLE 1	SUMMARY OF TRANSACTION	
The following is a summary of the lease transaction between LESSEE and LESSOR. It is set forth for the convenience of the parties only and will not be deemed in any way to amend, detract from or simplify the other provisions of this Lease.
1.13 Description of Aircraft
One new Airbus A319-100 aircraft
1.14 Scheduled Delivery Date and Location
In the month of April 2008 in Hamburg, Germany
1.15 Initial Lease Term
10 years
1.16 Extension Lease Option
Two (2) lease extension options of one (1) year each
1.17 Security Deposit
***** payable as follows (in U.S. Dollars):

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) business days after execution of the lease	  	 	*****	  	
April 1, 2007	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	2	 	ARTICLE 1
SUMMARY OF TRANSACTION	

					
Payment Date	  	Amount	 	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
December 1, 2007	  	 	*****	  	
1.18 Transaction Fee
***** payable within 2 business days after execution of this Lease
1.19 Rent During Lease Term
Payable monthly in advance and equal to the sum of:
 
 	(a)	***** per month expressed in January 2006 U.S. Dollars*	
*The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1 st day of January 2006 through and including the delivery month of the aircraft, compounded monthly provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.
plus
 
 	(b)	***** per month	
plus
(c) the “LESSEE Customization Costs” amortized over the lease term, together with interest thereon at a rate equal to the prime rate in effect at delivery. The “LESSEE Customization Costs” consist of the cost of (i) all agreed-to BFE (whether buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in Exhibit A and (ii) all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	3	 	ARTICLE 1
SUMMARY TRANSACTION	

1.20 Reserves

Type of Reserves	  	Amount of Reserves	
		
Airframe Reserves (6 Year Check):	  	***** per calendar month	
		
Airframe Reserves (12 Year Check):	  	***** per calendar month	
		
Engine Performance Restoration Reserves:	  	***** per engine flight hour for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Engine LLP Reserves:	  	***** per engine cycle for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Landing Gear Reserves:	  	***** per calendar month	
		
APU Reserves:	  	***** per APU hour (payable when the APU is utilized on the aircraft or another aircraft)	
 
*	All reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
1.21 Additional Rent for Excess Airframe and Engine Cycles
***** each cycle the airframe and ***** for each cycle an engine has operated, calculated as of the end of the lease term, in excess of the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycles
1.22 Country of Aircraft Registration
United States
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	4	 	ARTICLE 1
SUMMARY OF TRANSACTION	

1.23 Agreed Value of Aircraft
An amount equal to ***** of the manufacturer’s list price for the aircraft on the delivery date, which will be decreased by ***** of such amount on each yearly anniversary of the delivery date
1.24 LESSOR’s Bank Account
International Lease Finance Corporation Account No. ***** JPMorgan Chase Bank 270 Park Avenue New York, New York 10017 ABA# *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	5	 	ARTICLE 1
SUMMARY OF TRANSACTION	

 	ARTICLE 2	DEFINITIONS	
Except where the context otherwise requires, the following words have the following meanings for all purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the words. Any agreement defined below or in this Lease includes each amendment, modification, supplement and waiver thereto in effect from time to time.
2.3 General Definitions .
“ Aircraft ” means the Airframe, two (2) Engines, APU, Parts and Aircraft Documentation, collectively. As the context requires, “Aircraft” may also mean the Airframe, any Engine, the APU, any Part, the Aircraft Documentation or any part thereof individually. For example, in the context of return to LESSOR the term “Aircraft” means the Airframe, Engines, APU, Parts and Aircraft Documentation collectively, yet in the context of LESSEE not creating any Security Interests other than Permitted Liens on the Aircraft, the term “Aircraft” means any of the Airframe, any Engine, the APU, any Part or the Aircraft Documentation individually.
“ Aircraft Documentation ” means all (a) log books, Aircraft records, manuals and other documents provided to LESSEE in connection with the Aircraft, (b) documents listed in the Estoppel and Acceptance Certificate and Exhibit N and (c) any other documents required to be maintained during the Lease Term and until the Termination Date by the Aviation Authority, LESSEE’s Maintenance Program and this Lease.
“ Airframe ” means the airframe listed in the Estoppel and Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding each Basic Engine or engines and the APU).
“ Airworthiness Directives ” or “ ADs ” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by any one or more of the Aviation Authority, DGAC, FAA and EASA.
“ APU ” means (a) the auxiliary power unit of the Aircraft listed in the Estoppel and Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by LESSOR and leased to LESSEE pursuant to Article 19.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.

	 	6	 	ARTICLE 2
DEFINITIONS	

“ Aviation Authority ” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the United States of America or any Government Entity which under the Laws of the United States of America from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in the United States of America. If the Aircraft is registered in a country other than the United States of America, “Aviation Authority” means the agency which regulates civil aviation in such other country.
“ Aviation Documents ” means any or all of the following which at any time may be obtainable from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application for registration of the Aircraft with the appropriate authority in the State of Registration, (c) the certificate of registration for the Aircraft issued by the State of Registration, (d) a Standard Certificate of Airworthiness for the Aircraft specifying transport category (passenger), (e) an air transport license, (f) an air operator’s certificate, (g) such recordation of LESSOR’s title to the Aircraft and interest in this Lease as may be available in the State of Registration and (h) all such other authorizations, approvals, consents and certificates, if any, in the State of Registration as may be required to enable LESSEE lawfully to operate the Aircraft.
“ Basic Engine ” means, with respect to an Engine, the Engine Manufacturer’s engine modules, components and systems as specified in the Engine Manufacturer’s delivered bill of material for that engine model. The “Basic Engine” does not include the nacelle, installed components related to the Aircraft systems, thrust reversers, quick engine components (QEC), primary exhaust nozzle and any other Parts which are not considered by the Engine Manufacturer to be part of a “basic engine”.
“ BFE ” means any equipment which is to be provided by the purchaser of the Aircraft (whether actually provided by LESSOR as buyer-furnished equipment or Manufacturer as seller-purchased equipment).
“ Business Day ” means a day other than a Saturday or Sunday on which the banks in the city where LESSOR’s Bank is located are open for the transaction of business of the type required by this Lease and except in respect of payments of Rent, Mexico City, Mexico.
“ Cape Town Convention ” means both the Convention and the Protocol.
“ Consolidated Text ” means the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment.

	 	7	 	ARTICLE 2
DEFINITIONS	

“ Convention ” means the Convention on International Interests in Mobile Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa as it may be amended from time to time.
“ Creditor ” means any lessor, owner, bank, lender, mortgagee or other Person which is the owner of or has any interest in an aircraft engine or aircraft operated by LESSEE.
“ Creditor Agreement ” means the applicable agreement between a Creditor and LESSEE or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by LESSEE on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
“ Default ” means any event which, upon the giving of notice, the lapse of time and/or a relevant determination, would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft from LESSOR to LESSEE pursuant to Articles 3 and 6.
“ Delivery Date ” means the date on which Delivery takes place.
“ DGAC ” means the French Direction Générale de l’Aviation Civile or any successor thereto.
“ Dollars ”, “ $ ” and “ US$ ” mean the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency or any successor thereto. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “EASA-approved” station or facility, such station or facility must be approved by EASA to perform maintenance and repair work on the Aircraft, an Engine or Part submitted to it for maintenance or repair, as applicable.
“ Engine ” means (a) each of the engines listed on the Estoppel and Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.
“ Eurocontrol ” means the European Organization for the Safety of Air Navigation established by the Convention related to the Co-operation for the Safety of Air Navigation (Eurocontrol) signed on December 13, 1960, as amended.

	 	8	 	ARTICLE 2
DEFINITIONS	

“ Engine Manufacturer ” means IAE International Engines A.G.
“ Event of Default ” means any of the events referred to in Article 25.2.
“ FAA ” means the Federal Aviation Administration of the U.S. Department of Transportation or any successor thereto under the Laws of the U.S. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “FAA-approved” station or facility, such station or facility must be approved by the FAA to perform maintenance and repair work on the Aircraft, an Engine or Part, as applicable.
“ FARs ” means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.
“ Geneva Convention ” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19, 1948.
“ Government Entity ” means any (a) national, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof or (c) association, organization or institution of which any of the entities listed in (a) or (b) is a member or to whose jurisdiction any such entity is subject.
“ International Registry ” means the international registration facilities established for the purposes of the Cape Town Convention.
“ JAA ” means the Joint Aviation Authorities, an associated body of the European Civil Aviation Conference.
“ JARs ” means the EASA/JAA regulations, as amended from time to time, or any successor regulations thereto.
“ Landing Gear ” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.
“ Law ” means any (a) statute, decree, constitution, regulation, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party, (c) judicial or administrative interpretation or application of any of the foregoing or (d) any binding judicial precedent having the force of law.
“ LESSOR’s Lien ” means any Security Interest created by or through LESSOR.

	 	9	 	ARTICLE 2
DEFINITIONS	

“ Maintenance Program ” means LESSEE’s maintenance program as approved by the Aviation Authority or such other maintenance program as LESSOR may, acting reasonably accept in writing.
“ Manufacturer ” means Airbus S.A.S. “ Mexico ” means the United Mexican States.
“ MPD ” means the then-current Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.
“ Overhaul ” means the full reconditioning of the Aircraft, an Engine, the APU, Landing Gear, module or Part, as the case may be, in which such equipment has been fully disassembled, cleaned, thoroughly inspected and returned to the highest standard specified by the applicable manufacturer’s manual.
“ Part ” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, LESSEE-furnished or LESSOR-purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of LESSOR in accordance with Article 12.4.
“ Permitted Lien ” means (a) LESSOR’S Liens; (b) Security Interests arising in the ordinary course of LESSEE’s business for Taxes either not yet assessed or, if assessed, not yet due or being contested in good faith in accordance with Article 16.5 or (c) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ liens or similar Security Interests arising by operation of Law after the Delivery Date in the ordinary course of LESSEE’s business for amounts which are either not yet due or are being contested in good faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided) so long as such proceedings do not involve any material likelihood of sale, forfeiture or loss of the Aircraft.
“ Person ” means any individual, firm, partnership, joint venture, trust, corporation, company, Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether having distinct legal personality or not.
“ Prime Rate ” means the rate of interest from time to time announced by JPMorgan Chase Bank in New York as its prime commercial lending rate.

	 	10	 	ARTICLE 2
DEFINITIONS	

“ Prohibited Country ” means any country other than Mexico to which the export and/or use of an Airbus A319-100 aircraft with V2524 engines attached thereto is not permitted under (a) any United Nations sanctions, (b) the Council Regulation (EC) No. 149/2003 which updates and amends Council Regulation (EC) 1334/2000, (c) the United States Export Administration Act 1979 (as amended) or any successor legislation and/or the Export Administration Regulations promulgated thereunder, (d) where applicable, the various regulations administered from time to time by the Office of Foreign Assets Control of the U.S. Treasury Department, (e) any similar or corresponding legislation then in effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any subsequent United Nations Sanctions Orders the effect of which prohibits or restricts the export and/or use of Airbus A319-100 aircraft with V2524 engines attached thereto to such country. Prohibited Country will be defined by applicable regulations as modified, amended or superceded from time to time.
“ Protocol ” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa, as it may be amended from time to time.
“ Return Check ” means the accomplishment of the subsequent “C” check (or equivalent) of the Aircraft in accordance with the MPD (including all non-routine work generated as a result of performance of such MPD tasks) to clear the Aircraft for the next 20 months, 6,000 hours and 4,500 cycles of operation from the Termination Date. For avoidance of doubt, if the inspection interval pursuant to the MPD for a particular task only refers to one or two of the three measurements above ( i.e . months, hours or cycles), then only those particular measurements referred to in the MPD will be utilized in determining whether the task must be performed.
“ Qualified Performance Restoration ” means that the gaspath core major module of an Engine shall have, as a minimum, a Refurbishment accomplished in accordance with the Engine Manufacturer’s current V2500 Maintenance Management Plan recommendations. The gaspath core major module shall consist of the high pressure compressor module, diffuser/combustor group, outer/inner combustion chambers, No. 4 bearing, high pressure turbine stage one nozzle vane group and high pressure turbine module. For the sole purposes of this paragraph, the term “Refurbishment” means the Engine Manufacturer’s definition of a refurbishment as stated in the then-current V2500 Maintenance Management Plan recommendations at the time of the applicable shop visit.
“ Security Interest ” means any encumbrance or security interest, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title retention, attachment, levy, claim or right of possession or detention.

	 	11	 	ARTICLE 2
DEFINITIONS	

“ State of Registration ” means the U.S. or such other country or state of registration of the Aircraft as LESSOR may, in its absolute discretion, approve in writing.
“ U.S. ” or “ U.S.A. ” means the United States of America.
2.4 Specific Definitions . The following terms are defined in the Articles referenced below:

Terms	  	Article	
Agreed Value	  	19.1	
Airframe Reserves (6 Year Check)	  	5.4.1	
Airframe Reserves (12 Year Check)	  	5.4.1	
APU Reserves	  	5.4.1	
Default Interest	  	5.7	
Delivery Location	  	3.1	
Engine LLP Reserves	  	5.4.1	
Engine Performance Restoration Reserves	  	5.4.1	
Expenses	  	17.1	
Expiration Date	  	4.3	
Extension Lease Term	  	4.2	
FHA Agreement	  	13.3	
Future Agreements	  	28.8	
Indemnitees	  	17.1	
Initial Lease Term	  	4.1	
Landing Gear Reserves	  	5.4.1	
Lease Term	  	4.1	
LESSEE Customization Costs	  	5.3.1	
LESSOR’s Assignee	  	24.2.1	
LESSOR’s Bank	  	5.6	
LESSOR’s Lender	  	24.3	
Modification	  	12.9.1	
Net Total Loss Proceeds	  	19.1	
OEM Parts	  	1722	
Operative Documents	  	20.1.3	
PMA Parts	  	17.2.2	
Rent	  	5.3.1	
Reorganization Transaction	  	20.7.5	
Reorganized Entity	  	20.2.5	
Reserves	  	5.4.1	
Scheduled Delivery Date	  	3.2	
Security Deposit	  	5.1.1	
Taxes	  	16.1	
Termination Date	  	4.4	
Total Loss	  	19.	
Total Loss Date	  	19.1	
Total Loss Proceeds	  	19.1	
Transaction Fee	  	5.2	
Transfer	  	24.2.1	
Waste Expense	  	13.4	

	 	12	 	ARTICLE 2
DEFINITIONS	

 	ARTICLE 3	PLACE AND DATE OF DELIVERY	
3.7 Place of Delivery . LESSOR will deliver the Aircraft to LESSEE at Manufacturer’s facility in Hamburg, Germany or such other place as may be agreed in writing between the parties (the “ Delivery Location ”).
3.8 Scheduled Delivery Date . As of the date of this Lease, delivery of the Aircraft from Manufacturer to LESSOR and LESSOR to LESSEE is scheduled to occur in the month of April 2008. LESSOR will notify LESSEE from time to time and in a timely manner of the exact date on which LESSOR expects Delivery to take place (the “ Scheduled Delivery Date ”).
3.9 Delivery subject to Manufacturer Delivery . LESSOR and LESSEE expressly acknowledge that Delivery of the Aircraft to LESSEE is subject to and conditioned upon delivery of the Aircraft by Manufacturer to LESSOR.
3.10 No LESSOR Liability . LESSOR will not be liable for any loss or expense, or any loss of profit, arising from any delay or failure in Delivery to LESSEE unless such delay or failure arises as a direct consequence of the willful misconduct of LESSOR, and in no event will LESSOR be liable for any delay or failure which is caused by any breach or delay on the part of Manufacturer or any BFE supplier.
3.11 Total Loss of Aircraft prior to Delivery . If a Total Loss of the Aircraft occurs prior to Delivery, neither party will have any further liability to the other except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent.
3.12 Cancellation for Delay . Promptly after LESSOR becomes aware that in Manufacturer’s opinion a delay will cause Delivery to be delayed beyond October 30, 2008, LESSOR will notify LESSEE. By written notice given within ten (10) Business Days after LESSEE’s receipt of such LESSOR notice, either party may by written notice to the other party terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent, and if LESSOR subsequently collects (at its discretion) from Manufacturer monetary damages as compensation for such delay, LESSOR shall share such compensation (minus any out of pocket costs incurred by LESSOR in pursuing such damages) equally with LESSEE. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.6 unless otherwise agreed in writing by the parties.

	 	13	 	ARTICLE 3
PLACE AND DATE OF DELIVERY	

 	ARTICLE 4	LEASE TERM AND EXTENSION OPTION	
4.5 Initial Lease Term . The term of leasing of the Aircraft will commence on the Delivery Date and continue for an initial lease term of ten (10) years (“ Initial Lease Term ”).
4.6 Lease Extension Option . So long as no Default or Event of Default has occurred and is continuing hereunder on the date of exercise of the option, LESSEE will have two (2) options to extend the term of the Lease for a period of one (1) year each from the then-existing Expiration Date (the “ Extension Lease Term ”). In order to exercise an option, LESSEE must give written notice to LESSOR not less than ten (10) months prior to the then-existing Expiration Date of this Lease. Any notice given by LESSEE in accordance herewith will be irrevocable.
4.7 “Lease Term” and “Expiration Date” . “Lease Term” means the term of leasing commencing on the Delivery Date and terminating on the Expiration Date. “ Expiration Date ” means the date on which LESSEE is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of the Initial Lease Term or Extension Lease Term, if and as applicable.
4.8 “Termination Date” . If LESSEE returns the Aircraft to LESSOR on the Expiration Date in the condition required by Article 23, then “ Termination Date ” has the same meaning as “Expiration Date”. If LESSEE does not do so, then “ Termination Date ” means the date on which the first of the following events occurs:
(a) there is a Total Loss of the Aircraft prior to Delivery pursuant to Article 3.5;
(b) cancellation of this Lease occurs pursuant to Article 3.6;
(c) there is a Total Loss of the Aircraft and payment is made to LESSOR in accordance with Article 19.3;
(d) prior to the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default;
(e) an Event of Default occurs hereunder by LESSEE returning the Aircraft in the condition required by this Lease after the Expiration Date; or
(f) after the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default.

	 	14	 	ARTICLE 4
LEASE TERM AND EXTENSION OPTION	

 	ARTICLE 5	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	
5.15 Security Deposit .
 
5.15.1	LESSEE will pay LESSOR a security deposit of ***** for its lease of the Aircraft (the “ Security Deposit ”). The Security Deposit is payable as follows (in US$):	

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) Business Days after execution of the Lease	  	 	*****	  	
April 1, 2007	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
December 1 2007	  	 	*****	  	
 
5.15.2	The Security Deposit may be commingled with LESSOR’s general funds and any interest earned on such Security Deposit will be for LESSOR’s account. If the Security Deposit is reduced below the required amount by application to meet LESSEE’s unperformed obligations under this Lease, LESSEE will replenish the Security Deposit within ten (10) days after LESSOR’s written demand therefor in accordance with the provisions of Article 26.1. The Security Deposit will serve as security for the performance by LESSEE of its obligations under this Lease and any other agreements between LESSEE and LESSOR or any direct or indirect subsidiary of LESSOR relating to aircraft, engines, aircraft equipment or the extension of credit and may be applied by LESSOR upon the occurrence of an Event of Default hereunder or of a default by LESSEE under any such other agreements.	
 
5.15.3	Upon termination of this Lease in accordance with Article 4.4 other than if an Event	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	15	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

 	of Default has occurred and is continuing, LESSOR will return to LESSEE the amount of the Security Deposit then held by LESSOR (so long as no default by LESSEE exists under any other agreement between LESSEE and LESSOR relating to aircraft, engines or aircraft equipment or the extension of credit by LESSOR to LESSEE), without interest, less an amount determined by LESSOR to be a reasonable estimate of the costs, if any, which LESSOR will incur to remedy any unperformed obligations of LESSEE under this Lease, including the correction of any discrepancies from the required condition of the Aircraft on return of the Aircraft.	
5.16 Transaction Fee . Within two (2) Business Days after execution of this Lease, LESSEE will pay LESSOR a nonrefundable transaction fee of ***** (the “ Transaction Fee ”).
5.17 Rent .
 
5.17.1	LESSEE will pay LESSOR the following amounts monthly in advance as rent for the Aircraft (“ Rent ”):	
Lease Term : Payable monthly in advance and equal to the sum of:
 
 	(a)	***** per month expressed in January 2006 U.S. Dollars*	
*The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1 st day of January 2006 through and including the delivery month of the aircraft, compounded monthly; provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.
plus
 
 	(b)	***** per month	
plus
(c) the “LESSEE Customization Costs” amortized over the Lease Term, together with interest thereon at a rate equal to the Prime Rate in effect at Delivery
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	16	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

The “ LESSEE Customization Costs ” consist of the cost of (i) all agreed-to BFE (whether buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in Exhibit A and (ii) all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR.
Any increases to the above base rent will be calculated immediately prior to Delivery.
 
5.17.2	The first payment of Rent during the Lease Term will be paid no later than three (3) Business Days prior to the Scheduled Delivery Date. Each subsequent payment of Rent will be due monthly thereafter no later than the same day of the month as the Delivery Date of the Aircraft except that, if such day is not a Business Day, the Rent will be due on the immediately preceding Business Day. If Delivery occurred on the 29 th , 30 th or 31 st of the month and in any given month during the Lease Term in which a Rent payment is due there is no such corresponding date, Rent will be payable on the last Business Day of such month. In the event that LESSEE has paid the first payment of Rent three (3) Business Days prior to the Scheduled Delivery Date and Delivery is subsequently delayed for a period in excess of ten (10) days, LESSOR shall return such Rent payment to LESSEE at LESSEE’s request, unless LESSOR advises LESSEE in writing that the Aircraft will be delivered in the next seven (7) days from the date of such request.	
5.18 Reserves .
 
5.18.1	LESSEE will pay to LESSOR supplemental Rent, based on LESSEE’s use of the Aircraft during the Lease Term, in the form of the following reserves in the following amounts (individually, “ Airframe Reserves (6 Year Check) ”, “ Airframe Reserves (12 Year Check) ”, “ Engine Performance Restoration Reserves ”, “ Engine LLP Reserves ”, “ Landing Gear Reserves ” and “ APU Reserves ”, and collectively “ Reserves ”):	

Type of Reserves	  	Amount of Reserves	
		
Airframe Reserves (6 Year Check):	  	***** per calendar month	
		
Airframe Reserves (12 Year Check):	  	***** per calendar month	
Engine Performance
Restoration Reserves:	  	***** per Engine flight hour for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Engine LLP Reserves:	  	***** per Engine cycle for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Landing Gear Reserves:	  	***** per calendar month	
		
APU Reserve:	  	***** per APU hour (payable when the APU is utilized on the Aircraft or another aircraft)	
 
*	All Reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	17	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

5.18.2	All Reserves will be paid on or before the 15 th day of the calendar month next following the month in which the Delivery Date occurs and on or before the 15 th  day of each succeeding calendar month for flying performed during the calendar month prior to payment and for the calendar-based Reserves pertaining to such prior calendar month. All Reserves pertaining to the month in which the Termination Date occurs will be paid on the Termination Date, unless otherwise agreed by the parties.	
 
5.18.3	No interest will accrue or be paid at any time to LESSEE on such Reserves and, subject to LESSOR’s obligations under Article 13, LESSOR may commingle the Reserves with LESSOR’s general funds.	
5.19 Additional Rent for Excess Cycles . If on the Termination Date the Airframe or any Engine has operated more cycles than the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycle over the period of the Lease Term, LESSEE will pay LESSOR as additional Rent ***** for each Airframe cycle and ***** for each Engine cycle the Airframe and any Engine actually operated during the Lease Term in excess of the number of cycles which result from an hour/cycle ratio of 1.25 hours to 1 cycle. A calculation will be made by LESSOR as of the Termination Date and such additional Rent will be due and payable by LESSEE within three (3) Business Days following the date LESSEE receives such calculation, in writing, from LESSOR.
5.20 LESSOR’s Bank Account . The Security Deposit, Transaction Fee, Rent, Reserves and any other payment due under this Lease will be paid by wire transfer of immediately available U.S. Dollar funds to LESSOR’s bank account at:
International Lease Finance Corporation Account No. ***** JPMorgan
Chase Bank 270 Park Avenue New York, New York 10017 ABA# *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	18	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

or to such other bank account in the United States as LESSOR may from time to time designate by written notice (“ LESSOR’s Bank ”). When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually must be received by LESSOR’s Bank on or before such specific date, even if, in order for such payment to be received by LESSOR’s Bank by such specific date, LESSEE must initiate the wire transfer prior to such specific date.
5.21 Default Interest . If LESSOR’s Bank does not receive the Rent or any other amount on or before the specific date when due, LESSOR will suffer loss and damage the exact nature and amount of which are difficult or impossible to ascertain. LESSEE will pay LESSOR as supplemental Rent (by way of agreed compensation and not as a penalty) interest on any due and unpaid amounts payable by LESSEE under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to ***** plus the Prime Rate in effect on the date on which the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at LESSOR’s Bank or, in the case of LESSOR’s performance of LESSEE’s obligations hereunder, from the date of payment by LESSOR through the date of LESSEE’s repayment to LESSOR (“ Default Interest ”). Default Interest will accrue on a day-to-day basis and be compounded monthly.
5.22 No Deductions or Withholdings . All payments by LESSEE under this Lease, including the Security Deposit, Transaction Fee, Rent, Reserves, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes (as defined in Article 16) imposed in the State of Registration or any jurisdiction from which such payments are made unless LESSEE is prohibited by Law from doing so, in which event LESSEE will gross up the payment amount such that the net payment received by LESSOR after any deduction or withholding equals the amounts called for under this Lease. LESSEE will also do all of the following:
(a) Ensure that the deduction or withholding does not exceed the minimum amount legally required;
(b) Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto) unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR; and
(c) Furnish to LESSOR within thirty (30) days after each payment a certified copy of an official receipt of the relevant Government Entities involved, if available, or other evidence of payment reasonably accepted by LESSOR for all amounts so deducted or withheld.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	19	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

5.23 Value Added Taxes . The Rent and other amounts payable by LESSEE under this Lease are exclusive of any value added tax or similar tax or duty.
5.24 Wire Transfer Disbursement Report . At the time of each Rent or other payment, LESSEE will advise LESSOR (including by way of a reference included in a bank transfer instruction that is available to LESSOR) in writing of the payment being made by LESSEE and the allocation of such payment to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation set forth in LESSEE’s report, in the event LESSEE is in default under this Lease, LESSOR will have complete discretion to allocate LESSEE’s payments as LESSOR determines.
5.25 Net Lease .
 
5.25.1	This Lease is a net lease and LESSEE’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:	
(a) any right of set-off, counterclaim, recoupment, defense or other right (including any right of reimbursement) which LESSEE may have against LESSOR, Manufacturer, the Engine Manufacturer or any other person for any reason, including any claim LESSEE may have for the foregoing;
(b) unavailability or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against LESSEE’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any purpose, condition. design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of an jurisdiction or Total Loss of the Aircraft;
(c) insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against LESSOR, LESSEE, Manufacturer, the Engine Manufacturer or any other Person;
(d) invalidity or unenforceability or lack of due authorization of or other defect in this Lease;
(e) failure or delay on the part of any party to perform its obligations under this Lease; or
(f) any other circumstance which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of LESSEE hereunder.
 
5.25.2	Nothing in Article 5.11 will be construed to limit LESSEE’s rights and remedies in the event of LESSOR’s breach of its warranty of quiet enjoyment set forth in Article 21.2 or to limit LESSEE’s rights and remedies to pursue in a court of law any claim it may have against LESSOR or any other Person.	

	 	20	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

5.26 Currency Indemnity . If under any applicable Law, whether as a result of a judgment against LESSEE or the liquidation of LESSEE or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, LESSEE will as a separate and independent obligation, fully indemnify LESSOR against the amount of the shortfall. If the amount received by LESSOR upon converting the payment into Dollars exceeds the amount payable under this Lease, LESSOR will remit such excess to LESSEE. For the purposes of this paragraph “rate of exchange” means the rate at which LESSOR is able on the relevant date to purchase Dollars in New York or London (at LESSOR’s option) with such other currency.
5.27 LESSOR Performance of LESSEE Obligation . If LESSEE fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, LESSOR may (but is not required to) at its election, after the expiry of any applicable cure or similar period and without waiver of its rights perform such obligation and/or pay such amount unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.
5.28 Consideration for Rent and other Amounts . The amount of the Rent and other payments contained in this Lease are in consideration of LESSEE’s waiver of warranties and acceptance of the disclaimers and LESSEE’s provision of indemnities set forth in Articles 8 and 17, respectively, and the other provisions of this Lease.

	 	21	 	ARTICLE 5
SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

 	ARTICLE 6	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	
6.9 LESSEE Selection of Aircraft . LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE IS BASED UPON INFORMATION SUPPLIED BY MANUFACTURER. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
6.10 Participation Agreement . LESSEE has the right to inspect the Aircraft during the manufacture process and to attend and observe the acceptance tests of the Aircraft pursuant to the terms of a Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B.
6.11 Procurement of BFE . LESSOR will procure all BFE for the Aircraft in accordance with the Aircraft specification set forth in Exhibit A. With respect to any additional BFE not part of such specifications, LESSOR and LESSEE agree to use commercially reasonable efforts to procure such BFE under the supplier contract of LESSOR or LESSEE which provides the most favorable pricing, unless LESSOR is prohibited from doing so or unless any such change could cause, in LESSOR’s reasonable opinion, a delay in Delivery of the Aircraft.
6.12 Assignment of Training . LESSOR agrees to give LESSEE a product support allowance as set forth in Appendix 3 of the Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B. If LESSEE fails to take Delivery of the Aircraft when tendered in accordance with Article 6.7, LESSEE will immediately pay to LESSOR an amount equal to the Dollar value of any goods or services used under the Participation Agreement.
6.13 LESSEE Inspection of Aircraft . During the course of final assembly of the Aircraft, and at Delivery, LESSEE will have its own representative present to inspect the Aircraft and to ensure its conformity with LESSEE’s needs and the terms of this Lease. LESSEE will have ground inspection and acceptance flight rights with respect to the Aircraft. LESSEE acknowledges that, as between LESSEE and LESSOR, in accepting the Aircraft LESSEE is relying on its own inspection and knowledge of the Aircraft in determining whether the Aircraft meets the requirements of this Lease.
6.14 Aircraft at Delivery . At Delivery, the Aircraft will be as set forth in Exhibit A, as such description may be modified by any change requests agreed to among LESSEE, LESSOR

	 	22	 	ARTICLE 6
INVOLVEMENT WITH AIRCRAFT MANUFACTURER	

and Manufacturer (which will be reflected in amendment(s) to this Lease). In the event of any discrepancies, LESSEE and LESSOR will cooperate in good faith with one another and with Manufacturer and the Engine and other manufacturers, as applicable, in order to arrive at a mutually acceptable resolution of any such discrepancies.
6.15 Delivery of the Aircraft to LESSEE . Subject to LESSEE having performed all of the conditions precedent to Delivery set forth in this Lease (or LESSOR’s waiver of one or more of such conditions precedent), immediately following delivery of the Aircraft from Manufacturer to LESSOR, LESSOR will deliver the Aircraft to LESSEE at the Delivery Location. Upon tender of the Aircraft by LESSOR to LESSEE in the condition required by Article 6.6, LESSEE will accept the Aircraft and the date of tender by LESSOR to LESSEE will be deemed to be the Delivery Date for all purposes under this Lease, including the commencement of LESSEE’s obligation to pay Rent hereunder. However, nothing in this Lease will obligate LESSOR to deliver the Aircraft to LESSEE if LESSEE has not complied with the conditions contained in Articles 7.1 and 7.2.
6.16 LESSEE Acceptance of Aircraft . If LESSEE fails to (a) comply with its obligations set forth in the Participation Agreement pursuant to Article 6.2, (b) comply with the conditions contained in Articles 7.1 and 7.2 so as to allow Delivery to take place immediately following delivery of the Aircraft by Manufacturer to LESSOR or (c) take delivery of the Aircraft when properly tendered for delivery by LESSOR in the condition required hereunder, LESSEE will indemnify LESSOR for all out-of-pocket costs and expenses incurred by LESSOR as a result thereof including (without limitation) any payments other than the purchase price which LESSOR becomes obliged to make to Manufacturer which result directly from LESSEE’s failure to comply with said conditions.

	 	23	 	ARTICLE 6
INVOLVEMENT WITH AIRCRAFT MANUFACTURER	

 	ARTICLE 7	PRE-DELIVERY. DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	
7.4 Pre-Delivery Requirements . LESSEE will do each of the following prior to the Scheduled Delivery Date of the Aircraft within the time frames set forth below:
 
7.4.1	Within one (1) month after execution of this Lease or such other period as the parties shall agree, LESSEE will deliver to LESSOR each of the following:	
(a) copies of resolutions of the Board of Directors of LESSEE or other written evidence of appropriate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of LESSEE hereunder. Such resolutions or other written evidence must also specifically grant the individual executing this Lease on behalf of LESSEE with the authority and power to commit and bind LESSEE to the arbitration clause contained in Article 27 under the Laws of Mexico;
(b) a letter from the Aviation Authority in the form and substance of Exhibit E (if available); and
(c) an opinion of counsel in substantially the form and substance of Exhibit G such as LESSOR accepts from third party legal counsel in Mexico in the course of LESSOR’s business.
 
7.4.2	At least seven (7) days prior to the Scheduled Delivery Date, LESSEE will have delivered to LESSOR a Certificate of Insurance and Brokers’ Letter of Undertaking substantially in the same form as Exhibits C and D evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date.	
 
7.4.3	At least three (3) Business Days prior to the Scheduled Delivery Date, LESSEE will do each of the following:	
(a) pay to LESSOR the first monthly installment of Rent in accordance with Article 5.3.7;
(b) to the extent required, provide LESSOR with documents evidencing that LESSEE has obtained any necessary licenses for the importation and ferrying of the Aircraft into Mexico and that all applicable customs duties and sales taxes in respect

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

of the Aircraft, if any, have been discharged by LESSEE (or arrangements satisfactory to LESSOR have been made for obtaining or paying for the same), such that at return of the Aircraft to LESSOR no additional fees, duties or taxes will be payable in order to export the Aircraft from Mexico;
(c) provide LESSOR with documents reasonably requested by LESSOR evidencing the issuance of each approval, license and consent, if any, which may be required in connection with the remittance to LESSOR of any amount payable under this Lease or the performance by LESSEE of any of its obligations hereunder (including without limitation any exchange control approval);
(d) provide LESSOR with a copy of such Aviation Documents as may be available prior to the Scheduled Delivery Date;
(e) provide LESSOR with a power of attorney empowering LESSEE’s representative, who may be an officer or employee of LESSEE, to accept the Aircraft on behalf of LESSEE;
(f) provide LESSOR with a power of attorney in substantially the form of Exhibit H;
(g) provide LESSOR with a power of attorney for purposes of the Cape Town Convention in the form of Exhibit I; and
(h) provide LESSOR with such other documents as LESSOR may reasonably request.
7.5 Delivery Requirements . On the Delivery Date of the Aircraft, each of the following will occur:
 
7.5.1	LESSEE will execute and deliver to LESSOR an Estoppel and Acceptance Certificate in the form of Exhibit F covering the Aircraft and effective as of the Delivery Date.	
 
7.5.2	If not previously done, LESSEE and LESSOR will sign an amendment or supplement to Exhibit A evidencing all agreed-to changes to the specification of the Aircraft.	
 
7.5.3	LESSEE will deliver a certificate signed by an officer of LESSEE stating all of the following:	
(a) the representations and warranties contained in Article 20 are true and

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

accurate on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(b) no Default or Event of Default has occurred and is continuing or will result from LESSEE’s lease of the Aircraft hereunder.
 
7.5.4	LESSEE’s counsel will deliver an opinion confirming the matters set forth in the opinion of counsel described in Article 7.1 and advising that all filing and other requirements described in the earlier opinion of counsel have been met or will be met (if permitted by Law) upon or immediately following Delivery.	
 
7.5.5	If any Creditor Agreement provides that such Creditor will or may obtain any right, title or interest in an Engine which is installed on such Creditor’s aircraft, LESSEE will deliver to LESSOR an engines cooperation agreement in form and substance acceptable to LESSOR which is executed by LESSEE and LESSEE’s Creditors (as defined therein).	
 
7.5.6	LESSEE and LESSOR will execute assignments of Manufacturer and Engine Manufacturer rights in the form and substance of Exhibits J and K, respectively, subject to the manufacturers’ consents, if and as applicable.	
 
7.5.7	LESSEE will deliver to LESSOR a copy of such Aviation Documents as have not been previously delivered which are available.	
7.6 Post-Delivery Requirements .
 
7.6.1	Within seven (7) days after Delivery, if not previously provided, LESSEE will do each of the following:	
(a) procure registration of the Aircraft in the register of aircraft of the State of Registration showing LESSOR as the owner and provide evidence of the same to LESSOR;
(b) cause the interests of LESSOR in the Aircraft (including in the Engines, if possible), this Lease and the other Operative Documents to be registered in the International Registry to the fullest extent such interests may be registered, including by consenting to or causing such registration via a “designated entry point” (as such term is defined in the Cape Town Convention) in the United States;
(c) provide LESSOR with copies of all Aviation Documents not previously delivered; and

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

(d) if the Aircraft could not be registered at Delivery, provide LESSOR with a follow-up opinion of counsel advising that the Aircraft has been registered in the State of Registration and that all necessary filings have been made.
 
7.6.2	Within one (1) month after Delivery, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	

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

 	ARTICLE 8	DISCLAIMERS AND WAIVERS	
ANY COMMITMENT OR COVENANT ON THE PART OF LESSOR REGARDING THE CONDITION OF THE AIRCRAFT EXPIRES AFTER DELIVERY AND THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS ARTICLE 8 REGARDING THE CONDITION OF THE AIRCRAFT WILL THEN APPLY. THUS, FROM AND AFTER THE TIME OF LESSEE’S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE, AS BETWEEN LESSOR AND LESSEE:
8.8 “As Is, Where Is” . LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS”. LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO, AND LESSEE HEREBY WAIVES ANY EXPRESS OR IMPLIED WARRANTY OR COVENANT (WHETHER STATUTORY OR OTHERWISE) AS TO (a) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION. CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
8.9 Waiver of Warranty of Description . LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE

	 	28	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME AFTER DELIVERY, THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSORS ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL INVALIDATE ANY AGREEMENT BETWEEN LESSOR AND MANUFACTURER TO RECTIFY DISCREPANCIES DISCOVERED PRIOR TO DELIVERY.
8.10 LESSEE Waiver . LESSEE HEREBY WAIVES AS BETWEEN ITSELF AND LESSOR AND AGREES NOT TO SEEK TO ESTABLISH OR ENFORCE ANY RIGHTS OR REMEDIES, EXPRESS OR IMPLIED (WHETHER STATUTORY, IN CONTRACT OR TORT OR UNDER ANY STRICT LIABILITY OR OTHER THEORY) AGAINST LESSOR OR THE AIRCRAFT RELATING TO ANY OF THE MATTERS MENTIONED IN ARTICLES 8.1 OR 8.2, REGARDLESS OF THE NEGLIGENCE, ACTIVE OR PASSIVE OR ANY OTHER TYPE, OF LESSOR.
8.11 Conclusive Proof . DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND ENGINES AND (a) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (b) THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO LESSEE.
8.12 No Liability to Repair or Replace . LESSOR will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use.

	 	29	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

8.6 No Waiver . Nothing in this Article 8 or elsewhere in this Lease will be deemed to be a waiver by LESSEE of any rights it may have against Manufacturer, the Engine Manufacturer or any other Person.
8.7 Consideration for Waivers . LESSEE’s waiver of warranties and acceptance of the disclaimers expressly set forth in this Article 8 are made in consideration of (a) LESSEE’s rights hereunder to inspect the Aircraft, (b) LESSOR’s assignment to LESSEE of any existing and assignable warranties of Manufacturer and the Engine Manufacturer and (c) the amount of the Rent and other payments contained in this Lease.

	 	30	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

 	ARTICLE 9	MANUFACTURERS’ AND VENDORS’ WARRANTIES	
9.4 Warranties . As set forth in Article 7.2.6, at Delivery LESSOR will assign to LESSEE for the duration of the Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine Manufacturer. Effective on the Delivery Date, all other assignable vendor warranties with respect to the Aircraft are hereby assigned by LESSOR to LESSEE.
9.5 Reassignment . On the Termination Date, the benefit of any warranty assigned by LESSOR to LESSEE pursuant to Articles 7.2.6 and 9.1 will be reassigned automatically to LESSOR or its designee except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. At LESSOR’s election, LESSEE’s rights under such warranties (including LESSEE’s claims and rights to payment thereunder) will revert to LESSOR during any period in which an Event of Default is continuing. Similarly, any additional warranties received by LESSEE from Manufacturer, the Engine Manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will be automatically assigned by LESSEE to LESSOR or its designee on the Termination Date except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. LESSEE at its own cost and expense will do all such things and execute such documents as may be required for these purposes.
9.6 Warranty Claims . LESSEE will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft.

	 	31	 	ARTICLE 9
MANUFACTURERS’ AND
VENDORS’ WARRANTIES	

 	ARTICLE 10	OPERATION OF AIRCRAFT	
10.6 Costs of Operation . LESSEE will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft.
10.7 Compliance with Laws . Except as otherwise explicitly provided in this Lease, LESSEE agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which LESSEE may operate. LESSEE will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or country if so doing would cause LESSEE or LESSOR to be in violation of any Law applicable to either of them or the Aircraft, except as may be reasonably required to preserve the Aircraft or the safety, well being or life of passengers or crew; provided, however, in such case, LESSEE shall immediately notify LESSOR and undertake its best efforts to remove the Aircraft from such airport or country as soon as reasonably possible.
10.8 Training . LESSEE will not use the Aircraft for testing or for training of flight crew members other than LESSEE crew members and will not use the Aircraft for training any more than it utilizes for training the other aircraft in its fleet.
10.9 No Violation of Insurance Policies . LESSEE will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies LESSEE is required to carry and maintain as set forth in this Lease. LESSEE will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit any such insurance policies.
10.10 Flight and Airport Charges .
 
10.10.1	LESSEE will pay promptly when due all airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges due and payable by LESSEE for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, unless	

	 	32	 	ARTICLE 10
OPERATION OF AIRCRAFT	

 	the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law, so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.	
 
10.10.2	If requested in writing by LESSOR (but not more frequently than twice annually, unless a Default or Event of Default shall have occurred and be continuing), LESSEE will provide LESSOR with a list of the airports to which LESSEE regularly operates the Aircraft or its other aircraft (in the event that the operation of such other aircraft may reasonably be expected to give rise to a lien on the Aircraft for landing, navigation, parking, storage or similar charges). LESSEE hereby authorizes Eurocontrol (if applicable) or another aviation authority or airport or creditor claiming or threatening to claim a Security Interest in the Aircraft to confirm the status of LESSEE’s payments to such creditor in respect of navigation, landing, parking, storage and similar charges for the Aircraft and its other aircraft, to the extent that the failure to make any payment in respect of such other aircraft has or might give rise to a Security Interest in the Aircraft, as and when requested by LESSOR.	

	 	33	 	ARTICLE 10
OPERATION OF AIRCRAFT	

 	ARTICLE 11	SUBLEASES	
11.9 No Sublease without LESSOR Consent . LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD) AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND LESSEE. NO SUBLEASING OF AN ENGINE WILL BE PERMITTED.
11.10 LESSOR Costs . LESSEE will indemnify LESSOR on demand for all reasonable out-of-pocket expenses (including legal fees) incurred in connection with LESSOR’s assessment of the subleasing proposal (whether or not LESSOR’s consent to such sublease is ultimately given) and implementation of the sublease.
11.11 Permitted Sublessees . LESSOR hereby acknowledges that upon a request by LESSEE for a sublease in accordance with this Article 11 to one of the following entities, LESSOR shall consent to such sublease, such consent not to be unreasonably withheld or delayed: TACA International Airlines, S.A.; Lineas Aereas Costarricenses, S.A.; AVIATECA, S.A.; TACA Costa Rica, S.A.; and Trans American Airlines, S.A. (d/b/a TACA PERU); provided, however, that at the time of such consent such entity has not suffered such a material deterioration in its condition such that a sublease to it would reasonably be expected to result in the operation or maintenance of the Aircraft in contravention of one or more terms of this Lease, and that nothing herein shall limit the terms and requirements otherwise set forth in this Article 11.
11.12 Any Approved Sublease . Any sublease approved by LESSOR will be for a term no greater than the remaining Lease Term. The applicable sublease agreement will contain provisions consistent with this Lease protecting LESSOR’s title to the Aircraft, providing appropriate LESSOR disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease will be subject and subordinate to this Lease. LESSOR will have an opportunity to review the proposed sublease agreement in advance in order to determine that it meets the requirements of this Article 11.4. In its sole discretion, LESSOR may require an opinion of counsel in connection with such sublease, including LESSOR’s right to repossess the Aircraft in the event of an Event of Default hereunder and LESSEE’s and LESSOR’s rights to repossession in the case of an event of default under such sublease. LESSEE will not amend the terms of any approved sublease agreement without the prior written consent of LESSOR, which will not be unreasonably withheld.

	 	34	 	ARTICLE 11
SUBLEASES	

11.13 Assignment of Sublease . Any approved sublease will be assigned to LESSOR as security. LESSEE will deliver the original counterpart of the sublease to LESSOR and make any filings necessary to protect LESSOR’s security interest.
11.14 Application of Cape Town Convention . At LESSOR’s request, LESSEE will cause such sublease and LESSEE’s assignment of such sublease to LESSOR to be registered in the International Registry to the fullest extent such interests may be registered. In addition, LESSEE will obtain in favor of LESSOR a power of attorney from the approved sublessee for purposes of the Cape Town Convention in the form of Exhibit I.
11.15 Wet Leases . The wet leasing of the Aircraft during the Lease Term (in which LESSEE and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without LESSOR’s consent, provided that (a) the Aircraft remains registered in the State of Registration, (b) the Aircraft will neither be based in nor operated in or to a Prohibited Country, (c) LESSEE provides LESSOR with either a certified copy of the applicable provisions from the wet lease agreement or an officer’s certificate confirming that LESSEE or the wet lessee will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the wet lease unless LESSEE shall be responsible under the Wet Lease for maintaining the same and (d) LESSEE complies with Article 18.10.
11.16 Continued Responsibility of LESSEE . LESSEE will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.

	 	35	 	ARTICLE 11
SUBLEASES	

 	ARTICLE 12	MAINTENANCE OF AIRCRAFT	
12.14 General Obligation . During the Lease Term and until the Termination Date, LESSEE alone has the obligation, at its expense, to maintain and repair the Aircraft, Engines, APU and all of the Parts (a) in accordance with the Maintenance Program, (b) in accordance with the rules and regulations of the Aviation Authority, (c) in accordance with Manufacturer’s type design, (d) in accordance with any other regulations or requirements necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft and meet the requirements at all times during the Lease Term and upon return of the Aircraft to LESSOR for issuance of a Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 (except during those periods when the Aircraft is undergoing maintenance or repairs as required or permitted by this Lease and to the extent in conflict with the requirements of the Aviation Authority) and (e) in the same manner and with the same care as used by LESSEE with respect to similar aircraft and engines operated by LESSEE and without in any way discriminating against the Aircraft as compared to such other aircraft.
12.15 Specific Engine Requirements .
 
12.15.1	No Engine will remain in an unserviceable condition for more than three (3) months, unless engine restoration or repair is ongoing and has not been suspended or delayed without reasonable cause and LESSEE is using commercially reasonable efforts to cause such Engine to be returned to service.	
 
12.15.2	When replacing Parts in an Engine, LESSEE will use original equipment manufacturer parts (“ OEM Parts ”). If LESSEE wishes to replace Parts in an Engine with parts which are not OEM Parts, LESSEE must obtain approval from LESSOR before such parts are installed, such approval not to be unreasonably withheld or delayed. If given, LESSOR’s approval will generally be given only for the installation of parts manufactured in accordance with FAR Part 21.303 (or its EASA equivalent) (“ PMA Parts ”) which are consumable parts such as brackets, gaskets and seals. The use of stationary and high energy rotating PMA Parts in the gaspath will not be approved by LESSOR. Any proposed repair to an OEM Part or PMA Part in an Engine which has been approved by an FAA Designated Engineering Representative (DER) must also be approved by LESSOR prior to performance of the repair, such LESSOR approval not to be unreasonably withheld or delayed.	

	 	36	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

12.15.3	LESSEE will not discriminate against the Engines with respect to build standards and life-limited Part replacements. Without limiting the foregoing, at any shop visit during which a Qualified Performance Restoration is performed, LESSEE will	
(a) build the Engine life-limited Parts to at least 6,000 cycles remaining and
(b) perform, at a minimum, a workscope sufficient to allow such Engine to achieve at least 10,000 hours and 6,000 cycles of operation following such shop visit.
 
12.15.4	With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will immediately notify LESSOR and the workscope will be submitted to LESSOR as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost; provided, however, that in the event that through no fault of LESSEE such work delays the return of the Aircraft to LESSOR or causes the Engine to be removed from LESSEE’s revenue service for a period in excess of the period the Engine would have been removed from revenue service had such additional work not been ordered, Article 23.13 shall be applicable and LESSEE and LESSOR will negotiate in good faith to expedite the return and minimize the costs incurred by the parties.	
 
12.15.5	LESSEE will not enter into any Engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine Manufacturer or any other Engine maintenance facility or organization without LESSOR’s prior written consent, which consent will not be unreasonably withheld or delayed. LESSEE will be responsible at its cost for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 23 even if such work is not covered by LESSEE’s Engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:	
(a) LESSOR will receive and retain the Engine Performance Restoration Reserves paid by LESSEE with respect to an Engine until an Engine shop visit has been completed and the applicable Engine has been released to LESSEE;
(b) LESSEE will pay the Engine maintenance facility directly for any costs in excess of the amount reimbursable from the Engine Performance Restoration Reserves, including any differential between the hourly Engine Performance Restoration Reserves payable by LESSEE to LESSOR and the hourly rates charged by the Engine maintenance facility; and
(c) LESSEE will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.

	 	37	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

12.16 Specific Obligations . Without limiting Article 12.1, LESSEE agrees that such maintenance and repairs will include but will not be limited to the specific items set forth in this Article 12.3.
 
12.16.1	LESSEE will perform all routine and non-routine maintenance work in accordance with the Maintenance Program.	
 
12.16.2	LESSEE will perform all applicable Airworthiness Directives, all mandatory service bulletins of Manufacturer, the Engine Manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft and all other service bulletins which must be performed in order to maintain the warranties on the Aircraft, Engines, APU and Parts.	
 
12.16.3	LESSEE will incorporate in the Aircraft all other service bulletins of Manufacturer, the Engine Manufacturer and other vendors which LESSEE schedules to adopt during the Lease Term for the rest of its Airbus A319 aircraft fleet. It is the intent of the parties that, in terms of service bulletin compliance (including method of compliance) and other maintenance matters, the Aircraft not be discriminated against in comparison to the rest of LESSEE’s fleet of similar aircraft unless LESSEE’s exclusion of the Aircraft is reasonable and occurs during the last year of the Lease Term.	
 
12.16.4	LESSEE’s Maintenance Program for the Aircraft will include a corrosion prevention and control program as recommended by Manufacturer and all discrepancies will be corrected in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
12.16.5	If LESSEE performs structural inspections or tasks on its Airbus A319 fleet on a sampling basis, then all such structural inspections or tasks will be performed on the Aircraft. LESSEE will provide LESSOR with written summaries of the sampling programs involving or affecting the Aircraft.	
 
12.16.6	All Aircraft Documentation will be in English or regularly translated into English and in an up-to-date status.	
 
12.16.7	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the time of most recent installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and	

	 	38	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

 	cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency which performed the last Overhaul or refurbishment.	
 
12.16.8	All Parts other than those referred to in Article 12.3.7 installed on the Aircraft will have FAA-acceptable or EASA-acceptable documentation demonstrating that such Parts were airworthy at the time of most recent installation on the Aircraft.	
 
12.16.9	All repairs and Modifications and the addition, removal or replacement of equipment, systems or components will be properly documented in accordance with the rules and regulations of the Aviation Authority and reflected in the Aircraft Documentation, including Manufacturer’s manuals as required by such rules and regulations. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9). All Modifications will also be accomplished in accordance with FAA-approved data.	
12.17 Replacement of Parts .
 
12.17.1	LESSEE, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair (BER) for use for any reason. In the ordinary course of maintenance, service, repair, Overhaul or testing, LESSEE may remove any Part provided that LESSEE replaces such Part as promptly as practicable. All replacement Parts will (a) be owned by LESSEE free and clear of all Security Interests (except Permitted Liens) of any kind or description (or, if not owned by LESSEE, LESSEE guarantees to LESSOR such title and clearance of all Security Interests), (b) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (c) meet the requirements of Articles 12.3.7 or 12.3.8, as applicable. So long as a substitution meets the requirements of the Maintenance Program and Aviation Authority, LESSEE may substitute for any Part a part that does not meet the requirements of the foregoing sentence if a complying Part cannot be procured or installed within the available ground time of the Aircraft and as soon as practicable having due regard to LESSEE’s operations, the noncomplying part is removed and replaced by a complying Part. Any replacement Parts will also comply with the requirements set forth in Article 12.2.2.	

	 	39	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

12.17.2	All Parts removed from the Aircraft will remain the property of LESSOR and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Aircraft) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to LESSOR under the Laws of the State of Registration and the lex situs . To the extent permitted by the Laws of the State of Registration and the lex situs , it is the intent of LESSOR and LESSEE that without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Aircraft as above provided, (a) title to the removed Part will thereupon vest in LESSEE, free and clear of all rights of LESSOR, (b) title to the replacement Part will thereupon vest in LESSOR free and clear of all rights of LESSEE and (c) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Aircraft.	
12.18 Removal of Engines .
 
12.18.1	If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or any other reason, title to such Engine will at all times remain vested in LESSOR.	
 
12.18.2	LESSEE will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place;
(b) LESSEE ensures that the identification plates referred to in Article 15 are not removed from any Engine upon such Engine being detached from the Aircraft; and
(c) title to the Engine remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the Engine or its attachment to or detachment from the Aircraft.
12.19 Removal of APU .
 
12.19.1	If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or for any other reason, title to the APU will at all times remain vested in LESSOR.	

	 	40	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

12.19.2	LESSEE will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place; and
(b) title to the APU remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the APU or its attachment to or detachment from the Aircraft.
12.20 Pooling of Engines, APU and Parts . With LESSOR’s prior written consent, not to be unreasonably withheld or delayed, LESSEE may subject the Engines, APU and Parts to normal interchange or pooling agreements with responsible international, scheduled commercial air carriers customary in the airline industry and entered into by LESSEE in the ordinary course of its business with respect to its entire Airbus A319 fleet so long as (a) in the case of pooling of an Engine or the APU, such Engine or APU is returned to LESSEE within two (2) months, (b) no transfer of title to the Engine or APU occurs, (c) all other terms of this Lease continue to be observed with respect to the Engines, APU or Parts, including Articles 8, 10, 12, 14, 15, 16, 17, 18 and 19 and (d) LESSEE continues to be fully responsible to LESSOR for the performance of all of its obligations hereunder.
12.21 Installation of Engines on other aircraft . Any Engine removed from the Aircraft may be installed on another aircraft in LESSEE’s fleet which utilizes engines of the same type as the Engine only if one of the situations described in this Article 12.8 exists:
 
12.21.1	LESSEE or LESSOR has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).	
 
12.21.2	LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter into an engines cooperation, recognition of rights or similar agreement in form and substance acceptable to LESSOR acting reasonably in which each party agrees to recognize one another’s rights in the engines. LESSEE will reimburse LESSOR and LESSOR’s Lender for their reasonable attorneys’ fees and reasonable documented costs in negotiating and finalizing engine cooperation agreement arrangements with LESSEE and its Creditors.	
 
12.21.3	Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor and its successors and assigns will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft. LESSEE hereby agrees that if LESSOR’s title to an Engine is in fact impaired under any such Creditor Agreement, such impairment will be a Total Loss of such Engine and the	

	 	41	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

 	provisions of Article 19.5 will apply. To the extent another Creditor Agreement contains such provisions, then LESSOR hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither LESSOR nor its successors or assigns will acquire or claim any right, title or interest in any engine in which LESSEE or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any airframe of such Creditor on which an Engine is installed.	
12.22 Modifications .
 
12.22.1	No modification, alteration or addition to or removal from the Aircraft (“ Modification ”) expected to cost over ***** or deviation from the Aircraft’s original type design or configuration will be made without the prior written consent of LESSOR, which consent will not be unreasonably withheld or delayed. Airworthiness Directives, Manufacturer’s service bulletins and other mandatory orders and service bulletins, compliance with which are required under this Lease, will not constitute “Modifications” and will not require LESSOR consent.	
 
12.22.2	LESSOR may review LESSEE’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by LESSOR, LESSEE will furnish LESSOR (at LESSEE’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All modifications incorporated on the Aircraft will be properly documented in the Aircraft Documentation as required by and shall, if required, be approved by the FAA and the Aviation Authority. All Modifications will also be accomplished in accordance with FAA and Aviation Authority-approved data. All major modifications will be supported by an STC FAA Form 8100-9 or FAA Form 8110-3.	
 
12.22.3	Notwithstanding any other provision of this Lease, no modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.	
 
12.22.4	No modification will be made by LESSEE if an Event of Default exists and is continuing hereunder.	
 
12.22.5	Unless otherwise agreed by LESSOR in writing, all permanent or structural modifications will forthwith become a part of the Aircraft and LESSEE relinquishes to LESSOR all rights and title thereto. However, all temporary and non-structural modifications will remain the property of LESSEE and, at LESSOR’s request and LESSEE’s cost, will be removed from the Aircraft prior to return of the Aircraft, with	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	42	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

 	LESSEE restoring the Aircraft to the condition it was in prior to the modification in a manner cosmetically acceptable to LESSOR acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without LESSOR’s permission after the occurrence of an Event of Default hereunder and immediately upon the occurrence and during the continuance of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such modifications will immediately vest in LESSOR unless and until such Event of Default is cured to LESSOR’s reasonable satisfaction.	
 
12.22.6	LESSOR will bear no liability for the cost of modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.	
12.23 Performance of Work by Third Parties .
 
12.23.1	All off-wing maintenance and repair work on an Engine, the APU and the Landing Gear must be performed by an FAA-approved repair station unless otherwise approved in advance by LESSOR.	
 
12.23.2	Whenever maintenance or repair work on the Airframe or on-wing maintenance or repair work on an Engine or the APU will be performed by a Person other than LESSEE, such Person must be an FAA-approved repair station.	
12.24 Reporting Requirements .
 
12.24.1	Commencing with a report furnished ten (10) days after the end of the calendar month in which Delivery occurs, LESSEE will furnish to LESSOR a Monthly Report in English in the form attached hereto as Exhibit M. Each Monthly Report will be furnished within ten (10) days after the end of each calendar month, except that the Monthly Report pertaining to the last month (or any portion thereof) of flying will be furnished to LESSOR on the Termination Date.	
 
12.24.2	On each anniversary of the Delivery Date, following each twenty (20)-month period during the Lease Term, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	
 
12.24.3	From time to time, LESSEE will provide LESSOR with such other technical information or documents as LESSOR may reasonably request.	
12.25 Maintenance Policies and Procedures Manuals . At LESSOR’s request for the purposes of demonstrating to LESSOR how the Aircraft has been maintained, LESSEE at reasonable times without disruption of its operations and not more often that once annually, provide LESSOR, at LESSOR’s cost (unless an Event of Default has occurred and is continuing),

	 	43	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

with on site access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of the LESSEE and that the same will be only utilized as set forth in this Article 12.12 and Article 23.6.
12.26 LESSOR Inspection Rights .
 
12.26.1	At any time (subject to Article 12.13.4), LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) will have the right to inspect and take photographs of the Aircraft and review the Aircraft Documentation.	
 
12.26.2	LESSEE will give LESSOR reasonable written notice before the Aircraft undergoes any “C” or equivalent check.	
 
12.26.3	If the Aircraft is at a third party maintenance facility, LESSEE will use reasonably efforts to cause such facility to allow LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) to inspect and take photographs of the Aircraft and review the Aircraft Documentation, notwithstanding the fact that LESSEE (as the party opening the work order) is considered the “customer” of such facility, subject, in each case, to the rules, regulations and conditions of such maintenance facility and compliance by LESSOR and/or its authorized representatives or agents therewith.	
 
12.26.4	LESSOR will provide LESSEE with reasonable notice prior to any inspection by LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) and will coordinate with LESSEE and/or any applicable third party maintenance facility so as to cause minimum practical disturbance to the operation or maintenance of the Aircraft or the personnel of LESSEE or the applicable third party maintenance facility.	
 
12.26.5	In the event that LESSOR disagrees with or otherwise disputes any information provided by LESSEE with respect to the Aircraft (unless LESSOR reasonably believes that LESSEE would not provide the information), LESSEE expressly authorizes and consents to allowing Manufacturer, the Engine Manufacturer and their field service representatives to provide LESSOR with information about the condition and maintenance of the Aircraft (including the Aircraft Documentation) on an ongoing basis. Manufacturer, the Engine Manufacturer and their field service representatives may report their findings and provide documentation to LESSOR without the need for any further notice to or authorization from LESSEE.	
 
12.26.6	LESSOR will have no duty to make any inspection of the Aircraft and will not incur any liability or obligation by reason of (and LESSEE’s indemnity obligations pursuant to Article 17 will apply notwithstanding) LESSOR and/or its authorized agents or representatives making or not making any such inspection or by reason of any reports LESSOR receives regarding the Aircraft.	

	 	44	 	ARTICLE 12
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 	ARTICLE 13	USE OF RESERVES	
13.12 Airframe Reserves (6 Year Check) . LESSOR will reimburse LESSEE the Airframe Reserves (6 Year Check) that have accrued in such account from Delivery to the commencement date of the “6Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.13 Airframe Reserves (12 Year Check) . In the event that LESSEE performs a “12Y” check on the Aircraft (including as part of a Return Check pursuant to Article 23.10.1), LESSOR will reimburse LESSEE ***** of the Airframe Reserves (12 Year Check) and Airframe Reserves (6 Year Check) that have accrued and remain in such accounts on the commencement date of the “12Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.14 Engine Performance Restoration Reserves . LESSOR acknowledges that LESSEE has entered into a maintenance cost per flight hour agreement with the Engine Manufacturer (the “ FHA Agreement ”). LESSEE acknowledges that it is required under this Lease to pay to LESSOR the Engine Performance Restoration Reserves even if the Engines are placed under the FHA Agreement. With respect to each Engine, LESSOR will reimburse LESSEE from the Engine Performance Restoration Reserves as follows.
 
13.14.1	For the first Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the total hours that such Engine has accumulated during the Lease Term times ***** per Engine flight hour.	
 
13.14.2	For the second Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the amount present (at the time of removal of the Engine) in the particular Engine Performance Restoration Reserves account for such Engine.	
 
13.14.3	For the avoidance of doubt, the reimbursements shall remain subject to Article 16.1.	
13.15 Engine LLP Reserves . LESSOR will reimburse LESSEE from the Engine LLP Reserves for an Engine for the actual out-of-pocket materials cost without overhead, mark-up or profit factor, and reduced by the amount of any “Waste Expense” (if applicable), associated with the replacement of life-limited Parts in such Engine during completed Engine shop visits (i.e. heavy maintenance visits), with work performed for all other causes excluded, including those causes set forth in Article 13.8. “ Waste Expense ” means the product of (a) the number of unused cycles on a life-limited Part that is in excess of ***** of such part’s approved life when
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	45	 	ARTICLE 13
USE OF RESERVES	

new, at the time such life-limited Part is removed for replacement, multiplied by (b) the quotient of the cost of the new replacement life-limited Part divided by the number of cycles which constitutes the approved life of such life-limited Part. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement for replacement of life-limited Parts in an Engine will be made up to the amount in the Engine LLP Reserves applicable to such Engine at the time of removal of such Engine.
13.16 Landing Gear Reserves . LESSOR will reimburse LESSEE ***** of the Landing, Gear Reserves that have accrued in such account from Delivery to the commencement date of the Overhaul of the Landing Gear for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.17 APU Reserves . LESSOR will reimburse LESSEE from the APU Reserves for the actual cost of a completed medium or heavy repair workscope in accordance with the APU manufacturer’s approved manuals, with work performed for all other causes excluded, including those causes set forth in Article 13.8. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement will be made up to the amount in the APU Reserves at the time of removal of the APU.
13.18 Reimbursement .
 
13.18.1	LESSEE will be entitled to reimbursement from the Reserves after the work is completed and the Airframe, Engine, Landing Gear or APU, as applicable, has left the repair agency, by submitting reasonable evidence (which shall include the items below) of performance of such work and, if requested by LESSOR, an invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim within six (6) months after completion of the work. If LESSEE seeks reimbursement from the Reserves for work performed by LESSEE, such work will be charged at LESSEE’s out-of-pocket and unburdened labor and material costs. LESSEE may only seek reimbursement from the Airframe Reserves one time in any calendar year.	
 
13.18.2	For the Airframe, reasonable evidence of performance includes a list of all routine and non-routine tasks performed with corresponding references to the MPD and an itemized labor and materials report.	
 
13.18.3	For an Engine and the APU, reasonable evidence of performance includes (a) an original invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim, (b) a description of the reason for removal, (c) the date of removal and the aircraft removed from (which may be the Aircraft), (d) the total hours and cycles at the time	

	 	46	 	ARTICLE 13
USE OF RESERVES	

 	of removal, (e) the hours and cycles since last shop visit, (f) a full description of the final workscope, (g) a description of the type of maintenance performed (including on each module, if applicable), (h) complete disk records for the Engine both prior to and after the shop visit, (i) a shop findings report, (j) a copy of any test cell performance data, (k) an on and off log of Parts (configuration listing) tracked by LESSEE and the repair facility, (l) a current service bulletin and Airworthiness Directive listing, (m) written verification from the repair facility that the Engine or APU has been released and shipped from the repair facility back to LESSEE, (n) the status of all warranty claims and (o) an itemization of all concessions, warranty credits or other credits which have been or will be provided for work accomplished on the Engine or APU during the applicable shop visit (or, if none, a written statement from LESSEE stating that it has not received and does not have pending any such concessions, warranty credits or other credits).	
 
13.18.4	For the Landing Gear, reasonable evidence of performance includes (i) a release tag from the overhaul facility and all associated build records, including traceability on all life-limited parts, and (ii) the total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul.	
13.19 Reimbursement Adjustment .
 
13.19.1	By way of example, among the exclusions from reimbursement are work or items:	
(a) resulting from repairs actually covered by LESSEE’s or a third party’s insurance (deductibles being for the account of LESSEE and not reimbursable) or covered by warranties to the extent of recovery by LESSEE under such insurance or warranties; or
(b) required as a result of an Airworthiness Directive, manufacturer’s service bulletin (unless approved in advance by LESSOR, which approval will not be unnecessarily withheld or delayed), negligence, non-routine or non-scheduled maintenance, faulty maintenance or installation, improper operations, misuse, accident, incident, ingestion (foreign object damage) or other accidental cause.
 
13.19.2	All invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible third parties or other sources, such as insurance proceeds, manufacturer’s warranties, guarantees, concessions and credits (including, with respect to Engines, credits due to life remaining on any removed Engine Parts). Notwithstanding anything to the	

	 	47	 	ARTICLE 13
USE OF RESERVES	

 	contrary herein, in the event that any accident, incident, injection incident or other accidental cause necessitates a repair and during such repair the workscope performed results in performance restoration to the Engine or installation of LLPs with more life remaining, the performance of such workscope may be claimed by LESSEE from the Engine Performance Restoration Reserves and/or Engine LLP Reserves.	
13.20 Costs in Excess of Reserves . LESSEE will be responsible for payment of all costs in excess of the amounts reimbursed hereunder. If on any occasion the available balance in the Airframe Reserves, Engine Performance Restoration Reserves for a particular Engine, Engine LLP Reserves for a particular Engine, Landing Gear Reserves or APU Reserves (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the Landing Gear and the APU) is insufficient to satisfy a claim for reimbursement in respect of the Airframe, such Engine, the Landing Gear or the APU, as applicable, the shortfall may not be carried forward or made the subject of any further claim for reimbursement.
13.21 Reimbursement after Termination Date . LESSEE may not submit any invoice for reimbursement from the Reserves after the Termination Date unless on or prior to such date LESSEE has notified LESSOR in writing that such outstanding invoice will be submitted after the Termination Date and the anticipated amount of such invoice. So long as LESSEE has provided such notice to LESSOR, LESSEE may then submit such outstanding invoice at any time within six (6) months after the Termination Date. Subject to the foregoing, any balance remaining in the Reserves on the Termination Date, including termination on account of a Total Loss of the Aircraft, will be retained by LESSOR.
13.22 Total Loss . Upon receipt by LESSOR of the Agreed Value and all other amounts then due by LESSEE, LESSOR shall return to LESSEE ***** of all amounts then held by LESSOR as reserves. In the event of a Total Loss and payment of the Agreed Value in accordance with the terms of this Article 13.11, LESSEE agrees that no invoices to LESSOR will be reimbursed.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	48	 	ARTICLE 13
USE OF RESERVES	

 	ARTICLE 14	TITLE AND REGISTRATION	
14.5 Title to the Aircraft . Title to the Aircraft will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a “true lease”. LESSEE will have no right, title or interest in the Aircraft except as provided in this Lease.
14.6 Registration of Aircraft . LESSEE at its sole cost and expense will (a) register and maintain registration of the Aircraft in the name of LESSOR at the register of aircraft in the State of Registration and (b) from time to time take all other steps then required by Law (including the Geneva Convention or the Cape Town Convention if and as applicable) or as LESSOR may reasonably request to protect and perfect LESSOR’s interest in the Aircraft and this Lease in the State of Registration or in any other jurisdictions in or over which LESSEE may operate the Aircraft.
14.7 Cape Town Convention . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then:
 
14.7.1	LESSOR may elect to cause the interests of LESSOR in this Lease, the other Operative Documents and the Aircraft (including in the Engines) to be registered in the International Registry to the fullest extent such interests may be registered. At LESSOR’s request, LESSEE will provide reasonable assistance and cooperation to LESSOR in order to procure such registration, including consenting to or causing such registration to be made, at LESSOR’s election, as a prospective international interest or an international interest and via a designated entry point (as such terms are used in the Cape Town Convention).	
 
14.7.2	At LESSOR’s request, LESSEE will perform such additional acts and execute and deliver such agreements and instruments as may be reasonably determined by LESSOR to be necessary or appropriate to (a) protect and perfect LESSOR’s interest in the Aircraft, this Lease and the other Operative Documents under the Cape Town Convention and (b) enhance the enforceability of the commercial agreements of LESSEE and LESSOR under the Cape Town Convention to the greatest extent permitted by the Cape Town Convention. Actions to be requested by LESSOR may include entering into amendments to this Lease or the other Operative Documents as are necessary to constitute a prospective international interest or an international interest under the Cape Town Convention.	
 
14.7.3	Unless LESSEE obtains LESSOR’s prior written consent, LESSEE undertakes that it will not consent to or permit any Person other than LESSOR and LESSEE (as	

	 	49	 	ARTICLE 14
TITLE AND REGISTRATION	

 	permitted under this Lease) to make any International Registry filings (including prospective filings) under the Cape Town Convention in relation to this Lease, the other Operative Documents or the Aircraft (including the Engines).	
 
14.7.4	LESSEE will be responsible for all costs and expenses arising out of the requirements of this Article 14.3.	
14.8 Filing of this Lease . To the extent permitted by Law and in accordance with the requirements of the Law from time to time, LESSEE at its sole cost and expense will cause this Lease to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other offices necessary to protect LESSOR’s rights hereunder.

	 	50	 	ARTICLE 14
TITLE AND REGISTRATION	

 	ARTICLE 15	IDENTIFICATION PLATES	
LESSOR will affix and LESSEE will at all times maintain on the Airframe and each Engine the identification plates containing the following legends or any other legend requested by LESSOR in writing:
15.3 Airframe Identification Plates .

Location:	  	One to be affixed to the Aircraft structure above the forward entry door adjacent to and not less prominent than that of Manufacturer’s data plate and another in a prominent place on the flight deck.	
		
Size:	  	No smaller than 2” x 3”.	
		
Legend:	  	“THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION.	
		
	  	MANUFACTURER’S SERIAL NO: {MSN of Aircraft, if known}	
		
	  	OWNER’S ADDRESS:	
		
	  	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Fax: (310) 788-1990”	
15.4 Engine Identification Plates .

Location:	  	The legend on the plate must be no less prominent than the Engine data plate and must be visible. Size: No smaller than 1” x 4”.	
		
Legend:	  	“THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION, LOS ANGELES, CALIFORNIA, USA.”	

	 	51	 	ARTICLE 15
IDENTIFICATION PLATES	

 	ARTICLE 16	TAXES	
16.9 General Obligation of LESSEE . Except as set forth in Article 16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless LESSOR on a full indemnity basis from, all license and registration fees and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon LESSEE, LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority in the U.S., Mexico or any foreign country or by any international taxing authority (including the City or County of Los Angeles), upon or with respect to, based upon or measured by any of the following (collectively, “ Taxes ”):
(a) the Aircraft, Engines, APU or any Parts;
(b) the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;
(c) this Lease, the payments due hereunder and the terms and conditions hereof; and
(d) the ownership, financing, delivery, import or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.
16.10 Exceptions to Indemnity . The indemnity provided for in Article 16.1 does not extend to any of the following Taxes:
(a) Taxes imposed by the U.S. or the State of California or the City or County of Los Angeles on the gross or net income, gross receipts, gains, profits, capital or net worth of LESSOR;
(b) Taxes attributable to the period prior to Delivery or after the Termination Date;
(c) Taxes attributable to LESSOR’s gross negligence, willful misconduct or breach of this Lease or any other agreement, document or instrument entered into and/or delivered in connection herewith by or between LESSOR and LESSEE (unless such breach was caused by an act or omission by LESSEE);

	 	52	 	ARTICLE 16
TAXES	

(d) Taxes imposed upon LESSOR by any jurisdiction which would have been imposed upon LESSOR had LESSOR and LESSEE not entered into and consummated the transactions contemplated by this Lease and other Taxes imposed upon LESSOR as a result of any past, present or future activities of LESSOR in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;
(e) Taxes imposed upon LESSOR as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Person claiming by or through LESSOR of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease;
(f) Taxes attributable to a LESSOR’s Lien, to the extent that such Taxes would not have arisen or been assessed in the absence of a LESSOR’s Lien;
(g) Taxes or additional or incremental Taxes and penalties or interest thereon that would not have been imposed but for a failure of LESSOR to provide, following a reasonable request therefor, information necessary for LESSEE to complete and file any tax return or request an otherwise legally available exemption or which result from any failure by LESSOR to file any return which LESSOR is required by Law to file in respect of any such Tax; but only if such information was reasonably available to LESSOR and, in the case of certificates, documentation or other evidence requiring disclosure of knowledge of factual information (such as the location of an Aircraft) that is known to LESSEE but not readily ascertainable by such LESSOR, only if LESSEE provides such information to LESSOR in a timely manner and at LESSEE’s cost;
(h) Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Tax under this Article 16 or Article 25.6, Taxes for which LESSOR actually receives payment from LESSEE for under any provision of this Lease and the payment of which would otherwise constitute a double recovery;
(i) Taxes which are not yet due or are being contested in good faith by LESSOR or any Person claiming by or through LESSOR by appropriate proceedings, during the pendency of such proceedings; or
(j) Taxes which constitute the normal operating expense or overhead of LESSOR.

	 	53	 	ARTICLE 16
TAXES	

16.11 After-Tax Basis . The amount which LESSEE is required to pay with respect to any Taxes indemnified against under Article 16.1 is an amount sufficient to restore LESSOR on an after-tax basis to the same position LESSOR would have been in had such Taxes not been incurred.
16.12 Timing of Payment . Any amount payable to LESSOR pursuant to this Article 16 will be paid within ten (10) Business Days after receipt of a written demand therefor from LESSOR accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable; provided, however, that such amount need not be paid by LESSEE prior to the earlier of (a) the date any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts which are being contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such contest is finally resolved.
16.13 Contests . If a claim is made against LESSOR for Taxes with respect to which LESSEE is liable for a payment or indemnity under this Lease, LESSOR will promptly give LESSEE notice in writing of such claim; provided, however, that LESSOR’s failure to give notice will not relieve LESSEE of its obligations hereunder except to the extent such failure materially impairs or precludes LESSEE’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay. So long as (a) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, (b) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of independent tax counsel that a reasonable basis exists for contesting such claim and (c) adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted, then LESSOR at LESSEE’s written request will in good faith, with due diligence and at LESSEE’s expense, contest (or permit LESSEE to contest in the name of LESSEE or LESSOR) the validity, applicability or amount of such Taxes.
16.14 Refunds . Upon receipt by LESSOR of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 5.8) which LESSEE has paid, LESSOR will pay to LESSEE the net amount of such Taxes refunded.
16.15 Cooperation in Filing Tax Returns . LESSEE and LESSOR will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.
For the avoidance of doubt, LESSEE will for purposes of the calculation and its payment of the Mexican assets tax (including without limitation Article 25 of the Assets Tax Law Regulation), elect to treat its rights on the Aircraft pursuant to this Lease as an “asset”.
16.16 Survival of Obligations . The representations, warranties, indemnities and agreements of LESSEE provided for in this Article 16 will survive the Termination Date.

	 	54	 	ARTICLE 16
TAXES	

 	ARTICLE 17	INDEMNITIES	
17.11 General Indemnity . Except as set forth in Article 17.2, LESSEE agrees to indemnify and hold harmless LESSOR and its officers, directors, employees, agents and shareholders (individually an “ Indemnitee ” and collectively “ Indemnitees ”) from any and all liabilities, obligations, losses, damages, fines, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “ Expenses ”) which are imposed on, incurred by or asserted against any Indemnitee or the Aircraft by any Person other than LESSEE and which are in any way relating to, based on or arising out of any of the following:
(a) the operation, possession, use, non-use, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by LESSEE, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;
(b) fuel, airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges payable for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, during the Lease Term and until the Termination Date;
(c) the manufacture, design, acceptance, rejection, delivery, return, sale after an Event of Default, import, export, condition, repair, modification, servicing, rebuilding, enforcement of warranties whether in LESSOR’s or LESSEE’s name, customer support, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, reregistration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part, including under a pooling or interchange arrangement prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;

	 	55	 	ARTICLE 17
IDEMNITIES	

(d) the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or
(e) as a consequence of any Default or Event of Default by LESSEE, without duplication of remedies or recovery.
The foregoing indemnity by LESSEE is intended to include and cover any Expense to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Expense does not fall within any of the exceptions listed in Article 17.2.
17.12 Exceptions to General Indemnities . The indemnity provided for in Article 17.1 will not extend to Expenses of any Indemnitee to the extent resulting from or arising out of any of the following:
(a) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to have resulted from the willful misconduct of such Indemnitee;
(b) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to be attributable to acts or events which occur after the Termination Date and return of the Aircraft to LESSOR in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of LESSEE;
(c) Expenses representing Taxes, it being acknowledged that the terms of Article 16 apply exclusively to LESSEE’s indemnity obligations with respect to Taxes;
(d) Expenses due to the breach by LESSOR of its covenant of quiet enjoyment pursuant to Article 21.2 (except to the extent covered by the insurances LESSEE is required to carry pursuant to Article 18);
(e) Expenses which constitute ordinary and usual operating or overhead expenses of LESSOR or any other Indemnitee; or
(f) Expenses attributable to a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Indemnitee of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease.

	 	56	 	ARTICLE 17
IDEMNITIES	

17.13 After-Tax Basis . The amount which LESSEE will be required to pay with respect to any Expense indemnified against under Article 17.1 will be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the same position such Indemnitee would have been in had such Expense not been incurred.
17.14 Timing of Payment . It is the intent of the parties that each Indemnitee will have the right to indemnification for Expenses hereunder as soon as a claim is made and as soon as an Expense is incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17 within ten (10) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity.
17.15 Subrogation . Upon the payment in full of any indemnity pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.
17.16 Notice . Each Indemnitee and LESSEE will give prompt written notice one to the other of any liability of which such party has knowledge for which LESSEE is, or may be, liable under Article 17.1; provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 17 except to the extent that LESSEE has been materially prejudiced by the failure to provide such notice.
17.17 Refunds . If any Indemnitee obtains a recovery of all or any part of any amount which LESSEE has paid to such Indemnitee, such Indemnitee will pay to LESSEE the net amount recovered by such Indemnitee.
17.18 Defense of Claims . Unless a Default or Event of Default has occurred and is continuing, LESSEE and its insurers will have the right (in each such case at LESSEE’s sole expense) to investigate or, provided that LESSEE or its insurers have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim covered by insurance for which indemnification is sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE or its insurers with respect thereto. If LESSEE or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at LESSEE’s expense.
17.19 No Double Recovery . Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Expense under both this Article 17 and Article 25.6, LESSOR will not be entitled to actually receive payment from LESSEE for the same Expense twice.
17.20 Survival of Obligation . Notwithstanding anything in this Lease to the contrary, the provisions of this Article 17 will survive the Termination Date and continue in full force and effect notwithstanding any breach by LESSOR or LESSEE of the terms of this Lease, the termination of the lease of the Aircraft to LESSEE under this Lease or the repudiation by LESSOR or LESSEE of this Lease.

	 	57	 	ARTICLE 17
INDEMNITIES	

 	ARTICLE 18	INSURANCE	
18.18 Categories of Insurance . Throughout the Lease Term and until the Termination Date, LESSEE will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through such brokers and with such insurers as may be acceptable to LESSOR, such acceptance not to be unreasonably withheld or delayed, in London or New York or such other insurance markets as mutually agreed upon by the parties.
18.19 Write-back of any Date Recognition Exclusion . In the event any of LESSEE’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000-related problems, LESSEE at its cost will obtain for the benefit of itself, and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusion.
18.20 Write-backs of LSW555.D and AVN48C Exclusions . In the event that a write-back of the exclusions (losses due to causes such as dirty bombs, electromagnetic weapons, radioactive contamination and chemical, biological and/or biochemical hazards) to the standard London policy forms LSW555.D and, if issued, AVN48C becomes available at commercially reasonable terms, LESSEE at its cost will obtain for the benefit of itself and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusions to the extent and with policy limits consistent with general market practices applicable to similarly situated carriers or, if greater, as maintained in respect of any other aircraft of like make and model in LESSEE’s fleet.
18.21 Installation of Third Party Engine . If LESSEE installs an engine not owned by LESSOR on the Aircraft, either (a) LESSEE’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the LESSEE to such third party engine owner.
18.22 LESSOR Coverage for LESSEE’s Employees . LESSOR and the other additional insureds will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.

	 	58	 	ARTICLE 18
INSURANCE	

18.6 Insurance for Indemnities . The insurance referred to in Article 18.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 17 and LESSEE will maintain such insurance of the indemnities for a period of two (2) years following the Termination Date.
18.7 Insurance required by Manufacturer . During the Lease Term, LESSEE will carry any insurance required by Manufacturer in connection with the assignment of any Manufacturer warranties, customer support or product support to LESSEE.
18.8 Renewal . From time to time when reasonably requested by LESSOR, LESSEE will confirm to LESSOR regarding the status of the renewal or replacement of LESSEE’s insurance. Prior to or on the expiration or termination date of any insurance required hereunder, LESSEE will provide LESSOR with fax or e-mail confirmation from LESSEE’s insurance brokers that such insurance has been renewed or has been replaced in a manner consistent with the requirements hereof and that certificates of insurance evidencing the renewal or replacement of such insurance and complying with Exhibit C will be issued on the termination date of the prior certificate. Within seven (7) days after such renewal, LESSEE will furnish its brokers’ certificates of insurance to LESSOR.
18.9 Assignment of Rights by LESSOR . If LESSOR assigns all or any of its rights under this Lease or otherwise disposes of any interest in the Aircraft to any other Person, LESSEE will, upon written request, procure that such Person, in each case as permitted by this Lease, hereunder be added as loss payee and/or additional assured in the policies effected hereunder and, if applicable substituted as Loss Payee under the hull insurance and enjoy the same rights and insurance enjoyed by LESSOR under such policies. LESSOR will nevertheless continue to be covered by such policies.
18.10 Insurance for Wet Lease Operations . In the event LESSEE is performing wet lease operations with the Aircraft pursuant to Article 11.7 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance will meet the requirements of Exhibit C, including with respect to the amounts of coverage, naming of LESSOR as an additional insured and inclusion of the other endorsements described in Exhibit C. Moreover, LESSEE will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, LESSOR will receive certificates of insurance from the insurance brokers for LESSEE and, if applicable, the wet lessee evidencing such coverages.
18.11 Other Insurance . In the event of a material change in standard market practices with respect to air carriers similarly situated to LESSEE occurs following Delivery, LESSOR may, acting reasonably and upon consultation with LESSEE’s designated brokers and other

	 	59	 	ARTICLE 18
INSURANCE	

LESSORS of Aircraft within LESSEE’s fleet from time to time by notice to LESSEE require LESSEE at LESSEE’s expense to effect such other insurance or such variations to the terms of the existing insurance as may then be customary in the airline industry for aircraft of the same type as the Aircraft operated by carriers similarly situated to LESSEE and at the time commonly available in the insurance market on commercially reasonable terms.
18.12 Information . LESSEE will provide LESSOR with any information reasonably requested by LESSOR from time to time concerning the insurance maintained with respect to the Aircraft or in connection with any claim being made or proposed to be made thereunder, except for information regarding insurance premiums and the level of insurance LESSEE has obtained above the requirements of this Lease, so long as such level is not in violation of this Lease.
18.13 Currency . All proceeds of insurance pursuant to this Lease will be payable in Dollars except as may be otherwise agreed by LESSOR.
18.14 Grounding of Aircraft . If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, LESSEE will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again.
18.15 Failure to Insure . If at any time LESSEE fails to maintain insurance in compliance with this Article 18, LESSOR will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):
(a) to pay any premiums due or to effect or maintain insurance satisfactory to LESSOR or otherwise remedy such failure in such manner as LESSOR considers appropriate (and LESSEE will upon demand reimburse LESSOR in full for any amount so expended in that connection); or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by LESSOR, until such failure is remedied to LESSOR’s satisfaction.
18.16 Reinsurance . Any reinsurance will be maintained with reinsurers and brokers acceptable to LESSOR, acting reasonably. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to LESSOR:
(a) the same terms as the original insurance;
(b) a cut-through and assignment clause satisfactory to LESSOR, acting reasonably; and
(c) payment will be made notwithstanding (i) any bankruptcy, insolvency, liquidation or dissolution of any of the original insurers and/or (ii) that the original insurers have made no payment under the original insurance policies.

	 	60	 	ARTICLE 18
INSURANCE	

18.17 Limit on Hull in favor of LESSEE . LESSEE may carry hull all risks or hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to LESSOR) only to the extent such excess insurance which would be payable to LESSEE in the event of a Total Loss does not exceed ***** of the Agreed Value and only to the extent that such additional insurance will not prejudice the insurances required in this Lease or the recovery by LESSOR thereunder. LESSEE agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	61	 	ARTICLE 18
INSURANCE	

 	ARTICLE 19	LOSS, DAMAGE AND REQUISITION	
Throughout the Lease Term and until the Termination Date, LESSEE will bear all risk of loss, theft, damage and destruction to the Aircraft.
19.10 Definitions . In this Article 19 and this Lease:
“ Agreed Value ” means an amount equal to ***** of the Manufacturer’s list price for the Aircraft on the Delivery Date, based upon the invoice provided by Manufacturer; provided, however, that the Agreed Value will be decreased by ***** of such amount on each yearly anniversary of the Delivery Date.
“ Net Total Loss Proceeds ” means the Total Loss Proceeds actually received by LESSOR following a Total Loss, less any reasonable legal and other out-of-pocket expenses, taxes or duties incurred by LESSOR in connection with the collection of such proceeds.
“ Total Loss ” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “ Total Loss Date ” means the date set forth in parenthesis after each Total Loss:
(a) destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);
(b) actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or forty five (45) days after the date of notice to LESSEE’s brokers or insurers claiming such total loss);
(c) requisition of title, confiscation, forfeiture or any compulsory acquisition or other similar event (the date on which the same takes effect);
(d) sequestration, detention, seizure or any similar event for more than forty five (45) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);
(e) requisition for use for more than one hundred eighty (180) consecutive days, except as set forth in Article 19.9 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	62	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

(f) in the case of an Engine, the event described in Article 12.8.3 (the date on which the same takes effect);
(g) any sale of the Aircraft in connection with Eurocontrol or other navigation or airport charges (the date on which the sale occurs);
(h) any sale of the Aircraft in connection with a LESSEE bankruptcy, whether by an administrator, trustee or court (the date on which the intent to sell the Aircraft becomes known); or
(i) any other occurrence not permitted under this Lease which deprives LESSEE of use or possession for a period of sixty (60) consecutive days or longer (the 60 th day of such period).
“ Total Loss Proceeds ” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.
19.11 Notice of Total Loss . LESSEE will notify LESSOR in writing within two (2) Business Days after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.
19.12 Total Loss of Aircraft or Airframe . If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:
 
19.12.1	After the Total Loss Date and until receipt by LESSOR of the Agreed Value and all other amounts then due under this Lease, LESSEE will continue to pay Rent and the parties will perform all of their other obligations under this Lease.	
 
19.12.2	On the date which is the earlier of the following dates:	
(a) the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by LESSEE’s insurance underwriters or brokers and
(b) the date which falls thirty (30) days after the Total Loss Date,
LESSEE will pay to LESSOR an amount equal to the sum of:
(a) the Agreed Value and
(b) all other amounts then due and payable by LESSEE under this Lease, less an amount equal to the Net Total Loss Proceeds received by LESSOR by such date.

	 	63	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

19.12.3	LESSOR will apply the Net Total Loss Proceeds and any amounts received from LESSEE pursuant to Article 19.3.2 as follows:	
(a) first, in discharge of any unpaid Rent and any other amounts accrued and unpaid up to the date of LESSOR’s receipt of the Agreed Value;
(b) second, in discharge of the Agreed Value; and
(c) third, payment of the balance, if any, to LESSEE.
 
19.12.4	Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3, provided no Default or Event of Default has occurred and is continuing, this Lease will terminate except for LESSEE’s obligations under Articles 10.5, 16 and 17 which survive the Termination Date.	
FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE, ENGINES OR THE APU.
19.13 Surviving Engine(s) . If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of LESSEE (subject to agreement of relevant insurers) and on receipt of all monies due under Article 19.3 and payment by LESSEE of all airport, navigation and other charges on the Aircraft, LESSOR will transfer all its right, title and interest in the surviving Engine(s) to LESSEE, but without any responsibility, condition or warranty on the part of LESSOR other than as to freedom from any LESSOR’s Lien.
19.14 Total Loss of Engine and not Airframe .
 
19.14.1	Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such Engine as soon as reasonably possible by duly conveying to LESSOR title to another engine from LESSEE (or another Person with a net worth at least equal to that of LESSEE) (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having	

	 	64	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	a value and utility at least equal to the Engine which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the older of the two Engines delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date, and (d) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement engine will be an “Engine” as defined in this Lease and the Engine which sustained such Total Loss will cease to be an “Engine”.	
 
19.14.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement Engine becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed Engine. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed Engine will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	
 
19.14.3	Notwithstanding Articles 19.5.1 and 19.5.2, if at the time of a Total Loss of an Engine not installed on the Aircraft or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSOR and LESSEE are parties to a spare engine lease pursuant to which LESSOR is leasing a spare engine to LESSEE of the same model and type as the Engine which has suffered such Total Loss, LESSOR will receive from LESSEE the replacement cost of the Engine instead of accepting a replacement engine. One (1) of such LESSOR spare engines will then be substituted under this Lease for the Engine which suffered such Total Loss and the applicable spare engine lease will terminate.	
19.15 Total Loss of APU .
 
19.15.1	Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such APU as soon as reasonably possible by duly conveying or causing to be conveyed to LESSOR title to another auxiliary power unit (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the APU delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date and (d) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or	

	 	65	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined in this Lease and the auxiliary power unit which sustained such Total Loss will cease to be the “APU”.	
 
19.15.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement APU becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed APU. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed APU will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	
19.16 Other Loss or Damage .
 
19.16.1	If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of LESSEE under this Lease (including payment of Rent) will continue in full force.	
 
19.16.2	In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, LESSEE will at its sole cost and expense fully and with reasonable promptness repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. All repairs will be performed in a manner which preserves and maintains all warranties and service life policies to the same extent as they existed prior to such loss or damage. LESSEE will notify LESSOR forthwith of any loss, theft or damage to the Aircraft for which the cost of repairs is estimated to exceed *****, together with LESSEE’s proposal and timetable for carrying out the repair. In the event that LESSOR does not agree with LESSEE’s proposal for repair, LESSOR will so notify LESSEE within two (2) Business Days after its receipt of such proposal. LESSEE and LESSOR will then consult with Manufacturer and LESSEE and LESSOR agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, LESSEE will carry out the repairs in accordance with the directions of LESSOR. If the Aircraft is airworthy or the Engine or APU serviceable notwithstanding the loss or damage, LESSEE will repair such Aircraft, Engine or APU, as the case may be, within the time frame reasonably established by LESSOR given the circumstances.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	66	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

19.17 Copy of Insurance Policy . Promptly after the occurrence of a partial loss or Total Loss of the Aircraft, an Engine or the APU, LESSEE will provide LESSOR with a copy of LESSEE’s insurance policy, provided, however, that LESSEE may redact from such copy the commercial terms of its arrangement with the insurer.
19.18 Government Requisition . If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, LESSEE will promptly notify LESSOR of such requisition. All of LESSEE’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by LESSOR or LESSEE from such Government Entity will be paid over to or retained by LESSEE. If a Default or Event of Default has occurred and is continuing, all payments received by LESSEE or LESSOR from such Government Entity may be used by LESSOR to satisfy any obligations owing by LESSEE.

	 	67	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	ARTICLE 20	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	
20.3 Representations and Warranties . LESSEE represents and warrants the following to LESSOR as of the date of execution of this Lease and as of the Delivery Date:
 
20.3.1	Status . LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
20.3.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by LESSEE of this Lease, except as will have been duly effected as of the Delivery Date.	
 
20.3.3	Binding . LESSEE’s Board of Directors has authorized LESSEE to enter into this Lease, any Side Letters hereto and any other documentation in connection with the leasing of the Aircraft from LESSOR (collectively, the “ Operative Documents ”) and perform its obligations under the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by LESSEE and represent the valid and binding obligations of LESSEE, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	
 
20.3.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSEE of the transactions contemplated in this Lease and compliance by LESSEE with the terms and provisions hereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of LESSEE, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	

	 	68	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	

20.3.5	Filings . Except for any filing or recording that may be required with the Aviation Authority, no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of the State of Registration or of Mexico in order for this Lease to constitute a valid and perfected lease of record relating to the Aircraft.	
 
20.3.6	Translation or Notarization . None of the Lease or any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.	
 
20.3.7	Licenses . LESSEE holds all licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.	
 
20.3.8	No Suits . There are no suits, arbitrations or other proceedings pending or to LESSEE’s knowledge threatened before any court or administrative agency against or affecting LESSEE which, if adversely determined, would have a material adverse effect on LESSEE or its ability to perform under this Lease, except as described in the filings provided to LESSOR pursuant to Article 22.	
 
20.3.9	No Withholding . Under the Laws of Mexico, LESSEE will not be required to deduct any withholding or other Tax from any payment it may make under this Lease.	
 
20.3.10	No Restrictions on Payments . Under the Laws of Mexico, there are no present restrictions on LESSEE making the payments required by this Lease.	
 
20.3.11	General Obligations . The obligations of LESSEE under this Lease are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by Law.	
 
20.3.12	No Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets is entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder constitute commercial acts done for commercial purposes.	
 
20.3.13	Tax Returns . All necessary returns have been delivered by LESSEE to all relevant taxation authorities in the jurisdiction of its formation and LESSEE is not in default in the payment of any taxes due and payable.	

	 	69	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	

20.3.14	No Material Adverse Effect . LESSEE is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on LESSEE’s ability to perform under this Lease.	
 
20.3.15	No Default or Event of Default under this Lease . At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to LESSOR pursuant to Article 22 fairly present the financial condition of LESSEE.	
20.4 Covenants . LESSEE covenants to LESSOR that it will comply with the following throughout the entire Lease Term:
 
20.4.1	Licensing . LESSEE will hold all required licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. LESSEE will advise LESSOR promptly in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.	
 
20.4.2	Payments . If at any time any such restrictions may be applicable, LESSEE will obtain all certificates, licenses, permits, exemptions and other authorizations which are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated in this Lease, and will maintain the same in full force and effect for so long as the same will be required.	
 
20.4.3	Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, will continue to be subject to private commercial law and suit. Neither LESSEE nor its properties or assets will be entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. LESSEE will advise LESSOR promptly of any change in the foregoing.	
 
20.4.4	Information about Suits . LESSEE will promptly give to LESSOR a notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially adversely affect LESSEE’s ability to perform under this Lease.	

	 	70	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	

20.4.5	Restrictions on Mergers . LESSEE will not consolidate with or merge into any other Person or sell, convey, lease, or otherwise transfer all or substantially all of its assets (whether in one transaction or a series of transactions) to any Person (a “ Reorganization Transaction ”), unless:	
(a) the Person formed by such consolidation or surviving such merger, or the Person who acquires by sale, conveyance, transfer, or lease all or substantially all of LESSEE’s assets (the “ Reorganized Entity ”) has a net worth and financial capacity which are reasonably sufficient to meet (i) all obligations of LESSEE under the Operative Documents, (ii) all obligations of LESSEE under all other agreements between LESSEE and LESSOR concerning the leasing or financing of aircraft or the extension, restructuring or rescheduling of credit, and (iii) the other obligations of the Reorganized Entity on a going forward basis;
(b) the Reorganized Entity (i) executes and delivers to LESSOR an agreement, in form and substance reasonably satisfactory to LESSOR, containing an assumption by the Reorganized Entity of the due and punctual performance and observance of all of LESSEE’s obligations under the Operative Documents, and (ii) makes such filings and recordings, including any filing or recording with the FAA or any filing under the Uniform Commercial Code, as are necessary to evidence such Reorganization Transaction and all filings necessary in order to preserve and protect the rights of LESSOR as owner of the Aircraft and lessor under this Lease;
(c) (i) such transaction shall not create a Default, (ii) no Event of Default shall exist immediately after such transaction, and (iii) the benefits of Section 1110 of the U.S. Bankruptcy Code available to LESSOR immediately prior to such Reorganization Transaction shall not be adversely affected as a result of such Reorganization Transaction;
(d) the Reorganized Entity delivers to LESSOR:
(i) a certificate, signed on its behalf by a responsible officer, stating that all the conditions precedent set forth in the foregoing clauses of this Article 20.2.5 have been fulfilled, and
(ii) an opinion of counsel for LESSEE or for the Reorganized Entity, from counsel and in form and substance reasonably satisfactory to LESSOR, stating that [A] the agreements entered into to effect the assumption agreement referenced in Article 20.2.5(b) have been duly authorized, executed, and delivered by the Reorganized Entity and that they (and the Operative Documents so assumed) constitute legal, valid, and binding obligations of the Reorganized Entity, enforceable in accordance with their terms (to the same extent as the Operative Documents so assumed were enforceable against LESSEE immediately prior to such Reorganization Transaction), and [B] containing such other matters as LESSOR reasonably requests.

	 	71	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	

Upon effecting any such Reorganization Transaction, the Reorganized Entity shall succeed to all the obligations of LESSEE and shall succeed to, shall be substituted for, and may exercise every right and power of LESSEE under the Operative Documents, with the same effect as if the Reorganized Entity had been named as LESSEE therein. No such Reorganization Transaction shall have the effect of releasing LESSEE (or any Reorganized Entity) from any of its liabilities under the Operative Documents. LESSEE shall pay all reasonable out-of-pocket expenses of LESSOR (including but not limited to its reasonable attorneys’ fees) in respect of such transfer.
 
20.4.6	Restriction on Relinquishment of Possession . LESSEE will not, without the prior consent of LESSOR, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease, including Articles 11 and 12.	
 
20.4.7	No Security Interests . LESSEE will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein. LESSEE will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time unless the same results from an act or omission of LESSOR or LESSOR’s Lender. LESSEE will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to LESSOR.	
 
20.4.8	Representations to Other Parties . LESSEE will not represent or hold out LESSOR as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.	

	 	72	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	

 	ARTICLE 21	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	
21.3 Representations and Warranties . LESSOR represents and warrants the following to LESSEE as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 8:
 
21.3.1	Corporate Status . LESSOR is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of California. It has the corporate power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
21.3.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to any U.S. Government Entity is required for the valid authorization, execution, delivery and performance by LESSOR of this Lease.	
 
21.3.3	Binding . This Lease and the other Operative Documents have been duly authorized, executed and delivered by LESSOR and represent the valid and binding obligations of LESSOR, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
21.3.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSOR of the transactions contemplated in this Lease and compliance by LESSOR with the terms and provisions hereof do not and will not contravene any Law applicable to LESSOR, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSOR is a party or by which LESSOR or its properties or assets may be bound or affected.	
21.4 Covenant of Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing hereunder, LESSOR covenants that during the Lease Term neither LESSOR nor any Person lawfully claiming by or through LESSOR will interfere with or otherwise disturb LESSEE’s quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of this Lease. LESSOR further agrees that LESSOR will procure that

	 	73	 	ARTICLE 21
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	

any Person taking title to the Aircraft granted by LESSOR during the Lease Term shall provide to LESSEE a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.

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REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	

 	ARTICLE 22	FINANCIAL AND OTHER INFORMATION	
LESSEE agrees to furnish each of the following to LESSOR:
(a) within forty-five (45) days after the end of each fiscal quarter of LESSEE, three (3) hard copies of the unaudited consolidated financial statements (including a balance sheet and profit and loss statement) prepared for such quarter in accordance with generally accepted accounting principles in Mexico;
(b) within ninety (90) days after the end of each fiscal year of LESSEE, three (3) hard copies of the audited consolidated financial statements (including a balance sheet and profit and loss statement) prepared as of the close of such fiscal year in accordance with generally accepted accounting principles in Mexico;
(c) promptly after distribution, three (3) hard copies of all reports and financial statements which LESSEE sends or makes available to its creditors and other aircraft lessors; and
(d) from time to time, such other reasonable information as LESSOR may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of LESSEE; and
Notwithstanding the foregoing, if at any time LESSEE shall be required to file or otherwise furnish financial statements substantially equivalent to those required to be furnished hereunder to any governmental agency of the state of Registration and such financial statements are available, at no unreasonable effort and no charge on the internet, the furnishing of the same by LESSEE shall be deemed to satisfy the requirements of this Article.

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 	ARTICLE 23	RETURN OF AIRCRAFT	
23.19 Date of Return . LESSEE is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 19.3. If an Event of Default occurs hereunder by LESSEE failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and LESSOR repossesses the Aircraft, the return requirements set forth in this Article 23 nonetheless must be met on the date the Aircraft is actually returned to LESSOR or repossessed by LESSOR.
23.20 Last Engine Shop Visits . With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will promptly notify LESSOR and the workscope will be submitted to Lessor as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost.
23.21 Technical Report . No later than six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), LESSEE will provide LESSOR with a Technical Evaluation Report in the form and substance of Exhibit O, as revised, and, in addition upon LESSOR’s request, will make copies available of (a) drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return, (b) an Airworthiness Directive status list, (c) a service bulletin incorporation list, (d) rotable tracked, hard-time and life-limited component listings, (e) a list of modifications, alterations and repairs, (f) interior material burn certificates, (g) the Maintenance Program, (h) the complete workscopes for the checks, inspections and other work to be performed prior to return, (i) a forecast of the checks, inspections and other work to be performed within eighteen (18) months after return of the Aircraft, (j) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by LESSEE from Manufacturer or the Engine Manufacturer, (k) current Engine disk sheets, (l) last Engine shop visit reports, (m) takeoff and cruise trend reports for the last nine (9) months and (n) any other data which is reasonably requested by LESSOR.
23.22 Return Location . LESSEE at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR at Aeromantenimiento. S.A. in El Salvador or another FAA-approved maintenance facility at a location mutually agreed to by LESSEE and LESSOR.

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23.5 Full Aircraft Documentation Review . For the period commencing at least one (1) month prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to LESSOR in the condition required by this Lease, LESSEE will provide for the review of LESSOR and/or its representative all of the Aircraft records and historical documents described in Exhibit N in one central room with access to telephone, photocopy, fax and Internet connections at the Aircraft return location.
23.6 Maintenance Policies and Procedures Manuals . At return of the Aircraft and at LESSOR’s request for the purposes of bridging and demonstrating to the next operator and its aviation authority how the Aircraft has been maintained, LESSEE will provide LESSOR with access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of LESSEE (not to be unreasonably withheld or delayed) and that the same will be only utilized as set forth in Article 12.12 and this Article 23.6.
23.7 Aircraft Inspection .
 
23.7.1	During the maintenance checks performed prior to the proposed redelivery and at the actual return of the Aircraft, LESSOR and/or its representatives will have an opportunity to observe functional and operational system checks, perform a visual inspection of the Aircraft (taking into account the Aircraft type, age, use and other known factors with respect to the Aircraft) and perform a full inspection of the Aircraft Documentation (including records and manuals), all to LESSOR’s reasonable satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.2	Prior to the Aircraft acceptance flight described in Article 23.7.3, with LESSOR and/or LESSOR’s representatives present, LESSEE will conduct a systems functional and operational inspection of the Aircraft in accordance with Manufacturer’s checklist procedures.	
 
23.7.3	Immediately prior to redelivery of the Aircraft, LESSEE will carry out for LESSOR and/or LESSOR’s representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by LESSOR, in accordance with an airline acceptance flight procedure, either of which will be for not less than two (2) hours and not more than three (3)	

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 	hours. Flight costs and fuel will be furnished by and at the expense of LESSEE. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.4	To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date, the Lease Term will be deemed to have been automatically extended and the obligations of LESSEE hereunder (including Article 23.14.3) will continue on a day-to-day basis until the Aircraft is accepted by LESSOR executing the Return Acceptance Receipt in the form of Exhibit L.	
23.8 Certificate of Airworthiness Matters .
 
23.8.1	The Aircraft will possess a current Certificate of Airworthiness issued by the Aviation Authority (although this Certificate of Airworthiness may later be replaced by an Export Certificate of Airworthiness or equivalent if requested by LESSOR pursuant to Article 23.12). In addition, even if LESSEE must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 12, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 and, in addition, to meet the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.2	At LESSOR’s request, LESSEE at its cost will demonstrate that the Aircraft meets the requirements for issuance of the U.S. Standard Certificate of Airworthiness for transport category aircraft specified in Article 23.8.1 by delivering to LESSOR at LESSOR’s option either an actual U.S. Standard Certificate of Airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to LESSOR signed by an FAA Designated Airworthiness Representative (DAR) or another Person acceptable to LESSOR stating that the DAR or such Person has inspected the Aircraft and Aircraft Documentation (including records and manuals) and has found that the Aircraft meets the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft in accordance with FAR Part 21 and, in addition, meets the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.3	If the Aircraft is to be registered in a country other than in the U.S. after return from LESSEE, LESSOR may in its sole discretion waive the requirements of Article 23.8.2 and instead require that LESSEE at its expense (to the extent such expense is no greater than that which LESSEE would have incurred pursuant to	

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 	Articles 23.8.1 and 23.8.2, with any additional expenses being for LESSOR’s account) put the Aircraft in a condition to meet the requirements for issuance of a Certificate of Airworthiness of the aviation authority of the next country of register.	
23.9 General Condition of Aircraft at Return .
 
23.9.1	The Aircraft, Engines, APU and Parts will have been maintained and repaired in accordance with the Maintenance Program, the rules and regulations of the Aviation Authority and this Lease.	
 
23.9.2	If any Part installed on the Airframe, any Engine or the APU at return was not installed at Delivery, then such Part will have met the requirements of Article 12.4.1 at the time of installation.	
 
23.9.3	The requirements of Article 12.2.2 will have been met with respect to the installation of PMA Parts and OEM Parts in the Engines during the Lease Term. Without limiting the foregoing, all stationary high energy Parts in the gaspath of the Engines will be OEM Parts.	
 
23.9.4	Aircraft Documentation (including records and manuals) will have been maintained in English and in an up-to-date status, in accordance with the rules and regulations of the Aviation Authority and the FAA and this Lease and in a form necessary in order to meet the requirements of Article 23.8.1. The records and historical documents set forth in Attachment 1 of Exhibit L will be in English. If LESSEE subscribes to Manufacturer’s on-line data access services, LESSEE must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD, microfilm or other format acceptable to LESSOR.	
 
23.9.5	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the most recent time of installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency or EASA-approved repair agency, as applicable, which performed the last Overhaul or refurbishment.	
 
23.9.6	All Parts other than those referred to in Article 23.9.5 installed on the Aircraft will have FAA-acceptable documentation demonstrating that such Parts were airworthy at the most recent time of installation on the Aircraft.	

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23.9.7	The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 23, reasonable wear and tear from normal flight operations excepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis.	
 
23.9.8	The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by Manufacturer, the Aviation Authority and FAA.	
 
23.9.9	The Aircraft interior (including cabin and windows) and exterior will be clean, with all compartments free of foreign objects. The Aircraft will be substantially free of dirt, grease, fluids, stains, grime, cracks, tears and rips, consistent with worldwide commercial airline standards for used aircraft at completion of a heavy maintenance check.	
 
23.9.10	No special or unique Manufacturer, Engine Manufacturer or Aviation Authority inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.	
 
23.9.11	All repairs to the Aircraft will have been accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9) for the Aircraft.	
 
23.9.12	All major modifications will also be accomplished in accordance with FAA-approved data supported by a supplemental type certificate, FAA Form 8110-3 or 8100-9.	
 
23.9.13	The Aircraft will be returned with LESSOR’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent LESSEE performed a Modification which cost in excess of ***** and LESSOR did not approve such Modification in accordance with Article 12.9.1, LESSOR may require LESSEE to return the Aircraft in its original condition prior to such Modification.	
 
23.9.14	All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance by means of terminating action prior to return of the Aircraft to LESSOR or within 6 months after the Termination Date will have been complied with on the Aircraft on a terminating action basis at LESSEE’s cost. Airworthiness Directives which require compliance by means other than terminating	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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 	action prior to return of the Aircraft or 6 months after Return to LESSOR, will have been performed to the highest level of accomplishment possible other than terminating action. If, after using commercially reasonable efforts, LESSEE is unable to acquire the material, parts or components necessary to accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon return of the Aircraft the estimated cost of terminating such Airworthiness Directive. If the estimated cost cannot be mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain an estimate from a reputable FAA- approved maintenance facility (unaffiliated with LESSEE or LESSOR) and the estimated cost will be the average of the two estimates.	
 
23.9.15	All Modifications which must be performed prior to the date of return of the Aircraft or within 6 months after the Termination Date in order to meet the FAA requirements for FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129 operations will have been incorporated on the Aircraft at LESSEE’s cost.	
 
23.9.16	The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer and LESSEE will provide LESSOR with documentation substantiating such compliance.	
 
23.9.17	If any waivers, deviations, dispensations, alternate means of compliance, extensions or carry-overs with respect to maintenance or operating requirements, repairs or Airworthiness Directives are granted by the Aviation Authority or permitted by the Maintenance Program, LESSEE at its sole cost and expense will nonetheless perform such maintenance or operating requirements, repairs or Airworthiness Directives as if such waivers, deviations, dispensations, alternate means of compliance, or extensions or carry-overs did not exist.	
 
23.9.18	The Aircraft will be free from any Security Interest except LESSOR’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest or right of detention or sale in favor of the Aviation Authority, any airport authority, Eurocontrol or any other authority or Government Entity.	
 
23.9.19	All no-charge vendor and Manufacturer’s service bulletin kits received by LESSEE for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no-charge vendor and Manufacturer’s service bulletin kits ordered by LESSEE but not yet received will, upon receipt by LESSEE and at LESSEE’s cost, be forwarded as instructed by LESSOR. At LESSOR’s request, any other service bulletin kit which LESSEE ordered specifically for the Aircraft and paid for will also be delivered to LESSOR on board the Aircraft, but LESSOR will reimburse LESSEE for its actual out-of-pocket costs for such kit, unless LESSEE purchased such kit as part of its	

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 	implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but had not yet installed such kit on the Aircraft, in which case such kit will be furnished free of charge to LESSOR.	
 
23.9.20	The Aircraft will be free of any leaks found to be outside of maintenance manual limits and any damage resulting therefrom. All repairs will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions unless no such permanent repair is available.	
 
23.9.21	The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced to full and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.	
23.10 Checks Prior to Return . Immediately prior to return of the Aircraft to LESSOR, LESSEE at its expense will do each of the following:
 
23.10.1	LESSEE will have the Return Check performed by an FAA-approved repair facility. LESSEE also agrees to perform during the Return Check any other work reasonably requested by LESSOR (and not otherwise required under this Lease) and LESSOR will reimburse LESSEE for performing such LESSOR-requested work based on LESSEE’s out-of-pocket and unburdened labor and material costs. In the event that LESSEE exercises any extension option with respect to the Initial Lease Term, and the next consecutive check due on the Aircraft pursuant to the MPD (regardless of whether or not such check would have fallen during the Lease Term) is a “12Y” check, then LESSEE will accomplish the “12Y” check (including all lesser checks) as described in the MPD.	
 
23.10.2	LESSEE will perform an internal and external corrosion inspection and correct any discrepancies in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
23.10.3	LESSEE will remove LESSEE’s exterior markings, including all exterior paint, by stripping (or, at LESSOR’S option, pneumatically sanding) the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. LESSEE will then repaint the fuselage, empennage, wings and Engine cowlings in the colors and logo specified by LESSOR. Such painting will be accomplished in such a manner as to result in a uniformly smooth and cosmetically acceptable aerodynamic surface. All external placards, signs and markings will be properly attached, free from damage, clean and	

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 	legible. Notwithstanding the foregoing, in the event that the cost of painting the Aircraft in the logo and colors specified by LESSOR exceeds the then-current cost of painting the Aircraft in the logo and colors in which it was painted at Delivery, then LESSOR will reimburse LESSEE for any such excess cost. After painting, the Aircraft will be weighed.	
 
23.10.4	LESSEE will clean the exterior and interior of the Aircraft.	
 
23.10.5	If reasonably required by LESSOR, LESSEE will repaint by touch-up the interior of the Aircraft, including flight deck, and replace missing, broken or illegible placards.	
 
23.10.6	In accordance with Article 23.9.11, LESSEE will permanently repair damage to the Aircraft that exceeds Manufacturer’s limits and replace any non-flush structural patch repairs installed on the Aircraft with permanent flush-type repairs, in each case with no further inspection requirements unless a permanent flush-type repair is unavailable.	
 
23.10.7	With LESSOR and/or its representatives present, LESSEE will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with Manufacturer’s aircraft maintenance manual.	
 
23.10.8	If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
 
23.10.9	With LESSOR and/or its representatives present, LESSEE will accomplish a power assurance run on the Engines in accordance with Manufacturer’s aircraft maintenance manual Task 71-00-00-710-013 Test No. 11 “High Power Assurance Test” (or any subsequent equivalent replacement thereof). LESSEE will record the Engine power assurance test conditions and results on the Return Acceptance Receipt.	
 
23.10.10	LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the Engine historical and technical records, borescope inspection, trend monitoring and power assurance run do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Manufacturer’s aircraft maintenance manual. LESSEE will correct any discrepancies in accordance with the guidelines set out by the Engine Manufacturer which may be discovered during such inspection.	

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23.10.11	In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 23.10.9 result in a dispute regarding the conformity of an Engine with the requirements of this Article 23, LESSEE and LESSOR will consult with the Engine Manufacturer and follow the Engine Manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check if so recommended) with regard to determining if such Engine complies with the requirements of this Article 23 and the manner in which any discrepancies from the requirements of this Article 23 will be rectified.	
 
23.10.12	With LESSOR and/or its representatives present, LESSEE will perform an APU condition test in accordance with Manufacturer’s aircraft maintenance manual and a complete hot and cold section videotape borescope on the APU. LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the APU condition test and borescope inspection do not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. LESSEE will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such test or inspections. If such APU is serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions, LESSOR agrees to discuss with LESSEE in good faith for a resolution that compensates LESSOR for such deficiency and avoid or minimize any delays in return of the Aircraft to LESSOR.	
 
23.10.13	If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
23.11 Part Lives . At return, the condition of the Aircraft will be as follows:
 
23.11.1	The Aircraft will have zero (0) hours consumed since the Return Check (excluding hours consumed on the acceptance flight).	
 
23.11.2	Each Engine will meet all of the following:	
(a) Each Engine will have at least 4,000 hours and 3,500 cycles remaining to operate until its next anticipated removal (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).

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(b) If any module of an Engine is returned with hours accumulated on such module since the last performance restoration of such module, LESSEE will pay LESSOR an amount equal to the hours accumulated on such module times then-current Engine Manufacturer performance restoration rate for such module, based on Engine Manufacturer’s estimated mean time between performance restoration for such module.
(c) Each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the hours and cycles set forth in the preceding subparagraph (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).
(d) The Engine historical and technical records, borescope inspection, trend monitoring, power assurance run and other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10 indicate that the Engine should operate for the hours and cycles set forth in Article 23.11.2(a).
(e) Each Part of an Engine which has a life-limit will have at least 4,000 cycles remaining to operate until its next removal per the Engine Manufacturer’s limit.
(f) No life-limited Part of an Engine will have more hours and cycles consumed than such Engine’s data plate.
 
23.11.3	The APU will have not more than 2,000 APU hours consumed since the last APU manufacturer’s medium or heavy repair workscope. If the APU has life-limited Parts, the cycles remaining on the most restricted life-limited Part will be a minimum of 3,000 APU cycles at return.	
In addition, to the extent there are life-limited Parts in the APU, then, for each such life-limited Part, LESSEE will pay LESSOR an amount equal to the product of (a) the quotient obtained by dividing (i) the cycles consumed on each such life-limited Part within the APU since new by (ii) the total life of each such life-limited Part, multiplied by (b) the replacement cost of the applicable life-limited Part, all as determined by the APU manufacturer’s then-current data.
 
23.11.4	Each leg of the Landing Gear will have at least 7 years remaining pursuant to the MPD until the next scheduled Overhaul.	
 
23.11.5	Each Part of the Airframe, Engine or APU which has a hard time limit pursuant to the MPD will have the greater of (a) at least 50% of such hard time Part’s full allotment of	

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 	hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled Overhaul or scheduled removal pursuant to the MPD. However, if such hard time Part’s full allotment of hours and cycles between Overhauls pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such hard time Part will be returned with zero (0) hours and zero (0) cycles out of Overhaul.	
 
23.11.6	Each life-limited Part of the Airframe or APU will have the greater of (a) at least 50% of such life-limited Part’s full allotment of hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled replacement pursuant to the MPD. However, if such life-limited Part’s full allotment of hours and cycles remaining to operate pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such life-limited Part will be returned with 100% of its total approved hours and cycles remaining.	
 
23.11.7	No life-limited Part of the Airframe will have more hours and cycles consumed than the total hours and cycles of the Airframe.	
 
23.11.8	No life-limited Part of the APU will have more hours and cycles consumed than the hours and cycles of the APU.	
 
23.11.9	Each Part which has a calendar time limit will have 20 months remaining to operate until removal pursuant to the MPD. If a Part with a calendar time limit has a total approved calendar time remaining pursuant to the MPD of less than 20 months, then such Part will be returned with 100% of its total approved calendar time remaining until removal.	
 
23.11.10	No Part (excluding the life-limited Parts which are covered by Articles 23.11.2(e), 23.11.2(f), 23.11.6, 23.11.7 and 23.11.8) will have total hours or total cycles since new greater than one hundred fifteen percent (115%) of that of the Airframe and, with respect to all such Parts as a group, such Parts will have an average total time since new no greater than that of the Airframe.	
 
23.11.11	Each Landing Gear tire and brake will have fifty percent (50%) of its total wear remaining to its next Overhaul.	
23.12 Export and Deregistration of Aircraft . At LESSOR’s request, LESSEE at its cost will (a) provide an Export Certificate of Airworthiness or its equivalent from the State of Registration so that the Aircraft can be exported to the country designated by LESSOR, (b) assist with deregistration of the Aircraft from the register of aircraft in the State of Registration, (c) assist with arranging for prompt confirmation of such deregistration to be sent by the registry in the State of Registration to the next country of registration and (d) perform any other

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acts reasonably required by LESSOR in connection with the foregoing. If any Aircraft work which LESSEE is not otherwise required to perform hereunder, including engineering, is required in order to obtain such Export Certificate of Airworthiness, LESSEE will perform such work and LESSOR will reimburse LESSEE for such work at LESSEE’s out-of-pocket expenses.
23.13 Delay in Return of Aircraft Due to LESSOR Work Requests . LESSEE will not be required to pay Rent to LESSOR for any whole days that return of the Aircraft to LESSOR is delayed solely as a result of LESSOR’s requests that additional work be performed over and above the work necessary to place the Aircraft in the condition required by this Article 23, and in the event associated costs other than additional Rent are incurred, such as additional insurance, LESSOR shall reimburse reasonable costs associated therewith.
23.14 LESSEE’s Continuing Obligations . In the event that LESSEE does not return the Aircraft to LESSOR on the Expiration Date and in the condition required by this Article 23 for any reason (whether or not the reason is within LESSEE’s control), but subject to Article 23.13:
 
23.14.1	the obligations of LESSEE under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of LESSEE’s Event of Default or any right of LESSOR hereunder.	
 
23.14.2	Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to LESSOR pursuant to this Lease.	
 
23.14.3	Without limiting LESSOR’s rights and remedies under Article 25 and except for a delay in return of the Aircraft for the reason set forth in Article 23.13, until such time as the Aircraft is redelivered to LESSOR and put into the condition required by this Article 23, instead of paying the Rent specified in Article 5.3, LESSEE will pay twice the amount of Rent in effect on the Expiration Date for each day from the scheduled Expiration Date until the Termination Date. In determining the applicable normal Rent per day that will be doubled for purposes of this calculation, the monthly Rent payable under Article 5.3.1 will be prorated based on the actual number of days in the applicable month. Payment will be made upon presentation of LESSOR’s invoice.	
 
23.14.4	LESSOR may elect, in its sole and absolute discretion, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 23 and thereafter have any such non-conformance corrected at such time as LESSOR may deem appropriate (but within ninety (90) days following the return of the Aircraft) and at commercial rates then-charged by the Person selected by LESSOR to perform such correction. Any direct expenses incurred by LESSOR for such correction will be payable by LESSEE within fifteen (15) days following the submission of a written statement by LESSOR to LESSEE, identifying the items corrected and setting forth the expense of such corrections. LESSEE’s obligation to pay such amounts will survive the Termination Date.	

	 	87	 	ARTICLE 23
RETURN OF AIRCRAFT	

23.15 Airport and Navigation Charges . LESSEE will ensure that at return of the Aircraft any and all airport, navigation and other charges which give rise or may if unpaid give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part have been paid and discharged in full and will at LESSOR’s request produce evidence thereof satisfactory to LESSOR, except to the extent being contested in good faith provided LESSEE shall have agreed in writing to pay any such charges determined pursuant to such contest to be due and owing to the relevant authorities, and provided that there is no likelihood of the placement of any Security Interest on or seizure of the Aircraft, Engine, APU or any Part.
23.16 Return Acceptance Receipt . Upon return of the Aircraft in accordance with the terms of this Lease, LESSEE will prepare and execute two (2) Return Acceptance Receipts in the form and substance of Exhibit L and LESSOR will countersign and return one such Return Acceptance Receipt to LESSEE. In addition, LESSEE and LESSOR will execute a Lease Termination for filing with the FAA evidencing termination of this Lease.
23.17 Indemnities and Insurance . The indemnities and insurance requirements set forth in Articles 17 and 18, respectively, will apply to Indemnitees and LESSOR’s representatives during return of the Aircraft, including the ground inspection and acceptance flight. With respect to the acceptance flight, LESSOR’s representatives will receive the same protections as LESSOR on LESSEE’s Aviation and Airline General Third Party Liability Insurance.
23.18 Storage . At LESSOR’s request, LESSEE will continue to lease the Aircraft under this Lease for a period not to exceed thirty (30) days. During this period, LESSEE will have no obligations under this Lease except, at LESSOR’s cost, to park and store the Aircraft in accordance with Manufacturer’s recommended short term storage program at one of LESSEE’s principal maintenance facilities in Mexico and to maintain all insurance on the Aircraft. LESSEE will not utilize the Aircraft for any reason during this period.

	 	88	 	ARTICLE 23
RETURN OF AIRCRAFT	

 	ARTICLE 24	ASSIGNMENT	
24.7 No Assignment by LESSEE . NO ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART, OR THIS LEASE.
24.8 Sale or Assignment by LESSOR .
 
24.8.1	Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent sell, assign or transfer its rights, interest and obligations hereunder or with respect to the Aircraft (a “ Transfer ”) to a third party (“ LESSOR’s Assignee ”).	
Notwithstanding the foregoing, no Transfer shall: (i) be made to an entity which is not solvent at the time of and immediately after giving effect to such Transfer; (ii) be made to an air carrier or subsidiary of an air carrier that conducts substantial business in Mexico and is in direct competition with LESSEE; (iii) result in any increase in or to or the imposition of additional obligations or liabilities on the part of LESSEE that are not de minimis, (iv) restrict or diminish LESSEE’s rights in and to the Aircraft pursuant to this Lease; (v) be made to a Person having a net worth of less than ***** at the time of such Transfer; (vi) be made unless and until the purchaser, assignee or transferee shall have (a) provided LESSEE with a covenant of quiet use and enjoyment equivalent to that required under this Lease and (b) agreed in writing, in favor of LESSEE that (1) in the case of a Transfer not constituting solely a Transfer by way of security, it shall be bound by and from and after the date of transfer perform all obligations of “LESSOR” under this Lease and (2) in the case of any Transfer, that, to the extent it holds any moneys under the Lease, it shall hold, apply, invest, disburse, reimburse and return such moneys in accordance with the applicable provisions of the LEASE.
 
24.8.2	The term “ LESSOR ” as used in this Lease means the lessor of the Aircraft at the time in question. In the event of the sale of the Aircraft and transfer of LESSOR’s rights and obligations under this Lease, LESSOR’s Assignee will become “LESSOR” of the Aircraft under this Lease and the transferring party (the prior “LESSOR”) will be relieved of all liability to LESSEE under this Lease for obligations arising on and after the date the Aircraft is sold. LESSEE will acknowledge and accept LESSOR’s Assignee as the new “LESSOR” under this Lease and will look solely to LESSOR’s Assignee for the performance of all LESSOR obligations and covenants under this Lease arising on and after the Aircraft sale date.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	89	 	ARTICLE 24
ASSIGNMENT	

24.9 LESSOR’s Lender . Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent grant security interests over the Aircraft and assign the benefit of this Lease to a lender (“ LESSOR’s Lender ”) as security for LESSOR’s obligations to LESSOR’s Lender. Accordingly, if LESSOR’s Lender requires, as a condition to providing financing, any nonsubstantive modification of this Lease, LESSEE agrees to enter into an agreement so modifying this Lease.
24.10 LESSEE Cooperation . Subject to LESSEE’s rights under this Lease otherwise, on request by LESSOR, LESSOR’s Assignee or LESSOR’s Lender, LESSEE will execute all such documents (such as a lease assignment agreement) as LESSOR, LESSOR’s Assignee or LESSOR’s Lender may reasonably require to acknowledge LESSEE’s obligations under this Lease and obtain LESSEE’s acknowledgment that LESSOR is not in breach of the Lease. LESSEE will provide all other reasonable assistance and cooperation to LESSOR, LESSOR’s Assignee and LESSOR’s Lender in connection with any such sale or assignment or the perfection and maintenance of any such security interest, including, at LESSOR’s sole cost and expense, making all necessary filings and registrations in the State of Registration and providing, at LESSOR’s sole cost and expense, all opinions of counsel with respect to matters reasonably requested by LESSOR, LESSOR’s Lender or LESSOR’s Assignee. LESSOR will pay or reimburse LESSEE for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in reviewing documents required by LESSOR, LESSOR’s Assignee or LESSOR’s Lender or performing any other obligations under this Article 24.
24.11 Advance Consent Under Cape Town Convention . For the purpose of Article 33(1) of the Convention and Article XV of the Protocol (combined for ease of reference in Article 46(1) of the Consolidated Text), LESSEE hereby consents in advance to the transfer of the associated rights and related international interests in respect of any assignment or sale by LESSOR or the granting of any Security Interest by LESSOR in accordance with Articles 24.2 or 24.3. For the avoidance of doubt, no additional consent by LESSEE will be required in connection with any such assignment of associated rights and the related international interests pursuant to the Cape Town Convention. Any filings made on the International Registry pursuant to the Cape Town Convention in connection herewith, shall be made at LESSOR’s sole cost and expense.
24.12 Protections .
 
24.12.1	LESSOR will obtain for the benefit of LESSEE an acknowledgment from any LESSOR’s Assignee or LESSOR’s Lender that, so long as no Default or Event of	

	 	90	 	ARTICLE 24
ASSIGNMENT	

 	Default has occurred and is continuing hereunder, neither such Person nor any other Person lawfully claiming by or through such Person will interfere with or otherwise disturb LESSEE’s quiet, peaceful use and enjoyment of the Aircraft.	
 
24.12.2	If a financing for the Aircraft is in place at Delivery or LESSOR finances the Aircraft after Delivery, then the term “LESSOR” in the provisions of this Lease relating to disclaimer, title and registration, indemnity and insurance contained in Articles 8, 14, 17 and 18, respectively, or with respect to Article 20.2.8, will be deemed in addition to LESSOR to include LESSOR’s Assignee, LESSOR’s Lender and associated parties, if applicable. Also, if the Aircraft was previously financed but such financing was no longer in place at the time of Delivery of the Aircraft to LESSEE, the term “LESSOR” in the provisions of this Lease described in this Article 24.6.2 will be deemed to include the former lender and associated parties.	
 
24.12.3	If LESSOR sells the Aircraft after Delivery, subject to conformity of such sale with the provisions of this Article 24, then the disclaimer and indemnity provisions contained in Articles 8 and 17 will continue to be applicable after the sale to International Lease Finance Corporation and, if applicable, the parties referred to in Article 24.6.2. For a period of two (2) years after such sale or assignment and at LESSEE’s cost, LESSEE will continue to name LESSOR and the parties referred to in Article 24.6.2, if applicable, as additional insureds under the Aviation and Airline General Third Party Liability Insurance specified in Exhibit C.	

	 	91	 	ARTICLE 24
ASSIGNMENT	

 	ARTICLE 25	DEFAULT OF LESSEE	
25.10 LESSEE Notice to LESSOR . LESSEE will promptly notify LESSOR if LESSEE becomes aware of the occurrence of any Default or Event of Default.
25.11 Events of Default . The occurrence of any of the following will constitute an Event of Default and material breach of this Lease by LESSEE:
(a) LESSEE fails to take delivery of the Aircraft when properly tendered and otherwise obligated to do so under the terms of this Lease;
(b) LESSEE fails to make a Rent or other payment due hereunder in the manner and by the date provided in this Lease and fails to make such payment within three (3) Business Days after such payment is due (following any applicable grace period otherwise provided under this Lease);
(c) LESSEE fails to obtain or maintain the insurance required by Article 18;
(d) LESSEE fails to return the Aircraft to LESSOR on the Expiration Date in accordance with Article 23;
(e) LESSEE fails to observe or perform any of its other obligations hereunder and fails to cure the same within fifteen (15) days after receipt of written notice thereof to LESSEE. If such failure cannot by its nature be cured within fifteen (15) days, LESSEE will have the reasonable number of days necessary to cure such failure (not to exceed a period of sixty (60) days) so long as it uses diligent and best efforts to do so;
(f) any representation or warranty of LESSEE in this Lease proves to be untrue in any material respect when made and, if available, LESSEE has not cured the same within thirty (30) days unless there can be no reasonable expectation that the same can be cured within such period;
(g) the registration of the Aircraft is cancelled other than as a result of an act or omission of or attributable to LESSOR;
(h) LESSEE abandons the Aircraft or Engines;

	 	92	 	ARTICLE 25
DEFAULT OF LESSEE	

(i) LESSEE or an approved sublessee no longer has unencumbered control (other than Permitted Liens) or possession of the Aircraft or Engines, except as otherwise permitted by this Lease;
(j) LESSEE discontinues (temporarily or otherwise) business or sells or otherwise disposes of all or substantially all of its assets;
(k) a material adverse change occurs in the financial condition of LESSEE which, in LESSOR’s reasonable opinion, would materially and adversely affect LESSEE’s ability to perform its obligations under the Operative Documents;
(l) LESSEE no longer possesses the licenses, certificates and permits required for the conduct of its business as a certificated air carrier in Mexico; provided, however, that if LESSEE is undertaking its best efforts to reinstate the effectiveness of such license, certificate or permit with a reasonable likelihood of success, and so long as such situation poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, LESSEE shall have thirty (30) days to cure such deficiency;
(m) LESSEE fails to pay when due (after giving effect to any applicable grace or similar period available) any airport or navigation charges (including Eurocontrol charges) or any landing fees assessed with respect to the Aircraft or any aircraft operated by LESSEE which, if unpaid, may give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part;
(n) LESSEE (i) suspends payment on its debts or other obligations, (ii) is unable to or admits its inability to pay its debts or other obligations as they fall due, (iii) is adjudicated or becomes bankrupt or insolvent or (iv) proposes or enters into any composition or other arrangement for the benefit of its creditors generally;
(o) any proceedings, resolutions, filings or other steps are instituted or threatened with respect to LESSEE relating to the bankruptcy, liquidation, reorganization or protection from creditors of LESSEE or a substantial part of LESSEE’s property. If instituted by LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;
(p) any order, judgment or decree is entered by any court of competent jurisdiction appointing a receiver, trustee or liquidator of LESSEE or a substantial

	 	93	 	ARTICLE 25
DEFAULT OF LESSEE	

part of its property, or if a substantial part of LESSEE’s property is to be sequestered. If instituted by or done with the consent of LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;
(q) (i) any indebtedness for borrowed moneys or a guarantee or similar obligation owed by LESSEE with an unpaid balance of at least ***** is declared due before its stated maturity or (ii) LESSEE is in default under any other purchase agreement, lease, conditional sale agreement or other agreement pursuant to which LESSEE has possession of any aircraft, if such situation presents a likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, or a likelihood in LESSOR’s reasonable judgment that such situation will impair LESSOR’s compliance with the terms of this Lease;
(r) LESSEE is in default under any other lease or agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR and the same is not cured within its specified cure period; or
(s) LESSEE is in default under any other aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person and the same is not cured within its specified cure period.
25.12 LESSOR’s General Rights . Upon the occurrence of any Event of Default, LESSOR may do all or any of the following at its option (in addition to such other rights and remedies which LESSOR may have by statute or otherwise but subject to any requirements of applicable Law):
(a) terminate this Lease by giving written notice to LESSEE;
(b) terminate the rights of LESSEE to use or operate the Aircraft by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(c) require that LESSEE immediately cease flying the Aircraft and leave it parked in its then-current location by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(d) require that LESSEE immediately move the Aircraft to an airport or other location designated by LESSOR and park the Aircraft there by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	94	 	ARTICLE 25
DEFAULT OF LESSEE	

(e) take possession of the Aircraft. If LESSOR takes possession of the Aircraft, it may enter upon LESSEE’s premises where the Aircraft is located without liability. Upon repossession of the Aircraft, LESSOR will then be entitled to sell, lease or otherwise deal with the Aircraft as if this Lease had never been made. LESSOR will be entitled to the full benefit of its bargain with LESSEE;
(f) instruct any maintenance or repair facility which is in possession of the Aircraft, any Engine, the APU or any Part as to its disposition or release;
(g) for LESSEE’s account, do anything that may reasonably be required to cure any default and recover from LESSEE all reasonable costs, including legal fees and expenses incurred in doing so and Default Interest;
(h) proceed as appropriate to enforce performance of this Lease and to recover any damages for the breach hereof, including the amounts specified in Article 25.6; or
(i) apply all or any portion of the Security Deposit and any other security deposits held by LESSOR pursuant to any other agreements between LESSOR and LESSEE to any amounts due.
25.13 Deregistration and Export of Aircraft . If an Event of Default has occurred and is continuing, LESSOR may take all steps necessary to deregister the Aircraft in and export the Aircraft from the State of Registration.
25.14 Cape Town Convention Remedies . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then LESSEE and LESSOR acknowledge and agree that:
(a) each of the Events of Default set forth in Article 25.2 will be deemed to be an event that constitutes a “default” as such term is used in the Cape Town Convention; and
(b) upon the occurrence of any Event of Default (i) LESSOR will be afforded all speedy and other relief, rights and (without duplication of recovery) remedies specified in the Cape Town Convention as a result of such Event of Default, (ii) all of the rights of LESSOR specified in Article 25.3 will be construed to be “additional remedies” as permitted by the Cape Town Convention which may be exercised by

	 	95	 	ARTICLE 25
DEFAULT OF LESSEE	

LESSOR pursuant to this Lease subject to the requirements of applicable Law and (iii) LESSOR may, without notice to LESSEE, take all steps as are contemplated by the Cape Town Convention to deregister the Aircraft, export the Aircraft from the State of Registration and, if applicable, discharge the international interest in respect of the Aircraft, this Lease and the other Operative Documents from the International Registry.
25.15 LESSEE Liability for Damages . If an Event of Default occurs, in addition to all other remedies available at law or in equity, LESSOR has the right to recover from LESSEE and LESSEE will pay LESSOR within two (2) Business Days after LESSOR’s written demand, all of the following:
(a) any losses suffered by LESSOR as a result of a delay in Delivery of the Aircraft to LESSEE, including payments to Manufacturer such as additional purchase price escalation and Aircraft parking, maintenance costs and insurance costs during the period of delay;
(b) without duplication, all amounts which are then due and unpaid hereunder and which become due prior to the earlier of LESSOR’s recovery of possession of the Aircraft or LESSEE making an effective tender thereof;
(c) without duplication, any losses suffered by LESSOR because of LESSOR’s inability to place the Aircraft on lease with another lessee or to otherwise utilize the Aircraft on financial terms as favorable to LESSOR as the terms hereof for the Lease Term or, if LESSOR elects to dispose of the Aircraft, the funds arising from a sale or other disposition of the Aircraft are not as profitable to LESSOR as leasing the Aircraft in accordance with the terms hereof would have been (and LESSOR will be entitled to accelerate any and all Rent which would have been due from the date of LESSOR’s recovery or repossession of the Aircraft through the Expiration Date);
(d) without duplication, all costs associated with LESSOR’s exercise of its remedies hereunder, including repossession costs, legal fees, Aircraft storage costs, Aircraft re-lease or sale costs and LESSOR’s internal costs and expenses (including the cost of personnel time calculated based upon the compensation paid to the individuals involved on an annual basis and a general LESSOR overhead allocation);
(e) without duplication, any amount of principal, interest, fees or other sums paid or payable on account of funds borrowed in order to carry any unpaid amount resulting from the occurrence of an Event of Default;
(f) without duplication, any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to LESSOR’s financing of the Aircraft;

	 	96	 	ARTICLE 25
DEFAULT OF LESSEE	

(g) without duplication, any loss, cost, expense or liability sustained by LESSOR due to LESSEE’s failure to redeliver the Aircraft in the condition required by this Lease; and
(h) without duplication, any other loss, damage, expense, cost or liability which LESSOR suffers or incurs as a result of the Event of Default and/or termination of this Lease.
Notwithstanding the foregoing, LESSOR shall use reasonable efforts to mitigate any such losses.
25.16 Waiver of Default . By written notice to LESSEE, LESSOR may at its election waive any Default or Event of Default and its consequences and rescind and annul any prior notice of termination of this Lease. The respective rights of the parties will then be as they would have been had no Default or Event of Default occurred and no such notice been given.
25.17 Present Value of Payments . In calculating LESSOR’s damages hereunder, upon an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred will be calculated on a present value basis using a discounting rate of ***** per annum discounted to the earlier of the date on which LESSOR obtains possession of the Aircraft or LESSEE makes an effective tender thereof.
25.18 Use of “Termination Date” . For avoidance of doubt, it is agreed that if this Lease terminates and the Aircraft is repossessed by LESSOR due to an Event of Default, then, notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Expiration Date” will be utilized in calculating the damages to which LESSOR is entitled pursuant to Article 25.6. For example, it is agreed and understood that LESSOR is entitled to receive from LESSEE the Rent and the benefit of LESSEE’s insurance and maintenance of the Aircraft until expiration of the Lease Term.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	97	 	ARTICLE 25
DEFAULT OF LESSEE	

 	ARTICLE 26	NOTICES	
26.3 Manner of Sending Notices . Any notice, request or information required or permissible under this Lease will be in writing and in English. Notices will be delivered in person or sent by fax, e-mail, letter (mailed airmail, certified and return receipt requested), or by expedited delivery addressed to the parties as set forth in Article 26.2. In the case of a fax, notice will be deemed received on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent. In the case of e-mail, notice will be deemed received upon actual receipt. In the case of a mailed letter, notice will be deemed received upon actual receipt. In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery. If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions.
26.4 Notice Information . Notices will be sent:

If to LESSOR:	  	INTERNATIONAL LEASE FINANCE CORPORATION
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.
Attention: Legal Department	
			
	  	Fax:	  	310-788-1990	
	  	Telephone:	  	310-788-1999	
	  	E-mail:	  	legalnotices@ilfc.com	

If to LESSEE:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE
C.V. Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col.
Santa Fe Peña Blanca Del. Álvaro Obregón 01012 México, D.F. México
Attention: Finance Director	
			
	  	Fax:	  	+503-298-3064	
	  	Telephone:	  	+503-298-1560	
	  	E-mail:	  	fernando.suarez@volaris.com.mx	
or to such other places and numbers as either party directs in writing to the other party.

	 	98	 	ARTICLE 26
NOTICES	

 	ARTICLE 27	ARBITRATION	
27.14 Arbitration of Any Dispute . Subject to the terms of Article 27.9, any dispute, controversy or claim arising out of or relating to this Lease, or the breach, termination or invalidity thereof, will be settled solely by arbitration.
27.15 Notice of Arbitration . Any notice with respect to arbitration, including a notice by LESSEE or LESSOR of arbitration commencing arbitral proceedings will be delivered to the other party as set forth in Article 26.
27.16 Rules for Arbitration . The arbitration shall be in accordance with the Rules of Arbitration (as in effect on the date of this Lease) of the International Chamber of Commerce (“ ICC ”), except that in the event of any conflict between such ICC Rules and the arbitration provisions of this Lease, the provisions of this Lease shall govern.
27.17 Number of Arbitrators . The number of arbitrators shall be three.
27.18 Appointment of Arbitrator by Each Party . Each party shall appoint one arbitrator within five (5) Business Days of receipt of the notice provided under Article 27.2. If within five (5) Business Days after receipt of the claimant’s notification of the appointment of an arbitrator the respondent has not notified the claimant in writing of the name of the arbitrator appointed by the respondent, the second arbitrator shall be appointed by the ICC acting in accordance with the rules adopted by the ICC for this purpose.
27.19 Appointment of Lead Arbitrator . The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the tribunal. If within five (5) Business Days after the appointment of the second arbitrator, the two arbitrators have not agreed upon the choice of the presiding arbitrator, then at the request of either party the presiding arbitrator will be appointed by the ICC in accordance with the rules adopted by the ICC for such purpose (provided that such presiding arbitrator will be a national of a country other than Mexico or the U.S.).
27.20 Location of Arbitration . The arbitration, including the making of the award, will take place in Los Angeles, California.
27.21 Language for Arbitration . The arbitration will be conducted in English.
27.22 Interim Measures of Protection . At the request of LESSOR, the arbitral tribunal may order or take any interim measures it deems necessary in respect of the Aircraft, including measures for the conservation of the Aircraft such as return of the Aircraft to the custody and control of LESSOR or the parking of the Aircraft. Such interim measures may be established in

	 	99	 	ARTICLE 27
ARBITRATION	

the form of an interim award. The arbitral tribunal will be entitled to require security for the costs of such measures. A request by LESSOR to a judicial authority in any jurisdiction for the repossession or parking of the Aircraft will not be deemed incompatible with or a waiver of LESSOR’s agreement to arbitrate set forth in this Lease.
27.23 Substantive Law . The substantive Laws of the State of California will be applied by the arbitrators in any arbitration.
27.24 Decision . The arbitration award will be based on and accompanied by a written opinion containing findings of fact and conclusions of law.
27.25 Prevailing Party in Dispute . In any arbitration in connection with or arising out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such arbitration. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and postjudgment Default Interest.
27.26 Waiver . LESSEE and LESSOR agree that the arbitral award will be final and binding upon them. Each of LESSEE and LESSOR agree that the arbitral award may be enforced against the parties to the arbitration proceeding or their assets wherever they may be found and that a judgment on the arbitration award may be entered in any court having jurisdiction over the parties or their assets.

	 	100	 	ARTICLE 27
ARBITRATION	

 	ARTICLE 28	GOVERNING LAW AND JURISDICTION	
28.10 California Law . This Lease is being delivered in the State of California and the Lease and all other Operative Documents will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California).
28.11 Non-Exclusive Jurisdiction in California . As permitted by Section 410.40 of the California Code of Civil Procedure, the parties hereby irrevocably submit to the non-exclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles, California. Nothing in this Lease will prevent either party from bringing suit in any other appropriate jurisdiction.
28.12 Protection of Interest in the Aircraft . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27, IF LESSOR DEEMS IT NECESSARY FOR THE CONSERVATION OF THE AIRCRAFT OR FOR THE PROTECTION OF ITS INTEREST IN THE AIRCRAFT, LESSOR IN ITS SOLE DISCRETION MAY BRING PROCEEDINGS IN ANY COURT OF COMPETENT JURISDICTION (INCLUDING BUT NOT LIMITED TO ANY OF THE COURTS DESIGNATED IN ARTICLE 28.4) IN ORDER TO OBTAIN APPROPRIATE RELIEF, INCLUDING BUT NOT LIMITED TO AN ORDER (A) REQUIRING LESSEE TO MOVE THE AIRCRAFT TO A SUITABLE AIRPORT DESIGNATED BY LESSOR AND CEASE OPERATING THE AIRCRAFT, (B) REQUIRING LESSEE TO RETURN PHYSICAL POSSESSION OF THE AIRCRAFT TO LESSOR, OR (C) AWARDING SUCH OTHER OR ADDITIONAL RELIEF PROVIDED BY APPLICABLE LAW.
28.13 LESSOR Actions in Certain Jurisdictions . Any action by LESSOR pursuant to Article 28.3 may be brought in (a) any Court of competent jurisdiction in Mexico City, Mexico, (b) any Court of competent jurisdiction in the jurisdiction where the Aircraft is located or operating, and/or (c) the Federal District Court for the Central District of California and/or the Superior Court for the State of California in Los Angeles, California.
28.14 Personal Jurisdiction . LESSEE agrees to submit to personal jurisdiction in the courts of any jurisdiction to which LESSEE flies the Aircraft or in which the Aircraft is located.
28.15 Service of Process . The parties hereby consent to the service of process (a) in the manner directed by any of the courts referred to above, (b) in accordance with Section 415.40 of the California Code of Civil Procedure by mailing copies of the summons and complaint to the person to be served by first-class mail to the address set forth in Article 26.2, postage prepaid, return receipt requested, (c) in one of the manners specified in Article 26.1 or (d) in accordance with the Hague Convention, if applicable.

	 	101	 	ARTICLE 28
GOVERNING LAW AND JURISDICTION	

28.16 Prevailing Party in Dispute . If any legal action or other proceeding is brought in connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such action or proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and post-judgment Default Interest.
28.17 Future Amendments or Agreements . With respect to any amendments to this Lease or the other Operative Documents or any other agreements to be entered into between LESSEE and LESSOR after the date of execution of this Lease in connection with the leasing of the Aircraft, including any amendment to this Lease which may be executed pursuant to Article 14.3 (“ Future Agreements ”), LESSEE and LESSOR agree that (a) Future Agreements will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California) and (b) LESSEE and LESSOR will irrevocably submit to the non-exclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles in any suit, action, claim or proceeding seeking to enforce any provision of the Future Agreements, including any claim or proceeding seeking enforcement of LESSOR’s rights and remedies arising under the Cape Town Convention (to the extent the same is applicable to the transactions contemplated herein).
28.18 Waiver . TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF LESSEE AND LESSOR HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY. EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO IN ARTICLE 28.2, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

	 	102	 	ARTICLE 28
GOVERNING LAW AND JURISDICTION	

 	ARTICLE 29	MISCELLANEOUS	
29.22 Press Releases . The parties will give copies to one another, in advance if possible, of all news, articles and other releases provided to the public media regarding this Lease or the Aircraft.
29.23 Power of Attorney . LESSEE hereby irrevocably appoints LESSOR as its attorney for the purpose of putting into effect the intent of this Lease following an Event of Default, including without limitation, the return, repossession, deregistration and exportation of the Aircraft. To evidence this appointment, LESSEE has executed the Power of Attorney in substantially the form of Exhibit H. LESSEE will take all steps required under the Laws of the State of Registration to provide such power of attorney to LESSOR.
29.24 LESSOR Performance for LESSEE . The exercise by LESSOR of its remedy of performing a LESSEE obligation hereunder is not a waiver of and will not relieve LESSEE from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.
29.25 LESSOR’s Payment Obligations . Any obligation of LESSOR under this Lease to pay or release any amount to LESSEE is conditioned upon (a) all amounts then due and payable by LESSEE to LESSOR under this Lease or under any other agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR having been paid in full, (b) all amounts then due and payable by LESSEE under any aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person having been paid in full and (c) no Default or Event of Default having occurred and continuing hereunder at the time such payment or release of payment is payable to LESSEE.
29.26 Application of Payments . Any amounts paid or recovered in respect of LESSEE liabilities hereunder may be applied to Rent, Default Interest, fees or any other amount due hereunder in such proportions, order and manner as LESSOR determines. LESSOR will promptly notify LESSEE of any such application if such application contradicts LESSEE’s instructions thereon.
29.27 Usury Laws . The parties intend to contract in strict compliance with the usury Laws of the State of California and, to the extent applicable, the U.S. Notwithstanding anything to the contrary in the Operative Documents, LESSEE will not be obligated to pay Default Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by LESSOR in connection with the Operative Documents. During any period of time in which the

	 	103	 	ARTICLE 29
MISCELLANEOUS	

then-applicable highest lawful rate is lower than the Default Interest rate, Default Interest will accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate is greater than the Default Interest rate, then LESSEE will pay Default Interest at the highest lawful rate until the Default Interest which is paid by LESSEE equals the amount of interest that would have been payable in accordance with the interest rate set forth in Article 5.7.
29.28 Delegation by LESSOR . Without contravening any terms and provisions hereof, LESSOR may delegate to any Person(s) all or any of the rights, powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and conditions as LESSOR in its absolute discretion thinks fit.
29.29 Confidentiality . The Operative Documents and all non-public information obtained by either party about the other are confidential and are between LESSOR and LESSEE only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal advisors; as required in connection with any filings of this Lease in accordance with Article 14; in connection with LESSOR’s potential sale of the Aircraft or assignment of this Lease; as required for enforcement by either party of its rights and remedies with respect to this Lease or as required by applicable Law) without the prior written consent of the other party. If any disclosure will result in an Operative Document becoming publicly available, LESSEE and LESSOR will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of such Operative Document.
29.30 Rights of Parties . The rights of the parties hereunder are cumulative, not exclusive, may be exercised as often as each party considers appropriate and are in addition to its rights under general Law. The rights of one party against the other party are not capable of being waived or amended except by an express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or amendment of that or any other such right. Any defective or partial exercise of any such rights will not preclude any other or further exercise of that or any other such right and no act or course of conduct or negotiation on a party’s part or on its behalf will in any way preclude such party from exercising any such right or constitute a suspension or any amendment of any such right.
29.31 Further Assurances . Each party agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by Law, reasonably requested by the auditors of the other party or requested by the other party to establish, maintain or protect the rights and remedies of the requesting party or to carry out and effect the intent and purpose of this Lease.

	 	104	 	ARTICLE 29
MISCELLANEOUS	

29.32 Translations of Lease . If this Lease is translated into another language, whether or not signed by LESSEE and LESSOR in such other language, solely the terms and provisions of this English version of the Lease will prevail in any dispute.
29.33 Use of Word “including” . The term “ including ” is used in this Lease without limitation.
29.34 Headings . All article and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section will be interpreted as a reference to such article, paragraph or section of this Lease.
29.35 Invalidity of any Provision . If any of the provisions of this Lease become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
29.36 Negotiation . The terms of this Lease are agreed by LESSOR from its principal place of business in Los Angeles, California.
29.37 Time is of the Essence . Time is of the essence in the performance of all obligations of the parties under this Lease and, consequently, all time limitations set forth in the provisions of this Lease will be strictly observed.
29.38 Amendments in Writing . The provisions of this Lease may only be amended or modified by a writing executed by LESSOR and LESSEE.
29.39 Consents Not to be Delayed . If any of the provisions of this Lease require the consent of any party hereto, such consent shall not be unreasonably delayed.
29.40 Counterparts . This Lease may be executed in any number of identical counterparts, each of which will be deemed to be an original, and all of which together will be deemed to be one and the same instrument when each party has signed and delivered one such counterpart to the other party.
29.41 Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or e-mail will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or e-mail will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
29.42 Entire Agreement . The Operative Documents constitute the entire agreement between the parties in relation to the leasing of the Aircraft by LESSOR to LESSEE and supersede all previous proposals, agreements and other written and oral communications in relation hereto. The parties acknowledge that there have been no representations, warranties, promises, guarantees or agreements, express or implied, except as set forth in this Lease.

	 	105	 	ARTICLE 29
MISCELLANEOUS	

IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be executed by their respective officers as of March 9, 2007.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	/s/ John L. Plueger	 		 	By:	 	/s/ Alfonso Ascencio Triujeque	
					
Name:	 	John L. Plueger	 		 	Name:	 	Alfonso Ascencio Triujeque	
					
Its:	 	President and Chief Operating Officer	 		 	Its:	 	General Counsel	
 
SIGNATURE PAGE

 	EXHIBIT A	AIRCRAFT DESCRIPTION	

Aircraft Manufacturer and Model:	  	Airbus A319-100	
		
Specification:	  	LESSEE’s Baseline Specification as set forth in Attachment 1 to this Exhibit A	
		
Seating Configuration:	  	144 Y class as set forth in Attachment 1 to this Exhibit A	
Manufacturer’s Serial Number:	  	Per Estoppel Certificate Maximum Gross Takeoff	
Weight:	  	70.0 tons Engine Manufacturer and Model: IAE V2524-A5	
		
Engine Serial Numbers:	  	Per Estoppel Certificate	
		
Engine Takeoff Thrust Rating:	  	24,480 pounds per FAA type certificate data sheet	

	 	107	 	Exhibit A
AIRCRAFT DESCRIPTION	

ATTACHMENT 1 TO EXHIBIT A
See attached pages

	 	108	 	EXHIBIT A
AIRCRAFT DESCRIPTION	

 	EXHIBIT B	PARTICIPATION AGREEMENT	
This Participation Agreement is made this      day of                     ,         (the “Participation Agreement”)
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ILFC”); and	
 
(2)	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“LESSEE”)	
RECITALS
 
(A)	Pursuant to the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“AIRBUS”) dated as of November 9, 2000, as further amended (the “Purchase Agreement”) and the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “G.T.A.”), ILFC has agreed to purchase from AIRBUS certain Airbus A319-100 model aircraft, including the aircraft bearing as of today manufacturer’s serial number [            ] and scheduled for delivery in April 2008 (the “Aircraft”);	
 
(B)	Pursuant to the Product Support Agreement (Exhibit E) applicable to the Purchase Agreement (the “Support Agreement”), AIRBUS has agreed to provide certain product support to ILK;	
 
(C)	Pursuant to the Aircraft Lease Agreement between ILFC and LESSEE dated as of March 9, 2007 (the “Lease Agreement”), ILFC has agreed to lease the Aircraft to LESSEE; (D) ILFC and LESSEE have agreed to enter into this Participation Agreement:	

	 	109	 	EXHIBIT B
PARTICIPIPATION AGREEMENT	

IT IS NOW HEREBY AGREED AS FOLLOWS:
1. Authorization for LESSEE to Participate . ILFC hereby authorizes LESSEE to participate in the following activities in connection with the delivery of the Aircraft:
(a) to inspect, pursuant to Clause 7.1 of the G.T.A., the manufacture of the Aircraft and the materials and parts thereto; and
(b) to attend and observe the acceptance tests of the Aircraft referred to in Clause 8.1 of the G.T.A.; and
(c) to receive, pursuant to Clause 15 of the Support Agreement, the technical publications set forth in Appendix 3 hereto; and
(d) to receive the benefit of a product support allowance as set forth in Appendix 3 hereto.
2. Effectivity of Participation Agreement . This Participation Agreement shall be effective from the date hereof until the earliest of:
(a) the occurrence of an Event of Default as defined in the Lease Agreement;
(b) notification by ILFC to LESSEE of the termination hereof; or
(c) transfer of Aircraft title by AIRBUS to ILFC or its designee.
3. Conditions of Participation . This Participation Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with the following provisions of the G.T.A. and the Support Agreement (copies of which are attached hereto) as if LESSEE had been named “Buyer” of the Aircraft under such agreements:
(i) Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any LESSEE representative, (bb) loss or damage to property of any LESSEE representatives and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of LESSEE’s representatives, and
(ii) Clauses 16.9 and 18.5 of the Support Agreement.

	 	110	 	EXHIBIT B
PARTICIPIPATION AGREEMENT	

(b) So long as this Participation Agreement is in full force and effect, LESSEE and not ILFC will be responsible for the liabilities and obligations set forth in section 3(a) above.
(c) For avoidance of doubt, even while this Participation Agreement is in full force and effect, ILFC will remain responsible for compliance with Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any ILFC representative, (bb) loss or damage to property of any ILFC representative and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of ILFC’s representatives.
(d) Except with respect to events occurring prior to termination of the Participation Agreement, upon termination of this Participation Agreement, ILFC shall once again be bound by Clauses 7.2 and 8.5 of the G.T.A. and Clauses 16.9 and 18.5 of the Support Agreement with respect to the Aircraft.
(e) Other than with respect to the obligations expressly assumed by LESSEE under this Participation Agreement as set forth in section 3(a) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
(f) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in sections 3(a) and (b) above, modify in any respect whatsoever its contractual rights under the said agreements.
(g) LESSEE shall not be appointed as ILFC’s agent and shall not be permitted to act on behalf or in place of ILFC without the express written authorization of ILFC and nothing contained herein shall be construed as to give such authorization.
4. Notification
(a) This Participation Agreement shall be notified by ILFC to AIRBUS by courier service immediately after the execution hereof. AIRBUS shall not be deemed to have received notice of any of the provisions hereof prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix 1 hereto.
(b) On termination of this Participation Agreement pursuant to either section 2(a) or (b) hereof, ILFC shall immediately notify AIRBUS by courier service of such

	 	111	 	EXHIBIT B
PARTICIPIPATION AGREEMENT	

termination. AIRBUS shall not be deemed to have received notice of such termination prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix 2 hereto. AIRBUS can rely on such notice without further inquiry.
(c) All notices and requests required or authorized under this Participation Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:
ILFC shall be addressed at:
10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067 U.S.A.

Attention:	  	Senior Vice President—Technical	
		
Fax:	  	1-310-788-1990	
Telephone:	  	1-310-788-1999	
LESSEE shall be addressed at:
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE
C.V. Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col.
Santa Fe Peña Blanca Del. Álvaro Obregón
01012 México, D.F.
México

Attention:	  	Finance Director	
		
Fax:	  	+503-298-3064	
Telephone:	  	+503-298-1560	

	 	112	 	EXHIBIT B
PARTICIPATION AGREEMENT	

AIRBUS shall be addressed at:

1, rond-point Maurice Bellonte 31707 Blagnac Cedex France	
		
Attention:	  	VP, Contracts Administration & Delivery Transactions	
		
Fax:	  	33-5-61-93-41-95	
Telephone:	  	33-5-61-93-32-16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.
5. Survival of Obligations . The obligations of LESSEE set forth in section 3(a) with respect to events occurring prior to termination of this Participation Agreement will survive termination of the Participation Agreement.
6. Provision of Referenced Clauses . LESSOR shall provide LESSEE with the copies of the clauses of the G.T.A. and Support Agreement referenced and required herein.
7. Assignment . The rights and obligations under this Participation Agreement are personal to the parties and shall not be assigned, transferred, sold or otherwise disposed of by either of the parties hereto.
8. Applicable Law and Jurisdiction . THIS PARTICIPATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.
9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Participation Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Participation Agreement.

	 	113	 	EXHIBIT B
PARTICIPATION AGREEMENT	

IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 		 		 	By:	 		
					
Its:	 		 		 	Its:	 		
APPENDIX 1
[DATE]
BY COURIER
AIRBUS S.A.S.
1, rond-point Maurice Bellonte 31707 Blagnac Cedex France
Attention :  VP, Contracts Administration & Delivery Transactions
 
Re:	ILFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.: PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ] (the “Aircraft”)	
Dear Sirs,
Pursuant to Section 4(a) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. dated March 9, 2007, we advise you that pursuant to the Participation Agreement (a copy of which is attached hereto), CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. has been authorized by ILFC to participate with respect to the Aircraft. This authorization shall be effective on acknowledgment of this letter by you.
We confirm for your benefit the provisions of Sections 3(c), 3(d), 3(e) and 3(f) contained therein.

Yours faithfully,	

for and on behalf of INTERNATIONAL LEASE FINANCE CORPORATION	

	 	114	 	EXHIBIT B
PARTICIPATION AGREEMENT	

CC:	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
AIRBUS S.A.S. confirms receipt of this notice and agrees to the terms of Section 3 of the Participation Agreement.
By: Its: Date:

	 	115	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 2
[DATE]
BY COURIER
AIRBUS S.A.S.
1 rond-point Maurice Bellonte 31707 Blagnac Cedex France
Attention :  VP, Contracts Administration & Delivery Transactions
 
Re:	ILFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.: PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ]	
Dear Sirs,
Pursuant to Section 4(b) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. dated             ,            we advise you that the authorization provided therein for CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. is terminated with immediate effect.

Yours faithfully,	

for and on behalf of INTERNATIONAL LEASE FINANCE CORPORATION	
 
CC:	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	

	 	116	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 3
 
1.	TECHNICAL PUBLICATIONS	
As selected by LESSEE from the Technical Data and Documentation Index attached to this Appendix 3
 
2.	PRODUCT SUPPORT ALLOWANCE	
A product support allowance in the amount of ***** which will be valid to procure product support including field service and training (pursuant to Clauses 16 and 18 of the Support Agreement, respectively), manuals, AIRBUS proprietary spare parts, and such other product support goods and services as can be purchased through AIRBUS.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	117	 	EXHIBIT B
PARTICIPATION AGREEMENT	

TECHNICAL DATA INDEX
The following index identifies the Technical Data provided in support of the Aircraft. The explanation of the table is as follows:

NOMENCLATURE	  	Self-explanatory.	
		
ABBREVIATED DESIGNATION (Abbr)	  	Self-explanatory.	
FORM
 
OL-A	ON-LINE through Airbus On-Line Services: Advanced Consultation and Navigation System	
 
CD-A	CD-ROM: Advanced Consultation and Navigation System	
 
CD-P	CD-ROM: in PDF—Portable Document Format	
 
D	DISKETTE (Floppy Disk)	
 
DD	DIGITAL DATA. Stands generally for SGML format on CD-ROM.	
 
DVD	DVD—Digital Versatile Disk	
 
P1	PRINTED ONE SIDE. Refers to manuals in paper with print on one (1) side of the sheets only.	
 
P2	PRINTED BOTH SIDES. Refers to manuals with print on both sides of the sheets.	

	 	118	 	EXHIBIT B
PARTICIPATION AGREEMENT	

					
TYPE	  	C	  	CUSTOMIZED. Refers to manuals which are applicable to an individual Airbus customer/operator fleet or aircraft.	
			
	  	G	  	GENERIC. Refers to manuals that are for all aircraft types/models/series.	
			
	  	E	  	ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.	
			
	  	P	  	PRELIMINARY. Refers to preliminary data or manuals which may consist of either:
 
•       one-time issue not maintained by revision service, or
 
•       preliminary issues maintained by revision service until final manual or data delivery, or
 
•       supply of best available data under final format -with progressive completion through revision service.	
		
ATA	  	Manuals established in general compliance with ATA 100 Revision 21 (for WB aircraft)—Revision 23 (for SA aircraft)—Revision 26 (for LR aircraft)—and digital Standards established in general compliance with ATA Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance. Subsequent revisions of the ATA Specification will be considered. QUANTITY (Qty) Self-explanatory.	
DELIVERY (Deliv)	  	Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day.	
		
	  	The number of days indicated shall be rounded up to the next regular revision release date.	

	 	119	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
OPERATIONAL MANUALS AND DATA	
Cabin Attendant Operating Manual	  	CAOM	  	P2	  	C T	  	NO	  	I	  	90	  	Only provided in existing customization	
Flight Crew Operating Manual	  	FCOM	  	P2	  	C	  	NO	  	1	  	90	  	Plus one copy per Aircraft at delivery	
	  	FCOM	  	CD-A	  	C	  	NO	  	1	  	90	  		
	  	FCOM	  	DD	  	C	  	NO	  	1	  	90	  	SGML data for further processing by the Buyer	
Flight Manual	  	FM	  	P1	  	C	  	NO	  	1	  	0	  	Plus one copy per Aircraft at delivery	
Master Minimum Equipment List	  	MMEL	  	P2	  	C	  	NO	  	1	  	180	  	Plus one copy per Aircraft at delivery	
	  	MMEL	  	DD	  	C	  	NO	  	1	  	180	  	SGML data for further processing by the Buyer	
Quick Reference Handbook	  	QRH	  	P2	  	C	  	NO	  	1	  	90	  	Plus one copy per Aircraft at delivery	
Trim Sheet	  	TS	  	P2	  	C	  	NO	  	1	  	0	  		
Weight and Balance Manual	  	WBM	  	P1	  	C	  	YES	  	1	  	0	  	For the WBM the flight deck copy is an advance copy only of the customized manual, not subject to revision or updating. Weighing Equipment List delivered two weeks after Aircraft delivery.	
Performance Engineer’s Programs	  	PEP	  	CD-A	  	C	  	NO	  	1	  	90	  	One per operator and a/c type	
Performance Programs Manual	  	PPM	  	CD-A	  	C	  	NO	  	1	  	90	  	Included in the PEP CD-ROM	

NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS	
APU Buildup Manual	  	ABM	  	P2	  	C	  	NO	  	1	  	90	  	Only for A300—A300-600/A310 (for other A/C types integrated into AMM). One per operator.	
Aircraft Maintenance Manual	  	AMM	  	CD-A	  	C	  	YES	  	2	  	90	  	Contained on “ADRES” CD-ROM for SA and LR Aircraft	
	  	AMM	  	CD-P	  	C	  	YES	  	2	  	90	  	Optional to CD-A	
	  	AMM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Schematic Manual	  	ASM	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	ASM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Wiring Lists	  	AWL	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	AWL	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Wiring Manual	  	AWM	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	AWM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Component Location Manual	  	CLM	  	P2	  	C	  	NO	  	1	  	90	  	For SA and LR Aircraft	

	 	120	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS	
Consumable Material List	  	CML	  	CD-P	  	G	  	YES	  	1	  	180	  		
Duct Repair Manual	  	DRM	  	CD-P	  	E	  	NO	  	1	  	90	  	Upon request	
Electrical Load Analysis	  	ELA	  	D	  	C	  	NO	  	1	  	0	  		
Electrical Standard Practices Manual	  	ESPM	  	CD-P	  	G	  	YES	  	1	  	90	  		
	  	ESPM	  	DD	  	G	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Electrical Standard Practices booklet	  	ESP	  	P2	  	G	  	NO	  	1	  	90	  		
Fuel Pipe Repair Manual	  	FPRM	  	P2	  	G	  	NO	  	1	  	90	  	Upon request	
Illustrated Parts Catalog (Airframe)/Additional Cross Reference Table	  	IPC/ACRT	  	CD-A	  	C	  	YES	  	1	  	90	  	Contained on “ADRES” CD-ROM for SA and LR Aircraft	
	  	IPC/ACRT	  	CD-P	  	C	  	YES	  	1	  	90	  	Optional to CD-A	
Power Plant Buildup Manual	  	PBM	  	1	  	C	  	NO	  	1	  	90	  	Supplied by power plant manufacturer—Only supplied by Airbus for A300. One per operator	

NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
Illustrated Parts Catalog (Power Plant)	  	PIPC	  		  	C	  	NO	  	1	  	90	  	Integrated in the Airframe IPC for SA and ER Aircraft for IAE engines (SA Aircraft) and Rolls-Royce engines (A340 Aircraft). For other Aircraft and engine types, supplied by Propulsion Systems Manufacturer concurrently with the Airframe IPC.	
Maintenance Facility Planning	  	MFP	  	CD-P	  	E	  	NO	  	1	  	360	  	Grouped with AC on one single CD-ROM	
Maintenance Planning Document	  	MPD	  	CD-P	  	E	  	YES	  	1	  	360	  		
Maintenance Review Board	  	MRB	  	P2	  	E	  	NO	  	1	  	360	  	MRB Report includes the Certification Maintenance Requirements (CMR) and Airworthiness Limitation Items (ALI) documents. One per operator.	
Support Equipment Summary	  	SES	  	CD-P	  	G	  	NO	  	1	  	360	  	Grouped with TEM, TEI on one single CD-ROM. One per operator.	
Tool and Equipment Bulletins	  	TEB	  	P I	  	E	  	NO	  	1	  	—	  	One per operator	
Tool and Equipment Drawings	  	TED	  	AC	  	E	  	NO	  	1	  	360	  	One per operator	
Tool and Equipment Index	  	TEI	  	CD-P	  	E	  	NO	  	1	  	360	  	Grouped with TEM, SES on a single CD-ROM. One per operator.	
Illustrated Tool and Equipment Manual	  	TEM	  	CD-P	  	E	  	YES	  	1	  	360	  	Grouped with TEM, SES on a single CD-ROM. One per operator.	
Technical Publications Combined Index	  	TPCI	  	CD-A	  	C	  	NO	  	1	  	90	  	One per operator	
Trouble Shooting Manual	  	TSM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
	  	TSM	  	CD-A	  	C	  	YES	  	2	  	90	  	Contained on “CAATS” CD-ROM for SA and LR Aircraft	
	  	TSM	  	CD-P	  	C	  	YES	  	2	  	90	  	Optional to CD-A	
	  	IPC/ACRT	  	DD	  	C	  	YES	  	1	  	90	  	Issue date to be coordinated with Initial Provisioning Data delivery included in EXHIBIT “E” Spare Parts Procurement. Useful for SGML data processing only.	

	 	121	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
STRUCTURAL MANUALS	  		  		  		  		  		  		  		
Nondestructive Testing Manual	  	NTM	  	CD-P	  	E	  	YES	  	1	  	90	  	One per operator	
Nacelle Structural Repair Manual	  	NSRM	  	P2	  	E	  	YES	  	1	  	90	  	Supplied by Propulsion System Manufacturer	
	  	NSRM	  	F	  	E	  	YES	  	1	  	90	  	Supplied by Propulsion System Manufacturer	
Structural Repair Manual	  	SRM	  	CD-P	  	E	  	YES	  	1	  	90	  		

	 	122	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
OVERHAUL DATA	  		  		  		  		  		  		  		
Component Evolution List	  	CEL	  	CD-P	  	G	  	NO	  	1	  	—  	  	Delivered as follow-on for CDS	
Component Maintenance Manual—Manufacturer	  	CMMM	  	CD-P	  	E	  	YES	  	1	  	90	  		
Component Maintenance Manual—Vendor	  	CMMV	  	PC	  	E	  	YES	  	1	  	90	  	One per operator	
Cable Fabrication Manual	  	CFM	  	CD-P	  	E	  	NO	  	1	  	90	  	One per operator	

	 	123	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMEENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
ENGINEERING DOCUMENTS	  		  		  		  		  		  		  		
Process and Material Specification	  	PMS	  	F	  	G	  	NO	  	1	  	0	  	One per operator	
Standards Manual	  	SM	  	CD-P	  	G	  	NO	  	1	  	180	  	One per operator	

	 	124	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
MISCELLANEOUS PUBLICATIONS	  		  		  		  		  		  		  		
Airplane Characteristics for Airport Planning	  	AC	  	CD-P	  	E	  	NO	  	1	  	360	  	Grouped with MFP on one single CD-ROM	
ATA Breakdown Index	  	ATBI	  	P1	  	E	  	NO	  	1	  	360	  	Optional	
CADETS (Technical Publications Training)	  	CADE	  	CD-A	  	G	  	NO	  	1	  	360	  		
Aircraft Recovery Manual	  	ARM	  	CD-P	  	E	  	YES	  	1	  	90	  		
Crash Crew Chart	  	CCC	  	P1	  	E	  	NO	  	1	  	I
80	  		
Cargo Loading System Manual	  	CLS	  	P2	  	E/C	  	NO	  	1	  	180	  	ClS is Envelope (E) for SA an LR Aircraft and Customized (C) for WB Aircraft.	
Guidelines for Customer Originated Changes	  	GCOC	  	P1	  	G	  	NO	  	1	  	0	  		
List of Applicable Publications	  	LAP	  	P2	  	C	  	NO	  	1	  	90	  		
List of Radioactive and Hazardous Elements	  	LRE	  	CD-P	  	G	  	NO	  	1	  	90	  		
Livestock Transportation Manual	  	LTM	  	P2	  	E	  	NO	  	1	  	90	  		
Service Bulletins	  	SB	  	D	  	C	  	YES	  	1	  	0	  	SGML data or further processing by the Buyer	
Service Information Letters	  	SIL	  	CD-A	  	E	  	YES	  	1	  	0	  	On TPCI-CD-ROM	
Supplier Product Support Agreements	  	SPSA	  	P2	  	E	  	NO	  	1	  	360	  	Envelope (E) for SA and LR Aircraft. One per operator	
Supplier Product Support Agreements 2000	  	SPSA	  	CD-P	  	G	  	NO	  	1	  	360	  	Based on General Conditions of Purchase (GCP) 2000. One per operator	
Transportability Manual	  	TM	  	P1	  	G	  	NO	  	1	  	180	  	One per operator	
Vendor Information Manual	  	VIM	  	CD-A	  	G	  	NO	  	1	  	360	  	One per operator	
Vendor Information Manual GSE	  	VIM/GSE	  	CD-A	  	G	  	NO	  	1	  	360	  	One per operator	
Vendor Product Support Agreements	  	VPSA	  	P2	  	E	  	NO	  	1	  	360	  	Envelope (E) for WB Aircraft. One per operator.	
WB = Wide Body: A310/A300-600 SA = SingleAisle: A318/A319/A320/A321 LR - Long Range: A330/A340

	 	125	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 4
[Copies of Clauses 7.2 and 8.5 of the General Terms Agreement and Clauses 16.9 and 18.5 of the Support Agreement]

	 	126	 	EXHIBIT B
PARTICIPATION AGREEMENT	

7.2	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO OR DEATH OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECK OUT OR INSPECTIONS UNDER THIS CLAUSE 7) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER OR ITS REPRESENTATIVES ARISING OUT OF OR IN CONNECTION WITH ANY SUCH TESTS, CHECK OUT AND INSPECTIONS UNDER THIS CLAUSE 7, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID. REPRESENTATIVES DURING ANY TESTS, CHECK OUT, INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATH OR INJURY, THE LIABILITY FOR WHICH HAS SEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 7.2, THE FORMER PARTY SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER (FOR THE PURPOSE OF THIS SUB-CLAUSE 7.2, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER).

GTA-ILFC	 	7-1	 		

8.5	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATHS OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER, ARISING OUT OF OR IN CONNECTION WITH THE OPERATION OF THE AIRCRAFT DURING ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE 8, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIMS IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATHS OR INJURY, THE LIABILITY FOR WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 8.5, THE FORMER SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER. FOR THE PURPOSE OF THIS SUB-CLAUSE 8.5, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER.

GTA-ILFC	 	8-2	 		

16.9	INDEMNITY	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (EXCEPTING INJURIES TO AND DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY, HOWSOEVER ARISING. OUT OF OR IN CONNECTION WITH PERFORMANCE OF THE SERVICES UNDER THIS CLAUSE.
THE SELLER SHALL HEREBY INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER DURING THE PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
FOR THE PURPOSE. OF THIS SUB-CLAUSE 16.8, THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER SHALL BE DEEMED TO INCLUDE THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER REFERRED TO IN SUB-CLAUSES 16.1.1 AND 16.2 ABOVE.

GTA-ILFC	 	Exh. E-60	 	12/18/89	

Exhibit “E”
 
18.5	Indemnity and Insurance	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFIES AND HOLDS HARMLESS THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, CONSEQUENTIAL DAMAGES, LOSS OF USE, BUSINESS INTERRUPTION, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATH OF SELLER’S REPRESENTATIVES PARTICIPATING IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROLS OR IN GENERAL PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OF SERVICES UDDER THIS CLAUSE 18, WHETHER THE SAID LIABILITIES, ARISE DURING OR AFTER THE COMPLETION OF THE TRAINING COURSE.

GTA-ILFC	 	Exh. E-70	 	12/18/89	

Exhibit “E”
THE SELLER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF SELLER’S SAID REPRESENTATIVES DURING THEIR PARTICIPATION IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROL OR IN GENERAL PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
IN NO EVENT WILL THE BUYER, ITS INSURERS OR REPRESENTATIVES MAKE OR CAUSE TO BE MADE A CLAIM OR LAWSUIT AGAINST THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO IN CONNECTION WITH ANY CLAIM OR LAWSUIT BROUGHT AGAINST THE BUYER, NOR WILL THE BUYER, ITS INSURERS OR REPRESENTATIVES ADD AS A PARTY DEFENDANT THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO TO ANY SUCH CLAIM OR LAWSUIT OR ANY ACTION IN CONNECTION THEREWITH.
FOR THE FLIGHT TRAINING PERIOD AS DESCRIBED IN SUB-CLAUSE 18.2.1.1 AND 18.2.1.2 THE BUYER SHALL:
 
 	(1)	INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE AGAINST THE SELLER, THE MANUFACTURER, AND AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTOR AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS IN RESPECT OF HULL ALL RISKS INSURANCE POLICY AND	
 
 	(2)	EFFECT INSURANCE TO COVER THIRD PARTY, PASSENGER AND FREIGHT LIABILITY RISKS ARISING DURING SAID FLIGHT TRAINING IN AN AMOUNT SATISFACTORY TO THE SELLER AND NAMING THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS AS ADDITIONAL INSUREDS. SUCH INSURANCE SHALL CONTAIN A CROSS-LIABILITY CLAUSE TO THE INTENT THAT EACH INSURED COVERED BY THE POLICY SHALL HAVE THE SAME PROTECTION AS WOULD HAVE BEEN AVAILABLE HAD SUCH POLICY BEEN ISSUED INDIVIDUALLY TO EACH OF THEM.	
THE BUYER SHALL DELIVER TO THE SELLER A CERTIFICATE OF INSURANCE EVIDENCING THE COVER REQUIRED BY THIS CLAUSE.

GTA-ILFC	 	Exh. E-71	 	12/18/89	

 	EXHIBIT C	CERTIFICATE OF INSURANCE (FOR LESSOR)	
[Refer to Aircraft Lease Agreement dated as of March 9, 2007 between LESSEE and LESSOR (the “ Lease ”). If applicable, insurance certificates from both the insurers and reinsurers will be provided. If there is a LESSOR’s Lender, include references to it where appropriate after references to LESSOR.]
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”) 10250	
Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.
 
Re:	CONCESIONARIA	
VUELA COMPANIA DE
AVIACION, S.A. DE C.V.
(“ LESSEE ”) Airbus
A319-100 Manufacturer’s
Serial No.: [            ]
Registration Mark:
[Aircraft registration
mark, or             
to mark place] (the “ Aircraft ”)
The following security has subscribed to the following insurance and/or reinsurance policies:
[LIST APPLICABLE POLICY NUMBERS, COMPANIES & PERCENTAGES]
THIS IS TO CERTIFY THAT, as Insurance Brokers, we have effected Fleet Insurance in respect of aircraft owned or operated by LESSEE (including the Aircraft) as specified below.
AIRCRAFT HULL ALL RISKS
COVERING :
All risks of physical loss or damage to the Aircraft from any cause (subject only to the exclusions as specified below), for an Agreed Value of Aircraft in the amount of US$            [list amount calculated in accordance with Article 19.1]
 
127

DEDUCTIBLES :
***** each and every loss (or such lesser amount as applicable to the rest of LESSEE’s fleet). Not applicable to Total Loss/Constructive Total Loss or Arranged Total Loss
GEOGRAPHICAL COVERAGE :
Worldwide
AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY COVERING :
Aircraft Third Party, Passenger, Baggage, Cargo and Mail Liability and Airline General Third Party Liability (including Premises, Hangarkeepers, Products Liability and Contractual Liability) for combined single limit of not less than ***** (or such higher amount as LESSEE may carry on any other aircraft in its fleet) any one accident/occurrence (but in the aggregate in relation to Products Liability), extended to cover LESSEE’s liability under the Lease to the extent of the risks covered by the policy including war and allied perils under Extended Coverage Endorsement as per AVN 52E (however, the total War and Allied Perils Liability Coverage including Third Party War Risks must be the same amount as the combined single limit by the purchase of Excess Third Party War Risks insurance subject only to exclusions as specified below, unless otherwise agreed by LESSOR in writing
GEOGRAPHICAL LIMITS :
Worldwide
HULL WAR AND ALLIED PERILS
COVERING :
Hull War Risks as per LSW555.D, but including (a) confiscation or requisition (including by State of Registration and state where airline is domiciled), (b) hijacking or other unlawful seizure or wrongful exercise of control of the Aircraft or crew in flight (including any attempt at such seizure or control) and covering claims excluded from Hull All Risks Policy while Aircraft outside Assured’s control by reason of perils insured under this policy, for an Agreed Value of Aircraft in the amount of US$            [list amount calculated in accordance with Article 19.1]
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	128	 		

DEDUCTIBLE :
No deductible
GEOGRAPHICAL LIMITS :
Worldwide
AIRCRAFT SPARES ALL RISKS INSURANCE
COVERING :
All risks of physical loss or damage to Aircraft Parts or spares or Engines at all times when removed from the Aircraft from whatever cause, subject only to the exclusions specified below, including the risks set down in AVN 48B other than paragraphs (a) and (b) thereof (but including paragraph (a) in respect of transit risks) for limits of not less than:
***** any one location ***** any one sending and covering: With respect to an Engine, replacement cost
With respect to Parts, replacement cost
DEDUCTIBLE :
***** each and every loss
GEOGRAPHICAL COVERAGE :
Worldwide
CONTRACTUAL INDEMNITY
LESSEE has insurance coverage for the indemnities agreed to by LESSEE pursuant to Article 17 of the Lease
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	129	 		

PERIOD OF COVERAGE (ALL POLICIES)
From the Delivery Date of Aircraft to [EXPIRATION DATE]
It is further certified that LESSOR has an interest in respect of the Aircraft under the Lease. Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of the Insurance or (except as provided in the next sentence) until the expiry or agreed termination of the Lease or until the obligations under the Lease are terminated by any action of the Insured or LESSOR and in consideration of the Additional Premium it is confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that the provisions set forth below are specifically endorsed to the Policy. Notwithstanding the foregoing, if LESSEE has retained care, custody and control of the Aircraft even after such expiry or agreed termination of the Lease and LESSOR has not expressly agreed to insure the Aircraft, the Policy will remain in full force and effect until the earlier of expiry of the Insurance or the return of the Aircraft to LESSOR.
1. UNDER THE HULL (ALL RISKS AND HULL WAR AND ALLIED RISKS) AND AIRCRAFT SPARES INSURANCES
(a) [International Lease Finance Corporation ONLY-NO OTHER CONTRACT PARTIES] In respect of any claim on the Aircraft that becomes payable on the basis of a Total Loss, settlement will be made to, or to the order of LESSOR as sole loss payee, up to the Agreed Value. With respect to repairable damage to an Aircraft or Engine, LESSOR will receive all insurance proceeds in excess of ***** provided that upon receipt by the insurance broker of written notice of a material default on the part of LESSEE, all insurance proceeds which otherwise would be payable to LESSEE will be made directly to LESSOR. In respect of any other claim, settlement (net of any relevant policy deductible) will be made with such party(ies) as may be necessary to repair the Aircraft unless otherwise agreed after consultation between the Insurers and the Insured and, where necessary under the terms of the Lease, LESSOR. Such payments will only be made provided they are in compliance with all applicable laws and regulations.
(b) Insurers agree on a 50/50 settlement in terms of AVS 103.
(c) Insurers have no right to replace the Aircraft on a Total Loss (arranged, constructive or otherwise).
(d) Insurers recognize that LESSEE and LESSOR have agreed that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.
(e) In the event of a Total Loss of the Aircraft, Insurers agree to pay LESSOR all amounts up to the Agreed Value based solely upon LESSOR’s (not LESSEE’s) execution of the
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	130	 		

appropriate form of release/discharge document. LESSOR may sign any required release in lieu of the Insured in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss.
(f) “Cut-through clause”: Insurers confirm that in the event of any claim arising under the hull insurances, the Reinsurers will in lieu of payment of the Insurers, its successors in interest and assigns, pay to the person named as sole loss payee under the original insurances that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Insurers (subject to proof of loss), it being understood and agreed that any such payment by any Reinsurers will fully discharge and release such Reinsurer from any and all further liability in connection therewith and provide for payment to be made notwithstanding (i) any bankruptcy, insolvency, liquidation or dissolution of the Insurers and (ii) that the Insurers have made no payment under the original insurance policies.
(g) Insurers confirm that under the insurance policies, if the Insured installs an engine owned by a third party on the Aircraft, either (i) the hull insurance will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss and the amount required by the third party engine owner, or (ii) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the Insured to such third party engine owner.
2. UNDER THE LEGAL LIABILITY INSURANCE
(a) Subject to the provisions of this Endorsement, the Insurance will operate in all respects as if a separate Policy had been issued covering each party insured hereunder, but this provision will not operate to include any claim arising howsoever in respect of loss or damage to the Aircraft insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds will not exceed the limits of liability stated in the Policy.
(b) The Insurance provided hereunder will be primary and without right of contribution from any other insurance which may be available to LESSOR or its successors and assigns.
(c) LESSOR and its successors, assigns, directors, officers and employees will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.
3. UNDER ALL INSURANCES
(a) LESSOR, its successors and assigns, and (with respect to Aviation and Airline General Third Party Liability only) its directors, officers and employees for their respective rights and interests, are included as Additional Insureds.
 
131

(b) The cover afforded to LESSOR by the Policy in accordance with this Endorsement will not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy.
(c) LESSOR will have no responsibility for premium and insurers will waive any right of set-off or counterclaim against LESSOR except in respect of outstanding premium in respect of the Aircraft, provided that Insurer may only set-off for premiums against the proceeds of the hull insurance for outstanding premiums in connection with hull all risks and hull war and allied perils insurance.
(d) Upon payment of any loss or claim to or on behalf of LESSOR, Insurers will to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of LESSOR indemnified hereby (but not against LESSOR). Insurers will not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers LESSOR will do all things reasonably necessary to assist the Insurers to exercise said rights.
(e) Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to LESSOR by the giving of not less than thirty (30) days notice in writing to LESSOR. Notice will be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement.
4. EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS CERTIFICATE
(a) LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.
(b) THE POLICY WILL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE LEASE WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.
SUBJECT (save as specifically stated in this Certificate) to policy terms, conditions, limitations and exclusions.

Yours faithfully,	
[BROKERS]	
 
132

 	EXHIBIT D	BROKERS’ LETTER OF UNDERTAKING (FOR LESSOR)	

Date:	  	Our Ref:	
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.	
Re: CONCESIONARIA
VUELA COMPANIA DE
AVIACION, S.A. DE C.V.
(“ LESSEE ”) Airbus
A319-100 Manufacturer’s
Serial No.: [            ]
Registration Mark:
[Aircraft registration
mark, or             
to mark place] (the “ Aircraft ”)
Dear Sirs:
We confirm that insurance has been effected for the account of [LESSEE] (the “Operator”) covering all aircraft owned or operated by them, including the above-referenced aircraft (the “ Aircraft ”). [Also confirm, if applicable, the amount of any hull all risks or hull war and allied perils on the Aircraft which LESSEE is carrying in excess of the Agreed Value (which excess insurance would be payable to LESSEE). Such excess insurance may not exceed ten percent (10%) of the Agreed Value.]
Pursuant to instructions received from the Operator and in consideration of your approving the arrangement of the Operator’s “Fleet Policy” (under which the above-referenced Aircraft is insured) through the intermediary of ourselves as Brokers in connection with the insurance (the “ Insurance ”) mentioned in our Certificate of Insurance (Reference No. [            ] dated [            ] and attached hereto), we undertake as follows:
1. In relation to the Hull and War Risks Insurance to hold to your order the insurance Slips or Contracts and any Policies which may be issued or any policies substituted (with your consent) therefor (but only insofar as the same relate to the Aircraft only) and the benefit of the Hull and War Risks Insurance thereunder, but subject to our requirements to operate the Fleet Policy insofar as it relates to any other aircraft insured thereunder.
 
133

2. As to you and your successors, assigns, directors, officers and employees, Operator’s active crew members are considered “passengers”.
3. To advise you of any of the following:
(a) If any insurer or the Operator cancels or gives notice of cancellation of any of the Insurance at least thirty (30) days (or such lesser period as may be available in the case of War and Allied Perils) before such cancellation is to take effect in respect of the Aircraft.
(b) Of any act or omission or of any event (including non-payment of premium) of which we have knowledge or are notified and which might invalidate or render unenforceable in whole or in part any of the Insurance, insofar as the same relate to the Aircraft.
(c) If we do not receive instructions to renew all or any of the Insurance at least thirty (30) days prior to their expiration.
(d) If any of the Insurance are not renewed on the same terms (save as to premium and period of cover and as you might otherwise have notified us to be acceptable to you) seven (7) days prior to expiry thereof.
The above undertakings are given subject to our continuing appointment for the time being as Insurance Brokers to the Operator.
We also undertake to advise you if we cease to be Insurance Brokers to the Operator.

Yours faithfully,	
 
134

 	EXHIBIT E	AVIATION AUTHORITY UNDERTAKING LETTER	
[Date]
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.	
Dear Sirs:
We, the (the “ Aviation Authority ”) undertake that:
1. No cancellation, alteration or change in the registration of the Aircraft or recordation of liens will be made until receipt of written consent to such specified change from LESSOR.
2. On written request of LESSOR (which will include fax), the Aviation Authority will promptly de-register the Aircraft and provide such confirmation as is requested by LESSOR together with any other confirmation or information LESSOR may require to enable the Aircraft to be re-registered in any other country or state.
3. On written request of LESSOR (which will include fax) the Aviation Authority will release, remove or cancel all liens it may have over the Aircraft, and will acknowledge in doing so that all liability for such liens as discharged are for the sole account of LESSEE.
4. The Aviation Authority will not allow the registration, use or operation of the Aircraft for any purpose other than the category of fare paying passenger transportation.
5. The Aviation Authority will consent to the export of the Aircraft on the termination of the Lease Term or at LESSOR’s written request.

Sincerely,	
 
135

 	EXHIBIT F	ESTOPPEL AND ACCEPTANCE CERTIFICATE	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”), a company organized under the laws of Mexico does hereby represent, acknowledge, warrant and agree as follows:
1. LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of March 9, 2007 (hereinafter referred to as the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSEE has this     day of                                          (Time:                    ) at                     received from LESSOR possession of:
(a) One (1) Airbus A319-100 aircraft bearing Manufacturer’s serial number [    ] and FAA registration mark [Aircraft registration mark, or to mark place], together with two (2) V2524-A5 engines bearing manufacturer’s serial numbers and (each of which has 750 or more rated take-off horsepower) and an APU bearing part number and manufacturer’s serial number    , all in airworthy condition.
(b) All Aircraft Documentation and information regarding the Aircraft, Engines, APU and Parts as per Attachment 1, Parts A and B.
(c) The miscellaneous equipment per Attachment 2 and the LESSOR-furnished equipment (BFE) per Attachment 3.
3. The Aircraft had the following seating configuration at Delivery:
                     first                     business                     coach
4. An auxiliary center tank (ACT) is / is not installed (circle one) at Delivery. If yes,
quantity of auxiliary center tanks:             
5. Lower crew rest (LD-MCR) is / is not installed (circle one) at Delivery.

	 	136	 		

6. The takeoff thrust rating of the Engines per the FAA type certificate data sheet is     pounds.
7. The maximum gross takeoff weight of the Aircraft is             (circle one)              pounds/kilos.
8. The amount of fuel on board at Delivery is:             pounds/gallons/kilos of fuel (circle one).
9. The Agreed Value of the Aircraft is US$            .
10. All of the foregoing has been delivered and accepted on the date set forth above to LESSEE’s full satisfaction and pursuant to the terms and provisions of the Lease.
11. The Aircraft, Engines, APU, Parts and Aircraft Documentation as described in the Lease have been fully examined by LESSEE and have been received in a condition fully satisfactory to LESSEE and in full conformity with the Lease in every respect.
12. The Lease is in full force and effect, LESSOR has fully, duly and timely performed all of its obligations of every kind or nature thereunder and LESSEE has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease.
13. LESSOR’s Lender may rely upon all of the foregoing in granting substantial financial accommodations to LESSOR and LESSEE understands and agrees that any funds being advanced by LESSOR’s Lender will be made in reliance upon the foregoing.
14. LESSEE has obtained all required permits, authorizations, licenses and fees of the State of Registration or any Government Entity thereof necessary in order for LESSEE to operate the Aircraft as permitted by the terms of the Lease.
Dated on the date set forth above

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
	
By:	
	
Printed Name:	
	
Title:	

	 	137	 		

ATTACHMENTS:
 
1.	List of Aircraft Documentation Part A - Manufacturer’s List of Documents for Delivery Part B - Manufacturer’s Documentation Status List (Manufacturer’s “Exhibit G”)	
 
2.	Miscellaneous Equipment List	
 
3.	BEE List	

	 	138	 		

 	EXHIBIT G	OPINION OF COUNSEL	
TO BE GIVEN BY INDEPENDENT OUTSIDE COUNSEL OF LESSEE OR OTHER LAWYERS ACCEPTABLE TO LESSOR
 
To:	International Lease Finance Corporation 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Gentlemen: This opinion is furnished to you pursuant to Article 7 of the Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”) between CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”). Defined terms in this opinion are used herein as defined in the Lease.	
I have acted as counsel for LESSEE in connection with the preparation, execution and delivery of the Lease.
In that connection I have examined each of the following:
(a) The Lease and Side Letters thereto, the Estoppel and Acceptance Certificate and the power of attorney provided by LESSEE in which, among other things, LESSEE authorizes LESSOR to take action in LESSEE’s name to deregister the Aircraft after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason (together, the “ Lease Documents ”);
(b) The charter of LESSEE and all amendments thereto;
(c) Such other documents, agreements and instruments, and such treaties, laws, rules, regulations, decrees and the like, as I have deemed necessary as a basis for the opinions hereinafter expressed.
[(d) All of the agreements and any amendments thereto between LESSEE and all other lessors and lenders of LESSEE covering other aircraft operated by LESSEE on which the Engines can be installed.]

	 	139	 		

Based upon the foregoing and having regard for legal considerations which I deem relevant, I am of the opinion that:
1. LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations under the Lease Documents.
2. No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other regulatory body or authority is required for the valid authorization, execution, delivery and performance by LESSEE of the Lease Documents.
3. The Lease Documents have each been duly authorized, executed and delivered by LESSEE. Each such instrument is a valid and binding obligation of LESSEE, enforceable in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.
4. The execution and delivery of the Lease Documents, the consummation by LESSEE of the transactions contemplated therein and compliance by LESSEE with the terms and provisions thereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any lien, charge or encumbrance upon any property of LESSEE, under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected.
5. [Describe the process in the U.S. with respect to registration of the Aircraft in the name of LESSOR and any other steps required or recommended in the U.S. in order to protect the interests of LESSOR in the Aircraft]. Such registration of the Aircraft is not inconsistent with, and would not result in the loss of, LESSOR’s title to and ownership of the Aircraft. Except for the foregoing, no other filing or recording of any instrument or document or any other acts are necessary or advisable under the Laws of the U.S. to protect LESSOR’s title to and ownership of the Aircraft. [In the opinion given at Delivery, also confirm that the Aircraft is registered in the name of LESSOR.]
6. Except for any filing or recording that may be required with the [NAME OF AIRCRAFT REGISTER] and except for [DESCRIBE SUCH OTHER FILINGS OR RECORDINGS, INCLUDING WITH THE INTERNATIONAL REGISTRY], no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of Mexico in order for the Lease to constitute a valid and perfected

	 	140	 		

lease of record relating to the Aircraft, it being understood that such counsel expresses no opinion as to the nature of LESSOR’s title to the Aircraft on the Delivery Date. [In opinion given at Delivery, also confirm that the filings and other steps described have been accomplished.]
7. Except for [DESCRIBE ANY TRANSLATION, NOTARIZATION OR OTHER REQUIREMENTS], none of the Lease Documents needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof. Each of the Lease Documents is in a proper form under the Laws of Mexico for enforcement or admission thereof into evidence in Mexico, without any further action on the part of any party other than the commencement of court proceedings in Mexico.
8. LESSEE will not be required to obtain any licenses for importation and ferrying of the Aircraft into Mexico. LESSEE has complied with all import and customs formalities in Mexico with respect to the Aircraft.
9. LESSEE holds all licenses, certificates and permits from applicable governmental authorities in Mexico necessary for the conduct of its business as a certificated air carrier and performance of its obligations under the Lease Documents.
10. To my knowledge, there are no suits or proceedings pending or threatened against LESSEE before any Government Entity against or affecting LESSEE which, if adversely determined, would have a material adverse effect on the financial condition or business of LESSEE or its ability to perform under the Lease Documents, except as described in the filings provided to LESSOR pursuant to Article 20 of the Lease.
11. Under the Laws of Mexico, LESSEE will not be required to make or deduct any withholding or other Tax from any payment it may make under the Lease Documents.
12. The obligations of LESSEE under the Lease Documents are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by law.
13. LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets have the right of immunity from suit or execution on the grounds of sovereignty in such jurisdictions and the performance by LESSEE of its obligations under the Lease Documents constitute commercial acts done for commercial purposes.
14. On termination of the Lease, LESSOR would be entitled to repossess the Aircraft and, without additional fees or duties, export it from Mexico.

	 	141	 		

15. Neither LESSEE nor LESSOR is required by the Laws of Mexico to obtain any approval, license or consent (including without limitation any exchange control approval) in order to remit to LESSOR of any amount payable under the Lease Documents.
16. There is no applicable usury or interest limitation Law in Mexico which may restrict the recovery of payments in accordance with the Lease Documents.
17. LESSOR will not violate any Law or become liable to any tax in Mexico by reason of entering into or performing its obligations under the Lease Documents and it is not necessary to establish a place of business in Mexico in order to enforce any provisions of the Lease Documents.
18. The choice of California Law to govern the Lease Documents will be upheld in any action in the courts of Mexico. Any judgment given by the United States or California courts would be recognized and accepted by the courts in Mexico.
19. [DESCRIBE STATUS OF CAPE TOWN CONVENTION IN COUNTRY], for example:
Mexico has ratified the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which were adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa (commonly known as the “Cape Town Convention”) [without any reservations or declarations in respect thereto OR with the following reservations and declarations in respect thereto] and the Lease and the other Operative Documents and the rights created thereby are valid, legal and binding thereunder and conform to the terms and conditions thereof.
or
Mexico [is not] [is] a signatory of, [and] [but] has not yet ratified, the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. [describe the ratification process and status of ratification in Mexico]

Very truly yours,	

	 	142	 		

 	EXHIBIT H	FORM OF POWER OF ATTORNEY	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ Volaris ”) hereby irrevocably appoints INTERNATIONAL LEASE FINANCE CORPORATION (“ ILFC ”), a corporation located in Los Angeles, California, U.S.A., as Volaris’s true and lawful attorney so that ILFC may take any of the following actions in the name of and for Volaris with respect to the Airbus A319-100 aircraft bearing manufacturer’s serial number {MSN of Aircraft, if known} (the “ Aircraft ”) leased by ILFC to Volaris pursuant to an Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”):
1. Pursuant to the Lease, Volaris has procured and is maintaining insurances for the Aircraft. ILFC has been named sole loss payee on the all risk hull and war risk insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft, ILFC is entitled to receive insurance proceeds in an amount specified in Article 19 of the Lease, a copy of which is attached. ILFC may take all action and sign all documents otherwise required to be performed by Volaris, including execution on behalf of Volaris of an appropriate form of discharge/release document, in order for ILFC to collect such insurance proceeds.
2. In the exercise of the rights of ILFC under the Lease to recover the Aircraft from Volaris and Mexico after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason, ILFC may take all action otherwise required to be performed by Volaris before the authorities and courts in Mexico in order to cause the Aircraft to be repossessed by ILFC, deregistered from the [NAME OF REGISTRY] and exported from Mexico.
3. In the exercise of the rights mentioned in paragraphs 1 and 2, ILFC may make any declarations or statements and sign any public or private documents which may be considered necessary or appropriate.
4. ILFC may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but not limited to employees of ILFC or legal counsel in Mexico.
ILFC is empowered to determine in its sole discretion when to exercise the powers conferred upon ILFC pursuant to this Power of Attorney. Any person, agency or company relying upon this Power of Attorney need not and will not make any determination or require any court judgment as to whether an Event of Default has occurred under the Lease or whether the Lease has been terminated. Volaris hereby waives any claims against (a) any person acting on the instructions given by ILFC or its designee pursuant to this Power of Attorney and (b) any person designated by ILFC or an officer of ILFC to give instructions pursuant to this Power of

	 	143	 		

Attorney. Volaris also agrees to indemnify and hold harmless any person, agency or company which may act in reliance upon this Power of Attorney and pursuant to instructions given by ILFC or its designee.
This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of ILFC, deregistered and exported from Mexico.
Volaris has made and delivered this Power of Attorney on             in             .

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
	
By:	
	
Printed Name:	
	
Title:	

	 	144	 		

 	EXHIBIT I	FORM OF CAPE TOWN POWER OF ATTORNEY	
Form of Irrevocable Deregistration and Export Request Authorization
(Annex referred to in Article 25 of the consolidated text of the Cape Town Convention)
[Date]
 
To:	[name of Registry Authority]	
 
Re:	Irrevocable Deregistration and Export Request Authorization	
The undersigned is the registered operator of the Airbus A319-100 aircraft bearing manufacturer’s serial number [            ] and FAA registration mark [Aircraft registration mark, or                    to mark place] (together with all installed, incorporated or attached accessories, parts and equipment, the “ Aircraft ”).
This instrument is an irrevocable deregistration and export request authorization issued by the undersigned in favor of International Lease Finance Corporation as lessor (the “Authorized Party”) under the authority of Article XIII of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. In accordance with that Article, the undersigned hereby requests:
(a) recognition that the Authorized Party or the person it certifies as its designee is the sole person entitled to:
(1) procure the deregistration of the Aircraft from the [insert name of aircraft register] maintained by [name of Registry Authority] for the purposes of Chapter III of the Convention on International Civil Aviation, signed at Chicago, on 7 December 1944; and
(2) procure the export and physical transfer of the Aircraft from [insert country]; and
(b) confirmation that the Authorized Party or the person it certifies as its designee may take the action specified in clause (a) above on written demand without the consent of the undersigned and that, upon such demand, the authorities in [insert country] shall cooperate with the Authorized Party with a view to the speedy completion of such action.

	 	145	 		

The rights in favor of the Authorized Party established by this instrument may not be revoked by the undersigned without the written consent of the Authorized Party.
Please acknowledge your agreement to this request and its terms by the appropriate notation in the space provided below and lodge this instrument in the aircraft registry maintained by [name of Registry Authority].

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
	
By: Printed Name: Title: Date:	
Agreed to and lodged on the date specified below.

[NAME OF REGISTRY AUTHORITY]	
	
By: Its: Date:	

	 	146	 		

 	EXHIBIT J	ASSIGNMENT OF RIGHTS (AIRFRAME)	
This Assignment of Rights is made this      day of                     ,         (the “ Assignment Agreement ”)
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ ILFC ”); and	
 
(2)	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”)	
1. Preamble. In connection with the lease by ILFC to LESSEE of one new Airbus A319-100 model aircraft bearing manufacturer’s serial number [    ] (the “ Aircraft ”), reference is made to the following documents:
(a) the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“ AIRBUS ”) dated as of November 9, 2000, as further amended (the “ Purchase Agreement ”), under which ILK agreed to purchase the Aircraft;
(b) the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “ G.T.A. ”);
(c) the Product Support Agreement set forth in Exhibit E to the G.T.A. (the “ Support Agreement ”);
(d) the Aircraft Lease Agreement between ILFC and LESSEE dated as of March 9, 2007 (the “ Lease Agreement ”); and
(e) the Participation Agreement between ILFC and LESSEE dated as of             ,         (the “ Participation Agreement ”).

	 	147	 		

2. Assignment . Pursuant to the Lease Agreement, ILFC will lease the Aircraft to LESSEE, including in such Lease Agreement a commitment to assign to LESSEE certain warranty and other rights related to the Aircraft under the Purchase Agreement, the G.T.A. and the Support Agreement. With effect from the date hereof, ILFC therefore hereby assigns to LESSEE and LESSEE accepts the assignment on the terms and conditions specified herein of the following rights (the “ Rights ”) under the provisions indicated (the “ Assigned Provisions ”) with respect to the Aircraft:
(a) the benefit of the rights with respect to the Aircraft under Clause 12 (Warranties and Service Life Policy) of the G.T.A.; and
(b) the rights with respect to the Aircraft under Clause 13 (Patent Indemnity) of the G.T.A.; and
(c) the benefit of the remaining rights with respect to the Aircraft under Clause 15 of the Support Agreement as set forth in paragraph 1(c) of the Participation Agreement; and
(d) the benefit of the remaining part of the product support allowance as set forth in paragraph 1(d) of the Participation Agreement.
3. Conditions of Assignment . This Assignment Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof (copies of which are attached hereto), with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(b) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in section 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.

	 	148	 		

(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 above received by ILFC in connection with the Aircraft.
(d) Other than with respect to the obligations assumed by LESSEE under this Assignment Agreement as set forth in sections 3(a) and 3(c) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
4. Reassignment . Upon termination of the Lease Agreement and/or definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, upon receipt of such notice by AIRBUS, the remaining rights contained herein shall automatically be reassigned to ILFC. AIRBUS can rely on such notice without further inquiry.
5. Assignment by LESSEE . The rights of ILFC and LESSEE under this Assignment Agreement in respect of the Purchase Agreement, the G.T.A. and the Support Agreement shall not be further assigned by the parties hereto.
6. Notification
(a) This Assignment Agreement shall, at the expense of LESSOR, be notified to AIRBUS within 2 weeks of the date hereof pursuant to Article 1690 of the French Civil Code.
(b) All notices and requests required or authorized under this Assignment Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:
ILFC shall be addressed at 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.

Attention:	  	Senior Vice President-Technical	
		
Fax:	  	310-788-1990	
Telephone:	  	310-788-1999	

	 	149	 		

LESSEE shall be addressed at: CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col. Santa Fe Peña Blanca Del. Álvaro Obregón 01012 México, D.F. México

Attention:	  	Finance Director	
		
Fax:	  	[            ]	
Telephone:	  	[            ]	
AIRBUS shall be addressed at: 1 Rond-Point Maurice Bellonte 31707 Blagnac, CEDEX, France

Attention:	  	VP, Contracts Administration & Delivery Transactions	
		
Fax:	  	(33) 5.61.93.41.95	
Telephone:	  	(33) 5 61 93 32 16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.
7. Consent of AIRBUS . It shall be a condition to the validity of this Assignment Agreement that AIRBUS execute a Consent substantially in the form set forth in Schedule 1 hereto.
8. Applicable Law and Jurisdiction . THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.

	 	150	 		

9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Assignment Agreement.
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
By:	 		 	By:	
			
Its:	 		 	Its:	
SCHEDULE 1
[DATE]
 
Re:	ILFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“LESSEE”): ASSIGNMENT OF RIGHTS FOR AIRBUS A319-100 AIRCRAFT MSN [            ]	
Dear Sirs,
 
1.	Reference is made to the Assignment of Rights dated            between ILFC and LESSEE (the “ Assignment Agreement ”) concerning the assignment of certain warranty rights under the Purchase Agreement and the G.T.A. and certain customer support rights under the Support Agreement with respect to the Aircraft.	
 
2.	All terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.	
 
3.	AIRBUS hereby consents to the assignment and reassignment contained in sections 2 and 4 respectively of the Assignment Agreement on the terms and conditions therein, subject to the following conditions:	
(a) AIRBUS shall have received formal notification of the Assignment Agreement within two weeks of the date hereof pursuant to Article 1690 of the French Civil Code.

	 	151	 		

(b) Nothing contained in the Assignment Agreement shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in subparagraph 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.
(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 of the Assignment Agreement received by ILFC in connection with the Aircraft.
(d) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(e) Other than with respect to the obligations assumed by LESSEE under the Assignment Agreement as set forth in sections 3(a) and 3(c) of the Assignment Agreement, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
 
4.	This Consent shall be governed by and construed in accordance with the laws of the State of New York and any dispute arising hereunder shall be referred to the federal court located in New York, New York. Nothing in this clause will prevent any party from making a claim in a court of competent jurisdiction in California or France.	
 
5.	Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shallkeep confidential the terms and conditions of this AIRBUS Consent and the Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to the Assignment Agreement.	

For and on behalf of AIRBUS S.A.S.	
	
By: Title: Date:	

	 	152	 		

					
Signed in acknowledgement for and on behalf of	 		 	Signed in acknowledgement for and on behalf of	
			
INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
By:	 		 	By:	
			
Its:	 		 	Its:	

	 	153	 		

 	EXHIBIT K	ASSIGNMENT OF RIGHTS (ENGINES)	
ASSIGNMENT AGREEMENT
This Agreement is made this      day of                     , 20    .
AMONG:

INTERNATIONAL LEASE FINANCE CORPORATION	  	a corporation whose place of business is at 10250 Constellation Boulevard, 34th Floor, U.S.A. (hereinafter called “ Lessor ”) of the first part; and	
		
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	  	a corporation whose place of business is at [            ] (hereinafter called “ Lessee ”) of the second part; and	
		
IAE INTERNATIONAL AERO ENGINES AG	  	a joint stock company organized and existing under the laws of Switzerland whose principal place of business is at IAE Building, 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108 (hereinafter called “ IAE ”) of the third part.	
WHEREAS:
 
A.	Lessor owns Airbus A319-100 type aircraft which are equipped with IAE V2500 engines.	
 
B.	Lessor proposes to lease or has leased to Lessee one Airbus A319-100 aircraft, bearing manufacturer’s serial number [            ], equipped with two (2) IAE V2524-A5 engines bearing manufacturer’s serial numbers [            ] and [            ] (the “ Engines ”).	
 
C.	Lessor and IAE are parties to a V2500 General Terms of Sale Agreement referenced IAE/ILFC dated December 9, 1992 (which together with the Exhibits and Side Letters thereto, as amended and supplemented from time to time, is hereinafter referred to as the “ Support Contract ”) for the sale and support by IAE and the purchase by Lessor of those items defined in the Support Contract and hereinafter referred to as “ Supplies ”.	
In the Support Contract, Lessor is referred to as “ ILFC ”.
 
D.	Lessee wishes to take an assignment of certain rights and obligations of Lessor under the Support Contract and Lessor is willing to give and IAE is willing to consent to such assignment as hereinafter provided.	

	 	154	 		

NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
CLAUSE 1	DEFINITIONS	
Terms used in this Agreement shall have the same meanings as those given to them in the Support Contract except as otherwise noted.
 
CLAUSE 2	ASSIGNMENT	
Subject to all other clauses of this Agreement and for as long as the lease agreement between Lessor and Lessee has not been terminated:
 
 	2.5	With respect to the Engines leased by Lessor to Lessee, Lessor hereby assigns and transfers to Lessee all of the rights and interest of Lessor under the following portions of the Support Contract (the “ Assigned Rights ”):	

2.1.1	  	Clause 1	  	Definitions - with the exception of subclauses 1.4, 1.7 and 1.8	
			
	  	Clause 3	  	Spare Parts Provisions with the exception of subclause 3.13.1	
			
	  	Clause 4	  	Warranties, Guarantees and Liabilities	
			
	  	Clause 5	  	Product Support Services	
			
	  	Clause 6	  	Miscellaneous	
			
2.1.2	  	Exhibit A	  	Support Contract Specification	
			
	  	Exhibit C	  	Product Support	
			
	  	Exhibit D    	  	Warranties, Guarantees & Plans	
Such portions of the Support Contract as are hereby assigned have been previously provided to Lessee by Lessor, and Lessee hereby acknowledges receipt of the same.

	 	155	 		

 	2.6	Lessee hereby assumes and accepts the assignment and transfer of the Assigned Rights of Lessor as provided for in Clause 2.1 above and agrees to accept all of the limitations, obligations and liabilities contained in the Support Contract relating to the Assigned Rights.	
 
 	2.7	IAE hereby consents to the assignment and transfer to Lessee of all of the Assigned Rights of Lessor as provided in Clause 2.1 above and agrees that it will allow Lessee to exercise in its own name all of the Assigned Rights of Lessor.	
 
 	2.8	References in the Support Contract to Lessor (whether as “ILFC”, “Airline”, “Operator” or otherwise) shall, with respect to the Assigned Rights, include Lessee except where the context requires otherwise.	
 
CLAUSE 3	PAYMENT FOR SPARE PARTS	
Notwithstanding Clause 2 above, payment for all purchases by Lessee shall be due upon delivery or, at IAE’s option, prior to delivery of the purchased items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed on any of Lessee’s property, or (b) Lessee is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding-up laws or other similar legislation, or (c) Lessee becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a judgment rendered against Lessee, or (e) Lessee is unable or refuses to make payment to IAE in accordance with any of Lessee’s obligations to IAE.
 
CLAUSE 4	LAW	
This Agreement shall be governed by and construed in accordance with the laws of New York, U.S.A. (other than its rules of conflicts of laws).
 
CLAUSE 5	AMENDMENT	
 
 	5.1	This Agreement shall not be amended in any way other than by agreement in writing executed by all of the parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement. All future amendments to the Support Contract with respect to the Assigned Rights shall not require the written approval of Lessee except in such cases where Lessee’s rights or obligations are impacted. Any amendment in violation of this clause shall be null and void.	
 
 	5.2	This Agreement shall not be amended or terminated orally.	
 
CLAUSE 6	FURTHER ASSIGNMENT	
Lessee shall not be entitled to further assign or transfer the Assigned Rights without the prior written consent of IAE.

	 	156	 		

CLAUSE 7	COUNTERPARTS	
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original and each counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorized officers the day and year first before written:

FOR: INTERNATIONAL LEASE FINANCE CORPORATION	 		 	FOR: CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
By:	 		 	By:	
			
Its:	 		 	Its:	

FOR: IAE INTERNATIONAL AERO ENGINES AG	
	
By:	
	
Its:	

	 	157	 		

 	EXHIBIT L	RETURN ACCEPTANCE RECEIPT	
Date:                     ,             
1. CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSOR has this     day of                    ,         (Time:            ) at                     received from LESSEE possession of:
(a) One (1) Airbus A319-100 Aircraft bearing Manufacturer’s serial number {MSN of Aircraft, if known}, together with two (2) V2524-A5 Engines bearing manufacturer’s serial numbers             and             , an APU bearing manufacturer’s serial number             , and all Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts, as listed in the Document Receipt attached hereto.
3. The Aircraft had the following seating configuration at return:
                     first                     business                     coach
4. An auxiliary center tank (ACT) is / is not installed (circle one) at return. If yes, quantity of auxiliary center tanks:             
5. Lower crew rest (LD-MCR) is / is not installed (circle one) at return.
6. A Thales Avionics Integrated Standby Flight Display (ISFD)/Integrated Standby Instrument System (ISIS) was / was not installed (circle one) in the Aircraft by LESSEE during the Lease Term (applicable only if Thales ISFD/ISIS was not installed at Delivery).

	 	158	 		

7. The Airframe, Engines, APU and Parts had the following hours/cycles at return:
(a) Airframe:
Maximum gross takeoff weight:                     pounds/kilos (circle one)
Total hours:                      Total cycles:                     
(b) Operating thrust of Engines at return:
                    pounds
(c) Engine #1 Information:

 	  	Serial No	  	Total Hours	  	Total Cycles	
ENGINE #1	  		  		  		

ENGINE #1 MODULES	  	Total
Hours	  	Total
Cycles	  	Hours since last
Module
Performance
Restoration	  	Cycles since
last Module
Performance
Restoration	
Low Pressure Compressor and Gearbox	  		  		  		  		
High Pressure Compressor/Diffuser	  		  		  		  		
High Pressure Turbine/Nozzle/Combustor	  		  		  		  		
Low Pressure Turbine	  		  		  		  		

ENGINE #1 LIFE-LIMITED PART NAME	  	Part Number	  	Cycles Remaining to Next
Life-limited Part Removal	

					
	 	159	 		

					
ENGINE #1 LIFE-LIMITED PART NAME	  	Part Number	  	Cycles Remaining to Next
Life-limited Part Removal	
	  		  		
(d) Engine No. 2 Information:

 	  	Serial No	  	Total Hours	  	Total Cycles	
ENGINE #2	  		  		  		

ENGINE #2 MODULES	  	Total Hours	  	Total Cycles	  	Hours since last
Module
Performance
Restoration	  	Cycles since
last Module
Performance
Restoration	
Low Pressure Compressor and Gearbox	  		  		  		  		
High Pressure Compressor/Diffuser	  		  		  		  		
High Pressure Turbine/Nozzle/Combustor	  		  		  		  		
Low Pressure Turbine	  		  		  		  		

ENGINE #2 LIFE-LIMITED PART NAME	  	Part Number	  	Cycles Remaining to Next
Life-limited Part Removal	

	  		  		
(e) APU:
Part number             
Serial number             

	 	160	 		

Total hours:            
Total cycles:            
            hours/             cycles since last hot section refurbishment
            hours/             cycles remaining on APU life-limited Parts
(f) Landing Gear:

Position	  	Serial No.	  	Total
Hrs/Cycles/Days	  	Hrs/Cycles/Days
since last
Overhaul	  	Date of last
Overhaul	
					
Nose	  		  		  		  		
					
Left Main	  		  		  		  		
					
Right Main	  		  		  		  		
8. The amount of fuel on board at return is            pounds/gallons/kilos of fuel (circle one).
9. Other technical information regarding the Aircraft and its components are correctly set forth on the Technical Evaluation Report (in the form of Exhibit O) attached hereto.
10. With reference to Article 13.10 of the Lease regarding reimbursement from the Reserves after return of the Aircraft:
 
 	    	There are no claims for reimbursement from the Reserves which will be submitted after the date hereof.	
or
 
 	    	Claims for reimbursement from the Reserves will be submitted after the date hereof for the following:	
Type of Work              Estimated Invoice Amount
11. LESSEE confirms that it has delivered to LESSOR all free-of-charge kits for the Aircraft received by LESSEE.

	 	161	 		

12. The above specified aircraft, engines and documentation are hereby accepted by LESSOR subject to (a) the provisions of the Lease and (b) correction by LESSEE (or procurement by LESSEE at LESSEE’s cost) as soon as reasonably possible of the discrepancies specified in the list attached.
13. Subject to the following paragraph, the leasing of the Aircraft by LESSOR to LESSEE pursuant to the Lease is hereby terminated without prejudice to LESSEE’s continuing obligations under the Lease including, without limitation, paragraph 11(b) above and Articles 16 and 17.
14. LESSEE represents and warrants that during the term of the Lease all maintenance and repairs to the Airframe and Engines were performed in accordance with the requirements contained in the Lease. LESSEE further confirms that all of its obligations under the Lease whether accruing prior to the date hereof or which survive the termination of the Lease by their terms and accrue after the date hereof, will remain in full force and effect until all such obligations have been satisfactorily completed.
15. This Return Acceptance Receipt is executed and delivered by the parties in [place].
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in their respective company names by their duly authorized representatives as of the

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
By: By: Printed Name: Printed Name: Its: Its:
ATTACHMENTS:
 
1.	List of discrepancies	
 
2.	List of Aircraft Documentation	
 
3.	Current Aircraft layout passenger arrangement (LOPA)	
 
4.	Incident/accident letter	
 
5.	Dent and damage chart	
 
6.	List of loose equipment	
 
7.	List of free-of-charge kits	
 
8.	Engine disk sheets	
 
9.	Engine power assurance test conditions and results	
 
10.	Engine trend data	
 
11.	Technical Evaluation Report (in the form of Exhibit O)	

	 	162	 		

 	EXHIBIT M	MONTHLY REPORT	
(SEE FOLLOWING SHEET)

	 	163	 		

MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Page 1 of     
Report Due Date:

To:	  	INTERNATIONAL LEASE FINANCE CORPORATION	  	Fax: (310) 788-1990	
	  	10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Attn: Finance Department	
			
	  	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	  		

From:	  		  		  		  		
Contact.	  		  		  		  	Fax:	
									
AIRCRAFT TYPE:	  	Airbus A319-10	  		  		  		
ENGINE TYPE:	  	V2524-A5	  		  	REGISTRATION:    	  	[Aircraft registration mark, or              to mark place]	
			
SERIAL NUMBER: {MSN of Aircraft, if known} MONTH OF:	  		  		
NOTE: PLEASE RECORD TIME IN HOURS AND MINUTES NOT DECIMALS.

Aircraft Total Time Since New As Of Last Month:	  	Hours:             Min:            	
Aircraft Total Time Since New:	  	Hours              Min:            	
Aircraft Total Cycles Since New:	  	Cycles:            	
Airframe Hours Flown During Month:	  	Hours:             Min:            	
Airframe Cycles/Landings During Month:	  	Cycles:            	

Page 2 of __

   	  	HOURS OR
CYCLES FLOWN DURING MONTH
(if applicable)	  	x	 	  	US$ PER
HOUR OR
CYCLE (if
applicable)	  	=	  	RESERVES (if
particular type of
Reserves calculated by
calendar month, list
monthly amount)	
TOTAL AIRFRAME:	  		  				  		  		  		
TOTAL LANDING GEAR:	  		  				  		  		  		
TOTAL APU:	  	Hrs:            	  	 	x	  	  		  	=	  		
Original Engine Serial Number:	  	Hrs:             Min:            	  	 	x	  	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	 	x	  	  		  	=	  		
Original Engine Serial Number:	  	Hrs:             Min:            	  	 	x	  	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	 	x	  	  		  	=	  		
Original Engine Serial Number:	  	Hrs:             Min:            	  	 	x	  	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	 	x	  	  		  	=	  		
TOTAL AMOUNT OF RESERVES (US$) PAID THIS MONTH:	  		  	US$	

ENGINE SERIAL NUMBER:
 
ORIGINAL POSITION: ACTUAL LOCATION:
 
CURRENT THRUST RATING:	
		
	 	HOURS:/MIN:	
Total Time Since New As Of Last Month:	 		
Total Time Since New:	 		
Total Cycles Since New:	 		
Hours Flown During Month:	 		
Cycles During Month:	 		

Page 3 of     
 
IMPORTANT:	IF ILFC-OWNED ENGINE IS AIRCRAFT, IT MUST BE REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY ON THIS FORM.	

ENGINE SERIAL NUMBER:
 
ORIGINAL POSITION: ACTUAL LOCATION:
 
CURRENT THRUST RATING:

	 	HOURS:/MIN:	
Total Time Since New As Of Last Month:	 		
Total Time Since New:	 		
Total Cycles Since New:	 		
Hours Flown During Month:	 		
Cycles During Month:	 		

 	EXHIBIT N	AIRCRAFT DOCUMENTATION	
AIRCRAFT RECORDS
 
1.	Copies of original Certificates delivered by Airbus, such as:	
 
 	a.	Airworthiness Certificate for Export	
 
 	b.	Radio installation conformity certificate	
 
 	c.	Noise limitation certificate	
 
2.	Copies of original Documents delivered by Airbus, such as:	
 
 	a.	Airworthiness Directive Compliance list	
 
 	b.	Aircraft inspection report	
 
 	c.	Aircraft Definition Report	
 
 	d.	Weighing report	
 
3.	Copies of current Certificates:	
 
 	a.	Airworthiness Certificate	
 
 	b.	Noise limitation	
 
 	c.	Radio license	
 
 	d.	Interior material burn certificates	
 
 	e.	Certificate of Export	
 
 	f.	Aircraft deregistration confirmation	
 
 	g.	Aircraft Registration	
 
4.	Letters signed and stamped by Quality Assurance:	
 
 	a.	Current aircraft hours and cycles	
 
 	b.	Current engines hours and cycles	
 
 	c.	Accident and Incident report	
 
 	d.	Summary of Maintenance Program	
 
 	e.	AD compliance during the lease term	
 
5.	Aircraft log books and Aircraft Definition Report	
 
6.	Aircraft Hard Time (HT) inspection status	
 
7.	One year forecast for HT inspection	
 
8.	Aircraft Modification status, including service bulletins	
 
9.	Last weighing report prior to redelivery	
 
10.	AD compliance report with original signoffs	
 
11.	Corrosion Prevention Control Program compliance summary	
 
167

12.	Routine and non-routine job cards of the Return Check	
 
13.	Routine and non-routine maintenance work cards for tasks performed during the Lease Term that were not repeated at or superseded by the Return Check	
 
14.	Past year pilot and maintenance discrepancies	
 
15.	Major and Minor structural repairs with applicable approvals	
 
168

16.	Compass Swing report of the last three years	
 
17.	Cabin Configuration drawing (LOPA)	
 
18.	Emergency equipment location drawing	
 
19.	Engineering data package for all modifications	
ENGINES RECORDS
 
1.	Last test cell run reports	
 
2.	Life-limited Parts status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Engine Modification / service bulletin /inspection report and applicable forms	
 
5.	Last heavy maintenance records for each module	
 
6.	Engine log books	
 
7.	Engine removal history	
 
8.	Past year trend monitoring reports	
 
9.	Historical borescope reports	
 
10.	Engine component report	
APU RECORDS
 
1.	APU status (FH, FC, limits)	
 
2.	Life-limited Part status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Modification status	
 
5.	Last heavy maintenance documents	
 
6.	APU log books	
 
7.	Last test cell report	
COMPONENT RECORDS
 
1.	Aircraft component inventory	
 
2.	Hard time component inventory	
 
3.	All required serviceable tags	
 
4.	Landing Gear status with last overhaul and life-limited Part status	
 
5.	AD compliance report with original signoffs	
 
6.	Modification status	
 
7.	Auxiliary fuel tank log book	
 
169

 	EXHIBIT O	TECHNICAL EVALUATION REPORT	
(SEE FOLLOWING SHEETS)
 
170

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

TABLE OF CONTENTS

		
AIRCRAFT SUMMARY	 	 	1	  	
		
MAINTENANCE & INSPECTION	 	 	2	  	
		
LANDING GEAR	 	 	3	  	
		
ENGINES	 	 	4	  	
		
AUXILIARY POWER UNIT (APU)	 	 	6	  	
		
PASSENGER CABIN CONFIGURATION (Seating)	 	 	7	  	
		
GALLEY PROVISIONS	 	 	7	  	
		
LAVATORIES, AUDIO/ENTERTAINMENT, CARGO, INTERIOR	 	 	9	  	
		
FUEL, WEIGHT & BALANCE	 	 	10	  	
		
AVIONICS SYSTEMS	 	 	10	  	
		
INSPECTOR RECORD	 	 	14	  	

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
					
AIRCRAFT SUMMARY as of	  	(date):	 	 	

Aircraft Make	 	Airbus Industries	  	Model	 	 	
				
FUS No.	 	 	  	S/N	 	 	

MFG Date:	 	 	

Current Operator:	 	 	 		 		 		
					
Current Registration:	 	 	 		 	Country:	 	 	
					
Previous Registration:	 	 	 		 	Country:	 	 	

Annual Utilization: Hour /Cycle Ratio: Total Aircraft Ti me: TAT (Hrs) As of (date): Total	 	 	

Aircraft Cycles: TAC (Cyc)	 	 	 		 	 	
				
Time Since Last “C” or	 	 	 		 	 	
Equivalent Check: (Hrs) (Cyc)	 	 	 		 	 	
				
Time Since Last “5Y or 10Y” or
Equivalent Structural Check: (Hrs) (Cyc)	 	 	 		 	 	

Engine Make: Model:	 	 	 		  	 	  		
					
Engine:	 	1 S/N	 		  	2 S/N:	  		
					
TSN: (Hrs)	 	 	 		  	 	  		
					
CSN: (Cyc)	 	 	 		  	 	  		
IMPORTANT NOTE: THE ENGINE SERIAL NUMBERS SPECIFIED ON THIS REPORT REFLECT THE LESSOR OWNED ENGINE SERIAL NUMBERS. IF THE ENGINE SERIAL NUMBERS ARE NOT IDENTIFIED ON THIS REPORT, THEN PLEASE PROVIDE DATA FOR THE ENGINES ORIGINALLY DELIVERED WITH THE AIRCRAFT (LESSOR OWNED ENGINES).
 
Page 1

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
MAINTENANCE PROGRAM GENERAL

Aircraft Maintenance Program Provided By: [    ] Operator [    ] Other: Program	 	 	
		
Approved By Authority Of: [    ] FAA Approved [    ] Other: Repair Station  Providing	 	 	

Service:	 	 	
	
Repair Station Number: FAA Approved? [    ] Yes [    ] No	
	
Primary Line Maintenance Provided By?: [    ] Operator [    ] Contract Service	
	
Reliability Controlled Maintenance Program? [    ] Yes [    ] No	
		
Component Tags Available For Controlled Components:	 	[    ] Yes [    ] No	

 	  	At Aircraft Delivery	  	Currently Approved By
Local Aviation Authority	  	Currently
Operated/Maintained	
				
ETOPS Qualification:	  	Minutes	  	Minutes	  	Minutes	

Auto Land Qualification: (Circle one that applies) CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIa, IIIb, IIIc	

MAINTENANCE & INSPECTION PROGRAM DESCRIPTION

Check	  	Operator’s
Nomenclature	  	Calendar	  	Frequency
Hours	  	Cycles	  	Number of
Phases	
						
“C”	  		  		  		  		  		

“5Y/ 10Y” or Equivalent	  		  		  		  		
	  		  	 	  	 	  	 	  	 	
MAINTENANCE & INSPECTION PROGRAM STATUS

 	  	Phase or Equivalent	  	Date	  	Aircraft TAT	  	Aircraft TAC	
					
Next “C” Phase or Equivalent:	  		  		  		  		

Last “C” Phase or Equivalent:	  		  		  		  		

Time Remaining:	  		  		  		  		
   	  	 	  	(Days)	  	(Hrs)	  	(Cyc)	
					
Structural Cards Worked During Last “C” Phase?:	  		  		  	[    ] Yes	  	[    ] No	
					
CPCP Cards Worked During Last “C” Phase?	  		  		  	[    ] Yes	  	[    ] No	
 
Page 2

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
					
Next “5Y or 10Y” Phase or Equivalent:	 	                            	 		
			
Last “5Y or 10Y” Phase or Equivalent:	 	                             	 		
Time Remaining:

 	  	(Days)	 	  	(Hrs)	  	(Cyc)	
				
CPCP Cards Worked During Last “5Y or 10Y” Phase?:	  	 	                    	  	  	[    ] Yes            	  	[    ] No            	

Date of Last ATC Transponder Test:	 	#1                                   	 	#2                                   	
		
Date of Last Flight Recorder Check:	 	 	
		
Date of Last Aircraft Weighing:	 	 	
LANDING GEAR

NLG Tires:	 	(Size)	 	 	  	(MPH Rating)	 	 	  	(MFG)	 	 	
							
MLG Tires:	 	(Size)	 	 	  	(MPH Rating)	 	 	  	(MFG)	 	 	

Brake Manufacture:	  	 	  	Type:         [    ] Steel	  	            [    ] Carbon	  		

NOSE:	  	P/N	  		  	S/N	  		
	  		  	                        	  	                                	  	                              	
Last Overhaul	  		  	(Date)            	  	(Hrs)                	  	(Cyc)                      	
					
Agency Performing Overhaul Service:	  		  		  	                                                 	  	Cert#                      	

Approved Overhaul Interval:	  		  	(Days)	  	(Hrs)	  	(Cyc)                      	

Landing Gear Time Since Overhaul	  		  	(Days)	  	(Hrs)	  	(Cyc)                      	
	  		  		  		  	                              	
Time Remaining to Next Overhaul:	  		  	(Days)	  	(Hrs)	  	(Cyc)                      	
	  		  		  		  	                              	
LEFT MAIN:	  	P/N	  		  	S/N	  		
	  		  	                        	  	                                	  		
Last Overhaul:	  		  	(Date)	  	(Hrs)	  	(Cyc)                      	
					
Agency Performing Overhaul Service:	  		  	                        	  	                                	  	Cert#                      	
					
Approved Overhaul Interval:	  		  	(Days)	  	(Hrs)	  	(Cyc)                      	

 
 
Page 3

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 

Landing Gear Time Since Overhaul	  		  	(Days)	  	(Hrs)	  	(Cyc)	
					
Time Remaining to Next Overhaul:	  		  	(Days)	  	(Hrs)	  	(Cyc)	
					
RIGHT MAIN:	  	P/N	  		  	S/N	  		

Last Overhaul:	  		  	(Date)	  	(Hrs)	  	(Cyc)	
					
Agency Performing Overhaul Service:	  		  		  	                    	  	Cert#	
					
Approved Overhaul Interval:	  		  	(Days)	  	(Hrs)	  	(Cyc)	
					
Land Visit Time Since Overhaul	  		  	(Days)	  	(Hrs)	  	(Cyc)	
					
Time Remaining to Next Overhaul:	  		  	(DaysTest	  	(Hrs)	  	(Cyc)	
ENGINES
ENGINE MAINTENANCE PROGRAM

Engine Maintenance Program Provided By:	 	 	
Engine Condition Monitoring Trend Analysis Program?                                         [     ] Yes                     [    ] No

Engine Oil Type:	 	 	

Current Thrust Rating:	 	 	 	Lbs	
			
Certified Thrust Rating:	 	 	 	Lbs (from data plate)	
Engine(s) operated at INCREASED or DECREASED Thrust Rating; Program limitations & required Mods. to operate at designated thrust rating
ENGINE SPECIFICATIONS
ENGINE NUMBER 1

Engine Make: Model: S/N:	  		  		  		
	  	                                     	  		  	                                     	
Date of Mfg:	  	Total Time        (Hrs)	  		  	(Cyc)	
Time Since Last Performance	  		  		  		
Restoration Visit: (Visit Date) (Hrs) (Cyc) Time Since Last Shop Visit: (Visit Date) (Hrs) (Cyc) Test Cell	
EGT Margin:	  	                                     	  	                                     	  	                                     	

 
Page 4

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
			
Work Scope of Last Shop Visit:	 	 	
		
Agency Performing Service:	 	 	

Agency FAA Approved?: [    ] Yes [    ] No Cert. #:	 	                                         	

1st LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/Insp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
			
2nd LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/Insp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
 
*	Provide a copy of Performing Disk Sheet for all modules.	
ENGINE SPECIFICATIONS
ENGINE NUMBER 2

Engine Make:                                      	  	Model:                                              	  	S/N:                                                                                                                  	
				
Date of Mfg:	  	Total Time:	  	(Hrs)	  	(Cyc)	

				
Time Since Last Performance	  		  		  		
	
Restoration Visit: (Visit Date) (Hrs) (Cyc) Time Since Last Shop Visit: (Visit Date) (Hrs) (Cyc) Test	

Cell EGT Margin:	  		  		  		

Work Scope of Last Shop Visit:	  		

Agency Performing Service:	  		

Agency FAA Approved?: [ ] Yes [ ] No Cert. #:	  		  		

							
1st LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/Insp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
 
Page 5

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
							
2nd LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/lisp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
 
*	Provide a copy of a current Disk Sheet for all modules.	
AUXILIARY POWER UNIT

APU Make: Model: S/N: Date of Mfg: Total Time: (Hrs) (Cyc) APU Times Are Recorded By: [ ] APU Clock or [ ] A/C	

Time Ratio: :	  		  		  		

Time Between Overhaul:	  		  		  		
	  	 	  	 	  	 	
(Hrs) (Cyc)	  		  		  		

Time Since Last Hot Section Refurbishment: (Date) (Hrs) (Cyc) Time Since Last Overhaul: (Date)	
	
(Hrs) (Cyc) Time Since Last Shop Visit: (Date) (Hrs) (Cyc) Work Scope:	
	
Agency Performing Service: Location: Cert. #: Agency FAA Approved?: [ ] Yes [ ] No APU Oil Type:	

1st LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/lisp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
			
2nd LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/Insp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
 
Page 6

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
PASSENGER CABIN CONFIGURATION
SEATING CONFIGURATION
Present Configuration Occupancy:                          No. of Handicap Seats Installed:                         
FIRST CLASS

Pax Qty:                       	 	Seat Mfg:                       	 	Model:                       	 	P/N:                       	
				
Seats Fireblocked?	 	[    ] Yes	 	[    ] No	 	Color:                       	
				
16 G Seat Installation	 	[    ] Yes	 	[    ] No	 		
				
In Seat Video:	 	[    ] Yes	 	[    ] No	 		
				
In Seat Power:	 	[    ] Yes	 	[    ] No	 		
				
BUSINESS CLASS	 		 		 		
				
Pax Qty:                       	 	Seat Mfg:                       	 	Model:                       	 	P/N:                       	
				
Seats Fireblocked?	 	[    ] Yes	 	[    ] No	 	Color:                       	
				
16 G Seat Installation	 	[    ] Yes	 	[    ] No	 		
				
In Seat Video:	 	[    ] Yes	 	[    ] No	 		
				
In Seat Power:	 	[    ] Yes	 	[    ] No	 		
				
COACH CLASS	 		 		 		
				
Pax Qty:                       	 	Seat Mfg:                       	 	Model:                       	 	P/N:                       	
				
Seats Fireblocked?	 	[    ] Yes	 	[    ] No	 	Color:                       	
				
16 G Seat Installation	 	[    ] Yes	 	[    ] No	 		
				
In Seat Video:	 	[    ] Yes	 	[    ] No	 		
				
In Seat Power:	 	[    ] Yes	 	[    ] No	 		

 
					
Provisions for Life Vests Under Seats?:	  	[    ] Yes	  	[    ] No Manufacturer	

	  	 	  	Part Number:	  	 	

Emergency Escape Path Lighting:	  	[    ] Floor Mounted	  	    [    ] Seat Mounted	  		
				
Configuration Drawing Number:	  	 	  	    Source:	  	 	
				
Engineering Order / Installation	  	Document:	  		  		
				
Installation FAA Approved?:	  	[    ] Yes	  	    [    ] No	  	Method of Approval:                	
 
*	Provide current LOPA, Emergency Equipment Layout, and IFE Layout.	

	  		  		
	  		  	 	
GALLEY PROVISIONS
GALLEY’s ARE (Check one): (            ) Atlas Standard (            ) KSSU Standard (            ) Other

GALLEY LOCATION	  	MANUFACTURER	  	PART NUMBER	  	EQUIPPED	
				
	  		  		  	Water                 Power	
1.                              	  	                                 	  		  	[    ]                     [    ]  	

 
Page 7

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 

2.	  		  	[    ]	  	[    ]	
				
3.	  		  	[    ]	  	[    ]	
				
4.	  		  	[    ]	  	[    ]	
				
5.	  		  	[    ]	  	[    ]	
				
6.	  		  	[    ]	  	[    ]	
				
7.                              	  	                                 	  	[    ]	  	[    ]	
				
8.                              	  	                                 	  	[    ]	  	[    ]	
				
9.                              	  	                                 	  	[    ]	  	[    ]	
				
10.                             	  	                                 	  	[    ]	  	[    ]	
NOTE: Galley Locations per Spec or LOPA drawing i.e., GL G2 etc. Galley Location numbers above correspond to the numbers below.

OVENS	  	FULL SIZE
CARTS	  	1/2 SIZE
CARTS	  	CHILLERS	  	COFFEE
MAKERS	  	WATER
BOILERS	  	HOT CUPS	  	OTHER	
								
1.	  		  		  		  		  		  		  		

2.	  		  		  		  		  		  		  		

3.	  		  		  		  		  		  		  		

4.	  		  		  		  		  		  		  		

5.	  		  		  		  		  		  		  		

6.	  		  		  		  		  		  		  		

7.	  		  		  		  		  		  		  		

8.	  		  		  		  		  		  		  		

9.	  		  		  		  		  		  		  		

10.	  		  		  		  		  		  		  		

	  		  		  		  		  		  		  		

	  		  		  		  		  		  	 	  	 	

Page 8

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
LAVATORIES

Number of Lavatories:	 	 	 	Handicap Provisions?:	  	[    ] Yes	  	[    ] No	
				
Locations:	 	 	  		  		
IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM

Boarding Music:	  	[    ] Yes	  	[    ] No	
			
No Auto Evac & Warning:	  	[    ] Yes	  	[    ] No	
			
No Pre-Recorded Announcement:	  	[    ] Yes	  	[    ] No	
			
No Passenger Entertainment (Audio):	  	[    ] Yes	  	[    ] No	
			
No Audio On Demand (AOD):	  	[    ] Yes	  	[    ] No	
			
Passenger Entertainment (Video):	  	[    ] Yes	  	[    ] No	
No Video Manufacturer:                                         
Video System:                                                          

Video On Demand (VOD):	 	[    ] Yes	 	[    ] No	 		 		 		
						
Entertainment Controls (PCU) Installed?	 	[    ] Yes	 	[    ] No	 		 		 		
								
VTR Format:	 		 	[    ] VHS	 	[    ]Hi-8	 	[    ] Other	 		 		 		
							
[    ] Projector (Check All that Apply)	 	[    ] PSU Monitor	 		 	[    ] Aisle Monitor	 		 		 		
						
Passenger En-Route Information Display:	 		 	[    ] Yes	 	[    ] No	 		 		
								
Telephone:	 	[    ] Yes	 	[    ] No	 	[    ] Leased	 	[    ] Owned	 		 	Satellite: [    ] Yes	 	[    ] No	
CARGO COMPARTMENT

Cargo Loading System Installed:	  	[    ] Yes	  	[    ] No	
			
Smoke/Fire Detection System Installed:	  	[    ] Yes	  	[    ] No	
			
Fire Suppression System Installed:	  	[    ] Yes	  	[    ] No	
INTERIOR COLORS

Interior Color Scheme:	 	 	 	Carpets:	 	 	 	Curtains:	 	 	
PLACARDS & LIGHTED SIGNS

English?:                    [    ] Yes                    [    ] No	  	Bi-Lingual?:                    Yes[    ]                     [    ] No	
				
First Language:	 	 	  	Second Language:	 	 	
 
Page 9

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
FUEL SYSTEM

Total Fuel Capacity:	 		  	U.S. Gallons	  	[    ] Lbs or [    ] Kilos	
				
Number of Tanks:	 	 	  		  		
				
Auxiliary Tanks Installed?:	 		  	[    ] Yes	  	[    ] No	

Auxiliary Tank Capacity:	 	 	 	U.S. Gallons	  	 	  	[    ] Lbs or [    ] Kilos	

Fuel Instrumentation / Calibration:	  	[    ] U.S. Pounds	  	[    ] Kilograms	
WEIGHT & BALANCE

Has Aircraft Been Modified For Increased Gross Weight by Current Lessee?:	  	[    ] Yes	  	[    ] No	

From	 	 	 	MTOGW	  	To	 	 	 	MTOGW	
									
Weight & Balance Manual Document No.:	 	 	  		 	Rev:	 	 	
For the below weights specify AFM approved limits:

 	  	 	  	POUNDS	 	 	  	KILOS	
			
Maximum Takeoff Gross Weight: (MTOGW) / Maximum Taxi Weight: (MTW)	 	/	  	 	
			
Maximum Landing Weight: (MLW) / Manufacturer’s Empty Weight: (MEW)	 	/	  	 	
			
Maximum Zero Fuel Weight: (MZFW) / Operational Empty Weight: (OEW)	 	/	  	 	
				
AFM measured in:	  	Pounds or Kilograms	  	 	 	 	
				
	  	Celsius or Fahrenheit	  	 	 	 	
AVIONICS SYSTEMS
22 AUTO FLIGHT

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART
NUMBER	
				
	  	FMGC - Flight Management & Guidance Computer:	  	 	  	 	
				
	  	FAC - Flight Augmentation Compute	  	 	  	 	
				
	  	FCU - Flight Control Unit:	  	 	  	 	
				
	  	MCDU - Multipurpose Control	  	 	  	 	
				
	  	Display Unit:	  	 	  	 	
				
	  	Windshear (Check one):	  	[    ] Reactive	  	[    ] Predictive	
 
Page 10

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
23 COMMUNICATIONS

QTY	  	COMPONENT	  	MANUFACTURER	  	 	
	  	CIDS Director - Cabin	  	Intercommunications Data System	  	MODEL or PART	
	  		  		  	NUMBER	
	  	HE Transceiver:	  		  	 	
	  	VHF Transceiver:	  	 	  	 	
	  	Solid State Cockpit Voice Recorder:	  	 	  	 	
	  	PRAM Tape Reproducer	  		  	 	
	  	(Pre-Recorded PAX Address):	  	 	  	 	
	  	MPES Tape Reproducer (Audio Entertainment):	  	 	  	 	
	  	Tape Reproducer (Video Entertainment):	  	 	  	 	
	  	Audio Management Unit/SELCAL Decoder:	  	 	  	 	
	  	ACARS Management Unit:	  	 	  	 	
	  	RMP - Radio Management Pane	  	 	  	 	

 
Page 11

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
AVIONICS SYSTEMS (continued)
27 FLIGHT CONTROL COMPUTER

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	ELAC - Elevator/Aileron Computer:	  	 	  	 	
				
	  	SFCC - Slat/flap Control Computer:	  	 	  	 	
				
	  	SEC - Spoiler/Elevator Computer:	  	 	  	 	
				
	  	FCDC - Flight Control Data Concentrator:	  	 	  	 	
31 INDICATING AND RECORDING

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	Multifunction Printer: DFDR - Flight Data Recorder:	  	 	  	 	
				
	  	FDIU - Digital Flight Data Interface Unit:	  	 	  	 	
				
	  	Accelerometer:	  	 	  	 	
				
	  	FWC - Flight Warning Computers:	  	 	  	 	
				
	  	QAR - Quick Access Recorder:	  	 	  	 	
				
	  	AIDS - Aircraft Integrated Data System:	  	 	  	 	
ELECTRONIC INSTRUMENT SYSTEM (EIS)

	 	PFD - Primary Flight Display:	  		  	 	
				
	 	ND - Navigation Display:	  	 	  	 	
				
	 	SDACS - System Data Acquisition Concentrators:	  	 	  	 	
				
	 	Display Management Computers:	  		  	 	
				
	 	EWD - Engine/Warning Display:	  		  	 	
				
	 	SD - System Display:	  	 	  	 	
 
Page 12

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
AVIONICS SYSTEMS (continued)

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	CFDIU - Centralized Fault Display Interface:	  	 	  	 	
34 NAVIGATION

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART
NUMBER	
				
	  	ADIRU - Air Data/Inertial Reference System:	  	 	  	 	
				
	  	DME - Distance Measuring Equipment Interrogators:	  	 	  	 	
				
	  	VHF VOR/Marker Beacon Receiver:	  	 	  	 	
				
	  	VHF ILS Receiver or Multi Mode Receiver:	  	 	  	 	
				
	  	DDRMI - Digital Distance & Radio Magnetic Indicator:	  	 	  	 	
				
	  	Radio Altimeter Transceiver:	  	 	  	 	
				
	  	Weather Radar Transceiver:	  	 	  	 	
				
	  	TCAS - Traffic Alert and Collision Avoidance System Computer:	  	 	  	 	
				
	  	ATC - Air Traffic Control System Transponder:	  	 	  	 	
				
	  	Microwave Landing Receiver:	  	 	  	 	
				
	  	GPWS - Ground Proximity Warning System:	  	 	  	 	
				
	  	ADF - Automatic Direction Finder Receiver:	  		  	 	

				

	  		  	 	  	 	

 
Page 13

INSPECTOR RECORD

INSPECTED BY:	 	 	 		 	DATE:	 	 	
					
OPERATOR:	 	 	 		 	REGISTERED OWNER:	 	 	

ADDRESS OF OPERATOR:	 	 	

		

CONTACT (Name/Title):	 	 	

TELEPHONE:	 	 	 		 	TELEFAX:	 	 	

Email Address:	 	 	

Department Contact	  	Name	  	Phone	  	Fax	  	Email	
					
Quality Control:	  		  		  		  		

Power Plant Engineering:	  		  		  		  		

Maintenance Programs/Planning:	  		  		  		  		

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.12

 
AIRCRAFT LEASE AGREEMENT
Dated as of March 9, 2007
BETWEEN
CONCESIONARIA VUELA COMPANIA DE AVIACIÓN, S.A. DE C.V.
as LESSEE
and
INTERNATIONAL LEASE FINANCE CORPORATION
as LESSOR

 

Aircraft Make and Model:	 	New Airbus A319-100	
		
Aircraft Manufacturer’s Serial Number:	 	Per Estoppel and Acceptance Certificate	
		
Make and Model of Engines:	 	IAE V2524-A5	
		
Serial Numbers of Engines:	 	Per Estoppel and Acceptance Certificate	
	
NEW AIRCRAFT NO. 2	

TABLE OF
CONTENTS

ARTICLE 1	 	SUMMARY OF TRANSACTION	  	 	2	  	
1.1	 	Description of Aircraft	  	 	2	  	
1.2	 	Scheduled Delivery Date and Location	  	 	2	  	
1.3	 	Initial Lease Term	  	 	2	  	
1.4	 	Extension Lease Option	  	 	2	  	
1.5	 	Security Deposit	  	 	2	  	
1.6	 	Transaction Fee	  	 	3	  	
1.7	 	Rent During Lease Term	  	 	3	  	
1.8	 	Reserves	  	 	4	  	
1.9	 	Additional Rent for Excess Airframe and Engine Cycles	  	 	4	  	
1.10	 	Country of Aircraft Registration	  	 	4	  	
1.11	 	Agreed Value of Aircraft	  	 	5	  	
1.12	 	LESSOR’s Bank Account	  	 	5	  	
			
ARTICLE 2	 	DEFINITIONS	  	 	6	  	
2.1	 	General Definitions	  	 	6	  	
2.2	 	Specific Definitions	  	 	12	  	
			
ARTICLE 3	 	PLACE AND DATE OF DELIVERY	  	 	14	  	
3.1	 	Place of Delivery	  	 	14	  	
3.2	 	Scheduled Delivery Date	  	 	14	  	
3.3	 	Delivery subject to Manufacturer Delivery	  	 	14	  	
3.4	 	No LESSOR Liability	  	 	14	  	
3.5	 	Total Loss of Aircraft prior to Delivery	  	 	14	  	
3.6	 	Cancellation for Delay	  	 	14	  	
			
ARTICLE 4	 	LEASE TERM AND EXTENSION OPTION	  	 	15	  	
4.1	 	Initial Lease Term	  	 	15	  	
4.2	 	Lease Extension Option	  	 	15	  	
4.3	 	“Lease Term” and “Expiration Date”	  	 	15	  	
4.4	 	“Termination Date”	  	 	15	  	
			
ARTICLE 5	 	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	  	 	16	  	
5.1	 	Security Deposit	  	 	16	  	
5.2	 	Transaction Fee	  	 	17	  	

							
5.3	 	Rent	  	 	17	  	
5.4	 	Reserves	  	 	18	  	
5.5	 	Additional Rent for Excess Cycles	  	 	19	  	
5.6	 	LESSOR’s Bank Account	  	 	19	  	
5.7	 	Default Interest	  	 	20	  	
5.8	 	No Deductions or Withholdings	  	 	20	  	
5.9	 	Value Added Taxes	  	 	21	  	
5.10	 	Wire Transfer Disbursement Report	  	 	21	  	
5.11	 	Net Lease	  	 	21	  	
5.12	 	Currency Indemnity	  	 	22	  	
5.13	 	LESSOR Performance of LESSEE Obligation	  	 	22	  	
5.14	 	Consideration for Rent and other Amounts	  	 	22	  	
			
ARTICLE 6	 	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	  	 	23	  	
6.1	 	LESSEE Selection of Aircraft	  	 	23	  	
6.2	 	Participation Agreement	  	 	23	  	
6.3	 	Procurement of BFE	  	 	23	  	
6.4	 	Assignment of Training	  	 	23	  	
6.5	 	LESSEE Inspection of Aircraft	  	 	23	  	
6.6	 	Aircraft at Delivery	  	 	23	  	
6.7	 	Delivery of the Aircraft to LESSEE	  	 	24	  	
6.8	 	LESSEE Acceptance of Aircraft	  	 	24	  	
			
ARTICLE 7	 	PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	  	 	25	  	
7.1	 	Pre-Delivery Requirements	  	 	25	  	
7.2	 	Delivery Requirements	  	 	26	  	
7.3	 	Post-Delivery Requirements	  	 	27	  	
			
ARTICLE 8	 	DISCLAIMERS AND WAIVERS	  	 	29	  	
8.1	 	“As Is, Where Is”	  	 	29	  	
8.2	 	Waiver of Warranty of Description	  	 	29	  	
8.3	 	LESSEE Waiver	  	 	30	  	
8.4	 	Conclusive Proof	  	 	30	  	
8.5	 	No Liability to Repair of Replace	  	 	30	  	
8.6	 	No Waiver	  	 	31	  	
8.7	 	Consideration for Waivers	  	 	31	  	
			
ARTICLE 9	 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	  	 	32	  	
9.1	 	Warranties	  	 	32	  	

	 	ii	 	TABLE OF CONTENTS	

							
9.2	 	Reassignment	  	 	32	  	
9.3	 	Warranty Claims	  	 	32	  	
			
ARTICLE 10	 	OPERATION OF AIRCRAFT	  	 	33	  	
10.1	 	Costs of Operation	  	 	33	  	
10.2	 	Compliance with Laws	  	 	33	  	
10.3	 	Training	  	 	33	  	
10.4	 	No Violation of Insurance Policies	  	 	33	  	
10.5	 	Flight and Airport Charges	  	 	33	  	
			
ARTICLE 11	 	SUBLEASES	  	 	35	  	
11.1	 	No Sublease without LESSOR Consent	  	 	35	  	
11.2	 	LESSOR Costs	  	 	35	  	
11.3	 	Permitted Sublessees	  	 	35	  	
11.4	 	Any Approved Sublease	  	 	35	  	
11.5	 	Assignment of Sublease	  	 	36	  	
11.6	 	Application of Cape Town Convention	  	 	36	  	
11.7	 	Wet Leases	  	 	36	  	
11.8	 	Continued Responsibility of LESSEE	  	 	36	  	
			
ARTICLE 12	 	MAINTENANCE OF AIRCRAFT	  	 	37	  	
12.1	 	General Obligation	  	 	37	  	
12.2	 	Specific Engine Requirements	  	 	37	  	
12.3	 	Specific Obligations	  	 	39	  	
12.4	 	Replacement of Parts	  	 	40	  	
12.5	 	Removal of Engines	  	 	41	  	
12.6	 	Removal of APU	  	 	41	  	
12.7	 	Pooling of Engines, APU and Parts	  	 	42	  	
12.8	 	Installation of Engines on other aircraft	  	 	42	  	
12.9	 	Modifications	  	 	43	  	
12.10	 	Performance of Word by Third Parties	  	 	44	  	
12.11	 	Reporting Requirements	  	 	44	  	
12.12	 	Maintenance Policies and Procedures Manuals	  	 	44	  	
12.13	 	LESSOR Inspection Rights	  	 	45	  	
			
ARTICLE 13	 	USE OF RESERVES	  	 	47	  	
13.1	 	Airframe Reserves (6 Year Check)	  	 	47	  	
13.2	 	Airframe Reserves (12 Year Check)	  	 	47	  	
13.3	 	Engine Performance Restoration Reserves	  	 	47	  	
13.4	 	Engine LLP Reserves	  	 	47	  	

	 	iii	 	TABLE OF CONTENTS	

							
13.5	 	Landing Gear Reserves	  	 	48	  	
13.6	 	APU Reserves	  	 	48	  	
13.7	 	Reimbursement	  	 	48	  	
13.8	 	Reimbursement Adjustment	  	 	49	  	
13.9	 	Costs in Excess of Reserves	  	 	50	  	
13.10	 	Reimbursement after Termination Date	  	 	50	  	
13.11	 	Total Loss	  	 	50	  	
			
ARTICLE 14	 	TITLE AND REGISTRATION	  	 	51	  	
14.1	 	Title to the Aircraft	  	 	51	  	
14.2	 	Registration of Aircraft	  	 	51	  	
14.3	 	Cape Town Convention	  	 	51	  	
14.4	 	Filing of this Lease	  	 	52	  	
			
ARTICLE 15	 	IDENTIFICATION PLATES	  	 	53	  	
15.1	 	Airframe Identification Plates	  	 	53	  	
15.2	 	Engine Identification Plates	  	 	53	  	
			
ARTICLE 16	 	TAXES	  	 	54	  	
16.1	 	General Obligation of LESSEE	  	 	54	  	
16.2	 	Exceptions to Indemnity	  	 	54	  	
16.3	 	After-Tax Basis	  	 	56	  	
16.4	 	Timing of Payment	  	 	56	  	
16.5	 	Contests	  	 	56	  	
16.6	 	Refunds	  	 	56	  	
16.7	 	Cooperation in Filing Tax Returns	  	 	56	  	
16.8	 	Survival of Obligations	  	 	57	  	
			
ARTICLE 17	 	INDEMNITEES	  	 	58	  	
17.1	 	General Indemnity	  	 	58	  	
17.2	 	Exceptions to General Indemnities	  	 	59	  	
17.3	 	After-Tax Basis	  	 	60	  	
17.4	 	Timing of Payment	  	 	60	  	
17.5	 	Subrogation	  	 	60	  	
17.6	 	Notice	  	 	60	  	
17.7	 	Refunds	  	 	60	  	
17.8	 	Defense of Claims	  	 	60	  	
17.9	 	No Double Recovery	  	 	60	  	
17.10	 	Survival of Obligation	  	 	61	  	
			
ARTICLE 18	 	INSURANCE	  	 	62	  	
18.1	 	Categories of Insurance	  	 	62	  	
18.2	 	Write-back of any Date Recognition Exclusion	  	 	62	  	

	 	iv	 	TABLE OF CONTENTS	

							
18.3	 	Write-backs of LSW555.D and AVN48C Exclusions	  	 	62	  	
18.4	 	Installation of Third Party Engine	  	 	62	  	
18.5	 	LESSOR Coverage for LESSEE’s Employees	  	 	62	  	
18.6	 	Insurance for Indemnities	  	 	63	  	
18.7	 	Insurance required by Manufacturer	  	 	63	  	
18.8	 	Renewal	  	 	63	  	
18.9	 	Assignment of Rights by LESSOR	  	 	63	  	
18.10	 	Insurance for Wet Lease Operations	  	 	63	  	
18.11	 	Other Insurance	  	 	63	  	
18.12	 	Information	  	 	64	  	
18.13	 	Currency	  	 	64	  	
18.14	 	Grounding of Aircraft	  	 	64	  	
18.15	 	Failure to Insure	  	 	64	  	
18.16	 	Reinsurance	  	 	64	  	
18.17	 	Limit of Hull in favor of LESSEE	  	 	65	  	
			
ARTICLE 19	 	LOSS, DAMAGE AND REQUISITION	  	 	66	  	
19.1	 	Definitions	  	 	66	  	
19.2	 	Notice of Total Loss	  	 	67	  	
19.3	 	Total Loss of Aircraft or Airframe	  	 	67	  	
19.4	 	Surviving Engine(s)	  	 	68	  	
19.5	 	Total Loss of Engine and not Airframe	  	 	68	  	
19.6	 	Total Loss of APU	  	 	69	  	
19.7	 	Other Loss or Damage	  	 	70	  	
19.8	 	Copy of Insurance Policy	  	 	71	  	
19.9	 	Government Requisition	  	 	71	  	
			
ARTICLE 20	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	  	 	72	  	
20.1	 	Representations and Warranties	  	 	72	  	
20.2	 	Covenants	  	 	74	  	
			
ARTICLE 21	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	  	 	77	  	
21.1	 	Representations and Warranties	  	 	77	  	
21.2	 	Covenants of Quiet Enjoyment	  	 	77	  	

	 	v	 	TABLE OF CONTENTS	

							
ARTICLE 22	 	FINANCIAL AND OTHER INFORMATION	  	 	78	  	
			
ARTICLE 23	 	RETURN OF AIRCRAFT	  	 	79	  	
23.1	 	Date of Return	  	 	79	  	
23.2	 	Last Engine Shop Visits	  	 	79	  	
23.3	 	Technical Report	  	 	79	  	
23.4	 	Return Location	  	 	79	  	
23.5	 	Full Aircraft Documentation Review	  	 	80	  	
23.6	 	Maintenance Policies and Procedures Manuals	  	 	80	  	
23.7	 	Aircraft Inspection	  	 	80	  	
23.8	 	Certificate of Airworthiness Matters	  	 	81	  	
23.9	 	General Condition of Aircraft at Return	  	 	82	  	
23.10	 	Checks Prior to Return	  	 	85	  	
23.11	 	Part Lives	  	 	87	  	
23.12	 	Export and Deregistration of Aircraft	  	 	89	  	
23.13	 	Delay in Return of Aircraft Due to LESSOR Work Requests	  	 	90	  	
23.14	 	LESSEE’s Continuing Obligations	  	 	90	  	
23.15	 	Airport and Navigation Charges	  	 	91	  	
23.16	 	Return Acceptance Receipt	  	 	91	  	
23.17	 	Indemnities and Insurance	  	 	91	  	
23.18	 	Storage	  	 	92	  	
			
ARTICLE 24	 	ASSIGNMENT	  	 	93	  	
24.1	 	No Assignment by LESSEE	  	 	93	  	
24.2	 	Sale or Assignment by LESSOR 	  	 	93	  	
24.3	 	LESSOR’s Lender	  	 	94	  	
24.4	 	LESSEE Cooperation	  	 	94	  	
24.5	 	Advance Consent Under Cape Town Convention	  	 	94	  	
24.6	 	Protections	  	 	94	  	
			
ARTICLE 25	 	DEFAULT OF LESSEE	  	 	96	  	
25.1	 	LESSEE Notice to LESSOR	  	 	96	  	
25.2	 	Events of Default	  	 	96	  	
25.3	 	LESSOR’s General Rights	  	 	98	  	
25.4	 	Deregistration and Export of Aircraft	  	 	99	  	
25.5	 	Cape Town Convention Remedies	  	 	99	  	
25.6	 	LESSEE Liability for Damages	  	 	100	  	
25.7	 	Waiver of Default	  	 	101	  	
25.8	 	Present Value of Payments	  	 	101	  	
25.9	 	Use of “Termination Date”	  	 	101	  	

	 	vi	 	TABLE OF CONTENTS	

							
ARTICLE 26	 	NOTICES	  	 	102	  	
26.1	 	Manner of Sending Notices	  	 	102	  	
26.2	 	Notice Information	  	 	102	  	
			
ARTICLE 27	 	ARBITRATION	  	 	103	  	
27.1	 	Arbitration of Any Dispute	  	 	103	  	
27.2	 	Notice of Arbitration	  	 	103	  	
27.3	 	Rules for Arbitration	  	 	103	  	
27.4	 	Number of Arbitration	  	 	103	  	
27.5	 	Appointment of Arbitrator by Each Party	  	 	103	  	
27.6	 	Appointment of Lead Arbitrator	  	 	103	  	
27.7	 	Location of Arbitration	  	 	103	  	
27.8	 	Language for Arbitration	  	 	103	  	
27.9	 	Interim Measures of Protection	  	 	103	  	
27.10	 	Substantive Law	  	 	104	  	
27.11	 	Decision	  	 	104	  	
27.12	 	Prevailing Party in Dispute	  	 	104	  	
27.13	 	Waiver	  	 	104	  	
			
ARTICLE 28	 	GOVERNING LAW AND JURISDICTION	  	 	105	  	
28.1	 	California Law	  	 	105	  	
28.2	 	Non-Exclusive Jurisdiction in California	  	 	105	  	
28.3	 	Protection of Interest in the Aircraft	  	 	105	  	
28.4	 	LESSOR Actions in Certain Jurisdictions	  	 	105	  	
28.5	 	Personal Jurisdiction	  	 	105	  	
28.6	 	Service of Process	  	 	105	  	
28.7	 	Prevailing Party in Dispute	  	 	106	  	
28.8	 	Future Amendments or Agreements	  	 	106	  	
28.9	 	Waiver	  	 	106	  	
			
ARTICLE 29	 	MISCELLANEOUS	  	 	107	  	
29.1	 	Press Releases	  	 	107	  	
29.2	 	Power of Attorney	  	 	107	  	
29.3	 	LESSOR Performance for LESSEE	  	 	107	  	
29.4	 	LESSOR’s Payment Obligations	  	 	107	  	
29.5	 	Application of Payments	  	 	107	  	
29.6	 	Usury Laws	  	 	107	  	
29.7	 	Delegation by LESSOR	  	 	108	  	
29.8	 	Confidentiality	  	 	108	  	

	 	vii	 	TABLE OF CONTENTS	

							
29.9	 	Rights of Parties	  	 	108	  	
29.10	 	Further Assurances	  	 	108	  	
29.11	 	Translations of Lease	  	 	109	  	
29.12	 	Use of Word “including”	  	 	109	  	
29.13	 	Headings	  	 	109	  	
29.14	 	Invalidity of any Provision	  	 	109	  	
29.15	 	Negotiation	  	 	109	  	
29.16	 	Time is of the Essence	  	 	109	  	
29.17	 	Amendments in Writing	  	 	109	  	
29.18	 	Consents Not to be Delayed	  	 	109	  	
29.19	 	Counterparts	  	 	109	  	
29.20	 	Delivery of Documents by Fax or E-mail	  	 	109	  	
29.21	 	Entire Agreement	  	 	110	  	
			
EXHIBIT A	 	AIRCRAFT DESCRIPTION	  	 	112	  	
			
EXHIBIT B	 	PARTICIPATION AGREEMENT	  	 	114	  	
			
EXHIBIT C	 	CERTIFICATE OF INSURANCE (FOR LESSOR)	  	 	132	  	
			
EXHIBIT D	 	BROKER’S LETTER OF UNDERTAKING (FOR LESSOR)	  	 	138	  	
			
EXHIBIT E	 	AVIATION AUTHORITY UNDERTAKING LETTER	  	 	140	  	
			
EXHIBIT F	 	ESTOPPEL AND ACCEPTANCE CERTIFICATE	  	 	141	  	
			
EXHIBIT G	 	OPINION OF COUNSEL	  	 	144	  	
			
EXHIBIT H	 	FORM OF POWER OF ATTORNEY	  	 	148	  	
			
EXHIBIT I	 	FORM OF CAPE TOWN POWER OF ATTORNEY	  	 	150	  	
			
EXHIBIT J	 	ASSIGNMENT OF RIGHTS (AIRFRAME)	  	 	152	  	
			
EXHIBIT K	 	ASSIGNMENT OF RIGHTS (ENGINES)	  	 	160	  	
			
EXHIBIT L	 	RETURN ACCEPTANCE RECEIPT	  	 	164	  	
			
EXHIBIT M	 	MONTHLY REPORT	  	 	169	  	
			
EXHIBIT N	 	AIRCRAFT DOCUMENTATION	  	 	173	  	
			
EXHIBIT O	 	TECHNICAL EVALUATION REPORT	  	 	176	  	

	 	viii	 	TABLE OF CONTENTS	

AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (together with all Exhibits hereto, the “ Lease ”) is made and entered into as of March 9, 2007.
BETWEEN:
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”); and
INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation whose principal place of business is at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, United States of America (“ LESSOR ”).

	 	1	 	RECITALS	

The subject matter of this Lease is one (1) new Airbus A319-100 aircraft. In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and LESSEE hereby agrees to lease from LESSOR the aircraft and the parties further agree as follows:
 
 	ARTICLE 1	SUMMARY OF TRANSACTION	
The following is a summary of the lease transaction between LESSEE and LESSOR. It is set forth for the convenience of the parties only and will not be deemed in any way to amend, detract from or simplify the other provisions of this Lease.
1.13 Description of Aircraft
One new Airbus A319-100 aircraft
1.14 Scheduled Delivery Date and Location
In the month of July 2008 in Hamburg, Germany
1.15 Initial Lease Term
10 years
1.16 Extension Lease Option
Two (2) lease extension options of one (1) year each
1.17 Security Deposit
***** payable as follows (in U.S. Dollars):

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) business days after execution of the lease	  	 	*****	  	
April 1, 2007	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	2	 	ARTICLE 1
SUMMARY OF TRANSACTION	

					
Payment Date	  	Amount	 	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
December 1, 2007	  	 	*****	  	
1.18 Transaction Fee
***** payable within 2 business days after execution of this Lease
1.19 Rent During Lease Term
Payable monthly in advance and equal to the sum of:
(a) ***** per month expressed in January 2006 U.S. Dollars*
 
*	The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1 st day of January 2006 through and including the delivery month of the aircraft, compounded monthly provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.	
plus
(b) ***** per month
plus
(c) the “LESSEE Customization Costs” amortized over the lease term, together with interest thereon at a rate equal to the prime rate in effect at delivery. The “LESSEE Customization Costs” consist of the cost of (i) all agreed-to BFE (whether buyerfurnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in Exhibit A and (ii) all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	3	 	ARTICLE 1
SUMMARY OF TRANSACTION	

1.20 Reserves

Type of Reserves	 	Amount of Reserves	
		
Airframe Reserves (6 Year Check):	 	****** per calendar month	
		
Airframe Reserves (12 Year Check):	 	****** per calendar month	
		
Engine Performance Restoration Reserves:	 	****** per engine flight hour for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Engine LLP Reserves:	 	****** per engine cycle for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Landing Gear Reserves:	 	****** per calendar month	
		
APU Reserves:	 	****** per APU hour (payable when the APU is utilized on the aircraft or another aircraft)	
 
*	All reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
1.21 Additional Rent for Excess Airframe and Engine Cycles
***** for each cycle the airframe and ***** for each cycle an engine has operated, calculated as of the end of the lease term, in excess of the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycles
1.22 Country of Aircraft Registration
United States
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	4	 	ARTICLE 1
SUMMARY OF TRANSACTION	

1.23 Agreed Value of Aircraft
An amount equal to ***** of the manufacturer’s list price for the aircraft on the delivery date, which will be decreased by ***** of such amount on each yearly anniversary of the delivery date
1.24 LESSOR’s Bank Account
International Lease Finance Corporation Account No. ***** JPMorgan Chase Bank 270 Park Avenue New York, New York 10017 ABA#*****
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	5	 	ARTICLE 1
SUMMARY OF TRANSACTION	

 	ARTICLE 2	DEFINITIONS	
Except where the context otherwise requires, the following words have the following meanings for all purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the words. Any agreement defined below or in this Lease includes each amendment, modification, supplement and waiver thereto in effect from time to time.
2.3 General Definitions .
“ Aircraft ” means the Airframe, two (2) Engines, APU, Parts and Aircraft Documentation, collectively. As the context requires, “Aircraft” may also mean the Airframe, any Engine, the APU, any Part, the Aircraft Documentation or any part thereof individually. For example, in the context of return to LESSOR the term “Aircraft” means the Airframe, Engines, APU, Parts and Aircraft Documentation collectively, yet in the context of LESSEE not creating any Security Interests other than Permitted Liens on the Aircraft, the term “Aircraft” means any of the Airframe, any Engine, the APU, any Part or the Aircraft Documentation individually.
“ Aircraft Documentation ” means all (a) log books, Aircraft records, manuals and other documents provided to LESSEE in connection with the Aircraft, (b) documents listed in the Estoppel and Acceptance Certificate and Exhibit N and (c) any other documents required to be maintained during the Lease Term and until the Termination Date by the Aviation Authority, LESSEE’s Maintenance Program and this Lease.
“ Airframe ” means the airframe listed in the Estoppel and Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding each Basic Engine or engines and the APU).
“ Airworthiness Directives ” or “ ADs ” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by any one or more of the Aviation Authority, DGAC, FAA and EASA.
“ APU ” means (a) the auxiliary power unit of the Aircraft listed in the Estoppel and Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by LESSOR and leased to LESSEE pursuant to Article 19.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.

	 	6	 	ARTICLE 2
DEFINITIONS	

“ Aviation Authority ” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the United States of America or any Government Entity which under the Laws of the United States of America from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in the United States of America. If the Aircraft is registered in a country other than the United States of America, “Aviation Authority” means the agency which regulates civil aviation in such other country.
“ Aviation Documents ” means any or all of the following which at any time may be obtainable from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application for registration of the Aircraft with the appropriate authority in the State of Registration, (c) the certificate of registration for the Aircraft issued by the State of Registration, (d) a Standard Certificate of Airworthiness for the Aircraft specifying transport category (passenger), (e) an air transport license, (f) an air operator’s certificate, (g) such recordation of LESSOR’s title to the Aircraft and interest in this Lease as may be available in the State of Registration and (h) all such other authorizations, approvals, consents and certificates, if any, in the State of Registration as may be required to enable LESSEE lawfully to operate the Aircraft.
“ Basic Engine ” means, with respect to an Engine, the Engine Manufacturer’s engine modules, components and systems as specified in the Engine Manufacturer’s delivered bill of material for that engine model. The “Basic Engine” does not include the nacelle, installed components related to the Aircraft systems, thrust reversers, quick engine components (QEC), primary exhaust nozzle and any other Parts which are not considered by the Engine Manufacturer to be part of a “basic engine”.
“ BFE ” means any equipment which is to be provided by the purchaser of the Aircraft (whether actually provided by LESSOR as buyer-furnished equipment or Manufacturer as sellerpurchased equipment).
“ Business Day ” means a day other than a Saturday or Sunday on which the banks in the city where LESSOR’s Bank is located are open for the transaction of business of the type required by this Lease and except in respect of payments of Rent, Mexico City, Mexico.
“ Cape Town Convention ” means both the Convention and the Protocol.
“ Consolidated Text ” means the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment.

	 	7	 	ARTICLE 2
DEFINITIONS	

“ Convention ” means the Convention on International Interests in Mobile Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa as it may be amended from time to time.
“ Creditor ” means any lessor, owner, bank, lender, mortgagee or other Person which is the owner of or has any interest in an aircraft engine or aircraft operated by LESSEE.
“ Creditor Agreement ” means the applicable agreement between a Creditor and LESSEE or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by LESSEE on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
“ Default ” means any event which, upon the giving of notice, the lapse of time and/or a relevant determination, would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft from LESSOR to LESSEE pursuant to Articles 3 and 6.
“ Delivery Date ” means the date on which Delivery takes place.
“ DGAC ” means the French Direction Générale de l’Aviation Civile or any successor thereto.
“ Dollars ”, “ $ ” and “ US$ ” mean the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency or any successor thereto. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “EASAapproved” station or facility, such station or facility must be approved by EASA to perform maintenance and repair work on the Aircraft, an Engine or Part submitted to it for maintenance or repair, as applicable.
“ Engine ” means (a) each of the engines listed on the Estoppel and Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.
“ Eurocontrol ” means the European Organization for the Safety of Air Navigation established by the Convention related to the Co-operation for the Safety of Air Navigation (Eurocontrol) signed on December 13, 1960, as amended.

	 	8	 	ARTICLE 2
DEFINITIONS	

“ Engine Manufacturer ” means IAE International Engines A.G.
“ Event of Default ” means any of the events referred to in Article 25.2.
“ FAA ” means the Federal Aviation Administration of the U.S. Department of Transportation or any successor thereto under the Laws of the U.S. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “FAA-approved” station or facility, such station or facility must be approved by the FAA to perform maintenance and repair work on the Aircraft, an Engine or Part, as applicable.
“ FARs ” means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.
“ Geneva Convention ” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19, 1948.
“ Government Entity ” means any (a) national, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof or (c) association, organization or institution of which any of the entities listed in (a) or (b) is a member or to whose jurisdiction any such entity is subject.
“ International Registry ” means the international registration facilities established for the purposes of the Cape Town Convention.
“ JAA ” means the Joint Aviation Authorities, an associated body of the European Civil Aviation Conference.
“ JARs ” means the EASA/JAA regulations, as amended from time to time, or any successor regulations thereto.
“ Landing Gear ” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.
“ Law ” means any (a) statute, decree, constitution, regulation, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party, (c) judicial or administrative interpretation or application of any of the foregoing or (d) any binding judicial precedent having the force of law.
“ LESSOR’s Lien ” means any Security Interest created by or through LESSOR.

	 	9	 	ARTICLE 2
DEFINITIONS	

“ Maintenance Program ” means LESSEE’s maintenance program as approved by the Aviation Authority or such other maintenance program as LESSOR may, acting reasonably, accept in writing.
“ Manufacturer ” means Airbus S.A.S.
“ Mexico ” means the United Mexican States.
“ MPD ” means the then-current Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.
“ Overhaul ” means the full reconditioning of the Aircraft, an Engine, the APU, Landing Gear, module or Part, as the case may be, in which such equipment has been fully disassembled, cleaned, thoroughly inspected and returned to the highest standard specified by the applicable manufacturer’s manual.
“ Part ” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, LESSEE-furnished or LESSOR-purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of LESSOR in accordance with Article 12.4.
“ Permitted Lien ” means (a) LESSOR’s Liens; (b) Security Interests arising in the ordinary course of LESSEE’s business for Taxes either not yet assessed or, if assessed, not yet due or being contested in good faith in accordance with Article 16.5 or (c) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ liens or similar Security Interests arising by operation of Law after the Delivery Date in the ordinary course of LESSEE’s business for amounts which are either not yet due or are being contested in good faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided) so long as such proceedings do not involve any material likelihood of sale, forfeiture or loss of the Aircraft.
“ Person ” means any individual, firm, partnership, joint venture, trust, corporation, company, Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether having distinct legal personality or not.
“ Prime Rate ” means the rate of interest from time to time announced by JPMorgan Chase Bank in New York as its prime commercial lending rate.

	 	10	 	ARTICLE 2
DEFINITIONS	

“ Prohibited Country ” means any country other than Mexico to which the export and/or use of an Airbus A319-100 aircraft with V2524 engines attached thereto is not permitted under (a) any United Nations sanctions, (b) the Council Regulation (EC) No. 149/2003 which updates and amends Council Regulation (EC) 1334/2000, (c) the United States Export Administration Act 1979 (as amended) or any successor legislation and/or the Export Administration Regulations promulgated thereunder, (d) where applicable, the various regulations administered from time to time by the Office of Foreign Assets Control of the U.S. Treasury Department, (e) any similar or corresponding legislation then in effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any subsequent United Nations Sanctions Orders the effect of which prohibits or restricts the export and/or use of Airbus A319-100 aircraft with V2524 engines attached thereto to such country. Prohibited Country will be defined by applicable regulations as modified, amended or superceded from time to time.
“ Protocol ” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa, as it may be amended from time to time.
“ Return Check ” means the accomplishment of the subsequent “C” check (or equivalent) of the Aircraft in accordance with the MPD (including all nonroutine work generated as a result of performance of such MPD tasks) to clear the Aircraft for the next 20 months, 6,000 hours and 4,500 cycles of operation from the Termination Date. For avoidance of doubt, if the inspection interval pursuant to the MPD for a particular task only refers to one or two of the three measurements above ( i.e.  months, hours or cycles), then only those particular measurements referred to in the MPD will be utilized in determining whether the task must be performed.
“ Qualified Performance Restoration ” means that the gaspath core major module of an Engine shall have, as a minimum, a Refurbishment accomplished in accordance with the Engine Manufacturer’s current V2500 Maintenance Management Plan recommendations. The gaspath core major module shall consist of the high pressure compressor module, diffuser/combustor group, outer/inner combustion chambers, No. 4 bearing, high pressure turbine stage one nozzle vane group and high pressure turbine module. For the sole purposes of this paragraph, the term “Refurbishment” means the Engine Manufacturer’s definition of a refurbishment as stated in the then-current V2500 Maintenance Management Plan recommendations at the time of the applicable shop visit.
“ Security Interest ” means any encumbrance or security interest, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title retention, attachment, levy, claim or right of possession or detention.

	 	11	 	ARTICLE 2
DEFINITIONS	

“ State of Registration ” means the U.S. or such other country or state of registration of the Aircraft as LESSOR may, in its absolute discretion, approve in writing.
“ U.S. ” or “ U.S.A. ” means the United States of America.
2.4 Specific Definitions . The following terms are defined in the Articles referenced below:

Terms	  	Article	
Agreed Value	  	19.1	
Airframe Reserves (6 Year Check)	  	5.4.1	
Airframe Reserves (12 Year Check)	  	5.4.1	
APU Reserves	  	5.4.1	
Default Interest	  	5.7	
Delivery Location	  	3.1	
Engine LLP Reserves	  	5.4.1	
Engine Performance Restoration Reserves	  	5.4.1	
Expenses	  	17.1	
Expiration Date	  	4.3	
Extension Lease Term	  	4.2	
FHA Agreement	  	13.3	
Future Agreements	  	28.8	
Indemnitees	  	17.1	
Initial Lease Term	  	4.1	
Landing Gear Reserves	  	5.4.1	
Lease Term	  	4.1	
LESSEE Customization Costs	  	5.3.1	
LESSOR’s Assignee	  	24.2.1	
LESSOR’s Bank	  	5.6	
LESSOR’s Lender	  	24.3	
Modification	  	12.9.1	
Net Total Loss Proceeds	  	19.1	
OEM Parts	  	12.2.2	
Operative Documents	  	20.1.3	
PMA Parts	  	12.2.2	
Rent	  	5.3.1	
Reorganization Transaction	  	20.2.5	
Reorganized Entity	  	20.2.5	
Reserves	  	5.4.1	
Scheduled Delivery Date	  	3.2	
Security Deposit	  	5.1.1	

	 	12	 	ARTICLE 2
DEFINITIONS	

			
Terms	  	Article	
Taxes	  	16.1	
Termination Date	  	4.4	
Total Loss	  	19.1	
Total Loss Date	  	19.1	
Total Loss Proceeds	  	19.1	
Transaction Fee	  	5.2	
Transfer	  	24.2.1	
Waste Expense	  	13.4	

	 	13	 	ARTICLE 2
DEFINITIONS	

 	ARTICLE 3	PLACE AND DATE OF DELIVERY	
3.7 Place of Delivery . LESSOR will deliver the Aircraft to LESSEE at Manufacturer’s facility in Hamburg, Germany or such other place as may be agreed in writing between the parties (the “ Delivery Location ”).
3.8 Scheduled Delivery Date . As of the date of this Lease, delivery of the Aircraft from Manufacturer to LESSOR and LESSOR to LESSEE is scheduled to occur in the month of April 2008. LESSOR will notify LESSEE from time to time and in a timely manner of the exact date on which LESSOR expects Delivery to take place (the “ Scheduled Delivery Date ”).
3.9 Delivery subject to Manufacturer Delivery . LESSOR and LESSEE expressly acknowledge that Delivery of the Aircraft to LESSEE is subject to and conditioned upon delivery of the Aircraft by Manufacturer to LESSOR.
3.10 No LESSOR Liability . LESSOR will not be liable for any loss or expense, or any loss of profit, arising from any delay or failure in Delivery to LESSEE unless such delay or failure arises as a direct consequence of the willful misconduct of LESSOR, and in no event will LESSOR be liable for any delay or failure which is caused by any breach or delay on the part of Manufacturer or any BFE supplier.
3.11 Total Loss of Aircraft prior to Delivery . If a Total Loss of the Aircraft occurs prior to Delivery, neither party will have any further liability to the other except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent.
3.12 Cancellation for Delay . Promptly after LESSOR becomes aware that in Manufacturer’s opinion a delay will cause Delivery to be delayed beyond October 30, 2008, LESSOR will notify LESSEE. By written notice given within ten (10) Business Days after LESSEE’s receipt of such LESSOR notice, either party may by written notice to the other party terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent, and if LESSOR subsequently collects (at its discretion) from Manufacturer monetary damages as compensation for such delay, LESSOR shall share such compensation (minus any out of pocket costs incurred by LESSOR in pursuing such damages) equally with LESSEE. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.6 unless otherwise agreed in writing by the parties.

	 	14	 	ARTICLE 3
PLACE AND DATE OF DELIVERY	

 	ARTICLE 4	LEASE TERM AND EXTENSION OPTION	
4.5 Initial Lease Term . The term of leasing of the Aircraft will commence on the Delivery Date and continue for an initial lease term of ten (10) years (“ Initial Lease Term ”).
4.6 Lease Extension Option . So long as no Default or Event of Default has occurred and is continuing hereunder on the date of exercise of the option, LESSEE will have two (2) options to extend the term of the Lease for a period of one (1) year each from the then-existing Expiration Date (the “ Extension Lease Term ”). In order to exercise an option, LESSEE must give written notice to LESSOR not less than ten (10) months prior to the then-existing Expiration Date of this Lease. Any notice given by LESSEE in accordance herewith will be irrevocable.
4.7 “Lease Term” and “Expiration Date” . “ Lease Term ” means the term of leasing commencing on the Delivery Date and terminating on the Expiration Date. “ Expiration Date ” means the date on which LESSEE is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of the Initial Lease Term or Extension Lease Term, if and as applicable.
4.8 “Termination Date” . If LESSEE returns the Aircraft to LESSOR on the Expiration Date in the condition required by Article 23, then “ Termination Date ” has the same meaning as “Expiration Date”. If LESSEE does not do so, then “ Termination Date ” means the date on which the first of the following events occurs:
(a) there is a Total Loss of the Aircraft prior to Delivery pursuant to Article 3.5;
(b) cancellation of this Lease occurs pursuant to Article 3.6;
(c) there is a Total Loss of the Aircraft and payment is made to LESSOR in accordance with Article 19.3;
(d) prior to the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default;
(e) an Event of Default occurs hereunder by LESSEE returning the Aircraft in the condition required by this Lease after the Expiration Date; or
(f) after the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default.

	 	15	 	ARTICLE 4	
LEASE TERM AND EXTENSION OPTION

 	ARTICLE 5	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	
5.15 Security Deposit .
 
5.15.1	LESSEE will pay LESSOR a security deposit of ***** for its lease of the Aircraft (the “ Security Deposit ”). The Security Deposit is payable as follows (in US$):	

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) Business Days after execution of the Lease	  	 	*****	  	
April 1, 2007	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
December 1, 2007	  	 	*****	  	
 
5.15.2	The Security Deposit may be commingled with LESSOR’s general funds and any interest earned on such Security Deposit will be for LESSOR’s account. If the Security Deposit is reduced below the required amount by application to meet LESSEE’s unperformed obligations under this Lease, LESSEE will replenish the Security Deposit within ten (10) days after LESSOR’s written demand therefor in accordance with the provisions of Article 26.1. The Security Deposit will serve as security for the performance by LESSEE of its obligations under this Lease and any other agreements between LESSEE and LESSOR or any direct or indirect subsidiary of LESSOR relating to aircraft, engines, aircraft equipment or the extension of credit and may be applied by LESSOR upon the occurrence of an Event of Default hereunder or of a default by LESSEE under any such other agreements.	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	16	 		

5.15.3	Upon termination of this Lease in accordance with Article 4.4 other than if an Event of Default has occurred and is continuing, LESSOR will return to LESSEE the amount of the Security Deposit then held by LESSOR (so long as no default by LESSEE exists under any other agreement between LESSEE and LESSOR relating to aircraft, engines or aircraft equipment or the extension of credit by LESSOR to LESSEE), without interest, less an amount determined by LESSOR to be a reasonable estimate of the costs, if any, which LESSOR will incur to remedy any unperformed obligations of LESSEE under this Lease, including the correction of any discrepancies from the required condition of the Aircraft on return of the Aircraft.	
5.16 Transaction Fee . Within two (2) Business Days after execution of this Lease, LESSEE will pay LESSOR a nonrefundable transaction fee of ***** (the “ Transaction Fee ”).
5.17 Rent .
 
5.17.1	LESSEE will pay LESSOR the following amounts monthly in advance as rent for the Aircraft (“ Rent ”):	
Lease Term : Payable monthly in advance and equal to the sum of:
(a) ***** per month expressed in January 2006 U.S. Dollars*
 
*	The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1 st day of January 2006 through and including the delivery month of the aircraft, compounded monthly; provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.	
plus
(b) ***** per month
plus
(c) the “ LESSEE Customization Costs ” amortized over the Lease Term, together with interest thereon at a rate equal to the Prime Rate in effect at Delivery
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	17	 		

The “ LESSEE Customization Costs ” consist of the cost of (i) all agreed-to BFE (whether buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in Exhibit A and (ii) all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR.
Any increases to the above base rent will be calculated immediately prior to Delivery.
 
5.17.2	The first payment of Rent during the Lease Term will be paid no later than three (3) Business Days prior to the Scheduled Delivery Date. Each subsequent payment of Rent will be due monthly thereafter no later than the same day of the month as the Delivery Date of the Aircraft except that, if such day is not a Business Day, the Rent will be due on the immediately preceding Business Day. If Delivery occurred on the 29 th , 30 th or 31 st of the month and in any given month during the Lease Term in which a Rent payment is due there is no such corresponding date, Rent will be payable on the last Business Day of such month. In the event that LESSEE has paid the first payment of Rent three (3) Business Days prior to the Scheduled Delivery Date and Delivery is subsequently delayed for a period in excess of ten (10) days, LESSOR shall return such Rent payment to LESSEE at LESSEE’s request, unless LESSOR advises LESSEE in writing that the Aircraft will be delivered in the next seven (7) days from the date of such request.	
5.18 Reserves .
 
5.18.1	LESSEE will pay to LESSOR supplemental Rent, based on LESSEE’s use of the Aircraft during the Lease Term, in the form of the following reserves in the following amounts (individually, “ Airframe Reserves (6 Year Check) ”, “ Airframe Reserves (12 Year Check) ”, “ Engine Performance Restoration Reserves ”, “ Engine LLP Reserves ”, “ Landing Gear Reserves ” and “ APU Reserves ”, and collectively “ Reserves ”):	

Type of Reserves	 	Amount of Reserves	
Airframe Reserves (6 Year Check):	 	***** per calendar month	
		
Airframe Reserves (12 Year Check):	 	***** per calendar month    	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	18	 		

			
Type of Reserves	 	Amount of Reserves	
		
Engine Performance Restoration Reserves:	 	***** per Engine flight hour for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Engine LLP Reserves:	 	***** per Engine cycle for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Landing Gear Reserves:	 	***** per calendar month	
		
APU Reserves:	 	***** per APU hour (payable when the APU is utilized on the Aircraft or another aircraft)	
 
*	All Reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
 
5.18.2	All Reserves will be paid on or before the 15 th day of the calendar month next following the month in which the Delivery Date occurs and on or before the 15 th day of each succeeding calendar month for flying performed during the calendar month prior to payment and for the calendar-based Reserves pertaining to such prior calendar month. All Reserves pertaining to the month in which the Termination Date occurs will be paid on the Termination Date, unless otherwise agreed by the parties.	
 
5.18.3	No interest will accrue or be paid at any time to LESSEE on such Reserves and, subject to LESSOR’s obligations under Article 13, LESSOR may commingle the Reserves with LESSOR’s general funds.	
5.19 Additional Rent for Excess Cycles . If on the Termination Date the Airframe or any Engine has operated more cycles than the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycle over the period of the Lease Term, LESSEE will pay LESSOR as additional Rent ***** for each Airframe cycle and ***** for each Engine cycle the Airframe and any Engine actually operated during the Lease Term in excess of the number of cycles which result from an hour/cycle ratio of 1.25 hours to 1 cycle. A calculation will be made by LESSOR as of the Termination Date and such additional Rent will be due and payable by LESSEE within three (3) Business Days following the date LESSEE receives such calculation, in writing, from LESSOR.
5.20 LESSOR’s Bank Account . The Security Deposit, Transaction Fee, Rent, Reserves and any other payment due under this Lease will be paid by wire transfer of immediately available U.S. Dollar funds to LESSOR’s bank account at:
International Lease Finance Corporation Account No. ***** JPMorgan
Chase Bank 270 Park Avenue New York, New York 10017 ABA# *****
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	19	 		

or to such other bank account in the United States as LESSOR may from time to time designate by written notice (“ LESSOR’s Bank ”). When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually must be received by LESSOR’s Bank on or before such specific date, even if, in order for such payment to be received by LESSOR’s Bank by such specific date, LESSEE must initiate the wire transfer prior to such specific date.
5.21 Default Interest . If LESSOR’s Bank does not receive the Rent or any other amount on or before the specific date when due, LESSOR will suffer loss and damage the exact nature and amount of which are difficult or impossible to ascertain. LESSEE will pay LESSOR as supplemental Rent (by way of agreed compensation and not as a penalty) interest on any due and unpaid amounts payable by LESSEE under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to ***** plus the Prime Rate in effect on the date on which the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at LESSOR’s Bank or, in the case of LESSOR’s performance of LESSEE’s obligations hereunder, from the date of payment by LESSOR through the date of LESSEE’s repayment to LESSOR (“ Default Interest ”). Default Interest will accrue on a day-to-day basis and be compounded monthly.
5.22 No Deductions or Withholdings . All payments by LESSEE under this Lease, including the Security Deposit, Transaction Fee, Rent, Reserves, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes (as defined in Article 16) imposed in the State of Registration or any jurisdiction from which such payments are made unless LESSEE is prohibited by Law from doing so, in which event LESSEE will gross up the payment amount such that the net payment received by LESSOR after any deduction or withholding equals the amounts called for under this Lease. LESSEE will also do all of the following:
(a) Ensure that the deduction or withholding does not exceed the minimum amount legally required;
(b) Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto) unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR; and
(c) Furnish to LESSOR within thirty (30) days after each payment a certified copy of an official receipt of the relevant Government Entities involved, if available, or other evidence of payment reasonably accepted by LESSOR for all amounts so deducted or withheld.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	20	 		

5.23 Value Added Taxes . The Rent and other amounts payable by LESSEE under this Lease are exclusive of any value added tax or similar tax or duty.
5.24 Wire Transfer Disbursement Report . At the time of each Rent or other payment, LESSEE will advise LESSOR (including by way of a reference included in a bank transfer instruction that is available to LESSOR) in writing of the payment being made by LESSEE and the allocation of such payment to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation set forth in LESSEE’s report, in the event LESSEE is in default under this Lease, LESSOR will have complete discretion to allocate LESSEE’s payments as LESSOR determines.
5.25 Net Lease .
 
5.25.1	This Lease is a net lease and LESSEE’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:	
(a) any right of set-off, counterclaim, recoupment, defense or other right (including any right of reimbursement) which LESSEE may have against LESSOR, Manufacturer, the Engine Manufacturer or any other person for any reason, including any claim LESSEE may have for the foregoing;
(b) unavailability or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against LESSEE’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of any jurisdiction or Total Loss of the Aircraft;
(c) insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against LESSOR, LESSEE, Manufacturer, the Engine Manufacturer or any other Person;
(d) invalidity or unenforceability or lack of due authorization of or other defect in this Lease;
(e) failure or delay on the part of any party to perform its obligations under this Lease; or
(f) any other circumstance which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of LESSEE hereunder.
 
21

5.25.2	Nothing in Article 5.11 will be construed to limit LESSEE’s rights and remedies in the event of LESSOR’s breach of its warranty of quiet enjoyment set forth in Article 21.2 or to limit LESSEE’s rights and remedies to pursue in a court of law any claim it may have against LESSOR or any other Person.	
5.26 Currency Indemnity . If under any applicable Law, whether as a result of a judgment against LESSEE or the liquidation of LESSEE or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, LESSEE will as a separate and independent obligation, fully indemnify LESSOR against the amount of the shortfall. If the amount received by LESSOR upon converting the payment into Dollars exceeds the amount payable under this Lease, LESSOR will remit such excess to LESSEE. For the purposes of this paragraph “rate of exchange” means the rate at which LESSOR is able on the relevant date to purchase Dollars in New York or London (at LESSOR’s option) with such other currency.
5.27 LESSOR Performance of LESSEE Obligation . If LESSEE fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, LESSOR may (but is not required to) at its election, after the expiry of any applicable cure or similar period and without waiver of its rights perform such obligation and/or pay such amount unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.
5.28 Consideration for Rent and other Amounts . The amount of the Rent and other payments contained in this Lease are in consideration of LESSEE’s waiver of warranties and acceptance of the disclaimers and LESSEE’s provision of indemnities set forth in Articles 8 and 17, respectively, and the other provisions of this Lease.
 
22

 	ARTICLE 6	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	
6.9 LESSEE Selection of Aircraft . LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE IS BASED UPON INFORMATION SUPPLIED BY MANUFACTURER. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
6.10 Participation Agreement . LESSEE has the right to inspect the Aircraft during the manufacture process and to attend and observe the acceptance tests of the Aircraft pursuant to the terms of a Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B.
6.11 Procurement of BFE . LESSOR will procure all BFE for the Aircraft in accordance with the Aircraft specification set forth in Exhibit A. With respect to any additional BFE not part of such specifications, LESSOR and LESSEE agree to use commercially reasonable efforts to procure such BFE under the supplier contract of LESSOR or LESSEE which provides the most favorable pricing, unless LESSOR is prohibited from doing so or unless any such change could cause, in LESSOR’s reasonable opinion, a delay in Delivery of the Aircraft.
6.12 Assignment of Training . LESSOR agrees to give LESSEE a product support allowance as set forth in Appendix 3 of the Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B. If LESSEE fails to take Delivery of the Aircraft when tendered in accordance with Article 6.7, LESSEE will immediately pay to LESSOR an amount equal to the Dollar value of any goods or services used under the Participation Agreement.
6.13 LESSEE Inspection of Aircraft . During the course of final assembly of the Aircraft, and at Delivery, LESSEE will have its own representative present to inspect the Aircraft and to ensure its conformity with LESSEE’s needs and the terms of this Lease. LESSEE will have ground inspection and acceptance flight rights with respect to the Aircraft. LESSEE acknowledges that, as between LESSEE and LESSOR, in accepting the Aircraft LESSEE is relying on its own inspection and knowledge of the Aircraft in determining whether the Aircraft meets the requirements of this Lease.
6.14 Aircraft at Delivery . At Delivery, the Aircraft will be as set forth in Exhibit A, as such description may be modified by any change requests agreed to among LESSEE, LESSOR

	 	23	 	ARTICLE 6	
INVOLVEMENT WITH AIRCRAFT MANUFACTURER

and Manufacturer (which will be reflected in amendment(s) to this Lease). In the event of any discrepancies, LESSEE and LESSOR will cooperate in good faith with one another and with Manufacturer and the Engine and other manufacturers, as applicable, in order to arrive at a mutually acceptable resolution of any such discrepancies.
6.15 Delivery of the Aircraft to LESSEE . Subject to LESSEE having performed all of the conditions precedent to Delivery set forth in this Lease (or LESSOR’s waiver of one or more of such conditions precedent), immediately following delivery of the Aircraft from Manufacturer to LESSOR, LESSOR will deliver the Aircraft to LESSEE at the Delivery Location. Upon tender of the Aircraft by LESSOR to LESSEE in the condition required by Article 6.6, LESSEE will accept the Aircraft and the date of tender by LESSOR to LESSEE will be deemed to be the Delivery Date for all purposes under this Lease, including the commencement of LESSEE’s obligation to pay Rent hereunder. However, nothing in this Lease will obligate LESSOR to deliver the Aircraft to LESSEE if LESSEE has not complied with the conditions contained in Articles 7.1 and 7.2.
6.16 LESSEE Acceptance of Aircraft . If LESSEE fails to (a) comply with its obligations set forth in the Participation Agreement pursuant to Article 6.2, (b) comply with the conditions contained in Articles 7.1 and 7.2 so as to allow Delivery to take place immediately following delivery of the Aircraft by Manufacturer to LESSOR or (c) take delivery of the Aircraft when properly tendered for delivery by LESSOR in the condition required hereunder, LESSEE will indemnify LESSOR for all out-of-pocket costs and expenses incurred by LESSOR as a result thereof including (without limitation) any payments other than the purchase price which LESSOR becomes obliged to make to Manufacturer which result directly from LESSEE’s failure to comply with said conditions.

	 	24	 	ARTICLE 6	
INVOLVEMENT WITH AIRCRAFT MANUFACTURER

 	ARTICLE 7	PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	
7.4 PreDelivery Requirements . LESSEE will do each of the following prior to the Scheduled Delivery Date of the Aircraft within the time frames set forth below:
 
7.4.1	Within one (1) month after execution of this Lease or such other period as the parties shall agree, LESSEE will deliver to LESSOR each of the following:	
(a) copies of resolutions of the Board of Directors of LESSEE or other written evidence of appropriate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of LESSEE hereunder. Such resolutions or other written evidence must also specifically grant the individual executing this Lease on behalf of LESSEE with the authority and power to commit and bind LESSEE to the arbitration clause contained in Article 27 under the Laws of Mexico;
(b) a letter from the Aviation Authority in the form and substance of Exhibit E (if available); and
(c) an opinion of counsel in substantially the form and substance of Exhibit G such as LESSOR accepts from third party legal counsel in Mexico in the course of LESSOR’s business.
 
7.4.2	At least seven (7) days prior to the Scheduled Delivery Date, LESSEE will have delivered to LESSOR a Certificate of Insurance and Brokers’ Letter of Undertaking substantially in the same form as Exhibits C and D evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date.	
 
7.4.3	At least three (3) Business Days prior to the Scheduled Delivery Date, LESSEE will do each of the following:	
(a) pay to LESSOR the first monthly installment of Rent in accordance with Article 5.3.2;
(b) to the extent required, provide LESSOR with documents evidencing that LESSEE has obtained any necessary licenses for the importation and ferrying of the Aircraft into Mexico and that all applicable customs duties and sales tax in respect

	 	25	 	ARTICLE 7
PRE-DELIVERY DOCUMENTARY
AND OTHER REQUIREMENTS	

of the Aircraft, if any, have been discharged by LESSEE (or arrangements satisfactory to LESSOR have been made for obtaining or paying for the same), such that at return of the Aircraft to LESSOR no additional fees, duties or taxes will be payable in order to export the Aircraft from Mexico;
(c) provide LESSOR with documents reasonably requested by LESSOR evidencing the issuance of each approval, license and consent, if any, which may be required in connection with the remittance to LESSOR of any amount payable under this Lease or the performance by LESSEE of any of its obligations hereunder (including without limitation any exchange control approval);
(d) provide LESSOR with a copy of such Aviation Documents as may be available prior to the Scheduled Delivery Date;
(e) provide LESSOR with a power of attorney empowering LESSEE’s representative, who may be an officer or employee of LESSEE, to accept the Aircraft on behalf of LESSEE;
(f) provide LESSOR with a power of attorney in substantially the form of Exhibit H;
(g) provide LESSOR with a power of attorney for purposes of the Cape Town Convention in the form of Exhibit I; and
(h) provide LESSOR with such other documents as LESSOR may reasonably request.
7.5 Delivery Requirements . On the Delivery Date of the Aircraft, each of the following will occur:
 
7.5.1	LESSEE will execute and deliver to LESSOR an Estoppel and Acceptance Certificate in the form of Exhibit F covering the Aircraft and effective as of the Delivery Date.	
 
7.5.2	If not previously done, LESSEE and LESSOR will sign an amendment or supplement to Exhibit A evidencing all agreed-to changes to the specification of the Aircraft.	
 
7.5.3	LESSEE will deliver a certificate signed by an officer of LESSEE stating all of the following:	
(a) the representations and warranties contained in Article 20 are true and accurate on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(b) no Default or Event of Default has occurred and is continuing or will result from LESSEE’s lease of the Aircraft hereunder.

	 	26	 	ARTICLE 7
PRE-DELIVERY DOCUMENTARY
AND OTHER REQUIREMENTS	

7.5.4	LESSEE’s counsel will deliver an opinion confirming the matters set forth in the opinion of counsel described in Article 7.1 and advising that all filing and other requirements described in the earlier opinion of counsel have been met or will be met (if permitted by Law) upon or immediately following Delivery.	
 
7.5.5	If any Creditor Agreement provides that such Creditor will or may obtain any right, title or interest in an Engine which is installed on such Creditor’s aircraft, LESSEE will deliver to LESSOR an engines cooperation agreement in form and substance acceptable to LESSOR which is executed by LESSEE and LESSEE’s Creditors (as defined therein).	
 
7.5.6	LESSEE and LESSOR will execute assignments of Manufacturer and Engine Manufacturer rights in the form and substance of Exhibits J and K, respectively, subject to the manufacturers’ consents, if and as applicable.	
 
7.5.7	LESSEE will deliver to LESSOR a copy of such Aviation Documents as have not been previously delivered which are available.	
7.6 Post-Delivery Requirements .
 
7.6.1	Within seven (7) days after Delivery, if not previously provided, LESSEE will do each of the following:	
(a) procure registration of the Aircraft in the register of aircraft of the State of Registration showing LESSOR as the owner and provide evidence of the same to LESSOR;
(b) cause the interests of LESSOR in the Aircraft (including in the Engines, if possible), this Lease and the other Operative Documents to be registered in the International Registry to the fullest extent such interests may be registered, including by consenting to or causing such registration via a “designated entry point” (as such term is defined in the Cape Town Convention) in the United States;

	 	27	 	ARTICLE 7
PRE-DELIVERY DOCUMENTARY
AND OTHER REQUIREMENTS	

(c) provide LESSOR with copies of all Aviation Documents not previously delivered; and
(d) if the Aircraft could not be registered at Delivery, provide LESSOR with a follow-up opinion of counsel advising that the Aircraft has been registered in the State of Registration and that all necessary filings have been made.
 
7.6.2	Within one (1) month after Delivery, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	

	 	28	 	ARTICLE 7
PRE-DELIVERY DOCUMENTARY
AND OTHER REQUIREMENTS	

 	ARTICLE 8	DISCLAIMERS AND WAIVERS	
ANY COMMITMENT OR COVENANT ON THE PART OF LESSOR REGARDING THE CONDITION OF THE AIRCRAFT EXPIRES AFTER DELIVERY AND THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS ARTICLE 8 REGARDING THE CONDITION OF THE AIRCRAFT WILL THEN APPLY. THUS, FROM AND AFTER THE TIME OF LESSEE’S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE, AS BETWEEN LESSOR AND LESSEE:
8.8 “As Is, Where Is” . LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS”. LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO, AND LESSEE HEREBY WAIVES ANY EXPRESS OR IMPLIED WARRANTY OR COVENANT (WHETHER STATUTORY OR OTHERWISE) AS TO (a) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
8.9 Waiver of Warranty of Description . LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE

	 	29	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME AFTER DELIVERY, THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSORS ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL INVALIDATE ANY AGREEMENT BETWEEN LESSOR AND MANUFACTURER TO RECTIFY DISCREPANCIES DISCOVERED PRIOR TO DELIVERY.
8.10 LESSEE Waiver . LESSEE HEREBY WAIVES AS BETWEEN ITSELF AND LESSOR AND AGREES NOT TO SEEK TO ESTABLISH OR ENFORCE ANY RIGHTS OR REMEDIES, EXPRESS OR IMPLIED (WHETHER STATUTORY, IN CONTRACT OR TORT OR UNDER ANY STRICT LIABILITY OR OTHER THEORY) AGAINST LESSOR OR THE AIRCRAFT RELATING TO ANY OF THE MATTERS MENTIONED IN ARTICLES 8.1 OR 8.2, REGARDLESS OF THE NEGLIGENCE, ACTIVE OR PASSIVE OR ANY OTHER TYPE, OF LESSOR.
8.11 Conclusive Proof . DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND ENGINES AND (a) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (b) THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO LESSEE.
8.12 No Liability to Repair or Replace . LESSOR will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use.

	 	30	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

8.6 No Waiver. Nothing in this Article 8 or elsewhere in this Lease will be deemed to be a waiver by LESSEE of any rights it may have against Manufacturer, the Engine Manufacturer or any other Person.
8.7 Consideration for Waivers . LESSEE’s waiver of warranties and acceptance of the disclaimers expressly set forth in this Article 8 are made in consideration of (a) LESSEE’s rights hereunder to inspect the Aircraft, (b) LESSOR’s assignment to LESSEE of any existing and assignable warranties of Manufacturer and the Engine Manufacturer and (c) the amount of the Rent and other payments contained in this Lease.

	 	31	 	ARTICLE 8
DISCLAIMERS AND WAIVERS	

 	ARTICLE 9	MANUFACTURERS’ AND VENDORS’ WARRANTIES	
9.4 Warranties . As set forth in Article 7.2.6, at Delivery LESSOR will assign to LESSEE for the duration of the Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine Manufacturer. Effective on the Delivery Date, all other assignable vendor warranties with respect to the Aircraft are hereby assigned by LESSOR to LESSEE.
9.5 Reassignment . On the Termination Date, the benefit of any warranty assigned by LESSOR to LESSEE pursuant to Articles 7.2.6 and 9.1 will be reassigned automatically to LESSOR or its designee except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. At LESSOR’s election, LESSEE’s rights under such warranties (including LESSEE’s claims and rights to payment thereunder) will revert to LESSOR during any period in which an Event of Default is continuing. Similarly, any additional warranties received by LESSEE from Manufacturer, the Engine Manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will be automatically assigned by LESSEE to LESSOR or its designee on the Termination Date except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. LESSEE at its own cost and expense will do all such things and execute such documents as may be required for these purposes.
9.6 Warranty Claims . LESSEE will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft.

	 	32	 	ARTICLE 9
MANUFACTURERS’ AND
VENDORS’ WARRANTIES	

 	ARTICLE 10	OPERATION OF AIRCRAFT	
10.6 Costs of Operation . LESSEE will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft.
10.7 Compliance with Laws . Except as otherwise explicitly provided in this Lease, LESSEE agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which LESSEE may operate. LESSEE will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or country if so doing would cause LESSEE or LESSOR to be in violation of any Law applicable to either of them or the Aircraft, except as may be reasonably required to preserve the Aircraft or the safety, well being or life of passengers or crew; provided, however, in such case, LESSEE shall immediately notify LESSOR and undertake its best efforts to remove the Aircraft from such airport or country as soon as reasonably possible.
10.8 Training . LESSEE will not use the Aircraft for testing or for training of flight crew members other than LESSEE crew members and will not use the Aircraft for training any more than it utilizes for training the other aircraft in its fleet.
10.9 No Violation of Insurance Policies . LESSEE will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies LESSEE is required to carry and maintain as set forth in this Lease. LESSEE will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit any such insurance policies.
10.10 Flight and Airport Charges .
 
10.10.1	LESSEE will pay promptly when due all airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges due and payable by LESSEE for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, unless	

	 	33	 	ARTICLE 10
OPERATION OF AIRCRAFT	

 	the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law, so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.	
 
10.10.2	If requested in writing by LESSOR (but not more frequently than twice annually, unless a Default or Event of Default shall have occurred and be continuing), LESSEE will provide LESSOR with a list of the airports to which LESSEE regularly operates the Aircraft or its other aircraft (in the event that the operation of such other aircraft may reasonably be expected to give rise to a lien on the Aircraft for landing, navigation, parking, storage or similar charges). LESSEE hereby authorizes Eurocontrol (if applicable) or another aviation authority or airport or creditor claiming or threatening to claim a Security Interest in the Aircraft to confirm the status of LESSEE’s payments to such creditor in respect of navigation, landing, parking, storage and similar charges for the Aircraft and its other aircraft, to the extent that the failure to make any payment in respect of such other aircraft has or might give rise to a Security Interest in the Aircraft, as and when requested by LESSOR.	

	 	34	 	ARTICLE 10
OPERATION OF AIRCRAFT	

 	ARTICLE 11	SUBLEASES	
11.9 No Sublease without LESSOR Consent . LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD) AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND LESSEE. NO SUBLEASING OF AN ENGINE WILL BE PERMITTED.
11.10 LESSOR Costs . LESSEE will indemnify LESSOR on demand for all reasonable out-of-pocket expenses (including legal fees) incurred in connection with LESSOR’s assessment of the subleasing proposal (whether or not LESSOR’s consent to such sublease is ultimately given) and implementation of the sublease.
11.11 Permitted Sublessees . LESSOR hereby acknowledges that upon a request by LESSEE for a sublease in accordance with this Article 11 to one of the following entities, LESSOR shall consent to such sublease, such consent not to be unreasonably withheld or delayed: TACA International Airlines, S.A.; Lineas Aereas Costarricenses, S.A.; AVIATECA, S.A.; TACA Costa Rica, S.A.; and Trans American Airlines, S.A. (d/b/a TACA PERU); provided, however, that at the time of such consent such entity has not suffered such a material deterioration in its condition such that a sublease to it would reasonably be expected to result in the operation or maintenance of the Aircraft in contravention of one or more terms of this Lease, and that nothing herein shall limit the terms and requirements otherwise set forth in this Article 11.
11.12 Any Approved Sublease . Any sublease approved by LESSOR will be for a term no greater than the remaining Lease Term. The applicable sublease agreement will contain provisions consistent with this Lease protecting LESSOR’s title to the Aircraft, providing appropriate LESSOR disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease will be subject and subordinate to this Lease. LESSOR will have an opportunity to review the proposed sublease agreement in advance in order to determine that it meets the requirements of this Article 11.4. In its sole discretion, LESSOR may require an opinion of counsel in connection with such sublease, including LESSOR’s right to repossess the Aircraft in the event of an Event of Default hereunder and LESSEE’s and LESSOR’s rights to repossession in the case of an event of default under such sublease. LESSEE will not amend the terms of any approved sublease agreement without the prior written consent of LESSOR, which will not be unreasonably withheld.

	 	35	 	ARTICLE 11
SUBLEASES	

11.13 Assignment of Sublease . Any approved sublease will be assigned to LESSOR as security. LESSEE will deliver the original counterpart of the sublease to LESSOR and make any filings necessary to protect LESSOR’s security interest.
11.14 Application of Cape Town Convention . At LESSOR’s request, LESSEE will cause such sublease and LESSEE’s assignment of such sublease to LESSOR to be registered in the International Registry to the fullest extent such interests may be registered. In addition, LESSEE will obtain in favor of LESSOR a power of attorney from the approved sublessee for purposes of the Cape Town Convention in the form of Exhibit I.
11.15 Wet Leases . The wet leasing of the Aircraft during the Lease Term (in which LESSEE and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without LESSOR’s consent, provided that (a) the Aircraft remains registered in the State of Registration, (b) the Aircraft will neither be based in nor operated in or to a Prohibited Country, (c) LESSEE provides LESSOR with either a certified copy of the applicable provisions from the wet lease agreement or an officer’s certificate confirming that LESSEE or the wet lessee will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the wet lease unless LESSEE shall be responsible under the Wet Lease for maintaining the same and (d) LESSEE complies with Article 18.10.
11.16 Continued Responsibility of LESSEE . LESSEE will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.

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 	ARTICLE 12	MAINTENANCE OF AIRCRAFT	
12.14 General Obligation . During the Lease Term and until the Termination Date, LESSEE alone has the obligation, at its expense, to maintain and repair the Aircraft, Engines, APU and all of the Parts (a) in accordance with the Maintenance Program, (b) in accordance with the rules and regulations of the Aviation Authority, (c) in accordance with Manufacturer’s type design, (d) in accordance with any other regulations or requirements necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft and meet the requirements at all times during the Lease Term and upon return of the Aircraft to LESSOR for issuance of a Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 (except during those periods when the Aircraft is undergoing maintenance or repairs as required or permitted by this Lease and to the extent in conflict with the requirements of the Aviation Authority) and (e) in the same manner and with the same care as used by LESSEE with respect to similar aircraft and engines operated by LESSEE and without in any way discriminating against the Aircraft as compared to such other aircraft.
12.15 Specific Engine Requirements .
 
12.15.1	No Engine will remain in an unserviceable condition for more than three (3) months, unless engine restoration or repair is ongoing and has not been suspended or delayed without reasonable cause and LESSEE is using commercially reasonable efforts to cause such Engine to be returned to service.	
 
12.15.2	When replacing Parts in an Engine, LESSEE will use original equipment manufacturer parts (“ OEM Parts ”). If LESSEE wishes to replace Parts in an Engine with parts which are not OEM Parts, LESSEE must obtain approval from LESSOR before such parts are installed, such approval not to be unreasonably withheld or delayed. If given, LESSOR’s approval will generally be given only for the installation of parts manufactured in accordance with FAR Part 21.303 (or its EASA equivalent) (“ PMA Parts ”) which are consumable parts such as brackets, gaskets and seals. The use of stationary and high energy rotating PMA Parts in the gaspath will not be approved by LESSOR. Any proposed repair to an OEM Part or PMA Part in an Engine which has been approved by an FAA Designated Engineering Representative (DER) must also be approved by LESSOR prior to performance of the repair, such LESSOR approval not to be unreasonably withheld or delayed.	

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12.15.3	LESSEE will not discriminate against the Engines with respect to build standards and life-limited Part replacements. Without limiting the foregoing, at any shop visit during which a Qualified Performance Restoration is performed, LESSEE will	
(a) build the Engine life-limited Parts to at least 6,000 cycles remaining and
(b) perform, at a minimum, a workscope sufficient to allow such Engine to achieve at least 10,000 hours and 6,000 cycles of operation following such shop visit.
 
12.15.4	With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will immediately notify LESSOR and the workscope will be submitted to LESSOR as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost; provided, however, that in the event that through no fault of LESSEE such work delays the return of the Aircraft to LESSOR or causes the Engine to be removed from LESSEE’s revenue service for a period in excess of the period the Engine would have been removed from revenue service had such additional work not been ordered, Article 23.13 shall be applicable and LESSEE and LESSOR will negotiate in good faith to expedite the return and minimize the costs incurred by the parties.	
 
12.15.5	LESSEE will not enter into any Engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine Manufacturer or any other Engine maintenance facility or organization without LESSOR’s prior written consent, which consent will not be unreasonably withheld or delayed. LESSEE will be responsible at its cost for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 23 even if such work is not covered by LESSEE’s Engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:	
(a) LESSOR will receive and retain the Engine Performance Restoration Reserves paid by LESSEE with respect to an Engine until an Engine shop visit has been completed and the applicable Engine has been released to LESSEE;
(b) LESSEE will pay the Engine maintenance facility directly for any costs in excess of the amount reimbursable from the Engine Performance Restoration Reserves, including any differential between the hourly Engine Performance Restoration Reserves payable by LESSEE to LESSOR and the hourly rates charged by the Engine maintenance facility; and
(c) LESSEE will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.

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12.16 Specific Obligations . Without limiting Article 12.1, LESSEE agrees that such maintenance and repairs will include but will not be limited to the specific items set forth in this Article 12.3.
 
12.16.1	LESSEE will perform all routine and nonroutine maintenance work in accordance with the Maintenance Program.	
 
12.16.2	LESSEE will perform all applicable Airworthiness Directives, all mandatory service bulletins of Manufacturer, the Engine Manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft and all other service bulletins which must be performed in order to maintain the warranties on the Aircraft, Engines, APU and Parts.	
 
12.16.3	LESSEE will incorporate in the Aircraft all other service bulletins of Manufacturer, the Engine Manufacturer and other vendors which LESSEE schedules to adopt during the Lease Term for the rest of its Airbus A319 aircraft fleet. It is the intent of the parties that, in terms of service bulletin compliance (including method of compliance) and other maintenance matters, the Aircraft not be discriminated against in comparison to the rest of LESSEE’s fleet of similar aircraft unless LESSEE’s exclusion of the Aircraft is reasonable and occurs during the last year of the Lease Term.	
 
12.16.4	LESSEE’s Maintenance Program for the Aircraft will include a corrosion prevention and control program as recommended by Manufacturer and all discrepancies will be corrected in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
12.16.5	If LESSEE performs structural inspections or tasks on its Airbus A319 fleet on a sampling basis, then all such structural inspections or tasks will be performed on the Aircraft. LESSEE will provide LESSOR with written summaries of the sampling programs involving or affecting the Aircraft.	
 
12.16.6	All Aircraft Documentation will be in English or regularly translated into English and in an up-to-date status.	
 
12.16.7	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the time of most recent installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and	

	 	39	 	ARTICLE 12
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 	cycles since new. In the case of hardtime, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency which performed the last Overhaul or refurbishment.	
 
12.16.8	All Parts other than those referred to in Article 12.3.7 installed on the Aircraft will have FAA-acceptable or EASA-acceptable documentation demonstrating that such Parts were airworthy at the time of most recent installation on the Aircraft.	
 
12.16.9	All repairs and Modifications and the addition, removal or replacement of equipment, systems or components will be properly documented in accordance with the rules and regulations of the Aviation Authority and reflected in the Aircraft Documentation, including Manufacturer’s manuals as required by such rules and regulations. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9). All Modifications will also be accomplished in accordance with FAA-approved data.	
12.17 Replacement of Parts .
 
12.17.1	LESSEE, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair (BER) for use for any reason. In the ordinary course of maintenance, service, repair, Overhaul or testing, LESSEE may remove any Part provided that LESSEE replaces such Part as promptly as practicable. All replacement Parts will (a) be owned by LESSEE free and clear of all Security Interests (except Permitted Liens) of any kind or description (or, if not owned by LESSEE, LESSEE guarantees to LESSOR such title and clearance of all Security Interests), (b) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (c) meet the requirements of Articles 12.3.7 or 12.3.8, as applicable. So long as a substitution meets the requirements of the Maintenance Program and Aviation Authority, LESSEE may substitute for any Part a part that does not meet the requirements of the foregoing sentence if a complying Part cannot be procured or installed within the available ground time of the Aircraft and as soon as practicable having due regard to LESSEE’s operations, the noncomplying part is removed and replaced by a complying Part. Any replacement Parts will also comply with the requirements set forth in Article 12.2.2.	

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MAINTENANCE OF AIRCRAFT	

12.17.2	All Parts removed from the Aircraft will remain the property of LESSOR and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Aircraft) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to LESSOR under the Laws of the State of Registration and the lex situs . To the extent permitted by the Laws of the State of Registration and the lex situs , it is the intent of LESSOR and LESSEE that without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Aircraft as above provided, (a) title to the removed Part will thereupon vest in LESSEE, free and clear of all rights of LESSOR, (b) title to the replacement Part will thereupon vest in LESSOR free and clear of all rights of LESSEE and (c) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Aircraft.	
12.18 Removal of Engines .
 
12.18.1	If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or any other reason, title to such Engine will at all times remain vested in LESSOR.	
 
12.18.2	LESSEE will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place;
(b) LESSEE ensures that the identification plates referred to in Article 15 are not removed from any Engine upon such Engine being detached from the Aircraft; and
(c) title to the Engine remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the Engine or its attachment to or detachment from the Aircraft.
12.19 Removal of APU .
 
12.19.1	If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or for any other reason, title to the APU will at all times remain vested in LESSOR.	

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12.19.2	LESSEE will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place; and
(b) title to the APU remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the APU or its attachment to or detachment from the Aircraft.
12.20 Pooling of Engines, APU and Parts . With LESSOR’s prior written consent, not to be unreasonably withheld or delayed, LESSEE may subject the Engines, APU and Parts to normal interchange or pooling agreements with responsible international, scheduled commercial air carriers customary in the airline industry and entered into by LESSEE in the ordinary course of its business with respect to its entire Airbus A319 fleet so long as (a) in the case of pooling of an Engine or the APU, such Engine or APU is returned to LESSEE within two (2) months, (b) no transfer of title to the Engine or APU occurs, (c) all other terms of this Lease continue to be observed with respect to the Engines, APU or Parts, including Articles 8, 10, 12, 14, 15, 16, 17, 18 and 19 and (d) LESSEE continues to be fully responsible to LESSOR for the performance of all of its obligations hereunder.
12.21 Installation of Engines on other aircraft . Any Engine removed from the Aircraft may be installed on another aircraft in LESSEE’s fleet which utilizes engines of the same type as the Engine only if one of the situations described in this Article 12.8 exists:
 
12.21.1	LESSEE or LESSOR has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).	
 
12.21.2	LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter into an engines cooperation, recognition of rights or similar agreement in form and substance acceptable to LESSOR acting reasonably in which each party agrees to recognize one another’s rights in the engines. LESSEE will reimburse LESSOR and LESSOR’s Lender for their reasonable attorneys’ fees and reasonable documented costs in negotiating and finalizing engine cooperation agreement arrangements with LESSEE and its Creditors.	
 
12.21.3	Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor and its successors and assigns will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft. LESSEE hereby agrees that if LESSOR’s title to an Engine is in fact impaired under any such Creditor Agreement, such impairment will be a Total Loss of such Engine and the	

	 	42	 	ARTICLE 12
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 	provisions of Article 19.5 will apply. To the extent another Creditor Agreement contains such provisions, then LESSOR hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither LESSOR nor its successors or assigns will acquire or claim any right, title or interest in any engine in which LESSEE or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any airframe of such Creditor on which an Engine is installed.	
12.22 Modifications .
 
12.22.1	No modification, alteration or addition to or removal from the Aircraft (“ Modification ”) expected to cost over ***** or deviation from the Aircraft’s original type design or configuration will be made without the prior written consent of LESSOR, which consent will not be unreasonably withheld or delayed. Airworthiness Directives, Manufacturer’s service bulletins and other mandatory orders and service bulletins, compliance with which are required under this Lease, will not constitute “Modifications” and will not require LESSOR consent.	
 
12.22.2	LESSOR may review LESSEE’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by LESSOR, LESSEE will furnish LESSOR (at LESSEE’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All modifications incorporated on the Aircraft will be properly documented in the Aircraft Documentation as required by and shall, if required, be approved by the FAA and the Aviation Authority. All Modifications will also be accomplished in accordance with FAA and Aviation Authority-approved data. All major modifications will be supported by an STC FAA Form 8100-9 or FAA Form 8110-3.	
 
12.22.3	Notwithstanding any other provision of this Lease, no modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.	
 
12.22.4	No modification will be made by LESSEE if an Event of Default exists and is continuing hereunder.	
 
12.22.5	Unless otherwise agreed by LESSOR in writing, all permanent or structural modifications will forthwith become a part of the Aircraft and LESSEE relinquishes to LESSOR all rights and title thereto. However, all temporary and nonstructural modifications will remain the property of LESSEE and, at LESSOR’s request and LESSEE cost, will be removed from the Aircraft prior to return of the Aircraft, with	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	43	 	ARTICLE 12
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 	LESSEE restoring the Aircraft to the condition it was in prior to the modification in a manner cosmetically acceptable to LESSOR acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without LESSOR’s permission after the occurrence of an Event of Default hereunder and immediately upon the occurrence and during the continuance of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such modifications will immediately vest in LESSOR unless and until such Event of Default is cured to LESSOR’s reasonable satisfaction.	
 
12.22.6	LESSOR will bear no liability for the cost of modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.	
12.23 Performance of Work by Third Parties .
 
12.23.1	All off-wing maintenance and repair work on an Engine, the APU and the Landing Gear must be performed by an FAA-approved repair station unless otherwise approved in advance by LESSOR.	
 
12.23.2	Whenever maintenance or repair work on the Airframe or on-wing maintenance or repair work on an Engine or the APU will be performed by a Person other than LESSEE, such Person must be an FAA-approved repair station.	
12.24 Reporting Requirements .
 
12.24.1	Commencing with a report furnished ten (10) days after the end of the calendar month in which Delivery occurs, LESSEE will furnish to LESSOR a Monthly Report in English in the form attached hereto as Exhibit M. Each Monthly Report will be furnished within ten (10) days after the end of each calendar month, except that the Monthly Report pertaining to the last month (or any portion thereof) of flying will be furnished to LESSOR on the Termination Date.	
 
12.24.2	On each anniversary of the Delivery Date, following each twenty (20)-month period during the Lease Term, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	
 
12.24.3	From time to time, LESSEE will provide LESSOR with such other technical information or documents as LESSOR may reasonably request.	
12.25 Maintenance Policies and Procedures Manuals . At LESSOR’s request for the purposes of demonstrating to LESSOR how the Aircraft has been maintained, LESSEE at reasonable times without disruption of its operations and not more often that once annually, provide LESSOR, at LESSOR’s cost (unless an Event of Default has occurred and is continuing),

	 	44	 	ARTICLE 12
MAINTENANCE OF AIRCRAFT	

with on site access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of the LESSEE and that the same will be only utilized as set forth in this Article 12.12 and Article 23.6.
12.26 LESSOR Inspection Rights .
 
12.26.1	At any time (subject to Article 12.13.4), LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) will have the right to inspect and take photographs of the Aircraft and review the Aircraft Documentation.	
 
12.26.2	LESSEE will give LESSOR reasonable written notice before the Aircraft undergoes any “C” or equivalent check.	
 
12.26.3	If the Aircraft is at a third party maintenance facility, LESSEE will use reasonably efforts to cause such facility to allow LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) to inspect and take photographs of the Aircraft and review the Aircraft Documentation, notwithstanding the fact that LESSEE (as the party opening the work order) is considered the “customer” of such facility, subject, in each case, to the rules, regulations and conditions of such maintenance facility and compliance by LESSOR and/or its authorized representatives or agents therewith.	
 
12.26.4	LESSOR will provide LESSEE with reasonable notice prior to any inspection by LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) and will coordinate with LESSEE and/or any applicable third party maintenance facility so as to cause minimum practical disturbance to the operation or maintenance of the Aircraft or the personnel of LESSEE or the applicable third party maintenance facility.	
 
12.26.5	In the event that LESSOR disagrees with or otherwise disputes any information provided by LESSEE with respect to the Aircraft (unless LESSOR reasonably believes that LESSEE would not provide the information), LESSEE expressly authorizes and consents to allowing Manufacturer, the Engine Manufacturer and their field service representatives to provide LESSOR with information about the condition and maintenance of the Aircraft (including the Aircraft Documentation) on an ongoing basis. Manufacturer, the Engine Manufacturer and their field service representatives may report their findings and provide documentation to LESSOR without the need for any further notice to or authorization from LESSEE.	

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12.26.6	LESSOR will have no duty to make any inspection of the Aircraft and will not incur any liability or obligation by reason of (and LESSEE’s indemnity obligations pursuant to Article 17 will apply notwithstanding) LESSOR and/or its authorized agents or representatives making or not making any such inspection or by reason of any reports LESSOR receives regarding the Aircraft.	

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 	ARTICLE 13	USE OF RESERVES	
13.12 Airframe Reserves (6 Year Check) . LESSOR will reimburse LESSEE the Airframe Reserves (6 Year Check) that have accrued in such account from Delivery to the commencement date of the “6Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.13 Airframe Reserves (12 Year Check) . In the event that LESSEE performs a “12Y” check on the Aircraft (including as part of a Return Check pursuant to Article 23.10.1), LESSOR will reimburse LESSEE ***** of the Airframe Reserves (12 Year Check) and Airframe Reserves (6 Year Check) that have accrued and remain in such accounts on the commencement date of the “12Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.14 Engine Performance Restoration Reserves . LESSOR acknowledges that LESSEE has entered into a maintenance cost per flight hour agreement with the Engine Manufacturer (the “ FHA Agreement ”). LESSEE acknowledges that it is required under this Lease to pay to LESSOR the Engine Performance Restoration Reserves even if the Engines are placed under the FHA Agreement. With respect to each Engine, LESSOR will reimburse LESSEE from the Engine Performance Restoration Reserves as follows.
 
13.14.1	For the first Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the total hours that such Engine has accumulated during the Lease Term times ***** per Engine flight hour.	
 
13.14.2	For the second Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the amount present (at the time of removal of the Engine) in the particular Engine Performance Restoration Reserves account for such Engine.	
 
13.14.3	For the avoidance of doubt, the reimbursements shall remain subject to Article 16.1.	
13.15 Engine LLP Reserves . LESSOR will reimburse LESSEE from the Engine LLP Reserves for an Engine for the actual out-of-pocket materials cost without overhead, mark-up or profit factor, and reduced by the amount of any “Waste Expense” (if applicable), associated with the replacement of life-limited Parts in such Engine during completed Engine shop visits ( i.e. heavy maintenance visits), with work performed for all other causes excluded, including those causes set forth in Article 13.8. “ Waste Expense ” means the product of (a) the number of unused cycles on a life-limited Part that is in excess of ***** of such part’s approved life when
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	47	 	ARTICLE 13
USE OF RESERVES	

new, at the time such life-limited Part is removed for replacement, multiplied by (b) the quotient of the cost of the new replacement life-limited Part divided by the number of cycles which constitutes the approved life of such life-limited Part. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement for replacement of life-limited Parts in an Engine will be made up to the amount in the Engine LLP Reserves applicable to such Engine at the time of removal of such Engine.
13.16 Landing Gear Reserves . LESSOR will reimburse LESSEE ***** of the Landing Gear Reserves that have accrued in such account from Delivery to the commencement date of the Overhaul of the Landing Gear for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.17 APU Reserves . LESSOR will reimburse LESSEE from the APU Reserves for the actual cost of a completed medium or heavy repair workscope in accordance with the APU manufacturer’s approved manuals, with work performed for all other causes excluded, including those causes set forth in Article 13.8. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement will be made up to the amount in the APU Reserves at the time of removal of the APU.
13.18 Reimbursement .
 
13.18.1	LESSEE will be entitled to reimbursement from the Reserves after the work is completed and the Airframe, Engine, Landing Gear or APU, as applicable, has left the repair agency, by submitting reasonable evidence (which shall include the items below) of performance of such work and, if requested by LESSOR, an invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim within six (6) months after completion of the work. If LESSEE seeks reimbursement from the Reserves for work performed by LESSEE, such work will be charged at LESSEE’s out-of-pocket and unburdened labor and material costs. LESSEE may only seek reimbursement from the Airframe Reserves one time in any calendar year.	
 
13.18.2	For the Airframe, reasonable evidence of performance includes a list of all routine and nonroutine tasks performed with corresponding references to the MPD and an itemized labor and materials report.	
 
13.18.3	For an Engine and the APU, reasonable evidence of performance includes (a) an original invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim, (b) a description of the reason for removal, (c) the date of removal and the aircraft removed from (which may be the Aircraft), (d) the total hours and cycles at the time	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	48	 	ARTICLE 13
USE OF RESERVES	

 	of removal, (e) the hours and cycles since last shop visit, (f) a full description of the final workscope, (g) a description of the type of maintenance performed (including on each module, if applicable), (h) complete disk records for the Engine both prior to and after the shop visit, (i) a shop findings report, (j) a copy of any test cell performance data, (k) an on and off log of Parts (configuration listing) tracked by LESSEE and the repair facility, (l) a current service bulletin and Airworthiness Directive listing, (m) written verification from the repair facility that the Engine or APU has been released and shipped from the repair facility back to LESSEE, (n) the status of all warranty claims and (o) an itemization of all concessions, warranty credits or other credits which have been or will be provided for work accomplished on the Engine or APU during the applicable shop visit (or, if none, a written statement from LESSEE stating that it has not received and does not have pending any such concessions, warranty credits or other credits).	
 
13.18.4	For the Landing Gear, reasonable evidence of performance includes (i) a release tag from the overhaul facility and all associated build records, including traceability on all life-limited parts, and (ii) the total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul.	
13.19 Reimbursement Adjustment .
 
13.19.1	By way of example, among the exclusions from reimbursement are work or items:	
(a) resulting from repairs actually covered by LESSEE’s or a third party’s insurance (deductibles being for the account of LESSEE and not reimbursable) or covered by warranties to the extent of recovery by LESSEE under such insurance or warranties; or
(b) required as a result of an Airworthiness Directive, manufacturer’s service bulletin (unless approved in advance by LESSOR, which approval will not be unnecessarily withheld or delayed), negligence, nonroutine or nonscheduled maintenance, faulty maintenance or installation, improper operations, misuse, accident, incident, ingestion (foreign object damage) or other accidental cause.
 
13.19.2	All invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible third parties or other sources, such as insurance proceeds, manufacturer’s warranties, guarantees, concessions and credits (including, with respect to Engines, credits due to life remaining on any removed Engine Parts). Notwithstanding anything to the	

	 	49	 	ARTICLE 13
USE OF RESERVES	

 	contrary herein, in the event that any accident, incident, injection incident or other accidental cause necessitates a repair and during such repair the workscope performed results in performance restoration to the Engine or installation of LLPs with more life remaining, the performance of such workscope may be claimed by LESSEE from the Engine Performance Restoration Reserves and/or Engine LLP Reserves.	
13.20 Costs in Excess of Reserves . LESSEE will be responsible for payment of all costs in excess of the amounts reimbursed hereunder. If on any occasion the available balance in the Airframe Reserves, Engine Performance Restoration Reserves for a particular Engine, Engine LLP Reserves for a particular Engine, Landing Gear Reserves or APU Reserves (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the Landing Gear and the APU) is insufficient to satisfy a claim for reimbursement in respect of the Airframe, such Engine, the Landing Gear or the APU; as applicable, the shortfall may not be carried forward or made the subject of any further claim for reimbursement.
13.21 Reimbursement after Termination Date . LESSEE may not submit any invoice for reimbursement from the Reserves after the Termination Date unless on or prior to such date LESSEE has notified LESSOR in writing that such outstanding invoice will be submitted after the Termination Date and the anticipated amount of such invoice. So long as LESSEE has provided such notice to LESSOR, LESSEE may then submit such outstanding invoice at any time within six (6) months after the Termination Date. Subject to the foregoing, any balance remaining in the Reserves on the Termination Date, including termination on account of a Total Loss of the Aircraft, will be retained by LESSOR.
13.22 Total Loss . Upon receipt by LESSOR of the Agreed Value and all other amounts then due by LESSEE, LESSOR shall return to LESSEE ***** of all amounts then held by LESSOR as reserves. In the event of a Total Loss and payment of the Agreed Value in accordance with the terms of this Article 13.11, LESSEE agrees that no invoices to LESSOR will be reimbursed.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	50	 	ARTICLE 13
USE OF RESERVES	

 	ARTICLE 14	TITLE AND REGISTRATION	
14.5 Title to the Aircraft . Title to the Aircraft will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a “true lease”. LESSEE will have no right, title or interest in the Aircraft except as provided in this Lease.
14.6 Registration of Aircraft . LESSEE at its sole cost and expense will (a) register and maintain registration of the Aircraft in the name of LESSOR at the register of aircraft in the State of Registration and (b) from time to time take all other steps then required by Law (including the Geneva Convention or the Cape Town Convention if and as applicable) or as LESSOR may reasonably request to protect and perfect LESSOR’s interest in the Aircraft and this Lease in the State of Registration or in any other jurisdictions in or over which LESSEE may operate the Aircraft.
14.7 Cape Town Convention . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then:
 
14.7.1	LESSOR may elect to cause the interests of LESSOR in this Lease, the other Operative Documents and the Aircraft (including in the Engines) to be registered in the International Registry to the fullest extent such interests may be registered. At LESSOR’s request, LESSEE will provide reasonable assistance and cooperation to LESSOR in order to procure such registration, including consenting to or causing such registration to be made, at LESSOR’s election, as a prospective international interest or an international interest and via a designated entry point (as such terms are used in the Cape Town Convention).	
 
14.7.2	At LESSOR’s request, LESSEE will perform such additional acts and execute and deliver such agreements and instruments as may be reasonably determined by LESSOR to be necessary or appropriate to (a) protect and perfect LESSOR’s interest in the Aircraft, this Lease and the other Operative Documents under the Cape Town Convention and (b) enhance the enforceability of the commercial agreements of LESSEE and LESSOR under the Cape Town Convention to the greatest extent permitted by the Cape Town Convention. Actions to be requested by LESSOR may include entering into amendments to this Lease or the other Operative Documents as are necessary to constitute a prospective international interest or an international interest under the Cape Town Convention.	
 
14.7.3	Unless LESSEE obtains LESSOR’s prior written consent, LESSEE undertakes that it will not consent to or permit any Person other than LESSOR and LESSEE (as	

	 	51	 	ARTICLE 14
TITLE AND REGISTRATION	

 	permitted under this Lease) to make any International Registry filings (including prospective filings) under the Cape Town Convention in relation to this Lease, the other Operative Documents or the Aircraft (including the Engines).	
 
14.7.4	LESSEE will be responsible for all costs and expenses arising out of the requirements of this Article 14.3.	
14.8 Filing of this Lease . To the extent permitted by Law and in accordance with the requirements of the Law from time to time, LESSEE at its sole cost and expense will cause this Lease to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other offices necessary to protect LESSOR’s rights hereunder.

	 	52	 	ARTICLE 14
TITLE AND REGISTRATION	

 	ARTICLE 15	IDENTIFICATION PLATES	
LESSOR will affix and LESSEE will at all times maintain on the Airframe and each Engine the identification plates containing the following legends or any other legend requested by LESSOR in writing:
15.3 Airframe Identification Plates .

Location:	  	One to be affixed to the Aircraft structure above the forward entry door adjacent to and not less prominent than that of Manufacturer’s data plate and another in a prominent place on the flight deck.	
		
Size:	  	No smaller than 2” x 3”.	
		
Legend:	  	“THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION.	
		
	  	MANUFACTURER’S SERIAL NO: {MSN of Aircraft, if known}	
		
	  	OWNER’S ADDRESS:	
		
	  	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Fax: (310) 788-1990”	
15.4 Engine Identification Plates .

Location:	  	The legend on the plate must be no less prominent than the Engine data plate and must be visible. Size: No smaller than 1” x 4”.	
		
Legend:	  	“THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION, LOS ANGELES, CALIFORNIA, USA.”	

	 	53	 	ARTICLE 15
IDENTIFICATION PLATES	

 	ARTICLE 16	TAXES	
16.9 General Obligation of LESSEE . Except as set forth in Article 16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless LESSOR on a full indemnity basis from, all license and registration fees and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon LESSEE, LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority in the U.S., Mexico or any foreign country or by any international taxing authority (including the City or County of Los Angeles), upon or with respect to, based upon or measured by any of the following (collectively, “ Taxes ”):
(a) the Aircraft, Engines, APU or any Parts;
(b) the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;
(c) this Lease, the payments due hereunder and the terms and conditions hereof; and
(d) the ownership, financing, delivery, import or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.
16.10 Exceptions to Indemnity . The indemnity provided for in Article 16.1 does not extend to any of the following Taxes:
(a) Taxes imposed by the U.S. or the State of California or the City or County of Los Angeles on the gross or net income, gross receipts, gains, profits, capital or net worth of LESSOR;
(b) Taxes attributable to the period prior to Delivery or after the Termination Date;
(c) Taxes attributable to LESSOR’s gross negligence, willful misconduct or breach of this Lease or any other agreement, document or instrument entered into and/or delivered in connection herewith by or between LESSOR and LESSEE (unless such breach was caused by an act or omission by LESSEE);

	 	54	 	ARTICLE 16
TAXES	

(d) Taxes imposed upon LESSOR by any jurisdiction which would have been imposed upon LESSOR had LESSOR and LESSEE not entered into and consummated the transactions contemplated by this Lease and other Taxes imposed upon LESSOR as a result of any past, present or future activities of LESSOR in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;
(e) Taxes imposed upon LESSOR as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Person claiming by or through LESSOR of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11 , 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease;
(f) Taxes attributable to a LESSOR’s Lien, to the extent that such Taxes would not have arisen or been assessed in the absence of a LESSOR’s Lien;
(g) Taxes or additional or incremental Taxes and penalties or interest thereon that would not have been imposed but for a failure of LESSOR to provide, following a reasonable request therefor, information necessary for LESSEE to complete and file any tax return or request an otherwise legally available exemption or which result from any failure by LESSOR to file any return which LESSOR is required by Law to file in respect of any such Tax; but only if such information was reasonably available to LESSOR and, in the case of certificates, documentation or other evidence requiring disclosure of knowledge of factual information (such as the location of an Aircraft) that is known to LESSEE but not readily ascertainable by such LESSOR, only if LESSEE provides such information to LESSOR in a timely manner and at LESSEE’s cost;
(h) Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Tax under this Article 16 or Article 25.6, Taxes for which LESSOR actually receives payment from LESSEE for under any provision of this Lease and the payment of which would otherwise constitute a double recovery;
(i) Taxes which are not yet due or are being contested in good faith by LESSOR or any Person claiming by or through LESSOR by appropriate proceedings, during the pendency of such proceedings; or
(j) Taxes which constitute the normal operating expense or overhead of LESSOR.

	 	55	 	ARTICLE 16
TAXES	

16.11 After-Tax Basis . The amount which LESSEE is required to pay with respect to any Taxes indemnified against under Article 16.1 is an amount sufficient to restore LESSOR on an after-tax basis to the same position LESSOR would have been in had such Taxes not been incurred.
16.12 Timing of Payment . Any amount payable to LESSOR pursuant to, this Article 16 will be paid within ten (10) Business Days after receipt of a written demand therefor from LESSOR accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable; provided, however, that such amount need not be paid by LESSEE prior to the earlier of (a) the date any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts which are being contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such contest is finally resolved.
16.13 Contests . If a claim is made against LESSOR for Taxes with respect to which LESSEE is liable for a payment or indemnity under this Lease, LESSOR will promptly give LESSEE notice in writing of such claim; provided, however, that LESSOR’s failure to give notice will not relieve LESSEE of its obligations hereunder except to the extent such failure materially impairs or precludes LESSEE’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay. So long as (a) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, (b) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of independent tax counsel that a reasonable basis exists for contesting such claim and (c) adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted, then LESSOR at LESSEE’s written request will in good faith, with due diligence and at LESSEE’s expense, contest (or permit LESSEE to contest in the name of LESSEE or LESSOR) the validity, applicability or amount of such Taxes.
16.14 Refunds . Upon receipt by LESSOR of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 5.8) which LESSEE has paid, LESSOR will pay to LESSEE the net amount of such Taxes refunded.
16.15 Cooperation in Filing Tax Returns . LESSEE and LESSOR will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.
For the avoidance of doubt, LESSEE will for purposes of the calculation and its payment of the Mexican assets tax (including without limitation Article 25 of the Assets Tax Law Regulation), elect to treat its rights on the Aircraft pursuant to this Lease as an “asset”.

	 	56	 	ARTICLE 16
TAXES	

16.16 Survival of Obligations . The representations, warranties, indemnities and agreements of LESSEE provided for in this Article 16 will survive the Termination Date.

	 	57	 	ARTICLE 16
TAXES	

 	ARTICLE 17	INDEMNITIES	
17.11 General Indemnity . Except as set forth in Article 17.2, LESSEE agrees to indemnify and hold harmless LESSOR and its officers, directors, employees, agents and shareholders (individually an ‘‘ Indemnitee ” and collectively “ Indemnitees ”) from any and all liabilities, obligations, losses, damages, fines, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “ Expenses ”) which are imposed on, incurred by or asserted against any Indemnitee or the Aircraft by any Person other than LESSEE and which are in any way relating to, based on or arising out of any of the following:
(a) the operation, possession, use, nonuse, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by LESSEE, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;
(b) fuel, airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges payable for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, during the Lease Term and until the Termination Date;
(c) the manufacture, design, acceptance, rejection, delivery, return, sale after an Event of Default, import, export, condition, repair, modification, servicing, rebuilding, enforcement of warranties whether in LESSOR’s or LESSEE’s name, customer support, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, reregistration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part, including under a pooling or interchange arrangement prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;

	 	58	 	ARTICLE 17
INDEMNITIES	

(d) the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or
(e) as a consequence of any Default or Event of Default by LESSEE, without duplication of remedies or recovery.
The foregoing indemnity by LESSEE is intended to include and cover any Expense to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Expense does not fall within any of the exceptions listed in Article 17.2.
17.12 Exceptions to General Indemnities . The indemnity provided for in Article 17.1 will not extend to Expenses of any Indemnitee to the extent resulting from or arising out of any of the following:
(a) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to have resulted from the willful misconduct of such Indemnitee;
(b) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to be attributable to acts or events which occur after the Termination Date and return of the Aircraft to LESSOR in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of LESSEE;
(c) Expenses representing Taxes, it being acknowledged that the terms of Article 16 apply exclusively to LESSEE’s indemnity obligations with respect to Taxes;
(d) Expenses due to the breach by LESSOR of its covenant of quiet enjoyment pursuant to Article 21.2 (except to the extent covered by the insurances LESSEE is required to carry pursuant to Article 18);
(e) Expenses which constitute ordinary and usual operating or overhead expenses of LESSOR or any other Indemnitee; or
(f) Expenses attributable to a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Indemnitee of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease.

	 	59	 	ARTICLE 17
INDEMNITIES	

17.13 After-Tax Basis . The amount which LESSEE will be required to pay with respect to any Expense indemnified against under Article 17.1 will be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the same position such Indemnitee would have been in had such Expense not been incurred.
17.14 Timing of Payment . It is the intent of the parties that each Indemnitee will have the right to indemnification for Expenses hereunder as soon as a claim is made and as soon as an Expense is incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17 within ten (10) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity.
17.15 Subrogation . Upon the payment in full of any indemnity pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.
17.16 Notice . Each Indemnitee and LESSEE will give prompt written notice one to the other of any liability of which such party has knowledge for which LESSEE is, or may be, liable under Article 17.1; provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 17 except to the extent that LESSEE has been materially prejudiced by the failure to provide such notice.
17.17 Refunds . If any Indemnitee obtains a recovery of all or any part of any amount which LESSEE has paid to such Indemnitee, such Indemnitee will pay to LESSEE the net amount recovered by such Indemnitee.
17.18 Defense of Claims . Unless a Default or Event of Default has occurred and is continuing, LESSEE and its insurers will have the right (in each such case at LESSEE’s sole expense) to investigate or, provided that LESSEE or its insurers have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim covered by insurance for which indemnification is sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE or its insurers with respect thereto. If LESSEE or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at LESSEE’s expense.
17.19 No Double Recovery . Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Expense under both this Article 17 and Article 25.6, LESSOR will not be entitled to actually receive payment from LESSEE for the same Expense twice.

	 	60	 	ARTICLE 17
INDEMNITIES	

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

	 	61	 	ARTICLE 17
INDEMNITIES	

 	ARTICLE 18	INSURANCE	
18.18 Categories of Insurance . Throughout the Lease Term and until the Termination Date, LESSEE will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through such brokers and with such insurers as may be acceptable to LESSOR, such acceptance not to be unreasonably withheld or delayed, in London or New York or such other insurance markets as mutually agreed upon by the parties.
18.19 Write-back of any Date Recognition Exclusion . In the event any of LESSEE’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000-related problems, LESSEE at its cost will obtain for the benefit of itself, and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusion.
18.20 Write-backs of LSW555.D and AVN48C Exclusions . In the event that a write-back of the exclusions (losses due to causes such as dirty bombs, electromagnetic weapons, radioactive contamination and chemical, biological and/or biochemical hazards) to the standard London policy forms LSW555.D and, if issued, AVN48C becomes available at commercially reasonable terms, LESSEE at its cost will obtain for the benefit of itself and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusions to the extent and with policy limits consistent with general market practices applicable to similarly situated carriers or, if greater, as maintained in respect of any other aircraft of like make and model in LESSEE’s fleet.
18.21 Installation of Third Party Engine . If LESSEE installs an engine not owned by LESSOR on the Aircraft, either (a) LESSEE’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the LESSEE to such third party engine owner.
18.22 LESSOR Coverage for LES SEE’s Employees . LESSOR and the other additional insureds will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.

	 	62	 	ARTICLE 18
INSURANCE	

18.6 Insurance for Indemnities . The insurance referred to in Article 18.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 17 and LESSEE will maintain such insurance of the indemnities for a period of two (2) years following the Termination Date.
18.7 Insurance required by Manufacturer . During the Lease Term, LESSEE will carry any insurance required by Manufacturer in connection with the assignment of any Manufacturer warranties, customer support or product support to LESSEE.
18.8 Renewal . From time to time when reasonably requested by LESSOR, LESSEE will confirm to LESSOR regarding the status of the renewal or replacement of LESSEE’s insurance. Prior to or on the expiration or termination date of any insurance required hereunder, LESSEE will provide LESSOR with fax or e-mail confirmation from LESSEE’s insurance brokers that such insurance has been renewed or has been replaced in a mariner consistent with the requirements hereof and that certificates of insurance evidencing the renewal or replacement of such insurance and complying with Exhibit C will be issued on the termination date of the prior certificate. Within seven (7) days after such renewal, LESSEE will furnish its brokers’ certificates of insurance to LESSOR.
18.9 Assignment of Rights by LESSOR . If LESSOR assigns all or any of its rights under this Lease or otherwise disposes of any interest in the Aircraft to any other Person, LESSEE will, upon written request, procure that such Person, in each case as permitted by this Lease, hereunder be added as loss payee and/or additional assured in the policies effected hereunder and, if applicable substituted as Loss Payee under the hull insurance and enjoy the same rights and insurance enjoyed by LESSOR under such policies. LESSOR will nevertheless continue to be covered by such policies.
18.10 Insurance for Wet Lease Operations . In the event LESSEE is performing wet lease operations with the Aircraft pursuant to Article 11.7 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance will meet the requirements of Exhibit C, including with respect to the amounts of coverage, naming of LESSOR as an additional insured and inclusion of the other endorsements described in Exhibit C. Moreover, LESSEE will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, LESSOR will receive certificates of insurance from the insurance brokers for LESSEE and, if applicable, the wet lessee evidencing such coverages.
18.11 Other Insurance . In the event of a material change in standard market practices with respect to air carriers similarly situated to LESSEE occurs following Delivery, LESSOR may, acting reasonably and upon consultation with LESSEE’s designated brokers and other

	 	63	 	ARTICLE 18
INSURANCE	

LESSORS of Aircraft within LESSEE’s fleet from time to time by notice to LESSEE require LESSEE at LESSEE’s expense to effect such other insurance or such variations to the terms of the existing insurance as may then be customary in the airline industry for aircraft of the same type as the Aircraft operated by carriers similarly situated to LESSEE and at the time commonly available in the insurance market on commercially reasonable terms.
18.12 Information . LESSEE will provide LESSOR with any information reasonably requested by LESSOR from time to time concerning the insurance maintained with respect to the Aircraft or in connection with any claim being made or proposed to be made thereunder, except for information regarding insurance premiums and the level of insurance LESSEE has obtained above the requirements of this Lease, so long as such level is not in violation of this Lease.
18.13 Currency . All proceeds of insurance pursuant to this Lease will be pay-able in Dollars except as may be otherwise agreed by LESSOR.
18.14 Grounding of Aircraft . If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, LESSEE will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again.
18.15 Failure to Insure . If at any time LESSEE fails to maintain insurance in compliance with this Article 18, LESSOR will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):
(a) to pay any premiums due or to effect or maintain insurance satisfactory to LESSOR or otherwise remedy such failure in such manner as LESSOR considers appropriate (and LESSEE will upon demand reimburse LESSOR in full for any amount so expended in that connection); or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by LESSOR, until such failure is remedied to LESSOR’s satisfaction.
18.16 Reinsurance . Any reinsurance will be maintained with reinsurers and brokers acceptable to LESSOR, acting reasonably. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to LESSOR:
(a) the same terms as the original insurance;
(b) a cut-through and assignment clause satisfactory to LESSOR, acting reasonably; and
(c) payment will be made notwithstanding (i) any bankruptcy, insolvency, liquidation or dissolution of any of the original insurers and/or (ii) that the original insurers have made no payment under the original insurance policies.

	 	64	 	ARTICLE 18
INSURANCE	

18.17 Limit on Hull in favor of LESSEE . LESSEE may carry hull all risks or hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to LESSOR) only to the extent such excess insurance which would be payable to LESSEE in the event of a Total Loss does not exceed ***** of the Agreed Value and only to the extent that such additional insurance will not prejudice the insurances required in this Lease or the recovery by LESSOR thereunder. LESSEE agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	65	 	ARTICLE 18
INSURANCE	

 	ARTICLE 19	LOSS, DAMAGE AND REQUISITION	
Throughout the Lease Term and until the Termination Date, LESSEE will bear all risk of loss, theft, damage and destruction to the Aircraft.
19.10 Definitions. In this Article 19 and this Lease:
“ Agreed Value ” means an amount equal to ***** of the Manufacturer’s list price for the Aircraft on the Delivery Date, based upon the invoice provided by Manufacturer; provided, however, that the Agreed Value will be decreased by ***** of such amount on each yearly anniversary of the Delivery Date.
“ Net Total Loss Proceeds ” means the Total Loss Proceeds actually’ received by LESSOR following a Total Loss, less any reasonable legal and other out-of-pocket expenses, taxes or duties incurred by LESSOR in connection with the collection of such proceeds.
“ Total Loss ” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “ Total Loss Date ” means the date set forth in parenthesis after each Total Loss:
(a) destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);
(b) actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or forty five (45) days after the date of notice to LESSEE’s brokers or insurers claiming such total loss);
(c) requisition of title, confiscation, forfeiture or any compulsory acquisition or other similar event (the date on which the same takes effect);
(d) sequestration, detention, seizure or any similar event for more than forty five (45) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);
(e) requisition for use for more than one hundred eighty (180) consecutive days, except as set forth in Article 19.9 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	66	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

(f) in the case of an Engine, the event described in Article 12.8.3 (the date on which the same takes effect);
(g) any sale of the Aircraft in connection with Eurocontrol or other navigation or airport charges (the date on which the sale occurs);
(h) any sale of the Aircraft in connection with a LESSEE bankruptcy, whether by an administrator, trustee or court (the date on which the intent to sell the Aircraft becomes known); or
any other occurrence not permitted under this Lease which deprives LESSEE of use or possession for a period of sixty (60) consecutive days or longer (the 60 th day of such period).
“ Total Loss Proceeds ” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.
19.11 Notice of Total Loss . LESSEE will notify LESSOR in writing within two (2) Business Days after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.
19.12 Total Loss of Aircraft or Airframe . If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:
 
19.12.1	After the Total Loss Date and until receipt by LESSOR of the Agreed Value and all other amounts then due under this Lease, LESSEE will continue to pay Rent and the patties will perform all of their other obligations under this Lease.	
 
19.12.2	On the date which is the earlier of the following dates:	
(a) the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by LESSEE’s insurance underwriters or brokers and
(b) the date which falls thirty (30) days after the Total Loss Date,
LESSEE will pay to LESSOR an amount equal to the sum of:
(a) the Agreed Value and
(b) all other amounts then due and payable by LESSEE under this Lease, less an amount equal to the Net Total Loss Proceeds received by LESSOR by such date.

	 	67	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

19.12.3	LESSOR will apply the Net Total Loss Proceeds and any amounts received from LESSEE pursuant to Article 19.3.2 as follows:	
(a) first, in discharge of any unpaid Rent and any other amounts accrued and unpaid up to the date of LESSOR’s receipt of the Agreed Value;
(b) second, in discharge of the Agreed Value; and
(c) third, payment of the balance, if any, to LESSEE.
 
19.12.4	Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3, provided no Default or Event of Default has occurred and is continuing, this Lease will terminate except for LESSEE’s obligations under Articles 10.5, 16 and 17 which survive the Termination Date.	
FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE, ENGINES OR THE APU.
19.13 Surviving Engine(s) . If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of LESSEE (subject to agreement of relevant insurers) and on receipt of all monies due under Article 19.3 and payment by LESSEE of all airport, navigation and other charges on the Aircraft, LESSOR will transfer all its right, title and interest in the surviving Engine(s) to LESSEE, but without any responsibility, condition or warranty on the part of LESSOR other than as to freedom from any LESSOR’s Lien.
19.14 Total Loss of Engine and not Airframe .
 
19.14.1	Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such Engine as soon as reasonably possible by duly conveying to LESSOR title to another engine from LESSEE (or another Person with a net worth at least equal to that of LESSEE) (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having	

	 	68	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	a value and utility at least equal to the Engine which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the older of the two Engines delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date, and (d) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement engine will be an “Engine” as defined in this Lease and the Engine which sustained such Total Loss will cease to be an “Engine”.	
 
19.14.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement Engine becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed Engine. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed Engine will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	
 
19.14.3	Notwithstanding Articles 19.5.1 and 19.5.2, if at the time of a Total Loss of an Engine not installed on the Aircraft or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSOR and LESSEE are parties to a spare engine lease pursuant to which LESSOR is leasing a spare engine to LESSEE of the same model and type as the Engine which has suffered such Total Loss, LESSOR will receive from LESSEE the replacement cost of the Engine instead of accepting a replacement engine. One (1) of such LESSOR spare engines will then be substituted under this Lease for the Engine which suffered such Total Loss and the applicable spare engine lease will terminate.	
19.15 Total Loss of APU .
 
19.15.1	Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such APU as soon as reasonably possible by duly conveying or causing to be conveyed to LESSOR title to another auxiliary power unit (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the APU delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date and (d) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or	

	 	69	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined in this Lease and the auxiliary power unit which sustained such Total Loss will cease to be the “APU”.	
 
19.15.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement APU becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed APU. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed APU will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	
19.16 Other Loss or Damage .
 
19.16.1	If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of LESSEE under this Lease (including payment of Rent) will continue in full force.	
 
19.16.2	In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, LESSEE will at its sole cost and expense fully and with reasonable promptness repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. All repairs will be performed in a manner which preserves and maintains all warranties and service life policies to the same extent as they existed prior to such loss or damage. LESSEE will notify LESSOR forthwith of any loss, theft or damage to the Aircraft for which the cost of repairs is estimated to exceed *****, together with LESSEE’s proposal and timetable for carrying out the repair. In the event that LESSOR does not agree with LESSEE’s proposal for repair, LESSOR will so notify LESSEE within two (2) Business Days after its receipt of such proposal. LESSEE and LESSOR will then consult with Manufacturer and LESSEE and LESSOR agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, LESSEE will carry out the repairs in accordance with the directions of LESSOR. If the Aircraft is airworthy or the Engine or APU serviceable notwithstanding the loss or damage, LESSEE will repair such Aircraft, Engine or APU, as the case may be, within the time frame reasonably established by LESSOR given the circumstances.	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	70	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

19.17 Copy of Insurance Policy . Promptly after the occurrence of a partial loss or Total Loss of the Aircraft, an Engine or the APU, LESSEE will provide LESSOR with a copy of LESSEE’s insurance policy, provided, however, that LESSEE may redact from such copy the commercial terms of its arrangement with the insurer.
19.18 Government Requisition . If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, LESSEE will promptly notify LESSOR of such requisition. All of LESSEE’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by LESSOR or LESSEE from such Government Entity will be paid over to or retained by LESSEE. If a Default or Event of Default has occurred and is continuing, all payments received by LESSEE or LESSOR from such Government Entity may be used by LESSOR to satisfy any obligations owing by LESSEE.

	 	71	 	ARTICLE 19
LOSS, DAMAGE AND REQUISITION	

 	ARTICLE 20	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	
20.3 Representations and Warranties . LESSEE represents and warrants the following, to LESSOR as of the date of execution of this Lease and as of the Delivery Date:
 
20.3.1	Status . LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
20.3.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by LESSEE of this Lease, except as will have been duly effected as of the Delivery Date.	
 
20.3.3	Binding . LESSEE’s Board of Directors has authorized LESSEE to enter into this Lease, any Side Letters hereto and any other documentation in connection with the leasing of the Aircraft from LESSOR (collectively, the “ Operative Documents ”) and perform its obligations under the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by LESSEE and represent the valid and binding obligations of LESSEE, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	
 
20.3.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSEE of the transactions contemplated in this Lease and compliance by LESSEE with the terms and provisions hereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of LESSEE, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	

	 	72	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSEE	

20.3.5	Filings . Except for any filing or recording that may be required with the Aviation Authority, no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of the State of Registration or of Mexico in order for this Lease to constitute a valid and perfected lease of record relating to the Aircraft.	
 
20.3.6	Translation or Notarization . None of the Lease or any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.	
 
20.3.7	Licenses . LESSEE holds all licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.	
 
20.3.8	No Suits . There are no suits, arbitrations or other proceedings pending or to LESSEE’s knowledge threatened before any court or administrative agency against or affecting LESSEE which, if adversely determined, would have a material adverse effect on LESSEE or its ability to perform under this Lease, except as described in the filings provided to LESSOR pursuant to Article 22.	
 
20.3.9	No Withholding . Under the Laws of Mexico, LESSEE will not be required to deduct any withholding or other Tax from any payment it may make under this Lease.	
 
20.3.10	No Restrictions on Payments . Under the Laws of Mexico, there are no present restrictions on LESSEE making the payments required by this Lease.	
 
20.3.11	General Obligations . The obligations of LESSEE under this Lease are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by Law.	
 
20.3.12	No Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets is entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder constitute commercial acts done for commercial purposes.	
 
20.3.13	Tax Returns . All necessary returns have been delivered by LESSEE to all relevant taxation authorities in the jurisdiction of its formation and LESSEE is not in default in the payment of any taxes due and payable.	

	 	73	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSEE	

20.3.14	No Material Adverse Effect . LESSEE is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on LESSEE’s ability to perform under this Lease.	
 
20.3.15	No Default or Event of Default under this Lease . At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to LESSOR pursuant to Article 22 fairly present the financial condition of LESSEE.	
20.4 Covenants . LESSEE covenants to LESSOR that it will comply with the following throughout the entire Lease Term:
 
20.4.1	Licensing . LESSEE will hold all required licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. LESSEE will advise LESSOR promptly in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.	
 
20.4.2	Payments . If at any time any such restrictions may be applicable, LESSEE will obtain all certificates, licenses, permits, exemptions and other authorizations which are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated in this Lease, and will maintain the same in full force and effect for so long as the same will be required.	
 
20.4.3	Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, will continue to be subject to private commercial law and suit. Neither LESSEE nor its properties or assets will be entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. LESSEE will advise LESSOR promptly of any change in the foregoing.	
 
20.4.4	Information about Suits . LESSEE will promptly give to LESSOR a notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially adversely affect LESSEE’s ability to perform under this Lease.	
 
20.4.5	Restrictions on Mergers . LESSEE will not consolidate with or merge into any other Person or sell, convey, lease, or otherwise transfer all or substantially all of its assets (whether in one transaction or a series of transactions) to any Person (a “ Reorganization Transaction ”), unless:	
(a) the Person formed by such consolidation or surviving such merger, or the Person who acquires by sale, conveyance, transfer, or lease all or substantially all of LESSEE’s assets (the “ Reorganized Entity ”) has a net worth and financial capacity which are reasonably sufficient to meet (i) all obligations of LESSEE under the Operative Documents, (ii) all obligations of LESSEE under all other agreements between LESSEE and LESSOR concerning the leasing or financing of aircraft or the extension, restructuring or rescheduling of credit, and (iii) the other obligations of the Reorganized Entity on a going forward basis;

	 	74	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSEE	

(b) the Reorganized Entity (i) executes and delivers to LESSOR an agreement, in form and substance reasonably satisfactory to LESSOR, containing an assumption by the Reorganized Entity of the due and punctual performance and observance of all of LESSEE’s obligations under the Operative Documents, and (ii) makes such filings and recordings, including any filing or recording with the FAA or any filing under the Uniform Commercial Code, as are necessary to evidence such Reorganization Transaction and all filings necessary in order to preserve and protect the rights of LESSOR as owner of the Aircraft and lessor under this Lease;
(c) (i) such transaction shall not create a Default, (ii) no Event of Default shall exist immediately after such transaction, and (iii) the benefits of Section 1110 of the U.S. Bankruptcy Code available to LESSOR immediately prior to such Reorganization Transaction shall not be adversely affected as a result of such Reorganization Transaction;
(d) the Reorganized Entity delivers to LESSOR:
(i) a certificate, signed on its behalf by a responsible officer, stating that all the conditions precedent set forth in the foregoing clauses of this Article 20.2.5 have been fulfilled, and
(ii) an opinion of counsel for LESSEE or for the Reorganized Entity, from counsel and in form and substance reasonably satisfactory to LESSOR, stating that [A] the agreements entered into to effect the assumption agreement referenced in Article 20.2.5(b) have been duly authorized, executed, and delivered by the Reorganized Entity and that they (and the Operative Documents so assumed) constitute legal, valid, and binding obligations of the Reorganized Entity, enforceable in accordance with their terms (to the same extent as the Operative Documents so assumed were enforceable against LESSEE immediately prior to such Reorganization Transaction), and [B] containing such other matters as LESSOR reasonably requests.

	 	75	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSEE	

Upon effecting any such Reorganization Transaction, the Reorganized Entity shall succeed to all the obligations of LESSEE and shall succeed to, shall be substituted for, and may exercise every right and power of LESSEE under the Operative Documents, with the same effect as if the Reorganized Entity had been named as LESSEE therein. No such Reorganization Transaction shall have the effect of releasing LESSEE (or any Reorganized Entity) from any of its liabilities under the Operative Documents. LESSEE shall pay all reasonable out-of-pocket expenses of LESSOR (including but not limited to its reasonable attorneys’ fees) in respect of such transfer.
 
20.4.6	Restriction on Relinquishment of Possession . LESSEE will not, without the prior consent of LESSOR, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease, including Articles 11 and 12.	
 
20.4.7	No Security Interests . LESSEE will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein. LESSEE will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time unless the same results from an act or omission of LESSOR or LESSOR’s Lender. LESSEE will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to LESSOR.	
 
20.4.8	Representations to Other Parties . LESSEE will not represent or hold out LESSOR as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.	

	 	76	 	ARTICLE 20
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSEE	

 	ARTICLE 21	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	
21.3 Representations and Warranties . LESSOR represents and warrants the following to LESSEE as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 8:
 
21.3.1	Corporate Status . LESSOR is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of California. It has the corporate power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
21.3.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to any U.S. Government Entity is required for the valid authorization, execution, delivery and performance by LESSOR of this Lease.	
 
21.3.3	Binding . This Lease and the other Operative Documents have been duly authorized, executed and delivered by LESSOR and represent the valid and binding obligations of LESSOR, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
21.3.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSOR of the transactions contemplated in this Lease and compliance by LESSOR with the terms and provisions hereof do not and will not contravene any Law applicable to LESSOR, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSOR is a party or by which LESSOR or its properties or assets may be bound or affected.	
21.4 Covenant of Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing hereunder, LESSOR covenants that during the Lease Term neither LESSOR nor any Person lawfully claiming by or through LESSOR will interfere with or otherwise disturb LESSEE’s quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of this Lease. LESSOR further agrees that LESSOR will procure that any Person taking title to the Aircraft granted by LESSOR during the Lease Term shall provide to LESSEE a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.

	 	77	 	ARTICLE 21
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF LESSOR	

 	ARTICLE 22	FINANCIAL AND OTHER INFORMATION	
LESSEE agrees to furnish each of the following to LESSOR:
(a) within forty-five (45) days after the end of each fiscal quarter of LESSEE, three (3) hard copies of the unaudited consolidated financial statements (including a balance sheet and profit and loss statement) prepared for such quarter in accordance with generally accepted accounting principles in Mexico;
(b) within ninety (90) days after the end of each fiscal year of LESSEE, three (3) hard copies of the audited consolidated financial statements (including a balance sheet and profit and loss statement) prepared as of the close of such fiscal year in accordance with generally accepted accounting principles in Mexico;
(c) promptly after distribution, three (3) hard copies of all reports and financial statements which LESSEE sends or makes available to its creditors and other aircraft lessors; and
(d) from time to time, such other reasonable information as LESSOR may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of LESSEE; and
Notwithstanding the foregoing, if at any time LESSEE shall be required to file or otherwise furnish financial statements substantially equivalent to those required to be furnished hereunder to any governmental agency of the state of Registration and such financial statements are available, at no unreasonable effort and no charge on the internet, the furnishing of the same by LESSEE shall be deemed to satisfy the requirements of this Article.

	 	78	 	ARTICLE 22
FINANCIAL AND OTHER INFORMATION	

 	ARTICLE 23	RETURN OF AIRCRAFT	
23.19 Date of Return . LESSEE is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 19.3. If an Event of Default occurs hereunder by LESSEE failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and LESSOR repossesses the Aircraft, the return requirements set forth in this Article 23 nonetheless must be met on the date the Aircraft is actually returned to LESSOR or repossessed by LESSOR.
23.20 Last Engine Shop Visits . With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will promptly notify LESSOR and the workscope will be submitted to Lessor as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost.
23.21 Technical Report . No later than six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), LESSEE will provide LESSOR with a Technical Evaluation Report in the form and substance of Exhibit O, as revised, and, in addition upon LESSOR’s request, will make copies available of (a) drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return, (b) an Airworthiness Directive status list, (c) a service bulletin incorporation list, (d) rotable tracked, hard-time and life-limited component listings, (e) a list of modifications, alterations and repairs, (f) interior material burn certificates, (g) the Maintenance Program, (h) the complete workscopes for the checks, inspections and other work to be performed prior to return, (i) a forecast of the checks, inspections and other work to be performed within eighteen (18) months after return of the Aircraft, (j) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by LESSEE from Manufacturer or the Engine Manufacturer, (k) current Engine disk sheets, (l) last Engine shop visit reports, (m) takeoff and cruise trend reports for the last nine (9) months and (n) any other data which is reasonably requested by LESSOR.
23.22 Return Location . LESSEE at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR at Aeromantenimiento. S.A. in El Salvador or another FAA-approved maintenance facility at a location mutually agreed to by LESSEE and LESSOR.

	 	79	 	ARTICLE 23
RETURN OF AIRCRAFT	

23.5 Full Aircraft Documentation Review . For the period commencing at least one (1) month prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to LESSOR in the condition required by this Lease, LESSEE will provide for the review of LESSOR and/or its representative all of the Aircraft records and historical documents described in Exhibit N in one central room with access to telephone, photocopy, fax and internet connections at the Aircraft return location.
23.6 Maintenance Policies and Procedures Manuals . At return of the Aircraft and at LESSOR’s request for the purposes of bridging and demonstrating to the next operator and its aviation authority how the Aircraft has been maintained, LESSEE will provide LESSOR with access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of LESSEE (not to be unreasonably withheld or delayed) and that the same will be only utilized as set forth in Article 12.12 and this Article 23.6.
23.7 Aircraft Inspection .
 
23.7.1	During the maintenance checks performed prior to the proposed redelivery and at the actual return of the Aircraft, LESSOR and/or its representatives will have an opportunity to observe functional and operational system checks, perform a visual inspection of the Aircraft (taking into account the Aircraft type, age, use and other known factors with respect to the Aircraft) and perform a full inspection of the Aircraft Documentation (including records and manuals), all to LESSOR’s reasonable satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.2	Prior to the Aircraft acceptance flight described in Article 23.7.3, with LESSOR and/or LESSOR’s representatives present, LESSEE will conduct a systems functional and operational inspection of the Aircraft in accordance with Manufacturer’s checklist procedures.	
 
23.7.3	Immediately prior to redelivery of the Aircraft, LESSEE will carry out for LESSOR and/or LESSOR’s representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by LESSOR, in accordance with an airline acceptance flight procedure, either of which will be for not less than two (2) hours and not more than three (3)	

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 	hours. Flight costs and fuel will be furnished by and at the expense of LESSEE. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.4	To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date, the Lease Term will be deemed to have been automatically extended and the obligations of LESSEE hereunder (including Article 23.14.3) will continue on a day-to-day basis until the Aircraft is accepted by LESSOR executing the Return Acceptance Receipt in the form of Exhibit L.	
23.8 Certificate of Airworthiness Matters .
 
23.8.1	The Aircraft will possess a current Certificate of Airworthiness issued by the Aviation Authority (although this Certificate of Airworthiness may later be replaced by an Export Certificate of Airworthiness or equivalent if requested by LESSOR pursuant to Article 23.12). In addition, even if LESSEE must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 12, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 and, in addition, to meet the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.2	At LESSOR’s request, LESSEE at its cost will demonstrate that the Aircraft meets the requirements for issuance of the U.S. Standard Certificate of Airworthiness for transport category aircraft specified in Article 23.8.1 by delivering to LESSOR at LESSOR’s option either an actual U.S. Standard Certificate of Airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to LESSOR signed by an FAA Designated Airworthiness Representative (DAR) or another Person acceptable to LESSOR stating that the DAR or such Person has inspected the Aircraft and Aircraft Documentation (including records and manuals) and has found that the Aircraft meets the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft in accordance with FAR Part 21 and, in addition, meets the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.3	If the Aircraft is to be registered in a country other than in the U.S. after return from LESSEE, LESSOR may in its sole discretion waive the requirements of Article 23.8.2 and instead require that LESSEE at its expense (to the extent such expense is no greater than that which LESSEE would have incurred pursuant to	

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 	Articles 23.8.1 and 23.8.2, with any additional expenses being for LESSOR’s account) put the Aircraft in a condition to meet the requirements for issuance of a Certificate of Airworthiness of the aviation authority of the next country of register.	
23.9 General Condition of Aircraft at Return .
 
23.9.1	The Aircraft, Engines, APU and Parts will have been maintained and repaired in accordance with the Maintenance Program, the rules and regulations of the Aviation Authority and this Lease.	
 
23.9.2	If any Part installed on the Airframe, any Engine or the APU at return was not installed at Delivery, then such Part will have met the requirements of Article 12.4.1 at the time of installation.	
 
23.9.3	The requirements of Article 12.2.2 will have been met with respect to the installation of PMA Parts and OEM Parts in the Engines during the Lease Term. Without limiting the foregoing, all stationary high energy Parts in the gaspath of the Engines will be OEM Parts.	
 
23.9.4	Aircraft Documentation (including records and manuals) will have been maintained in English and in an up-to-date status, in accordance with the rules and regulations of the Aviation Authority and the FAA and this Lease and in a form necessary in order to meet the requirements of Article 23.8.1. The records and historical documents set forth in Attachment 1 of Exhibit L will be in English. If LESSEE subscribes to Manufacturer’s on-line data access services, LESSEE must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD, microfilm or other format acceptable to LESSOR.	
 
23.9.5	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the most recent time of installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency or EASA-approved repair agency, as applicable, which performed the last Overhaul or refurbishment.	
 
23.9.6	All Parts other than those referred to in Article 23.9.5 installed on the Aircraft will have FAA-acceptable documentation demonstrating that such Parts were airworthy at the most recent time of installation on the Aircraft.	

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23.9.7	The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 23, reasonable wear and tear from normal flight operations excepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis.	
 
23.9.8	The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by- Manufacturer, the Aviation Authority and FAA.	
 
23.9.9	The Aircraft interior (including cabin and windows) and exterior will be clean, with all compartments free of foreign objects. The Aircraft will be substantially free of dirt, grease, fluids, stains, grime, cracks, tears and rips, consistent with worldwide commercial airline standards for used aircraft at completion of a heavy maintenance check.	
 
23.9.10	No special or unique Manufacturer, Engine Manufacturer or Aviation Authority inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.	
 
23.9.11	All repairs to the Aircraft will have been accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9) for the Aircraft.	
 
23.9.12	All major modifications will also be accomplished in accordance with FAA-approved data supported by a supplemental type certificate, FAA Form 8110-3 or 8100-9.	
 
23.9.13	The Aircraft will be returned with LESSOR’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent LESSEE performed a Modification which cost in excess of ***** and LESSOR did not approve such Modification in accordance with Article 12.9.1, LESSOR may require LESSEE to return the Aircraft in its original condition prior to such Modification.	
 
23.9.14	All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance by means of terminating action prior to return of the Aircraft to LESSOR or within 6 months after the Termination Date will have been complied with on the Aircraft on a terminating action basis at LESSEE’s cost. Airworthiness Directives which require compliance by means other than terminating	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

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 	action prior to return of the Aircraft or 6 months after Return to LESSOR, will have been performed to the highest level of accomplishment possible other than terminating action. If, after using commercially reasonable efforts, LESSEE is unable to acquire the material, parts or components necessary to accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon return of the Aircraft the estimated cost of terminating such Airworthiness Directive. If the estimated cost cannot be mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain an estimate from a reputable FAA-approved maintenance facility (unaffiliated with LESSEE or LESSOR) and the estimated cost will be the average of the two estimates.	
 
23.9.15	All Modifications which must be performed prior to the date of return of the Aircraft or within 6 months after the Termination Date in order to meet the FAA requirements for FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129 operations will have been incorporated on the Aircraft at LESSEE’s cost.	
 
23.9.16	The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer and LESSEE will provide LESSOR with documentation substantiating such compliance.	
 
23.9.17	If any waivers, deviations, dispensations, alternate means of compliance, extensions or carry-overs with respect to maintenance or operating requirements, repairs or Airworthiness Directives are granted by the Aviation Authority or permitted by the Maintenance Program, LESSEE at its sole cost and expense will nonetheless perform such maintenance or operating requirements, repairs or Airworthiness Directives as if such waivers, deviations, dispensations, alternate means of compliance, or extensions or carry-overs did not exist.	
 
23.9.18	The Aircraft will be free from any Security Interest except LESSOR’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest or right of detention or sale in favor of the Aviation Authority, any airport authority, Eurocontrol or any other authority or Government Entity.	
 
23.9.19	All no-charge vendor and Manufacturer’s service bulletin kits received by LESSEE for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no-charge vendor and Manufacturer’s service bulletin kits ordered by LESSEE but not yet received will, upon receipt by LESSEE and at LESSEE’s cost, be forwarded as instructed by LESSOR. At LESSOR’s request, any other service bulletin kit which LESSEE ordered specifically for the Aircraft and paid for will also be delivered to LESSOR on board the Aircraft, but LESSOR will reimburse LESSEE for its actual out-of-pocket costs for such kit, unless LESSEE purchased such kit as part of its	

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 	implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but had not yet installed such kit on the Aircraft, in which case such kit will be furnished free of charge to LESSOR.	
 
23.9.20	The Aircraft will be free of any leaks found to be outside of maintenance manual limits and any damage resulting therefrom. All repairs will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions unless no such permanent repair is available.	
 
23.9.21	The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced to full and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.	
23.10 Checks Prior to Return . Immediately prior to return of the Aircraft to LESSOR, LESSEE at its expense will do each of the following:
 
23.10.1	LESSEE will have the Return Check performed by an FAA-approved repair facility. LESSEE also agrees to perform during the Return Check any other work reasonably requested by LESSOR (and not otherwise required under this Lease) and LESSOR will reimburse LESSEE for performing such LESSOR-requested work based on LESSEE’s out-of-pocket and unburdened labor and material costs. In the event that LESSEE exercises any extension option with respect to the Initial Lease Term, and the next consecutive check due on the Aircraft pursuant to the MPD (regardless of whether or not such check would have fallen during the Lease Term) is a “12Y” check, then LESSEE will accomplish the “12Y” check (including all lesser checks) as described in the MPD.	
 
23.10.2	LESSEE will perform an internal and external corrosion inspection and correct any discrepancies in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
23.10.3	LESSEE will remove LESSEE’s exterior markings, including all exterior paint, by stripping (or, at LESSOR’s option, pneumatically sanding) the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. LESSEE will then repaint the fuselage, empennage, wings and Engine cowlings in the colors and logo specified by LESSOR. Such painting will be accomplished in such a manner as to result in a uniformly smooth and cosmetically acceptable aerodynamic surface. All external placards, signs and markings will be properly attached, free from damage, clean and	

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 	legible. Notwithstanding the foregoing, in the event that the cost of painting the Aircraft in the logo and colors specified by LESSOR exceeds the then-current cost of painting the Aircraft in the logo and colors in which it was painted at Delivery, then LESSOR will reimburse LESSEE for any such excess cost. After painting, the Aircraft will be weighed.	
 
23.10.4	LESSEE will clean the exterior and interior of the Aircraft.	
 
23.10.5	If reasonably required by LESSOR, LESSEE will repaint by touch-up the interior of the Aircraft, including flight deck, and replace missing, broken or illegible placards.	
 
23.10.6	In accordance with Article 23.9.11, LESSEE will permanently repair damage to the Aircraft that exceeds Manufacturer’s limits and replace any nonflush structural patch repairs installed on the Aircraft with permanent flush-type repairs, in each case with no further inspection requirements unless a permanent flush-type repair is unavailable.	
 
23.10.7	With LESSOR and/or its representatives present, LESSEE will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with Manufacturer’s aircraft maintenance manual.	
 
23.10.8	If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
 
23.10.9	With LESSOR and/or its representatives present, LESSEE will accomplish a power assurance run on the Engines in accordance with Manufacturer’s aircraft maintenance manual Task 71-00-00-710-013 Test No. 11 “High Power Assurance Test” (or any subsequent equivalent replacement thereof). LESSEE will record the Engine power assurance test conditions and results on the Return Acceptance Receipt.	
 
23.10.10	LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the Engine historical and technical records, borescope inspection, trend monitoring and power assurance run do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Manufacturer’s aircraft maintenance manual. LESSEE will correct any discrepancies in accordance with the guidelines set out by the Engine Manufacturer which may be discovered during such inspection.	

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23.10.11	In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 23.10.9 result in a dispute regarding the conformity of an Engine with the requirements of this Article 23, LESSEE and LESSOR will consult with the Engine Manufacturer and follow the Engine Manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check if so recommended) with regard to determining if such Engine complies with the requirements of this Article 23 and the manner in which any discrepancies from the requirements of this Article 23 will be rectified.	
 
23.10.12	With LESSOR and/or its representatives present, LESSEE will perform an APU condition test in accordance with Manufacturer’s aircraft maintenance manual and a complete hot and cold section videotape borescope on the APU. LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the APU condition test and borescope inspection do not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. LESSEE will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such test or inspections. If such APU is serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions, LESSOR agrees to discuss with LESSEE in good faith for a resolution that compensates LESSOR for such deficiency and avoid or minimize any delays in return of the Aircraft to LESSOR.	
 
23.10.13	If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
23.11 Part Lives . At return, the condition of the Aircraft will be as follows:
 
23.11.1	The Aircraft will have zero (0) hours consumed since the Return Check (excluding hours consumed on the acceptance flight).	
 
23.11.2	Each Engine will meet all of the following:	
(a) Each Engine will have at least 4,000 hours and 3,500 cycles remaining to operate until its next anticipated removal (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).

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(b) If any module of an Engine is returned with hours accumulated on such module since the last performance restoration of such module, LESSEE will pay LESSOR an amount equal to the hours accumulated on such module times then-current Engine Manufacturer performance restoration rate for such module, based on Engine Manufacturer’s estimated mean time between performance restoration for such module.
(c) Each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the hours and cycles set forth in the preceding subparagraph (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).
(d) The Engine historical and technical records, borescope inspection, trend monitoring, power assurance run and other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10 indicate that the Engine should operate for the hours and cycles set forth in Article 23.11.2(a).
(e) Each Part of an Engine which has a life-limit will have at least 4,000 cycles remaining to operate until its next removal per the Engine Manufacturer’s limit.
(f) No life-limited Part of an Engine will have more hours and cycles consumed than such Engine’s data plate.
 
23.11.3	The APU will have not more than 2,000 APU hours consumed since the last APU manufacturer’s medium or heavy repair workscope. If the APU has life-limited Parts, the cycles remaining on the most restricted life-limited Part will be a minimum of 3,000 APU cycles at return.	
In addition, to the extent there are life-limited Parts in the APU, then, for each such life-limited Part, LESSEE will pay LESSOR an amount equal to the product of (a) the quotient obtained by dividing (i) the cycles consumed on each such life-limited Part within the APU since new by (ii) the total life of each such life-limited Part, multiplied by (b) the replacement cost of the applicable life-limited Part, all as determined by the APU manufacturer’s then-current data.
 
23.11.4	Each leg of the Landing Gear will have at least 7 years remaining pursuant to the MPD until the next scheduled Overhaul.	
 
23.11.5	Each Part of the Airframe, Engine or APU which has a hard time limit pursuant to the MPD will have the greater of (a) at least 50% of such hard time Part’s full allotment of	

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 	hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled Overhaul or scheduled removal pursuant to the MPD. However, if such hard time Part’s full allotment of hours and cycles between Overhauls pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such hard time Part will be returned with zero (0) hours and zero (0) cycles out of Overhaul.	
 
23.11.6	Each life-limited Part of the Airframe or APU will have the greater of (a) at least 50% of such life-limited Part’s full allotment of hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled replacement pursuant to the MPD. However, if such life-limited Part’s full allotment of hours and cycles remaining to operate pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such life-limited Part will be returned with 100% of its total approved hours and cycles remaining.	
 
23.11.7	No life-limited Part of the Airframe will have more hours and cycles consumed than the total hours and cycles of the Airframe.	
 
23.11.8	No life-limited Part of the APU will have more hours and cycles consumed than the hours and cycles of the APU.	
 
23.11.9	Each Part which has a calendar time limit will have 20 months remaining to operate until removal pursuant to the MPD. If a Part with a calendar time limit has a total approved calendar time remaining pursuant to the MPD of less than 20 months, then such Part will be returned with 100% of its total approved calendar time remaining until removal.	
 
23.11.10	No Part (excluding the life-limited Parts which are covered by Articles 23.11.2(e), 23.11.2(f), 23.11.6, 23.11.7 and 23.11.8) will have total hours or total cycles since new greater than one hundred fifteen percent (115%) of that of the Airframe and, with respect to all such Parts as a group, such Parts will have an average total time since new no greater than that of the Airframe.	
 
23.11.11	Each Landing Gear tire and brake will have fifty percent (50%) of its total wear remaining to its next Overhaul.	
23.12 Export and Deregistration of Aircraft . At LESSOR’s request, LESSEE at its cost will (a) provide an Export Certificate of Airworthiness or its equivalent from the State of Registration so that the Aircraft can be exported to the country designated by LESSOR, (b) assist with deregistration of the Aircraft from the register of aircraft in the State of Registration, (c) assist with arranging for prompt confirmation of such deregistration to be sent by the registry in the State of Registration to the next country of registration and (d) perform any other

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acts reasonably required by LESSOR in connection with the foregoing. If any Aircraft work which LESSEE is not otherwise required to perform hereunder, including engineering, is required in order to obtain such Export Certificate of Airworthiness, LESSEE will perform such work and LESSOR will reimburse LESSEE for such work at LESSEE’s out-of-pocket expenses.
23.13 Delay in Return of Aircraft Due to LESSOR Work Requests . LESSEE will not be required to pay Rent to LESSOR for any whole days that return of the Aircraft to LESSOR is delayed solely as a result of LESSOR’s requests that additional work be performed over and above the work necessary to place the Aircraft in the condition required by this Article 23, and in the event associated costs other than additional Rent are incurred, such as additional insurance, LESSOR shall reimburse reasonable costs associated therewith.
23.14 LESSEE’s Continuing Obligations . In the event that LESSEE does not return the Aircraft to LESSOR on the Expiration Date and in the condition required by this Article 23 for any reason (whether or not the reason is within LESSEE’s control), but subject to Article 23.13:
 
23.14.1	the obligations of LESSEE under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of LESSEE’s Event of Default or any right of LESSOR hereunder.	
 
23.14.2	Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to LESSOR pursuant to this Lease.	
 
23.14.3	Without limiting LESSOR’s rights and remedies under Article 25 and except for a delay in return of the Aircraft for the reason set forth in Article 23.13, until such time as the Aircraft is redelivered to LESSOR and put into the condition required by this Article 23, instead of paying the Rent specified in Article 5.3, LESSEE will pay twice the amount of Rent in effect on the Expiration Date for each day from the scheduled Expiration Date until the Termination Date. In determining the applicable normal Rent per day that will be doubled for purposes of this calculation, the monthly Rent payable under Article 5.3.1 will be prorated based on the actual number of days in the applicable month. Payment will be made upon presentation of LESSOR’s invoice.	
 
23.14.4	LESSOR may elect, in its sole and absolute discretion, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 23 and thereafter have any such nonconformance corrected at such time as LESSOR may deem appropriate (but within ninety (90) days following the return of the Aircraft) and at commercial rates then-charged by the Person selected by LESSOR to perform such correction. Any direct expenses incurred by LESSOR for such correction will be payable by LESSEE within fifteen (15) days following the submission of a written statement by LESSOR to LESSEE, identifying the items corrected and setting forth the expense of such corrections. LESSEE’s obligation to pay such amounts will survive the Termination Date.	

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23.15 Airport and Navigation Charges . LESSEE will ensure that at return of the Aircraft any and all airport, navigation and other charges which give rise or may if unpaid give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part have been paid and discharged in full and will at LESSOR’s request produce evidence thereof satisfactory to LESSOR, except to the extent being contested in good faith provided LESSEE shall have agreed in writing to pay any such charges determined pursuant to such contest to be due and owing to the relevant authorities, and provided that there is no likelihood of the placement of any Security Interest on or seizure of the Aircraft, Engine, APU or any Part.
23.16 Return Acceptance Receipt . Upon return of the Aircraft in accordance with the terms of this Lease, LESSEE will prepare and execute two (2) Return Acceptance Receipts in the form and substance of Exhibit L, and LESSOR will countersign and return one such Return Acceptance Receipt to LESSEE. In addition, LESSEE and LESSOR will execute a Lease Termination for filing with the FAA evidencing termination of this Lease.
23.17 Indemnities and Insurance . The indemnities and insurance requirements set forth in Articles 17 and 18, respectively, will apply to Indemnitees and LESSOR’s representatives during return of the Aircraft, including the ground inspection and acceptance flight. With respect to the acceptance flight, LESSOR’s representatives will receive the same protections as LESSOR on LESSEE’s Aviation and Airline General Third Party Liability Insurance.

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

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 	ARTICLE 24	ASSIGNMENT	
24.7 No Assignment by LESSEE . NO ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART, OR THIS LEASE.
24.8 Sale or Assignment by LESSOR .
 
24.8.1	Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent sell, assign or transfer its rights, interest and obligations hereunder or with respect to the Aircraft (a “ Transfer ”) to a third party (“ LESSOR’s Assignee ”).	
Notwithstanding the foregoing, no Transfer shall: (i) be made to an entity which is not solvent at the time of and immediately after giving effect to such Transfer; (ii) be made to an air carrier or subsidiary of an air carrier that conducts substantial business in Mexico and is in direct competition with LESSEE; (iii) result in any increase in or to or the imposition of additional obligations or liabilities on the part of LESSEE that are not de minimis, (iv) restrict or diminish LESSEE’s rights in and to the Aircraft pursuant to this Lease; (v) be made to a Person having a net worth of less than ***** at the time of such Transfer; (vi) be made unless and until the purchaser, assignee or transferee shall have (a) provided LESSEE with a covenant of quiet use and enjoyment equivalent to that required under this Lease and (b) agreed in writing, in favor of LESSEE that (1) in the case of a Transfer not constituting solely a Transfer by way of security, it shall be bound by and from and after the date of transfer perform all obligations of “LESSOR” under this Lease and (2) in the case of any Transfer, that, to the extent it holds any moneys under the Lease, it shall hold, apply, invest, disburse, reimburse and return such moneys in accordance with the applicable provisions of the LEASE.
 
24.8.2	The term “ LESSOR ” as used in this Lease means the lessor of the Aircraft at the time in question. In the event of the sale of the Aircraft and transfer of LESSOR’s rights and obligations under this Lease, LESSOR’s Assignee will become “LESSOR” of the Aircraft under this Lease and the transferring party (the prior “LESSOR”) will be relieved of all liability to LESSEE under this Lease for obligations arising on and after the date the Aircraft is sold. LESSEE will acknowledge and accept LESSOR’s Assignee as the new “LESSOR” under this Lease and will look solely to LESSOR’s Assignee for the performance of all LESSOR obligations and covenants under this Lease arising on and after the Aircraft sale date.	
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	93	 	ARTICLE 24
ASSIGNMENT	

24.9 LESSOR’s Lender . Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent grant security interests over the Aircraft and assign the benefit of this Lease to a lender (“ LESSOR’s Lender ”) as security for LESSOR’s obligations to LESSOR’s Lender. Accordingly, if LESSOR’s Lender requires, as a condition to providing financing, any nonsubstantive modification of this Lease, LESSEE agrees to enter into an agreement so modifying this Lease.
24.10 LESSEE Cooperation . Subject to LESSEE’s rights under this Lease otherwise, on request by LESSOR, LESSOR’s Assignee or LESSOR’s Lender, LESSEE will execute all such documents (such as a lease assignment agreement) as LESSOR, LESSOR’s Assignee or LESSOR’s Lender may reasonably require to acknowledge LESSEE’s obligations under this Lease and obtain LESSEE’s acknowledgment that LESSOR is not in breach of the Lease. LESSEE will provide all other reasonable assistance and cooperation to LESSOR, LESSOR’s Assignee and LESSOR’s Lender in connection with any such sale or assignment or the perfection and maintenance of any such security interest, including, at LESSOR’s sole cost and expense, making all necessary filings and registrations in the State of Registration and providing, at LESSOR’s sole cost and expense, all opinions of counsel with respect to matters reasonably requested by LESSOR, LESSOR’s Lender or LESSOR’s Assignee. LESSOR will pay or reimburse LESSEE for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in reviewing documents required by LESSOR, LESSOR’s Assignee or LESSOR’s Lender or performing any other obligations under this Article 24.
24.11 Advance Consent Under Cape Town Convention . For the purpose of Article 33(1) of the Convention and Article XV of the Protocol (combined for ease of reference in Article 46(1) of the Consolidated Text), LESSEE hereby consents in advance to the transfer of the associated rights and related international interests in respect of any assignment or sale by LESSOR or the granting of any Security Interest by LESSOR in accordance with Articles 24.2 or 24.3. For the avoidance of doubt, no additional consent by LESSEE will be required in connection with any such assignment of associated rights and the related international interests pursuant to the Cape Town Convention. Any filings made on the International Registry pursuant to the Cape Town Convention in connection herewith, shall be made at LESSOR’s sole cost and expense.
24.12 Protections .
 
24.12.1	LESSOR will obtain for the benefit of LESSEE an acknowledgment from any LESSOR’s Assignee or LESSOR’s Lender that, so long as no Default or Event of	

	 	94	 	ARTICLE 24
ASSIGNMENT	

 	Default has occurred and is continuing hereunder, neither such Person nor any other Person lawfully claiming by or through such Person will interfere with or otherwise disturb LESSEE’s quiet, peaceful use and enjoyment of the Aircraft.	
 
24.12.2	If a financing for the Aircraft is in place at Delivery or LESSOR finances the Aircraft after Delivery, then the term “LESSOR” in the provisions of this Lease relating to disclaimer, title and registration, indemnity and insurance contained in Articles 8, 14, 17 and 18, respectively, or with respect to Article 20.2.8, will be deemed in addition to LESSOR to include LESSOR’s Assignee, LESSOR’s Lender and associated parties, if applicable. Also, if the Aircraft was previously financed but such financing was no longer in place at the time of Delivery of the Aircraft to LESSEE, the term “LESSOR” in the provisions of this Lease described in this Article 24.6.2 will be deemed to include the former lender and associated parties.	
 
24.12.3	If LESSOR sells the Aircraft after Delivery, subject to conformity of such sale with the provisions of this Article 24, then the disclaimer and indemnity provisions contained in Articles 8 and 17 will continue to be applicable after the sale to International Lease Finance Corporation and, if applicable, the parties referred to in Article 24.6.2. For a period of two (2) years after such sale or assignment and at LESSEE’s cost, LESSEE will continue to name LESSOR and the parties referred to in Article 24.6.2, if applicable, as additional insureds under the Aviation and Airline General Third Party Liability Insurance specified in Exhibit C.	

	 	95	 	ARTICLE 24
ASSIGNMENT	

 	ARTICLE 25	DEFAULT OF LESSEE	
25.10 LESSEE Notice to LESSOR . LESSEE will promptly notify LESSOR if LESSEE becomes aware of the occurrence of any Default or Event of Default.
25.11 Events of Default . The occurrence of any of the following will constitute an Event of Default and material breach of this Lease by LESSEE:
(a) LESSEE fails to take delivery of the Aircraft when properly tendered and otherwise obligated to do so under the terms of this Lease;
(b) LESSEE fails to make a Rent or other payment due hereunder in the manner and by the date provided in this Lease and fails to make such payment within three (3) Business Days after such payment is due (following any applicable grace period otherwise provided under this Lease);
(c) LESSEE fails to obtain or maintain the insurance required by Article 18;
(d) LESSEE fails to return the Aircraft to LESSOR on the Expiration Date in accordance with Article 23;
(e) LESSEE fails to observe or perform any of its other obligations hereunder and fails to cure the same within fifteen (15) days after receipt of written notice thereof to LESSEE. If such failure cannot by its nature be cured within fifteen (15) days, LESSEE will have the reasonable number of days necessary to cure such failure (not to exceed a period of sixty (60) days) so long as it uses diligent and best efforts to do so;
(f) any representation or warranty of LESSEE in this Lease proves to be untrue in any material respect when made and, if available, LESSEE has not cured the same within thirty (30) days unless there can be no reasonable expectation that the same can be cured within such period;
(g) the registration of the Aircraft is cancelled other than as a result of an act or omission of or attributable to LESSOR;
(h) LESSEE abandons the Aircraft or Engines;

	 	96	 	ARTICLE 25
DEFAULT OF LESSEE	

(i) LESSEE or an approved sublessee no longer has unencumbered control (other than Permitted Liens) or possession of the Aircraft or Engines, except as otherwise permitted by this Lease;
(j) LESSEE discontinues (temporarily or otherwise) business or sells or otherwise disposes of all or substantially all of its assets;
(k) a material adverse change occurs in the financial condition of LESSEE which, in LESSOR’s reasonable opinion, would materially and adversely affect LESSEE’s ability to perform its obligations under the Operative Documents;
(l) LESSEE no longer possesses the licenses, certificates and permits required for the conduct of its business as a certificated air carrier in Mexico; provided, however, that if LESSEE is undertaking its best efforts to reinstate the effectiveness of such license, certificate or permit with a reasonable likelihood of success, and so long as such situation poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, LESSEE shall have thirty (30) days to cure such deficiency;
(m) LESSEE fails to pay when due (after giving effect to any applicable grace or similar period available) any airport or navigation charges (including Eurocontrol charges) or any landing fees assessed with respect to the Aircraft or any aircraft operated by LESSEE which, if unpaid, may give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part;
(n) LESSEE (i) suspends payment on its debts or other obligations, (ii) is unable to or admits its inability to pay its debts or other obligations as they fall due, (iii) is adjudicated or becomes bankrupt or insolvent or (iv) proposes or enters into any composition or other arrangement for the benefit of its creditors generally;
(o) any proceedings, resolutions, filings or other steps are instituted or threatened with respect to LESSEE relating to the bankruptcy, liquidation, reorganization or protection from creditors of LESSEE or a substantial part of LESSEE’s property. If instituted by LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;
(p) any order, judgment or decree is entered by any court of competent jurisdiction appointing a receiver, trustee or liquidator of LESSEE or a substantial

	 	97	 	ARTICLE 25
DEFAULT OF LESSEE	

part of its property, or if a substantial part of LESSEE’s property is to be sequestered. If instituted by or done with the consent of LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;
(q) (i) any indebtedness for borrowed moneys or a guarantee or similar obligation owed by LESSEE with an unpaid balance of at least ***** is declared due before its stated maturity or (ii) LESSEE is in default under any other purchase agreement, lease, conditional sale agreement or other agreement pursuant to which LESSEE has possession of any aircraft, if such situation presents a likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, or a likelihood in LESSOR’s reasonable judgment that such situation will impair LESSOR’s compliance with the terms of this Lease;
(r) LESSEE is in default under any other lease or agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR and the same is not cured within its specified cure period; or
(s) LESSEE is in default under any other aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person and the same is not cured within its specified cure period.
25.12 LESSOR’s General Rights . Upon the occurrence of any Event of Default, LESSOR may do all or any of the following at its option (in addition to such other rights and remedies which LESSOR may have by statute or otherwise but subject to any requirements of applicable Law):
(a) terminate this Lease by giving written notice to LESSEE;
(b) terminate the rights of LESSEE to use or operate the Aircraft by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(c) require that LESSEE immediately cease flying the Aircraft and leave it parked in its then-current location by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(d) require that LESSEE immediately move the Aircraft to an airport or other location designated by LESSOR and park the Aircraft there by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	98	 	ARTICLE 25
DEFAULT OF LESSEE	

(e) take possession of the Aircraft. If LESSOR takes possession of the Aircraft, it may enter upon LESSEE’s premises where the Aircraft is located without liability. Upon repossession of the Aircraft, LESSOR will then be entitled to sell, lease or otherwise deal with the Aircraft as if this Lease had never been made. LESSOR will be entitled to the full benefit of its bargain with LESSEE;
(f) instruct any maintenance or repair facility which is in possession of the Aircraft, any Engine, the APU or any Part as to its disposition or release;
(g) for LESSEE’s account, do anything that may reasonably be required to cure any default and recover from LESSEE all reasonable costs, including legal fees and expenses incurred in doing so and Default Interest;
(h) proceed as appropriate to enforce performance of this Lease and to recover any damages for the breach hereof, including the amounts specified in Article 25.6; or
(i) apply all or any portion of the Security Deposit and any other security deposits held by LESSOR pursuant to any other agreements between LESSOR and LESSEE to any amounts due.
25.13 Deregistration and Export of Aircraft . If an Event of Default has occurred and is continuing, LESSOR may take all steps necessary to deregister the Aircraft in and export the Aircraft from the State of Registration.
25.14 Cape Town Convention Remedies . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then LESSEE and LESSOR acknowledge and agree that:
(a) each of the Events of Default set forth in Article 25.2 will be deemed to be an event that constitutes a “default” as such term is used in the Cape Town Convention; and
(b) upon the occurrence of any Event of Default (i) LESSOR will be afforded all speedy and other relief, rights and (without duplication of recovery) remedies specified in the Cape Town Convention as a result of such Event of Default, (ii) all of the rights of LESSOR specified in Article 25.3 will be construed to be “additional remedies” as permitted by the Cape Town Convention which may be exercised by

	 	99	 	ARTICLE 25
DEFAULT OF LESSEE	

LESSOR pursuant to this Lease subject to the requirements of applicable Law and (iii) LESSOR may, without notice to LESSEE, take all steps as are contemplated by the Cape Town Convention to deregister the Aircraft, export the Aircraft from the State of Registration and, if applicable, discharge the international interest in respect of the Aircraft, this Lease and the other Operative Documents from the International Registry.
25.15 LESSEE Liability for Damages . If an Event of Default occurs, in addition to all other remedies available at law or in equity, LESSOR has the right to recover from LESSEE and LESSEE will pay LESSOR within two (2) Business Days after LESSOR’s written demand, all of the following:
(a) any losses suffered by LESSOR as a result of a delay in Delivery of the Aircraft to LESSEE, including payments to Manufacturer such as additional purchase price escalation and Aircraft parking, maintenance costs and insurance costs during the period of delay;
(b) without duplication, all amounts which are then due and unpaid hereunder and which become due prior to the earlier of LESSOR’s recovery of possession of the Aircraft or LESSEE making an effective tender thereof;
(c) without duplication, any losses suffered by LESSOR because of LESSOR’s inability to place the Aircraft on lease with another lessee or to otherwise utilize the Aircraft on financial terms as favorable to LESSOR as the terms hereof for the Lease Term or, if LESSOR elects to dispose of the Aircraft, the funds arising from a sale or other disposition of the Aircraft are not as profitable to LESSOR as leasing the Aircraft in accordance with the terms hereof would have been (and LESSOR will be entitled to accelerate any and all Rent which would have been due from the date of LESSOR’s recovery or repossession of the Aircraft through the Expiration Date);
(d) without duplication, all costs associated with LESSOR’s exercise of its remedies hereunder, including repossession costs, legal fees, Aircraft storage costs, Aircraft release or sale costs and LESSOR’s internal costs and expenses (including the cost of personnel time calculated based upon the compensation paid to the individuals involved on an annual basis and a general LESSOR overhead allocation);
(e) without duplication, any amount of principal, interest, fees or other sums paid or payable on account of funds borrowed in order to carry any unpaid amount resulting from the occurrence of an Event of Default;
(f) without duplication, any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to LESSOR’s financing of the Aircraft;

	 	100	 	ARTICLE 25
DEFAULT OF LESSEE	

(g) without duplication, any loss, cost, expense or liability sustained by LESSOR due to LESSEE’s failure to redeliver the Aircraft in the condition required by this Lease; and
(h) without duplication, any other loss, damage, expense, cost or liability which LESSOR suffers or incurs as a result of the Event of Default and/or termination of this Lease.
Notwithstanding the foregoing, LESSOR shall use reasonable efforts to mitigate any such losses.
25.16 Waiver of Default . By written notice to LESSEE, LESSOR may at its election waive any Default or Event of Default and its consequences and rescind and annul any prior notice of termination of this Lease. The respective rights of the parties will then be as they would have been had no Default or Event of Default occurred and no such notice been given.
25.17 Present Value of Payments . In calculating LESSOR’s damages hereunder, upon an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred will be calculated on a present value basis using a discounting rate of ***** per annum discounted to the earlier of the date on which LESSOR obtains possession of the Aircraft or LESSEE makes an effective tender thereof.
25.18 Use of “Termination Date” . For avoidance of doubt, it is agreed that if this Lease terminates and the Aircraft is repossessed by LESSOR due to an Event of Default, then, notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Expiration Date” will be utilized in calculating the damages to which LESSOR is entitled pursuant to Article 25.6. For example, it is agreed and understood that LESSOR is entitled to receive from LESSEE the Rent and the benefit of LESSEE’s insurance and maintenance of the Aircraft until expiration of the Lease Term.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	101	 	ARTICLE 25
DEFAULT OF LESSEE	

 	ARTICLE 26	NOTICES	
26.3 Manner of Sending Notices . Any notice, request or information required or permissible under this Lease will be in writing and in English. Notices will be delivered in person or sent by fax, e-mail, letter (mailed airmail, certified and return receipt requested), or by expedited delivery addressed to the parties as set forth in Article 26.2. In the case of a fax, notice will be deemed received on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent. In the case of e-mail, notice will be deemed received upon actual receipt. In the case of a mailed letter, notice will be deemed received upon actual receipt. In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery. If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions.
26.4 Notice Information . Notices will be sent:

	 	If to LESSOR:	  	INTERNATIONAL LEASE FINANCE CORPORATION	
	 		  	10250 Constellation Boulevard, 34th Floor	
	 		  	Los Angeles, California 90067, U.S.A.	
	 		  	Attention:	  	Legal Department	
				
	 		  	Fax:	  	10-788-1990	
	 		  	Telephone:	  	3310-788-1999	
	 		  	E-mail:	  	legalnotices@ilfc.com	
			
	 	If to LESSEE:	  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
	 		  	Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col. Santa Fe	
	 		  	Peña Blanca Del. Álvaro Obregón 01012 México, D.F. México	
	 		  	Attention:	  	Finance Director	
				
	 		  	Fax:	  	+503-298-3064	
	 		  	Telephone:	  	+503-298-1560	
	 		  	E-mail:	  	fernando.suarez@volaris.com.mx	
or to such other places and numbers as either party directs in writing to the other party.

	 	102	 	ARTICLE 26
NOTICES	

 	ARTICLE 27	ARBITRATION	
27.14 Arbitration of Any Dispute . Subject to the terms of Article 27.9, any dispute, controversy or claim arising out of or relating to this Lease, or the breach, termination or invalidity thereof, will be settled solely by arbitration.
27.15 Notice of Arbitration . Any notice with respect to arbitration, including a notice by LESSEE or LESSOR of arbitration commencing arbitral proceedings will be delivered to the other party as set forth in Article 26.
27.16 Rules for Arbitration . The arbitration shall be in accordance with the Rules of Arbitration (as in effect on the date of this Lease) of the International Chamber of Commerce (“ ICC ”), except that in the event of any conflict between such ICC Rules and the arbitration provisions of this Lease, the provisions of this Lease shall govern.
27.17 Number of Arbitrators . The number of arbitrators shall be three.
27.18 Appointment of Arbitrator by Each Party . Each party shall appoint one arbitrator within five (5) Business Days of receipt of the notice provided under Article 27.2. If within five (5) Business Days after receipt of the claimant’s notification of the appointment of an arbitrator the respondent has not notified the claimant in writing of the name of the arbitrator appointed by the respondent, the second arbitrator shall be appointed by the ICC acting in accordance with the rules adopted by the ICC for this purpose.
27.19 Appointment of Lead Arbitrator . The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the tribunal. If within five (5) Business Days after the appointment of the second arbitrator, the two arbitrators have not agreed upon the choice of the presiding arbitrator, then at the request of either party the presiding arbitrator will be appointed by the ICC in accordance with the rules adopted by the ICC for such purpose (provided that such presiding arbitrator will be a national of a country other than Mexico or the U.S.).
27.20 Location of Arbitration . The arbitration, including the making of the award, will take place in Los Angeles, California.
27.21 Language for Arbitration . The arbitration will be conducted in English.
27.22 Interim Measures of Protection . At the request of LESSOR, the arbitral tribunal may order or take any interim measures it deems necessary in respect of the Aircraft, including measures for the conservation of the Aircraft such as return of the Aircraft to the custody and control of LESSOR or the parking of the Aircraft. Such interim measures may be established in

	 	103	 	ARTICLE 27
ARBITRATION	

the form of an interim award. The arbitral tribunal will be entitled to require security for the costs of such measures. A request by LESSOR to a judicial authority in any jurisdiction for the repossession or parking of the Aircraft will not be deemed incompatible with or a waiver of LESSOR’s agreement to arbitrate set forth in this Lease.
27.23 Substantive Law . The substantive Laws of the State of California will be applied by the arbitrators in any arbitration.
27.24 Decision . The arbitration award will be based on and accompanied by a written opinion containing, findings of fact and conclusions of law.
27.25 Prevailing Party in Dispute . In any arbitration in connection with or arising out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such arbitration. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and postjudgment Default Interest.
27.26 Waiver . LESSEE and LESSOR agree that the arbitral award will be final and binding upon them. Each of LESSEE and LESSOR agree that the arbitral award may be enforced against the parties to the arbitration proceeding or their assets wherever they may be found and that a judgment on the arbitration award may be entered in any court having jurisdiction over the parties or their assets.

	 	104	 	ARTICLE 27
ARBITRATION	

 	ARTICLE 28	GOVERNING LAW AND JURISDICTION	
28.10 California Law . This Lease is being delivered in the State of California and the Lease and all other Operative Documents will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California).
28.11 Non-Exclusive Jurisdiction in California . As permitted by Section 410.40 of the California Code of Civil Procedure, the parties hereby irrevocably submit to the nonexclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles, California. Nothing in this Lease will prevent either party from bringing suit in any other appropriate jurisdiction.
28.12 Protection of Interest in the Aircraft . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27, IF LESSOR DEEMS IT NECESSARY FOR THE CONSERVATION OF THE AIRCRAFT OR FOR THE PROTECTION OF ITS INTEREST IN THE AIRCRAFT, LESSOR IN ITS SOLE DISCRETION MAY BRING PROCEEDINGS IN ANY COURT OF COMPETENT JURISDICTION (INCLUDING BUT NOT LIMITED TO ANY OF THE COURTS DESIGNATED IN ARTICLE 28.4) IN ORDER TO OBTAIN APPROPRIATE RELIEF, INCLUDING BUT NOT LIMITED TO AN ORDER (A) REQUIRING LESSEE TO MOVE THE AIRCRAFT TO A SUITABLE AIRPORT DESIGNATED BY LESSOR AND CEASE OPERATING THE AIRCRAFT, (B) REQUIRING LESSEE TO RETURN PHYSICAL POSSESSION OF THE AIRCRAFT TO LESSOR, OR (C) AWARDING SUCH OTHER OR ADDITIONAL RELIEF PROVIDED BY APPLICABLE LAW.
28.13 LESSOR Actions in Certain Jurisdictions . Any action by LESSOR pursuant to Article 28.3 may be brought in (a) any Court of competent jurisdiction in Mexico City, Mexico, (b) any Court of competent jurisdiction in the jurisdiction where the Aircraft is located or operating, and/or (c) the Federal District Court for the Central District of California and/or the Superior Court for the State of California in Los Angeles, California.
28.14 Personal Jurisdiction . LESSEE agrees to submit to personal jurisdiction in the courts of any jurisdiction to which LESSEE flies the Aircraft or in which the Aircraft is located.
28.15 Service of Process . The parties hereby consent to the service of process (a) in the manner directed by any of the courts referred to above, (b) in accordance with Section 415.40 of the California Code of Civil Procedure by mailing copies of the summons and complaint to the person to be served by first-class mail to the address set forth in Article 26.2, postage prepaid, return receipt requested, (c) in one of the manners specified in Article 26.1 or (d) in accordance with the Hague Convention, if applicable.

	 	105	 	ARTICLE 28
GOVERNING LAW
AND JURISDICTION	

28.16 Prevailing Party in Dispute . If any legal action or other proceeding is brought in connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such action or proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre and postjudgment Default Interest.
28.17 Future Amendments or Agreements . With respect to any amendments to this Lease or the other Operative Documents or any other agreements to be entered into between LESSEE and LESSOR after the date of execution of this Lease in connection with the leasing of the Aircraft, including any amendment to this Lease which may be executed pursuant to Article 14.3 (“ Future Agreements ”), LESSEE and LESSOR agree that (a) Future Agreements will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California) and (b) LESSEE and LESSOR will irrevocably submit to the nonexclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles in any suit, action, claim or proceeding seeking to enforce any provision of the Future Agreements, including any claim or proceeding seeking enforcement of LESSOR’s rights and remedies arising under the Cape Town Convention (to the extent the same is applicable to the transactions contemplated herein).
28.18 Waiver . TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF LESSEE AND LESSOR HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY. EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO IN ARTICLE 28.2, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

	 	106	 	ARTICLE 28
GOVERNING LAW
AND JURISDICTION	

 	ARTICLE 29	MISCELLANEOUS	
29.22 Press Releases . The parties will give copies to one another, in advance if possible, of all news, articles and other releases provided to the public media regarding this Lease or the Aircraft.
29.23 Power of Attorney . LESSEE hereby irrevocably appoints LESSOR as its attorney for the purpose of putting into effect the intent of this Lease following an Event of Default, including without limitation, the return, repossession, deregistration and exportation of the Aircraft. To evidence this appointment, LESSEE has executed the Power of Attorney in substantially the form of Exhibit H. LESSEE will take all steps required under the Laws of the State of Registration to provide such power of attorney to LESSOR.
29.24 LESSOR Performance for LESSEE . The exercise by LESSOR of its remedy of performing a LESSEE obligation hereunder is not a waiver of and will not relieve LESSEE from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.
29.25 LESSOR’s Payment Obligations . Any obligation of LESSOR under this Lease to pay or release any amount to LESSEE is conditioned upon (a) all amounts then due and payable by LESSEE to LESSOR under this Lease or under any other agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR having been paid in full, (b) all amounts then due and payable by LESSEE under any aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person having been paid in full and (c) no Default or Event of Default having occurred and continuing hereunder at the time such payment or release of payment is payable to LESSEE.
29.26 Application of Payments . Any amounts paid or recovered in respect of LESSEE liabilities hereunder may be applied to Rent, Default Interest, fees or any other amount due hereunder in such proportions, order and manner as LESSOR determines. LESSOR will promptly notify LESSEE of any such application if such application contradicts LESSEE’s instructions thereon.
29.27 Usury Laws . The parties intend to contract in strict compliance with the usury Laws of the State of California and, to the extent applicable, the U.S. Notwithstanding anything to the contrary in the Operative Documents, LESSEE will not be obligated to pay Default Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by LESSOR in connection with the Operative Documents. During any period of time in which the

	 	107	 	ARTICLE 29
MISCELLANEOUS	

then-applicable highest lawful rate is lower than the Default Interest rate, Default Interest will accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate is greater than the Default Interest rate, then LESSEE will pay Default Interest at the highest lawful rate until the Default Interest which is paid by LESSEE equals the amount of interest that would have been payable in accordance with the interest rate set forth in Article 5.7.
29.28 Delegation by LESSOR . Without contravening any terms and provisions hereof, LESSOR may delegate to any Person(s) all or any of the rights, powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and conditions as LESSOR in its absolute discretion thinks fit.
29.29 Confidentiality . The Operative Documents and all nonpublic information obtained by either party about the other are confidential and are between LESSOR and LESSEE only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal advisors; as required in connection with any filings of this Lease in accordance with Article 14; in connection with LESSOR’s potential sale of the Aircraft or assignment of this Lease; as required for enforcement by either party of its rights and remedies with respect to this Lease or as required by applicable Law) without the prior written consent of the other party. If any disclosure will result in an Operative Document becoming publicly available, LESSEE and LESSOR will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of such Operative Document.
29.30 Rights of Parties . The rights of the parties hereunder are cumulative, not exclusive, may be exercised as often as each party considers appropriate and are in addition to its rights under general Law. The rights of one party against the other party are not capable of being waived or amended except by an express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or amendment of that or any other such right. Any defective or partial exercise of any such rights will not preclude any other or further exercise of that or any other such right and no act or course of conduct or negotiation on a party’s part or on its behalf will in any way preclude such party from exercising any such right or constitute a suspension or any amendment of any such right.
29.31 Further Assurances . Each party agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by Law, reasonably requested by the auditors of the other party or requested by the other party to establish, maintain or protect the rights and remedies of the requesting party or to carry out and effect the intent and purpose of this Lease.

	 	108	 	ARTICLE 29
MISCELLANEOUS	

29.32 Translations of Lease . If this Lease is translated into another language, whether or not signed by LESSEE and LESSOR in such other language, solely the terms and provisions of this English version of the Lease will prevail in any dispute.
29.33 Use of Word “including” . The term “ including ” is used in this Lease without limitation.
29.34 Headings . All article and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section will be interpreted as a reference to such article, paragraph or section of this Lease.
29.35 Invalidity of any Provision . If any of the provisions of this Lease become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
29.36 Negotiation . The terms of this Lease are agreed by LESSOR from its principal place of business in Los Angeles, California.
29.37 Time is of the Essence . Time is of the essence in the performance of all obligations of the parties under this Lease and, consequently, all time limitations set forth in the provisions of this Lease will be strictly observed.
29.38 Amendments in Writing . The provisions of this Lease may only be amended or modified by a writing executed by LESSOR and LESSEE.
29.39 Consents Not to be Delayed . If any of the provisions of this Lease require the consent of any party hereto, such consent shall not be unreasonably delayed.
29.40 Counterparts . This Lease may be executed in any number of identical counterparts, each of which will be deemed to be an original, and all of which together will be deemed to be one and the same instrument when each party has signed and delivered one such counterpart to the other party.
29.41 Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or e-mail will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or e-mail will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.

	 	109	 	ARTICLE 29
MISCELLANEOUS	

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

	 	110	 	ARTICLE 29
MISCELLANEOUS	

IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be executed by their respective officers as of March 9, 2007.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
					
By:	 	/s/ John L. Plueger	 		 	By:	 	/s/ Alfonso Ascencio Triujeque	
					
Name:	 	John L. Plueger	 		 	Name:	 	Alfonso Ascencio Triujeque	
					
Its-	 	President and Chief Operating Officer	 		 	Its:	 	General Counsel	

	 		 	SIGNATURE PAGE	

 	EXHIBIT A	AIRCRAFT DESCRIPTION	

Aircraft Manufacturer and Model:	  	Airbus A319-100	
		
Specification:	  	LESSEE’s Baseline Specification as set forth in Attachment 1 to this Exhibit A	
		
Seating Configuration:	  	144 Y class as set forth in Attachment 1 to this Exhibit A	
		
Manufacturer’s Serial Number:	  	Per Estoppel Certificate Maximum Gross Takeoff	
		
Weight:	  	70.0 tons Engine Manufacturer and Model: IAE V2524-A5	
		
Engine Serial Numbers:	  	Per Estoppel Certificate	
		
Engine Takeoff Thrust Rating:	  	24,480 pounds per FAA type certificate data sheet	

	 	112	 	EXHIBIT A
AIRCRAFT DESCRIPTION	

ATTACHMENT 1 TO EXHIBIT A
See attached pages

	 	113	 	EXHIBIT A
AIRCRAFT DESCRIPTION	

 	EXHIBIT B	PARTICIPATION AGREEMENT	
This Participation Agreement is made this      day of                     ,            (the “Participation Agreement”)
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ILFC”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“LESSEE”)	
RECITALS
 
(A)	Pursuant to the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“AIRBUS”) dated as of June 17, 2001, as further amended (the “Purchase Agreement”) and the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “G.T.A.”), ILFC has agreed to purchase from AIRBUS certain Airbus A319-100 model aircraft, including the aircraft bearing as of today manufacturer’s serial number [    ] and scheduled for delivery in July 2008 (the “Aircraft”);	
 
(B)	Pursuant to the Product Support Agreement (Exhibit E) applicable to the Purchase Agreement (the “Support Agreement”), AIRBUS has agreed to provide certain product support to ILFC;	
 
(C)	Pursuant to the Aircraft Lease Agreement between ILFC and LESSEE dated as of March 9, 2007 (the “Lease Agreement”), ILFC has agreed to lease the Aircraft to LESSEE; (D) ILFC and LESSEE have agreed to enter into this Participation Agreement:	

	 	114	 	EXHIBIT B
PARTICIPATION AGREEMENT	

IT IS NOW HEREBY AGREED AS FOLLOWS:
1. Authorization for LESSEE to Participate . TT EC hereby authorizes LESSEE to participate in the following activities in connection with the delivery of the Aircraft:
(a) to inspect, pursuant to Clause 7.1 of the G.T.A., the manufacture of the Aircraft and the materials and parts thereto; and
(b) to attend and observe the acceptance tests of the Aircraft referred to in Clause 8.1 of the G.T.A.; and
(c) to receive, pursuant to Clause 15 of the Support Agreement, the technical publications set forth in Appendix 3 hereto; and
(d) to receive the benefit of a product support allowance as set forth in Appendix 3 hereto.
2. Effectivity of Participation Agreement . This Participation Agreement shall be effective from the date hereof until the earliest of:
(a) the occurrence of an Event of Default as defined in the Lease Agreement;
(b) notification by ILFC to LESSEE of the termination hereof; or
(c) transfer of Aircraft title by AIRBUS to ILFC or its designee.
3. Conditions of Participation . This Participation Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with the following provisions of the G.T.A. and the Support Agreement (copies of which are attached hereto) as if LESSEE had been named “Buyer” of the Aircraft under such agreements:
(i) Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any LESSEE representative, (bb) loss or damage to property of any LESSEE representatives and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of LESSEE’s representatives, and
(ii) Clauses 16.9 and 18.5 of the Support Agreement.

	 	115	 	EXHIBIT B
PARTICIPATION AGREEMENT	

(b) So long as this Participation Agreement is in full force and effect, LESSEE and not ILFC will be responsible for the liabilities and obligations set forth in section 3(a) above.
(c) For avoidance of doubt, even while this Participation Agreement is in full force and effect, ILFC will remain responsible for compliance with Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any ILFC representative, (bb) loss or damage to property of any ILFC representative and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of ILFC’s representatives.
(d) Except with respect to events occurring prior to termination of the Participation Agreement, upon termination of this Participation Agreement, ILFC shall once again be bound by Clauses 7.2 and 8.5 of the G.T.A. and Clauses 16.9 and 18.5 of the Support Agreement with respect to the Aircraft.
(e) Other than with respect to the obligations expressly assumed by LESSEE under this Participation Agreement as set forth in section 3(a) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
(f) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in sections 3(a) and (b) above, modify in any respect whatsoever its contractual rights under the said agreements.
(g) LESSEE shall not be appointed as ILFC’s agent and shall not be permitted to act on behalf or in place of ILFC without the express written authorization of ILFC and nothing contained herein shall be construed as to give such authorization.
4. Notification
(a) This Participation Agreement shall be notified by ILFC to AIRBUS by courier service immediately after the execution hereof. AIRBUS shall not be deemed to have received notice of any of the provisions hereof prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix I hereto.
(b) On termination of this Participation Agreement pursuant to either section 2(a) or (b) hereof, ILFC shall immediately notify AIRBUS by courier service of such

	 	116	 	EXHIBIT B
PARTICIPATION AGREEMENT	

termination. AIRBUS shall not be deemed to have received notice of such termination prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix 2 hereto. AIRBUS can rely on such notice without further inquiry.
(c) All notices and requests required or authorized under this Participation Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:
ILFC shall be addressed at:
10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067 U.S.A.

	 	Attention:	  	    Senior Vice President—Technical	
			
	 	Fax:	  	    1-310-788-1990	
	 	Telephone:	  	    1-310-788-1999	
LESSEE shall be addressed at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col. Santa Fe
Peña Blanca Del. Álvaro Obregón
01012 México, D.F.
México

	 	Attention:	  	    Finance Director	
			
	 	Fax:	  	    +503-298-3064	
	 	Telephone:	  	    +503-298-1560	

	 	117	 	EXHIBIT B
PARTICIPATION AGREEMENT	

AIRBUS shall be addressed at:
1, rond-point Maurice Bellonte 31707 Blagnac Cedex France

	 	Attention:	  	    VP, Contracts Administration & Delivery Transactions	
			
	 	Fax:	  	    33-5-61-93-41-95	
	 	I Telephone:	  	    33-5-61-93-32-16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery’ by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.
5. Survival of Obligations . The obligations of LESSEE set forth in section 3(a) with respect to events occurring prior to termination of this Participation Agreement will survive termination of the Participation Agreement.
6. Provision of Referenced Clauses . LESSOR shall provide LESSEE with the copies of the clauses of the G.T.A. and Support Agreement referenced and required herein.
7. Assignment . The rights and obligations under this Participation Agreement are personal to the parties and shall not be assigned, transferred, sold or otherwise disposed of by either of the parties hereto.
8. Applicable Law and Jurisdiction . THIS PARTICIPATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.
9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Participation Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Participation Agreement.

	 	118	 	EXHIBIT B
PARTICIPATION AGREEMENT	

IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V.	
					
By:	 		 		 	By:	 		
					
Its:	 		 		 	Its	 		
APPENDIX 1
[DATE]
BY COURIER
AIRBUS S.A.S.
1, rond-point Maurice Bellonte 31707 Blagnac Cedex France
Attention : VP, Contracts Administration & Delivery Transactions
 
Re:	ILFC/CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.: PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ] (the “Aircraft”)	
Dear Sirs,
Pursuant to Section 4(a) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. dated March 9, 2007, we advise you that pursuant to the Participation Agreement (a copy of which is attached hereto),CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. has been authorized by ILFC to participate with respect to the Aircraft. This authorization shall be effective on acknowledgment of this letter by you.
We confirm for your benefit the provisions of Sections 3(c), 3(d), 3(e) and 3(f) contained therein.

Yours faithfully,	

for and on behalf of INTERNATIONAL
LEASE FINANCE CORPORATION	

	 	119	 	EXHIBIT B
PARTICIPATION AGREEMENT	

CC: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
AIRBUS S.A.S. confirms receipt of this notice and agrees to the terms of Section 3 of the Participation Agreement.
By:    Its:    Date:

	 	120	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 2
[DATE]
BY COURIER
AIRBUS S.A.S.
1, rond-point Maurice Bellonte 31707 Blagnac Cedex France
Attention : VP, Contracts Administration & Delivery Transactions
 
Re:	ILFC/CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.: PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ]	
Dear Sirs,
Pursuant to Section 4(b) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. dated             ,            , we advise you that the authorization provided therein for CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. is terminated with immediate effect.

Yours faithfully,	

for and on behalf of INTERNATIONAL
LEASE FINANCE CORPORATION	
 
CC:	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	

	 	121	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 3
 
1.	TECHNICAL PUBLICATIONS	
As selected by LESSEE from the Technical Data and Documentation Index attached to this Appendix 3
 
2.	PRODUCT SUPPORT ALLOWANCE	
A product support allowance in the amount of *****, which will be valid to procure product support including field service and training (pursuant to Clauses 16 and 18 of the Support Agreement, respectively), manuals, AIRBUS proprietary spare parts, and such other product support goods and services as can be purchased through AIRBUS.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	122	 	EXHIBIT B
PARTICIPATION AGREEMENT	

TECHNICAL DATA INDEX
The following index identifies the Technical Data provided in support of the Aircraft. The explanation of the table is as follows:

NOMENCLATURE	  	Self-explanatory.	
		
ABBREVIATED DESIGNATION (Abbr)	  	Self-explanatory.	

FORM	  		
		
OL-A	  	ON-LINE through Airbus On-Line Services: Advanced Consultation and Navigation System	
		
CD-A	  	CD-ROM: Advanced Consultation and Navigation System	
		
CD-P	  	CD-ROM: in PDF—Portable Document Format	
		
D	  	DISKETTE (Floppy Disk)	
		
DD	  	DIGITAL DATA. Stands generally for SGML format on CD-ROM.	
		
DVD	  	DVD—Digital Versatile Disk	
		
P1	  	PRINTED ONE SIDE. Refers to manuals in paper with print on one (1) side of the sheets only.	
		
P2	  	PRINTED BOTH SIDES. Refers to manuals with print on both sides of the sheets.	

	 	123	 	EXHIBIT B
PARTICIPATION AGREEMENT	

					
			
TYPE	  	C	  	CUSTOMIZED. Refers to manuals which are applicable to an individual Airbus customer/operator fleet or aircraft.	
			
	  	G	  	GENERIC. Refers to manuals that are for all aircraft types/models/series.	
			
	  	E	  	ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.	
			
	  	P	  	PRELIMINARY. Refers to preliminary data or manuals which may consist of either:
 
-    one-time issue not maintained by revision service or
 
-    preliminary issues maintained by revision service until final manual or data delivery, or
 
-    supply of best available data under final format -with progressive completion through revision service.	
			
ATA	  		  	Manuals established in general compliance with ATA 100 Revision 21 (for WB aircraft)—Revision 23 (for SA aircraft)—Revision 26 (for LR aircraft)—and digital Standards established in general compliance with ATA Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance. Subsequent revisions of the ATA Specification will be considered. QUANTITY (Qty) Self-explanatory.	
		
DELIVERY (Deliv)	  	Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day.	
			
	  		  	The number of days indicated shall be rounded up to the next regular revision release date.	

	 	124	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
OPERATIONAL MANUALS AND DATA	  		  		  		  		  		  		  		
Cabin Attendant Operating Manual	  	CAOM	  	P2	  	C	  	NO	  	1	  	90	  	Only provided in existing customization	
Flight Crew Operating Manual	  	FCOM	  	P2	  	C	  	NO	  	1	  	90	  	Plus one copy per Aircraft at delivery	
	  	FCOM	  	CD-A	  	C	  	NO	  	1	  	90	  		
	  	FCOM	  	DD	  	C	  	NO	  	1	  	90	  	SGML data for further processing by the Buyer	
Flight Manual	  	FM	  	PI	  	C	  	NO	  	1	  	0	  	Plus one copy per Aircraft at delivery	
Master Minimum Equipment List	  	MMEL	  	P2	  	C	  	NO	  	1	  	180	  	Plus one copy per Aircraft at delivery	
	  	MMEL	  	1DD	  	C	  	NO	  	1	  	180	  	SGML data for further processing by the Buyer	
Quick Reference Handbook	  	QRH	  	P2	  	C	  	NO	  	1	  	90	  	Plus one copy per Aircraft at delivery	
Trim Sheet	  	TS	  	P2	  	C	  	NO	  	1	  	0	  		
Weight and Balance Manual	  	WBM	  	P1	  	C	  	YES	  	1	  	0	  	For the WBM the flight deck copy is an advance copy only of the customized manual, not subject to revision or updating. Weighing Equipment List delivered two weeks after Aircraft delivery.	
Performance Engineer’s Programs	  	PEP	  	CD-A	  	C	  	NO	  	1	  	90	  	One per operator and a/c type	
Performance Programs Manual	  	PPM	  	CD-A	  	C	  	NO	  	1	  	90	  	Included in the PEP CD-ROM	
								
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
MAINTENANCE AND ASSOCIATED MANUALS	  		  		  		  		  		  		  		
APU Buildup Manual	  	ABM	  	P2	  	C	  	NO	  	1	  	90	  	Only for A300—A300-600/A310 (for other A/C types integrated into AMM). One per operator.	
Aircraft Maintenance Manual	  	AMM	  	CD-A	  	C	  	YES	  	2	  	90	  	Contained on “ADRES” CD-ROM for SA and LR Aircraft	
	  	AMM	  	CD-P	  	C	  	YES	  	2	  	90	  	Optional to CD-A	
	  	AMM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Schematic Manual	  	ASM	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	ASM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Wiring Lists	  	AWL	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	AWL	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Aircraft Wiring Manual	  	AWM	  	CD-P	  	C	  	YES	  	2	  	90	  		
	  	AWM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Component Location Manual	  	CLM	  	P2	  	C	  	NO	  	1	  	90	  	For SA and LR Aircraft    	

	 	125	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
Consumable Material List	  	CML	  	CD-P	  	G	  	YES	  	1	  	180	  		
Duct Repair Manual	  	DRM	  	CD-P	  	E	  	NO	  	1	  	90	  	Upon request	
Electrical Load Analysis	  	ELA	  	D	  	C	  	NO	  	1	  	0	  		
Electrical Standard Practices Manual	  	ESPM	  	CD-P	  	G	  	YES	  	I	  	90	  		
	  	ESPM	  	DD	  	G	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
Electrical Standard Practices booklet	  	ESP	  	P2	  	G	  	NO	  	1	  	90	  		
Fuel Pipe Repair Manual	  	FPRM	  	P2	  	G	  	NO	  		  	90	  	Upon request	
Illustrated Parts Catalog (Airframe)/Additional	  	IPC/ACRT	  	CD-A	  	C	  	YES	  	1	  	90	  	Contained on “ADRES” CD-ROM for SA and LR Aircraft	
Cross Reference Table	  	IPC/ACRT	  	CD-P	  	C	  	YES	  	1	  	90	  	Optional to CD-A	
Power Plant Buildup Manual	  	PBM	  		  	C	  	NO	  	1	  	90	  	Supplied by power plant manufacturer—Only supplied by Airbus for A300. One per operator	
								
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
Illustrated Parts Catalog (Power Plant)	  	PIPC	  		  	C	  	NO	  	1	  	90	  	Integrated in the Airframe IPC for SA and LR Aircraft for IAE engines (SA Aircraft) and Rolls-Royce engines (A340 Aircraft). For other Aircraft and engine types, supplied by Propulsion Systems Manufacturer concurrently with the Airframe IPC.	
Maintenance Facility Planning Maintenance	  	MFP	  	CD-P	  	E E	  	NO	  	1 1	  	360	  	Grouped with AC on one single CD-ROM	
Planning Document	  	MPD	  	CD-P	  		  	YES	  		  	360	  		
Maintenance Review Board	  	MRB	  	P2	  	E	  	NO	  	1	  	360	  	MRB Report includes the Certification Maintenance Requirements (CMR) and Airworthiness Limitation Items (ALI) documents. One per operator.	
Support Equipment Summary	  	SES	  	CD-P	  	G	  	NO	  	1	  	360	  	Grouped with TEM, TEl on one single CD-ROM. One per operator	
Tool and Equipment Bulletins	  	TEB	  	PI	  	E	  	NO	  	1	  	–	  	One per operator	
Tool and Equipment Drawings	  	TED	  	AC	  	E	  	NO	  	I	  	360	  	One per operator	
Tool and Equipment Index	  	TEI	  		  	E	  	NO	  	1	  	360	  	Grouped with TEM, SES on a single CD-ROM. One per operator.	
Illustrated Tool and Equipment Manual	  	TEM	  	CD-P	  	E	  	YES	  	I	  	360	  	Grouped with TEM, SES on a single CD-ROM. One per operator.	
Technical Publications Combined Index	  	TPCI	  	CD-A	  	C	  	NO	  	1	  	90	  	One per operator	
Trouble Shooting Manual	  	TSM	  	DD	  	C	  	YES	  	1	  	90	  	SGML data for further processing by the Buyer	
	  	TSM	  	CD-A	  	C	  	YES	  	2	  	190	  	Contained on “CAATS” CD-ROM for SA and LR Aircraft	
	  	TSM	  	CD-P	  	C	  	YES	  	2	  	90	  	Optional to CD-A	
	  	IPC/ACRT	  	DD	  	C	  	YES	  	1	  	90	  	Issue date to be coordinated with Initial Provisioning Data delivery included in EXHIBIT “E” Spare Parts Procurement. Useful for SGML data processing only.    	

	 	126	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
STRUCTURAL MANUALS	  		  		  		  		  		  		  		
Nondestructive Testing Manual	  	NTM	  	CD-P	  	E	  	YES	  	1	  	90	  	One per operator	
Nacelle Structural Repair Manual	  	NSRM	  	P2	  	E	  	YES	  	1	  	90	  	Supplied by Propulsion System Manufacturer	
	  	NSRM	  	F	  	E	  	YES	  	1	  	90	  	Supplied by Propulsion System Manufacturer	
Structural Repair Manual	  	SRM	  	CD-P	  	E	  	YES	  	1	  	90	  		

	 	127	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
OVERHAUL DATA	  		  		  		  		  		  		  		
Component Evolution List	  	CEL	  	CD-P	  	G	  	NO	  	11	  	–	  	Delivered as follow-on for CDS	
Component Maintenance Manual—Manufacturer	  	CMMM	  	CD-P	  	E	  	YES	  	1	  	90	  		
Component Maintenance Manual—Vendor	  	CMMV	  	FC	  	E	  	YES	  	1	  	90	  	One per operator	
Cable Fabrication Manual	  	CFM	  	CD-P	  	E	  	NO	  	1	  	90	  	One per operator	

	 	128	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
ENGINEERING DOCUMENTS	  		  		  		  		  		  		  		
Process and Material Specification	  	PMS	  	F	  	G	  	NO	  	1	  	0	  	One per operator	
Standards Manual	  	SM	  	CD-P	  	G	  	NO	  	1	  	180	  	One per operator	

	 	129	 	EXHIBIT B
PARTICIPATION AGREEMENT	

															
NOMENCLATURE	  	Abbr	  	Form	  	Type	  	ATA	  	Qty	  	Deliv	  	Comments	
MISCELLANEOUS PUBLICATIONS	  		  		  		  		  		  		  		
Airplane Characteristics for Airport Planning	  	AC	  	CD-P	  	E	  	NO I	  	1	  	360	  	Grouped with MFP on one single CD-ROM	
ATA Breakdown Index	  	ATBI	  	P1	  	E	  	NO	  	1	  	360	  	Optional	
CADETS (Technical Publications Training)	  	CADE	  	CD-A	  	G	  	NO	  	1	  	360	  		
Aircraft Recovery Manual	  	ARM	  	CD-P	  	E	  	YES	  	1	  	90	  		
Crash Crew Chart	  	CCC	  	P1	  	E	  	NO	  	1	  	180	  		
Cargo Loading System Manual	  	CLS	  	P2	  	E/C	  	NO	  	I	  	180	  	CLS is Envelope (E) for SA and LR Aircraft and Customized (C) for WB Aircraft.	
Guidelines for Customer Originated Changes	  	GCOC	  	P1	  	G	  	NO	  	1	  	0	  		
List of Applicable Publications	  	LAP	  	P2	  	C	  	NO	  	11	  	90	  		
List of Radioactive and Hazardous Elements	  	LRE	  	CD-P	  	G	  	NO	  	1	  	90	  		
Livestock Transportation Manual	  	LTM	  	P2	  	E	  	NO	  	1	  	90	  		
Service Bulletins	  	SB	  	D	  	C	  	YES	  	1	  	0	  	SGML data for further processing by the Buyer	
Service Information Letters	  	SIL	  	CD-A	  	E	  	YES	  	1	  	0	  	On TPCI-CD-ROM	
Supplier Product Support Agreements	  	SPSA	  	P2	  	E	  	NO	  	1	  	360	  	Envelope (E) for SA and LR Aircraft. One per operator	
Supplier Product Support Agreements 2000	  	SPSA	  	CD-P	  	G	  	NO	  	1	  	360	  	Based on General Conditions of Purchase (GCP) 2000. One per operator	
Transportability Manual	  	TM	  	PI	  	G	  	NO	  	I	  	180	  	One per operator	
Vendor Information Manual	  	VIM	  	CD-A	  	G	  	NO	  	1	  	360	  	One per operator	
Vendor Information Manual GSE	  	VIM/GSE	  	CD-A	  	G	  	NO	  	1	  	360	  	One per operator	
Vendor Product Support Agreements	  	VPSA	  	P2	  	E	  	NO	  	1	  	360	  	Envelope (C) for WB Aircraft. One per operator.	
WB = Wide Body: A310/A300-600SA = Single Aisle: A318/A319/A320/A321 LR = Long Range: A330/A340

	 	130	 	EXHIBIT B
PARTICIPATION AGREEMENT	

APPENDIX 4
[Copies of Clauses 7.2 and 8.5 of the General Terms Agreement and Clauses 16.9 and 18.5 of the Support Agreement]

	 	131	 	EXHIBIT B
PARTICIPATION AGREEMENT	

7.2	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO OR DEATH OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECK OUT OR INSPECTIONS UNDER THIS CLAUSE 7) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER OR ITS REPRESENTATIVES ARISING OUT OF OR IN CONNECTION WITH ANY SUCH TESTS, CHECK OUT AND INSPECTIONS UNDER THIS CLAUSE 7, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY TESTS, CHECK OUT, INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATH OR INJURY, THE LIABILITY FOR WHICH HAS SEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 7.2, THE FORMER PARTY SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER (FOR THE PURPOSE OF THIS SUB-CLAUSE 7.2, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER).
 
7-1

8.5	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATHS OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THF BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER, ARISING OUT OF OR IN CONNECTION WITH THE OPERATION OF THE AIRCRAFT DURING ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE 8, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIMS IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATHS OR INJURY, THE LIABILITY FOR WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 8.5, THE FORMER SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER FOR THE PURPOSE OF THIS SUB-CLAUSE 8.5, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR ESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER.
 
8-2

16.9	INDEMNITY	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (EXCEPTING INJURIES. TO AND DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY, HOWSOEVER ARISING OUT OF OR IN CONNECTION WITH PERFORMANCE OF THE SERVICES UNDER THIS CLAUSE.
THE SELLER SHALL HEREBY INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER DURING THE PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
FOR THE PURPOSE OF THIS SUB-CLAUSE 16.8, THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER SHALL BE DEEMED TO INCLUDE THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER REFERRED TO IN SUB-CLAUSES 16.1.1 AND 16.2 ABOVE.

GTA-ILFC	 	Exh. E-60	 	12/18/89	

Exhibit “E”
 
18.5	Indemnity and Insurance	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFIES AND HOLDS HARMLESS THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, CONSEQUENTIAL DAMAGES, LOSS OF USE, BUSINESS INTERRUPTION, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATH OF SELLER’S REPRESENTATIVES PARTICIPATING IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROLS OR IN GENERAL PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OF SERVICES UDDER THIS CLAUSE 18, WHETHER THE SAID LIABILITIES, ARISE DURING OR AFTER THE COMPLETION OF THE TRAINING COURSE.

GTA-ILFC	 	Exh. E-70	 	12/18/89	

Exhibit “E”
THE SELLER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF SELLER’S SAID REPRESENTATIVES DURING THEIR PARTICIPATION IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROL OR IN GENERAL PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
IN NO EVENT WTLL THE BUYER, ITS INSURERS OR REPRESENTATIVES MAKE OR CAUSE TO BE MADE A CLAIM OR LAWSUIT AGAINST THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO IN CONNECTION WITH ANY CLAIM OR LAWSUIT BROUGHT AGAINST THE BUYER, NOR WILL THE BUYER, ITS INSURERS OR REPRESENTATIVES ADD AS A PARTY DEFENDANT THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO TO ANY SUCH CLAIM OR LAWSUIT OR ANY ACTION IN CONNECTION THEREWITH.
FOR THE FLIGHT TRAINING PERIOD AS DESCRIBED IN SUB-CLAUSE 18.2.1.1 AND 18.2.1.2 THE BUYER SHALL:
 
 	(1)	INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE AGAINST THE SELLER, THE MANUFACTURER, AND AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTOR AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS IN RESPECT OF HULL ALL RISKS INSURANCE POLICY AND	
 
 	(2)	EFFECT INSURANCE TO COVER THIRD PARTY, PASSENGER AND FREIGHT LIABILITY RISKS ARISING DURING SAID FLIGHT TRAINING IN AN AMOUNT SATISFACTORY TO THE SELLER AND NAMING THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS AS ADDITIONAL INSUREDS. SUCH INSURANCE SHALL CONTAIN A CROSS-LIABILITY CLAUSE TO THE INTENT THAT EACH INSURED COVERED BY THE POLICY SHALL HAVE THE SAME PROTECTION AS WOULD HAVE BEEN AVAILABLE HAD SUCH POLICY BEEN ISSUED INDIVIDUALLY TO EACH OF THEM.	
THE BUYER SHALL DELIVER TO THE SELLER A CERTIFICATE OF INSURANCE EVIDENCING THE COVER REQUIRED BY THIS CLAUSE.

GTA-ILFC	 	Exh. E-71	 	12/18/89	

 	EXHIBIT C	CERTIFICATE OF INSURANCE (FOR LESSOR)	
[Refer to Aircraft Lease Agreement dated as of March 9, 2007 between LESSEE and LESSOR (the “ Lease ”). If applicable, insurance certificates from both the insurers and reinsurers will be provided. If there is a LESSOR’s Lender, include references to it where appropriate after references to LESSOR.]
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”) 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.	
 
Re:	CONCESIONARIA	
VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V.
(“ LESSEE ”) Airbus
A319-100 Manufacturer’s
Serial No.: [            ]
Registration Mark:
[Aircraft registration
mark, or             
to mark place] (the “ Aircraft ”)
The following security has subscribed to the following insurance and/or reinsurance policies:
[LIST APPLICABLE POLICY NUMBERS, COMPANIES & PERCENTAGES]
THIS IS TO CERTIFY THAT, as Insurance Brokers, we have effected Fleet Insurance in respect of aircraft owned or operated by LESSEE (including the Aircraft) as specified below.
AIRCRAFT HULL ALL RISKS
COVERING:
All risks of physical loss or damage to the Aircraft from any cause (subject only to the exclusions as specified below), for an Agreed Value of Aircraft in the amount of US$            [list amount calculated in accordance with Article 19.1]
 
132

DEDUCTIBLES:
***** each and every loss (or such lesser amount as applicable to the rest of LESSEE’s fleet). Not applicable to Total Loss/Constructive Total Loss or Arranged Total Loss
GEOGRAPHICAL COVERAGE:
Worldwide
AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY COVERING:
Aircraft Third Party, Passenger, Baggage, Cargo and Mail Liability and Airline General Third Party Liability (including Premises, Hangarkeepers, Products Liability and Contractual Liability) for combined single limit of not less than ***** (or such higher amount as LESSEE may carry on any other aircraft in its fleet) any one accident/occurrence (but in the aggregate in relation to Products Liability), extended to cover LESSEE’s liability under the Lease to the extent of the risks covered by the policy including war and allied perils under Extended Coverage Endorsement as per AVN 52E (however, the total War and Allied Perils Liability Coverage including Third Party War Risks must be the same amount as the combined single limit by the purchase of Excess Third Party War Risks insurance subject only to exclusions as specified below, unless otherwise agreed by LESSOR in writing
GEOGRAPHICAL LIMITS:
Worldwide
HULL WAR AND ALLIED PERILS
COVERING:
Hull War Risks as per LSW555.D, but including (a) confiscation or requisition (including by State of Registration and state where airline is domiciled), (b) hijacking or other unlawful seizure or wrongful exercise of control of the Aircraft or crew in flight (including any attempt at such seizure or control) and covering claims excluded from Hull All Risks Policy while Aircraft outside Assured’s control by reason of perils insured under this policy, for an Agreed Value of Aircraft in the amount of US$            [list amount calculated in accordance with Article 19.1]
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange  Commission.
 
133

DEDUCTIBLE:
No deductible
GEOGRAPHICAL LIMITS:
Worldwide
AIRCRAFT SPARES ALL RISKS INSURANCE COVERING:
All risks of physical loss or damage to Aircraft Parts or spares or Engines at all times when removed from the Aircraft from whatever cause, subject only to the exclusions specified below, including the risks set down in AVN 48B other than paragraphs (a) and (b) thereof (but including paragraph (a) in respect of transit risks) for limits of not less than:
***** any one location ***** any one sending and covering: With respect to an Engine, replacement cost
With respect to Parts, replacement cost
DEDUCTIBLE:
***** each and every loss
GEOGRAPHICAL COVERAGE:
Worldwide
CONTRACTUAL INDEMNITY
LESSEE has insurance coverage for the indemnities agreed to by LESSEE pursuant to Article 17 of the Lease
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange  Commission.
 
134

PERIOD OF COVERAGE (ALL POLICIES)
From the Delivery Date of Aircraft to [EXPIRATION DATE]
It is further certified that LESSOR has an interest in respect of the Aircraft under the Lease. Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of the Insurance or (except as provided in the next sentence) until the expiry or agreed termination of the Lease or until the obligations under the Lease are terminated by any action of the Insured or LESSOR and in consideration of the Additional Premium it is confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that the provisions set forth below are specifically endorsed to the Policy. Notwithstanding the foregoing, if LESSEE has retained care, custody and control of the Aircraft even after such expiry or agreed termination of the Lease and LESSOR has not expressly agreed to insure the Aircraft, the Policy will remain in full force and effect until the earlier of expiry of the Insurance or the return of the Aircraft to LESSOR.
1. UNDER THE HULL (ALL RISKS AND HULL WAR AND ALLIED RISKS) AND AIRCRAFT SPARES INSURANCES
(a) [International Lease Finance Corporation ONLY-NO OTHER CONTRACT PARTIES] In respect of any claim on the Aircraft that becomes payable on the basis of a Total Loss, settlement will be made to, or to the order of LESSOR as sole loss payee, up to the Agreed Value. With respect to repairable damage to an Aircraft or Engine, LESSOR will receive all insurance proceeds in excess of ***** provided that upon receipt by the insurance broker of written notice of a material default on the part of LESSEE, all insurance proceeds which otherwise would be payable to LESSEE will be made directly to LESSOR. In respect of any other claim, settlement (net of any relevant policy deductible) will be made with such party(ies) as may be necessary to repair the Aircraft unless otherwise agreed after consultation between the Insurers and the Insured and, where necessary under the terms of the Lease, LESSOR. Such payments will only be made provided they are in compliance with all applicable laws and regulations.
(b) Insurers agree on a 50/50 settlement in terms of AVS 103.
(c) Insurers have no right to replace the Aircraft on a Total Loss (arranged, constructive or otherwise).
(d) Insurers recognize that LESSEE and LESSOR have agreed that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.
(e) In the event of a Total Loss of the Aircraft, Insurers agree to pay LESSOR all amounts up to the Agreed Value based solely upon LESSOR’s (not LESSEE’s) execution of the appropriate form of release/discharge document. LESSOR may sign any required release in lieu of the Insured in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss.
 
***** Confidential portions of the material have been omitted and filed separately with  the Securities and Exchange Commission.

	 	135	 		

(f) “Cut-through clause”: Insurers confirm that in the event of any claim arising under the hull insurances, the Reinsurers will in lieu of payment of the Insurers, its successors in interest and assigns, pay to the person named as sole loss payee under the original insurances that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Insurers (subject to proof of loss), it being understood and agreed that any such payment by any Reinsurers will fully discharge and release such Reinsurer from any and all further liability in connection therewith and provide for payment to be made notwithstanding (i) any bankruptcy, insolvency, liquidation or dissolution of the Insurers and (ii) that the Insurers have made no payment under the original insurance policies.
(g) Insurers confirm that under the insurance policies, if the Insured installs an engine owned by a third party on the Aircraft, either (i) the hull insurance will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss and the amount required by the third party engine owner, or (ii) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the Insured to such third party engine owner.
2. UNDER THE LEGAL LIABILITY INSURANCE
(a) Subject to the provisions of this Endorsement, the Insurance will operate in all respects as if a separate Policy had been issued covering each party insured hereunder, but this provision will not operate to include any claim arising howsoever in respect of loss or damage to the Aircraft insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds will not exceed the limits of liability stated in the Policy.
(b) The Insurance provided hereunder will be primary and without right of contribution from any other insurance which may be available to LESSOR or its successors and assigns.
(c) LESSOR and its successors, assigns, directors, officers and employees will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.
3. UNDER ALL INSURANCES
(a) LESSOR, its successors and assigns, and (with respect to Aviation and Airline General Third Party Liability only) its directors, officers and employees for their respective rights and interests, are included as Additional Insureds.
 
136

(b) The cover afforded to LESSOR by the Policy in accordance with this Endorsement will not be invalidated by any act or omission (including misrepresentation and nondisclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy.
(c) LESSOR will have no responsibility for premium and insurers will waive any right of set-off or counterclaim against LESSOR except in respect of outstanding premium in respect of the Aircraft, provided that Insurer may only set-off for premiums against the proceeds of the hull insurance for outstanding premiums in connection with hull all risks and hull war and allied perils insurance.
(d) Upon payment of any loss or claim to or on behalf of LESSOR, Insurers will to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of LESSOR indemnified hereby (but not against LESSOR). Insurers will not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers LESSOR will do all things reasonably necessary to assist the Insurers to exercise said rights.
(e) Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to LESSOR by the giving of not less than thirty (30) days notice in writing to LESSOR. Notice will be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement.
4. EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS CERTIFICATE
(a) LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.
(b) THE POLICY WILL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE LEASE WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.
SUBJECT (save as specifically stated in this Certificate) to policy terms, conditions, limitations and exclusions.

Yours faithfully,
[BROKERS]	
 
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 	EXHIBIT D	BROKERS’ LETTER OF UNDERTAKING (FOR LESSOR)	

Date:	  	Our Ref:	
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.	
 
Re:	CONCESIONARIA	
VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V.
(“ LESSEE ”) Airbus
A319-100 Manufacturer’s
Serial No.: [            ]
Registration Mark:
[Aircraft registration mark, or             
to mark place] (the “ Aircraft ”)
Dear Sirs:
We confirm that insurance has been effected for the account of [LESSEE] (the “ Operator ”) covering all aircraft owned or operated by them, including the above-referenced aircraft (the “ Aircraft ”). [Also confirm, if applicable, the amount of any hull all risks or hull war and allied perils on the Aircraft which LESSEE is carrying in excess of the Agreed Value (which excess insurance would be payable to LESSEE). Such excess insurance may not exceed ten percent (10%) of the Agreed Value.]
Pursuant to instructions received from the Operator and in consideration of your approving the arrangement of the Operator’s “Fleet Policy” (under which the above-referenced Aircraft is insured) through the intermediary of ourselves as Brokers in connection with the insurance (the “ Insurance ”) mentioned in our Certificate of Insurance (Reference No. [            ] dated [            ] and attached hereto), we undertake as follows:
1. In relation to the Hull and War Risks Insurance to hold to your order the insurance Slips or Contracts and any Policies which may be issued or any policies substituted (with your consent) therefor (but only insofar as the same relate to the Aircraft only) and the benefit of the Hull and War Risks Insurance thereunder, but subject to our requirements to operate the Fleet Policy insofar as it relates to any other aircraft insured thereunder.
 
138

2. As to you and your successors, assigns, directors, officers and employees, Operator’s active crew members are considered “passengers”.
3. To advise you of any of the following:
(a) If any insurer or the Operator cancels or gives notice of cancellation of any of the Insurance at least thirty (30) days (or such lesser period as may be available in the case of War and Allied Perils) before such cancellation is to take effect in respect of the Aircraft.
(b) Of any act or omission or of any event (including nonpayment of premium) of which we have knowledge or are notified and which might invalidate or render unenforceable in whole or in part any of the Insurance, insofar as the same relate to the Aircraft.
(c) If we do not receive instructions to renew all or any of the Insurance at least thirty (30) days prior to their expiration.
(d) If any of the Insurance are not renewed on the same terms (save as to premium and period of cover and as you might otherwise have notified us to be acceptable to you) seven (7) days prior to expiry thereof.
The above undertakings are given subject to our continuing appointment for the time being as Insurance Brokers to the Operator.
We also undertake to advise you if we cease to be Insurance Brokers to the Operator.

Yours faithfully,	
 
139

 	EXHIBIT E	AVIATION AUTHORITY UNDERTAKING LETTER	
[Date]
 
To:	INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Dear Sirs: We, the (the “ Aviation Authority ”) undertake that:	
1. No cancellation, alteration or change in the registration of the Aircraft or recordation of liens will be made until receipt of written consent to such specified change from LESSOR.
2. On written request of LESSOR (which will include fax), the Aviation Authority will promptly de-register the Aircraft and provide such confirmation as is requested by LESSOR together with any other confirmation or information LESSOR may require to enable the Aircraft to be re-registered in any other country or state.
3. On written request of LESSOR (which will include fax) the Aviation Authority will release, remove or cancel all liens it may have over the Aircraft, and will acknowledge in doing so that all liability for such liens as discharged are for the sole account of LESSEE.
4. The Aviation Authority will not allow the registration, use or operation of the Aircraft for any purpose other than the category of fare paying passenger transportation.
5. The Aviation Authority will consent to the export of the Aircraft on the termination of the Lease Term or at LESSOR’s written request.

Sincerely,	
 
140

 	EXHIBIT F	ESTOPPEL AND ACCEPTANCE CERTIFICATE	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“ LESSEE ”), a company organized under the laws of Mexico does hereby represent, acknowledge, warrant and agree as follows:
1. LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of March 9, 2007 (hereinafter referred to as the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSEE has this      day of             ,             (Time:            ) at                      received from LESSOR possession of:
(a) One (1) Airbus A319-100 aircraft bearing Manufacturer’s serial number [    ] and FAA registration mark [Aircraft registration mark, or to mark place], together with two (2) V2524-A5 engines bearing manufacturer’s serial numbers and (each of which has 750 or more rated take-off horsepower) and an APU bearing part number and manufacturer’s serial number     , all in airworthy condition.
(b) All Aircraft Documentation and information regarding the Aircraft, Engines, APU and Parts as per Attachment 1, Parts A and B.
(c) The miscellaneous equipment per Attachment 2 and the LESSOR-furnished equipment (BFE) per Attachment 3.
3. The Aircraft had the following seating configuration at Delivery:
                         first                         business                         coach
4. An auxiliary center tank (ACT) is / is not installed (circle one) at Delivery. If yes, quantity of auxiliary center tanks:             
5. Lower crew rest (LD-MCR) is / is not installed (circle one) at Delivery.
 
141

6. The takeoff thrust rating of the Engines per the FAA type certificate data sheet is             pounds.
7. The maximum gross takeoff weight of the Aircraft is             circle one) pounds/kilos.
8. The amount of fuel on board at Delivery is:             pounds/gallons/kilos of fuel (circle one).
9. The Agreed Value of the Aircraft is US$            .
10. All of the foregoing has been delivered and accepted on the date set forth above to LESSEE’s full satisfaction and pursuant to the terms and provisions of the Lease.
11. The Aircraft, Engines, APU, Parts and Aircraft Documentation as described in the Lease have been fully examined by LESSEE and have been received in a condition fully satisfactory to LESSEE and in full conformity with the Lease in every respect.
12. The Lease is in full force and effect, LESSOR has fully, duly and timely performed all of its obligations of every kind or nature thereunder and LESSEE has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease.
13. LESSOR’s Lender may rely upon all of the foregoing in granting substantial financial accommodations to LESSOR and LESSEE understands and agrees that any funds being advanced by LESSOR’s Lender will be made in reliance upon the foregoing.
14. LESSEE has obtained all required permits, authorizations, licenses and fees of the State of Registration or any Government Entity thereof necessary in order for LESSEE to operate the Aircraft as permitted by the terms of the Lease.
Dated on the date set forth above

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
	
By:	
	
Printed Name:	
	
Title:	
 
142

ATTACHMENTS:
 
1.	List of Aircraft Documentation Part A - Manufacturer’s List of Documents for Delivery Part B - Manufacturer’s Documentation Status List (Manufacturer’s “Exhibit G”)	
 
2.	Miscellaneous Equipment List	
 
3.	BFE List	
 
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 	EXHIBIT G	OPINION OF COUNSEL	
TO BE GIVEN BY INDEPENDENT OUTSIDE COUNSEL OF LESSEE OR OTHER LAWYERS ACCEPTABLE TO LESSOR
 
To:	International Lease Finance Corporation 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Gentlemen: This opinion is furnished to you pursuant to Article 7 of the Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”) between CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”). Defined terms in this opinion are used herein as defined in the Lease.	
I have acted as counsel for LESSEE in connection with the preparation, execution 2nd delivery of the Lease.
In that connection I have examined each of the following:
(a) The Lease and Side Letters thereto, the Estoppel and Acceptance Certificate and the power of attorney provided by LESSEE in which, among other things, LESSEE authorizes LESSOR to take action in LESSEE’s name to deregister the Aircraft after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason (together, the “ Lease Documents ”);
(b) The charter of LESSEE and all amendments thereto;
(c) Such other documents, agreements and instruments, and such treaties, laws, rules, regulations, decrees and the like, as I have deemed necessary as a basis for the opinions hereinafter expressed.
[(d) All of the agreements and any amendments thereto between LESSEE and all other lessors and lenders of LESSEE covering other aircraft operated by LESSEE on which the Engines can be installed.]
 
144

Based upon the foregoing and having regard for legal considerations which 1 deem relevant, I am of the opinion that:
1. LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations under the Lease Documents.
2. No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other regulatory body or authority is required for the valid authorization, execution, delivery and performance by LESSEE of the Lease Documents.
3. The Lease Documents have each been duly authorized, executed and delivered by LESSEE. Each such instrument is a valid and binding obligation of LESSEE, enforceable in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.
4. The execution and delivery of the Lease Documents, the consummation by LESSEE of the transactions contemplated therein and compliance by LESSEE with the terms and provisions thereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any lien, charge or encumbrance upon any property of LESSEE, under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected.
5. [Describe the process in the U.S. with respect to registration of the Aircraft in the name of LESSOR and any other steps required or recommended in the U.S. in order to protect the interests of LESSOR in the Aircraft]. Such registration of the Aircraft is not inconsistent with, and would not result in the loss of, LESSOR’s title to and ownership of the Aircraft. Except for the foregoing, no other filing or recording of any instrument or document or any other acts are necessary or advisable under the Laws of the U.S. to protect LESSOR’s title to and ownership of the Aircraft. [In the opinion given at Delivery, also confirm that the Aircraft is registered in the name of LESSOR.]
6. Except for any filing or recording that may be required with the [NAME OF AIRCRAFT REGISTER] and except for [DESCRIBE SUCH OTHER FILINGS OR RECORDINGS, INCLUDING WITH THE INTERNATIONAL REGISTRY], no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of Mexico in order for the Lease to constitute a valid and perfected
 
145

lease of record relating to the Aircraft, it being understood that such counsel expresses no opinion as to the nature of LESSOR’s title to the Aircraft on the Delivery Date. [In opinion given at Delivery, also confirm that the filings and other steps described have been accomplished.]
7. Except for [DESCRIBE ANY TRANSLATION, NOTARIZATION OR OTHER REQUIREMENTS], none of the Lease Documents needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof Each of the Lease Documents is in a proper form under the Laws of Mexico for enforcement or admission thereof into evidence in Mexico, without any further action on the part of any party other than the commencement of court proceedings in Mexico.
8. LESSEE will not be required to obtain any- licenses for importation and ferrying of the Aircraft into Mexico. LESSEE has complied with all import and customs formalities in Mexico with respect to the Aircraft.
9. LESSEE holds all licenses, certificates and permits from applicable governmental authorities in Mexico necessary for the conduct of its business as a certificated air carrier and performance of its obligations under the Lease Documents.
10. To my knowledge, there are no suits or proceedings pending or threatened against LESSEE before any Government Entity against or affecting LESSEE which, if adversely determined, would have a material adverse effect on the financial condition or business of LESSEE or its ability to perform under the Lease Documents, except as described in the filings provided to LESSOR pursuant to Article 20 of the Lease.
11. Under the Laws of Mexico, LESSEE will not be required to make or deduct any withholding or other Tax from any payment it may make under the Lease Documents.
12. The obligations of LESSEE under the Lease Documents are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by law.
13. LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets have the right of immunity from suit or execution on the grounds of sovereignty in such jurisdictions and the performance by LESSEE of its obligations under the Lease Documents constitute commercial acts done for commercial purposes.
14. On termination of the Lease, LESSOR would be entitled to repossess the Aircraft and, without additional fees or duties, export it from Mexico.
 
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15. Neither LESSEE nor LESSOR is required by the Laws of Mexico to obtain any approval, license or consent (including without limitation any exchange control approval) in order to remit to LESSOR of any amount payable under the Lease Documents.
16. There is no applicable usury or interest limitation Law in Mexico which may restrict the recovery of payments in accordance with the Lease Documents.
17. LESSOR will not violate any Law or become liable to any tax in Mexico by reason of entering into or performing its obligations under the Lease Documents and it is not necessary to establish a place of business in Mexico in order to enforce any provisions of the Lease Documents.
18. The choice of California Law to govern the Lease Documents will be upheld in any action in the courts of Mexico. Any judgment given by the United States or California courts would be recognized and accepted by the courts in Mexico.
19. [DESCRIBE STATUS OF CAPE TOWN CONVENTION IN COUNTRY], for example:
Mexico has ratified the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which were adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa (commonly known as the “ Cape Town Convention ”) [without any reservations or declarations in respect thereto OR with the following reservations and declarations in respect thereto] and the Lease and the other Operative Documents and the rights created thereby are valid, legal and binding thereunder and conform to the terms and conditions thereof.
or
Mexico [is not] [is] a signatory of, [and] [but] has not yet ratified, the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. [describe the ratification process and status of ratification in Mexico]
Very truly yours,
 
147

 	EXHIBIT H	FORM OF POWER OF ATTORNEY	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“ Volaris ”) hereby irrevocably appoints INTERNATIONAL LEASE FINANCE CORPORATION (“ ILFC ”), a corporation located in Los Angeles, California, U.S.A., as Volaris’s true and lawful attorney so that ILFC may take any of the following actions in the name of and for Volaris with respect to the Airbus A319-100 aircraft bearing manufacturer’s serial number {MSN of Aircraft, if known} (the “ Aircraft ”) leased by ILFC to Volaris pursuant to an Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”):
1. Pursuant to the Lease, Volaris has procured and is maintaining insurances for the Aircraft. ILFC has been named sole loss payee on the all risk hull and war risk insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft, ILFC is entitled to receive insurance proceeds in an amount specified in Article 19 of the Lease, a copy of which is attached. ILFC may take all action and sign all documents otherwise required to be performed by Volaris, including execution on behalf of Volaris of an appropriate form of discharge/release document, in order for ILFC to collect such insurance proceeds.
2. In the exercise of the rights of ILFC under the Lease to recover the Aircraft from Volaris and Mexico after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason, ILFC may take all action otherwise required to be performed by Volaris before the authorities and courts in Mexico in order to cause the Aircraft to be repossessed by ILFC, deregistered from the [NAME OF REGISTRY] and exported from Mexico.
3. In the exercise of the rights mentioned in paragraphs 1 and 2, ILFC may make any declarations or statements and sign any public or private documents which may be considered necessary or appropriate.
4. ILFC may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but not limited to employees of ILFC or legal counsel in Mexico.
ILFC is empowered to determine in its sole discretion when to exercise the powers conferred upon ILFC pursuant to this Power of Attorney. Any person, agency or company relying upon this Power of Attorney need not and will not make any determination or require any court judgment as to whether an Event of Default has occurred under the Lease or whether the Lease has been terminated. Volaris hereby waives any claims against (a) any person acting on the instructions given by ILFC or its designee pursuant to this Power of Attorney and (b) any person designated by ILFC or an officer of ILFC to give instructions pursuant to this Power of Attorney. Volaris also agrees to indemnify and hold harmless any person, agency or company which may act in reliance upon this Power of Attorney and pursuant to instructions given by ILFC or its designee.
 
148

This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of ILFC, deregistered and exported from Mexico.
Volaris has made and delivered this Power of Attorney on                     in                     .

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
	
By:	
	
Printed Name:	
	
Title:	
 
149

 	EXHIBIT I	FORM OF CAPE TOWN POWER OF ATTORNEY	
Form of Irrevocable Deregistration and Export Request Authorization (Annex referred to in Article 25 of the consolidated text of the Cape Town Convention)
[Date]
 
To:	[name of Registry Authority]	
 
Re:	Irrevocable Deregistration and Export Request Authorization	
The undersigned is the registered operator of the Airbus A319-100 aircraft bearing manufacturer’s serial number [            ] and FAA registration mark [Aircraft registration mark, or                    to mark place] (together with all installed, incorporated or attached accessories, parts and equipment, the “Aircraft”).
This instrument is an irrevocable deregistration and export request authorization issued by the undersigned in favor of International Lease Finance Corporation as lessor (the “Authorized Party”) under the authority of Article XIII of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. In accordance with that Article, the undersigned hereby requests:
(a) recognition that the Authorized Party or the person it certifies as its designee is the sole person entitled to:
(1) procure the deregistration of the Aircraft from the [insert name of aircraft register] maintained by [name of Registry Authority] for the purposes of Chapter III of the Convention on International Civil Aviation, signed at Chicago, on 7 December 1944; and
(2) procure the export and physical transfer of the Aircraft from [insert country]; and
(b) confirmation that the Authorized Party or the person it certifies as its designee may take the action specified in clause (a) above on written demand without the consent of the undersigned and that, upon such demand, the authorities in [insert country] shall cooperate with the Authorized Party with a view to the speedy completion of such action.
 
150

The rights in favor of the Authorized Party established by this instrument may not be revoked by the undersigned without the written consent of the Authorized Party.
Please acknowledge your agreement to this request and its terms by the appropriate notation in the space provided below and lodge this instrument in the aircraft registry maintained by [name of Registry Authority].

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
	
By:    Printed Name:    Title:    Date:	
Agreed to and lodged on the date specified below.

[NAME OF REGISTRY AUTHORITY]	
	
By:    Its:    Date:	
 
151

 	EXHIBIT J	ASSIGNMENT OF RIGHTS (AIRFRAME)	
This Assignment of Rights is made this     day of                     (the “Assignment Agreement”)
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ILFC”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“LESSEE”)	
1. Preamble . In connection with the lease by ILFC to LESSEE of one new Airbus A319100 model aircraft bearing manufacturer’s serial number [    ] (the “Aircraft”), reference is made to the following documents:
(a) the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“AIRBUS”) dated as of June 17, 2001, as further amended (the “Purchase Agreement”), under which ILFC agreed to purchase the Aircraft;
(b) the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “G.T.A.”);
(c) the Product Support Agreement set forth in Exhibit E to the G.T.A. (the “Support Agreement”);
(d) the Aircraft Lease Agreement between ILFC and LESSEE dated as of March 9, 2007 (the “Lease Agreement”); and
(e) the Participation Agreement between ILFC and LESSEE dated as of                     ,             (the “Participation Agreement”).

	 	152	 	EXHIBIT J
ASSIGNMENT OF RIGHTS
(AIRFRAME)	

2. Assignment . Pursuant to the Lease Agreement, ILFC will lease the Aircraft to LESSEE, including in such Lease Agreement a commitment to assign to LESSEE certain warranty and other rights related to the Aircraft under the Purchase Agreement, the G.T.A. and the Support Agreement. With effect from the date hereof, ILFC therefore hereby assigns to LESSEE and LESSEE accepts the assignment on the terms and conditions specified herein of the following rights (the “Rights”) under the provisions indicated (the “Assigned Provisions”) with respect to the Aircraft:
(a) the benefit of the rights with respect to the Aircraft under Clause 12 (Warranties and Service Life Policy) of the G.T.A.; and
(b) the rights with respect to the Aircraft under Clause 13 (Patent Indemnity) of the G.T.A.; and
(c) the benefit of the remaining rights with respect to the Aircraft under Clause 15 of the Support Agreement as set forth in paragraph 1(c) of the Participation Agreement; and
(d) the benefit of the remaining part of the product support allowance as set forth in paragraph 1(d) of the Participation Agreement.
3. Conditions of Assignment . This Assignment Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof (copies of which are attached hereto), with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(b) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in section 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.
 
153

(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 above received by ILFC in connection with the Aircraft.
(d) Other than with respect to the obligations assumed by LESSEE under this Assignment Agreement as set forth in sections 3(a) and 3(c) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
4. Reassignment . Upon termination of the Lease Agreement and/or definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, upon receipt of such notice by AIRBUS, the remaining rights contained herein shall automatically be reassigned to ILFC. AIRBUS can rely on such notice without further inquiry.
5. Assignment by LESSEE . The rights of ILFC and LESSEE under this Assignment Agreement in respect of the Purchase Agreement, the G.T.A. and the Support Agreement shall not be further assigned by the parties hereto.
6. Notification
(a) This Assignment Agreement shall, at the expense of LESSOR, be notified to AIRBUS within 2 weeks of the date hereof pursuant to Article 1690 of the French Civil Code.
(b) All notices and requests required or authorized under this Assignment Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:
ILFC shall be addressed at: 10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A.

Attention:	  	Senior Vice President-Technical	
		
Fax:	  	310-788-1990	
Telephone:	  	310-788-1999	
 
154

LESSEE shall be addressed at: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. Prolongación Paseo de la Reforma #490 Piso 1 (Edificio GE) Col. Santa Fe Peña Blanca Del. Álvaro Obregón 01012 México, D.F. México

Attention:	  	Finance Director	
		
Fax:	  	[                    ]	
Telephone:	  	[                    ]	
AIRBUS shall be addressed at: 1 Rond-Point Maurice Bellonte 31707 Blagnac, CEDEX France

Attention:	  	VP, Contracts Administration & Delivery Transactions	
		
Fax:	  	(33) 5.61.93.41.95	
Telephone:	  	(33) 5 61 93 32 16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.
7. Consent of AIRBUS . It shall be a condition to the validity of this Assignment Agreement that AIRBUS execute a Consent substantially in the form set forth in Schedule 1 hereto.
8. Applicable Law and Jurisdiction . THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.
 
155

9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Assignment Agreement.
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
			
By:	 		 	By:	
			
Its:	 		 	Its:	
SCHEDULE 1
[DATE]
 
Re:	ILFC/CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“LESSEE”): ASSIGNMENT OF RIGHTS FOR AIRBUS A319-100 AIRCRAFT MSN [            ]	
Dear Sirs,
 
1.	Reference is made to the Assignment of Rights dated             ,             between ILFC and LESSEE (the “Assignment Agreement”) concerning the assignment of certain warranty rights under the Purchase Agreement and the G.T.A. and certain customer support rights under the Support Agreement with respect to the Aircraft.	
 
2.	All terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.	
 
3.	AIRBUS hereby consents to the assignment and reassignment contained in sections 2 and 4 respectively of the Assignment Agreement on the terms and conditions therein, subject to the following conditions:	
(a) AIRBUS shall have received formal notification of the Assignment Agreement within two weeks of the date hereof pursuant to Article 1690 of the French Civil Code.
 
156

(b) Nothing contained in the Assignment Agreement shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in subparagraph 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.
(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 of the Assignment Agreement received by ILFC in connection with the Aircraft.
(d) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(e) Other than with respect to the obligations assumed by LESSEE under the Assignment Agreement as set forth in sections 3(a) and 3(c) of the Assignment Agreement, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
 
4.	This Consent shall be governed by and construed in accordance with the laws of the State of New York and any dispute arising hereunder shall be referred to the federal court located in New York, New York. Nothing in this clause will prevent any party from making a claim in a court of competent jurisdiction in California or France.	
 
5.	Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this AIRBUS Consent and the Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to the Assignment Agreement.	

For and on behalf of AIRBUS S.A.S.	
	
By:    Title:    Date:	
 
157

					
Signed in acknowledgement for and on behalf of	 		 	Signed in acknowledgement for and on behalf of	
			
INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
 
158

					
By:	 		 	By:	
			
Its:	 		 	Its:	
 
159

 	EXHIBIT K	ASSIGNMENT OF RIGHTS (ENGINES)	
ASSIGNMENT AGREEMENT
This Agreement is made this     day of             , 20    .
AMONG:

INTERNATIONAL LEASE FINANCE CORPORATION	  	a corporation whose place of business is at 10250 Constellation Boulevard, 34th Floor, U.S.A. (hereinafter called “Lessor”) of the first part; and	
		
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, DE C.V. S.A.	  	a corporation whose place of business is at [                    ] (hereinafter called “ Lessee ”) of the second part; and	
		
IAE INTERNATIONAL AERO ENGINES AG	  	a joint stock company organized and existing under the laws of Switzerland whose principal place of business is at IAE Building, 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108 (hereinafter called “ IAE ”) of the third part.	
WHEREAS:
 
A.	Lessor owns Airbus A319-100 type aircraft which are equipped with IAE V2500 engines.	
 
B.	Lessor proposes to lease or has leased to Lessee one Airbus A319-100 aircraft, bearing manufacturer’s serial number [            ], equipped with two (2) IAE V2524-A5 engines bearing manufacturer’s serial numbers [            ] and [            ] (the “ Engines ”).	
 
C.	Lessor and IAE are parties to a V2500 General Terms of Sale Agreement referenced IAE/ILFC dated December 9, 1992 (which together with the Exhibits and Side Letters thereto, as amended and supplemented from time to time, is hereinafter referred to as the “ Support Contract ”) for the sale and support by IAE and the purchase by Lessor of those items defined in the Support Contract and hereinafter referred to as “ Supplies ”.	
In the Support Contract, Lessor is referred to as “ ILFC ”.
 
D.	Lessee wishes to take an assignment of certain rights and obligations of Lessor under the Support Contract and Lessor is willing to give and IAE is willing to consent to such assignment as hereinafter provided.	
 
160

NOW THEREFORE IT IS AGREED AS FOLLOWS:
CLAUSE 1       DEFINITIONS
Terms used in this Agreement shall have the same meanings as those given to them in the Support Contract except as otherwise noted.
CLAUSE 2       ASSIGNMENT
Subject to all other clauses of this Agreement and for as long as the lease agreement between Lessor and Lessee has not been terminated:
 
 	2.5	With respect to the Engines leased by Lessor to Lessee, Lessor hereby assigns and transfers to Lessee all of the rights and interest of Lessor under the following portions of the Support Contract (the “ Assigned Rights ”):	

2.1.1	  	Clause 1	  	        Definitions - with the exception of subclauses 1.4, 1.7 and 1.8	
			
	  	Clause 3	  	        Spare Parts Provisions with the exception of subclause 3.13.1	
			
	  	Clause 4	  	        Warranties, Guarantees and Liabilities	
			
	  	Clause 5	  	        Product Support Services	
			
	  	Clause 6	  	        Miscellaneous	

2.1.2	  	Exhibit A	  	        Support Contract Specification	
			
	  	Exhibit C	  	        Product Support	
			
	  	Exhibit D	  	        Warranties, Guarantees & Plans	
Such portions of the Support Contract as are hereby assigned have been previously provided to Lessee by Lessor, and Lessee hereby acknowledges receipt of the same.
 
161

 	2.6	Lessee hereby assumes and accepts the assignment and transfer of the Assigned Rights of Lessor as provided for in Clause 2.1 above and agrees to accept all of the limitations, obligations and liabilities contained in the Support Contract relating to the Assigned Rights.	
 
 	2.7	IAE hereby consents to the assignment and transfer to Lessee of all of the Assigned Rights of Lessor as provided in Clause 2.1 above and agrees that it will allow Lessee to exercise in its own name all of the Assigned Rights of Lessor.	
 
 	2.8	References in the Support Contract to Lessor (whether as “ILFC”, “Airline”, “Operator” or otherwise) shall, with respect to the Assigned Rights, include Lessee except where the context requires otherwise.	
CLAUSE 3       PAYMENT FOR SPARE PARTS
Notwithstanding Clause 2 above, payment for all purchases by Lessee shall be due upon delivery or, at IAE’s option, prior to delivery of the purchased. items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed on any of Lessee’s property, or (b) Lessee is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding-up laws or other similar legislation, or (c) Lessee becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a judgment rendered against Lessee, or (e) Lessee is unable or refuses to make payment to IAE in accordance with any of Lessee’s obligations to IAE.
CLAUSE 4       LAW
This Agreement shall be governed by and construed in accordance with the laws of New York, U.S.A. (other than its rules of conflicts of laws).
CLAUSE 5       AMENDMENT
 
 	5.1	This Agreement shall not be amended in any way other than by agreement in writing executed by all of the parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement. All future amendments to the Support Contract with respect to the Assigned Rights shall not require the written approval of Lessee except in such cases where Lessee’s rights or obligations are impacted. Any amendment in violation of this clause shall be null and void.	
 
 	5.2	This Agreement shall not be amended or terminated orally.	
CLAUSE 6       FURTHER ASSIGNMENT
Lessee shall not be entitled to further assign or transfer the Assigned Rights without the prior written consent of IAE.
 
162

CLAUSE 7       COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original and each counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorized officers the day and year first before written:

FOR: INTERNATIONAL LEASE FINANCE CORPORATION	 		 	FOR: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V.	
			
By:	 		 	By:	
			
Its:	 		 	Its:	
FOR: IAE INTERNATIONAL AERO ENGINES AG
By:
Its:
 
163

 	EXHIBIT L	RETURN ACCEPTANCE RECEIPT	
Date:                     ,             
 
1.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of March 9, 2007 (the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.	
 
2.	LESSOR has this     day of                    ,             (Time:            ) at                     received from LESSEE possession of:	
(a) One (1) Airbus A319-100 Aircraft bearing Manufacturer’s serial number {MSN of Aircraft, if known}, together with two (2) V2524-A5 Engines bearing manufacturer’s serial numbers             and             , an APU bearing manufacturer’s serial number             , and all Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts, as listed in the Document Receipt attached hereto.
 
3.	The Aircraft had the following seating configuration at return:             first             business             coach	
 
4.	An auxiliary center tank (ACT) is / is not installed (circle one) at return. If yes, quantity of auxiliary center tanks:                     	
 
5.	Lower crew rest (LD-MCR) is / is not installed (circle one) at return.	
 
6.	A Thales Avionics Integrated Standby Flight Display (ISFD)/Integrated Standby Instrument System (ISIS) was / was not installed (circle one) in the Aircraft by LESSEE during the Lease Term (applicable only if Thales ISFD/ISIS was not installed at Delivery).	
 
164

7.	The Airframe, Engines, APU and Parts had the following hours/cycles at return:	
 
 	(a)	Airframe:	
Maximum gross takeoff weight:             pounds/kilos (circle one)
Total hours:             Total cycles:             
 
 	(b)	Operating thrust of Engines at return:	
            pounds
 
 	(c)	Engine #1 Information:	

 	 	 	  	Serial No	  	Total Hours	  	Total Cycles	
					
ENGINE #1:	 		  		  		  		
					
ENGINE #1 MODULES	 	Total Hours	  	Total Cycles	  	Hours since last Module
Performance Restoration	  	Cycles since last
Module Performance
Restoration	
					
Low Pressure Compressor and Gearbox	 		  		  		  		
High Pressure Compressor/Diffuser	 		  		  		  		
High Pressure Turbine/Nozzle/Combus	 		  		  		  		
Low Pressure Turbine	 		  		  		  		

ENGINE #1 LIFE-LIMITED PART NAME	  	Part Number	  	Cycles Remaining to Next
Life-limited Part Removal	

 
165

					
ENGINE #1 LIFE-LIMITED PART NAME	  	Part Number	  	Cycles Remaining to Next
Life-limited Part Removal	

 	(d)	Engine No. 2 Information:	

 	 	 	  	Serial No	  	Total Hours	  	Total Cycle	
ENGINE #2	 		  		  		  		
					
ENGINE #2 MODULES	 	Total Hours	  	Total Cycles	  	Hours since last Module
Performance Restoration	  	Cycles since last
Module Performance
Restoration	
					
Low Performance Compressor and Gearbox	 		  		  		  		
High Pressure	 		  		  		  		
Compressor/Diffuser	 		  		  		  		
High Pressure	 		  		  		  		
Turbine/Nozzle/Combustor	 		  		  		  		
Low Pressure Turbine	 		  		  		  		

ENGINE LIFE-LIMITED PART NAME	  	Part Name	  	Cycles Remaining to Next
Life-limited Part Removal	

	  		  		
 
166

 	(e)	APU:	
Part number             
Serial number             
Total hours:             
Total cycles:             
            hours/             cycles since last hot section refurbishment
            hours/             cycles remaining on APU life-limited Parts
 
 	(f)	Landing Gear:	

Position	  	Serial No.	  	Total Hrs/Cycles/ Days	  	Hrs/Cycles/Days
since last Overhaul	  	Date of last Overhaul	
					
Nose	  		  		  		  		
					
Left Main	  		  		  		  		
					
Right Main	  		  		  		  		
8. The amount of fuel on board at return is            pounds/gallons/kilos of fuel (circle one).
9. Other technical information regarding the Aircraft and its components are correctly set forth on the Technical Evaluation Report (in the form of Exhibit O) attached hereto.
10. With reference to Article 13.10 of the Lease regarding reimbursement from the Reserves after return of the Aircraft:
            There are no claims for reimbursement from the Reserves which will be submitted after the date hereof.
or
            Claims for reimbursement from the Reserves will be submitted after the date hereof for the following:

Type of Work	  	Estimated Invoice Amount	
   	  	   	
11. LESSEE confirms that it has delivered to LESSOR all free-of-charge kits for the Aircraft received by LESSEE.
 
167

12. The above specified aircraft, engines and documentation are hereby accepted by LESSOR subject to (a) the provisions of the Lease and (b) correction by LESSEE (or procurement by LESSEE at LESSEE’s cost) as soon as reasonably possible of the discrepancies specified in the list attached.
13. Subject to the following paragraph, the leasing of the Aircraft by LESSOR to LESSEE pursuant to the Lease is hereby terminated without prejudice to LESSEE’s continuing obligations under the Lease including, without limitation, paragraph 11(b) above and Articles 16 and 17.
14. LESSEE represents and warrants that during the term of the Lease all maintenance and repairs to the Airframe and Engines were performed in accordance with the requirements contained in the Lease. LESSEE further confirms that all of its obligations under the Lease whether accruing prior to the date hereof or which survive the termination of the Lease by their terms and accrue after the date hereof, will remain in full force and effect until all such obligations have been satisfactorily completed.
15. This Return Acceptance Receipt is executed and delivered by the parties in      [place].
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in their respective company names by their duly authorized representatives as of the day and year first above written.

INTERNATIONAL LEASE FINANCE CORPORATION	  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
By:    By:    Printed Name:    Printed Name:    Its:    Its:
ATTACHMENTS:
 
1.	List of discrepancies	
 
2.	List of Aircraft Documentation	
 
3.	Current Aircraft layout passenger arrangement (LOPA)	
 
4.	Incident/accident letter	
 
5.	Dent and damage chart	
 
6.	List of loose equipment	
 
7.	List of free-of-charge kits	
 
8.	Engine disk sheets	
 
9.	Engine power assurance test conditions and results	
 
10.	Engine trend data	
 
11.	Technical Evaluation Report (in the form of Exhibit O)	
 
168

 	EXHIBIT M	MONTHLY REPORT	
(SEE FOLLOWING SHEET)
 
169

MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Page 1 of     
Report Due Date:

To:	  	INTERNATIONAL LEASE FINANCE CORPORATION	  	Fax: (310) 788-1990	
	  	10250 Constellation Boulevard, 34th Floor Los Angeles, California 90067, U.S.A. Attn: Finance Department	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

From:	 		
Contact	 	Fax:	

AIRCRAFT TYPE:	 	Airbus A319-100	 		 		
ENGINE TYPE:	 	V2524-A5	 	REGISTRATION:	 	Aircraft registration mark,
or              to mark place]	
	
SERIAL NUMBER: {MSN of Aircraft, if known} MONTH OF:	
NOTE : PLEASE RECORD TIME IN HOURS AND MINUTES NOT DECIMALS

	 	Aircraft Total Time Since New As Of Last Month	  	Hours:	  		  	Min:	  		
	 	Aircraft Total Time Since New:	  	Hours:	  		  	Min:	  		
	 	Aircraft Total Cycles Since New:	  	Cycles:	  		  		  		
	 	Airframe Hours Flown During Month:	  	Hours:	  		  	Min:	  		
	 	Airframe Cycles/Landings During Month:	  	Cycles:	  		  		  		

Page 2 of     

 	  	HOURS OR
CYCLES FLOWN
DURING MONTH
(if applicable)	 	x	  	US$ PER HOUR OR
CYCLE (if applicable)	 	=	  	RESERVES if
particular type of
Reserves calculated by
calendar month, list
monthly amount)	
TOTAL AIRFRAME	  		 		  		 		  		
TOTAL LANDING GEAR:	  		 		  		 		  		
TOTAL APU:	  	Hrs:	 	x	  		 	=	  		
Original Engine Serial Number:	  	Hrs:            Min:	 	x	  		 	=	  		
	  	Cycles (for Engine LLP Reserves):	 	x	  		 	=	  		
Original Engine Serial Number:	  	Hrs:            Min:	 	x	  		 	=	  		
	  	Cycles (for Engine LLP Reserves):	 	x	  		 	=	  		
Original Engine Serial Number:	  	Hrs:            Min:	 	x	  		 	=	  		
	  	Cycles (for Engine LLP Reserves):	 	x	  		 	=	  		
Original Engine Serial Number:	  	Hrs             Min:	 	x	  		 	=	  		
	  	Cycles (for Engine LLP Reserves):	 	x	  		 	=	  		
TOTAL AMOUNT OF RESERVES (US$) PAID THIS MONTH:	 	US$	

ENGINE SERIAL NUMBER:
 
ORIGINAL POSITION: ACTUAL LOCATION:
 
CURRENT THRUST RATING:
 	
Total Time Since New As Of Last Month:	 	HOURS:/MIN:	
		
Total Time Since New:	 		
		
Total Cycles Since New:	 		
		
Hours Flown During Month:	 		
		
Cycles During Month:	 		

Page 3 of     

ENGINE SERIAL NUMBER:
 
ORIGINAL POSITION: ACTUAL LOCATION:
 
CURRENT THRUST RATING:
 	
Total Time Since New As Of Last Month:	 	HOURS:/MIN:	
		
Total Time Since New:	 		
		
Total Cycles Since New:	 		
		
Hours Flown During Month:	 		
		
Cycles During Month:	 		
 
IMPORTANT:	IF ILFC-OWNED ENGINE IS AIRCRAFT, IT MUST BE REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY ON THIS FORM.	

 	EXHIBIT N	AIRCRAFT DOCUMENTATION	
AIRCRAFT RECORDS
 
1.	Copies of original Certificates delivered by Airbus, such as:	
 
 	a.	Airworthiness Certificate for Export	
 
 	b.	Radio installation conformity certificate	
 
 	c.	Noise limitation certificate	
 
2.	Copies of original Documents delivered by Airbus, such as:	
 
 	a.	Airworthiness Directive Compliance list	
 
 	b.	Aircraft inspection report	
 
 	c.	Aircraft Definition Report	
 
 	d.	Weighing report	
 
3.	Copies of current Certificates:	
 
 	a.	Airworthiness Certificate	
 
 	b.	Noise limitation	
 
 	c.	Radio license	
 
 	d.	Interior material burn certificates	
 
 	e.	Certificate of Export	
 
 	f.	Aircraft deregistration confirmation	
 
 	g.	Aircraft Registration	
 
4.	Letters signed and stamped by Quality Assurance:	
 
 	a.	Current aircraft hours and cycles	
 
 	b.	Current engines hours and cycles	
 
 	c.	Accident and Incident report	
 
 	d.	Summary of Maintenance Program	
 
 	e.	AD compliance during the lease term	
 
5.	Aircraft log books and Aircraft Definition Report	
 
6.	Aircraft Hard Time (HT) inspection status	
 
7.	One year forecast for HT inspection	
 
8.	Aircraft Modification status, including service bulletins	
 
9.	Last weighing report prior to redelivery	
 
10.	AD compliance report with original signoffs	
 
11.	Corrosion Prevention Control Program compliance summary	
 
173

12.	Routine and nonroutine job cards of the Return Check	
 
13.	Routine and nonroutine maintenance work cards for tasks performed during the Lease Term that were not repeated at or superseded by the Return Check	
 
14.	Past year pilot and maintenance discrepancies	
 
15.	Major and Minor structural repairs with applicable approvals	
 
174

16.	Compass Swing report of the last three years	
 
17.	Cabin Configuration drawing (LOPA)	
 
18.	Emergency equipment location drawing	
 
19.	Engineering data package for all modifications	
ENGINES RECORDS
 
1.	Last test cell run reports	
 
2.	Life-limited Parts status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Engine Modification / service bulletin /inspection report and applicable forms	
 
5.	Last heavy maintenance records for each module	
 
6.	Engine log books	
 
7.	Engine removal history	
 
8.	Past year trend monitoring reports	
 
9.	Historical borescope reports	
 
10.	Engine component report	
APU RECORDS
 
1.	APU status (FH, FC, limits)	
 
2.	Life-limited Part status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Modification status	
 
5.	Last heavy maintenance documents	
 
6.	APU log books	
 
7.	Last test cell report	
COMPONENT RECORDS
 
1.	Aircraft component inventory	
 
2.	Hard time component inventory	
 
3.	All required serviceable tags	
 
4.	Landing Gear status with last overhaul and life-limited Part status	
 
5.	AD compliance report with original signoffs	
 
6.	Modification status	
 
7.	Auxiliary fuel tank log book	
 
175

 	EXHIBIT O	TECHNICAL EVALUATION REPORT	
(SEE FOLLOWING SHEETS)
 
176

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

TABLE OF CONTENTS

AIRCRAFT SUMMARY	  	 	1	  	
		
MAINTENANCE & INSPECTION	  	 	2	  	
		
LANDING GEAR	  	 	3	  	
		
ENGINES	  	 	4	  	
		
AUXILIARY POWER UNIT (APU)	  	 	6	  	
		
PASSENGER CABIN CONFIGURATION (Seating)	  	 	6	  	
		
GALLEY PROVISIONS	  	 	7	  	
		
LAVATORIES, AUDIO/ENTERTAINMENT, CARGO, INTERIOR	  	 	9	  	
		
FUEL, WEIGHT & BALANCE	  	 	10	  	
		
AVIONICS SYSTEMS	  	 	10	  	
		
INSPECTOR RECORD	  	 	16	  	

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
					
AIRCRAFT SUMMARY as of	  	(date):	 	 	

Aircraft Make	  	Airbus Industries	  	Model	  	 	
				
FUS No.	  	 	  	S/N	  	 	

MFG Date:	  	 	  		  		

Current Operator:	  	 	  		  		  		
					
Current Registration:	  	 	  		  	Country:	  	 	
					
Previous Registration:	  	 	  		  	Country:	  	 	

Annual Utilization: Hour /Cycle Ratio: Total Aircraft Ti me: TAT (Hrs) As of (date):	 	Total	  	 	
					
Aircraft Cycles: TAC (Cyc)	 		 	 	 		  	 	
					
Time Since Last “C” or	 		 	 	 		  	 	
Equivalent Check: (Hrs) (Cyc)	 		 	 	 		  		
					
Time Since Last “5Y or 10Y” or	 		 		 		  	 	
Equivalent Structural Check: (Hrs) (Cyc)	 		 	 	 		  		

Engine Make: Model:	 	 	 		  	 	  		
					
Engine:	 	1 S/N:	 		  	2 S/N:	  		

TSN: (Hrs)	 	 	 		  	 	 		
					
CSN: (Cyc)	 	 	 		  	 	 		
IMPORTANT NOTE: THE ENGINE SERIAL NUMBERS SPECIFIED ON THIS REPORT REFLECT THE LESSOR OWNED ENGINE SERIAL NUMBERS. IF THE ENGINE SERIAL NUMBERS ARE NOT IDENTIFIED ON THIS REPORT, THEN PLEASE PROVIDE DATA FOR THE ENGINES ORIGINALLY DELIVERED WITH THE AIRCRAFT (LESSOR OWNED ENGINES).
 
Page 1

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
MAINTENANCE PROGRAM GENERAL

Aircraft Maintenance Program Provided By: ¨ Operator ¨ Other: Program	  	 	
		
Approved By Authority Of: ¨ FAA Approved ¨ Other: Repair Station Providing	  	 	

Service:	  	 	

Repair Station Number: FAA Approved?   ¨   Yes   ¨   No	  		
	
Primary Line Maintenance Provided By?:   ¨   Operator   ¨   Contract Service	
		
Reliability Controlled Maintenance Program?   ¨   Yes   ¨   No	  		
		
Component Tags Available For Controlled Components:	  	¨   Yes   ¨   No	

 	 	At Aircraft Delivery	 	Currently Approved
By Local Aviation Authority	 	Currently
Operated/Maintained	
				
ETOPS Qualification:	 	Minutes	 	Minutes	 	Minutes	

Auto Land Qualification: (Circle one that applies) CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIa, IIIb, IIIc	

	 	 	 	 	 	 	
MAINTENANCE & INSPECTION PROGRAM DESCRIPTION

Check	  	Operator’s
Nomenclature	  	Calendar	  	Frequency Hours	  	Cycles	  	Number of Phases	
						
“C”	  		  		  		  		  		

“5Y/ 10Y” or Equivalent	  		  		  		  		
	  		  	 	  	 	  	 	  	 	
MAINTENANCE & INSPECTION PROGRAM STATUS

 	  	Phase or Equivalent	  	Date	  	Aircraft TAT	  	Aircraft TAC	
					
Next “C” Phase or Equivalent:	  		  		  		  		

Last “C” Phase or Equivalent:	  		  		  		  		

Time Remaining:	  		  		  		  		

 	  	 	  	(Days)	  	(Hrs)	  	(Cyc)	
				
Structural Cards Worked During Last “C” Phase?:	  		  	¨   Yes	  	¨   No	
				
CPCP Cards Worked During Last “C” Phase?	  		  	¨   Yes	  	¨   No	
 
Page 2

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
							
Next “5Y or 10Y” Phase or Equivalent:	  	 	  		  		
				
Last “5Y or 10Y” Phase or Equivalent:	  	 	  		  		
Time Remaining:

 	  	(Days)	  	(Hrs)	  	(Cyc)	
				
CPCP Cards Worked During Last “5Y or 10Y” Phase?:	  		  	¨   Yes	  	¨   No	

Date of Last ATC Transponder Test:	  	#1	  	 	  	#2	  	 	
		
Date of Last Flight Recorder Check:	  	 	
		
Date of Last Aircraft Weighing:	  	 	
LANDING GEAR

NLG Tires:	  	(Size)	  	 	  	(MPH Rating)	  	 	  	(MFG)	  	 	
							
MLG Tires:	  	(Size)	  	 	  	(MPH Rating)	  	 	  	(MFG)	  	 	

Brake Manufacture:	  	 	  	Type:        	  	¨   Steel            	  	¨   Carbon	  		

NOSE:	 	P/N	  	 	  	S/N	  	 	  		  	 	
							
Last Overhaul	 		  	(Date)	  	(Hrs)	  		  	(Cyc)	  	 	
						
Agency Performing Overhaul Service:	 		  		  	 	  	Cert#	  	 	
	 		  		  		  		  	 	
Approved Overhaul Interval:	 		  	(Days)	  	(Hrs)	  		  	(Cyc)	  	 	
	 		  		  		  		  		  	 	
Landing Gear Time Since Overhaul	 		  	(Days)	  	(Hrs)	  		  	(Cyc)	  	 	
	 		  		  		  		  		  	 	
Time Remaining to Next Overhaul:	 		  	(Days)	  	(Hrs)	  		  	(Cyc)	  	 	

LEFT MAIN:	 	P/N	  	 	  	S/N	  	 	  		  		
							
Last Overhaul:	 		  	(Date)	  	(Hrs)	  		  	(Cyc)	  	 	
							
Agency Performing Overhaul Service:	 		  		  		  	 	  	Cert#	  	 	
							
Approved Overhaul Interval:	 		  	(Days)	  	(Hrs)	  		  	(Cyc)	  	 	

 
Page 3

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
													
Landing Gear Time Since Overhaul	 		  	(Days)	  	(Hrs)	 		 		 	(Cyc)	
							
Time Remaining to Next Overhaul:	 		  	(Days)	  	(Hrs)	 		 		 	(Cyc)	
					
RIGHT MAIN:	 	P/N	  	 	  	S/N	 	 	
Last Overhaul:	 		  	(Date)	  	(Hrs)	 	(Cyc)	
						
Agency Performing Overhaul Service:	 		  		  	 	 		 	Cert#	
							
Approved Overhaul Interval:	 		  	(Days)	  	(Hrs)	 		 		 	(Cyc)	
							
Land Visit Time Since Overhaul	 		  	(Days)	  	(Hrs)	 		 		 	(Cyc)	
							
Time Remaining to Next Overhaul:	 		  	(Days)	  	(Hrs)	 		 		 	(Cyc)	
ENGINES
ENGINE MAINTENANCE PROGRAM

Engine Maintenance Program Provided By:	 	 	
Engine Condition Monitoring Trend Analysis Program?                                         ¨ Yes                     ¨ No

Engine Oil Type:	 	 	
Current Thrust Rating:                                            Lbs
Certified Thrust Rating:                                          Lbs (from data plate)
Engine(s) operated at INCREASED or DECREASED Thrust Rating; Program limitations & required Mods. to operate at designated thrust rating
ENGINE SPECIFICATIONS
ENGINE NUMBER 1

Engine Make: Model: S/N:	 		 		 		
	 	 	 	 	 		 	 	
Date of Mfg:	 		 	Total Time                (Hrs)	 		 	(Cyc)	
Time Since Last Performance	 		 		 		
Restoration Visit: (Visit Date) (Hrs) (Cyc) Time Since Last Shop Visit: (Visit Date) (Hrs) (Cyc) Test Cell	
EGT Margin:	 		 	 	 	 	 	 	

Page 4

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
							
Work Scope of Last Shop Visit:	 	 	
		
Agency Performing Service:	 	 	
				
Agency FAA Approved?: ¨ Yes ¨ No Cert. #:	 		 		 	 	

1st LIMITER*	  	Part Name:	 	 	
				
	  	Allowable Life/Insp Limit:	 	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	 	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	 	(Hrs)	  	(Cyc)	
			
2nd LIMITER*	  	Part Name:	 	 	
				
	  	Allowable Life/Insp Limit:	 	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	 	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	 	(Hrs)	  	(Cyc)	
 
*	Provide a copy of Performing Disk Sheet for all modules.	
ENGINE SPECIFICATIONS
ENGINE NUMBER 2

Engine Make:	 	 	 	Model:	 	 	 	S/N:	 	 	
					
Date of Mfg:	 		 	Total Time:	 	(Hrs)	 	(Cyc)	

Time Since Last Performance	  		  		  		
Restoration Visit: (Visit Date) (Hrs) (Cyc) Time Since Last Shop Visit: (Visit Date) (Hrs) (Cyc) Test	
				
Cell EGT Margin:	  	 	  	 	  	 	
		
Work Scope of Last Shop Visit:	  	 	
		
Agency Performing Service:	  	 	
			
Agency FAA Approved?: ¨ Yes ¨ No Cert. #:	  		  	 	

1st LIMITER*	  	Part Name:	 	 	
				
	  	Allowable Life/Insp Limit:	 	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	 	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	 	(Hrs)	  	(Cyc)	
 
Page 5

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
							
2nd LIMITER*	  	Part Name:	  	 	
				
	  	Allowable Life/Insp Limit:	  	(Hrs)	  	(Cyc)	
				
	  	Total Component Time:	  	(Hrs)	  	(Cyc)	
				
	  	Time Remaining:	  	(Hrs)	  	(Cyc)	
 
*	Provide a copy of a current Disk Sheet for all modules.	
AUXILIARY POWER UNIT

APU Make: Model: S/N: Date of Mfg: Total Time: (Hrs) (Cyc) APU Times Are Recorded By: ¨ APU Clock or ¨ A/C	
				
Time Ratio: :	 	 	 	 	 	 	
				
Time Between Overhaul:
(Hrs) (Cyc)	 	 

 	
	
Time Since Last Hot Section Refurbishment: (Date) (Hrs) (Cyc) Time Since Last Overhaul: (Date)	

	
(Hrs) (Cyc) Time Since Last Shop Visit: (Date) (Hrs) (Cyc) Work Scope:	

Agency Performing Service: Location: Cert. #: Agency FAA Approved?: ¨ Yes ¨ No APU Oil Type:	

							
1st LIMITER*	  	Part Name:	 	 	
				
	  	Allowable Life/Insp Limit:	 	(Hrs)	 	(Cyc)	
				
	  	Total Component Time:	 	(Hrs)	 	(Cyc)	
				
	  	Time Remaining:	 	(Hrs)	 	(Cyc)	
			
2nd LIMITER*	  	Part Name:	 	 	
				
	  	Allowable Life/Insp Limit:	 	(Hrs)	 	(Cyc)	
				
	  	Total Component Time:	 	(Hrs)	 	(Cyc)	
				
	  	Time Remaining:	 	(Hrs)	 	(Cyc)	
 
Page 6

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
PASSENGER CABIN CONFIGURATION
SEATING CONFIGURATION

Present Configuration Occupancy: 	 	 	 	No. of Handicap Seats Installed:	 	 	

FIRST CLASS	 		 		 		 		 		 		
								
Pax Qty:	 	 	 	Seat Mfg:	 	 	 	Model:	 	 	 	P/N:	 	 	
							
Seats Fireblocked?	 	¨ Yes	 		 	¨ No	 		 	Color:	 	 	
							
16 G Seat Installation	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Video:	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Power:	 	¨ Yes	 		 	¨ No	 		 		 		
							
BUSINESS CLASS	 		 		 		 		 		 		
								
Pax Qty:	 	 	 	Seat Mfg:	 	 	 	Model:	 	 	 	P/N:	 	 	
							
Seats Fireblocked?	 	¨ Yes	 		 	¨ No	 		 	Color:	 	 	
							
16 G Seat Installation	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Video:	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Power:	 	¨ Yes	 		 	¨ No	 		 		 		
							
COACH CLASS	 		 		 		 		 		 		
								
Pax Qty:	 	 	 	Seat Mfg:	 	 	 	Model:	 	 	 	P/N:	 	 	
							
Seats Fireblocked?	 	¨ Yes	 		 	¨ No	 		 	Color:	 	 	
							
16 G Seat Installation	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Video:	 	¨ Yes	 		 	¨ No	 		 		 		
							
In Seat Power:	 	¨ Yes	 		 	¨ No	 		 		 		

									
Provisions for Life Vests Under Seats?:	 		 	¨  Yes	 		 	¨  No Manufacturer:	
					
 	 	Part Number:	 	 	
							
Emergency Escape Path Lighting:             ¨ Floor Mounted	  		  	¨  Seat Mounted	  		

Configuration Drawing Number:	 	 	 	  Source:	 	 	  		

Engineering Order / Installation Document:	 		 		 		 		
					
Installation FAA Approved?:                    ¨ Yes	 		 	             ¨  No	 	Method of Approval:	 	 	
 
*	Provide current LOPA, Emergency Equipment Layout, and IFE Layout.	
GALLEY PROVISIONS
GALLEY’s ARE (Check one): (    ) Atlas Standard (    ) KSSU Standard (    ) Other                     

 	 	GALLEY LOCATION	  	MANUFACTURER	  	 	  	PART
NUMBER	  	EQUIPPED	
							
	 		  		  		  		  	Water	  	Power	
1.	 	 	  	 	  		  		  	¨	  	¨	

 
Page 7

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
									
2.	 		 		  	¨	  	¨	
					
3.	 		 		  	¨	  	¨	
					
4.	 		 		  	¨	  	¨	
					
5.	 		 		  	¨	  	¨	
					
6.	 		 		  	¨	  	¨	
					
7.	 	 	 	 	  	¨	  	¨	
					
8.	 	 	 	 	  	¨	  	¨	
					
9.	 	 	 	 	  	¨	  	¨	
					
10.	 	 	 	 	  	¨	  	¨	
NOTE: Galley Locations per Spec or LOPA drawing i.e., GL, G2 etc. Galley Location numbers above correspond to the numbers below.

OVENS	  	FULL SIZE
CARTS	  	1/2 SIZE
CARTS	  	CHILLERS	  	COFFEE
MAKERS	  	WATER
BOILERS	  	HOT CUPS	  	OTHER	
									
1.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
2.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
3.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
4.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
5.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
6.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
7.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
8.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
9.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
									
10.	 	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	
 
Page 8

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
LAVATORIES

Number of Lavatories:	 	 	  	Handicap Provisions?:	  	¨   Yes	  	¨   No	
				
Locations:	 	 	  		  		
IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM

Boarding Music:	  	¨   Yes	  	¨	
			
No Auto Evac & Warning:	  	¨   Yes	  	¨	
			
No Pre-Recorded Announcement:	  	¨   Yes	  	¨	
			
No Passenger Entertainment (Audio):	  	¨   Yes	  	¨	
			
No Audio On Demand (AOD):	  	¨   Yes	  	¨   No	
			
Passenger Entertainment (Video):	  	¨   Yes	  	¨	
No Video Manufacturer:                                                                
Video System:                                                                                  

Video On Demand (VOD):	  	¨  Yes	  	¨  No	  		  		
					
Entertainment Controls (PCU) Installed?	  	¨ Yes	  	¨ No	  		  		
						
VTR Format:	  	¨ VHS	  	¨ Hi8	  	¨ Other	  		  		
				
¨  Projector (Check All that Apply)	  	¨ PSU Monitor	  	¨ Aisle Monitor	  		
				
Passenger En-Route Information Display:	  	¨ Yes	  	¨ No	  		

Telephone:	 	¨   Yes	 	¨   No	 	¨   Leased	 	     ¨   Owned	 	Satellite: ¨   Yes	 	¨   No	
CARGO COMPARTMENT

Cargo Loading System Installed:	 		  	¨   Yes	  	¨   No	
				
Smoke/Fire Detection System Installed:	 		  	¨   Yes	  	¨   No	
				
Fire Suppression System Installed:	 		  	¨   Yes	  	¨   No	
INTERIOR COLORS

Interior Color Scheme:	 	 	  	Carpets:	  	 	  	Curtains:	  	 	
PLACARDS & LIGHTED SIGNS

English?:                     ¨   Yes                     ¨   No	  	Bi-Lingual?:                     Yes   ¨                      ¨   No	

First Language:	 	 	  	    Second Language:	  	 	
 
Page 9

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
FUEL SYSTEM

Total Fuel Capacity:	 		  	U.S. Gallons	  	¨   Lbs or   ¨   Kilos	
					
Number of Tanks:	  	 	  		 		  		
				
Auxiliary Tanks Installed?:	 		  	¨   Yes	  	¨   No	
					
Auxiliary Tank Capacity:	  	 	 	U.S. Gallons	 	 	  	¨   Lbs or   ¨   Kilos	
			
Fuel Instrumentation / Calibration:	  	¨   U.S. Pounds	  	¨   Kilograms	
WEIGHT & BALANCE

Has Aircraft Been Modified For Increased Gross Weight by Current Lessee?:	  	¨   Yes	  	¨   No	

From	 	 	 	MTOGW	  	To	  	 	  	MTOGW	

Weight & Balance Manual Document No.:	  	 	  	Rev:	  	 	
For the below weights specify AFM approved limits :

 	  	 	  	POUNDS	 	KILOS	
			
Maximum Takeoff Gross Weight: (MTOGW) / Maximum Taxi Weight: (MTW)	 	/	 	 	
			
Maximum Landing Weight: (MLW) / Manufacturer’s Empty Weight: (MEW)	 	/	 	 	
			
Maximum Zero Fuel Weight: (MZFW) / Operational Empty Weight: (OEW)	 	/	 	 	
				
AFM measured in:	  	Pounds or Kilograms	  	 	 	 	
				
	  	Celsius or Fahrenheit	  	 	 	 	
AVIONICS SYSTEMS
22 AUTO FLIGHT

QTY	  	COMPONENT	  	MANUFACTURER	  	MODEL or PART NUMBER	
				
	  	FMGC Flight Management & Guidance Computer:	  	 	  	 	
				
	  	FAC Flight Augmentation Compute	  	 	  	 	
				
	  	FCU Flight Control Unit:	  	 	  	 	
				
	  	MCDU Multipurpose Control Display Unit:	  	 	  	 	
				
	  	Windshear (Check one):	  	¨   Reactive	  	¨   Predictive	
 
Page 10

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
23 COMMUNICATIONS

QTY	  	COMPONENT	    	MANUFACTURER	  	 	
	  	CIDS Director Cabin	  	Intercommunications Data System	  	MODEL or PART
NUMBER	
	  	HE Transceiver:	    	 	  	 	
	  	VHF Transceiver:	    	 	  	 	
	  	Solid State Cockpit Voice Recorder:	    		  	 	
	  	PRAM Tape Reproducer	    		  	 	
	  	(Pre-Recorded PAX Address):	    	 	  	 	
	  	MPES Tape Reproducer (Audio Entertainment):	    	 	  	 	
	  	Tape Reproducer (Video Entertainment):	    	 	  	 	
	  	Audio Management Unit/SELCAL Decoder:	    	 	  	 	
	  	ACARS Management Unit:	    	 	  	 	
	  	RMP Radio Management Pane	    	 	  	 	
 
Page 11

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
AVIONICS SYSTEMS (continued)
27 FLIGHT CONTROL COMPUTER

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	ELAC Elevator/Aileron Computer:	 	 	  	 	
				
	  	SFCC Slat/flap Control Computer:	 	 	  	 	
				
	  	SEC Spoiler/Elevator Computer:	 	 	  	 	
				
	  	FCDC Flight Control Data Concentrator:	 	 	  	 	
31 INDICATING AND RECORDING

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	Multifunction Printer: DFDR Flight Data Recorder:	 	 	  	 	
				
	  	FDIU Digital Flight Data Interface Unit:	 	 	  	 	
				
	  	Accelerometer:	 	 	  	 	
				
	  	FWC Flight Warning Computers:	 	 	  	 	
				
	  	QAR Quick Access Recorder:	 	 	  	 	
				
	  	AIDS Aircraft Integrated Data System:	 	 	  	 	
ELECTRONIC INSTRUMENT SYSTEM (EIS)

	  	PFD Primary Flight Display:	 		  	 	
				
	  	ND Navigation Display:	 	 	  	 	
				
	  	SDACS System Data Acquisition Concentrators:	 	 	  	 	
				
	  	Display Management Computers:	 		  	 	
				
	  	EWD Engine/Warning Display:	 		  	 	
				
	  	SD System Display:	 	 	  	 	
 
Page 12

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100 / CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

 
AVIONICS SYSTEMS (continued)

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
	  	CFDIU Centralized Fault Display Interface:	 	 	  	 	
34 NAVIGATION

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
	  	ADIRU Air Data/Inertial Reference System:	 	 	  	 	
				
	  	DME Distance Measuring Equipment Interrogators:	 	 	  	 	
				
	  	VHF VOR/Marker Beacon Receiver:	 	 	  	 	
				
	  	VHF ILS Receiver or Multi Mode Receiver:	 	 	  	 	
				
	  	DDRMI Digital Distance & Radio Magnetic Indicator:	 	 	  	 	
				
	  	Radio Altimeter Transceiver:	 	 	  	 	
				
	  	Weather Radar Transceiver:	 	 	  	 	
				
	  	TCAS Traffic Alert and Collision Avoidance System Computer:	 	 	  	 	
				
	  	ATC Air Traffic Control System Transponder:	 	 	  	 	
				
	  	Microwave Landing Receiver:	 	 	  	 	
				
	  	GPWS Ground Proximity Warning System:	 	 	  	 	
				
	  	ADF Automatic Direction Finder Receiver:	 		  	 	

				

	  		 	 	  	 	

 
Page 13

INSPECTOR RECORD

INSPECTED BY:	  	 	  	DATE:	 	 	

OPERATOR:	 	 	 	      REGISTERED OWNER:	 	 	

ADDRESS OF OPERATOR:	  	 	

CONTACT (Name/Title):	  	 	

TELEPHONE:	 	 	  	      TELEFAX:	  	 	

Email Address:	  	 	

Department Contact	  	Name	  	Phone	  	Fax	  	Email	
					
Quality Control:	  	 	  	 	  	 	  	 	
					
Power Plant Engineering:	  	 	  	 	  	 	  	 	
					
Maintenance Programs/Planning:	  	 	  	 	  	 	  	 	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.13
EXECUTION VERSION
Dated as of March 12, 2007
RBS AEROSPACE LIMITED
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

 
AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A319-133 aircraft
bearing manufacturer’s serial
number 3045

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
1.	 	Interpretation	  	 	1	  	
			
2.	 	Agreement to Lease	  	 	1	  	
			
3.	 	Delivery	  	 	1	  	
			
4.	 	Expiry Date	  	 	3	  	
			
5.	 	Rent	  	 	3	  	
			
6.	 	Deposit	  	 	5	  	
			
7.	 	Maintenance Rent	  	 	9	  	
			
8.	 	Payments	  	 	10	  	
			
9.	 	Lessor Covenants	  	 	13	  	
			
10.	 	Lessee Covenants	  	 	14	  	
			
11.	 	Possession and Sub-Leasing	  	 	20	  	
			
12.	 	Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	23	  	
			
13.	 	Replacement and Interchange of Engines and Parts	  	 	26	  	
			
14.	 	Manufacturer’s Warranties	  	 	30	  	
			
15.	 	Indemnities	  	 	32	  	
			
16.	 	Insurance	  	 	33	  	
			
17.	 	Loss, Damage and Requisition	  	 	36	  	
			
18.	 	Disclaimers	  	 	38	  	
			
19.	 	Redelivery	  	 	40	  	
			
20.	 	Events of Default	  	 	41	  	
			
21.	 	Taxation	  	 	49	  	
			
22.	 	Assignment and Transfer	  	 	55	  	
			
23.	 	Miscellaneous Provisions	  	 	56	  	
			
24.	 	Notices	  	 	60	  	
			
25.	 	Governing Law Jurisdiction and Waiver of Jury Trial	  	 	61	  	
			
26.	 	Owner Participant and Lessee Undertakings:	  	 	65	  	
		
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	66	  	
		
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	81	  	
		
Schedule 3 CONDITIONS PRECEDENT	  	 	85	  	
		
Schedule 4 *****	  	 	89	  	
		
Schedule 5 INSURANCE REQUIREMENTS	  	 	90	  	
		
Schedule 6 *****	  	 	94	  	
		
Schedule 7 PRE-DELIVERY PROCEDURE	  	 	100	  	
		
Schedule 8 *****	  	 	101	  	
		
*****	  	 	102	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- i -

TABLE OF CONTENTS
(continued)

 	  	Page	 	
		
*****	  	 	103	  	
		
Schedule 9 *****	  	 	104	  	
		
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	105	  	
		
Schedule 11 *****	  	 	106	  	
		
*****	  	 	109	  	
		
*****	  	 	110	  	
		
Schedule 12 *****	  	 	118	  	
		
Schedule 13 *****	  	 	119	  	
		
*****	  	 	120	  	
		
*****	  	 	121	  	
		
Schedule 14 *****	  	 	126	  	
		
Schedule 15 *****	  	 	130	  	
		
*****	  	 	131	  	
		
*****	  	 	132	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
ii

THIS AGREEMENT is made as of March 12, 2007
Between:
(1) RBS AEROSPACE LIMITED , a company incorporated under the laws of Ireland, whose registered office is at 3 rd Floor, 1 George’s Quay Plaza, George’s Quay, Dublin 2, Ireland ( Lessor ); and
( 2 ) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of Mexico, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ). 
It is agreed as follows:
 
1. 	Interpretation	
Definitions
 
1.1	In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).	
Construction
 
1.2	The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.	
Clauses and Schedules
 
1.3	References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.	
 
2. 	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3. 	Delivery	
Delivery
 
3.1	Subject to satisfaction (or waiver by Lessor in its sole discretion) of all Lessee Conditions Precedent, Lessor shall deliver and Lessee shall accept the Aircraft on lease immediately following delivery of, and transfer of title to, the Aircraft by Airbus to Lessor as evidenced by delivery of the Bill of Sale. The Aircraft shall be delivered to and accepted by Lessee at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance shall be absolute, unconditional and irrevocable.	

3.2	Lessor and Lessee acknowledge that the Lessor has appointed Lessee, pursuant to the Aircraft Purchase Agreement Assignment, as Lessor’s agent for the purposes of accepting delivery of the Aircraft from Airbus under the Aircraft Purchase Agreement Assignment. Lessee acknowledges that Lessor shall not execute and deliver the Aircraft Purchase Agreement Assignment, and Lessee agrees that it will not so accept delivery of the Aircraft from Airbus, unless and until Lessor notifies Lessee that the Lessee Conditions Precedent have been satisfied or waived. Lessee hereby agrees that in the event delivery of the Aircraft shall be accepted from Airbus under the Aircraft Purchase Agreement Assignment by Lessee, as Lessor’s agent pursuant to such appointment by Lessor, such acceptance of delivery by Lessee on behalf of Lessor shall, without further act, irrevocably constitute absolute and unconditional acceptance by Lessee of the Aircraft for all purposes of this Agreement (including for the avoidance of doubt, satisfaction (or waiver, provided the terms of any such waiver are acceptable to Lessor) of the conditions precedent set forth in paragraph 3 of Schedule 3), and upon such acceptance of the Aircraft, the Lessee will execute and deliver to the Lessor the Acceptance Certificate.	
Delayed Delivery
 
3.3	If owing to:	
 
 	(a)	any seller or manufacturer of the Aircraft delaying in the delivery of, or failing to deliver, the Aircraft to Lessor for any reason (other than because of any default of Lessor in the payment of the purchase price of the Aircraft, or any failure of Lessor to provide notice pursuant to clause 3.2 above, when obligated to do so as provided therein when all Lessee Conditions Precedent have been satisfied) whether or not in circumstances entitling that seller or manufacturer to terminate that agreement; or	
 
 	(b)	the Aircraft Purchase Agreement Assignment terminating with respect to the Aircraft prior to delivery of the Aircraft (other than because of any default of Lessor in the payment of the purchase price of the Aircraft when all Lessee Conditions Precedent have been satisfied); or	
 
 	(c)	any delay due to a Delayed Delivery Event or otherwise which is beyond the reasonable control of Lessor; or	
 
 	(d)	any Lessee Condition Precedent not having been fulfilled,	
Lessor delays in the Delivery of, or fails to deliver, the Aircraft under this Agreement then:
 
 	(a)	Lessor will not be responsible for any Loss, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by Lessee;	
 
 	(b)	subject to clause 3.3(c) and (d) below and to clause 20, Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor, on the grounds of any such delay;	
 
 	(c)	in the case of termination of the Aircraft Purchase Agreement Assignment in respect of the Aircraft, Lessor or Lessee may at any time after such termination terminate this Agreement;	
 
 	(d)	if the Delivery is delayed for a period of more than 60 days after the end of the Scheduled Delivery Month by reason of the occurrence of any of the events referred to in clause 3.3	
 
- 2 -

 	above, Lessor may terminate this Agreement by giving notice in writing to Lessee within ten (10) days after the expiration of such period (or, if applicable after the expiration of such other period as Lessor and Lessee may agree);	
 
 	(e)	Upon any termination pursuant to this clause 3.3 ( Delayed Delivery ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:	
 
 	(i)	pursuant to clause 8.4 ( Breakage Costs Indemnity ), clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality ); and	
 
 	(ii)	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid Rent received by Lessor on or prior to the date of such termination, or, if applicable, return the Letter of Credit.	
Risk
 
3.4	Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.	
 
4. 	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
5. 	Rent	
Rent Periods
 
5.1	(a)	The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	
 
- 3 -

 	(b)	The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
 
 	(c)	Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date
 
5.2	(a)	Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
 
 	(b)	If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent
 
5.3	(a)	Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 ( Rent ), the Term shall be divided into successive periods (each a Relevant Period ).	
 
 	(b)	The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
 
 	(c)	Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
 
 	(d)	Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
One Time Option to Fix Rent Prior to Delivery
 
5.4	(a)	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 4 -

 	2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
 
 	(b)	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
 
 	N	=         $256.04	
 
 	(c)	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 ( Rent Calculation ) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
 
 	(d)	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
6. 	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before March 30, 2007; and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 5 -

thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
 
6.2	No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).	
Concerning the Deposit
 
6.3	(a)	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
 	(b)	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 ( Set-off ) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
 
- 6 -

Provision of Letter of Credit
 
6.4	Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:	
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit
 
6.5	(a)	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
- 7 -

 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
- 8 -

 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7. 	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
- 9 -

8. 	Payments	
Account for Lessee Payments
 
8.1	All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:	

Bank:	  	The Royal Bank of Scotland PLC	
	  	Financial Institutions	
	  	PO Box 39952	
	  	2.  1 / 2 Devonshire Square	
	  	London	
	  	EC2M 4XJ	
		
Account No:	  	*****	
		
Account Name:	  	*****	
		
Sort Code:	  	*****	
		
IBAN BIC/Swift Code:	  	*****	
		
IBAN:	  	*****	
		
Correspondent Bank:	  	American Express International Bank	
	  	23 rd Floor	
	  	American Express Tower	
	  	200 Vesey Street	
	  	New York City	
	  	NY 10285-2300	
	  	USA	
		
Swift Code:	  	*****	
		
ABA:	  	*****	
Default Interest
 
8.2	If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.	
Absolute Obligations
 
8.3	(a)	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 10 -

 	Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
 
 	(i)	any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
 
8.4	Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:	
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
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 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****	
*****
Currency Indemnity
 
8.5	(a)	If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.	
Application of Payments by Lessor
 
8.6	If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.	
Lessor’s Determination of Amounts Due
 
8.7	Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.	
Business Day Convention
 
8.8	If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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9. 	Lessor Covenants	
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
 
9.2	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:	
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
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10. 	Lessee Covenants	
Performance
 
10.1	(a)	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
 	(b)	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
 
 	(c)	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
 
 	(d)	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information — General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
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 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
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 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect; all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth	
 
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 	of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such information as Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft ,unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
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 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
Registration and Protection
10.5
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, the Financing Parties; if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
“THIS [AIRCRAFT/ENGINE] IS OWNED BY RBS AEROSPACE LIMITED AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF RBS AEROSPACE LIMITED”;
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
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 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
Recognition of Rights
 
10.7	Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.	
 
11. 	Possession and Sub-Leasing	
Possession
 
11.1	Lessee shall not, without the prior written consent of Lessor, sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:	
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
 
11.2	Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:	
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
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 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
11.3
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and Insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
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 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 ( Insurance ) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss , Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol, if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
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 	(b)	Lessor shall (if necessary in connection with such sub-leasing (at no cost to Lessor) co-operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol, if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co-operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12. 	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
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 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection
 
12.3	(a)	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be	
 
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 	continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	
 
 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
 
12.4	Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:	
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
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 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
Maintenance Program
 
12.5	Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided , however , that such request shall be made promptly following receipt of any notice of such change from Lessee.	
Engine Thrust and Operational Derate
 
12.6	(a)	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
 
 	(b)	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13. 	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts
 
13.1	(a)	Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
 
 	(b)	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
 
 	(c)	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
 
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 	(d)	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part   (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 ( Recognition of Rights ) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
 
13.3	Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:	
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
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 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
 
13.4	Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:	
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
 
13.5	(a)	Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:	
 
 	(i)	no Default has occurred and is continuing;	
 
 	(ii)	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
 
 	(iii)	Lessee owns or leases the Other Aircraft and has operational control of it;	
 
 	(iv)	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
 
 	(v)	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security	
 
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 	Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
 
 	(vi)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
 
13.7	(a)	Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:	
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
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 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
 
13.8	Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).	
 
14. 	Manufacturer’s Warranties	
Use of Warranties
 
14.1	(a)	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
 
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 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims
 
14.2	(a)	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or any reimbursement for such remedy.	
 
 	(b)	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 ( Proceeds ) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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15.	Indemnities	
General
 
15.1	Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):	
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part (either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
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 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
 
15.2	Lessor, or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).	
Contest
 
15.3	If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:	
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
 
15.4	The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.	
 
16. 	Insurance	
Insurances
 
16.1		(a)	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
 
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 	(b)	The Insurances shall be effected either:	
 
 	(i)	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
 
 	(ii)	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
 
16.2	Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.	
Change
 
16.3		(a)	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
 
 	(b)	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2), Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B (as at the date hereof). In the event that any provision of AVN67B (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
 
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Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
 
16.5	Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:	
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
 
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Failure to Insure
 
16.6	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
Continuing Insurance for Indemnity
 
16.7	Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.	
 
17. 	Loss, Damage and Requisition	
Total Loss prior to Delivery
 
17.1	If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:	
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery
 
17.2		(a)	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	ninety (90) days after the Total Loss Date; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
 
 	(b)	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse,	
 
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 	representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
 
 	(c)	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
 
 	(d)	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition
 
17.3		(a)	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
 
 	(i)	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
 
 	(ii)	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
 
 	(iii)	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
 
 	(iv)	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
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18. 	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 ( EXCLUSION ) TO 18.4 ( CONFIRMATION ) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
 
18.1	THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:	
 
 	(a)	LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THIS AGREEMENT; AND	
 
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 	(b)	LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
 
18.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 ( EXCLUSION ).	
Disclaimer of Consequential Damages
 
18.3	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.	
No Duties
 
18.4	LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.	
Confirmation
 
18.5	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.	
 
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19. 	Redelivery	
Redelivery
 
19.1		(a)	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
 	(b)	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
 
 	(c)	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
 
 	(d)	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
 
19.2	If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:	
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) from the ***** day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
 
19.3	Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft notwithstanding non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.	
Export Documents
 
19.4	Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.	
Acknowledgement
 
19.5	Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.	
 
20. 	Events of Default	
Events
 
20.1	Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:	
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
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 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default, or termination event caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii) above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
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 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
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 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 ( Redelivery ); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (q) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** for the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
 
 	(t)	Registration Amendments : without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
Lessor’s Rights
 
20.2		(a)	Lessor Rights and Remedies : If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
 
 	(i)	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(ii)	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
 
 	(iii)	either:	
 
 	(y)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
 
 	(z)	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as	
 
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 	being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without	
 
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 	duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referenced to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
 
20.3	If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.	
 
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21. 	Taxation	
Gross-up
 
21.1		(a)	All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	
 
 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor, will be equal to the amount that Lessor would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Lessor in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Lessor in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Lessor shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Lessor in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Lessor shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor; or	
 
 	(ii)	oblige Lessor to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant to Pay Taxes
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof, is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ).
Tax Indemnity
 
21.3		(a)	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
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 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor by any Government Entity in Ireland or any jurisdiction where Lessor has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor of any of its right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax
 
21.4		(a)	Without limiting clause 21.3 above, Lessee shall pay to Lessor (or, if permitted by applicable Law and if requested by Lessor, Lessee shall pay to the relevant tax authority for the account of Lessor):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax
 
21.5		(a)	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that Lessor is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor, if available, in respect of payment of any such VAT.	
 
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Information regarding Taxes
 
21.6		(a)	If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.	
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments
 
21.7		(a)	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
Notification
 
21.8	Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however ,	
 
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 	the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.	
Information
 
21.9	Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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22. 	Assignment and Transfer	
By Lessee
 
22.1	LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.	
Lessor Transfer
 
22.2		(a)	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify. Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer
 
22.3		(a)	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
 	(d)	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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*****
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
23. 	Miscellaneous Provisions	
Rights Cumulative, Waivers
 
23.1	The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
Delegation
 
23.2	Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.	
Expenses
 
23.3	Lessee shall pay to Lessor on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor’s rights or remedies) incurred or payable by Lessor in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by Lessee with this Agreement (but in the case of such monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor’s rights or remedies under this Agreement (including in connection with any Event of Default).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Set-off
 
23.4		(a)	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
 
23.5	The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.	
Entire Agreement
 
23.6	This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.	
Rights of Third Parties
 
23.7	All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement.	
 
23.8	Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.	
 
23.9	All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.	
 
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Counterparts
 
23.10	This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.	
Language
 
23.11	All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.	
Confidentiality
 
23.12	This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non-public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement ( provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.	
Invalidity of any Provision
 
23.13	If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
Survival
 
23.14	All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.	
Further Assurance
 
23.15		(a)	Each of the parties agrees to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
 
 	(b)	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
 
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No Brokers
 
23.16	Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).	
Chattel Paper
 
23.17	To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.	
True Lease
 
23.18	The parties intend and agree that this Agreement:	
 
 	(a)	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
 
 	(b)	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for Purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
 
 	(c)	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
Lessee shall not file a tax return that is inconsistent with the provisions of this clause.
Know Your Customer/OFAC Compliance
 
23.19	Anti-Terrorism Law:	
 
 	(a)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
 
 	(b)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are any of the following:	
 
 	(i)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
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 	(ii)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(iii)	a person with which Lessor is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(iv)	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
 
 	(v)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
 
 	(c)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
23.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
24.	Notices	
 
24.1	Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:	
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day), provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.	
 
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24.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:

Address:	  	RBS Aerospace Limited	
	  	3 rd Floor	
	  	1 George’s Quay Plaza	
	  	George’s Quay	
	  	Dublin 2	
	  	Ireland	
		
Attention:	  	Head of Transaction Management	
		
Facsimile:	  	+ 353 1 448 3390	
To Lessee at:

Address:	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	Mexico D.F. 01012	
	  	Mexico	
		
Attention:	  	General Counsel	
		
Facsimile:	  	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
25.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
 
25.1	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.	
 
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Jurisdiction
 
25.2	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
Process Agents
 
25.3		(a)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
Waiver of Objections
 
25.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
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 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
 
25.5	This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.	
Waiver of Sovereign Immunity and Other Defenses
 
25.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
 
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Waiver of Jury Trial
 
25.7	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.	
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.

SIGNED on behalf of: 	
RBS AEROSPACE LIMITED	
		
Name:	 	/s/ David Swan	
		
Title:	 	Attorney-in-fact	
	
SIGNED on behalf of:	
CONCESIONARIA VUELA	
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Batik Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates are a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement dated as of October 28, 2005 between Parent and Airbus insofar as it relates to the Aircraft;
Aircraft Purchase Agreement Assignment means the aircraft purchase agreement assignment in form and substance acceptable to Lessor (acting reasonably) between Parent (as assignor) and Lessor (or such other person notified to Lessee as purchaser of the Aircraft) (as assignee) in relation to the Aircraft Purchase Agreement;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a
 
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removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means all costs, losses, premiums, penalties or out-of-pocket expenses incurred or suffered by Lessor, any Affiliate of Lessor or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or its Affiliates or otherwise in connection with the financing of Lessor’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****;
Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft;	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor);	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor);	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft;	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars , $ and US$ mean the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed;
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change );
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions );
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
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 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days, or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor who provides finance to Lessor in connection with Lessor’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor to Lessee as providing finance to Lessor in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate, organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
 
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Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means *****, or a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, *****, or (ii) such other base agreed by Lessor;
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authorities and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, any Affiliate of Lessor or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or its Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
 
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Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Master Agreement means the Master Agreement dated as of March 12, 2007 between Parent, Lessor and Lessee relating to the purchase and leasing of the Aircraft hereunder and the aircraft covered by certain Other Agreements;
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income;
Mexico means the United Mexican States;
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Master Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to A319 aircraft bearing manufacturer’s serial numbers 3045, 3069 and 3253, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor) and Lessee (or any Affiliate of Lessee);
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Parent means the Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
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 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees;	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date;	
 
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Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutic Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
 
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Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date in the Scheduled Delivery Month notified by Airbus or Parent to Lessor, at least 5 Business Days in advance thereof, as the Scheduled Delivery Date under the Aircraft Purchase Agreement;
Scheduled Delivery Month means October, 2007;
Scheduled Expiry Date means the day immediately before the day falling 114 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent. of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
Tax Indemnitee means Lessor, its Affiliates and each Financing Party, if any;
 
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Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss; and	
 
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UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage

1.2	 	(a)	    	References in this Agreement to:	
				
	 		    	(i)	    	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
				
	 		    	(ii)	    	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
				
	 		    	(iii)	    	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
				
	 		    	(iv)	    	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
				
	 		    	(v)	    	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
				
	 		    	(vi)	    	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
				
	 		    	(vii)	    	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
			
	 	(b)	    	Headings are for ease of reference only.	
			
	 	(c)	    	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g)	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
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 	(p)	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law, including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor represents and warrants to Lessee on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor is a limited liability company duly incorporated and validly existing and in good standing under the laws of Ireland;	
 
 	(b)	Power and Authority : Lessor has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement, has taken all necessary corporate action to authorize the entry into, performance and delivery of, this Agreement;	
 
 	(c)	Legal validity : this Agreement has been duly executed and delivered by Lessor and constitutes legal, valid and binding obligations of Lessor, enforceable against Lessor in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is binding upon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 83 -

3.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
- 84 -

Schedule 3
CONDITIONS PRECEDENT Conditions
Precedent to be satisfied by the Lessee
 
1.	Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.	
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
- 85 -

Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
- 86 -

 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexicali Asset Tax : evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ), in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in the condition required under the Aircraft Purchase Agreement and Schedule 6 hereof; (ii) Lessor shall have received (x) a certified copy of the full export certificate of airworthiness in relation	
 
- 87 -

 	to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Master Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement Assignment; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents and receipt by Lessor of the delivery documents under the Master Agreement, including an Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions; (vi) neither Lessee nor Parent shall have entered into any agreement with the Manufacturer which does, or would, substantially amend, modify, rescind, cancel or terminate the Aircraft Purchase Agreement in respect of the Aircraft without the prior written consent of Lessor; and (vii) the Delivery Date shall be occurring within 60 days of the last day of the Scheduled Delivery Month.	
 
2.	Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.	
 
3.	Conditions Precedent to be Satisfied by Lessor : Lessee’s obligations to accept delivery and lease the Aircraft from Lessor are subject to receipt by Lessee from Lessor on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:	
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Lessor; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Lessor approving the terms of, and the transactions contemplated by, this Agreement, resolving that Lessor enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement.	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Lessor’s status as a resident of Ireland for tax purposes.	
 
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Schedule 4
*****

 	  	*****	  	*****	  	*****	
Period 1	  	*****	  	*****	  	*****	
Period 2	  	*****	  	*****	  	*****	
Period 3	  	*****	  	*****	  	*****	
Period 4	  	*****	  	*****	  	*****	
Period 5	  	*****	  	*****	  	*****	
Period 6	  	*****	  	*****	  	*****	
Period 7	  	*****	  	*****	  	*****	
Period 8	  	*****	  	*****	  	*****	
Period 9	  	*****	  	*****	  	*****	
Period 10	  	*****	  	*****	  	*****	
Period 11	  	*****	  	*****	  	*****	
Period 12	  	*****	  	*****	  	*****	
Period 13	  	*****	  	*****	  	*****	
Period 14	  	*****	  	*****	  	*****	
Period 15	  	*****	  	*****	  	*****	
Period 16	  	*****	  	*****	  	*****	
Period 17	  	*****	  	*****	  	*****	
Period 18	  	*****	  	*****	  	*****	
Period 19	  	*****	  	*****	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 89 -

Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 90 -

 	(c)	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
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 	(f)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated March 12, 2007 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 92 -

 	(j)	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 93 -

Schedule 6
DESCRIPTION OF AIRCRAFT
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications:

Specification	  	 	
		
General Model	  	A319-133	
Engine Type / SLST	  	V2527M-A5, 26,570 lbs	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #	  	3045	
Year Built	  	2007	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
Max Taxi	  	75,900 kgs	
Max Take Off	  	75,500 kgs	
Max Zero Fuel	  	58,500 kgs	
Max Landing	  	62,500 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration, F / Y	  	144 Y/C	
CONFIGURATION Total Seats	  	144	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lays are vacuum type)	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. Galley 1 and mini-Galley S3 in aft. Bulkhead, between two lavatories	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4” retractable LCD monitors	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
- 94 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	  	Equipment Supplier	  	Part Number	
			
3 Radio Tuning Panels	  	THALES AVIONICS	  	C12848CA01	
2 HFS-900 HF Data Radios	  	Collins	  	822-0330-020	
3 VHF-900 VHF Data Radio	  	Collins	  	822-1047-030	
1 SELCAL Control Panel	  	TEAM	  	BC2065C	
1 SELCAL Decoder	  	Coltech	  	1200008-000	
1 Communications Mgmt Unit	  	N/A	  	N/A	
1 CVR (2 hour)	  	Allied Signal Avionic	  	980-6022-001	
1 DFDAU	  	SAGEM	  	ED48A100	
1 DFDR	  	Honeywell	  	980-4700-042	
1 Accelerometer	  	AMETEK AEROSPACE	  	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	  	Collins	  	22-1152-121	
2 Low Range Radio Altimeter	  	Collins	  	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	  	Collins	  	822-1710-202	
1 Weather Radar Control Panel	  	Collins	  	622-1530-820	
1 TCAS II Computer	  	Honeywell	  	7517900-10003	
2 ATC Mode S Transponder	  	Collins	  	822-1338-021	
1 TCAS Control Panel	  	THALES AVIONICS	  	C12404AB02	
2 VOR/Marker Beacon Receive	  	Collins	  	822-0297-020	
2 DME Interrogator	  	Collins	  	822-0329-020	
2 Multipurpose CDU	  	HONEYWELL	  	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	  	HONEYWELL	  	C13042BA01	
1 EGPWS Computer	  	Allied Signal	  	965-1676-002	
 
- 95 -

			
EPAC Ref.	  	Title	
		
	  	Introduction of A319-100 Standard Specification at Issue	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats – all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take – off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62./MZW 58.5 T	
03.20.400/02	  	Design weights increase to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier – English below vertical and second language Horiz.) – Airsigna	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine – bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steeringmarkers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external marking	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation – BFE	
	  	Installation of one HF system – COLLINS 900 – DIGITAL ANTENNA	
23.11.115/14	  	COUPLER – BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit has microphone alternate equipment – Holmberg	
 
- 96 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system- PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) – PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout (144 pax – DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment – full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double – sided adhesive tap	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change1)	
25.35.132/02	  	Installation of non-electric galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	
		
EPAC Ref.	  	Title	
		
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exiting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	With anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
1.60.120/01	  	Installation of LCD EIS2 – Thales Avionic	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signalled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
 
- 97 -

			
EPAC Ref.	  	Title	
		
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACAR	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	
		
EPAC Ref.	  	Title	
		
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Window	
56.10.102/02	  	Cockpit a alternate front windows – SAINT-GOBAIN SULLY	
 
- 98 -

			
EPAC Ref.	  	Title	
		
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engine	
77.00.119/XX	  	Engines selection	
 
- 99 -

Schedule 7
[INTENTIONALLY LEFT BLANK]
 
- 100 -

Schedule 8
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 101 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 102 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 103 -

Schedule 9
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 104 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 105 -

Schedule 11
AIRCRAFT DOCUMENTS AT REDELIVERY
Part A
Manuals
 
1.	List of manuals	
Basic:
 
1.	Airplane Flight Manual	
 
2.	Flight crew operating Manual	
 
3.	Trim Sheet	
 
4.	Quick Reference Handbook	
 
5.	Weight and Balance Manual	
 
6.	Performance Engineer’s Programs	
 
7.	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
 
8.	Performance Programs Manual	
 
9.	Aircraft Maintenance Manual	
 
10.	Wiring Diagram Manual	
 
11.	Power Plant Build-up Manual	
 
12.	Engine Brochures	
 
13.	APU Log Book (with manufacturer delivery documents)	
 
14.	Illustrated Parts Catalogue	
 
15.	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
 
16.	Structural Repair Manual	
 
17.	Nacelle Structural Repair Manual	
 
18.	Engine Maintenance Manual	
 
19.	Illustrated Parts catalogue (power-plant)	
 
20.	Master Minimum Equipment List	
 
- 106 -

21.	Maintenance Planning Document	
 
22.	Component Maintenance Manuals (Vendor and Manufacturer)	
 
23.	Engineering and Tooling Drawings	
 
24.	Maintenance Facility Planning	
 
25.	Support Equipment Summary	
 
26.	Tool and Equipment bulletins	
 
27.	Tools and equipment Drawings	
 
28.	Tools and equipment index	
 
29.	Illustrated tools and Equipment Manual	
 
30.	Technical Publications Combined Index	
 
31.	Trouble shooting Manual	
 
32.	Component Documentation Status	
 
33.	Component Evolution List	
 
34.	Cable Fabrication Manual	
 
35.	Standards Manual	
 
36.	Parts usage	
 
37.	Schedule (drawing Nomenclature)	
 
38.	Process and Materials Specification	
 
39.	Installation and Assembly Drawings	
 
40.	Airplane Characteristics for Airport Planning	
 
41.	ATA breakdown index	
 
42.	CADETS (technical Publications Training)	
 
43.	Aircraft Recovery Manual	
 
44.	Crash Crew Chart	
 
45.	Cargo Loading system Manual	
 
46.	List of applicable publications	
 
- 107 -

47.	List of radio active and hazardous elements	
 
48.	Livestock transportation Manual	
 
49.	Service Bulletins	
 
50.	Service information letters	
 
51.	Supplier Product Support Agreements	
 
52.	Transportability Manual	
 
53.	Vendor Information Manual	
 
54.	Vendor Information Manual for Ground Support Equipment	
 
55.	Maintenance Review Board	
 
56.	Non Destructive Testing Manual	
 
57.	Power Plant Build up Manual	
 
58.	Aircraft Schematics Manual	
 
59.	Aircraft Wiring Lists	
 
60.	Aircraft Wiring Manual	
 
61.	Component Location Manual	
 
62.	Consumable Material List	
 
63.	Duct Repair Manual	
 
64.	Electrical Load Analysis	
 
65.	Electrical Standards Practices Manual	
 
66.	Electrical Standards Practices Booklet	
 
67.	Fuel Pipe Repair Manual	
 
68.	Maintenance Planning Task Cards	
 
- 108 -

*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 109 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 110 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 111 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 112 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 113 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 114 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 115 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 116 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 117 -

Schedule 12
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 118 -

Schedule 13
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 119 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 120 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 121 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 122 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 123 -

Schedule 15
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 124 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 125 -

Schedule 14
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 127 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 129 -

Schedule 15
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 130 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 131 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 132 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.14
EXECUTION VERSION
Dated as of March 12, 2007
RBS AEROSPACE LIMITED
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A319-133 aircraft
bearing manufacturer’s serial
number 3069

TABLE OF CONTENTS

 	 	 	  	Page	 	
1.	 	Interpretation	  	 	1	  	
2.	 	Agreement to Lease	  	 	1	  	
3.	 	Delivery	  	 	1	  	
4.	 	Expiry Date	  	 	3	  	
5.	 	Rent	  	 	3	  	
6.	 	Deposit	  	 	5	  	
7.	 	Maintenance Rent	  	 	9	  	
8.	 	Payments	  	 	10	  	
9.	 	Lessor Covenants	  	 	13	  	
10.	 	Lessee Covenants	  	 	14	  	
11.	 	Possession and Sub-Leasing	  	 	20	  	
12.	 	Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	23	  	
13.	 	Replacement and Interchange of Engines and Parts	  	 	26	  	
14.	 	Manufacturer’s Warranties	  	 	30	  	
15.	 	Indemnities	  	 	32	  	
16.	 	Insurance	  	 	33	  	
17.	 	Loss, Damage and Requisition	  	 	36	  	
18.	 	Disclaimers	  	 	38	  	
19.	 	Redelivery	  	 	40	  	
20.	 	Events of Default	  	 	41	  	
21.	 	Taxation	  	 	49	  	
22.	 	Assignment and Transfer	  	 	55	  	
23.	 	Miscellaneous Provisions	  	 	56	  	
24.	 	Notices	  	 	60	  	
25.	 	Governing Law Jurisdiction and Waiver of Jury Trial	  	 	61	  	
26.	 	Owner Participant and Lessee Undertakings:	  	 	65	  	
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	66	  	
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	81	  	
Schedule 3 CONDITIONS PRECEDENT	  	 	85	  	
Schedule 4 *****	  	 	89	  	
Schedule 5 INSURANCE REQUIREMENTS	  	 	90	  	
Schedule 6 *****	  	 	94	  	
Schedule 7 PRE-DELIVERY PROCEDURE	  	 	100	  	
Schedule 8 *****	  	 	101	  	
*****	  	 	102	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- i -

TABLE OF CONTENTS
(continued)

 	 	 	  	Page	 	
*****	  	 	103	  	
Schedule 9 *****	  	 	104	  	
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	105	  	
Schedule 11 *****	  	 	106	  	
*****	  	 	109	  	
*****	  	 	112	  	
Schedule 12 *****	  	 	118	  	
Schedule 13 *****	  	 	119	  	
*****	  	 	122	  	
*****	  	 	124	  	
Schedule 14 *****	  	 	126	  	
Schedule 15 *****	  	 	130	  	
*****	  	 	131	  	
*****	  	 	132	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- ii -

THIS AGREEMENT is made as of March 12, 2007
Between:
(1) RBS AEROSPACE LIMITED , a company incorporated under the laws of Ireland, whose registered office is at 3 rd Floor, 1 George’s Quay Plaza, George’s Quay, Dublin 2, Ireland ( Lessor ); and
( 2 ) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of Mexico, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ). 
It is agreed as follows:
 
1.	Interpretation	
Definitions
 
1.1	In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).	
Construction
 
1.2	The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.	
Clauses and Schedules
 
1.3	References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.	
 
2.	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3.	Delivery	
Delivery
 
3.1	Subject to satisfaction (or waiver by Lessor in its sole discretion) of all Lessee Conditions Precedent, Lessor shall deliver and Lessee shall accept the Aircraft on lease immediately following delivery of, and transfer of title to, the Aircraft by Airbus to Lessor as evidenced by delivery of the Bill of Sale. The Aircraft shall be delivered to and accepted by Lessee at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance shall be absolute, unconditional and irrevocable.	

3.2	Lessor and Lessee acknowledge that the Lessor has appointed Lessee, pursuant to the Aircraft Purchase Agreement Assignment, as Lessor’s agent for the purposes of accepting delivery of the Aircraft from Airbus under the Aircraft Purchase Agreement Assignment. Lessee acknowledges that Lessor shall not execute and deliver the Aircraft Purchase Agreement Assignment, and Lessee agrees that it will not so accept delivery of the Aircraft from Airbus, unless and until Lessor notifies Lessee that the Lessee Conditions Precedent have been satisfied or waived. Lessee hereby agrees that in the event delivery of the Aircraft shall be accepted from Airbus under the Aircraft Purchase Agreement Assignment by Lessee, as Lessor’s agent pursuant to such appointment by Lessor, such acceptance of delivery by Lessee on behalf of Lessor shall, without further act, irrevocably constitute absolute and unconditional acceptance by Lessee of the Aircraft for all purposes of this Agreement (including for the avoidance of doubt, satisfaction (or waiver, provided the terms of any such waiver are acceptable to Lessor) of the conditions precedent set forth in paragraph 3 of Schedule 3), and upon such acceptance of the Aircraft, the Lessee will execute and deliver to the Lessor the Acceptance Certificate.	
Delayed Delivery
 
3.3	If owing to:	
 
 	(a)	any seller or manufacturer of the Aircraft delaying in the delivery of, or failing to deliver, the Aircraft to Lessor for any reason (other than because of any default of Lessor in the payment of the purchase price of the Aircraft, or any failure of Lessor to provide notice pursuant to clause 3.2 above, when obligated to do so as provided therein when all Lessee Conditions Precedent have been satisfied) whether or not in circumstances entitling that seller or manufacturer to terminate that agreement; or	
 
 	(b)	the Aircraft Purchase Agreement Assignment terminating with respect to the Aircraft prior to delivery of the Aircraft (other than because of any default of Lessor in the payment of the purchase price of the Aircraft when all Lessee Conditions Precedent have been satisfied); or	
 
 	(c)	any delay due to a Delayed Delivery Event or otherwise which is beyond the reasonable control of Lessor; or	
 
 	(d)	any Lessee Condition Precedent not having been fulfilled,	
Lessor delays in the Delivery of, or fails to deliver, the Aircraft under this Agreement then:
 
 	(a)	Lessor will not be responsible for any Loss, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by Lessee;	
 
 	(b)	subject to clause 3.3(c) and (d) below and to clause 20, Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor, on the grounds of any such delay;	
 
 	(c)	in the case of termination of the Aircraft Purchase Agreement Assignment in respect of the Aircraft, Lessor or Lessee may at any time after such termination terminate this Agreement;	
 
 	(d)	if the Delivery is delayed for a period of more than 60 days after the end of the Scheduled Delivery Month by reason of the occurrence of any of the events referred to in clause 3.3	
 
- 2 -

 	above, Lessor may terminate this Agreement by giving notice in writing to Lessee within ten (10) days after the expiration of such period (or, if applicable after the expiration of such other period as Lessor and Lessee may agree);	
 
 	(e)	Upon any termination pursuant to this clause 3.3 ( Delayed Delivery ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:	
 
 	(i)	pursuant to clause 8.4 ( Breakage Costs Indemnity ), clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality ); and	
 
 	(ii)	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid Rent received by Lessor on or prior to the date of such termination, or, if applicable, return the Letter of Credit.	
Risk
 
3.4	Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.	
 
4.	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
5.	Rent	
Rent Periods
 
5.1       (a)	The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	

- 3 -

 	(b)	The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
 
 	(c)	Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date
 
5.2       (a)	Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
 
 	(b)	If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent
 
5.3       (a)	Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 ( Rent ), the Term shall be divided into successive periods (each a Relevant Period ).	
 
 	(b)	The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
 
 	(c)	Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
 
 	(d)	Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
One Time Option to Fix Rent Prior to Delivery
 
5.4       (a)	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 4 -

 	2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
 
 	(b)	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
 
 	(c)	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 ( Rent Calculation ) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
 
 	(d)	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
6.	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before March 30, 2007; and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
 
6.2	No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).	
Concerning the Deposit
 
6.3       (a)	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
 	(b)	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 ( Set-off ) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
 
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Provision of Letter of Credit
 
6.4	Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:	
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit
 
6.5       (a)	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
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 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
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 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7.	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
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8.	Payments	
Account for Lessee Payments
 
8.1	All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:	

Bank:	  	The Royal Bank of Scotland PLC
Financial Institutions
PO Box 39952
2.  1 / 2 Devonshire Square
London
EC2M 4XJ	
		
Account No:	  	*****	
		
Account Name:	  	*****	
		
Sort Code:	  	*****	
		
IBAN BIC/Swift Code:	  	*****	
		
IBAN:	  	*****	
		
Correspondent Bank:	  	American Express International Bank
23 rd Floor
American Express Tower
200 Vesey Street
New York City
NY 10285-2300
USA	
		
Swift Code:	  	*****	
		
ABA:	  	*****	
Default Interest
 
8.2	If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.	
Absolute Obligations
 
8.3       (a)	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
 
 	(i)	any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
 
8.4	Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:	
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Currency Indemnity
 
8.5       (a)	If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.	
Application of Payments by Lessor
 
8.6	If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.	
Lessor’s Determination of Amounts Due
 
8.7	Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.	
Business Day Convention
 
8.8	If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.	
 
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9.	Lessor Covenants	
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
 
9.2	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:	
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
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10.	Lessee Covenants	
Performance
 
10.1     (a)	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
 	(b)	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
 
 	(c)	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
 
 	(d)	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information — General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
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 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
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 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect; all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth	
 
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 	of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such information as Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft ,unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
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 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
Registration and Protection
10.5
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, the Financing Parties; if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
“THIS [AIRCRAFT/ENGINE] IS OWNED BY RBS AEROSPACE LIMITED AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF RBS AEROSPACE LIMITED”;
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
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 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
Recognition of Rights
 
10.7	Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.	
 
11.	Possession and Sub-Leasing	
Possession
 
11.1	Lessee shall not, without the prior written consent of Lessor, sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:	
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
 
11.2	Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:	
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
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 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
11.3
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and Insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
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 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 ( Insurance ) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss , Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol, if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
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 	(b)	Lessor shall (if necessary in connection with such sub-leasing (at no cost to Lessor) co-operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol, if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co-operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12.	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
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 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection
 
12.3     (a)	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be	
 
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 	continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	
 
 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
 
12.4	Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:	
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
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 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
Maintenance Program
 
12.5	Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided , however , that such request shall be made promptly following receipt of any notice of such change from Lessee.	
Engine Thrust and Operational Derate
 
12.6     (a)	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
 
 	(b)	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13.	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts
 
13.1     (a)	Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
 
 	(b)	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
 
 	(c)	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
 
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 	(d)	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part   (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 ( Recognition of Rights ) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
 
13.3	Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:	
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
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 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
 
13.4	Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:	
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
 
13.5     (a)	Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:	
 
 	(i)	no Default has occurred and is continuing;	
 
 	(ii)	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
 
 	(iii)	Lessee owns or leases the Other Aircraft and has operational control of it;	
 
 	(iv)	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
 
 	(v)	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security	
 
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 	Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
 
 	(vi)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
 
13.7     (a)	Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:	
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
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 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
 
13.8	Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).	
 
14.	Manufacturer’s Warranties	
Use of Warranties
 
14.1     (a)	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
 
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 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims
 
14.2     (a)	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or any reimbursement for such remedy.	
 
 	(b)	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 ( Proceeds ) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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15.	Indemnities	
General
 
15.1	Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):	
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part (either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
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 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
 
15.2	Lessor, or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).	
Contest
 
15.3	If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:	
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
 
15.4	The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.	
 
16.	Insurance	
Insurances
 
16.1     (a)	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
 
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 	(b)	The Insurances shall be effected either:	
 
 	(i)	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
 
 	(ii)	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
 
16.2	Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.	
Change
 
16.3     (a)	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
 
 	(b)	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2), Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B (as at the date hereof). In the event that any provision of AVN67B (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
 
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Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
 
16.5	Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:	
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
 
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Failure to Insure
 
16.6	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
Continuing Insurance for Indemnity
 
16.7	Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.	
 
17.	Loss, Damage and Requisition	
Total Loss prior to Delivery
 
17.1	If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:	
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery
 
17.2     (a)	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	ninety (90) days after the Total Loss Date; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
 
 	(b)	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse,	
 
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 	representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
 
 	(c)	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
 
 	(d)	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition
 
17.3     (a)	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
 
 	(i)	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
 
 	(ii)	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
 
 	(iii)	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
 
 	(iv)	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
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18.	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 ( EXCLUSION ) TO 18.4 ( CONFIRMATION ) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
 
18.1	THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:	
 
 	(a)	LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THIS AGREEMENT; AND	
 
 	(b)	LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
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 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
 
18.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 ( EXCLUSION ).	
Disclaimer of Consequential Damages
 
18.3	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.	
No Duties
 
18.4	LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.	
Confirmation
 
18.5	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.	
 
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19.	Redelivery	
Redelivery
 
19.1     (a)	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
 	(b)	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
 
 	(c)	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
 
 	(d)	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
 
19.2	If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:	
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) from the ***** day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
 
19.3	Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft notwithstanding non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.	
Export Documents
 
19.4	Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.	
Acknowledgement
 
19.5	Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.	
 
20.	Events of Default	
Events
 
20.1	Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:	
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
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 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default, or termination event caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii) above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
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 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
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 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 (Redelivery); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (q) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** for the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
 
 	(t)	Registration Amendments : without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
Lessor’s Rights
 
20.2     (a) 	Lessor Rights and Remedies : If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
 
 	(i)	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(ii)	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
 
 	(iii)	either:	
 
 	(y)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
 
 	(z)	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as	
 
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 	being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without	
 
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 	duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referenced to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
 
20.3	If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.	

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21.	Taxation	
Gross-up
 
21.1     (a)	All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	
 
 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor, will be equal to the amount that Lessor would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Lessor in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Lessor in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Lessor shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Lessor in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Lessor shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor; or	
 
 	(ii)	oblige Lessor to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant to Pay Taxes
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof, is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ).
Tax Indemnity
 
21.3     (a)	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
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 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor by any Government Entity in Ireland or any jurisdiction where Lessor has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor of any of its right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax
 
21.4     (a)	Without limiting clause 21.3 above, Lessee shall pay to Lessor (or, if permitted by applicable Law and if requested by Lessor, Lessee shall pay to the relevant tax authority for the account of Lessor):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax
 
21.5     (a)	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that Lessor is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor, if available, in respect of payment of any such VAT.	
 
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Information regarding Taxes
 
21.6     (a)	If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.	
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments
 
21.7     (a)	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
Notification
 
21.8	Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however ,	
 
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 	the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.	
Information
 
21.9	Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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22.	Assignment and Transfer	
By Lessee
 
22.1	LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.	
Lessor Transfer
 
22.2     (a)	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify. Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer
 
22.3     (a)	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
 	(d)	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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*****
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
23.	Miscellaneous Provisions	
Rights Cumulative, Waivers
 
23.1	The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
Delegation
 
23.2	Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.	
Expenses
 
23.3	Lessee shall pay to Lessor on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor’s rights or remedies) incurred or payable by Lessor in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by Lessee with this Agreement (but in the case of such monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor’s rights or remedies under this Agreement (including in connection with any Event of Default).	

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Set-off
 
23.4     (a)	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
 
23.5	The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.	
Entire Agreement
 
23.6	This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.	
Rights of Third Parties
 
23.7	All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement.	
 
23.8	Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.	
 
23.9	All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.	

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Counterparts
 
23.10	This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.	
Language
 
23.11	All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.	
Confidentiality
 
23.12	This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non-public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement ( provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.	
Invalidity of any Provision
 
23.13	If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
Survival
 
23.14	All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.	
Further Assurance
 
23.15     (a)	Each of the parties agrees to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
 
 	(b)	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
 
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No Brokers
 
23.16	Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).	
Chattel Paper
 
23.17	To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.	
True Lease
 
23.18	The parties intend and agree that this Agreement:	
 
 	(a)	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
 
 	(b)	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for Purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
 
 	(c)	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
Lessee shall not file a tax return that is inconsistent with the provisions of this clause.
Know Your Customer/OFAC Compliance
 
23.19	Anti-Terrorism Law:	
 
 	(a)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
 
 	(b)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are any of the following:	
 
 	(i)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
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 	(ii)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(iii)	a person with which Lessor is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(iv)	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
 
 	(v)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
 
 	(c)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
23.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
24.	Notices	
 
24.1	Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:	
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day),	
 
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provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.
 
24.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:

Address:	  	RBS Aerospace Limited	
	  	3 rd Floor	
	  	1 George’s Quay Plaza	
	  	George’s Quay	
	  	Dublin 2	
	  	Ireland	
		
Attention:	  	Head of Transaction Management	
		
Facsimile:	  	+ 353 1 448 3390	
To Lessee at:

Address:	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	Mexico D.F. 01012	
	  	Mexico	
		
Attention:	  	General Counsel	
		
Facsimile:	  	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
25.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
 
25.1	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.	
 
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Jurisdiction
 
25.2	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
Process Agents
 
25.3     (a)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
 
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Waiver of Objections
 
25.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
 
25.5	This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.	
Waiver of Sovereign Immunity and Other Defenses
 
25.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
 
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Waiver of Jury Trial
 
25.7	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.	
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.

SIGNED on behalf of:	
RBS AEROSPACE LIMITED	
		
Name:	 	/s/ David Swan	
		
Title:	 	Attorney-in-fact	
	
SIGNED on behalf of:	
CONCESIONARIA VUELA	
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Batik Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates are a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement dated as of October 28, 2005 between Parent and Airbus insofar as it relates to the Aircraft;
Aircraft Purchase Agreement Assignment means the aircraft purchase agreement assignment in form and substance acceptable to Lessor (acting reasonably) between Parent (as assignor) and Lessor (or such other person notified to Lessee as purchaser of the Aircraft) (as assignee) in relation to the Aircraft Purchase Agreement;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a
 
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removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means all costs, losses, premiums, penalties or out-of-pocket expenses incurred or suffered by Lessor, any Affiliate of Lessor or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or its Affiliates or otherwise in connection with the financing of Lessor’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****
Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft;	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor);	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor);	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft;	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars , $ and US$ mean the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;	
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed;
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change ); 
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions ); 
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
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 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days, or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor who provides finance to Lessor in connection with Lessor’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor to Lessee as providing finance to Lessor in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate, organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
 
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Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means ***** or a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, ***** or (ii) such other base agreed by Lessor; 
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authorities and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, any Affiliate of Lessor or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or its Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
 
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Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Master Agreement means the Master Agreement dated as of March 12, 2007 between Parent, Lessor and Lessee relating to the purchase and leasing of the Aircraft hereunder and the aircraft covered by certain Other Agreements;
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income;
Mexico means the United Mexican States;
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Master Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to A319 aircraft bearing manufacturer’s serial numbers 3045, 3069 and 3253, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor) and Lessee (or any Affiliate of Lessee);
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Parent means the Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
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 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees;	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date;	
 
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Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutic Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
 
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Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date in the Scheduled Delivery Month notified by Airbus or Parent to Lessor, at least 5 Business Days in advance thereof, as the Scheduled Delivery Date under the Aircraft Purchase Agreement;
Scheduled Delivery Month means October, 2007;
Scheduled Expiry Date means the day immediately before the day falling 114 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent. of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
Tax Indemnitee means Lessor, its Affiliates and each Financing Party, if any;
 
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Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss; and	
 
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UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage
 
1.2    (a)	References in this Agreement to:	
 
 	(i)	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
 
 	(ii)	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
 
 	(iii)	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
 
 	(iv)	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
 
 	(v)	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
 
 	(vi)	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
 	(b)	Headings are for ease of reference only.	
 
 	(c)	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g)	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
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 	(p)	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law, including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor represents and warrants to Lessee on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor is a limited liability company duly incorporated and validly existing and in good standing under the laws of Ireland;	
 
 	(b)	Power and Authority : Lessor has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement, has taken all necessary corporate action to authorize the entry into, performance and delivery of, this Agreement;	
 
 	(c)	Legal validity : this Agreement has been duly executed and delivered by Lessor and constitutes legal, valid and binding obligations of Lessor, enforceable against Lessor in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is bindingupon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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3.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
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Schedule 3
CONDITIONS PRECEDENT Conditions
Precedent to be satisfied by the Lessee
 
1.	Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.	
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
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Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
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 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexicali Asset Tax : evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ), in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in the condition required under the Aircraft Purchase Agreement and Schedule 6 hereof; (ii) Lessor shall have received (x) a certified copy of the full export certificate of airworthiness in relation	
 
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 	to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Master Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement Assignment; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents and receipt by Lessor of the delivery documents under the Master Agreement, including an Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions; (vi) neither Lessee nor Parent shall have entered into any agreement with the Manufacturer which does, or would, substantially amend, modify, rescind, cancel or terminate the Aircraft Purchase Agreement in respect of the Aircraft without the prior written consent of Lessor; and (vii) the Delivery Date shall be occurring within 60 days of the last day of the Scheduled Delivery Month.	
 
2.	Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.	
 
3.	Conditions Precedent to be Satisfied by Lessor : Lessee’s obligations to accept delivery and lease the Aircraft from Lessor are subject to receipt by Lessee from Lessor on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:	
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Lessor; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Lessor approving the terms of, and the transactions contemplated by, this Agreement, resolving that Lessor enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement.	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Lessor’s status as a resident of Ireland for tax purposes.	
 
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Schedule 4
*****

 	 	*****	 	*****	 	*****	
Period 1	 	*****	 	*****	 	*****	
Period 2	 	*****	 	*****	 	*****	
Period 3	 	*****	 	*****	 	*****	
Period 4	 	*****	 	*****	 	*****	
Period 5	 	*****	 	*****	 	*****	
Period 6	 	*****	 	*****	 	*****	
Period 7	 	*****	 	*****	 	*****	
Period 8	 	*****	 	*****	 	*****	
Period 9	 	*****	 	*****	 	*****	
Period 10	 	*****	 	*****	 	*****	
Period 11	 	*****	 	*****	 	*****	
Period 12	 	*****	 	*****	 	*****	
Period 13	 	*****	 	*****	 	*****	
Period 14	 	*****	 	*****	 	*****	
Period 15	 	*****	 	*****	 	*****	
Period 16	 	*****	 	*****	 	*****	
Period 17	 	*****	 	*****	 	*****	
Period 18	 	*****	 	*****	 	*****	
Period 19	 	*****	 	*****	 	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 89 -

Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 90 -

 	(c)	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
- 91 -

 	(f)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated March 12, 2007 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 92 -

 	(j)	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 93 -

Schedule 6
DESCRIPTION OF AIRCRAFT
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications:

Specification	  		
		
General Model	  	A319-133	
Engine Type / SLST	  	V2527M-A5, 26,570 lbs	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #	  	3069	
Year Built	  	2007	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
Max Taxi	  	75,900 kgs	
Max Take Off	  	75,500 kgs	
Max Zero Fuel	  	58,500 kgs	
Max Landing	  	62,500 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration, F / Y	  	144 Y/C	
CONFIGURATION Total Seats	  	144	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lavs are vacuum type	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. Galley 1 and mini-Galley S3 in	
	  	aft. Bulkhead, between two lavatories	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4”	
	  	retractable LCD monitors	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
- 94 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	 	Equipment Supplier	 	Part Number	
			
3 Radio Tuning Panels	 	THALES AVIONICS	 	C12848CA01	
2 HFS-900 HF Data Radios	 	Collins	 	822-0330-020	
3 VHF-900 VHF Data Radio	 	Collins	 	822-1047-030	
1 SELCAL Control Panel	 	TEAM	 	BC2065C	
1 SELCAL Decoder	 	Coltech	 	1200008-000	
1 Communications Mgmt Unit	 	N/A	 	N/A	
1 CVR (2 hour)	 	Allied Signal Avionic	 	980-6022-001	
1 DFDAU	 	SAGEM	 	ED48A100	
1 DFDR	 	Honeywell	 	980-4700-042	
1 Accelerometer	 	AMETEK AEROSPACE	 	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	 	Collins	 	22-1152-121	
2 Low Range Radio Altimeter	 	Collins	 	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	 	Collins	 	822-1710-202	
1 Weather Radar Control Panel	 	Collins	 	622-1530-820	
1 TCAS II Computer	 	Honeywell	 	7517900-10003	
2 ATC Mode S Transponder	 	Collins	 	822-1338-021	
1 TCAS Control Panel	 	THALES AVIONICS	 	C12404AB02	
2 VOR/Marker Beacon Receive	 	Collins	 	822-0297-020	
2 DME Interrogator	 	Collins	 	822-0329-020	
2 Multipurpose CDU	 	HONEYWELL	 	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	 	HONEYWELL	 	C13042BA01	
1 EGPWS Computer	 	Allied Signal	 	965-1676-002	
 
- 95 -

			
EPAC Ref.	  	Title	
		
	  	Introduction of A319-100 Standard Specification at Issue	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats – all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take – off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62./MZW 58.5 T	
03.20.400/02	  	Design weights increase to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier – English below vertical and second language Horiz.) – Airsigna	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine – bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steeringmarkers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external marking	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation – BFE	
	  	Installation of one HF system – COLLINS 900 – DIGITAL ANTENNA	
23.11.115/14	  	COUPLER – BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit has microphone alternate equipment – Holmberg	
 
- 96 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system- PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) – PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout (144 pax – DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment – full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double – sided adhesive tap	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change1)	
25.35.132/02	  	Installation of non-electric galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	

EPAC Ref.	  	Title	
		
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exiting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	With anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
1.60.120/01	  	Installation of LCD EIS2 – Thales Avionic	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signalled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
 
- 97 -

			
EPAC Ref.	  	Title	
		
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACAR	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	

EPAC Ref.	  	Title	
		
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Window	
56.10.102/02	  	Cockpit a alternate front windows – SAINT-GOBAIN SULLY	
 
- 98 -

			
EPAC Ref.	  	Title	
		
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engine	
77.00.119/XX	  	Engines selection	
 
- 99 -

Schedule 7
[INTENTIONALLY LEFT BLANK]
 
- 100 -

Schedule 8
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 101 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 102 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 103 -

Schedule 9
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 104 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 105 -

Schedule 11
AIRCRAFT DOCUMENTS AT REDELIVERY
Part A
Manuals

1.	 	List of manuals	
		
Basic:	 		
		
1.	 	Airplane Flight Manual	
		
2.	 	Flight crew operating Manual	
		
3.	 	Trim Sheet	
		
4.	 	Quick Reference Handbook	
		
5.	 	Weight and Balance Manual	
		
6.	 	Performance Engineer’s Programs	
		
7.	 	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
		
8.	 	Performance Programs Manual	
		
9.	 	Aircraft Maintenance Manual	
		
10.	 	Wiring Diagram Manual	
		
11.	 	Power Plant Build-up Manual	
		
12.	 	Engine Brochures	
		
13.	 	APU Log Book (with manufacturer delivery documents)	
		
14.	 	Illustrated Parts Catalogue	
		
15.	 	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
		
16.	 	Structural Repair Manual	
		
17.	 	Nacelle Structural Repair Manual	
		
18.	 	Engine Maintenance Manual	
		
19.	 	Illustrated Parts catalogue (power-plant)	
		
20.	 	Master Minimum Equipment List	
 
- 106 -

			
		
21.	 	Maintenance Planning Document	
		
22.	 	Component Maintenance Manuals (Vendor and Manufacturer)	
		
23.	 	Engineering and Tooling Drawings	
		
24.	 	Maintenance Facility Planning	
		
25.	 	Support Equipment Summary	
		
26.	 	Tool and Equipment bulletins	
		
27.	 	Tools and equipment Drawings	
		
28.	 	Tools and equipment index	
		
29.	 	Illustrated tools and Equipment Manual	
		
30.	 	Technical Publications Combined Index	
		
31.	 	Trouble shooting Manual	
		
32.	 	Component Documentation Status	
		
33.	 	Component Evolution List	
		
34.	 	Cable Fabrication Manual	
		
35.	 	Standards Manual	
		
36.	 	Parts usage	
		
37.	 	Schedule (drawing Nomenclature)	
		
38.	 	Process and Materials Specification	
		
39.	 	Installation and Assembly Drawings	
		
40.	 	Airplane Characteristics for Airport Planning	
		
41.	 	ATA breakdown index	
		
42.	 	CADETS (technical Publications Training)	
		
43.	 	Aircraft Recovery Manual	
		
44.	 	Crash Crew Chart	
		
45.	 	Cargo Loading system Manual	
		
46.	 	List of applicable publications	
 
- 107 -

			
		
47.	 	List of radio active and hazardous elements	
		
48.	 	Livestock transportation Manual	
		
49.	 	Service Bulletins	
		
50.	 	Service information letters	
		
51.	 	Supplier Product Support Agreements	
		
52.	 	Transportability Manual	
		
53.	 	Vendor Information Manual	
		
54.	 	Vendor Information Manual for Ground Support Equipment	
		
55.	 	Maintenance Review Board	
		
56.	 	Non Destructive Testing Manual	
		
57.	 	Power Plant Build up Manual	
		
58.	 	Aircraft Schematics Manual	
		
59.	 	Aircraft Wiring Lists	
		
60.	 	Aircraft Wiring Manual	
		
61.	 	Component Location Manual	
		
62.	 	Consumable Material List	
		
63.	 	Duct Repair Manual	
		
64.	 	Electrical Load Analysis	
		
65.	 	Electrical Standards Practices Manual	
		
66.	 	Electrical Standards Practices Booklet	
		
67.	 	Fuel Pipe Repair Manual	
		
68.	 	Maintenance Planning Task Cards	
 
- 108 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 109 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 110 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 111 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 112 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 113 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 114 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 115 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 116 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 117 -

Schedule 12
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 118 -

Schedule 13
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 119 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 120 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 121 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 122 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 123 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 124 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 125 -

Schedule 14
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 127 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 129 -

Schedule 15
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 130 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 131 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 132 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.15
EXECUTION VERSION
Dated as of March 12, 2007
RBS AEROSPACE LIMITED
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

 
AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A319-133 aircraft
bearing manufacturer’s serial
number 3253

 

TABLE OF CONTENTS

 	  	Page	 	
		
1.           Interpretation	  	 	1	  	
		
2.           Agreement to Lease	  	 	1	  	
		
3.           Delivery	  	 	1	  	
		
4.           Expiry Date	  	 	3	  	
		
5.           Rent	  	 	3	  	
		
6.           Deposit	  	 	5	  	
		
7.           Maintenance Rent	  	 	9	  	
		
8.           Payments	  	 	10	  	
		
9.           Lessor Covenants	  	 	13	  	
		
10.        Lessee Covenants	  	 	14	  	
		
11.        Possession and Sub-Leasing	  	 	20	  	
		
12.        Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	23	  	
		
13.        Replacement and Interchange of Engines and Parts	  	 	26	  	
		
14.        Manufacturer’s Warranties	  	 	30	  	
		
15.        Indemnities	  	 	32	  	
		
16.        Insurance	  	 	33	  	
		
17.        Loss, Damage and Requisition	  	 	36	  	
		
18.        Disclaimers	  	 	38	  	
		
19.        Redelivery	  	 	40	  	
		
20.        Events of Default	  	 	41	  	
		
21.        Taxation	  	 	49	  	
		
22.        Assignment and Transfer	  	 	55	  	
		
23.        Miscellaneous Provisions	  	 	56	  	
		
24.        Notices	  	 	60	  	
		
25.        Governing Law Jurisdiction and Waiver of Jury Trial	  	 	61	  	
		
26.        Owner Participant and Lessee Undertakings:	  	 	65	  	
		
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	66	  	
		
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	81	  	
		
Schedule 3 CONDITIONS PRECEDENT	  	 	85	  	
		
Schedule 4 *****	  	 	89	  	
		
Schedule 5 INSURANCE REQUIREMENTS	  	 	90	  	
		
Schedule 6 *****	  	 	94	  	
		
Schedule 7 PRE-DELIVERY PROCEDURE	  	 	100	  	
		
Schedule 8 *****	  	 	101	  	
		
*****	  	 	102	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- i -

TABLE OF CONTENTS
(continued)

 	  	Page	 	
		
*****	  	 	103	  	
		
Schedule 9 *****	  	 	104	  	
		
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	105	  	
		
Schedule 11 *****	  	 	106	  	
		
*****	  	 	109	  	
		
*****	  	 	110	  	
		
Schedule 12 *****	  	 	118	  	
		
Schedule 13 *****	  	 	119	  	
		
*****	  	 	120	  	
		
*****	  	 	121	  	
		
Schedule 14 *****	  	 	128	  	
		
Schedule 15 *****	  	 	130	  	
		
*****	  	 	131	  	
		
*****	  	 	132	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- ii -

THIS AGREEMENT is made as of March 12, 2007
Between:
(1) RBS AEROSPACE LIMITED, a company incorporated under the laws of Ireland, whose registered office is at 3 rd Floor, 1 George’s Quay Plaza, George’s Quay, Dublin 2, Ireland ( Lessor ); and
( 2 ) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of Mexico, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ).
It is agreed as follows:
 
1.	Interpretation	
Definitions
 
1.1	In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).	
Construction
 
1.2	The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.	
Clauses and Schedules
 
1.3	References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.	
 
2.	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3.	Delivery	
Delivery
 
3.1	Subject to satisfaction (or waiver by Lessor in its sole discretion) of all Lessee Conditions Precedent, Lessor shall deliver and Lessee shall accept the Aircraft on lease immediately following delivery of, and transfer of title to, the Aircraft by Airbus to Lessor as evidenced by delivery of the Bill of Sale. The Aircraft shall be delivered to and accepted by Lessee at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance shall be absolute, unconditional and irrevocable.	

3.2	Lessor and Lessee acknowledge that the Lessor has appointed Lessee, pursuant to the Aircraft Purchase Agreement Assignment, as Lessor’s agent for the purposes of accepting delivery of the Aircraft from Airbus under the Aircraft Purchase Agreement Assignment. Lessee acknowledges that Lessor shall not execute and deliver the Aircraft Purchase Agreement Assignment, and Lessee agrees that it will not so accept delivery of the Aircraft from Airbus, unless and until Lessor notifies Lessee that the Lessee Conditions Precedent have been satisfied or waived. Lessee hereby agrees that in the event delivery of the Aircraft shall be accepted from Airbus under the Aircraft Purchase Agreement Assignment by Lessee, as Lessor’s agent pursuant to such appointment by Lessor, such acceptance of delivery by Lessee on behalf of Lessor shall, without further act, irrevocably constitute absolute and unconditional acceptance by Lessee of the Aircraft for all purposes of this Agreement (including for the avoidance of doubt, satisfaction (or waiver, provided the terms of any such waiver are acceptable to Lessor) of the conditions precedent set forth in paragraph 3 of Schedule 3), and upon such acceptance of the Aircraft, the Lessee will execute and deliver to the Lessor the Acceptance Certificate.	
Delayed Delivery
 
3.3	If owing to:	
 
 	(a)	any seller or manufacturer of the Aircraft delaying in the delivery of, or failing to deliver, the Aircraft to Lessor for any reason (other than because of any default of Lessor in the payment of the purchase price of the Aircraft, or any failure of Lessor to provide notice pursuant to clause 3.2 above, when obligated to do so as provided therein when all Lessee Conditions Precedent have been satisfied) whether or not in circumstances entitling that seller or manufacturer to terminate that agreement; or	
 
 	(b)	the Aircraft Purchase Agreement Assignment terminating with respect to the Aircraft prior to delivery of the Aircraft (other than because of any default of Lessor in the payment of the purchase price of the Aircraft when all Lessee Conditions Precedent have been satisfied); or	
 
 	(c)	any delay due to a Delayed Delivery Event or otherwise which is beyond the reasonable control of Lessor; or	
 
 	(d)	any Lessee Condition Precedent not having been fulfilled,	
Lessor delays in the Delivery of, or fails to deliver, the Aircraft under this Agreement then:
 
 	(a)	Lessor will not be responsible for any Loss, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by Lessee;	
 
 	(b)	subject to clause 3.3(c) and (d) below and to clause 20, Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor, on the grounds of any such delay;	
 
 	(c)	in the case of termination of the Aircraft Purchase Agreement Assignment in respect of the Aircraft, Lessor or Lessee may at any time after such termination terminate this Agreement;	
 
 	(d)	if the Delivery is delayed for a period of more than 60 days after the end of the Scheduled Delivery Month by reason of the occurrence of any of the events referred to in clause 3.3	
 
- 2 -

 	above, Lessor may terminate this Agreement by giving notice in writing to Lessee within ten (10) days after the expiration of such period (or, if applicable after the expiration of such other period as Lessor and Lessee may agree);	
Upon any termination pursuant to this clause 3.3 ( Delayed Delivery ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:
 
 	(i)	pursuant to clause 8.4 ( Breakage Costs Indemnity ), clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality ); and	
 
 	(ii)	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid Rent received by Lessor on or prior to the date of such termination, or, if applicable, return the Letter of Credit.	
Risk
 
3.4	Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.	
 
4.	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
5.	Rent	
Rent Periods
 
5.1       (a)	The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	
 
- 3 -

 	(b)	The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
 
 	(c)	Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date
 
5.2       (a)	Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
 
 	(b)	If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent
 
5.3       (a)	Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 (Rent), the Term shall be divided into successive periods (each a Relevant Period ).	
 
 	(b)	The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
 
 	(c)	Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
 
 	(d)	Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
One Time Option to Fix Rent Prior to Delivery
 
5.4       (a)	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 4 -

 	2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
 
 	(b)	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
 
 	(c)	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 ( Rent Calculation ) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
 
 	(d)	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
6.	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before March 30, 2007; and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 5 -

thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
 
6.2	No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).	
Concerning the Deposit
 
6.3       (a)	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
 	(b)	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 ( Set-off ) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
 
- 6 -

Provision of Letter of Credit
 
6.4	Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:	
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit
 
6.5       (a)	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
- 7 -

 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
- 8 -

 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7.	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
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8.	Payments	
Account for Lessee Payments
 
8.1	All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:	

Bank:	  	The Royal Bank of Scotland PLC	
	  	Financial Institutions	
	  	PO Box 39952	
	  	2.  1 / 2 Devonshire Square	
	  	London	
	  	EC2M 4XJ	
		
Account No:	  	*****	
		
Account Name:	  	*****	
		
Sort Code:	  	*****	
		
IBAN BIC/Swift Code:	  	*****	
		
IBAN:	  	*****	
		
Correspondent Bank:	  	American Express International Bank	
	  	23rd Floor	
	  	American Express Tower	
	  	200 Vesey Street	
	  	New York City	
	  	NY 10285-2300	
	  	USA	
		
Swift Code:	  	*****	
		
ABA:	  	*****	
Default Interest
 
8.2	If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.	
Absolute Obligations
 
8.3       (a)	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 10 -

 	Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
 
 	(i)	any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
 
8.4	Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:	
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****.	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Currency Indemnity
 
8.5       (a)	If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.	
Application of Payments by Lessor
 
8.6	If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.	
Lessor’s Determination of Amounts Due
 
8.7	Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.	
Business Day Convention
 
8.8	If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.	
 
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9.	Lessor Covenants	
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
 
9.2	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:	
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
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10.	Lessee Covenants	
Performance
 
10.1     (a)	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
 	(b)	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
 
 	(c)	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
 
 	(d)	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information — General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
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 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
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 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect; all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth	
 
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 	of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such information as Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft ,unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
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 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
Registration and Protection
 
10.5		
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, the Financing Parties; if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
 
 	    	“THIS [AIRCRAFT/ENGINE] IS OWNED BY RBS AEROSPACE LIMITED AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF RBS AEROSPACE LIMITED”;	
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
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 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
Recognition of Rights
 
10.7	Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.	
 
11.	Possession and Sub-Leasing	
Possession
 
11.1	Lessee shall not, without the prior written consent of Lessor, sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:	
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
 
11.2	Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:	
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
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 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
 
11.3		
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and Insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
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 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 (Insurance ) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss , Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol, if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
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 	(b)	Lessor shall (if necessary in connection with such sub-leasing (at no cost to Lessor) co-operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol, if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co-operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12.	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
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 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection
 
12.3     (a)	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be	
 
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 	continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	
 
 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
 
12.4	Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:	
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
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 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
Maintenance Program
 
12.5	Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided , however , that such request shall be made promptly following receipt of any notice of such change from Lessee.	
Engine Thrust and Operational Derate
 
12.6     (a)	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
 
 	(b)	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13.	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts
 
13.1     (a)	Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
 
 	(b)	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
 
 	(c)	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
 
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 	(d)	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part   (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 ( Recognition of Rights ) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
 
13.3	Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:	
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
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 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
 
13.4	Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:	
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
 
13.5     (a)	Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:	
 
 	(i)	no Default has occurred and is continuing;	
 
 	(ii)	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
 
 	(iii)	Lessee owns or leases the Other Aircraft and has operational control of it;	
 
 	(iv)	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
 
 	(v)	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security	
 
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 	Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
 
 	(vi)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
 
13.7     (a)	Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:	
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
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 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
 
13.8	Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).	
 
14.	Manufacturer’s Warranties	
Use of Warranties
 
14.1     (a)	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
 
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 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims
 
14.2     (a)	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or any reimbursement for such remedy.	
 
 	(b)	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 ( Proceeds ) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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15.	Indemnities	
General
 
15.1	Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):	
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part (either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
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 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
 
15.2	Lessor, or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).	
Contest
 
15.3	If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:	
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
 
15.4	The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.	
 
16.	Insurance	
Insurances
 
16.1     (a)	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
 
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 	(b)	The Insurances shall be effected either:	
 
 	(i)	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
 
 	(ii)	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
 
16.2	Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.	
Change
 
16.3     (a)	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
 
 	(b)	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2), Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B (as at the date hereof). In the event that any provision of AVN67B (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
 
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Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
 
16.5	Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:	
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
 
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Failure to Insure
 
16.6	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
Continuing Insurance for Indemnity
 
16.7	Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.	
 
17.	Loss, Damage and Requisition	
Total Loss prior to Delivery
 
17.1	If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:	
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery
 
17.2     (a)	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	ninety (90) days after the Total Loss Date; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
 
 	(b)	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse,	
 
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 	representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
 
 	(c)	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
 
 	(d)	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition
 
17.3     (a)	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
 
 	(i)	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
 
 	(ii)	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
 
 	(iii)	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
 
 	(iv)	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
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18.	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 ( EXCLUSION ) TO 18.4 ( CONFIRMATION ) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
 
18.1	THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:	
 
 	(a)	LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THIS AGREEMENT; AND	
 
 	(b)	LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
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 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
 
18.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 ( EXCLUSION ).	
Disclaimer of Consequential Damages
 
18.3	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.	
No Duties
 
18.4	LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.	
Confirmation
 
18.5	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.	
 
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19.	Redelivery	
Redelivery
 
19.1     (a)	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
 	(b)	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
 
 	(c)	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
 
 	(d)	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
 
19.2	If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:	
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) from the ***** day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
 
19.3	Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft notwithstanding non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.	
Export Documents
 
19.4	Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.	
Acknowledgement
 
19.5	Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.	
 
20.	Events of Default	
Events
 
20.1	Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:	
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
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 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default, or termination event caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
 
 	    	is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii) above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
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 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
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 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 ( Redelivery ); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (q) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** for the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
 
 	(t)	Registration Amendments : without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
Lessor’s Rights
 
20.2     (a)	Lessor Rights and Remedies : If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
 
 	(i)	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(ii)	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
 
 	(iii)	either:	
 
 	(y)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
 
 	(z)	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as	
 
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 	being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
 
 	    	The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.	
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without	
 
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 	duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referenced to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
 
20.3	If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.	
 
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21.	Taxation	
Gross-up
 
21.1     (a)	All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	
 
 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor, will be equal to the amount that Lessor would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Lessor in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Lessor in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Lessor shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Lessor in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Lessor shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor; or	
 
 	(ii)	oblige Lessor to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant to Pay Taxes
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof, is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ).
Tax Indemnity
 
21.3     (a)	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
- 50 -

 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor by any Government Entity in Ireland or any jurisdiction where Lessor has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor of any of its right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax
 
21.4     (a)	Without limiting clause 21.3 above, Lessee shall pay to Lessor (or, if permitted by applicable Law and if requested by Lessor, Lessee shall pay to the relevant tax authority for the account of Lessor):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax
 
21.5     (a)	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that Lessor is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor, if available, in respect of payment of any such VAT.	
 
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Information regarding Taxes
 
21.6     (a)	If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.	
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments
 
21.7     (a)	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
Notification
 
21.8	Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however ,	
 
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 	the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.	
Information
 
21.9	Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 54 -

Assignment and Transfer
By Lessee
 
21.10	LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.	
Lessor Transfer
 
21.11   (a)	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify. Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer
 
21.12   (a)	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
 	(d)	*****	
*****
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
22.	Miscellaneous Provisions	
Rights Cumulative, Waivers
 
22.1	The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
Delegation
 
22.2	Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.	
Expenses
 
22.3	Lessee shall pay to Lessor on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor’s rights or remedies) incurred or payable by Lessor in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by Lessee with this Agreement (but in the case of such monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor’s rights or remedies under this Agreement (including in connection with any Event of Default).	
 
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Set-off
 
22.4     (a)	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
 
22.5	The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.	
Entire Agreement
 
22.6	This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.	
Rights of Third Parties
 
22.7	All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement.	
 
22.8	Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.	
 
22.9	All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.	
 
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Counterparts
 
22.10	This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.	
Language
 
22.11	All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.	
Confidentiality
 
22.12	This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non-public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement ( provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.	
Invalidity of any Provision
 
22.13	If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
Survival
 
22.14	All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.	
Further Assurance
 
22.15   (a)	Each of the parties agrees to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
 
 	(b)	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
 
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No Brokers
 
22.16	Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).	
Chattel Paper
 
22.17	To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.	
True Lease
 
22.18	The parties intend and agree that this Agreement:	
 
 	(a)	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
 
 	(b)	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for Purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
 
 	(c)	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
Lessee shall not file a tax return that is inconsistent with the provisions of this clause.
Know Your Customer/OFAC Compliance
 
22.19	Anti-Terrorism Law:	
 
 	(a)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
 
 	(b)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are any of the following:	
 
 	(i)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
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 	(ii)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(iii)	a person with which Lessor is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(iv)	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
 
 	(v)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
 
 	(c)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
22.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
23.	Notices	
 
23.1	Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:	
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day), provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.	
 
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23.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:

Address:	  	RBS Aerospace Limited	
	  	3rd Floor	
	  	1 George’s Quay Plaza	
	  	George’s Quay	
	  	Dublin 2	
	  	Ireland	
		
Attention:	  	Head of Transaction Management	
		
Facsimile:	  	+ 353 1 448 3390	
To Lessee at:

Address:	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	Mexico D.F. 01012	
	  	Mexico	
		
Attention:	  	General Counsel	
		
Facsimile:	  	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
24.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
 
24.1	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.	
 
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Jurisdiction
 
24.2	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
Process Agents
 
24.3     (a)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
 
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Waiver of Objections
 
24.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
 
24.5	This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.	
Waiver of Sovereign Immunity and Other Defenses
 
24.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
 
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Waiver of Jury Trial
 
24.7	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.	
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.

SIGNED on behalf of:	
RBS AEROSPACE LIMITED	
		
Name:	 	/s/ David Swan	
		
Title:	 	Attorney-in-fact	
	
SIGNED on behalf of:	
CONCESIONARIA VUELA	
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Batik Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates are a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement dated as of October 28, 2005 between Parent and Airbus insofar as it relates to the Aircraft;
Aircraft Purchase Agreement Assignment means the aircraft purchase agreement assignment in form and substance acceptable to Lessor (acting reasonably) between Parent (as assignor) and Lessor (or such other person notified to Lessee as purchaser of the Aircraft) (as assignee) in relation to the Aircraft Purchase Agreement;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a
 
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removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means all costs, losses, premiums, penalties or out-of-pocket expenses incurred or suffered by Lessor, any Affiliate of Lessor or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or its Affiliates or otherwise in connection with the financing of Lessor’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****;
Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft;	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor);	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor);	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft;	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****;
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars , $ and US$ mean the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed;
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change );
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions );
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
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 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days, or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor who provides finance to Lessor in connection with Lessor’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor to Lessee as providing finance to Lessor in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate, organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
 
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Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means *****, or a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, *****, or (ii) such other base agreed by Lessor; 
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authorities and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, any Affiliate of Lessor or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or its Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
 
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Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Master Agreement means the Master Agreement dated as of March 12, 2007 between Parent, Lessor and Lessee relating to the purchase and leasing of the Aircraft hereunder and the aircraft covered by certain Other Agreements;
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income;
Mexico means the United Mexican States;
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Master Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to A319 aircraft bearing manufacturer’s serial numbers 3045, 3069 and 3253, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor) and Lessee (or any Affiliate of Lessee);
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Parent means the Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
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 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees;	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date;	
 
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Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutic Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
 
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Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date in the Scheduled Delivery Month notified by Airbus or Parent to Lessor, at least 5 Business Days in advance thereof, as the Scheduled Delivery Date under the Aircraft Purchase Agreement;
Scheduled Delivery Month means October, 2007;
Scheduled Expiry Date means the day immediately before the day falling 114 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent. of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
Tax Indemnitee means Lessor, its Affiliates and each Financing Party, if any;
 
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Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss; and	
 
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UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage
 
1.2      (a)	References in this Agreement to:	
 
 	(i)	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
 
 	(ii)	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
 
 	(iii)	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
 
 	(iv)	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
 
 	(v)	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
 
 	(vi)	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
 	(b)	Headings are for ease of reference only.	
 
 	(c)	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g)	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
- 82 -

 	(p)	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law, including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor represents and warrants to Lessee on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor is a limited liability company duly incorporated and validly existing and in good standing under the laws of Ireland;	
 
 	(b)	Power and Authority : Lessor has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement, has taken all necessary corporate action to authorize the entry into, performance and delivery of, this Agreement;	
 
 	(c)	Legal validity : this Agreement has been duly executed and delivered by Lessor and constitutes legal, valid and binding obligations of Lessor, enforceable against Lessor in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is binding upon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 83 -

3.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
- 84 -

Schedule 3
CONDITIONS PRECEDENT
Conditions Precedent to be satisfied by the Lessee
 
1.	Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.	
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
- 85 -

Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
- 86 -

 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexicali Asset Tax : evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ), in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in the condition required under the Aircraft Purchase Agreement and Schedule 6 hereof; (ii) Lessor shall have received (x) a certified copy of the full export certificate of airworthiness in relation	
 
- 87 -

 	to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Master Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement Assignment; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents and receipt by Lessor of the delivery documents under the Master Agreement, including an Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions; (vi) neither Lessee nor Parent shall have entered into any agreement with the Manufacturer which does, or would, substantially amend, modify, rescind, cancel or terminate the Aircraft Purchase Agreement in respect of the Aircraft without the prior written consent of Lessor; and (vii) the Delivery Date shall be occurring within 60 days of the last day of the Scheduled Delivery Month.	
 
2.	Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.	
 
3.	Conditions Precedent to be Satisfied by Lessor : Lessee’s obligations to accept delivery and lease the Aircraft from Lessor are subject to receipt by Lessee from Lessor on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:	
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Lessor; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Lessor approving the terms of, and the transactions contemplated by, this Agreement, resolving that Lessor enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement.	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Lessor’s status as a resident of Ireland for tax purposes.	
 
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Schedule 4
*****

 	  	*****	 	  	*****	 	  	*****	 	
Period 1	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 2	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 3	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 4	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 5	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 6	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 7	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 8	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 9	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 10	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 11	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 12	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 13	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 14	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 15	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 16	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 17	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 18	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 19	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 89 -

Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(c)	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
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 	(f)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated March 12, 2007 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 92 -

 	(j)	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 93 -

Schedule 6
DESCRIPTION OF AIRCRAFT
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications:

Specification	  		
		
General Model	  	A319-133	
Engine Type / SLST	  	V2527M-A5, 26,570 lbs	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #	  	3253	
Year Built	  	2007	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
Max Taxi	  	75,900 kgs	
Max Take Off	  	75,500 kgs	
Max Zero Fuel	  	58,500 kgs	
Max Landing	  	62,500 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration, F / Y	  	144 Y/C	
CONFIGURATION Total Seats	  	144	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lavs are vacuum type	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. Galley 1 and mini-Galley S3 in	
	  	aft. Bulkhead, between two lavatories	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4”	
	  	retractable LCD monitors	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
- 94 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	 	Equipment Supplier	 	Part Number	
			
3 Radio Tuning Panels	 	THALES AVIONICS	 	C12848CA01	
2 HFS-900 HF Data Radios	 	Collins	 	822-0330-020	
3 VHF-900 VHF Data Radio	 	Collins	 	822-1047-030	
1 SELCAL Control Panel	 	TEAM	 	BC2065C	
1 SELCAL Decoder	 	Coltech	 	1200008-000	
1 Communications Mgmt Unit	 	N/A	 	N/A	
1 CVR (2 hour)	 	Allied Signal Avionic	 	980-6022-001	
1 DFDAU	 	SAGEM	 	ED48A100	
1 DFDR	 	Honeywell	 	980-4700-042	
1 Accelerometer	 	AMETEK AEROSPACE	 	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	 	Collins	 	22-1152-121	
2 Low Range Radio Altimeter	 	Collins	 	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	 	Collins	 	822-1710-202	
1 Weather Radar Control Panel	 	Collins	 	622-1530-820	
1 TCAS II Computer	 	Honeywell	 	7517900-10003	
2 ATC Mode S Transponder	 	Collins	 	822-1338-021	
1 TCAS Control Panel	 	THALES AVIONICS	 	C12404AB02	
2 VOR/Marker Beacon Receive	 	Collins	 	822-0297-020	
2 DME Interrogator	 	Collins	 	822-0329-020	
2 Multipurpose CDU	 	HONEYWELL	 	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	 	HONEYWELL	 	C13042BA01	
1 EGPWS Computer	 	Allied Signal	 	965-1676-002	
 
- 95 -

			
EPAC Ref.	  	Title	
		
	  	Introduction of A319-100 Standard Specification at Issue	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats – all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take – off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62./MZW 58.5 T	
03.20.400/02	  	Design weights increase to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier – English below vertical and second language Horiz.) – Airsigna	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine – bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steeringmarkers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external marking	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation – BFE	
	  	Installation of one HF system – COLLINS 900 – DIGITAL ANTENNA	
23.11.115/14	  	COUPLER – BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit has microphone alternate equipment – Holmberg	
 
- 96 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system – PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) – PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout (144 pax – DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment – full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double – sided adhesive tap	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change1)	
25.35.132/02	  	Installation of non-electric galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	

EPAC Ref.	  	Title	
		
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exiting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	With anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
1.60.120/01	  	Installation of LCD EIS2 – Thales Avionic	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signalled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
 
- 97 -

			
EPAC Ref.	  	Title	
		
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACAR	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	

EPAC Ref.	  	Title	
		
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Window	
56.10.102/02	  	Cockpit a alternate front windows – SAINT-GOBAIN SULLY	
 
- 98 -

			
EPAC Ref.	  	Title	
		
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engine	
77.00.119/XX	  	Engines selection	
 
- 99 -

Schedule 7
[INTENTIONALLY LEFT BLANK]
 
- 100 -

Schedule 8
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 101 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 102 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 103 -

Schedule 9
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 104 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 105 -

Schedule 11
AIRCRAFT DOCUMENTS AT REDELIVERY
Part A
Manuals
 
1.	List of manuals	
Basic:
 
1.	Airplane Flight Manual	
 
2.	Flight crew operating Manual	
 
3.	Trim Sheet	
 
4.	Quick Reference Handbook	
 
5.	Weight and Balance Manual	
 
6.	Performance Engineer’s Programs	
 
7.	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
 
8.	Performance Programs Manual	
 
9.	Aircraft Maintenance Manual	
 
10.	Wiring Diagram Manual	
 
11.	Power Plant Build-up Manual	
 
12.	Engine Brochures	
 
13.	APU Log Book (with manufacturer delivery documents)	
 
14.	Illustrated Parts Catalogue	
 
15.	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
 
16.	Structural Repair Manual	
 
17.	Nacelle Structural Repair Manual	
 
18.	Engine Maintenance Manual	
 
19.	Illustrated Parts catalogue (power-plant)	
 
20.	Master Minimum Equipment List	
 
- 106 -

21.	Maintenance Planning Document	
 
22.	Component Maintenance Manuals (Vendor and Manufacturer)	
 
23.	Engineering and Tooling Drawings	
 
24.	Maintenance Facility Planning	
 
25.	Support Equipment Summary	
 
26.	Tool and Equipment bulletins	
 
27.	Tools and equipment Drawings	
 
28.	Tools and equipment index	
 
29.	Illustrated tools and Equipment Manual	
 
30.	Technical Publications Combined Index	
 
31.	Trouble shooting Manual	
 
32.	Component Documentation Status	
 
33.	Component Evolution List	
 
34.	Cable Fabrication Manual	
 
35.	Standards Manual	
 
36.	Parts usage	
 
37.	Schedule (drawing Nomenclature)	
 
38.	Process and Materials Specification	
 
39.	Installation and Assembly Drawings	
 
40.	Airplane Characteristics for Airport Planning	
 
41.	ATA breakdown index	
 
42.	CADETS (technical Publications Training)	
 
43.	Aircraft Recovery Manual	
 
44.	Crash Crew Chart	
 
45.	Cargo Loading system Manual	
 
46.	List of applicable publications	
 
- 107 -

47.	List of radio active and hazardous elements	
 
48.	Livestock transportation Manual	
 
49.	Service Bulletins	
 
50.	Service information letters	
 
51.	Supplier Product Support Agreements	
 
52.	Transportability Manual	
 
53.	Vendor Information Manual	
 
54.	Vendor Information Manual for Ground Support Equipment	
 
55.	Maintenance Review Board	
 
56.	Non Destructive Testing Manual	
 
57.	Power Plant Build up Manual	
 
58.	Aircraft Schematics Manual	
 
59.	Aircraft Wiring Lists	
 
60.	Aircraft Wiring Manual	
 
61.	Component Location Manual	
 
62.	Consumable Material List	
 
63.	Duct Repair Manual	
 
64.	Electrical Load Analysis	
 
65.	Electrical Standards Practices Manual	
 
66.	Electrical Standards Practices Booklet	
 
67.	Fuel Pipe Repair Manual	
 
68.	Maintenance Planning Task Cards	
 
- 108 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 109 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 110 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 111 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 112 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 113 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 114 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 115 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 116 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 117 -

Schedule 12
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 118 -

Schedule 13
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 119 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 120 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 121 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 122 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 123 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 124 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 125 -

Schedule 14
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 127 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 129 -

Schedule 15
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 130 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 131 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 132 -

EXECUTION VERSION
AIRCRAFT LEASE ASSIGNMENT AND AMENDMENT AGREEMENT (MSN 3253)
Dated as of September 17, 2007
RBS AEROSPACE LIMITED
as Existing Lessor
CONCESIONARIA VUELA COMPAÑIA de AVIACIÓN, S.A. DE C.V.
as Lessee
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
(not in its individual capacity except as expressly set forth herein but solely as owner trustee)
as New Lessor
and
RBS AEROSPACE LIMITED
as Owner Participant
in respect of
Aircraft Lease Agreement dated as of March 12, 2007
relating to One Airbus A319-113 Aircraft bearing manufacturer’s serial number 3253
and Registration No. XA-VOH
This Agreement has been executed in multiple counterparts; to the extent, if any, that this Agreement or the Assigned Lease Documents (as defined herein) constitute chattel paper (as defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in New Lessor’s right, title and interest in and to this Agreement or the Assigned Lease Documents may be perfected through the delivery or possession of any counterpart of this Agreement or the Assigned Lease Documents other than the counterpart of this Agreement that contains the original receipt executed by New Lessor.

INDEX

Clause	  	Page	 	
		
1.           INTERPRETATION	  	 	1	  	
		
2.           ASSIGNMENT AND ASSUMPTION	  	 	2	  	
		
3.           LEASE AMENDMENTS	  	 	3	  	
		
4.           REPRESENTATIONS AND WARRANTIES	  	 	5	  	
		
5.           EFFECTIVE TIME	  	 	7	  	
		
6.           MISCELLANEOUS	  	 	7	  	
 
- i -

THIS AIRCRAFT LEASE ASSIGNMENT AND AMENDMENT AGREEMENT (MSN 3253) is made as of September 17, 2007 (the “ Agreement ”) among (1) RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is IFSC House, ILFC, Dublin 1, Ireland (“ Existing Lessor ”; and “ Owner Participant ”); (2) Concesionaria Vuela Compañía de Aviación, SA. de C.V., a company ( sociedad anónima de capital variable ) incorporated under the laws of México, whose registered office is at Alfonso Napoles Gandara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México (“ Lessee ”); and (3) Wells Fargo Bank Northwest, National Association, a national banking association, not in its individual capacity except as expressly provided herein but solely as owner trustee under the Trust Agreement (as defined below) of 299 South Main Street, Salt Lake City, Utah 84111 (“ New Lessor ” or “ Owner Trustee ”).
WHEREAS, by an Aircraft Lease Agreement dated as of March 12, 2007 (the “ Lease ”), between Existing Lessor and Lessee, Existing Lessor agreed to lease and Lessee agreed to take on lease one Airbus A319-113 aircraft bearing manufacturer’s serial number 3253 and registration number XA-VOH and the engines attached thereto (the “ Aircraft ”) on the terms and subject to the conditions contained in the Lease.
WHEREAS, Existing Lessor has agreed to transfer title to the Aircraft in trust under the Trust Agreement, subject to the Lease, to New Lessor.
WHEREAS, the parties have agreed that New Lessor shall assume the rights, liabilities and obligations of Lessor under the Lease as assigned and amended hereby, and that Existing Lessor should be released from its liabilities and obligations under the Lease on the terms and conditions set out herein.
NOW THEREFORE in consideration of the provisions and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, IT IS AGREED as follows:
 
1.	INTERPRETATION	
 
1.1	Definitions : In this Agreement, the following expressions shall have the following meanings:	
“ Assigned Lease ” means the Lease as assigned, amended and supplemented by this Agreement.
“ Assignment of Lease ” has the meaning ascribed to it in Clause 2.1.
“ Effective Time ” has the meaning ascribed to it in Clause 5.
“ Trust Agreement ” means the Trust Agreement (MSN 3253) relating to the Aircraft dated on or prior to the date of this Agreement between the Owner Trustee and the Owner Participant.
 
1.2	Defined Terms In Lease Documents: Capitalized terms used, but not defined, in this Agreement shall have the respective meanings assigned to them in the Lease.	
 
1.3	Interpretation : In this Agreement, unless the context otherwise requires:	
 
 	(a)	a reference to a Clause or a Schedule is a reference to a clause of or schedule to this Agreement;	
 
 	(b)	a reference to a Person includes its successors and permitted assigns;	
 
 	(c)	words importing the plural shall include the singular, and vice versa; and	
 
 	(d)	headings are to be ignored in construing this Agreement.	

2.	ASSIGNMENT AND ASSUMPTION	
 
2.1	Assignments, Releases and Assumptions : As of and with effect from the Effective Time: 	
 
 	(a)	Existing Lessor assigns, transfers and conveys to New Lessor all of its rights, interests, obligations, duties and liabilities in, to, and under the Lease arising from and including the Effective Time;	
 
 	(b)	Existing Lessor agrees that, Lessee shall perform all of Lessee’s obligations, duties and liabilities in, to and under the Assigned Lease directly to and for the benefit of New Lessor and Owner Participant and not Existing Lessor;	
 
 	(c)	Subject to the provisions of clause 2.3 below, Lessee releases Existing Lessor, in its capacity as Existing Lessor, from Existing Lessor’s obligations, duties and liabilities under the Assigned Lease and Existing Lessor agrees that it, in its capacity as Existing Lessor, has no further rights against Lessee under the Assigned Lease;	
 
 	(d)	New Lessor accepts the assignment of the Lease and assumes the rights and obligations, duties and liabilities of “Lessor” under the Lease as assigned and amended hereunder arising from and including the Effective Time and to observe and perform the obligations of “Lessor” under the Assigned Lease arising from and including the Effective Time;	
 
 	(e)	Lessee accepts the assignment to and assumption by New Lessor of Existing Lessor’s rights and obligations, duties and liabilities under the Lease as assigned and amended hereunder and New Lessor’s agreement to observe and perform the obligations of Lessor under the Assigned Lease;	
 
 	(f)	Lessee acknowledges that its obligations, duties and liabilities under the Assigned Lease are to New Lessor for the benefit of Owner Participant;	
Each of the foregoing events and agreements is conditional upon the happening of the others, shall occur simultaneously and are collectively referred to as the “ Assignment of Lease ”.
 
2.2	Effect : Existing Lessor, New Lessor and Lessee accordingly agree that as of and with effect from the Effective Time, the Lease is assigned and amended and constitutes an agreement between New Lessor as lessor and Lessee as lessee on the terms and conditions of the Assigned Lease.	
 
2.3	Prior Rights and Remedies : Without prejudice to the rights of the New Lessor and Lessee under the Assigned Lease and in consideration of the payment by Existing Lessor to Lessee of ***** (receipt and sufficiency of which are hereby acknowledged), Lessee and Existing Lessor agree that Existing Lessor and Lessee shall each have the same rights and remedies against each other pursuant to this Clause 2.3 as each would have had under the Lease in respect of any losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if Existing Lessor had remained the “Lessor” under the Lease.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
2

3.	LEASE AMENDMENTS	
Amendments : As of, and with effect from, the Effective Time the Lease shall be (and is hereby) amended as follows:
 
 	(a)	Generally	
 
 	(i)	the expression “Lessor” shall be construed, wherever it appears in the Lease Documents, as if it referred to New Lessor in place of Existing Lessor;	
 
 	(ii)	the expression “this Agreement” shall be construed wherever it appears in the Lease Documents and wherever the context so permits as if it referred to the Assigned Lease;	
 
 	(b)	Lease	
 
 	(i)	the following new definitions shall be added to Schedule 1 of the Lease in the appropriate alphabetical order:	
“Owner Participant” means RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is at IFSC House, IFSC, Dublin 1, Ireland;
“Owner Trustee” means Wells Fargo Bank Northwest, National Association, a national banking association, it its capacity as Owner Trustee;
“Trust Estate” has the meaning set out in the Trust Agreement (MSN 3253) dated on or about September 17, 2007 between Owner Trustee and Owner Participant;
 
 	(ii)	the definition of “Indemnitees” in Schedule 1 of the Lease shall be amended to insert the words “Owner Participant,” after “Lessor,” and before “Financing Parties” in the first line and to add the word “trustees” after “servants,” and before “agents” on the last line;	
 
 	(iii)	the definition of “Tax Indemnitees” in Schedule 1 of the Lease shall be amended to insert the words “Owner Participant,” after “Lessor” and before “its Affiliates”;	
 
 	(iv)	the definition of “Other Agreements” in Schedule 1 of the Lease shall be amended by replacing the word “Lessor” with “Lessor or Owner Participant” in each place where “Lessor” appears in this definition;	
 
 	(v)	the definition of “Breakage Costs”, “Financing Parties” and “Lessor Liens” shall be amended to insert the words “or Owner Participant” after “Lessor” in each case where “Lessor” appears;	
 
3

 	(vi)	clause 10.6(a) of the Lease shall be deleted in its entirety and replaced by the following:	
affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:
“THIS [AIRCRAFT/ENGINE] IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE (“OWNER”) UNDER THAT CERTAIN TRUST AGREEMENT (MSN 3253), AND IS LEASED TO CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF OWNER.”
 
 	(vii)	the references in clause 21.1, clauses 21.3(b)(vi) and (c) and clauses 21.4, 21.5, 23.3, 23.19 and 23.20 to “Lessor” shall be amended to replace with the words “Lessor and/or Owner Participant” (without duplication);	
 
 	(viii)	the following shall be added as a new clause 23.21 to the Lease:	
“23.21 Statements of Owner Trustee: The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise, stated, are made and intended only for the purpose of binding the Trust Estate and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any offices, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided , however , that this clause 23.21 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided further , that nothing contained in this clause 23.21 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate. The foregoing provisions of this clause 23.21 shall survive the termination of this Agreement;
 
 	(ix)	Schedule 3 of the Lease is hereby amended by including the ‘`Owner Participant” as an addressee, in addition to Lessor, on all documents described therein to be addressed to Lessor;	
 
 	(x)	clause 3 of Schedule 3 of the Lease shall be amended by replacing the references to “Lessor” therein with “Owner Participant”; and	
 
 	(xi)	clause 2(a) of Schedule 5 of the Lease shall be amended by adding “Owner Participant” after “Lessor,” and before “Security Trustee.”	
 
4

4.	REPRESENTATIONS AND WARRANTIES	
 
4.1	Lessee Representations : Lessee hereby makes to New Lessor, Existing Lessor and Owner Participant the representations and warranties in Schedule 2 of the Lease as of the Effective Time as if New Lessor was the “Lessor” as defined in the Lease and as if references to “this Agreement” were to each of this Agreement and the Assigned Lease, Lessee further represents and warrants to New Lessor, Existing Lessor and Owner Participant as of the Effective Time	
 
 	(a)	the Assigned Lease is in full force and effect and has not been terminated by Lessee; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Lessee, has been duly executed and delivered by Lessee and constitutes the valid, legal and binding obligation of Lessee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
4.2	Owner Participant Representations and Warranties : Owner Participant hereby represents and warrants to Lessee and Owner Trustee that as of the Effective Time:	
 
 	(a)	Owner Participant is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Owner Participant, has been duly executed and delivered by Owner Participant and constitutes the valid, legal and binding obligation of Owner Participant enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
4.3	Existing Lessor Representation’s and Warranties : Existing Lessor hereby represents and warrants to Lessee, New Lessor and Owner Participant that as of the Effective Time:	
 
 	(a)	Existing Lessor is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Existing Lessor, has been duly executed and delivered by Existing Lessor and constitutes the valid, legal and binding obligation of Existing Lessor enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
4.4	Owner Trustee representations and warranties : The representations in Section 2 of Schedule 2 of the Lease is hereby deleted and, in leiu thereof, the Owner Trustee, in its individual capacity and (but only as provided in clause (b), (c) and (d) below to the extent that it relates to the Owner Trustee) as Owner Trustee, represents and warrants to Lessee, Existing Lessor and the Owner Participant that as of the Effective Time:	
 
 	(a)	the Owner Trustee, in its individual capacity, is a national banking association duly organised and validly existing in good standing under the laws of the United States, has full corporate power and authority to carry on its business as so conducted, has the corporate power and authority to execute and deliver the Trust Agreement, has the corporate power and authority to carry out the terms of the Trust Agreement and has the corporate power and authority to execute and deliver and to carry out the terms of this Agreement;	
 
5

 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Owner Trustee, has been duly executed and delivered by Owner Trustee and constitutes the valid, legal and binding obligation of Owner Trustee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
 	(c)	neither the execution and delivery by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of this Agreement or the Trust Agreement, nor the consummation by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or thereby, nor the compliance by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, with any of the terms and provisions hereof or thereof (A) requires or will require any approval of its stockholders, or approval or consent of any trustees or holders of any indebtedness or obligations of it, or (B) violates or will violate its articles of association or by-laws, or contravenes or will contravene any law, governmental rule or regulation of the United States of America or the State of Utah governing the trust powers of the Owner Trustee, or any judgment or order applicable to or binding on it; and	
 
 	(d)	no consent, approval, order or authorisation of giving of notice to, or registration with, or taking of any other action in respect of any Utah state or local governmental authority or agency or any United States federal governmental authority or agency regulating the trust powers of the Owner Trustee in its individual capacity is required for the execution and delivery of or the carrying out by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or by the Trust Agreement, other than any such consent, approval, order, authorisation registration, notice or action as has been duly obtained, given or taken.	
 
4.5	Owner Participant and Lessee Undertakings : (a) Owner Participant undertakes that:	
 
 	(i)	it agrees that provided no Event of Default has occurred and is continuing, neither Owner Participant nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Owner Participant of its or Lessor’s rights in accordance with the Assigned Lease will not however constitute such an interference;	
 
 	(ii)	it will comply with the last sentence of clause 22.3 of the Assigned Lease with respect to a transfer of its interest under the Trust Agreement; and	
 
 	(iii)	throughout the term of the Assigned Lease, it will cause New Lessor to pay and perform when due all of the obligations of New Lessor under the Assigned Lease (the “ New Lessor Obligations ”) and to the extent, if any, that New Lessor fails to pay or perform any New Lessor Obligation when due, Lessee shall have a direct right of action against Owner Participant for the payment or performance of such New Lessor Obligation.	
 
6

 	(b)	Lessee agrees with Owner Participant that;	
 
 	(i)	Owner Participant is an express third party beneficiary of all of the obligations and liabilities of the Lessee under and in conformity with the Assigned Lease, and all notices and communications given by Lessee to New Lessor shall also be given to Owner Participant; and	
 
 	(ii)	any approval, consent, waiver, amendment, supplement or other modification of the Assigned Lease shall require the written consent or instruction of the Owner Participant to be binding against the New Lessor.	
 
5.	EFFECTIVE TIME	
This Agreement shall become effective at the time of Delivery of the Aircraft to Lessee under the Assigned Lease (the “ Effective Time ”).
 
6.	MISCELLANEOUS	
 
6.1	Continuing Effect : Except as otherwise provided herein, the Assigned Lease and all provisions thereof shall continue in full force and effect, without modification, in accordance with its terms.	
 
6.2	Variation : The terms of this Agreement shall not be varied otherwise than in writing and duly executed by or on behalf of all the parties.	
 
6 .3	Governing Law : The provisions of clause 25 of the Lease as amended by this Agreement shall apply to this Agreement as if the same were set out in full herein.	
 
6.4	Notices : Every notice, request, demand or other communication under this Agreement shall be made in accordance with the notice provisions of the Assigned Lease Documents and, for such purposes, New Lessor’s contact details shall be:	

Wells Fargo Bank Northwest, National Association	
299 South Main Street	
Salt Lake City	
Utah 84111	
Attention:	  	Corporate Trust Department	
Telephone:	  	801 246 5630	
Fax:	  	801 246 5053	
with a copy to:

RBS Aerospace Limited	
IFSC House	
IFSC	
Dublin 1	
Ireland	
Attention:	  	Head of Transaction Management	
Facsimile:	  	+ 353 1 859-9230	
 
7

6.5	*****	
 
6.6	Counterparts : This Agreement may be executed in any number of counterparts and by any party hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which, when taken together, shall constitute one and the same agreement	
 
6.7	Owner Trustee : The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate (as such expression is defined in the Trust Agreement) and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them, provided however , that this Clause 6.6 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided , further , that nothing contained in this Clause 6.6 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate.	
 
6.8	This Agreement is an “Operative Document” as defined in the Lease.	

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
8

IN WITNESS WHEREOF , the parties hereto have caused this Aircraft Lease Assignment and Amendment Agreement (MSN 3253) to be duly executed by their respective Officers thereto duly authorized as of the day and year first herein written.

RBS AEROSPACE LIMITED	
		
By:	 	/s/ Córa McMenamin	
	 	Name:	 	Córa McMenamin	
	 	Title:	 	Attorney-in-Fact	

CONCESIONARIA VEULA COMPAÑIA DE AVIACIÓN, S.A. DE. C.V.	
		
By:	 	/s/ Andrés Fabre	
	 	Name:	 	Andrés Fabre	
	 	Title:	 	Attorney-in-Fact	

WELLS FARGO BANK NORTHWEST NATIONAL ASSOCIATION (not in its individual capacity, except as expressly set forth herein, but solely as owner trustee under the Trust Agreement)	
		
By:	 	/s/ Córa McMenamin	
	 	Name:	 	Córa McMenamin	
	 	Title:	 	Attorney-in-Fact	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.16
EXECUTION VERSION
Dated as of March 12, 2007
RBS AEROSPACE LIMITED
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

 
AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A319-133 aircraft
bearing manufacturer’s serial
number 3279

 

TABLE OF CONTENTS

 	  	Page	 	
		
1.           Interpretation	  	 	1	  	
		
2.           Agreement to Lease	  	 	1	  	
		
3.           Delivery	  	 	1	  	
		
4.           Expiry Date	  	 	3	  	
		
5.           Rent	  	 	3	  	
		
6.           Deposit	  	 	5	  	
		
7.           Maintenance Rent	  	 	9	  	
		
8.           Payments	  	 	10	  	
		
9.           Lessor Covenants	  	 	13	  	
		
10.        Lessee Covenants	  	 	14	  	
		
11.        Possession and Sub-Leasing	  	 	20	  	
		
12.        Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	23	  	
		
13.        Replacement and Interchange of Engines and Parts	  	 	26	  	
		
14.        Manufacturer’s Warranties	  	 	30	  	
		
15.        Indemnities	  	 	32	  	
		
16.        Insurance	  	 	33	  	
		
17.        Loss, Damage and Requisition	  	 	36	  	
		
18.        Disclaimers	  	 	38	  	
		
19.        Redelivery	  	 	40	  	
		
20.        Events of Default	  	 	41	  	
		
21.        Taxation	  	 	49	  	
		
22.        Assignment and Transfer	  	 	55	  	
		
23.        Miscellaneous Provisions	  	 	56	  	
		
24.        Notices	  	 	60	  	
		
25.        Governing Law Jurisdiction and Waiver of Jury Trial	  	 	61	  	
		
26.        Owner Participant and Lessee Undertakings:	  	 	65	  	
		
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	66	  	
		
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	81	  	
		
Schedule 3 CONDITIONS PRECEDENT	  	 	85	  	
		
Schedule 4 *****	  	 	89	  	
		
Schedule 5 INSURANCE REQUIREMENTS	  	 	90	  	
		
Schedule 6 *****	  	 	94	  	
		
Schedule 7 PRE-DELIVERY PROCEDURE	  	 	100	  	
		
Schedule 8 *****	  	 	101	  	
		
*****	  	 	102	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- i -

TABLE OF CONTENTS
(continued)

 	  	Page	 	
		
*****	  	 	103	  	
		
Schedule 9 *****	  	 	104	  	
		
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	105	  	
		
Schedule 11 *****	  	 	106	  	
		
*****	  	 	109	  	
		
*****	  	 	110	  	
		
Schedule 12 *****	  	 	118	  	
		
Schedule 13 *****	  	 	119	  	
		
*****	  	 	120	  	
		
*****	  	 	121	  	
		
Schedule 14 *****	  	 	126	  	
		
Schedule 15 *****	  	 	130	  	
		
*****	  	 	131	  	
		
*****	  	 	132	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- ii -

THIS AGREEMENT is made as of March 12, 2007
Between:
(1) RBS AEROSPACE LIMITED , a company incorporated under the laws of Ireland, whose registered office is at 3 rd Floor, 1 George’s Quay Plaza, George’s Quay, Dublin 2, Ireland ( Lessor ); and
( 2 ) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of Mexico, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ).
It is agreed as follows:
 
1.	Interpretation	
Definitions
 
1.1	In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).	
Construction
 
1.2	The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.	
Clauses and Schedules
 
1.3	References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.	
 
2.	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3.	Delivery	
Delivery
 
3.1	Subject to satisfaction (or waiver by Lessor in its sole discretion) of all Lessee Conditions Precedent, Lessor shall deliver and Lessee shall accept the Aircraft on lease immediately following delivery of, and transfer of title to, the Aircraft by Airbus to Lessor as evidenced by delivery of the Bill of Sale. The Aircraft shall be delivered to and accepted by Lessee at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance shall be absolute, unconditional and irrevocable.	

3.2	Lessor and Lessee acknowledge that the Lessor has appointed Lessee, pursuant to the Aircraft Purchase Agreement Assignment, as Lessor’s agent for the purposes of accepting delivery of the Aircraft from Airbus under the Aircraft Purchase Agreement Assignment. Lessee acknowledges that Lessor shall not execute and deliver the Aircraft Purchase Agreement Assignment, and Lessee agrees that it will not so accept delivery of the Aircraft from Airbus, unless and until Lessor notifies Lessee that the Lessee Conditions Precedent have been satisfied or waived. Lessee hereby agrees that in the event delivery of the Aircraft shall be accepted from Airbus under the Aircraft Purchase Agreement Assignment by Lessee, as Lessor’s agent pursuant to such appointment by Lessor, such acceptance of delivery by Lessee on behalf of Lessor shall, without further act, irrevocably constitute absolute and unconditional acceptance by Lessee of the Aircraft for all purposes of this Agreement (including for the avoidance of doubt, satisfaction (or waiver, provided the terms of any such waiver are acceptable to Lessor) of the conditions precedent set forth in paragraph 3 of Schedule 3), and upon such acceptance of the Aircraft, the Lessee will execute and deliver to the Lessor the Acceptance Certificate.	
Delayed Delivery
 
3.3	If owing to:	
 
 	(a)	any seller or manufacturer of the Aircraft delaying in the delivery of, or failing to deliver, the Aircraft to Lessor for any reason (other than because of any default of Lessor in the payment of the purchase price of the Aircraft, or any failure of Lessor to provide notice pursuant to clause 3.2 above, when obligated to do so as provided therein when all Lessee Conditions Precedent have been satisfied) whether or not in circumstances entitling that seller or manufacturer to terminate that agreement; or	
 
 	(b)	the Aircraft Purchase Agreement Assignment terminating with respect to the Aircraft prior to delivery of the Aircraft (other than because of any default of Lessor in the payment of the purchase price of the Aircraft when all Lessee Conditions Precedent have been satisfied); or	
 
 	(c)	any delay due to a Delayed Delivery Event or otherwise which is beyond the reasonable control of Lessor; or	
 
 	(d)	any Lessee Condition Precedent not having been fulfilled,	
Lessor delays in the Delivery of, or fails to deliver, the Aircraft under this Agreement then:
 
 	(a)	Lessor will not be responsible for any Loss, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by Lessee;	
 
 	(b)	subject to clause 3.3(c) and (d) below and to clause 20, Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor, on the grounds of any such delay;	
 
 	(c)	in the case of termination of the Aircraft Purchase Agreement Assignment in respect of the Aircraft, Lessor or Lessee may at any time after such termination terminate this Agreement;	
 
 	(d)	if the Delivery is delayed for a period of more than 60 days after the end of the Scheduled Delivery Month by reason of the occurrence of any of the events referred to in clause 3.3	
 
- 2 -

 	above, Lessor may terminate this Agreement by giving notice in writing to Lessee within ten (10) days after the expiration of such period (or, if applicable after the expiration of such other period as Lessor and Lessee may agree);	
 
 	(e)	Upon any termination pursuant to this clause 3.3 ( Delayed Delivery ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:	
 
 	(i)	pursuant to clause 8.4 ( Breakage Costs Indemnity ), clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality ); and	
 
 	(ii)	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid Rent received by Lessor on or prior to the date of such termination, or, if applicable, return the Letter of Credit.	
Risk
 
3.4	Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.	
 
4.	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
5.	Rent	
Rent Periods
 
5.1       (a)	The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	
 
- 3 -

 	(b)	The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
 
 	(c)	Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date
 
5.2       (a)	Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
 
 	(b)	If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent
 
5.3       (a)	Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 ( Rent ), the Term shall be divided into successive periods (each a Relevant Period ).	
 
 	(b)	The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
 
 	(c)	Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
 
 	(d)	Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
One Time Option to Fix Rent Prior to Delivery
 
5.4       (a)	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 4 -

 	2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
 
 	(b)	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
 
 	(c)	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 ( Rent Calculation ) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
 
 	(d)	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
6.	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before March 30, 2007; and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 5 -

thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
 
6.2	No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).	
Concerning the Deposit
 
6.3       (a)	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
 	(b)	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 ( Set-off ) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
 
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Provision of Letter of Credit
 
6.4	Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:	
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit
 
6.5       (a)	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
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 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
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 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7.	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
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8.	Payments	
Account for Lessee Payments
 
8.1	All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:	

Bank:	    	The Royal Bank of Scotland PLC
Financial Institutions
PO Box 39952
2.  1 / 2 Devonshire Square
London
EC2M 4XJ	
		
Account No:	    	*****	
		
Account Name:	    	*****	
		
Sort Code:	    	*****	
		
IBAN BIC/Swift Code:	    	*****	
		
IBAN:	    	*****	
		
Correspondent Bank:	    	American Express International Bank
23 rd Floor
American Express Tower
200 Vesey Street
New York City
NY 10285-2300
USA	
		
Swift Code:	    	*****	
		
ABA:	    	*****	
Default Interest
 
8.2	If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.	
Absolute Obligations
 
8.3       (a)	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
 
 	(i)	any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
 
8.4	Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:	
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Currency Indemnity
 
8.5       (a)	If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.	
Application of Payments by Lessor
 
8.6	If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.	
Lessor’s Determination of Amounts Due
 
8.7	Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.	
Business Day Convention
 
8.8	If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.	
 
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9.	Lessor Covenants	
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
 
9.2	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:	
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
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10.	Lessee Covenants	
Performance
 
10.1     (a)	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
 	(b)	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
 
 	(c)	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
 
 	(d)	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information — General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
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 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
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 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect; all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth	
 
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 	of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such information as Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft ,unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
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 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
Registration and Protection
10.5
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, theFinancing Parties; if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
“THIS [AIRCRAFT/ENGINE] IS OWNED BY RBS AEROSPACE LIMITED AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF RBS AEROSPACE LIMITED”;
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
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 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
Recognition of Rights
 
10.7	Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.	
 
11.	Possession and Sub-Leasing	
Possession
 
11.1	Lessee shall not, without the prior written consent of Lessor, sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:	
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
 
11.2	Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:	
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
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 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
11.3
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and Insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
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 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 ( Insurance ) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss , Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol, if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
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 	(b)	Lessor shall (if necessary in connection with such sub-leasing (at no cost to Lessor) co-operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol, if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co-operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12.	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
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 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection
 
12.3     (a)	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be	
 
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 	continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	
 
 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
 
12.4	Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:	
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
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 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
Maintenance Program
 
12.5	Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided , however , that such request shall be made promptly following receipt of any notice of such change from Lessee.	
Engine Thrust and Operational Derate
 
12.6     (a)	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
 
 	(b)	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13.	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts
 
13.1     (a)	Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
 
 	(b)	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
 
 	(c)	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
 
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 	(d)	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part   (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 ( Recognition of Rights ) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
 
13.3	Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:	
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
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 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
 
13.4	Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:	
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
 
13.5     (a)	Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:	
 
 	(i)	no Default has occurred and is continuing;	
 
 	(ii)	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
 
 	(iii)	Lessee owns or leases the Other Aircraft and has operational control of it;	
 
 	(iv)	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
 
 	(v)	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security	
 
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 	Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
 
 	(vi)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
 
13.7     (a)	Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:	
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
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 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
 
13.8	Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).	
 
14.	Manufacturer’s Warranties	
Use of Warranties
 
14.1     (a)	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
 
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 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims
 
14.2     (a)	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or any reimbursement for such remedy.	
 
 	(b)	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 ( Proceeds ) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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15.	Indemnities	
General
 
15.1	Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):	
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part (either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
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 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
 
15.2	Lessor, or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).	
Contest
 
15.3	If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:	
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
 
15.4	The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.	
 
16.	Insurance	
Insurances
 
16.1     (a)	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
 
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 	(b)	The Insurances shall be effected either:	
 
 	(i)	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
 
 	(ii)	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
 
16.2	Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.	
Change
 
16.3     (a)	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
 
 	(b)	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2), Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B (as at the date hereof). In the event that any provision of AVN67B (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
 
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Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
 
16.5	Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:	
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
 
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Failure to Insure
 
16.6	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
Continuing Insurance for Indemnity
 
16.7	Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.	
 
17.	Loss, Damage and Requisition	
Total Loss prior to Delivery
 
17.1	If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:	
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery
 
17.2     (a)	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	ninety (90) days after the Total Loss Date; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
 
 	(b)	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse,	
 
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 	representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
 
 	(c)	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
 
 	(d)	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition
 
17.3     (a)	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
 
 	(i)	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
 
 	(ii)	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
 
 	(iii)	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
 
 	(iv)	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
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18.	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 ( EXCLUSION ) TO 18.4 ( CONFIRMATION ) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
 
18.1	THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:	
 
 	(a)	LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THIS AGREEMENT; AND	
 
 	(b)	LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
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 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
 
18.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 ( EXCLUSION ).	
Disclaimer of Consequential Damages
 
18.3	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.	
No Duties
 
18.4	LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.	
Confirmation
 
18.5	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.	
 
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19.	Redelivery	
Redelivery
 
19.1     (a)	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
 	(b)	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
 
 	(c)	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
 
 	(d)	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
 
19.2	If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:	
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) fromthe ***** day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
 
19.3	Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft notwithstanding non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.	
Export Documents
 
19.4	Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.	
Acknowledgement
 
19.5	Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.	
 
20.	Events of Default	
Events
 
20.1	Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:	
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion ofLessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
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 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default, or termination event caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii)above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
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 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
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 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 ( Redelivery ); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (q) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** for the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
 
 	(t)	Registration Amendments : without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
Lessor’s Rights
 
20.2     (a)	Lessor Rights and Remedies : If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
 
 	(i)	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(ii)	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
 
 	(iii)	either:	
 
 	(y)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
 
 	(z)	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as	
 
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 	being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without	
 
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 	duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referenced to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
 
20.3	If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.	
 
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21.	Taxation	
Gross-up
 
21.1     (a)	All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	
 
 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor, will be equal to the amount that Lessor would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Lessor in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Lessor in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Lessor shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Lessor in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Lessor shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor; or	
 
 	(ii)	oblige Lessor to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant to Pay Taxes
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof, is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ).
Tax Indemnity
 
21.3     (a)	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
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 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor by any Government Entity in Ireland or any jurisdiction where Lessor has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor of any of its right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax
 
21.4     (a)	Without limiting clause 21.3 above, Lessee shall pay to Lessor (or, if permitted by applicable Law and if requested by Lessor, Lessee shall pay to the relevant tax authority for the account of Lessor):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax
 
21.5     (a)	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that Lessor is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor, if available, in respect of payment of any such VAT.	
 
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Information regarding Taxes
 
21.6     (a)	If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.	
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments
 
21.7     (a)	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
Notification
 
21.8	Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however ,	
 
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 	the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.	
Information
 
21.9	Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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22.	Assignment and Transfer	
By Lessee
 
22.1	LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.	
Lessor Transfer
 
22.2     (a)	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify. Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer
 
22.3     (a)	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
 	(d)	*****	
*****
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
23.	Miscellaneous Provisions	
Rights Cumulative, Waivers
 
23.1	The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
Delegation
 
23.2	Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.	
Expenses
 
23.3	Lessee shall pay to Lessor on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor’s rights or remedies) incurred or payable by Lessor in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by Lessee with this Agreement (but in the case of such monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor’s rights or remedies under this Agreement (including in connection with any Event of Default).	
 
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Set-off
 
23.4     (a)	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
 
23.5	The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.	
Entire Agreement
 
23.6	This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.	
Rights of Third Parties
 
23.7	All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement.	
 
23.8	Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.	
 
23.9	All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.	
 
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Counterparts
 
23.10	This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.	
Language
 
23.11	All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.	
Confidentiality
 
23.12	This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non-public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement ( provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.	
Invalidity of any Provision
 
23.13	If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
Survival
 
23.14	All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.	
Further Assurance
 
23.15   (a)	Each of the parties agrees to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
 
 	(b)	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
 
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No Brokers
 
23.16	Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).	
Chattel Paper
 
23.17	To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.	
True Lease
 
23.18	The parties intend and agree that this Agreement:	
 
 	(a)	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
 
 	(b)	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for Purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
 
 	(c)	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
Lessee shall not file a tax return that is inconsistent with the provisions of this clause.
Know Your Customer/OFAC Compliance
 
23.19	Anti-Terrorism Law:	
 
 	(a)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
 
 	(b)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates are any of the following:	
 
 	(i)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
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 	(ii)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(iii)	a person with which Lessor is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(iv)	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
 
 	(v)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
 
 	(c)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
23.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
24.	Notices	
 
24.1	Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:	
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day), provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.	
 
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24.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:
 
 	Address:	RBS Aerospace Limited	
 	 	3 rd Floor	
 	 	1 George’s Quay Plaza	
 	 	George’s Quay	
 	 	Dublin 2	
 	 	Ireland	
 
 	Attention:	Head of Transaction Management	
 
 	Facsimile:	+ 353 1 448 3390	
To Lessee at:
 
 	Address:	Prolongación Paseo de la Reforma No. 490	
 	 	Piso 1 (Edificio GE)	
 	 	Colonia Santa Fé Peña Blanca	
 	 	Del. Alvaro Obregón	
 	 	Mexico D.F. 01012	
 	 	Mexico	
 
 	Attention:	General Counsel	
 
 	Facsimile:	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
25.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
 
25.1	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.	
 
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Jurisdiction
 
25.2	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
Process Agents
 
25.3     (a)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
 
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Waiver of Objections
 
25.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
 
25.5	This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.	
Waiver of Sovereign Immunity and Other Defenses
 
25.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
 
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Waiver of Jury Trial
 
25.7	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.	
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.

SIGNED on behalf of:	
RBS AEROSPACE LIMITED	
		
Name:	 	/s/ David Swan	
		
Title:	 	Attorney-in-fact	
	
SIGNED on behalf of:	
CONCESIONARIA VUELA	
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	
		
Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Batik Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates are a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement dated as of October 28, 2005 between Parent and Airbus insofar as it relates to the Aircraft;
Aircraft Purchase Agreement Assignment means the aircraft purchase agreement assignment in form and substance acceptable to Lessor (acting reasonably) between Parent (as assignor) and Lessor (or such other person notified to Lessee as purchaser of the Aircraft) (as assignee) in relation to the Aircraft Purchase Agreement;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a
 
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removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means all costs, losses, premiums, penalties or out-of-pocket expenses incurred or suffered by Lessor, any Affiliate of Lessor or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or its Affiliates or otherwise in connection with the financing of Lessor’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****;
Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft;	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor);	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor);	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft;	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars , $ and US$ mean the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed;
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change ); 
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions ); 
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
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 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days, or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor who provides finance to Lessor in connection with Lessor’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor to Lessee as providing finance to Lessor in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate,organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
 
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Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means ***** or a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, ***** or (ii) such other base agreed by Lessor;
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authorities and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, any Affiliate of Lessor or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or its Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
 
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Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Master Agreement means the Master Agreement dated as of March 12, 2007 between Parent, Lessor and Lessee relating to the purchase and leasing of the Aircraft hereunder and the aircraft covered by certain Other Agreements;
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income;
Mexico means the United Mexican States;
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Master Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to A319 aircraft bearing manufacturer’s serial numbers 3045, 3069 and 3253, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor) and Lessee (or any Affiliate of Lessee);
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Parent means the Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
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 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees;	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date;	
 
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Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutic Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
 
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Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date in the Scheduled Delivery Month notified by Airbus or Parent to Lessor, at least 5 Business Days in advance thereof, as the Scheduled Delivery Date under the Aircraft Purchase Agreement;
Scheduled Delivery Month means October, 2007;
Scheduled Expiry Date means the day immediately before the day falling 114 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent. of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
Tax Indemnitee means Lessor, its Affiliates and each Financing Party, if any;
 
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Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
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 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss; and	
UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage
 
1.2	(a)       References in this Agreement to:	
 
 	(i)	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
 
 	(ii)	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
 
 	(iii)	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
 
 	(iv)	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
 
 	(v)	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
 
 	(vi)	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
 	(b)	Headings are for ease of reference only.	
 
 	(c)	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g) 	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
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 	(p) 	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law, including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor represents and warrants to Lessee on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor is a limited liability company duly incorporated and validly existing and in good standing under the laws of Ireland;	
 
 	(b)	Power and Authority : Lessor has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement, has taken all necessary corporate action to authorize the entry into, performance and delivery of, this Agreement;	
 
 	(c)	Legal validity : this Agreement has been duly executed and delivered by Lessor and constitutes legal, valid and binding obligations of Lessor, enforceable against Lessor in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is binding upon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 83 -

3.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
- 84 -

Schedule 3
CONDITIONS PRECEDENT Conditions
Precedent to be satisfied by the Lessee
 
1.	Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.	
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
- 85 -

Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
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 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexicali Asset Tax : evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ), in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in the condition required under the Aircraft Purchase Agreement and Schedule 6 hereof; (ii) Lessor shall have received (x) a certified copy of the full export certificate of airworthiness in relation	
 
- 87 -

 	to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Master Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement Assignment; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents and receipt by Lessor of the delivery documents under the Master Agreement, including an Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions; (vi) neither Lessee nor Parent shall have entered into any agreement with the Manufacturer which does, or would, substantially amend, modify, rescind, cancel or terminate the Aircraft Purchase Agreement in respect of the Aircraft without the prior written consent of Lessor; and (vii) the Delivery Date shall be occurring within 60 days of the last day of the Scheduled Delivery Month.	
 
2.	Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.	
 
3.	Conditions Precedent to be Satisfied by Lessor : Lessee’s obligations to accept delivery and lease the Aircraft from Lessor are subject to receipt by Lessee from Lessor on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:	
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Lessor; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Lessor approving the terms of, and the transactions contemplated by, this Agreement, resolving that Lessor enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement.	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Lessor’s status as a resident of Ireland for tax purposes.	
 
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Schedule 4
*****

 	  	*****	 	  	*****	 	  	*****	 	
Period 1	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 2	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 3	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 4	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 5	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 6	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 7	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 8	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 9	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 10	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 11	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 12	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 13	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 14	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 15	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 16	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 17	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 18	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 19	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 89 -

Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 90 -

 	(c) 	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
- 91 -

 	(f) 	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated March 12, 2007 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 92 -

 	(j) 	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 93 -

Schedule 6
DESCRIPTION OF AIRCRAFT
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications:

Specification	  		
		
General Model	  	A319-133	
Engine Type / SLST	  	V2527M-A5, 26,570 lbs	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #	  	3279	
Year Built	  	2007	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
Max Taxi	  	75,900 kgs	
Max Take Off	  	75,500 kgs	
Max Zero Fuel	  	58,500 kgs	
Max Landing	  	62,500 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration, F / Y	  	144 Y/C	
CONFIGURATION Total Seats	  	144	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lavs are vacuum type	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. Galley 1 and mini-Galley S3 in
aft. Bulkhead, between two lavatories	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4”
retractable LCD monitors	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
- 94 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	  	Equipment Supplier	  	Part Number	
			
3 Radio Tuning Panels	  	THALES AVIONICS	  	C12848CA01	
2 HFS-900 HF Data Radios	  	Collins	  	822-0330-020	
3 VHF-900 VHF Data Radio	  	Collins	  	822-1047-030	
1 SELCAL Control Panel	  	TEAM	  	BC2065C	
1 SELCAL Decoder	  	Coltech	  	1200008-000	
1 Communications Mgmt Unit	  	N/A	  	N/A	
1 CVR (2 hour)	  	Allied Signal Avionic	  	980-6022-001	
1 DFDAU	  	SAGEM	  	ED48A100	
1 DFDR	  	Honeywell	  	980-4700-042	
1 Accelerometer	  	AMETEK AEROSPACE	  	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	  	Collins	  	22-1152-121	
2 Low Range Radio Altimeter	  	Collins	  	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	  	Collins	  	822-1710-202	
1 Weather Radar Control Panel	  	Collins	  	622-1530-820	
1 TCAS II Computer	  	Honeywell	  	7517900-10003	
2 ATC Mode S Transponder	  	Collins	  	822-1338-021	
1 TCAS Control Panel	  	THALES AVIONICS	  	C12404AB02	
2 VOR/Marker Beacon Receive	  	Collins	  	822-0297-020	
2 DME Interrogator	  	Collins	  	822-0329-020	
2 Multipurpose CDU	  	HONEYWELL	  	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	  	HONEYWELL	  	C13042BA01	
1 EGPWS Computer	  	Allied Signal	  	965-1676-002	
 
- 95 -

			
EPAC Ref.	  	Title	
		
	  	Introduction of A319-100 Standard Specification at Issue	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats – all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take – off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62./MZW 58.5 T	
03.20.400/02	  	Design weights increase to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier – English below vertical and second language Horiz.) – Airsigna	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine – bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steeringmarkers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external marking	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation – BFE
Installation of one HF system – COLLINS 900 – DIGITAL ANTENNA	
23.11.115/14	  	COUPLER – BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit has microphone alternate equipment – Holmberg	
 
- 96 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system- PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) – PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout (144 pax – DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment – full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double – sided adhesive tap	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change1)	
25.35.132/02	  	Installation of non-electric galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	

EPAC Ref.	  	Title	
		
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exiting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	With anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
1.60.120/01	  	Installation of LCD EIS2 – Thales Avionic	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signalled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
 
- 97 -

			
EPAC Ref.	  	Title	
		
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACAR	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	

EPAC Ref.	  	Title	
		
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Window	
56.10.102/02	  	Cockpit a alternate front windows – SAINT-GOBAIN SULLY	
 
- 98 -

			
EPAC Ref.	  	Title	
		
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engine	
77.00.119/XX	  	Engines selection	
 
- 99 -

Schedule 7
[INTENTIONALLY LEFT BLANK]
 
- 100 -

Schedule 8
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 101 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 102 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 103 -

Schedule 9
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 104 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 105 -

Schedule 11
AIRCRAFT DOCUMENTS AT REDELIVERY
Part A
Manuals
 
1.	List of manuals	
Basic:
 
1.	Airplane Flight Manual	
 
2.	Flight crew operating Manual	
 
3.	Trim Sheet	
 
4.	Quick Reference Handbook	
 
5.	Weight and Balance Manual	
 
6.	Performance Engineer’s Programs	
 
7.	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
 
8.	Performance Programs Manual	
 
9.	Aircraft Maintenance Manual	
 
10.	Wiring Diagram Manual	
 
11.	Power Plant Build-up Manual	
 
12.	Engine Brochures	
 
13.	APU Log Book (with manufacturer delivery documents)	
 
14.	Illustrated Parts Catalogue	
 
15.	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
 
16.	Structural Repair Manual	
 
17.	Nacelle Structural Repair Manual	
 
18.	Engine Maintenance Manual	
 
19.	Illustrated Parts catalogue (power-plant)	
 
20.	Master Minimum Equipment List	
 
- 106 -

21.	Maintenance Planning Document	
 
22.	Component Maintenance Manuals (Vendor and Manufacturer)	
 
23.	Engineering and Tooling Drawings	
 
24.	Maintenance Facility Planning	
 
25.	Support Equipment Summary	
 
26.	Tool and Equipment bulletins	
 
27.	Tools and equipment Drawings	
 
28.	Tools and equipment index	
 
29.	Illustrated tools and Equipment Manual	
 
30.	Technical Publications Combined Index	
 
31.	Trouble shooting Manual	
 
32.	Component Documentation Status	
 
33.	Component Evolution List	
 
34.	Cable Fabrication Manual	
 
35.	Standards Manual	
 
36.	Parts usage	
 
37.	Schedule (drawing Nomenclature)	
 
38.	Process and Materials Specification	
 
39.	Installation and Assembly Drawings	
 
40.	Airplane Characteristics for Airport Planning	
 
41.	ATA breakdown index	
 
42.	CADETS (technical Publications Training)	
 
43.	Aircraft Recovery Manual	
 
44.	Crash Crew Chart	
 
45.	Cargo Loading system Manual	
 
46.	List of applicable publications	
 
- 107 -

47.	List of radio active and hazardous elements	
 
48.	Livestock transportation Manual	
 
49.	Service Bulletins	
 
50.	Service information letters	
 
51.	Supplier Product Support Agreements	
 
52.	Transportability Manual	
 
53.	Vendor Information Manual	
 
54.	Vendor Information Manual for Ground Support Equipment	
 
55.	Maintenance Review Board	
 
56.	Non Destructive Testing Manual	
 
57.	Power Plant Build up Manual	
 
58.	Aircraft Schematics Manual	
 
59.	Aircraft Wiring Lists	
 
60.	Aircraft Wiring Manual	
 
61.	Component Location Manual	
 
62.	Consumable Material List	
 
63.	Duct Repair Manual	
 
64.	Electrical Load Analysis	
 
65.	Electrical Standards Practices Manual	
 
66.	Electrical Standards Practices Booklet	
 
67.	Fuel Pipe Repair Manual	
 
68.	Maintenance Planning Task Cards	
 
- 108 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 109 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 110 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 111 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 112 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 113 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 114 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 115 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 116 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 117 -

Schedule 12
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 118 -

Schedule 13
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 119 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 120 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 121 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 122 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 123 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 124 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 125 -

Schedule 14
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 127 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 129 -

Schedule 15
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 130 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 131 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 132 -

EXECUTION VERSION
AIRCRAFT LEASE ASSIGNMENT AND AMENDMENT AGREEMENT (MSN 3279)
Dated as of October 10, 2007
RBS AEROSPACE LIMITED
as Existing Lessor
CONCESIONARIA VUELA COMPAÑIA de AVIACIÓN, S.A. DE C.V.
as Lessee
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
(not in its individual capacity except as expressly set forth herein but solely as owner trustee)
as New Lessor
and
RBS AEROSPACE LIMITED
as Owner Participant
in respect of
Aircraft Lease Agreement dated as of March 12, 2007
relating to One Airbus A319-133 Aircraft bearing manufacturer’s serial number 3279
and Registration No. XA-VOJ
This Agreement has been executed in multiple counterparts; to the extent, if any, that this Agreement or the Assigned Lease Documents (as defined herein) constitute chattel paper (as defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in New Lessor’s right, title and interest in and to this Agreement or the Assigned Lease Documents may be perfected through the delivery or possession of any counterpart of this Agreement or the Assigned Lease Documents other than the counterpart of this Agreement that contains the original receipt executed by New Lessor.

INDEX

Clause	  	Page	 	
			
1.	  	INTERPRETATION	  	 	1	  	
2.	  	ASSIGNMENT AND ASSUMPTION	  	 	2	  	
3.	  	LEASE AMENDMENTS	  	 	3	  	
4.	  	REPRESENTATIONS AND WARRANTIES	  	 	5	  	
5.	  	EFFECTIVE TIME	  	 	7	  	
6.	  	MISCELLANEOUS	  	 	7	  	
 
-i-

THIS AIRCRAFT LEASE ASSIGNMENT AND AMENDMENT AGREEMENT (MSN 3279) is made as of October 10, 2007 (the “ Agreement ”) among (1) RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is at IFSC House, ILFC, Dublin 1, Ireland (“ Existing Lessor ”; and “ Owner Participant ”); (2) Concesionaria Vuela Compañia Aviación, S.A. de C.V., a company ( sociedad anónima de capital variable ) incorporated under the laws of México, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 st   piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México (“ Lessee ”); and (3) Wells Fargo Bank Northwest, National Association, a national banking association, not in its individual capacity except as expressly provided herein but solely as owner trustee under the Trust Agreement (as defined below) of 299 South Main Street, Salt Lake City, Utah 84111 (“ New Lessor ” or “ Owner Trustee ”).
WHEREAS, by an Aircraft Lease Agreement dated as of March 12, 2007 (the “ Lease ”), between Existing Lessor and Lessee, Existing Lessor agreed to lease and Lessee agreed to take on lease one Airbus A319-133 aircraft bearing manufacturer’s serial number 3279 and registration number XA-VOJ and the engines attached thereto (the “ Aircraft ”) on the terms and subject to the conditions contained in the Lease.
WHEREAS, Existing Lessor has agreed to transfer title to the Aircraft in trust under the Trust Agreement, subject to the Lease, to New Lessor.
WHEREAS, the parties have agreed that New Lessor shall assume the rights, liabilities and obligations of Lessor under the Lease as assigned and amended hereby, and that Existing Lessor should be released from its liabilities and obligations under the Lease on the terms and conditions set out herein.
NOW THEREFORE in consideration of the provisions and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, IT IS AGREED as follows:
 
1.	INTERPRETATION	
 
1.1	Definitions : In this Agreement, the following expressions shall have the following meanings:	
“ Assigned Lease ” means the Lease as assigned, amended and supplemented by this Agreement.
“ Assignment of Lease ” has the meaning ascribed to it in Clause 2.1.
“ Effective Time ” has the meaning ascribed to it in Clause 5.
“ Trust Agreement ” means the Trust Agreement (MSN 3279) relating to the Aircraft dated on or prior to the date of this Agreement between the Owner Trustee and the Owner Participant.
 
1.2	Defined Terms In Lease Documents : Capitalized terms used but not defined, in this Agreement shall have the respective meanings assigned to them in the Lease.	
 
1.3	Interpretation : In this Agreement, unless the context otherwise requires:	
 
 	(a)	a reference to a Clause or a Schedule is a reference to a clause of or schedule to this Agreement;	
 
 	(b)	a reference to a Person includes its successors and permitted assigns:	
 
 	(c)	words importing the plural shall include the singular, and vice versa; and	
 
 	(d)	headings are to be ignored in construing this Agreement.	

2.	ASSIGNMENT AND ASSUMPTION	
 
2.1	Assignments, Releases and Assumptions : As of and with effect from the Effective Time:	
 
 	(a)	Existing Lessor assigns, transfers and conveys to New Lessor all of its rights, interests, obligations, duties and liabilities in, to, and under the Lease arising from and including the Effective Time;	
 
 	(b)	Existing Lessor agrees that, Lessee shall perform all of Lessee’s obligations, duties and liabilities in, to and under the Assigned Lease directly to and for the benefit of New Lessor and Owner Participant and not Existing Lessor;	
 
 	(c)	Subject to the provisions of clause 2.3 below, Lessee releases Existing Lessor, in its capacity as Existing Lessor, from Existing Lessor’s obligations, duties and liabilities under the Assigned Lease and Existing Lessor agrees that it in its capacity as Existing Lessor, has no further rights against Lessee under the Assigned Lease;	
 
 	(d)	New Lessor accepts the assignment of the Lease and assumes the rights and obligations, duties and liabilities of “Lessor” under the Lease as assigned and amended hereunder arising from and including the Effective Time and to observe and perform the obligations of “Lessor” under the Assigned Lease arising from and including the Effective Time;	
 
 	(e)	Lessee accepts the assignment to and assumption by New Lessor of Existing Lessor’s rights and obligations, duties and liabilities under the Lease as assigned and amended hereunder and New Lessor’s agreement to observe and perform the obligations of Lessor under the Assigned Lease;	
 
 	(f)	Lessee acknowledges that its obligations, duties and liabilities under the Assigned Lease are to New Lessor for the benefit of Owner Participant;	
Each of the foregoing events and agreements is conditional upon the happening of the others, shall occur simultaneously and are collectively referred to as the “ Assignment of Lease ”.
 
2.2	Effect : Existing Lessor, New Lessor and Lessee accordingly agree that, as of and with effect from the Effective Time, the Lease is assigned and amended and constitutes an agreement between New Lessor as lessor and Lessee as lessee on the terms and conditions of the Assigned Lease.	
 
2.3	Prior Rights and Remedies : Without prejudice to the rights of the New Lessor and Lessee under the Assigned Lease and in consideration of the payment by Existing Lessor to Lessee of ***** (receipt and sufficiency of which are hereby acknowledged), Lessee and Existing Lessor agree that Existing Lessor and Lessee shall each have the same rights and remedies against each other pursuant to this Clause 2.3 as each would have had under the Lease in respect of any losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if Existing Lessor had remained the “Lessor” under the Lease.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
2

3.	LEASE AMENDMENTS	
Amendments : As of, and with effect from, the Effective Time the Lease shall be (and is hereby) amended as follows:
 
 	(a)	Generally	
 
 	(i)	the expression “Lessor” shall be construed, wherever it appears in the Lease Documents, as if it referred to New Lessor in place of Existing Lessor;	
 
 	(ii)	the expression “this Agreement” shall be construed wherever it appears in the Lease Documents and wherever the context so permits as if it referred to the Assigned Lease;	
 
 	(b)	Lease	
 
 	(i)	the following new definitions shall be added to Schedule 1 of the Lease in the appropriate alphabetical order:	
“Owner Participant” means RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is at IFSC House, IFSC, Dublin 1, Ireland;
“Owner Trustee” means Wells Fargo Bank Northwest, National Association, a national banking association, in its capacity as Owner Trustee;
“Trust Estate” has the meaning set out in the Trust Agreement ( MSN 3279 ) dated on or about September 17, 2007 between Owner Trustee and Owner Participant;
 
 	(ii)	the definition of “Indemnitees” in Schedule 1 of the Lease shall be amended to insert the words “Owner Participant,” after “Lessor,” and before “Financing Parties” in the first line and to add the word “trustees” after “servants,” and before “agents” on the last line;	
 
 	(iii)	the definition of “Tax Indemnitee” in Schedule 1 of the Lease shall be amended to insert the words “Owner Participant,” after “Lessor” and before “its Affiliates”;	
 
 	(iv)	the definition of “Other Agreements” in Schedule 1 of the Lease shall be amended by replacing the word “Lessor” with “Lessor or Owner Participant” in each place where “Lessor” appears in this definition;	
 
 	(v)	the definition of “Breakage Costs”, “Financing Parties” and “Lessor Liens” shall be amended to insert the words “or Owner Participant” after “Lessor” in each case where “Lessor” appears;	
 
3

 	(vi)	clause 10.6(a) of the Lease shall be deleted in its entirety and replaced by the following:	
affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:
“THIS [AIRCRAFT/ENGINE] IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE (“OWNER”) UNDER THAT CERTAIN TRUST AGREEMENT (MSN 3279), AND IS LEASED TO CONCESIONARIA VUELA, COMPAÑIA DE AVIACIÓN, S.A. DE C.V. AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF OWNER.”
 
 	(vii)	the references in clause 21.1, clauses 21.3(b)(vi) and (c) and clauses 21.4, 21.5, 23.3, 23.19 and 23.20 to “Lessor” shall be amended to replace with the words “Lessor and/or Owner Participant” (without duplication);	
 
 	(viii)	the following shall be added as a new clause 23.21 to the Lease:	
“ 23.21 Statements of Owner Trustee : The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided , however , that this clause 23.21 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided further , that nothing contained in this clause 23.21 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate. The foregoing provisions of this clause 23.21 shall survive the termination of this Agreement;
 
 	(ix)	Schedule 3 of the Lease is hereby amended by including the “Owner Participant” as an addressee, in addition to Lessor, en all documents described therein to be addressed to Lessor;	
 
 	(x)	clause 3 of Schedule 3 of the Lease shall be amended by replacing the references to “Lessor” therein with “Owner Participant”; and	
 
 	(xi)	clause 2(a) of Schedule 5 of the Lease shall be amended by adding “Owner Participant” after “Lessor,” and before “Security Trustee.”	
 
4

4.	REPRESENTATIONS AND WARRANTIES	
 
4.1	Lessee Representations : Lessee hereby makes to New Lessor, Existing Lessor and Owner Participant the representations and warranties in Schedule 2 of the Lease as of the Effective Time as if New Lessor was the “Lessor” as defined in the Lease and as if references to “this Agreement” were to each of this Agreement and the Assigned Lease. Lessee further represents and warrants to New Lessor, Existing Lessor and Owner Participant as of the Effective Time:	
 
 	(a)	the Assigned Lease is in full force and effect and has not been terminated by Lessee; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Lessee, has been duly executed and delivered by Lessee and constitutes the valid, legal and binding obligation of Lessee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
4.2	Owner Participant Representations and Warranties : Owner Participant hereby represents and warrants to Lessee and Owner Trustee that as of the Effective Time:	
 
 	(a)	Owner Participant is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Owner Participant, has been duly executed and delivered by Owner Participant and constitutes the valid, legal and binding obligation of Owner Participant enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
4.3	Existing Lessor Representations and Warranties : Existing Lessor hereby represents and warrants to Lessee, New Lessor and Owner Participant that as of the Effective Time:	
 
 	(a)	Existing Lessor is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement; and	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Existing Lessor, has been duly executed and delivered by Existing Lessor and constitutes the valid, legal and binding obligation of Existing Lessor enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
5

4.4	Owner Trustee representations and warranties : The representations in Section 2 of Schedule 2 of the Lease is hereby deleted and, in lieu thereof, the Owner Trustee, in its individual capacity and (but only as provided in clause (b), (c) and (d) below to the extent that relates to the Owner Trustee) as Owner Trustee, represents and warrants to Lessee, Existing Lessor and the Owner Participant that as of the Effective Time:	
 
 	(a)	the Owner Trustee, in its individual capacity, is a national banking association duly organised and validly existing in good standing under the laws of the United States, has full corporate power and authority to carry on its business as so conducted, has the corporate power and authority to execute and deliver the Trust Agreement, has the corporate power and authority to carry out the terms of the Trust Agreement and has the corporate power and authority to execute and deliver and to carry out the terms of this Agreement;	
 
 	(b)	this Agreement has been duly authorized by all necessary corporate action on the part of Owner Trustee, has been duly executed and delivered by Owner Trustee and constitutes the valid, legal and binding obligation of Owner Trustee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar Laws afflicting creditors’ rights generally or (ii) general principles of equity.	
 
 	(c)	neither the execution and delivery by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of this Agreement or the Trust Agreement, nor the consummation by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or thereby, nor the compliance by the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, with any of the terms and provisions hereof or thereof (A) requires or will require any approval of its stockholders, or approval or consent of any trustees or holders of any indebtedness or obligations of it, or (B) violates or will violate its articles of association or by-laws, or contravenes or will contravene any law, governmental rule or regulation of the United States of America or the State of Utah governing the trust powers of the Owner Trustee, or any judgment or order applicable to or binding on it; and	
 
 	(d)	no consent, approval, order or authorisation of giving of notice to, or registration with, or taking of any other action in respect of any Utah state or local governmental authority or agency or any United States federal governmental authority or agency regulating the trust powers of the Owner Trustee in its individual capacity is required for the execution and delivery of or the carrying out by, the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or by the Trust Agreement, other than any such consent, approval order, authorisation registration, notice or action as has been duly obtained, given or taken.	
 
4.5	Owner Participant and Lessee Undertakings : (a) Owner Participant undertakes that:	
 
 	(i)	it agrees that provided no Event of Default has occurred and is continuing, neither Owner Participant nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Owner Participant of its or Lessor’s rights in accordance with the Assigned Lease will not however constitute such an interference;	
 
 	(ii)	it will comply with the last sentence of clause 22.3 of the Assigned Lease with respect to a transfer of its interest under the Trust Agreement; and	
 
 	(iii)	throughout the term of the Assigned Lease, it will cause New Lessor to pay and perform when due all of the obligations of New Lessor under the Assigned Lease (the “ New Lessor obligations ”) and to the extent, if any, that New Lessor fails to pay or perform any New Lessor Obligation when due, Lessee shall have a direct right of action against Owner Participant for the payment or performance of such New Lessor Obligation.	
 
6

 	(b)	Lessee agrees with Owner Participant that:	
 
 	(i)	Owner Participant is an express third party beneficiary of all of the obligations and liabilities of the Lessee under and in conformity with the Assigned Lease, and all notices and communications given by Lessee to New Lessor shall also be given to Owner Participant; and	
 
 	(ii)	any approval, consent, waiver, amendment, supplement or other modification of the Assigned Lease shall require the written consent or instruction of the Owner Participant to be binding against the New Lessor.	
 
5.	EFFECTIVE TIME	
This Agreement shall become effective at the time of Delivery of the Aircraft to Lessee under the Assigned Lease (the “ Effective Time ”).
 
6.	MISCELLANEOUS	
 
6.1	Continuing Effect : Except as otherwise provided herein, the Assigned Lease and all provisions thereof shall continue in full force and effect, without modification, in accordance with its terms.	
 
6.2	Variation : The terms of this Agreement shall not be varied otherwise than in writing and duly executed by or on behalf of all the parties.	
 
6.3	Governing Law : The provisions of clause 25 of the Lease as amended by this Agreement shall apply to this Agreement as if the same were set out in full herein.	
 
6.4	Notices : Every notice, request, demand or other communication under this Agreement shall be made in accordance with the notice provisions of the Assigned Lease Documents and, for such purposes, New Lessor’s contact details shall be:	
Wells Fargo Bank Northwest, National Association
299 South Main Street
Salt Lake City
Utah 84111
Attention:      Corporate Trust Department
Telephone:    801 246 5630
Fax:               801 246 5053
with a copy to:
RBS Aerospace Limited
IFSC House
IFSC
Dublin 1
Ireland
Attention:      Head of Transaction Management
Facsimile:      + 353 1 859-9230
 
7

6.5	*****	
 
6.6	Counterparts : This Agreement may be executed in any number of counterparts and by any party hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which, when taken together, shall constitute one and the same agreement.	
 
6.7	Owner Trustee : The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate (as such expression is defined in the Trust Agreement) and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided , however , that this Clause 6.6 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided , further , that nothing contained in this Clause 6.6 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements or rights and remedies against the Trust Estate.	
 
6.8	This Agreement is an “Operative Document” as defined in the Lease.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
8

IN WITNESS WHEREOF, the parties hereto have caused this Aircraft Lease Assignment and Amendment Agreement (MSN 3279) to be duly executed by their respective Officers thereto duly authorized as of the day and year first herein written.

RBS AEROSPACE LIMITED	
		
By:	 	/s/ Nicolas Clouet	
	 	Name:	 	Nicolas Clouet	
	 	Title:	 	Attorney-in-Fact	
	
CONCESIONARIA VEULA COMPAÑIA DE AVIACIÓN, S.A. DE. C.V.	
		
By:	 	/s/ Alfonso Ascencio Triujeque	
	 	Name:	 	Alfonso Ascencio Triujeque	
	 	Title:	 	General Counsel	
	
WELLS FARGO BANK NORTHWEST NATIONAL ASSOCIATION (not in its individual capacity, except as expressly set forth herein, but solely as owner trustee under the Trust Agreement)	
		
By:	 	/s/ Jon Croasmun	
	 	Name:	 	Jon Croasmun	
	 	Title:	 	Vice President	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.17
AIRCRAFT LEASE AGREEMENT
Dated as of March 26, 2007
between
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
as Lessee
and
Arrendadora Financiera Inbursa, S.A. de C.V.
Sociedad Financiera de Objeto Multiple, Entidad Regulada,
Grupo Financiero Inbursa
as Lessor

Aircraft Make and Model:	  	One (1) New Airbus A319-133	
Aircraft Manufacturer’s Serial Number:	  	3077	
Aircraft Registration Mark:	  	XA-VOF	
Engine Make and Model:	  	IAE V2527M-A5	
Engine Serial Numbers:	  	V12561 and V12563	

									
TABLE OF CONTENTS	  	 	 	
			
1.	 	DEFINITIONS	  	 	11	  	
				
	 	1.1	 	General Definitions	  	 	11	  	
				
	 	1.2	 	Specific Definitions	  	 	17	  	
			
2.	 	DELIVERY	  	 	18	  	
				
	 	2.1	 	Delivery	  	 	18	  	
				
	 	2.2	 	Delivery Date	  	 	18	  	
				
	 	2.3	 	Delivery Subject to the Purchase Agreement Assignment	  	 	18	  	
				
	 	2.4	 	No Lessor Liability	  	 	18	  	
				
	 	2.5	 	Total Loss of Aircraft Prior to the Delivery Date	  	 	18	  	
				
	 	2.6	 	Termination of the Purchase Agreement Assignment	  	 	19	  	
			
3.	 	LEASE TERM	  	 	20	  	
				
	 	3.1	 	Lease Term	  	 	20	  	
				
	 	3.2	 	Termination Date	  	 	20	  	
			
4.	 	SECURITY DEPOSIT, RENT, MAINTENANCE FUNDS AND OTHER PAYMENTS	  	 	21	  	
				
	 	4.1	 	Security Deposit	  	 	21	  	
				
	 	4.2	 	Rent	  	 	21	  	
				
	 	4.3	 	Maintenance Funds	  	 	22	  	
				
	 	4.4	 	Allocation of Payments	  	 	24	  	
				
	 	4.5	 	Lessor’s Bank Account	  	 	24	  	
				
	 	4.6	 	Default Interest	  	 	24	  	
				
	 	4.7	 	No Deductions or Withholdings	  	 	25	  	
				
	 	4.8	 	Value Added Taxes	  	 	26	  	
				
	 	4.9	 	Currency Indemnity	  	 	27	  	
				
	 	4.10	 	Lessor Performance of Lessee Obligation	  	 	27	  	
				
	 	4.11	 	Consideration for Rent and Other Amounts	  	 	28	  	
			
5.	 	CONDITION OF AIRCRAFT	  	 	29	  	
				
	 	5.1	 	Lessee Selection of Aircraft	  	 	29	  	
				
	 	5.2	 	Condition at the Delivery Date	  	 	29	  	
 
2(138)

									
				
	 	5.3	 	Delivery of Aircraft to Lessee	  	 	29	  	
				
	 	5.4	 	Lessee Acceptance of Aircraft	  	 	29	  	
			
6.	 	PRE-DELIVERY, DELIVERY AND POST DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	  	 	30	  	
				
	 	6.1	 	Pre-Delivery Requirements	  	 	30	  	
				
	 	6.2	 	Delivery Requirements	  	 	31	  	
				
	 	6.3	 	Post Delivery Requirements	  	 	32	  	
			
7.	 	DISCLAIMERS	  	 	33	  	
				
	 	7.1	 	As Is, Where Is	  	 	33	  	
				
	 	7.2	 	Waiver of Warranty of Description	  	 	33	  	
				
	 	7.3	 	Lessee Waiver	  	 	34	  	
				
	 	7.4	 	Conclusive Proof	  	 	34	  	
				
	 	7.5	 	No Lessor Liability for Losses	  	 	34	  	
				
	 	7.6	 	No Liability to Repair or Replace	  	 	34	  	
				
	 	7.7	 	No Waiver	  	 	35	  	
			
8.	 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	  	 	36	  	
				
	 	8.1	 	Warranties	  	 	36	  	
				
	 	8.2	 	Reassignment	  	 	36	  	
				
	 	8.3	 	Warranty Claims	  	 	36	  	
			
9.	 	OPERATION OF AIRCRAFT	  	 	37	  	
				
	 	9.1	 	Costs of Operation	  	 	37	  	
				
	 	9.2	 	Compliance with Laws and Insurance	  	 	37	  	
				
	 	9.3	 	Training	  	 	37	  	
				
	 	9.4	 	No Violation of Insurance Policies	  	 	37	  	
				
	 	9.5	 	Flight and Airport Charges	  	 	38	  	
			
10.	 	SUBLEASES	  	 	39	  	
				
	 	10.1	 	No Sublease without Lessor Consent	  	 	39	  	
				
	 	10.2	 	Lessor Costs	  	 	39	  	
				
	 	10.3	 	Prohibited Countries	  	 	39	  	
				
	 	10.4	 	Approved Subleases	  	 	39	  	
				
	 	10.5	 	Assignment of Sublease	  	 	40	  	
 
3(138)

									
				
	 	10.6	 	Wet Leases	  	 	41	  	
				
	 	10.7	 	Continued Responsibility of Lessee	  	 	41	  	
			
11.	 	MAINTENANCE OF AIRCRAFT	  	 	42	  	
				
	 	11.1	 	General Obligation	  	 	42	  	
				
	 	11.2	 	Specific Engine Requirements	  	 	42	  	
				
	 	11.3	 	Specific Obligations	  	 	43	  	
				
	 	11.4	 	Replacement of Parts	  	 	44	  	
				
	 	11.5	 	Removal of Engines	  	 	45	  	
				
	 	11.6	 	Installation of Engines on Other Aircraft	  	 	45	  	
				
	 	11.7	 	Removal of APU	  	 	46	  	
				
	 	11.8	 	Modifications	  	 	46	  	
				
	 	11.9	 	Performance of Work by Third Parties	  	 	48	  	
				
	 	11.10	 	Reporting Requirements	  	 	48	  	
				
	 	11.11	 	Lessor Rights to Inspect Aircraft	  	 	48	  	
				
	 	11.12	 	Airworthiness Directives Cost Sharing	  	 	49	  	
			
12.	 	USE OF MAINTENANCE FUNDS	  	 	51	  	
				
	 	12.1	 	Airframe Structural Maintenance Fund	  	 	51	  	
				
	 	12.2	 	Engine Performance Restoration Maintenance Fund	  	 	51	  	
				
	 	12.3	 	Engine LLP Maintenance Fund	  	 	52	  	
				
	 	12.4	 	APU Maintenance Fund	  	 	52	  	
				
	 	12.5	 	Landing Gear Maintenance Fund	  	 	52	  	
				
	 	12.6	 	Contribution	  	 	52	  	
				
	 	12.7	 	Contribution Adjustment	  	 	53	  	
				
	 	12.8	 	Costs in Excess of Maintenance Funds	  	 	53	  	
				
	 	12.9	 	Contribution after Termination Date and Retention of Maintenance Funds	  	 	53	  	
			
13.	 	TITLE, REGISTRATION AND IDENTIFICATION	  	 	55	  	
				
	 	13.1	 	Title to the Aircraft	  	 	55	  	
				
	 	13.2	 	Registration of Aircraft	  	 	55	  	
				
	 	13.3	 	Registration of this Lease	  	 	55	  	
				
	 	13.4	 	Registration of Title	  	 	56	  	
 
4(138)

									
				
	 	13.5	 	Registration of Security Interest	  	 	56	  	
				
	 	13.6	 	Evidence of Registration and Filings	  	 	56	  	
				
	 	13.7	 	Identification Plates	  	 	56	  	
			
14.	 	TAXES	  	 	57	  	
				
	 	14.1	 	General Obligation of Lessee	  	 	57	  	
				
	 	14.2	 	Exceptions to Indemnity	  	 	57	  	
				
	 	14.3	 	After Tax Basis	  	 	59	  	
				
	 	14.4	 	Timing of Payment	  	 	59	  	
				
	 	14.5	 	Contests	  	 	59	  	
				
	 	14.6	 	Refunds	  	 	59	  	
				
	 	14.7	 	Cooperation in Filing Tax Returns	  	 	60	  	
				
	 	14.8	 	Survival of Obligations	  	 	60	  	
				
	 	14.9	 	Protection	  	 	60	  	
				
	 	14.10	 	Mitigation	  	 	60	  	
			
15.	 	INDEMNITIES	  	 	61	  	
				
	 	15.1	 	General Indemnity	  	 	61	  	
				
	 	15.2	 	Exceptions to General Indemnities	  	 	62	  	
				
	 	15.3	 	After Tax Basis	  	 	63	  	
				
	 	15.4	 	Timing of Payment	  	 	63	  	
				
	 	15.5	 	Subrogation	  	 	63	  	
				
	 	15.6	 	Notice	  	 	63	  	
				
	 	15.7	 	Refunds	  	 	63	  	
				
	 	15.8	 	Defense of Claims	  	 	64	  	
				
	 	15.9	 	Survival of Obligation	  	 	64	  	
			
16.	 	INSURANCE	  	 	65	  	
				
	 	16.1	 	Categories of Insurance	  	 	65	  	
				
	 	16.2	 	Write Back of Any Date Recognition Exclusion	  	 	65	  	
				
	 	16.3	 	Third Party War Liability Insurance	  	 	65	  	
				
	 	16.4	 	Installation of Third Party Engine	  	 	65	  	
				
	 	16.5	 	Insurance for Indemnities	  	 	66	  	
				
	 	16.6	 	Renewal	  	 	66	  	
 
5(138)

									
				
	 	16.7	 	Assignment of Rights by Lessor	  	 	66	  	
				
	 	16.8	 	Deductibles	  	 	66	  	
				
	 	16.9	 	Insurance for Wet Lease Operations	  	 	67	  	
				
	 	16.10	 	Information	  	 	67	  	
				
	 	16.11	 	Currency	  	 	67	  	
				
	 	16.12	 	Grounding of Aircraft	  	 	67	  	
				
	 	16.13	 	Failure to Insure	  	 	67	  	
				
	 	16.14	 	Reinsurance	  	 	68	  	
				
	 	16.15	 	Limit on Hull in favor of Lessee	  	 	68	  	
				
	 	16.16	 	AVN 67B	  	 	68	  	
			
17.	 	LOSS, DAMAGE AND REQUISITION	  	 	69	  	
				
	 	17.1	 	Definitions	  	 	69	  	
				
	 	17.2	 	Notice of Total Loss	  	 	70	  	
				
	 	17.3	 	Total Loss of Aircraft or Airframe	  	 	70	  	
				
	 	17.4	 	Surviving Engine(s)	  	 	71	  	
				
	 	17.5	 	Total Loss of Engine and Not Airframe	  	 	71	  	
				
	 	17.6	 	Total Loss of APU	  	 	72	  	
				
	 	17.7	 	Other Loss or Damage	  	 	73	  	
				
	 	17.8	 	Government Requisition	  	 	73	  	
				
	 	17.9	 	Temporary or Cautionary Detention or Securement	  	 	74	  	
			
18.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	  	 	75	  	
				
	 	18.1	 	Representations and Warranties	  	 	75	  	
				
	 	18.2	 	Covenants	  	 	78	  	
			
19.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	  	 	81	  	
				
	 	19.1	 	Representations and Warranties	  	 	81	  	
				
	 	19.2	 	Covenant of Quiet Enjoyment	  	 	82	  	
			
20.	 	FINANCIAL AND OTHER INFORMATION	  	 	83	  	
 
6(138)

									
			
21.	 	RETURN OF AIRCRAFT	  	 	85	  	
				
	 	21.1	 	Date of Return	  	 	85	  	
				
	 	21.2	 	Last Engine Shop Visits	  	 	85	  	
				
	 	21.3	 	Technical Report	  	 	85	  	
				
	 	21.4	 	Return Location	  	 	86	  	
				
	 	21.5	 	Full Aircraft Documentation Review	  	 	86	  	
				
	 	21.6	 	Copy of Lessee’s Maintenance Program	  	 	86	  	
				
	 	21.7	 	Aircraft Inspection	  	 	86	  	
				
	 	21.8	 	FAA or EASA Compliant	  	 	87	  	
				
	 	21.9	 	Certificate of Airworthiness Matters	  	 	88	  	
				
	 	21.10	 	General Condition of Aircraft at Return	  	 	88	  	
				
	 	21.11	 	Checks Prior to Return	  	 	90	  	
				
	 	21.12	 	Part Lives	  	 	93	  	
				
	 	21.13	 	Export and De-registration of Aircraft	  	 	94	  	
				
	 	21.14	 	Lessee’s Continuing Obligations	  	 	95	  	
				
	 	21.15	 	Return Acceptance Receipt	  	 	95	  	
				
	 	21.16	 	Indemnities and Insurance	  	 	96	  	
				
	 	21.17	 	Storage	  	 	96	  	
			
22.	 	ASSIGNMENT	  	 	97	  	
				
	 	22.1	 	No Assignment by Lessee	  	 	97	  	
				
	 	22.2	 	Sale or Assignment by Lessor	  	 	97	  	
				
	 	22.3	 	Lessor’s Lender	  	 	98	  	
				
	 	22.4	 	Lessee Cooperation	  	 	98	  	
				
	 	22.5	 	Change of Governing Law	  	 	98	  	
				
	 	22.6	 	Protections	  	 	99	  	
			
23.	 	DEFAULT OF LESSEE	  	 	101	  	
				
	 	23.1	 	Lessee Notice to Lessor	  	 	101	  	
				
	 	23.2	 	Events of Default	  	 	101	  	
				
	 	23.3	 	Lessor’s General Rights	  	 	103	  	
				
	 	23.4	 	De-registration and Export of Aircraft	  	 	105	  	
				
	 	23.5	 	Lessee Liability for Damages and Prejudices	  	 	105	  	
 
7(138)

									
				
	 	23.6	 	Waiver of Default	  	 	106	  	
				
	 	23.7	 	Present Value of Payments	  	 	106	  	
				
	 	23.8	 	Use of Termination Date	  	 	107	  	
				
	 	23.9	 	Mitigation of Damages	  	 	107	  	
			
24.	 	NOTICES	  	 	108	  	
				
	 	24.1	 	Manner of Sending Notices	  	 	108	  	
				
	 	24.2	 	Notice Information	  	 	108	  	
			
25.	 	GOVERNING LAW AND JURISDICTION	  	 	109	  	
				
	 	25.1	 	Governing Law	  	 	109	  	
				
	 	25.2	 	Jurisdiction	  	 	109	  	
				
	 	25.3	 	Waiver of Sovereign Immunity	  	 	109	  	
				
	 	25.4	 	Prevailing Party in Dispute	  	 	109	  	
				
	 	25.5	 	Waivers	  	 	110	  	
			
26.	 	MISCELLANEOUS	  	 	111	  	
				
	 	26.1	 	Expenses	  	 	111	  	
				
	 	26.2	 	Power of Attorney	  	 	111	  	
				
	 	26.3	 	Lessor Performance for Lessee	  	 	112	  	
				
	 	26.4	 	Lessor’s Payment Obligations	  	 	112	  	
				
	 	26.5	 	Materiality	  	 	112	  	
				
	 	26.6	 	Usury Laws	  	 	112	  	
				
	 	26.7	 	Delegation by Lessor	  	 	113	  	
				
	 	26.8	 	Confidentiality	  	 	113	  	
				
	 	26.9	 	Rights of Parties	  	 	113	  	
				
	 	26.10	 	Further Assurances	  	 	114	  	
				
	 	26.11	 	Spanish Language Version Prevails	  	 	114	  	
				
	 	26.12	 	Use of Word “including”	  	 	114	  	
				
	 	26.13	 	Headings	  	 	114	  	
				
	 	26.14	 	Invalidity of Any Provision or Illegality	  	 	115	  	
				
	 	26.15	 	Time Limitations	  	 	115	  	
				
	 	26.16	 	Amendments in Writing	  	 	115	  	
				
	 	26.17	 	Ratified Signatures	  	 	115	  	
				
	 	26.18	 	Entire Agreement	  	 	115	  	
 
8(138)

			
	
LIST OF EXHIBITS	
		
EXHIBIT A	  	ENGINE PERFORMANCE RESTORATION SHOP VISIT	
		
EXHIBIT B	  	PROHIBITED COUNTRIES	
		
EXHIBIT C	  	FORM OF CERTIFICATE OF INSURANCE	
		
EXHIBIT D	  	FORM OF BROKERS’ LETTER OF UNDERTAKING	
		
EXHIBIT E	  	FORM OF ACCEPTANCE CERTIFICATE	
		
EXHIBIT F	  	FORM OF POWER OF ATTORNEY	
		
EXHIBIT G	  	RETURN ACCEPTANCE RECEIPT	
		
EXHIBIT H	  	FORM OF MONTHLY REPORT	
		
EXHIBIT I	  	TECHNICAL EVALUATION REPORT	
		
EXHIBIT J	  	FORM OF DEPOSIT AGREEMENT	
		
EXHIBIT K	  	FORM OF LEGAL OPINION	
 
9(138)

AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (this “ Lease ”) is made and entered into as of March 26, 2007
BETWEEN :
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. , a Mexican company whose address and principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1, Col. Santa Fe Peña Blanca, De. Alvaro Obregon, México, D.F. 01012 (“ Lessee ”)
AND
Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa , a Mexican company whose address and principal place of business is at Insurgentes Sur No. 3500, P.B., Col. Peña Pobre, Mexico, D.F., C.P. 14060 (“ Lessor ”). 1

1  	The Lessor does not have approval of the Ministry of Finance and Public Credit as such is not required, however it shall be subject to the supervision of the National Banking and Stock Commission.	
 
10

The subject matter of this Lease is one (1) new Airbus A319-133 aircraft (as more particularly described in the Acceptance Certificate). In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease which reflects the determinant motivation of their will to enter into the same, Lessor hereby agrees to lease to Lessee and Lessee hereby agrees to lease from Lessor the Aircraft (as hereinafter defined) and the parties further agree as follows:
 
1.	DEFINITIONS	
Except where the context otherwise requires, the following words have the following meanings for all purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the words. Any agreement defined below includes each amendment, modification, supplement and waiver thereto in effect from time to time.
 
1.1	General Definitions	
“ Acceptance Certificate ” means the acceptance certificate substantially in the form of Exhibit E hereto.
“ Aircraft ” means the Airframe, two (2) Engines, APU, Parts and Aircraft Documentation, as the context permits or requires, individually or collectively.
“ Aircraft Documentation ” means all (a) log books, Aircraft records, manuals and other documents provided to Lessee in connection with and relating to the Aircraft, (b) documents listed in the Acceptance Certificate and (c) any other documents required to be maintained in respect of the Aircraft or any Part thereof during the Lease Term and until the Termination Date by the Aviation Authority, Lessee’s Maintenance Program and this Lease.
“ Airframe ” means the airframe listed in the Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding the Engines or any engines and the APU).
“ Air Navigation Charges ” include all navigation, over-flight charges and other charges incurred in connection with air navigation or movement of aircraft.
“ Airport Charges ” include all charges incurred in connection with the landing, parking or taking off of aircraft at airports or for the use of, or for services provided at, airports.
“ Airworthiness Directives ” or “ ADs ” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by the Aviation Authority, the FAA and all Consignes de Navigabilite issued by the French Direction Generale de l’Aviation Civile .
“ APU ” means (a) the auxiliary power unit listed in the Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by Lessor and leased by Lessor to Lessee pursuant to Article 17.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in Lessor in accordance with the terms of Article 11.4.
 
11(138)

“ Aviation Authority ” means the Dirección General de Aeronáutica Civil of Mexico or any Government Entity which under the Laws of Mexico from time to time has control over civil aviation or the registration, airworthiness, maintenance standards or operation of aircraft in Mexico. If the Aircraft is registered in a country other than Mexico, “Aviation Authority” means the agency which regulates civil aviation in such other country.
“ Aviation Documents ” means any or all of the following which at any time may be obtained from the Aviation Authority: (a) a ferry flight permit from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) a duly filed application for registration of the Aircraft with the Aviation Authority, (c) the certificate of registration for the Aircraft issued by the Aviation Authority with Lessor listed as owner of the Aircraft, (d) a standard certificate of airworthiness for the Aircraft specifying transport category (passenger) and evidencing registration of Lessee as operator of the Aircraft, (e) such recordation of Lessor’s title to the Aircraft and Lessor’s or Lessor’s Lender’s interest in this Lease and Lessor’s Lender’s security interest in the Aircraft as may be available in the State of Registration, (f) concession and/or air transport permit, (g) an air operator’s certificate, including the Aircraft listed as incorporated in the Operations Specifications of Lessee and (h) all such other authorizations, approvals, consents and certificates in the State of Registration as may be required to enable Lessee lawfully to operate the Aircraft.
“ Business Day ” means a day other than a Saturday or Sunday on which the banks in New York City, London, England, and in Mexico City, Mexico are open for the transaction of business of the nature required by this Lease.
“ Cape Town Convention ” means the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the “ Protocol ”), both signed in Cape Town, South Africa on November 16, 2001 together with any protocols, regulations, rules, orders, agreements, instruments, amendments, supplements, revisions or otherwise that have or may be subsequently made in connection with the Convention and/or the Protocol by the “Supervisory Authority” (as defined in the Protocol), the “International Registry” or “Registrar” (as defined in the Convention) or an appropriate “registry authority” (as defined in the Protocol) or any other international or national body or authority having jurisdiction over Lessee or the Aircraft.
“ Creditor ” means any lessor, owner, bank, lender, mortgagee or other Person which is the owner of or has any interest in an aircraft engine or aircraft operated by Lessee.
“ Creditor Agreement ” means the applicable agreement between a Creditor and Lessee or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by Lessee on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
 
12(138)

“ Cycle ” means (a) with respect to the Airframe, one take-off and landing of the Aircraft and (b) with respect to an Engine, one take-off and landing of the aircraft on which the relevant Engine is installed.
“ Default ” means any event which, upon the giving of notice, the lapse of time and/or a relevant determination, would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft from Lessor to Lessee pursuant to Articles 2 and 5 of this Lease.
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means the Manufacturer’s facilities in Hamburg, Germany.
“ Deposit Agreement ” means the irrevocable deposit agreement entered as of the date of this Lease between Lessor and Lessee in accordance to which Lessee shall have delivered to Lessor a security deposit in the amount of ***** in order to guarantee the compliance by Lessee with its obligations under this Lease for its lease of the Aircraft, substantially in the form of Exhibit J hereto.
“ Dollars ”, “ $ ” and “ US$ ” mean the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency or any successor thereto.
“ Engine ” means (a) each of the IAE V2527M-A5 engines bearing manufacturer’s serial number V12561 and V12563 respectively, (b) any replacement engine acquired by Lessor and leased by Lessor to Lessee pursuant to Article 17.5 following a Total Loss of an Engine and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in Lessor in accordance with the terms of Article 11.4.
“ Engine Performance Restoration Shop Visit ” shall have the meaning as set forth in Exhibit A .
“ Event of Default ” means any of the events referred to in Article 23.2.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the U.S.
“ FARs ” means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
13(138)

“ Flight Hour ” means (a) with respect to the Airframe, each hour or part thereof (rounded up to the nearest two (2) decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take-off until the wheels of the Aircraft next touch the ground on the next following landing, and (b) with respect to an Engine, each hour or part thereof (rounded up to the nearest two (2) decimal places) elapsing from the moment the wheels of the aircraft on which the relevant Engine is installed leave the ground on take-off until the wheels of such aircraft next touch the ground on the next following landing.
“ Geneva Convention ” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland, on June 19, 1948.
“ Government Entity ” means any (a) federal, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof and (c) association, organization or institution of which any of the entities listed in (a) or (b) is a member or to whose jurisdiction any such entity is subject.
“ Heavy Repair ” has, in relation to the APU, the meaning ascribed to such term in the OEM’s Component Maintenance Manual Section 4.1 General Workscope Related Definitions, as revised.
“ Landing Gear ” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.
“ Law ” means any (a) statute, decree, constitution, regulation, rule, norm, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party, (c) judicial or administrative interpretation or application of any of the foregoing, (d) any binding judicial precedent having the force of law or any jurisprudence issued by the Supreme Court of Mexico.
“ Lease ” means this Aircraft Lease Agreement, together with all Exhibits hereto.
“ Lessee’s Parent ” means Controladora Vuela Compañía de Aviación S.A. de C.V., a Mexican company.
“ Lessor’s Lien ” means any Security Interest created by or attributable to Lessor or any Lessor’s Lender or any affiliate of either.
“ LIBOR ” means in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Lease:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter Bank Offered Rate, as appearing on page BBAMI of Bloomberg (or successor or replacement page), or failing that, Reuters (or successor	
 
14(138)

 	or replacement page), or failing that, an equivalent page published by an alternative information provider for the specified period after 11.00 a.m. on the quotation date therefore; or	
 
 	(b)	if the applicable rate is not published as set forth in subsection a) of this definition, or is not determined in any way whatsoever, the applicable rate shall be the rate the market recognizes as the rate that has expressly replaced or substituted such rate, furthermore, in the event that either the applicable rate ceases to exist or a replacement rate is not expressly established, the parties shall convene to agree in good faith on a new applicable rate within three (3) Business Days following such event.	
For the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined.
“ LLP ” means any life limited Part.
“ Maintenance Program ” means Lessee’s maintenance program as approved by the Aviation Authority or such other maintenance program as Lessor may approve in writing, with such approval not to be unreasonably withheld.
“ Manufacturer ” means Airbus S.A.S.
“ Medium Repair ” has, in relation to the APU, the meaning ascribed to such term in the OEM’s Component Maintenance Manual Section 4.1 General Workscope Related Definitions, as revised.
“ Mexico ” means the United Mexican States.
“ MPD ” means at any relevant time, the latest revision of the Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.
“ Operative Documents ” means each of this Lease, any amendments hereto, the Acceptance Certificate, the Warranty Assignments and any other documentation in connection with the leasing of the Aircraft by Lessee from Lessor.
“ Overhaul ” means the full reconditioning of the Airframe, an Engine, the APU, Landing Gear, module or Part, as the case may be, in which such equipment has been disassembled (in accordance with Manufacturer’s and/or Maintenance Program requirements, as applicable), cleaned, thoroughly inspected and returned to the highest standard specified by, excluding the Engines, the applicable manufacturer’s overhaul manuals, and, in case of the Engines, the Engine manufacturer’s maintenance management plan.
 
15(138)

“ Part ” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, Lessee furnished or Lessor purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of Lessor.
“ Permitted Lien ” means (a) Lessor’s Liens, (b) Security Interests arising in the ordinary course of Lessee’s business for Taxes either not yet assessed or, if assessed, not yet due or being contested in good faith in accordance with Article 14.5, (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided), (c) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ liens or similar Security Interests arising by operation of Law after the Delivery Date in the ordinary course of Lessee’s business for amounts which are either not yet due or are being contested in good faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided) and (d) liens in respect of judgments which have been outstanding for less than 30 days or which have been stayed pending appeal so long as, in the case of (b), (c) or (d) above, such proceedings do not involve any material likelihood of sale, forfeiture or loss of the Aircraft.
“ Person ” means any individual including any individual conducting business activities, or any legal entity including any firm, partnership, joint venture, trust, corporation, company, limited liability company, Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether having distinct legal personality or not.
“ Prohibited Country ” means any country comprised by Exhibit B , as revised from time to time.
“ Purchase Agreement ” means the A320 Family Purchase Agreement dated October 28, 2005 between Manufacturer, as seller, and Lessee’s Parent, as purchaser in respect of the Aircraft.
“ Purchase Agreement Assignment ” means the Purchase Agreement Assignment dated March 28, 2007, between Lessee’s Parent, as assignor, Lessor, as assignee, and Lessee, as lessee, in respect of the Purchase Agreement, including the Consent and Agreement of Manufacturer.
“ Security Interest ” means any encumbrance or security interest, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title retention, attachment, levy, claim, or right of possession or detention.
 
16(138)

“ State of Registration ” means Mexico or such other country or state of registration of the Aircraft as Lessor may approve in writing.
“ U.S. ” means the United States of America.
“ Warranty Assignments ” mean (i) the Airframe Warranty Agreement dated as of March 28, 2007 among Lessee’s Parent, Lessor and Lessee with the consent and agreement of Manufacturer in relation to the Airframe, and (ii) the Engine Warranty Assignment dated as of March 28, 2007 among IAE International Aero Engines AG, Lessee’s Parent, Lessor and Lessee in relation to the Engines.
 
1.2	Specific Definitions	
The following terms are defined in the Articles referenced below:

Terms	  	Article	 	
		
Agreed Value	  	 	17.1	  	
Airframe Structural Maintenance Fund	  	 	4.3	  	
APU Maintenance Fund	  	 	4.3	  	
Default Interest	  	 	4.6	  	
Engine Performance Restoration	  				
Maintenance Fund	  	 	4.3	  	
Engine LLP Maintenance Fund	  	 	4.3	  	
Excluded Taxes	  	 	14.2	  	
Damages and Prejudices	  	 	15.1	  	
Expiration Date	  	 	3.1	  	
Indemnitees	  	 	15.1	  	
Landing Gear Maintenance Fund	  	 	4.3	  	
Lease Term	  	 	3.1	  	
Lessor’s Assignee	  	 	22.2.1	  	
Lessor’s Bank Account	  	 	4.5	  	
Lessor’s Lender	  	 	22.3	  	
Maintenance Fund	  	 	4.3	  	
Modification	  	 	11.8.1	  	
Multiparty Sublease	  	 	10.4	  	
Multiparty Sublessee	  	 	10.4	  	
Net Total Loss Proceeds	  	 	17.1	  	
Rent	  	 	4.2	  	
Security Deposit	  	 	4.1	  	
Tax Indemnitee	  	 	14.1	  	
Taxes	  	 	14.1	  	
Termination Date	  	 	3.2	  	
Total Loss	  	 	17.1	  	
Total Loss Date	  	 	17.1	  	
Total Loss Proceeds	  	 	17.1	  	
Waste Expense	  	 	12.3	  	
 
17(138)

2.	DELIVERY	
 
2.1	Delivery	
Subject to the terms and conditions of this Lease, Lessor will deliver the Aircraft to Lessee on the Delivery Date (as defined in the Purchase Agreement Assignment) at the Delivery Location.
 
2.2	Delivery Date	
This Lease will commence on the Delivery Date (as defined in the Purchase Agreement Assignment), which is expected to be on or about March 28, 2007. On the Delivery Date, Lessee shall execute and deliver to Lessor the Acceptance Certificate confirming Delivery and commencement of the Lease.
 
2.3	Delivery Subject to the Purchase Agreement Assignment	
Lessor and Lessee expressly acknowledge that Delivery of the Aircraft to Lessee under this Lease is subject to and conditioned upon delivery of the Aircraft to Lessor under the Purchase Agreement Assignment.
 
2.4	No Lessor Liability	
Lessor shall have no liability for any loss, damage or expense, or any loss of profit, arising from any delay or failure in Delivery to Lessee unless such delay or failure arises as a direct consequence of the willful misconduct or breach of any obligation under this Lease of or by Lessor, and in no event shall Lessor be liable for any delay or failure which is caused by any breach of this Lease or delay on the part of Lessee or Lessee’s Parent or by any breach of the Purchase Agreement or the Purchase Agreement Assignment other than by Lessor.
 
2.5	Total Loss of Aircraft Prior to the Delivery Date	
If a Total Loss of the Aircraft occurs prior to the Delivery Date, this Lease shall automatically terminate and neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit and any prepaid Rent received by Lessor.
 
18(138)

2.6	Termination of the Purchase Agreement Assignment	
If the Purchase Agreement Assignment is terminated and/or the Delivery Date under the Purchase Agreement Assignment does not occur for any reason whatsoever, this Lease shall automatically terminate and neither party will have any further liability to the other, except that Lessor will return to Lessee the Security Deposit and any prepaid Rent received by Lessor, provided that no Default or Event of Default has occurred under this Lease. Notwithstanding the foregoing, Lessor shall be entitled to keep the Security Deposit if the Purchase Agreement Assignment is terminated and/or the Delivery Date under the Purchase Agreement Assignment does not occur for any reason not directly attributable to Lessor.
 
19(138)

3.	LEASE TERM	
 
3.1	Lease Term	
The term of leasing of the Aircraft (“ Lease Term ”) shall be mandatory (“ plazo forzoso ”) from the time it commences on the Delivery Date and until and including September 30, 2016 (One Hundred Fourteen (114) months after April 1, 2007) (“ Expiration Date ”).
 
3.2	Termination Date	
This Lease may terminate on any of the dates set forth below:
 
 	(a)	the Expiration Date, provided Lessee returns the Aircraft to Lessor on the Expiration Date in the condition required by Article 21; or	
 
 	(b)	a date earlier than the Expiration Date, if:	
 
 	(i)	there is a Total Loss of the Aircraft prior to the Delivery Date pursuant to Article 2.5;	
 
 	(ii)	termination of this Lease occurs pursuant to Article 2.6;	
 
 	(iii)	there is a Total Loss of the Aircraft and payment in full of all amounts payable by Lessee to Lessor is made to Lessor or Lessor’s Lender in accordance with and as required under Article 17.3; or	
 
 	(iv)	an Event of Default occurs and Lessor terminates this Lease and repossesses the Aircraft or otherwise terminates this Lease in accordance with Article 23.3.	
 
 	(c)	a date later than the Expiration Date if:	
 
 	(i)	an Event of Default occurs hereunder by Lessee returning the Aircraft in the condition required by this Lease after the Expiration Date; or	
 
 	(ii)	an Event of Default occurs and Lessor repossesses the Aircraft or otherwise terminates this Lease pursuant to Article 23.3.	
The “ Termination Date ” is the date on which this Lease terminates because one of the above has occurred.
 
20(138)

4.	SECURITY DEPOSIT, RENT, MAINTENANCE FUNDS AND OTHER PAYMENTS	
 
4.1	Security Deposit	
In accordance with and subject to the provisions of the Deposit Agreement, which shall be executed by the parties in the form attached hereto as Exhibit J , Lessee will pay Lessor a cash security deposit of ***** in connection with the leasing of the Aircraft (the “ Security Deposit ”) and Lessor shall hold, apply, retain and return such Security Deposit in accordance with the applicable provisions of this Lease and the Deposit Agreement.
 
4.2	Rent	
 
4.2.1	Subject to the adjustment pursuant to Article 4.2.2 below Lessee will pay Lessor the amount of ***** payable monthly in advance as rent for the Aircraft (“ Rent ”).	
 
4.2.2	The amount of Rent set out in Article 4.2.1 is based on the average of the nine (9) year and ten (10) year US Swap Rate being equal to *****. The amount of Rent will increase or decrease, as the case may be, by ***** for each basis point such rate differs from ***** two (2) Business Days prior to the Delivery Date and will thereafter be fixed throughout the Lease Term.	
 
4.2.3	Lessee will pay Lessor the first payment of Rent during the Lease Term no later than on April 2, 2007. Such first payment of Rent will comprise rent for the Aircraft on a prorated basis for the period from and including the Delivery Date until and including April 30, 2007. Each subsequent payment of Rent will be due monthly on the 1 st day of each month during the Lease Term except that, if such day is not a Business Day, the Rent will be due on the immediately succeeding Business Day.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
21(138)

4.3	Maintenance Funds	
 
4.3.1	Lessee will pay to Lessor (or to whomever Lessor may from time to time designate in conformity with Article 4.3.6) contributions for the Maintenance Funds related to the concepts described below, based on Lessee’s use of the Aircraft during the Lease Term, in the following amounts (individually, “ Airframe Structural Maintenance Fund ” “ Engine Performance Restoration Maintenance Fund ,” “ Engine LLP Maintenance Fund ” “ APU Maintenance Fund ” and “ Landing Gear Maintenance Fund ”, and collectively “ Maintenance Funds ”). It is hereby agreed that the Maintenance Funds shall be used for the benefit of the Aircraft as hereinafter determined and are for such purpose considered to be an integral part thereof. In accordance with the provisions of this Lease, Lessee shall be entitled to withdraw and receive payment from such Maintenance Funds as provided for in this Lease with respect to agreed maintenance performed on the Aircraft, Airframe, Engines, APU and Landing Gear as applicable:	

Type of Maintenance Fund	 	Amount of Maintenance Fund	
		
Airframe Structural Maintenance Fund:	 	6Y Check:      ***** per month
12Y Check:    ***** per month	
		
Engine Performance Restoration Maintenance Fund:	 	***** for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Engine LLP Maintenance Fund:	 	***** for each Engine (payable with the Engine is utilized on the Aircraft or another aircraft).	
		
APU Maintenance Fund:	 	***** per APU operating hour (payable when the APU is utilized on the Aircraft or another aircraft)	
		
Landing Gear Maintenance Fund:	 	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
22(138)

4.3.2	The Engine Performance Restoration Maintenance Fund rate above assumes a Flight Hour-to-Cycle ratio of 1.8:1 and that the engine thrust levels have been de-rated *****. Depending on Lessee’s Flight Hour-to-Cycle ratio for the Aircraft (or such other aircraft on which the Engine is installed) and the thrust rating of the Engines, the Engine Performance Restoration Maintenance Fund rate will be adjusted in accordance with the following:	

Ratio	  	1:1	 	1.25:1	 	1.5:1	 	1.8:1	 	2:1	 	2.25:1	 	2.5:1	 	2.75:1	 	3:1	
***** de-rating US$ (2007)	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
***** de-rating US$ (2007)	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
4.3.3	In the first calendar year of the Lease Term, Lessee will pay Engine Performance Restoration Maintenance Fund based upon an assumed Flight Hour-to-Cycle ratio of 1.8:1. A calculation of Lessee’s actual Flight Hour-to-Cycle ratio will be made annually as of May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008, and any difference in Engine Performance Restoration Maintenance Fund will be reconciled on the date when the next Maintenance Fund payment is due (in accordance with Article 4.3.6) following such calculation. Lessee’s actual Flight Hour-to-Cycle ratio during such calendar year (or portion thereof) will set the Engine Performance Restoration Maintenance Fund for the succeeding calendar year.	
 
4.3.4	If in any calendar year (or portion thereof) of the Lease Term, the Airframe is operated more Cycles than the maximum number of Cycles which would result from an average Flight Hour-to-Cycle cycle ratio of 1.25 to 1, Lessee will pay Lessor as additional Maintenance Fund ***** for each Airframe Cycle the Airframe actually operated during such period in excess of the number of Cycles which result from an average Flight Hour-to-Cycle ratio of 1.25 to 1. A calculation will be made as of May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008, and such additional Maintenance Fund payment will be due and payable by Lessee on the date when the next Maintenance Fund payment is due (in accordance with Article 4.3.6) following such calculation. Such additional Maintenance Fund payment will not be available for withdrawal to Lessee pursuant to Article 0.	
 
4.3.5	The amounts of the Maintenance Funds in this Article 4.3 are expressed in April 2007 U.S. Dollars and will increase annually by ***** on May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008.	
 
4.3.6	The Maintenance Funds will be paid by Lessee on or before the fifteenth (15 th ) day of the next calendar month following the month in which the Delivery Date occurs and thereafter monthly during the Lease Term. If the fifteenth (15 th ) day of any calendar month is not a Business Day, the Maintenance Funds will be due on the immediately succeeding Business Day. All Maintenance Funds for flying performed during the month in which the Termination Date occurs (and the preceding month, unless paid) will be paid on the Termination Date, unless otherwise agreed by the parties. Lessee will pay the monthly Airframe Structural Maintenance Fund and the monthly Landing Gear Maintenance Fund on a prorated basis for any period not constituting a full month during the Lease Term.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
23(138)

4.3.7	The Maintenance Funds shall be used for agreed maintenance, repair and overhaul of the Aircraft including the Airframe, Engine, Engine LLPs, APU and Landing Gear in accordance with the provisions of this Article 4 and Article 12 of this Lease. The Maintenance Funds therefore are not considered a deposit and subject in each case to Lessee’s rights and Lessor’s obligations under Article 12 and Article 17 of this Lease, cannot be subject of reimbursement to Lessee but shall be considered the sole and exclusive property of Lessor as owner of the Aircraft. No interest will accrue or be paid at any time to Lessee on such Maintenance Funds and, subject to Lessor’s obligations under Article 12 and Article 17, Lessor may commingle the Maintenance Funds with Lessor’s general funds or may determine in its sole discretion that such be received and administered by a designated third party which shall be acting as trustee in respect to such funds and which shall conduct the allocation thereof in accordance with this Lease.	
 
4.4	Allocation of Payments	
Lessor or any third party designated in conformity with Article 4.3.7 of this Lease shall apply, hold, retain, invest, pay and otherwise manage any amounts paid or recovered in respect of Lessee’s liabilities hereunder in accordance with the provisions of this Lease.
 
4.5	Lessor’s Bank Account	
 
4.5.1	Payments due under this Lease will be made to the bank account(s) as Lessor may from time to time designate by written notice (the “ Lessor’s Bank Account ”).	
 
4.5.2	When it is stated in this Lease that an instalment of the Security Deposit, the monthly Rent, Maintenance Funds or any other payment is due or must be paid or made by Lessee by a specified date, then such payment must actually be received by Lessor’s bank with instructions for deposit in Lessor’s Bank Account on or before such specified date.	
 
4.6	Default Interest	
If Lessor does not receive the Rent or any other amount on or before the specific date when due, Lessee will pay Lessor as supplemental Rent (by way of agreed compensation of the cost of money and not as a conventional penalty) interest on any due and unpaid amounts payable by Lessee under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to ***** in effect on the date on which
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
24(138)

the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at Lessor’s Bank Account or, in the case of Lessor’s performance of Lessee’s obligations hereunder, from the date of payment by Lessor through the date of Lessee’s repayment to Lessor (“ Default Interest ”).
 
4.7	No Deductions or Withholdings	
 
4.7.1	All payments by Lessee under this Lease, including the Security Deposit, Rent, Maintenance Funds, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of setoff, counterclaim, duties, or Taxes (as defined in Article 14) imposed in the State of Registration or any jurisdiction from which such payments are made (other than Taxes excluded under Article 14.2) unless Lessee is prohibited by Law from doing so, in which event Lessee will gross up the payment amount such that the net payment received by Lessor after any deduction or withholding equals the amounts called for under this Lease. Lessee will also do all of the following:	
 
 	(i)	Ensure that the deduction or withholding does not exceed the minimum amount legally required;	
 
 	(ii)	Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto); and	
 
 	(iii)	Furnish to Lessor within thirty (30) days after each payment a certified copy of the corresponding tax form or an official receipt of the relevant Government Entities involved, or such other evidence of payment as is in form and substance acceptable to Lessor, acting reasonably, for all amounts so deducted or withheld.	
 
4.7.2	As of the date of this Lease, Lessor is situated in Mexico and both parties agree that as of the date of this Lease no withholding Taxes are applicable in respect to any amounts payable hereunder by Lessee. Lessee will indemnify Lessor for any subsequent withholding Taxes imposed on any amounts payable hereunder arising as a result of changes in Mexican Law or the Law of any jurisdiction from which Lessee elects to make payments occurring after the Delivery Date and during the Lease Term, except for any such Tax or Taxes as may arise in connection with a voluntary or involuntary assignment, sale or other disposition by Lessor or any Lessor’s Lender of any of their respective right, title or interest in the Lease or the Aircraft or both which transfer does not arise as a result of the enforcement of any remedies by Lessor or Lessor’s Lender following the occurrence and during the continuation of an Event of Default or an assignment, sale or other disposition made at the request by Lessee or otherwise rendered necessary as a result of an act or omission of Lessee.	
 
25(138)

4.8	Value Added Taxes	
The Rent and other amounts payable by Lessee under this Lease are exclusive of any sales or use tax, value added tax, or similar tax, duty or imposition.
 
4.10	Net Lease	
 
4.10.1	This Lease is a net lease and Lessee’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:	
 
 	(a)	any right of setoff, counterclaim, recoupment, defense or other right (including any right of reimbursement) which Lessee may have against Lessor, Manufacturer, the Engine manufacturer or any other Person for any reason, including any claim Lessee may have for the foregoing;	
 
 	(b)	unavailability or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of any jurisdiction or Total Loss of the Aircraft. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Article 2445 and other applicable of the Federal Civil Code.;	
 
 	(c)	insolvency, concurso mercantil, bankruptcy, judicial recuperation, reorganization, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against Lessor, Lessee, Manufacturer, the Engine manufacturer or any other Person;	
 
 	(d)	invalidity or unenforceability or lack of due authorization of or other defect in this Lease;	
 
 	(e)	failure or delay on the part of any party to perform its obligations under this Lease; or	
 
 	(f)	any other circumstance which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of Lessee hereunder, other than a Total Loss, provided that Lessor shall have received all amounts then due and owing by Lessee to Lessor hereunder.	
 
26(138)

4.10.2	This Lease shall not, except as expressly stated herein, be cancellable by Lessee and Lessee hereby expressly waives any and all right which it may now or at anytime hereafter have, whether by statute or otherwise, to terminate, abate, cancel, quit, reduce, defer, suspend, or surrender this Lease, the Aircraft or any obligation assumed by Lessee hereunder. Nothing in this Article 4.10 will be construed to limit Lessee’s right to separately pursue in a court of law any claim it may have against any Person arising as a result of the breach of any obligation of such Person to Lessee.	
 
4.9	Currency Indemnity	
If under any applicable Law, whether as a result of a judgment against Lessee or the liquidation of Lessee or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, Lessee will as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. If the amount received by Lessor upon converting the payment into Dollars exceeds the amount payable under this Lease, Lessor will remit such excess to Lessee. For the purposes of this paragraph “rate of exchange” means the rate at which Lessor is able on the relevant date to purchase Dollars in New York or London (at Lessor’s option) with such other currency.
 
4.10	Lessor Performance of Lessee Obligation	
If Lessee fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, Lessor may (but is not required to) at its election after the expiry of any applicable grace periods and without having waived all or any of its rights in Law and/or hereunder, perform such obligation and/or pay such amount. Within five (5) Business Days after written notice to Lessee of the amount paid by Lessor on behalf of Lessee, Lessee will repay such amount together with Default Interest from the date of payment by Lessor until the date of repayment by Lessee. Any payment or performance by Lessor of a Lessee obligation hereunder will not affect the occurrence or continuance of the corresponding Event of Default, provided, however, that Lessee’s repayment of the amounts required under this Article shall be sufficient to cure such Event of Default.
 
27(138)

4.11	Consideration for Rent and Other Amounts	
The amount of the Rent and other payments contained herein are in consideration of Lessee’s waiver of warranties and indemnities set forth in Articles 7 and 15, respectively, and the other provisions of this Lease.
 
28(138)

5.	CONDITION OF AIRCRAFT	
 
5.1	Lessee Selection of Aircraft	
LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN, TYPE AND ALL OTHER FACTS AND CIRCUMSTANCES AS RELEVANT TO LESSEE AND ITS BUSINESS. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
 
5.2	Condition at the Delivery Date	
At the Delivery Date, the Aircraft will be in the same condition as delivered to Lessor under the Purchase Agreement.
 
5.3	Delivery of Aircraft to Lessee	
Subject to Lessee having satisfied all of the conditions precedent to Delivery set forth herein or the waiver of any of the same by Lessor in Lessor’s discretion, Lessor will tender the Aircraft for Delivery to Lessee on the Delivery Date at the Delivery Location. Upon the tender of the Aircraft by Lessor to Lessee, Lessee will accept the Aircraft and deliver to Lessor the Acceptance Certificate, duly executed. The date of tender by Lessor to Lessee in accordance with this Lease will be deemed to be the Delivery Date for all purposes under this Lease, including, but not limited to, the commencement of Lessee’s obligation to pay Rent hereunder.
 
5.4	Lessee Acceptance of Aircraft	
If Lessee fails to comply with the conditions contained in Articles 6.1 and 6.2 and, as a result thereof, Delivery under this Lease cannot take place, or if Lessee fails to take Delivery of the Aircraft when properly tendered for Delivery by Lessor in accordance with the terms and conditions set out herein, Lessee will indemnify Lessor and hold Lessor harmless from all costs, expenses and damages enumerated or otherwise described in Article 23.3 which are incurred by Lessor as a direct result thereof.
 
29(138)

6.	PRE-DELIVERY, DELIVERY AND POST DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	
 
6.1	Pre-Delivery Requirements	
Lessee will do at its cost each of the following within the time frames set forth below:
 
6.1.1	On or prior to the Delivery Date , Lessee will deliver to Lessor each of the following, each in form and substance satisfactory to Lessor:	
 
 	(a)	copies of resolutions of the Board of Directors of Lessee or other written evidence of appropriate corporate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of Lessee hereunder;	
 
 	(b)	a certified copy of Lessee’s constitutional documents and any modifications thereto; and	
 
 	(c)	a copy of Lessee’s scheduled operating permit, air operator’s certificate and any other licenses permits or approvals relevant to Lessee’s operation as a certified air carrier.	
 
 	(d)	a Certificate of Insurance and Brokers’ Letter of Undertaking reflecting the requirements of Exhibits C and D , respectively, from Lessee’s insurance brokers evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date;	
 
 	(e)	a legal opinion from Lessee’s general counsel ( Director Jurídico ) in substantially the form of Exhibit K attached hereto on the due execution by Lessee of the Operative Documents, enforceability against Lessee on the matters stipulated in Article 13.6 and ancillary matters;	
 
 	(f)	ferry permit for the Aircraft issued by the Aviation Authority;	
 
 	(g)	evidence that the interests of Lessor as owner of the Aircraft and as lessor under this Lease have been properly filed for registration with the Aviation Authority or that satisfactory arrangements for the filing of the same have been made;	
 
 	(h)	letters addressed to (i) any relevant air traffic control authorities or entities, (ii) any relevant airport operators or administrators, and (iii) any relevant	
 
30(138)

 	maintenance providers, pursuant to which Lessee authorizes any such authorities or entities to issue to Lessor, upon Lessor’s request (Lessor agrees that it shall only make one (1) such request per authority or entity in any twelve (12) month period or once per maintenance event with respect to the Engines, unless a Default or Event of Default has occurred) and with copy to Lessee, a statement of account of all sums due by Lessee to the relevant authority or entity in respect of all aircraft (including, but not limited to, the Aircraft) operated by Lessee;	
 
 	(i)	a copy of such Aviation Documents or certified copies thereof as may be available prior to the Delivery Date;	
 
 	(j)	a power of attorney in the form of Exhibit F , which power of attorney shall have been duly executed by Lessee and properly notarized;	
 
 	(k)	a complete copy of the Maintenance Program for the Aircraft; and	
 
 	(l)	such other document or perform such other action as Lessor in its reasonable opinion deems necessary.	
 
6.1.2	No later than one (1) Business Day prior to the Delivery , Lessee will pay the first installment of Rent in accordance with Article 4.2.2.	
 
6.2	Delivery Requirements	
On the Delivery Date, each of the following will occur:
 
6.2.1	Lessee will pay any unpaid installments of the Security Deposit in accordance with Article 4.1.	
 
6.2.2	Upon proper tender of the Aircraft for delivery by Lessor, Lessee will execute and deliver to Lessor the Acceptance Certificate.	
 
6.2.3	Lessee will cause the Aircraft to be registered in the aviation section of the register of aircraft of the State of Registration noting the interests of Lessor as lessor and owner and Lessee as operator in accordance with applicable Law.	
 
6.2.4	Lessee will deliver to Lessor a certificate, in form and substance satisfactory to Lessor, signed by an officer of Lessee stating all of the following:	
 
 	(a)	the representations and warranties contained in Article 18.1 are true and accurate in all material respects on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and	
 
 	(b)	no Default or Event of Default has occurred and is continuing or will result from Lessee’s lease of the Aircraft hereunder.	
 
31(138)

6.2.5	Lessee will deliver to Lessor copies of such Aviation Documents as have not been previously delivered which are then available.	
 
6.2.6	Lessor will deliver to Lessee the Warranty Assignments duly executed by Lessor.	
 
6.3	Post Delivery Requirements	
As soon as available but no later than ten (10) Business Days after the Delivery Date , Lessee will provide Lessor with each of the following:
 
 	(a)	an authenticated copy of the certificate of registration issued by the register of aircraft of the State of Registration evidencing the registration of the Aircraft and noting, in accordance with applicable Law and the practices of the Registry, the interests of Lessor as lessor and owner and Lessee as operator of the Aircraft;	
 
 	(b)	an authenticated copy of the certificate of airworthiness for the Aircraft issued by the Aviation Authority;	
 
 	(c)	evidence confirming that all post Delivery requirements pursuant to this Article 6.3 have been completed as stipulated in Article 13.6;	
 
 	(d)	evidence, in form and substance satisfactory to Lessor, through an original copy of the corresponding importation petition ( pedimento ) or through the corresponding approval issued by the Customs Authority of the State of Registration, that all applicable import duties, fees or other Taxes, if any, payable upon the importation and/or customs clearance of the Aircraft into the State of Registration have been paid in full or that the same has been imported by Lessee under the temporary importation regime to which it is entitled in accordance with Article 106(v)(b) of the Customs Law; and	
 
 	(e)	copies of any other Aviation Documents not previously delivered and subject to any delay in delivery thereof caused by the Aviation Authority and not resulting from any act or omission of Lessee.	
 
32(138)

7.	DISCLAIMERS	
 
7.1	As Is, Where Is	
LESSEE AGREES THAT AS BETWEEN LESSEE AND LESSOR IN ITS CAPACITY AS OWNER AND LESSOR OF THE AIRCRAFT, IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS,” WITH ALL FAULTS ACCEPTED. LESSEE UNCONDITIONALLY AND IRREVOCABLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE), AND LESSEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY CLAIM IT MAY NOW OR HEREAFTER HAVE AGAINST LESSOR AND OR ANY LESSOR’S LENDER, IN RESPECT OF OR RELATING TO (a) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
 
7.2	Waiver of Warranty of Description	
IN CONSIDERATION OF, INTER ALIA, LESSOR’S ASSIGNMENT TO LESSEE OF ANY EXISTING AND ASSIGNABLE WARRANTIES OF MANUFACTURER AND THE ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION,
 
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ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN ANY APPLICABLE LAW RELATING TO SUCH WARRANTY OF DESCRIPTION.
 
7.3	Lessee Waiver	
Lessee hereby waives as between itself and Lessor and agrees not to seek to establish or enforce any rights and remedies, express or implied (whether statutory or otherwise), against Lessor or the Aircraft relating to any of the matters mentioned in Articles 7.1 or 7.2. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Articles 2412(V) and 2421 and other applicable of the Federal Civil Code.
 
7.4	Conclusive Proof	
AS BETWEEN LESSEE AND LESSOR IN ITS CAPACITY AS OWNER AND LESSOR OF THE AIRCRAFT, DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND ENGINES AND (a) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (b) THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO LESSEE.
 
7.5	No Lessor Liability for Losses	
Lessee agrees that Lessor will not be liable to Lessee, any sublessee or any Person, whether in contract or tort and however arising, for any cost, loss or damage (consequential or otherwise) arising out of the condition of the Aircraft, during the Lease Term whether or not due in whole or in part to the negligence (but not the wilful misconduct) of Lessor.
 
7.6	No Liability to Repair or Replace	
Lessor will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Articles 2412(II), 2416, 2417 and 2445 and other applicable of the Federal Civil Code.
 
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7.7	No Waiver	
Nothing in this Article 7 will be deemed to be a waiver by Lessee of any rights it may have against Manufacturer, the Engine manufacturer or any other Person other than Lessor or Lessor’s Lender, if any.
 
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8.	MANUFACTURERS’ AND VENDORS’ WARRANTIES	
 
8.1	Warranties	
With effect from the Delivery Date Lessor assigns to Lessee for the duration of the Lease Term and provided no Event of Default exists at any relevant time, the benefit of all assignable warranties by Manufacturer and the Engine manufacturer in relation to the Aircraft given to Lessor pursuant to the Warranties Assignments.
 
8.2	Reassignment	
On the Termination Date, the benefit of any warranty assigned by Lessor to Lessee pursuant to Article 8.1 will be reassigned automatically to Lessor or its designee (such reassignment shall be without prejudice to Lessee’s rights in respect of any claims made by Lessee during the Lease Term and which are pending on the Termination Date). Lessee’s rights under such warranties (including Lessee’s claims and rights to payment thereunder) will revert to Lessor during any period in which an Event of Default is continuing. Similarly, any additional warranties received by Lessee from Manufacturer, Engine manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will, to the extent such warranties are assignable, be automatically assigned by Lessee to Lessor or its designee on the Termination Date (such assignment shall be without prejudice to Lessee’s rights in respect of any claims made by Lessee during the Lease Term and which are pending on the Termination Date). Lessee at its own cost and expense will do all such things and execute such documents as may be reasonably required for these purposes.
 
8.3	Warranty Claims	
Lessee will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft and at Lessor’s request from time to time keep Lessor informed of any such actions. Lessee shall at all times inform Lessor of any such actions without requiring prior request from Lessor when any such claims are for amounts exceeding *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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9.	OPERATION OF AIRCRAFT	
 
9.1	Costs of Operation	
Lessee will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of this Lease or expiration of the Lease Term.
 
9.2	Compliance with Laws and Insurance	
Lessee agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft, subject to any approved sublease, and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which Lessee may operate. Lessee will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. Lessee will not permit the Aircraft to fly to any airport or country which is located in or is a Prohibited Country or which would cause Lessee, Lessor or Lessor’s Lender to be in violation of any Law applicable to either of them or the Aircraft. Further, Lessee will not permit the Aircraft to fly in or to any area of the world excluded from insurance coverage, other than as a result of any mechanical, climatic or other events beyond Lessee’s control and as a result of which renders the same necessary in order to preserve and protect the Aircraft, passengers or crew members, provided that Lessee removes the Aircraft from such jurisdiction immediately after such circumstances shall have ceased to exist.
 
9.3	Training	
Lessee will not use the Aircraft for testing or for training of flight crew members other than crew members of Lessee and will not use the Aircraft for training any more than it utilizes for training the other aircraft in its fleet.
 
9.4	No Violation of Insurance Policies	
Lessee will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods
 
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of any description, the carriage of which is prohibited by or would invalidate or otherwise limit coverage by such policies or do any other act or permit to be done anything which could be reasonably expected to invalidate or limít any such insurance which Lessee is required to carry and maintain as set forth in this Lease.
 
9.5	Flight and Airport Charges	
 
9.5.1	Lessee will pay promptly when due all Airport Charges and Air Navigation Charges and any and all charges payable by Lessee for the use of or for services provided at any airport, in respect of the Aircraft or to the extent any failure to pay the same in respect of any other aircraft operated by Lessee would reasonably be expected to give rise to a result in a Security Interest over the Aircraft, in respect of any other aircraft of Lessee, and will indemnify and hold Lessor and other Indemnitees harmless in respect of the same. This indemnity will continue in full force and effect notwithstanding the termination or expiration of the Lease Term for any reason or the return of the Aircraft.	
 
9.5.2	If requested by Lessor, Lessee will promptly provide Lessor with a list of the airports to which Lessee regularly operates the Aircraft or its other aircraft, and evidence, in form and substance reasonably satisfactory to Lessor, to confirm the status of Lessee’s payments to any airport, other aviation authority or airport or creditor claiming rights on the Aircraft for the Aircraft and its other aircraft.	
 
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10.	SUBLEASES	
 
10.1	No Sublease without Lessor Consent	
LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE 10 OR FOR MAINTENANCE, MODIFICATION, TESTING AND REPAIR IN ACCORDANCE WITH APPLICABLE PROVISIONS HEREOF) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED).
 
10.2	Lessor Costs	
Lessee will indemnify Lessor on demand for all reasonable costs and expenses (including reasonable legal fees) incurred in connection with Lessor’s assessment of any subleasing proposal (whether or not Lessor’s consent to such sublease is ultimately given provided that such consent is not unreasonably withheld) and implementation of the sublease.
 
10.3	Prohibited Countries	
No sublease will be permitted to any sublessee headquartered in, or having a principal place of operations in a Prohibited Country.
 
10.4	Approved Subleases	
Notwithstanding anything herein to the contrary, and subject to receipt by Lessor of prior written notice from Lessee, Lessee may sublease the Aircraft to TACA International Airlines, S.A. (“ TACA ”) under a sublease agreement, provided that such agreement meets the requirement of this Article 10 and provided further that no less than the current equity participation of TACA in Lessee subsists. Such sublease to TACA may allow TACA to sub-sublease the Aircraft to one or more of the following affiliates: TACA Costa Rica, S.A., Trans American Airlines, S.A. d.b.a. TACA Perú, Lineas Aereas Costarricenses, S.A. and/or AVIATECA, S.A. (each a “ Multiparty Sublessee ”) under a sublease or multiparty sublease agreement (“ Multiparty Sublease ”), provided that such agreement meets the requirements of this Article 10, and provided further that at all times during the term of such agreement, each of the relevant Multiparty Sublessees shall be affiliated with and remain under the operational control of TACA.
No sublease (including any sublease to TACA and any Multiparty Sublease) may allow for the pre-payment of rent payable under any sublease or Multiparty Sublease to Lessee as sublessor thereunder, unless such rent has been assigned to Lessor or Lessor’s Lender as security in conformity of Article 10.5.
 
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Any sublease approved by Lessor (including any sublease to TACA and any Multiparty Sublease) will be for a term no greater than the remaining Lease Term. The applicable sublease agreement (including any sublease to TACA and any Multiparty Sublease) will be consistent with this Lease and shall contain provisions consistent with this Lease protecting Lessor’s title to the Aircraft, the Security Interest of any Lessor’s Lender and Lessor’s interest in this Lease, providing appropriate Lessor and Lessor’s Lender disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by or for the benefit of the sublessee or Multiparty Sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease or Multiparty Sublease will be subject and subordinate to this Lease and to its effectiveness and should be terminated upon termination of this Lease for any reason whatsoever. For the avoidance of doubt, the parties agree that the subrogation described in Article 2482 of the Federal Civil Code shall not be applicable.
Lessor will have an opportunity to review any proposed sublease agreement (including any Multiparty Sublease) reasonably in advance in order to determine that it meets the requirements of this Article 10 and this Lease. Lessor shall be entitled to receive a copy thereof and to receive evidence of filing of the same at the Aviation Authority and at any other aviation authority or other authority or registry as required under applicable Law. Lessor may require an opinion of counsel in connection with any sublease or Multiparty Sublease, including an opinion concerning Lessor’s right to repossess the Aircraft and enforce any judgment obtained against any sublessee or any Multiparty Sublessee in the event of an Event of Default hereunder or under the sublease or Multiparty Sublease and to be subrogated to the rights of Lessee acting as sublessor thereunder if an Event of Default by Lessee shall occur and be continuing. Lessee will not amend the terms of any approved sublease agreement or Multiparty Sublease without the prior written consent of Lessor, such consent not to be unreasonably withheld.
 
10.5	Assignment of Sublease	
Any approved sublease or Multiparty Sublease and any advanced payments received thereunder, will be assigned to Lessor or Lessor’s Lender (as directed by Lessor) as security. Lessee will deliver a copy of the sublease or Multiparty Sublease to Lessor and make any filings necessary to protect Lessor’s or Lessor’s Lender’s Security Interest and provide evidence of such filings to Lessor.
 
40(138)

10.6	Wet Leases	
The wet leasing or charter of the Aircraft during the Lease Term (in which Lessee and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without Lessor’s consent, provided that (a) the Aircraft remains registered in the State of Registration, (b) the Aircraft will neither be based in nor operated in or to a Prohibited Country, and (c) Lessee complies with Articles 9.2 and 16.9 hereunder.
 
10.7	Continued Responsibility of Lessee	
Lessee will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.
 
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11.	MAINTENANCE OF AIRCRAFT	
 
11.1	General Obligation	
During the Lease Term and until the Termination Date, Lessee alone has the obligation, at its expense, to maintain and repair the Aircraft, Engines, APU and all of the Parts (a) in accordance with the Maintenance Program, (b) in accordance with FAA FAR Part 129 (c) in accordance with the rules and regulations of the Aviation Authority, (d) in accordance with Manufacturer’s manuals, (e) in accordance with any other regulations or requirements necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft at all times during the Lease Term and upon return of the Aircraft to Lessor for issuance of a Certificate of Airworthiness for transport category aircraft issued by the Aviation Authority and the FAA in accordance with FAA Part 21 (except during those periods when the Aircraft is undergoing maintenance, modification or repairs as required or permitted by this Lease and to the extent in conflict with the requirements of the Aviation Authority when the requirements of the Aviation Authority shall prevail solely when such shall be more strict or shall require the compliance of any requirements that shall not be already required by the FAA in accordance with FAR Part 129 and (f) in the same manner and with the same care as used by Lessee with respect to similar aircraft and engines operated by Lessee.
 
11.2	Specific Engine Requirements	
 
11.2.1	No Engine will remain in an unserviceable condition for more than ninety (90) days. Notwithstanding the foregoing, such period may be extended to one hundred eighty (180) days, provided that (i) Lessee has caused the relevant Engine to be inducted into an FAA approved maintenance repair organization in a timely manner, (ii) such delay in return to serviceability is due to factors beyond Lessee’s control, (iii) the relevant Engine is not in an unserviceable condition on the Expiration Date, and (iv) Lessee uses diligent efforts to return the Engine to a serviceable condition as soon as possible, provided that Lessee has provided evidence of (i), (ii), to the extent applicable (iii), and (iv), all to Lessor’s reasonable satisfaction.	
 
11.2.2	When replacing Parts in an Engine, Lessee will utilize only original equipment manufacturer parts (OEM parts). The foregoing will not apply to QEC and thrust reverser Parts. No FAA Designated Engineering Representative (DER) repairs will be allowed on the Engines, except with Lessor’s prior written approval, which shall not be unreasonably withheld.	
 
11.2.3	Lessee will not discriminate against the Engines with respect to Overhaul build standards and LLP replacements as compared with other engines of the same make and model of the Engines operated by Lessee.	
 
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11.2.4	With respect to any Engine shop visit of an Engine, Lessee will submit to Lessor at least thirty (30) days in advance the intended work scope of such shop visit for approval unless the shop visit is unscheduled, in which case the work scope will be submitted immediately when it becomes available to Lessee.	
 
11.2.5	Lessee will not enter into any engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine manufacturer or any other Engine maintenance facility or organization without Lessor’s prior written consent. Lessee will at its cost be responsible for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 21 even if such work is not covered by Lessee’s engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:	
 
 	(a)	Lessor will receive and retain the monthly Engine Performance Restoration Maintenance Funds paid by Lessee until an Engine Performance Restoration Shop Visit has been completed;	
 
 	(b)	Lessee will pay the Engine maintenance facility directly for any Engine Overhaul and repair costs (but not for any additional work requested by Lessor); and	
 
 	(c)	Lessee will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.	
Notwithstanding the foregoing, the parties recognize that the Engines will be subject to the fleet hour agreement between Lessee and the Engine manufacturer in effect on the Delivery Date.
 
11.3	Specific Obligations	
Without limiting Article 11.1, Lessee agrees that such maintenance and repairs will include but will not be limited to each of the following specific items:
 
 	(a)	performance in accordance with the Maintenance Program of all routine and non-routine maintenance work;	
 
 	(b)	incorporation in the Aircraft of all Airworthiness Directives, all alert service bulletins of Manufacturer, the Engine manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft. It is the intent of the parties that the Aircraft will not be discriminated from the rest of Lessee’s fleet in service bulletin compliance (including method of compliance) or other maintenance matters;	
 
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 	(c)	incorporation in the Maintenance Program for the Aircraft of a corrosion prevention and control program as recommended by Manufacturer and the correction of any discrepancies in accordance with the recommendations of Manufacturer and its structural repair manual. In addition, all inspected areas will be properly treated with corrosion inhibitor in accordance with Manufacturer’s guidelines;	
 
 	(d)	maintaining all maintenance documents, including flight logs, in English and in such a manner as required by the FAA and the Aviation Authority;	
 
 	(e)	maintaining all historical records for on-condition, condition monitored, hard time and LLPs (including FAA Form 8130-3s) in English and in such manner as required by the FAA and the Aviation Authority; and	
 
 	(f)	properly documenting in such a manner as required by the Aviation Authority all repairs, Modifications and alterations and the addition, removal or replacement of equipment, systems or components in accordance with the rules and regulations of the Aviation Authority and reflecting such items in the Aircraft Documentation and current status listings, also to include updating Manufacturer’s manuals. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s structural repair manual (or FAA approved data supported by an Airbus Repair Approval Sheet (RAS) or equivalent). All Modifications and alterations will also be accomplished in accordance with FAA approved data supported by a Design Organisation Approval or equivalent.	
 
11.4	Replacement of Parts	
 
11.4.1	Lessee, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair for use for any reason. In the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part provided that Lessee replaces such Part as promptly as practicable. All replacement Parts will (a) be owned by Lessee free and clear of all Security Interests (except Permitted Liens) (or, if not owned by Lessee, Lessee guarantees to Lessor such title and clearance of all Security Interests), (b) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (c) have a current “serviceable tag” (FAA 8130-3 or equivalent) of the manufacturer or maintenance facility providing such items to Lessee, indicating that such Parts are new, serviceable or Overhauled.	
 
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11.4.2	All Parts removed from the Airframe, any Engine or the APU will remain the property of Lessor and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Airframe, such Engine or the APU) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to Lessor under the Laws of the State of Registration and the lex situs. To the extent permitted by the Laws of the State of Registration and the lex situs it is the intent of Lessor and Lessee that without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Airframe, an Engine or the APU as above provided, (a) title to the removed Part will thereupon vest in Lessee, free and clear of all rights of Lessor and Lessor’s Liens, (b) title to the replacement Part will thereupon vest in Lessor free and clear of all rights of Lessee and (c) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Airframe, such Engine or the APU.	
 
11.5	Removal of Engines	
 
11.5.1	If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations or Modifications, title to such Engine will at all times remain vested in Lessor.	
 
11.5.2	Lessee will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that Lessee complies with each of the following obligations:	
 
 	(a)	the insurance requirements set forth in Article 16 and Exhibit C are in place;	
 
 	(b)	Lessee ensures that the identification plates referred to in Article 13.7 are not removed from any Engine upon such Engine being detached from the Aircraft; and	
 
 	(c)	title to the Engine remains with Lessor free from all Security Interests (except Permitted Liens) regardless of the location of the Engine or its attachment to or detachment from the Aircraft.	
 
11.6	Installation of Engines on Other Aircraft	
Any Engine removed from the Aircraft may be installed on another aircraft in Lessee’s fleet which utilizes engines of the same type as the Engine provided that one of the situations described in this Article 11.6 exists:
 
11.6.1	Lessee or Lessor has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).	
 
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11.6.2	All of the Creditors of Lessee of such aircraft enter into an engines cooperation, recognítion of rights or similar agreement with Lessor, in form and substance acceptable to Lessor, acting reasonably to recognize one another’s rights in the engines. Lessee will reimburse Lessor for its costs and expenses (including reasonable legal fees) in negotiating and finalizing any such agreement with Lessee and its Creditors.	
 
11.6.3	Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft (such agreement may be subject to reciprocal agreements by Lessor). Lessee hereby agrees that if Lessor’s title to an Engine is in fact divested under any such Creditor Agreement, such will be a Total Loss of such Engine and the provisions of Article 17.5 will apply. To the extent another Creditor Agreement contains such provisions, then Lessor hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither Lessor nor its successors or assigns nor any person lawfully claiming by or through Lessor will acquire or claim any right, title or interest in any engine in which Lessee or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any aircraft on which an Engine may be installed.	
 
11.7	Removal of APU	
 
11.7.1	If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations or Modifications, title to the APU will at all times remain vested in Lessor.	
 
11.7.2	Lessee will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that Lessee complies with each of the following obligations:	
 
 	(a)	the insurance requirements set forth in Article 16 and Exhibit C are in place;	
 
 	(b)	Lessee ensures that the identification plates referred to in Article 13.7 are not removed from the APU; and	
 
 	(c)	title to the APU remains with Lessor free from all Security Interests (except Permitted Liens) regardless of the location of the APU or its attachment to or detachment from the Aircraft.	
 
11.8	Modifications	
 
11.8.1	No modification, alteration, addition or removal to the Aircraft (“ Modification ”) expected to cost over *****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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*****, or material deviation from the Aircraft’s original type design or configuration will be made without the prior written consent of Lessor, which consent shall not be unreasonably withheld. “Modifications” do not include Airworthiness Directives or Manufacturer’s service bulletins or other mandatory orders required under this Lease, for compliance of which Lessor’s consent is not required.
 
11.8.2	Lessor may review Lessee’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by Lessor, Lessee will furnish Lessor (at Lessee’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All Modifications incorporated on the Aircraft will be properly documented in English in the Aircraft Documentation, to include being incorporated within the applicable maintenance and operations manuals, and will be approved by the FAA and the Aviation Authority on the Termination Date.	
 
11.8.3	Notwithstanding any other provision of this Lease, no Modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.	
 
11.8.4	No Modification will be made by Lessee if an Event of Default exists and is continuing hereunder.	
 
11.8.5	Unless otherwise agreed by Lessor in writing, all permanent or structural Modifications will forthwith become a part of the Aircraft and Lessee relinquishes to Lessor all rights and title thereto. However, all temporary and non-structural Modifications will remain the property of Lessee and, at Lessor’s request (or in the event that Lessee elects to keep such Modifications) will at Lessee’s cost, be removed from the Aircraft prior to return of the Aircraft, with Lessee restoring the Aircraft to the condition it was in prior to the Modification in a manner cosmetically acceptable to Lessor acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without Lessor’s permission during the continuance of an Event of Default hereunder and immediately upon the occurrence of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such Modifications will immediately vest in Lessor without prejudice or detriment of any outstanding obligations of Lessee, in the understanding that the vesting of rights, title and interest in such Modifications by Lessor shall in no form be considered to be in payment of any outstanding obligations of Lessee nor in any form construed or interpreted as a conventional penalty or as a remedy for an Event of Default of Lessee. Notwithstanding the foregoing, in absence of an Event of Default at the end of the Lease Term, title to any such temporary and non-structural Modifications will vest or, if applicable, revest in Lessee.	
 
11.8.6	Lessor will bear no liability for the cost of Modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
47(138)

11.9	Performance of Work by Third Parties	
Whenever maintenance and repair work on the Aircraft or Engines will be regularly performed by a Person other than Lessee, such Person will be an FAA authorized repair station. In addition, Lessee shall obtain Lessor’s consent to the maintenance facility that will perform “C” check maintenance on the Aircraft (such consent not to be unreasonably withheld, however, such consent is contingent upon such Person being approved by the Aviation Authority). For the purposes hereof, and provided that Aeromantenimiento S.A. shall remain an FAA or EASA certified maintenance facility, Lessor shall be deemed to have approved the performance of any maintenance, repairs, testing, inspections and modifications in relation to the Aircraft by such facility.
 
11.10	Reporting Requirements	
 
11.10.1	Commencing with a report furnished fifteen (15) days after the end of the calendar month of the Delivery Date, Lessee will furnish to Lessor a Monthly Report in English in the form attached hereto as Exhibit H . Each Monthly Report will be furnished within fifteen (15) days after the end of each calendar month during the Lease Term, except that the Monthly Report pertaining to the last month(s) (or any portion thereof) of flying will be furnished to Lessor on the Termination Date.	
 
11.10.2	Upon Lessor’s request, however not more frequently than two (2) times in any period of twelve (12) months, Lessee will provide to Lessor a Technical Evaluation Report in English for the Aircraft in the form and substance of Exhibit I , as revised.	
 
11.10.3	Lessee will provide Lessor with an electronic copy of all heavy maintenance or modification work, including all applicable approval certification, that has occurred on the Aircraft as soon as practicable after the event, but no later than three (3) months after such work has been accomplished.	
 
11.10.4	From time to time, Lessee will provide Lessor with such other technical information or documents as Lessor may reasonably request.	
 
11.11	Lessor Rights to Inspect Aircraft	
On reasonable notice, but not more frequently than once annually unless (i) a Default or an Event of Default has occurred and is continuing or Lessor is inspecting in order to verify cure or correction of any such Default or Event of Default, (ii) Lessor has reason to believe that a Default or an Event of Default may have occurred, (iii) during the last twelve (12) months of the Lease Term, Lessor is actively marketing the Aircraft for sale or reletting following the Expiration Date and has notified Lessee of the same in writing (in which case all inspections other than a follow up inspection for purposes of confirming cure of a Default with respect to such remarketing efforts shall be a Lessor’s
 
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cost notwithstanding anything to the contrary), Lessor and/or its authorized agents or representatives will have the right to inspect the Aircraft and Aircraft Documentation, which inspection shall be performed at Lessor’s cost unless a Default or Event of Default has occurred and is continuing or is discovered during such inspection, in which event Lessee shall pay or reimburse Lessor for such costs duly evidenced and supported promptly following demand. Lessor agrees that such requests will be coordinated with Lessee so as to cause as little practical disturbance to Lessee’s operation, use of the Aircraft and its personnel as practically possible having due regard to Lessor’s legitimate interest as Lessor to inspect the Aircraft. Lessee agrees to cooperate with Lessor reasonably in making the Aircraft and Aircraft Documentation available to such inspections. Lessor will have no duty to make any such inspection and will not incur any liability or obligation by reason of (and Lessee’s obligation to maintain the Aircraft at all times in the condition required by this Lease and Lessee’s indemnity obligations pursuant to Article 15 will apply notwithstanding) not making any such inspection or by reason of any reports it receives or any reviews it may make of the Aircraft records. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or if Lessor has reason to believe that a discrepancy exists in relation to Lessee’s maintenance obligations or the condition of the Aircraft required hereunder, open any other panels or exposing any bays, and, if required, to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.
 
11.12	Airworthiness Directives Cost Sharing	
Subject to the provisions of Article 0 ( mutatis mutandis ), in the event that an Airworthiness Directive is issued after the Delivery Date which Airworthiness Directive requires a modification to the Aircraft which must be performed or terminated prior to the Expiration Date or within One Hundred Eighty (180) days thereafter and the cost of which is in excess of *****, Lessor shall reimburse Lessee for the portion of such cost over ***** in accordance with the following formula:
*****
Where:
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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12.	USE OF MAINTENANCE FUNDS	
 
12.1	Airframe Structural Maintenance Fund	
 
12.1.1	Lessor will contribute the full amount of the Airframe Structural Maintenance Fund pertaining to the 6Y checks upon completion or performance of a 6Y check as described in the Maintenance Program and the rectification of any structural deficiencies resulting from such inspection. The amount to be paid by Lessor to Lessee hereunder will correspond to the full amount paid in to the Airframe Structural Maintenance Fund (6Y Check) as of the completion date of such “6Y” Check.	
 
12.1.2	Lessor will contribute the full amount of the Airframe Structural Maintenance Fund pertaining to both the “6Y” check and the “12Y” check upon completion or performance of a 12Y check, provided all such checks are completed during the same maintenance visit, as described in the Maintenance Program and the rectification of any structural deficiencies resulting from such inspection. The amount to be paid by Lessor to Lessee hereunder will correspond to the full amount paid in to the Airframe Structural Maintenance Fund (6Y Check and 12Y Check) as of the completion date of such “12Y” structural check.	
 
12.2	Engine Performance Restoration Maintenance Fund	
Lessor will contribute from the Engine Performance Restoration Maintenance Fund applicable to an Engine at the completion of the Engine Performance Restoration Shop Visit. The amount available for contribution hereunder will correspond to:
 
 	(a)	for the first Engine Performance Restoration Shop Visit for such Engine since new, ***** multiplied by the total number of Flight Hours consumed on such Engine at the time of removal, provided that such amount has been paid by Lessee to the applicable Engine Performance Restoration Maintenance Fund as of the completion date of such Engine Performance Restoration Shop Visit;	
 
 	(b)	for any subsequent Engine Performance Restoration Shop Visits for such Engine, the full amount paid in to the applicable Engine Performance Restoration Maintenance Fund as of the completion date of such Engine Performance Restoration Shop Visit less any amount contributed pursuant to sub-section (a) above.	
 
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12.3	Engine LLP Maintenance Fund	
Lessor will contribute from the Engine LLP Maintenance Fund applicable to an Engine for the actual out-of-pocket materials cost without overhead, Lessee mark-up or profit associated with the replacement of LLPs in such Engine during completed Engine Performance Restoration Shop Visits reduced by the amount of any Waste Expense, with work performed for all other causes excluded. “ Waste Expense ” means in respect of any LLP removed and having a stub life in excess of ten percent (10%) of the full life of such LLP) the product of (a) the number of unused cycles on a life-limited Part at the time such life-limited Part is removed for replacement multiplied by (b) the quotient of (i) the cost of the new replacement life-limited Part divided by (ii) the number of cycles which constitutes the approved life of such life-limited Part. Subject to Article 12.7 and excluding exchange fees and handling, packaging and shipping charges, the amount available for contribution hereunder will be up to the amount in the Engine LLP Maintenance Fund applicable to such Engine at the time of completion of such Engine Performance Restoration Visit.
 
12.4	APU Maintenance Fund	
Lessor will contribute the full amount of the APU Maintenance Fund for a Heavy Repair of the APU. The amount to be paid by Lessor to Lessee hereunder will correspond to the amount paid in to the APU Maintenance Fund as of the date of completion of the Heavy Repair of the APU.
 
12.5	Landing Gear Maintenance Fund	
Lessor will contribute the full amount of the Landing Gear Maintenance Fund for an Overhaul of the Landing Gear. The amount to be paid by Lessor to Lessee hereunder will correspond to the amount paid in to the Landing Gear Maintenance Fund as of the date of completion of the Landing Gear Overhaul.
 
12.6	Contribution	
Subject to Article 26.4, Lessee will be entitled to claim the contribution of Lessor from the Maintenance Funds after the relevant work is completed and the Airframe, Engine, APU or Landing Gear has left the repair agency, by submitting evidence of completion of the corresponding workscope and proper documentation within ninety (90) days after completion of the work. For the Airframe, proper documentation includes without limitation a list of all routine and non-routine work cards with corresponding references to the MPD and an itemized invoice showing all labor and materials report. For both the Engines and APU, proper documentation includes without limitation a detailed description of the reason for removal, a shop teardown report, a shop findings report, a full description of the work scope, a completed LLP status listing both
 
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prior to and after the shop visit, information whether or not credits were provided due to life remaining on any removed LLPs and the amount of any such credits. For the Landing Gear, proper documentation includes without limitation evidence detailing the labor and material, total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul. Additional documentation required for the Engine, APU and Landing Gear will include all back-to-birth documentation for any LLPs changed during such Overhaul.
 
12.7	Contribution Adjustment	
Contribution from the Maintenance Funds will not be available for, items resulting from repairs for which Lessee has received proceeds of insurance or payments under any applicable warranties or required as a result of an Airworthiness Directive, manufacturer’s service bulletin, non-routine or unscheduled maintenance, faulty maintenance or installation, improper operations, misuse, neglect, accident, incident, ingestion, foreign object damage or other accidental cause (except to the extent the same results in the full restoration per the agreed criteria for reimbursement listed in each of the above-referenced items under this Article 12), external Engine Parts including quick engine change (QEC) Parts, thrust reversers or any of their associated components.
 
12.8	Costs in Excess of Maintenance Funds	
Lessee will be responsible for payment of all costs in excess of the amounts contributed hereunder. If on any occasion the balance in the Airframe Structural Maintenance Fund, Engine Performance Restoration Maintenance Fund for a particular Engine, Engine LLP Maintenance Fund for a particular Engine, APU Maintenance Fund or Landing Gear Maintenance Fund (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the APU and the Landing Gear) is insufficient to satisfy a claim for contribution in respect of the Airframe, such Engine, the APU or the Landing Gear, as applicable, the shortfall may not be carried forward or made the subject of any further claim for contribution.
 
12.9	Contribution after Termination Date and Retention of Maintenance Funds	
Lessee may not submit any request for contribution from the Maintenance Funds after the Termination Date unless prior to such date Lessee has notified Lessor in writing that such outstanding request for contribution will be submitted after the Termination Date and the anticipated amount together with supporting documentation pursuant to Article 12.6. So long as Lessee has provided such notice to Lessor, Lessee may then submit such satisfactory evidence at any time within sixty (60) days after the Termination Date, provided however that Lessee may reasonably request an extension for an
 
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additional period to be agreed between Lessor and Lessee. Subject to the foregoing, any balance remaining in the Maintenance Funds on the Termination Date will be retained by Lessor, except in case of a Total Loss of the Aircraft or the Airframe, in which case Lessor will contribute to Lessee the balance of the Maintenance Funds held by Lessor on the Termination Date upon the payment of the Agreed Value.
 
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13.	TITLE, REGISTRATION AND IDENTIFICATION PLATES	
 
13.1	Title to the Aircraft	
Title to the Aircraft will be and remain vested in Lessor. Lessor and Lessee intend this Lease to be a “true lease”. Lessee will have no right, title or interest in the Aircraft except as provided in this Lease.
 
13.2	Registration of Aircraft	
Throughout the Lease Term, Lessee shall, at its sole cost and expense (i) register and maintain the registration of the Aircraft in the name of Lessor as owner and lessor of the Aircraft under this Lease at the aviation section of the register of aircraft maintained by the Aviation Authority in the State of Registration and, when and to the extent such shall become applicable, at the International Registry under the terms provided by the Cape Town Convention; and (ii) from time to time take all other steps and file or cause to be filed with the Aviation Authority and/or any and all appropriate registries of property or security interests in property any mortgage, any assignment or other similar instruments required by Law (including the Geneva Convention and the Cape Town Convention, if applicable) or as Lessor and/or Lessor’s Lender may request to protect, preserve, maintain and perfect the rights, title and interests of Lessor and at Lessor’s cost and expense, Lessor’s Lender in and to the Aircraft, this Lease and any other document relating to the transactions contemplated herein in the State of Registration, Mexico or in any other jurisdiction in or over which the Aircraft may be operated at any time (including, but not limited to, amending this Lease and any other document relating to the transactions contemplated herein or taking such other action in connection herewith or therewith, as may be necessary and consistent with the business, commercial, economic and other agreements of the parties as expressed herein, to comply with the Cape Town Convention, if applicable). Lessee shall not take any action or omit to take any action that may invalidate any such registration or otherwise prejudice the rights, title and interests of Lessor and Lessor’s Lender in and to the Aircraft, this Lease and/or any other document relating to the transactions contemplated herein. Lessee shall provide Lessor with evidence of such registration as soon as it becomes available. Lessee shall insure that the original certificate of registration for the Aircraft is kept on the Aircraft or, where it is permitted to be removed, in safe custody or as otherwise required by applicable Law.
 
13.3	Registration of this Lease	
In accordance with the requirements of the Law from time to time, Lessee at its cost and expense, except as otherwise provided herein, will cause this Lease and any amendments, assignments, novations or agreements that are entered
 
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into by the parties in accordance with its terms to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other jurisdiction necessary to protect Lessor’s rights and, at Lessor’s cost, Lessor’s Lender’s Security Interest hereunder. Lessor will, at Lessee’s cost, cause this Lease to be translated into Spanish for the purpose of registering this Lease with the Aviation Authority on or prior to Delivery.
 
13.4	Registration of Title	
Lessee at its sole cost and expense will cause the bill of sale evidencing Lessor’s title and ownership interest in respect to the Aircraft to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other jurisdiction where necessary to protect Lessor’s ownership rights in respect to the Aircraft.
 
13.5	Registration of Security Interest	
Lessee, at Lessor’s cost and expense, will cause any mortgage or other document creating or evidencing any Security Interest of Lessor’s Lender in respect to the Aircraft to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other jurisdiction necessary to protect the rights and interests of Lessor’s Lender under such Security Interest.
 
13.6	Evidence of Registration and Filings	
At Delivery, Lessee will furnish to Lessor and Lessor’s Lender an opinion of counsel substantially in the form of Exhibit K hereto and other evidence satisfactory to Lessor of the registrations and filings required to be made on or prior to Delivery. After completion of the post-Delivery requirements stipulated in Article 6.3, Lessee will furnish to Lessor any other evidence satisfactory to Lessor confirming that all such registrations and flings have been completed. Thereafter, Lessee will furnish to Lessor and Lessor’s Lender other evidence satisfactory to Lessor of the registrations and filings required hereunder as Lessor may request from time to time.
 
13.7	Identification Plates	
On the Delivery Date (or, in case of the APU, as soon as practicable thereafter), Lessee will affix, or arrange to affix, and at all times during the Lease Term maintain in a prominent position on the Airframe, each Engine and the APU fireproof metal identification plates bearing a legible inscription stating the relevant serial number and denoting the name of (i) Lessor as owner, (ii) Lessor’s Lender as mortgagee, if applicable, and (iii) Lessee as operator. Lessee will not allow the name of any other person to be placed on the Airframe, any Engine or the APU as a designation that constitutes a claim of ownership or a claim of any Security Interest, provided that nothing shall prohibit Lessee from placing its customary colors and insignia on the Airframe.
 
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14.	TAXES	
 
14.1	General Obligation of Lessee	
Except as set forth in Article 14.2, Lessee agrees to pay promptly when due, and to indemnify and hold harmless each of Lessor and Lessor’s Lender (each a “ Tax Indemnitee ” and together the “ Tax Indemnitees ”) on a full indemnity basis from, all license and registration duties and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any asset, value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax, duty or benefit ( aprovechamientos )) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon Lessee, Lessor or any other Tax Indemnitee, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority upon or with respect to, based upon or measured by any of the following (collectively “ Taxes ”):
 
 	(a)	the Aircraft, Engines, APU or any Parts;	
 
 	(b)	the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;	
 
 	(c)	this Lease, the payments due hereunder and the terms and conditions hereof; and	
 
 	(d)	the ownership, financing, delivery, import (including duties payable in connection with the importation of the Aircraft into Mexico) or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.	
 
14.2	Exceptions to Indemnity	
The indemnity provided for in Article 14.1 does not extend to any of the following Taxes (“ Excluded Taxes ”):
 
 	(a)	Taxes imposed upon a Tax Indemnitee on the net income, capital gains, profits, turnover, gross receipts or net worth of a Tax Indemnitee or franchise or similar Taxes imposed on a Tax Indemnitee;	
 
 	(b)	Taxes imposed upon a Tax Indemnitee attributable solely to facts or circumstances occurring during the period prior to Delivery or after the Termination Date and return of the Aircraft in the condition required hereunder;	
 
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 	(c)	Taxes imposed upon a Tax Indemnitee to the extent attributable solely to such Tax Indemnitee’s willful misconduct or breach of this Lease or any agreement, document or instrument entered into and/or delivered in connection herewith (unless such breach was caused by an act or omission of Lessee);	
 
 	(d)	Taxes imposed upon a Tax Indemnitee as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by a Tax Indemnitee of all or any part of its interests in the Aircraft and/or this Lease other than any such disposition arising as a result of the enforcement of any remedies by Lessor or Lessor’s Lender in connection with an Event of Default or a Total Loss;	
 
 	(e)	Taxes imposed upon a Tax Indemnitee as a result of any past, present or future activities of such Tax Indemnitee in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;	
 
 	(f)	Taxes attributable to a Lessor’s Lien or to the extent that such Taxes would not have arisen or been assessed in the absence of a Lessor’s Lien;	
 
 	(g)	Taxes which, absent any Default by Lessee, constitute penalties, fines or interest imposed on Taxes indemnified by Lessee hereunder where the imposition of such penalties, fines or interest is caused solely by reason of the failure of any Tax Indemnitee to file tax returns pursuant to the requirements in any relevant jurisdiction so long as such Tax Indemnitee is given notice about such filing requirement reasonably in advance of the applicable filing deadline and such Tax Indemnitee fails to exercise reasonable diligence and file such return;	
 
 	(h)	Taxes for which a Tax Indemnitee has received full payment under any other provision of this Lease;	
 
 	(i)	Taxes which are not yet due or are being contested in good faith by appropriate proceedings, during the pendency of such proceedings; and	
 
 	(j)	Taxes or additional or incremental Taxes to the extent the same are attributable to the failure of a Tax Indemnitee to give timely notice of a claim under this Article 14 and/or to take timely action in contesting or permitting the contest of any such Tax which may be contested by such Tax Indemnitee or, in accordance with this Article 14, Lessee if required to take such action, but only if such failure precludes or prejudices a contest of the relevant Tax(es).	
 
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14.3	After Tax Basis	
The amount which Lessee is required to pay with respect to any Taxes indemnified against under Article 14.1 is an amount sufficient to restore the affected Tax Indemnitee on an after tax basis to the same position in which such Tax Indemnitee would have been if such Taxes had not been incurred.
 
14.4	Timing of Payment	
Any amount payable to a Tax Indemnitee pursuant to this Article 14 will be paid within ten (10) Business Days after receipt of a written demand therefor from such Tax Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable, provided, however, that such amount need not be paid by Lessee prior to the earlier of (a) the date any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts which are being contested by Lessee in good faith by appropriate proceedings or by such Tax Indemnitee pursuant to Article 14.5, the date such contest is finally resolved.
 
14.5	Contests	
If a claim is made against a Tax Indemnitee for Taxes with respect to which Lessee is liable for a payment or indemnity under this Lease or for a “gross-up” pursuant to Article 4.8 of this Lease, such Tax Indemnitee will promptly give Lessee notice in writing of such claim, provided, however, that such Tax Indemnitee’s failure to give notice will not relieve Lessee of its obligations hereunder except to the extent such failure materially impairs or precludes Lessee’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay, to the extent of such penalties, interest or additions. So long as (a) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, and (b) adequate reserves have been made or set aside in accordance with Financial Information Norms or “Normas de Información Financiera” (NIF) for such Taxes or, if required, an adequate bond has been posted, then such Tax Indemnitee at Lessee’s written request will in good faith, with due diligence and at Lessee’s expense, contest (or permit Lessee to contest in the name of Lessee or such Tax Indemnitee) the validity, applicability or amount of such Taxes.
 
14.6	Refunds	
Upon receipt by Tax Indemnitee of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 4.8) which Lessee has paid, such Tax Indemnitee will pay to Lessee the net amount of such Taxes refunded.
 
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14.7	Cooperation in Filing Tax Returns	
Lessee and the Lessor will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.
 
14.8	Survival of Obligations	
The representations, warranties, indemnities and agreements of Lessee provided for in this Article 14 will survive the Termination Date.
 
14.9	Protection	
Each of the Tax Indemnitees shall be entitled to all rights of ‘Lessor’ under this Article 14, mutatis mutandis, and may enforce the provisions of such article directly against Lessee, subject to the terms hereof.
 
14.10	Mitigation	
If Lessee is required to pay, indemnify against, reimburse, deduct or withhold any Taxes under this Lease, Lessor agrees, at Lessee’s request and at Lessee’s cost and expense, to use reasonable efforts to cooperate with Lessee in order to mitigate such Taxes.
 
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15.	INDEMNITIES	
 
15.1	General Indemnity	
Except as set forth in Article 15.2, Lessee agrees to indemnify and hold harmless each of Lessor and Lessor’s Lender and their respective successors, permitted assigns, shareholders, members, beneficial interest owners, subsidiaries, affiliates, trustees, directors, officers, duly appointed agents, servants, employees and designated representatives (individually an “ Indemnitee ” and collectively “ Indemnitees ”) from any and all liabilities, obligations, losses, damages and prejudices, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “ Damages and Prejudices ”), which are imposed on, incurred by or asserted against any Indemnitee and which are in any way related to, based on or arise out of any of the following:
 
 	(a)	this Lease or the transactions contemplated hereby;	
 
 	(b)	the operation, possession, use, non-use, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by Lessee, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;	
 
 	(c)	the manufacture, design, acceptance by Lessee or any sublessee, rejection by Lessee or any sublessee, delivery to Lessee or any sublessee, return by Lessee or any sublessee, sale arising as the direct consequence of an Event of Default, import by Lessee or any sublessee, export by Lessee or any sublessee, condition, repair, Modification, servicing, enforcement of warranties whether in Lessor’s or Lessee’s name, customer, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, re-registration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;	
 
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 	(d)	the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or	
 
 	(e)	without duplication of amounts recovered under Article 23 hereof, as a consequence of any Default or Event of Default by Lessee or any Sublessee.	
The foregoing indemnity by Lessee is intended to include and cover any Damages and Prejudices to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Damages and Prejudices does not fall within any of the exceptions listed in Article 15.2.
 
15.2	Exceptions to General Indemnities	
The indemnity provided for in Article 15.1 will not extend to the following Damages and Prejudices of any Indemnitee:
 
 	(a)	Damages and Prejudices which result or arise from the willful misconduct or breach of any obligation, covenant, representation or warranty of such Indemnitee;	
 
 	(b)	Damages and Prejudices which result or arise from facts and circumstances which are attributable to acts or events which occur after the Termination Date and return of the Aircraft to Lessor in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of Lessee during the Lease Term;	
 
 	(c)	Damages and Prejudices which result or arise from facts or circumstances occurring prior to the Delivery Date;	
 
 	(d)	Damages and Prejudices which are representing Taxes covered by Lessee’s indemnity obligations under Article 14 hereof;	
 
 	(e)	Damages and Prejudices which are attributable to a sale, assignment, transfer or other conveyance of any right, title or interest of an Indemnitee in or to the Aircraft and/or this Lease, unless the same results from the existence of an Event of Default, Total Loss or the exercise of remedies by Lessor; or	
 
 	(f)	Damages and Prejudices which constitute normal operating or overhead expenses of Lessee.	
 
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15.3	After Tax Basis	
The amount which Lessee will be required to pay with respect to any Damages and Prejudices indemnified against under Article 15.1 will be an amount sufficient to restore the Indemnitee, on an after tax basis, to the same position such Indemnitee would have been in had such Damages and Prejudices not been incurred.
 
15.4	Timing of Payment	
It is the intent of the parties that each Indemnitee will have the right to indemnification for Damages and Prejudices hereunder as soon as a claim is made and as soon as such Damages and Prejudices are incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 15.8). Lessee will pay an Indemnitee for Damages and Prejudices pursuant to this Article 15 within five (5) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity, unless Lessee is contesting such claim in good faith by appropriate proceedings in which case payment, if due, will be made within five (5) Business Days of final determination of such contest.
 
15.5	Subrogation	
Upon the payment in full of any indemnity pursuant to this Article 15 by Lessee, Lessee will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.
 
15.6	Notice	
Each Indemnitee and Lessee will give prompt written notice one to the other of any liability of which such party has knowledge for which Lessee is, or may be, liable under Article 15.1, provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 15, except to the extent a failure by an Indemnitee to provide such notice materially impairs, precludes or prejudices Lessee’s right or ability to defend and/or contest the claim giving rise to the Indemnitee’s claim under this Article 15.
 
15.7	Refunds	
Upon receipt by an Indemnitee of a refund, insurance proceeds or other recovery of amounts which Lessee has paid pursuant to this Article 15, such Indemnitee will pay to Lessee the net amount of such amounts received.
 
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15.8	Defense of Claims	
Unless a Default or Event of Default has occurred and is continuing, Lessee and its insurers will have the right (in each such case at Lessee’s sole expense) to investigate or, provided that Lessee (or its insurers to the extent such claim is covered by insurance) have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim for which indemnification is sought pursuant to Article 15.1 and each Indemnitee will cooperate with Lessee or its insurers with respect thereto. If Lessee or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at Lessee’s expense.
 
15.9	Survival of Obligation	
Notwithstanding anything in this Lease to the contrary, the provisions of this Article 15 will survive the Termination Date and continue in full force and effect notwithstanding any breach by Lessor or Lessee of the terms of this Lease, the termination of the lease of the Aircraft to Lessee under this Lease or the repudiation by Lessor or Lessee of this Lease.
 
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16.	INSURANCE	
 
16.1	Categories of Insurance	
From the Delivery Date and throughout the Lease Term and until the Termination Date, Lessee will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through reputable aviation insurance brokers and insurers as may be reasonably acceptable to Lessor in Mexico City, London, New York or such other insurance markets as mutually agreed upon by the parties. Pursuant to Exhibit C , (i) Lessee will cause Lessor or Lessor’s Lender, as designated by Lessor, to be named as loss payee or contract party for the Agreed Value under the hull and spares insurances required to be maintained by Lessee under the Lease and (ii) Lessee will cause Lessor, Lessor’s Lender and each Indemnitee and each of their respective successors, permitted assigns, shareholders, members, beneficial interest owners, subsidiaries, affiliates, trustees, directors, officers, agents, servants, employees and representatives to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under this Lease.
 
16.2	Write Back of Any Date Recognition Exclusion	
In the event any of Lessee’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000 related problems, Lessee at its cost will obtain for the benefit of itself and Lessor the broadest write back available in the London insurance market with respect to such exclusion.
 
16.3	Third Party War Liability Insurance	
Lessee will carry third party war risk liability insurance in the amount required by Exhibit C .
 
16.4	Installation of Third Party Engine	
If Lessee installs an engine not owned by Lessor on the Aircraft, either (a) Lessee’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy Lessor or Lessor’s Lender’s, as applicable, requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the Lessee to such third party engine owner.
 
65(138)

16.5	Insurance for Indemnities	
The insurance referred to in Article 16.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 15 and Lessee will cause Lessor and Lessor’s Lender to be named as additional insureds in respect of the coverage provided by Lessee’s Third Party Legal Liability and Products Liability insurance for a period of two (2) years following the Termination Date. Such Policies shall be maintained in accordance with prudent industry practice for similarly situated air carriers.
 
16.6	Renewal	
Prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with fax confirmation from Lessee’s insurance brokers that the insurances required hereunder have been renewed or replaced in conformity with the provisions hereof effective as of such termination date and that a renewal Certificate of Insurance and Brokers’ Letter of Undertaking evidencing such renewal or replacement and complying with Exhibit C will be issued no later than on the termination date of the prior certificate and furnished to Lessor within seven (7) days after such renewal.
 
16.7	Assignment of Rights by Lessor	
If Lessor assigns, transfers or otherwise conveys all or any portion of its rights in or to the Aircraft or this Lease as permitted by and in conformity with the relevant provisions of this Lease, Lessee will, upon request, procure that such Person be added as loss payee and/or additional insured under the policies effected hereunder and enjoy the same rights and insurance enjoyed by Lessor under such policies. Lessor and the other Indemnitees will nevertheless continue to be covered by such policies for the period required hereunder.
 
16.8	Deductibles	
If there is a material adverse change in the financial condition of Lessee which Lessor reasonably believes will cause Lessee to be unable to pay the deductible upon the occurrence of a partial loss of the Aircraft or an Engine, then Lessor may upon consultation with Lessee and its insurance brokers require Lessee at Lessee’s expense to lower its deductibles on the insurance maintained hereunder to a level which is available on commercially reasonable terms in the insurance market.
 
66(138)

16.9	Insurance for Wet Lease Operations	
In the event Lessee is performing wet lease operations with the Aircraft pursuant to Article 10.6 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance must meet the requirements of Exhibit C , including the naming of the additional insureds and the inclusion of the other endorsements set forth in Exhibit C . Moreover, Lessee will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, Lessor will receive certificates of insurance from the insurance brokers for Lessee and, if applicable, the wet lessee evidencing such coverages if insurance for such wet lease operations is not covered under Lessee’s policies for which a Certificate of Insurance has already been delivered to Lessor.
 
16.10	Information	
Lessee will provide Lessor with any information reasonably requested by Lessor from time to time concerning the insurance required to be maintained hereunder with respect to the Aircraft or in connection with any claim being made thereunder.
 
16.11	Currency	
All proceeds of insurance pursuant to this Lease will be payable in Dollars except as may otherwise be required by applicable Law.
 
16.12	Grounding of Aircraft	
If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, Lessee will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again unless otherwise permitted by Lessor and by applicable Law except in respect of any insurance which ceases to be in effect in respect of all carriers and not specifically Lessee.
 
16.13	Failure to Insure	
If at any time Lessee fails to maintain insurance in compliance with this Article 16, Lessor will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):
 
 	(a)	to pay any premiums due or to effect or maintain insurance satisfactory to Lessor or otherwise remedy such failure in such manner as Lessor considers appropriate (and Lessee will upon demand reimburse Lessor in full for any amount so expended in that connection); or	
 
 	(b)	at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.	
 
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16.14	Reinsurance	
Any reinsurance will be maintained with reinsurers and brokers of international repute, commonly participating in the international aviation insurance markets and reasonably acceptable to Lessor. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to Lessor:
 
 	(a)	the same terms as the original insurance;	
 
 	(b)	a cut through and assignment clause satisfactory to Lessor; and	
 
 	(c)	(without prejudice to the relevant cut through clause) payment will be made notwithstanding (i) any bankruptcy, judicial recuperation, insolvency, liquidation or dissolution of any of the original insurers and/or (ii) that the original insurers have made no payment under the original insurance policies.	
 
16.15	Limit on Hull in favor of Lessee	
Lessee may carry hull all risks and hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to Lessor or Lessor’s Lender, as applicable) provided that such excess insurance which would be payable to Lessee in the event of a Total Loss will not prejudice the insurances required herein or the recovery by Lessor’s Lender thereunder. Lessee agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.
 
16.16	AVN 67B	
Notwithstanding the provisions of this Article 16 and Exhibits C and D hereto, for so long as it remains the general practice of air carriers to insure equipment financed or leased on the basis of the Airline Finance/Lease Endorsement AVN 67B or its equivalent, Lessee may maintain insurances in respect of the Aircraft and this Lease which incorporate the terms and conditions of AVN 67B. To the extent any provision of AVN 67B conflicts with or is otherwise inconsistent with the requirements of this Article 16 and Exhibits C and D hereto, then the provisions of such terms and conditions of AVN 67B shall be deemed to satisfy the relevant requirements of this Lease.
 
68(138)

17.	LOSS, DAMAGE AND REQUISITION	
Throughout the Lease Term and until the Termination Date, Lessee will bear all risk of loss, theft, damage and destruction to the Aircraft.
 
17.1	Definitions	
In this Article 17 and this Lease:
“ Agreed Value ” means *****. The Agreed Value will decrease by ***** per annum during the Lease Term, commencing on the first anniversary of the Delivery Date and on each corresponding month and day of each subsequent year during the Lease Term.
“ Net Total Loss Proceeds ” means the Total Loss Proceeds actually received by Lessor’s Lender following a Total Loss, less any incurred legal and other out of pocket expenses, taxes or duties incurred by Lessor or Lessor’s Lender in connection with the collection of such proceeds.
“ Total Loss ” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “ Total Loss Date ” means the date set forth in parenthesis after each Total Loss:
 
 	(a)	destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);	
 
 	(b)	actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or thirty (30) days after the date of notice to Lessee’s brokers or insurers claiming such total loss);	
 
 	(c)	expropriation without compensation, requisition of title, confiscation, forfeiture or any compulsory sale or acquisition or other similar event (the date on which the same takes effect);	
 
 	(d)	sequestration, detention, seizure or any similar event for more than thirty (30) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
 	(e)	requisition for use for more than one hundred eighty (180) consecutive days, except requisition by a Government Entity in accordance with the provisions of Article 17.8 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(f)	temporary or cautionary securement for more than sixty (60) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
 	(g)	in the case of an Engine, the event described in Article 11.6.3 (the date on which the same takes effect).	
“ Total Loss Proceeds ” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.
 
17.2	Notice of Total Loss	
Lessee will notify Lessor in writing within one (1) Business Day after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.
 
17.3	Total Loss of Aircraft or Airframe	
If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:
 
17.3.1	After the Total Loss Date and until receipt by Lessor or Lessor’s Lender, as applicable, of the Agreed Value and receipt by Lessor of all other amounts then due from Lessee under this Lease, Lessee will continue to pay Rent and the parties will perform all of their other obligations under this Lease.	
 
17.3.2	On the date which is the earlier of the following dates:	
 
 	(a)	the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by Lessee’s insurance underwriters or brokers and	
 
 	(b)	the date which falls ninety (90) days after the Total Loss Date,	
Lessee will pay to Lessor, or as Lessor directs, to Lessor’s Lender, an amount equal to the Agreed Value and all other amounts then accrued and payable under this Lease.
 
17.3.3	Lessor will, and will procure Lessor’s Lender to, apply the Net Total Loss Proceeds and any amounts received from Lessee pursuant to Article 17.3.2 as follows:	
 
 	(a)	first, in discharge of any unpaid Rent and any other amounts due and unpaid up to the date of Lessor’s Lender receipt of the Agreed Value;	
 
 	(b)	second, in discharge of the Agreed Value; and	
 
 	(c)	third, payment of the balance, if any, to Lessee.	
 
70(138)

Upon receipt by Lessor and Lessor’s Lender of all monies payable by Lessee hereunder, Lessor will return to Lessee any amount of prepaid Rent paid by Lessee which pertains to the period, if any, after the Termination Date. Such Rent will be calculated as a daily amount and prorated on the basis of a thirty (30) day month.
 
17.3.4	Upon receipt by Lessor’s Lender and Lessor of all monies payable by Lessee hereunder, this Lease will terminate except for Lessee’s obligations under Articles 9.5, 14 and 15 which survive the Termination Date.	
A TOTAL LOSS OF THE AIRCRAFT WILL BE DEEMED TO HAVE OCCURRED WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE OR THE ENGINES.
 
17.4	Surviving Engine(s)	
If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of Lessee (subject to agreement of relevant insurers) and on receipt by Lessor and Lessor’s Lender of all monies due under Article 17.3 and payment by Lessee of all airport, navigation and other charges on the Aircraft, if any, Lessor will transfer all its right, title and interest in the surviving Engine(s) to Lessee or to Lessee’s insurers, as applicable, but without any responsibility, condition or warranty on the part of Lessor other than as to freedom from any Lessor’s Lien.
 
17.5	Total Loss of Engine and Not Airframe	
 
17.5.1	Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, Lessee will replace such Engine as soon as reasonably practicable by duly conveying to Lessor title to another engine from Lessee (or another Person) (a) free and clear of all Security Interests (except Permitted Liens), (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the Engine which sustained the Total Loss, considering also the age of the engine, and (c) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, Flight Hours and Cycles since new and Flight Hours and Cycles available to the next inspection, Overhaul or scheduled or anticipated removal and the thrust rating at which any modules have been operated. Such replacement engine will be an “Engine” as defined herein and the Engine which sustained such Total Loss will cease to be an “Engine.” For the avoidance of doubt, in the event that the Engine that sustained the Total Loss shall be replaced by an Engine of similar or better condition as described	
 
71(138)

 	above, the available amounts in the Engine Performance Restoration Maintenance Fund originally for the Engine that sustained the Total Loss shall “carry over” and be applicable in accordance with the terms of this Lease for maintenance of the replacement engine as if such had been the original Engine.	
 
17.5.2	Lessee agrees at its own expense to take such action as Lessor may request in order that any such replacement engine becomes the property of Lessor and is leased hereunder on the same terms as the destroyed Engine. Lessee’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by Lessor with respect to such destroyed Engine will, subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease, be paid to Lessee.	
 
17.6	Total Loss of APU	
 
17.6.1	Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, Lessee will replace such APU as soon as reasonably possible by duly conveying to Lessor title to another auxiliary power unit (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the APU delivered by Lessor to Lessee with the Aircraft on the Delivery Date and (d) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, Flight Hours and Cycles since new and Flight Hours and Cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined herein and the auxiliary power unit which sustained such Total Loss will cease to be the “APU.” For the avoidance of doubt, in the event that the APU that sustained the Total Loss shall be replaced by an APU of similar or better condition as described above, the available amounts in the APU Maintenance Fund originally for the APU that sustained the Total Loss shall “carry over” and be applicable in accordance with the terms of this Lease for maintenance of the replacement APU as if such had been the original APU.	
 
17.6.2	Lessee agrees at its own expense to take such action as Lessor may request in order that any such replacement APU becomes the property of Lessor and is leased hereunder on the same terms as the destroyed APU. Lessee’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by Lessor with respect to such destroyed APU will, subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease, be paid to Lessee.	
 
72(138)

17.7	Other Loss or Damage	
 
17.7.1	If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of Lessee under this Lease (including payment of Rent) will continue in full force.	
 
17.7.2	In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, Lessee will at its sole cost and expense fully repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. Lessee will notify Lessor forthwith of any loss, theft or damage to the Aircraft for which the cost of repairs is estimated to exceed *****, together with Lessee’s proposal for carrying out the repair. In the event that Lessor does not agree with Lessee’s proposals for repair, Lessor will so notify Lessee within two (2) Business Days after its receipt of such proposal. Lessee and Lessor will then consult with Manufacturer and Lessee and Lessor agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, Lessee will carry out the repairs in accordance with the directions of Lessor.	
 
17.7.3	To the extent that any insurance proceeds received by Lessee from its insurers do not cover the cost of repair work on the Aircraft in accordance with this Article 17.7 and Lessor or Lessor’s Lender has received additional insurance proceeds from Lessee’s insurers with respect to such repair work, Lessor will (subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease on account of an Event of Default and submission by Lessee of documentation in support of such excess repair costs) procure that such insurance proceeds received by Lessor or Lessor’s Lender are paid to Lessee as and when such repair work is performed on the Aircraft.	
 
17.8	Government Requisition	
If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, Lessee will promptly notify Lessor of such requisition. All of Lessee’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by Lessor or Lessee from such Government Entity will be paid over to or retained by Lessee. If a Default or Event of Default has occurred and is continuing, all payments received by Lessee or Lessor from such Government Entity may be used by Lessor to satisfy any obligations owing by Lessee.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
73(138)

17.9	Temporary or Cautionary Detention or Securement	
If the Aircraft, Airframe, any Engine or the APU or any other Part is secured by the order of any administrative, judicial or labor authority, Lessee will promptly notify Lessor of such detention or securement and all of Lessee’s obligations hereunder will continue as if such detention or securement had not occurred. Lessee shall at its sole cost and expense conduct all actions, and take all steps as may be necessary or desirable before any administrative and judicial authorities or entities including assisting Lessor as it shall be necessary in the filing and defense of a terceria or any similar or equivalent procedure or judicial incident in order to promptly remove such detention or securement and to demonstrate the ownership rights of Lessor in respect to the Aircraft, the Airframe any Engine or the APU or any other Part.
 
74(138)

18.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	
 
18.1	Representations and Warranties	
Lessee represents and warrants that it has the free and unconditioned intention to enter into the terms of this Lease and it further represents and warrants the following to Lessor as of the date of execution of this Lease and as of the Delivery Date:
 
18.1.1	Corporate Status . Lessee is a company duly formed, validly existing and in good standing under the Laws of Mexico. It has the power and authority, corporate or otherwise, to carry on its business as presently conducted and to perform its obligations hereunder.	
 
18.1.2	Capacity of Representatives . Lessee’s representatives have been vested with the sufficient capacities to enter into this Lease and to cause Lessee to be obligated by and subject to the terms of this Lease and such capacities have as of this date not been revoked, modified or limited in any form.	
 
18.1.3	Governmental Approvals . Except for such approvals and permits that Lessee has already obtained and for such filings that Lessee has already conducted in accordance with this Lease, no other authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by Lessee of this Lease or Lessee’s obligations hereunder.	
 
18.1.4	Binding . Lessee has all necessary authority and approvals to enter into and perform its obligations under each of the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by Lessee through its duly authorized representatives and represent the valid and binding obligations of Lessee, enforceable in accordance with their terms except as enforceability may be limited by concurso mercantil , bankruptcy, judicial recuperation, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
18.1.5	No Breach . The execution and delivery of the Operative Documents, the consummation by Lessee of the transactions contemplated herein and compliance by Lessee with the terms and provisions hereof do not and will not contravene any Law applicable to Lessee, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of Lessee, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, corporate charter, bylaw or other agreement or instrument to which Lessee is a party or by which Lessee or its properties or assets may be bound or affected.	
 
75(138)

18.1.6	Filings . Except for the filings conducted by Lessee in accordance with Section 13 of this Lease, no filing or recording of any instrument or document (including the filing of any financing or similar statement or mortgage) is necessary under the Laws of the State of Registration in order to preserve, protect and perfect all of the right, title and interest of Lessor and each Lessor’s Lender in the Aircraft and this Lease and for this Lease to constitute a valid, binding and perfected lease of record relating to the Aircraft.	
 
18.1.7	Translation or Notarization . Except for the Spanish translation of the Lease and any other Operative Documents which needs to be made by a translation expert listed as such by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature and which are required to be filed in Mexico as provided in Section 13 of this Lease and which will be required for any applicable purpose conducted before any administrative or judicial authorities in Mexico, and except for the signatures of the parties that will accordingly need to be ratified by a Mercantile Broker or Notary Public, in Mexico, neither the Lease nor any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.	
 
18.1.8	Licenses . Lessee holds all licenses, certificates and permits from applicable Government Entities in Mexico for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.	
 
18.1.9	No Suits . There are no suits, arbitrations or other proceedings pending or to Lessee’s knowledge threatened before any court or administrative agency against or affecting Lessee which, if adversely determined, would have a material adverse effect on Lessee’s ability to perform its obligations hereunder.	
 
18.1.10	No Restrictions on Payments . To the extent that the payment obligations of Lessee shall be required to be complied outside of Mexico, under the Laws of Mexico, nothing prevents Lessee from making payments required by this Lease in the currency of payment required pursuant to this Lease.	
 
18.1.11	Import Duties . Lessee shall have paid prior to Delivery, all import duties, if any, and any other Taxes and costs that may be payable in connection with the importation and/or customs clearance of the Aircraft into Mexico and shall have obtained from the Customs Authority and shall maintain in force the importation petition ( pedimento ) or the corresponding authorization from the Customs Authorities required to be obtained and/or maintained in order to permit the import of the Aircraft into Mexico and to obtain the benefit of any	
 
76(138)

 	and all exemptions from payment of or reductions in import duties with which it shall comply for the duration of this Lease in accordance with the term permitted by the corresponding exemptions or temporary importation regimes contemplated in the Customs Law of Mexico.	
 
18.1.12	General Obligations . The obligations of Lessee under this Lease are direct, general and unconditional obligations of Lessee and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee, with the exception of such obligations as are mandatorily preferred by Law.	
 
18.1.13	No Sovereign Immunity . Lessee, under the Laws of Mexico or of any other jurisdiction affecting Lessee, is subject to private commercial law and suit. Neither Lessee nor its properties or assets is entitled to sovereign immunity under any such Laws. Lessee’s performance of its obligations hereunder constitutes commercial acts done for commercial purposes.	
 
18.1.14	Tax Returns . All returns required to be completed and delivered by Lessee have been delivered by Lessee to all relevant taxation authorities in the jurisdiction of its incorporation and any other relevant jurisdiction and Lessee has paid or caused to be paid any and all Taxes due and payable to such taxation authorities other than such Taxes as are being contested by Lessee in good faith by appropriate proceedings and in respect of which adequate reserves have been made or set aside by Lessee in accordance with the Financial Information Norms “Normas de Información Financiera” (NIF) applicable to Lessee or as required by Law and which proceedings do not involve any risk of loss, seizure, securement (cautionary, temporary or otherwise), forfeiture or confiscation of the Aircraft nor the imposition of any civil or criminal penalty on Lessor, Lessee or any Lessor’s Lender.	
 
18.1.15	No Party to Labor Proceedings . Lessee is not a party to any labor proceedings and shall immediately notify Lessor in respect to any labor related conflict existing between Lessee and its workers, with the understanding that by being the property of the Lessor, neither the Aircraft, the Airframe, any Engine, the APU nor any Part thereof can be subject of securement, trusteeship, deposit, lien, invasion, or seizure by the workers whether or not such act is the result of an order from the competent labor authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft, the Airframe, any Engine, the APU or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure.	
 
18.1.16	No Material Adverse Effect . Lessee is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on Lessee’s ability to perform its obligations hereunder.	
 
77(138)

18.1.17	No Default or Event of Default under this Lease . At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to Lessor pursuant to Article 20 have been prepared in accordance with Financial Information Norms “Normas de Información Financiera” (NIF), and fairly present the financial condition of Lessee with respect to the period covered thereby.	
 
18.1.18	Solvency and Licit Origin of Funds . Lessee is solvent and the monies with which it shall fulfill its payment obligations under this Lease shall be owned by the Lessee and obtained from licit sources.	
 
18.1.19	Compliance with Laws . On the date of execution of this Lease and throughout the duration of the same, Lessee shall be in compliance with (i) all obligations binding upon Lessee arising from any material agreements to which it shall be a party; and (ii) all Laws applicable to Lessee.	
 
18.1.20	Sufficiency of Information . All information and documentation provided by Lessee to Lessor under this Lease is true and correct in all respects, and such information does not fail to state any material fact which failure would render such information misleading.	
 
18.1.21	Insurance . Lessee is in compliance with any requirements under the Purchase Agreement to carry insurance in connection with Lessor’s assignment of Manufacturer’s warranties and product support to Lessee.	
 
18.2	Covenants	
Lessee covenants to Lessor that it will comply with the following obligations throughout the Lease Term:
 
18.2.1	Import Duties . Upon Lessor’s request, but not more frequently than once a year unless a Default or Event of Default has occurred and is continuing Lessee will provide documentary evidence in form and substance satisfactory to Lessor that any import duties or Taxes have been paid to, are not applicable or have been exempted by the relevant Government Entities.	
 
18.2.2	Licensing . Lessee will hold all licenses, certificates and permits from applicable Government Entities in Mexico required for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. Lessee will advise Lessor within one (1) Business Day in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.	
 
18.2.3	Payments . If at any time any restrictions may be applicable, Lessee will obtain all certificates, licenses, permits, exemptions and other authorizations which	
 
78(138)

 	are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated herein, and will maintain the same in full force and effect for so long as the same are required.	
 
18.2.4	Sovereign Immunity . Lessee, under the Laws of Mexico or of any other jurisdiction affecting Lessee, will continue to be subject to private commercial law and suit. Neither Lessee nor its properties or assets will be entitled to sovereign immunity under any such Laws. Lessee’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. Lessee will advise Lessor promptly of any change in the foregoing.	
 
18.2.5	Information about Suits . Lessee will promptly give to Lessor notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially and adversely affect Lessee’s ability to perform under this Lease.	
 
18.2.6	Information about Labor Proceedings . Lessee shall promptly give to Lessor notice in writing upon commencement of any labor proceedings before any board of conciliation and arbitration, local or federal which, if adversely determined, could materially affect Lessee’s financial condition and its ability to perform under this Lease or could potentially affect any of the assets leased by Lessee, including the Aircraft, the Airframe, any Engine, the APU or any Part thereof. Likewise, Lessee shall notify any such authorities, as applicable, upon commencement of any such proceedings or when otherwise requested by Lessor, that the Aircraft, the Airframe, any Engine, the APU or any Part thereof are not owned by Lessee and do not conform any part of its assets.	
 
18.2.7	Restrictions on Mergers . Except as set forth below, Lessee will not sell, convey or otherwise dispose of all or substantially all of its property and assets or merge or consolidate with or into or be acquired by any other Person without the prior written consent of Lessor, such consent not to be unreasonably withheld. In evaluating any proposed merger, consolidation, sale or other conveyance, Lessor shall not unreasonably withhold its consent provided that (i) no Default or Event of Default under the Lease or any other agreement between Lessee or the acquirer with Lessor or an affiliate of Lessor or Lessor’s Lender has occurred and is then continuing or would occur as a result of the merger, consolidation, acquisition, sale or conveyance, as applicable; (ii the surviving entity or acquirer shall have agreed in writing, in form and substance acceptable to Lessor, to assume, be bound by and perform all obligations of “Lessee” under the Lease; and (iii) the acquirer or surviving entity shall not be domiciled or directly or indirectly owned (in whole or in part) or controlled by any individual or entity with which Lessor is prohibited from doing business under applicable Law.	
 
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No consent shall be required from Lessor for any merger, consolidation, acquisition, sale or other conveyance, if (a) Lessee shall be the surviving entity of a merger, the consolidated entity or the acquirer, as applicable and (b) the resulting entity, has, at the time of such merger consolidation, sale or conveyance and immediately after giving effect thereto, a credit standing as good as or better than that of Lessee and a net worth at least equal to that of Lessee immediately prior to such merger, consolidation, acquisition, sale or conveyance, or (c) solely among Lessee’s current stockholders.
No consent shall be required from Lessor for Lessee’s acquisition of any interest in any corporate entity provided that such acquisition does not result in a material adverse change in the financial condition of Lessee.
Nothing herein shall be deemed to prevent Lessee or any affiliate of Lessee from engaging in a bona fide public offering of its securities to the general public or a private placement of any such securities as the same may at any time or from time to time be approved by its directors or shareholders.
 
18.2.8	Restriction on Relinquishment of Possession . Lessee will not, without the prior consent of Lessor, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease.	
 
18.2.9	No Security Interests . Lessee will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein and Lessee will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time. Lessee will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to Lessor.	
 
18.2.10	Representations to Other Parties . Lessee will not represent or hold out Lessor as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.	
 
18.2.11	Corporate Purpose, Operations, Existence . Lessee shall conduct its corporate purpose in continuing and consistent form, in accordance with prudent industry practices; it shall obtain and maintain all acts including all preservation acts that are necessary in relation with the concessions, permits, licenses or approvals that it currently holds or which it may hold in the future, within the constrains and for the fulfillment of its corporate purpose.	
 
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19.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	
 
19.1	Representations and Warranties	
Lessor represents and warrants that it has the free and unconditioned intention to enter into this Lease and it further represents and warrants the following to Lessee as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 7:
 
19.1.1	Status . Lessor is a limited liability company, duly established, validly existing and in good standing under the Laws of Mexico. It has the power and authority, corporate or otherwise, to carry on its business as presently conducted and to perform its obligations hereunder.	
 
19.1.2	Capacity of Representatives . Lessor’s representatives have been vested with the sufficient capacities to enter into agreements and to cause Lessor to be obliged and subject to the terms of this Lease and such capacities have as of this date not been revoked, modified or limited in any form.	
 
19.1.3	Governmental Approvals . Except for the approval required from the Ministry of Finance “Secretaría de Hacienda” no authorization, approval, consent, license or order of, or registration with, or the giving of notice to any Mexican Government Entity is required for the valid authorization, execution, delivery and performance by Lessor of this Lease.	
 
19.1.4	Binding . This Lease and the other Operative Documents have been duly authorized, executed and delivered by Lessor and represent the valid and binding obligations of Lessor, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
19.1.5	No Breach . The execution and delivery of the Operative Documents, the consummation by Lessor of the transactions contemplated herein and compliance by Lessor with the terms and provisions hereof do not and will not contravene any Law applicable to Lessor, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, corporate charter, bylaw or other agreement or instrument to which Lessor is a party or by which Lessor or its properties or assets may be bound or affected.	
 
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19.1.6	Title to Aircraft . On the Delivery Date Lessor will have good and valid title to the Aircraft free and clear of liens other than Lessor’s Liens.	
 
19.1.7	Net Worth . Lessor has a tangible net worth of no less than *****	
 
19.2	Covenant of Quiet Enjoyment	
With effect from the Delivery Date and throughout the Lease Term and provided that, at any relevant time, no Event of Default has occurred and is continuing hereunder, Lessor covenants and agrees that, neither Lessor nor any Person lawfully claiming through Lessor will interfere with Lessee’s quiet, peaceful use and possession of the Aircraft under and in accordance with the terms of the Lease. Lessor further agrees that, unless at any relevant time there shall exist an Event of Default, Lessor will procure that any Person taking title to or a Security Interest in the Aircraft granted by Lessor during the Lease Term shall provide to Lessee a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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20.	FINANCIAL AND OTHER INFORMATION	
Lessee agrees to furnish each of the following to Lessor:
 
(a)	Quarterly Statements . As soon as practicable after the end of the first, second, and third quarterly fiscal periods in each fiscal year of Lessee, and in any event within sixty (60) days thereafter, duplicate or copies of the following statements which can be non-audited:	
 
 	(i)	a consolidated balance sheet of Lessee as at the end of such quarter,	
 
 	(ii)	consolidated statements of income and retained earnings of Lessee for such quarterly period, and	
 
 	(iii)	consolidated statements of cash flow of Lessee for the portion of the fiscal year ending with said quarter,	
all in Spanish with an English language translation promptly after the same is available.
 
(b)	Annual Statements . As soon as practicable after the end of each fiscal year, and in any event within one hundred twenty (120) days thereafter, of:	
 
 	(i)	a consolidated balance sheet of Lessee as at the end of such year, and	
 
 	(ii)	consolidated statements of income and retained earnings and of cash flow of Lessee for such year, prepared in accordance with Financial Information Norms or “Normas de Información Financiera” (NIF) (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognized standing in Mexico (which report may be adverse, qualified or disclaim an opinion),	
all in Spanish with an English language translation promptly after the same is available.
 
(c)	Public Statements . Promptly after distribution, duplicate copies, accompanied with an English translation, of all reports and financial statements, which Lessee sends or makes available to its stockholders or creditors.	
 
(d)	Other Information . From time to time, such other information, accompanied with an English translation, as Lessor or Lessor’s Lender may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of Lessee which Lessee can disclose without violating any securities or similar laws or any contractual obligation of confidentiality.	
 
(e)	Notwithstanding the foregoing, if at any time Lessee or Lessee’s Parent shall be required to file or otherwise furnish audited financial statements as required in (a) and (b) above to any Government Entity of the State of Registration or of	
 
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 	the United States in connection with any public offering of securities and such financial statements become available in compliance with applicable Law and at no charge to Lessor on the Internet, the filing or furnishing of the same by Lessee to such Government Entity shall be deemed to satisfy the requirements of Articles 20(a) and 20(b).	
 
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21.	RETURN OF AIRCRAFT	
 
21.1	Date of Return	
Lessee is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to Lessor on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 17.3. If an Event of Default occurs hereunder by Lessee failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and Lessor repossesses the Aircraft, the return requirements set forth in this Article 21 nonetheless must be met on the date the Aircraft is actually returned to Lessor or repossessed by Lessor.
 
21.2	Last Engine Shop Visits	
With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, Lessee will submit to Lessor at least thirty (30) days in advance the intended work scope of such shop visit for approval. If Lessor requests, Lessee will perform additional work at such shop visit at Lessor’s cost, provided however, that no such additional work shall require Lessee to remove any Engine from revenue service at a date earlier than the date it would have done so in the absence of such requested additional work and further provided, that such additional work and the performance thereof will not cause a delay in redelivery, a delay in the occurrence of the Termination Date or interfere with the relevant maintenance providers operations or completion of the required shop visit.
 
21.3	Technical Report	
Six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), Lessee will provide Lessor with a Technical Evaluation Report in the form and substance of Exhibit I , as revised, and, in addition upon Lessor’s request, will make copies available of:
 
 	(a)	drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return;	
 
 	(b)	an Airworthiness Directive status list;	
 
 	(c)	a service bulletin incorporation list;	
 
 	(d)	a complete component installed listing, to include notable, on-condition, condition monitored, hard time and life limited component listings;	
 
 	(e)	a complete list of Modifications and alterations, including those initiated by Lessee;	
 
 	(f)	interior material burn certificates;	
 
 	(g)	the Maintenance Program for the Aircraft;	
 
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 	(h)	the complete work scope for the checks, inspections and other work to be performed prior to return;	
 
 	(i)	a forecast of the checks, inspections and other work to be performed within twenty-four (24) months after return of the Aircraft;	
 
 	(j)	a list of all no charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from Manufacturer or the Engine manufacturer;	
 
 	(k)	current Engine disk sheets and a description of the last shop visit for each Engine; and	
 
 	(l)	any other data which is reasonably requested by Lessor.	
 
21.4	Return Location	
Lessee at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to Lessor either at Toluca Airport, Mexico or, if the TACA-Aeroman maintenance facility performs the final redelivery-related engineering work, at El Salvador International Airport, El Salvador, or at a commercial airport in the continental U.S. mutually agreed by Lessee and Lessor, or at such other location as may be mutually agreed in writing by Lessee and Lessor. At Lessor’s request and expense and subject to flight crew availability, Lessee will ferry the Aircraft to such location in the U.S. as Lessor may designate.
 
21.5	Full Aircraft Documentation Review	
For the period commencing no later than ten (10) Business Days prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review of Lessor and/or its assigned representative(s) the Aircraft and all of the Aircraft Documentation in one central location with reasonable office space including reasonable access to telephone, photocopy, fax and internet connections at the Aircraft return location.
 
21.6	Copy of Lessee’s Maintenance Program	
At return of the Aircraft and for use by Lessor only for the purpose of bridging the Aircraft from Lessee’s Maintenance Program to the maintenance program of the next operator, Lessee will provide Lessor with a copy of such relevant portions of the Maintenance Program as are necessary for such bridging.
 
21.7	Aircraft Inspection	
 
21.7.1	During the maintenance checks performed immediately prior to the proposed redelivery and at the actual return of the Aircraft, Lessor and/or its assigned representatives will have an opportunity to conduct a systems functional and operational inspection of the Aircraft (and other types of inspections based upon the Aircraft type, age, use and other known factors with respect to the	
 
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Aircraft) and a full inspection of the Aircraft Documentation (including records and manuals), all to Lessor’s satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 21 will be corrected by Lessee at its cost prior to the acceptance flight described in Article 21.7.1.
 
21.7.2	Immediately prior to the proposed redelivery of the Aircraft, Lessee will carry out for Lessor and/or Lessor’s assigned representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by Lessor, in accordance with an airline acceptance flight procedure, either of which will be for the duration necessary to perform such check flight procedures, which is expected not to exceed two (2) hours, and with a maximum of four (4) Lessor’s assigned representatives on board. Flight costs and fuel will be furnished by and at the expense of Lessee. Any deficiencies from the Aircraft return condition requirements set forth in this Article 21 will be corrected by Lessee at its cost prior to return of the Aircraft.	
 
21.7.3	To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date other than as a result of Lessor’s or its representatives’ wilful misconduct or breach of its obligations under this Lease, the Lease Term will be deemed to have been automatically extended and the obligations of Lessee hereunder (including Article 21.14.3) will continue on a day to day basis until the Aircraft is accepted by Lessor executing the Return Acceptance Receipt in the form of Exhibit G .	
 
21.8	FAA or EASA Compliant	
 
21.8.1	No later than four (4) months prior to the scheduled induction date of the Aircraft for the last maintenance visit prior to return of the Aircraft, Lessor will notify Lessee in writing whether the Aircraft at return must be in compliance with the rules and regulations of the FAA or the EASA as set forth in this Article 21. If the cost for complying with the rules and regulations of the EASA would exceed the cost for complying with the rules and regulations of the FAA, such excess cost shall be borne by Lessor, except any cost in relation to items that Lessee would, in the absence of Lessor’s election pursuant to this Article 21.8.1, nonetheless be required to comply with pursuant to applicable rules and regulations of the EASA at its own cost under any other provision under this Lease.	
Absent of a written notice from Lessor as provided above, the Aircraft at return will be in compliance with the rules and regulations as set forth under FAA FAR Part 129.
 
21.8.2	In the event that Lessor requests Lessee to comply with the applicable rules and regulations of EASA for the return of the Aircraft to Lessor after the time period specified above, Lessee hereby agrees that it will use its commercially reasonable efforts to obtain the necessary kits and materials required for such purpose. To the extent that any such kits or materials are unavailable from the	
 
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 	Manufacturer or the corresponding manufacturers or distributors thereof, as applicable, or in a form that shall impede the installation of such kit as required by EASA rules and regulations within the specified period, both parties shall negotiate in good faith for the solution of the delay or for the deferral of the corresponding kit installation, as applicable.	
 
21.9	Certificate of Airworthiness Matters	
The Aircraft will possess a current standard Certificate of Airworthiness, issued by the Aviation Authority. In addition, even if Lessee must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 11, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a Certificate of Airworthiness for transport category aircraft issued by the Aviation Authority and either by the FAA in accordance with FAR Part 21 or by EASA Part 21, as applicable, and, in addition, to be immediately eligible to be placed on the operating certificate of an airline in accordance with Part 129 of the FARs or (EASA) JAR Ops 1 or its equivalent, as applicable.
 
21.10	General Condition of Aircraft at Return	
 
21.10.1	The Aircraft, Engines, APU and Parts will have been maintained and repaired throughout the Lease Term in accordance with this Lease, the Maintenance Program and the rules and regulations of the FAA FAR Part 129, to the extent that such compliance shall not be in conflict with the equivalent rules and regulations from the Aviation Authority.	
 
21.10.2	Aircraft Documentation (including records and manuals) will have been maintained in an up-to-date status and in the English language, in accordance with this Lease and the rules and regulations of the Aviation Authority and either the FAA or the EASA, as applicable, and in a form necessary in order to meet the requirements of Article 21.8. If Lessee subscribes to Manufacturer’s online data access services, Lessee must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD or other format acceptable to Lessor.	
 
21.10.3	The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 21, reasonable wear and tear from normal flight operations accepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis where terminating action has been approved.	
 
21.10.4	The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by Manufacturer and the Aviation Authority and either the FAA or the EASA, as applicable.	
 
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21.10.5	The Aircraft interior (including cabin and windows) and exterior will be clean and cosmetically acceptable to Lessor acting reasonably with all compartments free of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operations.	
 
21.10.6	The Aircraft will be in the same configuration as at Delivery or, if Lessor agrees, in Lessee’s then-current A319 configuration applicable to the majority of its fleet.	
 
21.10.7	No special or unique Manufacturer, Engine manufacturer, Aviation Authority, FAA or EASA inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.	
 
21.10.8	All Modifications and alterations to the Aircraft will have been accomplished in accordance with the Aviation Authority and FAA approved data.	
 
21.10.9	The Aircraft will be returned with Lessor’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent Lessee performed a Modification which cost in excess of ***** and Lessor did not approve such Modification in accordance with Article 11.8.1, Lessor may require Lessee, at Lessee’s cost, to return the Aircraft in its original condition prior to such Modification.	
 
21.10.10	All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance (either by means of repetitive inspections, modifications or terminating action) prior to return of the Aircraft to Lessor or within One Hundred Eighty (180) days after the Termination Date will have been complied with on the Aircraft on a terminating action basis at Lessee’s cost. Such Airworthiness Directives which do not have a terminating action, or where no terminating action is available, will be accomplished at the highest level of inspection or modification possible.	
 
21.10.11	The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer with such tasks being accomplished no less frequently than each “C” Check interval. Also, for the avoidance of doubt, all structural sampling inspection tasks will be complied with on a ***** compliance basis and all structural sampling tasks due within the standard respective interval as defined within the MPD will have been performed on the Aircraft by Lessee.	
 
21.10.12	If any waivers, alternate means of compliance, dispensations, extensions or carry-overs with respect to Airworthiness Directives or other operating or maintenance requirements are granted by the Aviation Authority or permitted by the Maintenance Program, Lessee at its sole cost and expense will nonetheless perform such Airworthiness Directives and other operating or maintenance requirements as if such waiver, alternate means of compliance, dispensations or extensions did not exist.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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21.10.13	The Aircraft will be free from any Security Interest except Lessor’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest, including without limitation any right of detention or sale in favour of the Aviation Authority or any airport authority or any third parties including as such any current or former officers, employees, workers union of Lessee.	
 
21.10.14	All no charge vendor and Manufacturer’s service bulletin kits received by Lessee for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no charge vendor and Manufacturer’s service bulletin kits ordered by Lessee but not yet received will, upon receipt by Lessee, be forwarded as instructed by Lessor. At Lessor’s request, Lessee will furnish free of charge to Lessor any kits purchased as part of Lessee’s implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but not yet installed on the Aircraft any lost or damaged kits shall be procured, replaced and delivered to Lessor at the cost of Lessee.	
 
21.10.15	The Aircraft will be free of any fuel, oil, hydraulic, pneumatic or system related leaks and any damage resulting therefrom. Any repairs of system related leaks or any damage resulting therefrom will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions.	
 
21.10.16	The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be fully serviced and in good working condition and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.	
 
21.11	Checks Prior to Return	
Immediately prior to return of the Aircraft to Lessor, Lessee at its expense will do each of the following:
 
21.11.1	Have performed, by an EASA or FAA, as applicable, approved repair station the next sequential zonal, systems and structural “C” check, the corresponding lower checks (“A” and “B” or equivalent) and all associated routine and non-routine check task items will be accomplished and no deferred, special inspection or carryover items will exist, all in accordance with the MPD, sufficient to clear the Aircraft for operation until the next sequential zonal, systems and structural check under the MPD (“C” or its equivalent, which in any event will not be less than twenty (20) months). Lessee will also weigh the Aircraft. Any discrepancies revealed during such inspection will be corrected in accordance with Manufacturer’s maintenance and repair manuals or EASA or FAA, as applicable, approved data.	
 
21.11.2	Perform an internal and external corrosion inspection of those tasks required in accordance with the MPD and which are required during the “C” check being performed prior to redelivery and correct any discrepancies in accordance with the recommendations of Manufacturer and its structural repair manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
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21.11.3	Remove Lessee’s exterior markings, including all exterior paint, by sanding the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. Lessee will then repaint the Aircraft in the next operator’s livery as specified by Lessor. If such next operator is not identified, Lessee will instead repaint the fuselage, empennage and Engine cowlings in white, with the wings and stabilizer repainted grey. Any painting will be accomplished in such a manner as to result in a cosmetically acceptable (in accordance with industry practices) and uniformly smooth and aerodynamic surface. All mandatory external placards, signs and markings will be properly attached, free from damage, clean and legible. Upon Lessor’s request, Lessee will affix at Lessor’s costs all additional placards provided by Lessor.	
 
21.11.4	Clean the exterior and interior of the Aircraft in accordance with customary industry standards.	
 
21.11.5	If reasonably required by Lessor, repaint by touch-up the interior of the Aircraft, including flight deck, and replace mandatory placards as necessary. Upon Lessor’s request, Lessee will affix at Lessor’s costs all additional placards provided by Lessor.	
 
21.11.6	All repairs to the Aircraft will have been accomplished in accordance with the Maintenance Program, Manufacturer’s structural repair manual (or EASA, French DGAC or FAA approved data supported by Airbus Repair Approval Sheet (RAS), as applicable) for the Aircraft. All external structural repairs shall be accomplished with flush type repairs to the extent such flush repairs have been approved by the Manufacturer, EASA or the FAA. Maximum effort to install flush type repairs will be accomplished, up to and including replacement of affected skin panels. All structural repairs will have been performed on a permanent basis (where permanent repairs are available) in accordance with the applicable manufacturer’s instructions. If no permanent repairs are available, the repairs will be accomplished to the highest level possible. In addition, Lessee will supply to Lessor, all in form and substance satisfactory to Lessor, (i) a repair map indicating the repairs accomplished on the Aircraft and the approved documentation used to accomplish such repairs, and (ii) a dent map, indicating all dents on the Aircraft, complete with appropriate measurements, demonstrating that each dent is within the Manufacturer’s current structural repair manual limits, with their appropriate inspection data attached.	
 
21.11.7	Following the successful completion of the demonstration flight performed by Lessee in accordance with Article 21.7.1 and with Lessor and/or its assigned representatives present, Lessee will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with the Engine manufacturer’s maintenance manual.	
 
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21.11.8	If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, Lessee will correct, to Lessor’s satisfaction such conditions which are determined to be causing such accelerated rate of deterioration.	
 
21.11.9	With Lessor and/or its assigned representatives present, accomplish a maximum power assurance run on the Engines in accordance with the Manufacturer’s Maintenance manual 71-00-00 Test #11, as revised, to successfully demonstrate acceptable take-off parameters. Lessee will evaluate and Lessor will review the Engine performance details and record the Engine maximum power assurance test conditions and results on the Return Acceptance Receipt.	
 
21.11.10	Lessee will provide evidence to Lessor’s satisfaction that the Engine historical and technical records, borescope inspection, take-off and cruise trend monitoring from the previous sixty (60) days operation and other checks specified in Article 21.11.9 do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Engine manufacturer’s maintenance manual. Lessee will correct any discrepancies in accordance with the guidelines set out by the Engine manufacturer which may be discovered during such inspection.	
 
21.11.11	In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 21.11.9 and 21.11.10 result in a dispute regarding the conformity of an Engine with the requirements of this Article 21, Lessee and Lessor will consult with the Engine manufacturer and follow the Engine manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check) with regard to determining if such Engine complies with the requirements of this Article 21 and the manner in which any discrepancies from the requirements of this Article 21 will be rectified.	
 
21.11.12	With Lessor and/or its assigned representatives present, Lessee will perform a full and complete hot and cold section videotape borescope on the APU in accordance with the APU manufacturer’s procedures. Lessee will provide evidence to Lessor’s satisfaction that the borescope inspection does not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. Lessee will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such inspection.	
 
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21.11.13	If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, Lessee will correct, to Lessor’s satisfaction, such conditions which are determined to be causing such accelerate rate of deterioration.	
 
21.12	Part Lives	
At return, the condition of the Aircraft will be as follows:
 
21.12.1	The Aircraft will have zero (0) hours consumed since the last zonal, systems and structural “C” check in accordance with the MPD (excluding hours consumed on the acceptance flight).	
 
21.12.2	Each Engine will meet all of the following:	
 
 	(a)	Each Engine and each module thereof will have no more than Three Thousand (3,000) Flight Hours and One Thousand Five Hundred (1,500) Cycles consumed since its last Engine Performance Restoration Shop Visit.	
 
 	(b)	Each Engine and each Part of each Engine which has a life limit will not have operated more than One Thousand Five Hundred (1,500) Cycles since its last full disk stack replacement.	
 
 	(c)	Notwithstanding sub-sections (a) and (b) above, in case of a demonstrated unscheduled Engine removal, which will restrict Lessee’s ability to comply with the provisions in such sub-sections, Lessor will consider discussing in good faith with Lessee on a case by case basis, whether it could accept each Engine (and each module thereof) having not more than Five Thousand (5,000) Flight Hours consumed since its last Engine Performance Restoration Shop Visit and each life-limited part not having operated more than Two Thousand Five Hundred (2,500) Cycles since its last full disk stack replacement.	
 
 	(d)	Engine documentation will show full traceability to birth for each listed LLP.	
 
21.12.3	The APU will be in good operating condition within maintenance manual limitations and have zero (0) hours consumed (excluding hours consumed during the acceptance flight) since the last Medium Repair or Heavy Repair in accordance with the manufacturer’s maintenance manuals (with any defects identified during such inspection corrected). APU documentation will show full traceability to birth for each listed LLP.	
 
93(138)

21.12.4	The Landing Gear will have no more than Three (3) months utilization since its last Overhaul pursuant to the MPD. Landing Gear documentation will show full traceability to birth for each listed LLP.	
 
21.12.5	Each component or Part of the Airframe (except the Landing Gear) which has a hard time (hour/cycle or calendar) limit to Overhaul pursuant to the MPD will have not less than Four Thousand Seven Hundred Fifty (4,750) Flight Hours, Two Thousand Seven Hundred Fifty (2,750) Cycles or Eighteen (18) months, whichever is the most limiting factor, remaining to operate until its next scheduled Overhaul pursuant to the MPD.	
 
21.12.6	Each LLP of the Airframe not already covered under this Article 21 will have fifty percent (50%) of the full allotment of hours and cycles of its total approved life remaining to operate pursuant to the MPD.	
 
21.12.7	Each component or Part which has a calendar limit, not already covered by this Article 21, will have remaining to operate at least (a) eighteen (18) months from the date of return of the Aircraft to Lessor or (b) one hundred percent (100%) of its total approved life, whichever is less, pursuant to the MPD.	
 
21.12.8	No Part of the Aircraft or Engine will have total hours and total cycles since new greater than one hundred twenty five percent (125%) of that of the Airframe and, with respect to all Parts as a group, the Parts will have an average total time since new no greater than that of the Airframe.	
 
21.12.9	Each Aircraft tire and each brake will be new or will have no more that 10 hours and 5 cycles and zero (0) recaps since new or Overhaul, as applicable.	
 
21.13	Export and De-registration of Aircraft	
At Lessor’s request, Lessee at its cost will (a) provide a valid Certificate of Airworthiness, a ferry flight approval and any other requirement that be applicable from the State of Registration so that the Aircraft can be exported to the country designated by Lessor other than to a Prohibited Country, (b) procure, consent in writing or assist with, as requested by Lessor, the de-registration of the Aircraft from the register of aircraft in the State of Registration and, if applicable with Lessor and Lessor’s Lender giving any required consents, from the International Registry as provided by the Cape Town Convention, and (c) assist with arranging for prompt confirmation of such de-registration to be sent by the registry in the State of Registration to the next country of registration. If any Aircraft work which Lessee is not otherwise required to perform hereunder, including engineering, is required in order to obtain the required Certificate of Airworthiness or the Ferry Flight approval, Lessee will cause to be performed such work at Lessee’s maintenance performer’s facilities at Lessor’s cost based upon prevailing third party rates.
 
94(138)

21.14	Lessee’s Continuing Obligations	
In the event that Lessee does not return the Aircraft to Lessor on the Expiration Date and in the condition required by this Article 21 for any reason other than as a result of an act or omission of Lessor, Lessor’s Lender or the performance of additional work requested by Lessor:
 
21.14.1	The obligations of Lessee under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of Lessee’s Event of Default or any right of Lessor hereunder.	
 
21.14.2	Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to Lessor pursuant to this Lease.	
 
21.14.3	Lessee will fully indemnify Lessor on demand for all damages and prejudices including losses, liabilities, actions, proceedings, costs and expenses thereby suffered or incurred by Lessor as a result of such failure and, in addition, until such time as the Aircraft is redelivered to Lessor and put into the condition required by this Article 21, instead of paying the Rent specified in Article 4.2, Lessee, will pay (i) during the first fifteen (15) days, an amount equal to ***** of the amount of Rent specified in Article 4.2 and (ii) thereafter until the Termination Date, an amount equal to ***** of the amount of Rent specified in Article 4.2, in each case calculated daily for each day from the scheduled Expiration Date until the Termination Date and prorated on the basis of a thirty (30) day month (without prejudice to Lessor’s other rights and remedies hereunder). Payment will be made upon presentation of Lessor’s invoice.	
 
21.14.4	Lessor may elect to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 21 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to perform such correction. All actual costs and expenses incurred by Lessor for such correction will be payable by Lessee within five (5) Business Days following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth such costs and the expenses of such corrections. Lessee’s obligation to pay such amounts will survive the Termination Date.	
 
21.15	Return Acceptance Receipt	
Upon return of the Aircraft in accordance with the terms of this Lease, Lessee will prepare and execute three (3) Return Acceptance Receipts in the form and substance of Exhibit G and Lessor will countersign and return one such Return Acceptance Receipt to Lessee.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
95(138)

21.16	Indemnities and Insurance	
The indemnities and insurance requirements set forth in Articles 15 and 16, respectively, will apply to Indemnitees and Lessor’s assigned representatives during return of the Aircraft, including the ground inspection and acceptance flight.
 
21.17	Storage	
At Lessor’s request, Lessee will, at Lessor’s sole cost and expense, park and store the Aircraft in accordance with Manufacturer’s recommended short term storage program at Lessee’s principal maintenance facilities and maintain insurance on the Aircraft (ground cover only) for a period not to exceed ninety (90) days after the Termination Date provided that (i) suitable facilities are available (ii) any payments required to be made in respect of such services shall be made by Lessor in a timely manner and (iii) the same would not interfere with Lessee’s maintenance services providers scheduling. Lessee will not utilize the Aircraft for any reason during this period.
 
96(138)

22.	ASSIGNMENT	
 
22.1	No Assignment by Lessee	
NO ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART, OR THIS LEASE.
 
22.2	Sale or Assignment by Lessor	
 
22.2.1	Subject to Lessee’s rights pursuant to and in conformity with the provisions of this Lease including without limitation this Article 22, Lessor may at any time and without Lessee’s consent sell, assign or transfer its rights, interest and obligations hereunder or with respect to the Aircraft to a third party (“ Lessor’s Assignee ”). For a period of two (2) years after Lessor’s sale or assignment and at Lessee’s cost, Lessee will continue to name the prior Lessor and the other Indemnitees as additional insureds under the Aviation and Airline General Third Party Liability Insurance specified in Exhibit C .	
 
22.2.2	In the event of the sale of the Aircraft and transfer of Lessor’s rights and obligations under and in conformity with the provisions of this Lease including without limitation this Article 22, Lessor’s Assignee will become “Lessor” of the Aircraft under this Lease and the transferring party (the prior “ Lessor ”) will be relieved of all liability to Lessee under this Lease for obligations arising on and after the date the Aircraft is sold in conformity with the provisions of this Lease. Lessee will acknowledge and accept Lessor’s Assignee as the new “Lessor” under this Lease and will look solely to Lessor’s Assignee for the performance of all Lessor obligations and covenants under this Lease arising on and after such sale date of the Aircraft, provided Lessor’s Assignee and such sale or other transfer comply with the provisions of this Article 22.	
 
22.2.3	Wherever the term “Lessor” is used in this Lease in relation to any of the provisions relating to disclaimer, title and registration, indemnity and insurance contained in Articles 7, 13, 15 and 16, respectively, or with respect to Article 18.2.10, the term “Lessor” will be deemed to include Lessor’s Assignee and Lessor’s Lender, if applicable and to the extent of their respective interest. For avoidance of doubt, in the event of Lessor’s sale or financing of the Aircraft, the disclaimer and indemnity provisions contained in Articles 7 and 15 will continue to be applicable after the sale or assignment to Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa or any successors and permitted assigns thereof, as well as being applicable to Lessor’s Assignee from and after the date when such Lessor’s Assignee shall become “Lessor” hereunder and to Lessor’s Lender for the period during which it was “Lessor’s Lender” hereunder.	
 
97(138)

22.3	Lessor’s Lender	
Subject to Lessee’s rights pursuant to this Lease, Lessor may at any time and without Lessee’s consent grant Security Interests over the Aircraft and assign by way of security Lessor’s interest in the benefit of this Lease to one or more other lenders (each such entity, the “ Lessor’s Lender ”) as security for Lessor’s obligations to Lessor’s Lender.
 
22.4	Lessee Cooperation	
On request by Lessor or Lessor’s Lender and subject to conformity with the requirements of this Article 22, Lessee will promptly execute all such documents (such as a lease assignment agreement and consent) as Lessor or Lessor’s Lender may reasonably require to acknowledge any proper transfer of Lessor’s rights, title or interest in and to the Aircraft and/or this Lease and Lessee’s obligations in connection therewith and Lessee’s acknowledgment that Lessor is not in breach of the Lease. Lessee will promptly provide all other reasonable assistance and cooperation to Lessor and Lessor’s Lender in connection with any proper sale or assignment or the perfection and maintenance of any such security interest, including making all necessary filings and registrations in the State of Registration and providing all opinions of counsel with respect to matters requested by Lessor or Lessor’s Lender.
 
22.5	Change of Governing Law	
Lessor may, upon no less than 120 days prior written notice to Lessee, request that the governing law and jurisdiction of this Lease, and any legal terms and provisions of this Lease which the parties shall agree or which would need to be adjusted in consideration of such change, be changed to the laws and courts of the State of New York in connection with the sale of Lessor’s interest in the Aircraft, provided that Lessor reimburse Lessee for its reasonable costs and expenses (including reasonable legal fees and related expenses) in connection with or arising as a result of any such change in governing law and jurisdiction.
 
98(138)

22.6	Protections	
Without prejudice to Lessor’s rights under Article 23.3 following an Event of Default, Lessee’s obligations under this Article 22 are subject to the following requirements:
 
22.6.1	Lessor will obtain for the benefit of Lessee an acknowledgment from any Lessor’s Assignee or Lessor’s Lender that, so long as no Default or Event of Default has occurred and is continuing hereunder, neither such Person nor any other Person lawfully claiming by or through such Person will interfere with Lessee’s quiet, peaceful use and enjoyment of the Aircraft.	
 
22.6.2	No sale, assignment, transfer or other disposition of any right, title or interest of Lessor, and Lessor’s Assignee or any Lessor’s Lender in or to the Aircraft and/or this Lease shall result in any additional obligations or liability (whether financial or otherwise) of Lessee nor will Lessee’s rights be reduced, restricted, limited or prejudiced as a result of any sale, assignment, transfer or other disposition of the Aircraft or this Lease. No such sale, assignment, transfer or other disposition shall give rise (or could reasonably foreseeably give rise) to any Mexican withholding or other taxes on rentals whatsoever at the time of transfer, unless Lessor’s Assignee is willing to accept rentals net of all such taxes and so confirms to Lessee in writing.	
 
22.6.3	Any Lessor’s Assignee shall:	
 
 	(a)	satisfy the requirements to maintain the registration of the Aircraft in the State of Registration;	
 
 	(b)	have (or have its obligations guaranteed, pursuant to a guaranty agreement reasonably satisfactory to Lessee, by a guarantor that has) a tangible net worth of at least *****;	
 
 	(c)	assume all obligations of Lessor under this Lease; and	
 
 	(d)	not be an airline, other commercial aircraft operator or freight forwarder or any affiliate of any thereof.	
Any transfer to a Person not meeting the requirements set forth in Article 22.6.3 shall be deemed a breach by Lessor of its covenant of quiet enjoyment.
 
22.6.4	No sale, assignment, transfer or other disposition shall violate any applicable Law (including without limitations any securities laws of Mexico, the United States or any other applicable jurisdiction).	
 
22.6.5	Notwithstanding anything to the contrary herein, Lessor shall be responsible for and pay to or as directed by Lessee, within ten (10) Business days of written demand, Lessee’s reasonable fees, costs and expenses (including, without limitation, reasonable attorney’s fees) in connection with the sale, assignment, transfer or other disposition of any or all of its or any Lessor’s Lender’s interest in, to or in respect of the Aircraft (any part thereof) or this Lease including without limitation, such fees, costs and expenses incurred in connection with Lessee’s performance of its obligations under this Article 22,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
99(138)

 	any documentation, filings and registrations related to any such sale, assignment transfer or other disposition (including, without, limitation, any reasonable fees, costs and expenses arising as a result of or in connection with any change in governing law).	
 
100(138)

23.	DEFAULT OF LESSEE	
 
23.1	Lessee Notice to Lessor	
Lessee will promptly notify Lessor if Lessee becomes aware of the occurrence of any Default or Event of Default.
 
23.2	Events of Default	
The occurrence of any of the following will constitute an Event of Default and material breach of this Lease by Lessee:
 
 	(a)	Lessee fails to take Delivery of the Aircraft when obligated to do so under the terms of this Lease;	
 
 	(b)	Lessee fails to make a Rent, Maintenance Fund or other scheduled payment due hereunder in the manner and by the date provided herein and fails to make such payment within one (1) Business Day after such payment is due or fails to make any unscheduled payment within three (3) Business Days after such payment is due;	
 
 	(c)	Lessee fails to obtain or maintain the insurance required by Article 16 (except where such insurance is unavailable for purchase by any airline and Lessee is complying with the provision of Article 16.12);	
 
 	(d)	Lessee fails to return the Aircraft to Lessor on the Expiration Date in accordance with Article 21;	
 
 	(e)	Lessee fails to observe or perform any of its other obligations hereunder and fails to cure the same within ten (10) days after written notice thereof to Lessee.	
 
 	(f)	any representation or warranty of Lessee herein proves to be untrue in any material respect and in Lessor’s reasonable opinion the ability of Lessee to comply with its obligations under the Operative Documents has been materially and adversely affected thereby;	
 
 	(g)	the registration of the Aircraft is cancelled other than as a result of an act or omission of Lessor or Lessor’s Lender;	
 
 	(h)	Lessee abandons or relinquishes control over the Aircraft or Engines;	
 
 	(i)	Lessee or an approved sublessee no longer has unencumbered control (other than Permitted Liens) or possession of the Aircraft or Engines, except as otherwise permitted by this Lease;	
 
101(138)

 	(j)	Lessee threatens or is found to be in danger to permanently (or temporarily, to the extent that Lessee’s ability to comply with its obligations under the Operative Documents may in Lessor’s reasonable opinion be materially and adversely affected thereby) discontinue business or sells or otherwise disposes of all or substantially all of its assets;	
 
 	(k)	Lessee no longer possesses any of the licenses, certificates and permits required for the conduct of its business as a certificated air carrier in Mexico or any of such become revoked or suspended, and in each case, the same would adversely affect its ability to perform its obligations under the Operative Documents, and in case of a suspension, the suspension shall be for a period of more than thirty (30) days provided that Lessee acts diligently to cure the situation immediately after such suspension shall occur;	
 
 	(l)	Lessee fails to pay when due any Airport Charges or Air Navigation Charges assessed with respect to the Aircraft or any aircraft operated by Lessee which, if unpaid, may give rise to any Security Interest in relation to the Aircraft, Engine, APU or any Part except if such amounts are being contested by Lessee in accordance with the provisions of Article 14.5 hereof;	
 
 	(m)	Lessee suspends payment on, is unable to or admits its inability to pay, its debts or other obligations (i) in general as they fall due, (ii) on any single obligation or debt for an amount equal to or in excess of *****, or (iii) in the aggregate for amounts equal to or in excess of *****;	
 
 	(n)	Lessee or a substantial part of Lessee’s property is adjudicated or voluntarily or involuntarily becomes subject of a concurso mercantil , bankruptcy, judicial recuperation, liquidation, reorganization or protection from creditors of Lessee, becomes bankrupt or insolvent in accordance with applicable Law, or Lessee proposes or enters into any composition or other arrangement for the benefit of its creditors generally; and, in the case of any involuntary concurso mercantil or bankruptcy, the same is not dismissed or stayed within sixty (60) days, from the date of filing by the applicant. If instituted by Lessee, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied or relinquished within the period referred to above;	
 
 	(o)	any order, judgment or decree is entered by any court of competent jurisdiction appointing an interventor, administrator, receiver, trustee or liquidator of Lessee or a substantial part of its property, or if a substantial part of Lessee’s property is to be sequestered or if its treasury or administration shall be intervened. If instituted by or done	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
102(138)

 	with the consent of Lessee, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied or relinquished within thirty (30) days;	
 
 	(p)	any indebtedness for borrowed moneys or a guarantee or similar obligation owed by Lessee with a single unpaid balance equal to or in excess of ***** or an aggregate unpaid balance equal to or in excess of ***** or the equivalent in any other currency is declared due before its stated maturity or any judgment or judgments which, in the aggregate are in an amount equal to or in excess of ***** or the equivalent in any other currency is rendered against Lessee and is not satisfied or bonded pending appeal within thirty (30) days of the date of entry thereof; or	
 
 	(q)	Lessee is in default under any other lease or other agreement between Lessee and Lessor or a Lessor affiliate relating to aircraft, engines, aircraft equipment or the extension of credit and the same is not cured within its specified cure period.	
 
23.3	Lessor’s General Rights	
Upon the occurrence of any Event of Default and for so long as the same shall remain unremedied, Lessor may either (i) terminate this Lease by delivering the corresponding notice to Lessee and without the need for judicial intervention, or (ii) demand the mandatory fulfilment of the defaulted obligations of Lessee, at its option and, as applicable in each case, take the following actions and make the following demands (in addition to such other rights and remedies which Lessor may have by statute or otherwise but subject to any requirements of applicable Law):
 
 	(a)	terminate the leasing of the Aircraft under this Lease by giving written notice to Lessee without judicial intervention;	
 
 	(b)	terminate the rights of Lessee to use or operate the Aircraft by giving written notice to Lessee;	
 
 	(c)	require that Lessee immediately cease flying the Aircraft and leave it parked in its then current location by giving written notice to Lessee;	
 
 	(d)	require that Lessee immediately move the Aircraft to an airport or other location designated by Lessor and park the Aircraft there by giving written notice to Lessee;	
 
 	(e)	take possession of the Aircraft and conduct any acts and obtain any orders that may be necessary for such purpose. Upon repossession of the Aircraft, Lessor will then be entitled to sell, lease or otherwise deal	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
103(138)

 	with the Aircraft as if this Lease had never been made. Lessor will be entitled to the full benefit of its bargain with Lessee and may receive and retain any rentals and profits arising from any such sale, lease or other dealing with the Aircraft;	
 
 	(f)	for Lessee’s account, do anything that may be required to cure any Event of Default and recover from Lessee all damages and prejudices including all costs, legal fees and expenses incurred in doing so and Default Interest;	
 
 	(g)	proceed as appropriate to enforce performance of this Lease and to recover any damages for the breach hereof, including the amounts specified in Article 23.5;	
 
 	(h)	apply all or any portion of the Security Deposit and any other security deposits or Maintenance Funds held by Lessor pursuant to any other agreements between Lessor and Lessee to any amounts due; and/or	
 
 	(i)	apply any amounts paid or recovered in respect of Lessee’s liabilities under the Operative Documents to any of Lessee’s liabilities under the Operative Documents in such proportion, order and manner as Lessor determines in its sole discretion.	
Regardless of Lessor’s exercise of any remedy or remedies, Lessee’s obligations under this Lease will continue (including, without limitation, the obligations set forth in Articles 15 and 16) until the same have been fully discharged in accordance with the terms hereof.
When any circumstances shall occur resultant from which Lessee shall be required by Lessor to return the Aircraft, the Airframe, any Engine, the APU or any Part thereof in accordance with the terms of this Lease or upon commencement by Lessor of any suit, claim or upon commencement of any controversy, judicial or otherwise, related with the Aircraft, the rights of possession thereof or this Lease, the Lessee shall, for as long as it shall be in possession of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, be considered as a gratuitous trustee ( depositario ) of the Aircraft, the Airframe, any Engine, the APU or any Part thereof in accordance with the terms of the Second Volume, Title IV ( Libro Segundo, Título IV ), of the Commercial Code. For such purpose, Lessee hereby (i) expressly waives any right to receive any compensation for its acts as trustee in accordance with this Lease, (ii) acknowledge that it shall not be entitled to the use or disposition of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, which will be maintained at the disposal of the Lessor, (iii) acknowledges that the Lessor will be under no obligation to indemnify, reimburse, or pay the Lessee the expenses in which, if any, Lessee shall incur for the conservation and maintenance of the Aircraft, the Airframe, any Engine, the APU or any Part thereof in its capacity as trustee of the same, (iv) acknowledge that it shall have no right of detention of the Aircraft, the Airframe, any Engine, the APU or any
 
104(138)

Part thereof and (v) accepts that it shall remain in custody of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, at the disposal of Lessor, until the same has been materially returned to the Lessor or all Events of Default have been cured and that, the same shall be returned to the Lessor in the location and in accordance to the instructions of Lessor as provided in this Lease.
 
23.4	De-registration and Export of Aircraft	
If an Event of Default has occurred and is continuing, Lessor may take all steps necessary to terminate the lease, deregister the Aircraft, remove the Aircraft from the Operating Permit of Lessee and export the Aircraft from the State of Registration and Lessee shall assist Lessor herewith in all respects.
 
23.5	Lessee Liability for Damages and Prejudices	
If an Event of Default occurs, in addition to all other remedies available at Law or in equity and in addition to any other indemnities as provided in Article 15, Lessor has the right to recover from Lessee and Lessee will pay Lessor within five (5) Business Days after Lessor’s written demand, all of the following:
 
 	(a)	all amounts which are then due and unpaid hereunder and which become due prior to the earlier of Lessor’s recovery of possession of the Aircraft or Lessee making an effective tender thereof;	
 
 	(b)	subject to Lessor’s obligation under Article 23.9, in the event that Lessor shall have re-leased or sold the Aircraft, Lessor may if it shall so elect, demand that Lessee pay to Lessor any accrued but unpaid Rent up to and including the date of the commencement of the re-leasing or the date of sale plus the excess of:	
 
 	(i)	the aggregate unpaid Rent for the Aircraft which would have otherwise have become due hereunder over the Lease Term but for the Event of Default discounted monthly to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as at the date of the commencement of the re-leasing, over	
 
 	(ii)	in the case of re-leasing, the aggregate rental payments to become due under the re-leasing from the date of the commencement of the term of the re-leasing to the date upon which the Lease Term for the Aircraft would have expired pursuant to this Lease but for the Event of Default, discounted monthly to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as of the date of commencement of the term of the re-leasing, or	
 
105(138)

 	(iii)	in the case of a sale, the aggregate fair market rental value of the Aircraft (as determined by a recognized independent aircraft appraiser chosen by Lessor) for a period equal to the remainder of the Lease Term for the Aircraft, after discounting such fair market rental value to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as at the date such valuation is determined by the recognized independent aircraft appraiser;	
 
 	(c)	all out-of-pocket costs in light of the circumstances incurred by Lessor in exercising its remedies hereunder, including but not limited to repossession costs, legal fees, Aircraft storage costs, Aircraft re-lease or sale costs;	
 
 	(d)	any amount of additional principal, interest, fees or other sums paid or payable on account of funds borrowed in order to carry any unpaid amount;	
 
 	(e)	subject to Lessor’s obligation under Article 23.9, any loss, cost, expense or liability sustained by Lessor due to Lessee’s failure to redeliver the Aircraft in the condition required by this Lease; and	
 
 	(f)	subject to Lessor’s obligation under Article 23.9, any other loss, damage, expense, cost or liability which Lessor suffers or incurs as a result of the Event of Default and/or termination of this Lease, including an amount sufficient to fully compensate Lessor for any loss of or damage to Lessor’s residual interest in the Aircraft caused by Lessee’s default.	
 
23.6	Waiver of Default	
By written notice to Lessee, Lessor may at its election waive any Default or Event of Default and its consequences and rescind and annul any prior notice of termination of this Lease. The respective rights of the parties will then be as they would have been had no Default or Event of Default occurred and no such notice been given.
 
23.7	Present Value of Payments	
In calculating Lessor’s damages hereunder, upon an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred will be calculated on a present value basis using a discounting rate to be agreed upon between the parties at the time of calculation, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof, regardless of the condition thereof.
 
106(138)

23.8	Use of Termination Date	
For avoidance of doubt, it is agreed that if this Lease terminates and the Aircraft is repossessed by Lessor due to an Event of Default, then, notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Expiration Date” will be utilized in calculating the damages to which Lessor is entitled pursuant to Article 23.5.
 
23.9	Mitigation of Damages	
Lessor agrees to act in a commercially reasonable manner to mitigate any damages it may incur as a result of the occurrence of an Event of Default.
 
107(138)

24.	NOTICES	
 
24.1	Manner of Sending Notices	
Any notice, request or information required or permissible under this Lease will be in writing in Spanish and accompanied with an English translation thereof. Notices will be delivered in person or sent by fax, letter (mailed airmail, certified and return receipt requested), or by expedited delivery with proof of reception by addressee, addressed to the parties as set forth in Article 24.2. In the case of a fax, notice will be deemed received on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent. In the case of a mailed letter, notice will be deemed received upon actual receipt in accordance with proof issued by the postal service. In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery. If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions.
 
24.2	Notice Information	
Notices will be sent:

If to Lessor:	 	Arrendadora Financiera Inbursa, S.A. de C.V.	
	 	Sociedad Financiera de Objeto Multiple,	
	 	Entidad Regulada, Grupo Financiero Inbursa	
	 	Paseo de las Palmas 736	
	 	Col. Lomas de Chapultepec	
	 	Mexico, 11000, D.F.	
	 	Mexico	
	 	Attention:	 	Director Juridico	
	 	Fax:	 	+52 55 52 02 52 00	
		
With a copy to:	 	Jetscape, Inc.	
	 	10 S. New River Drive East, Suite 200	
	 	Fort Lauderdale, FL 33301	
	 	United States of America	
	 	Attention:	 	Legal Department	
	 	Fax:	 	+1 954 763 4757	
		
If to Lessee:	 	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
	 	Prolongación Paseo de la Reforma No. 490	
	 	Piso 1 (Edifício GE)	
	 	Colonia Santa Fé Peña Blanca	
	 	Del. Alvaro Obregón	
	 	Mexico D.F. 01012	
	 	Mexico	
	 	Attention:	 	General Counsel	
	 	Fax:	 	+52 55 5261 6460	
or to such other places and numbers as either party directs in writing to the other party.
 
108(138)

25.	GOVERNING LAW AND JURISDICTION	
 
25.1	Governing Law	
This Lease is governed by and shall be construed in accordance with the Federal Laws of Mexico.
 
25.2	Jurisdiction	
For everything related to the interpretation, fulfillment, and enforcement of this Lease, the parties hereto expressly and irrevocably submit to the jurisdiction of the competent courts of the Federal District of Mexico and hereby waive in express and irrevocable form their right to any other jurisdiction that to the same may correspond by virtue of their present or future domicile, of the location of their assets or in any other form.
 
25.3	Waiver of Sovereign Immunity	
Lessee irrevocably and unconditionally:
 
 	(i)	agrees that if Lessor brings legal proceedings against it or its assets in relation to this Lease no immunity from such proceedings (which will be deemed to include without limitation, suit, attachment prior to judgement, other attachment, the obtaining of judgement, execution or other enforcement) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire; and	
 
 	(iii)	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgement which may be made or given in such proceedings.	
 
25.4	Prevailing Party in Dispute	
If any legal action or other proceeding is brought in connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to recover expenses and costs including attorneys’ fees and other costs incurred in such action or proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and post judgment Default Interest.
 
109(138)

25.5	Waivers	
EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO IN ARTICLE 25.2, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
 
110(138)

26.	MISCELLANEOUS	
 
26.1	Expenses	
Each of Lessor and Lessee shall bear its own costs and expenses in respect of the negotiation and execution of this Lease and the other Operative Documents, including the fees and disbursements of its counsel, brokers and agents. Lessee shall bear the cost of translating this Lease into Spanish and certifying such translation by a translation expert listed as such by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature (and any related necessary documents), if required for the registration or the enforcement thereof in the State of Registration or in Mexico. Lessee shall also pay all costs, fees and expenses required to have this Lease ratified by a mercantile broker or by a notary public (and any related necessary documents) ratified, notarized and legalized as applicable for the registration or enforcement thereof in the State of Registration or in Mexico. If a party hereto (the “ Requesting Party ”) requests any approvals, consents, waivers, modifications or amendments hereto, such Requesting Party shall reimburse the other party for all out-of-pocket costs and expenses, including reasonable attorneys fees, incurred by such other party in connection with such approvals, consents, waivers, modifications or amendments. Lessee shall bear all costs, including attorneys fees and expenses, whether or not trial be brought and both at trial and on appeal or amparo , incurred by Lessor and/or any Lessor’s Lender in properly enforcing any obligation of Lessee hereunder and Lessee shall indemnify and hold Lessor and any Lessor’s Lender harmless from any such cost and expense and any loss or damage incurred in connection with such proper enforcement.
 
26.2	Power of Attorney	
Lessee agrees to provide an irrevocable power of attorney for deregistration, removal of the Aircraft from Lessee’s Operating Certificate and export of the Aircraft, the Airframe, any Engines and any Part thereof and for collection of insurance proceeds in substantially the same form as Exhibit F hereto for the purpose of enforcing Lessor’s rights in respect of this Lease, including without limitation, the return, repossession, de-registration and exportation of the Aircraft. Lessee will take all steps required under the Laws of the State of Registration to provide such power of attorney to Lessor and Lessor’s Lender and to any individuals to whom such shall indicate with capacity of substitution and delegation in compliance with the requirements of Law for it to be valid and fully enforceable by Lessor. Lessor hereby agrees that in the event that it shall act pursuant to the foregoing powers of attorney in absence of the existence of an Event of Default it shall be liable to Lessee for the damages and prejudices that may result from such acts.
 
111(138)

26.3	Lessor Performance for Lessee	
The exercise by Lessor of its remedy of performing a Lessee obligation hereunder is not a waiver of and will not relieve Lessee from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.
 
26.4	Lessor’s Payment Obligations	
Any obligation of Lessor under this Lease to pay or release any amount to Lessee is conditioned upon (a) all amounts then due and payable by Lessee to Lessor under this Lease having been paid in full and (b) no Default or Event of Default having occurred and continuing hereunder at the time such payment or release of payment is payable to Lessee provided however, that upon cure of any such Default or Event of Default, whether by or on behalf of Lessee directly or by application of amounts so withheld, Lessor shall forthwith pay to Lessee the amount so withheld less the amount applied in full or partial cure of any such Default or Event of Default.
 
26.5	Materiality	
For the purpose of this Lease and the other Operative Documents, the terms “material” or “materially” shall whenever such terms shall be applicable, except in reference to actual items of equipment or repair or where the context otherwise indicates or requires, be understood to be in reference to the substantial part or to the majority proportion of the concept or event that it intends to qualify.
 
26.6	Usury Laws	
The parties intend to contract in strict compliance with any applicable usury Laws. Notwithstanding anything to the contrary in the Operative Documents, Lessee will not be obligated to pay Default Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by Lessor in connection with the Operative Documents. During any period of time in which the then applicable highest lawful rate is lower than the Default Interest rate, Default Interest will accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate is greater than the Default Interest rate, then Lessee will pay Default Interest at the highest lawful rate until the Default Interest which is paid by Lessee equals the amount of interest that would have been payable in accordance with the interest rate set forth in Article 4.6.
 
112(138)

26.7	Delegation by Lessor	
Lessor may delegate to any Person(s) all or any of the rights, powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and conditions as Lessor thinks fit provided, however, no such delegation shall be deemed in any manner to relieve Lessor of any of its obligations hereunder in respect of all of which Lessor shall remain liable to the same extent as if no such delegation hade been made and further provided that no such delegation shall result in any cost, expense, liability or obligation in excess of or in addition to these for which Lessee would otherwise have been liable in the absence of such delegation.
 
26.8	Confidentiality	
The Operative Documents and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal or financial advisors; as required in connection with any filings of this Lease in accordance with Article 13; in connection with Lessor’s potential sale of the Aircraft or assignment of this Lease, provided the potential purchasers shall have agreed to hold any such information confidential; as required for enforcement by either party of its rights and remedies with respect to this Lease or as required by applicable Law) without the prior written consent of the other party. If any disclosure will result in an Operative Document becoming publicly available, Lessee and Lessor will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of such Operative Document. Notwithstanding the foregoing, Lessor may use true copies of Lessee’s logo and pictures of the Aircraft painted in Lessee’s livery in Lessor’s marketing materials.
 
26.9	Rights of Parties	
The rights of the parties hereunder are cumulative, not exclusive, may be exercised as often as each party considers appropriate and are in addition to its rights under general Law. The rights of one party against the other party are not capable of being waived or amended except by an express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or amendment of that or any other such right. Any defective or partial exercise of any such rights will not preclude any other or further exercise of that or any other such right and no act or course of conduct or negotiation on a party’s part or on its behalf will in any way preclude such party from exercising any such right or constitute a suspension or any amendment of any such right.
 
113(138)

26.10	Further Assurances	
Lessee agrees and undertakes at its own expense from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments consistent with the business, economic, commercial and other agreements of the parties as expressed herein as may be required by Law or requested by Lessor to establish, maintain or protect the rights and remedies of Lessor or to carry out and effect the intent and purpose of this Lease and any other document relating to the transactions contemplated herein. At any time the Cape Town Convention is published in the Official Gazette and deposited at UNIDROIT to become applicable in the State of Registration and/or Mexico, Lessee shall at its own expense do and perform such other and further acts and execute and deliver any and all such other instruments as may be requested by Lessor or Lessor’s Lender and which are necessary and consistent with the business, economic, commercial and other agreements of the parties as expressed herein in order to (i) register any international interest under this Lease or any other document relating to the transactions contemplated herein to which Lessee is a party, or (ii) register any interest in the Aircraft or any part thereof permitted by the Cape Town Convention and/or the Geneva Convention, if applicable, or (iii) to protect and perfect Lessor’s and Lessor’s Lender’s interest in the Aircraft and this Lease (and any approved sublease, if applicable) in the State of Registration, Mexico or in any other jurisdictions in or over which Lessee (and any sublessee, if applicable) may operate the Aircraft, including, without limitation, amending this Lease or any other document relating to the transactions contemplated herein, or to enter into other agreements, as may be necessary.
 
26.11	Spanish Language Version Prevails	
The English version of this Lease shall be used for the continuing compliance and determination of the parties rights and obligations hereunder. The mutually agreed, executed and registered Spanish version of the Lease however will prevail for the interpretation and resolution of any dispute or controversy existing between the parties and over any translations thereof.
 
26.12	Use of Word “including”	
The term “including” is used herein without limitation.
 
26.13	Headings	
All article and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section will be interpreted as a reference to such article, paragraph or section of this Lease.
 
114(138)

26.14	Invalidity of Any Provision or Illegality	
 
26.14.1	If any of the provisions of this Lease become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.	
 
26.14.2	If a change shall have occurred after the date of this Lease in applicable Law which would make it illegal for Lessor to lease the Aircraft to Lessee or for Lessee to lease the Aircraft from Lessor and to fully perform its obligations hereunder, the parties agree to negotiate in good faith to restructure this Lease or to otherwise solve the situation (without prejudice to Lessee’s obligation to return the Aircraft to Lessor in accordance with this Lease as agreed between the parties at that time).	
 
26.15	Time Limitations	
Time is of the essence in the performance of all obligations of the parties under this Lease and, consequently, all time limitations set forth in the provisions of this Lease will be strictly observed.
 
26.16	Amendments in Writing	
The provisions of this Lease may only be amended or modified by a writing executed by Lessor and Lessee.
 
26.17	Ratified Signatures	
The parties hereunder will execute this Lease in the presence of a mercantile broker or notary public which shall ratify the signatures of the parties hereto.
 
26.18	Entire Agreement	
The Operative Documents constitute the entire agreement between the parties in relation to the leasing of the Aircraft by Lessor to Lessee and supersede all previous proposals, agreements and other written and oral communications in relation hereto. The parties acknowledge that there have been no representations, warranties, promises, guarantees or agreements, express or implied, except as set forth herein.

 
115(138)

IN WITNESS WHEREOF , Lessee and Lessor have caused this Lease to be executed by their respective officers in this city of Mexico, D.F., as of the date and year first written above.
Arrendadora Financiera Inbursa, S.A. de Concesionaria Vuela Compañía de C.V. Sociedad
Financiera de Objeto Aviación, S.A. de C.V.
Multiple, Entidad Regulada, Grupo
Financiero Inbursa

By:	 	/s/ Luis Roberto Frías Humphrey	 		 	By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Luis Roberto Frías Humphrey	 		 	Name:	 	Alfonso Ascencio Triujeque	
Title:	 	Legal Representative	 		 	Title:	 	General Counsel	
 
116(138)

EXHIBIT A
ENGINE PERFORMANCE RESTORATION SHOP VISIT
“ Engine Performance Restoration Shop Visit ” means, in respect of an engine, a performance restoration shop visit of such engine with a minimum target build life of 13,000 engine flight hours at an average stage length of 2.3:1 performed in accordance with a workscope not less extensive than that set out below and conducted in accordance with the Maintenance Management Plan (“ MMP ”):

SECTION REF	  	MODULE	  	First Shop Visit	  	Subsequent
Shop Visits	
8	  	Fan Module	  	L3	  	L3	
9	  	Low Pressure Compressor	  	L1/L2	  	L3	
10	  	Internal Gearbox/Front Bearing Compartment	  	L1/L2	  	L3	
11	  	Fan Case and Fan Frame	  	L1/L2	  	L2/L3	
12	  	High Pressure Compressor Module	  	L1/L2	  	L3	
13	  	Diffuser	  	L1/L3	  	L3	
14	  	Combustor	  	L3	  	L3	
15	  	No. 4 Bearing Compartment	  	L1/L2/L3	  	L3	
16	  	Nozzle Guide Vane Group	  	L3	  	L3	
17	  	High Pressure Turbine	  	L3	  	L3	
18	  	Low Pressure Turbine Module	  	L1/L2	  	L3	
19	  	Turbine Exhaust Case	  	L1/L2	  	L3	
20	  	External Gear Box	  	L1/L2	  	L2/L3	
22	  	Nacelle Components	  	L2	  	L3	
 
117(138)

EXHIBIT B
PROHIBITED COUNTRIES
“ Prohibited Country ” means, for the purpose of Articles 10.3 and 10.6, any of:
Afghanistan
Bosnia
Chechnya
Cuba
Iran
Iraq
North Korea
Sudan
Uganda
Zaire
and, for the purpose of this Lease (including without limitation Articles 10.3 and 10.6), any country 1) where war risk insurance cannot be obtained; 2) any country (other than Mexico) which is under any United Nations embargos, sanctions or orders; 3) any country (other than Mexico) which is the subject of U.S. embargos or sanctions, or which would compromise the ability of Lessee to maintain Mexican or U.S. registration of the Aircraft, as applicable, or place Lessee or Lessor in violation of any Mexican or U.S. laws or statutes; or 4) to and from which or within which the operation of the Aircraft could result in the imposition of any civil or criminal penalty against Lessor, Lessor’s Lender or Lessee or result in the seizure, confiscation, detention or other loss of the Aircraft.
This Exhibit may be reasonably updated by Lessor (in consultation with Lessee) during the Lease Term as global events dictate.
 
118(138)

EXHIBIT C
FORM OF CERTIFICATE OF INSURANCE
SEE FOLLOWING PAGES
 
119(138)

CERTIFICATE OF INSURANCE AND REINSURANCE
March 28, 2007
TO ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.
SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA
THIS IS TO CERTIFY that as Insurance Brokers we have placed Insurance in the name of CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS) and/or Associated and/or Affiliated and/or Subsidiary Companies for their respective rights and interests (hereinafter called the “ Insured ”) with SEGUROS INBURSA. (as the “ Insurers ”) and that we, as Reinsurance Brokers, have placed in London and the International Insurance Markets Reinsurance in the name of the Insurers for account of the Insured, covering their operations in connection with their entire fleet of aircraft, including all new, acquired and leased aircraft from the moment they become the insurance responsibility of the Insured, whilst operating anywhere in the World, but excluding any area the subject of a United Nations sanction, against the following risks and up to the limits stated :-covering their operations in connection with their entire fleet of aircraft, including all new and acquired aircraft from the moment they become the insurance responsibility of the Insured, whilst operating anywhere in the World, but in respect of Hull War and Allied Risks also excluding Iraq, Afghanistan, Somalia, Zaire, Angola, Algeria, Burundi, Rwanda, Liberia, Bosnia Hercegovina, Tadzhikistan - or held covered subject to prior advice - overflights covered subject to necessary permits being obtained, against the following risks and up to the limits stated :-
 
1.	HULL ALL RISKS (including Aircraft engines, spare parts and equipment including ground support equipment, aircraft spares kits and engineers tools either owned by the Insured or the property of others for which the Insured are responsible, including whilst in transit, hereinafter called “ Spares ”) of loss or damage whilst flying and/or on the ground, on an agreed value basis for an agreed value. This coverage provided is subject to the following deductibles :-	
In respect of A319-133 aircraft - ***** each and every loss excluding Total Loss or Constructive Total Loss or Compromised Total Loss or Arranged Total Loss.
In respect of Spares (not applicable to loss or damage caused by fire, wind, tornado c clone, flood or explosion or to loss or damage arising out of an accident to the carrying aircraft) - ***** each and every loss but in respect of ingestion damage to engines whilst bench testing subject to full deductible as applicable to Aircraft to which engine is destined to be fitted, but not applicable to Total Loss or Constructive Total Loss or Compromised Total Loss or Arranged Total Loss of the engine concerned.
 
2.	HULL WAR AND ALLIED RISKS (including Spares) as excluded by the War, Hijacking and other Perils Exclusion Clause (AVN.48B) other than paragraph (b) thereof on an agreed value basis, for an Agreed Value as at (1) above (and including confiscation and requisition by the State of Registration). Coverage for Spares is restricted in respect of War Risks (as defined in paragraph (a) of Section One of LSW 555D) is restricted to air and sea transits and incidental land transits in accordance with Institute War Clauses (Cargo) CL255 and Institute War Clauses (Air Cargo) CL258, as applicable. The Hull War and Allied Risks Coverage is subject to a policy aggregate limit of *****. NOTE: THIS AGGREGATE LIMIT MAY BE REDUCED OR EXHAUSTED BY VIRTUE OF CLAIMS MADE IN RESPECT OF ANY AIRCRAFT/SPARES INSURED UNDER THE POLICY.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

March 28, 2007	  	Page 1	  	Ref:  VOLARIS — XA-VOF	

The coverage in respect of spares, as detailed in 1. and 2. above is for such sums as may be declared by the Insured, subject to a limit of ***** any one sending / any one occurrence.
 
3.	AIRCRAFT THIRD PARTY, PASSENGER, BAGGAGE, CARGO, MAIL and AIRLINE GENERAL THIRD PARTY AND CONTRACTUAL LEGAL LIABILITY for a Combined Single Limit (Bodily Injury/Property Damage) of at least ***** any one occurrence, each aircraft, unlimited in all, but in the annual aggregate in respect of Products Legal Liability. War and Allied Risks are also covered, in accordance with the Extended Coverage Endorsement (AVN 52E) as contained in the Policy for a Combined Single Limit of at least ***** any one occurrence, each Aircraft.	
It is further certified that Insurers have been advised of the attachment of the following Equipment , hereunder :-

Aircraft Type :	  	Airbus A3I9-133 with two (2) IAE International Aero AG V2527M-A5 Engines	
Registered Marks:	  	XA - VOF	
Manufacturers Serial No.:	  	3077. With respect to the Engines V1256I and V12563	
Agreed Value :	  	***** to be reduced by ***** on each anniversary of the	
	  	Delivery Date.	
Effective Date :	  	See Attached Schedule of Insurers	
Policy Deductible applicable to physical damage to the Equipment :	  	as stated herein	
Appointed Broker:	  	Aon Risk Services of Texas, Inc.	
The said Equipment is the subject of the following Contract(s):
 
 	1.	Aircraft Lease Agreement , dated as of March 26, 2007 between ARRENDADORA FINANCIERA INBURSA, S.A. de C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA, a company formed under the laws of Mexico (“Lessor”), and CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V., d/b/a VOLARIS, a sociedad anonima de capital variable organized and existing under the laws of Mexico (“Lessee”)	
Additional Insureds:
 
 	1.	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA	
 
 	2.	When notified by the Contract Party in 1, LESSOR’S LENDER (AS DEFINED IN THE LEASE)	
AND, in addition, in respect of Legal Liability Insurances, their respective shareholders, Affiliates, trustees, beneficiaries, members, directors, officers, employees, servants, agents, successors, assigns and contractors and in accordance therewith Insurers have agreed to the following:-
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

March 28, 2007	  	Page 2	  	Ref:  VOLARIS — XA-VOF	

It is noted that the Contract Party(ies) has an interest in respect of the Equipment under the Contract(s) . Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of the Insurance or until the expiry or agreed termination of the Contract(s) or until the obligations under the Contract(s) are terminated by any action of the Insured or the Contract Party(ies) , whichever shall first occur, in respect of the said interest of the Contract Party(ies) and in consideration of the Additional Premium it is confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that the following provisions are specifically endorsed to the Policy:-
 
1.	Under the HULL “ALL RISKS” and HULL WAR and ALLIED RISKS Coverages	
 
1.1	In respect of any claim on Equipment that becomes payable on the basis of a Total Loss, settlement (net of any relevant Policy deductible) shall be made to the order of the Contract Party(ies) . In respect of any other claim, settlement (net of any relevant policy deductible) shall be made with such party(ies) as may be necessary to repair the Equipment unless otherwise agreed after consultation between the Insurers and the Insured and, where necessary under the terms of the Contract(s) , the Contract Party(ies) . Such payments shall only be made provided the same are in compliance with all applicable laws and regulations.	
 
1.2	Insurers shall be entitled to the benefit of salvage in respect of any property for which a claims settlement has been made.	
 
1.3	The Reinsurers and the Reassured hereby agree that in the event of any claim arising under the reinsurance in respect of a total loss or other claim where as provide by the Agreement such claim is to be paid to the person named as Loss Payee or Contract Party under the Original Policy, the Reinsures shall in lieu of payment to the Reassured, its successors in interest and assignee pay to the person named as Loss Payee or Contract Party or such person’s assigned under the Original Policy effected by the Assured that portion of any loss due for which the Reinsures would otherwise be liable to pay the Reassured (subject to proof of loss), it being understood and agreed that such payment by the Reinsurers shall (to the extent of such payment) fully discharge and release the Reinsures from any and all further liability in connection therewith.	
 
2.	Under the Legal Liability Insurance	
 
2.1	Subject to the provisions of this Endorsement, the Insurance shall operate in all respects as if a separate policy had been issued covering each party insured hereunder, but this provision shall not operate to include any claim howsoever arising in respect of loss or damage to the Equipment insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds shall not exceed the limits of liability stated in the Policy.	
 
2.2	The Insurance provided hereunder shall be primary and without right of contribution from any other insurance which may be available to the Contract Party(ies) .	
 
2.3	This endorsement does not provide coverage for the Contract Party(ies) with respect to claims arising out of their legal liability as manufacturer, repairer, or servicing agent of the Equipment .	

March 28, 2007	  	Page 3	  	Ref:  VOLARIS — XA-VOF	

3.	Under ALL Insurances	
 
3.1	The Contract Party(ies) are included as Additional Insured(s) as their respective interests may appear.	
 
3.2	The cover afforded to each Contract Party(ies) by the Policy in accordance with this Endorsement shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy PROVIDED THAT the Contract Party(ies) so protected has not caused, contributed to or knowingly condoned the said act or omission.	
 
3.3	The provisions of this Endorsement apply to the Contract Party(ies) solely in their capacity as financier/lessor in the identified Contract(s) and not in any other capacity. Knowledge that any Contract Party(ies) may have or acquire or actions that it may take or fail to take in that other capacity (pursuant to any other contract or otherwise) shall not be considered as invalidating the cover afforded by this Endorsement.	
 
3.4	The Contract Party(ies) shall have no responsibility for premium and Insurers shall waive any right of setoff or counterclaim against the Contract Party(ies) , except in respect of outstanding premium in respect of the Equipment .	
 
3.5	Upon payment of any loss or claim to or on behalf of any Contract Party(ies) , Insurers shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Contract Party(ies) indemnified hereby (but not against any Contract Party(ies) . Insurers shall not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers, such Contract Party(ies) shall do all things reasonably necessary to assist the Insurers to exercise said rights.	
 
3.6	Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to the Contract Party(ies) by the giving of not less than Thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of War and Allied Perils) notice in writing to the Appointed Broker . Notice shall be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement.	

March 28, 2007	  	Page 4	  	Ref:  VOLARIS — XA-VOF	

EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS ENDORSEMENT:-
 
1.	THE CONTRACT PARTY(IES) ARE COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.	
 
2.	THE POLICY SHALL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE CONTRACT(S) WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.	
In addition to the foregoing it is further certified that Insurers have agreed to include the following provisions:-
 
1.	Under the Hull “All Risks” and Hull “War Risks” Insurances:-	
 
1.2	To include a 50%/50% Clause (in accordance with AVS103).	
It is our opinion, as Insurance Brokers, that the Insurances carried by the Insured, as described in this Certificate of Insurance comply with the relative parts of the Contract(s) as far as the requirements relate to the insurance as herein stated and that the Insurance and Reinsurance arrangements are effected with Insurers and Reinsurers of recognised responsibility who normally participate in airline Insurance Programmes.
It is further certified that Insurers have applied the Date Recognition Exclusion Clause - AVN 2000 and have agreed to provide limited “writeback” of coverage in respect thereof in accordance with the Date Recognition Limited Coverage Clauses AVN 2001 and AVN 2002, as applicable.
Subject to the terms, conditions, limitations, exclusions and cancellation provisions of the relative Policy Numbers (see attached Schedule of Insurers) which expire at midnight as per the attached schedule.
The coverage provided shall not contravene any applicable United Nations sanctions.
AON RISK SERVICES OF TEXAS, INC.
Authorized Representative
SEVERAL LIABILITY NOTICE - The subscribing insurers’ obligations under policies to which they subscribe are several and not joint and are limited solely to the extent of their individual subscriptions. The subscribing insurers are not responsible for the subscription of any co-subscribing insurer who for any reason does not satisfy all or part of its obligations.

March 28, 2007	  	Page 5	  	Ref:  VOLARIS — XA-VOF	

EXHIBIT D
FORM OF BROKERS’ LETTER OF UNDERTAKING
SEE FOLLOWING PAGES
 
120(138)

LETTER OF UNDERTAKING
March 28, 2007
 
TO:	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.	
SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO
FINANCIERO INBURSA
CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS
Dear Sirs,
AIRCRAFT TYPE Airbus A319-133
M.S.N. 3077
Registered Marks: XA-VOF
OPERATOR:    CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS)
We confirm we have placed Insurance in the name of CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS) and/or Associated and/or Affiliated and/or Subsidiary Companies for their respective rights and interests (hereinafter called the “Insured”) with SEGUROS INBURSA, (as the “Insurers”) and that we, as Reinsurance Brokers, have placed in London and the International Insurance Markets Reinsurance in the name of the Insurers for account of the Insured, covering their operations in connection with their entire fleet of aircraft.
Pursuant to instructions received from the Operator and in consideration of your approving ourselves as the Insurance Broker for such insurances, we undertake as follows in connection with the Operator’s Fleet Policy arrangements (under which the Aircraft identified above is insured), but only in relation to your interest(s) in the Aircraft:-
 
1.	In relation to the Hull and Hull War Risks Insurances, to hold the insurance slips and the benefit of those insurances to your order in accordance with the loss payable provision referenced in the said Certificate of Insurance, but subject always to our requirements to operate the Fleet Policy arrangements in so far as they relate to any other aircraft insured thereunder.	
 
2.	To advise you, promptly :-	
 
 	2.1	of the receipt by us of any notice of cancellation or material change in the insurances; and	
 
 	2.2	if any premiums are not paid to us in accordance with the accounting procedures that exist between the Operator and ourselves before we notify insurers of such non-payment of premiums; and	
 
 	2.3	upon application from you, of the premium payment situation; and	
 
 	2.4	if we cease to be Insurance Brokers to the Operator.	

 

					
March 28, 2007	  	Page 6	  	Ref:  VOLARIS — XA-VOF	

3.	Following a written application received from you not later than one month before expiry of these insurances to notify you within fourteen days of the receipt of such application in the event of our not having received renewal instructions from the Operator.	
The above undertakings are given subject to :-
 
a.	our continuing appointment for the time being as Insurance Brokers to the Operator; and	
 
b.	all claims and return premiums being collected through ourselves as Insurance Brokers; and	
 
c.	our lien, if any, on the said insurances for premiums due in respect of the Aircraft.	

AON RISK SERVICES OF TEXAS, INC.	
	
Authorized Representative	

 

					
March 28, 2007	  	Page 7	  	Ref:  VOLARIS — XA-VOF	

SCHEDULE OF PARTIES TO WHOM NOTICE IS TO BE GIVEN
Certificate : VOLARIS — XA-VOF
Insured : VOLARIS
Subject : Airbus A319-133 XA-VOF, msn 3077
PLEASE READ CAREFULLY
Under the attached Certificate, Underwriters have agreed to give notice in certain circumstances. In order to ensure our ability, as the intermediary, to direct such notice to the relevant parties, we would request that you complete the schedule below and return it to Aon Risk Services of Texas, Inc. , if possible by facsimile. (OUR DIRECT FACSIMILE NUMBER IS 214 989 2114)
PLEASE NOTE : We would remind you that notices are effective from the time of issuance and failure to provide us with the above requested information will severely inhibit our ability to ensure that you are given prompt advice. At present the information held on our files is as follows. This schedule only need be returned to us in the event that the information below is incomplete or inaccurate .

Company:	 	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.	
Address:	 	SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD
REGULADA, GRUPO FINANCIERO INBURSA	
	 	Paseo de las Palmas 736	
	 	Col. Lomas de Chapultepec	
	 	Mexico D.F.	
	 	11000	
	 	Mexico	
Facsimile:	 	5255-5261-6460	
Addressee:	 	General Counsel	
		
Company:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V.	
Address:	 	Prolongation Paseo de la Reforma, #490	
	 	Piso 1, Edificio GE, Col. Santa	
	 	Fe Pena Blanca, Del. Alvaro Obregón	
	 	Mexico, D.F. 01012	
	 	Mexico	
Facsimile:	 	5255-5261-6460	
Addressee:	 	General Counsel	

 

					
March 28, 2007	  	Page 8	  	Ref:  VOLARIS — XA-VOF	

EXHIBIT E
FORM OF ACCEPTANCE CERTIFICATE
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. , a Mexican company (“ Lessee ”) does hereby represent, acknowledge, warrant and agree as follows:
1. Lessee and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa (“ Lessor ”) have entered into an Aircraft Lease Agreement dated as of March 26, 2007 (hereinafter referred to as the “Lease”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. Lessee has this     day of                     ,              (Time:             ) at             received from Lessor possession of:
(a) One (1) new Airbus A319-133 aircraft bearing Manufacturer’s serial number 3077 and registration mark XA-VOF, together with two (2) IAE V2527M-A5 engines bearing manufacturer’s serial numbers V12561 and V12563 (each of which has at least 1750 lbs of thrust) and one (1) Honeywell 131-9A APU bearing manufacturer’s serial number P-3500, all in airworthy condition.
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts.
(c) The loose equipment set forth in the list of Loose Equipment attached hereto.
3. The Aircraft had the following seating configuration at the Delivery Date:
                     business class seats
                     economy class seats
4. The Airframe, Engines, APU and Parts had the following hours/cycles at the Delivery Date:
 
 	(a)	Airframe :	
Maximum gross takeoff weight:                     pounds
Total hours:             Total Landings:             
 
121(138)

 	(b)	Engines :	
Certified thrust rating:                      pounds (from data plate)

Position	  	Serial No.	  	Total Hours	  	Total Cycles	
 
 	(c)	APU :	
MSN                     
Total hours:             
            hours/            cycles remaining on APU LLPs
 
 	(d)	Landing Gear :	

Position	  	Serial No.	  	Total Hrs/Cycles	  	Hrs/Cycles/days
remaining to next
Overhaul	
Nose	  		  		  		
Left Main	  		  		  		
Right Main	  		  		  		
5. The amount of fuel on board at the Delivery Date is             (circle one) pounds/kilos (            gallons).
6. All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease.
7. The Aircraft, Engines, APU, Parts and Aircraft Documentation as described in the Lease have been fully examined by Lessee and have been received in a condition fully satisfactory to Lessee and in full conformity with the Lease in every respect.
8. The Lease is in full force and effect, Lessor has fully performed all of its obligations under the Lease, and Lessee has no claims, offsets, deductions, setoff or defenses of any kind or nature in connection with the Lease.
9. Lessee has obtained all required permits, authorizations, licenses and fees of the State of Registration or any Government Entity thereof necessary in order for Lessee to operate the Aircraft as permitted by the terms of the Lease.
 
122(138)

Dated on the date set forth above

Concesionaria Vuela Compañía de Aviación, S.A.
de C.V.	
		
By:	 	 	
Name:	 		
Title:	 		

ATTACHMENTS:	
		
1.	 	List of Aircraft Documentation	
		
2.	 	Inventory of Avionic Equipment	
		
3.	 	List of Loose Equipment	
		
4.	 	List of Free of Charge Kits	
		
5.	 	Engine Power Assurance Test Conditions and Results	
 
123(138)

EXHIBIT F
FORM OF POWER OF ATTORNEY
SEE FOLLOWING PAGES
 
124(138)

			
POWER OF ATTORNEY	  	PODER	
		
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“Volaris”) hereby irrevocably grants an irrevocable power of attorney in favor of ARRENDADORA FINANCIERA INBURSA S.A. DE C.V. SOFOM E.R., GRUPO FINANCIERO INBURSA, with domicile at Paseo de las Palmas No. 736, Col. Lomas de Chapultepec Mexico, D.F., C.P. 11000. (“Inbursa”) as Volaris’s true and lawful Attorney in fact so that Inbursa may take any of the following actions in the name of and for Volaris with respect to the Airbus A319-133 Aircraft bearing Manufacturer’s Serial Number 3077 (the “Aircraft”) leased by Inbursa to Volaris pursuant to an Aircraft Lease Agreement dated as of March 26 th , 2007 (the “Lease”) and to certain rights of Inbursa in respect thereto.	  	Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“Volaris”) par este acto otorga, poder irrevocable, a favor de of ARRENDADORA FINANCIERA INBURSA S.A. DE C.V. SOFOM ER., GRUPO FINANCIERO INBURSA, con domicilio en Paseo de las Palmas No. 736, Col. Lomas de Chapultepec Mexico, D.F., C.P. 11000., (“Inbursa”) como representante de Volaris, por lo que Inbursa puede llevar a cabo cualquiera de las siguientes acciones en nombre de Volaris en relacion con la Aeronave A319-133, Número de Serie del Fabricante 3077 (la “Aeronave”) arrendada por Inbursa a Volaris de conformidad con el Contrato de Arrendamiento de Aeronave celebrado el 26 de Marzo de 2007 (el “Arrendamiento”) y con relación a determinados derechos de Inbursa con relación al mismo.	
		
1. Pursuant to the Lease, Volaris has procured and is maintaining insurances for the Aircraft. Inbursa has been named sole loss payee on the Hull All Risks and Hull War and Allied Risks insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft, Inbursa is entitled to receive insurance proceeds according to Section 16 of the Lease. Inbursa may take all action and sign all documents otherwise required to be performed by Volaris, including execution on behalf of Volaris of an appropriate form of discharge/release document, in order for Inbursa to collect such insurance proceeds.	  	1. Volaris ha obtenido y mantiene coberturas de seguro respecto de la Aeronave, de conformidad con el Contrato. Inbursa ha sido nombrado coma único beneficiario en los seguros de Casco y Todo Riesgo y de Casco, Guerra y Riesgos Relacionadosde la Aeronave. En caso de pérdida total o que constituya perdida total de la Aeronave, Inbursa esta autorizado para recibir los beneficios del seguro de conformidad con la Seccion 16 del Contrato. Inbursa podrá llevar a cabo todas las acciones, suscribir todos los documentos; y realizar cualquier acción nombre de Volaris, incluyendo la ejecución del formato apropiado de descarga liberación para cobrar los beneficios del seguro.	
		
2. In the exercise of the rights of Inbursa to recover the Aircraft from Volaris and remove the same from the United Mexican States, Inbursa may take all action and steps otherwise required to be performed by Volans before any administrative or judicial authority of the United Mexican States in order to	  	2. En el ejercicio de sus derechos para recuperar la Aeronave de parte de Inbursa y remover la misma de los Estados Unidos Mexicanos, Inbursa podrá llevar a cabo todas las acciones y pasos que deban ser realizados por Volaris ante cualquier autoridad administrativa o judicial de los Estados Unidos Mexicanos, con el fin de que	

			
(i) cause the Aircraft and any Engines, Parts, Aircraft Documents or Aircraft Documentation to be repossessed by Inbursa, (ii) deregistered from the Mexican Aeronautic Registry of the Dirección General de Aeronautica Civil and (iii) exported from the United Mexican States.	  	(i) la posesion de la Aeronave y sus Motores, Partes, Documentacion de la Aeronave sea recuperada por Inbursa, (ii) sea dada la baja del Registro Aeronáutico Mexicano de la Dirección General de Aeronáutica Civil y (iii) sea exportada de los Estados Unidos Mexicanos.	
		
3. In the exercise of the rights mentioned in paragraphs 1 and 2, Inbursa may make any filings and declarations or statements and sign any public or private documents which may be considered necessary or appropriate.	  	3. En el ejercicio de los derechos consignados en los párrafos 1 y 2 anteriores, Inbursa podrá presentar documentos y declaraciones, así como suscribir documentos públicos o privados que se consideren apropiados necesarios.	
		
4. Inbursa may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but no limited to employees of Inbursa or legal counsel in the United Mexican States.	  	4. Inbursa podrán delegar las facultades conferidas en este documento, en todo o en parte, a cualquier individuo (s), incluyendo sin limitación, a sus empleados o abogados en los Estados Unidos Mexicanos.	
		
Inbursa is empowered to determine in its sole discretion when to exercise the powers conferred upon Inbursa pursuant to this Power of Attorney as contemplated in paragraphs 1 and 2, without requiring judicial resolution, in the understanding that Volaris shall not be entitled to exercise any action against (i) any person acting pursuant the present Power of Attorney and the acts that be resultant from such actions; and (ii) any person designated by Inbursa or by an officer of Inbursa to give instructions pursuant to this Power of Attorney so long as such person, abides by the terms of this Power of Attorney and the instructions of Inbursa.	  	Inbursa queda facultada para determiner, a su discreción, el ejercicio de as facultades que le han sido conferidas de acuerdo al presente Poder como se contempla en los párrafos 1 y 2, sin necesidad de resolución judicial o sentencia, en el entendido de que Volaris no tendrá derecho a ejercitar acción alguna en contra de (i) cualquier persona que actúe de acuerdo al presente Poder y de los actos que de dicha actuación se deriven; (ii) cualquier otra persona designada por Inbursa o por un funcionario de Inbursa para dar instrucciones de acuerdo con este Poder en tanto dicha persona se someta a los términos del presente Poder y a las instrucciones de Inbursa.	
		
Volaris also agrees to indemnify and hold harmless any person which may act pursuant to this Power of Attorney and pursuant to instructions given by Inbursa or its designee so long as such person abides by terms of this Power of Attorney and the instructions of Inbursa. This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of Inbursa, deregistered and exported from the United Mexican States in consideration of the fact that it derives from a contractual relationship between the parties to the Lease.	  	Volaris también acuerda en indemnizar y mantener en paz y a salvo a cualquier persona que pueda actuar en base a este Poder y de acuerdo a las instrucciones de Inbursa o su mandatario, en tanto dicha persona se someta a los términos del presente Poder y a las instrucciones de Inbursa. El presente Poder se otorga de forma irrevocable hasta que la Aeronave haya sido devuelta a la posesión de Inbursa, dada la baja y exportada de los Estados Unidos Mexicanos en consideración a que el mismo se deriva de la relación contractual entre las partes conforme al Arrendamiento.	
		
This power of attorney will be exercised before any kind of persons natural and legal, so as before civil, military, judicial and administrative authorities, whether federal of local and especially before the Boards of Conciliation and Arbitration.	  	El presente poder se ejercerá ante toda clase de personas fisicas y morales, así como ante autoridades civiles, militares, judiciales y administrativas, ya sean federates o locales y especialmente ante las Juntas de Conciliación y Arbitraje.	

			
		
This Power of Attorney is granted to be exercised in the United Mexican States, pursuant to the Interamerican Convention on the Legal Regime of Powers of Attorney to be used abroad and to the Washington Protocol for the Uniformity of the Legal Regime of Powers of Attorney.	  	Este Poder se otorga para ser ejercitado en los Estados Unidos Mexicanos, conforme a la Convención Interamericana sobre el Régimen Legal de los Poderes para ser Utilizados en el Extranjero y al Protocolo Sobre Uniformidad del Régimen Legal de Poderes de Washington.	
		
Concesionaria Vuela Compete de Aviación, S.A. de C.V. has made and delivered this Power of Attorney on March 28, 2007 in Mexico City.	  	Concesionaria Vuela Campañía de Aviacion, S.A. de C.V. ha otorgado y entregado este Poder, en la Ciudad de México el dia 28 de Marzo de 2007.	
		
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	  	Concesionaria Vuela Compañía de Aviación S.A. de C.V.	

By: Fernando Suárez Gerard	  	Por. Fernando Suárez Gerard	
Title: Chief Financial Officer and Attorney in fact	  	Cargo: Director de Finanzas y Representante Legal	
	
Witness/Testigos	

Verónica Gutiérrez Mena	  	Sergio Rábago Moreno	

EXHIBIT G
RETURN ACCEPTANCE RECEIPT
Date:                     ,                     
1. Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“ Lessee ”) and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa (“ Lessor ”) have entered into an Aircraft Lease Agreement dated as of March 26, 2007 (the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. Lessor has this     day of                     ,             (Time:             ) at             received from Lessee possession of:
(a) One (1) Airbus A319-133 Aircraft bearing Manufacturer’s serial number 3077, together with two (2) IAE V2527M-A5 Engines bearing manufacturer’s serial numbers ) V12561 and V12563, one (1) Honeywell 131-9A APU bearing manufacturer’s serial number P-3500, and all Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts, as listed in the Document Receipt attached hereto.
3. The Aircraft had the following seating configuration at return:
                     business class seats
                     economy class seats
4. The Airframe, Engines, APU and Parts had the following hours/cycles at return:
 
 	(a)	Airframe :	
Maximum gross takeoff weight:                  pounds
Total hours:                     Total Landings:             
Date last “C” check performed:             
            hours/     cycles since last “C” check
Date last 6Y/12Y structural check performed:             
            hours/     cycles since last 6Y/12Y structural check
 
125(138)

 	(b)	Engines :	
Certified thrust rating:                      pounds (from data plate)

Position	  	Serial No.	 	  	Total Hours	  	Total Cycles	  	Hrs/Cycles
since last
Performance
Restoration
Shop Visit	
					
1	  	 	V12561	  	  		  		  		
					
2	  	 	V12563	  	  		  		  		
 
 	(c)	APU : MSN             	
Total hours:             
         hours/     cycles since last hot section refurbishment
         hours/     remaining on APU life-limited Parts
 
 	(d)	Landing Gear :	

Position	  	Serial No.	  	Total
Hrs/Cycles	  	Hrs/Cycles/Days
remaining to
next Overhaul	  	Date of last
Overhaul	
					
Nose	  		  		  		  		
					
Left Main	  		  		  		  		
					
Right Main	  		  		  		  		
 
 	(e)	Fuel on board at return :                      (circle one) pounds/kilos (             gallons)	
5. Other technical information regarding the Aircraft and its components are correctly set forth on the Technical Evaluation Report (in the form of Exhibit I ) attached hereto.
 
126(138)

6. With reference to Article 12.9 of the Lease regarding reimbursement from the Maintenance Funds after return of the Aircraft:
 
        	There are no claims for reimbursement from the Maintenance Funds which will be submitted after the date hereof.	
Or
 
        	Claims for reimbursement from the Maintenance Funds will be submitted after the date hereof for the following:	

Type of Work	  	Estimated Invoice Amount	
7. The above specified aircraft, engines and documentation are hereby accepted by Lessor subject to (a) the provisions of the Lease and (b) correction by Lessee (or procurement by Lessee at Lessee’s cost) as soon as reasonably possible of the discrepancies specified in Attachment 2 hereto.
8. Subject to the following paragraph, the leasing of the Aircraft by Lessor to Lessee pursuant to the Lease is hereby terminated without prejudice to Lessee’s continuing obligations under the Lease including, without limitation, paragraph 7(b) above and Articles 9.5, 14, 15 and 16.
9. This Return Acceptance Receipt is executed and delivered by the parties in                     .
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in their respective corporate names by their duly authorized representatives as of the day and year first above written.

Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	 		 	Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa	
					
By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
Title:	 		 		 	Title:	 		
 
127(138)

ATTACHMENTS:
 
1.	List of Aircraft Documentation	
 
2.	Inventory of Avionic Equipment	
 
3.	List of Loose Equipment	
 
4.	Free of Charge Kits	
 
5.	List of Discrepancies	
 
6.	Engine Power Assurance Test Conditions and Results	
 
7.	Dent and Damage Chart	
 
8.	Incident/Accident Letter	
 
9.	Technical Evaluation Report (in the form of Exhibit I)	
 
128(138)

EXHIBIT H
FORM OF MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Report Due Date:                     

To:	  	Arrendadora Financiera Inbursa, S.A. de	  	Jetscape, Inc.	
	  	C.V. Sociedad Financiera de Objeto	  	10 S. New River Drive East, Suite 200	
	  	Multiple, Entidad Regulada, Grupo	  	Fort Lauderdale, FL 33301	
	  	Financiero Inbursa	  	United States of America	
	  	Paseo de las Palmas 736	  		 		
	  	Col. Lomas de Chapultepec	  	Attn:	 	Technical Department	
	  	Mexico, 11000, D.F.	  	Fax:	 	+1 954 763 4757	
	  	Mexico	  	Email:	 	[…]	
					
	  	Attn:	 	Director Juridico	  		 		
	  	Fax:	 	+55 52 02 52 00	  		 		
	  	Email:	 	[…]	  		 		
		
From:	  	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	

Contact:             	  	Fax:             	
		
AIRCRAFT TYPE: AIRBUS A319-133	  		
		
SERIAL NUMBER: 3077	  	REGISTRATION:             	
		
ENGINE TYPE: IAE V2527M-A5	  	MONTH OF:             	
NOTE : PLEASE RECORD TIME IN HOURS AND MINUTES OR IN DECIMALS

Aircraft Total Time Since New As Of Last Month:	  	Hours:            	  	Min:        	
Aircraft Total Time Since New:	  	Hours:	  	Min:	
Aircraft Total Cycles Since New:	  	Cycles:	  		
Airframe Hours Flown During Month:	  	Hours:	  	Min:	
Airframe Cycles/Landings During Month:	  	Cycles:	  		
Time Remaining to 6Y/12Y structural or Heavy Maintenance Check:	  		  		
 
129(138)

											
 	  	HOURS OR CYCLES
DURING FLOWN
DURING MONTH
(as applicable)	  	x	  	US$ PER HOUR,
CYCLE OR MONTH
(as applicable)	  	=	  	MAINTENANCE
FUNDS	
TOTAL AIRFRAME:	  	One (1) Month	  	x	  		  	=	  		
						
TOTAL LANDING GEAR:	  	One (1) Month	  	x	  		  	=	  		
						
TOTAL APU:	  	Hrs:	  	x	  		  	=	  		
						
Original Engine Serial Number:	  	Hrs.	  	x	  		  	=	  		
						
	  	Cycle (for Engine LLP Maintenance Fund):	  	x	  		  	=	  		
						
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
						
	  	Cycles (for Engine LLP Maintenance Fund):	  	x	  		  	=	  		
			
TOTAL AMOUNT OF MAINTENANCE FUNDS (US$) PAID THIS MONTH:	  	US$	  		

ENGINE SERIAL NUMBER:	 	ENGINE SERIAL NUMBER:	
		
ORIGINAL POSITION:	 	ORIGINAL POSITION:	
		
ACTUAL LOCATION:	 	ACTUAL LOCATION:	
		
CURRENT THRUST RATING:	 	CURRENT THRUST RATING:	
		
HOURS:	 	HOURS:	
		
Total Time Since New As Of Last Month:	 	Total Time Since New As Of Last Month:	
		
Total Time Since New:	 	Total Time Since New:	
		
Total Cycles Since New:	 	Total Cycles Since New:	
		
Hours Flown During Month:	 	Hours Flown During Month:	
		
Cycles During Month:	 	Cycles During Month:	

IMPORTANT:	  	IF ENGINE OWNED BY ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA IS REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY ON THIS FORM.	
 
130(138)

EXHIBIT I
FORM OF TECHNICAL EVALUATION REPORT

Date of Report:	  		
Delivery Date:	  		
		
General Aircraft Description	  		
		
Description	  	Details	
Manufacturer / Model:	  		
Manufacturer Serial Number	  		
Type Certificate Number:	  		
Date of Manufacture:	  		
Design Specification:	  		
Registration / Country of Registration	  		
Registered Owner:	  		
Prior Reg./Country /Authority:	  		
Engine Type	  		
Engine Serial Numbers	  		
Noise Compliance:	  		
Flight Crew Accommodation:	  		
Cabin Crew Accommodation:	  		
Passenger Accommodation:	  		
SELCAL Code:	  		
Aircraft Hours and Cycles (As of     -    -    )

Description	  	Hours	  	Cycles	
Airframe	  		  		
No. 1 Engine SN             	  		  		
No. 2 Engine SN             	  		  		
Aircraft History

Dates	  	Operator	  	Country	  	Registration	

 
					
Weights	  	Pounds	  	Kilograms	
Maximum Certified Taxi Gross Weight:	  		  		
Maximum Certified Take-Off Weight:	  		  		
Maximum Certified Landing Weight:	  		  		
Maximum Certified Zero Fuel Weight:	  		  		
 
131(138)

					
Manufacture’s Original Basic Empty Weight:	  		  		
Operational Empty Weight	  		  		
Last Aircraft Weighing:	  		  		

Additional Information	
Description of Additional Information	
Current Transponder Code -	
Last Transponder Check:	
Last Altimeter Check:	
Last Compass Swing:	
Flight Data Recorder data dump analysis complied with on:	
Maintenance Check Status
Aircraft Maintenance and Inspections are carried out in accordance with Operators Approved Program

Check	  	Interval	  	Number	  	Description of Check	
A	  	     Days	  		  	Last A checks: Per Program	
C	  	     Months	  		  	See below	
					
Check Status	  	1C	  	2C	  	4C/ 6Y	  	8C / 12Y	
Interval Months	  		  		  		  		
Last Accomplished (Date)	  		  		  		  		
Last Accomplished: AF (Hours)	  		  		  		  		
Next Due: Date	  		  		  		  		
Hours Remaining	  		  		  		  		
Months Remaining	  		  		  		  		

ATA Chapter 22                    Automatic Flight Control	
Description	  	QTY	  	Manufacture / Model	  	Mfg. Part No.	
Flight Management Guidance Computer	  		  		  		
Flight Augmentation Computer	  		  		  		
Flight Control Unit	  		  		  		
Multipurpose Control Display Unit	  		  		  		
	
ATA Chapter 23                    Communications	
Description	  	QTY	  	Manufacture / Model	  	Mfg. Part No.	
Audio Management Unit	  		  		  		
ACARS	  		  		  		
Cabin Intercomm Data System	  		  		  		
Cockpit Voice Recorder	  		  		  		
 
132(138)

							
HF Transceiver	  		  		  		
VHF Transceiver	  		  		  		
PRAM Tape Reproducer (Pre Recorded PAX Address)	  		  		  		
MPES Tape Reproducer (Audio Entertainment)	  		  		  		
Tape Reproducer (Video Entertainment)	  		  		  		
Audio Management Unit / SELCAL Decoder	  		  		  		
Radio Management Panel	  		  		  		
	
ATA Chapter 25                    Equipment and Furnishings	
Description	  	QTY	  	Manufacture / Model	  	Mfg. Part No.	
Flight Crew Seat – Captain	  		  		  		
Flight Crew Seat – First officer	  		  		  		
Flight Crew Seat – 1 st Observer	  		  		  		
Flight Attendant Seat – FWD (L-1) Dbl	  		  		  		
Flight Attendant Seat – AFT (L-2) Dbl	  		  		  		
Flight Attendant Seat – AFT (L2/R2) Single	  		  		  		
G-1 FWD Galley w/2 ovens, 2 coffee makers and 3 ATLAS Full carts	  		  		  		
G-5 AFT Bulkhead Galley w/3 ovens, 2 coffee makers and 6 ATLAS Full carts	  		  		  		
Business Class Seats – Cabin	  		  		  		
Economy Class Seats – Cabin	  		  		  		
	
ATA Chapter 27                    Flight Controls	
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No.	
ELAC – Elevator/Aileron Computer	  		  		  		
FCDC – Flight Control Data Concentrator	  		  		  		
FAC – Flight Augmentation Computer	  		  		  		
SFCC – Slat/Flap Control Computer	  		  		  		
SEC – Spoiler/Elevator Computer	  		  		  		
 
133(138)

							
ATA Chapter 28                    Fuel	
Fuel Tanks	  	Fuel Capacity
Pounds	  	Fuel Capacity
Kilograms	  	Max Usable Fuel
US Gallons	
Left Wing Main, Maximum Allowable: *	  		  		  		
Right Wing Main, Maximum Allowable: *	  		  		  		
Center Win Maximum Allowable:	  		  		  		
Maximum Allowable Total Fuel	  		  		  		
* Source — Weights Approved Aircraft Flight Manual and TCDS A28NM Rev 8	  		  		  		
Note: Based on a fuel density of 7.1 pounds per U.S. gallon.	  		  		  		
Fuel Quantity Indication (Unit of Measure):	  		  		  		

							
ATA Chapter 31                    Independent Instruments	
Description	  	QTY	  	Manufacture/Model	  	Mfg. Part No.	
CFDIU – Central Fault Display Interface	  		  		  		
DFDR – Digital Flight Data Recorder	  		  		  		
DFDIU – Digital Flight Data Interface Unit	  		  		  		
DMU – Data Management Unit	  		  		  		
DMC – Display Management Computer	  		  		  		
Multifunction Printer	  		  		  		
SDAC – Systems Data Acquisition Concentrator	  		  		  		
Primacy Flt Display / Navigation Display	  		  		  		
FWC – Flight Warning Computer	  		  		  		
QAR – Quick Access Recorder	  		  		  		

ATA Chapter 32                    Landing Gear:	
Description Position	  	Date	  	Hours	  	Cycles	
Left Main Landing Gear : Messier Dowty	  	P/N :                     S/N :                    	
Landing Gear Totals:	  		  		  		
Last OH – Performed by:             	  		  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		  		
Time Since Overhaul (TSO)	  		  		  		
Remaining Time to Overhaul (MPD)	  		  		  		
Remaining Time to First Life Limit	  		  		  		
				
Description Position	  	Date	  	Hours	  	Cycles	
Right Main Landing Gear : Messier Dowty	  	P/N :                     S/N :                    	
Landing Gear Totals:	  		  		  		
Last OH Performed by:                     	  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		
 
134(138)

							
Time Since Overhaul (TSO)	  		  		
Remaining Time to Overhaul (MPD)	  		  		
Remaining Time to First Life Limit	  		  		
				
Description Position	  	Date	  	Hours	  	Cycles	
Nose Landing Gear : Messier Dowty:	  	P/N:                      S/N :                    	
Landing Gear Totals:	  		  		  		
Last OH – Performed by:             	  		  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		  		
Time Since Overhaul (TSO)	  		  		  		
Remaining Time to Overhaul (MPD)	  		  		  		
Remaining Time to First Life Limit	  		  		  		

Description	  	Qty	  	Manufacture /Model	  	Details	
NLG Tires	  	2	  		  		
MLG Tire	  	4	  		  		
Brake Assembly	  	4	  		  		
	
ATA Chapter 34                    Navigation	
Description	  	QTY	  	Manufacture/Model	  	Mfg. Part No.	
ADIRU – Air Data Inertial Reference Unit	  		  		  		
ADF – Automatic Direction Finder	  		  		  		
ATC – Air Traffic Control Modes:	  		  		  		
DME – Distance Measuring Equipment Interrogators	  		  		  		
EGPWS – Enhanced Ground Proximity Warning System	  		  		  		
Radio Altimeter	  		  		  		
VHF – VOR Receiver	  		  		  		
VHF – ILS Receiver	  		  		  		
TCAS – Traffic Collision Avoidance System	  		  		  		
Weather Radar Transceiver	  		  		  		

ATA Chapter 49                     Auxiliary Power – APU	
Description Position	  	Pos	  	Manufacture / Model	  	Mfg. Part No.	  	Mfg. S/N	
Auxiliary Power Unit (APU)	  	1	  		  		

APU Status Description	  	Date	  	Hours	  	Cycles	
Total Time and Cycles Since New	  		  		  		
APU Last Hot Section Insp.(HSI) – By:             	  		  		  		
APU Time Since Overhaul (TSO)	  		  		  		
APU Time Since Hot Section Inspection	  		  		  		
 
135(138)

									
ATA Chapter 71                      Power Plant	
Description Position	  	Pos	  	Manufacture / Model	  	Mfg. Part No.	  	Mfg. S/N	
Engine	  	1	  	International Aero Engines	  		  		
Engine	  	2	  	International Aero Engines	  		  		
Thrust Rating - Maximum Continuous Static Sea Level	  		  		  		  		
Thrust Rating - min Take-Off Static Sea Level	  		  		  		  		

Engine #1                                                             IAE	  	S/N:	
Description Position	  	Date	  	Hours	  	Cycles	
Engine Total Time (TSN)	  		  		  		
Last Major Shop Visit Restoration	  		  		  		
Time Since Last Shop Visit	  		  		  		
Remaining Time to First Life Limit	  		  		  		
		
Engine #2                                                             IAE	  	S/N:	
Description Position	  	Date	  	Hours	  	Cycles	
Engine Total Time (TSN)	  		  		  		
Last Major Shop Visit Restoration	  		  		  		
Time Since Last Shop Visit	  		  		  		
Remaining Time to First Life Limit	  		  		  		
 
136(138)

EXHIBIT J
FORM OF DEPOSIT AGREEMENT
SEE FOLLOWING PAGES
 
137(138)

SECURITY DEPOSIT AGREEMENT
THIS SECURITY DEPOSIT AGREEMENT (HEREINAFTER THE “ AGREEMENT ”), IS ENTERED INTO ON THE             DAY OF MARCH, 2007, BY AND BETWEEN ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA , AS DEPOSITORY (HEREINAFTER THE “ DEPOSITORY ” AND/OR “ LESSOR ”), AND ON THE OTHER BY CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , AS DEPOSITOR (HEREINAFTER THE “ DEPOSITOR ” AND/OR “ LESSEE ”), IN ACCORDANCE WITH THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
 
I.	The Depository, by means of its legal representatives, states:	
 
 	(a)	That it is a variable capital limited liability stock corporation, duly incorporated and validly existing in accordance with the Mexican laws.	
 
 	(b)	That its representatives have all powers and faculties necessary to contract and be bound on behalf of the Depository, powers which have been revoked, modified or limited in any form whatsoever as of the date of this Agreement.	
 
 	(c)	That it wishes to execute this Agreement in accordance with the terms and conditions stated below.	
 
II.	The Depositor, by means of its legal representative, states:	
 
 	(a)	That it is a variable capital limited liability stock corporation, duly incorporated and validly existing in accordance with the Mexican laws.	
 
 	(b)	That its representative has all powers and faculties necessary to contract and be bound on behalf of the Depository, powers which have been revoked, modified or limited in any form whatsoever as of the date of this Agreement.	
 
 	(c)	That it wishes to execute this Agreement in accordance with the terms and conditions stated below.	
 
III.	Both parties, by means of their corresponding representatives, state:	
 
 	(a)	That on March 26, 2007, the Depositor, as lessee, and the Depository, as lessor, executed an aircraft lease agreement (hereinafter the “ Lease Agreement ”), in order to lease the Lessee an Airbus aircraft model A319-133, with manufacturer series number 3077 equipped with two engines model V2527-MA5 of IAE with manufacturer’s series number V12561 and V12563 (hereinafter the “ Aircraft ”).	

 	Execution of this Agreement constitutes a condition to execute the Lease Agreement under the terms and conditions agreed upon between the parties, in order to establish a security in favor of the Depository regarding the compliance with all and any of the obligations entrusted to the Depositor in accordance with the Lease Agreement.	
The terms in capital letters used in this Agreement shall have the same meanings ascribed to such terms in the Lease Agreement unless otherwise defined in this Agreement.
By virtue of the foregoing, based on the recitals included in this Agreement, the parties agree to comply with the following:
CLAUSES
ONE. - According to the terms and conditions stated in the Lease Agreement, as a security (i) for the payment of all the amounts payable or to be payable by Depositor; and (ii) for compliance with all obligations entrusted to the Depositor in accordance with the Lease Agreement and any renewals, extensions and amendments thereto, Depositor shall have delivered or is to deliver in favor of the Depository, the total amount of *****, lawful currency of the United States of America), as security deposit (the “ Security Deposit ”) as follows:
 
 	1.	The amount of ***** lawful currency of the United States of America), which has been delivered by the Depositor and that Depository states having received on December 7, 2006.	
 
 	2.	The amount of ***** lawful currency of the United States of America) that Depositor shall deliver the Depository upon delivery of the Aircraft in accordance with the Lease Agreement.	
The foregoing amounts have been or should be deposited through wire transfers of funds immediately available to the following account:

BANK:	  	JP MORGAN CHASE N.Y.	
BENEFICIARY:	  	BANCO INBURSA	
ACCOUNT:	  	*****	
SWIFT:	  	*****	
ABA:	  	*****	
FINAL BENEFICIARY:	  	ARRENDADORA FINANCIERA INBURSA	
	  	S.A. DE C.V.	
ACCOUNT OF FINAL BENEFICIARY:	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
2

TWO. - Security Deposit shall not accrue interests and may not be combined with the general funds of the Depository in the manner that Depository deems reasonable. Notwithstanding the foregoing, once all the Lease Agreement amounts owed are fully paid and provided there is no failure to comply with payment by the Depositor according to the Lease Agreement, and any of the conditions stated in Clause Six hereof have been complied with, Depository shall repay the amount of the Security Deposit originally delivered in accordance with the provisions stated in Clause Six.
THREE. - The Security Deposit shall not release, excuse, reduce or in any form whatsoever modify compliance with the all and any of the obligations of Depositor before the Depository at the time and in the manner set forth in the Lease Agreement, its exhibits or any document related thereto, nor shall correct any noncompliance by Depositor in accordance with the Lease Agreement.
FOUR. - In the event there is any noncompliance by Depositor regarding its obligations stated in the Lease Agreement, and once the applicable grace period has elapsed, in accordance with the Lease Agreement, if Depositor has not corrected the corresponding noncompliance, Depository may, but shall not be bound to, apply the Security Deposit to pay the compensation of any pending obligation of Depositor in accordance with the Lease Agreement in the manner the Depository deems pertinent.
FIVE. - If Depository applies the Security Deposit as indicated in Clause Four above, the Depository shall be bound, within the five (5) business days after the date when receiving notification in writing for such purpose by Depository, to deliver the Depository the amount necessary in order to repay the amount of the Security Deposit to that originally delivered in accordance with the provisions set forth in Clause One above, and such amount should be repaid to the Depository with the corresponding Value Added Tax which has been accrued due to the amount applied by the Depository of the Security Deposit.
Noncompliance by Depository to deliver the additional amount referred to in the foregoing paragraph plus the corresponding Value Added Tax within the term indicated therein, shall be deemed as an event of default in accordance with the Lease Agreement in which event the Depository may exercise all and any of the actions and rights available in accordance with such instrument.
SIX. - As long as (a) the Lease Agreement has not expired and possession of the Aircraft has been returned to Depository as lessor in accordance with the provisions set forth in the Lease Agreement for such purpose, (b) the Lease Agreement has been early terminated as a result of a Total Loss occurred before the Aircraft is delivered to Depositor as lessee, or else, as a result of a Total Loss of the Aircraft after Delivery thereof, subject to the fact that Depository as lessee has received the Value Agreed and that any Event of Default that may exist at that time has been corrected to the extent allowed by the circumstances by reason of the Total Loss, (c) closure of the Purchase and Sale transaction of the Aircraft in favor of the Depository as purchaser, as a result of the Assignment of Rights for Purchasing the
 
3

Aircraft in favor of the Depository as assignee, is not completed due to causes not attributable to Depositor as assignor, (d) execution of the Lease Agreement is not performed due to causes not attributable to Depositor, or (f) all and any of the obligations of Depositor, in accordance with the Lease Agreement and all other documents related thereto, including, without limitation, expenses, fees, taxes or dues, have been fully complied, and subject to the fact that there is no event of default in accordance with the Lease Agreement itself and once the possession of the Aircraft has been returned to Depository as lessor in accordance with the Lease Agreement, the Depository shall reimburse the Depositor any remaining balance of the Security Deposit within the five (5) days after the date when the assumption referred to above occurs.
SEVEN. - This Agreement shall become an integral part of the Lease Agreement, therefore, it shall prevail for all the time when any obligation by Depositor under the Lease Agreement is not complied.
EIGHT. - All notices and notifications between the parties shall be in writing, in Spanish and should be delivered (i) personally, with acknowledgement of receipt; (ii) by specialized courier service, with the acknowledgment of receipt; or (iii) via facsimile, followed by specialized courier service or personally delivered, with acknowledgement of receipt. All notices and notifications shall be delivered to the following domiciles and facsimile numbers and shall become effective when personally delivered.
The Depository
Paseo de las Palmas 736
Col. Lomas de Chapultepec
México, 11000, D.F.
Mexico C/O: Legal Director
Tel. + 52 55 56 25 49 00
Fax + 52 55 52 02 52 00
The Depositor
Prolongación Paseo de la Reforma 490, Piso 1
Colonia Santa Fe
Mexico 01210, D.F.
México, C/O:
Tel: +52 55 52 61 64 00
Fax: +52 55 52 61 64 60
NINE. - This Agreement shall be governed by, and construed in accordance with the Mexican laws. For anything related to the construction, compliance and execution hereof, the parties shall expressly submit themselves to the jurisdiction of the competent courts for the Federal District, expressly waiving to any other jurisdiction that may correspond thereto by virtue of their present or future domiciles or due to any other reason whatsoever.
 
4

By virtue of the foregoing, the parties execute this Agreement, by means of their legal representatives, in three (3) counterparts, each of which shall be deemed an original and together the same instrument, on the date stated above.
[Next page is of signatures]
 
5

The Depositor
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

By:	 	 	
Name:	 		
Position:	 	Attorney-in-fact	
The Depository
ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA
DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA

By:	 	 	
Name:	 		
Position:	 	Attorney-in-fact	

6

EXHIBIT K
FORM OF LEGAL OPINION
SEE FOLLOWING PAGES
 
138(138)

Exh K Legal Opinion Eng
[    ] March 2007
[INBURSA]
Dear Sirs,
This opinion is furnished to you pursuant to Section [ ] of the Aircraft Lease Agreement dated as of 26 March 2007 (the “Lease”) between Concesionaria Vuela, Compañia de Aviacion, S.A. de C.V. (the “Lessee”) and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa, (the “Lessor”). Defined terms in this opinion are used herein as defined in the Lease.
We have acted as counsel to Lessee, and have acted in such capacity in connection with the negotiation, preparation, authorization, execution and delivery of, and the consummation of the transactions contemplated by the Lease. Unless otherwise specified, all capitalized terms used herein without definition shall have the meanings assigned to them in the Lease.
Based upon the foregoing, we are of the following opinion :
 
 	1.	Lessee is a stock corporation of variable capital ( sociedad anónima de capital variable ) duly formed and validly existing under the General Law of Commercial Partnerships ( Ley General de Sociedades Mercantiles ) of Mexico for an indefinite period, subject to suit in its own name, and is an air carrier of persons in scheduled air transportation and is registered, licensed or otherwise authorized by the government of Mexico to engage in such activities.	
 
 	2.	Lessee is validity existing as a corporation under the laws of the United Mexican States and has full corporate power and authority to enter into and perform its obligations under the Lease.	
 
 	3.	None of the execution and delivery of the Lease, the performance by Lessee of its obligations thereunder and the consummation of the transactions contemplated thereby will conflict or result in any breach of, or constitute a default under, any applicable law, rule or regulation of the United Mexican States or any judgment or order applicable to Lessee, Lessee’s Charter documents (Escritura Constitutiva) or any agreement, mortgage, or other instrument to which Lessee is party or by which it or its assets may be bound.	
 
 	4.	The execution, delivery and performance by Lessee of the Lease have been approved by Lessee’s Board of Directors on [            ].	
 
 	5.	Ownership of the Aircraft by Owner as Lessor, as defined in the Lease, cannot be charged, set aside, avoided or otherwise challenged by any person claiming interest (whether proprietary, possessory or by way of security) in the Aircraft on the grounds of or in connection any labor process or in connection with the insolvency, concurso mercantil, bankruptcy or liquidation of Lessee.	
 
1

Exh K Legal Opinion Eng
 
 	6.	The constitution of Mexico guarantees the protection of property from expropriation or requisition without fair compensation. The Aircraft may, however, be detained pursuant to court proceedings, which could be dismissed through the demonstration of title in accordance with the appropriate proceedings in each case.	
 
 	7.	The Lease and the other Operative Documents have been duly executed and delivered by Lessee and constitute the legal, valid and binding obligations of Lessee enforceable in accordance with their terms, subject to applicable concurso mercantil, bankruptcy, insolvency and similar laws affecting creditors’ rights generally. In addition, the validity or enforceability of certain of the remedies provided for in the Lease may be limited by applicable law or judicially adopted principles which, in our judgment, do not make such remedies (taken as a whole) inadequate for the practical realization of the benefits afforded thereby.	
 
 	8.	All authorizations and approvals of any Mexican federal, state or municipal governmental department or agency required or necessary to authorize the execution, delivery and performance by Lessee of the Lease or other Operative Documents, with respect to Lessee, for the legality, validity, binding effect or enforceability thereof have been obtained and are in full force and effect.	
 
 	9.	Except for the registration of the Lease in the Registro Aeronáutico Mexicano (the “Registry”) and for the payment of registration duties described below, no filing or recording of any instrument or document (including the filing or any financial statement) is necessary of the United Mexican States in order for the Lease to constitute a valid and perfected lease of record relating to the Aircraft.	
 
 	10.	The payment obligations of Lessee under the Lease rank at least equally and ratably (pari passu) in point of priority and security with all other unsecured and unsubordinated obligations of Lessee.	
 
 	11.	Application has been made with the Dirección General de Aeronáutica Civil, Secretaría de Comunicaciones y Transportes of the United Mexican States (the “DGAC”) for registration in the Registry of the interest of Lessor as “Owner” and Lessor in the Aircraft and no other steps are necessary to (i) record or perfect Lessor’s interest in the Aircraft in the United Mexican States or (ii) to fully establish and protect Lessor’s title to, in and property rights with respect to the Aircraft, as against Lessee or any third party claiming through Lessee or otherwise and to ensure that the rights of Lessor therein will have priority in all respects over the claims of Lessee’s creditors.	
 
 	12.	Upon termination of the Aircraft Lease (whether on expiry or otherwise), as contemplated in the Lease, the applicable Lessor shall be entitled:	
 
 	(1)	to repossess the Aircraft, subject to applicable law;	
 
2

Exh K Legal Opinion Eng
 
 	(2)	to deregister the Aircraft; from the Registry of the DGAC after termination of the Lease, as provided by applicable law; and	
 
 	(3)	to remove the Aircraft from the operating certificate of Lessee and export the Aircraft from the United Mexican States.	
After termination of the Lease due to the occurrence of an Event of Default or for any other reason as contemplated in the Lease, no consents, approvals or licenses are required to Lessor repossess the Aircraft from Lessee.
 
 	13.	Except for the duties paid to the Registry for the registration of the Lease and as set forth in paragraph 19 below, there are no registration, stamps or other taxes or duties of any kind payable in the United Mexican States in connection with the signature, performance or enforcement by legal proceedings of the Lease.	
 
 	14.	Lessor will not become liable for any Tax in the United Mexican States other than tax on its income solely by reason of entering into the Lease with Lessee, or performing its obligations thereunder, provided that rental payments shall be subject to 15% Value Added Tax payable by Lessee, no withholding tax is applicable pursuant to rental payments. With respect to any withholdings, the indemnification and taxation provisions of the Lease are fully effective and enforceable in accordance with their terms.	
 
 	15.	There is no litigation, proceeding or government investigation pending or overtly threatened against the Lessee which, if adversely determined, would have a material adverse effect on the business, assets or financial condition of the Lessee.	
 
 	16.	The choice of the laws of the United Mexican States to govern the Lease is valid under the laws of Mexico, and a Mexican court would uphold such choice of law.	
 
 	17.	Lessee is subject to private commercial law and suit.	
I express no opinion as to any laws other than the laws of the United Mexican States.
Very Truly yours,
[VOLARIS]
 
3

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.18

AIRCRAFT LEASE AGREEMENT
Dated as of April 20, 2007
BETWEEN
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
as LESSEE
and
INTERNATIONAL LEASE FINANCE CORPORATION
as LESSOR

 
			
Aircraft Make and Model:	  	New Airbus A319-100	
Aircraft Manufacturer’s Serial Number:	  	Per Estoppel and Acceptance Certificate	
Make and Model of Engines:	  	IAE V2524-A5	
Serial Numbers of Engines:	  	Per Estoppel and Acceptance Certificate	

TABLE OF CONTENTS

ARTICLE 1	 	SUMMARY OF TRANSACTION	  	 	2	  	
1.1	 	Description of Aircraft	  	 	2	  	
1.2	 	Scheduled Delivery Date and Location	  	 	2	  	
1.3	 	Initial Lease Term	  	 	2	  	
1.4	 	Extension Lease Option	  	 	2	  	
1.5	 	Security Deposit	  	 	2	  	
1.6	 	Transaction Fee	  	 	3	  	
1.7	 	Rent During Lease Term	  	 	3	  	
1.8	 	Reserves	  	 	3	  	
1.9	 	Additional Rent for Excess Airframe and Engine Cycles	  	 	4	  	
1.10	 	Country of Aircraft Registration	  	 	4	  	
1.11	 	Agreed Value of Aircraft	  	 	4	  	
1.12	 	LESSOR’s Bank Account	  	 	5	  	
			
ARTICLE 2	 	DEFINITIONS	  	 	6	  	
2.1	 	General Definitions	  	 	6	  	
2.2	 	Specific Definitions	  	 	12	  	
			
ARTICLE 3	 	PLACE AND DATE OF DELIVERY	  	 	13	  	
3.1	 	Place of Delivery	  	 	13	  	
3.2	 	Scheduled Delivery Date	  	 	13	  	
3.3	 	Delivery subject to Manufacturer Delivery	  	 	13	  	
3.4	 	No LESSOR Liability	  	 	13	  	
3.5	 	Total Loss of Aircraft prior to Delivery	  	 	13	  	
3.6	 	Cancellation for Delay	  	 	13	  	
			
ARTICLE 4	 	LEASE TERM AND EXTENSION OPTION	  	 	14	  	
4.1	 	Initial Lease Term	  	 	14	  	
4.2	 	Lease Extension Option	  	 	14	  	
4.3	 	“Lease Term” and “Expiration Date”	  	 	14	  	
4.4	 	“Termination Date”	  	 	14	  	
			
ARTICLE 5	 	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	  	 	15	  	
5.1	 	Security Deposit	  	 	15	  	
5.2	 	Transaction Fee	  	 	16	  	
5.3	 	Rent	  	 	16	  	
5.4	 	Reserves	  	 	18	  	
5.5	 	Additional Rent for Excess Cycles	  	 	18	  	
5.6	 	LESSOR’s Bank Account	  	 	19	  	
5.7	 	Default Interest	  	 	19	  	
5.8	 	No Deductions or Withholdings	  	 	19	  	
5.9	 	Value Added Taxes	  	 	20	  	
5.10	 	Wire Transfer Disbursement Report	  	 	20	  	
5.11	 	Net Lease	  	 	20	  	
5.12	 	Currency Indemnity	  	 	21	  	
5.13	 	LESSOR Performance of LESSEE Obligation	  	 	21	  	
5.14	 	Consideration for Rent and other Amounts	  	 	22	  	

	  	i	  	TABLE OF CONTENTS	

							
ARTICLE 6	 	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	  	 	23	  	
6.1	 	LESSEE Selection of Aircraft	  	 	23	  	
6.2	 	Participation Agreement	  	 	23	  	
6.3	 	Procurement of BFE	  	 	23	  	
6.4	 	Assignment of Training	  	 	23	  	
6.5	 	LESSEE Inspection of Aircraft	  	 	23	  	
			
ARTICLE 7	 	PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	  	 	25	  	
7.1	 	Pre-Delivery Requirements	  	 	25	  	
7.2	 	Delivery Requirements	  	 	26	  	
7.3	 	Post-Delivery Requirements	  	 	27	  	
			
ARTICLE 8	 	DISCLAIMERS AND WAIVERS	  	 	29	  	
8.1	 	“As Is, Where Is”	  	 	29	  	
8.2	 	Waiver of Warranty of Description	  	 	29	  	
8.3	 	LESSEE Waiver	  	 	30	  	
8.4	 	Conclusive Proof	  	 	30	  	
8.5	 	No Liability to Repair or Replace	  	 	30	  	
8.6	 	No Waiver	  	 	30	  	
8.7	 	Consideration for Waivers	  	 	30	  	
			
ARTICLE 9	 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	  	 	32	  	
9.1	 	Warranties	  	 	32	  	
9.2	 	Reassignment	  	 	32	  	
9.3	 	Warranty Claims	  	 	32	  	
			
ARTICLE 10	 	OPERATION OF AIRCRAFT	  	 	33	  	
10.1	 	Costs of Operation	  	 	33	  	
10.2	 	Compliance with Laws	  	 	33	  	
10.3	 	Training	  	 	33	  	
10.4	 	No Violation of Insurance Policies	  	 	33	  	
10.5	 	Flight and Airport Charges	  	 	33	  	
			
ARTICLE 11	 	SUBLEASES	  	 	35	  	
11.1	 	No Sublease without LESSOR Consent	  	 	35	  	
11.2	 	LESSOR Costs	  	 	35	  	
11.3	 	Permitted Sublessees	  	 	35	  	
11.4	 	Any Approved Sublease	  	 	35	  	
11.5	 	Assignment of Sublease	  	 	35	  	
11.6	 	Application of Cape Town Convention	  	 	36	  	
11.7	 	Wet Leases	  	 	36	  	
11.8	 	Continued Responsibility of LESSEE	  	 	36	  	
			
ARTICLE 12	 	MAINTENANCE OF AIRCRAFT	  	 	37	  	
12.1	 	General Obligation	  	 	37	  	
12.2	 	Specific Engine Requirements	  	 	37	  	
12.3	 	Specific Obligations	  	 	38	  	
12.4	 	Replacement of Parts	  	 	40	  	
12.5	 	Removal of Engines	  	 	41	  	
12.6	 	Removal of APU	  	 	41	  	

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12.7	 	Pooling of Engines, APU and Parts	  	 	42	  	
12.8	 	Installation of Engines on other aircraft	  	 	42	  	
12.9	 	Modifications	  	 	43	  	
12.10	 	Performance of Work by Third Parties	  	 	44	  	
12.11	 	Reporting Requirements	  	 	44	  	
12.12	 	Maintenance Policies and Procedures Manuals	  	 	44	  	
12.13	 	LESSOR Inspection Rights	  	 	44	  	
			
ARTICLE 13	 	USE OF RESERVES	  	 	46	  	
13.1	 	Airframe Reserves (6 Year Check)	  	 	46	  	
13.2	 	Airframe Reserves (12 Year Check)	  	 	46	  	
13.3	 	Engine Performance Restoration Reserves	  	 	46	  	
13.4	 	Engine LLP Reserves	  	 	46	  	
13.5	 	Landing Gear Reserves	  	 	47	  	
13.6	 	APU Reserves	  	 	47	  	
13.7	 	Reimbursement	  	 	47	  	
13.8	 	Reimbursement Adjustment	  	 	48	  	
13.9	 	Costs in Excess of Reserves	  	 	49	  	
13.10	 	Reimbursement after Termination Date	  	 	49	  	
13.11	 	Total Loss	  	 	49	  	
			
ARTICLE 14	 	TITLE AND REGISTRATION	  	 	50	  	
14.1	 	Title to the Aircraft	  	 	50	  	
14.2	 	Registration of Aircraft	  	 	50	  	
14.3	 	Cape Town Convention	  	 	50	  	
14.4	 	Filing of this Lease	  	 	51	  	
			
ARTICLE 15	 	IDENTIFICATION PLATES	  	 	52	  	
15.1	 	Airframe Identification Plates	  	 	52	  	
15.2	 	Engine Identification Plates	  	 	52	  	
			
ARTICLE 16	 	TAXES	  	 	53	  	
16.1	 	General Obligation of LESSEE	  	 	53	  	
16.2	 	Exceptions to Indemnity	  	 	53	  	
16.3	 	After-Tax Basis	  	 	54	  	
16.4	 	Timing of Payment	  	 	55	  	
16.5	 	Contests	  	 	55	  	
16.6	 	Refunds	  	 	55	  	
16.7	 	Cooperation in Filing Tax Returns	  	 	55	  	
16.8	 	Survival of Obligations	  	 	55	  	
			
ARTICLE 17	 	INDEMNITIES	  	 	56	  	
17.1	 	General Indemnity	  	 	56	  	
17.2	 	Exceptions to General Indemnities	  	 	57	  	
17.3	 	After-Tax Basis	  	 	57	  	
17.4	 	Timing of Payment	  	 	58	  	
17.5	 	Subrogation	  	 	58	  	
17.6	 	Notice	  	 	58	  	
17.7	 	Refunds	  	 	58	  	
17.8	 	Defense of Claims	  	 	58	  	
17.9	 	No Double Recovery	  	 	58	  	
17.10	 	Survival of Obligation	  	 	58	  	

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ARTICLE 18	 	INSURANCE	  	 	59	  	
18.1	 	Categories of Insurance	  	 	59	  	
18.2	 	Write-back of any Date Recognition Exclusion	  	 	59	  	
18.3	 	Write-backs of LSW555	  	 	59	  	
18.4	 	Installation of Third Party Engine	  	 	59	  	
18.5	 	LESSOR Coverage for LESSEE’s Employees	  	 	59	  	
18.6	 	Insurance for Indemnities	  	 	59	  	
18.7	 	Insurance required by Manufacturer	  	 	60	  	
18.8	 	Renewal	  	 	60	  	
18.9	 	Assignment of Rights by LESSOR	  	 	60	  	
18.10	 	Insurance for Wet Lease Operations	  	 	60	  	
18.11	 	Other Insurance	  	 	60	  	
18.12	 	Information	  	 	61	  	
18.13	 	Currency	  	 	61	  	
18.14	 	Grounding of Aircraft	  	 	61	  	
18.15	 	Failure to Insure	  	 	61	  	
18.16	 	Reinsurance	  	 	61	  	
18.17	 	Limit on Hull in favor of LESSEE	  	 	61	  	
			
ARTICLE 19	 	LOSS, DAMAGE AND REQUISITION	  	 	63	  	
19.1	 	Definitions	  	 	63	  	
19.2	 	Notice of Total Loss	  	 	64	  	
19.3	 	Total Loss of Aircraft or Airframe	  	 	64	  	
19.4	 	Surviving Engine(s)	  	 	65	  	
19.5	 	Total Loss of Engine and not Airframe	  	 	65	  	
19.6	 	Total Loss of APU	  	 	66	  	
19.7	 	Other Loss or Damage	  	 	67	  	
19.8	 	Copy of Insurance Policy	  	 	67	  	
19.9	 	Government Requisition	  	 	67	  	
			
ARTICLE 20	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	  	 	68	  	
20.1	 	Representations and Warranties	  	 	68	  	
20.2	 	Covenants	  	 	70	  	
			
ARTICLE 21	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	  	 	73	  	
21.1	 	Representations and Warranties	  	 	73	  	
21.2	 	Covenant of Quiet Enjoyment	  	 	73	  	
			
ARTICLE 22	 	FINANCIAL AND OTHER INFORMATION	  	 	74	  	
ARTICLE 23	 	RETURN OF AIRCRAFT	  	 	75	  	
23.1	 	Date of Return	  	 	75	  	
23.2	 	Last Engine Shop Visits	  	 	75	  	
23.3	 	Technical Report	  	 	75	  	
23.4	 	Return Location	  	 	75	  	
23.5	 	Full Aircraft Documentation Review	  	 	75	  	
23.6	 	Maintenance Policies and Procedures Manuals	  	 	76	  	
23.7	 	Aircraft Inspection	  	 	76	  	
23.8	 	Certificate of Airworthiness Matters	  	 	77	  	
23.9	 	General Condition of Aircraft at Return	  	 	77	  	

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23.10	 	Cheeks Prior to Return	  	 	81	  	
23.11	 	Part Lives	  	 	83	  	
23.12	 	Export and Deregistration of Aircraft	  	 	85	  	
23.13	 	Delay in Return of Aircraft Due to LESSOR Work Requests	  	 	85	  	
23.14	 	LESSEE’s Continuing Obligations	  	 	86	  	
23.15	 	Airport and Navigation Charges	  	 	86	  	
23.16	 	Return Acceptance Receipt	  	 	87	  	
23.17	 	Indemnities and Insurance	  	 	87	  	
23.18	 	Storage	  	 	87	  	
			
ARTICLE 24	 	ASSIGNMENT	  	 	88	  	
24.1	 	No Assignment by LESSEE	  	 	88	  	
24.2	 	Sale or Assignment by LESSOR	  	 	88	  	
24.3	 	LESSOR’s Lender	  	 	89	  	
24.4	 	LESSEE Cooperation	  	 	89	  	
24.5	 	Advance Consent Under Cape Town Convention	  	 	89	  	
24.6	 	Protections	  	 	89	  	
			
ARTICLE 25	 	DEFAULT OF LESSEE	  	 	91	  	
25.1	 	LESSEE Notice to LESSOR	  	 	91	  	
25.2	 	Events of Default	  	 	91	  	
25.3	 	LESSOR’s General Rights	  	 	93	  	
25.4	 	Deregistration and Export of Aircraft	  	 	94	  	
25.5	 	Cape Town Convention Remedies	  	 	94	  	
25.6	 	LESSEE Liability for Damages	  	 	95	  	
25.7	 	Waiver of Default	  	 	96	  	
25.8	 	Present Value of Payments	  	 	96	  	
25.9	 	Use of “Termination Date”	  	 	96	  	
			
ARTICLE 26	 	NOTICES	  	 	97	  	
26.1	 	Manner of Sending Notices	  	 	97	  	
26.2	 	Notice Information	  	 	97	  	
			
ARTICLE 27	 	ARBITRATION	  	 	98	  	
27.1	 	Arbitration of Any Dispute	  	 	98	  	
27.2	 	Notice of Arbitration	  	 	98	  	
27.3	 	Rules for Arbitration	  	 	98	  	
27.4	 	Number of Arbitrators	  	 	98	  	
27.5	 	Appointment of Arbitrator by Each Party	  	 	98	  	
27.6	 	Appointment of Lead Arbitrator	  	 	98	  	
27.7	 	Location of Arbitration	  	 	98	  	
27.8	 	Language for Arbitration	  	 	98	  	
27.9	 	Interim Measures of Protection	  	 	98	  	
27.10	 	Substantive Law	  	 	99	  	
27.11	 	Decision	  	 	99	  	
27.12	 	Prevailing Party in Dispute	  	 	99	  	
27.13	 	Waiver	  	 	99	  	
			
ARTICLE 28	 	GOVERNING LAW AND JURISDICTION	  	 	100	  	
28.1	 	California Law	  	 	100	  	
28.2	 	Non-Exclusive Jurisdiction in California	  	 	100	  	

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28.3	 	Protection of Interest in the Aircraft	  	 	100	  	
28.4	 	LESSOR Actions in Certain Jurisdictions	  	 	100	  	
28.5	 	Personal Jurisdiction	  	 	100	  	
28.6	 	Service of Process	  	 	100	  	
28.7	 	Prevailing Party in Dispute	  	 	101	  	
28.8	 	Future Amendments or Agreements	  	 	101	  	
28.9	 	Waiver	  	 	101	  	
			
ARTICLE 29	 	MISCELLANEOUS	  	 	102	  	
29.1	 	Press Releases	  	 	102	  	
29.2	 	Power of Attorney	  	 	102	  	
29.3	 	LESSOR Performance for LESSEE	  	 	102	  	
29.4	 	LESSOR’s Payment Obligations	  	 	102	  	
29.5	 	Application of Payments	  	 	102	  	
29.6	 	Usury Laws	  	 	102	  	
29.7	 	Delegation by LESSOR	  	 	103	  	
29.8	 	Confidentiality	  	 	103	  	
29.9	 	Rights of Parties	  	 	103	  	
29.10	 	Further Assurances	  	 	103	  	
29.11	 	Translations of Lease	  	 	103	  	
29.12	 	Use of Word “including”	  	 	103	  	
29.13	 	Headings	  	 	104	  	
29.14	 	Invalidity of any Provision	  	 	104	  	
29.15	 	Negotiation	  	 	104	  	
29.16	 	Time is of the Essence	  	 	104	  	
29.17	 	Amendments in Writing	  	 	104	  	
29.18	 	Consents Not to be Delayed	  	 	104	  	
29.19	 	Counterparts	  	 	104	  	
29.20	 	Delivery of Documents by Fax or E-mail	  	 	104	  	
29.21	 	Entire Agreement	  	 	104	  	

	  	vi	  	TABLE OF CONTENTS	

AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (together with all Exhibits hereto, the “ Lease ”) is made and entered into as of April 20, 2007.
BETWEEN:
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”); and
INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation whose principal place of business is at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, United States of America (“ LESSOR ”).
The subject matter of this Lease is one (1) new Airbus A319-100 aircraft. In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and LESSEE hereby agrees to lease from LESSOR the aircraft and the parties further agree as follows:
 
1

 	ARTICLE 1	SUMMARY OF TRANSACTION	
The following is a summary of the lease transaction between LESSEE and LESSOR. It is set forth for the convenience of the parties only and will not be deemed in any way to amend, detract from or simplify the other provisions of this Lease.
1.1 Description of Aircraft
One new Airbus A319-100 aircraft
1.2 Scheduled Delivery Date and Location
In the month of April 2008 in Hamburg, Germany
1.3 Initial Lease Term
10 years
1.4 Extension Lease Option
Two (2) lease extension options of one (1) year each
1.5 Security Deposit
***** payable as follows (in U.S. Dollars):

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) business days after execution of the lease	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	2	  	ARTICLE 1	
	  		  	SUMMARY OF TRANSACTION	

1.6 Transaction Fee
Blank page – please query
1.7 Rent During Lease Term
Blank page – please query
1.8 Reserves
Blank page – please query

	  	3	  	ARTICLE 1	
	  		  	SUMMARY OF TRANSACTION	

			
Type of Reserves	  	Amount of Reserves	
		
Airframe Reserves (6 Year Check):	  	***** per calendar month	
		
Airframe Reserves (12 Year Check):	  	***** per calendar month	
		
Engine Performance Restoration Reserves:	  	***** per engine flight hour for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Engine LLP Reserves:	  	***** per engine cycle for each engine (payable when the engine is utilized on the aircraft or another aircraft)	
		
Landing Gear Reserves:
APU Reserves:	  	***** per calendar month
***** per APU hour (payable when the APU is utilized on the aircraft or another aircraft)	
 
*	All reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
1.9 Additional Rent for Excess Airframe and Engine Cycles
***** for each cycle the airframe and ***** for each cycle an engine has operated, calculated as of the end of the ease term, in excess of the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycles
1.10 Country of Aircraft Registration
United States
1.11 Agreed Value of Aircraft
An amount equal to ***** of the manufacturer’s list price for the aircraft on the delivery date, which will be decreased by ***** of such amount on each yearly anniversary of the delivery date
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	4	  	ARTICLE 1	
	  		  	SUMMARY OF TRANSACTION	

1.12 LESSOR’s Bank Account
International Lease Finance Corporation
*****
JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	5	  	ARTICLE 1	
	  		  	SUMMARY OF TRANSACTION	

 	ARTICLE 2	DEFINITIONS	
Except where the context otherwise requires, the following words have the following meanings for all purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the words. Any agreement defined below or in this Lease includes each amendment, modification, supplement and waiver thereto in effect from time to time.
2.1 General Definitions .
“ Aircraft ” means the Airframe, two (2) Engines, APU, Parts and Aircraft Documentation, collectively. As the context requires, “Aircraft” may also mean the Airframe, any Engine, the APU, any Part, the Aircraft Documentation or any part thereof individually. For example, in the context of return to LESSOR the term “Aircraft” means the Airframe, Engines, APU, Parts and Aircraft Documentation collectively, yet in the context of LESSEE not creating any Security Interests other than Permitted Liens on the Aircraft, the term “Aircraft” means any of the Airframe, any Engine, the APU, any Part or the Aircraft Documentation individually.
“ Aircraft Documentation ” means all (a) log books, Aircraft records, manuals and other documents provided to LESSEE in connection with the Aircraft, (b) documents listed in the Estoppel and Acceptance Certificate and Exhibit N and (c) any other documents required to be maintained during the Lease Term and until the Termination Date by the Aviation Authority, LESSEE’s Maintenance Program and this Lease.
“ Airframe ” means the airframe listed in the Estoppel and Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding each Basic Engine or engines and the APU).
“ Airworthiness Directives ” or “ ADs ” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by any one or more of the Aviation Authority, DGAC, FAA and EASA.
“ APU ” means (a) the auxiliary power unit of the Aircraft listed in the Estoppel and Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by LESSOR and leased to LESSEE pursuant to Article 19.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.
“ Aviation Authority ” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the United States of America or any Government Entity which under the Laws of the United States of America from time to time has control over civil aviation or the registration, airworthiness or operation of

	  	6	  	ARTICLE 2	
	  		  	DEFINITIONS	

aircraft in the United States of America. If the Aircraft is registered in a country other than the United States of America, “Aviation Authority” means the agency which regulates civil aviation in such other country.
“ Aviation Documents ” means any or all of the following which at any time may be obtainable from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application for registration of the Aircraft with the appropriate authority in the State of Registration, (c) the certificate of registration for the Aircraft issued by the State of Registration, (d) a Standard Certificate of Airworthiness for the Aircraft specifying, transport category (passenger), (e) an air transport license, (f) an air operator’s certificate, (g) such recordation of LESSOR’s title to the Aircraft and interest in this Lease as may be available in the State of Registration and (h) all such other authorizations, approvals, consents and certificates, if any, in the State of Registration as may be required to enable LESSEE lawfully to operate the Aircraft.
“ Basic Engine ” means, with respect to an Engine, the Engine Manufacturer’s engine modules, components and systems as specified in the Engine Manufacturer’s delivered bill of material for that engine model. The “Basic Engine” does not include the nacelle, installed components related to the Aircraft systems, thrust reversers, quick engine components (QEC), primary exhaust nozzle and any other Parts which are not considered by the Engine Manufacturer to be part of a “basic engine”.
“ BFE ” means any equipment which is to be provided by the purchaser of the Aircraft (whether actually provided by LESSOR as buyer-furnished equipment or Manufacturer as seller-purchased equipment).
“ Business Day ” means a day other than a Saturday or Sunday on which the banks in the city where LESSOR’s Bank is located are open for the transaction of business of the type required by this Lease and except in respect of payments of Rent, Mexico City, Mexico.
“ Cape Town Convention ” means both the Convention and the Protocol.
“ Consolidated Text ” means the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment.
“ Convention ” means the Convention on International Interests in Mobile Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa as it may be amended from time to time.
“ Creditor ” means any lessor, owner, bank, lender, mortgagee or other Person which is the owner of or has any interest in an aircraft engine or aircraft operated by LESSEE.

	  	7	  	ARTICLE 2	
	  		  	DEFINITIONS	

“ Creditor Agreement ” means the applicable agreement between a Creditor and LESSEE or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by LESSEE on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
“ Default ” means any event which, upon the giving of notice, the lapse of time and/or a relevant determination, would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft from LESSOR to LESSEE pursuant to Articles 3 and 6.
“ Delivery Date ” means the date on which Delivery takes place.
“ DGAC ” means the French Direction Generale de l’Aviation Civile or any successor thereto.
“ Dollars ”, “ $ ” and “ US$ ” mean the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency or any successor thereto. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “EASA-approved” station or facility, such station or facility must be approved by EASA to perform maintenance and repair work on the Aircraft, an Engine or Part submitted to it for maintenance or repair, as applicable.
“ Engine ” means (a) each of the engines listed on the Estoppel and Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.
“ Eurocontrol ” means the European Organization for the Safety of Air Navigation established by the Convention related to the Co-operation for the Safety of Air Navigation (Eurocontrol) signed on December 13, 1960, as amended.
“ Engine Manufacturer ” means IAE International Engines A.G.
“ Event of Default ” means any of the events referred to in Article 25.2.
“ FAA ” means the Federal Aviation Administration of the U.S. Department of Transportation or any successor thereto under the Laws of the U.S. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “FAA-approved” station or facility, such station or facility must be approved by the FAA to perform maintenance and repair work on the Aircraft, an Engine or Part, as applicable.

	  	8	  	ARTICLE 2	
	  		  	DEFINITIONS	

“ FARs ” means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.
“ Geneva Convention ” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19, 1948.
“ Government Entity ” means any (a) national, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof or (c) association, organization or institution of which any of the entities listed in (a) or (b) is a member or to whose jurisdiction any such entity is subject.
“ International Registry ” means the international registration facilities established for the purposes of the Cape Town Convention.
“ JAA ” means the Joint Aviation Authorities, an associated body of the European Civil Aviation Conference.
“ JARs ” means the EASA/JAA regulations, as amended from time to time, or any successor regulations thereto.
“ Landing Gear ” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.
“ Law ” means any (a) statute, decree, constitution, regulation, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party, (c) judicial or administrative interpretation or application of any of the foregoing or (d) any binding judicial precedent having the force of law.
“ LESSOR’s Lien ” means any Security Interest created by or through LESSOR.
“ Maintenance Program ” means LESSEE’s maintenance program as approved by the Aviation Authority or such other maintenance program as LESSOR may, acting reasonably, accept in writing.
“ Manufacturer ” means Airbus S.A.S.
“ Mexico ” means the United Mexican States.

	  	9	  	ARTICLE 2	
	  		  	DEFINITIONS	

“ MPD ” means the then-current Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.
“ Overhaul ” means the full reconditioning of the Aircraft, an Engine, the APU, Landing Gear, module or Part, as the case may be, in which such equipment has been fully disassembled, cleaned, thoroughly inspected and returned to the highest standard specified by the applicable manufacturer’s manual.
“ Part ” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, LESSEE-furnished or LESSOR-purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of LESSOR in accordance with Article 12.4.
“ Permitted Lien ” means (a) LESSOR’s Liens; (b) Security Interests arising in the ordinary course of LESSEE’s business for Taxes either not yet assessed or, if assessed, not yet due or being contested in good faith in accordance with Article 16.5 or (c) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ liens or similar Security Interests arising by operation of Law after the Delivery Date in the ordinary course of LESSEE’s business for amounts which are either not yet due or are being contested in good faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided) so long as such proceedings do not involve any material likelihood of sale, forfeiture or loss of the Aircraft.
“ Person ” means any individual, firm, partnership, joint venture, trust, corporation, company, Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether having distinct legal personality or not.
“ Prime Rate ” means the rate of interest from time to time announced by JPMorgan Chase Bank in New York as its prime commercial lending rate.
“ Prohibited Country ” means any country other than Mexico to which the export and/or use of an Airbus A319-100 aircraft with V2524 engines attached thereto is not permitted under (a) any United Nations sanctions, (b) the Council Regulation (EC) No. 149/2003 which updates and amends Council Regulation (EC) 1334/2000, (c) the United States Export Administration Act 1979 (as amended) or any successor legislation and/or the Export Administration Regulations promulgated thereunder, (d) where applicable, the various regulations administered from time to time by the Office of Foreign Assets Control of the U.S. Treasury Department, (e) any similar or corresponding legislation then in effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any subsequent United Nations Sanctions

	  	10	  	ARTICLE 2	
	  		  	DEFINITIONS	

Orders the effect of which prohibits or restricts the export and/or use of Airbus A319-100 aircraft with V2524 engines attached thereto to such country. Prohibited Country will be defined by applicable regulations as modified, amended or superceded from time to time.
“ Protocol ” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa, as it may be amended from time to time.
“ Return Check ” means the accomplishment of the subsequent “C” check (or equivalent) of the Aircraft in accordance with the MPD (including all non-routine work generated as a result of performance of such MPD tasks) to clear the Aircraft for the next 20 months, 6,000 hours and 4,500 cycles of operation from the Termination Date. For avoidance of doubt, if the inspection interval pursuant to the MPD for a particular task only refers to one or two of the three measurements above (i.e. months, hours or cycles), then only those particular measurements referred to in the MPD will be utilized in determining whether the task must be performed.
“ Qualified Performance Restoration ” means that the gaspath core major module of an Engine shall have, as a minimum, a Refurbishment accomplished in accordance with the Engine Manufacturer’s current V2500 Maintenance Management Plan recommendations. The gaspath core major module shall consist of the high pressure compressor module, diffuser/combustor group, outer/inner combustion chambers, No. 4 bearing, high pressure turbine stage one nozzle vane group and high pressure turbine module. For the sole purposes of this paragraph, the term “Refurbishment” means the Engine Manufacturer’s definition of a refurbishment as stated in the then-current V2500 Maintenance Management Plan recommendations at the time of the applicable shop visit.
“ Security Interest ” means any encumbrance or security interest, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title retention, attachment, levy, claim or right of possession or detention.
“ State of Registration ” means the U.S. or such other country or state of registration of the Aircraft as LESSOR may, in its absolute discretion, approve in writing.
“ U.S. ” or “ U.S.A. ” means the United States of America.

	  	11	  	ARTICLE 2	
	  		  	DEFINITIONS	

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

Terms	  	Article	
Agreed Value	  	19.1	
Airframe Reserves (6 Year Check)	  	5.4.1	
Airframe Reserves (12 Year Check)	  	5.4.1	
APU Reserves	  	5.4.1	
Default Interest	  	5.7	
Delivery Location	  	3.1	
Engine LLP Reserves	  	5.4.1	
Engine Performance Restoration Reserves	  	5.4.1	
Expenses	  	17.1	
Expiration Date	  	4.3	
Extension Lease Term	  	4.2	
FHA Agreement	  	13.3	
Future Agreements	  	28.8	
Indemnitees	  	17.1	
Initial Lease Term	  	4.1	
Landing Gear Reserves	  	5.4.1	
Lease Term	  	4.1	
LESSEE Customization Costs	  	5.3.1	
LESSOR’s Assignee	  	24.2.1	
LESSOR’s Bank	  	5.6	
LESSOR’s Lender	  	24.3	
Modification	  	12.9.1	
Net Total Loss Proceeds	  	19.1	
OEM Parts	  	12.2.2	
Operative Documents	  	20.1.3	
PMA Parts	  	12.2.2	
Rent	  	5.3.1	
Reorganization Transaction	  	20.2.5	
Reorganized Entity	  	20.2.5	
Reserves	  	5.4.1	
Scheduled Delivery Date	  	3.2	
Security Deposit	  	5.1.1	
Taxes	  	16.1	
Termination Date	  	4.4	
Total Loss	  	19.1	
Total Loss Date	  	19.1	
Total Loss Proceeds	  	19.1	
Transaction Fee	  	5.2	
Transfer	  	24.2.1	
Waste Expense	  	13.4	

	  	12	  	ARTICLE 2	
	  		  	DEFINITIONS	

 	ARTICLE 3	PLACE AND DATE OF DELIVERY	
3.1 Place of Delivery . LESSOR will deliver the Aircraft to LESSEE at Manufacturer’s facility in Hamburg, Germany or such other place as may be agreed in writing between the parties (the “ Delivery Location ”).
3.2 Scheduled Delivery Date . As of the date of this Lease, delivery of the Aircraft from Manufacturer to LESSOR and LESSOR to LESSEE is scheduled to occur in the month of April 2008. LESSOR will notify LESSEE from time to time and in a timely manner of the exact date on which LESSOR expects Delivery to take place (the “ Scheduled Delivery Date ”).
3.3 Delivery subject to Manufacturer Delivery . LESSOR and LESSEE expressly acknowledge that Delivery of the Aircraft to LESSEE is subject to and conditioned upon delivery of the Aircraft by Manufacturer to LESSOR.
3.4 No LESSOR Liability . LESSOR will not be liable for any loss or expense, or any loss of profit, arising from any delay or failure in Delivery to LESSEE unless such delay or failure arises as a direct consequence of the willful misconduct of LESSOR, and in no event will LESSOR be liable for any delay or failure which is caused by any breach or delay on the part of Manufacturer or any BFE supplier.
3.5 Total Loss of Aircraft prior to Delivery . If a Total Loss of the Aircraft occurs prior to Delivery, neither party will have any further liability to the other except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent.
3.6 Cancellation for Delay . Promptly after LESSOR becomes aware that in Manufacturer’s opinion a delay will cause Delivery to be delayed beyond October 30, 2008, LESSOR will notify LESSEE. By written notice given within ten (10) Business Days after LESSEE’s receipt of such LESSOR notice, either party may by written notice to the other party terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent, and if LESSOR subsequently collects (at its discretion) from Manufacturer monetary damages as compensation for such delay, LESSOR shall share such compensation (minus any out of pocket costs incurred by LESSOR in pursuing such damages) equally with LESSEE. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.6 unless otherwise agreed in writing by the parties.

	  	13	  	ARTICLE 3	
	  		  	PLACE AND DATE OF DELIVERY	

 	ARTICLE 4	LEASE TERM AND EXTENSION OPTION	
4.1 Initial Lease Term . The term of leasing of the Aircraft will commence on the Delivery Date and continue for an initial lease term of ten (10) years (“ Initial Lease Term ”).
4.2 Lease Extension Option . So long as no Default or Event of Default has occurred and is continuing hereunder on the date of exercise of the option, LESSEE will have two (2) options to extend the term of the Lease for a period of one (1) year each from the then-existing Expiration Date (the “ Extension Lease Term ”). In order to exercise an option, LESSEE must give written notice to LESSOR not less than ten (10) months prior to the then-existing Expiration Date of this Lease. Any notice given by LESSEE in accordance herewith will be irrevocable.
4.3 “Lease Term” and “Expiration Date” . “ Lease Term ” means the term of leasing commencing on the Delivery Date and terminating on the Expiration Date. “ Expiration Date ” means the date on which LESSEE is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of the Initial Lease Term or Extension Lease Term, if and as applicable.
4.4 “Termination Date” . If LESSEE returns the Aircraft to LESSOR on the Expiration Date in the condition required by Article 23, then “ Termination Date ” has the same meaning as “Expiration Date”. If LESSEE does not do so, then “ Termination Date ” means the date on which the first of the following events occurs:
(a) there is a Total Loss of the Aircraft prior to Delivery pursuant to Article 3.5;
(b) cancellation of this Lease occurs pursuant to Article 3.6;
(c) there is a Total Loss of the Aircraft and payment is made to LESSOR in accordance with Article 19.3;
(d) prior to the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default;
(e) an Event of Default occurs hereunder by LESSEE returning the Aircraft in the condition required by this Lease after the Expiration Date; or
(f) after the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default.

	 	14	 	ARTICLE 4	
	 		 	LEASE TERM AND EXTENSION OPTION	

 	ARTICLE 5	SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS	
 
5.1	Security Deposit .	
 
5.1.1	LESSEE will pay LESSOR a security deposit of ***** for its lease of the Aircraft (the “ Security Deposit ”). The Security Deposit is payable as follows (in US$):	

Payment Date	  	Amount	 	
Received	  	 	*****	  	
Within two (2) Business Days after execution of the Lease	  	 	*****	  	
May 1, 2007	  	 	*****	  	
June 1, 2007	  	 	*****	  	
July 1, 2007	  	 	*****	  	
August 1, 2007	  	 	*****	  	
September 1, 2007	  	 	*****	  	
October 1, 2007	  	 	*****	  	
November 1, 2007	  	 	*****	  	
December 1, 2007	  	 	*****	  	
 
5.1.2	The Security Deposit may be commingled with LESSOR’s general funds and any interest earned on such Security Deposit will be for LESSOR’s account. If the Security Deposit is reduced below the required amount by application to meet LESSEE’S unperformed obligations under this Lease, LESSEE will replenish the Security Deposit within ten (10) days after LESSOR’s written demand therefor in accordance with the provisions of Article 26.1. The Security Deposit will serve as security for the performance by LESSEE of its obligations under this Lease and any other agreements between LESSEE and LESSOR or any direct or indirect subsidiary of LESSOR relating to aircraft, engines, aircraft equipment or the extension of credit and may be applied by LESSOR upon the occurrence of an Event of Default hereunder or of a default by LESSEE under any such other agreements.	
 
5.1.3	Upon termination of this Lease in accordance with Article 4.4 other than if an Event of Default has occurred and is continuing, LESSOR will return to LESSEE the amount of the Security Deposit then held by LESSOR (so long as no default by LESSEE exists under any other agreement between LESSEE and LESSOR relating	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	15	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

 	to aircraft, engines or aircraft equipment or the extension of credit by LESSOR to LESSEE), without interest, less an amount determined by LESSOR to be a reasonable estimate of the costs, if any, which LESSOR will incur to remedy any unperformed obligations of LESSEE under this Lease, including the correction of any discrepancies from the required condition of the Aircraft on return of the Aircraft.	
5.2 Transaction Fee . Within two (2) Business Days after execution of this Lease, LESSEE will pay LESSOR a nonrefundable transaction fee of ***** (the “ Transaction Fee ”).
5.3 Rent .
 
5.3.1	LESSEE will pay LESSOR the following amounts monthly in advance as rent for the Aircraft (“ Rent ”):	
Lease Term : Payable monthly in advance and equal to the sum of:
(a) ***** per month expressed in January 2006 U.S. Dollars*
 
*	The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1 st day of January 2006 through and including the delivery month of the aircraft, compounded monthly; provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.	
plus
(b) ***** per month
plus
(c) the “LESSEE Customization Costs” amortized over the Lease Term, together with interest thereon at a rate equal to the Prime Rate in effect at Delivery
The “ LESSEE Customization Costs ” consist of the cost of 1. all agreed-to BFE (whether buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	16	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

Exhibit A and 2. all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR. Any increases to the above base rent will be calculated immediately prior to Delivery.
 
5.3.2	The first payment of Rent during the Lease Term will be paid no later than three (3) Business Days prior to the Scheduled Delivery Date. Each subsequent payment of Rent will be due monthly thereafter no later than the same day of the month as the Delivery Date of the Aircraft except that, if such day is not a Business Day, the Rent will be due on the immediately preceding Business Day. If Delivery occurred on the 29 th , 30 th or 31 st  of the month and in any given month during the Lease Term in which a Rent payment is due there is no such corresponding date, Rent will be payable on the last Business Day of such month. In the event that LESSEE has paid the first payment of Rent three (3) Business Days prior to the Scheduled Delivery Date and Delivery is subsequently delayed for a period in excess of ten (10) days, LESSOR shall return such Rent payment to LESSEE at LESSEE’s request, unless LESSOR advises LESSEE in writing that the Aircraft will be delivered in the next seven (7) days from the date of such request.	

	 	17	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

5.4 Reserves .
 
5.4.1	LESSEE will pay to LESSOR supplemental Rent, based on LESSEE’s use of the Aircraft during the Lease Term, in the form of the following reserves in the following amounts (individually, “ Airframe Reserves (6 Year Check) ”, “ Airframe Reserves (12 Year Check) ”, “ Engine Performance Restoration Reserves ”, “ Engine LLP Reserves ”, “ Landing Gear Reserves ” and “ APU Reserves ”, and collectively “ Reserves ”):	

Type of Reserves	  	Amount of Reserves	
		
Airframe Reserves (6 Year Check):	  	***** per calendar month	
		
Airframe Reserves (12 Year Check):	  	***** per calendar month	
		
Engine Performance Restoration Reserves:	  	***** per Engine flight hour for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Engine LLP Reserves:	  	***** per Engine cycle for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Landing Gear Reserves:	  	***** per calendar month	
		
APU Reserves:	  	***** per APU hour (payable when the APU is utilized on the Aircraft or another aircraft)	
 
*	All Reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.	
 
5.4.2	All Reserves will be paid on or before the 15 th day of the calendar month next following the month in which the Delivery Date occurs and on or before the 15 th day of each succeeding calendar month for flying performed during the calendar month prior to payment and for the calendar-based Reserves pertaining to such prior calendar month. All Reserves pertaining to the month in which the Termination Date occurs will be paid on the Termination Date, unless otherwise agreed by the parties.	
 
5.4.3	No interest will accrue or be paid at any time to LESSEE on such Reserves and, subject to LESSOR’s obligations under Article 13, LESSOR may commingle the Reserves with LESSOR’s general funds.	
5.5 Additional Rent for Excess Cycles . If on the Termination Date the Airframe or any Engine has operated more cycles than the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycle over the period of the Lease Term, LESSEE will pay LESSOR as additional Rent ***** for each Airframe cycle and ***** for each Engine cycle the Airframe and any Engine actually operated during the Lease Term in excess of the number of cycles which result from an hour/cycle ratio of 1.25 hours to 1 cycle. A
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	18	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

calculation will be made by LESSOR as of the Termination Date and such additional Rent will be due and payable by LESSEE within three (3) Business Days following the date LESSEE receives such calculation, in writing, from LESSOR.
5.6 LESSOR’s Bank Account . The Security Deposit, Transaction Fee, Rent, Reserves and any other payment due under this Lease will be paid by wire transfer of immediately available U.S. Dollar funds to LESSOR’s bank account at:
International Lease Finance Corporation
Account No. *****
JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
ABA# *****
or to such other bank account in the United States as LESSOR may from time to time designate by written notice (“ LESSOR’s Bank ”). When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually must be received by LESSOR’s Bank on or before such specific date, even if, in order for such payment to be received by LESSOR’s Bank by such specific date, LESSEE must initiate the wire transfer prior to such specific date.
5.7 Default Interest . If LESSOR’s Bank does not receive the Rent or any other amount on or before the specific date when due, LESSOR will suffer loss and damage the exact nature and amount of which are difficult or impossible to ascertain. LESSEE will pay LESSOR as supplemental Rent (by way of agreed compensation and not as a penalty) interest on any due and unpaid amounts payable by LESSEE under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to ***** plus the Prime Rate in effect on the date on which the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at LESSOR’s Bank or, in the case of LESSOR’s performance of LESSEE’s obligations hereunder, from the date of payment by LESSOR through the date of LESSEE’s repayment to LESSOR (“ Default Interest ”). Default Interest will accrue on a day-to-day basis and be compounded monthly.
5.8 No Deductions or Withholdings . All payments by LESSEE under this Lease, including the Security Deposit, Transaction Fee, Rent, Reserves, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes (as defined in Article 16) imposed in the State of Registration or any jurisdiction from which such payments are made unless LESSEE is prohibited by Law from doing so, in which event LESSEE will gross up the payment amount such that the net payment received by LESSOR after any deduction or withholding equals the amounts called for under this Lease. LESSEE will also do all of the following:
(a) Ensure that the deduction or withholding does not exceed the minimum amount legally required;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	 	19	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

(b) Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto) unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR; and
(c) Furnish to LESSOR within thirty (30) days after each payment a certified copy of an official receipt of the relevant Government Entities involved, if available, or other evidence of payment reasonably accepted by LESSOR for all amounts so deducted or withheld.
5.9 Value Added Taxes . The Rent and other amounts payable by LESSEE under this Lease are exclusive of any value added tax or similar tax or duty.
5.10 Wire Transfer Disbursement Report . At the time of each Rent or other payment, LESSEE will advise LESSOR (including by way of a reference included in a bank transfer instruction that is available to LESSOR) in writing of the payment being made by LESSEE and the allocation of such payment to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation set forth in LESSEE’s report, in the event LESSEE is in default under this Lease, LESSOR will have complete discretion to allocate LESSEE’s payments as LESSOR determines.
5.11 Net Lease .
 
5.11.1	This Lease is a net lease and LESSEE’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:	
(a) any right of set-off, counterclaim, recoupment, defense or other right (including any right of reimbursement) which LESSEE may have against LESSOR, Manufacturer, the Engine Manufacturer or any other person for any reason, including any claim LESSEE may have for the foregoing;
(b) unavailability or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against LESSEE’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any

	 	20	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of any jurisdiction or Total Loss of the Aircraft;
(c) insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against LESSOR, LESSEE, Manufacturer, the Engine Manufacturer or any other Person;
(d) invalidity or unenforceability or lack of due authorization of or other defect in this Lease;
(e) failure or delay on the part of any party to perform its obligations under this Lease; or
(f) any other circumstance which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of LESSEE hereunder.
 
5.11.2	Nothing in Article 5.11 will be construed to limit LESSEE’s rights and remedies in the event of LESSOR’s breach of its warranty of quiet enjoyment set forth in Article 21.2 or to limit LESSEE’s rights and remedies to pursue in a court of law any claim it may have against LESSOR or any other Person.	
5.12 Currency Indemnity . If under any applicable Law, whether as a result of a judgment against LESSEE or the liquidation of LESSEE or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, LESSEE will as a separate and independent obligation, fully indemnify LESSOR against the amount of the shortfall. If the amount received by LESSOR upon converting the payment into Dollars exceeds the amount payable under this Lease, LESSOR will remit such excess to LESSEE. For the purposes of this paragraph “rate of exchange” means the rate at which LESSOR is able on the relevant date to purchase Dollars in New York or London (at LESSOR’s option) with such other currency.
5.13 LESSOR Performance of LESSEE Obligation . If LESSEE fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, LESSOR may (but is not required to) at its election, after the expiry of any applicable cure or similar period and without waiver of its rights perform such obligation and/or pay such amount unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.

	 	21	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

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

	 	22	 	ARTICLE 5	
	 		 	SECURITY DEPOSIT, TRANSACTION FEE,
RENT, RESERVES AND OTHER PAYMENTS	

 	ARTICLE 6	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	
6.1 LESSEE Selection of Aircraft . LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE IS BASED UPON INFORMATION SUPPLIED BY MANUFACTURER. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
6.2 Participation Agreement . LESSEE has the right to inspect the Aircraft during the manufacture process and to attend and observe the acceptance tests of the Aircraft pursuant to the terms of a Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B.
6.3 Procurement of BFE . LESSOR will procure all BFE for the Aircraft in accordance with the Aircraft specification set forth in Exhibit A. With respect to any additional BFE not part of such specifications, LESSOR and LESSEE agree to use commercially reasonable efforts to procure such BFE under the supplier contract of LESSOR or LESSEE which provides the most favorable pricing, unless LESSOR is prohibited from doing so or unless any such change could cause, in LESSOR’s reasonable opinion, a delay in Delivery of the Aircraft.
6.4 Assignment of Training . LESSOR agrees to give LESSEE a product support allowance as set forth in Appendix 3 of the Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B. If LESSEE fails to take Delivery of the Aircraft when tendered in accordance with Article 6.7, LESSEE will immediately pay to LESSOR an amount equal to the Dollar value of any goods or services used under the Participation Agreement.
6.5 LESSEE Inspection of Aircraft . During the course of final assembly of the Aircraft, and at Delivery, LESSEE will have its own representative present to inspect the Aircraft and to ensure its conformity with LESSEE’s needs and the terms of this Lease. LESSEE will have ground inspection and acceptance flight rights with respect to the Aircraft. LESSEE acknowledges that, as between LESSEE and LESSOR, in accepting the Aircraft LESSEE is relying on its own inspection and knowledge of the Aircraft in determining whether the Aircraft meets the requirements of this Lease.
b) Aircraft at Delivery . At Delivery, the Aircraft will be as set forth in Exhibit A, as such description may be modified by any change requests agreed to among LESSEE, LESSOR and Manufacturer (which will be reflected in amendment(s) to this Lease). In the event of any discrepancies, LESSEE and LESSOR will cooperate in good faith with one another and with Manufacturer and the Engine and other manufacturers, as applicable, in order to arrive at a mutually acceptable resolution of any such discrepancies.

	 	23	 	ARTICLE 6	
	 		 	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	

6.7 Delivery of the Aircraft to LESSEE . Subject to LESSEE having performed all of the conditions precedent to Delivery set forth in this Lease (or LESSOR’s waiver of one or more of such conditions precedent), immediately following delivery of the Aircraft from Manufacturer to LESSOR, LESSOR will deliver the Aircraft to LESSEE at the Delivery Location. Upon tender of the Aircraft by LESSOR to LESSEE in the condition required by Article 6.6, LESSEE will accept the Aircraft and the date of tender by LESSOR to LESSEE will be deemed to be the Delivery Date for all purposes under this Lease, including the commencement of LESSEE’s obligation to pay Rent hereunder. However, nothing in this Lease will obligate LESSOR to deliver the Aircraft to LESSEE if LESSEE has not complied with the conditions contained in Articles 7.1 and 7.2.
6.8 LESSEE Acceptance of Aircraft . If LESSEE fails to (i) comply with its obligations set forth in the Participation Agreement pursuant to Article 6.2, (ii) comply with the conditions contained in Articles 7.1 and 7.2 so as to allow Delivery to take place immediately following delivery of the Aircraft by Manufacturer to LESSOR or (iii) take delivery of the Aircraft when properly tendered for delivery by LESSOR in the condition required hereunder, LESSEE will indemnify LESSOR for all out-of-pocket costs and expenses incurred by LESSOR as a result thereof including (without limitation) any payments other than the purchase price which LESSOR becomes obliged to make to Manufacturer which result directly from LESSEE’s failure to comply with said conditions.

	 	24	 	ARTICLE 6	
	 		 	INVOLVEMENT WITH AIRCRAFT MANUFACTURER	

 	ARTICLE 7	PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	
7.1 Pre-Delivery Requirements . LESSEE will do each of the following prior to the Scheduled Delivery Date of the Aircraft within the time frames set forth below:
 
7.1.1	Within one (1) month after execution of this Lease or such other period as the parties shall agree, LESSEE will deliver to LESSOR each of the following:	
(a) copies of resolutions of the Board of Directors of LESSEE or other written evidence of appropriate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of LESSEE hereunder. Such resolutions or other written evidence must also specifically grant the individual executing this Lease on behalf of LESSEE with the authority and power to commit and bind LESSEE to the arbitration clause contained in Article 27 under the Laws of Mexico;
(b) a letter from the Aviation Authority in the form and substance of Exhibit E (if available); and
(c) an opinion of counsel in substantially the form and substance of Exhibit G such as LESSOR accepts from third party legal counsel in Mexico in the course of LESSOR’s business.
 
7.1.2	At least seven (7) days prior to the Scheduled Delivery Date, LESSEE will have delivered to LESSOR a Certificate of Insurance and Brokers’ Letter of Undertaking substantially in the same form as Exhibits C and D evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date.	
 
7.1.3	At least three (3) Business Days prior to the Scheduled Delivery Date, LESSEE will do each of the following:	
(a) pay to LESSOR the first monthly installment of Rent in accordance with Article 5.3.2;
(b) to the extent required, provide LESSOR with documents evidencing that LESSEE has obtained any necessary licenses for the importation and ferrying of the Aircraft into Mexico and that all applicable customs duties and sales taxes in respect of the Aircraft, if any, have been discharged by LESSEE (or arrangements satisfactory to LESSOR have been made for obtaining or paying for the same), such that at return of the Aircraft to LESSOR no additional fees, duties or taxes will be payable in order to export the Aircraft from Mexico;

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

(c) provide LESSOR with documents reasonably requested by LESSOR evidencing the issuance of each approval, license and consent, if any, which may be required in connection with the remittance to LESSOR of any amount payable under this Lease or the performance by LESSEE of any of its obligations hereunder (including without limitation any exchange control approval);
(d) provide LESSOR with a copy of such Aviation Documents as may be available prior to the Scheduled Delivery Date;
(e) provide LESSOR with a power of attorney empowering LESSEE’s representative, who may be an officer or employee of LESSEE, to accept the Aircraft on behalf of LESSEE;
(f) provide LESSOR with a power of attorney in substantially the form of Exhibit H;
(g) provide LESSOR with a power of attorney for purposes of the Cape Town Convention in the form of Exhibit I; and
(h) provide LESSOR with such other documents as LESSOR may reasonably request.
7.2 Delivery Requirements . On the Delivery Date of the Aircraft, each of the following will occur:
 
7.2.1	LESSEE will execute and deliver to LESSOR an Estoppel and Acceptance Certificate in the form of Exhibit F covering the Aircraft and effective as of the Delivery Date.	
 
7.2.2	If not previously done, LESSEE and LESSOR will sign an amendment or supplement to Exhibit A evidencing all agreed-to changes to the specification of the Aircraft.	
 
7.2.3	LESSEE will deliver a certificate signed by an officer of LESSEE stating all of the following:	
(a) the representations and warranties contained in Article 20 are true and accurate on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(b) no Default or Event of Default has occurred and is continuing or will result from LESSEE’s lease of the Aircraft hereunder.

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

7.2.4	LESSEE’s counsel will deliver an opinion confirming the matters set forth in the opinion of counsel described in Article 7.1 and advising that all filing and other requirements described in the earlier opinion of counsel have been met or will be met (if permitted by Law) upon or immediately following Delivery.	
 
7.2.5	If any Creditor Agreement provides that such Creditor will or may obtain any right, title or interest in an Engine which is installed on such Creditor’s aircraft, LESSEE will deliver to LESSOR an engines cooperation agreement in form and substance acceptable to LESSOR which is executed by LESSEE and LESSEE’s Creditors (as defined therein).	
 
7.2.6	LESSEE and LESSOR will execute assignments of Manufacturer and Engine Manufacturer rights in the form and substance of Exhibits J and K, respectively, subject to the manufacturers’ consents, if and as applicable.	
 
7.2.7	LESSEE will deliver to LESSOR a copy of such Aviation Documents as have not been previously delivered which are available.	
7.3 Post-Delivery Requirements .
 
7.3.1	Within seven (7) days after Delivery, if not previously provided, LESSEE will do each of the following:	
(a) procure registration of the Aircraft in the register of aircraft of the State of Registration showing LESSOR as the owner and provide evidence of the same to LESSOR;
(b) cause the interests of LESSOR in the Aircraft (including in the Engines, if possible), this Lease and the other Operative Documents to be registered in the International Registry to the fullest extent such interests may be registered, including by consenting to or causing such registration via a “designated entry point” (as such term is defined in the Cape Town Convention) in the United States;
(c) provide LESSOR with copies of all Aviation Documents not previously delivered; and
(d) if the Aircraft could not be registered at Delivery, provide LESSOR with a follow-up opinion of counsel advising that the Aircraft has been registered in the State of Registration and that all necessary filings have been made.

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

7.3.2	Within one (1) month after Delivery, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	

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

 	ARTICLE 8	DISCLAIMERS AND WAIVERS	
ANY COMMITMENT OR COVENANT ON THE PART OF LESSOR REGARDING THE CONDITION OF THE AIRCRAFT EXPIRES AFTER DELIVERY AND THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS ARTICLE 8 REGARDING THE CONDITION OF THE AIRCRAFT WILL THEN APPLY. THUS, FROM AND AFTER THE TIME OF LESSEE’S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE, AS BETWEEN LESSOR AND LESSEE:
8.1 “As Is, Where Is” . LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS”. LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO, AND LESSEE HEREBY WAIVES ANY EXPRESS OR IMPLIED WARRANTY OR COVENANT (WHETHER STATUTORY OR OTHERWISE) AS TO (i) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (ii) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (iii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (iv) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
8.2 Waiver of Warranty of Description . LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN SECTIONS 10508 THROUGH 10522 OF THE

	  	29	  	ARTICLE 8	
	  		  	DISCLAIMERS AND WAIVERS	

CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME AFTER DELIVERY, THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND EITHER 1. LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT SEASONABLY CURED OR 2. LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSOR’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL INVALIDATE ANY AGREEMENT BETWEEN LESSOR AND MANUFACTURER TO RECTIFY DISCREPANCIES DISCOVERED PRIOR TO DELIVERY.
8.3 LESSEE Waiver . LESSEE HEREBY WAIVES AS BETWEEN ITSELF AND LESSOR AND AGREES NOT TO SEEK TO ESTABLISH OR ENFORCE ANY RIGHTS OR REMEDIES, EXPRESS OR IMPLIED (WHETHER STATUTORY, IN CONTRACT OR TORT OR UNDER ANY STRICT LIABILITY OR OTHER THEORY) AGAINST LESSOR OR THE AIRCRAFT RELATING TO ANY OF THE MATTERS MENTIONED IN ARTICLES 8.1 OR 8.2, REGARDLESS OF THE NEGLIGENCE, ACTIVE OR PASSIVE OR ANY OTHER TYPE, OF LESSOR.
8.4 Conclusive Proof . DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND ENGINES AND (i) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (ii) THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO LESSEE.
8.5 No Liability to Repair or Replace . LESSOR will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use.
8.6 No Waiver . Nothing in this Article 8 or elsewhere in this Lease will be deemed to be a waiver by LESSEE of any rights it may have against Manufacturer, the Engine Manufacturer or any other Person.
8.7 Consideration for Waivers . LESSEE’s waiver of warranties and acceptance of the disclaimers expressly set forth in this Article 8 are made in consideration of (i) LESSEE’s

	  	30	  	ARTICLE 8	
	  		  	DISCLAIMERS AND WAIVERS	

rights hereunder to inspect the Aircraft, (ii) LESSOR’s assignment to LESSEE of any existing and assignable warranties of Manufacturer and the Engine Manufacturer and (iii) the amount of the Rent and other payments contained in this Lease.

	  	31	  	ARTICLE 8	
	  		  	DISCLAIMERS AND WAIVERS	

 	ARTICLE 9	MANUFACTURERS’ AND VENDORS’ WARRANTIES	
9.1 Warranties . As set forth in Article 7.2.6, at Delivery LESSOR will assign to LESSEE for the duration of the Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine Manufacturer. Effective on the Delivery Date, all other assignable vendor warranties with respect to the Aircraft are hereby assigned by LESSOR to LESSEE.
9.2 Reassignment . On the Termination Date, the benefit of any warranty assigned by LESSOR to LESSEE pursuant to Articles 7.2.6 and 9.1 will be reassigned automatically to LESSOR or its designee except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. At LESSOR’s election, LESSEE’s rights under such warranties (including LESSEE’s claims and rights to payment thereunder) will revert to LESSOR during any period in which an Event of Default is continuing. Similarly, any additional warranties received by LESSEE from Manufacturer, the Engine Manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will be automatically assigned by LESSEE to LESSOR or its designee on the Termination Date except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. LESSEE at its own cost and expense will do all such things and execute such documents as may be required for these purposes.
9.3 Warranty Claims . LESSEE will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft.

	 	32	 	ARTICLE 9	
	 		 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	

 	ARTICLE 10	OPERATION OF AIRCRAFT	
10.1 Costs of Operation . LESSEE will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft.
10.2 Compliance with Laws . Except as otherwise explicitly provided in this Lease, LESSEE agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which LESSEE may operate. LESSEE will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or country if so doing would cause LESSEE or LESSOR to be in violation of any Law applicable to either of them or the Aircraft, except as may be reasonably required to preserve the Aircraft or the safety, well being or life of passengers or crew; provided, however, in such case, LESSEE shall immediately notify LESSOR and undertake its best efforts to remove the Aircraft from such airport or country as soon as reasonably possible.
10.3 Training . LESSEE will not use the Aircraft for testing or for training of flight crew members other than LESSEE crew members and will not use the Aircraft for training any more than it utilizes for training the other aircraft in its fleet.
10.4 No Violation of Insurance Policies . LESSEE will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies LESSEE is required to carry and maintain as set forth in this Lease. LESSEE will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit any such insurance policies.
10.5 Flight and Airport Charges .
 
10.5.1	LESSEE will pay promptly when due all airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges due and payable by LESSEE for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law, so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.	

	  	33	  	ARTICLE 10	
	  		  	OPERATION OF AIRCRAFT	

10.5.2	If requested in writing by LESSOR (but not more frequently than twice annually, unless a Default or Event of Default shall have occurred and be continuing), LESSEE will provide LESSOR with a list of the airports to which LESSEE regularly operates the Aircraft or its other aircraft (in the event that the operation of such other aircraft may reasonably be expected to give rise to a lien on the Aircraft for landing, navigation, parking, storage or similar charges). LESSEE hereby authorizes Eurocontrol (if applicable) or another aviation authority or airport or creditor claiming or threatening to claim a Security Interest in the Aircraft to confirm the status of LESSEE’s payments to such creditor in respect of navigation, landing, parking, storage and similar charges for the Aircraft and its other aircraft, to the extent that the failure to make any payment in respect of such other aircraft has or might give rise to a Security Interest in the Aircraft, as and when requested by LESSOR.	

	  	34	  	ARTICLE 10	
	  		  	OPERATION OF AIRCRAFT	

 	ARTICLE 11	SUBLEASES	
11.1 No Sublease without LESSOR Consent . LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD) AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND LESSEE. NO SUBLEASING OF AN ENGINE WILL BE PERMITTED.
11.2 LESSOR Costs . LESSEE will indemnify LESSOR on demand for all reasonable out-of-pocket expenses (including legal fees) incurred in connection with LESSOR’s assessment of the subleasing proposal (whether or not LESSOR’s consent to such sublease is ultimately given) and implementation of the sublease.
11.3 Permitted Sublessees . LESSOR hereby acknowledges that upon a request by LESSEE for a sublease in accordance with this Article 11 to one of the following entities, LESSOR shall consent to such sublease, such consent not to be unreasonably withheld or delayed: TACA International Airlines, S.A.; Lineas Aereas Costarricenses, S.A.; AVIATECA, S.A.; TACA Costa Rica, S.A.; and Trans American Airlines, S.A. (d/b/a TACA PERU); provided, however, that at the time of such consent such entity has not suffered such a material deterioration in its condition such that a sublease to it would reasonably be expected to result in the operation or maintenance of the Aircraft in contravention of one or more terms of this Lease, and that nothing herein shall limit the terms and requirements otherwise set forth in this Article 11.
11.4 Any Approved Sublease . Any sublease approved by LESSOR will be for a term no greater than the remaining Lease Term. The applicable sublease agreement will contain provisions consistent with this Lease protecting LESSOR’s title to the Aircraft, providing appropriate LESSOR disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease will be subject and subordinate to this Lease. LESSOR will have an opportunity to review the proposed sublease agreement in advance in order to determine that it meets the requirements of this Article 11.4. In its sole discretion, LESSOR may require an opinion of counsel in connection with such sublease, including LESSOR’s right to repossess the Aircraft in the event of an Event of Default hereunder and LESSEE’s and LESSOR’s rights to repossession in the case of an event of default under such sublease. LESSEE will not amend the terms of any approved sublease agreement without the prior written consent of LESSOR, which will not be unreasonably withheld.
11.5 Assignment of Sublease . Any approved sublease will be assigned to LESSOR as security. LESSEE will deliver the original counterpart of the sublease to LESSOR and make any filings necessary to protect LESSOR’s security interest.

	  	35	  	ARTICLE 11	
	  		  	SUBLEASES	

11.6 Application of Cape Town Convention . At LESSOR’s request, LESSEE will cause such sublease and LESSEE’s assignment of such sublease to LESSOR to be registered in the International Registry to the fullest extent such interests may be registered. In addition, LESSEE will obtain in favor of LESSOR a power of attorney from the approved sublessee for purposes of the Cape Town Convention in the form of Exhibit I.
11.7 Wet Leases . The wet leasing of the Aircraft during the Lease Term (in which LESSEE and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without LESSOR’s consent, provided that (i) the Aircraft remains registered in the State of Registration, (ii) the Aircraft will neither be based in nor operated in or to a Prohibited Country, (iii) LESSEE provides LESSOR with either a certified copy of the applicable provisions from the wet lease agreement or an officer’s certificate confirming that LESSEE or the wet lessee will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the wet lease unless LESSEE shall be responsible under the Wet Lease for maintaining the same and (iv) LESSEE complies with Article 18.10.
11.8 Continued Responsibility of LESSEE . LESSEE will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.

	  	36	  	ARTICLE 11	
	  		  	SUBLEASES	

 	ARTICLE 12	MAINTENANCE OF AIRCRAFT	
12.1 General Obligation . During the Lease Term and until the Termination Date, LESSEE alone has the obligation, at its expense, to maintain and repair the Aircraft, Engines, APU and all of the Parts (i) in accordance with the Maintenance Program, (ii) in accordance with the rules and regulations of the Aviation Authority, (iii) in accordance with Manufacturer’s type design, (iv) in accordance with any other regulations or requirements necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft and meet the requirements at all times during the Lease Term and upon return of the Aircraft to LESSOR for issuance of a Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 (except during those periods when the Aircraft is undergoing maintenance or repairs as required or permitted by this Lease and to the extent in conflict with the requirements of the Aviation Authority) and (v) in the same manner and with the same care as used by LESSEE with respect to similar aircraft and engines operated by LESSEE and without in any way discriminating against the Aircraft as compared to such other aircraft.
12.2 Specific Engine Requirements .
 
12.2.1	No Engine will remain in an unserviceable condition for more than three (3) months, unless engine restoration or repair is ongoing and has not been suspended or delayed without reasonable cause and LESSEE is using commercially reasonable efforts to cause such Engine to be returned to service.	
 
12.2.2	When replacing Parts in an Engine, LESSEE will use original equipment manufacturer parts (“ OEM Parts ”). If LESSEE wishes to replace Parts in an Engine with parts which are not OEM Parts, LESSEE must obtain approval from LESSOR before such parts are installed, such approval not to be unreasonably withheld or delayed. If given, LESSOR’S approval will generally be given only for the installation of parts manufactured in accordance with FAR Part 21.303 (or its EASA equivalent) (“ PMA Parts ”) which are consumable parts such as brackets, gaskets and seals. The use of stationary and high energy rotating PMA Parts in the gaspath will not be approved by LESSOR. Any proposed repair to an OEM Part or PMA Part in an Engine which has been approved by an FAA Designated Engineering Representative (DER) must also be approved by LESSOR prior to performance of the repair, such LESSOR approval not to be unreasonably withheld or delayed.	
 
12.2.3	LESSEE will not discriminate against the Engines with respect to build standards and life-limited Part replacements. Without limiting the foregoing, at any shop visit during which a Qualified Performance Restoration is performed, LESSEE will (i) build the Engine life-limited Parts to at least 6,000 cycles remaining and (ii) perform, at a minimum, a workscope sufficient to allow such Engine to achieve at least 10,000 hours and 6,000 cycles of operation following such shop visit.	

	  	37	  	ARTICLE 12	
	  		  	MAINTENANCE OF AIRCRAFT	

12.2.4	With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will immediately notify LESSOR and the workscope will be submitted to LESSOR as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost; provided, however, that in the event that through no fault of LESSEE such work delays the return of the Aircraft to LESSOR or causes the Engine to be removed from LESSEE’s revenue service for a period in excess of the period the Engine would have been removed from revenue service had such additional work not been ordered, Article 23.13 shall be applicable and LESSEE and LESSOR will negotiate in good faith to expedite the return and minimize the costs incurred by the parties.	
 
12.2.5	LESSEE will not enter into any Engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine Manufacturer or any other Engine maintenance facility or organization without LESSOR’s prior written consent, which consent will not be unreasonably withheld or delayed. LESSEE will be responsible at its cost for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 23 even if such work is not covered by LESSEE’s Engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:	
(a) LESSOR will receive and retain the Engine Performance Restoration Reserves paid by LESSEE with respect to an Engine until an Engine shop visit has been completed and the applicable Engine has been released to LESSEE;
(b) LESSEE will pay the Engine maintenance facility directly for any costs in excess of the amount reimbursable from the Engine Performance Restoration Reserves, including any differential between the hourly Engine Performance Restoration Reserves payable by LESSEE to LESSOR and the hourly rates charged by the Engine maintenance facility; and
(c) LESSEE will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.
12.3 Specific Obligations . Without limiting Article 12.1, LESSEE agrees that such maintenance and repairs will include but will not be limited to the specific items set forth in this Article 12.3.

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12.3.1	LESSEE will perform all routine and non-routine maintenance work in accordance with the Maintenance Program.	
 
12.3.2	LESSEE will perform all applicable Airworthiness Directives, all mandatory service bulletins of Manufacturer, the Engine Manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft and all other service bulletins which must be performed in order to maintain the warranties on the Aircraft, Engines, APU and Parts.	
 
12.3.3	LESSEE will incorporate in the Aircraft all other service bulletins of Manufacturer, the Engine Manufacturer and other vendors which LESSEE schedules to adopt during the Lease Term for the rest of its Airbus A319 aircraft fleet. It is the intent of the parties that, in terms of service bulletin compliance (including method of compliance) and other maintenance matters, the Aircraft not be discriminated against in comparison to the rest of LESSEE’s fleet of similar aircraft unless LESSEE’s exclusion of the Aircraft is reasonable and occurs during the last year of the Lease Term.	
 
12.3.4	LESSEE’s Maintenance Program for the Aircraft will include a corrosion prevention and control program as recommended by Manufacturer and all discrepancies will be corrected in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
12.3.5	If LESSEE performs structural inspections or tasks on its Airbus A319 fleet on a sampling basis, then all such structural inspections or tasks will be performed on the Aircraft. LESSEE will provide LESSOR with written summaries of the sampling programs involving or affecting the Aircraft.	
 
12.3.6	All Aircraft Documentation will be in English or regularly translated into English and in an up-to-date status.	
 
12.3.7	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the time of most recent installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency which performed the last Overhaul or refurbishment.	

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12.3.8	All Parts other than those referred to in Article 12.3.7 installed on the Aircraft will have FAA-acceptable or EASA-acceptable documentation demonstrating that such Parts were airworthy at the time of most recent installation on the Aircraft.	
 
12.3.9	All repairs and Modifications and the addition, removal or replacement of equipment, systems or components will be properly documented in accordance with the rules and regulations of the Aviation Authority and reflected in the Aircraft Documentation, including Manufacturer’s manuals as required by such rules and regulations. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9). All Modifications will also be accomplished in accordance with FAA-approved data.	
12.4 Replacement of Parts .
 
12.4.1	LESSEE, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair (BER) for use for any reason. In the ordinary course of maintenance, service, repair, Overhaul or testing, LESSEE may remove any Part provided that LESSEE replaces such Part as promptly as practicable. All replacement Parts will (i) be owned by LESSEE free and clear of all Security Interests (except Permitted Liens) of any kind or description (or, if not owned by LESSEE, LESSEE guarantees to LESSOR such title and clearance of all Security Interests), (ii) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (iii) meet the requirements of Articles 12.3.7 or 12.3.8, as applicable. So long as a substitution meets the requirements of the Maintenance Program and Aviation Authority, LESSEE may substitute for any Part a part that does not meet the requirements of the foregoing sentence if a complying Part cannot be procured or installed within the available ground time of the Aircraft and as soon as practicable having due regard to LESSEE’S operations, the noncomplying part is removed and replaced by a complying Part. Any replacement Parts will also comply with the requirements set forth in Article 12.2.2.	
 
12.4.2	All Parts removed from the Aircraft will remain the property of LESSOR and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Aircraft) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to LESSOR under the Laws of the State of Registration and the lex situs . To the extent permitted by the Laws of the State of Registration and the lex situs , it is the intent of LESSOR and LESSEE that	

	  	40	  	ARTICLE 12	
	  		  	MAINTENANCE OF AIRCRAFT	

 	without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Aircraft as above provided, (i) title to the removed Part will thereupon vest in LESSEE, free and clear of all rights of LESSOR, (ii) title to the replacement Part will thereupon vest in LESSOR free and clear of all rights of LESSEE and (iii) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Aircraft.	
12.5 Removal of Engines .
 
12.5.1	If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or any other reason, title to such Engine will at all times remain vested in LESSOR.	
 
12.5.2	LESSEE will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(1) the insurance requirements set forth in Article 18 and Exhibit C are in place;
(2) LESSEE ensures that the identification plates referred to in Article 15 are not removed from any Engine upon such Engine being detached from the Aircraft; and
(3) title to the Engine remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the Engine or its attachment to or detachment from the Aircraft.
12.6 Removal of APU .
 
12.6.1	If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or for any other reason, title to the APU will at all times remain vested in LESSOR.	
 
12.6.2	LESSEE will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that LESSEE complies with each of the following obligations:	
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place; and
(b) title to the APU remains with LESSOR free from all Security Interests (except Permitted Liens) regardless of the location of the APU or its attachment to or detachment from the Aircraft.

	  	41	  	ARTICLE 12	
	  		  	MAINTENANCE OF AIRCRAFT	

12.7 Pooling of Engines, APU and Parts . With LESSOR’s prior written consent, not to be unreasonably withheld or delayed, LESSEE may subject the Engines, APU and Parts to normal interchange or pooling agreements with responsible international, scheduled commercial air carriers customary in the airline industry and entered into by LESSEE in the ordinary course of its business with respect to its entire Airbus A319 fleet so long as (i) in the case of pooling of an Engine or the APU, such Engine or APU is returned to LESSEE within two (2) months, (ii) no transfer of title to the Engine or APU occurs, (iii) all other terms of this Lease continue to be observed with respect to the Engines, APU or Parts, including Articles 8, 10, 12, 14, 15, 16, 17, 18 and 19 and (iv) LESSEE continues to be fully responsible to LESSOR for the performance of all of its obligations hereunder.
12.8 Installation of Engines on other aircraft . Any Engine removed from the Aircraft may be installed on another aircraft in LESSEE’s fleet which utilizes engines of the same type as the Engine only if one of the situations described in this Article 12.8 exists:
 
12.8.1	LESSEE or LESSOR has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).	
 
12.8.2	LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter into an engines cooperation, recognition of rights or similar agreement in form and substance acceptable to LESSOR acting reasonably in which each party agrees to recognize one another’s rights in the engines. LESSEE will reimburse LESSOR and LESSOR’s Lender for their reasonable attorneys’ fees and reasonable documented costs in negotiating and finalizing engine cooperation agreement arrangements with LESSEE and its Creditors.	
 
12.8.3	Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor and its successors and assigns will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft. LESSEE hereby agrees that if LESSOR’s title to an Engine is in fact impaired under any such Creditor Agreement, such impairment will be a Total Loss of such Engine and the provisions of Article 19.5 will apply. To the extent another Creditor Agreement contains such provisions, then LESSOR hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither LESSOR nor its successors or assigns will acquire or claim any right, title or interest in any engine in which LESSEE or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any airframe of such Creditor on which an Engine is installed.	

	  	42	  	ARTICLE 12	
	  		  	MAINTENANCE OF AIRCRAFT	

12.9 Modifications .
 
12.9.1	No modification, alteration or addition to or removal from the Aircraft (“ Modification ”) expected to cost over ***** or deviation from the Aircraft’s original type design or configuration will be made without the prior written consent of LESSOR, which consent will not be unreasonably withheld or delayed. Airworthiness Directives, Manufacturer’s service bulletins and other mandatory orders and service bulletins, compliance with which are required under this Lease, will not constitute “Modifications” and will not require LESSOR consent.	
 
12.9.2	LESSOR may review LESSEE’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by LESSOR, LESSEE will furnish LESSOR (at LESSEE’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All modifications incorporated on the Aircraft will be properly documented in the Aircraft Documentation as required by and shall, if required, be approved by the FAA and the Aviation Authority. All Modifications will also be accomplished in accordance with FAA and Aviation Authority-approved data. All major modifications will be supported by an STC FAA Form 8100-9 or FAA Form 8110-3.	
 
12.9.3	Notwithstanding any other provision of this Lease, no modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.	
 
12.9.4	No modification will be made by LESSEE if an Event of Default exists and is continuing hereunder.	
 
12.9.5	Unless otherwise agreed by LESSOR in writing, all permanent or structural modifications will forthwith become a part of the Aircraft and LESSEE relinquishes to LESSOR all rights and title thereto. However, all temporary and non-structural modifications will remain the property of LESSEE and, at LESSOR’s request and LESSEE’s cost, will be removed from the Aircraft prior to return of the Aircraft, with LESSEE restoring the Aircraft to the condition it was in prior to the modification in a manner cosmetically acceptable to LESSOR acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without LESSOR’s permission after the occurrence of an Event of Default hereunder and immediately upon the occurrence and during the continuance of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such modifications will immediately vest in LESSOR unless and until such Event of Default is cured to LESSOR’s reasonable satisfaction.	
 
12.9.6	LESSOR will bear no liability for the cost of modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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	  		  	MAINTENANCE OF AIRCRAFT	

12.10 Performance of Work by Third Parties .
 
12.10.1	All off-wing maintenance and repair work on an Engine, the APU and the Landing Gear must be performed by an FAA-approved repair station unless otherwise approved in advance by LESSOR.	
 
12.10.2	Whenever maintenance or repair work on the Airframe or on-wing maintenance or repair work on an Engine or the APU will be performed by a Person other than LESSEE, such Person must be an FAA-approved repair station.	
12.11 Reporting Requirements .
 
12.11.1	Commencing with a report furnished ten (10) days after the end of the calendar month in which Delivery occurs, LESSEE will furnish to LESSOR a Monthly Report in English in the form attached hereto as Exhibit M. Each Monthly Report will be furnished within ten (10) days after the end of each calendar month, except that the Monthly Report pertaining to the last month (or any portion thereof) of flying will be furnished to LESSOR on the Termination Date.	
 
12.11.2	On each anniversary of the Delivery Date, following each twenty (20)-month period during the Lease Term, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.	
 
12.11.3	From time to time, LESSEE will provide LESSOR with such other technical information or documents as LESSOR may reasonably request.	
12.12 Maintenance Policies and Procedures Manuals . At LESSOR’s request for the purposes of demonstrating to LESSOR how the Aircraft has been maintained, LESSEE at reasonable times without disruption of its operations and not more often that once annually, provide LESSOR, at LESSOR’s cost (unless an Event of Default has occurred and is continuing), with on site access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of the LESSEE and that the same will be only utilized as set forth in this Article 12.12 and Article 23.6.
12.13 LESSOR Inspection Rights .
 
12.13.1	At any time (subject to Article 12.13.4), LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) will have the right to inspect and take photographs of the Aircraft and review the Aircraft Documentation.	

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12.13.2	LESSEE will give LESSOR reasonable written notice before the Aircraft undergoes any “C’ or equivalent check.	
 
12.13.3	If the Aircraft is at a third party maintenance facility, LESSEE will use reasonably efforts to cause such facility to allow LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) to inspect and take photographs of the Aircraft and review the Aircraft Documentation, notwithstanding the fact that LESSEE (as the party opening the work order) is considered the “customer” of such facility, subject, in each case, to the rules, regulations and conditions of such maintenance facility and compliance by LESSOR and/or its authorized representatives or agents therewith.	
 
12.13.4	LESSOR will provide LESSEE with reasonable notice prior to any inspection by LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) and will coordinate with LESSEE and/or any applicable third party maintenance facility so as to cause minimum practical disturbance to the operation or maintenance of the Aircraft or the personnel of LESSEE or the applicable third party maintenance facility.	
 
12.13.5	In the event that LESSOR disagrees with or otherwise disputes any information provided by LESSEE with respect to the Aircraft (unless LESSOR reasonably believes that LESSEE would not provide the information), LESSEE expressly authorizes and consents to allowing Manufacturer, the Engine Manufacturer and their field service representatives to provide LESSOR with information about the condition and maintenance of the Aircraft (including the Aircraft Documentation) on an ongoing basis. Manufacturer, the Engine Manufacturer and their field service representatives may report their findings and provide documentation to LESSOR without the need for any further notice to or authorization from LESSEE.	
 
12.13.6	LESSOR will have no duty to make any inspection of the Aircraft and will not incur any liability or obligation by reason of (and LESSEE’s indemnity obligations pursuant to Article 17 will apply notwithstanding) LESSOR and/or its authorized agents or representatives making or not making any such inspection or by reason of any reports LESSOR receives regarding the Aircraft.	

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 	ARTICLE 13	USE OF RESERVES	
13.1 Airframe Reserves (6 Year Check) . LESSOR will reimburse LESSEE the Airframe Reserves (6 Year Check) that have accrued in such account from Delivery to the commencement date of the “6Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.2 Airframe Reserves (12 Year Check) . In the event that LESSEE performs a “12Y” check on the Aircraft (including as part of a Return Check pursuant to Article 23.10.1), LESSOR will reimburse LESSEE ninety percent (90%) of the Airframe Reserves (12 Year Check) and Airframe Reserves (6 Year Check) that have accrued and remain in such accounts on the commencement date of the “12Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.3 Engine Performance Restoration Reserves . LESSOR acknowledges that LESSEE has entered into a maintenance cost per flight hour agreement with the Engine Manufacturer (the “ FHA Agreement ”). LESSEE acknowledges that it is required under this Lease to pay to LESSOR the Engine Performance Restoration Reserves even if the Engines are placed under the FHA Agreement. With respect to each Engine, LESSOR will reimburse LESSEE from the Engine Performance Restoration Reserves as follows.
 
13.3.1	For the first Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the total hours that such Engine has accumulated during the Lease Term times ***** per Engine flight hour.	
 
13.3.2	For the second Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the amount present (at the time of removal of the Engine) in the particular Engine Performance Restoration Reserves account for such Engine.	
 
13.3.3	For the avoidance of doubt, the reimbursements shall remain subject to Article 16.1.	
13.4 Engine LLP Reserves . LESSOR will reimburse LESSEE from the Engine LLP Reserves for an Engine for the actual out-of-pocket materials cost without overhead, mark-up or profit factor, and reduced by the amount of any “Waste Expense” (if applicable), associated with the replacement of life-limited Parts in such Engine during completed Engine shop visits (i.e. heavy maintenance visits), with work performed for all other causes excluded, including those causes set forth in Article 13.8. “ Waste Expense ” means the product of (i) the number of unused cycles on a life-limited Part that is in excess of 10% of such part’s approved life when new, at the time such life-limited Part is removed for replacement, multiplied by (ii) the quotient of the cost of the new replacement life-limited Part divided by the number of cycles which
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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	  		  	USE OF RESERVES	

constitutes the approved life of such life-limited Part. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement for replacement of life-limited Parts in an Engine will be made up to the amount in the Engine LLP Reserves applicable to such Engine at the time of removal of such Engine.
13.5 Landing Gear Reserves . LESSOR will reimburse LESSEE ninety percent (90%) of the Landing Gear Reserves that have accrued in such account from Delivery to the commencement date of the Overhaul of the Landing Gear for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.
13.6 APU Reserves . LESSOR will reimburse LESSEE from the APU Reserves for the actual cost of a completed medium or heavy repair workscope in accordance with the APU manufacturer’s approved manuals, with work performed for all other causes excluded, including those causes set forth in Article 13.8. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement will be made up to the amount in the APU Reserves at the time of removal of the APU.
13.7 Reimbursement .
 
13.7.1	LESSEE will be entitled to reimbursement from the Reserves after the work is completed and the Airframe, Engine, Landing Gear or APU, as applicable, has left the repair agency, by submitting reasonable evidence (which shall include the items below) of performance of such work and, if requested by LESSOR, an invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim within six (6) months after completion of the work. If LESSEE seeks reimbursement from the Reserves for work performed by LESSEE, such work will be charged at LESSEE’s out-of-pocket and unburdened labor and material costs. LESSEE may only seek reimbursement from the Airframe Reserves one time in any calendar year.	
 
13.7.2	For the Airframe, reasonable evidence of performance includes a list of all routine and non-routine tasks performed with corresponding references to the MPD and an itemized labor and materials report.	
 
13.7.3	For an Engine and the APU, reasonable evidence of performance includes (i) an original invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim, (ii) a description of the reason for removal, (iii) the date of removal and the aircraft removed from (which may be the Aircraft), (iv) the total hours and cycles at the time of removal, (v) the hours and cycles since last shop visit, (vi) a full description of the final workscope, (vii) a description of the type of maintenance performed (including on each module, if applicable), (viii) complete disk records for the Engine both prior to and after the shop visit, (ix) a shop findings report, (x) a copy of any test cell performance data, (xi) an on and off log of Parts (configuration	

	  	47	  	ARTICLE 13	
	  		  	USE OF RESERVES	

 	listing) tracked by LESSEE and the repair facility, (xii) a current service bulletin and Airworthiness Directive listing, (xiii) written verification from the repair facility that the Engine or APU has been released and shipped from the repair facility back to LESSEE, (xiv) the status of all warranty claims and (xv) an itemization of all concessions, warranty credits or other credits which have been or will be provided for work accomplished on the Engine or APU during the applicable shop visit (or, if none, a written statement from LESSEE stating that it has not received and does not have pending any such concessions, warranty credits or other credits).	
 
13.7.4	For the Landing Gear, reasonable evidence of performance includes (i) a release tag from the overhaul facility and all associated build records, including traceability on all life-limited parts, and (ii) the total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul.	
13.8 Reimbursement Adjustment .
 
13.8.1	By way of example, among the exclusions from reimbursement are work or items:	
(a) resulting from repairs actually covered by LESSEE’s or a third party’s insurance (deductibles being for the account of LESSEE and not reimbursable) or covered by warranties to the extent of recovery by LESSEE under such insurance or warranties; or
(b) required as a result of an Airworthiness Directive, manufacturer’s service bulletin (unless approved in advance by LESSOR, which approval will not be unnecessarily withheld or delayed), negligence, non-routine or non-scheduled maintenance, faulty maintenance or installation, improper operations, misuse, accident, incident, ingestion (foreign object damage) or other accidental cause.
 
13.8.2	All invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible third parties or other sources, such as insurance proceeds, manufacturer’s warranties, guarantees, concessions and credits (including, with respect to Engines, credits due to life remaining on any removed Engine Parts). Notwithstanding anything to the contrary herein, in the event that any accident, incident, injection incident or other accidental cause necessitates a repair and during such repair the workscope performed results in performance restoration to the Engine or installation of LLPs with more life remaining, the performance of such workscope may be claimed by LESSEE from the Engine Performance Restoration Reserves and/or Engine LLP Reserves.	

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	  		  	USE OF RESERVES	

13.9 Costs in Excess of Reserves . LESSEE will be responsible for payment of all costs in excess of the amounts reimbursed hereunder. If on any occasion the available balance in the Airframe Reserves, Engine Performance Restoration Reserves for a particular Engine, Engine LLP Reserves for a particular Engine, Landing Gear Reserves or APU Reserves (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the Landing Gear and the APU) is insufficient to satisfy a claim for reimbursement in respect of the Airframe, such Engine, the Landing Gear or the APU, as applicable, the shortfall may not be carried forward or made the subject of any further claim for reimbursement.
13.10 Reimbursement after Termination Date . LESSEE may not submit any invoice for reimbursement from the Reserves after the Termination Date unless on or prior to such date LESSEE has notified LESSOR in writing that such outstanding invoice will be submitted after the Termination Date and the anticipated amount of such invoice. So long as LESSEE has provided such notice to LESSOR, LESSEE may then submit such outstanding invoice at any time within six (6) months after the Termination Date. Subject to the foregoing, any balance remaining in the Reserves on the Termination Date, including termination on account of a Total Loss of the Aircraft, will be retained by LESSOR.
13.11 Total Loss . Upon receipt by LESSOR of the Agreed Value and all other amounts then due by LESSEE, LESSOR shall return to LESSEE fifty percent (50%) of all amounts then held by LESSOR as reserves. In the event of a Total Loss and payment of the Agreed Value in accordance with the terms of this Article 13.11, LESSEE agrees that no invoices to LESSOR will be reimbursed.

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 	ARTICLE 14	TITLE AND REGISTRATION	
14.1 Title to the Aircraft . Title to the Aircraft will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a “true lease”. LESSEE will have no right, title or interest in the Aircraft except as provided in this Lease.
14.2 Registration of Aircraft . LESSEE at its sole cost and expense will (i) register and maintain registration of the Aircraft in the name of LESSOR at the register of aircraft in the State of Registration and (ii) from time to time take all other steps then required by Law (including the Geneva Convention or the Cape Town Convention if and as applicable) or as LESSOR may reasonably request to protect and perfect LESSOR’s interest in the Aircraft and this Lease in the State of Registration or in any other jurisdictions in or over which LESSEE may operate the Aircraft.
14.3 Cape Town Convention . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then:
 
14.3.1	LESSOR may elect to cause the interests of LESSOR in this Lease, the other Operative Documents and the Aircraft (including in the Engines) to be registered in the International Registry to the fullest extent such interests may be registered. At LESSOR’s request, LESSEE will provide reasonable assistance and cooperation to LESSOR in order to procure such registration, including consenting to or causing such registration to be made, at LESSOR’s election, as a prospective international interest or an international interest and via a designated entry point (as such terms are used in the Cape Town Convention).	
 
14.3.2	At LESSOR’s request, LESSEE will perform such additional acts and execute and deliver such agreements and instruments as may be reasonably determined by LESSOR to be necessary or appropriate to (i) protect and perfect LESSOR’s interest in the Aircraft, this Lease and the other Operative Documents under the Cape Town Convention and (ii) enhance the enforceability of the commercial agreements of LESSEE and LESSOR under the Cape Town Convention to the greatest extent permitted by the Cape Town Convention. Actions to be requested by LESSOR may include entering into amendments to this Lease or the other Operative Documents as are necessary to constitute a prospective international interest or an international interest under the Cape Town Convention.	
 
14.3.3	Unless LESSEE obtains LESSOR’s prior written consent, LESSEE undertakes that it will not consent to or permit any Person other than LESSOR and LESSEE (as permitted under this Lease) to make any International Registry filings (including prospective filings) under the Cape Town Convention in relation to this Lease, the other Operative Documents or the Aircraft (including the Engines).	
 
14.3.4	LESSEE will be responsible for all costs and expenses arising out of the requirements of this Article 14.3.	

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	  		  	TITLE AND REGISTRATION	

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

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	  		  	TITLE AND REGISTRATION	

 	ARTICLE 15	IDENTIFICATION PLATES	
LESSOR will affix and LESSEE will at all times maintain on the Airframe and each Engine the identification plates containing the following legends or any other legend requested by LESSOR in writing:
15.1 Airframe Identification Plates .

Location:	  	One to be affixed to the Aircraft structure above the forward entry door adjacent to and not less prominent than that of Manufacturer’s data plate and another in a prominent place on the flight deck.	
		
Size:	  	No smaller than 2” x 3”.	
		
Legend:	  	“THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION.	
		
	  	MANUFACTURER’S SERIAL NO:        {MSN of Aircraft}	
		
	  	OWNER’S ADDRESS:	
		
	  	INTERNATIONAL LEASE FINANCE CORPORATION	
	  	10250 Constellation Boulevard, 34th Floor	
	  	Los Angeles, California 90067, U.S.A.	
		
	  	Fax: (310) 788-1990”	
15.2 Engine Identification Plates .

Location:	  	The legend on the plate must be no less prominent than the Engine data plate and must be visible.	
		
Size:	  	No smaller than 1” x 4”.	
		
Legend:	  	“THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION, LOS ANGELES, CALIFORNIA, USA.”	

	  	52	  	ARTICLE 15	
	  		  	IDENTIFICATION PLATES	

 	ARTICLE 16	TAXES	
16.1 General Obligation of LESSEE . Except as set forth in Article 16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless LESSOR on a full indemnity basis from, all license and registration fees and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon LESSEE, LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority in the U.S., Mexico or any foreign country or by any international taxing authority (including the City or County of Los Angeles), upon or with respect to, based upon or measured by any of the following (collectively, “ Taxes ”):
(a) the Aircraft, Engines, APU or any Parts;
(b) the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;
(c) this Lease, the payments due hereunder and the terms and conditions hereof; and
(d) the ownership, financing, delivery, import or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.
16.2 Exceptions to Indemnity . The indemnity provided for in Article 16.1 does not extend to any of the following Taxes:
(a) Taxes imposed by the U.S. or the State of California or the City or County of Los Angeles on the gross or net income, gross receipts, gains, profits, capital or net worth of LESSOR;
(b) Taxes attributable to the period prior to Delivery or after the Termination Date;
(c) Taxes attributable to LESSOR’s gross negligence, willful misconduct or breach of this Lease or any other agreement, document or instrument entered into and/or delivered in connection herewith by or between LESSOR and LESSEE (unless such breach was caused by an act or omission by LESSEE);
(d) Taxes imposed upon LESSOR by any jurisdiction which would have been imposed upon LESSOR had LESSOR and LESSEE not entered into and

	  	53	  	ARTICLE 16	
	  		  	TAXES	

consummated the transactions contemplated by this Lease and other Taxes imposed upon LESSOR as a result of any past, present or future activities of LESSOR in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;
(e) Taxes imposed upon LESSOR as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Person claiming by or through LESSOR of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease;
(f) Taxes attributable to a LESSOR’s Lien, to the extent that such Taxes would not have arisen or been assessed in the absence of a LESSOR’s Lien;
(g) Taxes or additional or incremental Taxes and penalties or interest thereon that would not have been imposed but for a failure of LESSOR to provide, following a reasonable request therefor, information necessary for LESSEE to complete and file any tax return or request an otherwise legally available exemption or which result from any failure by LESSOR to file any return which LESSOR is required by Law to file in respect of any such Tax; but only if such information was reasonably available to LESSOR and, in the case of certificates, documentation or other evidence requiring disclosure of knowledge of factual information (such as the location of an Aircraft) that is known to LESSEE but not readily ascertainable by such LESSOR, only if LESSEE provides such information to LESSOR in a timely manner and at LESSEE’s cost;
(h) Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Tax under this Article 16 or Article 25.6, Taxes for which LESSOR actually receives payment from LESSEE for under any provision of this Lease and the payment of which would otherwise constitute a double recovery;
(i) Taxes which are not yet due or are being contested in good faith by LESSOR or any Person claiming by or through LESSOR by appropriate proceedings, during the pendency of such proceedings; or
(j) Taxes which constitute the normal operating expense or overhead of LESSOR.
16.3 After-Tax Basis . The amount which LESSEE is required to pay with respect to any Taxes indemnified against under Article 16.1 is an amount sufficient to restore LESSOR on an after-tax basis to the same position LESSOR would have been in had such Taxes not been incurred.

	  	54	  	ARTICLE 16	
	  		  	TAXES	

16.4 Timing of Payment . Any amount payable to LESSOR pursuant to this Article 16 will be paid within ten (10) Business Days after receipt of a written demand therefor from LESSOR accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable; provided, however, that such amount need not be paid by LESSEE prior to the earlier of (i) the date any Tax is payable to the appropriate Government Entity or taxing authority or (ii) in the case of amounts which are being contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such contest is finally resolved.
16.5 Contests . If a claim is made against LESSOR for Taxes with respect to which LESSEE is liable for a payment or indemnity under this Lease, LESSOR will promptly give LESSEE notice in writing of such claim; provided, however, that LESSOR’s failure to give notice will not relieve LESSEE of its obligations hereunder except to the extent such failure materially impairs or precludes LESSEE’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay. So long as (i) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, (ii) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of independent tax counsel that a reasonable basis exists for contesting such claim and (iii) adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted, then LESSOR at LESSEE’s written request will in good faith, with due diligence and at LESSEE’s expense, contest (or permit LESSEE to contest in the name of LESSEE or LESSOR) the validity, applicability or amount of such Taxes.
16.6 Refunds . Upon receipt by LESSOR of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 5.8) which LESSEE has paid, LESSOR will pay to LESSEE the net amount of such Taxes refunded.
16.7 Cooperation in Filing Tax Returns . LESSEE and LESSOR will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.
For the avoidance of doubt, LESSEE will for purposes of the calculation and its payment of the Mexican assets tax (including without limitation Article 25 of the Assets Tax Law Regulation), elect to treat its rights on the Aircraft pursuant to this Lease as an “asset”.
16.8 Survival of Obligations . The representations, warranties, indemnities and agreements of LESSEE provided for in this Article 16 will survive the Termination Date.

	  	55	  	ARTICLE 16	
	  		  	TAXES	

 	ARTICLE 17	INDEMNITIES	
17.1 General Indemnity . Except as set forth in Article 17.2, LESSEE agrees to indemnify and hold harmless LESSOR and its officers, directors, employees, agents and shareholders (individually an “ Indemnitee ” and collectively “ Indemnitees ”) from any and all liabilities, obligations, losses, damages, fines, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “ Expenses ”) which are imposed on, incurred by or asserted against any Indemnitee or the Aircraft by any Person other than LESSEE and which are in any way relating to, based on or arising out of any of the following:
(a) the operation, possession, use, non-use, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by LESSEE, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;
(b) fuel, airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges payable for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, during the Lease Term and until the Termination Date;
(c) the manufacture, design, acceptance, rejection, delivery, return, sale after an Event of Default, import, export, condition, repair, modification, servicing, rebuilding, enforcement of warranties whether in LESSOR’s or LESSEE’s name, customer support, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, reregistration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part, including under a pooling or interchange arrangement prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;
(d) the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or
(e) as a consequence of any Default or Event of Default by LESSEE, without duplication of remedies or recovery.

	  	56	  	ARTICLE 17	
	  		  	INDEMNITIES	

The foregoing indemnity by LESSEE is intended to include and cover any Expense to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Expense does not fall within any of the exceptions listed in Article 17.2.
17.2 Exceptions to General Indemnities . The indemnity provided for in Article 17.1 will not extend to Expenses of any Indemnitee to the extent resulting from or arising out of any of the following:
(a) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to have resulted from the willful misconduct of such Indemnitee;
(b) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to be attributable to acts or events which occur after the Termination Date and return of the Aircraft to LESSOR in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of LESSEE;
(c) Expenses representing Taxes, it being acknowledged that the terms of Article 16 apply exclusively to LESSEE’s indemnity obligations with respect to Taxes;
(d) Expenses due to the breach by LESSOR of its covenant of quiet enjoyment pursuant to Article 21.2 (except to the extent covered by the insurances LESSEE is required to carry pursuant to Article 18);
(e) Expenses which constitute ordinary and usual operating or overhead expenses of LESSOR or any other Indemnitee; or
(f) Expenses attributable to a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Indemnitee of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease.
17.3 After-Tax Basis . The amount which LESSEE will be required to pay with respect to any Expense indemnified against under Article 17.1 will be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the same position such Indemnitee would have been in had such Expense not been incurred.

	  	57	  	ARTICLE 17	
	  		  	INDEMNITIES	

17.4 Timing of Payment . It is the intent of the parties that each Indemnitee will have the right to indemnification for Expenses hereunder as soon as a claim is made and as soon as an Expense is incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17 within ten (10) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity.
17.5 Subrogation . Upon the payment in fall of any indemnity pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.
17.6 Notice . Each Indemnitee and LESSEE will give prompt written notice one to the other of any liability of which such party has knowledge for which LESSEE is, or may be, liable under Article 17.1; provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 17 except to the extent that LESSEE has been materially prejudiced by the failure to provide such notice.
17.7 Refunds . If any Indemnitee obtains a recovery of all or any part of any amount which LESSEE has paid to such Indemnitee, such Indemnitee will pay to LESSEE the net amount recovered by such Indemnitee.
17.8 Defense of Claims . Unless a Default or Event of Default has occurred and is continuing, LESSEE and its insurers will have the right (in each such case at LESSEE’s sole expense) to investigate or, provided that LESSEE or its insurers have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim covered by insurance for which indemnification is sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE or its insurers with respect thereto. If LESSEE or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at LESSEE’s expense.
17.9 No Double Recovery . Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Expense under both this Article 17 and Article 25.6, LESSOR will not be entitled to actually receive payment from LESSEE for the same Expense twice.
17.10 Survival of Obligation . Notwithstanding anything in this Lease to the contrary, the provisions of this Article 17 will survive the Termination Date and continue in full force and effect notwithstanding any breach by LESSOR or LESSEE of the terms of this Lease, the termination of the lease of the Aircraft to LESSEE under this Lease or the repudiation by LESSOR or LESSEE of this Lease.

	  	58	  	ARTICLE 17	
	  		  	INDEMNITIES	

 	ARTICLE 18	INSURANCE	
18.1 Categories of Insurance . Throughout the Lease Term and until the Termination Date, LESSEE will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through such brokers and with such insurers as may be acceptable to LESSOR, such acceptance not to be unreasonably withheld or delayed, in London or New York or such other insurance markets as mutually agreed upon by the parties.
18.2 Write-back of any Date Recognition Exclusion . In the event any of LESSEE’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000-related problems, LESSEE at its cost will obtain for the benefit of itself, and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusion.
18.3 Write-backs of LSW555 .D and AVN48C Exclusions . In the event that a write-back of the exclusions (losses due to causes such as dirty bombs, electromagnetic weapons, radioactive contamination and chemical, biological and/or biochemical hazards) to the standard London policy forms LSW555.D and, if issued, AVN48C becomes available at commercially reasonable terms, LESSEE at its cost will obtain through the benefit of itself and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusions to the extent and with policy limits consistent with general market practices applicable to similarly situated carriers or, if greater, as maintained in respect of any other aircraft of like make and model in LESSEE’s fleet.
18.4 Installation of Third Party Engine . If LESSEE installs an engine not owned by LESSOR on the Aircraft, either (1) LESSEE’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (2) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the LESSEE to such third party engine owner.
18.5 LESSOR Coverage for LESSEE’s Employees . LESSOR and the other additional insureds will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.
18.6 Insurance for Indemnities . The insurance referred to in Article 18.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 17 and LESSEE will maintain such insurance of the indemnities for a period of two (2) years following the Termination Date.

	  	59	  	ARTICLE 18	
	  		  	INSURANCE	

18.7 Insurance required by Manufacturer . During the Lease Term, LESSEE will carry any insurance required by Manufacturer in connection with the assignment of any Manufacturer warranties, customer support or product support to LESSEE.
18.8 Renewal . From time to time when reasonably requested by LESSOR, LESSEE will confirm to LESSOR regarding the status of the renewal or replacement of LESSEE’s insurance. Prior to or on the expiration or termination date of any insurance required hereunder, LESSEE will provide LESSOR with fax or e-mail confirmation from LESSEE’s insurance brokers that such insurance has been renewed or has been replaced in a manner consistent with the requirements hereof and that certificates of insurance evidencing the renewal or replacement of such insurance and complying with Exhibit C will be issued on the termination date of the prior certificate. Within seven (7) days after such renewal, LESSEE will furnish its brokers’ certificates of insurance to LESSOR.
18.9 Assignment of Rights by LESSOR . If LESSOR assigns all or any of its rights under this Lease or otherwise disposes of any interest in the Aircraft to any other Person, LESSEE will, upon written request, procure that such Person, in each case as permitted by this Lease, hereunder be added as loss payee and/or additional assured in the policies effected hereunder and, if applicable substituted as Loss Payee under the hull insurance and enjoy the same rights and insurance enjoyed by LESSOR under such policies. LESSOR will nevertheless continue to be covered by such policies.
18.10 Insurance for Wet Lease Operations . In the event LESSEE is performing wet lease operations with the Aircraft pursuant to Article 11.7 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance will meet the requirements of Exhibit C, including with respect to the amounts of coverage, naming of LESSOR as an additional insured and inclusion of the other endorsements described in Exhibit C. Moreover, LESSEE will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, LESSOR will receive certificates of insurance from the insurance brokers for LESSEE and, if applicable, the wet lessee evidencing such coverages.
18.11 Other Insurance . In the event of a material change in standard market practices with respect to air carriers similarly situated to LESSEE occurs following Delivery, LESSOR may, acting reasonably and upon consultation with LESSEE’s designated brokers and other LESSORS of Aircraft within LESSEE’s fleet from time to time by notice to LESSEE require LESSEE at LESSEE’s expense to effect such other insurance or such variations to the terms of the existing insurance as may then be customary in the airline industry for aircraft of the same type as the Aircraft operated by carriers similarly situated to LESSEE and at the time commonly available in the insurance market on commercially reasonable terms.

	  	60	  	ARTICLE 18	
	  		  	INSURANCE	

18.12 Information . LESSEE will provide LESSOR with any information reasonably requested by LESSOR from time to time concerning the insurance maintained with respect to the Aircraft or in connection with any claim being made or proposed to be made thereunder, except for information regarding insurance premiums and the level of insurance LESSEE has obtained above the requirements of this Lease, so long as such level is not in violation of this Lease.
18.13 Currency . All proceeds of insurance pursuant to this Lease will be payable in Dollars except as may be otherwise agreed by LESSOR.
18.14 Grounding of Aircraft . If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, LESSEE will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again.
18.15 Failure to Insure . If at any time LESSEE fails to maintain insurance in compliance with this Article 18, LESSOR will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):
(a) to pay any premiums due or to effect or maintain insurance satisfactory to LESSOR or otherwise remedy such failure in such manner as LESSOR considers appropriate (and LESSEE will upon demand reimburse LESSOR in full for any amount so expended in that connection); or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by LESSOR, until such failure is remedied to LESSOR’s satisfaction.
18.16 Reinsurance . Any reinsurance will be maintained with reinsurers and brokers acceptable to LESSOR, acting reasonably. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to LESSOR:
(a) the same terms as the original insurance;
(b) a cut-through and assignment clause satisfactory to LESSOR, acting reasonably; and
(c) payment will be made notwithstanding 1. any bankruptcy, insolvency, liquidation or dissolution of any of the original insurers and/or 2. that the original insurers have made no payment under the original insurance policies.
18.17 Limit on Hull in favor of LESSEE . LESSEE may carry hull all risks or hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to LESSOR) only to the extent such excess insurance which would be payable to LESSEE in the event of a

	  	61	  	ARTICLE 18	
	  		  	INSURANCE	

Total Loss does not exceed ten percent (10%) of the Agreed Value and only to the extent that such additional insurance will not prejudice the insurances required in this Lease or the recovery by LESSOR thereunder. LESSEE agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.

	  	62	  	ARTICLE 18	
	  		  	INSURANCE	

 	ARTICLE 19	LOSS, DAMAGE AND REQUISITION	
Throughout the Lease Term and until the Termination Date, LESSEE will bear all risk of loss, theft, damage and destruction to the Aircraft.
 
19.1	Definitions . In this Article 19 and this Lease:	
“ Agreed Value ” means an amount equal to seventy two percent (72%) of the Manufacturer’s list price for the Aircraft on the Delivery Date, based upon the invoice provided by Manufacturer; provided, however, that the Agreed Value will be decreased by 2% of such amount on each yearly anniversary of the Delivery Date.
“ Net Total Loss Proceeds ” means the Total Loss Proceeds actually received by LESSOR following a Total Loss, less any reasonable legal and other out-of-pocket expenses, taxes or duties incurred by LESSOR in connection with the collection of such proceeds.
“ Total Loss ” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “ Total Loss Date ” means the date set forth in parenthesis after each Total Loss:
(a) destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);
(b) actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or forty five (45) days after the date of notice to LESSEE’s brokers or insurers claiming such total loss);
(c) requisition of title, confiscation, forfeiture or any compulsory acquisition or other similar event (the date on which the same takes effect);
(d) sequestration, detention, seizure or any similar event for more than forty five (45) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);
(e) requisition for use for more than one hundred eighty (180) consecutive days, except as set forth in Article 19.9 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);
(f) in the case of an Engine, the event described in Article 12.8.3 (the date on which the same takes effect);

	  	63	  	ARTICLE 19	
	  	LOSS, DAMAGE AND REQUISITION	

(g) any sale of the Aircraft in connection with Eurocontrol or other navigation or airport charges (the date on which the sale occurs);
(h) any sale of the Aircraft in connection with a LESSEE bankruptcy, whether by an administrator, trustee or court (the date on which the intent to sell the Aircraft becomes known); or
(i) any other occurrence not permitted under this Lease which deprives LESSEE of use or possession for a period of sixty (60) consecutive days or longer (the 60 th day of such period).
“ Total Loss Proceeds ” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.
19.2 Notice of Total Loss . LESSEE will notify LESSOR in writing within two (2) Business Days after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.
19.3 Total Loss of Aircraft or Airframe . If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:
 
19.3.1	After the Total Loss Date and until receipt by LESSOR of the Agreed Value and all other amounts then due under this Lease, LESSEE will continue to pay Rent and the parties will perform all of their other obligations under this Lease.	
 
19.3.2	On the date which is the earlier of the following dates:	
(a) the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by LESSEE’s insurance underwriters or brokers and
(b) the date which falls thirty (30) days after the Total Loss Date,
LESSEE will pay to LESSOR an amount equal to the sum of:
(a) the Agreed Value and
(b) all other amounts then due and payable by LESSEE under this Lease,
less an amount equal to the Net Total Loss Proceeds received by LESSOR by such date.
 
19.3.3	LESSOR will apply the Net Total Loss Proceeds and any amounts received from LESSEE pursuant to Article 19.3.2 as follows:	
(a) first, in discharge of any unpaid Rent and any other amounts accrued and unpaid up to the date of LESSOR’s receipt of the Agreed Value;

	  	64	  	ARTICLE 19	
	  	LOSS, DAMAGE AND REQUISITION	

(b) second, in discharge of the Agreed Value; and
(c) third, payment of the balance, if any, to LESSEE.
 
19.3.4	Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3, provided no Default or Event of Default has occurred and is continuing, this Lease will terminate except for LESSEE’s obligations under Articles 10.5, 16 and 17 which survive the Termination Date.	
FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE, ENGINES OR THE APU.
19.4 Surviving Engine ( s ). If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of LESSEE (subject to agreement of relevant insurers) and on receipt of all monies due under Article 19.3 and payment by LESSEE of all airport, navigation and other charges on the Aircraft, LESSOR will transfer all its right, title and interest in the surviving Engine(s) to LESSEE, but without any responsibility, condition or warranty on the part of LESSOR other than as to freedom from any LESSOR’s Lien.
 
19.5	Total Loss of Engine and not Airframe .	
 
19.5.1	Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such Engine as soon as reasonably possible by duly conveying to LESSOR title to another engine from LESSEE (or another Person with a net worth at least equal to that of LESSEE) (i) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (ii) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the Engine which sustained the Total Loss, (iii) not older (by reference to serial number or manufacture date) than the older of the two Engines delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date, and (iv) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement engine will be an “Engine” as defined in this Lease and the Engine which sustained such Total Loss will cease to be an “Engine”.	

	  	65	  	ARTICLE 19	
	  	LOSS, DAMAGE AND REQUISITION	

19.5.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement Engine becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed Engine. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed Engine will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	
 
19.5.3	Notwithstanding Articles 19.5.1 and 19.5.2, if at the time of a Total Loss of an Engine not installed on the Aircraft or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSOR and LESSEE are parties to a spare engine lease pursuant to which LESSOR is leasing a spare engine to LESSEE of the same model and type as the Engine which has suffered such Total Loss, LESSOR will receive from LESSEE the replacement cost of the Engine instead of accepting a replacement engine. One (1) of such LESSOR spare engines will then be substituted under this Lease for the Engine which suffered such Total Loss and the applicable spare engine lease will terminate.	
 
19.6	Total Loss of APU .	
 
19.6.1	Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such APU as soon as reasonably possible by duly conveying or causing to be conveyed to LESSOR title to another auxiliary power unit (i) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (ii) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (iii) not older (by reference to serial number or manufacture date) than the APU delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date and (iv) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined in this Lease and the auxiliary power unit which sustained such Total Loss will cease to be the “APU”.	
 
19.6.2	LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement APU becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed APU. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed APU will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.	

	  	66	  	ARTICLE 19	
	  	LOSS, DAMAGE AND REQUISITION	

19.7	Other Loss or Damage .	
 
19.7.1	If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of LESSEE under this Lease (including payment of Rent) will continue in full force.	
 
19.7.2	In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, LESSEE will at its sole cost and expense fully and with reasonable promptness repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. All repairs will be performed in a manner which preserves and maintains all warranties and service life policies to the same extent as they existed prior to such loss or damage. LESSEE will notify LESSOR forthwith of any loss theft or damage to the Aircraft for which the cost of repairs is estimated to exceed ***** together with LESSEE’s proposal and timetable for carrying out the repair. In the event that LESSOR does not agree with LESSEE’s proposal for repair, LESSOR will so notify LESSEE within two (2) Business Days after its receipt of such proposal. LESSEE and LESSOR will then consult with Manufacturer and LESSEE and LESSOR agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, LESSEE will carry out the repairs in accordance with the directions of LESSOR. If the Aircraft is airworthy or the Engine or APU serviceable notwithstanding the loss or damage, LESSEE will repair such Aircraft, Engine or APU, as the case may be, within the time frame reasonably established by LESSOR given the circumstances.	
19.8 Copy of Insurance Policy . Promptly after the occurrence of a partial loss or Total Loss of the Aircraft, an Engine or the APU, LESSEE will provide LESSOR with a copy of LESSEE’s insurance policy, provided, however, that LESSEE may redact from such copy the commercial terms of its arrangement with the insurer.
19.9 Government Requisition . If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, LESSEE will promptly notify LESSOR of such requisition. All of LESSEE’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by LESSOR or LESSEE from such Government Entity will be paid over to or retained by LESSEE. If a Default or Event of Default has occurred and is continuing, all payments received by LESSEE or LESSOR from such Government Entity may be used by LESSOR to satisfy any obligations owing by LESSEE.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	67	  	ARTICLE 19	
	  	LOSS, DAMAGE AND REQUISITION	

 	ARTICLE 20	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	
20.1 Representations and Warranties . LESSEE represents and warrants the following to LESSOR as of the date of execution of this Lease and as of the Delivery Date:
 
20.1.1	Status . LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
20.1.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by LESSEE of this Lease, except as will have been duly effected as of the Delivery Date.	
 
20.1.3	Binding . LESSEE’s Board of Directors has authorized LESSEE to enter into this Lease, any Side Letters hereto and any other documentation in connection with the leasing of the Aircraft from LESSOR (collectively, the “ Operative Documents ”) and perform its obligations under the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by LESSEE and represent the valid and binding obligations of LESSEE, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	
 
20.1.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSEE of the transactions contemplated in this Lease and compliance by LESSEE with the terms and provisions hereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of LESSEE, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.	
 
20.1.5	Filings . Except for any filing or recording that may be required with the Aviation Authority, no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of the State of Registration or of Mexico in order for this Lease to constitute a valid and perfected lease of record relating to the Aircraft.	

	  	68	  	ARTICLE 20	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSEE	

20.1.6	Translation or Notarization . None of the Lease or any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.	
 
20.1.7	Licenses . LESSEE holds all licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.	
 
20.1.8	No Suits . There are no suits, arbitrations or other proceedings pending or to LESSEE’s knowledge threatened before any court or administrative agency against or affecting LESSEE which, if adversely determined, would have a material adverse effect on LESSEE or its ability to perform under this Lease, except as described in the filings provided to LESSOR pursuant to Article 22.	
 
20.1.9	No Withholding . Under the Laws of Mexico, LESSEE will not be required to deduct any withholding or other Tax from any payment it may make under this Lease.	
 
20.1.10	No Restrictions on Payments . Under the Laws of Mexico, there are no present restrictions on LESSEE making the payments required by this Lease.	
 
20.1.11	General Obligations . The obligations of LESSEE under this Lease are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by Law.	
 
20.1.12	No Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets is entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder constitute commercial acts done for commercial purposes.	
 
20.1.13	Tax Returns . All necessary returns have been delivered by LESSEE to all relevant taxation authorities in the jurisdiction of its formation and LESSEE is not in default in the payment of any taxes due and payable.	
 
20.1.14	No Material Adverse Effect . LESSEE is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on LESSEE’s ability to perform under this Lease.	

	  	69	  	ARTICLE 20	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSEE	

20.1.15	No Default or Event of Default under this Lease . At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to LESSOR pursuant to Article 22 fairly present the financial condition of LESSEE.	
20.2 Covenants . LESSEE covenants to LESSOR that it will comply with the following throughout the entire Lease Term:
 
20.2.1	Licensing . LESSEE will hold all required licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. LESSEE will advise LESSOR promptly in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.	
 
20.2.2	Payments . If at any time any such restrictions may be applicable, LESSEE will obtain all certificates, licenses, permits, exemptions and other authorizations which are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated in this Lease, and will maintain the same in fall force and effect for so long as the same will be required.	
 
20.2.3	Sovereign Immunity . LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, will continue to be subject to private commercial law and suit. Neither LESSEE nor its properties or assets will be entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. LESSEE will advise LESSOR promptly of any change in the foregoing.	
 
20.2.4	Information about Suits . LESSEE will promptly give to LESSOR a notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially adversely affect LESSEE’s ability to perform under this Lease.	
 
20.2.5	Restrictions on Mergers . LESSEE will not consolidate with or merge into any other Person or sell, convey, lease, or otherwise transfer all or substantially all of its assets (whether in one transaction or a series of transactions) to any Person (a “ Reorganization Transaction ”), unless:	
(a) the Person formed by such consolidation or surviving such merger, or the Person who acquires by sale, conveyance, transfer, or lease all or substantially all of LESSEE’s assets (the “ Reorganized Entity ”) has a net worth and financial capacity which are reasonably sufficient to meet (i) all obligations of LESSEE under the

	  	70	  	ARTICLE 20	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSEE	

Operative Documents, (ii) all obligations of LESSEE under all other agreements between LESSEE and LESSOR concerning the leasing or financing of aircraft or the extension, restructuring or rescheduling of credit, and (iii) the other obligations of the Reorganized Entity on a going forward basis;
(b) the Reorganized Entity (i) executes and delivers to LESSOR an agreement, in form and substance reasonably satisfactory to LESSOR, containing an assumption by the Reorganized Entity of the due and punctual performance and observance of all of LESSEE’s obligations under the Operative Documents, and (ii) makes such filings and recordings, including any filing or recording with the FAA or any filing under the Uniform Commercial Code, as are necessary to evidence such Reorganization Transaction and all filings necessary in order to preserve and protect the rights of LESSOR as owner of the Aircraft and lessor under this Lease;
(c) (i) such transaction shall not create a Default, (ii) no Event of Default shall exist immediately after such transaction, and (iii) the benefits of Section 1110 of the U.S. Bankruptcy Code available to LESSOR immediately prior to such Reorganization Transaction shall not be adversely affected as a result of such Reorganization Transaction;
(d) the Reorganized Entity delivers to LESSOR:
 
 	(i)	a certificate, signed on its behalf by a responsible officer, stating that all the conditions precedent set forth in the foregoing clauses of this Article 20.2.5 have been fulfilled, and	
 
 	(ii)	an opinion of counsel for LESSEE or for the Reorganized Entity, from counsel and in form and substance reasonably satisfactory to LESSOR, stating that [A] the agreements entered into to effect the assumption agreement referenced in Article 20.2.5(b) have been duly authorized, executed, and delivered by the Reorganized Entity and that they (and the Operative Documents so assumed) constitute legal, valid, and binding obligations of the Reorganized Entity, enforceable in accordance with their terms (to the same extent as the Operative Documents so assumed were enforceable against LESSEE immediately prior to such Reorganization Transaction), and [B] containing such other matters as LESSOR reasonably requests.	
Upon effecting any such Reorganization Transaction, the Reorganized Entity shall succeed to all the obligations of LESSEE and shall succeed to, shall be substituted for, and may exercise every right and power of LESSEE under the Operative Documents, with the same effect as if the Reorganized Entity had been named as LESSEE therein. No such Reorganization Transaction shall have the effect of

	  	71	  	ARTICLE 20	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSEE	

releasing LESSEE (or any Reorganized Entity) from any of its liabilities under the Operative Documents. LESSEE shall pay all reasonable out-of-pocket expenses of LESSOR (including but not limited to its reasonable attorneys’ fees) in respect of such transfer.
 
20.2.6	Restriction on Relinquishment of Possession . LESSEE will not, without the prior consent of LESSOR, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease, including Articles 11 and 12.	
 
20.2.7	No Security Interests . LESSEE will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein. LESSEE will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time unless the same results from an act or omission of LESSOR or LESSOR’s Lender. LESSEE will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to LESSOR.	
 
20.2.8	Representations to Other Parties . LESSEE will not represent or hold out LESSOR as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.	

	  	72	  	ARTICLE 20	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSEE	

 	ARTICLE 21	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	
21.1 Representations and Warranties . LESSOR represents and warrants the following to LESSEE as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 8:
 
21.1.1	Corporate Status . LESSOR is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of California. It has the corporate power and authority to carry on its business as presently conducted and to perform its obligations hereunder.	
 
21.1.2	Governmental Approvals . No authorization, approval, consent, license or order of, or registration with, or the giving of notice to any U.S. Government Entity is required for the valid authorization, execution, delivery and performance by LESSOR of this Lease.	
 
21.1.3	Binding . This Lease and the other Operative Documents have been duly authorized, executed and delivered by LESSOR and represent the valid and binding obligations of LESSOR, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
21.1.4	No Breach . The execution and delivery of the Operative Documents, the consummation by LESSOR of the transactions contemplated in this Lease and compliance by LESSOR with the terms and provisions hereof do not and will not contravene any Law applicable to LESSOR, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSOR is a party or by which LESSOR or its properties or assets may be bound or affected.	
21.2 Covenant of Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing hereunder, LESSOR covenants that during the Lease Term neither LESSOR nor any Person lawfully claiming by or through LESSOR will interfere with or otherwise disturb LESSEE’s quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of this Lease. LESSOR further agrees that LESSOR will procure that any Person taking title to the Aircraft granted by LESSOR during the Lease Term shall provide to LESSEE a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.

	  	73	  	ARTICLE 21	
	  	REPRESENTATIONS, WARRANTIES AND	
	  		  	COVENANTS OF LESSOR	

 	ARTICLE 22	FINANCIAL AND OTHER INFORMATION	
LESSEE agrees to furnish each of the following to LESSOR:
(a) within forty-five (45) days after the end of each fiscal quarter of LESSEE, three (3) hard copies of the unaudited consolidated financial statements (including a balance sheet and profit and loss statement) prepared for such quarter in accordance with generally accepted accounting principles in Mexico;
(b) within ninety (90) days after the end of each fiscal year of LESSEE, three (3) hard copies of the audited consolidated financial statements (including a balance sheet and profit and loss statement) prepared as of the close of such fiscal year in accordance with generally accepted accounting principles in Mexico;
(c) promptly after distribution, three (3) hard copies of all reports and financial statements which LESSEE sends or makes available to its creditors and other aircraft lessors; and
(d) from time to time, such other reasonable information as LESSOR may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of LESSEE; and
Notwithstanding the foregoing, if at any time LESSEE shall be required to file or otherwise furnish financial statements substantially equivalent to those required to be furnished hereunder to any governmental agency of the state of Registration and such financial statements are available, at no unreasonable effort and no charge on the internet, the furnishing of the same by LESSEE shall be deemed to satisfy the requirements of this Article.

	  	74	  	ARTICLE 22	
	  	FINANCIAL AND OTHER INFORMATION	

 	ARTICLE 23	RETURN OF AIRCRAFT	
23.1 Date of Return . LESSEE is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 19.3. If an Event of Default occurs hereunder by LESSEE failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and LESSOR repossesses the Aircraft, the return requirements set forth in this Article 23 nonetheless must be met on the date the Aircraft is actually returned to LESSOR or repossessed by LESSOR.
23.2 Last Engine Shop Visits . With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will promptly notify LESSOR and the workscope will be submitted to Lessor as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost.
23.3 Technical Report . No later than six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), LESSEE will provide LESSOR with a Technical Evaluation Report in the form and substance of Exhibit O, as revised, and, in addition upon LESSOR’s request, will make copies available of (i) drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) rotable tracked, hard-time and life-limited component listings, (v) a list of modifications, alterations and repairs, (vi) interior material burn certificates, (vii) the Maintenance Program, (viii) the complete workscopes for the checks, inspections and other work to be performed prior to return, (ix) a forecast of the checks, inspections and other work to be performed within eighteen (18) months after return of the Aircraft, (x) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by LESSEE from Manufacturer or the Engine Manufacturer, (xi) current Engine disk sheets, (xii) last Engine shop visit reports, (xiii) takeoff and cruise trend reports for the last nine (9) months and (xiv) any other data which is reasonably requested by LESSOR.
23.4 Return Location . LESSEE at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR at Aeromantenimiento. S.A. in El Salvador or another FAA-approved maintenance facility at a location mutually agreed to by LESSEE and LESSOR.
23.5 Full Aircraft Documentation Review . For the period commencing at least one (1) month prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to LESSOR in the condition required by this Lease, LESSEE will provide for the review of LESSOR and/or its representative all of the Aircraft records and historical documents described in Exhibit N in one central room with access to telephone, photocopy, fax and internet connections at the Aircraft return location.

	  	75	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.6 Maintenance Policies and Procedures Manuals . At return of the Aircraft and at LESSOR’s request for the purposes of bridging and demonstrating to the next operator and its aviation authority how the Aircraft has been maintained, LESSEE will provide LESSOR with access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of LESSEE (not to be unreasonably withheld or delayed) and that the same will be only utilized as set forth in Article 12.12 and this Article 23.6.
 
23.7	Aircraft Inspection .	
 
23.7.1	During the maintenance checks performed prior to the proposed redelivery and at the actual return of the Aircraft, LESSOR and/or its representatives will have an opportunity to observe functional and operational system checks, perform a visual inspection of the Aircraft (taking into account the Aircraft type, age, use and other known factors with respect to the Aircraft) and perform a full inspection of the Aircraft Documentation (including records and manuals), all to LESSOR’s reasonable satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.2	Prior to the Aircraft acceptance flight described in Article 23.7.3, with LESSOR and/or LESSOR’s representatives present, LESSEE will conduct a systems functional and operational inspection of the Aircraft in accordance with Manufacturer’s checklist procedures.	
 
23.7.3	Immediately prior to redelivery of the Aircraft, LESSEE will carry out for LESSOR and/or LESSOR’s representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by LESSOR, in accordance with an airline acceptance flight procedure, either of which will be for not less than two (2) hours and not more than three (3) hours. Flight costs and fuel will be furnished by and at the expense of LESSEE. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.	
 
23.7.4	To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date, the Lease Term will be deemed to have been automatically extended and the obligations of LESSEE hereunder (including Article 23.14.3) will continue on a day-to-day basis until the Aircraft is accepted by LESSOR executing the Return Acceptance Receipt in the form of Exhibit L.	

	  	76	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.8	Certificate of Airworthiness Matters .	
 
23.8.1	The Aircraft will possess a current Certificate of Airworthiness issued by the Aviation Authority (although this Certificate of Airworthiness may later be replaced by an Export Certificate of Airworthiness or equivalent if requested by LESSOR pursuant to Article 23.12). In addition, even if LESSEE must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 12, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 and, in addition, to meet the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.2	At LESSOR’s request, LESSEE at its cost will demonstrate that the Aircraft meets the requirements for issuance of the U.S. Standard Certificate of Airworthiness for transport category aircraft specified in Article 23.8.1 by delivering to LESSOR at LESSOR’s option either an actual U.S. Standard Certificate of Airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to LESSOR signed by an FAA Designated Airworthiness Representative (DAR) or another Person acceptable to LESSOR stating that the DAR or such Person has inspected the Aircraft and Aircraft Documentation (including records and manuals) and has found that the Aircraft meets the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft in accordance with FAR Part 21 and, in addition, meets the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.	
 
23.8.3	If the Aircraft is to be registered in a country other than in the U.S. after return from LESSEE, LESSOR may in its sole discretion waive the requirements of Article 23.8.2 and instead require that LESSEE at its expense (to the extent such expense is no greater than that which LESSEE would have incurred pursuant to Articles 23.8.1 and 23.8.2, with any additional expenses being for LESSOR’s account) put the Aircraft in a condition to meet the requirements for issuance of a Certificate of Airworthiness of the aviation authority of the next country of register.	
 
23.9	General Condition of Aircraft at Return .	
 
23.9.1	The Aircraft, Engines, APU and Parts will have been maintained and repaired in accordance with the Maintenance Program, the rules and regulations of the Aviation Authority and this Lease.	

	  	77	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.9.2	If any Part installed on the Airframe, any Engine or the APU at return was not installed at Delivery, then such Part will have met the requirements of Article 12.4.1 at the time of installation.	
 
23.9.3	The requirements of Article 12.2.2 will have been met with respect to the installation of PMA Parts and OEM Parts in the Engines during the Lease Term. Without limiting the foregoing, all stationary high energy Parts in the gaspath of the Engines will be OEM Parts.	
 
23.9.4	Aircraft Documentation (including records and manuals) will have been maintained in English and in an up-to-date status, in accordance with the rules and regulations of the Aviation Authority and the FAA and this Lease and in a form necessary in order to meet the requirements of Article 23.8.1. The records and historical documents set forth in Attachment 1 of Exhibit L will be in English. If LESSEE subscribes to Manufacturer’s on-line data access services, LESSEE must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD, microfilm or other format acceptable to LESSOR.	
 
23.9.5	All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the most recent time of installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency or EASA-approved repair agency, as applicable, which performed the last Overhaul or refurbishment.	
 
23.9.6	All Parts other than those referred to in Article 23.9.5 installed on the Aircraft will have FAA-acceptable documentation demonstrating that such Parts were airworthy at the most recent time of installation on the Aircraft.	
 
23.9.7	The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 23, reasonable wear and tear from normal flight operations excepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis.	
 
23.9.8	The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by Manufacturer, the Aviation Authority and FAA.	

	  	78	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.9.9	The Aircraft interior (including cabin and windows) and exterior will be clean, with all compartments free of foreign objects. The Aircraft will be substantially free of dirt, grease, fluids, stains, grime, cracks, tears and rips, consistent with worldwide commercial airline standards for used aircraft at completion of a heavy maintenance check.	
 
23.9.10	No special or unique Manufacturer, Engine Manufacturer or Aviation Authority inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.	
 
23.9.11	All repairs to the Aircraft will have been accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9) for the Aircraft.	
 
23.9.12	All major modifications will also be accomplished in accordance with FAA-approved data supported by a supplemental type certificate, FAA Form 8110-3 or 8100-9.	
 
23.9.13	The Aircraft will be returned with LESSOR’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent LESSEE performed a Modification which cost in excess of ***** and LESSOR did not approve such Modification in accordance with Article 12.9.1, LESSOR may require LESSEE to return the Aircraft in its original condition prior to such Modification.	
 
23.9.14	All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance by means of terminating action prior to return of the Aircraft to LESSOR or within 6 months after the Termination Date will have been complied with on the Aircraft on a terminating action basis at LESSEE’s cost. Airworthiness Directives which require compliance by means other than terminating action prior to return of the Aircraft or 6 months after Return to LESSOR, will have been performed to the highest level of accomplishment possible other than terminating action. If, after using commercially reasonable efforts, LESSEE is unable to acquire the material, parts or components necessary to accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon return of the Aircraft the estimated cost of terminating such Airworthiness Directive. If the estimated cost cannot be mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain an estimate from a reputable FAA-approved maintenance facility (unaffiliated with LESSEE or LESSOR) and the estimated cost will be the average of the two estimates.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	79	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.9.15	All Modifications which must be performed prior to the date of return of the Aircraft or within 6 months after the Termination Date in order to meet the FAA requirements for FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129 operations will have been incorporated on the Aircraft at LESSEE’s cost.	
 
23.9.16	The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer and LESSEE will provide LESSOR with documentation substantiating such compliance.	
 
23.9.17	If any waivers, deviations, dispensations, alternate means of compliance, extensions or carry-overs with respect to maintenance or operating requirements, repairs or Airworthiness Directives are granted by the Aviation Authority or permitted by the Maintenance Program, LESSEE at its sole cost and expense will nonetheless perform such maintenance or operating requirements, repairs or Airworthiness Directives as if such waivers, deviations, dispensations, alternate means of compliance, or extensions or carry-overs did not exist.	
 
23.9.18	The Aircraft will be free from any Security Interest except LESSOR’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest or right of detention or sale in favor of the Aviation Authority, any airport authority, Eurocontrol or any other authority or Government Entity.	
 
23.9.19	All no-charge vendor and Manufacturer’s service bulletin kits received by LESSEE for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no-charge vendor and Manufacturer’s service bulletin kits ordered by LESSEE but not yet received will, upon receipt by LESSEE and at LESSEE’s cost, be forwarded as instructed by LESSOR. At LESSOR’s request, any other service bulletin kit which LESSEE ordered specifically for the Aircraft and paid for will also be delivered to LESSOR on board the Aircraft, but LESSOR will reimburse LESSEE for its actual out-of-pocket costs for such kit, unless LESSEE purchased such kit as part of its implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but had not yet installed such kit on the Aircraft, in which case such kit will be furnished free of charge to LESSOR.	
 
23.9.20	The Aircraft will be free of any leaks found to be outside of maintenance manual limits and any damage resulting therefrom. All repairs will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions unless no such permanent repair is available.	

	  	80	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.9.21	The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced to full and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.	
23.10 Cheeks Prior to Return . Immediately prior to return of the Aircraft to LESSOR, LESSEE at its expense will do each of the following:
 
23.10.1	LESSEE will have the Return Check performed by an FAA-approved repair facility. LESSEE also agrees to perform during the Return Check any other work reasonably requested by LESSOR (and not otherwise required under this Lease) and LESSOR will reimburse LESSEE for performing such LESSOR-requested work based on LESSEE’s out-of-pocket and unburdened labor and material costs. In the event that LESSEE exercises any extension option with respect to the Initial Lease Term, and the next consecutive check due on the Aircraft pursuant to the MPD (regardless of whether or not such check would have fallen during the Lease Term) is a “12Y” check, then LESSEE will accomplish the “12Y” check (including all lesser checks) as described in the MPD.	
 
23.10.2	LESSEE will perform an internal and external corrosion inspection and correct any discrepancies in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
23.10.3	LESSEE will remove LESSEE’s exterior markings, including all exterior paint, by stripping (or, at LESSOR’s option, pneumatically sanding) the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. LESSEE will then repaint the fuselage, empennage, wings and Engine cowlings in the colors and logo specified by LESSOR. Such painting will be accomplished in such a manner as to result in a uniformly smooth and cosmetically acceptable aerodynamic surface. All external placards, signs and markings will be properly attached, free from damage, clean and legible. Notwithstanding the foregoing, in the event that the cost of painting the Aircraft in the logo and colors specified by LESSOR exceeds the then-current cost of painting the Aircraft in the logo and colors in which it was painted at Delivery, then LESSOR will reimburse LESSEE for any such excess cost. After painting, the Aircraft will be weighed.	
 
23.10.4	LESSEE will clean the exterior and interior of the Aircraft.	
 
23.10.5	If reasonably required by LESSOR, LESSEE will repaint by touch-up the interior of the Aircraft, including flight deck, and replace missing, broken or illegible placards.	

	  	81	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.10.6	In accordance with Article 23.9.11, LESSEE will permanently repair damage to the Aircraft that exceeds Manufacturer’s limits and replace any non-flush structural patch repairs installed on the Aircraft with permanent flush-type repairs, in each case with no further inspection requirements unless a permanent flush-type repair is unavailable.	
 
23.10.7	With LESSOR and/or its representatives present, LESSEE will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with Manufacturer’s aircraft maintenance manual.	
 
23.10.8	If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
 
23.10.9	With LESSOR and/or its representatives present, LESSEE will accomplish a power assurance run on the Engines in accordance with Manufacturer’s aircraft maintenance manual Task 71-00-00-710-013 Test No. 11 “High Power Assurance Test” (or any subsequent equivalent replacement thereof). LESSEE will record the Engine power assurance test conditions and results on the Return Acceptance Receipt.	
 
23.10.10	LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the Engine historical and technical records, borescope inspection, trend monitoring and power assurance run do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Manufacturer’s aircraft maintenance manual. LESSEE will correct any discrepancies in accordance with the guidelines set out by the Engine Manufacturer which may be discovered during such inspection.	
 
23.10.11	In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 23.10.9 result in a dispute regarding the conformity of an Engine with the requirements of this Article 23, LESSEE and LESSOR will consult with the Engine Manufacturer and follow the Engine Manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check if so recommended) with regard to determining if such Engine complies with the requirements of this Article 23 and the manner in which any discrepancies from the requirements of this Article 23 will be rectified.	

	  	82	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.10.12	With LESSOR and/or its representatives present, LESSEE will perform an APU condition test in accordance with Manufacturer’s aircraft maintenance manual and a complete hot and cold section videotape borescope on the APU. LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the APU condition test and borescope inspection do not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. LESSEE will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such test or inspections. If such APU is serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions, LESSOR agrees to discuss with LESSEE in good faith for a resolution that compensates LESSOR for such deficiency and avoid or minimize any delays in return of the Aircraft to LESSOR.	
 
23.10.13	If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.	
 
23.11	Part Lives . At return, the condition of the Aircraft will be as follows:	
 
23.11.1	The Aircraft will have zero (0) hours consumed since the Return Check (excluding hours consumed on the acceptance flight).	
 
23.11.2	Each Engine will meet all of the following:	
(a) Each Engine will have at least 4,000 hours and 3,500 cycles remaining to operate until its next anticipated removal (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).
(b) If any module of an Engine is returned with hours accumulated on such module since the last performance restoration of such module, LESSEE will pay LESSOR an amount equal to the hours accumulated on such module times then-current Engine Manufacturer performance restoration rate for such module, based on Engine Manufacturer’s estimated mean time between performance restoration for such module.
(c) Each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the hours and cycles set forth in the preceding subparagraph (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).

	  	83	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

(d) The Engine historical and technical records, borescope inspection, trend monitoring, power assurance run and other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10 indicate that the Engine should operate for the hours and cycles set forth in Article 23.11.2(a).
(e) Each Part of an Engine which has a life-limit will have at least 4,000 cycles remaining to operate until its next removal per the Engine Manufacturer’s limit.
(f) No life-limited Part of an Engine will have more hours and cycles consumed than such Engine’s data plate.
 
23.11.3	The APU will have not more than 2,000 APU hours consumed since the last APU manufacturer’s medium or heavy repair workscope. If the APU has life-limited Parts, the cycles remaining on the most restricted life-limited Part will be a minimum of 3,000 APU cycles at return.	
In addition, to the extent there are life-limited Parts in the APU, then, for each such life-limited Part, LESSEE will pay LESSOR an amount equal to the product of (a) the quotient obtained by dividing 1. the cycles consumed on each such life-limited Part within the APU since new by 2. the total life of each such life-limited Part, multiplied by (b) the replacement cost of the applicable life-limited Part, all as determined by the APU manufacturer’s then-current data.
 
23.11.4	Each leg of the Landing Gear will have at least 7 years remaining pursuant to the MPD until the next scheduled Overhaul.	
 
23.11.5	Each Part of the Airframe, Engine or APU which has a hard time limit pursuant to the MPD will have the greater of (i) at least 50% of such hard time Part’s full allotment of hours and cycles or (ii) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled Overhaul or scheduled removal pursuant to the MPD. However, if such hard time Part’s full allotment of hours and cycles between Overhauls pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such hard time Part will be returned with zero (0) hours and zero (0) cycles out of Overhaul.	
 
23.11.6	Each life-limited Part of the Airframe or APU will have the greater of (i) at least 50% of such life-limited Part’s full allotment of hours and cycles or (ii) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled replacement pursuant to the MPD. However, if such life-limited Part’s full allotment of hours and cycles remaining to operate pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such life-limited Part will be returned with 100% of its total approved hours and cycles remaining.	

	  	84	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.11.7	No life-limited Part of the Airframe will have more hours and cycles consumed than the total hours and cycles of the Airframe.	
 
23.11.8	No life-limited Part of the APU will have more hours and cycles consumed than the hours and cycles of the APU.	
 
23.11.9	Each Part which has a calendar time limit will have 20 months remaining to operate until removal pursuant to the MPD. If a Part with a calendar time limit has a total approved calendar time remaining pursuant to the MPD of less than 20 months, then such Part will be returned with 100% of its total approved calendar time remaining until removal.	
 
23.11.10	No Part (excluding the life-limited Parts which are covered by Articles 23.11.2(e), 23.11.2(f), 23.11.6, 23.11.7 and 23.11.8) will have total hours or total cycles since new greater than one hundred fifteen percent (115%) of that of the Airframe and, with respect to all such Parts as a group, such Parts will have an average total time since new no greater than that of the Airframe.	
 
23.11.11	Each Landing Gear tire and brake will have fifty percent (50%) of its total wear remaining to its next Overhaul.	
23.12 Export and Deregistration of Aircraft . At LESSOR’s request, LESSEE at its cost will (i) provide an Export Certificate of Airworthiness or its equivalent from the State of Registration so that the Aircraft can be exported to the country designated by LESSOR, (ii) assist with deregistration of the Aircraft from the register of aircraft in the State of Registration, (iii) assist with arranging for prompt confirmation of such deregistration to be sent by the registry in the State of Registration to the next country of registration and (iv) perform any other acts reasonably required by LESSOR in connection with the foregoing. If any Aircraft work which LESSEE is not otherwise required to perform hereunder, including engineering, is required in order to obtain such Export Certificate of Airworthiness, LESSEE will perform such work and LESSOR will reimburse LESSEE for such work at LESSEE’s out-of-pocket expenses.
23.13 Delay in Return of Aircraft Due to LESSOR Work Requests . LESSEE will not be required to pay Rent to LESSOR for any whole days that return of the Aircraft to LESSOR is delayed solely as a result of LESSOR’s requests that additional work be performed over and above the work necessary to place the Aircraft in the condition required by this Article 23, and in the event associated costs other than additional Rent are incurred, such as additional insurance, LESSOR shall reimburse reasonable costs associated therewith.

	  	85	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.14 LESSEE’s Continuing Obligations . In the event that LESSEE does not return the Aircraft to LESSOR on the Expiration Date and in the condition required by this Article 23 for any reason (whether or not the reason is within LESSEE’s control), but subject to Article 23.13:
 
23.14.1	the obligations of LESSEE under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of LESSEE’s Event of Default or any right of LESSOR hereunder.	
 
23.14.2	Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to LESSOR pursuant to this Lease.	
 
23.14.3	Without limiting LESSOR’s rights and remedies under Article 25 and except for a delay in return of the Aircraft for the reason set forth in Article 23.13, until such time as the Aircraft is redelivered to LESSOR and put into the condition required by this Article 23, instead of paying the Rent specified in Article 5.3, LESSEE will pay twice the amount of Rent in effect on the Expiration Date for each day from the scheduled Expiration Date until the Termination Date. In determining the applicable normal Rent per day that will be doubled for purposes of this calculation, the monthly Rent payable under Article 5.3.1 will be prorated based on the actual number of days in the applicable month. Payment will be made upon presentation of LESSOR’s invoice.	
 
23.14.4	LESSOR may elect, in its sole and absolute discretion, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 23 and thereafter have any such non-conformance corrected at such time as LESSOR may deem appropriate (but within ninety (90) days following the return of the Aircraft) and at commercial rates then-charged by the Person selected by LESSOR to perform such correction. Any direct expenses incurred by LESSOR for such correction will be payable by LESSEE within fifteen (15) days following the submission of a written statement by LESSOR to LESSEE, identifying the items corrected and setting forth the expense of such corrections. LESSEE’s obligation to pay such amounts will survive the Termination Date.	
23.15 Airport and Navigation Charges . LESSEE will ensure that at return of the Aircraft any and all airport, navigation and other charges which give rise or may if unpaid give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part have been paid and discharged in full and will at LESSOR’s request produce evidence thereof satisfactory to LESSOR, except to the extent being contested in good faith provided LESSEE shall have agreed in writing to pay any such charges determined pursuant to such contest to be due and owing to the relevant authorities, and provided that there is no likelihood of the placement of any Security Interest on or seizure of the Aircraft, Engine, APU or any Part.

	  	86	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

23.16 Return Acceptance Receipt . Upon return of the Aircraft in accordance with the terms of this Lease, LESSEE will prepare and execute two (2) Return Acceptance Receipts in the form and substance of Exhibit L and LESSOR will countersign and return one such Return Acceptance Receipt to LESSEE. In addition, LESSEE and LESSOR will execute a Lease Termination for filing with the FAA evidencing termination of this Lease.
23.17 Indemnities and Insurance . The indemnities and insurance requirements set forth in Articles 17 and 18, respectively, will apply to Indemnitees and LESSOR’s representatives during return of the Aircraft, including the ground inspection and acceptance flight. With respect to the acceptance flight, LESSOR’s representatives will receive the same protections as LESSOR on LESSEE’s Aviation and Airline General Third Party Liability Insurance.
23.18 Storage . At LESSOR’s request, LESSEE will continue to lease the Aircraft under this Lease for a period not to exceed thirty (30) days. During this period, LESSEE will have no obligations under this Lease except, at LESSOR’s cost, to park and store the Aircraft in accordance with Manufacturer’s recommended short term storage program at one of LESSEE’s principal maintenance facilities in Mexico and to maintain all insurance on the Aircraft. LESSEE will not utilize the Aircraft for any reason during this period.

	  	87	  	ARTICLE 23	
	  		  	RETURN OF AIRCRAFT	

 	ARTICLE 24	ASSIGNMENT	
24.1 No Assignment by LESSEE . NO ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART, OR THIS LEASE.
 
24.2	Sale or Assignment by LESSOR .	
 
24.2.1	Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent sell, assign or transfer its rights, interest and obligations hereunder or with respect to the Aircraft (a “ Transfer ”) to a third party (“ LESSOR’s Assignee ”).	
Notwithstanding the foregoing, no Transfer shall: (i) be made to an entity which is not solvent at the time of and immediately after giving effect to such Transfer; (ii) be made to an air carrier or subsidiary of an air carrier that conducts substantial business in Mexico and is in direct competition with LESSEE; (iii) result in any increase in or to or the imposition of additional obligations or liabilities on the part of LESSEE that are not de minimis, (iv) restrict or diminish LESSEE’s rights in and to the Aircraft pursuant to this Lease; (v) be made to a Person having a net worth of less than ***** at the time of such Transfer; (vi) be made unless and until the purchaser, assignee or transferee shall have (a) provided LESSEE with a covenant of quiet use and enjoyment equivalent to that required under this Lease and (b) agreed in writing, in favor of LESSEE that (1) in the case of a Transfer not constituting solely a Transfer by way of security, it shall be bound by and from and after the date of transfer perform all obligations of “LESSOR” under this Lease and (2) in the case of any Transfer, that, to the extent it holds any moneys under the Lease, it shall hold, apply, invest, disburse, reimburse and return such moneys in accordance with the applicable provisions of the LEASE.
 
24.2.2	The term “ LESSOR ” as used in this Lease means the lessor of the Aircraft at the time in question. In the event of the sale of the Aircraft and transfer of LESSOR’s rights and obligations under this Lease, LESSOR’s Assignee will become “LESSOR” of the Aircraft under this Lease and the transferring party (the prior “LESSOR”) will be relieved of all liability to LESSEE under this Lease for obligations arising on and after the date the Aircraft is sold. LESSEE will acknowledge and accept LESSOR’s Assignee as the new “LESSOR” under this Lease and will look solely to LESSOR’s Assignee for the performance of all LESSOR obligations and covenants under this Lease arising on and after the Aircraft sale date.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	88	  	ARTICLE 24	
	  		  	ASSIGNMENT	

24.3 LESSOR’s Lender . Subject to LESSEE’s rights pursuant to this Lease, LESSOR may at any time and without LESSEE’s consent grant security interests over the Aircraft and assign the benefit of this Lease to a lender (“ LESSOR’s Lender ”) as security for LESSOR’s obligations to LESSOR’s Lender. Accordingly, if LESSOR’s Lender requires, as a condition to providing financing, any nonsubstantive modification of this Lease, LESSEE agrees to enter into an agreement so modifying this Lease.
24.4 LESSEE Cooperation . Subject to LESSEE’s rights under this Lease otherwise, on request by LESSOR, LESSOR’s Assignee or LESSOR’s Lender, LESSEE will execute all such documents (such as a lease assignment agreement) as LESSOR, LESSOR’s Assignee or LESSOR’s Lender may reasonably require to acknowledge LESSEE’s obligations under this Lease and obtain LESSEE’s acknowledgment that LESSOR is not in breach of the Lease. LESSEE will provide all other reasonable assistance and cooperation to LESSOR, LESSOR’s Assignee and LESSOR’s Lender in connection with any such sale or assignment or the perfection and maintenance of any such security interest, including, at LESSOR’s sole cost and expense, making all necessary filings and registrations in the State of Registration and providing, at LESSOR’s sole cost and expense, all opinions of counsel with respect to matters reasonably requested by LESSOR, LESSOR’s Lender or LESSOR’s Assignee. LESSOR will pay or reimburse LESSEE for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in reviewing documents required by LESSOR, LESSOR’s Assignee or LESSOR’s Lender or performing any other obligations under this Article 24.
24.5 Advance Consent Under Cape Town Convention . For the purpose of Article 33(1) of the Convention and Article XV of the Protocol (combined for ease of reference in Article 46(1) of the Consolidated Text), LESSEE hereby consents in advance to the transfer of the associated rights and related international interests in respect of any assignment or sale by LESSOR or the granting of any Security Interest by LESSOR in accordance with Articles 24.2 or 24.3. For the avoidance of doubt, no additional consent by LESSEE will be required in connection with any such assignment of associated rights and the related international interests pursuant to the Cape Town Convention. Any filings made on the International Registry pursuant to the Cape Town Convention in connection herewith, shall be made at LESSOR’s sole cost and expense.
 
24.6	Protections .	
 
24.6.1	LESSOR will obtain for the benefit of LESSEE an acknowledgment from any LESSOR’s Assignee or LESSOR’s Lender that, so long as no Default or Event of Default has occurred and is continuing hereunder, neither such Person nor any other Person lawfully claiming by or through such Person will interfere with or otherwise disturb LESSEE’s quiet, peaceful use and enjoyment of the Aircraft.	
 
24.6.2	If a financing for the Aircraft is in place at Delivery or LESSOR finances the Aircraft after Delivery, then the term “LESSOR” in the provisions of this Lease	

	  	89	  	ARTICLE 24	
	  		  	ASSIGNMENT	

 	relating to disclaimer, title and registration, indemnity and insurance contained in Articles 8, 14, 17 and 18, respectively, or with respect to Article 20.2.8, will be deemed in addition to LESSOR to include LESSOR’s Assignee, LESSOR’s Lender and associated parties, if applicable. Also, if the Aircraft was previously financed but such financing was no longer in place at the time of Delivery of the Aircraft to LESSEE, the term “LESSOR” in the provisions of this Lease described in this Article 24.6.2 will be deemed to include the former lender and associated parties.	
 
24.6.3	If LESSOR sells the Aircraft after Delivery, subject to conformity of such sale with the provisions of this Article 24, then the disclaimer and indemnity provisions contained in Articles 8 and 17 will continue to be applicable after the sale to International Lease Finance Corporation and, if applicable, the parties referred to in Article 24.6.2. For a period of two (2) years after such sale or assignment and at LESSEE’s cost, LESSEE will continue to name LESSOR and the parties referred to in Article 24.6.2, if applicable, as additional insureds under the Aviation and Airline General Third Party Liability Insurance specified in Exhibit C.	

	  	90	  	ARTICLE 24	
	  		  	ASSIGNMENT	

 	ARTICLE 25	DEFAULT OF LESSEE	
25.1 LESSEE Notice to LESSOR . LESSEE will promptly notify LESSOR if LESSEE becomes aware of the occurrence of any Default or Event of Default.
25.2 Events of Default . The occurrence of any of the following will constitute an Event of Default and material breach of this Lease by LESSEE:
(a) LESSEE fails to take delivery of the Aircraft when properly tendered and otherwise obligated to do so under the terms of this Lease;
(b) LESSEE fails to make a Rent or other payment due hereunder in the manner and by the date provided in this Lease and fails to make such payment within three (3) Business Days after such payment is due (following any applicable grace period otherwise provided under this Lease);
(c) LESSEE fails to obtain or maintain the insurance required by Article 18;
(d) LESSEE fails to return the Aircraft to LESSOR on the Expiration Date in accordance with Article 23;
(e) LESSEE fails to observe or perform any of its other obligations hereunder and fails to cure the same within fifteen (15) days after receipt of written notice thereof to LESSEE. If such failure cannot by its nature be cured within fifteen (15) days, LESSEE will have the reasonable number of days necessary to cure such failure (not to exceed a period of sixty (60) days) so long as it uses diligent and best efforts to do so;
(f) any representation or warranty of LESSEE in this Lease proves to be untrue in any material respect when made and, if available, LESSEE has not cured the same within thirty (30) days unless there can be no reasonable expectation that the same can be cured within such period;
(g) the registration of the Aircraft is cancelled other than as a result of an act or omission of or attributable to LESSOR;
(h) LESSEE abandons the Aircraft or Engines;
(i) LESSEE or an approved sublessee no longer has unencumbered control (other than Permitted Liens) or possession of the Aircraft or Engines, except as otherwise permitted by this Lease;

	  	91	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

(j) LESSEE discontinues (temporarily or otherwise) business or sells or otherwise disposes of all or substantially all of its assets;
(k) a material adverse change occurs in the financial condition of LESSEE which, in LESSOR’s reasonable opinion, would materially and adversely affect LESSEE’s ability to perform its obligations under the Operative Documents;
(l) LESSEE no longer possesses the licenses, certificates and permits required for the conduct of its business as a certificated air carrier in Mexico; provided, however, that if LESSEE is undertaking its best efforts to reinstate the effectiveness of such license, certificate or permit with a reasonable likelihood of success, and so long as such situation poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, LESSEE shall have thirty (30) days to cure such deficiency;
(m) LESSEE fails to pay when due (after giving effect to any applicable grace or similar period available) any airport or navigation charges (including Eurocontrol charges) or any landing fees assessed with respect to the Aircraft or any aircraft operated by LESSEE which, if unpaid, may give rise to any lien, right of detention, right of sale or other Security Interest in relation to the Aircraft, Engine, APU or any Part;
(n) LESSEE 1. suspends payment on its debts or other obligations, 2. is unable to or admits its inability to pay its debts or other obligations as they fall due, 3. is adjudicated or becomes bankrupt or insolvent or 4. proposes or enters into any composition or other arrangement for the benefit of its creditors generally;
(o) any proceedings, resolutions, filings or other steps are instituted or threatened with respect to LESSEE relating to the bankruptcy, liquidation, reorganization or protection from creditors of LESSEE or a substantial part of LESSEE’s property. If instituted by LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;
(p) any order, judgment or decree is entered by any court of competent jurisdiction appointing a receiver, trustee or liquidator of LESSEE or a substantial part of its property, or if a substantial part of LESSEE’s property is to be sequestered. If instituted by or done with the consent of LESSEE, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied, stayed or relinquished within sixty (60) days;

	  	92	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

(q) (i) any indebtedness for borrowed moneys or a guarantee or similar obligation owed by LESSEE with an unpaid balance of at least ***** is declared due before its stated maturity or (ii) LESSEE is in default under any other purchase agreement, lease, conditional sale agreement or other agreement pursuant to which LESSEE has possession of any aircraft, if such situation presents a likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR, or a likelihood in LESSOR’s reasonable judgment that such situation will impair LESSOR’s compliance with the terms of this Lease;
(r) LESSEE is in default under any other lease or agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR and the same is not cured within its specified cure period; or
(s) LESSEE is in default under any other aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person and the same is not cured within its specified cure period.
25.3 LESSOR’s General Rights . Upon the occurrence of any Event of Default, LESSOR may do all or any of the following at its option (in addition to such other rights and remedies which LESSOR may have by statute or otherwise but subject to any requirements of applicable Law):
(a) terminate this Lease by giving written notice to LESSEE;
(b) terminate the rights of LESSEE to use or operate the Aircraft by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(c) require that LESSEE immediately cease flying the Aircraft and leave it parked in its then-current location by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(d) require that LESSEE immediately move the Aircraft to an airport or other location designated by LESSOR and park the Aircraft there by giving written notice to LESSEE, in which case LESSEE’s obligations under this Lease will continue (including the obligations set forth in Articles 17 and 18);
(e) take possession of the Aircraft. If LESSOR takes possession of the Aircraft, it may enter upon LESSEE’s premises where the Aircraft is located without liability. Upon repossession of the Aircraft, LESSOR will then be entitled to sell, lease or otherwise deal with the Aircraft as if this Lease had never been made. LESSOR will be entitled to the full benefit of its bargain with LESSEE;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	93	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

(f) instruct any maintenance or repair facility which is in possession of the Aircraft, any Engine, the APU or any Part as to its disposition or release;
(g) for LESSEE’S account, do anything that may reasonably be required to cure any default and recover from LESSEE all reasonable costs, including legal fees and expenses incurred in doing so and Default Interest;
(h) proceed as appropriate to enforce performance of this Lease and to recover any damages for the breach hereof, including the amounts specified in Article 25.6; or
(i) apply all or any portion of the Security Deposit and any other security deposits held by LESSOR pursuant to any other agreements between LESSOR and LESSEE to any amounts due.
25.4 Deregistration and Export of Aircraft . If an Event of Default has occurred and is continuing, LESSOR may take all steps necessary to deregister the Aircraft in and export the Aircraft from the State of Registration.
25.5 Cape Town Convention Remedies . If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then LESSEE and LESSOR acknowledge and agree that:
(a) each of the Events of Default set forth in Article 25.2 will be deemed to be an event that constitutes a “default” as such term is used in the Cape Town Convention; and
(b) upon the occurrence of any Event of Default 1. LESSOR will be afforded all speedy and other relief, rights and (without duplication of recovery) remedies specified in the Cape Town Convention as a result of such Event of Default, 2. all of the rights of LESSOR specified in Article 25.3 will be construed to be “additional remedies” as permitted by the Cape Town Convention which may be exercised by LESSOR pursuant to this Lease subject to the requirements of applicable Law and 3. LESSOR may, without notice to LESSEE, take all steps as are contemplated by the Cape Town Convention to deregister the Aircraft, export the Aircraft from the State of Registration and, if applicable, discharge the international interest in respect of the Aircraft, this Lease and the other Operative Documents from the International Registry.

	  	94	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

25.6 LESSEE Liability for Damages . If an Event of Default occurs, in addition to all other remedies available at law or in equity, LESSOR has the right to recover from LESSEE and LESSEE will pay LESSOR within two (2) Business Days after LESSOR’s written demand, all of the following:
(a) any losses suffered by LESSOR as a result of a delay in Delivery of the Aircraft to LESSEE, including payments to Manufacturer such as additional purchase price escalation and Aircraft parking, maintenance costs and insurance costs during the period of delay;
(b) without duplication, all amounts which are then due and unpaid hereunder and which become due prior to the earlier of LESSOR’s recovery of possession of the Aircraft or LESSEE making an effective tender thereof;
(c) without duplication, any losses suffered by LESSOR because of LESSOR’s inability to place the Aircraft on lease with another lessee or to otherwise utilize the Aircraft on financial terms as favorable to LESSOR as the terms hereof for the Lease Term or, if LESSOR elects to dispose of the Aircraft, the funds arising from a sale or other disposition of the Aircraft are not as profitable to LESSOR as leasing the Aircraft in accordance with the terms hereof would have been (and LESSOR will be entitled to accelerate any and all Rent which would have been due from the date of LESSOR’s recovery or repossession of the Aircraft through the Expiration Date);
(d) without duplication, all costs associated with LESSOR’s exercise of its remedies hereunder, including repossession costs, legal fees, Aircraft storage costs, Aircraft re-lease or sale costs and LESSOR’s internal costs and expenses (including the cost of personnel time calculated based upon the compensation paid to the individuals involved on an annual basis and a general LESSOR overhead allocation);
(e) without duplication, any amount of principal, interest, fees or other sums paid or payable on account of funds borrowed in order to carry any unpaid amount resulting from the occurrence of an Event of Default;
(f) without duplication, any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to LESSOR’s financing of the Aircraft;
(g) without duplication, any loss, cost, expense or liability sustained by LESSOR due to LESSEE’s failure to redeliver the Aircraft in the condition required by this Lease; and
(h) without duplication, any other loss, damage, expense, cost or liability which LESSOR suffers or incurs as a result of the Event of Default and/or termination of this Lease.

	  	95	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

Notwithstanding the foregoing, LESSOR shall use reasonable efforts to mitigate any such losses.
25.7 Waiver of Default . By written notice to LESSEE, LESSOR may at its election waive any Default or Event of Default and its consequences and rescind and annul any prior notice of termination of this Lease. The respective rights of the parties will then be as they would have been had no Default or Event of Default occurred and no such notice been given.
25.8 Present Value of Payments . In calculating LESSOR’s damages hereunder, upon an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred will be calculated on a present value basis using a discounting rate of ***** per annum discounted to the earlier of the date on which LESSOR obtains possession of the Aircraft or LESSEE makes an effective tender thereof.
25.9 Use of “Termination Date” . For avoidance of doubt, it is agreed that if this Lease terminates and the Aircraft is repossessed by LESSOR due to an Event of Default, then, notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Expiration Date” will be utilized in calculating the damages to which LESSOR is entitled pursuant to Article 25.6. For example, it is agreed and understood that LESSOR is entitled to receive from LESSEE the Rent and the benefit of LESSEE’s insurance and maintenance of the Aircraft until expiration of the Lease Term.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	96	  	ARTICLE 25	
	  		  	DEFAULT OF LESSEE	

 	ARTICLE 26	NOTICES	
26.1 Manner of Sending Notices . Any notice, request or information required or permissible under this Lease will be in writing and in English. Notices will be delivered in person or sent by fax, e-mail, letter (mailed airmail, certified and return receipt requested), or by expedited delivery addressed to the parties as set forth in Article 26.2. In the case of a fax, notice will be deemed received on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent. In the case of e-mail, notice will be deemed received upon actual receipt. In the case of a mailed letter, notice will be deemed received upon actual receipt. In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery. If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions.
26.2 Notice Information . Notices will be sent:

If to LESSOR:	  	INTERNATIONAL LEASE FINANCE CORPORATION
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.
Attention: Legal Department	
			
	  	Fax:	  	310-788-1990	
	  	Telephone:	  	310-788-1999	
	  	E-mail:	  	legalnotices@ilfc.com	
		
If to LESSEE:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)	
	  	Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01012 México, D.F.	
	  	México
Attention: Finance Director	
			
	  	Fax:
Telephone:	  	+503-298-3064
+503-298-1560	
	  	E-mail:	  	fernando.suarez@volaris.com.mx	
or to such other places and numbers as either party directs in writing to the other party.

	  	97	  	ARTICLE 26	
	  		  	NOTICES	

 	ARTICLE 27	ARBITRATION	
27.1 Arbitration of Any Dispute . Subject to the terms of Article 27.9, any dispute, controversy or claim arising out of or relating to this Lease, or the breach, termination or invalidity thereof, will be settled solely by arbitration.
27.2 Notice of Arbitration . Any notice with respect to arbitration, including a notice by LESSEE or LESSOR of arbitration commencing arbitral proceedings will be delivered to the other party as set forth in Article 26.
27.3 Rules for Arbitration . The arbitration shall be in accordance with the Rules of Arbitration (as in effect on the date of this Lease) of the International Chamber of Commerce (“ ICC ”), except that in the event of any conflict between such ICC Rules and the arbitration provisions of this Lease, the provisions of this Lease shall govern.
27.4 Number of Arbitrators . The number of arbitrators shall be three.
27.5 Appointment of Arbitrator by Each Party . Each party shall appoint one arbitrator within five (5) Business Days of receipt of the notice provided under Article 27.2. If within five (5) Business Days after receipt of the claimant’s notification of the appointment of an arbitrator the respondent has not notified the claimant in writing of the name of the arbitrator appointed by the respondent, the second arbitrator shall be appointed by the ICC acting in accordance with the rules adopted by the ICC for this purpose.
27.6 Appointment of Lead Arbitrator . The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the tribunal. If within five (5) Business Days after the appointment of the second arbitrator, the two arbitrators have not agreed upon the choice of the presiding arbitrator, then at the request of either party the presiding arbitrator will be appointed by the ICC in accordance with the rules adopted by the ICC for such purpose (provided that such presiding arbitrator will be a national of a country other than Mexico or the U.S.).
27.7 Location of Arbitration . The arbitration, including the making of the award, will take place in Los Angeles, California.
27.8 Language for Arbitration . The arbitration will be conducted in English.
27.9 Interim Measures of Protection . At the request of LESSOR, the arbitral tribunal may order or take any interim measures it deems necessary in respect of the Aircraft, including measures for the conservation of the Aircraft such as return of the Aircraft to the custody and control of LESSOR or the parking of the Aircraft. Such interim measures may be established in the form of an interim award. The arbitral tribunal will be entitled to require security for the costs of such measures. A request by LESSOR to a judicial authority in any jurisdiction for the repossession or parking of the Aircraft will not be deemed incompatible with or a waiver of LESSOR’s agreement to arbitrate set forth in this Lease.

	  	98	  	ARTICLE 27	
	  		  	ARBITRATION	

27.10 Substantive Law . The substantive Laws of the State of California will be applied by the arbitrators in any arbitration.
27.11 Decision . The arbitration award will be based on and accompanied by a written opinion containing findings of fact and conclusions of law.
27.12 Prevailing Party in Dispute . In any arbitration in connection with or arising out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such arbitration. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and postjudgment Default Interest.
27.13 Waiver . LESSEE and LESSOR agree that the arbitral award will be final and binding upon them. Each of LESSEE and LESSOR agree that the arbitral award may be enforced against the parties to the arbitration proceeding or their assets wherever they may be found and that a judgment on the arbitration award may be entered in any court having jurisdiction over the parties or their assets.

	  	99	  	ARTICLE 27	
	  		  	ARBITRATION	

 	ARTICLE 28	GOVERNING LAW AND JURISDICTION	
28.1 California Law . This Lease is being delivered in the State of California and the Lease and all other Operative Documents will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California).
28.2 Non-Exclusive Jurisdiction in California . As permitted by Section 410.40 of the California Code of Civil Procedure, the parties hereby irrevocably submit to the non-exclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles, California. Nothing in this Lease will prevent either party from bringing suit in any other appropriate jurisdiction.
28.3 Protection of Interest in the Aircraft . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27, IF LESSOR DEEMS IT NECESSARY FOR THE CONSERVATION OF THE AIRCRAFT OR FOR THE PROTECTION OF ITS INTEREST IN THE AIRCRAFT, LESSOR IN ITS SOLE DISCRETION MAY BRING PROCEEDINGS IN ANY COURT OF COMPETENT JURISDICTION (INCLUDING BUT NOT LIMITED TO ANY OF THE COURTS DESIGNATED IN ARTICLE 28.4) IN ORDER TO OBTAIN APPROPRIATE RELIEF, INCLUDING BUT NOT LIMITED TO AN ORDER (A) REQUIRING LESSEE TO MOVE THE AIRCRAFT TO A SUITABLE AIRPORT DESIGNATED BY LESSOR AND CEASE OPERATING THE AIRCRAFT, (B) REQUIRING LESSEE TO RETURN PHYSICAL POSSESSION OF THE AIRCRAFT TO LESSOR, OR (C) AWARDING SUCH OTHER OR ADDITIONAL RELIEF PROVIDED BY APPLICABLE LAW.
28.4 LESSOR Actions in Certain Jurisdictions . Any action by LESSOR pursuant to Article 28.3 may be brought in (a) any Court of competent jurisdiction in Mexico City, Mexico, (b) any Court of competent jurisdiction in the jurisdiction where the Aircraft is located or operating, and/or (c) the Federal District Court for the Central District of California and/or the Superior Court for the State of California in Los Angeles, California.
28.5 Personal Jurisdiction . LESSEE agrees to submit to personal jurisdiction in the courts of any jurisdiction to which LESSEE flies the Aircraft or in which the Aircraft is located.
28.6 Service of Process . The parties hereby consent to the service of process (i) in the manner directed by any of the courts referred to above, (ii) in accordance with Section 415.40 of the California Code of Civil Procedure by mailing copies of the summons and complaint to the person to be served by first-class mail to the address set forth in Article 26.2, postage prepaid, return receipt requested, (iii) in one of the manners specified in Article 26.1 or (iv) in accordance with the Hague Convention, if applicable.

	  	100	  	ARTICLE 28	
	  		  	GOVERNING LAW AND JURISDICTION	

28.7 Prevailing Party in Dispute . If any legal action or other proceeding is brought in connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to recover reasonable attorneys’ fees and other costs incurred in such action or proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre- and post-judgment Default Interest.
28.8 Future Amendments or Agreements . With respect to any amendments to this Lease or the other Operative Documents or any other agreements to be entered into between LESSEE and LESSOR after the date of execution of this Lease in connection with the leasing of the Aircraft, including any amendment to this Lease which may be executed pursuant to Article 14.3 (“ Future Agreements ”), LESSEE and LESSOR agree that (i) Future Agreements will in all respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding the conflict Laws of the State of California) and (ii) LESSEE and LESSOR will irrevocably submit to the non-exclusive jurisdiction of the Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles in any suit, action, claim or proceeding seeking to enforce any provision of the Future Agreements, including any claim or proceeding seeking enforcement of LESSOR’s rights and remedies arising under the Cape Town Convention (to the extent the same is applicable to the transactions contemplated herein).
28.9 Waiver . TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF LESSEE AND LESSOR HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY. EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO IN ARTICLE 28.2, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

	  	101	  	ARTICLE 28	
	  		  	GOVERNING LAW AND JURISDICTION	

 	ARTICLE 29	MISCELLANEOUS	
29.1 Press Releases . The parties will give copies to one another, in advance if possible, of all news, articles and other releases provided to the public media regarding this Lease or the Aircraft.
29.2 Power of Attorney . LESSEE hereby irrevocably appoints LESSOR as its attorney for the purpose of putting into effect the intent of this Lease following an Event of Default, including without limitation, the return, repossession, deregistration and exportation of the Aircraft. To evidence this appointment, LESSEE has executed the Power of Attorney in substantially the form of Exhibit H. LESSEE will take all steps required under the Laws of the State of Registration to provide such power of attorney to LESSOR.
29.3 LESSOR Performance for LESSEE . The exercise by LESSOR of its remedy of performing a LESSEE obligation hereunder is not a waiver of and will not relieve LESSEE from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.
29.4 LESSOR’s Payment Obligations . Any obligation of LESSOR under this Lease to pay or release any amount to LESSEE is conditioned upon (i) all amounts then due and payable by LESSEE to LESSOR under this Lease or under any other agreement between LESSEE and LESSOR or a direct or indirect subsidiary of LESSOR having been paid in full, (ii) all amounts then due and payable by LESSEE under any aircraft or aircraft equipment lease agreement which is managed by LESSOR on behalf of another Person having been paid in full and (iii) no Default or Event of Default having occurred and continuing hereunder at the time such payment or release of payment is payable to LESSEE.
29.5 Application of Payments . Any amounts paid or recovered in respect of LESSEE liabilities hereunder may be applied to Rent, Default Interest, fees or any other amount due hereunder in such proportions, order and manner as LESSOR determines. LESSOR will promptly notify LESSEE of any such application if such application contradicts LESSEE’s instructions thereon.
29.6 Usury Laws . The parties intend to contract in strict compliance with the usury Laws of the State of California and, to the extent applicable, the U.S. Notwithstanding anything to the contrary in the Operative Documents, LESSEE will not be obligated to pay Default Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by LESSOR in connection with the Operative Documents. During any period of time in which the then-applicable highest lawful rate is lower than the Default Interest rate, Default Interest will accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate is greater than the Default Interest rate, then LESSEE will pay Default Interest at the highest lawful rate until the Default Interest which is paid by LESSEE equals the amount of interest that would have been payable in accordance with the interest rate set forth in Article 5.7.

	  	102	  	ARTICLE 29	
	  		  	MISCELLANEOUS	

29.7 Delegation by LESSOR . Without contravening any terms and provisions hereof, LESSOR may delegate to any Person(s) all or any of the rights, powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and conditions as LESSOR in its absolute discretion thinks fit.
29.8 Confidentiality . The Operative Documents and all non-public information obtained by either party about the other are confidential and are between LESSOR and LESSEE only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal advisors; as required in connection with any filings of this Lease in accordance with Article 14; in connection with LESSOR’s potential sale of the Aircraft or assignment of this Lease; as required for enforcement by either party of its rights and remedies with respect to this Lease or as required by applicable Law) without the prior written consent of the other party. If any disclosure will result in an Operative Document becoming publicly available, LESSEE and LESSOR will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of such Operative Document.
29.9 Rights of Parties . The rights of the parties hereunder are cumulative, not exclusive, may be exercised as often as each party considers appropriate and are in addition to its rights under general Law. The rights of one party against the other party are not capable of being waived or amended except by an express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or amendment of that or any other such right. Any defective or partial exercise of any such rights will not preclude any other or further exercise of that or any other such right and no act or course of conduct or negotiation on a party’s part or on its behalf will in any way preclude such party from exercising any such right or constitute a suspension or any amendment of any such right.
29.10 Further Assurances . Each party agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by Law, reasonably requested by the auditors of the other party or requested by the other party to establish, maintain or protect the rights and remedies of the requesting party or to carry out and effect the intent and purpose of this Lease.
29.11 Translations of Lease . If this Lease is translated into another language, whether or not signed by LESSEE and LESSOR in such other language, solely the terms and provisions of this English version of the Lease will prevail in any dispute.
29.12 Use of Word “including” . The term “ including ” is used in this Lease without limitation.

	  	103	  	ARTICLE 29	
	  		  	MISCELLANEOUS	

29.13 Headings . All article and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section will be interpreted as a reference to such article, paragraph or section of this Lease.
29.14 Invalidity of any Provision . If any of the provisions of this Lease become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
29.15 Negotiation . The terms of this Lease are agreed by LESSOR from its principal place of business in Los Angeles, California.
29.16 Time is of the Essence . Time is of the essence in the performance of all obligations of the parties under this Lease and, consequently, all time limitations set forth in the provisions of this Lease will be strictly observed.
29.17 Amendments in Writing . The provisions of this Lease may only be amended or modified by a writing executed by LESSOR and LESSEE.
29.18 Consents Not to be Delayed . If any of the provisions of this Lease require the consent of any party hereto, such consent shall not be unreasonably delayed.
29.19 Counterparts . This Lease may be executed in any number of identical counterparts, each of which will be deemed to be an original, and all of which together will be deemed to be one and the same instrument when each party has signed and delivered one such counterpart to the other party.
29.20 Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or e-mail will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or e-mail will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
29.21 Entire Agreement . The Operative Documents constitute the entire agreement between the parties in relation to the leasing of the Aircraft by LESSOR to LESSEE and supersede all previous proposals, agreements and other written and oral communications in relation hereto. The parties acknowledge that there have been no representations, warranties, promises, guarantees or agreements, express or implied, except as set forth in this Lease.

	  	104	  	ARTICLE 29	
	  		  	MISCELLANEOUS	

IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be executed by their respective officers as of April 20, 2007.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	/s/ John L. Plueger	 		 	By:	 	/s/ Alfonso Ascencio Triujeque	
					
Name:	 	John L. Plueger	 		 	Name:	 	Alfonso Ascencio Triujeque	
					
Its:	 	President and Chief Operating Officer	 		 	Its:	 	General Counsel	
SIGNATURE PAGE

 	EXHIBIT A	AIRCRAFT DESCRIPTION	

Aircraft Manufacturer and Model:	  	Airbus A319-100	
		
Specification:	  	LESSEE’s Baseline Specification as set forth in Attachment 1 to this Exhibit A	
		
Seating Configuration:	  	144 Y class as set forth in Attachment 1 to this Exhibit A	
		
Manufacturer’s Serial Number:	  	Per Estoppel Certificate	
		
Maximum Gross Takeoff Weight:	  	70.0 tons	
		
Engine Manufacturer and Model:	  	IAE V2524-A5	
		
Engine Serial Numbers:	  	Per Estoppel Certificate	
		
Engine Takeoff Thrust Rating:	  	24,480 pounds per FAA type certificate data sheet	
 
EXHIBIT A
AIRCRAFT DESCRIPTION

ATTACHMENT 1 TO EXHIBIT A
See attached pages
 
EXHIBIT A
AIRCRAFT DESCRIPTION

ATTACHMENT I TO EXHIBIT A
See attached pages
 
EXHIBIT A
AIRCRAFT DESCRIPTION

Volaris May/06 A319 SCN List
STANDARD SPECIFICATION Ref. Issue 4.1

EPAC Ref.	  	Title	
	  	Introduction of A319-100 Standard Specification at Issue 5	
ATA 02 Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats - all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take - off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BEE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03 Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62.5 T / MZW 58.5 T	
03.20.400/02	  	Design weights increased to MTOW 70.0 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11 Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier - English below (vertical) and second language (Horiz.) - Airsigna	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine - bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steering markers (+/- 95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external markings	
ATA 21 Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	

Volaris May/06 A319 SCN List
STANDARD SPECIFICATION Ref. Issue 4.1

EPAC Ref.	  	Title	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22 Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23 Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation - BFE	
23.11.115/14	  	Installation of one HF system - COLLINS 900 - DIGITAL ATENNA COUPLER - BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit hand microphone alternate equipment - Holmberg	
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) - Honeywell	
Global	  	IFE system- PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) - PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes - GLOBAL	
ATA 24 Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25 Cabin & cockpit	
Global	  	Cabin layout (144 pax - DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door - Increased Volume	
Global	  	Cargo compartment - full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin - installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double- sided adhesive tape	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35,131/03	  	Installation of non-electrical galley catering equipment (BFE) (change 1)	
25.35.132/02	  	Installation of non-electrical galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360VV)	

Volaris May/06 A319 SCN List
STANDARD SPECIFICATION Ref. Issue 4.1

EPAC Ref.	  	Title	
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26 Fire protection	
26.21.104/XX	  	Engine fire exting. alternate equipment - PACIFIC SCIENTIFIC	
ATA 27 Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29 Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) - EATON AEROSPACE	
29.21.104/07	  	Electropumps - EATON AEROSPACE	
ATA 30 Ice and Rain Protection	
30.11.101/01	  	Wing anti-ice valve alternate equipment - Honeywell	
ATA 31 Indicating/Recording	
31.33.050/24	  	FDIMU - Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) - HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
31.60.120/01	  	Installation of LCD EIS2 - Thales Avionics	
ATA 32 Landing gear	
32.00.100/02	  	Installation of full electrically signalled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
32.40.113/25	  	Installation of wheels and brakes - GOODRICH DURACARB	
32.41.111/01	  	Main Landing Gear (MLG) tire selection - MICHELIN	
32.41.120/05	  	Nose Landing Gear (NLG) tire selection - MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33 Lights	
33.50.110/41	  	Installation of floor mounted EEPMS - Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34 Navigation	
34.10.117/04	  	ADIRS alternate equipment - HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes - Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment - BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability - Rockwell Collins	
34.42.101/07	  	Radio altimeter - alternate equipment	
3442.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS - change 7	

Volaris May/06 A319 SCN List
STANDARD SPECIFICATION Ref. Issue 4.1

EPAC Ref.	  	Title	
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment - ROCKWELL COLLINS	
	
ATA 35 Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36 Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38 Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46 ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49 APU	
49.00.105/04	  	IAPU alternate equipment - ALLIED SIGNAL 131-9A	
ATA 51 Structure	
51.22.201/02	  	Basic paint system selection - PPG AEROSPACE	
ATA 52 Doors	
52.51.100/00	  	Installation of intrusion & penetration resistant cockpit door	
ATA 55 Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge - Stainless steel	
ATA 56 Windows	
56.10.102/02	  	Cockpit alternate front windows - SAINT-GOBAIN SULLY	
56.10.102/13	  	Cockpit alternate lateral windows - SAINT-GOBAIN SULLY	
ATA 72 Engines	
72.00.119/XX	  	Engines selection	

 
																					
Pos.	 	  	CMS	  	IDN	  	ATA	  	PN	  	Title	  	Manufactor	  	Ctry.	  	Qty.	  	UoM	
 	1	  	  	6911006000	  	83488344	  	23-11-33	  	822-0330-020	  	HF Transceiver	  	Rockw. Collins	  	USA	  	1	  	ea	
 	2	  	  	6911020400	  	86237300	  	23-11-33	  	822-4987-003	  	HF Coupler	  	Rockw. Collins	  	USA	  	I	  	ea	
 	3	  	  	6954477100	  	93161181	  	23-33-02	  	RDAX1301-5A	  	Main Multiplexor	  	Panasonic	  	USA	  	I	  	ea	
 	4	  	  	6950490900	  	86547163	  	23-33-02	  	RDAX7095-01	  	CD Player	  	Panasonic	  	USA	  	1	  	ea	
 	5	  	  	6954476600	  	93828291	  	23-33-02	  	RDAX4332-01	  	SEB	  	Panasonic	  	USA	  	48	  	ea	
 	6	  	  	6954592600	  	50239011	  	23-33-02	  	RDAX6740-54	  	PCU r/h	  	Panasonic	  	USA	  	72	  	ea	
 	7	  	  	6954592700	  	50239008	  	23-33-02	  	RDAX6739-54	  	PCU l/h	  	Panasonic	  	USA	  	72	  	ea	
 	8	  	  	6954634100	  	50256012	  	23-33-02	  	RDAM7902-72	  	Cable assy	  	Panasonic	  	USA	  	22	  	ea	
 	9	  	  	6954634200	  	50256015	  	23-33-02	  	RDAM7902-72	  	Cable assy	  	Panasonic	  	USA	  	22	  	ea	
 	10	  	  	6954661700	  	50289508	  	23-33-02	  	RDAM7902-77	  	Cable assy	  	Panasonic	  	USA	  	2	  	ea	
 	11	  	  	6954661800	  	50289513	  	23-33-02	  	ROAM7902-78	  	Cable assy	  	Panasonic	  	USA	  	2	  	ea	
 	12	  	  	6954590400	  	50250843	  	23-36-02	  	RDAA902573-02	  	VCC	  	Panasonic	  	USA	  	1	  	as	
 	13	  	  	6950794200	  	89029658	  	23.36-02	  	RDAV3007-06	  	SCU	  	Panasonic	  	USA	  	1	  	ea	
 	14	  	  	6954685900	  	50424964	  	23-36-02	  	RDAM980132Y	  	s/w	  	Panasonic	  	USA	  	1	  	ea	
 	15	  	  	6954592800	  	50194784	  	23-36-02	  	RDAV1306-01	  	DVD Payer	  	Panasonic	  	USA	  	2	  	ea	
 	16	  	  	6954662100	  	50292998	  	23-36-20	  	RDAV9843-32	  	LCD Monitor 8.4” r/h	  	Panasonic	  	USA	  	8	  	ea	
 	17	  	  	6954662200	  	50293009	  	23-36-20	  	R0AV9844-02	  	LCD Monitor 8.4” l/h	  	Panasonic	  	USA	  	8	  	ea	
 	18	  	  	6944842500	  	50370859	  	27-70-00	  	ATB01-12-570	  	Bonding Cable	  	K.I.D.	  	D	  	36	  	ea	
 	19	  	  	6944981800	  	50191473	  	27-70-00	  	Z270H3201016	  	Cable Assy	  	K.I.D.	  	D	  	96	  	ea	
 	20	  	  	6944937000	  	50193198	  	27-70-00	  	Z280H1040012	  	Outlet Plate	  	K.I.D.	  	D	  	96	  	ea	
 	21	  	  	6944877300	  	87504492	  	27-70-00	  	Z280H1500112	  	1SPSS in use LED	  	K.I.D.	  	D	  	48	  	ea	
 	22	  	  	6944791400	  	50063298	  	27-70-00	  	Z240H3040000	  	Cutlet Unit i	  	K.I.D.	  	D	  	96	  	ea	
 	23	  	  	5944843800	  	89900313	  	27-70-00	  	Z280113105017	  	Cable Assy	  	K.I.D.	  	D	  	48	  	ea	
 	24	  	  	6944926200	  	50063302	  	27-70-00	  	Z285110122110	  	Power Unit	  	K.I.D.	  	D	  	48	  	ea	
 	25	  	  	6977610300	  	50418247	  	25-21-41	  	3510A380-31-021	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	26	  	  	6977810400	  	50418252	  	25-21-41	  	3510A380-31-011	  	Seat tripple Y/C	  	Recaro	  	D	  	19	  	ea	
 	27	  	  	4977610000	  	50418236	  	25-21-41	  	3510A380-31-051	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	28	  	  	6977610100	  	50418238	  	25-21-41	  	3510A380-31-061	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	29	  	  	6977610500	  	50418255	  	25-21-41	  	3510A380-31-111	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	30	  	  	6977610270	  	504l242	  	25-21-41	  	3510A380-31-121	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	31	  	  	6977611200	  	50418287	  	25-21-41	  	3510A380-32-021	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	32	  	  	6977611000	  	50418289	  	26-21-41	  	3510A380-32-011	  	Seat tripple Y/C	  	Recaro	  	D	  	17	  	ea	
 	33	  	  	6977610800	  	50418261	  	25-21-41	  	3510A380-32-031	  	Seat tripple Y/C	  	Recaro	  	D	  	2	  	ea	
 	34	  	  	6977610700	  	50418259	  	25-21-41	  	3510A380-32-041	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	35	  	  	6977610600	  	50418258	  	25-21-41	  	3510A380-32-051	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	36	  	  	6977611100	  	50418293	  	25-21-41	  	3510A380-32-111	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	37	  	  	6977610900	  	50418283	  	25-21-41	  	3510A380-32-121	  	Seat tripple Y/C	  	Recaro	  	D	  	1	  	ea	
 	38	  	  	6920983800	  	50436813	  	25-26-30	  	601255-1	  	MCD	  	Driessen	  	USA	  	1	  	ea	
 	39	  	  	6920983700	  	50436800	  	25-26-30	  	601256-1	  	MCD	  	Driessen	  	USA	  	1	  	ea	
 	40	  	  	6946433500	  	85730584	  	25-26-50	  	1101LS74	  	Curtain	  	Lantal	  	CH	  	12	  	m	
 	41	  	  	6920983300	  	50436837	  	25-27-60	  	601254-1	  	Stowage Ctr. Aft	  	Driessen	  	USA	  	1	  	ea	
 	42	  	  	6920983100	  	50436829	  	25-27-60	  	601257-1	  	Closet Fwd l/h	  	Driessen	  	USA	  	1	  	ea	
 	43	  	  	6920983000	  	50436823	  	25-27-60	  	601258-1	  	Closet Fwd r/h	  	Driessen	  	USA	  	1	  	ea	
 	44	  	  	6925412200	  	92096122	  	25-28-20	  	6513-9353-01	  	Carpet	  	Anker	  	D	  	124	  	m2	
 	45	  	  	6920983200	  	50436831	  	25-30-00	  	601203-101	  	Galley G1	  	Driessen	  	USA	  	1	  	ea	

 
																					
Pos.	 	  	CMS	  	IDN	  	ATA	  	PN	  	Title	  	Manufactor	  	Ctry.	  	Qty.	  	UoM	
 	46	  	  	6933830100	  	85841530	  	25-35-10	  	418-0001-23	  	Coffe Maker	  	B/E Aerospace	  	USA	  	2	  	ea	
 	47	  	  	6920984900	  	50471447	  	25-35-20	  	BB001239	  	Std Container	  	Driessen	  	NL	  	12	  	ea	
 	48	  	  	6920354930	  	50471440	  	25-35-20	  	TG502001	  	Trolley Waste F/S	  	Driessen	  	NL	  	1	  	ea	
 	49	  	  	6920985400	  	50471496	  	25-35-20	  	TH500005	  	Trolley Waste H/S	  	Driessen	  	NL	  	2	  	ea	
 	50	  	  	6920984800	  	50471438	  	25-35-20	  	TK500020	  	Trolley F/S	  	Driessen	  	NL	  	2	  	ea	
 	51	  	  	6920985000	  	50471442	  	25-35-20	  	TL500017	  	Trolley H/S	  	Driessen	  	NL	  	2	  	ea	
 	52	  	  	6920985200	  	50471488	  	25-35-20	  	WA500004	  	Waste Bin	  	Driessen	  	NL	  	1	  	ea	
 	53	  	  	6920985300	  	50471494	  	25-35-20	  	WB500004	  	Waste Bin	  	Driessen	  	NL	  	2	  	ea	
 	54	  	  	6933631100	  	85841688	  	25-35-30	  	416-0201-5	  	CM Rail	  	B/E Aerospace	  	USA	  	2	  	ea	
 	55	  	  	8933230000	  	82688578	  	25-60-10	  	1151324-1	  	ELT	  	Honeywell	  	USA	  	1	  	es	
 	56	  	  	6911120300	  	82700196	  	25-60-10	  	93N6035	  	Driessen	  	ELTA	  	F	  	1	  	ea	
 	57	  	  	8911120100	  	82700463	  	25-60-10	  	95N6088	  	ELT	  	ELTA	  	F	  	1	  	ea	
 	58	  	  	6911120200	  	82700579	  	25-60-10	  	95N6089	  	Programming Box	  	ELTA	  	F	  	1	  	ea	
 	59	  	  	8903741500	  	86007339	  	25-65-00	  	502745E2258	  	Seat Belt	  	AM - Safe	  	USA	  	144	  	ea	
 	60	  	  		  		  		  		  	Seat Belt Demo	  		  		  	3	  		
 	61	  	  	6937822900	  	92384250	  	25-66-00	  	3505-151-92	  	Life Vest Pax	  	Hoover	  	USA	  	144	  	ea	
 	62	  	  	6937823100	  	92384411	  	25-66-00	  	3505-151C92	  	Life Vest Crew	  	Hoover	  	USA	  	8	  	ea	
 	63	  	  	6937823000	  	92384535	  	25-66-00	  	3505-151D92	  	Life Vest Demo	  	Hoover	  	USA	  		  	ea	
 	64	  	  		  		  	34-43-11	  	751-4081-911	  	TCAS Antenna	  	ACSS	  	USA	  	2	  	ea	
 	65	  	  		  		  	34-43-34	  	751-7900-10003	  	TCAS II Computer	  	ACSS	  	USA	  	1	  	ea	
 	66	  	  	6986205100	  	72556330	  	35-32-10	  	802300-14	  	PBE	  	Avox Systems	  	USA	  	4	  	ea	
 	67	  	  	6986221300	  	89004675	  	35-32-10	  	803436-22	  	PBE Bracket	  	Avox Systems	  	USA	  	2	  	ea	
 	68	  	  		  		  		  		  		  		  		  		  		

 

 

 	EXHIBIT B	PARTICIPATION AGREEMENT	
This Participation Agreement is made this      day of             ,          (the “ Participation Agreement ”)
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ ILFC ”); and	
 
(2)	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”)	
RECITALS
 
(A)	Pursuant to the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“ AIRBUS ”) dated as of June 17, 2001, as further amended (the “ Purchase Agreement ”) and the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “ G.T.A. ”), ILFC has agreed to purchase from AIRBUS certain Airbus A319-100 model aircraft, including the aircraft bearing as of today manufacturer’s serial number [            ] and scheduled for delivery in April 2008 (the “ Aircraft ”);	
 
(B)	Pursuant to the Product Support Agreement (Exhibit E) applicable to the Purchase Agreement (the “ Support Agreement ”), AIRBUS has agreed to provide certain product support to ILFC;	
 
(C)	Pursuant to the Aircraft Lease Agreement between ILFC and LESSEE dated as of April 20, 2007 (the “ Lease Agreement ”), ILFC has agreed to lease the Aircraft to LESSEE;	
 
(D)	ILFC and LESSEE have agreed to enter into this Participation Agreement:	
IT IS NOW HEREBY AGREED AS FOLLOWS:
1. Authorization for LESSEE to Participate . ILFC hereby authorizes LESSEE to participate in the following activities in connection with the delivery of the Aircraft:
(a) to inspect, pursuant to Clause 7.1 of the G.T.A., the manufacture of the Aircraft and the materials and parts thereto; and

	  	108	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

(b) to attend and observe the acceptance tests of the Aircraft referred to in Clause 8.1 of the G.T.A.; and
(c) to receive, pursuant to Clause 15 of the Support Agreement, the technical publications set forth in Appendix 3 hereto; and
(d) to receive the benefit of a product support allowance as set forth in Appendix 3 hereto.
2. Effectivity of Participation Agreement . This Participation Agreement shall be effective from the date hereof until the earliest of:
(a) the occurrence of an Event of Default as defined in the Lease Agreement;
(b) notification by ILFC to LESSEE of the termination hereof; or
(c) transfer of Aircraft title by AIRBUS to ILFC or its designee.
3 Conditions of Participation . This Participation Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with the following provisions of the G.T.A. and the Support Agreement (copies of which are attached hereto) as if LESSEE had been named “Buyer” of the Aircraft under such agreements:
(i) Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any LESSEE representative, (bb) loss or damage to property of any LESSEE representatives and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of LESSEE’s representatives, and
(ii) Clauses 16.9 and 18.5 of the Support Agreement.
(b) So long as this Participation Agreement is in full force and effect, LESSEE and not ILFC will be responsible for the liabilities and obligations set forth in section 3(a) above.
(c) For avoidance of doubt, even while this Participation Agreement is in full force and effect, ILFC will remain responsible for compliance with Clauses 7.2 and 8.5 of the G.T.A. to the extent of (aa) injury to or death of any ILFC representative, (bb) loss or damage to property of any ILFC representative and (cc) liabilities, damages, losses, costs and expenses of AIRBUS and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of ILFC’s representatives.

	  	109	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

(d) Except with respect to events occurring prior to termination of the Participation Agreement, upon termination of this Participation Agreement, ILFC shall once again be bound by Clauses 7.2 and 8.5 of the G.T.A. and Clauses 16.9 and 18.5 of the Support Agreement with respect to the Aircraft.
(e) Other than with respect to the obligations expressly assumed by LESSEE under this Participation Agreement as set forth in section 3(a) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
(f) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in sections 3(a) and (b) above, modify in any respect whatsoever its contractual rights under the said agreements.
(g) LESSEE shall not be appointed as ILFC’s agent and shall not be permitted to act on behalf or in place of ILFC without the express written authorization of ILFC and nothing contained herein shall be construed as to give such authorization.
4. Notification
(a) This Participation Agreement shall be notified by ILFC to AIRBUS by courier service immediately after the execution hereof. AIRBUS shall not be deemed to have received notice of any of the provisions hereof prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix 1 hereto.
(b) On termination of this Participation Agreement pursuant to either section 2(a) or (b) hereof, ILFC shall immediately notify AIRBUS by courier service of such termination. AIRBUS shall not be deemed to have received notice of such termination prior to receipt of notice as provided in section 4(c) hereof in the form of Appendix 2 hereto. AIRBUS can rely on such notice without further inquiry.

	  	110	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

(c) All notices and requests required or authorized under this Participation Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:

ILFC shall be addressed at:	
		
	 	10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067
U.S.A.	
			
	 	Attention:	  	Senior Vice PresidentCTechnical	
			
	 	Fax:	  	1-310-788-1990	
	 	Telephone:	  	1-310-788-1999	
	
LESSEE shall be addressed at:	
		
	 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)
Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01012 México, D.F.
México	
			
	 	Attention:	  	Finance Director	
			
	 	Fax:	  	+503-298-3064	
	 	Telephone:	  	+503-298-1560	
	
AIRBUS shall be addressed at:	
		
	 	1, rond-point Maurice Bellonte
31707 Blagnac Cedex
France	
			
	 	Attention:	  	VP, Contracts Administration & Delivery Transactions	
			
	 	Fax:	  	33-5-61-93-41-95	
	 	Telephone:	  	33-5-61-93-32-16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.

	  	111	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

5. Survival of Obligations . The obligations of LESSEE set forth in section 3(a) with respect to events occurring prior to termination of this Participation Agreement will survive termination of the Participation Agreement.
6. Provision of Referenced Clauses . LESSOR shall provide LESSEE with the copies of the clauses of the G.T.A. and Support Agreement referenced and required herein.
7. Assignment . The rights and obligations under this Participation Agreement are personal to the parties and shall not be assigned, transferred, sold or otherwise disposed of by either of the parties hereto.
8. Applicable Law and Jurisdiction . THIS PARTICIPATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.
9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Participation Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Participation Agreement.
IN WITNESS WHEREOF , the parties have caused this Participation Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	 	 		 	By:	 	 	
					
Its:	 	 	 		 	Its:	 	 	

	  	112	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

APPENDIX 1
[DATE]
BY COURIER
AIRBUS S.A.S.
1, rond-point Maurice Bellonte
31707 Blagnac Cedex
France
Attention : VP, Contracts Administration & Delivery Transactions

Re:	  	ILFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.:
PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ] (the “Aircraft”)	
Dear Sirs,
Pursuant to Section 4(a) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. dated April 20, 2007, we advise you that pursuant to the Participation Agreement (a copy of which is attached hereto),CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. has been authorized by ILFC to participate with respect to the Aircraft. This authorization shall be effective on acknowledgment of this letter by you.

	  	113	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

We confirm for your benefit the provisions of Sections 3(c), 3(d), 3(e) and 3(f) contained therein.

Yours faithfully,	

for and on behalf of
INTERNATIONAL LEASE FINANCE CORPORATION	
CC: CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
AIRBUS S.A.S. confirms receipt of this notice and agrees to the terms of Section 3 of the Participation Agreement.

By:	 	 	
		
Its:	 	 	
		
Date:	 	 	

	  	114	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

APPENDIX 2
[DATE]
BY COURIER
AIRBUS S.A.S.
1, rond-point Maurice Bellonte
31707 Blagnac Cedex
France
Attention : VP, Contracts Administration & Delivery Transactions

Re:	  	ILFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.:
PARTICIPATION AGREEMENT FOR AIRBUS A319-100 MSN [            ]	
Dear Sirs,
Pursuant to Section 4(b) of the Participation Agreement between ILFC and CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. dated             ,         , we advise you that the authorization provided therein for CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. is terminated with immediate effect.

Yours faithfully,	

for and on behalf of
INTERNATIONAL LEASE FINANCE CORPORATION	
CC: CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.

	  	115	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

APPENDIX 3
 
a)	TECHNICAL PUBLICATIONS	
As selected by LESSEE from the Technical Data and Documentation Index attached to this Appendix 3
 
b)	PRODUCT SUPPORT ALLOWANCE	
A product support allowance in the amount of *****, which will be valid to procure support including field service and training (pursuant to Clauses 16 and 18 of the Support Agreement, respectively), manuals, AIRBUS proprietary spare parts, and such other product support goods and services as can be purchased through AIRBUS.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	116	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

TECHNICAL DATA INDEX
The following index identifies the Technical Data provided in support of the Aircraft. The explanation of the table is as follows:

NOMENCLATURE	  	Self-explanatory.	
		
ABBREVIATED DESIGNATION (Abbr)	  	Self-explanatory.	
FORM

OL-A	  	ON-LINE through Airbus On-Line Services: Advanced Consultation and Navigation System	
		
CD-A	  	CD-ROM: Advanced Consultation and Navigation System	
		
CD-P	  	CD-ROM: in PDF—Portable Document Format	
		
D	  	DISKETTE (Floppy Disk)	
		
DD	  	DIGITAL DATA. Stands generally for SGML format on CD-ROM/	
		
DVD	  	DVD—Digital Versatile Disk	
		
P1	  	PRINTED ONE SIDE. Refers to manuals in paper with print on one (1) side of the sheets only.	
		
P2	  	PRINTED BOTH SIDES. Refers to manuals with print on both sides of the sheets.	

	  	117	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

STF—Revision 6.1 dated January 2003
ALL A/C types (NA to A380)
Exhibit G—2/9

TYPE	 	C	  	CUSTOMIZED. Refers to manuals which are applicable to an individual Airbus customer/operator fleet or aircraft.	
			
	 	G	  	GENERIC. Refers to manuals that are for all aircraft types/models/series.	
			
	 	E	  	ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.	
			
	 	P	  	PRELIMINARY. Refers to preliminary data or manuals which may consist of either:	
			
	 		  	•     one-time issue not maintained by revision service, or	
			
	 		  	•     preliminary issues maintained by revision service until final manual or data delivery, or	
			
	 		  	•     supply of best available data under final format with progressive completion through revision service.	
			
ATA	 		  	Manuals established in general compliance with ATA 100 Revision 21 (for WB aircraft)—Revision 23 (for SA aircraft)—Revision 26 (for LR aircraft)—and digital Standards established in general compliance with ATA Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance. Subsequent revisions of the ATA Specification will be considered.	
		
QUANTITY (Qty)	  	Self-explanatory.	
		
DELIVERY (Deliv)	  	Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day.	
			
	 		  	The number of days indicated shall be rounded up to the next regular revision release date.	

	  	118	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

APPENDIX 4
[Copies of Clauses 7.2 and 8.5 of the General Terms Agreement and Clauses 16.9 and 18.5 of the Support Agreement]

	  	119	  	EXHIBIT B	
	  		  	PARTICIPATION AGREEMENT	

7.2	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO OR DEATH OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECK OUT OR INSPECTIONS UNDER THIS CLAUSE 7) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER OR ITS REPRESENTATIVES ARISING OUT OF OR IN CONNECTION WITH ANY SUCH TESTS, CHECK OUT AND INSPECTIONS UNDER THIS CLAUSE 7, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY TESTS, CHECK OUT, INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATH OR INJURY, THE LIABILITY FOR WHICH HAS SEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 7.2, THE FORMER PARTY SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER (FOR THE PURPOSE OF THIS SUB-CLAUSE 7.2, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER).
 
7-1

8.5	THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATHS OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8) AND FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES), CAUSED BY THE BUYER, ARISING OUT OF OR IN CONNECTION WITH THE OPERATION OF THE AIRCRAFT DURING ANY GROUND AND FLIGHT TESTS UNDER THIS CLAUSE 8, EXCEPT FOR ANY SUCH LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.	
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE 8, (II) FOR LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER’S SAID REPRESENTATIVES, OR (III) ARISING OUT OF OR CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE BUYER’S SAID REPRESENTATIVES.
IN THE EVENT ANY CLAIMS IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY (OR ITS RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES) FOR DAMAGES FOR DEATHS OR INJURY, THE LIABILITY FOR WHICH HAS BEEN ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUB-CLAUSE 8.5, THE FORMER SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENSE THEREOF, OR TO EFFECT ANY SETTLEMENT, WHICH IT, IN ITS OPINION, DEEMS PROPER. FOR THE PURPOSE OF THIS SUB-CLAUSE 8.5, A CLAIM OR SUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A CLAIM OR SUIT AGAINST THE SELLER.
 
8-2

16.9	INDEMNITY	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFY AND HOLD HARMLESS THE SELLER, THE MANUFACTURER AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (EXCEPTING INJURIES TO AND DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY, HOWSOEVER ARISING OUT OF OR IN CONNECTION WITH PERFORMANCE OF THE SERVICES UNDER THIS CLAUSE.
THE SELLER SHALL HEREBY INDEMNIFY AND HOLD HARMLESS. THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER DURING THE PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
FOR THE PURPOSE OF THIS SUB-CLAUSE 16.8, THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER SHALL BE DEEMED TO INCLUDE THE SELLER REPRESENTATIVES AND/OR CUSTOMER SUPPORT MANAGER REFERRED TO IN SUB-CLAUSES 16.1.1 AND 16.2 ABOVE.
 
Exh. E-60

Exhibit “E”
 
18.5	Indemnity and Insurance	
THE BUYER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFIES AND HOLDS HARMLESS THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, CONSEQUENTIAL DAMAGES, LOSS OF USE, BUSINESS INTERRUPTION, COSTS AND EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATH OF SELLER’S REPRESENTATIVES PARTICIPATING IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROLS OR IN GENERAL PROVIDING THE SERVICES UNDER THIS CLAUSE), AND FOR LOSS OF OR DAMAGE TO PROPERTY ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OF SERVICES UDDER THIS CLAUSE 18, WHETHER THE SAID LIABILITIES, ARISE DURING OR AFTER THE COMPLETION OF THE TRAINING COURSE.
 
Exh. E-70

Exhibit “E”
 
THE SELLER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES FOR INJURIES TO OR DEATHS OF SELLER’S SAID REPRESENTATIVES DURING THEIR PARTICIPATION IN ANY TRAINING, TESTS, CHECK OUTS OR CONTROL OR IN GENERAL PERFORMANCE OF SERVICES UNDER THIS CLAUSE.
IN NO EVENT WILL THE BUYER, ITS INSURERS OR REPRESENTATIVES MAKE OR CAUSE TO BE MADE A CLAIM OR LAWSUIT AGAINST THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO IN CONNECTION WITH ANY CLAIM OR LAWSUIT BROUGHT AGAINST THE BUYER, NOR WILL THE BUYER, ITS INSURERS OR REPRESENTATIVES ADD AS A PARTY DEFENDANT THE SELLER, THE MANUFACTURER, AEROFORMATION OR ASCO TO ANY SUCH CLAIM OR LAWSUIT OR ANY ACTION IN CONNECTION THEREWITH.
FOR THE FLIGHT TRAINING PERIOD AS DESCRIBED IN SUB-CLAUSE 18.2.1.1 AND 18.2.1.2 THE BUYER SHALL:
 
 	(1)	INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE AGAINST THE SELLER, THE MANUFACTURER, AND AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTOR AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS IN RESPECT OF HULL ALL RISKS INSURANCE POLICY AND	
 
 	(2)	EFFECT INSURANCE TO COVER THIRD PARTY, PASSENGER AND FREIGHT LIABILITY RISKS ARISING DURING SAID FLIGHT TRAINING IN AN AMOUNT SATISFACTORY TO THE SELLER AND NAMING THE SELLER, THE MANUFACTURER, AEROFORMATION AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS AS ADDITIONAL INSUREDS. SUCH INSURANCE SHALL CONTAIN A CROSS-LIABILITY CLAUSE TO THE INTENT THAT EACH INSURED COVERED BY THE POLICY SHALL HAVE THE SAME PROTECTION AS WOULD HAVE BEEN AVAILABLE HAD SUCH POLICY BEEN ISSUED INDIVIDUALLY TO EACH OF THEM.	
THE BUYER SHALL DELIVER TO THE SELLER A CERTIFICATE OF INSURANCE EVIDENCING THE COVER REQUIRED BY THIS CLAUSE.
 
Exh. E-71

 	EXHIBIT C	CERTIFICATE OF INSURANCE (FOR LESSOR)	
[Refer to Aircraft Lease Agreement dated as of April 20, 2007 between LESSEE and LESSOR (the “ Lease ”). If applicable, insurance certificates from both the insurers and reinsurers will be provided. If there is a LESSOR’s Lender, include references to it where appropriate after references to LESSOR.]

To:	  	INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”)
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.	
			
Re:	  	CONCESIONARIA
VUELA COMPANIA DE
AVIACION, S.A. DE C.V.	 		
	  	(“ LESSEE ”)
Airbus A319-100	 		
	  	Manufacturer’s Serial No.:	 	[            ]	
	  	Registration Mark:	 	[Aircraft registration mark, or             	
	  		 	to mark place] (the “ Aircraft ”)	
The following security has subscribed to the following insurance and/or reinsurance policies:
[LIST APPLICABLE POLICY NUMBERS, COMPANIES & PERCENTAGES]
THIS IS TO CERTIFY THAT, as Insurance Brokers, we have effected Fleet Insurance in respect of aircraft owned or operated by LESSEE (including the Aircraft) as specified below.
AIRCRAFT HULL ALL RISKS
COVERING :
All risks of physical loss or damage to the Aircraft from any cause (subject only to the exclusions as specified below), for an Agreed Value of Aircraft in the amount of US$         [list amount calculated in accordance with Article ]
DEDUCTIBLES:
***** each and every loss (or such lesser amount as applicable to the rest of LESSEE’s fleet). Not applicable to Total Loss/Constructive Total Loss or Arranged Total Loss
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	120	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

GEOGRAPHICAL COVERAGE :
Worldwide
AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY
COVERING :
Aircraft Third Party, Passenger, Baggage, Cargo and Mail Liability and Airline General Third Party Liability (including Premises, Hangarkeepers, Products Liability and Contractual Liability) for combined single limit of not less than ***** (or such higher amount as LESSEE may carry on any other aircraft in its fleet) any one accident/occurrence (but in the aggregate in relation to Products Liability), extended to cover LESSEE’S liability under the Lease to the extent of the risks covered by the policy including war and allied perils under Extended Coverage Endorsement as per AVN 52E (however, the total War and Allied Perils Liability Coverage including Third Party War Risks must be the same amount as the combined single limit by the purchase of Excess Third Party War Risks insurance subject only to exclusions as specified below, unless otherwise agreed by LESSOR in writing
GEOGRAPHICAL LIMITS :
Worldwide
HULL WAR AND ALLIED PERILS
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	121	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

COVERING :
Hull War Risks as per LSW555.D, but including (a) confiscation or requisition (including by State of Registration and state where airline is domiciled), (b) hijacking or other unlawful seizure or wrongful exercise of control of the Aircraft or crew in flight (including any attempt at such seizure or control) and covering claims excluded from Hull All Risks Policy while Aircraft outside Assured’s control by reason of perils insured under this policy, for an Agreed Value of Aircraft in the amount of US$        [list amount calculated in accordance with Article ]
DEDUCTIBLE :
No deductible
GEOGRAPHICAL LIMITS :
Worldwide
AIRCRAFT SPARES ALL RISKS INSURANCE
COVERING :
All risks of physical loss or damage to Aircraft Parts or spares or Engines at all times when removed from the Aircraft from whatever cause, subject only to the exclusions specified below, including the risks set down in AVN 48B other than paragraphs (a) and (b) thereof (but including paragraph (a) in respect of transit risks) for limits of not less than:
***** any one location
***** any one sending
and covering:
With respect to an Engine, replacement cost
With respect to Parts, replacement cost
DEDUCTIBLE :
***** each and every loss
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	122	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

GEOGRAPHICAL COVERAGE :
Worldwide
CONTRACTUAL INDEMNITY
LESSEE has insurance coverage for the indemnities agreed to by LESSEE pursuant to Article of the Lease
PERIOD OF COVERAGE (ALL POLICIES)
From the Delivery Date of Aircraft to [EXPIRATION DATE]
It is further certified that LESSOR has an interest in respect of the Aircraft under the Lease. Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of the Insurance or (except as provided in the next sentence) until the expiry or agreed termination of the Lease or until the obligations under the Lease are terminated by any action of the Insured or LESSOR and in consideration of the Additional Premium it is confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that the provisions set forth below are specifically endorsed to the Policy. Notwithstanding the foregoing, if LESSEE has retained care, custody and control of the Aircraft even after such expiry or agreed termination of the Lease and LESSOR has not expressly agreed to insure the Aircraft, the Policy will remain in full force and effect until the earlier of expiry of the Insurance or the return of the Aircraft to LESSOR.
1. UNDER THE HULL (ALL RISKS AND HULL WAR AND ALLIED RISKS) AND AIRCRAFT SPARES INSURANCES
(a) [International Lease Finance Corporation ONLY-NO OTHER CONTRACT PARTIES] In respect of any claim on the Aircraft that becomes payable on the basis of a Total Loss, settlement will be made to, or to the order of LESSOR as sole loss payee, up to the Agreed Value. With respect to repairable damage to an Aircraft or Engine, LESSOR will receive all insurance proceeds in excess of ***** provided that upon receipt by the insurance broker of written notice of a material default on the part of LESSEE, all insurance proceeds which otherwise would be payable to LESSEE will be made directly to LESSOR. In respect of any other claim, settlement (net of any relevant policy deductible) will be made with such party(ies) as may be necessary to repair the Aircraft unless otherwise agreed after consultation between the Insurers and the Insured and, where necessary under the terms of the Lease, LESSOR. Such payments will only be made provided they are in compliance with all applicable laws and regulations.
(b) Insurers agree on a 50/50 settlement in terms of AVS 103.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	123	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

(c) Insurers have no right to replace the Aircraft on a Total Loss (arranged, constructive or otherwise).
(d) Insurers recognize that LESSEE and LESSOR have agreed that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.
(e) In the event of a Total Loss of the Aircraft, Insurers agree to pay LESSOR all amounts up to the Agreed Value based solely upon LESSOR’s (not LESSEE’s) execution of the appropriate form of release/discharge document. LESSOR may sign any required release in lieu of the Insured in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss.
(f) “Cut-through clause”: Insurers confirm that in the event of any claim arising under the hull insurances, the Reinsurers will in lieu of payment of the Insurers, its successors in interest and assigns, pay to the person named as sole loss payee under the original insurances that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Insurers (subject to proof of loss), it being understood and agreed that any such payment by any Reinsurers will fully discharge and release such Reinsurer from any and all further liability in connection therewith and provide for payment to be made notwithstanding any bankruptcy, insolvency, liquidation or dissolution of the Insurers and that the Insurers have made no payment under the original insurance policies.
(g) Insurers confirm that under the insurance policies, if the Insured installs an engine owned by a third party on the Aircraft, either the hull insurance will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss and the amount required by the third party engine owner, or separate additional insurance on such engine will attach in order to satisfy separately the requirements of the Insured to such third party engine owner.
2. UNDER THE LEGAL LIABILITY INSURANCE
(a) Subject to the provisions of this Endorsement, the Insurance will operate in all respects as if a separate Policy had been issued covering each party insured hereunder, but this provision will not operate to include any claim arising howsoever in respect of loss or damage to the Aircraft insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds will not exceed the limits of liability stated in the Policy.
(b) The Insurance provided hereunder will be primary and without right of contribution from any other insurance which may be available to LESSOR or its successors and assigns.

	  	124	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

(c) LESSOR and its successors, assigns, directors, officers and employees will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.
3. UNDER ALL INSURANCES
(a) LESSOR, its successors and assigns, and (with respect to Aviation and Airline General Third Party Liability only) its directors, officers and employees for their respective rights and interests, are included as Additional Insureds.
(b) The cover afforded to LESSOR by the Policy in accordance with this Endorsement will not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy.
(c) LESSOR will have no responsibility for premium and insurers will waive any right of set-off or counterclaim against LESSOR except in respect of outstanding premium in respect of the Aircraft, provided that Insurer may only set-off for premiums against the proceeds of the hull insurance for outstanding premiums in connection with hull all risks and hull war and allied perils insurance.
(d) Upon payment of any loss or claim to or on behalf of LESSOR, Insurers will to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of LESSOR indemnified hereby (but not against LESSOR). Insurers will not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers LESSOR will do all things reasonably necessary to assist the Insurers to exercise said rights.
(e) Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to LESSOR by the giving of not less than thirty (30) days notice in writing to LESSOR. Notice will be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement.
4. EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS CERTIFICATE
(a) LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.

	  	125	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

(b) THE POLICY WILL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE LEASE WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.
SUBJECT (save as specifically stated in this Certificate) to policy terms, conditions, limitations and exclusions.

Yours faithfully,
[BROKERS]	

	  	126	  	EXHIBIT	
	  	CERTIFICATE OF INSURANCE (FOR LESSOR)	

 	EXHIBIT D	BROKERS’ LETTER OF UNDERTAKING (FOR LESSOR)	

Date:	  	Our Ref:	

To:	  	INTERNATIONAL LEASE FINANCE CORPORATION
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.	
		
Re:	  	CONCESIONARIA
VUELA COMPANIA DE
AVIACION, S.A. DE C.V.	
	  	(“ LESSEE ”)
Airbus A319-100	
	  	Manufacturer’s Serial No.:	 	[            ]	
	  	Registration Mark:	 	[Aircraft registration mark, or
to mark place] (the “ Aircraft ”)	
Dear Sirs:
We confirm that insurance has been effected for the account of [LESSEE] (the “ Operator ”) covering all aircraft owned or operated by them, including the above-referenced aircraft (the “ Aircraft ”). [Also confirm, if applicable, the amount of any hull all risks or hull war and allied perils on the Aircraft which LESSEE is carrying in excess of the Agreed Value (which excess insurance would be payable to LESSEE). Such excess insurance may not exceed ten percent (10%) of the Agreed Value.]
Pursuant to instructions received from the Operator and in consideration of your approving the arrangement of the Operator’s “Fleet Policy” (under which the above-referenced Aircraft is insured) through the intermediary of ourselves as Brokers in connection with the insurance (the “ Insurance ” ) mentioned in our Certificate of Insurance (Reference No. [    ] dated [                    ] and attached hereto), we undertake as follows:
1. In relation to the Hull and War Risks Insurance to hold to your order the insurance Slips or Contracts and any Policies which may be issued or any policies substituted (with your consent) therefor (but only insofar as the same relate to the Aircraft only) and the benefit of the Hull and War Risks Insurance thereunder, but subject to our requirements to operate the Fleet Policy insofar as it relates to any other aircraft insured thereunder.
2. As to you and your successors, assigns, directors, officers and employees, Operator’s active crew members are considered “passengers”.

	  	127	  	EXHIBIT	
	  	BROKER’S LETTER OF UNDERTAKING (FOR LESSOR)	

3. To advise you of any of the following:
(a) If any insurer or the Operator cancels or gives notice of cancellation of any of the Insurance at least thirty (30) days (or such lesser period as may be available in the case of War and Allied Perils) before such cancellation is to take effect in respect of the Aircraft.
(b) Of any act or omission or of any event (including non-payment of premium) of which we have knowledge or are notified and which might invalidate or render unenforceable in whole or in part any of the Insurance, insofar as the same relate to the Aircraft.
(c) If we do not receive instructions to renew all or any of the Insurance at least thirty (30) days prior to their expiration.
(d) If any of the Insurance are not renewed on the same terms (save as to premium and period of cover and as you might otherwise have notified us to be acceptable to you) seven (7) days prior to expiry thereof.
The above undertakings are given subject to our continuing appointment for the time being as Insurance Brokers to the Operator.
We also undertake to advise you if we cease to be Insurance Brokers to the Operator.
Yours faithfully,

	  	128	  	EXHIBIT	
	  	BROKER’S LETTER OF UNDERTAKING (FOR LESSOR)	

 	EXHIBIT E	AVIATION AUTHORITY UNDERTAKING LETTER	
[Date]

To:	  	INTERNATIONAL LEASE FINANCE CORPORATION
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.	
Dear Sirs:
We, the                      (the “ Aviation Authority ” ) undertake that:
1. No cancellation, alteration or change in the registration of the Aircraft or recordation of liens will be made until receipt of written consent to such specified change from LESSOR.
2. On written request of LESSOR (which will include fax), the Aviation Authority will promptly de-register the Aircraft and provide such confirmation as is requested by LESSOR together with any other confirmation or information LESSOR may require to enable the Aircraft to be re-registered in any other country or state.
3. On written request of LESSOR (which will include fax) the Aviation Authority will release, remove or cancel all liens it may have over the Aircraft, and will acknowledge in doing so that all liability for such liens as discharged are for the sole account of LESSEE.
4. The Aviation Authority will not allow the registration, use or operation of the Aircraft for any purpose other than the category of fare paying passenger transportation.
5. The Aviation Authority will consent to the export of the Aircraft on the termination of the Lease Term or at LESSOR’S written request.
Sincerely,

	  	129	  	EXHIBIT	
	  	AVIATION AUTHORITY UNDERTAKING LETTER	

 	EXHIBIT F	ESTOPPEL AND ACCEPTANCE CERTIFICATE	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”), a company organized under the laws of Mexico does hereby represent, acknowledge, warrant and agree as follows:
1. LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of April 20, 2007 (hereinafter referred to as the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSEE has this      day of                     ,              (Time:             ) at received from LESSOR possession of:
(a) One (1) Airbus A319-100 aircraft bearing Manufacturer’s serial number [            ] and FAA registration mark [Aircraft registration mark, or              to mark place], together with two (2) V2524-A5 engines bearing manufacturer’s serial numbers      and      (each of which has 750 or more rated take-off horsepower) and an APU bearing part number              and manufacturer’s serial number             , all in airworthy condition.
(b) All Aircraft Documentation and information regarding the Aircraft, Engines, APU and Parts as per Attachment 1, Parts A and B.
(c) The miscellaneous equipment per Attachment 2 and the LESSOR furnished equipment (BFE) per Attachment 3.
3. The Aircraft had the following seating configuration at Delivery:
             first              business              coach
4. An auxiliary center tank (ACT) is / is not installed (circle one) at Delivery.
If yes, quantity of auxiliary center tanks:             
5. Lower crew rest (LD-MCR) is / is not installed (circle one) at Delivery.
6. The takeoff thrust rating of the Engines per the FAA type certificate data sheet is              pounds.

	  	130	  	EXHIBIT	
	  	ESTOPPEL AND ACCEPTANCE CERTIFICATE	

7. The maximum gross takeoff weight of the Aircraft is              (circle one) pounds/kilos.
8. The amount of fuel on board at Delivery is:              pounds/gallons/kilos of fuel (circle one).
9. The Agreed Value of the Aircraft is US $        .
10. All of the foregoing has been delivered and accepted on the date set forth above to LESSEE’s full satisfaction and pursuant to the terms and provisions of the Lease.
11. The Aircraft, Engines, APU, Parts and Aircraft Documentation as described in the Lease have been fully examined by LESSEE and have been received in a condition fully satisfactory to LESSEE and in full conformity with the Lease in every respect.
12. The Lease is in full force and effect, LESSOR has fully, duly and timely performed all of its obligations of every kind or nature thereunder and LESSEE has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease.
13. LESSOR’s Lender may rely upon all of the foregoing in granting substantial financial accommodations to LESSOR and LESSEE understands and agrees that any funds being advanced by LESSOR’s Lender will be made in reliance upon the foregoing.
14. LESSEE has obtained all required permits, authorizations, licenses and fees of the State of Registration or any Government Entity thereof necessary in order for LESSEE to operate the Aircraft as permitted by the terms of the Lease.

Dated on the date set forth above	
		
	 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
	 	By:	 	 	
	 	Printed Name:	 	 	
	 	Title:	 	 	
ATTACHMENTS:
 
1.	List of Aircraft Documentation	
Part A - Manufacturer’s List of Documents for Delivery
Part B - Manufacturer’s Documentation Status List (Manufacturer’s “Exhibit G”)
 
2.	Miscellaneous Equipment List	
 
3.	BFE List	

	  	131	  	EXHIBIT	
	  	ESTOPPEL AND ACCEPTANCE CERTIFICATE	

 	EXHIBIT G	OPINION OF COUNSEL	
TO BE GIVEN BY INDEPENDENT OUTSIDE COUNSEL OF LESSEE OR OTHER LAWYERS ACCEPTABLE TO LESSOR
 
To:	International Lease Finance Corporation	
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.
Gentlemen:
This opinion is furnished to you pursuant to Article of the Aircraft Lease Agreement dated as of April 20, 2007 (the “ Lease ”) between CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”). Defined terms in this opinion are used herein as defined in the Lease.
I have acted as counsel for LESSEE in connection with the preparation, execution and delivery of the Lease.
In that connection I have examined each of the following:
(a) The Lease and Side Letters thereto, the Estoppel and Acceptance Certificate and the power of attorney provided by LESSEE in which, among other things, LESSEE authorizes LESSOR to take action in LESSEE’s name to deregister the Aircraft after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason (together, the “ Lease Documents ”);
(b) The charter of LESSEE and all amendments thereto;
(c) Such other documents, agreements and instruments, and such treaties, laws, rules, regulations, decrees and the like, as I have deemed necessary as a basis for the opinions hereinafter expressed.
[                (d) All of the agreements and any amendments thereto between LESSEE and all other lessors and lenders of LESSEE covering other aircraft operated by LESSEE on which the Engines can be installed.]

	  	132	  	EXHIBIT	
	  		  	OPINION OF COUNSEL	

Based upon the foregoing and having regard for legal considerations which I deem relevant, I am of the opinion that:
1. LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations under the Lease Documents.
2. No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other regulatory body or authority is required for the valid authorization, execution, delivery and performance by LESSEE of the Lease Documents.
3. The Lease Documents have each been duly authorized, executed and delivered by LESSEE. Each such instrument is a valid and binding obligation of LESSEE, enforceable in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.
4. The execution and delivery of the Lease Documents, the consummation by LESSEE of the transactions contemplated therein and compliance by LESSEE with the terms and provisions thereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any lien, charge or encumbrance upon any property of LESSEE, under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected.
5. [Describe the process in the U.S. with respect to registration of the Aircraft in the name of LESSOR and any other steps required or recommended in the U.S. in order to protect the interests of LESSOR in the Aircraft]. Such registration of the Aircraft is not inconsistent with, and would not result in the loss of, LESSOR’s title to and ownership of the Aircraft. Except for the foregoing, no other filing or recording of any instrument or document or any other acts are necessary or advisable under the Laws of the U.S. to protect LESSOR’s title to and ownership of the Aircraft. [In the opinion given at Delivery, also confirm that the Aircraft is registered in the name of LESSOR.]
6. Except for any filing or recording that may be required with the [NAME OF AIRCRAFT REGISTER] and except for [DESCRIBE SUCH OTHER FILINGS OR RECORDINGS, INCLUDING WITH THE INTERNATIONAL REGISTRY], no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of Mexico in order for the Lease to constitute a valid and perfected lease of record relating to the Aircraft, it being understood that such counsel expresses no opinion as to the nature of LESSOR’s title to the Aircraft on the Delivery Date. [In opinion given at Delivery, also confirm that the filings and other steps described have been accomplished.]

	  	133	  	EXHIBIT	
	  		  	OPINION OF COUNSEL	

7. Except for [DESCRIBE ANY TRANSLATION, NOTARIZATION OR OTHER REQUIREMENTS], none of the Lease Documents needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof. Each of the Lease Documents is in a proper form under the Laws of Mexico for enforcement or admission thereof into evidence in Mexico, without any further action on the part of any party other than the commencement of court proceedings in Mexico.
8. LESSEE will not be required to obtain any licenses for importation and ferrying of the Aircraft into Mexico. LESSEE has complied with all import and customs formalities in Mexico with respect to the Aircraft.
9. LESSEE holds all licenses, certificates and permits from applicable governmental authorities in Mexico necessary for the conduct of its business as a certificated air carrier and performance of its obligations under the Lease Documents.
10. To my knowledge, there are no suits or proceedings pending or threatened against LESSEE before any Government Entity against or affecting LESSEE which, if adversely determined, would have a material adverse effect on the financial condition or business of LESSEE or its ability to perform under the Lease Documents, except as described in the filings provided to LESSOR pursuant to Article of the Lease.
11. Under the Laws of Mexico, LESSEE will not be required to make or deduct any withholding or other Tax from any payment it may make under the Lease Documents.
12. The obligations of LESSEE under the Lease Documents are direct, general and unconditional obligations of LESSEE and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of LESSEE, with the exception of such obligations as are mandatorily preferred by law.
13. LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets have the right of immunity from suit or execution on the grounds of sovereignty in such jurisdictions and the performance by LESSEE of its obligations under the Lease Documents constitute commercial acts done for commercial purposes.
14. On termination of the Lease, LESSOR would be entitled to repossess the Aircraft and, without additional fees or duties, export it from Mexico.
15. Neither LESSEE nor LESSOR is required by the Laws of Mexico to obtain any approval, license or consent (including without limitation any exchange control approval) in order to remit to LESSOR of any amount payable under the Lease Documents.

	  	134	  	EXHIBIT	
	  		  	OPINION OF COUNSEL	

16. There is no applicable usury or interest limitation Law in Mexico which may restrict the recovery of payments in accordance with the Lease Documents.
17. LESSOR will not violate any Law or become liable to any tax in Mexico by reason of entering into or performing its obligations under the Lease Documents and it is not necessary to establish a place of business in Mexico in order to enforce any provisions of the Lease Documents.
18. The choice of California Law to govern the Lease Documents will be upheld in any action in the courts of Mexico. Any judgment given by the United States or California courts would be recognized and accepted by the courts in Mexico.
19. [DESCRIBE STATUS OF CAPE TOWN CONVENTION IN COUNTRY], for example:
Mexico has ratified the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which were adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa (commonly known as the “Cape Town Convention”)] [without any reservations or declarations in respect thereto OR with the following reservations and declarations in respect thereto] and the Lease and the other Operative Documents and the rights created thereby are valid, legal and binding thereunder and conform to the terms and conditions thereof.
or
Mexico[is not] [is] a signatory of, [and] [but] has not yet ratified, the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. [describe the ratification process and status of ratification in Mexico]
Very truly yours,

	  	135	  	EXHIBIT	
	  		  	OPINION OF COUNSEL	

 	EXHIBIT H	FORM OF POWER OF ATTORNEY	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ Volaris ”) hereby irrevocably appoints INTERNATIONAL LEASE FINANCE CORPORATION (“ ILFC ”), a corporation located in Los Angeles, California, U.S.A., as Volaris’s true and lawful attorney so that ILFC may take any of the following actions in the name of and for Volaris with respect to the Airbus A319-100 aircraft bearing manufacturer’s serial number (MSN of Aircraft, if known} (the “ Aircraft ”) leased by ILFC to Volaris pursuant to an Aircraft Lease Agreement dated as of April 20, 2007 (the “ Lease ”):
1. Pursuant to the Lease, Volaris has procured and is maintaining insurances for the Aircraft. ILFC has been named sole loss payee on the all risk hull and war risk insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft, ILFC is entitled to receive insurance proceeds in an amount specified in Article of the Lease, a copy of which is attached. ILFC may take all action and sign all documents otherwise required to be performed by Volaris, including execution on behalf of Volaris of an appropriate form of discharge/release document, in order for ILFC to collect such insurance proceeds.
2. In the exercise of the rights of ILFC under the Lease to recover the Aircraft from Volaris and Mexico after termination of the Lease due to an Event of Default under the Lease or for termination of the Lease due to any other reason, ILFC may take all action otherwise required to be performed by Volaris before the authorities and courts in Mexico in order to cause the Aircraft to be repossessed by ILFC, deregistered from the [NAME OF REGISTRY] and exported from Mexico.
3. In the exercise of the rights mentioned in paragraphs 1 and 2, ILFC may make any declarations or statements and sign any public or private documents which may be considered necessary or appropriate.
4. ILFC may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but not limited to employees of ILFC or legal counsel in Mexico.
ILFC is empowered to determine in its sole discretion when to exercise the powers conferred upon ILFC pursuant to this Power of Attorney. Any person, agency or company relying upon this Power of Attorney need not and will not make any determination or require any court judgment as to whether an Event of Default has occurred under the Lease or whether the Lease has been terminated. Volaris hereby waives any claims against any person acting on the instructions given by ILFC or its designee pursuant to this Power of Attorney and any person designated by ILFC or an officer of ILFC to give instructions pursuant to this Power of Attorney. Volaris also agrees to indemnify and hold harmless any person, agency or company which may act in reliance upon this Power of Attorney and pursuant to instructions given by ILFC or its designee.

	  	136	  	EXHIBIT	
	  		  	FORM OF POWER OF ATTORNEY	

This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of ILFC, deregistered and exported from Mexico.
Volaris has made and delivered this Power of Attorney on              in             .

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
	 	By:	 	 	
	 	Printed Name:	 	 	
	 	Title:	 	 	

	  	137	  	EXHIBIT	
	  		  	FORM OF POWER OF ATTORNEY	

 	EXHIBIT I	FORM OF CAPE TOWN POWER OF ATTORNEY	
Form of Irrevocable Deregistration and Export Request Authorization
(Annex referred to in Article 25 of the consolidated text of the Cape Town Convention)
[Date]
 
To:	[ name of Registry Authority ]	
 
Re:	Irrevocable Deregistration and Export Request Authorization	
The undersigned is the registered operator of the Airbus A319-100 aircraft bearing manufacturer’s serial number [            ] and FAA registration mark [Aircraft registration mark, or              to mark place] (together with all installed, incorporated or attached accessories, parts and equipment, the “ Aircraft ”).
This instrument is an irrevocable deregistration and export request authorization issued by the undersigned in favor of International Lease Finance Corporation as lessor (the “ Authorized Party ”) under the authority of Article XIII of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. In accordance with that Article, the undersigned hereby requests:
(a) recognition that the Authorized Party or the person it certifies as its designee is the sole person entitled to:
(1) procure the deregistration of the Aircraft from the [ insert name of aircraft register ] maintained by [ name of Registry Authority ] for the purposes of Chapter III of the Convention on International Civil Aviation, signed at Chicago, on 7 December 1944; and
(2) procure the export and physical transfer of the Aircraft from [insert country]; and
(b) confirmation that the Authorized Party or the person it certifies as its designee may take the action specified in clause (a) above on written demand without the consent of the undersigned and that, upon such demand, the authorities in [ insert country ] shall cooperate with the Authorized Party with a view to the speedy completion of such action.
The rights in favor of the Authorized Party established by this instrument may not be revoked by the undersigned without the written consent of the Authorized Party.
Please acknowledge your agreement to this request and its terms by the appropriate notation in the space provided below and lodge this instrument in the aircraft registry maintained

	  	138	  	EXHIBIT	
	  	FORM OF CAPE TOWN POWER OF ATTORNEY	

by [ name of Registry Authority ].

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
			
	 	By:	 	 	
			
	 	Printed Name:	 	 	
			
	 	Title:	 	 	
			
	 	Date:	 	 	
Agreed to and lodged on the date specified below.

[NAME OF REGISTRY AUTHORITY]	
		
By:	 	 	
		
Its:	 	 	
		
Date:	 	 	

	  	139	  	EXHIBIT	
	  	FORM OF CAPE TOWN POWER OF ATTORNEY	

 	EXHIBIT J	ASSIGNMENT OF RIGHTS (AIRFRAME)	
This Assignment of Rights is made this      day of                     ,              (the “ Assignment Agreement ” )
BETWEEN
 
(1)	INTERNATIONAL LEASE FINANCE CORPORATION, a corporation organized and existing under the laws of the State of California, United States of America, having its principal corporate offices located at 10250 Constellation Boulevard, 34th Floor, Los Angeles, California 90067, U.S.A. (“ ILFC ”); and	
 
(2)	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V., a Mexican company whose principal place business is at Prolongacion Paseo de la Reforma No. 490, Piso 1 (Edificio GE), Santa Fe Pena Blanca, Del. Alvaro Obregon, Mexico, D.F., Mexico 01210 (“ LESSEE ”)	
1. Preamble . In connection with the lease by ILFC to LESSEE of one new Airbus A319-100 model aircraft bearing manufacturer’s serial number [            ] (the “ Aircraft ”), reference is made to the following documents:
(a) the Airbus A319-100 Purchase Agreement between ILFC and AVSA S.A.R.L. (now Airbus S.A.S., legal successor to AVSA, S.A.R.L.) (“ AIRBUS ”) dated as of June 17, 2001, as further amended (the “ Purchase Agreement ”), under which ILFC agreed to purchase the Aircraft;
(b) the General Terms Agreement between ILFC and AIRBUS dated as of November 10, 1988, as further amended (the “ G.T.A. ”);
(c) the Product Support Agreement set forth in Exhibit E to the G.T.A. (the “ Support Agreement ”);
(d) the Aircraft Lease Agreement between ILFC and LESSEE dated as of April 20, 2007 (the “ Lease Agreement ”); and
(e) the Participation Agreement between ILFC and LESSEE dated as of                          ,              (the “ Participation Agreement ”).
2. Assignment . Pursuant to the Lease Agreement, ILFC will lease the Aircraft to LESSEE, including in such Lease Agreement a commitment to assign to LESSEE certain warranty and other rights related to the Aircraft under the Purchase Agreement, the G.T.A. and the Support Agreement. With effect from the date hereof, ILFC therefore hereby assigns to LESSEE and LESSEE accepts the assignment on the terms and conditions specified herein of the following rights (the “ Rights ”) under the provisions indicated (the “ Assigned Provisions ”) with respect to the Aircraft:
(a) the benefit of the rights with respect to the Aircraft under Clause 12 (Warranties and Service Life Policy) of the G.T.A.; and

	  	140	  	EXHIBIT	
	  	ASSIGNMENT OF RIGHTS (AIRFRAME)	

(b) the rights with respect to the Aircraft under Clause 13 (Patent Indemnity) of the G.T.A.; and
(c) the benefit of the remaining rights with respect to the Aircraft under Clause 15 of the Support Agreement as set forth in paragraph 1(c) of the Participation Agreement; and
(d) the benefit of the remaining part of the product support allowance as set forth in paragraph 1(d) of the Participation Agreement.
3. Conditions of Assignment . This Assignment Agreement is made subject to the following conditions:
(a) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof (copies of which are attached hereto), with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(b) Nothing contained herein shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in section 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.
(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 above received by ILFC in connection with the Aircraft.
(d) Other than with respect to the obligations assumed by LESSEE under this Assignment Agreement as set forth in sections 3(a) and 3(c) above, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.

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4. Reassignment . Upon termination of the Lease Agreement and/or definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, upon receipt of such notice by AIRBUS, the remaining rights contained herein shall automatically be reassigned to ILFC. AIRBUS can rely on such notice without further inquiry.
5. Assignment by LESSEE . The rights of ILFC and LESSEE under this Assignment Agreement in respect of the Purchase Agreement, the G.T.A. and the Support Agreement shall not be further assigned by the parties hereto.
6. Notification
(a) This Assignment Agreement shall, at the expense of LESSOR, be notified to AIRBUS within 2 weeks of the date hereof pursuant to Article 1690 of the French Civil Code.
(b) All notices and requests required or authorized under this Assignment Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognized courier service or by telefax directed as set forth below:

ILFC shall be addressed at:	
	 	10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.	
			
	 	Attention:	  	Senior Vice President-Technical	
			
	 	Fax:	  	310-788-1990	
	 	Telephone:	  	310-788-1999	

	  	142	  	EXHIBIT	
	  	ASSIGNMENT OF RIGHTS (AIRFRAME)	

					
LESSEE shall be addressed at:	
	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)
Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01012 México, D.F.
México
 	
	 	Attention:	  	Finance Director	
			
	 	Fax:	  	[            ]	
	 	Telephone:	  	[            ]	
	
AIRBUS shall be addressed at:	
	 	1 Rond-Point Maurice Bellonte
31707 Blagnac, CEDEX, France	
			
	 	Attention:	  	VP, Contracts Administration & Delivery Transactions	
			
	 	Fax:	  	(33) 5.61.93.41.95	
	 	Telephone:	  	(33) 5 61 93 32 16	
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (aa) personal delivery, on the date upon which personally delivered, (bb) delivery by courier, on the date of receipt or (cc) telefax transmission, on the date of confirmation of successful transmission.
7. Consent of AIRBUS . It shall be a condition to the validity of this Assignment Agreement that AIRBUS execute a Consent substantially in the form set forth in Schedule 1 hereto.
8. Applicable Law and Jurisdiction . THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in California or, if AIRBUS is involved, France.
9. Confidentiality . Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to this Assignment Agreement.

	  	143	  	EXHIBIT	
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IN WITNESS WHEREOF , the parties have caused this Assignment Agreement to be executed on their behalf by their duly authorized representatives.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	 	 		 	By:	 	 	
					
Its:	 	 	 		 	Its:	 	 	

	  	144	  	EXHIBIT	
	  	ASSIGNMENT OF RIGHTS (AIRFRAME)	

SCHEDULE 1
[DATE]
 
Re:	LFC/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ” ): ASSIGNMENT OF RIGHTS FOR AIRBUS A319-100 AIRCRAFT MSN [            ]	
Dear Sirs,
 
1.	Reference is made to the Assignment of Rights dated                          ,              between ILFC and LESSEE (the “ Assignment Agreement ” ) concerning the assignment of certain warranty rights under the Purchase Agreement and the G.T.A. and certain customer support rights under the Support Agreement with respect to the Aircraft.	
 
2.	All terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.	
 
3.	AIRBUS hereby consents to the assignment and reassignment contained in sections 2 and 4 respectively of the Assignment Agreement on the terms and conditions therein, subject to the following conditions:	
(a) AIRBUS shall have received formal notification of the Assignment Agreement within two weeks of the date hereof pursuant to Article 1690 of the French Civil Code.
(b) Nothing contained in the Assignment Agreement shall subject AIRBUS to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, the G.T.A. and the Support Agreement or, except to the extent set forth in subparagraph 3(c) below, modify in any respect whatsoever its contractual rights under the said agreements.
(c) So long as the Lease Agreement is in full force and effect, LESSEE and not ILFC will be responsible for compliance with the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A. including, without limitation, Clauses 12.5 and 12.6 thereof, with respect to the Aircraft. Upon termination of the Lease Agreement and/or upon definitive repossession of the Aircraft by ILFC, and provided that ILFC shall have furnished AIRBUS with written notice thereof, ILFC shall once again be bound by such clauses with respect to the rights and benefits described in section 2 of the Assignment Agreement received by ILFC in connection with the Aircraft.
(d) LESSEE hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations with respect to the Rights under the Assigned Provisions of (i) the Support Agreement including, without limitation, Clauses 16.9 and 18.5 thereof and (ii) Clauses 12 and 13 of the G.T.A including, without limitation, Clauses 12.5 and

	  	145	  	EXHIBIT	
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12.6 thereof, with respect to the exercise of any of the Rights and to be bound by the covenants of the “Buyer” in the Assigned Provisions to the same extent as if LESSEE had been named “Buyer” of the Aircraft under the Purchase Agreement.
(e) Other than with respect to the obligations assumed by LESSEE under the Assignment Agreement as set forth in sections 3(a) and 3(c) of the Assignment Agreement, ILFC shall remain fully bound by all provisions of the Purchase Agreement, the G.T.A. and the Support Agreement.
 
4.	This Consent shall be governed by and construed in accordance with the laws of the State of New York and any dispute arising hereunder shall be referred to the federal court located in New York, New York. Nothing in this clause will prevent any party from making a claim in a court of competent jurisdiction in California or France.	
 
5.	Subject to any legal or governmental requirements of disclosure, ILFC and LESSEE shall keep confidential the terms and conditions of this AIRBUS Consent and the Assignment Agreement and the clauses from the G.T.A. and the Support Agreement provided to LESSEE pursuant to the Assignment Agreement.	

For and on behalf of AIRBUS S.A.S.	
		
By:	 	 	
Title:	 	 	
Date:	 	 	

Signed in acknowledgement for and on behalf of	 		 	Signed in acknowledgement for and on behalf of	
			
INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	 	 		 	By:	 	 	
					
Its:	 	 	 		 	Its:	 	 	

	  	146	  	EXHIBIT	
	  	ASSIGNMENT OF RIGHTS (AIRFRAME)	

 	EXHIBIT K	ASSIGNMENT OF RIGHTS (ENGINES)	
ASSIGNMENT AGREEMENT
This Agreement is made this      day of                     , 20    .
AMONG:

INTERNATIONAL LEASE FINANCE CORPORATION	  	a corporation whose place of business is at 10250 Constellation Boulevard, 34th Floor, U.S.A (hereinafter called “ Lessor ”) of the first part; and	
		
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	  	a corporation whose place of business is at [            ] (hereinafter called “ Lessee ”) of the second part; and	
		
IAE INTERNATIONAL AERO ENGINES AG	  	a joint stock company organized and existing under the laws of Switzerland whose principal place of business is at IAE Building, 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108 (hereinafter called “ IAE ”) of the third part.	
WHEREAS:
 
A.	Lessor owns Airbus A319-100 type aircraft which are equipped with IAE V2500 engines.	
 
B.	Lessor proposes to lease or has leased to Lessee one Airbus A319-100 aircraft, bearing manufacturer’s serial number [            ], equipped with two (2) IAE V2524-A5 engines bearing manufacturer’s serial numbers [            ] and [            ] (the “ Engines ”).	
 
C.	Lessor and IAE are parties to a V2500 General Terms of Sale Agreement referenced IAE/ILFC dated December 9, 1992 (which together with the Exhibits and Side Letters thereto, as amended and supplemented from time to time, is hereinafter referred to as the “ Support Contract ”) for the sale and support by IAE and the purchase by Lessor of those items defined in the Support Contract and hereinafter referred to as “ Supplies ”.	
In the Support Contract, Lessor is referred to as “ ILFC ”.
 
D.	Lessee wishes to take an assignment of certain rights and obligations of Lessor under the Support Contract and Lessor is willing to give and IAE is willing to consent to such assignment as hereinafter provided.	

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NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
CLAUSE 1	DEFINITIONS	
Terms used in this Agreement shall have the same meanings as those given to them in the Support Contract except as otherwise noted.
 
CLAUSE 2	ASSIGNMENT	
Subject to all other clauses of this Agreement and for as long as the lease agreement between Lessor and Lessee has not been terminated:

2.1  	 	With respect to the Engines leased by Lessor to Lessee, Lessor hereby assigns and transfers to Lessee all of the rights and interest of Lessor under the following portions of the Support Contract (the “ Assigned Rights ”):	
				
	 	2.1.1  	 	Clause 1	  	Definitions - with the exception of subclauses 1.4, 1.7 and 1.8	
				
	 		 	Clause 3	  	Spare Parts Provisions with the exception of subclause 3.13.1	
				
	 		 	Clause 4	  	Warranties, Guarantees and Liabilities	
				
	 		 	Clause 5	  	Product Support Services	
				
	 		 	Clause 6	  	Miscellaneous	
				
	 	2.1.2	 	Exhibit A	  	Support Contract Specification	
				
	 		 	Exhibit C	  	Product Support	
				
	 		 	Exhibit D	  	Warranties, Guarantees & Plans	
		
	 	Such portions of the Support Contract as are hereby assigned have been previously provided to Lessee by Lessor, and Lessee hereby acknowledges receipt of the same.	
		
2.2	 	Lessee hereby assumes and accepts the assignment and transfer of the Assigned Rights of Lessor as provided for in Clause 2.1 above and agrees to accept all of the limitations, obligations and liabilities contained in the Support Contract relating to the Assigned Rights.	
		
2.3	 	IAE hereby consents to the assignment and transfer to Lessee of all of the Assigned Rights of Lessor as provided in Clause 2.1 above and agrees that it will allow Lessee to exercise in its own name all of the Assigned Rights of Lessor.	
		
2.4	 	References in the Support Contract to Lessor (whether as “ILFC”, “Airline”, “Operator” or otherwise) shall, with respect to the Assigned Rights, include Lessee except where the context requires otherwise.	

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	  	ASSIGNMENT OF RIGHTS (ENGINE)	

CLAUSE 3	PAYMENT FOR SPARE PARTS	
Notwithstanding Clause 2 above, payment for all purchases by Lessee shall be due upon delivery or, at IAE’s option, prior to delivery of the purchased items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed on any of Lessee’s property, or (b) Lessee is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding-up laws or other similar legislation, or (c) Lessee becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a judgment rendered against Lessee, or (e) Lessee is unable or refuses to make payment to IAE in accordance with any of Lessee’s obligations to IAE.
 
CLAUSE 4	LAW	
This Agreement shall be governed by and construed in accordance with the laws of New York, U.S.A. (other than its rules of conflicts of laws).
 
CLAUSE 5	AMENDMENT	
 
 	5.1	This Agreement shall not be amended in any way other than by agreement in writing executed by all of the parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement. All future amendments to the Support Contract with respect to the Assigned Rights shall not require the written approval of Lessee except in such cases where Lessee’s rights or obligations are impacted. Any amendment in violation of this clause shall be null and void.	
 
 	5.2	This Agreement shall not be amended or terminated orally.	
 
CLAUSE 6	FURTHER ASSIGNMENT	
Lessee shall not be entitled to further assign or transfer the Assigned Rights without the prior written consent of IAE.
 
CLAUSE 7	COUNTERPARTS	
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original and each counterpart shall constitute one and the same instrument.

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	  	ASSIGNMENT OF RIGHTS (ENGINE)	

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorized officers the day and year first before written:

FOR:	 		 	FOR:	
INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V	
					
By:	 	 	 		 	By:	 	 	
					
Its:	 	 	 		 	Its:	 	 	

FOR:
IAE INTERNATIONAL AERO
ENGINES AG	
		
By:	 	 	
		
Its:	 	 	

	  	150	  	EXHIBIT	
	  	ASSIGNMENT OF RIGHTS (ENGINE)	

 	EXHIBIT L	RETURN ACCEPTANCE RECEIPT	
Date:
1. CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“ LESSEE ”) and INTERNATIONAL LEASE FINANCE CORPORATION (“ LESSOR ”) have entered into an Aircraft Lease Agreement dated as of April 20, 2007 (the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSOR has this      day of                      ,              (Time:             ) at                      received from LESSEE possession of:
(a) One (1) Airbus A319-100 Aircraft bearing Manufacturer’s serial number {MSN of Aircraft, if known}, together with two (2) V2524-A5 Engines bearing manufacturer’s serial numbers              and             , an APU bearing manufacturer’s serial number             , and all Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts, as listed in the Document Receipt attached hereto.
3. The Aircraft had the following seating configuration at return:
             first                      business                      coach
4. An auxiliary center tank (ACT) is / is not installed (circle one) at return.
If yes, quantity of auxiliary center tanks:             
5. Lower crew rest (LD-MCR) is / is not installed (circle one) at return.
6. A Thales Avionics Integrated Standby Flight Display (ISFD)/Integrated Standby Instrument System (ISIS) was / was not installed (circle one) in the Aircraft by LESSEE during the Lease Term ( applicable only if Thales ISFD/ISIS was not installed at Delivery ).
7. The Airframe, Engines, APU and Parts had the following hours/cycles at return:
 
 	(a)	Airframe:	
Maximum gross takeoff weight:              pounds/kilos (circle one)

	  	151	  	EXHIBIT	
	  		  	RETURN ACCEPTANCE RECEIPT	

Total hours:              Total cycles:             
 
 	(b)	Operating thrust of Engines at return:	
                     pounds
 
 	(c)	Engine #1 Information:	

   	  	Serial No	  	Total Hours	  	Total Cycles	
				
ENGINE #1	  		  		  		

ENGINE #1 MODULES	  	Total
Hours	  	Total
Cycles	  	Hours since
last Module
Performance
Restoration	  	Cycles since
last Module
Performance
Restoration	
					
Low Pressure Compressor and Gearbox	  		  		  		  		
High Pressure Compressor/Diffuser	  		  		  		  		
High Pressure Turbine/Nozzle/Combustor	  		  		  		  		
Low Pressure Turbine	  		  		  		  		

ENGINE #1 LIFE-LIMITED PART NAME	  	Part
number	  	Cycles remaining to next
life-limited part removal	

	  		  		
i.Engine No. 2 Information:

   	  	Serial No	  	Total Hours	  	Total Cycles	
				
ENGINE #2	  		  		  		

	  	152	  	EXHIBIT	
	  		  	RETURN ACCEPTANCE RECEIPT	

									
ENGINE #2 MODULES	  	Total
Hours	  	Total
Cycles	  	Hours since
last Module
Performance
Restoration	  	Cycles since
last Module
Performance
Restoration	
					
Low Pressure Compressor and Gearbox	  		  		  		  		
High Pressure Compressor/Diffuser	  		  		  		  		
High Pressure Turbine/Nozzle/Combustor	  		  		  		  		
Low Pressure Turbine	  		  		  		  		

ENGINE #2 LIFE-LIMITED PART
NAME	  	Part
number	  	Cycles remaining to next
life-limited part removal	

	  		  		
 
 	(e)	APU:	
Part number             
Serial number             
Total hours:             
Total cycles:             
             hours/             cycles since last hot section refurbishment
            hours/              cycles remaining on APU life-limited Parts
 
 	(f)	Landing Gear:	

Position	  	Serial No.	  	Total Hrs/Cycles/
Days	  	Hrs/Cycles/Days
since last
Overhaul	  	Date of last
Overhaul	
					
Nose	  		  		  		  		

	  	153	  	EXHIBIT	
	  		  	RETURN ACCEPTANCE RECEIPT	

Left Main
Right Main
8. The amount of fuel on board at return is              pounds/gallons/kilos of fuel (circle one).
9. Other technical information regarding the Aircraft and its components are correctly set forth on the Technical Evaluation Report (in the form of Exhibit ) attached hereto.
10. With reference to Article of the Lease regarding reimbursement from the Reserves after return of the Aircraft:

	  	There are no claims for reimbursement from the Reserves which will be submitted after the date hereof.	
		
or	  		
		
	  	Claims for reimbursement from the Reserves will be submitted after the date hereof for the following:	
		
	  	Type of Work                          Estimated Invoice Amount	
11. LESSEE confirms that it has delivered to LESSOR all free-of-charge kits for the Aircraft received by LESSEE.
12. The above specified aircraft, engines and documentation are hereby accepted by LESSOR subject to the provisions of the Lease and correction by LESSEE (or procurement by LESSEE at LESSEE’s cost) as soon as reasonably possible of the discrepancies specified in the list attached.
13. Subject to the following paragraph, the leasing of the Aircraft by LESSOR to LESSEE pursuant to the Lease is hereby terminated without prejudice to LESSEE’s continuing obligations under the Lease including, without limitation, paragraph 11(b) above and Articles and .
14. LESSEE represents and warrants that during the term of the Lease all maintenance and repairs to the Airframe and Engines were performed in accordance with the requirements contained in the Lease. LESSEE further confirms that all of its obligations under the Lease whether accruing prior to the date hereof or which survive the termination of the Lease by their terms and accrue after the date hereof, will remain in full force and effect until all such obligations have been satisfactorily completed.

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	  		  	RETURN ACCEPTANCE RECEIPT	

15. This Return Acceptance Receipt is executed and delivered by the parties in                      [place].
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in their respective company names by their duly authorized representatives as of the day and year first above written.

INTERNATIONAL LEASE FINANCE CORPORATION	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
					
By:	 	 	 		 	By:	 	 	
Printed Name:	 	 	 		 	Printed Name:	 	 	
Its:	 	 	 		 	Its:	 	 	
ATTACHMENTS:
 
1.	List of discrepancies	
2.	List of Aircraft Documentation	
3.	Current Aircraft layout passenger arrangement (LOPA)	
4.	Incident/accident letter	
5.	Dent and damage chart	
6.	List of loose equipment	
7.	List of free-of-charge kits	
8.	Engine disk sheets	
9.	Engine power assurance test conditions and results	
10.	Engine trend data	
11.	Technical Evaluation Report (in the form of Exhibit )	

	  	155	  	EXHIBIT	
	  		  	RETURN ACCEPTANCE RECEIPT	

 	EXHIBIT M	MONTHLY REPORT	
(SEE FOLLOWING SHEET)

	  	156	  	EXHIBIT	
	  		  	MONTHLY REPORT	

MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Page 1 of     

Report Due Date:                    	  		
To:	  	INTERNATIONAL LEASE FINANCE CORPORATION Fax:	
(310) 788-1990
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067, U.S.A.
Attn: Finance Department

From:	 	CONCESIONARIA
VUELA COMPANIA DE
AVIACION, S.A. DE C.V.	 		
Contact:	 	 	 	Fax:	 	 	
							
AIRCRAFT FT TYPE:	 	Airbus A319-100	 		
ENGINE TYPE:	 	V2524-A5	 	REGISTRATION:	 	[Aircraft registration mark, or              to mark place]	
							
SERIAL NUMBER:	 	{MSN of Aircraft, if known}	 	MONTH OF:	 	 	
NOTE : PLEASE RECORD TIME IN HOURS AND MINUTES NOT DECIMALS.

Aircraft Total Time Since New As Of Last Month:	  	Hours:	
Aircraft Total Time Since New:	  	Hours:	
Aircraft Total Cycles Since New:	  	Cycles:	
Airframe Hours Flown During Month:	  	Hours:	
Airframe Cycles/Landings During Month:	  	Cycles:	

	  	157	  	EXHIBIT	
	  		  	MONTHLY REPORT	

Monthly Aircraft Utilization and Status Report
From:            CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
Page 2 of     

 	  	HOURS OR
CYCLES FLOWN
DURING MONTH
(if applicable)	  	x	  	US$ PER HOUR
OR CYCLE
(if applicable)	  	=	  	RESERVES (if particular
type of  Reserves calculated
by calendar month, list
monthly amount)	
TOTAL AIRFRAME:	  		  		  		  		  		
	  	 	  	 	  	 	  	 	  	 	
TOTAL LANDING GEAR:	  		  		  		  		  		
	  	 	  	 	  	 	  	 	  	 	
TOTAL APU:	  	Hrs:	  	x	  		  	=	  		
	  	 	  	 	  	 	  	 	  	 	
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	x	  		  	=	  		
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	x	  		  	=	  		
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	x	  		  	=	  		
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
	  	Cycles (for Engine LLP Reserves):	  	x	  		  	=	  		
	  		  		  	 	  	 	  	 	
TOTAL AMOUNT OF RESERVES (US$) PAID THIS MONTH:	  	US$	

					
	  	158	  	EXHIBIT	
	  		  	MONTHLY REPORT	

Monthly Aircraft Utilization and Status Report
From:            CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
Page 3 of     

ENGINE SERIAL NUMBER:            	 		 	ENGINE SERIAL NUMBER:            	
ORIGINAL POSITION:	 		 		 	ORIGINAL POSITION:	 		
ACTUAL LOCATION:	 		 		 	ACTUAL LOCATION:	 		
CURRENT THRUST RATING:	 		 		 	CURRENT THRUST RATING:	 		
	 	HOURS:/MIN:	 		 		 	HOURS:/MIN:	
Total Time Since New As Of Last Month:	 		 		 	Total Time Since New As Of Last Month:	 		
Total Time Since New:	 		 		 	Total Time Since New:	 		
Total Cycles Since New:	 		 		 	Total Cycles Since New:	 		
Hours Flown During Month:	 		 		 	Hours Flown During Month:	 		
Cycles During Month:	 		 		 	Cycles During Month:	 		

IMPORTANT:	  	IF ILFC-OWNED ENGINE IS REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY ON THIS FORM.	

	  	159	  	EXHIBIT	
	  		  	MONTHLY REPORT	

 	EXHIBIT N	AIRCRAFT DOCUMENTATION	
AIRCRAFT RECORDS
 
1.	Copies of original Certificates delivered by Airbus, such as:	
 
 	a.	Airworthiness Certificate for Export	
 
 	b.	Radio installation conformity certificate	
 
 	c.	Noise limitation certificate	
 
2.	Copies of original Documents delivered by Airbus, such as:	
 
 	a.	Airworthiness Directive Compliance list	
 
 	b.	Aircraft inspection report	
 
 	c.	Aircraft Definition Report	
 
 	d.	Weighing report	
 
3.	Copies of current Certificates:	
 
 	a.	Airworthiness Certificate	
 
 	b.	Noise limitation	
 
 	c.	Radio license	
 
 	d.	Interior material burn certificates	
 
 	e.	Certificate of Export	
 
 	f.	Aircraft deregistration confirmation	
 
 	g.	Aircraft Registration	
 
4.	Letters signed and stamped by Quality Assurance:	
 
 	a.	Current aircraft hours and cycles	
 
 	b.	Current engines hours and cycles	
 
 	c.	Accident and Incident report	
 
 	d.	Summary of Maintenance Program	
 
 	e.	AD compliance during the lease term	
 
5.	Aircraft log books and Aircraft Definition Report	
 
6.	Aircraft Hard Time (HT) inspection status	
 
7.	One year forecast for HT inspection	
 
8.	Aircraft Modification status, including service bulletins	
 
9.	Last weighing report prior to redelivery	
 
10.	AD compliance report with original signoffs	
 
11.	Corrosion Prevention Control Program compliance summary	
 
12.	Routine and non-routine job cards of the Return Check	
 
13.	Routine and non-routine maintenance work cards for tasks performed during the Lease Term that were not repeated at or superseded by the Return Check	
 
14.	Past year pilot and maintenance discrepancies	
 
15.	Major and Minor structural repairs with applicable approvals	
 
16.	Compass Swing report of the last three years	
 
17.	Cabin Configuration drawing (LOPA)	
 
18.	Emergency equipment location drawing	
 
19.	Engineering data package for all modifications	

	  	160	  	EXHIBIT	
	  		  	MONTHLY REPORT	

ENGINES RECORDS
 
1.	Last test cell run reports	
 
2.	Life-limited Parts status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Engine Modification / service bulletin /inspection report and applicable forms	
 
5.	Last heavy maintenance records for each module	
 
6.	Engine log books	
 
7.	Engine removal history	
 
8.	Past year trend monitoring reports	
 
9.	Historical borescope reports	
 
10.	Engine component report	
APU RECORDS
 
1.	APU status (FH, FC, limits)	
 
2.	Life-limited Part status and traceability	
 
3.	AD compliance report with original signoffs	
 
4.	Modification status	
 
5.	Last heavy maintenance documents	
 
6.	APU log books	
 
7.	Last test cell report	
COMPONENT RECORDS
 
1.	Aircraft component inventory	
 
2.	Hard time component inventory	
 
3.	All required serviceable tags	
 
4.	Landing Gear status with last overhaul and life-limited Part status	
 
5.	AD compliance report with original signoffs	
 
6.	Modification status	
 
7.	Auxiliary fuel tank log book	

	  	161	  	EXHIBIT	
	  		  	AIRCRAFT DOCUMENTATION	

 	EXHIBIT O	TECHNICAL EVALUATION REPORT	
(SEE FOLLOWING SHEETS)

	  	162	  	EXHIBIT	
	  		  	AIRCRAFT DOCUMENTATION	

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321
 
TABLE OF CONTENTS

AIRCRAFT SUMMARY	  	 	164	  	
		
MAINTENANCE  & INSPECTION	  	 	165	  	
		
LANDING GEAR	  	 	167	  	
		
ENGINES	  	 	168	  	
		
AUXILIARY POWER UNIT (APU)	  	 	171	  	
		
PASSENGER CABIN CONFIGURATION (Seating)	  	 	172	  	
		
GALLEY PROVISIONS	  	 	173	  	
		
LAVATORIES, AUDIO/ENTERTAINMENT, CARGO, INTERIOR	  	 	174	  	
		
FUEL, WEIGHT & BALANCE	  	 	175	  	
		
AVIONICS SYSTEMS	  	 	176	  	
		
INSPECTOR RECORD	  	 	179	  	
 
163

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

					
	 	AIRCRAFT SUMMARY as of	  	(date):	

							
Aircraft Make	 	Airbus Industries	 		 		 	Model	 	 	 		
							
FUS No.	 	 	 		 		 	S/N	 	 	 		
								
MFG Date:	 	                      	 		 		 		 		 		 		
						
Current Operator:	 	 	 		 		 		 		
					
Current Registration:	 	 	 		 	Country:	 	 	
					
Previous Registration:	 	 	 		 	Country:	 	 	
				
Annual Utilization:	 	 	 	Hour/Cycle Ratio:	 	 	

Total Aircraft Time:	 	TAT (Hrs)	 	 	 		 	As of (date):	 	 	
							
Total Aircraft Cycles:	 	TAC (Cyc)	 	 	 		 		 		 		
						
Time Since Last “C” or	 	(Hrs)	 	 	 		 	(Cyc)	 	 	
Equivalent Check:	 		 		 		 		 		 		
						
Time Since Last “5Y or 10Y” or	 	(Hrs)	 	 	 		 	(Cyc)	 	 	
Equivalent Structural Check:	 		 		 		 		 		 		

Engine Make:	 	 	 	Model:	 	 	 		 		 		

Engine:	 	1 S/N:	 		 	2 S/N:	 		 		 		
							
TSN: (Hrs)	 	 	 		 	 	 		 		 		
							
CSN: (Cyc)	 	 	 		 	 	 		 		 		
IMPORTANT NOTE: THE ENGINE SERIAL NUMBERS SPECIFIED ON THIS REPORT REFLECT THE LESSOR OWNED ENGINE SERIAL NUMBERS. IF THE ENGINE SERIAL NUMBERS ARE NOT IDENTIFIED ON THIS REPORT, THEN PLEASE PROVIDE DATA FOR THE ENGINES ORIGINALLY DELIVERED WITH THE AIRCRAFT (LESSOR OWNED ENGINES).
 
164

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

MAINTENANCE PROGRAM GENERAL

Aircraft Maintenance Program Provided By:	 	¨ Operator	 	¨  Other:	 	 	
				
Program Approved By Authority Of:	 	¨  FAA Approved	 	¨ Other:	 	 	
		
Repair Station Providing Service:	 	 	
					
Repair Station Number:	 	 	 	FAA Approved?	 		 	¨  Yes  ¨  No	
					
Primary Line Maintenance Provided By?:	 		 	¨ Operator	 		 	¨ Contract Service	
					
Reliability Controlled Maintenance Program?	 		 	¨ Yes	 		 	¨ No	
					
Component Tags Available For Controlled Components:	 		 	¨ Yes	 		 	¨ No	

 	  	At Aircraft Delivery	  	Currently Approved By Local
Aviation Authority	  	Currently Operated/Maintained	
				
ETOPS Qualification:	  	Minutes	  	Minutes	  	Minutes	
				
Auto Land Qualification:	  	CAT I, II, IIIa, IIIb, IIIc	  	CAT I, II, IIIa, IIIb, IIIc	  	CAT I, II, IIIa, IIIb, IIIc	
(Circle one that applies)	  		  		  		
MAINTENANCE & INSPECTION PROGRAM DESCRIPTION

Check	  	Operator’s
Nomenclature	  	Calendar	  	Frequency Hours	  	Cycles	  	Number of Phases	
						
“C”	  	 	  	 	  	 	  	 	  	 	
						
“5Y/ 10Y” or Equivalent	  	 	  	 	  	 	  	 	  	 	
 
165

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

MAINTENANCE & INSPECTION PROGRAM STATUS

 	  	Phase or Equivalent	  	Date	  	Aircraft TAT	  	Aircraft TAC	
Next “C” Phase or Equivalent:	  	 	  	 	  	 	  	 	
Last “C” Phase or Equivalent:	  	 	  	 	  	 	  	 	
					
Time Remaining:	  	 	  	 	  	 	  	 	
					
 	  	 	  	(Cyc)	  	(Hrs)	  	(Cyc)	
Structural Cards Worked During Last “C” Phase?:	  		  	¨ Yes	  	¨ No	
				
CPCP Cards Worked During Last “C” Phase?:	  		  	¨ Yes	  	¨ No	
					
Next “5Y or 10Y” Phase or Equivalent:	  	 	  	 	  	 	  	 	
					
Last “5Y or 10Y” Phase or Equivalent:	  	 	  	 	  	 	  	 	
					
Time Remaining:	  	 	  	(Days)	  	(Hrs)	  	(Cyc)	
			
CPCP Cards Worked During Last “5Y or 10Y” Phase?:	  	¨ Yes	  	¨ No	

Date of Last ATC Transponder Test:	  	#1	  	 	  	#2	  	 	
		
Date of Last Flight Recorder Check:	  	 	
		
Date of Last Aircraft Weighing:	  	 	
 
166

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

LANDING GEAR

NLG Tires:	 	 	  	(MPH Rating)	  	 	  	(MFG)	  	 	
						
MLG Tires:	 	 	  	(MPH Rating)	  	 	  	(MFG)	  	 	
				
Brake Manufacture:	 	 	  		  	Type:         ¨   Steel              ¨   Carbon	

NOSE : 	 	P/N	 	                      	 	S/N	 	                              	 		
								
Last Overhaul:	 		 	(Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
						
Agency Performing Overhaul Service:	 		 		 	 	 	Cert#	 	 	
								
Approved Overhaul Interval:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Landing Gear Time Since Overhaul	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Time Remaining to Next Overhaul:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
						
LEFT MAIN :	 	P/N	 	 	 	S/N	 	 	 		
								
Last Overhaul:	 		 	(Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
						
Agency Performing Overhaul Service:	 		 		 	 	 	Cert#	 	 	
								
Approved Overhaul Interval:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Landing Gear Time Since Overhaul	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Time Remaining to Next Overhaul:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
						
RIGHT MAIN :	 	P/N	 	 	 	S/N	 	 	 		
								
Last Overhaul:	 		 	(Date)	 	 	 	(Hrs)	 		 	(Cyc)	 	 	
						
Agency Performing Overhaul Service:	 		 		 	 	 	Cert#	 	 	
								
Approved Overhaul Interval:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Landing Gear Time Since Overhaul	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
								
Time Remaining to Next Overhaul:	 		 	(Days)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	
 
167

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

ENGINES
ENGINE MAINTENANCE PROGRAM

Engine Maintenance	  		  		  		
Program Provided By:	  	 	  	 	  		
			
Engine Condition	  	¨   Yes     ¨    No	  		
Monitoring Trend	  		  		  		
Analysis Program?	  		  		  		
				
Engine Oil Type:	  	 	  	 	  		
				
Current Thrust Rating:	  	 	  	Lbs	  		
				
Certified Thrust Rating:	  	 	  	Lbs (from data plate)	  		
Engine(s) operated at INCREASED or DECREASED Thrust Rating; Program limitations
& required Mods. to operate at designated thrust rating

	

 	

	

168

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

ENGINE SPECIFICATIONS
ENGINE NUMBER 1

Engine Make:	 	 	 	Model:	 	 	 	S/N:	 	 	 	 	 	 	 		
								
Date of Mfg:	 	 	 	Total Time:	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Time Since Last Performance	 	(Visit Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
Restoration Visit:	 		 		 		 		 		 		 		
								
Time Since Last Shop Visit:	 	(Visit Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Test Cell EGT Margin:	 	 	 	 	 	 	 	 	 	 	 	 	 		
								
Work Scope of Last Shop Visit:	 	 	 	 	 	 	 	 	 	 	 	 	 		
								
Agency Performing Service:	 	 	 	 	 	 	 	 	 	 	 	 	 		

Agency FAA Approved?:	 		 	¨   Yes     ¨   No	 	Cert. #:	 	 	 	 	 		 		

1st LIMITER*	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
2nd LIMITER*	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
 
*	Provide a copy of a current Disk Sheet for all modules.	
 
169

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

ENGINE SPECIFICATIONS
ENGINE NUMBER 2

Engine Make:	 	 	 	Model:	 	 	 	S/N:	 	 	 	 	 	 	 		
								
Date of Mfg:	 	 	 	Total Time:	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Time Since Last Performance	 	(Visit Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
Restoration Visit:	 		 		 		 		 		 		 		
								
Time Since Last Shop Visit:	 	(Visit Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Test Cell EGT Margin:	 	 	 	 	 	 	 	 	 	 	 	 	 		
								
Work Scope of Last Shop Visit:	 	 	 	 	 	 	 	 	 	 	 	 	 		
								
Agency Performing Service:	 	 	 	 	 	 	 	 	 	 	 	 	 		

Agency FAA Approved?:	 	¨   Yes     ¨   No	 		 	Cert. #:	 	 	 	 	 		 		

1st LIMITER*	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
2nd LIMITER*	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
 
*	Provide a copy of a current Disk Sheet for all modules.	
 
170

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

AUXILIARY POWER UNIT

APU Make:	 	 	 	Model:    	 	 	 	S/N:	 	 	 	 	 	 	 		

Date of Mfg:	 	 	 	    Total Time:	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
					
APU Times Are Recorded By:	 	¨   APU Clock or ¨   A/C Time	 	Ratio:	 	 	 		

Time Between Overhaul	 	(Hrs)	 	 	 	(Cyc)	 	 	 		 		 		
								
Time Since Last Hit Section Refurbishment	 	(Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Time Since Last Overhaul:	 	(Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
								
Time Since Last Shop Visit:	 	(Date)	 	 	 	(Hrs)	 	 	 	(Cyc)	 	 	 		
									
Work Scope:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		

Agency Performing Service:  	 	 	 	Location:  	 	 	 	Cert. #:  	 	 	 		

Agency FAA Approved?:	 	¨   Yes                  ¨   No	 	APU Oil Type:	 	 	 		 		

1st LIMITER	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
2nd LIMITER	 	Part Name:	 	 	 	 	 	 	 	 	 		
							
	 	Allowable Life/Insp Limit:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Total Component Time:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
							
	 	Time Remaining:	 	 	 	(Hrs)	 	 	 	(Cyc)	 		
 
171

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

PASSENGER CABIN CONFIGURATION
SEATING CONFIGURATION

Present Configuration Occupancy:                                  	 	No. of Handicap Seats Installed:                                 	
FIRST CLASS

	 	Pax Qty:                     	 	Seat Mfg:                                  	 	Model:                                      	 	P/N:	 	 	

	 	Seats Fireblocked?	 	¨  Yes	 	¨  No	 	Color:	 	 	

	 	16 G Seat Installation:	 		 	¨  Yes	 		 	¨  No	 		
							
	 	In Seat Video:	 		 	¨ Yes	 		 	¨ No	 		
							
	 	In Seat Power:	 		 	¨ Yes	 		 	¨ No	 		
BUSINESS CLASS

	 	Pax Qty:                     	 	Seat Mfg:                                  	 	Model:                                      	 	P/N:	 	 	

	 	Seats Fireblocked?	 	¨  Yes	 	¨  No	 	Color:	 	 	

	 	16 G Seat Installation:	 		 	¨  Yes	 		 	¨  No	 		
							
	 	In Seat Video:	 		 	¨ Yes	 		 	¨ No	 		
							
	 	In Seat Power:	 		 	¨ Yes	 		 	¨ No	 		
COACH CLASS

	 	Pax Qty:                     	 	Seat Mfg:                                  	 	Model:                                      	 	P/N:	 	 	

	 	Seats Fireblocked?	 	¨  Yes	 	¨  No	 	Color:	 	 	

	 	16 G Seat Installation:	 		 	¨  Yes	 		 	¨  No	 		
							
	 	In Seat Video:	 		 	¨ Yes	 		 	¨ No	 		
							
	 	In Seat Power:	 		 	¨ Yes	 		 	¨ No	 		

	 	Provisions for Life Vests Under Seats?:	 	¨ Yes                         ¨ No	

	 	Manufacturer: 	 	 	 	Part Number:	 	 	

	 	Emergency Escape Path Lighting:                     ¨  Floor Mounted                     ¨   Seat Mounted	

	 	Configuration Drawing Number:	 	 	 	Source:	 	 	

Engineering Order / Installation Document:	 	 	

	 	Installation FAA Approved?:	 	¨  Yes	 	¨  No	 		 	Method of Approval:	 	 	
 
*	Provide current LOPA, Emergency Equipment Layout, and IFE Layout.	
 
172

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

GALLEY PROVISIONS
GALLEY’s ARE (Check one):            (    ) Atlas Standard            (    ) KSSU  Standard            (    ) Other

 	 	 	 	 	 	 	 	EQUIPPED	
 	 	GALLEY LOCATION	 	MANUFACTURER	 	PART NUMBER	 	Water Power	 	 	
1.	 	 	 	 	 	 	 	¨	 	¨	
						
2.	 	 	 	 	 	 	 	¨	 	¨	
						
3.	 	 	 	 	 	 	 	¨	 	¨	
						
4.	 	 	 	 	 	 	 	¨	 	¨	
						
5.	 	 	 	 	 	 	 	¨	 	¨	
						
6.	 	 	 	 	 	 	 	¨	 	¨	
						
7.	 	 	 	 	 	 	 	¨	 	¨	
						
8.	 	 	 	 	 	 	 	¨	 	¨	
						
9.	 	 	 	 	 	 	 	¨	 	¨	
						
10.	 	 	 	 	 	 	 	¨	 	¨	
NOTE: Galley Locations per Spec or LOPA drawing i.e., GI, G2 etc. Galley Location numbers above correspond to the numbers below.

 	 	OVENS	 	FULL SIZE
CARTS	 	 1 / 2 SIZE
CARTS	 	CHILLERS	 	COFFEE
MAKERS	 	WATER
BOILERS	 	HOT CUPS	 	OTHER	
									
1.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
2.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
3.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
4.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
5.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
6.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
7.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
8.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
9.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
									
10.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
173

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

LAVATORIES

Number of Lavatories:	 	 	  	Handicap Provisions?:	  	¨  Yes	  	¨  No	
Locations:	 	 	  		  		
IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM

Boarding Music:	  	¨ Yes	  	¨ No	
			
Auto Evac & Warning:	  	¨ Yes	  	¨ No	
			
Pre-Recorded Announcement:	  	¨ Yes	  	¨ No	
			
Passenger Entertainment (Audio):	  	¨ Yes	  	¨ No	
			
Audio On Demand (AOD):	  	¨ Yes	  	¨ No	
					
Passenger Entertainment (Video):	  	¨ Yes	  	¨ No	 	Video Manufacturer:               	 	Video System:               	
			
Video On Demand (VOD):	  	¨ Yes	  	¨ No	
			
Entertainment Controls (PCU) Installed?	  	¨ Yes	  	¨ No	
				
VTR Format:	  	¨ VHS	  	¨ Hi-8	  	¨ Other	
			
¨ Projector	  	¨  PSU Monitor	  	¨ Aisle Monitor	
(Check All That Apply)	  		  		
			
Passenger En-Route Information Display:	  	¨  Yes	  	¨  No	
						
Telephone:	  	¨ Yes  ¨ No	  	¨  Leased	  	¨  Owned	  		 	Satellite: ¨  Yes  ¨  No	
CARGO COMPARTMENT

Cargo Loading System Installed:	  	¨  Yes	  	¨ No	
			
Smoke/Fire Detection System Installed:	  	¨ Yes	  	¨ No	
			
Fire Suppression System Installed:	  	¨ Yes	  	¨ No	
INTERIOR COLORS

Interior Color Scheme:                                           	 	Carpets:                                              	 	Curtains:                                              	
 
174

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

PLACARDS & LIGHTED SIGNS

English?:                     ¨ Yes                     ¨ No	  	Bi-Lingual?:                     ¨ Yes                     ¨ No	
				
First Lanuage:	 	 	  	Second Language:	 	 	
FUEL SYSTEM

Total Fuel Capacity:	 	 	  	U.S. Gallons	 	 	 		 	¨ Lbs or ¨ Kilos	
						
Number of Tanks:	 	 	  		 		 		 		

					
Auxiliary Tanks Installed?:	 	¨ Yes	  	¨ No	 		  		
					
Auxiliary Tank Capacity:	 	 	  	U.S. Gallons	 	 	  	¨ Lbs or ¨ Kilos	
	
Fuel Instrumentation / Calibration:                     ¨ U.S. Pounds                     ¨ Kilograms	
WEIGHT & BALANCE

Has Aircraft Been Modified For Increased Gross Weight by Current Lessee?:                     ¨ Yes                     ¨ No	
From	 	 	 	MTOGW To	 	 	 	MTOGW	
							
Weight & Balance Manual Document No.:	 	 	 	Rev:	 	 	
For the below weights specify AFM approved limits:

 	  	 	  	 	  	POUNDS	  	KILOS	
					
Maximum Takeoff Gross Weight:	  	(MTOGW)	  		  	/	  	 	
					
Maximum Taxi Weight:	  	(MTW)	  		  	/	  	 	
					
Maximum Landing Weight:	  	(MLW)	  		  	/	  	 	
					
Manufacturer’s Empty Weight:	  	(MEW)	  		  	/	  	 	
					
Maximum Zero Fuel Weight:	  	(MZFW)	  		  	/	  	 	
					
Operational Empty Weight:	  	(OEW)	  		  	/	  	 	
					
AFM measured in:	  	Pounds or Kilograms	  		  	 	  	 	
					
	  	Celsius or Fahrenheit	  		  	 	  	 	
 
175

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

AVIONICS SYSTEMS
22 AUTO FLIGHT

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	FMGC - Flight Management & Guidance Computer:	 	 	  	 	
				
 	  	FAC - Flight Augmentation Computer:	 	 	  	 	
				
 	  	FCU - Flight Control Unit:	 	 	  	 	
				
 	  	MCDU - Multipurpose Control Display Unit:	 	 	  	 	
	  	Windshear (Check one):	 	¨  Reactive	  	¨  Predictive	
23 COMMUNICATIONS

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	CIDS Director - Cabin Intercommunications Data System	 	 	  	 	
				
 	  	HF Transceiver:	 	 	  	 	
				
 	  	VHF Transceiver:	 	 	  	 	
				
 	  	Solid State Cockpit Voice Recorder:	 	 	  	 	
				
 	  	PRAM Tape Reproducer (Pre-Recorded PAX Address):	 	 	  	 	
				
 	  	MPES Tape Reproducer (Audio Entertainment):	 	 	  	 	
				
 	  	Tape Reproducer (Video Entertainment):	 	 	  	 	
				
 	  	Audio Management Unit/SELCAL Decoder:	 	 	  	 	
				
 	  	ACARS Management Unit:	 	 	  	 	
				
 	  	RMP - Radio Management Panel:	 	 	  	 	
 
176

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

AVIONICS SYSTEMS (continued)
 
27 FLIGHT CONTROL COMPUTER

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	ELAC - Elevator/Aileron Computer:	 	 	  	 	
				
 	  	SFCC - Slat/flap Control Computer:	 	 	  	 	
				
 	  	SEC - Spoiler/Elevator Computer:	 	 	  	 	
				
 	  	FCDC - Flight Control Data Concentrator:	 	 	  	 	
31 INDICATING AND RECORDING

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	Multifunction Printer:	 	 	  	 	
				
 	  	DFDR - Flight Data Recorder:	 	 	  	 	
				
 	  	FDIU - Digital Flight Data Interface Unit:	 	 	  	 	
				
 	  	Accelerometer:	 	 	  	 	
				
 	  	FWC - Flight Warning Computers:	 	 	  	 	
				
 	  	QAR - Quick Access Recorder:	 	 	  	 	
				
 	  	AIDS - Aircraft Integrated Data System:	 	 	  	 	
ELECTRONIC INSTRUMENT SYSTEM (EIS)

                 	  	PFD - Primary Flight Display:	 	 	  	 	
				
                 	  	ND - Navigation Display:	 	 	  	 	
				
 	  	SDACS - System Data Acquisition Concentrators:	 	 	  	 	
				
 	  	Display Management Computers:	 	 	  	 	
				
 	  	EWD - Engine/Warning Display:	 	 	  	 	
				
 	  	SD - System Display:	 	 	  	 	
 
177

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

AVIONICS SYSTEMS (continued)

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	CFDIU - Centralized Fault Display Interface:	 	 	  	 	
34 NAVIGATION

QTY	  	COMPONENT	 	MANUFACTURER	  	MODEL or PART
NUMBER	
				
                 	  	ADIRU - Air Data/Inertial Reference System:	 	 	  	 	
				
 	  	DME - Distance Measuring Equipment Interrogators:	 	 	  	 	
				
 	  	VHF VOR/Marker Beacon Receiver:	 	 	  	 	
				
 	  	VHF ILS Receiver or Multi Mode Receiver:	 	 	  	 	
				
 	  	DDRMI - Digital Distance & Radio Magnetic Indicator:	 	 	  	 	
				
 	  	Radio Altimeter Transceiver:	 	 	  	 	
				
 	  	Weather Radar Transceiver:	 	 	  	 	
				
 	  	TCAS - Traffic Alert and Collision Avoidance System Computer:	 	 	  	 	
				
 	  	ATC - Air Traffic Control System Transponder:	 	 	  	 	
				
 	  	Microwave Landing Receiver:	 	 	  	 	
				
 	  	GPWS - Ground Proximity Warning System:	 	 	  	 	
				
 	  	ADF - Automatic Direction Finder Receiver:	 	 	  	 	
 
178

INTERNATIONAL LEASE FINANCE CORPORATION
A319-100/CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.
TECHNICAL EVALUATION REPORT A319/A320/A321

INSPECTOR RECORD

INSPECTED BY:	 	 	 	DATE:                     	 		
					
OPERATOR:	 		 	REGISTERED OWNER:	 	 	 		
			
ADDRESS OF OPERATOR:	 	 	 		

			

CONTACT
(Name/Title):	 	 	 		
				
TELEPHONE:	 	 	 	TELEFAX:                                          	 		
					
Email Address:	 	 	 		 		 		

Department Contact	  	Name	  	Phone	  	Fax	  	Email	
					
Quality Control:	  	 	  	 	  	 	  	 	
					
Power Plant Engineering:	  	 	  	 	  	 	  	 	
					
Maintenance Programs/Planning:	  	 	  	 	  	 	  	 	
 
179

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.19
AIRCRAFT LEASE AGREEMENT
Dated as of June 18, 2007
between
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
as Lessee
and
Arrendadora Financiera Inbursa, S.A. de C.V.
Sociedad Financiera de Objeto Multiple, Entidad Regulada,
Grupo Financiero Inbursa
as Lessor

Aircraft Make and Model:	  	One (1) New Airbus A319-133	
Aircraft Manufacturer’s Serial Number:	  	3175	
Aircraft Registration Mark:	  	XA-VOG	
Engine Make and Model:	  	IAE V2527M-A5	
Engine Serial Numbers:	  	V12636 and V12638	

TABLE OF CONTENTS

1.	 	DEFINITIONS	  	 	11	  	
				
	 	  1.1	  	General Definitions	  	 	11	  	
				
	 	  1.2	  	Specific Definitions	  	 	17	  	
			
2.	 	DELIVERY	  	 	18	  	
				
	 	  2.1	  	Delivery	  	 	18	  	
				
	 	  2.2	  	Delivery Date	  	 	18	  	
				
	 	  2.3	  	Delivery Subject to the Purchase Agreement Assignment	  	 	18	  	
				
	 	  2.4	  	No Lessor Liability	  	 	18	  	
				
	 	  2.5	  	Total Loss of Aircraft Prior to the Delivery Date	  	 	18	  	
				
	 	  2.6	  	Termination of the Purchase Agreement Assignment	  	 	19	  	
			
3.	 	LEASE TERM	  	 	20	  	
				
	 	  3.1	  	Lease Term	  	 	20	  	
				
	 	  3.2	  	Termination Date	  	 	20	  	
			
4.	 	SECURITY DEPOSIT, RENT, MAINTENANCE FUNDS AND OTHER PAYMENTS	  	 	21	  	
				
	 	  4.1	  	Security Deposit	  	 	21	  	
				
	 	  4.2	  	Rent	  	 	21	  	
				
	 	  4.3	  	Maintenance Funds	  	 	21	  	
				
	 	  4.4	  	Allocation of Payments	  	 	24	  	
				
	 	  4.5	  	Lessor’s Bank Account	  	 	24	  	
				
	 	  4.6	  	Default Interest	  	 	24	  	
				
	 	  4.7	  	No Deductions or Withholdings	  	 	25	  	
				
	 	  4.8	  	Value Added Taxes	  	 	26	  	
				
	 	  4.9	  	Currency Indemnity	  	 	27	  	
				
	 	  4.10	  	Lessor Performance of Lessee Obligation	  	 	27	  	
				
	 	  4.11	  	Consideration for Rent and Other Amounts	  	 	28	  	
			
5.	 	CONDITION OF AIRCRAFT	  	 	29	  	
				
	 	  5.1	  	Lessee Selection of Aircraft	  	 	29	  	
				
	 	  5.2	  	Condition at the Delivery Date	  	 	29	  	
 
2(137)

									
				
	 	  5.3	  	Delivery of Aircraft to Lessee	  	 	29	  	
				
	 	  5.4	  	Lessee Acceptance of Aircraft	  	 	29	  	
			
6.	 	PRE-DELIVERY, DELIVERY AND POST DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	  	 	30	  	
				
	 	  6.1	  	Pre-Delivery Requirements	  	 	30	  	
				
	 	  6.2	  	Delivery Requirements	  	 	31	  	
				
	 	  6.3	  	Post Delivery Requirements	  	 	32	  	
			
7.	 	DISCLAIMERS	  	 	33	  	
				
	 	  7.1	  	As Is, Where Is	  	 	33	  	
				
	 	  7.2	  	Waiver of Warranty of Description	  	 	33	  	
				
	 	  7.3	  	Lessee Waiver	  	 	34	  	
				
	 	  7.4	  	Conclusive Proof	  	 	34	  	
				
	 	  7.5	  	No Lessor Liability for Losses	  	 	34	  	
				
	 	  7.6	  	No Liability to Repair or Replace	  	 	34	  	
				
	 	  7.7	  	No Waiver	  	 	35	  	
			
8.	 	MANUFACTURERS’ AND VENDORS’ WARRANTIES	  	 	36	  	
				
	 	  8.1	  	Warranties	  	 	36	  	
				
	 	  8.2	  	Reassignment	  	 	36	  	
				
	 	  8.3	  	Warranty Claims	  	 	36	  	
			
9.	 	OPERATION OF AIRCRAFT	  	 	37	  	
				
	 	  9.1	  	Costs of Operation	  	 	37	  	
				
	 	  9.2	  	Compliance with Laws and Insurance	  	 	37	  	
				
	 	  9.3	  	Training	  	 	37	  	
				
	 	  9.4	  	No Violation of Insurance Policies	  	 	37	  	
				
	 	  9.5	  	Flight and Airport Charges	  	 	38	  	
			
10.	 	SUBLEASES	  	 	39	  	
				
	 	10.1	  	No Sublease without Lessor Consent	  	 	39	  	
				
	 	10.2	  	Lessor Costs	  	 	39	  	
				
	 	10.3	  	Prohibited Countries	  	 	39	  	
				
	 	10.4	  	Approved Subleases	  	 	39	  	
				
	 	10.5	  	Assignment of Sublease	  	 	40	  	
 
3(137)

									
				
	 	10.6	  	Wet Leases	  	 	41	  	
				
	 	10.7	  	Continued Responsibility of Lessee	  	 	41	  	
			
11.	 	MAINTENANCE OF AIRCRAFT	  	 	42	  	
				
	 	11.1	  	General Obligation	  	 	42	  	
				
	 	11.2	  	Specific Engine Requirements	  	 	42	  	
				
	 	11.3	  	Specific Obligations	  	 	43	  	
				
	 	11.4	  	Replacement of Parts	  	 	44	  	
				
	 	11.5	  	Removal of Engines	  	 	45	  	
				
	 	11.6	  	Installation of Engines on Other Aircraft	  	 	45	  	
				
	 	11.7	  	Removal of APU	  	 	46	  	
				
	 	11.8	  	Modifications	  	 	46	  	
				
	 	11.9	  	Performance of Work by Third Parties	  	 	48	  	
				
	 	11.10	  	Reporting Requirements	  	 	48	  	
				
	 	11.11	  	Lessor Rights to Inspect Aircraft	  	 	48	  	
				
	 	11.12	  	Airworthiness Directives Cost Sharing	  	 	49	  	
			
12.	 	USE OF MAINTENANCE FUNDS	  	 	50	  	
				
	 	12.1	  	Airframe Structural Maintenance Fund	  	 	50	  	
				
	 	12.2	  	Engine Performance Restoration Maintenance Fund	  	 	50	  	
				
	 	12.3	  	Engine LLP Maintenance Fund	  	 	51	  	
				
	 	12.4	  	APU Maintenance Fund	  	 	51	  	
				
	 	12.5	  	Landing Gear Maintenance Fund	  	 	51	  	
				
	 	12.6	  	Contribution	  	 	51	  	
				
	 	12.7	  	Contribution Adjustment	  	 	52	  	
				
	 	12.8	  	Costs in Excess of Maintenance Funds	  	 	52	  	
				
	 	12.9	  	Contribution after Termination Date and Retention of Maintenance Funds	  	 	52	  	
			
13.	 	TITLE, REGISTRATION AND IDENTIFICATION PLATES	  	 	54	  	
				
	 	13.1	  	Title to the Aircraft	  	 	54	  	
				
	 	13.2	  	Registration of Aircraft	  	 	54	  	
				
	 	13.3	  	Registration of this Lease	  	 	54	  	
				
	 	13.4	  	Registration of Title	  	 	55	  	
 
4(137)

									
				
	 	13.5	  	Registration of Security Interest	  	 	55	  	
				
	 	13.6	  	Evidence of Registration and Filings	  	 	55	  	
				
	 	13.7	  	Identification Plates	  	 	55	  	
			
14.	 	TAXES	  	 	56	  	
				
	 	14.1	  	General Obligation of Lessee	  	 	56	  	
				
	 	14.2	  	Exceptions to Indemnity	  	 	56	  	
				
	 	14.3	  	After Tax Basis	  	 	58	  	
				
	 	14.4	  	Timing of Payment	  	 	58	  	
				
	 	14.5	  	Contests	  	 	58	  	
				
	 	14.6	  	Refunds	  	 	58	  	
				
	 	14.7	  	Cooperation in Filing Tax Returns	  	 	59	  	
				
	 	14.8	  	Survival of Obligations	  	 	59	  	
				
	 	14.9	  	Protection	  	 	59	  	
				
	 	14.10	  	Mitigation	  	 	59	  	
			
15.	 	INDEMNITIES	  	 	60	  	
				
	 	15.1	  	General Indemnity	  	 	60	  	
				
	 	15.2	  	Exceptions to General Indemnities	  	 	61	  	
				
	 	15.3	  	After Tax Basis	  	 	62	  	
				
	 	15.4	  	Timing of Payment	  	 	62	  	
				
	 	15.5	  	Subrogation	  	 	62	  	
				
	 	15.6	  	Notice	  	 	62	  	
				
	 	15.7	  	Refunds	  	 	62	  	
				
	 	15.8	  	Defense of Claims	  	 	63	  	
				
	 	15.9	  	Survival of Obligation	  	 	63	  	
			
16.	 	INSURANCE	  	 	64	  	
				
	 	16.1	  	Categories of Insurance	  	 	64	  	
				
	 	16.2	  	Write Back of Any Date Recognition Exclusion	  	 	64	  	
				
	 	16.3	  	Third Party War Liability Insurance	  	 	64	  	
				
	 	16.4	  	Installation of Third Party Engine	  	 	64	  	
				
	 	16.5	  	Insurance for Indemnities	  	 	65	  	
				
	 	16.6	  	Renewal	  	 	65	  	
 
5(137)

									
				
	 	16.7	  	Assignment of Rights by Lessor	  	 	65	  	
				
	 	16.8	  	Deductibles	  	 	65	  	
				
	 	16.9	  	Insurance for Wet Lease Operations	  	 	66	  	
				
	 	16.10	  	Information	  	 	66	  	
				
	 	16.11	  	Currency	  	 	66	  	
				
	 	16.12	  	Grounding of Aircraft	  	 	66	  	
				
	 	16.13	  	Failure to Insure	  	 	66	  	
				
	 	16.14	  	Reinsurance	  	 	67	  	
				
	 	16.15	  	Limit on Hull in favor of Lessee	  	 	67	  	
				
	 	16.16	  	AVN 67B	  	 	67	  	
			
17.	 	LOSS, DAMAGE AND REQUISITION	  	 	68	  	
				
	 	17.1	  	Definitions	  	 	68	  	
				
	 	17.2	  	Notice of Total Loss	  	 	69	  	
				
	 	17.3	  	Total Loss of Aircraft or Airframe	  	 	69	  	
				
	 	17.4	  	Surviving Engine(s)	  	 	70	  	
				
	 	17.5	  	Total Loss of Engine and Not Airframe	  	 	70	  	
				
	 	17.6	  	Total Loss of APU	  	 	71	  	
				
	 	17.7	  	Other Loss or Damage	  	 	72	  	
				
	 	17.8	  	Government Requisition	  	 	72	  	
				
	 	17.9	  	Temporary or Cautionary Detention or Securement	  	 	73	  	
			
18.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	  	 	74	  	
				
	 	18.1	  	Representations and Warranties	  	 	74	  	
				
	 	18.2	  	Covenants	  	 	77	  	
			
19.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	  	 	80	  	
				
	 	19.1	  	Representations and Warranties	  	 	80	  	
				
	 	19.2	  	Covenant of Quiet Enjoyment	  	 	81	  	
			
20.	 	FINANCIAL AND OTHER INFORMATION	  	 	82	  	
 
6(137)

									
			
21.	 	RETURN OF AIRCRAFT	  	 	84	  	
				
	 	21.1	  	Date of Return	  	 	84	  	
				
	 	21.2	  	Last Engine Shop Visits	  	 	84	  	
				
	 	21.3	  	Technical Report	  	 	84	  	
				
	 	21.4	  	Return Location	  	 	85	  	
				
	 	21.5	  	Full Aircraft Documentation Review	  	 	85	  	
				
	 	21.6	  	Copy of Lessee’s Maintenance Program	  	 	85	  	
				
	 	21.7	  	Aircraft Inspection	  	 	85	  	
				
	 	21.8	  	FAA or EASA Compliant	  	 	86	  	
				
	 	21.9	  	Certificate of Airworthiness Matters	  	 	87	  	
				
	 	21.10	  	General Condition of Aircraft at Return	  	 	87	  	
				
	 	21.11	  	Checks Prior to Return	  	 	89	  	
				
	 	21.12	  	Part Lives	  	 	92	  	
				
	 	21.13	  	Export and De-registration of Aircraft	  	 	93	  	
				
	 	21.14	  	Lessee’s Continuing Obligations	  	 	94	  	
				
	 	21.15	  	Return Acceptance Receipt	  	 	94	  	
				
	 	21.16	  	Indemnities and Insurance	  	 	95	  	
				
	 	21.17	  	Storage	  	 	95	  	
			
22.	 	ASSIGNMENT	  	 	96	  	
				
	 	22.1	  	No Assignment by Lessee	  	 	96	  	
				
	 	22.2	  	Sale or Assignment by Lessor	  	 	96	  	
				
	 	22.3	  	Lessor’s Lender	  	 	97	  	
				
	 	22.4	  	Lessee Cooperation	  	 	97	  	
				
	 	22.5	  	Change of Governing Law	  	 	97	  	
				
	 	22.6	  	Protections	  	 	97	  	
			
23.	 	DEFAULT OF LESSEE	  	 	100	  	
				
	 	23.1	  	Lessee Notice to Lessor	  	 	100	  	
				
	 	23.2	  	Events of Default	  	 	100	  	
				
	 	23.3	  	Lessor’s General Rights	  	 	102	  	
				
	 	23.4	  	De-registration and Export of Aircraft	  	 	104	  	
				
	 	23.5	  	Lessee Liability for Damages and Prejudices	  	 	104	  	
 
7(137)

									
				
	 	23.6	  	Waiver of Default	  	 	105	  	
				
	 	23.7	  	Present Value of Payments	  	 	105	  	
				
	 	23.8	  	Use of Termination Date	  	 	105	  	
				
	 	23.9	  	Mitigation of Damages	  	 	106	  	
			
24.	 	NOTICES	  	 	107	  	
				
	 	24.1	  	Manner of Sending Notices	  	 	107	  	
				
	 	24.2	  	Notice Information	  	 	107	  	
			
25.	 	GOVERNING LAW AND JURISDICTION	  	 	108	  	
				
	 	25.1	  	Governing Law	  	 	108	  	
				
	 	25.2	  	Jurisdiction	  	 	108	  	
				
	 	25.3	  	Waiver of Sovereign Immunity	  	 	108	  	
				
	 	25.4	  	Prevailing Party in Dispute	  	 	108	  	
				
	 	25.5	  	Waivers	  	 	109	  	
			
26.	 	MISCELLANEOUS	  	 	110	  	
				
	 	26.1	  	Expenses	  	 	110	  	
				
	 	26.2	  	Power of Attorney	  	 	110	  	
				
	 	26.3	  	Lessor Performance for Lessee	  	 	111	  	
				
	 	26.4	  	Lessor’s Payment Obligations	  	 	111	  	
				
	 	26.5	  	Materiality	  	 	111	  	
				
	 	26.6	  	Usury Laws	  	 	111	  	
				
	 	26.7	  	Delegation by Lessor	  	 	112	  	
				
	 	26.8	  	Confidentiality	  	 	112	  	
				
	 	26.9	  	Rights of Parties	  	 	112	  	
				
	 	26.10	  	Further Assurances	  	 	113	  	
				
	 	26.11	  	Spanish Language Version Prevails	  	 	113	  	
				
	 	26.12	  	Use of Word “including”	  	 	113	  	
				
	 	26.13	  	Headings	  	 	113	  	
				
	 	26.14	  	Invalidity of Any Provision or Illegality	  	 	114	  	
				
	 	26.15	  	Time Limitations	  	 	114	  	
				
	 	26.16	  	Amendments in Writing	  	 	114	  	
				
	 	26.17	  	Ratified Signatures	  	 	114	  	
				
	 	26.18	  	Entire Agreement	  	 	114	  	
 
8(137)

			
LIST OF EXHIBITS	
		
EXHIBIT A	  	ENGINE PERFORMANCE RESTORATION SHOP VISIT	
		
EXHIBIT B	  	PROHIBITED COUNTRIES	
		
EXHIBIT C	  	FORM OF CERTIFICATE OF INSURANCE	
		
EXHIBIT D	  	FORM OF BROKERS’ LETTER OF UNDERTAKING	
		
EXHIBIT E	  	FORM OF ACCEPTANCE CERTIFICATE	
		
EXHIBIT F	  	FORM OF POWER OF ATTORNEY	
		
EXHIBIT G	  	RETURN ACCEPTANCE RECEIPT	
		
EXHIBIT H	  	FORM OF MONTHLY REPORT	
		
EXHIBIT I	  	TECHNICAL EVALUATION REPORT	
		
EXHIBIT J	  	FORM OF DEPOSIT AGREEMENT	
		
EXHIBIT K	  	FORM OF LEGAL OPINION	
 
9(137)

AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (this “ Lease ”) is made and entered into as of June 18, 2007
BETWEEN : 
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. , a Mexican company whose address and principal place of business is at Prolongacion Paseo de la Reforma No. 490, Piso 1, Col. Santa Fe Peña Blanca, De. Alvaro Obregon, México, D.F. 01012 (“ Lessee ”)
AND
Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa , a Mexican company whose address and principal place of business is at Insurgentes Sur No. 3500, P.B., Col. Peña Pobre, Mexico, D.F., C.P. 14060 (“ Lessor ”). 1
The subject matter of this Lease is one (1) new Airbus A319-133 aircraft (as more particularly described in the Acceptance Certificate). In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease which reflects the determinant motivation of their will to enter into the same, Lessor hereby agrees to lease to Lessee and Lessee hereby agrees to lease from Lessor the Aircraft (as hereinafter defined) and the parties further agree as follows:

1  	The Lessor does not have approval of the Ministry of Finance and Public Credit as such is not required, however it shall be subject to the supervision of the National Banking and Stock Commission.	
 
10

1.	DEFINITIONS	
Except where the context otherwise requires, the following words have the following meanings for all purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the words. Any agreement defined below includes each amendment, modification, supplement and waiver thereto in effect from time to time.
 
1.1	General Definitions	
“ Acceptance Certificate ” means the acceptance certificate substantially in the form of Exhibit E hereto.
“ Aircraft ” means the Airframe, two (2) Engines, APU, Parts and Aircraft Documentation, as the context permits or requires, individually or collectively.
“ Aircraft Documentation ” means all (a) log books, Aircraft records, manuals and other documents provided to Lessee in connection with and relating to the Aircraft, (b) documents listed in the Acceptance Certificate and (c) any other documents required to be maintained in respect of the Aircraft or any Part thereof during the Lease Term and until the Termination Date by the Aviation Authority, Lessee’s Maintenance Program and this Lease.
“ Airframe ” means the airframe listed in the Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding the Engines or any engines and the APU).
“ Air Navigation Charges ” include all navigation, over-flight charges and other charges incurred in connection with air navigation or movement of aircraft.
“ Airport Charges ” include all charges incurred in connection with the landing, parking or taking off of aircraft at airports or for the use of, or for services provided at, airports.
“ Airworthiness Directives ” or “ ADs ” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by the Aviation Authority, the FAA and all Consignes de Navigabilite issued by the French Direction Generale de l’Aviation Civile .
“ APU ” means (a) the auxiliary power unit listed in the Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by Lessor and leased by Lessor to Lessee pursuant to Article 17.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in Lessor in accordance with the terms of Article 11.4.
 
11(137)

“ Aviation Authority ” means the Dirección General de Aeronáutica Civil of Mexico or any Government Entity which under the Laws of Mexico from time to time has control over civil aviation or the registration, airworthiness, maintenance standards or operation of aircraft in Mexico. If the Aircraft is registered in a country other than Mexico, “Aviation Authority” means the agency which regulates civil aviation in such other country.
“ Aviation Documents ” means any or all of the following which at any time may be obtained from the Aviation Authority: (a) a ferry flight permit from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) a duly filed application for registration of the Aircraft with the Aviation Authority, (c) the certificate of registration for the Aircraft issued by the Aviation Authority with Lessor listed as owner of the Aircraft, (d) a standard certificate of airworthiness for the Aircraft specifying transport category (passenger) and evidencing registration of Lessee as operator of the Aircraft, (e) such recordation of Lessor’s title to the Aircraft and Lessor’s or Lessor’s Lender’s interest in this Lease and Lessor’s Lender’s security interest in the Aircraft as may be available in the State of Registration, (f) concession and/or air transport permit, (g) an air operator’s certificate, including the Aircraft listed as incorporated in the Operations Specifications of Lessee and (h) all such other authorizations, approvals, consents and certificates in the State of Registration as may be required to enable Lessee lawfully to operate the Aircraft.
“ Business Day ” means a day other than a Saturday or Sunday on which the banks in New York City, London, England, and in Mexico City, Mexico are open for the transaction of business of the nature required by this Lease.
“ Cape Town Convention ” means the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the “ Protocol ”), both signed in Cape Town, South Africa on November 16, 2001 together with any protocols, regulations, rules, orders, agreements, instruments, amendments, supplements, revisions or otherwise that have or may be subsequently made in connection with the Convention and/or the Protocol by the “Supervisory Authority” (as defined in the Protocol), the “International Registry” or “Registrar” (as defined in the Convention) or an appropriate “registry authority” (as defined in the Protocol) or any other international or national body or authority having jurisdiction over Lessee or the Aircraft.
“ Creditor ” means any lessor, owner, bank, lender, mortgagee or other Person which is the owner of or has any interest in an aircraft engine or aircraft operated by Lessee.
“ Creditor Agreement ” means the applicable agreement between a Creditor and Lessee or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by Lessee on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
 
12(137)

“ Cycle ” means (a) with respect to the Airframe, one take-off and landing of the Aircraft and (b) with respect to an Engine, one take-off and landing of the aircraft on which the relevant Engine is installed.
“ Default ” means any event which, upon the giving of notice, the lapse of time and/or a relevant determination, would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft from Lessor to Lessee pursuant to Articles 2 and 5 of this Lease.
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means the Manufacturer’s facilities in Hamburg, Germany.
“ Deposit Agreement ” means the irrevocable deposit agreement entered as of the date of this Lease between Lessor and Lessee in accordance to which Lessee shall have delivered to Lessor a security deposit in the amount of ***** in order to guarantee the compliance by Lessee with its obligations under this Lease for its lease of the Aircraft, substantially in the form of Exhibit J hereto.
“ Dollars ”, “ $ ” and “ US$ ” mean the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency or any successor thereto.
“ Engine ” means (a) each of the IAE V2527M-A5 engines bearing manufacturer’s serial number V12636 and V12638 respectively, (b) any replacement engine acquired by Lessor and leased by Lessor to Lessee pursuant to Article 17.5 following a Total Loss of an Engine and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in Lessor in accordance with the terms of Article 11.4.
“ Engine Performance Restoration Shop Visit ” shall have the meaning as set forth in Exhibit A .
“ Event of Default ” means any of the events referred to in Article 23.2.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the U.S.
“ FARs ” means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
13(137)

“ Flight Hour ” means (a) with respect to the Airframe, each hour or part thereof (rounded up to the nearest two (2) decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take-off until the wheels of the Aircraft next touch the ground on the next following landing, and (b) with respect to an Engine, each hour or part thereof (rounded up to the nearest two (2) decimal places) elapsing from the moment the wheels of the aircraft on which the relevant Engine is installed leave the ground on take-off until the wheels of such aircraft next touch the ground on the next following landing.
“ Geneva Convention ” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland, on June 19, 1948.
“ Government Entity ” means any (a) federal, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof and (c) association, organization or institution of which any of the entities listed in (a) or (b) is a member or to whose jurisdiction any such entity is subject.
“ Heavy Repair ” has, in relation to the APU, the meaning ascribed to such term in the OEM’s Component Maintenance Manual Section 4.1 General Workscope Related Definitions, as revised.
“ Landing Gear ” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.
“ Law ” means any (a) statute, decree, constitution, regulation, rule, norm, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party, (c) judicial or administrative interpretation or application of any of the foregoing, (d) any binding judicial precedent having the force of law or any jurisprudence issued by the Supreme Court of Mexico.
“ Lease ” means this Aircraft Lease Agreement, together with all Exhibits hereto.
“ Lessee’s Parent ” means Controladora Vuela Compañía de Aviación S.A. de C.V., a Mexican company.
“ Lessor’s Lien ” means any Security Interest created by or attributable to Lessor or any Lessor’s Lender or any affiliate of either.
“ LIBOR ” means in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Lease:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter Bank Offered Rate, as appearing on page BBAMI of Bloomberg (or successor or replacement page), or failing that, Reuters (or successor	
 
14(137)

 	or replacement page), or failing that, an equivalent page published by an alternative information provider for the specified period after 11.00 a.m. on the quotation date therefore; or	
 
 	(b)	if the applicable rate is not published as set forth in subsection a) of this definition, or is not determined in any way whatsoever, the applicable rate shall be the rate the market recognizes as the rate that has expressly replaced or substituted such rate, furthermore, in the event that either the applicable rate ceases to exist or a replacement rate is not expressly established, the parties shall convene to agree in good faith on a new applicable rate within three (3) Business Days following such event.	
For the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined.
“ LLP ” means any life limited Part.
“ Maintenance Program ” means Lessee’s maintenance program as approved by the Aviation Authority or such other maintenance program as Lessor may approve in writing, with such approval not to be unreasonably withheld.
“ Manufacturer ” means Airbus S.A.S.
“ Medium Repair ” has, in relation to the APU, the meaning ascribed to such term in the OEM’s Component Maintenance Manual Section 4.1 General Workscope Related Definitions, as revised.
“ Mexico ” means the United Mexican States.
“ MPD ” means at any relevant time, the latest revision of the Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.
“ Operative Documents ” means each of this Lease, any amendments hereto, the Acceptance Certificate, the Warranty Assignments and any other documentation in connection with the leasing of the Aircraft by Lessee from Lessor.
“ Overhaul ” means the full reconditioning of the Airframe, an Engine, the APU, Landing Gear, module or Part, as the case may be, in which such equipment has been disassembled (in accordance with Manufacturer’s and/or Maintenance Program requirements, as applicable), cleaned, thoroughly inspected and returned to the highest standard specified by, excluding the Engines, the applicable manufacturer’s overhaul manuals, and, in case of the Engines, the Engine manufacturer’s maintenance management plan.
 
15(137)

“ Part ” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, Lessee furnished or Lessor purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of Lessor.
“ Permitted Lien ” means (a) Lessor’s Liens, (b) Security Interests arising in the ordinary course of Lessee’s business for Taxes either not yet assessed or, if assessed, not yet due or being contested in good faith in accordance with Article 14.5, (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided), (c) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ liens or similar Security Interests arising by operation of Law after the Delivery Date in the ordinary course of Lessee’s business for amounts which are either not yet due or are being contested in good faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order to pursue such proceedings, an adequate bond has been provided) and (d) liens in respect of judgments which have been outstanding for less than 30 days or which have been stayed pending appeal so long as, in the case of (b), (c) or (d) above, such proceedings do not involve any material likelihood of sale, forfeiture or loss of the Aircraft.
“ Person ” means any individual including any individual conducting business activities, or any legal entity including any firm, partnership, joint venture, trust, corporation, company, limited liability company, Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether having distinct legal personality or not.
“ Prohibited Country ” means any country comprised by Exhibit B , as revised from time to time.
“ Purchase Agreement ” means the A320 Family Purchase Agreement dated October 28, 2005 between Manufacturer, as seller, and Lessee’s Parent, as purchaser in respect of the Aircraft.
“ Purchase Agreement Assignment ” means the Purchase Agreement Assignment to be dated on or about June 22, 2007, between Lessee’s Parent, as assignor, Lessor, as assignee, and Lessee, as lessee, in respect of the Purchase Agreement, including the Consent and Agreement of Manufacturer.
“ Security Interest ” means any encumbrance or security interest, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title retention, attachment, levy, claim, or right of possession or detention.
 
16(137)

“ State of Registration ” means Mexico or such other country or state of registration of the Aircraft as Lessor may approve in writing.
“ U.S. ” means the United States of America.
“ Warranty Assignments ” mean (i) the Airframe Warranty Agreement to be dated on or about June 22, 2007 among Lessee’s Parent, Lessor and Lessee with the consent and agreement of Manufacturer in relation to the Airframe, and (ii) the Engine Warranty Agreement to be dated on or about June 22, 2007 among IAE International Aero Engines AG, Lessee’s Parent, Lessor and Lessee in relation to the Engines.
 
1.2	Specific Definitions	
The following terms are defined in the Articles referenced below:

Terms	  	Article	 	
		
Agreed Value	  	 	17.1	  	
Airframe Structural Maintenance Fund	  	 	4.3	  	
APU Maintenance Fund	  	 	4.3	  	
Default Interest	  	 	4.6	  	
Engine Performance Restoration	  				
Maintenance Fund	  	 	4.3	  	
Engine LLP Maintenance Fund	  	 	4.3	  	
Excluded Taxes	  	 	14.2	  	
Damages and Prejudices	  	 	15.1	  	
Expiration Date	  	 	3.1	  	
Indemnitees	  	 	15.1	  	
Landing Gear Maintenance Fund	  	 	4.3	  	
Lease Term	  	 	3.1	  	
Lessor’s Assignee	  	 	22.2.1	  	
Lessor’s Bank Account	  	 	4.5	  	
Lessor’s Lender	  	 	22.3	  	
Maintenance Fund	  	 	4.3	  	
Modification	  	 	11.8.1	  	
Multiparty Sublease	  	 	10.4	  	
Multiparty Sublessee	  	 	10.4	  	
Net Total Loss Proceeds	  	 	17.1	  	
Rent	  	 	4.2	  	
Security Deposit	  	 	4.1	  	
Tax Indemnitee	  	 	14.1	  	
Taxes	  	 	14.1	  	
Termination Date	  	 	3.2	  	
Total Loss	  	 	17.1	  	
Total Loss Date	  	 	17.1	  	
Total Loss Proceeds	  	 	17.1	  	
Waste Expense	  	 	12.3	  	
 
17(137)

2.	DELIVERY	
 
2.1	Delivery	
Subject to the terms and conditions of this Lease, Lessor will deliver the Aircraft to Lessee on the Delivery Date (as defined in the Purchase Agreement Assignment) at the Delivery Location.
 
2.2	Delivery Date	
This Lease will commence on the Delivery Date (as defined in the Purchase Agreement Assignment), which is expected to be on or about June 22, 2007. On the Delivery Date, Lessee shall execute and deliver to Lessor the Acceptance Certificate confirming Delivery and commencement of the Lease.
 
2.3	Delivery Subject to the Purchase Agreement Assignment	
Lessor and Lessee expressly acknowledge that Delivery of the Aircraft to Lessee under this Lease is subject to and conditioned upon delivery of the Aircraft to Lessor under the Purchase Agreement Assignment.
 
2.4	No Lessor Liability	
Lessor shall have no liability for any loss, damage or expense, or any loss of profit, arising from any delay or failure in Delivery to Lessee unless such delay or failure arises as a direct consequence of the willful misconduct or breach of any obligation under this Lease of or by Lessor, and in no event shall Lessor be liable for any delay or failure which is caused by any breach of this Lease or delay on the part of Lessee or Lessee’s Parent or by any breach of the Purchase Agreement or the Purchase Agreement Assignment other than by Lessor.
 
2.5	Total Loss of Aircraft Prior to the Delivery Date	
If a Total Loss of the Aircraft occurs prior to the Delivery Date, this Lease shall automatically terminate and neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit and any prepaid Rent received by Lessor.
 
18(137)

2.6	Termination of the Purchase Agreement Assignment	
If the Purchase Agreement Assignment is terminated and/or the Delivery Date under the Purchase Agreement Assignment does not occur for any reason whatsoever, this Lease shall automatically terminate and neither party will have any further liability to the other, except that Lessor will return to Lessee the Security Deposit and any prepaid Rent received by Lessor, provided that no Default or Event of Default has occurred under this Lease. Notwithstanding the foregoing, Lessor shall be entitled to keep the Security Deposit if the Purchase Agreement Assignment is terminated and/or the Delivery Date under the Purchase Agreement Assignment does not occur for any reason not directly attributable to Lessor.
 
19(137)

3.	LEASE TERM	
 
3.1	Lease Term	
The term of leasing of the Aircraft (“ Lease Term ”) shall be mandatory (“ plazo forzoso ”) from the time it commences on the Delivery Date and until and including March 31, 2017 (One Hundred Seventeen (117) months after July 1, 2007) (“ Expiration Date ”).
 
3.2	Termination Date	
This Lease may terminate on any of the dates set forth below:
 
 	(a)	the Expiration Date, provided Lessee returns the Aircraft to Lessor on the Expiration Date in the condition required by Article 21; or	
 
 	(b)	a date earlier than the Expiration Date, if:	
 
 	(i)	there is a Total Loss of the Aircraft prior to the Delivery Date pursuant to Article 2.5;	
 
 	(ii)	termination of this Lease occurs pursuant to Article 2.6;	
 
 	(iii)	there is a Total Loss of the Aircraft and payment in full of all amounts payable by Lessee to Lessor is made to Lessor or Lessor’s Lender in accordance with and as required under Article 17.3; or	
 
 	(iv)	an Event of Default occurs and Lessor terminates this Lease and repossesses the Aircraft or otherwise terminates this Lease in accordance with Article 23.3.	
 
 	(c)	a date later than the Expiration Date if:	
 
 	(i)	an Event of Default occurs hereunder by Lessee returning the Aircraft in the condition required by this Lease after the Expiration Date; or	
 
 	(ii)	an Event of Default occurs and Lessor repossesses the Aircraft or otherwise terminates this Lease pursuant to Article 23.3.	
The “ Termination Date ” is the date on which this Lease terminates because one of the above has occurred.
 
20(137)

4.	SECURITY DEPOSIT, RENT, MAINTENANCE FUNDS AND OTHER PAYMENTS	
 
4.1	Security Deposit	
In accordance with and subject to the provisions of the Deposit Agreement, which shall be executed by the parties in the form attached hereto as Exhibit J , Lessee will pay Lessor a cash security deposit of ***** in connection with the leasing of the Aircraft (the “ Security Deposit ”) and Lessor shall hold, apply, retain and return such Security Deposit in accordance with the applicable provisions of this Lease and the Deposit Agreement.
 
4.2	Rent	
 
4.2.1	Subject to the adjustment pursuant to Article 4.2.2 below, Lessee will pay Lessor the amount of ***** payable monthly in advance as rent for the Aircraft (“ Rent ”).	
 
4.2.2	The amount of Rent set out in Article 4.2.1 is based on the average of the nine (9) year and ten (10) year US Swap Rate being equal to *****. The amount of Rent will increase or decrease, as the case may be, by ***** for each basis point such rate differs from ***** three (3) Business Days prior to the Delivery Date and will thereafter be fixed throughout the Lease Term.	
 
4.2.3	Lessee will pay Lessor the first payment of Rent during the Lease Term no later than on July 2, 2007. Such first payment of Rent will comprise rent for the Aircraft on a prorated basis for the period from and including the Delivery Date until and including July 31, 2007. Each subsequent payment of Rent will be due monthly on the 1 st day of each month during the Lease Term except that, if such day is not a Business Day, the Rent will be due on the immediately succeeding Business Day.	
 
4.3	Maintenance Funds	
 
4.3.1	Lessee will pay to Lessor (or to whomever Lessor may from time to time designate in conformity with Article 4.3.6) contributions for the Maintenance Funds related to the concepts described below, based on Lessee’s use of the Aircraft during the Lease Term, in the following amounts (individually, “ Airframe Structural Maintenance Fund ” “ Engine Performance Restoration Maintenance Fund ,” “ Engine LLP Maintenance Fund ” “ APU Maintenance Fund ” and “ Landing Gear Maintenance Fund ”, and collectively “ Maintenance Funds ”). It is hereby agreed that the Maintenance Funds shall be used for the benefit of the Aircraft as hereinafter determined and are for such purpose considered to be an integral part thereof. In accordance with the provisions of this Lease, Lessee shall be entitled to withdraw	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
21(137)

 	and receive payment from such Maintenance Funds as provided for in this Lease with respect to agreed maintenance performed on the Aircraft, Airframe, Engines, APU and Landing Gear as applicable:	

Type of Maintenance Fund	  	Amount of Maintenance Fund	
			
Airframe Structural
Maintenance Fund:	  	6Y Check:	  	***** per month	
			
	  	12Y Check:	  	***** per month	
		
Engine Performance Restoration Maintenance Fund:	  	***** for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)	
		
Engine LLP Maintenance Fund:	  	***** for each Engine (payable with the Engine is utilized on the Aircraft or another aircraft).	
		
APU Maintenance Fund:	  	***** per APU operating hour (payable when the APU is utilized on the Aircraft or another aircraft)	
		
Landing Gear Maintenance Fund:	  	***** per month	
 
4.3.2	The Engine Performance Restoration Maintenance Fund rate above assumes a Flight Hour-to-Cycle ratio of 1.8:1 and that the engine thrust levels have been de-rated *****. Depending on Lessee’s Flight Hour-to-Cycle ratio for the Aircraft (or such other aircraft on which the Engine is installed) and the thrust rating of the Engines, the Engine Performance Restoration Maintenance Fund rate will be adjusted in accordance with the following:	

Ratio	  	1:1	  	1.25:1	  	1.5:1	  	1.8:1	  	2:1	  	2.25:1	  	2.5:1	  	2.75:1	  	3:1	
***** de-rating US$ (2007)	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
***** de-rating US$ (2007)	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
22(137)

4.3.3	In the first calendar year of the Lease Term, Lessee will pay Engine Performance Restoration Maintenance Fund based upon an assumed Flight Hour-to-Cycle ratio of 1.8:1. A calculation of Lessee’s actual Flight Hour-to-Cycle ratio will be made annually as of May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008, and any difference in Engine Performance Restoration Maintenance Fund will be reconciled on the date when the next Maintenance Fund payment is due (in accordance with Article 4.3.6) following such calculation. Lessee’s actual Flight Hour-to-Cycle ratio during such calendar year (or portion thereof) will set the Engine Performance Restoration Maintenance Fund for the succeeding calendar year.	
 
4.3.4	If in any calendar year (or portion thereof) of the Lease Term, the Airframe is operated more Cycles than the maximum number of Cycles which would result from an average Flight Hour-to-Cycle ratio of 1.25 to 1, Lessee will pay Lessor as additional Maintenance Fund ***** for each Airframe Cycle the Airframe actually operated during such period in excess of the number of Cycles which result from an average Flight Hour-to-Cycle ratio of 1.25 to 1. A calculation will be made as of May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008, and such additional Maintenance Fund payment will be due and payable by Lessee on the date when the next Maintenance Fund payment is due (in accordance with Article 4.3.6) following such calculation. Such additional Maintenance Fund payment will not be available for withdrawal to Lessee pursuant to Article 12.	
 
4.3.5	The amounts of the Maintenance Funds in this Article 4.3 are expressed in April 2007 U.S. Dollars and will increase annually by ***** on May 1 st of each calendar year during the Lease Term, beginning on May 1, 2008.	
 
4.3.6	The Maintenance Funds will be paid by Lessee on or before the fifteenth (15 th ) day of the next calendar month following the month in which the Delivery Date occurs and thereafter monthly during the Lease Term. If the fifteenth (15 th ) day of any calendar month is not a Business Day, the Maintenance Funds will be due on the immediately succeeding Business Day. All Maintenance Funds for flying performed during the month in which the Termination Date occurs (and the preceding month, unless paid) will be paid on the Termination Date, unless otherwise agreed by the parties. Lessee will pay the monthly Airframe Structural Maintenance Fund and the monthly Landing Gear Maintenance Fund on a prorated basis for any period not constituting a full month during the Lease Term.	
 
4.3.7	The Maintenance Funds shall be used for agreed maintenance, repair and overhaul of the Aircraft including the Airframe, Engine, Engine LLPs, APU and Landing Gear in accordance with the provisions of this Article 4 and Article 12 of this Lease. The Maintenance Funds therefore are not considered a deposit and subject in each case to Lessee’s rights and Lessor’s obligations under Article 12 and Article 17 of this Lease, cannot be subject of reimbursement to Lessee but shall be considered the sole	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	and exclusive property of Lessor as owner of the Aircraft. No interest will accrue or be paid at any time to Lessee on such Maintenance Funds and, subject to Lessor’s obligations under Article 12 and Article 17, Lessor may commingle the Maintenance Funds with Lessor’s general funds or may determine in its sole discretion that such be received and administered by a designated third party which shall be acting as trustee in respect to such funds and which shall conduct the allocation thereof in accordance with this Lease.	
 
4.4	Allocation of Payments	
Lessor or any third party designated in conformity with Article 4.3.7 of this Lease shall apply, hold, retain, invest, pay and otherwise manage any amounts paid or recovered in respect of Lessee’s liabilities hereunder in accordance with the provisions of this Lease.
 
4.5	Lessor’s Bank Account	
 
4.5.1	Payments due under this Lease will be made to the bank account(s) as Lessor may from time to time designate by written notice (the “ Lessor’s Bank Account ”).	
 
4.5.2	When it is stated in this Lease that an instalment of the Security Deposit, the monthly Rent, Maintenance Funds or any other payment is due or must be paid or made by Lessee by a specified date, then such payment must actually be received by Lessor’s bank with instructions for deposit in Lessor’s Bank Account on or before such specified date.	
 
4.6	Default Interest	
If Lessor does not receive the Rent or any other amount on or before the specific date when due, Lessee will pay Lessor as supplemental Rent (by way of agreed compensation of the cost of money and not as a conventional penalty) interest on any due and unpaid amounts payable by Lessee under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to ***** plus the ***** in effect on the date on which the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at Lessor’s Bank Account or, in the case of Lessor’s performance of Lessee’s obligations hereunder, from the date of payment by Lessor through the date of Lessee’s repayment to Lessor (“ Default Interest ”).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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4.7	No Deductions or Withholdings	
 
4.7.1	All payments by Lessee under this Lease, including the Security Deposit, Rent, Maintenance Funds, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of setoff, counterclaim, duties, or Taxes (as defined in Article 14) imposed in the State of Registration or any jurisdiction from which such payments are made (other than Taxes excluded under Article 14.2) unless Lessee is prohibited by Law from doing so, in which event Lessee will gross up the payment amount such that the net payment received by Lessor after any deduction or withholding equals the amounts called for under this Lease. Lessee will also do all of the following:	
 
 	(i)	Ensure that the deduction or withholding does not exceed the minimum amount legally required;	
 
 	(ii)	Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto); and	
 
 	(iii)	Furnish to Lessor within thirty (30) days after each payment a certified copy of the corresponding tax form or an official receipt of the relevant Government Entities involved, or such other evidence of payment as is in form and substance acceptable to Lessor, acting reasonably, for all amounts so deducted or withheld.	
 
4.7.2	As of the date of this Lease, Lessor is situated in Mexico and both parties agree that as of the date of this Lease no withholding Taxes are applicable in respect to any amounts payable hereunder by Lessee. Lessee will indemnify Lessor for any subsequent withholding Taxes imposed on any amounts payable hereunder arising as a result of changes in Mexican Law or the Law of any jurisdiction from which Lessee elects to make payments occurring after the Delivery Date and during the Lease Term, except for any such Tax or Taxes as may arise in connection with a voluntary or involuntary assignment, sale or other disposition by Lessor or any Lessor’s Lender of any of their respective right, title or interest in the Lease or the Aircraft or both which transfer does not arise as a result of the enforcement of any remedies by Lessor or Lessor’s Lender following the occurrence and during the continuation of an Event of Default or an assignment, sale or other disposition made at the request by Lessee or otherwise rendered necessary as a result of an act or omission of Lessee.	
 
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4.8	Value Added Taxes	
The Rent and other amounts payable by Lessee under this Lease are exclusive of any sales or use tax, value added tax, or similar tax, duty or imposition.
 
4.10	Net Lease	
 
4.10.1	This Lease is a net lease and Lessee’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:	
 
 	(a)	any right of setoff, counterclaim, recoupment, defense or other right (including any right of reimbursement) which Lessee may have against Lessor, Manufacturer, the Engine manufacturer or any other Person for any reason, including any claim Lessee may have for the foregoing;	
 
 	(b)	unavailability or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of any jurisdiction or Total Loss of the Aircraft. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Article 2445 and other applicable of the Federal Civil Code.;	
 
 	(c)	insolvency, concurso mercantil , bankruptcy, judicial recuperation, reorganization, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against Lessor, Lessee, Manufacturer, the Engine manufacturer or any other Person;	
 
 	(d)	invalidity or unenforceability or lack of due authorization of or other defect in this Lease;	
 
 	(e)	failure or delay on the part of any party to perform its obligations under this Lease; or	
 
 	(f)	any other circumstance which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of Lessee hereunder, other than a Total Loss, provided that Lessor shall have received all amounts then due and owing by Lessee to Lessor hereunder.	
 
4.10.2	This Lease shall not, except as expressly stated herein, be cancellable by Lessee and Lessee hereby expressly waives any and all right which it may now or at anytime	
 
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 	hereafter have, whether by statute or otherwise, to terminate, abate, cancel, quit, reduce, defer, suspend, or surrender this Lease, the Aircraft or any obligation assumed by Lessee hereunder. Nothing in this Article 4.10 will be construed to limit Lessee’s right to separately pursue in a court of law any claim it may have against any Person arising as a result of the breach of any obligation of such Person to Lessee.	
 
4.9	Currency Indemnity	
If under any applicable Law, whether as a result of a judgment against Lessee or the liquidation of Lessee or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, Lessee will as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. If the amount received by Lessor upon converting the payment into Dollars exceeds the amount payable under this Lease, Lessor will remit such excess to Lessee. For the purposes of this paragraph “rate of exchange” means the rate at which Lessor is able on the relevant date to purchase Dollars in New York or London (at Lessor’s option) with such other currency.
 
4.10	Lessor Performance of Lessee Obligation	
If Lessee fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, Lessor may (but is not required to) at its election after the expiry of any applicable grace periods and without having waived all or any of its rights in Law and/or hereunder, perform such obligation and/or pay such amount. Within five (5) Business Days after written notice to Lessee of the amount paid by Lessor on behalf of Lessee, Lessee will repay such amount together with Default Interest from the date of payment by Lessor until the date of repayment by Lessee. Any payment or performance by Lessor of a Lessee obligation hereunder will not affect the occurrence or continuance of the corresponding Event of Default, provided, however, that Lessee’s repayment of the amounts required under this Article shall be sufficient to cure such Event of Default.
 
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4.11	Consideration for Rent and Other Amounts	
The amount of the Rent and other payments contained herein are in consideration of Lessee’s waiver of warranties and indemnities set forth in Articles 7 and 15, respectively, and the other provisions of this Lease.
 
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5.	CONDITION OF AIRCRAFT	
 
5.1	Lessee Selection of Aircraft	
LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN, TYPE AND ALL OTHER FACTS AND CIRCUMSTANCES AS RELEVANT TO LESSEE AND ITS BUSINESS. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
 
5.2	Condition at the Delivery Date	
At the Delivery Date, the Aircraft will be in the same condition as delivered to Lessor under the Purchase Agreement.
 
5.3	Delivery of Aircraft to Lessee	
Subject to Lessee having satisfied all of the conditions precedent to Delivery set forth herein or the waiver of any of the same by Lessor in Lessor’s discretion, Lessor will tender the Aircraft for Delivery to Lessee on the Delivery Date at the Delivery Location. Upon the tender of the Aircraft by Lessor to Lessee, Lessee will accept the Aircraft and deliver to Lessor the Acceptance Certificate, duly executed. The date of tender by Lessor to Lessee in accordance with this Lease will be deemed to be the Delivery Date for all purposes under this Lease, including, but not limited to, the commencement of Lessee’s obligation to pay Rent hereunder.
 
5.4	Lessee Acceptance of Aircraft	
If Lessee fails to comply with the conditions contained in Articles 6.1 and 6.2 and, as a result thereof, Delivery under this Lease cannot take place, or if Lessee fails to take Delivery of the Aircraft when properly tendered for Delivery by Lessor in accordance with the terms and conditions set out herein, Lessee will indemnify Lessor and hold Lessor harmless from all costs, expenses and damages enumerated or otherwise described in Article 23.3 which are incurred by Lessor as a direct result thereof.
 
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6.	PRE-DELIVERY, DELIVERY AND POST DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS	
 
6.1	Pre-Delivery Requirements	
Lessee will do at its cost each of the following within the time frames set forth below:
 
6.1.1	On or prior to the Delivery Date , Lessee will deliver to Lessor each of the following, each in form and substance satisfactory to Lessor:	
 
 	(a)	copies of resolutions of the Board of Directors of Lessee or other written evidence of appropriate corporate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of Lessee hereunder;	
 
 	(b)	a certified copy of Lessee’s constitutional documents and any modifications thereto; and	
 
 	(c)	a copy of Lessee’s scheduled operating permit, air operator’s certificate and any other licenses permits or approvals relevant to Lessee’s operation as a certified air carrier.	
 
 	(d)	a Certificate of Insurance and Brokers’ Letter of Undertaking reflecting the requirements of Exhibits C and D , respectively, from Lessee’s insurance brokers evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date;	
 
 	(e)	a legal opinion from Lessee’s general counsel ( Director Jurídico ) in substantially the form of Exhibit K attached hereto on the due execution by Lessee of the Operative Documents, enforceability against Lessee on the matters stipulated in Article 13.6 and ancillary matters;	
 
 	(f)	ferry permit for the Aircraft issued by the Aviation Authority;	
 
 	(g)	evidence that the interests of Lessor as owner of the Aircraft and as lessor under this Lease have been properly filed for registration with the Aviation Authority or that satisfactory arrangements for the filing of the same have been made;	
 
 	(h)	letters addressed to (i) any relevant air traffic control authorities or entities, (ii) any relevant airport operators or administrators, and (iii) any relevant	
 
30(137)

 	maintenance providers, pursuant to which Lessee authorizes any such authorities or entities to issue to Lessor, upon Lessor’s request (Lessor agrees that it shall only make one (1) such request per authority or entity in any twelve (12) month period or once per maintenance event with respect to the Engines, unless a Default or Event of Default has occurred) and with copy to Lessee, a statement of account of all sums due by Lessee to the relevant authority or entity in respect of all aircraft (including, but not limited to, the Aircraft) operated by Lessee;	
 
 	(i)	a copy of such Aviation Documents or certified copies thereof as may be available prior to the Delivery Date;	
 
 	(j)	a power of attorney in the form of Exhibit F , which power of attorney shall have been duly executed by Lessee and properly notarized;	
 
 	(k)	a complete copy of the Maintenance Program for the Aircraft; and	
 
 	(l)	such other document or perform such other action as Lessor in its reasonable opinion deems necessary.	
 
6.1.2	No later than one (1) Business Day prior to the Delivery , Lessee will pay the first installment of Rent in accordance with Article 4.2.2.	
 
6.2	Delivery Requirements	
On the Delivery Date, each of the following will occur:
 
6.2.1	Lessee will pay any unpaid installments of the Security Deposit in accordance with Article 4.1.	
 
6.2.2	Upon proper tender of the Aircraft for delivery by Lessor, Lessee will execute and deliver to Lessor the Acceptance Certificate.	
 
6.2.3	Lessee will cause the Aircraft to be registered in the aviation section of the register of aircraft of the State of Registration noting the interests of Lessor as lessor and owner and Lessee as operator in accordance with applicable Law.	
 
6.2.4	Lessee will deliver to Lessor a certificate, in form and substance satisfactory to Lessor, signed by an officer of Lessee stating all of the following:	
 
 	(a)	the representations and warranties contained in Article 18.1 are true and accurate in all material respects on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and	
 
 	(b)	no Default or Event of Default has occurred and is continuing or will result from Lessee’s lease of the Aircraft hereunder.	
 
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6.2.5	Lessee will deliver to Lessor copies of such Aviation Documents as have not been previously delivered which are then available.	
 
6.2.6	Lessor will deliver to Lessee the Warranty Assignments duly executed by Lessor.	
 
6.3	Post Delivery Requirements	
As soon as available but no later than ten (10) Business Days after the Delivery Date , Lessee will provide Lessor with each of the following:
 
 	(a)	an authenticated copy of the certificate of registration issued by the register of aircraft of the State of Registration evidencing the registration of the Aircraft and noting, in accordance with applicable Law and the practices of the Registry, the interests of Lessor as lessor and owner and Lessee as operator of the Aircraft;	
 
 	(b)	an authenticated copy of the certificate of airworthiness for the Aircraft issued by the Aviation Authority;	
 
 	(c)	evidence confirming that all post Delivery requirements pursuant to this Article 6.3 have been completed as stipulated in Article 13.6;	
 
 	(d)	evidence, in form and substance satisfactory to Lessor, through an original copy of the corresponding importation petition ( pedimento ) or through the corresponding approval issued by the Customs Authority of the State of Registration, that all applicable import duties, fees or other Taxes, if any, payable upon the importation and/or customs clearance of the Aircraft into the State of Registration have been paid in full or that the same has been imported by Lessee under the temporary importation regime to which it is entitled in accordance with Article 106(v)(b) of the Customs Law; and	
 
 	(e)	copies of any other Aviation Documents not previously delivered and subject to any delay in delivery thereof caused by the Aviation Authority and not resulting from any act or omission of Lessee.	
 
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7.	DISCLAIMERS	
 
7.1	As Is, Where Is	
LESSEE AGREES THAT AS BETWEEN LESSEE AND LESSOR IN ITS CAPACITY AS OWNER AND LESSOR OF THE AIRCRAFT, IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS,” WITH ALL FAULTS ACCEPTED. LESSEE UNCONDITIONALLY AND IRREVOCABLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE), AND LESSEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY CLAIM IT MAY NOW OR HEREAFTER HAVE AGAINST LESSOR AND OR ANY LESSOR’S LENDER, IN RESPECT OF OR RELATING TO (a) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
 
7.2	Waiver of Warranty of Description	
IN CONSIDERATION OF, INTER ALIA, LESSOR’S ASSIGNMENT TO LESSEE OF ANY EXISTING AND ASSIGNABLE WARRANTIES OF MANUFACTURER AND THE ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION,
 
33(137)

ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN ANY APPLICABLE LAW RELATING TO SUCH WARRANTY OF DESCRIPTION.
 
7.3	Lessee Waiver	
Lessee hereby waives as between itself and Lessor and agrees not to seek to establish or enforce any rights and remedies, express or implied (whether statutory or otherwise), against Lessor or the Aircraft relating to any of the matters mentioned in Articles 7.1 or 7.2. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Articles 2412(V) and 2421 and other applicable of the Federal Civil Code.
 
7.4	Conclusive Proof	
AS BETWEEN LESSEE AND LESSOR IN ITS CAPACITY AS OWNER AND LESSOR OF THE AIRCRAFT, DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND ENGINES AND (a) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (b) THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO LESSEE.
 
7.5	No Lessor Liability for Losses	
Lessee agrees that Lessor will not be liable to Lessee, any sublessee or any Person, whether in contract or tort and however arising, for any cost, loss or damage (consequential or otherwise) arising out of the condition of the Aircraft, during the Lease Term whether or not due in whole or in part to the negligence (but not the wilful misconduct) of Lessor.
 
7.6	No Liability to Repair or Replace	
Lessor will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use. In consideration of the foregoing and to the fullest extent applicable, Lessee hereby waives any rights in accordance with the provisions of Articles 2412(II), 2416, 2417 and 2445 and other applicable of the Federal Civil Code.
 
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7.7	No Waiver	
Nothing in this Article 7 will be deemed to be a waiver by Lessee of any rights it may have against Manufacturer, the Engine manufacturer or any other Person other than Lessor or Lessor’s Lender, if any.
 
35(137)

8.	MANUFACTURERS’ AND VENDORS’ WARRANTIES	
 
8.1	Warranties	
With effect from the Delivery Date Lessor assigns to Lessee for the duration of the Lease Term and provided no Event of Default exists at any relevant time, the benefit of all assignable warranties by Manufacturer and the Engine manufacturer in relation to the Aircraft given to Lessor pursuant to the Warranties Assignments.
 
8.2	Reassignment	
On the Termination Date, the benefit of any warranty assigned by Lessor to Lessee pursuant to Article 8.1 will be reassigned automatically to Lessor or its designee (such reassignment shall be without prejudice to Lessee’s rights in respect of any claims made by Lessee during the Lease Term and which are pending on the Termination Date). Lessee’s rights under such warranties (including Lessee’s claims and rights to payment thereunder) will revert to Lessor during any period in which an Event of Default is continuing. Similarly, any additional warranties received by Lessee from Manufacturer, Engine manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will, to the extent such warranties are assignable, be automatically assigned by Lessee to Lessor or its designee on the Termination Date (such assignment shall be without prejudice to Lessee’s rights in respect of any claims made by Lessee during the Lease Term and which are pending on the Termination Date). Lessee at its own cost and expense will do all such things and execute such documents as may be reasonably required for these purposes.
 
8.3	Warranty Claims	
Lessee will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft and at Lessor’s request from time to time keep Lessor informed of any such actions. Lessee shall at all times inform Lessor of any such actions without requiring prior request from Lessor when any such claims are for amounts exceeding *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
36(137)

9.	OPERATION OF AIRCRAFT	
 
9.1	Costs of Operation	
Lessee will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of this Lease or expiration of the Lease Term.
 
9.2	Compliance with Laws and Insurance	
Lessee agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft, subject to any approved sublease, and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which Lessee may operate. Lessee will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. Lessee will not permit the Aircraft to fly to any airport or country which is located in or is a Prohibited Country or which would cause Lessee, Lessor or Lessor’s Lender to be in violation of any Law applicable to either of them or the Aircraft. Further, Lessee will not permit the Aircraft to fly in or to any area of the world excluded from insurance coverage, other than as a result of any mechanical, climatic or other events beyond Lessee’s control and as a result of which renders the same necessary in order to preserve and protect the Aircraft, passengers or crew members, provided that Lessee removes the Aircraft from such jurisdiction immediately after such circumstances shall have ceased to exist.
 
9.3	Training	
Lessee will not use the Aircraft for testing or for training of flight crew members other than crew members of Lessee and will not use the Aircraft for training any more than it utilizes for training the other aircraft in its fleet.
 
9.4	No Violation of Insurance Policies	
Lessee will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description, the carriage of which is prohibited by or would invalidate or
 
37(137)

otherwise limit coverage by such policies or do any other act or permit to be done anything which could be reasonably expected to invalidate or limit any such insurance which Lessee is required to carry and maintain as set forth in this Lease.
 
9.5	Flight and Airport Charges	
 
9.5.1	Lessee will pay promptly when due all Airport Charges and Air Navigation Charges and any and all charges payable by Lessee for the use of or for services provided at any airport, in respect of the Aircraft or to the extent any failure to pay the same in respect of any other aircraft operated by Lessee would reasonably be expected to give rise to a result in a Security Interest over the Aircraft, in respect of any other aircraft of Lessee, and will indemnify and hold Lessor and other Indemnitees harmless in respect of the same. This indemnity will continue in full force and effect notwithstanding the termination or expiration of the Lease Term for any reason or the return of the Aircraft.	
 
9.5.2	If requested by Lessor, Lessee will promptly provide Lessor with a list of the airports to which Lessee regularly operates the Aircraft or its other aircraft, and evidence, in form and substance reasonably satisfactory to Lessor, to confirm the status of Lessee’s payments to any airport, other aviation authority or airport or creditor claiming rights on the Aircraft for the Aircraft and its other aircraft.	
 
38(137)

10.	SUBLEASES	
 
10.1	No Sublease without Lessor Consent	
LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE 10 OR FOR MAINTENANCE, MODIFICATION, TESTING AND REPAIR IN ACCORDANCE WITH APPLICABLE PROVISIONS HEREOF) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED).
 
10.2	Lessor Costs	
Lessee will indemnify Lessor on demand for all reasonable costs and expenses (including reasonable legal fees) incurred in connection with Lessor’s assessment of any subleasing proposal (whether or not Lessor’s consent to such sublease is ultimately given provided that such consent is not unreasonably withheld) and implementation of the sublease.
 
10.3	Prohibited Countries	
No sublease will be permitted to any sublessee headquartered in, or having a principal place of operations in a Prohibited Country.
 
10.4	Approved Subleases	
Notwithstanding anything herein to the contrary, and subject to receipt by Lessor of prior written notice from Lessee, Lessee may sublease the Aircraft to TACA International Airlines, S.A. (“ TACA ”) under a sublease agreement, provided that such agreement meets the requirement of this Article 10 and provided further that no less than the current equity participation of TACA in Lessee subsists. Such sublease to TACA may allow TACA to sub-sublease the Aircraft to one or more of the following affiliates: TACA Costa Rica, S.A., Trans American Airlines, S.A. d.b.a. TACA Perú, Lineas Aereas Costarricenses, S.A. and/or AVIATECA, S.A. (each a “ Multiparty Sublessee ”) under a sublease or multiparty sublease agreement (“ Multiparty Sublease ”), provided that such agreement meets the requirements of this Article 10, and provided further that at all times during the term of such agreement, each of the relevant Multiparty Sublessees shall be affiliated with and remain under the operational control of TACA.
No sublease (including any sublease to TACA and any Multiparty Sublease) may allow for the pre-payment of rent payable under any sublease or Multiparty Sublease to Lessee as sublessor thereunder, unless such rent has been assigned to Lessor or Lessor’s Lender as security in conformity of Article 10.5.
 
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Any sublease approved by Lessor (including any sublease to TACA and any Multiparty Sublease) will be for a term no greater than the remaining Lease Term. The applicable sublease agreement (including any sublease to TACA and any Multiparty Sublease) will be consistent with this Lease and shall contain provisions consistent with this Lease protecting Lessor’s title to the Aircraft, the Security Interest of any Lessor’s Lender and Lessor’s interest in this Lease, providing appropriate Lessor and Lessor’s Lender disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by or for the benefit of the sublessee or Multiparty Sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease or Multiparty Sublease will be subject and subordinate to this Lease and to its effectiveness and should be terminated upon termination of this Lease for any reason whatsoever. For the avoidance of doubt, the parties agree that the subrogation described in Article 2482 of the Federal Civil Code shall not be applicable.
Lessor will have an opportunity to review any proposed sublease agreement (including any Multiparty Sublease) reasonably in advance in order to determine that it meets the requirements of this Article 10 and this Lease. Lessor shall be entitled to receive a copy thereof and to receive evidence of filing of the same at the Aviation Authority and at any other aviation authority or other authority or registry as required under applicable Law. Lessor may require an opinion of counsel in connection with any sublease or Multiparty Sublease, including an opinion concerning Lessor’s right to repossess the Aircraft and enforce any judgment obtained against any sublessee or any Multiparty Sublessee in the event of an Event of Default hereunder or under the sublease or Multiparty Sublease and to be subrogated to the rights of Lessee acting as sublessor thereunder if an Event of Default by Lessee shall occur and be continuing. Lessee will not amend the terms of any approved sublease agreement or Multiparty Sublease without the prior written consent of Lessor, such consent not to be unreasonably withheld.
 
10.5	Assignment of Sublease	
Any approved sublease or Multiparty Sublease and any advanced payments received thereunder, will be assigned to Lessor or Lessor’s Lender (as directed by Lessor) as security. Lessee will deliver a copy of the sublease or Multiparty Sublease to Lessor and make any filings necessary to protect Lessor’s or Lessor’s Lender’s Security Interest and provide evidence of such filings to Lessor.
 
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10.6	Wet Leases	
The wet leasing or charter of the Aircraft during the Lease Term (in which Lessee and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without Lessor’s consent, provided that (a) the Aircraft remains registered in the State of Registration, (b) the Aircraft will neither be based in nor operated in or to a Prohibited Country, and (c) Lessee complies with Articles 9.2 and 16.9 hereunder.
 
10.7	Continued Responsibility of Lessee	
Lessee will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.
 
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11.	MAINTENANCE OF AIRCRAFT	
 
11.1	General Obligation	
During the Lease Term and until the Termination Date, Lessee alone has the obligation, at its expense, to maintain and repair the Aircraft, Engines, APU and all of the Parts (a) in accordance with the Maintenance Program, (b) in accordance with FAA FAR Part 129 (c) in accordance with the rules and regulations of the Aviation Authority, (d) in accordance with Manufacturer’s manuals, (e) in accordance with any other regulations or requirements necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft at all times during the Lease Term and upon return of the Aircraft to Lessor for issuance of a Certificate of Airworthiness for transport category aircraft issued by the Aviation Authority and the FAA in accordance with FAA Part 21 (except during those periods when the Aircraft is undergoing maintenance, modification or repairs as required or permitted by this Lease and to the extent in conflict with the requirements of the Aviation Authority when the requirements of the Aviation Authority shall prevail solely when such shall be more strict or shall require the compliance of any requirements that shall not be already required by the FAA in accordance with FAR Part 129 and (f) in the same manner and with the same care as used by Lessee with respect to similar aircraft and engines operated by Lessee.
 
11.2	Specific Engine Requirements	
 
11.2.1	No Engine will remain in an unserviceable condition for more than ninety (90) days. Notwithstanding the foregoing, such period may be extended to one hundred eighty (180) days, provided that (i) Lessee has caused the relevant Engine to be inducted into an FAA approved maintenance repair organization in a timely manner, (ii) such delay in return to serviceability is due to factors beyond Lessee’s control, (iii) the relevant Engine is not in an unserviceable condition on the Expiration Date, and (iv) Lessee uses diligent efforts to return the Engine to a serviceable condition as soon as possible, provided that Lessee has provided evidence of (i), (ii), to the extent applicable (iii), and (iv), all to Lessor’s reasonable satisfaction.	
 
11.2.2	When replacing Parts in an Engine, Lessee will utilize only original equipment manufacturer parts (OEM parts). The foregoing will not apply to QEC and thrust reverser Parts. No FAA Designated Engineering Representative (DER) repairs will be allowed on the Engines, except with Lessor’s prior written approval, which shall not be unreasonably withheld.	
 
11.2.3	Lessee will not discriminate against the Engines with respect to Overhaul build standards and LLP replacements as compared with other engines of the same make and model of the Engines operated by Lessee.	
 
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11.2.4	With respect to any Engine shop visit of an Engine, Lessee will submit to Lessor at least thirty (30) days in advance the intended work scope of such shop visit for approval unless the shop visit is unscheduled, in which case the work scope will be submitted immediately when it becomes available to Lessee.	
 
11.2.5	Lessee will not enter into any engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine manufacturer or any other Engine maintenance facility or organization without Lessor’s prior written consent. Lessee will at its cost be responsible for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 21 even if such work is not covered by Lessee’s engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:	
 
 	(a)	Lessor will receive and retain the monthly Engine Performance Restoration Maintenance Funds paid by Lessee until an Engine Performance Restoration Shop Visit has been completed;	
 
 	(b)	Lessee will pay the Engine maintenance facility directly for any Engine Overhaul and repair costs (but not for any additional work requested by Lessor); and	
 
 	(c)	Lessee will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.	
Notwithstanding the foregoing, the parties recognize that the Engines will be subject to the fleet hour agreement between Lessee and the Engine manufacturer in effect on the Delivery Date.
 
11.3	Specific Obligations	
Without limiting Article 11.1, Lessee agrees that such maintenance and repairs will include but will not be limited to each of the following specific items:
 
 	(a)	performance in accordance with the Maintenance Program of all routine and non-routine maintenance work;	
 
 	(b)	incorporation in the Aircraft of all Airworthiness Directives, all alert service bulletins of Manufacturer, the Engine manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft. It is the intent of the parties that the Aircraft will not be discriminated from the rest of Lessee’s fleet in service bulletin compliance (including method of compliance) or other maintenance matters;	
 
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 	(c)	incorporation in the Maintenance Program for the Aircraft of a corrosion prevention and control program as recommended by Manufacturer and the correction of any discrepancies in accordance with the recommendations of Manufacturer and its structural repair manual. In addition, all inspected areas will be properly treated with corrosion inhibitor in accordance with Manufacturer’s guidelines;	
 
 	(d)	maintaining all maintenance documents, including flight logs, in English and in such a manner as required by the FAA and the Aviation Authority;	
 
 	(e)	maintaining all historical records for on-condition, condition monitored, hard time and LLPs (including FAA Form 8130-3s) in English and in such manner as required by the FAA and the Aviation Authority; and	
 
 	(f)	properly documenting in such a manner as required by the Aviation Authority all repairs, Modifications and alterations and the addition, removal or replacement of equipment, systems or components in accordance with the rules and regulations of the Aviation Authority and reflecting such items in the Aircraft Documentation and current status listings, also to include updating Manufacturer’s manuals. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s structural repair manual (or FAA approved data supported by an Airbus Repair Approval Sheet (RAS) or equivalent). All Modifications and alterations will also be accomplished in accordance with FAA approved data supported by a Design Organisation Approval or equivalent.	
 
11.4	Replacement of Parts	
 
11.4.1	Lessee, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair for use for any reason. In the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part provided that Lessee replaces such Part as promptly as practicable. All replacement Parts will (a) be owned by Lessee free and clear of all Security Interests (except Permitted Liens) (or, if not owned by Lessee, Lessee guarantees to Lessor such title and clearance of all Security Interests), (b) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (c) have a current “serviceable tag” (FAA 8130-3 or equivalent) of the manufacturer or maintenance facility providing such items to Lessee, indicating that such Parts are new, serviceable or Overhauled.	
 
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11.4.2	All Parts removed from the Airframe, any Engine or the APU will remain the property of Lessor and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Airframe, such Engine or the APU) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to Lessor under the Laws of the State of Registration and the lex situs. To the extent permitted by the Laws of the State of Registration and the lex situs it is the intent of Lessor and Lessee that without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Airframe, an Engine or the APU as above provided, (a) title to the removed Part will thereupon vest in Lessee, free and clear of all rights of Lessor and Lessor’s Liens, (b) title to the replacement Part will thereupon vest in Lessor free and clear of all rights of Lessee and (c) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Airframe, such Engine or the APU.	
 
11.5	Removal of Engines	
 
11.5.1	If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations or Modifications, title to such Engine will at all times remain vested in Lessor.	
 
11.5.2	Lessee will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that Lessee complies with each of the following obligations:	
 
 	(a)	the insurance requirements set forth in Article 16 and Exhibit C are in place;	
 
 	(b)	Lessee ensures that the identification plates referred to in Article 13.7 are not removed from any Engine upon such Engine being detached from the Aircraft; and	
 
 	(c)	title to the Engine remains with Lessor free from all Security Interests (except Permitted Liens) regardless of the location of the Engine or its attachment to or detachment from the Aircraft.	
 
11.6	Installation of Engines on Other Aircraft	
Any Engine removed from the Aircraft may be installed on another aircraft in Lessee’s fleet which utilizes engines of the same type as the Engine provided that one of the situations described in this Article 11.6 exists:
 
11.6.1	Lessee or Lessor has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).	
 
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11.6.2	All of the Creditors of Lessee of such aircraft enter into an engines cooperation, recognition of rights or similar agreement with Lessor, in form and substance acceptable to Lessor, acting reasonably to recognize one another’s rights in the engines. Lessee will reimburse Lessor for its costs and expenses (including reasonable legal fees) in negotiating and finalizing any such agreement with Lessee and its Creditors.	
 
11.6.3	Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft (such agreement may be subject to reciprocal agreements by Lessor). Lessee hereby agrees that if Lessor’s title to an Engine is in fact divested under any such Creditor Agreement, such will be a Total Loss of such Engine and the provisions of Article 17.5 will apply. To the extent another Creditor Agreement contains such provisions, then Lessor hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither Lessor nor its successors or assigns nor any person lawfully claiming by or through Lessor will acquire or claim any right, title or interest in any engine in which Lessee or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any aircraft on which an Engine may be installed.	
 
11.7	Removal of APU	
 
11.7.1	If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations or Modifications, title to the APU will at all times remain vested in Lessor.	
 
11.7.2	Lessee will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that Lessee complies with each of the following obligations:	
 
 	(a)	the insurance requirements set forth in Article 16 and Exhibit C are in place;	
 
 	(b)	Lessee ensures that the identification plates referred to in Article 13.7 are not removed from the APU; and	
 
 	(c)	title to the APU remains with Lessor free from all Security Interests (except Permitted Liens) regardless of the location of the APU or its attachment to or detachment from the Aircraft.	
 
11.8	Modifications	
 
11.8.1	No modification, alteration, addition or removal to the Aircraft (“ Modification ”) expected to cost over ***** or material deviation from the Aircraft’s original type	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	design or configuration will be made without the prior written consent of Lessor, which consent shall not be unreasonably withheld. “Modifications” do not include Airworthiness Directives or Manufacturer’s service bulletins or other mandatory orders required under this Lease, for compliance of which Lessor’s consent is not required.	
 
11.8.2	Lessor may review Lessee’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by Lessor, Lessee will furnish Lessor (at Lessee’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All Modifications incorporated on the Aircraft will be properly documented in English in the Aircraft Documentation, to include being incorporated within the applicable maintenance and operations manuals, and will be approved by the FAA and the Aviation Authority on the Termination Date.	
 
11.8.3	Notwithstanding any other provision of this Lease, no Modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.	
 
11.8.4	No Modification will be made by Lessee if an Event of Default exists and is continuing hereunder.	
 
11.8.5	Unless otherwise agreed by Lessor in writing, all permanent or structural Modifications will forthwith become a part of the Aircraft and Lessee relinquishes to Lessor all rights and title thereto. However, all temporary and non-structural Modifications will remain the property of Lessee and, at Lessor’s request (or in the event that Lessee elects to keep such Modifications) will at Lessee’s cost, be removed from the Aircraft prior to return of the Aircraft, with Lessee restoring the Aircraft to the condition it was in prior to the Modification in a manner cosmetically acceptable to Lessor acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without Lessor’s permission during the continuance of an Event of Default hereunder and immediately upon the occurrence of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such Modifications will immediately vest in Lessor without prejudice or detriment of any outstanding obligations of Lessee, in the understanding that the vesting of rights, title and interest in such Modifications by Lessor shall in no form be considered to be in payment of any outstanding obligations of Lessee nor in any form construed or interpreted as a conventional penalty or as a remedy for an Event of Default of Lessee. Notwithstanding the foregoing, in absence of an Event of Default at the end of the Lease Term, title to any such temporary and non-structural Modifications will vest or, if applicable, revest in Lessee.	
 
11.8.6	Lessor will bear no liability for the cost of Modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.	
 
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11.9	Performance of Work by Third Parties	
Whenever maintenance and repair work on the Aircraft or Engines will be regularly performed by a Person other than Lessee, such Person will be an FAA authorized repair station. In addition, Lessee shall obtain Lessor’s consent to the maintenance facility that will perform “C” check maintenance on the Aircraft (such consent not to be unreasonably withheld, however, such consent is contingent upon such Person being approved by the Aviation Authority). For the purposes hereof, and provided that Aeromantenimiento S.A. shall remain an FAA or EASA certified maintenance facility, Lessor shall be deemed to have approved the performance of any maintenance, repairs, testing, inspections and modifications in relation to the Aircraft by such facility.
 
11.10	Reporting Requirements	
 
11.10.1	Commencing with a report furnished fifteen (15) days after the end of the calendar month of the Delivery Date, Lessee will furnish to Lessor a Monthly Report in English in the form attached hereto as Exhibit H . Each Monthly Report will be furnished within fifteen (15) days after the end of each calendar month during the Lease Term, except that the Monthly Report pertaining to the last month(s) (or any portion thereof) of flying will be furnished to Lessor on the Termination Date.	
 
11.10.2	Upon Lessor’s request, however not more frequently than two (2) times in any period of twelve (12) months, Lessee will provide to Lessor a Technical Evaluation Report in English for the Aircraft in the form and substance of Exhibit I , as revised.	
 
11.10.3	Lessee will provide Lessor with an electronic copy of all heavy maintenance or modification work, including all applicable approval certification, that has occurred on the Aircraft as soon as practicable after the event, but no later than three (3) months after such work has been accomplished.	
 
11.10.4	From time to time, Lessee will provide Lessor with such other technical information or documents as Lessor may reasonably request.	
 
11.11	Lessor Rights to Inspect Aircraft	
On reasonable notice, but not more frequently than once annually unless (i) a Default or an Event of Default has occurred and is continuing or Lessor is inspecting in order to verify cure or correction of any such Default or Event of Default, (ii) Lessor has reason to believe that a Default or an Event of Default may have occurred, (iii) during the last twelve (12) months of the Lease Term, Lessor is actively marketing the Aircraft for sale or reletting following the Expiration Date and has notified Lessee of the same in writing (in which case all inspections other than a follow up inspection for purposes of confirming cure of a Default with respect to such remarketing efforts shall be a Lessor’s cost notwithstanding anything to the contrary), Lessor and/or its authorized agents or representatives will have the right to inspect the Aircraft and Aircraft Documentation, which inspection shall be performed at Lessor’s cost unless a
 
48(137)

Default or Event of Default has occurred and is continuing or is discovered during such inspection, in which event Lessee shall pay or reimburse Lessor for such costs duly evidenced and supported promptly following demand. Lessor agrees that such requests will be coordinated with Lessee so as to cause as little practical disturbance to Lessee’s operation, use of the Aircraft and its personnel as practically possible having due regard to Lessor’s legitimate interest as Lessor to inspect the Aircraft. Lessee agrees to cooperate with Lessor reasonably in making the Aircraft and Aircraft Documentation available to such inspections. Lessor will have no duty to make any such inspection and will not incur any liability or obligation by reason of (and Lessee’s obligation to maintain the Aircraft at all times in the condition required by this Lease and Lessee’s indemnity obligations pursuant to Article 15 will apply notwithstanding) not making any such inspection or by reason of any reports it receives or any reviews it may make of the Aircraft records. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or if Lessor has reason to believe that a discrepancy exists in relation to Lessee’s maintenance obligations or the condition of the Aircraft required hereunder, open any other panels or exposing any bays, and, if required, to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.
 
11.12	Airworthiness Directives Cost Sharing	
Subject to the provisions of Article 12 ( mutatis mutandis ), in the event that an Airworthiness Directive is issued after the Delivery Date which Airworthiness Directive requires a modification to the Aircraft which must be performed or terminated prior to the Expiration Date or within One Hundred Eighty (180) days thereafter and the cost of which is in excess of *****, Lessor shall reimburse Lessee for the portion of such cost over ***** in accordance with the following formula:
*****    x    (C-*****)
Where
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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12.	USE OF MAINTENANCE FUNDS	
 
12.1	Airframe Structural Maintenance Fund	
 
12.1.1	Lessor will contribute the full amount of the Airframe Structural Maintenance Fund pertaining to the 6Y checks upon completion or performance of a 6Y check as described in the Maintenance Program and the rectification of any structural deficiencies resulting from such inspection. The amount to be paid by Lessor to Lessee hereunder will correspond to the full amount paid in to the Airframe Structural Maintenance Fund (6Y Check) as of the completion date of such “6Y” Check.	
 
12.1.2	Lessor will contribute the full amount of the Airframe Structural Maintenance Fund pertaining to both the “6Y” check and the “12Y” check upon completion or performance of a 12Y check, provided all such checks are completed during the same maintenance visit, as described in the Maintenance Program and the rectification of any structural deficiencies resulting from such inspection. The amount to be paid by Lessor to Lessee hereunder will correspond to the full amount paid in to the Airframe Structural Maintenance Fund (6Y Check and 12Y Check) as of the completion date of such “12Y” structural check.	
 
12.2	Engine Performance Restoration Maintenance Fund	
Lessor will contribute from the Engine Performance Restoration Maintenance Fund applicable to an Engine at the completion of the Engine Performance Restoration Shop Visit. The amount available for contribution hereunder will correspond to:
 
 	(a)	for the first Engine Performance Restoration Shop Visit for such Engine since new, ***** multiplied by the total number of Flight Hours consumed on such Engine at the time of removal, provided that such amount has been paid by Lessee to the applicable Engine Performance Restoration Maintenance Fund as of the completion date of such Engine Performance Restoration Shop Visit;	
 
 	(b)	for any subsequent Engine Performance Restoration Shop Visits for such Engine, the full amount paid in to the applicable Engine Performance Restoration Maintenance Fund as of the completion date of such Engine Performance Restoration Shop Visit less any amount contributed pursuant to sub-section (a) above.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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12.3	Engine LLP Maintenance Fund	
Lessor will contribute from the Engine LLP Maintenance Fund applicable to an Engine for the actual out-of-pocket materials cost without overhead, Lessee mark-up or profit associated with the replacement of LLPs in such Engine during completed Engine Performance Restoration Shop Visits reduced by the amount of any Waste Expense, with work performed for all other causes excluded. “ Waste Expense ” means in respect of any LLP removed and having a stub life in excess of ten percent (10%) of the full life of such LLP) the product of (a) the number of unused cycles on a life-limited Part at the time such life-limited Part is removed for replacement multiplied by (b) the quotient of (i) the cost of the new replacement life-limited Part divided by (ii) the number of cycles which constitutes the approved life of such life-limited Part. Subject to Article 12.7 and excluding exchange fees and handling, packaging and shipping charges, the amount available for contribution hereunder will be up to the amount in the Engine LLP Maintenance Fund applicable to such Engine at the time of completion of such Engine Performance Restoration Visit.
 
12.4	APU Maintenance Fund	
Lessor will contribute the full amount of the APU Maintenance Fund for a Heavy Repair of the APU. The amount to be paid by Lessor to Lessee hereunder will correspond to the amount paid in to the APU Maintenance Fund as of the date of completion of the Heavy Repair of the APU.
 
12.5	Landing Gear Maintenance Fund	
Lessor will contribute the full amount of the Landing Gear Maintenance Fund for an Overhaul of the Landing Gear. The amount to be paid by Lessor to Lessee hereunder will correspond to the amount paid in to the Landing Gear Maintenance Fund as of the date of completion of the Landing Gear Overhaul.
 
12.6	Contribution	
Subject to Article 26.4, Lessee will be entitled to claim the contribution of Lessor from the Maintenance Funds after the relevant work is completed and the Airframe, Engine, APU or Landing Gear has left the repair agency, by submitting evidence of completion of the corresponding workscope and proper documentation within ninety (90) days after completion of the work. For the Airframe, proper documentation includes without limitation a list of all routine and non-routine work cards with corresponding references to the MPD and an itemized invoice showing all labor and materials report. For both the Engines and APU, proper documentation includes without limitation a detailed description of the reason for removal, a shop teardown report, a shop findings report, a full description of the work scope, a completed LLP status listing both prior to and after the shop visit, information whether or not credits were
 
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provided due to life remaining on any removed LLPs and the amount of any such credits. For the Landing Gear, proper documentation includes without limitation evidence detailing the labor and material, total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul. Additional documentation required for the Engine, APU and Landing Gear will include all back-to-birth documentation for any LLPs changed during such Overhaul.
 
12.7	Contribution Adjustment	
Contribution from the Maintenance Funds will not be available for, items resulting from repairs for which Lessee has received proceeds of insurance or payments under any applicable warranties or required as a result of an Airworthiness Directive, manufacturer’s service bulletin, non-routine or unscheduled maintenance, faulty maintenance or installation, improper operations, misuse, neglect, accident, incident, ingestion, foreign object damage or other accidental cause (except to the extent the same results in the full restoration per the agreed criteria for reimbursement listed in each of the above-referenced items under this Article 12), external Engine Parts including quick engine change (QEC) Parts, thrust reversers or any of their associated components.
 
12.8	Costs in Excess of Maintenance Funds	
Lessee will be responsible for payment of all costs in excess of the amounts contributed hereunder. If on any occasion the balance in the Airframe Structural Maintenance Fund, Engine Performance Restoration Maintenance Fund for a particular Engine, Engine LLP Maintenance Fund for a particular Engine, APU Maintenance Fund or Landing Gear Maintenance Fund (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the APU and the Landing Gear) is insufficient to satisfy a claim for contribution in respect of the Airframe, such Engine, the APU or the Landing Gear, as applicable, the shortfall may not be carried forward or made the subject of any further claim for contribution.
 
12.9	Contribution after Termination Date and Retention of Maintenance Funds	
Lessee may not submit any request for contribution from the Maintenance Funds after the Termination Date unless prior to such date Lessee has notified Lessor in writing that such outstanding request for contribution will be submitted after the Termination Date and the anticipated amount together with supporting documentation pursuant to Article 12.6. So long as Lessee has provided such notice to Lessor, Lessee may then submit such satisfactory evidence at any time within sixty (60) days after the Termination Date, provided however that Lessee may reasonably request an extension for an additional period to be agreed between Lessor and Lessee. Subject to the foregoing, any balance remaining in the Maintenance Funds on the
 
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Termination Date will be retained by Lessor, except in case of a Total Loss of the Aircraft or the Airframe, in which case Lessor will contribute to Lessee the balance of the Maintenance Funds held by Lessor on the Termination Date upon the payment of the Agreed Value.
 
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13.	TITLE, REGISTRATION AND IDENTIFICATION PLATES	
 
13.1	Title to the Aircraft	
Title to the Aircraft will be and remain vested in Lessor. Lessor and Lessee intend this Lease to be a “true lease”. Lessee will have no right, title or interest in the Aircraft except as provided in this Lease.
 
13.2	Registration of Aircraft	
Throughout the Lease Term, Lessee shall, at its sole cost and expense (i) register and maintain the registration of the Aircraft in the name of Lessor as owner and lessor of the Aircraft under this Lease at the aviation section of the register of aircraft maintained by the Aviation Authority in the State of Registration and, when and to the extent such shall become applicable, at the International Registry under the terms provided by the Cape Town Convention; and (ii) from time to time take all other steps and file or cause to be filed with the Aviation Authority and/or any and all appropriate registries of property or security interests in property any mortgage, any assignment or other similar instruments required by Law (including the Geneva Convention and the Cape Town Convention, if applicable) or as Lessor and/or Lessor’s Lender may request to protect, preserve, maintain and perfect the rights, title and interests of Lessor and at Lessor’s cost and expense, Lessor’s Lender in and to the Aircraft, this Lease and any other document relating to the transactions contemplated herein in the State of Registration, Mexico or in any other jurisdiction in or over which the Aircraft may be operated at any time (including, but not limited to, amending this Lease and any other document relating to the transactions contemplated herein or taking such other action in connection herewith or therewith, as may be necessary and consistent with the business, commercial, economic and other agreements of the parties as expressed herein, to comply with the Cape Town Convention, if applicable). Lessee shall not take any action or omit to take any action that may invalidate any such registration or otherwise prejudice the rights, title and interests of Lessor and Lessor’s Lender in and to the Aircraft, this Lease and/or any other document relating to the transactions contemplated herein. Lessee shall provide Lessor with evidence of such registration as soon as it becomes available. Lessee shall insure that the original certificate of registration for the Aircraft is kept on the Aircraft or, where it is permitted to be removed, in safe custody or as otherwise required by applicable Law.
 
13.3	Registration of this Lease	
In accordance with the requirements of the Law from time to time, Lessee at its cost and expense, except as otherwise provided herein, will cause this Lease and any amendments, assignments, novations or agreements that are entered into by the parties in accordance with its terms to be kept, filed, recorded and
 
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refiled or rerecorded in the State of Registration and in any other jurisdiction necessary to protect Lessor’s rights and, at Lessor’s cost, Lessor’s Lender’s Security Interest hereunder. Lessor will, at Lessee’s cost, cause this Lease to be translated into Spanish for the purpose of registering this Lease with the Aviation Authority on or prior to Delivery.
 
13.4	Registration of Title	
Lessee at its sole cost and expense will cause the bill of sale evidencing Lessor’s title and ownership interest in respect to the Aircraft to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other jurisdiction where necessary to protect Lessor’s ownership rights in respect to the Aircraft.
 
13.5	Registration of Security Interest	
Lessee, at Lessor’s cost and expense, will cause any mortgage or other document creating or evidencing any Security Interest of Lessor’s Lender in respect to the Aircraft to be kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other jurisdiction necessary to protect the rights and interests of Lessor’s Lender under such Security Interest.
 
13.6	Evidence of Registration and Filings	
At Delivery, Lessee will furnish to Lessor and Lessor’s Lender an opinion of counsel substantially in the form of Exhibit K hereto and other evidence satisfactory to Lessor of the registrations and filings required to be made on or prior to Delivery. After completion of the post-Delivery requirements stipulated in Article 6.3, Lessee will furnish to Lessor any other evidence satisfactory to Lessor confirming that all such registrations and flings have been completed. Thereafter, Lessee will furnish to Lessor and Lessor’s Lender other evidence satisfactory to Lessor of the registrations and filings required hereunder as Lessor may request from time to time.
 
13.7	Identification Plates	
On the Delivery Date (or, in case of the APU, as soon as practicable thereafter), Lessee will affix, or arrange to affix, and at all times during the Lease Term maintain in a prominent position on the Airframe, each Engine and the APU fireproof metal identification plates bearing a legible inscription stating the relevant serial number and denoting the name of (i) Lessor as owner, (ii) Lessor’s Lender as mortgagee, if applicable, and (iii) Lessee as operator. Lessee will not allow the name of any other person to be placed on the Airframe, any Engine or the APU as a designation that constitutes a claim of ownership or a claim of any Security Interest, provided that nothing shall prohibit Lessee from placing its customary colors and insignia on the Airframe.
 
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14.	TAXES	
 
14.1	General Obligation of Lessee	
Except as set forth in Article 14.2, Lessee agrees to pay promptly when due, and to indemnify and hold harmless each of Lessor and Lessor’s Lender (each a “ Tax Indemnitee ” and together the “ Tax Indemnitees ”) on a full indemnity basis from, all license and registration duties and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any asset, value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax, duty or benefit ( aprovechamientos )) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon Lessee, Lessor or any other Tax Indemnitee, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority upon or with respect to, based upon or measured by any of the following (collectively “ Taxes ”):
 
 	(a)	the Aircraft, Engines, APU or any Parts;	
 
 	(b)	the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;	
 
 	(c)	this Lease, the payments due hereunder and the terms and conditions hereof; and	
 
 	(d)	the ownership, financing, delivery, import (including duties payable in connection with the importation of the Aircraft into Mexico) or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.	
 
14.2	Exceptions to Indemnity	
The indemnity provided for in Article 14.1 does not extend to any of the following Taxes (“ Excluded Taxes ”):
 
 	(a)	Taxes imposed upon a Tax Indemnitee on the net income, capital gains, profits, turnover, gross receipts or net worth of a Tax Indemnitee or franchise or similar Taxes imposed on a Tax Indemnitee;	
 
 	(b)	Taxes imposed upon a Tax Indemnitee attributable solely to facts or circumstances occurring during the period prior to Delivery or after the Termination Date and return of the Aircraft in the condition required hereunder;	
 
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 	(c)	Taxes imposed upon a Tax Indemnitee to the extent attributable solely to such Tax Indemnitee’s willful misconduct or breach of this Lease or any agreement, document or instrument entered into and/or delivered in connection herewith (unless such breach was caused by an act or omission of Lessee);	
 
 	(d)	Taxes imposed upon a Tax Indemnitee as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by a Tax Indemnitee of all or any part of its interests in the Aircraft and/or this Lease other than any such disposition arising as a result of the enforcement of any remedies by Lessor or Lessor’s Lender in connection with an Event of Default or a Total Loss;	
 
 	(e)	Taxes imposed upon a Tax Indemnitee as a result of any past, present or future activities of such Tax Indemnitee in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;	
 
 	(f)	Taxes attributable to a Lessor’s Lien or to the extent that such Taxes would not have arisen or been assessed in the absence of a Lessor’s Lien;	
 
 	(g)	Taxes which, absent any Default by Lessee, constitute penalties, fines or interest imposed on Taxes indemnified by Lessee hereunder where the imposition of such penalties, fines or interest is caused solely by reason of the failure of any Tax Indemnitee to file tax returns pursuant to the requirements in any relevant jurisdiction so long as such Tax Indemnitee is given notice about such filing requirement reasonably in advance of the applicable filing deadline and such Tax Indemnitee fails to exercise reasonable diligence and file such return;	
 
 	(h)	Taxes for which a Tax Indemnitee has received full payment under any other provision of this Lease;	
 
 	(i)	Taxes which are not yet due or are being contested in good faith by appropriate proceedings, during the pendency of such proceedings; and	
 
 	(j)	Taxes or additional or incremental Taxes to the extent the same are attributable to the failure of a Tax Indemnitee to give timely notice of a claim under this Article 14 and/or to take timely action in contesting or permitting the contest of any such Tax which may be contested by such Tax Indemnitee or, in accordance with this Article 14, Lessee if required to take such action, but only if such failure precludes or prejudices a contest of the relevant Tax(es).	
 
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14.3	After Tax Basis	
The amount which Lessee is required to pay with respect to any Taxes indemnified against under Article 14.1 is an amount sufficient to restore the affected Tax Indemnitee on an after tax basis to the same position in which such Tax Indemnitee would have been if such Taxes had not been incurred.
 
14.4	Timing of Payment	
Any amount payable to a Tax Indemnitee pursuant to this Article 14 will be paid within ten (10) Business Days after receipt of a written demand therefor from such Tax Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable, provided, however, that such amount need not be paid by Lessee prior to the earlier of (a) the date any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts which are being contested by Lessee in good faith by appropriate proceedings or by such Tax Indemnitee pursuant to Article 14.5, the date such contest is finally resolved.
 
14.5	Contests	
If a claim is made against a Tax Indemnitee for Taxes with respect to which Lessee is liable for a payment or indemnity under this Lease or for a “gross-up” pursuant to Article 4.8 of this Lease, such Tax Indemnitee will promptly give Lessee notice in writing of such claim, provided, however, that such Tax Indemnitee’s failure to give notice will not relieve Lessee of its obligations hereunder except to the extent such failure materially impairs or precludes Lessee’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay, to the extent of such penalties, interest or additions. So long as (a) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, and (b) adequate reserves have been made or set aside in accordance with Financial Information Norms or “Normas de Información Financiera” (NIF) for such Taxes or, if required, an adequate bond has been posted, then such Tax Indemnitee at Lessee’s written request will in good faith, with due diligence and at Lessee’s expense, contest (or permit Lessee to contest in the name of Lessee or such Tax Indemnitee) the validity, applicability or amount of such Taxes.
 
14.6	Refunds	
Upon receipt by Tax Indemnitee of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 4.8) which Lessee has paid, such Tax Indemnitee will pay to Lessee the net amount of such Taxes refunded.
 
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14.7	Cooperation in Filing Tax Returns	
Lessee and the Lessor will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.
 
14.8	Survival of Obligations	
The representations, warranties, indemnities and agreements of Lessee provided for in this Article 14 will survive the Termination Date.
 
14.9	Protection	
Each of the Tax Indemnitees shall be entitled to all rights of ‘Lessor’ under this Article 14, mutatis mutandis, and may enforce the provisions of such article directly against Lessee, subject to the terms hereof.
 
14.10	Mitigation	
If Lessee is required to pay, indemnify against, reimburse, deduct or withhold any Taxes under this Lease, Lessor agrees, at Lessee’s request and at Lessee’s cost and expense, to use reasonable efforts to cooperate with Lessee in order to mitigate such Taxes.
 
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15.	INDEMNITIES	
 
15.1	General Indemnity	
Except as set forth in Article 15.2, Lessee agrees to indemnify and hold harmless each of Lessor and Lessor’s Lender and their respective successors, permitted assigns, shareholders, members, beneficial interest owners, subsidiaries, affiliates, trustees, directors, officers, duly appointed agents, servants, employees and designated representatives (individually an “ Indemnitee ” and collectively “ Indemnitees ”) from any and all liabilities, obligations, losses, damages and prejudices, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “ Damages and Prejudices ”), which are imposed on, incurred by or asserted against any Indemnitee and which are in any way related to, based on or arise out of any of the following:
 
 	(a)	this Lease or the transactions contemplated hereby;	
 
 	(b)	the operation, possession, use, non-use, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by Lessee, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;	
 
 	(c)	the manufacture, design, acceptance by Lessee or any sublessee, rejection by Lessee or any sublessee, delivery to Lessee or any sublessee, return by Lessee or any sublessee, sale arising as the direct consequence of an Event of Default, import by Lessee or any sublessee, export by Lessee or any sublessee, condition, repair, Modification, servicing, enforcement of warranties whether in Lessor’s or Lessee’s name, customer, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, re-registration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;	
 
 	(d)	the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or	
 
 	(e)	without duplication of amounts recovered under Article 23 hereof, as a consequence of any Default or Event of Default by Lessee or any Sublessee.	
 
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The foregoing indemnity by Lessee is intended to include and cover any Damages and Prejudices to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Damages and Prejudices does not fall within any of the exceptions listed in Article 15.2.
 
15.2	Exceptions to General Indemnities	
The indemnity provided for in Article 15.1 will not extend to the following Damages and Prejudices of any Indemnitee:
 
 	(a)	Damages and Prejudices which result or arise from the willful misconduct or breach of any obligation, covenant, representation or warranty of such Indemnitee;	
 
 	(b)	Damages and Prejudices which result or arise from facts and circumstances which are attributable to acts or events which occur after the Termination Date and return of the Aircraft to Lessor in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of Lessee during the Lease Term;	
 
 	(c)	Damages and Prejudices which result or arise from facts or circumstances occurring prior to the Delivery Date;	
 
 	(d)	Damages and Prejudices which are representing Taxes covered by Lessee’s indemnity obligations under Article 14 hereof;	
 
 	(e)	Damages and Prejudices which are attributable to a sale, assignment, transfer or other conveyance of any right, title or interest of an Indemnitee in or to the Aircraft and/or this Lease, unless the same results from the existence of an Event of Default, Total Loss or the exercise of remedies by Lessor; or	
 
 	(f)	Damages and Prejudices which constitute normal operating or overhead expenses of Lessee.	
 
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15.3	After Tax Basis	
The amount which Lessee will be required to pay with respect to any Damages and Prejudices indemnified against under Article 15.1 will be an amount sufficient to restore the Indemnitee, on an after tax basis, to the same position such Indemnitee would have been in had such Damages and Prejudices not been incurred.
 
15.4	Timing of Payment	
It is the intent of the parties that each Indemnitee will have the right to indemnification for Damages and Prejudices hereunder as soon as a claim is made and as soon as such Damages and Prejudices are incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 15.8). Lessee will pay an Indemnitee for Damages and Prejudices pursuant to this Article 15 within five (5) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity, unless Lessee is contesting such claim in good faith by appropriate proceedings in which case payment, if due, will be made within five (5) Business Days of final determination of such contest.
 
15.5	Subrogation	
Upon the payment in full of any indemnity pursuant to this Article 15 by Lessee, Lessee will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.
 
15.6	Notice	
Each Indemnitee and Lessee will give prompt written notice one to the other of any liability of which such party has knowledge for which Lessee is, or may be, liable under Article 15.1, provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 15, except to the extent a failure by an Indemnitee to provide such notice materially impairs, precludes or prejudices Lessee’s right or ability to defend and/or contest the claim giving rise to the Indemnitee’s claim under this Article 15.
 
15.7	Refunds	
Upon receipt by an Indemnitee of a refund, insurance proceeds or other recovery of amounts which Lessee has paid pursuant to this Article 15, such Indemnitee will pay to Lessee the net amount of such amounts received.
 
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15.8	Defense of Claims	
Unless a Default or Event of Default has occurred and is continuing, Lessee and its insurers will have the right (in each such case at Lessee’s sole expense) to investigate or, provided that Lessee (or its insurers to the extent such claim is covered by insurance) have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim for which indemnification is sought pursuant to Article 15.1 and each Indemnitee will cooperate with Lessee or its insurers with respect thereto. If Lessee or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at Lessee’s expense.
 
15.9	Survival of Obligation	
Notwithstanding anything in this Lease to the contrary, the provisions of this Article 15 will survive the Termination Date and continue in full force and effect notwithstanding any breach by Lessor or Lessee of the terms of this Lease, the termination of the lease of the Aircraft to Lessee under this Lease or the repudiation by Lessor or Lessee of this Lease.
 
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16.	INSURANCE	
 
16.1	Categories of Insurance	
From the Delivery Date and throughout the Lease Term and until the Termination Date, Lessee will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through reputable aviation insurance brokers and insurers as may be reasonably acceptable to Lessor in Mexico City, London, New York or such other insurance markets as mutually agreed upon by the parties. Pursuant to Exhibit C , (i) Lessee will cause Lessor or Lessor’s Lender, as designated by Lessor, to be named as loss payee or contract party for the Agreed Value under the hull and spares insurances required to be maintained by Lessee under the Lease and (ii) Lessee will cause Lessor, Lessor’s Lender and each Indemnitee and each of their respective successors, permitted assigns, shareholders, members, beneficial interest owners, subsidiaries, affiliates, trustees, directors, officers, agents, servants, employees and representatives to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under this Lease.
 
16.2	Write Back of Any Date Recognition Exclusion	
In the event any of Lessee’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000 related problems, Lessee at its cost will obtain for the benefit of itself and Lessor the broadest write back available in the London insurance market with respect to such exclusion.
 
16.3	Third Party War Liability Insurance	
Lessee will carry third party war risk liability insurance in the amount required by Exhibit C .
 
16.4	Installation of Third Party Engine	
If Lessee installs an engine not owned by Lessor on the Aircraft, either (a) Lessee’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy Lessor or Lessor’s Lender’s, as applicable, requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the Lessee to such third party engine owner.
 
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16.5	Insurance for Indemnities	
The insurance referred to in Article 16.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 15 and Lessee will cause Lessor and Lessor’s Lender to be named as additional insureds in respect of the coverage provided by Lessee’s Third Party Legal Liability and Products Liability insurance for a period of two (2) years following the Termination Date. Such Policies shall be maintained in accordance with prudent industry practice for similarly situated air carriers.
 
16.6	Renewal	
Prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with fax confirmation from Lessee’s insurance brokers that the insurances required hereunder have been renewed or replaced in conformity with the provisions hereof effective as of such termination date and that a renewal Certificate of Insurance and Brokers’ Letter of Undertaking evidencing such renewal or replacement and complying with Exhibit C will be issued no later than on the termination date of the prior certificate and furnished to Lessor within seven (7) days after such renewal.
 
16.7	Assignment of Rights by Lessor	
If Lessor assigns, transfers or otherwise conveys all or any portion of its rights in or to the Aircraft or this Lease as permitted by and in conformity with the relevant provisions of this Lease, Lessee will, upon request, procure that such Person be added as loss payee and/or additional insured under the policies effected hereunder and enjoy the same rights and insurance enjoyed by Lessor under such policies. Lessor and the other Indemnitees will nevertheless continue to be covered by such policies for the period required hereunder.
 
16.8	Deductibles	
If there is a material adverse change in the financial condition of Lessee which Lessor reasonably believes will cause Lessee to be unable to pay the deductible upon the occurrence of a partial loss of the Aircraft or an Engine, then Lessor may upon consultation with Lessee and its insurance brokers require Lessee at Lessee’s expense to lower its deductibles on the insurance maintained hereunder to a level which is available on commercially reasonable terms in the insurance market.
 
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16.9	Insurance for Wet Lease Operations	
In the event Lessee is performing wet lease operations with the Aircraft pursuant to Article 10.6 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance must meet the requirements of Exhibit C , including the naming of the additional insureds and the inclusion of the other endorsements set forth in Exhibit C . Moreover, Lessee will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, Lessor will receive certificates of insurance from the insurance brokers for Lessee and, if applicable, the wet lessee evidencing such coverages if insurance for such wet lease operations is not covered under Lessee’s policies for which a Certificate of Insurance has already been delivered to Lessor.
 
16.10	Information	
Lessee will provide Lessor with any information reasonably requested by Lessor from time to time concerning the insurance required to be maintained hereunder with respect to the Aircraft or in connection with any claim being made thereunder.
 
16.11	Currency	
All proceeds of insurance pursuant to this Lease will be payable in Dollars except as may otherwise be required by applicable Law.
 
16.12	Grounding of Aircraft	
If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, Lessee will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again unless otherwise permitted by Lessor and by applicable Law except in respect of any insurance which ceases to be in effect in respect of all carriers and not specifically Lessee.
 
16.13	Failure to Insure	
If at any time Lessee fails to maintain insurance in compliance with this Article 16, Lessor will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):
 
 	(a)	to pay any premiums due or to effect or maintain insurance satisfactory to Lessor or otherwise remedy such failure in such manner as Lessor considers appropriate (and Lessee will upon demand reimburse Lessor in full for any amount so expended in that connection); or	
 
 	(b)	at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.	
 
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16.14	Reinsurance	
Any reinsurance will be maintained with reinsurers and brokers of international repute, commonly participating in the international aviation insurance markets and reasonably acceptable to Lessor. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to Lessor:
 
 	(a)	the same terms as the original insurance;	
 
 	(b)	a cut through and assignment clause satisfactory to Lessor; and	
 
 	(c)	(without prejudice to the relevant cut through clause) payment will be made notwithstanding (i) any bankruptcy, judicial recuperation, insolvency, liquidation or dissolution of any of the original insurers and/or (ii) that the original insurers have made no payment under the original insurance policies.	
 
16.15	Limit on Hull in favor of Lessee	
Lessee may carry hull all risks and hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to Lessor or Lessor’s Lender, as applicable) provided that such excess insurance which would be payable to Lessee in the event of a Total Loss will not prejudice the insurances required herein or the recovery by Lessor’s Lender thereunder. Lessee agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.
 
16.16	AVN 67B	
Notwithstanding the provisions of this Article 16 and Exhibits C and D hereto, for so long as it remains the general practice of air carriers to insure equipment financed or leased on the basis of the Airline Finance/Lease Endorsement AVN 67B or its equivalent, Lessee may maintain insurances in respect of the Aircraft and this Lease which incorporate the terms and conditions of AVN 67B. To the extent any provision of AVN 67B conflicts with or is otherwise inconsistent with the requirements of this Article 16 and Exhibits C and D hereto, then the provisions of such terms and conditions of AVN 67B shall be deemed to satisfy the relevant requirements of this Lease.
 
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17.	LOSS, DAMAGE AND REQUISITION	
Throughout the Lease Term and until the Termination Date, Lessee will bear all risk of loss, theft, damage and destruction to the Aircraft.
 
17.1	Definitions	
In this Article 17 and this Lease:
“ Agreed Value ” means *****. The Agreed Value will decrease by ***** per annum/during the Lease Term, commencing on the first anniversary of the Delivery Date and on each corresponding month and day of each subsequent year during the Lease Term.
“ Net Total Loss Proceeds ” means the Total Loss Proceeds actually received by Lessor’s Lender following a Total Loss, less any incurred legal and other out of pocket expenses, taxes or duties incurred by Lessor or Lessor’s Lender in connection with the collection of such proceeds.
“ Total Loss ” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “ Total Loss Date ” means the date set forth in parenthesis after each Total Loss:
 
 	(a)	destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);	
 
 	(b)	actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or thirty (30) days after the date of notice to Lessee’s brokers or insurers claiming such total loss);	
 
 	(c)	expropriation without compensation, requisition of title, confiscation, forfeiture or any compulsory sale or acquisition or other similar event (the date on which the same takes effect);	
 
 	(d)	sequestration, detention, seizure or any similar event for more than thirty (30) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
 	(e)	requisition for use for more than one hundred eighty (180) consecutive days, except requisition by a Government Entity in accordance with the provisions of Article 17.8 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(f)	temporary or cautionary securement for more than sixty (60) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);	
 
 	(g)	in the case of an Engine, the event described in Article 11.6.3 (the date on which the same takes effect).	
“ Total Loss Proceeds ” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.
 
17.2	Notice of Total Loss	
Lessee will notify Lessor in writing within one (1) Business Day after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.
 
17.3	Total Loss of Aircraft or Airframe	
If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:
 
17.3.1	After the Total Loss Date and until receipt by Lessor or Lessor’s Lender, as applicable, of the Agreed Value and receipt by Lessor of all other amounts then due from Lessee under this Lease, Lessee will continue to pay Rent and the parties will perform all of their other obligations under this Lease.	
 
17.3.2	On the date which is the earlier of the following dates:	
 
 	(a)	the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by Lessee’s insurance underwriters or brokers and	
 
 	(b)	the date which falls ninety (90) days after the Total Loss Date,	
Lessee will pay to Lessor, or as Lessor directs, to Lessor’s Lender, an amount equal to the Agreed Value and all other amounts then accrued and payable under this Lease.
 
17.3.3	Lessor will, and will procure Lessor’s Lender to, apply the Net Total Loss Proceeds and any amounts received from Lessee pursuant to Article 17.3.2 as follows:	
 
 	(a)	first, in discharge of any unpaid Rent and any other amounts due and unpaid up to the date of Lessor’s Lender receipt of the Agreed Value;	
 
 	(b)	second, in discharge of the Agreed Value; and	
 
 	(c)	third, payment of the balance, if any, to Lessee.	
 
69(137)

Upon receipt by Lessor and Lessor’s Lender of all monies payable by Lessee hereunder, Lessor will return to Lessee any amount of prepaid Rent paid by Lessee which pertains to the period, if any, after the Termination Date. Such Rent will be calculated as a daily amount and prorated on the basis of a thirty (30) day month.
 
17.3.4	Upon receipt by Lessor’s Lender and Lessor of all monies payable by Lessee hereunder, this Lease will terminate except for Lessee’s obligations under Articles 9.5, 14 and 15 which survive the Termination Date.	
A TOTAL LOSS OF THE AIRCRAFT WILL BE DEEMED TO HAVE OCCURRED WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE OR THE ENGINES.
 
17.4	Surviving Engine(s)	
If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of Lessee (subject to agreement of relevant insurers) and on receipt by Lessor and Lessor’s Lender of all monies due under Article 17.3 and payment by Lessee of all airport, navigation and other charges on the Aircraft, if any, Lessor will transfer all its right, title and interest in the surviving Engine(s) to Lessee’ or to Lessee’s insurers, as applicable, but without any responsibility, condition or warranty on the part of Lessor other than as to freedom from any Lessor’s Lien.
 
17.5	Total Loss of Engine and Not Airframe	
 
17.5.1	Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, Lessee will replace such Engine as soon as reasonably practicable by duly conveying to Lessor title to another engine from Lessee (or another Person) (a) free and clear of all Security Interests (except Permitted Liens), (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the Engine which sustained the Total Loss, considering also the age of the engine, and (c) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, Flight Hours and Cycles since new and Flight Hours and Cycles available to the next inspection, Overhaul or scheduled or anticipated removal and the thrust rating at which any modules have been operated. Such replacement engine will be an “Engine” as defined herein and the Engine which sustained such Total Loss will cease to be an “Engine.” For the avoidance of doubt, in the event that the Engine that sustained the Total Loss shall be replaced by an Engine of similar or better condition as described above, the available amounts in the Engine Performance Restoration Maintenance Fund originally for the Engine that sustained the Total Loss shall “carry over” and be applicable in accordance with the terms of this Lease for maintenance of the replacement engine as if such had been the original Engine.	
 
70(137)

17.5.2	Lessee agrees at its own expense to take such action as Lessor may request in order that any such replacement engine becomes the property of Lessor and is leased hereunder on the same terms as the destroyed Engine. Lessee’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by Lessor with respect to such destroyed Engine will, subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease, be paid to Lessee.	
 
17.6	Total Loss of APU	
 
17.6.1	Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, Lessee will replace such APU as soon as reasonably possible by duly conveying to Lessor title to another auxiliary power unit (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the APU delivered by Lessor to Lessee with the Aircraft on the Delivery Date and (d) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, Flight Hours and Cycles since new and Flight Hours and Cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined herein and the auxiliary power unit which sustained such Total Loss will cease to be the “APU.” For the avoidance of doubt, in the event that the APU that sustained the Total Loss shall be replaced by an APU of similar or better condition as described above, the available amounts in the APU Maintenance Fund originally for the APU that sustained the Total Loss shall “carry over” and be applicable in accordance with the terms of this Lease for maintenance of the replacement APU as if such had been the original APU.	
 
17.6.2	Lessee agrees at its own expense to take such action as Lessor may request in order that any such replacement APU becomes the property of Lessor and is leased hereunder on the same terms as the destroyed APU. Lessee’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by Lessor with respect to such destroyed APU will, subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease, be paid to Lessee.	
 
71(137)

17.7	Other Loss or Damage	
 
17.7.1	If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of Lessee under this Lease (including payment of Rent) will continue in full force.	
 
17.7.2	In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, Lessee will at its sole cost and expense fully repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. Lessee will notify Lessor forthwith of any loss, theft or damage to the Aircraft for which the cost of repairs is estimated to exceed *****, together with Lessee’s proposal for carrying out the repair, Lessor will so notify Lessee within two (2) Business Days after its receipt of such proposal. Lessee and Lessor will then consult with Manufacturer and Lessee and Lessor agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, Lessee will carry out the repairs in accordance with the directions of Lessor.	
 
17.7.3	To the extent that any insurance proceeds received by Lessee from its insurers do not cover the cost of repair work on the Aircraft in accordance with this Article 17.7 and Lessor or Lessor’s Lender has received additional insurance proceeds from Lessee’s insurers with respect to such repair work, Lessor will (subject to Lessor’s right to deduct therefrom any amounts then due and payable by Lessee under this Lease on account of an Event of Default and submission by Lessee of documentation in support of such excess repair costs) procure that such insurance proceeds received by Lessor or Lessor’s Lender are paid to Lessee as and when such repair work is performed on the Aircraft.	
 
17.8	Government Requisition	
If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, Lessee will promptly notify Lessor of such requisition. All of Lessee’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by Lessor or Lessee from such Government Entity will be paid over to or retained by Lessee. If a Default or Event of Default has occurred and is continuing, all payments received by Lessee or Lessor from such Government Entity may be used by Lessor to satisfy any obligations owing by Lessee.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
72(137)

17.9	Temporary or Cautionary Detention or Securement	
If the Aircraft, Airframe, any Engine or the APU or any other Part is secured by the order of any administrative, judicial or labor authority, Lessee will promptly notify Lessor of such detention or securement and all of Lessee’s obligations hereunder will continue as if such detention or securement had not occurred. Lessee shall at its sole cost and expense conduct all actions, and take all steps as may be necessary or desirable before any administrative and judicial authorities or entities including assisting Lessor as it shall be necessary in the filing and defense of a terceria or any similar or equivalent procedure or judicial incident in order to promptly remove such detention or securement and to demonstrate the ownership rights of Lessor in respect to the Aircraft, the Airframe any Engine or the APU or any other Part.
 
73(137)

18.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE	
 
18.1	Representations and Warranties	
Lessee represents and warrants that it has the free and unconditioned intention to enter into the terms of this Lease and it further represents and warrants the following to Lessor as of the date of execution of this Lease and as of the Delivery Date:
 
18.1.1	Corporate Status . Lessee is a company duly formed, validly existing and in good standing under the Laws of Mexico. It has the power and authority, corporate or otherwise, to carry on its business as presently conducted and to perform its obligations hereunder.	
 
18.1.2	Capacity of Representatives . Lessee’s representatives have been vested with the sufficient capacities to enter into this Lease and to cause Lessee to be obligated by and subject to the terms of this Lease and such capacities have as of this date not been revoked, modified or limited in any form.	
 
18.1.3	Governmental Approvals . Except for such approvals and permits that Lessee has already obtained and for such filings that Lessee has already conducted in accordance with this Lease, no other authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by Lessee of this Lease or Lessee’s obligations hereunder.	
 
18.1.4	Binding . Lessee has all necessary authority and approvals to enter into and perform its obligations under each of the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by Lessee through its duly authorized representatives and represent the valid and binding obligations of Lessee, enforceable in accordance with their terms except as enforceability may be limited by concurso mercantil , bankruptcy, judicial recuperation, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
18.1.5	No Breach . The execution and delivery of the Operative Documents, the consummation by Lessee of the transactions contemplated herein and compliance by Lessee with the terms and provisions hereof do not and will not contravene any Law applicable to Lessee, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of Lessee, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, corporate charter, bylaw or other agreement or instrument to which Lessee is a party or by which Lessee or its properties or assets may be bound or affected.	
 
74(137)

18.1.6	Filings . Except for the filings conducted by Lessee in accordance with Section 13 of this Lease, no filing or recording of any instrument or document (including the filing of any financing or similar statement or mortgage) is necessary under the Laws of the State of Registration in order to preserve, protect and perfect all of the right, title and interest of Lessor and each Lessor’s Lender in the Aircraft and this Lease and for this Lease to constitute a valid, binding and perfected lease of record relating to the Aircraft.	
 
18.1.7	Translation or Notarization . Except for the Spanish translation of the Lease and any other Operative Documents which needs to be made by a translation expert listed as such by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature and which are required to be filed in Mexico as provided in Section 13 of this Lease and which will be required for any applicable purpose conducted before any administrative or judicial authorities in Mexico, and except for the signatures of the parties that will accordingly need to be ratified by a Mercantile Broker or Notary Public, in Mexico, neither the Lease nor any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.	
 
18.1.8	Licenses . Lessee holds all licenses, certificates and permits from applicable Government Entities in Mexico for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.	
 
18.1.9	No Suits . There are no suits, arbitrations or other proceedings pending or to Lessee’s knowledge threatened before any court or administrative agency against or affecting Lessee which, if adversely determined, would have a material adverse effect on Lessee’s ability to perform its obligations hereunder.	
 
18.1.10	No Restrictions on Payments . To the extent that the payment obligations of Lessee shall be required to be complied outside of Mexico, under the Laws of Mexico, nothing prevents Lessee from making payments required by this Lease in the currency of payment required pursuant to this Lease.	
 
18.1.11	Import Duties . Lessee shall have paid prior to Delivery, all import duties, if any, and any other Taxes and costs that may be payable in connection with the importation and/or customs clearance of the Aircraft into Mexico and shall have obtained from the Customs Authority and shall maintain in force the importation petition ( pedimento ) or the corresponding authorization from the Customs Authorities required to be obtained and/or maintained in order to permit the import of the Aircraft into Mexico and to obtain the benefit of any and all exemptions from payment of or reductions in import duties with which it shall comply for the duration of this Lease in accordance with the term permitted by the corresponding exemptions or temporary importation regimes contemplated in the Customs Law of Mexico.	
 
75(137)

18.1.12	General Obligations . The obligations of Lessee under this Lease are direct, general and unconditional obligations of Lessee and rank or will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee, with the exception of such obligations as are mandatorily preferred by Law.	
 
18.1.13	No Sovereign Immunity . Lessee, under the Laws of Mexico or of any other jurisdiction affecting Lessee, is subject to private commercial law and suit. Neither Lessee nor its properties or assets is entitled to sovereign immunity under any such Laws. Lessee’s performance of its obligations hereunder constitutes commercial acts done for commercial purposes.	
 
18.1.14	Tax Returns . All returns required to be completed and delivered by Lessee have been delivered by Lessee to all relevant taxation authorities in the jurisdiction of its incorporation and any other relevant jurisdiction and Lessee has paid or caused to be paid any and all Taxes due and payable to such taxation authorities other than such Taxes as are being contested by Lessee in good faith by appropriate proceedings and in respect of which adequate reserves have been made or set aside by Lessee in accordance with the Financial Information Norms “Normas de Información Financiera” (NIF) applicable to Lessee or as required by Law and which proceedings do not involve any risk of loss, seizure, securement (cautionary, temporary or otherwise), forfeiture or confiscation of the Aircraft nor the imposition of any civil or criminal penalty on Lessor, Lessee or any Lessor’s Lender.	
 
18.1.15	No Party to Labor Proceedings . Lessee is not a party to any labor proceedings and shall immediately notify Lessor in respect to any labor related conflict existing between Lessee and its workers, with the understanding that by being the property of the Lessor, neither the Aircraft, the Airframe, any Engine, the APU nor any Part thereof can be subject of securement, trusteeship, deposit, lien, invasion, or seizure by the workers whether or not such act is the result of an order from the competent labor authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft, the Airframe, any Engine, the APU or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure.	
 
18.1.16	No Material Adverse Effect . Lessee is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on Lessee’s ability to perform its obligations hereunder.	
 
18.1.17	No Default or Event of Default under this Lease . At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to Lessor pursuant to Article 20 have been	
 
76(137)

 	prepared in accordance with Financial Information Norms “Normas de Information Financiera” (NIF), and fairly present the financial condition of Lessee with respect to the period covered thereby.	
 
18.1.18	Solvency and Licit Origin of Funds . Lessee is solvent and the monies with which it shall fulfill its payment obligations under this Lease shall be owned by the Lessee and obtained from licit sources.	
 
18.1.19	Compliance with Laws . On the date of execution of this Lease and throughout the duration of the same, Lessee shall be in compliance with (i) all obligations binding upon Lessee arising from any material agreements to which it shall be a party; and (ii) all Laws applicable to Lessee.	
 
18.1.20	Sufficiency of Information . All information and documentation provided by Lessee to Lessor under this Lease is true and correct in all respects, and such information does not fail to state any material fact which failure would render such information misleading.	
 
18.1.21	Insurance . Lessee is in compliance with any requirements under the Purchase Agreement to carry insurance in connection with Lessor’s assignment of Manufacturer’s warranties and product support to Lessee.	
 
18.2	Covenants	
Lessee covenants to Lessor that it will comply with the following obligations throughout the Lease Term:
 
18.2.1	Import Duties . Upon Lessor’s request, but not more frequently than once a year unless a Default or Event of Default has occurred and is continuing Lessee will provide documentary evidence in form and substance satisfactory to Lessor that any import duties or Taxes have been paid to, are not applicable or have been exempted by the relevant Government Entities.	
 
18.2.2	Licensing . Lessee will hold all licenses, certificates and permits from applicable Government Entities in Mexico required for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. Lessee will advise Lessor within one (1) Business Day in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.	
 
77(137)

18.2.3	Payments . If at any time any restrictions may be applicable, Lessee will obtain all certificates, licenses, permits, exemptions and other authorizations which are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated herein, and will maintain the same in full force and effect for so long as the same are required.	
 
18.2.4	Sovereign Immunity . Lessee, under the Laws of Mexico or of any other jurisdiction affecting Lessee, will continue to be subject to private commercial law and suit. Neither Lessee nor its properties or assets will be entitled to sovereign immunity under any such Laws. Lessee’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. Lessee will advise Lessor promptly of any change in the foregoing.	
 
18.2.5	Information about Suits . Lessee will promptly give to Lessor notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially and adversely affect Lessee’s ability to perform under this Lease.	
 
18.2.6	Information about Labor Proceedings . Lessee shall promptly give to Lessor notice in writing upon commencement of any labor proceedings before any board of conciliation and arbitration, local or federal which, if adversely determined, could materially affect Lessee’s financial condition and its ability to perform under this Lease or could potentially affect any of the assets leased by Lessee, including the Aircraft, the Airframe, any Engine, the APU or any Part thereof. Likewise, Lessee shall notify any such authorities, as applicable, upon commencement of any such proceedings or when otherwise requested by Lessor, that the Aircraft, the Airframe, any Engine, the APU or any Part thereof are not owned by Lessee and do not conform any part of its assets.	
 
18.2.7	Restrictions on Mergers . Except as set forth below, Lessee will not sell, convey or otherwise dispose of all or substantially all of its property and assets or merge or consolidate with or into or be acquired by any other Person without the prior written consent of Lessor, such consent not to be unreasonably withheld. In evaluating any proposed merger, consolidation, sale or other conveyance, Lessor shall not unreasonably withhold its consent provided that (i) no Default or Event of Default under the Lease or any other agreement between Lessee or the acquirer with Lessor or an affiliate of Lessor or Lessor’s Lender has occurred and is then continuing or would occur as a result of the merger, consolidation, acquisition, sale or conveyance, as applicable; (ii) the surviving entity or acquirer shall have agreed in writing, in form and substance acceptable to Lessor, to assume, be bound by and perform all obligations of “Lessee” under the Lease; and (iii) the acquirer or surviving entity shall not be domiciled or directly or indirectly owned (in whole or in part) or controlled by any individual or entity with which Lessor is prohibited from doing business under applicable Law.	
 
78(137)

No consent shall be required from Lessor for any merger, consolidation, acquisition, sale or other conveyance, if (a) Lessee shall be the surviving entity of a merger, the consolidated entity or the acquirer, as applicable and (b) the resulting entity, has, at the time of such merger consolidation, sale or conveyance and immediately after giving effect thereto, a credit standing as good as or better than that of Lessee and a net worth at least equal to that of Lessee immediately prior to such merger, consolidation, acquisition, sale or conveyance, or (c) solely among Lessee’s current stockholders.
No consent shall be required from Lessor for Lessee’s acquisition of any interest in any corporate entity provided that such acquisition does not result in a material adverse change in the financial condition of Lessee.
Nothing herein shall be deemed to prevent Lessee or any affiliate of Lessee from engaging in a bona fide public offering of its securities to the general public or a private placement of any such securities as the same may at any time or from time to time be approved by its directors or shareholders.
 
18.2.8	Restriction on Relinquishment of Possession . Lessee will not, without the prior consent of Lessor, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease.	
 
18.2.9	No Security Interests . Lessee will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein and Lessee will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time. Lessee will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to Lessor.	
 
18.2.10	Representations to Other Parties . Lessee will not represent or hold out Lessor as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.	
 
18.2.11	Corporate Purpose, Operations, Existence . Lessee shall conduct its corporate purpose in continuing and consistent form, in accordance with prudent industry practices; it shall obtain and maintain all acts including all preservation acts that are necessary in relation with the concessions, permits, licenses or approvals that it currently holds or which it may hold in the future, within the constrains and for the fulfillment of its corporate purpose.	
 
79(137)

19.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR	
 
19.1	Representations and Warranties	
Lessor represents and warrants that it has the free and unconditioned intention to enter into this Lease and it further represents and warrants the following to Lessee as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 7:
 
19.1.1	Status . Lessor is a limited liability company, duly established, validly existing and in good standing under the Laws of Mexico. It has the power and authority, corporate or otherwise, to carry on its business as presently conducted and to perform its obligations hereunder.	
 
19.1.2	Capacity of Representatives . Lessor’s representatives have been vested with the sufficient capacities to enter into agreements and to cause Lessor to be obliged and subject to the terms of this Lease and such capacities have as of this date not been revoked, modified or limited in any form.	
 
19.1.3	Governmental Approvals . Except for the approval required from the Ministry of Finance “Secretaría de Hacienda” no authorization, approval, consent, license or order of, or registration with, or the giving of notice to any Mexican Government Entity is required for the valid authorization, execution, delivery and performance by Lessor of this Lease.	
 
19.1.4	Binding . This Lease and the other Operative Documents have been duly authorized, executed and delivered by Lessor and represent the valid and binding obligations of Lessor, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.	
 
19.1.5	No Breach . The execution and delivery of the Operative Documents, the consummation by Lessor of the transactions contemplated herein and compliance by Lessor with the terms and provisions hereof do not and will not contravene any Law applicable to Lessor, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, corporate charter, bylaw or other agreement or instrument to which Lessor is a party or by which Lessor or its properties or assets may be bound or affected.	
 
80(137)

19.1.6	Title to Aircraft . On the Delivery Date Lessor will have good and valid title to the Aircraft free and clear of liens other than Lessor’s Liens.	
 
19.1.7	Net Worth . Lessor has a tangible net worth of no less than ***** on the Delivery Date.	
 
19.2	Covenant of Quiet Enjoyment	
With effect from the Delivery Date and throughout the Lease Term and provided that, at any relevant time, no Event of Default has occurred and is continuing hereunder, Lessor covenants and agrees that, neither Lessor nor any Person lawfully claiming through Lessor will interfere with Lessee’s quiet, peaceful use and possession of the Aircraft under and in accordance with the terms of the Lease. Lessor further agrees that, unless at any relevant time there shall exist an Event of Default, Lessor will procure that any Person taking title to or a Security Interest in the Aircraft granted by Lessor during the Lease Term shall provide to Lessee a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
81(137)

20.	FINANCIAL AND OTHER INFORMATION	
Lessee agrees to furnish each of the following to Lessor:
 
(a)	Quarterly Statements . As soon as practicable after the end of the first, second, and third quarterly fiscal periods in each fiscal year of Lessee, and in any event within sixty (60) days thereafter, duplicate or copies of the following statements which can be non-audited:	
 
 	(i)	a consolidated balance sheet of Lessee as at the end of such quarter,	
 
 	(ii)	consolidated statements of income and retained earnings of Lessee for such quarterly period, and	
 
 	(iii)	consolidated statements of cash flow of Lessee for the portion of the fiscal year ending with said quarter,	
all in Spanish with an English language translation promptly after the same is available.
 
(b)	Annual Statements . As soon as practicable after the end of each fiscal year, and in any event within one hundred twenty (120) days thereafter, of:	
 
 	(i)	a consolidated balance sheet of Lessee as at the end of such year, and	
 
 	(ii)	consolidated statements of income and retained earnings and of cash flow of Lessee for such year, prepared in accordance with Financial Information Norms or “Normas de Información Financiera” (NIF) (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognized standing in Mexico (which report may be adverse, qualified or disclaim an opinion),	
all in Spanish with an English language translation promptly after the same is available.
 
(c)	Public Statements . Promptly after distribution, duplicate copies, accompanied with an English translation, of all reports and financial statements, which Lessee sends or makes available to its stockholders or creditors.	
 
(d)	Other Information . From time to time, such other information, accompanied with an English translation, as Lessor or Lessor’s Lender may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of Lessee which Lessee can disclose without violating any securities or similar laws or any contractual obligation of confidentiality.	
 
(e)	Notwithstanding the foregoing, if at any time Lessee or Lessee’s Parent shall be required to file or otherwise furnish audited financial statements as required in (a) and (b) above to any Government Entity of the State of Registration or of the United States in connection with any public offering of securities and such	
 
82(137)

 	financial statements become available in compliance with applicable Law and at no charge to Lessor on the Internet, the filing or furnishing of the same by Lessee to such Government Entity shall be deemed to satisfy the requirements of Articles 20(a) and 20(b).	
 
83(137)

21.	RETURN OF AIRCRAFT	
 
21.1	Date of Return	
Lessee is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to Lessor on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 17.3. If an Event of Default occurs hereunder by Lessee failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and Lessor repossesses the Aircraft, the return requirements set forth in this Article 21 nonetheless must be met on the date the Aircraft is actually returned to Lessor or repossessed by Lessor.
 
21.2	Last Engine Shop Visits	
With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, Lessee will submit to Lessor at least thirty (30) days in advance the intended work scope of such shop visit for approval. If Lessor requests, Lessee will perform additional work at such shop visit at Lessor’s cost, provided however, that no such additional work shall require Lessee to remove any Engine from revenue service at a date earlier than the date it would have done so in the absence of such requested additional work and further provided, that such additional work and the performance thereof will not cause a delay in redelivery, a delay in the occurrence of the Termination Date or interfere with the relevant maintenance providers operations or completion of the required shop visit.
 
21.3	Technical Report	
Six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), Lessee will provide Lessor with a Technical Evaluation Report in the form and substance of Exhibit I , as revised, and, in addition upon Lessor’s request, will make copies available of:
 
 	(a)	drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return;	
 
 	(b)	an Airworthiness Directive status list;	
 
 	(c)	a service bulletin incorporation list;	
 
 	(d)	a complete component installed listing, to include rotable, on-condition, condition monitored, hard time and life limited component listings;	
 
 	(e)	a complete list of Modifications and alterations, including those initiated by Lessee;	
 
 	(f)	interior material burn certificates;	
 
 	(g)	the Maintenance Program for the Aircraft;	
 
84(137)

 	(h)	the complete work scope for the checks, inspections and other work to be performed prior to return;	
 
 	(i)	a forecast of the checks, inspections and other work to be performed within twenty-four (24) months after return of the Aircraft;	
 
 	(j)	a list of all no charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from Manufacturer or the Engine manufacturer;	
 
 	(k)	current Engine disk sheets and a description of the last shop visit for each Engine; and	
 
 	(l)	any other data which is reasonably requested by Lessor.	
 
21.4	Return Location	
Lessee at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to Lessor either at Toluca Airport, Mexico or, if the TACA-Aeroman maintenance facility performs the final redelivery-related engineering work, at El Salvador International Airport, El Salvador, or at a commercial airport in the continental U.S. mutually agreed by Lessee and Lessor, or at such other location as may be mutually agreed in writing by Lessee and Lessor. At Lessor’s request and expense and subject to flight crew availability, Lessee will ferry the Aircraft to such location in the U.S. as Lessor may designate.
 
21.5	Full Aircraft Documentation Review	
For the period commencing no later than ten (10) Business Days prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review of Lessor and/or its assigned representative(s) the Aircraft and all of the Aircraft Documentation in one central location with reasonable office space including reasonable access to telephone, photocopy, fax and Internet connections at the Aircraft return location.
 
21.6	Copy of Lessee’s Maintenance Program	
At return of the Aircraft and for use by Lessor only for the purpose of bridging the Aircraft from Lessee’s Maintenance Program to the maintenance program of the next operator, Lessee will provide Lessor with a copy of such relevant portions of the Maintenance Program as are necessary for such bridging.
 
21.7	Aircraft Inspection	
 
21.7.1	During the maintenance checks performed immediately prior to the proposed redelivery and at the actual return of the Aircraft, Lessor and/or its assigned representatives will have an opportunity to conduct a systems functional and operational inspection of the Aircraft (and other types of inspections based upon the Aircraft type, age, use and other known factors with respect to the Aircraft) and a full inspection of the Aircraft Documentation (including records	
 
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 	and manuals), all to Lessor’s satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 21 will be corrected by Lessee at its cost prior to the acceptance flight described in Article 21.7.1.	
 
21.7.2	Immediately prior to the proposed redelivery of the Aircraft, Lessee will carry out for Lessor and/or Lessor’s assigned representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by Lessor, in accordance with an airline acceptance flight procedure, either of which will be for the duration necessary to perform such check flight procedures, which is expected not to exceed two (2) hours, and with a maximum of four (4) Lessor’s assigned representatives on board. Flight costs and fuel will be furnished by and at the expense of Lessee. Any deficiencies from the Aircraft return condition requirements set forth in this Article 21 will be corrected by Lessee at its cost prior to return of the Aircraft.	
 
21.7.3	To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date other than as a result of Lessor’s or its representatives’ wilful misconduct or breach of its obligations under this Lease, the Lease Term will be deemed to have been automatically extended and the obligations of Lessee hereunder (including Article 21.14.3) will continue on a day to day basis until the Aircraft is accepted by Lessor executing the Return Acceptance Receipt in the form of Exhibit G .	
 
21.8	FAA or EASA Compliant	
 
21.8.1	No later than four (4) months prior to the scheduled induction date of the Aircraft for the last maintenance visit prior to return of the Aircraft, Lessor will notify Lessee in writing whether the Aircraft at return must be in compliance with the rules and regulations of the FAA or the EASA as set forth in this Article 21. If the cost for complying with the rules and regulations of the EASA would exceed the cost for complying with the rules and regulations of the FAA, such excess cost shall be borne by Lessor, except any cost in relation to items that Lessee would, in the absence of Lessor’s election pursuant to this Article 21.8.1, nonetheless be required to comply with pursuant to applicable rules and regulations of the EASA at its own cost under any other provision under this Lease.	
Absent of a written notice from Lessor as provided above, the Aircraft at return will be in compliance with the rules and regulations as set forth under FAA FAR Part 129.
 
21.8.2	In the event that Lessor requests Lessee to comply with the applicable rules and regulations of EASA for the return of the Aircraft to Lessor after the time period specified above, Lessee hereby agrees that it will use its commercially reasonable efforts to obtain the necessary kits and materials required for such purpose. To the extent that any such kits or materials are unavailable from the Manufacturer or the corresponding manufacturers or distributors thereof, as applicable, or in a form that shall impede the installation of such kit as required	
 
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 	by EASA rules and regulations within the specified period, both parties shall negotiate in good faith for the solution of the delay or for the deferral of the corresponding kit installation, as applicable.	
 
21.9	Certificate of Airworthiness Matters	
The Aircraft will possess a current standard Certificate of Airworthiness, issued by the Aviation Authority. In addition, even if Lessee must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 11, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a Certificate of Airworthiness for transport category aircraft issued by the Aviation Authority and either by the FAA in accordance with FAR Part 21 or by EASA Part 21, as applicable, and, in addition, to be immediately eligible to be placed on the operating certificate of an airline in accordance with Part 129 of the FARs or (EASA) JAR Ops 1 or its equivalent, as applicable.
 
21.10	General Condition of Aircraft at Return	
 
21.10.1	The Aircraft, Engines, APU and Parts will have been maintained and repaired throughout the Lease Term in accordance with this Lease, the Maintenance Program and the rules and regulations of the FAA FAR Part 129, to the extent that such compliance shall not be in conflict with the equivalent rules and regulations from the Aviation Authority.	
 
21.10.2	Aircraft Documentation (including records and manuals) will have been maintained in an up-to-date status and in the English language, in accordance with this Lease and the rules and regulations of the Aviation Authority and either the FAA or the EASA, as applicable, and in a form necessary in order to meet the requirements of Article 21.8. If Lessee subscribes to Manufacturer’s online data access services, Lessee must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD or other format acceptable to Lessor.	
 
21.10.3	The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 21, reasonable wear and tear from normal flight operations accepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis where terminating action has been approved.	
 
21.10.4	The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by Manufacturer and the Aviation Authority and either the FAA or the EASA, as applicable.	
 
21.10.5	The Aircraft interior (including cabin and windows) and exterior will be clean and cosmetically acceptable to Lessor acting reasonably with all compartments free of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operations.	
 
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21.10.6	The Aircraft will be in the same configuration as at Delivery or, if Lessor agrees, in Lessee’s then-current A319 configuration applicable to the majority of its fleet.	
 
21.10.7	No special or unique Manufacturer, Engine manufacturer, Aviation Authority, FAA or EASA inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.	
 
21.10.8	All Modifications and alterations to the Aircraft will have been accomplished in accordance with the Aviation Authority and FAA approved data.	
 
21.10.9	The Aircraft will be returned with Lessor’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent Lessee performed a Modification which cost in excess of ***** and Lessor did not approve such Modification in accordance with Article 11.8.1, Lessor may require Lessee, at Lessee’s cost, to return the Aircraft in its original condition prior to such Modification.	
 
21.10.10	All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance (either by means of repetitive inspections, modifications or terminating action) prior to return of the Aircraft to Lessor or within One Hundred Eighty (180) days after the Termination Date will have been complied with on the Aircraft on a terminating action basis at Lessee’s cost. Such Airworthiness Directives which do not have a terminating action, or where no terminating action is available, will be accomplished at the highest level of inspection or modification possible.	
 
21.10.11	The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer with such tasks being accomplished no less frequently than each “C” Check interval. Also, for the avoidance of doubt, all structural sampling inspection tasks will be complied with on a ***** compliance basis and all structural sampling tasks due within their standard respective interval as defined within the MPD will have been performed on the Aircraft by Lessee.	
 
21.10.12	If any waivers, alternate means of compliance, dispensations, extensions or carry-overs with respect to Airworthiness Directives or other operating or maintenance requirements are granted by the Aviation Authority or permitted by the Maintenance Program, Lessee at its sole cost and expense will nonetheless perform such Airworthiness Directives and other operating or maintenance requirements as if such waiver, alternate means of compliance, dispensations or extensions did not exist.	
 
21.10.13	The Aircraft will be free from any Security Interest except Lessor’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest, including without limitation any right of detention or sale in favour of the Aviation Authority or any airport authority or any third parties including as such any current or former officers, employees, workers union of Lessee.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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21.10.14	All no charge vendor and Manufacturer’s service bulletin kits received by Lessee for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no charge vendor and Manufacturer’s service bulletin kits ordered by Lessee but not yet received will, upon receipt by Lessee, be forwarded as instructed by Lessor. At Lessor’s request, Lessee will furnish free of charge to Lessor any kits purchased as part of Lessee’s implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but not yet installed on the Aircraft any lost or damaged kits shall be procured, replaced and delivered to Lessor at the cost of Lessee.	
 
21.10.15	The Aircraft will be free of any fuel, oil, hydraulic, pneumatic or system related leaks and any damage resulting therefrom. Any repairs of system related leaks or any damage resulting therefrom will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions.	
 
21.10.16	The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be fully serviced and in good working condition and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.	
 
21.11	Checks Prior to Return	
Immediately prior to return of the Aircraft to Lessor, Lessee at its expense will do each of the following:
 
21.11.1	Have performed, by an EASA or FAA, as applicable, approved repair station the next sequential zonal, systems and structural “C” check, the corresponding lower checks (“A” and “B” or equivalent) and all associated routine and non-routine check task items will be accomplished and no deferred, special inspection or carryover items will exist, all in accordance with the MPD, sufficient to clear the Aircraft for operation until the next sequential zonal, systems and structural check under the MPD (“C” or its equivalent, which in any event will not be less than twenty (20) months). Lessee will also weigh the Aircraft. Any discrepancies revealed during such inspection will be corrected in accordance with Manufacturer’s maintenance and repair manuals or EASA or FAA, as applicable, approved data.	
 
21.11.2	Perform an internal and external corrosion inspection of those tasks required in accordance with the MPD and which are required during the “C” check being performed prior to redelivery and correct any discrepancies in accordance with the recommendations of Manufacturer and its structural repair manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.	
 
21.11.3	Remove Lessee’s exterior markings, including all exterior paint, by sanding the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. Lessee will then repaint the Aircraft in the next operator’s livery as specified by Lessor. If such	
 
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 	next operator is not identified, Lessee will instead repaint the fuselage, empennage and Engine cowlings in white, with the wings and stabilizer repainted grey. Any painting will be accomplished in such a manner as to result in a cosmetically acceptable (in accordance with industry practices) and uniformly smooth and aerodynamic surface. All mandatory external placards, signs and markings will be properly attached, free from damage, clean and legible. Upon Lessor’s request, Lessee will affix at Lessor’s costs all additional placards provided by Lessor.	
 
21.11.4	Clean the exterior and interior of the Aircraft in accordance with customary industry standards.	
 
21.11.5	If reasonably required by Lessor, repaint by touch-up the interior of the Aircraft, including flight deck, and replace mandatory placards as necessary. Upon Lessor’s request, Lessee will affix at Lessor’s costs all additional placards provided by Lessor.	
 
21.11.6	All repairs to the Aircraft will have been accomplished in accordance with the Maintenance Program, Manufacturer’s structural repair manual (or EASA, French DGAC or FAA approved data supported by Airbus Repair Approval Sheet (RAS), as applicable) for the Aircraft. All external structural repairs shall be accomplished with flush type repairs to the extent such flush repairs have been approved by the Manufacturer, EASA or the FAA. Maximum effort to install flush type repairs will be accomplished, up to and including replacement of affected skin panels. All structural repairs will have been performed on a permanent basis (where permanent repairs are available) in accordance with the applicable manufacturer’s instructions. If no permanent repairs are available, the repairs will be accomplished to the highest level possible. In addition, Lessee will supply to Lessor, all in form and substance satisfactory to Lessor, (i) a repair map indicating the repairs accomplished on the Aircraft and the approved documentation used to accomplish such repairs, and (ii) a dent map, indicating all dents on the Aircraft, complete with appropriate measurements, demonstrating that each dent is within the Manufacturer’s current structural repair manual limits, with their appropriate inspection data attached.	
 
21.11.7	Following the successful completion of the demonstration flight performed by Lessee in accordance with Article 21.7.1 and with Lessor and/or its assigned representatives present, Lessee will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with the Engine manufacturer’s maintenance manual.	
 
21.11.8	If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, Lessee will correct, to Lessor’s satisfaction such conditions which are determined to be causing such accelerated rate of deterioration.	
 
21.11.9	With Lessor and/or its assigned representatives present, accomplish a maximum power assurance run on the Engines in accordance with the	
 
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 	Manufacturer’s Maintenance manual 71-00-00 Test #11, as revised, to successfully demonstrate acceptable take-off parameters. Lessee will evaluate and Lessor will review the Engine performance details and record the Engine maximum power assurance test conditions and results on the Return Acceptance Receipt.	
 
21.11.10	Lessee will provide evidence to Lessor’s satisfaction that the Engine historical and technical records, borescope inspection, take-off and cruise trend monitoring from the previous sixty (60) days operation and other checks specified in Article 21.11.9 do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Engine manufacturer’s maintenance manual. Lessee will correct any discrepancies in accordance with the guidelines set out by the Engine manufacturer which may be discovered during such inspection.	
 
21.11.11	In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 21.11.9 and 21.11.10 result in a dispute regarding the conformity of an Engine with the requirements of this Article 21, Lessee and Lessor will consult with the Engine manufacturer and follow the Engine manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check) with regard to determining if such Engine complies with the requirements of this Article 21 and the manner in which any discrepancies from the requirements of this Article 21 will be rectified.	
 
21.11.12	With Lessor and/or its assigned representatives present, Lessee will perform a full and complete hot and cold section videotape borescope on the APU in accordance with the APU manufacturer’s procedures. Lessee will provide evidence to Lessor’s satisfaction that the borescope inspection does not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. Lessee will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such inspection.	
 
21.11.13	If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, Lessee will correct, to Lessor’s satisfaction, such conditions which are determined to be causing such accelerate rate of deterioration.	
 
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21.12	Part Lives	
At return, the condition of the Aircraft will be as follows:
 
21.12.1	The Aircraft will have zero (0) hours consumed since the last zonal, systems and structural “C” check in accordance with the MPD (excluding hours consumed on the acceptance flight).	
 
21.12.2	Each Engine will meet all of the following:	
 
 	(a)	Each Engine and each module thereof will have no more than Three Thousand (3,000) Flight Hours and One Thousand Five Hundred (1,500) Cycles consumed since its last Engine Performance Restoration Shop Visit.	
 
 	(b)	Each Engine and each Part of each Engine which has a life limit will not have operated more than One Thousand Five Hundred (1,500) Cycles since its last full disk stack replacement.	
 
 	(c)	Notwithstanding sub-sections (a) and (b) above, in case of a demonstrated unscheduled Engine removal, which will restrict Lessee’s ability to comply with the provisions in such sub-sections, Lessor will consider discussing in good faith with Lessee on a case by case basis, whether it could accept each Engine (and each module thereof) having not more than Five Thousand (5,000) Flight Hours consumed since its last Engine Performance Restoration Shop Visit and each life-limited part not having operated more than Two Thousand Five Hundred (2,500) Cycles since its last full disk stack replacement.	
 
 	(d)	Engine documentation will show full traceability to birth for each listed LLP.	
 
21.12.3	The APU will be in good operating condition within maintenance manual limitations and have zero (0) hours consumed (excluding hours consumed during the acceptance flight) since the last Medium Repair or Heavy Repair in accordance with the manufacturer’s maintenance manuals (with any defects identified during such inspection corrected). APU documentation will show full traceability to birth for each listed LLP.	
 
21.12.4	The Landing Gear will have no more than Three (3) months utilization since its last Overhaul pursuant to the MPD. Landing Gear documentation will show full traceability to birth for each listed LLP.	
 
21.12.5	Each component or Part of the Airframe (except the Landing Gear) which has a hard time (hour/cycle or calendar) limit to Overhaul pursuant to the MPD will have not less than Four Thousand Seven Hundred Fifty (4,750) Flight Hours, Two Thousand Seven Hundred Fifty (2,750) Cycles or Eighteen (18) months, whichever is the most limiting factor, remaining to operate until its next scheduled Overhaul pursuant to the MPD.	
 
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21.12.6	Each LLP of the Airframe not already covered under this Article 21 will have fifty percent (50%) of the full allotment of hours and cycles of its total approved life remaining to operate pursuant to the MPD.	
 
21.12.7	Each component or Part which has a calendar limit, not already covered by this Article 21, will have remaining to operate at least (a) eighteen (18) months from the date of return of the Aircraft to Lessor or (b) one hundred percent (100%) of its total approved life, whichever is less, pursuant to the MPD.	
 
21.12.8	No Part of the Aircraft or Engine will have total hours and total cycles since new greater than one hundred twenty five percent (125%) of that of the Airframe and, with respect to all Parts as a group, the Parts will have an average total time since new no greater than that of the Airframe.	
 
21.12.9	Each Aircraft tire and each brake will be new or will have no more that 10 hours and 5 cycles and zero (0) recaps since new or Overhaul, as applicable.	
 
21.13	Export and De-registration of Aircraft	
At Lessor’s request, Lessee at its cost will (a) provide a valid Certificate of Airworthiness, a ferry flight approval and any other requirement that be applicable from the State of Registration so that the Aircraft can be exported to the country designated by Lessor other than to a Prohibited Country, (b) procure, consent in writing or assist with, as requested by Lessor, the de-registration of the Aircraft from the register of aircraft in the State of Registration and, if applicable with Lessor and Lessor’s Lender giving any required consents„ from the International Registry as provided by the Cape Town Convention, and (c) assist with arranging for prompt confirmation of such de-registration to be sent by the registry in the State of Registration to the next country of registration. If any Aircraft work which Lessee is not otherwise required to perform hereunder, including engineering, is required in order to obtain the required Certificate of Airworthiness or the Ferry Flight approval, Lessee will cause to be performed such work at Lessee’s maintenance performer’s facilities at Lessor’s cost based upon prevailing third party rates.
 
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21.14	Lessee’s Continuing Obligations	
In the event that Lessee does not return the Aircraft to Lessor on the Expiration Date and in the condition required by this Article 21 for any reason other than as a result of an act or omission of Lessor, Lessor’s Lender or the performance of additional work requested by Lessor:
 
21.14.1	The obligations of Lessee under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of Lessee’s Event of Default or any right of Lessor hereunder.	
 
21.14.2	Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to Lessor pursuant to this Lease.	
 
21.14.3	Lessee will fully indemnify Lessor on demand for all damages and prejudices including losses, liabilities, actions, proceedings, costs and expenses thereby suffered or incurred by Lessor as a result of such failure and, in addition, until such time as the Aircraft is redelivered to Lessor and put into the condition required by this Article 21, instead of paying the Rent specified in Article 4.2, Lessee, will pay (i) during the first fifteen (15) days, an amount equal to ***** of the amount of Rent specified in Article 4.2 and (ii) thereafter until the Termination Date, an amount equal to ***** of the amount of Rent specified in Article 4.2, in each case calculated daily for each day from the scheduled Expiration Date until the Termination Date and prorated on the basis of a thirty (30) day month (without prejudice to Lessor’s other rights and remedies hereunder). Payment will be made upon presentation of Lessor’s invoice.	
 
21.14.4	Lessor may elect to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 21 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to perform such correction. All actual costs and expenses incurred by Lessor for such correction will be payable by Lessee within five (5) Business Days following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth such costs and the expenses of such corrections. Lessee’s obligation to pay such amounts will survive the Termination Date.	
 
21.15	Return Acceptance Receipt	
Upon return of the Aircraft in accordance with the terms of this Lease, Lessee will prepare and execute three (3) Return Acceptance Receipts in the form and substance of Exhibit G and Lessor will countersign and return one such Return Acceptance Receipt to Lessee.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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21.16	Indemnities and Insurance	
The indemnities and insurance requirements set forth in Articles 15 and 16, respectively, will apply to Indemnitees and Lessor’s assigned representatives during return of the Aircraft, including the ground inspection and acceptance flight.
 
21.17	Storage	
At Lessor’s request, Lessee will, at Lessor’s sole cost and expense, park and store the Aircraft in accordance with Manufacturer’s recommended short term storage program at Lessee’s principal maintenance facilities and maintain insurance on the Aircraft (ground cover only) for a period not to exceed ninety (90) days after the Termination Date provided that (i) suitable facilities are available (ii) any payments required to be made in respect of such services shall be made by Lessor in a timely manner and (iii) the same would not interfere with Lessee’s maintenance services providers scheduling. Lessee will not utilize the Aircraft for any reason during this period.
 
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22.	ASSIGNMENT	
 
22.1	No Assignment by Lessee	
NO ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART, OR THIS LEASE.
 
22.2	Sale or Assignment by Lessor	
 
22.2.1	Subject to Lessee’s rights pursuant to and in conformity with the provisions of this Lease including without limitation this Article 22, Lessor may at any time and without Lessee’s consent sell, assign or transfer its rights, interest and obligations hereunder or with respect to the Aircraft to a third party (“ Lessor’s Assignee ”). For a period of two (2) years after Lessor’s sale or assignment and at Lessee’s cost, Lessee will continue to name the prior Lessor and the other Indemnitees as additional insureds under the Aviation and Airline General Third Party Liability Insurance specified in Exhibit C .	
 
22.2.2	In the event of the sale of the Aircraft and transfer of Lessor’s rights and obligations under and in conformity with the provisions of this Lease including without limitation this Article 22, Lessor’s Assignee will become “Lessor” of the Aircraft under this Lease and the transferring party (the prior “Lessor”) will be relieved of all liability to Lessee under this Lease for obligations arising on and after the date the Aircraft is sold in conformity with the provisions of this Lease. Lessee will acknowledge and accept Lessor’s Assignee as the new “Lessor” under this Lease and will look solely to Lessor’s Assignee for the performance of all Lessor obligations and covenants under this Lease arising on and after such sale date of the Aircraft, provided Lessor’s Assignee and such sale or other transfer comply with the provisions of this Article 22.	
 
22.2.3	Wherever the term “Lessor” is used in this Lease in relation to any of the provisions relating to disclaimer, title and registration, indemnity and insurance contained in Articles 7, 13, 15 and 16, respectively, or with respect to Article 18.2.10, the term “Lessor” will be deemed to include Lessor’s Assignee and Lessor’s Lender, if applicable and to the extent of their respective interest. For avoidance of doubt, in the event of Lessor’s sale or financing of the Aircraft, the disclaimer and indemnity provisions contained in Articles 7 and 15 will continue to be applicable after the sale or assignment to Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa or any successors and permitted assigns thereof, as well as being applicable to Lessor’s Assignee from and after the date when such Lessor’s Assignee shall become “Lessor” hereunder and to Lessor’s Lender for the period during which it was “Lessor’s Lender” hereunder.	
 
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22.3	Lessor’s Lender	
Subject to Lessee’s rights pursuant to this Lease, Lessor may at any time and without Lessee’s consent grant Security Interests over the Aircraft and assign by way of security Lessor’s interest in the benefit of this Lease to one or more other lenders (each such entity, the “ Lessor’s Lender ”) as security for Lessor’s obligations to Lessor’s Lender.
 
22.4	Lessee Cooperation	
On request by Lessor or Lessor’s Lender and subject to conformity with the requirements of this Article 22, Lessee will promptly execute all such documents (such as a lease assignment agreement and consent) as Lessor or Lessor’s Lender may reasonably require to acknowledge any proper transfer of Lessor’s rights, title or interest in and to the Aircraft and/or this Lease and Lessee’s obligations in connection therewith and Lessee’s acknowledgment that Lessor is not in breach of the Lease. Lessee will promptly provide all other reasonable assistance and cooperation to Lessor and Lessor’s Lender in connection with any proper sale or assignment or the perfection and maintenance of any such security interest, including making all necessary filings and registrations in the State of Registration and providing all opinions of counsel with respect to matters requested by Lessor or Lessor’s Lender.
 
22.5	Change of Governing Law	
Lessor may, upon no less than 120 days prior written notice to Lessee, request that the governing law and jurisdiction of this Lease, and any legal terms and provisions of this Lease which the parties shall agree or which would need to be adjusted in consideration of such change, be changed to the laws and courts of the State of New York in connection with the sale of Lessor’s interest in the Aircraft, provided that Lessor reimburse Lessee for its reasonable costs and expenses (including reasonable legal fees and related expenses) in connection with or arising as a result of any such change in governing law and jurisdiction.
 
22.6	Protections	
Without prejudice to Lessor’s rights under Article 23.3 following an Event of Default, Lessee’s obligations under this Article 22 are subject to the following requirements:
 
22.6.1	Lessor will obtain for the benefit of Lessee an acknowledgment from any Lessor’s Assignee or Lessor’s Lender that, so long as no Default or Event of Default has occurred and is continuing hereunder, neither such Person nor any other Person lawfully claiming by or through such Person will interfere with Lessee’s quiet, peaceful use and enjoyment of the Aircraft.	
 
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22.6.2	No sale, assignment, transfer or other disposition of any right, title or interest of Lessor, and Lessor’s Assignee or any Lessor’s Lender in or to the Aircraft and/or this Lease shall result in any additional obligations or liability (whether financial or otherwise) of Lessee nor will Lessee’s rights be reduced, restricted, limited or prejudiced as a result of any sale, assignment, transfer or other disposition of the Aircraft or this Lease. No such sale, assignment, transfer or other disposition shall give rise (or could reasonably foreseeably give rise) to any Mexican withholding or other taxes on rentals whatsoever at the time of transfer, unless Lessor’s Assignee is willing to accept rentals net of all such taxes and so confirms to Lessee in writing.	
 
22.6.3	Any Lessor’s Assignee shall:	
 
 	(a)	satisfy the requirements to maintain the registration of the Aircraft in the State of Registration;	
 
 	(b)	have (or have its obligations guaranteed, pursuant to a guaranty agreement reasonably satisfactory to Lessee, by a guarantor that has) a tangible net worth of at least *****;	
 
 	(c)	assume all obligations of Lessor under this Lease; and	
 
 	(d)	not be an airline, other commercial aircraft operator or freight forwarder or any affiliate of any thereof.	
Any transfer to a Person not meeting the requirements set forth in Article 22.6.3 shall be deemed a breach by Lessor of its covenant of quiet enjoyment.
 
22.6.4	No sale, assignment, transfer or other disposition shall violate any applicable aw (including without limitations any securities laws of Mexico, the United States or any other applicable jurisdiction).	
 
22.6.5	Notwithstanding anything to the contrary herein, Lessor shall be responsible for and pay to or as directed by Lessee, within ten (10) Business days of written demand, Lessee’s reasonable fees, costs and expenses (including, without limitation, reasonable attorney’s fees) in connection with the sale, assignment, transfer or other disposition of any or all of its or any Lessor’s Lender’s interest in, to or in respect of the Aircraft (any part thereof) or this Lease including without limitation, such fees, costs and expenses incurred in connection with Lessee’s performance of its obligations under this Article 22, any documentation, filings and registrations related to any such sale,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
98(137)

 	assignment transfer or other disposition (including, without, limitation, any reasonable fees, costs and expenses arising as a result of or in connection with any change in governing law).	
 
99(137)

23.	DEFAULT OF LESSEE	
 
23.1	Lessee Notice to Lessor	
Lessee will promptly notify Lessor if Lessee becomes aware of the occurrence of any Default or Event of Default.
 
23.2	Events of Default	
The occurrence of any of the following will constitute an Event of Default and material breach of this Lease by Lessee:
 
 	(a)	Lessee fails to take Delivery of the Aircraft when obligated to do so under the terms of this Lease;	
 
 	(b)	Lessee fails to make a Rent, Maintenance Fund or other scheduled payment due hereunder in the manner and by the date provided herein and fails to make such payment within one (1) Business Day after such payment is due or fails to make any unscheduled payment within three (3) Business Days after such payment is due;	
 
 	(c)	Lessee fails to obtain or maintain the insurance required by Article 16 (except where such insurance is unavailable for purchase by any airline and Lessee is complying with the provision of Article 16.12);	
 
 	(d)	Lessee fails to return the Aircraft to Lessor on the Expiration Date in accordance with Article 21;	
 
 	(e)	Lessee fails to observe or perform any of its other obligations hereunder and fails to cure the same within ten (10) days after written notice thereof to Lessee.	
 
 	(f)	any representation or warranty of Lessee herein proves to be untrue in any material respect and in Lessor’s reasonable opinion the ability of Lessee to comply with its obligations under the Operative Documents has been materially and adversely affected thereby;	
 
 	(g)	the registration of the Aircraft is cancelled other than as a result of an act or omission of Lessor or Lessor’s Lender;	
 
 	(h)	Lessee abandons or relinquishes control over the Aircraft or Engines;	
 
 	(i)	Lessee or an approved sublessee no longer has unencumbered control (other than Permitted Liens) or possession of the Aircraft or Engines, except as otherwise permitted by this Lease;	
 
100(137)

 	(j)	Lessee threatens or is found to be in danger to permanently (or temporarily, to the extent that Lessee’s ability to comply with its obligations under the Operative Documents may in Lessor’s reasonable opinion be materially and adversely affected thereby) discontinue business or sells or otherwise disposes of all or substantially all of its assets;	
 
 	(k)	Lessee no longer possesses any of the licenses, certificates and permits required for the conduct of its business as a certificated air carrier in Mexico or any of such become revoked or suspended, and in each case, the same would adversely affect its ability to perform its obligations under the Operative Documents, and in case of a suspension, the suspension shall be for a period of more than thirty (30) days provided that Lessee acts diligently to cure the situation immediately after such suspension shall occur;	
 
 	(l)	Lessee fails to pay when due any Airport Charges or Air Navigation Charges assessed with respect to the Aircraft or any aircraft operated by Lessee which, if unpaid, may give rise to any Security Interest in relation to the Aircraft, Engine, APU or any Part except if such amounts are being contested by Lessee in accordance with the provisions of Article 14.5 hereof;	
 
 	(m)	Lessee suspends payment on, is unable to or admits its inability to pay, its debts or other obligations (i) in general as they fall due, (ii) on any single obligation or debt for an amount equal to or in excess of ***** or (iii) in the aggregate for amounts equal to or in excess of *****;	
 
 	(n)	Lessee or a substantial part of Lessee’s property is adjudicated or voluntarily or involuntarily becomes subject of a concurso mercantil , bankruptcy, judicial recuperation, liquidation, reorganization or protection from creditors of Lessee, becomes bankrupt or insolvent in accordance with applicable Law, or Lessee proposes or enters into any composition or other arrangement for the benefit of its creditors generally; and, in the case of any involuntary concurso mercantil or bankruptcy, the same is not dismissed or stayed within sixty (60) days, from the date of filing by the applicant. If instituted by Lessee, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied or relinquished within the period referred to above;	
 
 	(o)	any order, judgment or decree is entered by any court of competent jurisdiction appointing an interventor, administrator, receiver, trustee or liquidator of Lessee or a substantial part of its property, or if a substantial part of Lessee’s property is to be sequestered or if its treasury or administration shall be intervened. If instituted by or done with the consent of Lessee, the same will be an immediate Event of Default. If instituted by another Person, the same will be an Event of Default if not dismissed, remedied or relinquished within thirty (30) days;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
101(137)

 	(p)	any indebtedness for borrowed moneys or a guarantee or similar obligation owed by Lessee with a single unpaid balance equal to or in excess of ***** or an aggregate unpaid balance equal to or in excess of ***** or the equivalent in any other currency is declared due before its stated maturity or any judgment or judgments which, in the aggregate are in an amount equal to or in excess of ***** or the equivalent in any other currency is rendered against Lessee and is not satisfied or bonded pending appeal within thirty (30) days of the date of entry thereof; or	
 
 	(q)	Lessee is in default under any other lease or other agreement between Lessee and Lessor or a Lessor affiliate relating to aircraft, engines, aircraft equipment or the extension of credit and the same is not cured within its specified cure period.	
 
23.3	Lessor’s General Rights	
Upon the occurrence of any Event of Default and for so long as the same shall remain unremedied, Lessor may either (i) terminate this Lease by delivering the corresponding notice to Lessee and without the need for judicial intervention, or (ii) demand the mandatory fulfilment of the defaulted obligations of Lessee, at its option and, as applicable in each case, take the following actions and make the following demands (in addition to such other rights and remedies which Lessor may have by statute or otherwise but subject to any requirements of applicable Law):
 
 	(a)	terminate the leasing of the Aircraft under this Lease by giving written notice to Lessee without judicial intervention;	
 
 	(b)	terminate the rights of Lessee to use or operate the Aircraft by giving written notice to Lessee;	
 
 	(c)	require that Lessee immediately cease flying the Aircraft and leave it parked in its then current location by giving written notice to Lessee;	
 
 	(d)	require that Lessee immediately move the Aircraft to an airport or other location designated by Lessor and park the Aircraft there by giving written notice to Lessee;	
 
 	(e)	take possession of the Aircraft and conduct any acts and obtain any orders that may be necessary for such purpose. Upon repossession of the Aircraft, Lessor will then be entitled to sell, lease or otherwise deal with the Aircraft as if this Lease had never been made. Lessor will be entitled to the full benefit of its bargain with Lessee and may receive and retain any rentals and profits arising from any such sale, lease or other dealing with the Aircraft;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
102(137)

 	(f)	for Lessee’s account, do anything that may be required to cure any Event of Default and recover from Lessee all damages and prejudices including all costs, legal fees and expenses incurred in doing so and Default Interest;	
 
 	(g)	proceed as appropriate to enforce performance of this Lease and to recover any damages for the breach hereof, including the amounts specified in Article 23.5;	
 
 	(h)	apply all or any portion of the Security Deposit and any other security deposits or Maintenance Funds held by Lessor pursuant to any other agreements between Lessor and Lessee to any amounts due; and/or	
 
 	(i)	apply any amounts paid or recovered in respect of Lessee’s liabilities under the Operative Documents to any of Lessee’s liabilities under the Operative Documents in such proportion, order and manner as Lessor determines in its sole discretion.	
Regardless of Lessor’s exercise of any remedy or remedies, Lessee’s obligations under this Lease will continue (including, without limitation, the obligations set forth in Articles 15 and 16) until the same have been fully discharged in accordance with the terms hereof.
When any circumstances shall occur resultant from which Lessee shall be required by Lessor to return the Aircraft, the Airframe, any Engine, the APU or any Part thereof in accordance with the terms of this Lease or upon commencement by Lessor of any suit, claim or upon commencement of any controversy, judicial or otherwise, related with the Aircraft, the rights of possession thereof or this Lease, the Lessee shall, for as long as it shall be in possession of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, be considered as a gratuitous trustee ( depositario ) of the Aircraft, the Airframe, any Engine, the APU or any Part thereof in accordance with the terms of the Second Volume, Title IV ( Libro Segundo, Título IV ), of the Commercial Code. For such purpose, Lessee hereby (i) expressly waives any right to receive any compensation for its acts as trustee in accordance with this Lease, (ii) acknowledge that it shall not be entitled to the use or disposition of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, which will be maintained at the disposal of the Lessor, (iii) acknowledges that the Lessor will be under no obligation to indemnify, reimburse, or pay the Lessee the expenses in which, if any, Lessee shall incur for the conservation and maintenance of the Aircraft, the Airframe, any Engine, the APU or any Part thereof in its capacity as trustee of the same, (iv) acknowledge that it shall have no right of detention of the Aircraft, the Airframe, any Engine, the APU or any Part thereof and (v) accepts that it shall remain in custody of the Aircraft, the Airframe, any Engine, the APU or any Part thereof, at the disposal of Lessor, until the same has been materially returned to the Lessor or all Events of Default have been cured and that, the same shall be returned to the Lessor in the location and in accordance to the instructions of Lessor as provided in this Lease.
 
103(137)

23.4	De-registration and Export of Aircraft	
If an Event of Default has occurred and is continuing, Lessor may take all steps necessary to terminate the lease, deregister the Aircraft, remove the Aircraft from the Operating Permit of Lessee and export the Aircraft from the State of Registration and Lessee shall assist Lessor herewith in all respects.
 
23.5	Lessee Liability for Damages and Prejudices	
If an Event of Default occurs, in addition to all other remedies available at Law or in equity and in addition to any other indemnities as provided in Article 15, Lessor has the right to recover from Lessee and Lessee will pay Lessor within five (5) Business Days after Lessor’s written demand, all of the following:
 
 	(a)	all amounts which are then due and unpaid hereunder and which become due prior to the earlier of Lessor’s recovery of possession of the Aircraft or Lessee making an effective tender thereof;	
 
 	(b)	subject to Lessor’s obligation under Article 23.9, in the event that Lessor shall have re-leased or sold the Aircraft, Lessor may if it shall so elect, demand that Lessee pay to Lessor any accrued but unpaid Rent up to and including the date of the commencement of the releasing or the date of sale plus the excess of:	
 
 	(i)	the aggregate unpaid Rent for the Aircraft which would have otherwise have become due hereunder over the Lease Term but for the Event of Default discounted monthly to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as at the date of the commencement of the re-leasing, over	
 
 	(ii)	in the case of re-leasing, the aggregate rental payments to become due under the re-leasing from the date of the commencement of the term of the re-leasing to the date upon which the Lease Term for the Aircraft would have expired pursuant to this Lease but for the Event of Default, discounted monthly to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as of the date of commencement of the term of the releasing, or	
 
 	(iii)	in the case of a sale, the aggregate fair market rental value of the Aircraft (as determined by a recognized independent aircraft appraiser chosen by Lessor) for a period equal to the	
 
104(137)

 	remainder of the Lease Term for the Aircraft, after discounting such fair market rental value to present value (calculated in accordance with the amount set out in Article 23.7 of this Lease) as at the date such valuation is determined by the recognized independent aircraft appraiser;	
 
 	(c)	all out-of-pocket costs in light of the circumstances incurred by Lessor in exercising its remedies hereunder, including but not limited to repossession costs, legal fees, Aircraft storage costs, Aircraft re lease or sale costs;	
 
 	(d)	any amount of additional principal, interest, fees or other sums paid or payable on account of funds borrowed in order to carry any unpaid amount;	
 
 	(e)	subject to Lessor’s obligation under Article 23.9, any loss, cost, expense or liability sustained by Lessor due to Lessee’s failure to redeliver the Aircraft in the condition required by this Lease; and	
 
 	(f)	subject to Lessor’s obligation under Article 23.9, any other loss, damage, expense, cost or liability which Lessor suffers or incurs as a result of the Event of Default and/or termination of this Lease, including an amount sufficient to fully compensate Lessor for any loss of or damage to Lessor’s residual interest in the Aircraft caused by Lessee’s default.	
 
23.6	Waiver of Default	
By written notice to Lessee, Lessor may at its election waive any Default or Event of Default and its consequences and rescind and annul any prior notice of termination of this Lease. The respective rights of the parties will then be as they would have been had no Default or Event of Default occurred and no such notice been given.
 
23.7	Present Value of Payments	
In calculating Lessor’s damages hereunder, upon an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred will be calculated on a present value basis using a discounting rate to be agreed upon between the parties at the time of calculation, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof, regardless of the condition thereof.
 
23.8	Use of Termination Date	
For avoidance of doubt, it is agreed that if this Lease terminates and the Aircraft is repossessed by Lessor due to an Event of Default, then,
 
105(137)

notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Expiration Date” will be utilized in calculating the damages to which Lessor is entitled pursuant to Article 23.5.
 
23.9	Mitigation of Damages	
Lessor agrees to act in a commercially reasonable manner to mitigate any damages it may incur as a result of the occurrence of an Event of Default.
 
106(137)

24.	NOTICES	
 
24.1	Manner of Sending Notices	
Any notice, request or information required or permissible under this Lease will be in writing in Spanish and accompanied with an English translation thereof. Notices will be delivered in person or sent by fax, letter (mailed airmail, certified and return receipt requested), or by expedited delivery with proof of reception by addressee, addressed to the parties as set forth in Article 24.2. In the case of a fax, notice will be deemed received on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent. In the case of a mailed letter, notice will be deemed received upon actual receipt in accordance with proof issued by the postal service. In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery. If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions.
 
24.2	Notice Information	
Notices will be sent:

If to Lessor:	  	Arrendadora Financiera Inbursa, S.A. de C.V.	
	  	Sociedad Financiera de Objeto Multiple, Entidad	
	  	Regulada, Grupo Financiero Inbursa	
	  	Paseo de las Palmas 736	
	  	Col. Lomas de Chapultepec	
	  	Mexico, 1000, D.F.	
	  	Mexico	
	  	Attention: Director Juridico	
	  	Fax: +52 55 52 02 52 00	
		
With a copy to:	  	Jetscape, Inc.	
	  	10 S. New River Drive East, Suite 200	
	  	Fort Lauderdale, FL 33301	
	  	United States of America	
	  	Attention: Legal Department	
	  	Fax: +1 954 763 4757	
		
If to Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edifício GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	Mexico D.F. 01012	
	  	Mexico	
	  	Attention: General Counsel	
	  	Fax: +52 55 5261 6460	
or to such other places and numbers as either party directs in writing to the other party.
 
107(137)

25.	GOVERNING LAW AND JURISDICTION	
 
25.1	Governing Law	
This Lease is governed by and shall be construed in accordance with the Federal Laws of Mexico.
 
25.2	Jurisdiction	
For everything related to the interpretation, fulfillment, and enforcement of this Lease, the parties hereto expressly and irrevocably submit to the jurisdiction of the competent courts of the Federal District of Mexico and hereby waive in express and irrevocable form their right to any other jurisdiction that to the same may correspond by virtue of their present or future domicile, of the location of their assets or in any other form.
 
25.3	Waiver of Sovereign Immunity	
Lessee irrevocably and unconditionally:
 
 	(i)	agrees that if Lessor brings legal proceedings against it or its assets in relation to this Lease no immunity from such proceedings (which will be deemed to include without limitation, suit, attachment prior to judgement, other attachment, the obtaining of judgement, execution or other enforcement) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire; and	
 
 	(iii)	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgement which may be made or given in such proceedings.	
 
25.4	Prevailing Party in Dispute	
If any legal action or other proceeding is brought in connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to recover expenses and costs including attorneys’ fees and other costs incurred in such action or proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre - and post judgment Default Interest.
 
108(137)

25.5	Waivers	
EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO IN ARTICLE 25.2, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
 
109(137)

26.	MISCELLANEOUS	
 
26.1	Expenses	
Each of Lessor and Lessee shall bear its own costs and expenses in respect of the negotiation and execution of this Lease and the other Operative Documents, including the fees and disbursements of its counsel, brokers and agents. Lessee shall bear the cost of translating this Lease into Spanish and certifying such translation by a translation expert listed as such by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature (and any related necessary documents), if required for the registration or the enforcement thereof in the State of Registration or in Mexico. Lessee shall also pay all costs, fees and expenses required to have this Lease ratified by a mercantile broker or by a notary public (and any related necessary documents) ratified, notarized and legalized as applicable for the registration or enforcement thereof in the State of Registration or in Mexico. If a party hereto (the “ Requesting Party ”) requests any approvals, consents, waivers, modifications or amendments hereto, such Requesting Party shall reimburse the other party for all out-of-pocket costs and expenses, including reasonable attorneys fees, incurred by such other party in connection with such approvals, consents, waivers, modifications or amendments. Lessee shall bear all costs, including attorneys fees and expenses, whether or not trial be brought and both at trial and on appeal or amparo , incurred by Lessor and/or any Lessor’s Lender in properly enforcing any obligation of Lessee hereunder and Lessee shall indemnify and hold Lessor and any Lessor’s Lender harmless from any such cost and expense and any loss or damage incurred in connection with such proper enforcement.
 
26.2	Power of Attorney	
Lessee agrees to provide an irrevocable power of attorney for deregistration, removal of the Aircraft from Lessee’s Operating Certificate and export of the Aircraft, the Airframe, any Engines and any Part thereof and for collection of insurance proceeds in substantially the same form as Exhibit F hereto for the purpose of enforcing Lessor’s rights in respect of this Lease, including without limitation, the return, repossession, de-registration and exportation of the Aircraft. Lessee will take all steps required under the Laws of the State of Registration to provide such power of attorney to Lessor and Lessor’s Lender and to any individuals to whom such shall indicate with capacity of substitution and delegation in compliance with the requirements of Law for it to be valid and fully enforceable by Lessor. Lessor hereby agrees that in the event that it shall act pursuant to the foregoing powers of attorney in absence of the existence of an Event of Default it shall be liable to Lessee for the damages and prejudices that may result from such acts.
 
110(137)

26.3	Lessor Performance for Lessee	
The exercise by Lessor of its remedy of performing a Lessee obligation hereunder is not a waiver of and will not relieve Lessee from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.
 
26.4	Lessor’s Payment Obligations	
Any obligation of Lessor under this Lease to pay or release any amount to Lessee is conditioned upon (a) all amounts then due and payable by Lessee to Lessor under this Lease having been paid in full and (b) no Default or Event of Default having occurred and continuing hereunder at the time such payment or release of payment is payable to Lessee provided however, that upon cure of any such Default or Event of Default, whether by or on behalf of Lessee directly or by application of amounts so withheld, Lessor shall forthwith pay to Lessee the amount so withheld less the amount applied in full or partial cure of any such Default or Event of Default.
 
26.5	Materiality	
For the purpose of this Lease and the other Operative Documents, the terms “material” or “materially” shall whenever such terms shall be applicable, except in reference to actual items of equipment or repair or where the context otherwise indicates or requires, be understood to be in reference to the substantial part or to the majority proportion of the concept or event that it intends to qualify.
 
26.6	Usury Laws	
The parties intend to contract in strict compliance with any applicable usury Laws. Notwithstanding anything to the contrary in the Operative Documents, Lessee will not be obligated to pay Default Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by Lessor in connection with the Operative Documents. During any period of time in which the then applicable highest lawful rate is lower than the Default Interest rate, Default Interest will accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate is greater than the Default Interest rate, then Lessee will pay Default Interest at the highest lawful rate until the Default Interest which is paid by Lessee equals the amount of interest that would have been payable in accordance with the interest rate set forth in Article 4.6.
 
111(137)

26.7	Delegation by Lessor	
Lessor may delegate to any Person(s) all or any of the rights, powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and conditions as Lessor thinks fit provided, however, no such delegation shall be deemed in any manner to relieve Lessor of any of its obligations hereunder in respect of all of which Lessor shall remain liable to the same extent as if no such delegation hade been made and further provided that no such delegation shall result in any cost, expense, liability or obligation in excess of or in addition to these for which Lessee would otherwise have been liable in the absence of such delegation.
 
26.8	Confidentiality	
The Operative Documents and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal or financial advisors; as required in connection with any filings of this Lease in accordance with Article 13; in connection with Lessor’s potential sale of the Aircraft or assignment of this Lease, provided the potential purchasers shall have agreed to hold any such information confidential; as required for enforcement by either party of its rights and remedies with respect to this Lease or as required by applicable Law) without the prior written consent of the other party. If any disclosure will result in an Operative Document becoming publicly available, Lessee and Lessor will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of such Operative Document. Notwithstanding the foregoing, Lessor may use true copies of Lessee’s logo and pictures of the Aircraft painted in Lessee’s livery in Lessor’s marketing materials.
 
26.9	Rights of Parties	
The rights of the parties hereunder are cumulative, not exclusive, may be exercised as often as each party considers appropriate and are in addition to its rights under general Law. The rights of one party against the other party are not capable of being waived or amended except by an express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or amendment of that or any other such right. Any defective or partial exercise of any such rights will not preclude any other or further exercise of that or any other such right and no act or course of conduct or negotiation on a party’s part or on its behalf will in any way preclude such party from exercising any such right or constitute a suspension or any amendment of any such right.
 
112(137)

26.10	Further Assurances	
Lessee agrees and undertakes at its own expense from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments consistent with the business, economic, commercial and other agreements of the parties as expressed herein as may be required by Law or requested by Lessor to establish, maintain or protect the rights and remedies of Lessor or to carry out and effect the intent and purpose of this Lease and any other document relating to the transactions contemplated herein. At any time the Cape Town Convention is published in the Official Gazette and deposited at UNIDROIT to become applicable in the State of Registration and/or Mexico, Lessee shall at its own expense do and perform such other and further acts and execute and deliver any and all such other instruments as may be requested by Lessor or Lessor’s Lender and which are necessary and consistent with the business, economic, commercial and other agreements of the parties as expressed herein in order to (i) register any international interest under this Lease or any other document relating to the transactions contemplated herein to which Lessee is a party, or (ii) register any interest in the Aircraft or any part thereof permitted by the Cape Town Convention and/or the Geneva Convention, if applicable, or (iii) to protect and perfect Lessor’s and Lessor’s Lender’s interest in the Aircraft and this Lease (and any approved sublease, if applicable) in the State of Registration, Mexico or in any other jurisdictions in or over which Lessee (and any sublessee, if applicable) may operate the Aircraft, including, without limitation, amending this Lease or any other document relating to the transactions contemplated herein, or to enter into other agreements, as may be necessary.
 
26.11	Spanish Language Version Prevails	
The English version of this Lease shall be used for the continuing compliance and determination of the parties rights and obligations hereunder. The mutually agreed, executed and registered Spanish version of the Lease however will prevail for the interpretation and resolution of any dispute or controversy existing between the parties and over any translations thereof.
 
26.12	Use of Word “including”	
The term “including” is used herein without limitation.
 
26.13	Headings	
All article and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section will be interpreted as a reference to such article, paragraph or section of this Lease.
 
113(137)

26.14	Invalidity of Any Provision or Illegality	
 
26.14.1	If any of the provisions of this Lease become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.	
 
26.14.2	If a change shall have occurred after the date of this Lease in applicable Law which would make it illegal for Lessor to lease the Aircraft to Lessee or for Lessee to lease the Aircraft from Lessor and to fully perform its obligations hereunder, the parties agree to negotiate in good faith to restructure this Lease or to otherwise solve the situation (without prejudice to Lessee’s obligation to return the Aircraft to Lessor in accordance with this Lease as agreed between the parties at that time).	
 
26.15	Time Limitations	
Time is of the essence in the performance of all obligations of the parties under this Lease and, consequently, all time limitations set forth in the provisions of this Lease will be strictly observed.
 
26.16	Amendments in Writing	
The provisions of this Lease may only be amended or modified by a writing executed by Lessor and Lessee.
 
26.17	Ratified Signatures	
The parties hereunder will execute this Lease in the presence of a mercantile broker or notary public which shall ratify the signatures of the parties hereto.
 
26.18	Entire Agreement	
The Operative Documents constitute the entire agreement between the parties in relation to the leasing of the Aircraft by Lessor to Lessee and supersede all previous proposals, agreements and other written and oral communications in relation hereto. The parties acknowledge that there have been no representations, warranties, promises, guarantees or agreements, express or implied, except as set forth herein.

 
114(137)

IN WITNESS WHEREOF , Lessee and Lessor have caused this Lease to be executed by their respective officers in this city of Mexico, D.F, as of the date and year first written above.

Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa	 		 	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
					
By: 	 	/s/ Luis Roberto Frías Humphrey	 		 	By: 	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Luis Roberto Frías Humphrey	 		 	Name:	 	Alfonso Ascencio Triujeque	
Title:	 	Legal Representative	 		 	Title:	 	General Counsel	
 
115(137)

EXHIBIT A
ENGINE PERFORMANCE RESTORATION SHOP VISIT
“Engine Performance Restoration Shop Visit” means, in respect of an engine, a performance restoration shop visit of such engine with a minimum target build life of 13,000 engine flight hours at an average stage length of 2.3:1 performed in accordance with a workscope not less extensive than that set out below and conducted in accordance with the Maintenance Management Plan (“MMP”):

SECTION REF 	  	MODULE 	  	First Shop Visit 	  	Subsequent Shop Visits 	
8	  	Fan Module	  	L3	  	L3	
9	  	Low Pressure Compressor	  	L1/L2	  	L3	
10	  	Internal Gearbox/Front Bearing Compartment	  	L1/L2	  	L3	
11	  	Fan Case and Fan Frame	  	L1/L2	  	L2/L3	
12	  	High Pressure Compressor Module	  	L1/L2	  	L3	
13	  	Diffuser	  	L1/L3	  	L3	
14	  	Combustor	  	L3	  	L3	
15	  	No. 4 Bearing Compartment	  	L1/L2/L3	  	L3	
16	  	Nozzle Guide Vane Group	  	L3	  	L3	
17	  	High Pressure Turbine	  	L3	  	L3	
18	  	Low Pressure Turbine Module	  	L1/L2	  	L3	
19	  	Turbine Exhaust Case	  	L1/L2	  	L3	
20	  	External Gear Box	  	L1/L2	  	L2/L3	
22	  	Nacelle Components	  	L2	  	L3	
 
116(137)

EXHIBIT B
PROHIBITED COUNTRIES
“ Prohibited Country ” means, for the purpose of Articles 10.3 and 10.6, any of:
Afghanistan
Bosnia
Chechnya
Cuba
Iran
Iraq
North Korea
Sudan
Uganda
Zaire
and, for the purpose of this Lease (including without limitation Articles 10.3 and 10.6), any country 1) where war risk insurance cannot be obtained; 2) any country (other than Mexico) which is under any United Nations embargos, sanctions or orders; 3) any country (other than Mexico) which is the subject of U.S. embargos or sanctions, or which would compromise the ability of Lessee to maintain Mexican or U.S. registration of the Aircraft, as applicable, or place Lessee or Lessor in violation of any Mexican or U.S. laws or statutes; or 4) to and from which or within which the operation of the Aircraft could result in the imposition of any civil or criminal penalty against Lessor, Lessor’s Lender or Lessee or result in the seizure, confiscation, detention or other loss of the Aircraft.
This Exhibit may be reasonably updated by Lessor (in consultation with Lessee) during the Lease Term as global events dictate.
 
117(137)

EXHIBIT C
FORM OF CERTIFICATE OF INSURANCE
SEE FOLLOWING PAGES
 
118(137)

 

Aon Risk Services of Texas, Inc.
2711 N. Haskell Ave., Suite 800, Dallas, TX 75204
214-989-0000
CERTIFICATE OF INSURANCE AND REINSURANCE
June 22, 2007
TO ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.
SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA
THIS IS TO CERTIFY that as Insurance Brokers we have placed Insurance in the name of CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS) and/or Associated and/or Affiliated and/or Subsidiary Companies for their respective rights and interests (hereinafter called the “Insured”) with SEGUROS INBURSA. (as the “Insurers”) and that we, as Reinsurance Brokers, have placed in London and the International Insurance Markets Reinsurance in the name of the Insurers for account of the Insured, covering their operations in connection with their entire fleet of aircraft, including all new, acquired and leased aircraft from the moment they become the insurance responsibility of the Insured, whilst operating anywhere in the World, but excluding any area the subject of a United Nations sanction, against the following risks and up to the limits stated :-covering their operations in connection with their entire fleet of aircraft, including all new and acquired aircraft from the moment they become the insurance responsibility of the Ensured, whilst operating anywhere in the World, but in respect of Hull War and Allied Risks also excluding Iraq, Afghanistan, Somalia, Zaire, Angola, Algeria, Burundi, Rwanda, Liberia, Bosnia Hercegovina, Tadzhikistan - or held covered subject to prior advice - overflights covered subject to necessary permits being obtained, against the following risks and up to the limits stated :-
 
1.	HULL ALL RISKS (including Aircraft engines, spare parts and equipment including ground support equipment, aircraft spares kits and engineers tools either owned by the Insured or the property of others for which the Insured are responsible, including whilst in transit, hereinafter called “Spares”) of loss or damage whilst flying and/or on the ground, on an agreed value basis for an agreed value. This coverage provided is subject to the following deductibles :-	
In respect of A319-133 aircraft - ***** each and every loss excluding Total Loss or Constructive Total Loss or Compromised Total Loss or Arranged Total Loss.
In respect of Spares (not applicable to loss or damage caused by fire, wind, tornado, cyclone, flood or explosion or to loss or damage arising out of an accident to the carrying aircraft) - ***** each and every loss but in respect of ingestion damage to engines whilst bench testing subject to full deductible as applicable to Aircraft to which engine is destined to be fitted, but not applicable to Total Loss or Constructive Total Loss or Compromised Total Loss or Arranged Total Loss of the engine concerned.
 
2.	HULL WAR AND ALLIED RISKS (including Spares) as excluded by the War, Hijacking and other Perils Exclusion Clause (AVN.48B) other than paragraph (b) thereof on an agreed value basis, for an Agreed Value as at (1) above (and including confiscation and requisition by the State of Registration). Coverage for Spares is restricted in respect of War Risks (as defined in paragraph (a) of Section One of LSW 555D) is restricted to air and sea transits and incidental land transits in accordance with Institute War Clauses (Cargo) CL255 and Institute War Clauses (Air Cargo) CL258, as applicable. The Hull War and Allied Risks Coverage is subject to a policy aggregate limit of *****. NOTE: THIS AGGREGATE LIMIT MAY BE REDUCED OR EXHAUSTED BY VIRTUE OF CLAIMS MADE IN RESPECT OF ANY AIRCRAFT/SPARES INSURED UNDER THE POLICY.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

June 22, 2007	  	Page 1	  	Ref: VOLARIS – XA-VOG	

The coverage in respect of spares, as detailed in 1. and 2. above is for such sums as may be declared by the Insured, subject to a limit of ***** any one sending / any one occurrence.
 
3.	AIRCRAFT THIRD PARTY, PASSENGER, BAGGAGE, CARGO, MAIL and AIRLINE GENERAL THIRD PARTY AND CONTRACTUAL LEGAL LIABILITY for a Combined Single Limit (Bodily Injury/Property Damage) of at least ***** any one occurrence, each aircraft, unlimited in all, but in the annual aggregate in respect of Products Legal Liability. War and Allied Risks are also covered, in accordance with the Extended Coverage Endorsement (AVN 52E) as contained in the Policy for a Combined Single Limit of at least ***** any one occurrence, each Aircraft.	
It is further certified that Insurers have been advised of the attachment of the following Equipment , hereunder:-

Aircraft Type:	  	Airbus A319-133 with two (2) IAE International Aero AG V2527M-A5 Engines	
Registered Marks:	  	XA -VOG	
Manufacturers Serial No.:	  	3175. With respect to the Engines V12636 and V12638	
Agreed Value:	  	***** to be reduced by ***** on each anniversary of the Delivery Date.	
Effective Date:	  	See Attached Schedule of Insurers	
Policy Deductible applicable to physical damage to the Equipment :	  	as stated herein	
Appointed Broker:	  	Aon Risk Services of Texas, Inc.	
The said Equipment is the subject of the following Contract(s) :
 
 	1.	Aircraft Lease Agreement , dated as of June 18, 2007 between ARRENDADORA FINANCIERA INBURSA, S.A. de C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA, a company formed under the laws of Mexico (“Lessor”), and CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V., d/b/a VOLARIS, a sociedad anonima de capital variable organized and existing under the laws of Mexico (“Lessee”)	
Additional Insureds:
 
 	1.	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA	
 
 	2.	When notified by the Contract Party in 1, LESSOR’S LENDER (AS DEFINED IN THE LEASE)	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

June 22, 2007	  	Page 2	  	Ref: VOLARIS – XA-VOG	

Aon Risk Services of Texas, Inc.
2711 N. Haskell Ave., Suite 800, Dallas, TX 75204
214-989-0000
 
AND, in addition, in respect of Legal Liability Insurances, their respective shareholders, Affiliates, trustees, beneficiaries, members, directors, officers, employees, servants, agents, successors, assigns and contractors and in accordance therewith Insurers have agreed to the following:-
It is noted that the Contract Party(ies) has an interest in respect of the Equipment under the Contract(s) . Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of the Insurance or until the expiry or agreed termination of the Contract(s) or until the obligations under the Contract(s) are terminated by any action of the Insured or the Contract Party(ies) , whichever shall first occur, in respect of the said interest of the Contract Party(ies) and in consideration of the Additional Premium it is confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that the following provisions are specifically endorsed to the Policy:-
 
1.	Under the HULL “ALL RISKS” and HULL WAR and ALLIED RISKS Coverages	
 
1.1	In respect of any claim on Equipment that becomes payable on the basis of a Total Loss, settlement (nett of any relevant Policy deductible) shall be made to the order of the Contract Party(ies) . In respect of any other claim, settlement (nett of any relevant policy deductible) shall be made with such party(ies) as may be necessary to repair the Equipment unless otherwise agreed after consultation between the Insurers and the Insured and, where necessary under the terms of the Contract(s) , the Contract Party(ies) . Such payments shall only be made provided the same are in compliance with all applicable laws and regulations.	
 
1.2	Insurers shall be entitled to the benefit of salvage in respect of any property for which a claims settlement has been made.	
 
1.3	The Reinsurers and the Reassured hereby agree that in the event of any claim arising under the reinsurance in respect of a total loss or other claim where as provide by the Agreement such claim is to be paid to the person named as Loss Payee or Contract Party under the Original Policy, the Reinsures shall in lieu of payment to the Reassured, its successors in interest and assignee pay to the person named as Loss Payee or Contract Party or such person’s assigned under the Original Policy effected by the Assured that portion of any loss due for which the Reinsures would otherwise be liable to pay the Reassured (subject to proof of loss), it being understood and agreed that such payment by the Reinsurers shall (to the extent of such payment) fully discharge and release the Reinsures from any and all further liability in connection therewith.	
 
2.	Under the Legal Liability Insurance	
 
2.1	Subject to the provisions of this Endorsement, the Insurance shall operate in all respects as if a separate policy had been issued covering each party insured hereunder, but this provision shall not operate to include any claim howsoever arising in respect of loss or damage to the Equipment insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds shall not exceed the limits of liability stated in the Policy.	
 
2.2	The Insurance provided hereunder shall be primary and without right of contribution from any other insurance which may be available to the Contract Party(ies) .	
 
2.3	This endorsement does not provide coverage for the Contract Party(ies) with respect to claims arising out of their legal liability as manufacturer, repairer, or servicing agent of the Equipment .	

June 22, 2007	 	Page 3	 	Ref: VOLARIS – XA-VOG	

Aon Risk Services of Texas, Inc.
2711 N. Haskell Ave., Suite 800, Dallas, TX 75204
214-989-0000

3.	Under ALL Insurances	
 
3.1	The Contract Party(ies) are included as Additional Insured(s) as their respective interests may appear.	
 
3.2	The cover afforded to each Contract Party(ies) by the Policy in accordance with this Endorsement shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy PROVIDED THAT the Contract Party(ies) so protected has not caused, contributed to or knowingly condoned the said act or omission.	
 
3.3	The provisions of this Endorsement apply to the Contract Party(ies) solely in their capacity as financier/lessor in the identified Contract(s) and not in any other capacity. Knowledge that any Contract Party(ies) may have or acquire or actions that it may take or fail to take in that other capacity (pursuant to any other contract or otherwise) shall not be considered as invalidating the cover afforded by this Endorsement.	
 
3.4	The Contract Party(ies) shall have no responsibility for premium and Insurers shall waive any right of setoff or counterclaim against the Contract Party(ies) , except in respect of outstanding premium in respect of the Equipment .	
 
3.5	Upon payment of any loss or claim to or on behalf of any Contract Party(ies) , Insurers shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Contract Party(ies) indemnified hereby (but not against any Contract Party(ies) . Insurers shall not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers, such Contract Party(ies) shall do all things reasonably necessary to assist the Insurers to exercise said rights.	
 
3.6	Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to the Contract Party(ies) by the giving of not less than Thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of War and Allied Perils) notice in writing to the Appointed Broker . Notice shall be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement.	

June 22, 2007	 	Page 4	 	Ref: VOLARIS – XA-VOG	

Aon Risk Services of Texas, Inc.
2711 N. Haskell Ave., Suite 800, Dallas, TX 75204
214-989-0000
 
EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS ENDORSEMENT:-
 
1.	THE CONTRACT PARTY(IES) ARE COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.	
 
2.	THE POLICY SHALL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE CONTRACT(S) WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.	
In addition to the foregoing it is further certified that Insurers have agreed to include the following provisions:-
 
1.	Under the Hull “All Risks” and Hull “War Risks” Insurances :-	
 
1.2	To include a 50%/50% Clause (in accordance with AVS 103).	
It is our opinion, as Insurance Brokers, that the Insurances carried by the Insured, as described in this Certificate of Insurance comply with the relative parts of the Contract(s) as far as the requirements relate to the insurance as herein stated and that the Insurance and Reinsurance arrangements are effected with Insurers and Reinsurers of recognised responsibility who normally participate in airline Insurance Programmes.
It is further certified that Insurers have applied the Date Recognition Exclusion Clause - AVN 2000 and have agreed to provide limited “writeback” of coverage in respect thereof in accordance with the Date Recognition Limited Coverage Clauses AVN 2001 and AVN 2002, as applicable.
Subject to the terms, conditions, limitations, exclusions and cancellation provisions of the relative Policy Numbers (see attached Schedule of Insurers) which expire at midnight as per the attached schedule.
The coverage provided shall not contravene any applicable United Nations sanctions.

AON RISK SERVICES OF TEXAS, INC.	
	
/s/ Illegible
Authorized Representative	
SEVERAL LIABILITY NOTICE - The subscribing insurers’ obligations under policies to which they subscribe are several and not joint and are limited solely to the extent of their individual subscriptions. The subscribing insurers are not responsible for the subscription of any co-subscribing insurer who for any reason does not satisfy all or part of its obligations.

					
June 22, 2007	 	Page 5	 	Ref: VOLARIS – XA-VOG	

EXHIBIT D
FORM OF BROKERS’ LETTER OF UNDERTAKING
SEE FOLLOWING PAGES
 
119(137)

LETTER OF UNDERTAKING
June 22, 2007
TO:	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.	
    	SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO	
    	FINANCIERO INBURSA	
 
    	CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS	
Dear Sirs,
AIRCRAFT TYPE Airbus A319-133
M.S.N. 3175
Registered Marks: XA-VOG
OPERATOR: CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS)
We confirm we have placed Insurance in the name of CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V. D/B/A VOLARIS (VOLARIS) and/or Associated and/or Affiliated and/or Subsidiary Companies for their respective rights and interests (hereinafter called the “Insured”) with SEGUROS INBURSA. (as the “Insurers”) and that we, as Reinsurance Brokers, have placed in London and the International Insurance Markets Reinsurance in the name of the Insurers for account of the Insured, covering their operations in connection with their entire fleet of aircraft
Pursuant to instructions received from the Operator and in consideration of your approving ourselves as the Insurance Broker for such insurances, we undertake as follows in connection with the Operator’s Fleet Policy arrangements (under which the Aircraft identified above is insured), but only in relation to your interest(s) in the Aircraft:-
 
1.	In relation to the Hull and Hull War Risks Insurances, to hold the insurance slips and the benefit of those insurances to your order in accordance with the loss payable provision referenced in the said Certificate of Insurance, but subject always to our requirements to operate the Fleet Policy arrangements in so far as they relate to any other aircraft insured thereunder.	
 
2.	To advise you, promptly :-	
 
 	2.1	of the receipt by us of any notice of cancellation or material change in the insurances; and	
 
 	2.2	if any premiums are not paid to us in accordance with the accounting procedures that exist between the Operator and ourselves before we notify insurers of such non-payment of premiums; and	
 
 	2.3	upon application from you, of the premium payment situation; and	
 
 	2.4	if we cease to be Insurance Brokers to the Operator.	

	 	Page 6	 	Ref: VOLARIS – XA-VOG	

 

Aon Risk Services of Texas, Inc.
2711 N. Haskell Ave., Suite 800, Dallas, TX 75204
214-989-0000
 
3.	Following a written application received from you not later than one month before expiry of these insurances to notify you within fourteen days of the receipt of such application in the event of our not having received renewal instructions from the Operator.	
The above undertakings are given subject to :-
 
a.	our continuing appointment for the time being as Insurance Brokers to the Operator; and	
 
b.	all claims and return premiums being collected through ourselves as Insurance Brokers; and	
 
c.	our lien, if any, on the said insurances for premiums due in respect of the Aircraft.	

AON RISK SERVICES OF TEXAS, INC.	
	
/s/ Illegible	
Authorized Representative	

	 	Page 7	 	Ref: VOLARIS – XA-VOG	

SCHEDULE OF PARTIES TO WHOM NOTICE IS TO BE GIVEN

Certificate:	  	VOLARIS - XA-VOG	
Insured:	  	VOLARIS	
Subject:	  	Airbus A319-133 XA-VOG, msn 3175	
PLEASE READ CAREFULLY
Under the attached Certificate, Underwriters have agreed to give notice in certain circumstances. In order to ensure our ability, as the intermediary, to direct such notice to the relevant parties, we would request that you complete the schedule below and return it to Aon Risk Services of Texas, Inc., if possible by facsimile. (OUR DIRECT FACSIMILE NUMBER IS 214 989 2114 )
PLEASE NOTE : We would remind you that notices are effective from the time of issuance and failure to provide us with the above requested information will severely inhibit our ability to ensure that you are given prompt advice. At present the information held on our files is as follows. This schedule only need be returned to us in the event that the information below is incomplete or inaccurate.

Company:	  	ARRENDADORA FINANCIERA INBURSA, S.A. de C.V.	
Address:	  	SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD	
	  	REGULADA, GRUPO FINANCIERO INBURSA	
	  	Paseo de las Palmas 736	
	  	Col. Lomas de Chapultepec	
	  	Mexico D.F.	
	  	11000	
	  	Mexico	
Facsimile:	  	5255-5261-6460	
Addressee:	  	General Counsel	
with a copy to:	  		
Company:	  	JETSCAPE, INC.	
Address:	  	10 S. New River Drive East, Suite 200	
	  	Fort Lauderdale, Florida 33301	
	  	USA	
		
Facsimile:	  	954-763-4757	
Addressee:	  	Legal department	

	 	Page 8	 	Ref: VOLARIS – XA-VOG	

			
Company:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION S.A. DE C.V.	
Address:	  	Prolongacion Paseo de la Reforma, #490	
	  	Piso 1, Edificio GE, Col. Santa	
	  	Fe Pena Blanca, Del. Alvaro Obregón	
	  	Mexico, D.F. 01012	
	  	Mexico	
Facsimile:	  	5255-5261-6460	
Addressee:	  	General Counsel	

	 	Page 9	 	Ref: VOLARIS – XA-VOG	

EXHIBIT E
FORM OF ACCEPTANCE CERTIFICATE
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. , a Mexican company (“ Lessee ”) does hereby represent, acknowledge, warrant and agree as follows:
1. Lessee and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa (“ Lessor ”) have entered into an Aircraft Lease Agreement dated as of June     , 2007 (hereinafter referred to as the “Lease”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. Lessee has this     day of                     ,          (Time:         ) at                                 received from Lessor possession of:
(a) One (1) new Airbus A319-133 aircraft bearing Manufacturer’s serial number 3175 and registration mark XA-VOG, together with two (2) IAE V2527M-A5 engines bearing manufacturer’s serial numbers V12636 and V12638 (each of which has at least 1750 lbs of thrust) and one (1) Honeywell 131-9A APU bearing manufacturer’s serial number P-            , all in airworthy condition.
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts.
(c) The loose equipment set forth in the list of Loose Equipment attached hereto.
3. The Aircraft had the following seating configuration at the Delivery Date:

             business class seats	
	
             economy class seats	
4. The Airframe, Engines, APU and Parts had the following hours/cycles at the Delivery Date:
 
 	(a)	Airframe:	

Maximum gross takeoff weight:                      pounds	
	
Total hours:              Total Landings:             	
 
120(137)

 	(b)	Engines:	
Certified thrust rating:             pounds (from data plate)

Position	  	Serial No.	  	Total Hours	  	Total Cycles	

 	(c)	APU:	
MSN             
Total hours:             
         hours/         cycles remaining on APU LLPs
 
 	(d)	Landing Gear:	

Position	  	Serial No.	  	Total Hrs/Cycles	  	Hrs/Cycles/days remaining to
next Overhaul	
				
Nose	  		  		  		
Left Main	  		  		  		
Right Main	  		  		  		
5. The amount of fuel on board at the Delivery Date is          (circle one) pounds/kilos (             gallons).
6. All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease.
7. The Aircraft, Engines, APU, Parts and Aircraft Documentation as described in the Lease have been fully examined by Lessee and have been received in a condition fully satisfactory to Lessee and in full conformity with the Lease in every respect.
8. The Lease is in full force and effect, Lessor has fully performed all of its obligations under the Lease, and Lessee has no claims, offsets, deductions, setoff or defenses of any kind or nature in connection with the Lease.
9. Lessee has obtained all required permits, authorizations, licenses and fees of the State of Registration or any Government Entity thereof necessary in order for Lessee to operate the Aircraft as permitted by the terms of the Lease.
 
121(137)

Dated on the date set forth above

Concesionaria Vuela Compariia de Aviación,
S.A. de C.V.	
		
By:	 	 	
Name:	 		
Title:	 		
ATTACHMENTS:
 
1.	List of Aircraft Documentation	
 
2.	Inventory of Avionic Equipment	
 
3.	List of Loose Equipment	
 
4.	List of Free of Charge Kits	
 
5.	Engine Power Assurance Test Conditions and Results	
 
122(137)

EXHIBIT F
FORM OF POWER OF ATTORNEY
SEE FOLLOWING PAGES
 
123(137)

POWER OF ATTORNEY
Concesionaria Vuela Campania de Aviacion, S.A. de C.V. (“Volaris”) hereby irrevocably grants an irrevocable power of attorney in favor of ARRENDADORA FINANCIERA INBURSA S.A. DE C.V. SOFOM E.R., GRUPO FINANCIERO INBURSA, with domicile at Paseo de las Palmas No. 736, Col. Lomas de Chapultepec Mexico, D.F., C.P. 11000. (“Inbursa”) as Volaris’s true and lawful Attorney in fact so that lnbursa may take any of the following actions in the name of and for Volaris with respect to the Airbus A319-133 Aircraft bearing Manufacturer’s Serial Number 3175 (the “Aircraft”) leased by lnbursa to Volaris pursuant to an Aircraft Lease Agreement dated as of June 18, 2007 (the “Lease”) and to certain rights of Inbursa in respect thereto.
1. Pursuant to the Lease, Volaris has procured and is maintaining insurances for the Aircraft. Inbursa has been named sole loss payee on the Hull All Risks and Hull War and Allied Risks insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft, Inbursa is entitled to receive insurance proceeds according to Section 16 of the Lease. Inbursa may take all action and sign all documents otherwise required to be performed by Volaris, including execution on behalf of Volaris of an appropriate form of discharge/release document, in order for Inbursa to collect such insurance proceeds.
2. In the exercise of the rights of Inbursa to recover the Aircraft from Volaris and remove the same from the United Mexican States, Inbursa may take all action and steps otherwise required to be performed by Volaris before any administrative or judicial authority of the United Mexican States in order to
PODER
Concesionaria Vuela Campania de Aviacion, S.A. de C.V. (“Volaris”) por este acto otorga, poder irrevocable, a favor de ARRENDADORA FINANCIERA INBURSA S.A. DE C.V. SOFOM E.R., GRUPO FINANCIERO INBURSA, con domicilio en Paseo de las Palmas No. 736, Col. Lomas de Chapultepec Mexico, D.F., C.P. 11000., (“Inbursa”) como representante de Volaris, por lo que Inbursa puede Ilevar a cabo cualquiera de las siguientes acciones en nombre de Volaris en relación con la Aeronave A319-133, Número de Serie del Fabricante 3175 (la “Aeronave”) arrendada por Inbursa a Volaris de conformidad con el Contrato de Arrendamiento de Aeronave celebrado el 18 de Junio de 2007 (el “Arrendamiento”) y con relación a determinados derechos de Inbursa con relación al mismo.
1. Volaris ha obtenido y mantiene coberturas de seguro respecto de la Aeronave, de conformidad con el Contrato. Inbursa ha sido nombrado como único beneficiario en los seguros de Casco y Todo Riesgo y de Casco, Guerra y Riesgos Relacionadosde la Aeronave. En caso de pérdida total o que constituya perdida total de la Aeronave, Inbursa está autorizado para recibir los beneficios del seguro de conformidad con la Sección 16 del Contrato. Inbursa podrá Ilevar a cabo todas las acciones, suscribir todos los documentos; y realizar cualquier acción a nombre de Volaris, incluyendo la ejecución del formato apropiado de descarga o liberación para cobrar los beneficios del seguro.
2. En el ejercicio de sus derechos para recuperar la Aeronave de parte de Inbursa y remover la misma de los Estados Unidos Mexicanos, Inbursa podrá Ilevar a cabo todas las acciones y pasos que deban ser realizados por Volaris ante cualquier autoridad administrativa o judicial de los Estados Unidos Mexicanos, con el fin de que

(i) cause the Aircraft and any Engines, Parts, Aircraft Documents or Aircraft Documentation to be repossessed by Inbursa, (ii) deregistered from the Mexican Aeronautic Registry of the Dirección General de Aeronáutica Civil and (iii) exported from the United Mexican States.
3. In the exercise of the rights mentioned in paragraphs 1 and 2, Inbursa may make any filings and declarations or statements and sign any public or private documents which may be considered necessary or appropriate.
4. Inbursa may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but no limited to employees of Inbursa or legal counsel in the United Mexican States.
Inbursa is empowered to determine in its sole discretion when to exercise the powers conferred upon Inbursa pursuant to this Power of Attorney as contemplated in paragraphs 1 and 2, without requiring judicial resolution, in the understanding that Volaris shall not be entitled to exercise any action against (i) any person acting pursuant the present Power of Attorney and the acts that be resultant from such actions; and (ii) any person designated by Inbursa or by an officer of Inbursa to give instructions pursuant to this Power of Attorney so long as such person, abides by the terms of this Power of Attorney and the instructions of Inbursa.
Volaris also agrees to indemnify and hold harmless any person which may act pursuant to this Power of Attorney and pursuant to instructions given by Inbursa or its designee so long as such person abides by terms of this Power of Attorney and the instructions of Inbursa. This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of Inbursa, deregistered and exported from the United Mexican States in consideration of the fact that it derives from a contractual relationship between the parties to the Lease.
This power of attorney will be exercised before any kind of persons natural and legal, so as before civil, military, judicial and administrative authorities, whether federal of local and especially before the Boards of Conciliation and Arbitration.
(i) la posesión de la Aeronave y sus Motores, Partes, Documentacion de la Aeronave sea recuperada por Inbursa, (ii) sea dada la baja del Registro Aeroánutico Mexicano de la Dirección General de Aeronáutica Civil y (iii) sea exportada de los Estados Unidos Mexicanos.
3. En el ejercicio de los derechos consignados en los párrafos 1 y 2 anteriores, Inbursa podrá presentar documentos y declaraciones, asi como suscribir documentos públicos o privados que se consideren apropiados o necesarios.
4. Inbursa podrán delegar las facultades conferidas en este documento, en todo o en parte, a cualquier individuo (s), incluyendo sin limitación, a sus empleados o abogados en los Estados Unidos Mexicanos.
Inbursa queda facultada para determiner, a su discreción, el ejercicio de las facultades que le han sido conferidas de acuerdo al presente Poder como se contempla en los párrafos 1 y 2, sin necesidad de resolución judicial o sentencia, en el entendido de que Volaris no tendrá derecho a ejercitar acción alguna en contra de (i) cualquier persona que actúe de acuerdo al presente Poder y de los actos que de dicha actuación se deriven; (ii) cualquier otra persona designada por Inbursa o por un funcionario de Inbursa para dar instrucciones de acuerdo con este Poder en tanto dicha persona se someta a los términos del presente Poder y a las instrucciones de Inbursa.
Volaris también acuerda en indemnizar y mantener en paz y a salvo a cualquier persona que pueda actuar en base a este Poder y de acuerdo a las instrucciones de Inbursa o su mandatario, en tanto dicha persona se someta a los términos del presente Poder y a las instrucciones de Inbursa. El presente Poder se otorga de forma irrevocable hasta que la Aeronave haya sido devuelta a la posesión de Inbursa, dada la baja y exportada de los Estados Unidos Mexicanos en consideración a que el mismo se derive de la relación contractual entre las partes conforme al Arrendamiento.
El presente poder se ejercerá ante toda clase de personas fisicas y morales, asi como ante autoridades civiles, militares, judiciales y administrativas, ya sean federales o locales y especialmente ante las Juntas de Conciliación y Arbitraje.

This Power of Attorney is granted to be exercised in the United Mexican States, pursuant to the Interamerican Convention on the Legal Regime of Powers of Attorney to be used abroad and to the Washington Protocol for the Uniformity of the Legal Regime of Powers of Attorney.
Concesionaria Vuela Compañia de Aviación, S.A. de C.V. has made and delivered this Power of Attorney on June 18, 2007 in Mexico City.

Concesionaria Vuela Compañía de Aviación S.A. de C.V.	
	
/s/ Alfonso Asencio Triujeque	
By:	 	Alfonso Asencio Triujeque	
Title:	 	General Counsel and Attorney in fact	
 
Este Poder se otorga pare ser ejercitado en los Estados Unidos Mexicanos, conforme a la Convención Interamericana sobre el Régimen Legal de los Poderes para ser Utilizados en el Extranjero y at Protocolo Sobre Uniformidad del Regimen Legal de Poderes de Washington.
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. ha otorgado y entregado este Poder, en la Ciudad de México el dia 18 de Junio de 2007.

Concesionaria Vuela Compañía de Aviación S.A. de C.V.	
	
/s/ Alfonso Asencio Triujeque	
Por:	 	Alfonso Asencio Triujeque	
Cargo:	 	Director Juridico y Representante Legal	

EXHIBIT G
RETURN ACCEPTANCE RECEIPT
Date:                          ,        
1. Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“ Lessee ”) and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa (“ Lessor ”) have entered into an Aircraft Lease Agreement dated as of June     , 2007 (the “ Lease ”). Words used herein with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. Lessor has this     day of                     ,         (Time:         ) at                             received from Lessee possession of:
(a) One (1) Airbus A319-133 Aircraft bearing Manufacturer’s serial number 3175, together with two (2) IAE V2527M-A5 Engines bearing manufacturer’s serial numbers V12636 and V12638, one (1) Honeywell 131-9A APU bearing manufacturer’s serial number P-            , and all Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks, flight records and historical information regarding the Aircraft, Engines, APU and Parts, as listed in the Document Receipt attached hereto.
3. The Aircraft had the following seating configuration at return:

             business class seats	
	
             economy class seats	
4. The Airframe, Engines, APU and Parts had the following hours/cycles at return:
(a) Airframe:
Maximum gross takeoff weight:                      pounds
Total hours:              Total Landings:             
Date last “C” check performed:             
             hours/      cycles since last “C” check
Date last 6Y/12Y structural check performed:             
             hours/      cycles since last 6Y/12Y structural check
 
124(137)

(b) Engines:
Certified thrust rating:            pounds (from data plate)

Position	  	Serial No.	 	  	Total Hrs/Cycles	  	Hrs/Cycles since last
Performance Restoration Shop
Visit	
				
1	  	 	V12636	  	  		  		
				
2	  	 	V12638	  	  		  		
(c) APU: MSN             
Total hours:             
             hours/   cycles since last hot section refurbishment
             hours/   remaining on APU life-limited Parts
(d) Landing Gear:

Position	  	Serial
No.	  	Total
Hrs/
Cycles	  	Hrs/Cycles/Days remaining to next
Overhaul	  	Date of Last Overhaul	
					
Nose	  		  		  		  		
					
Left Main	  		  		  		  		
					
Right Main	  		  		  		  		
(e) Fuel on board at return :          (circle one) pounds/kilos (         gallons)
5. Other technical information regarding the Aircraft and its components are correctly set forth on the Technical Evaluation Report (in the form of Exhibit I ) attached hereto.
 
125(137)

6. With reference to Article 12.9 of the Lease regarding reimbursement from the Maintenance Funds after return of the Aircraft:
 
        	There are no claims for reimbursement from the Maintenance Funds which will be submitted after the date hereof.	
Or
 
        	Claims for reimbursement from the Maintenance Funds will be submitted after the date hereof for the following:	

Type of Work	  	Estimated Invoice Amount	
	  		
7. The above specified aircraft, engines and documentation are hereby accepted by Lessor subject to (a) the provisions of the Lease and (b) correction by Lessee (or procurement by Lessee at Lessee’s cost) as soon as reasonably possible of the discrepancies specified in Attachment 2 hereto.
8. Subject to the following paragraph, the leasing of the Aircraft by Lessor to Lessee pursuant to the Lease is hereby terminated without prejudice to Lessee’s continuing obligations under the Lease including, without limitation, paragraph 7(b) above and Articles 9.5, 14, 15 and 16.
9. This Return Acceptance Receipt is executed and delivered by the parties in                                 .
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in their respective corporate names by their duly authorized representatives as of the day and year first above written.

Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	 		 	Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa	
					
By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
Title:	 		 		 	Title:	 		
 
126(137)

ATTACHMENTS:
 
1.	List of Aircraft Documentation	
 
2.	Inventory of Avionic Equipment	
 
3.	List of Loose Equipment	
 
4.	Free of Charge Kits	
 
5.	List of Discrepancies	
 
6.	Engine Power Assurance Test Conditions and Results	
 
7.	Dent and Damage Chart	
 
8.	Incident/Accident Letter	
 
9.	Technical Evaluation Report (in the form of Exhibit I )	
 
127(137)

CONFIDENTIAL TREATMENT REQUESTED
 
EXHIBIT H
FORM OF MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Report Due Date:            

To:	 	Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa	  	Jetscape, Inc.
10 S. New River Drive East, Suite 200
Fort Lauderdale, FL 33301
United States of America	
				
	 	Paseo de las Palmas 736
Col. Lomas de Chapultepec
Mexico, 11000, D.F.
Mexico	  	Attn:
Fax:
Email:	 	Technical Department
+1 954 763 4757
[…]	
	 	Attn:	 	Director Juridico	  		 		
	 	Fax:	 	+55 52 02 52 00	  		 		
	 	Email:	 	[…]	  		 		
From: Concesionaria Vuela Compañía de Aviación, S.A. de C.V.

Contact:             	  	Fax:            	
		
AIRCRAFT TYPE: AIRBUS A319-133	  		
		
SERIAL NUMBER: 3175	  	REGISTRATION:    	
		
ENGINE TYPE: IAE V2527M-A5	  	MONTH OF:        	
	
NOTE :        PLEASE RECORD TIME IN HOURS AND MINUTES OR IN DECIMALS.	

Aircraft Total Time Since New As Of Last Month:	  	Hours:	 	Min:	
Aircraft Total Time Since New:	  	Hours:	 	Min:	
Aircraft Total Cycles Since New:	  	Cycles:	 		
Airframe Hours Flown During Month:	  	Hours:	 	Min:	
Airframe Cycles/Landings During Month:	  	Cycles:	 		
Time Remaining to 6Y/12Y structural or Heavy Maintenance Check:	  		 		
 
128(137)

CONFIDENTIAL TREATMENT REQUESTED

 
											
 	  	HOURS OR CYCLES
FLOWN DURING
MONTH (as
applicable)	  	x	  	US$ PER HOUR,
CYCLE OR
MONTH
(as applicable)	  	=	  	MAINTENANCE
FUNDS	
TOTAL AIRFRAME:	  	One (1) Month	  	x	  		  	=	  		
						
TOTAL LANDING GEAR:	  	One 1 Month	  	x	  		  	=	  		
						
TOTAL APU:	  	Hrs:	  	x	  		  	=	  		
						
Original Engine Serial Number:	  	Hrs.	  	x	  		  	=	  		
						
	  	Cycle (for Engine LLP Maintenance Fund):	  	x	  		  	=	  		
						
Original Engine Serial Number:	  	Hrs:	  	x	  		  	=	  		
						
	  	Cycles (for Engine LLP Maintenance Fund):	  	x	  		  	=	  		
			
TOTAL AMOUNT OF MAINTENANCE FUNDS (US$) PAID THIS MONTH:	  	US$	  		

ENGINE SERIAL NUMBER:	 	ENGINE SERIAL NUMBER:	
		
ORIGINAL POSITION:	 	ORIGINAL POSITION:	
		
ACTUAL LOCATION:	 	ACTUAL LOCATION:	
		
CURRENT THRUST RATING:	 	CURRENT THRUST RATING:	
		
HOURS:	 	HOURS:	
		
Total Time Since New As Of Last Month:	 	Total Time Since New As Of Last Month:	
		
Total Time Since New:	 	Total Time Since New:	
		
Total Cycles Since New:	 	Total Cycles Since New:	
		
Hours Flown During Month:	 	Hours Flown During Month:	
		
Cycles During Month:	 	Cycles During Month:	

IMPORTANT:	  	IF ENGINE OWNED BY ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA IS REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY ON THIS FORM.	

129(137)

CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT I
FORM OF TECHNICAL EVALUATION REPORT

Date of Report:	  		
Delivery Date:	  		
		
General Aircraft Description	  		
		
Description 	  	Details 	
Manufacturer / Model:	  		
Manufacturer Serial Number	  		
Type Certificate Number:	  		
Date of Manufacture:	  		
Design Specification:	  		
Registration / Country of Registration	  		
Registered Owner:	  		
Prior Reg./Country /Authority:	  		
Engine Type	  		
Engine Serial Numbers	  		
Noise Compliance:	  		
Flight Crew Accommodation:	  		
Cabin Crew Accommodation:	  		
Passenger Accommodation:	  		
SELCAL Code:	  		
Aircraft Hours and Cycles ( As of     -    -    )

Description	  	Hours	  	Cycles	
Airframe	  		  		
No. 1 Engine SN             	  		  		
No. 2 Engine SN             	  		  		
Aircraft History

Dates	  	Operator	  	Country	  	Registration	

 
					
Weights	  	Pounds	  	Kilograms	
Maximum Certified Taxi Gross Weight:	  		  		
Maximum Certified Take-Off Weight:	  		  		
Maximum Certified Landing Weight:	  		  		
Maximum Certified Zero Fuel Weight:	  		  		
 
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CONFIDENTIAL TREATMENT REQUESTED

	
Manufacture’s Original Basic Empty Weight:	
Operational Empty Weight	
Last Aircraft Weighing:	

Additional Information	
	
Description of Additional Information 	
Current Transponder Code –	
Last Transponder Check:	
Last Altimeter Check:	
Last Compass Swing:	
Flight Data Recorder data dump analysis complied with on:	
Maintenance Check Status

Aircraft Maintenance and Inspections are carried out in accordance with Operators Approved Program	
				
Check	  	Interval	  	Number	  	Description of Check	
A	  	     Days	  		  	Last A checks: Per Program	
C	  	     Months	  		  	See below	
					
Check Status 	  	1C	  	2C	  	4C/ 6Y	  	8C / 12Y	
Interval Months	  		  		  		  		
Last Accomplished (Date)	  		  		  		  		
Last Accomplished: AF (Hours)	  		  		  		  		
Next Due: Date	  		  		  		  		
Hours Remaining	  		  		  		  		
Months Remaining	  		  		  		  		

ATA Chapter 22                    Automatic Flight Control	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No	
Flight Management Guidance Computer	  		  		  		
Flight Augmentation Computer	  		  		  		
Flight Control Unit	  		  		  		
Multipurpose Control Display Unit	  		  		  		
	
ATA Chapter 23                    Communications	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No.	
Audio Management Unit	  		  		  		
ACARS	  		  		  		
Cabin Intercomm Data System	  		  		  		
Cockpit Voice Recorder	  		  		  		
 
131(137)

CONFIDENTIAL TREATMENT REQUESTED

HF Transceiver	  		  		  		
VHF Transceiver	  		  		  		
PRAM Tape Reproducer (Pre Recorded PAX Address)	  		  		  		
MPES Tape Reproducer (Audio Entertainment)	  		  		  		
Tape Reproducer (Video Entertainment)	  		  		  		
Audio Management Unit / SELCAL Decoder	  		  		  		
Radio Management Panel	  		  		  		
	
ATA Chapter 25                    Equipment and Furnishings	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No.	
Flight Crew Seat – Captain	  		  		  		
Flight Crew Seat – First officer	  		  		  		
Flight Crew Seat – 1 st Observer	  		  		  		
Flight Attendant Seat – FWD (L-1) Dbl	  		  		  		
Flight Attendant Seat – AFT (L-2) Dbl	  		  		  		
Flight Attendant Seat – AFT (L2/R2) Single	  		  		  		
G-1 FWD Galley w/2 ovens, 2 coffee makers and 3 ATLAS Full carts	  		  		  		
G-5 AFT Bulkhead Galley w/3 ovens, 2 coffee makers and 6 ATLAS Full carts	  		  		  		
Business Class Seats – Cabin	  		  		  		
Economy Class Seats – Cabin	  		  		  		
	
ATA Chapter 27                    Flight Controls	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No.	
ELAC – Elevator/Aileron Computer	  		  		  		
FCDC – Flight Control Data Concentrator	  		  		  		
FAC – Flight Augmentation Computer	  		  		  		
SFCC – Slat/Flap Control Computer	  		  		  		
SEC – Spoiler/Elevator Computer	  		  		  		
 
132(137)

CONFIDENTIAL TREATMENT REQUESTED

							
ATA Chapter 28                    Fuel	
				
Fuel Tanks	  	Fuel Capacity
Pounds	  	Fuel Capacity
Kilograms	  	Max Usable Fuel
US Gallons	
Left Wing Main, MaximumAllowable: *	  		  		  		
Right Wing Main, Maximum Allowable: *	  		  		  		
Center Wing, Maximum Allowable: *	  		  		  		
Maximum Allowable Total Fuel	  		  		  		
*  Source – Weights Approved Aircraft Flight Manual and TCDS A28NM Rev 8	
Note: Based on a fuel density of 7.1 pounds per U.S. gallon.	  		  		  		
Fuel Quantity Indication (Unit of Measure):	  		  		  		

ATA Chapter 31                    Independent Instruments	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No	
CFDIU – Central Fault Display Interface	  		  		  		
DFDR – Digital Flight Data Recorder	  		  		  		
DFDIU –Digital Flight Data Interface Unit	  		  		  		
DMU – Data Management Unit	  		  		  		
DMC – Display Management Computer	  		  		  		
Multifunction Printer	  		  		  		
SDAC – Systems Data Acquisition Concentrator	  		  		  		
Primary Flt Display / Navigation Display	  		  		  		
FWC – Flight Warning Computer	  		  		  		
QAR – Quick Access Recorder	  		  		  		

ATA Chapter 32                    Landing Gear:	
				
Description Position	  	Date	  	Hours	  	Cycles	
Left Main Landing Gear: Messier Dowtry	  	P/N:                      S/N:                     	
Landing Gear Totals:	  		  		  		
Last OH – Performed by:             	  		  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		  		
Time Since Overhaul (TSO)	  		  		  		
Remaining Time to Overhaul (MPD)	  		  		  		
Remaining Time to First Life Limit	  		  		  		
				
Description Position	  	Date	  	Hours	  	Cycle	
Right Main Landing Gear: Messier Dowty	  	P/N:                      S/N:                     	
Landing Gear Totals:	  		  		  		
Last OH – Performed by:             	  		  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		  		
Time Since Overhaul (TSO)	  		  		  		
Remaining Time to Overhaul (MPD)	  		  		  		
Remaining Time to First Life Limit	  		  		  		
 
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CONFIDENTIAL TREATMENT REQUESTED

				
Description Position	  	Date	  	Hours	  	Cycles	
Nose Landing Gear: Messier Dowty	  	P/N:                      S/N:                     	
Landing Gear Totals:	  		  		  		
Last OH – Performed by:             	  		  		  		
Overhaul Interval – MPD (TBO) (Soonest of)	  		  		  		
Time Since Overhaul (TSO)	  		  		  		
Remaining Time to Overhaul (MPD)	  		  		  		
Remaining Time to First Life Limit	  		  		  		

Description	  	Qty	  	Manufacture /Model	  	Details	
NLG Tires	  	2	  		  		
MLG Tire	  	4	  		  		
Brake Assembly	  	4	  		  		

ATA Chapter 34                    Navigation	
				
Description	  	QTY	  	Manufacture /Model	  	Mfg. Part No.	
ADIRU – Air Data Inertial Reference Unit	  		  		  		
ADF – Automatic Direction Finder	  		  		  		
ATC – Air Traffic Control Modes	  		  		  		
DME – Distance Measuring Equipment Interrogators	  		  		  		
EGPWS – Enhanced Ground Proximity Warning System	  		  		  		
Radio Altimeter	  		  		  		
VHF – VOR Receiver	  		  		  		
VHF – ILS Receiver	  		  		  		
TCAS – Traffic Collision Avoidance System	  		  		  		
Weather Radar Transceiver	  		  		  		

ATA Chapter 49                    Auxiliary Power – APU	
					
Description Position	  	Pos	  	Manufacture /Model	  	Mfg. Part No.	  	Mfg. S/N	
Auxiliary Power Unit (APU)	  	1	  		  		

APU Status Description	  	Date	  	Hours	  	Cycles	
Total Time and Cycles Since New	  		  		  		
APU Last Hot Section Insp.(HSI) – By:             	  		  		  		
APU Time Since Overhaul (TSO)	  		  		  		
APU Time Since Hot Section Inspection	  		  		  		
 
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CONFIDENTIAL TREATMENT REQUESTED

									
ATA Chapter 71                    Power Plant	
					
Description	  	Pos	  	Manufacture / Model	  	Mfg. Part No.	  	Mfg. S/N	
Engine	  	1	  	International Aero Engines	  		  		
Engine	  	2	  	International Aero Engines	  		  		
Thrust Rating – Maximum Continuous Static Sea Level	  		  		
Thrust Rating – 5 min Take-Off Static Sea Level	  		  		

Engine #1                                                             IAE	  	S/N:	
				
Description Position	  	Date	  	Hours	  	Cycles	
Engine Total Time (TSN)	  		  		  		
Last Major Shop Visit Restoration	  		  		  		
Time Since Last Shop Visit	  		  		  		
Remaining Time to First Life Limit	  		  		  		
		
Engine                                                             IAE	  	S/N:	
				
Description Position	  	Date	  	Hours	  	Cycles	
Engine Total Time (TSN)	  		  		  		
Last Major Shop Visit Restoration	  		  		  		
Time Since Last Shop Visit	  		  		  		
Remaining Time to First Life Limit	  		  		  		
 
135(137)

CONFIDENTIAL TREATMENT REQUESTED
 
EXHIBIT J
FORM OF DEPOSIT AGREEMENT
SEE FOLLOWING PAGES
 
136(137)

SECURITY DEPOSIT AGREEMENT
THIS SECURITY DEPOSIT AGREEMENT (HEREINAFTER THE “ AGREEMENT ”), IS ENTERED INTO ON THE          DAY OF                      BY AND BETWEEN ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA , AS DEPOSITORY (HEREINAFTER THE “ DEPOSITORY ” AND/OR “ LESSOR ”), AND ON THE OTHER BY CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , AS DEPOSITOR (HEREINAFTER THE “ DEPOSITOR ” AND/OR “ LESSEE ”), IN ACCORDANCE WITH THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
 
I.	The Depository, by means of its legal representatives, states:	
 
 	(a)	That it is a variable capital limited liability stock corporation, duly incorporated and validly existing in accordance with the Mexican laws.	
 
 	(b)	That its representatives have all powers and faculties necessary to contract and be bound on behalf of the Depository, powers which have been revoked, modified or limited in any form whatsoever as of the date of this Agreement.	
 
 	(c)	That it wishes to execute this Agreement in accordance with the terms and conditions stated below.	
 
II.	The Depositor, by means of its legal representative, states:	
 
 	(a)	That it is a variable capital limited liability stock corporation, duly incorporated and validly existing in accordance with the Mexican laws.	
 
 	(b)	That its representative has all powers and faculties necessary to contract and be bound on behalf of the Depository, powers which have been revoked, modified or limited in any form whatsoever as of the date of this Agreement.	
 
 	(c)	That it wishes to execute this Agreement in accordance with the terms and conditions stated below.	
 
III.	Both parties, by means of their corresponding representatives, state:	
 
 	(a)	That on the Depositor, as lessee, and the Depository, as lessor, executed a aircraft lease agreement (hereinafter the “ Lease Agreement ”), in order to lease the Lessee an Airbus aircraft model with manufacturer series number equipped with two engines model of IAE with manufacturer’s series number (hereinafter the “Aircraft”).	

Execution of this Agreement constitutes a condition to execute the Lease Agreement under the terms and conditions agreed upon between the parties, in order to establish a security in favor of the Depository regarding the compliance with all and any of the obligations entrusted to the Depositor in accordance with the Lease Agreement.
The terms in capital letters used in this Agreement shall have the same meanings ascribed to such terms in the Lease Agreement unless otherwise defined in this Agreement.
By virtue of the foregoing, based on the recitals included in this Agreement, the parties agree to comply with the following:
CLAUSES
One.- According to the terms and conditions stated in the Lease Agreement, as a security (i) for the payment of all the amounts payable or to be payable by Depositor; and (ii) for compliance with all the obligations entrusted to the Depositor in accordance with the Lease Agreement and any renewals, extensions and amendments thereto, Depositor shall have delivered or is to deliver in favor of the Depository, the total amount of *****, lawful currency of the United States of America), as security deposit (the “ Security Deposit ”) as follows:
 
 	1.	The amount of *****, lawful currency of the United States of America), which has been delivered by the Depositor and that Depository states having received on December 7, 2006.	
 
 	2.	The amount of *****, lawful currency of the United States of America) that Depositor shall deliver the Depository upon delivery of the Aircraft in accordance with the Lease Agreement.	
The foregoing amounts have been or should be deposited through wire transfers of funds immediately available to the following account:

BANK:	  	JP MORGAN CHASE N.Y.	
BENEFICIARY:	  	BANCO INBURSA	
ACCOUNT:	  	*****	
SWIFT:	  	*****	
ABA:	  	*****	
FINAL BENEFICIARY:	  	ARRENDADORA FINANCIERA INBURSA SA. DE C.V.	
ACCOUNT OF FINAL BENEFICIARY:	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
2

TWO.- Security Deposit shall not accrue interests and may not be combined with the general funds of the Depository in the manner that Depository deems reasonable. Notwithstanding the foregoing, once all the Lease Agreement amounts owed are fully paid and provided there is no failure to comply with payment by the Depositor according to the Lease Agreement, and any of the conditions stated in clause Six hereof have been complied with, Depository shall repay the amount of the Security Deposit originally delivered in accordance with the provisions stated in Clause Six.
THREE.- The Security Deposit shall not release, excuse, reduce or in any form whatsoever modify compliance with the all and any of the obligations of Depositor before the Depository at the time and in the manner set forth in the Lease Agreement, its exhibits or any document related thereto, nor shall correct any noncompliance by Depositor in accordance with the Lease Agreement.
FOUR.- In the event there is any noncompliance by Depositor regarding its obligations stated in the Lease Agreement, and once the applicable grace period has elapsed, in accordance with the Lease Agreement, if Depositor has not corrected the corresponding noncompliance, Depository may, but shall not be bound to, apply the Security Deposit to pay the compensation of any pending obligation of Depositor in accordance with the Lease Agreement in the manner the Depository deems pertinent.
FIVE.- If Depository applies the Security Deposit as indicated in Clause Four above, the Depository shall be bound, within the five (5) business days after the date when receiving notification in writing for such purpose by Depository, to deliver the Depository the amount necessary in order to repay the amount of the Security Deposit to that originally delivered in accordance with the provisions set forth in Clause One above, and such amount should be repaid to the Depository with the corresponding Value Added Tax which has been accrued due to the amount applied by the Depository of the Security Deposit.
Noncompliance by Depository to deliver the additional amount referred to in the foregoing paragraph plus the corresponding Value Added Tax within the term indicated therein, shall be deemed as an event of default in accordance with the Lease Agreement in which event the Depository may exercise all and any of the actions and rights available in accordance with such instrument.
SIX- As long as (a) the Lease Agreement has not expired and possession of the Aircraft has been returned to Depository as lessor in accordance with the provisions set forth in the Lease Agreement for such purpose, (b) the Lease Agreement has been early terminated as a result of a Total Loss occurred before the Aircraft is delivered to Depositor as lessee, or else, as a result of a Total Loss of the Aircraft after Delivery thereof, subject to the fact that Depository as lessee has received the Value Agreed and that any Event of Default that may exist at that time has been corrected to the extent allowed by the circumstances by reason of the Total Loss, (c) closure of the Purchase and Sale transaction of the Aircraft in favor of the Depository as purchaser, as a result of the Assignment of Rights for Purchasing the
 
3

Aircraft in favor of the Depository as assignee, is not completed due to causes not attributable to Depositor as assignor, (d) execution of the Lease Agreement is not performed due to causes not attributable to Depositor, or (f) all and any of the obligations of Depositor, in accordance with the Lease Agreement and all other documents related thereto, including, without limitation, expenses, fees, taxes or dues, have been fully complied, and subject to the fact that there is no event of default in accordance with the Lease Agreement itself and once the possession of the Aircraft has been returned to Depository as lessor in accordance with the Lease Agreement, the Depository shall reimburse the Depositor any remaining balance of the Security Deposit within the five (5) days after the date when the assumption referred to above occurs.
SEVEN.- This Agreement shall become an integral part of the Lease Agreement, therefore, it shall prevail for all the time when any obligation by Depositor under the Lease Agreement is not complied.
EIGHT.- All notices and notifications between the parties shall be in writing, in Spanish and should be delivered (i) personally, with acknowledgement of receipt; (ii) by specialized courier service, with the acknowledgment of receipt; or (iii) via facsimile, followed by specialized courier service or personally delivered, with acknowledgement of receipt. All notices and notifications shall be delivered to the following domiciles and facsimile numbers and shall become effective when personally delivered.
The Depository
Paseo de las Palmas 736
Col. Lomas de Chapultepec
México, 11000, D.F.
Mexico
C/O: Legal Director
Tel. + 52 55 56 25 49 00
Fax + 52 55 52 02 52 00
The Depositor
Prolongación Paseo de la Reforma 490, Piso 1
Colonia Santa Fe
Mexico 01210, D.F.
México,
C/O:
Tel: +52 55 52 61 64 00
Fax: +52 55 52 61 64 60
NINE.- This Agreement shall be governed by, and construed in accordance with the Mexican laws. For anything related to the construction, compliance and execution hereof, the parties shall expressly submit themselves to the jurisdiction of the competent courts for the Federal District, expressly waiving to any other jurisdiction that may correspond thereto by virtue of their present or future domiciles or due to any other reason whatsoever.
 
4

By virtue of the foregoing, the parties execute this Agreement, by means of their legal representatives, in three (3) counterparts, each of which shall be deemed an original and together the same instrument, on the date stated above.
[Next page is of signatures]
 
5

The Depositor
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

By:	 	 	
Name:	 		
Position:	 	Attorney-in-fact	
The Depository
ARRENDADORA FINANCIERA INBURSA, S.A. DE C.V. SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, GRUPO FINANCIERO INBURSA

By:	 	 	
Name:	 		
Position:	 	Attorney-in-fact	
 
6

EXHIBIT K
FORM OF LEGAL OPINION
SEE FOLLOWING PAGES
 
137(137)

Exh K Legal Opinion Eng
[    ] March 2007
[INBURSA]
Dear Sirs,
This opinion is furnished to you pursuant to Section [ ] of the Aircraft Lease Agreement dated as of 26 March 2007 (the “Lease”) between Concesionaria Vuela, Cómpañia de Aviacion, S.A. de C.V. (the “Lessee”) and Arrendadora Financiera Inbursa, S.A. de C.V Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Inbursa, (the “Lessor”). Defined terms in this opinion are used herein as defined in the Lease.
We have acted as counsel to Lessee, and have acted in such capacity in connection with the negotiation, preparation, authorization, execution and delivery of, and the consummation of the transactions contemplated by the Lease. Unless otherwise specified, all capitalized terms used herein without definition shall have the meanings assigned to them in the Lease.
Based upon the foregoing, we are of the following opinion:
 
 	1.	Lessee is a stock corporation of variable capital ( sociedad anónima de capital variable ) duly formed and validly existing under the General Law of Commercial Partnerships ( Ley General de Sociedades Mercantiles ) of Mexico for an indefinite period, subject to suit in its own name, and is an air carrier of persons in scheduled air transportation and is registered, licensed or otherwise authorized by the government of Mexico to engage in such activities.	
 
 	2.	Lessee is validity existing as a corporation under the laws of the United Mexican States and has full corporate power and authority to enter into and perform its obligations under the Lease.	
 
 	3.	None of the execution and delivery of the Lease, the performance by Lessee of its obligations thereunder and the consummation of the transactions contemplated thereby will conflict or result in any breach of, or constitute a default under, any applicable law, rule or regulation of the United Mexican States or any judgment or order applicable to Lessee, Lessee’s Charter documents (Escritura Constitutiva) or any agreement, mortgage, or other instrument to which Lessee is party or by which it or its assets may be bound.	
 
 	4.	The execution, delivery and performance by Lessee of the Lease have been approved by Lessee’s Board of Directors on [    ].	
 
 	5.	Ownership of the Aircraft by Owner as Lessor, as defined in the Lease, cannot be charged, set aside, avoided or otherwise challenged by any person claiming interest (whether proprietary, possessory or by way of security) in the Aircraft on the grounds of or in connection any labor process or in connection with the insolvency, concurso mercantil , bankruptcy or liquidation of Lessee.	
 
1

Exh K Legal Opinion Eng
 
 	6.	The constitution of Mexico guarantees the protection of property from expropriation or requisition without fair compensation. The Aircraft may, however, be detained pursuant to court proceedings, which could be dismissed through the demonstration of title in accordance with the appropriate proceedings in each case.	
 
 	7.	The Lease and the other Operative Documents have been duly executed and delivered by Lessee and constitute the legal, valid and binding obligations of Lessee enforceable in accordance with their terms, subject to applicable concurso mercantil , bankruptcy, insolvency and similar laws affecting creditors’ rights generally. In addition, the validity or enforceability of certain of the remedies provided for in the Lease may be limited by applicable law or judicially adopted principles which, in our judgment, do not make such remedies (taken as a whole) inadequate for the practical realization of the benefits afforded thereby.	
 
 	8.	All authorizations and approvals of any Mexican federal, state or municipal governmental department or agency required or necessary to authorize the execution, delivery and performance by Lessee of the Lease or other Operative Documents, with respect to Lessee, for the legality, validity, binding effect or enforceability thereof have been obtained and are in full force and effect.	
 
 	9.	Except for the registration of the Lease in the Registro Aeronáutico Mexican (the “Registry”) and for the payment of registration duties described below, no filing or recording of any instrument or document (including the filing or any financial statement) is necessary of the United Mexican States in order for the Lease to constitute a valid and perfected lease of record relating to the Aircraft.	
 
 	10.	The payment obligations of Lessee under the Lease rank at least equally and ratably (pari passu) in point of priority and security with all other unsecured and unsubordinated obligations of Lessee.	
 
 	11.	Application has been made with the Dirección General de Aeronáutica Civil, Secretaría tie Comunicaciones y Transportes of the United Mexican States (the “DGAC”) for registration in the Registry of the interest of Lessor as “Owner” and Lessor in the Aircraft and no other steps are necessary to (i) record or perfect Lessor’s interest in the Aircraft in the United Mexican States or (ii) to fully establish and protect Lessor’s title to, in and property rights with respect to the Aircraft, as against Lessee or any third party claiming through Lessee or otherwise and to ensure that the rights of Lessor therein will have priority in all respects over the claims of Lessee’s creditors.	
 
 	12.	Upon termination of the Aircraft Lease (whether on expiry or otherwise), as contemplated in the Lease, the applicable Lessor shall be entitled:	
 
 	(1)	to repossess the Aircraft, subject to applicable law;	
 
2

Exh K Legal Opinion Eng
 
 	(2)	to deregister the Aircraft; from the Registry of the DGAC after termination of the Lease, as provided by applicable law; and	
 
 	(3)	to remove the Aircraft from the operating certificate of Lessee and export the Aircraft from the United Mexican States	
After termination of the Lease due to the occurrence of an Event of Default or for any other reason as contemplated in the Lease, no consents, approvals or licenses are required to Lessor repossess the Aircraft from Lessee
 
 	13.	Except for the duties paid to the Registry for the registration of the Lease and as set forth in paragraph 19 below, there are no registration, stamps or other taxes or duties of any kind payable in the United Mexican States in connection with the signature, performance or enforcement by legal proceedings of the Lease.	
 
 	14.	Lessor will not become liable for any Tax in the United Mexican States other than tax on its income solely by reason of entering into the Lease with Lessee, or performing its obligations thereunder, provided that rental payments shall be subject to 15% Value Added Tax payable by Lessee, no withholding tax is applicable pursuant to rental payments. With respect to any withholdings, the indemnification and taxation provisions of the Lease are fully effective and enforceable in accordance with their terms.	
 
 	15.	There is no litigation, proceeding or government investigation pending or overtly threatened against the Lessee which if adversely determined, would have a material adverse effect on the business, assets or financial condition of the Lessee.	
 
 	16.	The choice of the laws of the United Mexican States to govern the Lease is valid under the laws of Mexico, and a Mexican court would uphold such choice of law.	
 
 	17.	Lessee is subject to private commercial law and suit.	
I express no opinion as to any laws other than the laws of the United Mexican States.
Very Truly yours,
[VOLARIS]
 
3

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.20
Execution Version
Dated as of January 25, 2008
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A320-XXX aircraft
bearing manufacturer’s serial
number 3672

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
1.	 	Interpretation	  	 	3	  	
			
2.	 	Agreement to Lease	  	 	3	  	
			
3.	 	Delivery	  	 	3	  	
			
4.	 	Expiry Date	  	 	5	  	
			
5.	 	Rent	  	 	6	  	
			
6.	 	Deposit	  	 	8	  	
			
7.	 	Maintenance Rent	  	 	11	  	
			
8.	 	Payments	  	 	12	  	
			
9.	 	Lessor Covenants	  	 	15	  	
			
10.	 	Lessee Covenants	  	 	15	  	
			
11.	 	Possession and Sub-Leasing	  	 	22	  	
			
12.	 	Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	25	  	
			
13.	 	Replacement and Interchange of Engines and Parts	  	 	28	  	
			
14.	 	Manufacturer’s Warranties	  	 	32	  	
			
15.	 	Indemnities	  	 	33	  	
			
16.	 	Insurance	  	 	35	  	
			
17.	 	Loss, Damage and Requisition	  	 	38	  	
			
18.	 	Disclaimers	  	 	39	  	
			
19.	 	Redelivery	  	 	41	  	
			
20.	 	Events of Default	  	 	43	  	
			
21.	 	Taxation	  	 	50	  	
			
22.	 	Assignment and Transfer	  	 	57	  	
			
23.	 	Miscellaneous Provisions	  	 	58	  	
			
24.	 	Notices	  	 	63	  	
			
25.	 	Governing Law Jurisdiction and Waiver of Jury Trial	  	 	65	  	
			
26.	 	Owner Participant and Lessee Undertakings:	  	 	67	  	
		
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	70	  	
		
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	86	  	
		
Schedule 3 CONDITIONS PRECEDENT	  	 	90	  	
		
Schedule 4 *****	  	 	94	  	
		
Schedule 5 INSURANCE REQUIREMENTS	  	 	95	  	
		
Schedule 6 *****	  	 	99	  	
		
Schedule 7 PRE-DELIVERY PROCEDURE	  	 	104	  	
		
Schedule 8 *****	  	 	105	  	
		
*****	  	 	106	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- i -

TABLE OF CONTENTS
(continued)

 	 	 	  	Page	 	
		
*****	  	 	107	  	
		
Schedule 9 *****	  	 	108	  	
		
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	109	  	
		
Schedule 11 *****	  	 	110	  	
		
*****	  	 	110	  	
		
*****	  	 	113	  	
		
Schedule 12 *****	  	 	122	  	
		
Schedule 13 *****	  	 	123	  	
		
*****	  	 	123	  	
		
*****	  	 	124	  	
		
*****	  	 	125	  	
		
*****	  	 	126	  	
		
*****	  	 	127	  	
		
*****	  	 	128	  	
		
*****	  	 	129	  	
		
*****	  	 	130	  	
		
Schedule 14 *****	  	 	131	  	
		
*****	  	 	132	  	
		
*****	  	 	133	  	
		
*****	  	 	134	  	
		
Schedule 15 *****	  	 	135	  	
		
*****	  	 	136	  	
		
*****	  	 	137	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- ii -

THIS AGREEMENT is made as of January 25, 2008
Between:
(1) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , not in its individual capacity, except as otherwise expressly herein provided, but solely as Owner Trustee, under the Trust Agreement (as defined below), a national banking association organized under the laws of the United States, whose main office is at 299 South Main Street, 12th Floor, Salt Lake City, Utah 84111 ( Lessor ); and
(2) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of México, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ).
It is agreed as follows:
 
1. 	Interpretation	
Definitions
1.1 In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).
Construction
1.2 The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.
Clauses and Schedules
1.3 References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.
 
2. 	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3. 	Delivery	
Scheduled Date
 
3.1	Lessor shall, when known, notify Lessee of the date on which Delivery is scheduled to occur (the Scheduled Delivery Date ) but in any event (if known) shall:	
 
 	(a)	No later than thirty (30) days prior to the Scheduled Delivery Month, notify Lessee of the week in which the Scheduled Delivery Date is expected to occur; and	
 
 	(b)	No later than seven (7) days prior to the week notified to Lessee pursuant to clause 3.1(a), notify Lessee of the Scheduled Delivery Date.	
 
- 3 -

Lessor shall also give Lessee advance notice of any inspection and predelivery flight tests reasonably in advance of the dates thereof so as to enable Lessee to participate in such inspection and predelivery flight test in accordance with the Participation Agreement.
Pre-Delivery Procedure
 
3.2	Lessor and Lessee will follow the Pre-Delivery Procedure set out in Schedule 7 ( Pre-Delivery Procedure )	
 
3.3	After completion of the Pre-Delivery Procedure and subject to the terms of this Agreement, Lessor shall offer, if the Aircraft meets the Delivery Condition Specification, delivery of the Aircraft at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be absolute, unconditional and irrevocable.	
Delayed Delivery
 
3.4	If owing to a Delayed Delivery Event there is a delay in the delivery of the Aircraft, or Delivery does not occur, then:	

(a)	  	(i)	  	Lessor will not be responsible for any Losses (, including loss of profit) suffered or incurred by Lessee, arising from or in connection with the delay or non-delivery of the Aircraft.;	
			
	  	(ii)	  	Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor in accordance with this Agreement because of any such delay except in the circumstances set out in clause 3.4(a)(iii), clause 3.4(a)(iv) or paragraph 4 of Schedule 7 ( Pre-Delivery Procedure );	
			
	  	(iii)	  	in the case of termination of the Aircraft Purchase Agreement in respect of the Aircraft, Lessor (unless such termination occurred as a result of a breach by Lessor of its obligations thereunder) or Lessee may at any time after such termination terminate this Agreement by giving notice in writing to the other party;	
			
	  	(iv)	  	if the Delivery is delayed for a period of more than ***** after the end of the Scheduled Delivery Month, either party may terminate this Agreement by giving notice in writing to the other party within ten (10) Business Days after the expiration of such period; and	
		
(b)	  	upon any termination pursuant to clause 3.4(a)(iii) or (iv) or paragraph 4 of Schedule 7 ( Pre-3.3 (Delayed Delivery Procedure ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:	
			
	  	(i)	  	pursuant to clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality );	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 4 -

					
			
	  	(ii)	  	Lessee will, on demand, pay to lessor any and all Breakage Costs in accordance with clause 8.4 ( Breakage Costs Indemnity ); and	
			
	  	(iii)	  	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid rent received by Lessor on or prior to the date of such termination, or, if applicable return any Letter of Credit.	
Delayed Acceptance
 
3.5	If (i) the Aircraft meets the Delivery Condition Specification, and (ii) the Lessor Conditions Precedent have been met (or, but for any breach by Lessee of its obligations hereunder, Lessor could be in a position to meet such Lessor Conditions Precedent), and:	
 
 	(a)	Lessee is unwilling or unable to accept delivery of the Aircraft when offered for delivery; and/or	
 
 	(b)	Lessee fails to fulfill any Lessee Conditions Precedent when the Aircraft is offered for delivery,	
Lessee’s obligation to pay Rent shall commence on the date the Aircraft is tendered for delivery in accordance with the terms of this Agreement ( the Rent Commencement Date ). The Aircraft shall remain at the Delivery Location but Lessor shall have no obligation to deliver possession of the Aircraft to Lessee unless and until Lessee fulfils all Lessee Conditions Precedent and accepts delivery of the Aircraft under this Agreement. The Aircraft shall be insured and stored by Lessor between the Rent Commencement Date and the Delivery Date and Lessee shall indemnify Lessor for its actual cost of insurance and storage during this period. The provisions in this clause 3.5 are without prejudice to the rights of Lessor under clause 20 ( Events of Default ).
Risk
3.6 Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.
 
4.	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
- 5 -

5.	Rent	
Rent Periods

5.1	  	(a)     The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	
		
	  	(b)    The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
		
	  	(c)    Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date

5.2	  	(a)     Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
		
	  	(b)    If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent

5.3	  	(a)     Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 ( Rent ), the Term shall be divided into successive periods (each a Relevant Period ).	
		
	  	(b)    The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
		
	  	(c)    Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
		
	  	(d)    Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
where:

*****	  	=	  	*****	  		
				
*****	  	=	  	*****	  		
				
*****	  	=	  	*****	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 6 -

One Time Option to Fix Rent Prior to Delivery

5.4	 	(a)	  	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than 2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
			
	 	(b)	  	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
where:
***** = *****
***** = *****
***** = *****

			
	 	(c)	  	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 (Rent Calculation) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
			
	 	(d)	  	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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6.	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before the date of this Agreement (receipt of which is hereby acknowledged); and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
6.2 No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).
Concerning the Deposit
					
6.3	 	(a)	  	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
			
	 	(b)	  	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 (Set-off) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
Provision of Letter of Credit
6.4 Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit

6.5	 	(a)	  	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
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 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
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 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7. 	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
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8. 	Payments	
Account for Lessee Payments
8.1 All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:

Bank:	  	The Royal Bank of Scotland PLC
Financial Institutions
PO Box 39952
2  1 / 2 Devonshire Square
London
EC2M 4XJ	
		
Account No:	  	*****	
		
Account Name:	  	*****	
		
Sort Code:	  	*****	
		
IBAN BIC/Swift Code:	  	*****	
		
IBAN:	  	*****	
		
Correspondent Bank:	  	American Express International Bank
23 rd Floor
American Express Tower
200 Vesey Street
New York City
NY 10285-2300
USA	
		
Swift Code:	  	*****	
		
ABA:	  	*****	
Default Interest
8.2 If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.
Absolute Obligations

8.3	  	(a)	  	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
			
	  		  	(i)       any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 12 -

 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
8.4 Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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*****
Currency Indemnity
 
8.5	(a) If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
(b) Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.
Application of Payments by Lessor
8.6 If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.
Lessor’s Determination of Amounts Due
8.7 Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.
Business Day Convention
8.8 If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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9. Lessor Covenants
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
9.2 Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
10.	Lessee Covenants	
Performance

10.1	 	(a)	  	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times prior to Delivery (where applicable) and during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
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	 	(b)	  	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
			
	 	(c)	  	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
			
	 	(d)	  	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information – General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its	
 
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 	operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series	
 
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 	of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect, all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such informationas Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
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 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
 
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Registration and Protection
10.5
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, the Financing Parties, if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
“THIS [AIRCRAFT/ENGINE] IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE (“OWNER”) UNDER THAT CERTAIN TRUST AGREEMENT (MSN TBD), AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF OWNER”;
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
 
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Recognition of Rights
10.7 Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.
 
11.	Possession and Sub-Leasing	
Possession
11.1 Lessee shall not, without the prior written consent of Lessor (such consent not to be unreasonably withheld), sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
11.2 Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
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 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
 
11.3		
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 ( Insurance ) and shall contain equivalent restrictions on interchange and replacement ofEngines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
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 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss, Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol), if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
 	(b)	Lessor shall (if necessary in connection with such sub leasing (at no cost to Lessor) co operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and	
 
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 	registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol), if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12.	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
 
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Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection

12.3	 	(a)	  	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	

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 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
12.4 Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
 
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Maintenance Program
12.5 Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided, however, that such request shall be made promptly following receipt of any notice of such change from Lessee.
Engine Thrust and Operational Derate

12.6	 	(a)	  	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
			
	 	(b)	  	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13.	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts

13.1	 	(a)	  	Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
			
	 	(b)	  	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
			
	 	(c)	  	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
			
	 	(d)	  	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
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 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 (Recognition of Rights) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
13.3 Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
 
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provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
13.4 Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
13.5 (a) Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:

				
	 		  	(i)	  	no Default has occurred and is continuing;	
				
	 		  	(ii)	  	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
				
	 		  	(iii)	  	Lessee owns or leases the Other Aircraft and has operational control of it;	
				
	 		  	(iv)	  	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
				
	 		  	(v)	  	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
				
	 		  	(vi)	  	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
 
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Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
13.7 (a) Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
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 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
13.8 Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).
 
14.	Manufacturer’s Warranties	
Use of Warranties

14.1	 	(a)	  	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
			
	 	(b)	  	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims

14.2	 	(a)	  	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or an reimbursement for such remedy.	
	 	(b)	  	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 (Proceeds) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
15.	Indemnities	
General
15.1 Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part	
 
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 	(either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
15.2 Lessor or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).
 
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Contest
15.3 If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such Indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
15.4 The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.
 
16.	Insurance	
Insurances

16.1	  	(a)	  	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
			
	  	(b)	  	The Insurances shall be effected either:	
				
	  		  	(i)	  	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
				
	  		  	(ii)	  	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s	
 
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	  		  		  	current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
16.2 Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.
Change

16.3	  	(a)	  	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
			
	  	(b)	  	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2). Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B or AVN67C (whichever, in the reasonable judgment of Lessor, shall, at any relevant time constitute customary industry practice) in respect of leased aircraft (as at the date hereof). In the event that any provision of AVN67B or AVN67C, as applicable (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B or AVN67C, as applicable, shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
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 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
16.5 Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
Failure to Insure
16.6 If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
 
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Continuing Insurance for Indemnity
16.7 Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.
 
17.	Loss, Damage and Requisition	
Total Loss prior to Delivery
17.1 If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery

17.2	 	(a)	 	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
				
	 		 	(i)	  	ninety (90) days after the Total Loss Date; and	
				
	 		 	(ii)	  	the date of receipt of insurance proceeds in respect of that Total Loss.	
			
	 	(b)	 	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse, representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
			
	 	(c)	 	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
			
	 	(d)	 	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor	
 
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	 		 	may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition

17.3	  	(a)	  	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
				
	  		  	(i)	  	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
				
	  		  	(ii)	  	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
				
	  		  	(iii)	  	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
				
	  		  	(iv)	  	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
18.	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 (EXCLUSION) TO 18.4 (CONFIRMATION) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN
 
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ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
18.1 THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:
 
 	(a)	LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) UNDER THIS AGREEMENT; AND	
 
 	(b)	LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
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 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
18.2 LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT), ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) AND ALL CLAIMS AGAINST LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 (EXCLUSION).
Disclaimer of Consequential Damages
18.3 LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.
No Duties
18.4 LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT)’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.
Confirmation
18.5 LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.
 
19.	Redelivery	
Redelivery

19.1	 	(a)	  	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
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	 	(b)	  	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
			
	 	(c)	  	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
			
	 	(d)	  	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
19.2 If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) from the thirty-first day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
19.3 Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft notwithstanding
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.
Export Documents
19.4 Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.
Acknowledgement
19.5 Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.
 
20.	Events of Default	
Events
20.1 Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
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 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default or termination event (meaning, in each case, after the expiration of any applicable cure period) caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii) above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or
 
 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
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 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 ( Redelivery ); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by	
 
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 	Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (r) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** or the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
(t) Registration Amendments: without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.
Lessor’s Rights

20.2	 	(a)	 	Lessor Rights and Remedies : If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
				
	 		 	(i)	 	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
				
	 		 	(ii)	 	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
				
	 		 	(iii)	 	either:	
					
	 		 		 	(y)	 	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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	 		 		 		 	redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
					
	 		 		 	(z)	 	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into. Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
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 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
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 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
20.3 If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.
 
21.	Taxation	
Gross-up

21.1	  	(a)    All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	

 
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 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor and/or Owner Participant (as applicable and without duplication) by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor and/or Owner Participant (as applicable and without duplication) on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor and/or Owner Participant (as applicable and without duplication), will be equal to the amount that Lessor and/or Owner Participant (as applicable and without duplication) would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor or Owner Participant (as applicable) evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Owner Participant in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Owner Participant in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Owner Participant shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Owner Participant in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Owner Participant shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor and/or Owner Participant (without duplication) to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor and/or Owner Participant (without duplication) shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor and/or Owner Participant (without duplication); or	
 
 	(ii)	oblige Lessor and/or Owner Participant (without duplication) to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant to Pay Taxes
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ) or any successor or similar law from time to time in effect.
Tax Indemnity

21.3  	 	(a)    	 	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
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 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor and/or Owner Participant (without duplication) by any Government Entity in the United States or Ireland or any jurisdiction where Lessor and/or Owner Participant (without duplication) has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor or Owner Participant of any of their respective right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor and/or Owner Participant (without duplication) is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor and/or Owner Participant or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor and/or Owner Participant, as applicable.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax

					
21.4	 	(a)    	 	Without limiting clause 21.3 above, Lessee shall pay to Lessor and/or Owner Participant (without duplication) (or, if permitted by applicable Law and if requested by Lessor and/or Owner Participant (without duplication), Lessee shall pay to the relevant tax authority for the account of Lessor and/or Owner Participant (as applicable)):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor and/or Owner Participant (without duplication) on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s and/or Owner Participant’s (without duplication) entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor and/or Owner Participant (without duplication) such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax

21.5	 	(a)	 	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor and/or Owner Participant (without duplication) or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor and/or Owner Participant (without duplication) against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that	
 
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 	Lessor and/or Owner Participant (without duplication) is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor and/or Owner Participant (without duplication), if available, in respect of payment of any such VAT.	
Information regarding Taxes
21.6 (a) If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments

21.7	 	(a)	    	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
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Notification
21.8 Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.
Information
21.9 Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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*****
 
22.	Assignment and Transfer	
By Lessee
22.1 LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.
Lessor Transfer

22.2 	 	(a)    	 	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer

22.3 	 	(a)    	 	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(d)	*****	
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
23.	Miscellaneous Provisions	
Rights Cumulative, Waivers
23.1 The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
Delegation
23.2 Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.
Expenses
23.3 Lessee shall pay to Lessor and/or Owner Participant (without duplication) on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor and/or Owner Participant (without duplication)’s rights or remedies) incurred or payable by Lessor and/or Owner Participant (without duplication) in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by Lessee with this Agreement (but in the case of such
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor and/or Owner Participant (without duplication)’s rights or remedies under this Agreement (including in connection with any Event of Default).
Set-off

23.4  	 	(a)    	 	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
23.5 The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.
Entire Agreement
23.6 This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.
Rights of Third Parties
23.7 All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, Owner Participant, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement. Without limiting the foregoing, Lessee agrees with Owner Participant that:
 
 	(i)	Owner Participant is an express third party beneficiary of all of the obligations and liabilities of the Lessee under and in conformity with this Agreement, and all notices and communications given by Lessee to Lessor shall also be given to Owner Participant; and	
 
 	(ii)	any approval, consent, waiver, amendment, supplement or other modification of this Agreement shall require the written consent or instruction of the Owner Participant to be binding against the Lessor, and Owner Participant agrees that, where Lessor has agreed to give or not unreasonably withhold such consent or instruction, it shall give such consent or instruction or not unreasonably withhold such consent or instruction. For the avoidance of doubt, any instructions for an approval, consent, waiver, amendment, supplement or other modification of this Agreement issued by the Owner Participant to Lessor shall be binding on Lessor.	
 
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23.8 Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.
23.9 All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.
Counterparts
23.10 This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.
Language
23.11 All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.
Confidentiality
23.12 This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement (provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.
Invalidity of any Provision
23.13 If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
 
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Survival
23.14 All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.
Further Assurance

23.15	 	(a)    	 	Each of the parties agree to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
			
	 	(b)    	 	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
No Brokers
23.16 Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).
Chattel Paper
23.17 To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.
True Lease

23.18	  	The parties intend and agree that this Agreement:	
			
	  	(a)	  	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
			
	  	(b)	  	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
			
	  	(c)	  	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
		
	  	Lessee shall not file a tax return that is inconsistent with the provisions of this clause.	
 
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Know Your Customer/OFAC Compliance

23.19	  	Anti-Terrorism Law:	
			
	  	(a)	  	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates is in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
			
	  	(b)	  	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates is any of the following:	
				
	  		  	(i)	  	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
				
	  		  	(ii)	  	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
				
	  		  	(iii)	  	a person with which Lessor and/or Owner Participant (without duplication) is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
				
	  		  	(iv)	  	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
				
	  		  	(v)	  	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
			
	  	(c)	  	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
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23.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor and/or Owner Participant (without duplication) to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
23.21	Statements of Owner Trustee: The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided, however, that this clause 23.21 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided further, that nothing contained in this clause 23.21 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate. The foregoing provisions of this clause 23.21 shall survive the termination of this Agreement;	
 
24.	Notices	
24.1 Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day),	
 
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provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.
 
24.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:

Address:	 	Wells Fargo Bank Northwest, National Association
299 South Main Street, 12th Floor
Salt Lake City, Utah 84111
 
Attention: Corporate Trust Services
Fascimile: +1 (801) 246-5053
 
With a copy to:
 
RBS Aerospace Limited
IFSC House
IFSC
Dublin 1
Ireland	
		
Attention:	 	Head of Transaction Management	
		
Facsimile:	 	+ 353 1 859 9230	
To Lessee at:

Address:	 	Prolongación Paseo de la Reforma No. 490
Piso 1 (Edificio GE)
Colonia Santa Fé Peña Blanca
Del. Alvaro Obregón
Mexico D.F. 01012
Mexico	
		
Attention:	 	General Counsel	
		
Facsimile:	 	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
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25.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
25.1 PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.
Jurisdiction
25.2 Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.
Process Agents

25.3  	 	(a)    	 	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
 
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Waiver of Objections
 
25.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
25.5 This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.
Waiver of Sovereign Immunity and Other Defenses
 
25.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
 
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Waiver of Jury Trial
25.7 EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
26.	Owner Participant and Lessee Undertakings:	
26.1 By its execution of the Owner Participant Aircraft Lease Agreement Signature Page hereto, Owner Participant makes the agreements set forth thereon or in this Agreement and the representations and warranties in Part 3 of Schedule 3 hereof.
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.
SIGNED on behalf of: 
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Owner Trustee 

Name:	 	/s/ John Croasmun	
		
Title:	 	Vice President	
SIGNED on behalf of:
CONCESIONARIA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
This signature page forms part of that certain Aircraft Lease Agreement made as of January 25, 2008 between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , as Lessor and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , as Lessee, relating to the leasing of one A320-XXX aircraft bearing manufacturer’s serial number 3672.
 
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OWNER PARTICIPANT AIRCRAFT LEASE AGREEMENT (MSN 3672)
SIGNATURE PAGE
The undersigned Owner Participant hereby instructs the Owner Trustee to enter into this Agreement and further agrees as follows:
 
 	a.	so long as no Event of Default has occurred and is continuing, neither Owner Participant nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Owner Participant of its or Lessor’s rights in accordance with this Agreement will not however constitute such an interference;	
 
 	b.	it will comply with clause 22.3 of this Agreement with respect to a transfer of its interest under the Trust Agreement;	
 
 	c.	throughout the term of this Agreement, and subject to the terms and conditions of this Aircraft Lease Agreement, it will cause Lessor to pay and perform when due all of the obligations of Lessor under this Agreement (the “ Lessor Obligations ”) and to the extent, if any, that Lessor fails to pay or perform any Lessor Obligation when due, and subject to the terms and conditions of this Agreement, Lessee shall have a direct right of action against Owner Participant for the payment or performance of such Lessor Obligation; and	
 
 	d.	it will be bound by this Agreement.	

SIGNED on behalf of:	
RBS AEROSPACE LIMITED	
Name:	 	 	
		
Title:	 	 	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Bank Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates is a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement Reference RBS A320-2005 between Owner Participant and Airbus insofar as it relates to the Aircraft;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer, provided that it shall retain its EASA / JAA approval including for those which (1) Maintenance Reserves are provided and (2) for end of lease airframe C check maintenance work-scope package;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document
 
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or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means, without duplication, all costs, losses, premiums, penalties or out-of-pocket expenses, if any, incurred or suffered by Lessor or Owner Participant, any Affiliate of Lessor or Owner Participant or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or Owner Participant or their respective Affiliates or otherwise in connection with the financing of Lessor’s or Owner Participant’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor or Owner Participant pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on November 16, 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****;
Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft; or	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor) and in the condition provided for in the applicable agreement and this Agreement, or;	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor); or	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft; or	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Toulouse, France, Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****;
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars, $ and US$ means the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed.
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change );
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions );
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
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 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor or Owner Participant who provides finance to Lessor or Owner Participant in connection with Lessor’s or Owner Participant’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor or Owner Participant to Lessee as providing finance to Lessor or Owner Participant in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate, organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
 
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Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means *****, or (i) if a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, ***** or (ii) such other base agreed by Lessor;
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, Owner Participant, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authority and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, Owner Participant, any Affiliate of Lessor or Owner Participant or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or Owner Participant or their respective Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
 
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Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income.
Mexico means the United Mexican States.
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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OEM means in relation to any Part or part the original equipment manufacturer of such Part or part; 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income.
Mexico means the United Mexican States.
Minimum Liability Coverage means US$600,000,000 for general liability, and $500,000,000 for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Participation Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to ***** aircraft bearing manufacturer’s serial number 3045, 3069, 3253, 3279 and 3450, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor, or Owner Participant, including a trust of which the beneficiary is Owner Participant or an Affiliate of Owner Participant) and Lessee (or any Affiliate of Lessee); provided, however, that solely for the purpose of Clause 20.1(e)(iv), Other Agreements includes any aircraft lease agreement or other agreement managed or serviced by Owner Participant or any Affiliate of Owner Participant ;
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Owner Participant means RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is at IFSC House, IFSC, Dublin 1, Ireland;
Owner Trustee means Wells Fargo Bank Northwest, National Association, as national banking association, in its capacity as Owner Trustee;
Parent means Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Participation Agreement means the participation agreement dated on even date herewith between Owner Participant and Lessee, including the consent and agreement thereto between Owner Participant, Lessee and the Manufacturer in respect of the Aircraft in the Agreed Form;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees.	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
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 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as	
 
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 	operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date.	
Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
 
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Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date notified by Lessor to Lessee pursuant to clause 3.1(Scheduled Delivery Date);
Scheduled Delivery Month means November 2008;
Scheduled Delivery Week means the week notified by Lessor to Lessee pursuant to clause 3.1;
Scheduled Expiry Date means the day immediately before the day falling 96 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
 
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Tax Indemnitee means Lessor, Owner Participant, their respective Affiliates and each Financing Party, if any;
Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
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 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss;	
Trust Estate has the meaning set out in the Trust Agreement (MSN 3672) for that certain A320-XX Aircraft dated on or about January 25, 2008 between Owner Trustee and Owner Participant; and
UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage

1.2	  	(a)	  	   References in this Agreement to:	
 
 	(i)	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
 
 	(ii)	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
 
 	(iii)	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
 
 	(iv)	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
 
 	(v)	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
 
 	(vi)	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
 	(b)	Headings are for ease of reference only.	
 
 	(c)	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor and Owner Participant on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g)	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
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 	(p)	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, if such law or a successor or similar law is in effect, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) or any similar law to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law (or any successor or similar law), including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor, in its capacity and (but only as provided in clause (b) and (c) below to the extent that it relates to the Owner Trustee) as Owner Trustee, represents and warrants to Lessee and Owner Participant on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor, in its individual capacity, is a national banking association duly organised and validly existing in good standing under the laws of the United States, has full corporate power and authority to carry on its business as so conducted, has the corporate power and authority to execute and deliver the Trust Agreement, has the corporate power and authority to carry out the terms of the Trust Agreement and has the corporate power and authority to execute and deliver and to carry out the terms of this Agreement;	
 
 	(b)	Power and Authority : this Agreement has been duly authorized by all necessary corporate action on the part of Owner Trustee, has been duly executed and delivered by Owner Trustee and constitutes the valid, legal and binding obligation of Owner Trustee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(c)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is binding upon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets; and	
 
 	(d)	Approvals and Consents : no consent, approval, order or authorization of giving of notice to, or registration with, or taking of any other action in respect of any Utah state or local governmental authority or agency or any United States federal governmental authority or agency regulating the trust powers of the Owner Trustee in its individual capacity is required for the execution and delivery of or the carrying out by, the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or by the Trust Agreement, other than any such consent, approval, order, authorization registration, notice or action as has been duly obtained, given or taken.	
 
3.	Owner Participant’s Representation and Warranties	
Owner Participant hereby represents and warrants to Lessee and Owner Trustee that as of the Effective Time:
 
 	(a)	Status : Owner Participant is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement;	
 
 	(b)	Power and Authority : this Agreement has been duly authorized by all necessary corporate action on the part of Owner Participant, has been duly executed and delivered by Owner Participant and constitutes the valid, legal and binding obligation of Owner Participant enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity; and	
 
 	(c)	Non-conflict : the entry into and performance by Owner Participant of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Owner Participant; or (ii) conflict with the constitutional documents of Owner Participant; or (iii) conflict with or result in default under any document which is binding upon Owner Participant or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
4.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
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Schedule 3
CONDITIONS PRECEDENT
Conditions Precedent to be satisfied by the Lessee
1. Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
- 90 -

Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
- 91 -

 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexican Asset Tax : if such law or any successor or similar law is in effect, evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ) or any successor or similar law then in effect, in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in substantially the condition required under Schedule 6 hereof; (ii) Lessor shall have received (x) a certified	
 
- 92 -

 	copy of the full export certificate of airworthiness in relation to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator’s certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Aircraft Purchase Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); and (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents including Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions.	
All opinions, certificates issued by Lessee, letters and instructions described herein as addressed to Lessor shall also be addressed to Owner Participant.
2. Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.1 is not satisfied on the date of execution of this Agreement and/or any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.
3. Conditions Precedent to be Satisfied by Owner Participant : Lessee’s obligations to accept delivery and lease the Aircraft from Owner Participant are subject to receipt by Lessee from Owner Participant on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Owner Participant; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Owner Participant approving the terms of, and the transactions contemplated by, this Agreement, resolving that Owner Participant enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement; and	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Owner Participant’s status as a resident of Ireland for tax purposes.	
 
- 93 -

Schedule 4
*****

 	  	*****	 	  	*****	 	  	*****	 	
Period 1	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 2	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 3	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 4	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 5	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 6	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 7	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 8	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 9	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 10	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 11	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 12	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 13	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 14	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 15	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 16	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 94 -

Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, Owner Participant, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 95 -

 	(c)	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
- 96 -

 	(f)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated January 25, 2008 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 97 -

 	(j)	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 98 -

Schedule 6
*****
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and substantially comply with the following specifications (which description shall not be deemed a covenant, representation, warranty or guaranty to Lessee with respect to the Aircraft, all of which are waived and disclaimed as provided in the Agreement):

Specification	  		
		
General Model	  	A320-XXX	
Engine Type / SLST	  	V2527M A5	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #s	  	3672	
Year Built	  	2008 (November)	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
WEIGHTS, FUEL & Max Taxi	  	77,000 kgs	
CARGO VOLUME Max Take Off	  	77,000 kgs	
Max Zero Fuel	  	62,500 kgs	
Max Landing	  	66,000 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration	  	174 - All Economy	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lavs are vacuum type)	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. and Aft Galley G1 and G5	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4” retractable LCD monitors.	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 99 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	  	Equipment Supplier	  	Part Number	
			
3 Radio Tuning Panels	  	THALES AVIONICS	  	C12848CA01	
2 HFS-900 HF Data Radios	  	Collins	  	822-0330-020	
3 VHF-900 VHF Data Radios	  	Collins	  	822-1047-030	
1 SELCAL Control Panel	  	TEAM	  	BC2065C	
1 SELCAL Decoder	  	Coltech	  	1200008-000	
1 Communications Mgmt Unit	  	N/A	  	N/A	
1 CVR (2 hour)	  	Allied Signal Avionic	  	980-6022-001	
1 DFDAU	  	SAGEM	  	ED48A100	
1 DFDR	  	Honeywell	  	980-4700-042	
1 Accelerometer	  	AMETEK AEROSPACE	  	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	  	Collins	  	22-1152-121	
2 Low Range Radio Altimeter	  	Collins	  	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	  	Collins	  	822-1710-202	
1 Weather Radar Control Panel	  	Collins	  	622-5130-820	
1 TCAS II Computer	  	Honeywell	  	7517900-10003	
2 ATC Mode S Transponder	  	Collins	  	822-1338-021	
1 TCAS Control Panel	  	THALES AVIONICS	  	C12404AB02	
2 VOR/Marker Beacon Receiver	  	Collins	  	822-0297-020	
2 DME Interrogator	  	Collins	  	822-0329-020	
2 Multipurpose CDU	  	Honeywell	  	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	  	Honeywell	  	C13042BA01	
1 EGPWS Computer	  	Allied Signal	  	965-1676-002	
 
- 100 -

			
EPAC Ref.	  	Title	
	  	Introduction of A319-100 Standard Specification at Issue 5	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats - all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take - off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 77 T/ MLW 64.5 T / MZW 61 T	
03.20.400/02	  	Design weights increased to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier - English below (vertical) and second language (Horiz.) - Airsignal	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine - bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steering markers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external markings	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation - BFE	
23.11.115/14	  	Installation of one HF system - COLLINS 900 - DIGITAL ATENNA COUPLER - BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit hand microphone alternate equipment – Holmberg	
 
- 101 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system- PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) – PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
23.73.144/01	  	Flashing steward call light	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout TBA	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment – full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double- sided adhesive tape	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change 1)	
25.35.132/02	  	Installation of non-electrical galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	Wing anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
31.60.120/01	  	Installation of LCD EIS2 – Thales Avionics	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signaled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACARB	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
 
- 102 -

			
EPAC Ref.	  	Title	
		
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment – ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion & penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Windows	
56.10.102/02	  	Cockpit alternate front windows – SAINT-GOBAIN SULLY	
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engines	
72.00.119/XX	  	Engines selection	
 
- 103 -

Schedule 7
PRE-DELIVERY PROCEDURE
1. Prior to the Delivery Date, subject to the requirements of any purchase agreement in respect of the Aircraft, Lessor shall give Lessee an opportunity to inspect the Aircraft and to participate as observer with up to two representatives of Lessee on the Aircraft in a demonstration flight of the Aircraft (not to exceed two hours’ duration) at such location as Lessor shall notify to Lessee to ensure that the Aircraft meets the Delivery Condition Specifications.
2. Lessee shall enter into the Participation Agreement, in the form agreed between Owner Participant and Lessee on or prior to the date of this Agreement, which shall govern, inter alia, the rights of Lessee pursuant to this clause 2.
3. If Lessee notifies Lessor of any non-conformity of the Aircraft with the Delivery Condition Specification observed during the inspection or demonstration flight (and such non-conformity is recorded in the flight log in the case of a demonstration flight) Lessor will (subject to paragraph 4) correct or procure the correction of such non-conformity as promptly as practicable and make the Aircraft available for re-inspection by Lessee.
4. If Lessor notifies Lessee that it does not intend to correct any defect because in the opinion of Lessor it is impracticable or prohibitively expensive to do so, either Lessor or Lessee will be entitled to terminate this Agreement by written notice to the other party and the provisions of clause 3.4(b) shall apply.
Indemnity
5. Lessee is responsible for and shall indemnify and hold harmless the Indemnitees from and against all Losses arising from death or injury to any observer representative or any employee of Lessee in connection with any demonstration flight or inspection of the Aircraft by Lessee.
Licenses
6. It is the responsibility of Lessee to obtain all licenses, permits or approvals necessary to export or transport the Aircraft from the Delivery Location.
7. Lessor will provide Lessee with any required data and information relating to the Aircraft or Lessor for the purposes of obtaining such licenses, permits or approvals.
 
- 104 -

Schedule 8
*****
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 105 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 106 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 107 -

Schedule 9
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 108 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 109 -

Schedule 11
*****
*****
 
1.	List of manuals	
Basic:
 
1.	Airplane Flight Manual	
 
2.	Flight crew operating Manual	
 
3.	Trim Sheet	
 
4.	Quick Reference Handbook	
 
5.	Weight and Balance Manual	
 
6.	Performance Engineer’s Programs	
 
7.	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xxx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
 
8.	Performance Programs Manual	
 
9.	Aircraft Maintenance Manual	
 
10.	Wiring Diagram Manual	
 
11.	Power Plant Build-up Manual	
 
12.	Engine Brochures	
 
13.	APU Log Book (with manufacturer delivery documents)	
 
14.	Illustrated Parts Catalogue	
 
15.	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
 
16.	Structural Repair Manual	
 
17.	Nacelle Structural Repair Manual	
 
18.	Engine Maintenance Manual	
 
19.	Illustrated Parts catalogue (power-plant)	
 
20.	Master Minimum Equipment List	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 110 -

21.	Maintenance Planning Document	
 
22.	Component Maintenance Manuals (Vendor and Manufacturer)	
 
23.	Engineering and Tooling Drawings	
 
24.	Maintenance Facility Planning	
 
25.	Support Equipment Summary	
 
26.	Tool and Equipment bulletins	
 
27.	Tools and equipment Drawings	
 
28.	Tools and equipment index	
 
29.	Illustrated tools and Equipment Manual	
 
30.	Technical Publications Combined Index	
 
31.	Trouble shooting Manual	
 
32.	Component Documentation Status	
 
33.	Component Evolution List	
 
34.	Cable Fabrication Manual	
 
35.	Standards Manual	
 
36.	Parts usage	
 
37.	Schedule (drawing Nomenclature)	
 
38.	Process and Materials Specification	
 
39.	Installation and Assembly Drawings	
 
40.	Airplane Characteristics for Airport Planning	
 
41.	ATA breakdown index	
 
42.	CADETS (technical Publications Training)	
 
43.	Aircraft Recovery Manual	
 
44.	Crash Crew Chart	
 
45.	Cargo Loading system Manual	
 
46.	List of applicable publications	
 
- 111 -

47.	List of radio active and hazardous elements	
 
48.	Livestock transportation Manual	
 
49.	Service Bulletins	
 
50.	Service information letters	
 
51.	Supplier Product Support Agreements	
 
52.	Transportability Manual	
 
53.	Vendor Information Manual	
 
54.	Vendor Information Manual for Ground Support Equipment	
 
55.	Maintenance Review Board	
 
56.	Non Destructive Testing Manual	
 
57.	Power Plant Build up Manual	
 
58.	Aircraft Schematics Manual	
 
59.	Aircraft Wiring Lists	
 
60.	Aircraft Wiring Manual	
 
61.	Component Location Manual	
 
62.	Consumable Material List	
 
63.	Duct Repair Manual	
 
64.	Electrical Load Analysis	
 
65.	Electrical Standards Practices Manual	
 
66.	Electrical Standards Practices Booklet	
 
67.	Fuel Pipe Repair Manual	
 
68.	Maintenance Planning Task Cards	
 
- 112 -

*****
The Technical Records and Manuals shall be in English, shall include those as of the Delivery Date, shall include those required during the Term to comply with EASA Regulation 2042 and JAR OPS 1 and shall otherwise be as detailed below.
All documents shall be presented in a good, legible condition and, if applicable, sorted and/or bound together in a manner appropriate to the document type, loose page documents shall be grouped together in a secure manner and in the correct numerical or chronological order. Distinct groups, packages or boxes of documents shall be numbered and labeled according to their content and a master index of all packages or boxes shall be provided.
 
1.	CERTIFICATES	
 
 	(a)	Certificate of Airworthiness (current).	
 
 	(b)	Current Aircraft Registration Certificate.	
 
 	(c)	Original Export Certificate of Airworthiness from State of Manufacture.	
 
 	(d)	Current Export Certificate of Airworthiness from State of Registration.	
 
 	(e)	Export Certificate of Airworthiness for fitted engines if not original to the Aircraft (Copy).	
 
 	(f)	Radio Station License (current).	
 
 	(g)	Noise certificate (current).	
 
 	(h)	Registration cancellation notice (if issued by State of Registration).	
 
 	(i)	Air Operator Certificate (Lessee).	
 
 	(j)	RVSM, B-RNAV, P-RNAV, ATC transponder, Altimeter and pitot / static check certification as applicable and as required by the FAR part 43 and 91.	
 
 	(k)	Certificate of most recent Release to Service (copy).	
 
 	(l)	Certificate of Sanitary Construction (Galleys) if applicable.	
 
 	(m)	All Supplemental Type Certificates (STC) applied to the Aircraft (Copies).	
 
2.	AIRCRAFT STATUS SUMMARIES	
All status summary document to be signed and dated on final page by the Lessee’s Quality Manager and all other pages initialed.
 
 	(a)	Aircraft record of flight time and cycles (listing accumulated hours and cycles on specific dates).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 113 -

 	(b)	Airworthiness Directive Applicability and Compliance status Reports (Airframe, Engines and Appliances) Format/content as follows:	
 
 	(i)	Airworthiness Directives listed in a chronological order.	
 
 	(ii)	All Airworthiness Directives applicable to the Aircraft, Engine, APU or Aircraft Appliance type listed as follows:	
 
 	(A)	AD number.	
 
 	(B)	AD effective date.	
 
 	(C)	Title.	
 
 	(D)	Applicability status.	
 
 	(E)	Accomplishment status.	
 
 	(F)	Date or hours /cycles at last accomplishment action.	
 
 	(G)	Date or hours /cycles of next action due (if applicable).	
 
 	(c)	Manufacturer’s Airworthiness Directive compliance Status at time of Manufacture.	
 
 	(d)	Manufacturer Service Bulletin Compliance Report for the Aircraft, Engine, APU and the Aircraft Appliances. Format/content as follows:	
 
 	(i)	SB number.	
 
 	(ii)	SB effective date.	
 
 	(iii)	Title.	
 
 	(iv)	Applicability status.	
 
 	(v)	Accomplishment status.	
 
 	(vi)	Date or hours /cycles at last accomplishment action.	
 
 	(vii)	Date or hours /cycles of next action due (if applicable).	
 
 	(e)	Corrosion Prevention and Control Program Task Status (showing last accomplishment and next due for each task) if applicable, listing the Corrosion Prevention and Control Program Tasks in a numerical order.	
 
- 114 -

 	(f)	Aging Aircraft Inspection and Modification Program tasks status (showing task number, termination status as applicable, last accomplishment and next due for each item if open) if applicable. Manner of presentation as follows:	
 
 	(g)	List of Operator implemented Modifications Incorporated (Engineering Orders applied to Airframe, Engines and Appliances). Format/content as follows:	
 
 	(i)	Operator Modifications listed in numerical order.	
 
 	(ii)	Cross reference document between Operators modification number and original engineering source /vendor document provided.	
 
 	(iii)	Air Authority/FAA/JAA/State of Manufacture type certificate data approval for modification provided.	
 
 	(h)	Structural Repair File with a detailed structural Map showing exact location of all external repairs and damages indicating their status in accordance with the Manufacturers structural repair manual showing general size and location of each external repair and basis for approval). Format/content as follows:	
 
 	(i)	Records of accomplishment or compliance of each indexed repair provided as follows:	
 
 	(A)	Original signed /certified “dirty finger print” records.	
 
 	(B)	Presented in binder (or binders).	
 
 	(C)	Numbered and sorted by index number.	
 
 	(ii)	Records for Major Repairs or repairs that do not conform to the Manufacturer’s Structural Repair Manual accompanied by the appropriate Engineering Approval document issued by the State of Manufacture Airbus RAS.	
 
 	(i)	List of Major Alterations and Supplemental Type Certificate’s Incorporated (STC’s) (with reference to approved documentation used to accomplish).	
 
 	(j)	List and Status of Airframe Life Limited Parts (if any) with full back to birth traceability support documents. Format/content as follows:	
 
 	(i)	Each Life Limited Part fitted to the Airframe listed by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
- 115 -

 	(k)	List and Status of Landing Gear Life Limited Parts for each Landing Gear with full back to birth traceability support documents Format/content as follows:	
 
 	(i)	Each Life Limited Part fitted to Landing Gear listed by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
 	(l)	List and Status of Engine Life Limited Parts with full back to birth traceability support documents. Format/content as follows:	
 
 	(i)	Each Life Limited Parts fitted to the engine identified by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
- 116 -

 	(m)	List and Status of Auxiliary Power Unit (APU) Life Limited Parts (if any) with full back to birth traceability support documents Format/content as follows:	
 
 	(i)	Life Limited Part fitted to the APU identified by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
 	(vi)	Check/Inspection History and Current Status.	
 
 	(n)	List and Current Status of Time-Controlled Components Format/content as follows:	
 
 	(i)	Time-Controlled Components fitted to the Aircraft listed by part number and unique serial number.	
 
 	(ii)	Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) provided for Time-Controlled Components.	
 
 	(o)	Inventory of Installed Serialized On-Condition/Condition Monitored Components. Format/content as follows:	
 
 	(i)	Serialized Components fitted to the Aircraft listed by part number and unique serial number.	
 
 	(ii)	Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) provided for Serialized Components.	
 
 	(p)	List of Deferred Maintenance Items (if no Deferred Maintenance Items are “open” at transfer, a signed statement to that effect is required).	
List and Status of any Out-of-Phase Checks, Special Inspection Requirements, Time Limited Repairs, etc. (If none exist or if requirements are incorporated into aircraft status reports, then a signed statement to that effect is required.)
 
 	(q)	Supplemental Structural Inspection (SSID) Status (if applicable) (showing last accomplishment and next due for each task). Format/content as follows:	
 
 	(i)	listing the Supplemental Structural Inspections in a numerical or chronological order as applicable.	
 
- 117 -

3.	AIRCRAFT MAINTENANCE RECORDS	
 
 	(a)	Aircraft Flight and Maintenance Log Sheets (minimum of operation back to previous highest level Airframe Structural Check).	
 
 	(b)	Airframe inspection, maintenance, modification and repair documents with maintenance and/or inspection signatures (as required) and description of work done.	
 
 	(c)	Last “A”, and all systems “C” Checks, and Airframe 6 Year Block Structural Check and Airframe 12 Year Block Structural Check (or equivalents) (In the event that a check is performed in phases, all phases necessary to constitute a complete block check are required. In the event that check content varies by multiples of the check, all multiples necessary to constitute a complete cycle are required).	
 
 	(d)	Airworthiness Directive, Service Bulletin and Modification compliance documents including engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority.	
 
 	(e)	Corrosion Prevention and Control Program compliance documents and inspection findings as applicable including records of accomplishment or compliance provided (the original signed /certified “dirty finger print” workcards).	
 
 	(f)	Documentation for Operator Modifications such as engineering orders, drawings, FAA form 8110-3, Supplemental Type Certificates, Master Change Notice, FAA type certificate conformity approval from manufacturer or approved design organization etc., as necessary to define work done, certification basis, and approval authority.	
 
 	(g)	Supporting Documentation for Operator Modifications such as engineering orders, drawings, FAA form 8110-3, Supplemental Type Certificates, Master Change Notice, FAA type certificate conformity approval from manufacturer or approved design organization etc., as necessary to define work done, certification basis, and approval authority.	
 
 	(h)	Aircraft weight and balance records (including weight change ledger, most recent weighing report and individual flight control weight and balance data).	
 
 	(i)	Test Flight Reports.	
 
 	(j)	X-Ray Inspection findings (pictures/film) as applicable.	
 
4.	AIRCRAFT HISTORY RECORDS	
 
 	(a)	Service Difficulty Reports, Lessee System Reliability reports and equivalent.	
 
 	(b)	Accident and Incident Reports (if none, then a signed “no Incident /Accident” statement from operator’s Quality Control Manager).	
 
 	(c)	Aircraft Log Book(s) and Aviation Authority Operation and Modification Log Book(s) (as applicable).	
 
- 118 -

5.	ENGINE RECORDS (FOR EACH ENGINE)	
Each status summary signed and dated on the final page by the Lessee’s Quality Manager and all content pages initialed.
 
 	(a)	Certified statement as to following:	
 
 	(i)	time and cycles since new	
 
 	(ii)	time and cycles since overhaul on each engine module	
 
 	(iii)	flying hours and cycles in lessee’s operation	
 
 	(b)	Engine Master Record (record of installation and removal and accumulated flight time and cycles for Engine and each module installed at Redelivery Date)	
 
 	(c)	List of Operator Modifications Incorporated, if any including supporting documentation with Manufacturer approval	
 
 	(d)	List of all Major Repairs and Alterations, if any	
 
 	(e)	Check/Inspection Status	
 
 	(f)	Accessory Status sheet with certified TSO for each rotable item installed	
 
 	(g)	Last overhaul tags (or copies) for each of the accessory rotables	
 
 	(h)	Engine Build Specifications	
 
 	(i)	(Repair, overhaul and inspection documents such as JAA form 1, FAA 8130-3 and FAA form 337 for each shop visit (minimum acceptable is shop visit history through last Engine Performance Restoration shop visit and if different, last overhaul of each module)	
 
 	(j)	List of current Line Replaceable Units (LRU)/QEC Items missing from engine (if applicable for a spare Engine redelivery or off-wing Engine)	
 
 	(k)	Engine Condition Monitoring Report for the three (3) months prior to redelivery	
 
 	(l)	Last three (3) months of aircraft flight/technical logs to which engine was fitted	
 
 	(m)	Reason for last engine removal, engine change paperwork and date of engine removal	
 
 	(n)	Most recent certified engine borescope (videotaped)	
 
 	(o)	Most recent fuel, oil sampling, magnetic chip detector and vibration survey results	
 
 	(p)	Most recent on-wing ground performance run specifying engine OATL (outside air temperature limit) at rated thrust	
 
- 119 -

 	(q)	Last certified Test Cell Run specifying engine OATL	
 
 	(r)	Engine Oil used	
 
 	(s)	Any incidents during operation since last performance restoration shop visit with action taken i.e. IFSD/FOD/oil loss etc.	
 
6.	APU RECORDS	
 
 	(a)	Certified statement as to following:	
 
 	(i)	hours and cycles since new	
 
 	(ii)	hours and cycles since overhaul	
 
 	(iii)	hours and cycles since hot section inspection	
 
 	(iv)	lessee’s method for APU time accrual i.e. 1:1 with aircraft hours and cycles	
 
 	(b)	APU Master Record (record of installation and removal and accumulated time and cycles)	
 
 	(c)	List of Operator Modifications Incorporated, if any including supporting documentation with Manufacturer approval	
 
 	(d)	(Accessory Status Sheet with certified time since overhaul for each rotable item installed	
 
 	(e)	Last overhaul tags (or copies) for each of the accessory rotables	
 
 	(f)	Certified and Updated APU Log Book from new (with manufacturer delivery documents)	
 
 	(g)	Repair, overhaul and inspection documents such as FAA Forms 337 (minimum acceptable is shop visits through last APU Performance Restoration /Hot section Inspection/ overhaul)	
 
 	(h)	Documents demonstrating installation and full traceability back to birth (to new) for each Life Limited Part	
 
 	(i)	List of Line Replaceable Units (LRU)/QEC Rotable items missing from APU (if any for any spare APU redelivery)	
 
 	(j)	Last three (3) months of aircraft flight/technical logs to which APU was fitted	
 
 	(k)	Reason for last APU removal, removal paperwork and date of APU removal	
 
 	(l)	Most recent certified APU borescope report (videotape)	
 
 	(m)	Most recent APU on-wing health check datasheets	
 
 	(n)	Last certified test cell run	
 
- 120 -

 	7.	MISCELLANEOUS TECHNICAL DOCUMENTS	
 
 	(a)	Maintenance Program Specifications including a cross-reference to Manufacturer’s maintenance planning document	
 
 	(b)	Reference material necessary for interpretation of status summaries, i.e. Operator part numbers Cross Reference to Manufacturer’s part numbers	
 
 	(c)	Interior configuration drawings as follows:	
 
 	(i)	L.O.P.A.	
 
 	(ii)	Emergency Equipment Locations	
 
 	(iii)	Galley Drawings	
 
 	(iv)	Cargo Loading System layout	
 
 	(d)	Aircraft Readiness Log (or parts configuration Status document)	
 
 	(e)	Loose Equipment Inventory	
 
 	(f)	Seat, cushion and fabric cover Material Burn Test documents for JAR25.853	
 
 	(g)	Flight Data Recorder – Print / Copy of Last Read-Out with all exceedences (if any) identified and parameter accuracy confirmed	
 
8.	AIRCRAFT STATUS SUMMARIES	
 
 	(a)	Airworthiness Directive Applicability and Compliance status at time of Manufacture	
 
 	(b)	Manufacturer Service Bulletin Compliance Report for the Aircraft, Engine, APU and the Aircraft Appliances	
 
 	(c)	[Airbus A [xxx-xxx] Standard Specification J [xxx xxxxx] issue [x], revision [x] dated [xx xx xxx] and as amended to include all Lessee standard SCNs (Specification Change Notices)]	
 
 	(d)	Loose Equipment Inventory	
 
 	(e)	Seat, cushion and fabric cover Material Burn Test documents for JAR 25/FAR 25.853 (If BFE)	
 
- 121 -

Schedule 12
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 122 -

Schedule 13
*****
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 123 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 124 -

*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 125 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 127 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 129 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 130 -

Schedule 14
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 131 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 132 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 133 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 134 -

Schedule 15
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 135 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 136 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 137 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.21
Execution Version
Dated as of January 25, 2008
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE
as Lessor
and
CONCESIONARIA VUELA COMPAÑIA DE AVIACION S.A. DE C.V.
as Lessee

 
AIRCRAFT LEASE AGREEMENT
relating to the leasing of one A319-133 aircraft
bearing manufacturer’s serial
number 3450

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
1.	 	Interpretation	  	 	1	  	
			
2.	 	Agreement to Lease	  	 	1	  	
			
3.	 	Delivery	  	 	1	  	
			
4.	 	Expiry Date	  	 	3	  	
			
5.	 	Rent	  	 	3	  	
			
6.	 	Deposit	  	 	5	  	
			
7.	 	Maintenance Rent	  	 	9	  	
			
8.	 	Payments	  	 	9	  	
			
9.	 	Lessor Covenants	  	 	13	  	
			
10.	 	Lessee Covenants	  	 	13	  	
			
11.	 	Possession and Sub-Leasing	  	 	20	  	
			
12.	 	Technical Reporting, Records, Inspection, Maintenance and Repair	  	 	23	  	
			
13.	 	Replacement and Interchange of Engines and Parts	  	 	26	  	
			
14.	 	Manufacturer’s Warranties	  	 	30	  	
			
15.	 	Indemnities	  	 	31	  	
			
16.	 	Insurance	  	 	33	  	
			
17.	 	Loss, Damage and Requisition	  	 	36	  	
			
18.	 	Disclaimers	  	 	37	  	
			
19.	 	Redelivery	  	 	39	  	
			
20.	 	Events of Default	  	 	41	  	
			
21.	 	Taxation	  	 	48	  	
			
22.	 	Assignment and Transfer	  	 	55	  	
			
23.	 	Miscellaneous Provisions	  	 	56	  	
			
24.	 	Notices	  	 	61	  	
			
25.	 	Governing Law Jurisdiction and Waiver of Jury Trial	  	 	62	  	
			
26.	 	Owner Participant and Lessee Undertakings	  	 	65	  	
		
Schedule 1 DEFINITIONS AND CONSTRUCTION	  	 	68	  	
		
Schedule 2 REPRESENTATIONS AND WARRANTIES	  	 	84	  	
		
Schedule 3 CONDITIONS PRECEDENT	  	 	88	  	
		
Schedule 4 *****	  	 	92	  	
		
Schedule 5 INSURANCE REQUIREMENTS	  	 	93	  	
		
Schedule 6 *****	  	 	97	  	
		
Schedule 7 [INTENTIONALLY LEFT BLANK]	  	 	102	  	
		
Schedule 8 *****	  	 	103	  	
		
*****	  	 	103	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- i -

TABLE OF CONTENTS
(continued)

 	 	 	  	Page	 	
		
Schedule 9 *****	  	 	106	  	
		
Schedule 10 [INTENTIONALLY LEFT BLANK]	  	 	107	  	
		
Schedule 11 *****	  	 	108	  	
		
*****	  	 	108	  	
		
*****	  	 	111	  	
		
Schedule 12 *****	  	 	120	  	
		
Schedule 13 *****	  	 	121	  	
		
*****	  	 	121	  	
		
Schedule 14 *****	  	 	128	  	
		
Schedule 15 *****	  	 	132	  	
		
*****	  	 	133	  	
		
*****	  	 	133	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- ii -

THIS AGREEMENT is made as of January 25, 2008
Between :
(1) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , not in its individual capacity, except as otherwise expressly herein provided, but solely as Owner Trustee, under the Trust Agreement (as defined below), a national banking association organized under the laws of the United States, whose main office is at 299 South Main Street, 12th Floor, Salt Lake City, Utah 84111 ( Lessor ); and
(2) CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company ( sociedad anónima de capital variable ) incorporated under the laws of México, whose registered office is at Alfonso Nápoles Gándara #490, Edificio General Electric, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F., México ( Lessee ).
It is agreed as follows:
 
1.	Interpretation	
Definitions
 
1.1	In this Agreement, unless the context otherwise requires, capitalized words and expressions shall have the respective meanings given to them in paragraph 1.1 of Schedule 1 ( Definitions and Construction ).	
Construction
 
1.2	The conventions on construction and usage set out in paragraph 1.2 of Schedule 1 ( Definitions and Construction ) shall apply to this Agreement.	
Clauses and Schedules
 
1.3	References in this Agreement to clauses or schedules are, unless otherwise specified, references to clauses of and schedules to this Agreement and together the clauses and schedules shall constitute this Agreement. Certain provisions including conditions precedent and representations and warranties have been placed in the schedules and shall take effect as part of this Agreement.	
 
2.	Agreement to Lease	
Subject to and in accordance with the terms and conditions of this Agreement, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor for the Term.
 
3.	Delivery	
Delivery
 
3.1	Subject to satisfaction (or waiver by Lessor in its sole discretion) of all Lessee Conditions Precedent, Lessor shall deliver and Lessee shall accept the Aircraft on lease immediately following delivery of, and transfer of title to, the Aircraft by Airbus to Lessor as evidenced by delivery of the Bill of Sale. The Aircraft shall be delivered to and accepted by Lessee at the Delivery Location in an “AS IS, WHERE IS” condition. Lessee shall effect acceptance of the Aircraft by execution and delivery to Lessor of the Acceptance Certificate. Lessee’s acceptance shall be absolute, unconditional and irrevocable.	
 
- 1 -

3.2	Lessor and Lessee acknowledge that the Lessor has appointed Lessee, pursuant to the Aircraft Purchase Agreement Assignment, as Lessor’s agent for the purposes of accepting delivery of the Aircraft from Airbus under the Aircraft Purchase Agreement Assignment. Lessee acknowledges that Lessor shall not execute and deliver the Aircraft Purchase Agreement Assignment, and Lessee agrees that it will not so accept delivery of the Aircraft from Airbus, unless and until Lessor notifies Lessee that the Lessee Conditions Precedent have been satisfied or waived. Lessee hereby agrees that in the event delivery of the Aircraft shall be accepted from Airbus under the Aircraft Purchase Agreement Assignment by Lessee, as Lessor’s agent pursuant to such appointment by Lessor, such acceptance of delivery by Lessee on behalf of Lessor shall, without further act, irrevocably constitute absolute and unconditional acceptance by Lessee of the Aircraft for all purposes of this Agreement (including for the avoidance of doubt, satisfaction (or waiver, provided the terms of any such waiver are acceptable to Lessor) of the conditions precedent set forth in paragraph 3 of Schedule 3), and upon such acceptance of the Aircraft, the Lessee will execute and deliver to the Lessor the Acceptance Certificate.	
Delayed Delivery
 
3.3	If owing to:	
 
 	(a)	any seller or manufacturer of the Aircraft delaying in the delivery of, or failing to deliver, the Aircraft to Lessor for any reason (other than because of any default of Lessor in the payment of the purchase price of the Aircraft, or any failure of Lessor to provide notice pursuant to clause 3.2 above, when obligated to do so as provided therein when all Lessee Conditions Precedent have been satisfied) whether or not in circumstances entitling that seller or manufacturer to terminate that agreement; or	
 
 	(b)	the Aircraft Purchase Agreement Assignment terminating with respect to the Aircraft prior to delivery of the Aircraft (other than because of any default of Lessor in the payment of the purchase price of the Aircraft when all Lessee Conditions Precedent have been satisfied); or	
 
 	(c)	any delay due to a Delayed Delivery Event or otherwise which is beyond the reasonable control of Lessor; or	
 
 	(d)	any Lessee Condition Precedent not having been fulfilled,	
Lessor delays in the Delivery of, or fails to deliver, the Aircraft under this Agreement then:
 
 	(a)	Lessor will not be responsible for any Loss, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by Lessee;	
 
 	(b)	subject to clause 3.3(c) and (d) below and to clause 20, Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor, on the grounds of any such delay;	
 
 	(c)	in the case of termination of the Aircraft Purchase Agreement Assignment in respect of the Aircraft, Lessor or Lessee may at any time after such termination terminate this Agreement;	
 
- 2 -

 	(d)	if the Delivery is delayed for a period of more than ***** after the end of the Scheduled Delivery Month by reason of the occurrence of any of the events referred to in clause 3.3 above, Lessor may terminate this Agreement by giving notice in writing to Lessee within ten (10) days after the expiration of such period (or, if applicable after the expiration of such other period as Lessor and Lessee may agree)	
Upon any termination pursuant to this clause 3.3 ( Delayed Delivery ) neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than:
 
 	(i)	pursuant to clause 8.4 ( Breakage Costs Indemnity ), clause 23.3 ( Expenses ) and clause 23.12 ( Confidentiality ); and	
 
 	(ii)	Lessor will pay to Lessee the amount of any Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) and any prepaid rent received by Lessor on or prior to the date of such termination, or, if applicable, return the Letter of Credit.	
Risk
 
3.4	Throughout the Term Lessee shall be responsible for all risks associated with or relating to the Aircraft, including for any loss of or damage to the Aircraft. In recognition of the foregoing, and notwithstanding Lessor’s rights under this Agreement, including under clause 12, Lessee acknowledges and agrees that, as between Lessor and Lessee, Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance, repair and security of the Aircraft and compliance with all requirements of applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.	
 
4.	Expiry Date	
The Expiry Date shall be the Scheduled Expiry Date, subject to the following provisions:
 
 	(a)	if Lessor, acting in accordance with clause 20.2 ( Lessor’s Rights ) of this Agreement, terminates the leasing of the Aircraft to Lessee under this Agreement, the date of such termination shall be the Expiry Date and clause 20.2 ( Lessor’s Rights ) shall apply;	
 
 	(b)	if the Aircraft or Airframe suffers a Total Loss, the Expiry Date shall be the date when Lessor receives the full amount of the Agreed Value together with any other amounts then due and unpaid under this Agreement; and	
 
 	(c)	if clause 19.2 ( Non-compliance ) becomes applicable, the Expiry Date shall be extended pursuant to clause 19.2(a).	
 
5.	Rent	
Rent Periods
 
5.1       (a)	The Term shall be divided into successive periods (each a Rent Period ) in respect of which Rent shall accrue and be payable.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 3 -

 	(b)	The first Rent Period shall commence on the Delivery Date, and each subsequent Rent Period shall commence on the date immediately following the last day of the previous Rent Period.	
 
 	(c)	Each Rent Period shall be of one calendar month’s duration except that, with respect to the final Rent Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
Rent Date
 
5.2       (a)	Lessee shall pay Rent to Lessor or to its order in advance on each Rent Date. Lessee shall initiate payment adequately in advance of each Rent Date to ensure that Lessor receives the payment for value on such Rent Date.	
 
 	(b)	If a Rent Date is not a Business Day, the Rent shall be paid on the Business Day immediately before such Rent Date.	
Rent
 
5.3       (a)	Subject to the provisions of clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ), for purposes of determining amounts of Rent under this clause 5.3 ( Rent ), the Term shall be divided into successive periods (each a Relevant Period ).	
 
 	(b)	The first Relevant Period shall commence on the Delivery Date and each subsequent Relevant Period shall commence on the date immediately following the last day of the previous Relevant Period.	
 
 	(c)	Each Relevant Period shall be of 6 calendar months’ duration except that with respect to the final Relevant Period, if it would not otherwise end on the Expiry Date, it shall end on the Expiry Date.	
 
 	(d)	Rent payable in respect of each Rent Period shall be calculated as follows:	
*****
where:

*****	  	=	  	*****	  		
*****	  	=	  	*****	  		
*****	  	=	  	*****	  		
One Time Option to Fix Rent Prior to Delivery
 
5.4       (a)	Lessee shall have the one time option, so long as no Default shall then be continuing, exercisable by not less than three (3) Business Days irrevocable notice (such notice a Fixed-Rent Election Notice ) to Lessor, such notice to be received by Lessor no later than 2:00 p.m. Dublin time in Dublin on the third (3 rd ) Business Day prior to the Scheduled Delivery Date, to elect that the Rent payable by Lessee on each Rent Date and in respect of each Rent Period shall be fixed on a forward basis for the entire duration of the Term.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 4 -

 	(b)	If Lessor shall receive a validly issued Fixed-Rent Election Notice, then notwithstanding the provisions of clause 5.3 ( Rent ), Rent payable on each Rent Date in respect of each Rent Period shall be calculated as follows:	
*****
where:

*****	  	=	  	*****	  		
*****	  	=	  	*****	  		
*****	  	=	  	*****	  		
 
 	(c)	Once the Rent has been established pursuant to this clause 5.4, the provisions of clause 5.3 (Rent Calculation) shall be overridden and Rent shall be payable in the amount, as determined pursuant to this clause 5.4, on each Rent Date in respect of each Rent Period.	
 
 	(d)	The actual dollar amount of Rent payable by Lessee hereunder, as adjusted pursuant to clause 5.3 ( Rent ) or, if applicable, clause 5.4 ( One Time Option to Fix Rent Prior to Delivery ) will be notified in writing to Lessee no later than two (2) Business Days prior to Delivery, and, in the case of Rent calculated pursuant to clause 5.3, prior to the first day of each Relevant Period thereafter, and will be set out in the Acceptance Certificate and the execution and delivery of the Acceptance Certificate by Lessee shall, in the absence of manifest error, constitute conclusive evidence of the actual dollar amount of Rent in the case of Fixed Rent, and of the calculation of rent in the case of Rent under clause 5.3, payable on each Rent Date.	
 
6.	Deposit	
Payment
 
6.1	Lessee shall pay to Lessor the Deposit in the following installments:	
 
 	(a)	***** paid on or before the date of this Agreement (receipt of which is hereby acknowledged); and	
 
 	(b)	the balance to be paid no later than two (2) Business Days prior to the Delivery Date.	
On the date of any return of the Deposit by Lessor hereunder, there shall be deemed added to the amount of the Deposit an amount equal to interest on the amount of the Deposit as of and from the Delivery Date at a floating rate per annum equal to the “bid” rate of interest quoted by the Bank for London interbank dollar deposits of six months in duration on the Delivery Date and thereafter at approximately 11:00 am London time as in effect on the first day of each Relevant
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 5 -

Period, so long as Lessee has not provided a Letter of Credit in lieu of the Deposit and so long as no Event of Default has occurred and is continuing. The Deposit shall not be deemed to increase by an amount equal to interest as provided above during any period during which an Event of Default shall be continuing.
 
6.2	No later than the date falling ten (10) Business Days after the later of (a) the Expiry Date and (b) the date on which any Default (including under clause 20.1(e)(iv) in respect of “Other Agreements”) existing as of the Expiry Date ceases to be continuing, and, provided no Letter of Credit in lieu of the Deposit has been provided, Lessor shall pay to Lessee an amount equal to the remaining Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) that has not been applied by Lessor in accordance with the terms of this Agreement. Except as expressly specified in this Agreement, Lessee shall have no entitlement to receive payment of any part of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1).	
Concerning the Deposit
 
6.3       (a)	Lessee hereby grants a security interest in and first fixed charge and pledge of the Deposit (including the amount by which it shall be deemed to have increased in respect of accrued interest as provided in clause 6.1) to Lessor as security for Lessee’s and Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by Lessor or any of its Affiliates in respect of which Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
 	(b)	Following the occurrence of an Event of Default which is continuing, including an Event of Default under clause 20.1(e)(iv) in respect of any of the Other Agreements, in addition to all rights and remedies accorded to Lessor elsewhere in this Agreement or under Law, Lessor may, on behalf of itself or on behalf of any of its Affiliates, immediately or at any time thereafter, without notice to Lessee, use, apply or retain all or part of the Deposit in or towards the payment or discharge of any matured obligation owed by Lessee (or any Affiliate of Lessee) under this Agreement or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in clause 23.4 (Set-off) against all or part of the Deposit and/or exercise any other right or remedy of a secured creditor upon a default provided in the UCC.	
 
 	(c)	If Lessor exercises any of the rights described in clause 6.3(b):	
 
 	(i)	Lessee shall, upon a demand in writing from Lessor, within three (3) Business Days restore the Deposit to the level at which it stood immediately prior to such exercise; and	
 
 	(ii)	such application shall not be deemed a cure of any Event of Default unless such application was sufficient to cure such Event of Default (or Lessee has otherwise cured the same) and Lessee has restored the Deposit to the level at which it stood immediately prior to such exercise.	
 
 	(d)	Without prejudice to its rights under Section 6.1 above, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c.	
 
- 6 -

 	(b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate interest bearing account do not apply.	
Provision of Letter of Credit
 
6.4	Lessor agrees that Lessee may, by 10 Business Days prior notice in writing to Lessor given at any time, elect to substitute for the Deposit a Letter of Credit substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) or as otherwise approved by Lessor from time to time (the Letter of Credit ), provided that no Default is continuing. Such Letter of Credit shall in any event:	
 
 	(a)	be denominated in and payable in the currency in which the Rent is payable and be payable in an amount of not less than the Deposit required hereunder;	
 
 	(b)	be issued by an OECD registered bank with a long term unsecured credit rating of A with Standard & Poors and A2 with Moody’s (the Acceptable SDLC Bank Rating ) and from a jurisdiction satisfactory to Lessor or confirmed by such a bank;	
 
 	(c)	be an irrevocable standby letter of credit payable on demand without proof or evidence of entitlement of loss required at an office of the issuing bank in Dublin, London or New York or in another location satisfactory to Lessor, and shall be capable of being drawn by the Lessor directly;	
 
 	(d)	without prejudice to clause 6.4(c) above, be capable of being drawn if a replacement letter of credit is not provided in accordance with clause 6.5; and	
 
 	(e)	have a non-cancelable term of at least three hundred and sixty five (365) days.	
The Lessor shall not be obliged to accept a Letter of Credit in substitution for the Deposit if a Default has occurred and is continuing.
Letter of Credit
 
6.5       (a)	If Lessee has elected pursuant to clause 6.4 ( Provision of Letter of Credit ) to provide Lessor with a Letter of Credit and Lessee does so provide Lessor with a Letter of Credit in accordance with the terms of clause 6.4 ( Provision of Letter of Credit ), then on receipt of such Letter of Credit Lessor shall return any cash Deposit paid by Lessee to Lessor pursuant to clause 6.1 ( Payment ) to Lessee no later than ten (10) Business Days after receipt of the Letter of Credit.	
 
 	(b)	Lessee shall ensure that the Letter of Credit remains in place throughout the Lease Period or any relevant part thereof and for a period of not less than ten (10) Business Days following the Redelivery Date.	
 
 	(c)	Lessee shall procure the renewal of or new issue of a Letter of Credit no later than thirty (30) days (the SDLC Renewal Date ) prior to the stated expiry date of any then current Letter of Credit.	
 
 	(d)	If Lessee fails to put in place a replacement Letter of Credit by the SDLC Renewal Date in accordance with clause 6.5(c) and has not notified Lessor that Lessee will replace the same with a cash Deposit of like amount by such SDLC Renewal Date and thereafter	
 
- 7 -

 	does in fact replace the Letter of Credit with such cash Deposit not later than ten (10) Business Days prior to the stated expiry date of such Letter of Credit, an Event of Default shall be deemed to have occurred and be continuing and Lessor shall be entitled to drawdown on the Letter of Credit for the full amount thereof and such monies so drawn shall thenceforth be held by Lessor as provided below.	
 
 	(e)	If at any time the long term unsecured credit rating of the issuing bank or (if applicable) the confirming bank in respect of the Letter of Credit falls below the Acceptable SDLC Bank Rating then, upon notice from Lessor, Lessee shall promptly and in any event within ten (10) Business Days of receipt of such notice, either (1) provide Lessor with a replacement letter of credit complying with clause 6.4 ( Provision of Letter of Credit ); or (2) provide a cash Deposit that meets the requirements of, and in accordance with the provisions of, clause 6.1 ( Deposit ), in which event, upon receipt of such replacement letter of credit or cash Deposit Lessor will return the original Letter of Credit to Lessee as soon as reasonably practicable following receipt of such replacement letter of credit or cash Deposit. Any such Letter of Credit must be substantially in the form set out in Schedule 15 ( Form of Letter of Credit ) (or as otherwise approved by Lessor) and comply with the requirements of clause 6.4 ( Provisions of Letter of Credit ), together with acceptable evidence of confirmation, if applicable. This clause 6.5(e) is entirely without prejudice to the provisions of clause 20 ( Events of Default ) and exercise of rights and remedies thereunder.	
 
 	(f)	Lessor may assign or pledge its interest under the Letter of Credit to any Financing Party or any assignee or transferee of the Lessor’s interests as permitted by clause 22.3 ( Transfer by Lessor ) (and Lessee shall at Lessor’s cost perform such acts and deliver such instruments as Lessor may reasonably request in order to carry out and effect any such assignment or pledge).	
 
 	(g)	Lessor shall be entitled to make any number of demands under the Letter of Credit at any time following any Event of Default which is continuing and at any other time as specified in this clause 6 ( Deposit ). Any amounts drawn under the Letter of Credit shall be held by Lessor and/or applied (and/or set off) against all obligations of Lessee or any Lessee Affiliate under this Agreement or any Other Agreement, including any Losses arising as a result of the occurrence of any Default, including any Default under clause 20.1(e)(iv). Such holding as security, application and/or set off of any amount so drawn by Lessor shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Default except to the extent Lessee replaces the Letter of Credit pursuant to clause 6.5(h) or by another Deposit in the amount so applied, held as security, and/or set-off by Lessor.	
 
 	(h)	If for any reason Lessor applies any amount (the Paid Amount ) under the Letter of Credit, then Lessee shall within five (5) Business Days of demand, cause an additional letter of credit complying with the requirements of clause 6.4 ( Provision of Letter of Credit ) with a face amount equal to the Paid Amount and expiring on the same date as the existing Letter of Credit to be issued, or shall pay to Lessor in immediately available funds an amount equal to the Paid Amount to Lessor so that Lessor shall at all times have on an aggregate basis the benefit of a letter of credit and/or a cash Deposit for the amount of the Deposit pursuant to clause 6 ( Deposit ).	
 
 	(i)	Any amount drawn by Lessor under the Letter of Credit shall, pending application and/or set off in the manner contemplated by clause 6.5(g) or the payment of the same to Lessee	
 
- 8 -

 	pursuant to clause 6.5(k) ( Return of Letter of Credit ), be the absolute and unconditional property of Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of Lessee, Lessee hereby declares to the fullest extent permissible under applicable Law, for the benefit of Lessor that such property is and will be held subject to the security interest provided in clause 6.3(a) by Lessee for the benefit of Lessor).	
 
 	(j)	If at any time any Letter of Credit delivered to Lessor shall cease to constitute the legal, valid and binding obligations of the issuer thereof or any applicable confirming bank enforceable in accordance with its terms, or amounts payable under any Letter of Credit shall cease to be freely available for drawing, Lessee shall forthwith notify Lessor upon becoming aware of such circumstance(s) and as soon as practicable and in any event within five (5) Business Days after becoming aware of such circumstances or after written demand from Lessor either (i) deliver to Lessor a replacement Letter of Credit complying with the requirements set out in clause 6.4 ( Provision of Letter of Credit ) or (ii) deliver to Lessor a cash Deposit of an amount equal to the face value of the Letter of Credit, to be held by Lessor, whereupon Lessor shall redeliver to Lessee the first above mentioned Letter of Credit not later than ten (10) Business Days following receipt of such replacement Letter of Credit or, as the case may be, cash deposit.	
 
 	(k)	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under each of the Operative Documents and so long as no Default is then continuing under this Agreement, Lessor shall within ten (10) Business Days of the Expiry Date return to Lessee the Letter of Credit.	
 
7.	Maintenance Rent	
Lessee shall pay Maintenance Rent to Lessor in respect of the Aircraft. Such Maintenance Rent shall be calculated and paid in accordance with Schedule 8 ( Maintenance Rent ). Lessee acknowledges and agrees that Maintenance Rent is additional rent for the leasing of the Aircraft and not cash collateral or other collateral security for Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Rent is the property of Lessor, it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever. In addition, Maintenance Rent shall otherwise be treated for all purposes of this Agreement as Rent, and Lessor shall have the same remedies in respect of Lessee’s failure to pay Maintenance Rent when due as Lessor has for Lessee’s failure to pay Rent when due.
 
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8.	Payments	
Account for Lessee Payments
 
8.1	All payments by Lessee to Lessor under this Agreement will be made for value on the due date in dollars in immediately available funds by SWIFT or wire transfer to Lessor’s account set out below or to such other account as Lessor may from time to time notify Lessee in writing:	

Bank:	  	The Royal Bank of Scotland PLC
Financial Institutions
PO Box 39952
2  1 / 2 Devonshire Square
London
EC2M 4XJ	
		
Account No:	  	*****	
		
Account Name:	  	*****	
		
Sort Code:	  	*****	
		
IBAN BIC/Swift Code:	  	*****	
		
IBAN:	  	*****	
		
Correspondent Bank:	  	American Express International Bank
23 rd Floor
American Express Tower
200 Vesey Street
New York City
NY 10285-2300
USA	
		
Swift Code:	  	*****	
		
ABA:	  	*****	
Default Interest
 
8.2	If Lessee fails to pay any amount payable under this Agreement on the due date, Lessee shall pay to Lessor on demand from time to time interest at the Default Rate (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. Any Default Interest which is unpaid after a Lessor demand shall thereafter bear interest at the Default Rate.	
Absolute Obligations
 
8.3       (a)	Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to this Agreement are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein. Lessee may not regard its obligations as terminated, suspended, reduced or altered (and waives to the greatest extent permitted by applicable Laws any rights which it may have at any time to terminate, suspend, reduce or alter such obligations) by reason of any contingency or circumstance whatsoever, including (but not limited to):	
 
 	(i)	any right of set-off, counterclaim, recoupment, reduction, reimbursement, claim, defense or other right which Lessee may have against Lessor, the Manufacturer, any other vendor, or against any other Person;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(ii)	any unavailability of the Aircraft for any reason or interruption of or interference with Lessee’s use, operation or possession of the Aircraft;	
 
 	(iii)	any defect in title, airworthiness, condition, design, operation of, fitness for use of, registration of the Aircraft or any damage to or (subject to the provisions of clause 17.2 ( Payment of Agreed Value following Total Loss )) loss or destruction of the Aircraft, or any Security Interest or Taxes;	
 
 	(iv)	any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor or Lessee or any other Person;	
 
 	(v)	any invalidity or unenforceability or other defect in, this Agreement; and,	
 
 	(vi)	any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating, canceling, suspending, abating, reducing, deferring or in any way affecting any obligation of Lessee under this Agreement, including to lease the Aircraft or pay Rent or Maintenance Rent. Lessee acknowledges and agrees that it has used its own judgment in selecting the Aircraft, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in aircraft.	
 
 	(b)	Each payment of Rent or Maintenance Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Maintenance Rent for any reason whatsoever except manifest error.	
 
 	(c)	The provisions of this clause 8.3 ( Absolute Obligations ) shall not be construed to limit Lessee’s right to institute separate legal proceedings for direct damages or otherwise pursue remedies for direct damages against Lessor in the event of Lessor’s breach of the terms of this Agreement or to limit Lessee’s rights and remedies against any other Person.	
Breakage Costs Indemnity
 
8.4	Lessee shall indemnify and hold harmless Lessor, on first written demand by Lessor on an after-Tax basis, against any and all Breakage Costs as a result of:	
 
 	(a)	the late or non-Delivery of the Aircraft, as the case may be (other than where such late or non-delivery is caused by breach by Lessor of its obligations under this Agreement); or	
 
 	(b)	the termination of the leasing of the Aircraft under this Agreement prior to the Scheduled Expiry Date for any reason; *****	
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Currency Indemnity
 
8.5       (a)	If, under any applicable Law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the other currency ) other than the currency (the contractual currency ) in which it is payable pursuant to this Agreement then, to the extent that the payment (when converted into the contractual currency at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor against the amount of the shortfall. For the purposes of this sub-clause rate of exchange means the rate at which Lessor is able on the relevant date to purchase the contractual currency in London with the other currency.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than that in which such amount is expressed to be payable.	
Application of Payments by Lessor
 
8.6	If any sum paid to Lessor or recovered by Lessor in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may, acting reasonably, determine.	
Lessor’s Determination of Amounts Due
 
8.7	Any certificate or determination by Lessor as to any rate of interest, Breakage Costs (or gain), or as to any other amount payable under this Agreement shall be prepared in reasonable detail and, in the absence of manifest error, be conclusive and binding on Lessee.	
Business Day Convention
 
8.8	If any payment due under this Agreement (other than a payment of Rent) would otherwise be due on a day which is not a Business Day, it shall be due on the next following Business Day, or, if that Business Day falls in the following month, in the following year, or after the Expiry Date, on the Business Day immediately before such date.	
 
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9.	Lessor Covenants	
Quiet Enjoyment
 
9.1	Lessor agrees that provided no Event of Default has occurred and is continuing, neither Lessor nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Lessor of its rights in accordance with this Agreement will not constitute such an interference.	
Lessor Obligations following Expiry Date
 
9.2	Subject to the payment, performance and discharge in full of all of Lessee’s obligations under this Agreement and so long as no Default, including under clause 20.1(e)(iv) in respect of any Other Agreement, has occurred and is continuing, Lessor shall within ten (10) Business Days of the Expiry Date:	
 
 	(a)	pay to Lessee a portion of any Rent paid to Lessor to the extent such portion is attributable to the period falling after, but excluding, the Expiry Date;	
 
 	(b)	pay to Lessee any amount equal to the remaining Deposit in accordance with clause 6.2 or return the Letter of Credit in accordance with clause 6.5(k), whichever is applicable; and	
 
 	(c)	pay to Lessee any amounts payable pursuant to Schedule 14 hereof.	
If any Default is continuing, Lessor may hold and apply any such amounts in or towards cure of such Default and at such time as no Default (including under clause 20.1(e)(iv)) is in existence, shall pay the unapplied portion thereof, if any, to Lessee.
Maintenance Contributions
 
9.3	Notwithstanding references herein to the non-refundability of Maintenance Rent, Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Rent. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Schedule 14 ( Maintenance Contributions ).	
Lessor Limitation on Liability
 
9.4	Lessee agrees that its only right with respect to a default by Lessor under this Agreement is to make a claim against Lessor for actual damages resulting directly therefrom, subject to clause 18 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Sections 2A-508 through 2A-522 of the UCC or otherwise.	
 
10.	Lessee Covenants	
Performance
 
10.1     (a)	Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times prior to Delivery (where applicable) and during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
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 	(b)	Lessee shall remain liable to Lessor for all of Lessee’s obligations and liabilities under this Agreement notwithstanding any delegation by Lessee to another Person of any such obligations or liabilities or any reliance by Lessee on another Person to perform or discharge any such obligations or liabilities, whether or not such delegation or reliance is permitted or contemplated by this Agreement ( provided that to the extent any such obligation or liability is actually performed or discharged by such other Person on Lessee’s behalf, such performance or discharge shall constitute performance or discharge of the corresponding obligation or liability of Lessee).	
 
 	(c)	Lessee will take such steps as are necessary to ensure that no Person (other than Lessor or any Financing Party) acts in any manner inconsistent with Lessee’s obligations under this Agreement.	
 
 	(d)	Lessee will cause the Post-Delivery Authorizations and Filings to be made or obtained as provided in the definition of such term and by the deadline provided in the definition of such term.	
Information – General and Financial
 
10.2	Lessee shall:	
 
 	(a)	furnish to Lessor:	
 
 	(i)	upon Lessor’s request, but not more often than once quarterly, Lessee’s unaudited consolidated management prepared financial statements (in English, in dollars, and comprising a balance sheet and profit and loss statement) prepared for the most recent previous financial quarter certified by a qualified financial officer of Lessee as being true and correct;	
 
 	(ii)	as soon as available, but, in any event, no later than one hundred and twenty (120) days after the last day of each financial year of Lessee, its audited consolidated balance sheet and cash flow statement as of such day and its audited consolidated profit and loss statement for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditors opinion thereon shall be provided in English and in dollars within forty-five (45) days thereof); and	
 
 	(iii)	to the extent that Lessee is permitted by applicable Law and is not bound by confidentiality undertakings to third parties, such other information concerning the business or financial affairs of the Lessee as the Lessor may from time to time reasonably request;	
 
 	(b)	promptly notify Lessor of the occurrence of any Total Loss or of any event which is likely to result in a claim under the Insurances (but in the case of hull claims only, for any claim in excess of the Damage Notification Threshold) and reasonable details of any negotiations with the insurance brokers over any such claim;	
 
 	(c)	promptly notify Lessor of the occurrence of any Default or Event of Default;	
 
 	(d)	provide Lessor, upon request, with evidence reasonably satisfactory to Lessor that all Taxes and charges incurred by Lessee in connection with the Aircraft, its location and its	
 
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 	operation, including those invoiced by airports and air traffic control authorities have been paid in full or are being contested as and to the extent permitted under the definition of Permitted Lien; and	
 
 	(e)	within thirty (30) days after receipt by Lessee of a request by Lessor (or such shorter period as may be set forth in any written request by any Government Entity for information or documents) Lessee shall furnish in writing to Lessor such information or documents within its or any Affiliate’s possession or which is reasonably available to it or any of its Affiliates and subject to any legal or contractual requirements of confidentiality (or copies thereof certified as correct by an authorized officer of Lessee) regarding the Aircraft as may reasonably be requested by Lessor or as may be required to enable Lessor or any Affiliate thereof to file any report or document required to be filed by it with any Government Entity because of its ownership or other interest in the Aircraft, the Airframe or the Engines.	
Operation of the Aircraft
 
10.3	Lessee shall:	
 
 	(a)	operate the Aircraft solely for commercial purposes from the Habitual Base;	
 
 	(b)	not use or operate the Aircraft in violation of or contrary to any applicable Regulation or in a manner causing Lessor or any Financing Party to be in violation of any applicable Regulation;	
 
 	(c)	not permit any items to be on or transported by the Aircraft if such item is itself an illegal substance or contraband or if it is prohibited by any Regulation for such item to be on or transported by the Aircraft;	
 
 	(d)	not use or operate the Aircraft for any purpose for which the Aircraft is not designed or for any purpose other than primarily in passenger service in passenger configuration;	
 
 	(e)	not use the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	subject to (h) below, not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner not covered by the Insurances or in any area excluded from coverage by the Insurances;	
 
 	(g)	not operate, maintain, modify, insure or deal with the Aircraft or any Engine or Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which Lessee operates, maintains, modifies, insures or deals with similar aircraft, engines or parts in Lessee’s fleet.	
 
 	(h)	Notwithstanding the provisions of clause 10.3(f) above, Lessee shall not be deemed in breach of such clause if Lessee’s violation of the provisions thereof is done to safeguard the lives, safety or well being of passengers or crew or to preserve and protect the Aircraft, provided it is attributable to causes beyond the reasonable control of the Lessee or to extraordinary circumstances, in each case involving an isolated occurrence or series	
 
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 	of incidents not in the ordinary course of the regular operations of the Lessee and in each case the Lessee is taking all reasonable steps to remedy such failure as soon as is reasonably practicable.	
General Covenants, Compliance and Outgoings
 
10.4	Lessee shall:	
 
 	(a)	at all times during the Term maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence (except as permitted by clause 10.4(b) below); and (iii) in full force and effect, all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement;	
 
 	(b)	not enter into any merger with or into, or consolidation with, or sell, convey, transfer, lease or otherwise dispose, in one or a series of transactions, of all or substantially all of its assets as an entirety to, any Person, unless Lessor shall have consented thereto (such consent not to be unreasonably withheld), or unless the surviving Person, including the Lessee (the “ Successor ”), resulting from such merger, or consolidation, or which acquires by purchase, conveyance, transfer or lease all or substantially all of the assets of it as an entirety (i) is a corporation organized under the laws of Mexico and is an air carrier duly certificated by the Aviation Authority, (ii) executes a duly authorized, legal, valid, binding, and enforceable agreement, satisfactory in form and substance to the Lessor, acting reasonably, containing an effective assumption of and agreement to be bound by and fully and punctually perform all of Lessee’s obligations under, and a confirmation of its continuing liability under, this Agreement, the other Operative Documents and the Other Agreements and delivers such instrument to the Lessor, and (iii) provides an opinion from counsel acceptable to Lessor (acting reasonably), which opinion shall be reasonably satisfactory to Lessor, and an officer’s certificate (which may rely, as to legal matters, on such legal opinion), each stating that such merger, consolidation, conveyance, transfer, lease or other disposition and the instrument noted in clause (ii) above comply with this clause, that such instrument is a legal, valid and binding obligation of, and is enforceable (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) against, such Successor , and that this Agreement, the other Operative Documents and the Other Agreements continue to be enforceable against (except as enforceability may be limited by bankruptcy, insolvency and other laws applicable to the enforcement of creditors’ rights generally and by general principles of equity) the Successor as Lessee hereunder, and that all conditions precedent provided for herein have been complied with; provided that no such merger, consolidation or conveyance, transfer or lease shall be permitted if the tangible net worth of the Successor (including for the avoidance of doubt the Lessee) at the effective time thereof is less than the tangible net worth of Lessee immediately prior to such effective time or, if immediately after giving effect to such consolidation, merger, purchase, conveyance, transfer, lease or other disposition, a Default or Event of Default shall have occurred and be continuing.	
 
 	(i)	Prior to any transaction permitted pursuant to this clause 10.4, Lessee shall provide reasonable prior written notice to Lessor and, at Lessor’s request, shall make available to Lessor appropriate management personnel in order to answer reasonable questions and concerns from Lessor and to provide such information as Lessor may reasonably request relating to such transaction including reasonable evidence of conformity with the provisions of this clause 10.4.	
 
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 	(ii)	Upon any consolidation or transaction, or any conveyance, transfer or lease of all or substantially all of the assets of the Lessee and the satisfaction of the conditions specified in this clause, the Successor formed by such consolidation or into or with which the Lessee is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Lessee under this Agreement and any other document contemplated hereby with the same effect as if such successor corporation had been named as the Lessee herein. No such merger or consolidation, or sale, conveyance, transfer or lease of all or substantially all of the assets of the Lessee as an entirety shall have the effect of releasing the Lessee or any Successor which shall theretofore have become the Lessee hereunder in the manner prescribed in this clause from its liability hereunder.	
 
 	(c)	comply with all Regulations required for the making of payments, and the performance by Lessee of its other obligations under this Agreement (including complying with any applicable carriage regulations or restrictions from time to time issued by IATA);	
 
 	(d)	not cause or permit the Aircraft to proceed to, or remain at, any location in an Excluded Country except under the circumstances contemplated by clause 10.3(h);	
 
 	(e)	ensure that the Habitual Base remains the habitual base of the Aircraft unless Lessor gives its prior written consent to a change thereof, which consent shall not be unreasonably withheld;	
 
 	(f)	promptly pay or cause to be paid within such period as may be agreed between Lessee and the relevant Government Entity and/or Eurocontrol all license, registration, navigation and airport fees and charges assessed and demanded by any Government Entity and/or Eurocontrol and/or any other air navigation authority in accordance with applicable Regulations relating to the Aircraft or to the extent failure to comply therewith could reasonably be expected to result in a breach of this Agreement or in a Security Interest on the Aircraft, or could reasonably be expected to affect materially and adversely Lessee’s ability to perform any of its obligations in respect of other aircraft operated by Lessee, and Lessee shall be responsible for all costs, expenses, charges, fees (including license and registration fees), Taxes and other outgoings related to the operation, storage, maintenance, leasing or registration of the Aircraft, and shall promptly pay the same as and when they become due in each case, unless the amount, imposition or assessment of or demand for the same is or are being contested in good faith as provided in the definition of Permitted Lien;	
 
 	(g)	comply with all Applicable Laws and implement reasonable procedures concerning security measures to protect the Aircraft and its passengers from theft, destruction, hijacking, bombing or other acts of terrorism in accordance with applicable Law and industry practices of similarly situated air carriers;	
 
 	(h)	Lessee is not a “foreign air carrier” within the meaning of the Act, but if it becomes such a “foreign air carrier,” it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, except upon thirty (30) days prior written notice to the contrary to Lessor; and	
 
 	(i)	Lessee shall cause all Post Delivery Authorizations and Filings to be made or accomplished by the date specified in the definition of such term.	
 
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Registration and Protection
10.5
 
 	(a)	Lessee shall to the greatest extent permitted by applicable Law:	
 
 	(i)	register and keep the Aircraft registered with the Aviation Authority in the name of Lessor as owner thereof;	
 
 	(ii)	register and record with the Aviation Authority and any other relevant public record (or as required to comply with the Geneva Convention where applicable) (x) the Aircraft, this Agreement (or particulars thereof) and/or (y) the interest of Lessor as owner and lessor and, at Lessor’s cost, the rights of any Financing Parties under any Security Interest in respect of the Aircraft or this Agreement (as the case may be) on such public record; and	
 
 	(iii)	make any changes to the registrations referred to at (i) or (ii) above as may be necessary or advisable (and are consistent with the provisions of this Agreement) to take account of any change permitted by this Agreement in ownership of the Aircraft any Engine or Part (including any permanent replacement of any Engine or Part) or any modification to the Aircraft (including Equipment Changes) or any change in the financing of the Aircraft or of any change in applicable Regulations or introduction of new Regulations.	
Lessor shall pay all costs incurred in respect of a change in ownership and/or financing of the Aircraft pursuant to clause 22.2 ( Lessor Transfer ). Lessee will pay any other costs incurred in complying with this clause;
 
 	(b)	Lessee shall not without the prior written consent of Lessor change the State of Registration;	
 
 	(c)	if the state and/or any territorial unit in which Lessee is domiciled or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Convention and/or the Protocol and/or becomes a Contracting State, Lessee at its own cost and expense shall from time to time, do or cause to be done any and all acts and things which may be required or desirable (in the discretion of Lessor acting reasonably, but in each case consistent with the provisions of the Agreement and the other Operative Documents) to ensure that Lessor, and, at Lessor’s cost, the Financing Parties, if any, have or obtain the fullest benefit(s) of the Convention and/or the Protocol in connection with the Aircraft and any Engine, including (but not limited to):	
 
 	(i)	any matters connected with registering, perfecting or preserving and/or enhancing any International Interest(s) or other registrable interests vested in the Financing Parties with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
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 	(ii)	constituting any International Interest(s) or other registrable interests to be vested in the Financing Parties with respect to the Aircraft and/or any Engine in connection with this Agreement; and	
 
 	(iii)	entry into agreements (subordination or otherwise) to protect, perfect and/or enhance and/or improve the priority of any International Interest(s) or other registrable interests referred to in the foregoing paragraph (i) and/or (ii).	
For the purposes of this clause 10.5(c) the place in which Lessee is situated shall be construed and determined in accordance with the provisions of Article 4 (and Article 68) of the Consolidated Text and the terms: “assignment” (for the purposes of this clause 10.5(c) only), “Contracting State”, “Regional Economic Integration Organisation”, “situated in”, “State”, and “territorial unit” shall have the meaning given to them in (or, as appropriate, shall be construed in accordance with) the Consolidated Text.
Title and other Property and Security Interests
 
10.6	Lessee shall:	
 
 	(a)	affix, and maintain in a prominent position, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) on each Engine and in the cockpit or cabin of the Aircraft stating:	
“THIS [AIRCRAFT/ENGINE] IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE (“OWNER”) UNDER THAT CERTAIN TRUST AGREEMENT (MSN TBD), AND IS LEASED TO [LESSEE] AND MAY NOT BE OR REMAIN IN THE POSSESSION OF, OR BE OPERATED BY, ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF OWNER”;
 
 	(b)	not at any time (i) represent to others that Lessor or the Financing Parties are in any way connected with or responsible for any operation of the Aircraft or the business of the Lessee or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee; or (ii) pledge the credit of Lessor or the Financing Parties;	
 
 	(c)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor. Lessee further undertakes to inform any third party attempting to seize or arrest the Aircraft that it does not have any ownership interest in or title to the Aircraft;	
 
 	(d)	not do or omit to do or knowingly permit to be done or omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft;	
 
 	(e)	not abandon the Aircraft, any Engine or any Part; and	
 
 	(f)	not allow the Aircraft, any Engine or any Part, Lessor’s or any Financing Party’s interest in the same, or this Agreement or the Insurances, to become or remain subject to any Security Interest (other than Permitted Liens) and promptly at Lessee’s expense take such action as may be necessary to discharge any such Security Interest other than Permitted Liens if the same shall exist at any time.	
 
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Recognition of Rights
 
10.7	Lessee shall from time to time, on request by Lessor, procure that any Person to whom possession of the Aircraft, the Airframe or any Engine is given acknowledges in writing to Lessor, in a form acceptable to Lessor, acting reasonably, which may be included within a mortgage or lease or other agreement between Lessee and such Person, that it will respect the interests of Lessor as owner and lessor of the Aircraft, the Airframe or such Engine, as applicable and the interests of the Financing Parties under any Security Interest in respect of such Aircraft, the Airframe or such Engine and will not seek to exercise any rights whatsoever in relation to such Aircraft, Airframe or Engine. Lessor hereby agrees for the benefit of such Person that Lessor shall not claim any interest in or seek to exercise any rights whatsoever in relation to an engine belonging to such Person and from time to time installed on the Airframe or in any airframe upon which an Engine may from time to time be installed.	
 
11.	Possession and Sub-Leasing	
Possession
 
11.1	Lessee shall not, without the prior written consent of Lessor (such consent not to be unreasonably withheld), sub-lease or part with possession of the Aircraft, the Engines or any Part, except that Lessee may part with possession, without Lessor’s consent:	
 
 	(a)	with respect to the Aircraft, the Engines or any Part, to the relevant manufacturers for testing or to the Maintenance Performer for service, repair, maintenance or other work to the extent required or permitted by this Agreement;	
 
 	(b)	on a wet lease which complies with clause 11.2;	
 
 	(c)	on a sub-lease which complies with clause 11.3; and	
 
 	(d)	with respect to an Engine or Part as expressly permitted by this Agreement.	
Wet-leasing
 
11.2	Lessee shall be permitted to wet-lease the Aircraft to a third party provided that under the terms of such wet-lease:	
 
 	(a)	the Aircraft shall be operated solely by regular crews of Lessee possessing all current certificates and licenses that are required by applicable Regulations;	
 
 	(b)	the Aircraft shall be subject to Lessee’s insurance coverage or such other insurance coverage as is approved by Lessor;	
 
 	(c)	the Aircraft shall be maintained by the Maintenance Performer in accordance with the Maintenance Program and Lessee’s normal maintenance practices;	
 
 	(d)	the Aircraft shall not be subject to any change in its State of Registration or Habitual Base;	
 
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 	(e)	such wet-lease is expressly subordinated to this Agreement and the rights of Lessor and the Financing Parties hereunder and to the Aircraft; and	
 
 	(f)	the duration of such wet-lease (including all extensions and renewals) does not exceed six (6) months and does not extend beyond the Expiry Date.	
Sub-leasing
11.3
 
 	(a)	Lessee may sub-lease the Aircraft to TACA International Airlines and/or any Affiliate of TACA International Airlines that is a certificated air carrier (a Permitted Sub-Lessee ) if:	
 
 	(i)	Lessee shall have given no less than 10 Business Days’ prior written notice (it being acknowledged that in any case (y) the below conditions are required to be satisfied prior to commencement of the relevant sub-lease and (z) the evidence and/or documentation specified below shall be required to be supplied to Lessor in good time prior to commencement of the relevant sub-lease to enable Lessor to review the same) to Lessor of its intention to enter into any sub-lease agreement or arrangement (which notice shall include full details of the proposed sub-lessee and sub-leasing arrangements) and a copy of the draft sub-lease agreement and insurance certificate;	
 
 	(ii)	no Default shall have occurred and be continuing at the time of commencement of such sub-lease;	
 
 	(iii)	(i) the sub-lease shall be expressly stated to be and shall remain subject to and subordinate to Lessor’s rights under this Agreement and will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement; (ii) the sub-lease and all of Lessee’s right, title and interest thereunder shall have been assigned to Lessor, pursuant to a sub-lease assignment in form and substance acceptable to Lessor (acting reasonably), as collateral security for the performance of all obligations of Lessee and its Affiliates under this Agreement and all Other Agreements, and (iii) prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the sub-lessee shall provide an acknowledgement to Lessor, in a form satisfactory to Lessor (acting reasonably), confirming such subjection, subordination and assignment and confirming that its rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from Lessor stating that the leasing of the Aircraft under this Agreement has terminated following an Event of Default and that it will redeliver the Aircraft (together with all Engines, Parts and Aircraft Documents) to Lessor upon receipt of such written notice, and that it will perform all obligations under the sub-lease directly to, and deal exclusively with, Lessor;	
 
 	(iv)	the sub-lease requires the sub-lessee to operate the Aircraft substantially on the same terms as those set out in clause 10.3 ( Operation of the Aircraft ), maintain the Aircraft on the same terms as those set out in clause 12.1 ( Maintenance and Repair ) and (if the Permitted Sub-Lessee is to maintain Insurances rather than Lessee) insure the Aircraft on the same basis as set out in clause 16 ( Insurance ) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in clause 13 ( Interchange and Replacement of Engines and Parts );	
 
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 	(v)	the sub-lease shall contain terms substantially similar to clauses 15 ( Indemnities ), 16 ( Insurance ), 17 ( Loss, Damage and Requisition ), and 20 ( Events of Default );	
 
 	(vi)	the sub-lease shall not permit any further sub-leasing or, unless Lessor otherwise consents, wet leasing, of the Aircraft;	
 
 	(vii)	the sub-lease shall not have a term which extends or is capable of extending beyond the term of the Term;	
 
 	(viii)	on or prior to the commencement of the sub-lease Lessee shall provide to Lessor evidence satisfactory to Lessor confirming that the Aircraft will continue to be insured in accordance with this Agreement;	
 
 	(ix)	the sub-lessee under the sub-lease shall not at the time of commencement of the relevant sub-lease be insolvent or otherwise be subject to any events of the type set out in clauses 20.1(g) through (j);	
 
 	(x)	the sub-lessee under the sub-lease shall hold all certificates, licenses, permits and authorization required for its use and operation of the Aircraft; and	
 
 	(xi)	prior to the delivery of the Aircraft under such sub-lease, Lessor shall have received a legal opinion from reputable independent counsels in the jurisdiction in which each of Lessee and the sub-lessee is established and has its principal place of business and in which the Aircraft is to be habitually based and registered, in form and content and from legal counsel in each case reasonably satisfactory to Lessor. Such opinion would be required to confirm (amongst other things):	
 
 	(x)	that the rights of Lessor (and, if applicable, the Financing Parties) in respect of this Agreement and the Aircraft are not adversely affected following the commencement of the sub-lease;	
 
 	(y)	the legal, valid, binding and enforceable nature of the obligations of the sub-lessee in connection with the sub-lease (and in particular in relation to the direct obligation to Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason); and	
 
 	(z)	the proper compliance with registration and other formalities (including any registrations with the international registry in relation to the Convention and Protocol), if applicable) necessary or advisable in connection with the sub-lease, the subordination thereof or the assignment to Lessor thereof, including the perfection of Lessor’s rights and interests in respect thereof against Lessee, sub-lessee and all other Persons.	
 
 	(b)	Lessor shall (if necessary in connection with such sub leasing (at no cost to Lessor) co operate with Lessee upon reasonable request to assist Lessee and/or the relevant sub-lessee, as the case may be, in promptly making any filings, recordings and	
 
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 	registrations in the Habitual Base or the State of Registration (or with the International Registry in relation to the Convention and Protocol), if applicable) which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of Lessor as owner and lessor under this Agreement; or (ii) ensure the validity, enforcement or priority thereof; or (iii) at Lessor’s request and only if Lessee’s co operation is required, protect the rights of the Financing Parties and Lessee shall pay all reasonable costs, expenses and liabilities incurred by Lessor and any Financing Party in connection with any re-registration of the Aircraft and such filings, recordings and registrations (and no sub-lease shall be permitted unless and until such filings, recordings and registrations have been made).	
 
 	(c)	Lessee will indemnify Lessor and any Financing Party on demand for all reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with Lessor’s evaluation of any proposed sub-lease or its implementation.	
 
 	(d)	Lessee shall provide Lessor with a copy of the executed sub-lease and any amendments thereto within five (5) Business Days after the execution of such sub-lease or such amendments; such copy may be in electronic form to be followed promptly by hard copy.	
 
 	(e)	No sub-leasing of the Aircraft shall release Lessee from its obligations under this Agreement, and Lessee hereby confirms and agrees that it shall remain fully liable to perform all of its obligations under this Agreement notwithstanding any such sub-leasing.	
 
 	(f)	Notwithstanding any reference above to re-registration of the Aircraft or changes in the registry of the Aircraft, in no event shall the Aircraft be registered in a jurisdiction or on a registry other than the registry of the State of Registration without first obtaining the consent of Lessor.	
 
12.	Technical Reporting, Records, Inspection, Maintenance and Repair	
Technical Reporting
 
12.1	Lessee shall:	
 
 	(a)	Furnish to Lessor within fifteen (15) days after the end of every calendar month during the Term a Technical Status Report on the Aircraft and each Engine;	
 
 	(b)	give Lessor not less than thirty (30) days’ written notice of the time and location of all Major Checks and of all maintenance in respect of which Lessee is entitled to a Maintenance Contribution pursuant to this Agreement and following such checks provide, on request of Lessor a copy of the relevant completed workpack relating to such check (for purposes of clarification, the parties agree that notwithstanding the foregoing their rights and obligations in respect of Maintenance Contributions shall be governed by Schedule 14);	
 
 	(c)	within ten (10) Business Days of Lessor’s request, provide to Lessor such other information and documentation as Lessor may reasonably request concerning the location, condition use and operation of the Airframe, any Engine or Part, and any engine or part installed on the Airframe; and	
 
 	(d)	notify Lessor promptly following the removal of any Engine for the purpose of the Engine Refurbishment.	
 
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Records
 
12.2	Lessee shall:	
 
 	(a)	keep accurate, complete and current records (which records shall form part of the Aircraft Documents and, notwithstanding that such records may be generated by Lessee, shall be deemed the property of Lessor and leased to Lessee hereunder):	
 
 	(i)	as required by the Aviation Authority and all applicable Regulations (including JAR/EU-OPS1 sub-part M) of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation), in such manner as the Aviation Authority may from time to time require, and ensure that they comply with the recommendations of the Manufacturers and the OEMs;	
 
 	(ii)	of all structural checks and compliance with the corrosion protection and control program, including historical checks; and	
 
 	(iii)	evidencing Back to Birth Traceability of all Life Limited Parts;	
 
 	(b)	maintain all Aircraft Documents in English (with an appropriate revision service) and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	retain such Aircraft Documents and other materials at either Lessee’s principal place of business, the facility of the Maintenance Performer or an agreed storage location under Lessee’s control, and not permit any other Person to have possession of or control over the same without Lessor’s prior written consent; and	
 
 	(d)	(if Lessee subscribes to the Manufacturer’s on-line electronic information database and maintains on that facility an updated record of the aircraft service bulletin and other configuration embodiment status and to the extent permissible as a result of future developments by the Manufacturer, Airworthiness Directives, structural repairs and Maintenance Planning Data compliance status) make available to Lessor Lessee’s access to the relevant parts of such on-line system.	
Inspection
 
12.3     (a)	On request from Lessor, Lessee shall arrange that at any reasonable time during the Term, Lessor, any Financing Party and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be continuing, Lessor shall give Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with Lessee so as not to cause unreasonable interference with or delay to Lessee’s operation of the Aircraft. Lessee shall comply with the reasonable requests of Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any applicable Regulations or insurance restrictions.	
 
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 	(b)	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by Lessee; or (ii) an inspection reveals that Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow up inspection required to verify that remedial work has been completed will be at Lessee’s cost.	
 
 	(c)	Lessor shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and Lessor shall incur no liability as a result of non-exercise of any inspection rights in this clause 12.3. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for Lessor’s or such Financing Party’s information and failure to notify Lessee of any discrepancies thereafter shall not imply that Lessee is in compliance with this Agreement, its Maintenance Program or applicable Regulation.	
Maintenance and Repair
 
12.4	Lessee shall or shall procure that a Maintenance Performer shall, maintain, overhaul and repair the Aircraft so that at all times during the Term:	
 
 	(a)	the Aircraft is kept airworthy in all respects and in good operating condition and repair;	
 
 	(b)	Lessee has a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time, but not more frequently than once annually if no Default is in existence, provide to Lessor a copy within ten (10) days of Lessor’s request;	
 
 	(c)	the Aircraft is maintained in accordance with the Maintenance Program through a Maintenance Performer and in at least the same manner and with at least the same care as is the case with respect to similar aircraft owned or otherwise operated by Lessee (taken as a whole), and as if Lessee were to retain and continue operating the Aircraft in its fleet after the Expiry Date, including maintenance scheduling, modification status and technical condition, and all maintenance to the Airframe, any Engine or any Part required to maintain all warranties, performance guarantees or service life policies applicable to the Aircraft in full force and effect in accordance with their terms;	
 
 	(d)	the Aircraft complies with all applicable Regulations and all Mandatory Orders, all Airworthiness Directives and all other airworthiness directives issued by the Aviation Authority or other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part, regardless of upon whom such requirements are imposed having a compliance date during the Term or within one hundred and eighty (180) days after the Scheduled Expiry Date ( provided that in relation to Airworthiness Directives Lessor and Lessee agree to the cost sharing formula set out in Schedule 9 ( Airworthiness Directive Cost Sharing Formula ));	
 
 	(e)	Lessee and the Aircraft are each in compliance with any other applicable Regulation which relates to the maintenance, condition, use or operation of the Aircraft or requires any modification or alteration to the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed; and	
 
 	(f)	if required by the Aviation Authority, a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft is maintained and Lessee will from time to time provide to Lessor a copy within ten days of Lessor’s request.	
 
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Maintenance Program
 
12.5	Lessee shall consult with Lessor before any material changes to the Maintenance Program (including the preamble and schedules thereto) encompassing scheduled maintenance (including block maintenance) of the Airframe, Engines and Parts, including but not limited to service, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control inspection and treatments. Except for changes required by the Aviation Authority or the Manufacturer or engine manufacturer in order to preserve rights in respect of any applicable product warranties, no material change to the Maintenance Program shall be made until such reasonable revisions to Schedules 8, 9, 11, 12, 13 and 14 have been made as requested by Lessor in order to maintain for Lessor the benefits provided to Lessor pursuant to such Schedules; provided, however, that such request shall be made promptly following receipt of any notice of such change from Lessee.	
Engine Thrust and Operational Derate
 
12.6     (a)	No Engine may be utilized by Lessee on the Aircraft or on any other airframe (or by a sublessee pursuant to a sublease permitted by this Agreement) at a greater thrust level than the Engine Thrust without the prior written consent of Lessor; and	
 
 	(b)	if Lessor provides its consent pursuant to clause 12.6(a) then the amounts of Engine Performance Restoration Rent and Engine LLP Rent will be increased in accordance with Schedule 8.	
 
13.	Replacement and Interchange of Engines and Parts	
Replacement and Interchange of Engines and Parts
 
13.1	(a) Lessee shall promptly replace any Engine which has suffered an Engine Total Loss in accordance with clause 13.6.	
 
 	(b)	Lessee shall promptly replace any Part which has become time-, cycle- or calendar-expired, lost, stolen, seized, confiscated, destroyed, damaged beyond economic repair, unserviceable or permanently rendered unfit for use, in accordance with clause 13.6.	
 
 	(c)	Except to the extent otherwise agreed by Lessor, any engine, component, furnishing, equipment or part provided by the relevant manufacturer or vendor in replacement of a defective Engine or Part pursuant to the terms of any warranty must be installed as a permanent replacement in accordance with clause 13.6.	
 
 	(d)	Lessee shall be entitled to install replacement engines and parts on the Aircraft provided that:	
 
 	(i)	a permanent replacement of an Engine or Part shall be in accordance with clause 13.6;	
 
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 	(ii)	a temporary replacement of an Engine shall be in accordance with clause 13.3; and	
 
 	(iii)	a temporary replacement of a Part shall be in accordance with clause 13.4.	
Removed Engines and Parts
 
13.2	Lessee shall only be entitled to remove an Engine or Part from the Aircraft provided that:	
 
 	(a)	any Engine or Part not installed on the Aircraft (a Removed Engine or Removed Part (as the case may be)) is promptly replaced in accordance with clause 13.1; and	
 
 	(b)	such Removed Engine or Removed Part:	
 
 	(i)	is (x) installed on another aircraft operated by Lessee in accordance with clause 13.5; or (y) properly and safely stored; or (z) if unserviceable, without delay placed with the Maintenance Performer and into the Maintenance Program for repair, maintenance and/or refurbishment in accordance with this Agreement;	
 
 	(ii)	is kept free of Security Interests;	
 
 	(iii)	continues to be covered by the Insurances; and	
 
 	(iv)	remains the property of the Lessor unless and until there has been a permanent replacement in accordance with clause 13.6 and unless and until title to that Replacement Engine or Replacement Part has passed to the Lessor subject to this Agreement; and	
 
 	(c)	Lessee complies with clause 10.7 (Recognition of Rights) with respect to any Removed Engine and Removed Part; and	
 
 	(d)	Lessee ensures that any Removed Engine or Removed Part is reinstalled on the Aircraft or permanently replaced by an engine or part in accordance with clause 13.6 on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default.	
Installation of other engines
 
13.3	Lessee may only install an engine on the Airframe that is not a permanent replacement in accordance with clause 13.6 if:	
 
 	(a)	such engine is of the same manufacturer and model (or an improved model) as the Removed Engine it replaces;	
 
 	(b)	such engine is owned by or leased or conditionally sold to Lessee;	
 
 	(c)	the Insurances for the Aircraft are not affected; and	
 
 	(d)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes that engine and replaces it with the relevant Removed Engine or a permanent replacement engine in accordance with clause 13.6,	
 
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provided that if an engine complying with the conditions in clause 13.3(b) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of Lessee to ground the Aircraft until an engine complying with clause 13.3(b) becomes available for installation on the Aircraft, Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later ninety (90) days after such installation, Lessee shall remove the engine and replace it with an engine complying with clause 13.3(a), (b) and (c) subject always to the requirements of 13.3(d).
Installation of other parts
 
13.4	Lessee may only install any part on the Aircraft that is not a permanent replacement pursuant to clause 13.6, if:	
 
 	(a)	as soon as reasonably practicable after a part is installed on the Aircraft, but before the earlier of one hundred and twenty days (120) after such temporary replacement and the Expiry Date, Lessee removes that part and replaces it with the relevant Removed Part or a part that is a permanent replacement pursuant to clause 13.6; and	
 
 	(b)	the Insurances for the Aircraft are not affected.	
Installation of Engines and Parts on Other Aircraft
 
13.5	(a) Lessee shall only be entitled to install a Removed Engine or Removed Part on an aircraft operated by Lessee (the Other Aircraft ) if:	
 
 	(i)	no Default has occurred and is continuing;	
 
 	(ii)	the Other Aircraft is being operated at the Engine Thrust and within the same Operational Derate as the Aircraft;	
 
 	(iii)	Lessee owns or leases the Other Aircraft and has operational control of it;	
 
 	(iv)	Lessor remains the owner of the Removed Engine or Removed Part until it is permanently replaced pursuant to clause 13.6 and the Removed Engine or Removed Part does not become subject to a Security Interest (other than a Permitted Lien);	
 
 	(v)	neither the provisions of applicable Law nor the terms of any lease or other agreement or Security Interest to which the Other Aircraft is subject, (x) prohibit such installation or (y) require that the Removed Engine or Removed Part become the property of a Person other than Lessor and/or subject to any Security Interest or (z) will have the effect at any time of divesting or impairing the title and interests of Lessor as owner and lessor of the Removed Engine or Removed Part (and the rights of the Financing Parties under any Security Interest or assignment in respect of the Removed Engine or Removed Part); and	
 
 	(vi)	on the earlier of (i) the Expiry Date or (ii) the occurrence of an Event of Default, Lessee removes the Removed Engine or Removed Part from the Other Aircraft.	
 
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Permanent Replacement of Engines and Parts
 
13.6	If Lessee permanently replaces an Engine or Part Lessee shall procure that:	
 
 	(a)	in the case of an Engine, the replacement engine: (i) is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Engine; (ii) has undergone an equal or lower number of Engine Performance Restorations; (iii) is certified in accordance with JAR 145 or its successor for installation on the Aircraft; (iv) has equivalent interchangeable modification status as the Removed Engine; (v) has equivalent or greater time remaining to the next Engine Performance Restoration as the Removed Engine; (vi) has equivalent or lower time Life Limited Parts life used as the Removed Engine; (vii) has equivalent remaining warranty status as the Removed Engine; (viii) is of an equivalent or greater value and utility as the Removed Engine; (ix) is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe; and (x) is compatible with the remaining installed Engine;	
 
 	(b)	in the case of a Part, the replacement part: (i) is an OEM approved part and is of the same manufacturer and model (or at Lessee’s option an improved model) as the Removed Part; (ii) is certified in accordance with JAR 145 or its equivalent successor for installation on the Aircraft; (iii) is in as good operating condition as the Removed Part (prior to any damage where relevant); (iv) has not been involved in any accident or incident; (v) has equivalent interchangeable modification status as the Removed Part; (vi) has equivalent or more hours available until next scheduled check, inspection, overhaul and shop visit as the Removed Part; (vii) is not from a military source; and (viii) is of equivalent or greater value and utility as the Removed Part;	
 
 	(c)	the replacement engine or part becomes and remains (until replaced by this clause 13.6) the property of the Lessor free from Security Interests (except Permitted Liens) and on installation on the Aircraft will without further act be deemed transferred to and owned by Lessor and subject to this Agreement, and Lessee shall supply to Lessor all such title documents as Lessor may require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision if requested by Lessor of bills of sale and legal opinions); and	
 
 	(d)	Lessee has full details of the source and maintenance records of such replacement engine or part with full Back to Birth Traceability.	
Equipment Changes
 
13.7	(a) Lessee shall not make any modification or addition to the Aircraft (each an Equipment Change ), except for an Equipment Change which:	
 
 	(i)	is expressly permitted or required by this Agreement; or	
 
 	(ii)	does not diminish the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	has the prior written approval of Lessor.	
 
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 	(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove and retain any Equipment Change to the extent it is severable from the Aircraft and (i) such Equipment Change is not required by a Mandatory Order of the Aviation Authority or the JAA/EASA or an Airworthiness Directive or other airworthiness directives issued by aviation authorities with jurisdiction over Lessee or the Aircraft, (ii) such severance will not adversely affect the value, utility, condition or airworthiness of the Aircraft, and (iii) such Equipment Change did not constitute directly or by function a replacement of Part installed on the Aircraft at Delivery.	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change on the Expiry Date and to restore the Aircraft to its condition prior to that Equipment Change.	
 
 	(d)	Title to any equipment installed on the Aircraft pursuant to an Equipment Change after the Delivery Date will on installation, without further act, vest in Lessor and shall be an Engine or Part (as the case may be) subject to this Agreement free and clear of all Security Interests (other than Permitted Liens). Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable Laws. At any time when requested by Lessor, Lessee will provide such documents as Lessor may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessor of bills of sale and legal opinions).	
Lessee Title
 
13.8	Following (i) transfer of title of a replacement engine or part in accordance with clause 13.6(c) or (ii) restoration of the Aircraft to its condition prior to an Equipment Change in accordance with clause 13.7(c), title to the replaced Engine or Part or removed Equipment Change will, provided no Event of Default has occurred and is continuing, pass to Lessee on an “AS IS, WHERE IS” basis, without recourse, representation or warranty, except that it is free and clear of all Lessor Liens, and if requested by Lessee, Lessor will (at Lessee’s cost) provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale).	
 
14.	Manufacturer’s Warranties	
Use of Warranties
 
14.1     (a)	With effect from Delivery, and so long as no Event of Default has occurred and is continuing, Lessor hereby makes available to Lessee, and authorizes Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, sub-contractor or supplier (including compensation for loss of use of the Aircraft during the Term), to the extent that the same may be made available to Lessee and to the extent that the same have not otherwise been made available to Lessee pursuant to any other agreement.	
 
 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of Lessee. Any cash payments to Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall to the extent received by Lessee be promptly paid by Lessee to Lessor.	
 
 	(c)	Lessee shall take all steps and execute all documents as are necessary at the end of the Term to ensure that the benefit of any warranties to which this clause 14.1 applies and which have not expired is vested in Lessor including all claims thereunder other than claims made in respect of any facts or circumstances occurring during the Term and in respect of which Lessee has notified the relevant manufacturer prior to the end of the Term.	
Proceeds of Warranty Claims
 
14.2     (a)	Lessee agrees promptly to apply any proceeds of any claims (other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Term or are to be paid to Lessor in accordance with clause 14.1(b)) under any warranty relating to the Aircraft, any Engine or any Part received by Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or an reimbursement for such remedy.	
 
 	(b)	If an Event of Default has occurred and is continuing, Lessee’s authorization to exercise Lessor’s warranty rights shall automatically terminate, and Lessor may immediately:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this clause 14.2 (Proceeds) in the absence of such Event of Default;	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee; and	
 
 	(iii)	recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default.	
 
15.	Indemnities	
General
 
15.1	Lessee agrees to assume liability for (as between itself and the Indemnitees), and to defend and indemnify and hold harmless each of the Indemnitees against, upon demand, and agrees to pay and agrees not to make any claim against any Indemnitee for, any and all Losses (without duplication):	
 
 	(a)	which may at any time be suffered or incurred by any Indemnitee directly or indirectly as a result of, arising from or connected with (i) the possession, delivery, purchase, sale, transfer, importation, transportation, pooling, interchange, leasing, sub-leasing, wet leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management,	
 
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 	ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or Part (either in the air or on the ground), whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee, or (ii) any Security Interest in respect of the Aircraft, any Engine or Part (other then a Lessor Lien);	
 
 	(b)	which arise out of any act or omission which invalidate or renders voidable any of the Insurances;	
 
 	(c)	which arise as a result of any breach by Lessee of its representations, warranties or other obligations under this Agreement or any Event of Default; or	
 
 	(d)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part, including any defect therein (regardless of whether it is discoverable) or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right,	
but excluding any Loss in relation to a particular Indemnitee to the extent that such Loss:
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Indemnitee; or	
 
 	(ii)	arises as a result of Lessor Taxes or a Lessor Lien; or	
 
 	(iii)	is a Tax (without prejudice to any Indemnitee’s rights under any other provision of this Agreement); or	
 
 	(iv)	arises as a result of acts or events which occur after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement, unless any such act or event is attributable to an act, omission, event or circumstance which occurred during the Term; or	
 
 	(v)	arises from the breach by such Indemnitee of this Agreement or any other Operative Document but excluding any such breach which is attributable to or arises out of an Event of Default; or	
 
 	(vi)	constitutes the ordinary and usual operating and overhead expenses of such Indemnitee (other than any such Loss which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(vii)	is a Loss for which Lessor has expressly agreed to be responsible under any other provision of this Agreement.	
Notification
 
15.2	Lessor or any other Indemnitee intending to claim any amounts from Lessee pursuant to clause 15.1, shall notify Lessee in writing of any matter of which Lessor or such Indemnitee, through a responsible officer has received formal notice and for which Lessee is obligated to indemnify under this clause 10 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this clause 10.2 will not discharge or release Lessee from any	
 
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 	of its indemnity obligations under clause 10.1 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices Lessee’s right to defend any such Claim or results in a material increase in the amount which Lessee is required to indemnify (in such case to the extent of such increase).	
Contest
 
15.3	If Lessee disputes the payment of any claim payable by Lessor or any Indemnitee for which Lessee acknowledges and agrees it is responsible under this clause 10, Lessor will consider with Lessee the taking of such action as Lessee may reasonably request at Lessee’s risk and expense to contest that payment, but no Indemnitee will be obliged to take any such action:	
 
 	(a)	which such Indemnitee considers, acting in good faith, may prejudice it; or	
 
 	(b)	which such Indemnitee considers, acting in good faith, not to have a reasonable prospect of success;	
 
 	(c)	for which Lessee has not made adequate provision to the satisfaction of such Indemnitee in respect of the potential expense or risk concerned;	
 
 	(d)	while a Default is in existence; or	
 
 	(e)	against an Indemnitee’s own insurers.	
Duration
 
15.4	The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by Lessor or Lessee or the termination of the leasing of the Aircraft under this Agreement.	
 
16.	Insurance	
Insurances
 
16.1     (a)	Lessee shall, at its own expense, obtain and maintain the Insurances in full force during the Term and thereafter and, in each case, as required by this Agreement which shall have such deductibles and be subject to such exclusions as may (in each case) be permitted by this Agreement or as otherwise approved by Lessor (which approval shall not be unreasonably withheld) and with such insurers, brokers and underwriters complying with clause 16.1(b).	
 
 	(b)	The Insurances shall be effected either:	
 
 	(i)	on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) and through brokers of recognized standing, in each case satisfactory to Lessor, acting reasonably (and for such purposes, Lessee’s current lead underwriter and broker are each deemed satisfactory to Lessor); or	
 
 	(ii)	with a single insurer or group of insurers acceptable to Lessor, acting reasonably who does not fully retain the risk but effects substantial reinsurance with reinsurers who normally participate in aviation insurances in the leading	
 
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 	international insurance markets and through brokers each of recognized standing and acceptable to Lessor acting reasonably (and for purposes hereof Lessee’s current reinsurers and reinsurance brokers are deemed acceptable to Lessor) for a percentage acceptable to Lessor (acting reasonably and taking into account any Application) of all risks insured.	
Requirements
 
16.2	Lessor’s current requirements as to the Insurances are as specified in this clause 16 ( Insurance ) and in Schedule 5 ( Insurance Requirements ) Lessor may from time to time following any material change in applicable industry practices, and after consultation with Lessee and its designated brokers, amend the requirements in Schedule 5 so that (a) the scope and level of cover are maintained in line with prudent industry practice as applied to similarly situated carriers; and (b) the interests of Lessor and the other Indemnitees are prudently protected.	
Change
 
16.3     (a)	If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers shall consult with Lessee and Lessee’s insurers or, if applicable, brokers regarding whether that approval should be revoked to protect the interests of the parties insured. If, following the consultation, Lessor considers that any change should be made, Lessee shall then promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor.	
 
 	(b)	To the extent such endorsement is accepted on the Delivery Date as meeting the requirements of Schedule 5 and subject to the other provisions of this clause 16 (including clause 16.2). Lessee shall maintain insurance in respect of the Aircraft for the purposes of this Agreement which reflects Lloyds endorsement AVN67B or AVN67C (whichever, in the reasonable judgment of Lessor, shall, at any relevant time constitute customary industry practice) in respect of leased aircraft (as at the date hereof). In the event that any provision of AVN67B or AVN67C, as applicable (as at the date hereof) conflicts or is otherwise inconsistent with the requirements of this clause 9 and Schedule 4 then (so long as it shall be general industry practice to insure aircraft financed or leased on the basis of such endorsement and subject to clause 16.2) the provisions of AVN67B or AVN67C, as applicable, shall prevail and such endorsement shall be deemed to satisfy the requirements of this Agreement.	
Insurance Covenants
 
16.4	Lessee shall:	
 
 	(a)	comply with the terms and conditions of each policy of the Insurances and any applicable Regulations and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate the Insurances; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(iii)	brings any particular insured liability within the scope of an exclusion or exception to the Insurances;	
 
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 	(b)	not take out any insurance or procure any reinsurance in respect of the Aircraft which would prejudice the recovery by Lessor or otherwise prejudice Lessor’s interests under the Insurances required to be maintained by Lessee under this Agreement;	
 
 	(c)	on request, provide to Lessor such documents and information as may be reasonably requested by Lessor in respect of (i) claims made under the insurances or (ii) payment of Insurance premiums (including daily status updates of payment or non-payment of premiums after issuance of any notice of cancellation for failure to pay premiums);	
 
 	(d)	if at any time insurance clause AVN 2000 or its successor is endorsed on the policies of Insurance, ensure that the insurance write back clauses AVN 2001 and AVN 2002 as applicable (or any equivalent clauses) are endorsed on the policies of Insurance required to be maintained under this Agreement and give and comply with all representations, warranties and undertakings required by the insurers or reinsurers in connection with such clauses; and	
 
 	(e)	provide any other information and assistance in respect of the Insurances which Lessor may from time to time reasonably require.	
Renewal of Insurances
 
16.5	Lessee shall commence renewal procedures in a timely manner in accordance with its general practices, and provide to Lessor:	
 
 	(a)	If requested by Lessor in writing a written status report of renewal negotiation fourteen (14) days prior to each insurance expiry date;	
 
 	(b)	confirmation of completion of renewal prior to each insurance expiry date; and	
 
 	(c)	certificates of insurance (and where appropriate certificates of reinsurance), and a brokers’ and any reinsurance brokers’ letter of undertaking in a form acceptable to Lessor in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within seven (7) days after each renewal date.	
Failure to Insure
 
16.6	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an owner’s interest policy ) as such Indemnitee considers appropriate. Any sums so expended by such Indemnitee will become immediately due and payable by Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
 
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Continuing Insurance for Indemnity
 
16.7	Lessee shall effect and maintain (at no cost to Lessor) liability insurance after the Expiry Date, including with respect to its liability under the indemnities in clause 15 ( Indemnities ), for a period of two years, which provides for each Indemnitee to be named as additional insured.	
 
17.	Loss, Damage and Requisition	
Total Loss prior to Delivery
 
17.1	If a Total Loss occurs prior to Delivery, this Agreement shall immediately terminate, and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than:	
 
 	(a)	pursuant to clauses 23.3 ( Expenses ) and 23.12 ( Confidentiality ); and	
 
 	(b)	Lessor will pay to Lessee the amount of Deposit received by Lessor prior to the date of such Total Loss and not applied in accordance with clause 6 ( Deposit ); or return the Letter of Credit, as applicable and any prepaid rent, as provided above.	
Total Loss after Delivery
 
17.2     (a)	If a Total Loss occurs after Delivery, Lessee shall pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	ninety (90) days after the Total Loss Date; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
 
 	(b)	Subject to the rights of any insurers and reinsurers or other third parties, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which are then payable to Lessor under this Agreement, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Aircraft including any Engines and Parts not installed when the Total Loss occurred, on an AS-IS WHERE-IS basis and without recourse, representation or warranty (save as to freedom from Lessor Liens), and Lessor shall provide such documents as Lessee may reasonably require to evidence and perfect such transfer of title in accordance with all applicable Laws (including the provision, if required, to Lessee of bills of sale and removal of any International Interests created by this Agreement from the International Registry). Lessee shall indemnify Lessor for all fees, expenses and Taxes incurred by Lessor in connection with any such transfer.	
 
 	(c)	Upon a Total Loss of any Engine not involving a Total Loss of the Airframe, Lessee shall give Lessor prompt written notice thereof and Lessee shall promptly replace the destroyed Engine as required under clause 13.1(a).	
 
 	(d)	The receipt by Lessor of the insurance proceeds in respect of the Event of Loss on or prior to the date required pursuant to this clause 17.2 shall discharge Lessee from its obligation to pay the Agreed Value to Lessor, provided such proceeds are not less than the Agreed Value and to the extent such proceeds are available to be, and are, applied to pay such Agreed Value (it being agreed that if available Lessor shall apply the same to pay such Agreed Value unless an Event of Default is in existence in which case Lessor	
 
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 	may apply such proceeds to such of Lessee’s obligations as Lessor may elect in its discretion) and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, any excess of insurance proceeds over and above the Agreed Value and other amounts then payable by Lessee under this Agreement or any Other Agreement shall be promptly paid over to Lessee less an amount of any other sums then payable on the date of payment of the Agreed Value by Lessee to Lessor hereunder or under any Other Agreement. If the insurance proceeds are paid initially to Lessee and not to Lessor, they may be retained by Lessee if Lessee shall have paid the Agreed Value and all other payments then owing hereunder or under the Other Agreements to Lessor, and so long as no Default (other than a Default relating to the condition of the Aircraft) is in existence, otherwise Lessee shall be deemed to hold them in trust for Lessor and shall pay the Agreed Value to Lessor immediately upon the receipt by Lessee of such proceeds. If Lessee pays the Agreed Value and all other amounts then owing hereunder or under the Other Agreements and no Default is in existence, Lessor shall promptly assign (and shall procure that Owner assigns) to Lessee its rights under the Insurances to receive the insurance proceeds in respect of the Event of Loss (to the extent that such proceeds shall not have been paid to Lessee).	
Requisition
 
17.3     (a)	During any requisition for use or hire of the Aircraft, any Engine or any Part which does not constitute a Total Loss:	
 
 	(i)	the Rent and other amounts payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition);	
 
 	(ii)	so long as no Default or Event of Default has occurred and is continuing, Lessee shall be entitled to any hire fee paid by the requisitioning authority in respect of the Term;	
 
 	(iii)	Lessee shall, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement; and	
 
 	(iv)	Lessor shall be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor shall apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, provided that, if any Default or Event of Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under this Agreement or any Other Agreement and, so long as no Default is in existence or upon cure of any such Default, any excess shall be applied as described above.	
 
18.	Disclaimers	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 18.1 (EXCLUSION) TO 18.4 (CONFIRMATION) SHALL APPLY AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN
 
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ACCORDANCE WITH CLAUSE 3, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE, TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE:
Exclusion
 
18.1	THE AIRCRAFT IS TO BE LEASED AND DELIVERED HEREUNDER “AS IS, WHERE IS”, AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR (AND THE OTHER INDEMNITIEES) AND LESSEE:	
 
 	(a)	LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART UNDER THIS AGREEMENT INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OR TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) UNDER THIS AGREEMENT; AND	
 
 	(b)	LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
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 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART.	
Waiver
 
18.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT), ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) AND ALL CLAIMS AGAINST LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE MATTERS EXPRESSLY WAIVED IN CLAUSE 18.1 (EXCLUSION).	
Disclaimer of Consequential Damages
 
18.3	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT.	
No Duties
 
18.4	LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT) HAS NO FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT LESSOR (AND FOR PURPOSES OF CLARIFICATION, OWNER PARTICIPANT)’S ONLY OBLIGATIONS TO LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.	
Confirmation
 
18.5	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 18 ( DISCLAIMERS ) AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED TAKING ITS PROVISIONS INTO ACCOUNT.	
 
19.	Redelivery	
Redelivery
 
19.1     (a)	On the Expiry Date or (if earlier) the date of required redelivery of the Aircraft pursuant to clause 20.2, Lessee shall (unless a Total Loss has occurred) redeliver the Aircraft and Aircraft Documents (which shall include each of the documents referred to in Schedule 11 ( Aircraft Documents at Redelivery )) to Lessor at Lessee’s expense at the Redelivery Location in accordance with the procedures, and in compliance with the conditions set forth, in Schedule 13 ( Redelivery Procedure and Return Conditions ).	
 
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 	(b)	At the time of such redelivery the Aircraft shall be free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for immediate issuance of a certificate of airworthiness under JAR-OPS-1 or as otherwise agreed between Lessor and Lessee.	
 
 	(c)	If requested by Lessor, Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority.	
 
 	(d)	On the Redelivery Date, Lessee shall pay to Lessor any Redelivery Maintenance Payment Adjustments due and owing pursuant to and calculated in accordance with Schedule 12 ( Redelivery Maintenance Payment Adjustments ).	
Non-Compliance
 
19.2	If at the time of Final Inspection, the condition of the Aircraft does not comply with this Agreement, or, unless nevertheless Lessor in its sole discretion still accepts the Aircraft as being in compliance herewith on or before the Expiry Date, Lessee fails to make the Aircraft available to Lessor on a timely basis as provided in Schedule 13 for inspection and redelivery pursuant to clause 19.1 ( Redelivery ) and Schedule 13 ( Redelivery Procedure and Return Conditions ) (regardless of the circumstance), then:	
 
 	(a)	Lessee shall immediately rectify the non-compliance and to the extent that the non-compliance extends beyond the Expiry Date, the Term will be automatically extended solely for the purpose of enabling such non-compliance to be rectified;	
 
 	(b)	Lessee shall not use the Aircraft in flight operations except such operations directly related to the redelivery of the Aircraft to Lessor;	
 
 	(c)	all Lessee’s obligations and covenants under this Agreement will remain in full force until Lessee so redelivers the Aircraft; and	
 
 	(d)	Lessee shall pay to Lessor rent in respect of the period during which the Term is so extended (which rent shall be calculated in accordance with the provisions of clause 5 ( Rent ) and shall be payable to the Lessor at such intervals as the Lessor may specify or, in the absence of such specification, daily) at a rate, per month (prorated for actual days elapsed) equal to (a) for the first ten (10) days of such extension period, the rent payable in respect of the rent period immediately prior to the Scheduled Expiry Date, (b) for the period commencing on the ***** day and ending on the day following ***** days after the date Scheduled Expiry Date, an amount equal to ***** of such amount and (c) from the thirty-first day following the Scheduled Expiry Date, an amount equal to ***** of such amount.	
Any such extension shall not prejudice Lessor’s right to treat such non-compliance as an Event of Default at any time and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of this Agreement and applicable Law.
 
19.3	Lessor may elect (either on first tender of the Aircraft for redelivery or at any time during a period of extension pursuant to clause 19.2(a)) to accept redelivery of the Aircraft	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	notwithstanding non-compliance with clause 19.1 or Schedule 13, in which case Lessee shall indemnify Lessor and if requested by Lessor provide security to Lessor (in a form and amount acceptable to Lessor acting reasonably) in respect of such indemnity in respect of the cost to Lessor of putting the Aircraft into the condition required by this Agreement.	
Export Documents
 
19.4	Upon redelivery Lessee shall provide to Lessor all documents necessary to export the Aircraft from the Habitual Base (including, without limitation, a valid and subsisting export license and export certificate of airworthiness for the Aircraft) and required in relation to the deregistration of the Aircraft with the Aviation Authority.	
Acknowledgement
 
19.5	Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor shall deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.	
 
20.	Events of Default	
Events
 
20.1	Each of the following events will constitute an Event of Default and a repudiatory breach of this Agreement by Lessee:	
 
 	(a)	Non-payment : Lessee fails to make any payment of Deposit (after the full amount of Deposit has been initially paid, it being agreed there is no grace period for initial payment of the Deposit), Rent, Maintenance Rent or Agreed Value under this Agreement within three (3) Business Days after such payment is due, or Lessee fails to provide a Letter of Credit or renewal thereof when applicable hereunder or, in the case of any other sums payable to Lessor or any other Indemnitee under the provisions of this Agreement or the other Operative Documents, Lessee fails to make payment thereof within 10 Business Days of demand made by Lessor or such Indemnitee; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of clause 16 ( Insurance ) or Schedule 5 ( Insurance Requirements ), or any insurance required to be maintained under this Agreement is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance; or	
 
 	(c)	Breach : Lessee or any Lessee Affiliate fails to comply with any other provision of this Agreement or any other Operative Document and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for twenty (20) days after notice from Lessor to Lessee; or	
 
 	(d)	Representation : any representation or warranty made by Lessee or any Lessee Affiliate in or pursuant to this Agreement or any other Operative Document or in any document or certificate or statement is or proves to have been incorrect in any material respect when made and the circumstances giving rise to the breach of such representation or warranty if capable of being remedied are not remedied to Lessor’s satisfaction within twenty (20) days after notice to Lessee from Lessor requiring such remedy; or	
 
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 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or any Lessee Affiliate is not paid when due after giving effect to any applicable grace period; or	
 
 	(ii)	any Financial Indebtedness in excess of ***** (or the equivalent in another currency) of Lessee or of any Lessee Affiliate becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(iii)	any security granted in respect of such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default or termination event (meaning, in each case, after the expiration of any applicable cure period) caused by Lessee’s or any Affiliate of Lessee’s default or another circumstance relating to Lessee or any Lessee Affiliate, howsoever described, occurs under any Other Agreement; or	
 
 	(f)	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by the deadline provided in the definition of such term; or any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including:	
 
 	(i)	any authorization required by Lessee to obtain and transfer freely dollars (or any other relevant currency) out of any relevant country (unless such authorization is not relevant to Lessee’s ability to perform its obligations hereunder); or	
 
 	(ii)	any authorization required by Lessee to authorize, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or	
 
 	(iii)	the registration of the Aircraft or the Aircraft’s certificate of airworthiness; or	
 
 	(iv)	any airline license or air transport license required by Lessee,	
is modified in a manner adverse to Lessor or to Lessee’s ability to perform its obligations hereunder or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, except in the case of clause (iii) above, is not, as applicable, restored, replaced, returned, re-granted or renewed within thirty (30) days; or
 
 	(g)	Insolvency :	
 
 	(i)	Lessee or any Material Lessee Affiliate is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or	
 
 	(ii)	Lessee or any Material Lessee Affiliate suspends making payments on all or any class of its debts or announces, in writing, an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(h)	Liquidation and Similar Proceedings :	
 
 	(i)	a meeting of the shareholders or directors of Lessee or any Material Lessee Affiliate is convened to consider a resolution to present an application for an administration order or to appoint an administrator (whether out of court or otherwise) or any such resolution is passed; or	
 
 	(ii)	any step (including filing of a petition or application to the court or affidavit, giving of notice, petition proposal or convening a meeting or giving notice) is taken with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, protection from creditors or dissolution of, Lessee or any Material Lessee Affiliate or any other insolvency or bankruptcy proceedings (including any concurso mercantil or suspension de pagos proceedings) involving Lessee or any Material Lessee Affiliate; or	
 
 	(iii)	any order is made or resolution passed or petition filed for any such composition, assignment, arrangement, rehabilitation, administration (whether out of court or otherwise), custodianship, reorganization, liquidation, dissolution or insolvency or bankruptcy proceedings, or Lessee or any Material Lessee Affiliate becomes subject to or enters into any of the foregoing unless, in the case of any such involuntary action filed against Lessee or such Material Lessee Affiliates without its consent or acquiescence, the same is dismissed or stayed within sixty (60) days; or	
 
 	(iv)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator, examiner or similar officer (in each case, whether out of court or otherwise) is appointed, or an assignment for the benefit of creditors is made, or an order for relief under the United States bankruptcy laws is granted or entered, in respect of Lessee, or any Material Lessee Affiliate or any of their respective assets; or	
 
 	(v)	an administrative or other receiver or manager or other insolvency officer (in each case, whether out of court or otherwise) is appointed in respect of Lessee or any Material Lessee Affiliate or any material part of their respective assets; or	
 
 	(vi)	Lessee or any Material Lessee Affiliate requests any Person to appoint such a receiver or manager (whether out of court or otherwise); or	
 
 	(vii)	any other steps are taken to enforce any Security Interest over all or any material part of the assets of Lessee or any Material Lessee Affiliate; or	
 
 	(viii)	any attachment, sequestration, distress or execution affects any material assets of Lessee or any Material Lessee Affiliate and is not discharged or stayed within thirty (30) days of such attachment, sequestration, distress or execution; or	
 
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 	(i)	Other Jurisdiction : there occurs in relation to Lessee or any Material Lessee Affiliate any event in any jurisdiction which corresponds with any of the events mentioned in paragraphs (g), (h) or (i) above; or	
 
 	(j)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability (but not the validity or manner of any enforcement action by Lessor) or priority of the rights of Lessor as owner or lessor of the Aircraft or the Financing Parties under any Security Interest or assignment in respect of the Aircraft; or	
 
 	(k)	Suspension of Business : Except due to acts of God and other matters outside of its control or affecting the commercial airline industry in general, Lessee or Parent suspends or ceases or threatens to suspend or cease to carry on all or substantially all of its business; or	
 
 	(l)	Disposal : Lessee conveys, leases or otherwise transfers or disposes of all or substantially all of its property and assets to or consolidates or merges with or into any other Person unless Lessee has obtained Lessor’s prior written consent except as permitted in clause 10.4(b); or	
 
 	(m)	Change of Control : without the previous consent in writing of Lessor, any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of this Agreement) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided , for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this clause 20.1 (m) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(n)	Delivery : Lessee fails to comply with its obligation under clause 3 ( Delivery ) to accept delivery of the Aircraft; or	
 
 	(o)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could reasonably be expected to have a material adverse effect on the financial condition or operations of Lessee and its Affiliates or on the ability (including the prospective ability) of Lessee to comply with its obligations under this Agreement; such opinion to be based upon and with reference to Lessee’s operational and/or financial condition as set forth in its most recent financial and management statements provided to Lessor under this Agreement prior to the date of such determination; or	
 
 	(p)	Redelivery : Lessee fails to redeliver the Aircraft to Lessor on the Expiry Date in accordance with clause 19 ( Redelivery ); or	
 
 	(q)	Certain Charges : Eurocontrol (or any authority on its behalf) or any other authority with jurisdiction over Lessee or the Aircraft notifies Lessor that there are Eurocontrol charges or other navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of the longer of (i) thirty days from the date of receipt by	
 
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 	Lessee of notice from Lessor that it has received such notice from Eurocontrol or any such other aviation authority and (ii) any payment period applicable pursuant to agreement between Lessee and the relevant aviation authority and the failure to pay such charges could reasonably be expected to result in a material risk of a Security Interest on the Aircraft; provided that: (i) no Event of Default shall arise under this paragraph (r) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (ii) such thirty day period shall not apply if there is any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	(r)	Litigation : any judgment of a court or tribunal for the payment of money in excess of ***** or the equivalent in another currency shall be rendered against Lessee and as to which Lessee’s insurers have not agreed to accept liability therefor shall remain undischarged for a period of ***** unless during such period execution of such judgment shall have been effectively stayed or bonded; or	
 
 	(s)	Letter of Credit : any Letter of Credit is not renewed, extended or replaced as provided in clause 6 or the issuer or confirming bank under any Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or the issuer or any confirming bank becomes subject to any of the circumstances described in or analogous to clause 20.1(g), (h), (i) or (j) hereof; or	
 
 	(t)	Registration Amendments: without the previous consent in writing of Lessor, Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
Lessor’s Rights
 
20.2     (a)	Lessor Rights and Remedies: If an Event of Default occurs, Lessor may at its option (and without prejudice to any of its other rights or remedies under this Agreement or available under applicable Law), at any time thereafter while such Event of Default is continuing (and subject to compliance with any non-waivable mandatory requirement of applicable Law then in effect):	
 
 	(i)	accept such repudiation and by notice to Lessee and with immediate effect, terminate the leasing of the Aircraft or, if such leasing has not yet commenced, terminate Lessor’s obligations under this Agreement (but, in each case, without prejudice to any continuing obligations of Lessee under this Agreement (including to provide Insurance, maintain and repair the Aircraft and/or redeliver the Aircraft at the location and in the condition required hereunder)), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
 	(ii)	proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or	
 
 	(iii)	either:	
 
 	(y)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	redelivered to Lessor at the Redelivery Location (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee’s obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to that airport and will have all the powers and authorizations necessary for taking that action; or	
 
 	(z)	by serving notice require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require).	
 
 	(b)	Sale or Re-Lease of Aircraft : If an Event of Default occurs, Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Agreement had never been entered into. Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.	
 
 	(c)	Deregistration/Removal of Lease from Registry : If an Event of Default occurs, Lessor may, and Lessee shall at the request of Lessor promptly assist Lessor to, take all steps necessary to remove this Agreement from the registry of the Aviation Authority, effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement. Without limiting the foregoing, Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of Lessee.	
 
 	(d)	Payments : If an Event of Default occurs, require that Lessee pay to Lessor, and Lessee shall be liable for and immediately pay to Lessor, and/or Lessor may proceed by appropriate court action or actions to recover, any or all of the following amounts:	
 
 	(i)	all Rent, Maintenance Rent and other amounts which are or become due and payable under this Agreement prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
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 	(Z)	In the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
The “Fair Market Rental Value” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Term of this Lease determined by an appraisal completed in accordance with the Appraisal Procedure. The “Appraisal Procedure” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers experienced in appraising aircraft of the make and model of the Aircraft, selected by Lessor. The fees and expenses of the appraiser shall be paid by Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if Lessor does not have possession and effective control over the Aircraft for release or sale thereof unless such failure is attributable to a Lessor Lien.
 
 	(iii)	without duplication, an amount equal to Lessor’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with Lessor’s exercise of its remedies under this Agreement or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in ( Enforcement and Remarketing Costs ) the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without duplication, any loss, cost, expenses or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits.	
 
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 	(iv)	without duplication, such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	without duplication, all legal fees and expenses incurred to enforce this Agreement or Lessor’s rights and/or remedies or as a result of Lessee’s default under this Agreement or failure to comply with the obligations under the Lease;	
 
 	(vi)	without duplication, any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as the Lease, or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(vii)	all Breakage Costs; if any; and	
 
 	(viii)	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	(e)	Interest : Require Lessee to pay, and Lessee shall pay to Lessor, interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.	
 
 	(f)	Deposit : Apply all or part of the Deposit, or draw under the Letter of Credit and apply the proceeds, to any amounts owing or to be owing to Lessor under this Agreement.	
 
 	(g)	No Exclusive Remedy : No remedy referred to in this clause 20.2 is intended to be exclusive, but, to the extent permissible under this Agreement or under applicable Law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at Law or in equity and in Lessor’s sole and absolute discretion; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
Lessor’s Right To Remedy
 
20.3	If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection with the non-compliance.	
 
21.	Taxation	
Gross-up
 
21.1     (a)	All payments by Lessee under or in connection with this Agreement shall be made without set-off or counterclaim, free and clear of and without deduction for or on account of all Taxes unless Lessee is required by law to make any such deduction or withholding.	
 
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 	(b)	All Taxes (other than Lessor Taxes) in respect of payments under this Agreement shall be for the account of Lessee and shall be paid by Lessee within the period for payment permitted by law.	
 
 	(c)	If any Taxes are required to be deducted or withheld from any amount payable hereunder, Lessee shall:	
 
 	(i)	pay to Lessor and/or Owner Participant (as applicable and without duplication) by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by Lessor and/or Owner Participant (as applicable and without duplication) on the date of such payment, after deduction or withholding for all such Taxes, and after deduction for income Taxes thereof at the highest marginal rate applicable to Lessor and/or Owner Participant (as applicable and without duplication), will be equal to the amount that Lessor and/or Owner Participant (as applicable and without duplication) would have received if such Taxes had not been deducted or withheld;	
 
 	(ii)	pay to the relevant authority within the period for payment permitted by applicable Laws the full amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor or Owner Participant (as applicable) evidence of payment to the relevant authority of all amounts deducted or withheld as aforesaid.	
 
 	(d)	If any payment is made by Lessee under clause 21.1(c) and Owner Participant in good faith determines that it has actually received a credit against, or relief or remission for, or repayment of, any Tax paid or payable by Owner Participant in respect of or calculated with reference to the deduction or withholding giving rise to such payment, Owner Participant shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and without leaving Owner Participant in any worse position than that in which it would have been had such deduction or withholding not been required to be made, pay to Lessee such amount as Owner Participant shall in good faith have determined to be attributable to the relevant deduction or withholding.	
Nothing in this clause 21.1(d) shall:
 
 	(i)	interfere with the right of Lessor and/or Owner Participant (without duplication) to arrange its tax affairs in whatever manner it thinks fit and, in particular, but without limitation, Lessor and/or Owner Participant (without duplication) shall not be under any obligation to claim credit, relief, remission or repayment from or against its corporate profits or similar Tax liability in respect of the amount of any such deduction or withholding in priority to any other claims, reliefs, credits or deductions available to Lessor and/or Owner Participant (without duplication); or	
 
 	(ii)	oblige Lessor and/or Owner Participant (without duplication) to disclose any information relating to its Tax affairs or any computations in respect thereof.	
 
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Covenant	to Pay Taxes	
 
21.2	Lessee shall promptly pay when due:	
 
 	(a)	all Taxes (other than Lessor Taxes) imposed by any Government Entity with respect to the Aircraft, including the ownership, delivery, leasing, possession, use, operation, redelivery, import, export, sale or other disposition of the Aircraft; and	
 
 	(b)	all Taxes (other than Lessor Taxes) in respect of any premises where the Aircraft, any Engine or any Part thereof is located from time to time and in respect of which the failure to pay the same could reasonably be expected to result in a material risk of a Security Interest on the Aircraft or an Engine or an inability to procure possession of the Aircraft or an Engine by Lessor,	
except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate resources have been provided by Lessee and non-payment of which does not give rise to any material risk of the Aircraft or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or any Finance Party. Without limiting the foregoing, Lessee will be responsible for and shall pay when due any Tax in respect of the Aircraft under the Mexican Asset Tax Law ( Ley del Impuesto al Activo ) or any successor or similar law from time to time in effect.
Tax Indemnity
 
21.3     (a)	Lessee agrees to indemnify and hold harmless each Tax Indemnitee against, and agrees to pay on demand, all Taxes (other than Lessor Taxes) levied or imposed against or upon any Tax Indemnitee or Lessee and relating to or attributable to Lessee, this Agreement, or the Aircraft or directly or indirectly in connection with the possession, delivery, purchase, sale, transfer, location, existence, importation, transportation, pooling, interchange, leasing, sub-leasing, wet-leasing, chartering, storage, registration, insurance, replacement, maintenance, modification, refurbishment, condition, service, repair, overhaul, control, management, ownership, use, operation, exportation or redelivery of the Aircraft, any Engine or any Part or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom, or the making of any Equipment Change.	
 
 	(b)	The provisions of clause 21.3(a) shall not apply to, and Lessee shall have no liability pursuant to such clause to a Tax Indemnitee in respect of, any Tax to the extent that such Tax (a Lessor Tax ):	
 
 	(i)	arises as a result of the Gross Negligence or willful misconduct of such Tax Indemnitee; or	
 
 	(ii)	is imposed as a result of a Lessor Lien; or	
 
 	(iii)	is imposed with respect to any period commencing or event occurring after the Aircraft has been redelivered to Lessor in compliance with clause 19 and is no longer subject to this Agreement unless such Tax is attributable to any act, omission, event or circumstance which occurred during the Term and would not have constituted a “Lessor Tax” had it arisen during the Term; or	
 
 	(iv)	arises from the breach by such Tax Indemnitee of this Agreement but excluding any such breach which is attributable to or arises out of any Event of Default; or	
 
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 	(v)	is imposed as a direct result of any connection between that Tax Indemnitee and the jurisdiction imposing the Tax that is unrelated to the transactions contemplated by this Agreement or the operation of the Aircraft by Lessee or any sub-lessee, or the location of the Aircraft, the Lessee or any sub-lessee; or	
 
 	(vi)	is imposed or levied on or measured by or with respect to the net income, profits, assets, net-worth, turnover, capital gains or any alternative minimum tax of Lessor and/or Owner Participant (without duplication) by any Government Entity in the United States or Ireland or any jurisdiction where Lessor and/or Owner Participant (without duplication) has a principal place of business; but excluding any Tax imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from the use, operation, presence or registration of the Aircraft, the Airframe, any Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(vii)	is imposed in connection with the sale, transfer, assignment (whether legal or equitable, voluntary or involuntary) or other disposition by that Tax Indemnitee of any or all of its rights, title and interest in or with respect to the Aircraft, the Airframe, any Engine or any Part or this Lease except a sale, transfer assignment or other disposition permitted or required under this Agreement (other than pursuant to clause 22.2), or at Lessee’s request or while an Event of Default is in existence; or	
 
 	(viii)	is imposed as a result of any failure of that Indemnitee to provide the information/documentation when required to do so pursuant to clause 21.9 below.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by Mexico be a Lessor Tax unless and to the extent such withholding tax arises as a result of a transfer by Lessor or Owner Participant of any of their respective right, title and interest in and to this Lease or the Aircraft (except as requested by Lessee or permitted or required under this Agreement, except pursuant to clause 22.2, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding tax would have existed in the absence of such transfer.
 
 	(c)	If Lessor and/or Owner Participant (without duplication) is required by any applicable Law, or by any third party, to deliver any report or return in connection with any Taxes for which Lessee is obliged to indemnify Lessor and/or Owner Participant or any Tax Indemnitee under this Agreement, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor and/or Owner Participant, as applicable.	
 
 	(d)	If any report, return or statement is required to be made by Lessor or any Tax Indemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under this Agreement, Lessee will promptly notify Lessor of the requirement, and:	
 
 	(i)	if permitted by applicable Law, make and file in a timely manner such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any Tax Indemnitee intends to prepare and file), prepare such return in such manner as will indicate Lessor as owner and lessor of the Aircraft if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(ii)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
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Sales Tax
 
21.4     (a)	Without limiting clause 21.3 above, Lessee shall pay to Lessor and/or Owner Participant (without duplication) (or, if permitted by applicable Law and if requested by Lessor and/or Owner Participant (without duplication), Lessee shall pay to the relevant tax authority for the account of Lessor and/or Owner Participant (as applicable)):	
 
 	(b)	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement (other than under clause 22.2), in connection with a request of Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to Lessee pursuant to this Agreement or any such transfer unless Lessee delivers to Lessor and/or Owner Participant (without duplication) on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s and/or Owner Participant’s (without duplication) entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	(c)	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless Lessee delivers to Lessor and/or Owner Participant (without duplication) such exemption certificates or other documents as may be required by applicable Law to evidence Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
Value Added Tax
 
21.5     (a)	For the purposes of this clause 21.4:	
 
 	(i)	VAT means value added tax and any goods and services, sales or turnover tax, imposition or levy of a like nature; and	
 
 	(ii)	supply includes anything on or in respect of which VAT is chargeable.	
 
 	(b)	Lessee shall pay to Lessor and/or Owner Participant (without duplication) or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement.	
 
 	(c)	Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any), and if VAT is payable in respect of any amount as aforesaid, Lessee shall pay all such VAT and shall indemnify Lessor and/or Owner Participant (without duplication) against any claims for the same (and where appropriate Lessee shall increase the payments which would otherwise be required to be made under this Agreement so that	
 
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 	Lessor and/or Owner Participant (without duplication) is left in the same position as it would have been in had no VAT been payable); and Lessee shall provide evidence to Lessor and/or Owner Participant (without duplication), if available, in respect of payment of any such VAT.	
Information regarding Taxes
 
21.6	(a) If Lessee is required by any applicable Laws, or by any third party, to deliver any report or return in connection with any Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and in particular shall state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee shall, on request supply a copy of the report or return to Lessor.	
 
 	(b)	Lessee shall (without prejudice to its right to contest the same in accordance with this Agreement):	
 
 	(i)	within thirty days after the end of any Rent Period, furnish to Lessor evidence satisfactory to Lessor of payment of all Taxes arising in connection with or as a result of the transactions contemplated by this Agreement requiring payment within such Rent Period, including, without limitation, copies of receipts from the relevant tax authorities or other Governmental Entities for payments of withholding taxes, any VAT and payment of customs duties; and	
 
 	(ii)	furnish to Lessor evidence satisfactory to Lessor that all Taxes and charges incurred by Lessee with respect to the Aircraft, including without limitation all payments due to the relevant air traffic control authorities, have been paid and discharged in full.	
Taxation of Indemnity Payments
 
21.7     (a)	If and to the extent that any sums payable to any Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority) Lessee shall pay to such Indemnitee such sum as will after the tax liability has been fully satisfied leave that Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability together with interest on the amount of the deficit at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any Person other than such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee shall pay to such Indemnitee such sum as will, after the tax liability has been fully satisfied at the highest marginal rate of the applicable jurisdiction, indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability together with interest on the amount payable by Lessee under this clause 21.6(b) at the Default Rate in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
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Notification
 
21.8	Lessor or any other Tax Indemnitee shall notify Lessee in writing of any Taxes of which Lessor or such other Tax Indemnitee has, through a responsible officer received formal notice and for which Lessee is obligated to indemnify under this clause 21 (each a Claim ); provided , however , the delay or failure of Lessor to give notice to Lessee in accordance with this Clause 21.8 will not discharge or release Lessee from any of its indemnity obligations under Clause 21.8 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes Lessee’s right to defend any such Claim or results in additional amounts payable by Lessee which amounts would not have been imposed in the absence of such delay.	
Information
 
21.9	Any Indemnitee that is entitled to an exemption from or reduction of withholding Tax under any applicable law or income tax treaty with respect to payments under this Lease, shall deliver to Lessee at the time or times prescribed by such applicable law or income tax treaty, such properly completed and executed documentation prescribed by such applicable law or income tax treaty that is reasonably requested by the Lessee as will permit such payments to be made without withholding or at a reduced rate of withholding, provided , however , that, an Indemnitee shall not be required to furnish to the Lessee any form or any other document if such Indemnitee determines in its reasonable discretion that providing such form or other document would expose it to tax liability in a jurisdiction where it would not otherwise have such liability if it did not provide the form or other document, unless Lessee agrees to indemnify such Indemnitee against such liability and such indemnity is reasonably acceptable to such Indemnitee.	
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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TABLE OF CONTENT
(continued)
 
22.	Assignment and Transfer	
By Lessee
 
22.1	LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO WILL BE NULL AND VOID.	
Lessor Transfer
 
22.2     (a)	Lessor may, subject to the provisions of this clause 22.2, without the consent of the Lessee assign and/or transfer any of its rights or obligations under this Agreement and/or any of its right title or interest in the Aircraft, including any assignment or transfer relating to (i) financing or refinancing arrangements secured on this Agreement or any right or interest therein, and/or the Aircraft and/or (ii) sale and leaseback of the Aircraft and/or (iii) any sale or other transfer of the Aircraft together with a transfer or novation of Lessor’s rights and obligations under this Agreement and/or (iv) any sale or other transfer of any interest in the Aircraft or this Agreement, including rights to payments hereunder.	
 
 	(b)	Lessor shall notify Lessee in advance of any such transfer or assignment and Lessee agrees to provide all reasonable assistance and cooperation to Lessor in connection therewith, subject to the provisions of this clause 22.2 and Lessee agrees to execute and deliver all such documents and take such further action as Lessor may reasonably request to establish and protect the rights and remedies created or intended to be created in favor of the assignees or transferees in connection with any assignment or transfer.	
 
 	(c)	Notwithstanding any such assignment or transfer, Lessor will remain entitled to the benefit of each indemnity and the liability insurances effected under this Agreement.	
Provisions Relating to Lessor Transfer
 
22.3     (a)	Lessor shall reimburse Lessee for all reasonable its out of pocket costs and expenses (including reasonable legal expenses) incurred in connection with any transfer or assignment pursuant to clause 22.2.	
 
 	(b)	Lessor shall procure that any Person that becomes a holder of an interest in the Aircraft or this Agreement by virtue of a transfer pursuant to clause 22.2(a) (by way of security or otherwise) except a Person that becomes Lessor shall provide an undertaking of quiet enjoyment to Lessee in substantially the same terms as the Lessor’s covenant set out in clause 9.1.	
 
 	(c)	Upon a transfer or novation of this Agreement described in clause 22.2(a)(ii) or (iii) above, Lessor shall be released from its obligations and liabilities under this Agreement to the extent such obligations and liabilities are assumed by such transferee or novatee.	
 
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 	(d)	*****	
 
 	(e)	Lessee shall have no greater obligations under this Agreement as a result of such sale, assignment, transfer, novation or disposal than Lessee would have had if such sale, assignment, transfer, novation or disposal had not taken place based on applicable Laws (or then proposed Laws that would thereafter become applicable) and circumstances in effect as at the date of such sale, assignment, transfer, novation or disposal; and	
Any transfer of the Aircraft or this Agreement to a trust shall be exempt from the foregoing provisions; provided , however , that any transfer of the beneficial interest in such a trust having title to the Aircraft shall comply with the foregoing provisions.
 
23.	Miscellaneous Provisions	
Rights Cumulative, Waivers
 
23.1	The rights of Lessor under this Agreement may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any Law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any Law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
Delegation
 
23.2	Lessor may, without releasing it from its obligations hereunder, delegate to any Person or Persons all or any of its rights, powers or discretions vested in it by this Agreement, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit.	
Expenses
 
23.3	Lessee shall pay to Lessor and/or Owner Participant (without duplication) on demand all documented expenses (including legal, professional, and out-of-pocket expenses, which shall be reasonable except in the case of enforcement or preservation of Lessor and/or Owner Participant (without duplication)’s rights or remedies) incurred or payable by Lessor and/or Owner Participant (without duplication) in connection with registration of the Aircraft or the filing, recordation or registration of any interests or documents in the State of Registration or the State of Incorporation, any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under, this Agreement or the monitoring of compliance by	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	Lessee with this Agreement (but in the case of such monitoring of compliance, only if upon such monitoring a Default is found to have occurred or the enforcement or preservation of any of Lessor and/or Owner Participant (without duplication)’s rights or remedies under this Agreement (including in connection with any Event of Default).	
Set-off
 
23.4     (a)	Lessor may set off any matured obligation owed by Lessee under this Agreement or any of the Other Agreements against any obligation (whether or not matured) owed by Lessor or any of its Affiliates to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or (at Lessor’s option) New York for the purpose of the set-off.	
 
 	(b)	If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated Lessor or Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	(c)	Notwithstanding any other provision of this Agreement, Lessor and its Affiliates shall not be obliged to pay any amount to Lessee under this Agreement or any of the Other Agreements so long as any sums which are then due from Lessee under this Agreement or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when Lessee has paid all such sums and cured all Events of Default, except to the extent that Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to clause 23.4(a).	
Time of Essence
 
23.5	The time stipulated in this Agreement for all payments by Lessee to Lessor and for the prompt performance of Lessee’s other obligations under this Agreement are of the essence of this Agreement.	
Entire Agreement
 
23.6	This Agreement constitutes the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft and supersedes all previous agreements in relation to that leasing. Any amendments to this Agreement must be in writing and signed on behalf of Lessor and Lessee.	
Rights of Third Parties
 
23.7	All rights expressed to be granted to each Indemnitee or Tax Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of that Indemnitee or Tax Indemnitee, and each Indemnitee or Tax Indemnitee is an express third party beneficiary hereof. Except for Lessor, Owner Participant, the Financing Parties, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of this Agreement. Without limiting the foregoing, Lessee agrees with Owner Participant that:	
 
 	(i)	Owner Participant is an express third party beneficiary of all of the obligations and liabilities of the Lessee under and in conformity with this Agreement, and all notices and communications given by Lessee to Lessor shall also be given to Owner Participant; and	
 
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 	(ii)	any approval, consent, waiver, amendment, supplement or other modification of this Agreement shall require the written consent or instruction of the Owner Participant to be binding against the Lessor and Owner Participant, and Owner Participant agrees that, where Lessor has agreed to give or not unreasonably withhold such consent or instruction, it shall give such consent or instruction or not unreasonably withhold such consent or instruction. For the avoidance of doubt, any instructions for an approval, consent, waiver, amendment, supplement or other modification of this Agreement issued by the Owner Participant to Lessor shall be binding on Lessor.	
 
23.8	Any Tax Indemnitee or Indemnitee who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by Lessee to or in favor of such Tax Indemnitee or Indemnitee.	
 
23.9	All terms of this Agreement may be varied, amended or otherwise released by an agreement between Lessor and Lessee without reference to any Indemnitee or Tax Indemnitee.	
Counterparts
 
23.10	This Agreement may be executed in two or more counterparts each of which will be deemed an original but all of which together will constitute one and the same agreement.	
Language
 
23.11	All notices, requests, direction and other communications to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.	
Confidentiality
 
23.12	This Agreement, the terms hereof and all non-public information obtained by either party about the other are confidential and are between Lessor and Lessee only. Lessor and the Lessee shall not, and shall procure that their respective officers, employees and agents shall not, disclose this Agreement, the terms hereof or such non public information to any third party (other than (a) to such party’s auditors, legal advisors, financial advisors and rating agencies; (b) as required in connection with any filing of this Agreement in accordance with clause 10.5; (c) in connection with Lessor’s potential sale, financing, refinancing of or related to the Aircraft and/or transfer or assignment of this Agreement (provided such potential transferee or financing party agrees in writing to keep such information confidential and executes an agreement regarding the same on no less favorable terms than those set forth herein); (d) as required for enforcement by either party of its rights and remedies with respect to this Agreement; or (e) as required by applicable Regulation without the prior written consent of the other party. If any disclosure will result in the Agreement becoming publicly available, Lessor and Lessee will cooperate with one another to obtain confidential treatment or limit the scope of disclosure as to the commercial terms and other material provisions of this Agreement.	
 
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Invalidity of any Provision
 
23.13	If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
Survival
 
23.14	All indemnities, representations, warranties and other obligations of Lessee shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement and/or the leasing of the Aircraft hereunder.	
Further Assurance
 
23.15   (a)	Each of the parties agree to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement, the transactions contemplated by this Agreement or any Other Agreement.	
 
 	(b)	The documented out-of-pocket costs and expenses of performing the acts contemplated by sub-clause (a) above shall be borne by Lessee.	
No Brokers
 
23.16	Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any Person (except the fees and expenses of a financial advisor to Lessee, for which fees and expenses Lessee shall be solely responsible).	
Chattel Paper
 
23.17	To the extent, if any, that this Agreement constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in this Agreement may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of this Agreement by the Financing Parties or Lessor, as the case may be.	
True Lease
 
23.18	The parties intend and agree that this Agreement:	
 
 	(a)	constitutes a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC;	
 
 	(b)	to the extent applicable, constitutes a “true lease” for United States federal income tax purposes and for purposes of article 188 of the Ley del Impusto Sobre la Renta ; and	
 
 	(c)	confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to Lessee under this Agreement.	
 
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Lessee shall not file a tax return that is inconsistent with the provisions of this clause.
Know Your Customer/OFAC Compliance
 
23.19	Anti-Terrorism Law:	
 
 	(a)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates is in violation of any Law relating to terrorism or money laundering ( Anti-Terrorism Laws ), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the Executive Order ), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the Patriot Act ).	
 
 	(b)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates is any of the following:	
 
 	(i)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(ii)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(iii)	a person with which Lessor and/or Owner Participant (without duplication) is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(iv)	a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or	
 
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 	(v)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control ( OFAC ) at its official website or any replacement website or other replacement official publication of such list.	
 
 	(c)	Lessee represents, warrants and agrees that neither Lessee nor any of its Affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b), (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.	
 
23.20	USA Patriot Act Notice:	
Lessee agrees that pursuant to the requirements of the Patriot Act, Lessor may obtain, verify, and record information from Lessee that identifies Lessee, which information may include the name and address of Lessee, and its officers, directors and shareholders, and other information that will allow Lessor and/or Owner Participant (without duplication) to identify Lessee in accordance and for purposes of compliance with the Patriot Act.
 
23.21	Statements of Owner Trustee: The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided, however, that this clause 23.21 shall not be construed to prohibit any action or proceeding against any party hereto for its own willful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided further, that nothing contained in this clause 23.21 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate. The foregoing provisions of this clause 23.21 shall survive the termination of this Agreement;	
 
24.	Notices	
 
24.1	Every notice, request, direction or other communication under this Agreement shall be in English and be in writing delivered personally or sent with an internationally recognized courier service or fax and shall be deemed to have been received:	
 
 	(a)	in the case of a letter when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date in the records of the Person who effected such delivery; or	
 
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 	(b)	in the case of a fax, in which case such notice, direction or other communication shall be deemed to have been received at the time of dispatch with confirmed transmission report stating the correct facsimile number and number of pages sent and that such transmission is “OK” or equivalent ( provided always that if the time of dispatch is not within normal business hours on a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day),	
provided always that where delivery by hand or by fax occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day.
 
24.2	Every notice, request, direction or other communication under this Agreement shall be sent:	
To Lessor at:

Address:	  	Wells Fargo Bank Northwest, National Association	
	  	299 South Main Street, 12th Floor	
	  	Salt Lake City, Utah 84111	
		
	  	Attention: Corporate Trust Services	
	  	Fascimile: +1 (801) 246-5053	
		
	  	With a copy to:	
		
	  	RBS Aerospace Limited	
	  	IFSC House	
	  	IFSC	
	  	Dublin 1	
	  	Ireland	
		
Attention:	  	Head of Transaction Management	
		
Facsimile:	  	+ 353 1 859 9230	
To Lessee at:

Address:	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	Mexico D.F. 01012	
	  	Mexico	
		
Attention:	  	General Counsel	
		
Facsimile:	  	+ 011 52 55 5261 6460	
or any substitute address or fax number or department or officer as the relevant party may notify to the other party by not less than five (5) Business Days’ notice.
 
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25.	Governing Law Jurisdiction and Waiver of Jury Trial	
Governing Law
 
25.1	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.	
Jurisdiction
 
25.2	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the corporate domicile ( domicilio social ) of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Operative Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
Process Agents
 
25.3     (a)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the New York courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by facsimile or prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessee at the address set forth in clause 24.2.	
 
 	(b)	Without prejudice to any mode of service, Lessor:	
 
 	(i)	appoints C.T. Corporation, 1111 Eighth Avenue, 13 th Floor, New York, New York 10011 as its agent for service of process relating to any proceedings before the courts described in clause 25.2 in connection with this Agreement and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessor of the process shall not invalidate the proceedings concerned; and	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing or by personal delivery of a copy of the process to Lessor’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail, or by personal delivery, of a copy of the process to Lessor at the address set forth in clause 24.2.	
 
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Waiver of Objections
 
25.4	Each of Lessee and Lessor:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in clause 25.2 on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in clause 25.2; and	
 
 	(iii)	agrees that a judgment or order of any court referred to in clause 25.2 in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction as if made by the highest court in that other jurisdiction and accordingly Lessee will not seek to, nor be entitled to, contest and/or delay and/or obstruct registration or enforcement of any such judgment and/or award and/or order on grounds of public policy or otherwise.	
No Alternative Jurisdictions
 
25.5	This clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Operative Document in any court other than as provided in clause 25.2 above.	
Waiver of Sovereign Immunity and Other Defenses
 
25.6	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
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 	(iii)	waives any requirement, of any kind whatsoever, for Lessor to provide any form of security in respect of the payment of any damages, costs, expenses or any other financial obligation resulting from the commencement or prosecution of proceedings or the making of or service of any order and Lessee undertakes (x) not to challenge the validity of any proceedings or the making of any orders without any requirement for the provision of such security (y) to advise any court upon Lessor’s request that Lessee requires no such security and (z) to provide security itself for any third party claims arising out of or in connection with such proceedings and/or orders.	
Waiver of Jury Trial
 
25.7	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.	
 
26.	Owner Participant and Lessee Undertakings	
 
26.1	By its execution of the Owner Participant Aircraft Lease Agreement Signature Page hereto, Owner Participant makes the agreements set forth thereon or in this Agreement and the representations and warranties in Part 3 of Schedule 3 hereof.	
 
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IN WITNESS WHEREOF Lessor and Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.
SIGNED on behalf of: 
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual 
capacity, except as expressly provided herein, but solely as Owner Trustee 

Name:	 	/s/ John Croasmun	
		
Title:	 	Vice President	
SIGNED on behalf of: 
CONCESIONARIA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

Name:	 	/s/ Alfonso Ascencio Triujeque	
		
Title:	 	General Counsel	
This signature page forms part of that certain Aircraft Lease Agreement made as of January 25, 2008 between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , as Lessor and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , as Lessee, relating to the leasing of one A319-133 aircraft bearing manufacturer’s serial number 3450.
 
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OWNER PARTICIPANT AIRCRAFT LEASE AGREEMENT (MSN 3450)
SIGNATURE PAGE
The undersigned Owner Participant hereby instructs the Owner Trustee to enter into this Agreement and further agrees as follows:
 
 	a.	so long as no Event of Default has occurred and is continuing, neither Owner Participant nor any Person lawfully claiming through it shall interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee during the Term. The lawful exercise by Owner Participant of its or Lessor’s rights in accordance with this Agreement will not however constitute such an interference;	
 
 	b.	it will comply with clause 22.3 of this Agreement with respect to a transfer of its interest under the Trust Agreement;	
 
 	c.	throughout the term of this Agreement, and subject to the terms and conditions of this Aircraft Lease Agreement, it will cause Lessor to pay and perform when due all of the obligations of Lessor under this Agreement (the “ Lessor Obligations ”) and to the extent, if any, that Lessor fails to pay or perform any Lessor Obligation when due, and subject to the terms and conditions of this Agreement, Lessee shall have a direct right of action against Owner Participant for the payment or performance of such Lessor Obligation; and	
 
 	d.	it will be bound by this Agreement.	

SIGNED on behalf of:	
RBS AEROSPACE LIMITED	
		
Name:	 	 	
		
Title:	 	 	
 
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Schedule 1
DEFINITIONS AND CONSTRUCTION
 
1.1	The following words and expressions have the respective meanings set forth below:	
Acceptable SDLC Bank Rating has the meaning given to it in clause 6.4(b);
Acceptance Certificate means a certificate of acceptance of the Aircraft in the Agreed Form;
Act means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof;
Affiliate means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company or any trust of which such Person or any of its Affiliates is a beneficiary;
Agreed Form means the form agreed between Lessor and Lessee;
Agreed Value means, from the Delivery Date to and excluding the first anniversary thereof, ***** and on the first anniversary of the Delivery Date and on each anniversary of the Delivery Date thereafter, such amount shall reduce to an amount equal to ***** of the amount previously in effect;
Agreement means this Aircraft Operating Lease Agreement together with its Schedules;
Airbus means Airbus Industrie SAS;
Aircraft means the aircraft described in Schedule 6 ( Description of Aircraft ), including all buyer furnished equipment and in-flight entertainment equipment (which term includes where the context admits a separate reference to all Engines, Parts and Aircraft Documents);
Aircraft Documents means the documents, data, aircraft manuals and technical records relating to the Aircraft at the time of Delivery and any other documents and records referred to in clause 12.2 ( Records ) and Schedule 11 ( Aircraft Documents at Redelivery ) and all additions, renewals, revisions and replacements from time to time made thereto in accordance with this Agreement;
Aircraft Purchase Agreement means the A320 Family Purchase Agreement dated as of October 28, 2005 between Parent and Airbus insofar as it relates to the Aircraft;
Aircraft Purchase Agreement Assignment means the aircraft purchase agreement assignment in form and substance acceptable to Lessor (acting reasonably) between Parent (as assignor) and Lessor (or such other person notified to Lessee as purchaser of the Aircraft) (as assignee) in relation to the Aircraft Purchase Agreement;
Airframe means the Aircraft, excluding the Engines and the Aircraft Documents;
Airframe 12 Year Block Structural Check means a block structural check including all 12 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tacks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Airframe 6 Year Block Structural Check means a block structural check including all 6 year and lesser structural inspections which shall also include all 6,000 Flight Hours, 4,500 Cycles, 20 month and lesser tasks ensuring that no schedule inspections are due within the next 6,000 Flight Hours, 4,500 Cycles and 20 month period in accordance with Lessee’s airworthiness authority, Approved Maintenance Program and as a minimum, the latest revision of the Manufacturers Maintenance Planning Document.
Airframe Warranty Assignment means the airframe warranty assignment entered into or to be entered into between Lessor and Lessee, and the related consent and agreement between Lessor, Lessee and the Manufacturer, in respect of the Aircraft in the Agreed Form;
Airworthiness Directive means any and all mandatory airworthiness directives issued by the French DGAC and applicable to the Aircraft, the Airframe, either Engine, any Part or the Aircraft Documents;
Approved Maintenance Performer means the Lessee insofar as maintenance other than Major Checks, the check scheduled to clear maintenance items for the next 6,000 Flight Hours, 4,500 Cycles and 20 months, and Engine Performance Restoration are concerned, and for such maintenance means any other Person (including Aeromantenimiento) that meets the requirements of being a Maintenance Performer, provided that it shall retain its EASA / JAA approval including for those which (1) Maintenance Reserves are provided and (2) for end of lease airframe C check maintenance work-scope package;
APU means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement title to which is transferred to Lessor in accordance with this Agreement;
APU Operating Hour means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down. For the purpose of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Performance Restoration (or since new if no previous overhaul has been accomplished with respect to the APU);
APU Performance Restoration means off-wing APU shop visits including disassembly, inspection, component repair and balancing, testing and reassembly of the relevant APU, accomplished in accordance with the APU manufacturer’s component maintenance manual, with a Scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 Flight Hours and 6,000 Cycles and 3 years;
Assumed Aircraft Flight Hour to Cycle Ratio means a Flight Hour to Cycle ratio of 1.8 to 1;
Aviation Authority means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
 	(a)	have control or supervision of civil aviation in that state; or	
 
 	(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft;	
 
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Back to Birth Traceability means in respect of any Part or part, original documentary evidence providing the part number and the unique serial number of such Part or part, and providing a detailed full record acceptable to an EASA regulatory standard but in any event having the following: (i) a removal/installation (‘on/off’) transaction history with the applicable hours and cycles at each on/off event up to and including installation of the Airframe and Engine; (ii) the original airworthiness tag document or other original record issued when the part was new such as the manufacturer’s tag certificate of conformity or readiness log document as appropriate and (iii) any other appropriate certified document or job card indicating hours, cycles or calendar time at each on/off event demonstrating an unbroken record of the hours, cycles or calendar time from date of manufacture of such part up to the relevant current time;
Bank means The Royal Bank of Scotland plc;
Bill of Sale means the warranty bill of sale transferring title to the Aircraft from Airbus to Lessor;
Breakage Costs means, without duplication, all costs, losses, premiums, penalties or out-of-pocket expenses, if any, incurred or suffered by Lessor or Owner Participant, any Affiliate of Lessor or Owner Participant or any Financing Party in liquidating or employing funds raised on any interbank market or internally by Lessor or Owner Participant or their respective Affiliates or otherwise in connection with the financing of Lessor’s or Owner Participant’s purchase or ownership of the Aircraft and/or the setting of the Rent and/or the unwinding or terminating or maintaining any swap agreement, interest rate agreement or other financial instrument relating in whole or in part to such financing and/or the leasing of the Aircraft hereunder, and/or any amounts receivable by Lessor or Owner Participant pursuant to this Agreement;
Business Day means:
 
 	(a)	in the case of payments, any day (other than a Saturday or Sunday) on which banks are open for business in New York; and	
 
 	(b)	in all other cases, any day (other than a Saturday or Sunday) on which banks are open for business in New York, London, Dublin and México City, México;	
Conditions Precedent means the conditions specified in Schedule 3 ( Conditions Precedent );
Consolidated Text means the Consolidated Text of the Convention and the Protocol attached to Resolution No. 1 of the Final Act of the Diplomatic Conference to adopt the Convention and the Protocol held under the auspices of ICAO and UNIDROIT at Cape Town, South Africa from 29 October to 16 November 2001;
Contracting State shall have the meaning given to it in the Consolidated Text;
Convention means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on November 16, 2001;
CPCP means corrosion prevention and control program;
Cycle means one take-off and landing of the Aircraft;
Damage Notification Threshold means *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Default means any Event of Default and any condition, event or circumstance which, with the giving of notice and/or lapse of time, would, if such time had elapsed at the time of the occurrence of such condition, event or circumstance, constitute an Event of Default;
Default Interest mans any interest paid or payable pursuant to clause 8.2;
Default Rate means a rate of interest per annum equal to LIBOR plus ***** per annum;
Delayed Delivery Event means the occurrence of any of the following:
 
 	(a)	war, civil disturbance or act of any Government Entity, natural disaster, labor disputes, unexpected shortage of labor, materials or facilities affecting the Aircraft; or	
 
 	(b)	any defect or non-conformity with the Delivery Condition Specification notified by Lessee to Lessor during the Pre-Delivery Procedure; or	
 
 	(c)	any failure to deliver the Aircraft by any Person, including any seller or manufacturer, with possession or control of the Aircraft, whether or not a breach of contract by any Person, to Lessor for any reason (other than because of any default of Lessor); or	
 
 	(d)	any purchase agreement for the Aircraft terminating prior to Delivery (other than because of any default of Lessor); or	
 
 	(e)	any delays that Lessor cannot reasonably control in obtaining the Aircraft or any equipment or services for the Aircraft; or	
 
 	(f)	any other cause which is beyond the reasonable control of Lessor;	
Delivery means delivery of the Aircraft on lease by Lessor to Lessee under this Agreement;
Delivery Condition Specification means the condition detailed in Schedule 6;
Delivery Date means the date on which Delivery occurs;
Delivery Location means Toulouse, France, Hamburg, Germany or such other location as may be agreed by Lessor and Lessee;
Deposit *****
Deregistration Power of Attorney means an irrevocable power of attorney in Agreed Form authorizing Lessor or such other Person as Lessor may from time to time specify to do any thing or act or to give any consent or approval which be required to obtain deregistration of the Aircraft and export the Aircraft from the Habitual Base upon termination of the leasing of the Aircraft under this Agreement, and, if applicable, duly notarized and legalized;
Discount Rate means ***** per annum;
Dollars, $ and US$ means the lawful currency of the United States of America and, in relation to all payments in dollars to be made under or pursuant to this Agreement, in immediately available funds;
EASA means the European Aviation Safety Agency and any successor thereof;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Engine means, whether or not for the time being installed on the Aircraft:
 
 	(a)	the engines specified in the Acceptance Certificate; or	
 
 	(b)	any engine which has replaced that engine, title to which has, or should have, passed to Lessor in accordance with this Agreement,	
and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Cycle means, with respect to an Engine, one take off and landing of the airframe on which that Engine is installed.
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground;
Engine Performance Restoration shall mean off-wing engine shop visits including performance restoration or full overhaul of all core modules of the relevant Engine, accomplished in accordance with the Engine manufacturer’s workscope planning document as customized for Lessee, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 7,500 Cycles and 3 years and on-condition release of no less than 11,000 Flight Hours and 7,500 Cycles and 3 years;
Engine Thrust means the “Engine Thrust Rating” of the Engines as set out in Schedule 6;
Engine Total Loss means the occurrence with respect to an Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Total Loss;
Engine Warranties Assignment means the assignment entered into or to be entered into on or prior to the Delivery Date in relation to the Engines between Lessee as assignor and Lessee as assignee;
Equipment Change has the meaning given to it in clause 13.7 ( Equipment Change );
Eurocontrol means the European Organisation for the Safety of Air Navigation;
Event of Default means any event or circumstance specified in clause 20 ( Events of Default );
Excluded Country means any country to which the export and/or use of Airbus aircraft is not permitted under any sanctions orders or legislation from time to time promulgated by any of the United Nations, the European Union or any Government Entity of the State of Registration or any country having jurisdiction over Lessor or any Affiliate of Lessor, the effect of which prohibits or restricts the export and/or use of Airbus aircraft to and from and within to such country;
Excluded Maintenance has the meaning given to it in Schedule 8 ( Maintenance Rent );
Expiry Date means the date determined in accordance with clause 4 ( Expiry Date );
FAA means the Federal Aviation Administration of the United States of America and any successor thereof;
 
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FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations;
Final Inspection has the meaning given to it in Schedule 13 ( Return Conditions );
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised; or	
 
 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; or	
 
 	(c)	the acquisition cost of any asset, to the extent payable before or after the time of acquisition or possession not being indebtedness in respect of the purchase or acquisition of goods and/or services in the ordinary course payment for which is deferred for a period of not more than thirty (30) days or in respect of goods and services the purchase price is not material, ninety (90) days; or	
 
 	(d)	any capital amount in respect of any finance lease payable by Lessee which would be shown as an obligation in a balance sheet prepared in accordance with accounting principles generally accepted in Lessee’s state of incorporation; or	
 
 	(e)	any guarantee, indemnity or similar assurance against financial loss issued in favor of any Person in respect of any obligation of a kind referred to in paragraph (a) to (d) above;	
Financing Parties means any Affiliate of Lessor or Owner Participant who provides finance to Lessor or Owner Participant in connection with Lessor’s or Owner Participant’s acquisition of the Aircraft and/or any other Person or Persons from time to time notified by Lessor or Owner Participant to Lessee as providing finance to Lessor or Owner Participant in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, head lease or otherwise or acting as agent or security trustee in relation to any such financing;
Financing Statements means Uniform Commercial Code Financing Statements in respect of this Agreement and the Aircraft and Engines leased hereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee is located (as determined pursuant to Section 9-307 of the Uniform Commercial Code as in effect in such state) and such other jurisdictions as Lessor shall reasonably require;
Flight Hour means each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground;
French DGAC means la Direction Générale de l’Aviation Civile;
Geneva Convention means the Convention on the International Recognition of Rights in Aircraft signed at Geneva, Switzerland on 19 June 1948, and amended from time to time;
Government Entity means:
 
 	(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
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 	(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted;	
 
 	(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant; and	
 
 	(d)	to the extent that an airport or air navigation service is not run or provided by an entity which falls within sub-paragraph (a) - (c) above, the relevant such entity, body, corporate, organization or institution to the extent it has authority over the Aircraft or the Lessee from time to time;	
Gross Negligence means, in relation to an Indemnitee or Tax Indemnitee, gross negligence as determined under New York law;
Habitual Base means ***** or (i) if a sub-lease complying with the terms of clause 11.3 this Agreement is in effect, ***** or (ii) such other base agreed by Lessor;
Holding Company means, in relation to any Person, any other Person of which it is a Subsidiary;
IATA means the International Air Transport Association;
Indemnitees means Lessor, Owner Participant, the Financing Parties, each of their Affiliates and each of their respective successors and permitted assigns, and each of their shareholders, Affiliates, contractors performing services at Lessor’s direction in respect of the Aircraft or this Agreement, trustees, beneficiaries, members, directors, officers, servants, agents and employees;
Insurances means insurances and any reinsurances in respect of the Aircraft described in and complying with the requirements of clause 16 ( Insurances ) and Schedule 5 ( Insurance Requirements );
International Interest shall have the meaning given to such term in the Consolidated Text;
International Registry shall have the meaning given to such term in the Consolidated Text;
JAA means the European Joint Aviation Authority and any successor thereof;
JAR means the Joint Aviation Requirements of the JAA;
Landing Gear means the complete strut assembly, consisting of the inner and outer cylinders of each main landing gear and nose landing gear and all associated parts that comprise each landing gear assembly, as listed in the Manuals and Technical Records including side struts, braces, and uplock and downlock mechanisms but excluding, without limitation, rotable parts such as wheels, tires, brakes, transducers and switch assemblies;
Landing Gear Overhaul means an overhaul accomplished in accordance with the manufacturer’s component maintenance manual and with a calendar release in respect of Life Limited Parts, Airworthiness Directives, corrosion prevention and control program CPCP requirements of no less than 20,000 cycles and 10 years;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Law includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of Persons to whom the directive, regulation, request or requirement is addressed);
LBA means the Luftfahaut-Bundesamt or any successor agency having jurisdiction over civil aviation in the Federal Republic of Germany;
Lessee Conditions Precedent means the Conditions Precedent to be satisfied by Lessee, listed at paragraph 1 of Schedule 3 ( Conditions Precedent );
Lessee’s Certificate means a certificate in the Agreed Form to be provided by Lessee to Lessor;
Lessor Condition Precedent means the Conditions Precedent to be satisfied by Lessor, listed at paragraph 3 of Schedule 3 ( Conditions Precedent );
Lessor Lien means:
 
 	(a)	any Security Interest from time to time created by or through Lessor, Owner Participant, any Affiliate of Lessor or Owner Participant or any Financing Party in connection with the financing of the Aircraft;	
 
 	(b)	any other Security Interest in respect of the Aircraft which results from acts of or claims against Lessor or Owner Participant or their respective Affiliates or any Financing Party not related to the transactions contemplated by or permitted under this Agreement or the other Operative Documents; and	
 
 	(c)	any Security Interest in respect of the Aircraft for Lessor Taxes;	
Lessor Taxes means Taxes specified in clause 21.3(b);
Letter of Credit means a letter of credit provided pursuant to and in accordance with clause 6.3;
LIBOR means, in relation to any period and amount in respect of which an interest rate falls to be determined pursuant to this Agreement:
 
 	(a)	the British Banking Association (BBA) US Dollar fixing of the London Inter-Bank Offered Rate, as appearing on page BBAM1 of Bloomberg (or successor or replacement page) or equivalent page published by an alternative information provider for the specified period at or around 11:00 a.m. on the Quotation Date therefor; or	
 
 	(b)	if no such rate is available, the rate determined by Lessor to be the arithmetic mean (rounded upwards, if not already such a multiple, to the nearest whole multiple of one sixteenth of one per cent.) of the rates (as notified to Lessor) at which each of the Reference Banks (on the basis that at least two Reference Banks so notify Lessor) was offering to prime banks in the London Interbank Market, on the Quotation Date, deposits in dollars for the specified period;	
for the purposes of this definition, specified period means the period having a duration equal to or as close as practicable to the relevant period in respect of which LIBOR falls to be determined;
 
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Life Limited Part means any Part that has a pre-determined life limit as mandated by Manufacturer, the Aviation Authority, the French DGAC or any other Government Entity having jurisdiction, which requires any such Part to be discarded upon reaching such life limit;
Loss means any loss, liability, action, claim, proceeding, judgment, penalty, fine, damages, fee, cost or expense (including legal fees and expenses, including legal fees and expenses incurred to enforce any applicable indemnity);
Maintenance Contributions shall have the meaning given to it in paragraph 1 of Schedule 14 ( Maintenance Contributions );
Maintenance Performer means such Person approved by JAA/EASA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines which Person shall be agreed by Lessor and Lessee to have internationally recognized standing and reputation with first-class experience, first class facilities and suitable equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or in the case of the Engines, engines;
Maintenance Program means an Air Authority approved Maintenance Program for the Aircraft based on the Manufacturer’s Maintenance Planning Document and in accordance with Manufacturer’s and/or the OEM’s specifications, requirements, mandatory service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on condition maintenance of Airframe, Engines and Parts, including (but not limited to) servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments;
Maintenance Rent means together the Airframe Rent, the Engine Performance Restoration Rent, the Engine LLP Rent, the Landing Gear Overhaul Rent and the APU Performance Restoration Rent (each as defined in Part A of Schedule 8 ( Maintenance Rent ));
Major Checks means an Airframe 6 Year Block Structural Check, and an Airframe 12 Year Block Structural Check, and any similar check as determined by the Manufacturer;
Mandatory Orders means all and any Aviation Authority and JAA/EASA mandatory orders and regulations applicable to the Aircraft, any Engine or any Part;
Manufacturer means, in relation to the Airframe, Airbus or, in relation to the Engines, International Aero Engines A.G;
Manufacturer’s Maintenance Planning Document or MPD means the planning document relating to recommended maintenance of the Aircraft issued by Manufacturer, as the same may from time to time be amended, modified or supplemented;
Master Agreement means the Master Agreement dated as of March 12, 2007 between Parent, Lessor and Lessee relating to the purchase and leasing of the Aircraft hereunder and the aircraft covered by certain Other Agreements, as amended and supplemented by Master Agreement Supplement No. 1 dated as of January 25, 2008 between Parent, Owner Participant and Lessee.
Material Lessee Affiliate means the Parent and each Subsidiary of the Parent which as of the date of the then most recent quarterly financial statements prior to any date of determination accounts for more than 5% of the Parent’s consolidated total assets or more than 5% of the Parent’s consolidated total revenue or more than 5% of the Parent’s consolidated net income.
 
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Mexico means the United Mexican States.
Minimum Liability Coverage means ***** for general liability, and ***** for war risk liability, each occurrence, each aircraft;
MR Rates means together the Airframe Rent Rate, the Engine Performance Restoration Rate, the Engine LLP Rent Rate, the Landing Gear Overhaul Rent Rate and the APU Performance Restoration Rate (each as defined in Part A of Schedule 8 ( Maintenance Rent ), and MR Rate shall mean any of them as the context may require;
OEM means in relation to any Part or part the original equipment manufacturer of such Part or part;
Operational Derate means operation of an Engine below the maximum thrust level for such Engine;
Operative Documents means (a) this Agreement, the Acceptance Certificate, the Deregistration Power of Attorney, the Letter of Credit, the Participation Agreement, the Master Agreement, the Airframe Warranty Assignment, Engine Warranties Assignment and the Aircraft Purchase Agreement Assignment, together with (b) any schedules, documents, notices or certificates from time to time executed or issued by Lessee pursuant thereto and (c) any side letters, supplements, amendments or modifications to any of the foregoing from time to time executed or agreed to by Lessee which (other than in the case of amendments to Operative Documents, which shall automatically be Operative Documents), are agreed in writing by Lessor and Lessee to be Operative Documents for the purposes of this Agreement;
Other Agreements means the aircraft lease agreements relating to ***** aircraft bearing manufacturer’s serial number 3045, 3069, 3253, 3279 and 3672, and any other aircraft lease agreement or other agreement from time to time entered into between Lessor (or any Affiliate of Lessor, or Owner Participant, including a trust of which the beneficiary is Owner Participant or an Affiliate of Owner Participant) and Lessee (or any Affiliate of Lessee); provided, however, that solely for the purpose of Clause 20.1(e)(iv), Other Agreements includes any aircraft lease agreement or other agreement managed or serviced by Owner Participant or any Affiliate of Owner Participant;
Other Aircraft has the meaning given to it in clause 13.5 ( Installation of Engines and Parts on Other Aircraft );
Owner Participant means RBS Aerospace Limited, a company incorporated under the laws of Ireland, whose registered office is at IFSC House, IFSC, Dublin 1, Ireland;
Owner Trustee means Wells Fargo Bank Northwest, National Association, as national banking association, in its capacity as Owner Trustee;
Parent means Controladora Vuela Compañia de Aviacion S.A. de C.V.;
Part means, whether or not for the time being installed on the Aircraft:
 
 	(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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but excludes any such items title to which has, or should have, passed to Lessee pursuant to this Agreement;
Participation Agreement means the participation agreement dated on even date herewith between Owner Participant and Lessee, including the consent and agreement thereto between Owner Participant, Lessee and the Manufacturer in respect of the Aircraft in the Agreed Form;
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, carrier, hangarkeeper, airport, air navigation authority or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been taken by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of such lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on Lessor or any other Indemnitee;
 
 	(c)	any Lessor Lien; and	
 
 	(d)	any lien arising out of any judgment or award against Lessee provided such judgment or award is discharged, vacated or the execution thereof stayed pending appeal within thirty (30) days of the date of entry thereof and so long as during any such period such judgment or award does not involve any material risk of the sale, forfeiture or other loss of the Aircraft or any risk of criminal or unindemnified civil liability against Lessor or any other Indemnitees.	
Permitted Sub-Lessee has the meaning given to it in clause 11.3;
Person means any individual, firm, partnership, joint venture, trust, corporation, Government Entity, corporate or business association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and Persons shall be construed accordingly;
Post-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
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 	(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and Certificate of Registration ( Oficio de Asignación de Matrícula ) for the Aircraft issued by the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ), which shall be obtained (and a copy provided to Lessor) within five (5) Business Days following the Delivery Date;	
 
 	(c)	temporary import license for the Aircraft in Mexico, which shall be obtained (and evidence thereof provided to Lessor), together with evidence that such permit has been filed with the Air Authority, that Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into Mexico is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
 	(d)	definitive registration of this Agreement (including the Acceptance Certificate) and the DGAC Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show Lessor as owner and lessor and Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to Lessor) within forty-five (45) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the DGAC Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to Lessor within ten (10) Business Days following the Delivery Date; and	
 
 	(e)	a copy of Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to Lessee’s fleet, within 30 days following the Delivery Date.	
Pre-Delivery Authorizations and Filings means each of the following:
 
 	(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
 	(b)	evidence that Lessee has received from the Department of Civil Aviation ( Dirección General de Aeronáutica Civil ) a temporary Mexican registration mark;	
 
 	(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as Lessor may reasonably request; and	
 
 	(d)	evidence of a temporary registration certificate issued by the Aviation Authority.	
Protocol means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November 2001;
Quotation Date means, in relation to any period in respect of which LIBOR is to be determined, the day falling two (2) Business Days before the beginning of such period;
 
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Redelivery Date means the date on which the Aircraft is redelivered by Lessee to Lessor in accordance with the terms of this Agreement;
Redelivery Location means Toluca Airport, México or, if Lessee so notifies Lessor not less than 45 days prior to the Scheduled Expiry Date, El Salvador International Airport, El Salvador, or such other location as may be agreed by Lessor and Lessee;
Redelivery Maintenance Payment Adjustments means all adjustments to be made pursuant to Schedule 12 ( Redelivery Maintenance Payment Adjustments );
Reference Banks means The Royal Bank of Scotland plc, Barclays Bank plc and Citibank N.A.;
Regulation means any Law or regulation of any governmental entity, official directive or mandatory requirement which applies to Lessee or the Aircraft and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor;
Related Relevant Period has the meaning given to it in clause 5.3(d) ( Rent );
Relevant Period has the meaning given to it in clause 5.3(a) ( Rent );
Removed Engines has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Removed Part has the meaning given to it in clause 13.2 ( Removed Engines and Parts );
Rent means all amounts payable pursuant to clause 5 ( Rent );
Rent Adjustment Factor means the rent adjustment factors set out in Schedule 4 ( Rent Adjustment Factors );
Rent Date means the first day of each Rent Period;
Rent Period means each period ascertained in accordance with clause 5.1 ( Rent Periods );
Replacement Engine means a replacement engine complying with clause 13.6 ( Permanent Replacement of Engines and Parts );
Return Conditions means the conditions specified in Schedule 13 ( Return Conditions );
Scheduled Delivery Date means the date in the Scheduled Delivery Month notified by Airbus or Parent to Lessor, at least 5 Business Days in advance thereof, as the Scheduled Delivery Date under the Aircraft Purchase Agreement;
Scheduled Delivery Month means March, 2008;
Scheduled Expiry Date means the day immediately before the day falling 84 months after the Delivery Date;
Security Interest means any mortgage, charge, pledge, lien, encumbrance, assignment, lease, sublease, hypothecation, right of set-off or any other agreement or arrangement having the effect of conferring security or creating an encumbrance;
State of Incorporation means México;
 
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State of Registration means México or any other country in which the Aircraft is from time to time registered in accordance with clause 10.5 ( Registration and Protection );
Subsidiary means, in reference to any Person:
 
 	(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of such Person in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
 	(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital or of which another has the ability directly or indirectly to appoint or remove more than 50 per cent of the directors with voting rights or officers or of which another has the ability to give effective directions with respect to and control the management and operational and financial policies and decisions of such person which the directors or other equivalent officers of such person are obliged to comply with; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation;	
Tax Indemnitee means Lessor, Owner Participant, their respective Affiliates and each Financing Party, if any;
Taxes means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, license, corporation, capital gains, export/import, income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency, together with any penalties, additions to tax, fines or interest thereon, and Tax and Taxation shall be construed accordingly;
Technical Status Report means a monthly report on the operation of the Aircraft Engines and Parts including Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the Agreed Form;
Term means the period commencing on the Delivery Date and ending on the Expiry Date;
Total Loss means, with respect to the Aircraft (including for the purposes of this definition the Airframe) or an Engine:
 
 	(a)	the actual, constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	the Aircraft or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
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 	(c)	the requisition of title, confiscation, forfeiture or other compulsory acquisition of title for any reason of the Aircraft or any Engine by the government of the State of Registration or any other authority (whether de jure or de facto); or	
 
 	(d)	the hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine which deprives any Person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days or such lesser number of days as ends on the Expiry Date;	
Total Loss Date means with respect to the Aircraft (including for the purposes of this definition, the Airframe) or an Engine:
 
 	(a)	in the case of an actual total loss or destruction, damage beyond economic repair of the Aircraft or any Engine, or the Aircraft or an Engine being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);	
 
 	(b)	in the case of a constructive, compromised, arranged or agreed total loss of the Aircraft or any Engine, whichever shall be the earlier of (i) the date being sixty (60) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;	
 
 	(c)	in the case of requisition for title, confiscation, forfeiture or other compulsory acquisition or similar event of the Aircraft or any Engine by the government of the State of Registration or any other authority, the date on which the same takes effect; and	
 
 	(d)	in the case of hi-jacking, theft, disappearance, seizure or requisition for use or hire of the Aircraft or any Engine, the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss and (ii) the date on which the Insurers make payment on the basis of a Total Loss;	
Trust Estate has the meaning set out in the Trust Agreement (MSN 3450) for that certain A319-133 Aircraft dated on or about January 25, 2008 between Owner Trustee and Owner Participant; and
UCC means the Uniform Commercial Code as enacted in the State of New York or, if the laws of another state of the United States so provide, as enacted in such state.
Construction and Usage
 
1.2      (a)	References in this Agreement to:	
 
 	(i)	any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;	
 
 	(ii)	“Lessor” or “Lessee” include any assignee or successor in title to Lessor or Lessee respectively (subject to the provisions of clause 22);	
 
 	(iii)	any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;	
 
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 	(iv)	an “agreement” also include a concession, contract, deed, franchise, license, treaty or undertaking (in each case, whether oral or written);	
 
 	(v)	the “assets” of any Person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);	
 
 	(vi)	“month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and references to “months” shall be construed accordingly); and	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
 	(b)	Headings are for ease of reference only.	
 
 	(c)	Where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.	
 
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Schedule 2
REPRESENTATIONS AND WARRANTIES
 
1.	Lessee’s Representations and Warranties	
Lessee represents and warrants to Lessor and Owner Participant on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessee is a sociedad anónima de capital variable duly incorporated and validly existing and in good standing under the laws of the State of Incorporation;	
 
 	(b)	Power and Authority : (i) Lessee and each relevant Lessee Affiliate has the corporate power and authority to carry on its business as presently being conducted and to enter into and perform its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, (ii) Lessee and each relevant Lessee Affiliate has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and (iii) this Agreement and each other Operative Document has been duly executed and delivered by Lessee or such Lessee Affiliate;	
 
 	(c)	Legal validity : this Agreement and each other Operative Document constitutes legal, valid and binding obligations of Lessee and each relevant Lessee Affiliate party thereto, enforceable against Lessee or such Lessee Affiliate in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy and/or similar laws affecting creditors’ rights generally or (ii) general principles of equity;	
 
 	(d)	Non-conflict : the entry into and performance by Lessee and each relevant Lessee Affiliate of, and the transactions contemplated by, this Agreement and each other Operative Document do not and will not: (i) conflict with any Laws or Regulations applicable to Lessee or such Lessee Affiliate; or (ii) conflict with the constitutional documents ( estatutos sociales ) of Lessee or such Lessee Affiliate; or (iii) conflict with or result in default under any document which is binding upon Lessee or such Lessee Affiliate or any of its assets nor result in the creation of any Security Interest over any of its assets (other than as contemplated hereby);	
 
 	(e)	Licenses and permits : Lessee and each relevant Lessee Affiliate holds all licenses, certificates, permits and approvals necessary for the conduct of its business and the performance of its obligations under this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party;	
 
 	(f)	Approvals and Consents : except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other authorizations, approvals, consents and notifications required by Lessee and any such relevant Lessee Affiliate in connection with the entry into, performance, validity and enforceability of, this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party and the transactions contemplated by this Agreement and each other Operative Document to which Lessee or such Lessee Affiliate is a party, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
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 	(g)	Registrations and Filings : except for the Post-Delivery Authorizations and Filings, no filing or recording of any instrument or document is necessary or advisable under the laws of the State of Incorporation, the State of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement or to establish, perfect or protect the rights and interests of Lessor in the Aircraft and this Agreement against Lessee and all other Persons;	
 
 	(h)	Export : no approvals, licenses or consents are necessary to enable Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement;	
 
 	(i)	Excluded Countries : Lessee does not hold a contract or other obligation to operate the Aircraft to or from any country which is an Excluded Country;	
 
 	(j)	Financial Statements : the financial statements delivered to Lessor pursuant to paragraph 1.2(i) of Schedule 3 ( Conditions Precedent ) fairly present the financial condition of Lessee as at such date and the results of its operations for the period ended on such date, all in accordance with generally accepted accounting principles in the State of Incorporation applied on a consistent basis;	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or prospects of the Lessee and its Affiliates on the part of the Lessee or its Affiliates since the date of the financial statements referred to in paragraph (j) above or in the consolidated financial condition of Lessee or its Affiliates which would materially adversely affect the ability of Lessee or any Lessee Affiliate to perform its obligations under this Agreement or any other Operative Document;	
 
 	(l)	No Litigation : no litigation, arbitration or administrative proceedings are pending or, to Lessee’s knowledge, threatened before any court or administrative agency against Lessee or any Lessee Affiliates which, if adversely determined, would have a material adverse effect upon Lessee’s or such Lessee Affiliate’s financial condition or business or its ability to perform its obligations under this Agreement or any other Operative Document;	
 
 	(m)	No Default : no Default has occurred and is continuing or might result from the entry into or performance of this Agreement by Lessee;	
 
 	(n)	Full Disclosure : each of the Operative Documents and any other document, certificate or statement furnished to Lessor by or on behalf of Lessee in connection with the transactions contemplated hereby or thereby (including, without limitation, financial information) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; all forecasts and opinions contained therein were made in good faith and, if applicable, based upon assumptions deemed reasonable by Lessee;	
 
 	(o)	Pari Passu : the obligations of Lessee and of each relevant Lessee Affiliate under this Agreement or any other Operative Document are direct and general obligations and rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee or such Lessee Affiliate, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
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 	(p)	No Immunity : Lessee and each relevant Lessee Affiliate is subject to civil commercial law with respect to its obligations under this Agreement and each other Operative Document, neither Lessee nor any Lessee Affiliate nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement or any other Operative Document by Lessee and by each relevant Lessee Affiliate constitute private and commercial acts;	
 
 	(q)	Import : all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid;	
 
 	(r)	Location : Lessee’s location (within the meaning of Section 9-307 of the UCC) is as set forth in clause 10.4(h);	
 
 	(s)	Tax Election : Prior to or on the Delivery Date, if such law or a successor or similar law is in effect, Lessee will have duly made an election under Article 25 of the regulations to the Mexican Assets Tax Law ( Ley del Impuesto al Activo ) or any similar law to be treated as the owner of the Aircraft for the purpose of the application of the tax on assets imposed by that law (or any successor or similar law), including submission of a letter to the Mexican Ministry of Finance and Public Credit to effectuate and confirm such election; and	
 
 	(t)	Withholding Tax : Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable Withholding Tax at a rate, as of the date of this Agreement, of ***** and the provisions of clause 21 requiring Lessee to “gross-up” Lessor for such Withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of Lessee.	
 
2.	Lessor’s Representation and Warranties	
Lessor, in its capacity and (but only as provided in clause (b) and (c) below to the extent that it relates to the Owner Trustee) as Owner Trustee, represents and warrants to Lessee and Owner Participant on the date of execution of this Agreement and on the Delivery Date in each case by reference to the facts and circumstances existing on such date that:
 
 	(a)	Status : Lessor, in its individual capacity, is a national banking association duly organised and validly existing in good standing under the laws of the United States, has full corporate power and authority to carry on its business as so conducted, has the corporate power and authority to execute and deliver the Trust Agreement, has the corporate power and authority to carry out the terms of the Trust Agreement and has the corporate power and authority to execute and deliver and to carry out the terms of this Agreement;	
 
 	(b)	Power and Authority : this Agreement has been duly authorized by all necessary corporate action on the part of Owner Trustee, has been duly executed and delivered by Owner Trustee and constitutes the valid, legal and binding obligation of Owner Trustee enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(c)	Non-conflict : the entry into and performance by Lessor of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Lessor; or (ii) conflict with the constitutional documents of Lessor; or (iii) conflict with or result in default under any document which is binding upon Lessor or any of its assets nor result in the creation of any Security Interest over any of its assets; and	
 
 	(d)	Approvals and Consents : no consent, approval, order or authorization of giving of notice to, or registration with, or taking of any other action in respect of any Utah state or local governmental authority or agency or any United States federal governmental authority or agency regulating the trust powers of the Owner Trustee in its individual capacity is required for the execution and delivery of or the carrying out by, the Owner Trustee, in its individual capacity or as Owner Trustee, as the case may be, of any of the transactions contemplated hereby or by the Trust Agreement, other than any such consent, approval, order, authorization registration, notice or action as has been duly obtained, given or taken.	
 
3.	Owner Participant’s Representation and Warranties	
Owner Participant hereby represents and warrants to Lessee and Owner Trustee that as of the Effective Time:
 
 	(a)	Status : Owner Participant is a company incorporated and validly existing under the laws of Ireland and has the power and authority to enter into and to perform its obligations under this Agreement;	
 
 	(b)	Power and Authority : this Agreement has been duly authorized by all necessary corporate action on the part of Owner Participant, has been duly executed and delivered by Owner Participant and constitutes the valid, legal and binding obligation of Owner Participant enforceable in accordance with its terms except insofar as enforceability may be limited by (i) applicable bankruptcy and similar laws afflicting creditors’ rights generally or (ii) general principles of equity; and	
 
 	(c)	Non-conflict : the entry into and performance by Owner Participant of, and the transactions contemplated by, this Agreement does not and will not: (i) conflict with any Laws or Regulations applicable to Owner Participant; or (ii) conflict with the constitutional documents of Owner Participant; or (iii) conflict with or result in default under any document which is binding upon Owner Participant or any of its assets nor result in the creation of any Security Interest over any of its assets.	
 
4.	Survival	
The representations and warranties of Lessee pursuant to paragraph 1 of this Schedule 2 ( Representations and Warranties ) shall survive the execution of this Agreement and Delivery.
 
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Schedule 3
CONDITIONS PRECEDENT
Conditions Precedent to be satisfied by the Lessee
1. Lessor’s obligations to deliver and lease the Aircraft to Lessee are subject to the satisfaction of the conditions precedent set out in paragraph 1 to this Schedule 3 (the Lessee Conditions Precedent ). All documents delivered to Lessor pursuant to paragraph 1 of this Schedule 3 will be in English and if not in English will be accompanied by a certified English translation.
 
1.1	Pre Execution Conditions Precedent : On or before the date of this Agreement Lessee shall furnish the following to Lessor in each case in form and substance satisfactory to the Lessor (acting reasonably):	
 
 	(a)	Signing Authority : written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on Lessee’s or the relevant Lessee Affiliate’s behalf, and a specimen of the signature of each Person authorized to execute the Agreement on behalf of Lessee and each relevant Lessee Affiliate;	
 
 	(b)	Know Your Customer : all such documentation and information from Lessee and each relevant Lessee Affiliate as requested by Lessor in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to Lessor in its sole and absolute discretion;	
 
 	(c)	Process Agent Letter : from the process agent appointed by Lessee accepting such appointment, together with an irrevocable power of attorney for lawsuits and collections granted to such process agent, and duly granted before a Mexican notary public under Mexican law;	
 
 	(d)	Due Execution Opinion : an opinion issued by independent counsel acceptable to Lessor in the State of Incorporation confirming the due execution of the Agreement and each other Operative Document by Lessee and each relevant Lessee Affiliate, and that the Agreement and each other Operative Document constitutes the legal valid and binding obligations of Lessee and each relevant Lessee Affiliate enforceable in accordance with its terms subject to bankruptcy, insolvency and similar laws affecting the rights of creditors generally and general principles of equity;	
 
 	(e)	Approvals : evidence of the issue of each approval, license and consent (other than the Post Delivery Authorizations and Filings) which may be required in relation to or in connection with the remittance to Lessor in Dollars of all amounts payable under this Agreement and each other Operative Document or the performance by Lessee and each relevant Lessee Affiliate of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion referred to in paragraph 1.1(d).	
 
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Pre Delivery Conditions Precedent
 
1.2	On or before the Scheduled Delivery Date, Lessee shall provide the following each in full force as of the Delivery Date and each in form and substance satisfactory to Lessor (acting reasonably):	
 
 	(a)	Corporate Documents : (to the extent not provided pursuant to paragraph 1.1(a)) a certified copy of (i) the constitutional documents ( estatutos sociales ) of Lessee and each relevant Lessee Affiliate, (ii) the resolutions of the board of directors of Lessee and of each relevant Lessee Affiliate or other written evidence of appropriate corporate action authorizing the execution, delivery and performance of this Agreement and each other Operative Document and the leasing of the Aircraft hereunder and appointing a specified Person or Persons to execute this Agreement and each other Operative Document on its behalf and each other Operative Document and (iii) a specimen of the signature of each Person authorized to execute the Agreement and each other Operative Document on behalf of Lessee and of each relevant Lessee Affiliate;	
 
 	(b)	Opinion : a legal opinion or opinions issued by independent legal counsel acceptable to Lessor in the State of Incorporation and the State of Registration substantially in the Agreed Form;	
 
 	(c)	Approvals and consents : evidence of the issue of each authorization, approval, consent and notification which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and under each other Operative Document or the performance by Lessee of any of its other obligations hereunder or thereunder or, if no such approvals are required, a statement to that effect included in the legal opinion described in paragraph 1.2(b);	
 
 	(d)	Licenses : copies of Lessee’s air transport license, air operator’s certificates, concession and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft;	
 
 	(e)	Intentionally Left Blank;	
 
 	(f)	Air Traffic Control Letter : a letter in Agreed Form from Lessee addressed to Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares, and each other relevant air traffic control authority or airport authority pursuant to which Lessee authorizes the addressee to issue to Lessor, upon Lessor’s request at any time that Lessor, following consultation with Lessee (unless a Default exists), reasonably believes Lessee may not have paid any such sum when due , a statement of account of all sums due by Lessee to such authority in respect of all aircraft (including the Aircraft) operated by Lessee, such letter to be in the Agreed Form;	
 
 	(g)	Deregistration Power of Attorney : the Deregistration Power of Attorney, in Spanish and in English, duly notarized and legalized;	
 
 	(h)	Insurance : a certificate of insurance and reinsurance evidencing the due compliance by Lessee with the insurances required to be maintained pursuant to this Agreement together with a broker’s letter of undertaking;	
 
 	(i)	Financial Statements : the balance sheet of Lessee as of December 31, 2006 and its profit and loss account, cashflow statement and the notes to its financial statements in each case relating to the fiscal year then ended and all certified by the independent auditors of Lessee;	
 
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 	(j)	Payments : all sums due to Lessor under this Agreement on or before the Delivery Date including the first payment of Rent and the Deposit;	
 
 	(k)	Maintenance : a copy of the preamble and matrix from the Agreed Maintenance Program;	
 
 	(l)	Acceptance Certificate : the Acceptance Certificate, dated and fully completed, and executed by Lessee;	
 
 	(m)	International Registry : evidence in a priority search certificate from the International Registry that there are no International Interests, prospective International Interests or other interests registered in the International Registry in relation to the Airframe or any Engine;	
 
 	(n)	UCC : Financing Statements with respect to this Agreement and the Aircraft in a form acceptable to Lessor duly executed and delivered by Lessee and duly filed in each jurisdiction requested by Lessor;	
 
 	(o)	Mexican Asset Tax : if such law or any successor or similar law is in effect, evidence that Lessee has elected to consider the Aircraft as part of its assets for the purpose of the Mexican Asset Tax Law ( Ley del Impuesto al Activo ) or any successor or similar law then in effect, in the form of a file-stamped copy of the letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election; and	
 
 	(p)	General : such other documents and financial information as Lessor may reasonably request.	
Delivery Conditions Precedent
 
1.3	On the Delivery Date the following conditions shall be satisfied (and confirmed by a certificate of an authorized signatory of Lessee dated the Delivery Date):	
 
 	(a)	Default : no Default shall have occurred and be continuing or might result from the leasing of the Aircraft to Lessee under this Agreement;	
 
 	(b)	Registration : receipt by Lessor of evidence that on the Delivery Date, except for the Post-Delivery Authorizations and Filings, all Pre-Delivery Authorizations and Filings and all other filings, registrations and recordings have been made, and that all other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and to protect the rights and interests of Lessor in the Aircraft and, if applicable, the Security Trustee as mortgagee and/or assignee; and	
 
 	(c)	Representations and Warranties : Lessee shall repeat the representations and warranties in paragraph 1 of Schedule 2 ( Representations and Warranties ).	
 
 	(d)	Aircraft Sale and Delivery : (i) The Aircraft shall be new “ex factory” in the condition required under the Aircraft Purchase Agreement and Schedule 6 hereof; (ii) Lessor shall	
 
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 	have received (x) a certified copy of the full export certificate of airworthiness in relation to the Aircraft issued by the LBA, (y) evidence satisfactory to Lessor that a valid Certificate of Registration for the Aircraft will be issued in the name of the Lessee with the Lessor’s interest noted on the register by the Aviation Authority and confirmation from the Aviation Authority that it will issue a full certificate of airworthiness upon Delivery, together with a true and correct copy of the current valid air operator’s certificate and airline operation license, or equivalent, of the Lessee, permitting the Lessee to operate aircraft of the same type as the Aircraft, issued by the Aviation Authority and (z) the conditions precedent to the Lessor’s obligation to purchase the Aircraft provided for in the Master Agreement shall have been satisfied; (iii) Airbus shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except this Agreement, and Lessor shall have accepted the same in accordance with the Aircraft Purchase Agreement Assignment; (iv) receipt by Lessor of originals (or copies of originals are not practically available) of all Operative Documents duly executed by the parties thereto (other than Lessor); (v) receipt by Lessor of originals of the Aircraft Manufacturer delivery documents and receipt by Lessor of the delivery documents under the Master Agreement, including an Bill of Sale (duly translated into Spanish, and duly notarized and legalized) from Airbus, buyer furnished equipment listings in respect of the Aircraft and legal opinions; (vi) neither Lessee nor Parent shall have entered into any agreement with the Manufacturer which does, or would, substantially amend, modify, rescind, cancel or terminate the Aircraft Purchase Agreement in respect of the Aircraft without the prior written consent of Lessor; and (vii) the Delivery Date shall be occurring within 60 days of the last day of the Scheduled Delivery Month.	
All opinions, certificates issued by Lessee, letters and instructions described herein as addressed to Lessor shall also be addressed to Owner Participant.
2. Waiver : Each of the conditions precedent set out in paragraph 1 of this Schedule 3 are for the sole benefit of the Lessor and maybe waived or deferred in whole or in part with or without conditions. If any condition precedent set out in paragraph 1.2 is not satisfied on the Scheduled Delivery Date, and/or any condition precedent set out in paragraph 1.3 is not satisfied on the Delivery Date and the Lessor (in its absolute discretion) agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are fulfilled within 15 days after the Delivery Date and Lessor may treat the failure of Lessee to do so as an Event of Default.
3. Conditions Precedent to be Satisfied by Owner Participant : Lessee’s obligations to accept delivery and lease the Aircraft from Owner Participant are subject to receipt by Lessee from Owner Participant on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to Lessee:
 
 	(a)	Constitutional Documents : a copy of the constitutional documents of Owner Participant; and	
 
 	(b)	Resolutions : a copy of a resolution of the board of directors or other written evidence of appropriate corporate action of Owner Participant approving the terms of, and the transactions contemplated by, this Agreement, resolving that Owner Participant enter into this Agreement and authorizing a specified Person or Persons to execute this Agreement; and	
 
 	(c)	Confirmation of Irish Tax Residency : Evidence reasonably satisfactory to Lessee confirming Owner Participant’s status as a resident of Ireland for tax purposes.	
 
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Schedule 4
*****

 	  	*****	 	  	*****	 	  	*****	 	
Period 1	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 2	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 3	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 4	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 5	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 6	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 7	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 8	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 9	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 10	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 11	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 12	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 13	  	 	*****	  	  	 	*****	  	  	 	*****	  	
Period 14	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Schedule 5
INSURANCE REQUIREMENTS
Types of Insurance
 
1.	The Insurances required to be maintained are as follows:	
 
 	(a)	Hull All Risks of loss or damage whilst flying and on the ground with respect to the Aircraft on an agreed value basis for the Agreed Value and with a deductible not exceeding ***** each claim, or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets, including confiscation and requisition by the State of Registration, for the Agreed Value;	
 
 	(c)	All Risks (including War and Allied Risk except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for their full replacement cost and including engine test and running risks;	
 
 	(d)	Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence each aircraft (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the policy to the fullest extent available from the leading international insurance markets and customarily obtained by similarly situated operators (which coverage shall include but not be limited to an extended war risk coverage endorsement equivalent to the terms of AVN52D but for a combined single limit of an amount not less than the Minimum Liability Coverage).	
Terms of Hull and Spares Insurance
 
2.	All required hull and spares insurance, so far as it relates to the Aircraft, will:	
 
 	(a)	Additional Assureds : name Lessor, Owner Participant, the Security Trustee (if any) and the Financing Parties (if any) and their respective successors and permitted assigns as additional assureds for their respective rights and interests;	
 
 	(b)	Settlement of Losses : name Lessor as (sole) Loss Payee for the Agreed Value and (sole) Contract Party in respect of any Total Loss of the Aircraft or Airframe for an amount equal to the Agreed Value and provide that any such Total Loss will be settled jointly by Lessor and Lessee (in respect of which settlement Lessee agrees that it shall comply with the reasonable and lawful instructions of Lessor) so long as no Event of Default has occurred and is continuing and solely with Lessor if an Event of Default has occurred and is continuing, and will be payable in Dollars directly to Lessor provided that where the loss does not exceed the Damage Notification Threshold and Lessor has not notified the insurers to the contrary, the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 93 -

 	(c)	50/50 Provision : if separate hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language); and	
 
 	(d)	No option to Replace : confirm that the insurers are not entitled to replace the Aircraft in the event of an insured Total Loss.	
Terms of Liability Insurance
 
3.	All required liability insurances will:	
 
 	(a)	Additional Insureds : include Lessor and each of the other Indemnitees, as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest to the extent that Lessee has agreed to indemnify and/or hold harmless such Indemnitees;	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured;	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution, and the liability of the insurers will not be affected by any other insurance of which any Indemnitee or Lessee may have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
Terms of All Insurances
 
4.	All Insurances will:	
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of Persons operating similar aircraft in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in dollars and any other currencies which Lessor may reasonably require in relation to liability insurance;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as are, from time to time, standard in the New York and/or London aviation insurance markets or as Lessor may agree;	
 
 	(d)	Acknowledgement : acknowledge the insurer is aware (and has seen a copy) of this Agreement and that the Aircraft is owned by Lessor;	
 
 	(e)	Breach of Warranty : provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other Person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by Lessee, or any other Person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
- 94 -

 	(f)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of Lessor or Lessee;	
 
 	(g)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(h)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty days after written notice by registered mail or fax of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which seven days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic;	
 
 	(i)	Reinsurance : reinsurance with reinsurers acceptable to Lessor acting reasonably is required and such reinsurance will:	
 
 	(i)	be on the same terms as the original insurances and will include the provisions of this Schedule;	
 
 	(ii)	provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	(iii)	contain a “cut-through” clause in the following form (or otherwise satisfactory to Lessor):	
“The Reinsurers and the Reinsured hereby mutually agree that, in the event of any claim arising under the reinsurances in respect of a total loss or other claim, as provided by the Aircraft Lease Agreement dated January 25, 2008 and made between Lessor and Lessee, such claim is to be paid to the Person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the Person named as sole loss payee under the primary insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith; subject to such provisions not contravening any Law of the State of Incorporation;”
 
- 95 -

 	(j)	Initiating Claims : contain a provision entitling Lessor or any insured party to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(k)	Indemnities : insure (to the extent of the risks covered by the policies) the indemnity provisions of this Agreement.	
Deductibles
 
5.	Lessee shall be responsible for any and all deductibles under the Insurances.	
Application of Insurance Proceeds
 
6.	The Insurances will be endorsed to provide for payment of proceeds as follows:	
 
 	(a)	Total Loss : all insurance payments received as the result of a Total Loss occurring during the Term will be paid to Lessor, and Lessor will pay the balance of those amounts to Lessee after deduction of the Agreed Value and all other amounts which may be or become payable by Lessee to Lessor under this Agreement;	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of the Damage Notification Threshold will be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Any balance remaining shall be paid to and may be retained by Lessor;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default : notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor to be applied toward payment of any amounts which are or become payable by Lessee pursuant to this Agreement and the Other Agreements in such order as Lessor may elect with any remainder after payment of all amounts payable hereunder or thereunder to be paid to Lessee.	
To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
- 96 -

Schedule 6
*****
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications:
Specification

General Model	  	A319-133	
Engine Type / SLST	  	V2527E or V2527 TBA	
APU Mfgr & Model	  	Honeywell, model 131-9A	
Registration	  	Mexico	
Manufacturer’s Serial #s	  	3450	
Year Built	  	2008 (March)	
ETOPS	  	No	
Autoland Capability	  	Category 3B	
WEIGHTS, FUEL & Max Taxi	  	75,900 kgs	
CARGO VOLUME Max Take Off	  	75,500 kgs	
Max Zero Fuel	  	58,500 kgs	
Max Landing	  	62,500 kgs	
Fuel Capacity	  	6,302 gallons / 41,291 lbs	
INTERIOR Seating Configuration, F / Y	  	144 Y/C	
CONFIGURATION Total Seats	  	144	
Coat closet Cabin	  	Yes, 2 in the front before row 1 of seats	
Lavatories	  	1 fwd cabin, 2 aft cabin lavs are vacuum type)	
Seat Vendor, First	  	N/A	
Seat Pitch, First	  	N/A	
Seat Vendor, Coach	  	RECARO Model 3510	
Seat Pitch, Coach	  	30 inches except as noted on LOPA	
Escape Path Lighting Location	  	Floor Mounted	
Escape Path Lighting Vendor	  	PER / Lufthansa Guideline 400	
Vendor, Galley G1 and G5	  	Driessen for Fwd. Galley 1 and mini-Galley S3 in aft. Bulkhead, between two lavatories	
Airphone	  	None	
Audio/Visual Entertainment	  	PANASONIC MPES. 16 PSU mounted 10.4” retractable LCD monitors.	
SYSTEMS Wheels & Brakes	  	B F Goodrich	
Brake Fans	  	B F Goodrich	
Electrical	  	115v AC / 28v DC. 90kva	
Hydraulic	  	3,000psi, Eaton pumps	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 97 -

Avionics Equipment
Significant avionics equipment includes the following:

Quantity	 	Equipment Supplier	 	Part Number	
			
3 Radio Tuning Panels	 	THALES AVIONICS	 	C12848CA01	
2 HFS-900 HF Data Radios	 	Collins	 	822-0330-020	
3 VHF-900 VHF Data Radios	 	Collins	 	822-1047-030	
1 SELCAL Control Panel	 	TEAM	 	BC2065C	
1 SELCAL Decoder	 	Coltech	 	1200008-000	
1 Communications Mgmt Unit	 	N/A	 	N/A	
1 CVR (2 hour)	 	Allied Signal Avionic	 	980-6022-001	
1 DFDAU	 	SAGEM	 	ED48A100	
1 DFDR	 	Honeywell	 	980-4700-042	
1 Accelerometer	 	AMETEK AEROSPACE	 	3001-01-111	
2 Multi-Mode Receiver, ILS/GPS	 	Collins	 	22-1152-121	
2 Low Range Radio Altimeter	 	Collins	 	822-0334-020	
1 Wx Radar w/ PredictiveWindshear	 	Collins	 	822-1710-202	
1 Weather Radar Control Panel	 	Collins	 	622-5130-820	
1 TCAS II Computer	 	Honeywell	 	7517900-10003	
2 ATC Mode S Transponder	 	Collins	 	822-1338-021	
1 TCAS Control Panel	 	THALES AVIONICS	 	C12404AB02	
2 VOR/Marker Beacon Receiver	 	Collins	 	822-0297-020	
2 DME Interrogator	 	Collins	 	822-0329-020	
2 Multipurpose CDU	 	Honeywell	 	4077880-982	
2 FMC w/ Update and 1 MB Nav DB	 	Honeywell	 	C13042BA01	
1 EGPWS Computer	 	Allied Signal	 	965-1676-002	
 
- 98 -

			
EPAC Ref.	  	Title	
		
	  	Introduction of A319-100 Standard Specification at Issue 5	
		
ATA 02	  	Certification	
02.10.100/06	  	High altitude certification up to 14100 ft	
02.10.104/20	  	Certification of dynamically tested passenger seats - all classes	
02.10.111/01	  	Compliance with FAA type certification requirements	
02.10.120/01	  	15 knots tailwind certification at Take - off	
02.10.120/02	  	15 knots tailwind certification at landing	
02.12.108/01	  	Extended environmental envelope ( ISA + 40 )	
02.12.140/03	  	Compliance with FAR 121.344	
02.35.135/XX	  	Cabin BFE equipment turned into SSBFE	
02.35.135/XX	  	Avionics BFE equipment turned into SSBFE	
02.40.101/01	  	External livery	
ATA 03	  	Weights	
03.20.400/XX	  	Design weights MTOW 64 T/ MLW 62.5 T / MZW 58.5 T	
03.20.400/02	  	Design weights increased to MTOW 75.5 T/MLW 62.5 T/MZFW 58.5 T	
ATA 11	  	Placards and markings	
11.00.104/03	  	Identification plates	
11.00.104/26	  	Cockpit identification plate on lavatory partition	
11.00.105/03	  	Installation of additional identification plate on rear LH fuselage (FAA requirements)	
11.00.136/01	  	Second language for residual cabin and cargo pressure doors	
11.20.106/05	  	Exterior placards and markings in Spanish and English	
11.30.100/01	  	Bilingual cabin placards for passengers per customized definition	
11.30.111/36	  	Bilingual EEPMS exit identifier - English below (vertical) and second language (Horiz.) - Airsignal	
11.30.122/07	  	Installation of placards on emergency equipment containers	
11.30.127/72	  	Installation of additional placards in lavatories	
11.20.115/07	  	Ram Air Turbine - bilingual markings (English / Spanish)	
11.20.119/01	  	NLG permanent steering markers (+/-95° wheels positions)	
11.20.125/07	  	RVSM markings	
11.20.128/67	  	Air conditioning packs outlet (RAM AIR)	
11.20.128/75	  	Additional external markings	
ATA 21	  	Air conditioning	
21.27.108/01	  	Avionics ventilation air filter PALL APME QB0452	
21.27.109/04	  	Installation of two ozone catalytic converters (A318 type)	
21.30.000/20	  	Non installation of RPCU	
21.50.050/01	  	Installation of A318 type ECS	
ATA 22	  	Auto flight	
22.70.100/XX	  	FMS alternate equipment	
ATA 23	  	Communications	
23.73.144/01	  	Flashing steward call light	
23.00.132/30	  	ELT installation - BFE	
23.11.115/14	  	Installation of one HF system - COLLINS 900 - DIGITAL ATENNA COUPLER - BFE	
23.13.101/02	  	Installation of third RMP 8.33 KHz capable	
23.50.138/04	  	Cockpit hand microphone alternate equipment – Holmberg	
 
- 99 -

			
EPAC Ref.	  	Title	
		
23.51.136/06	  	Installation of Plantronics Boom-sets	
23.71.103/10	  	Solid State Cockpit Voice Recorder (SSCVR) – Honeywell	
Global	  	IFE system - PANASONIC	
23.36.007/01	  	Wiring provisions for digital server system (SC-A and crew panel) - PANASONIC	
23.36.105/04	  	Provisions for VCC in OHSC aft of door 1 LH	
Global	  	CIDS Changes – GLOBAL	
23.73.144/01	  	Flashing steward call light	
ATA 24	  	Electrical power	
24.00.335/01	  	Installation of additional electrical outlets 115V/60Hz in cockpit	
	  	Provisions and installation of in-seat PC power outlets (2 outlets per triple seat)	
ATA 25	  	Cabin & cockpit	
Global	  	Cabin layout (144 pax – DWG 319-25-11542)	
	  	Provisions for cabin conversion to TACA definition	
	  	Interior colour scheme	
25.24.125/01	  	OHSC alternate door – Increased Volume	
Global	  	Cargo compartment –full bulk with reinforced floor panels	
25.50.137/01	  	Rubber seal profile in cargo compartment floor panels	
25.61.112/01	  	Installation of slide raft at FWD and AFT doors	
25.45.212/03	  	Lavatory wash basin – installation of stainless steel	
25.28.103/02	  	From dispersion-adhesive to double-sided adhesive tape	
25.35.130/04	  	Installation of electrical galley catering equipment (BFE) (change 1)	
25.35.131/03	  	Installation of non-electrical galley catering equipment (BFE) (change 1)	
25.35.132/02	  	Installation of non-electrical galley catering/loose equipment (BFE) (change 1)	
25.45.201/18	  	Installation of holder for soap bottles celeste	
25.67.001/01	  	Installation of medical outlets in Aft RH PSU channel (115V/400Hz and 28VDC/360W)	
25.28.142/XX	  	Non Textile Floor covering selection	
	  	Cabin emergency equipment	
ATA 26	  	Fire protection	
26.21.104/XX	  	Engine fire exting. Alternate equipment – PACIFIC SCIENTIFIC	
ATA 27	  	Flight Controls	
27.92.101/02	  	Visual/Aural indication of simultaneous side stick action	
ATA 29	  	Hydraulic Power	
29.10.110/09	  	Hydraulic Engine Driven Pumps (EDPs) – EATON AEROSPACE	
29.21.104/07	  	Electropumps – EATON AEROSPACE	
ATA 30	  	Ice and Rain Protection	
30.11.101/01	  	Wing anti-ice valve alternate equipment – Honeywell	
ATA 31	  	Indicating/Recording	
31.33.050/24	  	FDIMU – Alternate equipment	
31.33.200/01	  	SSFDR alternate equipment (256 w/s capable) – HONEYWELL	
31.52.102/02	  	ECAM OEB reminder function activation on FWC	
31.60.120/01	  	Installation of LCD EIS2 – Thales Avionics	
ATA 32	  	Landing gear	
32.00.100/02	  	Installation of full electrically signaled braking system	
32.10.103/01	  	Small bore inflation valve on NLG & MLG BF Goodrich wheels (without indicator)	
32.40.113/25	  	Installation of wheels and brakes – GOODRICH DURACARB	
32.41.111/01	  	Main Landing Gear (MLG) tire selection – MICHELIN	
 
- 100 -

			
EPAC Ref.	  	Title	
		
32.41.120/05	  	Nose Landing Gear (NLG) tire selection – MICHELIN	
32.48.200/XX	  	Installation of universal brake cooling fans	
ATA 33	  	Lights	
33.50.110/41	  	Installation of floor mounted EEPMS – Lufthansa Technik (with cover) / Exit identifier Airsigna	
ATA 34	  	Navigation	
34.10.117/04	  	ADIRS alternate equipment – HONEYWELL	
34.13.105/01	  	Installation of aspirated TAT probes – Rosemount	
34.13.106/01	  	Pitot Probes alternate equipment – BF GOODRICH	
34.20.202/02	  	Installation of ISIS	
34.41.300/05	  	Single weather radar with PWS function activated and multi-scan capability – Rockwell Collins	
34.42.101/07	  	Radio altimeter – alternate equipment	
34.42.117/01	  	Radio altitude automatic call-out	
34.43.200/35	  	Installation of TCAS – change 7	
34.48.132/01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	
34.48.132/02	  	Activation of the Peaks function in the EGPWS	
34.48.132/03	  	Activation of the Obstacle function in the EGPWS	
34.50.104/04	  	DDRMI VOR / ADF / DME	
34.58.313	  	Multi Mode Receiver (MMR) alternate equipment – ROCKWELL COLLINS	
ATA 35	  	Oxygen	
35.11.101/01	  	Alternate flight crew oxygen cylinder 115 Cu/ft (steel)	
35.20.104/01	  	Identification of pax chemical oxygen generators	
35.21.106/01	  	Installation of four masks per double triple seats	
35.31.108/04	  	Installation of a Scott Aviation PBE in cockpit (BFE) P/N 802300-14	
ATA 36	  	Pneumatic	
36.110.05/01	  	Engine bleed air alternate supply system	
ATA 38	  	Water/Waste	
38.41.101/01	  	Pressurization of potable water system	
38.10.104/02	  	Installation of water conditioner in potable water system (A318 A319 A321)	
ATA 46	  	ATSU	
46.21.102/08	  	Upgraded standard Airbus AOC software for ATSU – Rockwell-Collins	
ATA 49	  	APU	
49.00.105/04	  	APU alternate equipment – ALLIED SIGNAL 131-9A	
ATA 51	  	Structure	
51.22.201/02	  	Basic paint system selection – PPG AEROSPACE	
ATA 52	  	Doors	
52.51.100/00	  	Installation of intrusion & penetration resistant cockpit door	
ATA 55	  	Stabilizers	
55.30.101/01	  	Installation of erosion protection on vertical stabilizer leading edge – Stainless steel	
ATA 56	  	Windows	
56.10.102/02	  	Cockpit alternate front windows – SAINT-GOBAIN SULLY	
56.10.102/13	  	Cockpit alternate lateral windows – SAINT-GOBAIN SULLY	
ATA 72	  	Engines	
72.00.119/XX	  	Engines selection	
 
- 101 -

Schedule 7
[INTENTIONALLY LEFT BLANK]
 
- 102 -

Schedule 8
*****
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 103 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 104 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 105 -

Schedule 9
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 106 -

Schedule 10
[INTENTIONALLY LEFT BLANK]
 
- 107 -

Schedule 11
*****
*****

1.	  	List of manuals	
	
Basic:	
		
1.	  	Airplane Flight Manual	
		
2.	  	Flight crew operating Manual	
		
3.	  	Trim Sheet	
		
4.	  	Quick Reference Handbook	
		
5.	  	Weight and Balance Manual	
		
6.	  	Performance Engineer’s Programs	
		
7.	  	Airbus A [xxx-xxx] Standard Specification [xxx xxxxx] issue [x], revision [x] dated [xx xx xxx] and as amended to include all Lessee standard SCNs (Specification Change Notices)	
		
8.	  	Performance Programs Manual	
		
9.	  	Aircraft Maintenance Manual	
		
10.	  	Wiring Diagram Manual	
		
11.	  	Power Plant Build-up Manual	
		
12.	  	Engine Brochures	
		
13.	  	APU Log Book (with manufacturer delivery documents)	
		
14.	  	Illustrated Parts Catalogue	
		
15.	  	Illustrated Parts catalogue (Airframe) Additional Cross Reference Table	
		
16.	  	Structural Repair Manual	
		
17.	  	Nacelle Structural Repair Manual	
		
18.	  	Engine Maintenance Manual	
		
19.	  	Illustrated Parts catalogue (power-plant)	
		
20.	  	Master Minimum Equipment List	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 108 -

			
21.	  	Maintenance Planning Document	
		
22.	  	Component Maintenance Manuals (Vendor and Manufacturer)	
		
23.	  	Engineering and Tooling Drawings	
		
24.	  	Maintenance Facility Planning	
		
25.	  	Support Equipment Summary	
		
26.	  	Tool and Equipment bulletins	
		
27.	  	Tools and equipment Drawings	
		
28.	  	Tools and equipment index	
		
29.	  	Illustrated tools and Equipment Manual	
		
30.	  	Technical Publications Combined Index	
		
31.	  	Trouble shooting Manual	
		
32.	  	Component Documentation Status	
		
33.	  	Component Evolution List	
		
34.	  	Cable Fabrication Manual	
		
35.	  	Standards Manual	
		
36.	  	Parts usage	
		
37.	  	Schedule (drawing Nomenclature)	
		
38.	  	Process and Materials Specification	
		
39.	  	Installation and Assembly Drawings	
		
40.	  	Airplane Characteristics for Airport Planning	
		
41.	  	ATA breakdown index	
		
42.	  	CADETS (technical Publications Training)	
		
43.	  	Aircraft Recovery Manual	
		
44.	  	Crash Crew Chart	
		
45.	  	Cargo Loading system Manual	
		
46.	  	List of applicable publications	
 
- 109 -

			
47.	  	List of radio active and hazardous elements	
		
48.	  	Livestock transportation Manual	
		
49.	  	Service Bulletins	
		
50.	  	Service information letters	
		
51.	  	Supplier Product Support Agreements	
		
52.	  	Transportability Manual	
		
53.	  	Vendor Information Manual	
		
54.	  	Vendor Information Manual for Ground Support Equipment	
		
55.	  	Maintenance Review Board	
		
56.	  	Non Destructive Testing Manual	
		
57.	  	Power Plant Build up Manual	
		
58.	  	Aircraft Schematics Manual	
		
59.	  	Aircraft Wiring Lists	
		
60.	  	Aircraft Wiring Manual	
		
61.	  	Component Location Manual	
		
62.	  	Consumable Material List	
		
63.	  	Duct Repair Manual	
		
64.	  	Electrical Load Analysis	
		
65.	  	Electrical Standards Practices Manual	
		
66.	  	Electrical Standards Practices Booklet	
		
67.	  	Fuel Pipe Repair Manual	
		
68.	  	Maintenance Planning Task Cards	
 
- 110 -

*****
The Technical Records and Manuals shall be in English, shall include those as of the Delivery Date, shall include those required during the Term to comply with EASA Regulation 2042 and JAR OPS 1 and shall otherwise be as detailed below.
All documents shall be presented in a good, legible condition and, if applicable, sorted and/or bound together in a manner appropriate to the document type, loose page documents shall be grouped together in a secure manner and in the correct numerical or chronological order. Distinct groups, packages or boxes of documents shall be numbered and labeled according to their content and a master index of all packages or boxes shall be provided.
 
1.	CERTIFICATES	
 
 	(a)	Certificate of Airworthiness (current).	
 
 	(b)	Current Aircraft Registration Certificate.	
 
 	(c)	Original Export Certificate of Airworthiness from State of Manufacture.	
 
 	(d)	Current Export Certificate of Airworthiness from State of Registration.	
 
 	(e)	Export Certificate of Airworthiness for fitted engines if not original to the Aircraft (Copy).	
 
 	(f)	Radio Station License (current).	
 
 	(g)	Noise certificate (current).	
 
 	(h)	Registration cancellation notice (if issued by State of Registration).	
 
 	(i)	Air Operator Certificate (Lessee).	
 
 	(j)	RVSM, B-RNAV, P-RNAV, ATC transponder, Altimeter and pitot / static check certification as applicable and as required by the FAR part 43 and 91.	
 
 	(k)	Certificate of most recent Release to Service (copy).	
 
 	(l)	Certificate of Sanitary Construction (Galleys) if applicable.	
 
 	(m)	All Supplemental Type Certificates (STC) applied to the Aircraft (Copies).	
 
2.	AIRCRAFT STATUS SUMMARIES	
All status summary document to be signed and dated on final page by the Lessee’s Quality Manager and all other pages initialed.
 
 	(a)	Aircraft record of flight time and cycles (listing accumulated hours and cycles on specific dates).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 111 -

 	(b)	Airworthiness Directive Applicability and Compliance status Reports (Airframe, Engines and Appliances) Format/content as follows:	
 
 	(i)	Airworthiness Directives listed in a chronological order.	
 
 	(ii)	All Airworthiness Directives applicable to the Aircraft, Engine, APU or Aircraft Appliance type listed as follows:	
 
 	(A)	AD number.	
 
 	(B)	AD effective date.	
 
 	(C)	Title.	
 
 	(D)	Applicability status.	
 
 	(E)	Accomplishment status.	
 
 	(F)	Date or hours /cycles at last accomplishment action.	
 
 	(G)	Date or hours /cycles of next action due (if applicable).	
 
 	(c)	Manufacturer’s Airworthiness Directive compliance Status at time of Manufacture.	
 
 	(d)	Manufacturer Service Bulletin Compliance Report for the Aircraft, Engine, APU and the Aircraft Appliances. Format/content as follows:	
 
 	(i)	SB number.	
 
 	(ii)	SB effective date.	
 
 	(iii)	Title.	
 
 	(iv)	Applicability status.	
 
 	(v)	Accomplishment status.	
 
 	(vi)	Date or hours /cycles at last accomplishment action.	
 
 	(vii)	Date or hours /cycles of next action due (if applicable).	
 
 	(e)	Corrosion Prevention and Control Program Task Status (showing last accomplishment and next due for each task) if applicable, listing the Corrosion Prevention and Control Program Tasks in a numerical order.	
 
- 112 -

 	(f)	Aging Aircraft Inspection and Modification Program tasks status (showing task number, termination status as applicable, last accomplishment and next due for each item if open) if applicable. Manner of presentation as follows:	
 
 	(g)	List of Operator implemented Modifications Incorporated (Engineering Orders applied to Airframe, Engines and Appliances). Format/content as follows:	
 
 	(i)	Operator Modifications listed in numerical order.	
 
 	(ii)	Cross reference document between Operators modification number and original engineering source /vendor document provided.	
 
 	(iii)	Air Authority/FAA/JAA/State of Manufacture type certificate data approval for modification provided.	
 
 	(h)	Structural Repair File with a detailed structural Map showing exact location of all external repairs and damages indicating their status in accordance with the Manufacturers structural repair manual showing general size and location of each external repair and basis for approval). Format/content as follows:	
 
 	(i)	Records of accomplishment or compliance of each indexed repair provided as follows:	
 
 	(A)	Original signed /certified “dirty finger print” records.	
 
 	(B)	Presented in binder (or binders).	
 
 	(C)	Numbered and sorted by index number.	
 
 	(ii)	Records for Major Repairs or repairs that do not conform to the Manufacturer’s Structural Repair Manual accompanied by the appropriate Engineering Approval document issued by the State of Manufacture Airbus RAS.	
 
 	(i)	List of Major Alterations and Supplemental Type Certificate’s Incorporated (STC’s) (with reference to approved documentation used to accomplish).	
 
 	(j)	List and Status of Airframe Life Limited Parts (if any) with full back to birth traceability support documents. Format/content as follows:	
 
 	(i)	Each Life Limited Part fitted to the Airframe listed by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent)pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
- 113 -

 	(k)	List and Status of Landing Gear Life Limited Parts for each Landing Gear with full back to birth traceability support documents Format/content as follows:	
 
 	(i)	Each Life Limited Part fitted to Landing Gear listed by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
 	(l)	List and Status of Engine Life Limited Parts with full back to birth traceability support documents. Format/content as follows:	
 
 	(i)	Each Life Limited Parts fitted to the engine identified by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
- 114 -

 	(m)	List and Status of Auxiliary Power Unit (APU) Life Limited Parts (if any) with full back to birth traceability support documents Format/content as follows:	
 
 	(i)	Life Limited Part fitted to the APU identified by part number and unique serial number.	
 
 	(ii)	Detailed full back to birth traceability file supplied for each individual Life Limited Part detailing on /off transaction history.	
 
 	(iii)	Original Airworthiness tag document issued when the Life Limited Parts was new (such as the manufacturer’s tag, certificate of conformity or readiness log document as appropriate) provided.	
 
 	(iv)	Full back to birth traceability file for each Life Limited Part provided, to include the Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) pertaining to each subsequent (if any) on/off transaction up to and including installation on the subject airframe.	
 
 	(v)	Supplied tags and any other appropriate certified document or job-card indicating hours /cycles or calendar time at each on/off demonstrating unbroken trace of the Hours /cycles or calendar time from birth up to current time.	
 
 	(vi)	Check/Inspection History and Current Status.	
 
 	(n)	List and Current Status of Time-Controlled Components Format/content as follows:	
 
 	(i)	Time-Controlled Components fitted to the Aircraft listed by part number and unique serial number.	
 
 	(ii)	Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) provided for Time-Controlled Components.	
 
 	(o)	Inventory of Installed Serialized On-Condition/Condition Monitored Components. Format/content as follows:	
 
 	(i)	Serialized Components fitted to the Aircraft listed by part number and unique serial number.	
 
 	(ii)	Airworthiness approval tag (JAA form 1 or FAA form 8130-3 or equivalent) provided for Serialized Components.	
 
 	(p)	List of Deferred Maintenance Items (if no Deferred Maintenance Items are “open” at transfer, a signed statement to that effect is required).	
List and Status of any Out-of-Phase Checks, Special Inspection Requirements, Time Limited Repairs, etc. (If none exist or if requirements are incorporated into aircraft status reports, then a signed statement to that effect is required.)
 
 	(q)	Supplemental Structural Inspection (SSID) Status (if applicable) (showing last accomplishment and next due for each task). Format/content as follows:	
 
 	(i)	listing the Supplemental Structural Inspections in a numerical or chronological order as applicable.	
 
- 115 -

3.	AIRCRAFT MAINTENANCE RECORDS	
 
 	(a)	Aircraft Flight and Maintenance Log Sheets (minimum of operation back to previous highest level Airframe Structural Check).	
 
 	(b)	Airframe inspection, maintenance, modification and repair documents with maintenance and/or inspection signatures (as required) and description of work done.	
 
 	(c)	Last “A”, and all systems “C” Checks, and Airframe 6 Year Block Structural Check and Airframe 12 Year Block Structural Check (or equivalents) (In the event that a check is performed in phases, all phases necessary to constitute a complete block check are required. In the event that check content varies by multiples of the check, all multiples necessary to constitute a complete cycle are required).	
 
 	(d)	Airworthiness Directive, Service Bulletin and Modification compliance documents including engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority.	
 
 	(e)	Corrosion Prevention and Control Program compliance documents and inspection findings as applicable including records of accomplishment or compliance provided (the original signed /certified “dirty finger print” workcards).	
 
 	(f)	Documentation for Operator Modifications such as engineering orders, drawings, FAA form 8110-3, Supplemental Type Certificates, Master Change Notice, FAA type certificate conformity approval from manufacturer or approved design organization etc., as necessary to define work done, certification basis, and approval authority.	
 
 	(g)	Supporting Documentation for Operator Modifications such as engineering orders, drawings, FAA form 8110-3, Supplemental Type Certificates, Master Change Notice, FAA type certificate conformity approval from manufacturer or approved design organization etc., as necessary to define work done, certification basis, and approval authority.	
 
 	(h)	Aircraft weight and balance records (including weight change ledger, most recent weighing report and individual flight control weight and balance data).	
 
 	(i)	Test Flight Reports.	
 
 	(j)	X-Ray Inspection findings (pictures/film) as applicable.	
 
4.	AIRCRAFT HISTORY RECORDS	
 
 	(a)	Service Difficulty Reports, Lessee System Reliability reports and equivalent.	
 
 	(b)	Accident and Incident Reports (if none, then a signed “no Incident /Accident” statement from operator’s Quality Control Manager).	
 
 	(c)	Aircraft Log Book(s) and Aviation Authority Operation and Modification Log Book(s) (as applicable).	
 
- 116 -

5.	ENGINE RECORDS (FOR EACH ENGINE)	
Each status summary signed and dated on the final page by the Lessee’s Quality Manager and all content pages initialed.
 
 	(a)	Certified statement as to following:	
 
 	(i)	time and cycles since new	
 
 	(ii)	time and cycles since overhaul on each engine module	
 
 	(iii)	flying hours and cycles in lessee’s operation	
 
 	(b)	Engine Master Record (record of installation and removal and accumulated flight time and cycles for Engine and each module installed at Redelivery Date)	
 
 	(c)	List of Operator Modifications Incorporated, if any including supporting documentation with Manufacturer approval	
 
 	(d)	List of all Major Repairs and Alterations, if any	
 
 	(e)	Check/Inspection Status	
 
 	(f)	Accessory Status sheet with certified TSO for each rotable item installed	
 
 	(g)	Last overhaul tags (or copies) for each of the accessory rotables	
 
 	(h)	Engine Build Specifications	
 
 	(i)	(Repair, overhaul and inspection documents such as JAA form 1, FAA 8130-3 and FAA form 337 for each shop visit (minimum acceptable is shop visit history through last Engine Performance Restoration shop visit and if different, last overhaul of each module)	
 
 	(j)	List of current Line Replaceable Units (LRU)/QEC Items missing from engine (if applicable for a spare Engine redelivery or off-wing Engine)	
 
 	(k)	Engine Condition Monitoring Report for the three (3) months prior to redelivery	
 
 	(l)	Last three (3) months of aircraft flight/technical logs to which engine was fitted	
 
 	(m)	Reason for last engine removal, engine change paperwork and date of engine removal	
 
 	(n)	Most recent certified engine borescope (videotaped)	
 
 	(o)	Most recent fuel, oil sampling, magnetic chip detector and vibration survey results	
 
 	(p)	Most recent on-wing ground performance run specifying engine OATL (outside air temperature limit) at rated thrust	
 
- 117 -

 	(q)	Last certified Test Cell Run specifying engine OATL	
 
 	(r)	Engine Oil used	
 
 	(s)	Any incidents during operation since last performance restoration shop visit with action taken i.e. IFSD/FOD/oil loss etc.	
 
6.	APU RECORDS	
 
 	(a)	Certified statement as to following:	
 
 	(i)	hours and cycles since new	
 
 	(ii)	hours and cycles since overhaul	
 
 	(iii)	hours and cycles since hot section inspection	
 
 	(iv)	lessee’s method for APU time accrual i.e. 1:1 with aircraft hours and cycles	
 
 	(b)	APU Master Record (record of installation and removal and accumulated time and cycles)	
 
 	(c)	List of Operator Modifications Incorporated, if any including supporting documentation with Manufacturer approval	
 
 	(d)	(Accessory Status Sheet with certified time since overhaul for each rotable item installed	
 
 	(e)	Last overhaul tags (or copies) for each of the accessory rotables	
 
 	(f)	Certified and Updated APU Log Book from new (with manufacturer delivery documents)	
 
 	(g)	Repair, overhaul and inspection documents such as FAA Forms 337 (minimum acceptable is shop visits through last APU Performance Restoration /Hot section Inspection/ overhaul)	
 
 	(h)	Documents demonstrating installation and full traceability back to birth (to new) for each Life Limited Part	
 
 	(i)	List of Line Replaceable Units (LRU)/QEC Rotable items missing from APU (if any for any spare APU redelivery)	
 
 	(j)	Last three (3) months of aircraft flight/technical logs to which APU was fitted	
 
 	(k)	Reason for last APU removal, removal paperwork and date of APU removal	
 
 	(l)	Most recent certified APU borescope report (videotape)	
 
 	(m)	Most recent APU on-wing health check datasheets	
 
 	(n)	Last certified test cell run	
 
- 118 -

7.	MISCELLANEOUS TECHNICAL DOCUMENTS	
 
 	(a)	Maintenance Program Specifications including a cross-reference to Manufacturer’s maintenance planning document	
 
 	(b)	Reference material necessary for interpretation of status summaries, i.e. Operator part numbers Cross Reference to Manufacturer’s part numbers	
 
 	(c)	Interior configuration drawings as follows:	
 
 	(i)	L.O.P.A.	
 
 	(ii)	Emergency Equipment Locations	
 
 	(iii)	Galley Drawings	
 
 	(iv)	Cargo Loading System layout	
 
 	(d)	Aircraft Readiness Log (or parts configuration Status document)	
 
 	(e)	Loose Equipment Inventory	
 
 	(f)	Seat, cushion and fabric cover Material Burn Test documents for JAR25.853	
 
 	(g)	Flight Data Recorder – Print / Copy of Last Read-Out with all exceedences (if any) identified and parameter accuracy confirmed	
 
8.	AIRCRAFT STATUS SUMMARIES	
 
 	(a)	Airworthiness Directive Applicability and Compliance status at time of Manufacture	
 
 	(b)	Manufacturer Service Bulletin Compliance Report for the Aircraft, Engine, APU and the Aircraft Appliances	
 
 	(c)	[Airbus A [xxx-xxx] Standard Specification J [xxx xxxxx] issue [x], revision [x] dated [xx xx xxx] and as amended to include all Lessee standard SCNs (Specification Change Notices)]	
 
 	(d)	Loose Equipment Inventory	
 
 	(e)	Seat, cushion and fabric cover Material Burn Test documents for JAR 25/FAR 25.853 (If BFE)	
 
- 119 -

Schedule 12
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 120 -

Schedule 13
*****
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 121 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 122 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 123 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 124 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 125 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 126 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 127 -

Schedule 14
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 128 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 129 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 130 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 131 -

Schedule 15
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 132 -

*****
*****
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 133 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 134 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 135 -

*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
- 136 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.22
Execution Version
AIRCRAFT LEASE AGREEMENT
Dated November 7, 2008
Between
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
as Lessee
- and -
AMENTUM AIRCRAFT LEASING NO. FOUR LIMITED
as Lessor
in respect of
Aircraft : A319-133
Serial No: 3705
Registration Mark: XA-VOO
 
McCann FitzGerald
Solicitors
Riverside One
Sir John Rogerson’s Quay
Dublin 2
SKL\1818423.4

CONTENTS

Clause	  	 	  	Page	 	
			
1.	  	Interpretation	  	 	1	  	
			
2.	  	Representations and Warranties	  	 	1	  	
			
3.	  	Conditions Precedent	  	 	1	  	
			
4.	  	Commencement of Lease and Lease Extension	  	 	1	  	
			
5.	  	Payments	  	 	3	  	
			
6.	  	Taxation	  	 	9	  	
			
7.	  	Quiet Enjoyment	  	 	11	  	
			
8.	  	Lessee’s Covenants	  	 	12	  	
			
9.	  	Insurance and Total Loss	  	 	12	  	
			
10.	  	Manufacturer’s Warranties	  	 	12	  	
			
11.	  	Indemnity	  	 	13	  	
			
12.	  	Return of aircraft	  	 	14	  	
			
13.	  	Default	  	 	14	  	
			
14.	  	Assignment	  	 	15	  	
			
15.	  	Illegality	  	 	15	  	
			
16.	  	Notices	  	 	15	  	
			
17.	  	Disclaimers and Waivers	  	 	16	  	
			
18.	  	Confidentiality	  	 	17	  	
			
19.	  	Change of Control	  	 	17	  	
			
20.	  	Law and Jurisdiction	  	 	18	  	
		
Appendix 1 – Definitions and Construction	  	 	21	  	
		
Appendix 2 – Description of Aircraft and Aircraft Documents	  	 	37	  	
		
Appendix 3 – Representations and Warranties	  	 	38	  	
		
Appendix 4 – Conditions Precedent	  	 	42	  	
		
Appendix 5 – Payment Provisions	  	 	47	  	
		
Appendix 6 – Lessee’s Covenants	  	 	56	  	
		
Appendix 7 – Insurance	  	 	71	  	

							
		
Appendix 8 – Redelivery Conditions	  	 	81	  	
		
Appendix 9 – Events of Default	  	 	103	  	
		
Appendix 10 – Assignment	  	 	109	  	
		
Exhibit A – Acknowledgement of Assignment	  	 	111	  	
		
Exhibit A – Acknowledgement of Assignment	  	 	113	  	
		
Exhibit B – Form of Certificate of Acceptance	  	 	115	  	
		
Exhibit C – Air Traffic Control Letters	  	 	116	  	
		
Exhibit D – Deregistration and Export Power of Attorney	  	 	118	  	
		
Exhibit E – Quiet Enjoyment Letter	  	 	121	  	
		
Exhibit F – Form of Monthly Report	  	 	123	  	
		
Exhibit G – Process Agent Power of Attorney (Lessee)	  	 	126	  	
		
Exhibit H – Process Agent Power of Attorney (Guarantor)	  	 	127	  	

THIS AGREEMENT is made the day of                      2008
BETWEEN
 
(1)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. , a company duly incorporated and validly existing under the laws of Mexico and having its registered office at Av. Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Pena Blanca, 01210 Mexico (“ Lessee ”); and	
 
(2)	AMENTUM AIRCRAFT LEASING NO. FOUR LIMITED , a company duly incorporated and validly existing under the laws of the Ireland and having its registered office at 28 Upper Mount Street, Dublin 2, Ireland (“ Lessor ”).	
RECITALS
Lessor has agreed to lease and Lessee has agreed to take and lease the Aircraft upon the terms and subject to the conditions set out in this Agreement.
NOW IT IS AGREED as follows:
 
1.	Interpretation	
 
1.1	In this Agreement, unless the context otherwise provides, capitalised terms and expressions have the meanings given to them in Part 1 of Appendix 1 and the conventions of construction and usage set out in Part 2 of Appendix 1 shall apply to this Agreement.	
 
1.2	References to “ this Agreement ” includes the Appendices and the Exhibits and accordingly Lessee and Lessor hereby agree to comply with the terms of each such Appendix and Exhibit as if set out in this Agreement in full.	
 
2.	Representations and Warranties	
 
2.1	Lessee represents and warrants to Lessor in the terms set out in Part 1 of Appendix 3.	
 
2.2	Lessor represents and warrants to Lessee in the terms set out in Part 2 of Appendix 3.	
 
3.	Conditions Precedent	
 
3.1	Lessor’s obligation to deliver and lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 1 of Appendix 4.	
 
3.2	Lessee’s obligation to accept delivery of the Aircraft and to lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 2 of Appendix 4.	
 
4.	Commencement of Lease and Lease Extension	
 
4.1	Subject to Clause 3, immediately following Delivery the Aircraft shall be deemed to have been delivered to and accepted by Lessee in “ as is, where is ” condition and shall become subject to and governed by this Agreement, the Term shall commence and Lessee shall thereupon sign and deliver to Lessor the Certificate of Acceptance.	
 
1

4.2	Lessee acknowledges that pursuant to the Purchase Agreement Assignment the condition of the Aircraft on delivery to Lessee, and its compliance or otherwise with the Original Purchase Agreement, shall be the sole responsibility of Lessee, and that Lessor has agreed to purchase the Aircraft pursuant to the Purchase Agreement Assignment for the purpose of leasing the Aircraft to Lessee pursuant to this Agreement. Accordingly, Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft under this Agreement once the same has been accepted by Lessor under the Purchase Agreement Assignment. Each of Lessor and Lessee acknowledges that Lessor has appointed Lessee, under the Purchase Agreement Assignment, as agent of Lessor to accept delivery of the Aircraft from the Airframe Manufacturer. Each of Lessor and Lessee expressly acknowledges and agrees that Lessee shall not execute or deliver any acceptance certificate under the Purchase Agreement Assignment pursuant to such agency appointment unless and until each of Lessor and Lessee has confirmed to the other that it is satisfied with the condition of the Aircraft and the Aircraft Documents, the arrangements for Delivery of the Aircraft under the Purchase Agreement Assignment and the terms of the Commitment Letter. Lessee agrees that it will not consent to the inclusion of any terms or provisions in the Commitment Letter which may adversely impact on Lessor’s rights as owner of the Aircraft and to the extent that it is proposed that any such terms or provisions be included in the Commitment Letter, Lessee shall promptly give written notice thereof to Lessor and will not permit any such terms or provisions to be included in the Commitment Letter unless the same have been approved by Lessor, in its absolute discretion.	
 
4.3	Lessor shall not be responsible for any Loss (including any loss of profit), arising from any delay in the delivery of, or failure to deliver, the Aircraft to Lessee under this Agreement unless such delay or failure arises as a direct consequence of the wilful default, wilful misconduct or Gross Negligence of Lessor.	
 
4.4	If for any reason, other than a default by the Lessor, the Aircraft shall not have been delivered to and accepted by Lessee in accordance with this Clause 4 by the Final Delivery Date then Lessor may cancel the obligation contained in this Agreement to lease the Aircraft to Lessee by giving notice in writing to Lessee to that effect and Lessee shall reimburse to Lessor forthwith on demand all amounts which the Lessor shall have expended under the Purchase Agreement Assignment or otherwise in connection with the purchase of the Aircraft, together with interest on each amount so demanded at the rate specified in Clause 5.5 from the date of demand until the date of reimbursement (both before and after any relevant judgment). If for any reason, other than a default by Lessee, the Aircraft shall not have been delivered to and accepted by Lessee in accordance with this Clause 4 by the Final Delivery Date then Lessee may cancel the obligation contained in this Agreement to take the Aircraft on lease from Lessor by giving notice to Lessor to that effect. Upon the service of a notice of cancellation by Lessor or Lessee under this Clause 4.4, neither party shall have any further rights or obligations under this Agreement save as specified in Clause 4.3, this Clause 4.4 and paragraph 3 of Part 2 of Appendix 9 and save that Lessor shall return to Lessee any payments previously made by Lessee to Lessor under this Agreement.	
 
4.5	Lessee shall, when known, notify Lessor of the date on which Delivery is scheduled to occur (the “ Scheduled Delivery Date ”) but in any event (if known) shall:	
 
 	(a)	no later than fifteen (15) days prior to the Scheduled Delivery Month notify Lessor of the week in which the Scheduled Delivery Date is expected to occur; and	
 
2

 	(b)	no later than seven (7) days prior to the week notified to Lessor pursuant to Clause 4.5(a) above, notify Lessor of the Scheduled Delivery Date.	
 
4.6	Lessee may, by notice (the “ Lease Extension Notice ”) in writing given to the Lessor no later than twelve (12) months before the Initial Expiry Date, elect to extend the Term for a period of twelve (12) or twenty four (24) months from the Initial Expiry Date provided that:	
 
 	(a)	no Default or Event of Default has occurred and is continuing as at the date of the Lease Extension Notice and as of the Initial Expiry Date;	
 
 	(b)	in Lessor’s opinion, no material adverse change in the financial condition of Lessee or the Guarantor has occurred;	
 
 	(c)	Lessor has obtained financing on terms acceptable to it for the Aircraft during the period of the Term falling on or after the Initial Expiry Date; and	
 
 	(d)	no later than one (1) month after the receipt by Lessor of the Lease Extension Notice, Lessor and Lessee have agreed the amount of Rent to be paid by Lessee under this Agreement on each Rent Date falling on or after the Initial Expiry Date, the amount of Maintenance Reserves to be paid by Lessee for each month falling on or after the Initial Expiry Date and the revisions to the Return Condition (together, the “ Lease Extension Conditions ”). If an amendment to this Agreement incorporating the Lease Extension Conditions and otherwise on terms acceptable to Lessor has not been executed by Lessee on or prior to the date falling sixty (60) days after the date of receipt by Lessor of the Lease Extension Notice (or such longer period as Lessor may agree in its absolute discretion), then the option of Lessee in this Clause 4.6 to extend the Term shall thereupon lapse automatically and this Agreement shall then expire on the Initial Expiry Date. Upon any extension of the Term pursuant to this Clause 4.6, save for the Lease Extension Conditions, all other terms of this Agreement shall remain in full force and effect.	
 
5.	Payments	
 
5.1	Lessee shall, on or before the Delivery Date, pay to Lessor by way of deposit an amount equal to three (3) month’s Rent (the “ Deposit ”). The Deposit shall be placed by Lessor in an interest bearing account with HSH Nordbank AG, or any other person who may be the Security Trustee from time to time and any interest earned on the Deposit (net of any Taxes) shall be added to and form part of the Deposit for all purposes of this Agreement (and shall be returned to Lessee upon return of the Deposit pursuant to and in accordance with the terms of this Agreement). Lessor agrees to use reasonable endeavours to obtain interest on the Deposit at the rate from time to time quoted by HSH Nordbank AG, or the Security Trustee, as applicable, to customers generally for deposits in an amount equal to the Deposit and for a term equal to the Term At any time during the Term and provided no Default has occurred which is continuing, Lessee shall have the option to substitute for the Deposit an irrevocable letter of credit (the “ Letter of Credit ”) in an amount equal to the Deposit (the “ LC Amount ”) upon the terms and subject to the conditions set out in paragraph 1 of Appendix 5. Upon receipt by Lessor of the Letter of Credit, Lessor shall promptly and in any event within seven (7) Business Days refund to Lessee that part of the Deposit then held by Lessor, to the extent not previously applied by Lessor pursuant to Clause 5.4 or set-off by Lessor pursuant to Clause 5.6.	
 
3

5.2      (a)	For the purposes of calculating the amount of Rent payable hereunder, the Term shall be divided into successive periods (each, a “ Rental Period ”). The first Rental Period shall begin on the Delivery Date and each subsequent Rental Period shall begin on the next following Rent Date. Each Rental Period shall end on (but not include) the date numerically corresponding to the date at which it commences and which falls one (1) month after the commencement of that Rental Period, except that if there is no such numerically corresponding date in the relevant month, it will end on the last day of that month and provided that the last Rental Period shall end on the Expiry Date.	
 
 	(b)	Lessee shall have the option, exercisable by notice (the “ Initial Fixed Rent Notice ”) in writing to Lessor no later than two (2) Business Days prior to Delivery, to fix the Rent for a period of 2 years, 3 years, 4 years, 5 years or 6 years (each an “ Initial Fixed Rent Period ”). An Initial Fixed Rent Notice, once given by Lessee shall be irrevocable. If Lessee does not serve an Initial Fixed Rent Notice then Lessee will be deemed to have elected to fix the Rent for a period of two (2) years.	
 
 	(c)	Lessee shall have the option (the “ Rent Refix Option ”), exercisable by notice in writing to Lessor no later than seven (7) Business Days prior to the expiry of the Initial Fixed Rent Period, to elect to have Rent for the period of the Term on or after Initial Fixed Rent Period and up to but excluding the Initial Expiry Date calculated on either a fixed rate or a floating rate basis for that period (the “ Rent Refix Period ”). A Rent Refix Notice once given shall be irrevocable. If Lessee does not issue a Rent Refix Notice, Lessee shall be deemed to have elected to pay floating Rent for the Rent Refix Period.	
 
5.3      (a)	Lessee will pay to Lessor or its order the amount calculated pursuant to Clause 5.3(b) or Clause 5.3(c) or Clause 5.3(d) below as applicable in advance on each Rent Date falling on or prior to the Initial Expiry Date. In respect of the period of the Term (if any) falling on or after the Initial Expiry Date, Lessee will pay to Lessor or its order on each Rent Date the amount agreed between Lessor and Lessee pursuant to Clause 4.6 above.	
 
 	(b)	For the purposes of this Agreement, the Rent for each Rental Period falling during the period of the Term up to but excluding the last day of the Initial Rent Fixed Period will be calculated as follows:	
*****
*****
*****
*****
*****
 
 	(c)	If Lessee elects to have the Rent during the Rent Refix Period calculated on a fixed rate basis, then for the purposes of this Agreement, the Rent for	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
4

 	each Rental Period falling during the Rent Refix Period will be calculated as follows:	
*****
*****
*****
*****
*****

Initial Fixed Rent Period	  	Adjustment Factor	
		
2 years	  	*****	
		
3 years	  	*****	
		
4 years	  	*****	
		
5 years	  	*****	
 
 	(d)	If Lessee elects or is deemed to have elected to have the Rent during the Rent Refix Period calculated on a floating rate basis, then for the purposes of this Agreement, the Rent for each Rental Period falling during the Rent Refix Period shall be calculated as follows:	
*****
*****
*****
*****
*****

Rental Period	  	Adjustment Factor	
*****	  		
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
5

			
Rental Period	  	Adjustment Factor	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
6

5.4      (a)	If Lessee or the Guarantor fails to comply with any provision of the Transaction Documents, any Event of Default shall have occurred and be continuing or any event of default (howsoever defined) shall have occurred and be continuing under any Other Agreement, in addition to all rights and remedies accorded to Lessor elsewhere under the Transaction Documents or under any applicable law in respect of the Deposit and the Letter of Credit (if applicable), Lessor may immediately or at any time thereafter, without prior notice to Lessee (but Lessor shall, without prejudice to Lessor’s rights or Lessee’s obligations under this Clause 5.4(a), notify Lessee of any application by Lessor pursuant to this Clause 5.4, promptly after such application by Lessor), apply the Deposit, the Maintenance Reserves or, if applicable, make a drawing under the Letter of Credit and apply all or part of the amount drawndown under the Letter of Credit, in each case, in or towards the payment or discharge of any matured obligation owed by Lessee, the Guarantor or any Affiliate of Lessee under the Transaction Documents or any Other Agreement, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in Clause 5.6 against all or part of the Deposit, the Maintenance Reserves, or, if applicable, the amount drawndown under the Letter of Credit.	
 
 	(b)	If Lessor exercises the rights described in Clause 5.4 (a) above, Lessee shall, following a demand in writing from Lessor, within ten (10) Business Days restore the Deposit, the Maintenance Reserves or, if applicable, the LC Amount to the level at which it stood immediately prior to such exercise.	
 
5.5	If Lessee fails to pay any amount payable under any Transaction Document on the due date, Lessee will pay on demand from time to time to Lessor interest (both before and after judgement) on that amount, from the due date to the date of payment in full by Lessee to Lessor, at the rate calculated by Lessor to be LIBOR plus 200 basis points per annum. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year.	
 
5.6	Lessor may set off any matured obligation owed under any Transaction Document or any Other Agreement against any obligation (whether or not matured) owed by Lessor to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or at its option New York for the purpose of the set-off. If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained or liquidated. Lessor will not be obliged to pay any amounts to Lessee under any Transaction Document so long as any sums which are then due from Lessee under the Transaction Documents or any Other Agreement remain unpaid and any such amounts which would otherwise be due from Lessor hereunder will fall due only if and when Lessee has paid all such sums except to the extent Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing.	
If any sum paid or recovered in respect of the liabilities of Lessee under any Transaction Document is less than the amount then due, Lessor may apply that sum to amounts due under the Transaction Documents in such proportions and order and generally in such manner as Lessor may determine.
 
5.7	Each party shall pay its own legal and professional costs in respect of the transactions contemplated by the Transaction Documents. Lessee shall pay all	
 
7

 	costs associated with registering the Aircraft, this Agreement, any documents contemplated under the Transaction Documents and the interests of Lessor (but not the Security Trustee or any Lender) in the Aircraft in the State of Registration including, without limitation, the cost, if applicable, of notarising and apostilling this Agreement in New York.	
 
5.8	Lessee’s obligations under this Agreement are absolute and unconditional irrespective of any contingency whatsoever including (but not limited to):	
 
 	(a)	any right of set-off, counterclaim, recoupment, defence or other right which either party to this Agreement may have against the other;	
 
 	(b)	any unavailability of the Aircraft for any reason (except as a result of a Total Loss, following receipt by Lessor or the Security Trustee of the Agreed Value and any other amounts due and owing as at the date of receipt by Lessor or Security Trustee of the Agreed Value pursuant to and in accordance with paragraph 2 of Part 3 of Appendix 7), including, but not limited to, a requisition of the Aircraft or any prohibition or interruption of or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft;	
 
 	(c)	any lack or invalidity of title or any other defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind or nature of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or in respect of or any damage to the Aircraft;	
 
 	(d)	any insolvency, bankruptcy, reorganisation, concurso mercantil , arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor, Lessee or any other person;	
 
 	(e)	any invalidity or unenforceability or lack of due authorisation of, or other defect in, any Transaction Document; and	
 
 	(f)	any other cause which but for this provision would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under, and in accordance with the terms of, this Agreement.	
 
5.9	The time stipulated in the Transaction Documents for all payments payable by Lessee thereunder and for the performance of Lessee’s other obligations under the Transaction Documents will be of the essence.	
 
5.10	If any payment under any Transaction Document falls due on a day which is not a Business Day, that payment will be due on the immediately preceding Business Day.	
 
5.11	Lessee shall comply with the additional payment provisions set out in Part 1 of Appendix 5.	
 
5.12	Lessee shall pay Maintenance Reserves to Lessor upon the terms and subject to the conditions set out in Part 2 of Appendix 5.	
 
5.13	Lessor will release funds to Lessee from the Maintenance Reserves upon the terms and subject to the conditions set out in Part 3 of Appendix 5.	
 
8

6.	Taxation	
 
6.1      (a)	All payments by Lessee under or in connection with the Transaction Documents will be made without set-off or counterclaim, free and clear of and without deduction or withholding for or on account of any Taxes (other than Lessor Taxes) unless such deduction or withholding is required by law in which event (but subject always to Clause 6.1(b)) Lessee shall:	
 
 	(i)	deduct or withhold the amount legally required;	
 
 	(ii)	pay to the relevant Government Entities within the period for payment permitted by applicable law the amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor or the relevant Indemnitee after each payment an official receipt of the relevant Government Entities involved (or other evidence reasonably acceptable to Lessor or such Indemnitee) for all amounts so deducted or withheld.	
 
 	(b)	If Lessee is compelled by law to make any payment under or in connection with the Transaction Documents subject to any Tax (other than a Lessor Tax) and Lessor does not actually receive for its own benefit on the due date a net amount equal to the full amount provided for under the Transaction Documents, Lessee will pay all necessary additional amounts to ensure receipt by Lessor of the full amount so provided for.	
 
6.2	Lessee will on demand pay and indemnify the Indemnitees against all Taxes (other than Lessor Taxes) levied or imposed against or upon Lessor or Lessee or any other Indemnitee and relating to or attributable to Lessee, the Transaction Documents, including the payments due under the Transaction Documents, or the Aircraft directly or indirectly in connection with the importation, exportation, registration, ownership, leasing, sub-leasing, wet-leasing, purchase, delivery, possession, use, operation, repair, maintenance, overhaul, transportation, landing, storage, presence or redelivery of the Aircraft or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom.	
 
6.3      (a)	If and to the extent that any sums payable to an Indemnitee by Lessee under any Transaction Document by way of indemnity or under this Clause 6 are insufficient, by reason of any Taxes (other than Lessor Taxes) payable in respect of those sums, for the Indemnitee to discharge the corresponding liability to the relevant third party (including any Taxation authority), or to reimburse the Indemnitee for the cost incurred by it to a third party (including any Taxation authority) Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied leave the Indemnitee with the same amount as it would have been entitled to receive in the absence of that Tax liability together with interest on the amount of the deficit at the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgement).	
 
 	(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any person other than an Indemnitee are treated as taxable in the hands of an Indemnitee, Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied indemnify that Indemnitee to the same extent as it would have been indemnified in the absence of such Tax liability together with interest on the amount payable by Lessee under this Clause 6.3(b) at	
 
9

 	the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgement).	
 
6.4	Lessee will promptly pay:	
 
 	(a)	all licence and registration fees, Taxes (other than Lessor Taxes) and other amounts of any nature imposed by any Government Entity upon or with respect to the Aircraft including without limitation the importation, leasing, possession, use, operation or return of the Aircraft;	
 
 	(b)	all rent, fees, charges, Taxes (other than Lessor Taxes) and other amounts in respect of any premises where the Aircraft or any Part thereof is located from time to time; and	
 
 	(c)	and all charges incurred during the Term in connection with (i) the furnishing, issue or provision of information, directions and other facilities in connection with the navigation or movement of aircraft (including the control or movement of vehicles in any part of an airport used for the movement of aircraft) and (ii) the landing, parking or taking off of aircraft at airports or for the use of, or services provided at, airports (including, without limitation, all charges due to SENEAM),	
except to the extent such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and the non-payment of which does not give rise to any risk of the Aircraft or any interest therein being sold, forfeited, arrested, detained or otherwise lost or of civil or criminal liability on the part of Lessor, the Security Trustee or any Lender.
 
6.5	The Lessee shall promptly pay any stamp or other documentary duties and Taxes (other than Lessor Taxes), and any notarial, translation or similar fees, to which this Agreement or any other Transaction Document (other than any Mortgage) may be subject, or which is necessary for purposes of registration of this Agreement with the Air Authority and the Lessee shall pay to the Lessor on demand the amount of Losses which the Lessor may incur as a result of any delay by the Lessee in paying the same or any omission by the Lessee to pay the same.	
 
6.6	If Lessee is liable to gross-up or indemnify under Clause 6.1 or Clause 6.2, then, without in any way limiting, reducing or otherwise qualifying any rights of any Indemnitee or any obligations of Lessee under this Clause 6, Lessor shall:	
 
 	(a)	promptly upon becoming aware of the liability arising notify Lessee thereof; and	
 
 	(b)	in consultation in good faith with Lessee, for a period of up to thirty (30) days from the date of such notification, take such steps at the expense of Lessee as may be open to it to mitigate the effects of such circumstances on Lessee, including, if requested by Lessee, the filing of any Tax form or return which any Indemnitee is legally able to file;	
provided that neither Lessor nor any Indemnitee shall be under any obligation to take or continue to take any such action or other steps if an Event of Default has occurred and is continuing or if it is satisfied, in its absolute discretion, to do so would interfere with the right of Lessor or such Indemnitee to arrange its affairs (tax or otherwise) in whatever manner it thinks fit or oblige Lessor or such Indemnitee to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax, or have a material adverse effect on its
 
10

business, or operations or financial condition or reputation or the financial basis under which, inter alia, the Transaction Documents have been entered into or would entail any cost or expense to Lessor or that Indemnitee (unless, in the case of any cost or expense, Lessor or that Indemnitee shall have been indemnified or otherwise secured to its satisfaction) or is otherwise prejudicial to it.
 
6.7	If any Indemnitee in good faith determines that it has realised a tax benefit (by way of deduction, credit or otherwise) as a result of any payment for which Lessee is responsible under this Clause 6, Lessor shall pay or use all reasonable endeavours to procure that the relevant Indemnitee pays to Lessee as soon as practicable after the tax benefit has been realised, an amount which the Indemnitee determines will ensure that (after taking into account of the payment itself) such Indemnitee is in no better and no worse position than it would have been if the deduction had not applied.	
 
6.8	Without prejudice to the obligations of Lessee pursuant to Clause 6.1, Lessor will use reasonable endeavours to deliver to Lessee and will use reasonable endeavours to procure that each other Indemnitee delivers to Lessee, as soon as reasonably practicable following receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English), such forms, certifications and other documents as (i) an Indemnitee is entitled under applicable law to execute or obtain and (ii) are required by applicable law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Agreement without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable law to withhold in the absence of such document provided that nothing in this Clause 6.8 shall oblige Lessor or any other Indemnitee to take any action if in its reasonable opinion, acting in good faith, to do so would have a material adverse effect on its business, operations or reputation or the financial basis on which the Transaction Documents have been entered into or would entail any cost or expense to Lessor or any other Indemnitee unless, in the case of any cost or expense, the Lessee and each other Indemnitee shall have been indemnified or otherwise secured to its satisfaction. Without prejudice to the generality of the foregoing provisions of this Clause 6.8, Lessor will use reasonable endeavours to provide to Lessee as soon as reasonably practicable after Delivery, and in any event, no later than the first Rent Date falling after Delivery and on each anniversary of the Delivery Date falling during the Term, a statement from the Irish Tax Revenue Commissioners that Lessor is resident for tax purposes in Ireland.	
 
7.	Quiet Enjoyment	
 
7.1	Provided no Event of Default has occurred and is continuing under this Agreement, neither Lessor, the Lease Manager nor any person lawfully claiming by or through Lessor or the Lease Manager will interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee, but the exercise by Lessor, the Security Trustee or any Lender of its rights under or in connection with this Agreement or the Assignment, in each case, pursuant to and in accordance with the terms of this Agreement or the Assignment (as the case may be) will not constitute such an interference.	
 
7.2	Simultaneously with delivery of the Aircraft from Lessor to Lessee under this Agreement, Lessor shall procure that the Security Trustee provides to Lessee the Quiet Enjoyment Letter subject to Lessee providing the Security Trustee with the Acknowledgement of the Assignment.	
 
11

7.3	Lessor will not exercise any rights pursuant to the Deregistration Power of Attorney save where an Event of Default has occurred and is continuing.	
 
7.4	Lessor will not exercise any rights pursuant to the letter set out in Part 2 of Exhibit C save where an Event of Default has occurred and is continuing.	
 
7.5	Lessor will not exercise any rights pursuant to the letter set out in Part 1 of Exhibit C more frequently than quarterly, save where a Default has occurred and is continuing.	
 
8.	Lessee’s Covenants	
Lessee hereby covenants with Lessor in the terms set out in Appendix 6.
 
9.	Insurance and Total Loss	
 
9.1	Lessee hereby covenants with Lessor in the terms set out in Appendix 7.	
 
9.2	The provisions of Part 3 of Appendix 7 shall apply if a Total Loss occurs or if there is any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss.	
 
10.	Manufacturer’s Warranties	
 
10.1  (a)	Pursuant to the terms of the Airframe Warranty Agreement and the Engine Warranties Agreement, with effect from the Delivery Date, Lessor will authorise Lessee to exercise, such rights as Lessor may have in respect of the Airframe Warranties and the Engine Warranties respectively upon the terms and subject to the conditions contained in the Airframe Warranty Agreement and the Engine Warranties Agreement.	
 
 	(b)	Lessee shall give Lessor prompt written notice of any warranty claim which is settled with Lessee on the basis of a total or partial cash payment in excess of US$250,000. Lessee shall apply any cash payments whether above or below $250,000 to remedy the defect or, if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, as compensation to Lessee for any loss of use of the Aircraft arising as a result of such defect. Any cash payments to Lessee in respect of warranty claims which are not applied to the repair or remedy of defects in the Aircraft, and which are not in respect of compensation for loss of use of the Aircraft during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall be paid by Lessee to Lessor.	
 
 	(c)	Upon the occurrence of the earlier of an Event of Default or termination or expiry of the leasing of the Aircraft under this Agreement (each a “ Termination Event ”):	
 
 	(i)	all rights under the Airframe Warranties and the Engine Warranties will immediately revert to Lessor, including all claims thereunder (whether or not perfected except (aa) to the extent necessary to reimburse Lessee the actual costs incurred by it for the repair of any defect or, (bb) if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, to compensate Lessee for any loss of use of the Aircraft suffered by it during the Term as a result of the defect) and Lessee will immediately take all steps and execute all documents required by Lessor to perfect such reversion; and	
 
12

 	(ii)	Lessor may retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this Clause 10 in the absence of such Event of Default or such Termination Event (arising otherwise than as a result of an Event of Default), as the case may be, cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee and recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft not fully and completely rectified by Lessee before such Event of Default or Termination Event (arising otherwise than as a result of an Event of Default), as the case may be and, in the absence of such an Event of Default, not constituting compensation for loss of use during the Term.	
 
10.2	To the extent any warranties relating to the Aircraft are made available under an agreement between any manufacturer, seller, subcontractor or supplier and Lessee, Lessee will:	
 
 	(a)	pay the proceeds of any claim thereunder in accordance with Clause 10.1 and pending such payment will hold the claim and the proceeds on trust for Lessor; and	
 
 	(b)	Lessee will take all such steps as are necessary at the end of the Term to ensure the benefit of any of those warranties which have not expired are vested in Lessor.	
 
11.	Indemnity	
 
11.1	Lessee agrees to defend, indemnify and hold harmless the Indemnitees from and against any and all claims, proceedings, losses, liabilities, suits, judgements, costs, expenses, penalties or fines (each a “ Claim ”) regardless of when the same is made or incurred, whether during or after the Term:	
 
 	(a)	which may at any time be suffered or incurred directly or indirectly as a result of or connected with the possession, importation, delivery, performance, management, ownership, registration, control, maintenance, condition, service, repair, overhaul, leasing, use, operation, storage, transport or return of the Aircraft, any Engine or Part (either in the air or on the ground) whether or not the Claim may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of when the same arises or whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee;	
 
 	(b)	which arise out of any act or omission which invalidates or which renders voidable any of the Insurances; and	
 
 	(c)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right or a breach of any obligation of confidentiality owed to any person,	
 
13

 	but excluding any Claim in relation to a particular Indemnitee to the extent that such Claim:	
 
 	(i)	is covered pursuant to another indemnity provision of any Transaction Document; or	
 
 	(ii)	arises solely as a result of the wilful misconduct or Gross Negligence of that Indemnitee under any Transaction Document; or	
 
 	(iii)	relates to Lessor Taxes or a Lessor Lien attributable to that Indemnitee; or	
 
 	(iv)	arises solely as a result of any breach by that Indemnitee of any express obligation owed to Lessee under this Agreement or any other Transaction Document; or	
 
 	(v)	relates solely to the period after the Expiry Date and return of the Aircraft in the condition required by this Agreement and which is unrelated to any act or omission of Lessee or the use or possession by Lessee of the Aircraft during the Term or the transactions contemplated by the Transaction Documents.	
 
11.2	The indemnities contained in this Agreement will continue in full force after the Expiry Date.	
 
11.3	All rights expressed to be granted to each Indemnitee (other than the Lessor) under this Agreement are given to the Lessor on behalf of each such Indemnitee.	
 
12.	Return of aircraft	
The provisions of Appendix 8 shall govern the parties’ respective rights and obligations regarding the return of the Aircraft.
 
13.	Default	
 
13.1	Each of the events specified in Part 1 of Appendix 9 will constitute an Event of Default and a repudiation of this Agreement by Lessee.	
 
13.2	The provisions of Part 2 of Appendix 9 shall govern the respective rights and obligations of the parties following the occurrence of a Default or an Event of Default.	
 
13.3	If Lessee fails to comply with any provision of any Transaction Document, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat the non-compliance as an Event of Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection therewith.	
 
13.4	The rights of Lessor under the Transaction Documents may be exercised as often as necessary, are cumulative and not exclusive of its rights under any law and may be waived only in writing and specifically. Delay in exercising or non-exercise of any such right will not constitute a waiver of that right.	
 
14

14.	Assignment	
The provisions set out in Appendix 10 shall govern assignment and/or transfer of Lessee’s and Lessor’s rights and obligations under this Agreement.
 
15.	Illegality	
 
15.1	If it becomes, or will become, illegal for either Lessor or Lessee to perform its obligations or to enforce its rights under any Transaction Document or to participate in the transactions contemplated thereby, Lessor or Lessee (as the case may be) shall, promptly upon becoming aware of such cessation or illegality, notify the other party thereof (such notice being referred to herein as an “ Illegality Notice ”). Subject to any restrictions imposed on the party affected by such illegality and provided that the rights of the other party are not adversely impacted by such illegality, the parties shall, following service or receipt of an Illegality Notice, negotiate in good faith for a period (the “ Consultation Period ”) of up to thirty (30) days from the date of the Illegality Notice (or such shorter period as may end on the date on which such illegality takes effect) with a view to restructuring the arrangements contemplated by the Transaction Documents so as to avoid such illegality. The party for whom it becomes illegal to perform its obligations or to enforce its rights under the Transaction Documents or to participate in the transactions contemplated thereby shall reimburse the other parties involved in such consultations for their reasonable legal and other expenses incurred in connection with such consultations and the implementation of arrangements (if any) agreed during such consultations. The Lessee acknowledges that Security Trustee or any Lender may, at no cost to the Lessee, also participate in such consultations.	
 
15.2	If no satisfactory arrangement for restructuring the transactions contemplated by the Transaction Documents is agreed by the end of the Consultation Period, Lessor may, by written notice to Lessee, terminate the leasing of the Aircraft under this Agreement with effect from the date of such notice (if the illegality has become effective on or before such date) or otherwise with effect from the last Business Day before the illegality takes effect, whereupon the Lessee shall forthwith redeliver the Aircraft to Lessor in accordance with Appendix 8.	
 
16.	Notices	
 
16.1	All notices under, or in connection with, the Transaction Documents will, unless otherwise stated, be given in writing by letter or facsimile. Any such notice is deemed effectively to be given as follows:	
 
 	(a)	if by letter, when delivered personally or, if sent by registered post, on the third day after posting; and	
 
 	(b)	if by facsimile, when transmitted and confirmed by the transmitting party’s fax machine.	
 
16.2	The address, facsimile and telephone numbers of Lessee and Lessor are as follows:	

Lessee:	 	Address:	  	Av. Prolongación Paseo de la Reforma 490
Piso 1, Col. Santa Fe Pena Blanca, 01210
Mexico	
			
	 	Attn:	  	General Counsel/Director Juridico	
	 	Facsimile:	  	+52 55 52 61 6460	
	 	Telephone:	  	+52 55 52 61 6400	
 
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Lessor:	 	Address:	  	28 Upper Mount Street	
	 		  	Dublin 2	
	 		  	Ireland	
			
	 	Attn:	  	Company Secretary	
	 	Facsimile:	  	+353 1 639 8118	
	
(with a copy to Amentum Capital Limited: Address: 28 Upper Mount Street	
	 		  	Dublin 2	
	 		  	Ireland	
			
	 	Attn:	  	Company Secretary	
	 	Facsimile:	  	+353 1 639 8118	
	 	Telephone:	  	+353 1 6398111	
 
16.3	All notices to be given under the Transaction Documents will be in English. All documents delivered to Lessor pursuant to the Transaction Documents will be in English, or if not in English, will be accompanied by a certified English translation.	
 
17.	Disclaimers and Waivers	
 
17.1	THE AIRCRAFT IS DELIVERED “ AS IS, WHERE IS ” AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR, LESSEE AND THE INDEMNITEES NEITHER LESSOR NOR ANY OTHER INDEMNITEE WILL HAVE ANY LIABILITY IN RELATION TO, AND NEITHER LESSOR NOR ANY OTHER INDEMNITEE HAS NOR WILL BE DEEMED TO HAVE MADE OR GIVEN, ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT, INCLUDING BUT NOT LIMITED TO:	
 
 	(a)	THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY USE OR PURPOSE, VALUE, CONDITION, OR DESIGN, OF THE AIRCRAFT OR ANY PART; OR	
 
 	(b)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM LESSOR’S OR ANY OTHER INDEMNITEE’S NEGLIGENCE, ACTUAL OR IMPUTED; OR	
 
 	(c)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR ANY LIABILITY OF LESSEE TO ANY THIRD PARTY, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.	
 
17.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND EACH INDEMNITEE, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF ANY INDEMNITEE AND ALL CLAIMS AGAINST EACH INDEMNITEE HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE OPERATION OR PERFORMANCE OF THE AIRCRAFT.	
 
17.3	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE AND THE OTHER TERMS OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE TERMS OF THIS AGREEMENT HAVE BEEN AGREED AND THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED NOTWITHSTANDING ITS PROVISIONS.	
 
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18.	Confidentiality	
 
18.1	Lessor and Lessee agree that the Transaction Documents and information supplied pursuant to the Transaction Documents are to be kept confidential. Neither party will disclose or permit its officers, agents or advisers to disclose any information from or in connection with the Transaction Documents without the consent of the other or to use any such information for any purpose other than for the purpose of the transactions contemplated by the Transaction Documents, except:	
 
 	(a)	for disclosures of the terms of the Transaction Documents and any information provided under this Agreement made by Lessor to any actual or potential assignee or transferee permitted by Appendix 10 or to any actual or potential Lender or Security Trustee or to their respective professional advisers, provided that (i) Lessor has obtained a confidentiality undertaking in respect of such information from each such person or (ii) such person is subject to a recognised duty of confidentiality;	
 
 	(b)	for disclosures made by either party to its professional advisers, shareholders and any rating agency or as may be required by law or legal process or by the administrative or regulatory requirements of any recognised stock exchange on which such party’s or its shareholders’ shares are listed;	
 
 	(c)	for disclosures made by or on behalf of either party or any Indemnitee to any governmental or other official body in connection with the registration of any Transaction Document, the Mortgage or the Assignment or otherwise reasonably advisable in order to establish, maintain, protect and enforce the rights and remedies of either party hereto or any Indemnitee under the Transaction Documents, the Mortgage or the Assignment;	
 
 	(d)	Lessee may deliver a copy of this Agreement to International Finance Corporation (“ IFC ”) pursuant to and in accordance with the facility agreement between Lessee and the Guarantor and IFC and IFC may disclose this Agreement to its legal advisers and other professional advisers provided such persons are under a recognised duty of confidentiality or have executed a confidentiality undertaking or to a rating agency or to any potential assignee or transferee of IFC , subject to the receipt by Lessee of a confidentiality undertaking from each such assignee or transferee,	
provided that notwithstanding the foregoing provisions of this Clause 18, Lessor may only disclose the Agreed Maintenance Programme to third parties who are either bound by a duty of confidentiality or have executed a confidentiality undertaking.
 
19.	Change of Control	
 
19.1	Lessee shall immediately notify Lessor in writing (a “ Change of Control Notice ”) if the shareholders in Lessee at the date of this Agreement (the “ Current Shareholders ”) individually or together cease to own, or enter into any legally binding arrangements pursuant to which they agree to cease to beneficially own (directly or indirectly) 50% of Lessee or cease to retain the right to control the management and policies of Lessee (a “ Change of Control ”).	
 
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19.2	Promptly:	
 
 	(a)	after receipt of a notice referred to in Clause 19.1, Lessor will on request of Lessee; or	
 
 	(b)	upon Lessor becoming aware of a Change of Control, Lessee will on request of Lessor,	
consult in good faith with Lessee or Lessor, as the case may be for a period (the “ Change of Control Consultation Period ”) of up to sixty (60) days from the date of the Change of Control Notice with a view to restructuring the arrangements contemplated by the Transaction Documents (including, without limitation, the provision by Lessee of new or additional security) in a manner acceptable to Lessor and the Security Trustee (each acting in good faith). Lessee shall reimburse Lessor and the Security Trustee on behalf of itself and without duplication any Lender for their reasonable legal and other out of pocket expenses incurred in connection with such consultations and the implementation of arrangements (if any) agreed during such consultations.
 
19.3	If no satisfactory arrangement for restructuring the transactions contemplated by the Transaction Documents is agreed by the end of the Change of Control Consultation Period, Lessor may, by written notice to Lessee given within fifteen (15) days of the last day of the Change of Control Consultation Period, terminate the leasing of the Aircraft under this Agreement with effect from the date (the “ Early Termination Date ”) not earlier than six (6) months after the date of such notice and upon the Early Termination Date Lessee shall redeliver the Aircraft to Lessor in accordance with Appendix 8.	
 
20.	Law and Jurisdiction	
 
20.1	This Agreement, including any non-contractual obligations arising out of or in connection with, this Agreement is governed by and this Agreement shall be construed in accordance with the laws of Ireland.	
 
20.2	The parties hereto irrevocably agree that any legal action or proceedings in connection with this Agreement may be brought in the courts of Ireland. The parties further agree that any party may take proceedings against the other in the courts of the domicile of the parties or where the Aircraft is located, hereby waiving any jurisdiction not referred to in this Clause 20.2. The courts agreed to in this paragraph shall have jurisdiction to settle any disputes arising out of or in connection with this Agreement.	
 
20.3	Lessee agrees that the process by which any suit, action or proceeding is begun in Ireland may be served on it by being delivered to Matsack Trust Limited at its address for the time being in Ireland.	
 
20.4	Each of the parties irrevocably waives any objection it may now or hereafter have to the laying of venue of any action or proceeding in any court and any claim it may now or hereafter have that any action or proceeding has been brought in an inconvenient forum.	
 
20.5	Each party irrevocably and unconditionally:	
 
 	(a)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement, no immunity from such legal proceedings will be claimed by it;	
 
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 	(b)	waives any such right of immunity which it or it’s assets now has or may in the future acquire; and	
 
 	(c)	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgement which may be made or given in such proceedings.	
IN WITNESS whereof the parties hereto have executed this Agreement on the date shown at the beginning of this Agreement.
 
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SIGNED on behalf of CONCESIONARIA VUELA
COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Alfonso Ascencio Triujeque	
Title:	 	General Counsel	
SIGNED on behalf of AMENTUM AIRCRAFT LEASING NO. FOUR LIMITED

By:	 	/s/ Stephan Rihm	
Name:	 	Stephan Rihm	
Title:	 	Vice President Contracts and Legal	
 
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APPENDIX 1
PART 1
DEFINITIONS
“” A ” Check ” means a package of scheduled maintenance tasks with repeat intervals up to 600 Flight Hours, 6 months and 500 Cycles (including any lesser tasks) performed by an Agreed Maintenance Performer in accordance with the Agreed Maintenance Programme.
“ Acknowledgement of Assignment of Guarantee ” means the acknowledgement from the Guarantor to Lessor and the Security Trustee in respect of the Assignment in the form of Part 1 of Exhibit A.
“ Acknowledgement of Assignment of Lease ” means the acknowledgement from Lessee to Lessor and the Security Trustee in respect of the Assignment in the form of Part 2 of Exhibit A.
“ Agreed Maintenance Performer ” means Lessee, Aeromantenimiento S.A. and any person which is approved by, and holds all necessary licences from, the Air Authority and holding a valid repair station certificate for maintenance work on the Airframe, Landing Gear, APU, Engine and Parts issued by the FAA or, in respect of any “A” Check, any maintenance facility approved by the Air Authority.
“ Agreed Maintenance Programme ” means the Maintenance Programme for the Aircraft from time to time as approved by the Air Authority which shall be based on the Maintenance Planning Document.
“ Agreed Value ” means with respect to the period from the Delivery Date up to but excluding the first anniversary of the Delivery Date, ***** and thereafter reducing on each anniversary of the Delivery Date by an amount equal to ***** of the amount of the Agreed Value on the previous such anniversary or the Delivery Date as applicable.
“ Affiliate ” means in relation to any person (the “ First Person ”):
 
(a)	any person controlled by the First Person;	
 
(b)	any person who controls such First Person;	
 
(c)	any person controlled by the same person who controls the First Person,	
(and for this purpose “ Control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Air Authority ” means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
(a)	have control or supervision of civil aviation in that state; or	
 
(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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“ Airbus Consent and Agreement ” means the consent and agreement of the Airframe Manufacturer, in the form scheduled to the Purchase Agreement Assignment, entered into or to be entered into on or prior to the Delivery Date between the Guarantor, Lessor and the Airframe Manufacturer.
“ Airbus Delivery Documents ” means:
 
(a)	the bill of sale to be executed in respect of the Airframe and the Engines by the Airframe Manufacturer in favour of Lessor pursuant to the Purchase Agreement Assignment (the “ Bill of Sale ”);	
 
(b)	the invoice issued by the Airframe Manufacturer in respect of the Aircraft at Delivery;	
 
(c)	the certificate of acceptance to be executed by Lessee (on behalf of Lessor) at Delivery in respect of the Aircraft pursuant to the Purchase Agreement Assignment;	
 
(d)	the Netting Letter; and	
 
(e)	the Commitment Letter.	
“ Aircraft ” means the aircraft described in Appendix 2, (which term includes where the context admits a separate reference to the Engines, Parts and Aircraft Documents) (but for the avoidance of doubt excludes any engine or part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Aircraft Documents ” means all such technical data, documents, manuals and log books and any other records relating to the Aircraft which Lessee is required to keep and maintain to comply with the regulations of the Air Authority and FAA and all additions, renewals, revisions and replacements from time to time made in accordance with this Agreement and shall include:
 
(a)	without limitation, at Delivery, those documents delivered by the Airframe Manufacturer under the Purchase Agreement Assignment; and	
 
(b)	at redelivery, those documents set out in Part 3 of Appendix 8.	
“ Airframe ” means the Aircraft, excluding the Engines and Aircraft Documents.
“ Airframe Manufacturer ” means Airbus S.A.S.
“ Airframe Warranties ” means the warranties in respect of the Aircraft specified in the Airframe Warranty Agreement.
“ Airframe Warranty Agreement ” means the airframe warranty agreement entered into or to be entered into on or prior to the Delivery Date between Lessee, Lessor, the Security Trustee and the Airframe Manufacturer.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued or endorsed by the FAA, the French DGAC and/or the Air Authority applicable to the Airframe, any Engine, any Part or the Aircraft Documents.
“ APU ” means the auxiliary power unit installed on the Aircraft at Delivery and any replacement auxiliary power unit installed on the Aircraft in accordance with this Agreement and in each case includes any attaching Part.
 
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“ APU Hours ” means each hour or part of an hour during which the APU is operated.
“ APU Performance Restoration ” means a shop visit which restores performance and durability of the APU so as to return the APU to service for a complete APU run interval and shall include a Heavy Repair (as defined in the Honeywell Shop Maintenance Philosophy) or APU overhaul as required by the APU manufacturer’s component maintenance manual.
“ Arranger ” means HSH Nordbank AG, New York Branch, in its capacity as head arranger under Lessor’s financing arrangements.
“ Assignment ” means any present or future assignment in favour of the Security Trustee of Lessor’s rights in respect of, amongst other things, this Agreement, the Insurances, any Letter of Credit, the Guarantee, the Deposit and the Maintenance Reserves as security for Lessor’s obligation to the Lenders.
“ Assignment of Insurances ” means the assignment of Lessee’s rights, title, benefit and interest in and to the Insurances (other than the liability insurances) entered into or to be entered into on or prior to the Delivery Date between Lessor as assignee and Lessee as assignor.
“ Business Day ” means a day (other than a Saturday or Sunday) on which business of the nature required by this Agreement is carried out in Ireland and Mexico or, where used in relation to payments, on which banks are open for business in Dublin, Ireland and New York.
“ Certificate of Acceptance ” means a certificate of acceptance in respect of the Aircraft duly executed by Lessee substantially in the form of Exhibit B.
“” C ” Check ” means a package of scheduled maintenance tasks with repeat intervals between 18 and 24 months, 5,000 and 7,000 Flight Hours or 4,000 and 5,000 Cycles performed by an Agreed Maintenance Performer in accordance with the Maintenance Planning Document in effect on the relevant date.
“ Claim ” has the meaning given to it in Clause 11.1.
“ Commitment Letter ” means the commitment letter entered into between the Guarantor and/or Lessee with the Airframe Manufacturer in respect of the Aircraft on or prior to Delivery.
“ Consolidated Text ” means the Consolidated Text of the Convention and the Protocol attached to resolution No. 1 of the Final Act of the Diplomatic conference to adopt the Convention and the Protocol held under the auspices of ICAOP and UNIDROIT at Cape Town, South Africa from 29 October to 16 November, 2001.
“ Convention ” means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November, 2001.
“ Cycle ” means, in relation to the Airframe, one take-off and landing of the Aircraft, and in relation to an Engine, an APU, or a Landing Gear, or any fitted component installed in any of the foregoing one take off and landing of any aircraft on which that Engine, APU, or Landing Gear or any other fitted component, as the case may be, is installed.
“ Default ” means any Event of Default and any event which with the giving of notice, lapse of time or determination of materiality would constitute an Event of Default.
 
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“ Delivery ” means delivery of the Aircraft by the Airframe Manufacturer to Lessor pursuant to the Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means the Airbus facility in Hamburg, Germany.
“ Deregistration Power of Attorney ” means a deregistration and export power of attorney in the form of Exhibit D or in such other form agreed by Lessor.
“ Dollars ” and “ $ ” means the lawful currency of the United States of America.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 or any other organisation or authority that, under the laws of the European Union, shall from time to time have jurisdiction over, amongst other things, aircraft airworthiness and aircraft safety standards for the European Union.
“ Emergency Operations ” means any deviation in an agreed flight path of the Aircraft to a Prohibited Jurisdiction made solely in order to protect the Aircraft or the lives, safety and/or wellbeing of the passengers and crew and provided Lessee shall promptly remove the Aircraft from such Prohibited Jurisdiction upon cessation of the conditions giving rise to the relevant flight path deviation.
“ EMMP ” means the latest revision of the engine maintenance management programme of the Lessee for the Engines adapted from the latest revision of the Engine Manufacturer’s engine maintenance management programme.
“ Engine ” means whether or not installed on the Aircraft:
 
(a)	each engine of the manufacture and model specified in Appendix 2 which the Airframe Manufacturer elects to tender to Lessor under the Purchase Agreement Assignment, such engines being described as to serial numbers on the Certificate of Acceptance to be executed by Lessee upon delivery of the Aircraft under this Agreement; or	
 
(b)	any engine which has replaced that engine, title to which has passed to Lessor in accordance with this Agreement;	
and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine title to which has passed to Lessee pursuant to this Agreement (and, for the avoidance of doubt, the term “ Engine ” excludes any engine installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Engine LLPs ” means each or any of the Engine Manufacturer’s certified cyclic life controlled parts as specified in the Engine Manufacturer’s “Time Limits Manual”.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, in respect of any Engine, the performance of a refurbishment of such Engine to clear it until its next anticipated Engine Performance Restoration (including, without limitation, the completion of a Level 3 Refurbishment on each of the high pressure turbine, the high pressure compressor and the combuster) in all cases in accordance with the maintenance procedures and soft times as defined in the EMMP (excluding any LRU’s on such Engine).
 
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“ Engine Warranties ” means, in respect of each Engine, the warranties in respect of those Engines specified in the Engine Warranties Agreement.
“ Engine Warranties Agreement ” means the engine warranties agreement entered into or to be entered into on or before the Delivery Date between the Engine Manufacturer, the Security Trustee, Lessor, the Guarantor and Lessee.
“ Event of Default ” means any of the events listed in Part 1 of Appendix 9.
“ Expiry Date ” means:
 
(a)	the Initial Expiry date or, if applicable, the Extended Expiry Date; or	
 
(b)	the date on which the leasing of the Aircraft to Lessee is terminated or expressed to expire under and in accordance with the provisions of this Agreement; or	
 
(c)	the date on which Lessor receives the Agreed Value following a Total Loss.	
“ Extended Expiry Date ” means the date, if any, to which the Term is extended pursuant to and in accordance with Clause 4.6.
“ FAA ” means the Federal Aviation Administration of the United States of America and any successor thereof.
“ Facility Agent ” means HSH Nordbank AG, New York Branch or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ Final Delivery Date ” means ***** or such later date as the parties may agree.
“ Financial Indebtedness ” means any indebtedness for or in respect of:
 
(a)	moneys borrowed;	
 
(b)	any amount raised by acceptance under any acceptance credit facility;	
 
(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;	
 
(d)	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with generally accepted accounting principles in Mexico or, if Lessee’s financial statements are prepared in accordance with generally accepted principles in the United States of America, the United States of America, be treated as a finance or capital lease;	
 
(e)	receivables sold or discounted as a means of raising money (other than any receivables to the extent they are sold on a non-recourse basis);	
 
(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;	
 
(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the market to market value shall be taken into account);	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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(h)	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and	
 
(i)	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.	
“ Fleet Aircraft ” means any other aircraft owned or operated by Lessee.
“ Flight Hour ” means in relation to the Aircraft, each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground and in relation to an Engine, a Landing Gear, an APU and a Part each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of an aircraft on which that Engine, the Landing Gear, the APU or the Part, as the case may be, is installed leaves the ground on take off until the wheels of that aircraft next touch the ground.
“ Government Entity ” means (a) any national government, political subdivision thereof, or local jurisdiction therein; or (b) any instrumentality, board, commission, court, tribunal or agency of any thereof, however constituted; or (c) any association, organisation, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Gross Negligence ” means an act or omission which is done deliberately with intent to cause loss or damage or recklessly and with knowledge, that damage, death, delay, injury or loss would possibly result.
“ Guarantee ” means the guarantee dated the date of this Agreement executed by the Guarantor in favour of Lessor in respect of Lessee’s obligations to Lessor under the Transaction Documents.
“ Guarantor ” means Controladora Vuela Compañía de Aviación, S.A. de C.V., a company organised and validly existing under the laws of Mexico.
“ Habitual Base ” means Mexico.
“ IDERA ” means an irrevocable deregistration and export request authority in the form set out in Annex 1 to the Convention.
“ Indemnitees ” means each of Lessor, the Lease Manager, the Security Trustee, the Facility Agent, the Arranger and the Lenders, including, any of their respective successors and permitted assigns, shareholders, Subsidiaries and Affiliates and their respective directors, officers, agents and employees.
“ Initial Expiry Date ” means the date falling seventy two (72) months after the Delivery Date.
“ Insurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ International Interest ” has the meaning given to it in the Convention.
“ International Registry ” has the meaning given to it in the Convention.
“ Landing Gear ” means the landing gear assembly of the Aircraft including any attaching Part.
 
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“ Landing Gear Overhaul ” means a full overhaul of the Landing Gear as required by the Maintenance Planning Document and in accordance with the manufacturer’s procedures.
“ LC Amount ” has the meaning given to it in Clause 5.1.
“ Lease Manager ” means Amentum Capital Limited, a company incorporated in Ireland.
“ Lenders ” means such financial institution(s) which from time to time participate in the financing of the Aircraft for Lessor and/or for whose benefit security over, or rights relating to, the Aircraft and/or this Agreement and/or the Insurances is granted by Lessor or at Lessor’s request.
“ Lessor Lien ” means:
 
(a)	any Assignment, any Mortgage and any security interest whatsoever from time to time created by or through Lessor in connection with the financing of the Aircraft; or	
 
(b)	any other security interest in respect of the Aircraft which results from acts of or claims against Lessor, the Lease Manager or their respective Affiliates or Subsidiaries not related to the transactions contemplated by or permitted under this Agreement; or	
 
(c)	liens in respect of the Aircraft for Lessor Taxes.	
“ Lessor Taxes ” means Taxes in respect of any Indemnitee:
 
(a)	imposed as a direct result of activities of that Indemnitee in the jurisdiction imposing the liability unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(b)	imposed on the net income, gross profits or gains of that Indemnitee by any Government Entity in the country of incorporation of the Indemnitee or any other jurisdiction where that Indemnitee has a place of business, in each case unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(c)	imposed with respect to any period commencing or event occurring after the Expiry Date and unrelated to the transactions contemplated by the Transaction Documents or the use or operation of the Aircraft or any part thereof by the Lessee; or	
 
(d)	imposed solely as a direct result of the Gross Negligence or wilful misconduct of that Indemnitee or breach by that Indemnitee of any of its express obligations to Lessee and/or Guarantor under any of the Transaction Documents, but excluding any such breach which is attributable to or arises out of any breach by Lessee of its obligations under this Agreement or any other Transaction Document or any Event of Default; or	
 
(e)	imposed solely as a direct result of a voluntary or involuntary sale, transfer, assignment, novation or other disposition by such Indemnitee of all or part of an interest in the Aircraft or any part thereof or this Agreement, save for the Assignment, the Mortgage and/or any such sale, transfer, assignment or disposition which has occurred directly or indirectly as a result of an Event of Default and/or any such sale, assignment, transfer or disposition which has occurred with the consent of Lessee pursuant to Clause 6.6, Clause 15 or Clause 19; or	
 
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(f)	to the extent that the same are imposed or arise solely as a result of a Lessor Lien attributable to that Indemnitee; or	
 
(g)	to the extent attributable to the failure of that Indemnitee to comply with Clause 6.8 of this Agreement;	
 
(h)	to the extent that the same arise as a result of any financing arrangements entered into by such Indemnitee in connection with this Agreement and are not related to the use, operation, leasing, maintenance, condition, design, defect, insurance or any other matters set forth in Clauses 11.1(a) to (c) inclusive of this Agreement; or	
 
(i)	to the extent that the same are increased solely by reason of Lessor voluntarily changing, after the date of this Agreement the jurisdiction in which it is resident for tax.	
“ Letter of Credit ” has the meaning given to it in Clause 5.1.
“ Level 3 Refurbishment ” has the meaning given to it in the latest revision of the Engine Manufacturer’s engine management programme.
“ LIBOR ” means, in respect of the applicable period for the calculation of default interest hereunder or in respect of any Rental Period for the calculation of Rent under Clause 5:
 
(a)	the applicable Screen Rate; or	
 
(b)	if no Screen Rate is available for Dollars for the applicable interest period or Rental Period, as the case may be, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Lessor at its request, quoted by the Reference Banks to leading banks in the London interbank market,	
for the offering of deposits in Dollars for the applicable interest period or Rental Period, as the case may be, as of 11.00 a.m. (London time) two (2) Business Days before the first day of such period.
“ Loan Agreement ” means the Loan Agreement dated on or about the date of this Agreement between Lessor, as borrower and HSH Nordbank AG, New York Branch as arranger, original lender, the agent and the security trustee.
“ Loss ” means any cost, expense, financial liability, damage or monetary loss of any kind.
“ LRU ” means a line replacement unit.
“ Maintenance Planning Document ” or “ MPD ” means the latest revision of the maintenance planning document issued by the Airframe Manufacturer in respect of the same type of aircraft as the Aircraft.
“ Maintenance Programme ” means the Lessee’s Air Authority approved maintenance programme for the Aircraft in accordance with the Maintenance Planning Document encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including but not limited to, servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, corrosion control, inspection and treatments.
 
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“ Maintenance Reserves ” has the meaning given to it in Part 2 of Appendix 5.
“ Major Checks ” means the 6 Year Check and the 12 Year Check.
“ Mandatory Service Bulletin ” means any service bulletin affecting the airworthiness or safety of the Aircraft which is issued by the Manufacturer and compliance with which is required within a defined period of time.
“ Manufacturer ” means in respect of the Airframe, the Airframe Manufacturer and in respect of the Engines, the Engine Manufacturer.
“ Mexico ” means the United Mexican States.
“ Minimum Liability Coverage ” means except in respect of war and allied perils risks liability coverage ***** or such higher amount carried by Lessee on its fleet policy and in respect of war and allied perils risks liability coverage *****.
“ Mortgage ” means any present or future aircraft mortgage, pledge or security agreement made by Lessor in favour of the Security Trustee in respect of the Aircraft.
“ Netting Letter ” means the netting letter to be entered into between Lessor, Lessee, the Guarantor and the Airframe Manufacturer on or prior to Delivery.
“ Original Purchase Agreement ” means the A320 Family Purchase Agreement dated 28 October 2005, entered into between the Guarantor and the Airframe Manufacturer with respect to amongst other things, the Aircraft and together with its appendices, amendment and letter agreements.
“ Other Agreement ” means the Lease Agreement dated 9 October 2008 currently between the Lessor and Lessee with respect to the Airbus A320-233 aircraft, with manufacturer’s serial number 3624 and any other lease agreement entered into or to be entered into between Lessor (or any Affiliate of Lessor) with Lessee (or any Affiliate of Lessee).
“ Part ” means whether or not installed on the Aircraft:
 
(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft at Delivery; and	
 
(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has passed to Lessor pursuant to this Agreement,	
but excludes any such items title to which has passed to Lessee pursuant to this Agreement (and for the avoidance of doubt the term “ Part ” excludes any part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Permanent Repairs ” means any and all repairs relating to the Aircraft which:
 
(a)	are, subject to (c) and (d) below, of a permanent nature;	
 
(b)	shall have been reviewed and completed in accordance with the latest revision of the Manufacturer’s published guidelines applicable at the time of repair and supported by documentation evidencing accomplishment in accordance with FAA	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
29

 	approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s Service Bulletin or the Airframe Manufacturer’s written approval (wherein a statement of no technical objection does not constitute the Manufacturer’s written approval and a statement of conformity to type certificate will be required)) or EASA or FAA STC (Supplemental Type Certificate) or otherwise approved by the FAA and/or EASA;	
 
(c)	shall be flush unless not reasonably or economically feasible;	
 
(d)	shall be approved for unlimited continued service, without time limitations for removal, repair or replacement and shall have no special or distinct repetitive inspection requirements, unless no such repair exists, in which case:	
 
 	(i)	Lessee shall provide to Lessor, at the time the repair is being carried out, written confirmation from the Manufacturer that no further repair is currently available or is reasonably capable of being developed within a reasonable period; and	
 
 	(ii)	notwithstanding the written confirmation, Lessee shall carry out the repair with the least number of repeat inspections or the greatest time between and with the least potential impact for future operators as is reasonably possible given Manufacturer’s guidelines.	
“ Permitted Lien ” means:
 
(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
(b)	any lien of a repairer, mechanic, carrier, hangarkeeper or other similar lien arising in the ordinary course of business or by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
 
(c)	any Lessor Lien,	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been provided by Lessee for the payment of the Taxes or obligations; and (ii) such proceedings, or the continued existence of the lien, do not give rise to any likelihood of the sale, forfeiture, detention or other loss of the Aircraft or any interest therein or of criminal liability or unindemnified civil liability on Lessor, the Security Trustee or any Lender.
“ Permitted Transferee ” means any person who (a) is not a competitor, or any Affiliate of a competitor, of Lessee; (b) is experienced in cross border leasing or owned or managed by a person who is so experienced; and (c) has a net worth of at least $3 million (or whose obligations under this Agreement are guaranteed by a person with at least such a net worth).
“ Process Agent Power of Attorney (Lessor) ” means a process agent power of attorney substantially in the form of Exhibit G or in such other form requested by Lessor.
“ Process Agent Power of Attorney (Guarantor) ” means a process agent power of attorney substantially in the form of Exhibit H or in such other form requested by Lessor.
“ Prohibited Jurisdiction ” means any jurisdiction which, at any relevant time, is subject to an embargo or sanction or prohibition order (or any similar order or directive) of:
 
(a)	the United Nations Security Council or the European Union;	
 
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(b)	the United States of America,	
any which is applicable to the Lessee or any Indemnitee or the ownership, leasing or financing of the Aircraft or the transactions contemplated by the Transaction Documents and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemptions which would be available and any operations to the extent that they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction.
“ Protocol ” means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November, 2001.
“ Purchase Agreement Assignment ” means the assignment of the Original Purchase Agreement entered into or to be entered into on or about the date of this Agreement between Lessor, Lessee and the Guarantor.
“ Purchase Price ” means $35,900,000.
“ Quiet Enjoyment Letter ” means a letter from the Security Trustee to Lessee in the form of Exhibit E.
“ Recognition of Rights Agreement ” means an agreement in form and substance satisfactory to the Lessor and the Security Trustee (acting reasonably) concerning recognition of rights between Lessee, Lessor, the Security Trustee and any other owners, financiers or lessors of engines of the same make and model as the Engines (or any other engines compatible therewith) operated by Lessee.
“ Redelivery Location ” has the meaning given to it in Part 1 of Appendix 8.
“ Reference Banks ” means the principal London branches of HSH Nordbank AG, Barclays Bank plc and JP Morgan Chase.
“ Reinsurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ Rent ” means each amount calculated pursuant to Clause 5.3.
“ Rental Period ” has the meaning given to it in Clause 5.2.
“ Rent Date ” means the first day of each Rental Period.
“ Replacement Part ” means, in relation to any Part to be replaced under this Agreement, a component, furnishing or part (other than a complete Engine) that has the same or interchangeable specifications and modification status, is in as good an operating condition as, and a value, utility and remaining life equal to or greater than, the Part to be replaced (assuming such replaced Part was in the condition and repair required by the terms of this Agreement) and which has not accumulated more than 110% of the accumulated calendar time, Flight Hours and Cycles of the Aircraft and in respect of which title is capable of passing to Lessor free and clear of all Security Interests other than Permitted Liens.
“ Return Condition ” has the meaning given to it in Part 1 of Appendix 8.
“ Screen Rate ” means the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Bloomberg screen. If the agreed page is replaced or service ceases to be available, Lessor may specify another page or service displaying the appropriate rate after consultation with Lessee.
 
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“ Security Interest ” means any mortgage, charge, pledge, lien, assignment, hypothecation, right of set-off, right of detention or any agreement or arrangement having the effect of creating a security interest other than a Permitted Lien.
“ Security Trustee ” means HSH Nordbank AG, New York Branch, or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ SENEAM ” means Servicios a la Navegación en el Espacio Aéreo Mexicano.
“ State of Incorporation ” means Mexico.
“ State of Registration ” means Mexico.
“ Subsidiary ” means:
 
(a)	in relation to any reference to accounts, any entity whose accounts are consolidated with the accounts of Lessee in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation;	
 
(b)	for any other purpose an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation,	
(and for this purpose “ Control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Suitable Replacement Engine ” means an engine:
 
(a)	which is of the same model, and capable of being certified at the same thrust rating, as the Engine it replaces, or an improved or advanced version of the Engine it replaces (the “ Replaced Engine ”), approved by the Air Authority for installation and operational use on the Airframe in conjunction with the other Engine;	
 
(b)	(unless otherwise agreed by Lessor, acting reasonably) which shall have undergone no more Engine Performance Restorations since new than the Engine it replaces; and	
 
(c)	which has a value and utility at least equal to the Replaced Engine assuming the Replaced Engine was in the condition and repair required by the terms of this Agreement.	
“ Taxes ” means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) any registration tax in respect of the Aircraft, any withholding taxes, any value added tax or any other tax in respect of added value and any franchise, transfer, sales, use, business, occupation, excise, fuel, carbon, personal property, real property, stamp or other tax imposed by any Government Entity together with any penalties, additions to tax, fines or interest thereon and tax, taxes and taxation shall be construed accordingly.
 
32

“ Term ” means the period commencing on the Delivery Date and ending on Expiry Date.
“ Termination Event ” has the meaning assigned to it in Clause 10.1(c).
“ Total Loss ” has the meaning assigned to it in Part 3 of Appendix 7.
“ Transaction Documents ” means this Agreement, the Purchase Agreement Assignment, the Airbus Delivery Documents, the Airbus Consent and Agreement, the Engine Warranties Agreement, the Airframe Warranty Agreement, the Certificate of Acceptance, the Assignment of Insurances, the Acknowledgement of Assignment of Lease, the Acknowledgement of Assignment of Guarantee, the Guarantee, the Deregistration Power of Attorney, the IDERA, the Process Agent Power of Attorney (Lessor), the Process Agent Power of Attorney (Guarantor), the Quiet Enjoyment Letter and any other document which is entered into in connection with any of those agreements and is designated as such by Lessor and Lessee.
“ Wet Lease ” means a lease agreement with respect to the Aircraft:
 
(a)	pursuant to which Lessee agrees to operate the Aircraft under its air operator’s certificate on behalf of a third party airline under terms where all payment, operational (including crew), maintenance, re-delivery and insurance obligations under this Agreement and for the Aircraft remain the responsibility of Lessee and Lessee remains fully liable to comply with all such obligations under or in connection with this Agreement;	
 
(b)	where there is no change in the Habitual Base or the State of Registration;	
 
(c)	pursuant to which it is specifically stated in such wet lease that such agreement is expressly subordinated to the terms of this Agreement, any Mortgage, any Assignment and the interests of Lessor, the Security Trustee and the Lenders in and to the Aircraft, this Agreement, any Mortgage and any Assignment (as the case may be);	
 
(d)	the term of which, when aggregated with (i) any renewals or extensions thereof and (ii) the term of any consecutive such lease agreements (if any and as applicable), does not exceed 6 months unless Lessee shall have procured the consent of Lessor and the Security Trustee (which consent shall not be unreasonably withheld or delayed); and	
 
(e)	pursuant to which the expiry date thereunder occurs on or before the Expiry Date and the termination of this Agreement for any reason whatsoever will automatically result in such wet lease terminating and Lessor or (if applicable) the Security Trustee shall be entitled to promptly repossess and de-register the Aircraft thereafter.	
“ 6 Year Check ” means a 6 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 6 years which shall include all system, zonal and structural tasks with an interval of 6 years or lower, all Flight Hour or Cycles driven tasks which are not due to be carried out at 6 years as a result of utilisation but which for planning and access reasons would be performed at this 6 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
“ 12 Year Check ” means a 12 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 12 years which shall include all system, zonal and structural tasks with an interval of 12 years or lower, all Flight Hour
 
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or Cycles driven tasks which are not due to be carried out at 12 years as a result of utilisation but which for planning and access reasons would be performed at this 12 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
 
34

APPENDIX 1
PART 2
CONSTRUCTION
 
(a)	In this Agreement, unless the contrary intention is stated, a reference to:	
 
 	(i)	each of “ Lessor ”, “ Lessee ”, “ Guarantor ” or any other person includes without prejudice to the provisions of this Agreement any successor in title to it and any permitted assignee or transferee;	
 
 	(ii)	words importing the plural shall include the singular and vice versa;	
 
 	(iii)	any document shall include that document as amended, novated or supplemented;	
 
 	(iv)	a law (1) includes any statute, decree, constitution, regulation, order, judgement or directive of any Government Entity; (2) includes any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (3) includes any judicial or administrative interpretation or application thereof and (4) is a reference to that provision as amended, substituted or re-enacted;	
 
 	(v)	a Clause, or a Recital or an Appendix or an Exhibit is a reference to a Clause, or recital of, or an appendix or an exhibit to, this Agreement;	
 
 	(vi)	an “ amendment ” includes a supplement, novation, restatement or re-enactment and “ amended ” will be construed accordingly;	
 
 	(vii)	an “ approval ” shall be construed as a reference to any approval, consent, authorisation, exemption, permit, licence, registration, filing or enrolment by or with any competent authority;	
 
 	(viii)	an “ authorisation ” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;	
 
 	(ix)	the words “ other ” and “ otherwise ” shall not be construed ejusdem generis with any foregoing words where a wider construction is possible and the words “ including ” and “ in particular ” shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any foregoing words; and	
 
 	(x)	“ indebtedness ” means indebtedness for or in respect of money borrowed or any other obligation for the payment or repayment of money.	
 
(b)	In this Agreement a reference to a period of “ months ” is a reference to a period beginning in one calendar month and ending in the relevant calendar month on the day numerically corresponding to the day of the calendar month in which the period started:	
provided that:
 
 	(i)	if the period started on the last Business Day in a calendar month or if there is no numerically corresponding day, the period shall end on the last Business Day in the relevant calendar month; and	
 
35

 	(ii)	if the numerically corresponding day is not a Business Day the period shall end on the preceding Business Day;	
(and “ month ” and “ monthly ” shall be construed accordingly).
 
(c)	In this Agreement references to the “ winding up ”, “ dissolution ”, “ examination ” or “ court protection ” of a company or corporation, or the appointment of a “ liquidator ”, “ receiver ”, “ examiner ” or “ administrator ” shall be construed so as to include any equivalent or analogous proceedings or officer under the law of the jurisdiction in which such company or corporation is incorporated or established or any jurisdiction in which such company or corporation carries on business, including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, examination, arrangement, adjustment, protection or relief of debtors.	
 
(d)	The headings in this Agreement are to be ignored in construing this Agreement.	
 
(e)	If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:	
 
 	(i)	the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or	
 
 	(ii)	the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Agreement.	
 
(f)	This Agreement may be executed in counterparts each of which will constitute one and the same document.	
 
(g)	This Agreement and the other Transaction Documents are the sole and entire agreement between Lessor and Lessee in relation to the sale and leasing of the Aircraft, and supersede all previous agreements in relation to that leasing.	
 
(h)	The terms of this Agreement may only be amended with the written consent of the parties hereto.	
 
(i)	The rights of Lessor under the Transaction Documents may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
 
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APPENDIX 2
DESCRIPTION OF AIRCRAFT

AIRCRAFT	  	 	  	 	
			
MANUFACTURER:	  	Airbus S.A.S.	  		
			
MODEL:	  	A319-133	  		
			
SERIAL NUMBER:	  	3705	  		
			
MTOW	  	75.5 tons	  		
			
ENGINES	  		  		
			
MANUFACTURER:	  	IAE International Aero Engines AG	  		
			
ENGINE TYPE:	  	V2527M-A5	  		
			
SERIAL NOS:	  	V13093	  		
			
	  	V13095	  		
 
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APPENDIX 3
PART 1
LESSEE’S REPRESENTATIONS AND WARRANTIES
 
1.      (a)	Each of Lessee and the Guarantor is a sociedad anõnima de capital variable (limited liability company) duly organised and validly existing under the laws of the State of Incorporation and has the power to own its assets and carry on its business as it is being conducted and is the holder of all necessary licences required in connection therewith.	
 
 	(b)	Each of Lessee and the Guarantor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated thereby and all other authorisations, consents, registrations and notifications required in connection with the entry into, performance, validity and enforceability of, the Transaction Documents to which it is a party and the transactions contemplated thereby, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect except for any authorisations, consents, registrations or notifications listed in paragraph 4 of Part 1 of Appendix 4;	
 
 	(c)	The Transaction Documents to which Lessee and/or the Guarantor is a party constitute each of Lessee’s and Guarantor’s legal, valid and binding obligations enforceable in accordance with the terms thereof, except as enforcement may be limited by bankruptcy, insolvency, reorganisation and other laws generally affecting the rights of creditors.	
 
 	(d)	The entry into, delivery and performance by each of Lessee and the Guarantor of, and the transactions contemplated by, the Transaction Documents do not and will not:	
 
 	(i)	conflict with any laws binding on Lessee or the Guarantor; or	
 
 	(ii)	conflict with the constitutional documents of Lessee or the Guarantor; or	
 
 	(iii)	conflict with or result in default under any document which is binding upon Lessee or the Guarantor or any of its assets.	
 
 	(e)	Each of Lessee and the Guarantor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party and neither Lessee, the Guarantor nor any of their respective assets is entitled to any right of immunity and the entry into, delivery and performance of the Transaction Documents constitute private and commercial acts.	
 
 	(f)      (i)	The consolidated financial statements of the Guarantor and the financial statements of Lessee most recently delivered to Lessor have been prepared in accordance with accounting principles and practices generally accepted and consistently applied in the State of Incorporation or in the United States of America and fairly represent the financial condition of Lessee and the Guarantor as at the date to which they were drawn up; and	
 
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 	(ii)	there has been no material adverse change in the financial condition of Lessee or the Guarantor since the date to which those accounts were drawn up and the financial and other information furnished by Lessee to Lessor in connection with the Transaction Documents does not contain any untrue statement or omit to state facts, the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter to Lessor and all forecasts and opinions contained therein were made on reasonable grounds after due and reasonable enquiry by Lessee or the Guarantor.	
 
 	(g)	No litigation, arbitration or administrative proceedings are pending or to Lessee’s knowledge threatened against Lessee or the Guarantor which, if adversely determined, could reasonably be expected to have a material adverse effect upon the financial condition of Lessee or the Guarantor or the ability of Lessee or the Guarantor to perform its obligations under the Transaction Documents to which it is a party.	
 
 	(h)	The obligations of each of Lessee and the Guarantor under the Transaction Documents to which it is a party rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee and the Guarantor, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract.	
 
 	(i)	No Default has occurred and is continuing or might result from the entry into or performance of the Transaction Documents and no other event has occurred and is continuing which constitutes (or with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or any combination of the foregoing, might constitute) a material default under any document which is binding on Lessee or the Guarantor or any of its assets.	
 
 	(j)	Save as specified in any qualification as to matters of law in any legal opinion furnished to Lessor pursuant to and in accordance with this Agreement, it is not necessary or advisable under the laws of the State of Registration, the Habitual Base or the State of Incorporation, in order to ensure the validity, effectiveness and enforceability of the Transaction Documents to which Lessee and/or the Guarantor is a party or any Security Interest expressed to be created thereunder or to, establish, perfect or protect the property rights of Lessor in the Aircraft that the Transaction Documents to which Lessee and/or Guarantor is a party or any other instrument relating thereto be filed, registered or recorded or that any other action be taken except for the filing of this Agreement and the Bill of Sale for registration with the Mexican Aeronautics Registry, or if any such filings, registrations, recordings or other actions are necessary or advisable, the same have been effected or will have been effected or will have been applied for on or before the Delivery Date and under all such laws the property rights of Lessor in the Aircraft have been fully established, perfected and protected.	
 
 	(k)	Neither Lessee nor the Guarantor is in default in the payment of any Taxes of a material amount which have been assessed and demanded of it other than Taxes which Lessee or the Guarantor is contesting in good faith by appropriate proceedings and in respect of which adequate reserves have been made and the non payment of which does not give rise to any material likelihood of the Aircraft being sold, arrested, detained or otherwise lost.	
 
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 	(l)	Neither Lessee nor the Guarantor has engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents and the transactions contemplated thereby.	
 
2.	The representations and warranties in Part 1 of this Appendix 3 will survive the execution of this Agreement and will be deemed to be repeated by Lessee on the Delivery Date and, with respect to those representations and warranties set out in (a) to (f)(i), (h), (j) and (m) above, on each Rent Date with reference to the facts and circumstances then existing.	
 
40

APPENDIX 3
PART 2
LESSOR’S REPRESENTATIONS AND WARRANTIES
 
1.      (a)	Lessor is a company duly incorporated and validly existing under the laws of Ireland and has the power to own its assets and carry on its business as it is now being conducted.	
 
 	(b)	Lessor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by thereby.	
 
 	(c)	The Transaction Documents to which Lessor is a party constitute Lessor’s legal, valid and binding obligations enforceable against Lessor in accordance with their terms except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganisation or other similar laws affecting creditors’ rights generally or by equitable principles.	
 
 	(d)	The entry into and performance by Lessor of, and the transactions contemplated by, the Transaction Documents to which it is a party do not and will not:	
 
 	(i)	conflict with any laws binding on Lessor; or	
 
 	(ii)	conflict with the constitutional documents of Lessor; or	
 
 	(iii)	conflict with or result in a default under any document which is binding upon Lessor or any of its assets.	
 
 	(e)	So far as concerns the obligations of Lessor, all authorisations, consents, registrations and notifications required under the laws of Ireland in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Transaction Documents by Lessor have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect.	
 
 	(f)	Lessor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party, and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of the Transaction Documents to which it is a party by Lessor constitute private and commercial acts.	
 
 	(g)	Lessor has not engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents or the transactions contemplated thereby.	
 
 	(h)	Lessor is a resident of Ireland for tax purposes.	
 
2.	The representations and warranties of Lessor in this Part 2 of Appendix 3 will survive the execution of this Agreement and will be deemed to be repeated at Delivery and (other than the representation and warranty at (h) above) on each Rent Date.	
 
41

APPENDIX 4
PART 1
LESSOR CONDITIONS PRECEDENT
 
1.1	Receipt by Lessor from Lessee not less than two (2) Business Days prior to Delivery Date of the following satisfactory in form and substance to Lessor (acting reasonably):	
 
 	(a)	a corporate certificate of each of Lessee and the Guarantor signed by an authorised officer of the Lessee or the Guarantor (as applicable) to which is attached complete and up to date copies of:	
 
 	(i)	the constitutional documents ( estatutos sociales ) of Lessee or the Guarantor (as applicable);	
 
 	(ii)	a resolution of the board of directors of Lessee or the Guarantor (as applicable) approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party, resolving that Lessee or the Guarantor (as applicable) enter into the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party;	
 
 	(iii)	any power of attorney of Lessee or the Guarantor (as applicable) approved at the meeting of the directors referred to at (ii) above; and	
 
 	(iv)	an incumbency certificate setting out the names and signatures of the persons specified by Lessee or the Guarantor (as applicable) in (ii) above;	
 
 	(b)	evidence that an opinion in such form as may be approved by Lessor and the Security Trustee and addressed to Lessor, the Security Trustee and the Lease Manager will be issued on the Delivery Date by:	
 
 	(i)	Lessee’s and Guarantor’s in house legal counsel in the State of Incorporation;	
 
 	(ii)	Ritch Mueller, Lessor’s and the Security Trustee’s legal counsel in the State of Registration;	
 
 	(iii)	the Airframe Manufacturer in respect of the Airframe Manufacturer and the Airbus Delivery Documents;	
 
 	(iv)	the Engine Manufacturer in respect of the Engine Manufacturer and the Engine Warranties Agreement if the Engine Manufacturer agrees to provide such an opinion, otherwise an incumbency certificate executed by the Engine Manufacturer;	
 
 	(v)	McCann FitzGerald, Lessor’s and the Security Trustee’s counsel in Ireland in relation to Lessor (such opinion to be obtained by Lessor at Lessor’s cost);	
 
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 	(vi)	Norton Rose, Munich, Lessor’s and the Security Trustee’s counsel in Germany, the cost of which opinion shall be borne equally by Lessor and Lessee, subject in the case of Lessee, to a cap of €2,000; and	
 
 	(vii)	Lessor’s insurance advisers in relation to the Insurances (such opinion to be obtained by Lessor at Lessor’s cost);	
 
 	(c)	evidence of the issue of each approval, licence and consent which may be required in relation to, or in connection with, the performance by each of Lessee and the Guarantor of any of its obligations under the Transaction Documents (including, without limitation, the remittance by Lessee or the Guarantor (as applicable) to Lessor in US Dollars of all amounts payable under the Transaction Documents);	
 
 	(d)	a temporary certificate of import (Pedimento de Importacion) for the Aircraft stamped by the relevant Government Entity in Mexico evidencing that any required import licence, and all customs formalities, relating to the import of the Aircraft into the State of Registration will be complied with no later than ten (10) Business Days following Delivery and that the import of the Aircraft into the State of Registration is exempt from Taxes;	
 
 	(e)	copies of Lessee’s concession title, air operator’s certificate and all other licences, certificates and permits required by Lessee or the Guarantor in relation to, or in connection with, the Transaction Documents to which it is a party and the sale, leasing and/or operation (as the case may be) of the Aircraft;	
 
 	(f)	the latest available consolidated financial statements of the Guarantor and the latest available financial statements of Lessee;	
 
 	(g)	two letters, in the form of Part 1 of Exhibit C and Part 2 of Exhibit C, from Lessee addressed to SENEAM and each other relevant air traffic control authority pursuant to which Lessee authorises the addressee to issue to Lessor, the Lease Manager and the Security Trustee, upon Lessor’s, the Lease Manager’s or the Security Trustee’s request (i) from time to time (subject always to Clause 7.5) in the case of the letter set out in Part 1 of Exhibit C and (ii) upon the occurrence of an Event of Default which is continuing in the case of the letter set out in Part 2 of Exhibit C, a statement of account of all sums due by Lessee to the authority in respect of all aircraft (including, without limitation, the Aircraft) operated by Lessee;	
 
 	(h)	the Deregistration Power of Attorney;	
 
 	(i)	the Process Agent Power of Attorney (Lessor) and the Process Agent Power of Attorney (Guarantor) and any other special power of attorney which Lessee or the Guarantor is required to execute and deliver pursuant to the terms of any other Transaction Document;	
 
 	(j)	all such documentation and information from Lessee and the Guarantor as requested by Lessor in respect of “ Know Your Customer ” checks, anti-money laundering checks and other similar requirements; and	
 
 	(k)	a letter from the process agent appointed by Lessee and Guarantor under each Transaction Document to accept service of process, accepting that appointment.	
 
43

1.2	Receipt by Lessor from Lessee on or prior to the Delivery Date (or in the case of any Letter of Credit at least five (5) days prior to the Delivery Date) of the following satisfactory in form and substance to Lessor:	
 
 	(a)	the Transaction Documents to which Lessee or the Guarantor is a party duly executed by Lessee or the Guarantor and the other parties thereto (other than Lessor), it being acknowledged by each of Lessee and Lessor that Lessor will use all reasonable endeavours, subject to satisfaction of the conditions precedent contained in the Loan Agreement to arrange for the Security Trustee to execute the Transaction Documents to which the Security Trustee is a party;	
 
 	(b)	a signed copy of each opinion referred to it at 1.1(b) above;	
 
 	(c)	all sums due to Lessor under the Transaction Documents on or before the Delivery Date including, without limitation, the Deposit and the first payment of Rent;	
 
 	(d)	certificates of insurance and reinsurance and an undertaking from Lessee’s insurance and reinsurance brokers evidencing compliance with the provisions of this Agreement as to Insurances and Reinsurances;	
 
 	(e)	the Certificate of Airworthiness for Export for the Aircraft issued by the German LBA the temporary Certificate of Airworthiness for the Aircraft issued by the Air Authority and the temporary Certificate of Registration for the Aircraft issued by the Air Authority;	
 
 	(f)	a copy of the Commitment Letter (save that any information in the Commitment Letter which relates to the amount of any concessions granted to Lessee which relate solely to Lessee’s operation of the Aircraft may be omitted from the copy of the Commitment Letter provided to Lessor);	
 
 	(g)	the Letter of Credit (if applicable);	
 
 	(h)	a search certificate from the International Registry showing:	
 
 	(i)	no International Interests recorded against the Airframe or either of the Engines;	
 
 	(ii)	the recordation of the Purchase Agreement Assignment; and	
 
 	(iii)	compliance by Lessee with the provisions at paragraph 4.4(b) of Appendix 6; and	
 
 	(i)	such other documents as Lessor may reasonably request.	
 
1.3	The Airframe Manufacturer shall have tendered and Lessor shall have accepted delivery of the Aircraft from the Airframe Manufacturer under the Purchase Agreement Assignment.	
 
1.4	Confirmation that Lessor is satisfied that no Taxes will be payable as a result of title transferring at the Delivery Location, such confirmation to be obtained by Lessor at its own cost.	
 
1.5	Evidence that filing of this Agreement and the Aircraft will be made on the Delivery Date with the Mexican Aeronautics Registry under the laws of the State	
 
44

 	of Registration and that all other filings, registrations, recordings and other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of the Transaction Documents, the Mortgage and the Assignment and any Security Interest expressed to be created thereunder and to protect the property rights of Lessor, and the Security Interests of the Security Trustee and the Lenders in the Aircraft or any Part.	
 
1.6	The representations and warranties of Lessee under Part 1 of Appendix 3 of this Agreement and the representations and warranties of the Guarantor in any Transaction Document to which it is a party are correct and would be correct if repeated at Delivery.	
 
1.7	Receipt by Lessor of written confirmation from the Security Trustee that the Transaction Documents to which Lessee and/or the Guarantor is a party are in form and substance satisfactory to the Lenders and accordingly the Aircraft shall be financed by such Lenders on terms and conditions satisfactory to Lessor and such confirmation being in full force and effect on the Delivery Date.	
 
1.8	Lessor having reviewed the Agreed Maintenance Programme under which it is proposed the Aircraft will be maintained. For the purposes of such review, Lessee shall prior to the Delivery Date provide Lessor with all necessary information and documents as Lessor may reasonably require with respect to the Agreed Maintenance Programme.	
 
2.	The conditions specified in this Part 1 of Appendix 4 are for the benefit of Lessor and may be waived or deferred in whole or in part and with or without conditions by Lessor.	
 
3.	If any original document or certified copy of any document specified in Part 1 of this Appendix 4 is provided to Lessor by facsimile copy or pdf copy on or prior to Delivery, Lessee shall provide the original of each such document to Lessor as soon as reasonably possible after Delivery but in any event no later than ten (10) Business Days after Delivery.	
 
4.	As soon as reasonably practicable after Delivery, but in any event not later than the relevant day specified in column two below, Lessee shall provide the following to Lessor:	

Conditions Subsequent	  	Time Period	
			
(a)	  	The stamped certificate referred to at paragraph 1.1(d) above	  	Ten (10) Business Days	
			
(b)	  	Permanent Certificate of Airworthiness issued by the Air Authority	  	Ten (10) Business Days	
			
(c)	  	Permanent Certificate of Registration issued by the Air Authority	  	One hundred and fifty (150) days	
			
(d)	  	Filing of the Bill of Sale with the Air Authority	  	Fifteen (15) Business Days	
			
(e)	  	Filing of this Agreement with the Air Authority	  	Ten (10) Business Days	
			
(f)	  	Inclusion of the Aircraft in Lessee’s Air Operator’s Certificate	  	Fifteen (15) days	
 
45

APPENDIX 4
PART 2
LESSEE CONDITIONS PRECEDENT
 
1.1	Receipt by Lessee from Lessor not less than two (2) Business Days prior to the Delivery Date of the following satisfactory in form and substance to Lessee:	
 
 	(a)	a copy of the constitutional documents of Lessor certified by an officer of Lessor to be true, complete and up to date;	
 
 	(b)	a copy of a resolution of the board of directors of Lessor approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessor is a party, resolving that Lessor enter into the Transaction Documents to which Lessor is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessor is a party.	
 
1.2	Receipt by Lessee from Lessor on or prior to the Delivery Date of:	
 
 	(a)	the Transaction Documents to which Lessor is a party (other than this Agreement) executed by Lessor;	
 
 	(b)	the Quiet Enjoyment Letter; and	
 
 	(c)	evidence that an opinion in such form as may be approved by Lessee (acting reasonably) and addressed to Lessee will be issued on the Delivery Date by McCann FitzGerald, Lessor’s counsel in Ireland, as to the due execution and enforceability of this Agreement.	
 
1.3	Evidence satisfactory to Lessee (acting reasonably) that upon the satisfaction or waiver by Lessor of each of the conditions precedent specified in Part 1 of this Appendix 4 that Lessor will accept delivery of the Aircraft under the Purchase Agreement Assignment.	
 
1.4	The representations and warranties of Lessor in Part 2 of Appendix 3 of this Agreement are correct and would be correct if repeated at Delivery.	
 
2.	The conditions precedent in this Part 2 of Appendix 4 are for the benefit of Lessee and may be waived or deferred in whole or in part and with or without conditions by Lessee.	
 
46

APPENDIX 5
PART 1
ADDITIONAL PAYMENT PROVISIONS
 
1.	Letter of Credit	
 
 	(a)	The Letter of Credit shall be issued and payable by a bank acceptable to Lessor (or, at Lessor’s request, to the Security Trustee) and in form and substance acceptable to Lessor and, if Lessor requests (in each case, acting reasonably), confirmed by the London or New York branch of a major international bank acceptable to Lessor (acting reasonably), as security for all payment obligations of Lessee to Lessor under the Transaction Documents (including damages), and shall remain in full force and effect and may be drawn down by Lessor upon demand at any time or times until the earlier of sixty (60) days after the Expiry Date and the date on which Lessee has redelivered the Aircraft to Lessor pursuant to and in accordance with this Agreement and complied with all its obligations under the Transaction Documents (the “ Required LC Expiry Date ”).	
 
 	(b)	With the prior written consent of Lessor and the Security Trustee (such consent not to be unreasonably withheld or delayed), the Letter of Credit may have a validity period or periods ending prior to the Required LC Expiry Date, provided that (i) the Letter of Credit shall, in each case, be renewed and delivered to Lessor not later than ten (10) Business Days prior to its expiry; and (ii) the Letter of Credit shall remain in force at all times up to the Required LC Expiry Date.	
 
 	(c)	If at any time during the Term, Lessor determines that the current issuing or confirming bank for the Letter of Credit is no longer an acceptable issuing or confirming bank (whether by virtue of a material adverse change in its financial condition or for any other reason) Lessee shall promptly procure that the Letter of Credit is replaced either by a Letter of Credit issued by another bank acceptable to Lessor (acting reasonably) and (if appropriate) that such replacement Letter of Credit is confirmed by another bank acceptable to Lessor or by an amount in cash equal to the Deposit (assuming no accrued interest), upon the terms and subject to the conditions of Clause 5 of this Agreement.	
 
2.	Payments	
All payments by Lessee to Lessor under the Transaction Documents will be made for value on the due dates in Dollars and in same day funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of international payments in Dollars by telegraphic transfer to such account as Lessor may advise Lessee in writing from time to time but no later than two (2) Business Days prior to the date on which any payment is due by Lessee under any Transaction Document.
 
3.	Value Added Tax	
Lessee will pay to Lessor or the applicable Tax authority the amount of any value added tax, any sales or turnover tax, imposition or levy of a like nature (together “ VAT ”) chargeable in respect of any supply for VAT purposes under any Transaction Document and each amount stated as payable by Lessee under any Transaction Document is exclusive of VAT (if any) and is accordingly to be construed as a reference to that amount plus any VAT in respect of it.
 
47

4.	Currency and Currency Indemnity:	
 
 	(a)	If Lessor receives an amount in respect of Lessee’s liability under any Transaction Document or if such liability is converted into a claim, proof, judgement or order in a currency other than the currency (the “ contractual currency ”) in which the amount is expressed to be payable under any Transaction Document:	
 
 	(i)	Lessee will indemnify Lessor as an independent obligation against any loss arising out of or as a result of such conversion;	
 
 	(ii)	if the amount received by Lessor, when converted into the contractual currency (at the market rate at which Lessor is able on the relevant date to purchase the contractual currency in London or at its option New York with that other currency) is less than the amount owed in the contractual currency, Lessee will, forthwith on demand, pay to Lessor an amount in the contractual currency equal to the deficit; and	
 
 	(iii)	Lessee will pay to Lessor on demand any exchange costs and Taxes actually incurred by Lessor in connection with the conversion.	
 
 	(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under any Transaction Document in a currency other than that in which it is expressed to be payable.	
 
5.	Certificates	
Save where expressly provided otherwise in the Transaction Documents, any certificate or determination made in accordance with the relevant provisions (if any) of the Transaction Documents by Lessor as to any rate of interest or as to any other amount payable under the Transaction Documents will, in the absence of manifest error, be conclusive and binding on Lessee.
 
6.	Information	
 
 	(a)	If Lessee is required by any applicable law, or by any third party, to deliver any report or return in connection with any Taxes relating to the Aircraft or the Transaction Documents, Lessee will complete the same within any applicable time period and in a manner satisfactory to Lessor and, if relevant, will state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee will, on request supply a copy of the report or return to Lessor; and	
 
 	(b)	Lessee will, on request but not more frequently than once annually unless a Default has occurred and is continuing, furnish to Lessor evidence satisfactory to Lessor, with respect to the Aircraft, that all Taxes and charges incurred by Lessee including without limitation all withholdings and payments due to SENEAM or any other relevant air traffic control or airport authorities, have been paid and discharged in accordance with the terms governing payment of such amounts.	
 
48

APPENDIX 5
PART 2
PAYMENT OF MAINTENANCE RESERVES
 
1.	Amount	
Lessee shall pay the following amounts (“ Maintenance Reserves ”) to Lessor (or to its order) by reference to each calendar month or part thereof following the Delivery Date during the Term on the tenth (10th) day following the end of that calendar month:
 
 	(a)	in respect of the Airframe:	
 
 	(i)	$11,111 per calendar month or part thereof (the “ Airframe 6 Year Maintenance Reserves ”); and	
 
 	(ii)	$7,500 per calendar month or part thereof (the “ Airframe 12 Year Maintenance Reserves ”);	
 
 	(b)	in respect of each Engine, $106 for each Flight Hour (or part thereof) operated by that Engine during any calendar month failing prior to the performance of the first Engine Performance Restoration (“ First Engine Maintenance Reserves ”);	
 
 	(c)	in respect of each Engine, $122 for each Flight Hour (or part thereof) operated during any calendar month falling on or after the performance of the first Engine Performance Restoration (the “ Second Engine Maintenance Reserves ”);	
 
 	(d)	in respect of the Engine LLPs within each Engine, $123 for each Cycle accomplished by that Engine during that calendar month (together “ Engine LLP Maintenance Reserves ”). The Engine LLP Maintenance Reserves are an aggregate amount of all LLP’s, assume a 10% stub life and will be divided and held in sub accounts for each LLP as per the Attachment 1 to Part 2 of this Appendix 5.	
 
 	(e)	in respect of the APU, $33 for each APU Hour (or part thereof) accomplished by the APU during that calendar month (“ APU Maintenance Reserves ”); and	
 
 	(f)	in respect of the Landing Gear, $2,750 per calendar month or part thereof (“ Landing Gear Maintenance Reserves ”).	
 
2.	Adjustment	
 
2.1	The amount of the Maintenance Reserves in paragraph 1 will be adjusted by the Lessor on 1 January of each year (or in the case of the Engine LLP Maintenance Reserves at such later date as the Engine Manufacturer releases its annual LLP prices should the new annual prices not be available on 1 January of the relevant year) after the date of this Agreement as follows:	
 
 	(a)	the amount of the Maintenance Reserves (other than the Engine LLP Maintenance Reserves) shall be increased for inflation by a fixed amount of three per cent (3%). The Engine LLP Maintenance Reserves shall be subject to increases in the relevant manufacturer’s catalogue price; and	
 
49

 	(b)	if there is any variation, based upon the information provided in the monthly status reports (supported, if requested by Lessor, by the flight logbook entries or aircraft systems readout) delivered pursuant to paragraph 2.2(c) of Appendix 6 for the preceding twelve month period (or such shorter period commencing on the Delivery Date and ending on the following 1 January) from (i) the assumed Flight Hour to Cycle ratio of 1:1.9 (the “ Assumed Ratio ”) or (ii) the assumed engine derate of ten per cent. (10%) (the “ Assumed Derate ”), the amount of the First Engine Maintenance Reserves and the Second Engine Maintenance Reserves shall be adjusted in accordance with the tables set out in attachment 2 to part 2 of this Appendix 5 and the Maintenance Reserves (other than the Engine LLP Maintenance Reserves) shall be adjusted in the light of (i) and (ii) above.	
 
2.2	The amount of the Maintenance Reserves in paragraph 1 may be adjusted at any time by an amount determined by Lessor, if (i) any major change is made to the Approved Maintenance Programme or the operating procedures relating to the Aircraft; (ii) there is, in the reasonable opinion of Lessor, any material change in the operating environment of Lessee in which the Aircraft is operated; or (iii) if the certified thrust of the Engines (judged at Delivery) is increased through modification, upgrades or otherwise.	
 
50

Attachment 1
Engine LLP Maintenance Reserves Sub Accounts

Item
 	  	P/N
 	  	Rate per FC in USD
 	
Stage 1 (fan) disk
 	  	5A1758
 	  	*****
 	
Stub shaft (LPC)
 	  	5A0896
 	  	*****
 	
Stage 1.5 to 2.5 disk (LPC)
 	  	5R0161
 	  	*****
 	
Stage 3 to 8 disk (HPC)	  	6A7706
 	  	*****
 	
Stage 9 to 12 disk (HPC)
 	  	6A6546
 	  	*****
 	
Rear Shaft (HPC)
 	  	6A7712
 	  	*****
 	
Rear rotating seal (HPC)
 	  	6A5869
 	  	*****
 	
Stage 1 HPT disk
 	  	2A5001
 	  	*****
 	
Stage 1 HPT inner seal
 	  	2A3424
 	  	*****
 	
Stage 1 HPT outer seal
 	  	2A3423
 	  	*****
 	
Stage 2 HPT seal
 	  	2A3596
 	  	*****
 	
Stage 2 HPT disk
 	  	2A4802
 	  	*****
 	
Stage 2 HPT plate
 	  	2A3437
 	  	*****
 	
Stage 3 LPT disk
 	  	3A2513
 	  	*****
 	
Stage 4 LPT disk
 	  	3A1984
 	  	*****
 	
Stage 5 LPT disk
 	  	3A2430
 	  	*****
 	
Stage 6 LPT disk
 	  	3A1986
 	  	*****
 	
Stage 7 LPT disk
 	  	3A2514
 	  	*****
 	
Stage 3 LPT seal
 	  	3A0963
 	  	*****
 	
Stage 4 LPT seal
 	  	3A2422
 	  	*****
 	
Stage 5 LPT seal
 	  	3A2423
 	  	*****
 	
Stage 6 LPT inner seal
 	  	3A0078
 	  	*****
 	
Stage 6 LPT seal
 	  	3A1988
 	  	*****
 	
Stage 7 LPT seal
 	  	3A2522
 	  	*****
 	
LPT shaft
 	  	5A1762
 	  	*****

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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Attachment 2
First Engine Maintenance Reserve and Second Engine Maintenance Reserve Adjustment for changes to Assumed Ratio

Actual Flight Hour to Cycle ratio	  	1.00:1
to
1.24:1	  	1.25:1
to
1.49:1	  	1.50:1
to
1.74:1	  	1.75:1
to
1.99:1	  	2.00:1
to
2.24:1	  	2.25:1
to
2.49:1	  	2.50:1
to
2.74:1	  	2.75:1
to
2.99:1	  	3.00:1 and
above	
First Engine Maintenance Reserve	  	150	  	131	  	116	  	106	  	99	  	94	  	90	  	87	  	85	
Second Engine Maintenance Reserve	  	166	  	147	  	132	  	122	  	115	  	110	  	106	  	103	  	101	
Engine Derate Adjustment Table

 	 	 	 	 	 	 	 	 	 	 	 	
Engine Derate %	  	0	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10
(Datum)
 	
Adjustment Factors	  	1.55	  	1.45	  	1.40	  	1.35	  	1.30	  	1.25	  	1.20	  	1.15	  	1.10	  	1.05	  	1	
In the event that the adjusted First Engine Maintenance Reserves or the Second Engine Maintenance Reserves payable as per the tables above are higher than the actual amount of such Maintenance Reserves already collected, Lessor shall invoice Lessee for such difference and Lessee shall pay the invoiced amount within thirty (30) days. If Lessee does not issue a monthly status report pursuant to paragraph 2.2(c) of Appendix 6, Lessor will assume a monthly derate equal to Lessee’s average derate for its fleet in respect of the immediately preceding twelve (12) month period (or such shorter period as Lessor may agree) for invoice purposes. If for three (3) consecutive months, no such monthly status report is issued by Lessee, then Lessor will assume a monthly derate of 0% for invoice purposes.
 
52

APPENDIX 5
PART 3
REFUND OF MAINTENANCE RESERVES
 
1.	Eligible Maintenance Events	
 
1.1	Lessor shall have no obligation to distribute the Maintenance Reserves accumulated pursuant to Part 2 of this Appendix 5 other than:	
 
 	(a)	in respect of the following events (each an “ Eligible Maintenance Event ”), each approved in advance by Lessor in accordance with paragraph 1.1(b) below:	
 
 	(i)	with respect to the Airframe 6 Year Maintenance Reserves, upon the accomplishment of a 6 Year Check relating to the Airframe in accordance with the MPD;	
 
 	(ii)	with respect to the Landing Gear Maintenance Reserves, upon the accomplishment of any Landing Gear Overhaul in accordance with the MPD;	
 
 	(iii)	with respect to the First Engine Maintenance Reserves, upon the accomplishment of the first Engine Performance Restoration on the relevant Engine;	
 
 	(iv)	with respect to the Second Engine Maintenance Reserves, upon the accomplishment of the second Engine Performance Restoration on the relevant Engine;	
 
 	(v)	with respect to the Engine LLP Maintenance Reserves for an LLP, upon the replacement of that LLP in accordance with the Engine Manufacturer limits; and	
 
 	(vi)	with respect to the APU Maintenance Reserves, upon accomplishment of the APU Performance Restoration.	
 
 	(b)	if Lessee has obtained written approval from Lessor (which shall not be unreasonably withheld or delayed) in respect of the workscope for the relevant Eligible Maintenance Event prior to the commencement of the relevant Eligible Maintenance Event.	
 
1.2	Subject to paragraph 2.4, any remaining balance of the Maintenance Reserves on the expiry of the Term (unless the Term terminated as a result of a Total Loss of the Aircraft and Lessor has received the Agreed Value) shall be retained by Lessor as its sole property.	
 
2.	Release of Maintenance Reserves	
 
2.1	Lessee will provide Lessor with:	
 
 	(a)	an invoice for each LLP which is replaced and for the cost of any second Engine Performance Restoration;	
 
 	(b)	an invoice signed by Lessee in an amount equal to the relevant Maintenance Reserves to be refunded to Lessee; and	
 
53

 	(c)	written confirmation from the relevant maintenance contractor that the relevant Eligible Maintenance Event has been completed and paid for in full,	
within sixty (60) days after the completion of such Eligible Maintenance Event and such other supporting documentation evidencing the performance of the relevant work as Lessor may reasonably request in writing within fifteen (15) Business Days of receiving an invoice at (b) above (a “ Confirmation ”).
 
2.2	Provided that no Default has occurred and is continuing, Lessor shall promptly (and in any event within fifteen (15) Business Days) following the receipt of a Confirmation make payment (such payment date, the “ Reserve Payment Date ”) in accordance with paragraph 2.3 below to Lessee, or upon receipt of written instructions from Lessee, to Lessee’s maintenance provider accomplishing the Eligible Maintenance Event.	
 
2.3	If during the Term:	
 
 	(a)	the Airframe undergoes a 6 Year Check, Lessor will on the relevant Reserve Payment Date pay the full amount, if any, of the Airframe 6 Year Maintenance Reserves held by Lessor as at the time of the completion of the 6 Year Check;	
 
 	(b)	an Engine undergoes its first Engine Performance Restoration, Lessor will on the relevant Reserve Payment Date pay the full amount of the First Engine Maintenance Reserves for that Engine held by Lessor at the time of completion of its first Engine Performance Restoration;	
 
 	(c)	the Landing Gear undergoes a Landing Gear Overhaul, Lessor will on the relevant Reserve Payment Date pay the full amount of the Landing Gear Maintenance Reserves held by Lessor at the time of completion of the Landing Gear Overhaul;	
 
 	(d)	an Engine undergoes its second or higher Engine Performance Restoration, Lessor will on the relevant Reserve Payment Date pay the lesser of the amount of the Second Engine Maintenance Reserves for that Engine held by Lessor at completion of its second or higher Engine Performance Restoration and the invoiced amount relating to such second or higher Engine Performance Restoration and should there be a shortfall between the amount of the Second Engine Maintenance Reserves held by Lessor for that Engine and the invoiced amount, such shortfall will be for the Lessee’s account;	
 
 	(e)	an APU undergoes an APU Performance Restoration, Lessor will on the relevant Reserve Payment Date pay the full amount of the APU Maintenance Reserves held by Lessor at completion of the APU Performance Restoration;	
 
 	(f)	an Engine LLP is replaced pursuant to and in accordance with this Agreement, Lessor will on the relevant Reserve Payment Date pay the lesser of the amount of the Engine LLP Maintenance Reserves held by Lessor for that LLP at the date of its replacement and the Engine Manufacturer’s catalogue price list for that LLP and should there be a shortfall between the Engine LLP Maintenance Reserves held by Lessor for that LLP and such price list, such shortfall will be for Lessee’s account.	
provided always that in no event shall payment be made in respect of:
 
54

 	(i)	components unless they are scheduled to be overhauled at that check and their lives are fully restored (and if this is not the case, a pro-rating payment adjustment will be made in respect of overhauls or replacements that are made before the relevant component scheduled life limit);	
 
 	(ii)	any maintenance resulting from design faults or damage covered by warranty or caused by accidental damage, (subject as provided below) foreign objects, faulty maintenance, abnormal wear and tear, operational mishandling or line related quick engine change (QEC) kit maintenance (unless such maintenance is carried out at a different facility to the relevant Airframe check) or LRU component maintenance;	
 
 	(iii)	any cost items which are the costs of removal, reinstallation, transportation or are exchange or similar costs or charges;	
 
 	(iv)	any cost which is in excess of the relevant manufacturer’s list price for the relevant parts or maintenance work (other than handling charges); or	
 
 	(v)	any maintenance, overhaul, renewal, replacement or repair which is reimbursable out of any insurance claim,	
(collectively, “ Excluded Maintenance Events ”). If any Engine suffers any foreign objects damage and as a result an Engine Performance Restoration is required to be carried out on that Engine, then Lessee shall provide Lessor with full details of the foreign object damage and if Lessor (acting reasonably) agrees that the performance of an Engine Performance Restoration on the Engine is advisable and will not impact adversely on the Engine or the future marketability of the Aircraft, then any such Engine Performance Restoration shall not be an Excluded Maintenance Event.
 
2.4	If the documentation in paragraphs 2.1(a), (b) and (c) above, as applicable, relating to the completion of an Eligible Maintenance Event has been received by Lessor on or before the expiry of the Term and Lessor requests other supporting documentation evidencing the performance of the relevant work or Lessee has notified Lessor prior to the expiry of the Term that an Eligible Maintenance Event has been completed and has not yet provided such documentation to Lessor, Lessee shall be entitled to receive payment in respect of such Eligible Maintenance Event at any time after the expiry of the Term.	
 
55

APPENDIX 6
LESSEE’S COVENANTS
 
1.	GENERAL COVENANTS	
 
1.1	Information	
Lessee will:
 
 	(a)	notify Lessor forthwith of the occurrence of any Event of Default under this Agreement and, upon the written request of Lessor, confirm to it that, save as specified in such confirmation or as previously notified no such Event of Default has occurred and is continuing hereunder; and	
 
 	(b)	furnish to Lessor:	
 
 	(i)	as soon as possible, but in any event not later than ninety (90) days after the last day of each financial quarter, the consolidated financial statements for the Guarantor and the financial statements for Lessee prepared by management for the financial quarter ending on such day;	
 
 	(ii)	as soon as available but not in any event later than one hundred and twenty (120) days after the last day of each financial year of Lessee, the audited consolidated balance sheet of the Guarantor as of such day and the audited balance sheet of Lessee as of such day and the audited consolidated profit and loss statement of the Guarantor and the audited profit and loss statement of Lessee, in each case, for the year ending on such day (in Spanish with an English language copy to be provided within forty five (45) days thereafter),	
unless in the case of (i) and (ii) above the same are available free of charge on Lessee’s or the Guarantor’s website notified in writing by Lessee to Lessor and provided further that if there is a successful initial public offering of the Guarantor’s shares on the New York Stock Exchange, then Lessee shall only provide the information at (i) above upon receipt of a request to do so from Lessor;
 
 	(iii)	at the same time as it is issued to the creditors generally of Lessee or the Guarantor, a copy of each notice or circular issued to Lessee’s or the Guarantor’s creditors generally; and	
 
 	(iv)	on request from time to time such other information regarding Lessee and/or the Guarantor as Lessor may reasonably request.	
 
1.2	General	
Lessee will:
 
 	(a)	not make any substantial change in the nature of the business (it being agreed that an extension of Lessee’s route network is not a change in the nature of its business for this purpose) in which it is engaged, will preserve its existence (other than in connection with a solvent reconstruction the terms of which have been approved by Lessor, such approval not to be unreasonably withheld), and will conduct its business in accordance with all applicable laws;	
 
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 	(b)	ensure that no change will occur in the Habitual Base or the State of Registration of the Aircraft without the prior written consent of Lessor;	
 
 	(c)	procure that no person lawfully claiming by or through Lessee or which is an Affiliate or Subsidiary of Lessee or in respect of whom Lessee may exercise control whether as a matter of law or contract or otherwise, will act in any manner inconsistent with its obligations under this Agreement and that all persons will comply with those obligations as if references to “ Lessee ” included a separate reference to those persons;	
 
 	(d)	ensure that its obligations under the Transaction Documents rank and will at all times rank at least pari passu with all its other present and future unsecured indebtedness (save for obligations which are mandatorily preferred by operation of law and not by contract); and	
 
 	(e)	Lessee agrees from time to time to do and perform such other and further acts and execute and deliver any and such other instruments as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor under, and to carry out and effect the intent and purposes of, the Transaction Documents.	
 
1.3	Authorisations	
Lessee shall:
 
 	(a)	obtain and maintain in full force and effect all authorisations for the time being required by the laws or regulations of the State of Registration and any other relevant jurisdiction to enable Lessee to perform its obligations under the Transaction Documents; and	
 
 	(b)	obtain and promptly renew from time to time, and will promptly, upon written request, deliver to Lessor copies of all and any authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation as may be necessary or in Lessee’s opinion (acting reasonably) desirable to ensure the validity, enforceability or priority of Lessee’s and the Guarantor’s liabilities and obligations, and (to the extent within Lessee’s power and control) Lessor’s and the Security Trustee’s rights, under the Transaction Documents.	
 
2.	OPERATIONAL COVENANTS	
 
2.1	Lawful and Safe Operation	
Lessee will:
 
 	(a)	not use the Aircraft or permit the Aircraft to be used:	
 
 	(i)	in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Air Authority or any applicable law; or	
 
 	(ii)	for any purpose for which the Aircraft is not designed or reasonably suitable; or	
 
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 	(iii)	in a manner not covered by Insurances required under this Agreement (except for Emergency Operations);	
 
 	(b)	ensure that the crew, mechanics and engineers employed in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licences and/or approvals required by the Air Authority and applicable law;	
 
 	(c)	procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorised by the Air Authority and applicable law;	
 
 	(d)	not use the Aircraft nor permit the Aircraft to be used for the carriage of:	
 
 	(i)	whole animals living or dead except in the cargo compartments according to the International Air Transport Association regulations, and except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal; or	
 
 	(ii)	acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assemblies or components, except as permitted for passenger aircraft under the “ Restriction of Goods ” schedule issued by International Air Transport Association from time to time and provided that all the requirements for packaging or otherwise contained therein are fulfilled; or	
 
 	(iii)	any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or	
 
 	(iv)	any illegal item or substance;	
 
 	(e)	not utilise the Aircraft nor permit the Aircraft to be utilised for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
 	(f)	except for Emergency Operations, not cause or permit the Aircraft to proceed to, or remain at, any location in a Prohibited Jurisdiction or which is for the time being the subject of a prohibition order (or any similar order or directive) by:	
 
 	(i)	any Government Entity of the State of Registration and/or the Habitual Base; or	
 
 	(ii)	any Government Entity of the country in which such location is situated; or	
 
 	(iii)	any Government Entity having jurisdiction over Lessee, Lessor, the Security Trustee, the Lenders or the Aircraft	
and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemption which would be available and any operations to the extent that
 
58

they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction;
 
 	(g)	obtain and maintain in full force all authorisations required for the use and operation of the Aircraft for the time being, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Transaction Documents.	
 
2.2	Information	
Lessee will:
 
 	(a)	subject to paragraph (c) below, keep Lessor informed as to current serial numbers of the Engines, the current serial number of the APU, any engine or auxiliary power unit installed on the Aircraft and the location of any Engine or the APU removed from the Aircraft and the reasons for it being removed;	
 
 	(b)	subject to paragraph (c) below, promptly furnish to Lessor all information Lessor from time to time reasonably requests regarding the Aircraft, any Engine, the APU or any Part, its use, location and condition including, without limitation, the hours available on the Aircraft, the APU, the Landing Gear and any Engine until the next scheduled check, inspection, overhaul or shop visit, as the case may be;	
 
 	(c)	within seven (7) days after the end of each calendar month during the Term, provide Lessor with a monthly utilisation report on the Aircraft and each Engine in the form specified in Exhibit F or such other form as may be required from time to time by Lessor (and the inclusion in such monthly report of the information referred to in paragraphs (a) and (b) above shall satisfy Lessee’s obligations under those paragraphs); and	
 
 	(d)	give Lessor not less than sixty (60) days written notice as to the time and location of all scheduled C Checks, Major Checks, any Engine Performance Restoration, any APU Performance Restoration and any Landing Gear Overhaul and prompt prior notice of any non-scheduled or unplanned Engine Performance Restoration, APU Performance Restoration and any Landing Gear Overhaul.	
 
2.3	Inspection:	
 
 	(a)	Lessor, Security Trustee, the Lease Manager and any person designated by Lessor, the Security Trustee or the Lease Manager (the “ Inspecting Parties ”) may at any time visit, inspect, examine and survey the Aircraft, any Engine, any Part or the Aircraft Documents and for such purpose may, subject to any applicable insurance requirements and Air Authority regulation, travel on the flight deck as observer;	
 
 	(b)	Lessee will pay to Lessor on demand all reasonable out-of-pocket expenses incurred by the Inspecting Parties in connection with any such visit, inspection or survey where there exists a Default in respect of Lessee’s maintenance covenants under this Appendix 6 or where the inspection is required following the occurrence of an Event of Default; and	
 
 	(c)	no Inspecting Party will have a duty or liability to make or assume liability arising out of, any such visit, inspection or survey and so long as no	
 
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 	Default has occurred and is continuing, no Inspecting Party will exercise such right more than once annually (unless a shop visit or check has occurred in which case any Inspecting Party may inspect the Aircraft and the Aircraft Documents after any such shop visit or check) other than at reasonable times and on reasonable notice and so as not to disrupt the normal commercial operations of Lessee.	
 
2.4	Records	
Lessee will:
 
 	(a)	procure that accurate, complete and current records of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation) are kept in accordance with the requirements of the Air Authority and the FAA; keep the records in such manner as the Air Authority and the FAA may from time to time require, and ensure that they comply with the recommendations of the manufacturers of the Aircraft, any Engine or any Part. The records will form part of the Aircraft Documents;	
 
 	(b)	procure access to a revision service in respect of, and will maintain with appropriate revisions in English, all Aircraft Documents, records, logs, and other materials required by applicable laws and best practice of major international air transport operators in respect of the Aircraft;	
 
 	(c)	at Delivery and redelivery and at each time that the Agreed Maintenance Programme is amended, maintain a cross reference list between all Maintenance Planning Document tasks and the tasks in the Agreed Maintenance Programme; and	
 
 	(d)	on request (but not more frequently than once a year) permit Lessor, the Lease Manager and any other person designated by Lessor to electronically scan the Aircraft Documents.	
 
3.	MAINTENANCE COVENANTS	
 
3.1	Maintenance and Repair	
Lessee will maintain and repair the Aircraft in the same manner as similar aircraft and engines operated by Lessee without in any way materially discriminating against the Aircraft and will in addition:
 
 	(a)	keep the Aircraft airworthy in all respects (except when undergoing maintenance repair, overhaul or modification pursuant to and in accordance with the provisions of this Agreement where a certificate of release to service will return the Aircraft to an airworthy condition) and in good repair and condition;	
 
 	(b)	not make any major change to the Agreed Maintenance Programme or the schedule of the Agreed Maintenance Programme unless:	
 
 	(i)	required by the Air Authority or the Manufacturer; or	
 
 	(ii)	consented to by Lessor, such consent not to be unreasonably withheld;	
 
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 	(c)	maintain the Aircraft in accordance with any requirements and recommendations of the Manufacturers and the Agreed Maintenance Programme through the Agreed Maintenance Performer and perform (at the respective intervals provided in the Agreed Maintenance Programme) all checks on a ***** (no sampling permitted);	
 
 	(d)	maintain the Aircraft and Aircraft Documents in accordance with EASA or FAA Federal Air Regulations Part 121 and the Air Authority (except to the extent of any conflict with the Air Authority requirements) and as otherwise required by this Agreement;	
 
 	(e)	comply with all mandatory inspection and modification requirements/recommendations, Airworthiness Directives, Mandatory Service Bulletins (which are either mandatory or in respect of which Lessee is complying for its other Fleet Aircraft) and similar mandatory requirements applicable to the Aircraft, any Engine or Part having a compliance date during the Term or within 180 days after the Expiry Date and which are required by the Air Authority, and/or the French DGAC and/or the FAA and/or, at Lessor’s cost, EASA (to the extent that any such EASA requirements are not covered by such FAA requirements);	
 
 	(f)	comply with all applicable laws and regulations of the Air Authority and other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed and which relate to the maintenance, condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;	
 
 	(g)	maintain in good standing a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Air Authority and will from time to time provide to Lessor a copy on request;	
 
 	(h)	maintain current certification as to maintenance issued by or on behalf of the Air Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request, such request to be given no more than once annually unless a Default has occurred and is continuing; and	
 
 	(i)	procure promptly the replacement of any Engine or Part which has become time, cycle or calendar expired, lost, stolen, seized, confiscated, destroyed, damaged beyond repair, unserviceable or permanently rendered unfit for use, with an engine or part complying with the conditions set out in paragraph 3.3(a) (subject to the terms of paragraph 3.3 (b) if applicable).	
 
3.2	Removal of Engines and Parts	
Lessee will ensure that no Engine or Part installed on the Aircraft is at any time removed from the Aircraft other than:
 
 	(a)	if replaced as expressly permitted by this Agreement; or	
 
 	(b)	if the removal is of an obsolete item and is in accordance with the Agreed Maintenance Programme; or	
 
 	(c)      (i)	during the course of maintaining, servicing, repairing, overhauling or testing that Engine or the Aircraft, as the case may be; or	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	(ii)	as part of a normal engine or part rotation programme; or	
 
 	(iii)	for the purpose of making such modifications to the Engine or the Aircraft, as the case may be, as are permitted under this Agreement;	
and then in each case only if it is reinstalled or replaced by a Suitable Replacement Engine or Replacement Part complying with paragraph 3.3(a) below (and subject to the terms of paragraph 3.3(b) where applicable) as soon as practicable and in any event no later than the Expiry Date in the case of a Replacement Part and no later than three (3) months prior to the Expiry Date in the case of a Suitable Replacement Engine. Without prejudice to the generality of the foregoing, Lessee may not replace an Engine with a Suitable Replacement Engine save in the case of a Total Loss of an Engine.
 
3.3	Installation of Engines and Parts	
 
 	(a)	Subject always to paragraph 3.2 above, Lessee may install an engine or part on the Aircraft if:	
 
 	(i)	in the case of an engine, it is a Suitable Replacement Engine;	
 
 	(ii)	in the case of a part, it is in a Replacement Part;	
 
 	(iii)	in each case, it has become and remains the property of Lessor free from Security Interests and on installation on the Aircraft will without further act be subject to the Mortgage and this Agreement; and	
 
 	(iv)	in each case, Lessee has such details as to its source, maintenance records and life remaining as are required by the Air Authority and Lessee has for each Replacement Part or Suitable Replacement Engine, such technical and maintenance records as would be included for the purposes of this Agreement in the Aircraft Documents in Part 3 of Appendix 8 for each such Suitable Replacement Engine or Replacement Part if each such Suitable Replacement Engine or Replacement Part was then redelivered to Lessor pursuant to and in accordance with Appendix 8 of this Agreement;	
 
 	(b)	Lessee will, if no Default has occurred which is continuing, be entitled to install any engine or part on the Aircraft by way of replacement notwithstanding paragraph 3.3(a) if:	
 
 	(i)	there is not available to Lessee at the time and in the place that that engine or part is required to be installed on the Aircraft, a replacement engine or, as the case may be, part complying with the requirements of paragraph 3.3(a);	
 
 	(ii)	it would result in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee to ground the Aircraft until an engine or part, as the case may be, complying with paragraph 3.3(a) becomes available for installation on the Aircraft; and	
 
 	(iii)	as soon as practicable after installation of the same on the Aircraft but, in any event, no later than the Expiry Date in the case of a	
 
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 	part and three (3) months prior to the Expiry Date in the case of an engine, Lessee removes any such engine or part and replaces it with the Engine or Part replaced by it or by a Suitable Replacement Engine (if expressly permitted by paragraph 3.2 of this Appendix 6) or a Replacement Part and otherwise complying with paragraph 3.3(a).	
 
3.4	Non-Installed Engines and Parts	
Lessee will:
 
 	(a)	ensure that any Engine or Part which is not installed on the Aircraft (or any other aircraft as permitted by this Agreement) is, except as expressly permitted by this Agreement, properly and safely stored, and kept free from Security Interests;	
 
 	(b)	notify Lessor whenever any Engine is removed from the Aircraft and, from time to time, on request procure that any person (other than an Agreed Maintenance Performer) to whom possession of an Engine is given executes, prior to receipt of possession, a Recognition of Rights Agreement (or the relevant agreement with such person contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 or pursuant to the relevant governing law of the relevant agreement; and	
 
 	(c)	(notwithstanding the foregoing provisions of this sub-paragraph), be permitted, if no Default has occurred and is continuing, to install any Engine (provided any such Engine continues to be maintained by the Agreed Maintenance Performer) or Part on an aircraft, or in the case of a Part, an engine:	
 
 	(i)	owned and operated by Lessee free from Security Interests; or	
 
 	(ii)	leased or hired to Lessee pursuant to a lease or conditional sale agreement on a long-term basis and on terms whereby Lessee has full operational control of that aircraft or engine; or	
 
 	(iii)	acquired by Lessee and/or financed or refinanced, and operated by Lessee, on terms that ownership of that aircraft or engine, as the case may be, pursuant to a lease or conditional sale agreement, or a Security Interest therein, is vested in or held by any other person;	
provided that in all cases Lessee gives Lessor reasonable prior written notice and in the case of (ii) and (iii):
 
 	(A)	the terms of any such lease, conditional sale agreement or Security Interest will not have the effect of prejudicing the interests of Lessor, the Security Trustee or the Lenders in that Engine or Part or the interests of Lessor, the Security Trustee and the Lenders in respect thereof under the Assignment and the Mortgage; and	
 
 	(B)	the lessor under such lease, the seller under such conditional sale agreement or the holder of such Security Interest, as the case may be, has, prior to installation,	
 
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 	entered into a Recognition of Rights Agreement (or the lease, conditional sale agreement or the relevant security interest contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 or pursuant to the relevant governing law of the relevant lease, conditional sale agreement or other security agreement.	
 
3.5	Equipment Changes:	
 
 	(a)	Lessee will not make any modification or addition to the Aircraft (each an “ Equipment Change ”), except for an Equipment Change which:	
 
 	(i)	is expressly permitted by this Agreement; or	
 
 	(ii)	has the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where the Equipment Change does not diminish or impair the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iii)	arises as a result of the requirements of the Air Authority, the Manufacturer, EASA or FAA which Equipment Change shall be for the account of Lessee; or	
 
 	(iv)	has a cost (including labour, overheads, engineering supplies, materials and third party costs) no greater than ***** (2008 US$) and which is performed pursuant to the original equipment manufacturer service bulletin;	
 
 	(b)	so long as no Event of Default has occurred and is continuing, Lessee may remove any Equipment Change provided such removal does not diminish or impair the value, utility, condition or airworthiness of the Aircraft; and	
 
 	(c)	Lessor may require Lessee to remove any Equipment Change and to restore the Aircraft to its condition as it was prior to that Equipment Change except to the extent such Equipment Change is required to comply with the Return Condition.	
 
3.6	Title on an Equipment Change:	
 
 	(a)	Title to all Engines and Parts installed on the Aircraft whether by way of replacement, as the result of an Equipment Change or otherwise (except those installed pursuant to paragraph 3.3(b)) will on installation, without further act, vest in Lessor subject to the Mortgage, this Agreement and the Assignment free and clear of all Security Interests. Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable laws. At any time when requested by Lessor, Lessee will provide evidence to Lessor’s satisfaction (including the provision, if required, to Lessor of one or more legal opinions, the cost of any English law opinion to be borne by Lessor) that title has so passed to Lessor.	
 
 	(b)	Any Engine or Part at any time removed from the Aircraft will remain the property of Lessor until a replacement has been made in accordance with this Agreement and until title in the Suitable Replacement Engine or	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	Replacement Part, as applicable, has passed, according to applicable laws, to Lessor subject to the Mortgage, the Assignment and this Agreement free of all Security Interests whereupon title to the replaced Engine or Part will pass to Lessee free and clear of Lessor Liens.	
 
3.7	Pooling of Parts	
So long as no Default has occurred and is continuing Lessee may lease, let or hire or charter or otherwise part with possession of a Part (on terms conferring no more than a contractual right against Lessee but not rights against the Part) pursuant to pooling arrangements to which Lessee is a party and which either:
 
 	(a)     (i)	are arrangements involving responsible, solvent scheduled commercial air carriers or aircraft operators or the manufacturers, servicers or suppliers of the Part; and	
 
 	(ii)	do not contemplate transfer of title to the pooled Part except where title to the relevant Replacement Part passes, in accordance with paragraph 3.3(a) above at the same time to Lessor; or	
 
 	(b)	are otherwise acceptable to Lessor in its sole discretion.	
 
3.8	Title to Engines	
Lessor agrees, for the benefit of Lessee and for the benefit of any mortgagee, indenture trustee, or other holder of a security interest in any engine (other than an Engine) owned by Lessee, any lessor of any engine (other than an Engine) leased to Lessee and any conditional vendor of any engine (other than an Engine) purchased by Lessee subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor, the Security Trustee or any Lender nor their successors or assigns will acquire or claim, as against Lessee or any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided however that such agreement of Lessor shall not be for the benefit of any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof unless it has expressly agreed substantially on the same terms as set out herein or otherwise on terms satisfactory to Lessor acting reasonably (which agreement may be contained in such lease, conditional sale or other security agreement, indenture or mortgage or in a Recognition of Rights Agreement) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on an airframe (other than the Airframe).
 
4.	PRESERVATION OF ASSET	
 
4.1	Sub-Leasing	
Lessee will not sub-lease or otherwise part with possession of the Aircraft, the Engines or any Part except that Lessee may, without the consent of Lessor or Security Trustee part with possession (a) with respect to the Aircraft, the Engines or any Part to the relevant manufacturers for testing or similar purposes or to an Agreed Maintenance Performer for service, repair, maintenance or overhaul work, or alterations, modifications or additions to the extent required or permitted by this Agreement, (b) with respect to an Engine or Part, as expressly permitted by
 
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this Agreement (c) with respect to the Aircraft pursuant to a Wet Lease. Lessee shall give Lessor written notice prior to entering into any Wet Lease, save where it is not operationally practicable to do so, in which case, Lessee shall give Lessor written notice of any such Wet Lease as soon as reasonably practicable after entering into any such Wet Lease.
 
4.2	Title	
Lessee will:
 
 	(a)	not do or knowingly permit to be done or omit or knowingly permit to be omitted to be done any act or thing which might reasonably be expected to jeopardise the rights of Lessor hereunder or as owner of the Aircraft or the rights of the Security Trustee as mortgagee of the Aircraft and as assignee under the Assignment or the validity, enforceability or priority of the Mortgage and the Assignment;	
 
 	(b)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor subject to the Mortgage;	
 
 	(c)	not at any time (i) represent or hold out Lessor, the Security Trustee, the Lease Manager or the Lenders as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee or (ii) pledge the credit of Lessor, the Lease Manager, the Security Trustee or the Lenders;	
 
 	(d)	ensure that there is always affixed, and not removed or in any way obscured, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a reasonably prominent position on the Aircraft and on each Engine stating:	
“This Aircraft/Engine is owned by Amentum Aircraft Leasing No. Four Limited is operated by Concesionaria Vuela Compañía de Aviación, S.A. de C.V., is subject to a mortgage in favour of the [Security Trustee] and may not be operated by any other person without the prior written consent of [the Security Trustee]”;
 
 	(e)	not create or permit to exist any Security Interest upon the Aircraft, any Engine or any Part;	
 
 	(f)	not do or permit to be done anything which may reasonably be expected to expose the Aircraft, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, damage or destruction and without prejudice to the foregoing, if any such penalty, forfeiture, impounding, detention or appropriation, damage or destruction occurs, give Lessor notice and use best endeavours to procure the immediate release of the Aircraft, any Engine or the Part, as the case may be;	
 
 	(g)	not abandon the Aircraft, any Engine or any Part;	
 
 	(h)	pay and discharge or cause to be paid and discharged when due and payable or make adequate provision by way of security or otherwise for all debts, damages, claims and liabilities which have given or may reasonably be expected to give rise to a Security Interest created by Lessee over or affecting the Aircraft, any Engine or any Part; and	
 
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 	(i)	not attempt, or hold itself out as having any power, to sell, lease or otherwise dispose of the Aircraft, any Engine or any Part.	
 
4.3	Protection	
Lessee will:
 
 	(a)	maintain the registration of the Aircraft with the Air Authority reflecting (so far as permitted by applicable law) the respective interests of Lessor, and at Lessor’s cost, the Security Trustee and the Lenders and not do or suffer to be done anything which might adversely affect that registration; and	
 
 	(b)	do all acts and things (including, without limitation, making any filing or registration with the Air Authority or any other Government Entity) and execute and deliver all documents (including, without limitation, any amendment to this Agreement) as may be required by Lessor:	
 
 	(i)	at Lessor’s expense, following any change or proposed change in the ownership or financing of the Aircraft or in the manner of securing Lessor’s obligations to the Security Trustee and Lenders and/or Lessee’s obligations to Lessor provided that any transfer complies with the provisions of Appendix 10 or are otherwise agreed to by Lessee; or	
 
 	(ii)	following any modification of the Aircraft, any Engine or any Part or the permanent replacement of any Engine or Part in accordance with this Agreement, so as to ensure that the rights of Lessor under this Agreement and the rights of the Security Trustee and the Lenders under the Mortgage and the Assignment in respect thereof apply with the same effect as before; or	
 
 	(iii)	to establish, maintain, preserve, perfect and protect the respective rights of Lessor under this Agreement and as owner of the Aircraft and, at Lessor’s cost and expense, the Security Trustee and the Lenders in the Mortgage and the Assignment.	
 
4.4	Cape Town Convention	
 
 	(a)	In this Agreement, the Convention and the Protocol shall be read and interpreted together as a single instrument as required by Article 6(1) of the Convention. In this paragraph 4.4 the following expressions have the respective meanings given to them in Article 1 of the Consolidated Text:	
aircraft engines
aircraft object
assignment
associated rights
contract of sale
creditor
international interest
 
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leasing agreement
registry authority
security agreement
State of registry
 
 	(b)	Lessor and Lessee agree that:	
 
 	(i)	without prejudice to paragraphs 4.1, 4.2 and 4.3 of this Appendix 6, the Aircraft shall be registered on the aircraft register of the State of Registration, which is the State of registry for the purposes of the Convention;	
 
 	(ii)	the Airframe is an airframe and, accordingly, is an aircraft object to which this Agreement relates for the purposes of the Convention and is an A319-100 aircraft with manufacturer’s serial number 3705 and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and are V2527M-A5 engines with manufacturer’s serial numbers V13093 and V13095;	
 
 	(iii)	the international interest of Lessor, as a creditor, in the Airframe and each of the Engines, being the lessor under a leasing agreement of an aircraft object, shall be registered, with the consent of each of Lessor and Lessee, as an international interest under the Convention in each of the Airframe and the Engines, and such registration may be amended or extended prior to its expiry by either Lessor or Lessee, with the consent in writing of the other, such consent not to be unreasonably withheld or delayed;	
 
 	(iv)	the events which are referred to in Part 1 of Appendix 9 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 12 to 15 and 20 of the Consolidated Text;	
 
 	(v)	Lessor shall have the remedies referred to in Articles 15(1) and 20(1) of the Consolidated Text;	
 
 	(vi)	Lessor has power to dispose of the Airframe and the Engines for the purpose of Article 10(b) of the Consolidated Text subject to and in accordance with the Transaction Documents;	
 
 	(vii)	Lessee shall, on or prior to Delivery, execute and deliver to Lessor an IDERA in favour of the Lessor in the form annexed as an Annex to the Protocol;	
 
 	(viii)	Lessor may assign the associated rights (as defined in Article 1 of the Consolidated Text) under the Assignment or any other assignment permitted in accordance with Appendix 10, which associated rights consist of all rights to payment or other performance by Lessee (as debtor) under this Agreement and are associated with the Airframe and the Engines being aircraft objects for the purposes of the Convention. Any such assignment shall be made in accordance with and subject to the conditions specified in Appendix 10 and shall transfer to the relevant assignee the related international interests of Lessor; and	
 
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 	(ix)	Lessee shall cooperate with Lessor, at Lessee’s expense, with respect to effecting registration pursuant to the Convention of the international interests of any Lender or the Security Trustee as creditor in respect of the security agreement and the assignment constituted by any Mortgage and any Assignment and of any associated agreement related to the ranking of priority between the various international interests and/or the interests of Lessee;	
 
 	(c)	If any of the Engines is replaced by a Suitable Replacement Engine pursuant to and in accordance with this Agreement, Lessor and Lessee shall, at Lessee’s expense and on or prior to title to the Suitable Replacement Engine being vested in Lessor, take such steps as shall be available to them under the terms of the Convention and as are necessary:	
 
 	(i)	to constitute in favour of Lessor as a creditor (being the lessor under a leasing agreement of an aircraft object) an international interest in the Suitable Replacement Engine, including, for this purpose, entering into a supplement to this Agreement in such form as Lessor shall reasonably require providing that the Suitable Replacement Engine (which shall be identified in such supplement in the same manner as is provided in paragraph 4.4(b)(ii)above) shall be leased by Lessor to Lessee with effect from title to the same vesting in Lessor under the contract of sale referred to in paragraph 4.4(c)(iii) below and that the Suitable Replacement Engine shall be an Engine for the purposes of this Agreement;	
 
 	(ii)	to register such international interest in accordance with Chapter V of the Consolidated Text;	
 
 	(iii)	to enter into a contract of sale with respect to the Suitable Replacement Engine which complies with the formalities of Article 11 of the Consolidated Text;	
 
 	(iv)	to register the contract of sale with respect to the Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text;	
 
 	(v)	if required by any person who has acquired title to the Replaced Engine from Lessor, to enter into a contract of sale with respect to the Replaced Engine which complies with the formalities of Article 11 of the Consolidated Text and consent to the registration of such contract of sale in accordance with Chapter V of the Consolidated Text; and	
 
 	(vi)	to subject the relevant Suitable Replacement Engine to the security constituted by any Mortgage, and to register the international interest of the Security Trustee under any Mortgage in respect of such Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text.	
 
 	(d)	Without prejudice to any of the foregoing provisions of this paragraph 4.4, Lessee shall do or cause to be done (in conjunction with Lessor where necessary) any and all acts which may be required or desirable in connection with the terms of the Convention, to the extent permitted by the law of the State of Registration, to register, perfect, preserve and/or enhance any international interests of Lessor and/or the Security Trustee with respect to aircraft objects to which the Transaction Documents to which Lessee is a party relate.	
 
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4.5     (a)	If the State of Registration has ratified the terms of the Geneva Convention, do all acts and things in the State of Registration which Lessor may reasonably require to preserve the title, rights and interest of Lessor, and, at Lessor’s cost, the Security Trustee, to and in the Aircraft within the jurisdiction of any state which is a party to the Geneva Convention.	
 
 	(b)	In the event of any other enactments or provisions being made or becoming operative relating to recognition of rights in aircraft and which may apply to the Aircraft, promptly do and join with Lessor and, if appropriate, the Security Trustee and the Lenders in doing all such acts or things as may be necessary or reasonably desirable to perfect recognition of the title, rights and interest of Lessor, the Security Trustee and the Lenders in respect of the Aircraft.	
 
4.6	Lessor’s Financing	
Lessee acknowledges that Lessor may at any time during the Term grant new or further Security Interests over the Aircraft and the benefit of the Transaction Documents to the Lenders and the Security Trustee or any new or replacement lenders or security trustee as security for Lessor’s obligations to the Lenders or such new or replacement lenders. Lessee undertakes to provide all reasonable assistance and co-operation to Lessor, any Lenders and any Security Trustee and their respective representatives and advisers (at Lessor’s cost) in connection with the perfection and maintenance of such Security Interests, including (without limitation) the effecting of all necessary filings and registrations in the State of Registration and the Habitual Base and with the International Registry and Lessor agrees to take all reasonable steps available to it to ensure that such assistance and co-operation will not interfere with Lessee’s commercial operations provided that any security interests or assignment in favour of new or replacement lenders shall comply with the provisions of Appendix 10. To the extent that Lessor is aware of the identity of any new or replacement Lenders, Lessor shall (subject always to any duty of confidentiality) give Lessee the names of any such Lenders.
 
4.7	Costs	
Unless otherwise specified in the Transaction Documents, all costs associated with compliance by Lessee with its obligations under the Transaction Documents shall be for the account of Lessee.
 
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APPENDIX 7
PART 1
INSURANCE COVENANTS
 
1.	Lessee will maintain or cause to be maintained in full force during the Term, and thereafter as expressly provided by this Agreement, insurances in respect of the Aircraft (the “ Insurances ” which expression includes, where the context so admits, any relevant reinsurance(s)). The Insurances will be effected and maintained on a non-discriminatory basis compared with similar aircraft in Lessee’s fleet. The Insurances will be effected either:	
 
 	(a)	on a direct basis with insurers of recognised standing who normally participate in aviation insurances in the leading international insurance markets and led by internationally recognised and reputable underwriter(s); or	
 
 	(b)	with a single internationally recognised and reputable insurer or group of internationally recognised and reputable insurers who does or do not retain the risk but effects ***** reinsurance of all risks insured with reinsurers in the leading international insurance markets and through brokers each of internationally recognised standing in the international aviation insurance markets (the “ Reinsurances ”).	
 
2.	Lessor’s current requirements as to required Insurances are as specified in Part 2 of this Appendix 7. Lessor or the Security Trustee may from time to time upon reasonable consultation with Lessee and its insurance advisers stipulate other requirements (other than as to the level of the deductible or the Agreed Value) for the Insurances so that the scope and level of cover is maintained in line with the prudent practice of reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft and the interests of Lessor, the Security Trustee and the Lenders are protected in accordance with such practices.	
 
3.	If at any time Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change in circumstances may occur or has occurred which in the reasonable opinion of such brokers may materially affect or has materially affected the rights of Lessor and other Indemnitees in and to the Insurances, then Lessor, the Security Trustee and their brokers will consult with Lessee and Lessee’s brokers regarding what action is required to protect the interests of the parties insured. If, following the consultation, Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change should be made (other than as to the level of the deductible or the Agreed Value) having regard to the level and type of Insurances, and the terms and conditions thereof, then maintained by reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft, Lessee will then arrange or procure the arrangement of alternative cover satisfactory to Lessor’s and the Security Trustee’s insurance brokers (acting reasonably).	
 
4.	Lessee will:	
 
 	(a)	ensure that all legal requirements as to insurance of the Aircraft, any Engine or any Part which may from time to time be imposed by the laws of the State of Registration, the Habitual Base or any state to, from or over which the Aircraft may be flown, in so far as they affect or concern the operation of the Aircraft, are complied with to ensure that (i) the Aircraft is not in danger of detention or forfeiture, (ii) the Insurances remain valid	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	and in full force and effect, and (iii) the interests of the Indemnitees in the Insurances and the Aircraft, the Engines or any Part are not thereby prejudiced;	
 
 	(b)	not use, cause or permit the Aircraft, any Engine or any Part to be used for any purpose or in any manner not covered by the Insurances or outside any geographical limit imposed by the Insurances;	
 
 	(c)	comply with the terms and conditions of each policy of the Insurances and not do, consent or agree to any act or omission which invalidates or might reasonably be expected to invalidate the Insurances, or renders or might reasonably be expected to render void or voidable the whole or any part of any of the Insurances; or brings any particular liability within the scope of an exclusion or exception to the Insurances;	
 
 	(d)	not take out without the prior written approval of Lessor any insurance or reinsurance in respect of the Aircraft other than those required under this Agreement which would prejudice the rights or interest of Lessor or any of the other Indemnitees under or in respect of the Insurances and in no event maintain hull insurance in an amount in excess of ***** of the Agreed Value from time to time, unless relating solely to business interruption, profit commission and deductible risk;	
 
 	(e)	commence renewal procedures on a timely basis prior to expiry of any of the Insurances and provide to Lessor:	
 
 	(i)	if requested by Lessor, a written status report of renewal negotiations fourteen (14) days prior to each expiry date;	
 
 	(ii)	faxed confirmation of completion of renewal prior to each expiry date; and	
 
 	(iii)	certificates of insurance (and where appropriate certificates of reinsurance), and broker’s (and any reinsurance brokers’) letter of undertaking in a form acceptable to Lessor and the Security Trustee (each acting reasonably) in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within 7 days after each renewal date;	
 
 	(f)	on request, provide to Lessor copies of such other documents as Lessor may reasonably request evidencing the Insurances provided that nothing in this paragraph (f) shall require Lessee to give to Lessor a copy of Lessee’s fleet policy;	
 
 	(g)	on request but no more frequently than once a year, unless a Default has occurred and is continuing, provide to Lessor evidence that the Insurance premiums have been paid;	
 
 	(h)	not make or accept any modification or alteration to the Insurances material and adverse to the interests of any of the Indemnitees;	
 
 	(i)	be responsible for any deductible under the Insurances;	
 
 	(j)	provide any other insurance and reinsurance related information, or assistance, in respect of the Insurances as Lessor may reasonably request but no more frequently than once a year, unless a Default has occurred and is continuing; and	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	(k)	promptly notify Lessor of:	
 
 	(i)	any loss, theft, damage or destruction to the Aircraft, any Engine or any Part, or any modification to the Aircraft if the potential cost may exceed *****; and	
 
 	(ii)	any claim or other occurrence likely to give rise to a claim under the Insurances in excess of ***** and reasonably sufficient details of any negotiations with the insurance brokers over any such claim.	
 
 	(l)	ensure or procure that insurance cover is maintained in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe; and	
 
 	(m)	maintain separate insurance cover in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe.	
 
5.	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound, (without prejudice to any other rights of Lessor under this Agreement):	
 
 	(a)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an “ owner’s interest ” policy) as it considers appropriate. Any sums so expended by it will become immediately due and payable by Lessee to Lessor together with interest thereon at the rate specified in Clause 5.5, from the date of expenditure by the relevant Indemnitee up to the date of reimbursement by Lessee; and	
 
 	(b)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
 
6.	Lessee shall effect and maintain liability insurance after the Expiry Date with respect to its liability under the indemnities in Clause 11 for such period as Lessor may reasonably require (but in any event not more than two (2) years or until completion of the next scheduled Major Check, whichever is earlier) which provides for each Indemnitee to be named as additional insured. Lessee’s obligation in this paragraph shall not be affected by Lessee ceasing to be lessee of the Aircraft and/or any of the Indemnitees ceasing to have any interest in respect of the Aircraft.	
 
7.	Application of Insurance Proceeds	
 
 	(a)	All hull insurance payments up to and including the Agreed Value received as the result of a Total Loss occurring during the Term will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and Lessor will pay or procure the payment of the balance of those amounts to Lessee after deduction of all amounts which may be or become payable by Lessee to Lessor under this Agreement.	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	(b)	All insurance proceeds of any property damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of US$750,000 will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied (acting reasonably) that the repairs or replacement have been or are to be effected in accordance with this Agreement and any balance remaining (after deducting therefrom any amount of such insurance proceeds paid by the insurers in respect of a claim by Lessee for compensation for its loss of use of the Aircraft) may be retained by the Security Trustee or Lessor, as the case may be. Insurance proceeds in amounts below US$750,000 may be paid by the insurer directly to Lessee.	
 
 	(c)	All insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to the Security Trustee or as directed by the Security Trustee, to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made.	
 
 	(d)	Notwithstanding paragraphs 7(a), (b) or (c), if at the time of the payment of any such insurance proceeds an Event of Default has occurred and is continuing, all such proceeds will be paid to or retained by the Security Trustee (or if requested by the Security Trustee, to Lessor) to be applied toward payment of any amounts which may be or become payable by Lessee during any period when such Event of Default is continuing in such order as Lessor sees fit or as Lessor may elect.	
 
 	(e)	To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions of this paragraph 7 and apply or pay over such proceeds as so required.	
 
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APPENDIX 7
PART 2
INSURANCE REQUIREMENTS
The Insurances required to be maintained are as follows:
 
 	(a)	HULL ALL RISKS of Loss or Damage whilst flying and on the ground with respect to the Aircraft on an “ agreed value basis ” for an amount not less than the Agreed Value, and not greater than 110% of the Agreed Value from time to time, and with a deductible (other than in respect of a Total Loss) not exceeding US$750,000 or such other amount agreed by Lessor from time to time;	
 
 	(b)	HULL WAR AND ALLIED PERILS, covering such risks excluded from the Hull All Risks Policy to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft and at least as extensive as AVB48B (or its equivalent in respect of liabilities, other than paragraph (b)) and LSW 555D (or its equivalent in respect of Hull) from the leading international insurance markets including confiscation and requisition by the State of Registration for an amount not less than the Agreed Value and not greater than 110% of the Agreed Value from time to time;	
 
 	(c)	SPARES ALL RISKS (INCLUDING WAR AND ALLIED PERILS) property insurance on all Engines and Parts when not installed on the Aircraft on an “ agreed value ” basis for their full replacement value and including engine test and running risks;	
 
 	(d)	AVIATION THIRD PARTY LEGAL LIABILITY to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft from leading international insurance markets including but not limited to aircraft third party, passenger, baggage, cargo, mail and general third party legal liability for a Combined Single Limit of an amount not less than the Minimum Liability Coverage or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for the time being any one occurrence but in respect of products and completed operations this limit may be an aggregate limit for any and all losses occurring during the currency of the policy and further limited to $25,000,000 (or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft) any one occurrence and in the aggregate in respect of personal injury coverage. War and Allied Risks are also to be covered under Extended Coverage Endorsement AVN52E (or its equivalent) for an amount not less than $600,000,000 (six hundred million dollars) or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for any one occurrence and in the annual aggregate. Any aggregation of limits will be subject to limits being restored following any claims which have been paid;	
 
 	(e)	all required hull, hull war and spares insurance (as specified in (a), (b) and (c)), so far as it relates to the Aircraft will:	
 
 	(i)	name the Security Trustee as loss payee (in an amount up to and including the Agreed Value) in respect of a Total Loss and name Lessor, the Lease Manager, the Security Trustee and the Lenders as additional assureds for their respective rights and interests;	
 
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 	(ii)	provide that any loss (other than a Total Loss, the proceeds of which in an amount up to and including the Agreed Value will be payable to the Security Trustee) will be settled with Lessee, subject to final prior approval of the Security Trustee and Lessor and will be payable in Dollars to the Security Trustee in an amount up to the Agreed Value for the account of all interests except where the loss does not exceed *****, and neither Lessor nor the Security Trustee has notified the insurers to the contrary, in which case the loss will be settled with and paid to Lessee;	
 
 	(iii)	if separate Hull “ all risks ” and “ war risks ” insurances are arranged, include a 50/50 provision in accordance with market practice;	
 
 	(f)	all required liability insurances (as specified in (d) above) will:	
 
 	(i)	include each of the Indemnitees as additional assureds for their respective rights and interests, warranted, each as to itself only, no operational interest;	
 
 	(ii)	include a Severability of Interest Clause which provides that the insurance, except for the limit of liability, will operate to give each assured the same protection as if there was a separate policy issued to each assured;	
 
 	(iii)	contain a provision confirming that the policy is primary without right of contribution from any other insurance which may be available to the additional assureds;	
 
 	(g)	all Insurances will:	
 
 	(i)	provide cover denominated in Dollars and, in relation to liability insurance, in the currency of the claim;	
 
 	(ii)	operate on a worldwide basis subject to such limitations and exclusions as Lessor may agree;	
 
 	(iii)	acknowledge the insurer is aware that the Aircraft is owned by Lessor and is subject to the Mortgage and that the Insurances are subject to the Assignment and the Assignment of Insurances;	
 
 	(iv)	provide that the cover provided to each additional assured shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any person which results in a breach of any term, condition or warranty of the policy PROVIDED that the additional assured so protected has not caused, contributed to or knowingly condoned the said act or omission;	
 
 	(v)	provide that the insurers will waive any rights of subrogation against the additional assureds;	
 
 	(vi)	provide that the additional assureds will have no obligation or responsibility for the payment of any premiums due and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional assureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
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 	(vii)	except in respect of any provision for Cancellation or Automatic Termination specified in the policy or any endorsement thereof, the Insurances may only be cancelled or materially altered in a manner adverse to the additional assureds by the giving of not less than thirty (30) days’ (7 days’ or such other period as is customary in respect of War and Allied Perils) notice in writing. Notice shall be deemed to commence from the date such notice is given by the insurers to Lessee’s designated brokers. It is accepted that such notice will NOT, however, be given at normal expiry date of the Insurances or any endorsement;	
 
 	(viii)	if Reinsurance is a requirement of this Agreement such Reinsurance will (i) be on the same terms as the original Insurances and will include the provisions of this Appendix (ii) provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of Reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original Insurance policies in respect of which the then relevant policy of Reinsurance has been effected; and (iii) contain a “ cut-through ” Clause in the following form (or otherwise, satisfactory to Lessor): “The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the Reinsurances in respect of a total loss or other claim where as provided by the Aircraft Lease Agreement dated 2008 and made between [Lessor] and [Lessee] such claim is to be paid to the person named as designated loss payee under the primary Insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as sole loss payee under the primary Insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith”; subject to such provisions not contravening any law of the State of Incorporation; and	
 
 	(ix)	include and insure the indemnity provisions of Clause 11 of this Agreement to the extent of the risks covered by the policies;	
 
 	(h)	Lessee may maintain Insurances in respect of the Aircraft and any Engines for the purposes of this Agreement which incorporate the terms and conditions of Lloyd’s Airline Finance Endorsement AVN67B (“ AVN67B ”) provided that Lessee will ensure that for the purposes of AVN67B:	
 
 	(i)	this Agreement, the Mortgage, the Assignment and the Assignment of Insurances are identified as “ Contracts ”; and	
 
 	(ii)	the Indemnitees are named as the “ Contract Parties ”;	
 
 	(i)	for so long as Insurance or Reinsurance is placed in the London market (it being agreed that, without prejudice to the obligations of Lessee pursuant to Part 1 of this Appendix 7, Lessee is not obliged to place any Insurance or Reinsurance in the London market), in the event of any conflict or	
 
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 	inconsistency between this Appendix and AVN67B (or its equivalent) (and subject always to compliance by Lessee with (h) above), the relevant provisions of AVN67B (or its equivalent) shall be acceptable to Lessor for so long as, insurance Clause AVN67B (or its equivalent) represents, at the relevant time in the international insurance markets, best aviation insurance practice; and	
 
 	(j)	all insurances will contain a provision entitling Lessor or any additional assured to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so.	
 
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APPENDIX 7
PART 3
TOTAL LOSS
 
1.	For the purpose of this Agreement, “ Total Loss ” means with respect to the Aircraft (including for the purposes of this definition the Airframe):	
 
 	(a)	the actual or constructive total loss of the Aircraft (including any damage to the Aircraft which results in an insurance settlement on the basis of a total loss, or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
 	(b)	it being destroyed, damaged beyond repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the requisition of title, or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft by the government of the State of Registration, Habitual Base or other competent authority (whether de jure or de facto), but excluding requisition for use or hire not involving requisition of title; or	
 
 	(d)	the hi-jacking, theft, condemnation, confiscation, seizure or requisition for use or hire of the Aircraft which deprives any person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days.	
 
2.      (a)	If a Total Loss occurs prior to delivery of the Aircraft to Lessee, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement except that Lessor will return to Lessee or cancel the Letter of Credit in accordance with the provisions of paragraph 13 of Part 1 of Appendix 8 and any amounts of Rent or Deposit received by Lessor under this Agreement; and	
 
 	(b)	If a Total Loss occurs after delivery of the Aircraft to Lessee, Lessee will pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	the day falling sixty (60) days after the Total Loss; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
Until the Agreed Value and all other amounts which are then due and owing by Lessee to Lessor pursuant to the Transaction Documents and any Other Agreement are received by Lessor, Lessee shall continue to comply with its obligations hereunder to pay Rent. Once the Agreed Value and all other amounts which are then due and payable under this Agreement and the Transaction Documents and which are then due and payable under any Other Agreement have been paid in full to Lessor, Lessee’s obligation hereunder for the payment of Rent shall cease as and from the date on which Lessor receives the Agreed Value and Lessor will pay to Lessee all Maintenance Reserves and any Deposit (plus interest accrued thereon in accordance with this Agreement) then held by Lessor and return any Letter of Credit.
 
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3.	During any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss:	
 
 	(a)	the Rent and other charges payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under this Agreement other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition; and	
 
 	(b)	so long as no Default has occurred and is continuing, Lessee will be entitled to any hire amounts paid by the requisitioning authority in respect of the Term. Lessee will, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement. Lessor will be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor will apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, but so that, if any Default has occurred and is continuing, Lessor may apply the compensation or hire in or towards settlement of any amounts owing by Lessee under this Agreement.	
 
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APPENDIX 8
PART 1
RETURN OF THE AIRCRAFT
 
1.	Return	
On the Expiry Date or termination of the leasing of the Aircraft under this Agreement Lessee will, unless a Total Loss has occurred, at its expense, redeliver the Aircraft and Aircraft Documents to Lessor at an FAA or EASA approved maintenance facility at a location agreed between Lessor and Lessee or, in default of agreement, as specified by Lessor (the “ Redelivery Location ”), in a condition complying with Part of 2 of this Appendix 8, (the “ Return Condition ”) free and clear of all Security Interests and Permitted Liens (other than Lessor Liens) and thereupon, at Lessor’s request cause the Aircraft to be deregistered by the Air Authority.
 
2.	Pre-Redelivery Technical Report and Inspection	
No later than six (6) months prior to the Expiry Date, Lessee will provide Lessor with a technical report in a form to be agreed between Lessee and Lessor (each acting reasonably) summarising the current specification and maintenance status of the Aircraft, the equipment fitted on the Aircraft and status of the Aircraft Documents and allow Lessor to perform an inspection of the Aircraft and the Aircraft Documents.
 
3.	Aircraft Document Review	
At least ten (10) days prior to the Expiry Date Lessee shall make all key Aircraft Documents available to Lessor for review.
 
4.	Final Inspection	
Immediately prior to redelivery of the Aircraft, Lessee will make the Aircraft available to Lessor and the Security Trustee for a full-systems functional and operational inspection and other types of reasonable inspections based on the Aircraft type, age, use and other known factors with respect to the Aircraft (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with this Agreement. The Final Inspection will take place in conjunction with the Major Check to be carried out prior to redelivery and in no event less than 2 weeks prior to redelivery in accordance with this Agreement and be long enough to permit Lessor to:
 
 	(a)	perform a full inspection of the Aircraft Documents;	
 
 	(b)	inspect the Aircraft and uninstalled Parts;	
 
 	(c)	inspect the Engines, including without limitation (i) a hot and cold section video boroscope inspection of all areas (ii) engine condition runs and (iii) trend monitoring data in accordance with the Engine Manufacturer’s maintenance manual; and	
 
 	(d)	inspect the APU, including without limitation:	
 
 	(i)	perform an APU condition run; and	
 
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 	(ii)	hot and cold section video boroscope inspection of all areas.	
Any deviations from the Return Condition will be discussed in good faith between Lessor and Lessee with a view to resolving each discrepancy prior to the Acceptance Flight (as defined in paragraph 5 below).
The cost of the Final Inspection (other than any costs relating to Lessor’s employees or representatives) shall be borne by Lessee.
 
5.	Acceptance Flight	
Immediately prior to the redelivery of the Aircraft, Lessee will carry out for Lessor a demonstration flight in accordance with the Manufacturers’ standard flight operation check flight procedures for in service aircraft (the “ Acceptance Flight ”), or, if agreed to in writing by Lessor, in accordance with an airline acceptance flight procedure, either of which will be for the duration necessary to perform such acceptance flight procedures. The costs of such acceptance flight, up to a maximum duration of two (2) hours, will be on account of Lessee.
 
6.	Non-Compliance	
To the extent that, at the time of the Acceptance Flight, the condition of the Aircraft does not comply with this Agreement, Lessee will at Lessor’s option:
 
 	(a)	immediately rectify the non-compliance and to the extent the non-compliance extends beyond the Expiry Date, the Term will be automatically extended and this Agreement will remain in force until the non-compliance has been rectified; or	
 
 	(b)	redeliver the Aircraft to Lessor and indemnify Lessor, and provide to Lessor’s satisfaction cash as security for that indemnity, against the cost of putting the Aircraft into the condition required by this Agreement.	
In respect of minor discrepancies in the Return Condition, Lessor and Lessee shall negotiate in good faith with a view to agreeing arrangements whereby Lessee rectifies the discrepancies immediately after redelivery and if such arrangements are agreed between Lessee and Lessor the provisions of paragraph (b) above shall not apply.
 
7.	Redelivery	
Simultaneously with redelivery Lessee will provide to Lessor all documents necessary to export the Aircraft from the State of Registration and Habitual Base (including, without limitation, a valid and subsisting export certificate of airworthiness stating the exceptions (if any) and applicable waivers from the Aircraft type certificate for the Aircraft) and required in relation to the deregistration of the Aircraft with the Air Authority.
 
8.	Acknowledgement	
Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.
 
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9.	Maintenance Programme:	
 
 	(a)	Prior to the Expiry Date and upon Lessor’s request, Lessee will provide Lessor or, subject always to Clause 18, its agents reasonable access to the Agreed Maintenance Programme and the Aircraft Documents in order to facilitate the Aircraft’s integration into any subsequent operator’s fleet.	
 
 	(b)	Lessee will, if requested by Lessor to do so, before the return of the Aircraft deliver to Lessor a certified true current and complete copy of the Agreed Maintenance Programme. Lessor agrees that it will not disclose the contents of the Agreed Maintenance Programme to any person or entity except to the extent necessary to monitor Lessee’s compliance with this Agreement and/or to bridge the maintenance programme for the Aircraft from the Agreed Maintenance Programme to another programme after the Expiry Date.	
 
 	(c)	If at redelivery, there are any missing or incomplete documents or records, Lessee will, at its cost and expense, re-accomplish, or cause to be re-accomplished, the tasks necessary to produce such records prior to redelivery of the Aircraft.	
 
10.	Storage	
Upon redelivery of the Aircraft, the Lessee shall if given at least thirty (30) days prior written notice by Lessor use its reasonable endeavours to assist the Lessor having regard to, inter alia, the Lessee’s space and operational requirements and any required approvals, to store, maintain and insure the Aircraft at Lessor’s cost at Lessee’s principal operating base for a period not exceeding sixty (60) days from the redelivery of the Aircraft. For the avoidance of doubt, the Lessee shall not be required to store, maintain and insure the Aircraft under this paragraph, if Lessee reasonably determines that to do so would adversely affect its commercial operations.
 
11.	Ferry Flight	
Upon redelivery of the Aircraft, the Lessee will, at Lessor’s sole risk and expense, and provided that (a) Lessor has irrevocably and unconditionally accepted redelivery of the Aircraft as evidenced by the delivery to Lessee of a Technical Acceptance Certificate in form and substance satisfactory to Lessee (acting reasonably) and executed and delivered in escrow a Return Acceptance Certificate satisfactory to Lessee (acting reasonably) with instructions to release the same to Lessee immediately upon arrival of the Aircraft to the Ferry Flight destination; and (b) it receives not less than thirty (30) days prior written notice from the Lessor, fly the Aircraft from the Redelivery Location to such location as the Lessor may designate (the “ Ferry Flight ”) (provided that the Lessee is licensed and fully authorized to do so by all relevant authorities). The Lessee will provide insurance coverage for the duration thereof equivalent to that provided by the policies required upon Appendix 7. The Lessor shall promptly reimburse the Lessee the actual costs incurred by the Lessee (without any element of Lessee profit or Lessee mark up) in performing such Ferry Flight, including maintaining the insurances in connection therewith, upon presentation of appropriate invoices.
 
12.	Fuel	
Immediately after redelivery of the Aircraft to Lessor, an adjustment will be made in respect of fuel on board on the Delivery Date and the Expiry Date at the price then prevailing at the Redelivery Location.
 
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13.	Rent and Letter of Credit	
Within five (5) Business Days after:
 
 	(a)	redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement; or	
 
 	(b)	payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date;	
or in each case such later time as Lessor is satisfied that Lessee has irrevocably paid to Lessor all amounts which may then become payable under this Agreement and any Other Agreement, Lessor will:
 
 	(i)	pay to Lessee the amount of any Rent received in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be; and	
 
 	(ii)	if so requested by Lessee, consent to the cancellation of any Letter of Credit and/or return the balance of any Deposit (together with any interest accrued thereon pursuant to this Agreement) then held by Lessor.	
 
14.	Warranties	
Lessee shall comply with its obligations under Clause 10.
 
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APPENDIX 8
PART 2
OPERATING CONDITION AT REDELIVERY
On the Expiry Date the Aircraft, subject to fair wear and tear generally, will be in the condition set out below:
 
1.	GENERAL CONDITION	
The Aircraft will:
 
 	(a)	be in good operating condition, conforming to FAA or EASA type design certification and be clean by scheduled, passenger airline standards and will be configured in the same configuration as at Delivery or such other configuration as Lessor may agree;	
 
 	(b)	be returned with Lessor’s Engines and all Parts installed and with the same equipment as at Delivery, subject to replacements permitted under this Agreement;	
 
 	(c)	have installed the full complement of systems, equipment, parts, accessories, furnishings and loose equipment as normally installed in the Aircraft for continued regular airline service operating within limits specified in the Manufacturer’s maintenance manual and functioning in accordance with their intended use and in compliance with operations under JAR OPS 1, EASA Part M, or its successors equipment standards;	
 
 	(d)	have a currently valid certificate of airworthiness issued by the Air Authority and a valid export certificate of airworthiness issued by the Air Authority to such a country as will be specified by the Lessor and be in a condition qualifying for immediate issue of certificate of airworthiness pursuant to a Lessor specified EASA/EASA member state to JAR OPS 1, EASA Part M, or its successors standard;	
 
 	(e)	have immediately prior to redelivery, completed a 6 Year Check and no structural, systems, zonal and CPCP Airframe inspections will be due within the next following 6,500 Flight Hours and 4,500 Cycles and 20 months in accordance with the Maintenance Planning Document, have been accomplished;	
 
 	(f)	be in compliance with all Airworthiness Directives existing as at the Expiry Date and Mandatory Service Bulletins (which are mandatory or in respect of which Lessee is complying for its other Fleet Aircraft), which require compliance prior to the redelivery or within 180 days thereafter;	
 
 	(g)	if any waivers, alternate means of compliance, dispensations, extensions or carryovers with respect to any Airworthiness Directives or mandatory orders are granted by the Air Authority or permitted by the Agreed Maintenance Programme, the Lessee will nonetheless perform such Airworthiness Directives or mandatory orders as if such waivers, alternate means of compliance, dispensations or extensions did not exist;	
 
 	(h)	have installed all applicable original equipment manufacturer’s and manufacturer’s service bulletin kits received free of charge by the Lessee that are appropriate for the Aircraft and to the extent not installed, those kits will be furnished free of charge to the Lessor;	
 
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 	(i)	At redelivery the Aircraft shall be either rubbed down (subject to the acceptability of the current paint as base) and repainted in white with all necessary placards, warning signs, emergency markings etc, in place or at Lessor’s cost, and provided the same does not delay redelivery, in such other external livery as advised by Lessor to Lessee in writing as soon as reasonably possible prior to the scheduled Expiry Date but in any event no later than two (2) months prior to the scheduled Expiry Date subject to the Lessor paying the excess cost where such external livery is greater than the cost of the white one. Such painting will be accomplished in such a manner as to result in uniformly smooth and cosmetically acceptable aerodynamic surfaces. The Aircraft has to be stripped if more than one coat of paint has been applied during the Term or if in Lessor’s opinion (acting reasonably) the current paint is not acceptable as a base paint. If the Aircraft is stripped, Lessee shall, if applicable for Airbus aircraft of the same make and model as the Aircraft, perform detailed inspection for scribe marks in accordance with the Manufacturer’s then current requirements and standard practices (if any) or in accordance with any Airworthiness Directive in effect for a scribe mark inspection on that make and model of aircraft. The requirement to perform scribe mark inspections also applies where the Aircraft is stripped during the Term;	
 
 	(j)	have all signs and decals clean, secure and legible;	
 
 	(k)	meet the requirements of ICAO Annex 16, Chapter 3 noise compliance (as stated in the Air Authority issued noise certificate) without waiver or restriction;	
 
 	(l)	have no open, deferred, continued, carry over or placard log book items and have no temporary or time-limited structural repairs. No special or unique inspection or check requirements which are specific to the Aircraft (as opposed to all aircraft of the same model) will exist with respect to the Aircraft;	
 
 	(m)	be free of fuel, oil, hydraulic and pneumatic leaks in excess of maintenance manual limits allowing continued in service operation without special inspection. Hydraulic and pneumatic leaks will be within maintenance manual limits for continued operation. Any temporary leak repairs will have been replaced by permanent repairs. All oil and hydraulic tanks and reservoirs and systems along with lavatory and potable water tanks and systems shall have been freshly and full serviced;	
 
 	(n)	have all non-structural repairs, modifications and alterations accomplished in accordance with Airframe Manufacturer’s service bulletins or Airframe Manufacturer’s written approval (with a statement of conformity to type certificate data) or FAA/EASA STC Supplemental Type Certificate) or FAA 8110-3/8100-9 approval; and	
 
 	(o)	have no less than the Aircraft flight manual approved design weights,	
 
1.2	The Lessee agrees if requested in writing by Lessor at least ninety (90) days prior to redelivery to perform or cause to be performed, during the Final Inspection, providing such work does not cause the planned grounding of the Aircraft to be extended or for redelivery to be delayed, any other work reasonably requested by the Lessor to enable the Aircraft to be placed on another maintenance	
 
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programme and the Lessor shall reimburse the Lessee for the reasonable actual cost of such other work required by the Lessor at the Lessee’s best rate to third parties where the work is performed by Lessee or pay all costs incurred by Lessee for such work where such work is performed by a third party.
 
2.	COMPONENTS	
 
 	(a)	Each Flight Hour and Cycle controlled Hard Time Component (other than the Landing Gear and APU) shall have not less than 6,500 Flight Hours and 4,500 Cycles (or 100% of Hard-Time life if this interval is less) of life remaining to the next scheduled removal, in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document (including the Airworthiness Limitations). Each calendar controlled Hard Time Component including safety equipment will have not less than 20 months or 100% life remaining (whichever is less) to the next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document. Hard Time Components shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as EASA/EASA form 1 or FAA form 8130-3. For this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and which can have life fully restored through appropriate maintenance;	
 
 	(b)	Each Airframe Life-Limited Component will have not less than 6,000 Flight Hours and 4,500 Cycles and 20 months remaining to next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and Aircraft EASA type certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth. For this purpose “ Airframe-Life Limited Component ” means a component with an ultimate life which cannot be restored through appropriate maintenance;	
 
 	(c)	Each “ on-condition ” and “ condition-monitored ” component will be serviceable and shall be supported by appropriate certification documentation such as EASA form 1 or FAA form 8130-3 at the point of last installation on the Aircraft if replaced since Aircraft new delivery. The “ condition-monitored ” components shall be supported by an appropriate reliability programme and data in accordance with the Agreed Maintenance Programme;	
 
 	(d)	The installed components will have total Flight Hours and Cycles since new no more than 110% of the Aircraft total Flight Hours and Cycles since new; and	
 
 	(e)	There shall be no PMA Parts on the Aircraft, save for consumable parts. For these purposes “ consumable parts ” means any non-serialised item of aircraft material which is used only once and is not re-usable, such as (but not limited to) filters, seals, lubricants, cements, compounds, paints, chemicals, dyes and sealants.	
 
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3.	ENGINES	
The original Engine or Suitable Replacement Engine (in case of Total Loss) is in the configuration as permitted under this Agreement installed on the Aircraft shall comply with the following:
 
 	(a)	have no less than 5,000 Cycles scheduled life remaining in respect of Life Limited Parts and no more than 110% of the Aircraft total Flight Hours and Cycles since new. Engine Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth;	
 
 	(b)	will have accumulated no more than 10,000 Flight Hours and 6,500 Cycles since new or last Engine Performance Restoration shop visit;	
 
 	(c)	shall be serviceable and capable of full rated performance without limitations throughout the entire operating envelop of the Aircraft as defined in the EASA AFM. Each Engine shall have at least 25oC sea level hot day EGT margin and will not have accumulated more than 110% of the accumulated calendar time, Flight Hours and Cycles of the Airframe;	
 
 	(d)	all items beyond the Engine Manufacturer’s in-service limits will be repaired;	
 
 	(e)	will have just completed at the location for the Lessor’s acceptance on or about the redelivery date an all module, hot and cold section video borescope inspection. The Lessee will also have just completed in respect of each Engine an inspection of each magnetic chip detector, laboratory oil sample analysis, main oil screen and oil and fuel filter inspections. Any defects discovered in such inspections which exceed the Engine Manufacturer’s in-service limits shall be corrected at the Lessee’s expense. No Engine shall be “ on watch ” for any reason requiring any special or out of sequence inspection or reduced interval inspections. Each such Engine will comply with and have been maintained in accordance with the Agreed Maintenance Programme without waiver or exceptions. All items beyond the Engine manufacturer’s in-service limits shall be repaired; and	
 
 	(f)	have trend or condition monitoring data over at least the previous year; if Engine trend or condition monitoring data indicates a rate of acceleration in performance deterioration over at least the previous ninety days, which is higher than normal based on the maintenance experience of the Engine Manufacturer in operating the same model of engines, under similar conditions, the Lessee will, prior to redelivery, cause to be corrected such conditions which are determined to have exceeded tolerances defined for such engines in the Manufacturer’s maintenance manual or are otherwise determined to be causing such performance deterioration.	
 
4.	FUSELAGE, WINDOWS AND DOORS	
 
 	(a)	The fuselage and doors will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs;	
 
 	(b)	Windows will be free of major delamination, blemishes and crazing in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and will be properly sealed;	
 
 	(c)	Doors will be free moving, correctly rigged and be fitted with serviceable seals; and	
 
 	(d)	All external repairs for the pressurised fuselage shall have been reviewed in accordance with the latest revision of the Manufacturer’s repair	
 
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 	assessment programme (if issued, and otherwise in accordance with the Manufacturer’s published guidelines) applicable at the time of repair and supported by certified documentation evidencing accomplishment in accordance with EASA or FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Manufacturer’s written approval or FAA/EASA STC (Supplemental Type Certificate) or FAA Form 8110- 3/8100-9 approval or otherwise approved by the EASA or FAA.	
 
5.	WINGS AND EMPENNAGE	
 
 	(a)	The wings including nacelles and empennage will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs;	
 
 	(b)	Unpainted surfaces will be in the same condition as at Delivery, fair wear and tear accepted; and	
 
 	(c)	The wings will be free of fuel leaks in accordance with the maintenance manual allowing continued in service operation without special inspection or other action. The fuel tanks will have recently undergone an anti-fungal and biological growth contamination laboratory evaluation, with appropriate correction taken in accordance with the Manufacturer’s maintenance manual in the event excessive levels of contamination are identified.	
 
6.	INTERIOR AND COCKPIT	
 
 	(a)	The Aircraft interior including cockpit, windows, main cabin and cargo compartments shall have been maintained in accordance with the Agreed Maintenance Programme will be clean by normal industry standards, with all components free of excessive levels of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operation;	
 
 	(b)	the flight deck shall be clean, substantially free of stains and cracks in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and all systems shall function properly;	
 
 	(c)	soft furnishings including galley floor coverings, carpets, curtains, seat covers and seat cushions will be in good condition, freshly cleaned and free of stains and meet JAA/EASA/FAA 25.853 and any subsequent JAA/EASA fire resistance regulations;	
 
 	(d)	interior panels (including overhead bins, sidewall and ceiling panels, bulkheads and cargo compartment panels), and related seals (including window seals) shall be clean and substantially free of holes, cracks, temporary repairs and numerous dents;	
 
 	(e)	all signs and decals shall be clean secure and legible;	
 
 	(f)	Lessee’s logos, insignias and proprietary markings shall be removed and the surface restored or repainted such that no evidence of such items remains;	
 
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 	(g)	safety belts and harnesses shall be free of stains, discolouration, and fraying other than minor stains, discolouration and fraying;	
 
 	(h)	seats, lavatories and galleys shall be to an international airline standard and shall be fully serviceable, in good condition and repainted as necessary; and	
 
 	(i)	all panels and nets in the cargo compartment shall be in good condition; all rollers and cargo-restraint / nets and moving mechanisms shall be serviceable; and all compartments shall meet the then current the EASA and FAA fire regulations; all doors shall be rigged and functioning properly; and the compartments shall be freshly painted.	
 
7.	LANDING GEAR; WHEELS AND BRAKES	
 
 	(a)	The Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary and the Landing Gear shall have been stripped and repainted during any Landing Gear Overhaul (if applicable);	
 
 	(b)	Each installed Landing Gear shall have no less than 5,000 Cycles and 24 months (whichever is the most limiting factor) life remaining to the next scheduled removal in accordance with Agreed Maintenance Programme and the Maintenance Planning Document. Life Limited Part within each installed Landing Gear shall have not more than 110% of the Airframe total Cycles since new and certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth;	
 
 	(c)	The Landing Gear modification standard will meet the manufacturer requirements for an Aircraft Maximum Take-Off Weight as of delivery; and	
 
 	(d)	The tires, wheels and brakes will have on average, not less than half of their useful life remaining but in no case, less than 25% of their useful life remaining.	
 
8.	AUXILIARY POWER UNIT	
 
 	(a)	The APU will be serviceable in accordance with the requirements of the Maintenance Manual as evidenced by Maintenance Manual tests and inspections.	
 
 	(b)	APU Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
 	(c)	The APU will have not accumulated more than 4,000 APU Hours of operation since new or last APU Performance Restoration.	
 
 	(d)	The APU will have completed a video boroscope inspection prior to redelivery and any defects discovered in such inspection, which exceed the APU manufacturer in-service limits, will be corrected.	
 
9.	CORROSION	
 
 	(a)	The Aircraft shall be in compliance with the Manufacturer’s CPCP document, the CPCP requirements of the Maintenance Planning Document and FAA CPCP airworthiness directive requirements; and	
 
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 	(b)	The entire fuselage will be substantially free from corrosion and all mild and moderate corrosion found will be adequately cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s structural repair manual.	
 
10.	WEIGHT AND BALANCE	
The weight and balance Schedule will be accurate, current and represent the Aircraft’s configuration at the time of redelivery.
 
11.	FUEL TANKS AND SYSTEMS	
There will be no untreated or uncorrected fungus or corrosion including fungus or corrosion within the fuel tanks and fuel systems, and the Lessee will ensure that all fuel tanks are tested for fungus or other contamination, rectified and treated when applicable and certified clear.
 
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APPENDIX 8
PART 3
AIRCRAFT DOCUMENTS AT REDELIVERY
All Aircraft Documents will be in the condition as on Delivery, amended as required by the terms of this Agreement, by the Air Authority and by the EASA and FAA up to the date of redelivery.
All of the Aircraft Documents referred to in the preceding sentence will be made available at the time of redelivery of the Aircraft to the Lessor for inspection and will be in accordance with the regulations of the Air Authority.
The Aircraft Documents will include a list of all tasks performed by the Lessee between Delivery and redelivery.
The following documentation and information is part of the Aircraft and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate. Workable electronic copies should be provided if available.
Bulk storage media (CD, DVD) shall be in an industry standard format, requiring no proprietary or “ fee added ” software to access.
Any costs associated with decustomisation of manuals provided by the Manufacturer’s online service shall be borne by Lessee.
 
(1)	Certificates	
 
 	(a)	Certificate of Airworthiness;	
 
 	(b)	Certificate of Registration;	
 
 	(c)	Aircraft De-Registration Confirmation;	
 
 	(d)	Export Certificate of Airworthiness issued by the last country of registry;	
 
 	(e)	Noise Limitation Certificate (AFM page);	
 
 	(f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	(i)	Certification of compliance with fire blocking requirements as outlined in the applicable regulation;	
 
 	(ii)	Bottom Seat cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iii)	Back rest cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iv)	Dress covers (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(v)	Carpets;	
 
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 	(vi)	Curtains;	
 
 	(vii)	Interior Surfaces (if refurbished); and	
 
(2)	Manuals	
 
 	(a)	EASA/FAA Approval Airplane Flight Manual;	
 
 	(b)	Weight and Balance Control and Cargo Loading Manual and Supplements (in U.S. units), including last weigh paperwork;	
 
 	(c)	Operations Manual;	
 
 	(d)	Quick Reference Handbook;	
 
 	(e)	Structural Repair Manual;	
 
 	(f)	Aircraft Maintenance Manual;	
 
 	(g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	(i)	Galleys;	
 
 	(ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	(iii)	Lavatories;	
 
 	(iv)	Toilet Assemblies;	
 
 	(v)	Closets;	
 
 	(vi)	Class Dividers;	
 
 	(vii)	Passenger Seats;	
 
 	(h)	Aircraft Illustrated Parts Catalog (I.P.C.) (Operator Customized), if Lessee uses a numbering system which differs from the system used by the Manufacturers, Lessee will provide a certified cross reference listing, which shall include each part number used by Lessee and cross referenced to the Manufacturer’s part number;	
 
 	(i)	Operator part number to manufacturer part number cross reference;	
 
 	(j)	Aircraft Wiring Diagram;	
 
 	(k)	Terminal List;	
 
 	(l)	Aircraft Wiring List;	
 
 	(m)	Aircraft Schematics Diagram Manual;	
 
 	(n)	Aircraft Wiring Manual and List;	
 
 	(o)	Engine CMM, IPC;	
 
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 	(p)	APU CMM, IPC;	
 
 	(q)	Schematics Manual;	
 
 	(r)	Latest operator’s Maintenance Program;	
 
 	(s)	List of Certification Maintenance Requirements;	
 
 	(t)	Latest operator’s Minimum Equipment List; and	
 
 	(u)	Configuration Deviation List.	
 
 	(v)	Any other Manual originally delivered by Airbus to the Lessee (reference attachment to the Purchase Agreement, Technical documentation, Manuals)	
 
(3)	Airworthiness Directives Documentation	
 
 	(a)	The Aircraft shall have all records associated with AD compliance:	
 
 	(i)	A complete and current applicable AD status list of each Airframe, appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	AD number and revision number;	
 
 	(2)	AD title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	(b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at redelivery of the Aircraft, and countersigned by Lessor at Delivery or by Lessee at redelivery of the Aircraft. The list shall also be delivered in workable electronic format;	
 
 	(c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each AD If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work;	
 
 	(d)	Exemptions or deviations granted by the French DGAC or EASA or the German LBA (or other applicable civil aviation authority with jurisdiction over the Aircraft) on AD compliance, including copy of exemption request; and	
 
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 	(e)	Items c) and d) will be provided in document packages for each AD. Each package will contain all documents relative to the AD/Aircraft combination, and include copies of the AD.	
 
(4)	Engineering Documentation	
 
 	(a)	A current list (in paper and workable electronic format) of Airframe, appliance, Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Aircraft, each Engine and the APU. For appliances, only AD related Service Bulletins and Engineering Orders are required;	
 
 	(b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	(i)	SB number and revision number;	
 
 	(ii)	SB title;	
 
 	(iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	(iv)	Engineering documentation reference;	
 
 	(v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(vi)	Specify terminated or repetitive status;	
 
 	(vii)	Date of initial accomplishment of each portion of such engineering document;	
 
 	(viii)	Date of last maintenance accomplishment, if repetitive;	
 
 	(ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(c)	French DGAC/EASA/FAA/German LBA approvals (DER Form 8110-3 or Form 8100-9) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances);	
 
 	(d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any seller;	
 
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 	(e)	Data packages covering all non-manufacturer/non-French DGAC/German LBA/EASA-designed repairs or alterations, including the submittal to the French DGAC or EASA or German LBA for an STC or Form 337, if applicable. The data packages shall include the following:	
 
 	(i)	engineering orders;	
 
 	(ii)	drawings;	
 
 	(iii)	parts lists;	
 
 	(iv)	installation documentation;	
 
 	(v)	engineering analysis as submitted to obtain the STC or Form 337 approval;	
 
 	(vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	(vii)	maintenance program supplements;	
 
 	(viii)	any and all reference documents referenced by documents contained in this section (4);	
 
 	(f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	(g)	Digital Flight Data Recorder System technical description	
 
(5)	Aircraft Maintenance Status Summaries	
 
 	(a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	(b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	(c)	Certified status of system, zonal and structural tasks, including SSI (including last accomplished and next due) and other scheduled tasks as per MPD number (in paper and workable electronic format)	
 
 	(d)	Certified status of CPCP (including last accomplished and next due);	
 
 	(e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine lift limited parts (“ Engine LLPs ”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
 	(f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status to the extent required by the Aviation Authority or EASA by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	(g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent French DGAC/EASA/German LBA approval;	
 
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 	(h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any);	
 
 	(i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any; and	
 
 	(j)	Structural repairs and damage report (including Dent & Damage Chart) for pressure vessel, and unpressurized areas.	
 
(6)	Aircraft Maintenance Records	
 
 	(a)	Aircraft maintenance log from the past 24 months;	
 
 	(b)	Cabin maintenance log from the past 24 months;	
 
 	(c)	A Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of A Checks (or equivalent);	
 
 	(d)	C Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of C Checks (or equivalent);	
 
 	(e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (or equivalent);	
 
 	(f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	(g)	Last Weight & Balance Report including Schedule;	
 
 	(h)	Last FDR parameter check;	
 
 	(i)	Last Test Flight Report; and	
 
 	(j)	Certified Cross reference list for each MPD task number vs. last operator’s Task Card number including date/time/cycles of last accomplished and next due.	
 
(7)	Configuration Status	
 
 	(a)	French DGAC/EASA Approved and certified LOPA;	
 
 	(b)	Galley Drawings;	
 
 	(c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	(d)	Inventory Listing of Avionics installed units;	
 
 	(e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	(f)	List of applicable STC’s;	
 
 	(g)	Aircraft Detail Specification;	
 
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 	(h)	Aircraft Readiness Log;	
 
 	(i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	(j)	Electrical Load Analysis documents and data.	
 
(8)	A ircraft Historical Records	
 
 	(a)	Copy of original German LBA Export Certificate of Airworthiness;	
 
 	(b)	Manufacturer’s AD Report (at new delivery);	
 
 	(c)	Manufacturer’s Inspection Report, Initial Equipment list (at new delivery);	
 
 	(d)	Manufacturer’s repair/alteration report (at new delivery), or statement that no such report was produced;	
 
 	(e)	Manufacturer’s SB Report (at new delivery);	
 
 	(f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate;	
 
 	(g)	Service Difficulty Reports (if any);	
 
 	(h)	Aircraft Historical Log;	
 
 	(i)	Last Flight Data Recorder Read-out and calibration standards;	
 
 	(j)	Weighing reports;	
 
 	(k)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, landing gear and APU changes, etc.; and	
 
 	(l)	Rigging document.	
 
 	(m)	Any other documents as per List of Technical Documents provided by Airbus at new delivery	
 
(9)	Engine Records	
 
 	(a)	Engine log book or Engine Data Submittal;	
 
 	(b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	(c)	Manufacturer Delivery Documents;	
 
 	(d)	Complete copies of all historical engine/ module shop visit reports and engine last shop visit report;	
 
 	(e)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of each module;	
 
 	(f)	On Wing Repair records;	
 
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 	(g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	(h)	Last Borescope Report, including video if available;	
 
 	(i)	Test Cell Run Report for any shop visit;	
 
 	(j)	If the Engines have not been involved in an incident, certified Statement that Engines are not involved in an accident;	
 
 	(k)	Certified “ On-Watch ” statement;	
 
 	(l)	List of “ On-Watch Items ” items requiring repetitive inspections;	
 
 	(m)	List of repetitive inspections that are not required by AD;	
 
 	(n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	(o)	Certified QEC rotable parts list with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1 for each QEC rotable part;	
 
 	(p)	Certified Accessory LRU List with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1) for installed LRU’s;	
 
 	(q)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	(r)	Last engine run and power assurance report;	
 
 	(s)	All Life Limited Parts (“ LLPs ”) will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total cycles accumulated in each Engine or module;	
 
 	(t)	Each LLP will have a signed and certified cover page including engine or module total hours, total cycles, part total hours, total cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	(u)	Engine Manufacturer’s or French DGAC or German LBA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy;	
 
 	(iii)	Supporting analysis and documentation; and	
 
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 	(v)	Engine Manufacturer’s or French DGAC or German LBA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
(10)	APU	
 
 	(a)	Certified Statement on Status of APU;	
 
 	(b)	In house modifications (if applicable);	
 
 	(c)	Approved Release to Service Certification for installed units;	
 
 	(d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	(e)	Complete copies of all APU Shop Visit Reports & reason for removal;	
 
 	(f)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of the APU;	
 
 	(g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	(h)	APU Borescope Report;	
 
 	(i)	Last Test Run Report for any shop visit;	
 
 	(j)	All Life Limited Parts will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total Cycles accumulated in each Engine or module;	
 
 	(k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	(l)	APU manufacturer’s or French DGAC or German LBA approved data shall be provided for any discrepancies outside of the APU Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
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 	(ii)	Complete description of the discrepancy;	
 
 	(iii)	Supporting analysis and documentation; and	
 
 	(m)	APU manufacturer’s or French DGAC or German LBA approved data shall be provided for any repairs not in accordance with the APU Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair;	
 
 	(iii)	Supporting analysis and documentation.	
 
(11)	Components	
 
 	(a)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/overhaul records for hard time components (whether tracked on an individual component basis or controlled as part of scheduled airframe check); and	
 
 	(b)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/ overhaul records for on condition and condition monitored components.	
 
(12)	Landing Gear	
 
 	(a)	Approved Release to Service Certification for each fully built gear assembly, or major assemblies on each gear, as applicable, including either FAA 8130-3 or JAA/EASA Form 1; and	
 
 	(b)	Last Shop Visit Report.	
 
(13)	Repairs	
 
 	(a)	Manufacturer’s or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	(b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or EASA approved data. Repairs will not have any time limitations for removal, repair, or replacement. There shall be no special or distinct inspection requirements;	
 
 	(c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent;	
 
 	(d)	All repairs to un-pressured parts of the Aircraft shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent; and	
 
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 	(e)	A repair and dent map shall be provided which includes the following:	
 
 	(i)	Photo or drawing of the location, type and form of the repair;	
 
 	(ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3 or Form 8100-9 if applicable, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	(iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire Aircraft to include fuselage, empennage, and wings as well as an additional separate map of all dents on the aircraft.	
 
(14)	Software	
 
 	(a)	All software and databases associated with or relating to any electronic or avionic equipment, if any, shall be compliant with the manufacturer’s recommended standards at time of delivery, except for Lessee customized or Lessee proprietary software and databases. Any proprietary software or databases shall be replaced by generic equivalents;	
 
 	(b)	A certified listing of onboard loadable software and databases to include the following:	
 
 	(i)	ATA chapter;	
 
 	(ii)	nomenclature;	
 
 	(iii)	part number;	
 
 	(iv)	revision date;	
 
 	(v)	expiration date; and	
 
 	(c)	Controlled diskettes or other seller provided physical media as appropriate for directly loading the software onto the Aircraft shall be provided as part of the documentation (subject to express licensing or patent restrictions).	
 
 	(d)	Procedures for obtaining downloadable software from the internet.	
 
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APPENDIX 9
PART 1
EVENTS OF DEFAULT
 
(a)	Lessee fails to make any payment of Rent or Agreed Value or Total Loss proceeds on the due date and such payment remains unpaid for three (3) Business Days after the due date therefor; or	
 
(b)	Lessee or the Guarantor fails to make any other payment (other than those specified in (a) above) under any of the Transaction Documents to which it is a party within ten (10) days of Lessor’s written demand for such payment;	
 
(c)	Lessee fails to comply with any provision of Appendix 7 or any Insurance required to be maintained under that Appendix is cancelled or terminated or notice of cancellation is given in respect of any such Insurance; or	
 
(d)	Lessee or the Guarantor fails to comply with any other provision of any of the Transaction Documents to which it is a party and, if such failure is capable of remedy, the failure continues for thirty (30) days after notice from Lessor to Lessee; or	
 
(e)	any representation or warranty made (or deemed to be repeated) by Lessee or the Guarantor in or pursuant to any of the Transaction Documents to which it is a party or in any document or certificate or statement delivered pursuant thereto is or proves to have been incorrect in any material respect when made or deemed to be repeated and if capable of remedy shall not have been remedied within thirty (30) days after receipt by Lessor written notice from Lessee; or	
 
(f)	any Financial Indebtedness of Lessee or the Guarantor individually or in the aggregate in excess of $5,000,000 is not paid when due or on demand, if payable on demand, or becomes due prior to the date when it would otherwise have become due; or the security for any such Financial Indebtedness becomes enforceable; or	
 
(g)	any consent, authorisation, licence, certificate or approval of or registration with or declaration to any Government Entity in connection with any Transaction Document (including, without limitation):	
 
 	(i)	any authorisation required by Lessee or the Guarantor to obtain and transfer freely Dollars (or any other relevant currency) out of any relevant country; or	
 
 	(ii)	required by Lessee or the Guarantor to authorise, or in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of any of the Transaction Documents to which it is a party or the performance by Lessee or the Guarantor of its obligations thereunder; or	
 
 	(iii)	the registration of the Aircraft; or	
 
 	(iv)	any air operator certificate or concession title;	
is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and in the case of (iv) is not reinstated within thirty (30) days in circumstances where Lessor is satisfied (acting reasonably) that Lessee is using its best endeavours to reinstate the same and the revocation, suspension, cancellation, withdrawal, termination or non renewal is not related to any act, omission or default of Lessee; or
 
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(h)    (i)	Lessee or the Guarantor is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or any responsible officer or shareholder of Lessee or the Guarantor or any person authorised by any of the above to do so, admits the inability of Lessor or the Guarantor to pay its debts as they fall due; or	
 
 	(i)	Lessee or the Guarantor suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
(i)    (i)	any step (including petition proposal or convening a meeting of the shareholders or directors) is taken with a view to considering a resolution to present an application for, or with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration, custodianship, liquidation, or dissolution of Lessee or the Guarantor or any other insolvency proceedings involving Lessee or the Guarantor; or	
 
 	(ii)	any order is made or resolution passed for any such composition, assignment, arrangement, rehabilitation, administration, custodianship, liquidation consurso mercantil , dissolution or insolvency proceedings, or Lessee or the Guarantor becomes subject to or enters into any of the foregoing; or	
 
 	(iii)	any liquidator, trustee in bankruptcy, judicial custodian, statutory manager, compulsory manager, receiver, síndico, administrator, examiner or the like is appointed in respect of Lessee or the Guarantor or any of its assets;	
but excluding: (X) in each case, any proceedings for the purposes of an amalgamation or reorganisation the terms of which shall have received the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where Lessor is satisfied (acting reasonably) that any such amalgamation or reorganisation will not have an adverse effect on Lessor’s or the Guarantor’s ability to perform its obligations under the Transaction Documents or on the rights of Lessor, the Security Trustee or the Lenders under the Transaction Documents to which Lessee is a party, the Assignment or the Mortgage unless during or because of such amalgamation or reorganisation Lessee or the Guarantor becomes or is declared insolvent and (Y) in the case of any non bona fide petition or action referred to in (i)(i) above taken by a creditor or creditors of Lessee or the Guarantor, Lessor is satisfied (acting reasonably) that each of Lessee or the Guarantor, as applicable, is using its best endeavours to dismiss any such petition or action and the same is dismissed or discharged within sixty (60) days; or
 
(j)    (i)	an administrative or other receiver or manager is appointed in respect of Lessee or the Guarantor or any part of its assets; or	
 
 	(ii)	Lessee or the Guarantor requests any person to appoint such a receiver or manager; or	
 
 	(iii)	any other steps are taken to enforce any Security Interest over all or any part of the assets of Lessee or the Guarantor; or	
 
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 	(iv)	any attachment, sequestration, requisa , distress or execution affects any assets of Lessee or the Guarantor and is not discharged within 14 days or where Lessor is satisfied (acting reasonably) that Lessee or the Guarantor is using its best endeavours to discharge the same, within sixty (60) days; or	
 
(k)	there occurs in relation to Lessee or the Guarantor any event anywhere which, in the reasonable opinion of Lessor, corresponds with any of those mentioned in paragraphs (h) , (i) or (j); or	
 
(l)	Lessee or the Guarantor suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business; or	
 
(m)	Lessee or the Guarantor disposes or threatens to dispose of all or a material part of its assets, whether by one or a series of transactions, related or not, other than for the purpose of a reconstruction or amalgamation the terms of which have received the previous consent in writing of Lessor; or	
 
(n)	Lessee or the Guarantor or any other person claiming by or through Lessee or the Guarantor challenges the property rights of Lessor as owner and lessor in respect of the Aircraft or the security interests of the Security Trustee and the Lenders as mortgagee and as assignee under the Mortgage and the Assignment; or	
 
(o)	any event or series of events occurs (including, without limitation, any litigation, arbitration or administrative proceedings are commenced against Lessee or the Guarantor which, if adversely determined would have a material adverse effect on Lessee’s or the Guarantor’s ability to comply with its obligations under the Transaction Documents) which, in the reasonable opinion of Lessor might have a material adverse effect on the ability of Lessee or the Guarantor to comply with its obligations under any of the Transaction Documents to which it is a party; or	
 
(p)	any event of default (howsoever defined) is continuing beyond any applicable grace period under any Other Agreement; or	
 
(q)    (i)	the issuer of the Letter of Credit fails to make any payment under the Letter of Credit when due; or	
 
 	(ii)	the Letter of Credit is not in full force or, for any reason ceases to constitute the legal, valid and binding obligation of the issuer; or	
 	(iii)	any of the events listed in paragraph (g)(i) above, with respect to the performance by the issuer of its obligations under the Letter of Credit, or paragraphs (h), (i), (j) or (k) above apply to the issuer (references in those paragraphs to Lessee being deemed to be to the issuer); or the issuer ceases or suspends its business operations; or	
 
 	(iv)	where applicable, the Letter of Credit is not renewed within the time required by paragraph 1(b) of Appendix 5;	
unless, in each case, the Letter of Credit is replaced by a new Letter of Credit or with cash in an amount equal to the Deposit, in each case, pursuant to and in accordance with the provisions of this Agreement,
and each reference in this paragraph (q) to “ the issuer ” shall include a reference to any confirming bank for the Letter of Credit; or
 
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(r)	any air traffic control authority (or any authority on their behalf) or any other authority or airport notifies Lessor that there are navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of thirty (30) days from the date of such notice or such longer period for payment specified in such notice provided however that the failure to pay the same would give rise to the likelihood of a sale, forfeiture, detention or other loss of the Aircraft or an interest therein or to civil or criminal liability on Lessor, the Security Trustee or any Lender.	
 
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APPENDIX 9
PART 2
 
1.	Rights	
If an Event of Default occurs, Lessor may at its option (and without prejudice to any of Lessor’s other rights under this Agreement) at any time thereafter:
 
 	(a)	accept such repudiation and by notice to Lessee and with immediate effect terminate the letting of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
 	(b)	proceed by appropriate court action or actions to enforce performance of this Agreement or to recover damages for breach of this Agreement; and/or	
 
 	(c)	either:	
 
 	(i)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require); or	
 
 	(ii)	by serving notice require Lessee to redeliver the Aircraft to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require).	
 
2.	Deregistration	
If an Event of Default occurs, Lessor may sell or otherwise deal with the Aircraft as if this Agreement had never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement.
 
3.	Default Payments	
If:
 
 	(a)	an Event of Default occurs; or	
 
 	(b)	the Aircraft is not redelivered on the Expiry Date; or	
 
 	(c)	Lessee has elected or is deemed to have elected to fix the Rent pursuant to Clause 5.2(b) and the Aircraft is not delivered to and accepted by Lessee on the scheduled delivery date, other than as a result of any default by Lessor (save where such default arises as a result of any act, omission or default of Lessee or any Manufacturer).	
 
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Lessee will indemnify Lessor on demand against any loss (including loss of profit), damage, expense, cost or liability which Lessor may sustain or incur directly or indirectly as a result including but not limited to (but without duplication of amounts referred to in (i) to (iv) below):
 
 	(i)	any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Agreement or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(ii)	any amount of principal, interest, fees or other sums whatsoever paid or payable on account of additional funds borrowed in order to carry any unpaid amount;	
 
 	(iii)	any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to Lessor’s financing of the Aircraft; and	
 
 	(iv)	any loss, cost, expense or liability actually sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Agreement.	
Lessor will use reasonable endeavours to mitigate any loss, damages, cost or expenses incurred by it as a result of the foregoing.
 
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APPENDIX 10
ASSIGNMENT
 
1.	Security Interest	
Lessee will not assign, or create or permit to exist any Security Interest over any of its rights under this Agreement.
 
2.	Assign Rights	
 
 	(a)	Lessor may in connection with its purchase of the Aircraft under the Purchase Agreement Assignment assign all or any of its rights under any of the Transaction Documents by way of security.	
 
 	(b)	Lessor may at any time assign all or any of its rights under the Transaction Document by way of security to any new or replacement lenders as contemplated by paragraph 4.6 of Appendix 6 of this Agreement provided that no such assignment by way of security shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including any new or replacement lenders or security trustee in the list of Indemnitees. For the avoidance of doubt, the provisions of this paragraph 2(b) shall not apply to any changes in Lenders or any other parties to the Loan Agreement made pursuant to and in accordance with the provisions of the Loan Agreement.	
 
 	(c)	Lessor may assign all or any of its rights absolutely (otherwise than by way of security) under this Agreement and in the Aircraft to any Permitted Transferee provided that Lessor will have no further obligations under this Agreement following such assignment (except any liability and obligations in respect of any retained rights) but, notwithstanding that assignment, will remain entitled to the benefit of each indemnity under, and subject to the terms of, this Agreement. Lessee will comply with all reasonable requests of Lessor, its successors and assigns in respect of any assignment referred to above. Lessor will promptly notify Lessee of any assignment. No such assignment shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.	
 
3.	Transfer	
Lessee agrees that Lessor may at any time during the Term transfer its rights and obligations under this Agreement to any Permitted Transferee and upon completion of any such transfer Lessor will be released from and will have no further obligation under this Agreement (except any liability and obligations in
 
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respect of any retained rights). Lessee will promptly execute all documents reasonably requested by Lessor to effect, perfect, record or implement any such transfer, and will promptly comply with any other reasonably requests of Lessor, its successors and assigns in respect of any such transfer (including, without limitation, the execution of any novation agreement between Lessor, Lessee and the Permitted Transferee). No such transfer shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such transfer not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such transfer and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.
For the purposes of paragraphs 2 and 3 above, references to “ law ” includes any law which at the date of the assignment or transfer, as the case may be, has been enacted but is not yet in force.
 
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EXHIBIT A
Part 1
ACKNOWLEDGEMENT OF ASSIGNMENT OF GUARANTEE
 
To:	HSH Nordbank AG, New York Branch as Security Trustee	
Amentum Aircraft Leasing No. Four Limited as Assignor
The Guarantor acknowledges receipt of a notice (the “ Notice ”) of an assignment of even date herewith (the “ Assignment ”) between the Assignor and the Security Trustee and of a copy of the Assignment.
Terms and expressions defined or referred to in the Assignment (whether incorporated by reference to another document or otherwise) shall have the same meanings when used in this Acknowledgement.
In consideration of the payment to the Guarantor by the Security Trustee of *****, and of other good and valuable consideration, the receipt and sufficiency of which the Guarantor acknowledges, the Guarantor confirms its agreement to the terms of the Assignment and irrevocably undertakes:
 
1.	to pay all moneys that may be payable by it pursuant to the Guarantee in accordance with the terms of the Notice and the Guarantee;	
 
2.	that, if the Security Trustee issues to the Guarantor written notice (“ Enforcement Notice ”) that an Enforcement Event has occurred, the Guarantor shall thereafter:	
 
 	(a)	perform, observe and comply with all the Guarantor’s undertakings and obligations under the Guarantee in accordance with the terms thereof in the Security Trustee’s favour and for the Security Trustee’s benefit and to the exclusion of the Assignor; and	
 
 	(b)	if the Security Trustee so requests (and at no cost to the Guarantor, save where such Enforcement Event is attributable to an Event of Default (as defined in the Operating Lease Agreement), enter into a Guarantee with the Security Trustee or the Security Trustee’s nominee on terms identical ( mutatis mutandis ) to the terms of the Guarantee;	
 
3.	that, after issue by the Security Trustee of any Enforcement Notice, it shall not recognise the exercise by the Assignor of any of the Assignor’s rights and powers under the Guarantee unless and until requested to do so by the Security Trustee and the Assignor confirms that the Guarantor shall not be in breach of its obligations under the Guarantee to the extent that the Guarantor complies with the provisions of this paragraph 3;	
 
4.	to deliver to the Security Trustee a copy of any document, written information, notice, request or other communication given by it to the Assignor pursuant to the Guarantee at the same time as to the Assignor. Such copy shall be notified to the Security Trustee in the manner set forth in the notice provisions of clause 9.12 of the Guarantee save that for this purpose the notice details of the Security Trustee are:	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
111

			
Address:	  	230 Park Avenue	
	  	New York	
	  	NY10169	
	  	USA	
		
Fax:	  	+1 212 407 6033/6802	
Attention:        	  	Barbara J. Dering (Vice President) and
Rosetta Conti (Loan Administration Officer)	
This Acknowledgement is governed by, and shall be construed in accordance with, the laws of Ireland.
Yours faithfully
                                                                                                Date:                     2008
for and on behalf of 
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V.
 
112

EXHIBIT A
Part 2
ACKNOWLEDGEMENT OF ASSIGNMENT OF LEASE
 
To:	HSH Nordbank AG, New York Branch as Security Trustee	
Amentum Aircraft Leasing No. Four Limited as Assignor
The Lessee acknowledges and agrees the foregoing provisions of this letter agreement (the “ Notice ”). In consideration of payment to the Lessee by the Security Trustee and the Assignor of *****, and of other good and valuable consideration, receipt and sufficiency of which the Lessee hereby acknowledges, the Lessee hereby irrevocably agrees to the foregoing provisions of this letter and as follows:
 
1.	it confirms that any conditions required to be satisfied under clause 3.2 of the Operating Lease Agreement have been satisfied or unconditionally and irrevocably waived by the Lessee;	
 
2.	it shall pay all moneys that may be payable by it pursuant to the Operating Lease Agreement or any other Transaction Document to which the Lessee is a party and shall perform its obligations, in each case in accordance with the terms of the Notice, the Operating Lease Agreement and the Transaction Documents;	
 
3.	it acknowledges and agrees that (a) prior to its receipt of an Enforcement Notice the Assignor shall, notwithstanding the assignment to the Security Trustee contained in the Assignment, be entitled to exercise all rights relating to the Relevant Collateral subject to the terms of the Notice and the provisions of the Operating Lease Agreement and other Transaction Documents and (b) after receipt of an Enforcement Notice the Assignor shall pay all moneys payable by it under or in relation to the Relevant Collateral to such account or accounts as the Security Trustee may from time to time designate and the Assignor shall cease to be entitled to exercise any and all rights in or in relation to the Relevant Collateral and the Security Trustee shall exclusively be entitled to exercise any and all rights in or in relation to the Relevant Collateral in accordance with the provisions of the Operating Lease Agreement and the other Transaction Documents;	
 
4.	it hereby confirms that it consents to the terms of the Assignment, has not received notice of any interest of any third party in the Relevant Collateral or of any security interest (howsoever called) in the Relevant Collateral except as created or contemplated by the Assignment and hereby confirms receipt of a copy of the Assignment;	
 
5.	notwithstanding anything to the contrary in any Transaction Document, the Lessee confirms that, without prejudice to any other persons constituting “Indemnitees” as defined in the Operating Lease Agreement and subject to the relevant provisions of the Operating Lease Agreement, the Agent, the Security Trustee, the Arranger, the Lease Manager and any Lender shall constitute “Indemnitees” under the Operating Lease Agreement and the Security Trustee on behalf of itself and each of the Agent, the Arranger, the Lease Manager and each Lender shall be entitled to rely on all provisions of the Operating Lease Agreement which are expressed to be in favour of such Indemnitees and to exercise all rights expressed to be granted to such parties thereunder in each case as if the same were set forth in full herein (subject to any limitations or conditions contained therein); the Assignor and Security Trustee hereby notify to the Lessee that HSH Nordbank AG, New York Branch is the Agent and the Lender as of the date hereof;	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
113

6.	it shall permit the Security Trustee to inspect the Aircraft on the same basis as set out in paragraph 2.3 of Appendix 6 and paragraph 4 of Appendix 8 of the Operating Lease Agreement;	
 
7.	it acknowledges the restrictions placed on the discretion of the Assignor pursuant to paragraph 3 of the Notice.	
The Lessee confirms that it has received a copy of the Assignment together with such other documents and information as it has required in connection therewith.

for and on behalf of
CONCESIONARIA VUELA COMPAŇIA DE AVIATION S.A. DE C.V.
Date:                    2008
 
114

EXHIBIT B
FORM OF CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance relates to the operating lease agreement (the “ Agreement ”) dated [ — ] 2008 and made between Amentum Aircraft Leasing No. Four Limited (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V., (the “ Lessee ”) in respect of the one (1) Airbus A319-133 aircraft with manufacturer’s serial number 3705 and having two (2) IAE V2527M-A5 Engines with serial numbers [ — ] and [ — ] installed thereon (as more particularly described in the Agreement as the “ Aircraft ”).
Unless otherwise defined in this certificate, capitalised words and expressions used in this certificate shall have the same meanings as given to them in the Agreement.
 
1.	The Aircraft has been delivered to us together with its Aircraft Documents on [ — ]. Delivery took place on that date at Hamburg, at [ — ] hours.	
 
2.	We confirm that the Aircraft meets all of the requirements necessary for us to accept Delivery of it and that the Lessor has fully performed all of its obligations under the Agreement with respect to that Delivery.	
 
3.	The Lessee confirms to the Lessor that, as at the time indicated above, being the Delivery Date:	
 
 	(a)	the representations and warranties made by the Lessee in Part 1 of Appendix 3 to the Agreement remain true and correct;	
 
 	(b)	no Default or Event of Default is continuing;	
 
 	(c)	the Aircraft is insured as required by the Agreement.	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
By:                                                                                              
Title:                                                                                           
Agreed and acknowledged
AMENTUM AIRCRAFT LEASING NO. FOUR LIMITED
By:                                                                                              
Title:                                                                                           
 
115

EXHIBIT C
Part 1
Air Traffic Control Letter
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
             2008
Dear Sirs
One (1) Airbus A319-133 Aircraft MSN 3705 (the “ Aircraft ” )
In connection with an aircraft lease agreement dated              2008 between Amentum Aircraft Leasing No. Four Limited, (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG, NY Branch, (as security trustee for certain financiers of the Aircraft) at its address for notices being 230 Park Avenue, 27 th Floor, New York, NY 10169 (facsimile: +1 212 407 6033 and +1 212 407 6802; Attention: Barbara J Dering and Rosetta Conti)	
(together with the Lessor, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us. Any request which you receive from an Authorised Party shall not be construed by you as evidence that an Event of Default (under and as defined in the Lease Agreement) has occurred and is continuing.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.
Yours faithfully

For and on behalf of
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
 
116

EXHIBIT C
Part 2
Air Traffic Control Letter
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
             2008
Dear Sirs
One (1) Airbus A319-133 Aircraft MSN 3705 (the “ Aircraft ” )
In connection with an aircraft lease agreement dated              2008 between Amentum Aircraft Leasing No. Four Limited (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG, NY Branch, (as security trustee for certain financiers of the Aircraft) at its address for notices being 230 Park Avenue, 27 th Floor, New York, NY 10169 (facsimile: +1 212 407 6033 and +1 212 407 6802; Attention: Barbara J Dering and Rosetta Conti)	
(together with the Lessor, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.
Yours faithfully

For and on behalf of
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
 
117

EXHIBIT D
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
DEREGISTRATION and EXPORT POWER OF ATTORNEY
SPECIAL IRREVOCABLE POWER-OF-ATTORNEY FOR LAWSUITS AND COLLECTIONS AND FOR ACTS OF ADMINISTRATION IN FAVOUR OF EACH OF AMENTUM AIRCRAFT LEASING NO. FOUR LIMITED , HSH NORDBANK AG , AND AMENTUM CAPITAL LIMITED TO BE EXERCISED ON BEHALF OF THE GRANTOR OF SAID POWER OF ATTORNEY, CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE ACCORDING TO THE FOLLOWING
CLAUSES:
 
1.	Mr. [                      ] in his capacity as LEGAL REPRESENTATIVE of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE (the “ Lessee ”), hereby grants in favour of each of Amentum Aircraft Leasing No. Four Limited (the “ Lessor ”), HSH Nordbank AG, NY Branch, and Amentum Capital Limited and each of their respective employees and representatives (with the right of substitution and re-substitution, and with the right to revoke any substitution or re-substitution granted), acting jointly and severally as its true and lawful attorneys (each an “ Attorney ”), a SPECIAL POWER OF ATTORNEY IN AN IRREVOCABLE CHARACTER, as it is a condition under a bilateral contract pursuant to the Lease Agreement entered into between Lessor and Lessee dated [•] November 2008, (the “ Lease ”), in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic where this power shall be exercised, LIMITED WITH RESPECT TO ITS OBJECT, in order that, including, but not limited, each Attorney may, act on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, and pursuant to the Laws of the United Mexican States carry out the necessary procedures, actions and proceedings to obtain the registration and cancellation of the registration and export the aircraft which is subject to the Lease, being one (1) Airbus A319-133 aircraft with manufacturer’s serial number 3705 (the “ Aircraft ”), and the exportation of said Aircraft with any relevant governmental or private authority or entity, including, without limitation, the General Direction of Civil Aviation, the Mexican Aeronautics Registry, the Secretaría de Hacienda y Crédito Público and the Sistema de Administración Tributaria or before any other administrative or judicial authority in Mexico or in any other jurisdiction, or before any customs broker, in order for each Attorney to:	
 
 	(a)	release, terminate and void any and all interest of the Lessee in respect of the Aircraft;	
 
 	(b)	deregister and/or consent to the transfer (to any registry inside or outside Mexico or such other jurisdiction in which the Aircraft is, for the time being, registered) of the registration of the Aircraft and all other engines, accessories or items in use at the time of such transfer thereon or therein or otherwise held or used in substitution or replacement therefor in whatsoever manner, such transfer to be on such terms and conditions as may be determined by the Attorney in its absolute discretion;	
 
118

 	(c)	represent the Lessee wheresoever and whatsoever in all matters and affairs in connection with the registration, deregistration or re-registration of the Aircraft (including on the aircraft register maintained, for the time being, by the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) and/or any interest of the Lessee registered in any personal property security register;	
 
 	(d)	remove the Aircraft from Mexico or any other jurisdiction and to submit a report to and apply for and obtain permits, licences or approvals from any governmental authorities of Mexico (including, without limitation, the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) or any such other jurisdiction with respect to any of the above matters so that the Attorney is empowered to do and perform all things which the Lessee is now or would hereafter be entitled and empowered to do and perform, without any exception, in relation to those matters, all for the account of the Lessee;	
 
 	(e)	sign, seal (if appropriate), deliver, execute or otherwise perfect any and all documents, agreements, applications, consents or other instruments of whatsoever nature as the Attorney considers in its absolute discretion necessary or desirable in connection with any or all of the matters referred to in (a) to (d) inclusive above; and	
 
 	(f)	request any and all information with respect to registration status, servicing fees, taxes or any other type of payment status related to any procedures, process, lawsuits, including without limitation, judicial or administrative, which may be necessary to be obtained by each Attorney in connection with the Lease, the Aircraft, any of its engines or its related equipment thereto, from the Dirección General de Aeronáutica Civil (DGAC), Registro Aeronáutico Mexicano (RAM) and Servicios a la Navegación en el Espacio Aéreo Mexicano , (SENEAM).	
 
2.	Each Attorney is authorised to delegate to such person or persons as it may choose the exercise of any or all of the powers conferred on such Attorney hereunder.	
 
3.	In this Power of Attorney words and expressions defined in the Lease shall have the same meanings when used in this Power of Attorney.	
 
4.	The powers conferred by the Lessee in this Power of Attorney are irrevocable pursuant Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, and unconditional and are granted for value and secure proprietary interests, as a condition to a bilateral agreement as stated in paragraph 1 above, in and the performance of obligations owed to the respective donees and shall not terminate unless and until all obligations owing by the Lessee to the Lessor in relation to the Aircraft have been irrevocably discharged in full in writing by Lessor and any and all amounts outstanding, or which may become outstanding, in relation to the Aircraft from the Lessee to the Lessor.	
 
5.	No failure or delay on the part of any Attorney to exercise, and no delay in exercising any right, power or privilege under this Power of Attorney shall operate as a waiver thereof, nor shall the exercise of any right, power or privilege under this Power of Attorney preclude any other or further exercise thereof or the exercise of any other right, power or privilege.	
 
119

6.	The powers as set out in this Power of Attorney shall become effective in accordance with the provisions hereof from the date hereof.	
 
7.	Any person dealing with an Attorney shall not be required to make any determination or require any further evidence as to whether the Attorney’s rights hereunder have become exercisable.	
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. has executed this Power of Attorney as a deed on                              2008.
 
120

EXHIBIT E
QUIET ENJOYMENT LETTER
 
From:	HSH Nordbank AG, New York Branch	
    	230 Park Avenue, 27th Floor	
    	NY 10169	
    	USA	
 
To:	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
    	Av. Prolongación Paseo de la Reforma 490 Piso 1,	
    	Col. Santa Fe Pena Blanca,	
    	01210 Mexico	
Dated:                             2008
Dear Sirs
One Airbus A319-100 Aircraft Manufacturer’s Serial Number 3705
 
1.	We refer to the aircraft lease agreement dated [ — ] 2008 between Amentum Aircraft Leasing No. Four Limited (the Lessor ) and Concesionaria Vuela Compañía de Aviación S.A. de C.V. (the Lessee ) in respect of the leasing of one Airbus A319-133 aircraft with manufacturer’s serial number 3705 (the “ Aircraft ”) (the “ Lease ”).	
 
2.	Words and expressions defined in the Lease shall, unless the context otherwise requires, have the same meanings where used in this letter.	
 
3.	In consideration of the Lessee agreeing to enter into the acknowledgement of assignment of the Lease pursuant to a borrower security assignment dated on or about the date hereof between the Lessor (as assignor) and HSH Nordbank AG, New York Branch (as assignee) in relation to the Aircraft (the “ Borrower Security Assignment ”), we hereby undertake that, so long as no Event of Default has occurred and is continuing, neither we (nor anyone lawfully claiming through us) will interfere with the Lessee’s right to quiet use and possession of the Aircraft during the Term. The exercise by us of our rights under, or in connection with, the Lease or any of the other Assigned Documents (as defined in the Borrower Security Assignment) to which the Lessee is a party in accordance with the terms of the Lease or such other Assigned Document, will not constitute such interference.	
 
4.	The foregoing undertaking is not to be construed as restricting any of our rights as Security Trustee (i) to sell or otherwise dispose of the Aircraft to such persons and on such terms as we consider appropriate (subject to any requirements or restrictions imposed by applicable law and subject, unless an Event of Default has occurred and is continuing, to the Lease and other Transaction Documents), or (ii) (as assignee of the Lessor’s rights under the Lease) to enforce, in accordance with the provisions of the Lease and the other Transaction Documents, any of the Lessor’s rights under the Lease which are exercisable prior to the occurrence of an Event of Default which is continuing.	
 
5.	The rights conferred by this letter are granted only to the Lessee and do not extend to any assignee or sub-lessee of the Lessee.	
 
6.	This letter shall be governed by, and construed in accordance with, the laws of England.	
 
121

Please acknowledge your agreement to the terms of this letter by counter-signature below.
Yours faithfully

For and on behalf of
HSH NORDBANK AG, NEW YORK BRANCH (as Security Trustee)
Agreed and accepted

For and on behalf of
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
 
122

EXHIBIT F
FORM OF MONTHLY REPORT
 
To:	Amentum Aircraft Leasing No. Four Limited	
 
From:	Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	
 
Aircraft:	Airbus A319-100 Aircraft	
  	Manufacturer’s Serial Number 3705	
 
Month of:	                             	
AIRFRAME

Aircraft Total Flight Hours Since New:
 	 	 	
Aircraft Total Cycles Since New:
 	 	 	
Airframe Flight Hours Operated During Month:
 	 	 	
Airframe Cycles Operated During Month:
 	 	 	
Time Remaining to **                     Check:
 	 	 	
ENGINES

Engine Serial Number:
 	  	 	  	Engine Serial Number:
 	  	 	
New Aircraft MSN (if applicable):
 	  	 	  	New Aircraft MSN (if applicable):
 	  	 	
Original Position:
 	  	 	  	Original Position:
 	  	 	
Actual Location:
 	  	 	  	Actual Location:
 	  	 	
Total Flight Hours Since New:
 	  	 	  	Total Flight Hours Since New:
 	  	 	
Total Cycles Since New:
 	  	 	  	Total Cycles Since New:
 	  	 	
Flight Hours During Month:
 	  	 	  	Flight Hours During Month:
 	  	 	
Cycles During Month:
 	  	 	  	Cycles During Month:
 	  	 	
Average Engine Derate During Month:
 	  	 	  	Average Engine Derate During Month:
 	  	 	
Exact Flight Hours and Cycles since new of the Engine and the Airframe at the moment of removal/installation of Engine during the month are to be recorded.
 
Note:	If an Engine is removed or installed on another Aircraft (subject to the provisions of the Agreement) it must be reported monthly on this form.	
 
123

APU

APU Serial Number:
 	 	 	
Original Position:
 	 	 	
Actual Location:
 	 	 	
Total Flight Hours Since New:
 	 	 	
Total Cycles Since New:
 	 	 	
Flight Hours Operated During Month:
 	 	 	
Cycles Operated During Month:
 	 	 	
Exact Flight Hours and Cycles since new of the APU and the Airframe at the moment of removal/installation of the APU during the month are to be recorded.

Landing Gear:	  	Flight Hours
Since Overhaul:	  	Flight Hours
Since New:	  	Cycles Since
Overhaul:	  	Cycles Since
New:	
RH Main:
 	  	 	  	 	  	 	  	 	
Central Main:
 	  	 	  	 	  	 	  	 	
LH Main:
 	  	 	  	 	  	 	  	 	
Nose:
 	  	 	  	 	  	 	  	 	
Exact Flight Hours and Cycles since new of the Landing Gear and the Airframe at the moment of removal/installation of the Landing Gear during the month are to be recorded.
Details of any engineering modifications or changes during the month:

 
 
Details of any Service Bulletins and Airworthiness Directives accomplished for during the month:

 

124

Details of any routine checks (A check and above) or replacement of major items (Engine, APU, Landing Gear) performed during the month:

 
 
Details of any incident, accident and damage to the Aircraft during the month:

 
 
Details of any upcoming major upcoming maintenance event (C and above, major modification or replacement of major items as Engine, APU, Landing Gear) scheduled for the next 12 months:

 
 
Details of any claims under the Airframe Warranties or the Engine Warranties under *****

 
 
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.

		
Name:	  	 	
		
Title:	  	 	
		
Date:	  	 	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
125

EXHIBIT G
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (LESSEE)
Mr. [                      ], in his capacity as Legal Representative of Concesionaria Vuela Compañía de Aviación, S.A. de C.V., hereby grants in favour of                              , with address at                              [              ], [              ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Concesionaria Vuela Compañía de Aviación, S.A. de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Lease Agreement to be entered into by and between Amentum Aircraft Leasing No. Four Limited and Concesionaria Vuela Compañía de Aviación, S.A. de C.V., or any other document derived or related therewith, including to one (1) Airbus A319-133 with manufacturer’s serial number 3705 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
[                      ]
Legal Representative
 
126

EXHIBIT H
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (GUARANTOR)
Mr. [                      ], in his capacity as Legal Representative of Controladora Vuela Compañía de Aviación, S.A. de C.V., hereby grants in favour of                              , with address at                      [              ], [              ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Controladora Vuela Compañía de Aviación, S.A. de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Guarantee to be entered into by and between Amentum Aircraft Leasing No. Four Limited and Concesionaria Vuela Compañía de Aviación, S.A. de C.V., or any other document derived or related therewith, including to one (1) Airbus A319-133 with manufacturer’s serial number 3705 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Controladora Vuela Compañía de Aviación, S.A. de C.V.
[                      ]
Legal Representative
 
127

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.23
AIRCRAFT LEASE AGREEMENT
Dated as of 30 November 2009
BETWEEN
CIT AEROSPACE INTERNATIONAL
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA de AVIACIÓN, S.A. de C.V.
( D / B / A VOLARIS)
as Lessee

One (1) Airbus A319-100 Aircraft
Scheduled Delivery Month — August 2010 (1 of 2)

 
 
This Aircraft Lease Agreement may be executed in several counterparts. To the extent, if any, that this Aircraft Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Aircraft Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart so marked “Chattel Paper Original” on the signature page thereof.

CONTACTS – LES
NOTE : This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease 
Primary Business Contact:
Israel Padron
Vice President - Marketing 
CIT Aerospace
1100 Lee Wagener Boulevard, Suite 204
Fort Lauderdale, Florida 33315, U.S.A.
Tel: +1 (954) 359 0113
Fax: +1 (954) 359 5542
e-mail: israel.padron@cit.com

Payment Inquiries:	  	Technical Inquiries:	
		
Operations	  	Asset Manager	
CIT Aerospace	  	e-mail: aerospaceassetmgmt@cit.com	
3 George’s Dock, IFSC	  		
Dublin 1, Ireland	  		
Tel: +353 (1) 656 1004	  		
Fax: +353 (1) 656 1001	  		
e-mail: citaioperations@cit.com	  		
with a copy to:	  		
e-mail: una.slevin@cit.com	  		
		
Utilisation Reporting:	  	Financial Reporting	
		
Asset Manager	  	Operations	
e-mail: aerospaceassetmgmt@cit.com	  	CIT Aerospace	
	  	3 George’s Dock, IFSC	
Operations	  	Dublin 1, Ireland	
e-mail: citaioperations@cit.com	  	Tel: +353 (1) 656 1004	
	  	Fax: +353 (1) 656 1001	
with a copy to:	  	e-mail: citaioperations@cit.com	
e-mail: una.slevin@cit.com	  	with a copy to:	
e-mail: ciara.flynn@cit.com	  	e-mail: una.slevin@cit.com	
		
Insurance Reporting:	  	Legal Contact:	
		
Insurance Administrator	  	Malin Pålsson	
CIT Aerospace	  	CIT Aerospace	
Operations Department	  	3 George’s Dock, IFSC	
11 West 42 nd Street, 12 th Floor	  	Dublin 1, Ireland	
New York, New York 10036	  	Tel: +353 (1) 656 1036	
U.S.A.	  	Fax: +353 (1)656 1001	
Tel: +1 (212) 461 7830 or 7834	  	e-mail: malin.palsson@cit.com	
Fax: +1 (877) 525 9183	  		
e-mail: michelle.lynn@cit.com	  		
 
- i -

CONTACTS – LES
NOTE: This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease
Primary Business Contact
Fernando Suarez
Chief Financial Officer 
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
Prolongación Paseo de la Reforma No. 490 ~ Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210, México, D.F.
Tel: +52 (55) 5261 6400
Fax: +52 (55) 5261 6460
e-mail: fernando.suarez@volaris.com.mx

Payment Inquiries:	  	Technical Inquiries:	
		
Carlos Gonzalez	  	Andrés Fabre	
Financial Controller	  	Director – Technical and Operations	
		
Tel: +52 (55) 5261 6428	  	Tel: +52 (55) 5261 6415	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: andres.fabre@volaris.com.mx	
		
Utilisation Reporting:	  	Financial Reporting:	
		
Carlos Gonzalez	  	Carlos Gonzalez	
Financial Controller	  	Financial Controller	
		
Tel: +52 (55) 5261 6415	  	Tel: +52 (55) 5261 6428	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: carlos.gonzalez@volaris.com.mx	
		
Insurance/Risk Management Contact:	  	Legal Contact:	
		
Maria Elena Rodriguez	  	Alfonso Ascencio	
Risk Manager	  	General Counsel	
		
Tel: +52 (55) 5261 6435	  	Tel: +52 (55) 5261 6412	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 561 6460	
e-mail: maelena.rodriguez@volaris.com.mx	  	e-mail: alfonso.ascencio@volaris.com.mx	
 
- ii -

CONTENTS

Article	  	Page	 	
1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
2.	 	LEASE TERM; NATURE OF LEASE	  	 	2	  	
	 	2.1.	  	Lease Term	  	 	2	  	
	 	2.2.	  	Nature of Lease	  	 	2	  	
3.	 	RENT	  		  				
	 	3.1.	  	Agreement to Pay Rent	  	 	3	  	
	 	3.2.	  	Basic Rent at Delivery	  	 	3	  	
	 	3.3.	  	Supplemental Rent	  	 	3	  	
	 	3.4.	  	Obligation to Perform Unconditional	  	 	3	  	
4.	 	SECURITY DEPOSIT	  	 	5	  	
	 	4.1.	  	Security Deposit Amount	  	 	5	  	
	 	4.2.	  	Nature of Security Deposit	  	 	5	  	
	 	4.3.	  	Application of Security Deposit	  	 	5	  	
	 	4.4.	  	Effect of Application of Security Deposit	  	 	5	  	
	 	4.5.	  	Repayment of Security Deposit	  	 	5	  	
	 	4.6.	  	Security Deposit Letter of Credit	  	 	6	  	
5.	 	PAYMENTS	  	 	8	  	
	 	5.1.	  	Account	  	 	8	  	
	 	5.2.	  	Payments on Non-Business Days	  	 	8	  	
	 	5.3.	  	Timing of Payments	  	 	8	  	
	 	5.4.	  	Late Payment	  	 	8	  	
	 	5.5.	  	Calculation of Interest and Prorating of other Payments	  	 	8	  	
	 	5.6.	  	Payments in United States Dollars	  	 	8	  	
	 	5.7.	  	Retention of Certain Payments	  	 	8	  	
	 	5.8.	  	Application of Payments	  	 	9	  	
6.	 	AIRCRAFT SPECIFICATION; LESSEE INVOLVEMENT WITH SELLER	  	 	10	  	
	 	6.1.	  	Aircraft Specification	  	 	10	  	
	 	6.2.	  	Lessee Involvement with Seller	  	 	10	  	
7.	 	CONDITIONS PRECEDENT TO DELIVERY	  	 	12	  	
	 	7.1.	  	Conditions Precedent	  	 	12	  	
	 	7.2.	  	Waiver or Deferral of Conditions Precedent	  	 	12	  	
8.	 	DELIVERY; TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	  	 	13	  	
	 	8.1.	  	Delivery Location and Timing	  	 	13	  	
	 	8.2.	  	Delivery Subject to Seller Delivery	  	 	13	  	
	 	8.3.	  	Termination for Delay	  	 	13	  	
	 	8.4.	  	Seller’s Right to Terminate	  	 	13	  	
	 	8.5.	  	Event of Loss to Aircraft Prior to Delivery	  	 	13	  	
	 	8.6.	  	Lessee Acceptance of Aircraft	  	 	13	  	
	 	8.7.	  	Risk of Loss to Aircraft following Delivery	  	 	14	  	
	 	8.8.	  	Waiver of Remedies for Delay in Delivery	  	 	14	  	
9.	 	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	  	 	15	  	
	 	9.1.	  	Lessee’s Representations and Warranties	  	 	15	  	
	 	9.2.	  	Application of Representations and Warranties; Survival	  	 	17	  	
	 	9.3.	  	Lessee’s General Covenants	  	 	17	  	
10.	 	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	  	 	19	  	
	 	10.1.	  	General Representations and Warranties of Lessor	  	 	19	  	
	 	10.2.	  	Covenant of Quiet Enjoyment	  	 	20	  	
 
- iii -

									
 	  	10.3.	  	Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies	  	20	 	
	  	10.4.	  	Disclaimer and Waiver of Incidental, Consequential, Special and Punitive Damages	  	 	22	  	
	  	10.5.	  	No Duty of Indemnitees to Inspect, etc.	  	 	22	  	
11.	  	GENERAL OPERATION OF THE AIRCRAFT	  	 	23	  	
	  	11.1.	  	General Operation	  	 	23	  	
	  	11.2.	  	Insured Operations	  	 	23	  	
	  	11.3.	  	Carriage of Goods	  	 	23	  	
	  	11.4.	  	Operational Expenses	  	 	24	  	
	  	11.5.	  	Compliance with Laws	  	 	24	  	
	  	11.6.	  	Lessee’s Covenants Regarding Use of the Aircraft	  	 	25	  	
	  	11.7.	  	Certain Tax Matters	  	 	26	  	
12.	  	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	  	 	27	  	
	  	12.1.	  	General	  	 	27	  	
	  	12.2.	  	Accomplishment of Tasks and Repairs	  	 	27	  	
	  	12.3.	  	Information on Maintenance	  	 	27	  	
	  	12.4.	  	Aircraft Documents in English Language	  	 	27	  	
	  	12.5.	  	Originals	  	 	28	  	
	  	12.6.	  	Performance of Maintenance	  	 	28	  	
	  	12.7.	  	Alterations, Modifications and Additions	  	 	28	  	
	  	12.8.	  	Replacement of Parts	  	 	30	  	
	  	12.9.	  	Title to Parts	  	 	31	  	
	  	12.10.	  	Temporary Replacement of Parts	  	 	32	  	
	  	12.11.	  	Exchanging Parts	  	 	32	  	
	  	12.12.	  	Temporary Attachment and Removal of Engines	  	 	32	  	
	  	12.13.	  	Installation of Items of Equipment on Other Aircraft	  	 	33	  	
	  	12.14.	  	Failure to Reinstall Engines and Items of Equipment on the Aircraft	  	 	34	  	
13.	  	MAINTENANCE RESERVES	  	 	35	  	
	  	13.1.	  	Maintenance Reserves	  	 	35	  	
	  	13.2.	  	Discrepancies	  	 	35	  	
	  	13.3.	  	Rights in Maintenance Reserves	  	 	35	  	
	  	13.4.	  	Claims for Reimbursement - Timing	  	 	36	  	
14.	  	SELLER’S AND MANUFACTURERS’ WARRANTIES	  	 	37	  	
	  	14.1.	  	Assignable Warranties	  	 	37	  	
	  	14.2.	  	Reassignment; Assignment of Lessee Warranties	  	 	37	  	
	  	14.3.	  	Warranty Claims	  	 	37	  	
15.	  	SUBLEASING AND WET LEASING	  	 	38	  	
	  	15.1.	  	Subleasing	  	 	38	  	
	  	15.2.	  	Wet Leasing	  	 	39	  	
	  	15.3.	  	No Independent Subleasing of Items of Equipment	  	 	40	  	
	  	15.4.	  	Expenses	  	 	40	  	
	  	15.5.	  	Lessee Remains Liable	  	 	40	  	
16.	  	REPORTING AND INSPECTIONS	  	 	41	  	
	  	16.1.	  	Financial Reporting	  	 	41	  	
	  	16.2.	  	Aircraft Utilisation and Other Reporting/Information	  	 	42	  	
	  	16.3.	  	Further Information; Inspections	  	 	42	  	
	  	16.4.	  	Technical Report Prior to Return of Aircraft	  	 	43	  	
17.	  	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	  	 	44	  	
	  	17.1.	  	Registration	  	 	44	  	
	  	17.2.	  	Identification Plates	  	 	44	  	
	  	17.3.	  	Aeronautics Authority Acknowledgment	  	 	44	  	
	  	17.4.	  	Authorisation to Make Perfection Filings	  	 	44	  	
 
- iv -

							
 	  	17.5.	  	Perfection of Title	  	44	
	  	17.6.	  	Cape Town Convention	  	45	
	  	17.7.	  	Permitted Liens	  	47	
18.	  	GENERAL INDEMNITY	  	48	
	  	18.1.	  	Scope	  	48	
	  	18.2.	  	Lessee’s Release	  	48	
	  	18.3.	  	Repayment	  	49	
	  	18.4.	  	Payment	  	49	
	  	18.5.	  	Exclusion	  	49	
	  	18.6.	  	After-Tax Nature of Indemnity	  	50	
	  	18.7.	  	Contest	  	50	
	  	18.8.	  	Survival	  	51	
19.	  	INSURANCE	  	52	
	  	19.1.	  	Obligation to Insure	  	52	
	  	19.2.	  	Liability Insurance	  	52	
	  	19.3.	  	Contractual Liability; Tail Coverage for Liability Insurance	  	52	
	  	19.4.	  	Insurance Against Loss or Damage to the Items of Equipment	  	52	
	  	19.5.	  	Reinsurance	  	53	
	  	19.6.	  	Requirements for All Insurances	  	54	
	  	19.7.	  	Reports	  	54	
	  	19.8.	  	Assignee of Lessor’s and/or Owner’s Interests	  	55	
	  	19.9.	  	Failure to Insure	  	55	
	  	19.10.	  	Lessor’s Right to Insure	  	55	
	  	19.11.	  	Changes to Insurance Practice	  	55	
	  	19.12.	  	AVN 67B	  	56	
20.	  	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	  	57	
	  	20.1.	  	Risk of Loss and Damage	  	57	
	  	20.2.	  	Notification of Loss and Damage	  	57	
	  	20.3.	  	Event of Loss – Aircraft/Airframe	  	57	
	  	20.4.	  	Event of Loss – Engine or APU	  	58	
	  	20.5.	  	Event of Loss – Landing Gear	  	59	
	  	20.6.	  	Repairable Damage	  	59	
	  	20.7.	  	Documents Loss	  	60	
	  	20.8.	  	Application of Payments from Governmental Authorities	  	60	
	  	20.9.	  	No Lessor Liability to Repair or Replace Following Delivery	  	61	
21.	  	TAXES; TAX INDEMNITY	  	62	
	  	21.1.	  	Indemnity	  	62	
	  	21.2.	  	VAT	  	65	
	  	21.3.	  	Lessor Tax Certificates	  	65	
	  	21.4.	  	Withholding Tax Exemption Certificates	  	66	
	  	21.5.	  	Tax Filings; Information	  	66	
	  	21.6.	  	Payment of Taxes and Indemnities	  	66	
	  	21.7.	  	Contest	  	67	
	  	21.8.	  	Survival	  	69	
	  	21.9.	  	Change in Circumstances; Mitigation	  	69	
22.	  	RETURN OF AIRCRAFT	  	70	
	  	22.1.	  	Time and Place	  	70	
	  	22.2.	  	Condition	  	70	
	  	22.3.	  	Lessee’s Continuing Obligations	  	70	
	  	22.4.	  	Legal Status Upon Return	  	71	
	  	22.5.	  	Airport and Navigation Charges	  	71	
 
- v -

							
23.	  	EVENTS OF DEFAULT	  	72	
24.	  	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	  	74	
	  	24.1.	  	Lessor’s Rights Following an Event of Default	  	74	
	  	24.2.	  	De-Registration	  	76	
	  	24.3.	  	Present Value of Payments	  	76	
	  	24.4.	  	Remedies Cumulative	  	76	
	  	24.5.	  	Lessor’s Exercise of Remedies	  	76	
	  	24.6.	  	Application of Payments Following Default or Event of Default	  	77	
	  	24.7.	  	Use of Termination Date	  	77	
25.	  	ASSIGNMENT AND TRANSFER	  	78	
	  	25.1.	  	No Assignment by Lessee	  	78	
	  	25.2.	  	Transfer of Lessor’s and/or Owner’s Interests	  	78	
	  	25.3.	  	Cooperation with Transfers	  	78	
	  	25.4.	  	Financings	  	78	
	  	25.5.	  	Cooperation with Financings	  	79	
26.	  	LAW AND JURISDICTION	  	80	
	  	26.1.	  	Governing Law	  	80	
	  	26.2.	  	Consent to Jurisdiction	  	80	
	  	26.3.	  	Process Agent and Service of Process	  	80	
	  	26.4.	  	Jurisdiction and Forum	  	80	
	  	26.5.	  	Waiver of Jury Trial	  	80	
	  	26.6.	  	Waiver of Immunity	  	81	
27.	  	MISCELLANEOUS	  	82	
	  	27.1.	  	Severability and Illegality	  	82	
	  	27.2.	  	Amendments	  	83	
	  	27.3.	  	Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer	  	83	
	  	27.4.	  	Counterparts	  	83	
	  	27.5.	  	Delivery of Documents by Electronic Means	  	84	
	  	27.6.	  	Survival	  	84	
	  	27.7.	  	Entire Lease	  	84	
	  	27.8.	  	Successors and Assigns	  	84	
	  	27.9.	  	Brokers	  	84	
	  	27.10.	  	Transaction Costs	  	84	
	  	27.11.	  	Time is of the Essence	  	85	
	  	27.12.	  	Language	  	85	
	  	27.13.	  	No Rights of Third Parties	  	85	
	  	27.14.	  	Delegation	  	85	
	  	27.15.	  	Further Assurances	  	85	
	  	27.16.	  	Rights at Law	  	85	
	  	27.17.	  	Confidentiality	  	85	
	  	27.18.	  	Notices	  	86	
 
- vi -

Appendices

1	  	Definitions	
2	  	Commercial Terms	
	  	A.	  	Lease Term	
	  	B.	  	Rent, Security Deposit, Insurance and other Financial Matters	
	  	C.	  	Escalation	
	  	D.	  	Maintenance Reserves	
	  	E.	  	Return Conditions	
3	  	Acceptance Certificate	
4	  	Lease Supplement	
5	  	Participation Agreement	
6	  	Conditions Precedent / Post-Delivery Items	
	  	A.	  	Lessor’s Conditions Precedent/Post-Delivery Items	
	  	B.	  	Lessee’s Conditions Precedent/Post-Delivery Items	
7	  	Return Acceptance Certificate	
8	  	Forms	
 
- vii -

THIS AIRCRAFT LEASE AGREEMENT is made as of 30 November 2009 by and between:
 
1.	CIT AEROSPACE INTERNATIONAL , a company organised and existing under the applicable laws of Ireland and having its principal place of business at 3 George’s Dock, IFSC, Dublin 1, Ireland (“ Lessor ”); and,	
 
2.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS) , a company organised and existing under the applicable laws of the United Mexican States and having its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).	
WHEREAS:
Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee the Aircraft on the terms and subject to the conditions of this Lease.
NOW THEREFORE IT IS AGREED as follows:
 
1.	DEFINITIONS AND INTERPRETATION	
1.1. Unless the context otherwise requires, all capitalised terms used in this Lease shall have the meanings given such terms in Appendix 1 or as may otherwise be defined in this Lease.
1.2. References to Articles, Sections and Appendices are to be construed as references to the articles, sections and appendices of and to this Lease and references to this Lease include the Appendices.
1.3. Words importing the plural shall include the singular and vice versa.
1.4. Reference to “Lessee”, “Lessor”, “Owner”, “Owner Participant”, “Financing Party” or any other Person shall include the successors, assigns and transferees of such Person.
1.5. The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
1.6. References to (or to any specified provision of) this Lease or any Operative Document shall mean this Lease or such Operative Documents as in force for the time being and as amended, novated, substituted or supplemented from time to time in accordance with this Lease or such Operative Document.
1.7. References to “hereby”, “herein”, “hereof”, “hereunder”, and other like words shall refer to this Lease including, without limitation, as supplemented by the Lease Supplement.
1.8. Whenever it is stated in this Lease that the consent or other action of Lessee or Lessor is not to be “unreasonably withheld” it shall be deemed to mean that such consent or action shall not be “unreasonably withheld or delayed”.
1.9. Whenever this Lease or any Operative Document refers to an obligation of CIT Leasing or Owner owing to Lessee, or of Lessor that requires the cooperation or conduct of Owner or CIT Leasing, unless such obligation is taken directly by Owner or CIT Leasing in favour of Lessee, this obligation shall be deemed to mean that Lessor shall cause Owner or CIT Leasing to act accordingly.

	  		  	ARTICLE 1
DEFINITIONS	

2.	LEASE TERM; NATURE OF LEASE	
2.1. Lease Term .
(a) Lessor shall lease the Aircraft to Lessee for the period stated in Appendix 2A.
(b) The Lease Term shall commence at Delivery and shall end on the Termination Date.
2.2. Nature of Lease . At all times during the Lease Term, full legal title to the Aircraft and each Item of Equipment shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. This Lease and the Lease Supplement, together, transfer to Lessee with respect to the Aircraft a leasehold interest only and Owner is the owner and Lessor is the lessor of the Aircraft, and Lessee is the lessee of the Aircraft, for all purposes, including for purposes of the application of all relevant laws, regulations, rules, administrative practices and policies, and all relevant financial accounting principles.

	  	2	  	ARTICLE 2
LEASE TERM; NATURE OF LEASE	

3.	RENT	
3.1. Agreement to Pay Rent . As rental for the Aircraft, Lessee shall pay to Lessor Basic Rent, in advance, on each Rent Payment Date in respect of each Rent Period.
3.2. Basic Rent at Delivery . The amount of Basic Rent due and payable by Lessee for each Rent Period, including adjustments calculated in accordance with Appendix 2B, Section 1, shall be set forth in the Acceptance Certificate. In the event the Delivery Date is not the first day of a calendar month, Lessee shall pay Lessor the full Basic Rent amount due for the second Rent Period on or prior to the Delivery Date and shall pay the prorated Basic Rent amount due for the first Rent Period on or prior to the first day of the second Rent Period. For example, if Delivery occurs on 10 August 2010, on 09 August 2010 Lessee shall pay Lessor the full Basic Rent amount covering the Rent Period from 01 September 2010 through 30 September 2010; then, on 01 September 2010, Lessee shall pay Lessor the prorated Basic Rent amount covering the initial Rent Period from 10 August 2010 through 31 August 2010.
3.3. Supplemental Rent . Lessee shall pay to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental Rent within ten (10) days after demand or such other relevant period as may be provided herein.
3.4. Obligation to Perform Unconditional . This Lease is a net lease and Lessee’s obligation to pay Rent and Supplemental Rent, calculated in accordance with this Lease, and to perform its other Obligations shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation:
(a) any withholding, set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including, without limitation, any breach by Lessor of its warranties, agreements or covenants contained herein or in any of the other Operative Documents;
(b) any defect in the title, registration, airworthiness, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee or any other Person for any reason whatsoever;
(c) any Liens with respect to the Aircraft;
(d) an Event of Loss with respect to the Aircraft or any Item of Equipment (subject to the terms of Section 20.3);
(e) the invalidity or unenforceability or lack of due authorisation or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease;
(f) any insolvency, bankruptcy, examinership, reorganisation, administration, liquidation or similar proceedings affecting the enforcement of creditor’s rights generally by or against Lessor or Lessee;
(g) any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing; or

	  	3	  	ARTICLE 3
RENT	

(h) any imposition of Taxes.
Nothing in this Section 3.4 shall be construed so as to prevent Lessee from pursuing any Claim it may have against Lessor or any other Person in such court of law or otherwise as Lessee may deem appropriate.

	  	4	  	ARTICLE 3
RENT	

4.	SECURITY DEPOSIT	
4.1. Security Deposit Amount . Lessee shall pay the Security Deposit in cash into Lessor’s bank account in accordance with the provisions of Appendix 2B, Section 2.
4.2. Nature of Security Deposit . Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.5 below, the Security Deposit shall be non-refundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor, may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of the Obligations and Lessee hereby assigns and charges in favour of Lessor, and hereby grants to Lessor a first priority security interest in, the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than created under this Lease, in or otherwise dispose of the Security Deposit. Lessee shall, from time to time, execute and file with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor with respect to the Security Deposit, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
4.3. Application of Security Deposit . If an Event of Default has occurred and is continuing hereunder, in addition to all other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee or any Affiliate of Lessee, as applicable, under any Operative Document or Related Lease and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.
4.4. Effect of Application of Security Deposit . If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other Person, of any Event of Default and Lessee shall, within three (3) Business Days after Lessor’s written demand, pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no Default or Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.
4.5. Repayment of Security Deposit . Provided no Default or Event of Default has occurred and is continuing, the Security Deposit, less the amount, if any, of any reasonable costs incurred by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or any Affiliate of Lessee, as applicable, is responsible hereunder or under any Related Lease in connection with the termination or cancellation of this Lease or a Related Lease or return of the Aircraft or an aircraft under any Related Lease, shall be paid over to Lessee promptly, and in any event within five (5) Business Days, after the Termination Date and the satisfaction by Lessee, in full, of its Obligations and the Related Obligations, the payment or performance of which is then due (including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and to correct discrepancies identified in the Return Acceptance Certificate, but excluding those other Obligations or Related Obligations expressly provided herein to survive the Termination Date or the equivalent date in any Related Lease and which are not due for performance on or as of such date).

	  	5	  	ARTICLE 4
SECURITY DEPOSIT	

4.6. Security Deposit Letter of Credit . In lieu of paying or maintaining the Security Deposit in cash, Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Cash Security Deposit.
(a) If Lessee elects to provide the Security Deposit in the form of a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than ten (10) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the Security Deposit paid in cash. The Security Letter of Credit shall remain in full force and effect during the Lease Term and for not less than ninety (90) days following the Scheduled Termination Date, shall permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit, and shall be freely assignable and transferable by Lessor without restriction or condition. Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee the equivalent amount of the Security Deposit then held by Lessor in cash.
(b) Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:
(i) upon the occurrence of an Event of Default; and/or
(ii) if Lessee has not delivered a replacement Security Letter of Credit to Lessor in accordance with the provisions of this Section 4.6 or deposited with Lessor cash in the amount of the Security Deposit by the required time set forth therein; and/or
(iii) not sooner than five (5) Business Days prior to the expiration date of the Security Letter of Credit if (x) such expiration date is prior to the date required under Section 4.6(a), and (y) Lessee has not delivered a replacement letter of credit in substitution for the expiring Security Letter of Credit by such date or deposited with Lessor by such date the Security Deposit in cash;
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit to the same extent as provided in Sections 4.3 and 4.5, as if Lessee had paid the Security Deposit in cash.
(c) If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall within three (3) Business Days after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement letter of credit to be issued in the total amount of the Security Deposit or pay the amount of such shortfall in the Security Deposit amount in cash.
(d) If (i) any bankruptcy, insolvency, examinership, administration, reorganisation, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the issuer of the Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof), (ii) the rating of obligations of the issuer of any Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by Moody’s Investors Services or Standard & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or

	  	6	  	ARTICLE 4
SECURITY DEPOSIT	

(iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall within three (3) Business Days of receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Section 4.6 or deposit with Lessor cash in the amount of the Security Deposit.
(e) Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.

	  	7	  	ARTICLE 4
SECURITY DEPOSIT	

5.	PAYMENTS	
5.1. Account . All payments of Rent, Security Deposit and in respect of Maintenance Reserves shall be made by Lessee to Lessor’s bank account identified in Appendix 2B, Section 3 or to such other account designated in writing by Lessor not less than two (2) Business Days prior to the due date of any relevant payment. Lessee shall, together with such payment, identify the institution from which such payment is being sent and refer to the make, model and Manufacturer’s serial number of the Aircraft, provided that the failure to do so shall not constitute Default hereunder.
5.2. Payments on Non-Business Days . When any payment under any Operative Document would otherwise be due to Lessor on a day that is not a Business Day, the due date for payment shall be the next succeeding Business Day.
5.3. Timing of Payments . Payments due under this Lease shall be made by Lessee for credit to Lessor not later than 11:00 A.M. New York time on the due date.
5.4. Late Payment . If Lessee fails to pay to Lessor any sum on its due date for payment under this Lease or any other Operative Document, including any payment of Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum from the due date up to the date of actual payment (including non-payment following the issuance of a judgment) at the Past Due Rate.
5.5. Calculation of Interest and Prorating of other Payments .
(a) All interest payable under this Lease or any other Operative Document shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
(b) All payments of a monthly nature under this Lease and any other Operative Document, including, but not limited to payments of Basic Rent and in respect of Maintenance Reserves, that accrue on a monthly basis and for which the payment due is for less than a complete month shall be pro rated on a daily basis based on a month consisting of thirty (30) days.
5.6. Payments in United States Dollars . All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. The specification of Dollars in this transaction is of the essence and Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transferred to Lessor under normal banking procedures does not yield the amount of Dollars owing to Lessor in respect of such payment. If Lessor receives an amount in respect of Lessee’s liability under this Lease or if such liability is converted into a claim, proof, judgment or order in a currency other than Dollars, Lessee will indemnify Lessor, on an After-Tax Basis, as an independent obligation against any loss arising out of or as a result of such receipt or conversion. If the amount received by Lessor, when converted into Dollars (at the market rate at which Lessor is able on the relevant date to purchase Dollars in New York with that other currency) is less than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor an amount in Dollars equal to the deficit. In addition, Lessee waives any right it may have in any jurisdiction to pay any amount due or to become due hereunder in a currency other than Dollars.
5.7. Retention of Certain Payments . Any amount referred to in any Operative Document which is payable to or retainable by Lessee shall not be paid to or retained by Lessee at any time when a Default or Event of Default shall have occurred and be continuing, but instead such amount shall be paid

	  	8	  	ARTICLE 5
PAYMENTS	

to or held by Lessor as additional security for Lessee’s Obligations to be held and applied in accordance with the provisions of this Lease. At such time as there shall not be continuing any Default or Event of Default, such amount shall be paid to Lessee to the extent not applied in accordance with the preceding sentence. Where Lessor would, but for this Section 5.7 or any similar provision, be obliged to make any payment to Lessee, Lessor may elect to make such payment but shall be entitled to deduct or withhold from such payment any amount then due and payable but unpaid by Lessee under or in respect of Lessee’s Obligations.
5.8. Application of Payments . Lessor may apply any payment received from Lessee under any Operative Document which is less than the full amount then due and owing to Lessor in respect of Lessee’s Obligations in such proportions, order and manner as Lessor may, in its reasonable discretion, determine (except where an Event of Default is continuing, in which event such determination may be made in Lessor’s absolute discretion), notwithstanding any designation or instruction for application that may have been made by Lessee.

	  	9	  	ARTICLE 5
PAYMENTS	

6.	AIRCRAFT SPECIFICATION; LESSEE INVOLVEMENT WITH SELLER	
6.1. Aircraft Specification . The Aircraft shall be delivered newly manufactured to Lessee by Lessor on the Delivery Date in the configuration set forth in the Detail Specification.
(a) Following execution of this Lease, Lessee may from time to time prior to Delivery request Agreed Options be incorporated into the Aircraft. Any Agreed Options are subject to Seller’s and, if applicable, any BFE vendor’s lead-time, engineering and manufacturing requirements and shall not cause a delay to the Scheduled Delivery Date. All BFE selected by Lessee for installation on the Aircraft shall first be approved by Lessor (which approval will not be unreasonably refused or delayed) and must be from Seller’s approved BFE vendors unless otherwise consented to by Lessor and Seller and provided the same is in compliance with Seller’s lead-time, engineering and manufacturing requirements and shall not cause a delay to the Scheduled Delivery Date. Lessee shall pay for the costs associated with any such Agreed Options in excess of the allowances set forth in and pursuant to Article 3 and Appendix 2B, Section 1.
(b) A summary listing of all such Agreed Options shall be attached to the Acceptance Certificate at Delivery.
 
6.2.	Lessee Involvement with Seller .	
(a) Lessee’s Inspection of Aircraft . During the course of manufacture and final assembly of the Aircraft and at Delivery, Lessee shall, at its own cost, risk and expense, have its own representative present to inspect the Aircraft and each Item of Equipment at the Seller’s premises and to ensure its conformity with the Detail Specification and the requirements of this Lease. Lessee shall be entitled to participate in all ground inspections and demonstration/acceptance flights conducted by or on behalf of Lessor with respect to the delivery of the Aircraft to Lessor. If Lessee’s inspections reveal that the Aircraft and/or any Item of Equipment does not comply with the Detail Specification, Lessor will (for its own behalf and at Lessee’s request) promptly cause the Seller to correct any such defects and make the Aircraft available for reinspection by Lessee. Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it conforms with the Detail Specification and meets the requirements of this Lease and specifically disclaims any reliance upon any representation or assurance by any reliance upon any representation or assurance by Lessor or any Affiliate of Lessor or any representative or agent thereof in making such determination. Lessee further acknowledges that any assumption that Lessor will cure any nonconformity of the Aircraft and/or any Item of Equipment, discovered, difficult of discovery, or undiscovered, is not reasonable unless both (x)   the nonconformity or possibility of nonconformity and (y) Lessor’s agreement to cure or cause the cure of such nonconformity are expressed in a written instrument signed by Lessor and Lessee delivered at or before the execution and delivery of the Acceptance Certificate and Lease Supplement, except as otherwise set forth herein. Except for any express commitment by Lessor to cure or cause the cure of any nonconformity evidenced by a written instrument of the type described in (y) above, including without limitation a list of discrepancies set forth as an attachment to the Acceptance Certificate, no Indemnitee will be liable for any failure of the Aircraft to conform with the requirements of this Lease at the time of acceptance of the Aircraft by Lessee.
(b) Participation Agreement . Lessee’s rights under the preceding clause (a) shall be exercised pursuant to the terms of the Participation Agreement to be entered into as of the date of this Lease.

	  	10	  	ARTICLE 6
AIRCRAFT SPECIFICATION; LESSEE
INVOLVEMENT WITH SELLER	

(c) Compliance . Lessee’s representative designated under this Section 6.2 shall comply with Seller’s occupational health and safety and security requirements as the same are advised by Lessor or any party acting by or through Lessor, in writing, and shall not unreasonably interfere with Seller’s, Lessor’s, CIT Leasing’s or, if applicable, Owner’s performance of their respective obligations in connection with the manufacture and delivery of the Aircraft while at Seller’s premises.

	  	11	  	ARTICLE 6
AIRCRAFT SPECIFICATION; LESSEE
INVOLVEMENT WITH SELLER	

7.	CONDITIONS PRECEDENT TO DELIVERY	
7.1. Conditions Precedent .
(a) Lessor’s obligation to deliver and lease the Aircraft to Lessee is subject to:
 
 	(i)	no Event of Loss having occurred with respect to the Aircraft;	
 
 	(ii)	no Default or Event of Default having occurred and be continuing;	
 
 	(iii)	there having been no material adverse change to the financial condition of Lessee from the date of execution of this Lease to the Delivery Date which would adversely affect Lessee’s ability to perform its Obligations;	
 
 	(iv)	Seller having tendered the Aircraft for purchase by Lessor under the purchase agreement for the same, after having consented to the assignment of the same by CIT Leasing to Lessor with respect to the Aircraft, in accordance with the Detail Specification and otherwise in the condition required for delivery thereunder; and	
 
 	(v)	the receipt by Lessor of each item identified in Appendix 6A by the date required for such item appearing therein.	
(b) Lessee’s obligation to take delivery and lease the Aircraft from Lessor is subject to:
 
 	(i)	the Aircraft being in compliance with the Detail Specification and otherwise in the condition required for delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft; and	
 
 	(iii)	the receipt by Lessee of each item identified in Appendix 6B by the date required for such item appearing therein.	
7.2. Waiver or Deferral of Conditions Precedent . If any condition precedent specified in Section 7.1(a)(v) is not satisfied before Delivery, Lessor may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessor may determine and notify to Lessee in writing. If any condition precedent specified in Section 7.1(b)(iii) is not satisfied before Delivery, Lessee may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessee may determine and notify to Lessor in writing.

	  	12	  	ARTICLE 7
CONDITIONS PRECEDENT TO DELIVERY	

8.	DELIVERY; TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	
8.1. Delivery Location and Timing . Lessor shall deliver the Aircraft in the condition required by this Lease to Lessee and Lessee shall accept the Aircraft when properly tendered under this Lease on the Delivery Date at the Delivery Location. Delivery of the Aircraft to Lessee under this Lease shall occur immediately upon delivery of the Aircraft to Lessor by the Seller in the condition required hereunder, whereupon the Lease Term shall commence. Promptly following receipt of any notice from Seller, Lessor shall promptly notify Lessee in writing of the exact date when Delivery is expected to occur.
8.2. Delivery Subject to Seller Delivery . Delivery of the Aircraft is subject to and expressly conditioned upon delivery of the Aircraft by Seller to Lessor. Lessor shall not be liable or responsible to Lessee for and Lessee hereby expressly waives any right to any Claims against any Indemnitee arising or the exercise of any remedies from or in connection with any delay by Seller in the delivery of, or failure to deliver, the Aircraft to Lessee under this Lease, and Lessee shall not be released from its Obligation to take delivery of the Aircraft under this Lease as a result of any such delay except in accordance with Section 8.3; provided that the foregoing release and waiver by Lessee shall not apply with respect to any Claims solely and directly attributable to Lessor’s or CIT Leasing’s wilful misconduct.
8.3. Termination for Delay . If (x) the Scheduled Delivery Date is scheduled or rescheduled by Seller to a date that will cause Delivery to be delayed after the Outside Delivery Date, or (y) Lessor notifies Lessee that Lessor has received written notice from Seller that a delay is anticipated by Seller that will cause Delivery to be delayed to a date after the Outside Delivery Date, then by written notice given within ten (10) Business Days after the first to occur of (i) Lessee’s receipt of such Lessor notice or (ii) the Outside Delivery Date, either party may by written notice to the other terminate this Lease and this Lease will terminate on the date of receipt of such notice by the non-notifying party. In the event of such termination, neither party will have any further liability to the other party except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent. If such termination notice is not given within such ten (10) day period, each of Lessee and Lessor shall have waived their right to terminate this Lease for delay under this Section 8.3 and, subject to Lessor’s agreement with Seller to a revised Scheduled Delivery Date (which shall be binding upon Lessee), this Lease shall remain in full force and effect, the Aircraft shall be delivered to Lessee in accordance with the terms of this Lease on the revised Scheduled Delivery Date.
8.4. Seller’s Right to Terminate . Lessee’s rights under Section 8.3 are subject and subordinate to any rights that Seller may have under its purchase agreement with CIT Leasing in connection with a delay in delivery of the Aircraft to Lessor that occurs or is anticipated to occur after the Outside Delivery Date. If Seller exercises any right it may have to terminate Lessor’s (or, as applicable, CIT Leasing’s) right to purchase the Aircraft on account of any such delay, Lessor shall advise Lessee of such termination and this Lease shall automatically terminate and Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.5. Event of Loss to Aircraft Prior to Delivery . If an Event of Loss with respect to the Aircraft occurs prior to Delivery, Lessor will notify Lessee promptly following receipt of notice from the Seller and this Lease shall automatically terminate whereupon neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.6. Lessee Acceptance of Aircraft . If Lessee fails to (x) comply with the conditions contained in this Lease so as to allow Delivery to take place immediately following delivery of the

	  	13	  	ARTICLE 8
DELIVERY	

Aircraft by Seller to Lessor or (y) take delivery of the Aircraft when properly tendered for delivery by Lessor in the condition required under this Lease, Lessee will be liable for and shall indemnify Lessor for all documented, out-of-pocket costs and expenses reasonably incurred by Lessor as a result thereof including (but without limitation) any payments (other than the purchase price) which Lessor becomes obliged to make to Seller.
8.7. Risk of Loss to Aircraft following Delivery . Upon Delivery, risk of loss or damage to the Aircraft shall pass to Lessee for the Lease Term (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
8.8. Waiver of Remedies for Delay in Delivery . Lessor shall not be liable to Lessee for any delay or failure in Delivery to Lessee which is an Excusable Delay. Pursuant to Section 10.3, Lessee’s only rights or remedies for a delay in delivery, or anticipated delay in delivery, of the Aircraft not caused or occasioned by a Default of Event of Default of Lessee are those rights and remedies provided for in this Article 8 and Section 10.3.

	  	14	  	ARTICLE 8
DELIVERY	

9.	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	
9.1. Lessee’s Representations and Warranties . Lessee represents and warrants to Lessor that:
(a) Lessee is a company duly organised and validly existing under the laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted.
(b) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto such Operative Documents will constitute the valid and legally binding and enforceable obligations of Lessee (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization and other laws affecting the rights of creditors generally).
(c) The execution and delivery of, the performance of its Obligations under, and compliance by Lessee with the provisions of, the Operative Documents will not (i) contravene any existing applicable law of its State of Organisation or the State of Registration (or federal and other divisional governmental laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessee is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of its constitutional and/or organisational documents or (iv) result in the creation or imposition of, or oblige it to create, any Lien over its undertaking or any of its material assets, rights or revenues.
(d) Lessee is not in default under any material agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceeding is taking place or, to its knowledge, after reasonable inquiry, pending or threatened against Lessee which would have or could reasonably be expected to have a material adverse effect on its ability to perform its Obligations.
(e) The audited annual financial statements of Lessee for each financial year are certified by independent auditors and, as most recently delivered to Lessor, have been prepared in accordance with GAAP and fairly present the financial position of Lessee as at such date and the results of the operations of Lessee for the financial year ended on the date set forth therein and there has, to the knowledge of Lessee, after reasonable inquiry, been no material adverse change in the financial condition of Lessee since publication of such financial statements, except as otherwise previously disclosed to Lessor in writing.
(f) Other than making a filing in respect of this Lease in the State of Registration with the Aeronautics Authority and with the IR and the filing and registration in respect of the pledge under Mexican Law with the appropriate Governmental Authorities pursuant to Sections 4.2 and 13.3(a)(i), it is not necessary, in order to ensure the legality, validity, enforceability or admissibility in evidence of any Operative Document, that such Operative Document or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid in relation to any of the Operative Documents.

	  	15	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(g) Lessee has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which it is a party, the validity and enforceability hereof and thereof and the compliance, satisfaction or performance by Lessee with or of all monetary and other Obligations hereunder and thereunder and all such authorisations are, or prior to the Delivery Date will be, valid and in full force and effect.
(h) The choice by Lessee of New York law to govern the Operative Documents and the submission by Lessee to the jurisdiction of the New York courts is valid and binding on Lessee.
(i) In any proceedings taken in any jurisdiction in relation to any of the Operative Documents, Lessee will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(j) Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing or navigation fees or charges in respect of the Aircraft or any other aircraft owned by or leased to or operated by it, which if unpaid are reasonably likely to result in the imposition of a Lien on the Aircraft.
(k) Lessee has fully disclosed to Lessor all facts of which it has knowledge which in Lessee’s reasonable belief are material for disclosure to Lessor in the context of this Lease, Lessee knows of no material facts that would render any information previously furnished by or on behalf of Lessee to Lessor inaccurate or misleading in any material respect.
(l) No Default or Event of Default has occurred and is continuing.
(m) Lessee is solvent and able to pay its debts as the same fall due and the transactions contemplated by the Operative Documents are of commercial benefit to it and in its commercial interests.
(n) With respect to Taxes:
(i) Lessee has duly filed all Tax returns that it is required by applicable Laws to file, has duly paid all Taxes stated to be due and payable in such Tax returns and has duly paid all Taxes stated to be due in any demand for payment or similar communication issued by any taxing authority to Lessee other than:
(A) Taxes (1) which are being contested in good faith by appropriate proceedings in accordance with applicable Law, (2) for which adequate reserves are maintained in accordance with GAAP, and (3) the contest of which does not involve any risk of imposition of any criminal penalty on any Indemnitee or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(B) Tax returns, the non-filing of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the

	  	16	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

imposition any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein; and
(C) Taxes, the non-payment of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of or the imposition of any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(ii) no Tax imposed by any Governmental Authority or other taxing authority of or having jurisdiction in, Lessee’s State of Organisation or the State of Registration is (or, subject to any change in law after the Delivery Date, will be) (A) required to be paid by Lessor as a result of the execution, delivery, performance or enforcement of, or the transactions and activities provided for or contemplated in, the Operative Documents, or (B) required to be deducted or withheld from or with respect to any amount payable by Lessee to Lessor under any Operative Document; and
(iii) Lessor is not (and, subject to any change in law after the Delivery Date, will not be) required to give any notice to, make any registration with, or file any document or information with, any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration with respect to Taxes solely by reason of the execution, delivery, performance or enforcement of the Operative Documents.
9.2. Application of Representations and Warranties; Survival . Each representation and warranty set out in Section 9.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft.
9.3. Lessee’s General Covenants . Lessee covenants to Lessor that it will:
(a) preserve and maintain (i) its corporate existence and (ii) all of its material rights, privileges and franchises in every jurisdiction in which the character of the property owned or the nature of the business transacted by it makes licensing or qualification necessary;
(b) pay or cause to be paid (i) all Taxes required by applicable Laws to be paid by it (whether such Taxes are imposed upon it or upon its income and profits or upon any property belonging to it or otherwise) prior to the date on which any penalty accrues, except Taxes described in sub-clause (A), (B) or (C) of Section 9.1(n)(i), and (ii) all other lawful claims which, if not paid, are reasonably likely to result in the imposition of a Lien upon its property or upon the Aircraft or any part thereof;
(c) remain duly qualified to operate the Aircraft under applicable Law;
(d) maintain in full force and effect all governmental consents, licenses, authorisations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to timely obtain or effect any new or additional governmental consents, licenses, authorisations, approvals, declarations, filings or registrations as may become necessary for Lessee’s performance of its Obligations;

	  	17	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(e) not consolidate with, merge with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person, provided that Lessee may do so if Lessee establishes to the reasonable satisfaction of Lessor that such merger, conveyance, transfer or lease will not have a materially adverse effect on Lessee’s ability to perform its Obligations and that the surviving entity will assume all Obligations, unless (i) in the case of a merger or consolidation, the surviving entity of such merger or consolidation is Lessee or an entity which (x) is a certificated air carrier or parent thereof and (y) after giving effect to such merger or consolidation has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation and which has agreed in writing satisfactory to Lessor, to assume and perform all Obligations of Lessee hereunder, and such merger or consolidation will not have a materially adverse effect on the ability of the surviving entity to perform such Obligations; or, (ii) in the case of a transfer or lease, such transfer or lease will not have a materially adverse effect on Lessee or its ability to perform its Obligations hereunder;
(f) notify Lessor of any change to Lessee’s registered office, principal place of business or chief executive office if there is more than one place of business not more than thirty (30) days following such change;
(g) not (i) voluntarily suspend its certificated operations of the Aircraft or its fleet other than by reason of a merger or consolidation not otherwise prohibited by sub-clause (e) above; or (ii) permit to be revoked, canceled or otherwise terminated, whether by act or omission, all or substantially all of the material franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof, where such revocation, suspension or termination will have or could be deemed to have a material adverse effect on Lessee’s ability to perform its Obligations;
(h) pay promptly when due all navigation and en-route charges and all other charges payable by Lessee for the use of or services provided at any airport, whether in respect of the Aircraft or any other aircraft in Lessee’s fleet where the failure to pay the same could reasonably be expected to (i) result in a Lien upon the Aircraft, except to the extent being contested in accordance with applicable law and in respect of which contest Lessee has taken adequate reserves in accordance with GAAP, provided such contest would not give rise to any material likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of Lessor or any Financing Party, and/or (ii) materially and adversely effect Lessee’s ability to perform its Obligations hereunder;
(i) not represent or hold out Owner, Lessor (if not Owner), any Financing Party or any Affiliate of the foregoing as carrying goods or passengers on the Aircraft or being in any way connected to operation of the Aircraft; and
(j) if any items delivered to Lessor in connection with this Lease are required by this Lease to have a validity and effectiveness for the Lease Term, but have or are of a duration or effectiveness that is for less than the Lease Term when originally delivered, Lessee shall cause replacements, extensions or supplements thereof to be timely delivered to Lessor during the Lease Term to ensure that Lessor maintains at all times during the Lease Term the benefits initially afforded by such items and the continued effectiveness and validity of the same for the Lease Term.

	  	18	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

10.	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	
10.1. General Representations and Warranties of Lessor . Lessor represents and warrants to Lessee that:
(a) Lessor is a company duly organised and validly existing under the laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted;
(b) Lessor has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto the Operative Documents to which it is a party will constitute its valid and legally binding and enforceable obligations;
(c) the execution and delivery of, the performance of its obligations under, and compliance by Lessor with the provisions of, the Operative Documents to which it is a party will not (i) contravene any existing applicable law of its State of Organisation (or federal and other divisional governmental laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessor is a party or is subject or by which it or any of its property is bound, or (iii) contravene or conflict with any provision of its constitutional and/or organisational documents;
(d) Lessor has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which Lessor is a party and the validity and enforceability hereof and thereof;
(e) each representation set forth in this Section 10.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft;
(f) on and as of Delivery, Lessor shall have the right to lease the Aircraft to Lessee and there is no actual, or to Lessor’s knowledge, after reasonable inquiry, pending or threatened litigation to prevent or prohibit Lessor from entering into and performing its obligations under the Operative Documents to which it is a party or otherwise affecting the Aircraft or Lessor’s rights, title and interest in and to the Lease;
(g) Lessor is solvent and able to pay its debts as the same fall due;
(h) to Lessor’s knowledge, after due inquiry, no motion has been filed or is otherwise pending before the United States Bankruptcy Court for the Southern District of New York (the “ Court ”) in the chapter 11 proceedings of CIT Group Inc. and CIT Group Funding Company of Delaware LLC (collectively, the “ Debtors ”) under Case No. 09-16565 (ALG) (the “ Proceedings ”) seeking to (i) bring Lessor or CIT Leasing into such Proceedings or which could reasonably be expected to adversely affect Lessee’s rights under the Lease or (ii) recover any funds held by Lessor, or by any other Person on behalf of Lessor, as deposits or reserves; and

	  	19	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

(i) no order of the Court nor approval of or assumption by either of Debtors, or any trustee, of or with respect to the Lease and/or the other Operative Documents is required in connection with the Proceedings.
10.2. Covenant of Quiet Enjoyment .
(a) Notwithstanding the effect of any provision in the Cape Town Convention to the contrary, which by the terms of the Cape Town Convention may be derogated from or varied, Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the Aircraft without interference by Lessor or by any Person lawfully claiming by or through Lessor. The lawful exercise by Lessor of its rights under any Operative Document in conformity with the terms and conditions of such Operative Document shall not constitute a breach of this Section 10.2.
(b) Lessor shall procure that Owner (if Lessor is not the Owner) of the Aircraft and any Financing Party shall give an undertaking to Lessee on terms substantially in the form set out in Appendix 8.
10.3. Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies .
(a) LESSEE AGREES THAT, AS BETWEEN ITSELF AND THE INDEMNITEES, IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS, WHERE-IS”. LESSEE ACKNOWLEDGES AND AGREES THAT NO INDEMNITEE HAS, OR SHALL BE DEEMED TO HAVE MADE, (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, FOR ITSELF AND FOR EACH INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE OR CAPABLE OF DISCOVERY, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, FOR (i) ANY L1ABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ITEM OF EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii)

	  	20	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF LESSOR) OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT.
(b) LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY THE SELLER AND, AS APPLICABLE, EACH MANUFACTURER. LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT (i) NO INDEMNITEE IS A SELLER, MANUFACTURER, REPAIRER OR PERSON MANAGING, DIRECTING OR PERFORMING SUCH SERVICES OF THE AIRCRAFT AND (ii) THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.
(c) IN CONSIDERATION OF (i) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY AND ALL ASSIGNABLE WARRANTIES OF ALL MANUFACTURERS, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE UNDER APPLICABLE LAW. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
(d) DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.

	  	21	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

(e) LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, (X)  ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND (Y) ON ACCOUNT OF ANY REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE COVENANT OR PROMISE RUNS. LESSEE AGREES THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS, AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT AND LESSEE HEREBY WAIVES ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER ARTICLE 2A (UNIFORM COMMERCIAL CODE—LEASES) OF THE NEW YORK UNIFORM COMMERCIAL CODE OR OTHERWISE IN RESPECT OF SUCH BREACH.
10.4. Disclaimer and Waiver of Incidental, Consequential, Special and Punitive Damages. EACH OF LESSEE AND LESSOR (EXCEPT IN RESPECT OF LESSOR AS OTHERWISE SET FORTH HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT) AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES, AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR IN THE CASE OF LESSOR, EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 24, ANTICIPATED PROFITS AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF SUCH OTHER PARTY CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS.
10.5. No Duty of Indemnitees to Inspect, etc. NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE ORGANISATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT PERFORMED DURING THE LEASE TERM.

	  	22	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

11.	GENERAL OPERATION OF THE AIRCRAFT	
11.1. General Operation . Lessee will:
(a) comply with the Law in any country or jurisdiction which may for the time being be applicable to the Aircraft and its use, maintenance and operation, including but not limited to the holding of all certificates, licenses, permits, authorisations and regulations, and take all reasonable steps to ensure that the Aircraft is not used for any illegal purpose;
(b) not use any Item of Equipment in any manner contrary to:
(i) any Manufacturer’s operating manuals or published instructions, or in violation of any airworthiness certificate or registration relating thereto; or
(ii) any published recommendation of the Manufacturer of such Item of Equipment or regulation of the Aeronautics Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) ensure that all personnel directly or indirectly employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aeronautics Authority and applicable Law;
(d) use the Aircraft solely in commercial passenger and cargo ( provided such cargo is carried exclusively in the cargo compartments of the Aircraft) operations for which Lessee is duly authorised by the Aeronautics Authority and under applicable Law and, without prejudice to Lessee’s rights under Section 15.2 hereof, principally from one or more bases located within the State of Registration or Lessee’s State of Organisation (or such other location as Lessor may approve in writing from time to time, such approval not to be unreasonably withheld);
(e) not utilise the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other similar model aircraft within Lessee’s fleet of aircraft; and
(f) obtain and maintain in full force and effect all certificates, licenses, permits and authorisations required for the making of payments required by, and the compliance by Lessee with its other Obligations under, this Lease.
11.2. Insured Operations . Lessee will not use or locate or permit the Aircraft or any Item of Equipment to be used or located in any manner, for any purpose or at any location which is not covered by the insurance policies and the scope of coverage Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit the coverage provided under any such insurance policy or coverage provided thereunder.
11.3. Carriage of Goods . Lessee shall not use the Aircraft for the carriage of:
(a) whole animals living or dead except in compliance with I.A.T.A. regulations;
(b) cargo to the extent forbidden pursuant to Section 2 (Limitations) of the I.A.T.A. Dangerous Goods Regulations, as revised, from time to time;

	  	23	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(c) nuclear fuels or waste, illegal drugs, controlled substances or the like or any other goods, materials or items of cargo which are prohibited by Law; or
(d) any other cargo which, whether due to size, content or packaging, (i) could reasonably be expected to cause damage to the Aircraft or (ii) the carriage of which might cause damage that would not be adequately covered by insurance.
11.4. Operational Expenses . Lessee shall pay or procure payment of all expenses incurred in the operation of the Aircraft during the Lease Term including, without limitation, expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, landing and navigation fees, airport charges, passenger service and any and all other expenses or claims of any kind or nature incurred during the Lease Term, arising directly or indirectly in connection with or related to the use, movement, operation, storage or location of the Aircraft or any Item of Equipment. The obligations of Lessee under this Section 11.4 arising prior to any cancellation, termination or expiration of the Lease Term shall continue in full force and effect, notwithstanding such cancellation or termination (whether arising out of an Event of Default or otherwise) or expiration, and shall be enforceable by Lessor. Nothing herein shall be deemed to prevent Lessee from contesting any such expenses by appropriate proceedings, provided that no such contest shall give rise to any reasonable likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of any Indemnitee.
11.5. Compliance with Laws . Lessee will:
(a) not cause or permit the Aircraft to proceed to, or remain at, any location to the extent then prohibited by applicable Law by any Governmental Authority of the State of Registration or Lessee’s, Lessor’s or Owner’s State of Organisation or any Governmental Authority of the country in which such location is situated, except under exigent circumstances, when necessary to safeguard the Aircraft or the lives and well-being of passengers and crew, provided that the Aircraft is promptly removed from such location upon cessation of such exigent circumstances; and
(b) not use or permit the use of the Aircraft or any Item of Equipment with, for or on behalf of any Person:
(i) whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in effect during the Lease Term);
(ii) in violation of the United States Bank Secrecy Act, as amended, or any applicable regulations thereunder;
(iii) in violation of any of the sanctions programs administered by the Office of Foreign Assets Control of the United States Department of Treasury (“ OFAC ”), any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency, or any enabling legislation or executive order relating thereto ( ref : www.ustreas.gov/offices/enforcement/ofac/ );

	  	24	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(iv) on the list of “Specially Designated Nationals” and “Blocked Persons” or prohibited under any OFAC regulation or executive order, as the same are amended from time to time;
(v) in violation of a United Nations sanction or whose assets have been frozen by enabling legislation of the same in the State of Registration or Lessee’s State of Organisation; or
(vi) in violation of any Laws similar to or consistent with the foregoing clauses (i) through (v) as the same are enacted in the Lessee’s State of Organisation or the State of Registration;
as any or all of the same are amended or supplemented from time to time, and including any successor Laws as the same are enacted from time to time.
11.6. Lessee’s Covenants Regarding Use of the Aircraft . Lessee covenants to Lessor that it will procure that (x) in each calendar year that begins and ends during the Lease Term and (y) in the case of the calendar year that includes the Delivery Date, during the part of such calendar year that begins on the Delivery Date and (z) in the case of the calendar year that includes the Termination Date, during the part of such calendar year that ends on the Termination Date:
(a) either:
(i) the Aircraft will be located outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii) more than fifty percent (50%) of the miles traversed in the use of the Aircraft will be outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof),
provided that the Aircraft will be deemed to be in the U.S.A. at all times during which it is engaged in transport between the U.S.A. and Puerto Rico or between two points in the U.S.A. or between two points in Puerto Rico; and
(b) either:
(i) the Aircraft will be located outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty per cent (50%) of the time, or
(ii) more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof); and
(c) the Aircraft will not be used, pursuant to any sublease, wet lease, charter, or otherwise, by any Person that:
(i) has a State of Organisation in or whose State of Organisation is (A) Canada or (B) Puerto Rico or the U.S.A. or

	  	25	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(ii) is resident or principally based in (A) Canada or (B) Puerto Rico or the U.S.A. or
(iii) has any right under any sublease, wet lease, charter or other agreement to use (or to permit or suffer any other Person to use) the Aircraft or any part thereof in a manner which is reasonably likely to result in a breach of any covenant of Lessee in this Section 11.6,
except that the Aircraft may be wet leased to a Person described in subclause (i)(B) or (ii)(B) provided that such Person will not have the right to use the Aircraft for more than a total of ninety (90) days in any calendar year, and Lessee provides Lessor written notice of such wet lease within ten (10) days after the date on which such wet lease is executed. For purposes of this Section 11.6(c), the term “wet lease” shall have the same meaning as the term Wet Lease except that it may include a “wet lease” of the Aircraft by a Permitted Sublessee (and in such case references to Lessee appearing in the definition of the term Wet Lease shall be deemed to refer to such Permitted Sublessee).
11.7. Certain Tax Matters . If, after the Delivery Date, an amendment to Section 954 of the United States Internal Revenue Code of 1986, as amended (the “ U.S. Tax Code ”), is enacted or an amendment to the Treasury Regulations under Section 954 of the U.S. Tax Code is promulgated as a final regulation and if independent tax counsel engaged by Lessee and reasonably acceptable to Lessor delivers to Lessee and Lessor a written opinion to the effect that due to such amendment, Rent payable by Lessee pursuant to this Lease will be treated as “derived from leasing the Aircraft in foreign commerce” within the meaning of Section 954(c)(2)(A) of the U.S. Tax Code even if Lessee does not comply with its warranty and covenant in Section 11.6(a), then if requested by Lessee in writing and if no Event of Default shall have occurred and be continuing, Lessor will negotiate with Lessee in good faith with a view to amending Section 11.6 to reflect such amendment, provided that no such amendment shall give rise to a reasonable likelihood that any Indemnitee would incur any liability, loss, cost, expense or other adverse consequence that it would not have incurred in the absence of such amendment unless Lessee is required by this Lease or any other Operative Document to indemnify such Indemnitee therefor in a manner that is reasonably satisfactory to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee in connection with the negotiation, documentation, execution, delivery, filing or recording of any amendment requested by Lessee pursuant to this Section 11.7.

	  	26	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

12.	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	
12.1. General. Lessee, at its own expense, shall cause the Aircraft and each Item of Equipment to be serviced, repaired, overhauled, tested and maintained:
(a) in accordance with the Maintenance Program and the applicable Manufacturer’s Repair Manuals including, without limitation, the Manufacturer’s recommended corrosion prevention and control program for the Aircraft;
(b) so as to keep each such Item in as good operating condition and as necessary to maintain the value, utility and appearance of the Aircraft as when delivered to Lessee hereunder, reasonable wear and tear excepted;
(c) in compliance with Manufacturers’ service bulletins designated by such Manufacturer as either (x)   an Alert Service Bulletin or (y) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance during the Lease Term;
(d) in compliance with all other Manufacturer’s service bulletins which require compliance in order to maintain the validity of warranties assigned or otherwise provided to Lessee; and
(e) in compliance with all Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be accomplished in strict accordance with such AD. Notwithstanding the foregoing, compliance with any AD may be accomplished by the use of an alternate method of compliance, provided that such alternate method of compliance is approved by the EASA and the Aeronautics Authority, without limitation.
12.2. Accomplishment of Tasks and Repairs. Lessee shall cause, at its expense, all Tasks to be accomplished on the Aircraft as they become due, with no discrimination toward the Aircraft with respect to any maintenance accomplished on similar model aircraft within Lessee’s fleet of aircraft. To the extent that the Maintenance Program permits certain structural Tasks to be accomplished on a sampling basis, Lessee nevertheless shall accomplish on the Aircraft all such structural Tasks that, by the terms of such Tasks, are applicable to the Aircraft, provided , however , at Lessee’s option the accomplishment of such structural sampling Tasks may deferred during the Lease Term, but in any event all such structural sampling Tasks that have been deferred shall be accomplished by Lessee not later than during the Final Check. Any damage, defects or corrosion discovered during the Lease Term shall be repaired in accordance with the applicable Manufacturer’s Repair Manual approved procedures at the sole expense of Lessee, and Lessee shall obtain Required Approval with respect to any repairs or modifications accomplished during the Lease Term which have not been approved by the Manufacturer and the Certificating Authority in addition to any approval received by Lessee from the Aeronautics Authority with respect to any such repairs or modifications.
12.3. Information on Maintenance. Lessee, at its cost and expense, shall furnish Lessor, at such times during the Lease Term as Lessor shall reasonably request, copies of records maintained relating to the Aircraft.
12.4. Aircraft Documents in English Language. Lessee, at its cost and expense, shall maintain all Aircraft Documents in the English language, including Aircraft Documents required by the

	  	27	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

applicable Aeronautics Authority to be maintained in respect of each Item of Equipment, and promptly furnish to Lessor upon Lessor’s request such information as may be required to enable Lessor to file any reports required to be filed with any Governmental Authority because of Owner’s ownership of the Aircraft.
12.5. Originals. All Aircraft Documents, including records and documentation of maintenance accomplished on the Aircraft and any Item of Equipment shall be retained by Lessee until the Termination Date, at which time all records and Aircraft Documents shall be returned to Lessor in original (not duplicate) form. Notwithstanding the preceding sentence, Lessee may return any such Aircraft Documents in electronic form, except with respect to documentation of Airworthiness Directive accomplishments which must be in original form with the signature of the Person authorized to accomplish such, subject to the following:
(a) Lessee shall, unless already possessed by Lessor, provide Lessor with the software necessary to access such electronic documentation and the appropriate licenses for Lessor and any other owner or operator to use such software;
(b) Lessee shall provide Lessor with the appropriate excerpts from Lessee’s operations or procedures manuals (in English), approved by the Aeronautics Authority, specifying the procedures to be adhered to by Lessee in the use of such form of electronic documentation in place of original documents; and
(c) Lessee shall provide certification by Lessee’s Director of Quality Assurance that the electronic documentation was maintained in accordance with the Aeronautics Authority approved procedures as set forth in clause (b) above.
12.6. Performance of Maintenance. A ll Maintenance Checks, including the Final Check, shall be accomplished only at Approved Maintenance Organisations which shall be approved by Lessor, acting reasonably, in writing prior to the commencement of such Maintenance Check, such approval not to be unreasonably withheld. All other maintenance on the Aircraft will be performed by Lessee using personnel that are approved and appropriately certified by the Aeronautics Authority to perform such maintenance. Notwithstanding the preceding, at any time during the Lease Term, Lessee may provide Lessor with a list of Approved Maintenance Organisations that Lessee plans to use, and unless Lessor notifies Lessee in writing of its objection to any such Approved Maintenance Organisation at least thirty (30) days prior to the commencement of any Maintenance Check, such Maintenance Check may nevertheless be accomplished at such Approved Maintenance Organisation objected to by Lessor and such Approved Maintenance Organisation shall be deemed to be approved by Lessor for the accomplishment of such Maintenance Check, but otherwise such Approved Maintenance Organisation objected to by Lessor shall no longer be deemed to be approved.
12.7. Alterations, Modifications and Additions.
(a) Required Alterations, Modifications and Additions . Lessee, at its own cost and expense, shall make such alterations, modifications and additions to the Aircraft and any Items of Equipment as may be required from time to time to comply with:
(i) all Manufacturers’ service bulletins designated by such Manufacturer as either (x) an Alert Service Bulletin or (y) a mandatory service bulletin, either of which by their terms (1) is applicable to the respective Item of Equipment and (2) specify compliance during the Lease Term;

	  	28	  	ARTICLE 12
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OPERATION OF THE AIRCRAFT	

(ii) Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be performed in strict accordance with such AD and without application or utilisation of any alternate method of compliance; and
(iii) all Laws and regulations of the Aeronautics Authority which require compliance during the Lease Term.
(b) Discretionary Alterations, Modifications and Additions .
(i) Except as set forth in the preceding clause (a) or the following clause (ii), Lessee shall not make any alteration, modification or addition to the Aircraft or any Item of Equipment (including, but not limited to, galleys, lavatories, avionics or Engines) without the prior written consent of Lessor, which consent shall not be unreasonably withheld and shall be deemed given in the absence of a response within ten (10) Business Days following Lessor’s receipt of Lessee’s written request.
(ii) Notwithstanding the provisions of the preceding clause (i), Lessor’s consent shall not be required for any discretionary alteration, modification or addition that Lessee wishes to perform to the Aircraft provided that any such alteration, modification or addition does not require or result in a modification to the Aircraft structure or electrical wiring system, and is:
(A) for the installation of additional or enhanced Items of Equipment (and not in substitution for the same, unless replacing a Part with another Part that is of a higher modification status); or
(B) is cosmetic (and non-structural) in nature in order for Lessee to display its name, logo or other identification or advertising; or
(C) to the Aircraft interior configuration that (1) utilises the existing seat track system (without modification), (2) does not require the addition to, removal of or modification of any Aircraft structure, (3) does not impair the value or utility of the Aircraft or any Item of Equipment or adversely affect compliance with the type certificate data sheet of the Aircraft, and (4) does not cause any change in the category or status of the Aircraft as defined by the Manufacturer.
(c) Removed Items – Title and Risk of Loss . Subject to the provisions of Sections 12.8 and 12.9, title to any and all Items of Equipment removed from the Aircraft shall remain with Owner and risk of loss or damage to the same shall remain with Lessee during the Lease Term and Lessee shall keep, store and maintain the same in accordance with Manufacturer’s published procedures or written recommendations of the Manufacturer and standard industry practice (including the issuance of a Certificating Authority Form at the time of removal) for subsequent reinstallation or, at Lessor’s option, return to Lessor on the Termination Date.
(d) De-Modification of Aircraft . Subject to the provisions of Sections 12.8 and 12.9, at Lessor’s option (unless otherwise agreed in writing by Lessor and Lessee), Lessee shall, in connection with Return, de-modify and restore the Aircraft to the condition and configuration

	  	29	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

it was in prior to the accomplishment of any alteration’s, modifications or additions performed in accordance with this Section 12.7, assuming such condition was in compliance with the terms of this Lease, notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i), if the same is provided, or otherwise.
12.8. Replacement of Parts. Lessee, at its own cost and expense, shall promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall as promptly as practicable either reinstall such Part or replace such Part pursuant to the terms of this Article 12. Each replacement part prior to installation in the Aircraft or any Item of Equipment:
(a) shall be free and clear of all Liens (other than Permitted Liens);
(b) shall be in as good operating condition and shall have a value, utility, maintenance, modification and repair status at least equal to the Part replaced, assuming such replaced Part was in the condition and repair required to be maintained by the terms hereof;
(c) shall have documentation evidencing compliance with all applicable Certificating Authority and Aeronautics Authority requirements, including, without limitation (but to the extent applicable):
(i) a Certificating Authority Form and, if not indicated on such form, a teardown report indicating time since Overhaul and a description of work accomplished with respect to such part by an Approved Maintenance Organisation;
(ii) Overhaul records with respect to Parts replacing Time Controlled Parts;
(iii) documentation of modification status and compliance with Airworthiness Directives; and
(iv) any other appropriate documentation applicable to the maintenance and repair status of such part; and
(d) shall:
(i) have the same part number and be of the same Manufacturer as the replaced Part (an “ OEM Part ”), except (x) to the extent the Manufacturer has superseded the part number of such OEM Part, and in such an event the superseding part number shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual or a Required Approval or (y) if such OEM Part is no longer commercially available, an equivalent part with a different part number or from a different manufacturer shall be acceptable, and (z) non-OEM Parts manufactured by alternate manufacturers may be used to replace cosmetic items and standard hardware in the passenger cabin of the Aircraft, provided , however , each of sub-clauses (y) and (z) herein with respect to such equivalent parts or non-OEM Parts shall be subject to the approval of both the Airframe Manufacturer and the EASA for installation of such parts on the Aircraft;

	  	30	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(ii) with respect to Time Controlled Parts, have not accumulated more time since new (and time since Overhaul if such replaced Part has previously been Overhauled) than that of the replaced Part.
12.9. Title to Parts.
(a) Parts Replacement in Connection with Maintenance . Any Part removed from the Airframe or any Item of Equipment shall remain the property of Owner and subject to this Lease, no matter where located, until such time as such Part shall be replaced by a part which has been incorporated or installed in or attached to the Aircraft or an Item of Equipment pursuant to the requirements for replacement parts specified in Section 12.8 and title to such replacement part has been vested in Owner. Except as set forth in Section 12.10, immediately upon any replacement part becoming incorporated, installed or attached to the Aircraft or an Item of Equipment as provided above, such part shall become the property of Owner, title to such replacement part shall immediately vest in Owner and such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. Once the replacement part has become subject to this Lease, title to the Part so replaced shall immediately vest in Lessee.
(b) Parts Replacement in Connection with Discretionary Alterations, etc. So long as no Default or Event of Default shall have occurred and be continuing, at any time during the Lease Term, Lessee may remove any Part from an Item of Equipment that was installed pursuant to Lessee’s accomplishment of an alteration, modification or addition pursuant to Section 12.7(b), provided that:
(i) such Part is in addition to and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to such Item at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part;
(ii) such Part is not required to be incorporated or installed in or attached or added to such Item pursuant to the terms hereof;
(iii) such Part can be removed from such Item without diminishing or impairing the value, utility or airworthiness which such Item would have had at such time had such alteration, modification or addition not occurred; and
(iv) such Part is not required to be installed on or attached to such Item of Equipment by the Aeronautics Authority or the Certificating Authority in order to maintain the airworthiness certification of the Aircraft for passenger operation.
Upon removal of any such Parts, Lessee shall restore the area where such Part was removed so that it is in the condition it would have been had such Part not been installed, assuming such condition was in compliance with the terms of this Lease, and so that such removal is undetectable. Title to any Part not removed by Lessee as above provided prior to the return of the respective Item of Equipment to Lessor hereunder shall remain with Owner.

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MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

12.10. Temporary Replacement of Parts . Provided no Event of Default has occurred and is continuing, at any time during the Lease Term, any Part incorporated or installed in or attached or added to any Item of Equipment may be replaced temporarily with a part which does not satisfy the requirements of Section 12.8; provided that:
(a) there shall not have been readily or economically available to Lessee at the time and in the place that such substitute or replacement part was required to be installed on the Airframe or Engine a replacement part complying with the requirements of Section 12.8;
(b) it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee as an airline (as determined by Lessee) to have grounded the Aircraft until such time as a replacement part complying with the requirements of Section 12.8 became available for installation on the Aircraft;
(c) as soon as practicable after installation of the same on the Airframe or Engine (and in any event no later than the earliest to occur of (i) the first C-Check following such installation, (ii) the Scheduled Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the requirements of Section 12.8 and replace the same with a part complying with such requirements.
Upon the replacement by Lessee of any such non-conforming part pursuant to the foregoing clause (c), title to such replacement part shall, without further act, vest in Owner and such part shall be deemed a Part hereunder.
12.11. Exchanging Parts . Any Part removed from the Aircraft or any Item of Equipment in the course of performance of maintenance on the same may be subjected by Lessee to normal exchanges customary in the airline industry in the ordinary course of Lessee’s business provided that (x) the parts replacing such removed Parts are incorporated, installed in or attached to the Aircraft or such Item of Equipment promptly following the removal of such Parts, and (y) all applicable requirements of the Aeronautics Authority and the Certificating Authority shall be adhered to with respect to all such Parts being incorporated, installed, or attached, whether or not such Part was originally removed from the Aircraft or any Item of Equipment or is a replacement for any such removed Part. Lessee shall, whether or not such exchanged part is owned by Lessee at the time such exchange is completed, comply or ensure the continued compliance with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to installation of the same into the Aircraft or any Item of Equipment.
12.12. Temporary Attachment and Removal of Engines .
(a) Installation of Other Engines .
(i) In the course of performance of Lessee’s Obligations under this Lease, Lessee may temporarily remove an Engine from the Airframe and install an engine on the Airframe that is owned by Lessee or which is subject to a lease, conditional sale agreement, trust indenture or other security agreement, provided that such other engine is (x) free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such engine and as the same are otherwise permitted to exist pursuant to Section 17.7, and (y) Lessee, or if Lessee is not the owner of the engine, the lessor, conditional seller, indenture trustee or secured party of any such engine agrees in writing in a form satisfactory to Lessor, acting reasonably, and which agreement may be set forth in the relevant lease, conditional sale agreement, mortgage, indenture or security agreement, that it will not acquire or claim, as against Lessor, any right, title or interest in or any adverse right, title or interest to the Airframe or any Item

	  	32	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

of Equipment as the result of any such engine being installed on the Airframe. Lessor agrees for the benefit of any such owner, lessor, conditional seller or secured party that, subject to such Person’s agreement as set forth above, Lessor shall not claim any interest in any such engine by virtue of its installation on the Airframe. If any of the respective interests of Lessor, Owner or any relevant Financing Party in any Item of Equipment is materially impaired by virtue of installation of such engine on the Airframe, Lessee shall promptly, following receipt of written notice from Lessor to such effect, remove such engine from the Airframe, failing which such impairment or adverse effect will be deemed an Event of Default pursuant to Section 23(k).
(ii) Lessee shall comply with the requirements of Section 19.4(c) for as long as such engine is installed on the Airframe and the engine shall be removed from the Airframe and the removed Engine reinstalled on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not later than the Termination Date.
(b) Installation of Engines on other Airframes . Provided no Event of Default has occurred and is continuing, Lessee may install an Engine removed from the Airframe on any other airframe of the same type operated by and in Lessee’s fleet of aircraft, but only if:
(i) Lessee has title to such other airframe and such airframe is free and clear of all Liens (except as the same are permitted to exist pursuant to Section 17.7); or
(ii) such other airframe is leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement, provided that (A) such airframe is free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such airframe and as the same are otherwise permitted to exist pursuant to Section 17.7, and (B) there shall be in effect a written recognition of rights agreement of the lessor or secured party of such airframe substantially in the form appearing in Appendix 8 or substantially similar agreement to the effect that such lessor, conditional seller or secured party will not claim any interest in the Engine by virtue of such Engine being installed on such airframe, and which agreement may be set forth in any relevant lease, conditional sale agreement, mortgage or security agreement. If any of the respective interests of Lessor or any relevant Financing Party in an Engine is materially impaired by virtue of installation on any such other airframe, Lessee shall promptly remove such Engine from such other airframe, failing which such impairment or adverse effect will be deemed an Event of Default under Section 23(k) or in the event such continued installation of such Engine on such airframe has resulted in loss of title to the Engine by Lessor, an Engine Loss;
and in either case, Lessee shall comply with the requirements of Section 19.4 for as long as such Engine is installed on such other airframe and the Engine shall be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not less than thirty (30) days prior to the Scheduled Termination Date.
12.13. Installation of Items of Equipment on Other Aircraft . Subject to the preceding provisions of this Article 12, Lessee may permit any Item (excluding Landing Gear) to be installed on another aircraft solely to the extent such aircraft is within Lessee’s fleet of aircraft; provided , however , upon the occurrence and continuation of an Event of Default following the removal of any such Item from the Aircraft, Lessee shall promptly, but in no event later than ten (10) Business Days following such Event of Default:
(a) reinstall on the Aircraft each such Item not then currently installed thereon, assuming such Item is in airworthy condition, or

	  	33	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(b) in the event such Item is not in an airworthy condition, such Item shall be restored promptly to an airworthy condition and reinstalled on the Aircraft or, in the case of a Part, such Part may be exchanged in accordance with Section 12.11.
12.14. Failure to Reinstall Engines and Items of Equipment on the Aircraft . If (a) an Event of Default has occurred and is continuing which is the result of Lessee’s failure to make any payments when due or failure to maintain the airworthiness of the Items of Equipment, and (b) Lessee fails to comply with the requirements set forth in Sections 12.12 and 12.13, then in such instance and in recognition of the higher credit risk to which an aircraft lessor is exposed when an Engine, APU, or Part has been removed from an aircraft at a time when a Default or an Event of Default has occurred and is continuing, Lessee shall pay to Lessor an additional renal charge, incurred as Supplemental Rent and not as a penalty, in the amount of (X) ***** for each Engine, (Y) ***** for the APU, and (Z) ***** of the replacement cost for any Part, for each day each such Engine, APU or Part, as the case may be, remains in noncompliance with Sections 12.12 or 12.13, as the case may be.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	34	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

13.	MAINTENANCE RESERVES	
13.1. Maintenance Reserves . Lessee shall make payments to Lessor in respect of the Maintenance Reserves in accordance with Appendix 2D, on a monthly basis, within ten (10) days following the last day of each Rent Period, with the first payment due ten (10) days following the second Rent Payment Date; provided that Lessee’s final payment in respect of Maintenance Reserves shall be made on the Termination Date.
13.2. Discrepancies . If Lessee’s actual utilisation of the Aircraft is greater than Lessee’s utilisation of the Aircraft reported to Lessor in accordance with Article 16, Lessee shall make up any deficiency payments in respect of Maintenance Reserves to Lessor within three (3) Business Days of the date of receipt of written notice from Lessor.
13.3. Rights in Maintenance Reserves .
(a) All amounts paid by Lessee in respect of Maintenance Reserves are the sole and exclusive property of Lessor and Lessor shall be entitled to freely commingle such moneys with its several funds and deal with such moneys as Lessor sees fit. Notwithstanding such stated intent, if and to the extent that the Maintenance Reserves or any part thereof, under any applicable Law or otherwise, are determined to be security deposits or otherwise the property of Lessee or if it is so determined those monies are a debt owed to Lessee or that Lessee shall have any interest in those monies, Lessee and Lessor agree that subclauses (i) and (ii) below shall apply.
(i) Pursuant to applicable Law, Lessee hereby grants to Lessor a first and prior perfected Lien and possessory security interest in the Maintenance Reserves as security for Lessee’s Obligations, including, without limitation, the obligations of Lessee to maintain and return the Aircraft and each Item of Equipment in the condition required by this Lease. Lessee agrees to execute and file, at Lessee’s expense, with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
(ii) Lessee shall not assign, hypothecate or otherwise transfer its interests, if any, in the Maintenance Reserves.
(b) Upon and during the continuance of an Event of Default, and in addition to all other rights Lessor may have under this Lease under applicable Law, Lessor may use, apply or retain all or any portion of the Maintenance Reserves, and, without limitation, Lessor may immediately or at any time thereafter, while any Event of Default is continuing, without prior notice to Lessee (x) offset all or any part of the Obligations or Related Obligations against the liabilities of Lessor in respect of any obligations of Lessor or Affiliate of Lessor under any Related Lease, or (y) apply the Maintenance Reserves in or towards the payment or discharge of the Obligations or Related Obligations in such order as Lessor reasonably sees fit. If Lessor uses or applies all or any portion of such Maintenance Reserves, such application shall not be deemed a cure of any Default or Event of Default unless and until Lessee shall have, and Lessee shall within three (3) Business Days after written demand therefor deposit with Lessor in cash an amount sufficient to fully restore each such Maintenance Reserve account to its original sum prior to such application plus any amount then due and payable by Lessee in respect of Maintenance Reserves.

	  	35	  	ARTICLE 13
MAINTENANCE RESERVES	

13.4. Claims for Reimbursement - Timing . Any claim by Lessee for reimbursement from the Maintenance Reserves made pursuant to this Lease shall be made within the earlier to occur of (x)   one hundred eighty (180) days following the completion date of the Maintenance Check for which such claim is being made and (y) the Termination Date, provided that notification by Lessee to Lessor on or before the Termination Date that a claim exists and will be submitted no later than 180 days following completion of the respective Maintenance Check shall be deemed as complying with the timing requirement set forth herein. Should Lessee fail to make such claim within such time period (or agree with Lessor in writing concerning an alternate disposition for such claim), Lessee shall thereafter be forever barred and estopped from making a claim in respect of such maintenance.

	  	36	  	ARTICLE 13
MAINTENANCE RESERVES	

14.	SELLER’S AND MANUFACTURERS’ WARRANTIES	
14.1. Assignable Warranties . At Delivery, Lessor will assign to Lessee for the duration of the Lease Term the benefit of all warranties given to Lessor by the Seller and the Engine Manufacturer pursuant to the airframe and engine warranty assignment agreements substantially in the forms appearing in Appendix 8. In addition, at Delivery Lessor will assign and makes available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by any other Manufacturer, and at Lessee’s cost, Lessor shall cooperate with Lessee in respect of the enforcement of any such warranties.
14.2. Reassignment; Assignment of Lessee Warranties . On the Termination Date:
(a) the benefit of any warranty and other rights assigned or made available by Lessor to Lessee pursuant to this Lease will be reassigned automatically and without further act or writing to Lessor; provided that upon the occurrence and continuation of an Event of Default, Lessor may instruct any Manufacturer of any Item of Equipment to make any payments of monies under any warranty claims made by Lessee directly to Lessor for further credit to Lessee upon and subject to Lessee’s cure of such Event of Default; and
(b) Lessee shall assign and shall be deemed to have assigned to Lessor on and as of the Termination Date, at no charge to Lessor, any and all warranties Lessee has obtained in connection with any maintenance or services performed on the Aircraft or any Item of Equipment during the Lease Term.
14.3. Warranty Claims . Lessee will diligently and promptly pursue any valid claims it may have under the warranties assigned to it hereunder with respect to the Aircraft and other Items of Equipment. At the written request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of (x)   fourteen (14) days prior to the Scheduled Termination Date and (y) the Termination Date of all such warranty claims made by Lessee during the Lease Term to the extent historical records of the same are maintained by Lessee (except to the extent such information shall have previously been provided to Lessor).

	  	37	  	ARTICLE 14
SELLER’S AND MANUFACTURERS’ WARRANTIES	

15.	SUBLEASING AND WET LEASING	
15.1. Subleasing . Provided no Default or Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Permitted Subleases for the Aircraft with Permitted Sublessees provided that:
(a) the term of such Permitted Sublease is not for a period exceeding the Lease Term and shall expressly prohibit sub-subleasing of the Aircraft and any Item of Equipment independent of the Airframe;
(b) the rights of the Permitted Sublessee under such Permitted Sublease are at all times expressly subject and subordinate to the rights of Lessor hereunder and to the respective interests of Owner and any Financing Parties and shall contain a provision substantially to the effect of:
“Anything in this sublease to the contrary notwithstanding, the sublessee’s rights hereunder to the possession, use and enjoyment of the Airframe, and if attached to the Airframe at the commencement of the sublease or if subsequently delivered to sublessee during the term of the sublease, the Engines in accordance with the terms hereof shall be subject to the Aircraft Lease Agreement dated 30 November 2009 (the ‘ Primary Lease ’) between CIT Aerospace International, as lessor (the ‘ Primary Lessor ’), and the sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the sublessee confirms and agrees that this sublease is in all respects subject and subordinate to the Primary Lease. Upon notice to the sublessee hereunder by the Primary Lessor that an Event of Default (as defined in the Primary Lease) has occurred and is continuing, and that the Primary Lease shall have been cancelled or terminated pursuant to the terms thereof, the Primary Lessor may, at its option, by written notice to the sublessee after the date of such cancellation or termination:
 
 	(i)	require the sublessee to enter into an agreement, in form and substance satisfactory to the Primary Lessor, recognising the Primary Lessor, as the sublessor hereunder and reconfirming all of the obligations of the sublessee hereunder, or	
 
 	(ii)	terminate this sublease and require prompt delivery by the sublessee of the Aircraft to the Primary Lessor, in accordance with the return provisions of this sublease.	
Unless the sublessee shall have received any such written notice from the Primary Lessor requiring attornment or terminating this sublease, the sublessee shall be and remain fully obligated hereunder notwithstanding the continuance of any Event of Default under the Primary Lease or the termination or cancellation thereof pursuant to the terms thereof.”;
(c) Lessee causes the Permitted Sublessee under the Permitted Sublease to deliver to and for the benefit of Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease a supplemental power of attorney for deregistration of the Aircraft in the form delivered by Lessee to Lessor at Delivery;
(d) Lessee and such Permitted Sublessee shall not enter into any amendments, modifications, waivers or the like of any provision of the Permitted Sublease without Lessor’s prior written consent and should such consent be granted, Lessee shall deliver to Lessor a copy of any such duly executed agreements between Lessee and such Permitted Sublessee in connection with the same;

	  	38	  	ARTICLE 15
SUBLEASING AND WET LEASING	

(e) if necessary, Lessee and Permitted Sublessee shall authorise the filing of and deliver documents appropriate for perfection filings in the State of Registration and such other jurisdictions as Lessor, in good faith, deems reasonable and appropriate, in form and substance satisfactory to Lessor, covering the interests of Lessee and such Permitted Sublessee under such Permitted Sublease, together with any other documents requested by Lessor to protect or perfect the interest of Lessor, Owner and any Financing Parties in the Permitted Sublease in the State of Registration and/or such other jurisdictions;
(f) Lessee shall assign each Permitted Sublease and all rights and security deposits and maintenance and other reserves received thereunder to Lessor pursuant to a security assignment of the Permitted Sublease together with a consent and agreement of the Permitted Sublessee, each in form and substance satisfactory to Lessor and, if applicable, Owner and each Financing Party, as security for Lessee’s Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding the enforceability and perfection of the Permitted Sublease and such assignments for security and the consent and agreement or other assurances reasonably satisfactory to Lessor;
(g) the provisions of each Permitted Sublease shall provide for benefits and protections to Lessee, as sublessor, which are (in respect of material terms and in the aggregate) not less advantageous to Lessee, as sublessor, than the benefits and protections provided to Lessor by the provisions of this Lease;
(h) Lessee shall (x) notify Lessor of the terms of each Permitted Sublease (and provide copies of the final drafts thereof) not less than fifteen (15) Business Days prior to the execution of such Permitted Sublease, and (y) furnish the “original” copy of such Permitted Sublease to Lessor as soon as possible after the execution thereof, but in any event prior to the delivery of the Aircraft to such Permitted Sublessee; and
(i) Neither Lessee nor Permitted Sublessee shall register the sublease on the International Registry without Lessor’s prior consent, which consent shall not be unreasonably withheld.
15.2. Wet Leasing . Provided no Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Wet Leases for the Aircraft to any Person provided that:
(a) the rights of the lessee under the Wet Lease are at all times expressly subject to and subordinate to, and do not conflict in any respect with (or give such wet lessee any rights greater than the rights of Lessee under), the terms of this Lease and the rights of Lessor hereunder and the respective interests of Owner and any Financing Party;
(b) Lessee provides Lessor with (x) a certified copy of the applicable provisions from the Wet Lease or an officer’s certificate indicating whether Lessee or the wet lessee under the Wet Lease will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the Wet Lease, and (y) a certified copy or original of an insurance certificate and broker’s letter of undertaking confirming the maintenance of insurance coverage required by this Lease; and

	  	39	  	ARTICLE 15
SUBLEASING AND WET LEASING	

(c) in any event, unless otherwise agreed by Lessor in writing, the term of such Wet Lease ends on a day not later than thirty (30) days prior to the Scheduled Termination Date.
15.3. No Independent Subleasing of Items of Equipment . No Item of Equipment may be subleased independently from the Aircraft.
15.4. Expenses . Lessee shall pay or reimburse Lessor, Owner and any Financing Party on demand for their respective, documented, out of pocket costs and expenses reasonably incurred in connection with the review, negotiation and consummation of the transactions contemplated by any Permitted Sublease or Wet Lease.
15.5. Lessee Remains Liable . Lessee shall remain primarily and fully responsible and liable for the performance of its Obligations under and the observance of the terms of this Lease and the Operative Documents, notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted Sublease or Wet Lease had not occurred.

	  	40	  	ARTICLE 15
SUBLEASING AND WET LEASING	

16.	REPORTING AND INSPECTIONS	
16.1. Financial Reporting . Lessee agrees to furnish to Lessor the following, which shall be deemed Information:
(a) Semi-Annual Statements . As soon as reasonably practicable after the end of the second and fourth quarterly fiscal periods in each fiscal year of Lessee, and in any event within one hundred twenty (120) days thereafter, duplicate copies, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such six month period;
(ii) consolidated statements of income and retained earnings of Lessee or Guarantor for such six month period; and
(iii) consolidated statements of cash flow of Lessee or Guarantor for the portion of the fiscal year ending with such six month period.
(b) Annual Statements . As soon as practicable after the end of each fiscal year, and in any event within one hundred eighty (180) days thereafter, a copy, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such year, and
(ii) consolidated statements of income and retained earnings and of cash flow of Lessee or Guarantor for such year, prepared in accordance with GAAP (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognised standing in Lessee’s State of Organisation (which report may be adverse, qualified or disclaim an opinion).
(c) Comparison . All statements furnished under clauses (a) or (b) above shall set forth in comparative form the amount for the end of the corresponding fiscal year, or corresponding period of the preceding fiscal year, as the case may be.
(d) Satisfaction by Publication . Lessee’s obligations under Sections 16.1(a) through (c) above shall be deemed satisfied should Lessee or Guarantor publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee thereunder, and further notify Lessor in writing of the website address.
(e) Notice of Proceedings . Prompt notice of any litigation or arbitral proceedings not covered by insurance (except for deductibles standard in the airline industry) and of all proceedings by or before any Governmental Authority (i) which might adversely affect Owner’s ownership or Owner’s or Lessor’s other interests in the Aircraft, (ii) which relate to the Aircraft and where the amount involved not covered by insurance is in excess of ***** or (iii) which might, in the reasonable and good faith judgement of Lessee, have a material adverse effect on the ability of Lessee to perform the Obligations.
(f) Additional Information . Lessee will furnish to Lessor (i) unless available on a website generally available free of charge to the public, promptly after the same has been made public, a copy of any announcement released by Lessee to any stock exchange on which Lessee is publicly traded by shares (if applicable), and (ii) a copy of any other information concerning Lessee’s business which Lessee releases or otherwise makes available to its creditors generally.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	41	  	ARTICLE 16
REPORTING AND INSPECTIONS	

16.2. Aircraft Utilisation and Other Reporting/Information . During the Lease Term, Lessee agrees to furnish to Lessor the following information in connection with Lessee’s utilisation of the Aircraft:
(a)(i) within ten (10) days following the second Rent Payment Date and each remaining Rent Payment Date during the Lease Term, and (ii) on the Termination Date, a utilisation report in the form appearing in Appendix 8 reporting the utilisation of the Items of Equipment set forth therein for the immediately preceding calendar month or part thereof;
(b) as promptly as reasonably practicable, but in no event later than the date of issuance of the next monthly utilisation report following the date of the removal of any Engine, Landing Gear or APU, advising of (i) the reason for such removal, (ii) the location of such Item of Equipment, (iii) the total accumulated Flight Hours and Cycles of such Item of Equipment (or total APU Hours with respect to the APU), (iv) the Flight Hours and Cycles accumulated since the most recent Engine Restoration with respect to any Engine or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the APU Hours accumulated since the most recent Overhaul with respect to the APU, and (vi) the intended workscope, in each case, as applicable;
(c) written notice of and information of any accident or incident with respect to any Item of Equipment (other than Parts) as promptly as possible, and in any event within two (2) Business Days following the occurrence or detection thereof;
(d) within a reasonable time (but not less than ten (10) days) prior to the commencement date for any Maintenance Check and in accordance with Section 12.6, the identity of the Approved Maintenance Organisation Lessee intends to have perform such check together with a copy of the workscope intended to be accomplished in connection with the same, to the extent available; and
(e) upon written request of Lessor, a copy of the Maintenance Program, inclusive of all revisions issued as of the date of such request. Lessor agrees not to disclose such Maintenance Program to any Person (other than Lessor’s employees and consultants, who shall be instructed not to disclose the same other than as permitted by this Section 16.2(e)) except as necessary to bridge the Maintenance Program onto another maintenance program following the Termination of the Lease, and shall require any Person to whom it shall disclose the same as permitted by this Section 16.2(e), to agree in writing not to disclose the contents of such Maintenance Program.
16.3. Further Information; Inspections .
(a) Lessee shall provide to Lessor, following Lessor’s written request during the Lease Term ( provided that long as no Event of Default has occurred and is continuing, such requests shall be made no more than once per year) and within one hundred eighty (180) days following the Termination Date, a list of the airports to which Lessee has operated the Aircraft during the (i) twelve (12) months preceding such request (or the Termination Date, if applicable).
(b) During the Lease Term, Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Items of Equipment as Lessor may reasonably request.

	  	42	  	ARTICLE 16
REPORTING AND INSPECTIONS	

(c) Lessee shall permit any Person (including prospective purchasers, financiers or lessees of the Aircraft) designated in writing by Lessor, to visit and inspect (at any reasonable time, provided that, so long as no Event of Default has occurred and is continuing, such inspection shall not unreasonably interfere with Lessee’s business, maintenance or operational commitments) the Items of Equipment, their condition, use and operation and the records maintained in connection therewith and, at Lessor’s cost, to make copies of such records as Lessor may reasonably designate (unless an Event of Default has occurred and is continuing, in which case such copies shall be provided to Lessor at Lessee’s cost).
(d) Lessor shall be permitted to have representatives and/or agents present throughout the accomplishment of Maintenance Checks to observe all aspects of the same including, but not limited to, the workscope thereof; provided , however , that such representatives and agents shall not interfere with such Maintenance Checks and shall be bound by all rules and regulations of the relevant maintenance provider. Neither Lessor nor any person designated by Lessor shall have any duty to make any such inspection and none shall incur any liability or obligation by reason of making or not making such inspection.
16.4. Technical Report Prior to Return of Aircraft.
(a) Twenty (20) months prior to the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance status report detailing the information in the form appearing in Appendix 8.
(b) At Lessor’s written request, Lessee will make copies available of (i) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at Return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) Time Controlled Part listings and current maintenance status of each, (v) a list of modifications and alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior material burn certificates, (vii) the complete workscope for the Maintenance Checks and other work to be performed prior to Return, (viii) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from any Manufacturer, (ix) current Engine disk sheets and a description of the work accomplished during the last shop visit for each Engine and (x) any other data which is reasonably requested by Lessor in connection with any of the foregoing.

	  	43	  	ARTICLE 16
REPORTING AND INSPECTIONS	

17.	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	
17.1. Registration . At Delivery, Lessee shall register the Aircraft (or shall cause the same to be registered) with the Register in the State of Registration with the respective interests of Owner, Lessor and, at Lessor’s cost, any relevant Financing Party recorded to the fullest extent permitted by applicable law in the State of Registration and shall thereafter maintain such registration throughout the Lease Term, but, in respect of the interests of any Financing Party, at Lessor’s cost. Lessee shall bear all costs incurred in effecting and maintaining the registration of Owner’s and Lessor’s interests during the Lease Term, but Lessor shall bear any cots of filing, maintaining or otherwise perfecting the interests of any Financing Party. Lessor and Owner shall cooperate with Lessee in effecting and maintaining such registration and shall provide to Lessee such documents as Lessee may reasonably request in connection therewith. Lessee shall not take or permit any action inconsistent with the continued registration of the Aircraft or the recordation of the various interests of Lessor, Owner and any Financing Party therein with the Register.
17.2. Identification Plates . Lessee shall, throughout the Lease Term, maintain in respect of the Airframe, the APU and each Engine a fireproof identification plate of a reasonable size, in a clearly visible place in the cockpit of the Aircraft (or in the vicinity of the Airframe Manufacturer’s data plate) and in close proximity to the Manufacturer’s data plate on each Engine and the APU, that contains the legend in writing appearing in Appendix 2B, Section 5. Lessee shall not remove, or cause or permit the removal or modification of such identification plate without Lessor’s prior written consent. Lessee shall not allow the name of any other Person (with the exception of Lessee) to be placed on the Airframe or any Engine as a designation that might be interpreted as a claim of ownership or of any interest therein. Lessee shall promptly replace any such nameplate that becomes illegible, lost, damaged or destroyed for any reason. If at any time Lessor and/or Owner transfer their respective interests in the Aircraft or this Lease as permitted hereunder or Lessor or Owner finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost, promptly affix such new nameplates to the Airframe and the Engines as may be required by Lessor.
17.3. Aeronautics Authority Acknowledgment . If and to the extent that the same is customarily available in the State of Registration, Lessee shall use reasonable efforts to obtain and deliver to Lessor at Delivery, a letter from the Aeronautics Authority addressed to Lessor and (if so requested by Lessor) Owner and/or any Financing Party confirming that it will recognise Owner’s title to the Aircraft and the respective rights of Lessor, Owner and/or such Financing Party to deregister the Aircraft upon the cancellation, termination or expiration of the leasing of the Aircraft hereunder in accordance with the provisions hereof.
17.4. Authorisation to Make Perfection Filings . The execution of this Lease by the parties hereto constitutes the authorisation by Lessee to Lessor’s legal counsel to make such perfection filings as Lessor and its counsel deem necessary or desirable to protect the interest of Lessor, Owner and any Financing Party hereunder. From time to time on reasonable written request made by Lessor, Lessee shall provide to Lessor a letter on the letterhead of Lessee, in form and substance reasonably satisfactory to Lessor and executed by an officer of Lessee, authorising such Persons as Lessor may specify to make such perfection filings as Lessor reasonably deems necessary or desirable to protect the interests of Lessor, Owner or any Financing Party hereunder.
17.5. Perfection of Title.
(a) Lessee shall, together with Owner and/or Lessor, cause, or, at Lessor’s request, assist Lessor in causing, this Lease, the Lease Supplement and any and all additional instruments

	  	44	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

which shall be executed pursuant to the terms hereof as permitted by applicable Law or regulations, to be kept, filed and recorded in the offices of any Governmental Authorities in the State of Registration as required by the Register, any applicable Aeronautics Authority and any applicable Law. Lessee shall not take any action which would conflict with or adversely affect such filings and recordation of the Lease and such other documents as provided herein.
(b) If at any time subsequent to the initial recordation under the preceding clause (a), any filing or recording is reasonably necessary or desirable to protect the interests of Lessor and/or Owner, Lessee, at its own cost and expense and upon written request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded or, as necessary to be re-filed and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor and Owner hereunder and in the Aircraft or any Item of Equipment. At the reasonable request of Lessor and at Lessor’s cost, Lessee shall furnish to Lessor and Owner (if not Lessor) an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation.
(c) Without limiting the foregoing, Lessee shall do or cause to be done any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and interests of Owner and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee does, or is reasonably likely to, operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Owner’s ownership rights regarding the Aircraft within any such jurisdiction.
17.6. Cape Town Convention .
(a) Lessee shall promptly make or approve registrations, filings and recordings, and/or do or cause to be done such additional acts and things which may be reasonably requested by Lessor (for itself or for and on behalf of Owner and any Financing Party) as being required by or advisable under applicable law, in order (x) that the Operative Documents effectively constitute international interests, while retaining the commercial and business agreements of the parties as described therein in any such new Operative Documents, and provide to the such parties the full benefit of the Cape Town Convention with respect to the Aircraft and the Engines, and (y) the Operative Documents contain such provisions as may be necessary to confirm the commercial and business agreements of the parties therein to the greatest extent permitted under the Cape Town Convention, including, without limitation, with respect to:
(i) matters concerning the documentation and registration in the International Registry of international interest(s) or prospective international interest(s) which are, or may be, vested in Lessor, Owner or any Financing Party under this Lease or any other Operative Documents and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(ii) matters concerning sales and prospective sales which are required or permitted by this Lease or the other Operative Documents, including with respect to documentation and registration in the International Registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;

	  	45	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

(iii) matters concerning any assignment of associated rights or prospective assignment of associated rights which is required or permitted or constituted by this Lease or any other Operative Document, the documentation and registration thereof in the international registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iv) delivery and recording with the Register of an irrevocable de-registration and export request authorisation substantially in the form annexed to the Protocol, which may be exercised only after the occurrence and during the continuance of an Event of Default; and
(v) subject to the preceding and the following provisions of this Section 17.6, including or excluding in writing the application of any provisions of the Cape Town Convention and/or the Protocol that Lessor (for itself or acting for an on behalf of Owner or any Financing Party), acting reasonably may deem advisable in connection with the foregoing.
(b) In addition to the remedies set forth in this Lease or as may otherwise be available to Lessor, Owner or any Financing Party under any other Operative Documents, at law or in equity, upon the occurrence and during the continuation of an Event of Default, Lessor and/or Owner may, but shall not be obligated to, exercise any remedy available to it under the Cape Town Convention and/or the Protocol (subject, in each case to the requirements and limitations of the Cape Town Convention and the Protocol and to the requirements and limitations imposed by the State of Registration in relation to the Cape Town Convention and Protocol), including:
(i) the remedies set forth in Articles 8, 9 and 34 of the Cape Town Convention and Article IX(1) of the Protocol;
(ii) relief pending final determination under Article 13 of the Cape Town Convention and Article X of the Protocol (including sale of the Aircraft and application of proceeds therefrom, but excluding the application of Article 13(2) of the Cape Town Convention); and
(iii) the procurement of the de-registration of the Aircraft and the export and physical transfer of the Aircraft or any Engine from the territory in which it is situated pursuant to Article IX of the Protocol, but excluding, solely to the extent permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention with regard to default remedies without prejudice to Article IX(1) of the Protocol, provided that such exclusion shall not be applicable (to the extent permitted by Article 15 of the Cape Town Convention) to the extent such default remedies are exercised outside the territorial limits of the State of Registration and in a manner not involving the courts of the State of Registration or of its territorial units; and (y) where a remedy is available to it under the Cape Town Convention or the Protocol and also under this Agreement and the other Operative Documents or other applicable law, to the extent permitted by the Cape Town Convention and the Protocol and other applicable law, and subject to the provisions of the previous clause (x), Lessor (for itself and for and on behalf of Owner and any Financing Party) may elect under which of the foregoing it shall exercise such remedy.

	  	46	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

(c) Without limiting the generality of the foregoing or any other provisions of the Operative Documents, Lessee hereby (i) agrees (without prejudice to its rights under Section 10.2) to exclude the application of Article XVI(1)(a) of the Protocol; and (ii) consents, pursuant to Article XV of the Protocol, to any assignment of associated rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the Operative Documents and further agrees that the provisions of this Section 17.6, shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such assignment of associated rights.
(d) In this Section 17.6 the following terms have the meanings given in the Cape Town Convention and the Protocol: international interest, prospective international interest, international registry, assignment of associated rights, prospective assignment of associated rights, registered, sale and prospective sale and proceeds .
17.7. Permitted Liens . Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to this Lease, any Item of Equipment, title thereto or any interest therein, except (i) the respective rights of Owner, Lessor and Lessee as herein provided; (ii) Lessor’s Liens; (iii) Liens for Taxes not yet due or being contested in good faith by appropriate proceedings so long as adequate reserves are maintained with respect to such Taxes in accordance with GAAP; (iv) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee); and (v) Liens for airport, navigation, and en-route charges arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee). Lessee shall not be permitted to contest any Lien if such contest gives rise to any reasonable likelihood of the sale, forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment or any interest therein in the course of any such proceedings, or as a result of any such Lien or the respective interests of Lessor, Owner or any Financing Party will be similarly adversely affected. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to any Item of Equipment.

	  	47	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

18.	GENERAL INDEMNITY	
18.1. Scope . Lessee agrees to indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee from and against any and all Claims which in any way may result from, pertain to or arise out of, or are in any manner related to:
(a) the Aircraft, this Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or
(b) the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or
(c) any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or
(d) any failure of Lessee to provide or maintain the Aircraft Documents in accordance with the relevant provisions of this Lease or any other Operative Document during the Lease Term; or
(e) any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or
(f) any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or
(g) any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof; or
(h) any transaction, approval, or document contemplated by this Lease or any other Operative Document or given or entered into in connection herewith or therewith.
Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be subrogated to all rights and remedies which such indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall give prompt written notice thereof to Lessee or such Indemnitee, as the case may be, but failure to give such notice shall not relieve Lessee of its obligations hereunder, except to the extent such failure precludes or restricts Lessee from contesting or otherwise defending any such Claim and except for any liability or obligation of Lessee to the extent the same is increased or would not have been incurred in the absence of any such failure.
18.2. Lessee’s Release . Lessee hereby waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with

	  	48	  	ARTICLE 18
GENERAL INDEMNITY	

injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such defect may be discovered, whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee, and regardless of the location of the Aircraft or any Item of Equipment at any such time.
18.3. Repayment . If an Indemnitee shall obtain a repayment of any amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default, promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
18.4. Payment . Subject to the provisions of Section 18.3 hereof, Lessee shall pay directly to each Indemnitee all amounts due under this Article 18 within ten (10) days of the receipt of written notice by Lessee from such Indemnitee that such payment is due, together with reasonable detail supporting Lessee’s obligations in respect of the relevant Claim(s) and the amount(s) thereof.
18.5. Exclusion . Notwithstanding the foregoing provisions of this Article 18, Lessee shall not be obligated to make any payment to an Indemnitee by way of indemnity in respect of any Claim against such Indemnitee, to the extent that such Claim results from or arises out of:
(a) the gross negligence or wilful misconduct of such Indemnitee;
(b) any Lessor’s Lien, except to the extent any such Claim results from or arises out of (and in which case such Claim shall not be excluded from Lessee’s indemnity Obligations under this Article 18):
(i) the premature termination of any funding or other financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft following the occurrence and continuation of an Event of Default; or
(ii) any indemnity payment payable by an Indemnitee to another Person under any financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft and for which Lessee has expressly agreed to provide an indemnity pursuant to Section 18.1;
(c) any Taxes;
(d) acts or events which occur (i) before Delivery (except with respect to any Claims arising from or related to Lessee’s acts or omissions in connection with its activities under and pursuant to, among other things, the Participation Agreement) or (ii) after the Termination Date (except if such Claims arise as a result of an act or omission of Lessee which occurred during the Lease Term and are not attributable to any act or omission of an Indemnitee);
(e) ordinary and usual operating or overhead expenses of any Indemnitee, other than as arising as a result of and during the continuance of an Event of Default;

	  	49	  	ARTICLE 18
GENERAL INDEMNITY	

(f) in respect of an Indemnitee, a breach by such Indemnitee of any express covenant given to Lessee; or
(g) the sale, transfer, assignment or other disposition by an Indemnitee of any of its right, title and interest in and to the Aircraft or the Lease, except as a result of the occurrence and continuation of an Event of Default.
18.6. After-Tax Nature of Indemnity . Each indemnity payable pursuant to this Article 18 shall be paid on an After-Tax Basis.
18.7. Contest . Lessee shall be entitled, at its sole cost and expense, acting through counsel acceptable to the respective Indemnitee, (a) in any judicial or administrative proceeding that involves solely a claim for one or more Claims, to assume responsibility for and control thereof, (b) in any judicial or administrative proceeding involving a claim for one or more Claims and other claims related or unrelated to the transactions contemplated by this Lease, to assume responsibility for and control of such Claim or Claims to the extent that the same may be and are severed from such other claims (and each of Lessee and such Indemnitee shall use its commercially reasonable efforts to obtain such severance), and (c) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (i) while a Default or an Event of Default shall have occurred and be continuing, (ii) if such proceedings will involve any reasonable possibility of the sale, forfeiture or loss of, or the creation of any Lien (other than a Lessor’s Lien) on, the Aircraft, any Item of Equipment, this Lease, any other Operative Documents, or any part of the foregoing, (iii) if such Claims relate in any way to the business of any Indemnitee other than the transactions contemplated by this Lease or any of the other Operative Documents, (iv) if such Claims, in the opinion of independent counsel for such Indemnitee reasonably satisfactory to Lessee, have a reasonable possibility of otherwise compromising or jeopardizing any substantial interests of such Indemnitee, or (v) if Lessee shall not have furnished such Indemnitee with an opinion of independent counsel reasonably satisfactory to such Indemnitee to the effect that there exists a meritorious basis for contesting such Claims. The Indemnitee may participate with its own counsel, at its own expense, in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. Lessee shall not without the prior written consent of the relevant Indemnitee enter into a settlement or other compromise with respect to any Claims that may result in admission or culpability on the part of any Indemnitee, otherwise subject any Indemnitee to any civil or criminal penalty or other prejudice any Indemnitee or the Aircraft. If for any reason Lessee shall not be responsible for and be in control of any contest contemplated in this Section 18.7, Lessee may, so long as no Default or Event of Default shall have occurred and be continuing, nonetheless participate in any such contest, at its sole cost and expense, in a manner reasonably acceptable to the relevant Indemnitee. The Indemnitee shall supply Lessee with such information reasonably requested by Lessee (and to the extent that it is commercially reasonable for the Indemnitee to do so) as is necessary or advisable for Lessee to assume responsibility for and control or participate in any proceeding to the extent permitted by this Section 18.7. As long as no Default or Event of Default has occurred and is continuing, such Indemnitee shall not enter into a settlement or other compromise with respect to any Claims without the prior written consent of Lessee, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified with respect to such Claims under this Section 18.7. Notwithstanding this Section 18.7, no Indemnitee shall be prevented from settling or paying any Claim immediately if required by Law to do so nor from assuming control of and terminating Lessee’s participation in any contest of a Claim if, in such Indemnitee’s judgment, the interest of any Indemnitee may be adversely affected or prejudiced by any delay, act, omission or continued contest by Lessee of such Claim.

	  	50	  	ARTICLE 18
GENERAL INDEMNITY	

18.8. Survival . The indemnities contained in this Article 18 shall continue in full force and effect notwithstanding the occurrence of the Termination Date, and are expressly made for the benefit of and shall be enforceable by each Indemnitee.

	  	51	  	ARTICLE 18
GENERAL INDEMNITY	

19.	INSURANCE	
19.1. Obligation to Insure . Lessee shall, for the Lease Term, maintain in full force and effect, at its own cost and expense, the Insurances. Lessor is not under any duty or obligation to verify the existence or adequacy of the Insurances.
19.2. Liability Insurance. Lessee shall maintain in effect comprehensive third party aircraft liability insurance against bodily injury and property damage losses arising from ground, flight and taxiing exposures, including, but not limited to, passenger legal liability, cargo liability and products liability insurance in the amount set forth in Appendix 2B, Section 4.1 and in the aggregate with respect to products liability, or such higher amount as Lessee may maintain from time to time on similar aircraft, for any one accident, or series of accidents arising out of any one event, with respect to the Aircraft and Items of Equipment. Such policy shall include war and allied risks in accordance with standard market practice (currently “ The Extended Coverage Endorsement-AVN 52E ”) plus such excess coverage through government indemnity or commercial insurance up to the full limit required herein. Any such liability insurance policy shall not be subject to any deductible amount except with respect to baggage, cargo liability, and hangar keeper’s liability coverage, for which there may not be a deductible in an amount exceeding ***** or such higher amount as may constitute general industry practice and be approved by Lessor in writing from time to time. All Insurances shall:
(a) name the Additional Insureds as additional insureds;
(b) be primary without right of contribution from any other insurance which is carried by any Additional Insureds with respect to the Aircraft or any Engine when not installed on the Aircraft; and
(c) each liability policy shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
19.3. Contractual Liability; Tail Coverage for Liability Insurance. The Insurances referred to in Section 19.2 shall:
(a) include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 18;
(b) for a period of two (2) years after the Termination Date, at Lessee’s cost and expense, continue to name each Indemnitee as additional insureds; and
(c) should Lessor and/or Owner transfer their interests in the Aircraft and this Lease pursuant to and in accordance with the provisions of Article 25, for a period of two (2) years from the effective date of such transfer continue to name as additional insured(s) the transferring Lessor (and the relevant transferring Owner and Financing Parties and other related Indemnitees).
19.4. Insurance Against Loss or Damage to the Items of Equipment.
(a) Lessee shall maintain in effect with respect to the loss or damage to the Items of Equipment:
(i) all-risk ground, flight and ingestion aircraft hull insurance for the Agreed Value set forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine Agreed
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	52	  	ARTICLE 19
INSURANCE	

Value set forth in Appendix 2B, Section 4.3 covering each Engine when not installed on the Airframe and all risk insurance on a full replacement cost basis with respect to the Landing Gear, APU and Parts while not installed on or in the Aircraft, and
(ii) war risk insurance including, but not limited to, war, acts of terrorism, hijacking, confiscation, including confiscation by the Government of Registry, expropriation, nationalisation, seizure and where generally procured by carriers similarly situated with Lessee, further including coverage for electromagnetic, chemical and biological risks as the same is available on the standard commercial aviation insurance markets upon commercially reasonably terms.
(b) All such insurance shall be payable in Dollars in the United States and shall be, with respect to the Aircraft and each Engine, on an “agreed value” basis. Any hull insurance carried in accordance with this Section 19.4 shall not contain any provision for self-insured amounts or a deductible that exceeds the deductible amount appearing in Appendix 2B, Section 4.4. Any policies carried in accordance with this Section 19.4 shall designate Owner as owner and Owner, or its nominee, as sole loss payee for an amount equal to the Agreed Value, on behalf of the Additional Insureds as their respective interests may appear, and Lessor as lessor of the Aircraft covered thereby.
(c) Installation of Other Engines on the Aircraft . If Lessee installs an engine not owned by Owner on the Aircraft, either (x) Lessee’s hull insurance on the Aircraft must automatically increase to such higher amount as is necessary in order to satisfy the requirement of this Section 19.4 that Owner receive the Agreed Value in the event of an Event of Loss and the amount required by the third party engine owner or (y) separate additional insurance on such engine will attach in order to satisfy separately the requirements of Lessee to such third party engine owner.
(d) Installation of Engines on other Airframes . If Lessee installs or permits the installation of an Engine on an airframe that is not the Airframe, either (x) the hull insurance maintained on such airframe must automatically increase by an amount equal to the Engine Agreed Value so that Owner receives the Engine Agreed Value in the event of an Event of Loss with respect to such Engine while installed on such airframe, or (y) separate additional insurance on such Engine will attach in order to satisfy separately the requirements of Lessee with respect to such Engine.
(e) Additional Lessee Coverage . Lessee may obtain additional hull insurance on the Aircraft, over and above the Agreed Value hereunder, provided that it does not adversely affect the coverage required to be maintained hereunder.
19.5. Reinsurance. If any of the risks required to be insured under this Article 19 are not placed in the manner required, then such risks shall be reinsured and shall:
(a) be on the same terms as the primary insurance required hereunder;
(b) be at levels of not ***** of insurances required to be maintained under this Article 19;
(c) contain a “cut through” clause providing that, in the event of any claim arising under such reinsurance, the reinsurer shall (in lieu of payment to the primary insurer or its successors) pay to the relevant Indemnitee and/or loss payee, as applicable, that portion of any claim which the reinsurer would otherwise be liable to pay the primary insurer or its successors;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	53	  	ARTICLE 19
INSURANCE	

(d) provide for payment to be made directly to the relevant Indemnitee notwithstanding (x) any bankruptcy, insolvency, examinership, liquidation, administration, receivership, dissolution or other similar proceeding with respect to the primary insurer and/or (y) that the primary insurer has made no payment under the primary policies; and
(e) be evidenced by a reinsurance certificate and supported by a broker’s letter of undertaking reasonably satisfactory to Lessor.
19.6. Requirements for All Insurances. All Insurances shall:
(a) be maintained in effect with insurers reasonably acceptable to Lessor, and, if applicable, reinsurers reasonably acceptable to Lessor, of recognised responsibility, specialising and normally participating in the international aviation insurance market and carrying and maintaining an A.M. Best rating of not less than A-, Class VII;
(b) provide that in respect of the interests of the Additional Insureds such policies of insurance shall insure the Additional Insureds regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by Lessee or any other Person;
(c) provide that the Additional Insureds shall have no responsibility for any premiums, assessments, warranties or representations in connection with such insurance;
(d) include the geographic limits of all territories over which the Aircraft and any Engine will be operated;
(e) waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against the Additional Insureds and their respective successors, assigns, agents, officers, employees and servants, other than set-off for unpaid premiums in respect of the Aircraft; and
(f) provide that if the insurers cancel such insurance for any reason whatever, or the same is allowed to lapse for nonpayment of premium, or if there is any material change in policy terms and conditions, such cancellation, lapse or change shall not be effective until thirty (30) days after receipt by Lessee’s designated broker of written notice from such insurers of such cancellation, lapse or change (ten (10) days for nonpayment of premium and seven (7) days for cancellation with respect to war risk and allied perils insurance or such shorter period as shall be customary on the London market for such insurance in such area of the world). Lessee shall cause such designated broker to immediately notify the Additional Insureds of any such notice of cancellation or termination.
19.7. Reports. Lessee shall cause its brokers to advise Lessor in writing promptly of any default in the payment of any premium. On or before the Delivery Date, and thereafter on or prior to each renewal or replacement by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more original certificates of insurance or reinsurance and a broker’s letter of undertaking, each executed and delivered by an insurance broker appointed by Lessee, and, if applicable, a certified English translation thereof, reasonably satisfactory to Lessor, which shall describe in reasonable detail the insurance carried on the Aircraft. Lessee will cause its insurance brokers to identify to Lessor the insurers and reinsurers and shall advise Lessor in writing at least thirty (30) days

	  	54	  	ARTICLE 19
INSURANCE	

(seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage and ten (10) days for reason of non-payment of premiums) prior to the cancellation by the underwriters of any such insurance or as soon as possible in respect of “non-renewal” or automatic termination for war risk insurance required hereunder. On or prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with faxed or other electronic confirmation from Lessee’s insurance brokers certifying that renewal certificates of insurance evidencing the renewal or replacement of such insurance pursuant to the provisions of this Article 19 will be issued effective as of the termination date of the prior certificate of insurance coverage. Within fifteen (15) days after such renewal, Lessee will furnish to Lessor an original or electronic certificate of such insurance coverage from such insurance broker.
19.8. Assignee of Lessor’s and/or Owner’s Interests. If Lessor, Owner and/or any Financing Party assigns, in accordance with the provisions of Article 25, all or any of its rights or otherwise disposes of any interest in the Aircraft or this Lease to any other Person, Lessee shall, upon request, procure that such Person shall (x)   be named as loss payee in substitution for Lessor, Owner and/or such Financing Party, as applicable and/or as additional insured in the policies effected hereunder and (y) enjoy the same rights and insurance enjoyed by Lessor, Owner and such Financing Party, as applicable, under such policies from and after the effective date of such assignment or disposition.
19.9. Failure to Insure. If at any time the Insurances are not maintained by Lessee in compliance with this Article 19, Lessor, Owner and any Financing Party shall be entitled but not bound to do any of the following (without prejudice to any of the rights which any of them may have under the Operative Documents by reason of such failure):
(a) upon giving notice thereof to Lessee, to pay any premiums due or to effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor or, if applicable, any Financing Party considers appropriate (and Lessee shall upon demand reimburse Lessor or if applicable, the relevant Financing Party in full for any amount so expended in that connection); and/or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), subject to the Aircraft being adequately insured, proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.
19.10. Lessor’s Right to Insure. Lessee acknowledges that each of Lessor, Owner and each Financing Party has an insurable interest in the Aircraft and each Item of Equipment and may, at its own expense, obtain insurance or contingent insurance in its own name with respect to such insurable interest. Lessee shall provide to Lessor, Owner and each Financing Party all reasonable assistance as from time to time requested by it in order to adequately protect such insurable interest. Neither Lessor, Owner nor any Financing Party shall maintain any such insurance that would prejudice the insurance maintained by Lessee pursuant to this Lease. Lessee shall have no right to any proceeds of any insurance policies maintained by Lessor.
19.11. Changes to Insurance Practice. If there is a material change in the generally accepted industry-wide practice with regard to the insurance of aircraft by air carriers operating similar aircraft on routes similar to Lessee or any material change with respect to the insurance of aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of Insurances required to be effected under this Article 19) such that Lessor shall, after consultation with Lessee and Lessee’s designated reinsurance or insurance brokers, be of the reasonable opinion that the Insurances required pursuant to this Article 19 are insufficient to protect the respective

	  	55	  	ARTICLE 19
INSURANCE	

interests of Lessor and the other Indemnitees (bearing in mind the nature and route of operation of the Aircraft), the insurance requirements set forth in this Article 19 shall be amended, as soon as reasonably practicable following notice by Lessor to Lessee, so as to include such additional or varied requirements as may be reasonably necessary to ensure that the insurance as so varied shall provide comparable protection to Lessor and the other Indemnitees to that which it would have done if such change had not occurred. In such circumstances, Lessor will consult in good faith with Lessee in relation to any proposed change.
19.12. AVN 67B. Notwithstanding anything to the contrary contained in this Article 19, Lessor shall accept the terms of AVN 67B or AVN67C (“ Airline Finance/Lease Contract Endorsement ”) where such endorsement is contrary to the terms of this Lease as long as such endorsement is customary in the major international insurance markets for commercial passenger airlines.

	  	56	  	ARTICLE 19
INSURANCE	

20.	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	
20.1. Risk of Loss and Damage. Following Delivery, Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and each Item of Equipment and of any other occurrence which shall deprive Lessee of the Aircraft or any Item of Equipment for the time being of the use, possession or enjoyment thereof including, without limitation, any resulting loss in value of the Aircraft or any Item of Equipment due to any of the aforementioned circumstances (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
20.2. Notification of Loss and Damage.
(a) Lessee shall give Lessor written notice of and information regarding any Event of Loss as promptly as possible, and in any event within two (2) Business Days of the occurrence of such Event of Loss.
(b) Each of Lessee and Lessor shall supply to the other all necessary information, documentation and assistance which may reasonably be required in connection with making any claim under the Insurances.
20.3. Event of Loss – Aircraft/Airframe. If an Event of Loss occurs in respect of the Airframe (with or without the Engines), Lessee shall pay, or procure that the insurer pays, to Owner (or to any Financing Party named as loss payee under the Insurances) as soon as reasonably practicable but in any event within sixty (60) days after the Event of Loss Date or, if earlier, the date such insurance proceeds are received, the Agreed Value as at the Event of Loss Date (or such earlier date, as the case may be) together with all Rent and other amounts then due and payable under Operative Documents.
(a) The Net Event of Loss Proceeds received by Owner (or such other person as may be designated as loss payee) from Lessee or the insurer pursuant to this Article 20 shall be applied as follows:
(i) first, in discharge of the Agreed Value;
(ii) second, in discharge of any unpaid Rent and any other amounts (other than the Agreed Value) due and payable by Lessee under the Operative Documents and any Related Lease but unpaid; and
(iii) third, payment of the balance, if any, to Lessee.
(b) Lessee shall continue to pay Basic Rent on the days and in the amounts required under this Lease notwithstanding any such Event of Loss provided that no further installments of Basic Rent shall become due after the date on which all sums due under this Section 20.3 shall have been paid in full, and on such date the Lease Term shall terminate and Owner shall, at Lessee’s cost and subject to the rights (if any) of the insurer cause title to the Aircraft (and to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the case may be) on a quitclaim basis, without warranty or recourse, except that the same shall be free and clear of all rights of Lessor and Owner and Lessor’s Liens without representation, recourse to or warranty by Lessor, Owner or any Financing Party and, provided no Default or Event of Default has occurred and is continuing or upon a complete cure thereof, Lessor shall thereafter return the Security Deposit to Lessee in accordance with Section 4.5 and shall return ***** of the remaining balance of the Maintenance Reserves to Lessee, with Lessor to retain ***** of the remaining balance of the Maintenance Reserves.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	57	  	ARTICLE 20
LOSS AND DAMAGE	

20.4. Event of Loss – Engine or APU. Upon the occurrence of an Event of Loss with respect to an Engine or APU, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft or Airframe, Lessee shall forthwith, but in any event, before the earliest to occur of (x) the Scheduled Termination Date, (y) the Termination Date, and (z) sixty (60) days after the Event of Loss Date, convey to Owner, free and clear of all Liens, title to another engine or, as applicable, auxiliary power unit of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Engine . The replacement engine shall have a value and utility at least equal to, and be in as good operating condition as, the Engine with respect to which such Event of Loss shall have occurred, based on but not limited to (i) Cycles accumulated on each Engine Life Limited Part, (ii) Flight Hours accumulated since new (and accumulated since completion of the most recent heavy maintenance shop visit that completed a workscope at least equivalent to that of an Engine Restoration if an Engine Restoration had previously been accomplished on the Engine that suffered such Event of Loss), and (iii) Flight Hours and Cycles accumulated since new (and accumulated since the most recent restoration or refurbishment of each engine module with respect to any module for which a restoration or refurbishment had previously been accomplished on the Engine that suffered such Event of Loss), assuming such Engine was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Replacement APU . The replacement auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the APU with respect to which such Event of Loss shall have occurred, based on but not limited to (i) APU Hours (and APU Cycles if applicable) accumulated since new with respect to each APU Life Limited Part (as applicable) and (ii) APU Hours accumulated since new (and since the most recent Overhaul for each auxiliary power unit module if an Overhaul had previously been accomplished on the APU that suffered such Event of Loss), assuming such APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessor Inspection . Lessee shall identify to Lessor a candidate replacement engine or auxiliary power unit (as applicable) and Lessor may inspect such candidate replacement engine or auxiliary power unit, which shall include, at Lessor’s option, (i) a full borescope inspection of the compressor, turbine and combustion sections of the replacement engine or auxiliary power unit and (ii) a records inspection, and the results of each such inspection must be satisfactory to Lessor.
(d) Replacement Subject to Lease . Upon acceptance by Lessor, such replacement engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or, as applicable, an “APU”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement Engine or APU shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Engine or APU replaced thereby.

	  	58	  	ARTICLE 20
LOSS AND DAMAGE	

20.5. Event of Loss – Landing Gear.
(a) Upon the occurrence of an Event of Loss with respect to a Landing Gear, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft or the Airframe, Lessee shall forthwith replace such Landing Gear as soon as reasonably possible, but in any event, before the earliest to occur of (x) the Scheduled Termination Date, (y) the Termination Date, and (z)   sixty (60) days from the Event of Loss Date, by duly conveying to Owner, free and clear of all Liens, title to another landing gear of the same or an improved model and suitable for installation and use on the Airframe.
(b) The replacement landing gear shall have a value and utility at least equal to, and be in as good operating condition as, the Landing Gear with respect to which such Event of Loss shall have occurred, based on but not limited to (i) the maximum weight certified for such landing gear; (ii) Flight Hours, Cycles and calendar time accumulated since new with respect to each Landing Gear Life Limited Part (as applicable), and (iii) Flight Hours, Cycles and calendar time accumulated since new (and accumulated since Overhaul if an Overhaul had previously been accomplished on the Landing Gear that suffered such Event of Loss), assuming such Landing Gear was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessee shall identify to Lessor a candidate replacement landing gear and Lessor may inspect such replacement landing gear, which shall include, at Lessor’s option, a records inspection, and the results of such inspection must be satisfactory to Lessor.
(d) Upon acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing Gear”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement landing gear shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Landing Gear replaced thereby.
20.6. Repairable Damage .
(a) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, subject to no Event of Default having occurred and continuing, all insurance proceeds which may be paid or payable by the insurers of the Aircraft shall, subject to (A) a repair estimate acceptable to Lessor, (B) evidence of completion of such repair by an Approved Maintenance Organisation, provided such evidence and the Approved Maintenance Organisation are acceptable to Lessor and (C) receipt (x) by Lessor of a true and correct copy of the adjuster’s claim report, and (y) by Lessee and the insurers of Lessor’s prior written approval for the release of such proceeds, be paid to:
(i) Lessee in respect of all loss or damage Lessee has made good (or caused to be made good), or
(ii) the repairer for the cost of the completed repair works, or
(iii) to the vendor of any new or replacement Item of Equipment for the cost of such new or replacement Item of Equipment;

	  	59	  	ARTICLE 20
LOSS AND DAMAGE	

provided that Lessee shall have furnished to Lessor evidence satisfactory to Lessor, that the repairs have been fully completed and that all invoices in relation thereto have been paid and all such repairs have been performed in accordance with the terms of this Lease. Any such insurance proceeds payable following the occurrence and during the continuation of an Event of Default (or not otherwise applied in the manner described above) shall be applied in such manner as Lessor may direct, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
(b) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, if such insurance proceeds paid in respect thereof are insufficient to pay the cost or estimated cost of making good or repairing such damage or the cost of purchasing a replacement engine, auxiliary power unit, landing gear or part if the same is beyond economic repair, Lessee will pay the deficiency.
20.7. Documents Loss. Upon the occurrence of a Documents Loss under circumstances in which there has not occurred an Event of Loss with respect to an Item of Equipment for which such Lost Documents relate, Lessee shall within thirty (30) days from the date of such loss notify Lessor in writing and thereafter replace such Lost Documents (such replacement documents hereinafter “ Reconstructed Documents ”) by:
(a) obtaining copies of such Lost Documents from the Approved Maintenance Organisation that accomplished the maintenance covered by the respective Lost Documents, each such copy to be certified by the Quality Assurance Department of the respective Approved Maintenance Organisation as to being a true copy of the respective Lost Document, or
(b) the re-accomplishment of Overhauls and Tasks specified in such Lost Documents as soon as reasonably possible, but in any event, before the earliest to occur of (x) sixty (60) days following the Documents Loss, (y) the Scheduled Termination Date, and (z) the Termination Date. The Reconstructed Documents shall comply with all requirements for Required Approvals with respect to the Item of Equipment to which such Lost Documents relate and shall be sufficient to document the then current maintenance status of the affected Items of Equipment. Lessor shall be entitled to inspect the Reconstructed Documents and the results of each such inspection must be satisfactory to Lessor, acting reasonably. Upon acceptance by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined herein for all purposes hereunder.
20.8. Application of Payments from Governmental Authorities. Payments received by Lessor, Owner or Lessee from any Governmental Authority or entity with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft or the Airframe, shall be retained by Lessor or Owner, if received by Lessor or Owner, or promptly paid over to Lessor, if received by Lessee, up to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due to Lessor or Owner hereunder or under any other Operative Documents or any Related Lease). At such time as Lessor or Owner has received such amounts in full, Lessor shall promptly remit (or cause Owner to promptly remit) the excess, if any, of such payments to Lessee. Payments received by Lessor, Owner or Lessee from any Governmental Authority or entity with respect to an Event of Loss resulting solely from the condemnation, confiscation or seizure of, or requisition of title to or use of any Engine shall be paid over to, or retained by, Lessee, provided that Lessee shall have fully performed its obligations under this Article 20 with respect to such Engine. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to a requisition of use during the Lease Term of the Aircraft, the Airframe or any of the Engines, which requisition does not constitute an Event of Loss, shall, so long as no Default or Event of Default has occurred and is continuing, be paid to, or retained by, Lessee, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.

	  	60	  	ARTICLE 20
LOSS AND DAMAGE	

20.9. No Lessor Liability to Repair or Replace Following Delivery. Lessor will not be liable for any expense in repairing or replacing any Item of Equipment or be liable to supply another aircraft or any item of equipment in lieu of the Aircraft or any Item of Equipment if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use or required to produce or provide Reconstructed Documents (as such term is defined in this Article 20).

	  	61	  	ARTICLE 20
LOSS AND DAMAGE	

21.	TAXES; TAX INDEMNITY	
21.1. Indemnity.
(a) Indemnity . Except as provided in Section 21.1(b), Lessee shall pay, and shall indemnify and hold harmless each Indemnitee for and against, all Taxes arising or resulting from or otherwise relating to any Item of Equipment, any Operative Document, or any of the transactions and activities provided for or contemplated in, or permitted by, the Operative Documents, including without limitation, the purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration, possession, use, operation, landing, take-off, storage, location, presence, maintenance, alteration, modification, improvement, servicing, repair, overhaul, pooling, interchange, exchange, substitution, replacement, loss, return, sale or other disposition of, or any damage, addition or transfer of title to, any Item of Equipment or any interest therein, the execution, delivery, filing, registration, recording, presence, performance of, payment under or enforcement of, or the cure of any default or the exercise of any remedy under, any Operative Document or any other documents executed from time to time pursuant to any Operative Document (regardless of how or when such Taxes are imposed or assessed, whether imposed on or assessed against any Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest therein or any use thereof, or otherwise) and all costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements) paid or incurred by any Indemnitee with respect to any Tax for which Lessee is required to indemnify such Indemnitee pursuant to this Article 21 (an “ Indemnified Tax ”) or in connection with the enforcement of this Article 21.
(b) Excluded Taxes . Lessee shall have no obligation under Section 21.1(a) to indemnify an Indemnitee for the following Taxes (each a “ Non-Indemnified Tax ”):
(i) any Tax imposed on or measured by the total net income, receipts, capital, net worth, franchise of, or conduct of business by, such Indemnitee except to the extent that such Tax would not have been payable in the absence of (A) the registration, use, presence or other connection of any Item of Equipment in or with, or any act or omission of Lessee or any Affiliate, agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the inaccuracy or breach of any of the representations, warranties, covenants or agreements of Lessee in the Operative Documents, or (C) an Event of Default, provided that the exclusion in this clause (i) shall not apply to any Tax that is, or is in the nature of, a sales, use, rental, value added, goods and services, consumption, service, transaction privilege, stamp, documentary, transfer, license, excise or property Tax;
(ii) any Tax imposed on or with respect to any sale or other transfer by such Indemnitee of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2, provided that the exclusion in this clause (ii) shall not apply to any sale or transfer that occurs (A) in connection with or as a result of a Default, an Event of Default, an Event of Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of any Item of Equipment, or (B) at Lessee’s request, or (C) pursuant to a requirement in any Operative Document or any applicable Law; or
(iii) any Tax to the extent such Tax is caused by, and would not have been incurred but for, any activities of an Indemnitee in the jurisdiction imposing such Tax

	  	62	  	ARTICLE 21
TAXES; TAX INDEMNITY	

that are unrelated to any Indemnitee’s dealings with Lessee or any Affiliate of Lessee, unrelated to the transactions contemplated in the Operative Documents, unrelated to any Related Lease, and unrelated to use of the Aircraft (or any aircraft subject to a Related Lease) or any part thereof by Lessee or any Affiliate of Lessee or any agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any such Aircraft (or any such aircraft) or any part thereof;
(iv)(A) any Tax to the extent imposed with respect to any event or period occurring before the date of this Agreement, except that the exclusion in this subclause (iv)(A) shall not apply to any such Tax which arises from any act or omission of Lessee or any Affiliate of Lessee or any director, officer, employee, agent or representative of Lessee or any Affiliate of Lessee;
(B) any Tax to the extent imposed with respect to any act or event or period of time occurring after the Aircraft has been returned by Lessee to Lessor in full compliance with Article 22 and is no longer subject to this Lease, provided that the exclusion in this subclause (iv)(B) shall not apply to any Tax that (1) relates to any act or event occurring or matter arising prior to or concurrently with the return of the Aircraft or (2) arises from or in connection with (x) an Event of Default or (y) any payment by or on account of any obligation of Lessee under the Operative Documents to which it is a party; or
(C) the performance of any other obligation of Lessee under the Operative Documents to which it is a party;
(v) any penalty, fine, addition to tax or interest imposed on such Indemnitee to the extent that such penalty, fine, addition to tax or interest is caused by, and would not have been payable but for:
(A) the failure by such Indemnitee to file any Tax return which such Indemnitee is required by applicable Law to file with respect to any Indemnified Tax before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax return, or
(B) the failure by such Indemnitee to pay any Tax which such Indemnitee is required by applicable Law to pay before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax payment,
unless (in each case) such failure is a result of:
(U) a failure by Lessee to provide as soon as reasonably practicable (and in any event within 60 days) after receipt of such Indemnitee’s request therefor, any information or documents that are reasonably requested by such Indemnitee and are in the possession or reasonable control of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or
(V) the willful misconduct or gross negligence of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or

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(W) a failure by Lessee to perform any of its obligations under this Lease, or
(X) an Event of Default, or
(Y) any circumstances beyond such Indemnitee’s reasonable control in any jurisdiction (other than the jurisdiction under the Laws of which such Indemnitee is incorporated or otherwise created and any jurisdiction in which an office or other fixed place of business of such Indemnitee is located) in which (1) any Item of Equipment is registered or used and (2) such Tax return is required to be filed or such Tax payment is required to be paid, or
(Z) any combination of the foregoing;
(vi) any Tax to the extent that such Tax would not have been payable but for a breach by such Indemnitee of any obligation of such Indemnitee under Section 21.3 or 21.4 hereof;
(vii) any Tax imposed on an Indemnitee to the extent such Tax is caused directly by, and would not have been incurred but for (A) the gross negligence or willful misconduct of any Indemnitee or (B) the inaccuracy or breach of any representation, warranty, covenant or agreement of such Indemnitee in this Lease or (C) the existence or enforcement of a Lessor’s Lien;
(viii) in the case of a Person that becomes the Lessor after the Delivery Date by acquiring its interest in the Aircraft and the Lease by sale, assignment or other transfer from a prior Lessor pursuant to Section 25.2, Taxes if and to the extent that the aggregate amount of such Taxes exceeds the aggregate amount of Taxes that would have been imposed on or payable by the transferor Lessor and for which Lessee would have been required to indemnify the transferor Lessor pursuant to this Article 21, determined under applicable Laws in effect on the effective date of the transfer by the transferor Lessor to the transferee Lessor (the “ Transfer Date ”) (or enacted prior to the Transfer Date and effective from and after the first anniversary of the Transfer Date if as of the Transfer Date the effect of such Laws on Lessee can be reasonably determined), provided that the exclusion in this clause (viii) shall not apply to a transferee Lessor that acquires its interest in the Aircraft pursuant to a transfer that occurs (A) in connection with or as a result of an Event of Default or (B) at Lessee’s request or (C) pursuant to a requirement in any Operative Document or any applicable Law and (for the avoidance of doubt) shall not apply to any Tax to the extent incurred or increased as a result of a change in any Law after the effective date of the transfer by the transferor Lessor to the transferee Lessor;
(ix) any Tax imposed on an Indemnitee to the extent that such Tax would not have been imposed but for an amendment to any Operative Document to which Lessee is not a party without the prior written consent of Lessee, unless such amendment occurs in connection with and during the continuance of an Event of Default or is required by applicable Law or is required by any Operative Document.
(c) No Reduction for Withholding . Lessee agrees that all amounts payable by Lessee (or by any other Person on account of any obligation of Lessee) pursuant to the Operative Documents

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shall be paid without any deduction or withholding on account of any Taxes, monetary transfer fees, or other charges or withholdings of any nature, except to the extent that the deduction or withholding of any Tax is required by applicable Law, in which event Lessee shall (i) pay to the Person entitled to receive such payment (the “ Payee ”) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any withholding with respect to such additional amount), an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made and (ii) deliver to Lessor within sixty (60) days after the date of such payment an official receipt of the relevant taxing authority (or, if an official receipt is not obtainable, other documentary evidence satisfactory to Lessor) showing that Lessee paid to such taxing authority the full amount of the Tax required to be deducted or withheld. If Lessee pays any additional amount to Lessor pursuant to clause (i) of the preceding sentence for any withholding Tax that is an Excluded Tax, then Lessor shall repay such additional amount to Lessee within thirty (30) days after receipt of Lessee’s written request therefor accompanied by the official receipt or other evidence of payment described in clause (ii) of the preceding sentence and a written statement describing in reasonable detail the reason that such withholding Tax is an Excluded Tax.
21.2. VAT.
(a) All amounts payable by Lessee pursuant to the Operative Documents are exclusive of VAT. Lessor and Lessee acknowledge and agree that any VAT that is required by any applicable Law to be paid with respect to any of the transactions, activities or payments contemplated in the Operative Documents is a Tax to which the provisions of this Article 21 apply.
(b) If requested by Lessor, Lessee shall deliver to Lessor on the Delivery Date and, thereafter, within thirty (30) days after receipt of Lessor’s written request made not more than annually during the Lease Term:
(i) a certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or
(ii) an Irish Revenue Form VAT 60B (or applicable successor form) with respect to this Lease,
to enable Lessor to comply with applicable Laws relating to VAT.
21.3. Lessor Tax Certificates. Prior to the first payment of Basic Rent hereunder, and thereafter as soon as reasonably practicable after receipt of Lessee’s written request therefor (but not more frequently than twice within any 12-month period):
(i) in the case of the Person that is Lessor on the date hereof, Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority confirming that Lessor is a resident of Ireland for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of Lessor as a resident of Ireland for the purposes of taxation; or
(ii) in the case of a Person that acquires its interest in this Lease and the Aircraft by transfer from a prior Lessor, such Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority of the country in which the principal place of business of such Lessor is located confirming that such Lessor is a

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resident of such country for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of such Lessor as a resident of such country for the purposes of taxation.
21.4. Withholding Tax Exemption Certificates. Each Indemnitee will deliver to Lessee, as soon as reasonably practicable after receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English) such forms, certifications, and other documents as (i) such Indemnitee is entitled under applicable Law to execute or obtain and (ii) are required by applicable Law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Lease without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable Law to withhold in the absence of such document, provided that in the case of any such document that must be executed or endorsed by any Governmental Authority or other taxing authority, the failure of such Indemnitee or Lessee to receive such document from such Governmental Authority or other taxing authority within a reasonable time shall not be deemed to be a failure to comply with this Section 21.4 so long as such Indemnitee is using commercially reasonable efforts to obtain such document, and provided , further , that no Indemnitee shall have any obligation to deliver any document requested by Lessee pursuant to this Section 21.4 if such Indemnitee determines in good faith that delivering such document would result in a risk that any Indemnitee could incur a liability, loss, cost or expense for which Lessee is not required by any Operative Document to indemnify such Indemnitee unless Lessee delivers to such Indemnitee a written undertaking to indemnify such Indemnitee on an After-Tax Basis for any such liability, loss, cost or expense in a manner reasonably satisfactory to such Indemnitee.
21.5. Tax Filings; Information .
(a) Unless otherwise directed or agreed in writing by Lessor, Lessee shall properly prepare and timely file all reports, returns, declarations and other documents (each a “ Tax Document ”) that are required by applicable Law to be filed with any Governmental Authority or other taxing authority with respect to each Indemnified Tax.
(b) Lessee shall (i) deliver to Lessor within thirty (30) days after receipt of Lessor’s written request, a certificate of an officer of Lessee, in form and substance satisfactory to Lessor, demonstrating compliance with Lessee’s covenants in Section 11.6 during the period or periods specified in Lessor’s written request, and (ii) deliver to each Indemnitee as soon as reasonably practicable (and in any event within thirty (30) days) after receipt of such Indemnitee’s written request therefor, such information and copies of such records and other documents (including, without limitation, the flight log for the Aircraft) maintained or required to be maintained by Lessee or by any other user of any Item of Equipment in the regular course of its business as such Indemnitee may request from time to time to enable such Indemnitee to comply with applicable Tax reporting, audit, audit dispute resolution, and litigation requirements, and if requested by any Indemnitee, make such information, records and other documents available for inspection by such Indemnitee or its authorised representatives.
21.6. Payment of Taxes and Indemnities .
(a) To the extent required or permitted by applicable Law, Lessee shall pay each Indemnified Tax when due directly to the proper taxing authority, unless otherwise directed or agreed in writing by Lessor.

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(b) Any indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days after the date on which Lessee receives such Indemnitee’s written demand therefor (which demand shall provide a description in reasonable detail of the applicable Indemnified Taxes and the calculation of the amount of the indemnity payment demanded).
(c) All amounts payable by Lessee pursuant to this Article 21 shall be paid on an After-Tax Basis.
21.7. Contest.
(a) If any Indemnitee receives a written claim from any taxing authority for any Indemnified Tax (a “ Tax Claim ”), such Indemnitee shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim.
(b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment of such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such indemnified Taxes and using reasonable efforts to obtain a refund thereof), and such Indemnitee shall not settle or compromise such Tax Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such Tax Claim without the prior written consent of Lessee (which consent shall not be unreasonably withheld), provided that such Indemnitee shall have the right to refuse to begin or continue (or to permit Lessee to begin or continue) the contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (y) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements).
(c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest:
(i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing;
(ii) contesting such Tax Claim would not, in the opinion of Lessor, result in any risk of criminal or civil penalty or any reasonable possibility of any sale forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the

	  	67	  	ARTICLE 21
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subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein;
(iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if the Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, the sum of (A) the amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency);
(iv) if such Indemnitee decides to contest such Tax Claim by paying the Indemnified Tax that is the subject of such Tax Claim and taking action to obtain a refund thereof, Lessee shall have made an interest-free advance to such Indemnitee in an amount equal to the amount of the Indemnified Tax and shall have delivered to such Indemnitee a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse Tax consequences to such Indemnitee or any of its Affiliates resulting from such interest-free advance;
(v) Lessee shall be paying, on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements);
(vi) if requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and
(vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim.
(d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “ Tax Saving ”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “ Refund ”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of:
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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 	(1)	the lesser of (x) the amount of such Tax Saving or Refund (as the case may be) minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such Refund or Tax Saving, or (y) the amount of the Indemnified Tax or indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus	
 
 	(2)	the amount of interest (if any) received by such Indemnitee on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such interest, provided that such Indemnitee shall not thereby be in a less favorable position than it would have been in if the Indemnified Tax had not been paid or incurred. A written statement of such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and interest shall be final and conclusive, except for any manifest error.	
(e) Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that are reasonably requested by Lessee and are in the possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax pursuant to this Section 21.7, provided , however , that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration or other document or information relating solely to one or more Excluded Taxes or (ii) in the case of any return, report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration or other document or information that relates to Excluded Taxes.
(f) Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Indemnitee pursuant to Section 21.1, without regard to the exclusions in Section 21.1(b) and without regard to the contest provisions of Sections 21.7(a) and 21.7(b).
21.8. Survival. The respective obligations of Lessee and Lessor under this Article 21 shall remain in full force and effect, notwithstanding the occurrence of the Termination Date.
21.9. Change in Circumstances; Mitigation. If Lessee incurs an indemnity liability under Section 21.1(a) or 21.1(c) or if it becomes reasonably foreseeable that Lessee would (but for this Section 21.9) incur an indemnity liability under Section 21.1(a) or 21.1(c), then if requested by Lessee in writing, Lessor shall consult with Lessee in good faith with a view to restructuring the transactions contemplated in this Lease so that the indemnity liability can be avoided or minimized, provided that no Indemnitee shall have any obligation to take any action pursuant to this Section 21.9 if such Indemnitee determines in good faith that taking such action may result in a material economic, legal or regulatory disadvantage to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee (as invoiced by Lessor or such other Indemnitee to Lessee and supported by evidence of such cost reasonably acceptable to Lessee), in connection with the consideration, negotiation, documentation, or closing of any restructuring requested by Lessee pursuant to this Section 21.9.

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22.	RETURN OF AIRCRAFT	
22.1. Time and Place. On the Scheduled Termination Date (or, if applicable, the Termination Date if such date is prior to the Scheduled Termination Date) and unless the Aircraft has suffered an Event of Loss, Lessee, at its own expense, shall return the Aircraft to Lessor at the Redelivery Location. Lessor and Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any exceptions thereto, by executing a Return Acceptance Certificate. Unless a Default or an Event of Default shall have occurred and be continuing or unless this Lease shall have been cancelled by Lessor pursuant to Article 24, upon such execution and delivery, this Lease shall terminate, with neither party hereto having any further liability to the other hereunder except for those Obligations which specifically survive the expiration, cancellation or termination of this Lease or as are otherwise reserved in accordance with such Return Acceptance Certificate. If an Event of Default occurs by Lessee failing to complete Return on the Scheduled Termination Date or if an Event of Default occurs prior to or after the Scheduled Termination Date and Lessor exercises its remedy to thereafter repossess the Aircraft, Lessee is nonetheless obligated to comply, and to have the Aircraft comply, with the return requirements set forth in this Article 22 on the date of actual Return or repossession by Lessor.
22.2. Condition. Upon return of the Aircraft pursuant to Section 22.1, Lessee shall comply with the requirements of Appendix 2E and shall return the Aircraft in a condition in compliance with the provisions of this Lease, including this Article 22 and Appendix 2E.
22.3. Lessee’s Continuing Obligations.
(a) If Lessee shall, for any reason whatsoever, fail to return the Aircraft in a timely manner in the condition specified in this Lease, the Obligations of Lessee shall continue and the Lease Term shall be deemed to be extended, day-to-day, until Return of the Aircraft; provided that this paragraph shall not be construed as permitting Lessee to fail to meet its Obligation to return the Aircraft in accordance with the requirements of this Lease and shall not constitute a waiver by Lessor of any Default or Event of Default arising out of such failure or prejudice the rights of Lessor under Article 24 with respect thereto.
(b) If the Aircraft is not returned to Lessor in accordance with this Lease on the Scheduled Termination Date:
(i) with effect from and including the Scheduled Termination Date, Basic Rent shall continue to be payable at the daily rate of one-thirtieth (1/30) of the Basic Rent otherwise payable hereunder; and with effect from and including the fifteenth (15 th ) day following the Scheduled Termination Date, Basic Rent shall be payable at the daily rate of one-twentieth (1/20) of the Basic Rent otherwise payable hereunder; and with effect from and including the thirtieth (30 th ) day following the Scheduled Termination Date, Basic Rent shall thereafter be payable at the daily rate of one-fifteenth (1/15) of the Basic Rent otherwise payable hereunder; and
(ii) payments in respect of Maintenance Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis, prorated on a daily basis based on a month consisting of thirty (30) days;
each of which amounts shall be paid by Lessee at the earlier to occur of each next Rent Payment Date and Return. Notwithstanding the foregoing, in the event Lessee is unable to return the Aircraft to Lessor in accordance with this Lease on the Scheduled Termination Date primarily as a result of any act or omission of Lessor or any Person lawfully claiming by or through Lessor, Lessee’s continuing Basic Rent payment obligations as set forth in sub-Section (i) shall not apply.

	  	70	  	ARTICLE 22
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(c) Lessor may elect, in its sole and absolute discretion and without prejudice to its rights under this Lease, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 22 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to accomplish such correction. Any direct, documented, out-of-pocket expenses incurred by Lessor for such correction will become Supplemental Rent payable by Lessee on demand following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such corrections in reasonable detail. Lessee’s Obligation to pay such Supplemental Rent will survive the Termination Date and until such time that the Aircraft is put into the condition required for Return and Lessee’s remaining Obligations due for performance on the Termination Date have been performed in full.
22.4. Legal Status Upon Return. At Return, the Aircraft shall be:
(a) free and clear of all Liens, except Lessor’s Liens; and
(b) duly registered in the name of Lessee, as lessee, and evidencing the ownership interest of Owner to the extent permitted under the Law of the State of Registration of the Aircraft.
At Return, Lessee shall, at its own cost and expense, procure or cooperate with Lessor in procuring the immediate deregistration of the Aircraft from the Register (including, without limitation, execution and delivery by Lessee of such documents as may be required to de-register the Aircraft from the Register and to terminate the Lease or to evidence the expiration, termination or cancellation of the Lease).
22.5. Airport and Navigation Charges. Lessee shall ensure that upon Return any and all airport, navigation and other similar charges in connection with the use and operation of the Aircraft or any other aircraft operated by or in Lessee’s fleet of aircraft which give rise or would if unpaid give rise to any Lien in relation to the Aircraft or any Item of Equipment have been paid and discharged in full and will at Lessor’s written request produce reasonable evidence thereof reasonably satisfactory to Lessor.

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RETURN OF AIRCRAFT	

23.	EVENTS OF DEFAULT	
Any one or more of the following events shall constitute an “ Event of Default ” under this Lease:
(a) Lessee shall fail to make any payment of Rent or in respect of Maintenance Reserves when due hereunder and such failure shall continue for five (5) Business Days; or
(b) Lessee shall fail to procure and maintain the Insurances, or Lessee shall operate the Aircraft at a time when or in a place where such Insurances shall not be in effect or otherwise outside the scope of coverage of the Insurances or Lessee fails to comply with the provisions of Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or
(c) Lessee shall fail to timely comply with the provisions of Article 4 (Security Deposit); or
(d) Lessee shall fail to timely comply with its Obligation to accept delivery of the Aircraft when validly tendered by Lessor hereunder, or Lessee fails in any material respect to satisfy the conditions precedent for Delivery under Article 7 hereof; or
(e) Lessee shall fail to timely comply with its Obligation to complete Return of the Aircraft to Lessor on the Scheduled Termination Date or, if applicable, the Relevant Date as defined in Section 27.1(b) and such failure is not primarily attributable to any act or omission of Lessor or any Person lawfully claiming by or through Lessor; provided that so long as Lessee is diligently endeavoring to return the Aircraft to Lessor in accordance with the provisions of this Lease, the time for compliance shall be extended for a period of up to fifteen (15) days from the Scheduled Termination Date or the Relevant Date, as the case may be; or
(f) Lessee (i) voluntarily suspends substantially all of its airline operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee are revoked, cancelled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline, or (ii) ceases to be a commercial air carrier or ceases to hold its current air operator’s certificate (or equivalent); or
(g) Any representation or warranty made by Lessee herein or in any document or certificate furnished to Lessor in connection herewith or pursuant hereto shall prove to have been incorrect in any material respect when made, and if capable of cure, is not cured within thirty (30) days of receipt of notice of the same; or
(h) The occurrence of a Related Lease Event of Default or an event of default (as defined therein) or material breach of any obligation under any Operative Document, which event of default or material breach is not cured within any applicable cure period set forth therein;
(i) Lessee shall at any time fail to maintain the Items of Equipment in accordance with the provisions of this Lease or to promptly correct any discrepancy which renders the Aircraft or any Item of Equipment unairworthy so that a current and valid certificate of airworthiness and continuing authority to operate the Aircraft in commercial revenue service by the Aeronautics Authority cannot be or is not maintained for the Aircraft; provided , however , that it shall not be deemed to be an Event of Default if all Airbus A319 series aircraft are the subject of a grounding order issued by the Aeronautics Authority or the EASA, unless Lessee fails to comply with any instructions to correct the reason(s) for such grounding order promptly following the issuance thereof or fails to make diligent efforts to obtain any necessary parts required for such correction, but giving due regard to the management of such corrections on a fleet-wide basis; or

	  	72	  	ARTICLE 23
EVENTS OF DEFAULT	

(j) This Lease, any Related Lease or any assignment for security of any Permitted Sublease shall cease to be a valid and enforceable agreement and in full force and effect for any reason due to any action or inaction of Lessee in breach of its obligations hereunder or Lessee otherwise repudiates the same; or
(k) Lessee shall fail to comply with its obligations pursuant to Sections 12.12(a) (Installation of other Engines), 17.5 (Perfection of Title), 17.6 (Cape Town Convention) or 17.7 (Permitted Liens) and such failure shall continue for a period of five (5) Business Days after notice thereof is given by Lessor to Lessee; or
(l) Lessee shall fail to perform or observe in any material respect any other of the covenants, conditions, or agreements to be performed or observed by it hereunder and such failure shall continue for a period in excess of thirty (30) days after written notice thereof is given by Lessor to Lessee of such failure; or
(m) Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for thirty (30) days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; or
(n)(i) Lessee shall commence any case, proceeding or other action (A) under any existing or future Law relating to bankruptcy, insolvency, examinership, administration, reorganisation or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Lessee any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Lessee any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Lessee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Lessee shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.
Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its Obligations.

	  	73	  	ARTICLE 23
EVENTS OF DEFAULT	

24.	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	
24.1. Lessor’s Rights Following an Event of Default. At any time after the occurrence and continuation of an Event of Default Lessor may treat such event as a repudiation by Lessee of the Lease generally and of its Obligations and may:
(a) in the event of the occurrence and continuation of an Event of Default before Delivery, by notice to Lessee terminate its obligation to lease the Aircraft to Lessee hereunder; and/or
(b) proceed by appropriate court action to enforce performance by Lessee of the applicable covenants and provisions of this Lease or the other Operative Documents or to recover damages for the breach thereof; and/or
(c) by notice to Lessee, (i) require the grounding of the Aircraft and or (ii) cancel this Lease on and as of the date specified in such notice and (without further notice to Lessee) retake possession of the Aircraft, and Lessee agrees that Lessor may by its agents or representatives for this purpose enter upon Lessee’s premises where the Aircraft may be located or cause the same to be redelivered to Lessor, and Lessor shall be entitled to act as attorney for Lessee in causing such redelivery or in directing pilots to fly the Aircraft to said airport for redelivery thereof to Lessor and shall have all the powers and authorisations legally necessary for taking such action (at Lessor’s election); and/or
(d) do anything that may be required to cure the Event of Default (notwithstanding Lessor having no obligation or responsibility to do so and without prejudice to Lessor’s right to treat any such non-compliance by Lessee as an Event of Default under this Lease) and recover from Lessee all costs and expenses incurred in doing so; and/or
(e) with or without taking possession thereof, sell all the Aircraft or any Item of Equipment at public or private sale, with or without advertisement, for cash or upon credit, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Aircraft or any Item of Equipment as Lessor in its sole discretion may determine appropriate, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds thereof, all in such manner and on such terms as Lessor considers appropriate in its absolute discretion, as if this Lease had never been entered into; and/or
(f) require Lessee to pay to Lessor all amounts due and payable by Lessee to Lessor and/or any Indemnitee under the Operative Documents to which it is a party as of the date of termination or cancellation of this Lease; and/or
(g) require Lessee to pay to Lessor on demand and to indemnify Lessor for, from and against all damages, costs, fees, disbursements and expenses incurred or recoverable (pursuant to Article 2A (Uniform Commercial Code – Leases) or other applicable Law) by Lessor or in connection with such Event of Default, including, but not limited to:
(i) all losses, including lost profits (calculated on an After-Tax Basis) suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee or inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Lease and the other Operative Documents or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor upon a sale or other disposal of the Aircraft, is not as

	  	74	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES	

profitable to Lessor as leasing the Aircraft in accordance with the terms of this Lease and the other Operative Documents would have been, including, in each case, but without duplication, lost Rent payments during any remarketing period or during any period in which the Aircraft is placed in storage and which have not otherwise been paid by Lessee (and, without duplication, taking into account any expenses incurred by Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the Aircraft to meet the requirements of an alternative lessee); and
(ii) interest at the Past Due Rate on (A) any amounts due and payable by Lessee under this Lease, but not paid, and (B) any judgment against Lessee in respect of or related to this Lease or any other Operative Document issued by a court of competent authority until the same are paid in full; and
(iii) without duplication of any of the foregoing, any loss, cost, expense or liability sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Lease, including any costs, fees, disbursements and expenses incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing any Item of Equipment to the condition required by this Lease and (B) preparing any Item of Equipment for sale or lease, advertising the sale or lease of any such Items and selling or re-leasing the same; and
(iv) reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Default or Event of Default or the exercise of Lessor’s remedies with respect thereto; and/or
(h) without duplication of any of the foregoing, require Lessee to indemnify each Indemnitee on demand against any expense which such Indemnitee may sustain or incur as a result or consequence of such Event of Default, including (but not limited to) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or any Item of Equipment or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to any financings by Lessor or Owner in connection with this Lease, any Operative Document, any Item of Equipment or any rights thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums whatsoever paid or payable on account of funds borrowed, including funds borrowed in order to carry any unpaid Rent, any unpaid amount in respect of Maintenance Reserves, or other Obligations); and/or
(i) apply and/or set off against any Obligations and Lessor’s costs, damages, expenses and disbursements incurred in connection with such Event of Default, at Lessor’s discretion, all amounts paid to Lessor in respect of Maintenance Reserves or Security Deposit pursuant to this Lease, as well as any other amounts paid by Lessee under any Operative Document and Related Lease; and/or
(j) require Lessee to redeliver possession of the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require); and/or
(k) exercise any of the rights, and avail itself of any of the remedies, provided by Article 2A (Uniform Commercial Code—Leases) and, to the extent applicable, Article 9 (Uniform Commercial Code—Secured Transactions) of the New York Uniform Commercial Code; and/or

	  	75	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES	

(l) by notice to Lessee terminate Lessee’s right to any product support rights pursuant to Assignment of Warranties and Consent (Airframe) Agreement entered into between the parties and Manufacturer of the Airframe.
Without prejudice to Lessor’s other remedies under this Lease or any other Operative Document, Lessee agrees that the occurrence of an Event of Default shall entitle Lessor to automatically and unilaterally cancel or terminate this Lease without requirement of any prior notice or judicial intervention for all legal purposes. All costs and expenses incurred or advanced by Lessor for or on account of any Obligations following the occurrence and continuation of an Event of Default shall bear interest at the Past Due Rate from the date on which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment, if any).
24.2. De-Registration. If an Event of Default occurs and is continuing following Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) de-registration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease. Lessee hereby irrevocably and by way of security for its obligations under this Lease appoints (which appointment is coupled with an interest) Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing.
24.3. Present Value of Payments. In calculating Lessor’s damages hereunder, upon the occurrence of an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred, together with amounts, if any, scheduled to be paid by a new lessee after any re-lease of the Aircraft, will be calculated on a present value basis using a discount rate of ***** per annum, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof.
24.4. Remedies Cumulative. No remedy referred to in this Article 24 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
24.5. Lessor’s Exercise of Remedies. In effecting any repossession of the Aircraft (including the Aircraft Documents, any Item of Equipment, an Engine, or Part) (“ Repossessed Items ”), Lessor and its representatives and agents, to the extent permitted by Law, shall:
(a) have the right to enter upon any premises where it reasonably believes the Repossessed Items to be located;
(b) not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to any of the Repossessed Items; provided , however , that Lessor shall return to Lessee all personal property of Lessee and other Persons, including its employees or its passengers, which was on the Aircraft at the time Lessor repossessed the Aircraft;
(c) not be liable or responsible, in any manner, for any inadvertent damage to any of Lessee’s property in repossessing and holding any of the Repossessed Items, except to the extent caused directly by Lessor’s gross negligence or willful misconduct; and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	76	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES	

(d) have the right to maintain possession of and dispose of the Repossessed Items on any premises owned by Lessee or under Lessee’s control.
24.6. Application of Payments Following Default or Event of Default. Any and all payments received by Lessor under this Lease and under any other Operative Document following the occurrence and continuation of a Default or Event of Default, whether in respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to the Obligations of Lessee in any manner or order as Lessor may determine in its sole discretion, notwithstanding any instructions, directions or notice given by Lessee or any other Person with respect to the application of such payments.
24.7. Use of Termination Date. If this Lease is cancelled or the leasing of the Aircraft is otherwise terminated and the Aircraft is repossessed in connection with Lessor’s exercise of remedies following the occurrence and during the continuation of an Event of Default prior to the Scheduled Termination Date, then notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Scheduled Termination Date” will be utilised in calculating the damages to which Lessor may be entitled to receive from Lessee pursuant to Section 24.1.

	  	77	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES	

25.	ASSIGNMENT AND TRANSFER	
25.1. No Assignment by Lessee. Except as permitted by Section 15.1, Lessee shall not transfer, assign, novate, mortgage or complete any other such or similar transfer of any interest in this Lease or any of its rights hereunder or in any Item of Equipment, and any such purported assignment shall be void ab initio . 
25.2. Transfer of Lessor’s and/or Owner’s Interests. Each of Lessor, Owner, any Owner Participant and any Financing Party may at any time and without Lessee’s consent transfer to any Person (a “ Transferee ”) the Aircraft and/or all or any of its rights and obligations under this Lease and the other Operative Documents to which it is a party; provided that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party or its rights in respect of the Aircraft or any Item of Equipment, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer had not taken place; (ii) at the time of transfer, the Transferee shall have a net worth of no less than *****, or the obligations of Lessor under the Lease shall have been guaranteed by a guarantor having a net worth of no less than *****, or Transferee shall have agreed to hold all Security Deposits, Maintenance Reserves and insurance proceeds in excess of the Agreed Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer to or by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Lessee acknowledges that neither minimal increases in Lessee’s administrative obligations, including expenses, nor an increase in the number of Indemnitees and/or Additional Insureds as a result of such transfer shall not, in and of itself, constitute an increase in Lessee’s obligations hereunder. The foregoing shall apply with the same force and effect to the transfer of any beneficial interest in the Aircraft or any trust or similar entity.
25.3. Cooperation with Transfers. Lessee shall do such things and execute such documents as may be reasonably requested of it to give effect to a transfer contemplated by and made or to be made in accordance with the terms and provisions of Section 25.2, including (a) entering into an assignment and assumption agreement or novation deed with the Transferee in form and substance reasonably satisfactory to Lessee, and (b) providing Lessor reasonably requested scheduling and routing information for the Aircraft or the Item of Equipment being transferred. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses reasonably incurred by Lessee in connection with such transfer. Lessee shall make such amendments to the stated contracts and list of Additional Insureds in respect of the Insurances effected in respect of the Aircraft so as to ensure continued compliance with the requirements of Article 19 with regard to the interests of such Transferee and any new Financing Parties and shall provide to Lessor updated documentation evidencing such amendments.
25.4. Financings. Owner, Lessor and any Owner Participant may at any time and without Lessee’s consent enter into any financing arrangements (which may include the conversion of the lease transaction contemplated by this Lease to a “leveraged lease” structure, a “head-lease, sub-lease” or other lease structure) with respect to the Aircraft pursuant to which (a) Lessor may assign its rights under this Lease and the other Operative Documents (by way of security) to Owner or to any Financing Parties and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	78	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

(b) Owner may execute a mortgage over the Aircraft in favour of the Financing Parties; provided , that (i) no such financing transaction shall increase Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional liabilities or obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party, based on laws enacted or in effect at the time of such transfer, than it would have had if such transfer had not taken place; (ii) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Basic Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Such financing arrangements may also take the form of a securitisation (a “ Securitisation ”) involving one or more loans from one or more financial institutions (each a “ Lender ”), and/or with notes, loan certificates, or pass through certificates issued pursuant to an indenture with a trustee (the “ Trustee ”), which notes, loan certificates or pass through certificates may be guaranteed (in whole or in part) by one or more monoline insurers (each, a “ Financial Guarantor ”).
25.5. Cooperation with Financings. Lessee shall cooperate with Lessor and do such things and execute such documents and make such filings and registrations in the State of Registration as may be requested of it by Lessor and/or Owner in order to protect the interests of the Financing Parties and/or Owner in connection with any financing contemplated by and made or to be made in accordance with the terms and provisions of Section 25.4 including, without limitation, (a) executing an acknowledgement of any assignment of Lessor’s rights under this Lease in favour of Owner or any relevant Financing Party, on terms customary in aircraft financing transactions or Securitisations, (b) providing Lessor scheduling and routing information for the Aircraft or any Item of Equipment being financed, (c) making such amendments to this Lease and any of the other Operative Documents and executing such additional documents, as may be reasonably be requested by Lessor in connection with the Securitisation, provided that any such amendment or additional documentation does not adversely affect the rights, or materially increase the obligations, of Lessee under the Lease and Operative Documents, and (d) making such amendments to the Insurances maintained in respect of the Aircraft to ensure continued compliance with the requirements of Article 19 with regard to the interests of Owner and any such Financing Party, and shall provide to Lessor updated documentation evidencing such amendments. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses incurred by Lessee in connection with such financing transaction.

	  	79	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

26.	LAW AND JURISDICTION	
26.1. Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
26.2. Consent to Jurisdiction. Each of Lessee and Lessor hereby expressly and irrevocably consents that any legal action or proceeding with respect to this Lease may be brought in any court of the State of New York or any Federal court of the United States of America located in New York, New York, located in the Borough of Manhattan, United States of America, or in any jurisdiction where Lessee or Lessor or any of their respective assets may be found, and by execution and delivery of this Lease, each of Lessee and Lessor hereby irrevocably and expressly submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts, irrevocably and expressly waiving the jurisdiction of any other courts to which it may be entitled by reason of its present or future domicile or otherwise.
26.3. Process Agent and Service of Process. Lessee shall, not later than the execution date of this Lease, irrevocably designate, appoint and empower a duly authorised agent for service of process in the State of New York reasonably acceptable to Lessor in any suit or proceeding with respect to this Lease. A copy of any such process served on such agent shall be promptly forwarded by airmail by the person commencing such proceeding to Lessee at its address set forth in Appendix 2B, Section 6, but the failure of Lessee to receive such copies shall not affect in any way the service of such process as aforesaid. Lessee further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to Lessee at its address set forth in Appendix 2B, Section 6. The foregoing, however, shall not limit the rights of Lessor to serve process in any other manner permitted by Law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction.
26.4. Jurisdiction and Forum. Lessee agrees that final judgment against Lessee in any action or proceeding in connection with this Lease shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of Lessee’s indebtedness. Lessee hereby irrevocably waives, to the fullest extent permitted by Law, any objection which Lessee may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the State of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York has been brought in an inconvenient forum. To the extent that Lessee may in any jurisdiction in which proceedings may at any time be taken for the determination of any question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom) be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the Law of such jurisdiction.
26.5. Waiver of Jury Trial. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR

	  	80	  	ARTICLE 26
LAW AND JURISDICTION	

OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
26.6. Waiver of Immunity. Each party to this Lease agrees that in any legal action or proceedings against it or its assets in connection with this Lease and/or any other Operative Document no immunity from such legal action or proceedings (which shall include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) shall be claimed by or on behalf of it or with respect to its assets, irrevocably waives any such right of immunity which it or its assets now have or may hereafter acquire or which may be attributed to it or its assets and consents generally in respect of any such legal action or proceedings to the giving of any relief or the issue of any process in connection with such action or proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order of judgment which may be made or given in such action or proceedings.

	  	81	  	ARTICLE 26
LAW AND JURISDICTION	

27.	MISCELLANEOUS	
27.1. Severability and Illegality .
(a) Severability . Any provision of this Lease prohibited by or unlawful or unenforceable under any applicable Law actually applied by any court of competent jurisdiction shall, to the extent required by such Law, be severed from this Lease and rendered ineffective so far as is possible without modifying the remaining provisions of this Lease.
(b) Illegality .
(i) If at any time there is a change in any applicable Law binding upon Lessee or Lessor in its State of Organisation or where it has its principal office or in any jurisdiction in which any action is required to be performed by it for the purposes of any Operative Document which renders, or which will render, it unlawful for such party to perform any of its obligations or to exercise any of its rights under any Operative Document (an “ Illegality Event ”) and the parties are not able to restructure the transaction in accordance with Section 27.1(b)(iii), Lessor or Lessee (as the case may be) shall forthwith notify the other party hereto and Lessor or Lessee (as the case may be) shall be entitled by written notice (the “ Illegality Notice ”) to the other party, either:
(A) to terminate its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease; or
(B) if such event occurs after the Delivery Date, to terminate the Lease Term,
in each such case, on the Relevant Date.
(ii) In Section 27.1(b) “ Relevant Date ” means the later to occur of:
(A) the date of the Illegality Notice; and
(B) a future date specified in the Illegality Notice being prior to the date on which the Illegality Event takes effect.
(iii) Lessor and Lessee shall, for a period of ninety (90) days from the date Lessor or Lessee becomes aware that an Illegality Event will arise or has arisen, or such shorter period ending on the Business Day prior to the date on which such Illegality Event takes place, and provided that no Event of Default has occurred and is continuing, negotiate in good faith and take all commercially reasonable steps (subject to Section 27.1(b)(iv) below) which are available to mitigate the effects of such Illegality Event, with a view to restructuring the transaction in a manner such that the leasing of the Aircraft to Lessee may continue on the same commercial terms as under this Lease, including, without limitation, by way of amendment, novation or replacement to any Operative Document, or termination of, any Operative Document.
(iv) Nothing in Section 27.1(b)(iii) above shall, or shall be construed so as to, oblige Lessor to take any mitigating steps (including, without limitation, omitting to act) if, in its reasonable opinion, to do so:

	  	82	  	ARTICLE 27
MISCELLANEOUS	

(A) would or would be likely to involve it in any unlawful activity or any activity that is contrary to any Law; or
(B) unless indemnified to its satisfaction, would involve it in any cost, loss, liability or Tax disadvantage; or
(C) would be prejudicial to it, the Aircraft or the other Indemnitees.
(v) The cost of any mitigation pursuant to this Section 27.1(b) shall be for the account of Lessee.
(vi) If Lessor or Lessee shall have terminated the Lease Term or its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease in accordance with Section 27.1(b)(i), then on the Relevant Date, Lessee shall:
(A) return the Aircraft to Lessor in accordance with the provisions of Article 22 if the Aircraft has been delivered to Lessee under this Lease, unless a Lessor Illegality Event has occurred in which case the Aircraft shall be returned to Lessor in its then as-is condition, but in any event, having been operated and maintained throughout the Lease Term in accordance with the provisions of this Lease; and
(B) pay to Lessor the amounts provided in Section 24.1, clauses (f), (g) and (h), and Section 24.3 as if references therein to an “Event of Default” were to the termination of the Lease Term pursuant to Section 27.1(b)(i).
27.2. Amendments. No term or provision of this Lease may be amended, modified, waived, discharged or terminated orally, but only by a written instrument signed by Lessor and Lessee.
27.3. Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer.
(a) If Lessee fails to perform or comply with any Obligations, Lessor shall have the right, but not the obligation, to discharge such obligation, and the amount of such payment made and the expenses of Lessor incurred in connection with such discharge shall be payable by Lessee upon demand, together with interest at the Past Due Rate from the date such expenses were incurred.
(b) Lessor may delegate to any Person or Persons (the “ Servicer ”) all or any of the rights, powers or discretions vested in it by this Lease or any of the other Operative Documents, and any such delegation may be made upon such terms and conditions and subject to such regulations (including the power to sub-delegate) as Lessor in its absolute discretion deems fit. Upon notice to Lessee of the appointment of such a Servicer, such Servicer may act as Lessor’s or Owner’s services for all matters related to this Lease and the Aircraft, and Lessee agrees that it shall communicate with and deal with such Servicer with respect to all such matters as if the Servicer were the Lessor under this Lease.
27.4. Counterparts. This Lease may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease may be created through the transfer or possession of any counterpart other than the counterpart which has been marked “Original” on the signature page thereof.

	  	83	  	ARTICLE 27
MISCELLANEOUS	

27.5. Delivery of Documents by Electronic Means. Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or other electronic image file will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or other electronic image file will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
27.6. Survival. The representations, warranties, covenants, agreements and indemnities (including, without limitation, the indemnities contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the Termination Date to the extent required for full performance and satisfaction thereof.
27.7. Entire Lease. This Lease (including all Appendices) and the other Operative Documents executed pursuant hereto constitute the entire agreement between Lessor and Lessee regarding the Aircraft and any prior or contemporaneous written or oral understandings with regard to the subject matter hereof are superseded hereby in their entirety.
27.8. Successors and Assigns. Subject to the provisions of Article 25, the terms and provisions of this Lease and each other Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns.
27.9. Brokers. Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorney’s fees and disbursements) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the lease of the Aircraft, if such claim, damage, cost or expense arises out of any action or alleged action by the indemnifying party, its employees or agents. It is understood and agreed between the parties that this Lease has been concluded by direct negotiation without any intermediaries or agents. Lessee hereby represents and warrants that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Lease, to any employee of Lessor or to any Person.
27.10. Transaction Costs. Whether or not the transactions contemplated hereby are consummated, each party hereto agrees to pay its own costs and expenses incurred in connection with the preparation, execution and delivery of this Lease and any other documents delivered in connection herewith, including without limitation the fees, expenses and disbursements of counsel, except as otherwise expressly set forth herein. In addition, Lessee shall be solely responsible for (i) all costs, including attorneys’ fees and disbursements, incurred in registering the Aircraft and an executed counterpart of this Lease and the Lease Supplement in the State of Registration and any other jurisdiction wherein registration of the same is necessary as a result of the operation of the Aircraft by Lessee or any Permitted Sublessee, and (ii) all costs, including attorneys’ fees and disbursements, incurred in connection with the de-registration of the Aircraft from the Register or any other applicable Aeronautics Authority upon the cancellation or termination of this Lease in accordance with the provisions hereof. Each of Lessor and Lessee agrees to pay the reasonable costs and expenses (including attorneys’ fees and disbursements) of the other party incurred in connection with the entering into or giving or withholding of any future waiver, supplement or amendment or other action with respect to the Lease or any other document delivered in connection therewith that it may request, except in the case of an Event of Default in which case all of such costs shall be at the expense of Lessee.

	  	84	  	ARTICLE 27
MISCELLANEOUS	

27.11. Time is of the Essence. Time and strict and punctual performance are of the essence with respect to each provision of this Lease.
27.12. Language.
(a) This Lease is in the English language and all notices, opinions, financial statements and other documents given under this Lease shall be provided in the English language or, if not submitted in the English language, shall be accompanied by one certified copy of an English translation thereof for each copy of the foregoing so submitted.
(b) If this Lease or any other Operative Document is required to be translated into another language for the purposes of any filing or registration, (i) Lessee shall procure and pay for any such translation, and (ii) the English version shall prevail in the event of any conflict with any such non-English version
27.13. No Rights of Third Parties. No third parties, other than Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed to have a right to (x) benefit from, or (y) seek to enforce, any of the provisions of this Lease.
27.14. Delegation. Lessor may delegate to any appropriately licensed and/or experienced person(s) all or any of the rights, powers or discretions vested in it by this Lease or any other Operative Document and any such delegation may be made upon such terms and conditions as between such person and Lessor as Lessor in its absolute discretion may determine.
27.15. Further Assurances. Lessee shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by law or reasonably requested in writing by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purposes of this Lease and the other Operative Documents.
27.16. Rights at Law. Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of Lessor hereunder or under any other Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of Lessor under the Operative Documents (i) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (ii) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and (iii) shall be cumulative and not mutually exclusive and the exercise of one shall not be deemed a waiver of the right to exercise any other.
27.17. Confidentiality.
(a) During the Lease Term all Information shall remain confidential and the parties hereto and their respective Affiliates will use their respective reasonable efforts not to disclose the Information to any other Person without prior written consent of each other party, which consent shall not be unreasonably withheld; provided , that Lessor and Lessee may, without the consent of each other party, disclose the Information in any of the following situations:

	  	85	  	ARTICLE 27
MISCELLANEOUS	

(i) To directors, officers, employees, permitted assigns and agents of Lessor, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(ii) To auditors, accountants or legal advisors of Lessor, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(iii) To actual or potential lenders/Financing Parties, purchasers or other permitted assigns of Lessor, Lessee or any Affiliate of any of such parties, including but not limited to providing financial information about Lessee to potential lenders/Financing Parties to, and purchasers from, Lessor, provided that, upon the request of Lessee, such potential lenders/Financing Parties will agree to keep such Information confidential in a manner similar to the provisions hereunder and that their access to Information is solely for purposes of evaluating an investment in a Securitisation or other financing of the Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a form reasonably acceptable to Lessee; or
(iv) To rating agencies with respect to ratings of Lessor, Owner or an Owner Participant (if any) or a related Securitisation; or
(v) To such other parties as Lessor or Lessee may reasonably believe to be required by law, by government regulation or order (including, without limitation any regulation or order of a bank regulatory agency), by subpoena or by any other legal process.
(b) Notwithstanding any of the foregoing, Information will not be considered confidential, and Lessor and Lessee and their respective Affiliates may disclose any item of the Information without restriction in any of the following circumstances, if such item:
(i) is publicly available (either to the general public or to any relevant trade or industry) prior to any party’s receipt of it from another party hereto;
(ii) is thereafter made publicly available (either to the general public or to any relevant trade or industry) by another party hereto or by a third party which is entitled to make such item publicly available;
(iii) becomes available to any party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it; or
(iv) was known to any party hereto on a non-confidential basis prior to its disclosure to such party by another party hereto.
27.18. Notices. All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally, when telecopied, or if deposited in the mail, when received, to the addressees appearing in Appendix 2B, Section 6 or to such other address as any party may designate for itself by written notice to the other party or parties.

	  	86	  	ARTICLE 27
MISCELLANEOUS	

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of the 30 day of November 2009.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS)
Lessee	 		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	/s/ Fernando Suárez Gerard	 		 	By:	 	/s/ Thomas Schmid	
Name:	 	Fernando Suárez Gerard	 		 	Name:	 	Thomas Schmid	
Title:	 	CFO	 		 	Title:	 	Attorney-in-Fact	

By:	 	/s/ Andres Fabre	
Name:	 	Andres Fabre	
Title:	 	COO	
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

	  		  	SIGNATURE PAGE	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of the 30 day of November 2009.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS)
Lessee	 		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	/s/ Andres Fabre	 		 	By:	 	/s/ Thomas Schmid	
Name:	 	Andres Fabre	 		 	Name:	 	Thomas Schmid	
Title:	 	CFO	 		 	Title:	 	Attorney-in-Fact	

By:	 	/s/ Andres Fabre	
Name:	 	Andres Fabre	
Title:	 	COO	
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL”.

	  		  	SIGNATURE PAGE	

Appendix 1
to Aircraft Lease Agreement
DEFINITIONS
“ Acceptance Certificate ” means the acceptance certificate executed and delivered by Lessee to Lessor at Delivery in the form of Appendix 3.
“ Additional Insureds ” means the Indemnitees and each of them.
“ Aeronautics Authority ” means the DGAC or such other governmental department, bureau, commission or agency that under the Law of the State of Registration shall from time to time have control or supervision of civil aviation in that state or have jurisdiction over the registration, airworthiness, operation, or other matters relating to, the Aircraft.
“ Affiliate ” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified.
“ After-Tax Basis ” means, with respect to any indemnity or other amount (an “ Amount ”) which is required by any Operative Document to be paid on an “After-Tax Basis” by Lessee (or by any other Person on account of any Obligation of Lessee under the Operative Documents) to any Indemnitee (or to any other Person for the account or benefit of any Indemnitee), payment of such Amount supplemented to the extent necessary by a further payment or payments that will cause the sum of all such payments, reduced by the aggregate amount of all Taxes payable by any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments by any Indemnitee, net of any actual current reduction in any Indemnitee’s liability for Taxes caused by the allowance of any deduction, Tax credit or other Tax benefit for the Tax, Claim, cost or expense that gave rise to Lessee’s liability to pay such Amount, to be equal to the Amount that is required to be paid on an “After-Tax Basis”, provided , that for the purpose of calculating the amount of Taxes imposed on any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments, it shall be assumed that such Indemnitee is subject to each Tax that is imposed on or payable by such Indemnitee with respect to the accrual, actual receipt or constructive receipt of each such payment at the highest marginal statutory Tax rate applicable to such Indemnitee for the Tax accounting period in which such Indemnitee accrues or receives (actually or constructively) such payment.
“ Agreed Option(s) ” means a change to the Standard Specification by way of Specification Change Notices (SCNs) or other changes agreed in writing among Lessee, Lessor, Seller and, as applicable, CIT Leasing.
“ Agreed Value ” means, with respect to the Aircraft, the amount set forth in Appendix 2B.
“ Aircraft ” means, as the context may require or permit, the Airframe together with (i) the Engines, whether or not installed on the Airframe, (ii) all Parts or components thereof, (iii) any spare parts or ancillary equipment or devices furnished with the Airframe or the Engines under this Lease, (iv) all items of equipment and other property, tangible and intangible, described in the Detail Specification or in the Airframe Manufacturer’s Aircraft Inspection Report (“ AIRS Report ”) delivered on the Delivery Date and not otherwise described in the preceding portions of this definition, (v) all Aircraft Documents, (vi) all substitutions, replacements and renewals of any and all thereof, and (vii) all alterations, modifications and additions which may be made to, installed on or incorporated into the Aircraft, including but not limited to, those required pursuant to any Airworthiness Directive.

	  	App 1-1	  	APPENDIX 1
DEFINITIONS	

“ Aircraft Documents ” means, whether in paper, photographic, digital, electronic or other medium, (i) the manuals and records identified in the attachments to the Acceptance Certificate hereto and all other records and documentation pertaining to the Aircraft and delivered with the Aircraft on the Delivery Date and (ii) all other Required Approvals, records and documentation generated during the Lease Term that are related to the maintenance, inspections and alterations, modifications and additions accomplished during the Lease Term with respect to the Aircraft and required to be maintained by Lessee either by the Aeronautics Authority or in order to comply with the provisions of this Lease.
“ Airframe ” means the Airbus A319-100 aircraft (except for the Engines) as more specifically described in the Lease Supplement, together with the APU, all Landing Gear and any and all Parts.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued by the Certificating Authority, in addition to any airworthiness directive issued by the Aeronautics Authority, each to the extent the same is applicable to the Aircraft and/or any Item of Equipment.
“ Alert Service Bulletin ” means any service bulletin issued by a Manufacturer that is designated as such by such Manufacturer.
“ Approved Maintenance Organisation ” means the Manufacturer or a maintenance facility approved by the Aeronautics Authority and also by the FAA pursuant to FAR Part 145 and/or the EASA pursuant to EASA Part-145 for the performance of maintenance, testing, inspection, repair, overhaul or modification on the Aircraft or any Item of Equipment.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date, or any replacement thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to such auxiliary power unit and any and all Parts removed therefrom.
“ APU Cycle ” means one complete continuous operation of the APU beginning at the moment the APU is started and continuing until it subsequently shuts down.
“ APU Hour ” means each hour or part thereof, rounded to the nearest minute, elapsing from the moment the APU is started to the moment when the APU is shut down.
“ APU Overhaul Reserve ” has the meaning set forth in Appendix 2D, Section 3.B(i).
“ Assumed Reference Rate ” is the assumed Reference Rate appearing in Appendix 2B, Section 1.2(a).
“ Base Year Dollars ” means the value of Dollars in January 2008.
“ Basic Rent ” means the rent payable for the Aircraft for each Rent Period under this Lease in the amount determined in Appendix 2B, Section 1.
“ BFE ” means any equipment defined as buyer-furnished equipment under Seller’s standard specification and/or which is to be provided to the Seller for incorporation into the Aircraft regardless of whether such equipment is provided by or for and on behalf of Lessor as buyer-furnished equipment or provided by Seller at the direction of Lessor as seller-purchased equipment, seller-supplied or seller-furnished equipment.
“ Business Day ” means (a) in the case of payments under this Lease or any Operative Document, any day (other than Saturday or Sunday) on which banks are open for business in New York, United States of America; and (b) in all other cases, any day (other than Saturday or Sunday) on which banks are open for business in Ireland, the State of Registration and if different from the State of Registration, Lessee’s State of Organisation.

	  	App 1-2	  	APPENDIX 1
DEFINITIONS	

“C-Check” means with respect to the Aircraft, (i) the accomplishment of Tasks that, at the time of such check, would require accomplishment prior to the next due c-check based upon the interval for each such Task in the MPD, and where such Tasks are controlled by Flight Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the rectification of each defect discovered during the accomplishment of such Tasks.
“Cape Town Convention” means, together, the official English language text of each of the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Protocol ”) each as opened for signature on 16 November 2001 at Cape Town, South Africa.
“Cash Security Deposit” means the portion of the Security Deposit paid in cash in the amounts in Appendix 2B, Section 2.
“Certificating Authority” means the EASA.
“Certificating Authority Form” means an EASA Form One or an FAA Form 8130-3, any dual release form approved by both the EASA and the FAA, or any successor to either such forms.
“Claims” means any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any reasonable attorney’s fees and other reasonable and documented, out-of-pocket costs and expenses in connection therewith or in establishing the right to indemnification hereunder, including any of the foregoing arising or imposed with or without the fault or negligence of any Indemnitee (whether passive or active) or under the doctrine of strict or absolute liability.
“Credit Security Deposit” means the portion of the Security Deposit paid by Lessee in the form of a Security Letter of Credit in the amount specified in Appendix 2B, Section 2.
“CIT Leasing” means C.I.T. Leasing Corporation, a corporation organised under the laws of the State of Delaware, U.S.A. with its principal office located at 505 Fifth Avenue, 12 th  Floor, New York, New York, 10017, U.S.A.
“Customization Options Payment” has the meaning given in Appendix 2B, Section 1.
“Cycle” means one take-off and landing of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed).
“Default” means any event, condition or circumstance which, with the lapse of time and/or the giving of notice, would constitute an Event of Default.
“Delivery” means the delivery of the Aircraft by Lessor to Lessee in accordance with this Lease and which shall be evidenced by execution and delivery of the Lease Supplement and the Acceptance Certificate.
“Delivery Date” means the date on which Delivery occurs.
“Delivery Location” means the premises of the Airframe Manufacturer in Hamburg, Germany.

	  	App 1-3	  	APPENDIX 1
DEFINITIONS	

“Delivery Reference Rate” means the Reference Rate in effect three (3) Business Days prior to the Delivery Date and which shall, if Lessee elects to have the amount of Basic Rent fixed for the Lease Term, be specified in the Acceptance Certificate.
“Detail Specification” means the Standard Specification as the same has been modified by Agreed Options in accordance with the Lease.
“DGAC” means the Mexican General Department of Civil Aeronautics ( Dirección General de Aeronáutica Civil ) and any successor agency thereto established to regulate civil aircraft registered in the United Mexican States.
“Documents Loss” means the loss or destruction of the Aircraft Documents or any of them.
“Dollars” or “$” means the lawful currency of the U.S.
“EASA” means the European Aviation Safety Agency, an agency of the European Union having responsibility for aviation safety, regulation and oversight of member states of the European Union, or any Person, governmental department, bureau, commission or agency succeeding to the functions of the European Aviation Safety Agency.
“EASA Requirements” means, as applicable to the Aircraft, (i) any of the regulations, rules, or decisions of, or governing the EASA, and (ii) EU-OPS 1.
“Engine(s)” means each of the engines identified in the Lease Supplement, or any replacement of any thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to any such Engine and any and all Parts removed therefrom.
“Engine Agreed Value” means, with respect to each Engine when not installed on the Airframe, the amount set forth in Appendix 2B, Section 4.3.
“Engine Life Limited Parts Reserve” has the meaning set forth in Appendix 2D, Section 2.B(i).
“Engine Loss” means the occurrence of (a) an Event of Loss with respect to an Engine only (whether or not installed on the Airframe) or (b) any divestiture or impairment of any right, title or interest of Lessor in or to an Engine as a result of the installation of such Engine on any other airframe.
“Engine Restoration” means any engine shop visit having a workscope that at a minimum, includes a complete refurbishment or full overhaul of the high pressure turbine and combustion Section of the relevant Engine, accomplished in accordance with the Engine Manufacturer’s Engine Maintenance Management Program applicable to the Engine.
“Engine Restoration Reserve” has the meaning set forth in Appendix 2D, Section 2.A(i).
“Escalation” means the application of the revision formula set forth in Appendix 2C to an amount stated in Base Year Dollars and the adjusted amount resulting from such application being added to the originally stated amount.
“EU-OPS 1” means the technical requirements and administrative procedures implemented pursuant to Council Regulation (EEC) No. 3922/91, as amended by Regulation (EC) No. 1899/2006 of the European Parliament and Council of the EU, and as the same is further amended from time to time.

	  	App 1-4	  	APPENDIX 1
DEFINITIONS	

“European Union” or “ EU ” means the union of countries established pursuant to the Treaty of Maastricht, which came into effect on November 1, 1993, as amended by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the Treaty of Nice signed on February 26, 2001, and as may be amended from time to time.
“Event of Default” means those events and circumstances listed in Article 23.
“Event of Loss” means, with respect to any Item of Equipment (excluding Parts), any of the following events:
(a) the agreed, actual, arranged, compromised or constructive total loss of such Item (including any damage to the same which results in an insurance settlement on the basis of a total loss, or requisition for use or hire of the same which results in an insurance settlement on the basis of a total loss); or
(b) the destruction or damage that permanently renders such Item to be unfit for normal use for any reason whatsoever; or
(c) the requisition of title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, condemnation or confiscation for any reason of such Item by a Governmental Authority or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title of such Item; or
(d) the hijacking, theft, or disappearance of such Item (i) for a period of sixty (60) days or more or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(e) the condemnation, confiscation, capture, deprivation, seizure or requisition for use or hire of the Airframe or the deprivation of the possession or use of the Airframe as a result of any law or other action by the Aeronautics Authority or any Governmental Authority (other than where the same amounts to the circumstances provided in clause (c)) which deprives any Person entitled to have possession and/or use of the Item of its possession and/or use (i) for more than a period of sixty (60) consecutive days or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(f) any other case which by subsequent written agreement Lessor and Lessee may deem, with the agreement of the insurers, to be an Event of Loss.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“Event of Loss Date” means (a) with respect to any Event of Loss set forth in paragraph (a) of the definition thereof, the earliest of (i) the date of actual loss, (ii) the date on which the loss is agreed, arranged or compromised by the insurers and (iii) sixty (60) days after the date of notice to Lessee’s brokers or insurers claiming the loss, (b) with respect to any Event of Loss set forth in paragraph (b) or (c) of the definition thereof, the date such event, condition or circumstance occurs or, if such date is not known, the date on which the relevant property was last known to exist, (c) with respect to any Event of Loss set forth in paragraph (d) or (e) of the definition thereof, the earlier of (i) the date on which insurers make payment on the basis of an Event of Loss and (ii) the date falling thirty (30) days after the expiration of the period, or the continuation of the condition or circumstance beyond the date, described
therein or (d) with respect to any Event of Loss set forth in paragraph (f) of the definition thereof, the date of the subsequent agreement reached by Lessor and Lessee, with the agreement of the insurers.

	  	App 1-5	  	APPENDIX 1
DEFINITIONS	

“Event of Loss Proceeds” means the proceeds of any insurance required to be maintained by Lessee hereunder, or any compensation or similar payment arising, in respect of an Event of Loss.
“Excluded Taxes” has the meaning provided in Section 21.1(b) hereof.
“Excusable Delay” means any delay in Delivery not occasioned by the fault or negligence of Lessor and/or due to or arising from Lessor’s reasonable control including, without limitation, (i) acts of God or the public enemy, natural disasters, civil war, insurrection or riots, quarantine restrictions, strikes, lockouts, or labour stoppages (other than strikes, lockouts or labour stoppages of Lessor and/or its Affiliates), and/or (ii) fires, floods, explosions, earthquakes, epidemics or serious accidents, and/or (iii) delays relating to or arising out of Seller’s failure to deliver the Aircraft to Lessor.
“FAA” means the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any Person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“FAR” means the federal aviation regulations as set forth in Title 14 of the United States Code of Federal Regulations, Chapter 1 (Parts 1 - 199).
“Final Check” means the check to be accomplished by Lessee immediately prior to the redelivery of the Aircraft to Lessor as more specifically described in Appendix 2E, Section 3.1.
“Financing Party” means any Person or Persons, from time to time notified by Lessor to Lessee, from whom financing for the acquisition or continued ownership of the Aircraft by Lessor (or Owner if Lessor is not the Owner) has been, is to be, or is for the time being, obtained and/or in whose favour or for whose benefit security over the Aircraft is to be, or is for the time being, granted by Lessor or Owner (as the case may be), any Security Agent, Security Trustee, owner trust or trustee, manager, servicer, lender and/or financial guarantor.
“Flight Hour” means each hour or fraction thereof, measured to two decimal places, elapsing from the moment the wheels of the Airframe (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed) leave the ground on takeoff to the moment when the wheels of the Airframe (or such aircraft on which an Engine, Landing Gear, or Part is (or was) then currently installed) touch the ground on landing.
“GAAP” means (i) generally accepted accounting principles in effect in Mexico or (ii) International Financial Reporting Standards and International Accounting Standards (and interpretations thereof) as in effect at the relevant time, and applied on a basis consistent with prior periods except as may be disclosed in the pertinent Person’s financial statements.
“Governmental Authority” means and includes (whether having a distinct legal personality or not) (a) any national government, political subdivision thereof, or local jurisdiction therein, (b) any board, commission, department, division, organ, instrumentality, court or agency of any entity referred to in (a) above, however constituted, and (c) any association, organisation or institution (international or otherwise) of which any entity mentioned in (a) or (b) above is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

	  	App 1-6	  	APPENDIX 1
DEFINITIONS	

“Guarantee” means that certain guarantee provided to Lessor by the Guarantor pursuant to which Guarantor has fully and irrevocably guaranteed all of Lessee’s Obligations.
“Guarantor” means Controladora Vuela Compañía de Aviación, S.A. de C.V., a sociedad anónima de capital variable organized and existing under the laws of the United Mexican States.
“I.A.T.A.” means the International Air Transport Association.
“Indemnified Tax(es)” means any Tax for which Lessee has an obligation of indemnity pursuant to Article 21 of the Lease.
“Indemnitee” means Lessor, Owner, CIT Leasing, any Owner Participant, any Financing Party, and their respective Affiliates, officers, directors, shareholders, members, managers, duly authorised agents, employees and attorneys-in-fact and their respective successors and permitted assigns.
“Information” means the terms and conditions of this Lease and any other Operative Document and any other information delivered to any party to this Lease in connection with this Lease or any Operative Document.
“Insurances” means any and all contracts or policies of insurance (or reinsurance) required to be maintained from time to time under this Lease.
“International Registry” or “ IR ” means the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
“Item of Equipment” or “ Item ” means individually or collectively, as the context requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear, the APU and any of the Parts, whether or not installed in or attached to the Aircraft or the Airframe.
“Landing Gear” means the complete strut assembly of each landing gear installed on the Airframe on the Delivery Date (or any replacement for any such landing gear made pursuant to the terms of this Lease) and shall consist of the inner and outer cylinders of the main landing gear and the nose landing gear, including the truck assembly and axles of such landing gear.
“Landing Gear Overhaul Reserve” has the meaning set forth in Appendix 2D, Section 3.A(i).
“Law” means and includes (a) any statute, decree, constitution, regulation, rule, order, judgment, AD or other directive of any Governmental Authority; (b) any treaty, pact, compact or other agreement to which any Governmental Authority is a party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any of the foregoing.
“Lease” means this Aircraft Lease Agreement, including all appendices, exhibits and schedules hereto, as the same may be amended from time to time.
“Lease Supplement” means the lease supplement dated the Delivery Date in the form of Appendix 4.
“Lease Term” means the period appearing in Appendix 2A which otherwise commences on the Delivery Date and ends on the Termination Date.
“Lessee’s Actual Cost” means Lessee’s cost incurred in performing an Obligation under this Lease, determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then

	  	App 1-7	  	APPENDIX 1
DEFINITIONS	

Lessee’s Actual Cost shall be the actual charges, including, without limitation, shipping, freight mark-ups and handling charges of such third party charged to and paid by Lessee (but excluding shipping and freight charges and mark-ups, handling charges or overhead added by Lessee), and (ii) if Lessee elects that such obligation be performed by Lessee, then Lessee’s Actual Cost shall be ***** (which hourly labor rate shall be increased by ***** at each calendar anniversary of the Delivery Date during the Lease Term) plus Lessee’s direct cost for materials and services provided by third parties without Lessee-imposed mark-ups, handling charges or overhead added to such third-party charges by Lessee.
“Lessor Illegality Event” means any event which makes it illegal under applicable Law for Lessor to proceed with the transaction evidenced hereby because of illegality in Lessor’s State of Organization, or such illegality arises as a result of any act or omission of Lessor, other than:
(a) where caused due to any bi-lateral or United Nations sanctions applicable in Lessor’s State of Organization; or
(b) in circumstances where an Illegality Event has also occurred in Lessee’s State of Incorporation.
“Lessor’s Lien” means any Lien on the Aircraft or any Item of Equipment (i) granted to any Financing Party with respect to the Aircraft or any Item of Equipment except where the same are granted in connection with and following the occurrence of an Event of Default, (ii) arising as a result of any act of Lessor, Owner or any Affiliate of Lessor or Owner that is in violation of any of the obligations of such Person under the Lease and the other Operative Documents, (iii) any Claim against Lessor, Owner or any Affiliate of Lessor or Owner or any Person lawfully claiming by or through any of them that is unrelated to the transactions contemplated by the Lease, (iv) any Liens arising in connection with a Claim for which Lessee is not required to indemnify an Indemnitee hereunder; or (v) Taxes (including claims therefor) imposed on Lessor or any Affiliate of Lessor for which Lessee is not obligated to indemnify Lessor or such Affiliate pursuant to any of the Operative Documents.
“LIBOR” means, for any period, the three-month rate of interest per annum at which deposits in Dollars are offered to major banks in the London interbank market at approximately 11:00 a.m. (London time) three (3) Business Days before the first day of such period, as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as may replace such page on such system for the purpose of reporting London Interbank Offered Rates of major banks) under the heading for British Bankers Association Interest Settlement Rates in the column designated “USD” (U.S. Dollar).
“Lien” means any mortgage, charge, pledge, lien, hypothecation, lease, title retention, assignment, trust arrangement, right of possession or detention or security interest of any kind, howsoever created or arising.
“Life Limited Part” or “LLP ” means any Part that has a pre-determined life limit mandated by the Manufacturer or the Certificating Authority which requires any such Part to be discarded upon reaching such life limit.
“Lost Documents” means Aircraft Documents that have suffered a Documents Loss.
“Maintenance Check(s)” means the 6 Year HMV Check and/or 12 Year HMV Check performed or to be performed on the Airframe, any Engine Restoration performed or to be performed on an Engine, any Engine LLP replacement or any Overhaul performed or to be performed on any Landing Gear or the APU.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 1-8	  	APPENDIX 1
DEFINITIONS	

“Maintenance Program” mean Lessee’s maintenance program (as approved by the Aeronautics Authority) for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Aircraft and each Item of Equipment.
“Maintenance Reserve Claim” means any claim by Lessee for payment by Lessor from the applicable Maintenance Reserves of Reimbursable Expenses following completion by Lessee of a Maintenance Check.
“Maintenance Reserve(s)” means, collectively, as of any given time, the then current balance of payments received from Lessee and held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2D to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve, Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear Overhaul Reserve and APU Overhaul Reserve.
“Manufacturer” means, in the case of the Airframe, Seller, in the case of the Engines, IAE International Aero Engines AG, and in the case of any Item of Equipment, the manufacturer of such Item of Equipment.
“Manufacturer’s Repair Manual” means the most current revision of the respective (i) maintenance, repair or overhaul manual or (ii) the structural repair manual, each issued by the Manufacturer and applicable to the maintenance performed on the Aircraft or any Item of Equipment.
“Mortgage Convention” means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.
“MPD” means the Airframe Manufacturer’s Maintenance Planning Document, as revised from time to time to include all revisions up to and including the then most current revision issued by the Airframe Manufacturer.
“Net Event of Loss Proceeds” means any Event of Loss Proceeds actually received by Lessor or Owner (or such other person entitled to receipt thereof), less any expenses (including reasonable attorney’s fees and costs) and/or Taxes incurred by Lessor (or any other relevant Person) in connection with the collection or receipt of such funds which would not otherwise have been incurred by Lessor (or such other relevant Person) absent the occurrence of such Event of Loss.
“Obligations” means all of Lessee’s obligations and liabilities now existing or hereafter arising under any Operative Document.
“ Operative Document(s) ” means, either collectively or individually as the context requires, this Lease, the Lease Supplement, the Acceptance Certificate, the Participation Agreement, the Guarantee, any warranty assignment, acknowledgment and consent, any Permitted Sublease, the Security Letter of Credit (if any), and any and all other documents, instruments and agreements entered into in connection with any of the foregoing and to which Lessee is a party or which Lessee acknowledges, in writing, is an Operative Document.
“Outside Delivery Date” means the date that is specified in Appendix 2A.

	  	App 1-9	  	APPENDIX 1
DEFINITIONS	

“Overhaul” means (as applicable):
(i) with respect to any Landing Gear or Part, the complete refurbishment or major restoration of such Landing Gear or Part in accordance with the overhaul or restoration procedures in the respective Manufacturer’s Repair Manual for such Landing Gear or Part, the extent of which refurbishes or restores such Landing Gear or Part, as applicable, to a “zero time since overhaul” condition in accordance with such Manufacturer’s Repair Manual;
(ii) with respect to the APU, the complete refurbishment or restoration of the compressor, combustion Section and turbine of the APU pursuant to the Manufacturer’s Repair Manual; and
(iii) with respect to any Engine, an Engine Restoration.
“Owner” means Lessor in its capacity as owner of the Aircraft or such other Person as Lessor may notify Lessee in writing from time to time as being the owner of the Aircraft.
“Owner Participant” means any Person who owns a beneficial interest in the Aircraft through a trust or otherwise as Lessor may notify Lessee in writing from time to time, in accordance with the terms hereof.
“Part(s)” means all appliances, components, parts, instruments, appurtenances, accessories, furnishings, seats, BFE and other equipment and additions of whatever nature (other than Engines, the APU, any Landing Gear, and any temporary replacement parts installed pursuant to Article 12 of the Lease), which may from time to time be incorporated or installed in or attached to any Item of Equipment or which have been removed therefrom, but which remain associated with and/or form part of the Aircraft or any Item of Equipment pursuant to the terms of the Lease.
“Participation Agreement” means the agreement in the form of Appendix 5.
“Past Due Rate” means the lesser of (i) the rate per annum equal to LIBOR plus four hundred (400) basis points, and (ii) the maximum rate permitted by applicable Law.
“Permitted Liens” means those Liens expressly permitted pursuant to Section 17.7 hereof.
“Permitted Sublease” means any sublease of the Aircraft to a Permitted Sublessee permitted under the terms and subject to the conditions of this Lease.
“Permitted Sublessee” means a Person:
(a) which is a commercial passenger air carrier that holds the requisite licenses and approvals for the maintenance and operation of the Aircraft; and
(b) with respect to which, at the time such Person becomes a Permitted Sublessee pursuant to the terms and conditions of this Lease and for the term of any Permitted Sublease to which such Permitted Sublessee is a party, no proceeding is pending or shall be instituted in connection with any insolvency, bankruptcy, reorganisation, examinership, administration, liquidation, moratorium or other laws affecting the enforcement of creditors’ rights generally; and
(c) that is expressly consented to in writing by Lessor, which consent shall be in Lessor’s sole discretion, acting reasonably.

	  	App 1-10	  	APPENDIX 1
DEFINITIONS	

“Person” means an individual, general partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or limited partnership, Governmental Authority or other entity of whatever nature.
“Redelivery Location” means such airport in the continental United States of America as specified in writing by Lessor to Lessee no less than ten (10) Business Days prior to the Scheduled Termination Date, or such other location as may be agreed in writing by Lessor and Lessee prior to the Scheduled Termination Date for Return of the Aircraft.
“Reference Rate” means the relevant “Treasury Rate” which is the rate per annum equal to the yield for each of the U.S. Treasury Securities that matures nearest to the fifth (5 th)  anniversary of the determined Delivery Date, as reported for the Reuters Page 5 closing information shown on the following Business Day on Page 233 of the information ordinarily provided by Reuters America, or if such report or screen is unavailable, in The Wall Street Journal under the heading “Treasury Bonds, Notes & Bills” (and the subheading of “Ask Yld.” under “Govt. Bonds & Notes”).
“Register” means the registry of aircraft which is maintained in the State of Registration by the Aeronautics Authority having authority with respect to the registration of the Aircraft.
“ Reimbursable Event” means, subject to the provisions and exclusions of Appendix 2D, the completion by Lessee during the Lease Term of a Maintenance Check or the replacement of any Engine Life Limited Parts.
“Reimbursable Expenses” means, as the context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12 Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses, Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such terms are defined in Appendix 2D.
“Related Lease(s)” means any and all leases of aircraft between Lessor or any Affiliate of Lessor, or trustee on behalf of Lessor or any Affiliate of Lessor, as lessor, and Lessee or any Affiliate of Lessee, as lessee.
“Related Lease Event of Default” means, in relation to any Related Lease, any breach or default of Lessee’s obligations thereunder which constitute an “event of default” or similar event however termed thereunder under which the party to whom such obligations are owing would have the right to exercise remedies including the termination or cancellation of the Related Lease.
“Related Obligations” means the obligations and liabilities now existing or hereafter arising of Lessee or any Affiliate of Lessee under any Related Lease.
“Rent” means Basic Rent and Supplemental Rent payable pursuant to this Lease.
“Rent Payment Date” means the first day of each Rent Period of the Lease Term and which is the date on which payment of Basic Rent is due and payable.
“Rent Period” means the period commencing on and including the Delivery Date and ending on and including the last day of the calendar month in which the Delivery Date occurs and each of the consecutive calendar monthly periods thereafter throughout the Lease Term, provided that the final Rent Period of the Lease Term may consist of less than a calendar month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a calendar month.

	  	App 1-11	  	APPENDIX 1
DEFINITIONS	

“Required Approval” means evidence documenting approval by the respective Airframe or Engine Manufacturer (as applicable) and the Certificating Authority with respect to (i) any repair to the Airframe or any Engine, where the accomplishment of such repair does not conform with the repair procedures set forth in the Manufacturer’s Repair Manual or an EASA approved service bulletin relevant to such repair and (ii) any alteration or modification of the Airframe or any Engine.
“Return” means the return of the Aircraft and all Items of Equipment to Lessor pursuant to and in accordance with Article 22 and the other provisions of this Lease.
“Return Acceptance Certificate” means the certificate substantially in the form of Appendix 7 to be executed and delivered by Lessor and Lessee at Return.
“6 Year HMV Check” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check and (b) each Task that has an initial interval of six (6) years and/or a repetitive interval of six (6) years where such Task has previously been accomplished, each as set forth in the MPD.
“6 Year HMV Check Airframe Reserve” has the meaning set forth in Appendix 2D, Section 1.A(i).
“Scheduled Delivery Date” means the delivery month identified in Appendix 2A and, when known following receipt of notice by Lessor from the Seller, the day during such month (or such other date) Lessor expects to take delivery of the Aircraft from Seller, as the same shall be notified by Lessor to Lessee in writing promptly following Lessor’s receipt of such notice from Seller.
“Scheduled Termination Date” means the day on which the Lease Term is scheduled to expire (as provided in Appendix 2A), and which may be independent from the Termination Date as provided in the definition of such term.
“Security Agent” means such Person, if any, as notified by Lessor or Owner to Lessee, who will act as security agent for and on behalf of any Financing Party in relation to any financing arrangements to be entered into in respect of the Aircraft.
“Security Deposit” means (i) the Cash Security Deposit and the Credit Security Deposit in the amounts in Section 2 of Appendix 2B; including (ii) any amounts paid to Lessor pursuant to Sections 4.4 and 4.6(c); less (iii) any amounts applied or utilised by Lessor in accordance with the provisions of Sections 4.3 and 4.6(b), whether the same are paid in cash or in the form of a Security Letter of Credit.
“Security Letter of Credit” means an unconditional and irrevocable letter of credit, satisfactory to Lessor in form and substance, in the amount of the Security Deposit and otherwise in compliance with the requirements of Section 4.6 and (i) drawn upon an issuer located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland or (ii) issued by a bank outside of Ireland and confirmed by Allied Irish Banks, AIB International Centre, IFSC, Dublin 1, Ireland (SWIFT: AIBKIE2D) or such other bank located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland, each issuing and confirming bank being acceptable to Lessor and having a credit rating not lower than A from Standard and Poor’s or A2 from Moody’s.
“Security Trustee” means such Person, as notified by Lessor or Owner to Lessee, who will act as security trustee for and on behalf of any Financing Parties in relation to any security to be granted over the Aircraft as a result of a financing thereof.

	  	App 1-12	  	APPENDIX 1
DEFINITIONS	

“Seller” means Airbus S.A.S., or an Affiliate that will sell and deliver title to the Aircraft to Lessor on the Delivery Date.
“Standard Specification” means the A319-100 Standard Specification J.000.01000 Issue 6 dated 30 November 2007.
“State of Organisation” means the country and/or state under which Laws a Person is organised and existing, or, with respect to Lessor and Lessee, the country and/or state identified on the first page of this Lease.
“State of Registration” means the United Mexican States.
“Supplemental Rent” means all amounts, liabilities and obligations (other than Basic Rent and payments in respect of Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under this Lease, including without limitation, and to the extent permitted by applicable Law, interest at the Past Due Rate calculated on any: (i) part of any installment of Basic Rent not paid on the Rent Payment Date for the period the same remains unpaid and (ii) Supplemental Rent or Maintenance Reserves not paid when due hereunder, until the same is paid.
“12 Year HMV Check” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check, (b) each Task that has a repetitive interval of six (6) years as set forth in the MPD, and (c) each Task that has an initial interval of twelve (12) years and/or a repetitive interval of twelve (12) years where such Task has previously been accomplished, each as set forth in the MPD.
“12 Year HMV Check Airframe Reserve” has the meaning set forth in Appendix 2D, Section 1.B(i).
“Task(s)” means each inspection or other requirement set forth in the MPD that (a) has a repetitive interval designated by a letter or combination of a letter and a number, or (b) is based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of calendar days, months and/or years.
“Tax(es)” means any taxes (including, without limitation, sales, use, business, gross or net income, personal property, license, documentation, transfer, import, export, fuel, leasing, occupational, value added, excess profits, excise, gross or net receipts, franchise, stamp, environmental and other taxes), levies, imposts, withholdings, fees, assessments, duties and other charges of any nature, and any penalties, fines, additions to tax, interest or other charges related thereto which are imposed by any Governmental Authority or other taxing authority in any jurisdiction or by any international or multinational taxing or regulatory authority.
“Termination Date” means:
(i) the Scheduled Termination Date if Return is completed on the Scheduled Termination Date; or
(ii) the date, if other than the Scheduled Termination Date, of Lessee’s Return of the Aircraft with all Obligations then due for performance having been performed; or
(iii) the date on which this Lease terminates in accordance with Section 20.3 following the occurrence of an Event of Loss with respect to the Aircraft or the Airframe following Delivery; or

	  	App 1-13	  	APPENDIX 1
DEFINITIONS	

(iv) the date of termination of this Lease following the occurrence of an Illegality Event in accordance with Section 27.1(b); or
(v) the date on which this Lease is cancelled or terminated pursuant to Article 24 following the occurrence of an Event of Default.
“Time Controlled Part” means any Item of Equipment, including any Life Limited Part, having a Task applicable to it based upon a predetermined time limit or interval in accordance with the MPD to the extent such Task requires such Item of Equipment to be discarded, overhauled, or re-certified upon reaching such time limit or interval.
“U.S.” or “U.S.A.” means the United States of America.
“VAT” means any Tax that is, or is in the nature of, a value added, turnover, sales, use, rental, leasing, services, goods and services, consumption, or transaction privilege Tax.
“Watch Item” means any maintenance requirement or inspection of the Aircraft or applicable Item of Equipment following the Termination Date that results from a defect with respect to the Aircraft that was discovered during the Lease Term (and is not due to a routine inspection requirement for all aircraft of the same model as the Aircraft resulting from an Airworthiness Directive, service bulletin or Manufacturer’s recommendations) and is in addition to the maintenance and inspection requirements set forth in the MPD, and where such additional inspection shall be required prior to the later of the accumulation of (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles, or (iii) twenty (20) months, as applicable.
“Wet Lease(s)” means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee shall at all times maintain full operational, technical and navigational control and maintenance oversight of the Aircraft, (ii) the Aircraft shall be operated solely by crews employed or contracted by Lessee possessing all current appropriate Aeronautics Authority certificates and licenses (it is understood that cabin attendants need not be regular employees of Lessee), (iii) the insurance required to be maintained by Lessee under the Lease shall remain in full force and effect ( provided that such insurance with respect to legal liabilities for passenger and cargo may be on a contingent basis for the duration of any such arrangement as long as such third party under such arrangement maintains primary coverage for such insurance in favour of Lessor, Lessee, and any Indemnitee and Additional Insureds in accordance and strict compliance with the terms, conditions, and requirements of this Lease, evidence of which in the form of a certificate of insurance and letter of undertaking from the brokers of such third party under such arrangement shall be provided to Lessor prior to the commencement of such arrangement), (iv) the Aircraft shall be used and maintained by Lessee as otherwise required by and in accordance with the terms and conditions of this Lease.

	  	App 1-14	  	APPENDIX 1
DEFINITIONS	

Appendix 2
to Aircraft Lease Agreement
COMMERCIAL TERMS
[NOTE: THE TERMS OF THIS APPENDIX 2 ARE CONFIDENTIAL AND CONTAIN
COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 2 MUST BE REMOVED
FROM ANY PUBLIC FILING OF THIS LEASE]
Contents:
Appendix 2A Lease Term 
Appendix 2B Rent, Security Deposit, Insurance and other Financial Matters 
Appendix 2C Escalation 
Appendix 2D Maintenance Reserves 
Appendix 2E Return Conditions

	  	App 2-1	  	APPENDIX 2
COMMERCIAL TERMS	

Appendix 2A
to Aircraft Lease Agreement
LEASE TERM
 
1.	Scheduled Delivery Date is August 2010.	
 
2.	Outside Delivery Date is the date that is seven (7) months after the last day of the calendar month in which the Scheduled Delivery Date falls.	
 
3.	Lease Term	
The Lease Term shall commence on the Delivery Date and shall end on, but not later than, 11:59 P.M. New York, New York time on the day immediately preceding the sixth (6 th ) anniversary of the Delivery Date, but which shall in any event end on the Termination Date.
 
4.	Lease Term Extension Option	
(a) Provided no Default or Event of Default shall have occurred and be continuing, Lessee may extend the Lease Term for up to forty (40) additional months (“ Lease Term Extension ”) on the same terms and conditions (except with respect to the amount of Basic Rent as more fully set forth in paragraph (b) below), provided that Lessee shall provide Lessor with irrevocable written notice of its intention to exercise such extension option, as well as the proposed term of such extension, on or before the last day of the sixty-sixth (66 th ) Rent Period.
(b) Basic Rent for the Lease Term Extension shall be in an amount reflecting the fair market rate at the time of extension as agreed between Lessor and Lessee prior to but not later than the time that Lessee exercises its option to extend the Lease Term of the Lease as set forth in paragraph (a) above. If Lessor and Lessee are unable to agree to an amount of Basic Rent for the Lease Term Extension, then Lessee’s option to extend the Lease Term shall lapse.

	  	App 2-2	  	APPENDIX 2A
LEASE TERM	

Appendix 2B
to Aircraft Lease Agreement
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS
 
1.	Calculation of Rent	
1.1. Basic Rent .
(a) Basic Rent for the first thirty-six (36) Rent Periods (or for the first ***** Rent Periods if the Delivery Date is on a day other than the first day of a calendar month) of the Lease Term shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars; and
(b) Basic Rent for the remainder of the Lease Term (but not including any Lease Term Extension period) shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars.
Notwithstanding the provisions of subsection (a) above, in the event Delivery occurs on or prior to the 10 th day of August 2010, in lieu of paying the Basic Rent amount set forth in said subsection (a), Basic Rent for the first (1 st ) Rent Period of the Lease Term shall be in the amount of ***** , which amount is stated in Base Year Dollars, and Basic Rent for all other Rent Periods contemplated by subsection (a) shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars.
1.2. Adjustment of Basic Rent for Economic Fluctuations and Escalation . The amount of Basic Rent set forth in Section 1.1 above shall be adjusted as of the Delivery Date by:
(a) ***** for each ***** of variation between the Delivery Reference Rate and the Assumed Reference Rate of *****; and
(b) Escalation.
1.3. Adjustment of Basic Rent for Agreed Options and BFE . The amount of Basic Rent determined in accordance with Section 1.2 of this Appendix 2B shall be further increased on the Delivery Date to account for:
(a) the cost to Lessor in Base Year Dollars charged by the Seller to incorporate any Agreed Options in excess of *****; and
(b) the Manufacturer’s catalog list price for (i) any BFE in excess of ***** and (ii) any and all charges including markups, handling, shipping and storage charges in connection therewith.
Any excess amounts from the preceding clause (a) shall be adjusted for Escalation and the resulting amount shall be added to any excess amounts from the preceding clause (b) and the resulting aggregate
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-3	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

sum shall be amortised over the Lease Term by multiplying             excess amount by one point eight percent (1.8% or .0108) and payable in consecutive monthly installments on each Rent Payment Date, which installments (each of which, a “Customisation Options Payment” ) shall constitute an increase in and shall be included in Basic Rent.
 
2.	Security Deposit – Timing of Payments and Amounts .	
2.1. prior to the execution of this Lease, Lessee has paid Lessor the amount of Three Hundred Thousand Dollars ($300,000);
2.2. on or before 04 January 2010, Lessee shall deposit with Lessor an additional amount of Three Hundred Thousand Dollars ($300,000);
2.3. one (1) Business Day prior to the Scheduled Delivery Date, Lessee shall deposit with Lessor any additional amounts necessary such that the total amount deposited in accordance with this Section 2 constitutes the equivalent of three (3) installments of Basic Rent (as that amount is calculated as of the Delivery Date in accordance with Section 1 of this Appendix 2B).
 
3.	Account	
All payments made under this Lease or any other Operative Document shall be made to the account set forth below at JP Morgan Bank (Ireland) plc, JP Morgan House, International Financial Service Centre, Dublin 1, Ireland by wire transfer of immediately available funds to its correspondent bank:
JPMorgan Chase Bank
New York, New York
SWIFT: CHASUS33
For credit to:
JP Moran Bank (Ireland) plc
			
SWIFT:	 	CHASIE2X	
Account Number:	 	323141889	
IBAN Number:	 	IE31CHAS93090379702501	
For further credit to:

Account Name:	 	CIT Aerospace International	
Account Number:	 	79702501	
Reference:	 	Volaris; A319-100 /August 2010 (1 of 2)	
 
4.	Insurances	
4.1. Liability Insurance Coverage Amount : (Seven Hundred Fifty Million Dollars ($750,000,000); Five Hundred Million Dollars ($500,000,000) in respect of war, unrest and allied perils liability coverage.

	  	App 2-4	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

4.2. Agreed Value : Forty-Six Million Dollars ($46,000,000) plus Escalation from January 2008 until the Delivery Date, which shall be the Agreed Value of the Aircraft for the Lease Term and which amount shall be reduced by two percent (2%) at each anniversary of the Delivery Date during the Lease Term.
4.3. Engine Agreed Value (each Engine ): Nine Million One Hundred Thousand Dollars ($9,100,000) plus Escalation from January 2008, until the Delivery Date, which amount shall be set forth in the Acceptance Certificate and which shall be the Engine Agreed Value of each Engine for the Lease Term.
4.4. Aircraft Hull Deductible Amount : Two Hundred Fifty Thousand Dollars ($250,000) per occurrence.
 
5.	Legend	
“LEASED FROM CIT AEROSPACE INTERNATIONAL, DUBLIN, IRELAND, AS OWNER AND LESSOR”.
 
6.	Notices	

If to Lessee:	 	If to Lessor:	
		
Concesionaria Vuela Compañía de	 	CIT Aerospace International	
Aviación, S.A. de C.V.	 	3 George’s Dock	
Prolongación Paseo de la Reforma No. 490	 	IFSC	
Piso 1	 	Dublin 1, Ireland	
Colonia Santa Fe Peña Blanca	 	Attention: Chief Counsel	
C.P. 01210	 	Fax: +353 (1) 656 1001	
México, D.F.	 		
		
	 	with a copy to:	
		
Attention: Director Jurídico	 	CIT Aerospace	
Fax: +52 (55)5211 9613	 	11 West 42 nd Street, 12 th Floor	
	 	New York, New York 10036, USA	
	 	Attention: Chief Counsel – Transportation	
	 	Finance	
	 	Fax: +1 (212) 461 5402	
		
	 	and, with respect to any insurance notification,
with a copy to:	
		
	 	CIT Aerospace	
	 	11 West 42 nd Street, 12 th Floor	
	 	New York, New York 10036, USA	
	 	Insurance Administrator – Operations Dept.	
	 	Fax: +1 (877) 525 9183	

	  	App 2-5	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

Appendix 2C
to Aircraft Lease Agreement
ESCALATION
1.1. Escalation . All amounts due under the Lease which are stated in Base Year Dollars, including Basic Rent, Agreed Options and Budget, and Agreed Value, are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions hereof.
1.2. Base Period . Basic Rent, Agreed Options and Budget, and Agreed Value have been established in accordance with the average economic conditions prevailing in December 2006, January 2007 and February 2007 and corresponding to a theoretical delivery in January 2008 as defined by “ECIb” and “ICb” index values indicated hereafter. “ECIb” and “ICb” index values set forth below shall not be subject to any revision.
1.3. Indexes .
 
 	(a)	Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in: Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100).	
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: ciu2023211000000i.
 
 	(b)	Material Index : “Industrial commodities” (hereinafter referred to as “IC”) as published in “Producer Price Indexes” (Table 6. Producer price indexes and percent changes for commodity groupings and individual items). (Base Year 1982 = 100).	
Index code for access on the Web site of the US Bureau of Labor Statistics: wpu03thru15.
1.4. Revision Formula .
*****   =   *****
Where:
*****   =   *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-6	  	APPENDIX 2C
ESCALATION	

*****   =   *****
   *****
*****   =   *****
*****   =   *****
*****   =   *****
*****   =   *****
*****   =   *****
1.5. General Provisions .
 
 	(a)	Roundings .	
 
 	(i)	The Labor Index average and the Material Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
 	(ii)	Each quotient shall be rounded to the nearest ten thousandth (4 decimals). If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
 	(iii)	The final factor shall be rounded to the nearest ten thousandth (4 decimals).	
 
 	(iv)	The final Basic Rent, Agreed Options and Budget, and Agreed Value shall be rounded to the nearest whole number (0.5 or more rounded to 1).	
 
 	(b)	Substitution of Indexes . In the event that:	
 
 	(i)	the U.S. Department of Labor substantially revises the methodology of calculation of any of the indexes referred to above, or	
 
 	(ii)	the U.S. Department of Labor discontinues, either temporarily or permanently, any of the indexes referred to above, or	
 
 	(iii)	the data samples used to calculate any of the indexes referred to above are substantially changed, then Lessor shall select a substitute index; then	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-7	  	APPENDIX 2C
ESCALATION	

 	a substitute index shall be used. Such substitute index shall reflect as closely as possible the actual variations of the wages or of the material costs, as the case may be, used in the calculation of the original index. As a result of this selection of a substitute index, Lessor shall make an appropriate adjustment to its price revision formula, allowing to combine the successive utilisation of the original index and of the substitute index.	
 
 	(c)	Final Index Values . The Index values as defined in clause 1.4 above shall be considered final and no further adjustment to Basic Rent, Agreed Options and Budget, or Agreed Value as adjusted to determine Adjusted Basic Rent, Agreed Options and Budget, and Agreed Value at Delivery will be made after Delivery for any subsequent changes in the published Index values.	

	  	App 2-8	  	APPENDIX 2C
ESCALATION	

Appendix 2D
to Aircraft Lease Agreement
MAINTENANCE RESERVES
 
1.	Maintenance Reserves - Airframe	
 
 	A.	6 Year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ 6 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 6 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 6 Year HMV Check Airframe Reserve as of the date of commencement of such 6 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 6 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 6 Year HMV Check, the Tasks accomplished during such 6 Year HMV Check shall have included, as a minimum, (a) each six (6) year or seventy-two (72) month Task, (b) each Task that has an initial or repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 6 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
 
 	B.	12 Year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ 12 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 12 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 12 Year HMV Check Airframe Reserve as of the date of commencement of such 12 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 12 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 12 Year HMV Check, the Tasks accomplished during such 12 Year HMV Check shall have included, as a minimum, (a) each twelve (12) year or one hundred forty-four (144) month Task, (b) each Task that has a repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred (4,500) Cycles or less, and (iv) three
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-9	  	APPENDIX 2D
MAINTENANCE RESERVES	

thousand (3,000) APU Hours or less, and (c) the rectification or             accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 12 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
 
2.	Maintenance Reserves - Engines	
 
 	A.	Engine Restoration Reserves	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor the amount determined under clause (ii) below multiplied by the number of Flight Hours of operation of each Engine during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as, with respect to each Engine, an “ Engine Restoration Reserve” and collectively, the “ Engine Restoration Reserves ”). A separate Engine Restoration Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) The amount used to calculate Lessee’s payment due under clause (i) above shall be determined on a monthly basis, and:
(a) for all Flight Hours an Engine is operated prior to the removal of such Engine for the first Engine Restoration of such Engine, shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Rent Period for which such payment is due:

   	 	Flight Hour to
Cycle Ratio
(        :1)	 	Flight Hour
Reserve Rate	 	 	
	 	4.0	 	*****	 		
				
	 	3.9	 	*****	 		
	 	3.8	 	*****	 		
	 	3.7	 	*****	 		
	 	3.6	 	*****	 		
	 	3.5	 	*****	 		
				
	 	3.4	 	*****	 		
	 	3.3	 	*****	 		
	 	3.2	 	*****	 		
	 	3.1	 	*****	 		
	 	3.0	 	*****	 		
				
	 	2.9	 	*****	 		
	 	2.8	 	*****	 		
	 	2.7	 	*****	 		
	 	2.6	 	*****	 		
	 	2.5	 	*****	 		
				
	 	2.4	 	*****	 		
	 	2.3	 	*****	 		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-10	  	APPENDIX 2D
MAINTENANCE RESERVES	

							
   	 	Flight Hour to
Cycle Ratio
(        :1)	 	Flight Hour
Reserve Rate	 	 	
	 	2.2	 	*****	 		
	 	2.1	 	*****	 		
	 	2.0	 	*****	 		
				
	 	1.9	 	*****	 		
	 	1.8	 	*****	 		
	 	1.7	 	*****	 		
	 	1.6	 	*****	 		
	 	1.5	 	*****	 		
				
	 	1.4	 	*****	 		
	 	1.3	 	*****	 		
	 	1.2	 	*****	 		
	 	1.1	 	*****	 		
	 	1.0	 	*****	 		
				
	 	0.9	 	*****	 		
	 	0.8	 	*****	 		
	 	0.7	 	*****	 		
	 	0.6	 	*****	 		
	 	0.5	 	*****	 		
(b) for all Flight Hours an Engine is operated following the first Engine Restoration of such Engine, shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Rent Period for which such payment is due:

   	 	Flight Hour to
Cycle Ratio
(        :1)	 	Flight Hour
Reserve Rate	  	 	
	 	4.0	 	*****	  		
				
	 	3.9	 	*****	  		
	 	3.8	 	*****	  		
	 	3.7	 	*****	  		
	 	3.6	 	*****	  		
	 	3.5	 	*****	  		
				
	 	3.4	 	*****	  		
	 	3.3	 	*****	  		
	 	3.2	 	*****	  		
	 	3.1	 	*****	  		
	 	3.0	 	*****	  		
				
	 	2.9	 	*****	  		
	 	2.8	 	*****	  		
	 	2.7	 	*****	  		
	 	2.6	 	*****	  		
	 	2.5	 	*****	  		
				
	 	2.4	 	*****	  		
	 	2.3	 	*****	  		
	 	2.2	 	*****	  		
	 	2.1	 	*****	  		
	 	2.0	 	*****	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-11	  	APPENDIX 2D
MAINTENANCE RESERVES	

							
   	 	Flight Hour to
Cycle Ratio
(        :1)	 	Flight Hour
Reserve Rate	  	 	
	 	1.9	 	*****	  		
	 	1.8	 	*****	  		
	 	1.7	 	*****	  		
	 	1.6	 	*****	  		
	 	1.5	 	*****	  		
				
	 	1.4	 	*****	  		
	 	1.3	 	*****	  		
	 	1.2	 	*****	  		
	 	1.1	 	*****	  		
	 	1.0	 	*****	  		
				
	 	0.9	 	*****	  		
	 	0.8	 	*****	  		
	 	0.7	 	*****	  		
	 	0.6	 	*****	  		
	 	0.5	 	*****	  		
Notwithstanding the foregoing, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the rates set forth in the table in subsection (b) above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the rates set forth in the table in subsection (b) above should be increased or decreased based upon the then current cost of such Engine Restoration.
(iii) Subject to the conditions and exclusions contained in this Appendix 2D for the first Engine Restoration to occur during the Lease Term, (x) if Lessee provides an invoice for the amount of such Engine Restoration from the Approved Maintenance Organisation accomplishing such, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Restoration Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an Engine Restoration on an Engine during the Lease Term for which such Engine Restoration Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Restoration Reimbursable Expenses ”) or (y) if Lessee cannot provide such an invoice then Lessor will reimburse Lessee in an amount equal to ***** of the amount then held by Lessor in the respective Engine Restoration Reserve for such Engine as of the date of commencement of such Engine Restoration, and for each subsequent Engine Restoration to occur during the Lease Term, if Lessee provided an invoice for the first Engine Restoration pursuant to sub-clause (x) above then any reimbursement from the Engine Restoration Reserve shall be in accordance with such sub-clause (x), and if Lessee was not able to provide an invoice for the first Engine Restoration then any reimbursement shall be subject to sub-clause (x) above if Lessee is able to obtain an invoice for such subsequent Engine Restoration, or subject to sub-clause (y) above (but at the rate of ***** of the amount held in the Engine Restoration Reserve for such Engine as of the date of commencement of such Engine Restoration) if Lessee is not able to obtain an invoice for such subsequent Engine Restoration, provided that at the time of completion of such Engine Restoration, as a minimum:
(a) the Engine was restored to a condition having an expected minimum of sixteen thousand five hundred (16,500) Flight Hours without any requirement for a shop visit prior to the expiration of such time; and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-12	  	APPENDIX 2D
MAINTENANCE RESERVES	

(b) each Life Limited Part installed in the Engine had no less than ten thousand (10,000) Cycles (and equivalent calendar time, if applicable, with calendar time determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer) remaining to its life limit, provided , however , Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the minimum number of Cycles required for each Life Limited Part as set forth above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the minimum number of Cycles set forth above should be increased or decreased based upon the then current information available to both Lessee and Lessor as to the average Flight Hour to Cycle ratio operated by all similar model aircraft worldwide; and
(c) the Engine was in compliance with all AD’s to the extent that, by the terms of each such AD, compliance was required within sixteen thousand five hundred (16,500) Flight Hours, or ten thousand (10,000) Cycles, or equivalent calendar time, as applicable (with calendar time to be determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer).
(iv) To the extent applicable subject to sub-clause (iii) above, Engine Restoration Reimbursable Expenses shall only include Lessee’s Actual Cost incurred in connection with Engine disassembly, repair, Overhaul, assembly and any required testing accomplished in connection with the accomplishment of such Engine Restoration.
(v) Engine Restoration Reimbursable Expenses shall not include the cost of replacement Life Limited Parts installed in connection with the accomplishment of such Engine Restoration.
(vi) Notwithstanding the foregoing, Lessor agrees that upon Lessee’s request, Lessee may incorporate the Engines into a Flight Hour Agreement (an “FHA”) with the Engine Manufacturer in lieu of paying the Engine Restoration Reserves to Lessor as contemplated in this Section 2.A, so long as such FHA is in form and substance acceptable to Lessor. For the avoidance of doubt, Lessor agrees that to the extent Lessee enters into an FHA but continues to pay the Engine Restoration Reserves to Lessor as contemplated in this Section 2.A, then Lessor need not approve the form and substance of such FHA.
 
 	B.	Engine Life Limited Parts Reserves	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** multiplied by the number of Cycles of operation of each Engine during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ Engine Life Limited Parts Reserve ”). A separate Engine Life Limited Parts Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Life Limited Parts Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the purchase by Lessee of any Engine Life Limited Part during the Lease Term that is installed in an Engine for which such Engine Life Limited Parts Reserve is established (all such qualifying expenses are hereinafter                      Parts Reimbursable Expenses ”).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-13	  	APPENDIX 2D
MAINTENANCE RESERVES	

3.	Maintenance Reserves - Other Items	
 
 	A.	Landing Gear Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ Landing Gear Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the Landing Gear Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of a Landing Gear Overhaul on a Landing Gear during the Lease Term (all such qualifying expenses are hereinafter referred to as “ Landing Gear Overhaul Reimbursable Expenses ”), provided that at the time of completion of such Landing Gear Overhaul of any Landing Gear, such Landing Gear shall have no existing condition that would require the removal of such Landing Gear prior to completing the full Overhaul interval as set forth in the MPD.
(iii) In no event shall any reimbursement for a Landing Gear Overhaul of any individual Landing Gear exceed an amount that is in excess of a percentage of the total amount, then currently held by Lessor in the Landing Gear Overhaul Reserve, equal to ***** for each of the left and right main Landing Gear, and ***** for the nose Landing Gear.
 
 	B.	APU Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay Lessor (x) ***** with respect to an APU manufactured by Honeywell or, if applicable, (y) ***** with respect to an APU manufactured by APIC, multiplied by the number of APU Hours of operation of the APU during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ APU Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the APU Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an APU Overhaul on the APU during the Lease Term (all such qualifying expenses are hereinafter referred to as “ APU Overhaul Reimbursable Expenses ”), provided that at the time of completion of such APU Overhaul, as a minimum:
(a) the APU was restored to a condition such that it can be reasonably expected to operate for a minimum of five thousand (5,000) APU Hours without any requirement for a shop visit prior to the expiration of such time;
(b) each Life Limited Part installed in the APU had no less than five thousand (5,000) APU Cycles remaining to its life limit; and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-14	  	APPENDIX 2D
MAINTENANCE RESERVES	

(c) the APU was in compliance with all AD’s to the extent that, by the terms of each AD, compliance was required within any of (i) five thousand APU Hours, or (ii) five thousand (5,000) APU Cycles, or (iii) twenty-four (24) months, as applicable.
 
4.	Maintenance Reserve Claims	
A. Prior to the accomplishment of any Maintenance Check for which Lessee intends to make a Maintenance Reserve Claim, Lessee shall provide Lessor with the workscope and, to the extent available from the Approved Maintenance Provider, the estimated cost of accomplishing such Maintenance Check, for approval by Lessor as to whether or not such workscope complies with the requirements for reimbursement as set forth in this Appendix 2D herein.
B. Following completion of such Maintenance Check in accordance with the approved workscope, Lessee may present its Maintenance Reserve Claim to Lessor for payment by delivery of an invoice for the amount of Reimbursable Expenses claimed by Lessee together with documentation satisfactory to Lessor evidencing completion of such Maintenance Check in accordance with the approved workscope and the cost associated therewith.
C. Lessor shall reimburse Lessee by paying (x) to Lessee ( provided Lessee has delivered to Lessor evidence of payment by Lessee for the amount of such Reimbursable Expenses) or (y) upon receipt of written instruction from Lessee, to Lessee’s maintenance provider performing such Maintenance Check ( provided Lessor has received evidence of payment by Lessee for the amount of all estimated expenses that exceed the amount to be paid by Lessor as set forth herein). Such amount shall equal the lesser of (i) the amount of such Reimbursable Expenses for such Maintenance Check, or (ii) the amount of the respective Maintenance Reserve for such Reimbursable Event.
D. In any case in which the amount paid to Lessee by Lessor hereunder is not sufficient to pay the cost of such Maintenance Check, Lessee shall be obligated to and shall pay directly any such shortfall, without further contribution from Lessor, and Lessee shall not subsequently be permitted to make a Maintenance Reserve Claim for such amounts under this Lease.
 
5.	Exclusions from Reimbursable Expenses	
The following shall be and are specifically excluded from Reimbursable Expenses:
(i) with respect to all Maintenance Checks , expenses incurred in connection with or as a result of (A) an accident, faulty maintenance or installation, incident, improper operations, abuse, neglect, or misuse, (B) any maintenance and material required for or in connection with elective Parts replacement, AD compliance and Aeronautics Authority and/or Certificating Authority regulation compliance, (C) any maintenance and material covered by, or reimbursable by, a claim under any Manufacturer’s warranties or by insurance (with deductibles being treated as reimbursable by insurance for purposes of this exclusion), (D) modifications (including interior reconfiguration), (E) the accomplishment of service bulletins, (F) any deferred maintenance discrepancies (G) any maintenance and material required to correct or repair damage caused by the ingestion by an Engine or the APU of a foreign object external to such Engine or APU (“ FOD ”), (H) (x) the cost of shipping any Engine, Engine LLP, Landing Gear or the APU, or (y) ferrying the Aircraft to the maintenance facility performing such Maintenance Check, (I) any fees or expenses incurred by representatives of Lessee, (J) handling charges or other mark-ups by Lessee, (K) removal and installation charges with respect to (1) any Engine (for Engine Restoration or Engine LLP replacement) or (2) any Landing Gear or APU for Overhaul, (L) any maintenance or replacement of Parts (when such maintenance or replacement is as a result of

	  	App 2-15	  	APPENDIX 2D
MAINTENANCE RESERVES	

(aa) Time Controlled Part requirements of the Maintenance Program or (bb) a routine requirement of any task card), provided , however , Reimbursable Expenses shall include the cost to repair or replace any Part that requires maintenance or replacement solely as a result of failing a routine requirement for an operational or functional test of any Task while installed on the Aircraft, and (M) Taxes paid or due and payable on or in connection with the accomplishment of the Maintenance Check and any labor and materials supplied thereunder;
(ii) with respect to an Engine Restoration , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for the removal and installation of quick engine change components and Parts (“ QEC ”), except when such QEC is removed or installed at the maintenance facility of the Approved Maintenance Organisation accomplishing such Engine Restoration, (B) replacement, repair or Overhaul of external engine Parts, including QEC, (C) rental of tooling or equipment for the removal, installation or shipping of the Engine and (D) charges incurred for the use of a temporary replacement engine;
(iii) with respect to the replacement of Engine LLPs , in addition to the exclusions listed in clause (i) above, (A) an amount equal to the product of (x) the Manufacturer’s then current catalogue price of the replacement LLP which is the subject of Lessee’s Maintenance Reserve Claim divided by its Cycle life limit, multiplied by (y) the Cycles remaining to its Cycle life limit on the LLP replaced, and (B) any labor or additional materials costs associated with the replacement of any such Engine LLP;
(iv) with respect to any Landing Gear Overhaul , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) the repair, replacement or Overhaul of rotable parts such as wheels, tires, brakes, transducers, switch assemblies, side struts, braces, and uplock and downlock mechanisms, (B) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation accomplishing such Landing Gear Overhaul), (C) replacement, repair or Overhaul of external Landing Gear Parts, (D) rental of tooling or equipment for the removal, installation and shipping of the Landing Gear and (E) charges incurred for the use of a temporary replacement landing gear; and
(v) with respect to an APU Overhaul , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation in order to perform such APU Overhaul), (B) replacement, repair or Overhaul of external APU Parts, (C) rental of tooling or equipment for the removal, installation and shipping of the APU and (D) charges incurred for the use of a temporary replacement auxiliary power unit.
 
6.	Adjustment/Revision of Maintenance Reserves Rates	
A. Adjustment for Inflation . The Maintenance Reserves rates set forth in paragraphs 1, 2A and 3 above (inclusive of subsections and including the table appearing in Section 2A(ii)), shall be increased for inflation on 1 June of each calendar year, commencing on 1 June 2010, by a percentage amount equal to ***** by adding: ***** multiplied by the value of ***** and *****, as the same has been increased in accordance with this paragraph 6A.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-16	  	APPENDIX 2D
MAINTENANCE RESERVES	

B. Revision of Engine LLP Parts Reserves Rate . The Engine Life Limited Parts Reserves rate set forth in paragraph 2B shall be revised on 1 June of each calendar year, commencing on 1 June 2010, so that it equals the sum of the then current cost per Cycle of each Engine Life Limited Part of each Engine. The cost per Cycle of each such Engine Life Limited Part shall be determined by dividing (x) the then current catalog list price of each Engine Life Limited Part for each Engine by (y) the Engine Manufacturer’s then published cyclic life for each respective Engine Life Limited Part.
 
7.	General	
A. All payments in respect of Maintenance Reserves that accrue on a monthly basis and for which the payment due is for less than a complete month shall be pro rated on a daily basis based on a month consisting of thirty (30) days.
B. In no event shall Lessor be obligated to reimburse or make any payment to Lessee under this Appendix 2D, whether due to a Maintenance Reserve Claim or otherwise, (i) if and for so long as a Default or Event of Default has occurred and is continuing or (ii) with respect to a Maintenance Reserve Claim which has not been made within the time limits specified in Section 13.4 of the Lease. Lessor shall not be obligated to cure any such Default or Event of Default by granting an offset to Lessee for any amounts that would be payable hereunder in the absence of such Default or Event of Default.
C. All Maintenance Reserves shall be managed, held, applied and reimbursed strictly in accordance with the provisions of this Lease, and any determinations and/or calculations made or to be made in respect of any Maintenance Reserve Claims shall be managed by personnel who are experienced and familiar with aircraft and operating leases of this type, and the payment of any Maintenance Reserve reimbursement amounts due and owing to Lessee under this Appendix 2D shall not be unreasonably withheld.
D. The disposition of all Maintenance Reserves following the occurrence of an Event of Loss of the Aircraft shall be made in accordance with the provisions of Section 20.3(b) of the Lease.
E. Each installment of Maintenance Reserves paid by Lessee shall accrue interest from the date of its receipt by Lessor. The rate at which interest shall accrue on the Maintenance Reserves from time to time shall be the “30 Day Dealer Commercial Paper Rate” as reported on Reuters Page 23. The rate of interest shall be initially determined as of the Delivery Date and shall be reset on each three (3) month anniversary of the Delivery Date thereafter during the Lease Term. Any interest earned on the Maintenance Reserves shall become part of the Maintenance Reserves, and shall be subject to the terms hereof applicable to Maintenance Reserves.

	  	App 2-17	  	APPENDIX 2D
MAINTENANCE RESERVES	

Appendix 2E
to Aircraft Lease Agreement
RETURN CONDITIONS
 
1.	GENERAL	
1.1. The Aircraft shall (i) be airworthy and have been maintained and operated in accordance with the Lease with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by Lessee and (ii) comply with the Airframe Manufacturer’s original type certificate specifications, as revised up to the Termination Date, subject to any modifications installed during the Lease Term in compliance with the terms of this Lease.
1.2. The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings, and any required placards pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be replaced if unreadable, missing or not in the English language. Placards that are not required pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be removed upon Lessor’s request.
1.3. Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment as were installed on the Aircraft on the Delivery Date or pursuant to Article 12 hereto, or were delivered by Lessor to Lessee pursuant to the terms of the Lease shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4. The Aircraft shall comply with all AD’s which by their terms require compliance (without application or utilisation of any alternate method of compliance) (i) on or before the date that is one hundred eighty (180) days after the Termination Date, and/or (ii) within one thousand eight hundred (1,800) Flight Hours of operation after the Termination Date, and (iii) within one thousand two hundred Cycles of operation after the Termination Date, notwithstanding any waiver, deviation or time extension obtained from the Aeronautics Authority, the Certificating Authority or any other aeronautics authority, or otherwise.
1.5. The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirements, Part M.
1.6. The Aircraft and each Item of Equipment shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.7. The Aircraft shall have no leakage of (x) fuel or water and (y) oil or hydraulic fluid to the extent such oil or hydraulic fluid leakage exceeds the Airframe Manufacturer’s allowable limits, and the fuselage shall be pressurised to inspect for pressurisation leaks in accordance with the pressurisation test procedures set forth in the Manufacturer’s Repair Manual. Lessee shall repair any such leaks discovered prior to redelivery of the Aircraft to Lessor.
1.8. The Aircraft and Engines shall be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either (x) an Alert Service Bulletin or (y) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance (A) on or before the date that is one hundred eighty (180) days after the Termination Date, and/or (B) within one thousand eight hundred (1,800) Flight Hours of operation after the

	  	App 2-18	  	APPENDIX 2E
RETURN CONDITION	

Termination Date, and/or (C) within one thousand two hundred (1,200) Cycles after the Termination Date, and (iii) all other Manufacturer’s service bulletins issued at the time of return, to the same extent that Lessee has accomplished such service bulletins on similar model aircraft and engines of the same manufacture in Lessee’s fleet, without discrimination.
1.9. Lessee shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the Aeronautics Authority for certification of airworthiness for aircraft to be exported from the State of Registration) to a country advised by Lessor. At Lessor’s request, Lessee shall modify the Aircraft to comply with the requirements of the aeronautics authority of such country to which the Aircraft will be exported, provided , however , if such Lessor requested modifications are not also a requirement of the Certificating Authority and/or EASA, Lessor shall reimburse Lessee for Lessee’s Actual Cost incurred in performing such modifications.
1.10. All temporary repairs accomplished during the Lease Term, including repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair in accordance with the Airframe Manufacturer’s structural repair manual for the Aircraft) and those requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair and all external doublers (scab patches) installed during the Lease Term shall be replaced with flush repairs, all in accordance with (x) the Manufacturer’s Repair Manual, or (y) Required Approval, provided , however , such replacement of a doubler shall not be required where installation of such doubler is (i) the only approved repair in accordance with the Manufacturer’s Repair Manual, (ii) the result of a Manufacturer recommended service bulletin accomplishment, or (iii) where a flush repair cannot be accomplished due to inaccessibility of the area.
1.11. Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished to Lessee without charge and which have not been so installed together with appropriate instructions for installation provided with such kits.
1.12. The quantity of fuel on board the Aircraft at Return shall not be less than the quantity of fuel on board the Aircraft at Delivery.
1.13. On or prior to Return and on such later date as requested by Lessor, Lessee shall provide Lessor such excerpts from the Maintenance Program and/or general procedures manual as Lessor may reasonably request (i) in order to substantiate procedures followed by Lessee and/or documentation used by Lessee which are specific to the Maintenance Program, in connection with the Return of the Aircraft to Lessor, and (ii) to assist with the bridging of the Aircraft onto a maintenance program other than the Maintenance Program subsequent to the Return of the Aircraft to Lessor.
1.14. If the Manufacturer’s Repair Manuals for the Aircraft were customised for or by Lessee prior to Delivery or during the Lease Term, Lessee will, at Lessee’s cost and expense, cause the Airframe Manufacturer to restore the Manufacturer’s Repair Manuals, revised up to and including the most recent revisions issued by the Airframe Manufacturer, to Lessor’s customisation (or to be re-customised to such other customisation as timely requested by Lessor, with Lessor to pay any incremental increase over the cost to restore the Manufacturer’s Repair Manuals to Lessor’s customisation) on the basis of the Aircraft no longer being part of Lessee’s fleet of aircraft, and Lessee will return to Lessor with the Aircraft the Manufacturer’s Repair Manuals so revised and restored or re-customised (as the case may be). To the extent the same are not yet revised and restored as required herein on the Termination Date, until such time as Lessee complies with the requirements set forth herein, and without payment or compensation to Lessee, Lessee (x) hereby grants Lessor a perpetual, worldwide, non-exclusive, fully paid license to use Lessee’s customised Manufacturer’s Repair Manuals for itself and to further sub-license the same to any other Person as Lessor deems necessary and reasonable in the circumstances and (y) shall provide Lessor, or such other Person designated by Lessor, with all applicable revisions to such Manufacturer’s Repair Manuals whenever issued by the Manufacturer.

	  	App 2-19	  	APPENDIX 2E
RETURN CONDITION	

2.	PAINT	
The Aircraft shall be prepared for repainting by stripping the paint (except for areas where stripping will cause damage, such areas to be sanded instead), and shall be repainted using a paint of a quality reasonably acceptable to Lessor, or as otherwise agreed by Lessor in writing, in a color scheme, including logo, as directed by Lessor, provided , however , (i) the Aircraft shall be painted white if Lessor is unable to supply the necessary patterns in sufficient time to permit completion of the painting of the color scheme and logo without causing a delay in the redelivery of the Aircraft and (ii) if painted in the color and logo as directed by Lessor, then Lessor shall reimburse Lessee for the incremental cost in excess of the cost Lessee would have incurred to paint the Aircraft in its own livery, and all such preparation and painting shall be in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant. All required placards and markings shall be in the English language and shall be replaced if not in English, or if deteriorated.
 
3.	AIRFRAME	
3.1. Immediately prior to Return, the Aircraft shall have completed (x) a C-Check, and will include the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) which will be due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) calendar months following the Scheduled Termination Date), (such check being hereinafter referred to as the “ Final Check ”). The Aircraft shall not have been operated in revenue service since completion of the Final Check. The Final Check shall be performed by an Approved Maintenance Organisation approved by Lessor. Lessee shall give Lessor not less than ten (10) Business Days’ prior written notice of the commencement date of such Final Check. The Aircraft shall be weighed during such Final Check.
3.2. Each Time Controlled Part (excluding Engine Life Limited Parts and Landing Gear (with respect to Overhaul), but including Time Controlled Parts installed on the Landing Gear) shall, as applicable, have a minimum time remaining to its next due Overhaul, replacement or other required maintenance, (i) the greater of fifty percent (50%) of its allowable Flight Hour interval, and six thousand (6,000) Flight Hours, (ii) the greater of fifty percent (50%) of its allowable Cycle interval and four thousand five hundred (4,500) Cycles and (iii) the greater of fifty percent (50%) of its allowable calendar time interval and twenty (20) calendar months in accordance with the interval for each such Part as specified in the MPD. With respect to any Time Controlled Part that has an interval in the MPD that is less than the respective intervals set forth in sub-clauses (i), (ii) and (iii) above, such Time Controlled Part shall have a minimum time remaining to its next Overhaul, replacement or other required maintenance that is equal to the full interval allowable pursuant to the MPD.
 
4.	INTERIOR	
4.1. The Aircraft shall be in the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) at Lessor’s option, (i) as when such Aircraft was originally delivered to Lessee hereunder, (ii) as subsequently provided or paid for by Lessor, or (iii) as otherwise set forth in this Lease or as otherwise agreed between the parties.

	  	App 2-20	  	APPENDIX 2E
RETURN CONDITION	

4.2. Cockpit windows shall not have any crazing or delamination, nor shall the cockpit windows have any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.3. Passenger compartment windows shall have no visible crazing.
4.4. All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessee.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1. Prior to Return and following the redelivery flight for the Aircraft, Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessor’s representative or, at Lessor’s expense, an agency selected by Lessor. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessee’s expense.
5.2.    (a) Each Engine shall (i) have accumulated no more than eight thousand (8,000) Flight Hours since its most recent Engine Restoration shop visit (or since new if an Engine Restoration has not previously been accomplished), and (ii) not have any existing condition which would require the removal of the Engine within four thousand (4,000) Flight Hours following Return.
(b) Each Engine Life Limited Part shall have a minimum of eight thousand (8,000) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A full take-off power engine run-up (high power assurance test) shall be performed in the presence of Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees Celsius (30° C.). Lessee shall be responsible, at its expense, for correcting any deficiencies which exceed or are outside of the Airframe Manufacturer’s Repair Manual allowable limits for an installed engine.
5.4. The APU shall have been operated no more than two thousand (2,000) APU Hours since completion of its most recent Overhaul.
5.5. Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) twenty-four (24) months, and (ii) four thousand (4,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the earlier to occur of the Scheduled Termination Date or the Termination Date, based upon the landing gear overhaul interval set forth in the MPD.

	  	App 2-21	  	APPENDIX 2E
RETURN CONDITION	

6.	INSPECTION	
6.1. Immediately prior to Return, Lessee shall perform a redelivery acceptance flight of the Aircraft with Lessor’s representatives on board (subject to any limitation imposed by either Lessee’s insurance or the Aeronautics Authority with respect to the number of Lessor’s representatives permitted to be on board during such redelivery acceptance flight), using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and Lessee. Upon request of Lessor, Lessee shall permit representatives of the next subsequent lessee or purchaser of the Aircraft to be on board during such redelivery acceptance flight as observers, with one such observer to be permitted to occupy the cockpit jump seat during the entire flight. Such redelivery acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessor shall ensure Lessee’s representative has observed each discrepancy found. Immediately following the redelivery acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits, Lessee shall correct such discrepancy. Lessee shall have no obligation to pay the cost of correcting any discrepancies discovered during such redelivery acceptance flight which were not acknowledged in writing by its representative. Lessee shall be responsible for all expenses associated with such flight and shall furnish the necessary permits, crews and fuel.
6.2. Lessor shall inspect the Aircraft, including the Aircraft Documents, (the “ Final Inspection ”) prior to the Termination Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include the opening or removal of panels as reasonably required by Lessor, and access to all compartments and bays. All discrepancies discovered during such Final Inspection (a) of the Aircraft that exceed the Manufacturer’s Repair Manual allowable limits, or that are not pursuant to the terms of this Lease, shall be permanently repaired by Lessee and (b) of the Aircraft Documents, to the extent that such Aircraft Documents are missing or incomplete, shall be corrected at Lessee’s expense. Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by Lessor and Lessee but which shall be no later than thirty (30) days prior to the Scheduled Termination Date. All Aircraft Documents shall be prepared by Lessee prior to the commencement of the Final Inspection of such Aircraft Documents by Lessor and shall be complete and made available to Lessor at the time of commencement of the Final Inspection of such Aircraft Documents by Lessor. Any Aircraft Documents generated during the period following commencement of such Final Inspection of the Aircraft Documents shall be delivered to Lessor for inspection as promptly as possible, but in any event prior to Return.
6.3. On the Termination Date, Lessee shall deliver to Lessor all Aircraft Documents (a) delivered to Lessee with respect to the Delivery of the Aircraft to Lessee, and (b) required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate, and (c) to the extent not provided in the preceding clauses (a) and (b), all other Aircraft Documents applicable to the Aircraft with respect to any maintenance, inspections, repairs and modifications accomplished during the Lease Term. The Aircraft Documents required pursuant to this Section 6.3 herein, shall include:
(i) with respect to clause (a), the most recent revision issued by the respective Manufacturer for the Manufacturer’s Repair Manuals and in the same format as on the Delivery Date;
(ii) with respect to clause (b), (1) Tasks, repairs, and modifications accomplished during the Lease Term and (2) Time Controlled Parts and other Items installed during the Lease Term and then currently installed, as a minimum, (A) Overhaul records with respect to each Engine, Landing Gear and the APU, (B) traceability to Overhaul for Time Controlled Parts

	  	App 2-22	  	APPENDIX 2E
RETURN CONDITION	

subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (C) Life Limited Part traceability to manufacture (“zero time since new”) for LLPs then installed on the Airframe or either Engine, (D) FAA Form 8130-3 or EASA Form One, or any successor thereto, (E) records of modifications and repairs, (F) records of compliance with Manufacturer’s service bulletins, (G) documentation of Required Approvals (including applicable supplemental type certificates) required pursuant to this Lease, and in addition to such Required Approvals, documentation of Aeronautics Authority and Certificating Authority approval, (H) inspection records (including records with respect to the accomplishment of Tasks), (I) records pertaining to evidence of compliance with AD’s, and (J) burn test certification records for interior Items;
(iii) with respect to clause (c), to the extent then in Lessee’s possession, (A) log books, (B) FAA, EASA and other Aeronautics Authority forms not included in paragraph (ii) above, (C) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date during the Lease Term, and (D) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
Any discrepancies found in the Aircraft Documents shall be corrected, and any missing Aircraft Documents shall be reconstructed by Lessee at Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents of maintenance, inspection, modification, and Overhauls accomplished during the Lease Term shall be in the English language. In the event that any Aircraft Documents are not provided to Lessor, or are not in the English language, the Aircraft shall be deemed not to meet the return conditions of this Appendix 2E and of Article 22 of the Lease. If Lessee subscribes to Manufacturer’s online data access services, Lessee must nonetheless return the Manufacturer’s Repair Manuals with all current revisions provided by Manufacturer in a format acceptable to Lessor.
6.4. All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessor’s representative shall operationally check all systems prior to the return of the Aircraft and all defects found shall be permanently repaired by Lessee, at Lessee’s expense, prior to return of the Aircraft.

	  	App 2-23	  	APPENDIX 2E
RETURN CONDITION	

Appendix 3
to Aircraft Lease Agreement
[NOTE: THE TERMS OF THIS APPENDIX 3 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 3 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
ACCEPTANCE CERTIFICATE
(MSN             )
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”) hereby acknowledges that on this             day of             20    , CIT Aerospace International (“ Lessor ”) did deliver for inspection and acceptance to Lessee under the Aircraft Lease Agreement made between Lessor and Lessee dated as of 30 November 2009 (the “ Lease ”) the Aircraft, as described below, together with all Aircraft Documents applicable thereto, in accordance with the Lease. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
 
 	(a)	Airframe 	
    Aircraft Model:                                     Airbus A319-100
    Manufacturer’s Serial Number:                                      
    Airframe Maintenance Status:
    Total Flight Hours:                       
    Total Cycles:                                 
 
 	(b)	Engines (Installed)	
    Engine Type                                             IAE V2527M-A5
    Manufacturer’s Serial                                                          and
    Numbers:                                                                                   
    Maximum Takeoff Thrust                                                lbs.
    Rating:
Engines Maintenance Status:
     Position 1
ESN:                                         
Total Flight Hours:                             
Total Cycles:                             
     Position 2
ESN:                                         
Total Flight Hours:                 
Total Cycles:                           

	  	App 3-1	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

 	(c)	APU (Installed)	
    APU Type                                                                                                                       
     Manufacturer’s Serial Number:                                                                                  
     APU Maintenance Status:
    Total APU Hours:                           
     Total APU Cycles:                          
 
 	(d)	Landing Gear (Installed)	
    Manufacturer’s Serial Numbers:         Left Main:                                 
                                                                       Right Main:                               
                                                                       Nose:                                         
     Landing Gear Maintenance Status:
     Left Main
    Total Flight Hours:                                     
     Total Cycles:                                     
     Right Main
    Total Flight Hours:                                        
    Total Cycles:                                         
     Nose
     Total Flight Hours:                                         
     Total Cycles:                                         
 
 	(e)	Interior Configuration	
Seating                                                                                                                                
Lavatories                                                                                                                           
Galleys                                                                                                                               
Passenger Service Units                                                                                                  
PSIU                                                                                                                                   

	  	App 3-2	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

 	(f)	Aircraft Documents	
As described in Attachment(s)                      to this Acceptance Certificate.
 
 	(g)	Fuel On Board	
                     kgs.
 
2.	Commercial Matters	
 
 	(a)	Rent	
 
 	(i)	Rent Payment Date:                     	
 
 	(ii)	Delivery Reference Rate:                      percent (      %)	
 
 	(iii)	Customisation Options Payment: $             	
 
 	(iv)	Basic Rent at Delivery: $             	
 
 	(b)	Aircraft Agreed Value	
$                     
 
 	(c)	Engine Agreed Value (each Engine) when not installed	
$                     
 
3.	Acceptance for Delivery	
(a) Lessee hereby confirms to Lessor on              , 20      at              A.M./P.M. GMT at              ,              that the above described Aircraft is in accordance with the specifications, terms and conditions for Delivery set forth in the Lease, is satisfactory in all respects and is in the condition required for Delivery under the Lease.
(b) The Scheduled Termination Date is              , 20      *.
 
 	*	NOTE: This stated date is provided for the convenience of the parties only and the provisions of Article 2 and Appendix 2A, paragraph 3 shall be controlling.	
(c) Lessee confirms that the Aircraft has been examined by its duly appointed and authorised representatives and the same conforms to the information set forth above.
(d) To Lessee’s knowledge, (i) no Default or Event of Default has occurred and is continuing, (ii) and Lessee has no claims, offsets, deductions, set-offs or defenses of any kind or nature in connection with the Lease.
(e) The execution and delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes, as between Lessee and Lessor, conclusive proof that the Aircraft is delivered in accordance with the description set forth in and in the condition required by the Lease, (iii) Lessee hereby expressly waives any right it may *****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 3-3	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

Attachment 1
to Acceptance Certificate
SUMMARY LISTING OF AGREED OPTIONS CHANGES
TO STANDARD SPECIFICATION

	  	App 3-4	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
0210	  	VOI02J1010302M1A	  	Compliance with FAR 25-856(b) burn through requirements	  	Accepted	  	150700	
					
2131	  	VOI21J3100101M1A	  	Introduce modified pressure controller P/N 20791-03AB	  	Accepted	  	38652	
					
2131	  	VOI21J3100102M2A	  	Introduce modified cabin pressure controller (CPC) P/N 20791-13AC	  	Accepted	  	39674	
					
2150	  	32Y21J5000011M1A	  	Air conditioning - Air cooling - Introduce new standard of air conditioning pack	  	Accepted	  	35805	
					
2150	  	VOI21J5000012M1A	  	Air conditioning - Air cooling - Introduce new standard of air conditioning system controller	  	Accepted	  	35863	
					
2260	  	VOI22J6000007M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0618 standard	  	Rejected	  	35522	
					
2260	  	VOI22J6000008M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0619 standard	  	Accepted	  	36766	
					
2260	  	VOI22J6000010M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0620 standard	  	Accepted	  	38777	
					
2270	  	VOI22J7014602M1A	  	Auto Flight - Flight Management System - Activation of backup nav mode in MCDU	  	Accepted	  	36427	
					
2282	  	VOI22J8210106M1A	  	Auto flight - Multipurpose Control and Display Unit (MCDU) - Introduce LCD technology	  	Accepted	  	35538	
					
2282	  	VOI22J8210109M1A	  	Auto flight - MCDU - Introduce new software standard	  	Accepted	  	36821	
					
2283	  	VOI22J8300102M1A	  	Auto flight - Flight Management Guidance Computer (FMGC) - Introduce std. compatible with PW engines	  	Accepted	  	35526	
					
2283	  	VOI22J8300106M1A	  	Auto flight - FMGC - Introduce Pllll new FMGC software standard.	  	Accepted	  	37311	
					
2283	  	VOI22J8311002M1A	  	Activate of “MOD NAV IN GO AROUND” on FMGC	  	Accepted	  	38399	
					
2312	  	VO123J1200101M1A	  	Communication - VHF System - VHF antenna part number change.	  	Accepted	  	38537	
					
2312	  	VOI23J1200102M1A	  	Communication - VHF System-Install Collins VDR Std VHF2100 P/N 822-1287-120 capable of VDL mode2	  	Accepted	  	38762	
					
2351	  	VOI23J5112502M1A	  	Communication-Audio management - Introduce non SATCOM T.E.A.M. ACP3000 P/N ACP2788ADO1	  	Accepted	  	38855	
					
2351	  	VOI23J5112703M1A	  	Communications - Audio management - Introduce new software standard of Audio Management Unit (AMU)	  	Rejected	  	36518	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 1/6	  	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
2351	  	VOI23J5112704M1A	  	Communications - Audio management Introduce new standard of Audio Management Unit (AMU)	  	Accepted	  	37583	
					
2373	  	32Y23J7300012M1A	  	Communications - CIDS - Introduce 131A standard of CIDS director	  	Accepted	  	35494/K9994	
					
2373	  	32Y23J7300015M1A	  	Communications - CIDS - Introduce new standard of DEUs	  	Accepted	  	35868	
					
2373	  	32Y23J7300016M1A	  	Communications - CIDS - Introduce black screensaver for cabin attendant panels	  	Rejected	  	35809	
					
2373	  	32Y23J7300023M1A	  	Communications - C1DS - Introduce new standard of OBRM software	  	Accepted	  	35885	
					
2373	  	32Y23J7300024M1A	  	Communications - CIDS - Configure for non-smoking aircraft at power up	  	Accepted	  	35559	
					
2373	  	VOI23J7300027M1A	  	Communications - CIDS - Introduce new standard of CIDS director	  	Accepted	  	37006	
					
2373	  	VOI23J7300028M1A	  	Communications - CIDS - Update OBRM software and update the Cabin Assignment Module (CAM)	  	Accepted	  	37007	
					
2373	  	VOI23J7300031M1A	  	CIDS - Install handsets N40A (Holmberg) - SFE	  	Accepted	  	39410	
					
2373	  	VO123J7300034M1A	  	Install GSM hardened handset N40A (Holmberg)	  	Accepted	  	150786	
					
2422	  	VOI24J2200004M2A	  	Electrical power - AC main generation - Introduce EEPGS GCU software standard 5.2	  	Accepted	  	39670	
					
2423	  	VOI24J2300006M1A	  	Electrical power - AC auxiliary generation - Introduce new standard of APU generator	  	Accepted	  	38054	
					
2432	  	VOI24J3200002M1A	  	Electrical power - DC main generation - Introduce a new standard of TRU	  	Accepted	  	34891	
					
2470	  	32Y24J7000101M1A	  	Electrical power - AC generation - Install electrical outlets in cockpit side consoles	  	Accepted	  	28568	
					
2511	  	VOI25J1100001M1A	  	Equipment/Furnishings - Cockpit seats - Introduce seats with a reinforced stop pin in seat base	  	Accepted	  	37440	
					
2610	  	VOI26J1000004M2A	  	Fire protection - Detection - Introduce new standard of Fire Detection Unit (FDU) PIN 3721-00	  	Accepted	  	38271	
					
2612	  	VOI26J1210804M1A	  	Fire protection - Engine fire and overheat detection - Introduce LEDs for fire protection panel	  	Accepted	  	38791	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 2/6	  	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
2624	  	VOI26J2410003M1A	  	Gauged portable fire extinguishers in cabin - FFE (Fire Fighting Entreprise) PIN BA21741GSR-2	  	Rejected	  	39825	
					
2740	  	32Y27J4000005M1A	  	Flight controls - Trimmable Horizontal Stabilizer (THS) - Introduce new standard of THS actuator	  	Accepted	  	35867	
					
2740	  	VOI27J4000006M1A	  	Flight controls - Trimmable Horizontal Stabilizer (THS) - Introduce new pitch trim indicator	  	Accepted	  	36686	
					
2793	  	VOI27J9310112M1A	  	Flight Controls - ELAC system (Elevator Aileron Computer) - Introduce L92K software standard of ELAC	  	Accepted	  	36445	
					
2793	  	VO127J9310113M1A	  	Flight controls - ELAC system - Introduce ELAC with software data loading capability	  	Accepted	  	36786	
					
2793	  	VOI27J9310115M2A	  	ELAC system - Introduce L93 software std and high altitude VMO/MMO overshoot protection hardening	  	Accepted	  	38008	
					
2793	  	VOI27J9310116M1A	  	Flight controls - ELAC system (Elevator aileron computer -Activate ELAC dataloading function.	  	Accepted	  	36999	
					
2795	  	VOI27J9510103M1A	  	Flight controls - FCDC system - Introduce standard 57 FCDC	  	Rejected	  	35546	
					
2821	  	VOI28J2110004M1A	  	Main fuel pump system - Modify fuel pump with improved securing of vapour return valve	  	Accepted	  	39067	
					
2821	  	VOI28J2110502M1A	  	Main fuel pump system - Fuel pumps - Change the standard of fuel pump	  	Accepted	  	36734/J2794	
					
2825	  	VOI26J2410003M1A	  	Fuel - Refuel/Defuel system - Remove gravity filling points from wings	  	Accepted	  	38209	
					
2842	  	VOI28J4210007M1A	  	Fuel - Quantity indicating - Introduce 14-20 standard of FQIC	  	Accepted	  	37409	
					
2842	  	VOI28J4210008M2A	  	Fuel - Quantity indicating - Introduce 14-10 standard of Fuel Quantity Indicating Computer (FQIC)	  	Accepted	  	38090	
					
2910	  	VOI29J1010405M1A	  	Hydraulic power - Main hydraulic power - Delete ground service manifolds	  	Accepted	  	36625	
					
2910	  	VOI29J1010406M1A	  	Hydraulic power - Main hydraulic power - Relocate blue hydraulic pump pressure switch	  	Accepted	  	36828	
					
2910	  	VOI29J2110409M2A	  	Hydraulic power - Auxiliary hydraulic power - Introduce new standard of electric pump	  	Rejected	  	37047	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 3/6	  	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
2922	  	VOI29J2200102M1A	  	Introduce Ram Air Turbine P/N 7663528	  	Accepted	  	38890	
					
2923	  	VOI29J2300104M1A	  	Hydraulic power Power transfer - Introduce new standard of Power Transfer Unit (PTU)	  	Not
applicable
anymore	  	36420	
					
3011	  	VOI30J1100001M1A	  	Introduce wing anti-ice valve Honeywell P/N 38E93-6	  	Accepted	  	39809	
					
3133	  	VOI31J3300004M1A	  	Indicating/Recording systems - DFDRS interconnection - Introduce new std of row config software	  	Accepted	  	35801	
					
3133	  	VOI31J3300103M1A	  	Install linear accelerometer L3COM P/N 17A717-03-00	  	Rejected	  	150196	
					
3136	  	VOI31J3610004M1A	  	Indicating/Recording systems - AIDS interconnection - Introduce TELEDYNE FDIMU	  	Rejected	  	30142	
					
3138	  	VOI31J3800005M1A	  	Introduce DLRB disk capable of ELAC dataloading	  	Accepted	  	38353	
					
3152	  	VOI31J5210501M1A	  	change basic radio altitude auto call-outs	  	Not
applicable
anymore	  	150090	
					
3153	  	VOI31J5310006M1A	  	Indicating/Record Systems - Flight Warning Computer (FWC) - Introduce H2F3 standard	  	Accepted	  	35220	
					
3153	  	VOI31J5310010M1A	  	Indicating/Recording Systems - Flight Warning Computer (FWC) - Introduce H2-F3P standard.	  	Accepted	  	38425	
					
3153	  	VOI31J5310508M1A	  	Indicating/Recording systems - FWC - Attenuate the buzzer associated with the crew call	  	Accepted	  	33832	
					
3156	  	VOI31J5600101M1A	  	Indicating/Recording systems - ECAM control panel - Introduce new hardware standard	  	Accepted	  	36677	
					
3160	  	VOI31J6000001M1A	  	Indicating/Recording Systems - Electronic Instrument System - Activate Engine Available Display	  	Accepted	  	34665	
					
3162	  	32Y31J6201003M1A	  	Indicating/Recording systems - DMC - Introduce std; capable of high speed teleloading to ARINC615A	  	Accepted	  	35520	
					
3162	  	VOI31J6201004M2A	  	Indicating/Recording systems - EIS - Introduce DMCs with EIS2 57 software	  	Accepted	  	36725	
					
3211	  	VOI32J1100104M1A	  	MLG - alternate harnesses vendor Aerazur	  	Accepted	  	151136/J3173	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 4/6	  	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
3221	  	32Y32J2110003M1A	  	Landing gear - Nose gear - Introduce new standard of NLG	  	Accepted	  	35241	
					
3221	  	32Y32J2110004M1A	  	Landing gear - Nose gear - Introduce new standard with heat shrink sleeve to prevent barrel wear	  	Accepted	  	36363	
					
3221	  	VOI32J2110005M1A	  	Landing gear - Nose gear - Introduce all-metal proximity switches and baulked lever	  	Accepted	  	36444	
					
3242	  	32Y32J4210505M1A	  	Landing gear - Normal braking - Introduce L4.8 standard of BSCU	  	Accepted	  	35216	
					
3242	  	VOI32J4210507M1A	  	Landing gear - Normal braking - Introduce L4.9 standard BSCU software	  	Accepted	  	36853	
					
3242	  	VOI32J4210508M1A	  	LANDING GEAR - NORMAL BRAKING - INSTALL BSCU SOFTWARE STD “L4.9 B” (EM2)	  	Accepted	  	38973	
					
3340	  	VOI33J4110206M1A	  	Introduce new Wingtip Navigation Light (LED technology)	  	Accepted	  	150780	
					
3348	  	VOI33J4810101M1A	  	Lights - Anti-collision/Strobe lighting - Introduce new wingtip power supply units	  	Accepted	  	36937	
					
3349	  	VOI33J4910304M2A	  	Lights -Wing and engine scan lighting - Introduce new standard of engine scan light	  	Accepted	  	37206	
					
3410	  	VOI34J1011727M1A	  	Navigation - ADIRS - Remove ADIRS CDU	  	Accepted	  	36743	
					
3411	  	VOI34J1100002M1A	  	Install Angle of Attack (AOA) sensors Thales P/N C16291AB	  	Accepted	  	150006	
					
3413	  	VOI34J1310603M1A	  	Navigation - Sensors power supply and switching - Introduce new standard of pitot probe	  	Accepted	  	35894	
					
3420	  	VOI34J2020203M1A	  	Navigation-Standby data: Integrated standby Instrument System (ISIS) - Introduce new indicator	  	Accepted	  	34429	
					
3436	  	VOI34J3600001M1A	  	Navigation-Instrument Landing System (LOC AND G/S) - Localizer antenna part number change.	  	Accepted	  	37762	
					
3436	  	VOI34J3600002M1A	  	Navigation Instrument Landing System (LOC AND G/S) - Glide/Slope antenna part number change.	  	Accepted	  	37763	
					
3436	  	VOI34J3611001M1A	  	Navigation - MMR - Introduce improved software standard	  	Accepted	  	37356	
					
3443	  	VOI34J4320309M1A	  	Navigation - TCAS - Change TCAS equipment from BFE to SFE	  	Rejected	  	37672	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 5/6	  	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  	MSN : 4403	  	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
3448	  	32Y34J4813205M1A	  	Navigation - GPWS - Activate peaks and obstacle modes	  	Accepted	  	31375	
					
3448	  	VOI34J4800002M1A	  	Navigation - Ground Proximity Warning System (GPWS) - Introduce GPWC with peaks/obstacle capability	  	Accepted	  	34634	
					
3450	  	VOI34J5011103M1A	  	Navigation - Dependent position determining - Reindustrialize ATC/DME antennas	  	Accepted	  	37880	
					
3455	  	VOI34J5510211M1A	  	Navigation - VOR/Marker - Reindustrialise marker antenna	  	Accepted	  	37881	
					
3530	  	VOI35J3000002M1A	  	Oxygen - Portable oxygen - Introduce lightweight portable oxygen cylinder assembly	  	Accepted	  	37110	
					
3611	  	VOI36J1100007M1A	  	Pneumatic - Engine bleed air supply - Introduce standard 9 Bleed Monitoring Computer (BMC)	  	Accepted	  	35550	
					
3622	  	VOI36J2200101M1A	  	Pneumatic - Leak detection - Activate pylon leak detection monitoring	  	Not
applicable
anymore	  	36595	
					
3831	  	VOI38J3110001M1A	  	Water/Waste - Toilet system - Introduce a new toilet assembly	  	Accepted	  	36639	
					
3831	  	VOI38J3110003M1A	  	Water/waste -Waste disposal - Introduce an improved vacuum generator	  	Accepted	  	35934	
					
4621	  	VOI46J2100102M1A	  	Information systems - ATIMS - Introduce ATSU hardware capable of high speed uploading on A/C	  	Accepted	  	33238	
					
4621	  	VOI46J2100103M1A	  	Information systems - ATIMS - Introduce ATSU software upgrade	  	Accepted	  	34869	
					
7322	  	VOI73J2200103M1A	  	Engine fuel and control - FADEC system - Introduce SCN19 EEC software standard	  	Accepted	  	35944	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 6/6	  	

List of RFC/SCN
08/07/2011
SEARCH CRITERIA

Family : A318/A319/A320/A321	  	MSN : 4403                               	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI56J001A	  	ALTERNATE LATERAL WINDOWS - SAINT-GOBAIN SULLY	  	 	ACCEPTED	  	  	 	VOI56J1010223S1A	  	  	 	5600	  	  	 	CN56.10.102 23	  	  	 	VOI	*A 	
							
VOI52J001A	  	INSTALLATION OF DEADBOLT ON REINFORCED COCKPIT DOOR	  	 	ACCEPTED	  	  	 	VOI52J5110008S1A	  	  	 	5251	  	  	 	CN52.51.100 08	 	  	 	VOI	*A 	
							
VOI51J007A	  	ALTERNATE PAINT SYSTEM (CF PRIMER, BASE COAT/CLEAR COAT) ON FUSELAGE and VERT. STABILIZER - MANKIEWICZ	  	 	ACCEPTED	  	  	 	VOI51J2270501S1A	  	  	 	5122	  	  	 	CN51.22.705 01	  	  	 	VOI	*A 	
							
VOI51J006A	  	ALTERNATE PAINT SYSTEMS (CF PRIMER) ON NACELLES-MANKIEWICZ	  	 	ACCEPTED	  	  	 	VOI51J2221506S1A	  	  	 	5122	  	  	 	CN51.22.215 06	  	  	 	VOI	*A 	
							
VOI51J003A	  	EXTERNAL LIVERY DECORATIVE ADHESIVE FILM (SFE)	  	 	ACCEPTED	  	  	 	VOI51J2225053S1A	  	  	 	5122	  	  	 	CN51.22.250 53	  	  	 	VOI	*A 	
							
VOI49J001A	  	APU ALTERNATE EQUIPMENT - HONEYWELL, GTCP131-9A	  	 	ACCEPTED	  	  	 	VOI49J0010506S1A	  	  	 	4900	  	  	 	CN49.00.105 06	  	  	 	VOI	*A 	
							
VOI46J2110213A	  	AIRBUS STANDARD AOC SOFTWARE FROM ROCKWELL COLLINS WITH UNITS IN KG (BY DEFAULT)	  	 	ACCEPTED	  	  	 	VOI46J2110213S1A	  	  	 	4621	  	  	 	CN46.21.102 13	  	  	 	VOI	*A 	
							
VOI35J003A	  	NON-INSTALLATION OF LIGHTWEIGHT OXYGEN ASSEMBLY FROM VENDOR AVOX (REVERT TO STEEL BOTTLES)	  	 	ACCEPTED	  	  	 	VOI35J3212032S2A	  	  	 	3532	  	  	 	CN35.32.120 32	  	  	 	VOI	*A 	
							
VOI35J002A	  	INTRODUCTION OF LIGHTWEIGHT OXYGEN ASSEMBLY FROM VENDOR AVOX	  	 	ACCEPTED	  	  	 	VOI35J3212030S1A	  	  	 	3532	  	  	 	CN35.32.120 30	  	  	 	VOI	*A 	
							
VOI34J008A	  	SINGLE WXR (ARINC 708A) WITH PWS AND MULTISCAN (WXR 2100) - ROCKWELL COLLINS, PN-213	  	 	ACCEPTED	  	  	 	VOI34J4130011S1A	  	  	 	3441	  	  	 	CN34.41.300 11	  	  	 	VOI	*A 	
							
VOI34J007A	  	EGPWC ALTERNATE EQUIPMENT - HONEYWELL, -003	  	 	ACCEPTED	  	  	 	VOI34J4812403S1A	  	  	 	3448	  	  	 	CN34.48.124 03	  	  	 	VOI	*A 	
							
VOI34J006A	  	INSTALLATION OF ISIS - THALES AVIONICS, PN C16221VA01	  	 	ACCEPTED	  	  	 	VOI34J2020206S1A	  	  	 	3420	  	  	 	CN34.20.202 06	  	  	 	VOI	*A 	
							
VOI34J005A	  	TCAS CHANGE 7 - ACSS 2000 / ATC ELS, EHS - ROCKWELL COLLINS 901 (-10006)	  	 	ACCEPTED	  	  	 	VOI34J4320037S1A	  	  	 	3443	  	  	 	CN34.43.200 37	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 1/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI34J004A	  	ADIRS 4MCU - HONEYWELL, PN HG2030AE23	  	 	ACCEPTED	  	  	 	VOI34J1011718S1A	  	  	 	3410	  	  	 	CN34.10.117 18	  	  	 	VOI	*A 	
							
VOI33J007A	  	INSTALLATION OF BRIGHTER LED PILOT CHART HOLDER AND MAP READING LIGHTS	  	 	ACCEPTED	  	  	 	VOI33J1210902S1A	  	  	 	3312	  	  	 	CN33.12.109 02	  	  	 	VOI	*A 	
							
VOI33J006A	  	LIGHTING COLOUR DEFINITION - CHANGE 1	  	 	ACCEPTED	  	  	 	VOI33J2113650S1A	  	  	 	3320	  	  	 	CN33.21.136 50	  	  	 	VOI	*A 	
							
VOI33J005A	  	EHC - PSU ATTENDANT CALL INDICATION LIGHT COLOR CHANGE TO BLUE	  	 	ACCEPTED	  	  	 	VOI33J2011605S1A	  	  	 	3320	  	  	 	CN33.20.116 05	  	  	 	VOI	*A 	
							
VOI33J004A	  	COLOURED ILLUMINATION WITH LED STRIPS IN CEILING	  	 	ACCEPTED	  	  	 	VOI33J2113615S1A	  	  	 	3320	  	  	 	CN33.21.136 15	  	  	 	VOI	*A 	
							
VOI33J003A	  	COLOURED ILLUMINATION WITH LED STRIPS IN SIDE WALLS	  	 	ACCEPTED	  	  	 	VOI33J2113614S1A	  	  	 	3320	  	  	 	CN33.21.136 14	  	  	 	VOI	*A 	
							
VOI33J002A	  	LIGHTING COLOUR DEFINITION	  	 	ACCEPTED	  	  	 	VOI33J2113610S1A	  	  	 	3320	  	  	 	CN33.21.136 10	  	  	 	VOI	*A 	
							
VOI29J001A	  	HYDRAULIC EDPS ALTERNATE EQUIPMENT - EATON AEROSPACE, PN 3031863-001	  	 	ACCEPTED	  	  	 	VOI29J1011012S1A	  	  	 	2910	  	  	 	CN29.10.110 12	  	  	 	VOI	*A 	
							
VOI25J054A	  	LH PARTITION PN CHANGE (BFE) - DRIESSEN	  	 	ACCEPTED	  	  	 	VOI25J2646409S1A	  	  	 	2526	  	  	 	CN25.26.464 09	  	  	 	VOI	*A 	
							
VOI25J053A	  	INSTALLATION OF ONE ADDITIONAL LIFE VEST DUE TO THE INSTALLATION OF THE 4TH OCCUPANT SEAT IN COCKPIT	  	 	ACCEPTED	  	  				  	 	2565	  	  	 	CN25.65.001 21	  	  	 	VOI	*A 	
							
VOI25J052A	  	CARPET PN CHANGE - ANKER	  	 	ACCEPTED	  	  	 	VOI25J2813289S1A	  	  	 	2528	  	  	 	CN25.28.132 89	  	  	 	VOI	*A 	
							
VOI25J051A	  	INTERIOR COLOUR SPECIFICATION CHANGE (2)	  	 	ACCEPTED	  	  	 	VOI25J2310305S1A	  	  	 	2523	  	  	 	CN25.23.103 05	  	  	 	VOI	*A 	
							
VOI25J050A	  	EMERGENCY EQUIPMENT DRAWING CHANGE DUE TO NEW LAYOUT	  	 	ACCEPTED	  	  	 	VOI25J6520626S1A	  	  	 	2565	  	  	 	CN25.65.206 26	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 2/14	  	

List of RFC/SCN
08/07/2011

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Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI25J049A	  	PASSENGER, CREW AND DEMO LIFE VEST CHANGE FROM HOOVER TO EASTERN AERO MARINE	  	 	ACCEPTED	  	  	 	VOI25J6609068S1A	  	  	 	2566	  	  	 	CN25.66.090 68	  	  	 	VOI	*A 	
							
VOI25J048A	  	CABIN LAYOUT CHANGE	  	 	ACCEPTED	  	  	 	VOI25J2034901S1A	  	  	 	2520	  	  	 	CN25.20.349 01	  	  	 	VOI	*A 	
							
VOI25J047A	  	EHC - INSTALLATION OF STOWAGE (BFE) - HEIGHT BELOW OHSC	  	 	ACCEPTED	  	  	 	VOI25J2760101S1A	  	  	 	2527	  	  	 	CN25.27.601 01	  	  	 	VOI	*A 	
							
VOI25J046A	  	HONEYWELL PORTABLE ELT P/N CHANGE (PN 1153538-1)	  	 	ACCEPTED	  	  	 	VOI25J6519763S2A	  	  	 	2565	  	  	 	CN25.65.197 63	  	  	 	VOI	*A 	
							
VOI25J045A	  	INSTALLATION OF ELECTRICAL FOOT WARMERS FOR PILOTS (INCREASED SETTING) - DIEHL GMBH	  	 	ACCEPTED	  	  	 	VOI25J1510103S1A	  	  	 	2515	  	  	 	CN25.15.101 03	  	  	 	VOI	*A 	
							
VOI25J044A	  	NTF SELECTION (SFE STANDARD I) - GERFLOR BATIFLEX AVR175A - SOLO	  	 	ACCEPTED	  	  	 	VOI25J2820006S2A	  	  	 	2528	  	  	 	CN25.28.200 06	  	  	 	VOI	*A 	
							
VOI25J043A	  	SEAT BELT PN CHANGE (VOI)	  	 	ACCEPTED	  	  	 	VOI25J2117932S1A	  	  	 	2521	  	  	 	CN25.21.179 32	  	  	 	VOI	*A 	
							
VOI25J042A	  	CHANGE EMERGENCY MEDICAL KIT PROVISIONS BY A MISCELLANEOUS EMERGENCY EQUIPMENT RACK (250 X 357 X 69)	  	 	ACCEPTED	  	  	 	VOI25J6401218S1A	  	  	 	2564	  	  	 	CN25.64.012 18	  	  	 	VOI	*A 	
							
VOI25J040A	  	SEAT PN CHANGE DUE TO LIFE VEST POUCH CHANGE (VOI)	  	 	ACCEPTED	  	  	 	VOI25J2117631S1A	  	  	 	2521	  	  	 	CN25.21.176 31	  	  	 	VOI	*A 	
							
VOI25J039A	  	REMOVAL OF ONE LIFE VEST IN COCKPIT (VOI)	  	 	ACCEPTED	  	  	 	VOI25J6519730S1A	  	  	 	2565	  	  	 	CN25.65.197 30	  	  	 	VOI	*A 	
							
VOI25J038A	  	STOWAGE P/N CHANGE DUE TO DESIGN ADAPTATION FOR EHC (VOI*A) -2	  	 	ACCEPTED	  	  	 	VOI25J2728817S1A	  	  	 	2527	  	  	 	CN25.27.288 17	  	  	 	VOI	*A 	
							
VOI25J036A	  	INTERIOR COLOUR SPECIFICATION CHANGE	  	 	ACCEPTED	  	  	 	VOI25J2310301S1A	  	  	 	2523	  	  	 	CN25.23.103 01	  	  	 	VOI	*A 	
							
VOI25J035A	  	INSTALLATION OF A320 FAMILY ENHANCED CABIN	  	 	ACCEPTED	  	  	 	VOI25J2020001S1A	  	  	 	2520	  	  	 	CN25.20.200 01	  	  	 	VOI	*A 	
							
VOI25J034A	  	DEMO BELT P/N UPDATE (VOI) -2	  	 	ACCEPTED	  	  	 	VOI25J6519881S1A	  	  	 	2565	  	  	 	CN25.65.198 81	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 3/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI25J033A	  	CABIN FLASHLIGHT P/N CHANGE (SFE) VENDOR DME	  	 	ACCEPTED	  	  	 	VOI25J6519879S1A	  	  	 	2565	  	  	 	CN25.65.198 79	  	  	 	VOI	*A 	
							
VOI23J017A	  	INSTALLATION OF SINGLE HF SYSTEM (DATA LINK CAPABLE) ROCKWELL COLLINS 900	  	 	ACCEPTED	  	  	 	VOI23J1111512S1A	  	  	 	2311	  	  	 	CN23.11.115 12	  	  	 	VOI	*A 	
							
VOI23J016A	  	BOOMSETS ALTERNATE EQUIPMENT - TELEX COMMUNICATIONS, PN 64300-210	  	 	ACCEPTED	  	  	 	VOI23J5113627S1A	  	  	 	2351	  	  	 	CN23.51.136 27	  	  	 	VOI	*A 	
							
VOI23J015A	  	CUSTOMIZED SCENARIO LIGHTING DEFINITION CHANGE 1	  	 	ACCEPTED	  	  	 	VOI23J7320862S1A	  	  	 	2373	  	  	 	CN23.73.208 62	  	  	 	VOI	*A 	
							
VOI23J014A	  	CIDS LIGHTING SCENARIO DEFINITION	  	 	ACCEPTED	  	  	 	VOI23J7300560S1A	  	  	 	2373	  	  	 	GN23.73.005 60	  	  	 	VOI	*A 	
							
VOI23J013A	  	SCENARIO BASED CABIN LIGHTING CONTROL	  	 	ACCEPTED	  	  	 	VOI23J7300550SIA	  	  	 	2373	  	  	 	GN23.73.005 50	  	  	 	VOI	*A 	
							
VOI23J010A	  	AUTOMATIC PROGRAMMABLE ELT (406AF) ASSOCIATED WITH REMOTE CONTROL PANEL IN COCKPIT - ELTA (BFE)	  	 	ACCEPTED	  	  	 	VOI23J0013231S2A	  	  	 	2300	  	  	 	CN23.00.132 31	  	  	 	VOI	*A 	
							
VOI22J001A	  	FM KITS (REL. 1A - FMGC S5I11) / MCDU ALTERN. EQUIP – THALES AVIONICS/SMITH ASSOC. WITH IAE ENGINES	  	 	ACCEPTED	  	  	 	VOI22J7010034S1A	  	  	 	2270	  	  	 	CN22.70.100 34	  	  	 	VOI	*A 	
							
VOI21J004A	  	INSTALLATION OF OZONE CATALYTIC CONVERTERS - ENGELHARDT CORPORATION, PN 20499006	  	 	ACCEPTED	  	  	 	VOI21J7010907S1A	  	  	 	2170	  	  	 	CN21.70.109 07	  	  	 	VOI	*A 	
							
VOI21J003A	  	AVIONICS VENTILATION AIR FILTER ALTERNATE EQUIPMENT - PALL-APME, QB0776	  	 	ACCEPTED	  	  	 	VOI21J2710806S1A	  	  	 	2127	  	  	 	CN21.27.108 06	  	  	 	VOI	*A 	
							
VOI11J026A	  	ENGINE DANGER AREA DECALS - FEET AND METRIC DISTANCES	  	 	ACCEPTED	  	  	 	VOI11J2010505S1A	  	  	 	1120	  	  	 	CN11.20.105 05	  	  	 	VOI	*A 	
							
VOI11J024A	  	CABIN PLACARD CHANGE ACCORDING TO REFERENCE DOCUMENT	  	 	ACCEPTED	  	  	 	VOI11J3013402S1A	  	  	 	1130	  	  	 	CN11.30.134 02	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 4/14	  	

List of RFC/SCN
08/07/2011

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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI11J023A	  	INSTALLATION OF WEIGHT PLACARD ON EACH OVERWIND HATCH	  	 	ACCEPTED	  	  	 	VOI11J3013105S1A	  	  	 	1130	  	  	 	CN11.30.131 05	  	  	 	VOI	*A 	
							
VOI11J6022A	  	PLACARD CORRECTION (TAI)	  	 	ACCEPTED	  	  	 	VOI11J3013401S1A	  	  	 	1130	  	  	 	CN11.30.134 01	  	  	 	VOI	*A 	
							
VOI11J021A	  	BILINGUAL EXTERNAL MARKINGS -TRANLATION MODIFICATION	  	 	ACCEPTED	  	  	 	VOI11J2012942S1A	  	  	 	1120	  	  	 	CN11.20.129 42	  	  	 	VOI	*A 	
							
VOI11J019A	  	INSTALLATION OF LEASING IDENTIFICATION PLATES ON ENGINES, LH DOOR FRAME AND LAV A PARTITION	  	 	ACCEPTED	  	  	 	VOI11J0012401S1A	  	  	 	1100	  	  	 	CN11.00.124 01	  	  	 	VOI	*A 	
							
VOI11J017A	  	NOSE LANDING GEAR (NLG) STEERING AND MAX TOW BAR ANGLE MARKINGS	  	 	ACCEPTED	  	  	 	VOI11J2011907S1A	  	  	 	1120	  	  	 	CN11.20.119 07	  	  	 	VOI	*A 	
							
VOI02J014A	  	AVIONICS/COCKPIT - CHANGE ROCKWELL COLLINS AOC FROM BFE TO SSBFE (WITH UNITS IN KG BY DEFAULT)	  	 	ACCEPTED	  	  	 	VOI02J3513093S1A	  	  	 	0235	  	  	 	CN02.35.130 93	  	  	 	VOI	*A 	
							
VOI02J012A	  	AIRCRAFT OPERATION ON RUNWAYS LESS THAN 45M WIDE	  	 	ACCEPTED	  	  	 	VOI02J1012301S1A	  	  	 	0210	  	  	 	CN02.10.123 01	  	  	 	VOI	*A 	
							
C9G71J001CK	  	INSTALLATION OF IAE SELECTONE OPTION PACKAGE	  	 	ACCEPTED	  	  				  	 	7100	  	  	 	CN71.00.100 02	  	  	 	C9G	*CK 	
							
C9G38J001CK	  	PROVIDE A COMPLIANCE STATEMENT WITH USPHS HANDBOOK ON SANITATION	  	 	ACCEPTED	  	  				  	 	3810	  	  	 	CN38.10.102 04	  	  	 	C9G	*CK 	
							
C9G34J002CK	  	FULL PROVISION FOR SECOND ADF SYSTEM	  	 	ACCEPTED	  	  				  	 	3453	  	  	 	CN34.53.109 01	  	  	 	C9G	*CK 	
							
C9G34J001CK	  	WIRING PROVISION FOR T2CAS	  	 	ACCEPTED	  	  				  	 	3443	  	  	 	CN34.43.240 01	  	  	 	C9G	*CK 	
							
C9G25J3101502CK	  	COMPLETE PROVISION WITHOUT BIN SEGMENTATION FOR A WET GALLEY - H/S AND F/S 4 TROLLEY, AREA 31.020	  	 	ACCEPTED	  	  				  	 	2531	  	  	 	CN25.31.015 02	  	  	 	C9G	*CK 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 5/14	  	

List of RFC/SCN
08/07/2011

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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
C9G25J1120803CK	  	INSTALLATION OF FOURTH OCCUPANT SEAT IN COCKPIT SOGERMA/SOCEA	  	 	ACCEPTED	  	  				  	 	2511	  	  	 	CN25.11.208 03	  	  	 	C9G	*CK 	
							
C9G25J002CK	  	INSTALLATION OF ONE ADDITIONAL LIFE VEST DUE TO THE INSTALLATION OF THE 4TH OCCUPANT SEAT IN COCKPIT	  	 	ACCEPTED	  	  				  	 	2565	  	  	 	CN25.65.001 21	  	  	 	C9G	*CK 	
							
C9G23J001CK	  	FULL PROVISION FOR A SECOND HF SYSTEM (ARINC 719)	  	 	ACCEPTED	  	  				  	 	2311	  	  	 	CN23.11.118 01	  	  	 	C9G	*CK 	
							
C9G11J002CK	  	US AND METRIC UNITS FOR CARGO COMPARTMENT HEIGHT PLACARDS	  	 	ACCEPTED	  	  				  	 	1130	  	  	 	CN11.30.136 01	  	  	 	C9G	*CK 	
							
C9G11J001CK	  	INSTALLATION OF LEASING IDENTIFICATION PLATES ON APU	  	 	ACCEPTED	  	  				  	 	1100	  	  	 	CN11.00.124 06	  	  	 	C9G	*CK 	
							
C9G02J003CK	  	COMPLIANCE STATUS FOR FAR 121	  	 	ACCEPTED	  	  				  	 	0212	  	  	 	CN02.12.117 05	  	  	 	C9G	*CK 	
							
C9G02J002CK	  	CABIN - CHANGE SSBFE INTO BFE	  	 	ACCEPTED	  	  				  	 	0235	  	  	 	CN02.35.141 13	  	  	 	C9G	*CK 	
							
C9G02J001CK	  	PORTABLE ELT STATUS CHANGE FROM SSBFE TO BFE	  	 	ACCEPTED	  	  				  	 	0235	  	  	 	CN02.35.139 05	  	  	 	C9G	*CK 	
							
32Y72J001A	  	IAE ENGINES - V2527M-A5 AT 26 500 LBF NOMINAL THRUST (A319-133)	  	 	ACCEPTED	  	  	 	32Y72J0011939S2A	  	  	 	7200	  	  	 	CN72.00.119 39	  	  	 	VOI	*A 	
							
32Y56J2110002A	  	INSTALLATION OF ADDITIONAL CABIN WINDOW BETWEEN FRAMES 64 AND 65 RH	  	 	ACCEPTED	  	  	 	32Y56J2110002S1A	  	  	 	5621	  	  	 	CN56.21.100 02	  	  	 	VOI	*A 	
							
32Y56J2110001A	  	INSTALLATION OF ADDITIONAL CABIN WINDOW BETWEEN FRAMES 64 AND 65 LH	  	 	ACCEPTED	  	  	 	32Y56J2110001S1A	  	  	 	5621	  	  	 	CN56.21.100 01	  	  	 	VOI	*A 	
							
32Y56J1010202A	  	ALTERNATE FRONT WINDOWS - SAINT-GOBAIN SULLY	  	 	ACCEPTED	  	  	 	32Y56J1010202S1A	  	  	 	5600	  	  	 	CN56.10.102 02	  	  	 	VOI	*A 	
							
32Y55J3010101A	  	INSTALLATION OF EROSION PROTECTION ON VERTICAL STABILIZER LEADING EDGE - STAINLESS STEEL	  	 	ACCEPTED	  	  	 	32Y55J3010101S1A	  	  	 	5530	  	  	 	CN55.30.101 01	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 6/14	  	

List of RFC/SCN
08/07/2011

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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y38J4110101A	  	INSTALLATION OF AUXILIARY COMPRESSOR IN THE POTABLE WATER PRESSURIZATION SYSTEM	  	 	ACCEPTED	  	  	 	32Y38J4110101S1A	  	  	 	3840	  	  	 	CN38.41.101 01	  	  	 	VOl	*A 	
							
32Y38J1010402A	  	INSTALLATION OF WATER CONDITIONER IN POTABLE WATER SYSTEM (A318, A319, A321)	  	 	ACCEPTED	  	  	 	32Y38J1010402S1A	  	  	 	3810	  	  	 	CN38.10.104 02	  	  	 	VOl	*A 	
							
32Y35J3110804A	  	COCKPIT PBE ALTERNATE EQUIPMENT (SFE) - AVOX SYSTEMS INC.	  	 	ACCEPTED	  	  	 	32Y35J3110804S1A	  	  	 	3531	  	  	 	CN35.31.108 04	  	  	 	VOl	*A 	
							
32Y35J2001001A	  	INSTALLATION OF FOUR OXYGEN MASKS PER BOX	  	 	ACCEPTED	  	  	 	32Y35J2001001S1A	  	  	 	3520	  	  	 	CN35.20.010 01	  	  	 	VOI	*A 	
							
32Y35J1120102A	  	COCKPIT OXYGEN CYLINDER ALTERNATE EQUIPMENT 115 CU FT (STEEL) - EROS (INTERTECHNIQUE GROUP)	  	 	ACCEPTED	  	  	 	32Y35J1120102S1A	  	  	 	3511	  	  	 	CN35.11.201 02	  	  	 	VOI	*A 	
							
32Y35J001A	  	IDENTIFICATION OF PAX CHEMICAL OXYGEN GENERATORS	  	 	ACCEPTED	  	  	 	32Y35J2010401S1A	  	  	 	3520	  	  	 	CN35.20.104 01	  	  	 	VOI	*A 	
							
32Y34J5010404A	  	DDRMI VOR/ADF/DME - ROCKWELL COLLINS	  	 	ACCEPTED	  	  	 	32Y34J5010404S1A	  	  	 	3457	  	  	 	CN34.50.104 04	  	  	 	VOI	*A 	
							
32Y34J4813203A	  	ACTIVATION OF THE OBSTACLE FUNCTION IN THE EGPWS - (EIS2)	  	 	ACCEPTED	  	  	 	32Y34J4813203S2A	  	  	 	3448	  	  	 	CN34.48.132 03	  	  	 	VOI	*A 	
							
32Y34J4813202A	  	ACTIVATION OF THE PEAKS FUNCTION IN THE EGPWS - (EI52)	  	 	ACCEPTED	  	  	 	32Y34J4813202S2A	  	  	 	3448	  	  	 	CN34.48.132 02	  	  	 	VOI	*A 	
							
32Y34J4210107A	  	RADIO ALTIMETERS ALTERNATE EQUIPMENT – ROCKWELL COLLINS 900	  	 	ACCEPTED	  	  	 	32Y34J4210107S1A	  	  	 	3442	  	  	 	CN34.42.101 07	  	  	 	VOI	*A 	
							
32Y34J2020202A	  	INSTALLATION OF ISIS - THALES AVIONICS	  	 	ACCEPTED	  	  	 	32Y34J2020202S1A	  	  	 	3420	  	  	 	CN34.20.202 02	  	  	 	VOI	*A 	
							
32Y34J1310601A	  	PITOT PROBES ALTERNATE EQUIPMENT - BF GOODRICH AEROSPACE	  	 	ACCEPTED	  	  	 	32Y34J1310601S1A	  	  	 	3413	  	  	 	CN34.13.106 01	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 7/14	  	

List of RFC/SCN
08/07/2011

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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y34J1310501A	  	INSTALLATION OF ASPIRATED TAT PROBES - BF GOODRICH AEROSPACE	  	 	ACCEPTED	  	  	 	32Y34J1310501S1A	  	  	 	3413	  	  	 	CN34.13.105 01	  	  	 	VOrA	  	
							
32Y34J003A	  	SINGLE WXR (ARINC 708A) WITH PWS AND MULTISCAN ROCKWELL COLLINS	  	 	ACCEPTED	  	  	 	32Y34J4130004S1A	  	  	 	3441	  	  	 	CN34.41.300 04	  	  	 	VOI	*A 	
							
32Y34J001A	  	RADIO ALTITUDE AUTOMATIC CALL-OUTS	  	 	ACCEPTED	  	  	 	32Y34J4211701S1A	  	  	 	3442	  	  	 	CN34.42.117 01	  	  	 	VOI	*A 	
							
32Y33J001A	  	INSTALLATION OF FLOOR-MOUNTED EEPMS - LUFTHANSA TECHNIK (WITH COVER) / EXIT IDENTIFIER - AIRSIGNA	  	 	ACCEPTED	  	  	 	32Y33J5011041S1A	  	  	 	3350	  	  	 	CN33.50.110 41	  	  	 	VOI	*A 	
							
32Y32J4820012A	  	INSTALLATION OF UNIVERSAL BRAKE COOLING FANS ON BF-GOODRICH WHEELS AND BRAKES	  	 	ACCEPTED	  	  	 	32Y32J4820012S1A	  	  	 	3248	  	  	 	CN32.48.200 12	  	  	 	VOI	*A 	
							
32Y32J4112005A	  	NLG TIRES SELECTION - MICHELIN (30X8.8-R15 RADIAL TIRES)	  	 	ACCEPTED	  	  	 	32Y32J4112005S1A	  	  	 	3241	  	  	 	CN32.41.120 05	  	  	 	VOI	*A 	
							
32Y32J4111101A	  	MLG TIRES SELECTION - MICHELIN (46X17-R20 RADIAL TIRES)	  	 	ACCEPTED	  	  	 	32Y32J4111101S1A	  	  	 	3241	  	  	 	CN32.41.111 01	  	  	 	VOI	*A 	
							
32Y32J4011325A	  	WHEELS AND BRAKES ALTERNATE EQUIPMENT (DURACARB) - GOODRICH	  	 	ACCEPTED	  	  	 	32Y32J4011325S1A	  	  	 	3240	  	  	 	CN32.40.113 25	  	  	 	VOI	*A 	
							
32Y32J001A	  	SMALL BORE INFLATION VALVES ON NLG and MLG BF GOODRICH WHEELS (WITHOUT INDICATOR)	  	 	ACCEPTED	  	  	 	32Y32J10110301S1A	  	  	 	3240	  	  	 	CN132.10.103 01	  	  	 	VOI	*A 	
							
32Y31J5210202A	  	ACTIVATION OF ECAM OEB REMINDER FUNCTION ON FWC	  	 	ACCEPTED	  	  	 	32Y31J5210202S1A	  	  	 	3152	  	  	 	CN31.52.102 02	  	  	 	VOI	*A 	
							
32Y31J3320014A	  	SSFDR ALTERNATE EQUIPMENT (256 W/S CAPABLE) - HONEYWELL	  	 	ACCEPTED	  	  	 	32Y31J3320014S1A	  	  	 	3133	  	  	 	CN31.33.200 14	  	  	 	VOl	*A 	
							
32Y30J1110101A	  	WING ANTI-ICE VALVES - HONEYWELL	  	 	ACCEPTED	  	  	 	32Y30J1110101S1A	  	  	 	3011	  	  	 	CN30.11.101 01	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 8/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y29J2110407A	  	ELECTROPUMPS ALTERNATE EQUIPMENT - EATON AEROSPACE	  	 	ACCEPTED	  	  	 	32Y29J2110407S1A	  	  	 	2910	  	  	 	CN29.21.104 07	  	  	 	VOI	*A 	
							
32Y25J6700101A	  	INSTALLATION OF MEDICAL OUTLETS IN AFT RH PSU CHANNEL (115V/400HZ and 28V DC/360 W)	  	 	ACCEPTED	  	  	 	32Y25J6700101S1A	  	  	 	2567	  	  	 	CN25.67.001 01	  	  	 	VOI	*A 	
							
32Y25J2821002A	  	NTF SELECTION (SFE STANDARD II) -TOP LAYER GERFLOR/BATIFLEX AV300 - SOLO	  	 	ACCEPTED	  	  	 	32Y25J2821002S1A	  	  	 	2528	  	  	 	CN25.28.210 02	  	  	 	VOI	*A 	
							
32Y25J2062210A	  	INSTALLATION OF ENLARGED RACEWAYS	  	 	ACCEPTED	  	  	 	32Y25J2062210S1A	  	  	 	2520	  	  	 	CN25.20.622 10	  	  	 	VOI	*A 	
							
32Y25J031A	  	RELOCATION OF ELT (32Y)	  	 	ACCEPTED	  	  	 	32Y25J6520250S1A	  	  	 	2565	  	  	 	CN25.65.202 50	  	  	 	VOI	*A 	
							
32Y25J029A	  	CATERING EQUIPMENT P/N CHANGE - AIRLINE LOGO (VOLARIS)	  	 	ACCEPTED	  	  	 	32Y25J3510805S1A	  	  	 	2535	  	  	 	CN25.35.108 05	  	  	 	VOI	*A 	
							
32Y25J028A	  	RELOCATION OF PBE (32Y)	  	 	ACCEPTED	  	  	 	32Y25J6519857S1A	  	  	 	2565	  	  	 	CN25.65.198 57	  	  	 	VOI	*A 	
							
32Y25J027A	  	C/A SEAT RESTRAINT SYSTEM CHANGE	  	 	ACCEPTED	  	  	 	32Y25J2217003S1A	  	  	 	2522	  	  	 	CN25.22.170 03	  	  	 	VOI	*A 	
							
32Y25J026A	  	INSTAL. OF SLIDE RAFTS AT FWD AND AFT PAX/CREW/SERVICE DOORS (SFE) - AIR CRUISERS (A318/A319/A320)	  	 	ACCEPTED	  	  	 	32Y25J6210202S1A	  	  	 	2562	  	  	 	CN25.62.102 02	  	  	 	VOI	*A 	
							
32Y25J025A	  	REPLACEMENT OF CAS AND INSTALLATION OF ADDITIONAL DOGHOUSE (BFE) FROM SUPPLIER DRIESSEN	  	 	ACCEPTED	  	  	 	32Y25J2216910S1A	  	  	 	2522	  	  	 	CN25.22.169 10	  	  	 	VOI	*A 	
							
32Y25J024A	  	INSTALLATION OF EMERGENCY EQUIPMENT CONTAINERS IN GALLEYS G1 AND AFT GALLEY/STOWAGE	  	 	ACCEPTED	  	  	 	32Y25J3510696S1A	  	  	 	2535	  	  	 	CN25.35.106 96	  	  	 	VOI	*A 	
							
32Y25J023A	  	INSTALLATION OF 110 VAC/60 HZ PED POWER OUTLET(S) AT SELECTED SEAT(S) (Y/CLASS) - K1D-SYSTEME GMBH	  	 	ACCEPTED	  	  	 	32Y25J2101001S1A	  	  	 	2521	  	  	 	C1425.21.010 01	  	  	 	VOI	*A 	
							
32Y25J022A	  	IN-SEAT POWER SUPPLY SYSTEM CHANGES	  	 	ACCEPTED	  	  	 	32Y25J2100200G1A	  	  	 	2521	  	  				  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 9/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y25J021A	  	ADDITIONAL EMERGENCY EQUIPMET OUT OF EECG (32Y)	  	 	ACCEPTED	  	  	 	32Y25J6550167S1A	  	  	 	2565	  	  	 	CN25.65.501 67	  	  	 	VOI	*A 	
							
32Y25J020A	  	FULL PROVISIONS FOR LAVATORY D AND E	  	 	ACCEPTED	  	  	 	32Y25J4211510S1A	  	  	 	2540	  	  	 	CN25.42.115 10	  	  	 	VOI	*A 	
							
32Y25J019A	  	FULL PROVISIONS FOR GALLEY G5 INSTALLATION	  	 	ACCEPTED	  	  	 	32Y25J3111216S1A	  	  	 	2530	  	  	 	CN25.31.112 16	  	  	 	VOI	*A 	
							
32Y25J018A	  	INSTALLATION OF STOWAGE, UNDER BIN HEIGHT (BFE} SUPPLIER DRIESSEN	  	 	ACCEPTED	  	  	 	32Y25J2717040S1A	  	  	 	2524	  	  	 	CN25.27.170 40	  	  	 	VOI	*A 	
							
32Y25J017A	  	INSTALLATION OF STOWAGE BETWEEN LAVATORY AND F (BFE) SUPPLIER DRIESSEN	  	 	ACCEPTED	  	  	 	32Y25J2717039S1A	  	  	 	2524	  	  	 	CN25.27.170 39	  	  	 	VOI	*A 	
							
32Y25J016A	  	INSTALLATION OF WINDSREENS FWD OF THE AFT PASSENGER DOOR (BFE) SUPPLIER DRIESSEN	  	 	ACCEPTED	  	  	 	32Y25J2614036S1A	  	  	 	2526	  	  	 	CN25.26.140 36	  	  	 	VOI	*A 	
							
32Y25J015A	  	CARGO HOLD CONFIGURATION	  	 	ACCEPTED	  	  	 	32Y25J5000100G1A	  	  	 	2550	  	  				  	 	VOI	*A 	
							
32Y25J014A	  	PROVISION FOR C/A SEAT AT LOCATION 9 - FORWARD OF AFT RH PASSENGER/CREW/SERVICE DOOR (SWIVEL TYPE)	  	 	ACCEPTED	  	  	 	32Y25J2210405S1A	  	  	 	2522	  	  	 	CN25.22.104 05	  	  	 	VOI	*A 	
							
32Y25J013A	  	PROVISION FOR C/A SEAT AT LOCATION 4 - FORWARD OF AFT LH PASSENGER/CREW/SERVICE DOOR (Y 495.8 MM)	  	 	ACCEPTED	  	  	 	32Y25J2210051S1A	  	  	 	2522	  	  	 	CN25.22.100 51	  	  	 	VOI	*A 	
							
32Y25J012A	  	C/A SEAT AT LOCATION 7 -AFT OF AFT LH DOOR (Y 753.75 MM) - WITH MODIFIED STOWAGE	  	 	ACCEPTED	  	  	 	32Y25J2212031S1A	  	  	 	2522	  	  	 	GN25.22.120 31	  	  	 	VOI	*A 	
							
32Y25J011A	  	INSTALLATION OF HOLDER FOR SOAP BOTTLES CELESTE	  	 	ACCEPTED	  	  	 	32Y25J4520118S1A	  	  	 	2540	  	  	 	CN25.45.201 18	  	  	 	VOI	*A 	
							
32Y25J010A	  	WASHBASIN IN ALTERNATE MATERIAL - STAINLESS STEEL (VARICOR WORK-TOP)	  	 	ACCEPTED	  	  	 	32Y25J4518003S1A	  	  	 	2545	  	  	 	CN25.45.180 03	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 10/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y25J009A	  	INSTALLATION OF NON-ELECTRICAL GALLEY CATERING EQUIPMENT (BEE) (CHANGE 1)(HEAD OF VERS.)	  	 	ACCEPTED	  	  	 	32Y25J3513103S1A	  	  	 	2535	  	  	 	CN25.35.131 03	  	  	 	VOI	*A 	
							
32Y25J008A	  	INSTALLATION OF ELECTRICAL GALLEY CATERING EQUIPMENT (BFE) (CHANGE 1)	  	 	ACCEPTED	  	  	 	32Y25J3513004S1A	  	  	 	2535	  	  	 	CN25.35.130 04	  	  	 	VOI	*A 	
							
32Y25J006A	  	FROM DISPERSION-ADHESIVE TO DOUBLE-SIDED ADHESIVE TAPE	  	 	ACCEPTED	  	  	 	32Y25J2810302S1A	  	  	 	2528	  	  	 	CN25.28.103 02	  	  	 	VOI	*A 	
							
32Y25J005A	  	DELIVERY OF LOOSE PARTS FOR LATER INSTALLATION OF IFE CONTROL PANEL ON OHSC	  	 	ACCEPTED	  	  	 	32Y25J2412010S1A	  	  	 	2524	  	  	 	CN25.24.120 10	  	  	 	VOI	*A 	
							
32Y25J004A	  	CABIN LAYOUT DEFINITION	  	 	ACCEPTED	  	  	 	32Y25J2000100G1A	  	  	 	2520	  	  				  	 	VOI	*A 	
							
32Y25J003A	  	CABIN EMERGENCY EQUIPMENT	  	 	ACCEPTED	  	  	 	32Y25J0000100G1A	  	  	 	2500	  	  				  	 	VOI	*A 	
							
32Y25J002A	  	IFE CREW PANEL STRUCTURAL PROVISION IN ENHANCED OHSC - PANASONIC	  	 	ACCEPTED	  	  	 	32Y25J2413229S1A	  	  	 	2524	  	  	 	CN25.24.132 29	  	  	 	VOI	*A 	
							
32Y25J001A	  	INTERIOR COLOR SCHEME DEFINITION	  	 	ACCEPTED	  	  	 	32Y25J2350001S1A	  	  	 	2523	  	  	 	CN25.23.500 01	  	  	 	VOI	*A 	
							
32Y23J7110310A	  	SSCVR ALTERNATE EQUIPMENT - HONEYWELL	  	 	ACCEPTED	  	  	 	32Y23J7110310S1A	  	  	 	2371	  	  	 	CN23.71.103 10	  	  	 	VOI	*A 	
							
32Y23J009A	  	INSTAL. OF THIRD RMP WITH TURBO TUNING OF VHF CHANNELS and HF DATA ACTIV. CAPABILITY - THALES AVIONICS	  	 	ACCEPTED	  	  	 	32Y23J131010651A	  	  	 	2313	  	  	 	CN23.13.101 06	  	  	 	VOI	*A 	
							
32Y23J007A	  	COCKPIT HAND MICROPHONE ALTERNATE EQUIPMENT - HOLMBERG	  	 	ACCEPTED	  	  	 	32Y23J5013804S1A	  	  	 	2350	  	  	 	CN23.50.138 04	  	  	 	VOI	*A 	
							
32Y23J005A	  	FLASHING STEWARD CALL LIGHT	  	 	ACCEPTED	  	  	 	32Y23J7314401S1A	  	  	 	2373	  	  	 	CN23.73.144 01	  	  	 	VOI	*A 	
							
32Y23J004A	  	PROVISION FOR VCC IN OHSC AFT OF DOOR 1 LH	  	 	ACCEPTED	  	  	 	32Y23J3610504S1A	  	  	 	2336	  	  	 	CN23.36.105 04	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 11/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y23J003A	  	WIRING PROVISIONS FOR DIGITAL SERVER SYSTEM (SC-A AND CREW PANEL) - PANASONIC	  	 	ACCEPTED	  	  	 	32Y23J3600701S1A	  	  	 	2336	  	  	 	CN23.36.007 01	  	  	 	VOI	*A 	
							
32Y23J002A	  	CIDS CHANGES	  	 	ACCEPTED	  	  	 	32Y23J7300100G1A	  	  	 	2373	  	  				  	 	VOI	*A 	
							
32Y23J001A	  	ENTERTAINMENT SYSTEM	  	 	ACCEPTED	  	  	 	32Y23J3600100G1A	  	  	 	2336	  	  				  	 	VOI	*A 	
							
32Y21J002A	  	NON INSTALLATION OF NEW RPCU	  	 	ACCEPTED	  	  	 	32Y21J3000020S1A	  	  	 	2130	  	  	 	CN21.30.000 20	  	  	 	VOI	*A 	
							
32Y11J016A	  	SECOND LANGUAGE FOR DOOR OPERATION EXTERNAL PLACARDS AND MARKINGS	  	 	ACCEPTED	  	  	 	32Y11J2010001S1A	  	  	 	1120	  	  	 	CN11.20.100 01	  	  	 	VOI	*A 	
							
32Y11J015A	  	ADDITIONAL LANGUAGE SPANISH ON CREW PLACARD	  	 	ACCEPTED	  	  	 	32Y11J3012212S1A	  	  	 	1130	  	  	 	CN11.30.122 12	  	  	 	VOI	*A 	
							
32Y11J013A	  	MLG TIRE INFLATING PLACARD (TAI)	  	 	ACCEPTED	  	  	 	32Y11J2210004S1A	  	  	 	1122	  	  	 	CN11.22.100 04	  	  	 	VOI	*A 	
							
32Y11J012A	  	ADDITIONAL EXTERNAL MARKINGS	  	 	ACCEPTED	  	  	 	32Y11J2012875S1A	  	  	 	1120	  	  	 	CN11.20.128 75	  	  	 	VOI	*A 	
							
32Y11J011A	  	INSTALLATION OF ADDITIONAL MANUFACTURER IDENTIFICATION PLATE ON REAR LH FUSELAGE (FAA REQUIREMENT)	  	 	ACCEPTED	  	  	 	32Y11J0010504S1A	  	  	 	1100	  	  	 	CN11.00.105 04	  	  	 	VOI	*A 	
							
32Y11J010A	  	AIR CONDITIONING PACKS OUTLET (RAM AIR)	  	 	ACCEPTED	  	  	 	32Y11J2012867S1A	  	  	 	1120	  	  	 	CN11.20.128 67	  	  	 	VOI	*A 	
							
32Y11J009A	  	RAM AIR TURBINE - BILINGUAL MARKINGS (ENGLISH / SPANISH)	  	 	ACCEPTED	  	  	 	32Y11J2011507S1A	  	  	 	1120	  	  	 	CN11.20.115 07	  	  	 	VOI	*A 	
							
32Y11J008A	  	SECOND LANGUAGE FOR SELECTED EXTERNAL PLACARDS AND MARKINGS (A319)	  	 	ACCEPTED	  	  	 	32Y11J2011001S1A	  	  	 	1120	  	  	 	CN11.20.110 01	  	  	 	vorA	  	
							
32Y11J007A	  	BILINGUAL CABIN PLACARDS PER CUSTOMIZED DEFINITION (32Y)	  	 	ACCEPTED	  	  	 	32Y11J3011032S1A	  	  	 	1130	  	  	 	CN11.30.110 32	  	  	 	VOI	*A 	
							
32Y11J006A	  	INSTALLATION OF ADDITIONAL PLACARD IN LAVATORIES (TAI)	  	 	ACCEPTED	  	  	 
 	32Y11
J3012772S1A	  
  	  	 	1130	  	  	 	CN11.30.127 72	  	  	 	VOI	*A 	
							
32Y11J005A	  	INSTALLATION OF PLACARDS ON EMERGENCY EQUIPMENT CONTAINERS	  	 	ACCEPTED	  	  	 	32Y11J3012207S1A	  	  	 	1130	  	  	 	CN11.30.122 07	  	  	 	VOI	*A 	
							
32Y11J004A	  	SECOND LANGUAGE FOR RESIDUAL CABIN and CARGO PRESSURE DOOR WARNING PLACARDS	  	 	ACCEPTED	  	  	 	32Y11J0013601S1A	  	  	 	1100	  	  	 	CN11.00.136 01	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 12/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
32Y11.1003A	  	RVSM MARKINGS (TAI)	  	 	ACCEPTED	  	  	 	32Y11J2012507S1A	  	  	 	1120	  	  	 	CN11.20.125 07	  	  	 	VOI	*A 	
							
32Y11J001A	  	BILINGUAL EEPMS EXIT IDENTIFIER - ENGLISH BELOW (VERTICAL) AND SECOND LANGUAGE (HORIZ.) - AIRSIGNA	  	 	ACCEPTED	  	  	 	32Y11J3011136S1A	  	  	 	1130	  	  	 	CN11.30.111 36	  	  	 	VOI	*A 	
							
32Y03J001A	  	A319-133 INCREASED DESIGN WEIGHTS - MTOW TO 75.5 T, MLW TO 62.5 T, MZFW TO 58.5 T (WV 002)	  	 	ACCEPTED	  	  	 	32Y03J2043302S2A	  	  	 	0320	  	  	 	CN03.20.433 02	  	  	 	VOI	*A 	
							
32Y02J1012001A	  	15 KNOTS TAILWIND CERTIFICATION AT TAKE-OFF	  	 	ACCEPTED	  	  	 	32Y02J1012001S1A	  	  	 	0210	  	  	 	CN02.10.120 01	  	  	 	VOI	*A 	
							
32Y02J1011101A	  	COMPLIANCE WITH FAA TYPE CERTIFICATION REQUIREMENTS	  	 	ACCEPTED	  	  	 	32Y02J1011101S1A	  	  	 	0212	  	  	 	CN02.10.111 01	  	  	 	VOI	*A 	
							
32Y02J010A	  	ADAPT EXTERNAL LIVERY	  	 	ACCEPTED	  	  	 	32Y02J4010835S1A	  	  	 	0240	  	  	 	CN02.40.108 35	  	  	 	VOI	*A 	
							
32Y02J009A	  	REGISTRATION CODE NUMBER ON NLG DOOR	  	 	ACCEPTED	  	  	 	32Y02J4010829S1A	  	  	 	0240	  	  	 	CN02.40.108 29	  	  	 	VOI	*A 	
							
32Y02J008A	  	EXTERNAL LIVERY	  	 	ACCEPTED	  	  	 	32Y02J4010101S1A	  	  	 	0240	  	  	 	CN02.40.101 01	  	  	 	VOI	*A 	
							
32Y02J007A	  	AVIONICS EQUIPMENT TURNED INTO SSBFE (32Y)	  	 	ACCEPTED	  	  	 	32Y02J3513046S1A	  	  	 	0235	  	  	 	CN02.35.130 46	  	  	 	VOI	*A 	
							
32Y02J006A	  	SELLER SUPPLIED BUYER FURNISHED EQUIPMENT (CHANGE BFE INTO SFE) - 32Y	  	 	ACCEPTED	  	  	 	32Y02J3513563S1A	  	  	 	0235	  	  	 	CN02.35.135 63	  	  	 	VOI	*A 	
							
32Y02J005A	  	CERTIFICATION OF OVEN WITHOUT INSTALLATION	  	 	ACCEPTED	  	  	 	32Y02J1015002S1A	  	  	 	0210	  	  	 	CN02.10.150 02	  	  	 	VOI	*A 	
							
32Y02J004A	  	CERTIFICATION OF DYNAMICALLY TESTED PASSENGER SEATS-ALL CLASSES	  	 	ACCEPTED	  	  	 	32Y02J1010420S1A	  	  	 	0210	  	  	 	CN02.10.104 20	  	  	 	VOI	*A 	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 13/14	  	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
						
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
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RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	
32Y02J003A	  	CERTIFICATION FOR HIGH ALTITUDE AIRPORT OPERATION UP TO 14100 FT (CJ)	  	 	ACCEPTED	  	  	 	32Y02J1012801S1A	  	  	 	0200	  	  	 	CN02.10.128 01	  	  	VOI*A	
							
32Y02J002A	  	EXTENDED ENVIRONMENTAL ENVELOPE (ISA + 40)	  	 	ACCEPTED	  	  	 	32Y02J1210801S1A	  	  	 	0212	  	  	 	CN02.12.108 01	  	  	VOI*A	
32Y02J001A	  	15 KNOTS TAILWIND CERTIFICATION AT LANDING	  	 	ACCEPTED	  	  	 	32Y02J1012002S1A	  	  	 	0210	  	  	 	CN02.10.120 02	  	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 14/14	  	

Attachment 2
to Acceptance Certificate
[AIRS REPORT – DOCUMENTATION LISTING]

	  	App 3-6	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

									
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 1	
	  		  		  	A319	  		
AIRBUS INDUSTRIE	  	TABLE OF CONTENTS	  	MSN : 4403	  	DATE : 05 AUG 2010	

							
CHAPTER	 	DESCRIPTION	  	NUMBER
OF
PAGES	 	
			
	 	COVER PAGE	  	 	1	  	
			
0	 	ACCEPTANCE SHEET	  	 	1	  	
			
1	 	TABLE OF CONTENTS	  	 	1	  	
			
2	 	CONSTITUENT ASSEMBLIES	  	 	2	  	
			
3	 	EQUIPMENT	  	 	54	  	
			
4	 	CONFORMITY TO THE DESIGN STANDARD REQUIREMENTS	  	 	18	  	
			
A	 	RECORDABLE CONCESSIONS	  	 	1	  	
			
B	 	CONCESSIONS FOR CUSTOMER INFORMATION	  	 	2	  	

													
	  	Aircraft Inspection Report	  	Aircraft	  	Chapter 0	  	Page: 1/1	
	  	Acceptance sheet	  	A319-133	  	Date : 05 Aug 2010	
	  		  	MSN : 4403	  		
 
We, the undersigned representatives of AIRBUS PRODUCTION ORGANIZATION (EASA.21G.0001), certify that this AIRCRAFT INSPECTION REPORT states the condition of aircraft-type A319 model -133 MSN 4403 to be delivered to the customer.
We hereby certify that:
 
 	•	 	All constituent assemblies in chapter 2 manufactured under the responsibility of the respective firms, were delivered under the cover of a release certificate according to the procedure agreed by the Competent Authorities.	
 
 	•	 	The aircraft conforms, except where indicated in this report, to the definition given by the Airbus configuration data-bases. This includes conformity to the type certificate definition as referenced in AI/EA-S document no. 413.1205/99 issue 02 dated 30 Jul 1999.	
 
 	•	 	All the required ground tests have been performed and are recorded in the relevant constituent assemblies inspection reports.	
 
 	•	 	Aircraft weighing is recorded in report reference EDGWOM no. RP1022864 dated 28 Jul 2010.	

Established and Verified on 05 Aug 2010 by	 		  	Approved on 05 Aug 2010 by	
M. Rullmann	 		  	R. Jahn	
			
Programme FAL Quality Department	 		  	Aircraft Conformity Department	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	1	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 21	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
127	 	2140HM	 	VALVE-CHECK	 	F4957	 	TECHNOFAN	 	CT191B	 		 		 	L00905	
128	 	18HQ	 	FAN-AVIONICS	 	F4957	 	TECHNOFAN	 	EVT3454HC	 		 		 	164901629	
128	 	20HQ	 		 		 		 		 		 		 	164901630	
138	 	14HG	 	FAN-RECIRCULATION	 	D1227	 	AOA APPARATEBAU GAUTI	 	VD3909-00	 		 		 	10043299	
137	 	15HG	 		 		 		 		 		 		 	10043298	
172	 	1HU	 	FAN-EXTRACTION	 	D1227	 	AOA APPARATEBAU GAUTI	 	VD3920	 		 		 	10065250	
127	 	15HQ	 	VALVE-SKIN AIR	 	F4957	 	TECHNOFAN	 	VFT210B00	 		 		 	042701002	
126	 	22HQ	 	VALVE-SKIN AIR	 	F4957	 	TECHNOFAN	 	VFT300B00	 		 		 	042600922	
127	 	21HQ	 	VALVE-BUTTERFLY,AIR	 	F4957	 	TECHNOFAN	 	V2T127D	 		 		 	L00775	
128	 	16HQ	 	VALVE-BUTTERFLY,AIR	 	F4957	 	TECHNOFAN	 	V2T152D	 		 		 	L02252	
125	 	23HQ	 		 		 		 		 		 		 	L02237	
128	 	24HQ	 		 		 		 		 		 		 	L02189	
191	 	20HM	 	INJECTOR-WATER	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1091A0000-01	 		 		 	11688	
192	 	21HM	 		 		 		 		 		 		 	11663	
125	 	17HQ	 	SWITCH-PRESSURE	 	F0218	 	LE BOZEC FILTRATION &	 	1209-100	 		 		 	13845	
127	 	19HQ	 		 		 		 		 		 		 	13922	
128	 	30HQ	 		 		 		 		 		 		 	13827	
137	 	4020HM	 	VALVE-CHECK	 	C0002	 	NORD-MICRO AG & CO. O	 	12664	 		 		 	10126470	
138	 	4021HM	 		 		 		 		 		 		 	10126471	
137	 	4022HM	 		 		 		 		 		 		 	10126464	
191	 	18HM	 	VALVE-CHECK	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1298A0000-01	 		 		 	1298-15622	
192	 	19HM	 		 		 		 		 		 		 	1298-15631	
137	 	11HK	 	VALVE-TRIM AIR	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1320A0000-01	 		 		 	1320-21452	
137	 	12HK	 		 		 		 		 		 		 	1320-21455	
138	 	13HK	 		 		 		 		 		 		 	1320-21456	
191	 	10HM	 	PACK-AIR CONDITIONING	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1802A0000-03	 		 		 	1802-05106	
192	 	11HM	 		 		 		 		 		 		 	1802-05108	
121	 	47HH	 	CONTROLLER-AIR CONDIT	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1803B0000-02	 		 		 	1803B00LI004275	
121	 	57HH	 		 		 		 		 		 		 	1803B00LI004277	
191	 	23HB	 	VALVE ASSY-FLOW CONTR	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1806B0000-02	 		 		 	1806-05682	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	2	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 21	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
192	 	24HB	 	VALVE ASSY-FLOW CONTR	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1806B0000-02	 		 		 	1806-05683	
191	 	8HH	 	ACTUATOR-INLET	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1809A0000-01	 		 		 	1809A00IN004563	
192	 	28HH	 		 		 		 		 		 		 	1809A00IN004564	
191	 	100HM	 	FILTER-OZONE	 	04VR7	 	BASF CATALYSTS LLC	 	20499006	 		 		 	10403	
191	 	101HM	 		 		 		 		 		 		 	10405	
172	 	1OHL	 	VALVE-OUTFLOW	 	C0002	 	NORD-MICRO AG & CO. O	 	20790-03AC	 		 		 	10116377	
121	 	11HL	 	CONTROLLER-PRESSURE	 	C0002	 	NORD-MICRO AG & CO. O	 	20791-13AC	 		 		 	1054603	
122	 	12HL	 		 		 		 		 		 		 	1054605	
191	 	14HH	 	SENSOR-PRESSURE	 	F1958	 	LIEBHERR-AEROSPACE TO	 	2696A0000-01	 		 		 	2696A00LI007807	
192	 	20HH	 		 		 		 		 		 		 	2696A00L1007802	
137	 	7HZ	 	ACTUATOR-EMERGENCY,RA	 	D2638	 	ELEKTRO METALL GMBH	 	41-2-1100-02	 		 		 	4613	
137	 	20HB	 	ACTUATOR-ROTARY	 	C0002	 	NORD-MICRO AG & CO. O	 	6610-20560-01	 		 		 	6184	
137	 	14HK	 	VALVE-TRIM AIR PRESSU	 	F1958	 	LIEBHERR-AEROSPACE TO	 	746A0000-06	 		 		 	746-10329	
137	 	15HK	 	SENSOR-TEMPERATURE	 	F1958	 	LIEBHERR-AEROSPACE TO	 	764A0000-03	 		 		 	34124	
137	 	16HK	 		 		 		 		 		 		 	34090	
137	 	17HK	 		 		 		 		 		 		 	34132	
137	 	24HK	 		 		 		 		 		 		 	34143	
138	 	25HK	 		 		 		 		 		 		 	34139	
191	 	15HM	 	VALVE-CHECK	 	F1958	 	LIEBHERR-AEROSPACE TO	 	769B0000-01	 		 		 	0769B00LI009921	
138	 	16HM	 		 		 		 		 		 		 	0769B00LI009911	
210	 	21HK	 	SENSOR-TEMPERATURE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	773A0000-01	 		 		 	27621	
232	 	22HK	 		 		 		 		 		 		 	27448	
252	 	23HK	 	SENSOR-TEMPERATURE	 	F1958	 	LIEBHERR-AEROSPACE TO	 	773A0000-01	 		 		 	27561	
210	 	27HK	 	SELECTOR-TEMPERATURE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	777B0000-02	 		 		 	0777B00IN005921	
210	 	28HK	 		 		 		 		 		 		 	0777B00IN005950	
210	 	29HK	 		 		 		 		 		 		 	0777B00IN005954	
128	 	26HQ	 	SENSOR-DUCT TEMPERATU	 	F9111	 	THALES AVIONICS	 	87232323V00	 		 		 	VL2064005688	
126	 	28HQ	 	SENSOR-SKIN TEMPERATU	 	F9111	 	THALES AVIONICS	 	87232324V00	 		 		 	4989	
128	 		 	AEVC-AVIONICS EQUIPME	 	F9111	 	THALES AVIONICS	 	87292325V06	 		 		 	VL2062006163	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 21	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
262	 	6HL	 	VALVE-SAFETY	 	C0002	 	NORD-MICRO AG & CO. O	 	9024-15704-03	 		 		 	10115634	
262	 	7HL	 		 		 		 		 		 		 	10115630	
210	 	2OHL	 	SELECTOR-LDG FIELD	 	C0002	 	NORD-MICRO AG & CO. O	 	9027-20010	 		 		 	1040518	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	4	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 22	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
127	 	1CC1	 	FAC-FLIGHT AUGMENTATI	 	F9111	 	THALES AVIONICS	 	B397BAM0620	 		 		 	Q00140015045	
128	 	1CC2	 		 		 		 		 		 		 	Q00140015044	
210	 	2CA	 	FCU-FLIGHT CONTROL UN	 	F9111	 	THALES AVIONICS	 	C12850ACO3	 		 		 	C12850007485	
127	 	1CA1	 	FMGC-FLIGHT MANAGEMEN	 	F9111	 	THALES AVIONICS	 	C13043BA04	 		 		 	C13043034855	
128	 	1CA2	 		 		 		 		 		 		 	C13043034860	
210	 	3CA1	 	MCDU-MULTIPURPOSE CON	 	F9111	 	THALES AVIONICS	 	C19266DA01	 		 		 	C19266003920	
210	 	3CA2	 		 		 		 		 		 		 	C19266003918	
210	 	1CA1 SW4	 	SOFTWARE FMS MAG VAR	 	F9111	 	THALES AVIONICS	 	G1748AABO1	 		 		 	C13043034855	
210	 	1CA2 SW4	 		 		 		 		 		 		 	C13043034860	
210	 	1CA1 SW3	 	SOFTWARE-FMS	 	F9111	 	THALES AVIONICS	 	G2604AAE01	 		 		 	C13043034855	
210	 	1CA2 SW3	 		 		 		 		 		 		 	C13043034860	
210	 	1CA1 SW2	 	SOFTWARE-FMS PERFORMA	 	F9111	 	THALES AVIONICS	 	G2831AAB02	 		 		 	C13043034855	
210	 	1CA2 SW2	 		 		 		 		 		 		 	C13043034860	
210	 	1CA1 SW1	 	SOFTWARE - DISK-FM OP	 	F9111	 	THALES AVIONICS	 	G2881ABB01	 		 		 	C13043034855	
210	 	1CA2 SW1	 		 		 		 		 		 		 	C13043034860	
210	 	17CC	 	INDICATOR-RUDDER TRIM	 	F0214	 	ECE	 	196PN01Y02	 		 		 	2483	
210	 	9CC	 	SWITCH-CONTROL,RUDDER	 	F1688	 	GOODRICH ACTUATION SY	 	27-457	 		 		 	6339	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	5	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 23	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	2RN1	 	ACP-AUDIO CONTROL PAN	 	F6198	 	EADS AIRBUS SA	 	ACP2788AD01	 		 		 	2788-24599	
210	 	2RN2	 		 		 		 		 		 		 	2788-24601	
210	 	2RN3	 		 		 		 		 		 		 	2788-24600	
127	 	1RN	 	AMU-AUDIO MANAGEMENT	 	F6168	 	TEAM	 	AMU4031SA140204	 		 		 	4031-3722	
127	 	3RN	 	CONTROL BOX-SELCAL CO	 	F6168	 	TEAM	 	BC2065C	 		 		 	2065-6703	
210	 	1RG1	 	RMP- RADIO MANAGEMENT	 	F9111	 	THALES AVIONICS	 	C12848CA01	 		 		 	C12848048758	
210	 	1RG2	 		 		 		 		 		 		 	C12848048746	
210	 	1RG3	 		 		 		 		 		 		 	C12848048738	
210	 	130RH	 	HANDSET-COCKPIT	 	D9240	 	HOLMBERG U CO	 	N40-1B10100-101	 		 		 	230738	
221	 	330RH1	 	HANDSET-CABIN	 	D9240	 	HOLMBERG U CO	 	N40-1B20212-102	 		 		 	231132	
262	 	330RH11	 		 		 		 		 		 		 	231149	
261	 	330RH9	 		 		 		 		 		 		 	229270	
127	 	101RH	 	DIRECTOR-CIDS	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z014H000231B	 		 		 	014H00004433	
128	 	102RH	 		 		 		 		 		 		 	014H00004426	
231	 	200RH1	 	DEU-DECODER ENCODER U	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z033H0003112	 		 		 	033H00051572	
251	 	200RH11	 		 		 		 		 		 		 	033H00051568	
252	 	200RH12	 		 		 		 		 		 		 	033H00051573	
251	 	200RH13	 		 		 		 		 		 		 	033H00051571	
252	 	200RH14	 		 		 		 		 		 		 	033H00051569	
251	 	200RH15	 		 		 		 		 		 		 	033H00051567	
252	 	200RH16	 		 		 		 		 		 		 	033H00051563	
232	 	200RH2	 		 		 		 		 		 		 	033H00051564	
231	 	200RH3	 		 		 		 		 		 		 	033H00051565	
232	 	200RH4	 		 		 		 		 		 		 	033H00051566	
241	 	200RH7	 		 		 		 		 		 		 	033H00051570	
242	 	200RH8	 		 		 		 		 		 		 	033H00051562	
223	 	300RH1	 	DEU-DEODER ENCODER U	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z043H000351A	 		 		 	043H00015477	
263	 	300RH6	 		 		 		 		 		 		 	043H00015478	
263	 	300RH7	 		 		 		 		 		 		 	043H00015479	
263	 	300RH8	 		 		 		 		 		 		 	043H00015476	
221	 	115RH	 	CAM-CABIN ASSIGNMENT	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z054H003M070	 		 		 	054H00003391	
221	 	116RH	 	OBRM-ONBOARD REPLACEA	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z064H000032B	 		 		 	064H00002667	
261	 	126RH	 	AAP-ADDITIONAL ATTEND	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z120H054630B	 		 		 	120H05005192	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	6	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 23	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
221	 	120RH	 	FAP-FLIGHT ATTENDANT	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z133H052651C	 		 		 	133H05003077	
210	 	16RN	 	SWITCH-ROTARY	 	SJ328	 	IEC-ELECTRONIQUE	 	058-001-00	 		 		 	64970	
220	 	4RC1	 	ANTENNA-VHF	 	F6175	 	CHELTON ANTENNAS	 	2438-89-00	 		 		 	243889-5422	
152	 	4RC2	 		 		 		 		 		 		 	243889-5291	
250	 	4RC3	 		 		 		 		 		 		 	243889-5235	
261	 	4RE1	 	COUPLER-HF ANTENNA,DI	 	13499	 	ROCKWELL COLLINS INC.	 	822-0987-003	 		 		 	170284	
127	 	3RE1	 	TRANSCEIVER-HF	 	4V792	 	ROCKWELL COLLINS INC.	 	822-0990-003	 		 		 	180V2X	
127	 	1RC1	 	TRANSCEIVER-VHF	 	4V792	 	ROCKWELL COLLINS INC.	 	822-1287-120	 		 		 	3WDCN	
128	 	1RC2	 		 		 		 		 		 		 	33VMJ	
127	 	1RC3	 		 		 		 		 		 		 	3WDCL	
210	 	16RK	 	MICROPHONE ASSY-REMOT	 	1K1E6	 	L3 COMMUNICATIONS	 	93A055-66	 		 		 	000653840	
212	 	18RK	 	MODULE-PREAMPLIFIER	 	1K1E6	 	L3 COMMUNICATIONS	 	93A150-20	 		 		 	000656329	
312	 	1RK	 	CVR-COCKPIT VOICE REC	 	97896	 	HONEYWELL INTERNATION BAT EXP DAT:01JUL2016	 	980-6022-001	 		 		 	CVR120-13856	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	7	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 24	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
316	 	8XS	 	GENERATOR-APU	 	K4358	 	LUCAS AEROSPACE LTD	 	BA16501-01	 		 		 	SA-AP1297	
131	 	41XU1	 	TRANSFORMER-CURRENT	 	K4358	 	LUCAS AEROSPACE LTD	 	PC01502	 		 		 	15409	
132	 	41XU2	 		 		 		 		 		 		 	15410	
212	 	42XS	 	TRANSFJRMER-CURRENT	 	K4358	 	LUCAS AEROSPACE LTD	 	PC01801	 		 		 	31145	
212	 	51XU1	 		 		 		 		 		 		 	31256	
212	 	51XU2	 		 		 		 		 		 		 	31142	
125	 	1PE	 	TR-TRANSFORMER RECTIF	 	F1549	 	ARTUS	 	Y192	 		 		 	H05165	
126	 	1PU1	 		 		 		 		 		 		 	H05168	
124	 	1PU2	 		 		 		 		 		 		 	H05164	
122	 	24XG	 	GAPCU-GROUND AUXILIAR	 	99167	 	HAMILTON SUNDSTRAND C	 	1700667D	 		 		 	AADU004389	
210	 	3PV1	 	VOLTME ER-DC	 	F0214	 	ECE	 	206PN01	 		 		 	10021	
210	 	3PV2	 		 		 		 		 		 		 	10034	
126	 	2PB1	 	BATTERY	 	F6177	 	SAFT	 	2758	 		 		 	V02841	
126	 	2PB2	 		 		 		 		 		 		 	V02839	
126	 	1PB1	 	BCL-BATTERY CHARGE LI	 	F9111	 	THALES AVIONICS	 	35-0L5-1006-08	 		 		 	Q09305015044	
126	 	1PB2	 		 		 		 		 		 		 	Q09305015045	
126	 	3XB	 	INVERTER-STATIC	 	D1347	 	DIEHL AEROSPACE GMBH	 	4188-01	 		 		 	001134	
125	 	3XC	 	CONTACTOR-DOUBLE THRE	 	F0214	 	ECE	 	503CA04F2-02Y00	 		 		 	6544	
125	 	15XE	 		 		 		 		 		 		 	6531	
148	 	8XE	 	CSMG-CONSTANT SPEED M	 	K4413	 	EATON AEROSPACE,VICKE	 	520913	 		 		 	G1020614	
125	 	1XE	 	GCU-GENERATOR CONTROL	 	K4413	 	EATON AEROSPACE,VICKE	 	521100	 		 		 	G1020747	
212	 	3XS	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	558CA04A30Y00	 		 		 	21348	
212	 	9XU1	 		 		 		 		 		 		 	21357	
212	 	9XU2	 		 		 		 		 		 		 	21329	
212	 	11XU2	 		 		 		 		 		 		 	21355	
212	 	3XG	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	558CA04A40Y00	 		 		 	21272	
212	 	11XU1	 		 		 		 		 		 		 	21297	
212	 	27XN	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	564CA04A01Y00	 		 		 	32888	
212	 	12XX	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	564CA04A10Y00	 		 		 	32784	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	8	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 24	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
212	 	14XX	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	564CA04A10Y00	 		 		 	32785	
126	 	2XB	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	564CA04A21Y00	 		 		 	33049	
212	 	12XN	 	CONTACTOR-THREE POLE	 	F0214	 	ECE	 	564CA04F10Y00	 		 		 	6992	
212	 	14PU	 		 		 		 		 		 		 	6996	
212	 	10PN	 	CONTACTOR-SINGLE POLE	 	F0214	 	ECE	 	630CC04A0Y00	 		 		 	22641	
125	 	3PE	 	CONTACTOR-SINGLE POLE	 	F0214	 	ECE	 	630CC04A1Y00	 		 		 	22691	
212	 	3PX	 		 		 		 		 		 		 	22668	
125	 	8PH	 		 		 		 		 		 		 	22711	
212	 	8PN	 		 		 		 		 		 		 	22650	
125	 	4PC	 	CONTACTOR-SINGLE POLE	 	F0214	 	ECE	 	630CC04A2Y00	 		 		 	22524	
212	 	1PC1	 	CONTACTOR-SINGLE POLE	 	F0214	 	ECE	 	640CC04A2Y00	 		 		 	23804	
212	 	1PC2	 		 		 		 		 		 		 	23956	
212	 	5PU1	 		 		 		 		 		 		 	23769	
212	 	5PU2	 		 		 		 		 		 		 	23781	
126	 	6PB1	 		 		 		 		 		 		 	23913	
212	 	6PB2	 		 		 		 		 		 		 	23924	
212	 	20XX	 	MODULE-AC SVCE BUS CN	 	F0214	 	ECE	 	700GA01Y00	 		 		 	3322	
212	 	30XN2	 	MODULE-GEN 2 CNTOR	 	F0214	 	ECE	 	710GA01Y00	 		 		 	3345	
212	 	29XN	 	MODULE-APU EXT PWR CN	 	F0214	 	ECE	 	720GA01Y00	 		 		 	3325	
212	 	30XN1	 	MODULE-GEN 1 CNTOR	 	F0214	 	ECE	 	730GA01Y00	 		 		 	3330	
121	 	1XU1	 	GCU-GENERATOR CONTROL	 	99167	 	HAMILTON SUNDSTRAND C	 	767584K	 		 		 	AAAY008546	
121	 	1XU2	 		 		 		 		 		 		 	AAAY008561	
435	 	1XM	 	ADAPTEB-QAD	 	99167	 	HAMILTON SUNDSTRAND C	 	1767669B	 		 		 	3175	
445	 	1XM1	 		 		 		 		 		 		 	3174	
435	 	4000XU	 	IDG-INTEGRATED DRIVE	 	99167	 	HAMILTON SUNDSTRAND C	 	772292	 		 		 	AAJ4002226	
445	 	4000XU1	 		 		 		 		 		 		 	AAJ4002331	
212	 	13PN	 	MODULE4DC-BUS 1 CNTOR	 	F0214	 	ECE	 	950GC02Y00	 		 		 	3209	
212	 	14PN	 	MODULE DC-BUS 2 CNTOR	 	F0214	 	ECE	 	960GC02Y00	 		 		 	3207	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 25	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
831	 	7500MM	 	RAFT-SLIDE FWD	 	701671	 	AIR CRUISERS COMPANY	 	D30664-309	 		 		 	L0737	
	 		 	HST DAT: 01APR2010	 		 		 	MANUF DAT:01MAY2009	 		 		 		
841	 	7501MM	 		 		 		 		 		 		 	L25674	
	 		 	HST DAT: 01JAN2010	 		 		 	MANUF DAT:01APR2010	 		 		 		
832	 	7502MM	 	RAFT-SLIDE,AFT	 	70167	 	AIR CRUISERS COMPANY	 	D30665-309	 		 		 	L25562	
	 		 	HST DAT: 01JUL2009	 		 		 	MANUF DAT:01MAR2010	 		 		 		
842	 	7503MM	 		 		 		 		 		 		 	L25525	
	 		 	HST DA4:010CT2009	 		 		 	MANUF DAT:01MAR2010	 		 		 		
200	 	7504MM	 	SLIDE-OVERWING	 	70167	 	AIR CRUISERS COMPANY	 	D31865-111	 		 		 	A14053	
	 		 		 		 		 	MANUF DAT:01APR2010	 		 		 		
200	 	7505MM	 	SLIDE-OVERWING	 	70167	 	AIR CRUISERS COMPANY	 	D31865-112	 		 		 	A14060	
	 		 		 		 		 	MANUF DAT:01APR2010	 		 		 		
212	 	4MS	 	SEAT-FIRST OFFICER	 	F4643	 	EADS SOGERMA	 	TAAI3-03CE20-01	 		 		 	3549	
211	 	3MS	 	SEAT-CAPTAIN	 	F4643	 	EADS SOGERMA	 	TAAI3-03PE20-01	 		 		 	3550	
200	 	6132MM	 	SEAT-CABIN ATTENDANT	 	F0465	 	SICMA AERO SEAT STE I	 	WAO3CYU3YS11126	 		 		 	10T1925	
200	 	6103MM	 	SEAT-CABIN ATTENDANT	 	F0465	 	SICMA AERO SEAT STE I	 	WAO3DYU3YS11126	 		 		 	10T1926	
200	 	6101MM	 	SEAT-CABIN ATTENDANT	 	F0465	 	SICMA AERO SEAT STE I	 	WA25BYU3YS11126	 		 		 	10T1927	
200	 	6100MM	 	SEAT-CABIN ATTENDANT	 	F0465	 	SICMA AERO SEAT STE I	 	WA93BYU3YS11126	 		 		 	10T1928	
260	 	110MX	 	ELT-EMERGENCY LOCATOR	 	F6614	 	ELTA,DIVISION L/CD	 	01N65900	 		 		 	10253339	
	 		 		 		 	BAT EXP DAT:01JUN2015	 	MANUF DAT:01JUN2010	 		 		 		
200	 	7560MM	 	ELT-EMERGENCY LOCATOR	 	07217	 	HONEYWELL ASCA INC.	 	1153538-1	 		 		 	1153538-00154	
	 		 		 		 	BAT EXP DAT:01MAY2022	 	MANUF DAT:01JUN2010	 		 		 		
212	 	14MM	 	SEAT-3RD OCCUPANT	 	F0465	 	SICMA AERO SEAT STE I	 	16800-01-00	 		 		 	10T2235	
211	 	1MM	 	ROPE-EMERGENCY ESCAPE	 	F6101	 	AERAZUR SA ,GROUPE ZO	 	208724-0	 		 		 	9431	
212	 	2MM	 		 		 		 		 		 		 	9439	
211	 	13MM	 	SEAT-4TH OCCUPANT	 	F4643	 	EADS SOGERMA	 	2510154-01-00	 		 		 	3645	
260	 	112MX	 	ANTENNA-ELT	 	F6175	 	CHELTON ANTENNAS	 	2624-82	 		 		 	262482-7844	
200	 	7055MM	 	COFFEE MAKER	 	63367	 	BE AEROSPACE INCORPOR	 	416-0001-23	 		 		 	408964301	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 25	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
200	 	7055MM1	 	COFFEE MAKER	 	63367	 	BE AEROSPACE INCORPOR	 	416-0001-23	 		 		 	410792701	
200	 	6475MM	 	GALLEY 1	 	H1D67	 	DRIESSEN AEROSPACE SY	 	601203-101	 		 		 	018	
200	 	7518MM	 	KIT-SURVIVAL	 	70167	 	AIR CRUISERS COMPANY	 	60128-101	 		 		 	C7860	
	 		 		 		 		 	MANUF DAT:01MAY2010	 		 		 		
200	 	7518MM1	 		 		 		 		 		 		 	C7861	
	 		 		 		 		 	MANUF DAT:01MAY2010	 		 		 		
200	 	7518MM2	 		 		 		 		 		 		 	C7778	
	 		 		 		 		 	MANUF DAT:01MAY2010	 		 		 		
200	 	7518MM3	 		 		 		 		 		 		 	C7777	
	 		 		 		 		 	MANUF DAT:01MAY2010	 		 		 		
150	 	7506MM	 	RESERVOIR ASSY	 	70167	 	AIR CRUISERS COMPANY	 	60592-201	 		 		 	A13020	
	 		 	HST DAT:01APR2010	 		 		 	MANUF DAT:01MAR2009	 		 		 		
150	 	7507MM	 		 		 		 		 		 		 	A13888	
	 		 	HST DAT:01NOV2009	 		 		 	MANUF DAT:01MAY2010	 		 		 		

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 26	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
221	 	7910MM	 	EXTINGUISHER-FIRE	 	U3061	 	FIRE FIGHTING ENTERPR	 	BA24320A1	 		 		 	46815	
	 		 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01MAY2010	 	MANUF DAT:01MAY2010	 		 		 		
261	 	7913MM	 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01MAY2010	 	MANUF DAT:01MAY2010	 		 		 	46816	
261	 	7915MM	 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01MAY2010	 	MANUF DAT:01MAY2010	 		 		 	46743	
128	 	1WA	 	DETECTOR-SMOKE	 	F4885	 	SIEMENS SAS	 	CGDU2000-00	 		 		 	12029	
131	 	1WH	 	DETECTOR-SMOKE	 	F4885	 	SIEMENS SAS	 	PPC1100-00	 		 		 	14404	
132	 	2WH	 		 		 		 		 		 		 	14705	
151	 	3WH	 		 		 		 		 		 		 	14653	
152	 	4WH	 		 		 		 		 		 		 	14672	
161	 	5WH	 		 		 		 		 		 		 	14302	
162	 	6WH	 		 		 		 		 		 		 	14648	
221	 	1WQ	 	DETECTOR-SMOKE	 	F4885	 	SIEMENS SAS	 	PPC1200-00	 		 		 	50310	
261	 	6WQ	 		 		 		 		 		 		 	50320	
262	 	13WQ	 		 		 		 		 		 		 	50361	
415	 	3WD1	 	DETECTOR ASSY-FIRE,PY	 	F9211	 	L HOTELLIER,LOUIS	 	12134-00	 		 		 	YL5510	
425	 	3WD2	 		 		 		 		 		 		 	YL5511	
415	 	4WD1	 		 		 		 		 		 		 	YL5458	
425	 	4WD2	 		 		 		 		 		 		 	YL5502	
212	 	200WM	 	EXTINGUISHER-FIRE	 	F1536	 	SICLI	 	1708337B4	 		 		 	0947029	
	 		 	HST DAT:01DEC2009	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:O1DEC2009	 		 		 		
130	 	4016WX	 	CARTRIDGE	 	05167	 	PACIFIC SCIENTIFIC CO	 	30900000M	 		 		 	0010LE	
130	 	4018WX	 		 		 		 	MANUF DAT:01JUN2010	 		 		 		
	 		 		 		 		 	MANUF DAT:01JUN2010	 		 		 	0057LE	
313	 	12WF	 	CARTRIDGE	 	05167	 	PACIFIC SCIENTIFIC C0	 	30903827	 		 		 		
	 		 		 		 		 	MANUF DAT:01FEV2010	 		 		 	1612KL	
415	 	5WE1	 	CARTRIDGE	 	05167	 	PACIFIC SCIENTIFIC CO	 	30903886	 		 		 	2014LD	
	 		 		 		 		 	MANUF DAT:01JUN2010	 		 		 		
425	 	5WE2	 		 		 		 		 		 		 	2019LD	
	 		 		 		 		 	MANUF DAT:01JUN2010	 		 		 		
415	 	7WE1	 		 		 		 		 		 		 	1623LE	
	 		 		 		 		 	MANUF DAT:01JUN2010	 		 		 		
425	 	7WE2	 		 		 		 		 		 		 	1010LD	
	 		 		 		 		 	MANUF DAT:01MAY2010	 		 		 		

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 26	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	WD	 	FIRE PANEL-ENGINE APU	 	F0214	 	ECE	 	335TS08Y01	 		 		 	2363	
313	 	11WF	 	EXTINGUISHER-FIRE,APU	 	05167	 	PACIFIC SCIENTIFIC CO	 	33600005-3	 		 		 	69169D1	
	 		 	HST DAT:01MAR2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAR2010	 		 		 		
415	 	6WE1	 	BOTTLE-FIRE EXTINGUIS	 	05167	 	PACIFIC SCIENTIFIC CO	 	34100005-1	 		 		 	70409D1	
	 		 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		
425	 	6WE2	 		 		 		 		 		 		 	70412D1	
	 		 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		
415	 	8WE1	 		 		 		 		 		 		 	70410D1	
	 		 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		
425	 	8WE2	 		 		 		 		 		 		 	70269D1	
	 		 	HST DAT:01MAY2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		
150	 	4015WX	 	EXTINGUISHER-FIRE	 	05167	 	PACIFIC SCIENTIFIC CO	 	34600017	 		 		 	33875F1	
	 		 	HST DAT:01JUN2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01JUN2010	 		 		 		
126	 	2WD1	 	FDU-FIRE DETECTION UN	 	F9211	 	L HOTELLIER,LOUIS	 	3721-00	 		 		 	ZM1918	
126	 	2WD2	 		 		 		 		 		 		 	ZM1914	
126	 	13WG	 		 		 		 		 		 		 	ZM1921	
316	 	21WG	 	DETECTOR ASSY-OVERHEA	 	25693	 	MEGGITT SAFETY SYSTEM	 	4550-01	 		 		 	13160	
316	 	22WG	 		 		 		 		 		 		 	13173	
200	 	7520MM	 	EXTINGUISHER-FIRE	 	D0243	 	TOTAL WALTHER FEUERSC	 	74-20	 		 		 	23259	
	 		 		 		 	WEIGHT DAT:01JUL2010	 		 		 		 		
200	 	7521MM	 	HST DAT:01MAR2010	 		 		 	MANUF DAT:01MAY2010	 		 		 	23249	
	 		 	HST DAT:01MAR2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		
200	 	7522MM	 		 		 		 		 		 		 	23287	
	 		 	HST DAT :01MAR2010	 		 	WEIGHT DAT:01JUL2010	 	MANUF DAT:01MAY2010	 		 		 		

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	13	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
127	 	1CE1	 	SEC-SPOILER ELEVATOR	 	F9111	 	THALES AVIONICS	 	B372BAM0511	 		 		 	Q00136019085	
128	 	1CE2	 		 		 		 		 		 		 	Q00136019041	
121	 	1CE3	 		 		 		 		 		 		 	Q00136019061	
325	 	4CC	 	TLU-TRAVEL LIMITATION	 	F1549	 	ARTUS	 	DV8456701-5	 		 		 	4871	
121	 	103CM	 	REGULATOR-CABLE TENSI	 	F0221	 	RATIER-FIGEAC	 	FE171-000	 		 		 	FR5543	
131	 	12CE1	 	ACCELEROMETER UNIT-VE	 	F9111	 	THALES AVIONICS	 	J172ABM01	 		 		 	J172AB025544	
132	 	12CE2	 		 		 		 		 		 		 	J172AB025350	
131	 	12CE3	 		 		 		 		 		 		 	J172AB025343	
132	 	12CE4	 		 		 		 		 		 		 	J172AB025360	
325	 	3CC1	 	SERVO ACTUATOR	 	F1688	 	GOODRICH ACTUATION SY	 	SC4700-5	 		 		 	9471	
325	 	3CC2	 		 		 		 		 		 		 	9517	
127	 	3CE1	 	FCDC-FLIGHT CONTROL D	 	D4856	 	LITEF LITTON TECHNISC	 	115370-1519	 		 		 	4464	
128	 	3CE2	 		 		 		 		 		 		 	4468	
575	 	33CE1	 	SERVOCQNTROL-AILERON	 	FA3T1	 	GOODRICH ACTUATION SY	 	31073-110	 		 		 	18259	
675	 	33CE2	 		 		 		 		 		 		 	18277	
575	 	33CE3	 		 		 		 		 		 		 	18296	
675	 	33CE4	 		 		 		 		 		 		 	18313	
345	 	34CE1	 	SERVOCONTROL-ELEVATOR	 	FA3T1	 	GOODRICH ACTUATION SY	 	31075-440	 		 		 	18264	
335	 	34CE2	 		 		 		 		 		 		 	18239	
345	 	34CE3	 		 		 		 		 		 		 	18257	
335	 	34CE4	 		 		 		 		 		 		 	18258	
574	 	31CE1	 	SERVOCONTROL-SPOILER,	 	FA3T1	 	GOODRICH ACTUATION SY	 	31077-111	 		 		 	43503	
685	 	31CE10	 		 		 		 		 		 		 	43675	
674	 	31CE2	 		 		 		 		 		 		 	43536	
582	 	31CE3	 		 		 		 		 		 		 	43584	
682	 	31CE4	 		 		 		 		 		 		 	43599	
583	 	31CE5	 		 		 		 		 		 		 	43621	
683	 	31CE6	 		 		 		 		 		 		 	43633	
584	 	31CE7	 		 		 		 		 		 		 	43665	
684	 	31CE8	 		 		 		 		 		 		 	43673	
585	 	31CE9	 		 		 		 		 		 		 	43672	
211	 	4CE1	 	SSTU-SIDE STICK TRANS	 	F0222	 	SARMA	 	321000M03	 		 		 	AH24261	
212	 	4CE2	 		 		 		 		 		 		 	AH24237	
211	 	4CE3	 		 		 		 		 		 		 	AH24229	
212	 	4CE4	 		 		 		 		 		 		 	AH24244	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	14	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	7CE	 	TRANSDUCER UNIT-SPEED	 	F0222	 	SARMA	 	321200M02	 		 		 	AK07123	
325	 	2CC	 	TRANSDUCER UNIT	 	F0222	 	SARMA	 	322000M02	 		 		 	9066	
325	 	42WV	 		 		 		 		 		 		 	9214	
121	 	74CE	 	FTU-FORCE TRANSDUCER	 	F0222	 	SARMA	 	327000-102M01	 		 		 	AN02327	
121	 	25CE1	 	TRANSDUCER UNIT	 	F0222	 	SARMA	 	342300M01	 		 		 	25266	
122	 	25CE2	 		 		 		 		 		 		 	25265	
345	 	49CE1	 		 		 		 		 		 		 	25180	
335	 	49CE2	 		 		 		 		 		 		 	24975	
127	 	2CE1	 	ELAC-ELEVATOR AILERON	 	F9111	 	THALES AVIONICS	 	3945129100	 		 		 	ELACVB020421	
128	 	2CE2	 		 		 		 		 		 		 	ELACVB020408	
211	 	2CE1 SW1	 	SOFTWARE-ELAC1 OPERAT	 	F9111	 	THALES AVIONICS	 	3945129103	 		 		 	ELACVB020421	
211	 	2CE2 SW1	 		 		 		 		 		 		 	ELACVB020408	
311	 	9CE	 	ACTUATOR-THS	 	FA3T1	 	GOODRICH ACTUATION SY	 	47145-167	 		 		 	4554	
120	 	21CV	 	SFCC-SLAT AND FLAP,CO	 	D9893	 	LIEBHERR-AEROSPACE LI	 	49-170-11	 		 		 	49-170BA09902	
120	 	22CV	 		 		 		 		 		 		 	49-170BA09899	
522	 	6048CM	 	ADAPTER ASSY-PPU	 	D9893	 	LIEBHERR-AEROSPACE LI	 	521E0200-01	 		 		 	0521B02LI013446	
622	 	6098CM	 		 		 		 		 		 		 	0521B02LI013494	
127	 	43CE	 	PSDU-POWER SUPPLY DEC	 	F0214	 	ECE	 	530AL01CN	 		 		 	16456	
127	 	45CE	 		 		 		 		 		 		 	16449	
325	 	10CC	 	ACTUATOR-RUDDER TRIM	 	F0396	 	AVIAC ETS SA.	 	6137-5	 		 		 	613705341	
220	 	51CV	 	CSU-COMMAND SENSOR UN	 	D9893	 	LIEBHERR-AEROSPACE LI	 	780B0000-01	 		 		 	0780B00LI005675	
147	 	6001CM	 	CONTROL UNIT-POWER	 	D9893	 	LIEBHERR-AEROSPACE LI	 	786A0000-12	 		 		 	0786A00LI009091	
147	 	6201CM	 		 		 		 		 		 		 	0786A00LI009103	
147	 	6203CM	 	GEARBOX-RIGHT ANGLE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	788A0000-02	 		 		 	788A000GA054093	
148	 	6253CM	 		 		 		 		 		 		 	788A000GA054094	
574	 	6209CM	 	GEARBOX-LINE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	789A0000-02	 		 		 	789A000GA054139	
674	 	6259CM	 		 		 		 		 		 		 	789A000GA054144	
191	 	6003CM	 	GEARBOX-19 DEGREE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	790A0000-02	 		 		 	790A000GA056148	
575	 	6217CM	 		 		 		 		 		 		 	790A000GA056179	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	15	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
675	 	6267CM	 	GEARBOX-19 DEGREE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	790A0000-02	 		 		 	790A000GA056198	
148	 	6205CM	 	ACTUATOR-FLAP.NO. 1	 	D9893	 	LIEBHERR-AEROSPACE LI	 	791C0000-02	 		 		 	791C000GA057186	
148	 	6255CM	 		 		 		 		 		 		 	791C000GA057187	
674	 	6211CM	 	ACTUATOR-FLAP NO. 2	 	D9893	 	LIEBHERR-AEROSPACE LI	 	792D0000-02	 		 		 	792D000GA057322	
674	 	6261CM	 		 		 		 		 		 		 	792D000GA057352	
574	 	6221CM	 	ACTUATOR-FLAP NO. 3	 	D9893	 	LIEBHERR-AEROSPACE LI	 	793C0000-02	 		 		 	793C000GA057287	
574	 	6271CM	 		 		 		 		 		 		 	793C000GA057360	
575	 	6233CM	 	ACTUATOR-FLAP NO. 4	 	D9893	 	LIEBHERR-AEROSPACE LI	 	794C0000-02	 		 		 	794C000GA057355	
575	 	6283CM	 		 		 		 		 		 		 	794C000GA057360	
572	 	6206CM	 	SHAFT-DRIVE AND PLUNG	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801A0200-01	 		 		 	801A020GA054184	
672	 	6256CM	 		 		 		 		 		 		 	801A020GA054183	
572	 	6208CM	 	SHAFT-DRIVE AND PLUNG	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801A0300-01	 		 		 	801A030GA054184	
672	 	6258CM	 		 		 		 		 		 		 	801A030GA054183	
574	 	6210CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801A0800-01	 		 		 	801A080GA054127	
674	 	6260CM	 		 		 		 		 		 		 	801A080GA054131	
574	 	6212CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801A1500-01	 		 		 	801A150GA054129	
674	 	6262CM	 		 		 		 		 		 		 	801A150GA054130	
574	 	6214CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B0400-01	 		 		 	801B040GA054130	
674	 	6264CM	 		 		 		 		 		 		 	801B040GA054129	
575	 	6220CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B0500-01	 		 		 	801B050GA054127	
675	 	6270CM	 		 		 		 		 		 		 	801B050GA054131	
575	 	6222CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B0600-01	 		 		 	801B060GA054127	
675	 	6272CM	 		 		 		 		 		 		 	801B060GA054131	
575	 	6218CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B0700-01	 		 		 	801B070GA054128	
675	 	6268CM	 		 		 		 		 		 		 	801B070GA054131	
575	 	6226CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B1200-01	 		 		 	801B120GA054132	
675	 	6276CM	 		 		 		 		 		 		 	801B120GA054128	
575	 	6232CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B1300-01	 		 		 	801B130GA054127	
675	 	6282CM	 		 		 		 		 		 		 	801B130GA054131	
575	 	6228CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B1600-01	 		 		 	801B160GA054131	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	16	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
675	 	6278CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B1600-01	 		 		 	801B160GA054127	
147	 	6204CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B4400-01	 		 		 	801B440GA054184	
148	 	6254CM	 		 		 		 		 		 		 	801B440GA054183	
147	 	6202CM	 	SHAFT ASSY-FLAP DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B4600-02	 		 		 	801B460GA054074	
147	 	6252CM	 		 		 		 		 		 		 	801B460GA054073	
575	 	6224CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B4700-01	 		 		 	801B470GA054129	
675	 	6274CM	 		 		 		 		 		 		 	801B470GA054130	
575	 	6230CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801B4800-01	 		 		 	801B480GA054130	
675	 	6280CM	 		 		 		 		 		 		 	801B480GA054129	
574	 	6216CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801C1400-01	 		 		 	801C140GA054128	
674	 	6266CM	 		 		 		 		 		 		 	801C140GA054131	
192	 	6007CM	 	BEARING ASSY-STEADY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801C1700-02	 		 		 	AH4637	
521	 	6017CM	 		 		 		 		 		 		 	AH4944	
521	 	6019CM	 		 		 		 		 		 		 	AH5043	
521	 	6023CM	 		 		 		 		 		 		 	AH5051	
522	 	6031CM	 		 		 		 		 		 		 	AH5039	
192	 	6057CM	 		 		 		 		 		 		 	AH4638	
621	 	6067CM	 		 		 		 		 		 		 	AH5063	
621	 	6069CM	 		 		 		 		 		 		 	AH4879	
621	 	6073CM	 		 		 		 		 		 		 	AH4889	
622	 	6081CM	 		 		 		 		 		 		 	AH4881	
574	 	6215CM	 		 		 		 		 		 		 	AH5074	
575	 	6219CM	 		 		 		 		 		 		 	AH5048	
575	 	6223CM	 		 		 		 		 		 		 	AH5070	
575	 	6225CM	 		 		 		 		 		 		 	AH5065	
575	 	6229CM	 		 		 		 		 		 		 	AH5067	
575	 	6231CM	 		 		 		 		 		 		 	AH5068	
674	 	6265CM	 		 		 		 		 		 		 	AH5071	
675	 	6269CM	 		 		 		 		 		 		 	AH5098	
675	 	6273CM	 		 		 		 		 		 		 	AH5057	
675	 	6275CM	 		 		 		 		 		 		 	AH5066	
675	 	6279CM	 		 		 		 		 		 		 	AH5061	
675	 	6281CM	 		 		 		 		 		 		 	AH5072	
572	 	6207CM	 	BEARING-STEADY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	801C1900-02	 		 		 	AH1770	
574	 	6213CM	 		 		 		 		 		 		 	AH1677	
672	 	6257CM	 		 		 		 		 		 		 	AH1769	
674	 	6263CM	 		 		 		 		 		 		 	AH1678	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	17	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
325	 	1025GM	 	SERVOCONTROL-RUDDER	 	D9893	 	LIEBHERR-AEROSPACE LI	 	810A0000-05	 		 		 	15071	
325	 	2025GM	 		 		 		 		 		 		 	15040	
325	 	3025GM	 		 		 		 		 		 		 	15042	
191	 	6005CM	 	GEARBOX-T	 	D9893	 	LIEBHERR-AEROSPACE LI	 	827A0000-02	 		 		 	827A000GA052073	
191	 	6009CM	 	GEARBOX-BEVEL	 	D9893	 	LIEBHERR-AEROSPACE LI	 	828A0000-02	 		 		 	828A000GA058174	
191	 	6011CM	 		 		 		 		 		 		 	828A000GA058173	
192	 	6059CM	 		 		 		 		 		 		 	828A000GA058175	
192	 	6061CM	 		 		 		 		 		 		 	828A000GA058176	
521	 	6013CM	 	ACTUATOR-SLAT A	 	D9893	 	LIEBHERR-AEROSPACE LI	 	829C0000-01	 		 		 	0830C00LI072644	
521	 	6015CM	 		 		 		 		 		 		 	0830C00LI072646	
621	 	6063CM	 		 		 		 		 		 		 	0829C00LI018638	
621	 	6065CM	 		 		 		 		 		 		 	0829C00LI018636	
522	 	6027CM	 	ACTUATOR-SLAT B	 	D9893	 	LIEBHERR-AEROSPACE LI	 	830C0000-01	 		 		 	0830C00LI072643	
522	 	6029CM	 		 		 		 		 		 		 	0830C00LI072645	
522	 	6033CM	 		 		 		 		 		 		 	0830C00LI072407	
522	 	6035CM	 		 		 		 		 		 		 	0830C00LI072408	
522	 	6037CM	 		 		 		 		 		 		 	0830C00LI072410	
522	 	6039CM	 		 		 		 		 		 		 	0830C00LI072409	
522	 	6041CM	 		 		 		 		 		 		 	0829C00LI018614	
522	 	6045CM	 		 		 		 		 		 		 	0829C00LI018612	
622	 	6077CM	 		 		 		 		 		 		 	0830C00LI072448	
622	 	6079CM	 		 		 		 		 		 		 	0830C00LI072450	
622	 	6083CM	 		 		 		 		 		 		 	0830C00LI072449	
622	 	6085CM	 		 		 		 		 		 		 	0830C00LI072447	
622	 	6087CM	 		 		 		 		 		 		 	0830C00LI072437	
622	 	6089CM	 		 		 		 		 		 		 	0830C00LI072438	
622	 	6091CM	 		 		 		 		 		 		 	0830C00LI072435	
622	 	6095CM	 		 		 		 		 		 		 	0830C00LI072436	
575	 	33CV	 	BRAKE-WING TIP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	831C0000-01	 		 		 	0831C00LI018811	
675	 	34CV	 		 		 		 		 		 		 	0831C00LI018823	
575	 	35CV	 		 		 		 		 		 		 	0831C00LI018812	
675	 	36CV	 		 		 		 		 		 		 	0831C00LI018824	
521	 	6012CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A0600-01	 		 		 	833A060GA054184	
621	 	6062CM	 		 		 		 		 		 		 	833A060GA054183	
522	 	6034CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A0700-01	 		 		 	833A070GA054109	
622	 	6084CM	 		 		 		 		 		 		 	833A070GA054128	
522	 	6044CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1400-01	 		 		 	833A140GA054117	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	18	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
622	 	6094CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1400-01	 		 		 	833A140GA054130	
522	 	6042CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1500-01	 		 		 	833A150GA054127	
622	 	6092CM	 		 		 		 		 		 		 	833A150GA054104	
522	 	6040CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1600-01	 		 		 	833A160GA054110	
622	 	6090CM	 		 		 		 		 		 		 	833A160GA054127	
522	 	6038CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1700-01	 		 		 	833A170GA054110	
622	 	6088CM	 		 		 		 		 		 		 	833A170GA054128	
522	 	6036CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1800-01	 		 		 	833B030GA054127	
622	 	6086CM	 		 		 		 		 		 		 	833A180GA054128	
522	 	6028CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A1900-01	 		 		 	833A190GA054128	
622	 	6078CM	 		 		 		 		 		 		 	833A190GA054126	
521	 	6014CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A2000-01	 		 		 	833A200GA054128	
621	 	6064CM	 		 		 		 		 		 		 	833A200GA054104	
191	 	6010CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A2100-01	 		 		 	833A210GA054891	
191	 	6060CM	 		 		 		 		 		 		 	833A210GA054892	
522	 	6046CM	 	SHAFT ASSY-APPU	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833A2400-02	 		 		 	AH1334	
622	 	6096CM	 		 		 		 		 		 		 	AH1345	
521	 	6018CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0100-01	 		 		 	833B010GA054128	
621	 	6068CM	 		 		 		 		 		 		 	833B010GA054105	
521	 	6022CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0200-01	 		 		 	833B020GA054118	
621	 	6072CM	 		 		 		 		 		 		 	833B020GA054129	
521	 	6024CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0300-01	 		 		 	833A180GA054109	
621	 	6074CM	 		 		 		 		 		 		 	833B030GA054104	
521	 	6020CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0400-01	 		 		 	833B040GA054117	
621	 	6070CM	 		 		 		 		 		 		 	833B040GA054129	
191	 	6002CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0500-01	 		 		 	833B050GA052037	
522	 	6032CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B0800-01	 		 		 	833B080GA054118	
622	 	6082CM	 		 		 		 		 		 		 	833B080GA054130	
191	 	6006CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B1000-01	 		 		 	833B100GA054073	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	19	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 27	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
191	 	6056CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B1000-01	 		 		 	833B100GA054074	
521	 	6016CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B1100-01	 		 		 	833B110GA054118	
621	 	6066CM	 		 		 		 		 		 		 	833B110GA054129	
191	 	6004CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833B2200-01	 		 		 	833B220GA052037	
191	 	6008CM	 	SHAFT ASSY-SLAT DRIVE	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833C0900-01	 		 		 	833C090GA054073	
191	 	6058CM	 		 		 		 		 		 		 	833C090GA054074	
522	 	6026CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833C1200-01	 		 		 	833C120GA054117	
622	 	6076CM	 		 		 		 		 		 		 	833C120GA054130	
522	 	6030CM	 	SHAFT ASSY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833C1300-01	 		 		 	833C130GA054128	
622	 	6080CM	 		 		 		 		 		 		 	833C130GA054103	
522	 	6025CM	 	BEARING ASSY-STEADY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833C2300-02	 		 		 	AH1348	
622	 	6075CM	 		 		 		 		 		 		 	AH1334	
521	 	6021CM	 	BEARING ASSY-STEADY	 	D9893	 	LIEBHERR-AEROSPACE LI	 	833C5200-02	 		 		 	AH1349	
621	 	6071CM	 		 		 		 		 		 		 	AH1335	
575	 	29CV	 	PPU-POSITION PICK-OFF	 	D9893	 	LIEBHERR-AEROSPACE LI	 	9028A0004-01	 		 		 	9028A00TY036354	
675	 	30CV	 		 		 		 		 		 		 	9028A00TY036396	
522	 	31CV	 		 		 		 		 		 		 	9028A00TY036408	
622	 	32CV	 		 		 		 		 		 		 	9028A00TY036333	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	20	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 28	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
141	 	3QF	 	ACTUATOR ASSY	 	C34061	 	SITEC AEROSPACE GMBH	 	A08000	 		 		 	4942	
141	 	4QC	 	PUMP-FUEL	 	FA3TO	 	TRW SYSTEMES AERONAUT	 	Cl2CB0013	 		 		 	4877	
141	 	9QM	 	CANISTER-PUMP	 	FA3TO	 	TRW SYSTEMES AERONAUT	 	C49AA0222	 		 		 	4607	
141	 	7QC	 	SWITCH-PRESSURE	 	K2523	 	EATON AEROSPACE LIMIT	 	FRH100013A	 		 		 	Q10100152	
315	 	5030QM	 	SWITCH-PRESSURE	 	K2523	 	EATON AEROSPACE LIMIT	 	FRH100014A	 		 		 	Q36090139	
540	 	86QM	 	VALVE-AIR RELEASE	 	K2523	 	EATON AEROSPACE LIMIT	 	FRH280002	 		 		 	21101314	
640	 	87QM	 		 		 		 		 		 		 	21101319	
190	 	7509VC B	 	ADAPTOR	 	F1983	 	CONNECTEURS ELECTRIQU	 	F251626WPSN923A	 		 		 	4599	
190	 	7512VC B	 	ADAPTOR	 	F1983	 	CONNECTEURS ELECTRIQU	 	F251626ZPSY923B	 		 		 	4872	
574	 	4041VC A	 	PLUG	 	F1983	 	CONNECTEURS ELECTRIQU	 	F561626PZ953F	 		 		 	11863	
674	 	4042VC A	 		 		 		 		 		 		 	11593	
574	 	4043VC A	 		 		 		 		 		 		 	11653	
674	 	4044VC A	 		 		 		 		 		 		 	11595	
148	 	5QE	 	ACTUATOR-TWIN MOTOR	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE190001-2	 		 		 	20101380	
520	 	9QG	 		 		 		 		 		 		 	19101730	
620	 	10QG	 		 		 		 		 		 		 	20101379	
520	 	9QP	 	ACTUATOR-VALVE, SINGLE	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE200002-1	 		 		 	19101257	
620	 	10QP	 		 		 		 		 		 		 	19100914	
570	 	11QP	 		 		 		 		 		 		 	19100916	
148	 	11QU	 		 		 		 		 		 		 	20101433	
670	 	12QP	 		 		 		 		 		 		 	13101287	
540	 	161QM	 	VALVE-AIR INLET	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE310021-1	 		 		 	20100845	
640	 	162QM	 		 		 		 		 		 		 	21100500	
540	 	124QM	 	VALVE-PRESSURE HOLDIN	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE420044	 		 		 	18100613	
640	 	125QM	 		 		 		 		 		 		 	18100611	
540	 	27QM	 	VALVE-TRANSFER	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900087-001	 		 		 	17101159	
540	 	28QM	 		 		 		 		 		 		 	17101160	
640	 	29QM	 		 		 		 		 		 		 	20100898	
640	 	30QM	 		 		 		 		 		 		 	20100899	
540	 	71QM	 	SHAFT-DRIVE, TRANSFER	 	K2523I	 	EATON AEROSPACE LIMIT	 	HTE900095	 		 		 	C10153	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	21	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 28	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
640	 	73QM	 	SHAFT-DRIVE,TRANSFER	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900095	 		 		 	C10152	
540	 	70QM	 	SHAFT-DRIVE,TRANSFER	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900096	 		 		 	C10125	
640	 	72QM	 		 		 		 		 		 		 	C10126	
520	 	12QM	 	VALVE-LOW PRESSURE,FU	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900118-001	 		 		 	18100270	
620	 	13QM	 		 		 		 		 		 		 	18100278	
148	 	11QM	 	VALVE-FUEL,DEFUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900133	 		 		 	09100259	
148	 	10QM	 	VALVE-FUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE900135	 		 		 	05101685	
195	 	500QM	 	MONITOR-LEAK	 	F0553	 	INTERTECHNIQUE	 	L83A13-617	 		 		 	E55747	
550	 	46QM	 	PROTECTOR-TANK,OVERPR	 	F0422	 	INTERTECHNIQUE SA	 	L95F100-603	 		 		 	E53361	
650	 	47QM	 		 		 		 		 		 		 	E53360	
141	 	96QM	 	PROTECTOR-OVERPRESSUR	 	F0422	 	INTERTECHNIQUE SA	 	L95F50-603	 		 		 	E58456	
540	 	102QM	 		 		 		 		 		 		 	E52376	
640	 	103QM	 		 		 		 		 		 		 	E52379	
122	 	3QT	 	COMPUTER-FUEL QUANTIT	 	K5294	 	SMITH INDUSTRIES AVIA	 	SIC5059-14-20	 		 		 	AS4153	
540	 	21QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU01	 		 		 	FR1023103	
640	 	21QT2	 		 		 		 		 		 		 	FR1015101	
540	 	23QT1	 	PROBE-PUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU03	 		 		 	FR1009902	
640	 	23QT2	 		 		 		 		 		 		 	FR1009903	
540	 	24QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU04	 		 		 	FR1009905	
640	 	24QT2	 		 		 		 		 		 		 	FR1009904	
540	 	25QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU05	 		 		 	FR1009906	
640	 	25QT2	 		 		 		 		 		 		 	FR1009907	
540	 	26QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU06	 		 		 	FR1009908	
640	 	26QT2	 		 		 		 		 		 		 	FR1009909	
540	 	27QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU07	 		 		 	FR1009911	
640	 	27QT2	 		 		 		 		 		 		 	FR1009910	
540	 	28QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU08	 		 		 	FR1009912	
640	 	28QT2	 		 		 		 		 		 		 	FR1009913	
540	 	29QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU09	 		 		 	FR1009914	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	22	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 28	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
640	 	29QT2	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU09	 		 		 	FR1009915	
540	 	30QT1	 		 		 		 		 		 		 	FR1009916	
640	 	30QT2	 		 		 		 		 		 		 	FR1009917	
540	 	31QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU10	 		 		 	FR1009918	
640	 	31QT2	 		 		 		 		 		 		 	FR1009919	
540	 	32QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU11	 		 		 	FR1009921	
640	 	32QT2	 		 		 		 		 		 		 	FR1009920	
540	 	34QT1	 	PROBE-FUEL QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU13	 		 		 	FR1009922	
640	 	34QT2	 		 		 		 		 		 		 	FR1009923	
141	 	35QT	 	PROBE-FQI,CENTRE TANK	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU14	 		 		 	FR0970302	
142	 	36QT	 		 		 		 		 		 		 	FR0970301	
141	 	37QT	 		 		 		 		 		 		 	FR0970303	
142	 	38QT	 		 		 		 		 		 		 	FR0970304	
141	 	39QT	 	PROBE-FQI,CENTRE TANK	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU15	 		 		 	FR0966005	
540	 	22QT1	 	PROBE-FUEL,QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU16	 		 		 	FR1033710	
640	 	22QT2	 		 		 		 		 		 		 	FR1033708	
540	 	33QT1	 	PROBE-FUEL,QUANTITY,N	 	K5294	 	SMITH INDUSTRIES AVIA	 	0212KTU17	 		 		 	FR1009924	
640	 	33QT2	 		 		 		 		 		 		 	FR1009925	
520	 	7QU	 	VALVE-REFUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	1158000-21	 		 		 	19100967	
620	 	8QU	 		 		 		 		 		 		 	19101353	
148	 	10QU	 		 		 		 		 		 		 	15100772	
192	 	6QT	 	INDICATOR-FUEL,QUANTI	 	K5294	 	SMITH INDUSTRIES AVIA	 	1407KID02-03	 		 		 	AS4145	
141	 	14QM	 	VALVE-APU FUEL	 	C3406	 	SITEC AEROSPACE GMBH	 	20700-300	 		 		 	4589	
121	 	7QJ	 	CONTROL UNIT-LEVEL,SE	 	89305	 	SIMMONDS PRECISION PR	 	30042-0000-0501	 		 		 	9587	
122	 	9QJ	 		 		 		 		 		 		 	9588	
540	 	15QJ1	 	SENSOR-LEVEL FLSS	 	89305	 	SIMMONDS PRECISION PR	 	3530000-1	 		 		 	02101104	
640	 	15QJ2	 		 		 		 		 		 		 	02101115	
540	 	16QJ1	 		 		 		 		 		 		 	02101103	
640	 	16QJ2	 		 		 		 		 		 		 	02101116	
540	 	17QJ1	 		 		 		 		 		 		 	02101099	
640	 	17QJ2	 		 		 		 		 		 		 	02100483	
141	 	20QJ	 		 		 		 		 		 		 	11090906	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	23	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 28	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
141	 	21QJ	 	SENSOR-LEVEL FLSS	 	89305	 	SIMMONDS PRECISION PR	 	3530000-1	 		 		 	11090907	
142	 	22QJ	 		 		 		 		 		 		 	11090904	
540	 	23QJ1	 		 		 		 		 		 		 	02101105	
640	 	23QJ2	 		 		 		 		 		 		 	02101112	
540	 	24QJ1	 		 		 		 		 		 		 	02101108	
640	 	24QJ2	 		 		 		 		 		 		 	02101119	
540	 	25QJ1	 		 		 		 		 		 		 	02101098	
640	 	25QJ2	 		 		 		 		 		 		 	02101113	
540	 	26QJ1	 		 		 		 		 		 		 	02101110	
640	 	26QJ2	 		 		 		 		 		 		 	02100486	
540	 	27QJ1	 		 		 		 		 		 		 	02101107	
640	 	27QJ2	 		 		 		 		 		 		 	02100493	
540	 	28QJ1	 		 		 		 		 		 		 	02101106	
640	 	28QJ2	 		 		 		 		 		 		 	02100488	
540	 	38QJ1	 		 		 		 		 		 		 	02101100	
640	 	38QJ2	 		 		 		 		 		 		 	02101111	
540	 	39QJ1	 		 		 		 		 		 		 	02101101	
640	 	39QJ2	 		 		 		 		 		 		 	02100489	
540	 	29QJ1	 	SENSOR-TEMPERATURE	 	89305	 	SIMMONDS PRECISION PR	 	3540000-1	 		 		 	01104149	
640	 	29QJ2	 		 		 		 		 		 		 	01104122	
540	 	30QJ1	 		 		 		 		 		 		 	01104141	
640	 	30QJ2	 		 		 		 		 		 		 	01104127	
540	 	21QA	 	PUMP-FUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	568-1-27202-006	 		 		 	21276	
640	 	22QA	 		 		 		 		 		 		 	21280	
540	 	25QA	 		 		 		 		 		 		 	21273	
640	 	26QA	 		 		 		 		 		 		 	21275	
195	 	37QA	 		 		 		 		 		 		 	21279	
196	 	38QA	 		 		 		 		 		 		 	21274	
540	 	2QM	 	CANISTER-PUMP,FUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	568-1-27203-002	 		 		 	20208	
640	 	3QM	 		 		 		 		 		 		 	20200	
540	 	1QM	 	CANISTER-PUMP,FUEL	 	K2523	 	EATON AEROSPACE LIMIT	 	568-1-27244-002	 		 		 	20173	
640	 	4QM	 		 		 		 		 		 		 	20202	
540	 	84QM	 		 		 		 		 		 		 	20170	
640	 	85QM	 		 		 		 		 		 		 	20154	
550	 	194QM	 	ARRESTOR-FLAME,WING T	 	F0553	 	INTERTECHNIQUE	 	786073-1-0	 		 		 	786073IN01479	
650	 	195QM	 		 		 		 		 		 		 	786073IN01467	
540	 	19QT1	 	CADENSICON	 	K5294	 	SMITH INDUSTRIES AVIA	 	796-809-6A	 		 		 	12582	
640	 	19QT2	 		 		 		 		 		 		 	12601	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	24	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 28	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
141	 	20QT	 	CADENSICON	 	K5294	 	SMITH INDUSTRIES AVIA	 	796-809-6A	 		 		 	12343	
192	 	5QT	 	PRESELECTOR	 	K5294	 	SMITH INDUSTRIES AVIA	 	796815-02-03	 		 		 	3288	
540	 	15QM	 	VALVE-FLOAT,VENT	 	K2523	 	EATON AEROSPACE LIMIT	 	9508175	 		 		 	19100596	
540	 	16QM	 		 		 		 		 		 		 	17101539	
640	 	17QM	 		 		 		 		 		 		 	20100763	
640	 	18QM	 		 		 		 		 		 		 	20100767	
471	 	122QM	 	VALVE-NON RETURN	 	K2523	 	EATON AEROSPACE LIMIT	 	9811820	 		 		 	M0280CV0510	
481	 	123QM	 		 		 		 		 		 		 	M0197CV0110	
540	 	33QM	 	VALVE-NON RETURN	 	K2523	 	EATON AEROSPACE LIMIT	 	9811839	 		 		 	17100813	
540	 	34QM	 		 		 		 		 		 		 	17100812	
640	 	35QM	 		 		 		 		 		 		 	19101534	
640	 	36QM	 		 		 		 		 		 		 	19101515	
540	 	37QM	 		 		 		 		 		 		 	17100799	
640	 	38QM	 		 		 		 		 		 		 	19101494	
142	 	97QM	 	VALVE-PRESSURE RELIEF	 	K2523	 	EATON AEROSPACE LIMIT	 	9815715	 		 		 	25105490	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	25	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 29	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
147	 	1388GM	 	VALVE-NONRETURN	 	FA3T0	 	TRW SYSTEMES AERONAUT	 	B42CA2002	 		 		 	19819	
197	 	2388GM	 		 		 		 		 		 		 	19858	
196	 	3388GM	 		 		 		 		 		 		 	19821	
197	 	2000GQ	 	RESERVOIR-HYDRAULIC,B	 	FA3T1	 	GOODRICH ACTUATION SY	 	C19BQ0016	 		 		 	3568	
196	 	3000GQ	 	RESERVOIR-HYDRAULIC,Y	 	FA3T1	 	GOODRICH ACTUATION SY	 	C19DS0016	 		 		 	3577	
147	 	1000GQ	 	RESERVOIR-HYDRAULIC,G	 	FA3T1	 	GOODRICH ACTUATION SY	 	C19DS0026	 		 		 	3590	
197	 	1134GQ	 	VALVE-4 WAY	 	FA3T1	 	GOODRICH ACTUATION SY	 	C51LM0020	 		 		 	6336	
197	 	2264GM	 	VALVE-DRAIN	 	FA3T0	 	TRW SYSTEMES AERONAUT	 	C82LL0010	 		 		 	21367	
500	 	1046GK	 	VALVE ASSY-FIRE SHUTO	 	C3406	 	SITEC AEROSPACE GMBH	 	E03A00	 		 		 	13981	
600	 	3046GD	 		 		 		 		 		 		 	14084	
146	 	1002GM	 	FILTER-LP	 	U0088	 	PALL AEROSPACE CARDR	 	QA05561	 		 		 	RV5-1937	
196	 	3002GM	 		 		 		 		 		 		 	RV5-3214	
197	 	1132GM	 	FILTER-HP	 	U0088	 	PALL AEROSPACE CARDRE	 	QA05593	 		 		 	RV3-5826	
197	 	2002GM	 	FILTER-LP	 	U0088	 	PALL AEROSPACE CARDRE	 	QA05604	 		 		 	RV5-2036	
195	 	2084GM	 	FILTER ASSY-HYDRAULIC	 	U0088	 	PALL AEROSPACE CARDRE	 	QA05797	 		 		 	RV3-7472	
400	 	1392GM	 	VALVE-RESTRICTOR	 	U0088	 	PALL AEROSPACE CARDRE	 	QA05877	 		 		 	RV6-1743	
435	 	1084GM	 	FILTER ASSY	 	U0088	 	PALL AEROSPACE CARDRE	 	QA06305	 		 		 	RV4-5492	
445	 	3084GM	 		 		 		 		 		 		 	RV4-5488	
195	 	1360GM	 	RESERVOIR-PRESSURE UN	 	U0088	 	PALL AEROSPACE CARDRE	 	QA07739-02	 		 		 	RV5-2375	
145	 	1070GM	 	ACCUMULATOR-HYDRAULIC	 	C1861	 	HYDAC GES. F. HYDRAUL	 	SB209L1A1-1484	 		 		 	55480	
195	 	2070GM	 		 		 		 		 		 		 	55365	
196	 	3070GM	 		 		 		 		 		 		 	55508	
147	 	1381GR	 	TRANSDUCER AND SWITCH	 	D2439	 	DIEHL AEROSPACE GMBH	 	TM113-1	 		 		 	13080	
197	 	2381GR	 		 		 		 		 		 		 	13076	
196	 	3381GR	 		 		 		 		 		 		 	13097	
197	 	1834GQ	 	INDICATOR-QUANTITY	 	D2439	 	DIEHL AEROSPACE GMBH	 	VT477-2	 		 		 	04136	
197	 	1131GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-4	 		 		 	10-0515116	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	26	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 29	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
147	 	1524GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-4	 		 		 	10-051571	
145	 	1704GM	 		 		 		 		 		 		 	10-042970	
145	 	2040GM	 		 		 		 		 		 		 	10-0515101	
197	 	2131GM	 		 		 		 		 		 		 	10-0601168	
148	 	2467GM	 		 		 		 		 		 		 	10-051580	
198	 	3131GM	 		 		 		 		 		 		 	10-051248	
198	 	3188GM	 		 		 		 		 		 		 	10-051210	
600	 	1170GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-6	 		 		 	09-110322C	
500	 	1410GM	 		 		 		 		 		 		 	09-110369C	
600	 	1411GM	 		 		 		 		 		 		 	09-111862C	
500	 	2170GM	 		 		 		 		 		 		 	09-110228C	
600	 	2405GM	 		 		 		 		 		 		 	09-111855C	
500	 	2410GM	 		 		 		 		 		 		 	09-111885C	
600	 	2411GM	 		 		 		 		 		 		 	09-111876C	
500	 	3170GM	 		 		 		 		 		 		 	09-110245C	
146	 	1020GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-6-1	 		 		 	10-041281	
146	 	1024GM	 		 		 		 		 		 		 	10-0518404	
148	 	1277GM	 		 		 		 		 		 		 	10-0518689	
195	 	2041GM	 		 		 		 		 		 		 	10-0518693	
196	 	3017GM	 		 		 		 		 		 		 	10-0518477	
146	 	3020GM	 		 		 		 		 		 		 	10-0518439	
196	 	3056GM	 		 		 		 		 		 		 	10-060156	
196	 	3083GM	 		 		 		 		 		 		 	10-0518543	
146	 	3618GM	 		 		 		 		 		 		 	10-0518397	
198	 	3058GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-8	 		 		 	09-05-1533C	
145	 	2144GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV64-10	 		 		 	09-0804160C	
148	 	3024GM	 		 		 		 		 		 		 	09-0804111C	
151	 	1019GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV64-12	 		 		 	09-0722200C	
151	 	3019GM	 		 		 		 		 		 		 	10-043031	
147	 	1018GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV64-20	 		 		 	09-081211C	
151	 	3018GM	 		 		 		 		 		 		 	09-081245C	
195	 	2380GM	 	VALVE-CHECK	 	99240	 	CRISSAIR INC	 	1M1226	 		 		 	1659	
196	 	3014GM	 	MANIFOLD-HP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1553A9900-01	 		 		 	1553A99LI003750	
195	 	2111GM	 	MANIFOLD-HP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1554A9900-01	 		 		 	1554A99LI003735	
148	 	1113GM	 	MANIFOLD-HP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1555B9900-01	 		 		 	1555B99LI009016	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	27	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 29	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
148	 	3015GM	 	MANIFOLD-HP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1556A9900-02	 		 		 	1556A99LI003795	
147	 	1111GM	 	MANIFOLD-HP	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1559A9900-01	 		 		 	1559A99LI003749	
147	 	1383GM	 	GAUGE-AIR PRESSURE	 	05167	 	PACIFIC SCIENTIFIC CO	 	18301905	 		 		 	063072	
197	 	2383GM	 		 		 		 		 		 		 	062537	
196	 	3383GM	 		 		 		 		 		 		 	062546	
147	 	1072GM	 	GAUGE-NITROGEN PRESSU	 	05167	 	PACIFIC SCIENTIFIC CO	 	18330904-2	 		 		 	063199	
195	 	2072GM	 		 		 		 		 		 		 	063251	
196	 	3072GM	 		 		 		 		 		 		 	062913	
198	 	3067GM	 	VALVE-ERAKE SYSTEM RE	 	K4413	 	EATON AEROSPACE,VICKE	 	3022016-000	 		 		 	G1020324	
435	 	1030GK	 	PUMP-HYDRAULIC	 	K4413	 	EATON AEROSPACE,VICKE	 	3031863-001	 		 		 	MX741091	
445	 	3030GD	 		 		 		 		 		 		 	MX741679	
147	 	1088GM	 	TRANSFER UNIT-HYD POW	 	1SR57	 	TRIUMPH ACTUATION SYS	 	4101002-11	 		 		 	4194	
435	 	1074GK	 	SWITCH-PRESSURE	 	D2638	 	ELEKTRO METALL GMBH	 	450-1-3100-00	 		 		 	05722	
445	 	3074GD	 		 		 		 		 		 		 	05696	
195	 	2074GJ	 	SWITCH-PRESSURE	 	D2638	 	ELEKTRO METALL GMBH	 	450-2-3100-00	 		 		 	18318	
195	 	3GE	 	PANEL-STOW	 	298E3	 	HAMILTON SUNDSTRAND C	 	5909780	 		 		 	3722	
197	 	1009GM	 	PUMP-HYDRAULIC,HAND	 	D2541	 	ASG LUFTFAHRTTECHNIK	 	6-1404-0000-4	 		 		 	10-0244	
198	 	3009GM	 		 		 		 		 		 		 	10-0344	
197	 	1087GM	 	VALVE-2-2-WAY,MANUAL	 	C3406	 	SITEC AEROSPACE GMBH	 	70200	 		 		 	17331	
197	 	2087GM	 		 		 		 		 		 		 	17334	
198	 	3087GM	 		 		 		 		 		 		 	17358	
148	 	1005GM	 	VALVE-RELIEF	 	C3406	 	SITEC AEROSPACE GMBH	 	70400	 		 		 	13973	
197	 	2005GM	 		 		 		 		 		 		 	13999	
196	 	3005GM	 		 		 		 		 		 		 	14052	
147	 	1GE	 	ACTUATOR-RAM AIR TURB	 	99167	 	HAMILTON SUNDSTRAND C	 	764711C	 		 		 	4032	
147	 	2GE	 	RAT-RAM AIR TURBINE	 	99167	 	HAMILTON SUNDSTRAND C	 	766352B	 		 		 	3863	
195	 	2075GJ	 	PUMP-ELECTRIC	 	K4413	 	EATON AEROSPACE,VICKE	 	974540	 		 		 	G1020716	
196	 	3075GX	 		 		 		 		 		 		 	G1020520	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	28	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 30	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
132	 	3DW	 	CONTROL UNIT	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z212H0001110	 		 		 	212H00018012	
131	 	5DU	 	CONTROL UNIT	 	C9072	 	AIRBUS DEUTSCHLAND GM	 	Z220H0002110	 		 		 	220H00009254	
162	 	15DU	 		 		 		 		 		 		 	220H00011244	
211	 	5DB1	 	SWITCH-ROTARY	 	SJ328	 	IEC- ELECTRONIQUE	 	058-001-00	 		 		 	64956	
212	 	5DB2	 		 		 		 		 		 		 	64948	
522	 	9DL	 	VALVE-CONTROL,WING AN	 	59364	 	HONEYWELL INTERNATION	 	38E93-6	 		 		 	8694	
622	 	10DL	 		 		 		 		 		 		 	8704	
133	 	4DU	 	MAST ASSY-DRAIN	 	D8518	 	EADS AIRBUS GMBH	 	4-60000H883-00	 		 		 	368300002717	
172	 	14DU	 		 		 		 		 		 		 	368300004153	
211	 	2DM	 	GAGE-RAIN REPELLENT	 	F0218	 	LE BOZEC FILTRATION &	 	4020W35-3	 		 		 	8307	
121	 	2DG1	 	WHC-WINDOW HEAT COMPU	 	F6155	 	SAT SA DE TELECOMMUNI	 	416-00318-003	 		 		 	4160031805128	
122	 	2DG2	 		 		 		 		 		 		 	4160031805122	
212	 	6DB2	 	MOTOR CONVERTER	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	42791981	 		 		 	100031	
211	 	6DB1	 	MOTOR CONVERTER	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	4279204	 		 		 	100020	
121	 	6DA1	 	PHC-PROBE HEAT COMPUT	 	F9111	 	THALES AVIONICS	 	47215920BB00	 		 		 	472159208391	
122	 	6DA2	 		 		 		 		 		 		 	472159208376	
121	 	6DA3	 		 		 		 		 		 		 	472159208365	
211	 	16DD	 	INDICATOR-LIGHTED,ICI	 	F9503	 	MADELEC SYSTEMS	 	864-001	 	.	 		 	8185	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	29	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 31	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
211	 	1TD	 	MDDU-MULTIPURPOSE DIS	 	F6151	 	SAGEM DEFENSE SECURIT	 	AC68A200	 		 		 	5330	
212	 	2FS	 	CLOCK	 	FB432	 	G.I.E G.M.T.(GROUPEME	 	APE5100-1	 		 		 	4792	
127	 	1TW	 	CFDIU-CENTRALIZED FAU	 	F9111	 	THALES AVIONICS	 	C12860AA02	 		 		 	C12860005723	
211	 	2WT1	 	DU-DISPLAY UNIT	 	F9111	 	THALES AVIONICS	 	C19298AF05	 		 		 	C19298017905	
212	 	2WT2	 		 		 		 		 		 		 	C19298017959	
211	 	3WT1	 		 		 		 		 		 		 	C19298017961	
212	 	3WT2	 		 		 		 		 		 		 	C19298020216	
210	 	4WT1	 		 		 		 		 		 		 	C19298017951	
210	 	4WT2	 		 		 		 		 		 		 	C19298017953	
120	 	102TD	 	DLRB-DATA LOADING ROU	 	F6151	 	SAGEM DEFENSE SECURIT	 	DLRBA000	 		 		 	5773	
120	 	10TV	 	FDIMU-FLIGHT DATA INT	 	F6151	 	SAGEM DEFENSE SECURIT	 	ED48A100	 		 		 	1874	
210	 	1WT1 SW1	 	SOFTWARE-EIS	 	F9111	 	THALES AVIONICS	 	SXT30E2SA0820	 		 		 	198266010563	
210	 	1WT2 SW1	 		 		 		 		 		 		 	198266010554	
210	 	1WT3 SW1	 		 		 		 		 		 		 	198266010553	
210	 	2WT1 SW1	 		 		 		 		 		 		 	C19298017905	
210	 	2WT2 SW1	 		 		 		 		 		 		 	C19298017959	
210	 	3WT1 SW1	 		 		 		 		 		 		 	C19298017961	
210	 	3WT2 SW1	 		 		 		 		 		 		 	C19298020216	
210	 	4WT1 SW1	 		 		 		 		 		 		 	C19298017951	
210	 	4WT2 SW1	 		 		 		 		 		 		 	C19298017953	
127	 	1WT1	 	DMC-DISPLAY MANAGEMEN	 	F9111	 	THALES AVIONICS	 	1982660116	 		 		 	198266010563	
128	 	1WT2	 		 		 		 		 		 		 	198266010554	
127	 	1WT3	 		 		 		 		 		 		 	198266010553	
145	 	6TU	 	ACCELEROMETER-THREE A	 	199564	 	AMETEK AEROSPACE,S-C-	 	3001-01-111	 		 		 	0410-16406	
211	 	7WW	 	LOUDSPEAKER-AMPLIFIER	 	F6198	 	EADS AIRBUS SA	 	35-0D5-1003	 		 		 	0D5009838	
212	 	8WW	 		 		 		 		 		 		 	0D5009854	
210	 	6WT	 	ECP-ECAM CONTROL PANE	 	F6198	 	EADS AIRBUS SA	 	35-0L0-1003-06	 		 		 	0L0007118	
127	 	1WW1	 	FWC-FLIGHT WARNING CO	 	F6198	 	EADS AIRBUS SA	 	350E053021010	 		 		 	0E0015834	
128	 	1WW2	 		 		 		 		 		 		 	0E0015789	
127	 	1WV1	 	SDAC-SYSTEM DATA ACQU	 	F6198	 	EADS AIRBUS SA	 	350E5500202	 		 		 	0E5012700	
128	 	1WV2	 		 		 		 		 		 		 	0E5012699	
120	 	10TV
SW2	 	SOFTWARE-FDIMU	 	F6151	 	SAGEM DEFENSE SECURIT	 	360-04020-020	 		 		 	1874	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	30	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 31	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
120	 	10TV SW3	 	SOFTWARE-FDIMU	 	F6151	 	SAGEM DEFENSE SECURIT	 	360-04023-020	 		 		 	1874	
120	 	10TV SW1	 	SOFTWARE-FDIMU	 	F6151	 	SAGEM DEFENSE SECURIT	 	360-04027-030	 		 		 	1874	
210	 	4TW	 	PRINTER-MULTI USE	 	97896	 	HONEYWELL INTERNATION	 	8055515-4501	 		 		 	PTA45B-10935	
312	 	1TU	 	SSFDR-SOLID STATE FLI	 	97896	 	HONEYWELL INTERNATION	 	980-4700-042	 		 		 	SSFDR-18280	
	 		 		 		 	BAT EXP DAT:01AUG2016	 		 		 		 		

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	31	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 32	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
731	 	19GG	 	TACHOMETER	 	F6137	 	MESSIER-HISPANO-BUGATI	 	C20105000-2	 		 		 	61070	
741	 	20GG	 		 		 		 		 		 		 	61073	
731	 	21GG	 		 		 		 		 		 		 	161074	
741	 	22GG	 		 		 		 		 		 		 	161078	
123	 	2530GM	 	UPLOCK ASSY-NLG	 	F6137	 	MESSIER-HISPANO-BUGAT	 	C24730001-9	 		 		 	2789C24730	
123	 	2534GM	 	UPLOCK ASSY-NLG DOOR	 	F6137	 	MESSIER-HISPANO-BUGAT	 	C24730100-3	 		 		 	1462C24730	
711	 	6GC	 	SERVOCONTROL	 	F6137	 	MESSIER-HISPANO-BUGAT	 	C24736100-  	 		 		 	Y10784	
741	 	2612GM	 	MANIFOLD-NORMAL BRAKE	 	F6137	 	MESSIER-HISPANO-BUGAT	 	C24837102-2	 		 		 	Y06493	
731	 	2613GM	 		 		 		 		 		 		 	Y06490	
198	 	99GG	 	VALVE-SELECTOR,BRAKE	 	F6137	 	MESSIER-HISPANO-BUGAT	 	C24993000	 		 		 	Y01352	
731	 	2874GM	 	KIT-WHEEL ADAPTER	 	F4957	 	TECHNOFAN	 	DR1502D00	 		 		 	113600359	
731	 	2875GM	 		 		 		 		 		 		 	113600358	
741	 	2876GM	 		 		 		 		 		 		 	113600357	
741	 	2877GM	 		 		 		 		 		 		 	113600466	
711	 	5GC	 	BOX-ELECTRICAL,NLG	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D23119751	 		 		 	B2199	
711	 	2701GM	 	FITTING ASSY-TOWING	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D23278100	 		 		 	COU516	
711	 	2528GM	 	FORESTAY,ASSY	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D23596000-3	 		 		 	B3447	
711	 	2527GM	 	CYLINDER-ACTUATING,NL	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D23613000	 		 		 	MA1388	
711	 	2526GM	 	LEG ASSY-NLG	 	F0189	 	MESSIER DOWTY SA	 	D23757550-7	 		 		 	B3966	
145	 	102GG	 	VALVE-CONTROL,PARKING	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D24001000	 		 		 	Y00809	
571	 	12853GM	 	MANIFOLD-ALTERNATE BR	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D24005000	 		 		 	Y20790	
671	 	12852GM	 	MANIFOLD-ALTERNATE BR	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D24006000	 		 		 	Y20785	
140	 	7GC	 	VALVE-SELECT,MANIFOLD	 	F6137	 	MESSIER-HISPANO-BUGAT	 	D24157000	 		 		 	Y10787	
122	 	9GG	 	TRANSMITTER-BRAKE PED	 	F6137	 	MESSIER-HISPANO-BUGAT	 	E21324000-2	 		 		 	03864	
122	 	103GG	 		 		 		 		 		 		 	03856	
122	 	10GG	 	BSCU-BRAKING AND STEE	 	F6137	 	MESSIER-HISPANO-BUGAT	 	E21327006	 		 		 	4460	
126	 	95GG	 	ABCU-ALTERNATE BRAKIN	 	F6137	 	MESSIER-HISPANO-BUGAT	 	E21328002	 		 		 	02464	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	32	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 32	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
711	 	3GC	 	SENSOR-STEERING FEEDB	 	F61371	 	MESSIER-HISPANO-BUGAT	 	E21336000	 		 		 	17694	
711	 	4GC	 		 		 		 		 		 		 	17726	
731	 	2645GM	 	TIRE MLG	 	F06351	 	MICHELIN –MANUFACTURE	 	M01103	 		 		 	0058C189	
741	 	2646GM	 		 		 		 		 		 		 	0056C230	
731	 	2647GM	 		 		 		 		 		 		 	0055C270	
741	 	2648GM	 		 		 		 		 		 		 	0063C151	
711	 	2635GM	 	TIRE NLG	 	F0635	 	MICHELIN –MANUFACTURE	 	M08201	 		 		 	0049C066	
711	 	2636GM	 		 		 		 		 		 		 	0042C102	
146	 	2584GM	 	FILTER ASSY-HYDRAULIC	 	U0088	 	PALL AEROSPACE CARDRE	 	QA05797	 		 		 	RV3-7476	
146	 	2862GM	 		 		 		 		 		 		 	RV4-1632	
731	 	2866GM	 	FAN-WHEEL BRAKE	 	F4957	 	TECHNOFAN	 	RU1502U01	 		 		 	156004816	
731	 	2867GM	 		 		 		 		 		 		 	156004823	
741	 	2868GM	 		 		 		 		 		 		 	156004822	
741	 	2869GM	 		 		 		 		 		 		 	156004813	
147	 	2519GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-6-1	 		 		 	10-0518446	
147	 	2525GM	 		 		 		 		 		 		 	10-0518378	
147	 	2529GM	 		 		 		 		 		 		 	10-0518375	
571	 	2593GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV63-8	 		 		 	09-0515171C	
671	 	2594GM	 		 		 		 		 		 		 	09-0515161C	
147	 	2748GM	 		 		 		 		 		 		 	09-05-1584C	
147	 	2537GM	 	VALVE-CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV64-12	 		 		 	09-080662C	
148	 	2582GM	 	ACCUMULATOR-BRAKE	 	F1801	 	LAER INDUSTRIES SA	 	088256-04644	 		 		 	7461	
140	 	2516GM	 	VALVE-VENT	 	K0654	 	DOWTY AEROSPACE GLOUC	 	114083004	 		 		 	CH1010112	
120	 	2532GM	 		 		 		 		 		 		 	CH1010108	
140	 	2515GM	 	VALVE-CUT OUT	 	K0654	 	DOWTY AEROSPACE GLOUC	 	114086002	 		 		 	CH1010326	
140	 	2517GM	 	VALVE-BYPASS	 	K0654	 	DOWTY AEROSPACE GLOUC	 	114087008	 		 		 	CH1010184	
140	 	2518GM	 		 		 		 		 		 		 	CH1010183	
120	 	2533GM	 		 		 		 		 		 		 	5A0805487	
742	 	2522GM	 	ACTUATOR-DOOR,MLG	 	K0654	 	DOWTY AEROSPACE GLOUC	 	114122012	 		 		 	CH1008848	
732	 	2523GM	 		 		 		 		 		 		 	CH1008905	
140	 	2524GM	 	MANIFOLD-VALVE SELECT	 	U7388	 	GE AVIATION SYSTEMS L	 	114170009	 	.	 		 	CH1009986	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	33	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 32	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
198	 	2585GM	 	GAUGE-NITROGEN PRESSU	 	05167	 	PACIFIC SCIENTIFIC CO	 	18330904-2	 		 		 	063176	
140	 	49GA	 	VALVE-SAFETY	 	D5589	 	FEINMECHANISCHE WERKE	 	1905A0000-01	 		 		 	05094	
731	 	2641GM	 	BRAKE ASSY-MLG	 	97153	 	GOODRICH B F CO	 	2-1684	 		 		 	8864	
741	 	2642GM	 		 		 		 		 		 		 	8863	
731	 	2643GM	 		 		 		 		 		 		 	8865	
741	 	2644GM	 		 		 		 		 		 		 	8862	
140	 	2509GM	 	UPLOCK-MLG, LH	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201117025	 		 		 	CH1009984	
140	 	2510GM	 	UPLOCK-MLG,RH	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201117026	 		 		 	CH1010929	
140	 	2520GM	 	UPLOCK-MLG,DOOR	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201122009	 		 		 	CH1010751	
140	 	2521GM	 		 		 		 		 		 		 	CH1010748	
731	 	2505GM	 	STAY ASSY-SIDE,MLG	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201166013-030	 		 		 	B2419	
741	 	2506GM	 	STAY ASSY-SIDE,MLG	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201166014-030	 		 		 	B2416	
731	 	2823GM	 	DAMPER-TORQUE LINK,ML	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201419001-020	 		 		 	MG3956	
741	 	2824GM	 		 		 		 		 		 		 	MG3960	
731	 	2501GM	 	LEG AND DRESSINGS-MLG	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201582001-O50	 		 		 	MDG6234	
741	 	2502GM	 	LEG AND DRESSINGS-MLG	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201582002-050	 		 		 	MDG6235	
731	 	2503GM	 	ACTUATOR-RETRACTION	 	K0654	 	DOWTY AEROSPACE GLOUC	 	201590003	 		 		 	B6479	
741	 	2504GM	 		 		 		 		 		 		 	B6480	
212	 	6GA	 	LEVER-CONTROL,LANDING	 	F0214	 	ECE	 	215TS07Y00	 		 		 	7367	
124	 	2531GM	 	CYLINDER-ACTUATING,NL	 	F6137	 	MESSIER-HISPANO-BUGAT	 	22715-000-02	 		 		 	Y00781	
731	 	2649GM	 	WHEEL ASSY-MLG	 	97153	 	GOODRICH B F CO	 	3-1530	 		 		 	9402	
741	 	2650GM	 		 		 		 		 		 		 	9460	
731	 	2651GM	 		 		 		 		 		 		 	9466	
741	 	2652GM	 		 		 		 		 		 		 	9461	
711	 	2659GM	 	WHEEL ASSY-NLG	 	97153	 	GOODRICH B F CO	 	3-1531-3	 		 		 	A6546	
711	 	2660GM	 		 		 		 		 		 		 	A6542	
211	 	1GC	 	TRANSMITTER UNIT-N,W	 	F0222	 	SARMA	 	322200-7M00	 		 		 	AC03180	
212	 	2GC	 	TRANSMITTER UNIT-N,W	 	F0222	 	SARMA	 	322200-8M00	 	.	 		 	AD03217	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	34	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 32	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
741	 	2GW	 	BTMU-BRAKE TEMPERATUR	 	F6198	 	EADS AIRBUS SA	 	35-1H5-1002	 		 		 	14332	
731	 	3GW	 		 		 		 		 		 		 	13599	
121	 	63GA	 	PSDU-POWER SUPPLY DEC	 	F0214	 	ECE	 	530AL01CN	 		 		 	16357	
121	 	64GA	 		 		 		 		 		 		 	15969	
212	 	60GG	 	INDICATOR-PRESSURE TE	 	F9111	 	THALES AVIONICS	 	64882-206-1	 		 		 	6462	
121	 	5GA1	 	CONTROL-INTERFACE UNI	 	K0654	 	DOWTY AEROSPACE GLOUC	 	664700500A4D	 		 		 	001LG13590	
122	 	5GA2	 		 		 		 		 		 		 	001LG13591	
120	 	2629GM	 	VALVE-SAFETY	 	F6137	 	MESSIER-HISPANO-BUGAT	 	1762080-1	 		 		 	Y12138	
120	 	2630GM	 		 		 		 		 		 		 	Y12128	
121	 	2900GM	 		 		 		 		 		 		 	H10080	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	35	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 33	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
330	 	3LY	 	LIGHT-LOGO	 	D8095	 	GOODRICH HELLA AEROSP	 	1X2005097-00	 		 		 	1636813	
340	 	4LY	 		 		 		 		 		 		 	1636819	
241	 	61WL	 	LIGHT-EMERGENCY,OVERW	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005127-10	 		 		 	1659313	
242	 	6OWL	 	LIGHT-EMERGENCY,OVERW	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005128-10	 		 		 	1653846	
317	 	19LV	 	LIGHT UNIT-STROBE	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005303-05	 		 		 	1623678	
634	 	16LV	 	LIGHT UNIT-STROBE	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005308-05	 		 		 	1636054	
534	 	17LV	 		 		 		 		 		 		 	1629908	
241	 	63WL	 	LIGHT-EMERGENCY,OVERW	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005413-10	 		 		 	1662360	
242	 	62WL	 	LIGHT-EMERGENCY,OVERW	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005414-10	 		 		 	1665275	
317	 	15LA	 	LIGHT-NAVIGATION,REAR	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA403702-02	 		 		 	1617453	
140	 	6LV	 	LIGHT-ANTICOLLISION	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA455010-00	 		 		 	1660035	
244	 	7LV	 		 		 		 		 		 		 	1662893	
221	 	lOWL	 	EPSU-EMERGENCY POWER	 	D1347	 	DIEHL AEROSPACE GMBH	 	3214-62-10	 		 		 	134262	
	 		 		 		 	BAT EXP DAT:01DEC2014	 		 		 		 		
241	 	11WL	 		 		 	BAT EXP DAT:010CT2014	 		 		 		 	133898	
242	 	12WL	 		 		 	BAT EXP DAT:01JAN2015	 		 		 		 	134480	
263	 	13WL	 		 		 	BAT EXP DAT:01JUL2014	 		 		 		 	133119	
711	 	7LR	 	LIGHT-TAKE OFF	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	4233488	 		 		 	78501	
711	 	8LR	 	LIGHT-TAXI	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	4236564	 		 		 	84101	
500	 	7LB	 	LIGHT-RETRACTABLE,LAN	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	4315542	 		 		 	82455	
671	 	8LB	 		 		 		 		 		 		 	82452	
534	 	9LA	 	LIGHT ASSY-WINGTIP PO	 	72914	 	FL AEROSPACE CORP GRI	 	72303102-3	 		 		 	0594	
634	 	lOLA	 	LIGHT ASSY-WINGTIP PO	 	72914	 	FL AEROSPACE CORP GRI	 	72303102-4	 		 		 	0682	
317	 	13LA	 	TRANSFORMER-REAR NAVI	 	D8095	 	GOODRICH HELLA AEROSP	 	8ES403703-02	 		 		 	1640449	
244	 	3LV	 	PSU-POWER SUPPLY UNIT	 	D8095	 	GOODRICH HELLA AEROSP	 	8ES455012-06	 		 		 	1656558	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	36	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 33	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
140	 	4LV	 	PSU-POWER SUPPLY UNIT	 	D8095	 	GOODRICH HELLA AEROSP	 	8ES455012-06	 	.	 		 	1656564	
634	 	14LV	 	PSU-POWER SUPPLY UNIT	 	D8095	 	GOODRICH HELLA AEROSP	 	8ES455438-07	 		 		 	1640687	
534	 	15LV	 		 		 		 		 		 		 	1640697	
312	 	18LV	 	PSU-POWER SUPPLY UNIT	 	D8095	 	GOODRICH HELLA AEROSP	 	8ES455440-06	 		 		 	1645949	
711	 	3LC1	 	LIGHT-RUNWAY TURNOFF	 	QQ803	 	ECE-EQUIPMENT ET CONS	 	8000306Y00	 		 		 	13618	
711	 	3LC2	 		 		 		 		 		 		 	3608	
231	 	3LX	 	FLOODLIGHT	 	F0280	 	TELEFLEX LIONEL DUPON	 	8000959Y00	 		 		 	174	
232	 	4LX	 	FLOODLIGHT	 	F0280	 	TELEFLEX LIONEL DUPON	 	8000960Y00	 		 		 	152	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	37	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 34	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	3SH	 	CONTROL UNIT-ATC,TCAS	 	F9111	 	THALES AVIONICS	 	C12404AB02	 		 		 	C12404005650	
211	 	22FN	 	INDICATOR-ISIS	 	F9111	 	THALES AVIONICS	 	C16221VA01 SY TEST
DAT:01AUG2010	 		 		 	C16221019520	
231	 	3FP1	 	SENSOR-1ANGLE OF ATTAC	 	F9111	 	THALES AVIONICS	 	C16291AB	 		 		 	Q06747018584	
232	 	3FP2	 		 		 		 		 		 		 	Q06747018530	
127	 	3FP3	 		 		 		 		 		 		 	Q06747018571	
127	 	1FP1	 	ADIRU-AIR DATA AND IN	 	94580	 	HONEYWELL INC	 	HG2030AE23	 		 		 	56025937	
128	 	1FP2	 		 		 		 	SY TEST DAT:01AUG2010
SY TEST DAT:01AUG2010	 		 		 	56025921	
120	 	1FP3	 		 		 		 	SY TEST DAT:01AUG2010	 		 		 	56025936	
210	 	2FN	 	COMPASS-STANDBY	 	U8429	 	SIRS NAVIGATION LTD	 	PGA0105W	 		 		 	714361-08	
125	 	19FP1	 	ADM-AIR DATA MODULE	 	58960	 	HONEYWELL INC SPERRY	 	PG1152BCO2	 		 		 	1005R235	
126	 	19FP2	 		 		 		 		 		 		 	1005R194	
125	 	19FP3	 		 		 		 		 		 		 	1005R234	
128	 	19FP4	 		 		 		 		 		 		 	1005R201	
127	 	19FP5	 		 		 		 		 		 		 	1005R210	
128	 	19FP6	 		 		 		 		 		 		 	1005R178	
127	 	19FP7	 		 		 		 		 		 		 	1005R214	
121	 	19FP8	 		 		 		 		 		 		 	1005R213	
125	 	9DA1	 	PROBE-PITOT	 	K5459	 	ROSEMOUNT ENGINEERING	 	0851HL	 		 		 	268023	
126	 	9DA2	 		 		 		 		 		 		 	276124	
125	 	9DA3	 		 		 		 		 		 		 	276125	
121	 	11FP1	 	SENSOR-TAT	 	K5459	 	ROSEMOUNT ENGINEERING	 	102LA2AG	 		 		 	A97342	
122	 	11FP2	 		 		 		 		 		 		 	A98192	
120	 	3SD1	 	ANTENNA-DME ATC	 	F61751	 	CHELTON ANTENNAS	 	2439-89-03	 		 		 	243989-11400	
130	 	3SD2	 		 		 		 		 		 		 	243989-11562	
127	 	7SH1	 		 		 		 		 		 		 	243989-11250	
128	 	7SH2	 		 		 		 		 		 		 	243989-11555	
224	 	7SH3	 		 		 		 		 		 		 	243989-11596	
223	 	7SH4	 		 		 		 		 		 		 	243989-11593	
240	 	3RP1	 	ANTENNA-ADF	 	F9111	 	THALES AVIONICS	 	615-2630-102	 		 		 	576-9230	
240	 	3RP2	 		 		 		 		 		 		 	576-9148	
110	 	4RT	 	ANTENNA-GLIDE SLOPE	 	F61751	 	CHELTON ANTENNAS	 	6202-89-62	 		 		 	620289-1650	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	38	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 34	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
130	 	1RS	 	ANTENNA-MARKER	 	F6175	 	CHELTON ANTENNAS	 	6204-89-00	 		 		 	620489-1729	
324	 	4RS	 	ANTENNA-VOR	 	F6175	 	CHELTON ANTENNAS	 	6205-89-63	 		 		 	620589-608	
110	 	3RT	 	ANTENNA-LOCALIZER	 	F6175	 	CHELTON ANTENNAS	 	6207-88-62	 		 		 	620788-1557	
211	 	21FN	 	DDRMI-DIGITAL DISTANC	 	4V7921	 	ROCKWELL COLLINS INC.	 	622-5001-504	 		 		 	16Y9TV	
210	 	35Q	 	CONTROL UNIT-WEATHER	 	4V7921	 	ROCKWELL COLLINS INC.	 	622-5130-820	 		 		 	180RY2	
121	 	9SQ	 	TRAY-MOUNTING,WR XCVR	 	4V7921	 	ROCKWELL COLLINS INC.	 	622-5134-064	 		 		 	17X5P0	
110	 	75Q	 	DRIVE-WEATHER RADAR A	 	4V7921	 	ROCKWELL COLLINS INC.	 	622-5136-801	 		 		 	180V8N	
110	 	11SQ	 	ANTENNA-WEATHER RADAR	 	4V792	 	ROCKWELL COLLINS INC.	 	622-5137-601	 		 		 	3JKLP	
150	 	5SA1	 	ANTENNA-RADIO ALTIMET	 	13499	 	ROCKWELL COLLINS INC.	 	622-8701-003	 		 		 	3JJOJ	
150	 	5SA2	 		 		 		 		 		 		 	3JJNV	
150	 	6SA1	 		 		 		 		 		 		 	3JJOV	
150	 	65A2	 		 		 		 		 		 		 	3JJFP	
230	 	7SG1	 	ANTENNA-TCAS	 	55939	 	HONEYWELL INTL	 	7514081-911	 		 		 	ANE34660	
130	 	7SG2	 		 		 		 		 		 		 	ANE34666	
128	 	1SG	 	COMPUTER-TCAS	 	1R5Y6	 	L-3 COMMUNICATION	 	7517900-10006	 		 		 	20011025	
127	 	3RS1	 	RECEIVER-VOR,MKR	 	4V792	 	ROCKWELL COLLINS INC.	 	822-0297-020	 		 		 	171410	
128	 	3RS2	 		 		 		 		 		 		 	171596	
127	 	2RP1	 	RECEIVER-ADF	 	4V792	 	ROCKWELL COLLINS INC.	 	822-0299-020	 		 		 	171635	
127	 	2SD1	 	INTERROGATOR-DME	 	4V792	 	ROCKWELL COLLINS INC.	 	822-0329-020	 		 		 	3R6PK	
128	 	2SD2	 		 		 		 		 		 		 	3WBDR	
152	 	2SA1	 	TRANSCEIVER-RADIO ALT	 	113499	 	ROCKWELL COLLINS INC.	 	822-0334-020
SY TEST DAT:01JUL2010	 		 		 	181L3F	
152	 	25A2	 		 		 		 	SY TEST DAT:01JUL20101	 		 		 	181LHR	
120	 	40RT1	 	MMR-MULTI MODE RECEIV	 	4V792	 	ROCKWELL COLLINS INC.	 	822-1152-122	 		 		 	180R6X	
120	 	40RT2	 		 		 		 		 		 		 	180R77	
210	 	43RT1	 	ANTENNA-GPS ACTIVE	 	4V792	 	ROCKWELL COLLINS INC.	 	822-1330-001	 		 		 	3JHHG	
210	 	43RT2	 		 		 		 		 		 		 	3JJBR	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	39	
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 34	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
127	 	1SH1	 	TRANSPONDER-ATC	 	13499	 	ROCKWELL COLLINS INC.	 	822-1338-021
SY TEST DAT:01JUL2010	 		 		 	3R9JM	
128	 	1SH2	 		 		 		 	SY TEST DAT:01JUL2010	 		 		 	3R9JK	
121	 	1SQ1	 	TRANSCEIVER-WEATHER R	 	4V792	 	ROCKWELL COLLINS INC.	 	822-1710-213	 		 		 	184KDC	
128	 	1WZ	 	GPWC-GROUND PROXIMITY	 	97896	 	HONEYWELL INTERNATION	 	965-1676-003	 		 		 	EMK5-31287	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	40	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 35	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
125	 	4WV	 	SWITCH-PRESSURE	 	F5341	 	INTERTECHNIQUE SA (ER	 	CMK80-01	 		 		 	8606	
125	 	3HT	 	VALVE-SOLENOID	 	F5341	 	INTERTECHNIQUE SA (ER	 	DVE90-07	 		 		 	7455	
210	 	5757HM	 	MASK-FULL FACE QUICK	 	F5341	 	INTERTECHNIQUE SA (ER	 	MF20-534
MANUF DAT:01JUN2010	 		 		 	SE54166
SE54165	
212	 	5758HM	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	SE52930	
211	 	5759HM	 		 		 		 	MANUF DAT:01MAR2010	 		 		 		
210	 	5760HM	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	SE54083	
212	 	lORN1	 	STOWAGE BOX ASSY	 	F5341	 	INTERTECHNIQUE SA (ER	 	MXP801-11	 		 		 	SE39665	
212	 	1ORN2	 		 		 		 		 		 		 	SE39728	
212	 	lORN3	 		 		 		 		 		 		 	SE39730	
211	 	5774HM	 		 		 		 		 		 		 	SE39667	
125	 	4HT	 	REGULATOR TRANSMITTER	 	F5341	 	INTERTECHNIQUE SA (ER	 	RCF6708	 		 		 	112733	
211	 	16WR	 	SWITCH-ALTITUDE,DUAL	 	16827	 	BE AEROSPACE	 	101809-04	 		 		 	1016386	
223	 	113WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	14C15L215170100
MANUF DAT:01JUN2010	 		 		 	BEBF-1310	
233	 	114WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1291	
233	 	131WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1309	
233	 	132WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1299	
233	 	133WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1308	
233	 	134WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBE-1289	
243	 	135WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1285	
243	 	172WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1292	
243	 	173WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1311	
243	 	175WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1293	
243	 	176WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1302	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	41	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 35	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
243	 	211WR	 	CONTAINER ASSY-CHEMIC	 	D13791	 	B/E AEROSPACE SYSTEMS	 	14C15L215170100
MANUF DAT:01JUN2010	 		 		 	BEBF-1296	
243	 	212WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2529	
243	 	213WR	 		 		 		 	MANUF DAT:O1JUN2010	 		 		 	BEBF-1286	
253	 	214WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1294	
253	 	215WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1301	
253	 	231WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1295	
253	 	233WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1290	
253	 	234WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1288	
253	 	235WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2523	
253	 	251WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1298	
253	 	252WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1303	
253	 	253WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1297	
253	 	255WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2519	
224	 	123WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	MANUF DAT:01JUN2010
14C15R215170100	 		 		 	BEBF-1173	
234	 	124WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1168	
234	 	141WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1166	
234	 	142WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1175	
234	 	143WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1159	
234	 	144WR	 		 		 		 	MANUF DAT:O1JUN2010	 		 		 	BEBF-1178	
244	 	145WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1172	
244	 	182WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1161	
244	 	183WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1162	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	42	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 35	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
244	 	185WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	14C15R215170100
MANUF DAT:01JUN2010	 		 		 	BEBF-1163	
244	 	186WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1165	
244	 	221WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1180	
244	 	222WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1169	
244	 	223WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1176	
254	 	224WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1174	
254	 	225WR	 		 		 		 	MANUF DAT:O1JUN2010	 		 		 	BEBF-1184	
254	 	241WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1183	
254	 	242WR	 		 		 		 	MANUF DAT:01JUN2010	 		 	‘	 	BEBF-1181	
254	 	243WR	 		 		 	.	 	MANUF DAT:01JUN2010	 		 		 	BEBF-1182	
254	 	244WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1158	
254	 	245WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2557	
254	 	261WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-1177	
254	 	262WR	 		 		 		 	MANUF DAT:O1JUN2010	 		 		 	BEBF-1171	
254	 	264WR	 		 		 		 	MANUF DAT:O1JUN2010	 		 		 	BEBF-1167	
223	 	28WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	22C15L120100100
MANUF DAT:01JUN2010	 		 		 	BEBF-2892	
263	 	35WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2569	
264	 	36WR	 		 		 		 	MANUF DAT:01JUN2010	 	‘	 		 	BEBF-2890	
224	 	40WR	 		 		 		 	MANUF DAT:01JUN2010	 		 		 	BEBF-2840	
223	 	29WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	22C15L150320100
MANUF DAT:01JUN2010	 		 		 	BEBF-0309	
263	 	32WR	 		 		 		 	MANUF DAT:01JUN2010	 	.	 		 	BEBF-0311	

													
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	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 35	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
264	 	39WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	122C15L150320100
MANUF DAT:01JUN2010	 		 		 	BEBF-0322	
263	 	33WR	 	CONTAINER ASSY-CHEMIC	 	D1379	 	B/E AEROSPACE SYSTEMS	 	22C15L240100100
MANUF DAT:01JUN2010	 		 		 	BEBF-2072	
212	 	5776HM	 	PBE-PROTECTIVE BREATH	 	53655	 	AVOX SYSTEMS INC.	 	802300-14
MANUF DAT:01APR2009	 		 		 	E10040408
E10050247	
200	 	6137HM	 		 		 		 	MANUF DAT:01MAY2010	 		 		 	E10050248	
200	 	6138HM	 		 		 		 	MANUF DAT:01MAY2010	 		 		 		
200	 	6139HM	 		 		 		 	MANUF DAT:01MAY2010	 		 		 	E10050245	
200	 	6140HM	 		 		 		 	MANUF DAT:01MAY2010	 		 		 	E10050246	
125	 	5750HM	 	CYLINDER ASSY-OXYGEN HST DAT:01MAR2010	 	53655	 	AVOX SYSTEMS INC.	 	891511-14
MANUF DAT:01JUN2010	 		 		 	C10060015	
200	 	6500HM	 	CYLINDER ASSY-OXYGEN, HST DAT:01MAR2010	 	53655	 	AVOX SYSTEMS INC.	 	9700C1AF23AN
MANUF DAT:01MAY2010	 		 		 	P10050541
P10050553	
200	 	6501HM	 	HST DAT:01MAR2010	 		 		 	MANUF DAT:01MAY2010	 		 		 	P09050712	
200	 	6505HM	 	HST DAT:01FEV2009	 		 		 	MANUF DAT:01MAY2009	 		 		 		
200	 	6506HM	 	HST DAT:O1FEV2009	 		 		 	MANUF DAT:01MAY2009	 		 		 	P09050744	
200	 	6507HM	 	HST DAT:01MAR2010	 		 		 	MANUF DAT:01MAY2010	 		 		 	P10050538	

													
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	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 36	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
153	 	7260HM	 	VALVE ASSY-NONRETURN	 	K2523	 	EATON AEROSPACE LIMIT	 	FRH220034V	 		 		 	20100880	
192	 	7300HM	 	CONNECTOR-HP GROUND	 	K2523	 	EATON AEROSPACE LIMIT	 	HTE370001	 		 		 	21100213	
191	 	7270HM	 	VALVE-NON RETURN	 	F0553	 	INTERTECHNIQUE	 	L96H15-501 11	 		 		 	E58706	
191	 	7272HM	 		 		 		 		 		 		 	E58712	
453	 	7110HM	 	VALVE-CHECK	 	F1958	 	LIEBHERR-AEROSPACE TO	 	2293B020000	 		 		 	16351	
463	 	7110HM1	 		 		 		 		 		 		 	16375	
471	 	10HA1	 	THERMOSTAT-SOLENOID	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1341F010000	 		 		 	09948	
481	 	10HA2	 		 		 		 		 		 		 	09950	
413	 	7170HM	 	THERMOSTAT-CONTROL	 	F1958	 	LIEBHERR-AEROSPACE TO	 	1342B050000	 		 		 	10596	
423	 	7170HM1	 		 		 		 		 		 		 	10619	
413	 	7150HM	 	EXCHANGER-PRECOOLER	 	F1958	 	LIEBHERR-AEROSPACE TO	 	3732A010000	 		 		 	06407	
423	 	7150HM1	 		 		 		 		 		 		 	06404	
191	 	6HV	 	VALVE ASSY-ISOLATION	 	C0002	 	NORD-MICRO AG & CO	 	4063-16082-3	 		 		 	10116798	
471	 	5HA1	 	VALVE-FAN AIR	 	F1958	 	LIEBHERR-AEROSPACE	 	6730F010000	 		 		 	6730-08040	
481	 	5HA2	 		 		 		 		 		 		 	6730-08020	
471	 	5HA1	 	VALVE-OVERPRESSURE	 	F1958	 	LIEBHERR-AEROSPACE	 	6740F010000	 		 		 	6740-07458	
481	 	5HA2	 		 		 		 		 		 		 	6740-07479	
453	 	4000HA	 	VALVE-HP BLEED	 	F1958	 	LIEBHERR-AEROSPACE	 	6773F010000	 		 		 	6773-08068	
463	 	4000HA1	 		 		 		 		 		 		 	6773-08070	
453	 	4001HA	 	VALVE-BLEED PRESSURE	 	F1958	 	LIEBHERR-AEROSPACE	 	6774G010000	 		 		 	6774-08347	
463	 	4001HA1	 		 		 		 		 		 		 	6774-08348
785002IN9392	
121	 	1HA1	 	BMC-BLEED MONITORING	 	F0553	 	INTERTECHNIQUE	 	785002-9	 		 		 	7850021N9367	
122	 	1HA2	 		 		 		 		 		 		 		

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 46	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
127	 	1TX1	 	ATSU-AIR TRAFFIC SERV	 	F6198	 	EADS AIRBUS SA	 	LA2T0G20705C070	 		 		 	2T0005764	
211	 	30TX SW1	 	SOFTWARE-MEDIA ATSU A	 	F6198	 	EADS AIRBUS SA	 	LA2T0J00003KOF1	 		 		 	2T0005764	
211	 	20TX SW1	 	SOFTWARE-ATSU	 	F6198	 	EADS AIRBUS SA	 	LA2T0J1303A00F1	 		 		 	2T0005764	
211	 	21TX SW1	 	SOFTWARE-MEDIA ATSU A	 	F6198	 	EADS AIRBUS SA	 	LA2T0J60003A0F1	 		 		 	2T0005764	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	    AIRCRAFT	  	CHAPTER 3	  	PAGE :	  	46	
	  		  		  	    A319	  		  		  		
AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 49	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
313	 	4015KM	 	ACTUATOR	 	D2638	 	ELEKTRO METALL GMBH	 	106-1-1100-02	 		 		 	5545	
315	 	4005KM	 	APU	 	99193	 	HONEYWELL INTERNATION	 	3800708-1	 		 		 	P-4589	
152	 	59KD	 	ECB-ELECTRONIC CONTRO	 	99193	 	HONEYWELL INTERNATION	 	3888394-221204	 		 		 	04207	
212	 	5KA	 	CONTACTOR-SINGLE POLE	 	F0214	 	ECE	 	655CC04A0Y00	 		 		 	6590	
212	 	10KA	 		 		 		 		 		 		 	6573	
315	 	4065KM	 	BRACKET-FWD	 	13636	 	BARRY DIVISION	 	94830-04	 		 		 	4863	
316	 	4075KM	 	BRACKET-FWD	 	13636	 	BARRY DIVISION	 	94830-05	 		 		 	4745	
316	 	4085 KM	 	BRACKET-REAR	 	13636	 	BARRYDIVISION	 	94830-06	 		 		 	6399	
315	 	4035KM	 	ISOLATOR-VIBRATION	 	13636	 	BARRYDIVISION	 	94830-09	 		 		 	4201	
316	 	4045KM	 	ISOLATOR-VIBRATION	 	13636	 	BARRY DIVISION	 	94830-10	 		 		 	4169	
316	 	4055KM	 	ISOLATOR-VIBRATION	 	13636	 	BARRY DIVISION	 	94830-11	 		 		 	4177	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 52	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	24MQ	 	CONTROL-COCKPIT SYSTE	 	80477	 	ADAMS RITE AEROSPACE,	 	AR4709-11	 		 		 	N-C7015	
221	 	31MQ	 	STRIKE-ELECTRIC,CTR	 	80477	 	ADAMS RITE AEROSPACE,	 	AR4714-11	 		 		 	1014139	
221	 	30MQ	 	STRIKE-ELECTRIC	 	80477	 	ADAMS RITE AEROSPACE,	 	AR4714-7	 		 		 	1017619	
221	 	32MQ	 		 		 		 		 		 		 	1017621	
132	 	2502MJ	 	ACTUATOR-HYDRAULIC	 	C3406	 	SITEC AEROSPACE GMBH	 	E20000	 		 		 	010064	
132	 	2503MJ	 		 		 		 		 		 		 	010072	
152	 	2505MJ	 		 		 		 		 		 		 	010341	
152	 	2506MJ	 		 		 		 		 		 		 	010342	
831	 	360RH1	 	CYLINDER-DOOR DAMPER	 	F0221	 	RATIER-FIGEAC	 	FE240-007	 		 		 	FR0969	
841	 	360RH2	 		 		 		 		 		 		 	FR0967	
833	 	360RH3	 		 		 		 		 		 		 	FR0980	
843	 	360RH4	 		 		 		 		 		 		 	FR0984	
152	 	2500MJ	 	VALVE-ELECTRO SELECTO	 	D9893	 	LIEBHERR-AEROSPACE LI	 	S4-3402180	 		 		 	0784906LI005836	
252	 	3717GM	 	VALVE-DOUBLE CHECK	 	91816	 	CIRCLE SEAL JAMES PON	 	ZCV212	 		 		 	H3897	
122	 	14WN	 	SWITCH-DIFFERENTIAL P	 	F0218	 	LE BOZEC FILTRATION &	 	1266-100	 		 		 	10040	
132	 	2501MJ	 	VALVE-SELECTOR	 	D9893	 	LIEBHERR-AEROSPACE LI	 	1567A0000-01	 		 		 	1567A00LI005099	
152	 	2504MJ	 		 		 		 		 		 		 	1567A00LI005671	
831	 	1WN1	 	PANEL-WARNING LIGHT	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005469-00	 		 		 	1637820	
841	 	1WN2	 		 		 		 		 		 		 	1637818	
832	 	3WN1	 		 		 		 		 		 		 	1637821	
842	 	3WN2	 		 		 		 		 		 		 	1637829	
241	 	2WN1	 	PANEL-WARNING LIGHT	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA005469-01	 		 		 	1639942	
242	 	2WN2	 		 		 		 		 		 		 	1639940	
831	 	16WN1	 	PANEL-WARNING LIGHT	 	D8095	 	GOODRICH HELLA AEROSP	 	2LA007307-00	 		 		 	1642349	
841	 	16WN2	 		 		 		 		 		 		 	1642306	
832	 	17WN1	 		 		 		 		 		 		 	1642348	
842	 	17WN2	 		 		 		 		 		 		 	1642299	
832	 	1506WM	 	CONTROL-FLEXIBLE	 	F4678	 	CBA LA COMMANDE A BIL	 	72CF8944-00	 		 		 	8364	
842	 	1507WM	 		 		 		 		 		 		 	7977	
831	 	1504WM	 	CONTROL-FLEXIBLE	 	F4678	 	CBA LA COMMANDE A BIL	 	72CF8945-00	 		 		 	8145	
841	 	1505WM	 		 		 		 		 		 		 	8269	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 53	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
110	 	1560WM	 	RADOME-NOSE	 	F6198	 	EADS AIRBUS SA	 	D53132010000	 		 		 	RADSA5944	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 56	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
212	 	7DG2	 	WINDOW-FIXED	 	F0360	 	SAINT GOBAIN SULLY	 	SPSA320-10-2-2	 		 		 	3478	
211	 	8DG1	 	WINDOW-SLIDING	 	F0360	 	SAINT GOBAIN SULLY	 	SPSA320-7-4-2	 		 		 	16463	
212	 	8DG2	 	WINDOW-SLIDING	 	F0360	 	SAINT GOBAIN SULLY	 	SPSA320-8-4-2	 		 		 	16474	
211	 	7DG1	 	WINDOW-FIXED	 	F0360	 	SAINT GOBAIN SULLY	 	SPSA320-9-2-2	 		 		 	3417	
211	 	3DG1	 	WINDSHIELD	 	F0360	 	SAINT GOBAIN SULLY	 	STA320-1-7-1	 		 		 	60771	
212	 	3DG2	 	WINDSHIELD	 	F0360	 	SAINT GOBAIN SULLY	 	STA320-2-7-1	 		 		 	10766	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 71	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
450	 	1500KM1	 	MOUNT FWD-A5	 	51563	 	ROHR INDUSTRIES, INC.	 	745-2000-501	 		 		 	13085001	
460	 	1500KM2	 		 		 		 		 		 		 	13139001	
450	 	1550KM1	 	MOUNT AFT-A5	 	51563	 	ROHR INDUSTRIES, INC.	 	745-2000-503	 		 		 	13110001	
460	 	11550K42	 		 		 		 		 		 		 	13126001	
430	 	1200KM1	 	EBU-ENGINE BUILD UP U	 	0AM53	 	INTERNATIONAL AERO EN	 	745-5000-509	 		 		 	3355001	
440	 	1200KM2	 		 		 		 		 		 		 	3356001	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 73	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	6KS	 	SWITCH-ROTARY	 	SJ328	 	IEC-ELECTRONIQUE	 	058-001-00	 		 		 	64911	
436	 	4000KS1	 	EEC-ELECTRONIC ENGINE	 	0AM53	 	INTERNATIONAL AERO EN	 	2A4251	 		 		 	2540-4092	
440	 	4000KS2	 		 		 		 		 		 		 	2540-4155	
127	 	1KS1	 	EIU-ENGINE INTERFACE	 	F9111	 	THALES AVIONICS	 	3957985205	 		 		 	Q05720010097	
128	 	1KS2	 		 		 		 		 		 		 	Q05720010001	
435	 	4000KC1	 	FMU-FUEL METERING UNI	 	0AM53	 	INTERNATIONAL AERO EN	 	8061-636	 		 		 	16942629	
445	 	4000KC2	 		 		 		 		 		 		 	16959249	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 76	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
210	 	8KS1	 	CONTROL UNIT-THROTTLE	 	F0222	 	SARMA	 	330400M01	 		 		 	AG10360	
210	 	8KS2	 		 		 		 		 		 		 	AG10085	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 77	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
128	 	2EV	 	EVMU-ENGINE VIBRATION	 	S3960	 	VIBROMETER SA.	 	241-247-012-005	 		 		 	AE79629	

													
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AIRBUS INDUSTRIE	  	EQUIPMENT	  	        ATA : 78	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

ZONE	 	FUNCTIONAL
ITEM NUMBER	 	DESCRIPTION	 	CODE	 	VENDOR	 	PART NUMBER
WEIGHT (KG) /DATE	 	ACCEPT
DATE	 	BFE	 	SERIAL NUMBER
REMARKS	
410	 	4101KS1	 	CONTROL UNIT	 	51563	 	ROHR INDUSTRIES, INC.	 	740D8003-27	 		 		 	4130	
420	 	4101KS2	 		 		 		 		 		 		 	4083	
455	 	3850KM1	 	NOZZLE ASSY-COMMON (N	 	51563	 	ROHR INDUSTRIES, INC.	 	745-1101-507	 		 		 	10378001	
465	 	3850KM2	 		 		 		 		 		 		 	10390001	
455	 	3900KM1	 	CONE ASSY TAIL	 	51563	 	ROHR INDUSTRIES, INC.	 	1745-1502-501	 		 		 	10385001	
465	 	3900KM2	 		 		 		 		 		 		 	10395001	

													
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AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

20024	  	 	X	  	  	 	20035	  	  	 	X	  	  	 	20036	  	  	 	X	  	  	 	20037	  	  	 	X	  	  	 	20041	  	  	 	X	  	  	 	20042	  	  	 	X	  	  	 	20046	  	  	 	X	  	  	 	20047	  	  	 	X	  	  	 	20048	  	  	 	X	  	  	 	20052	  	  	 	X	  	
20053	  	 	X	  	  	 	20063	  	  	 	X	  	  	 	20066	  	  	 	X	  	  	 	20067	  	  	 	X	  	  	 	20068	  	  	 	X	  	  	 	20069	  	  	 	X	  	  	 	20070	  	  	 	X	  	  	 	20071	  	  	 	X	  	  	 	20073	  	  	 	X	  	  	 	20081	  	  	 	X	  	
20113	  	 	X	  	  	 	20131	  	  	 	X	  	  	 	20137	  	  	 	X	  	  	 	20151	  	  	 	X	  	  	 	20160	  	  	 	X	  	  	 	20163	  	  	 	X	  	  	 	20165	  	  	 	X	  	  	 	20167	  	  	 	X	  	  	 	20168	  	  	 	X	  	  	 	20170	  	  	 	X	  	
20189	  	 	X	  	  	 	20197	  	  	 	X	  	  	 	20210	  	  	 	X	  	  	 	20221	  	  	 	X	  	  	 	20223	  	  	 	X	  	  	 	20227	  	  	 	X	  	  	 	20230	  	  	 	X	  	  	 	20234	  	  	 	X	  	  	 	20259	  	  	 	X	  	  	 	20283	  	  	 	X	  	
20307	  	 	X	  	  	 	20344	  	  	 	X	  	  	 	20354	  	  	 	X	  	  	 	20359	  	  	 	X	  	  	 	20393	  	  	 	X	  	  	 	20418	  	  	 	X	  	  	 	20493	  	  	 	X	  	  	 	20516	  	  	 	X	  	  	 	20541	  	  	 	X	  	  	 	20580	  	  	 	X	  	
20604	  	 	X	  	  	 	20605	  	  	 	X	  	  	 	20638	  	  	 	X	  	  	 	20639	  	  	 	X	  	  	 	20652	  	  	 	X	  	  	 	20673	  	  	 	X	  	  	 	20675	  	  	 	X	  	  	 	20692	  	  	 	X	  	  	 	20703	  	  	 	X	  	  	 	20735	  	  	 	X	  	
20740	  	 	X	  	  	 	20744	  	  	 	X	  	  	 	20758	  	  	 	X	  	  	 	20762	  	  	 	X	  	  	 	20773	  	  	 	X	  	  	 	20774	  	  	 	X	  	  	 	20796	  	  	 	X	  	  	 	20799	  	  	 	X	  	  	 	20802	  	  	 	X	  	  	 	20822	  	  	 	X	  	
20835	  	 	X	  	  	 	20840	  	  	 	X	  	  	 	20856	  	  	 	X	  	  	 	20863	  	  	 	X	  	  	 	20866	  	  	 	X	  	  	 	20879	  	  	 	X	  	  	 	20903	  	  	 	X	  	  	 	20904	  	  	 	X	  	  	 	20916	  	  	 	X	  	  	 	20925	  	  	 	X	  	
20928	  	 	X	  	  	 	20938	  	  	 	X	  	  	 	20941	  	  	 	X	  	  	 	20950	  	  	 	X	  	  	 	20951	  	  	 	X	  	  	 	20953	  	  	 	X	  	  	 	20963	  	  	 	X	  	  	 	20983	  	  	 	X	  	  	 	20995	  	  	 	X	  	  	 	21003	  	  	 	X	  	
21011	  	 	X	  	  	 	21039	  	  	 	X	  	  	 	21041	  	  	 	X	  	  	 	21052	  	  	 	X	  	  	 	21082	  	  	 	X	  	  	 	21098	  	  	 	X	  	  	 	21100	  	  	 	X	  	  	 	21103	  	  	 	X	  	  	 	21106	  	  	 	X	  	  	 	21125	  	  	 	X	  	
21142	  	 	X	  	  	 	21146	  	  	 	X	  	  	 	21188	  	  	 	X	  	  	 	21201	  	  	 	X	  	  	 	21202	  	  	 	X	  	  	 	21215	  	  	 	X	  	  	 	21218	  	  	 	X	  	  	 	21221	  	  	 	X	  	  	 	21233	  	  	 	X	  	  	 	21237	  	  	 	X	  	
21264	  	 	X	  	  	 	21265	  	  	 	X	  	  	 	21281	  	  	 	X	  	  	 	21282	  	  	 	X	  	  	 	21283	  	  	 	X	  	  	 	21284	  	  	 	X	  	  	 	21287	  	  	 	X	  	  	 	21288	  	  	 	X	  	  	 	21290	  	  	 	X	  	  	 	21293	  	  	 	X	  	
21294	  	 	X	  	  	 	21325	  	  	 	X	  	  	 	21327	  	  	 	X	  	  	 	21328	  	  	 	X	  	  	 	21335	  	  	 	X	  	  	 	21346	  	  	 	X	  	  	 	21362	  	  	 	X	  	  	 	21391	  	  	 	X	  	  	 	21413	  	  	 	X	  	  	 	21442	  	  	 	X	  	
21451	  	 	X	  	  	 	21466	  	  	 	X	  	  	 	21496	  	  	 	X	  	  	 	21499	  	  	 	X	  	  	 	21519	  	  	 	X	  	  	 	21520	  	  	 	X	  	  	 	21521	  	  	 	X	  	  	 	21547	  	  	 	X	  	  	 	21552	  	  	 	X	  	  	 	21562	  	  	 	X	  	
21582	  	 	X	  	  	 	21620	  	  	 	X	  	  	 	21648	  	  	 	X	  	  	 	21657	  	  	 	X	  	  	 	21659	  	  	 	X	  	  	 	21678	  	  	 	X	  	  	 	21693	  	  	 	X	  	  	 	21703	  	  	 	X	  	  	 	21725	  	  	 	X	  	  	 	21736	  	  	 	X	  	
21739	  	 	X	  	  	 	21774	  	  	 	X	  	  	 	21775	  	  	 	X	  	  	 	21778	  	  	 	X	  	  	 	21780	  	  	 	X	  	  	 	21781	  	  	 	X	  	  	 	21820	  	  	 	X	  	  	 	21823	  	  	 	X	  	  	 	21824	  	  	 	X	  	  	 	21850	  	  	 	X	  	
21852	  	 	X	  	  	 	21857	  	  	 	X	  	  	 	21858	  	  	 	X	  	  	 	21892	  	  	 	X	  	  	 	21916	  	  	 	X	  	  	 	21920	  	  	 	X	  	  	 	21944	  	  	 	X	  	  	 	21952	  	  	 	X	  	  	 	21957	  	  	 	X	  	  	 	21958	  	  	 	X	  	
21964	  	 	X	  	  	 	21966	  	  	 	X	  	  	 	21973	  	  	 	X	  	  	 	21974	  	  	 	X	  	  	 	21982	  	  	 	X	  	  	 	21983	  	  	 	X	  	  	 	21987	  	  	 	X	  	  	 	21999	  	  	 	X	  	  	 	22018	  	  	 	X	  	  	 	22022	  	  	 	X	  	
22031	  	 	X	  	  	 	22039	  	  	 	X	  	  	 	22048	  	  	 	X	  	  	 	22056	  	  	 	X	  	  	 	22057	  	  	 	X	  	  	 	22061	  	  	 	X	  	  	 	22066	  	  	 	X	  	  	 	22084	  	  	 	X	  	  	 	22087	  	  	 	X	  	  	 	22094	  	  	 	X	  	
22098	  	 	X	  	  	 	22109	  	  	 	X	  	  	 	22111	  	  	 	X	  	  	 	22113	  	  	 	X	  	  	 	22116	  	  	 	X	  	  	 	22117	  	  	 	X	  	  	 	22118	  	  	 	X	  	  	 	22132	  	  	 	X	  	  	 	22134	  	  	 	X	  	  	 	22137	  	  	 	X	  	
22141	  	 	X	  	  	 	22150	  	  	 	X	  	  	 	22155	  	  	 	X	  	  	 	22157	  	  	 	X	  	  	 	22160	  	  	 	X	  	  	 	22161	  	  	 	X	  	  	 	22163	  	  	 	X	  	  	 	22164	  	  	 	X	  	  	 	22200	  	  	 	X	  	  	 	22203	  	  	 	X	  	
22210	  	 	X	  	  	 	22215	  	  	 	X	  	  	 	22224	  	  	 	X	  	  	 	22236	  	  	 	X	  	  	 	22237	  	  	 	X	  	  	 	22241	  	  	 	X	  	  	 	22243	  	  	 	X	  	  	 	22249	  	  	 	X	  	  	 	22252	  	  	 	X	  	  	 	22253	  	  	 	X	  	
22266	  	 	X	  	  	 	22267	  	  	 	X	  	  	 	22270	  	  	 	X	  	  	 	22275	  	  	 	X	  	  	 	22277	  	  	 	X	  	  	 	22278	  	  	 	X	  	  	 	22280	  	  	 	X	  	  	 	22309	  	  	 	X	  	  	 	22310	  	  	 	X	  	  	 	22311	  	  	 	X	  	
22313	  	 	X	  	  	 	22314	  	  	 	X	  	  	 	22315	  	  	 	X	  	  	 	22316	  	  	 	X	  	  	 	22321	  	  	 	X	  	  	 	22322	  	  	 	X	  	  	 	22339	  	  	 	X	  	  	 	22343	  	  	 	X	  	  	 	22344	  	  	 	X	  	  	 	22345	  	  	 	X	  	

													
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	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

22353	  	 	X	  	  	 	22355	  	  	 	X	  	  	 	22356	  	  	 	X	  	  	 	22357	  	  	 	X	  	  	 	22365	  	  	 	X	  	  	 	22366	  	  	 	X	  	  	 	22369	  	  	 	X	  	  	 	22370	  	  	 	X	  	  	 	22371	  	  	 	X	  	  	 	22372	  	  	 	X	  	
22373	  	 	X	  	  	 	22374	  	  	 	X	  	  	 	22375	  	  	 	X	  	  	 	22376	  	  	 	X	  	  	 	22381	  	  	 	X	  	  	 	22385	  	  	 	X	  	  	 	22405	  	  	 	X	  	  	 	22409	  	  	 	X	  	  	 	22410	  	  	 	X	  	  	 	22413	  	  	 	X	  	
22418	  	 	X	  	  	 	22422	  	  	 	X	  	  	 	22425	  	  	 	X	  	  	 	22448	  	  	 	X	  	  	 	22450	  	  	 	X	  	  	 	22459	  	  	 	X	  	  	 	22460	  	  	 	X	  	  	 	22471	  	  	 	X	  	  	 	22476	  	  	 	X	  	  	 	22482	  	  	 	X	  	
22490	  	 	X	  	  	 	22492	  	  	 	X	  	  	 	22494	  	  	 	X	  	  	 	22497	  	  	 	X	  	  	 	22499	  	  	 	X	  	  	 	22519	  	  	 	X	  	  	 	22524	  	  	 	X	  	  	 	22527	  	  	 	X	  	  	 	22536	  	  	 	X	  	  	 	22537	  	  	 	X	  	
22542	  	 	X	  	  	 	22543	  	  	 	X	  	  	 	22545	  	  	 	X	  	  	 	22546	  	  	 	X	  	  	 	22548	  	  	 	X	  	  	 	22550	  	  	 	X	  	  	 	22552	  	  	 	X	  	  	 	22554	  	  	 	X	  	  	 	22561	  	  	 	X	  	  	 	22564	  	  	 	X	  	
22565	  	 	X	  	  	 	22568	  	  	 	X	  	  	 	22570	  	  	 	X	  	  	 	22572	  	  	 	X	  	  	 	22573	  	  	 	X	  	  	 	22577	  	  	 	X	  	  	 	22578	  	  	 	X	  	  	 	22581	  	  	 	X	  	  	 	22582	  	  	 	X	  	  	 	22604	  	  	 	X	  	
22606	  	 	X	  	  	 	22608	  	  	 	X	  	  	 	22609	  	  	 	X	  	  	 	22611	  	  	 	X	  	  	 	22612	  	  	 	X	  	  	 	22614	  	  	 	X	  	  	 	22615	  	  	 	X	  	  	 	22616	  	  	 	X	  	  	 	22618	  	  	 	X	  	  	 	22620	  	  	 	X	  	
22621	  	 	X	  	  	 	22623	  	  	 	X	  	  	 	22625	  	  	 	X	  	  	 	22626	  	  	 	X	  	  	 	22627	  	  	 	X	  	  	 	22632	  	  	 	X	  	  	 	22634	  	  	 	X	  	  	 	22636	  	  	 	X	  	  	 	22639	  	  	 	X	  	  	 	22643	  	  	 	X	  	
22645	  	 	X	  	  	 	22647	  	  	 	X	  	  	 	22664	  	  	 	X	  	  	 	22665	  	  	 	X	  	  	 	22666	  	  	 	X	  	  	 	22667	  	  	 	X	  	  	 	22668	  	  	 	X	  	  	 	22669	  	  	 	X	  	  	 	22670	  	  	 	X	  	  	 	22677	  	  	 	X	  	
22678	  	 	X	  	  	 	22688	  	  	 	X	  	  	 	22693	  	  	 	X	  	  	 	22699	  	  	 	X	  	  	 	22700	  	  	 	X	  	  	 	22701	  	  	 	X	  	  	 	22702	  	  	 	X	  	  	 	22703	  	  	 	X	  	  	 	22705	  	  	 	X	  	  	 	22706	  	  	 	X	  	
22707	  	 	X	  	  	 	22708	  	  	 	X	  	  	 	22709	  	  	 	X	  	  	 	22710	  	  	 	X	  	  	 	22711	  	  	 	X	  	  	 	22713	  	  	 	X	  	  	 	22715	  	  	 	X	  	  	 	22717	  	  	 	X	  	  	 	22718	  	  	 	X	  	  	 	22720	  	  	 	X	  	
22722	  	 	X	  	  	 	22724	  	  	 	X	  	  	 	22725	  	  	 	X	  	  	 	22726	  	  	 	X	  	  	 	22727	  	  	 	X	  	  	 	22750	  	  	 	X	  	  	 	22753	  	  	 	X	  	  	 	22758	  	  	 	X	  	  	 	22764	  	  	 	X	  	  	 	22766	  	  	 	X	  	
22767	  	 	X	  	  	 	22768	  	  	 	X	  	  	 	22769	  	  	 	X	  	  	 	22770	  	  	 	X	  	  	 	22775	  	  	 	X	  	  	 	22776	  	  	 	X	  	  	 	22780	  	  	 	X	  	  	 	22781	  	  	 	X	  	  	 	22803	  	  	 	X	  	  	 	22805	  	  	 	X	  	
22806	  	 	X	  	  	 	22808	  	  	 	X	  	  	 	22811	  	  	 	X	  	  	 	22812	  	  	 	X	  	  	 	22816	  	  	 	X	  	  	 	22830	  	  	 	X	  	  	 	22834	  	  	 	X	  	  	 	22838	  	  	 	X	  	  	 	22839	  	  	 	X	  	  	 	22841	  	  	 	X	  	
22842	  	 	X	  	  	 	22844	  	  	 	X	  	  	 	22846	  	  	 	X	  	  	 	22849	  	  	 	X	  	  	 	22850	  	  	 	X	  	  	 	22853	  	  	 	X	  	  	 	22855	  	  	 	X	  	  	 	22856	  	  	 	X	  	  	 	22881	  	  	 	X	  	  	 	22885	  	  	 	X	  	
22886	  	 	X	  	  	 	22890	  	  	 	X	  	  	 	22891	  	  	 	X	  	  	 	22892	  	  	 	X	  	  	 	22894	  	  	 	X	  	  	 	22895	  	  	 	X	  	  	 	22896	  	  	 	X	  	  	 	22898	  	  	 	X	  	  	 	22900	  	  	 	X	  	  	 	22904	  	  	 	X	  	
22932	  	 	X	  	  	 	22933	  	  	 	X	  	  	 	22935	  	  	 	X	  	  	 	22938	  	  	 	X	  	  	 	22940	  	  	 	X	  	  	 	22941	  	  	 	X	  	  	 	22944	  	  	 	X	  	  	 	22946	  	  	 	X	  	  	 	22948	  	  	 	X	  	  	 	22951	  	  	 	X	  	
20952	  	 	X	  	  	 	22956	  	  	 	X	  	  	 	22958	  	  	 	X	  	  	 	22959	  	  	 	X	  	  	 	22975	  	  	 	X	  	  	 	22987	  	  	 	X	  	  	 	22988	  	  	 	X	  	  	 	22990	  	  	 	X	  	  	 	22991	  	  	 	X	  	  	 	22993	  	  	 	X	  	
22994	  	 	X	  	  	 	22995	  	  	 	X	  	  	 	22997	  	  	 	X	  	  	 	22999	  	  	 	X	  	  	 	23001	  	  	 	X	  	  	 	23002	  	  	 	X	  	  	 	23005	  	  	 	X	  	  	 	23007	  	  	 	X	  	  	 	23010	  	  	 	X	  	  	 	23011	  	  	 	X	  	
23012	  	 	X	  	  	 	23013	  	  	 	X	  	  	 	23014	  	  	 	X	  	  	 	23016	  	  	 	X	  	  	 	23022	  	  	 	X	  	  	 	23024	  	  	 	X	  	  	 	23025	  	  	 	X	  	  	 	23040	  	  	 	X	  	  	 	23042	  	  	 	X	  	  	 	23047	  	  	 	X	  	
23049	  	 	X	  	  	 	23050	  	  	 	X	  	  	 	23051	  	  	 	X	  	  	 	23052	  	  	 	X	  	  	 	23059	  	  	 	X	  	  	 	23061	  	  	 	X	  	  	 	23062	  	  	 	X	  	  	 	23067	  	  	 	X	  	  	 	23070	  	  	 	X	  	  	 	23071	  	  	 	X	  	
23073	  	 	X	  	  	 	23076	  	  	 	X	  	  	 	23077	  	  	 	X	  	  	 	23081	  	  	 	X	  	  	 	23082	  	  	 	X	  	  	 	23084	  	  	 	X	  	  	 	23085	  	  	 	X	  	  	 	23086	  	  	 	X	  	  	 	23088	  	  	 	X	  	  	 	23096	  	  	 	X	  	
23098	  	 	X	  	  	 	23101	  	  	 	X	  	  	 	23102	  	  	 	X	  	  	 	23103	  	  	 	X	  	  	 	23104	  	  	 	X	  	  	 	23112	  	  	 	X	  	  	 	23113	  	  	 	X	  	  	 	23116	  	  	 	X	  	  	 	23119	  	  	 	X	  	  	 	23120	  	  	 	X	  	
23121	  	 	X	  	  	 	23124	  	  	 	X	  	  	 	23125	  	  	 	X	  	  	 	23126	  	  	 	X	  	  	 	23128	  	  	 	X	  	  	 	23129	  	  	 	X	  	  	 	23131	  	  	 	X	  	  	 	23132	  	  	 	X	  	  	 	23139	  	  	 	X	  	  	 	23141	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	3	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

23143	  	 	X	  	  	 	23144	  	  	 	X	  	  	 	23146	  	  	 	X	  	  	 	23147	  	  	 	X	  	  	 	23148	  	  	 	X	  	  	 	23169	  	  	 	X	  	  	 	23174	  	  	 	X	  	  	 	23176	  	  	 	X	  	  	 	23178	  	  	 	X	  	  	 	23184	  	  	 	X	  	
23188	  	 	X	  	  	 	23190	  	  	 	X	  	  	 	23193	  	  	 	X	  	  	 	23197	  	  	 	X	  	  	 	23198	  	  	 	X	  	  	 	23199	  	  	 	X	  	  	 	23202	  	  	 	X	  	  	 	23204	  	  	 	X	  	  	 	23208	  	  	 	X	  	  	 	23209	  	  	 	X	  	
23210	  	 	X	  	  	 	23211	  	  	 	X	  	  	 	23212	  	  	 	X	  	  	 	23213	  	  	 	X	  	  	 	23217	  	  	 	X	  	  	 	23222	  	  	 	X	  	  	 	23227	  	  	 	X	  	  	 	23234	  	  	 	X	  	  	 	23235	  	  	 	X	  	  	 	23237	  	  	 	X	  	
23248	  	 	X	  	  	 	23249	  	  	 	X	  	  	 	23251	  	  	 	X	  	  	 	23252	  	  	 	X	  	  	 	23253	  	  	 	X	  	  	 	23255	  	  	 	X	  	  	 	23256	  	  	 	X	  	  	 	23258	  	  	 	X	  	  	 	23260	  	  	 	X	  	  	 	23262	  	  	 	X	  	
23267	  	 	X	  	  	 	23270	  	  	 	X	  	  	 	23271	  	  	 	X	  	  	 	23273	  	  	 	X	  	  	 	23275	  	  	 	X	  	  	 	23278	  	  	 	X	  	  	 	23279	  	  	 	X	  	  	 	23280	  	  	 	X	  	  	 	23303	  	  	 	X	  	  	 	23307	  	  	 	X	  	
23308	  	 	X	  	  	 	23310	  	  	 	X	  	  	 	23311	  	  	 	X	  	  	 	23315	  	  	 	X	  	  	 	23316	  	  	 	X	  	  	 	23317	  	  	 	X	  	  	 	23320	  	  	 	X	  	  	 	23321	  	  	 	X	  	  	 	23322	  	  	 	X	  	  	 	23323	  	  	 	X	  	
23324	  	 	X	  	  	 	23325	  	  	 	X	  	  	 	23326	  	  	 	X	  	  	 	23329	  	  	 	X	  	  	 	23330	  	  	 	X	  	  	 	23337	  	  	 	X	  	  	 	23342	  	  	 	X	  	  	 	23343	  	  	 	X	  	  	 	23344	  	  	 	X	  	  	 	23353	  	  	 	X	  	
23360	  	 	X	  	  	 	23361	  	  	 	X	  	  	 	23362	  	  	 	X	  	  	 	23365	  	  	 	X	  	  	 	23366	  	  	 	X	  	  	 	23367	  	  	 	X	  	  	 	23368	  	  	 	X	  	  	 	23369	  	  	 	X	  	  	 	23370	  	  	 	X	  	  	 	23371	  	  	 	X	  	
23372	  	 	X	  	  	 	23373	  	  	 	X	  	  	 	23377	  	  	 	X	  	  	 	23382	  	  	 	X	  	  	 	23385	  	  	 	X	  	  	 	23402	  	  	 	X	  	  	 	23406	  	  	 	X	  	  	 	23407	  	  	 	X	  	  	 	23418	  	  	 	X	  	  	 	23420	  	  	 	X	  	
23425	  	 	X	  	  	 	23429	  	  	 	X	  	  	 	23431	  	  	 	X	  	  	 	23434	  	  	 	X	  	  	 	23435	  	  	 	X	  	  	 	23441	  	  	 	X	  	  	 	23452	  	  	 	X	  	  	 	23455	  	  	 	X	  	  	 	23456	  	  	 	X	  	  	 	23459	  	  	 	X	  	
23461	  	 	X	  	  	 	23486	  	  	 	X	  	  	 	23487	  	  	 	X	  	  	 	23489	  	  	 	X	  	  	 	23490	  	  	 	X	  	  	 	23492	  	  	 	X	  	  	 	23493	  	  	 	X	  	  	 	23494	  	  	 	X	  	  	 	23504	  	  	 	X	  	  	 	23507	  	  	 	X	  	
23509	  	 	X	  	  	 	23510	  	  	 	X	  	  	 	23511	  	  	 	X	  	  	 	23515	  	  	 	X	  	  	 	23517	  	  	 	X	  	  	 	23518	  	  	 	X	  	  	 	23519	  	  	 	X	  	  	 	23530	  	  	 	X	  	  	 	23533	  	  	 	X	  	  	 	23535	  	  	 	X	  	
23536	  	 	X	  	  	 	23546	  	  	 	X	  	  	 	23552	  	  	 	X	  	  	 	23553	  	  	 	X	  	  	 	23556	  	  	 	X	  	  	 	23557	  	  	 	X	  	  	 	23558	  	  	 	X	  	  	 	23559	  	  	 	X	  	  	 	23561	  	  	 	X	  	  	 	23562	  	  	 	X	  	
23570	  	 	X	  	  	 	23571	  	  	 	X	  	  	 	23572	  	  	 	X	  	  	 	23573	  	  	 	X	  	  	 	23574	  	  	 	X	  	  	 	23576	  	  	 	X	  	  	 	23577	  	  	 	X	  	  	 	23579	  	  	 	X	  	  	 	23585	  	  	 	X	  	  	 	23593	  	  	 	X	  	
23597	  	 	X	  	  	 	23599	  	  	 	X	  	  	 	23603	  	  	 	X	  	  	 	23604	  	  	 	X	  	  	 	23605	  	  	 	X	  	  	 	23606	  	  	 	X	  	  	 	23607	  	  	 	X	  	  	 	23610	  	  	 	X	  	  	 	23611	  	  	 	X	  	  	 	23613	  	  	 	X	  	
23616	  	 	X	  	  	 	23623	  	  	 	X	  	  	 	23624	  	  	 	X	  	  	 	23639	  	  	 	X	  	  	 	23640	  	  	 	X	  	  	 	23642	  	  	 	X	  	  	 	23643	  	  	 	X	  	  	 	23644	  	  	 	X	  	  	 	23645	  	  	 	X	  	  	 	23647	  	  	 	X	  	
23648	  	 	X	  	  	 	2365l	  	  	 	X	  	  	 	23654	  	  	 	X	  	  	 	23655	  	  	 	X	  	  	 	23656	  	  	 	X	  	  	 	23658	  	  	 	X	  	  	 	23662	  	  	 	X	  	  	 	23667	  	  	 	X	  	  	 	23672	  	  	 	X	  	  	 	23695	  	  	 	X	  	
23698	  	 	X	  	  	 	23699	  	  	 	X	  	  	 	23702	  	  	 	X	  	  	 	23707	  	  	 	X	  	  	 	23708	  	  	 	X	  	  	 	23711	  	  	 	X	  	  	 	23717	  	  	 	X	  	  	 	23718	  	  	 	X	  	  	 	23737	  	  	 	X	  	  	 	23740	  	  	 	X	  	
23742	  	 	X	  	  	 	23744	  	  	 	X	  	  	 	23748	  	  	 	X	  	  	 	23749	  	  	 	X	  	  	 	23751	  	  	 	X	  	  	 	23752	  	  	 	X	  	  	 	23754	  	  	 	X	  	  	 	23756	  	  	 	X	  	  	 	23760	  	  	 	X	  	  	 	23761	  	  	 	X	  	
23765	  	 	X	  	  	 	23766	  	  	 	X	  	  	 	23767	  	  	 	X	  	  	 	23768	  	  	 	X	  	  	 	23769	  	  	 	X	  	  	 	23770	  	  	 	X	  	  	 	23771	  	  	 	X	  	  	 	23772	  	  	 	X	  	  	 	23777	  	  	 	X	  	  	 	23779	  	  	 	X	  	
23788	  	 	X	  	  	 	23795	  	  	 	X	  	  	 	23796	  	  	 	X	  	  	 	23798	  	  	 	X	  	  	 	23799	  	  	 	X	  	  	 	23801	  	  	 	X	  	  	 	23817	  	  	 	X	  	  	 	23824	  	  	 	X	  	  	 	23832	  	  	 	X	  	  	 	23833	  	  	 	X	  	
23836	  	 	X	  	  	 	23839	  	  	 	X	  	  	 	23841	  	  	 	X	  	  	 	23842	  	  	 	X	  	  	 	23846	  	  	 	X	  	  	 	23864	  	  	 	X	  	  	 	23865	  	  	 	X	  	  	 	23867	  	  	 	X	  	  	 	23874	  	  	 	X	  	  	 	23880	  	  	 	X	  	
23901	  	 	X	  	  	 	23902	  	  	 	X	  	  	 	23903	  	  	 	X	  	  	 	23904	  	  	 	X	  	  	 	23905	  	  	 	X	  	  	 	23907	  	  	 	X	  	  	 	23909	  	  	 	X	  	  	 	23910	  	  	 	X	  	  	 	23911	  	  	 	X	  	  	 	23912	  	  	 	X	  	
23914	  	 	X	  	  	 	23916	  	  	 	X	  	  	 	23917	  	  	 	X	  	  	 	23918	  	  	 	X	  	  	 	23920	  	  	 	X	  	  	 	23921	  	  	 	X	  	  	 	23922	  	  	 	X	  	  	 	23923	  	  	 	X	  	  	 	23928	  	  	 	X	  	  	 	23944	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	4	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

23945	  	 	X	  	  	 	23946	  	  	 	X	  	  	 	23948	  	  	 	X	  	  	 	23950	  	  	 	X	  	  	 	23952	  	  	 	X	  	  	 	23953	  	  	 	X	  	  	 	23954	  	  	 	X	  	  	 	23957	  	  	 	X	  	  	 	23958	  	  	 	X	  	  	 	23960	  	  	 	X	  	
23987	  	 	X	  	  	 	23994	  	  	 	X	  	  	 	23995	  	  	 	X	  	  	 	23998	  	  	 	X	  	  	 	23999	  	  	 	X	  	  	 	24001	  	  	 	X	  	  	 	24002	  	  	 	X	  	  	 	24003	  	  	 	X	  	  	 	24007	  	  	 	X	  	  	 	24010	  	  	 	X	  	
24015	  	 	X	  	  	 	24017	  	  	 	X	  	  	 	24018	  	  	 	X	  	  	 	24021	  	  	 	X	  	  	 	24035	  	  	 	X	  	  	 	24037	  	  	 	X	  	  	 	24049	  	  	 	X	  	  	 	24053	  	  	 	X	  	  	 	24056	  	  	 	X	  	  	 	24057	  	  	 	X	  	
24059	  	 	X	  	  	 	24060	  	  	 	X	  	  	 	24062	  	  	 	X	  	  	 	24063	  	  	 	X	  	  	 	24066	  	  	 	X	  	  	 	24070	  	  	 	X	  	  	 	24077	  	  	 	X	  	  	 	24084	  	  	 	X	  	  	 	24086	  	  	 	X	  	  	 	24087	  	  	 	X	  	
24090	  	 	X	  	  	 	24092	  	  	 	X	  	  	 	24093	  	  	 	X	  	  	 	24094	  	  	 	X	  	  	 	24095	  	  	 	X	  	  	 	24096	  	  	 	X	  	  	 	24098	  	  	 	X	  	  	 	24099	  	  	 	X	  	  	 	24101	  	  	 	X	  	  	 	24102	  	  	 	X	  	
24103	  	 	X	  	  	 	24104	  	  	 	X	  	  	 	24105	  	  	 	X	  	  	 	24106	  	  	 	X	  	  	 	24107	  	  	 	X	  	  	 	24108	  	  	 	X	  	  	 	24109	  	  	 	X	  	  	 	24110	  	  	 	X	  	  	 	24111	  	  	 	X	  	  	 	24112	  	  	 	X	  	
24113	  	 	X	  	  	 	24114	  	  	 	X	  	  	 	24115	  	  	 	X	  	  	 	24116	  	  	 	X	  	  	 	24117	  	  	 	X	  	  	 	24118	  	  	 	X	  	  	 	24119	  	  	 	X	  	  	 	24120	  	  	 	X	  	  	 	24121	  	  	 	X	  	  	 	24122	  	  	 	X	  	
24123	  	 	X	  	  	 	24125	  	  	 	X	  	  	 	24126	  	  	 	X	  	  	 	24127	  	  	 	X	  	  	 	24129	  	  	 	X	  	  	 	24132	  	  	 	X	  	  	 	24135	  	  	 	X	  	  	 	24136	  	  	 	X	  	  	 	24139	  	  	 	X	  	  	 	24143	  	  	 	X	  	
24146	  	 	X	  	  	 	24147	  	  	 	X	  	  	 	24148	  	  	 	X	  	  	 	24149	  	  	 	X	  	  	 	24150	  	  	 	X	  	  	 	24153	  	  	 	X	  	  	 	24154	  	  	 	X	  	  	 	24157	  	  	 	X	  	  	 	24168	  	  	 	X	  	  	 	24169	  	  	 	X	  	
24173	  	 	X	  	  	 	24174	  	  	 	X	  	  	 	24177	  	  	 	X	  	  	 	24194	  	  	 	X	  	  	 	24200	  	  	 	X	  	  	 	24201	  	  	 	X	  	  	 	24206	  	  	 	X	  	  	 	24212	  	  	 	X	  	  	 	24215	  	  	 	X	  	  	 	24216	  	  	 	X	  	
24220	  	 	X	  	  	 	24225	  	  	 	X	  	  	 	24226	  	  	 	X	  	  	 	24230	  	  	 	X	  	  	 	24232	  	  	 	X	  	  	 	24234	  	  	 	X	  	  	 	24235	  	  	 	X	  	  	 	24237	  	  	 	X	  	  	 	24252	  	  	 	X	  	  	 	24259	  	  	 	X	  	
24269	  	 	X	  	  	 	24276	  	  	 	X	  	  	 	24282	  	  	 	X	  	  	 	24283	  	  	 	X	  	  	 	24284	  	  	 	X	  	  	 	24285	  	  	 	X	  	  	 	24286	  	  	 	X	  	  	 	24287	  	  	 	X	  	  	 	24291	  	  	 	X	  	  	 	24292	  	  	 	X	  	
24296	  	 	X	  	  	 	24298	  	  	 	X	  	  	 	24299	  	  	 	X	  	  	 	24303	  	  	 	X	  	  	 	24304	  	  	 	X	  	  	 	24305	  	  	 	X	  	  	 	24309	  	  	 	X	  	  	 	24324	  	  	 	X	  	  	 	24332	  	  	 	X	  	  	 	24333	  	  	 	X	  	
24334	  	 	X	  	  	 	24336	  	  	 	X	  	  	 	24337	  	  	 	X	  	  	 	24338	  	  	 	X	  	  	 	24339	  	  	 	X	  	  	 	24341	  	  	 	X	  	  	 	24342	  	  	 	X	  	  	 	24343	  	  	 	X	  	  	 	24346	  	  	 	X	  	  	 	24351	  	  	 	X	  	
24356	  	 	X	  	  	 	24358	  	  	 	X	  	  	 	24360	  	  	 	X	  	  	 	24361	  	  	 	X	  	  	 	24371	  	  	 	X	  	  	 	24373	  	  	 	X	  	  	 	24378	  	  	 	X	  	  	 	24379	  	  	 	X	  	  	 	24381	  	  	 	X	  	  	 	24383	  	  	 	X	  	
24384	  	 	X	  	  	 	24389	  	  	 	X	  	  	 	24390	  	  	 	X	  	  	 	24416	  	  	 	X	  	  	 	24418	  	  	 	X	  	  	 	24422	  	  	 	X	  	  	 	24427	  	  	 	X	  	  	 	24428	  	  	 	X	  	  	 	24435	  	  	 	X	  	  	 	24436	  	  	 	X	  	
24437	  	 	X	  	  	 	24438	  	  	 	X	  	  	 	24439	  	  	 	X	  	  	 	24441	  	  	 	X	  	  	 	24445	  	  	 	X	  	  	 	24447	  	  	 	X	  	  	 	24449	  	  	 	X	  	  	 	24450	  	  	 	X	  	  	 	24452	  	  	 	X	  	  	 	24454	  	  	 	X	  	
24455	  	 	X	  	  	 	24457	  	  	 	X	  	  	 	24460	  	  	 	X	  	  	 	24481	  	  	 	X	  	  	 	24483	  	  	 	X	  	  	 	24489	  	  	 	X	  	  	 	24490	  	  	 	X	  	  	 	24491	  	  	 	X	  	  	 	24492	  	  	 	X	  	  	 	24493	  	  	 	X	  	
24494	  	 	X	  	  	 	24497	  	  	 	X	  	  	 	24498	  	  	 	X	  	  	 	24500	  	  	 	X	  	  	 	24503	  	  	 	X	  	  	 	24510	  	  	 	X	  	  	 	24511	  	  	 	X	  	  	 	24521	  	  	 	X	  	  	 	24522	  	  	 	X	  	  	 	24523	  	  	 	X	  	
24524	  	 	X	  	  	 	24525	  	  	 	X	  	  	 	24528	  	  	 	X	  	  	 	24529	  	  	 	X	  	  	 	24534	  	  	 	X	  	  	 	24536	  	  	 	X	  	  	 	24537	  	  	 	X	  	  	 	24538	  	  	 	X	  	  	 	24539	  	  	 	X	  	  	 	24542	  	  	 	X	  	
24543	  	 	X	  	  	 	24545	  	  	 	X	  	  	 	24546	  	  	 	X	  	  	 	24547	  	  	 	X	  	  	 	24552	  	  	 	X	  	  	 	24553	  	  	 	X	  	  	 	24556	  	  	 	X	  	  	 	24557	  	  	 	X	  	  	 	24561	  	  	 	X	  	  	 	24562	  	  	 	X	  	
24563	  	 	X	  	  	 	24564	  	  	 	X	  	  	 	24565	  	  	 	X	  	  	 	24568	  	  	 	X	  	  	 	24580	  	  	 	X	  	  	 	24585	  	  	 	X	  	  	 	24586	  	  	 	X	  	  	 	24587	  	  	 	X	  	  	 	24588	  	  	 	X	  	  	 	24589	  	  	 	X	  	
24591	  	 	X	  	  	 	24594	  	  	 	X	  	  	 	24596	  	  	 	X	  	  	 	24599	  	  	 	X	  	  	 	24600	  	  	 	X	  	  	 	24601	  	  	 	X	  	  	 	24602	  	  	 	X	  	  	 	24603	  	  	 	X	  	  	 	24605	  	  	 	X	  	  	 	24606	  	  	 	X	  	
24611	  	 	X	  	  	 	24612	  	  	 	X	  	  	 	24613	  	  	 	X	  	  	 	24614	  	  	 	X	  	  	 	24618	  	  	 	X	  	  	 	24621	  	  	 	X	  	  	 	24623	  	  	 	X	  	  	 	24630	  	  	 	X	  	  	 	24642	  	  	 	X	  	  	 	24643	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	5	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

24644	  	 	X	  	  	 	24645	  	  	 	X	  	  	 	24647	  	  	 	X	  	  	 	24648	  	  	 	X	  	  	 	24649	  	  	 	X	  	  	 	24650	  	  	 	X	  	  	 	24652	  	  	 	X	  	  	 	24653	  	  	 	X	  	  	 	24655	  	  	 	X	  	  	 	24656	  	  	 	X	  	
24657	  	 	X	  	  	 	24659	  	  	 	X	  	  	 	24660	  	  	 	X	  	  	 	24662	  	  	 	X	  	  	 	24671	  	  	 	X	  	  	 	24673	  	  	 	X	  	  	 	24674	  	  	 	X	  	  	 	24675	  	  	 	X	  	  	 	24692	  	  	 	X	  	  	 	24707	  	  	 	X	  	
24709	  	 	X	  	  	 	24716	  	  	 	X	  	  	 	24730	  	  	 	X	  	  	 	24732	  	  	 	X	  	  	 	24733	  	  	 	X	  	  	 	24734	  	  	 	X	  	  	 	24736	  	  	 	X	  	  	 	24739	  	  	 	X	  	  	 	24740	  	  	 	X	  	  	 	24745	  	  	 	X	  	
24747	  	 	X	  	  	 	24748	  	  	 	X	  	  	 	24750	  	  	 	X	  	  	 	24754	  	  	 	X	  	  	 	24755	  	  	 	X	  	  	 	24757	  	  	 	X	  	  	 	24761	  	  	 	X	  	  	 	24771	  	  	 	X	  	  	 	24778	  	  	 	X	  	  	 	24779	  	  	 	X	  	
24780	  	 	X	  	  	 	24781	  	  	 	X	  	  	 	24782	  	  	 	X	  	  	 	24784	  	  	 	X	  	  	 	24786	  	  	 	X	  	  	 	24791	  	  	 	X	  	  	 	24792	  	  	 	X	  	  	 	24794	  	  	 	X	  	  	 	24796	  	  	 	X	  	  	 	24801	  	  	 	X	  	
24803	  	 	X	  	  	 	24804	  	  	 	X	  	  	 	24805	  	  	 	X	  	  	 	24807	  	  	 	X	  	  	 	24809	  	  	 	X	  	  	 	24810	  	  	 	X	  	  	 	24815	  	  	 	X	  	  	 	24816	  	  	 	X	  	  	 	24841	  	  	 	X	  	  	 	24842	  	  	 	X	  	
24843	  	 	X	  	  	 	24844	  	  	 	X	  	  	 	24846	  	  	 	X	  	  	 	24850	  	  	 	X	  	  	 	24851	  	  	 	X	  	  	 	24852	  	  	 	X	  	  	 	24853	  	  	 	X	  	  	 	24854	  	  	 	X	  	  	 	24855	  	  	 	X	  	  	 	24856	  	  	 	X	  	
24857	  	 	X	  	  	 	24858	  	  	 	X	  	  	 	24859	  	  	 	X	  	  	 	24860	  	  	 	X	  	  	 	24863	  	  	 	X	  	  	 	24866	  	  	 	X	  	  	 	24869	  	  	 	X	  	  	 	24871	  	  	 	X	  	  	 	24872	  	  	 	X	  	  	 	24873	  	  	 	X	  	
24874	  	 	X	  	  	 	24876	  	  	 	X	  	  	 	24877	  	  	 	X	  	  	 	24903	  	  	 	X	  	  	 	24904	  	  	 	X	  	  	 	24905	  	  	 	X	  	  	 	24910	  	  	 	X	  	  	 	24911	  	  	 	X	  	  	 	24914	  	  	 	X	  	  	 	24917	  	  	 	X	  	
24918	  	 	X	  	  	 	24919	  	  	 	X	  	  	 	24942	  	  	 	X	  	  	 	24943	  	  	 	X	  	  	 	24945	  	  	 	X	  	  	 	24948	  	  	 	X	  	  	 	24952	  	  	 	X	  	  	 	24960	  	  	 	X	  	  	 	24961	  	  	 	X	  	  	 	24962	  	  	 	X	  	
24965	  	 	X	  	  	 	24967	  	  	 	X	  	  	 	24970	  	  	 	X	  	  	 	24971	  	  	 	X	  	  	 	24972	  	  	 	X	  	  	 	24974	  	  	 	X	  	  	 	24975	  	  	 	X	  	  	 	24976	  	  	 	X	  	  	 	24978	  	  	 	X	  	  	 	24980	  	  	 	X	  	
24985	  	 	X	  	  	 	24986	  	  	 	X	  	  	 	24987	  	  	 	X	  	  	 	24990	  	  	 	X	  	  	 	24991	  	  	 	X	  	  	 	24992	  	  	 	X	  	  	 	24997	  	  	 	X	  	  	 	25020	  	  	 	X	  	  	 	25021	  	  	 	X	  	  	 	25022	  	  	 	X	  	
25025	  	 	X	  	  	 	25026	  	  	 	X	  	  	 	25027	  	  	 	X	  	  	 	25028	  	  	 	X	  	  	 	25030	  	  	 	X	  	  	 	25032	  	  	 	X	  	  	 	25033	  	  	 	X	  	  	 	25035	  	  	 	X	  	  	 	25037	  	  	 	X	  	  	 	25038	  	  	 	X	  	
25039	  	 	X	  	  	 	25041	  	  	 	X	  	  	 	25042	  	  	 	X	  	  	 	25044	  	  	 	X	  	  	 	25049	  	  	 	X	  	  	 	25050	  	  	 	X	  	  	 	25051	  	  	 	X	  	  	 	25054	  	  	 	X	  	  	 	25058	  	  	 	X	  	  	 	25059	  	  	 	X	  	
25066	  	 	X	  	  	 	25084	  	  	 	X	  	  	 	25093	  	  	 	X	  	  	 	25096	  	  	 	X	  	  	 	25098	  	  	 	X	  	  	 	25100	  	  	 	X	  	  	 	25110	  	  	 	X	  	  	 	25121	  	  	 	X	  	  	 	25123	  	  	 	X	  	  	 	25126	  	  	 	X	  	
25130	  	 	X	  	  	 	25132	  	  	 	X	  	  	 	25137	  	  	 	X	  	  	 	25140	  	  	 	X	  	  	 	25141	  	  	 	X	  	  	 	25142	  	  	 	X	  	  	 	25143	  	  	 	X	  	  	 	25145	  	  	 	X	  	  	 	25147	  	  	 	X	  	  	 	25149	  	  	 	X	  	
25152	  	 	X	  	  	 	25156	  	  	 	X	  	  	 	25157	  	  	 	X	  	  	 	25158	  	  	 	X	  	  	 	25159	  	  	 	X	  	  	 	25160	  	  	 	X	  	  	 	25182	  	  	 	X	  	  	 	25184	  	  	 	X	  	  	 	25185	  	  	 	X	  	  	 	25186	  	  	 	X	  	
25187	  	 	X	  	  	 	25188	  	  	 	X	  	  	 	25190	  	  	 	X	  	  	 	25192	  	  	 	X	  	  	 	25195	  	  	 	X	  	  	 	25196	  	  	 	X	  	  	 	25200	  	  	 	X	  	  	 	25209	  	  	 	X	  	  	 	25210	  	  	 	X	  	  	 	25221	  	  	 	X	  	
25222	  	 	X	  	  	 	25223	  	  	 	X	  	  	 	25224	  	  	 	X	  	  	 	25226	  	  	 	X	  	  	 	25227	  	  	 	X	  	  	 	25228	  	  	 	X	  	  	 	25229	  	  	 	X	  	  	 	25230	  	  	 	X	  	  	 	25232	  	  	 	X	  	  	 	25234	  	  	 	X	  	
25241	  	 	X	  	  	 	25242	  	  	 	X	  	  	 	25252	  	  	 	X	  	  	 	25253	  	  	 	X	  	  	 	25255	  	  	 	X	  	  	 	25256	  	  	 	X	  	  	 	25258	  	  	 	X	  	  	 	25261	  	  	 	X	  	  	 	25265	  	  	 	X	  	  	 	25268	  	  	 	X	  	
25271	  	 	X	  	  	 	25274	  	  	 	X	  	  	 	25277	  	  	 	X	  	  	 	25280	  	  	 	X	  	  	 	25285	  	  	 	X	  	  	 	25293	  	  	 	X	  	  	 	25294	  	  	 	X	  	  	 	25295	  	  	 	X	  	  	 	25296	  	  	 	X	  	  	 	25302	  	  	 	X	  	
25304	  	 	X	  	  	 	25318	  	  	 	X	  	  	 	25320	  	  	 	X	  	  	 	25331	  	  	 	X	  	  	 	25332	  	  	 	X	  	  	 	25335	  	  	 	X	  	  	 	25336	  	  	 	X	  	  	 	25337	  	  	 	X	  	  	 	25339	  	  	 	X	  	  	 	25343	  	  	 	X	  	
25344	  	 	X	  	  	 	25345	  	  	 	X	  	  	 	25347	  	  	 	X	  	  	 	25349	  	  	 	X	  	  	 	25351	  	  	 	X	  	  	 	25352	  	  	 	X	  	  	 	25356	  	  	 	X	  	  	 	25357	  	  	 	X	  	  	 	25358	  	  	 	X	  	  	 	25360	  	  	 	X	  	
25361	  	 	X	  	  	 	25363	  	  	 	X	  	  	 	25364	  	  	 	X	  	  	 	25365	  	  	 	X	  	  	 	25370	  	  	 	X	  	  	 	25371	  	  	 	X	  	  	 	25372	  	  	 	X	  	  	 	25373	  	  	 	X	  	  	 	25376	  	  	 	X	  	  	 	25377	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	6	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

25378	  	 	X	  	  	 	25380	  	  	 	X	  	  	 	25381	  	  	 	X	  	  	 	25402	  	  	 	X	  	  	 	25404	  	  	 	X	  	  	 	25406	  	  	 	X	  	  	 	25407	  	  	 	X	  	  	 	25409	  	  	 	X	  	  	 	25410	  	  	 	X	  	  	 	25412	  	  	 	X	  	
25413	  	 	X	  	  	 	25414	  	  	 	X	  	  	 	25418	  	  	 	X	  	  	 	25419	  	  	 	X	  	  	 	25440	  	  	 	X	  	  	 	25451	  	  	 	X	  	  	 	25455	  	  	 	X	  	  	 	25456	  	  	 	X	  	  	 	25461	  	  	 	X	  	  	 	25462	  	  	 	X	  	
25463	  	 	X	  	  	 	25464	  	  	 	X	  	  	 	25470	  	  	 	X	  	  	 	25481	  	  	 	X	  	  	 	25482	  	  	 	X	  	  	 	25484	  	  	 	X	  	  	 	25485	  	  	 	X	  	  	 	25486	  	  	 	X	  	  	 	25487	  	  	 	X	  	  	 	25489	  	  	 	X	  	
25492	  	 	X	  	  	 	25503	  	  	 	X	  	  	 	25505	  	  	 	X	  	  	 	25506	  	  	 	X	  	  	 	25507	  	  	 	X	  	  	 	25509	  	  	 	X	  	  	 	25510	  	  	 	X	  	  	 	25511	  	  	 	X	  	  	 	25513	  	  	 	X	  	  	 	25514	  	  	 	X	  	
25515	  	 	X	  	  	 	25518	  	  	 	X	  	  	 	25520	  	  	 	X	  	  	 	25531	  	  	 	X	  	  	 	25533	  	  	 	X	  	  	 	25536	  	  	 	X	  	  	 	25537	  	  	 	X	  	  	 	25560	  	  	 	X	  	  	 	25563	  	  	 	X	  	  	 	25565	  	  	 	X	  	
25566	  	 	X	  	  	 	25567	  	  	 	X	  	  	 	25570	  	  	 	X	  	  	 	25577	  	  	 	X	  	  	 	25578	  	  	 	X	  	  	 	25581	  	  	 	X	  	  	 	25582	  	  	 	X	  	  	 	25583	  	  	 	X	  	  	 	25586	  	  	 	X	  	  	 	25587	  	  	 	X	  	
25589	  	 	X	  	  	 	25590	  	  	 	X	  	  	 	25591	  	  	 	X	  	  	 	25593	  	  	 	X	  	  	 	25594	  	  	 	X	  	  	 	25595	  	  	 	X	  	  	 	25596	  	  	 	X	  	  	 	25599	  	  	 	X	  	  	 	25600	  	  	 	X	  	  	 	25602	  	  	 	X	  	
25615	  	 	X	  	  	 	25618	  	  	 	X	  	  	 	2563l	  	  	 	X	  	  	 	25633	  	  	 	X	  	  	 	25638	  	  	 	X	  	  	 	25639	  	  	 	X	  	  	 	25673	  	  	 	X	  	  	 	25674	  	  	 	X	  	  	 	25675	  	  	 	X	  	  	 	25682	  	  	 	X	  	
25683	  	 	X	  	  	 	25685	  	  	 	X	  	  	 	25686	  	  	 	X	  	  	 	25687	  	  	 	X	  	  	 	25690	  	  	 	X	  	  	 	25691	  	  	 	X	  	  	 	25693	  	  	 	X	  	  	 	25694	  	  	 	X	  	  	 	25695	  	  	 	X	  	  	 	25697	  	  	 	X	  	
25699	  	 	X	  	  	 	25709	  	  	 	X	  	  	 	25715	  	  	 	X	  	  	 	25717	  	  	 	X	  	  	 	25722	  	  	 	X	  	  	 	25728	  	  	 	X	  	  	 	25730	  	  	 	X	  	  	 	25752	  	  	 	X	  	  	 	25753	  	  	 	X	  	  	 	25762	  	  	 	X	  	
25763	  	 	X	  	  	 	25764	  	  	 	X	  	  	 	25766	  	  	 	X	  	  	 	25768	  	  	 	X	  	  	 	25771	  	  	 	X	  	  	 	25772	  	  	 	X	  	  	 	25773	  	  	 	X	  	  	 	25779	  	  	 	X	  	  	 	25791	  	  	 	X	  	  	 	25796	  	  	 	X	  	
25799	  	 	X	  	  	 	25810	  	  	 	X	  	  	 	25843	  	  	 	X	  	  	 	25844	  	  	 	X	  	  	 	25846	  	  	 	X	  	  	 	25847	  	  	 	X	  	  	 	25850	  	  	 	X	  	  	 	25861	  	  	 	X	  	  	 	25863	  	  	 	X	  	  	 	25872	  	  	 	X	  	
25873	  	 	X	  	  	 	25874	  	  	 	X	  	  	 	25875	  	  	 	X	  	  	 	25877	  	  	 	X	  	  	 	25878	  	  	 	X	  	  	 	25879	  	  	 	X	  	  	 	25880	  	  	 	X	  	  	 	25881	  	  	 	X	  	  	 	25882	  	  	 	X	  	  	 	25885	  	  	 	X	  	
25886	  	 	X	  	  	 	25888	  	  	 	X	  	  	 	25889	  	  	 	X	  	  	 	25890	  	  	 	X	  	  	 	25891	  	  	 	X	  	  	 	25892	  	  	 	X	  	  	 	25894	  	  	 	X	  	  	 	25895	  	  	 	X	  	  	 	25896	  	  	 	X	  	  	 	25897	  	  	 	X	  	
25899	  	 	X	  	  	 	25900	  	  	 	X	  	  	 	25902	  	  	 	X	  	  	 	25985	  	  	 	X	  	  	 	25986	  	  	 	X	  	  	 	25990	  	  	 	X	  	  	 	25992	  	  	 	X	  	  	 	25994	  	  	 	X	  	  	 	25995	  	  	 	X	  	  	 	25996	  	  	 	X	  	
25997	  	 	X	  	  	 	25998	  	  	 	X	  	  	 	25999	  	  	 	X	  	  	 	26000	  	  	 	X	  	  	 	26001	  	  	 	X	  	  	 	26002	  	  	 	X	  	  	 	26003	  	  	 	X	  	  	 	26007	  	  	 	X	  	  	 	26008	  	  	 	X	  	  	 	26012	  	  	 	X	  	
26014	  	 	X	  	  	 	26015	  	  	 	X	  	  	 	26017	  	  	 	X	  	  	 	26018	  	  	 	X	  	  	 	26019	  	  	 	X	  	  	 	26020	  	  	 	X	  	  	 	26040	  	  	 	X	  	  	 	26052	  	  	 	X	  	  	 	26061	  	  	 	X	  	  	 	26064	  	  	 	X	  	
26065	  	 	X	  	  	 	26068	  	  	 	X	  	  	 	26069	  	  	 	X	  	  	 	26078	  	  	 	X	  	  	 	26083	  	  	 	X	  	  	 	26087	  	  	 	X	  	  	 	26088	  	  	 	X	  	  	 	26094	  	  	 	X	  	  	 	26096	  	  	 	X	  	  	 	26097	  	  	 	X	  	
26100	  	 	X	  	  	 	26101	  	  	 	X	  	  	 	26102	  	  	 	X	  	  	 	26106	  	  	 	X	  	  	 	26107	  	  	 	X	  	  	 	26108	  	  	 	X	  	  	 	26109	  	  	 	X	  	  	 	26115	  	  	 	X	  	  	 	26117	  	  	 	X	  	  	 	26132	  	  	 	X	  	
26137	  	 	X	  	  	 	26140	  	  	 	X	  	  	 	26141	  	  	 	X	  	  	 	26144	  	  	 	X	  	  	 	26145	  	  	 	X	  	  	 	26146	  	  	 	X	  	  	 	26147	  	  	 	X	  	  	 	26148	  	  	 	X	  	  	 	26149	  	  	 	X	  	  	 	26150	  	  	 	X	  	
26157	  	 	X	  	  	 	26158	  	  	 	X	  	  	 	26159	  	  	 	X	  	  	 	26160	  	  	 	X	  	  	 	26168	  	  	 	X	  	  	 	26169	  	  	 	X	  	  	 	26172	  	  	 	X	  	  	 	26173	  	  	 	X	  	  	 	26175	  	  	 	X	  	  	 	26177	  	  	 	X	  	
26178	  	 	X	  	  	 	26202	  	  	 	X	  	  	 	26203	  	  	 	X	  	  	 	26212	  	  	 	X	  	  	 	26213	  	  	 	X	  	  	 	26214	  	  	 	X	  	  	 	26217	  	  	 	X	  	  	 	26218	  	  	 	X	  	  	 	26219	  	  	 	X	  	  	 	26221	  	  	 	X	  	
26225	  	 	X	  	  	 	26227	  	  	 	X	  	  	 	26228	  	  	 	X	  	  	 	26229	  	  	 	X	  	  	 	26230	  	  	 	X	  	  	 	26241	  	  	 	X	  	  	 	26242	  	  	 	X	  	  	 	26243	  	  	 	X	  	  	 	26245	  	  	 	X	  	  	 	26249	  	  	 	X	  	
26250	  	 	X	  	  	 	26275	  	  	 	X	  	  	 	26281	  	  	 	X	  	  	 	26282	  	  	 	X	  	  	 	26283	  	  	 	X	  	  	 	26284	  	  	 	X	  	  	 	26286	  	  	 	X	  	  	 	26288	  	  	 	X	  	  	 	26291	  	  	 	X	  	  	 	26292	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	7	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

26293	  	 	X	  	  	 	26294	  	  	 	X	  	  	 	26295	  	  	 	X	  	  	 	26299	  	  	 	X	  	  	 	26312	  	  	 	X	  	  	 	26313	  	  	 	X	  	  	 	26314	  	  	 	X	  	  	 	26319	  	  	 	X	  	  	 	26320	  	  	 	X	  	  	 	26321	  	  	 	X	  	
26322	  	 	X	  	  	 	26324	  	  	 	X	  	  	 	26325	  	  	 	X	  	  	 	26326	  	  	 	X	  	  	 	26327	  	  	 	X	  	  	 	26333	  	  	 	X	  	  	 	26336	  	  	 	X	  	  	 	26350	  	  	 	X	  	  	 	26352	  	  	 	X	  	  	 	26353	  	  	 	X	  	
26354	  	 	X	  	  	 	26355	  	  	 	X	  	  	 	26356	  	  	 	X	  	  	 	26358	  	  	 	X	  	  	 	26360	  	  	 	X	  	  	 	26361	  	  	 	X	  	  	 	26362	  	  	 	X	  	  	 	26363	  	  	 	X	  	  	 	26364	  	  	 	X	  	  	 	26365	  	  	 	X	  	
26377	  	 	X	  	  	 	26383	  	  	 	X	  	  	 	26398	  	  	 	X	  	  	 	26399	  	  	 	X	  	  	 	26403	  	  	 	X	  	  	 	26404	  	  	 	X	  	  	 	26405	  	  	 	X	  	  	 	26406	  	  	 	X	  	  	 	26407	  	  	 	X	  	  	 	26408	  	  	 	X	  	
26409	  	 	X	  	  	 	26441	  	  	 	X	  	  	 	26442	  	  	 	X	  	  	 	26443	  	  	 	X	  	  	 	26444	  	  	 	X	  	  	 	26488	  	  	 	X	  	  	 	26489	  	  	 	X	  	  	 	26492	  	  	 	X	  	  	 	26493	  	  	 	X	  	  	 	26494	  	  	 	X	  	
26495	  	 	X	  	  	 	26496	  	  	 	X	  	  	 	26497	  	  	 	X	  	  	 	26499	  	  	 	X	  	  	 	26500	  	  	 	X	  	  	 	26502	  	  	 	X	  	  	 	26503	  	  	 	X	  	  	 	26506	  	  	 	X	  	  	 	26526	  	  	 	X	  	  	 	26527	  	  	 	X	  	
26528	  	 	X	  	  	 	26540	  	  	 	X	  	  	 	26541	  	  	 	X	  	  	 	26542	  	  	 	X	  	  	 	26543	  	  	 	X	  	  	 	26544	  	  	 	X	  	  	 	26546	  	  	 	X	  	  	 	26547	  	  	 	X	  	  	 	26549	  	  	 	X	  	  	 	26550	  	  	 	X	  	
26560	  	 	X	  	  	 	26561	  	  	 	X	  	  	 	26562	  	  	 	X	  	  	 	26563	  	  	 	X	  	  	 	26564	  	  	 	X	  	  	 	26565	  	  	 	X	  	  	 	26566	  	  	 	X	  	  	 	26567	  	  	 	X	  	  	 	26569	  	  	 	X	  	  	 	26570	  	  	 	X	  	
26571	  	 	X	  	  	 	26572	  	  	 	X	  	  	 	26573	  	  	 	X	  	  	 	26574	  	  	 	X	  	  	 	26576	  	  	 	X	  	  	 	26578	  	  	 	X	  	  	 	26580	  	  	 	X	  	  	 	26601	  	  	 	X	  	  	 	26602	  	  	 	X	  	  	 	26606	  	  	 	X	  	
266.07	  	 	X	  	  	 	26608	  	  	 	X	  	  	 	26643	  	  	 	X	  	  	 	26644	  	  	 	X	  	  	 	26645	  	  	 	X	  	  	 	26647	  	  	 	X	  	  	 	26648	  	  	 	X	  	  	 	26649	  	  	 	X	  	  	 	26650	  	  	 	X	  	  	 	26680	  	  	 	X	  	
26701	  	 	X	  	  	 	26711	  	  	 	X	  	  	 	26712	  	  	 	X	  	  	 	26713	  	  	 	X	  	  	 	26714	  	  	 	X	  	  	 	26715	  	  	 	X	  	  	 	26717	  	  	 	X	  	  	 	26718	  	  	 	X	  	  	 	26720	  	  	 	X	  	  	 	26722	  	  	 	X	  	
26724	  	 	X	  	  	 	26725	  	  	 	X	  	  	 	26726	  	  	 	X	  	  	 	26727	  	  	 	X	  	  	 	26728	  	  	 	X	  	  	 	26729	  	  	 	X	  	  	 	26730	  	  	 	X	  	  	 	26731	  	  	 	X	  	  	 	26738	  	  	 	X	  	  	 	26739	  	  	 	X	  	
26740	  	 	X	  	  	 	26781	  	  	 	X	  	  	 	26783	  	  	 	X	  	  	 	26784	  	  	 	X	  	  	 	26785	  	  	 	X	  	  	 	26788	  	  	 	X	  	  	 	26790	  	  	 	X	  	  	 	26791	  	  	 	X	  	  	 	26792	  	  	 	X	  	  	 	26793	  	  	 	X	  	
26795	  	 	X	  	  	 	26796	  	  	 	X	  	  	 	26798	  	  	 	X	  	  	 	26803	  	  	 	X	  	  	 	26806	  	  	 	X	  	  	 	26808	  	  	 	X	  	  	 	26809	  	  	 	X	  	  	 	26831	  	  	 	X	  	  	 	26836	  	  	 	X	  	  	 	26839	  	  	 	X	  	
26878	  	 	X	  	  	 	26900	  	  	 	X	  	  	 	26902	  	  	 	X	  	  	 	26903	  	  	 	X	  	  	 	26906	  	  	 	X	  	  	 	26907	  	  	 	X	  	  	 	26908	  	  	 	X	  	  	 	26910	  	  	 	X	  	  	 	26912	  	  	 	X	  	  	 	26914	  	  	 	X	  	
26920	  	 	X	  	  	 	26921	  	  	 	X	  	  	 	26922	  	  	 	X	  	  	 	26924	  	  	 	X	  	  	 	26925	  	  	 	X	  	  	 	26926	  	  	 	X	  	  	 	26927	  	  	 	X	  	  	 	26929	  	  	 	X	  	  	 	26935	  	  	 	X	  	  	 	26962	  	  	 	X	  	
26963	  	 	X	  	  	 	26965	  	  	 	X	  	  	 	26967	  	  	 	X	  	  	 	26969	  	  	 	X	  	  	 	26976	  	  	 	X	  	  	 	26999	  	  	 	X	  	  	 	27014	  	  	 	X	  	  	 	27015	  	  	 	X	  	  	 	27016	  	  	 	X	  	  	 	27020	  	  	 	X	  	
27034	  	 	X	  	  	 	27035	  	  	 	X	  	  	 	27038	  	  	 	X	  	  	 	27040	  	  	 	X	  	  	 	27057	  	  	 	X	  	  	 	27061	  	  	 	X	  	  	 	27071	  	  	 	X	  	  	 	27072	  	  	 	X	  	  	 	27075	  	  	 	X	  	  	 	27077	  	  	 	X	  	
27078	  	 	X	  	  	 	27079	  	  	 	X	  	  	 	27081	  	  	 	X	  	  	 	27082	  	  	 	X	  	  	 	27085	  	  	 	X	  	  	 	27087	  	  	 	X	  	  	 	27088	  	  	 	X	  	  	 	27104	  	  	 	X	  	  	 	27106	  	  	 	X	  	  	 	27111	  	  	 	X	  	
27112	  	 	X	  	  	 	27128	  	  	 	X	  	  	 	27131	  	  	 	X	  	  	 	27132	  	  	 	X	  	  	 	27134	  	  	 	X	  	  	 	27135	  	  	 	X	  	  	 	27136	  	  	 	X	  	  	 	27138	  	  	 	X	  	  	 	27139	  	  	 	X	  	  	 	27140	  	  	 	X	  	
27141	  	 	X	  	  	 	27142	  	  	 	X	  	  	 	27144	  	  	 	X	  	  	 	27150	  	  	 	X	  	  	 	27152	  	  	 	X	  	  	 	27153	  	  	 	X	  	  	 	27157	  	  	 	X	  	  	 	27158	  	  	 	X	  	  	 	27159	  	  	 	X	  	  	 	27160	  	  	 	X	  	
27170	  	 	X	  	  	 	27214	  	  	 	X	  	  	 	27215	  	  	 	X	  	  	 	27256	  	  	 	X	  	  	 	27257	  	  	 	X	  	  	 	27258	  	  	 	X	  	  	 	27259	  	  	 	X	  	  	 	27263	  	  	 	X	  	  	 	27273	  	  	 	X	  	  	 	27275	  	  	 	X	  	
27276	  	 	X	  	  	 	27278	  	  	 	X	  	  	 	27279	  	  	 	X	  	  	 	27280	  	  	 	X	  	  	 	27283	  	  	 	X	  	  	 	27285	  	  	 	X	  	  	 	27287	  	  	 	X	  	  	 	27293	  	  	 	X	  	  	 	27294	  	  	 	X	  	  	 	27296	  	  	 	X	  	
97799	  	 	X	  	  	 	27300	  	  	 	X	  	  	 	27320	  	  	 	X	  	  	 	27328	  	  	 	X	  	  	 	27330	  	  	 	X	  	  	 	27403	  	  	 	X	  	  	 	27461	  	  	 	X	  	  	 	27464	  	  	 	X	  	  	 	27465	  	  	 	X	  	  	 	27467	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	8	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

27474	  	 	X	  	  	 	27477	  	  	 	X	  	  	 	27484	  	  	 	X	  	  	 	27487	  	  	 	X	  	  	 	27488	  	  	 	X	  	  	 	27489	  	  	 	X	  	  	 	27490	  	  	 	X	  	  	 	27491	  	  	 	X	  	  	 	27492	  	  	 	X	  	  	 	27493	  	  	 	X	  	
27494	  	 	X	  	  	 	27495	  	  	 	X	  	  	 	27496	  	  	 	X	  	  	 	27497	  	  	 	X	  	  	 	27498	  	  	 	X	  	  	 	27499	  	  	 	X	  	  	 	27502	  	  	 	X	  	  	 	27504	  	  	 	X	  	  	 	27506	  	  	 	X	  	  	 	27507	  	  	 	X	  	
27508	  	 	X	  	  	 	27510	  	  	 	X	  	  	 	27518	  	  	 	X	  	  	 	27522	  	  	 	X	  	  	 	27562	  	  	 	X	  	  	 	27563	  	  	 	X	  	  	 	27564	  	  	 	X	  	  	 	27565	  	  	 	X	  	  	 	27566	  	  	 	X	  	  	 	27568	  	  	 	X	  	
27569	  	 	X	  	  	 	27571	  	  	 	X	  	  	 	27572	  	  	 	X	  	  	 	27576	  	  	 	X	  	  	 	27579	  	  	 	X	  	  	 	27580	  	  	 	X	  	  	 	27583	  	  	 	X	  	  	 	27584	  	  	 	X	  	  	 	27585	  	  	 	X	  	  	 	27586	  	  	 	X	  	
27587	  	 	X	  	  	 	27589	  	  	 	X	  	  	 	27590	  	  	 	X	  	  	 	27620	  	  	 	X	  	  	 	27626	  	  	 	X	  	  	 	27627	  	  	 	X	  	  	 	27630	  	  	 	X	  	  	 	27698	  	  	 	X	  	  	 	27711	  	  	 	X	  	  	 	27713	  	  	 	X	  	
27714	  	 	X	  	  	 	27715	  	  	 	X	  	  	 	27716	  	  	 	X	  	  	 	27718	  	  	 	X	  	  	 	27723	  	  	 	X	  	  	 	27724	  	  	 	X	  	  	 	27729	  	  	 	X	  	  	 	27730	  	  	 	X	  	  	 	27752	  	  	 	X	  	  	 	27771	  	  	 	X	  	
27773	  	 	X	  	  	 	27774	  	  	 	X	  	  	 	27777	  	  	 	X	  	  	 	27778	  	  	 	X	  	  	 	27786	  	  	 	X	  	  	 	27831	  	  	 	X	  	  	 	27833	  	  	 	X	  	  	 	27836	  	  	 	X	  	  	 	27837	  	  	 	X	  	  	 	27839	  	  	 	X	  	
27841	  	 	X	  	  	 	27845	  	  	 	X	  	  	 	27850	  	  	 	X	  	  	 	27853	  	  	 	X	  	  	 	27872	  	  	 	X	  	  	 	27873	  	  	 	X	  	  	 	27874	  	  	 	X	  	  	 	27908	  	  	 	X	  	  	 	27911	  	  	 	X	  	  	 	27948	  	  	 	X	  	
27949	  	 	X	  	  	 	27950	  	  	 	X	  	  	 	27952	  	  	 	X	  	  	 	27953	  	  	 	X	  	  	 	27954	  	  	 	X	  	  	 	27955	  	  	 	X	  	  	 	27956	  	  	 	X	  	  	 	27959	  	  	 	X	  	  	 	27991	  	  	 	X	  	  	 	27993	  	  	 	X	  	
27996	  	 	X	  	  	 	27997	  	  	 	X	  	  	 	27998	  	  	 	X	  	  	 	28004	  	  	 	X	  	  	 	28005	  	  	 	X	  	  	 	28006	  	  	 	X	  	  	 	28009	  	  	 	X	  	  	 	28062	  	  	 	X	  	  	 	28063	  	  	 	X	  	  	 	28065	  	  	 	X	  	
28067	  	 	X	  	  	 	28069	  	  	 	X	  	  	 	28070	  	  	 	X	  	  	 	28101	  	  	 	X	  	  	 	28103	  	  	 	X	  	  	 	28104	  	  	 	X	  	  	 	28105	  	  	 	X	  	  	 	28106	  	  	 	X	  	  	 	28107	  	  	 	X	  	  	 	28108	  	  	 	X	  	
28109	  	 	X	  	  	 	28110	  	  	 	X	  	  	 	28153	  	  	 	X	  	  	 	28154	  	  	 	X	  	  	 	28157	  	  	 	X	  	  	 	28159	  	  	 	X	  	  	 	28165	  	  	 	X	  	  	 	28211	  	  	 	X	  	  	 	28212	  	  	 	X	  	  	 	28214	  	  	 	X	  	
28216	  	 	X	  	  	 	28217	  	  	 	X	  	  	 	28218	  	  	 	X	  	  	 	28219	  	  	 	X	  	  	 	28222	  	  	 	X	  	  	 	28224	  	  	 	X	  	  	 	28226	  	  	 	X	  	  	 	28228	  	  	 	X	  	  	 	28229	  	  	 	X	  	  	 	28233	  	  	 	X	  	
28237	  	 	X	  	  	 	28242	  	  	 	X	  	  	 	28243	  	  	 	X	  	  	 	28244	  	  	 	X	  	  	 	28245	  	  	 	X	  	  	 	28249	  	  	 	X	  	  	 	28250	  	  	 	X	  	  	 	28285	  	  	 	X	  	  	 	28289	  	  	 	X	  	  	 	28301	  	  	 	X	  	
28302	  	 	X	  	  	 	28304	  	  	 	X	  	  	 	28306	  	  	 	X	  	  	 	28308	  	  	 	X	  	  	 	28309	  	  	 	X	  	  	 	28310	  	  	 	X	  	  	 	28314	  	  	 	X	  	  	 	28341	  	  	 	X	  	  	 	28343	  	  	 	X	  	  	 	28345	  	  	 	X	  	
28346	  	 	X	  	  	 	28348	  	  	 	X	  	  	 	28349	  	  	 	X	  	  	 	28352	  	  	 	X	  	  	 	28353	  	  	 	X	  	  	 	28354	  	  	 	X	  	  	 	28357	  	  	 	X	  	  	 	28358	  	  	 	X	  	  	 	28370	  	  	 	X	  	  	 	28377	  	  	 	X	  	
28379	  	 	X	  	  	 	28392	  	  	 	X	  	  	 	28394	  	  	 	X	  	  	 	28395	  	  	 	X	  	  	 	28396	  	  	 	X	  	  	 	28400	  	  	 	X	  	  	 	28411	  	  	 	X	  	  	 	28412	  	  	 	X	  	  	 	28414	  	  	 	X	  	  	 	28415	  	  	 	X	  	
28417	  	 	X	  	  	 	28419	  	  	 	X	  	  	 	28420	  	  	 	X	  	  	 	28472	  	  	 	X	  	  	 	28473	  	  	 	X	  	  	 	28479	  	  	 	X	  	  	 	28481	  	  	 	X	  	  	 	28482	  	  	 	X	  	  	 	28484	  	  	 	X	  	  	 	28488	  	  	 	X	  	
28490	  	 	X	  	  	 	28494	  	  	 	X	  	  	 	28509	  	  	 	X	  	  	 	28516	  	  	 	X	  	  	 	28555	  	  	 	X	  	  	 	28557	  	  	 	X	  	  	 	28559	  	  	 	X	  	  	 	28568	  	  	 	X	  	  	 	28572	  	  	 	X	  	  	 	28580	  	  	 	X	  	
28581	  	 	X	  	  	 	28584	  	  	 	X	  	  	 	28587	  	  	 	X	  	  	 	28588	  	  	 	X	  	  	 	28589	  	  	 	X	  	  	 	28590	  	  	 	X	  	  	 	28651	  	  	 	X	  	  	 	28655	  	  	 	X	  	  	 	28656	  	  	 	X	  	  	 	28658	  	  	 	X	  	
28659	  	 	X	  	  	 	28662	  	  	 	X	  	  	 	28665	  	  	 	X	  	  	 	28666	  	  	 	X	  	  	 	28667	  	  	 	X	  	  	 	28670	  	  	 	X	  	  	 	28679	  	  	 	X	  	  	 	28683	  	  	 	X	  	  	 	28704	  	  	 	X	  	  	 	28705	  	  	 	X	  	
28707	  	 	X	  	  	 	28708	  	  	 	X	  	  	 	28710	  	  	 	X	  	  	 	28712	  	  	 	X	  	  	 	28713	  	  	 	X	  	  	 	28714	  	  	 	X	  	  	 	28715	  	  	 	X	  	  	 	28716	  	  	 	X	  	  	 	28717	  	  	 	X	  	  	 	28739	  	  	 	X	  	
28812	  	 	X	  	  	 	28814	  	  	 	X	  	  	 	28815	  	  	 	X	  	  	 	28818	  	  	 	X	  	  	 	28819	  	  	 	X	  	  	 	28823	  	  	 	X	  	  	 	28826	  	  	 	X	  	  	 	28827	  	  	 	X	  	  	 	28829	  	  	 	X	  	  	 	28852	  	  	 	X	  	
28878	  	 	X	  	  	 	28891	  	  	 	X	  	  	 	28892	  	  	 	X	  	  	 	28894	  	  	 	X	  	  	 	28895	  	  	 	X	  	  	 	28896	  	  	 	X	  	  	 	28898	  	  	 	X	  	  	 	28902	  	  	 	X	  	  	 	28903	  	  	 	X	  	  	 	28904	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	9	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

28906	  	 	X	  	  	 	28909	  	  	 	X	  	  	 	28913	  	  	 	X	  	  	 	28918	  	  	 	X	  	  	 	28919	  	  	 	X	  	  	 	28920	  	  	 	X	  	  	 	30008	  	  	 	X	  	  	 	30009	  	  	 	X	  	  	 	30010	  	  	 	X	  	  	 	30023	  	  	 	X	  	
30039	  	 	X	  	  	 	30040	  	  	 	X	  	  	 	30041	  	  	 	X	  	  	 	30042	  	  	 	X	  	  	 	30043	  	  	 	X	  	  	 	30048	  	  	 	X	  	  	 	30050	  	  	 	X	  	  	 	30052	  	  	 	X	  	  	 	30053	  	  	 	X	  	  	 	30054	  	  	 	X	  	
30055	  	 	X	  	  	 	30060	  	  	 	X	  	  	 	30061	  	  	 	X	  	  	 	30062	  	  	 	X	  	  	 	30064	  	  	 	X	  	  	 	30075	  	  	 	X	  	  	 	30076	  	  	 	X	  	  	 	30077	  	  	 	X	  	  	 	30079	  	  	 	X	  	  	 	30081	  	  	 	X	  	
30083	  	 	X	  	  	 	30084	  	  	 	X	  	  	 	30085	  	  	 	X	  	  	 	30087	  	  	 	X	  	  	 	30088	  	  	 	X	  	  	 	30092	  	  	 	X	  	  	 	30093	  	  	 	X	  	  	 	30094	  	  	 	X	  	  	 	30095	  	  	 	X	  	  	 	30097	  	  	 	X	  	
30099	  	 	X	  	  	 	30100	  	  	 	X	  	  	 	30113	  	  	 	X	  	  	 	30136	  	  	 	X	  	  	 	30142	  	  	 	X	  	  	 	30143	  	  	 	X	  	  	 	30144	  	  	 	X	  	  	 	30159	  	  	 	X	  	  	 	30167	  	  	 	X	  	  	 	30188	  	  	 	X	  	
30191	  	 	X	  	  	 	30199	  	  	 	X	  	  	 	30212	  	  	 	X	  	  	 	30216	  	  	 	X	  	  	 	30217	  	  	 	X	  	  	 	30218	  	  	 	X	  	  	 	30219	  	  	 	X	  	  	 	30221	  	  	 	X	  	  	 	30223	  	  	 	X	  	  	 	30224	  	  	 	X	  	
30225	  	 	X	  	  	 	30228	  	  	 	X	  	  	 	30230	  	  	 	X	  	  	 	30231	  	  	 	X	  	  	 	30232	  	  	 	X	  	  	 	30235	  	  	 	X	  	  	 	30238	  	  	 	X	  	  	 	30239	  	  	 	X	  	  	 	30248	  	  	 	X	  	  	 	30299	  	  	 	X	  	
30308	  	 	X	  	  	 	30339	  	  	 	X	  	  	 	30351	  	  	 	X	  	  	 	30353	  	  	 	X	  	  	 	30355	  	  	 	X	  	  	 	30357	  	  	 	X	  	  	 	30362	  	  	 	X	  	  	 	30363	  	  	 	X	  	  	 	30364	  	  	 	X	  	  	 	30365	  	  	 	X	  	
30366	  	 	X	  	  	 	30368	  	  	 	X	  	  	 	30371	  	  	 	X	  	  	 	30372	  	  	 	X	  	  	 	30374	  	  	 	X	  	  	 	30375	  	  	 	X	  	  	 	30379	  	  	 	X	  	  	 	30397	  	  	 	X	  	  	 	30411	  	  	 	X	  	  	 	30412	  	  	 	X	  	
30413	  	 	X	  	  	 	30414	  	  	 	X	  	  	 	30419	  	  	 	X	  	  	 	30420	  	  	 	X	  	  	 	30421	  	  	 	X	  	  	 	30424	  	  	 	X	  	  	 	30427	  	  	 	X	  	  	 	30428	  	  	 	X	  	  	 	30429	  	  	 	X	  	  	 	30431	  	  	 	X	  	
30433	  	 	X	  	  	 	30435	  	  	 	X	  	  	 	30436	  	  	 	X	  	  	 	30438	  	  	 	X	  	  	 	30439	  	  	 	X	  	  	 	30449	  	  	 	X	  	  	 	30493	  	  	 	X	  	  	 	30494	  	  	 	X	  	  	 	30495	  	  	 	X	  	  	 	30496	  	  	 	X	  	
30499	  	 	X	  	  	 	30529	  	  	 	X	  	  	 	30541	  	  	 	X	  	  	 	30545	  	  	 	X	  	  	 	30546	  	  	 	X	  	  	 	30547	  	  	 	X	  	  	 	30548	  	  	 	X	  	  	 	30549	  	  	 	X	  	  	 	30550	  	  	 	X	  	  	 	30555	  	  	 	X	  	
30561	  	 	X	  	  	 	30563	  	  	 	X	  	  	 	30565	  	  	 	X	  	  	 	30566	  	  	 	X	  	  	 	30568	  	  	 	X	  	  	 	30569	  	  	 	X	  	  	 	30570	  	  	 	X	  	  	 	30582	  	  	 	X	  	  	 	30584	  	  	 	X	  	  	 	30588	  	  	 	X	  	
30589	  	 	X	  	  	 	30590	  	  	 	X	  	  	 	30621	  	  	 	X	  	  	 	30622	  	  	 	X	  	  	 	30624	  	  	 	X	  	  	 	30625	  	  	 	X	  	  	 	30626	  	  	 	X	  	  	 	30627	  	  	 	X	  	  	 	30628	  	  	 	X	  	  	 	30648	  	  	 	X	  	
30649	  	 	X	  	  	 	30653	  	  	 	X	  	  	 	30654	  	  	 	X	  	  	 	30655	  	  	 	X	  	  	 	30660	  	  	 	X	  	  	 	30707	  	  	 	X	  	  	 	30709	  	  	 	X	  	  	 	30731	  	  	 	X	  	  	 	30732	  	  	 	X	  	  	 	30736	  	  	 	X	  	
30737	  	 	X	  	  	 	30739	  	  	 	X	  	  	 	30740	  	  	 	X	  	  	 	30742	  	  	 	X	  	  	 	30743	  	  	 	X	  	  	 	30744	  	  	 	X	  	  	 	30745	  	  	 	X	  	  	 	30746	  	  	 	X	  	  	 	30748	  	  	 	X	  	  	 	30750	  	  	 	X	  	
30784	  	 	X	  	  	 	30791	  	  	 	X	  	  	 	30792	  	  	 	X	  	  	 	30794	  	  	 	X	  	  	 	30795	  	  	 	X	  	  	 	30800	  	  	 	X	  	  	 	30821	  	  	 	X	  	  	 	30826	  	  	 	X	  	  	 	30827	  	  	 	X	  	  	 	30830	  	  	 	X	  	
30861	  	 	X	  	  	 	30862	  	  	 	X	  	  	 	30863	  	  	 	X	  	  	 	30864	  	  	 	X	  	  	 	30865	  	  	 	X	  	  	 	30866	  	  	 	X	  	  	 	30869	  	  	 	X	  	  	 	30870	  	  	 	X	  	  	 	30872	  	  	 	X	  	  	 	30881	  	  	 	X	  	
30882	  	 	X	  	  	 	30884	  	  	 	X	  	  	 	30888	  	  	 	X	  	  	 	30889	  	  	 	X	  	  	 	30890	  	  	 	X	  	  	 	30894	  	  	 	X	  	  	 	30926	  	  	 	X	  	  	 	30931	  	  	 	X	  	  	 	30933	  	  	 	X	  	  	 	30934	  	  	 	X	  	
30937	  	 	X	  	  	 	30938	  	  	 	X	  	  	 	30939	  	  	 	X	  	  	 	30940	  	  	 	X	  	  	 	30941	  	  	 	X	  	  	 	30943	  	  	 	X	  	  	 	30944	  	  	 	X	  	  	 	30946	  	  	 	X	  	  	 	30948	  	  	 	X	  	  	 	30961	  	  	 	X	  	
30962	  	 	X	  	  	 	30964	  	  	 	X	  	  	 	30965	  	  	 	X	  	  	 	30967	  	  	 	X	  	  	 	30969	  	  	 	X	  	  	 	30971	  	  	 	X	  	  	 	30972	  	  	 	X	  	  	 	30973	  	  	 	X	  	  	 	30974	  	  	 	X	  	  	 	30975	  	  	 	X	  	
30976	  	 	X	  	  	 	30977	  	  	 	X	  	  	 	30978	  	  	 	X	  	  	 	30979	  	  	 	X	  	  	 	30985	  	  	 	X	  	  	 	31011	  	  	 	X	  	  	 	31012	  	  	 	X	  	  	 	31015	  	  	 	X	  	  	 	31018	  	  	 	X	  	  	 	31040	  	  	 	X	  	
31051	  	 	X	  	  	 	31053	  	  	 	X	  	  	 	31054	  	  	 	X	  	  	 	31055	  	  	 	X	  	  	 	31058	  	  	 	X	  	  	 	31060	  	  	 	X	  	  	 	31061	  	  	 	X	  	  	 	31063	  	  	 	X	  	  	 	31064	  	  	 	X	  	  	 	31067	  	  	 	X	  	
31068	  	 	X	  	  	 	31069	  	  	 	X	  	  	 	31070	  	  	 	X	  	  	 	31104	  	  	 	X	  	  	 	31105	  	  	 	X	  	  	 	31106	  	  	 	X	  	  	 	31141	  	  	 	X	  	  	 	31145	  	  	 	X	  	  	 	31146	  	  	 	X	  	  	 	31148	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	10	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

31151	  	 	X	  	  	 	31152	  	  	 	X	  	  	 	31155	  	  	 	X	  	  	 	31156	  	  	 	X	  	  	 	31160	  	  	 	X	  	  	 	31173	  	  	 	X	  	  	 	31203	  	  	 	X	  	  	 	31204	  	  	 	X	  	  	 	31205	  	  	 	X	  	  	 	31206	  	  	 	X	  	
31208	  	 	X	  	  	 	31212	  	  	 	X	  	  	 	31214	  	  	 	X	  	  	 	31215	  	  	 	X	  	  	 	31216	  	  	 	X	  	  	 	31218	  	  	 	X	  	  	 	31219	  	  	 	X	  	  	 	31238	  	  	 	X	  	  	 	31261	  	  	 	X	  	  	 	31263	  	  	 	X	  	
31264	  	 	X	  	  	 	31266	  	  	 	X	  	  	 	31268	  	  	 	X	  	  	 	31269	  	  	 	X	  	  	 	31276	  	  	 	X	  	  	 	31281	  	  	 	X	  	  	 	31283	  	  	 	X	  	  	 	31284	  	  	 	X	  	  	 	31285	  	  	 	X	  	  	 	31289	  	  	 	X	  	
31293	  	 	X	  	  	 	31295	  	  	 	X	  	  	 	31296	  	  	 	X	  	  	 	31300	  	  	 	X	  	  	 	31332	  	  	 	X	  	  	 	31335	  	  	 	X	  	  	 	31339	  	  	 	X	  	  	 	31340	  	  	 	X	  	  	 	31361	  	  	 	X	  	  	 	31363	  	  	 	X	  	
31364	  	 	X	  	  	 	31367	  	  	 	X	  	  	 	31369	  	  	 	X	  	  	 	31370	  	  	 	X	  	  	 	31371	  	  	 	X	  	  	 	31372	  	  	 	X	  	  	 	31373	  	  	 	X	  	  	 	31374	  	  	 	X	  	  	 	31375	  	  	 	X	  	  	 	31378	  	  	 	X	  	
31390	  	 	X	  	  	 	31391	  	  	 	X	  	  	 	31392	  	  	 	X	  	  	 	31395	  	  	 	X	  	  	 	31396	  	  	 	X	  	  	 	31399	  	  	 	X	  	  	 	31421	  	  	 	X	  	  	 	31422	  	  	 	X	  	  	 	31426	  	  	 	X	  	  	 	31429	  	  	 	X	  	
31441	  	 	X	  	  	 	31445	  	  	 	X	  	  	 	31446	  	  	 	X	  	  	 	31448	  	  	 	X	  	  	 	31449	  	  	 	X	  	  	 	31458	  	  	 	X	  	  	 	31459	  	  	 	X	  	  	 	31461	  	  	 	X	  	  	 	31462	  	  	 	X	  	  	 	31463	  	  	 	X	  	
31464	  	 	X	  	  	 	31466	  	  	 	X	  	  	 	31467	  	  	 	X	  	  	 	31468	  	  	 	X	  	  	 	31470	  	  	 	X	  	  	 	31494	  	  	 	X	  	  	 	31495	  	  	 	X	  	  	 	31499	  	  	 	X	  	  	 	31500	  	  	 	X	  	  	 	31501	  	  	 	X	  	
31502	  	 	X	  	  	 	31504	  	  	 	X	  	  	 	31505	  	  	 	X	  	  	 	31506	  	  	 	X	  	  	 	31507	  	  	 	X	  	  	 	31510	  	  	 	X	  	  	 	31520	  	  	 	X	  	  	 	31523	  	  	 	X	  	  	 	31524	  	  	 	X	  	  	 	31525	  	  	 	X	  	
31526	  	 	X	  	  	 	31527	  	  	 	X	  	  	 	31528	  	  	 	X	  	  	 	31529	  	  	 	X	  	  	 	31530	  	  	 	X	  	  	 	31531	  	  	 	X	  	  	 	31532	  	  	 	X	  	  	 	31533	  	  	 	X	  	  	 	31534	  	  	 	X	  	  	 	31535	  	  	 	X	  	
31537	  	 	X	  	  	 	31573	  	  	 	X	  	  	 	31574	  	  	 	X	  	  	 	31575	  	  	 	X	  	  	 	31577	  	  	 	X	  	  	 	31578	  	  	 	X	  	  	 	31601	  	  	 	X	  	  	 	31602	  	  	 	X	  	  	 	31606	  	  	 	X	  	  	 	31608	  	  	 	X	  	
31609	  	 	X	  	  	 	31610	  	  	 	X	  	  	 	31611	  	  	 	X	  	  	 	31612	  	  	 	X	  	  	 	31641	  	  	 	X	  	  	 	31644	  	  	 	X	  	  	 	31645	  	  	 	X	  	  	 	31650	  	  	 	X	  	  	 	31671	  	  	 	X	  	  	 	31677	  	  	 	X	  	
31678	  	 	X	  	  	 	31679	  	  	 	X	  	  	 	31696	  	  	 	X	  	  	 	31697	  	  	 	X	  	  	 	31698	  	  	 	X	  	  	 	31705	  	  	 	X	  	  	 	31706	  	  	 	X	  	  	 	31708	  	  	 	X	  	  	 	31709	  	  	 	X	  	  	 	31710	  	  	 	X	  	
31741	  	 	X	  	  	 	31742	  	  	 	X	  	  	 	31747	  	  	 	X	  	  	 	31748	  	  	 	X	  	  	 	31802	  	  	 	X	  	  	 	31803	  	  	 	X	  	  	 	31805	  	  	 	X	  	  	 	31815	  	  	 	X	  	  	 	31816	  	  	 	X	  	  	 	31819	  	  	 	X	  	
31821	  	 	X	  	  	 	31822	  	  	 	X	  	  	 	31824	  	  	 	X	  	  	 	31825	  	  	 	X	  	  	 	31826	  	  	 	X	  	  	 	31827	  	  	 	X	  	  	 	31861	  	  	 	X	  	  	 	31863	  	  	 	X	  	  	 	31865	  	  	 	X	  	  	 	31867	  	  	 	X	  	
31875	  	 	X	  	  	 	31881	  	  	 	X	  	  	 	31884	  	  	 	X	  	  	 	31887	  	  	 	X	  	  	 	31888	  	  	 	X	  	  	 	31891	  	  	 	X	  	  	 	31892	  	  	 	X	  	  	 	31897	  	  	 	X	  	  	 	31898	  	  	 	X	  	  	 	31899	  	  	 	X	  	
31900	  	 	X	  	  	 	31902	  	  	 	X	  	  	 	31903	  	  	 	X	  	  	 	31904	  	  	 	X	  	  	 	31914	  	  	 	X	  	  	 	31933	  	  	 	X	  	  	 	31937	  	  	 	X	  	  	 	31938	  	  	 	X	  	  	 	31940	  	  	 	X	  	  	 	31951	  	  	 	X	  	
31954	  	 	X	  	  	 	31955	  	  	 	X	  	  	 	31956	  	  	 	X	  	  	 	31957	  	  	 	X	  	  	 	31959	  	  	 	X	  	  	 	31960	  	  	 	X	  	  	 	32000	  	  	 	X	  	  	 	32002	  	  	 	X	  	  	 	32003	  	  	 	X	  	  	 	32004	  	  	 	X	  	
32005	  	 	X	  	  	 	32006	  	  	 	X	  	  	 	32008	  	  	 	X	  	  	 	32023	  	  	 	X	  	  	 	32025	  	  	 	X	  	  	 	32027	  	  	 	X	  	  	 	32081	  	  	 	X	  	  	 	32084	  	  	 	X	  	  	 	32085	  	  	 	X	  	  	 	32088	  	  	 	X	  	
32089	  	 	X	  	  	 	32090	  	  	 	X	  	  	 	32101	  	  	 	X	  	  	 	32109	  	  	 	X	  	  	 	32110	  	  	 	X	  	  	 	32112	  	  	 	X	  	  	 	32115	  	  	 	X	  	  	 	32116	  	  	 	X	  	  	 	32120	  	  	 	X	  	  	 	32152	  	  	 	X	  	
32153	  	 	X	  	  	 	32155	  	  	 	X	  	  	 	32157	  	  	 	X	  	  	 	32159	  	  	 	X	  	  	 	32192	  	  	 	X	  	  	 	32195	  	  	 	X	  	  	 	32198	  	  	 	X	  	  	 	32200	  	  	 	X	  	  	 	32201	  	  	 	X	  	  	 	32202	  	  	 	X	  	
32204	  	 	X	  	  	 	32205	  	  	 	X	  	  	 	32206	  	  	 	X	  	  	 	32207	  	  	 	X	  	  	 	32209	  	  	 	X	  	  	 	32229	  	  	 	X	  	  	 	32230	  	  	 	X	  	  	 	32243	  	  	 	X	  	  	 	32248	  	  	 	X	  	  	 	32249	  	  	 	X	  	
32262	  	 	X	  	  	 	32266	  	  	 	X	  	  	 	32269	  	  	 	X	  	  	 	32270	  	  	 	X	  	  	 	32311	  	  	 	X	  	  	 	32313	  	  	 	X	  	  	 	32314	  	  	 	X	  	  	 	32318	  	  	 	X	  	  	 	32319	  	  	 	X	  	  	 	32320	  	  	 	X	  	
32334	  	 	X	  	  	 	32336	  	  	 	X	  	  	 	32337	  	  	 	X	  	  	 	32339	  	  	 	X	  	  	 	32340	  	  	 	X	  	  	 	32361	  	  	 	X	  	  	 	32401	  	  	 	X	  	  	 	32404	  	  	 	X	  	  	 	32406	  	  	 	X	  	  	 	32408	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	11	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

32409	  	 	X	  	  	 	32412	  	  	 	X	  	  	 	32414	  	  	 	X	  	  	 	32418	  	  	 	X	  	  	 	32419	  	  	 	X	  	  	 	32420	  	  	 	X	  	  	 	32433	  	  	 	X	  	  	 	32441	  	  	 	X	  	  	 	32442	  	  	 	X	  	  	 	32443	  	  	 	X	  	
32444	  	 	X	  	  	 	32445	  	  	 	X	  	  	 	32449	  	  	 	X	  	  	 	32455	  	  	 	X	  	  	 	32459	  	  	 	X	  	  	 	32467	  	  	 	X	  	  	 	32477	  	  	 	X	  	  	 	32481	  	  	 	X	  	  	 	32491	  	  	 	X	  	  	 	32493	  	  	 	X	  	
32494	  	 	X	  	  	 	32495	  	  	 	X	  	  	 	32511	  	  	 	X	  	  	 	32512	  	  	 	X	  	  	 	32517	  	  	 	X	  	  	 	32518	  	  	 	X	  	  	 	32521	  	  	 	X	  	  	 	32526	  	  	 	X	  	  	 	32528	  	  	 	X	  	  	 	32591	  	  	 	X	  	
32592	  	 	X	  	  	 	32594	  	  	 	X	  	  	 	32600	  	  	 	X	  	  	 	32601	  	  	 	X	  	  	 	32604	  	  	 	X	  	  	 	32605	  	  	 	X	  	  	 	32610	  	  	 	X	  	  	 	32613	  	  	 	X	  	  	 	32614	  	  	 	X	  	  	 	32615	  	  	 	X	  	
32620	  	 	X	  	  	 	32625	  	  	 	X	  	  	 	32629	  	  	 	X	  	  	 	32632	  	  	 	X	  	  	 	32633	  	  	 	X	  	  	 	32634	  	  	 	X	  	  	 	32637	  	  	 	X	  	  	 	32638	  	  	 	X	  	  	 	32640	  	  	 	X	  	  	 	32647	  	  	 	X	  	
32648	  	 	X	  	  	 	32649	  	  	 	X	  	  	 	32650	  	  	 	X	  	  	 	32651	  	  	 	X	  	  	 	32654	  	  	 	X	  	  	 	32656	  	  	 	X	  	  	 	32662	  	  	 	X	  	  	 	32664	  	  	 	X	  	  	 	32677	  	  	 	X	  	  	 	32678	  	  	 	X	  	
32679	  	 	X	  	  	 	32680	  	  	 	X	  	  	 	32681	  	  	 	X	  	  	 	32689	  	  	 	X	  	  	 	32718	  	  	 	X	  	  	 	32732	  	  	 	X	  	  	 	32733	  	  	 	X	  	  	 	32735	  	  	 	X	  	  	 	32736	  	  	 	X	  	  	 	32738	  	  	 	X	  	
32740	  	 	X	  	  	 	32774	  	  	 	X	  	  	 	32873	  	  	 	X	  	  	 	32875	  	  	 	X	  	  	 	32876	  	  	 	X	  	  	 	32877	  	  	 	X	  	  	 	32879	  	  	 	X	  	  	 	32880	  	  	 	X	  	  	 	32881	  	  	 	X	  	  	 	32889	  	  	 	X	  	
32894	  	 	X	  	  	 	32897	  	  	 	X	  	  	 	32899	  	  	 	X	  	  	 	32907	  	  	 	X	  	  	 	32927	  	  	 	X	  	  	 	32942	  	  	 	X	  	  	 	32943	  	  	 	X	  	  	 	32944	  	  	 	X	  	  	 	32946	  	  	 	X	  	  	 	32947	  	  	 	X	  	
32948	  	 	X	  	  	 	32949	  	  	 	X	  	  	 	32951	  	  	 	X	  	  	 	32953	  	  	 	X	  	  	 	32954	  	  	 	X	  	  	 	32955	  	  	 	X	  	  	 	32993	  	  	 	X	  	  	 	32994	  	  	 	X	  	  	 	32995	  	  	 	X	  	  	 	32996	  	  	 	X	  	
32998	  	 	X	  	  	 	33030	  	  	 	X	  	  	 	33033	  	  	 	X	  	  	 	33037	  	  	 	X	  	  	 	33044	  	  	 	X	  	  	 	33046	  	  	 	X	  	  	 	33048	  	  	 	X	  	  	 	33051	  	  	 	X	  	  	 	33056	  	  	 	X	  	  	 	33059	  	  	 	X	  	
33060	  	 	X	  	  	 	33070	  	  	 	X	  	  	 	33091	  	  	 	X	  	  	 	33094	  	  	 	X	  	  	 	33095	  	  	 	X	  	  	 	33098	  	  	 	X	  	  	 	33099	  	  	 	X	  	  	 	33100	  	  	 	X	  	  	 	33101	  	  	 	X	  	  	 	33109	  	  	 	X	  	
33112	  	 	X	  	  	 	33114	  	  	 	X	  	  	 	33116	  	  	 	X	  	  	 	33119	  	  	 	X	  	  	 	33121	  	  	 	X	  	  	 	33123	  	  	 	X	  	  	 	33200	  	  	 	X	  	  	 	33232	  	  	 	X	  	  	 	33234	  	  	 	X	  	  	 	33237	  	  	 	X	  	
33238	  	 	X	  	  	 	33240	  	  	 	X	  	  	 	33262	  	  	 	X	  	  	 	33263	  	  	 	X	  	  	 	33265	  	  	 	X	  	  	 	33266	  	  	 	X	  	  	 	33268	  	  	 	X	  	  	 	33270	  	  	 	X	  	  	 	33292	  	  	 	X	  	  	 	33293	  	  	 	X	  	
33294	  	 	X	  	  	 	33296	  	  	 	X	  	  	 	33299	  	  	 	X	  	  	 	33301	  	  	 	X	  	  	 	33302	  	  	 	X	  	  	 	33303	  	  	 	X	  	  	 	33305	  	  	 	X	  	  	 	33306	  	  	 	X	  	  	 	33309	  	  	 	X	  	  	 	33310	  	  	 	X	  	
33311	  	 	X	  	  	 	33312	  	  	 	X	  	  	 	33314	  	  	 	X	  	  	 	33317	  	  	 	X	  	  	 	33318	  	  	 	X	  	  	 	33320	  	  	 	X	  	  	 	33321	  	  	 	X	  	  	 	33322	  	  	 	X	  	  	 	33325	  	  	 	X	  	  	 	33326	  	  	 	X	  	
33330	  	 	X	  	  	 	33331	  	  	 	X	  	  	 	33372	  	  	 	X	  	  	 	33374	  	  	 	X	  	  	 	33375	  	  	 	X	  	  	 	33376	  	  	 	X	  	  	 	33377	  	  	 	X	  	  	 	33378	  	  	 	X	  	  	 	33409	  	  	 	X	  	  	 	33421	  	  	 	X	  	
33422	  	 	X	  	  	 	33425	  	  	 	X	  	  	 	33429	  	  	 	X	  	  	 	33430	  	  	 	X	  	  	 	33434	  	  	 	X	  	  	 	33438	  	  	 	X	  	  	 	33439	  	  	 	X	  	  	 	33440	  	  	 	X	  	  	 	33441	  	  	 	X	  	  	 	33443	  	  	 	X	  	
33446	  	 	X	  	  	 	33448	  	  	 	X	  	  	 	33495	  	  	 	X	  	  	 	33498	  	  	 	X	  	  	 	33500	  	  	 	X	  	  	 	33501	  	  	 	X	  	  	 	33503	  	  	 	X	  	  	 	33509	  	  	 	X	  	  	 	33510	  	  	 	X	  	  	 	33513	  	  	 	X	  	
33515	  	 	X	  	  	 	33518	  	  	 	X	  	  	 	33519	  	  	 	X	  	  	 	33520	  	  	 	X	  	  	 	33582	  	  	 	X	  	  	 	33583	  	  	 	X	  	  	 	33584	  	  	 	X	  	  	 	33586	  	  	 	X	  	  	 	33592	  	  	 	X	  	  	 	33593	  	  	 	X	  	
33594	  	 	X	  	  	 	33595	  	  	 	X	  	  	 	33598	  	  	 	X	  	  	 	33684	  	  	 	X	  	  	 	33686	  	  	 	X	  	  	 	33691	  	  	 	X	  	  	 	33696	  	  	 	X	  	  	 	33743	  	  	 	X	  	  	 	33750	  	  	 	X	  	  	 	33751	  	  	 	X	  	
33762	  	 	X	  	  	 	33765	  	  	 	X	  	  	 	33766	  	  	 	X	  	  	 	33767	  	  	 	X	  	  	 	33768	  	  	 	X	  	  	 	33777	  	  	 	X	  	  	 	33781	  	  	 	X	  	  	 	33821	  	  	 	X	  	  	 	33823	  	  	 	X	  	  	 	33824	  	  	 	X	  	
33825	  	 	X	  	  	 	33826	  	  	 	X	  	  	 	33828	  	  	 	X	  	  	 	33829	  	  	 	X	  	  	 	33832	  	  	 	X	  	  	 	33834	  	  	 	X	  	  	 	33835	  	  	 	X	  	  	 	33836	  	  	 	X	  	  	 	33838	  	  	 	X	  	  	 	33839	  	  	 	X	  	
33847	  	 	X	  	  	 	33850	  	  	 	X	  	  	 	33874	  	  	 	X	  	  	 	33877	  	  	 	X	  	  	 	33880	  	  	 	X	  	  	 	33903	  	  	 	X	  	  	 	33904	  	  	 	X	  	  	 	33905	  	  	 	X	  	  	 	33906	  	  	 	X	  	  	 	33907	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	12	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

33908	  	 	X	  	  	 	33911	  	  	 	X	  	  	 	33913	  	  	 	X	  	  	 	33914	  	  	 	X	  	  	 	33917	  	  	 	X	  	  	 	33919	  	  	 	X	  	  	 	33965	  	  	 	X	  	  	 	33967	  	  	 	X	  	  	 	33969	  	  	 	X	  	  	 	33971	  	  	 	X	  	
33976	  	 	X	  	  	 	33981	  	  	 	X	  	  	 	33984	  	  	 	X	  	  	 	33985	  	  	 	X	  	  	 	33988	  	  	 	X	  	  	 	33989	  	  	 	X	  	  	 	33990	  	  	 	X	  	  	 	34006	  	  	 	X	  	  	 	34007	  	  	 	X	  	  	 	34031	  	  	 	X	  	
34033	  	 	X	  	  	 	34038	  	  	 	X	  	  	 	34043	  	  	 	X	  	  	 	34046	  	  	 	X	  	  	 	34075	  	  	 	X	  	  	 	34076	  	  	 	X	  	  	 	34077	  	  	 	X	  	  	 	34087	  	  	 	X	  	  	 	34105	  	  	 	X	  	  	 	34106	  	  	 	X	  	
34109	  	 	X	  	  	 	34110	  	  	 	X	  	  	 	34111	  	  	 	X	  	  	 	34116	  	  	 	X	  	  	 	34142	  	  	 	X	  	  	 	34148	  	  	 	X	  	  	 	34151	  	  	 	X	  	  	 	34152	  	  	 	X	  	  	 	34153	  	  	 	X	  	  	 	34160	  	  	 	X	  	
34207	  	 	X	  	  	 	34221	  	  	 	X	  	  	 	34222	  	  	 	X	  	  	 	34223	  	  	 	X	  	  	 	34227	  	  	 	X	  	  	 	34228	  	  	 	X	  	  	 	34229	  	  	 	X	  	  	 	34230	  	  	 	X	  	  	 	34232	  	  	 	X	  	  	 	34233	  	  	 	X	  	
34236	  	 	X	  	  	 	34239	  	  	 	X	  	  	 	34243	  	  	 	X	  	  	 	34244	  	  	 	X	  	  	 	34301	  	  	 	X	  	  	 	34303	  	  	 	X	  	  	 	34314	  	  	 	X	  	  	 	34315	  	  	 	X	  	  	 	34318	  	  	 	X	  	  	 	34320	  	  	 	X	  	
34321	  	 	X	  	  	 	34322	  	  	 	X	  	  	 	34323	  	  	 	X	  	  	 	34329	  	  	 	X	  	  	 	34334	  	  	 	X	  	  	 	34341	  	  	 	X	  	  	 	34342	  	  	 	X	  	  	 	34343	  	  	 	X	  	  	 	34345	  	  	 	X	  	  	 	34346	  	  	 	X	  	
34348	  	 	X	  	  	 	34349	  	  	 	X	  	  	 	34350	  	  	 	X	  	  	 	34401	  	  	 	X	  	  	 	34403	  	  	 	X	  	  	 	34404	  	  	 	X	  	  	 	34405	  	  	 	X	  	  	 	34407	  	  	 	X	  	  	 	34408	  	  	 	X	  	  	 	34426	  	  	 	X	  	
34427	  	 	X	  	  	 	34428	  	  	 	X	  	  	 	34429	  	  	 	X	  	  	 	34430	  	  	 	X	  	  	 	34450	  	  	 	X	  	  	 	34452	  	  	 	X	  	  	 	34453	  	  	 	X	  	  	 	34454	  	  	 	X	  	  	 	34457	  	  	 	X	  	  	 	34459	  	  	 	X	  	
34460	  	 	X	  	  	 	34462	  	  	 	X	  	  	 	34464	  	  	 	X	  	  	 	34466	  	  	 	X	  	  	 	34470	  	  	 	X	  	  	 	34553	  	  	 	X	  	  	 	34555	  	  	 	X	  	  	 	34557	  	  	 	X	  	  	 	34559	  	  	 	X	  	  	 	34564	  	  	 	X	  	
34569	  	 	X	  	  	 	34571	  	  	 	X	  	  	 	34572	  	  	 	X	  	  	 	34574	  	  	 	X	  	  	 	34579	  	  	 	X	  	  	 	34581	  	  	 	X	  	  	 	34600	  	  	 	X	  	  	 	34634	  	  	 	X	  	  	 	34652	  	  	 	X	  	  	 	34653	  	  	 	X	  	
34654	  	 	X	  	  	 	34658	  	  	 	X	  	  	 	34660	  	  	 	X	  	  	 	34661	  	  	 	X	  	  	 	34665	  	  	 	X	  	  	 	34669	  	  	 	X	  	  	 	34671	  	  	 	X	  	  	 	34673	  	  	 	X	  	  	 	34676	  	  	 	X	  	  	 	34677	  	  	 	X	  	
34678	  	 	X	  	  	 	34701	  	  	 	X	  	  	 	34702	  	  	 	X	  	  	 	34703	  	  	 	X	  	  	 	34704	  	  	 	X	  	  	 	34707	  	  	 	X	  	  	 	34708	  	  	 	X	  	  	 	34733	  	  	 	X	  	  	 	34766	  	  	 	X	  	  	 	34768	  	  	 	X	  	
34769	  	 	X	  	  	 	34771	  	  	 	X	  	  	 	34772	  	  	 	X	  	  	 	34773	  	  	 	X	  	  	 	34774	  	  	 	X	  	  	 	34776	  	  	 	X	  	  	 	34779	  	  	 	X	  	  	 	34792	  	  	 	X	  	  	 	34793	  	  	 	X	  	  	 	34796	  	  	 	X	  	
34797	  	 	X	  	  	 	34798	  	  	 	X	  	  	 	34800	  	  	 	X	  	  	 	34801	  	  	 	X	  	  	 	34802	  	  	 	X	  	  	 	34803	  	  	 	X	  	  	 	34804	  	  	 	X	  	  	 	34807	  	  	 	X	  	  	 	34808	  	  	 	X	  	  	 	34809	  	  	 	X	  	
34825	  	 	X	  	  	 	34852	  	  	 	X	  	  	 	34853	  	  	 	X	  	  	 	34854	  	  	 	X	  	  	 	34855	  	  	 	X	  	  	 	34857	  	  	 	X	  	  	 	34859	  	  	 	X	  	  	 	34863	  	  	 	X	  	  	 	34866	  	  	 	X	  	  	 	34869	  	  	 	X	  	
34879	  	 	X	  	  	 	34880	  	  	 	X	  	  	 	34891	  	  	 	X	  	  	 	34892	  	  	 	X	  	  	 	34893	  	  	 	X	  	  	 	34896	  	  	 	X	  	  	 	34899	  	  	 	X	  	  	 	34900	  	  	 	X	  	  	 	34916	  	  	 	X	  	  	 	34978	  	  	 	X	  	
34979	  	 	X	  	  	 	34980	  	  	 	X	  	  	 	34981	  	  	 	X	  	  	 	34982	  	  	 	X	  	  	 	34998	  	  	 	X	  	  	 	35032	  	  	 	X	  	  	 	35033	  	  	 	X	  	  	 	35034	  	  	 	X	  	  	 	35035	  	  	 	X	  	  	 	35037	  	  	 	X	  	
35038	  	 	X	  	  	 	35040	  	  	 	X	  	  	 	35053	  	  	 	X	  	  	 	35071	  	  	 	X	  	  	 	35078	  	  	 	X	  	  	 	35080	  	  	 	X	  	  	 	35081	  	  	 	X	  	  	 	35082	  	  	 	X	  	  	 	35083	  	  	 	X	  	  	 	35084	  	  	 	X	  	
35086	  	 	X	  	  	 	35087	  	  	 	X	  	  	 	35088	  	  	 	X	  	  	 	35089	  	  	 	X	  	  	 	35093	  	  	 	X	  	  	 	35101	  	  	 	X	  	  	 	35137	  	  	 	X	  	  	 	35202	  	  	 	X	  	  	 	35203	  	  	 	X	  	  	 	35207	  	  	 	X	  	
35208	  	 	X	  	  	 	35211	  	  	 	X	  	  	 	35215	  	  	 	X	  	  	 	35216	  	  	 	X	  	  	 	35217	  	  	 	X	  	  	 	35219	  	  	 	X	  	  	 	35220	  	  	 	X	  	  	 	35221	  	  	 	X	  	  	 	35222	  	  	 	X	  	  	 	35224	  	  	 	X	  	
35228	  	 	X	  	  	 	35232	  	  	 	X	  	  	 	35233	  	  	 	X	  	  	 	35237	  	  	 	X	  	  	 	35238	  	  	 	X	  	  	 	35239	  	  	 	X	  	  	 	35241	  	  	 	X	  	  	 	35242	  	  	 	X	  	  	 	35243	  	  	 	X	  	  	 	35247	  	  	 	X	  	
35249	  	 	X	  	  	 	35250	  	  	 	X	  	  	 	35461	  	  	 	X	  	  	 	35462	  	  	 	X	  	  	 	35463	  	  	 	X	  	  	 	35465	  	  	 	X	  	  	 	35468	  	  	 	X	  	  	 	35469	  	  	 	X	  	  	 	35479	  	  	 	X	  	  	 	35485	  	  	 	X	  	
35486	  	 	X	  	  	 	35488	  	  	 	X	  	  	 	35489	  	  	 	X	  	  	 	35490	  	  	 	X	  	  	 	35492	  	  	 	X	  	  	 	35494	  	  	 	X	  	  	 	35495	  	  	 	X	  	  	 	35496	  	  	 	X	  	  	 	35497	  	  	 	X	  	  	 	35501	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	13	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

35504	  	 	X	  	  	 	35506	  	  	 	X	  	  	 	35508	  	  	 	X	  	  	 	35512	  	  	 	X	  	  	 	35515	  	  	 	X	  	  	 	35517	  	  	 	X	  	  	 	35518	  	  	 	X	  	  	 	35520	  	  	 	X	  	  	 	35522	  	  	 	X	  	  	 	35526	  	  	 	X	  	
35533	  	 	X	  	  	 	35536	  	  	 	X	  	  	 	35538	  	  	 	X	  	  	 	35543	  	  	 	X	  	  	 	35546	  	  	 	X	  	  	 	35547	  	  	 	X	  	  	 	35550	  	  	 	X	  	  	 	35556	  	  	 	X	  	  	 	35559	  	  	 	X	  	  	 	35560	  	  	 	X	  	
35563	  	 	X	  	  	 	35791	  	  	 	X	  	  	 	35792	  	  	 	X	  	  	 	35793	  	  	 	X	  	  	 	35795	  	  	 	X	  	  	 	35796	  	  	 	X	  	  	 	35798	  	  	 	X	  	  	 	35800	  	  	 	X	  	  	 	35801	  	  	 	X	  	  	 	35803	  	  	 	X	  	
35804	  	 	X	  	  	 	35805	  	  	 	X	  	  	 	35806	  	  	 	X	  	  	 	35807	  	  	 	X	  	  	 	35808	  	  	 	X	  	  	 	35809	  	  	 	X	  	  	 	35812	  	  	 	X	  	  	 	35813	  	  	 	X	  	  	 	35814	  	  	 	X	  	  	 	35848	  	  	 	X	  	
35861	  	 	X	  	  	 	35862	  	  	 	X	  	  	 	35863	  	  	 	X	  	  	 	35864	  	  	 	X	  	  	 	35866	  	  	 	X	  	  	 	35867	  	  	 	X	  	  	 	35868	  	  	 	X	  	  	 	35869	  	  	 	X	  	  	 	35874	  	  	 	X	  	  	 	35875	  	  	 	X	  	
35876	  	 	X	  	  	 	35879	  	  	 	X	  	  	 	35880	  	  	 	X	  	  	 	35882	  	  	 	X	  	  	 	35884	  	  	 	X	  	  	 	35885	  	  	 	X	  	  	 	35890	  	  	 	X	  	  	 	35892	  	  	 	X	  	  	 	35893	  	  	 	X	  	  	 	35894	  	  	 	X	  	
35899	  	 	X	  	  	 	35900	  	  	 	X	  	  	 	35921	  	  	 	X	  	  	 	35922	  	  	 	X	  	  	 	35923	  	  	 	X	  	  	 	35924	  	  	 	X	  	  	 	35925	  	  	 	X	  	  	 	35926	  	  	 	X	  	  	 	35927	  	  	 	X	  	  	 	35931	  	  	 	X	  	
35934	  	 	X	  	  	 	35935	  	  	 	X	  	  	 	35936	  	  	 	X	  	  	 	35937	  	  	 	X	  	  	 	35938	  	  	 	X	  	  	 	35939	  	  	 	X	  	  	 	35940	  	  	 	X	  	  	 	35942	  	  	 	X	  	  	 	35944	  	  	 	X	  	  	 	35945	  	  	 	X	  	
35949	  	 	X	  	  	 	35994	  	  	 	X	  	  	 	35995	  	  	 	X	  	  	 	35997	  	  	 	X	  	  	 	35998	  	  	 	X	  	  	 	35999	  	  	 	X	  	  	 	36000	  	  	 	X	  	  	 	36115	  	  	 	X	  	  	 	36126	  	  	 	X	  	  	 	36127	  	  	 	X	  	
36128	  	 	X	  	  	 	36129	  	  	 	X	  	  	 	36164	  	  	 	X	  	  	 	36183	  	  	 	X	  	  	 	36271	  	  	 	X	  	  	 	36273	  	  	 	X	  	  	 	36285	  	  	 	X	  	  	 	36286	  	  	 	X	  	  	 	36287	  	  	 	X	  	  	 	36309	  	  	 	X	  	
36320	  	 	X	  	  	 	36321	  	  	 	X	  	  	 	36324	  	  	 	X	  	  	 	36326	  	  	 	X	  	  	 	36355	  	  	 	X	  	  	 	36363	  	  	 	X	  	  	 	36371	  	  	 	X	  	  	 	36378	  	  	 	X	  	  	 	36385	  	  	 	X	  	  	 	36386	  	  	 	X	  	
36390	  	 	X	  	  	 	36393	  	  	 	X	  	  	 	36395	  	  	 	X	  	  	 	36398	  	  	 	X	  	  	 	36416	  	  	 	X	  	  	 	36421	  	  	 	X	  	  	 	36426	  	  	 	X	  	  	 	36427	  	  	 	X	  	  	 	36444	  	  	 	X	  	  	 	36446	  	  	 	X	  	
36447	  	 	X	  	  	 	36461	  	  	 	X	  	  	 	36465	  	  	 	X	  	  	 	36469	  	  	 	X	  	  	 	36470	  	  	 	X	  	  	 	36471	  	  	 	X	  	  	 	36479	  	  	 	X	  	  	 	36517	  	  	 	X	  	  	 	36518	  	  	 	X	  	  	 	36521	  	  	 	X	  	
36523	  	 	X	  	  	 	36526	  	  	 	X	  	  	 	36530	  	  	 	X	  	  	 	36540	  	  	 	X	  	  	 	36542	  	  	 	X	  	  	 	36547	  	  	 	X	  	  	 	36549	  	  	 	X	  	  	 	36550	  	  	 	X	  	  	 	36553	  	  	 	X	  	  	 	36559	  	  	 	X	  	
36564	  	 	X	  	  	 	36570	  	  	 	X	  	  	 	36574	  	  	 	X	  	  	 	36580	  	  	 	X	  	  	 	36585	  	  	 	X	  	  	 	36606	  	  	 	X	  	  	 	36610	  	  	 	X	  	  	 	36624	  	  	 	X	  	  	 	36625	  	  	 	X	  	  	 	36635	  	  	 	X	  	
36639	  	 	X	  	  	 	36640	  	  	 	X	  	  	 	36649	  	  	 	X	  	  	 	36676	  	  	 	X	  	  	 	36677	  	  	 	X	  	  	 	36683	  	  	 	X	  	  	 	36686	  	  	 	X	  	  	 	36718	  	  	 	X	  	  	 	36725	  	  	 	X	  	  	 	36729	  	  	 	X	  	
36730	  	 	X	  	  	 	36733	  	  	 	X	  	  	 	36734	  	  	 	X	  	  	 	36740	  	  	 	X	  	  	 	36743	  	  	 	X	  	  	 	36744	  	  	 	X	  	  	 	36765	  	  	 	X	  	  	 	36766	  	  	 	X	  	  	 	36767	  	  	 	X	  	  	 	36772	  	  	 	X	  	
36782	  	 	X	  	  	 	36786	  	  	 	X	  	  	 	36818	  	  	 	X	  	  	 	36821	  	  	 	X	  	  	 	36822	  	  	 	X	  	  	 	3682	  	  	 	X	  	  	 	36840	  	  	 	X	  	  	 	36845	  	  	 	X	  	  	 	36848	  	  	 	X	  	  	 	36853	  	  	 	X	  	
36880	  	 	X	  	  	 	36881	  	  	 	X	  	  	 	36896	  	  	 	X	  	  	 	36900	  	  	 	X	  	  	 	36923	  	  	 	X	  	  	 	36929	  	  	 	X	  	  	 	36937	  	  	 	X	  	  	 	36950	  	  	 	X	  	  	 	36953	  	  	 	X	  	  	 	36967	  	  	 	X	  	
36979	  	 	X	  	  	 	36985	  	  	 	X	  	  	 	36993	  	  	 	X	  	  	 	36999	  	  	 	X	  	  	 	37006	  	  	 	X	  	  	 	37007	  	  	 	X	  	  	 	37008	  	  	 	X	  	  	 	37042	  	  	 	X	  	  	 	37047	  	  	 	X	  	  	 	37048	  	  	 	X	  	
37059	  	 	X	  	  	 	37070	  	  	 	X	  	  	 	37084	  	  	 	X	  	  	 	37087	  	  	 	X	  	  	 	37088	  	  	 	X	  	  	 	37110	  	  	 	X	  	  	 	37120	  	  	 	X	  	  	 	37143	  	  	 	X	  	  	 	37152	  	  	 	X	  	  	 	37158	  	  	 	X	  	
37164	  	 	X	  	  	 	37168	  	  	 	X	  	  	 	37189	  	  	 	X	  	  	 	37192	  	  	 	X	  	  	 	37196	  	  	 	X	  	  	 	37197	  	  	 	X	  	  	 	37203	  	  	 	X	  	  	 	37204	  	  	 	X	  	  	 	37206	  	  	 	X	  	  	 	37209	  	  	 	X	  	
37211	  	 	X	  	  	 	37217	  	  	 	X	  	  	 	37218	  	  	 	X	  	  	 	37247	  	  	 	X	  	  	 	37248	  	  	 	X	  	  	 	37252	  	  	 	X	  	  	 	37271	  	  	 	X	  	  	 	37275	  	  	 	X	  	  	 	37303	  	  	 	X	  	  	 	37305	  	  	 	X	  	
37311	  	 	X	  	  	 	37317	  	  	 	X	  	  	 	37331	  	  	 	X	  	  	 	37332	  	  	 	X	  	  	 	37333	  	  	 	X	  	  	 	37338	  	  	 	X	  	  	 	37345	  	  	 	X	  	  	 	37356	  	  	 	X	  	  	 	37361	  	  	 	X	  	  	 	37369	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	14	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

37372	  	 	X	  	  	 	37380	  	  	 	X	  	  	 	37393	  	  	 	X	  	  	 	37394	  	  	 	X	  	  	 	37396	  	  	 	X	  	  	 	37409	  	  	 	X	  	  	 	37430	  	  	 	X	  	  	 	37440	  	  	 	X	  	  	 	37447	  	  	 	X	  	  	 	37454	  	  	 	X	  	
37460	  	 	X	  	  	 	37463	  	  	 	X	  	  	 	37465	  	  	 	X	  	  	 	37478	  	  	 	X	  	  	 	37485	  	  	 	X	  	  	 	37493	  	  	 	X	  	  	 	37499	  	  	 	X	  	  	 	37508	  	  	 	X	  	  	 	37526	  	  	 	X	  	  	 	37531	  	  	 	X	  	
37535	  	 	X	  	  	 	37537	  	  	 	X	  	  	 	37538	  	  	 	X	  	  	 	37554	  	  	 	X	  	  	 	37556	  	  	 	X	  	  	 	37577	  	  	 	X	  	  	 	37578	  	  	 	X	  	  	 	37581	  	  	 	X	  	  	 	37583	  	  	 	X	  	  	 	37585	  	  	 	X	  	
37589	  	 	X	  	  	 	37601	  	  	 	X	  	  	 	37602	  	  	 	X	  	  	 	37608	  	  	 	X	  	  	 	37618	  	  	 	X	  	  	 	37623	  	  	 	X	  	  	 	37627	  	  	 	X	  	  	 	37628	  	  	 	X	  	  	 	37629	  	  	 	X	  	  	 	37633	  	  	 	X	  	
37636	  	 	X	  	  	 	37637	  	  	 	X	  	  	 	37656	  	  	 	X	  	  	 	37666	  	  	 	X	  	  	 	37668	  	  	 	X	  	  	 	37669	  	  	 	X	  	  	 	37673	  	  	 	X	  	  	 	37678	  	  	 	X	  	  	 	37682	  	  	 	X	  	  	 	37683	  	  	 	X	  	
37685	  	 	X	  	  	 	37686	  	  	 	X	  	  	 	37690	  	  	 	X	  	  	 	37706	  	  	 	X	  	  	 	37715	  	  	 	X	  	  	 	37721	  	  	 	X	  	  	 	37722	  	  	 	X	  	  	 	37723	  	  	 	X	  	  	 	37724	  	  	 	X	  	  	 	37729	  	  	 	X	  	
37730	  	 	X	  	  	 	37733	  	  	 	X	  	  	 	37744	  	  	 	X	  	  	 	37762	  	  	 	X	  	  	 	37763	  	  	 	X	  	  	 	37782	  	  	 	X	  	  	 	37786	  	  	 	X	  	  	 	37796	  	  	 	X	  	  	 	37826	  	  	 	X	  	  	 	37829	  	  	 	X	  	
37840	  	 	X	  	  	 	37866	  	  	 	X	  	  	 	37867	  	  	 	X	  	  	 	37868	  	  	 	X	  	  	 	37875	  	  	 	X	  	  	 	37878	  	  	 	X	  	  	 	37880	  	  	 	X	  	  	 	37881	  	  	 	X	  	  	 	37904	  	  	 	X	  	  	 	37905	  	  	 	X	  	
37938	  	 	X	  	  	 	37943	  	  	 	X	  	  	 	37979	  	  	 	X	  	  	 	37989	  	  	 	X	  	  	 	37998	  	  	 	X	  	  	 	38008	  	  	 	X	  	  	 	38013	  	  	 	X	  	  	 	38020	  	  	 	X	  	  	 	38022	  	  	 	X	  	  	 	38023	  	  	 	X	  	
38024	  	 	X	  	  	 	38026	  	  	 	X	  	  	 	38027	  	  	 	X	  	  	 	38037	  	  	 	X	  	  	 	38054	  	  	 	X	  	  	 	38055	  	  	 	X	  	  	 	38067	  	  	 	X	  	  	 	38068	  	  	 	X	  	  	 	38072	  	  	 	X	  	  	 	38074	  	  	 	X	  	
38078	  	 	X	  	  	 	38080	  	  	 	X	  	  	 	38090	  	  	 	X	  	  	 	38104	  	  	 	X	  	  	 	38110	  	  	 	X	  	  	 	38126	  	  	 	X	  	  	 	38132	  	  	 	X	  	  	 	38135	  	  	 	X	  	  	 	38137	  	  	 	X	  	  	 	38141	  	  	 	X	  	
38143	  	 	X	  	  	 	38145	  	  	 	X	  	  	 	38146	  	  	 	X	  	  	 	38180	  	  	 	X	  	  	 	38181	  	  	 	X	  	  	 	38182	  	  	 	X	  	  	 	38188	  	  	 	X	  	  	 	38209	  	  	 	X	  	  	 	38211	  	  	 	X	  	  	 	38240	  	  	 	X	  	
38242	  	 	X	  	  	 	38243	  	  	 	X	  	  	 	38258	  	  	 	X	  	  	 	38267	  	  	 	X	  	  	 	38271	  	  	 	X	  	  	 	38274	  	  	 	X	  	  	 	38298	  	  	 	X	  	  	 	38317	  	  	 	X	  	  	 	38337	  	  	 	X	  	  	 	38353	  	  	 	X	  	
38362	  	 	X	  	  	 	38380	  	  	 	X	  	  	 	38399	  	  	 	X	  	  	 	38415	  	  	 	X	  	  	 	38416	  	  	 	X	  	  	 	38425	  	  	 	X	  	  	 	38434	  	  	 	X	  	  	 	38437	  	  	 	X	  	  	 	38439	  	  	 	X	  	  	 	38447	  	  	 	X	  	
38449	  	 	X	  	  	 	38451	  	  	 	X	  	  	 	38465	  	  	 	X	  	  	 	38469	  	  	 	X	  	  	 	38472	  	  	 	X	  	  	 	38481	  	  	 	X	  	  	 	38482	  	  	 	X	  	  	 	38483	  	  	 	X	  	  	 	38490	  	  	 	X	  	  	 	38492	  	  	 	X	  	
38494	  	 	X	  	  	 	38518	  	  	 	X	  	  	 	38520	  	  	 	X	  	  	 	38537	  	  	 	X	  	  	 	38538	  	  	 	X	  	  	 	38539	  	  	 	X	  	  	 	38540	  	  	 	X	  	  	 	38542	  	  	 	X	  	  	 	38552	  	  	 	X	  	  	 	38569	  	  	 	X	  	
38571	  	 	X	  	  	 	38572	  	  	 	X	  	  	 	38580	  	  	 	X	  	  	 	38581	  	  	 	X	  	  	 	38598	  	  	 	X	  	  	 	38606	  	  	 	X	  	  	 	38613	  	  	 	X	  	  	 	38624	  	  	 	X	  	  	 	38631	  	  	 	X	  	  	 	38648	  	  	 	X	  	
38652	  	 	X	  	  	 	38658	  	  	 	X	  	  	 	38660	  	  	 	X	  	  	 	38661	  	  	 	X	  	  	 	38670	  	  	 	X	  	  	 	38677	  	  	 	X	  	  	 	38678	  	  	 	X	  	  	 	38680	  	  	 	X	  	  	 	38683	  	  	 	X	  	  	 	38688	  	  	 	X	  	
38692	  	 	X	  	  	 	38700	  	  	 	X	  	  	 	38701	  	  	 	X	  	  	 	38713	  	  	 	X	  	  	 	38721	  	  	 	X	  	  	 	38725	  	  	 	X	  	  	 	38732	  	  	 	X	  	  	 	38743	  	  	 	X	  	  	 	38749	  	  	 	X	  	  	 	38762	  	  	 	X	  	
38771	  	 	X	  	  	 	38777	  	  	 	X	  	  	 	38779	  	  	 	X	  	  	 	38780	  	  	 	X	  	  	 	38785	  	  	 	X	  	  	 	38788	  	  	 	X	  	  	 	38789	  	  	 	X	  	  	 	38790	  	  	 	X	  	  	 	38791	  	  	 	X	  	  	 	38792	  	  	 	X	  	
38802	  	 	X	  	  	 	38819	  	  	 	X	  	  	 	38820	  	  	 	X	  	  	 	38828	  	  	 	X	  	  	 	38829	  	  	 	X	  	  	 	38844	  	  	 	X	  	  	 	38854	  	  	 	X	  	  	 	38855	  	  	 	X	  	  	 	38867	  	  	 	X	  	  	 	38868	  	  	 	X	  	
38874	  	 	X	  	  	 	38878	  	  	 	X	  	  	 	38890	  	  	 	X	  	  	 	38893	  	  	 	X	  	  	 	38894	  	  	 	X	  	  	 	38908	  	  	 	X	  	  	 	38912	  	  	 	X	  	  	 	38923	  	  	 	X	  	  	 	38935	  	  	 	X	  	  	 	38942	  	  	 	X	  	
38947	  	 	X	  	  	 	38949	  	  	 	X	  	  	 	38953	  	  	 	X	  	  	 	38965	  	  	 	X	  	  	 	38973	  	  	 	X	  	  	 	38974	  	  	 	X	  	  	 	38990	  	  	 	X	  	  	 	39001	  	  	 	X	  	  	 	39002	  	  	 	X	  	  	 	39013	  	  	 	X	  	
39014	  	 	X	  	  	 	39030	  	  	 	X	  	  	 	39054	  	  	 	X	  	  	 	39064	  	  	 	X	  	  	 	39065	  	  	 	X	  	  	 	39066	  	  	 	X	  	  	 	39067	  	  	 	X	  	  	 	39082	  	  	 	X	  	  	 	39094	  	  	 	X	  	  	 	39096	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	15	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

 	39097	  	  	 	X	  	  	 	39101	  	  	 	X	  	  	 	39102	  	  	 	X	  	  	 	39108	  	  	 	X	  	  	 	39145	  	  	 	X	  	  	 	39147	  	  	 	X	  	  	 	39148	  	  	 	X	  	  	 	39157	  	  	 	X	  	  	 	39158	  	  	 	X	  	  	 	39159	  	  	 	X	  	
 	39160	  	  	 	X	  	  	 	39161	  	  	 	X	  	  	 	39164	  	  	 	X	  	  	 	39165	  	  	 	X	  	  	 	39167	  	  	 	X	  	  	 	39174	  	  	 	X	  	  	 	39179	  	  	 	X	  	  	 	39190	  	  	 	X	  	  	 	39191	  	  	 	X	  	  	 	39192	  	  	 	X	  	
 	39194	  	  	 	X	  	  	 	39216	  	  	 	X	  	  	 	39220	  	  	 	X	  	  	 	39222	  	  	 	X	  	  	 	39229	  	  	 	X	  	  	 	39230	  	  	 	X	  	  	 	39243	  	  	 	X	  	  	 	39246	  	  	 	X	  	  	 	39250	  	  	 	X	  	  	 	39276	  	  	 	X	  	
 	39291	  	  	 	X	  	  	 	39300	  	  	 	X	  	  	 	39302	  	  	 	X	  	  	 	39303	  	  	 	X	  	  	 	39318	  	  	 	X	  	  	 	39324	  	  	 	X	  	  	 	39326	  	  	 	X	  	  	 	39328	  	  	 	X	  	  	 	39349	  	  	 	X	  	  	 	39357	  	  	 	X	  	
 	39366	  	  	 	X	  	  	 	39367	  	  	 	X	  	  	 	39377	  	  	 	X	  	  	 	39379	  	  	 	X	  	  	 	39398	  	  	 	X	  	  	 	39399	  	  	 	X	  	  	 	39400	  	  	 	X	  	  	 	39401	  	  	 	X	  	  	 	39410	  	  	 	X	  	  	 	39426	  	  	 	X	  	
 	39434	  	  	 	X	  	  	 	39443	  	  	 	X	  	  	 	39448	  	  	 	X	  	  	 	39449	  	  	 	X	  	  	 	39466	  	  	 	X	  	  	 	39480	  	  	 	X	  	  	 	39483	  	  	 	X	  	  	 	39484	  	  	 	X	  	  	 	39500	  	  	 	X	  	  	 	39501	  	  	 	X	  	
 	39502	  	  	 	X	  	  	 	39514	  	  	 	X	  	  	 	39515	  	  	 	X	  	  	 	39517	  	  	 	X	  	  	 	39518	  	  	 	X	  	  	 	39522	  	  	 	X	  	  	 	39534	  	  	 	X	  	  	 	39548	  	  	 	X	  	  	 	39570	  	  	 	X	  	  	 	39573	  	  	 	X	  	
 	39575	  	  	 	X	  	  	 	39577	  	  	 	X	  	  	 	39578	  	  	 	X	  	  	 	39581	  	  	 	X	  	  	 	39586	  	  	 	X	  	  	 	39603	  	  	 	X	  	  	 	39616	  	  	 	X	  	  	 	39617	  	  	 	X	  	  	 	39643	  	  	 	X	  	  	 	39661	  	  	 	X	  	
 	39669	  	  	 	X	  	  	 	9670	  	  	 	X	  	  	 	39671	  	  	 	X	  	  	 	39674	  	  	 	X	  	  	 	39691	  	  	 	X	  	  	 	39692	  	  	 	X	  	  	 	39698	  	  	 	X	  	  	 	39700	  	  	 	X	  	  	 	39701	  	  	 	X	  	  	 	39705	  	  	 	X	  	
 	39713	  	  	 	X	  	  	 	39729	  	  	 	X	  	  	 	39730	  	  	 	X	  	  	 	39741	  	  	 	X	  	  	 	39742	  	  	 	X	  	  	 	39743	  	  	 	X	  	  	 	39744	  	  	 	X	  	  	 	39771	  	  	 	X	  	  	 	39784	  	  	 	X	  	  	 	39797	  	  	 	X	  	
 	39800	  	  	 	X	  	  	 	39806	  	  	 	X	  	  	 	39809	  	  	 	X	  	  	 	39823	  	  	 	X	  	  	 	39825	  	  	 	X	  	  	 	39836	  	  	 	X	  	  	 	39837	  	  	 	X	  	  	 	39852	  	  	 	X	  	  	 	39854	  	  	 	X	  	  	 	39862	  	  	 	X	  	
 	39864	  	  	 	X	  	  	 	39865	  	  	 	X	  	  	 	39873	  	  	 	X	  	  	 	39874	  	  	 	X	  	  	 	39886	  	  	 	X	  	  	 	39887	  	  	 	X	  	  	 	39888	  	  	 	X	  	  	 	39889	  	  	 	X	  	  	 	39890	  	  	 	X	  	  	 	39891	  	  	 	X	  	
 	39895	  	  	 	X	  	  	 	39904	  	  	 	X	  	  	 	39911	  	  	 	X	  	  	 	39912	  	  	 	X	  	  	 	39913	  	  	 	X	  	  	 	39938	  	  	 	X	  	  	 	39948	  	  	 	X	  	  	 	39951	  	  	 	X	  	  	 	39956	  	  	 	X	  	  	 	39962	  	  	 	X	  	
 	39968	  	  	 	X	  	  	 	39970	  	  	 	X	  	  	 	39979	  	  	 	X	  	  	 	39986	  	  	 	X	  	  	 	150000	  	  	 	X	  	  	 	150001	  	  	 	X	  	  	 	150002	  	  	 	X	  	  	 	150003	  	  	 	X	  	  	 	150006	  	  	 	X	  	  	 	150010	  	  	 	X	  	
 	150011	  	  	 	X	  	  	 	150014	  	  	 	X	  	  	 	150015	  	  	 	X	  	  	 	150034	  	  	 	X	  	  	 	150038	  	  	 	X	  	  	 	150054	  	  	 	X	  	  	 	150059	  	  	 	X	  	  	 	150060	  	  	 	X	  	  	 	150065	  	  	 	X	  	  	 	150068	  	  	 	X	  	
 	150069	  	  	 	X	  	  	 	150070	  	  	 	X	  	  	 	150075	  	  	 	X	  	  	 	150090	  	  	 	X	  	  	 	150091	  	  	 	X	  	  	 	150110	  	  	 	X	  	  	 	150116	  	  	 	X	  	  	 	150117	  	  	 	X	  	  	 	150142	  	  	 	X	  	  	 	150159	  	  	 	X	  	
 	150190	  	  	 	X	  	  	 	150195	  	  	 	X	  	  	 	150196	  	  	 	X	  	  	 	150209	  	  	 	X	  	  	 	150215	  	  	 	X	  	  	 	150220	  	  	 	X	  	  	 	150222	  	  	 	X	  	  	 	150231	  	  	 	X	  	  	 	150233	  	  	 	X	  	  	 	150255	  	  	 	X	  	
 	150260	  	  	 	X	  	  	 	150270	  	  	 	X	  	  	 	150271	  	  	 	X	  	  	 	150273	  	  	 	X	  	  	 	150279	  	  	 	X	  	  	 	150294	  	  	 	X	  	  	 	150305	  	  	 	X	  	  	 	150309	  	  	 	X	  	  	 	150312	  	  	 	X	  	  	 	150313	  	  	 	X	  	
 	150314	  	  	 	X	  	  	 	150316	  	  	 	X	  	  	 	150317	  	  	 	X	  	  	 	150324	  	  	 	X	  	  	 	150335	  	  	 	X	  	  	 	150336	  	  	 	X	  	  	 	150339	  	  	 	X	  	  	 	150340	  	  	 	X	  	  	 	150344	  	  	 	X	  	  	 	150362	  	  	 	X	  	
 	150363	  	  	 	X	  	  	 	150366	  	  	 	X	  	  	 	150392	  	  	 	X	  	  	 	150394	  	  	 	X	  	  	 	150397	  	  	 	X	  	  	 	150423	  	  	 	X	  	  	 	150432	  	  	 	X	  	  	 	150434	  	  	 	X	  	  	 	150452	  	  	 	X	  	  	 	150458	  	  	 	X	  	
 	150463	  	  	 	X	  	  	 	150466	  	  	 	X	  	  	 	150479	  	  	 	X	  	  	 	150496	  	  	 	X	  	  	 	150497	  	  	 	X	  	  	 	150512	  	  	 	X	  	  	 	150517	  	  	 	X	  	  	 	150524	  	  	 	X	  	  	 	150528	  	  	 	X	  	  	 	150529	  	  	 	X	  	
 	150540	  	  	 	X	  	  	 	150553	  	  	 	X	  	  	 	150560	  	  	 	X	  	  	 	150561	  	  	 	X	  	  	 	150576	  	  	 	X	  	  	 	150586	  	  	 	X	  	  	 	150587	  	  	 	X	  	  	 	150605	  	  	 	X	  	  	 	150608	  	  	 	X	  	  	 	150617	  	  	 	X	  	
 	150628	  	  	 	X	  	  	 	150633	  	  	 	X	  	  	 	150634	  	  	 	X	  	  	 	150642	  	  	 	X	  	  	 	150658	  	  	 	X	  	  	 	150694	  	  	 	X	  	  	 	150697	  	  	 	X	  	  	 	150698	  	  	 	X	  	  	 	150699	  	  	 	X	  	  	 	150700	  	  	 	X	  	
 	150701	  	  	 	X	  	  	 	150702	  	  	 	X	  	  	 	150703	  	  	 	X	  	  	 	150716	  	  	 	X	  	  	 	150730	  	  	 	X	  	  	 	150735	  	  	 	X	  	  	 	150768	  	  	 	X	  	  	 	150777	  	  	 	X	  	  	 	150780	  	  	 	X	  	  	 	150786	  	  	 	X	  	

													
DUPLICATA	  	    AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 4	  	PAGE :	  	16	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	    CONFORMITY TO THE DESIGN STANDARD REQUIREMENT	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		
 
X	MEANS MOD. FULLY EMBODIED / MEANS MOD. PART EMBODIED (*) O MEANS MOD. NOT EMBODIED (*)	
*	THE DETAIL OF THE MODS PART EMBODIED OR NOT EMBODIED IS GIVEN IN THE PAGES FOLLOWING THE GRIDS	

 	150800	  	  	 	X	  	  	 	150809	  	  	 	X	  	  	 	150810	  	  	 	X	  	  	 	150811	  	  	 	X	  	  	 	150816	  	  	 	X	  	  	 	150820	  	  	 	X	  	  	 	150843	  	  	 	X	  	  	 	150855	  	  	 	X	  	  	 	150856	  	  	 	X	  	  	 	150858	  	  	 	X	  	
 	150898	  	  	 	X	  	  	 	150905	  	  	 	X	  	  	 	150912	  	  	 	X	  	  	 	150916	  	  	 	X	  	  	 	150934	  	  	 	X	  	  	 	150935	  	  	 	X	  	  	 	150938	  	  	 	X	  	  	 	150943	  	  	 	X	  	  	 	150978	  	  	 	X	  	  	 	151010	  	  	 	X	  	
 	151018	  	  	 	X	  	  	 	151020	  	  	 	X	  	  	 	151043	  	  	 	X	  	  	 	151059	  	  	 	X	  	  	 	151061	  	  	 	X	  	  	 	151076	  	  	 	X	  	  	 	151092	  	  	 	X	  	  	 	151099	  	  	 	X	  	  	 	151136	  	  	 	X	  	  	 	151138	  	  	 	X	  	
 	151141	  	  	 	X	  	  	 	151181	  	  	 	X	  	  	 	151192	  	  	 	X	  	  	 	151220	  	  	 	X	  	  	 	151221	  	  	 	X	  	  	 	151249	  	  	 	X	  	  	 	151276	  	  	 	X	  	  	 	151332	  	  	 	X	  	  	 	151350	  	  	 	X	  	  	 	151359	  	  	 	X	  	
 	151362	  	  	 	X	  	  	 	151363	  	  	 	X	  	  	 	151390	  	  	 	X	  	  	 	151452	  	  	 	X	  	  	 	151571	  	  	 	X	  	  	 	151588	  	  	 	X	  	  	 	151797	  	  	 	X	  	  				  				  				  				  				  				

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 2	  	PAGE :	  	1	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	CONSTITUENT ASSEMBLIES	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

PART NUMBER                                         	  	DESCRIPTION	  	SERIAL NUMBER	
D27310001000AT	  	SIDESTICK LH	  	RF	  	5422	
D27310002000AT	  	SIDESTICK RH	  	RF	  	5422	
D5211200300000	  	PASSENGER DOOR FRONT LH	  	LE	  	5026	
D5211200300100	  	PASSENGER DOOR FRONT RH	  	LE	  	5006	
D5211200200000	  	FRONT LEFT DOOR ARM	  	LE	  	5730	
D5211200200100	  	FRONT RH DOOR ARM	  	LE	  	5730	
D5241207700000	  	BOW DOOR FR 3-5	  	XAC	  	11722	
D5241207800000	  	DOOR FR 12-14	  	XAC	  	11722	
D5241207900000	  	DOOR FR 13-15	  	XAC	  	11722	
D5241208000000	  	DOOR FR 21-23	  	XAC	  	11722	
D5281016500000	  	NOSE LANDING GEAR DOOR FWD LH	  	CTO	  	10771	
D5281016500100	  	NOSE LANDING GEAR DOOR FWD RH	  	CTO	  	10777	
D5281016600000	  	NOSE LANDING GEAR DOOR REAR LH	  	CTO	  	10773	
D5281016600100	  	NOSE LANDING GEAR DOOR REAR RH	  	CTO	  	10794	
D5237175000600	  	CARGO COMPARTMENT DOOR FRONT	  	UH	  	14422	
NA28008-13	  	NOSE LANDING GEAR : EQUIPPED LEG	  	MD	  	B3966	
D9251504800000	  	115 VU EQUIPPED	  	PB	  	12569	
D5237236000600	  	CARGO COMPARTMENT DOOR REAR	  	UH	  	14422	
D5227900201200	  	EMERGENCY EXIT DOOR LH	  	UH	  	14422	
D5227900201300	  	EMERGENCY EXIT DOOR RH	  	UH	  	14422	
D5211300300000	  	PASSENGER DOOR REAR LH	  	CAC	  	4473	
D5211300200000	  	REAR LH DOOR ARM	  	CAC	  	4473	
D5211300300100	  	PASSENGER DOOR REAR RH	  	CAC	  	4473	
D5211300200100	  	REAR RH DOOR ARM	  	CAC	  	4473	
D5288016500600	  	MAIN LANDING GEAR DOOR LH	  	FB	  	5461	
D5288016500700	  	MAIN LANDING GEAR DOOR RH	  	FB	  	5466	
D0001039000000	  	REAR MOV. PYLON FAIRING LH	  	SC	  	5436	
4W5198E01	  	ENGINE LH	  	IAE	  	V15557	
745-6001-575	  	DEMOUNTABLE POWER PLANT LH	  	ROH	  	10381001	
745-4000-503	  	FAN COWL LH (ENGINE LH)	  	SBP	  	7362001	
745-4000-510	  	FAN COWL RH (ENGINE LH)	  	SBP	  	7363001	
745-0002-513	  	FAN REVERSER LH (ENGINE LH)	  	ROH	  	1037701	
745-0002-517	  	FAN REVERSER RH (ENGINE LH)	  	ROH	  	1037701	
745-3400-507	  	AIR INLET (NOSE COWL) - LH ENGINE	  	SBP	  	3755001	
D92918000000	  	GENER.HARNESS.PYLON LEFT	  	RK	  	5422	
D0001039000100	  	REAR MOV. PYLON FAIRING RH	  	SC	  	5436	
4W5198E01	  	ENGINE RH	  	IAE	  	V15554	
745-6001-575	  	DEMOUNTABLE POWER PLANT-RH	  	ROH	  	10382001	
745-4000-503	  	FAN COWL LH (ENGINE RH)	  	SBP	  	7364001	
745-4000-510	  	FAN COWL RH (ENGINE RH)	  	SBP	  	7365001	
745-0002-515	  	FAN REVERSER LH (ENGINE RH)	  	ROH	  	10288001	
745-0002-519	  	FAN REVERSER RH (ENGINE RH)	  	ROH	  	10324001	
745-3400-507	  	AIR INLET (NOSE COWL) - RH ENGINE	  	SBP	  	3756001	
D92918000001	  	GENER.HARNESS.PYLON RIGHT	  	RK	  	5422	
D5248550000800	  	ACCESS DOOR LH SECT. 19.1	  	RU	  	14422	
D5248570001000	  	ACCESS DOOR RH SECT. 19.1	  	RU	  	14430	
D5775001700438A	  	SPOILER N 1 LH	  	SAA	  	10001A	

													
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 2	  	PAGE :	  	2	
	  		  		  	A319	  		  		  		
AIRBUS INDUSTRIE	  	CONSTITUENT ASSEMBLIES	  	MSN : 4422	  	DATE : 26 AUG 2010	  		  		

PART NUMBER                                         	  	DESCRIPTION	  	SERIAL NUMBER	
D5775001900438A	  	SPOILER N 2 LH	  	SAA	  	10001A	
D5775002000438A	  	SPOILER N 3 LH	  	SAA	  	10116	
D5775002100438A	  	SPOILER N 4 LH	  	SAA	  	10159	
D5775002200438A	  	SPOILER N 5 LH	  	SAA	  	10116	
D5757065005000	  	INNER FLAP EQUIPPED LH	  	TB	  	14440	
D5755100602801	  	FLAP TRACK N 2 LH	  	DTL	  	10147	
D5755100703201	  	FLAP TRACK N 3 LH	  	DTL	  	10151	
D5755101002801	  	FLAP TRACK N 4 LH	  	DTL	  	10148	
D5765000000238A	  	AILERON LH	  	SAB	  	22528	
D5757200100600	  	FLAP TRACK NO.1 LH	  	FA	  	9772	
D5757420201600	  	OUTER FLAP LH	  	TB	  	14427	
201581001	  	MAIN LANDING GEAR LH	  	MDL	  	4422	
D5746091000200	  	SLAT 1 ASSY LH	  	SA	  	5440P	
D5746092000200	  	SLAT 2 ASSY LH	  	SA	  	5430P	
D5746093000400	  	SLAT 3 ASSY LH	  	SA	  	5420P	
D5746094000400	  	SLAT 4 ASSY LH	  	SA	  	5420P	
D5746095000400	  	SLAT 5 ASSY LH	  	SA	  	5420P	
D5775001700538A	  	SPOILER N 1 RH	  	SAA	  	10002A	
D5775001900538A	  	SPOILER N 2 RH	  	SAA	  	10001B	
D5775002000538A	  	SPOILER N 3 RH	  	CTM	  	10166	
D5775002100538A	  	SPOILER N 4 RH	  	CTM	  	10165	
D5775002200538A	  	SPOILER N 5 RH	  	SAA	  	10019	
D5757065005100	  	INNER FLAP EQUIPPED RH	  	TB	  	14440	
D5755100603001	  	FLAP TRACK N 2 RH	  	DTL	  	10150	
D5755100703401	  	FLAP TRACK N 3 RH	  	DTL	  	10142	
D5755101003001	  	FLAP TRACK N 4 RH	  	DTL	  	10142	
D5765000000338A	  	AILERON RH	  	SAB	  	22517	
D5757200100700	  	FLAP TRACK NO.1 RH	  	FA	  	9773	
D5757420201700	  	OUTER FLAP RH	  	TB	  	14427	
201581002	  	MAIN LANDING GEAR RH	  	MDL	  	4422	
D5746091000300	  	SLAT 1 ASSY RH	  	SA	  	5430P	
D5746092000300	  	SLAT 2 ASSY RH	  	SA	  	5455P	
D5746093000500	  	SLAT 3 ASSY RH	  	SA	  	5428P	
D5746094000500	  	SLAT 4 ASSY RH	  	SA	  	5404P	
D5746095000500	  	SLAT 5 ASSY RH	  	SA	  	5427P	
D0007550400000	  	VTP TOP COMPLETE	  	TS	  	5425	
D5547100400000	  	VERT. STABILIZER RUDDER	  	TS	  	5912	
D2727000104200	  	VERT. STABILIZER RUDDER CONTROL UNIT	  	TV	  	6430	
D5528000200000	  	HORIZONTAL STABILISER ELEVATOR LH	  	IC	  	6878	
D5528000200100	  	HORIZONTAL STABILISER ELEVATOR RH	  	IC	  	6877	

Appendix 4
to Aircraft Lease Agreement
LEASE SUPPLEMENT 
(MSN         )
LEASE SUPPLEMENT dated as of             , 20      (this “ Lease Supplement ”), between CIT AEROSPACE INTERNATIONAL, as Lessor (“ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS), as Lessee (“ Lessee ”).
Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of 30 November 2009 (the “ Lease ” and the defined terms therein being hereinafter used with the same meaning). The Lease provides for the execution and delivery of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof.
The Lease and this Lease Supplement relate to the Aircraft as more precisely described below and in the Acceptance Certificate. A counterpart of the Lease is attached hereto and shall be filed together with this Lease Supplement with the Aeronautics Authority.
In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under and pursuant to the Lease the Aircraft described below, together with the Aircraft Documents described in the Agreement (the “ Delivered Aircra ft”):

Aircraft Model:	  	Airbus A319-100	
		
Manufacturer’s Serial Number:	  	 	
		
Installed Engines	  	Engines Two (2) IAE V2527M-A5	
Manufacturer’s Serial	  	                                              and	
Numbers:	  	 	
		
Mexican Registration Mark	  	 	
2. The Delivery Date of the Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof.
3. By execution and delivery of this Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term subject to the Lease.
4. The amount of Basic Rent for the Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.

Volaris
Airbus A319-100; (1 of 2)	  	App 4-1	  	APPENDIX 4
LEASE SUPPLEMENT	

5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of the Lease, (ii) the Aircraft is insured as required by the Lease, (iii) the representations and warranties of Lessee referred to in Article 9 of the Lease are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease, and (v) the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Lease.
6. THIS LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7. This Lease Supplement may be executed in any number of counterparts; each of such counterparts, shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Lease Supplement; provided, that to the extent, if any, that this Lease Supplement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the “Original”, which shall be identified on the signature page thereof.
8. This Lease Supplement supplements and forms a part of the Lease. The Lease and all Operative Documents, as supplemented hereby, are hereby ratified, approved and confirmed in all respects.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

Volaris
Airbus A319-100; (1 of 2)	  	App 4-2	  	APPENDIX 4
LEASE SUPPLEMENT	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE	    	CIT AEROSPACE INTERNATIONAL	
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	    	Lessor	
Lessee	    		 		
				
By:	 	 	    	By:	 	 	
Name:	 	 	    	Name:	 	 	
Title:	 	 	    	Title:	 	 	
				
By:	 	 	    		 		
Name:	 	 	    		 		
Title:	 	 	    		 		
[MSN         ]
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

Volaris
Airbus A319-100; (1 of 2)	  	App 4-3	  	APPENDIX 4
LEASE SUPPLEMENT	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE	    	CIT AEROSPACE INTERNATIONAL	
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	    	Lessor	
Lessee	    		 		
				
By:	 	 	    	By:	 	 	
Name:	 	 	    	Name:	 	 	
Title:	 	 	    	Title:	 	 	
				
By:	 	 	    		 		
Name:	 	 	    		 		
Title:	 	 	    		 		
[MSN         ]
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

Volaris
Airbus A319-100; (1 of 2)	  	App 4-4	  	APPENDIX 4
LEASE SUPPLEMENT	

Appendix 5
to Aircraft Lease Agreement
PARTICIPATION AGREEMENT
This Participation Agreement is made as of this             day of              20     (the “ Participation Agreement ”)
BETWEEN
C.I.T. LEASING CORPORATION , a corporation organised and existing under the laws of Delaware, whose address and principal place of business is at 505 Fifth Avenue, New York, New York 10017 (“ Buyer ”), and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS) , a company organised and existing under the laws of the United Mexican States, whose address and principal place of business is at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).
RECITALS
(A) Pursuant to the Airbus A320 Family and A350 Purchase Agreement dated as of August 17, 2005 between CIT Leasing and Airbus S.A.S. (“ Airbus ”), as further amended (the “ Purchase Agreement ”), Buyer has agreed to purchase from Airbus certain Airbus A319-100 aircraft, including the aircraft bearing as of today manufacturer’s serial number [    ] and scheduled for delivery in the month of August 2010 (the “ Aircraft ”);
(B) Pursuant to a purchase agreement assignment to be entered into between Buyer and CIT Aerospace International, an Irish unlimited company with its registered office at 1 Stokes Place, St. Stephen’s Green, Dublin 2, Ireland (“ Lessor ”) and to be consented to by Airbus, Buyer will assign certain of its rights, title and interests with respect to the Aircraft to Lessor (including, without limitation, the right to take title to the Aircraft);
(C) Pursuant to the Aircraft Lease Agreement between Lessor and Lessee dated as of 30 November 2009 (the “ Lease Agreement ”), Lessor has agreed to lease the Aircraft to Lessee;
(D) Buyer and Lessee have agreed to enter into this Participation Agreement.
IT IS NOW HEREBY AGREED AS FOLLOWS:
1. Authorisation .
(a) Delivery : Buyer hereby authorises Lessee to inspect, pursuant to Clause 7.1 of the Purchase Agreement, a copy of which is attached in Appendix 3 hereto, the manufacture of the Aircraft and the materials and parts thereto, and to attend and observe the acceptance tests of the Aircraft referred to in Clause 8.1 of the Purchase Agreement, a copy of which is attached in Appendix 3 hereto.
(b) Customer Support : Buyer hereby authorises Lessee to receive pursuant to Clause 14 of the Purchase Agreement the technical publications set forth in Appendix 2 hereto (collectively the “ Customer Support ”).

Volaris
Airbus A319-100; (1 of 2)	  	App 5-1	  	APPENDIX 5
PARTICIPATION AGREEMENT	

2. Effectivity of Participation Agreement . This Participation Agreement shall be effective from the date hereof until the earliest to occur of (i) receipt by Airbus of written notice from Buyer of the occurrence of an Event of Default as defined in the Lease Agreement, or (ii) the term of the Lease Agreement expires, or (iii) the Lease Agreement is otherwise terminated for any reason, or (iv) the Purchase Agreement (as it relates to the Aircraft) is terminated, or (v) the transfer of title to the Aircraft by Airbus to Buyer or its assignee. Notice of the expiration or termination of the Lease Agreement will be given in writing by Buyer to Airbus (with a copy to Lessee) and notice of the termination of the Purchase Agreement (as it relates to the Aircraft) will be given in writing by Buyer or Lessor to Lessee. Notwithstanding the foregoing, Clauses 3(a) and (b) hereof (and any other Clauses contained herein that are necessary to give continued effect to Clauses 3(a) and (b)) shall continue to be effective after, and shall survive the termination of, this Participation Agreement.
3. Conditions of Participation . This Participation Agreement is made subject to the following conditions:
(a) Lessee hereby agrees to be bound by and to comply with Clauses 7.2 and 8.5 of the Purchase Agreement, copies of which are attached in Appendix 3 hereto, to the extent of (A) injury to or death of any Lessee representative, (B) loss or damage to property of any Lessee representatives and (C) liabilities, damages, losses, costs and expenses of Airbus and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of Lessee’s representatives, as if Lessee had been named “Buyer” of the Aircraft under such agreement.
(b) So long as this Participation Agreement is in full force and effect, Lessee and not Buyer will be responsible for the liabilities and obligations set forth in clause 3(a) above.
(c) For the avoidance of doubt, even while this Participation Agreement is in full force and effect, Buyer, to the exclusion of Lessee, will remain responsible for compliance with Clauses 7.2 and 8.5 of the Purchase Agreement to the extent of (i) injury to or death of any Buyer representative, (ii) loss or damage to property of any Buyer representative and (iii) liabilities, damages, losses, costs and expenses of Airbus and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of Buyer’s representatives.
(d) Except with respect to events occurring prior to termination of the Participation Agreement, upon termination of this Participation Agreement, Buyer shall once again be bound by Clauses 7.2 and 8.5 of the Purchase Agreement with respect to the Aircraft.
(e) Other than with respect to the obligations assumed by Lessee under this Participation Agreement as set forth in clause 3(a) above, Buyer shall remain fully bound by all provisions of the Purchase Agreement.
(f) Nothing contained herein shall subject Airbus to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement or, except to the extent set forth in clauses 3(a) and (b) above, modify in any respect whatsoever its contractual rights under the said Purchase Agreement.
(g) Lessee shall not be appointed as Buyer’s agent and shall not be permitted to act on behalf or in place of Buyer without the express written authorisation of Buyer and nothing contained herein shall be construed as to give such authorisation.

Volaris
Airbus A319-100; (1 of 2)	  	App 5-2	  	APPENDIX 5
PARTICIPATION AGREEMENT	

4. Notification .
(a) This Participation Agreement shall be notified to Airbus by courier service promptly after the execution hereof. Airbus shall not be deemed to have received notice of any of the provisions hereof prior to receipt of notice as provided in this clause 4(a) in the form of Appendix 1 hereto. Upon receipt of such notice, Airbus shall promptly countersign and return such acknowledgment to Buyer, as set out in Appendix 1 hereto.
(b) On termination of this Participation Agreement as provided in clause 2 hereof, Buyer shall promptly notify Airbus thereof in writing, addressed as aforesaid. Airbus shall not be deemed to have knowledge of any change in the authority of Buyer or Lessee, as the case may be, or of an Event of Default or the expiration or termination of the term of the Lease Agreement until Airbus has received notice thereof in writing, addressed as aforesaid.
(c) All notices and requests required or authorised under this Participation Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognised courier service or by telecopy directed as set forth below:
Buyer shall be addressed at:
C.I.T. Leasing Corporation
11 West 42 nd Street, 12 th Floor
New York, New York 10036
Attention: Chief Counsel – Transportation Finance
Telephone: +1 (212) 461 5507
Telecopy: +1 (212) 461 5402
Lessee shall be addressed at:
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
Prolongación Paseo de la Reforma No. 490
Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
Attention: Director Jurídico
Telephone: +52 (55) 5261-6412
Telecopy: +52 (55) 5211 9613
Airbus shall be addressed at:
Airbus S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention: V.P. Contracts
Telecopy: +33 5 61 93 49 81
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.

Volaris
Airbus A319-100; (1 of 2)	  	App 5-3	  	APPENDIX 5
PARTICIPATION AGREEMENT	

Such notice or request shall be deemed to be effective in the case of (i) personal delivery, on the date upon which personally delivered, (ii) delivery by courier, on the date of receipt or (iii) telecopy transmission, on the date of confirmation of successful transmission.
5. Further Assurances . Both parties hereto agree that from time to time after the execution and delivery of this Participation Agreement, the parties will, at their own cost, promptly and duly execute and deliver such further documents and instruments and take such further actions which may be necessary in order to effectuate fully the intent and purposes of, and the transactions contemplated by, this Participation Agreement.
6. Modification, Revision and Substitution of Entitlement . For the avoidance of doubt, Lessee agrees that it will not, and does not have the power to enter into any agreement that would amend, modify, supplement, rescind, cancel or terminate the Purchase Agreement without the prior written consent of Buyer and Airbus. Lessee further agrees that it will not assign or delegate to any third party the rights granted to it, or the performance of the obligations imposed on it, under this Participation Agreement without the prior consent of Buyer and Airbus, which consent shall not be unreasonably withheld. Nothing contained herein shall be interpreted to limit, or restrict in any manner, the right or obligation of Buyer to perform its obligations or exercise its rights under the Purchase Agreement with respect to the manufacture or delivery of the Aircraft.
7. Confidential Treatment . Lessee agrees that it will not disclose, directly or indirectly, any of the terms of this Participation Agreement and/or the Purchase Agreement to any third party without the prior written consent of Buyer and Airbus except (a) as required by applicable law or governmental regulation or (b) to Lessee’s professional advisors. Any disclosure as contemplated by clause (b) of the preceding sentence shall include a requirement that the entity to which such information is disclosed shall be subject to obligations of non-disclosure substantially the same as those contained herein.
8. Amendments . This Participation Agreement shall not be amended, modified, supplemented or terminated except in a writing signed by each party hereto and acknowledged by Airbus.
9. Counterparts . This Participation Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
10. Severability . The covenants, warranties, representations and agreements contained herein are separate and severable and the invalidity or unenforceability of any one or more such covenants, warranties, representations or agreements shall not affect the validity or enforceability of any other covenant, warranty, representation or agreement contained herein.
11. Entire Agreement . This Participation Agreement constitutes, on and as of the date hereof, the entire agreement of the parties hereto with respect to the subject matter hereof, and all prior or other contemporaneous understanding or agreements, whether written or oral, between the parties hereto with respect to the subject matter hereof are hereby superseded in their entireties.
12 Assignment . The rights and obligations under this Participation Agreement are personal to the parties and shall not be assigned, transferred, sold or otherwise disposed of by either of the parties hereto.
13. Governing Law and Jurisdiction . This Participation Agreement shall be governed by and construed in accordance with the laws of the state of New York. The parties hereto irrevocably agree that the federal or state courts located in the Borough of Manhattan, New York City,

Volaris
Airbus A319-100; (1 of 2)	  	App 5-4	  	APPENDIX 5
PARTICIPATION AGREEMENT	

New York shall have jurisdiction to settle any disputes arising out of or in connection with this Agreement.
IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be executed on their behalf by their duly authorised representatives.

C.I.T. LEASING CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	
					
By:	 	 	 		 	By:	 	 	
Name:	 	 	 		 	Name:	 	 	
Title:	 	 	 		 	Title:	 	 	
					
	 		 		 	By:	 	 	
	 		 		 	Name:	 	 	
	 		 		 	Title:	 	 	

Volaris
Airbus A319-100; (1 of 2)	  	App 5-5	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 1

BY COURIER	  	Date :                      ,	
 
AIRBUS S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention:         V.P. Contracts
Fax:                   +33 5 61 93 49 81
 
Re:	C.I.T. Leasing Corporation / Concesioñaria Vuela Companía de Aviación, S.A. de C. V. (d/b/a Volaris): Participation Agreement	
Dear Sirs,
Pursuant to Clause 4(a) of the Participation Agreement between C.I.T. Leasing Corporation and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) dated as of                      20    , we advise you that, pursuant to the Participation Agreement (a copy of which is attached hereto), Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) has been authorised by Buyer to participate with respect to the production, testing and delivery of the Aircraft. This authorisation shall be effective on acknowledgment of this letter by you.
We confirm for your benefit the provisions of Clauses 3(c), 3(d), 3(e) and 3(f) contained therein.

Yours faithfully,	

for and on behalf of
C.I.T. Leasing Corporation	
cc: Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris)
Airbus S.A.S. confirms receipt of this
notice and agrees to the terms of Clause 3
of the Participation Agreement.

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

Volaris
Airbus A319-100; (1 of 2)	  	App 5-6	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 2
TECHNICAL PUBLICATIONS
As listed in Exhibits              and              to the Purchase Agreement and set forth on the following              (    ) pages.

Volaris
Airbus A319-100; (1 of 2)	  	App 5-7	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 3
Copies of Clauses 7.1, 7.2, 8.1 and 8.5 of the Purchase Agreement

Volaris
Airbus A319-100; (1 of 2)	  	App 5-8	  	APPENDIX 5
PARTICIPATION AGREEMENT	

Appendix 6A
to Aircraft Lease Agreement
LESSOR’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-100
MSN             
Lease Execution Date: 30 November 2009
Scheduled Delivery Date: August 2010

Item
    No.    	  	Description	  	Date Due	  	Status	
1.	  	Chattel Paper Original of Lease (ONE COPY ONLY – DELIVERED TO LESSOR)	  	Lease Execution Date	  		
				
2.	  	Lease Agreement, with Lessee’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
3.	  	Participation Agreement	  	Lease Execution Date	  		
				
4.	  	Guarantee, with Guarantor’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
5.	  	Opinion of Lessee’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
6.	  	Opinion of Guarantor’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
7.	  	Powers of Attorney evidencing the appointment of Lessee’s and Guarantor’s Agent for Service of Process pursuant to Section 26.3 of the Lease and Section 15 of the Guarantee, respectively, together with Powers of Attorney evidencing such appointment, duly notarised under and pursuant to Mexican Law	  	Lease Execution Date	  		
				
8.	  	Written evidence of company action authorising Lessee’s lease of the Aircraft and execution, delivery and performance of the Lease	  	Seven (7) Business Days after Lease Execution	  		
				
9.	  	Written evidence of company action authorising Guarantor’s execution, delivery and performance of the Guarantee	  	Seven (7) Business Days after Lease Execution	  		

Volaris
Airbus A319-100; (1 of 2)	  	App 6-1	  	APPENDIX 6
CONDITIONS PRECEDENT / POST-DELIVERY ITEMS	

							
    Item    
No.	  	Description	  	Date Due	  	Status	
10.	  	Incumbency Certificate of person or persons authorised to execute the Lease and related Operative Documents on behalf of Lessee	  	Seven (7) Business Days after Lease Execution	  		
				
11.	  	Incumbency Certificate of person or persons authorised to execute the Guarantee on behalf of Guarantor	  	Seven (7) Business Days after Lease Execution	  		
				
12.	  	Security Deposit installment of ***** due under Section 2.2 of Appendix 2B	  	04 January 2010	  		
				
13.	  	Pledge Agreements as required under Sections 4.2 and 13.3(a)(i)	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
14.	  	Such financial information concerning each of Lessee and Guarantor and other documents and matters incident to the foregoing as Lessor may reasonably request, all in a form reasonably satisfactory to Lessor	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
15.	  	Power of Attorney evidencing the authority of Lessee’s representatives designated to accept delivery of the Aircraft and execute the Lease Supplement and Acceptance Certificate on behalf of Lessee at Delivery, duly notarised under and pursuant to Mexican Law	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
16.	  	Letter of Undertaking executed by independent aircraft insurance brokers and, if applicable, reinsurance brokers, each acceptable to Lessor, together with certificates of insurance and, if applicable, reinsurance, evidencing the insurances required to be maintained by Lessee under the Lease	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
17.	  	Application for Registration of the Aircraft with the DGAC duly executed by Lessee, together with the Lease and all other relevant Operative Documents to be recorded thereunder and Spanish translations thereof, certified by a court-approved translator	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
18.	  	Evidence of Lessee having registered as a Transacting User Entity (“TUE”) with the IR and provision of the DGAC access codes necessary in order to complete the appropriate IR registrations. In connection with the foregoing, Lessor shall cooperate with Lessee to obtain the DGAC access codes and shall provide Lessee with such documents as Lessee may reasonably request in connection with the foregoing.	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
19.	  	First payment of Basic Rent in accordance with Section 3.2 of the Lease	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
				
20.	  	Security Deposit balance payment due under Section 2.3 of Appendix 2B	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Volaris
Airbus A319-100; (1 of 2)	  	App 6-2	  	APPENDIX 6
CONDITIONS PRECEDENT / POST-DELIVERY ITEMS	

							
    Item    
No.	  	Description	  	Date Due	  	Status	
21.	  	Acceptance Certificate	  	Delivery Date	  		
				
22.	  	Chattel Paper Original of Lease Supplement (ONE COPY ONLY – DELIVERED TO LESSOR)	  	Delivery Date	  		
				
23.	  	Lease Supplement, with Lessee’s signatures ratified before a notary public	  	Delivery Date	  		
				
24.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / LBA	  	Delivery Date	  		
				
25.	  	Copy of Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority	  	Delivery Date	  		
				
26.	  	Copy of provisional Certificate of Registration for the Aircraft	  	Delivery Date	  		
				
27.	  	Evidence of Registration of the Aircraft, the Lease and related interests with the IR	  	Delivery Date	  		
				
28.	  	An opinion in a form acceptable to Lessor from Lessor’s special counsel in the State of Registration confirming, among other things, the due and proper registration of the Aircraft in the State of Registration and with the IR.	  	Delivery Date	  		
				
29.	  	An irrevocable power of attorney executed by Lessee in a form prescribed by Lessor, appointing Lessor or any other Person selected by Lessor as attorney-in-fact for Lessee to take all necessary actions on behalf of Lessee to obtain possession of and to remove the Aircraft from the jurisdiction of the State of Registration and from any other jurisdiction where the Aircraft may be located and/or registered and to de-register the Aircraft from the Register upon the cancellation, termination, or expiration of this Lease	  	Delivery Date	  		
				
30.	  	A duly executed Irrevocable De-Registration and Export Request Authorisation ( IDERA ) for filing with the IR	  	Delivery Date	  		
				
31.	  	Letters addressed (1) to air traffic control authority in the State of Registration, (2) in blank to relevant air traffic control authorities and airport authorities where Lessee operates or intends to operate the Aircraft and (3) to Eurocontrol (if the Aircraft is operated to or over Europe), authorising the recipient to issue to Lessor, upon Lessor’s request made from time to time, a statement of account of all sums due by Lessee to the authority with respect to the Aircraft and which letters shall survive the cancellation, termination and expiration of the Lease	  	Delivery Date	  		
				
32.	  	A certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or an Irish Revenue Form VAT 60B (or applicable successor form) with respect to the Lease, as requested by Lessor, to enable Lessor to comply with applicable Laws relating to VAT	  	Delivery Date	  		
				
33.	  	Follow up opinion of Lessee’s counsel in form and substance reasonably acceptable to Lessor	  	Delivery Date	  		
				
34.	  	Such other certificates, documents, opinions and agreements relating to the transactions contemplated by or related to this Lease and the other Operative Documents, as may be necessary or reasonably requested by Lessor	  	Delivery Date	  		
				
35.	  	Copy of permanent Certificate of Registration for the Aircraft showing due registration in the name of Lessor as owner and lessor and Lessee as lessee	  	Ninety (90) days following the Delivery Date	  		

Volaris
Airbus A319-100; (1 of 2)	  	App 6-3	  	APPENDIX 6
CONDITIONS PRECEDENT / POST-DELIVERY ITEMS	

Appendix 6B
to Aircraft Lease Agreement
LESSEE’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-100
MSN             
Lease Execution Date: 30 November 2009
Scheduled Delivery Date: August 2010

    Item    
No.	  	Description	  	Date Due	  	Status	
1.	  	Lease Agreement	  	Lease Execution Date	  		
				
2.	  	Power of Attorney evidencing the authority of Lessor’s representatives designated to execute the Lease and the Lease Supplement on behalf of Lessor	  	Lease Execution Date	  		
				
3.	  	Lease Supplement	  	Delivery Date	  		
				
4.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / LBA	  	Delivery Date	  		
				
5.	  	Assignment of Warranties (Airframe) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
6.	  	Consent to Assignment of Warranties (Airframe) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
7.	  	Assignment of Warranties and Product Support (Engines) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
8.	  	Notice to Engine Manufacturer of Assignment of Warranties and Product Support (Engines) substantially in the form appearing in Appendix 8	  	Delivery Date	  		

Volaris
Airbus A319-100; (1 of 2)	  	App 6-4	  	APPENDIX 6
CONDITIONS PRECEDENT / POST-DELIVERY ITEMS	

Appendix 7
to Aircraft Lease Agreement
RETURN ACCEPTANCE CERTIFICATE
CIT Aerospace International (“ Lessor ”) hereby acknowledges, pursuant to the Aircraft Lease Agreement made between Lessor and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”) dated as of 30 November 2009 (the “ Lease ”), that on this              day of 20        , at             :             GMT it has received from Lessee possession of the following Aircraft. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
 
 	(a)	Airframe	
Aircraft Model:                                                    Airbus A319-100
Manufacturer’s Serial Number:                     
Airframe Maintenance Status:
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last 6 Year HMV Check:                      
Total Cycles Since Last 6 Year HMV Check:                     
Date Last 6 Year HMV Check Accomplished:                     
Total Flight Hours Since Last 12 Year HMV Check:                     
Total Cycles Since Last 12 Year HMV Check:                     
Date Last 12 Year HMV Check Accomplished:                     
Total Flight Hours Since Last C-Check:                     
Total Cycles Since Last C-Check:                     
Date Last C-Check Accomplished:                     
 
 	(b)	Engines (Installed)	
Engine Type                                                           IAE V2527M-A5
Manufacturer’s Serial                                                                     and
Numbers:                                                                                              
Maximum Takeoff Thrust                                                        lbs.
Rating:

Volaris
Airbus A319-100; (1 of 2)	  	App 7-1	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Engines Maintenance Status:
Position 1
ESN:                     
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Engine Restoration:                     
Total Cycles Since Last Engine Restoration:                     
Date of Last Engine Restoration:                     
Position 2
ESN:                     
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Engine Restoration:                     
Total Cycles Since Last Engine Restoration:                     
Date of Last Engine Restoration:                     
 
 	(c)	APU (Installed)	
APU Manufacturer & Model:                                                                                
Manufacturer’s Serial Number:                                                                and 
                                                                                                                            
APU Maintenance Status:
Total APU Hours:                     
Total APU Cycles:                     
Total APU Hours Since Last Overhaul:                     
Total APU Cycles Since Last Overhaul:                     
Date of Last Overhaul:                     
 
 	(d)	Landing Gear (Installed)	
Manufacturer’s Serial Numbers:         Left Main:                     
                                                                  Right Main:                      
                                                                  Nose:                                 
Landing Gear Maintenance Status:
Left Main
Total Flight Hours:                      
Total Cycles:                     
Total Flight Hours Since Last Overhaul:                     
Total Cycles Since Last Overhaul:                     
Date of Last Overhaul:                     

Volaris
Airbus A319-100; (1 of 2)	  	App 7-2	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Right Main
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Overhaul:                     
Total Cycles Since Last Overhaul:                     
Date of Last Overhaul:                     
Nose
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Overhaul:                     
Total Cycles Since Last Overhaul:                     
Date of Last Overhaul:                     
 
 	(e)	Interior Configuration	
Seating                                                                                                                                                         
Lavatories                                                                                                                                                   
Galleys                                                                                                                                                         
Passenger Service Units                                                                                                                         
PSIU                                                                                                                                                             
 
 	(f)	Aircraft Documents and Other Equipment	
As described in Attachment 1 to this Return Acceptance Certificate.
 
 	(g)	Fuel On Board	
                                              kgs.
 
2.	Maintenance Reserves (check one)	
             There are no claims for reimbursement from the Maintenance Reserves outstanding and unpaid as of the date hereof.
or
 
 	            	Claims for reimbursement from the Maintenance Reserves are outstanding as of the date hereof and are itemised or otherwise described in Attachment [            ] hereto.	
 
3.	Return Acceptance	
The Aircraft and Aircraft Documents are hereby accepted by Lessor for return under the Lease subject to (i) the provisions of the Lease and (ii) the correction by Lessee (or procurement by Lessee at Lessee’s cost) within              days following the date hereof of the discrepancies specified in Attachment 3 hereto.

Volaris
Airbus A319-100; (1 of 2)	  	App 7-3	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

4.	Termination of Lease	
Subject to the following paragraph, the Lease is hereby terminated without prejudice to Lessee’s continuing obligations and Lessor’s continuing rights under the Lease.
 
5.	Lessee’s Representations and Warranties	
Lessee represents and warrants that during the Lease Term all maintenance and repairs to the Aircraft and each Item of Equipment were performed in accordance with the requirements of the Lease.
 
6.	Governing Law	
THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

Volaris
Airbus A319-100; (1 of 2)	  	App 7-4	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance Certificate to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE	    	CIT AEROSPACE INTERNATIONAL	
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	    	Lessor	
Lessee	    		 		
				
By:	 	 	    	By:	 	 	
Name:	 	 	    	Name:	 	 	
Title:	 	 	    	Title:	 	 	
				
By:	 	 	    		 		
Name:	 	 	    		 		
Title:	 	 	    		 		
[MSN             ]

Volaris
Airbus A319-100; (1 of 2)	  	App 7-5	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 1 to Return Acceptance Certificate
Aircraft Documents and Equipment Inventory
Aircraft Documents
 
 	1.	                	
 
 	2.	                	
 
 	.	                	
 
 	.	                	
 
 	.	                	
Aircraft Manuals
 
 	1.	                	
 
 	2.	                	
 
 	.	                	
 
 	.	                	
 
 	.	                	
Loose Equipment
 
 	1.	                	
 
 	2.	                	
 
 	.	                	
 
 	.	                	
 
 	.	                	
Avionics Inventory
 
 	1.	                	
 
 	2.	                	
 
 	.	                	
 
 	.	                	
 
 	.	                	
Engine Life Limited Parts Status
Engine Serial Number: [                    ]
Engine Serial Number: [                    ]

Volaris
Airbus A319-100; (1 of 2)	  	App 7-6	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 2 to Return Acceptance Certificate
Maintenance Reserve Claims Outstanding at Return
[ Write “None” if there are no claims outstanding ]

Type of Work	  	Service Provider	  	Invoice Amount	
—  	  	—  	  	—  	

Volaris
Airbus A319-100; (1 of 2)	  	App 7-7	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 3 to Return Acceptance Certificate
Aircraft Discrepancies
[ Write “None” if there are no Aircraft Discrepancies ]

Volaris
Airbus A319-100; (1 of 2)	  	App 7-8	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Appendix 8
to Aircraft Lease Agreement
FORMS

Form 1	 	Form of Aircraft Utilisation Report	
Form 2	 	Form of Quiet Enjoyment Letter	
Form 3	 	Form of Recognition of Rights (Engines)	
Form 4	 	Maintenance Status Report	
Form 5	 	Reserved	
Form 6	 	Form of ATC Authorisation Letter	
Form 7	 	Form of Lease Termination Agreement	
Form 8	 	Form of Assignment and Consent – Warranties (Airframe)	
Form 9	 	Form of Assignment and Consent – Warranties (Engines)	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-1	  	APPENDIX 8
FORMS	

Form 1
Form of Aircraft Utilisation Report
UTILISATION REPORT
Lessee: Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris)
Date of Report:                      20    
Report Period:                      20     through                      20    
General Information

Aircraft Model: Airbus A319-100	 		  	Engine Type: IAE V2527M-A5	
			
Airframe Serial Number:                            	 		  	Lease Engine 1 Serial Number:                            	
			
Lease APU Serial Number:                            	 		  	Lease Engine 2 Serial Number:                            	
			
Lease Nose Landing Gear S/N:                            	 		  	Lease Left Main Gear S/N:                            	
			
	 		  	Lease Right Main Gear S/N:                            	
			
Installed 1 Engine S/N:                            	 		  	Installed 2 Engine S/N:                            	
			
Installed APU S/N:                            	 		  	Installed Nose Landing Gear S/N:                            	
			
Installed Left Main Gear S/N:                            	 		  	Installed Right Main Gear S/N:                            	
Utilisation Information – Airframe

Airframe Flight Hours:                            	 		  	Airframe Cycles:                            	
			
Airframe Total FHSN:                            	 		  	Airframe Total CSN:                            	
			
Airframe Base:                            	 		  	Airframe Status:                            	
	 		  	[In Service; Check; etc.]	
Utilisation Information –Engines
Lease Engine 1 – Serial Number                         

FH During Report Period:                            	 		  	Cycles During Report Period:                            	
			
FH:Cycle Utilisation Ratio:      :1	 		  	Cycles Since New:                            	
			
FH Since New:                            	 		  	Cycles Since Restoration:                            	
			
FH Since Restoration:                            	 		  	Installed On MSN:                            	
			
Airframe Position:                            	 		  	Airframe Reg’n Mark:                            	
	
Airframe Owner (if not Owner):                                                                                                                                                      	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-2	  	APPENDIX 8
FORMS	

			
Removed From Service:                  (Date)	  	Current Location:                 	
	
Reason for Removal:                                                                                                                                                                	
Lease Engine 2 – Serial Number                 

FH During Report Period:                 	  	Cycles During Report Period:                 	
		
FH:Cycle Utilisation Ratio:      :1	  	Cycles Since New:                 	
		
FH Since New:                 	  	Cycles Since Restoration:                 	
		
FH Since Restoration:                 	  	Installed On MSN:                 	
		
Airframe Position:                 	  	Airframe Reg’n Mark:                 	
	
Airframe Owner (if not Owner):                                                                                                                                                	
		
Removed From Service:                  (Date)	  	Current Location:                 	
	
Reason for Removal:                                                                                                                                                                      	
Installed Engine 1 – Serial Number                  (if not Lease Engine)

Engine Owner:                 	  	Airframe Position:                 	
Installed Engine 2 – Serial Number                  (if not Lease Engine)

Engine Owner:                 	  	Airframe Position:                 	
Utilisation Information –APU
Lease APU – S/N                     

		
APU Hours During Report Period:                 	  	APU Cycles During Report Period:                 	
		
APU Hours Since New:                 	  	APU Cycles Since New:                 	
		
APU Hours Since Overhaul:                 	  	APU Cycles Since Overhaul:                 	
		
Installed On MSN:                 	  	Removed From Service:                  (Date)	
		
Airframe Reg’n Mark:                 	  	Current Location:                 	
	
Airframe Owner (if not Owner):                                                                                                                                                 	
	
Reason for Removal:                                                                                                                                                                  	
Installed APU – Serial Number                  (if not Lease APU)

APU Owner:                 	
Utilisation Information –Landing Gear
Lease Nose Landing Gear – S/N                 

Volaris
Airbus A319-100; (1 of 2)	  	App 8-3	  	APPENDIX 8
FORMS	

			
		
FH During Report Period:                 	  	Cycles During Report Period:                 	
		
FH Since New:                 	  	Cycles Since New:                 	
		
FH Since Overhaul:                 	  	Cycles Since Overhaul:                 	
		
Removed From Service:                  (Date)	  	Current Location:                 	
	
Reason for Removal:                                                                                                                                                        	
Installed Nose Landing Gear – S/N                  (if not Lease Nose Landing Gear)

NLG Owner:                     	
Lease Left Main Landing Gear – S/N                 

FH During Report Period:                 	  	Cycles During Report Period:                 	
		
FH Since New:                 	  	FH Since Restoration:                 	
		
Cycles Since New:                 	  	Cycles Since Restoration:                 	
		
Removed From Service:                  (Date)	  	Current Location:                 	
	
Reason for Removal:                                                                                                                                                            	
Installed Left Main Landing Gear – S/N                  (if not Lease Left Main Landing Gear)

Left MLG Owner:                 	
Lease Right Main Landing Gear – S/N                 

FH During Report Period:                 	  	Cycles During Report Period:                 	
		
FH Since New:                 	  	FH Since Restoration:                 	
		
Cycles Since New:                 	  	Cycles Since Restoration:                 	
		
Removed From Service:                  (Date)	  	Current Location:                 	
	
Reason for Removal:                                                                                                                                                            	
Installed Right Main Landing Gear – S/N                  (if not Lease Right Main Landing Gear)

Right MLG Owner:                 	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-4	  	APPENDIX 8
FORMS	

	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)

(Name)
 
(Title)
 
(Date)	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-5	  	APPENDIX 8
FORMS	

Form 2
Form of Quiet Enjoyment Letter

To:	  	[ — ]	
		
Dated:	  	[ — ]	
Airbus A319-100, msn [ — ], registration mark [ — ] (the “Aircraft”) and the Aircraft Lease Agreement dated as of 30 November 2009 between CIT Aerospace International (“Lessor”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“Lessee”) relating to the Aircraft (the “Lease”)
Dear Sirs
1. Capitalised terms in this letter have the meanings given to them in the Lease.
2. Pursuant to Section 10.2(b) of the Lease, we confirm to you that neither we nor any person lawfully claiming through us will interfere with the quiet possession and use of the Aircraft by Lessee or any Permitted Sublessee throughout the Lease Term so long as no Event of Default has occurred and is continuing.
3. The foregoing undertaking is not to be construed as restricting our rights to dispose of the Aircraft in certain circumstances to such persons and on such terms as we consider appropriate, subject to any applicable provisions of the Lease and/or the Acknowledgement. However, if we become entitled to exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing we will dispose of the Aircraft expressly subject to and in accordance with the provisions of the Lease provided that the purchaser issues an undertaking to you that it will not interfere with the quiet possession and use of the Aircraft by you throughout the remaining term of the Lease and will be bound by the terms of the Lease as if named as Lessor thereunder.
4. To the extent we receive any funds as Security Deposits and/or Maintenance Reserves, we will hold, apply, retain and return such amounts as provided in the Lease and in exercising our rights under or in respect of the Lease, we shall be bound by the terms and conditions thereof.
5. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

[                             ]
 
By:                                                                                                   
Name:                                                                                             
Title:                                                                                               	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-6	  	APPENDIX 8
FORMS	

Form 3
Form of Recognition of Rights (Engines)
[ON THE LETTERHEAD OF THE OWNER/LESSOR/SECURED PARTY
OF THE AIRFRAME ON WHICH THE ENGINE IS BEING INSTALLED]
[INSERT DATE]
CIT Aerospace International
3 George’s Dock
IFSC
Dublin 1
Ireland
Attention: Chief Counsel
 
Re:	Acknowledgment of ownership of and waiver of lien interest in one (1) IAE V2527M-A5 Aircraft Engine Bearing Manufacturer’s Serial Number              (the “ Engine ”)	
Dear Sirs:
The undersigned,                      (“ Secured Party ”), is the legal and beneficial owner of one (1) Airbus A3 [        ]- [        ] aircraft bearing manufacturer’s serial number [            ] and [            ] registration mark [            ] (“ Secured Aircraft ”), which aircraft is on lease to Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”). [NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S INTEREST AS NECESSARY]
We understand that, pursuant to an aircraft lease agreement dated 30 November 2009 (“ Aircraft Lease ”) between CIT Aerospace International, as lessor (“ CIT ”) and Lessee, you are the owner of and have leased one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number [        ] and Mexican registration mark [            ] to Lessee and which lease includes the lease of one (1) IAE V2527M-A5 aircraft engine bearing manufacturer’s serial number [            ] (the “ Leased Engine ”). We have been advised by Lessee that it desires to install the Leased Engine on the Secured Aircraft.
At the request of Lessee and for its benefit and the benefit of CIT, Secured Party hereby (i) acknowledges and agrees that CIT is the owner and lessor to Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that Secured Party has not acquired or claimed nor will it acquire or claim, and hereby waives, releases and renounces any right, title or interest in the Leased Engine by reason of the Leased Engine being installed on the Secured Aircraft at any time and that the foregoing shall apply notwithstanding any contrary laws of accession, or the like, which may from time to time be enacted or in effect in any jurisdiction where the Leased Engine and/or Secured Aircraft may be located, and the same are expressly waived by Secured Party hereby, (iii) agrees not to impede or interfere with the exercise by CIT of its rights and remedies to regain possession of the Leased Engine pursuant to the Aircraft Lease, (iv) agrees that the foregoing acknowledgements and agreements of Secured Party shall inure to the benefit of CIT’s successors and assigns, and (v) if requested by CIT, consents to and agrees to cooperate with CIT (at no cost to Secured Party) in connection with the filing of any notices and registrations, in

Volaris
Airbus A319-100; (1 of 2)	  	App 8-7	  	APPENDIX 8
FORMS	

form and substance reasonably satisfactory to Secured Party, of CIT’s interest in the Leased Engine with the applicable governmental authorities in the country of registration of the Secured Aircraft, the country of Lessee’s organisation and such other jurisdiction as CIT may deem appropriate and, if applicable, the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Sincerely,

Volaris
Airbus A319-100; (1 of 2)	  	App 8-8	  	APPENDIX 8
FORMS	

Form 4
Maintenance Status Report – Required Information
 
1.	Airframe	
 
 	a.	Aircraft and Appliances Airworthiness Directive Summaries	
 
 	b.	Aircraft times and cycles log	
 
 	c.	Airframe Utilisation Report	
 
 	d.	Avionics Computerised Inventory	
 
 	e.	CPCP Summary as may be applicable	
 
 	f.	Dent and Damage Chart	
 
 	g.	Emergency Equipment Layout Drawing	
 
 	h.	Fire Blocking Certification	
 
 	i.	Maintenance last done next due task listing	
 
 	j.	Life Limited Parts Summary	
 
 	k.	Interior Layout configuration	
 
 	l.	Maintenance Program Summary and Time Interval Summary-Upon request	
 
 	m.	Service Bulletin, Engineering Orders, Major Repair and Alteration Summaries	
 
 	n.	Scheduled Maintenance Checks Tally Sheets	
 
 	o.	Time Controlled Components Summary	
 
2.	Engines	
 
 	a.	Airworthiness Directive Summaries	
 
 	b.	Last Shop visit/Engine Restoration Mini Package	
 
 	c.	Current Disk Sheet	
 
 	d.	Date, Flight Hours and Cycles of Engine at last Engine install (including Airframe Flight Hours and Cycles)	
 
 	e.	Service Bulletin Status / Engineering Orders and MOD Summaries	
 
 	f.	Trend Monitor Readout for the three (3) months prior to the report	
 
3.	Landing Gear	
 
 	a.	Aircraft date, Flight Hours and Cycles at installation	
 
 	b.	Landing Gear (each) Overhaul/restoration date, Flight Hours and Cycles.	
 
 	c.	Life Limited Parts Summary	
 
 	d.	Last shop visit/Overhaul report	
 
4.	APU	
 
 	a.	Airworthiness Directive Summary	
 
 	b.	Last shop visit/Overhaul mini package report	
 
 	c.	Flight Hours and Cycles formula (as applicable if Hobbs not installed)	
 
 	d.	Aircraft/ APU date, APU Hours and APU Cycles at installation.	
 
 	e.	Life Limited Parts Summary	
 
 	f.	Service Bulletin Summary	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-9	  	APPENDIX 8
FORMS	

Form 5
[Reserved]

Volaris
Airbus A319-100; (1 of 2)	  	App 8-10	  	APPENDIX 8
FORMS	

Form 6
Form of Air Traffic Control and Airport Authorities Letters
[LESSEE’S LETTERHEAD]
To:             All Relevant Air Traffic Control and Airport Authorities
Mexican General Department of Civil Aeronautics*
( Dirección General de Aeronáutica Civil )
Eurocontrol Organisation for the Safety of Air Navigation
Rue de la Fusée, 96
B-1130 Bruxelles
Belgium
* To be used with the DGAC or any other Mexican authority only following the occurrence and continuance of an Event of Default
 
 	Re:	Air Navigation / Airport Charges – Airbus A319-100 Aircraft with Manufacturer’s Serial Number              and Mexican Registration Mark [*] (the “ Aircraft ”)	
Ladies and Gentlemen,
We hereby confirm that Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (the “ Lessee ”) has entered into an Aircraft Lease Agreement with CIT Aerospace International (“ CIT ”) dated as of 30 November 2009 (the “ Lease ”) with respect to the above-described Aircraft.
We wish to enable CIT, as lessor, to monitor the value of air navigation and other charges incurred by us in relation to the Aircraft.
We hereby irrevocably and unconditionally authorise you to release to CIT, as lessor, (or its duly authorised representatives) upon its request from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and to the extent the same might result in a lien upon the Aircraft, all other aircraft operated by Lessee.
This authorisation may only be revoked or amended by a written instruction signed by us and CIT.
Yours faithfully,
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)
By:                                                                  
Name:
Title:
By:                                                                  
Name:
Title:

Volaris
Airbus A319-100; (1 of 2)	  	App 8-11	  	APPENDIX 8
FORMS	

Form 7
Form of Lease Termination Agreement
LEASE TERMINATION
(MSN [*])
By execution hereof (this “ Lease Termination ”), the undersigned, CIT AEROSPACE INTERNATIONAL (“ CIT ”), as lessor, and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”), as lessee, acknowledge and agree that the Lease Agreement defined and described on Exhibit A attached hereto, has by its terms expired or has otherwise been cancelled or terminated, and release the Equipment, which is also defined and described on Exhibit A attached hereto, from the terms and conditions of such Lease Agreement.
This Lease Termination is without prejudice to the surviving rights of the parties under the Lease Agreement and nothing in this Lease Termination shall relieve either party from its obligations under the Lease Agreement which are still unsatisfied and/or from any of its obligations under the Lease Agreement which may be due after the date of this Lease Termination.
This Lease Termination may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Dated as of this              day of              20    .

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	 	CIT AEROSPACE INTERNATIONAL
Lessor	 		
Lessee	 		 		
						
By:	 	 	 		 	By:	 	 	 		
Name:	 	 	 		 	Name:	 	 	 		
Title:	 	 	 		 	Title:	 	 	 		
						
By:	 	 	 		 		 		 		
Name:	 	 	 		 		 		 		
Title:	 	 	 		 		 		 		

Volaris
Airbus A319-100; (1 of 2)	  	App 8-12	  	APPENDIX 8
FORMS	

EXHIBIT A
The Equipment
[TO BE COMPLETED AT LEASE TERMINATION]
The Lease Agreement
[TO BE COMPLETED AT LEASE TERMINATION]

Volaris
Airbus A319-100; (1 of 2)	  	App 8-13	  	APPENDIX 8
FORMS	

Form 8
Form of Assignment of Warranties and Consent (Airframe)
This Assignment of Warranty and Support Rights is made this          day of              20    (the “ Assignment Agreement ”)
BETWEEN
 
(1)	CIT AEROSPACE INTERNATIONAL, an Irish company, whose office and principal place of business is at 3 George’s Dock, IFSC, Dublin 1, Ireland (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS), a Mexican company whose office and principal place of business is at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).	
 
 	1.	Preamble . In connection with the lease by Lessor to Lessee of one Airbus A319-100 model aircraft bearing manufacturer’s serial number          (the “ Aircraft ”), reference is made to the following documents:	
 
 	(a)	the Airbus A320 Family and A350 Purchase Agreement between C.I.T. Leasing Corporation (“ CIT Leasing ”) and Airbus S.A.S. (“ Airbus ”) dated as of August 17, 2005, as the same may be further amended (the “ Purchase Agreement ”), partially assigned with respect to the Aircraft to Lessor pursuant to which Lessor agreed to purchase the Aircraft;	
 
 	(b)	the Aircraft Lease Agreement between Lessor and Lessee dated 30 November 2009 (the “ Lease Agreement ”); and	
 
 	(c)	the Participation Agreement between CIT Leasing and Lessee dated                     , 200     (the “ Participation Agreement ”).	
 
 	2.	Assignment . Pursuant to the Lease, Lessor has leased the Aircraft to Lessee. Included in such Lease is a commitment by Lessor to assign to Lessee certain warranty and other rights related to the Aircraft under the Purchase Agreement. With effect from the actual delivery date of the Aircraft by Lessor to Lessee in respect of (a) through (c) below, Lessor hereby assigns to Lessee and Lessee accepts the assignment on the terms and conditions specified herein of the benefit of the following rights (the “ Rights ”) under the Articles of the Purchase Agreement indicated below (the “ Assigned Provisions ”) with respect to the Aircraft:	
 
 	(a)	Article 12 (Warranties and Service Life Policy);	
 
 	(b)	Article 13 (Patent and Copyright Indemnity); and	
 
 	(c)	Article 17 (Vendors’ Product Support).	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-14	  	APPENDIX 8
FORMS	

 	3.	Conditions of Assignment . This Assignment Agreement is made subject to the following conditions:	
 
 	(a)	Lessee hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations of the Articles of the Purchase Agreement referred to in Section 2 above (copies of which are attached hereto as Schedule 2) with respect to the exercise of any of the Rights and to be bound by the covenants of the Buyer (as defined in the Purchase Agreement) in the Assigned Provisions to the same extent as if Lessee had been named “Buyer” of the Aircraft under the Purchase Agreement.	
 
 	(b)	Nothing contained herein shall subject Airbus to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, or, except to the extent set forth in section 3(c) below, modify in any respect whatsoever its contractual rights under the Purchase Agreement.	
 
 	(c)	So long as this Assignment Agreement is in full force and effect, Lessee and not Lessor will be responsible for compliance with Articles 12, 13, and 17 of the Purchase Agreement, in each case with respect to the Aircraft. Upon termination of this Assignment Agreement, Lessor shall once again be bound by such Articles with respect to the obligations thereunder, and Lessor shall be entitled to the rights and benefits described in Section 2 above originally received by CIT Leasing in connection with its purchase of the Aircraft from Airbus and assigned to Lessor pursuant to the CIT Assignment.	
 
 	(d)	Other than with respect to the obligations assumed by Lessee under this Assignment Agreement as set forth in section 3(a) above, Lessor shall remain fully bound by all provisions of the Purchase Agreement other than those provisions relating to rights reserved to CIT Leasing pursuant to the CIT Assignment with respect to which CIT Leasing shall remain fully bound by.	
 
 	4.	Reassignment . Upon expiration or termination of the Lease, and provided that Lessee and Lessor shall have furnished Airbus with written notice thereof, upon receipt of such notice by Airbus, the rights contained herein and remaining available on the date of such notice shall automatically be reassigned to Lessor, and in connection therewith Lessee shall execute any and all such acknowledgements or assurances Owner may reasonably require.	
 
 	5.	Assignment by Lessee . The rights of Lessee under this Assignment Agreement in respect of the Purchase Agreement shall not, without the consent of Lessor and Airbus, be further assigned by Lessee.	
 
 	6.	Notification .	
 
 	(a)	It shall be a condition subsequent to this Assignment Agreement that this Assignment Agreement shall, at the expense of Lessor, be notified by Lessor to Airbus within two (2) weeks of the date hereof pursuant to Article 1690 of the French Civil Code.	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-15	  	APPENDIX 8
FORMS	

 	(b)	All notices and requests required or authorised under this Assignment Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognised courier service or by telefax directed as set forth below:	
Lessor shall be addressed at:
CIT Aerospace International
3 George’s Dock
IFSC
Dublin 1, Ireland
Attention: Chief Counsel
Fax: +353 (1) 656 1001
with a copy to:
CIT Aerospace
11 West 42 nd Street
12 th Floor
New York, New York 10036
U.S.A.
Attention: Chief Counsel – Transportation Finance
Fax: +1 (212) 461-5402
Lessee shall be addressed at:
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
Prolongación Paseo de la Reforma No. 490, Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
Attention: Director Jurídico
Fax: +52 (55) 5211 9613
Airbus shall be addressed at:
Airbus S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention: Executive Vice-President Customer Services
Fax: +33 (5) 61 93 46 65
Telephone: +33 (5) 61 30 40 12
or such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (i) personal delivery, on the date upon which personally delivered, (ii) delivery by courier, on the date of receipt or (iii) telefax transmission, on the date of confirmation of successful transmission.
 
 	7.	Consent of Airbus . It shall be a condition precedent to this Assignment Agreement becoming effective that Airbus execute the Consent contained in Schedule 1 hereto.	
 
 	8.	Applicable Law and Jurisdiction . THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-16	  	APPENDIX 8
FORMS	

THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL OR STATE COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in France if Airbus is involved.
 
 	9.	Confidentiality . Each of Lessor and Lessee (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Assignment Agreement and any reports, documentation (including the provisions of the Purchase Agreement furnished under section 2 hereof) or other data furnished hereunder (collectively, “ Information ”) strictly confidential and will not, without the prior written consent of the other party and Airbus, disclose such Information to any other person or entity; provided that Lessor and Lessee may, without the consent of the other party or Airbus, disclose the Information in any of the following situations:	
 
 	(i)	to affiliates, directors, officers, employees and permitted assignees of Lessor and Lessee; or	
 
 	(ii)	to auditors, accountants or legal advisors of Lessor, Lessee or their respective permitted assignees; or	
 
 	(iii)	to such other parties as may be required by law, by government regulation or order (including, without limitation, any regulation or order of a bank regulatory agency), by subpoena or by any other legal process. In the event that a disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and Lessee shall consult and cooperate with Airbus to limit the scope and form of such disclosure to the extent permissible and will make such applications as will be necessary to implement the foregoing.	
Notwithstanding any of the foregoing, Information will not be considered confidential and Lessor and Lessee and their respective permitted assignees may disclose any item of Information without restriction in any of the following circumstances: If such item:
 
 	(i)	is publicly available (either to the general public or to any relevant trade or industry) prior to either party’s receipt of it from Airbus hereto;	
 
 	(ii)	is thereafter made publicly available (either to the general public or to any relevant trade or industry) by Airbus hereto or by a third party which is entitled to make such item publicly available; or	
 
 	(iii)	becomes available to either party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it.	
With respect to any public disclosure or filing containing Information, Lessor and Lessee agree to submit to Airbus a copy of the proposed document to be filed or disclosed and will give Airbus a reasonable period of time in which to review the said document.
 
 	10.	Definitions . Capitalised terms not otherwise defined herein shall have the meaning set forth in the Lease.	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-17	  	APPENDIX 8
FORMS	

 	11.	Counterparts . This Assignment Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.	
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be executed on their behalf by their duly authorised representatives.

CIT AEROSPACE INTERNATIONAL	
		
By:	 	 	
Its:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Its:	 	 	
		
By:	 	 	
Its:	 	 	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-18	  	APPENDIX 8
FORMS	

SCHEDULE 1
Manufacturer Consent
             20    
 
Re:	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS): ASSIGNMENT OF WARRANTY AND SUPPORT RIGHTS	
Dear Sirs,
 
1.	Reference is made to that certain Assignment of Warranty and Support Rights dated              20     (the “ Assignment Agreement ”), by and between CIT Aerospace International (“ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (the “ Lessee ”) concerning the assignment of certain warranty rights, patent and copyright indemnities, rights with respect to vendors’ product support rights under Articles 12, 13 and 17 of the Purchase Agreement, respectively, with respect to the Aircraft.	
 
2.	All terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.	
 
3.	Airbus hereby consents to the assignment and reassignment contained in Sections 2 and 4, respectively, of the Assignment Agreement on the terms and conditions set forth therein, subject to the following conditions:	
 
 	(a)	Airbus shall have received formal notification of the Assignment Agreement within two (2) weeks of the date hereof pursuant to Article 1690 of the French Civil Code;	
 
 	(b)	Airbus shall not be subject by reason of the Assignment Agreement to any (i) liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, or (ii) modification in any respect whatsoever of its contractual rights under the said Purchase Agreement;	
 
 	(c)	So long as the Assignment Agreement is in full force and effect, Lessee and not Lessor will be responsible for compliance with Articles 12, 13 and 17 of the Purchase Agreement, in each case with respect to the Aircraft. Upon termination of the Assignment Agreement, Lessor shall once again be bound by such clauses with respect to the obligations thereunder, and Lessor shall be entitled to the rights and benefits described in Section 2 of the Assignment Agreement originally received by C.I.T. Leasing Corporation (“ CIT Leasing ”) in connection with its purchase of the Aircraft from Airbus which were assigned by CIT Leasing to Lessor pursuant to that certain Assignment of Rights dated as of              20     (the “ CIT Assignment ”).	
 
 	(d)	Lessee hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations of Articles 12, 13 and 17 of the Purchase Agreement with respect to the exercise of any of the Rights and to be bound by the covenants of the Buyer in the Assigned Provisions to the same extent as if Lessee had been named “Buyer” of the Aircraft under the Purchase Agreement.	
 
 	(e)	Other than with respect to the obligations assumed by Lessee under the Assignment Agreement as set forth in section 3(a) of the Assignment Agreement, Lessor shall remain fully bound by all provisions of the Purchase Agreement other than provisions relating to	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-19	  	APPENDIX 8
FORMS	

 	the rights reserved to CIT Leasing pursuant to the CIT Assignment which CIT Leasing shall remain fully bound by.	
 
 	(f)	For the avoidance of doubt, until Airbus receives written notice from Lessor of the termination of the Lease, Airbus shall be entitled to perform the obligations corresponding to the Rights assigned exclusively in favour of Lessee pursuant to the Assignment Agreement.	
 
4.	This Consent shall be governed by and construed in accordance with the laws of the State of New York and any dispute arising hereunder may be referred to any federal or state court located in New York, New York. Nothing in this clause will prevent any party from making a claim in a court of competent jurisdiction in France.	
 
5.	Confidentiality . Each of Lessor and Lessee (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Consent and any reports or other data furnished hereunder (collectively, the “ Information ”) strictly confidential and will not, without the prior written consent of the other party and Airbus, disclose such Information to any other person or entity; provided that Lessor and Lessee may, without the consent of the other party or Airbus, disclose the Information in any of the following situations:	
 
 	(i)	to affiliates directors, officers, employees and permitted assignees of Lessor and Lessee; or	
 
 	(ii)	to auditors, accountants or legal advisors of Lessor, Lessee or their respective permitted assignees; or	
 
 	(iii)	to such other parties as may be required by law, by government regulation or order (including, without limitation, any regulation or order of a bank regulatory agency), by subpoena or by any other legal process. In the event that a disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and Lessee shall consult and cooperate with Airbus to limit the scope and form of such disclosure to the extent permissible and will make such applications as will be necessary to implement the foregoing.	
Notwithstanding any of the foregoing, Information will not be considered confidential and Lessor and Lessee and their respective permitted assignees may disclose any item of Information without restriction in any of the following circumstances: If such item:
 
 	(i)	is publicly available (either to the general public or to any relevant trade or industry) prior to either party’s receipt of it from Airbus hereto;	
 
 	(ii)	is thereafter made publicly available (either to the general public or to any relevant trade or industry) by Airbus hereto or by a third party which is entitled to make such item publicly available; or	
 
 	(iii)	becomes available to either party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it.	
With respect to any public disclosure or filing containing Information, Lessor and Lessee agree to submit to Airbus a copy of the proposed document to be filed or disclosed and will give Airbus a reasonable period of time in which to review the said document.

Volaris
Airbus A319-100; (1 of 2)	  	App 8-20	  	APPENDIX 8
FORMS	

6.	Counterparts . This Consent may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.	

	 		 		 	For and on behalf of AIRBUS S.A.S.	
						
	 		 		 	By:	  	 	 		
	 		 		 	Title:	  	 	 		
	 		 		 	Date:	  	 	 		
				
Signed in acknowledgment for and on behalf of	 		 	Signed in acknowledgment for and on behalf of	 		
				
CIT AEROSPACE INTERNATIONAL	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	 		
						
By:	 	 	 		 	By:	  	 	 		
Name:	 	 	 		 	Name:	  	 	 		
Title:	 	 	 		 	Title:	  	 	 		
						
	 		 		 	By:	  	 	 		
	 		 		 	Name:	  	 	 		
	 		 		 	Title:	  	 	 		

Volaris
Airbus A319-100; (1 of 2)	  	App 8-21	  	APPENDIX 8
FORMS	

Form 9
Form of Assignment of Warranties and Consent (Engines)
 ENGINE ASSIGNMENT AGREEMENT
This Agreement (this “ Agreement ”) is made as of this     day of              20     among C.I.T. LEASING CORPORATION, a corporation whose principal place of business is at 505 Fifth Avenue, New York, New York 10017, United States of America (hereinafter called “ Purchaser ”) of the first part; and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS), a company organised and existing under the laws of the United Mexican States and having its head office at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (hereinafter called “ Lessee ”) of the second part; CIT AEROSPACE INTERNATIONAL, an unlimited company formed under the laws of Ireland and which place of business is located at 3 George’s Dock, IFSC, Dublin, Ireland (hereinafter called “ Lessor ”) of the third part; and IAE INTERNATIONAL AERO ENGINES AG, a corporation whose registered office is at Stampfenbachstrasse 73, 8035 Zurich, Switzerland (hereinafter called “ IAE ”) of the fourth part.
WHEREAS:
 
A.	Purchaser is party to an Airbus A320 family and A350 aircraft purchase agreement with Airbus S.A.S (as legal successor to AVSA, S.A.R.L.) (“ Airbus ”) dated as of August 17, 2005, partially assigned with respect to the Aircraft (as defined below) to Lessor pursuant to a purchase agreement assignment between Purchaser and Lessor dated on or about the date hereof pursuant to which Lessor agreed, among other things and with the consent of Airbus, to purchase the Aircraft.	
 
B.	Pursuant to an aircraft lease agreement dated 30 November 2009 between Lessor and Lessee (the “ Lease ”), Lessor proposes to lease or has leased the Aircraft which is equipped with two (2) IAE V2527-A5 engines, serial numbers             and             (the “ Engines ”) to Lessee.	
 
C.	Purchaser and IAE are parties to a V2500 Support Contract dated October 13, 1999 (which together with the Exhibits and Side Letters thereto is hereinafter referred to as the “ Contract ”) for the support by IAE of the Engines.	
 
D.	Lessor and Lessee wish to take an assignment of certain rights and obligations of Purchaser under the Contract, and Purchaser is willing to assign and IAE is willing to consent to such assignments as hereinafter provided.	
NOW THEREFORE IT IS AGREED AS FOLLOWS:
CLAUSE 1 DEFINITIONS
Terms used in this Agreement shall have the same meanings as those given to them in the Contract with the exception of the following:
“ Aircraft ” shall mean the A319-100 aircraft bearing manufacturer’s serial number              powered by the Engines.

Volaris
Airbus A319-100; (1 of 2)	  	App 8-22	  	APPENDIX 8
FORMS	

CLAUSE 2 ASSIGNMENT
 
2.1	Subject to the terms of this Agreement, Purchaser hereby assigns and transfers to Lessor all of the rights and interest of Purchaser under the following provisions of the Contract (the “ Assigned Rights ”):	

	 	Clause 1	    	Definitions - with the exception of subclauses 1.1, 1.3, 1.4 and 1.6	
			
	 	Clause 3	    	Spare Parts Provisions with exception of subclause 3.13	
			
	 	Clause 4	    	Warranties, Guarantees and Liabilities Including Clauses 4.1, 4.2.1 through 4.2.8, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8	
			
	 	Clause 5	    	Product Support Services	
			
	 	Clause 6	    	Miscellaneous with the exception of subclauses 6.3 and 6.13	
			
	 	Exhibit A	    	Contract Specification	
			
	 	Exhibit C	    	Product Support	
			
	 	Exhibit D	    	Warranties, Guarantees & Plans including Exhibits D-1 through D-8	
Such provisions of the Contract as are hereby assigned are attached hereto as Appendix I and may be amended from time to time by agreement between Purchaser and IAE.
 
2.2	Subject to the terms of this Agreement and for so long as the Lease has not been terminated or has not expired in accordance with its terms, Lessor hereby assigns and transfers to Lessee all of its rights and interest in the Assigned Rights.	
 
2.3	Each of Lessor and Lessee hereby assumes and accepts the assignment and transfer of the Assigned Rights, and agrees to accept all of the limitations, obligations and liabilities contained in the Contract relating to the Assigned Rights.	
 
2.4	IAE hereby consents to the assignments and transfers to Lessee and Lessor of all of the Assigned Rights provided in Clauses 2.1 and 2.2 above, and agrees that it will allow Lessee to exercise in its own name all of the Assigned Rights.	
 
2.5	Each of Lessor and Lessee hereby confirms to IAE that, in accordance with the terms of the Lease, they agree to the following notice provisions relating to the Assigned Rights:	
 
 	(a)	At the request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of (x) fourteen (14) days prior to the Scheduled Termination Date (as defined in the Lease) and (y) the Termination Date (as defined in the Lease) of any valid claim Lessee has made under the warranties assigned to it with respect to the Engines during the Lease Term (as defined in the Lease) to the extent historical records of the same are maintained by Lessee; and	
 
 	(b)	During the Lease Term (as defined in the Lease), Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Engines as Lessor may reasonably request.	

Volaris
Airbus A319-100; (1 of 2)	  	App 8-23	  	APPENDIX 8
FORMS	

2.6	LESSEE ACCEPTS THAT THE WARRANTIES ASSIGNED TO IT UNDER CLAUSES 4.1, 4.2 AND 4.4 OF THE CONTRACT TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO IT IN RESPECT OF THE SUPPLIES IN ACCORDANCE WITH THIS CONTRACT ARE EXPRESSLY IN LIEU OF, AND LESSEE HEREBY WAIVES, ALL OTHER REMEDIES, CONDITIONS AND WARRANTIES, EXPRESSED OR IMPLIED INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER OBLIGATIONS AND LIABILITIES WHATSOEVER OF IAE AND OF ITS SHAREHOLDERS WHETHER IN CONTRACT OR IN TORT OR OTHERWISE FOR ANY DEFECT, DEFICIENCY, FAILURE, MALFUNCTIONING OR FAILURE TO FUNCTION OF ANY ITEM OF THE SUPPLIES OR OF THE EQUIPMENT REFERRED TO IN CLAUSE 4.4 OF THE CONTRACT, HOWSOEVER AND WHENEVER ACQUIRED BY LESSEE FROM WHATEVER SOURCES. LESSEE AGREES THAT NEITHER IAE NOR ANY OF ITS SHAREHOLDERS SHALL BE LIABLE TO LESSEE UPON ANY CLAIM THEREFOR OR UPON ANY CLAIM HOWSOEVER ARISING OUT OF THE MANUFACTURE OR SUPPLY OR INSPECTION BY IAE OR ANY OF ITS SHAREHOLDERS OF ANY ITEM OF THE SUPPLIES OR OF SUCH EQUIPMENT OR ANY OTHER ITEM OF WHATEVER NATURE, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, EXCEPT AS EXPRESSLY PROVIDED IN THE SAID WARRANTIES, AND LESSEE ASSUMES ALL RISK AND LIABILITY WHATSOEVER NOT EXPRESSLY ASSUMED BY IAE IN THE SAID WARRANTIES.	
 
2.7	References in the Contract to Lessor (whether as “CIT”, “Airline”, “Operator” or otherwise) shall, with respect to the rights hereby assigned, include Lessee except where the context requires otherwise.	
CLAUSE 3 PAYMENT FOR SPARE PARTS
Notwithstanding Clause 2 above, payments for all purchases shall be due from Lessee upon delivery, or at IAE’s option prior to delivery of the purchased items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed of any of Lessee’s property, or (b) Lessee is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding up laws or other similar legislation applicable to Lessee, or (c) Lessee becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a judgment rendered against Lessee, or (e) Lessee is unable or refuses to make payment to IAE in accordance with any of Lessee’s obligations to IAE.
CLAUSE 4 LAW
This Agreement shall be governed by and construed in accordance with the laws of New York, excluding New York’s conflicts of laws, and any dispute shall be referred to the Federal or State courts located in New York, New York, and each party unconditionally and irrevocably consents and submits to such jurisdiction.
CLAUSE 5 AMENDMENT
This Agreement shall not be amended in any way other than by agreement in writing executed by all of the parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement.
CLAUSE 6 FURTHER ASSIGNMENT
Lessee shall not be entitled to further assign or transfer the Assigned Rights without the prior written consent of IAE and Lessor.

Volaris
Airbus A319-100; (1 of 2)	  	App 8-24	  	APPENDIX 8
FORMS	

CLAUSE 7 REASSIGNMENT
Upon termination of the Lease or the leasing of the Aircraft thereunder, whether by expiry of time or otherwise, the Assigned Rights shall automatically be reassigned to Lessor without any requirement for any further act by or on behalf of Lessee or IAE.
CLAUSE 8 CONFIDENTIALITY
Lessor and Lessee shall not, without the prior written consent of IAE, disclose directly or indirectly, to any third party, any of the terms of this Agreement or any of the terms of the Assigned Rights or of the Contract disclosed incident to this Agreement.
CLAUSE 9 IAE’S LIABILITIES
IAE shall incur no new or additional obligations, losses, costs, expenses or liabilities whatsoever by reason of the Lease or any of the transactions contemplated thereby (other than as provided herein and in respect of IAE’s obligations under the Contract).
CLAUSE 10 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original and each counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorised officers the day and year first before written:

C.I.T. LEASING CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	 		 		

							
Name:	 	 	 		 	Name:	  	 	 		 		
							
Title:	 	 	 		 	Title:	  	 	 		 		

							
	 		 		 	Name:	  	 	 		 		
							
	 		 		 	Title:	  	 	 		 		
					
CIT AEROSPACE INTERNATIONAL	 		 	IAE INTERNATIONAL AERO ENGINES AG	 		 		

							
Name:	 	 	 		 	Name:	  	 	 		 		
							
Title:	 	 	 		 	Title:	  	 	 		 		

Volaris
Airbus A319-100; (1 of 2)	  	App 8-25	  	APPENDIX 8
FORMS	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.24
Execution Version
AIRCRAFT LEASE AGREEMENT
Dated as of 30 November 2009
BETWEEN
CIT AEROSPACE INTERNATIONAL 
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.
(D/B/A VOLARIS) 
as Lessee

One (1) Airbus A319-100 Aircraft
Scheduled Delivery Month – August 2010 (2 of 2)

 
 
This Aircraft Lease Agreement may be executed in several counterparts. To the extent, if any, that this Aircraft Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Aircraft Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart so marked “Chattel Paper Original” on the signature page thereof.

CONTACTS – LES
NOTE : This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease.
Primary Business Contact:
Israel Padron
Vice President - Marketing
CIT Aerospace
1100 Lee Wagener Boulevard, Suite 204
Fort Lauderdale, Florida 33315, U.S.A.
Tel: +1 (954) 359 0113
Fax: +1 (954) 359 5542
e-mail: israel.padron@cit.com

Payment Inquiries:	 	Technical Inquiries:	
		
Operations
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 (1) 656 1004
Fax: +353 (1) 656 1001
e-mail: citaioperations@cit.com
with a copy to:
e-mail: una.slevin@cit.com	 	Asset Manager
e-mail: aerospaceassetmgmt@cit.com	
		
Utilisation Reporting:	 	Financial Reporting	
		
Asset Manager
e-mail: aerospaceassetmgmt@cit.com
 
Operations
e-mail: citaioperations@cit.com
 
with a copy to:
e-mail: una.slevin@cit.com
e-mail: ciara.flynn@cit.com	 	Operations
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 (1) 656 1004
Fax: +353 (1) 656 1001
e-mail: citaioperations@cit.com
with a copy to:
e-mail: una.slevin@cit.com	
		
Insurance Reporting:	 	Legal Contact:	
		
Insurance Administrator
CIT Aerospace
Operations Department
11 West 42 nd Street, 12 th Floor
New York, New York 10036
U.S.A.
Tel: +1 (212) 461 7830 or 7834
Fax: +1 (877) 525 9183
e-mail: michelle.lynn@cit.com	 	Malin Pålsson
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 (1) 656 1036
Fax: +353 (1) 656 1001
e-mail: malin.palsson@cit.com	
 
- i -

CONTACTS – LE
NOTE : This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease.
Primary Business Contact
Fernando Suarez
Chief Financial Officer
Concesionaria Vuela Compañía de Aviación, S.A. de C.V.
Prolongación Paseo de la Reforma No. 490 ~ Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210, México, D.F.
Tel: +52 (55) 5261 6400
Fax: +52 (55) 5261 6460
e-mail: fernando.suarez@volaris.com.mx

Payment Inquiries:	  	Technical Inquiries:	
		
Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6428
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	  	Andrés Fabre
Director – Technical and Operations
 
Tel: +52 (55) 5261 6415
Fax: +52 (55) 5261 6460
e-mail: andres.fabre@volaris.com.mx	
		
Utilisation Reporting:	  	Financial Reporting:	
		
Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6415
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	  	Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6428
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	
		
Insurance/Risk Management Contact:	  	Legal Contact:	
		
Maria Elena Rodriguez
Risk Manager
 
Tel: +52 (55) 5261 6435
Fax: +52 (55) 5261 6460
e-mail: maelena.rodriguez@volaris.com.mx	  	Alfonso Ascencio
General Counsel
 
Tel: +52 (55) 5261 6412
Fax: +52 (55) 561 6460
e-mail: alfonso.ascensio@volaris.com.mx	
 
- ii -

CONTENTS

Article	 	 	 	 	  	Page	 	
			
1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
2.	 	LEASE TERM; NATURE OF LEASE	  	 	2	  	
	 	2.1.	 	Lease Term	  	 	2	  	
	 	2.2.	 	Nature of Lease	  	 	2	  	
3.	 	RENT	 		  	 	3	  	
	 	3.1.	 	Agreement to Pay Rent	  	 	3	  	
	 	3.2.	 	Basic Rent at Delivery	  	 	3	  	
	 	3.3.	 	Supplemental Rent	  	 	3	  	
	 	3.4.	 	Obligation to Perform Unconditional	  	 	3	  	
4.	 	SECURITY DEPOSIT	  	 	4	  	
	 	4.1.	 	Security Deposit Amount	  	 	4	  	
	 	4.2.	 	Nature of Security Deposit	  	 	4	  	
	 	4.3.	 	Application of Security Deposit	  	 	4	  	
	 	4.4.	 	Effect of Application of Security Deposit	  	 	4	  	
	 	4.5.	 	Repayment of Security Deposit	  	 	4	  	
	 	4.6.	 	Security Deposit Letter of Credit	  	 	5	  	
5.	 	PAYMENTS	  	 	7	  	
	 	5.1.	 	Account	  	 	7	  	
	 	5.2.	 	Payments on Non-Business Days	  	 	7	  	
	 	5.3.	 	Timing of Payments	  	 	7	  	
	 	5.4.	 	Late Payment	  	 	7	  	
	 	5.5.	 	Calculation of Interest and Prorating of other Payments	  	 	7	  	
	 	5.6.	 	Payments in United States Dollars	  	 	7	  	
	 	5.7.	 	Retention of Certain Payments	  	 	7	  	
	 	5.8.	 	Application of Payments	  	 	8	  	
6.	 	AIRCRAFT SPECIFICATION; LESSEE INVOLVEMENT WITH SELLER	  	 	9	  	
	 	6.1.	 	Aircraft Specification	  	 	9	  	
	 	6.2.	 	Lessee Involvement with Seller	  	 	9	  	
7.	 	CONDITIONS PRECEDENT TO DELIVERY	  	 	11	  	
	 	7.1.	 	Conditions Precedent	  	 	11	  	
	 	7.2.	 	Waiver or Deferral of Conditions Precedent	  	 	11	  	
8.	 	DELIVERY; TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	  	 	12	  	
	 	8.1.	 	Delivery Location and Timing	  	 	12	  	
	 	8.2.	 	Delivery Subject to Seller Delivery	  	 	12	  	
	 	8.3.	 	Termination for Delay	  	 	12	  	
	 	8.4.	 	Seller’s Right to Terminate	  	 	12	  	
	 	8.5.	 	Event of Loss to Aircraft Prior to Delivery	  	 	12	  	
	 	8.6.	 	Lessee Acceptance of Aircraft	  	 	12	  	
	 	8.7.	 	Risk of Loss to Aircraft following Delivery	  	 	13	  	
	 	8.8.	 	Waiver of Remedies for Delay in Delivery	  	 	13	  	
9.	 	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	  	 	14	  	
	 	9.1.	 	Lessee’s Representations and Warranties	  	 	14	  	
	 	9.2.	 	Application of Representations and Warranties; Survival	  	 	16	  	
	 	9.3.	 	Lessee’s General Covenants	  	 	16	  	
10.	 	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	  	 	18	  	
	 	10.1.	 	General Representations and Warranties of Lessor	  	 	18	  	
	 	10.2.	 	Covenant of Quiet Enjoyment	  	 	19	  	
 
- iii -

									
	 	10.3.	 	Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies	  	 	19	  	
	 	10.4.	 	Disclaimer and Waiver of Incidental, Consequential, Special and Punitive Damages	  	 	21	  	
	 	10.5.	 	No Duty of Indemnitees to Inspect, Etc	  	 	21	  	
11.	 	GENERAL OPERATION OF THE AIRCRAFT	  	 	22	  	
	 	11.1.	 	General Operation	  	 	22	  	
	 	11.2.	 	Insured Operations	  	 	22	  	
	 	11.3.	 	Carriage of Goods	  	 	22	  	
	 	11.4.	 	Operational Expenses	  	 	23	  	
	 	11.5.	 	Compliance with Laws	  	 	23	  	
	 	11.6.	 	Lessee’s Covenants Regarding Use of the Aircraft	  	 	24	  	
	 	11.7.	 	Certain Tax Matters	  	 	25	  	
12.	 	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	  	 	26	  	
	 	12.1.	 	General	  	 	26	  	
	 	12.2.	 	Accomplishment of Tasks and Repairs	  	 	26	  	
	 	12.3.	 	Information on Maintenance	  	 	26	  	
	 	12.4.	 	Aircraft Documents in English Language	  	 	26	  	
	 	12.5.	 	Originals	  	 	27	  	
	 	12.6.	 	Performance of Maintenance	  	 	27	  	
	 	12.7.	 	Alterations, Modifications and Additions	  	 	27	  	
	 	12.8.	 	Replacement of Parts	  	 	29	  	
	 	12.9.	 	Title to Parts	  	 	30	  	
	 	12.10.	 	Temporary Replacement of Parts	  	 	30	  	
	 	12.11.	 	Exchanging Parts	  	 	31	  	
	 	12.12.	 	Temporary Attachment and Removal of Engines	  	 	31	  	
	 	12.13.	 	Installation of Items of Equipment on Other Aircraft	  	 	32	  	
	 	12.14.	 	Failure to Reinstall Engines and Items of Equipment on the Aircraft	  	 	33	  	
13.	 	MAINTENANCE RESERVES	  	 	34	  	
	 	13.1.	 	Maintenance Reserves	  	 	34	  	
	 	13.2.	 	Discrepancies	  	 	34	  	
	 	13.3.	 	Rights in Maintenance Reserves	  	 	34	  	
	 	13.4.	 	Claims for Reimbursement - Timing	  	 	35	  	
14.	 	SELLER’S AND MANUFACTURERS’ WARRANTIES	  	 	36	  	
	 	14.1.	 	Assignable Warranties	  	 	36	  	
	 	14.2.	 	Reassignment; Assignment of Lessee Warranties	  	 	36	  	
	 	14.3.	 	Warranty Claims	  	 	36	  	
15.	 	SUBLEASING AND WET LEASING	  	 	37	  	
	 	15.1.	 	Subleasing	  	 	37	  	
	 	15.2.	 	Wet Leasing	  	 	38	  	
	 	15.3.	 	No Independent Subleasing of Items of Equipment	  	 	39	  	
	 	15.4.	 	Expenses	  	 	39	  	
	 	15.5.	 	Lessee Remains Liable	  	 	39	  	
16.	 	REPORTING AND INSPECTIONS	  	 	40	  	
	 	16.1.	 	Financial Reporting	  	 	40	  	
	 	16.2.	 	Aircraft Utilisation and Other Reporting/Information	  	 	41	  	
	 	16.3.	 	Further Information; Inspections	  	 	41	  	
	 	16.4.	 	Technical Report Prior to Return of Aircraft	  	 	42	  	
17.	 	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	  	 	43	  	
	 	17.1.	 	Registration	  	 	43	  	
	 	17.2.	 	Identification Plates	  	 	43	  	
	 	17.3.	 	Aeronautics Authority Acknowledgment	  	 	43	  	
	 	17.4.	 	Authorisation to Make Perfection Filings	  	 	43	  	
 
- iv -

									
	 	17.5.	 	Perfection of Title	  	 	43	  	
	 	17.6.	 	Cape Town Convention	  	 	44	  	
	 	17.7.	 	Permitted Liens	  	 	46	  	
18.	 	GENERAL INDEMNITY	  	 	47	  	
	 	18.1.	 	Scope	  	 	47	  	
	 	18.2.	 	Lessee’s Release	  	 	47	  	
	 	18.3.	 	Repayment	  	 	48	  	
	 	18.4.	 	Payment	  	 	48	  	
	 	18.5.	 	Exclusion	  	 	48	  	
	 	18.6.	 	After-Tax Nature of Indemnity	  	 	49	  	
	 	18.7.	 	Contest	  	 	49	  	
	 	18.8.	 	Survival	  	 	50	  	
19.	 	INSURANCE	  	 	51	  	
	 	19.1.	 	Obligation to Insure	  	 	51	  	
	 	19.2.	 	Liability Insurance	  	 	51	  	
	 	19.3.	 	Contractual Liability; Tail Coverage for Liability Insurance	  	 	51	  	
	 	19.4.	 	Insurance Against Loss or Damage to the Items of Equipment	  	 	51	  	
	 	19.5.	 	Reinsurance	  	 	52	  	
	 	19.6.	 	Requirements for All Insurances	  	 	53	  	
	 	19.7.	 	Reports	  	 	53	  	
	 	19.8.	 	Assignee of Lessor’s and/or Owner’s Interests	  	 	54	  	
	 	19.9.	 	Failure to Insure	  	 	54	  	
	 	19.10.	 	Lessor’s Right to Insure	  	 	54	  	
	 	19.11.	 	Changes to Insurance Practice	  	 	54	  	
	 	19.12.	 	AVN 67B	  	 	55	  	
20.	 	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	  	 	56	  	
	 	20.1.	 	Risk of Loss and Damage	  	 	56	  	
	 	20.2.	 	Notification of Loss and Damage	  	 	56	  	
	 	20.3.	 	Event of Loss – Aircraft/Airframe	  	 	56	  	
	 	20.4.	 	Event of Loss – Engine or APU	  	 	57	  	
	 	20.5.	 	Event of Loss – Landing Gear	  	 	58	  	
	 	20.6.	 	Repairable Damage	  	 	58	  	
	 	20.7.	 	Documents Loss	  	 	59	  	
	 	20.8.	 	Application of Payments from Governmental Authorities	  	 	59	  	
	 	20.9.	 	No Lessor Liability to Repair or Replace Following Delivery	  	 	60	  	
21.	 	TAXES; TAX INDEMNITY	  	 	61	  	
	 	21.1.	 	Indemnity	  	 	61	  	
	 	21.2.	 	VAT	  	 	64	  	
	 	21.3.	 	Lessor Tax Certificates	  	 	64	  	
	 	21.4.	 	Withholding Tax Exemption Certificates	  	 	65	  	
	 	21.5.	 	Tax Filings; Information	  	 	65	  	
	 	21.6.	 	Payment of Taxes and Indemnities	  	 	65	  	
	 	21.7.	 	Contest	  	 	66	  	
	 	21.8.	 	Survival	  	 	68	  	
	 	21.9.	 	Change in Circumstances; Mitigation	  	 	68	  	
22.	 	RETURN OF AIRCRAFT	  	 	69	  	
	 	22.1.	 	Time and Place	  	 	69	  	
	 	22.2.	 	Condition	  	 	69	  	
	 	22.3.	 	Lessee’s Continuing Obligations	  	 	69	  	
	 	22.4.	 	Legal Status Upon Return	  	 	70	  	
	 	22.5.	 	Airport and Navigation Charges	  	 	70	  	
 
- v -

									
23.	 	EVENTS OF DEFAULT	  	 	71	  	
24.	 	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	  	 	73	  	
	 	24.1.	 	Lessor’s Rights Following an Event of Default	  	 	73	  	
	 	24.2	 	. De-Registration	  	 	75	  	
	 	24.3.	 	Present Value of Payments	  	 	75	  	
	 	24.4.	 	Remedies Cumulative	  	 	75	  	
	 	24.5.	 	Lessor’s Exercise of Remedies	  	 	75	  	
	 	24.6.	 	Application of Payments Following Default or Event of Default	  	 	76	  	
	 	24.7.	 	Use of Termination Date	  	 	76	  	
25.	 	ASSIGNMENT AND TRANSFER	  	 	77	  	
	 	25.1.	 	No Assignment by Lessee	  	 	77	  	
	 	25.2.	 	Transfer of Lessor’s and/or Owner’s Interests	  	 	77	  	
	 	25.3.	 	Cooperation with Transfers	  	 	77	  	
	 	25.4.	 	Financings	  	 	77	  	
	 	25.5.	 	Cooperation with Financings	  	 	78	  	
26.	 	LAW AND JURISDICTION	  	 	79	  	
	 	26.1.	 	Governing Law	  	 	79	  	
	 	26.2.	 	Consent to Jurisdiction	  	 	79	  	
	 	26.3.	 	Process Agent and Service of Process	  	 	79	  	
	 	26.4.	 	Jurisdiction and Forum	  	 	79	  	
	 	26.5.	 	Waiver of Jury Trial	  	 	79	  	
	 	26.6.	 	Waiver of Immunity	  	 	80	  	
27.	 	MISCELLANEOUS	  	 	81	  	
	 	27.1.	 	Severability and Illegality	  	 	81	  	
	 	27.2.	 	Amendments	  	 	82	  	
	 	27.3.	 	Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer	  	 	82	  	
	 	27.4.	 	Counterparts	  	 	82	  	
	 	27.5.	 	Delivery of Documents by Electronic Means	  	 	83	  	
	 	27.6.	 	Survival	  	 	83	  	
	 	27.7.	 	Entire Lease	  	 	83	  	
	 	27.8.	 	Successors and Assigns	  	 	83	  	
	 	27.9.	 	Brokers	  	 	83	  	
	 	27.10.	 	Transaction Costs	  	 	83	  	
	 	27.11.	 	Time is of the Essence	  	 	84	  	
	 	27.12.	 	Language	  	 	84	  	
	 	27.13.	 	No Rights of Third Parties	  	 	84	  	
	 	27.14.	 	Delegation	  	 	84	  	
	 	27.15.	 	Further Assurances	  	 	84	  	
	 	27.16.	 	Rights at Law	  	 	84	  	
	 	27.17.	 	Confidentiality	  	 	84	  	
	 	27.18.	 	Notices	  	 	85	  	
 
- vi -

					
Appendices	
		
1	    	Definitions	
2	    	Commercial Terms	
	    	A.	  	Lease Term	
	    	B.	  	Rent, Security Deposit, Insurance and other Financial Matters	
	    	C.	  	Escalation	
	    	D.	  	Maintenance Reserves	
	    	E.	  	Return Conditions	
3	    	Acceptance Certificate	
4	    	Lease Supplement	
5	    	Participation Agreement	
6	    	Conditions Precedent / Post-Delivery Items	
	    	A.	  	Lessor’s Conditions Precedent/Post-Delivery Items	
	    	B.	  	Lessee’s Conditions Precedent/Post-Delivery Items	
7	    	Return Acceptance Certificate	
8	    	Forms	
 
- vii -

THIS AIRCRAFT LEASE AGREEMENT is made as of 30 November 2009 by and between:
 
1.	CIT AEROSPACE INTERNATIONAL, a company organised and existing under the applicable laws of Ireland and having its principal place of business at 3 George’s Dock, IFSC, Dublin 1, Ireland (“ Lessor ”); and,	
 
2.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS) , a company organised and existing under the applicable laws of the United Mexican States and having its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).	
WHEREAS:
Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee the Aircraft on the terms and subject to the conditions of this Lease.
NOW THEREFORE IT IS AGREED as follows:
 
1.	DEFINITIONS AND INTERPRETATION	
1.1. Unless the context otherwise requires, all capitalised terms used in this Lease shall have the meanings given such terms in Appendix I or as may otherwise be defined in this Lease.
1.2. References to Articles, Sections and Appendices are to be construed as references to the articles, sections and appendices of and to this Lease and references to this Lease include the Appendices.
1.3. Words importing the plural shall include the singular and vice versa.
1.4. Reference to “Lessee”, “Lessor”, “Owner”, “Owner Participant”, “Financing Party” or any other Person shall include the successors, assigns and transferees of such Person.
1.5. The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
1.6. References to (or to any specified provision of) this Lease or any Operative Document shall mean this Lease or such Operative Documents as in force for the time being and as amended, novated, substituted or supplemented from time to time in accordance with this Lease or such Operative Document.
1.7. References to “hereby”, “herein”, “hereof”, “hereunder”, and other like words shall refer to this Lease including, without limitation, as supplemented by the Lease Supplement.
1.8. Whenever it is stated in this Lease that the consent or other action of Lessee or Lessor is not to be “unreasonably withheld” it shall be deemed to mean that such consent or action shall not be “unreasonably withheld or delayed”.
1.9. Whenever this Lease or any Operative Document refers to an obligation of CIT Leasing or Owner owing to Lessee, or of Lessor that requires the cooperation or conduct of Owner or CIT Leasing, unless such obligation is taken directly by Owner or CIT Leasing in favour of Lessee, this obligation shall be deemed to mean that Lessor shall cause Owner or CIT Leasing to act accordingly.

	  		  	ARTICLE 1
LEASE TERM: NATURE OF LEASE	

2.	LEASE TERM; NATURE OF LEASE	
2.1. Lease Term.
(a) Lessor shall lease the Aircraft to Lessee for the period stated in Appendix 2A.
(b) The Lease Term shall commence at Delivery and shall end on the Termination Date.
2.2. Nature of Lease . At all times during the Lease Term, full legal title to the Aircraft and each Item of Equipment shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. This Lease and the Lease Supplement, together, transfer to Lessee with respect to the Aircraft a leasehold interest only and Owner is the owner and Lessor is the lessor of the Aircraft, and Lessee is the lessee of the Aircraft, for all purposes, including for purposes of the application of all relevant laws, regulations, rules, administrative practices and policies, and all relevant financial accounting principles.

	  	2	  	ARTICLE 2
LEASE TERM: NATURE OF LEASE	

3.	RENT	
3.1. Agreement to Pay Rent. As rental for the Aircraft, Lessee shall pay to Lessor Basic Rent, in advance, on each Rent Payment Date in respect of each Rent Period.
3.2. Basic Rent at Delivery. The amount of Basic Rent due and payable by Lessee for each Rent Period, including adjustments calculated in accordance with Appendix 2B, Section 1, shall be set forth in the Acceptance Certificate. In the event the Delivery Date is not the first day of a calendar month, Lessee shall pay Lessor the full Basic Rent amount due for the second Rent Period on or prior to the Delivery Date and shall pay the prorated Basic Rent amount due for the first Rent Period on or prior to the first day of the second Rent Period. For example, if Delivery occurs on 10 August 2010, on 09 August 2010 Lessee shall pay Lessor the full Basic Rent amount covering the Rent Period from 01 September 2010 through 30 September 2010; then, on 01 September 2010, Lessee shall pay Lessor the prorated Basic Rent amount covering the initial Rent Period from 10 August 2010 through 31 August 2010.
3.3. Supplemental Rent. Lessee shall pay to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental Rent within ten (10) days after demand or such other relevant period as may be provided herein.
3.4. Obligation to Perform Unconditional. This Lease is a net lease and Lessee’s obligation to pay Rent and Supplemental Rent, calculated in accordance with this Lease, and to perform its other Obligations shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation:
(a) any withholding, set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including, without limitation, any breach by Lessor of its warranties, agreements or covenants contained herein or in any of the other Operative Documents;
(b) any defect in the title, registration, airworthiness, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee or any other Person for any reason whatsoever;
(c) any Liens with respect to the Aircraft;
(d) an Event of Loss with respect to the Aircraft or any Item of Equipment (subject to the terms of Section 20.3);
(e) the invalidity or unenforceability or lack of due authorisation or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease;
(f) any insolvency, bankruptcy, examinership, reorganisation, administration, liquidation or similar proceedings affecting the enforcement of creditor’s rights generally by or against Lessor or Lessee;
(g) any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing; or
(h) any imposition of Taxes.
Nothing in this Section 3.4 shall be construed so as to prevent Lessee from pursuing any Claim it may have against Lessor or any other Person in such court of law or otherwise as Lessee may deem appropriate.

	  	3	  	ARTICLE 3
RENT	

4.	SECURITY DEPOSIT	
4.1. Security Deposit Amount. Lessee shall pay the Security Deposit in cash into Lessor’s bank account in accordance with the provisions of Appendix 2B, Section 2.
4.2. Nature of Security Deposit . Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.5 below, the Security Deposit shall be nonrefundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor, may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of the Obligations and Lessee hereby assigns and charges in favour of Lessor, and hereby grants to Lessor a first priority security interest in, the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than created under this Lease, in or otherwise dispose of the Security Deposit. Lessee shall, from time to time, execute and file with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor with respect to the Security Deposit, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
4.3. Application of Security Deposit. If an Event of Default has occurred and is continuing hereunder, in addition to all other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee or any Affiliate of Lessee, as applicable, under any Operative Document or Related Lease and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.
4.4. Effect of Application of Security Deposit. If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other Person, of any Event of Default and Lessee shall, within three (3) Business Days after Lessor’s written demand, pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no Default or Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.
4.5. Repayment of Security Deposit. Provided no Default or Event of Default has occurred and is continuing, the Security Deposit, less the amount, if any, of any reasonable costs incurred by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or any Affiliate of Lessee, as applicable, is responsible hereunder or under any Related Lease in connection with the termination or cancellation of this Lease or a Related Lease or return of the Aircraft or an aircraft under any Related Lease, shall be paid over to Lessee promptly, and in any event within five (5) Business Days, after the Termination Date and the satisfaction by Lessee, in full, of its Obligations and the Related Obligations, the payment or performance of which is then due (including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and to correct discrepancies identified in the Return Acceptance Certificate, but excluding those other Obligations or Related Obligations expressly provided herein to survive the Termination Date or the equivalent date in any Related Lease and which are not due for performance on or as of such date).

	  	4	  	ARTICLE 4
SECURITY DEPOSIT	

4.6. Security Deposit Letter of Credit. In lieu of paying or maintaining the Security Deposit in cash, Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Cash Security Deposit.
(a) If Lessee elects to provide the Security Deposit in the form of a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than ten (10) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the Security Deposit paid in cash. The Security Letter of Credit shall remain in full force and effect during the Lease Term and for not less than ninety (90) days following the Scheduled Termination Date, shall permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit, and shall be freely assignable and transferable by Lessor without restriction or condition. Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee the equivalent amount of the Security Deposit then held by Lessor in cash.
(b) Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:
(i) upon the occurrence of an Event of Default; and/or
(ii) if Lessee has not delivered a replacement Security Letter of Credit to Lessor in accordance with the provisions of this Section 4.6 or deposited with Lessor cash in the amount of the Security Deposit by the required time set forth therein; and/or
(iii) not sooner than five (5) Business Days prior to the expiration date of the Security Letter of Credit if (x) such expiration date is prior to the date required under Section 4.6(a), and (y) Lessee has not delivered a replacement letter of credit in substitution for the expiring Security Letter of Credit by such date or deposited with Lessor by such date the Security Deposit in cash;
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit to the same extent as provided in Sections 4.3 and 4.5, as if Lessee had paid the Security Deposit in cash.
(c) If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall within three (3) Business Days after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement letter of credit to be issued in the total amount of the Security Deposit or pay the amount of such shortfall in the Security Deposit amount in cash.
(d) If (i) any bankruptcy, insolvency, examinership, administration, reorganisation, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the issuer of the Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof), (ii) the rating of obligations of the issuer of any Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by Moody’s Investors Services or Standard  & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or

	  	5	  	ARTICLE 4
SECURITY DEPOSIT	

(iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall within three (3) Business Days of receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Section 4.6 or deposit with Lessor cash in the amount of the Security Deposit.
(e) Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.

	  	6	  	ARTICLE 4
SECURITY DEPOSIT	

5.	PAYMENT	
5.1. Account. All payments of Rent, Security Deposit and in respect of Maintenance Reserves shall be made by Lessee to Lessor’s bank account identified in Appendix 2B, Section 3 or to such other account designated in writing by Lessor not less than two (2) Business Days prior to the due date of any relevant payment. Lessee shall, together with such payment, identify the institution from which such payment is being sent and refer to the make, model and Manufacturer’s serial number of the Aircraft, provided that the failure to do so shall not constitute Default hereunder.
5.2. Payments on Non-Business Days. When any payment under any Operative Document would otherwise be due to Lessor on a day that is not a Business Day, the due date for payment shall be the next succeeding Business Day.
5.3. Timing of Payments. Payments due under this Lease shall be made by Lessee for credit to Lessor not later than 11:00 A.M. New York time on the due date.
5.4. Late Payment. If Lessee fails to pay to Lessor any sum on its due date for payment under this Lease or any other Operative Document, including any payment of Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum from the due date up to the date of actual payment (including non-payment following the issuance of a judgment) at the Past Due Rate.
5.5. Calculation of Interest and Prorating of other Payments .
(a) All interest payable under this Lease or any other Operative Document shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
(b) All payments of a monthly nature under this Lease and any other Operative Document, including, but not limited to payments of Basic Rent and in respect of Maintenance Reserves, that accrue on a monthly basis and for which the payment due is for less than a complete month shall be pro rated on a daily basis based on a month consisting of thirty (30) days.
5.6. Payments in United States Dollars. All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. The specification of Dollars in this transaction is of the essence and Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transferred to Lessor under normal banking procedures does not yield the amount of Dollars owing to Lessor in respect of such payment. If Lessor receives an amount in respect of Lessee’s liability under this Lease or if such liability is converted into a claim, proof, judgment or order in a currency other than Dollars, Lessee will indemnify Lessor, on an After-Tax Basis, as an independent obligation against any loss arising out of or as a result of such receipt or conversion. If the amount received by Lessor, when converted into Dollars (at the market rate at which Lessor is able on the relevant date to purchase Dollars in New York with that other currency) is less than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor an amount in Dollars equal to the deficit. In addition, Lessee waives any right it may have in any jurisdiction to pay any amount due or to become due hereunder in a currency other than Dollars.
5.7. Retention of Certain Payments. Any amount referred to in any Operative Document which is payable to or retainable by Lessee shall not be paid to or retained by Lessee at any time when a Default or Event of Default shall have occurred and be continuing, but instead such amount shall be paid

	  	7	  	ARTICLE 5
PAYMENTS	

to or held by Lessor as additional security for Lessee’s Obligations to be held and applied in accordance with the provisions of this Lease. At such time as there shall not be continuing any Default or Event of Default, such amount shall be paid to Lessee to the extent not applied in accordance with the preceding sentence. Where Lessor would, but for this Section 5.7 or any similar provision, be obliged to make any payment to Lessee, Lessor may elect to make such payment but shall be entitled to deduct or withhold from such payment any amount then due and payable but unpaid by Lessee under or in respect of Lessee’s Obligations.
5.8. Application of Payments. Lessor may apply any payment received from Lessee under any Operative Document which is less than the full amount then due and owing to Lessor in respect of Lessee’s Obligations in such proportions, order and manner as Lessor may, in its reasonable discretion, determine (except where an Event of Default is continuing, in which event such determination may be made in Lessor’s absolute discretion), notwithstanding any designation or instruction for application that may have been made by Lessee.

	  	8	  	ARTICLE 5
PAYMENTS	

6.	AIRCRAFT SPECIFICATION LESSEE INVOLVEMENT WITH SELLER	
6.1. Aircraft Specification. The Aircraft shall be delivered newly manufactured to Lessee by Lessor on the Delivery Date in the configuration set forth in the Detail Specification.
(a) Following execution of this Lease, Lessee may from time to time prior to Delivery request Agreed Options be incorporated into the Aircraft. Any Agreed Options are subject to Seller’s and, if applicable, any BFE vendor’s lead-time, engineering and manufacturing requirements and shall not cause a delay to the Scheduled Delivery Date. All BFE selected by Lessee for installation on the Aircraft shall first be approved by Lessor (which approval will not be unreasonably refused or delayed) and must be from Seller’s approved BFE vendors unless otherwise consented to by Lessor and Seller and provided the same is in compliance with Seller’s lead-time, engineering and manufacturing requirements and shall not cause a delay to the Scheduled Delivery Date. Lessee shall pay for the costs associated with any such Agreed Options in excess of the allowances set forth in and pursuant to Article 3 and Appendix 2B, Section 1.
(b) A summary listing of all such Agreed Options shall be attached to the Acceptance Certificate at Delivery.
6.2. Lessee Involvement with Seller.
(a) Lessee’s Inspection of Aircraft. During the course of manufacture and final assembly of the Aircraft and at Delivery, Lessee shall, at its own cost, risk and expense, have its own representative present to inspect the Aircraft and each Item of Equipment at the Seller’s premises and to ensure its conformity with the Detail Specification and the requirements of this Lease. Lessee shall be entitled to participate in all ground inspections and demonstration/acceptance flights conducted by or on behalf of Lessor with respect to the delivery of the Aircraft to Lessor. If Lessee’s inspections reveal that the Aircraft and/or any Item of Equipment do not comply with the Detail Specification, Lessor will (for its own behalf and at Lessee’s request) promptly because the Seller to correct any such defects and make the Aircraft available for reinspection by Lessee. Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it conforms with the Detail Specification and meets the requirements of this Lease and specifically disclaims any reliance upon any representation or assurance by any reliance upon any representation or assurance by Lessor or any Affiliate of Lessor or any representative or agent thereof in making such determination. Lessee further acknowledges that any assumption that Lessor will cure any nonconformity of the Aircraft and/or any Item of Equipment, discovered, difficult of discovery, or undiscovered, is not reasonable unless both (x)  the nonconformity or possibility of nonconformity and ( y ) Lessor’s agreement to cure or cause the cure of such nonconformity are expressed in a written instrument signed by Lessor and Lessee delivered at or before the execution and delivery of the Acceptance Certificate and Lease Supplement, except as otherwise set forth herein. Except for any express commitment by Lessor to cure or cause the cure of any nonconformity evidenced by a written instrument of the type described in ( y ) above, including without limitation a list of discrepancies set forth as an attachment to the Acceptance Certificate, no Indemnitee will be liable for any failure of the Aircraft to conform with the requirements of this Lease at the time of acceptance of the Aircraft by Lessee.
(b) Participation Agreement. Lessee’s rights under the preceding clause (a) shall be exercised pursuant to the terms of the Participation Agreement to be entered into as of the date of this Lease.

	  	9	  	ARTICLE 6
AIRCRAFT SPECIFICATION: LESSEE
INVOLVEMENT WITH SELLER	

(c) Compliance. Lessee’s representative designated under this Section 6.2 shall comply with Seller’s occupational health and safety and security requirements as the same are advised by Lessor or any party acting by or through Lessor, in writing, and shall not unreasonably interfere with Seller’s, Lessor’s, CIT Leasing’s or, if applicable, Owner’s performance of their respective obligations in connection with the manufacture and delivery of the Aircraft while at Seller’s premises.

	  	10	  	ARTICLE 6
AIRCRAFT SPECIFICATION: LESSEE
INVOLVEMENT WITH SELLER	

7.	CONDITIONS PRECEDENT TO DELIVER	
7.1. Conditions Precedent.
(a) Lessor’s obligation to deliver and lease the Aircraft to Lessee is subject to:
 
 	(i)	no Event of Loss having occurred with respect to the Aircraft;	
 
 	(ii)	no Default or Event of Default having occurred and be continuing;	
 
 	(iii)	there having been no material adverse change to the financial condition of Lessee from the date of execution of this Lease to the Delivery Date which would adversely affect Lessee’s ability to perform its Obligations;	
 
 	(iv)	Seller having tendered the Aircraft for purchase by Lessor under the purchase agreement for the same, after having consented to the assignment of the same by CIT Leasing to Lessor with respect to the Aircraft, in accordance with the Detail Specification and otherwise in the condition required for delivery thereunder; and	
 
 	(v)	the receipt by Lessor of each item identified in Appendix 6A by the date required for such item appearing therein.	
(b) Lessee’s obligation to take delivery and lease the Aircraft from Lessor is subject to:
 
 	(i)	the Aircraft being in compliance with the Detail Specification and otherwise in the condition required for delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft; and	
 
 	(iii)	the receipt by Lessee of each item identified in Appendix 6B by the date required for such item appearing therein.	
7.2. Waiver or Deferral of Conditions Precedent. If any condition precedent specified in Section 7.1(a)(v) is not satisfied before Delivery, Lessor may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessor may determine and notify to Lessee in writing. If any condition precedent specified in Section 7.1(b)(iii) is not satisfied before Delivery, Lessee may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessee may determine and notify to Lessor in writing.

	  	11	  	ARTICLE 7
CONDITIONS PRECEDENT TO DELIVERY	

8.	DELIVERY; TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	
8.1. Delivery Location and Timing. Lessor shall deliver the Aircraft in the condition required by this Lease to Lessee and Lessee shall accept the Aircraft when properly tendered under this Lease on the Delivery Date at the Delivery Location. Delivery of the Aircraft to Lessee under this Lease shall occur immediately upon delivery of the Aircraft to Lessor by the Seller in the condition required hereunder, whereupon the Lease Term shall commence. Promptly following receipt of any notice from Seller, Lessor shall promptly notify Lessee in writing of the exact date when Delivery is expected to occur.
8.2. Delivery Subject to Seller Delivery. Delivery of the Aircraft is subject to and expressly conditioned upon delivery of the Aircraft by Seller to Lessor. Lessor shall not be liable or responsible to Lessee for and Lessee hereby expressly waives any right to any Claims against any Indemnitee arising or the exercise of any remedies from or in connection with any delay by Seller in the delivery of, or failure to deliver, the Aircraft to Lessee under this Lease, and Lessee shall not be released from its Obligation to take delivery of the Aircraft under this Lease as a result of any such delay except in accordance with Section 8.3; provided that the foregoing release and waiver by Lessee shall not apply with respect to any Claims solely and directly attributable to Lessor’s or CIT Leasing’s willful misconduct.
8.3. Termination for Delay. If ( x ) the Scheduled Delivery Date is scheduled or rescheduled by Seller to a date that will cause Delivery to be delayed after the Outside Delivery Date, or ( y ) Lessor notifies Lessee that Lessor has received written notice from Seller that a delay is anticipated by Seller that will cause Delivery to be delayed to a date after the Outside Delivery Date, then by written notice given within ten (10) Business Days after the first to occur of (i) Lessee’s receipt of such Lessor notice or (ii) the Outside Delivery Date, either party may by written notice to the other terminate this Lease and this Lease will terminate on the date of receipt of such notice by the non-notifying party. In the event of such termination, neither party will have any further liability to the other party except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent. If such termination notice is not given within such ten (10) day period, each of Lessee and Lessor shall have waived their right to terminate this Lease for delay under this Section 8.3 and, subject to Lessor’s agreement with Seller to a revised Scheduled Delivery Date (which shall be binding upon Lessee), this Lease shall remain in full force and effect, the Aircraft shall be delivered to Lessee in accordance with the terms of this Lease on the revised Scheduled Delivery Date.
8.4. Seller’s Right to Terminate. Lessee’s rights under Section 8.3 are subject and subordinate to any rights that Seller may have under its purchase agreement with CIT Leasing in connection with a delay in delivery of the Aircraft to Lessor that occurs or is anticipated to occur after the Outside Delivery Date. If Seller exercises any right it may have to terminate Lessor’s (or, as applicable, CIT Leasing’s) right to purchase the Aircraft on account of any such delay, Lessor shall advise Lessee of such termination and this Lease shall automatically terminate and Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.5. Event of Loss to Aircraft Prior to Delivery. If an Event of Loss with respect to the Aircraft occurs prior to Delivery, Lessor will notify Lessee promptly following receipt of notice from the Seller and this Lease shall automatically terminate whereupon neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.6. Lessee Acceptance of Aircraft. If Lessee fails to ( x ) comply with the conditions contained in this Lease so as to allow Delivery to take place immediately following delivery of the

	  	12	  	ARTICLE 8
DELIVERY	

Aircraft by Seller to Lessor or ( y ) take delivery of the Aircraft when properly tendered for delivery by Lessor in the condition required under this Lease, Lessee will be liable for and shall indemnify Lessor for all documented, out-of-pocket costs and expenses reasonably incurred by Lessor as a result thereof including (but without limitation) any payments (other than the purchase price) which Lessor becomes obliged to make to Seller.
8.7. Risk of Loss to Aircraft following Delivery. Upon Delivery, risk of loss or damage to the Aircraft shall pass to Lessee for the Lease Term (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
8.8. Waiver of Remedies for Delay in Delivery. Lessor shall not be liable to Lessee for any delay or failure in Delivery to Lessee which is an Excusable Delay. Pursuant to Section 10.3, Lessee’s only rights or remedies for a delay in delivery, or anticipated delay in delivery, of the Aircraft not caused or occasioned by a Default of Event of Default of Lessee are those rights and remedies provided for in this Article 8 and Section 10.3.

	  	13	  	ARTICLE 8
DELIVERY	

9.	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	
9.1. Lessee’s Representations and Warranties . Lessee represents and warrants to Lessor that:
(a) Lessee is a company duly organised and validly existing under the laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted.
(b) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto such Operative Documents will constitute the valid and legally binding and enforceable obligations of Lessee (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization and other laws affecting the rights of creditors generally).
(c) The execution and delivery of, the performance of its Obligations under, and compliance by Lessee with the provisions of, the Operative Documents will not (i) contravene any existing applicable law of its State of Organisation or the State of Registration (or federal and other divisional governmental laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessee is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of its constitutional and/or organisational documents or (iv) result in the creation or imposition of, or oblige it to create, any Lien over its undertaking or any of its material assets, rights or revenues.
(d) Lessee is not in default under any material agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceeding is taking place or, to its knowledge, after reasonable inquiry, pending or threatened against Lessee which would have or could reasonably be expected to have a material adverse effect on its ability to perform its Obligations.
(e) The audited annual financial statements of Lessee for each financial year are certified by independent auditors and, as most recently delivered to Lessor, have been prepared in accordance with GAAP and fairly present the financial position of Lessee as at such date and the results of the operations of Lessee for the financial year ended on the date set forth therein and there has, to the knowledge of Lessee, after reasonable inquiry, been no material adverse change in the financial condition of Lessee since publication of such financial statements, except as otherwise previously disclosed to Lessor in writing.
(f) Other than making a filing in respect of this Lease in the State of Registration with the Aeronautics Authority and with the IR and the filing and registration in respect of the pledge under Mexican Law with the appropriate Governmental Authorities pursuant to Sections 4.2 and 13.3(a)(i), it is not necessary, in order to ensure the legality, validity, enforceability or admissibility in evidence of any Operative Document, that such Operative Document or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid in relation to any of the Operative Documents.

	  	14	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(g) Lessee has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which it is a party, the validity and enforceability hereof and thereof and the compliance, satisfaction or performance by Lessee with or of all monetary and other Obligations hereunder and thereunder and all such authorisations are, or prior to the Delivery Date will be, valid and in full force and effect.
(h) The choice by Lessee of New York law to govern the Operative Documents and the submission by Lessee to the jurisdiction of the New York courts is valid and binding on Lessee.
(i) In any proceedings taken in any jurisdiction in relation to any of the Operative Documents, Lessee will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(j) Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing or navigation fees or charges in respect of the Aircraft or any other aircraft owned by or leased to or operated by it, which if unpaid are reasonably likely to result in the imposition of a Lien on the Aircraft.
(k) Lessee has fully disclosed to Lessor all facts of which it has knowledge which in Lessee’s reasonable belief are material for disclosure to Lessor in the context of this Lease, Lessee knows of no material facts that would render any information previously furnished by or on behalf of Lessee to Lessor inaccurate or misleading in any material respect.
(l) No Default or Event of Default has occurred and is continuing.
(m) Lessee is solvent and able to pay its debts as the same fall due and the transactions contemplated by the Operative Documents are of commercial benefit to it and in its commercial interests.
(n) With respect to Taxes:
(i) Lessee has duly filed all Tax returns that it is required by applicable Laws to file, has duly paid all Taxes stated to be due and payable in such Tax returns and has duly paid all Taxes stated to be due in any demand for payment or similar communication issued by any taxing authority to Lessee other than:
(A) Taxes (1) which are being contested in good faith by appropriate proceedings in accordance with applicable Law, (2) for which adequate reserves are maintained in accordance with GAAP, and (3) the contest of which does not involve any risk of imposition of any criminal penalty on any Indemnitee or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(B) Tax returns, the non-filing of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein; and

	  	15	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(C) Taxes, the non-payment of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition of any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(ii) no Tax imposed by any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration is (or, subject to any change in law after the Delivery Date, will be) (A) required to be paid by Lessor as a result of the execution, delivery, performance or enforcement of, or the transactions and activities provided for or contemplated in, the Operative Documents, or (B) required to be deducted or withheld from or with respect to any amount payable by Lessee to Lessor under any Operative Document; and
(iii) Lessor is not (and, subject to any change in law after the Delivery Date, will not be) required to give any notice to, make any registration with, or file any document or information with, any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration with respect to Taxes solely by reason of the execution, delivery, performance or enforcement of the Operative Documents.
9.2. Application of Representations and Warranties; Survival . Each representation and warranty set out in Section 9.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft.
9.3. Lessee’s General Covenants. Lessee covenants to Lessor that it will:
(a) preserve and maintain (i) its corporate existence and (ii) all of its material rights, privileges and franchises in every jurisdiction in which the character of the property owned or the nature of the business transacted by it makes licensing or qualification necessary;
(b) pay or cause to be paid (i) all Taxes required by applicable Laws to be paid by it (whether such Taxes are imposed upon it or upon its income and profits or upon any property belonging to it or otherwise) prior to the date on which any penalty accrues, except Taxes described in sub-clause (A), (B) or (C) of Section 9.1(n)(i), and (ii) all other lawful claims which, if not paid, are reasonably likely to result in the imposition of a Lien upon its property or upon the Aircraft or any part thereof;
(c) remain duly qualified to operate the Aircraft under applicable Law;
(d) maintain in full force and effect all governmental consents, licenses, authorisations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to timely obtain or effect any new or additional governmental consents, licenses, authorisations, approvals, declarations, filings or registrations as may become necessary for Lessee’s performance of its Obligations;

	  	16	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(e) not consolidate with, merge with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person, provided that Lessee may do so if Lessee establishes to the reasonable satisfaction of Lessor that such merger, conveyance, transfer or lease will not have a materially adverse effect on Lessee’s ability to perform its Obligations and that the surviving entity will assume all Obligations, unless (i) in the case of a merger or consolidation, the surviving entity of such merger or consolidation is Lessee or an entity which (x)  is a certificated air carrier or parent thereof and ( y ) after giving effect to such merger or consolidation has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation and which has agreed in writing satisfactory to Lessor, to assume and perform all Obligations of Lessee hereunder, and such merger or consolidation will not have a materially adverse effect on the ability of the surviving entity to perform such Obligations; or, (ii) in the case of a transfer or lease, such transfer or lease will not have a materially adverse effect on Lessee or its ability to perform its Obligations hereunder;
(f) notify Lessor of any change to Lessee’s registered office, principal place of business or chief executive office if there is more than one place of business not more than thirty (30) days following such change;
(g) not (i) voluntarily suspend its certificated operations of the Aircraft or its fleet other than by reason of a merger or consolidation not otherwise prohibited by sub-clause (e) above; or (ii) permit to be revoked, canceled or otherwise terminated, whether by act or omission, all or substantially all of the material franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof, where such revocation, suspension or termination will have or could be deemed to have a material adverse effect on Lessee’s ability to perform its Obligations;
(h) pay promptly when due all navigation and en-route charges and all other charges payable by Lessee for the use of or services provided at any airport, whether in respect of the Aircraft or any other aircraft in Lessee’s fleet where the failure to pay the same could reasonably be expected to (i) result in a Lien upon the Aircraft, except to the extent being contested in accordance with applicable law and in respect of which contest Lessee has taken adequate reserves in accordance with GAAP, provided such contest would not give rise to any material likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of Lessor or any Financing Party, and/or (ii) materially and adversely effect Lessee’s ability to perform its Obligations hereunder;
(i) not represent or hold out Owner, Lessor (if not Owner), any Financing Party or any Affiliate of the foregoing as carrying goods or passengers on the Aircraft or being in any way connected to operation of the Aircraft; and
(j) if any items delivered to Lessor in connection with this Lease are required by this Lease to have a validity and effectiveness for the Lease Term, but have or are of a duration or effectiveness that is for less than the Lease Term when originally delivered, Lessee shall cause replacements, extensions or supplements thereof to be timely delivered to Lessor during the Lease Term to ensure that Lessor maintains at all times during the Lease Term the benefits initially afforded by such items and the continued effectiveness and validity of the same for the Lease Term.

	  	17	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

10.	LESSOR’S REPRESENTATIONS WARRANTIES AND COVENANTS; DISCLAIMERS	
10.1. General Representations and Warranties of Lessor. Lessor represents and warrants to Lessee that:
(a) Lessor is a company duly organised and validly existing under the laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted;
(b) Lessor has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto the Operative Documents to which it is a party will constitute its valid and legally binding and enforceable obligations;
(c) the execution and delivery of, the performance of its obligations under, and compliance by Lessor with the provisions of; the Operative Documents to which it is a party will not (i) contravene any existing applicable law of its State of Organisation (or federal and other divisional governmental laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessor is a party or is subject or by which it or any of its property is bound, or (iii) contravene or conflict with any provision of its constitutional and/or organisational documents;
(d) Lessor has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which Lessor is a party and the validity and enforceability hereof and thereof;
(e) each representation set forth in this Section 10.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft;
(f) on and as of Delivery, Lessor shall have the right to lease the Aircraft to Lessee and there is no actual, or to Lessor’s knowledge, after reasonable inquiry, pending or threatened litigation to prevent or prohibit Lessor from entering into and performing its obligations under the Operative Documents to which it is a party or otherwise affecting the Aircraft or Lessor’s rights, title and interest in and to the Lease;
(g) Lessor is solvent and able to pay its debts as the same fall due;
(h) to Lessor’s knowledge, after due inquiry, no motion has been filed or is otherwise pending before the United States Bankruptcy Court for the Southern District of New York (the “ Court ”) in the chapter 11 proceedings of CIT Group Inc. and CIT Group Funding Company of Delaware LLC (collectively, the “ Debtors ”) under Case No. 09-16565 (ALG) (the “ Proceedings ”) seeking to (i) bring Lessor or CIT Leasing into such Proceedings or which could reasonably be expected to adversely affect Lessee’s rights under the Lease or (ii) recover any funds held by Lessor, or by any other Person on behalf of Lessor, as deposits or reserves; and

	  	18	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

(i) no order of the Court nor approval of or assumption by either of Debtors, or any trustee, of or with respect to the Lease and/or the other Operative Documents is required in connection with the Proceedings.
10.2. Covenant of Quiet Enjoyment.
(a) Notwithstanding the effect of any provision in the Cape Town Convention to the contrary, which by the terms of the Cape Town Convention may be derogated from or varied, Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the Aircraft without interference by Lessor or by any Person lawfully claiming by or through Lessor. The lawful exercise by Lessor of its rights under any Operative Document in conformity with the terms and conditions of such Operative Document shall not constitute a breach of this Section 10.2.
(b) Lessor shall procure that Owner (if Lessor is not the Owner) of the Aircraft and any Financing Party shall give an undertaking to Lessee on terms substantially in the form set out in Appendix 8.
10.3. Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies .
(a) LESSEE AGREES THAT, AS BETWEEN ITSELF AND THE INDEMNITEES, IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS, WHERE-IS”. LESSEE ACKNOWLEDGES AND AGREES THAT NO INDEMNITEE HAS, OR SHALL BE DEEMED TO HAVE MADE, (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, FOR ITSELF AND FOR EACH INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE OR CAPABLE OF DISCOVERY, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, FOR (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ITEM OF EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii)

	  	19	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR) OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT.
(b) LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY THE SELLER AND, AS APPLICABLE, EACH MANUFACTURER. LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT (i) NO INDEMNITEE IS A SELLER, MANUFACTURER, REPAIRER OR PERSON MANAGING, DIRECTING OR PERFORMING SUCH SERVICES OF THE AIRCRAFT AND (ii) THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.
(c) IN CONSIDERATION OF (i) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY AND ALL ASSIGNABLE WARRANTIES OF ALL MANUFACTURERS, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE UNDER APPLICABLE LAW. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
(d) DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.

	  	20	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

(e) LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, ( X ) ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND ( Y ) ON ACCOUNT OF ANY REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE COVENANT OR PROMISE RUNS. LESSEE AGREES THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS, AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT AND LESSEE HEREBY WAIVES ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER ARTICLE 2A (UNIFORM COMMERCIAL CODE—LEASES) OF THE NEW YORK UNIFORM COMMERCIAL CODE OR OTHERWISE IN RESPECT OF SUCH BREACH.
10.4. DISCLAIMER AND WAIVER OF INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES. EACH OF LESSEE AND LESSOR (EXCEPT IN RESPECT OF LESSOR AS OTHERWISE SET FORTH HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT) AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES, AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR IN THE CASE OF LESSOR, EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 24, ANTICIPATED PROFITS AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF SUCH OTHER PARTY CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS.
10.5. NO DUTY OF INDEMNITEES TO INSPECT, ETC. NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE ORGANISATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT PERFORMED DURING THE LEASE TERM.

	  	21	  	ARTICLE 10
LESSOR’S REPRESENTATIONS, WARRANTIES
AND COVENANTS; DISCLAIMERS	

11.	GENERAL OPERATION OF THE AIRCRAFT	
11.1. General Operation. Lessee will:
(a) comply with the Law in any country or jurisdiction which may for the time being be applicable to the Aircraft and its use, maintenance and operation, including but not limited to the holding of all certificates, licenses, permits, authorisations and regulations, and take all reasonable steps to ensure that the Aircraft is not used for any illegal purpose;
(b) not use any Item of Equipment in any manner contrary to:
(i) any Manufacturer’s operating manuals or published instructions, or in violation of any airworthiness certificate or registration relating thereto; or
(ii) any published recommendation of the Manufacturer of such Item of Equipment or regulation of the Aeronautics Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) ensure that all personnel directly or indirectly employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aeronautics Authority and applicable Law;
(d) use the Aircraft solely in commercial passenger and cargo (provided such cargo is carried exclusively in the cargo compartments of the Aircraft) operations for which Lessee is duly authorised by the Aeronautics Authority and under applicable Law and, without prejudice to Lessee’s rights under Section 15.2 hereof, principally from one or more bases located within the State of Registration or Lessee’s State of Organisation (or such other location as Lessor may approve in writing from time to time, such approval not to be unreasonably withheld);
(e) not utilise the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other similar model aircraft within Lessee’s fleet of aircraft; and
(f) obtain and maintain in full force and effect all certificates, licenses, permits and authorisations required for the making of payments required by, and the compliance by Lessee with its other Obligations under, this Lease.
11.2. Insured Operations. Lessee will not use or locate or permit the Aircraft or any Item of Equipment to be used or located in any manner, for any purpose or at any location which is not covered by the insurance policies and the scope of coverage Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit the coverage provided under any such insurance policy or coverage provided thereunder.
11.3. Carriage of Goods. Lessee shall not use the Aircraft for the carriage of:
(a) whole animals living or dead except compliance with I.A.T.A. regulations;
(b) cargo to the extent forbidden pursuant to Section 2 (Limitations) of the I.A.T.A Dangerous Goods Regulations, as revised, from time to time;

22	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(c) nuclear fuels or waste, illegal drugs, controlled substances or the like or any other goods, materials or items of cargo which are prohibited by Law; or
(d) any other cargo which, whether due to size, content or packaging, (i) could reasonably be expected to cause damage to the Aircraft or (ii) the carriage of which might cause damage that would not be adequately covered by insurance.
11.4. Operational Expenses. Lessee shall pay or procure payment of all expenses incurred the operation of the Aircraft during the Lease Term including, without limitation, expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, landing and navigation fees, airport charges, passenger service and any and all other expenses or claims of any kind or nature incurred during the Lease Term, arising directly or indirectly in connection with or related to the use, movement, operation, storage or location of the Aircraft or any Item of Equipment. The obligations of Lessee under this Section 11.4 arising prior to any cancellation, termination or expiration of the Lease Term shall continue in full force and effect, notwithstanding such cancellation or termination (whether arising out of an Event of Default or otherwise) or expiration, and shall be enforceable by Lessor. Nothing herein shall be deemed to prevent Lessee from contesting any such expenses by appropriate proceedings, provided that no such contest shall give rise to any reasonable likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of any Indemnitee.
11.5. Compliance with Laws. Lessee will:
(a) not cause or permit the Aircraft to proceed to, or remain at, any location to the extent then prohibited by applicable Law by any Governmental Authority of the State of Registration or Lessee’s, Lessor’s or Owner’s State of Organisation or any Governmental Authority of the country in which such location is situated, except under exigent circumstances, when necessary to safeguard the Aircraft or the lives and well-being of passengers and crew, provided that the Aircraft is promptly removed from such location upon cessation of such exigent circumstances: and
(b) not use or permit the use of the Aircraft or any Item of Equipment with, for or on behalf of any Person:
(i) whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in effect during the Lease Term);
(ii) in violation of the United States Bank Secrecy Act, as amended, or any applicable regulations thereunder;
(iii) in violation of any of the sanctions programs administered by the Office of Foreign Assets Control of the United States Department of Treasury (“ OFAC ”), any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency, or any enabling legislation or executive order relating thereto ( ref : www.ustreas.gov/offices/enforcement/ofac/ );

23	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(iv) on the list of “Specially Designated Nationals” and “Blocked Persons” or prohibited under any OFAC regulation or executive order, as the same are amended from time to time;
(v) in violation of a United Nations sanction or whose assets have been frozen by enabling legislation of the same in the State of Registration or Lessee’s State of Organisation; or
(vi) in violation of any Laws similar to or consistent with the foregoing clauses (i) through (v) as the same are enacted in the Lessee’s State of Organisation or the State of Registration;
as any or all of the same are amended or supplemented from time to time, and including any successor Laws as the same are enacted from time to time.
11.6. Lessee’s Covenants Regarding Use of the Aircraft. Lessee covenants to Lessor that it will procure that ( x ) in each calendar year that begins and ends during the Lease Term and ( y ) in the case of the calendar year that includes the Delivery Date, during the part of such calendar year that begins on the Delivery Date and ( z ) in the case of the calendar year that includes the Termination Date, during the part of such calendar year that ends on the Termination Date:
(a) either:
(i) the Aircraft will be located outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii) more than fifty percent (50%) of the miles traversed in the use of the Aircraft will be outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof),
provided that the Aircraft will be deemed to be in the U.S.A. at all times during which it is engaged in transport between the U.S.A. and Puerto Rico or between two points in the U.S.A. or between two points in Puerto Rico; and
(b) either:
(i) the Aircraft will be located outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii) more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof); and
(c) the Aircraft will not be used, pursuant to any sublease, wet lease, charter, or otherwise, by any Person that:
(i) has a State of Organisation in or whose State of Organisation is (A) Canada or (B) Puerto Rico or the U.S.A. or

24	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(ii) is resident or principally based in (A) Canada or (B) Puerto Rico or the U.S.A. or
(iii) has any right under any sublease, wet lease, charter or other agreement to use (or to permit or suffer any other Person to use) the Aircraft or any part thereof in a manner which is reasonably likely to result in a breach of any covenant of Lessee in this Section 11.6
except that the Aircraft may be wet leased to a Person described in subclause (i)(B) or (ii)(B) provided that such Person will not have the right to use the Aircraft for more than a total of ninety (90) days in any calendar year, and Lessee provides Lessor written notice of such wet lease within ten (10) days after the date on which such wet lease is executed. For purposes of this Section 11.6(c), the term “wet lease” shall have the same meaning as the term Wet Lease except that it may include a “wet lease” of the Aircraft by a Permitted Sublessee (and in such case references to Lessee appearing in the definition of the term Wet Lease shall be deemed to refer to such Permitted Sublessee).
11.7. Certain Tax Matters. If, after the Delivery Date, an amendment to Section 954 of the United States Internal Revenue Code of 1986, as amended (the “ U.S. Tax Code ”), is enacted or an amendment to the Treasury Regulations under Section 954 of the U.S. Tax Code is promulgated as a final regulation and if independent tax counsel engaged by Lessee and reasonably acceptable to Lessor delivers to Lessee and Lessor a written opinion to the effect that due to such amendment, Rent payable by Lessee pursuant to this Lease will be treated as “derived from leasing the Aircraft in foreign commerce” within the meaning of Section 954(c)(2)(A) of the U.S. Tax Code even if Lessee does not comply with its warranty and covenant in Section 11.6(a), then if requested by Lessee in writing and if no Event of Default shall have occurred and be continuing, Lessor will negotiate with Lessee in good faith with a view to amending Section 11.6 to reflect such amendment, provided that no such amendment shall give rise to a reasonable likelihood that any Indemnitee would incur any liability, loss, cost, expense or other adverse consequence that it would not have incurred in the absence of such amendment unless Lessee is required by this Lease or any other Operative Document to indemnify such Indemnitee therefor in a manner that is reasonably satisfactory to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee in connection with the negotiation, documentation, execution, delivery, filing or recording of any amendment requested by Lessee pursuant to this Section 11.7.

25	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

12.	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	
12.1. General. Lessee, at its own expense, shall cause the Aircraft and each Item of Equipment to be serviced, repaired, overhauled, tested and maintained:
(a) in accordance with the Maintenance Program and the applicable Manufacturer’s Repair Manuals including, without limitation, the Manufacturer’s recommended corrosion prevention and control program for the Aircraft;
(b) so as to keep each such Item in as good operating condition and as necessary to maintain the value, utility and appearance of the Aircraft as when delivered to Lessee hereunder, reasonable wear and tear excepted;
(c) in compliance with Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance during the Lease Term;
(d) in compliance with all other Manufacturer’s service bulletins which require compliance in order to maintain the validity of warranties assigned or otherwise provided to Lessee; and
(e) in compliance with all Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be accomplished in strict accordance with such AD. Notwithstanding the foregoing, compliance with any AD may be accomplished by the use of an alternate method of compliance, provided that such alternate method of compliance is approved by the EASA and the Aeronautics Authority, without limitation.
12.2. Accomplishment of Tasks and Repairs. Lessee shall cause, at its expense, all Tasks to be accomplished on the Aircraft as they become due, with no discrimination toward the Aircraft with respect to any maintenance accomplished on similar model aircraft within Lessee’s fleet of aircraft. To the extent that the Maintenance Program permits certain structural Tasks to be accomplished on a sampling basis, Lessee nevertheless shall accomplish on the Aircraft all such structural Tasks that, by the terms of such Tasks, are applicable to the Aircraft, provided, however, at Lessee’s option the accomplishment of such structural sampling Tasks may deferred during the Lease Term, but in any event all such structural sampling Tasks that have been deferred shall be accomplished by Lessee not later than during the Final Check. Any damage, defects or corrosion discovered during the Lease Term shall be repaired in accordance with the applicable Manufacturer’s Repair Manual approved procedures at the sole expense of Lessee, and Lessee shall obtain Required Approval with respect to any repairs or modifications accomplished during the Lease Term which have not been approved by the Manufacturer and the Certificating Authority in addition to any approval received by Lessee from the Aeronautics Authority with respect to any such repairs or modifications.
12.3. Information on Maintenance. Lessee, at its cost and expense, shall furnish Lessor, at such times during the Lease Term as Lessor shall reasonably request, copies of records maintained relating to the Aircraft.
12.4. Aircraft Documents in English Language. Lessee, at its cost and expense, shall maintain all Aircraft Documents in the English language, including Aircraft Documents required by the

26	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

applicable Aeronautics Authority to be maintained in respect of each Item of Equipment, and promptly furnish to Lessor upon Lessor’s request such information as may be required to enable Lessor to file any reports required to be filed with any Governmental Authority because of Owner’s ownership of the Aircraft.
12.5. Originals. All Aircraft Documents, including records and documentation of maintenance accomplished on the Aircraft and any Item of Equipment shall be retained by Lessee until the Termination Date, at which time all records and Aircraft Documents shall be returned to Lessor in original (not duplicate) form. Notwithstanding the preceding sentence, Lessee may return any such Aircraft Documents in electronic form, except with respect to documentation of Airworthiness Directive accomplishments which must be in original form with the signature of the Person authorized to accomplish such, subject to the following:
(a) Lessee shall, unless already possessed by Lessor, provide Lessor with the software necessary to access such electronic documentation and the appropriate licenses for Lessor and any other owner or operator to use such software;
(b) Lessee shall provide Lessor with the appropriate excerpts from Lessee’ operations or procedures manuals (in English), approved by the Aeronautics Authority, specifying the procedures to be adhered to by Lessee in the use of such form of electronic documentation in place of original documents; and
(c) Lessee shall provide certification by Lessee’s Director of Quality Assurance that the electronic documentation was maintained in accordance with the Aeronautics Authority approved procedures as set forth in clause (b) above.
12.6. Performance of Maintenance. All Maintenance Checks, including the Final Check, shall be accomplished only at Approved Maintenance Organisations which shall be approved by Lessor, acting reasonably, in writing prior to the commencement of such Maintenance Check, such approval not to be unreasonably withheld. All other maintenance on the Aircraft will be performed by Lessee using personnel that are approved and appropriately certified by the Aeronautics Authority to perform such maintenance. Notwithstanding the preceding, at any time during the Lease Term, Lessee may provide Lessor with a list of Approved Maintenance Organisations that Lessee plans to use, and unless Lessor notifies Lessee in writing of its objection to any such Approved Maintenance Organisation at least thirty (30) days prior to the commencement of any Maintenance Check, such Maintenance Check may nevertheless be accomplished at such Approved Maintenance Organisation objected to by Lessor and such Approved Maintenance Organisation shall be deemed to be approved by Lessor for the accomplishment of such Maintenance Check, but otherwise such Approved Maintenance Organisation objected to by Lessor shall no longer be deemed to be approved.
12.7. Alterations, Modifications and Additions.
(a) Required Alterations, Modifications and Additions. Lessee, at its own cost and expense, shall make such alterations, modifications and additions to the Aircraft and any Items of Equipment as may be required from time to time to comply with:
(i) all Manufacturers’ service bulletins designated by such Manufacturer as either (x)  an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (1) is applicable to the respective Item of Equipment and (2) specify compliance during the Lease Term;

27	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(ii) Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be performed in strict accordance with such AD and without application or utilisation of any alternate method of compliance; and
(iii) all Laws and regulations of the Aeronautics Authority which require compliance during the Lease Term.
(b) Discretionary Alterations, Modifications and Additions . 
(i) Except as set forth in the preceding clause (a) or the following clause (ii), Lessee shall not make any alteration, modification or addition to the Aircraft or any Item of Equipment (including, but not limited to, galleys, lavatories, avionics or Engines) without the prior written consent of Lessor, which consent shall not be unreasonably withheld and shall be deemed given in the absence of a response within ten (10) Business Days following Lessor’s receipt of Lessee’s written request.
(ii) Notwithstanding the provisions of the preceding clause (i), Lessor’s consent shall not be required for any discretionary alteration, modification or addition that Lessee wishes to perform to the Aircraft provided that any such alteration, modification or addition does not require or result in a modification to the Aircraft structure or electrical wiring system, and is:
(A) for the installation of additional or enhanced Items of Equipment (and not in substitution for the same, unless replacing a Part with another Part that is of a higher modification status) or
(B) is cosmetic (and non-structural) in nature in order for Lessee to display its name, logo or other identification or advertising; or
(C) to the Aircraft interior configuration that (1) utilises the existing seat track system (without modification), (2) does not require the addition to, removal of or modification of any Aircraft structure, (3) does not impair the value or utility of the Aircraft or any Item of Equipment or adversely affect compliance with the type certificate data sheet of the Aircraft, and (4) does not cause any change in the category or status of the Aircraft as defined by the Manufacturer.
(c) Removed Items – Title and Risk of Loss . Subject to the provisions of Sections 12.8 and 12.9, title to any and all Items of Equipment removed from the Aircraft shall remain with Owner and risk of loss or damage to the same shall remain with Lessee during the Lease Term and Lessee shall keep, store and maintain the same in accordance with Manufacturer’s published procedures or written recommendations of the Manufacturer and standard industry practice (including the issuance of a Certificating Authority Form at the time of removal) for subsequent reinstallation or, at Lessor’s option, return to Lessor on the Termination Date.
(d) De-Modification of Aircraft . Subject to the provisions of Sections 12.8 and 12.9, at Lessor’s option (unless otherwise agreed in writing by Lessor and Lessee), Lessee shall, in connection with Return, de-modify and restore the Aircraft to the condition and configuration

	  		  	28	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

it was in prior to the accomplishment of any alterations, modifications or additions performed in accordance with this Section 12.7, assuming such condition was in compliance with the terms of this Lease, notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i), if the same is provided, or otherwise.
12.8. Replacement of Parts . Lessee, at its own cost and expense, shall promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall as promptly as practicable either reinstall such Part or replace such Part pursuant to the terms of this Article 12. Each replacement part prior to installation in the Aircraft or any Item of Equipment:
(a) shall be free and clear of all Liens (other than Permitted Liens);
(b) shall be in as good operating condition and shall have a value, utility, maintenance, modification and repair status at least equal to the Part replaced, assuming such replaced Part was in the condition and repair required to be maintained by the terms hereof;
(c) shall have documentation evidencing compliance with all applicable Certificating Authority and Aeronautics Authority requirements, including, without limitation (but to the extent applicable):
(i) a Certificating Authority Form and, if not indicated on such form, teardown report indicating time since Overhaul and a description of work accomplish with respect to such part by an Approved Maintenance Organisation;
(ii) Overhaul records with respect to Parts replacing Time Controlled Parts;
(iii) documentation of modification status and compliance with Airworthiness Directives; and
(iv) any other appropriate documentation applicable to the maintenance and repair status of such part; and
(d) shall:
(i) have the same part number and be of the same Manufacturer as the replaced Part (an “ OEM Part ”), except (x) to the extent the Manufacturer has superseded the part number of such OEM Part, and in such an event the superseding part number shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual or a Required Approval or (y) if such OEM Part is no longer commercially available, an equivalent part with a different part number or from a different manufacturer shall be acceptable, and (z) non-OEM Parts manufactured by alternate manufacturers may be used to replace cosmetic items and standard hardware in the passenger cabin of the Aircraft, provided, however, each of sub-clauses (y) and (z) herein with respect to such equivalent parts or non-OEM Parts shall be subject to the approval of both the Airframe Manufacturer and the EASA for installation of such parts on the Aircraft;

	  	29	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(ii) with respect to Time Controlled Parts, have not accumulated more time since new (and time since Overhaul if such replaced Part has previously been Overhauled) than that of the replaced Part.
12.9. Title to Parts.
(a) Parts Replacement in Connection with Maintenance . Any Part removed from the Airframe or any Item of Equipment shall remain the property of Owner and subject to this Lease, no matter where located, until such time as such Part shall be replaced by a part which has been incorporated or installed in or attached to the Aircraft or an Item of Equipment pursuant to the requirements for replacement parts specified in Section 12.8 and title to such replacement part has been vested in Owner. Except as set forth in Section 12.10, immediately upon any replacement part becoming incorporated, installed or attached to the Aircraft or an Item of Equipment as provided above, such part shall become the property of Owner, title to such replacement part shall immediately vest in Owner and such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. Once the replacement part has become subject to this Lease, title to the Part so replaced shall immediately vest in Lessee.
(b) Parts Replacement in Connection with Discretionary Alterations, etc . So long as no Default or Event of Default shall have occurred and be continuing, at any time during the Lease Term, Lessee may remove any Part from an Item of Equipment that was installed pursuant to Lessee’s accomplishment of an alteration, modification or addition pursuant to Section 12.7(b), provided that:
(i) such Part is in addition to and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to such Item at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part;
(ii) such Part is not required to be incorporated or installed in or attached or added to such Item pursuant to the terms hereof;
(iii) such Part can be removed from such Item without diminishing or impairing the value, utility or airworthiness which such Item would have had at such time had such alteration, modification or addition not occurred; and
(iv) such Part is not required to be installed on or attached to such Item of Equipment by the Aeronautics Authority or the Certificating Authority in order to maintain the airworthiness certification of the Aircraft for passenger operation.
Upon removal of any such Parts, Lessee shall restore the area where such Part was removed so that it is in the condition it would have been had such Part not been installed, assuming such condition was in compliance with the terms of this Lease, and so that such removal is undetectable. Title to any Part not removed by Lessee as above provided prior to the return of the respective Item of Equipment to Lessor hereunder shall remain with Owner.
12.10. Temporary Replacement of Parts . Provided no Event of Default has occurred and in continuing, at any time during the Lease Term, any Part incorporated or installed in or attached or added

	  	30	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

to any Item of Equipment may be replaced temporarily with a part which does not satisfy the requirements of Section 12.8; provided that
(a) there shall not have been readily or economically available to Lessee at the time and in the place that such substitute or replacement part was required to be installed on the Airframe or Engine a replacement part complying with the requirements of Section 12.8;
(b) it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee as an airline (as determined by Lessee) to have grounded the Aircraft until such time as a replacement part complying with the requirements of Section 12.8 became available for installation on the Aircraft;
(c) as soon as practicable after installation of the same on the Airframe or Engine (and in any event no later than the earliest to occur of (i) the first C-Check following such installation, (ii) the Scheduled Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the requirements of Section 12.8 and replace the same with a part complying with such requirements.
Upon the replacement by Lessee of any such non-conforming part pursuant to the foregoing clause (c), title to such replacement part shall, without further act, vest in Owner and such part shall be deemed Part hereunder.
12.11. Exchanging Parts . Any Part removed from the Aircraft or any Item of Equipment in the course of performance of maintenance on the same may be subjected by Lessee to normal exchanges customary in the airline industry in the ordinary course of Lessee’s business provided that ( x ) the parts replacing such removed Parts are incorporated, installed in or attached to the Aircraft or such Item of Equipment promptly following the removal of such Parts, and ( y ) all applicable requirements of the Aeronautics Authority and the Certificating Authority shall be adhered to with respect to all such Parts being incorporated, installed, or attached, whether or not such Part was originally removed from the Aircraft or any Item of Equipment or is a replacement for any such removed Part. Lessee shall, whether or not such exchanged part is owned by Lessee at the time such exchange is completed, comply or ensure the continued compliance with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to installation of the same into the Aircraft or any Item of Equipment.
12.12. Temporary Attachment and Removal of Engines.
(a) Installation of Other Engines . 
(i) In the course of performance of Lessee’s Obligations under this Lease, Lessee may temporarily remove an Engine from the Airframe and install an engine on the Airframe that is owned by Lessee or which is subject to a lease, conditional sale agreement, trust indenture or other security agreement, provided that such other engine is ( x ) free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such engine and as the same are otherwise permitted to exist pursuant to Section 17.7, and ( y ) Lessee, or if Lessee is not the owner of the engine, the lessor, conditional seller, indenture trustee or secured party of any such engine agrees in writing in a form satisfactory to Lessor, acting reasonably, and which agreement may be set forth in the relevant lease, conditional sale agreement, mortgage, indenture or security agreement, that it will not acquire or claim, as against Lessor, any right, title or interest in or any adverse right, title or interest to the Airframe or any Item

	  	31	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

of Equipment as the result of any such engine being installed on the Airframe. Lessor agrees for the benefit of any such owner, lessor, conditional seller or secured party that, subject to such Person’s agreement as set forth above, Lessor shall not claim any interest in any such engine by virtue of its installation on the Airframe. If any of the respective interests of Lessor, Owner or any relevant Financing Party in any Item of Equipment is materially impaired by virtue of installation of such engine on the Airframe, Lessee shall promptly, following receipt of written notice from Lessor to such effect, remove such engine from the Airframe, failing which such impairment or adverse effect will be deemed an Event of Default pursuant to Section 23(k).
(ii) Lessee shall comply with the requirements of Section 19.4(c) for as long as such engine is installed on the Airframe and the engine shall be removed from the Airframe and the removed Engine reinstalled on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not later than the Termination Date.
(b) Installation of Engines on other Airframes . Provided no Event of Default has occurred and is continuing, Lessee may install an Engine removed from the Airframe on any other airframe of the same type operated by and in Lessee’s fleet of aircraft, but only if:
(i) Lessee has title to such other airframe and such airframe is free and clear of all Liens (except as the same are permitted to exist pursuant to Section 17.7) or
(ii) such other airframe is leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement, provided that (A) such airframe is free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such airframe and as the same are otherwise permitted to exist pursuant to Section 17.7, and (B) there shall be in effect a written recognition of rights agreement of the lessor or secured party of such airframe substantially in the form appearing in Appendix 8 or substantially similar agreement to the effect that such lessor, conditional seller or secured party will not claim any interest in the Engine by virtue of such Engine being installed on such airframe, and which agreement may be set forth in any relevant lease, conditional sale agreement, mortgage or security agreement. If any of the respective interests of Lessor or any relevant Financing Party in an Engine is materially impaired by virtue of installation on any such other airframe, Lessee shall promptly remove such Engine from such other airframe, failing which such impairment or adverse effect will be deemed an Event of Default under Section 23(k) or in the event such continued installation of such Engine on such airframe has resulted in loss of title to the Engine by Lessor, an Engine Loss;
and in either case, Lessee shall comply with the requirements of Section 19.4 for as long as such Engine is installed on such other airframe and the Engine shall be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not less than thirty (30) days prior to the Scheduled Termination Date.
12.13. Installation of Items of Equipment on Other Aircraft . Subject to the preceding provisions of this Article 12, Lessee may permit any Item (excluding Landing Gear) to be installed on another aircraft solely to the extent such aircraft is within Lessee’s fleet of aircraft; provided, however, upon the occurrence and continuation of an Event of Default following the removal of any such Item from the Aircraft, Lessee shall promptly, but in no event later than ten (10) Business Days following such Event of Default:
(a) reinstall on the Aircraft each such Item not then currently installed thereon assuming such Item is in airworthy condition, or

	  	32	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(b) in the event such Item is not in an airworthy condition, such Item shall be restored promptly to an airworthy condition and reinstalled on the Aircraft or, in the case of a Part, such Part may be exchanged in accordance with Section 12.11.
12.14. Failure to Reinstall Engines and Items of Equipment on the Aircraft . If (a) an Event of Default has occurred and is continuing which is the result of Lessee’s failure to make any payments when due or failure to maintain the airworthiness of the Items of Equipment, and (b) Lessee fails to comply with the requirements set forth in Sections 12.12 and 12.13, then in such instance and in recognition of the higher credit risk to which an aircraft lessor is exposed when an Engine, APU, or Part has been removed from an aircraft at a time when a Default or an Event of Default has occurred and is continuing, Lessee shall pay to Lessor an additional rental charge, Supplemental Rent and not as a penalty, in the amount of (X) ***** for each Engine, (Y) ***** for the APU, and (Z) ***** of the replacement cost for any Part, for each day each such Engine, APU or Part, as the case may be, remains in noncompliance with Sections 12.12 or 12.13, as the case may be.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	33	  	ARTICLE 12
MAINTENANCE, MODIFICATION AND
OPERATION OF THE AIRCRAFT	

13.	MAINTENANCE RESERVES	
13.1. Maintenance Reserves . Lessee shall make payments to Lessor in respect of the Maintenance Reserves in accordance with Appendix 2D, on a monthly basis, within ten (10) days following the last day of each Rent Period, with the first payment due ten (10) days following the second Rent Payment Date; provided that Lessee’s final payment in respect of Maintenance Reserves shall be made on the Termination Date.
13.2. Discrepancies . If Lessee’s actual utilisation of the Aircraft is greater than Lessee’s utilisation of the Aircraft reported to Lessor in accordance with Article 16, Lessee shall make up any deficiency payments in respect of Maintenance Reserves to Lessor within three (3) Business Days of the date of receipt of written notice from Lessor.
13.3. Rights in Maintenance Reserves.
(a) All amounts paid by Lessee in respect of Maintenance Reserves are the sole and exclusive property of Lessor and Lessor shall be entitled to freely commingle such moneys with its several funds and deal with such moneys as Lessor sees fit. Notwithstanding such stated intent, if and to the extent that the Maintenance Reserves or any part thereof, under any applicable Law or otherwise, are determined to be security deposits or otherwise the property of Lessee or if it is so determined those monies are a debt owed to Lessee or that Lessee shall have any interest in those monies, Lessee and Lessor agree that subclauses (i) and (ii) below shall apply.
(i) Pursuant to applicable Law, Lessee hereby grants to Lessor a first and prior perfected Lien and possessory security interest in the Maintenance Reserves as security for Lessee’s Obligations, including, without limitation, the obligations of Lessee to maintain and return the Aircraft and each Item of Equipment in the condition required by this Lease. Lessee agrees to execute and file, at Lessee’s expense, with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
(ii) Lessee shall not assign, hypothecate or otherwise transfer its interests, if any, in the Maintenance Reserves.
(b) Upon and during the continuance of an Event of Default, and in addition to all other rights Lessor may have under this Lease under applicable Law, Lessor may use, apply or retain all or any portion of the Maintenance Reserves, and, without limitation, Lessor may immediately or at any time thereafter, while any Event of Default is continuing, without prior notice to Lessee ( x ) offset all or any part of the Obligations or Related Obligations against the liabilities of Lessor in respect of any obligations of Lessor or Affiliate of Lessor under any Related Lease, or ( y ) apply the Maintenance Reserves in or towards the payment or discharge of the Obligations or Related Obligations in such order as Lessor reasonably sees fit. If Lessor uses or applies all or any portion of such Maintenance Reserves, such application shall not be deemed a cure of any Default or Event of Default unless and until Lessee shall have, and Lessee shall within three (3) Business Days after written demand therefor deposit with Lessor in cash an amount sufficient to fully restore each such Maintenance Reserve account to its original sum prior to such application plus any amount then due and payable by Lessee in respect of Maintenance Reserves.

	  	34	  	ARTICLE 13
MAINTENANCE RESERVES	

13.4. Claims for Reimbursement – Timing . Any claim by Lessee for reimbursement from the Maintenance Reserves made pursuant to this Lease shall be made within the earlier to occur of ( x ) one hundred eighty (180) days following the completion date of the Maintenance Check for which such claim is being made and ( y ) the Termination Date, provided that notification by Lessee to Lessor on or before the Termination Date that a claim exists and will be submitted no later than 180 days following completion of the respective Maintenance Check shall be deemed as complying with the timing requirement set forth herein. Should Lessee fail to make such claim within such time period (or agree with Lessor in writing concerning an alternate disposition for such claim), Lessee shall thereafter be forever barred and estopped from making a claim in respect of such maintenance.

	  	35	  	ARTICLE 13
MAINTENANCE RESERVES	

14.	SELLER’S AND MANUFACTURERS’ WARRANTIES	
14.1. Assignable Warranties. At Delivery, Lessor will assign to Lessee for the duration of the Lease Term the benefit of all warranties given to Lessor by the Seller and the Engine Manufacturer pursuant to the airframe and engine warranty assignment agreements substantially in the forms appearing in Appendix 8. In addition, at Delivery Lessor will assign and makes available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by any other Manufacturer, and at Lessee’s cost, Lessor shall cooperate with Lessee in respect of the enforcement of any such warranties.
14.2. Reassignment; Assignment of Lessee Warranties . On the Termination Date:
(a) the benefit of any warranty and other rights assigned or made available by Lessor to Lessee pursuant to this Lease will be reassigned automatically and without further act or writing to Lessor; provided that upon the occurrence and continuation of an Event of Default, Lessor may instruct any Manufacturer of any Item of Equipment to make any payments of monies under any warranty claims made by Lessee directly to Lessor for further credit to Lessee upon and subject to Lessee’s cure of such Event of Default; and
(b) Lessee shall assign and shall be deemed to have assigned to Lessor on and as of the Termination Date, at no charge to Lessor, any and all warranties Lessee has obtained in connection with any maintenance or services performed on the Aircraft or any Item of Equipment during the Lease Term.
14.3. Warranty Claims . Lessee will diligently and promptly pursue any valid claims it may have under the warranties assigned to it hereunder with respect to the Aircraft and other Items of Equipment. At the written request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of (x)  fourteen (14) days prior to the Scheduled Termination Date and ( y ) the Termination Date of all such warranty claims made by Lessee during the Lease Term to the extent historical records of the same are maintained by Lessee (except to the extent such information shall have previously been provided to Lessor).

	  	36	  	ARTICLE 14
SELLER’S AND MANUFACTURER’S WARRANTIES	

15.	SUBLEASING AND WET LEASING	
15.1. Subleasing . Provided no Default or Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Permitted Subleases for the Aircraft with Permitted Sublessees provided that:
(a) the term of such Permitted Sublease is not for a period exceeding the Lease Term and shall expressly prohibit sub-subleasing of the Aircraft and any Item of Equipment independent of the Airframe;
(b) the rights of the Permitted Sublessee under such Permitted Sublease are at all times expressly subject and subordinate to the rights of Lessor hereunder and to the respective interests of Owner and any Financing Parties and shall contain a provision substantially to the effect of:
“Anything in this sublease to the contrary notwithstanding, the sublessee’s rights hereunder to the possession, use and enjoyment of the Airframe, and if attached to the Airframe at the commencement of the sublease or if subsequently delivered to sublessee during the term of the sublease, the Engines in accordance with the terms hereof shall be subject to the Aircraft Lease Agreement dated 30 November 2009 (the ‘ Primary Lease ’) between CIT Aerospace International, as lessor (the ‘ Primary Lessor ’), and the sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the sublessee confirms and agrees that this sublease is in all respects subject and subordinate to the Primary Lease. Upon notice to the sublessee hereunder by the Primary Lessor that an Event of Default (as defined in the Primary Lease) has occurred and is continuing, and that the Primary Lease shall have been cancelled or terminated pursuant to the terms thereof, the Primary Lessor may, at its option, by written notice to the sublessee after the date of such cancellation or termination:
 
 	(i)	require the sublessee to enter into an agreement, in form and substance satisfactory to the Primary Lessor, recognising the Primary Lessor, as the sublessor hereunder and reconfirming all of the obligations of the sublessee hereunder or	
 
 	(ii)	terminate this sublease and require prompt delivery by the sublessee of the Aircraft to the Primary Lessor, in accordance with the return provisions of this sublease.	
Unless the sublessee shall have received any such written notice from the Primary Lessor requiring attornment or terminating this sublease, the sublessee shall be and remain fully obligated hereunder notwithstanding the continuance of any Event of Default under the Primary Lease or the termination or cancellation thereof pursuant to the terms thereof.”;
(c) Lessee causes the Permitted Sublessee under the Permitted Sublease to deliver to and for the benefit of Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease a supplemental power of attorney for deregistration of the Aircraft in the form delivered by Lessee to Lessor at Delivery;
(d) Lessee and such Permitted Sublessee shall not enter into any amendments, modifications, waivers or the like of any provision of the Permitted Sublease without Lessor’s prior written consent and should such consent be granted, Lessee shall deliver to Lessor a copy of any such duly executed agreements between Lessee and such Permitted Sublessee in connection with the same;

	  	37	  	ARTICLE 15
SUBLEASING AND WET LEASING	

(e) if necessary, Lessee and Permitted Sublessee shall authorise the filing of and deliver documents appropriate for perfection filings in the State of Registration and such other jurisdictions as Lessor, in good faith, deems reasonable and appropriate, in form and substance satisfactory to Lessor, covering the interests of Lessee and such Permitted Sublessee under such Permitted Sublease, together with any other documents requested by Lessor to protect or perfect the interest of Lessor, Owner and any Financing Parties in the Permitted Sublease in the State of Registration and/or such other jurisdictions;
(f) Lessee shall assign each Permitted Sublease and all rights and security deposits and maintenance and other reserves received thereunder to Lessor pursuant to a security assignment of the Permitted Sublease together with a consent and agreement of the Permitted Sublessee, each in form and substance satisfactory to Lessor and, if applicable, Owner and each Financing Party, as security for Lessee’s Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding the enforceability and perfection of the Permitted Sublease and such assignments for security and the consent and agreement or other assurances reasonably satisfactory to Lessor;
(g) the provisions of each Permitted Sublease shall provide for benefits and protections to Lessee, as sublessor, which are (in respect of material terms and in the aggregate) not less advantageous to Lessee, as sublessor, , than the benefits and protections provided to Lessor by the provisions of this Lease;
(h) Lessee shall ( x ) notify Lessor of the terms of each Permitted Sublease (and provide copies of the final drafts thereof) not less than fifteen (15) Business Days prior to the execution of such Permitted Sublease, and ( y ) furnish the “original” copy of such Permitted Sublease to Lessor as soon as possible after the execution thereof, but in any event prior to the delivery of the Aircraft to such Permitted Sublessee; and
(i) Neither Lessee nor Permitted Sublessee shall register the sublease on the International Registry without Lessor’s prior consent, which consent shall not be unreasonably withheld.
15.2. Wet Leasing. Provided no Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Wet Leases for the Aircraft to any Person provided that:
(a) the rights of the lessee under the Wet Lease are at all times expressly subject to and subordinate to, and do not conflict in any respect with (or give such wet lessee any rights greater than the rights of Lessee under), the terms of this Lease and the rights of Lessor hereunder and the respective interests of Owner and any Financing Party;
(b) Lessee provides Lessor with ( x ) a certified copy of the applicable provisions from the Wet Lease or an officer’s certificate indicating whether Lessee or the wet lessee under the Wet Lease will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the Wet Lease, and ( y ) a certified copy or original of an insurance certificate and broker’s letter of undertaking confirming the maintenance of insurance coverage required by this Lease; and

	  	38	  	ARTICLE 15
SUBLEASING AND WET LEASING	

(c) in any event, unless otherwise agreed by Lessor in writing, the term of such Wet Lease ends on a day not later than thirty (30) days prior to the Scheduled Termination Date.
15.3. No Independent Subleasing of Items of Equipment. No Item of Equipment may be subleased independently from the Aircraft.
15.4. Expenses. Lessee shall pay or reimburse Lessor, Owner and any Financing Party on demand for their respective, documented, out of pocket costs and expenses reasonably incurred in connection with the review, negotiation and consummation of the transactions contemplated by any Permitted Sublease or Wet Lease.
15.5. Lessee Remains Liable. Lessee shall remain primarily and fully responsible and liable for the performance of its Obligations under and the observance of the terms of this Lease and the Operative Documents, notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted Sublease or Wet Lease had not occurred.

	  	39	  	ARTICLE 15
SUBLEASING AND WET LEASING	

16.	REPORTING AND INSPECTIONS	
16.1. Financial Reporting. Lessee agrees to furnish to Lessor the following, which shall be deemed Information:
(a) Semi-Annual Statements. As soon as reasonably practicable after the end of the second and fourth quarterly fiscal periods in each fiscal year of Lessee, and in any event within one hundred twenty (120) days thereafter, duplicate copies, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such six month period;
(ii) consolidated statements of income and retained earnings of Lessee or Guarantor for such six month period; and
(iii) consolidated statements of cash flow of Lessee or Guarantor for the portion of the fiscal year ending with such six month period.
(b) Annual Statements. As soon as practicable after the end of each fiscal year, and in any event within one hundred eighty (180) days thereafter, a copy, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such year, and
(ii) consolidated statements of income and retained earnings and of cash flow of Lessee or Guarantor for such year, prepared in accordance with GAAP (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognised standing in Lessee’s State of Organisation (which report may be adverse, qualified or disclaim an opinion).
(c) Comparison. All statements furnished under clauses (a) or (b) above shall set forth in comparative form the amount for the end of the corresponding fiscal year, or corresponding period of the preceding fiscal year, as the case may be.
(d) Satisfaction by Publication. Lessee’s obligations under Sections 16.1(a) through (c) above shall be deemed satisfied should Lessee or Guarantor publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee thereunder, and further notify Lessor in writing of the website address.
(e) Notice of Proceedings. Prompt notice of any litigation or arbitral proceedings not covered by insurance (except for deductibles standard in the airline industry) and of all proceedings by or before any Governmental Authority (i) which might adversely affect Owner’s ownership or Owner’s or Lessor’s other interests in the Aircraft, (ii) which relate to the Aircraft and where the amount involved not covered by insurance is in excess of ***** or (iii) which might, in the reasonable and good faith judgment of Lessee, have a material effect on the ability of Lessee to perform the Obligations.
(f) Additional Information. Lessee will furnish to Lessor (i) unless available on a website generally available free of charge to the public, promptly after the same has been made public, a copy of any announcement released by Lessee to any stock exchange on which Lessee is publicly traded by shares (if applicable), and (ii) a copy of any other information concerning Lessee’s business which Lessee releases or otherwise makes available to its creditors generally.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	40	  	ARTICLE 16
REPORTING AND INSPECTIONS	

16.2. Aircraft Utilisation and Other Reporting/Information. During the Lease Term, Lessee agrees to furnish to Lessor the following information in connection with Lessee’s utilisation of the Aircraft:
(a)(i) within ten (10) days following the second Rent Payment Date and each remaining Rent Payment Date during the Lease Term, and (ii) on the Termination Date, a utilisation report in the form appearing in Appendix 8 reporting the utilisation of the Items of Equipment set forth therein for the immediately preceding calendar month or part thereof;
(b) as promptly as reasonably practicable, but in no event later than the date of issuance of the next monthly utilisation report following the date of the removal of any Engine, Landing Gear or APU, advising of (i) the reason for such removal, (ii) the location of such Item of Equipment, (iii) the total accumulated Flight Hours and Cycles of such Item of Equipment (or total APU Hours with respect to the APU), (iv) the Flight Hours and Cycles accumulated since the most recent Engine Restoration with respect to any Engine or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the APU Hours accumulated since the most recent Overhaul with respect to the APU, and (vi) the intended workscope, in each case, as applicable;
(c) written notice of and information of any accident or incident with respect to any Item of Equipment (other than Parts) as promptly as possible, and in any event within two (2) Business Days following the occurrence or detection thereof;
(d) within a reasonable time (but not less than ten (10) days) prior to the commencement date for any Maintenance Check and in accordance with Section 12.6, the identity of the Approved Maintenance Organisation Lessee intends to have perform such check together with a copy of the workscope intended to be accomplished in connection with the same, to the extent available; and
(e) upon written request of Lessor, a copy of the Maintenance Program, inclusive of all revisions issued as of the date of such request. Lessor agrees not to disclose such Maintenance Program to any Person (other than Lessor’s employees and consultants, who shall be instructed not to disclose the same other than as permitted by this Section 16.2(e)) except as necessary to bridge the Maintenance Program onto another maintenance program following the Termination of the Lease, and shall require any Person to whom it shall disclose the same as permitted by this Section 16.2(e), to agree in writing not to disclose the contents of such Maintenance Program.
16.3. Further Information; Inspection.
(a) Lessee shall provide to Lessor, following Lessor’s written request during the Lease Term (provided that long as no Event of Default has occurred and is continuing, such requests shall be made no more than once per year) and within one hundred eighty (180) days following the Termination Date, a list of the airports to which Lessee has operated the Aircraft during the (i) twelve (12) months preceding such request (or the Termination Date, if applicable).
(b) During the Lease Term, Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Items of Equipment as Lessor may reasonably request.

	  	41	  	ARTICLE 16
REPORTING AND INSPECTIONS	

(c) Lessee shall permit any Person (including prospective purchasers, financiers or lessees of the Aircraft) designated in writing by Lessor, to visit and inspect (at any reasonable time, provided that, so long as no Event of Default has occurred and is continuing, such inspection shall not unreasonably interfere with Lessee’s business, maintenance or operational commitments) the Items of Equipment, their condition, use and operation and the records maintained in connection therewith and, at Lessor’s cost, to make copies of such records as Lessor may reasonably designate (unless an Event of Default has occurred and is continuing, in which case such copies shall be provided to Lessor at Lessee’s cost).
(d) Lessor shall be permitted to have representatives and/or agents present throughout the accomplishment of Maintenance Checks to observe all aspects of the same including, but not limited to, the workscope thereof; provided, however, that such representatives and agents shall not interfere with such Maintenance Checks and shall be bound by all rules and regulations of the relevant maintenance provider. Neither Lessor nor any person designated by Lessor shall have any duty to make any such inspection and none shall incur any liability or obligation by reason of making or not making such inspection.
16.4. Technical Report Prior to Return of Aircraft.
(a) Twenty (20) months prior to the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance status report detailing the information in the form appearing in Appendix 8.
(b) At Lessor’s written request, Lessee will make copies available of (i) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at Return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) Time Controlled Part listings and current maintenance status of each, (v) a list of modifications and alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior material burn certificates, (vii) the complete workscope for the Maintenance Checks and other work to be performed prior to Return, (viii) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from any Manufacturer, (ix) current Engine disk sheets and a description of the work accomplished during the last shop visit for each Engine and (x) any other data which is reasonably requested by Lessor in connection with any of the foregoing.

	  	42	  	ARTICLE 16
REPORTING AND INSPECTIONS	

17.	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	
17.1. Registration. At Delivery, Lessee shall register the Aircraft (or shall cause the same to be registered) with the Register in the State of Registration with the respective interests of Owner, Lessor and, at Lessor’s cost, any relevant Financing Party recorded to the fullest extent permitted by applicable law in the State of Registration and shall thereafter maintain such registration throughout the Lease Term, but, in respect of the interests of any Financing Party, at Lessor’s cost. Lessee shall bear all costs incurred in effecting and maintaining the registration of Owner’s and Lessor’s interests during the Lease Term, but Lessor shall bear any cots of filing, maintaining or otherwise perfecting the interests of any Financing Party. Lessor and Owner shall cooperate with Lessee in effecting and maintaining such registration and shall provide to Lessee such documents as Lessee may reasonably request in connection therewith. Lessee shall not take or permit any action inconsistent with the continued registration of the Aircraft or the recordation of the various interests of Lessor, Owner and any Financing Party therein with the Register.
17.2. Identification Plates. Lessee shall, throughout the Lease Term, maintain in respect of the Airframe, the APU and each Engine a fireproof identification plate of a reasonable size, in a clearly visible place in the cockpit of the Aircraft (or in the vicinity of the Airframe Manufacturer’s data plate) and in close proximity to the Manufacturer’s data plate on each Engine and the APU, that contains the legend in writing appearing in Appendix 2B, Section 5. Lessee shall not remove, or cause or permit the removal or modification of such identification plate without Lessor’s prior written consent. Lessee shall not allow the name of any other Person (with the exception of Lessee) to be placed on the Airframe or any Engine as a designation that might be interpreted as a claim of ownership or of any interest therein. Lessee shall promptly replace any such nameplate that becomes illegible, lost, damaged or destroyed for any reason. If at any time Lessor and/or Owner transfer their respective interests in the Aircraft or this Lease as permitted hereunder or Lessor or Owner finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost, promptly affix such new nameplates to the Airframe and the Engines as may be required by Lessor.
17.3. Aeronautics Authority Acknowledgment. If and to the extent that the same is customarily available in the State of Registration, Lessee shall use reasonable efforts to obtain and deliver to Lessor at Delivery, a letter from the Aeronautics Authority addressed to Lessor and (if so requested by Lessor) Owner and/or any Financing Party confirming that it will recognise Owner’s title to the Aircraft and the respective rights of Lessor, Owner and/or such Financing Party to deregister the Aircraft upon the cancellation, termination or expiration of the leasing of the Aircraft hereunder in accordance with the provisions hereof.
17.4. Authorisation to Make Perfection Filings. The execution of this Lease by the parties hereto constitutes the authorisation by Lessee to Lessor’s legal counsel to make such perfection filings as Lessor and its counsel deem necessary or desirable to protect the interest of Lessor, Owner and any Financing Party hereunder. From time to time on reasonable written request made by Lessor, Lessee shall provide to Lessor a letter on the letterhead of Lessee, in form and substance reasonably satisfactory to Lessor and executed by an officer of Lessee, authorising such Persons as Lessor may specify to make such perfection filings as Lessor reasonably deems necessary or desirable to protect the interests of Lessor, Owner or any Financing Party hereunder.
17.5. Perfection of Title.
(a) Lessee shall, together with Owner and/or Lessor, cause, or, at Lessor’s request assist Lessor in causing, this Lease, the Lease Supplement and any and all additional instruments

	  	43	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

which shall be executed pursuant to the terms hereof as permitted by applicable Law or regulations, to be kept, filed and recorded in the offices of any Governmental Authorities in the State of Registration as required by the Register, any applicable Aeronautics Authority and any applicable Law. Lessee shall not take any action which would conflict with or adversely affect such filings and recordation of the Lease and such other documents as provided herein.
(b) If at any time subsequent to the initial recordation under the preceding clause (a), any filing or recording is reasonably necessary or desirable to protect the interests of Lessor and/or Owner, Lessee, at its own cost and expense and upon written request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded or, as necessary to be re-filed and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor and Owner hereunder and in the Aircraft or any Item of Equipment. At the reasonable request of Lessor and at Lessor’s cost, Lessee shall furnish to Lessor and Owner (if not Lessor) an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation.
(c) Without limiting the foregoing, Lessee shall do or cause to be done any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and interests of Owner and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee does, or is reasonably likely to, operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Owner’s ownership rights regarding the Aircraft within any such jurisdiction.
17.6. Cape Town Convention.
(a) Lessee shall promptly make or approve registrations, filings and recordings, and/or do or cause to be done such additional acts and things which may be reasonably requested by Lessor (for itself or for and on behalf of Owner and any Financing Party) as being required by or advisable under applicable law, in order ( x ) that the Operative Documents effectively constitute international interests, while retaining the commercial and business agreements of the parties as described therein in any such new Operative Documents, and provide to the such parties the full benefit of the Cape Town Convention with respect to the Aircraft and the Engines, and ( y ) the Operative Documents contain such provisions as may be necessary to confirm the commercial and business agreements of the parties therein to the greatest extent permitted under the Cape Town Convention, including, without limitation, with respect to:
(i) matters concerning the documentation and registration in the International Registry of international interest(s) or prospective international interest(s) which are, or may be, vested in Lessor, Owner or any Financing Party under this Lease or any other Operative Documents and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(ii) matters concerning sales and prospective sales which are required or permitted by this Lease or the other Operative Documents, including with respect to documentation and registration in the International Registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;

	  	44	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

(iii) matters concerning any assignment of associated rights or prospective assignment of associated rights which is required or permitted or constituted by this Lease or any other Operative Document, the documentation and registration thereof in the international registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iv) delivery and recording with the Register of an irrevocable de-registration and export request authorisation substantially in the form annexed to the Protocol, which may be exercised only after the occurrence and during the continuance of an Event of Default: and
(v) subject to the preceding and the following provisions of this Section 17.6, including or excluding in writing the application of any provisions of the Cape Town Convention and/or the Protocol that Lessor (for itself or acting for an on behalf of Owner or any Financing Party), acting reasonably may deem advisable in connection with the foregoing.
(b) In addition to the remedies set forth in this Lease or as may otherwise be available to Lessor, Owner or any Financing Party under any other Operative Documents, at law or in equity, upon the occurrence and during the continuation of an Event of Default, Lessor and/or Owner may, but shall not be obligated to, exercise any remedy available to it under the Cape Town Convention and/or the Protocol (subject, in each case to the requirements and limitations of the Cape Town Convention and the Protocol and to the requirements and limitations imposed by the State of Registration in relation to the Cape Town Convention and Protocol), including:
(i) the remedies set forth in Articles 8, 9 and 34 of the Cape Town Convention and Article IX(1) of the Protocol;
(ii) relief pending final determination under Article 13 of the Cape Town Convention and Article X of the Protocol (including sale of the Aircraft and application of proceeds therefrom, but excluding the application of Article 13(2) of the Cape Town Convention); and
(iii) the procurement of the de-registration of the Aircraft and the export and physical transfer of the Aircraft or any Engine from the territory in which it is situated pursuant to Article IX of the Protocol, but excluding, solely to the extent permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention with regard to default remedies without prejudice to Article IX(1) of the Protocol, provided that such exclusion shall not be applicable (to the extent permitted by Article 15 of the Cape Town Convention) to the extent such default remedies are exercised outside the territorial limits of the State of Registration and in a manner not involving the courts of the State of Registration or of its territorial units; and ( y ) where a remedy is available to it under the Cape Town Convention or the Protocol and also under this Agreement and the other Operative Documents or other applicable law, to the extent permitted by the Cape Town Convention and the Protocol and other applicable law, and subject to the provisions of the previous clause ( x ), Lessor (for itself and for and on behalf of Owner and any Financing Party) may elect under which of the foregoing it shall exercise such remedy.

	  	45	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

(c) Without limiting the generality of the foregoing or any other provisions of the Operative Documents, Lessee hereby (i) agrees (without prejudice to its rights under Section 10.2) to exclude the application of Article XVI(1)(a) of the Protocol; and (ii) consents, pursuant to Article XV of the Protocol, to any assignment of associated rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the Operative Documents and further agrees that the provisions of this Section 17.6, shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such assignment of associated rights.
(d) In this Section 17.6 the following terms have the meanings given in the Cape Town Convention and the Protocol: international interest, prospective international interest, international registry, assignment of associated rights, prospective assignment of associated rights, registered, sale and prospective sale and proceeds .
17.7. Permitted Liens. Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to this Lease, any Item of Equipment, title thereto or any interest therein, except (i) the respective rights of Owner, Lessor and Lessee as herein provided; (ii) Lessor’s Liens; (iii) Liens for Taxes not yet due or being contested in good faith by appropriate proceedings so long as adequate reserves are maintained with respect to such Taxes in accordance with GAAP; (iv) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee); and (v) Liens for airport, navigation, and en-route charges arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee). Lessee shall not be permitted to contest any Lien if such contest gives rise to any reasonable likelihood of the sale, forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment or any interest therein in the course of any such proceedings, or as a result of any such Lien or the respective interests of Lessor, Owner or any Financing Party will be similarly adversely affected. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to any Item of Equipment.

	  	46	  	ARTICLE 17
REGISTRATION; PERFECTION
OF OWNER’S TITLE; LIENS	

18.	GENERAL INDEMNITY	
18.1. Scope. Lessee agrees to indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee from and against any and all Claims which in any way may result from, pertain to or arise out of, or are in any manner related to:
(a) the Aircraft, this Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or
(b) the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or
(c) any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or
(d) any failure of Lessee to provide or maintain the Aircraft Documents in accordance with the relevant provisions of this Lease or any other Operative Document during the Lease Term; or
(e) any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or
(f) any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or
(g) any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof; or
(h) any transaction, approval, or document contemplated by this Lease or any other Operative Document or given or entered into in connection herewith or therewith.
Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be subrogated to all rights and remedies which such indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall give prompt written notice thereof to Lessee or such Indemnitee, as the case may be, but failure to give such notice shall not relieve Lessee of its obligations hereunder, except to the extent such failure precludes or restricts Lessee from contesting or otherwise defending any such Claim and except for any liability or obligation of Lessee to the extent the same is increased or would not have been incurred in the absence of any such failure.
18.2. Lessee’s Release. Lessee hereby waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with

	  	47	  	ARTICLE 18
GENERAL INDEMNITY	

injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such defect may be discovered, whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee, and regardless of the location of the Aircraft or any Item of Equipment at any such time.
18.3. Repayment. If an Indemnitee shall obtain a repayment of any amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default, promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
18.4. Payment. Subject to the provisions of Section 18.3 hereof, Lessee shall pay directly to each Indemnitee all amounts due under this Article 18 within ten (10) days of the receipt of written notice by Lessee from such Indemnitee that such payment is due, together with reasonable detail supporting Lessee’s obligations in respect of the relevant Claim(s) and the amount(s) thereof.
18.5. Exclusion. Notwithstanding the foregoing provisions of this Article 18, Lessee shall not be obligated to make any payment to an Indemnitee by way of indemnity in respect of any Claim against such Indemnitee, to the extent that such Claim results from or arises out of:
(a) the gross negligence or willful misconduct of such Indemnitee;
(b) any Lessor’s Lien, except to the extent any such Claim results from or arises out of (and in which case such Claim shall not be excluded from Lessee’s indemnity Obligations under this Article 18):
(i) the premature termination of any funding or other financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft following the occurrence and continuation of an Event of Default; or
(ii) any indemnity payment payable by an Indemnitee to another Person under any financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft and for which Lessee has expressly agreed to provide an indemnity pursuant to Section 18.1;
(c) any Taxes;
(d) acts or events which occur (i) before Delivery (except with respect to any Claims arising from or related to Lessee’s acts or omissions in connection with its activities under and pursuant to, among other things, the Participation Agreement) or (ii) after the Termination Date (except if such Claims arise as a result of an act or omission of Lessee which occurred during the Lease Term and are not attributable to any act or omission of an Indemnitee);
(e) ordinary and usual operating or overhead expenses of any Indemnitee, other than as arising as a result of and during the continuance of an Event of Default;

	  	48	  	ARTICLE 18
GENERAL INDEMNITY	

(f) in respect of an Indemnitee, a breach by such Indemnitee of any express covenant given to Lessee; or
(g) the sale, transfer, assignment or other disposition by an Indemnitee of any of its right, title and interest in and to the Aircraft or the Lease, except as a result of the occurrence and continuation of an Event of Default.
18.6. After-Tax Nature of Indemnity. Each indemnity payable pursuant to this Article 18 shall be paid on an After-Tax Basis.
18.7. Contest. Lessee shall be entitled, at its sole cost and expense, acting through counsel acceptable to the respective Indemnitee, (a) in any judicial or administrative proceeding that involves solely a claim for one or more Claims, to assume responsibility for and control thereof, (b) in any judicial or administrative proceeding involving a claim for one or more Claims and other claims related or unrelated to the transactions contemplated by this Lease, to assume responsibility for and control of such Claim or Claims to the extent that the same may be and are severed from such other claims (and each of Lessee and such Indemnitee shall use its commercially reasonable efforts to obtain such severance), and (c) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (i) while a Default or an Event of Default shall have occurred and be continuing, (ii) if such proceedings will involve any reasonable possibility of the sale, forfeiture or loss of, or the creation of any Lien (other than a Lessor’s Lien) on, the Aircraft, any Item of Equipment, this Lease, any other Operative Documents, or any part of the foregoing, (iii) if such Claims relate in any way to the business of any Indemnitee other than the transactions contemplated by this Lease or any of the other Operative Documents, (iv) if such Claims, in the opinion of independent counsel for such Indemnitee reasonably satisfactory to Lessee, have a reasonable possibility of otherwise compromising or jeopardizing any substantial interests of such Indemnitee, or (v) if Lessee shall not have furnished such Indemnitee with an opinion of independent counsel reasonably satisfactory to such Indemnitee to the effect that there exists a meritorious basis for contesting such Claims. The Indemnitee may participate with its own counsel, at its own expense, in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. Lessee shall not without the prior written consent of the relevant Indemnitee enter into a settlement or other compromise with respect to any Claims that may result in admission or culpability on the part of any Indemnitee, otherwise subject any Indemnitee to any civil or criminal penalty or other prejudice any Indemnitee or the Aircraft. If for any reason Lessee shall not be responsible for and be in control of any contest contemplated in this Section 18.7, Lessee may, so long as no Default or Event of Default shall have occurred and be continuing, nonetheless participate in any such contest, at its sole cost and expense, in a manner reasonably acceptable to the relevant Indemnitee. The Indemnitee shall supply Lessee with such information reasonably requested by Lessee (and to the extent that it is commercially reasonable for the Indemnitee to do so) as is necessary or advisable for Lessee to assume responsibility for and control or participate in any proceeding to the extent permitted by this Section 18.7. As long as no Default or Event of Default has occurred and is continuing, such Indemnitee shall not enter into a settlement or other compromise with respect to any Claims without the prior written consent of Lessee, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified with respect to such Claims under this Section 18.7. Notwithstanding this Section 18.7, no Indemnitee shall be prevented from settling or paying any Claim immediately if required by Law to do so nor from assuming control of and terminating Lessee’s participation in any contest of a Claim if, in such Indemnitee’s judgment, the interest of any Indemnitee may be adversely affected or prejudiced by any delay, act, omission or continued contest by Lessee of such Claim.

	  	49	  	ARTICLE 18
GENERAL INDEMNITY	

18.8. Survival . The indemnities contained in this Article 18 shall continue in full force and effect notwithstanding the occurrence of the Termination Date,, and are expressly made for the benefit of and shall be enforceable by each Indemnitee.

	  	50	  	ARTICLE 18
GENERAL INDEMNITY	

19.	INSURANCE	
19.1. Obligation to Insure. Lessee shall, for the Lease Term, maintain in full force and effect, at its own cost and expense, the Insurances. Lessor is not under any duty or obligation to verify the existence or adequacy of the Insurances.
19.2. Liability Insurance. Lessee shall maintain in effect comprehensive third party aircraft liability insurance against bodily injury and property damage losses arising from ground, flight and taxiing exposures, including, but not limited to, passenger legal liability, cargo liability and products liability insurance in the amount set forth in Appendix 2B, Section 4.1 and in the aggregate with respect to products liability, or such higher amount as Lessee may maintain from time to time on similar aircraft, for any one accident, or series of accidents arising out of any one event, with respect to the Aircraft and Items of Equipment. Such policy shall include war and allied risks in accordance with standard market practice (currently “ The Extended Coverage Endorsement-AVN 52E ” ) plus such excess coverage through government indemnity or commercial insurance up to the full limit required herein. Any such liability insurance policy shall not be subject to any deductible amount except with respect to baggage, cargo liability, and hangar keeper’s liability coverage, for which there may not be a deductible in an amount exceeding ***** or such higher amount as may constitute general industry practice and be approved by Lessor in writing from time to time. All Insurances shall:
(a) name the Additional Insureds as additional insureds;
(b) be primary without right of contribution from any other insurance which is carried by any Additional Insureds with respect to the Aircraft or any Engine when not installed on the Aircraft; and
(c) each liability policy shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
19.3. Contractual Liability; Tail Coverage for Liability Insurance. The Insurances referred to in Section 19.2 shall:
(a) include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 18;
(b) for a period of two (2) years after the Termination Date, at Lessee’s cost and expense, continue to name each Indemnitee as additional insureds; and
(c) should Lessor and/or Owner transfer their interests in the Aircraft and this Lease pursuant to and in accordance with the provisions of Article 25, for a period of two (2) years from the effective date of such transfer continue to name as additional insured(s) the transferring Lessor and the relevant transferring Owner and Financing Parties and other related Indemnitees).
19.4. Insurance Against Loss or Damage to the Items of Equipment.
(a) Lessee shall maintain in effect with respect to the loss or damage to the Items of Equipment:
(i) all-risk ground, flight and ingestion aircraft hull insurance for the Agreed Value set forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine Agreed
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	51	  	ARTICLE 19
INSURANCE	

Value set forth in Appendix 2B, Section 4.3 covering each Engine when not installed on the Airframe and all risk insurance on a full replacement cost basis with respect to the Landing Gear, APU and Parts while not installed on or in the Aircraft, and
(ii) war risk insurance including, but not limited to, war, acts of terrorism, hijacking, confiscation, including confiscation by the Government of Registry, expropriation, nationalisation, seizure and where generally procured by carriers similarly situated with Lessee, further including coverage for electromagnetic, chemical and biological risks as the same is available on the standard commercial aviation insurance markets upon commercially reasonably terms.
(b) All such insurance shall be payable in Dollars in the United States and shall be, with respect to the Aircraft and each Engine, on an “agreed value” basis. Any hull insurance carried in accordance with this Section 19.4 shall not contain any provision for self-insured amounts or a deductible that exceeds the deductible amount appearing in Appendix 2B, Section 4.4. Any policies carried in accordance with this Section 19.4 shall designate Owner as owner and Owner, or its nominee, as sole loss payee for an amount equal to the Agreed Value, on behalf of the Additional Insureds as their respective interests may appear, and Lessor as lessor of the Aircraft covered thereby.
(c) Installation of Other Engines on the Aircraft. If Lessee installs an engine not owned by Owner on the Aircraft, either ( x ) Lessee’s hull insurance on the Aircraft must automatically increase to such higher amount as is necessary in order to satisfy the requirement of this Section 19.4 that Owner receive the Agreed Value in the event of an Event of Loss and the amount required by the third party engine owner or ( y ) separate additional insurance on such engine will attach in order to satisfy separately the requirements of Lessee to such third party engine owner.
(d) Installation of Engines on other Airframes. If Lessee installs or permits the installation of an Engine on an airframe that is not the Airframe, either ( x ) the hull insurance maintained on such airframe must automatically increase by an amount equal to the Engine Agreed Value so that Owner receives the Engine Agreed Value in the event of an Event of Loss with respect to such Engine while installed on such airframe, or ( y ) separate additional insurance on such Engine will attach in order to satisfy separately the requirements of Lessee with respect to such Engine.
(e) Additional Lessee Coverage. Lessee may obtain additional hull insurance on the Aircraft, over and above the Agreed Value hereunder, provided that it does not adversely affect the coverage required to be maintained hereunder.
19.5. Reinsurance. If any of the risks required to be insured under this Article 19 are not placed in the manner required, then such risks shall be reinsured and shall:
(a) be on the same terms as the primary insurance required hereunder;
(b) be at levels of not ***** of insurances required to be maintained under this Article 19;
(c) contain a “cut through” clause providing that, in the event of any claim arising under such reinsurance, the reinsurer shall (in lieu of payment to the primary insurer or its successors) pay to the relevant Indemnitee and/or loss payee, as applicable, that portion of any claim which the reinsurer would otherwise be liable to pay the primary insurer or its successors;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	52	  	ARTICLE 19
INSURANCE	

(d) provide for payment to be made directly to the relevant Indemnitee notwithstanding ( x ) any bankruptcy, insolvency, examinership, liquidation, administration, receivership, dissolution or other similar proceeding with respect to the primary insurer and/or ( y ) that the primary insurer has made no payment under the primary policies; and
(e) be evidenced by a reinsurance certificate and supported by a broker’s letter of undertaking reasonably satisfactory to Lessor.
19.6. Requirements for All Insurances. All Insurances shall:
(a) be maintained in effect with insurers reasonably acceptable to Lessor, and, if applicable, reinsurers reasonably acceptable to Lessor, of recognised responsibility, specialising and normally participating in the international aviation insurance market and carrying and maintaining an A.M. Best rating of not less than A-, Class VII;
(b) provide that in respect of the interests of the Additional Insureds such policies of insurance shall insure the Additional Insureds regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by Lessee or any other Person;
(c) provide that the Additional Insureds shall have no responsibility for any premiums, assessments, warranties or representations in connection with such insurance;
(d) include the geographic limits of all territories over which the Aircraft and any Engine will be operated;
(e) waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against the Additional Insureds and their respective successors, assigns, agents, officers, employees and servants, other than set-off for unpaid premiums in respect of the Aircraft; and
(f) provide that if the insurers cancel such insurance for any reason whatever, or the same is allowed to lapse for nonpayment of premium, or if there is any material change in policy terms and conditions, such cancellation, lapse or change shall not be effective until thirty (30) days after receipt by Lessee’s designated broker of written notice from such insurers of such cancellation, lapse or change (ten (10) days for nonpayment of premium and seven (7) days for cancellation with respect to war risk and allied perils insurance or such shorter period as shall be customary on the London market for such insurance in such area of the world). Lessee shall cause such designated broker to immediately notify the Additional Insureds of any such notice of cancellation or termination.
19.7. Reports. Lessee shall cause its brokers to advise Lessor in writing promptly of any default in the payment of any premium. On or before the Delivery Date, and thereafter on or prior to each renewal or replacement by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more original certificates of insurance or reinsurance and a broker’s letter of undertaking, each executed and delivered by an insurance broker appointed by Lessee, and, if applicable, a certified English translation thereof, reasonably satisfactory to Lessor, which shall describe in reasonable detail the insurance carried on the Aircraft. Lessee will cause its insurance brokers to identify to Lessor the insurers and reinsurers and shall advise Lessor in writing at least thirty (30) days

	  	53	  	ARTICLE 19
INSURANCE	

(seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage and ten (10) days for reason of non-payment of premiums) prior to the cancellation by the underwriters of any such insurance or as soon as possible in respect of “non-renewal” or automatic termination for war risk insurance required hereunder. On or prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with faxed or other electronic confirmation from Lessee’s insurance brokers certifying that renewal certificates of insurance evidencing the renewal or replacement of such insurance pursuant to the provisions of this Article 19 will be issued effective as of the termination date of the prior certificate of insurance coverage. Within fifteen (15) days after such renewal, Lessee will furnish to Lessor an original or electronic certificate of such insurance coverage from such insurance broker.
19.8. Assignee of Lessor’s and/or Owner’s Interests. If Lessor, Owner and/or any Financing Party assigns, in accordance with the provisions of Article 25, all or any of its rights or otherwise disposes of any interest in the Aircraft or this Lease to any other Person, Lessee shall, upon request, procure that such Person shall ( x ) be named as loss payee in substitution for Lessor, Owner and/or such Financing Party, as applicable and/or as additional insured in the policies effected hereunder and ( y ) enjoy the same rights and insurance enjoyed by Lessor, Owner and such Financing Party, as applicable, under such policies from and after the effective date of such assignment or disposition.
19.9. Failure to Insure. If at any time the Insurances are not maintained by Lessee in compliance with this Article 19, Lessor, Owner and any Financing Party shall be entitled but not bound to do any of the following (without prejudice to any of the rights which any of them may have under the Operative Documents by reason of such failure):
(a) upon giving notice thereof to Lessee, to pay any premiums due or to effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor or, if applicable, any Financing Party considers appropriate (and Lessee shall upon demand reimburse Lessor or if applicable, the relevant Financing Party in full for any amount so expended in that connection); and/or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), subject to the Aircraft being adequately insured, proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.
19.10. Lessor’s Right to Insure. Lessee acknowledges that each of Lessor, Owner and each Financing Party has an insurable interest in the Aircraft and each Item of Equipment and may, at its own expense, obtain insurance or contingent insurance in its own name with respect to such insurable interest. Lessee shall provide to Lessor, Owner and each Financing Party all reasonable assistance as from time to time requested by it in order to adequately protect such insurable interest. Neither Lessor, Owner nor any Financing Party shall maintain any such insurance that would prejudice the insurance maintained by Lessee pursuant to this Lease. Lessee shall have no right to any proceeds of any insurance policies maintained by Lessor.
19.11. Changes to Insurance Practice. If there is a material change in the generally accepted industry-wide practice with regard to the insurance of aircraft by air carriers operating similar aircraft on routes similar to Lessee or any material change with respect to the insurance of aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of Insurances required to be effected under this Article 19) such that Lessor shall, after consultation with Lessee and Lessee’s designated reinsurance or insurance brokers, be of the reasonable opinion that the Insurances required pursuant to this Article 19 are insufficient to protect the respective

	  	54	  	ARTICLE 19
INSURANCE	

interests of Lessor and the other Indemnitees (bearing in mind the nature and route of operation of the Aircraft), the insurance requirements set forth in this Article 19 shall be amended, as soon as reasonably practicable following notice by Lessor to Lessee, so as to include such additional or varied requirements as may be reasonably necessary to ensure that the insurance as so varied shall provide comparable protection to Lessor and the other Indemnitees to that which it would have done if such change had not occurred. In such circumstances, Lessor will consult in good faith with Lessee in relation to any proposed change.
19.12. AVN 67B. Notwithstanding anything to the contrary contained in this Article 19, Lessor shall accept the terms of AVN 67B or AVN67C (“ Airline Finance/Lease Contract Endorsement ”) where such endorsement is contrary to the terms of this Lease as long as such endorsement is customary in the major international insurance markets for commercial passenger airlines.

	  	55	  	ARTICLE 19
INSURANCE	

20. LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT
20.1. Risk of Loss and Damage. Following Delivery, Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and each Item of Equipment and of any other occurrence which shall deprive Lessee of the Aircraft or any Item of Equipment for the time being of the use, possession or enjoyment thereof including, without limitation, any resulting loss in value of the Aircraft or any Item of Equipment due to any of the aforementioned circumstances (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
20.2. Notification of Loss and Damage.
(a) Lessee shall give Lessor written notice of and information regarding any Event of Loss as promptly as possible, and in any event within two (2) Business Days of the occurrence of such Event of Loss.
(b) Each of Lessee and Lessor shall supply to the other all necessary information, documentation and assistance which may reasonably be required in connection with making any claim under the Insurances.
20.3. Event of Loss – Aircraft/Airframe. If an Event of Loss occurs in respect of the Airframe (with or without the Engines), Lessee shall pay, or procure that the insurer pays, to Owner (or to any Financing Party named as loss payee under the Insurances) as soon as reasonably practicable but in any event within sixty (60) days after the Event of Loss Date or, if earlier, the date such insurance proceeds are received, the Agreed Value as at the Event of Loss Date (or such earlier date, as the case may be) together with all Rent and other amounts then due and payable under Operative Documents.
(a) The Net Event of Loss Proceeds received by Owner (or such other person as may be designated as loss payee) from Lessee or the insurer pursuant to this Article 20 shall be applied as follows:
(i) first, in discharge of the Agreed Value;
(ii) second, in discharge of any unpaid Rent and any other amounts (other than the Agreed Value) due and payable by Lessee under the Operative Documents and any Related Lease but unpaid; and
(iii) third, payment of the balance, if any, to Lessee.
(b) Lessee shall continue to pay Basic Rent on the days and in the amounts required under this Lease notwithstanding any such Event of Loss provided that no further installments of Basic Rent shall become due after the date on which all sums due under this Section 20.3 shall have been paid in full, and on such date the Lease Term shall terminate and Owner shall, at Lessee’s cost and subject to the rights (if any) of the insurer cause title to the Aircraft (and to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the case may be) on a quitclaim basis, without warranty or recourse, except that the same shall be free and clear of all rights of Lessor and Owner and Lessor’s Liens without representation, recourse to or warranty by Lessor, Owner or any Financing Party and, provided no Default or Event of Default has occurred and is continuing or upon a complete cure thereof, Lessor shall thereafter return the Security Deposit to Lessee in accordance with Section 4.5 and shall return ***** of the remaining balance of the Maintenance Reserves to Lessee, with Lessor to retain ***** of the remaining balance of the Maintenance Reserves.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	56	  	ARTICLE 20
LOSS AND DAMAGE	

20.4. Event of Loss – Engine or APU. Upon the occurrence of an Event of Loss with respect to an Engine or APU, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft or Airframe, Lessee shall forthwith, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days after the Event of Loss Date, convey to Owner, free and clear of all Liens, title to another engine or, as applicable, auxiliary power unit of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Engine. The replacement engine shall have a value and utility at least equal to, and be in as good operating condition as, the Engine with respect to which such Event of Loss shall have occurred, based on but not limited to (i) Cycles accumulated on each Engine Life Limited Part, (ii) Flight Hours accumulated since new (and accumulated since completion of the most recent heavy maintenance shop visit that completed a workscope at least equivalent to that of an Engine Restoration if an Engine Restoration had previously been accomplished on the Engine that suffered such Event of Loss), and (iii) Flight Hours and Cycles accumulated since new (and accumulated since the most recent restoration or refurbishment of each engine module with respect to any module for which a restoration or refurbishment had previously been accomplished on the Engine that suffered such Event of Loss), assuming such Engine was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Replacement APU. The replacement auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the APU with respect to which such Event of Loss shall have occurred, based on but not limited to (i) APU Hours (and APU Cycles if applicable) accumulated since new with respect to each APU Life Limited Part (as applicable) and (ii) APU Hours accumulated since new (and since the most recent Overhaul for each auxiliary power unit module if an Overhaul had previously been accomplished on the APU that suffered such Event of Loss), assuming such APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessor Inspection. Lessee shall identify to Lessor a candidate replacement engine or auxiliary power unit (as applicable) and Lessor may inspect such candidate replacement engine or auxiliary power unit, which shall include, at Lessor’s option, (i) a full borescope inspection of the compressor, turbine and combustion sections of the replacement engine or auxiliary power unit and (ii) a records inspection, and the results of each such inspection must be satisfactory to Lessor.
(d) Replacement Subject to Lease. Upon acceptance by Lessor, such replacement engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or, as applicable, an “APU”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement Engine or APU shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Engine or APU replaced thereby.

	  	57	  	ARTICLE 20
LOSS AND DAMAGE	

20.5. Event of Loss – Landing Gear.
(a) Upon the occurrence of an Event of Loss with respect to a Landing Gear, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft or the Airframe, Lessee shall forthwith replace such Landing Gear as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days from the Event of Loss Date, by duly conveying to Owner, free and clear of all Liens, title to another landing gear of the same or an improved model and suitable for installation and use on the Airframe.
(b) The replacement landing gear shall have a value and utility at least equal to, and be in as good operating condition as, the Landing Gear with respect to which such Event of Loss shall have occurred, based on but not limited to (i) the maximum weight certified for such landing gear; (ii) Flight Hours, Cycles and calendar time accumulated since new with respect to each Landing Gear Life Limited Part (as applicable), and (iii) Flight Hours, Cycles and calendar time accumulated since new (and accumulated since Overhaul if an Overhaul had previously been accomplished on the Landing Gear that suffered such Event of Loss), assuming such Landing Gear was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessee shall identify to Lessor a candidate replacement landing gear and Lessor may inspect such replacement landing gear, which shall include, at Lessor’s option, a records inspection, and the results of such inspection must be satisfactory to Lessor.
(d) Upon acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing Gear”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement landing gear shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Landing Gear replaced thereby.
20.6. Repairable Damage.
(a) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, subject to no Event of Default having occurred and continuing, all insurance proceeds which may be paid or payable by the insurers of the Aircraft shall, subject to (A) a repair estimate acceptable to Lessor, (B) evidence of completion of such repair by an Approved Maintenance Organisation, provided such evidence and the Approved Maintenance Organisation are acceptable to Lessor and (C) receipt (x)  by Lessor of a true and correct copy of the adjuster’s claim report, and ( y ) by Lessee and the insurers of Lessor’s prior written approval for the release of such proceeds, be paid to:
(i) Lessee in respect of all loss or damage Lessee has made good (or caused to be made good), or
(ii) the repairer for the cost of the completed repair works, or
(iii) to the vendor of any new or replacement Item of Equipment for the cost of such new or replacement Item of Equipment;

	  	58	  	ARTICLE 20
LOSS AND DAMAGE	

provided that Lessee shall have furnished to Lessor evidence satisfactory to Lessor, that the repairs have been fully completed and that all invoices in relation thereto have been paid and all such repairs have been performed in accordance with the terms of this Lease. Any such insurance proceeds payable following the occurrence and during the continuation of an Event of Default (or not otherwise applied in the manner described above) shall be applied in such manner as Lessor may direct, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
(b) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, if such insurance proceeds paid in respect thereof are insufficient to pay the cost or estimated cost of making good or repairing such damage or the cost of purchasing a replacement engine, auxiliary power unit, landing gear or part if the same is beyond economic repair, Lessee will pay the deficiency.
20.7. Documents Loss. Upon the occurrence of a Documents Loss under circumstances in which there has not occurred an Event of Loss with respect to an Item of Equipment for which such Lost Documents relate, Lessee shall within thirty (30) days from the date of such loss notify Lessor in writing and thereafter replace such Lost Documents (such replacement documents hereinafter “ Reconstructed Documents ”) by:
(a) obtaining copies of such Lost Documents from the Approved Maintenance Organisation that accomplished the maintenance covered by the respective Lost Documents, each such copy to be certified by the Quality Assurance Department of the respective Approved Maintenance Organisation as to being a true copy of the respective Lost Document, or
(b) the re-accomplishment of Overhauls and Tasks specified in such Lost Documents as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) sixty (60) days following the Documents Loss, ( y ) the Scheduled Termination Date, and ( z ) the Termination Date. The Reconstructed Documents shall comply with all requirements for Required Approvals with respect to the Item of Equipment to which such Lost Documents relate and shall be sufficient to document the then current maintenance status of the affected Items of Equipment. Lessor shall be entitled to inspect the Reconstructed Documents and the results of each such inspection must be satisfactory to Lessor, acting reasonably. Upon acceptance by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined herein for all purposes hereunder.
20.8. Application of Payments from Governmental Authorities. Payments received by Lessor, Owner or Lessee from any Governmental Authority or entity with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft or the Airframe, shall be retained by Lessor or Owner, if received by Lessor or Owner, or promptly paid over to Lessor, if received by Lessee, up to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due to Lessor or Owner hereunder or under any other Operative Documents or any Related Lease). At such time as Lessor or Owner has received such amounts in full, Lessor shall promptly remit (or cause Owner to promptly remit) the excess, if any, of such payments to Lessee. Payments received by Lessor, Owner or Lessee from any Governmental Authority or entity with respect to an Event of Loss resulting solely from the condemnation, confiscation or seizure of, or requisition of title to or use of any Engine shall be paid over to, or retained by, Lessee, provided that Lessee shall have fully performed its obligations under this Article 20 with respect to such Engine. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to a requisition of use during the Lease Term of the Aircraft, the Airframe or any of the Engines, which requisition does not constitute an Event of Loss, shall, so long as no Default or Event of Default has occurred and is continuing, be paid to, or retained by, Lessee, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.

	  	59	  	ARTICLE 20
LOSS AND DAMAGE	

20.9. No Lessor Liability to Repair or Replace Following Delivery. Lessor will not be liable for any expense in repairing or replacing any Item of Equipment or be liable to supply another aircraft or any item of equipment in lieu of the Aircraft or any Item of Equipment if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use or required to produce or provide Reconstructed Documents (as such term is defined in this Article 20).

	  	60	  	ARTICLE 20
LOSS AND DAMAGE	

21.	TAXES; TAX INDEMNITY	
21.1. Indemnity .
(a) Indemnity . Except as provided in Section 21.1(b), Lessee shall pay, and shall indemnify and hold harmless each Indemnitee for and against, all Taxes arising or resulting from or otherwise relating to any Item of Equipment, any Operative Document, or any of the transactions and activities provided for or contemplated in, or permitted by, the Operative Documents, including without limitation, the purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration, possession, use, operation, landing, take-off, storage, location, presence, maintenance, alteration, modification, improvement, servicing, repair, overhaul, pooling, interchange, exchange, substitution, replacement, loss, return, sale or other disposition of, or any damage, addition or transfer of title to, any Item of Equipment or any interest therein, the execution, delivery, filing, registration, recording, presence, performance of, payment under or enforcement of, or the cure of any default or the exercise of any remedy under, any Operative Document or any other documents executed from time to time pursuant to any Operative Document (regardless of how or when such Taxes are imposed or assessed, whether imposed on or assessed against any Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest therein or any use thereof, or otherwise) and all costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements) paid or incurred by any Indemnitee with respect to any Tax for which Lessee is required to indemnify such Indemnitee pursuant to this Article 21 (an “ Indemnified Tax ”) or in connection with the enforcement of this Article 21.
(b) Excluded Taxes . Lessee shall have no obligation under Section 21.1(a) to indemnify an Indemnitee for the following Taxes (each a “ Non-Indemnified Tax ”):
(i) any Tax imposed on or measured by the total net income, receipts, capital, net worth, franchise of, or conduct of business by, such Indemnitee except to the extent that such Tax would not have been payable in the absence of (A) the registration, use, presence or other connection of any Item of Equipment in or with, or any act or omission of Lessee or any Affiliate, agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the inaccuracy or breach of any of the representations, warranties, covenants or agreements of Lessee in the Operative Documents, or (C) an Event of Default, provided that the exclusion in this clause (i) shall not apply to any Tax that is, or is in the nature of, a sales, use, rental, value added, goods and services, consumption, service, transaction privilege, stamp, documentary, transfer, license, excise or property Tax;
(ii) any Tax imposed on or with respect to any sale or other transfer by such Indemnitee of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2, provided that the exclusion in this clause (ii) shall not apply to any sale or transfer that occurs (A) in connection with or as a result of a Default, an Event of Default, an Event of Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of any Item of Equipment, or (B) at Lessee’s request, or (C) pursuant to a requirement in any Operative Document or any applicable Law; or
(iii) any Tax to the extent such Tax is caused by, and would not have been incurred but for, any activities of an Indemnitee in the jurisdiction imposing such Tax

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that are unrelated to any Indemnitee’s dealings with Lessee or any Affiliate of Lessee, unrelated to the transactions contemplated in the Operative Documents, unrelated to any Related Lease, and unrelated to use of the Aircraft (or any aircraft subject to a Related Lease) or any part thereof by Lessee or any Affiliate of Lessee or any agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any such Aircraft (or any such aircraft) or any part thereof;
(iv)(i) any Tax to the extent imposed with respect to any event or period occurring before the date of this Agreement, except that the exclusion in this subclause (iv)(A) shall not apply to any such Tax which arises from any act or omission of Lessee or any Affiliate of Lessee or any director, officer, employee, agent or representative of Lessee or any Affiliate of Lessee;
(A) any Tax to the extent imposed with respect to any act or event or period of time occurring after the Aircraft has been returned by Lessee to Lessor in full compliance with Article 22 and is no longer subject to this Lease, provided that the exclusion in this subclause (iv)(B) shall not apply to any Tax that (1) relates to any act or event occurring or matter arising prior to or concurrently with the return of the Aircraft or (2) arises from or in connection with (x) an Event of Default or (y) any payment by or on account of any obligation of Lessee under the Operative Documents to which it is a party; or
(B) the performance of any other obligation of Lessee under the Operative Documents to which it is a party;
(v) any penalty, fine, addition to tax or interest imposed on such Indemnitee to the extent that such penalty, fine, addition to tax or interest is caused by, and would not have been payable but for:
(A) the failure by such Indemnitee to file any Tax return which such Indemnitee is required by applicable Law to file with respect to any Indemnified Tax before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax return, or
(B) the failure by such Indemnitee to pay any Tax which such Indemnitee is required by applicable Law to pay before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax payment,
unless (in each case) such failure is a result of:
(U) a failure by Lessee to provide as soon as reasonably practicable (and in any event within 60 days) after receipt of such Indemnitee’s request therefor, any information or documents that are reasonably requested by such Indemnitee and are in the possession or reasonable control of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or
(V) the willful misconduct or gross negligence of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or

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(W) failure by Lessee to perform any of its obligations under this Lease, or
(X) an Event of Default, or
(Y) any circumstances beyond such Indemnitee’s reasonable control in any jurisdiction (other than the jurisdiction under the Laws of which such Indemnitee is incorporated or otherwise created and any jurisdiction in which an office or other fixed place of business of such Indemnitee is located) in which (1) any Item of Equipment is registered or used and (2) such Tax return is required to be filed or such Tax payment is required to be paid, or
(Z) any combination of the foregoing;
(vi) any Tax to the extent that such Tax would not have been payable but for a breach by such Indemnitee of any obligation of such Indemnitee under Section 21.3 or 21.4 hereof;
(vii) any Tax imposed on an Indemnitee to the extent such Tax is caused directly by, and would not have been incurred but for (A) the gross negligence or willful misconduct of any Indemnitee or (B) the inaccuracy or breach of any representation, warranty, covenant or agreement of such Indemnitee in this Lease or (C) the existence or enforcement of a Lessor’s Lien:
(viii) in the case of a Person that becomes the Lessor after the Delivery Date by acquiring its interest in the Aircraft and the Lease by sale, assignment or other transfer from a prior Lessor pursuant to Section 25.2, Taxes if and to the extent that the aggregate amount of such Taxes exceeds the aggregate amount of Taxes that would have been imposed on or payable by the transferor Lessor and for which Lessee would have been required to indemnify the transferor Lessor pursuant to this Article 21, determined under applicable Laws in effect on the effective date of the transfer by the transferor Lessor to the transferee Lessor (the “Transfer Date”) (or enacted prior to the Transfer Date and effective from and after the first anniversary of the Transfer Date if as of the Transfer Date the effect of such Laws on Lessee can be reasonably determined), provided that the exclusion in this clause (viii) shall not apply to a transferee Lessor that acquires its interest in the Aircraft pursuant to a transfer that occurs (A) in connection with or as a result of an Event of Default or (B) at Lessee’s request or (C) pursuant to a requirement in any Operative Document or any applicable Law and (for the avoidance of doubt) shall not apply to any Tax to the extent incurred or increased as a result of a change in any Law after the effective date of the transfer by the transferor Lessor to the transferee Lessor;
(ix) any Tax imposed on an Indemnitee to the extent that such Tax would not have been imposed but for an amendment to any Operative Document to which Lessee is not a party without the prior written consent of Lessee, unless such amendment occurs in connection with and during the continuance of an Event of Default or is required by applicable Law or is required by any Operative Document.
(c) No Reduction for Withholding . Lessee agrees that all amounts payable by Lessee (or by any other Person on account of any obligation of Lessee) pursuant to the Operative Documents

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shall be paid without any deduction or withholding on account of any Taxes, monetary transfer fees, or other charges or withholdings of any nature, except to the extent that the deduction or withholding of any Tax is required by applicable Law, in which event Lessee shall (i) pay to the Person entitled to receive such payment (the “ Payee ”) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any withholding with respect to such additional amount), an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made and (ii) deliver to Lessor within sixty (60) days after the date of such payment an official receipt of the relevant taxing authority (or, if an official receipt is not obtainable, other documentary evidence satisfactory to Lessor) showing that Lessee paid to such taxing authority the full amount of the Tax required to be deducted or withheld. If Lessee pays any additional amount to Lessor pursuant to clause (i) of the preceding sentence for any withholding Tax that is an Excluded Tax, then Lessor shall repay such additional amount to Lessee within thirty (30) days after receipt of Lessee’s written request therefor accompanied by the official receipt or other evidence of payment described in clause (ii) of the preceding sentence and a written statement describing in reasonable detail the reason that such withholding Tax is an Excluded Tax.
21.2. VAT.
(a) All amounts payable by Lessee pursuant to the Operative Documents are exclusive of VAT. Lessor and Lessee acknowledge and agree that any VAT that is required by any applicable Law to be paid with respect to any of the transactions, activities or payments contemplated in the Operative Documents is a Tax to which the provisions of this Article 21 apply.
(b) If requested by Lessor, Lessee shall deliver to Lessor on the Delivery Date and, thereafter, within thirty (30) days after receipt of Lessor’s written request made not more than annually during the Lease Term:
(i) a certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or
(ii) an Irish Revenue Form VAT 60B (or applicable successor form) with respect to this Lease,
to enable Lessor to comply with applicable Laws relating to VAT.
21.3. Lessor Tax Certificates . Prior to the first payment of Basic Rent hereunder, and thereafter as soon as reasonably practicable after receipt of Lessee’s written request therefor (but not more frequently than twice within any 12-month period):
(i) in the case of the Person that is Lessor on the date hereof, Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority confirming that Lessor is a resident of Ireland for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of Lessor as a resident of Ireland for the purposes of taxation; or
(ii) in the case of a Person that acquires its interest in this Lease and the Aircraft by transfer from a prior Lessor, such Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority of the country in which the principal place of business of such Lessor is located confirming that such Lessor is a

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resident of such country for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of such Lessor as a resident of such country for the purposes of taxation.
21.4. Withholding Tax Exemption Certificates . Each Indemnitee will deliver to Lessee, as soon as reasonably practicable after receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English) such forms, certifications, and other documents as (i) such Indemnitee is entitled under applicable Law to execute or obtain and (ii) are required by applicable Law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Lease without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable Law to withhold in the absence of such document, provided that in the case of any such document that must be executed or endorsed by any Governmental Authority or other taxing authority, the failure of such Indemnitee or Lessee to receive such document from such Governmental Authority or other taxing authority within a reasonable time shall not be deemed to be a failure to comply with this Section 21.4 so long as such Indemnitee is using commercially reasonable efforts to obtain such document, and provided, further, that no Indemnitee shall have any obligation to deliver any document requested by Lessee pursuant to this Section 21.4 if such Indemnitee determines in good faith that delivering such document would result in a risk that any Indemnitee could incur a liability, loss, cost or expense for which Lessee is not required by any Operative Document to indemnify such Indemnitee unless Lessee delivers to such Indemnitee a written undertaking to indemnify such Indemnitee on an After-Tax Basis for any such liability, loss, cost or expense in a manner reasonably satisfactory to such Indemnitee.
21.5. Tax Filings; Information .
(a) Unless otherwise directed or agreed in writing by Lessor, Lessee shall properly prepare and timely file all reports, returns, declarations and other documents (each a “ Tax Document ”) that are required by applicable Law to be filed with any Governmental Authority or other taxing authority with respect to each Indemnified Tax.
(b) Lessee shall (i) deliver to Lessor within thirty (30) days after receipt of Lessor’s written request, a certificate of an officer of Lessee, in form and substance satisfactory to Lessor, demonstrating compliance with Lessee’s covenants in Section 11.6 during the period or periods specified in Lessor’s written request, and (ii) deliver to each Indemnitee as soon as reasonably practicable (and in any event within thirty (30) days) after receipt of such Indemnitee’s written request therefor, such information and copies of such records and other documents (including, without limitation, the flight log for the Aircraft) maintained or required to be maintained by Lessee or by any other user of any Item of Equipment in the regular course of its business as such Indemnitee may request from time to time to enable such Indemnitee to comply with applicable Tax reporting, audit, audit dispute resolution, and litigation requirements, and if requested by any Indemnitee, make such information, records and other documents available for inspection by such Indemnitee or its authorised representatives.
21.6. Payment of Taxes and Indemnities .
(a) To the extent required or permitted by applicable Law, Lessee shall pay each Indemnified Tax when due directly to the proper taxing authority, unless otherwise directed or agreed in writing by Lessor.

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(b) Any indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days after the date on which Lessee receives such Indemnitee’s written demand therefor (which demand shall provide a description in reasonable detail of the applicable Indemnified Taxes and the calculation of the amount of the indemnity payment demanded).
(c) All amounts payable by Lessee pursuant to this Article 21 shall be paid on an After-Tax Basis.
21.7. Contest .
(a) If any Indemnitee receives a written claim from any taxing authority for any Indemnified Tax (a “ Tax Claim ”), such Indemnitee shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim.
(b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment of such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a refund thereof), and such Indemnitee shall not settle or compromise such Tax Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such Tax Claim without the prior written consent of Lessee (which consent shall not be unreasonably withheld), provided that such Indemnitee shall have the right to refuse to begin or continue (or to permit Lessee to begin or continue) the contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (y) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements).
(c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest:
(i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing;
(ii) contesting such Tax Claim would not, in the opinion of Lessor, result in any risk of criminal or civil penalty or any reasonable possibility of any sale forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the

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subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein;
(iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if the Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, the sum of (A) the amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency);
(iv) if such Indemnitee decides to contest such Tax Claim by paying the Indemnified Tax that is the subject of such Tax Claim and taking action to obtain a refund thereof, Lessee shall have made an interest-free advance to such Indemnitee in an amount equal to the amount of the Indemnified Tax and shall have delivered to such Indemnitee a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse Tax consequences to such Indemnitee or any of its Affiliates resulting from such interest-free advance;
(v) Lessee shall be paying, on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements);
(vi) if requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and
(vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim.
(d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “ Tax Saving ”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “ Refund ”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of:
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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 	(1)	the lesser of (x) the amount of such Tax Saving or Refund (as the case may be) minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such Refund or Tax Saving, or (y) the amount of the Indemnified Tax or indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus	
 
 	(2)	the amount of interest (if any) received by such Indemnitee on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such interest, provided that such Indemnitee shall not thereby be in a less favorable position than it would have been in if the Indemnified Tax had not been paid or incurred. A written statement of such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and interest shall be final and conclusive, except for any manifest error.	
(e) Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that are reasonably requested by Lessee and are in the possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax pursuant to this Section 21.7, provided, however, that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration or other document or information relating solely to one or more Excluded Taxes or (ii) in the case of any return, report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration or other document or information that relates to Excluded Taxes.
(f) Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Indemnitee pursuant to Section 21.1, without regard to the exclusions in Section 21.1(b) and without regard to the contest provisions of Sections 21.7(a) and 21.7(b).
21.8. Survival . The respective obligations of Lessee and Lessor under this Article 21 shall remain in full force and effect, notwithstanding the occurrence of the Termination Date.
21.9. Change in Circumstances; Mitigation . If Lessee incurs an indemnity liability under Section 21.1(a) or 21.1(c) or if it becomes reasonably foreseeable that Lessee would (but for this Section 21.9) incur an indemnity liability under Section 21.1(a) or 21.1(c), then if requested by Lessee in writing, Lessor shall consult with Lessee in good faith with a view to restructuring the transactions contemplated in this Lease so that the indemnity liability can be avoided or minimized, provided that no Indemnitee shall have any obligation to take any action pursuant to this Section 21.9 if such Indemnitee determines in good faith that taking such action may result in a material economic, legal or regulatory disadvantage to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee (as invoiced by Lessor or such other Indemnitee to Lessee and supported by evidence of such cost reasonably acceptable to Lessee), in connection with the consideration, negotiation, documentation, or closing of any restructuring requested by Lessee pursuant to this Section 21.9.

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22.	RETURN OF AIRCRAFT	
22.1. Time and Place . On the Scheduled Termination Date (or, if applicable, the Termination Date if such date is prior to the Scheduled Termination Date) and unless the Aircraft has suffered an Event of Loss, Lessee, at its own expense, shall return the Aircraft to Lessor at the Redelivery Location. Lessor and Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any exceptions thereto, by executing a Return Acceptance Certificate. Unless a Default or an Event of Default shall have occurred and be continuing or unless this Lease shall have been cancelled by Lessor pursuant to Article 24, upon such execution and delivery, this Lease shall terminate, with neither party hereto having any further liability to the other hereunder except for those Obligations which specifically survive the expiration, cancellation or termination of this Lease or as are otherwise reserved in accordance with such Return Acceptance Certificate. If an Event of Default occurs by Lessee failing to complete Return on the Scheduled Termination Date or if an Event of Default occurs prior to or after the Scheduled Termination Date and Lessor exercises its remedy to thereafter repossess the Aircraft, Lessee is nonetheless obligated to comply, and to have the Aircraft comply, with the return requirements set forth in this Article 22 on the date of actual Return or repossession by Lessor.
22.2. Condition . Upon return of the Aircraft pursuant to Section 22.1, Lessee shall comply with the requirements of Appendix 2E and shall return the Aircraft in a condition in compliance with the provisions of this Lease, including this Article 22 and Appendix 2E.
22.3. Lessee’s Continuing Obligations .
(a) If Lessee shall, for any reason whatsoever, fail to return the Aircraft in a timely manner in the condition specified in this Lease, the Obligations of Lessee shall continue and the Lease Term shall be deemed to be extended, day-to-day, until Return of the Aircraft; provided that this paragraph shall not be construed as permitting Lessee to fail to meet its Obligation to return the Aircraft in accordance with the requirements of this Lease and shall not constitute a waiver by Lessor of any Default or Event of Default arising out of such failure or prejudice the rights of Lessor under Article 24 with respect thereto.
(b) If the Aircraft is not returned to Lessor in accordance with this Lease on the Scheduled Termination Date:
(i) with effect from and including the Scheduled Termination Date, Basic Rent shall continue to be payable at the daily rate of one-thirtieth (1/30) of the Basic Rent otherwise payable hereunder; and with effect from and including the fifteenth (15 th ) day following the Scheduled Termination Date, Basic Rent shall be payable at the daily rate of one-twentieth (1/20) of the Basic Rent otherwise payable hereunder; and with effect from and including the thirtieth (30 th ) day following the Scheduled Termination Date, Basic Rent shall thereafter be payable at the daily rate of one-fifteenth (1/15) of the Basic Rent otherwise payable hereunder; and
(ii) payments in respect of Maintenance Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis, prorated on a daily basis based on a month consisting of thirty (30) days;
each of which amounts shall be paid by Lessee at the earlier to occur of each next Rent Payment Date and Return. Notwithstanding the foregoing, in the event Lessee is unable to return the Aircraft to Lessor in accordance with this Lease on the Scheduled Termination Date primarily as a result of any act or omission of Lessor or any Person lawfully claiming by or through Lessor, Lessee’s continuing Basic Rent payment obligations as set forth in sub-section (i) shall not apply.

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(c) Lessor may elect, in its sole and absolute discretion and without prejudice to its rights under this Lease, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 22 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to accomplish such correction. Any direct, documented, out-of-pocket expenses incurred by Lessor for such correction will become Supplemental Rent payable by Lessee on demand following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such corrections in reasonable detail. Lessee’s Obligation to pay such Supplemental Rent will survive the Termination Date and until such time that the Aircraft is put into the condition required for Return and Lessee’s remaining Obligations due for performance on the Termination Date have been performed in full.
22.4. Legal Status Upon Return . At Return, the Aircraft shall be:
(a) free and clear of all Liens, except Lessor’s Liens; and
(b) duly registered in the name of Lessee, as lessee, and evidencing the ownership interest of Owner to the extent permitted under the Law of the State of Registration of the Aircraft.
At Return, Lessee shall, at its own cost and expense, procure or cooperate with Lessor in procuring the immediate deregistration of the Aircraft from the Register (including, without limitation, execution and delivery by Lessee of such documents as may be required to de-register the Aircraft from the Register and to terminate the Lease or to evidence the expiration, termination or cancellation of the Lease).
22.5. Airport and Navigation Charges . Lessee shall ensure that upon Return any and all airport, navigation and other similar charges in connection with the use and operation of the Aircraft or any other aircraft operated by or in Lessee’s fleet of aircraft which give rise or would if unpaid give rise to any Lien in relation to the Aircraft or any Item of Equipment have been paid and discharged in full and will at Lessor’s written request produce reasonable evidence thereof reasonably satisfactory to Lessor.

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23.	EVENTS OF DEFAULT	
Any one or more of the following events shall constitute an “ Event of Default ” under this Lease:
(a) Lessee shall fail to make any payment of Rent or in respect of Maintenance Reserves when due hereunder and such failure shall continue for five (5) Business Days; or
(b) Lessee shall fail to procure and maintain the Insurances, or Lessee shall operate the Aircraft at a time when or in a place where such Insurances shall not be in effect or otherwise outside the scope of coverage of the Insurances or Lessee fails to comply with the provisions of Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or
(c) Lessee shall fail to timely comply with the provisions of Article 4 (Security Deposit); or
(d) Lessee shall fail to timely comply with its Obligation to accept delivery of the Aircraft when validly tendered by Lessor hereunder, or Lessee fails in any material respect to satisfy the conditions precedent for Delivery under Article 7 hereof; or
(e) Lessee shall fail to timely comply with its Obligation to complete Return of the Aircraft to Lessor on the Scheduled Termination Date or, if applicable, the Relevant Date as defined in Section 27.1(b) and such failure is not primarily attributable to any act or omission of Lessor or any Person lawfully claiming by or through Lessor; provided that so long as Lessee is diligently endeavoring to return the Aircraft to Lessor in accordance with the provisions of this Lease, the time for compliance shall be extended for a period of up to fifteen (15) days from the Scheduled Termination Date or the Relevant Date, as the case may be; or
(f) Lessee (i) voluntarily suspends substantially all of its airline operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee are revoked, cancelled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline, or (ii) ceases to be a commercial air carrier or ceases to hold its current air operator’s certificate (or equivalent); or
(g) Any representation or warranty made by Lessee herein or in any document or certificate furnished to Lessor in connection herewith or pursuant hereto shall prove to have been incorrect in any material respect when made, and if capable of cure, is not cured within thirty (30) days of receipt of notice of the same; or
(h) The occurrence of a Related Lease Event of Default or an event of default (as defined therein) or material breach of any obligation under any Operative Document, which event of default or material breach is not cured within any applicable cure period set forth therein;
(i) Lessee shall at any time fail to maintain the Items of Equipment in accordance with the provisions of this Lease or to promptly correct any discrepancy which renders the Aircraft or any Item of Equipment unairworthy so that a current and valid certificate of airworthiness and continuing authority to operate the Aircraft in commercial revenue service by the Aeronautics Authority cannot be or is not maintained for the Aircraft; provided, however, that it shall not be deemed to be an Event of Default if all Airbus A319 series aircraft are the subject of a grounding order issued by the Aeronautics Authority or the EASA, unless Lessee fails to comply with any instructions to correct the reason(s) for such grounding order promptly following the issuance thereof or fails to make diligent efforts to obtain any necessary parts required for such correction, but giving due regard to the management of such corrections on a fleet-wide basis; or

	  	71	  	ARTICLE 23
EVENTS OF DEFAULT	

(j) This Lease, any Related Lease or any assignment for security of any Permitted Sublease shall cease to be a valid and enforceable agreement and in full force and effect for any reason due to any action or inaction of Lessee in breach of its obligations hereunder or Lessee otherwise repudiates the same; or
(k) Lessee shall fail to comply with its obligations pursuant to Sections 12.12(a) (Installation of other Engines), 17.5 (Perfection of Title), 17.6 (Cape Town Convention) or 17.7 (Permitted Liens) and such failure shall continue for a period of five (5) Business Days after notice thereof is given by Lessor to Lessee; or
(l) Lessee shall fail to perform or observe in any material respect any other of the covenants, conditions, or agreements to be performed or observed by it hereunder and such failure shall continue for a period in excess of thirty (30) days after written notice thereof is given by Lessor to Lessee of such failure; or
(m) Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for thirty (30) days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; or
(n)(i) Lessee shall commence any case, proceeding or other action (A) under any existing or future Law relating to bankruptcy, insolvency, examinership, administration, reorganisation or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Lessee any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Lessee any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Lessee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Lessee shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.
Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its Obligations.

	  	72	  	ARTICLE 23
EVENTS OF DEFAULT	

24.	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	
24.1. Lessor’s Rights Following an Event of Default . At any time after the occurrence and continuation of an Event of Default Lessor may treat such event as a repudiation by Lessee of the Lease generally and of its Obligations and may:
(a) in the event of the occurrence and continuation of an Event of Default before Delivery, by notice to Lessee terminate its obligation to lease the Aircraft to Lessee hereunder; and/or
(b) proceed by appropriate court action to enforce performance by Lessee of the applicable covenants and provisions of this Lease or the other Operative Documents or to recover damages for the breach thereof; and/or
(c) by notice to Lessee, (i) require the grounding of the Aircraft and or (ii) cancel this Lease on and as of the date specified in such notice and (without further notice to Lessee) retake possession of the Aircraft, and Lessee agrees that Lessor may by its agents or representatives for this purpose enter upon Lessee’s premises where the Aircraft may be located or cause the same to be redelivered to Lessor, and Lessor shall be entitled to act as attorney for Lessee in causing such redelivery or in directing pilots to fly the Aircraft to said airport for redelivery thereof to Lessor and shall have all the powers and authorisations legally necessary for taking such action (at Lessor’s election) and/or
(d) do anything that may be required to cure the Event of Default (notwithstanding Lessor having no obligation or responsibility to do so and without prejudice to Lessor’s right to treat any such non-compliance by Lessee as an Event of Default under this Lease) and recover from Lessee all costs and expenses incurred in doing so; and/or
(e) with or without taking possession thereof, sell all the Aircraft or any Item of Equipment at public or private sale, with or without advertisement, for cash or upon credit, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Aircraft or any Item of Equipment as Lessor in its sole discretion may determine appropriate, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds thereof, all in such manner and on such terms as Lessor considers appropriate in its absolute discretion, as if this Lease had never been entered into; and/or
(f) require Lessee to pay to Lessor all amounts due and payable by Lessee to Lessor and/or any Indemnitee under the Operative Documents to which it is a party as of the date of termination or cancellation of this Lease; and/or
(g) require Lessee to pay to Lessor on demand and to indemnify Lessor for, from and against all damages, costs, fees, disbursements and expenses incurred or recoverable (pursuant to Article 2A (Uniform Commercial Code – Leases) or other applicable Law) by Lessor or in connection with such Event of Default, including, but not limited to:
(i) all losses, including lost profits (calculated on an After-Tax Basis) suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee or inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Lease and the other Operative Documents or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor upon a sale or other disposal of the Aircraft, is not as

	  	73	  	ARTICLE 24
LESSOR’S RIGHTS ADN REMEDIES	

profitable to Lessor as leasing the Aircraft in accordance with the terms of this Lease and the other Operative Documents would have been, including, in each case, but without duplication, lost Rent payments during any remarketing period or during any period in which the Aircraft is placed in storage and which have not otherwise been paid by Lessee (and, without duplication, taking into account any expenses incurred by Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the Aircraft to meet the requirements of an alternative lessee); and
(ii) interest at the Past Due Rate on (A) any amounts due and payable by Lessee under this Lease, but not paid, and (B) any judgment against Lessee in respect of or related to this Lease or any other Operative Document issued by a court of competent authority until the same are paid in full; and
(iii) without duplication of any of the foregoing, any loss, cost, expense or liability sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Lease, including any costs, fees, disbursements and expenses incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing any Item of Equipment to the condition required by this Lease and (B) preparing any Item of Equipment for sale or lease, advertising the sale or lease of any such Items and selling or re-leasing the same; and
(iv) reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Default or Event of Default or the exercise of Lessor’s remedies with respect thereto; and/or
(h) without duplication of any of the foregoing, require Lessee to indemnify each Indemnitee on demand against any expense which such Indemnitee may sustain or incur as a result or consequence of such Event of Default, including (but not limited to) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or any Item of Equipment or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to any financings by Lessor or Owner in connection with this Lease, any Operative Document, any Item of Equipment or any rights thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums whatsoever paid or payable on account of funds borrowed, including funds borrowed in order to carry any unpaid Rent, any unpaid amount in respect of Maintenance Reserves, or other Obligations); and/or
(i) apply and/or set off against any Obligations and Lessor’s costs, damages, expenses and disbursements incurred in connection with such Event of Default, at Lessor’s discretion, all amounts paid to Lessor in respect of Maintenance Reserves or Security Deposit pursuant to this Lease, as well as any other amounts paid by Lessee under any Operative Document and Related Lease; and/or
(j) require Lessee to redeliver possession of the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require); and/or
(k) exercise any of the rights, and avail itself of any of the remedies, provided by Article 2A (Uniform Commercial Code—Leases) and, to the extent applicable, Article 9 (Uniform Commercial Code—Secured Transactions) of the New York Uniform Commercial Code; and/or

	  	74	  	ARTICLE 24
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(l) by notice to Lessee terminate Lessee’s right to any product support rights pursuant to Assignment of Warranties and Consent (Airframe) Agreement entered into between the parties and Manufacturer of the Airframe.
Without prejudice to Lessor’s other remedies under this Lease or any other Operative Document, Lessee agrees that the occurrence of an Event of Default shall entitle Lessor to automatically and unilaterally cancel or terminate this Lease without requirement of any prior notice or judicial intervention for all legal purposes. All costs and expenses incurred or advanced by Lessor for or on account of any Obligations following the occurrence and continuation of an Event of Default shall bear interest at the Past Due Rate from the date on which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment, if any).
24.2. De-Registration . If an Event of Default occurs and is continuing following Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) de-registration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease. Lessee hereby irrevocably and by way of security for its obligations under this Lease appoints (which appointment is coupled with an interest) Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing.
24.3. Present Value of Payments . In calculating Lessor’s damages hereunder, upon the occurrence of an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred, together with amounts, if any, scheduled to be paid by a new lessee after any re-lease of the Aircraft, will be calculated on a present value basis using a discount rate of *****, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof.
24.4. Remedies Cumulative . No remedy referred to in this Article 24 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
24.5. Lessor’s Exercise of Remedies . In effecting any repossession of the Aircraft (including the Aircraft Documents, any Item of Equipment, an Engine, or Part) (“ Repossessed Items ”), Lessor and its representatives and agents, to the extent permitted by Law, shall:
(a) have the right to enter upon any premises where it reasonably believes the Repossessed Items to be located;
(b) not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to any of the Repossessed Items; provided, however, that Lessor shall return to Lessee all personal property of Lessee and other Persons, including its employees or its passengers, which was on the Aircraft at the time Lessor repossessed the Aircraft;
(c) not be liable or responsible, in any manner, for any inadvertent damage to any of Lessee’s property in repossessing and holding any of the Repossessed Items, except to the extent caused directly by Lessor’s gross negligence or willful misconduct; and
(d) have the right to maintain possession of and dispose of the Repossessed Items on any premises owned by Lessee or under Lessee’s control.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	75	  	ARTICLE 24
LESSOR’S RIGHTS ADN REMEDIES	

24.6. Application of Payments Following Default or Event of Default . Any and all payments received by Lessor under this Lease and under any other Operative Document following the occurrence and continuation of a Default or Event of Default, whether in respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to the Obligations of Lessee in any manner or order as Lessor may determine in its sole discretion, notwithstanding any instructions, directions or notice given by Lessee or any other Person with respect to the application of such payments.
24.7. Use of Termination Date . If this Lease is cancelled or the leasing of the Aircraft is otherwise terminated and the Aircraft is repossessed in connection with Lessor’s exercise of remedies following the occurrence and during the continuation of an Event of Default prior to the Scheduled Termination Date, then notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Scheduled Termination Date” will be utilised in calculating the damages to which Lessor may be entitled to receive from Lessee pursuant to Section 24.1.

	  	76	  	ARTICLE 24
LESSOR’S RIGHTS ADN REMEDIES	

25.	ASSIGNMENT AND TRANSFER	
25.1. No Assignment by Lessee . Except as permitted by Section 15.1, Lessee shall not transfer, assign, novate, mortgage or complete any other such or similar transfer of any interest in this Lease or any of its rights hereunder or in any Item of Equipment, and any such purported assignment shall be void ab initio.
25.2. Transfer of Lessor’s and/or Owner’s Interests . Each of Lessor, Owner, any Owner Participant and any Financing Party may at any time and without Lessee’s consent transfer to any Person (a “ Transferee ”) the Aircraft and/or all or any of its rights and obligations under this Lease and the other Operative Documents to which it is a party; provided that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party or its rights in respect of the Aircraft or any Item of Equipment, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer, had not taken place; (ii) at the time of transfer, the Transferee shall have a net worth of no less than $*****, or the obligations of Lessor under the Lease shall have been guaranteed by a guarantor having a net worth of no less than $*****, or Transferee shall have agreed to hold all Security Deposits, Maintenance Reserves and insurance proceeds in excess of the Agreed Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer to or by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Lessee acknowledges that neither minimal increases in Lessee’s administrative obligations, including expenses, nor an increase in the number of Indemnitees and/or Additional Insureds as a result of such transfer shall not, in and of itself, constitute an increase in Lessee’s obligations hereunder. The foregoing shall apply with the same force and effect to the transfer of any beneficial interest in the Aircraft or any trust or similar entity.
25.3. Cooperation with Transfers . Lessee shall do such things and execute such documents as may be reasonably requested of it to give effect to a transfer contemplated by and made or to be made in accordance with the terms and provisions of Section 25.2, including (a) entering into an assignment and assumption agreement or novation deed with the Transferee in form and substance reasonably satisfactory to Lessee, and (b) providing Lessor reasonably requested scheduling and routing information for the Aircraft or the Item of Equipment being transferred. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses reasonably incurred by Lessee in connection with such transfer. Lessee shall make such amendments to the stated contracts and list of Additional Insureds in respect of the Insurances effected in respect of the Aircraft so as to ensure continued compliance with the requirements of Article 19 with regard to the interests of such Transferee and any new Financing Parties and shall provide to Lessor updated documentation evidencing such amendments.
25.4. Financings . Owner, Lessor and any Owner Participant may at any time and without Lessee’s consent enter into any financing arrangements (which may include the conversion of the lease transaction contemplated by this Lease to a “leveraged lease” structure, a “head-lease, sub-lease” or other lease structure) with respect to the Aircraft pursuant to which (a) Lessor may assign its rights under this Lease and the other Operative Documents (by way of security) to Owner or to any Financing Parties and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	77	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

(b) Owner may execute a mortgage over the Aircraft in favour of the Financing Parties; provided, that (i) no such financing transaction shall increase Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional liabilities or obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party, based on laws enacted or in effect at the time of such transfer, than it would have had if such transfer had not taken place; (ii) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Basic Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Such financing arrangements may also take the form of a securitisation (a “ Securitisation ”) involving one or more loans from one or more financial institutions (each a “ Lender ”), and/or with notes, loan certificates, or pass through certificates issued pursuant to an indenture with a trustee (the “ Trustee ”), which notes, loan certificates or pass through certificates may be guaranteed (in whole or in part) by one or more monoline insurers (each, a “ Financial Guarantor ”).
25.5. Cooperation with Financings . Lessee shall cooperate with Lessor and do such things and execute such documents and make such filings and registrations in the State of Registration as may be requested of it by Lessor and/or Owner in order to protect the interests of the Financing Parties and/or Owner in connection with any financing contemplated by and made or to be made in accordance with the terms and provisions of Section 25.4 including, without limitation, (a) executing an acknowledgement of any assignment of Lessor’s rights under this Lease in favour of Owner or any relevant Financing Party, on terms customary in aircraft financing transactions or Securitisations, (b) providing Lessor scheduling and routing information for the Aircraft or any Item of Equipment being financed, (c) making such amendments to this Lease and any of the other Operative Documents and executing such additional documents, as may be reasonably be requested by Lessor in connection with the Securitisation, provided that any such amendment or additional documentation does not adversely affect the rights, or materially increase the obligations, of Lessee under the Lease and Operative Documents, and (d) making such amendments to the Insurances maintained in respect of the Aircraft to ensure continued compliance with the requirements of Article 19 with regard to the interests of Owner and any such Financing Party, and shall provide to Lessor updated documentation evidencing such amendments. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses incurred by Lessee in connection with such financing transaction.

	  	78	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

26.	LAW AND JURISDICTION	
26.1. Governing Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
26.2. Consent to Jurisdiction . Each of Lessee and Lessor hereby expressly and irrevocably consents that any legal action or proceeding with respect to this Lease may be brought in any court of the State of New York or any Federal court of the United States of America located in New York, New York, located in the Borough of Manhattan, United States of America, or in any jurisdiction where Lessee or Lessor or any of their respective assets may be found, and by execution and delivery of this Lease, each of Lessee and Lessor hereby irrevocably and expressly submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts, irrevocably and expressly waiving the jurisdiction of any other courts to which it may be entitled by reason of its present or future domicile or otherwise.
26.3. Process Agent and Service of Process . Lessee shall, not later than the execution date of this Lease, irrevocably designate, appoint and empower a duly authorised agent for service of process in the State of New York reasonably acceptable to Lessor in any suit or proceeding with respect to this Lease. A copy of any such process served on such agent shall be promptly forwarded by airmail by the person commencing such proceeding to Lessee at its address set forth in Appendix 2B, Section 6, but the failure of Lessee to receive such copies shall not affect in any way the service of such process as aforesaid. Lessee further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to Lessee at its address set forth in Appendix 2B, Section 6. The foregoing, however, shall not limit the rights of Lessor to serve process in any other manner permitted by Law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction.
26.4. Jurisdiction and Forum . Lessee agrees that final judgment against Lessee in any action or proceeding in connection with this Lease shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of Lessee’s indebtedness. Lessee hereby irrevocably waives, to the fullest extent permitted by Law, any objection which Lessee may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the State of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York has been brought in an inconvenient forum. To the extent that Lessee may in any jurisdiction in which proceedings may at any time be taken for the determination of any question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom) be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the Law of such jurisdiction.
26.5. Waiver of Jury Trial . LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR

	  	79	  	ARTICLE 26
LAW AND JURISDICTION	

OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
26.6. Waiver of Immunity . Each party to this Lease agrees that in any legal action or proceedings against it or its assets in connection with this Lease and/or any other Operative Document no immunity from such legal action or proceedings (which shall include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) shall be claimed by or on behalf of it or with respect to its assets, irrevocably waives any such right of immunity which it or its assets now have or may hereafter acquire or which may be attributed to it or its assets and consents generally in respect of any such legal action or proceedings to the giving of any relief or the issue of any process in connection with such action or proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order of judgment which may be made or given in such action or proceedings.

	  	80	  	ARTICLE 26
LAW AND JURISDICTION	

27.	MISCELLANEOUS	
27.1. Severability and Illegality.
(a) Severability . Any provision of this Lease prohibited by or unlawful or unenforceable under any applicable Law actually applied by any court of competent jurisdiction shall, to the extent required by such Law, be severed from this Lease and rendered ineffective so far as is possible without modifying the remaining provisions of this Lease.
(b) Illegality.
(i) If at any time there is a change in any applicable Law binding upon Lessee or Lessor in its State of Organisation or where it has its principal office or in any jurisdiction in which any action is required to be performed by it for the purposes of any Operative Document which renders, or which will render, it unlawful for such party to perform any of its obligations or to exercise any of its rights under any Operative Document (an “ Illegality Event ”) and the parties are not able to restructure the transaction in accordance with Section 27.1(b)(iii), Lessor or Lessee (as the case may be) shall forthwith notify the other party hereto and Lessor or Lessee (as the case may be) shall be entitled by written notice (the “ Illegality Notice ”) to the other party, either:
(A) to terminate its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease; or
(B) if such event occurs after the Delivery Date, to terminate the Lease Term,
in each such case on the Relevant Date.
(ii) In Section 27.1(b) “ Relevant Date ” means the later to occur of:
(A) the date of the Illegality Notice; and
(B) a future date specified in the Illegality Notice being prior to the date on which the Illegality Event takes effect.
(iii) Lessor and Lessee shall, for a period of ninety (90) days from the date Lessor or Lessee becomes aware that an Illegality Event will arise or has arisen, or such shorter period ending on the Business Day prior to the date on which such Illegality Event takes place, and provided that no Event of Default has occurred and is continuing, negotiate in good faith and take all commercially reasonable steps (subject to Section 27.1(b)(iv) below) which are available to mitigate the effects of such Illegality Event, with a view to restructuring the transaction in a manner such that the leasing of the Aircraft to Lessee may continue on the same commercial terms as under this Lease, including, without limitation, by way of amendment, novation or replacement to any Operative Document, or termination of, any Operative Document.
(iv) Nothing in Section 27.1(b)(iii) above shall, or shall be construed so as to, oblige Lessor to take any mitigating steps (including, without limitation, omitting to act) if, in its reasonable opinion, to do so:

	  	81	  	ARTICLE 27
MISCELLANEOUS	

(A) would or would be likely to involve it in any unlawful activity or any activity that is contrary to any Law; or
(B) unless indemnified to its satisfaction, would involve it in any cost, loss, liability or Tax disadvantage; or
(C) would be prejudicial to it, the Aircraft or the other Indemnitees.
(v) The cost of any mitigation pursuant to this Section 27.1(b) shall be for the account of Lessee.
(vi) If Lessor or Lessee shall have terminated the Lease Term or its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease in accordance with Section 27.1(b)(i), then on the Relevant Date, Lessee shall:
(A) return the Aircraft to Lessor in accordance with the provisions of Article 22 if the Aircraft has been delivered to Lessee under this Lease, unless a Lessor Illegality Event has occurred in which case the Aircraft shall be returned to Lessor in its then as-is condition, but in any event, having been operated and maintained throughout the Lease Term in accordance with the provisions of this Lease; and
(B) pay to Lessor the amounts provided in Section 24.1, clauses (f); (g) and (h), and Section 24.3 as if references therein to an “Event of Default” were to the termination of the Lease Term pursuant to Section 27.1(b)(i).
27.2. Amendments . No term or provision of this Lease may be amended, modified, waived, discharged or terminated orally, but only by a written instrument signed by Lessor and Lessee.
27.3. Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer.
(a) If Lessee fails to perform or comply with any Obligations, Lessor shall have the right, but not the obligation, to discharge such obligation, and the amount of such payment made and the expenses of Lessor incurred in connection with such discharge shall be payable by Lessee upon demand, together with interest at the Past Due Rate from the date such expenses were incurred.
(b) Lessor may delegate to any Person or Persons (the “ Servicer ”) all or any of the rights, powers or discretions vested in it by this Lease or any of the other Operative Documents, and any such delegation may be made upon such terms and conditions and subject to such regulations (including the power to sub-delegate) as Lessor in its absolute discretion deems fit. Upon notice to Lessee of the appointment of such a Servicer, such Servicer may act as Lessor’s or Owner’s servicer for all matters related to this Lease and the Aircraft, and Lessee agrees that it shall communicate with and deal with such Servicer with respect to all such matters as if the Servicer were the Lessor under this Lease.
27.4. Counterparts. This Lease may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease may be created through the transfer or possession of any counterpart other than the counterpart which has been marked “Original” on the signature page thereof.

	  	82	  	ARTICLE 27
MISCELLANEOUS	

27.5. Delivery of Documents by Electronic Means. Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or other electronic image file will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or other electronic image file will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
27.6. Survival. The representations, warranties, covenants, agreements and indemnities (including, without limitation, the indemnities contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the Termination Date to the extent required for full performance and satisfaction thereof.
27.7. Entire Lease. This Lease (including all Appendices) and the other Operative Documents executed pursuant hereto constitute the entire agreement between Lessor and Lessee regarding the Aircraft and any prior or contemporaneous written or oral understandings with regard to the subject matter hereof are superseded hereby in their entirety.
27.8. Successors and Assigns. Subject to the provisions of Article 25, the terms and provisions of this Lease and each other Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns.
27.9. Brokers. Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorney’s fees and disbursements) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the lease of the Aircraft, if such claim, damage, cost or expense arises out of any action or alleged action by the indemnifying party, its employees or agents. It is understood and agreed between the parties that this Lease has been concluded by direct negotiation without any intermediaries or agents. Lessee hereby represents and warrants that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Lease, to any employee of Lessor or to any Person.
27.10. Transaction Costs. Whether or not the transactions contemplated hereby are consummated, each party hereto agrees to pay its own costs and expenses incurred in connection with the preparation, execution and delivery of this Lease and any other documents delivered in connection herewith, including without limitation the fees, expenses and disbursements of counsel, except as otherwise expressly set forth herein. In addition, Lessee shall be solely responsible for (i) all costs, including attorneys’ fees and disbursements, incurred in registering the Aircraft and an executed counterpart of this Lease and the Lease Supplement in the State of Registration and any other jurisdiction wherein registration of the same is necessary as a result of the operation of the Aircraft by Lessee or any Permitted Sublessee, and (ii) all costs, including attorneys’ fees and disbursements, incurred in connection with the de-registration of the Aircraft from the Register or any other applicable Aeronautics Authority upon the cancellation or termination of this Lease in accordance with the provisions hereof. Each of Lessor and Lessee agrees to pay the reasonable costs and expenses (including attorneys’ fees and disbursements) of the other party incurred in connection with the entering into or giving or withholding of any future waiver, supplement or amendment or other action with respect to the Lease or any other document delivered in connection therewith that it may request, except in the case of an Event of Default in which case all of such costs shall be at the expense of Lessee.

	  	83	  	ARTICLE 27
MISCELLANEOUS	

27.11. Time is of the Essence. Time and strict and punctual performance are of the essence with respect to each provision of this Lease.
27.12. Language.
(a) This Lease is in the English language and all notices, opinions, financial statements and other documents given under this Lease shall be provided in the English language or, if not submitted in the English language, shall be accompanied by one certified copy of an English translation thereof for each copy of the foregoing so submitted.
(b) If this Lease or any other Operative Document is required to be translated into another language for the purposes of any filing or registration, (i) Lessee shall procure and pay for any such translation, and (ii) the English version shall prevail in the event of any conflict with any such non-English version.
27.13. No Rights of Third Parties. No third parties, other than Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed to have a right to ( x ) benefit from, or ( y )seek to enforce, any of the provisions of this Lease.
27.14. Delegation. Lessor may delegate to any appropriately licensed and/or experienced person(s) all or any of the rights, powers or discretions vested in it by this Lease or any other Operative Document and any such delegation may be made upon such terms and conditions as between such person and Lessor as Lessor in its absolute discretion may determine.
27.15. Further Assurances. Lessee shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by law or reasonably requested in writing by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purposes of this Lease and the other Operative Documents.
27.16. Rights at Law. Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of Lessor hereunder or under any other Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of Lessor under the Operative Documents (i) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (ii) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and (iii) shall be cumulative and not mutually exclusive and the exercise of one shall not be deemed a waiver of the right to exercise any other.
27.17. Confidentiality.
(a) During the Lease Term all Information shall remain confidential and the parties hereto and their respective Affiliates will use their respective reasonable efforts not to disclose the Information to any other Person without prior written consent of each other party, which consent shall not be unreasonably withheld; provided, that Lessor and Lessee may, without the consent of each other party, disclose the Information in any of the following situations:

	  	84	  	ARTICLE 27
MISCELLANEOUS	

(i) To directors, officers, employees, permitted assigns and agents of Lessor, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(ii) To auditors, accountants or legal advisors of Lessor, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(iii) To actual or potential lenders/Financing Parties, purchasers or other permitted assigns of Lessor, Lessee or any Affiliate of any of such parties, including but not limited to providing financial information about Lessee to potential lenders/Financing Parties to, and purchasers from, Lessor, provided that, upon the request of Lessee, such potential lenders/Financing Parties will agree to keep such Information confidential in a manner similar to the provisions hereunder and that their access to Information is solely for purposes of evaluating an investment in a Securitisation or other financing of the Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a form reasonably acceptable to Lessee; or
(iv) To rating agencies with respect to ratings of Lessor, Owner or an Owner Participant (if any) or a related Securitisation; or
(v) To such other parties as Lessor or Lessee may reasonably believe to be required by law, by government regulation or order (including, without limitation any regulation or order of a bank regulatory agency), by subpoena or by any other legal process.
(b) Notwithstanding any of the foregoing, Information will not be considered confidential, and Lessor and Lessee and their respective Affiliates may disclose any item of the Information without restriction in any of the following circumstances, if such item:
(i) is publicly available (either to the general public or to any relevant trade or industry) prior to any party’s receipt of it from another party hereto;
(ii) is thereafter made publicly available (either to the general public or to any relevant trade or industry) by another party hereto or by a third party which is entitled to make such item publicly available;
(iii) becomes available to any party hereto on a non-confidential basis from source which has represented to such party that such source is entitled to disclose it; or
(iv) was known to any party hereto on a non-confidential basis prior to its disclosure to such party by another party hereto.
27.18. Notices . All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally, when telecopied, or if deposited in the mail, when received, to the addressees appearing in Appendix 2B, Section 6 or to such other address as any party may designate for itself by written notice to the other party or parties.

	  	85	  	ARTICLE 27
MISCELLANEOUS	

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of the 30 day of November 2009.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS)
Lessee	  		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	/s/ Fernando Suárez Gerard	  		 	By:	 	/s/ Thomas Schmid	
Name:	 	Fernando Suárez Gerard	  		 	Name:	 	Thomas Schmid	
Title:	 	CFO	  		 	Title:	 	Attorney-in-Fact	
					
By:	 	/s/ Andres Fabre	  		 		 		
Name:	 	Andres Fabre	  		 		 		
Title:	 	COO	  		 		 		
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

	  		  	SIGNATURE PAGE	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of the 30 day of November 2009.

CONCESIONARIA VUELA COMPAÑÍA de AVIACIÓN, S.A. de C.V. (D/B/A VOLARIS)
Lessee	  		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	/s/ Fernando Suárez Gerard	  		 	By:	 	/s/ Thomas Schmid	
Name:	 	Fernando Suárez Gerard	  		 	Name:	 	Thomas Schmid	
Title:	 	CFO	  		 	Title:	 	Attorney-in-Fact	
					
By:	 	/s/ Andres Fabre	  		 		 		
Name:	 	Andres Fabre	  		 		 		
Title:	 	COO	  		 		 		
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

	  		  	CHATTEL PAPER ORIGINAL SIGNATURE PAGE	

Appendix 1
to Aircraft Lease Agreement
DEFINITIONS
“ Acceptance Certificate ” means the acceptance certificate executed and delivered by Lessee to Lessor at Delivery in the form of Appendix 3.
“ Additional Insureds ” means the Indemnitees and each of them.
“ Aeronautics Authority ” means the DGAC or such other governmental department, bureau, commission or agency that under the Law of the State of Registration shall from time to time have control or supervision of civil aviation in that state or have jurisdiction over the registration, airworthiness, operation, or other matters relating to, the Aircraft.
“ Affiliate ” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified.
“ After-Tax Basis ” means, with respect to any indemnity or other amount (an “ Amount ” ) which is required by any Operative Document to be paid on an “After-Tax Basis” by Lessee (or by any other Person on account of any Obligation of Lessee under the Operative Documents) to any Indemnitee (or to any other Person for the account or benefit of any Indemnitee), payment of such Amount supplemented to the extent necessary by a further payment or payments that will cause the sum of all such payments, reduced by the aggregate amount of all Taxes payable by any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments by any Indemnitee, net of any actual current reduction in any Indemnitee’s liability for Taxes caused by the allowance of any deduction, Tax credit or other Tax benefit for the Tax, Claim, cost or expense that gave rise to Lessee’s liability to pay such Amount, to be equal to the Amount that is required to be paid on an “After-Tax Basis”, provided, that for the purpose of calculating the amount of Taxes imposed on any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments, it shall be assumed that such Indemnitee is subject to each Tax that is imposed on or payable by such Indemnitee with respect to the accrual, actual receipt or constructive receipt of each such payment at the highest marginal statutory Tax rate applicable to such Indemnitee for the Tax accounting period in which such Indemnitee accrues or receives (actually or constructively) such payment.
“ Agreed Option(s) ” means a change to the Standard Specification by way of Specification Change Notices ( SCN s) or other changes agreed in writing among Lessee, Lessor, Seller and, as applicable, CIT Leasing.
“ Agreed Value ” means, with respect to the Aircraft, the amount set forth in Appendix 2B.
“ Aircraft ” means, as the context may require or permit, the Airframe together with (i) the Engines, whether or not installed on the Airframe, (ii) all Parts or components thereof, (iii) any spare parts or ancillary equipment or devices furnished with the Airframe or the Engines under this Lease, (iv) all items of equipment and other property, tangible and intangible, described in the Detail Specification or in the Airframe Manufacturer’s Aircraft Inspection Report (“ AIRS Report ”) delivered on the Delivery Date and not otherwise described in the preceding portions of this definition, (v) all Aircraft Documents, (vi) all substitutions, replacements and renewals of any and all thereof, and (vii) all alterations, modifications and additions which may be made to, installed on or incorporated into the Aircraft, including but not limited to, those required pursuant to any Airworthiness Directive.

	  	App 1-1	  	APPENDIX 1
DEFINITIONS	

“ Aircraft Documents ” means, whether in paper, photographic, digital, electronic or other medium, (i) the manuals and records identified in the attachments to the Acceptance Certificate hereto and all other records and documentation pertaining to the Aircraft and delivered with the Aircraft on the Delivery Date and (ii) all other Required Approvals, records and documentation generated during the Lease Term that are related to the maintenance, inspections and alterations, modifications and additions accomplished during the Lease Term with respect to the Aircraft and required to be maintained by Lessee either by the Aeronautics Authority or in order to comply with the provisions of this Lease.
“ Airframe ” means the Airbus A319-100 aircraft (except for the Engines) as more specifically described in the Lease Supplement, together with the APU, all Landing Gear and any and all Parts.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued by the Certificating Authority, in addition to any airworthiness directive issued by the Aeronautics Authority, each to the extent the same is applicable to the Aircraft and/or any Item of Equipment.
“ Alert Service Bulletin ” means any service bulletin issued by a Manufacturer that is designated as such by such Manufacturer.
“ Approved Maintenance Organisation ” means the Manufacturer or a maintenance facility approved by the Aeronautics Authority and also by the FAA pursuant to FAR Part 145 and/or the EASA pursuant to EASA Part-145 for the performance of maintenance, testing, inspection, repair, overhaul or modification on the Aircraft or any Item of Equipment.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date, or any replacement thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to such auxiliary power unit and any and all Parts removed therefrom.
“ APU Cycle ” means one complete continuous operation of the APU beginning at the moment the APU is started and continuing until it subsequently shuts down.
“ APU Hour ” means each hour or part thereof, rounded to the nearest minute, elapsing from the moment the APU is started to the moment when the APU is shut down.
“ APU Overhaul Reserve ” has the meaning set forth in Appendix 2D, Section 3.B(i).
“ Assumed Reference Rate ” is the assumed Reference Rate appearing in Appendix 2B, Section 1.2(a).
“ Base Year Dollars ” means the value of Dollars in January 2008.
“ Basic Rent ” means the rent payable for the Aircraft for each Rent Period under this Lease in the amount determined in Appendix 2B, Section 1.
“ BFE ” means any equipment defined as buyer-furnished equipment under Seller’s standard specification and/or which is to be provided to the Seller for incorporation into the Aircraft regardless of whether such equipment is provided by or for and on behalf of Lessor as buyer-furnished equipment or provided by Seller at the direction of Lessor as seller-purchased equipment, seller-supplied or seller-furnished equipment.
“ Business Day ” means (a) in the case of payments under this Lease or any Operative Document, any day (other than Saturday or Sunday) on which banks are open for business in New York, United States of America; and (b) in all other cases, any day (other than Saturday or Sunday) on which banks are open for business in Ireland, the State of Registration and if different from the State of Registration, Lessee’s State of Organisation.

	  	App 1-2	  	APPENDIX 1
DEFINITIONS	

“ C-Check ” means with respect to the Aircraft, (i) the accomplishment of Tasks that, at the time of such check, would require accomplishment prior to the next due c-check based upon the interval for each such Task in the MPD, and where such Tasks are controlled by Flight Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the rectification of each defect discovered during the accomplishment of such Tasks.
“ Cape Town Convention ” means, together, the official English language text of each of the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Protocol ”) each as opened for signature on 16 November 2001 at Cape Town, South Africa.
“ Cash Security Deposit ” means the portion of the Security Deposit paid in cash in the amounts in Appendix 2B, Section 2.
“ Certificating Authority ” means the EASA.
“ Certificating Authority Form ” means an EASA Form One or an FAA Form 8130-3, any dual release form approved by both the EASA and the FAA, or any successor to either such forms.
“ CIT Leasing ” means C.I.T. Leasing Corporation, a corporation organised under the laws of the State of Delaware, U.S.A. with its principal office located at 505 Fifth Avenue, 12th Floor, New York, New York, 10017. U.S.A.
“ Claims ” means any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any reasonable attorney’s fees and other reasonable and documented, out-of-pocket costs and expenses in connection therewith or in establishing the right to indemnification hereunder, including any of the foregoing arising or imposed with or without the fault or negligence of any Indemnitee (whether passive or active) or under the doctrine of strict or absolute liability.
“ Credit Security Deposit ” means the portion of the Security Deposit paid by Lessee in the form of Security Letter of Credit in the amount specified in Appendix 2B, Section 2.
“ Customisation Options Payment ” has the meaning given in Appendix 2B, Section 1.
“ Cycle ” means one take-off and landing of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed).
“ Default ” means any event, condition or circumstance which, with the lapse of time and/or the giving of notice which would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft by Lessor to Lessee in accordance with this Lease and which shall be evidenced by execution and delivery of the Lease Supplement and the Acceptance Certificate.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Location ” means the premises of the Airframe Manufacturer in Hamburg, Germany.

	  	App 1-3	  	APPENDIX 1
DEFINITIONS	

“ Delivery Reference Rate ” means the Reference Rate in effect three (3) Business Days prior to the Delivery Date and which shall, if Lessee elects to have the amount of Basic Rent fixed for the Lease Term, be specified in the Acceptance Certificate.
“ Detail Specification ” means the Standard Specification as the same has been modified by Agreed Options in accordance with the Lease.
“ DGAC ” means the Mexican General Department of Civil Aeronautics ( Directión General de Aeronautica Civil ) and any successor agency thereto established to regulate civil aircraft registered in the United Mexican States.
“ Documents Loss ” means the loss or destruction of the Aircraft Documents or any of them.
“ Dollars ” or “ $ ”means the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency, an agency of the European Union having responsibility for aviation safety, regulation and oversight of member states of the European Union, or any Person, governmental department, bureau, commission or agency succeeding to the functions of the European Aviation Safety Agency.
“ EASA Requirements ” means, as applicable to the Aircraft, (i) any of the regulations, rules, or decision of, or governing the EASA, and (ii) EU-OPS 1.
“ Engine(s) ” means each of the engines identified in the Lease Supplement, or any replacement of any thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to any such Engine and any and all Parts removed therefrom.
“ Engine Agreed Value ” means, with respect to each Engine when not installed on the Airframe, the amount set forth in Appendix 2B, Section 4.3.
“ Engine Life Limited Parts Reserve ” has the meaning set forth in Appendix 2D, Section 2.B(i).
“ Engine Loss ” means the occurrence of (a) an Event of Loss with respect to an Engine only (whether or not installed on the Airframe) or (b) any divestiture or impairment of any right, title or interest of Lessor in or to an Engine as a result of the installation of such Engine on any other airframe.
“ Engine Restoration ” means any engine shop visit having a workscope that at a minimum, includes a complete refurbishment or full overhaul of the high pressure turbine and combustion section of the relevant Engine, accomplished in accordance with the Engine Manufacturer’s Engine Maintenance Management Program applicable to the Engine.
“ Engine Restoration Reserve ” has the meaning set forth in Appendix 2D, Section 2.A(i).
“ Escalation ” means the application of the revision formula set forth in Appendix 2C to an amount stated in Base Year Dollars and the adjusted amount resulting from such application being added to the originally stated amount.
“ EU-OPS 1 ” means the technical requirements and administrative procedures implemented pursuant to Council Regulation (EEC) No. 3922/91, as amended by Regulation (EC) No. 1899/2006 of the European Parliament and Council of the EU, and as the same is further amended from time to time.

	  	App 1-4	  	APPENDIX 1
DEFINITIONS	

“ European Union ” or “ EU ” means the union of countries established pursuant to the Treaty of Maastricht, which came into effect on November 1, 1993, as amended by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the Treaty of Nice signed on February 26, 2001, and as may be amended from time to time.
“ Event of Default ” means those events and circumstances listed in Article 23.
“ Event of Loss ” means, with respect to any Item of Equipment (excluding Parts), any of the following events:
(a) the agreed, actual, arranged, compromised or constructive total loss of such Item (including any damage to the same which results in an insurance settlement on the basis of a total loss, or requisition for use or hire of the same which results in an insurance settlement on the basis of a total loss); or
(b) the destruction or damage that permanently renders such Item to be unfit for normal use for any reason whatsoever; or
(c) the requisition of title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, condemnation or confiscation for any reason of such Item by a Governmental Authority or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title of such Item; or
(d) the hijacking, theft, or disappearance of such Item (i) for a period of sixty (60) days or more or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(e) the condemnation, confiscation, capture, deprivation, seizure or requisition for use or hire of the Airframe or the deprivation of the possession or use of the Airframe as a result of any law or other action by the Aeronautics Authority or any Governmental Authority (other than where the same amounts to the circumstances provided in clause (c)) which deprives any Person entitled to have possession and/or use of the Item of its possession and/or use (i) for more than a period of sixty (60) consecutive days or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(f) any other case which by subsequent written agreement Lessor and Lessee may deem, with the agreement of the insurers, to be an Event of Loss.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“ Event of Loss Date ” means (a) with respect to any Event of Loss set forth in paragraph (a) of the definition thereof, the earliest of (i) the date of actual loss, (ii) the date on which the loss is agreed, arranged or compromised by the insurers and (iii) sixty (60) days after the date of notice to Lessee’s brokers or insurers claiming the loss, (b) with respect to any Event of Loss set forth in paragraph (b) or (c) of the definition thereof, the date such event, condition or circumstance occurs or, if such date is not known, the date on which the relevant property was last known to exist, (c) with respect to any Event of Loss set forth in paragraph (d) or (e) of the definition thereof, the earlier of (i) the date on which insurers make payment on the basis of an Event of Loss and (ii) the date falling thirty (30) days after the expiration of the period, or the continuation of the condition or circumstance beyond the date, described therein or (d) with respect to any Event of Loss set forth in paragraph (f) of the definition thereof, the date of the subsequent agreement reached by Lessor and Lessee, with the agreement of the insurers.

	  	App 1-5	  	APPENDIX 1
DEFINITIONS	

“ Event of Loss Proceeds ” means the proceeds of any insurance required to be maintained by Lessee hereunder, or any compensation or similar payment arising, in respect of an Event of Loss.
“ Excluded Taxes ” has the meaning provided in Section 21.1(b) hereof.
“ Excusable Delay ” means any delay in Delivery not occasioned by the fault or negligence of Lessor and/or due to or arising from Lessor’s reasonable control including, without limitation, (i) acts of God or the public enemy, natural disasters, civil war, insurrection or riots, quarantine restrictions, strikes, lockouts, or labour stoppages (other than strikes, lockouts or labour stoppages of Lessor and/or its Affiliates), and/or (ii) fires, floods, explosions, earthquakes, epidemics or serious accidents, and/or (iii) delays relating to or arising out of Seller’s failure to deliver the Aircraft to Lessor.
“ FAA ” means the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any Person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“ FAR ” means the federal aviation regulations as set forth in Title 14 of the United States Code of Federal Regulations, Chapter 1 (Parts 1-199).
“ Final Check ” means the check to be accomplished by Lessee immediately prior to the redelivery of the Aircraft to Lessor as more specifically described in Appendix 2E, Section 3.1.
“ Financing Party ” means any Person or Persons, from time to time notified by Lessor to Lessee, from whom financing for the acquisition or continued ownership of the Aircraft by Lessor (or Owner if Lessor is not the Owner) has been, is to be, or is for the time being, obtained and/or in whose favour or for whose benefit security over the Aircraft is to be, or is for the time being, granted by Lessor or Owner (as the case may be), any Security Agent, Security Trustee, owner trust or trustee, manager, servicer, lender and/or financial guarantor.
“ Flight Hour ” means each hour or fraction thereof, measured to two decimal places, elapsing from the moment the wheels of the Airframe (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed) leave the ground on take-off to the moment when the wheels of the Airframe (or such aircraft on which an Engine, Landing Gear, or Part is (or was) then currently installed) touch the ground on landing.
“ GAAP ” means (i) generally accepted accounting principles in effect in Mexico or (ii) International Financial Reporting Standards and International Accounting Standards (and interpretations thereof) as in effect at the relevant time, and applied on a basis consistent with prior periods except as may be disclosed in the pertinent Person’s financial statements.
“ Governmental Authority ” means and includes (whether having a distinct legal personality or not) (a) any national government, political subdivision thereof, or local jurisdiction therein, (b) any board, commission, department, division, organ, instrumentality, court or agency of any entity referred to in (a) above, however constituted, and (c) any association, organisation or institution (international or otherwise) of which any entity mentioned in (a) or (b) above is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

	  	App 1-6	  	APPENDIX 1
DEFINITIONS	

“ Guarantee ” means that certain guarantee provided to Lessor by the Guarantor pursuant to which Guarantor has fully and irrevocably guaranteed all of Lessee’s Obligations.
“ Guarantor ” means Controladora Vuela Campañía de Aviación, S.A. de C.V., a sociedad anónima de capital variable organized and existing under the laws of the United Mexican States.
“ I.A.T.A. ” means the International Air Transport Association.
“ Indemnified Tax(es) ” means any Tax for which Lessee has an obligation of indemnity pursuant to Article 21 of the Lease.
“ Indemnitee ” means Lessor, Owner, CIT Leasing, any Owner Participant, any Financing Party, and their respective Affiliates, officers, directors, shareholders, members, managers, duly authorised agents, employees and attorneys-in-fact and their respective successors and permitted assigns.
“ Information ” means the terms and conditions of this Lease and any other Operative Document and any other information delivered to any party to this Lease in connection with this Lease or any Operative Document.
“ Insurances ” means any and all contracts or policies of insurance (or reinsurance) required to be maintained from time to time under this Lease.
“ International Registry ” or “ IR ” means the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
“ Item of Equipment ” or “ Item ” means individually or collectively, as the context requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear, the APU and any of the Parts, whether or not installed in or attached to the Aircraft or the Airframe.
“ Landing Gear ” means the complete strut assembly of each landing gear installed on the Airframe on the Delivery Date (or any replacement for any such landing gear made pursuant to the terms of this Lease) and shall consist of the inner and outer cylinders of the main landing gear and the nose landing gear, including the truck assembly and axles of such landing gear.
“ Landing Gear Overhaul Reserve ” has the meaning set forth in Appendix 2D, Section 3.A(i).
“ Law ” means and includes (a) any statute, decree, constitution, regulation, rule, order, judgment, AD or other directive of any Governmental Authority; (b) any treaty, pact, compact or other agreement to which any Governmental Authority is a party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any of the foregoing.
“ Lease ” means this Aircraft Lease Agreement, including all appendices, exhibits and schedules hereto, as the same may be amended from time to time.
“ Lease Supplement ” means the lease supplement dated the Delivery Date in the form of Appendix 4.
“ Lease Term ” means the period appearing in Appendix 2A which otherwise commences on the Delivery Date and ends on the Termination Date.
“ Lessee’s Actual Cost ” means Lessee’s cost incurred in performing an Obligation under this Lease, determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then

	  	App 1-7	  	APPENDIX 1
DEFINITIONS	

Lessee’s Actual Cost shall be the actual charges, including, without limitation, shipping, freight mark-ups and handling charges of such third party charged to and paid by Lessee (but excluding shipping and freight charges and mark-ups, handling charges or overhead added by Lessee), and (ii) if Lessee elects that such obligation be performed by Lessee, then Lessee’s Actual Cost shall be ***** (which hourly labor rate shall be increased by ***** at each calendar anniversary of the Delivery Date during the Lease Term) plus Lessee’s direct cost for materials and services provided by third parties without Lessee-imposed mark-ups, handling charges or overhead added to such third-party charges by Lessee.
“ Lessor Illegality Event ” means any event which makes it illegal under applicable Law for Lessor to proceed with the transaction evidenced hereby because of illegality in Lessor’s State of Organization, or such illegality arises as a result of any act or omission of Lessor, other than:
(a) where caused due to any bi-lateral or United Nations sanctions applicable in Lessor’s State of Organization; or
(b) in circumstances where an Illegality Event has also occurred in Lessee’s State of Incorporation.
“ Lessor’s Lien ” means any Lien on the Aircraft or any Item of Equipment (i) granted to any Financing Party with respect to the Aircraft or any Item of Equipment except where the same are granted in connection with and following the occurrence of an Event of Default, (ii) arising as a result of any act of Lessor, Owner or any Affiliate of Lessor or Owner that is in violation of any of the obligations of such Person under the Lease and the other Operative Documents, (iii) any Claim against Lessor, Owner or any Affiliate of Lessor or Owner or any Person lawfully claiming by or through any of them that is unrelated to the transactions contemplated by the Lease, (iv) any Liens arising in connection with a Claim for which Lessee is not required to indemnify an Indemnitee hereunder; or (v) Taxes (including claims therefor) imposed on Lessor or any Affiliate of Lessor for which Lessee is not obligated to indemnify Lessor or such Affiliate pursuant to any of the Operative Documents.
“ LIBOR ” means, for any period, the three-month rate of interest per annum at which deposits in Dollars are offered to major banks in the London interbank market at approximately 11:00 a.m. (London time) three (3) Business Days before the first day of such period, as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as may replace such page on such system for the purpose of reporting London Interbank Offered Rates of major banks) under the heading for British Bankers Association Interest Settlement Rates in the column designated “ USD ” (U.S. Dollar).
“ Lien ” means any mortgage, charge, pledge, lien, hypothecation, lease, title retention, assignment, trust arrangement, right of possession or detention or security interest of any kind, howsoever created or arising.
“ Life Limited Part ” or “ LLP ” means any Part that has a pre-determined life limit mandated by the Manufacturer or the Certificating Authority which requires any such Part to be discarded upon reaching such life limit.
“ Lost Documents ” means Aircraft Documents that have suffered a Documents Loss.
“ Maintenance Check(s) ” means the 6 Year HMV Check and/or 12 Year HMV Check performed or to be performed on the Airframe, any Engine Restoration performed or to be performed on an Engine, any Engine LLP replacement or any Overhaul performed or to be performed on any Landing Gear or the APU.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 1-8	  	APPENDIX 1
DEFINITIONS	

“ Maintenance Program ” mean Lessee’s maintenance program (as approved by the Aeronautics Authority) for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Aircraft and each Item of Equipment.
“ Maintenance Reserve Claim ” means any claim by Lessee for payment by Lessor from the applicable Maintenance Reserves of Reimbursable Expenses following completion by Lessee of a Maintenance Check.
“ Maintenance Reserve(s) ” means, collectively, as of any given time, the then current balance of payments received from Lessee and held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2D to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve, Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear Overhaul Reserve and APU Overhaul Reserve.
“ Manufacturer ” means, in the case of the Airframe, Seller, in the case of the Engines, IAE International Aero Engines AG, and in the case of any Item of Equipment, the manufacturer of such Item of Equipment.
“ Manufacturer’s Repair Manual ” means the most current revision of the respective (i) maintenance, repair or overhaul manual or (ii) the structural repair manual, each issued by the Manufacturer and applicable to the maintenance performed on the Aircraft or any Item of Equipment.
“ Mortgage Convention ” means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.
“ MPD ” means the Airframe Manufacturer’s Maintenance Planning Document, as revised from time to time to include all revisions up to and including the then most current revision issued by the Airframe Manufacturer.
“ Net Event of Loss Proceeds ” means any Event of Loss Proceeds actually received by Lessor or Owner (or such other person entitled to receipt thereof), less any expenses (including reasonable attorney’s fees and costs) and/or Taxes incurred by Lessor (or any other relevant Person) in connection with the collection or receipt of such funds which would not otherwise have been incurred by Lessor (or such other relevant Person) absent the occurrence of such Event of Loss.
“ Obligations ” means all of Lessee’s obligations and liabilities now existing or hereafter arising under any Operative Document.
“ Operative Document(s) ” means, either collectively or individually as the context requires, this Lease, the Lease Supplement, the Acceptance Certificate, the Participation Agreement, the Guarantee, any warranty assignment, acknowledgment and consent, any Permitted Sublease, the Security Letter of Credit (if any), and any and all other documents, instruments and agreements entered into in connection with any of the foregoing and to which Lessee is a party or which Lessee acknowledges, in writing, is an Operative Document.
“ Outside Delivery Date ” means the date that is specified in Appendix 2A.

	  	App 1-9	  	APPENDIX 1
DEFINITIONS	

“ Overhaul ” means (as applicable):
(i) with respect to any Landing Gear or Part, the complete refurbishment or major restoration of such Landing Gear or Part in accordance with the overhaul or restoration procedures in the respective Manufacturer’s Repair Manual for such Landing Gear or Part, the extent of which refurbishes or restores such Landing Gear or Part, as applicable, to a “zero time since overhaul” condition in accordance with such Manufacturer’s Repair Manual;
(ii) with respect to the APU, the complete refurbishment or restoration of the compressor, combustion section and turbine of the APU pursuant to the Manufacturer’s Repair Manual: and
(iii) with respect to any Engine, an Engine Restoration.
“ Owner ” means Lessor in its capacity as owner of the Aircraft or such other Person as Lessor may notify Lessee in writing from time to time as being the owner of the Aircraft.
“ Owner Participant ” means any Person who owns a beneficial interest in the Aircraft through a trust or otherwise as Lessor may notify Lessee in writing from time to time, in accordance with the terms hereof.
“ Part(s) ” means all appliances, components, parts, instruments, appurtenances, accessories, furnishings, seats, BFE and other equipment and additions of whatever nature (other than Engines, the APU, any Landing Gear, and any temporary replacement parts installed pursuant to Article 12 of the Lease), which may from time to time be incorporated or installed in or attached to any Item of Equipment or which have been removed therefrom, but which remain associated with and/or form part of the Aircraft or any Item of Equipment pursuant to the terms of the Lease.
“ Participation Agreement ” means the agreement in the form of Appendix 5.
“ Past Due Rate ” means the lesser of (i) the rate per annum equal to LIBOR plus four hundred (400) basis points, and (ii) the maximum rate permitted by applicable Law.
“ Permitted Liens ” means those Liens expressly permitted pursuant to Section 17.7 hereof.
“ Permitted Sublease ” means any sublease of the Aircraft to a Permitted Sublessee permitted under the terms and subject to the conditions of this Lease.
“ Permitted Sublessee ” means a Person:
(a) which is a commercial passenger air carrier that holds the requisite licenses and approvals for the maintenance and operation of the Aircraft; and
(b) with respect to which, at the time such Person becomes a Permitted Sublessee pursuant to the terms and conditions of this Lease and for the term of any Permitted Sublease to which such Permitted Sublessee is a party, no proceeding is pending or shall be instituted in connection with any insolvency, bankruptcy, reorganisation, examinership, administration, liquidation, moratorium or other laws affecting the enforcement of creditors’ rights generally; and
(c) that is expressly consented to in writing by Lessor, which consent shall be in Lessor’s sole discretion, acting reasonably.

	  	App 1-10	  	APPENDIX 1
DEFINITIONS	

“ Person ” means an individual, general partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or limited partnership, Governmental Authority or other entity of whatever nature.
“ Redelivery Location ” means such airport in the continental United States of America as specified in writing by Lessor to Lessee no less than ten (10) Business Days prior to the Scheduled Termination Date, or such other location as may be agreed in writing by Lessor and Lessee prior to the Scheduled Termination Date for Return of the Aircraft.
“ Reference Rate ” means the relevant “Treasury Rate” which is the rate per annum equal to the yield for each of the U.S. Treasury Securities that matures nearest to the fifth (5 th ) anniversary of the determined Delivery Date, as reported for the Reuters Page 5 closing information shown on the following Business Day on Page 233 of the information ordinarily provided by Reuters America, or if such report or screen is unavailable, in The Wall Street Journal under the heading “Treasury Bonds, Notes & Bills” (and the subheading of “Ask Yld.” under “Govt. Bonds & Notes”).
“ Register ” means the registry of aircraft which is maintained in the State of Registration by the Aeronautics Authority having authority with respect to the registration of the Aircraft.
“ Reimbursable Event ” means, subject to the provisions and exclusions of Appendix 2D, the completion by Lessee during the Lease Term of a Maintenance Check or the replacement of any Engine Life Limited Parts.
“ Reimbursable Expenses ” means, as the context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12 Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses, Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such terms are defined in Appendix 2D.
“ Related Lease(s) ” means any and all leases of aircraft between Lessor or any Affiliate of Lessor, or trustee on behalf of Lessor or any Affiliate of Lessor, as lessor, and Lessee or any Affiliate of Lessee, as lessee.
“ Related Lease Event of Default ” means, in relation to any Related Lease, any breach or default of Lessee’s obligations thereunder which constitute an “event of default” or similar event however termed thereunder under which the party to whom such obligations are owing would have the right to exercise remedies including the termination or cancellation of the Related Lease.
“ Related Obligations ” means the obligations and liabilities now existing or hereafter arising of Lessee of any Affiliate of Lessee under any Related Lease.
“ Rent ” means Basic Rent and Supplemental Rent payable pursuant to this Lease
“ Rent Payment Date ” means the first day of each Rent Period of the Lease Term and which is the date on which payment of Basic Rent is due and payable.
“ Rent Period ” means the period commencing on and including the Delivery Date and ending on and including the last day of the calendar month in which the Delivery Date occurs and each of the consecutive calendar monthly periods thereafter throughout the Lease Term, provided that the final Rent Period of the Lease Term may consist of less than a calendar month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a calendar month.

	  	App 1-11	  	APPENDIX 1
DEFINITIONS	

“ Required Approval ” means evidence documenting approval by the respective Airframe or Engine Manufacturer (as applicable) and the Certificating Authority with respect to (i) any repair to the Airframe or any Engine, where the accomplishment of such repair does not conform with the repair procedures set forth in the Manufacturer’s Repair Manual or an EASA approved service bulletin relevant to such repair and (ii) any alteration or modification of the Airframe or any Engine.
“ Return ” means the return of the Aircraft and all Items of Equipment to Lessor pursuant to and in accordance with Article 22 and the other provisions of this Lease.
“ Return Acceptance Certificate ” means the certificate substantially in the form of Appendix 7 to be executed and delivered by Lessor and Lessee at Return.
“ 6 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check and (b) each Task that has an initial interval of six (6) years and/or a repetitive interval of six (6) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 6 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2D, Section 1.A(i).
“ Scheduled Delivery Date ” means the delivery month identified in Appendix 2A and, when known following receipt of notice by Lessor from the Seller, the day during such month (or such other date) Lessor expects to take delivery of the Aircraft from Seller, as the same shall be notified by Lessor to Lessee in writing promptly following Lessor’s receipt of such notice from Seller.
“ Scheduled Termination Date ” means the day on which the Lease Term is scheduled to expire (as provided in Appendix 2A), and which may be independent from the Termination Date as provided in the definition of such term.
“ Security Agent ” means such Person, if any, as notified by Lessor or Owner to Lessee, who will act as security agent for and on behalf of any Financing Party in relation to any financing arrangements to be entered into in respect of the Aircraft.
“ Security Deposit ” means (i) the Cash Security Deposit and the Credit Security Deposit in the amounts in Section 2 of Appendix 2B; including (ii) any amounts paid to Lessor pursuant to Sections 4.4 and 4.6(c); less (iii) any amounts applied or utilised by Lessor in accordance with the provisions of Sections 4.3 and 4.6(b), whether the same are paid in cash or in the form of a Security Letter of Credit.
“ Security Letter of Credit ” means an unconditional and irrevocable letter of credit, satisfactory to Lessor in form and substance, in the amount of the Security Deposit and otherwise in compliance with the requirements of Section 4.6 and (i) drawn upon an issuer located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland or (ii) issued by a bank outside of Ireland and confirmed by Allied Irish Banks, AIB International Centre, IFSC, Dublin 1, Ireland (SWIFT: AIBKIE2D) or such other bank located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland, each issuing and confirming bank being acceptable to Lessor and having a credit rating not lower than A from Standard and Poor’s or A2 from Moody’s.
“ Security Trustee ” means such Person, as notified by Lessor or Owner to Lessee, who will act as security trustee for and on behalf of any Financing Parties in relation to any security to be granted over the Aircraft as a result of a financing thereof.

	  	App 1-12	  	APPENDIX 1
DEFINITIONS	

“ Seller ” means Airbus S.A.S., or an Affiliate that will sell and deliver title to the Aircraft to Lessor on the Delivery Date.
“ Standard Specification ” means the A319-100 Standard Specification J.000.01000 Issue 6 dated 30 November 2007.
“ State of Organisation ” means the country and/or state under which Laws a Person is organised and existing, or, with respect to Lessor and Lessee, the country and/or state identified on the first page of this Lease.
“ State of Registration ” means the United Mexican States.
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent and payments in respect of Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under this Lease, including without limitation, and to the extent permitted by applicable Law, interest at the Past Due Rate calculated on any: (i) part of any installment of Basic Rent not paid on the Rent Payment Date for the period the same remains unpaid and (ii) Supplemental Rent or Maintenance Reserves not paid when due hereunder, until the same is paid.
“ 12 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check, (b) each Task that has a repetitive interval of six (6) years as set forth in the MPD, and (c) each Task that has an initial interval of twelve (12) years and/or a repetitive interval of twelve (12) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 12 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2D, Section I.B(i).
“ Task(s) ” means each inspection or other requirement set forth in the MPD that (a) has a repetitive interval designated by a letter or combination of a letter and a number, or (b) is based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of calendar days, months and/or years.
“ Tax(es) ” means any taxes (including, without limitation, sales, use, business, gross or net income, personal property, license, documentation, transfer, import, export, fuel, leasing, occupational, value added, excess profits, excise, gross or net receipts, franchise, stamp, environmental and other taxes), levies, imposts, withholdings, fees, assessments, duties and other charges of any nature, and any penalties, fines, additions to tax, interest or other charges related thereto which are imposed by any Governmental Authority or other taxing authority in any jurisdiction or by any international or multinational taxing or regulatory authority.
“ Termination Date ” means:
 
 	(i)	the Scheduled Termination Date if Return is completed on the Scheduled Termination Date; or	
 
 	(ii)	the date, if other than the Scheduled Termination Date, of Lessee’s Return of the Aircraft with all Obligations then due for performance having been performed; or	
 
 	(iii)	the date on which this Lease terminates in accordance with Section 20.3 following the occurrence of an Event of Loss with respect to the Aircraft or the Airframe following Delivery; or	

	  	App 1-13	  	APPENDIX 1
DEFINITIONS	

(iv) the date of termination of this Lease following the occurrence of an Illegality Event in accordance with Section 27.1(b); or
(v) the date on which this Lease is cancelled or terminated pursuant to Article 24 following the occurrence of an Event of Default.
“ Time Controlled Part ” means any Item of Equipment, including any Life Limited Part, having a Task applicable to it based upon a predetermined time limit or interval in accordance with the MPD to the extent such Task requires such Item of Equipment to be discarded, overhauled, or re-certified upon reaching such time limit or interval.
“ U.S. ” or “ U.S.A. ” means the United States of America
“ VAT ” means any Tax that is, or is in the nature of, a value added, turnover, sales, use, rental, leasing, services, goods and services, consumption, or transaction privilege Tax.
“ Watch Item ” means any maintenance requirement or inspection of the Aircraft or applicable Item of Equipment following the Termination Date that results from a defect with respect to the Aircraft that was discovered during the Lease Term (and is not due to a routine inspection requirement for all aircraft of the same model as the Aircraft resulting from an Airworthiness Directive, service bulletin or Manufacturer’s recommendations) and is in addition to the maintenance and inspection requirements set forth in the MPD, and where such additional inspection shall be required prior to the later of the accumulation of (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles, or (iii) twenty (20) months, as applicable.
“ Wet Lease(s) ” means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee shall at all times maintain full operational, technical and navigational control and maintenance oversight of the Aircraft, (ii) the Aircraft shall be operated solely by crews employed or contracted by Lessee possessing all current appropriate Aeronautics Authority certificates and licenses (it is understood that cabin attendants need not be regular employees of Lessee), (iii) the insurance required to be maintained by Lessee under the Lease shall remain in full force and effect ( provided that such insurance with respect to legal liabilities for passenger and cargo may be on a contingent basis for the duration of any such arrangement as long as such third party under such arrangement maintains primary coverage for such insurance in favour of Lessor, Lessee, and any Indemnitee and Additional Insureds in accordance and strict compliance with the terms, conditions, and requirements of this Lease, evidence of which in the form of a certificate of insurance and letter of undertaking from the brokers of such third party under such arrangement shall be provided to Lessor prior to the commencement of such arrangement), (iv) the Aircraft shall be used and maintained by Lessee as otherwise required by and in accordance with the terms and conditions of this Lease.

	  	App 1-14	  	APPENDIX 1
DEFINITIONS	

Appendix 2
to Aircraft Lease Agreement
COMMERCIAL TERMS
[NOTE: THE TERMS OF THIS APPENDIX 2 ARE CONFIDENTIAL AND CONTAIN
COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 2 MUST BE REMOVED
FROM ANY PUBLIC FILING OF THIS LEASE]
Contents:
Appendix 2A             Lease Term
Appendix 2B             Rent, Security Deposit, Insurance and other Financial Matters
Appendix 2C             Escalation
Appendix 2D             Maintenance Reserves
Appendix 2E             Return Conditions

	  	App 2-1	  	APPENDIX 2C
COMMERCIAL TERMS	

Appendix 2A
to Aircraft Lease Agreement
LEASE TERM
1.         Scheduled Delivery Date is August 2010.
2.         Outside Delivery Date is the date that is seven (7) months after the last day of the calendar month in which the Scheduled Delivery Date falls.
3.          Lease Term
The Lease Term shall commence on the Delivery Date and shall end on, but not later than, 11:59 P.M. New York, New York time on the day immediately preceding the sixth 6 th anniversary of the Delivery Date, but which shall in any event end on the Termination Date.
 
4.	Lease Term Extension Option	
(a) Provided no Default or Event of Default shall have occurred and be continuing, Lessee may extend the Lease Term for up to forty (40) additional months (“ Lease Term Extension ”) on the same terms and conditions (except with respect to the amount of Basic Rent as more fully set forth in paragraph (b) below), provided that Lessee shall provide Lessor with irrevocable written notice of its intention to exercise such extension option, as well as the proposed term of such extension, on or before the last day of the sixty-sixth (66 th ) Rent Period.
(b) Basic Rent for the Lease Term Extension shall be in an amount reflecting the fair market rate at the time of extension as agreed between Lessor and Lessee prior to but not later than the time that Lessee exercises its option to extend the Lease Term of the Lease as set forth in paragraph (a) above. If Lessor and Lessee are unable to agree to an amount of Basic Rent for the Lease Term Extension, then Lessee’s option to extend the Lease Term shall lapse.

	  	App 2-2	  	APPENDIX 2A
LEASE TERM	

Appendix 2B
to Aircraft Lease Agreement
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS
 
1.	Calculation of Rent	
 
 	1.1	Basic Rent.	
(a) Basic Rent for the first ***** (or for the first ***** Rent Periods if the Delivery Date is on a day other than the first day of a calendar month) of the Lease Term shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars; and
(b) Basic Rent for the remainder of the Lease Term (but not including any Lease Term Extension period) shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars.
Notwithstanding the provisions of subsection (a) above, in the event Delivery occurs on or prior to the 10 th day of August 2010, in lieu of paying the Basic Rent amount set forth in said subsection (a), Basic Rent for the first (1 st ) Rent Period of the Lease Term shall be in the amount of *****, which amount is stated in Base Year Dollars, and Basic Rent for all other Rent Periods contemplated by subsection (a) shall be in the amount of ***** per Rent Period, which amount is stated in Base Year Dollars.
1.2 Adjustment of Basic Rent for Economic Fluctuations and Escalation. The amount of Basic Rent set forth in Section 1.1 above shall be adjusted as of the Delivery Date by:
(a)***** for each ***** of variation between the Delivery Reference Rate and the Assumed Reference Rate of *****; and
(b) Escalation.
1.3 Adjustment of Basic Rent for Agreed Options and BFE. The amount of Basic Rent determined in accordance with Section 1.2 of this Appendix 2B shall be further increased on the Delivery Date to account for:
(a) the cost to Lessor in Base Year Dollars charged by the Seller to incorporate any Agreed Options in excess of *****; and
(b) the Manufacturer’s catalog list price for (i) any BFE in excess of *****, and (ii) any and all charges including markups, handling, shipping and storage charges in connections therewith.
Any excess amounts from the preceding clause (a) shall be adjusted for Escalation and the resulting amount shall be added to any excess amounts from the preceding clause (b) and the resulting aggregated
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-3	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

sum shall be amortised over the Lease Term by multiplying the total excess amount by one point eight percent (1.8% or .0108) and payable in consecutive monthly installments on each Rent Payment Date, which installments (each of which, a “ Customisation Options Payment ”) shall constitute an increase in and shall be included in Basic Rent.
 
2.	Security Deposit – Timing of Payments and Amounts.	
2.1 prior to the execution of this Lease, Lessee has paid Lessor the amount of Three Hundred Thousand Dollars ($300,000);
2.2 on or before 04 January 2010, Lessee shall deposit with Lessor an additional amount of Three Hundred Thousand Dollars $300,000);
2.3 one (1) Business Day prior to the Scheduled Delivery Date, Lessee shall deposit with Lessor any additional amounts necessary such that the total amount deposited in accordance with this Section 2 constitutes the equivalent of three (3) installments of Basic Rent (as that amount is calculated as of the Delivery Date in accordance with Section 1 of this Appendix 2B).
 
3.	Account	
All payments made under this Lease or any other Operative Document shall be made to the account set forth below at JP Morgan Bank (Ireland) plc, JP Morgan House, International Financial Service Centre, Dublin 1, Ireland by wire transfer of immediately available funds to its correspondent bank:
JPMorgan Chase Bank
New York, New York
SWIFT: CHASUS33
For credit to:
JP Morgan Bank (Ireland) plc
SWIFT:                            CHASIE2X
Account Number:            323141889
IBAN Number: IE31CHAS93090379702501
For further credit to:
Account Name:                 CIT Aerospace International
Account Number:             79702501
Reference:                          Volaris; A319-100 / August 2010 (2 of 2)
 
4. 	Insurances	
4.1 Liability Insurance Coverage Amount : Seven Hundred Fifty Million Dollars ($750,000,000); Five Hundred Million Dollars ($500,000,000) in respect of war, unrest and allied perils liability coverage.

	  	App 2-4	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

4.2 Agreed Value : Forty-Six Million Dollars ($46,000,000) plus Escalation from January 2008 until the Delivery Date, which shall be the Agreed Value of the Aircraft for the Lease Term and which amount shall be reduced by two percent (2%) at each anniversary of the Delivery Date during the Lease Term.
4.3 Engine Agreed Value (each Engine) : Nine Million One Hundred Thousand Dollars ($9,100,000) plus Escalation from January 2008 until the Delivery Date, which amount shall be set forth in the Acceptance Certificate and which shall be the Engine Agreed Value of each Engine for the Lease Term.
4.4 Aircraft Hull Dedicate Amount : Two Hundred Fifty Thousand Dollars ($250,000) per occurrence.
 
5.	Legend	
“LEASED FROM CIT AEROSPACE INTERNATIONAL, DUBLIN, IRELAND, AS OWNER AND LESSOR”.
 
6.	Notices	

If to Lessee:	  	If to Lessor:	
		
Concesionaria Vuela Compañía de	  	CIT Aerospace International	
Aviación, S.A. de C.V.	  	3 George’s Dock	
Prolongación Paseo de la Reforma No. 490	  	IFSC	
Piso 1	  	Dublin 1, Ireland	
Colonia Santa Fe Peña Blanca	  	Attention: Chief Counsel	
C.P. 01210	  	Fax: +353 (1) 656 1001	
México, D.F.	  		
	  	with a copy to:	
Attention: Director Jurídico	  		
Fax: +52 (55) 5211 9613	  	CIT Aerospace	
	  	11 West 42 nd Street, 12 th Floor	
	  	New York, New York 10036, USA	
	  	Attention: Chief Counsel – Transportation	
	  	Finance	
	  	Fax: +1 (212) 461 5402	
		
	  	and, with respect to any insurance notification,
with a copy to:	
		
	  	CIT Aerospace	
	  	11 West 42 nd Street, 12 th Floor	
	  	New York, New York 10036, USA	
	  	Insurance Administrator – Operations Dept.	
	  	Fax: +1 (877) 525 9183	

	  	App 2-5	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

Appendix 2C
to Aircraft Lease Agreement
ESCALATION
1.1 Escalation. All amounts due under the Lease which are stated in Base Year Dollars, including Basic Rent, Agreed Options and Budget, and Agreed Value, are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions hereof.
1.2 Base Period. Basic Rent, Agreed Options and Budget, and Agreed Value have been established in accordance with the average economic conditions prevailing in December 2006, January 2007 and February 2007 and corresponding to a theoretical delivery in January 2008 as defined by “ECIb” and “ICb” index values indicated hereafter. “ECIb” and “ICb” index values set forth below shall not be subject to any revision.
1.3 Indexes.
 
 	(a)	Labor Index : “Employment Cost Index for Workers in Aerospace manufacturing” hereinafter referred to as “ECI336411W”, quarterly published by the US Department of Labor, Bureau of Labor Statistics, in “NEWS”, and found in: Table 9, “WAGES and SALARIES (not seasonally adjusted): Employment Cost Indexes for Wages and Salaries for private industry workers by industry and occupational group”, or such other name that may be from time to time used for the publication title and/or table, (Aircraft manufacturing, NAICS Code 336411, base month and year December 2005 = 100).	
The quarterly value released for a certain month (March, June, September and December) shall be the one deemed to apply for the two preceding months.
Index code for access on the Web site of the US Bureau of Labor Statistics: ciu2023211000000i.
 
 	(b)	Material Index : “Industrial commodities” (hereinafter referred to as “IC”) as published in “Producer Price Indexes” (Table 6. Producer price indexes and percent changes for commodity groupings and individual items). (Base Year 1982 = 100).	
Index code for access on the Web site of the US Bureau of Labor Statistics: wpu03thru15.

	  	App 2-6	  	APPENDIX 2C
ESCALATION	

1.4 Revision Formula.
*****        =        *****
Where :
*****        =        *****
*****        =        *****
*****        =        *****
*****        =        *****
                             *****
*****        =        *****
*****        =        *****
*****        =        *****
*****        =        *****
1.5 General Provisions.
 
 	(a)	Roundings.	
 
 	(i)	The Labor Index average and the Material Index average shall be computed to the first decimal. If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
 	(ii)	Each quotient shall be rounded to the nearest ten thousandth (4 decimals) If the next succeeding place is five (5) or more, the preceding decimal place shall be raised to the next higher figure.	
 
 	(iii)	The final factor shall be rounded to the nearest ten thousandth (4 decimals).	
 
 	(iv)	The final Basic Rent, Agreed Options and Budget, and Agreed Value shall be rounded to the nearest whole number (0.5 or more rounded to 1).	
 
 	(b)	Substitution of Indexes. In the event that:	
 
 	(i)	the U.S. Department of Labor substantially revises the methodology of calculation of any of the indexes referred to above, or	
 
 	(ii)	the U.S. Department of Labor discontinues, either temporarily or permanently, any of the indexes referred to above, or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-7	  	APPENDIX 2C
ESCALATION	

 	(iii)	the data samples used to calculate any of the indexes referred to above are substantially changed, then Lessor shall select a substitute index; then a substitute index shall be used. Such substitute index shall reflect as closely as possible the actual variations of the wages or of the material costs, as the case may be, used in the calculation of the original index. As a result of this selection of a substitute index, Lessor shall make an appropriate adjustment to its price revision formula, allowing to combine the successive utilisation of the original index and of the substitute index.	
 
 	(c)	Final Index Values. The Index values as defined in clause 1.4 above shall be considered final and no further adjustment to Basic Rent, Agreed Options and Budget, or Agreed Value as adjusted to determine Adjusted Basic Rent, Agreed Options and Budget, and Agreed Value at Delivery will be made after Delivery for any subsequent changes in the published Index values.	

	  	App 2-8	  	APPENDIX 2C
ESCALATION	

Appendix 2D
to Aircraft Lease Agreement
MAINTENANCE RESERVES
 
1.	Maintenance Reserves - Airframe	
 
 	A.	6 Year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ 6 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 6 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 6 Year HMV Check Airframe Reserve as of the date of commencement of such 6 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 6 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 6 Year HMV Check, the Tasks accomplished during such 6 Year HMV Check shall have included, as a minimum, (a) each six (6) year or seventy-two (72) month Task, (b) each Task that has an initial or repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 6 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
 
 	B.	12 year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ 12 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 12 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 12 Year HMV Check Airframe Reserve as of the date of commencement of such 12 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 12 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 12 Year HMV Check, the Tasks accomplished during such 12 Year HMV Check shall have included, as a minimum, (a) each twelve (12) year or one hundred forty-four (144) month Task, (b) each Task that has a repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred (4,500) Cycles or less, and (iv) three
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-9	  	APPENDIX 2D
MAINTENANCE RESERVES	

thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 12 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
 
2.	Maintenance Reserves - Engines	
 
 	A.	Engine Restoration Reserves	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor the amount determined under clause (ii) below multiplied by the number of Flight Hours of operation of each Engine during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as, with respect to each Engine, an “ Engine Restoration Reserve ” and collectively, the “ Engine Restoration Reserves ”). A separate Engine Restoration Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) The amount used to calculate Lessee’s payment due under clause (i) above shall be determined on a monthly basis, and:
(a) for all Flight Hours an Engine is operated prior to the removal of such Engine for the first Engine Restoration of such Engine, shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Rent Period for which such payment is due:

Flight Hour to
Cycle Ratio
(    :1)	  	
Flight Hour
Reserve Rate	
4.0	  	*****	
3.9	  	*****	
3.8	  	*****	
3.7	  	*****	
3.6	  	*****	
3.5	  	*****	
		
3.4	  	*****	
3.3	  	*****	
3.2	  	*****	
3.1	  	*****	
3.0	  	*****	
		
2.9	  	*****	
2.8	  	*****	
2.7	  	*****	
2.6	  	*****	
2.5	  	*****	
		
2.4	  	*****	
2.3	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-10	  	APPENDIX 2D
MAINTENANCE RESERVES	

			
Flight Hour to
Cycle Ratio
(    :1)	  	
Flight Hour
Reserve Rate	
2.2	  	*****	
2.1	  	*****	
2.0	  	*****	
		
1.9	  	*****	
1.8	  	*****	
1.7	  	*****	
1.6	  	*****	
1.5	  	*****	
		
1.4	  	*****	
1.3	  	*****	
1.2	  	*****	
1.1	  	*****	
1.0	  	*****	
		
0.9	  	*****	
0.8	  	*****	
0.7	  	*****	
0.6	  	*****	
0.5	  	*****	
(b) for all Flight Hours an Engine is operated following the first Engine Restoration of such Engine, shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Rent Period for which such payment is due:

Flight Hour to
Cycle Ratio
(    :1)	  	
Flight Hour
Reserve Rate	
4.0	  	*****	
3.9	  	*****	
3.8	  	*****	
3.7	  	*****	
3.6	  	*****	
3.5	  	*****	
		
3.4	  	*****	
3.3	  	*****	
3.2	  	*****	
3.1	  	*****	
3.0	  	*****	
		
2.9	  	*****	
2.8	  	*****	
2.7	  	*****	
2.6	  	*****	
2.5	  	*****	
		
2.4	  	*****	
2.3	  	*****	
2.2	  	*****	
2.1	  	*****	
2.0	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-11	  	APPENDIX 2D
MAINTENANCE RESERVES	

			
Flight Hour to
Cycle Ratio
(    :1)	  	
Flight Hour
Reserve Rate	
1.9	  	*****	
1.8	  	*****	
1.7	  	*****	
1.6	  	*****	
1.5	  	*****	
		
1.4	  	*****	
1.3	  	*****	
1.2	  	*****	
1.1	  	*****	
1.0	  	*****	
		
0.9	  	*****	
0.8	  	*****	
0.7	  	*****	
0.6	  	*****	
0.5	  	*****	
Notwithstanding the foregoing, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the rates set forth in the table in subsection (b) above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the rates set forth in the table in subsection (b) above should be increased or decreased based upon the then current cost of such Engine Restoration.
(iii) Subject to the conditions and exclusions contained in this Appendix 2D for the first Engine Restoration to occur during the Lease Term, (x) if Lessee provides an invoice for the amount of such Engine Restoration from the Approved Maintenance Organisation accomplishing such, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Restoration Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an Engine Restoration on an Engine during the Lease Term for which such Engine Restoration Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Restoration Reimbursable Expenses ”) or (y) if Lessee cannot provide such an invoice then Lessor will reimburse Lessee in an amount equal to ***** of the amount then held by Lessor in the respective Engine Restoration Reserve for such Engine as of the date of commencement of such Engine Restoration, and for each subsequent Engine Restoration to occur during the Lease Term, if Lessee provided an invoice for the first Engine Restoration pursuant to sub-clause (x) above then any reimbursement from the Engine Restoration Reserve shall be in accordance with such sub-clause (x), and if Lessee was not able to provide an invoice for the first Engine Restoration then any reimbursement shall be subject to sub-clause (x) above if Lessee is able to obtain an invoice for such subsequent Engine Restoration, or subject to sub-clause (y) above (but at the rate of ***** of the amount held in the Engine Restoration Reserve for such Engine as the date of commencement of such Engine Restoration) if Lessee is not able to obtain an invoice for such subsequent Engine Restoration, provided that at the time of completion of such Engine Restoration, as a minimum:
(a) the Engine was restored to a condition having an expected minimum of sixteen thousand five hundred (16,500) Flight Hours without any requirement for a shop visit prior to the expiration of such time; and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-12	  	APPENDIX 2D
MAINTENANCE RESERVES	

(b) each Life Limited Part installed in the Engine had no less than ten thousand (10,000) Cycles (and equivalent calendar time, if applicable, with calendar time determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer) remaining to its life limit, provided, however, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the minimum number of Cycles required for each Life Limited Part as set forth above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the minimum number of Cycles set forth above should be increased or decreased based upon the then current information available to both Lessee and Lessor as to the average Flight Hour to Cycle ratio operated by all similar model aircraft worldwide; and
(c) the Engine was in compliance with all AD’s to the extent that, by the terms of each such AD, compliance was required within sixteen thousand five hundred (16,500) Flight Hours, or ten thousand (10,000) Cycles, or equivalent calendar time, as applicable (with calendar time to be determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer).
(iv) To the extent applicable subject to sub-clause (iii) above, Engine Restoration Reimbursable Expenses shall only include Lessee’s Actual Cost incurred in connection with Engine disassembly, repair, Overhaul, assembly and any required testing accomplished in connection with the accomplishment of such Engine Restoration.
(v) Engine Restoration Reimbursable Expenses shall not include the cost of replacement Life Limited Parts installed in connection with the accomplishment of such Engine Restoration.
(vi) Notwithstanding the foregoing, Lessor agrees that upon Lessee’s request, Lessee may incorporate the Engines into a Flight Hour Agreement (an “ FHA ”) with the Engine Manufacturer in lieu of paying the Engine Restoration Reserves to Lessor as contemplated in this Section 2.A, so long as such FHA is in form and substance acceptable to Lessor. For the avoidance of doubt, Lessor agrees that to the extent Lessee enters into an FHA but continues to pay the Engine Restoration Reserves to Lessor as contemplated in this Section 2.A, then Lessor need not approve the form and substance of such FHA.
 
 	B.	Engine Life Limited Parts Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** multiplied by the number of Cycles of operation of each Engine during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ Engine Life Limited Parts Reserve ”). A separate Engine Life Limited Parts Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Life Limited Parts Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the purchase by Lessee of any Engine Life Limited Part during the Lease Term that is installed in an Engine for which such Engine Life Limited Parts Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Life Limited Parts Reimbursable Expenses ”).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-13	  	APPENDIX 2D
MAINTENANCE RESERVES	

3.	Maintenance Reserves - Other Items	
 
 	A.	Landing Gear Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ Landing Gear Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the Landing Gear Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of a Landing Gear Overhaul on a Landing Gear during the Lease Term (all such qualifying expenses are hereinafter referred to as “ Landing Gear Overhaul Reimbursable Expenses ”), provided that at the time of completion of such Landing Gear Overhaul of any Landing Gear, such Landing Gear shall have no existing condition that would require the removal of such Landing Gear prior to completing the full Overhaul interval as set forth in the MPD.
(iii) In no event shall any reimbursement for a Landing Gear Overhaul of any individual Landing Gear exceed an amount that is in excess of a percentage of the total amount, then currently held by Lessor in the Landing Gear Overhaul Reserve, equal to ***** for each of the left and right main Landing Gear, and ***** for the nose Landing Gear.
 
 	B.	APU Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay Lessor (x) ***** with respect to an APU manufactured by Honeywell or, if applicable, (y) ***** with respect to an APU manufactured by APIC, multiplied by the number of APU Hours of operation of the APU during each Rent Period (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2D, is hereinafter referred to as the “ APU Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2D, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the APU Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an APU Overhaul on the APU during the Lease Term (all such qualifying expenses are hereinafter referred to as “ APU Overhaul Reimbursable Expenses ”), provided that at the time of completion of such APU Overhaul, as a minimum:
(a) the APU was restored to a condition such that it can be reasonably expected to operate for a minimum of five thousand (5,000) APU Hours without any requirement for a shop visit prior to the expiration of such time;
(b) each Life Limited Part installed in the APU had no less than five thousand (5,000) APU Cycles remaining to its life limit; and
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-14	  	APPENDIX 2D
MAINTENANCE RESERVES	

the APU was in compliance with all AD’s to the extent that, by the terms of each AD, compliance was required within any of (i) five thousand APU Hours, or (ii) five thousand (5,000) APU Cycles, or (iii) twenty-four (24) months, as applicable.
 
4.	Maintenance Reserve Claims	
A. Prior to the accomplishment of any Maintenance Check for which Lessee intends to make a Maintenance Reserve Claim, Lessee shall provide Lessor with the workscope and, to the extent available from the Approved Maintenance Provider, the estimated cost of accomplishing such Maintenance Check, for approval by Lessor as to whether or not such workscope complies with the requirements for reimbursement as set forth in this Appendix 2D herein.
B. Following completion of such Maintenance Check in accordance with the approved workscope, Lessee may present its Maintenance Reserve Claim to Lessor for payment by delivery of an invoice for the amount of Reimbursable Expenses claimed by Lessee together with documentation satisfactory to Lessor evidencing completion of such Maintenance Check in accordance with the approved workscope and the cost associated therewith.
C. Lessor shall reimburse Lessee by paying ( x ) to Lessee (provided Lessee has delivered to Lessor evidence of payment by Lessee for the amount of such Reimbursable Expenses) or ( y ) upon receipt of written instruction from Lessee, to Lessee’s maintenance provider performing such Maintenance Check (provided Lessor has received evidence of payment by Lessee for the amount of all estimated expenses that exceed the amount to be paid by Lessor as set forth herein). Such amount shall equal the lesser of (i) the amount of such Reimbursable Expenses for such Maintenance Check, or (ii) the amount of the respective Maintenance Reserve for such Reimbursable Event.
D. In any case in which the amount paid to Lessee by Lessor hereunder is not sufficient to pay the cost of such Maintenance Check, Lessee shall be obligated to and shall pay directly any such shortfall, without further contribution from Lessor, and Lessee shall not subsequently be permitted to make a Maintenance Reserve Claim for such amounts under this Lease.
 
5.	Exclusions from Reimbursable Expense	
The following shall be and are specifically excluded from Reimbursable Expenses:
(i) with respect to all Maintenance Checks, expenses incurred in connection with or as a result of (A) an accident, faulty maintenance or installation, incident, improper operations, abuse, neglect, or misuse, (B) any maintenance and material required for or in connection with elective Parts replacement, AD compliance and Aeronautics Authority and/or Certificating Authority regulation compliance, (C) any maintenance and material covered by, or reimbursable by, a claim under any Manufacturer’s warranties or by insurance (with deductibles being treated as reimbursable by insurance for purposes of this exclusion), (D) modifications (including interior reconfiguration), (E) the accomplishment of service bulletins, (F) any deferred maintenance discrepancies (G) any maintenance and material required to correct or repair damage caused by the ingestion by an Engine or the APU of a foreign object external to such Engine or APU (“ FOD ”), (H) ( x ) the cost of shipping any Engine, Engine LLP, Landing Gear or the APU, or ( y ) ferrying the Aircraft to the maintenance facility performing such Maintenance Check, (I) any fees or expenses incurred by representatives of Lessee, (J) handling charges or other mark-ups by Lessee, (K) removal and installation charges with respect to (1) any Engine (for Engine Restoration or Engine LLP replacement) or (2) any Landing Gear or APU for Overhaul, (L) any maintenance or replacement of Parts (when such maintenance or replacement is as a result of

	  	App 2-15	  	APPENDIX 2D
MAINTENANCE RESERVES	

(aa) Time Controlled Part requirements of the Maintenance Program or (bb) a routine requirement of any task card), provided, however, Reimbursable Expenses shall include the cost to repair or replace any Part that requires maintenance or replacement solely as a result of failing a routine requirement for an operational or functional test of any Task while installed on the Aircraft, and (M) Taxes paid or due and payable on or in connection with the accomplishment of the Maintenance Check and any labor and materials supplied thereunder;
(ii) with respect to an Engine Restoration, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for the removal and installation of quick engine change components and Parts (“ QEC ”), except when such QEC is removed or installed at the maintenance facility of the Approved Maintenance Organisation accomplishing such Engine Restoration, (B) replacement, repair or Overhaul of external engine Parts, including QEC, (C) rental of tooling or equipment for the removal, installation or shipping of the Engine and (D) charges incurred for the use of a temporary replacement engine;
(iii) with respect to the replacement of Engine LLPs, in addition to the exclusions listed in clause (i) above, (A) an amount equal to the product of ( x ) the Manufacturer’s then current catalogue price of the replacement LLP which is the subject of Lessee’s Maintenance Reserve Claim divided by its Cycle life limit, multiplied by ( y ) the Cycles remaining to its Cycle life limit on the LLP replaced, and (B) any labor or additional materials costs associated with the replacement of any such Engine LLP;
(iv) with respect to any Landing Gear Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) the repair, replacement or Overhaul of rotable parts such as wheels, tires, brakes, transducers, switch assemblies, side struts, braces, and uplock and downlock mechanisms, (B) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation accomplishing such Landing Gear Overhaul), (C) replacement, repair or Overhaul of external Landing Gear Parts, (D) rental of tooling or equipment for the removal, installation and shipping of the Landing Gear and (E) charges incurred for the use of a temporary replacement landing gear; and
(v) with respect to an APU Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation in order to perform such APU Overhaul), (B) replacement, repair or Overhaul of external APU Parts, (C) rental of tooling or equipment for the removal, installation and shipping of the APU and (D) charges incurred for the use of a temporary replacement auxiliary power unit.
 
6.	Adjustment/Revision of Maintenance Reserves Rate	
A. Adjustment for Inflation . The Maintenance Reserves rates set forth in paragraphs 1, 2A and 3 above (inclusive of subsections and including the table appearing in Section 2A(ii)), shall be increased for inflation on 1 June of each calendar year, commencing on 1 June 2010, by a percentage amount equal to ***** by adding: ( x ) the product of the then current Maintenance Reserve rate multiplied by the value of *****, and ( y ) the then current Maintenance Reserve rate, as the same has been increased in accordance with this paragraph 6A.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2-16	  	APPENDIX 2D
MAINTENANCE RESERVES	

B. Revision of Engine LLP Parts Reserves Rate . The Engine Life Limited Parts Reserves rate set forth in paragraph 2B shall be revised on 1 June of each calendar year, commencing on 1 June 2010, so that it equals the sum of the then current cost per Cycle of each Engine Life Limited Part of each Engine. The cost per Cycle of each such Engine Life Limited Part shall be determined by dividing ( x ) the then current catalog list price of each Engine Life Limited Part for each Engine by ( y ) the Engine Manufacturer’s then published cyclic life for each respective Engine Life Limited Part.
 
7.	General	
A. All payments in respect of Maintenance Reserves that accrue on a monthly basis and for which the payment due is for less than a complete month shall be pro rated on a daily basis based on a month consisting of thirty (30) days.
B. In no event shall Lessor be obligated to reimburse or make any payment to Lessee under this Appendix 2D, whether due to a Maintenance Reserve Claim or otherwise, (i) if and for so long as a Default or Event of Default has occurred and is continuing or (ii) with respect to a Maintenance Reserve Claim which has not been made within the time limits specified in Section 13.4 of the Lease. Lessor shall not be obligated to cure any such Default or Event of Default by granting an offset to Lessee for any amounts that would be payable hereunder in the absence of such Default or Event of Default.
C. All Maintenance Reserves shall be managed, held, applied and reimbursed strictly in accordance with the provisions of this Lease, and any determinations and/or calculations made or to be made in respect of any Maintenance Reserve Claims shall be managed by personnel who are experienced and familiar with aircraft and operating leases of this type, and the payment of any Maintenance Reserve reimbursement amounts due and owing to Lessee under this Appendix 2D shall not be unreasonably withheld.
D. The disposition of all Maintenance Reserves following the occurrence of an Event of Loss of the Aircraft shall be made in accordance with the provisions of Section 20.3(b) of the Lease.
E. Each installment of Maintenance Reserves paid by Lessee shall accrue interest from the date of its receipt by Lessor. The rate at which interest shall accrue on the Maintenance Reserves from time to time shall be the “30 Day Dealer Commercial Paper Rate” as reported on Reuters Page 23. The rate of interest shall be initially determined as of the Delivery Date and shall be reset on each three (3) month anniversary of the Delivery Date thereafter during the Lease Term. Any interest earned on the Maintenance Reserves shall become part of the Maintenance Reserves, and shall be subject to the terms hereof applicable to Maintenance Reserves.

	  	App 2-17	  	APPENDIX 2D
MAINTENANCE RESERVES	

Appendix 2E
to Aircraft Lease Agreement
RETURN CONDITIONS
 
1.	GENERAL	
1.1 The Aircraft shall (i) be airworthy and have been maintained and operated in accordance with the Lease with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by Lessee and (ii) comply with the Airframe Manufacturer’s original type certificate specifications, as revised up to the Termination Date, subject to any modifications installed during the Lease Term in compliance with the terms of this Lease.
1.2 The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings, and any required placards pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be replaced if unreadable, missing or not in the English language. Placards that are not required pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be removed upon Lessor’s request.
1.3 Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment as were installed on the Aircraft on the Delivery Date or pursuant to Article 12 hereto, or were delivered by Lessor to Lessee pursuant to the terms of the Lease shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4 The Aircraft shall comply with all AD’s which by their terms require compliance (without application or utilisation of any alternate method of compliance) (i) on or before the date that is one hundred eighty (180) days after the Termination Date, and/or (ii) within one thousand eight hundred (1,800) Flight Hours of operation after the Termination Date, and (iii) within one thousand two hundred Cycles of operation after the Termination Date, notwithstanding any waiver, deviation or time extension obtained from the Aeronautics Authority, the Certificating Authority or any other aeronautics authority, or otherwise.
1.5 The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirements, Part M.
1.6 The Aircraft and each Item of Equipment shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.7 The Aircraft shall have no leakage of (x) fuel or water and (y) oil or hydraulic fluid to the extent such oil or hydraulic fluid leakage exceeds the Airframe Manufacturer’s allowable limits, and the fuselage shall be pressurised to inspect for pressurisation leaks in accordance with the pressurisation test procedures set forth in the Manufacturer’s Repair Manual. Lessee shall repair any such leaks discovered prior to redelivery of the Aircraft to Lessor.
1.8 The Aircraft and Engines shall be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance (A) on or before the date that is one hundred eighty (180) days after the Termination Date, and/or (B) within one thousand eight hundred (1,800) Flight Hours of operation after the

	  	App 2-18	  	APPENDIX 2E
RETURN CONDITONS	

Termination Date, and/or (C) within one thousand two hundred (1,200) Cycles after the Termination Date, and (iii) all other Manufacturer’s service bulletins issued at the time of return, to the same extent that Lessee has accomplished such service bulletins on similar model aircraft and engines of the same manufacture in Lessee’s fleet, without discrimination.
1.9 Lessee shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the Aeronautics Authority for certification of airworthiness for aircraft to be exported from the State of Registration) to a country advised by Lessor. At Lessor’s request, Lessee shall modify the Aircraft to comply with the requirements of the aeronautics authority of such country to which the Aircraft will be exported, provided, however, if such Lessor requested modifications are not also a requirement of the Certificating Authority and/or EASA, Lessor shall reimburse Lessee for Lessee’s Actual Cost incurred in performing such modifications.
1.10 All temporary repairs accomplished during the Lease Term, including repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair in accordance with the Airframe Manufacturer’s structural repair manual for the Aircraft) and those requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair and all external doublers (scab patches) installed during the Lease Term shall be replaced with flush repairs, all in accordance with ( x ) the Manufacturer’s Repair Manual, or ( y ) Required Approval, provided , however , such replacement of a doubler shall not be required where installation of such doubler is (i) the only approved repair in accordance with the Manufacturer’s Repair Manual, (ii) the result of a Manufacturer recommended service bulletin accomplishment, or (iii) where a flush repair cannot be accomplished due to inaccessibility of the area.
1.11 Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished to Lessee without charge and which have not been so installed together with appropriate instructions for installation provided with such kits.
1.12 The quantity of fuel on board the Aircraft at Return shall not be less than the quantity of fuel on board the Aircraft at Delivery.
1.13 On or prior to Return and on such later date as requested by Lessor, Lessee shall provide Lessor such excerpts from the Maintenance Program and/or general procedures manual as Lessor may reasonably request (i) in order to substantiate procedures followed by Lessee and/or documentation used by Lessee which are specific to the Maintenance Program, in connection with the Return of the Aircraft to Lessor, and (ii) to assist with the bridging of the Aircraft onto a maintenance program other than the Maintenance Program subsequent to the Return of the Aircraft to Lessor.
1.14 If the Manufacturer’s Repair Manuals for the Aircraft were customised for or by Lessee prior to Delivery or during the Lease Term, Lessee will, at Lessee’s cost and expense, cause the Airframe Manufacturer to restore the Manufacturer’s Repair Manuals, revised up to and including the most recent revisions issued by the Airframe Manufacturer, to Lessor’s customisation (or to be re-customised to such other customisation as timely requested by Lessor, with Lessor to pay any incremental increase over the cost to restore the Manufacturer’s Repair Manuals to Lessor’s customisation) on the basis of the Aircraft no longer being part of Lessee’s fleet of aircraft, and Lessee will return to Lessor with the Aircraft the Manufacturer’s Repair Manuals so revised and restored or re-customised (as the case may be). To the extent the same are not yet revised and restored as required herein on the Termination Date, until such time as Lessee complies with the requirements set forth herein, and without payment or compensation to Lessee, Lessee (x) hereby grants Lessor a perpetual, worldwide, non-exclusive, fully paid license to use Lessee’s customised Manufacturer’s Repair Manuals for itself and to further sub-license the same to any other Person as Lessor deems necessary and reasonable in the circumstances and (y) shall provide Lessor, or such other Person designated by Lessor, with all applicable revisions to such Manufacturer’s Repair Manuals whenever issued by the Manufacturer.

	  	App 2-19	  	APPENDIX 2E
RETURN CONDITONS	

2.	PAINT	
The Aircraft shall be prepared for repainting by stripping the paint (except for areas where stripping will cause damage, such areas to be sanded instead), and shall be repainted using a paint of a quality reasonably acceptable to Lessor, or as otherwise agreed by Lessor in writing, in a color scheme, including logo, as directed by Lessor, provided, however, (i) the Aircraft shall be painted white if Lessor is unable to supply the necessary patterns in sufficient time to permit completion of the painting of the color scheme and logo without causing a delay in the redelivery of the Aircraft and (ii) if painted in the color and logo as directed by Lessor, then Lessor shall reimburse Lessee for the incremental cost in excess of the cost Lessee would have incurred to paint the Aircraft in its own livery, and all such preparation and painting shall be in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant. All required placards and markings shall be in the English language and shall be replaced if not in English, or if deteriorated.
 
3.	AIRFRAME	
3.1 Immediately prior to Return, the Aircraft shall have completed ( x ) a C-Check, and will include the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) which will be due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) calendar months following the Scheduled Termination Date), (such check being hereinafter referred to as the “ Final Check ”). The Aircraft shall not have been operated in revenue service since completion of the Final Check. The Final Check shall be performed by an Approved Maintenance Organisation approved by Lessor. Lessee shall give Lessor not less than ten (10) Business Days’ prior written notice of the commencement date of such Final Check. The Aircraft shall be weighed during such Final Check.
3.2 Each Time Controlled Part (excluding Engine Life Limited Parts and Landing Gear (with respect to Overhaul), but including Time Controlled Parts installed on the Landing Gear) shall, as applicable, have a minimum time remaining to its next due Overhaul, replacement or other required maintenance, (i) the greater of fifty percent (50%) of its allowable Flight Hour interval, and six thousand (6,000) Flight Hours, (ii) the greater of fifty percent (50%) of its allowable Cycle interval and four thousand five hundred (4,500) Cycles and (iii) the greater of fifty percent (50%) of its allowable calendar time interval and twenty (20) calendar months in accordance with the interval for each such Part as specified in the MPD. With respect to any Time Controlled Part that has an interval in the MPD that is less than the respective intervals set forth in sub-clauses (i), (ii) and (iii) above, such Time Controlled Part shall have a minimum time remaining to its next Overhaul, replacement or other required maintenance that is equal to the full interval allowable pursuant to the MPD.
 
4.	INTERIOR	
4.1 The Aircraft shall be in the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) at Lessor’s option, (i) as when such Aircraft was originally delivered to Lessee hereunder, (ii) as subsequently provided or paid for by Lessor, or (iii) as otherwise set forth in this Lease or as otherwise agreed between the parties.

	  	App 2-20	  	APPENDIX 2E
RETURN CONDITONS	

4.2 Cockpit windows shall not have any crazing or delamination, nor shall the cockpit windows have any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.3 Passenger compartment windows shall have no visible crazing.
4.4 All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessee.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1 Prior to Return and following the redelivery flight for the Aircraft, Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessor’s representative or, at Lessor’s expense, an agency selected by Lessor. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessee’s expense.
5.2 (a) Each Engine shall (i) have accumulated no more than eight thousand (8,000) Flight Hours since its most recent Engine Restoration shop visit (or since new if an Engine Restoration has not previously been accomplished), and (ii) not have any existing condition which would require the removal of the Engine within four thousand (4,000) Flight Hours following Return.
      (b) Each Engine Life Limited Part shall have a minimum of eight thousand (8,000) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3 Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A full take-off power engine run-up (high power assurance test) shall be performed in the presence of Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees Celsius (30° C.). Lessee shall be responsible, at its expense, for correcting any deficiencies which exceed or are outside of the Airframe Manufacturer’s Repair Manual allowable limits for an installed engine.
5.4 The APU shall have been operated no more than two thousand (2,000) APU Hours since completion of its most recent Overhaul.
5.5 Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) twenty-four (24) months, and (ii) four thousand (4,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the earlier to occur of the Scheduled Termination Date or the Termination Date, based upon the landing gear overhaul interval set forth in the MPD.

	  	App 2-21	  	APPENDIX 2E
RETURN CONDITONS	

6.	INSPECTION	
6.1 Immediately prior to Return, Lessee shall perform a redelivery acceptance flight of the Aircraft with Lessor’s representatives on board (subject to any limitation imposed by either Lessee’s insurance or the Aeronautics Authority with respect to the number of Lessor’s representatives permitted to be on board during such redelivery acceptance flight), using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and Lessee. Upon request of Lessor, Lessee shall permit representatives of the next subsequent lessee or purchaser of the Aircraft to be on board during such redelivery acceptance flight as observers, with one such observer to be permitted to occupy the cockpit jump seat during the entire flight. Such redelivery acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessor shall ensure Lessee’s representative has observed each discrepancy found. Immediately following the redelivery acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits, Lessee shall correct such discrepancy. Lessee shall have no obligation to pay the cost of correcting any discrepancies discovered during such redelivery acceptance flight which were not acknowledged in writing by its representative. Lessee shall be responsible for all expenses associated with such flight and shall furnish the necessary permits, crews and fuel.
6.2 Lessor shall inspect the Aircraft, including the Aircraft Documents, (the “Final Inspection”) prior to the Termination Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include the opening or removal of panels as reasonably required by Lessor, and access to all compartments and bays. All discrepancies discovered during such Final Inspection (a) of the Aircraft that exceed the Manufacturer’s Repair Manual allowable limits, or that are not pursuant to the terms of this Lease, shall be permanently repaired by Lessee and (b) of the Aircraft Documents, to the extent that such Aircraft Documents are missing or incomplete, shall be corrected at Lessee’s expense. Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by Lessor and Lessee but which shall be no later than thirty (30) days prior to the Scheduled Termination Date. All Aircraft Documents shall be prepared by Lessee prior to the commencement of the Final Inspection of such Aircraft Documents by Lessor and shall be complete and made available to Lessor at the time of commencement of the Final Inspection of such Aircraft Documents by Lessor. Any Aircraft Documents generated during the period following commencement of such Final Inspection of the Aircraft Documents shall be delivered to Lessor for inspection as promptly as possible, but in any event prior to Return.
6.3 On the Termination Date, Lessee shall deliver to Lessor all Aircraft Documents (a) delivered to Lessee with respect to the Delivery of the Aircraft to Lessee, and (b) required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate, and (c) to the extent not provided in the preceding clauses (a) and (b), all other Aircraft Documents applicable to the Aircraft with respect to any maintenance, inspections, repairs and modifications accomplished during the Lease Term. The Aircraft Documents required pursuant to this Section 6.3 herein, shall include:
(i) with respect to clause (a), the most recent revision issued by the respective Manufacturer for the Manufacturer’s Repair Manuals and in the same format as on the Delivery Date;
(ii) with respect to clause (b), (1) Tasks, repairs, and modifications accomplished during the Lease Term and (2) Time Controlled Parts and other Items installed during the Lease Term and then currently installed, as a minimum, (A) Overhaul records with respect to each Engine, Landing Gear and the APU, (B) traceability to Overhaul for Time Controlled Parts

	  	App 2-22	  	APPENDIX 2E
RETURN CONDITONS	

subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (C) Life Limited Part traceability to manufacture (“zero time since new”) for LLPs then installed on the Airframe or either Engine, (D) FAA Form 8130-3 or EASA Form One, or any successor thereto, (E) records of modifications and repairs, (F) records of compliance with Manufacturer’s service bulletins, (G) documentation of Required Approvals (including applicable supplemental type certificates) required pursuant to this Lease, and in addition to such Required Approvals, documentation of Aeronautics Authority and Certificating Authority approval, (H) inspection records (including records with respect to the accomplishment of Tasks), (I) records pertaining to evidence of compliance with AD’s, and (J) burn test certification records for interior Items;
(iii) with respect to clause (c), to the extent then in Lessee’s possession, (A) log books, (B) FAA, EASA and other Aeronautics Authority forms not included in paragraph (ii) above, (C) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date during the Lease Term, and (D) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
Any discrepancies found in the Aircraft Documents shall be corrected, and any missing Aircraft Documents shall be reconstructed by Lessee at Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents of maintenance, inspection, modification, and Overhauls accomplished during the Lease Term shall be in the English language. In the event that any Aircraft Documents are not provided to Lessor, or are not in the English language, the Aircraft shall be deemed not to meet the return conditions of this Appendix 2E and of Article 22 of the Lease. If Lessee subscribes to Manufacturer’s on-line data access services, Lessee must nonetheless return the Manufacturer’s Repair Manuals with all current revisions provided by Manufacturer in a format acceptable to Lessor.
6.4 All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessor’s representative shall operationally check all systems prior to the return of the Aircraft and all defects found shall be permanently repaired by Lessee, at Lessee’s expense, prior to return of the Aircraft.

	  	App 2-23	  	APPENDIX 2E
RETURN CONDITONS	

Appendix 3
to Aircraft Lease Agreement
[NOTE: THE TERMS OF THIS APPENDIX 3 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 3 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
ACCEPTANCE CERTIFICATE
(MSN             )
Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”) hereby acknowledges that on this              day of              20      , CIT Aerospace International (“ Lessor ”) did deliver for inspection and acceptance to Lessee under the Aircraft Lease Agreement made between Lessor and Lessee dated as of 30 November 2009 (the “ Lease ”) the Aircraft, as described below, together with all Aircraft Documents applicable thereto, in accordance with the Lease. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.

1.        	  	Aircraft Details	
				
	  	(a) 	  	Airframe	  		
				
	  		  	Aircraft Model:	  	Airbus A319-100	
				
	  		  	Manufacturer’s Serial Number:	  	                                 	
				
	  		  	Airframe Maintenance Status:	  		
				
	  		  	Total Flight Hours:                 	  		
				
	  		  	Total Cycles:                             	  		
				
	  	(b)	  	Engines (Installed)	  		
				
	  		  	Engine Type	  	IAE V2527M-A5	
				
	  		  	Manufacturer’s Serial	  	                                          and	
	  		  	Numbers:	  	                                                             	
				
	  		  	Maximum Takeoff Thrust	  	                                      lbs.	
	  		  	Rating:	  		
				
	  		  	Engines Maintenance Status:	  		
				
	  		  	Position 1	  		
				
	  		  	ESN:                     	  		
	  		  	Total Flight Hours:                     	  		
	  		  	Total Cycles:                     	  		
				
	  		  	Position 2	  		
				
	  		  	ESN:                     	  		
	  		  	Total Flight Hours:                      	  		
	  		  	Total Cycles:                      	  		

	  	App 3-1	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

							
	  	(c)	 	APU (Installed)	 		
				
	  		 	APU Type	 	                                             	
				
	  		 	Manufacturer’s Serial Number:	 	                                     	
				
	  		 	APu Maintenance Status:	 		
				
	  		 	Total APU Hours:                 	 		
	  		 	Total APU Cycles:                 	 		
				
	  	(d)	 	Landing Gear (Installed)	 		
				
	  		 	Manufacturer’s Serial Numbers:	 	Left Main: _________________	
	  		 		 	Right Main: _________________	
	  		 		 	Nose: _______________________	
				
	  		 	Landing Gear Maintenance Status:	 		
				
	  		 	Left Main	 		
				
	  		 	Total Flight Hours:               	 		
	  		 	Total Cycles:               	 		
				
	  		 	Right Main	 		
				
	  		 	Total Flight Hours:               	 		
	  		 	Total Cycles:               	 		
				
	  		 	Nose	 		
				
	  		 	Total Flight Hours:               	 		
	  		 	Total Cycles:               	 		
				
	  	(e)	 	Interior Configuration	 		
				
	  		 	Seating	 	                                                                      	
				
	  		 	Lavatories	 	                                                                      	
				
	  		 	Galleys	 	                                                                      	
				
	  		 	Passenger Service Units	 	                                                                      	
				
	  		 	PSIU	 	                                                                      	

	  	App 3-2	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

							
				
	  	(f)	  	Aircraft Documents	  		
			
	  		  	As described in Attachment(s)                  to this Acceptance Certificate.	
				
	  	(g)	  	Fuel On Board	  		
				
	  		  	                         kgs.	  		
		
2.        	  	Commercial Matters	
				
	  	(a)	  	Rent	  		
				
	  		  	(i)     Rent Payment Date:                                 	  		
			
	  		  	(ii)    Delivery Reference Rate:              percent (      %)	
			
	  		  	(iii)    Customisation Options Payment: $                     	
				
	  		  	(iv)    Basic Rent at Delivery: $                     	  		
				
	  	(b)	  	Aircraft Agreed Value	  		
				
	  		  	$                                  	  		
			
	  	(c)	  	Engine Agreed Value (each Engine) when not installed	
				
	  		  	$                                  	  		
 
3.	     Acceptance for Delivery	
    (a) Lessee hereby confirms to Lessor on                     , 20     at              A.M./P.M. GMT at                     ,                      that the above described Aircraft is in accordance with the specifications, terms and conditions for Delivery set forth in the Lease, is satisfactory in all respects and is in the condition required for Delivery under the Lease.
    (b) The Scheduled Termination Date is                      20    *.
 
 	 *	NOTE: This stated date is provided for the convenience of the parties only and the provisions of Article 2 and Appendix 2A, paragraph 3 shall be controlling.	
    (c) Lessee confirms that the Aircraft has been examined by its duly appointed and authorised representatives and the same conforms to the information set forth above.
    (d) To Lessee’s knowledge, (i) no Default or Event of Default has occurred and is continuing, (ii) and Lessee has no claims, offsets, deductions, set-offs or defenses of any kind or nature in connection with the Lease.
    (e) The execution and delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes, as between Lessee and Lessor, conclusive proof that the Aircraft is delivered in accordance with the description set forth in and in the condition required by the Lease, (iii) Lessee hereby expressly waives any right it may
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 3-3	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

Attachment 1
to Acceptance Certificate
SUMMARY LISTING OF AGREED OPTIONS CHANGES
TO STANDARD SPECIFICATION

	  	App 3-4	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

MSCN List
08/07/2011
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	 	
0210	  	VOI02J1010302M1A	  	Compliance with FAR 25-856(b) burn through requirements	  	Accepted	  	 	150700	  	
					
2131	  	VOI21J3100101M1A	  	Introduce modified pressure controller P/N 20791-03AB	  	Accepted	  	 	38652	  	
					
2131	  	VOI21J3100102M2A	  	Introduce modified cabin pressure controller (CPC) P/N 20791-13AC	  	Accepted	  	 	39674	  	
					
2150	  	32Y21J5000011M1A	  	Air conditioning - Air cooling - Introduce new standard of air conditioning pack	  	Accepted	  	 	35805	  	
					
2150	  	VOI21J5000012M1A	  	Air conditioning - Air cooling - Introduce new standard of air conditioning system controller	  	Accepted	  	 	35863	  	
					
2260	  	VOI22J6000007M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0618 standard	  	Rejected	  	 	35522	  	
					
2260	  	VOI22J6000008M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0619 standard	  	Accepted	  	 	36766	  	
					
2260	  	VOI22J6000010M1A	  	Auto flight - Flight Augmentation Computer (FAC) - Introduce BAM0620 standard	  	Accepted	  	 	38777	  	
					
2270	  	VOI22J7014602M1A	  	Auto Flight - Flight Management System - Activation of backup nav mode in MCDU	  	Accepted	  	 	36427	  	
					
2282	  	VOI22J8210106M1A	  	Auto flight - Multipurpose Control and Display Unit (MCDU) - Introduce LCD technology	  	Accepted	  	 	35538	  	
					
2282	  	VOI22J8210109M1A	  	Auto flight - MCDU - Introduce new software standard	  	Accepted	  	 	36821	  	
					
2283	  	VOI22J8300102M1A	  	Auto flight - Flight Management Guidance Computer (FMGC) - Introduce std. compatible with PW engines	  	Accepted	  	 	35526	  	
					
2283	  	VOI22J8300106M1A	  	Auto flight - FMGC - Introduce P1I11 new FMGC software standard.	  	Accepted	  	 	37311	  	
					
2283	  	VOI22J8311002M1A	  	Activate of “MOD NAV IN GO AROUND” on FMGC	  	Accepted	  	 	38399	  	
					
2312	  	VOI23J1200101M1A	  	Communication - VHF System - VHF antenna part number change.	  	Accepted	  	 	38537	  	
					
2312	  	VOI23J1200102M1A	  	Communication - VHF System - Install Collins VDR Std VHF2100 P/N 822-1287-120 capable of VDL mode2	  	Accepted	  	 	38762	  	
					
2351	  	VOI23J5112502M1A	  	Communication - Audio management - Introduce non SATCOM T.E.A.M. ACP3000 P/N ACP2788AD01	  	Accepted	  	 	38855	  	
					
2351	  	VOI23J5112703M1A	  	Communications - Audio management - Introduce new software standard of Audio Management Unit (AMU)	  	Rejected	  	 	36518	  	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	 	Page 1/6	  	

MSCN List
08/07/2011
 
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	 	
2351	  	VOI23J5112704M1A	  	Communications - Audio management - Introduce new software standard of Audio Management Unit (AMU)	  	Accepted	  	 	37583	  	
					
2373	  	32Y23J7300012M1A	  	Communications - CIDS - Introduce 131A standard of CIDS director	  	Accepted	  	 	35494/K9994	  	
					
2373	  	32Y23J7300015M1A	  	Communications - CIDS - Introduce new standard of DEUs	  	Accepted	  	 	35868	  	
					
2373	  	32Y23J7300016M1A	  	Communications - CIDS - Introduce black screensaver for cabin attendant panels	  	Rejected	  	 	35809	  	
					
2373	  	32Y23J7300023M1A	  	Communications - CIDS - Introduce new standard of OBRM software	  	Accepted	  	 	35885	  	
					
2373	  	32Y23J7300024M1A	  	Communications - CIDS - Configure for non-smoking airport at power up	  	Accepted	  	 	35559	  	
					
2373	  	VOI23J7300027M1A	  	Communications - CIDS - Introduce new standard of CIDS director	  	Accepted	  	 	37006	  	
					
2373	  	VOI23J7300028M1A	  	Communications - CIDS - Update OBRM software and update the Cabin Assignment Module (CAM)	  	Accepted	  	 	37007	  	
					
2373	  	VOI23J7300031M1A	  	CIDS - Install handsets N40A (Holmberg) - SFE	  	Accepted	  	 	39410	  	
					
2373	  	VOI23J7300034M1A	  	Install GSM hardened handsets N40A (Holmberg)	  	Accepted	  	 	150786	  	
					
2422	  	VOI24J2200004M2A	  	Electrical power - AC main generation - Introduce EEPGS GCU software standard 5.2	  	Accepted	  	 	39670	  	
					
2423	  	VOI24J2300006M1A	  	Electrical power - AC auxiliary generation - Introduce new standard of APU generator	  	Accepted	  	 	38054	  	
					
2432	  	VOI24J3200002M1A	  	Electrical power - DC main generation - Introduce a new standard of TRU	  	Accepted	  	 	34891	  	
					
2470	  	32Y24J7000101M1A	  	Electrical power - AC generation - Install electrical outlets in cockpit side consoles	  	Accepted	  	 	28568	  	
					
2511	  	VOI25J1100001M1A	  	Equipment/Furnishings - Cockpit seats - Introduce seats with a reinforced stop pin in seat base	  	Accepted	  	 	37440	  	
					
2610	  	VOI26J1000004M2A	  	Fire protection - Detection - Introduce new standard of Fire Detection Unit (FDU) P/N 3721-00	  	Accepted	  	 	38271	  	
					
2612	  	VOI26J1210804M1A	  	Fire protection - Engine fire and overheat detection - Introduce LEDs for fire protection panel	  	Accepted	  	 	38791	  	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 2/6	

MSCN List
08/07/2011
 
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

ATA	  	MSCN Reference	 	  	Title	  	Status	  	MOD	
2624	  	 	VOI26J24100003M1A	  	  	Gauged portable fire extinguishers in cabin - FFE (Fire Fighting Enterprise) P/N BA21741GSR-2	  	Rejected	  	39825	
					
2740	  	 	32Y27J4000005M1A	  	  	Flight controls - Trimmable Horizontal Stabilizer (THS) - Introduce new standard of THS actuator	  	Accepted	  	35867	
					
2740	  	 	VOI27J4000006M1A	  	  	Flight controls - Trimmable Horizontal Stabilizer (THS) - Introduce new pitch trim indicator	  	Accepted	  	36686	
					
2793	  	 	VOI27J9310112M1A	  	  	Flight controls - ELAC system (Elevator Aileron Computer) - Introduce L92K software standard of ELAC	  	Accepted	  	36445	
					
2793	  	 	VOI27J9310113M1A	  	  	Flight controls - ELAC system - Introduce ELAC with software data loading capability	  	Accepted	  	36786	
					
2793	  	 	VOI27J9310115M2A	  	  	ELAC system - Introduce L93 software std and high altitude VMO/MMO overshoot protection hardening	  	Accepted	  	38008	
					
2793	  	 	VOI27J9310116M1A	  	  	Flight controls - ELAC system (Elevator Aileron Computer) - Activate ELAC dataloading function	  	Accepted	  	36999	
					
2795	  	 	VOI27J9510103M1A	  	  	Flight controls - FCDC system - Introduce standard 57 FCDC	  	Rejected	  	35546	
					
2821	  	 	VOI28J2110004M1A	  	  	Main fuel pump system - Modify fuel pump with improved securing of vapour return valve	  	Accepted	  	39067	
					
2821	  	 	VOI28J2110502M1A	  	  	Main fuel pump system - Fuel pumps - Change the standard of fuel pump	  	Accepted	  	36734/J2794	
					
2825	  	 	VOI28J2510002M1A	  	  	Fuel - Refuel/Defuel system - Remove gravity filling points from wings	  	Accepted	  	38209	
					
2842	  	 	VOI28J4210007M1A	  	  	Fuel - Quantity indicating - Introduce 14-20 standard of FQIC	  	Accepted	  	37409	
					
2842	  	 	VOI28J4210008M2A	  	  	Fuel - Quantity indicating - Introduce 14-10 standard of Fuel Quantity Indicating Computer (FQIC)	  	Accepted	  	38090	
					
2910	  	 	VOI29J1010405M1A	  	  	Hydraulic power - Main hydraulic power - Delete ground service manifolds	  	Accepted	  	36625	
					
2910	  	 	VOI29J1010406M1A	  	  	Hydraulic power - Main hydraulic power - Relocate blue hydraulic pump pressure switch	  	Accepted	  	36828	
					
2910	  	 	VOI29J2110409M2A	  	  	Hydraulic power - Auxilliary hydraulic power - Introduce new standard of electric pump	  	Rejected	  	37047	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 3/6	

MSCN List
08/07/2011
 
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

ATA	  	MSCN Reference	  	Title	  	Status	  	MOD	
2922	  	VOI29J2200102M1A	  	Introduce Ram Air Turbine P/N 766352B	  	Accepted	  	38890	
					
2923	  	VOI29J2300104M1A	  	Hydraulic power - Power transfer - Introduce new standard of Power Transfer Unit (PTU)	  	Not applicable
anymore	  	36420	
					
3011	  	VOI30J1100001M1A	  	Introduce wing anti-ice valve Honeywell P/N 38E93-6	  	Accepted	  	39809	
					
3133	  	VOI31J3300004M1A	  	Indicating/Recording systems - DFDRS interconnection - Introduce new style of FDIU config software	  	Accepted	  	35801	
					
3133	  	VOI31J3300103M1A	  	Install linear acceleratomer L3COM P/N 17A717-03-00	  	Rejected	  	150196	
					
3136	  	VOI31J3610004M1A	  	Indicating/Recording systems - AIDS interconnection - Introduce TELEDYNE FDIMU	  	Rejected	  	30142	
					
3138	  	VOI31J3800005M1A	  	Introduce DLRB disk capable of ELAC dataloading	  	Accepted	  	38353	
					
3152	  	VOI31J5210501M1A	  	change basic radio altitude auto call-outs	  	Not applicable
anymore	  	150090	
					
3153	  	VOI31J5310006M1A	  	Indicating/Recording Systems - Flight Warning Computer (FWC) - Introduce H2F3 standard	  	Accepted	  	35220	
					
3153	  	VOI31J5310010M1A	  	Indicating/Recording Systems - Flight Warning Computer (FWC) - Introduce H2-F3P standard	  	Accepted	  	38425	
					
3153	  	VOI31J5310508M1A	  	Indicating/Recording Systems - FWC - Attenuate the buzzer associated with the crew call	  	Accepted	  	33832	
					
3156	  	VOI31J5600101M1A	  	Indicating/Recording Systems - ECAM control panel - Introduce new hardware standard	  	Accepted	  	36677	
					
3160	  	VOI31J6000001M1A	  	Indicating/Recording Systems - Electronic Instrument System - Activate Engine Available Display	  	Accepted	  	34665	
					
3162	  	32Y31J6201003M1A	  	Indicating/Recording Systems - DMC - Introduce std; capable of high-speed teleloading to ARINC615A	  	Accepted	  	35520	
					
3162	  	VOI31J6201004M2A	  	Indicating/Recording Systems - EIS - Introduce DMCs with EIS2 S7 software	  	Accepted	  	36725	
					
3211	  	VOI32J1100104M1A	  	MLG - alternate harnesses vendor Aerazur	  	Accepted	  	151136/J3173	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 4/6	

MSCN List
08/07/2011
 
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

ATA	  	MSCN Reference	 	  	Title	  	Status	  	MOD	
3221	  	 	32Y32J2110003M1A	  	  	Landing gear - Nose gear - Introduce new standard of NLG	  	Accepted	  	35241	
					
3221	  	 	32Y32J2110004M1A	  	  	Landing gear - Nose gear - Introduce new standard with heat shrink sleeve to prevent barrel wear	  	Accepted	  	36363	
					
3221	  	 	VOI32J2110005M1A	  	  	Landing gear - Nose gear - Introduce all-metal proximity switches and baulked lever	  	Accepted	  	36444	
					
3242	  	 	32Y32J4210505M1A	  	  	Landing gear - Normal braking - Introduce L4.8 standard of BSCU	  	Accepted	  	35216	
					
3242	  	 	VOI32J4210507M1A	  	  	Landing gear - Normal braking - Introduce L4.9 standard BSCU software	  	Accepted	  	36853	
					
3242	  	 	VOI32J4210508M1A	  	  	LANDING GEAR - NORMAL BRAKING - INSTALL BSCU SOFTWARE STD “L4.9 B” (EM2)	  	Accepted	  	38973	
					
3340	  	 	VOI33J4110206M1A	  	  	Introduce new Wingtip Navigation Light (LED technology)	  	Accepted	  	150870	
					
3348	  	 	VOI33J4810101M1A	  	  	Lights - Anti-collision/Strobe lighting - Introduce new wingtip power supply units	  	Accepted	  	36937	
					
3349	  	 	VOI33J4910304M2A	  	  	Lights - Wing and engine scan lighting - Introduce new standard of engine scan light	  	Accepted	  	37206	
					
3410	  	 	VOI34J1011727M1A	  	  	Navigation - ADIRS - Remove ADIRS CDU	  	Accepted	  	36743	
					
3411	  	 	VOI34J1100002M1A	  	  	Install Angle of Attack (AOA) sensors Thales P/N C16291AB	  	Accepted	  	150006	
					
3413	  	 	VOI34J1310603M1A	  	  	Navigation - Sensors power supply and switching - Introduce new standard of pitot probe	  	Accepted	  	35894	
					
3420	  	 	VOI34J2020203M1A	  	  	Navigation - Standby data: Integrated Standby Instrument System (ISIS) - Introduce new indicator	  	Accepted	  	34429	
					
3436	  	 	VOI34J3600001M1A	  	  	Navigation - Instrument Landing System (LOC AND G/S) - Localizer antenna part number change	  	Accepted	  	37762	
					
3436	  	 	VOI34J3600002M1A	  	  	Navigation - Instrument Landing System (LOC AND G/S) - Glide/Slope Antenna part number change	  	Accepted	  	37763	
					
3436	  	 	VOI34J3611001M1A	  	  	Navigation - MMR - Introduce improved software standard	  	Accepted	  	37356	
					
3433	  	 	VOI34J4320309M1A	  	  	Navigation - TCAS - Change TCAS equipment from BFE to SFE	  	Rejected	  	37672	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 5/6	

MSCN List
08/07/2011
 
SEARCH CRITERIA

Family : null	  		  	MSN : 4403	 	Aircraft status : All        	  		

SEARCH RESULT	
					
ATA	  	MSCN Reference	 	  	Title	  	Status	  	MOD	
3448	  	 	32Y34J4813205M1A	  	  	Navigation - GPWS - Activate peaks and obstacle modes	  	Accepted	  	31375	
					
3448	  	 	VOI34J4800002M1A	  	  	Navigation - Ground Proximity Warning System (GPWS) - Introduce GPWC with peaks/obstacle capacity	  	Accepted	  	34634	
					
3450	  	 	VOI34J5011103M1A	  	  	Navigation - Dependent position determining - Reindustrialize ATC/DME antennas	  	Accepted	  	37880	
					
3455	  	 	VOI34J5510211M1A	  	  	Navigation - VOR/Marker - Reindustrialize marker antenna	  	Accepted	  	37881	
					
3530	  	 	VOI35J3000002M1A	  	  	Oxygen - Portable oxygen - Introduce lightweight portable oxygen cylinder assembly	  	Accepted	  	37110	
					
3611	  	 	VOI36J1100007M1A	  	  	Pneumatic - Engine bleed air supply - introduce standard 9 Bleed Monitoring Computer (BMC)	  	Accepted	  	35550	
					
3622	  	 	VOI36J2200101M1A	  	  	Pneumatic - Leak detection - Activate pylon leak detection monitoring	  	Not applicable
anymore	  	36595	
					
3831	  	 	VOI38J3110001M1A	  	  	Water/Waste - Toilet system - Introduce a new toilet assembly	  	Accepted	  	36639	
					
3831	  	 	VOI38J3110003M1A	  	  	Water/Waste - Waste disposal - Introduce an improved vacuum generator	  	Accepted	  	35934	
					
4621	  	 	VOI46J2100102M1A	  	  	Information systems - ATIMS - Introduce ATSU hardware capable of high speed uploading on A/C	  	Accepted	  	33238	
					
4621	  	 	VOI46J2100103M1A	  	  	Information systems - ATIMS - Introduce ATSU software upgrade	  	Accepted	  	34869	
					
7322	  	 	VOI73J2200103M1A	  	  	Engine fuel and control - FADEC system - introduce SCN19 EEC software standard	  	Accepted	  	35944	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 6/6	

List of RFC/SCN
08/07/2011
 
SEARCH CRITERIA

Family : A318/A319/A320/A321	 	        MSN: 4403	  		

SEARCH RESULT	  	  				
RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI56J001A	  	ALTERNATE LATERAL WINDOWS - SAINT-GOBAIN SULLY	  	 	ACCEPTED	  	  	 	VOI56J1010223S1A	  	  	 	5600	  	  	 	CN56.10.102 23	  	  	 	VOI*A	  	
							
VOI52J001A	  	INSTALLATION OF DEADBOLT ON REINFORCED COCKPIT DOOR	  	 	ACCEPTED	  	  	 	VOI52J5110008S1A	  	  	 	5251	  	  	 	CN52.51.100 08	  	  	 	VOI*A	  	
							
VOI51J007A	  	ALTERNATE PAINT SYSTEM (CF PRIMER, BASE COAT/CLEAR COAT) ON FUSELAGE and VERT. STABILIZER - MANKIEWICZ	  	 	ACCEPTED	  	  	 	VOI51J2270501S1A	  	  	 	5122	  	  	 	CN51.22.705 01	  	  	 	VOI*A	  	
							
VOI51J006A	  	ALTERNATE PAINT SYSTEMS (CF PRIMER) ON NACELLES - MANKIEWICZ	  	 	ACCEPTED	  	  	 	VOI51J2221506S1A	  	  	 	5122	  	  	 	CN51.22.215 06	  	  	 	VOI*A	  	
							
VOI51J003A	  	EXTERNAL LIVERY DECORATIVE ADHESIVE FILM (SFE)	  	 	ACCEPTED	  	  	 	VOI51J2225053S1A	  	  	 	5122	  	  	 	CN51.22.250 53	  	  	 	VOI*A	  	
							
VOI49J001A	  	APU ALTERNATE EQUIPMENT – HONEYWELL, GTCP131-9A	  	 	ACCEPTED	  	  	 	VOI49J0010506S1A	  	  	 	4900	  	  	 	CN49.00.105 06	  	  	 	VOI*A	  	
							
VOI46J2110213A	  	AIRBUS STANDARD AOC SOFTWARE FROM ROCKWELL COLLINS WITH UNITS IN KG (BY DEFAULT)	  	 	ACCEPTED	  	  	 	VOI46J2110213S1A	  	  	 	4621	  	  	 	CN46.21.102 13	  	  	 	VOI*A	  	
							
VOI35J003A	  	NON-INSTALLATION OF LIGHTWEIGHT OXYGEN ASSEMBLY FROM VENDOR AVOX (REVERT TO STEEL BOTTLES)	  	 	ACCEPTED	  	  	 	VOI35J3212032S2A	  	  	 	3532	  	  	 	CN35.32.120 32	  	  	 	VOI*A	  	
							
VOI35J002A	  	INTRODUCTION OF LIGHTWEIGHT OXYGEN ASSEMBLY FROM VENDOR AVOX	  	 	ACCEPTED	  	  	 	VOI35J3212030S1A	  	  	 	3532	  	  	 	CN35.32.120 30	  	  	 	VOI*A	  	
							
VOI34J008A	  	SINGLE WXR (ARINC 708A) WITH PWS AND MULTISCAN (WXR 2100) - ROCKWELL COLLINS, PN -213	  	 	ACCEPTED	  	  	 	VOI34J4130011S1A	  	  	 	3441	  	  	 	CN34.41.300 11	  	  	 	VOI*A	  	
							
VOI34J007A	  	EGPWC ALTERNATE EQUIPMENT - HONEYWELL, -003	  	 	ACCEPTED	  	  	 	VOI34J4812403S1A	  	  	 	3448	  	  	 	CN34.48.124 03	  	  	 	VOI*A	  	
							
VOI34J006A	  	INSTALLATION OF ISIS - THALES AVIONICS, PN C16221VA01	  	 	ACCEPTED	  	  	 	VOI34J2020206S1A	  	  	 	3420	  	  	 	CN34.20.202 06	  	  	 	VOI*A	  	
							
VOI34J005A	  	TCAS CHANGE 7 - ACSS 2000 / ATC ELS, EHS - ROCKWELL COLLINS 901 (-10006)	  	 	ACCEPTED	  	  	 	VOI34J4320037S1A	  	  	 	3443	  	  	 	CN34.43.200 37	  	  	 	VOI*A	  	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 1/14	

List of RFC/SCN
08/07/2011
 
SEARCH CRITERIA

Family : A318/A319/A320/A321	 	        MSN: 4403	  		

SEARCH RESULT	  		
RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	  	Fleet	
VOI34J004A	  	ADIRS 4MCU - HONEYWELL, PN HG2030AE23	  	 	ACCEPTED	  	  	 	VOI34J1011718S1A	  	  	 	3410	  	  	CN34.10.117 18	  	VOI*A	
							
VOI33J007A	  	INSTALLATION OF BRIGHTER LED PILOT CHART HOLDER AND MAP READING LIGHTS	  	 	ACCEPTED	  	  	 	VOI33J1210902S1A	  	  	 	3312	  	  	CN33.12.109 02	  	VOI*A	
							
VOI33J006A	  	LIGHTING COLOUR DEFINITION - CHANGE 1	  	 	ACCEPTED	  	  	 	VOI33J2113650S1A	  	  	 	3320	  	  	CN33.21.136 50	  	VOI*A	
							
VOI33J005A	  	EHC - PSU ATTENDANT CALL INDICATION LIGHT COLOR CHANGE TO BLUE	  	 	ACCEPTED	  	  	 	VOI33J2011605S1A	  	  	 	3320	  	  	CN33.20.116 05	  	VOI*A	
							
VOI33J004A	  	COLOURED ILLUMINATION WITH LED STRIPS IN CEILING	  	 	ACCEPTED	  	  	 	VOI33J2113615S1A	  	  	 	3320	  	  	CN33.21.136 15	  	VOI*A	
							
VOI33J003A	  	COLOURED ILLUMINATION WITH LED STRIPS IN SIDE WALLS	  	 	ACCEPTED	  	  	 	VOI33J2113614S1A	  	  	 	3320	  	  	CN33.21.136 14	  	VOI*A	
							
VOI33J002A	  	LIGHTING COLOUR DEFINITION	  	 	ACCEPTED	  	  	 	VOI33J2113610S1A	  	  	 	3320	  	  	CN33.21.136 10	  	VOI*A	
							
VOI29J001A	  	HYDRAULIC EDPS ALTERNATE EQUIPMENT - EATON AEROSPACE, PN 3031863-001	  	 	ACCEPTED	  	  	 	VOI29J1011012S1A	  	  	 	2910	  	  	CN29.10.110 12	  	VOI*A	
							
VOI25J054A	  	LH PARTITION PN CHANGE (BFE) - DRIESSEN	  	 	ACCEPTED	  	  	 	VOI25J2646409S1A	  	  	 	2526	  	  	CN25.26.464 09	  	VOI*A	
							
VOI25J053A	  	INSTALLATION OF ONE ADDITIONAL LIFE VEST DUE TO THE INSTALLATION OF THE 4TH OCCUPANT SEAT IN COCKPIT	  	 	ACCEPTED	  	  				  	 	2565	  	  	CN25.65.001 21	  	VOI*A	
							
VOI25J052A	  	CARPET PN CHANGE - ANKER	  	 	ACCEPTED	  	  	 	VOI25J2813289S1A	  	  	 	2528	  	  	CN25.28.132 89	  	VOI*A	
							
VOI25J051A	  	INTERIOR COLOUR SPECIFICATION CHANGE (2)	  	 	ACCEPTED	  	  	 	VOI25J2310305S1A	  	  	 	2523	  	  	CN25.23.103 05	  	VOI*A	
							
VOI25J050A	  	EMERGENCY EQUIPMENT DRAWING CHANGE DUE TO NEW LAYOUT	  	 	ACCEPTED	  	  	 	VOI25J6520626S1A	  	  	 	2565	  	  	CN25.65.206 26	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 2/14	

List of RFC/SCN
08/07/2011
 
SEARCH CRITERIA

Family : A318/A319/A320/A321	 	        MSN: 4403	  		

SEARCH RESULT	  	  				
RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	 	  	Fleet	 	
VOI25J049A	  	PASSENGER, CREW AND DEMO LIFE VEST CHANGE FROM HOOVER TO EASTERN AERO MARINE	  	 	ACCEPTED	  	  	 	VOI25J6609068S1A	  	  	 	2566	  	  	 	CN25.66.090 68	  	  	 	VOI*A	  	
							
VOI25J048A	  	CABIN LAYOUT CHANGE	  	 	ACCEPTED	  	  	 	VOI25J2034901S1A	  	  	 	2520	  	  	 	CN25.20.349 01	  	  	 	VOI*A	  	
							
VOI25J047A	  	EHC - INSTALLATION OF STOWAGE (BFE) - HEIGHT BELOW OHSC	  	 	ACCEPTED	  	  	 	VOI25J2760101S1A	  	  	 	2527	  	  	 	CN25.27.601 01	  	  	 	VOI*A	  	
							
VOI25J046A	  	HONEYWELL PORTABLE ELT P/N CHANGE (PN 1153538-1)	  	 	ACCEPTED	  	  	 	VOI25J6519763S2A	  	  	 	2565	  	  	 	CN25.65.197 63	  	  	 	VOI*A	  	
							
VOI25J045A	  	INSTALLATION OF ELECTRICAL FOOT WARMERS FOR PILOTS (INCREASED SETTING) - DIEHL GMBH	  	 	ACCEPTED	  	  	 	VOI25J1510103S1A	  	  	 	2515	  	  	 	CN25.15.101 03	  	  	 	VOI*A	  	
							
VOI25J044A	  	NTF SELECTION (SFE STANDARD I) - GERFLOR BATIFLEX AVR175A - SOLO	  	 	ACCEPTED	  	  	 	VOI25J2820006S2A	  	  	 	2528	  	  	 	CN25.28.200 06	  	  	 	VOI*A	  	
							
VOI25J043A	  	SEAT BELT PN CHANGE (VOI)	  	 	ACCEPTED	  	  	 	VOI25J2117932S1A	  	  	 	2521	  	  	 	CN25.21.179 32	  	  	 	VOI*A	  	
							
VOI25J042A	  	CHANGE EMERGENCY MEDICAL KIT PROVISIONS BY A MISCELLANEOUS EMERGENCY EQUIPMENT RACK (250 X 357 X 69)	  	 	ACCEPTED	  	  	 	VOI25J6401218S1A	  	  	 	2564	  	  	 	CN25.64.012 18	  	  	 	VOI*A	  	
							
VOI25J040A	  	SEAT PN CHANGE DUE TO LIFE VEST POUCH CHANGE (VOI)	  	 	ACCEPTED	  	  	 	VOI25J2117631S1A	  	  	 	2521	  	  	 	CN25.21.176 31	  	  	 	VOI*A	  	
							
VOI25J039A	  	REMOVAL OF ONE LIFE VEST IN COCKPIT (VOI)	  	 	ACCEPTED	  	  	 	VOI25J6519730S1A	  	  	 	2565	  	  	 	CN25.65.197 30	  	  	 	VOI*A	  	
							
VOI25J038A	  	STOWAGE P/N CHANGE DUE TO DESIGN ADAPTATION FOR EHC (VOI*A) -2	  	 	ACCEPTED	  	  	 	VOI25J2728817S1A	  	  	 	2527	  	  	 	CN25.27.288 17	  	  	 	VOI*A	  	
							
VOI25J036A	  	INTERIOR COLOUR SPECIFICATION CHANGE	  	 	ACCEPTED	  	  	 	VOI25J2310301S1A	  	  	 	2523	  	  	 	CN25.23.103 01	  	  	 	VOI*A	  	
							
VOI25J035A	  	INSTALLATION OF A320 FAMILY ENHANCED CABIN	  	 	ACCEPTED	  	  	 	VOI25J2020001S1A	  	  	 	2520	  	  	 	CN25.20.200 01	  	  	 	VOI*A	  	
							
VOI25J034A	  	DEMO BELT P/N UPDATE (VOI) -2	  	 	ACCEPTED	  	  	 	VOI25J6519881S1A	  	  	 	2565	  	  	 	CN25.65.198 81	  	  	 	VOI*A	  	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 3/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		
Family : A318/A319/A320/A321	  	MSN : 4403                                   	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	 	  	Last SCN issue	 	  	ATA	 	  	Catalog item
(EPAC/TDU)	  	Fleet	
VOI25J033A	  	CABIN FLASHLIGHT P/N CHANGE (SFE) VENDOR DME	  	 	ACCEPTED	  	  	 	VOI25J6519879S1A	  	  	 	2565	  	  	CN25.65.198 79	  	VOI*A	
							
VOI23J017A	  	INSTALLATION OF SINGLE HF SYSTEM (DATA LINK CAPABLE) - ROCKWELL COLLINS 900	  	 	ACCEPTED	  	  	 	VOI23J1111512S1A	  	  	 	2311	  	  	CN23.11.115 12	  	VOI*A	
							
VOI23J016A	  	BOOMSETS ALTERNATE EQUIPMENT - TELEX COMMUNICATIONS, PN 64300-210	  	 	ACCEPTED	  	  	 	VOI23J5113627S1A	  	  	 	2351	  	  	CN23.51.136 27	  	VOI*A	
							
VOI23J015A	  	CUSTOMIZED SCENARIO LIGHTING DEFINITION CHANGE 1	  	 	ACCEPTED	  	  	 	VOI23J7320862S1A	  	  	 	2373	  	  	CN23.73.208 62	  	VOI*A	
							
VOI23J014A	  	CIDS LIGHTING SCENARIO DEFINITION	  	 	ACCEPTED	  	  	 	VOI23J7300560S1A	  	  	 	2373	  	  	GN23.73.005 60	  	VOI*A	
							
VOI23J013A	  	SCENARIO BASED CABIN LIGHTING CONTROL	  	 	ACCEPTED	  	  	 	VOI23J7300550S1A	  	  	 	2373	  	  	GN23.73.005 50	  	VOI*A	
							
VOI23J010A	  	AUTOMATIC PROGRAMMABLE ELT (406AF) ASSOCIATED WITH REMOTE CONTROL PANEL IN COCKPIT - ELTA (BFE)	  	 	ACCEPTED	  	  	 	VOI23J0013231S2A	  	  	 	2300	  	  	CN23.00.132 31	  	VOI*A	
							
VOI22J001A	  	FM KITS (REL. 1A - FMGC S5I11) / MCDU ALTERN. EQUIP - THALES AVIONICS/SMITH ASSOC. WITH IAE ENGINES	  	 	ACCEPTED	  	  	 	VOI22J7010034S1A	  	  	 	2270	  	  	CN22.70.100 34	  	VOI*A	
							
VOI21J004A	  	INSTALLATION OF OZONE CATALYTIC CONVERTERS - ENGELHARDT CORPORATION, PN 20499006	  	 	ACCEPTED	  	  	 	VOI21J7010907S1A	  	  	 	2170	  	  	CN21.70.109 07	  	VOI*A	
							
VOI21J003A	  	AVIONICS VENTILLATION AIR FILTER ALTERNATE EQUIPMENT - PALL-APME, QB0776	  	 	ACCEPTED	  	  	 	VOI21J2710806S1A	  	  	 	2127	  	  	CN21.27.108 06	  	VOI*A	
							
VOI11J026A	  	ENGINE DANGER AREA DECALS - FEET AND METRIC DISTANCES	  	 	ACCEPTED	  	  	 	VOI11J2010505S1A	  	  	 	1120	  	  	CN11.20.105 05	  	VOI*A	
							
VOI11J024A	  	CABIN PLACARD CHANGE ACCORDING TO REFERENCE DOCUMENT	  	 	ACCEPTED	  	  	 	VOI11J3013402S1A	  	  	 	1130	  	  	CN11.30.134.02	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 4/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		
Family : A318/A319/A320/A321	  	MSN : 4403                               	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
VOI11J023A	  	INSTALLATION OF WEIGHT PLACARD ON EACH OVERWING HATCH	  	ACCEPTED	  	VOI11J3013105S1A	  	1130	  	CN11.31.131 05	  	VOI*A	
							
VOI11J022A	  	PLACARD CORRECTION (TAI)	  	ACCEPTED	  	VOI11J3013401S1A	  	1130	  	CN11.30.134 01	  	VOI*A	
VOI11J021A	  	BILINGUAL EXTERNAL MARKINGS -TRANSLATION MODIFICATION (2)	  	ACCEPTED	  	VOI11J2012942S1A	  	1120	  	CN11.20.129 42	  	VOI*A	
							
VOI11J019A	  	INSTALLATION OF LEASING IDENTIFICATION PLATES ON ENGINES, LH DOOR FRAME AND LAV A PARTITION	  	ACCEPTED	  	VOI11J0012401S1A	  	1100	  	CN11.00.124 01	  	VOI*A	
							
VOI11J017A	  	NOSE LANDING GEAR (NLG) STEERING AND MAX TOW BAR ANGLE MARKINGS	  	ACCEPTED	  	VOI11J2011907S1A	  	1120	  	CN11.20.119 07	  	VOI*A	
							
VOI02J014A	  	AVIONICS/COCKPIT - CHANGE ROCKWELL COLLINS AOC FROM BFE TO SSBFE (WITH UNITS IN KG BY DEFAULT)	  	ACCEPTED	  	VOI02J3513093S1A	  	0235	  	CN02.35.130 93	  	VOI*A	
							
VOI02J012A	  	AIRCRAFT OPERATION ON RUNWAYS LESS THAN 45M WIDE	  	ACCEPTED	  	VOI02J1012301S1A	  	0210	  	CN02.10.123 01	  	VOI*A	
							
C9G71J001CK	  	INSTALLATION OF IAE SELECTONE OPTION PACKAGE	  	ACCEPTED	  		  	7100	  	CN71.00.100 02	  	C9G*CK	
							
C9G38J001CK	  	PROVIDE A COMPLIANCE STATEMENT WITH USPHS HANDBOOK ON SANITATION	  	ACCEPTED	  		  	3810	  	CN38.10.102 04	  	C9G*CK	
							
C9G34J002CK	  	FULL PROVISION FOR SECOND ADF SYSTEM	  	ACCEPTED	  		  	3453	  	CN34.53.109 01	  	C9G*CK	
							
C9G34J001CK	  	WIRING PROVISION FOR T2CAS	  	ACCEPTED	  		  	3443	  	CN34.43.240 01	  	C9G*CK	
							
C9G25J3101502CK	  	COMPLETE PROVISION WITHOUT BIN SEGMENTATION FOR A WET GALLEY - H/S AND F/S, 4 TROLLEY, AREA 31.020	  	ACCEPTED	  		  	2531	  	CN25.31.015 02	  	C9G*CK	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 5/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		  		
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
C9G25J1120803CK	  	INSTALLATION OF FOURTH OCCUPANT SEAT IN COCKPIT - SOGERMA/SOCEA	  	ACCEPTED	  		  	2511	  	CN25.11.208 03	  	C9G*CK	
							
C9G25J002CK	  	INSTALLATION OF ONE ADDITIONAL LIFE VEST DUE TO THE INSTALLATION OF THE 4TH OCCUPANT SEAT IN COCKPIT	  	ACCEPTED	  		  	2565	  	CN25.65.001 21	  	C9G*CK	
							
C9G23J001CK	  	FULL PROVISION FOR A SECOND HF SYSTEM (ARINC 719)	  	ACCEPTED	  		  	2311	  	CN23.11.118 01	  	C9G*CK	
							
C9G11J002CK	  	US AND METRIC UNITS FOR CARGO COMPARTMENT HEIGHT PLACARDS	  	ACCEPTED	  		  	1130	  	CN11.30.136 01	  	C9G*CK	
							
C9G11J001CK	  	INSTALLATION OF LEASING IDENTIFICATION PLATES ON APU	  	ACCEPTED	  		  	1100	  	CN11.00.124 06	  	C9G*CK	
							
C9G02J003CK	  	COMPLIANCE STATUS FOR FAR 121	  	ACCEPTED	  		  	0212	  	CN02.12.117 05	  	C9G*CK	
							
C9G02J002CK	  	CABIN - CHANGE SSBFE INTO BFE	  	ACCEPTED	  		  	0235	  	CN02.35.141 13	  	C9G*CK	
							
C9G02J001CK	  	PORTABLE ELT STATUS CHANGE FROM SSBFE TO BFE	  	ACCEPTED	  		  	0235	  	CN02.35.139 05	  	C9G*CK	
							
32Y72J001A	  	IAE ENGINES - V2527M-A5 AT 26 500 LBF NOMINAL THRUST (A319-133)	  	ACCEPTED	  	32Y72J0011939S2A	  	7200	  	CN72.00.119 39	  	VOI*A	
							
32Y56J2110002A	  	INSTALLATION OF ADDITIONAL CABIN WINDOW BETWEEN FRAMES 64 AND 65 RH	  	ACCEPTED	  	32Y56J2110002S1A	  	5621	  	CN56.21.100 02	  	VOI*A	
							
32756J2110001A	  	INSTALLATION OF ADDITIONAL CABIN WINDOW BETWEEN FRAMES 64 AND 65 LH	  	ACCEPTED	  	32Y56J2110001S1A	  	5621	  	CN56.21.100 01	  	VOI*A	
							
32Y56J1010202A	  	ALTERNATE FRONT WINDOWS - SAINT-GOBAIN SULLY	  	ACCEPTED	  	32Y56J1010202S1A	  	5600	  	CN56.10.102 02	  	VOI*A	
							
32Y55J3010101A	  	INSTALLATION OF EROSION PROTECTION ON VERTICAL STABILIZER LEADING EDGE - STAINLESS STEEL	  	ACCEPTED	  	32Y55J3010101S1A	  	5530	  	CN55.30.101 01	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 6/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		
Family : A318/A319/A320/A321	  	MSN : 4403                           	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y38J4110101A	  	INSTALLATION OF AUXILIARY COMPRESSOR IN THE POTABLE WATER PRESSURIZATION SYSTEM	  	ACCEPTED	  	32Y38J4110101S1A	  	3840	  	CN38.41.101 01	  	VOI*A	
							
32Y38J1010402A	  	INSTALLATION OF WATER CONDITIONER IN POTABLE WATER SYSTEM (A318, A319, A321)	  	ACCEPTED	  	32Y38J1010402S1A	  	3810	  	CN38.10.104 02	  	VOI*A	
							
32735J3110804A	  	COCKPIT PBE ALTERNATE EQUIPMENT (SFE) - AVOX SYSTEMS INC.	  	ACCEPTED	  	32Y35J3110804S1A	  	3531	  	CN35.31.108 04	  	VOI*A	
							
32Y35J2001001A	  	INSTALLATION OF FOUR OXYGEN MASKS PER BOX	  	ACCEPTED	  	32Y35J2001001S1A	  	3520	  	CN35.20.010 01	  	VOI*A	
							
32Y35J1120102A	  	COCKPIT OXYGEN CYLINDER ALTERNATE EQUIPMENT 115 CU FT (STEEL) - EROS (INTERTECHNIQUE GROUP)	  	ACCEPTED	  	32Y35J1120102S1A	  	3511	  	CN35.11.201 02	  	VOI*A	
							
32Y35J001A	  	IDENTIFICATION OF PAX CHEMICAL OXYGEN GENERATORS	  	ACCEPTED	  	32Y35J2010401S1A	  	3520	  	CN35.20.104 01	  	VOI*A	
							
32Y34J5010404A	  	DDRMI VOR/ADF/DEM - ROCKWELL COLLINS	  	ACCEPTED	  	32Y34J5010404S1A	  	3457	  	CN34.50.104 04	  	VOI*A	
							
32Y34J4813203A	  	ACTIVATION OF THE OBSTACLE FUNCTION IN THE EGPWS - (EIS2)	  	ACCEPTED	  	32Y34J4813203S2A	  	3448	  	CN34.48.132 03	  	VOI*A	
							
32Y34J4813202A	  	ACTIVATION OF THE PEAKS FUNCTION IN THE EGPWS - (EIS2)	  	ACCEPTED	  	32Y34J4813202S2A	  	3448	  	CN34.48.132 02	  	VOI*A	
							
32Y34J4210107A	  	RADIO ALTIMETERS ALTERNATE EQUIPMENT - ROCKWELL COLLINS 900	  	ACCEPTED	  	32Y34J4210107S1A	  	3442	  	CN34.42.101 07	  	VOI*A	
							
32Y34J2020202A	  	INSTALLATION OF ISIS - THALES AVIONICS	  	ACCEPTED	  	32Y34J2020202S1A	  	3420	  	CN34.20.202 02	  	VOI*A	
							
32Y34J1310601A	  	PITOT PROBES ALTERNATE EQUIPMENT - BF GOODRICH AEROSPACE	  	ACCEPTED	  	32Y34J1310601S1A	  	3413	  	CN34.13.106 01	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 7/14	

List of RFC/SCN
08/07/2011
 
SEARCH CRITERIA

Family : A318/A319/A320/A321	  		  	                                                                 MSN : 4403	  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y34J1310501A	  	INSTALLATION OF ASPIRATED TAT PROBES - BF GOODRICH AEROSPACE	  	ACCEPTED	  	32Y34J1310501S1A	  	3413	  	CN34.13.105 01	  	VOI*A	
							
32Y34J003A	  	SINGLE WXR (ARINC 708A) WITH PWS AND MULTISCAN - ROCKWELL COLLINS	  	ACCEPTED	  	32Y34J4130004S1A	  	3441	  	CN34.41.300 04	  	VOI*A	
							
32Y34J001A	  	RADIO ALTITUDE AUTOMATIC CALL-OUTS	  	ACCEPTED	  	32Y34J4211701S1A	  	3442	  	CN34.32.117 01	  	VOI*A	
							
32Y33J001A	  	INSTALLATION OF FLOOR-MOUNTED EEPMS - LUFTHANSA TECHNIK (WITH COVER) / EXIT IDENTIFIER - AIRSIGNA	  	ACCEPTED	  	32Y33J5011041S1A	  	3350	  	CN33.50.110 41	  	VOI*A	
							
32Y32J4820012A	  	INSTALLATION OF UNIVERSAL BRAKE COOLING FANS ON BF-GOODRICH WHEELS AND BRAKES	  	ACCEPTED	  	32Y32J4820012S1A	  	3248	  	CN32.48.200 12	  	VOI*A	
							
32Y32J4112005A	  	NLG TIRES SELECTION - MICHELIN (30X8.8-R15 RADIAL TIRES)	  	ACCEPTED	  	32Y32J4112005S1A	  	3241	  	CN32.41.120 05	  	VOI*A	
							
32Y32J4111101A	  	MLG TIRES SELECTION - MICHELIN (46X17-R20 RADIAL TIRES)	  	ACCEPTED	  	32Y32J4111101S1A	  	3241	  	CN32.41.111 01	  	VOI*A	
							
32Y32J4011325A	  	WHEELS AND BRAKES ALTERNATE EQUIPMENT (DURACARB) - GOODRICH	  	ACCEPTED	  	32Y32J4011325S1A	  	3240	  	CN32.40.113 25	  	VOI*A	
							
32Y32J001A	  	SMALL BORE INFLATION VALVES ON NLG and MLG BF GOODRICH WHEELS (WITHOUT INDICATOR)	  	ACCEPTED	  	32Y32J1010301S1A	  	3240	  	CN32.10.103 01	  	VOI*A	
							
32Y31J5210202A	  	ACTIVATION OF ECAM OEB REMINDER FUNCTION ON FWC	  	ACCEPTED	  	32Y31J5210202S1A	  	3152	  	CN31.52.102 02	  	VOI*A	
							
32Y31J3320014A	  	SSFDR ALTERNATE EQUIPMENT (256 W/S CAPABLE) - HONEYWELL	  	ACCEPTED	  	32Y31J3320014S1A	  	3133	  	CN31.33.200 14	  	VOI*A	
							
32Y30J1110101A	  	WING ANTI-ICE VALVES - HONEYWELL	  	ACCEPTED	  	32Y30J1110101S1A	  	3011	  	CN30.11.101 01	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 8/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA
 	  	 	
Family : A318/A319/A320/A321	  	                                     MSN : 4403	  	 	
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y29J2110407A	  	ELECTROPUMPS ALTERNATE EQUIPMENT - EATON AEROSPACE	  	ACCEPTED	  	32Y29J2110407S1A	  	2910	  	CN29.21.104 07	  	VOI*A	
32Y25J6700101A	  	INSTALLATION OF MEDICAL OUTLETS IN AFT RH PSU CHANNEL (115V/400HZ and 28V DC/360 W)	  	ACCEPTED	  	32Y25J6700101S1A	  	2567	  	CN25.67.001 01	  	VOI*A	
32Y25J2821002A	  	NTF SELECTION (SFE STANDARD II) - TOP LAYER GERFLOR/BATIFLEX AV300 - SOLO	  	ACCEPTED	  	32Y25J2821002S1A	  	2528	  	CN25.28.210 02	  	VOI*A	
32Y25J2062210A	  	INSTALLATION OF ENLARGED RACEWAYS	  	ACCEPTED	  	32Y25J2062210S1A	  	2520	  	CN25.20.622 10	  	VOI*A	
32Y25J031A	  	RELOCATION OF ELT (32Y)	  	ACCEPTED	  	32Y25J6520250S1A	  	2565	  	CN25.65.202 50	  	VOI*A	
32Y25J029A	  	CATERING EQUIPMENT P/N CHANGE - AIRLINE LOGO (VOLARIS)	  	ACCEPTED	  	32Y25J3510805S1A	  	2535	  	CN25.35.108 05	  	VOI*A	
32Y25J028A	  	RELOCATION OF PBE (32Y)	  	ACCEPTED	  	32Y25J6519857S1A	  	2565	  	CN25.65.198 57	  	VOI*A	
32Y25J027A	  	C/A SEAT RESTRAINT SYSTEM CHANGE	  	ACCEPTED	  	32Y25J2217003S1A	  	2522	  	CN25.22.170 03	  	VOI*A	
32Y25J026A	  	INSTAL. OF SLIDE RAFTS AT FWD AND AFT PAX/CREW/SERVICE DOORS (SFE) - AIR CRUISERS (A318/A319/A320)	  	ACCEPTED	  	32Y25J6210202S1A	  	2562	  	CN25.62.102 02	  	VOI*A	
32Y25J025A	  	REPLACEMENT OF CAS AND INSTALLATION OF ADDITIONAL DOGHOUSE (BFE) FROM SUPPLIER DRIESSEN	  	ACCEPTED	  	32Y25J2216910S1A	  	2522	  	CN25.22.169 10	  	VOI*A	
32Y25J024A	  	REPLACEMENT OF EMERGENCY EQUIPMENT CONTAINERS IN GALLEYS G1 AND AFT GALLEY/STOWAGE	  	ACCEPTED	  	32Y25J3510696S1A	  	2535	  	CN25.35.106 96	  	VOI*A	
32Y25J023A	  	INSTALLATION OF 110 VAC/60 HZ PED POWER OUTLET(S) AT SELECTED SEAT(S) (Y/CLASS) - KID - SYSTEME GMBH	  	ACCEPTED	  	32Y25J2101001S1A	  	2521	  	CN25.21.010 01	  	VOI*A	
32Y25J022A	  	IN-SEAT POWER SUPPLY SYSTEM CHANGES	  	ACCEPTED	  	32Y25J2100200G1A	  	2521	  		  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 9/14	

List of RFC/SCN
08/07/2011

													
SEARCH CRITERIA
 	  	 	
Family : A318/A319/A320/A321	  	MSN : 4403    	  	 	
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y25J021A	  	ADDITIONAL EMERGENCY EQUIPMET OUT OF EECG (32Y)	  	ACCEPTED	  	32Y25J6550167S1A	  	2565	  	CN25.65.501 67	  	VOI*A	
							
32Y25J020A	  	FULL PROVISIONS FOR LAVATORY D AND E	  	ACCEPTED	  	32Y25J4211510S1A	  	2540	  	CN25.42.115 10	  	VOI*A	
							
32Y25J019A	  	FULL PROVISIONS FOR GALLEY G5 INSTALLATION	  	ACCEPTED	  	32Y25J3111216S1A	  	2530	  	CN25.31.112 16	  	VOI*A	
							
32Y25J018A	  	INSTALLATION OF STOWAGE, UNDER BIN HEIGHT (BFE) SUPPLIER DRIESSEN	  	ACCEPTED	  	32Y25J2717040S1A	  	2524	  	CN25.27.170 40	  	VOI*A	
							
32Y25J017A	  	INSTALLATION OF STOWAGE BETWEEN LAVATORY G AND F (BFE) SUPPLIER DRIESSEN	  	ACCEPTED	  	32Y25J2717039S1A	  	2524	  	CN25.27.170 39	  	VOI*A	
							
32Y25J016A	  	INSTALLATION OF WINDSREENS FWD OF THE AFT PASSENGER DOOR (BFE) SUPPLIER DRIESSEN	  	ACCEPTED	  	32Y25J2614036S1A	  	2526	  	CN25.26.140 36	  	VOI*A	
							
32Y25J015A	  	CARGO HOLD CONFIGURATION	  	ACCEPTED	  	32Y25J5000100G1A	  	2550	  		  	VOI*A	
							
32Y25J014A	  	PROVISION FOR C/A SEAT AT LOCATION 9 - FORWARD OF AFT RH PASSENGER/CREW/SERVICE DOOR (SWIVEL TYPE)	  	ACCEPTED	  	32Y25J2210405S1A	  	2522	  	CN25.22.104 05	  	VOI*A	
							
32Y25J013A	  	PROVISION FOR C/A SEAT AT LOCATION 4 - FORWARD OF AFT LH PASSENGER/CREW/SERVICE DOOR (Y 495.8 MM)	  	ACCEPTED	  	32Y25J2210051S1A	  	2522	  	CN25.22.100 51	  	VOI*A	
							
32Y25J012A	  	C/A SEAT AT LOCATION 7 - AFT OF AFT LH DOOR (Y 753.75 MM) - WITH MODIFIED STOWAGE	  	ACCEPTED	  	32Y25J2212031S1A	  	2522	  	CN25.22.120 31	  	VOI*A	
							
32Y25J011A	  	INSTALLATION OF HOLDER FOR SOAP BOTTLES CELESTE	  	ACCEPTED	  	32Y25J4520118S1A	  	2540	  	CN25.45.201 18	  	VOI*A	
							
32Y25J010A	  	WASHBASIN IN ALTERNATE MATERIAL - STAINLESS STEEL (VARICOR WORK-TOP)	  	ACCEPTED	  	32Y25J4518003S1A	  	2545	  	CN25.45.180 03	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 10/14	

List of RFC/SCN
08/07/2011

													
SEARCH CRITERIA
 	  	 	
Family : A318/A319/A320/A321	  	MSN : 4403                        	  	 	
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y25J009A	  	INSTALLATION OF NON-ELECTRICAL GALLEY CATERING EQUIPMENT (BFE) (CHANGE 1)(HEAD OF VERS.)	  	ACCEPTED	  	32Y25J3513103S1A	  	2535	  	CN25.35.131 03	  	VOI*A	
							
32Y25J008A	  	INSTALLATION OF ELECTRICAL GALLEY CATERING EQUIPMENT (BFE) (CHANGE 1)	  	ACCEPTED	  	32Y25J3513004S1A	  	2535	  	CN25.35.130 04	  	VOI*A	
							
32Y25J006A	  	FROM DISPERSION-ADHESIVE TO DOUBLE-SIDED ADHESIVE TAPE	  	ACCEPTED	  	32Y25J2810302S1A	  	2528	  	CN25.28.103 02	  	VOI*A	
							
32Y25J005A	  	DELIVERY OF LOOSE PARTS FOR LATER INSTALLATION OF IFE CONTROL PANEL ON OHSC	  	ACCEPTED	  	32Y25J2412010S1A	  	2524	  	CN25.24.120 10	  	VOI*A	
							
32Y25J004A	  	CABIN LAYOUT DEFINITION	  	ACCEPTED	  	32Y25J2000100G1A	  	2520	  		  	VOI*A	
							
32Y25J003A	  	CABIN EMERGENCY EQUIPMENT	  	ACCEPTED	  	32Y25J0000100G1A	  	2500	  		  	VOI*A	
							
32Y25J002A	  	IFE CREW PANEL STRUCTURAL PROVISION IN ENHANCED OHSC - PANASONIC	  	ACCEPTED	  	32Y25J2413229S1A	  	2524	  	CN25.24.132 29	  	VOI*A	
							
32Y25J001A	  	INTERIOR COLOR SCHEME DEFINITION	  	ACCEPTED	  	32Y25J2350001S1A	  	2423	  	CN25.23.500 01	  	VOI*A	
							
32Y23J7110310A	  	SSCVE ALTERNATE EQUIPMENT - HONEYWELL	  	ACCEPTED	  	32Y23J7110310S1A	  	2371	  	CN23.71.103 10	  	VOI*A	
							
32Y23J009A	  	INSTAL. OF THIRD RMP WITH TURBO TUNING OF VHF CHANNELS and HF DATA ACTIV. CAPABILITY - THALES AVIONICS	  	ACCEPTED	  	32Y23J1310106S1A	  	2313	  	CN23.13.101 06	  	VOI*A	
							
32Y23J007A	  	COCKPIT HAND MICROPHONE ALTERNATE EQUIPMENT - HOLMBERG	  	ACCEPTED	  	32Y23J5013804S1A	  	2350	  	CN23.50.138 04	  	VOI*A	
							
32Y23J005A	  	FLASHING STEWARD CALL LIGHT	  	ACCEPTED	  	32Y23J7314401S1A	  	2373	  	CN23.73.144 01	  	VOI*A	
							
32Y23J004A	  	PROVISION FOR VCC IN OHSC AFT OF DOOR 1 LH	  	ACCEPTED	  	32Y23J3610504S1A	  	2336	  	CN23.36.105 04	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 11/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA
 	  	 	
Family : A318/A319/A320/A321	  	                                     MSN : 4403	  	 	
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y23J003A	  	WIRING PROVISION FOR DIGITAL SERVER SYSTEM (SC-A AND CREW PANEL) - PANASONIC	  	ACCEPTED	  	32Y23J3600701S1A	  	2336	  	CN23.36.007 01	  	VOI*A	
							
32Y23J002A	  	CIDS CHANGES	  	ACCEPTED	  	32Y23J7300100G1A	  	2373	  		  	VOI*A	
							
32Y23J001A	  	ENTERTAINMENT SYSTEM	  	ACCEPTED	  	32Y23J3600100G1A	  	2336	  		  	VOI*A	
							
32Y21J002A	  	NON INSTALLATION OF NEW RPCU	  	ACCEPTED	  	32Y21J3000020S1A	  	2130	  	CN21.30.000 20	  	VOI*A	
							
32Y11J016A	  	SECOND LANGUAGE FOR DOOR OPERATION EXTERNAL PLACARDS AND MARKINGS	  	ACCEPTED	  	32Y11J2010001S1A	  	1120	  	CN11.20.100 01	  	VOI*A	
							
32Y11J015A	  	ADDITIONAL LANGUAGE SPANISH ON CREW PLACARD	  	ACCEPTED	  	32Y11J3012212S1A	  	1130	  	CN11.30.122 12	  	VOI*A	
							
32Y11J013A	  	MLG TIRE INFLATING PLACARD (TAI)	  	ACCEPTED	  	32Y11J2210004S1A	  	1122	  	CN11.22.100 04	  	VOI*A	
							
32Y11J012A	  	ADDITIONAL EXTERNAL MARKINGS	  	ACCEPTED	  	32Y11J2012875S1A	  	1120	  	CN11.20.128 75	  	VOI*A	
							
32Y11J011A	  	INSTALLATION OF ADDITIONAL MANUFACTURER IDENTIFICATION PLATE ON REAR LH FUSELAGE (FAA REQUIREMENT)	  	ACCEPTED	  	32Y11J0010504S1A	  	1100	  	CN11.00.105 04	  	VOI*A	
							
32Y11J010A	  	AIR CONDITIONNNING PACKS OUTLET (RAM AIR)	  	ACCEPTED	  	32Y11J2012867S1A	  	1120	  	CN11.20.128 67	  	VOI*A	
							
32Y11J009A	  	RAM AIR TURBINE - BILINGUAL MARKINGS (ENGLISH / SPANISH)	  	ACCEPTED	  	32Y11J2011507S1A	  	1120	  	CN11.20.115 07	  	VOI*A	
							
32Y11J008A	  	SECOND LANGUAGE FOR SELECTED EXTERNAL PLACARDS AND MARKINGS (A319)	  	ACCEPTED	  	32Y11J2011001S1A	  	1120	  	CN11.20.110 01	  	VOI*A	
							
32Y11J007A	  	BILINGUAL CABIN PLACARDS PER CUSTOMIZED DEFINITION (32Y)	  	ACCEPTED	  	32Y11J3011032S1A	  	1130	  	CN11.30.110 32	  	VOI*A	
							
32Y11J006A	  	INSTALLATION OF ADDITIONAL PLACARD IN LAVATORIES (TAI)	  	ACCEPTED	  	32Y11J3012772S1A	  	1130	  	CN11.30.127 72	  	VOI*A	
							
32Y11J005A	  	INSTALLATION OF PLACARDS ON EMERGENCY EQUIPMENT CONTAINERS	  	ACCEPTED	  	32Y11J3012207S1A	  	1130	  	CN11.30.122 07	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 12/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		
					
Family : A318/A319/A320/A321	  	MSN : 4403                               	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y11J004A	  	SECOND LANGUAGE FOR RESIDUAL CABIN and CARGO PRESSURE DOOR WARNING PLACARDS	  	ACCEPTED	  	32Y11J0013601S1A	  	1100	  	CN11.00.136 01	  	VOI*A	
							
32Y11J003A	  	RVSM MARKINGS (TAI)	  	ACCEPTED	  	32Y11J2012507S1A	  	1120	  	CN11.20.125 07	  	VOI*A	
							
32Y11J001A	  	BILINGUAL EEPMS EXIT IDENTIFIER - ENGLISH BELOW (VERTICAL) AND SECOND LANGUAGE (HORIZ.) - AIRSIGNA	  	ACCEPTED	  	32Y11J3011136S1A	  	1130	  	CN11.30.111 36	  	VOI*A	
							
32Y03J001A	  	A319-133 INCREASED DESIGN WEIGHTS - MTOW TO 75.5 T, MLW TO 62.5 T, MZFW TO 58.5 T (WV 002)	  	ACCEPTED	  	32Y03J2043302S2A	  	0320	  	CN03.20.433 02	  	VOI*A	
							
32Y02J1012001A	  	15 KNOTS TAILWIND CERTIFICATION AT TAKE-OFF	  	ACCEPTED	  	32Y02J1012001S1A	  	0210	  	CN02.10.120 01	  	VOI*A	
							
32Y02J1011101A	  	COMPLIANCE WITH FAA TYPE CERTIFICATION REQUIREMENTS	  	ACCEPTED	  	32Y02J1011101S1A	  	0212	  	CN02.10.111 01	  	VOI*A	
							
32Y02J010A	  	ADAPT EXTERNAL LIVERY	  	ACCEPTED	  	32Y02J4010835S1A	  	0240	  	CN02.40.108 35	  	VOI*A	
							
32Y02J009A	  	REGISTRATION CODE NUMBER ON NLG DOOR	  	ACCEPTED	  	32Y02J4010829S1A	  	0240	  	CN02.40.108 29	  	VOI*A	
							
32Y02J008A	  	EXTERNAL LIVERY	  	ACCEPTED	  	32Y02J4010101S1A	  	0240	  	CN02.40.101 01	  	VOI*A	
							
32Y02J007A	  	AVIONICS EQUIPMENT TURNED INTO SSBFE (32Y)	  	ACCEPTED	  	32Y02J3513046S1A	  	0235	  	CN02.35.130 46	  	VOI*A	
							
32Y02J006A	  	SELLER SUPPLIED BUYER FURNISHED EQUIPMENT (CHANGE BFE INTO SFE) - 32Y	  	ACCEPTED	  	32Y02J3513563S1A	  	0235	  	CN02.35.135 63	  	VOI*A	
							
32Y02J005A	  	CERTIFICATION OF OVEN WITHOUT INSTALLATION	  	ACCEPTED	  	32Y02J1015002S1A	  	0210	  	CN02.10.150 02	  	VOI*A	
							
32Y02J004A	  	CERTIFICATION OF DYNAMICALLY TESTED PASSENGER SEATS - ALL CLASSES	  	ACCEPTED	  	32Y02J1010420S1A	  	0210	  	CN02.10.104 20	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 13/14	

List of RFC/SCN
08/07/2011

SEARCH CRITERIA	  		  		  		  		
					
Family : A318/A319/A320/A321	  	MSN : 4403                         	  		  		  		
SEARCH RESULT

RFC	  	RFC title	  	Status	  	Last SCN issue	  	ATA	  	Catalog item
(EPAC/TDU)	  	Fleet	
32Y02J003A	  	CERTIFICATION FOR HIGH ALTITUDE AIRPORT OPERATION UP TO 14100 FT (CJ)	  	ACCEPTED	  	32Y02J1012801S1A	  	0200	  	CN02.10.128 01	  	VOI*A	
							
32Y02J002A	  	EXTENDED ENVIRONMENTAL ENVELOPE (ISA + 40)	  	ACCEPTED	  	32Y02J1210801S1A	  	0212	  	CN02.12.108 01	  	VOI*A	
							
32Y02J001A	  	15 KNOTS TAILWIND CERTIFICATION AT LANDING	  	ACCEPTED	  	32Y02J1012002S1A	  	0210	  	CN02.10.120 02	  	VOI*A	

This document contains information which are confidential to Airbus and may not be disclosed to any third party without Airbus’ prior written consent. Airbus disclaims all liability resulting from the use of this document or any actual or alleged omission therefrom	  	Page 14/14	

Attachment 2
to Acceptance Certificate
[AIRS REPORT – DOCUMENTATION LISTING]

	  	App 3-5	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

							
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	  	AIRCRAFT	  	CHAPTER 1	
AIRBUS INDUSTRIE	  	TABLE OF CONTENTS	  	MSN: 4422	  	DATE : 26 AUG 2010	

CHAPTER	 	DESCRIPTION	  	NUMBER OF
PAGES	 	
	 	COVER PAGE	  	 	1	  	
0	 	ACCEPTANCE SHEET	  	 	1	  	
1	 	TABLE OF CONTENTS	  	 	1	  	
2	 	CONSTITUENT ASSEMBLIES	  	 	2	  	
3	 	EQUIPMENT	  	 	54	  	
4	 	CONFORMITY TO THE DESIGN STANDARD REQUIREMENTS	  	 	18	  	
A	 	RECORDABLE CONCESSIONS	  	 	1	  	
B	 	CONCESSIONS FOR CUSTOMER INFORMATION	  	 	1	  	

													
	  	Aircraft Inspection Report	  	Aircraft	  	 	Chapter 0	  	  	 	Page: 1/1	  	
	  	Acceptance sheet	  	A319 - 133
MSN: 4422	  	 	Date: 26 Aug 2010	  	  				
We, the undersigned representatives of AIRBUS PRODUCTION ORGANIZATION (EASA.210.0001), certify that this AIRCRAFT INSPECTION REPORT states the condition of aircraft-type A319 model -133 MSN 4422 to be delivered to the customer.
We hereby certify that:
 
 	•	 	All constituent assemblies in chapter 2 manufactured under the responsibility of the respective firms, were delivered under the cover of a release certificate according to the procedure agreed by the Competent Authorities.	
 
 	•	 	The aircraft conforms, except where indicated in this report, to the definition given by the Airbus configuration data-bases. This includes conformity to the type certificate definition as referenced in AI/EA-S document no. 413.1205/99 issue 02 dated 30 Jul 1999.	
 
 	•	 	All the required ground tests have been performed and are recorded in the relevant constituent assemblies inspection reports.	
 
 	•	 	Aircraft weighing is recorded in report reference EDGWX no. RP1024442 dated 16 Aug 2010.	

Established and Verified on 26 Aug 2010 by	 		 	Approved on 26 Aug 2010 by	
H. Petersen	 		 	M. Thompson	

			
Programme FAL Quality Department	  	Aircraft Conformity Department	

DUPLICATA	  	AIRCRAFT INSPECTION REPORT	 	AIRCRAFT
A319	 	CHAPTER 2	 	PAGE: 1	
AIRBUS INDUSTRIE	  	CONSTITUENT ASSEMBLIES	 	MSN: 4403	 	DATE: 05 AUG 2010	 		

PART NUMBER	  	DESCRIPTION	  	SERIAL NUMBER	  	                    	
D27310001000AT	  	SIDESTICK LH	  	RF	  	5403	  		
D27310002000AT	  	SIDESTICK RH	  	RF	  	5403	  		
D5211200300000	  	PASSENGER DOOR FRONT LH	  	HAL	  	4483	  		
D5211200300100	  	PASSENGER DOOR FRONT RH	  	HAL	  	4483	  		
D5211200200000	  	FRONT LEFT DOOR ARM	  	HAL	  	4483	  		
D5211200200100	  	FRONT RH DOOR ARM	  	HAL	  	4483	  		
D5241207700000	  	BOW DOOR FR 3-5	  	XAC	  	11710	  		
D5241207800000	  	DOOR FR 12-14	  	XAC	  	11710	  		
D5241207900000	  	DOOR FR 13-15	  	XAC	  	11710	  		
D5241208000000	  	DOOR FR 21-23	  	XAC	  	11710	  		
D5281016500000	  	NOSE LANDING GEAR DOOR FWD LH	  	CQ	  	11145	  		
D5281016500100	  	NOSE LANDING GEAR DOOR FWD RH	  	CQ	  	11145	  		
D5281016600000	  	NOSE LANDING GEAR DOOR REAR LH	  	CQ	  	11145	  		
D5281016600100	  	NOSE LANDING GEAR DOOR REAR RH	  	CQ	  	11145	  		
D5237175000600	  	CARGO COMPARTMENT DOOR FRONT	  	UH	  	14403	  		
NA28008-13	  	NOSE LANDING GEAR : EQUIPPED LEG	  	MD	  	B3948	  		
D9251504800000	  	115 VU EQUIPPED	  	PB	  	12564	  		
D5237236000600	  	CARGO COMPARTMENT DOOR REAR	  	UH	  	14403	  		
D5227900201200	  	EMERGENCY EXIT DOOR LH	  	UH	  	14403	  		
D5227900201300	  	EMERGENCY EXIT DOOR RH	  	UH	  	14403	  		
D5211300300000	  	PASSENGER DOOR REAR LH	  	LE	  	5012	  		
D5211300200000	  	REAR LH DOOR ARM	  	LE	  	6120	  		
D5211300300100	  	PASSENGER DOOR REAR RH	  	LE	  	5007	  		
D5211300200100	  	REAR RH DOOR ARM	  	LE	  	6120	  		
D5288016500600	  	MAIN LANDING GEAR DOOR LH	  	FB	  	5457	  		
D5288016500700	  	MAIN LANDING GEAR DOOR RH	  	FB	  	5462	  		
D0001039000000	  	REAR MOV. PYLON FAIRING LH	  	SC	  	5421	  		
4W5198EO1	  	ENGINE LH	  	IAE	  	V15528	  		
745-6001-575	  	DEMOUNTABLE POWER PLANT LH	  	ROH	  	10369001	  		
745-4000-503	  	FAN COWL LH (ENGINE LH)	  	SBP	  	7338001	  		
745-4000-510	  	FAN COWL RH (ENGINE LH)	  	SBP	  	7339001	  		

											
745-0002-513	  	FAN REVERSER LH (ENGINE LH)	  	ROH	  	10369001	  		  		
745-0002-517	  	FAN REVERSER RH (ENGINE LH)	  	ROH	  	10369001	  		  		
745-3400-507	  	AIR INLET (NOSE COWL) - LH ENGINE	  	SBP	  	3743001	  		  		
O92918000000	  	GENER.HARNESS.PYLON LEFT	  	RK	  	5403	  		  		
D0001039000100	  	REAR MOV. PYLON FAIRING RH	  	SC	  	5421	  		  		
4W5198EO1	  	ENGINE RH	  	IAE	  	V15543	  		  		
745-6001-575	  	DEMOUNTABLE POWER PLANT-RH	  	ROH	  	10370001	  		  		
745-4000-503	  	FAN COWL LH (ENGINE RH)	  	SBP	  	7342001	  		  		
745-4000-510	  	FAN COWL RH (ENGINE RH)	  	SBP	  	7343001	  		  		
745-0002-515	  	FAN REVERSER LH (ENGINE RH)	  	ROH	  	10370001	  		  		
745-0002-519	  	FAN REVERSER RH (ENGINE RH)	  	ROH	  	10370001	  		  		
745-3400-507	  	AIR INLET (NOSE COWL) - RH ENGINE	  	SBP	  	3744001	  		  		
D92918000001	  	GENER.HARNESS.PYLON RIGHT	  	RK	  	5403	  		  		
D5248550000800	  	ACCESS DOOR LH SECT. 19.1	  	RU	  	14400	  		  		
D5248570001000	  	ACCESS DOOR RH SECT. 19.1	  	RU	  	14411	  		  		
D5775001700438A	  	SPOILER N 1 LH	  	SAA	  	10363	  		  		

									
DUPLICATA	  	AIRCRAFT INSPECTION REPORT	 	AIRCRAFT
A319	 	CHAPTER 2	 	PAGE: 2	
AIRBUS INDUSTRIE	  	CONSTITUENT ASSEMBLIES	 	MSN: 4403	 	DATE: 05 AUG 2010	 		

PART NUMBER	  	DESCRIPTION	  	SERIAL NUMBER	  	                    	
D5775001900438A	  	SPOILER N 2 LH	  	SAA	  	10363	  		
D5775002000438A	  	SPOILER N 3 LH	  	SAA	  	10363	  		
D5775002100438A	  	SPOILER N 4 LH	  	SAA	  	10363	  		
D5775002200438A	  	SPOILER N 5 LH	  	SAA	  	10363	  		
D5757065005000	  	INNER FLAP EQUIPPED LH	  	TB	  	14403	  		
D5755100602801	  	FLAP TRACK N 2 LH	  	DTL	  	10143	  		
D5755100703201	  	FLAP TRACK N 3 LH	  	DTL	  	10146	  		
D5755101002801	  	FLAP TRACK N 4 LH	  	DTL	  	10144	  		
D5765000000238A	  	AILERON LH	  	SAB	  	22490	  		
D5757200100600	  	FLAP TRACK NO.1 LH	  	FA	  	9734	  		
D5757420201600	  	OUTER FLAP LH	  	TB	  	14403	  		
201581001	  	MAIN LANDING GEAR LH	  	MDL	  	4403	  		
D5746091000200	  	SLAT 1 ASSY LH	  	SA	  	5412P	  		
D5746092000200	  	SLAT 2 ASSY LH	  	SA	  	5409P	  		
D5746093000400	  	SLAT 3 ASSY LH	  	SA	  	5373P	  		
D5746094000400	  	SLAT 4 ASSY LH	  	SA	  	5407P	  		
D5746095000400	  	SLAT 5 ASSY LH	  	SA	  	5409P	  		
D5775001700538A	  	SPOILER N 1 RH	  	SAA	  	10363	  		
D5775001900538A	  	SPOILER N 2 RH	  	SAA	  	10363	  		
D5775002000538A	  	SPOILER N 3 RH	  	SAA	  	10363	  		
D5775002100538A	  	SPOILER N 4 RH	  	SAA	  	10357	  		
D5775002200538A	  	SPOILER N 5 RH	  	SAA	  	10363	  		
D5757065005100	  	INNER FLAP EQUIPPED RH	  	TB	  	14403	  		
D5755100603001	  	FLAP TRACK N 2 RH	  	DTL	  	10142	  		
D5755100703401	  	FLAP TRACK N 3 RH	  	DTL	  	10140	  		
D5755101003001	  	FLAP TRACK N 4 RH	  	DTL	  	10141	  		
D5765000000338A	  	AILERON RH	  	SAB	  	22493	  		
D5757200100700	  	FLAP TRACK NO.1 RH	  	FA	  	9735	  		
D5757420201700	  	OUTER FLAP RH	  	TB	  	14403	  		
201581002	  	MAIN LANDING GEAR RH	  	MDL	  	4403	  		
D5746091000300	  	SLAT 1 ASSY RH	  	SA	  	5411P	  		
D5746092000300	  	SLAT 2 ASSY RH	  	SA	  	5410P	  		
D5746093000500	  	SLAT 3 ASSY RH	  	SA	  	5408P	  		
D5746094000500	  	SLAT 4 ASSY RH	  	SA	  	5409P	  		
D5746095000500	  	SLAT 5 ASSY RH	  	SA	  	5413P	  		
D0007550400000	  	VTP TOP COMPLETE	  	TS	  	5408	  		
D5547100400000	  	VERT. STABILIZER RUDDER	  	TS	  	5901	  		
D2727000104200	  	VERT. STABILIZER RUDDER CONTROL UNIT	  	TV	  	6412	  		
D5528000200000	  	HORIZONTAL STABILISER ELEVATOR LH	  	IC	  	6870	  		
D5528000200100	  	HORIZONTAL STABILISER ELEVATOR RH	  	IC	  	6874	  		

Appendix 4
to Aircraft Lease Agreement
LEASE SUPPLEMENT
(MSN              )
LEASE SUPPLEMENT dated as of             , 20    (this “ Lease Supplement ”), between CIT AEROSPACE INTERNATIONAL, as Lessor (“ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS), as Lessee (“ Lessee ”).
Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of 30 November 2009 (the “ Lease ” and the defined terms therein being hereinafter used with the same meaning). The Lease provides for the execution and delivery of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof.
The Lease and this Lease Supplement relate to the Aircraft as more precisely described below and in the Acceptance Certificate. A counterpart of the Lease is attached hereto and shall be filed together with this Lease Supplement with the Aeronautics Authority.
In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under and pursuant to the Lease the Aircraft described below, together with the Aircraft Documents described in the Agreement (the “ Delivered Aircraft ”):

Aircraft Model:	  	Airbus A319-100	  				
			
Manufacturer’s Serial Number:	  	 	  				
			
Installed Engines	  	Two (2) IAE V2527M-A5 Engines	  				
			
Manufacturer’s Serial	  	 	  	 	and	  	
			
Numbers:	  	 	  				
			
Mexican Registration Mark	  	 	  				
2. The Delivery Date of the Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof.
3. By execution and delivery of this Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term subject to the Lease.
4. The amount of Basic Rent for the Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.

	  	App 4-1	  	APPENDIX 4
LEASE SUPPLEMENT	

5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of the Lease, (ii) the Aircraft is insured as required by the Lease, (iii) the representations and warranties of Lessee referred to in Article 9 of the Lease are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease, and (v) the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Lease.
6. THIS LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7. This Lease Supplement may be executed in any number of counterparts; each of such counterparts, shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Lease Supplement; provided, that to the extent, if any, that this Lease Supplement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the “Original”, which shall be identified on the signature page thereof.
8. This Lease Supplement supplements and forms a part of the Lease. The Lease and all Operative Documents, as supplemented hereby, are hereby ratified, approved and confirmed in all respects.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

	  	App 4-2	  	APPENDIX 4
LEASE SUPPLEMENT	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	   	 		 	By;	 	   	
					
Name:	 	   	 		 	Name:	 	   	
					
Title:	 	   	 		 	Title:	 	   	
					
By:	 	   	 		 		 	 	
					
Name:	 	   	 		 		 	 	
					
Title:	 	   	 		 		 	 	
[MSN              ]
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

	  	App 4-3	  	APPENDIX 4
LEASE SUPPLEMENT	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	   	 		 	By:	 	   	
					
Name:	 	   	 		 	Name:	 	   	
					
Title:	 	   	 		 	Title:	 	   	
					
By:	 	   	 		 		 	 	
					
Name:	 	   	 		 		 	 	
					
Title:	 	   	 		 		 	 	
[MSN              ]
TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY INTEREST IN THIS DOCUMENT MAY BE PERFECTED THROUGH THE TRANSFER OR POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT MARKED “CHATTEL PAPER ORIGINAL”.

	  	App 4-4	  	APPENDIX 4
LEASE SUPPLEMENT	

Appendix 5
to Aircraft Lease Agreement
PARTICIPATION AGREEMENT
This Participation Agreement is made as of this             day of             20    (the “ Participation Agreement ”)
BETWEEN
C.I.T. LEASING CORPORATION , a corporation organised and existing under the laws of Delaware, whose address and principal place of business is at 505 Fifth Avenue, New York, New York 10017 (“ Buyer ”), and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS) , a company organised and existing under the laws of the United Mexican States, whose address and principal place of business is at Prolongacion Paseo de la Reform No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).
RECITALS
(A) Pursuant to the Airbus A320 Family and A350 Purchase Agreement dated as of August 17, 2005 between CIT Leasing and Airbus S.A.S. (“ Airbus ”), as further amended (the “ Purchase Agreement ”), Buyer has agreed to purchase from Airbus certain Airbus A319-100 aircraft, including the aircraft bearing as of today manufacturer’s serial number [ ] and scheduled for delivery in the month of August 2010 (the “ Aircraft ”);
(B) Pursuant to a purchase agreement assignment to be entered into between Buyer and CIT Aerospace International, an Irish unlimited company with its registered office at 1 Stokes Place, St. Stephen’s Green, Dublin 2, Ireland (“ Lessor ”) and to be consented to by Airbus, Buyer will assign certain of its rights, title and interests with respect to the Aircraft to Lessor (including, without limitation the right to take title to the Aircraft);
(C) Pursuant to the Aircraft Lease Agreement between Lessor and Lessee dated as of 30 November 2009 (the “ Lease Agreement ”), Lessor has agreed to lease the Aircraft to Lessee;
(D) Buyer and Lessee have agreed to enter into this Participation Agreement.
IT IS NOW HEREBY AGREED AS FOLLOWS:
1. Authorisation .
(a) Delivery : Buyer hereby authorises Lessee to inspect, pursuant to Clause 7.1 of the Purchase Agreement, a copy of which is attached in Appendix 3 hereto, the manufacture of the Aircraft and the materials and parts thereto, and to attend and observe the acceptance tests of the Aircraft referred to in Clause 8.1 of the Purchase Agreement, a copy of which is attached in Appendix 3 hereto.
(b) Customer Support : Buyer hereby authorises Lessee to receive pursuant to Clause 14 of the Purchase Agreement the technical publications set forth in Appendix 2 hereto (collectively the “ Customer Support ”).

	  	App 5-1	  	APPENDIX 5
PARTICIPATION AGREEMENT	

2. Effectivity of Participation Agreement . This Participation Agreement shall be effective from the date hereof until the earliest to occur of (i) receipt by Airbus of written notice from Buyer of the occurrence of an Event of Default as defined in the Lease Agreement, or (ii) the term of the Lease Agreement expires, or (iii) the Lease Agreement is otherwise terminated for any reason, or (iv) the Purchase Agreement (as it relates to the Aircraft) is terminated, or (v) the transfer of title to the Aircraft by Airbus to Buyer or its assignee. Notice of the expiration or termination of the Lease Agreement will be given in writing by Buyer to Airbus (with a copy to Lessee) and notice of the termination of the Purchase Agreement (as it relates to the Aircraft) will be given in writing by Buyer or Lessor to Lessee. Notwithstanding the foregoing, Clauses 3(a) and (b) hereof (and any other Clauses contained herein that are necessary to give continued effect to Clauses 3(a) and (b)) shall continue to be effective after, and shall survive the termination of, this Participation Agreement.
3. Conditions of Participation . This Participation Agreement is made subject to the following conditions:
(a) Lessee hereby agrees to be bound by and to comply with Clauses 7.2 and 8.5 of the Purchase Agreement, copies of which are attached in Appendix 3 hereto, to the extent of (A) injury to or death of any Lessee representative, (B) loss or damage to property of any Lessee representatives and (C) liabilities, damages, losses, costs and expenses of Airbus and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of Lessee’s representatives, as if Lessee had been named “Buyer” of the Aircraft under such agreement.
(b) So long as this Participation Agreement is in full force and effect, Lessee and not Buyer will be responsible for the liabilities and obligations set forth in clause 3(a) above.
(c) For the avoidance of doubt, even while this Participation Agreement in full force and effect, Buyer, to the exclusion of Lessee, will remain responsible for compliance with Clauses 7.2 and 8.5 of the Purchase Agreement to the extent of (i) injury to or death of any Buyer representative, (ii) loss or damage to property of any Buyer representative and (iii) liabilities, damages, losses, costs and expenses of Airbus and its associated subcontractors, officers, agents and employees arising out of or caused by the willful misconduct or gross negligence of Buyer’s representatives.
(d) Except with respect to events occurring prior to termination of the Participation Agreement, upon termination of this Participation Agreement, Buyer shall once again be bound by Clauses 7.2 and 8.5 of the Purchase Agreement with respect to the Aircraft.
(e) Other than with respect to the obligations assumed by Lessee under this Participation Agreement as set forth in clause 3(a) above, Buyer shall remain fully bound by all provisions of the Purchase Agreement.
(f) Nothing contained herein shall subject Airbus to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement or, except to the extent set forth in clauses 3(a) and (b) above, modify in any respect whatsoever its contractual rights under the said Purchase Agreement.
(g) Lessee shall not be appointed as Buyer’s agent and shall not be permitted to act on behalf or in place of Buyer without the express written authorisation of Buyer and nothing contained herein shall be construed as to give such authorisation.

	  	App 5-2	  	APPENDIX 5
PARTICIPATION AGREEMENT	

4. Notification .
(a) This Participation Agreement shall be notified to Airbus by courier service promptly after the execution hereof. Airbus shall not be deemed to have received notice of any of the provisions hereof prior to receipt of notice as provided in this clause 4(a) in the form of Appendix 1 hereto. Upon receipt of such notice, Airbus shall promptly countersign and return such acknowledgment to Buyer, as set out in Appendix 1 hereto.
(b) On termination of this Participation Agreement as provided in clause 2 hereof, Buyer shall promptly notify Airbus thereof in writing, addressed as aforesaid. Airbus shall not be deemed to have knowledge of any change in the authority of Buyer or Lessee, as the case may be, or of an Event of Default or the expiration or termination of the term of the Lease Agreement until Airbus has received notice thereof in writing, addressed as aforesaid.
(c) All notices and requests required or authorised under this Participation Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognised courier service or by telecopy directed as set forth below:
Buyer shall be addressed at:
C.I.T. Leasing Corporation
11 West 42nd Street, 12th Floor
New York, New York 10036
Attention:             Chief Counsel — Transportation Finance
Telephone:           +1 (212) 461 5507
Telecopy:             +1 (212) 461 5402
Lessee shall be addressed at:
Concesionaria Vuela Compañía de Aviación, S.A. de C.V
Prolongación Paseo de la Reforma No. 490
Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
Attention: Director Jurídico
Telephone: +52 (55) 5261-6412
Telecopy: +52 (55) 5211 9613
Airbus shall be addressed at:
Airbus S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention: V.P. Contracts
Telecopy: +33 5 61 93 49 81
or at such other address or to such other person as the party receiving the notice or request may designate from time to time.

	  	App 5-3	  	APPENDIX 5
PARTICIPATION AGREEMENT	

Such notice or request shall be deemed to be effective in the case of (i) personal delivery, on the date upon which personally delivered, (ii) delivery by courier, on the date of receipt or (iii) telecopy transmission, on the date of confirmation of successful transmission.
5. Further Assurances . Both parties hereto agree that from time to time after the execution and delivery of this Participation Agreement, the parties will, at their own cost, promptly and duly execute and deliver such further documents and instruments and take such further actions which may be necessary in order to effectuate fully the intent and purposes of; and the transactions contemplated by, this Participation Agreement.
6. Modification, Revision and Substitution of Entitlement . For the avoidance of doubt, Lessee agrees that it will not, and does not have the power to enter into any agreement that would amend, modify, supplement, rescind, cancel or terminate the Purchase Agreement without the prior written consent of Buyer and Airbus. Lessee further agrees that it will not assign or delegate to any third party the rights granted to it, or the performance of the obligations imposed on it, under this Participation Agreement without the prior consent of Buyer and Airbus, which consent shall not be unreasonably withheld. Nothing contained herein shall be interpreted to limit, or restrict in any manner, the right or obligation of Buyer to perform its obligations or exercise its rights under the Purchase Agreement with respect to the manufacture or delivery of the Aircraft.
7. Confidential Treatment . Lessee agrees that it will not disclose, directly or indirectly, any of the terms of this Participation Agreement and/or the Purchase Agreement to any third party without the prior written consent of Buyer and Airbus except (a) as required by applicable law or governmental regulation or (b) to Lessee’s professional advisors. Any disclosure as contemplated by clause (b) of the preceding sentence shall include a requirement that the entity to which such information is disclosed shall be subject to obligations of non-disclosure substantially the same as those contained herein.
8. Amendments . This Participation Agreement shall not be amended, modified supplemented or terminated except in a writing signed by each party hereto and acknowledged by Airbus.
9. Counterparts . This Participation Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
10. Severability . The covenants, warranties, representations and agreements contained herein are separate and severable and the invalidity or unenforceability of any one or more such covenants, warranties, representations or agreements shall not affect the validity or enforceability of any other covenant, warranty, representation or agreement contained herein.
11. Entire Agreement . This Participation Agreement constitutes, on and as of the date hereof, the entire agreement of the parties hereto with respect to the subject matter hereof, and all prior or other contemporaneous understanding or agreements, whether written or oral, between the parties hereto with respect to the subject matter hereof are hereby superseded in their entireties.
12. Assignment . The rights and obligations under this Participation Agreement are personal to the parties and shall not be assigned, transferred, sold or otherwise disposed of by either of the parties hereto.
13. Governing Law and Jurisdiction . This Participation Agreement shall be governed by and construed in accordance with the laws of the state of New York. The parties hereto irrevocably agree that the federal or state courts located in the Borough of Manhattan, New York City, New York shall have jurisdiction to settle any disputes arising out of or in connection with this Agreement.

	  	App 5-4	  	APPENDIX 5
PARTICIPATION AGREEMENT	

IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be execute on their behalf by their duly authorised representatives.

C.I.T. LEASING CORPORATION	  	 	  	CONCESIONARIA VUELA COMPAÑÍA DE
 AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)	
					
By:	 	 	  		  	By:	  	 	
					
Name:	 	 	  		  	Name:	  	 	
					
Title:	 	 	  		  	Title:	  	 	
					
	 		  		  	By:	  	 	
					
	 		  		  	Name:	  	 	
					
	 		  		  	Title:	  	 	

	  	App 5-5	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 1

BY COURIER	  	Date:             ,             	
AIRBUS S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention:             V.P. Contracts
Fax:                       +33 5 61 93 49 81
 
Re:	C.I.T. Leasing Corporation / Concesionaria Vuela Compañía de Aviación, S.A. de (d/b/a Volaris): Participation Agreement	
Dear Sirs,
Pursuant to Clause 4(a) of the Participation Agreement between C.I.T. Leasing Corporation and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) dated as of             20        , we advise you that, pursuant to the Participation Agreement (a copy of which is attached hereto), Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) has been authorised by Buyer to participate with respect to the production, testing and delivery of the Aircraft. This authorisation shall be effective on acknowledgment of this letter by you.
We confirm for your benefit the provisions of Clauses 3(c), 3(d), 3(e) and 3(f) contained therein.

Yours faithfully	

for and on behalf of	
C.I.T. Leasing Corporation	
cc: Concesionaria Vuela Compañía de Aviación S.A. de C.V. (d/b/a Volaris)
Airbus S.A.S. confirms receipt of this
notice and agrees to the terms of Clause 3
of the Participation Agreement.

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

	  	App 5-6	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 2
TECHNICAL PUBLICATION
As listed in Exhibits             and             to the Purchase Agreement and set forth on the following             (    ) pages.

	  	App 5-7	  	APPENDIX 5
PARTICIPATION AGREEMENT	

APPENDIX 3
Copies of Clauses 7.1, 7.2, 8.1 and 8.5 of the Purchase Agreement

	  	App 5-8	  	APPENDIX 5
PARTICIPATION AGREEMENT	

Appendix 6A
to Aircraft Lease Agreement
LESSOR’S CONDITIONS PRECEDENT POST-DELIVERY ITEMS
Airbus A319-100
MSN             
Lease Execution Date: 30 November 2009
Scheduled Delivery Date: August 2010

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Chattel Paper Original of Lease (ONE COPY ONLY - DELIVERED TO LESSOR)	  	Lease Execution Date	  		
				
2.	  	Lease Agreement, with Lessee’s signatures ratified before notary public	  	Lease Execution Date	  		
				
3.	  	Participation Agreement	  	Lease Execution Date	  		
				
4.	  	Guarantee, with Guarantor’s signatures ratified before notary public	  	Lease Execution Date	  		
				
5.	  	Opinion of Lessee’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
6.	  	Opinion of Guarantor’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
7.	  	Powers of Attorney evidencing the appointment of Lessee’s and Guarantor’s Agent for Service of Process pursuant to Section 26.3 of the Lease and Section 15 of the Guarantee, respectively, together with Powers of Attorney evidencing such appointment duly notarised under and pursuant to Mexican Law	  	Lease Execution Date	  		
				
8.	  	Written evidence of company action authorising Lessee’s lease of the Aircraft and execution, delivery and performance of the Lease	  	Seven (7) Business Days after Lease Execution	  		
				
9.	  	Written evidence of company action authorising Guarantor’s execution, delivery and performance of the Guarantee	  	Seven (7) Business Days after Lease	  		

	  	App 6-1	  	APPENDIX 6
CONDITIONS PRECEDENT/POST-DELIVERY ITEMS	

							
Item
No.	  	Description	  	Date Due	  	Status	
10.	  	Incumbency Certificate of person or persons authorised to execute the Lease and related Operative Documents on behalf of Lessee	  	Seven (7) Business Days after Lease Execution	  		
				
11.	  	Incumbency Certificate of person or persons authorised to execute the Guarantee on behalf of Guarantor	  	Seven (7) Business Days after Lease Execution	  		
				
12.	  	Security Deposit installment of ***** due under Section 2.2 of Appendix 2B	  	04 January 2010	  		
				
13.	  	Pledge Agreements as required under Sections 4.2 and 13.3(a)(i)	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
14.	  	Such financial information concerning each of Lessee and Guarantor and other documents and matters incident to the foregoing as Lessor may reasonably request, all in form reasonably satisfactory to Lessor	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
15.	  	Power of Attorney evidencing the authority of Lessees representatives designated to accept delivery of the Aircraft and execute the Lease Supplement and Acceptance Certificate on behalf of Lessee at Delivery, duly notarised under and pursuant to Mexican Law	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
16.	  	Letter of Undertaking executed by independent aircraft insurance brokers and, if applicable, reinsurance brokers, each acceptable to Lessor, together with certificates of insurance and, if applicable, reinsurance, evidencing the insurances required to be maintained by Lessee under the Lease	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
17.	  	Application for Registration of the Aircraft with the DGAC duly executed by Lessee, together with the Lease and all other relevant Operative Documents to be recorded thereunder and Spanish translations thereof, certified by court-approved translator	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
18.	  	Evidence of Lessee having registered as Transacting User Entity (“TUE”) with the IR and provision of the DGAC access codes necessary in order to complete the appropriate IR registrations. In connection with the foregoing, Lessor shall cooperate with Lessee to obtain the DGAC access codes and shall provide Lessee with such documents as Lessee may reasonably request in connection with the foregoing.	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
19.	  	First payment of Basic Rent in accordance with Section 3.2 of the Lease	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
				
20.	  	Security Deposit balance payment due under Section 2.3 of Appendix 2B	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6-2	  	APPENDIX 6
CONDITIONS PRECEDENT/POST-DELIVERY ITEMS	

							
Item
No.	  	Description	  	Date Due	  	Status	
21.	  	Acceptance Certificate	  	Delivery Date	  		
				
22.	  	Chattel Paper Original of Lease Supplement (ONE COPY ONLY – DELIVERED TO LESSOR)	  	Delivery Date	  		
				
23.	  	Lease Supplement, with Lessee’s signatures ratified before notary public	  	Delivery Date	  		
				
24.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / LBA	  	Delivery Date	  		
				
25.	  	Copy of Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority	  	Delivery Date	  		
				
26.	  	Copy of provisional Certificate of Registration for the Aircraft	  	Delivery Date	  		
				
27.	  	Evidence of Registration of the Aircraft, the Lease and related interests with the IR	  	Delivery Date	  		
				
28.	  	An opinion in form acceptable to Lessor from Lessor’s special counsel in the State of Registration confirming, among other things the due and proper registration of the Aircraft in the State of Registration and with the IR.	  	Delivery Date	  		
				
29.	  	An irrevocable power of attorney executed by Lessee in a form prescribed by Lessor, appointing Lessor or any other Person selected by Lessor as attorney-in-fact for Lessee to take all necessary actions on behalf of Lessee to obtain possession of and to remove the Aircraft from the jurisdiction of the State of Registration and from any other jurisdiction where the Aircraft may be located and/or registered and to de-register the Aircraft from the Register upon the cancellation, termination, or expiration of this Lease	  	Delivery Date	  		
				
30.	  	A duly executed irrevocable De-Registration and Export Request Authorisation ( IDERA ) for filing with the IR	  	Delivery Date	  		
				
31.	  	Letters addressed (1) to air traffic control authority in the State of Registration, (2) in blank to relevant air traffic control authorities and airport authorities where Lessee operates or intends to operate the Aircraft and (3) to Eurocontrol (if the Aircraft is operated to or over Europe), authorising the recipient to issue to Lessor, upon Lessor’s request made from time to time, a statement of account of all sums due by Lessee to the authority with request to the Aircraft and which letters shall survive the cancellation, termination and expiration of the Lease	  	Delivery Date	  		
				
32.	  	A certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or an Irish Revenue Form VAT 60B (or applicable successor form) with respect to the Lease, as requested by Lessor, to enable Lessor to comply with applicable Laws relating to VAT	  	Delivery Date	  		
				
33.	  	Follow up opinion of Lessee’s counsel in form and substance reasonably acceptable to Lessor	  	Delivery Date	  		
				
34.	  	Such other certificates, documents, opinions and agreements relating to the transactions contemplated by or related to this Lease and the other Operative Documents, as may be necessary or reasonably requested by Lessor	  	Delivery Date	  		
				
35.	  	Copy of permanent Certificate of Registration for the Aircraft showing due registration in the name of Lessor as owner and lessor and Lessee as lessee	  	Ninety (90) days following the Delivery Date	  		

	  	App 6-3	  	APPENDIX 6
CONDITIONS PRECEDENT/POST-DELIVERY ITEMS	

Appendix 6B
to Aircraft Lease Agreement
LESSEE’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-100
MSN             
Lease Execution Date: 30 November 2009
Scheduled Delivery Date: August 2010

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Lease Agreement	  	Lease Execution Date	  		
				
2.	  	Power of Attorney evidencing the authority of Lessor’s representatives designated to execute the Lease and the Lease Supplement on behalf of Lessor	  	Lease Execution Date	  		
				
3.	  	Lease Supplement	  	Delivery Date	  		
				
4.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA/LBA	  	Delivery Date	  		
				
5.	  	Assignment of Warranties (Airframe) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
6.	  	Consent to Assignment of Warranties (Airframe) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
7.	  	Assignment of Warranties and Product Support (Engines) substantially in the form appearing in Appendix 8	  	Delivery Date	  		
				
8.	  	Notice to Engine Manufacturer of Assignment of Warranties and Product Support (Engines) substantially in the form appearing in Appendix 8	  	Delivery Date	  		

	  	App 6-4	  	APPENDIX 6
CONDITIONS PRECEDENT/POST-DELIVERY ITEMS	

Appendix 7 to
Aircraft Lease Agreement
RETURN ACCEPTANCE CERTIFICATE
CIT Aerospace International (“ Lessor ”) hereby acknowledges, pursuant to the Aircraft Lease Agreement made between Lessor and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”) dated as of 30 November 2009 (the “ Lease ”), that on this              day of                      20      , at          :              GMT it has received from Lessee possession of the following Aircraft. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.

1.      Aircraft Details	
	
(a)     Airframe	
	
Aircraft Model:                                     Airbus A319-100	
	
Manufacturer’s Serial Number:                                                            	
	
Airframe Maintenance Status:	
	
Total Flight Hours:                             	
Total Cycles:                             	
	
Total Flight Hours Since Last 6 Year HMV Check:                             	
Total Cycles Since Last 6 Year HMV Check:                             	
Date Last 6 Year HMV Check Accomplished:                             	
	
Total Flight Hours Since Last 12 Year HMV Check:                             	
Total Cycles Since Last 12 Year HMV Check:                             	
Date Last 12 Year HMV Check Accomplished:                             	
	
Total Flight Hours Since Last C-Check:                             	
Total Cycles Since Last C-Check:                             	
Date Last C-Check Accomplished:                             	
	
(b)     Engines (Installed)	
	
Engine Type                                                     IAE V2527M-A5	
	
Manufacturer’s Serial                                                                    and	
Numbers:                                                                                                       	
	
Maximum Takeoff Thrust                                                          lbs.	
Rating:	

	  	App 7-1	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

	
Engines Maintenance Status:	
	
Position 1	
	
ESN:                                     	
Total Flight Hour                                     	
Total Cycles:                                     	
Total Flight Hours Since Last Engine Restoration:                                     	
Total Cycles Since Last Engine Restoration:                                     	
Date of Last Engine Restoration:                                     	
	
Position 2	
	
ESN:                                     	
Total Flight Hours:                                     	
Total Cycles:                                     	
Total Flight Hours Since Last Engine Restoration:                                     	
Total Cycles Since Last Engine Restoration:                                     	
Date of Last Engine Restoration:                                     	
	
(c)     APU (Installed)	
	
APU Manufacturer & Model:                                     	
	
Manufacturer’s Serial Number:                                      and	

	
APU Maintenance Status:                                     	
	
Total APU Hours:                                     	
Total APU Cycles:                                     	
Total APU Hours Since Last Overhaul:                                     	
Total APU Cycles Since Last Overhaul:                                     	
Date of Last Overhaul:                                     	
	
(d)     Landing Gear (Installed)	
	
Manufacturer’s Serial Numbers                             Left Main:                         	
Right Main:                         	
Nose:                         	
	
Landing Gear Maintenance Status	
	
Left Main	
	
Total Flight Hours:                         	
Total Cycles:                         	
Total Flight Hours Since Last Overhaul:                         	
Total Cycles Since Last Overhaul:                         	
Date of Last Overhaul:                         	

	  	App 7-2	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

	
Right Main	
	
Total Flight Hours:                         	
Total Cycles:                         	
Total Flight Hours Since Last Overhaul:                         	
Total Cycles Since Last Overhaul:                         	
Date of Last Overhaul:                         	
	
Nose	
	
Total Flight Hours:                         	
Total Cycles:                         	
Total Flight Hours Since Last Overhaul:                         	
Total Cycles Since Last Overhaul:                         	
Date of Last Overhaul:                         	

			
(e)     Interior Configuration	 		 		
			
Seating	 	 	 		
			
Lavatories	 	 	 		
			
Galleys	 	 	 		
			
Passenger Service Units	 	 	 		
			
PSIU	 	 	 		

	
(f)      Aircraft Documents and Other Equipment	
	
As described in Attachment 1 to this Return Acceptance Certificate.	
	
(g)     Fuel On Board	
	
                                                          kgs.	
 
2.	Maintenance Reserves (check one)	
             There are no claims for reimbursement from the Maintenance Reserves outstanding and unpaid as of the date hereof.
or
             Claims for reimbursement from the Maintenance Reserves are outstanding as of the date hereof and are itemised or otherwise described in Attachment [        ] hereto.
 
3.	Return Acceptance	
The Aircraft and Aircraft Documents are hereby accepted by Lessor for return under the Lease subject to (i) the provisions of the Lease and (ii) the correction by Lessee (or procurement by Lessee at Lessee’s cost) within          days following the date hereof of the discrepancies specified in Attachment 3 hereto.

	  	App 7-3	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

4.	Termination of Lease	
Subject to the following paragraph, the Lease is hereby terminated without prejudice to Lessee’s continuing obligations and Lessor’s continuing rights under the Lease.
 
5.	Lessee’s Representations and Warranties	
Lessee represents and warrants that during the Lease Term all maintenance and repairs to the Aircraft and each Item of Equipment were performed in accordance with the requirements of the Lease.
 
6.	Governing Law	
THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	  	App 7-4	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance Certificate to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	CIT AEROSPACE INTERNATIONAL
Lessor	
					
By:	 	 	 		 	By:	 	 	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	 	 		 		 		
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		
				
[MSN                           ]	 		 		 		

	  	App 7-5	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 1 to Return Acceptance Certificate
Aircraft Documents and Equipment Inventory
Aircraft Documents
 
 	1.	                                                              	
 
 	2.	                                                              	
 
 	•	    	
 
 	•	    	
 
 	•	    	
Aircraft Manuals
 
 	1.	                                                              	
 
 	2.	                                                              	
 
 	•	    	
 
 	•	    	
 
 	•	    	
Loose Equipment
 
 	1.	                                                              	
 
 	2.	                                                              	
 
 	•	    	
 
 	•	    	
 
 	•	    	
Avionics Inventory
 
 	1.	                                                              	
 
 	2.	                                                              	
 
 	•	    	
 
 	•	    	
 
 	•	    	
Engine Life Limited Parts Status
Engine Serial Number: [            ]
Engine Serial Number: [            ]

	  	App 7-6	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 2 to Return Acceptance Certificate
Maintenance Reserve Claims Outstanding at Return
[ Write “None” if there are no claims outstanding ]

Type of Work	  	Service Provider	  	Invoice Amount	
—  	  	—  	  	—  	

	  	App 7-7	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 3 to Return Acceptance Certificate
Aircraft Discrepancies
[Write “None” if there are no Aircraft Discrepancies]

	  	App 7-8	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Appendix 8
to Aircraft Lease Agreement
FORMS

Form 1	  	Form of Aircraft Utilisation Report	
Form 2	  	Form of Quiet Enjoyment Letter	
Form 3	  	Form of Recognition of Rights (Engines)	
Form 4	  	Maintenance Status Report	
Form 5	  	Reserved	
Form 6	  	Form of ATC Authorisation Letter	
Form 7	  	Form of Lease Termination Agreement	
Form 8	  	Form of Assignment and Consent — Warranties (Airframe)	
Form 9	  	Form of Assignment and Consent — Warranties (Engines)	

	  	App 8-1	  	APPENDIX 8
FORMS	

Form 1
Form of Aircraft Utilisation Report
UTILISATION REPORT
Lessee: Concesionaria Vuela Compañía de Aviación S.A. de C.V. (d/b/a Volaris)
Date of Report:                      20    
Report Period:                      20     through                      20    
General Information

Aircraft Model: Airbus A319-100	 		  	Engine Type: IAE V2527M-A5	
			
Airframe Serial Number:                                        	 		  	Lease Engine 1 Serial Number:                            	
			
Lease APU Serial Number:                                   	 		  	Lease Engine 2 Serial Number:                            	
			
Lease Nose Landing Gear S/N:                            	 		  	Lease Left Main Gear S/N:                                  	
			
	 		  	Lease Right Main Gear S/N:                                	
			
Installed 1 Engine S/N:                                        	 		  	Installed 2 Engine S/N:                                             	
			
Installed APU S/N:                                               	 		  	Installed Nose Landing Gear S/N:                          	
			
Installed Left Main Gear S/N:                            	 		  	Installed Right Main Gear S/N:                                	
Utilisation Information – Airframe

Airframe Flight Hours:                                        	 		  	Airframe Cycles:                                                       	
			
Airframe Total FHSN:                                         	 		  	Airframe Total CSN:                                               	
			
Airframe Base:                                                      	 		  	Airframe Status:                                                       	
	 		  	[In Service; Check; etc.]	
Utilisation Information –Engines
Lease Engine 1 – Serial Number                         

FH During Report Period:                            	 		  	Cycles During Report Period:                        	
			
FH:Cycle Utilisation Ratio:      :1	 		  	Cycles Since New:                                          	
			
FH Since New:                                             	 		  	Cycles Since Restoration:                              	
			
FH Since Restoration:                                	 		  	Installed On MSN:                                          	
			
Airframe Position:                                      	 		  	Airframe Reg’n Mark:                                    	
	
Airframe Owner (if not Owner):                                                                                                                                          	

Removed From Service:                          (Date)	 		  	Current Location:                         	
	
Reason for Removal:                                                                                                                                                                	

	  	App 8-2	  	APPENDIX 8
FORMS	

Lease Engine 2 – Serial Number                         

FH During Report Period:                                         	 	Cycles During Report Period:                                   	
		
FH:Cycle Utilisation Ratio:        :1	 	Cycles Since New:                                                      	
		
FH Since New:                                                          	 	Cycles Since Restoration:                                         	
		
FH Since Restoration:                                              	 	Installed On MSN:                                                      	
		
Airframe Position:                                                      	 	Airframe Reg’n Mark:                                                  	
	
Airframe Owner (if not Owner):                                                                                                                                            	
		
Removed From Service:                  (Date)	 	Current Location:                                                        	
	
Reason for Removal:                                                                                                                                                              	
Installed Engine 1 – Serial Number                          (if not Lease Engine)

Engine Owner:                                              	  	Airframe Position:                                                  	
Installed Engine 2 – Serial Number                          (if not Lease Engine)

Engine Owner:                                              	  	Airframe Position:                                                    	
Utilisation Information –APU
Lease APU – S/N                     

		
APU Hours During Report Period:                         	 	APU Cycles During Report Period:                         	
		
APU Hours Since New:                                         	 	APU Cycles Since New:                                            	
		
APU Hours Since Overhaul:                                 	 	APU Cycles Since Overhaul:                                    	
		
Installed On MSN:                                                  	 	Removed From Service:                                  (Date) 	
		
Airframe Reg’n Mark:                                              	 	Current Location:                                                        	
	
Airframe Owner (if not Owner):                                                                                                                                      	
	
Reason for Removal:                                                                                                                                                            	
Installed APU – Serial Number                          (if not Lease APU)

APU Owner:                                                  	
Utilisation Information – Landing Gear
Lease Nose Landing Gear – S/N                         

	  	App 8-3	  	APPENDIX 8
FORMS	

			
FH During Report Period:                                         	 	Cycles During Report Period:                                         	
FH Since New:                                                            	 	Cycles Since New:                                                            	
FH Since Overhaul:                                                    	 	Cycles Since Overhaul:                                                      	
Removed From Service:                                  (Date)	 	Current Location:                                                              	
Reason for Removal:                                                                                                                                                                    	
	
Installed Nose Landing Gear — S/N             (if not Lease Nose Landing Gear)	
		
NLG Owner:                                                                	 		
	
Lease Left Main Landing Gear — S/N             	
		
FH During Report Period:                                         	 	Cycles During Report Period:                                         	
FH Since New:                                                           	 	FH Since Restoration:                                                      	
Cycles Since New:                                                    	 	Cycles Since Restoration:                                               	
Removed From Service:                                (Date)	 	Current Location:                                                            	
Reason for Removal:                                                                                                                                                                    	
	
Installed Left Main Landing Gear — S/N             (if not Lease Left Main Landing Gear)	
		
Left MLG Owner:                                                    	 		
	
Lease Right Main Landing Gear — S/N             	
		
FH During Report Period:                                       	 	Cycles During Report Period:                                         	
FH Since New:                                                          	 	FH Since Restoration:                                                      	
Cycles Since New:                                                    	 	Cycles Since Restoration:                                                	
Removed From Service:                                (Date)	 	Current Location:                                                            	
Reason for Removal:                                                                                                                                                                    	
	
Installed Right Main Landing Gear — S/N             (if not Lease Left Main Landing Gear)	
		
Right MLG Owner:                                                  	 		

	  	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. (D/B/A VOLARIS)

(Name)	
	  	 
(Title)	
	  	 
(Date)	

	  	App 8-4	  	APPENDIX 8
FORMS	

Form 2
Form of Quiet Enjoyment Letter

To:	  	[•]	
Dated:	  	[•]	
 
Airbus A319-100, msn [•], registration mark [•] (the “Aircraft”) and the Aircraft Lease Agreement dated as of 30 November 2009 between CIT Aerospace International (“Lessor”) and Concesionaria Vuela Compañía de Aviación S.A. de C.V. (d/b/a Volaris) (“Lessee”) relating to the Aircraft (the “Lease”)
Dear Sirs
1. Capitalised terms in this letter have the meanings given to them in the Lease.
2. Pursuant to Section 10.2(b) of the Lease, we confirm to you that neither we nor any person lawfully claiming through us will interfere with the quiet possession and use of the Aircraft by Lessee or any Permitted Sublessee throughout the Lease Term so long as no Event of Default has occurred and is continuing.
3. The foregoing undertaking is not to be construed as restricting our rights to dispose of the Aircraft in certain circumstances to such persons and on such terms as we consider appropriate, subject to any applicable provisions of the Lease and/or the Acknowledgement. However, if we become entitled to exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing we will dispose of the Aircraft expressly subject to and in accordance with the provisions of the Lease provided that the purchaser issues an undertaking to you that it will not interfere with the quiet possession and use of the Aircraft by you throughout the remaining term of the Lease and will be bound by the terms of the Lease as if named as Lessor thereunder.
4. To the extent we receive any funds as Security Deposits and/or Maintenance Reserves we will hold, apply, retain and return such amounts as provided in the Lease and in exercising our right under or in respect of the Lease, we shall be bound by the terms and conditions thereof.
5. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

[                                                               ]	
		
By:	 	 	
Name:	 	 	
Title:	 	 	

	  	App 8-5	  	APPENDIX 8
FORMS	

Form 3
Form of Recognition of Rights (Engines)
[ON THE LETTERHEAD OF THE OWNER/LESSOR/SECURED PARTY
OF THE AIRFRAME ON WHICH THE ENGINE IS BEING INSTALLED
[INSERT DATE]
CIT Aerospace International
3 George’s Dock
IFSC
Dublin 1
Ireland
Attention: Chief Counsel
 
Re:	Acknowledgment of ownership of and waiver of lien interest in one (1) IAE V2527M-A5 Aircraft Engine Bearing Manufacturer’s Serial Number                      (the “ Engine ”)	
Dear Sirs:
The undersigned,             (“ Secured Party ”), is the legal and beneficial owner of one (1) Airbus A3[    ]-[    ] aircraft bearing manufacturer’s serial number [            ] and [            ] registration mark [            ] (“ Secured Aircraft ”), which aircraft is on lease to Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (“ Lessee ”). [NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S INTEREST AS NECESSARY]
We understand that, pursuant to an aircraft lease agreement dated 30 November 2009 (“ Aircraft Lease ”) between CIT Aerospace International, as lessor (“ CIT ”) and Lessee; you are the owner of and have leased one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number [            ] and Mexican registration mark [            ] to Lessee and which lease includes the lease of one (1) IAE V2527M-A5 aircraft engine bearing manufacturer’s serial number [            ] (the “ Leased Engine ”). We have been advised by Lessee that it desires to install the Leased Engine on the Secured Aircraft.
At the request of Lessee and for its benefit and the benefit of CIT, Secured Party hereby (i) acknowledges and agrees that CIT is the owner and lessor to Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that Secured Party has not acquired or claimed nor will it acquire or claim, and hereby waives, releases and renounces any right, title or interest in the Leased Engine by reason of the Leased Engine being installed on the Secured Aircraft at any time and that the foregoing shall apply notwithstanding any contrary laws of accession, or the like, which may from time to time be enacted or in effect in any jurisdiction where the Leased Engine and/or Secured Aircraft may be located, and the same are expressly waived by Secured Party hereby, (iii) agrees not to impede or interfere with the exercise by CIT of its rights and remedies to regain possession of the Leased Engine pursuant to the Aircraft Lease, (iv) agrees that the foregoing acknowledgements and agreements of Secured Party shall inure to the benefit of CIT’s successors and assigns, and (v) if requested by CIT, consents to and agrees to cooperate with CIT (at no cost to Secured Party) in connection with the filing of any notices and registrations, in

	  	App 8-6	  	APPENDIX 8
FORMS	

form and substance reasonably satisfactory to Secured Party, of CIT’s interest in the Leased Engine with the applicable governmental authorities in the country of registration of the Secured Aircraft, the country of Lessee’s organisation and such other jurisdiction as CIT may deem appropriate and, if applicable, the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Sincerely,

	  	App 8-7	  	APPENDIX 8
FORMS	

Form 4
Maintenance Status Report — Required Information
 
1.	Airframe	
 
 	a.	Aircraft and Appliances Airworthiness Directive Summaries	
 	b.	Aircraft times and cycles log	
 	c.	Airframe Utilisation Report	
 	d.	Avionics Computerised inventory	
 	e.	CPCP Summary as may be applicable	
 	f.	Dent and Damage Chart	
 	g.	Emergency Equipment Layout Drawing	
 	h.	Fire Blocking Certification	
 	i.	Maintenance last done next due task listing	
 	j.	Life Limited Parts Summary	
 	k.	Interior Layout configuration	
 	l.	Maintenance Program Summary and Time Interval Summary-Upon request	
 	m.	Service Bulletin, Engineering Orders, Major Repair and Alteration Summaries	
 	n.	Scheduled Maintenance Checks Tally Sheets	
 	o.	Time Controlled Components Summary	
 
2.	Engines	
 
 	a.	Airworthiness Directive Summaries	
 	b.	Last Shop visit/Engine Restoration Mini Package	
 	c.	Current Disk Sheet	
 	d.	Date, Flight Hours and Cycles of Engine at last Engine install (including Airframe Flight Hours and Cycles)	
 	e.	Service Bulletin Status / Engineering Orders and MOD Summaries	
 	f.	Trend Monitor Readout for the three (3) months prior to the report	
 
3.	Landing Gear	
 
 	a.	Aircraft date, Flight Hours and Cycles at installation	
 	b.	Landing Gear (each) Overhaul/restoration date, Flight Hours and Cycles.	
 	c.	Life Limited Parts Summary	
 	d.	Last shop visit/Overhaul report	
 
4.	APU	
 
 	a.	Airworthiness Directive Summary	
 	b.	Last shop visit/Overhaul mini package report	
 	c.	Flight Hours and Cycles formula (as applicable if Hobbs not installed)	
 	d.	Aircraft/ APU date, APU Hours and APU Cycles at installation.	
 	e.	Life Limited Parts Summary	
 	f.	Service Bulletin Summary	

	  	App 8-8	  	APPENDIX 8
FORMS	

Form 5
[Reserved]

	  	App 8-9	  	APPENDIX 8
FORMS	

Form 6
Form of Air Traffic Control and Airport Authorities Letters
[LESSEE’S LETTERHEAD]
 
To:	All Relevant Air Traffic Control and Airport Authority	
Mexican General Department of Civil Aeronautics*
(Dirección General de Aeronáutica Civil ) 
Eurocontrol Organisation for the Safety of Air Navigation
Rue de la Fusée, 96
B-1130 Bruxelles
Belgium
 
 	*	To be used with the DGAC or any other Mexican authority only following the occurrence and continuance of an Event of Default	
 
 	Re	Air Navigation /Airport Charges – Airbus A319-100 Aircraft with Manufacturer’s Serial Number             and Mexican Registration Mark [*] (the “ Aircraft ”)	
Ladies and Gentlemen:
We hereby confirm that Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a Volaris) (the “ Lessee ”) has entered into an Aircraft Lease Agreement with CIT Aerospace International (“ CIT ”) dated as of 30 November 2009 (the “ Lease ”) with respect to the above-described Aircraft.
We wish to enable CIT, as lessor, to monitor the value of air navigation and other charges incurred by us in relation to the Aircraft.
We hereby irrevocably and unconditionally authorise you to release to CIT, as lessor, (or its duly authorised representatives) upon its request from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and to the extent the same might result in a lien upon the Aircraft, all other aircraft operated by Lessee.
This authorisation may only be revoked or amended by a written instruction signed by us and CIT.
Yours faithfully
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)

By:	 	 	
			
Name:	 		
Title:	 		

By:	 	 	
			
Name:	 		
Title:	 		

	  	App 8-11	  	APPENDIX 8
FORMS	

Form 7
Form of Lease Termination Agreement
LEASE TERMINATION
(MSN [*])
By execution hereof (this “ Lease Termination ”), the undersigned, CIT AEROSPACE INTERNATIONAL (“ CIT ”), as lessor, and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”), as lessee, acknowledge and agree that the Lease Agreement defined and described on Exhibit A attached hereto, has by its terms expired or has otherwise been cancelled or terminated, and release the Equipment, which is also defined and described on Exhibit A attached hereto, from the terms and conditions of such Lease Agreement.
This Lease Termination is without prejudice to the surviving rights of the parties under the Lease Agreement and nothing in this Lease Termination shall relieve either party from its obligations under the Lease Agreement which are still unsatisfied and/or from any of its obligations under the Lease Agreement which may be due after the date of this Lease Termination.
This Lease Termination may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Dated as of this      day of                      20    .

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V. ( D / B / A VOLARIS)	  		 	CIT AEROSPACE INTERNATIONAL
Lessor	
Lessee	  		 		 		
					
By:	 	 	  		 	By:	 	 	
Name:	 	 	  		 	Name:	 	 	
Title:	 	 	  		 	Title:	 	 	
					
By:	 	 	  		 		 		
Name:	 	 	  		 		 		
Title:	 	 	  		 		 		

	  	App 8-10	  	APPENDIX 8
FORMS	

EXHIBIT A
The Equipment
[TO BE COMPLETED AT LEASE TERMINATION]
The Lease Agreement
[TO BE COMPLETED AT LEASE TERMINATION]

	  	App 8-11	  	APPENDIX 8
FORMS	

Form 8
Form of Assignment of Warranties and Consent (Airframe)
This Assignment of Warranty and Support Rights is made this             day of             20            (the “ Assignment Agreement ”)
BETWEEN
 
(1)	CIT AEROSPACE INTERNATIONAL, an Irish company, whose office and principal place of business is at 3 George’s Dock, IFSC, Dublin 1, Ireland (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS), a Mexican company whose office and principal place of business is at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (“ Lessee ”).	
 
 	1.	Preamble . In connection with the lease by Lessor to Lessee of one Airbus A319-100 model aircraft bearing manufacturer’s serial number             (the “ Aircraft ”), reference is made to the following documents:	
 
 	(a)	the Airbus A320 Family and A350 Purchase Agreement between C.I.T. Leasing Corporation (“ CIT Leasing ”) and Airbus S.A.S. (“ Airbus ”) dated as of August 17, 2005, as the same may be further amended (the “ Purchase Agreement ”), partially assigned with respect to the Aircraft to Lessor pursuant to which Lessor agreed to purchase the Aircraft;	
 
 	(b)	the Aircraft Lease Agreement between Lessor and Lessee dated 30 November 2009 (the “ Lease Agreement ”); and	
 
 	(c)	the Participation Agreement between CIT Leasing and Lessee dated             , 200    (the “ Participation Agreement ”).	
 
 	2.	Assignment . Pursuant to the Lease, Lessor has leased the Aircraft to Lessee. Included in such Lease is a commitment by Lessor to assign to Lessee certain warranty and other rights related to the Aircraft under the Purchase Agreement. With effect from the actual delivery date of the Aircraft by Lessor to Lessee in respect of (a) through (c) below, Lessor hereby assigns to Lessee and Lessee accepts the assignment on the terms and conditions specified herein of the benefit of the following rights (the “ Rights ”) under the Articles of the Purchase Agreement indicated below (the “ Assigned Provisions ”) with respect to the Aircraft:	
 
 	(a)	Article 12 (Warranties and Service Life Policy);	
 
 	(b)	Article 13 (Patent and Copyright Indemnity); and	
 
 	(c)	Article 17 (Vendors’ Product Support).	
 
 	3.	Conditions of Assignment . This Assignment Agreement is made subject to the following conditions:	

	  	App 8-12	  	APPENDIX 8
FORMS	

 	(a)	Lessee hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations of the Articles of the Purchase Agreement referred to in Section 2 above (copies of which are attached hereto as Schedule 2) with respect to the exercise of any of the Rights and to be bound by the covenants of the Buyer (as defined in the Purchase Agreement) in the Assigned Provisions to the same extent as if Lessee had been named “Buyer” of the Aircraft under the Purchase Agreement.	
 
 	(b)	Nothing contained herein shall subject Airbus to any liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, or, except to the extent set forth in section 3(c) below, modify in any respect whatsoever its contractual rights under the Purchase Agreement.	
 
 	(c)	So long as this Assignment Agreement is in full force and effect, Lessee and not Lessor will be responsible for compliance with Articles 12, 13, and 17 of the Purchase Agreement, in each case with respect to the Aircraft. Upon termination of this Assignment Agreement, Lessor shall once again be bound by such Articles with respect to the obligations thereunder, and Lessor shall be entitled to the rights and benefits described in Section 2 above originally received by CIT Leasing in connection with its purchase of the Aircraft from Airbus and assigned to Lessor pursuant to the CIT Assignment.	
 
 	(d)	Other than with respect to the obligations assumed by Lessee under this Assignment Agreement as set forth in section 3(a) above, Lessor shall remain fully bound by all provisions of the Purchase Agreement other than those provisions relating to rights reserved to CIT Leasing pursuant to the CIT Assignment with respect to which CIT Leasing shall remain fully bound by.	
 
 	4.	Reassignment . Upon expiration or termination of the Lease, and provided that Lessee and Lessor shall have furnished Airbus with written notice thereof, upon receipt of such notice by Airbus, the rights contained herein and remaining available on the date of such notice shall automatically be reassigned to Lessor, and in connection therewith Lessee shall execute any and all such acknowledgements or assurances Owner may reasonably require.	
 
 	5.	Assignment by Lessee . The rights of Lessee under this Assignment Agreement respect of the Purchase Agreement shall not, without the consent of Lessor and Airbus, be further assigned by Lessee.	
 
 	6.	Notification .	
 
 	(a)	It shall be a condition subsequent to this Assignment Agreement that this Assignment Agreement shall, at the expense of Lessor, be notified by Lessor to Airbus within two (2) weeks of the date hereof pursuant to Article 1690 of the French Civil Code.	

	  	App 8-13	  	APPENDIX 8
FORMS	

 	(b)	All notices and requests required or authorised under this Assignment Agreement shall be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by internationally recognised courier service or by telefax directed as set forth below:	
Lessor shall be addressed at:
CIT Aerospace International
3 George’s Dock
IFSC
Dublin 1, Ireland
Attention: Chief Counsel
Fax: +353 (1) 656 1001
with a copy to:
CIT Aerospace
11 West 42 nd Street
12 th Floor
New York, New York 10036
U.S.A.
Attention: Chief Counsel – Transportation Finance
Fax: +1 (212) 461-5402
Lessee shall be addressed at:
Concesionaria Vuela Compañía de Aviación S.A. de C.V
Prolongación Paseo de la Reforma No. 490, Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
Attention: Director Jurídico
Fax: +52 (55) 5211 9613
Airbus shall be addressed at:
Airbus S.A.S.
1 Rond-Point Maurice Bellonte
31707 Blagnac Cedex, France
Attention: Executive Vice-President Customer Services
Fax: +33 (5) 61 93 46 65
Telephone: +33 (5) 61 30 40 12
or such other address or to such other person as the party receiving the notice or request may designate from time to time.
Such notice or request shall be deemed to be effective in the case of (i) personal delivery, on the date upon which personally delivered, (ii) delivery by courier, on the date of receipt or (iii) telefax transmission, on the date of confirmation of successful transmission.
 
 	7.	Consent of Airbus . It shall be a condition precedent to this Assignment Agreement becoming effective that Airbus execute the Consent contained in Schedule 1 hereto.	
 
 	8.	Applicable Law and Jurisdiction . THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF	

	  	App 8-14	  	APPENDIX 8
FORMS	

THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW, AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL OR STATE COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION HEREWITH. Nothing in this section will prevent either party from making a claim in a court of competent jurisdiction in France if Airbus is involved.
 
 	9.	Confidentiality . Each of Lessor and Lessee (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Assignment Agreement and any reports, documentation (including the provisions of the Purchase Agreement furnished under section 2 hereof) or other data furnished hereunder (collectively, “ Information ”) strictly confidential and will not, without the prior written consent of the other party and Airbus, disclose such Information to any other person or entity; provided that Lessor and Lessee may, without the consent of the other party or Airbus, disclose the Information in any of the following situations:	
 
 	(i)	to affiliates, directors, officers, employees and permitted assignees of Lessor and Lessee; or	
 
 	(ii)	to auditors, accountants or legal advisors of Lessor, Lessee or their respective permitted assignees; or	
 
 	(iii)	to such other parties as may be required by law, by government regulation or order (including, without limitation, any regulation or order of a bank regulatory agency), by subpoena or by any other legal process. In the event that a disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and Lessee shall consult and cooperate with Airbus to limit the scope and form of such disclosure to the extent permissible and will make such applications as will be necessary to implement the foregoing.	
Notwithstanding any of the foregoing, Information will not be considered confidential and Lessor and Lessee and their respective permitted assignees may disclose any item of Information without restriction in any of the following circumstances: If such item:
 
 	(i)	is publicly available (either to the general public or to any relevant trade or industry) prior to either parry’s receipt of it from Airbus hereto;	
 
 	(ii)	is thereafter made publicly available (either to the general public or to any relevant trade or industry) by Airbus hereto or by a third party which is entitled to make such item publicly available; or	
 
 	(iii)	becomes available to either party hereto on a non-confidential basis from source which has represented to such party that such source is entitled to disclose it.	
With respect to any public disclosure or filing containing Information, Lessor and Lessee agree to submit to Airbus a copy of the proposed document to be filed or disclosed and will give Airbus a reasonable period of time in which to review the said document.
 
 	10.	Definitions . Capitalised terms not otherwise defined herein shall have the meaning set forth in the Lease.	

	  	App 8-15	  	APPENDIX 8
FORMS	

 	11.	Counterparts . This Assignment Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.	
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be executed on their behalf by their duly authorised representatives.

CIT AEROSPACE INTERNATIONAL	
		
By:	 	 	
Its:	 	 	

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Its:	 	 	
		
By:	 	 	
Its:	 	 	

	  	App 8-16	  	APPENDIX 8
FORMS	

SCHEDULE 1
Manufacturer Consent
                    20         
 
Re:	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS): ASSIGNMENT OF WARRANTY AND SUPPORT RIGHTS	
Dear Sirs
 
1.	Reference is made to that certain Assignment of Warranty and Support Rights dated                      20        (the “ Assignment Agreement ”), by and between CIT Aerospace International (“ Lessor ”) and Concesionaria Vuela Compañía de Aviación S.A. de C.V. (d/b/a Volaris) (the “ Lessee ”) concerning the assignment of certain warranty rights, patent and copyright indemnities, rights with respect to vendors’ product support rights under Articles 12, 13 and 17 of the Purchase Agreement, respectively, with respect to the Aircraft.	
 
2.	All terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.	
 
3.	Airbus hereby consents to the assignment and reassignment contained in Sections 2 and 4 respectively, of the Assignment Agreement on the terms and conditions set forth therein, subject to the following conditions:	
 
 	(a)	Airbus shall have received formal notification of the Assignment Agreement within two (2) weeks of the date hereof pursuant to Article 1690 of the French Civil Code;	
 
 	(b)	Airbus shall not be subject by reason of the Assignment Agreement to any (i) liability or additional obligations whatsoever to which it would not otherwise be subject under the Purchase Agreement, or (ii) modification in any respect whatsoever of its contractual rights under the said Purchase Agreement;	
 
 	(c)	So long as the Assignment Agreement is in full force and effect, Lessee and not Lessor will be responsible for compliance with Articles 12, 13 and 17 of the Purchase Agreement, in each case with respect to the Aircraft. Upon termination of the Assignment Agreement, Lessor shall once again be bound by such clauses with respect to the obligations thereunder, and Lessor shall be entitled to the rights and benefits described in Section 2 of the Assignment Agreement originally received by C.I.T. Leasing Corporation (“ CIT Leasing ”) in connection with its purchase of the Aircraft from Airbus which were assigned by CIT Leasing to Lessor pursuant to that certain Assignment of Rights dated as of                      20         (the “ CIT Assignment ”).	
 
 	(d)	Lessee hereby agrees to be bound by and to comply with all applicable terms, conditions and limitations of Articles 12, 13 and 17 of the Purchase Agreement with respect to the exercise of any of the Rights and to be bound by the covenants of the Buyer in the Assigned Provisions to the same extent as if Lessee had been named “Buyer” of the Aircraft under the Purchase Agreement.	
 
 	(e)	Other than with respect to the obligations assumed by Lessee under the Assignment Agreement as set forth in section 3(a) of the Assignment Agreement, Lessor shall remain fully bound by all provisions of the Purchase Agreement other than provisions relating to the rights reserved to CIT Leasing pursuant to the CIT Assignment which CIT Leasing shall remain fully bound by.	

	  	App 8-17	  	APPENDIX 8
FORMS	

 	(f)	For the avoidance of doubt, until Airbus receives written notice from Lessor of the termination of the Lease, Airbus shall be entitled to perform the obligations corresponding to the Rights assigned exclusively in favour of Lessee pursuant to the Assignment Agreement.	
 
4.	This Consent shall be governed by and construed in accordance with the laws of the State of New York and any dispute arising hereunder may be referred to any federal or state court located in New York, New York. Nothing in this clause will prevent any party from making a claim in a court of competent jurisdiction in France.	
 
5.	Confidentiality . Each of Lessor and Lessee (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Consent and any reports or other data furnished hereunder (collectively, the “ Information ”) strictly confidential and will not, without the prior written consent of the other party and Airbus, disclose such Information to any other person or entity; provided that Lessor and Lessee may, without the consent of the other party or Airbus, disclose the Information in any of the following situations:	
 
 	(i)	to affiliates directors, officers, employees and permitted assignees of Lessor and Lessee; or	
 
 	(ii)	to auditors, accountants or legal advisors of Lessor, Lessee or their respective permitted assignees; or	
 
 	(iii)	to such other parties as may be required by law, by government regulation or order (including, without limitation, any regulation or order of a bank regulatory agency), by subpoena or by any other legal process. In the event that a disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and Lessee shall consult and cooperate with Airbus to limit the scope and form of such disclosure to the extent permissible and will make such applications as will be necessary to implement the foregoing.	
Notwithstanding any of the foregoing, Information will not be considered confidential and Lessor and Lessee and their respective permitted assignees may disclose any item of Information without restriction in any of the following circumstances: If such item:
 
 	(i)	is publicly available (either to the general public or to any relevant trade or industry) prior to either party’s receipt of it from Airbus hereto;	
 
 	(ii)	is thereafter made publicly available (either to the general public or to any relevant trade or industry) by Airbus hereto or by a third party which is entitled to make such item publicly available; or	
 
 	(iii)	becomes available to either party hereto on a non-confidential basis from source which has represented to such party that such source is entitled to disclose it.	
With respect to any public disclosure or filing containing Information, Lessor and Lessee agree to submit to Airbus a copy of the proposed document to be filed or disclosed and will give Airbus a reasonable period of time in which to review the said document.

	  	App 8-18	  	APPENDIX 8
FORMS	

 	6.	Counterparts . This Consent may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.	

For and on behalf of AIRBUS S.A.S	
		
By:	 	 	
		
Title:	 	 	
		
Date:	 	 	

Signed in acknowledgment for and on behalf of	 		 	Signed in acknowledgment for and on behalf of	
			
CIT AEROSPACE INTERNATIONAL	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)	
					
By:	 	   	 		 	By:	 	   	
					
Name:	 	   	 		 	Name:	 	   	
					
Title:	 	   	 		 	Title:	 	   	
					
 	 	 	 		 	By:	 	   	
					
 	 	 	 		 	Name:	 	   	
					
 	 	 	 		 	Title:	 	   	

	  	App 8-19	  	APPENDIX 8
FORMS	

Form 9
Form of Assignment of Warranties and Consent (Engines)
ENGINE ASSIGNMENT AGREEMENT
This Agreement (this “ Agreement ”) is made as of this              day of                      20     among C.I.T. LEASING CORPORATION, a corporation whose principal place of business is at 505 Fifth Avenue, New York, New York 10017, United States of America (hereinafter called “ Purchaser ”) of the first part; and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS), a company organised and existing under the laws of the United Mexican States and having its head office at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F. (hereinafter called “ Lessee ”) of the second part; CIT AEROSPACE INTERNATIONAL, an unlimited company formed under the laws of Ireland and which place of business is located at 3 George’s Dock, IFSC, Dublin, Ireland (hereinafter called “ Lessor ”) of the third part; and IAE INTERNATIONAL AERO ENGINES AG, a corporation whose registered office is at Stampfenbachstrasse 73, 8035 Zurich, Switzerland (hereinafter called “ IAE ”) of the fourth part.
WHEREAS:
 
A.	Purchaser is party to an Airbus A320 family and A350 aircraft purchase agreement with Airbus S.A.S (as legal successor to AVSA, S.A.R.L.) (“ Airbus ”) dated as of August 17, 2005, partially assigned with respect to the Aircraft (as defined below) to Lessor pursuant to a purchase agreement assignment between Purchaser and Lessor dated on or about the date hereof pursuant to which Lessor agreed, among other things and with the consent of Airbus, to purchase the Aircraft.	
 
B.	Pursuant to an aircraft lease agreement dated 30 November 2009 between Lessor and Lessee (the “ Lease ”), Lessor proposes to lease or has leased the Aircraft which is equipped with two (2) IAE V2527-A5 engines, serial numbers                      and                      (the “ Engines ”) to Lessee.	
 
C.	Purchaser and IAE are parties to a V2500 Support Contract dated October 13, 1999 (which together with the Exhibits and Side Letters thereto is hereinafter referred to as the “ Contract ”) for the support by IAE of the Engines.	
 
D.	Lessor and Lessee wish to take an assignment of certain rights and obligations of Purchaser uncle the Contract, and Purchaser is willing to assign and IAE is willing to consent to such assignment as hereinafter provided.	
NOW THEREFORE IT IS AGREED AS FOLLOWS:
CLAUSE 1 DEFINITIONS
Terms used in this Agreement shall have the same meanings as those given to them in the Contract with the exception of the following:
“ Aircraft ” shall mean the A319-100 aircraft bearing manufacturer’s serial number                      powered by the Engines.

	  	App 8-20	  	APPENDIX 8
FORMS	

CLAUSE 2 ASSIGNMENT
 
2.1	Subject to the terms of this Agreement, Purchaser hereby assigns and transfers to Lessor all of the rights and interest of Purchaser under the following provisions of the Contract (the “ Assigned Rights ”):	
Clause 1         Definitions —with the exception of subclauses 1.1, 1.3, 1.4 and 1.6
Clause 3         Spare Parts Provisions with exception of subclause 3.13
Clause 4         Warranties, Guarantees and Liabilities Including Clauses 4.1, 4.2.1 through 4.2.8, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8
Clause 5         Product Support Services
Clause 6         Miscellaneous with the exception of subclauses 6.3 and 6.13
Exhibit A         Contract Specification
Exhibit C         Product Support
Exhibit D         Warranties, Guarantees & Plans including Exhibits D-1 through D-8
Such provisions of the Contract as are hereby assigned are attached hereto as Appendix I and may be amended from time to time by agreement between Purchaser and IAE.
 
2.2	Subject to the terms of this Agreement and for so long as the Lease has not been terminated or has not expired in accordance with its terms, Lessor hereby assigns and transfers to Lessee all of its rights and interest in the Assigned Rights.	
 
2.3	Each of Lessor and Lessee hereby assumes and accepts the assignment and transfer of the Assigned Rights, and agrees to accept all of the limitations, obligations and liabilities contained in the Contract relating to the Assigned Rights.	
 
2.4	IAE hereby consents to the assignments and transfers to Lessee and Lessor of all of the Assigned Rights provided in Clauses 2.1 and 2.2 above, and agrees that it will allow Lessee to exercise in its own name all of the Assigned Rights.	
 
2.5	Each of Lessor and Lessee hereby confirms to IAE that, in accordance with the terms of the Lease, they agree to the following notice provisions relating to the Assigned Rights:	
(a) At the request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of (x) fourteen (14) days prior to the Scheduled Termination Date (as defined in the Lease) and (y) the Termination Date (as defined in the Lease) of any valid claim Lessee has made under the warranties assigned to it with respect to the Engines during the Lease Term (as defined in the Lease) to the extent historical records of the same are maintained by Lessee; and
(b) During the Lease Term (as defined in the Lease), Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Engines as Lessor may reasonably request.

	  	App 8-21	  	APPENDIX 8
FORMS	

2.6	LESSEE ACCEPTS THAT THE WARRANTIES ASSIGNED TO IT UNDER CLAUSES 4.1, 4.2 AND 4.4 OF THE CONTRACT TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO IT IN RESPECT OF THE SUPPLIES IN ACCORDANCE WITH THIS CONTRACT ARE EXPRESSLY IN LIEU OF, AND LESSEE HEREBY WAIVES, ALL OTHER REMEDIES, CONDITIONS AND WARRANTIES, EXPRESSED OR IMPLIED INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER OBLIGATIONS AND LIABILITIES WHATSOEVER OF IAE AND OF ITS SHAREHOLDERS WHETHER IN CONTRACT OR IN TORT OR OTHERWISE FOR ANY DEFECT, DEFICIENCY, FAILURE, MALFUNCTIONING OR FAILURE TO FUNCTION OF ANY ITEM OF THE SUPPLIES OR OF THE EQUIPMENT REFERRED TO IN CLAUSE 4.4 OF THE CONTRACT, HOWSOEVER AND WHENEVER ACQUIRED BY LESSEE FROM WHATEVER SOURCES. LESSEE AGREES THAT NEITHER IAE NOR ANY OF ITS SHAREHOLDERS SHALL BE LIABLE TO LESSEE UPON ANY CLAIM THEREFOR OR UPON ANY CLAIM HOWSOEVER ARISING OUT OF THE MANUFACTURE OR SUPPLY OR INSPECTION BY IAE OR ANY OF ITS SHAREHOLDERS OF ANY ITEM OF THE SUPPLIES OR OF SUCH EQUIPMENT OR ANY OTHER ITEM OF WHATEVER NATURE, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, EXCEPT AS EXPRESSLY PROVIDED IN THE SAID WARRANTIES, AND LESSEE ASSUMES ALL RISK AND LIABILITY WHATSOEVER NOT EXPRESSLY ASSUMED BY IAE IN THE SAID WARRANTIES.	
 
2.7	References in the Contract to Lessor (whether as “CIT”, “Airline”, “Operator” or otherwise) shall with respect to the rights hereby assigned, include Lessee except where the context require otherwise.	
CLAUSE 3 PAYMENT FOR SPARE PARTS
Notwithstanding Clause 2 above, payments for all purchases shall be due from Lessee upon delivery, or at IAE’s option prior to delivery of the purchased items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed of any of Lessee’s property, or (b) Lessee is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding up laws or other similar legislation applicable to Lessee, or (c) Lessee becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a judgment rendered against Lessee, or (e) Lessee is unable or refuses to make payment to IAE in accordance with any of Lessee’s obligations to IAE.
CLAUSE 4 LAW
This Agreement shall be governed by and construed in accordance with the laws of New York, excluding New York’s conflicts of laws, and any dispute shall be referred to the Federal or State courts located in New York, New York, and each party unconditionally and irrevocably consents and submits to such jurisdiction.
CLAUSE 5 AMENDMENT
This Agreement shall not be amended in any way other than by agreement in writing executed by all of the parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement.
CLAUSE 6 FURTHER ASSIGNMENT
Lessee shall not be entitled to further assign or transfer the Assigned Rights without the prior written consent of IAE and Lessor.

	  	App 8-22	  	APPENDIX 8
FORMS	

CLAUSE 7 REASSIGNMENT
Upon termination of the Lease or the leasing of the Aircraft thereunder, whether by expiry of time or otherwise, the Assigned Rights shall automatically be reassigned to Lessor without any requirement for any further act by or on behalf of Lessee or IAE.
CLAUSE 8 CONFIDENTIALITY
Lessor and Lessee shall not, without the prior written consent of IAE, disclose directly or indirectly, to any third party, any of the terms of this Agreement or any of the terms of the Assigned Rights or of the Contract disclosed incident to this Agreement.
CLAUSE 9 IAE’S LIABILITIES
IAE shall incur no new or additional obligations, losses, costs, expenses or liabilities whatsoever by reason of the Lease or any of the transactions contemplated thereby (other than as provided herein and in respect of IAE’s obligations under the Contract).
CLAUSE 10 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original and each counterpart shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorised officers the day and year first before written:

C.I.T. LEASING CORPORATION	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN S.A. DE C.V. ( D / B / A VOLARIS)	

					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	

					
	 		 		 	Name:	 	 	
					
	 		 		 	Title:	 	 	

CIT AEROSPACE INTERNATIONAL	 		 	IAE INTERNATIONAL AERO ENGINES AG	

					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	

					
	  	App 8-23	  	APPENDIX 8
FORMS	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.25
DATED AUGUST 23, 2010
INTERNATIONAL LEASE FINANCE CORPORATION,
AS ASSIGNOR
MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED,
AS ASSIGNEE
AND
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
(SUCCESSOR TO CONCESIONARIA VUELA
COMPANIA DE AVIACION, S.A. DE C.V.),
AS LESSEE

ASSIGNMENT, ASSUMPTION AND AMENDMENT
AGREEMENT
RELATING TO ONE (1) AIRBUS A319-100 AIRCRAFT
MANUFACTURER’S SERIAL NUMBER 3491,
FAA REGISTRATION MARK N503VL

[COUNTERPART NO. [            ] OF [            ] SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS DOCUMENT TOGETHER WITH THE AIRCRAFT LEASE AGREEMENT DATED MARCH 9, 2007 MARKED COUNTERPART NO. 1 CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN EFFECT IN ANY APPLICABLE JURISDICTION, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.]

CONTENTS

Clause	 		  	 	Page	  	
			
Section 1.	 	Defined Terms	  	 	2	  	
			
Section 2.	 	Effectiveness	  	 	2	  	
			
Section 3.	 	Assignment, Assumption and Release	  	 	2	  	
			
Section 4.	 	Lessee Consent and Agreement	  	 	3	  	
			
Section 5.	 	Payments to Assignee	  	 	4	  	
			
Section 6.	 	Payments to Assignor	  	 	4	  	
			
Section 7.	 	Insurance	  	 	4	  	
			
Section 8.	 	Identification Plates	  	 	4	  	
			
Section 9.	 	Quiet Enjoyment	  	 	5	  	
			
Section 10.	 	Post Effective Time	  	 	5	  	
			
Section 11.	 	Cooperation	  	 	5	  	
			
Section 12.	 	Representations and Warranties	  	 	6	  	
			
Section 13.	 	Lease Representations and Warranties	  	 	8	  	
			
Section 14.	 	Assignee Servicer and Assignments	  	 	10	  	
			
Section 15.	 	Assignment	  	 	10	  	
			
Section 16.	 	Notices	  	 	10	  	
			
Section 17.	 	Modifications	  	 	10	  	
			
Section 18.	 	Delivery of Documents by Fax or E-mail	  	 	10	  	
			
Section 19.	 	Governing Law, Etc.	  	 	10	  	
			
Section 20.	 	Further Assurances	  	 	10	  	
			
Section 21.	 	Headings	  	 	11	  	
			
Section 22.	 	Invalidity of any Provision	  	 	11	  	
			
Section 23.	 	Survival	  	 	11	  	
			
ANNEX 1	 	Lease Documents	  				
			
ANNEX 2	 	Amendments to Lease Documents	  				
			
ANNEX 3	 	Form of Confirmation of Effective Time	  				
			
ANNEX 4	 	Insurance Information	  				
			
ANNEX 5	 	Lessee Conditions Precedent	  				
			
ANNEX 6	 	Notice of Removal and Discharge	  				
			
ANNEX 7	 	Federal Aviation Administration Conveyance and Engine Thrust Information	  				
			
ANNEX 8	 	Form of Lessee Acknowledgment	  				
 
- i -

					
ANNEX 9	 	Form of Letter of Quiet Enjoyment	  		
			
ANNEX 10	 	Assignor and Lessee Representations and Warranties	  		
			
ANNEX 11	 	Form of Guarantee	  		
 
- ii -

THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (this “ Agreement ”), is entered into as of August 23, 2010, by and among (1) INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation (“ Assignor ”), (2) MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED, a company organized under the laws of Ireland (“ Assignee ”), and (3) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), a company organized under the laws of Mexico (“ Lessee ”).
PRELIMINARY STATEMENTS : 
WHEREAS , Assignor and Lessee have entered into an Aircraft Lease Agreement, dated as of March 9, 2007 (as amended and supplemented by Side Letter #1 to Aircraft Lease Agreement described as item 3 on Annex 1 hereto, the “ Lease ”), pursuant to which Assignor has leased to Lessee one (1) Airbus A319-100 (shown on the international registry as AIRBUS model A319) aircraft bearing manufacturer’s serial number 3491 and FAA registration mark N503VL together with two (2) IAE International Aero Engines AG model IAE V2524-A5 (shown on the international registry as INTERNATIONAL AERO ENGINES model V2500-A5) engines bearing manufacturer’s serial numbers V12908 and V12912, respectively (each of which has 550 or more rated take-off horsepower) (collectively and as more fully described in the Lease, the “ Aircraft ”), as more fully described in Annex 7 hereto.
WHEREAS , International Lease Finance Corporation (“ Seller ”) has agreed, among other things, to sell the Aircraft or cause its affiliate to sell the Aircraft to Macquarie Aerospace Limited (“ Buyer ”) or Buyer’s designee subject to the Lease and Buyer has agreed to purchase or cause its designee to purchase the Aircraft from Seller or Seller’s affiliate pursuant to an Aircraft Sale Agreement dated as of April 13, 2010 between Seller and Buyer (the “ Sale Agreement ”).
WHEREAS , Buyer has designated Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3491 Trust (“ New Owner ”) to purchase the Aircraft in accordance with the Sale Agreement and will cause New Owner to lease the Aircraft to Assignee pursuant to a head lease agreement.
WHEREAS , concurrently with the sale of the Aircraft to New Owner, Assignor will, subject to the terms and conditions of this Agreement, assign to Assignee all of its rights, obligations and interest to and under the Lease and all other agreements (including all Operative Documents as such term is defined in the Lease) described on Annex 1 hereto and delivered in connection with, or relating to, the leasing of the Aircraft and that affect the rights or obligations of the “LESSOR” or “LESSEE” thereunder as of or after the Effective Time (as defined below) (the “ Lease Documents ”), subject to the rights of Lessee (as more fully described in Section 3(a) below and collectively with the other assignments, assumptions, releases and covenants in Section 3, the “ Assignment ”).
WHEREAS , Assignor, Assignee and Lessee have agreed to enter into this Agreement in order to, among other things, (i) effect the Assignment, (ii) evidence Lessee’s acknowledgment of, and consent to, the Assignment and (iii) amend certain provisions of the Lease Documents.
 
- 1 -

NOW , THEREFOR , in consideration of and subject to the mutual covenants, terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
Section 1. Defined Terms . Any and all initially capitalized terms used herein (including the Annexes hereto) and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
Section 2. Effectiveness . Subject to satisfaction of or waiver by Lessee (in its sole discretion) of the conditions precedent set forth in Annex 5 hereto, the Assignment, the amendment to the Lease Documents described herein and in Annex 2 hereto and Lessee’s consent in Section 4 will take effect as of the time of the transfer of title to the Aircraft by Assignor to New Owner (the “ Effective Time ”), as evidenced by a Confirmation of Effective Time substantially in the form of Annex 3 hereto to be delivered to and acknowledged by Lessee from Assignor and Assignee at or promptly after the Effective Time (a “ Confirmation ”). Lessee agrees to countersign and deliver to Assignor and Assignee a copy of such Confirmation promptly upon receipt thereof.
Section 3. Assignment, Assumption and Release .
(a) Assignment.
(i) Effective as of the Effective Time, Assignor hereby assigns, conveys, transfers and sets over to Assignee except as may be otherwise expressly specified in the following sentence all of Assignor’s rights and obligations and Assignor’s interest in, to and under the Lease Documents, arising on and after the Effective Time, subject to the rights of Lessee under the Lease Documents. Notwithstanding any other term or agreement in this Agreement:
(x) Assignor is not assigning its rights and obligations under Article 6.4 of the Lease.
(y) Assignor shall continue to be responsible to perform the obligations of “LESSOR” under Article 6.4 of the Lease and in respect of any other obligation arising in connection with any other right retained by Assignor in accordance with the provisions hereof (those portions of the Lease Documents assigned under this Section 3(a)(i), hereinafter the “ Assigned Lease Documents ”).
(ii) Effective as of the Effective Time, Lessee, Assignor and Assignee hereby agree that, except with respect to the matters set forth in Section 3(a)(i)(x) above, Assignor shall have no further rights and obligations under the Assigned Lease Documents, except that the disclaimers and indemnities contained in Articles 8 (Disclaimers and Waivers) and 17 (Indemnities) of the Lease and any other provisions of the Lease Documents which are expressly stated to survive the expiration or termination of the leasing of the Aircraft under the Lease shall
 
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continue in full force and effect for the benefit of Assignor in addition to the Assignee in accordance with the provisions of the Lease. Notwithstanding the above, Assignor and Lessee shall have the same rights and remedies against each other as each would have had under the Lease in respect of any rights and obligations arising, losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if the Assignor had remained the “LESSOR” under the Lease.
(b) Assumption.
(i) Effective as of the Effective Time, Assignee hereby accepts and assumes all of Assignor’s rights and obligations assigned, conveyed, transferred and set over by Assignor pursuant to Section 3(a).
(ii) Assignee warrants, covenants and agrees with Lessee that on and after the Effective Time, Assignee will perform all obligations to be performed by Lessor under the Assigned Lease Documents that arise on or after the Effective Time and will be bound by all of the terms thereof.
(iii) Any reference to the rights of “LESSOR” under the Lease in connection with the right of “LESSOR” to assign such rights, shall include any “associated rights”, as defined in The Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Cape Town Convention ”) in effect at the Effective Time of the Assignee in, and to, this Agreement and the Lease. Any such associated rights may consist of any of Assignee’s rights to procure payment or other performance by Lessee (as “debtor” under the Cape Town Convention) under this Agreement, the Lease and/or any other operative document associated with the Lease.
(c) Retained Obligations and Release. Subject to the terms of this Agreement including without limitation Sections 2 and 3(a) and except as otherwise provided therein, effective as of the Effective Time, Lessee hereby releases Assignor from any obligations of “LESSOR” under the Assigned Lease Documents which arise on or after the Effective Time including but not limited to any obligations with respect to the return to Lessee of any Security Deposit or the reimbursement of any Reserves, all of which obligations in respect of such Security Deposits and Reserves having been assumed by New Owner and Assignee.
Section 4. Lessee Consent and Agreement . Subject to the provisions hereof, and Lessee’s rights hereunder and under the Lease, Lessee hereby acknowledges and consents to the Assignment and to Assignor’s assignment to New Owner of all of Assignor’s reversionary rights and interest in the manufacturer warranties that were assigned to Lessee by Assignor pursuant to the Lease Documents and agrees that Assignee will be obligated to fulfill all of the obligations of Lessor under the Assigned Lease Documents which arise on and after the Effective Time and that and until otherwise notified in writing Lessee will perform for the benefit of Assignee all of Lessee’s obligations under the Assigned Lease Documents which arise on and after the Effective Time, save for its obligations in respect of any rights expressly retained by Assignor hereunder.
 
3

Section 5. Payments to Assignee . Lessee and Assignee hereby agree that on and after the Effective Time all Rent, Reserves, Security Deposits and other payments due from Lessee to Lessor under the Lease will be made by wire transfer to the bank account of Assignee described in Annex 2 hereto or to such other account in the United States or Ireland (unless otherwise agreed by Lessee), notified to Lessee pursuant to Section 16 (Notices) below.
Section 6. Payments to Assignor . Lessee and Assignee hereby agree that as of the Effective Time all Rent, Reserves, Security Deposits and other payments paid to Assignor in accordance with the Lease prior to the Effective Time shall be deemed to have been paid for all purposes under the Lease and the Reserves and Security Deposit shall be deemed to have been received by Assignee and Assignee covenants and agrees that it shall hold, apply, retain and reimburse the Reserves and Security Deposit or cause to be held, applied, released and reimbursed the Reserves and Security Deposit strictly in accordance with all relevant provisions of the Lease.
Section 7. Insurance . From and after the Effective Time and until otherwise notified in writing, Lessee will cause:
(a) Bank of Utah to be named as loss payee for the Agreed Value under the hull insurances required to be maintained by Lessee under the Lease;
(b) Servicer (as defined in Section 14 below), New Owner, Sub-Servicer, Macquarie AirFinance Acquisitions Ltd. and the Persons providing financing to New Owner and their agents and security trustees identified on Annex 4 hereto and each of their respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under the Lease;
(c) continue to name Assignor and each of its respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity as an additional insured under the third party liability insurances until the earlier to occur of the second anniversary of the Effective Time; and
(d) each of the agreements described on Annex 4 hereto to be identified as “contracts” with respect to the insurances required under the Lease and this Section 7.
Section 8. Identification Plates . Lessee will as soon as is reasonably practical after the Effective Time, prepare at Assignee’s expense new identification plates for the Aircraft bearing the legends set forth in Annex 2 hereto, remove the existing identification plates and install the replacement identification plates on the Aircraft.
 
4

Section 9. Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing, from and after the Effective Time, Assignee hereby agrees that neither it nor any person lawfully claiming through it will interfere with or otherwise disturb Lessee’s quiet, peaceful use, possession and enjoyment of the Aircraft.
Section 10. Post Effective Time . Assignor, Assignee and Lessee hereby agree that with effect on and from the Effective Time, the Lease shall be amended as set forth in Annex 2 hereto. Except as set out in this Agreement, the Lease shall remain unmodified and in full force and effect.
Section 11. Cooperation . 
(a) The parties hereby agree to cooperate with one another in order to close the Assignment at a convenient time when the Aircraft is in a jurisdiction reasonably acceptable to Assignee, Assignor and Lessee on one of Lessee’s regular routes. Provided that Assignor notifies Lessee in writing of the proposed date of the Assignment a minimum of three (3) Business Days prior to such date, Lessee will provide Assignor notice of the scheduled route of the Aircraft for such date.
(b) Lessee agrees to provide promptly, but in any event, prior to the Effective Time, the following in the English language and in form and substance reasonably satisfactory to Assignor and Assignee:
(i) unless covered by the documents provided at Delivery, to Assignor and Assignee, an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Lessee naming the person or persons authorized to execute this Agreement and the documents delivered in connection therewith;
(ii) to Assignor and Assignee, an insurance certificate and, if applicable, broker’s letter of undertaking confirming that the insurances required under the Lease and under Section 7 of this Agreement are in effect;
(iii) to Assignee, an executed Lessee Acknowledgement substantially in the form attached hereto as Annex 8, provided that Assignee delivers to Lessee prior to the Effective Time an executed Letter of Quiet Enjoyment from each of New Owner and Security Trustee substantially in the form attached hereto as Annex 9; and
(iv) to Assignor and Assignee written confirmation, signed by Lessee, specifying the location of the Aircraft at the Effective Time.
(c) Subject to the provisions hereof and Lessee’s rights hereunder and under the Lease, Lessee hereby agrees to perform and do all such other and further acts and things and execute and deliver any and all such other instruments (including any notification to the Aviation Authority of changes in the ownership structure of the Aircraft) as Assignee may reasonably require to reflect the change in the identity of the owner and lessor of the Aircraft as contemplated
 
5

by this Agreement and to perfect or protect the interests of Assignee, New Owner, LESSOR’s Lender (as defined in the Lease) and any other interest holder, and for the purpose of carrying out the intent of and giving Assignee full benefit of the Assignment including, but not limited to consenting electronically, at Assignee’s expense to a registration by Assignee of the international interest created by this Agreement pursuant to the Cape Town Convention on the international registry established pursuant to the Cape Town Convention.
(d) Assignee shall pay or reimburse Lessee for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in preparing, reviewing, negotiating and executing documents required by Lessor and Assignee or performing any other obligations under Article 24 of the Lease. As between Assignor and Assignee, nothing in this clause (d) shall modify the agreement of Seller and Buyer under Section 8.1(b) of the Sale Agreement.
(e) Upon return to Lessee of either the deregistration power of attorney provided to Assignor, marked “cancelled”, or a facsimile copy of the same, Lessee shall deliver to Assignee a replacement deregistration power of attorney in the form previously provided to Assignor pursuant to the Lease; provided that in the event that a facsimile copy is provided, Assignor shall deliver to Lessee the original copy, marked “cancelled”, via international express courier within seven (7) Business Days after the Closing Date.
Section 12. Representations and Warranties .
(a) Lessee Representations. Lessee represents and warrants to Assignor and Assignee as of the Effective Time the following:
(i) Lessee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of its jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Lessee (x) have been duly authorized by all necessary corporate action of Lessee and (y) do not and will not violate the charter, certificate of incorporation, by laws or other organizational instruments, any applicable law, rule or regulation or any provision in any existing agreement binding on it;
(iii) this Agreement constitutes a valid, binding and enforceable agreement of Lessee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Lessee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
 
6

(b) Assignor Representations. Assignor hereby represents and warrants to Lessee and Assignee as of the Effective Time the following:
(i) Assignor is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing and in good standing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignor (x) have been duly authorized by all necessary corporate action of Assignor and (y) do not and will not violate the articles of incorporation, by laws or other organizational instruments of Assignor, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignor;
(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignor except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignor in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
(c) Assignee Representations. Assignee represents and warrants to Lessee and Assignor as of the Effective Time the following:
(i) Assignee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignee (x) have been duly authorized by all necessary corporate action of Assignee and (y) do not and will not violate the articles of incorporation, by-laws or other organizational instruments of Assignee, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignee;
(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights;
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect;
(v) the assignment and assumption contemplated hereby is in conformity with and subject to the provisions of Article 24 of the Lease and will not result in any increase in or to or the imposition of additional obligations or liabilities that are not de minimis;
 
7

(vi) Macquarie AirFinance Acquisitions Ltd. is the sole beneficiary of the MSN 3491 Trust; and
(vii) Assignee is an Irish tax resident.
(d) Assignee Covenant. Assignee covenants that so long as no Event of Default has occurred and is continuing, it will not permit New Owner to take or omit to take any action which would jeopardize the registration of the Aircraft on the FAA registry.
Section 13. Lease Acknowledgments, Representations and Warranties .
(a) Assignor, Assignee and Lessee hereby make the acknowledgments set forth on Annex 10.
(b) Each of Lessee and, unless otherwise stated, Assignor hereby makes the following representations and warranties as of the date hereof (unless otherwise noted):
(i) the Lease Documents are all described on Annex 1 hereto and such, together with this Agreement, constitute the entire agreement of Lessee and Assignor with respect to the leasing of the Aircraft;
(ii) the Lease is in full force and effect, and has not been modified or amended by any agreement between Assignor and Lessee which is currently in effect except to the extent set forth in the Lease Documents and, without waiver of or prejudice to Lessee’s rights under the Lease, Lessee has not exercised its option to extend the Lease Term;
(iii) the Aircraft was delivered on the Delivery Date in accordance with the terms of the Lease;
(iv) the Aircraft is not subject to a sublease;
(v) no Default in respect of the payment of Rent or any Event of Default has occurred and is continuing under the Lease;
(vi) to Lessee’s knowledge and without waiver of or prejudice to any right, remedy or claim it may have, Lessee is not entitled as of the date hereof to any offset against Rent or any other amounts payable under the Lease Documents;
(vii) to Lessee’s knowledge, without waiver of or prejudice to any right, remedy or claim it may have, Lessee as of the date hereof has no claim against, and there are no actions by Lessee against, Assignor with respect to the Aircraft or the Lease Documents;
(viii) without waiver of or prejudice to any right, remedy or claim Lessee may have, Assignor has no unperformed Reserve payment obligations;
(ix) no unrepaired partial loss with a repair cost in excess of ***** or Total Loss has occurred in respect of the Aircraft or Engines;
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
8

(x) to Lessee’s knowledge, no notice of assignment of any Security Interest in the Lease has been received by the Lessee or, if the Lessee has received any such notice of assignment, it has subsequently received notice that such Security Interest has been terminated or will be terminated as of the Effective Time;
(xi) Lessee has not prepaid any Rent, the payment of which does not become due until after the Effective Time; and
(xii) Lessee is not subject to any voluntary bankruptcy, insolvency or reorganization proceeding.
 
9

Section 14. Assignee Servicer and Assignments . As of and with effect from the Effective Time, Macquarie Aircraft Leasing Services (Ireland) Limited will act as Assignee’s servicer for all matters related to the Lease and the Aircraft (in such capacity as servicer, the “ Servicer ”). Accordingly, with effect from the Effective Time and until Lessee receives notice from Assignee to the contrary, Lessee shall be entitled to and shall communicate with and deal with Servicer with respect to all matters relating to the Lease and the Aircraft to the exclusion of Assignor and Assignee and may rely on any communication, direction or determination made or purportedly made by Servicer. Subject to the provisions hereof and its rights under the Lease, upon written notice from Assignee, Lessee shall acknowledge and consent to any Security Interest Assignee grants in and to Assignee’s or New Owner’s rights to the Aircraft and under the Lease in the form of Annex 8 or such other form as may be reasonably acceptable to Lessee.
Section 15. Assignment . This Agreement will be binding upon and inure to the benefit of each party hereto and its respective successors and assigns as permitted under the Lease.
Section 16. Notices . Any notices hereunder will be in writing and will be delivered as and in the manner specified in the Assigned Lease Documents. The address of Assignee for notices under the Assigned Lease Documents is, until further notice, as set forth on Annex 2 hereto.
Section 17. Modifications . This Agreement may not be amended or modified except by a written agreement signed by Assignor, Assignee and Lessee; provided that Assignee and Lessee shall be entitled to amend, modify or vary the terms of the Assigned Lease Documents after the Effective Time without reference to or the signature of Assignor.
Section 18. Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Agreement or of any other documents in connection with this Agreement by fax or email will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Agreement or other document by fax or email will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Agreement or such other document will not affect the validity or effectiveness of this Agreement or such other document.
Section 19. Governing Law, Etc. The provisions of the Lease, as amended by this Agreement, with respect to governing law, jurisdiction, service of process, waiver of trial by jury, venue and inconvenient forum are incorporated in this Agreement by reference as if such provisions were set forth herein.
Section 20. Further Assurances . Each party hereto agrees that it shall, at any time and from time to time, promptly and duly execute and deliver any and all such further instruments and documents and take such further action as may be reasonably required in order to obtain the full benefits of this Agreement and to implement the rights and powers herein granted.
 
10

Section 21. Headings . All section and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Agreement. Any reference to a specific section or paragraph will be interpreted as a reference to such section or paragraph of this Agreement.
Section 22. Invalidity of any Provision . If any of the provisions of this Agreement become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
Section 23. Survival . Notwithstanding anything contained herein to the contrary, all agreements, indemnities, representations and warranties contained in this Agreement shall survive the Effective Time.
 
11

IN WITNESS WHEREOF , the parties hereto or their duly authorized representatives have executed this Agreement as of the day and year first herein written.

INTERNATIONAL LEASE FINANCE
CORPORATION,
as Assignor	 		 	MACQUARIE AIRFINANCE
ACQUISITIONS (IRELAND) LIMITED
as Assignee	
					
By:	 	/s/ Frederick S. Cromer	 		 	By:	 	/s/ Brian Wheatley	
Name: Frederick S. Cromer	 		 	Name: Brian Wheatley	
Title: Chief Financial Officer	 		 	Title: Director	
				
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,	 		 		 		
as Lessee	 		 		 		
					
By:	 	/s/ Alfonso Ascencio Triujeque	 		 		 		
Name: Alfonso Ascencio Triujeque	 		 		
Title: General Counsel	 		 		
					
By:	 	/s/ Fernando Suárez Gerard	 		 		 		
Name: Fernando Suárez Gerard
Title: Director of Finance, CFO	 		 		 		
Signature Page

RECEIPT OF CHATTEL PAPER ORIGINAL
Receipt of the foregoing original counterpart of the Assignment, Assumption and Amendment Agreement dated August 23, 2010 by and among International Lease Finance Corporation as Assignor, Macquarie AirFinance Acquisitions (Ireland) Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee in respect of that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3491, constituting the “Chattel Paper Original”, is hereby acknowledged.
MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED

By:	 	/s/ Brian Wheatley	
Name: Brian Wheatley	
Title: Director	
 
Signature Page

ANNEX 1
LEASE DOCUMENTS
 
1.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”), as lessee and International Lease Finance Corporation (“ ILFC ”), as lessor.	
 
2.	Estoppel and Acceptance Certificate dated April 21, 2008 by Volaris.	
 
3.	Side Letter #1 to Aircraft Lease Agreement dated as of June 14, 2009 by and between ILFC and Volaris.	
 
4.	Assignment of Rights (Airframe) dated April 21, 2008 between ILFC and Volaris.	
 
5.	Airbus Consent dated April 21, 2008 by Airbus S.A.S. and acknowledged by ILFC and Volaris.	
 
6.	Assignment Agreement (Engines) dated April 21, 2008 among ILFC, Volaris and IAE International Aero Engines AG.	
 
Annex 1-1

ANNEX 2
AMENDMENTS TO LEASE DOCUMENTS
1. Reference . This Annex 2 to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010, by and among International Lease Finance Corporation , as Assignor, Macquarie AirFinance Acquisitions (Ireland) Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) sets forth the amendments to the Aircraft Lease Agreement dated as of March 9, 2007 (as amended and supplemented prior to the date of the Assignment Agreement, between Lessee and Assignor the “ Lease ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
2. Amendments by Operation of Law Not Excluded . The amendments set forth in this Annex 2 hereto are intended to be the only amendments to the Lease to be effected upon the Effective Time except for such amendments to the language and operation of the Lease as are otherwise necessitated and effected by the execution of the Assignment Agreement or upon the effectiveness of the Assignment.
3. Amendments to Certain Definitions.
(a) The definition of “LESSOR” in the preamble of the Lease is deleted in its entirety and replaced with the following:
“MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED, a company organized under the laws of Ireland, whose principal place of business is Level 1, South Bank House, Barrow Street, Dublin 4, Ireland (“ LESSOR ”).”
 
 	(b)	The following definitions in Article 2.1 of the Lease are amended:	
 
 	(i)	The definition of “APU” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(ii)	The definition of “Aviation Documents” is amended such that the word “LESSOR’s” in part (g) of the definition is deleted and replaced with “OWNER’s”.	
 
 	(iii)	The definition of “Engine” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(iv)	The definition of “LESSOR’s Lien” is amended such that the words “, OWNER, Owner Participant, Lessor’s Lender and/or Servicer” are inserted after the word “LESSOR”.	
 
 	(v)	The definition of “Operative Documents” is amended such that it also includes “Assignment Agreement” among the list of documents.	
 
Annex 2-1

 	(vi)	The definition of “Part” is amended such that the word “LESSOR” is deleted each time it appears and is replaced with “OWNER” and such that the words “which is owned by OWNER and (if LESSOR is not the OWNER) leased to LESSOR and leased by LESSOR to LESSEE hereunder” are inserted immediately following the words “or other item of equipment”.	
(c) The definition of LESSOR’s Lender in Article 24.3 is amended such that the word “OWNER” is inserted in lieu of the word “LESSOR” in the first line. Article 24.3 is further amended such that the word “OWNER’s” is inserted in lieu of the word “LESSOR’s” in the third line.
4. New Definitions . The following definitions shall be added to Article 2.1 of the Lease in the proper alphabetical order:
(a) ““ Assignment Agreement ” means the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie AirFinance Acquisitions (Ireland) Limited, as Assignee, and Lessee as Lessee.”
(b) ““ Mortgagee ” any entity or entities to which OWNER grants a security interest in the Aircraft ad such entity’s or entities’ successors and assigns provided that LESSOR or OWNER has given notice of any such assignment.”
(c) ““ OWNER ” means Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3491 Trust, a national banking association, with its address at 299 South Main Street, MAC: U1228-120, Salt Lake City, Utah 84111, United States of America, the owner of the Aircraft.”
(d) ““ Owner Participant ” means Macquarie AirFinance Acquisitions Ltd.”
(e) ““ Servicer ” means Macquarie Aircraft Leasing Services (Ireland) Limited or such other person as may be notified to LESSEE by the LESSOR.”
(f) ““ Sub-Servicer ” means any of Macquarie Aircraft Leasing Services (US), Inc., Macquarie Aircraft Leasing Services (UK) Ltd. and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd., and each of their respective successors, transferees and assigns.”
(g) ““ Tax Indemnitee ” means each of LESSOR, OWNER, Owner Participant, Servicer, any Mortgagee, any LESSOR’s Lender and each person with whom any of the foregoing files a consolidated tax return.
5. LESSOR’s Bank Account . Articles 1.12 (LESSOR’s Bank Account) and 5.6 (LESSOR’s Bank Account) of the Lease are amended by replacing details of the Lessor’s bank account with the following:
 
Annex 2-2

Bank: Citigroup Europe, plc
*****
*****
*****
*****
Ref.: MSN 3491
6. Maintenance of Aircraft
(a) In Article 12.4.2, the first, second, fourth and fifth references to “LESSOR” are each replaced with a reference to “OWNER”.
(b) In Articles 12.5 (Removal of Engines) and 12.6 (Removal of APU), each reference to “LESSOR” is replaced with a reference to “OWNER”.
(c) In Articles 12.8.1 and 12.8.2, each reference to “LESSOR” is replaced with a reference to “OWNER”.
(d) In Article 12.8.3, the words “LESSOR’s title” are replaced with the words “OWNER’s title” and the words “neither LESSOR nor its” are replaced with the words “none of LESSOR, OWNER or their”.
(e) In Article 12.9.5, the references to “LESSOR” on the third and penultimate lines are each replaced with a reference to “OWNER”.
7. Title and Registration
(a) In Article 14.1, the first reference to “LESSOR” is replaced with a reference to “OWNER”.
(b) In Article 14.2, the reference to “LESSOR” in the second line is replaced with a reference to “OWNER”, and the words “protect and perfect LESSOR’s interest” are replaced with the words “protect and perfect OWNER’s, LESSOR’s and Owner Participant’s respective interest”.
8. Nameplates .
(a) Article 15.1 of the Lease shall be amended by replacing the description of the legend on the Airframe identification plates with the following:
“THIS AIRCRAFT IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3491 TRUST
MANUFACTURER’S SERIAL NO: 3491”
(b) Article 15.2 of the Lease shall be amended by replacing the description of the legend on the Engine identification plates with the following:
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 2-3

“THIS ENGINE [INSERT MSN] IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3491 TRUST”
9. Tax Indemnity.
(a) Article 16.1 (General Obligation of LESSEE) of the Lease is amended by adding the words “or the City of Dublin” immediately after the words “the City or County of Los Angeles” and by replacing each reference to “LESSOR” with a reference to “each Tax Indemnitee”.
(b) Article 16.2(a) of the Lease is amended by adding after the words “the City or County of Los Angeles” the words “the City of Dublin or the Republic of Ireland or any political subdivision thereof”.
(c) Articles 16.2(a), 16.2(e), 16.2(g), 16.2(h), 16.2(i), 16.2(j), 16.3, 16.4, 16.5, 16.6, and 16.7 are amended by replacing each reference to “LESSOR” with a reference to “any Tax indemnitee”.
(d) Articles 16.2(d) is amended such that the first, second, fourth, and fifth references to “LESSOR” are each replaced with a reference to “any Tax indemnitee”.
(e) Articles 16.2(c), 16.2(h), and 16.5 are amended by replacing each reference to “LESSOR’s” with a reference to “each Tax Indemnitee’s”.
10. General Indemnity . Article 17.1 of the Lease is amended by replacing the words “LESSOR and its” with the words “LESSOR, OWNER, Servicer and their respective”.
11. Insurance . Article 18.4 is amended by replacing “LESSOR” with “OWNER” in the second line.
12. Loss, Damage and Requisition
(a) Article 19.4 (Surviving Engine(s)) is amended by replacing the words “LESSOR will transfer all its” with “LESSOR shall procure the transfer of all” and by deleting the words “on the part of LESSOR”.
(b) Articles 19.5.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
(c) Article 19.5.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
(d) Articles 19.6.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
(e) Article 19.6.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
 
Annex 2-4

13. Return of Aircraft . Article 23.9.13 is amended by replacing the first occurrence of “LESSOR’s” with “OWNER’s”.
14. Assignment .
(a) Article 24.2.1 is amended by replacing the words “LESSOR may” with “LESSOR or OWNER may, in each case subject to the terms, conditions and limitations set forth in this Article 24”.
(b) Article 24.2 is amended by adding the following provision as Article 24.2.3: “Any assignment, conveyance, transfer or other disposition by Owner and/or Owner Participant of all or any of their respective right, title and interest in, to or under the Lease and/or other Operative Documents and/or the Aircraft shall be subject to the terms, conditions and restrictions of this Article 24 to the same extent and with the same effect as if the same were an assignment, conveyance, transfer or other disposition of any or all of Lessor’s right, title or interest herein or in any other Operative Document or in respect of the Aircraft.”
(c) Article 24.4 (LESSEE Cooperation) is amended by adding to the end of the second sentence thereof the words “and executing and delivering a Lessee Acknowledgement substantially in the form of Annex 8 to the Assignment Agreement”.
15. Defaults of Lessee .
(a) Article 25.3(e) is amended by replacing “LESSOR” with “LESSOR and OWNER”.
(b) Article 25.6(c) is amended by replacing the words “LESSOR elects” with the words “LESSOR and OWNER elect” and by replacing reference to “LESSOR” in the fifth line with the words “LESSOR and OWNER”.
Article 25.6(f) is amended by replacing “LESSOR’s” with the words “LESSOR’s or OWNER’s”.
16. Notices . Article 26.2 of the Lease shall be amended by replacing the address information relating to the Lessor set forth therein with the following:
MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
E-mail: notices@macquarie.aero
with a copy to:
Macquarie AirFinance Acquisitions Limited
Level 1, South Bank House
Barrow Street
 
Annex 2-5

Dublin 4
Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
Macquarie Aircraft Leasing Services (US), Inc.
Suite 200
Two Embarcadero Center
San Francisco, CA 94111
Attn: Contracts Management Group
Fax: +1 415 829 6899
17. Arbitration . Article 27 is deleted in its entirety and all references thereto in the Lease shall have no further effect.
18. Governing Law and Jurisdiction .
(a) Article 28.1 (California Law) is deleted in its entirety and replaced with the following:
“ New York Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.”
(b) Article 28.2 (Non-Exclusive Jurisdiction in California) is deleted in its entirety and replaced with the following:
“ Non-exclusive Jurisdiction in New York . The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York, and each party agrees to comply with all requirements necessary to effect the intent of this Article 28.2. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, to such party at is respective address applicable pursuant to Article 26 (Notices). The provisions of this subsection (i) shall not limit the rights of any party to serve process in any other manner permitted by law or to obtain execution of judgment in any jurisdiction.”
 
Annex 2-6

(c) Article 28.3 (Protection of Interest in the Aircraft) is amended by deleting the words “NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27”.
(d) Article 28.4 is amended by replacing part (c) with “(c) the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York.”
(e) Article 28.6 is amended by deleting the phrase “in accordance with Section 415.40 of the California Code of Civil Procedure”.
(f) Article 28.8 is amended by replacing the words “California (notwithstanding the conflict Laws of the State of California)” with the words “New York” and by replacing the words “Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles” with the words “New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York”.
 
Annex 2-7

ANNEX 3
FORM OF CONFIRMATION OF EFFECTIVE TIME
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
                     , 2010 
Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.
 
Re:	Confirmation of Effective Time	
Ladies & Gentlemen:
Reference is hereby made to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie AirFinance Acquisitions (Ireland) Limited, as Assignee, and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “Assignment Agreement”) pertaining to one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3491 and registration mark N503VL. Any and all initially capitalized terms used herein shall have the meanings ascribed thereto in the Assignment Agreement, unless specifically defined herein.
In accordance with Section 2 of the Assignment Agreement, the undersigned hereby confirm to Lessee that the sale of the Aircraft to New Owner and the Assignment occurred today, [            ] [    ], 2010 (Time:              [Pacific time]) (the “ Effective Time ”).
Each of Existing Lessor and, by its acknowledgement below, Lessee hereby confirms that, as of the Effective Time, the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease are as follows:

Type of Reserves	  	Rate of Reserves	  	Reserve Balances	
Airframe Reserves (6 Year Check):	  	***** per calendar month	  	US$[            ]	
Airframe Reserves (12 Year Check):	  	***** per calendar month	  	US$[            ]	
Engine Performance Restoration Reserves for MSN V12908:	  	***** per Engine flight hour	  	US$[            ]	
Engine Performance Restoration Reserves for MSN V12912:	  	***** per Engine flight hour	  	US$[            ]	
Engine LLP Reserves for MSN V12908:	  	***** per Engine cycle	  	US$[            ]	
Engine LLP Reserves for MSN V12912:	  	***** per Engine cycle	  	US$[            ]	
Landing Gear Reserves:	  	***** per calendar month	  	US$[            ]	
APU Reserves:	  	***** per APU hour	  	US$[            ]	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 3-1

			
Sincerely,	
	
INTERNATIONAL LEASE FINANCE
CORPORATION	
		
By:	 		
Name:	 		
Title:	 		
	
MACQUARIE AIRFINANCE ACQUISITIONS
(IRELAND) LIMITED	
		
By:	 		
Name:	 		
Title:	 		
Lessee hereby acknowledges receipt of the above Confirmation and (i) confirms the satisfaction or waiver of each of the conditions set forth in Annex 5 to the Assignment Agreement, (ii) confirms the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease as specified above, and (iii) agrees to the effectiveness of the Assignment and the amendments to the Lease set forth in the Assignment Agreement, including Annex 2 thereto (each in accordance with the terms hereof and subject to the provisions of Article 24 of the Lease).

CONCESIONARIA VUELA COMPANIA DE
AVIACION, S.A.P.I. DE C.V.	
		
By:	 		
Name:	 		
Title:	 		
		
By:	 		
Name:	 		
Title:	 		
 
Annex 3-2

ANNEX 4
INSURANCE INFORMATION
 
I.	CONTRACT PARTIES	
 
A.	New Owner and Headlessor:	
Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3491 Trust (“ Owner Trustee ”)
299 South Main Street
MAC: U1228-120
Salt Lake City, Utah 84111
United States of America
Fax: +1 801-246-5053
 
B.	Assignee and Lessor	
Macquarie AirFinance Acquisitions (Ireland) Limited (“ MAAL Ireland ”)
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
C.	Owner Participant:	
Macquarie AirFinance Acquisitions Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
Annex 4-1

D.	Enero Warehouse Leasing Finance S.à.r.l., as Borrower (“ Borrower ”):	
 
E.	Macquarie Aircraft Leasing Services (Ireland) Limited (“ Servicer ”)	
 
F.	Macquarie Aircraft Leasing Services (US), Inc. (MALSUS) and Macquarie Aircraft Leasing Services (UK) Ltd. (MALSUK), as Servicer Delegates	
 
G.	Bank of Utah, as Security Trustee and Loss Payee	
 
H.	Santander Asset Finance Plc (formerly Alliance & Leicester Commercial Finance Plc), as Facility Agent	
 
I.	Citibank N.A., as Account Bank	
 
J.	Each of the persons from time to time being Lenders under the Credit Agreement identified as a Contract below.	
 
K.	Prior Lessor and Assignor	
International Lease Finance Corporation (“ ILFC ”)
*****
*****
*****
*****
*****
*****
and, in respect of Legal Liability Insurances, Wells Fargo Bank Northwest, National Association (in its individual capacity), Macquarie AirFinance Warehouse (No. 1) Limited, Macquarie AirFinance Ltd., the Borrower Group Companies, and the above Contract Parties, their respective subsidiaries, shareholders, affiliates, directors, officers, agents, employees, servants, successors, assigns and transferees.
 
II.	CONTRACTS :	
 
A.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”) and MAAL Ireland as assignee of ILFC pursuant to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, MAAL Ireland and Volaris, as supplemented and amended from time to time.	
 
B.	Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, as Assignor, MAAL Ireland, as assignee and Volaris, as lessee.	
 
C.	Head Lease Agreement dated as of [            ] [    ], 2010 between Owner Trustee and MAAL Ireland.	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 4-2

D.	Senior Secured Credit Agreement dated as of January 31, 2008 among Borrower, Owner Participant, Facility Agent, Security Trustee, Account Bank and the Lenders party thereto.	
 
E.	Security Agreement dated as of January 31, 2008 among Borrower, MAAL Ireland, certain other entities as more particularly described therein and the Security Trustee.	
 
F.	Trust Agreement dated as of [            ] between the Owner Trustee and Owner Participant.	
 
G.	Operating Lease Security Assignment (MSN 3491) dated as of [            ] 2010 between the Lessor as assignor and the Security Trustee.	
 
H.	Servicing Agreement dated as of January 31, 2008 among Owner Participant, the Servicer and certain other entities as more particularly described therein.	
 
I.	Servicer Delegate Agreement dated as of January 31, 2008 between the Servicer and MALSUS.	
 
J.	Servicer Delegate Agreement dated as of January 31, 2008 between the Servicer and MALSUK.	
 
K.	Servicer Delegate Agreement dated as of December 29, 2009 between the Servicer and MALSSING.	
 
Annex 4-3

ANNEX 5
LESSEE CONDITIONS PRECEDENT
On or before the Effective Time, the following conditions shall have been satisfied or waived by Lessee:
 
 	a.	Lessee shall have received the following, all of which shall be in the English language and be reasonably satisfactory in form and substance to Lessee:	
 
 	i.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignor naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith;	
 
 	ii.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignee naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith; and	
 
 	iii.	with respect to Assignee, a certificate of tax residency in Ireland.	
 
 	b.	Lessee shall have received from Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee, a Notice of Removal and Discharge substantially in the form of Annex 6 hereto.	
 
 	c.	Lessee shall have received from Macquarie AirFinance Acquisitions Ltd. a guarantee substantially in the form of Annex 11 hereto.	
 
 	d.	The deregistration power of attorney originally issued by Lessee shall have been marked “cancelled” and returned to Lessee. For purposes of closing the transaction contemplated hereby, a copy of the cancelled original deregistration power of attorney sent to Lessee via facsimile on the Closing Date shall suffice, provided the original, marked “cancelled”, is delivered to Lessee via international express courier within seven (7) Business Days after the Closing Date.	
 
 	e.	Lessee shall have received an executed Letter of Quiet Enjoyment from New Owner substantially in the form attached hereto as Annex 9.	
 
Annex 5-1

ANNEX 6
NOTICE OF REMOVAL AND DISCHARGE
From: Wells Fargo Bank Northwest, National Association, as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee (collectively, the “ Security Trustees ”)
To: Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (the “ Lessee ”)
Date: [            ] [    ], 2010
 
Re:	Aircraft Lease Agreement dated as of March 9, 2007, currently between International Lease Finance Corporation (the “ Lessor ”) and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as the same may be amended, supplemented or otherwise modified, the “ Lease ”) relating to an Airbus A319-100 aircraft bearing manufacturer’s serial number 3491 (the “ Aircraft ”).	
The purpose of this letter is to notify you that (i) the Aircraft has been removed as of _____ from International Lease Finance Corporation’s facility provided by an AIG affiliate with funding provided to the AIG affiliate by the Federal Reserve Bank of New York, (ii) all encumbrances and liens in favor of the Security Trustees are hereby released and discharged and (iii) any and all payments due under the Lease shall cease to be paid to the following account:
[INSERT ACCOUNT DETAILS FROM PRIOR NOTICE]
Very truly yours,
WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual capacity but solely
as First Lien Security Trustee, Second Lien Security Trustee,
Third Lien Security Trustee and Fourth Lien Security Trustee

By:	 	 	
Name:	 	 	
Title:	 	 	
Confirmed and Acknowledged
International Lease Finance Corporation
By:
Name:
Title:
 
Annex 6-1

ANNEX 7
FEDERAL AVIATION ADMINISTRATION CONVEYANCE AND ENGINE THRUST
INFORMATION
 
 	•	 	Aircraft Lease Agreement dated as of March 9, 2007 between International Lease Finance Corporation, as lessor and Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”), as lessee, with Estoppel and Acceptance Certificate dated April 21, 2008 by Volaris attached thereto, with respect to the Airframe and the Engines (collectively, the “ Lease ”), which Lease was filed with the FAA as one instrument on April 21, 2008, and assigned conveyance number DV000547.	
 
Annex 7-1

ANNEX 8
FORM OF LESSEE ACKNOWLEDGEMENT

From:	  	MACQUARIE AIRFINANCE ACQUISITIONS (IRELAND) LIMITED (the “ Lessor ”) BANK OF UTAH (the “ Security Trustee ”)	
		
To:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (the “ Lessee ”)	
[              ] [      ], 2010
Dear Sirs:
We refer to the lease agreement dated March 9, 2007 currently between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A319-100 with manufacturer’s serial number 3491 (together with the engines described in the Lease Agreement, the “ Aircraft ”) together with all related agreements (including, without limitation, any supplements or amendments) entered into in connection with, or relating to, the lease of the Aircraft and any letter of credit related thereto (together with the Lease Agreement, the “ Lease Documents ”);
All terms defined in the Lease Agreement (including terms expressly defined therein or by reference to another document or otherwise), unless the context otherwise requires, have the same meanings in this Lessee Acknowledgement (this “ Acknowledgment ”).
We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:
1. By the Security Agreement made January 31, 2008 (the “ Security Agreement ”) between, inter alios, the Lessor (as assignor) and the Security Trustee, the Lessor has assigned and encumbered to the Security Trustee, as security, all of its right, title and interest in and to all of its rights, title and interests, present and future, actual or contingent, in and to, inter alia the Lease Documents (other than in relation to the Excluded Property (as defined below)) and all other rights and benefits whatsoever accruing to it under the Lease Documents (collectively, the “ Lease Assignment Documents ”). By execution of the acknowledgement to this Acknowledgment you hereby consent, effective as of the date hereof, to the security assignment in favor of the Security Trustee described in the preceding sentence. In this Acknowledgment, “ Excluded Property ” means all right, title and interest, present or future (actual or contingent) of the Lessor in and to the operational indemnities contained in the Lease Documents, to the extent such indemnities are given expressly for the benefit of the Lessor or any of its directors, officers, employees, servants or agents only.
2. Until the Security Trustee serves a Relevant Notice (as defined below) on you, you shall continue to (a) deal directly with the Lessor in respect of the Lease Documents and the other Lease Assignment Documents to which you are party and (b) make payments as provided in the Lease Agreement.
 
Annex 8-1

3. If the Security Trustee delivers to you a written notice that it has exercised its rights under the Security Agreement (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Documents and the other Lease Assignment Documents to which you are party for the benefit of the Security Trustee as if the Security Trustee were named in place of the Lessor as a party to the Lease Assignment Documents. After the Security Trustee delivers any Relevant Notice, you shall not recognize the exercise by the Lessor of any of its rights and powers under the Lease Assignment Documents unless and until requested to do so by the Security Trustee.
4. Save as expressly provided herein, we hereby confirm that none of your rights and obligations under the Lease Documents will be affected (including, without limitation, any obligations in respect of the payment of Rent, Reserves, Taxes or other amounts due and payable under the Lease) as a result of (a) the giving of this Acknowledgment or any Relevant Notice; or (b) the execution of the Lease Assignment.
5. This Acknowledgment is governed by New York law.
This Acknowledgment and the authorizations and instructions contained in this Acknowledgment are irrevocable unless and until you receive written notice to the contrary from the Security Trustee. This Acknowledgment and the instructions contained herein cannot be amended or modified without the written consent of the Security Trustee and the Lessor. The Security Trustee shall, in exercising any right, privilege or remedy under or in respect of the Lease be bound by and exercise the same in accordance with the terms of the Lease and, to the extent it receives any sums, whether of Rent, proceeds of Insurances, Reserves or otherwise, shall hold, invest, apply, retain and reimburse such sums as provided in the Lease but otherwise shall have no liability for the performance of, any other of the Lessor’s obligations under the Lease Assignment Documents unless expressly agreed to in writing by the Security Trustee.
By its signature below, Lessee expressly acknowledges receipt of the Acknowledgment and expressly and irrevocably agrees to the provisions contained in this Acknowledgment, including paragraph 3 hereof.
[Signature Page Follows]
 
Annex 8-2

	
Yours faithfully,	
	
FOR AND ON BEHALF OF
MACQUARIE AIRFINANCE
ACQUISITIONS (IRELAND) LIMITED
(as Lessor)	
	
For and on behalf of
BANK OF UTAH,
not in its individual capacity,
but solely as security trustee
(as Security Trustee)	

ACKNOWLEDGED AND AGREED
this              day of             , 20    	
	
CONCESIONARIA VUELA COMPANIA
DE AVIACION, S.A . P.I. DE C.V.
(as Lessee)	
		
By:	 		
Name:	 		
Title:	 		
		
By:	 		
Name:	 		
Title:	 		
 
Annex 8-3

ANNEX 9
FORM OF LETTER OF QUIET ENJOYMENT
[            ] [    ], 2010
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)
Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01210 México, D.F.
México
Ladies and Gentlemen:
We confirm that we have received a copy and are aware of the terms of Aircraft Lease Agreement, dated March 9, 2007, as amended from time to time (the “ Lease ”), between Macquarie AirFinance Acquisitions (Ireland) Limited (“ Lessor ”) and yourselves (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) concerning that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3491 (the “ Aircraft ”). Words and expressions defined in the Lease shall have the same respective meanings when used in this letter.
By a Security Agreement dated as of January 31, 2008 among the Borrower, the Lessor, certain other entities as more particularly described therein and the Security Trustee and acceded to by the Lessor on [            ] (the “ Security Agreement ”) among, amongst others, Lessor and Bank of Utah, as Security Trustee (“ Security Trustee ”), Lessor has assigned to the Security Trustee, as security, all of its rights, title and interest in, to and under the Lease and the other Collateral (as defined in the Security Agreement), including certain insurance proceeds.
We hereby confirm that so long as no Default or Event of Default shall have occurred and be continuing, we will not, through our own actions or through the actions of others lawfully claiming through or under us, interfere with your quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of the Lease.
[Signature Page Follows]
 
Annex 9-1

	
Very truly yours,	

BANK OF UTAH	
(as Security Trustee)	
 
Annex 9-2

ANNEX 10
ASSIGNOR, ASSIGNEE AND LESSEE REPRESENTATIONS AND WARRANTIES
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
(a) Assignor, Assignee and Lessee hereby agree and acknowledge that immediately prior to the Effective Time, Assignor holds a cash Security Deposit in the amount of ***** pursuant to the terms and conditions of the Lease and that from and after the Effective Time, Assignee is deemed to have received and shall hold (subject to and in accordance with the provisions of the Lease) such Security Deposit;
(b) Assignor, Assignee and Lessee Acknowledgment. Assignor, Assignee and Lessee hereby agree and acknowledge as of the Effective Time that Rent under the Lease is ***** per month; and
(c) The Reserve Rates and balance of the reserve accounts as of             , 2010 are as set forth in Annex 3 hereof and as of the Effective Time such amounts shall be deemed to have been received by and shall be held by Assignee subject to and in accordance with the relevant provisions of the Lease.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 10-1

ANNEX 11
FORM OF GUARANTEE
THIS GUARANTEE AND UNDERTAKING (this “ Guarantee ”) is made on this [            ] day of [            ] 2010, between:
(1) MACQUARIE AIRFINANCE ACQUISITIONS LIMITED , a company incorporated under the laws of Bermuda (“ MAAL ”); and
(2) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. , a company incorporated under the laws of Mexico (“ Lessee ”).
NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Clause 1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for all purposes of this Guarantee and shall be equally applicable both to the singular and plural forms of the terms defined. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Lease (as defined below).
“ Lease ” means the Aircraft Lease Agreement, dated as of March 9, 2007 (as amended, modified or supplemented from time to time) between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), pursuant to which Lessor has leased to Lessee one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3491 and FAA registration mark N503VL together with two (2) IAE International Aero Engines AG V2524-A5 engines bearing manufacturer’s serial numbers V12908 and V12912.
“ Lessor ” means Macquarie AirFinance Acquisitions (Ireland) Limited, a company incorporated under the laws of Ireland.
“ New Owner ” means Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee of MSN 3491 Trust.
Clause 2. Representations and Warranties of MAAL. MAAL represents and warrants that:
2.1 this Guarantee constitutes a valid and binding agreement of MAAL. MAAL is duly incorporated, validly existing and in good standing under the laws of Bermuda. The transactions contemplated hereby and the execution, delivery and performance of this Guarantee by MAAL (i) have been duly authorized by all necessary corporate action of MAAL and (ii) are within MAAL’s power and authority and do not and will not violate the constitutional documents of MAAL, any applicable law, rule, regulation, judgment or court order or any provision in any existing agreement binding on MAAL;
2.2 all authorizations, consents, registrations and notifications required to be obtained by MAAL in connection with the entry into, performance, validity and enforceability of this Guarantee and the transactions contemplated by this Guarantee, have been (or will on or before the date hereof have been) obtained or effected (as appropriate) and are (or will be on their being obtained or effected) in full force and effect; and
 
Annex 11-1

2.3 on or prior to the date of this Guarantee, MAAL has not and does not anticipate the need to (i) commence a voluntary case or other proceeding, or become subject to an involuntary case or other proceeding, seeking liquidation, reorganization, adjudication as bankrupt, winding-up, or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property; (ii) consent to any relief or to the appointment of or taking possession by any such official in any voluntary case or other proceeding commenced against it; (iii) sell, assign, transfer all or a material part of its assets; (iv) admit in writing its inability to pay its debts generally as they come due; (v) make a general assignment for the benefit of creditors; (v) cease to operate its business as a going concern; or (vi) commence any corporate action to authorize any of the foregoing.
Clause 3. Guarantee.
3.1 MAAL, with effect from the date hereof, hereby unconditionally and irrevocably guarantees to Lessee the full and prompt payment and performance of each and all of Lessor’s obligations to Lessee under the Lease, and compliance by Lessor with, all obligations, covenants, terms, conditions and undertakings of Lessor contained in the Lease and the Operative Documents to which Lessor is a party in accordance with the terms thereof and the prompt payment and performance by Assignee of each and all of Assignee’s obligations to Lessee under the Assignment, Assumption and Amendment Agreement (such obligations collectively being referred to as the “ Guaranteed Obligations ”); and
3.2 MAAL undertakes to Lessee that, if either or both of Lessor and/or Assignee does not perform any of the Guaranteed Obligations when required to do so, it shall within two (2) Business Days of written demand from Lessee procure the performance by Lessor and/or Assignee, as applicable, or perform itself the relevant Guaranteed Obligation.
3.3 MAAL as a principal obligor and as a separate and independent stipulation shall indemnify Lessee upon written demand against any loss, liability or cost or expense suffered by Lessee (including reasonable attorneys’ fees and disbursements reasonably incurred by Lessee in the enforcement of this Guarantee) if (i) it does not perform the Guaranteed Obligations; and (ii) if any obligation guaranteed by it becomes unenforceable, void or illegal.
3.4 The guarantee set out in this Clause 3 shall be automatically terminated, without the requirement for any further action by any party, with effect from the occurrence of any transfer by Lessor of its rights and obligations under the Lease in conformity with Article 24 of the Lease, and MAAL shall have no further liability or obligation hereunder with effect from such transfer save in respect of any liabilities or obligations arising prior to such transfer and any liabilities and obligations arising in connection with any rights retained by MAAL, and save as expressly set out herein.
3.5 MAAL shall not permit Lessor or New Owner to act or refrain from acting in any manner contrary to the provisions of the Lease.
 
Annex 11-2

Clause 4. Release. Once all the Guaranteed Obligations have been satisfied in full and MAAL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MAAL from this Guarantee.
Clause 5. Miscellaneous.
5.1 Governing Law. THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO ANY CONFLICT OF LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
5.2 Successors and Assigns. The terms of this Guarantee shall be binding on, and inure to the benefit of, Lessee and MAAL and their respective permitted successors and assigns.
5.3 Waiver of Notice and Defense. Except as provided in Clause 3.2, MAAL hereby waives diligence, promptness, presentment, demand for payment or performance and protest and notice of protest, notice of acceptance and any other notice in respect of the Guaranteed Obligations or any part of them, and any defense arising by reason of any disability or other defense.
5.4 Jurisdiction. The parties agree that the courts of the United States District Court for the Southern District of New York, or any court sitting in the county of New York, New York, are to have non-exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) which may arise in connection with the legal relationships established by this Guarantee or otherwise arising in connection with this Guarantee. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction. MAAL further consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient or inappropriate court and agrees not to plead or claim the same.
5.5 Severability. Should any one or more of the provisions of this Guarantee be held to be invalid, illegal or unenforceable in any jurisdiction, the same shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity, illegality or unenforceability of a particular provision in a particular jurisdiction shall not render such provision invalid, illegal or unenforceable in any other jurisdiction.
5.6 Waivers, Amendments and Variations in Writing. The provisions of this Guarantee shall not be capable of being waived, amended or varied otherwise than by an express waiver or amendment in writing; and in particular any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver, amendment or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessee’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension of any variation or amendment of any such right.
 
Annex 11-3

5.7 Notices. All notices and other communications under, or in connection with, this Guarantee will, unless otherwise stated, be given and will become effective in the same manner as provided in Article 26 of the Lease.
The notice details of MAAL are as follows:

	 	Address:	  	c/o Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland	
	 	Fax:	  	+353 1 238 3299	
	 	Attention:	  	Contracts Management Group	
			
	 	With a copy to:	  		
			
	 	Address:	  	Macquarie Aircraft Leasing Services (US) Inc.
Two Embarcadero Center, Suite 200
San Francisco, CA 94111
U.S.A.	
	 	Fax:	  	+ 1 415 829 6899	
	 	Attention:	  	Contracts Management Group	
*    *    *
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 11-4

IN WITNESS WHEREOF , the parties hereto have executed and delivered this Guarantee on the date shown at the beginning of this Guarantee.

CONCESIONARIA VUELA COMPAÑÍA
DE AVIACIÓN, S.A.P.I. DE C.V.,	  	MACQUARIE AIRFINANCE
ACQUISITIONS LIMITED	
		
By:	  	By:	
		
Name:	  	Name:	
		
Title:	  	Title:	
		
By:	  		
		
Name:	  		
		
Title:	  		
 
Annex 11-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.26
DATED AUGUST 23, 2010
INTERNATIONAL LEASE FINANCE CORPORATION,
AS ASSIGNOR
MACQUARIE AEROSPACE IRELAND LIMITED,
AS ASSIGNEE
AND
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
(SUCCESSOR TO CONCESIONARIA VUELA
COMPANIA DE AVIACION, S.A. DE C.V.),
AS LESSEE

ASSIGNMENT, ASSUMPTION AND AMENDMENT
AGREEMENT
RELATING TO ONE (1) AIRBUS A319-100 AIRCRAFT
MANUFACTURER’S SERIAL NUMBER 3590,
FAA REGISTRATION MARK N504VL

[COUNTERPART NO. [            ] OF [            ] SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN EFFECT IN ANY APPLICABLE JURISDICTION, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.]

CONTENTS

Clause	  	Page	 	
Section 1. Defined Terms	  	 	2	  	
Section 2. Effectiveness	  	 	2	  	
Section 3. Assignment, Assumption and Release	  	 	2	  	
Section 4. Lessee Consent and Agreement	  	 	4	  	
Section 5. Payments to Assignee	  	 	4	  	
Section 6. Payments to Assignor	  	 	4	  	
Section 7. Insurance	  	 	4	  	
Section 8. Identification Plates	  	 	5	  	
Section 9. Quiet Enjoyment	  	 	5	  	
Section 10. Post Effective Time	  	 	5	  	
Section 11. Cooperation	  	 	5	  	
Section 12. Representations and Warranties	  	 	6	  	
Section 13. Lease Representations and Warranties	  	 	8	  	
Section 14. Assignee Servicer and Assignments	  	 	9	  	
Section 15. Assignment	  	 	9	  	
Section 16. Notices	  	 	9	  	
Section 17. Modifications	  	 	10	  	
Section 18. Delivery of Documents by Fax or E-mail	  	 	10	  	
Section 19. Governing Law, Etc.	  	 	10	  	
Section 20. Further Assurances	  	 	10	  	
Section 21. Headings	  	 	10	  	
Section 22. Invalidity of any Provision	  	 	10	  	
Section 23. Survival	  	 	10	  	
ANNEX 1 Lease Documents	  				
ANNEX 2 Amendments to Lease Documents	  				
ANNEX 3 Form of Confirmation of Effective Time	  				
ANNEX 4 Insurance Information	  				
ANNEX 5 Lessee Conditions Precedent	  				
ANNEX 6 Notice of Removal and Discharge	  				
ANNEX 7 Federal Aviation Administration Conveyance and Engine Thrust Information	  				
ANNEX 8 Form of Lessee Acknowledgment	  				
 
- i -

			
ANNEX 9 Form of Letter of Quiet Enjoyment	  		
ANNEX 10 Assignor and Lessee Representations and Warranties	  		
ANNEX 11 Form of Guarantee	  		
ANNEX 12 Form of Assumption Agreement	  		
 
- ii -

THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (this “ Agreement ”), is entered into as of August 23, 2010, by and among (1) INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation (“ Assignor ”), (2) MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland (“ Assignee ”), and (3) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), a company organized under the laws of Mexico (“ Lessee ”).
PRELIMINARY STATEMENTS : 
WHEREAS , Assignor and Lessee have entered into an Aircraft Lease Agreement, dated as of March 9, 2007 (as amended and supplemented by Side Letter #1 to Aircraft Lease Agreement described as item 3 on Annex 1 hereto, the “ Lease ”), pursuant to which Assignor has leased to Lessee one (1) Airbus A319-100 (shown on the international registry as AIRBUS model A319) aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG model IAE V2524-A5 (shown on the international registry as INTERNATIONAL AERO ENGINES model V2500-A5) engines bearing manufacturer’s serial numbers V13000 and V13002, respectively (each of which has 550 or more rated take-off horsepower) (collectively and as more fully described in the Lease, the “ Aircraft ”), as more fully described in Annex 7 hereto.
WHEREAS , International Lease Finance Corporation (“ Seller ”) has agreed, among other things, to sell the Aircraft or cause its affiliate to sell the Aircraft to Macquarie Aerospace Limited (“ Buyer ”) or Buyer’s designee subject to the Lease and Buyer has agreed to purchase or cause its designee to purchase the Aircraft from Seller or Seller’s affiliate pursuant to an Aircraft Sale Agreement dated as of April 13, 2010 between Seller and Buyer (the “ Sale Agreement ”).
WHEREAS , Buyer has designated Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ New Owner ”) to purchase the Aircraft in accordance with the Sale Agreement and will cause New Owner to lease the Aircraft to Assignee pursuant to a head lease agreement.
WHEREAS , concurrently with the sale of the Aircraft to New Owner, Assignor will, subject to the terms and conditions of this Agreement, assign to Assignee all of its rights, obligations and interest to and under the Lease and all other agreements (including all Operative Documents as such term is defined in the Lease) described on Annex 1 hereto and delivered in connection with, or relating to, the leasing of the Aircraft and that affect the rights or obligations of the “LESSOR” or “LESSEE” thereunder as of or after the Effective Time (as defined below) (the “ Lease Documents ”), subject to the rights of Lessee (as more fully described in Section 3(a) below and collectively with the other assignments, assumptions, releases and covenants in Section 3, the “ Assignment ”).
WHEREAS , Assignor, Assignee and Lessee have agreed to enter into this Agreement in order to, among other things, (i) effect the Assignment, (ii) evidence Lessee’s acknowledgment of, and consent to, the Assignment and (iii) amend certain provisions of the Lease Documents.
 
- 1 -

NOW , THEREFOR , in consideration of and subject to the mutual covenants, terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
Section 1. Defined Terms . Any and all initially capitalized terms used herein (including the Annexes hereto) and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
Section 2. Effectiveness . Subject to satisfaction of or waiver by Lessee (in its sole discretion) of the conditions precedent set forth in Annex 5 hereto, the Assignment, the amendment to the Lease Documents described herein and in Annex 2 hereto and Lessee’s consent in Section 4 will take effect as of the time of the transfer of title to the Aircraft by Assignor to New Owner (the “ Effective Time ”), as evidenced by a Confirmation of Effective Time substantially in the form of Annex 3 hereto to be delivered to and acknowledged by Lessee from Assignor and Assignee at or promptly after the Effective Time (a “ Confirmation ”). Lessee agrees to countersign and deliver to Assignor and Assignee a copy of such Confirmation promptly upon receipt thereof.
Section 3. Assignment, Assumption and Release.
(a) Assignment.
(i) Effective as of the Effective Time, Assignor hereby assigns, conveys, transfers and sets over to Assignee except as may be otherwise expressly specified in the following sentence all of Assignor’s rights and obligations and Assignor’s interest in, to and under the Lease Documents, arising on and after the Effective Time, subject to the rights of Lessee under the Lease Documents. Notwithstanding any other term or agreement in this Agreement:
(x) Assignor is not assigning its rights and obligations under Article 6.4 of the Lease.
(y) Assignor shall continue to be responsible to perform the obligations of “LESSOR” under Article 6.4 of the Lease and in respect of any other obligation arising in connection with any other right retained by Assignor in accordance with the provisions hereof (those portions of the Lease Documents assigned under this Section 3(a)(i), hereinafter the “ Assigned Lease Documents ”).
(ii) Effective as of the Effective Time, Lessee, Assignor and Assignee hereby agree that, except with respect to the matters set forth in Section 3(a)(i)(x) above, Assignor shall have no further rights and obligations under the Assigned Lease Documents, except that the disclaimers and indemnities contained in Articles 8 (Disclaimers and Waivers) and 17 (Indemnities) of the Lease and any other provisions of the Lease Documents which are expressly stated to survive the expiration or termination of the leasing of the Aircraft under the Lease shall continue in full force and effect for the benefit of Assignor in addition to the Assignee in
 
- 2 -

accordance with the provisions of the Lease. Notwithstanding the above, Assignor and Lessee shall have the same rights and remedies against each other as each would have had under the Lease in respect of any rights and obligations arising, losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if the Assignor had remained the “LESSOR” under the Lease.
(b) Assumption.
(i) Effective as of the Effective Time, Assignee hereby accepts and assumes all of Assignor’s rights and obligations assigned, conveyed, transferred and set over by Assignor pursuant to Section 3(a).
(ii) Assignee warrants, covenants and agrees with Lessee that on and after the Effective Time, Assignee will perform all obligations to be performed by Lessor under the Assigned Lease Documents that arise on or after the Effective Time and will be bound by all of the terms thereof.
(iii) Any reference to the rights of “LESSOR” under the Lease in connection with the right of “LESSOR” to assign such rights, shall include any “associated rights”, as defined in The Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Cape Town Convention ”) in effect at the Effective Time of the Assignee in, and to, this Agreement and the Lease. Any such associated rights may consist of any of Assignee’s rights to procure payment or other performance by Lessee (as “debtor” under the Cape Town Convention) under this Agreement, the Lease and/or any other operative document associated with the Lease.
(c) Retained Obligations and Release. Subject to the terms of this Agreement including without limitation Sections 2 and 3(a) and except as otherwise provided therein, effective as of the Effective Time, Lessee hereby releases Assignor from any obligations of “LESSOR” under the Assigned Lease Documents which arise on or after the Effective Time including but not limited to any obligations with respect to the return to Lessee of any Security Deposit or the reimbursement of any Reserves, all of which obligations in respect of such Security Deposits and Reserves having been assumed by New Owner and Assignee.
 
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Section 4. Lessee Consent and Agreement . Subject to the provisions hereof, and Lessee’s rights hereunder and under the Lease, Lessee hereby acknowledges and consents to the Assignment and to Assignor’s assignment to New Owner of all of Assignor’s reversionary rights and interest in the manufacturer warranties that were assigned to Lessee by Assignor pursuant to the Lease Documents and agrees that Assignee will be obligated to fulfill all of the obligations of Lessor under the Assigned Lease Documents which arise on and after the Effective Time and that and until otherwise notified in writing Lessee will perform for the benefit of Assignee all of Lessee’s obligations under the Assigned Lease Documents which arise on and after the Effective Time, save for its obligations in respect of any rights expressly retained by Assignor hereunder.
Section 5. Payments to Assignee . Lessee and Assignee hereby agree that on and after the Effective Time all Rent, Reserves, Security Deposits and other payments due from Lessee to Lessor under the Lease will be made by wire transfer to the bank account of Assignee described in Annex 2 hereto or to such other account in the United States or Ireland (unless otherwise agreed by Lessee), notified to Lessee pursuant to Section 16 (Notices) below.
Section 6. Payments to Assignor . Lessee and Assignee hereby agree that as of the Effective Time all Rent, Reserves, Security Deposits and other payments paid to Assignor in accordance with the Lease prior to the Effective Time shall be deemed to have been paid for all purposes under the Lease and the Reserves and Security Deposit shall be deemed to have been received by Assignee and Assignee covenants and agrees that it shall hold, apply, retain and reimburse the Reserves and Security Deposit or cause to be held, applied, released and reimbursed the Reserves and Security Deposit strictly in accordance with all relevant provisions of the Lease.
Section 7. Insurance . From and after the Effective Time and until otherwise notified in writing, Lessee will cause:
(a) New Owner to be named as loss payee for the Agreed Value under the hull insurances required to be maintained by Lessee under the Lease;
(b) Servicer (as defined in Section 14 below), New Owner, Sub-Servicer, Macquarie Bank Limited and the Persons providing financing to New Owner and their agents and security trustees identified on Annex 4 hereto and each of their respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under the Lease;
(c) continue to name Assignor and each of its respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity as an additional insured under the third party liability insurances until the earlier to occur of the second anniversary of the Effective Time; and
 
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(d) each of the agreements described on Annex 4 hereto to be identified as “contracts” with respect to the insurances required under the Lease and this Section 7.
Section 8. Identification Plates . Lessee will as soon as is reasonably practical after the Effective Time, prepare at Assignee’s expense new identification plates for the Aircraft bearing the legends set forth in Annex 2 hereto, remove the existing identification plates and install the replacement identification plates on the Aircraft.
Section 9. Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing, from and after the Effective Time, Assignee hereby agrees that neither it nor any person lawfully claiming through it will interfere with or otherwise disturb Lessee’s quiet, peaceful use, possession and enjoyment of the Aircraft.
Section 10. Post Effective Time . Assignor, Assignee and Lessee hereby agree that with effect on and from the Effective Time, the Lease shall be amended as set forth in Annex 2 hereto. Except as set out in this Agreement, the Lease shall remain unmodified and in full force and effect.
Section 11. Cooperation .
(a) The parties hereby agree to cooperate with one another in order to close the Assignment at a convenient time when the Aircraft is in a jurisdiction reasonably acceptable to Assignee, Assignor and Lessee on one of Lessee’s regular routes. Provided that Assignor notifies Lessee in writing of the proposed date of the Assignment a minimum of three (3) Business Days prior to such date, Lessee will provide Assignor notice of the scheduled route of the Aircraft for such date.
(b) Lessee agrees to provide promptly, but in any event, prior to the Effective Time, the following in the English language and in form and substance reasonably satisfactory to Assignor and Assignee:
(i) unless covered by the documents provided at Delivery, to Assignor and Assignee, an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Lessee naming the person or persons authorized to execute this Agreement and the documents delivered in connection therewith;
(ii) to Assignor and Assignee, an insurance certificate and, if applicable, broker’s letter of undertaking confirming that the insurances required under the Lease and under Section 7 of this Agreement are in effect;
 
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(iii) to Assignee, an executed Assumption Agreement substantially in the form of Annex 12 hereto; and
(iv) to Assignor and Assignee written confirmation, signed by Lessee, specifying the location of the Aircraft at the Effective Time.
(c) Subject to the provisions hereof and Lessee’s rights hereunder and under the Lease, Lessee hereby agrees to perform and do all such other and further acts and things and execute and deliver any and all such other instruments (including any notification to the Aviation Authority of changes in the ownership structure of the Aircraft) as Assignee may reasonably require to reflect the change in the identity of the owner and lessor of the Aircraft as contemplated by this Agreement and to perfect or protect the interests of Assignee, New Owner, LESSOR’s Lender (as defined in the Lease) and any other interest holder, and for the purpose of carrying out the intent of and giving Assignee full benefit of the Assignment including, but not limited to consenting electronically, at Assignee’s expense to a registration by Assignee of the international interest created by this Agreement pursuant to the Cape Town Convention on the international registry established pursuant to the Cape Town Convention.
(d) Assignee shall pay or reimburse Lessee for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in preparing, reviewing, negotiating and executing documents required by Lessor and Assignee or performing any other obligations under Article 24 of the Lease. As between Assignor and Assignee, nothing in this clause (d) shall modify the agreement of Seller and Buyer under Section 8.1(b) of the Sale Agreement.
(e) Upon return to Lessee of either the deregistration power of attorney provided to Assignor, marked “cancelled”, or a facsimile copy of the same, Lessee shall deliver to Assignee a replacement deregistration power of attorney in the form previously provided to Assignor pursuant to the Lease; provided that in the event that a facsimile copy is provided, Assignor shall deliver to Lessee the original copy, marked “cancelled”, via international express courier within seven (7) Business Days after the Closing Date.
Section 12. Representations and Warranties .
(a) Lessee Representations. Lessee represents and warrants to Assignor and Assignee as of the Effective Time the following:
(i) Lessee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of its jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Lessee (x) have been duly authorized by all necessary corporate action of Lessee and (y) do not and will not violate the charter, certificate of incorporation, by laws or other organizational instruments, any applicable law, rule or regulation or any provision in any existing agreement binding on it;
 
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(iii) this Agreement constitutes a valid, binding and enforceable agreement of Lessee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Lessee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
(b) Assignor Representations. Assignor hereby represents and warrants to Lessee and Assignee as of the Effective Time the following:
(i) Assignor is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing and in good standing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignor (x) have been duly authorized by all necessary corporate action of Assignor and (y) do not and will not violate the articles of incorporation, by laws or other organizational instruments of Assignor, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignor;
(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignor except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignor in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
(c) Assignee Representations. Assignee represents and warrants to Lessee and Assignor as of the Effective Time the following:
(i) Assignee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignee (x) have been duly authorized by all necessary corporate action of Assignee and (y) do not and will not violate the articles of incorporation, by-laws or other organizational instruments of Assignee, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignee;
 
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(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights;
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect;
(v) the assignment and assumption contemplated hereby is in conformity with and subject to the provisions of Article 24 of the Lease and will not result in any increase in or to or the imposition of additional obligations or liabilities that are not de minimis;
(vi) Macquarie Aerospace Limited is the sole beneficiary of the MSN 3590 Trust; and
(vii) Assignee is an Irish tax resident.
(d) Assignee Covenant. Assignee covenants that so long as no Event of Default has occurred and is continuing, it will not permit New Owner to take or omit to take any action which would jeopardize the registration of the Aircraft on the FAA registry.
Section 13. Lease Acknowledgments, Representations and Warranties.
(a) Assignor, Assignee and Lessee hereby make the acknowledgments set forth on Annex 10.
(b) Each of Lessee and, unless otherwise stated, Assignor hereby makes the following representations and warranties as of the date hereof (unless otherwise noted):
(i) the Lease Documents are all described on Annex 1 hereto and such, together with this Agreement, constitute the entire agreement of Lessee and Assignor with respect to the leasing of the Aircraft;
(ii) the Lease is in full force and effect, and has not been modified or amended by any agreement between Assignor and Lessee which is currently in effect except to the extent set forth in the Lease Documents and, without waiver of or prejudice to Lessee’s rights under the Lease, Lessee has not exercised its option to extend the Lease Term;
(iii) the Aircraft was delivered on the Delivery Date in accordance with the terms of the Lease;
(iv) the Aircraft is not subject to a sublease;
(v) no Default in respect of the payment of Rent or any Event of Default has occurred and is continuing under the Lease;
 
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(vi) to Lessee’s knowledge and without waiver of or prejudice to any right, remedy or claim it may have, Lessee is not entitled as of the date hereof to any offset against Rent or any other amounts payable under the Lease Documents;
(vii) to Lessee’s knowledge, without waiver of or prejudice to any right, remedy or claim it may have, Lessee as of the date hereof has no claim against, and there are no actions by Lessee against, Assignor with respect to the Aircraft or the Lease Documents;
(viii) without waiver of or prejudice to any right, remedy or claim Lessee may have, Assignor has no unperformed Reserve payment obligations;
(ix) no unrepaired partial loss with a repair cost in excess of ***** or Total Loss has occurred in respect of the Aircraft or Engines;
(x) to Lessee’s knowledge, no notice of assignment of any Security Interest in the Lease has been received by the Lessee or, if the Lessee has received any such notice of assignment, it has subsequently received notice that such Security Interest has been terminated or will be terminated as of the Effective Time;
(xi) Lessee has not prepaid any Rent, the payment of which does not become due until after the Effective Time; and
(xii) Lessee is not subject to any voluntary bankruptcy, insolvency or reorganization proceeding.
Section 14. Assignee Servicer and Assignments . As of and with effect from the Effective Time, Macquarie Aircraft Leasing Services (Ireland) Limited will act as Assignee’s servicer for all matters related to the Lease and the Aircraft (in such capacity as servicer, the “ Servicer ”). Accordingly, with effect from the Effective Time and until Lessee receives notice from Assignee to the contrary, Lessee shall be entitled to and shall communicate with and deal with Servicer with respect to all matters relating to the Lease and the Aircraft to the exclusion of Assignor and Assignee and may rely on any communication, direction or determination made or purportedly made by Servicer. Subject to the provisions hereof and its rights under the Lease, upon written notice from Assignee, Lessee shall acknowledge and consent to any Security Interest Assignee grants in and to Assignee’s or New Owner’s rights to the Aircraft and under the Lease in the form of Annex 8 or such other form as may be reasonably acceptable to Lessee.
Section 15. Assignment . This Agreement will be binding upon and inure to the benefit of each party hereto and its respective successors and assigns as permitted under the Lease.
Section 16. Notices . Any notices hereunder will be in writing and will be delivered as and in the manner specified in the Assigned Lease Documents. The address of Assignee for notices under the Assigned Lease Documents is, until further notice, as set forth on Annex 2 hereto.
 
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Section 17. Modifications . This Agreement may not be amended or modified except by a written agreement signed by Assignor, Assignee and Lessee; provided that Assignee and Lessee shall be entitled to amend, modify or vary the terms of the Assigned Lease Documents after the Effective Time without reference to or the signature of Assignor.
Section 18. Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Agreement or of any other documents in connection with this Agreement by fax or email will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Agreement or other document by fax or email will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Agreement or such other document will not affect the validity or effectiveness of this Agreement or such other document.
Section 19. Governing Law, Etc . The provisions of the Lease, as amended by this Agreement, with respect to governing law, jurisdiction, service of process, waiver of trial by jury, venue and inconvenient forum are incorporated in this Agreement by reference as if such provisions were set forth herein.
Section 20. Further Assurances . Each party hereto agrees that it shall, at any time and from time to time, promptly and duly execute and deliver any and all such further instruments and documents and take such further action as may be reasonably required in order to obtain the full benefits of this Agreement and to implement the rights and powers herein granted.
Section 21. Headings . All section and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Agreement. Any reference to a specific section or paragraph will be interpreted as a reference to such section or paragraph of this Agreement.
Section 22. Invalidity of any Provision . If any of the provisions of this Agreement become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
Section 23. Survival . Notwithstanding anything contained herein to the contrary, all agreements, indemnities, representations and warranties contained in this Agreement shall survive the Effective Time.
 
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IN WITNESS WHEREOF , the parties hereto or their duly authorized representatives have executed this Agreement as of the day and year first herein written.

INTERNATIONAL LEASE FINANCE CORPORATION,
as Assignor	  	MACQUARIE AEROSPACE IRELAND LIMITED
as Assignee	
			
By: /s/ Frederick S. Cromer	  	By: 	  	/s/ Aidan Culchrist	
Name: Frederick S. Cromer	  	Name:	  	Aidan Culchrist	
Title: Chief Financial Officer	  	Title:	  	Director	
			
	  	By:	  	/s/ James S. Simpson	
	  	Name:
Title:	  	James S. Simpson
Director	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee	
		
By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Alfonso Ascencio Triujeque	
Title:	 	General Counsel	
		
By:	 	/s/ Fernando Suárez Gerard	
Name:	 	Fernando Suárez Gerard	
Title:	 	Director of Finance, CFO	

RECEIPT OF CHATTEL PAPER ORIGINAL
Receipt of the foregoing original counterpart of the Assignment, Assumption and Amendment Agreement dated August 23, 2010 by and among International Lease Finance Corporation as Assignor, Macquarie Aerospace Ireland Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee in respect of that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3590, constituting the “Chattel Paper Original”, is hereby acknowledged.

MACQUARIE AEROSPACE IRELAND LIMITED	
		
By:	 	/s/ Aidan Culchrist	
Name:	 	Aidan Culchrist	
Title:	 	Director	
		
By:	 	/s/ James S. Simpson	
Name:	 	James S. Simpson	
Title:	 	Director	

ANNEX 1
LEASE DOCUMENTS
 
1.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“Volaris”), as lessee and International Lease Finance Corporation (“ILFC”), as lessor.	
 
2.	Estoppel and Acceptance Certificate dated July 22, 2008 by Volaris.	
 
3.	Side Letter #1 to Aircraft Lease Agreement dated as of June 14, 2009 by and between ILFC and Volaris.	
 
4.	Assignment of Rights (Airframe) dated July 22, 2008 between ILFC and Volaris.	
 
5.	Airbus Consent dated July 22, 2008 by Airbus S.A.S. and acknowledged by ILFC and Volaris.	
 
6.	Assignment Agreement (Engines) dated July 22, 2008 among ILFC, Volaris and IAE International Aero Engines AG.	
 
Annex 1-1

ANNEX 2
AMENDMENTS TO LEASE DOCUMENTS
1. Reference . This Annex 2 to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010, by and among International Lease Finance Corporation , as Assignor, Macquarie Aerospace Ireland Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) sets forth the amendments to the Aircraft Lease Agreement dated as of March 9, 2007 (as amended and supplemented prior to the date of the Assignment Agreement, between Lessee and Assignor the “ Lease ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
2. Amendments by Operation of Law Not Excluded . The amendments set forth in this Annex 2 hereto are intended to be the only amendments to the Lease to be effected upon the Effective Time except for such amendments to the language and operation of the Lease as are otherwise necessitated and effected by the execution of the Assignment Agreement or upon the effectiveness of the Assignment.
3. Amendments to Certain Definitions.
(a) The definition of “LESSOR” in the preamble of the Lease is deleted in its entirety and replaced with the following:
“MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland, whose principal place of business is Level 1, South Bank House, Barrow Street, Dublin 4, Ireland (“ LESSOR ”).”
(b) The following definitions in Article 2.1 of the Lease are amended:
 
 	(i)	The definition of “APU” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(ii)	The definition of “Aviation Documents” is amended such that the word “LESSOR’s” in part (g) of the definition is deleted and replaced with “OWNER’s”.	
 
 	(iii)	The definition of “Engine” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(iv)	The definition of “LESSOR’s Lien” is amended such that the words “, OWNER, Owner Participant, Lessor’s Lender and/or Servicer” are inserted after the word “LESSOR”.	
 
 	(v)	The definition of “Operative Documents” is amended such that it also includes “Assignment Agreement” among the list of documents.	
 
Annex 2-1

 	(vi)	The definition of “Part” is amended such that the word “LESSOR” is deleted each time it appears and is replaced with “OWNER” and such that the words “which is owned by OWNER and (if LESSOR is not the OWNER) leased to LESSOR and leased by LESSOR to LESSEE hereunder” are inserted immediately following the words “or other item of equipment”.	
(c) The definition of LESSOR’s Lender in Article 24.3 is amended such that the word “OWNER” is inserted in lieu of the word “LESSOR” in the first line. Article 24.3 is further amended such that the word “OWNER’s” is inserted in lieu of the word “LESSOR’s” in the third line.
4. New Definitions . The following definitions shall be added to Article 2.1 of the Lease in the proper alphabetical order:
(a) ““ Assignment Agreement ” means the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Lessee as Lessee.”
(b) ““ Assumption Agreement ” means the Assumption Agreement dated [        ] [            ] 2010 among LESSOR, MBL and LESSEE.”
(c) ““ MBL ” means Macquarie Bank Limited.”
(d) ““ Mortgagee ” any entity or entities to which OWNER grants a security interest in the Aircraft ad such entity’s or entities’ successors and assigns provided that LESSOR or OWNER has given notice of any such assignment.”
(e) ““ OWNER ” means Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust, a national banking association, with its address at 299 South Main Street, MAC: U1228-120, Salt Lake City, Utah 84111, United States of America, the owner of the Aircraft.”
(f) ““ Owner Participant ” means Macquarie Aerospace Limited.”
(g) ““ Servicer ” means Macquarie Aircraft Leasing Services (Ireland) Limited or such other person as may be notified to LESSEE by the LESSOR.”
(h) ““ Sub-Servicer ” means any of Macquarie Aircraft Leasing Services (US), Inc., Macquarie Aircraft Leasing Services (UK) Ltd. and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd., and each of their respective successors, transferees and assigns.”
(i) ““ Tax Indemnitee ” means each of LESSOR, OWNER, Owner Participant, Servicer, any Mortgagee, any LESSOR’s Lender and each person with whom any of the foregoing files a consolidated tax return.
 
Annex 2-2

5. LESSOR’s Bank Account . Articles 1.12 (LESSOR’s Bank Account) and 5.6 (LESSOR’s Bank Account) of the Lease are amended by replacing details of the Lessor’s bank account with the following:
*****
*****
*****
*****
*****
Ref.: MSN 3590
6. Maintenance of Aircraft
(a) In Article 12.4.2, the first, second, fourth and fifth references to “LESSOR” are each replaced with a reference to “OWNER”.
(b) In Articles 12.5 (Removal of Engines) and 12.6 (Removal of APU), each reference to “LESSOR” is replaced with a reference to “OWNER”.
(c) In Articles 12.8.1 and 12.8.2, each reference to “LESSOR” is replaced with a reference to “OWNER”.
(d) In Article 12.8.3, the words “LESSOR’s title” are replaced with the words “OWNER’s title” and the words “neither LESSOR nor its” are replaced with the words “none of LESSOR, OWNER or their”.
(e) In Article 12.9.5, the references to “LESSOR” on the third and penultimate lines are each replaced with a reference to “OWNER”.
7. Title and Registration
(a) In Article 14.1, the first reference to “LESSOR” is replaced with a reference to “OWNER”.
(b) In Article 14.2, the reference to “LESSOR” in the second line is replaced with a reference to “OWNER”, and the words “protect and perfect LESSOR’s interest” are replaced with the words “protect and perfect OWNER’s, LESSOR’s and Owner Participant’s respective interest”.
8. Nameplates .
(a) Article 15.1 of the Lease shall be amended by replacing the description of the legend on the Airframe identification plates with the following:
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 2-3

“THIS AIRCRAFT IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST
MANUFACTURER’S SERIAL NO: 3590”
(b) Article 15.2 of the Lease shall be amended by replacing the description of the legend on the Engine identification plates with the following:
“THIS ENGINE [INSERT MSN] IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST”
9. Tax Indemnity.
(a) Article 16.1 (General Obligation of LESSEE) of the Lease is amended by adding the words “or the City of Dublin” immediately after the words “the City or County of Los Angeles” and by replacing each reference to “LESSOR” with a reference to “each Tax Indemnitee”.
(b) Article 16.2(a) of the Lease is amended by adding after the words “the City or County of Los Angeles” the words “the City of Dublin or the Republic of Ireland or any political subdivision thereof”.
(c) Articles 16.2(a), 16.2(e), 16.2(g), 16.2(h), 16.2(i), 16.2(j), 16.3, 16.4, 16.5, 16.6, and 16.7 are amended by replacing each reference to “LESSOR” with a reference to “any Tax indemnitee”.
(d) Articles 16.2(d) is amended such that the first, second, fourth, and fifth references to “LESSOR” are each replaced with a reference to “any Tax indemnitee”.
(e) Articles 16.2(c), 16.2(h), and 16.5 are amended by replacing each reference to “LESSOR’s” with a reference to “each Tax Indemnitee’s”.
10. General Indemnity . Article 17.1 of the Lease is amended by replacing the words “LESSOR and its” with the words “LESSOR, OWNER, MBL, Servicer and their respective”.
11. Insurance . Article 18.4 is amended by replacing “LESSOR” with “OWNER” in the second line.
12. Loss, Damage and Requisition
(a) Article 19.4 (Surviving Engine(s)) is amended by replacing the words “LESSOR will transfer all its” with “LESSOR shall procure the transfer of all” and by deleting the words “on the part of LESSOR”.
(b) Articles 19.5.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
 
Annex 2-4

(c) Article 19.5.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
(d) Articles 19.6.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
(e) Article 19.6.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
13. Return of Aircraft . Article 23.9.13 is amended by replacing the first occurrence of “LESSOR’s” with “OWNER’s”.
14. Assignment .
(a) Article 24.2.1 is amended by replacing the words “LESSOR may” with “LESSOR or OWNER may, in each case subject to the terms, conditions and limitations set forth in this Article 24”.
(b) Article 24.2 is amended by adding the following provision as Article 24.2.3: “Any assignment, conveyance, transfer or other disposition by Owner and/or Owner Participant of all or any of their respective right, title and interest in, to or under the Lease and/or other Operative Documents and/or the Aircraft shall be subject to the terms, conditions and restrictions of this Article 24 to the same extent and with the same effect as if the same were an assignment, conveyance, transfer or other disposition of any or all of Lessor’s right, title or interest herein or in any other Operative Document or in respect of the Aircraft.”
(c) Article 24.4 (LESSEE Cooperation) is amended by adding to the end of the second sentence thereof the words “and executing and delivering a Lessee Acknowledgement substantially in the form of Annex 8 to the Assignment Agreement”.
15. Defaults of Lessee .
(a) Article 25.3(e) is amended by replacing “LESSOR” with “LESSOR and OWNER”.
(b) Article 25.6(c) is amended by replacing the words “LESSOR elects” with the words “LESSOR and OWNER elect” and by replacing reference to “LESSOR” in the fifth line with the words “LESSOR and OWNER”.
(c) Article 25.6(f) is amended by replacing “LESSOR’s” with the words “LESSOR’s or OWNER’s”.
16. Notices . Article 26.2 of the Lease shall be amended by replacing the address information relating to the Lessor set forth therein with the following:
MACQUARIE AEROSPACE IRELAND LIMITED
Level 1, South Bank House
Barrow Street
Dublin 4
 
Annex 2-5

Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
E-mail: notices@macquarie.aero
with a copy to:
Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
Macquarie Aircraft Leasing Services (US), Inc.
Suite 200
Two Embarcadero Center
San Francisco, CA 94111
Attn: Contracts Management Group
Fax: +1 415 829 6899
Macquarie Bank Limited
Corporate and Asset Finance Group
1 Martin Place
Sydney, NSW 2000
Australia
Attn: Peter Stokes
Fax: +61 2 8232 6013
17. Arbitration . Article 27 is deleted in its entirety and all references thereto in the Lease shall have no further effect.
18. Governing Law and Jurisdiction .
(a) Article 28.1 (California Law) is deleted in its entirety and replaced with the following:
“ New York Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.”
 
Annex 2-6

(b) Article 28.2 (Non-Exclusive Jurisdiction in California) is deleted in its entirety and replaced with the following:
“ Non-exclusive Jurisdiction in New York . The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York, and each party agrees to comply with all requirements necessary to effect the intent of this Article 28.2. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, to such party at is respective address applicable pursuant to Article 26 (Notices). The provisions of this subsection (i) shall not limit the rights of any party to serve process in any other manner permitted by law or to obtain execution of judgment in any jurisdiction.”
(c) Article 28.3 (Protection of Interest in the Aircraft) is amended by deleting the words “NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27”.
(d) Article 28.4 is amended by replacing part (c) with “(c) the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York.”
(e) Article 28.6 is amended by deleting the phrase “in accordance with Section 415.40 of the California Code of Civil Procedure”.
(f) Article 28.8 is amended by replacing the words “California (notwithstanding the conflict Laws of the State of California)” with the words “New York” and by replacing the words “Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles” with the words “New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York”.
 
Annex 2-7

ANNEX 3
FORM OF CONFIRMATION OF EFFECTIVE TIME
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
            , 2010
Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.
Re: Confirmation of Effective Time
Ladies & Gentlemen:
Reference is hereby made to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) pertaining to one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and registration mark N504VL. Any and all initially capitalized terms used herein shall have the meanings ascribed thereto in the Assignment Agreement, unless specifically defined herein.
In accordance with Section 2 of the Assignment Agreement, the undersigned hereby confirm to Lessee that the sale of the Aircraft to New Owner and the Assignment occurred today, [            ] [        ], 2010 (Time:             [Pacific time]) (the “ Effective Time ”).
Each of Existing Lessor and, by its acknowledgement below, Lessee hereby confirms that, as of the Effective Time, the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease are as follows:

Type of Reserves	  	Rate of Reserves	  	Reserve Balances	
Airframe Reserves (6 Year Check):	  	***** calendar month	  	US$[______]	
Airframe Reserves (12 Year Check):	  	***** per calendar month	  	US$[______]	
Engine Performance Restoration Reserves for MSN V13000:	  	***** per Engine flight hour	  	US$[______]	
Engine Performance Restoration Reserves for MSN V13002:	  	***** per Engine flight hour	  	US$[______]	
Engine LLP Reserves for MSN V13000:	  	***** per Engine cycle	  	US$[______]	
Engine LLP Reserves for MSN V13002:	  	***** per Engine cycle	  	US$[______]	
Landing Gear Reserves:	  	***** per calendar month	  	US$[______]	
APU Reserves:	  	***** per APU hour	  	US$[______]	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 3-1

			
Sincerely,	
	
INTERNATIONAL LEASE FINANCE CORPORATION	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
MACQUARIE AEROSPACE IRELAND LIMITED	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
Lessee hereby acknowledges receipt of the above Confirmation and (i) confirms the satisfaction or waiver of each of the conditions set forth in Annex 5 to the Assignment Agreement, (ii) confirms the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease as specified above, and (iii) agrees to the effectiveness of the Assignment and the amendments to the Lease set forth in the Assignment Agreement, including Annex 2 thereto (each in accordance with the terms hereof and subject to the provisions of Article 24 of the Lease).

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 		
Name:	 		
Title:	 		
 
Annex 3-2

ANNEX 4
INSURANCE INFORMATION
 
I.	CONTRACT PARTIES	
 
A.	New Owner and Headlessor:	
Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ Owner Trustee ”)
299 South Main Street
MAC: U1228-120
Salt Lake City, Utah 84111
United States of America
Fax: +1 801-246-5053
 
B.	Assignee and Lessor	
Macquarie Aerospace Ireland Limited (“ MAL Ireland ”)
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
C.	Owner Participant:	
Macquarie Aerospace Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
Annex 4-1

D.	Macquarie Aircraft Leasing Services (Ireland) Limited (“ Servicer ”)	
 
E.	Macquarie Aircraft Leasing Services (US), Inc. (MALSUS), Macquarie Aircraft Leasing Services (UK) Ltd. (MALSUK) and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd. (MALSSING), as Servicer Delegates	
 
F.	Macquarie Bank Limited	
 
G.	Prior Lessor and Assignor	
International Lease Finance Corporation (“ ILFC ”)
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067
U.S.A.
Attention: Legal Department
Fax: 310 788 1990
Telephone: 310 788 1999
and, in respect of Legal Liability Insurances, Wells Fargo Bank Northwest, National Association (in its individual capacity), Macquarie AirFinance Ltd, and the above Contract Parties, and each of their respective successors and permitted assigns and transferees and each of their respective subsidiaries, shareholders, affiliates, directors, officers, agents, employees and servants, and, in the case of any trustee or security trustee, the institution in its individual capacity acting as such
 
II.	CONTRACTS :	
 
A.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”) and MAL Ireland as assignee of ILFC pursuant to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, MAL Ireland and Volaris, as supplemented and amended from time to time.	
 
B.	Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, as Assignor, MAL Ireland, as assignee and Volaris, as lessee.	
 
C.	Aircraft Sale Agreement dated as of April 13, 2010 between International Lease Finance Corporation and Macquarie Aerospace Limited	
 
D.	Head Lease Agreement dated as of [            ] [        ], 2010 between Owner Trustee and MAL Ireland.	
 
E.	Trust Agreement dated as of [            ] between the Owner Trustee and Owner Participant.	
 
Annex 4-2

F.	Assumption Agreement dated [            ] among Lessee, Lessor and Macquarie Bank Limited.	
 
G.	Servicing Agreement dated as of April 29, 2010 among Owner Participant, the Servicer and certain other entities as more particularly described therein.	
 
H.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUS.	
 
I.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUK.	
 
J.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSSING.	
 
Annex 4-3

ANNEX 5
LESSEE CONDITIONS PRECEDENT
On or before the Effective Time, the following conditions shall have been satisfied or waived by Lessee:
 
 	a.	Lessee shall have received the following, all of which shall be in the English language and be reasonably satisfactory in form and substance to Lessee:	
 
 	i.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignor naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith;	
 
 	ii.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignee naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith; and	
 
 	iii.	with respect to Assignee, a certificate of tax residency in Ireland.	
 
 	b.	Lessee shall have received from Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee, a Notice of Removal and Discharge substantially in the form of Annex 6 hereto.	
 
 	c.	Lessee shall have received from Macquarie Aerospace Limited a guarantee substantially in the form of Annex 11 hereto.	
 
 	d.	The deregistration power of attorney originally issued by Lessee shall have been marked “cancelled” and returned to Lessee. For purposes of closing the transaction contemplated hereby, a copy of the cancelled original deregistration power of attorney sent to Lessee via facsimile on the Closing Date shall suffice, provided the original, marked “cancelled”, is delivered to Lessee via international express courier within seven (7) Business Days after the Closing Date.	
 
 	e.	Lessee shall have received an executed Letter of Quiet Enjoyment from New Owner substantially in the form attached hereto as Annex 9.	
 
 	f.	Lessee shall have received from Lessor and Macquarie Bank Limited an Assumption Agreement substantially in the form of Annex 12 hereto.	
 
Annex 5-1

ANNEX 6
NOTICE OF REMOVAL AND DISCHARGE
From: Wells Fargo Bank Northwest, National Association, as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee (collectively, the “ Security Trustees ”)
To: Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (the “ Lessee ”)
Date: [            ] [        ], 2010
 
Re:	Aircraft Lease Agreement dated as of March 9, 2007, currently between International Lease Finance Corporation (the “ Lessor ”) and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as the same may be amended, supplemented or otherwise modified, the “ Lease ”) relating to an Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”).	
The purpose of this letter is to notify you that (i) the Aircraft has been removed as of             from International Lease Finance Corporation’s facility provided by an AIG affiliate with funding provided to the AIG affiliate by the Federal Reserve Bank of New York, (ii) all encumbrances and liens in favor of the Security Trustees are hereby released and discharged and (iii) any and all payments due under the Lease shall cease to be paid to the following account:
[INSERT ACCOUNT DETAILS FROM PRIOR NOTICE]
Very truly yours,
WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual capacity but solely
as First Lien Security Trustee, Second Lien Security Trustee,
Third Lien Security Trustee and Fourth Lien Security Trustee

By:	 	 	
Name:	 	 	
Title:	 	 	
Confirmed and Acknowledged
International Lease Finance Corporation

By:	 	 	
Name:	 	 	
Title:	 	 	
 
Annex 6-1

ANNEX 7
FEDERAL AVIATION ADMINISTRATION CONVEYANCE AND ENGINE THRUST
INFORMATION
 
 	•	 	Aircraft Lease Agreement dated as of March 9, 2007 between International Lease Finance Corporation, as lessor and Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“Volaris”), as lessee, with Estoppel and Acceptance Certificate dated July 22, 2008 by Volaris attached thereto, with respect to the Airframe and the Engines (collectively, the “Lease”), which Lease was filed with the FAA as one instrument on July 22, 2008, and assigned conveyance number SB001783.	
 
Annex 7-1

ANNEX 8
FORM OF LESSEE ACKNOWLEDGEMENT
 
From:	MACQUARIE AEROSPACE IRELAND LIMITED (the “ Lessor ”)	
    	[NAME OF SECURITY TRUSTEE] (the “ Security Trustee ”)	
 
To:	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (the “ Lessee ”)	
[            ] [        ], 2010
Dear Sirs:
We refer to the lease agreement dated March 9, 2007 currently between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A319-100 with manufacturer’s serial number 3590 (together with the engines described in the Lease Agreement, the “ Aircraft ”) together with all related agreements (including, without limitation, any supplements or amendments) entered into in connection with, or relating to, the lease of the Aircraft and any letter of credit related thereto (together with the Lease Agreement, the “ Lease Documents ”);
All terms defined in the Lease Agreement (including terms expressly defined therein or by reference to another document or otherwise), unless the context otherwise requires, have the same meanings in this Lessee Acknowledgement (this “ Acknowledgment ”).
We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:
1. By the Security Agreement made [DATE OF SECURITY AGREEMENT] (the “ Security Agreement ”) between, inter alios, the Lessor (as assignor) and the Security Trustee, the Lessor has assigned and encumbered to the Security Trustee, as security, all of its right, title and interest in and to all of its rights, title and interests, present and future, actual or contingent, in and to, inter alia the Lease Documents (other than in relation to the Excluded Property (as defined below)) and all other rights and benefits whatsoever accruing to it under the Lease Documents (collectively, the “ Lease Assignment Documents ”). By execution of the acknowledgement to this Acknowledgment you hereby consent, effective as of the date hereof, to the security assignment in favor of the Security Trustee described in the preceding sentence. In this Acknowledgment, “ Excluded Property ” means all right, title and interest, present or future (actual or contingent) of the Lessor in and to the operational indemnities contained in the Lease Documents, to the extent such indemnities are given expressly for the benefit of the Lessor or any of its directors, officers, employees, servants or agents only.
2. Until the Security Trustee serves a Relevant Notice (as defined below) on you, you shall continue to (a) deal directly with the Lessor in respect of the Lease Documents and the other Lease Assignment Documents to which you are party and (b) make payments as provided in the Lease Agreement.
 
Annex 8-1

3. If the Security Trustee delivers to you a written notice that it has exercised its rights under the Security Agreement (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Documents and the other Lease Assignment Documents to which you are party for the benefit of the Security Trustee as if the Security Trustee were named in place of the Lessor as a party to the Lease Assignment Documents. After the Security Trustee delivers any Relevant Notice, you shall not recognize the exercise by the Lessor of any of its rights and powers under the Lease Assignment Documents unless and until requested to do so by the Security Trustee.
4. Save as expressly provided herein, we hereby confirm that none of your rights and obligations under the Lease Documents will be affected (including, without limitation, any obligations in respect of the payment of Rent, Reserves, Taxes or other amounts due and payable under the Lease) as a result of (a) the giving of this Acknowledgment or any Relevant Notice; or (b) the execution of the Lease Assignment.
5. This Acknowledgment is governed by New York law.
This Acknowledgment and the authorizations and instructions contained in this Acknowledgment are irrevocable unless and until you receive written notice to the contrary from the Security Trustee. This Acknowledgment and the instructions contained herein cannot be amended or modified without the written consent of the Security Trustee and the Lessor. The Security Trustee shall, in exercising any right, privilege or remedy under or in respect of the Lease be bound by and exercise the same in accordance with the terms of the Lease and, to the extent it receives any sums, whether of Rent, proceeds of Insurances, Reserves or otherwise, shall hold, invest, apply, retain and reimburse such sums as provided in the Lease but otherwise shall have no liability for the performance of, any other of the Lessor’s obligations under the Lease Assignment Documents unless expressly agreed to in writing by the Security Trustee.
By its signature below, Lessee expressly acknowledges receipt of the Acknowledgment and expressly and irrevocably agrees to the provisions contained in this Acknowledgment, including paragraph 3 hereof.
[Signature Page Follows]
 
Annex 8-2

	
Yours faithfully,	

FOR AND ON BEHALF OF
MACQUARIE AEROSPACE IRELAND LIMITED
(as Lessor)	

 	
For and on behalf of
[NAME OF SECURITY TRUSTEE]
(as Security Trustee)	

ACKNOWLEDGED AND AGREED
this             day of             , 20        
 
CONCESIONARIA VUELA COMPANIA
DE AVIACION, S.A .P.I . DE C.V. (as Lessee)
 
By:
Name:
Title:
 
By:
Name:
Title:	
 
Annex 8-3

ANNEX 9
FORM OF LETTER OF QUIET ENJOYMENT
[            ] [        ], 2010
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)
Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01210 México, D.F.
México
Ladies and Gentlemen:
We confirm that we have received a copy and are aware of the terms of Aircraft Lease Agreement, dated March 9, 2007, as amended from time to time (the “ Lease ”), between Macquarie Aerospace Ireland Limited (“ Lessor ”) and yourselves (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) concerning that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”). Words and expressions defined in the Lease shall have the same respective meanings when used in this letter.
By a Security Agreement dated as of [DATE OF SECURITY AGREEMENT] and acceded to by the Lessor on [            ] (the “ Security Agreement ”) among, amongst others, Lessor and [NAME OF SECURITY TRUSTEE], as Security Trustee (“ Security Trustee ”), Lessor has assigned to the Security Trustee, as security, all of its rights, title and interest in, to and under the Lease and the other Collateral (as defined in the Security Agreement), including certain insurance proceeds.
We hereby confirm that so long as no Default or Event of Default shall have occurred and be continuing, we will not, through our own actions or through the actions of others lawfully claiming through or under us, interfere with your quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of the Lease.
[Signature Page Follows]
 
Annex 9-1

	
Very truly yours,	

[NAME OF SECURITY TRUSTEE]	
(as Security Trustee)	
 
Annex 9-2

ANNEX 10
ASSIGNOR, ASSIGNEE AND LESSEE REPRESENTATIONS AND WARRANTIES
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
(d) Assignor, Assignee and Lessee hereby agree and acknowledge that immediately prior to the Effective Time, Assignor holds a cash Security Deposit in the amount of ***** pursuant to the terms and conditions of the Lease and that from and after the Effective Time, Assignee is deemed to have received and shall hold (subject to and in accordance with the provisions of the Lease) such Security Deposit;
(e) Assignor, Assignee and Lessee Acknowledgment. Assignor, Assignee and Lessee hereby agree and acknowledge as of the Effective Time that Rent under the Lease is ***** per month; and
(f) The Reserve Rates and balance of the reserve accounts as of             , 2010 are as set forth in Annex 3 hereof and as of the Effective Time such amounts shall be deemed to have been received by and shall be held by Assignee subject to and in accordance with the relevant provisions of the Lease.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 10-1

ANNEX 11
FORM OF GUARANTEE
THIS GUARANTEE AND UNDERTAKING (this “ Guarantee ”) is made on this [            ] day of [            ] 2010, between:
(1) MACQUARIE AEROSPACE LIMITED , a company incorporated under the laws of Bermuda (“ MAL ”); and
(2) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V., a company incorporated under the laws of Mexico (“ Lessee ”).
NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Clause 1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for all purposes of this Guarantee and shall be equally applicable both to the singular and plural forms of the terms defined. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Lease (as defined below).
“ Assumption Agreement ” means the assumption agreement dated [            ], among MBL, Lessor and Lessee.
“ Lease ” means the Aircraft Lease Agreement, dated as of March 9, 2007 between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), pursuant to which Lessor has leased to Lessee one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG V2524-A5 engines bearing manufacturer’s serial numbers V13000 and V13002.
“ Lessor ” means Macquarie Aerospace Ireland Limited, a company incorporated under the laws of Ireland.
“ New Owner ” means Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee of MSN 3590 Trust.
“ MBL ” means Macquarie Bank Limited, a company with limited liability with Australian Business Number 46 008 583 543 incorporated under the laws of Australia.
Clause 2. Representations and Warranties of MAL . MAL represents and warrants that:
2.1 this Guarantee constitutes a valid and binding agreement of MAL. MAL is duly incorporated, validly existing and in good standing under the laws of Bermuda. The transactions contemplated hereby and the execution, delivery and performance of this Guarantee by MAL (i) have been duly authorized by all necessary corporate action of MAL and (ii) are within MAL’s power and authority and do not and will not violate the constitutional documents of MAL, any applicable law, rule, regulation, judgment or court order or any provision in any existing agreement binding on MAL;
 
Annex 11-1

2.2 all authorizations, consents, registrations and notifications required to be obtained by MAL in connection with the entry into, performance, validity and enforceability of this Guarantee and the transactions contemplated by this Guarantee, have been (or will on or before the date hereof have been) obtained or effected (as appropriate) and are (or will be on their being obtained or effected) in full force and effect; and
2.3 on or prior to the date of this Guarantee, MAL has not and does not anticipate the need to (i) commence a voluntary case or other proceeding, or become subject to an involuntary case or other proceeding, seeking liquidation, reorganization, adjudication as bankrupt, winding-up, or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property; (ii) consent to any relief or to the appointment of or taking possession by any such official in any voluntary case or other proceeding commenced against it; (iii) sell, assign, transfer all or a material part of its assets; (iv) admit in writing its inability to pay its debts generally as they come due; (v) make a general assignment for the benefit of creditors; (v) cease to operate its business as a going concern; or (vi) commence any corporate action to authorize any of the foregoing.
Clause 3. Guarantee .
3.1 MAL, with effect from the date hereof, hereby unconditionally and irrevocably guarantees to Lessee the prompt payment and performance of Lessor’s obligations to Lessee under the Lease, and compliance by Lessor with, all obligations, covenants, terms, conditions and undertakings of Lessor contained in the Lease and the Operative Documents to which Lessor is a party in accordance with the terms thereof; provided, however, that such guarantee specifically excludes any and all obligations expressly assumed by MBL pursuant to the Assumption Agreement (such obligations of Lessor being referred to as the “ Guaranteed Obligations ”); and
3.2 MAL undertakes to Lessee that, if Lessor does not perform any of the Guaranteed Obligations when required to do so, it shall within two (2) Business Days of written demand from Lessee procure the performance by Lessor or perform itself the relevant Guaranteed Obligation.
3.3 MAL as a principal obligor and as a separate and independent stipulation shall indemnify Lessee upon written demand against any loss, liability or cost or expense suffered by Lessee (including reasonable attorneys’ fees and disbursements reasonably incurred by Lessee in the enforcement of this Guarantee) if (i) it does not perform the Guaranteed Obligations; and (ii) if any obligation guaranteed by it becomes unenforceable, void or illegal.
3.4 The guarantee set out in this Clause 3 shall be automatically terminated, without the requirement for any further action by any party, with effect from the occurrence of any transfer by Lessor of its rights and obligations under the Lease in conformity with Article 24 of the Lease, and MAL shall have no further liability or obligation hereunder with effect from such transfer save in respect of any liabilities or obligations arising prior to such transfer and any liabilities and obligations arising in connection with any rights retained by MAL, and save as expressly set out herein.
 
Annex 11-2

3.5 MAL shall not permit Lessor or New Owner to act or refrain from acting in any manner contrary to the provisions of the Lease.
Clause 4. Release . Once all the Guaranteed Obligations have been satisfied in full and MAL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MAL from this Guarantee.
Clause 5. Miscellaneous .
5.1 Governing Law . THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO ANY CONFLICT OF LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
5.2 Successors and Assigns . The terms of this Guarantee shall be binding on, and inure to the benefit of, Lessee and MAL and their respective permitted successors and assigns.
5.3 Waiver of Notice and Defense . Except as provided in Clause 3.2, MAL hereby waives diligence, promptness, presentment, demand for payment or performance and protest and notice of protest, notice of acceptance and any other notice in respect of the Guaranteed Obligations or any part of them, and any defense arising by reason of any disability or other defense.
5.4 Jurisdiction . The parties agree that the courts of the United States District Court for the Southern District of New York, or any court sitting in the county of New York, New York, are to have non-exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) which may arise in connection with the legal relationships established by this Guarantee or otherwise arising in connection with this Guarantee. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction. MAL further consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient or inappropriate court and agrees not to plead or claim the same.
5.5 Severability . Should any one or more of the provisions of this Guarantee be held to be invalid, illegal or unenforceable in any jurisdiction, the same shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity, illegality or unenforceability of a particular provision in a particular jurisdiction shall not render such provision invalid, illegal or unenforceable in any other jurisdiction.
5.6 Waivers, Amendments and Variations in Writing . The provisions of this Guarantee shall not be capable of being waived, amended or varied otherwise than by an express waiver or amendment in writing; and in particular any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver, amendment or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessee’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension of any variation or amendment of any such right.
 
Annex 11-3

5.7 Notices . All notices and other communications under, or in connection with, this Guarantee will, unless otherwise stated, be given and will become effective in the same manner as provided in Article 26 of the Lease.
The notice details of MAL are as follows:

Address:	  	c/o Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland	
Fax:	  	+353 1 238 3299	
Attention:	  	Contracts Management Group	
		
With a copy to:	  		
		
Address:	  	Macquarie Aircraft Leasing Services (US) Inc.
Two Embarcadero Center, Suite 200
San Francisco, CA 94111
U.S.A.	
Fax:	  	+ 1 415 829 6899	
Attention:	  	Contracts Management Group	
*     *     *
 
Annex 11-4

IN WITNESS WHEREOF , the parties hereto have executed and delivered this Guarantee on the date shown at the beginning of this Guarantee.

CONCESIONARIA VUELA COMPAÑÍA
DE AVIACIÓN, S.A.P.I. DE C.V.	  	MACQUARIE AEROSPACE LIMITED	
		
By:	  	By:	
Name:	  	Name:	
Title:	  	Title:	
		
By:	  		
Name:	  		
Title:	  		
 
Annex 11-5

ANNEX 12
FORM OF ASSUMPTION AGREEMENT
Assumption Agreement
 
Date	[Insert Date] 	
Parties
 
 	1.	Macquarie Aerospace Ireland Limited , a company duly organized and validly existing under the laws of Ireland having its registered office at Level 1, South Bank House, Barrow Street, Dublin 4, Ireland ( Lessor );	
 
 	2.	Macquarie Bank Limited ***** of No. 1 Martin Place, Sydney, NSW 2000 ( MBL ); and	
 
 	3.	Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. , a company duly organized and validly existing under the laws of Mexico having its office at Prolongación Paseo de la Reforma #490, Piso 1 (Edificio GE), Col. Santa Fe Peña Blanca, Del. Álvaro Obregón, México, D.F., México 01210 ( Lessee )	
It is agreed as follows.
 
1.	Interpretation	
 
1.1	Definitions	
The following definitions apply unless the context requires otherwise.
Aircraft means the A319-100 Aircraft bearing manufacturer’s serial number 3590 and United States registration mark N504VL.
Assumed Obligations means Lessor’s payment obligation under Articles 5.1.3 and 13 of the Lease, in each case which are existing on the date of this Assumption Agreement or which are incurred or become due at any time pursuant to and in accordance with the terms and conditions of the Lease.
Lease means the Aircraft Lease Agreement, dated as of March 9, 2007, as amended from time to time between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.).
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Operative Document has the meaning given to it in the Lease.
 
1.2	Interpretation	
Headings are for convenience only and do not affect interpretation. The following rules apply unless the context requires otherwise.
 
 	(a)	The singular includes the plural and the converse.	
 
 	(b)	A gender includes all genders.	
 
 	(c)	Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.	
 
 	(d)	A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.	
 
 	(e)	A reference to a party to this Assumption Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns.	
 
 	(f)	Clause headings are for ease of reference only.	
 
 	(g)	A reference to (or to any specified provision of) this Assumption Agreement, any other Operative Document or any other document shall be construed as a reference to this Assumption Agreement, such other Operative Document, that provision or that document as in force for the time being and as amended, supplemented, modified, varied, assigned, novated or otherwise transferred in accordance with the terms applicable thereto or, as the case may be, with the agreement of the relevant parties, except to the extent prohibited by this Assumption Agreement.	
 
 	(h)	A reference to applicable law includes (i) applicable laws, statues, decrees, decree-laws, acts, codes, legislation, treaties, conventions and similar instruments and, in respect of any of the foregoing, any instrument passed in substitution therefore or for the purposes of consolidation thereof with any other instrument or instruments, in each case, as amended, modified, varied or supplemented from time to time, (ii) applicable final judgements, orders, determinations or awards of any court from which there is no right of appeal or if there is a right of appeal such appeal is not prosecuted within the allowable time, and (iii) applicable orders, guidelines, notice, rules and regulations of any Government Entity.	
 
1.3	Operative Document	
This Assumption Agreement is an Operative Document for the purpose of the Lease.

2.	Effect	
With effect on and from the date of this Assumption Agreement and for good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge:
 
 	(a)	MBL assumes the Assumed Obligations, and shall be substituted for Lessor under each Operative Document to the extent it applies to the Assumed Obligations, as if it had originally been a party to such Operative Document instead of Lessor; and	
 
 	(b)	MBL (i) is bound by and will comply with the provisions of each Operative Document to the extent it applies to the Assumed Obligations, (ii) assumes Lessor’s obligations and liabilities under and in relation to each Operative Document to the extent they apply to the Assumed Obligations, and (iii) enjoys all the rights and benefits of Lessor under the Operative Documents to the extent they apply to the Assumed Obligations.	
 
 	(c)	MBL will not be liable for any payment owed to Lessee under an Operative Document which does not arise from or relate to the Assumed Obligations.	
 
 	(d)	Subject to the provisions of (a) through (c) above, Lessor is irrevocably and unconditionally discharged and released from the Assumed Obligations;	
 
3.	Automatic release	
Once all the Assumed Obligations have been irrevocably and unconditionally satisfied in full and MBL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MBL from this Assumption Agreement.
 
4.	Governing law	
 
 	(a)	This Assumption Agreement is governed by the laws of New York.	
 
 	(b)	The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction.	
Each of the attorneys executing this Assumption Agreement states that the attorney has no notice of revocation of the attorney’s power of attorney.

			
MACQUARIE AEROSPACE IRELAND LIMITED, as Lessor	
		
By:	 	 	
Name:
Title:	 		
	
MACQUARIE BANK LIMITED	
		
By:	 	 	
Name:
Title:	 		
		
By:	 	 	
Name:
Title:	 		
	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. P.I. DE C.V., as Lessee	
		
By:	 	 	
Name:
Title:	 		
		
By:	 	 	
Name:
Title:	 		

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.27
Execution Version 
AIRCRAFT LEASE AGREEMENT
Dated as of 09 November 2010
BETWEEN
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED
(not in its individual capacity but solely as trustee)
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
( D / B / A VOLARIS)
as Lessee

One (1) Airbus A319-132 Aircraft
Manufacturer’s Serial Number 2296

This Aircraft Lease Agreement may be executed in several counterparts. To the extent, if any, that this Aircraft Lease Agreement or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Aircraft Lease Agreement or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.

CONTACTS—SERVICER
 
NOTE :	This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease 	
Primary Business Contact:
Israel Padron
Vice President - Marketing
CIT Aerospace
1100 Lee Wagener Boulevard, Suite 204
Fort Lauderdale, Florida 33315, U.S.A.
Tel: +1 (954) 359 0113
Fax: +1 (954) 359 5542
e-mail: israel.padron@cit.com

Payment Inquiries:	  	Technical Inquiries:	
		
Operations	  	Asset Manager	
CIT Aerospace	  	e-mail: aerospaceassetmgmt@cit.com	
3 George’s Dock, IFSC	  		
Dublin 1, Ireland	  		
Tel: +353 1 656 1004	  		
Fax: +353 1 656 1001	  		
e-mail: citaioperations@cit.com	  		
		
Utilisation Reporting:	  	Financial Reporting:	
		
Asset Manager	  	Operations	
e-mail:  aerospaceassetmgmt@cit.com	  	CIT Aerospace	
	  	3 George’s Dock, IFSC	
Operations	  	Dublin 1, Ireland	
e-mail: citaioperations@cit.com	  	Tel: +353 1 656 1004	
	  	Fax: +353 1 656 1001	
	  	e-mail:  citaioperations@cit.com	
		
Insurance Reporting:	  	Legal Contact:	
		
Portfolio Services	  	Thomas Schmid	
CIT Aerospace	  	CIT Aerospace	
11 West 42 nd Street, 12 th Floor	  	3 George’s Dock, IFSC	
New York, NY 10036	  	Dublin 1, Ireland	
U.S.A.	  	Tel: +353 1 656 1000	
Tel: +1 (212) 461 7844	  	Fax: +353 1 656 1001	
Fax: +1 (877) 525 9183	  	e-mail: thomas.schmid@cit.com	
e-mail: alice.arazny@cit.com	  		
 
- i -

CONTACTS—LESSEE
 
NOTE :	This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease 	
Primary Business Contact
Mario Geyne
Financial, Fleet and Planning Director
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma No. 490 ~ Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210, México, D.F., México
Tel: +52 (55) 5261 6400
Fax: +52 (55) 5261 6460
e-mail: mario.geyne@volaris.com.mx

Payment Inquiries:	  	Technical Inquiries:	
		
Carlos Gonzalez	  	Guillermo Cano	
Financial Controller	  	Director – Maintenance	
		
Tel: +52 (55) 5261 6428	  	Tel: +52 (55) 5261 6415	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: guillermo.cano@volaris.com.mx	
		
Utilisation Reporting:	  	Financial Reporting:	
		
Carlos Gonzalez	  	Carlos Gonzalez	
Financial Controller	  	Financial Controller	
		
Tel: +52 (55) 5261 6415	  	Tel: +52 (55) 5261 6428	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: carlos.gonzalez@volaris.com.mx	
		
Insurance/Risk Management Contact:	  	Legal Contact:	
		
Maria Elena Rodriguez	  	Alfonso Ascencio	
Risk Manager	  	General Counsel	
		
Tel: +52 (55) 5261 6435
Fax: +52 (55) 5261 6460	  	Tel: +52 (55) 5261 6412
Fax: +52 (55) 561 6460	
e-mail: maelena.rodriguez@volaris.com.mx	  	e-mail: alfonso.ascencio@volaris.com.mx	
 
- ii -

CONTENTS

Article	 	 	  	Page	 	
1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
2.	 	LEASE TERM; NATURE OF LEASE	  	 	2	  	
	 	2.1. Lease Term	  	 	2	  	
	 	2.2. Nature of Lease	  	 	2	  	
3.	 	RENT	  	 	3	  	
	 	3.1. Agreement to Pay Rent	  	 	3	  	
	 	3.2. Basic Rent	  	 	3	  	
	 	3.3. Supplemental Rent	  	 	3	  	
	 	3.4. Obligation to Perform Unconditional	  	 	3	  	
4.	 	SECURITY DEPOSIT	  	 	4	  	
	 	4.1. Security Deposit Amount	  	 	4	  	
	 	4.2. Nature of Security Deposit	  	 	4	  	
	 	4.3. Application of Security Deposit	  	 	4	  	
	 	4.4. Effect of Application of Security Deposit	  	 	4	  	
	 	4.5. Repayment of Security Deposit	  	 	4	  	
	 	4.6. Security Letter of Credit	  	 	5	  	
5.	 	PAYMENTS	  	 	7	  	
	 	5.1. Account	  	 	7	  	
	 	5.2. Payments on Non-Business Days	  	 	7	  	
	 	5.3. Timing of Payments	  	 	7	  	
	 	5.4. Late Payment	  	 	7	  	
	 	5.5. Calculation of Interest and Prorating of other Payments	  	 	7	  	
	 	5.6. Payments in Dollars	  	 	7	  	
	 	5.7. Retention of Certain Payments	  	 	8	  	
	 	5.8. Application of Payments	  	 	8	  	
6.	 	AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION	  	 	9	  	
	 	6.1. Aircraft Delivery Condition	  	 	9	  	
	 	6.2. Lessee’s Inspection of Aircraft; No Lessor Liability	  	 	9	  	
7.	 	CONDITIONS PRECEDENT TO DELIVERY	  	 	10	  	
	 	7.1. Conditions Precedent	  	 	10	  	
	 	7.2. Waiver or Deferral of Conditions Precedent	  	 	10	  	
8.	 	DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS	  				
	 	FOLLOWING DELIVERY	  	 	11	  	
	 	8.1. Delivery Location and Timing	  	 	11	  	
	 	8.2. Delivery Subject to Return from Prior Operator	  	 	11	  	
	 	8.3. [Reserved]	  	 	11	  	
	 	8.4. [Reserved]	  	 	11	  	
	 	8.5. Event of Loss to Aircraft Prior to Delivery	  	 	11	  	
	 	8.6. Lessee Acceptance of Aircraft	  	 	11	  	
	 	8.7. Risk of Loss to Aircraft following Delivery	  	 	11	  	
	 	8.8. Waiver of Remedies for Delay in Delivery	  	 	11	  	
9.	 	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	  	 	12	  	
	 	9.1. Lessee’s Representations and Warranties	  	 	12	  	
	 	9.2. Application of Representations and Warranties; Survival	  	 	14	  	
	 	9.3. Lessee’s General Covenants	  	 	14	  	
10.	 	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS;	  				
	 	DISCLAIMERS	  	 	17	  	
	 	10.1. General Representations and Warranties of Lessor	  	 	17	  	
 
- iii -

							
	 	10.2. Covenant of Quiet Enjoyment	  	 	17	  	
	 	10.3. Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies	  	 	18	  	
	 	10.4. Disclaimer and Waiver of Incidental, Consequential, Special and Punitive Damages	  	 	20	  	
	 	10.5. No Duty of Indemnitees to Inspect, Etc.	  	 	20	  	
11.	 	GENERAL OPERATION OF THE AIRCRAFT	  	 	21	  	
	 	11.1. General Operation	  	 	21	  	
	 	11.2. Insured Operations	  	 	21	  	
	 	11.3. Carriage of Goods	  	 	21	  	
	 	11.4. Operational Expenses	  	 	22	  	
	 	11.5. Compliance with Laws	  	 	22	  	
	 	11.6. Lessee’s Covenants Regarding Use of the Aircraft	  	 	23	  	
	 	11.7. Certain Tax Matters	  	 	24	  	
12.	 	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	  	 	25	  	
	 	12.1. General	  	 	25	  	
	 	12.2. Accomplishment of Tasks and Repairs	  	 	25	  	
	 	12.3. Information on Maintenance	  	 	26	  	
	 	12.4. Aircraft Documents in English Language	  	 	26	  	
	 	12.5. Originals	  	 	26	  	
	 	12.6. Performance of Maintenance	  	 	26	  	
	 	12.7. Alterations, Modifications and Additions	  	 	27	  	
	 	12.8. Replacement of Parts	  	 	28	  	
	 	12.9. Title to Parts	  	 	29	  	
	 	12.10. Temporary Replacement of Parts	  	 	30	  	
	 	12.11. Exchanging Parts	  	 	30	  	
	 	12.12. Temporary Attachment and Removal of Engines	  	 	31	  	
	 	12.13. Installation of Items of Equipment on Other Aircraft	  	 	32	  	
	 	12.14. Failure to Reinstall Engines and Items of Equipment on the Aircraft	  	 	32	  	
13.	 	MAINTENANCE RESERVES	  	 	33	  	
	 	13.1. Maintenance Reserves	  	 	33	  	
	 	13.2. Discrepancies	  	 	33	  	
	 	13.3. Rights in Maintenance Reserves	  	 	33	  	
	 	13.4. Claims for Reimbursement — Timing	  	 	34	  	
14.	 	MANUFACTURERS’ WARRANTIES AND TRAINING SUPPORT	  	 	35	  	
	 	14.1. Assignable Warranties	  	 	35	  	
	 	14.2. Reassignment; Assignment of Lessee Warranties	  	 	35	  	
	 	14.3. Warranty Claims	  	 	35	  	
	 	14.4. Training Support	  	 	35	  	
15.	 	SUBLEASING AND WET LEASING	  	 	36	  	
	 	15.1. Subleasing	  	 	36	  	
	 	15.2. Wet Leasing	  	 	37	  	
	 	15.3. No Independent Subleasing of Items of Equipment	  	 	38	  	
	 	15.4. Expenses	  	 	38	  	
	 	15.5. Lessee Remains Liable	  	 	38	  	
16.	 	REPORTING AND INSPECTIONS	  	 	39	  	
	 	16.1. Financial Reporting	  	 	39	  	
	 	16.2. Aircraft Utilisation and Other Reporting/Information	  	 	40	  	
	 	16.3. Further Information; Inspections	  	 	40	  	
	 	16.4. Technical Report Prior to Return of Aircraft	  	 	41	  	
17.	 	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	  	 	42	  	
	 	17.1. Registration	  	 	42	  	
 
- iv -

							
	 	17.2. Identification Plates	  	 	42	  	
	 	17.3. Aeronautics Authority Acknowledgment	  	 	42	  	
	 	17.4. Authorisation to Make Perfection Filings	  	 	42	  	
	 	17.5. Perfection of Title	  	 	43	  	
	 	17.6. Cape Town Convention	  	 	43	  	
	 	17.7. Permitted Liens	  	 	45	  	
	 	17.8. Expenses	  	 	46	  	
18.	 	GENERAL INDEMNITY	  	 	47	  	
	 	18.1. Scope	  	 	47	  	
	 	18.2. Lessee’s Release	  	 	48	  	
	 	18.3. Repayment	  	 	48	  	
	 	18.4. Payment	  	 	48	  	
	 	18.5. Exclusion	  	 	48	  	
	 	18.6. After-Tax Nature of Indemnity	  	 	49	  	
	 	18.7. Contest	  	 	49	  	
	 	18.8. Survival	  	 	50	  	
19.	 	INSURANCE	  	 	51	  	
	 	19.1. Obligation to Insure	  	 	51	  	
	 	19.2. Liability Insurance	  	 	51	  	
	 	19.3. Contractual Liability; Tail Coverage for Liability Insurance	  	 	51	  	
	 	19.4. Insurance Against Loss or Damage to the Items of Equipment	  	 	51	  	
	 	19.5. Reinsurance	  	 	52	  	
	 	19.6. Requirements for All Insurances	  	 	53	  	
	 	19.7. Reports	  	 	54	  	
	 	19.8. Assignee of Lessor’s and/or Owner’s Interests	  	 	54	  	
	 	19.9. Failure to Insure	  	 	54	  	
	 	19.10. Lessor’s Right to Insure	  	 	54	  	
	 	19.11. Changes to Insurance Practice	  	 	55	  	
	 	19.12. AVN 67B or AVN 67C	  	 	55	  	
20.	 	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	  	 	56	  	
	 	20.1. Risk of Loss and Damage	  	 	56	  	
	 	20.2. Notification of Loss and Damage	  	 	56	  	
	 	20.3. Event of Loss – Aircraft	  	 	56	  	
	 	20.4. Event of Loss – Engine or APU	  	 	57	  	
	 	20.5. Event of Loss – Landing Gear	  	 	58	  	
	 	20.6. Repairable Damage	  	 	58	  	
	 	20.7. Documents Loss	  	 	59	  	
	 	20.8. Application of Payments from Governmental Authorities	  	 	60	  	
	 	20.9. No Lessor Liability to Repair or Replace Following Delivery	  	 	60	  	
21.	 	TAXES; TAX INDEMNITY	  	 	61	  	
	 	21.1. Indemnity	  	 	61	  	
	 	21.2. VAT	  	 	64	  	
	 	21.3. Lessor Tax Certificates	  	 	64	  	
	 	21.4. Withholding Tax Exemption Certificates	  	 	65	  	
	 	21.5. Tax Filings; Information	  	 	65	  	
	 	21.6. Payment of Taxes and Indemnities	  	 	66	  	
	 	21.7. Contest	  	 	66	  	
	 	21.8. Survival	  	 	69	  	
	 	21.9. Change in Circumstances; Mitigation	  	 	69	  	
22.	 	RETURN OF AIRCRAFT	  	 	70	  	
	 	22.1. Time and Place	  	 	70	  	
 
- v -

							
	 	22.2. Condition	  	 	70	  	
	 	22.3. Lessee’s Continuing Obligations	  	 	70	  	
	 	22.4. Legal Status Upon Return	  	 	71	  	
	 	22.5. Airport and Navigation Charges	  	 	71	  	
23.	 	EVENTS OF DEFAULT	  	 	72	  	
24.	 	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	  	 	74	  	
	 	24.1. Lessor’s Rights Following an Event of Default	  	 	74	  	
	 	24.2. De-Registration	  	 	76	  	
	 	24.3. Present Value of Payments	  	 	76	  	
	 	24.4. Remedies Cumulative	  	 	76	  	
	 	24.5. Lessor’s Exercise of Remedies	  	 	76	  	
	 	24.6. Application of Payments Following Default or Event of Default	  	 	77	  	
	 	24.7. Use of Termination Date	  	 	77	  	
	 	24.8. No Right to Maintain Possession	  	 	77	  	
25.	 	ASSIGNMENT AND TRANSFER	  	 	78	  	
	 	25.1. No Assignment by Lessee	  	 	78	  	
	 	25.2. Transfer of Lessor’s and/or Owner’s Interests	  	 	78	  	
	 	25.3. Cooperation with Transfers	  	 	78	  	
	 	25.4. Financings	  	 	78	  	
	 	25.5. Cooperation with Financings	  	 	79	  	
	 	25.6. Notice of Security Assignment	  	 	79	  	
	 	25.7. Transfer of Beneficial Interest	  	 	80	  	
26.	 	LAW AND JURISDICTION	  	 	81	  	
	 	26.1. Governing Law	  	 	81	  	
	 	26.2. Consent to Jurisdiction	  	 	81	  	
	 	26.3. Process Agent and Service of Process	  	 	81	  	
	 	26.4. Jurisdiction and Forum	  	 	81	  	
	 	26.5. Waiver of Jury Trial	  	 	82	  	
	 	26.6. Waiver of Immunity	  	 	82	  	
27.	 	MISCELLANEOUS	  	 	83	  	
	 	27.1. Severability and Illegality	  	 	83	  	
	 	27.2. Amendments	  	 	84	  	
	 	27.3. Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer	  	 	84	  	
	 	27.4. Counterparts	  	 	85	  	
	 	27.5. Delivery of Documents by Electronic Means	  	 	85	  	
	 	27.6. Survival	  	 	85	  	
	 	27.7. Entire Lease	  	 	85	  	
	 	27.8. Successors and Assigns	  	 	85	  	
	 	27.9. Brokers	  	 	85	  	
	 	27.10. Transaction Costs	  	 	86	  	
	 	27.11. Time is of the Essence	  	 	86	  	
	 	27.12. Language	  	 	86	  	
	 	27.13. No Rights of Third Parties	  	 	86	  	
	 	27.14. Delegation	  	 	86	  	
	 	27.15. Further Assurances	  	 	86	  	
	 	27.16. Rights at Law	  	 	87	  	
	 	27.17. Confidentiality	  	 	87	  	
	 	27.18. Notices	  	 	88	  	
Appendices
1	Definitions	
 
- vi -

2	Commercial Terms	
 	A.	Lease Term	
 	B.	Rent, Security Deposit, Insurance and other Financial Matters	
 	C.	Maintenance Reserves	
 	D.	Delivery Conditions	
 	E.	Return Conditions	
3	Acceptance Certificate	
4	Lease Supplement	
5	[Reserved]	
6	Conditions Precedent / Post-Delivery Items	
 	A.	Lessor’s Conditions Precedent/Post-Delivery Items	
 	B.	Lessee’s Conditions Precedent/Post-Delivery Items	
7	Return Acceptance Certificate	
8	Forms	
 
- vii -

THIS AIRCRAFT LEASE AGREEMENT is made as of 09 November 2010 by and between:
 
1.	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED , not in its individual capacity but solely as trustee, First Floor, 7 Exchange Place, International Financial Services Centre, Dublin 1, Ireland (“ Lessor ”); and	
 
2.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS), a company organised and existing under the applicable laws of the United Mexican States and having its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F., México (“ Lessee ”).	
WHEREAS:
Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee the Aircraft on the terms and subject to the conditions of this Lease.
NOW THEREFORE IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. Unless the context otherwise requires, all capitalised terms used in this Lease shall have the meanings given such terms in Appendix 1 or as may otherwise be defined in this Lease.
1.2. References to Articles, Sections and Appendices are to be construed as references to the articles, sections and appendices of and to this Lease and references to this Lease include the Appendices.
1.3. Words importing the plural shall include the singular and vice versa.
1.4. References to “Lessee”, “Lessor”, “Owner”, “Owner Participant”, “Financing Party”, “Security Trustee”, “Liquidity Provider”, “Servicer”, “Manager”, “Guarantor”, or any other Person shall include the successors, assigns and transferees of such Person.
1.5. The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
1.6. References to (or to any specified provision of) this Lease or any Operative Document shall mean this Lease or such Operative Documents as in force for the time being and as amended, novated, substituted or supplemented from time to time in accordance with this Lease or such Operative Document.
1.7. References to “hereby”, “herein”, “hereof”, “hereunder”, and other like words shall refer to this Lease including, without limitation, as supplemented by the Lease Supplement.
1.8 Whenever it is stated in this Lease that the consent or other action of Lessee or Lessor is not to be “unreasonably withheld” it shall be deemed to mean that such consent or action shall not be “unreasonably withheld or delayed”.
1.9. Whenever this Lease or any Operative Document refers to an obligation of Owner owing to Lessee, or of Lessor that requires the cooperation or conduct of Owner, unless such obligation is taken directly by Owner in favour of Lessee, this obligation shall be deemed to mean that Lessor shall cause Owner to act accordingly.

	  		  	ARTICLE 1	
	  		  	DEFINITIONS	

2. LEASE TERM; NATURE OF LEASE
2.1. Lease Term.
(a) Lessor shall lease the Aircraft to Lessee for the period stated in Appendix 2A.
(b) The Lease Term shall commence at Delivery and shall end on the Termination Date.
2.2. Nature of Lease . At all times during the Lease Term, full legal title to the Aircraft and each Item of Equipment shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. This Lease and the Lease Supplement, together, transfer to Lessee with respect to the Aircraft a leasehold interest only and Owner is the owner and Lessor is the lessor of the Aircraft, and Lessee is the lessee of the Aircraft, for all purposes, including for purposes of the application of all relevant Laws and all relevant financial accounting principles.

	  	2	  	ARTICLE 2	
	  		  	LEASE TERM; NATURE OF LEASE	

3. RENT
3.1. Agreement to Pay Rent. As rental for the Aircraft, Lessee shall pay Basic Rent to Lessor as set forth in Appendix 2B, as applicable.
3.2. Basic Rent. The amount of Basic Rent due and payable by Lessee is set forth in Sections 1.1 and 1.2 of Appendix 2B.
3.3. Supplemental Rent. Lessee shall pay to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental Rent within ten (10) days after demand or such other relevant period as may be provided herein.
3.4. Obligation to Perform Unconditional. This Lease is a net lease and Lessee’s obligation to pay Rent and Supplemental Rent, calculated in accordance with this Lease, and to perform its other Obligations shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation:
(a) any withholding, set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including, without limitation, any breach by Lessor of its warranties, agreements or covenants contained herein or in any of the other Operative Documents;
(b) any defect in the title, registration, airworthiness, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee or any other Person for any reason whatsoever;
(c) any Liens with respect to the Aircraft;
(d) an Event of Loss with respect to the Aircraft or any Item of Equipment (subject to the terms of Section 20.3);
(e) the invalidity or unenforceability or lack of due authorisation or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease;
(f) any insolvency, bankruptcy, examinership, reorganisation, administration, liquidation or similar proceedings affecting the enforcement of creditor’s rights generally by or against Lessor, Owner Participant, or Lessee;
(g) any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing; or
(h) any imposition of Taxes.
Nothing in this Section 3.4 shall be construed so as to prevent Lessee from pursuing any Claim it may have against Lessor, Owner Participant or any other Person in such court of law or otherwise as Lessee may deem appropriate.

	  	3	  	ARTICLE 3	
	  		  	RENT	

4. SECURITY DEPOSIT
4.1. Security Deposit Amount. Lessee shall pay the Security Deposit in cash into the bank account identified in and in accordance with the provisions of Appendix 2B.
4.2. Nature of Security Deposit. Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.5 below, the Security Deposit shall be non-refundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor, may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of the Obligations and Lessee hereby assigns and charges in favour of Lessor, and hereby grants to Lessor a first priority security interest in, the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than created under this Lease, in or otherwise dispose of the Security Deposit. Lessee shall, from time to time, execute and file with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor with respect to the Security Deposit, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
4.3. Application of Security Deposit. If an Event of Default has occurred and is continuing hereunder, in addition to all other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee or any Affiliate of Lessee, as applicable, under any Operative Document or Related Lease and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.
4.4. Effect of Application of Security Deposit. If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other Person, of any Event of Default and Lessee shall, within three (3) Business Days after Lessor’s written demand, pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no other Default or Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.
4.5. Repayment of Security Deposit. Provided no Default or Event of Default has occurred and is continuing, the Security Deposit, less the amount, if any, of any reasonable costs incurred by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or any Affiliate of Lessee, as applicable, is responsible hereunder or under any Related Lease in connection with the termination or cancellation of this Lease or a Related Lease or return of the Aircraft or an aircraft under any Related Lease, shall be paid over to Lessee promptly, and in any event within five (5) Business Days, after the Termination Date and the satisfaction by Lessee, in full

	  	4	  	ARTICLE 4	
	  		  	SECURITY DEPOSIT	

, of its Obligations and the Related Obligations, the payment or performance of which is then due (including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and to correct discrepancies identified in the Return Acceptance Certificate, but excluding those other Obligations or Related Obligations expressly provided herein to survive the Termination Date or the equivalent date in any Related Lease and which are not due for performance on or as of such date).
4.6. Security Letter of Credit. In lieu of paying or maintaining the Security Deposit in cash, Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Cash Security Deposit.
(a) If Lessee elects to provide a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than ten (10) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the Cash Security Deposit. The Security Letter of Credit shall remain in full force and effect during the Lease Term and for not less than ninety (90) days following the Scheduled Termination Date, shall permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit, and shall be freely assignable and transferable by Lessor without restriction or condition. Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee the equivalent amount of the Cash Security Deposit.
(b) Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:
(i) upon the occurrence of an Event of Default; and/or
(ii) if Lessee has not delivered a replacement Security Letter of Credit to Lessor in accordance with the provisions of this Section 4.6 or deposited with Lessor cash in the amount of the Security Deposit by the required time set forth therein; and/or
(iii) not sooner than five (5) Business Days prior to the expiration date of the Security Letter of Credit if (x) such expiration date is prior to the date required under Section 4.6(a), and ( y ) Lessee has not delivered a replacement letter of credit in substitution for the expiring Security Letter of Credit by such date or deposited with Lessor by such date the Security Deposit in cash;
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit to the same extent as provided in Sections 4.3 and 4.5, as if Lessee had paid the Security Deposit in cash.
(c) If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall within three (3) Business Days after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement letter of credit to be issued in the total amount of the Security Deposit or pay the amount of such shortfall in the Security Deposit amount in cash.
(d) If (i) any bankruptcy, insolvency, examinership, administration, reorganisation, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the issuer of the Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof), (ii) the rating of obligations of the issuer of any Security Letter of Credit (or any Person guaranteeing, confirming or assuming any

	  	5	  	ARTICLE 4	
	  		  	SECURITY DEPOSIT	

obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by Moody’s Investors Services or Standard & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or (iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall within three (3) Business Days of receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Section 4.6 or deposit with Lessor cash in the amount of the Security Deposit.
(e) Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.

	  	6	  	ARTICLE 4	
	  		  	SECURITY DEPOSIT	

5. PAYMENTS
5.1. Account. All payments of Rent, Security Deposit and in respect of Maintenance Reserves shall be made by Lessee to the bank account identified in Appendix 2B or to such other account designated in writing by Security Trustee not less than two (2) Business Days prior to the due date of any relevant payment. Lessee shall, together with such payment, identify the institution from which such payment is being sent and refer to the make, model and Manufacturer’s serial number of the Aircraft, provided that the failure to do so shall not constitute a Default hereunder.
5.2. Payments on Non-Business Days. When any payment under any Operative Document would otherwise be due to Lessor on a day that is not a Business Day, the due date for payment shall be the next succeeding Business Day.
5.3. Timing of Payments. Payments due under this Lease shall be made by Lessee for credit to Lessor not later than 11:00 A.M. New York time on the due date.
5.4. Late Payment. If Lessee fails to pay to Lessor any sum on its due date for payment under this Lease or any other Operative Document, including any payment of Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum from the due date up to the date of actual payment (including non-payment following the issuance of a judgment) at the Past Due Rate.
5.5. Calculation of Interest and Prorating of other Payments.
(a) All interest payable under this Lease or any other Operative Document shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
(b) All payments of a monthly nature under this Lease and any other Operative Document, including, but not limited to payments of Fixed Rent and in respect of Maintenance Reserves, that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
5.6. Payments in Dollars. All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. The specification of Dollars in this transaction is of the essence and Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transferred to Lessor under normal banking procedures does not yield the amount of Dollars owing to Lessor in respect of such payment. If Lessor receives an amount in respect of Lessee’s liability under this Lease or if such liability is converted into a claim, proof, judgment or order in a currency other than Dollars, Lessee will indemnify Lessor, on an After-Tax Basis, as an independent obligation against any loss arising out of or as a result of such receipt or conversion. If the amount received by Lessor, when converted into Dollars (at the market rate at which Lessor is able on the relevant date to purchase Dollars in New York with that other currency) is less than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor an amount in Dollars equal to the deficit. In addition, Lessee waives any right it may have in any jurisdiction to pay any amount due or to become due hereunder in a currency other than Dollars.

	  	7	  	ARTICLE 5	
	  		  	PAYMENTS	

5.7. Retention of Certain Payments. Any amount referred to in any Operative Document which is payable to or retainable by Lessee shall not be paid to or retained by Lessee at any time when a Default or Event of Default shall have occurred and be continuing, but instead such amount shall be paid to or held by Lessor as additional security for Lessee’s Obligations to be held and applied in accordance with the provisions of this Lease. At such time as there shall not be continuing any Default or Event of Default, such amount shall be paid to Lessee to the extent not applied in accordance with the preceding sentence. Where Lessor would, but for this Section 5.7 or any similar provision, be obliged to make any payment to Lessee, Lessor may elect to make such payment but shall be entitled to deduct or withhold from such payment any amount then due and payable but unpaid by Lessee under or in respect of Lessee’s Obligations.
5.8. Application of Payments. Lessor may apply any payment received from Lessee under any Operative Document which is less than the full amount then due and owing to Lessor in respect of Lessee’s Obligations in such proportions, order and manner as Lessor may, in its reasonable discretion, determine (except where an Event of Default is continuing, in which event such determination may be made in Lessor’s absolute discretion), notwithstanding any designation or instruction for application that may have been made by Lessee.

	  	8	  	ARTICLE 5	
	  		  	PAYMENTS	

6. AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION
6.1. Aircraft Delivery Condition. The Aircraft shall be delivered to Lessee by Lessor on the Delivery Date in the condition set forth in Appendix 2D.
6.2. Lessee’s Inspection of Aircraft; No Lessor Liability.
(a) Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it meets the requirements of this Lease and specifically disclaims any reliance upon any representation or assurance by Lessor, Owner Participant, Servicer or any Affiliate of the foregoing or any representative or agent thereof in making such determination. Lessee further acknowledges that any assumption that Lessor will cure any nonconformity of the Aircraft and/or any Item of Equipment, discovered, difficult of discovery, or undiscovered, is not reasonable unless both ( x ) the nonconformity or possibility of nonconformity and ( y ) Lessor’s agreement to cure or cause the cure of such nonconformity are expressed in a written instrument signed by Lessor and Lessee delivered at or before the execution and delivery of the Acceptance Certificate and Lease Supplement, except as otherwise set forth herein. Except for any express commitment by Lessor to cure or cause the cure of any nonconformity evidenced by a written instrument of the type described in ( y ) above, including without limitation a list of discrepancies set forth as an attachment to the Acceptance Certificate, no Indemnitee will be liable for any failure of the Aircraft to conform with the requirements of this Lease at the time of acceptance of the Aircraft by Lessee.
(b) Compliance. All representatives designated by Lessee to perform the pre-Delivery inspections of the Aircraft contemplated under this Section 6.2 shall comply with such occupational health and safety and security requirements as the same are advised by Servicer, or any duly appointed party acting by or through Servicer, in writing, and shall not unreasonably interfere with Lessor’s and/or Servicer’s performance of their respective obligations in connection with the return inspections conducted pursuant to the Prior Lease.

	  	9	  	ARTICLE 6	
	  		  	AIRCRAFT DELIVERY CONDITION;	
	  		  	LESSEE’S INSPECTION	

7. CONDITIONS PRECEDENT TO DELIVERY
7.1. Conditions Precedent.
(a) Lessor’s obligation to deliver and lease the Aircraft to Lessee is subject to:
 
 	(i)	the Aircraft being in compliance with the condition required for Delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft;	
 
 	(iii)	no Default or Event of Default having occurred and be continuing;	
 
 	(iv)	there having been no material adverse change to the financial condition of Lessee from the date of execution of this Lease to the Delivery Date which would adversely affect Lessee’s ability to perform its Obligations;	
 
 	(v)	the receipt by Lessor of each item identified in Appendix 6A by the date required for such item appearing therein; and	
 
 	(vi)	Prior Operator having returned the Aircraft under the Prior Lease substantially in the condition required for return thereunder.	
(b) Lessee’s obligation to take delivery and lease the Aircraft from Lessor is subject to:
 
 	(i)	the Aircraft being in compliance with the condition required for Delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft; and	
 
 	(iii)	the receipt by Lessee of each item identified in Appendix 6B by the date required for such item appearing therein.	
7.2. Waiver or Deferral of Conditions Precedent. If any condition precedent specified in Section 7.1(a)(v) is not satisfied before Delivery, Lessor may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessor may determine and notify to Lessee in writing. If any condition precedent specified in Section 7.1(b)(iii) is not satisfied before Delivery, Lessee may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessee may determine and notify to Lessor in writing.

	  	10	  	ARTICLE 7	
	  		  	CONDITIONS PRECEDENT TO DELIVERY	

8. DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY
8.1. Delivery Location and Timing. Lessor shall deliver the Aircraft in the condition required by this Lease to Lessee and Lessee shall accept the Aircraft when properly tendered under this Lease on the Delivery Date at the Delivery Location, whereupon the Lease Term shall commence.
8.2. Delivery Subject to Return from Prior Operator. Delivery of the Aircraft is subject to and expressly conditioned upon return of the Aircraft by Prior Operator pursuant to the Prior Lease. Lessor shall not be liable or responsible to Lessee for and Lessee hereby expressly waives any right to any Claims arising or the exercise of any remedies from or in connection with any delay by Prior Operator in the return of, or failure to return, the Aircraft under the Prior Lease, and Lessee shall not be released from its Obligation to take delivery of the Aircraft under this Lease as a result of any such delay; provided that the foregoing release and waiver by Lessee shall not apply with respect to any Claims solely and directly attributable to Lessor’s willful misconduct.
8.3. [Reserved].
8.4. [Reserved].
8.5. Event of Loss to Aircraft Prior to Delivery. If an Event of Loss with respect to the Aircraft occurs prior to Delivery, Lessor will notify Lessee promptly following Lessor’s knowledge of the same, and this Lease shall automatically terminate whereupon neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.6. Lessee Acceptance of Aircraft. If Lessee fails to ( x ) comply with the conditions contained in this Lease so as to allow Delivery to take place or ( y ) take delivery of the Aircraft when properly tendered for delivery by Lessor in the condition required under this Lease, Lessee will be liable for and shall indemnify Lessor for all documented, out-of-pocket costs and expenses reasonably incurred by Lessor as a result thereof including any payments which Lessor becomes obliged to make, or has made, for or on account of Lessee’s delivery requirements in order to prepare the Aircraft for Delivery, but excluding payments which Lessor would otherwise have been required to make notwithstanding such failure of Lessee to take delivery.
8.7. Risk of Loss to Aircraft following Delivery. Upon Delivery, risk of loss or damage to the Aircraft shall pass to Lessee for the Lease Term (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
8.8. Waiver of Remedies for Delay in Delivery. Lessor shall not be liable to Lessee for any delay or failure in Delivery to Lessee which is an Excusable Delay. Pursuant to Section 10.3, Lessee’s only rights or remedies for a delay in delivery, or anticipated delay in delivery, of the Aircraft not caused or occasioned by a Default of Event of Default of Lessee are those rights and remedies provided for in Section 10.3.

	  	11	  	ARTICLE 8	
	  		  	DELIVERY	

9. LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1. Lessee’s Representations and Warranties. Lessee represents and warrants to Lessor that:
(a) Lessee is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted.
(b) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto such Operative Documents will constitute the valid and legally binding and enforceable obligations of Lessee (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization and other laws affecting the rights of creditors generally).
(c) The execution and delivery of, the performance of its Obligations under, and compliance by Lessee with the provisions of, the Operative Documents will not (i) contravene any existing applicable Law of its State of Organisation or the State of Registration (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessee is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of its constitutional and/or organisational documents, or (iv) result in the creation or imposition of, or oblige it to create, any Lien over its undertaking or any of its material assets, rights or revenues.
(d) Lessee is not in default under any material agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceeding is taking place or, to its knowledge, after reasonable inquiry, pending or threatened against Lessee which would have or could reasonably be expected to have a material adverse effect on its ability to perform its Obligations.
(e) The audited annual financial statements of Lessee for each financial year are certified by independent auditors and, as most recently delivered to Lessor, have been prepared in accordance with GAAP and fairly present the financial position of Lessee as at such date and the results of the operations of Lessee for the financial year ended on the date set forth therein and there has, to the knowledge of Lessee, after reasonable inquiry, been no material adverse change in the financial condition of Lessee since publication of such financial statements, except as otherwise previously disclosed to Lessor in writing.
(f) Other than making a filing in respect of this Lease in the State of Registration with the Aeronautics Authority and with the IR and the filing and registration in respect of the pledge under Mexican Law with the appropriate Governmental Authorities pursuant to Sections 4.2 and 13.3(a)(i), it is not necessary, in order to ensure the legality, validity, enforceability or admissibility in evidence of any Operative Document, that such Operative Document or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid in relation to any of the Operative Documents.

	  	12	  	ARTICLE 9	
	  		  	LESSEE’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS;	

(g) Lessee has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which it is a party, the validity and enforceability hereof and thereof and the compliance, satisfaction or performance by Lessee with or of all monetary and other Obligations hereunder and thereunder and all such authorisations are, or prior to the Delivery Date will be, valid and in full force and effect.
(h) The choice by Lessee of New York Law to govern the Operative Documents and the submission by Lessee to the jurisdiction of the New York courts is valid and binding on Lessee.
(i) In any proceedings taken in any jurisdiction in relation to any of the Operative Documents, Lessee will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(j) Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing or navigation fees or charges in respect of the Aircraft or any other aircraft owned by or leased to or operated by it, which if unpaid are reasonably likely to result in the imposition of a Lien on the Aircraft.
(k) Lessee has fully disclosed to Lessor all facts of which it has knowledge which in Lessee’s reasonable belief are material for disclosure to Lessor in the context of this Lease, Lessee knows of no material facts that would render any information previously furnished by or on behalf of Lessee to Lessor inaccurate or misleading in any material respect.
(l) No Default or Event of Default has occurred and is continuing.
(m) Lessee is solvent and able to pay its debts as the same fall due and the transactions contemplated by the Operative Documents are of commercial benefit to it and in its commercial interests.
(n) With respect to Taxes:
(i) Lessee has duly filed all Tax returns that it is required by applicable Laws to file, has duly paid all Taxes stated to be due and payable in such Tax returns and has duly paid all Taxes stated to be due in any demand for payment or similar communication issued by any taxing authority to Lessee other than:
(A) Taxes (1) which are being contested in good faith by appropriate proceedings in accordance with applicable Law, (2) for which adequate reserves are maintained in accordance with GAAP, and (3) the contest of which does not involve any risk of imposition of any criminal penalty on any Indemnitee or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;

	  	13	  	ARTICLE 9	
	  		  	LESSEE’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS	

(B) Tax returns, the non-filing of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein; and
(C) Taxes, the non-payment of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition of any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(ii) no Tax imposed by any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration is (or, subject to any change in law after the Delivery Date, will be) (A) required to be paid by Lessor or Owner Participant as a result of the execution, delivery, performance or enforcement of, or the transactions and activities provided for or contemplated in, the Operative Documents, or (B) required to be deducted or withheld from or with respect to any amount payable by Lessee to Lessor under any Operative Document; and
(iii) neither of Lessor nor Owner Participant is (and, subject to any change in law after the Delivery Date, will be) required to give any notice to, make any registration with, or file any document or information with, any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration with respect to Taxes solely by reason of the execution, delivery, performance or enforcement of the Operative Documents.
9.2. Application of Representations and Warranties; Survival. Each representation and warranty set out in Section 9.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft.
9.3. Lessee’s General Covenants. Lessee covenants to Lessor that it will:
(a) preserve and maintain (i) its corporate existence and (ii) all of its material rights, privileges and franchises in every jurisdiction in which the character of the property owned or the nature of the business transacted by it makes licensing or qualification necessary;
(b) pay or cause to be paid (i) all Taxes required by applicable Laws to be paid by it (whether such Taxes are imposed upon it or upon its income and profits or upon any property belonging to it or otherwise) prior to the date on which any penalty accrues, except Taxes described in sub-clause (A), (B) or (C) of Section 9.1(n)(i), and (ii) all other lawful claims which, if not paid, are reasonably likely to result in the imposition of a Lien upon its property or upon the Aircraft or any part thereof;

	  	14	  	ARTICLE 9	
	  		  	LESSEE’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS	

(c) remain duly qualified to operate the Aircraft under applicable Law;
(d) maintain in full force and effect all governmental consents, licenses, authorisations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to timely obtain or effect any new or additional governmental consents, licenses, authorisations, approvals, declarations, filings or registrations as may become necessary for Lessee’s performance of its Obligations;
(e) not consolidate with, merge with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person, provided that Lessee may do so if Lessee establishes to the reasonable satisfaction of Lessor that such merger, conveyance, transfer or lease will not have a materially adverse effect on Lessee’s ability to perform its Obligations and that the surviving entity will assume all Obligations, unless (i) in the case of a merger or consolidation, the surviving entity of such merger or consolidation is Lessee or an entity which (x)  is a certificated air carrier or parent thereof and (y)  after giving effect to such merger or consolidation has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation and which has agreed in writing satisfactory to Lessor, to assume and perform all Obligations of Lessee hereunder, and such merger or consolidation will not have a materially adverse effect on the ability of the surviving entity to perform such Obligations; or, (ii) in the case of a transfer or lease, such transfer or lease will not have a materially adverse effect on Lessee or its ability to perform its Obligations hereunder;
(f) notify Lessor of any change to Lessee’s registered office, principal place of business or chief executive office if there is more than one place of business not more than thirty (30) days following such change;
(g) not (i) voluntarily suspend its certificated operations of the Aircraft or its fleet other than by reason of a merger or consolidation not otherwise prohibited by sub-clause (e) above; or (ii) permit to be revoked, canceled or otherwise terminated, whether by act or omission, all or substantially all of the material franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof, where such revocation, suspension or termination will have or could be deemed to have a material adverse effect on Lessee’s ability to perform its Obligations;
(h) pay promptly when due all navigation and en-route charges and all other charges payable by Lessee for the use of or services provided at any airport, whether in respect of the Aircraft or any other aircraft in Lessee’s fleet where the failure to pay the same could reasonably be expected to (i) result in a Lien upon the Aircraft, except to the extent being contested in accordance with applicable law and in respect of which contest Lessee has taken adequate reserves in accordance with GAAP, provided such contest would not give rise to any material likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of Lessor or any Financing Party, and/or (ii) materially and adversely effect Lessee’s ability to perform its Obligations hereunder;

	  	15	  	ARTICLE 9	
	  		  	LESSEE’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS	

(i) not represent or hold out Owner, Lessor (if not Owner), Owner Participant, any Financing Party or any Affiliate of the foregoing as carrying goods or passengers on the Aircraft or being in any way connected to operation of the Aircraft; and
(j) if any items delivered to Lessor in connection with this Lease are required by this Lease to have a validity and effectiveness for the Lease Term, but have or are of a duration or effectiveness that is for less than the Lease Term when originally delivered, Lessee shall cause replacements, extensions or supplements thereof to be timely delivered to Lessor during the Lease Term to ensure that Lessor maintains at all times during the Lease Term the benefits initially afforded by such items and the continued effectiveness and validity of the same for the Lease Term.

	  	16	  	ARTICLE 9	
	  		  	LESSEE’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS	

10. LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS
10.1. General Representations and Warranties of Lessor. Lessor represents and warrants to Lessee that:
(a) Lessor is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted;
(b) Lessor has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto the Operative Documents to which it is a party will constitute its valid and legally binding and enforceable obligations;
(c) the execution and delivery of, the performance of its obligations under, and compliance by Lessor with the provisions of, the Operative Documents to which it is a party will not (i) contravene any existing applicable Law of its State of Organisation (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessor is a party or is subject or by which it or any of its property is bound, or (iii) contravene or conflict with any provision of its constitutional and/or organisational documents;
(d) Lessor has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which Lessor is a party and the validity and enforceability hereof and thereof;
(e) each representation set forth in this Section 10.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft;
(f) on and as of Delivery, Lessor shall have the right to lease the Aircraft to Lessee and there is no actual, or to Lessor’s knowledge, after reasonable inquiry, pending or threatened litigation to prevent or prohibit Lessor from entering into and performing its obligations under the Operative Documents to which it is a party or otherwise affecting the Aircraft or Lessor’s rights, title and interest in and to the Lease; and
(g) Lessor is solvent and able to pay its debts as the same fall due.
10.2. Covenant of Quiet Enjoyment.
(a) Notwithstanding the effect of any provision in the Cape Town Convention to the contrary, which by the terms of the Cape Town Convention may be derogated from or varied, Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the Aircraft without interference by Lessor or by any Person lawfully claiming by or through Lessor. The lawful exercise by Lessor of its rights under any Operative Document in conformity with the terms and conditions of such Operative Document shall not constitute a breach of this Section 10.2.

	  	17	  	ARTICLE 10	
	  		  	LESSOR’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS; DISCLAIMERS	

(b) Prior to Delivery, Lessor shall cause each of Owner Participant and Security Trustee to provide Lessee with a Quiet Enjoyment Letter substantially in the forms set out in Appendix 8.
10.3. Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies.
(a) LESSEE AGREES THAT, AS BETWEEN ITSELF AND THE INDEMNITEES, IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS, WHERE-IS”. LESSEE ACKNOWLEDGES AND AGREES THAT NO INDEMNITEE HAS MADE, OR SHALL BE DEEMED TO HAVE MADE, (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, FOR ITSELF AND FOR EACH INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE OR CAPABLE OF DISCOVERY, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, FOR (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ITEM OF EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii) THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR) OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT ARE EXCLUSIVE AND IN LIEU

	  	18	  	ARTICLE 10	
	  		  	LESSOR’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS; DISCLAIMERS	

OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT.
(b) LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY EACH MANUFACTURER. LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT (i) NO INDEMNITEE IS A SELLER, MANUFACTURER, REPAIRER OR PERSON MANAGING, DIRECTING OR PERFORMING SUCH SERVICES OF THE AIRCRAFT AND (ii) THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.
(c) IN CONSIDERATION OF (i) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY AND ALL ASSIGNABLE WARRANTIES OF ALL MANUFACTURERS, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE UNDER APPLICABLE LAW. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
(d) DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.
(e) LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION,

	  	19	  	ARTICLE 10	
	  		  	LESSOR’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS; DISCLAIMERS	

( X ) ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND ( Y ) ON ACCOUNT OF ANY REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE COVENANT OR PROMISE RUNS. LESSEE AGREES THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS, AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT AND LESSEE HEREBY WAIVES ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER ARTICLE 2A (UNIFORM COMMERCIAL CODE—LEASES) OF THE NEW YORK UNIFORM COMMERCIAL CODE OR OTHERWISE IN RESPECT OF SUCH BREACH.
10.4. DISCLAIMER AND WAIVER OF INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES. EACH OF LESSEE AND LESSOR (EXCEPT IN RESPECT OF LESSOR AS OTHERWISE SET FORTH HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT) AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES, AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR IN THE CASE OF LESSOR, EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 24, ANTICIPATED PROFITS AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF SUCH OTHER PARTY CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS.
10.5. NO DUTY OF INDEMNITEES TO INSPECT, ETC. NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE ORGANISATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT PERFORMED DURING THE LEASE TERM.

	  	20	  	ARTICLE 10	
	  		  	LESSOR’S REPRESENTATIONS,	
	  		  	WARRANTIES AND COVENANTS; DISCLAIMERS	

11. GENERAL OPERATION OF THE AIRCRAFT
11.1. General Operation. Lessee will:
(a) comply with the Law in any country or jurisdiction which may for the time being be applicable to the Aircraft and its use, maintenance and operation, including but not limited to the holding of all certificates, licenses, permits, authorisations and regulations, and take all reasonable steps to ensure that the Aircraft is not used for any illegal purpose;
(b) not use any Item of Equipment in any manner contrary to:
(i) any Manufacturer’s operating manuals or published instructions, or in violation of any airworthiness certificate or registration relating thereto; or
(ii) any published recommendation of the Manufacturer of such Item of Equipment or regulation of the Aeronautics Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) ensure that all personnel directly or indirectly employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aeronautics Authority and applicable Law;
(d) use the Aircraft solely in commercial passenger and cargo (provided such cargo is carried exclusively in the cargo compartments of the Aircraft) operations for which Lessee is duly authorised by the Aeronautics Authority and under applicable Law and, without prejudice to Lessee’s rights under Section 15.2 hereof, principally from one or more bases located within the State of Registration or Lessee’s State of Organisation (or such other location as Lessor may approve in writing from time to time, such approval not to be unreasonably withheld);
(e) not utilise the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other similar model aircraft within Lessee’s fleet of aircraft; and
(f) obtain and maintain in full force and effect all certificates, licenses, permits and authorisations required for the making of payments required by this Lease and the compliance by Lessee with its other Obligations.
11.2. Insured Operations. Lessee will not use or locate or permit the Aircraft or any Item of Equipment to be used or located in any manner, for any purpose or at any location which is not covered by the insurance policies and the scope of coverage Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit the coverage provided under any such insurance policy or coverage provided thereunder.
11.3. Carriage of Goods. Lessee shall not use the Aircraft for the carriage of:

	  	21	  	ARTICLE 11	
	  		  	GENERAL OPERATION OF THE AIRCRAFT	

(a) whole animals living or dead except in compliance with I.A.T.A. regulations;
(b) cargo to the extent forbidden pursuant to Section 2 (Limitations) of the I.A.T.A. Dangerous Goods Regulations, as revised, from time to time;
(c) nuclear fuels or waste, illegal drugs, controlled substances or the like or any other goods, materials or items of cargo which are prohibited by Law; or
(d) any other cargo which, whether due to size, content or packaging, (i) could reasonably be expected to cause damage to the Aircraft or (ii) the carriage of which might cause damage that would not be adequately covered by insurance.
11.4. Operational Expenses. Lessee shall pay or procure payment of all expenses incurred in the operation of the Aircraft during the Lease Term including, without limitation, expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, landing and navigation fees, airport charges, passenger service and any and all other expenses or claims of any kind or nature incurred during the Lease Term, arising directly or indirectly in connection with or related to the use, movement, operation, storage or location of the Aircraft or any Item of Equipment. The obligations of Lessee under this Section 11.4 arising prior to any cancellation, termination or expiration of the Lease Term shall continue in full force and effect, notwithstanding such cancellation or termination (whether arising out of an Event of Default or otherwise) or expiration, and shall be enforceable by Lessor. Nothing herein shall be deemed to prevent Lessee from contesting any such expenses by appropriate proceedings, provided that no such contest shall give rise to any reasonable likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of any Indemnitee.
11.5. Compliance with Laws. Lessee will:
(a) not cause or permit the Aircraft to proceed to, or remain at, any location to the extent then prohibited by applicable Law by any Governmental Authority of the State of Registration or Lessee’s, Lessor’s or Owner’s State of Organisation or any Governmental Authority of the country in which such location is situated, except under exigent circumstances, when necessary to safeguard the Aircraft or the lives and well-being of passengers and crew, provided that the Aircraft is promptly removed from such location upon cessation of such exigent circumstances; and
(b) not use or permit the use of the Aircraft or any Item of Equipment with, for or on behalf of any Person:
(i) whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in effect during the Lease Term);
(ii) in violation of the United States Bank Secrecy Act, as amended, or any applicable regulations thereunder;

	  	22	  	ARTICLE 11	
	  		  	GENERAL OPERATION OF THE AIRCRAFT	

(iii) in violation of any of the sanctions programs administered by the Office of Foreign Assets Control of the United States Department of Treasury (“ OFAC ”), any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency, or any enabling legislation or executive order relating thereto ( ref : www.ustreas.gov/offices/enforcement/ofac/ );
(iv) on the list of “Specially Designated Nationals” and “Blocked Persons” or prohibited under any OFAC regulation or executive order, as the same are amended from time to time;
(v) in violation of a United Nations sanction or whose assets have been frozen by enabling legislation of the same in the State of Registration or Lessee’s State of Organisation; or
(vi) in violation of any Laws similar to or consistent with the foregoing clauses (i) through (v) as the same are enacted in Lessee’s State of Organisation or the State of Registration;
as any or all of the same are amended or supplemented from time to time, and including any successor Laws as the same are enacted from time to time.
11.6. Lessee’s Covenants Regarding Use of the Aircraft. Lessee covenants to Lessor that it will procure that ( x ) in each calendar year that begins and ends during the Lease Term and ( y ) in the case of the calendar year that includes the Delivery Date, during the part of such calendar year that begins on the Delivery Date and ( z ) in the case of the calendar year that includes the Termination Date, during the part of such calendar year that ends on the Termination Date:
(a) either:
(i) the Aircraft will be located outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii) more than fifty percent (50%) of the miles traversed in the use of the Aircraft will be outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof),
provided that the Aircraft will be deemed to be in the U.S.A. at all times during which it is engaged in transport between the U.S.A. and Puerto Rico or between two points in the U.S.A. or between two points in Puerto Rico; and
(b) either:
(i) the Aircraft will be located outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty per cent (50%) of the time, or

	  	23	  	ARTICLE 11	
	  		  	GENERAL OPERATION OF THE AIRCRAFT	

(ii) more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof); and
(c) the Aircraft will not be used, pursuant to any sublease, wet lease, charter, or otherwise, by any Person that:
(i) has a State of Organisation in or whose State of Organisation is (A) Canada or (B) Puerto Rico or the U.S.A., or
(ii) is resident or principally based in (A) Canada or (B) Puerto Rico or the U.S.A., or
(iii) has any right under any sublease, wet lease, charter or other agreement to use (or to permit or suffer any other Person to use) the Aircraft or any part thereof in a manner which is reasonably likely to result in a breach of any covenant of Lessee in this Section 11.6,
except that the Aircraft may be wet leased to a Person described in subclause (i)(B) or (ii)(B) provided that such Person will not have the right to use the Aircraft for more than a total of ninety (90) days in any calendar year, and Lessee provides Lessor written notice of such wet lease within ten (10) days after the date on which such wet lease is executed. For purposes of this Section 11.6(c), the term “wet lease” shall have the same meaning as the term Wet Lease except that it may include a “wet lease” of the Aircraft by a Permitted Sublessee (and in such case references to Lessee appearing in the definition of the term Wet Lease shall be deemed to refer to such Permitted Sublessee).
11.7. Certain Tax Matters. If, after the Delivery Date, an amendment to Section 954 of the United States Internal Revenue Code of 1986, as amended (the “ U.S. Tax Code ”), is enacted or an amendment to the Treasury Regulations under Section 954 of the U.S. Tax Code is promulgated as a final regulation and if independent tax counsel engaged by Lessee and reasonably acceptable to Lessor delivers to Lessee and Lessor a written opinion to the effect that due to such amendment, Rent payable by Lessee pursuant to this Lease will be treated as “derived from leasing the Aircraft in foreign commerce” within the meaning of Section 954(c)(2)(A) of the U.S. Tax Code even if Lessee does not comply with its warranty and covenant in Section 11.6(a), then if requested by Lessee in writing and if no Event of Default shall have occurred and be continuing, Lessor will negotiate with Lessee in good faith with a view to amending Section 11.6 to reflect such amendment, provided that no such amendment shall give rise to a reasonable likelihood that any Indemnitee would incur any liability, loss, cost, expense or other adverse consequence that it would not have incurred in the absence of such amendment unless Lessee is required by this Lease or any other Operative Document to indemnify such Indemnitee therefor in a manner that is reasonably satisfactory to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee in connection with the negotiation, documentation, execution, delivery, filing or recording of any amendment requested by Lessee pursuant to this Section 11.7.

	  	24	  	ARTICLE 11	
	  		  	GENERAL OPERATION OF THE AIRCRAFT	

12. MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT
12.1. General. Lessee, at its own expense, shall cause the Aircraft and each Item of Equipment to be serviced, repaired, overhauled, tested and maintained:
(a) in accordance with the Maintenance Program and the applicable Manufacturer’s Repair Manuals including, without limitation, the Manufacturer’s recommended corrosion prevention and control program for the Aircraft;
(b) so as to keep each such Item in as good operating condition and as necessary to maintain the value, utility and appearance of the Aircraft as when delivered to Lessee hereunder, reasonable wear and tear excepted;
(c) in compliance with Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance during the Lease Term;
(d) in compliance with all other Manufacturer’s service bulletins which require compliance in order to maintain the validity of warranties assigned or otherwise provided to Lessee; and
(e) in compliance with all Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be accomplished in strict accordance with such AD. Notwithstanding the foregoing, compliance with any AD may be accomplished by the use of an alternate method of compliance, provided that such alternate method of compliance is approved by EASA and the Aeronautics Authority, without limitation.
12.2. Accomplishment of Tasks and Repairs. Lessee shall cause, at its expense, all Tasks to be accomplished on the Aircraft as they become due, with no discrimination toward the Aircraft with respect to any maintenance accomplished on similar model aircraft within Lessee’s fleet of aircraft. To the extent that the Maintenance Program permits certain structural Tasks to be accomplished on a sampling basis, Lessee nevertheless shall accomplish on the Aircraft all such structural Tasks that, by the terms of such Tasks, are applicable to the Aircraft, provided, however, at Lessee’s option the accomplishment of such structural sampling Tasks may be deferred during the Lease Term, but in any event all such structural sampling Tasks that have been deferred shall be accomplished by Lessee not later than during the Final Check. Any damage, defects or corrosion discovered during the Lease Term shall be repaired in accordance with the applicable Manufacturer’s Repair Manual approved procedures at the sole expense of Lessee, and Lessee shall obtain Required Approval with respect to any repairs or modifications accomplished during the Lease Term which have not been approved by the Manufacturer and the Certificating Authority in addition to any approval received by Lessee from the Aeronautics Authority with respect to any such repairs or modifications.

	  	25	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

12.3. Information on Maintenance. Lessee, at its cost and expense, shall furnish Lessor, at such times during the Lease Term as Lessor shall reasonably request, copies of records maintained relating to the Aircraft.
12.4. Aircraft Documents in English Language. Lessee, at its cost and expense, shall maintain all Aircraft Documents produced during the Lease Term by or for the benefit of Lessee or any Permitted Sublessee or delivered to Lessee on the Delivery Date, in the English language, including such Aircraft Documents described above and required by the applicable Aeronautics Authority to be maintained in respect of each Item of Equipment, and promptly furnish to Lessor upon Lessor’s request such information as may be required to enable Lessor to file any reports required to be filed with any Governmental Authority because of Owner’s ownership of the Aircraft.
12.5. Originals. All Aircraft Documents, including records and documentation of maintenance accomplished on the Aircraft and any Item of Equipment shall be retained by Lessee until the Termination Date, at which time all records and Aircraft Documents shall be returned to Lessor in original (not duplicate) form. Notwithstanding the preceding sentence, Lessee may return any such Aircraft Documents in electronic form, except with respect to documentation of Airworthiness Directive accomplishments which must be in original form with the signature of the Person authorized to accomplish such, subject to the following:
(a) Lessee shall, unless already possessed by Lessor, provide Lessor with the software necessary to access such electronic documentation and the appropriate licenses for Lessor and any other owner or operator to use such software;
(b) Lessee shall provide Lessor with the appropriate excerpts from Lessee’s operations or procedures manuals (in English), approved by the Aeronautics Authority, specifying the procedures to be adhered to by Lessee in the use of such form of electronic documentation in place of original documents; and
(c) Lessee shall provide certification by Lessee’s Director of Quality Assurance that the electronic documentation was maintained in accordance with the Aeronautics Authority approved procedures as set forth in clause (b) above.
12.6. Performance of Maintenance. All Maintenance Checks, including the Final Check, shall be accomplished only at Approved Maintenance Organisations which shall be approved by Lessor, acting reasonably, in writing prior to the commencement of such Maintenance Check, such approval not to be unreasonably withheld. All other maintenance on the Aircraft will be performed by Lessee using personnel that are approved and appropriately certified by the Aeronautics Authority to perform such maintenance. Notwithstanding the preceding, at any time during the Lease Term, Lessee may provide Lessor with a list of Approved Maintenance Organisations that Lessee plans to use, and unless Lessor notifies Lessee in writing of its objection to any such Approved Maintenance Organisation at least thirty (30) days prior to the commencement of any Maintenance Check, such Maintenance Check may nevertheless be accomplished at such Approved Maintenance Organisation objected to by Lessor and such Approved Maintenance Organisation shall be deemed to be approved by Lessor for the accomplishment of such Maintenance Check, but otherwise such Approved Maintenance Organisation objected to by Lessor shall no longer be deemed to be approved.

	  	26	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

12.7. Alterations, Modifications and Additions.
(a) Required Alterations, Modifications and Additions. Lessee, at its own cost and expense, shall make such alterations, modifications and additions to the Aircraft and any Items of Equipment as may be required from time to time to comply with:
(i) all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (1) is applicable to the respective Item of Equipment and (2) specify compliance during the Lease Term;
(ii) Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be performed in strict accordance with such AD and without application or utilisation of any alternate method of compliance; and
(iii) all Laws of the Aeronautics Authority which require compliance during the Lease Term.
(b) Discretionary Alterations, Modifications and Additions.
(i) Except as set forth in the preceding clause (a) or the following clause (ii), Lessee shall not make any alteration, modification or addition to the Aircraft or any Item of Equipment (including, but not limited to, galleys, lavatories, avionics or Engines) without the prior written consent of Lessor, which consent shall not be unreasonably withheld and shall be deemed given in the absence of a response within ten (10) Business Days following Lessor’s receipt of Lessee’s written request.
(ii) Notwithstanding the provisions of the preceding clause (i), Lessor’s consent shall not be required for any discretionary alteration, modification or addition that Lessee wishes to perform to the Aircraft provided that any such alteration, modification or addition does not require or result in a modification to the Aircraft structure or electrical wiring system, and is:
(A) for the installation of additional or enhanced Items of Equipment (and not in substitution for the same, unless replacing a Part with another Part that is of a higher modification status); or
(B) cosmetic (and non-structural) in nature in order for Lessee to display its name, logo or other identification or advertising; or
(C) to the Aircraft interior configuration that (1) utilises the existing seat track system (without modification), (2) does not require the addition to, removal of or modification of any Aircraft structure, (3) does not impair the value or utility of the Aircraft or any Item of Equipment or adversely affect compliance with the type certificate data sheet of the Aircraft, and (4) does not cause any change in the category or status of the Aircraft as defined by the Manufacturer.

	  	27	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

(c) Removed Items – Title and Risk of Loss. Subject to the provisions of Sections 12.8 and 12.9, title to any and all Items of Equipment removed from the Aircraft shall remain with Owner and risk of loss or damage to the same shall remain with Lessee during the Lease Term and Lessee shall keep, store and maintain the same in accordance with Manufacturer’s published procedures or written recommendations of the Manufacturer and standard industry practice (including the issuance of a Certificating Authority Form at the time of removal) for subsequent reinstallation or, at Lessor’s option, return to Lessor on the Termination Date.
(d) De-Modification of Aircraft. Subject to the provisions of Sections 12.8 and 12.9, at Lessor’s option (unless otherwise agreed in writing by Lessor and Lessee), Lessee shall, in connection with Return, de-modify and restore the Aircraft to the condition and configuration it was in prior to the accomplishment of any alterations, modifications or additions performed in accordance with this Section 12.7, assuming such condition was in compliance with the terms of this Lease, notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i), if the same is provided, or otherwise.
12.8. Replacement of Parts. Lessee, at its own cost and expense, shall promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall as promptly as practicable either reinstall such Part or replace such Part pursuant to the terms of this Article 12. Each replacement part prior to installation in the Aircraft or any Item of Equipment:
(a) shall be free and clear of all Liens (other than Permitted Liens);
(b) shall be in as good operating condition and shall have a value, utility, maintenance, modification and repair status at least equal to the Part replaced, assuming such replaced Part was in the condition and repair required to be maintained by the terms hereof;
(c) shall have documentation evidencing compliance with all applicable Certificating Authority and Aeronautics Authority requirements, including, without limitation (but to the extent applicable):
(i) a Certificating Authority Form and, if not indicated on such form, a teardown report indicating time since Overhaul and a description of work accomplished with respect to such part by an Approved Maintenance Organisation;
(ii) Overhaul records with respect to Parts replacing Time Controlled Parts;
(iii) documentation of modification status and compliance with Airworthiness Directives; and

	  	28	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

(iv) any other appropriate documentation applicable to the maintenance and repair status of such part; and
(d) shall:
(i) have the same part number and be of the same Manufacturer as the replaced Part (an “ OEM Part ”), except (x) to the extent the Manufacturer has superseded the part number of such OEM Part, and in such an event the superseding part number shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual or a Required Approval or (y) if such OEM Part is no longer commercially available, an equivalent part with a different part number or from a different manufacturer shall be acceptable, and (z) non-OEM Parts manufactured by alternate manufacturers may be used to replace airframe consumable items, cosmetic items and standard hardware in the passenger cabin of the Aircraft, provided, however, each of sub-clauses (y) and (z) herein with respect to such equivalent parts or non-OEM Parts shall be subject to the approval of both the Airframe Manufacturer and the EASA for installation of such parts on the Aircraft;
(ii) with respect to Time Controlled Parts, have not accumulated more time since new (and time since Overhaul if such replaced Part has previously been Overhauled) than that of the replaced Part.
12.9. Title to Parts.
(a) Parts Replacement in Connection with Maintenance. Any Part removed from the Airframe or any Item of Equipment shall remain the property of Owner and subject to this Lease, no matter where located, until such time as such Part shall be replaced by a part which has been incorporated or installed in or attached to the Aircraft or an Item of Equipment pursuant to the requirements for replacement parts specified in Section 12.8 and title to such replacement part has been vested in Owner. Except as set forth in Section 12.10, immediately upon any replacement part becoming incorporated, installed or attached to the Aircraft or an Item of Equipment as provided above, such part shall become the property of Owner, title to such replacement part shall immediately vest in Owner and such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. Once the replacement part has become subject to this Lease, title to the Part so replaced shall immediately vest in Lessee.
(b) Parts Replacement in Connection with Discretionary Alterations, etc. So long as no Default or Event of Default shall have occurred and be continuing, at any time during the Lease Term, Lessee may remove any Part from an Item of Equipment that was installed pursuant to Lessee’s accomplishment of an alteration, modification or addition pursuant to Section 12.7(b), provided that:
(i) such Part is in addition to and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to such Item at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part;

	  	29	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

(ii) such Part is not required to be incorporated or installed in or attached or added to such Item pursuant to the terms hereof;
(iii) such Part can be removed from such Item without diminishing or impairing the value, utility or airworthiness which such Item would have had at such time had such alteration, modification or addition not occurred; and
(iv) such Part is not required to be installed on or attached to such Item of Equipment by the Aeronautics Authority or the Certificating Authority in order to maintain the airworthiness certification of the Aircraft for passenger operation.
Upon removal of any such Parts, Lessee shall restore the area where such Part was removed so that it is in the condition it would have been had such Part not been installed, assuming such condition was in compliance with the terms of this Lease, and so that such removal is undetectable. Title to any Part not removed by Lessee as above provided prior to the return of the respective Item of Equipment to Lessor hereunder shall remain with Owner.
12.10. Temporary Replacement of Parts. Provided no Event of Default has occurred and is continuing, at any time during the Lease Term, any Part incorporated or installed in or attached or added to any Item of Equipment may be replaced temporarily with a part which does not satisfy the requirements of Section 12.8; provided that:
(a) there shall not have been readily or economically available to Lessee at the time and in the place that such substitute or replacement part was required to be installed on the Airframe or Engine a replacement part complying with the requirements of Section 12.8;
(b) it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee as an airline (as determined by Lessee) to have grounded the Aircraft until such time as a replacement part complying with the requirements of Section 12.8 became available for installation on the Aircraft;
(c) as soon as practicable after installation of the same on the Airframe or Engine (and in any event no later than the earliest to occur of (i) the first C-Check following such installation, (ii) the Scheduled Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the requirements of Section 12.8 and replace the same with a part complying with such requirements.
Upon the replacement by Lessee of any such non-conforming part pursuant to the foregoing clause (c), title to such replacement part shall, without further act, vest in Owner and such part shall be deemed a Part hereunder.
12.11. Exchanging Parts. Any Part removed from the Aircraft or any Item of Equipment in the course of performance of maintenance on the same may be subjected by Lessee to normal exchanges customary in the airline industry in the ordinary course of Lessee’s business provided that ( x ) the parts replacing such removed Parts are incorporated, installed in or attached to the Aircraft or such Item of Equipment promptly following the removal of such Parts, and ( y ) all applicable requirements of the Aeronautics Authority and the Certificating Authority shall be adhered to with respect to all such Parts being incorporated, installed, or attached, whether or not such

	  	30	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

Part was originally removed from the Aircraft or any Item of Equipment or is a replacement for any such removed Part. Lessee shall, whether or not such exchanged part is owned by Lessee at the time such exchange is completed, comply or ensure the continued compliance with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to installation of the same into the Aircraft or any Item of Equipment.
12.12. Temporary Attachment and Removal of Engines.
(a) Installation of Other Engines.
(i) In the course of performance of Lessee’s Obligations under this Lease, Lessee may temporarily remove an Engine from the Airframe and install an engine on the Airframe that is owned by Lessee or which is subject to a lease, conditional sale agreement, trust indenture or other security agreement, provided that such other engine is ( x ) free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such engine and as the same are otherwise permitted to exist pursuant to Section 17.7, and ( y ) Lessee, or if Lessee is not the owner of the engine, the lessor, conditional seller, indenture trustee or secured party of any such engine agrees in writing in a form satisfactory to Lessor, acting reasonably, and which agreement may be set forth in the relevant lease, conditional sale agreement, mortgage, indenture or security agreement, that it will not acquire or claim, as against Lessor, any right, title or interest in or any adverse right, title or interest to the Airframe or any Item of Equipment as the result of any such engine being installed on the Airframe. Lessor agrees for the benefit of any such owner, lessor, conditional seller or secured party that, subject to such Person’s agreement as set forth above, Lessor shall not claim any interest in any such engine by virtue of its installation on the Airframe. If any of the respective interests of Lessor, Owner or any relevant Financing Party in any Item of Equipment is materially impaired by virtue of installation of such engine on the Airframe, Lessee shall promptly, following receipt of written notice from Lessor to such effect, remove such engine from the Airframe, failing which such impairment or adverse effect will be deemed an Event of Default pursuant to Section 23(k).
(ii) Lessee shall comply with the requirements of Section 19.4(c) for as long as such engine is installed on the Airframe and the engine shall be removed from the Airframe and the removed Engine reinstalled on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not later than the Termination Date.
(b) Installation of Engines on other Airframes. Provided no Event of Default has occurred and is continuing, Lessee may install an Engine removed from the Airframe on any other airframe of the same type operated by and in Lessee’s fleet of aircraft, but only if:
(i) Lessee has title to such other airframe and such airframe is free and clear of all Liens (except as the same are permitted to exist pursuant to Section 17.7); or
(ii) such other airframe is leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement, provided that (A) such airframe is free and clear of all Liens except the rights of the parties to the lease or conditional sale or other

	  	31	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

security agreement covering such airframe and as the same are otherwise permitted to exist pursuant to Section 17.7, and (B) there shall be in effect a written recognition of rights agreement of the lessor or secured party of such airframe substantially in the form appearing in Appendix 8 or substantially similar agreement to the effect that such lessor, conditional seller or secured party will not claim any interest in the Engine by virtue of such Engine being installed on such airframe, and which agreement may be set forth in any relevant lease, conditional sale agreement, mortgage or security agreement. If any of the respective interests of Lessor or any relevant Financing Party in an Engine is materially impaired by virtue of installation on any such other airframe, Lessee shall promptly remove such Engine from such other airframe, failing which such impairment or adverse effect will be deemed an Event of Default under Section 23(k) or in the event such continued installation of such Engine on such airframe has resulted in loss of title to the Engine by Lessor, an Engine Loss;
and in either case, Lessee shall comply with the requirements of Section 19.4 for as long as such Engine is installed on such other airframe and the Engine shall be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not less than thirty (30) days prior to the Scheduled Termination Date.
12.13. Installation of Items of Equipment on Other Aircraft. Subject to the preceding provisions of this Article 12, Lessee may permit any Item (excluding Landing Gear) to be installed on another aircraft solely to the extent such aircraft is within Lessee’s fleet of aircraft; provided, however, upon the occurrence and continuation of an Event of Default following the removal of any such Item from the Aircraft, Lessee shall promptly, but in no event later than ten (10) Business Days following such Event of Default:
(a) reinstall on the Aircraft each such Item not then currently installed thereon, assuming such Item is in airworthy condition, or
(b) in the event such Item is not in an airworthy condition, such Item shall be restored promptly to an airworthy condition and reinstalled on the Aircraft or, in the case of a Part, such Part may be exchanged in accordance with Section 12.11.
12.14. Failure to Reinstall Engines and Items of Equipment on the Aircraft. If (a) an Event of Default has occurred and is continuing which is the result of Lessee’s failure to make any payments when due or failure to maintain the airworthiness of the Items of Equipment, and (b) Lessee fails to comply with the requirements set forth in Sections 12.12 and 12.13, then in such instance and in recognition of the higher credit risk to which an aircraft lessor is exposed when an Engine, APU, or Part has been removed from an aircraft at a time when a Default or an Event of Default has occurred and is continuing, Lessee shall pay to Lessor an additional rental charge, incurred as Supplemental Rent and not as a penalty, in the amount of (X) ***** for each Engine, (Y) ***** for the APU, and (Z) ***** of the replacement cost for any Part, for each day each such Engine, APU or Part, as the case may be, remains in noncompliance with Sections 12.12 or 12.13, as the case may be.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	32	  	ARTICLE 12	
	  		  	MAINTENANCE, MODIFICATION AND	
	  		  	OPERATION OF THE AIRCRAFT	

13. MAINTENANCE RESERVES
13.1. Maintenance Reserves. Lessee shall make payments to Lessor in respect of the Maintenance Reserves in accordance with Appendix 2C, on a monthly basis, within ten (10) days following the last day of each Calendar Month, with the first payment due ten (10) days following the first full Calendar Month of the Lease Term; provided that Lessee’s final payment in respect of Maintenance Reserves shall be made on the Termination Date.
13.2. Discrepancies. If Lessee’s actual utilisation of the Aircraft is greater than Lessee’s utilisation of the Aircraft reported to Lessor in accordance with Article 16, Lessee shall make up any deficiency payments in respect of Maintenance Reserves to Lessor within three (3) Business Days of the date of receipt of written notice from Lessor.
13.3. Rights in Maintenance Reserves.
(a) All amounts paid by Lessee in respect of Maintenance Reserves are the sole and exclusive property of Lessor and Lessor shall be entitled to freely commingle such moneys with its several funds and deal with such moneys as Lessor sees fit. Notwithstanding such stated intent, if and to the extent that the Maintenance Reserves or any part thereof, under any applicable Law or otherwise, are determined to be security deposits or otherwise the property of Lessee or if it is so determined those monies are a debt owed to Lessee or that Lessee shall have any interest in those monies, Lessee and Lessor agree that subclauses (i) and (ii) below shall apply.
(i) Pursuant to applicable Law, Lessee hereby grants to Lessor a first and prior perfected Lien and possessory security interest in the Maintenance Reserves as security for Lessee’s Obligations, including, without limitation, the obligations of Lessee to maintain and return the Aircraft and each Item of Equipment in the condition required by this Lease. Lessee agrees to execute and file, at Lessee’s expense, with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
(ii) Lessee shall not assign, hypothecate or otherwise transfer its interests, if any, in the Maintenance Reserves.
(b) Upon and during the continuance of an Event of Default, and in addition to all other rights Lessor may have under this Lease under applicable Law, Lessor may use, apply or retain all or any portion of the Maintenance Reserves, and, without limitation, Lessor may immediately or at any time thereafter, while any Event of Default is continuing, without prior notice to Lessee ( x ) offset all or any part of the Obligations or Related Obligations against the liabilities of Lessor in respect of any obligations of Lessor or Affiliate of Lessor under any Related Lease, or ( y ) apply the Maintenance Reserves in or towards the payment or discharge of the Obligations or Related Obligations in such order as Lessor reasonably sees fit. If Lessor uses or applies all or any portion of such Maintenance Reserves, such application shall not be deemed a cure of any Default or Event of Default unless and until Lessee shall have, and Lessee shall

	  	33	  	ARTICLE 13	
	  		  	MAINTENANCE RESERVES	

within three (3) Business Days after written demand therefor deposit with Lessor in cash an amount sufficient to fully restore each such Maintenance Reserve account to its original sum prior to such application plus any amount then due and payable by Lessee in respect of Maintenance Reserves.
13.4. Claims for Reimbursement - Timing. Any claim by Lessee for reimbursement from the Maintenance Reserves made pursuant to this Lease shall be made within the earlier to occur of ( x ) one hundred eighty (180) days following the completion date of the Maintenance Check for which such claim is being made and ( y ) the Termination Date, provided that notification by Lessee to Lessor on or before the Termination Date that a claim exists and will be submitted no later than 180 days following completion of the respective Maintenance Check shall be deemed as complying with the timing requirement set forth herein. Should Lessee fail to make such claim within such time period (or agree with Lessor in writing concerning an alternate disposition for such claim), Lessee shall thereafter be forever barred and estopped from making a claim in respect of such maintenance.

	  	34	  	ARTICLE 13	
	  		  	MAINTENANCE RESERVES	

14. MANUFACTURERS’ WARRANTIES AND TRAINING SUPPORT
14.1. Assignable Warranties . At Delivery, Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by the Airframe Manufacturer and the Engine Manufacturer pursuant to airframe and engine warranty assignment agreements in form and substance satisfactory to Lessee, Lessor and such Manufacturer. In addition, at Delivery Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by any other Manufacturer, and at Lessee’s cost, Lessor shall cooperate with Lessee in respect of the enforcement of any such warranties.
14.2. Reassignment; Assignment of Lessee Warranties . On the Termination Date:
(a) the benefit of any warranty and other rights assigned or made available by Lessor to Lessee pursuant to this Lease will be reassigned automatically and without further act or writing to Lessor; provided that upon the occurrence and continuation of an Event of Default, Lessor may instruct any Manufacturer of any Item of Equipment to make any payments of monies under any warranty claims made by Lessee directly to Lessor for further credit to Lessee upon and subject to Lessee’s cure of such Event of Default; and
(b) Lessee shall assign and shall be deemed to have assigned to Lessor on and as of the Termination Date, at no charge to Lessor, any and all warranties Lessee has obtained in connection with any maintenance or services performed on the Aircraft or any Item of Equipment during the Lease Term.
14.3. Warranty Claims . Lessee will diligently and promptly pursue any valid claims it may have under the warranties assigned to it hereunder with respect to the Aircraft and other Items of Equipment. At the written request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of ( x ) fourteen (14) days prior to the Scheduled Termination Date and ( y ) the Termination Date of all such warranty claims made by Lessee during the Lease Term to the extent historical records of the same are maintained by Lessee (except to the extent such information shall have previously been provided to Lessor).
14.4. Training Support . At Delivery Lessor will assign and make available to Lessee the following training support from the Airframe and/or Engine Manufacturers as such training support may be available to Lessor with respect to the Aircraft:
 
 	(i)	Two (2) flight crew transition courses consisting of one (1) captain and one (1) first officer per crew; and	
 
 	(ii)	One Hundred (100) trainee days of maintenance training.	

	  	35	  	ARTICLE 14	
	  		  	MANUFACTURERS’ WARRANTIES	

15. SUBLEASING AND WET LEASING
15.1. Subleasing. Provided no Default or Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Permitted Subleases for the Aircraft with Permitted Sublessees provided that:
(a) the term of such Permitted Sublease is not for a period exceeding the Lease Term and shall expressly prohibit sub-subleasing of the Aircraft and any Item of Equipment independent of the Airframe;
(b) the rights of the Permitted Sublessee under such Permitted Sublease are at all times expressly subject and subordinate to the rights of Lessor hereunder and to the respective interests of Owner, Owner Participant and any Financing Parties and shall contain a provision substantially to the effect of:
“Anything in this sublease to the contrary notwithstanding, the sublessee’s rights hereunder to the possession, use and enjoyment of the Airframe, and if attached to the Airframe at the commencement of the sublease or if subsequently delivered to sublessee during the term of the sublease, the Engines in accordance with the terms hereof shall be subject to the Aircraft Lease Agreement dated as of 09 November 2010 (the ‘ Primary Lease ’) between Wilmington Trust SP Services (Dublin) Limited, as lessor (the ‘ Primary Lessor ’), and the sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the sublessee confirms and agrees that this sublease is in all respects subject and subordinate to the Primary Lease. Upon notice to the sublessee hereunder by the Primary Lessor that an Event of Default (as defined in the Primary Lease) has occurred and is continuing, and that the Primary Lease shall have been cancelled or terminated pursuant to the terms thereof, the Primary Lessor may, at its option, by written notice to the sublessee after the date of such cancellation or termination:
 
 	(i)	require the sublessee to enter into an agreement, in form and substance satisfactory to the Primary Lessor, recognising the Primary Lessor, as the sublessor hereunder and reconfirming all of the obligations of the sublessee hereunder, or	
 
 	(ii)	terminate this sublease and require prompt delivery by the sublessee of the Aircraft to the Primary Lessor, in accordance with the return provisions of this sublease.	
Unless the sublessee shall have received any such written notice from the Primary Lessor requiring attornment or terminating this sublease, the sublessee shall be and remain fully obligated hereunder notwithstanding the continuance of any Event of Default under the Primary Lease or the termination or cancellation thereof pursuant to the terms thereof.”;
(c) Lessee causes the Permitted Sublessee under the Permitted Sublease to deliver to and for the benefit of Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease a supplemental power of attorney for deregistration of the Aircraft in the form delivered by Lessee to Lessor at Delivery;

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	  		  	SUBLEASING AND WET LEASING	

(d) Lessee and such Permitted Sublessee shall not enter into any amendments, modifications, waivers or the like of any provision of the Permitted Sublease without Lessor’s prior written consent and should such consent be granted, Lessee shall deliver to Lessor a copy of any such duly executed agreements between Lessee and such Permitted Sublessee in connection with the same;
(e) if necessary, Lessee and Permitted Sublessee shall authorise the filing of and deliver documents appropriate for perfection filings in the State of Registration and such other jurisdictions as Lessor, in good faith, deems reasonable and appropriate, in form and substance satisfactory to Lessor, covering the interests of Lessee and such Permitted Sublessee under such Permitted Sublease, together with any other documents requested by Lessor to protect or perfect the interest of Lessor, Owner, Owner Participant and any Financing Parties in the Permitted Sublease in the State of Registration and/or such other jurisdictions;
(f) Lessee shall assign each Permitted Sublease and all rights and security deposits and maintenance and other reserves received thereunder to Lessor pursuant to a security assignment of the Permitted Sublease together with a consent and agreement of the Permitted Sublessee, each in form and substance satisfactory to Lessor and, if applicable, Owner, Owner Participant and each Financing Party, as security for Lessee’s Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding the enforceability and perfection of the Permitted Sublease and such assignments for security and the consent and agreement or other assurances reasonably satisfactory to Lessor;
(g) the provisions of each Permitted Sublease shall provide for benefits and protections to Lessee, as sublessor, which are (in respect of material terms and in the aggregate) not less advantageous to Lessee, as sublessor, than the benefits and protections provided to Lessor by the provisions of this Lease;
(h) Lessee shall ( x ) notify Lessor of the terms of each Permitted Sublease (and provide copies of the final drafts thereof) not less than fifteen (15) Business Days prior to the execution of such Permitted Sublease, and ( y ) furnish the “original” copy of such Permitted Sublease to Lessor as soon as possible after the execution thereof, but in any event prior to the delivery of the Aircraft to such Permitted Sublessee; and
(i) neither Lessee nor Permitted Sublessee shall register any Permitted Sublease on the International Registry without Lessor’s prior consent, which consent shall not be unreasonably withheld.
15.2. Wet Leasing. Provided no Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Wet Leases for the Aircraft to any Person provided that:
(a) the rights of the lessee under the Wet Lease are at all times expressly subject to and subordinate to, and do not conflict in any respect with (or give such wet lessee any rights greater than the rights of Lessee under), the terms of this Lease and the rights of Lessor hereunder and the respective interests of Owner, Owner Participant and any Financing Party;

	  	37	  	ARTICLE 15	
	  		  	SUBLEASING AND WET LEASING	

(b) Lessee provides Lessor with ( x ) a certified copy of the applicable provisions from the Wet Lease or an officer’s certificate indicating whether Lessee or the wet lessee under the Wet Lease will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the Wet Lease, and ( y ) a certified copy or original of an insurance certificate and broker’s letter of undertaking confirming the maintenance of insurance coverage required by this Lease; and
(c) in any event, unless otherwise agreed by Lessor in writing, the term of such Wet Lease ends on a day not later than thirty (30) days prior to the Scheduled Termination Date.
15.3. No Independent Subleasing of Items of Equipment. No Item of Equipment may be subleased independently from the Aircraft.
15.4. Expenses. Lessee shall pay or reimburse, without duplication, Lessor, Owner, Owner Participant, Servicer, Security Trustee and any other Financing Party on demand for their respective, documented, out of pocket costs and expenses reasonably incurred in connection with the review, negotiation and consummation of the transactions contemplated by any Permitted Sublease or Wet Lease.
15.5. Lessee Remains Liable. Lessee shall remain primarily and fully responsible and liable for the performance of its Obligations under, and the observance of the terms of this Lease and the Operative Documents, notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted Sublease or Wet Lease had not occurred.

	  	38	  	ARTICLE 15	
	  		  	SUBLEASING AND WET LEASING	

16. REPORTING AND INSPECTIONS
16.1. Financial Reporting. Lessee agrees to furnish to Lessor the following, which shall be deemed Information:
(a) Semi-Annual Statements. As soon as reasonably practicable after the end of the second and fourth quarterly fiscal periods in each fiscal year of Lessee, and in any event within one hundred twenty (120) days thereafter, duplicate copies, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such six month period;
(ii) consolidated statements of income and retained earnings of Lessee or Guarantor for such six month period; and
(iii) consolidated statements of cash flow of Lessee or Guarantor for the portion of the fiscal year ending with such six month period.
(b) Annual Statements. As soon as practicable after the end of each fiscal year, and in any event within one hundred eighty (180) days thereafter, a copy, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such year, and
(ii) consolidated statements of income and retained earnings and of cash flow of Lessee or Guarantor for such year, prepared in accordance with GAAP (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognised standing in Lessee’s State of Organisation (which report may be adverse, qualified or disclaim an opinion).
(c) Comparison. All statements furnished under clauses (a) or (b) above shall set forth in comparative form the amount for the end of the corresponding fiscal year, or corresponding period of the preceding fiscal year, as the case may be.
(d) Satisfaction by Publication. Lessee’s obligations under Sections 16.1(a) through (c) above shall be deemed satisfied should Lessee or Guarantor publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee thereunder, and further notify Lessor in writing of the website address.
(e) Notice of Proceedings. Prompt notice of any litigation or arbitral proceedings not covered by insurance (except for deductibles standard in the airline industry) and of all proceedings by or before any Governmental Authority (i) which might adversely affect Owner’s ownership or Owner’s or Lessor’s other interests in the Aircraft, (ii) which relate to the Aircraft and where the amount involved not covered by insurance is in excess ***** or (iii) which might, in the reasonable and good faith judgment of Lessee, have a material adverse effect on the ability of Lessee to perform the Obligations.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	39	  	ARTICLE 16	
	  		  	REPORTING AND INSPECTIONS	

(f) Additional Information. Lessee will furnish to Lessor (i) unless available on a website generally available free of charge to the public, promptly after the same has been made public, a copy of any announcement released by Lessee to any stock exchange on which Lessee is publicly traded by shares (if applicable), and (ii) a copy of any other information concerning Lessee’s business which Lessee releases or otherwise makes available to its creditors generally.
16.2. Aircraft Utilisation and Other Reporting/Information. During the Lease Term, Lessee agrees to furnish to Lessor the following information in connection with Lessee’s utilisation of the Aircraft:
(a) (i) within ten (10) days following the last day of the first full Calendar Month and each subsequent Calendar Month during the Lease Term, and (ii) on the Termination Date, a utilisation report in the form appearing in Appendix 8 reporting the utilisation of the Items of Equipment set forth therein for the immediately preceding Calendar Month or part thereof;
(b) as promptly as reasonably practicable, but in no event later than the date of issuance of the next monthly utilisation report following the date of the removal of any Engine, Landing Gear or APU, advising of (i) the reason for such removal, (ii) the location of such Item of Equipment, (iii) the total accumulated Flight Hours and Cycles of such Item of Equipment (or total APU Hours with respect to the APU), (iv) the Flight Hours and Cycles accumulated since the most recent Engine Restoration with respect to any Engine or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the APU Hours accumulated since the most recent Overhaul with respect to the APU, and (vi) the intended workscope, in each case, as applicable;
(c) written notice of and information of any accident or incident with respect to any Item of Equipment (other than Parts) as promptly as possible, and in any event within two (2) Business Days following the occurrence or detection thereof;
(d) within a reasonable time (but not less than ten (10) days) prior to the commencement date for any Maintenance Check and in accordance with Section 12.6, the identity of the Approved Maintenance Organisation Lessee intends to have perform such check together with a copy of the workscope intended to be accomplished in connection with the same, to the extent available; and
(e) upon written request of Lessor, a copy of the Maintenance Program, inclusive of all revisions issued as of the date of such request. Lessor agrees not to disclose such Maintenance Program to any Person (other than Lessor’s employees and consultants, who shall be instructed not to disclose the same other than as permitted by this Section 16.2(e)) except as necessary to bridge the Maintenance Program onto another maintenance program following the Termination of the Lease, and shall require any Person to whom it shall disclose the same as permitted by this Section 16.2(e), to agree in writing not to disclose the contents of such Maintenance Program.
16.3. Further Information; Inspections.
(a) Lessee shall provide to Lessor, following Lessor’s written request during the Lease Term (provided that long as no Event of Default has occurred and is continuing, such requests shall be made no more than once per year) and within one hundred eighty (180) days following the Termination Date, a list of the airports to which Lessee has operated the Aircraft during the (i) twelve (12) months preceding such request (or the Termination Date, if applicable).

	  	40	  	ARTICLE 16	
	  		  	REPORTING AND INSPECTIONS	

(b) During the Lease Term, Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Items of Equipment as Lessor may reasonably request.
(c) Lessee shall permit any Person (including prospective purchasers, financiers or lessees of the Aircraft) designated in writing by Lessor, to visit and inspect (at any reasonable time, provided that, so long as no Event of Default has occurred and is continuing, such inspection shall not unreasonably interfere with Lessee’s business, maintenance or operational commitments) the Items of Equipment, their condition, use and operation and the records maintained in connection therewith and, at Lessor’s cost, to make copies of such records as Lessor may reasonably designate (unless an Event of Default has occurred and is continuing, in which case such copies shall be provided to Lessor at Lessee’s cost).
(d) Lessor shall be permitted to have representatives and/or agents present throughout the accomplishment of Maintenance Checks to observe all aspects of the same including, but not limited to, the workscope thereof; provided, however, that such representatives and agents shall not interfere with such Maintenance Checks and shall be bound by all rules and regulations of the relevant maintenance provider. Neither Lessor nor any person designated by Lessor shall have any duty to make any such inspection and none shall incur any liability or obligation by reason of making or not making such inspection.
16.4. Technical Report Prior to Return of Aircraft.
(a) Twenty (20) months prior to the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance status report detailing the information in the form appearing in Appendix 8.
(b) At Lessor’s written request, Lessee will make copies available of (i) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at Return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) Time Controlled Part listings and current maintenance status of each, (v) a list of modifications and alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior material burn certificates, (vii) the complete workscope for the Maintenance Checks and other work to be performed prior to Return, (viii) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from any Manufacturer, (ix) current Engine disk sheets and a description of the work accomplished during the last shop visit for each Engine and (x) any other data which is reasonably requested by Lessor in connection with any of the foregoing.

	  	41	  	ARTICLE 16	
	  		  	REPORTING AND INSPECTIONS	

17. REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS
17.1. Registration. At Delivery, Lessee shall register the Aircraft (or shall cause the same to be registered) with the Register in the State of Registration with the respective interests of Owner, Lessor and the Security Trustee and any relevant Financing Party recorded to the fullest extent permitted by applicable Law in the State of Registration and shall thereafter maintain such registration throughout the Lease Term. Lessor and Owner shall cooperate and shall cause Servicer, Owner Participant, Security Trustee and any Financing Party to cooperate with Lessee in effecting and maintaining such registration and shall provide to Lessee such documents as Lessee may reasonably request in connection therewith. Lessee shall not take or permit any action inconsistent with the continued registration of the Aircraft or the recordation of the various interests of Lessor, Owner and any Financing Party therein with the Register.
17.2. Identification Plates. Lessee shall, throughout the Lease Term, maintain in respect of the Airframe, the APU and each Engine a fireproof identification plate of a reasonable size, in a clearly visible place in the cockpit of the Aircraft (or in the vicinity of the Airframe Manufacturer’s data plate) and in close proximity to the Manufacturer’s data plate on each Engine and the APU, that contains the legend in writing appearing in Appendix 2B. Lessee shall not remove, or cause or permit the removal or modification of such identification plate without Lessor’s prior written consent. Lessee shall not allow the name of any other Person (with the exception of Lessee) to be placed on the Airframe or any Engine as a designation that might be interpreted as a claim of ownership or of any interest therein. Lessee shall promptly replace any such nameplate that becomes illegible, lost, damaged or destroyed for any reason. If at any time Lessor and/or Owner transfer their respective interests in the Aircraft or this Lease as permitted hereunder or Lessor or Owner finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost, promptly affix such new nameplates to the Airframe and the Engines as may be required by Lessor.
17.3. Aeronautics Authority Acknowledgment. If and to the extent that the same is customarily available in the State of Registration, Lessee shall use reasonable efforts to obtain and deliver to Lessor at Delivery, a letter from the Aeronautics Authority addressed to Lessor and (if so requested by Lessor) Owner and/or any Financing Party confirming that it will recognise Owner’s title to the Aircraft and the respective rights of Lessor, Owner and/or such Financing Party to deregister the Aircraft upon the cancellation, termination or expiration of the leasing of the Aircraft hereunder in accordance with the provisions hereof.
17.4. Authorisation to Make Perfection Filings. The execution of this Lease by the parties hereto constitutes the authorisation by Lessee to Lessor’s legal counsel to make such perfection filings as Lessor and its counsel deem necessary or desirable to protect the interest of Lessor, Owner and any Financing Party hereunder. From time to time on reasonable written request made by Lessor, Lessee shall provide to Lessor a letter on the letterhead of Lessee, in form and substance reasonably satisfactory to Lessor and executed by an officer of Lessee, authorising such Persons as Lessor may specify to make such perfection filings as Lessor reasonably deems necessary or desirable to protect the interests of Lessor, Owner or any Financing Party hereunder.

	  	42	  	ARTICLE 17	
	  		  	REGISTRATION; PERFECTION OF	
	  		  	OWNER’S TITLE; LIENS	

17.5. Perfection of Title.
(a) Lessee shall, together with Owner, Owner Participant, Security Trustee and/or Lessor, cause, or, at Lessor’s request, assist Lessor in causing, this Lease, the Lease Supplement and any and all additional instruments which shall be executed pursuant to the terms hereof as permitted by applicable Law, to be kept, filed and recorded in the offices of any Governmental Authorities in the State of Registration as required by the Register, any applicable Aeronautics Authority and any applicable Law. Lessee shall not take any action which would conflict with or adversely affect such filings and recordation of the Lease and such other documents as provided herein.
(b) If at any time subsequent to the initial recordation under the preceding clause (a), any filing or recording is reasonably necessary or desirable to protect the interests of Lessor, Owner Participant, Security Trustee and/or Owner, Lessee, upon written request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded or, as necessary to be re-filed and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor, Owner Participant, Security Trustee and Owner hereunder and in the Aircraft or any Item of Equipment. At the reasonable request of Lessor and at Lessor’s cost, Lessee shall furnish to Lessor, Owner (if not Lessor), Owner Participant and Security Trustee an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation.
(c) Without limiting the foregoing, Lessee shall do or cause to be done any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and interests of Owner, Owner Participant, Security Trustee and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee does, or is reasonably likely to, operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Owner’s and Owner Participant’s ownership rights regarding the Aircraft within any such jurisdiction.
17.6. Cape Town Convention.
(a) Lessee shall promptly make or approve registrations, filings and recordings, and/or do or cause to be done such additional acts and things which may be reasonably requested by Lessor (for itself or for and on behalf of Owner and any Financing Party) as being required by or advisable under applicable law, in order (x) that the Operative Documents effectively constitute international interests, while retaining the commercial and business agreements of the parties as described therein in any such new Operative Documents, and provide to the such parties the full benefit of the Cape Town Convention with respect to the Aircraft and the Engines, and (y) the Operative Documents contain such provisions as may be necessary to confirm the commercial and business agreements of the parties therein to the greatest extent permitted under the Cape Town Convention, including, without limitation, with respect to:

	  	43	  	ARTICLE 17	
	  		  	REGISTRATION; PERFECTION OF	
	  		  	OWNER’S TITLE; LIENS	

(i) matters concerning the documentation and registration in the International Registry of international interest(s) or prospective international interest(s) which are, or may be, vested in Lessor, Owner or any Financing Party under this Lease or any other Operative Documents and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(ii) matters concerning sales and prospective sales which are required or permitted by this Lease or the other Operative Documents, including with respect to documentation and registration in the International Registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iii) matters concerning any assignment of associated rights or prospective assignment of associated rights which is required or permitted or constituted by this Lease or any other Operative Document, the documentation and registration thereof in the international registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iv) delivery and recording with the Register of an irrevocable de-registration and export request authorisation substantially in the form annexed to the Protocol, which may be exercised only after the occurrence and during the continuance of an Event of Default; and
(v) subject to the preceding and the following provisions of this Section 17.6, including or excluding in writing the application of any provisions of the Cape Town Convention and/or the Protocol that Lessor (for itself or acting for an on behalf of Owner or any Financing Party), acting reasonably may deem advisable in connection with the foregoing.
(b) In addition to the remedies set forth in this Lease or as may otherwise be available to Lessor, Owner or any Financing Party under any other Operative Documents, at law or in equity, upon the occurrence and during the continuation of an Event of Default, Lessor and/or Owner may, but shall not be obligated to, exercise any remedy available to it under the Cape Town Convention and/or the Protocol (subject, in each case to the requirements and limitations of the Cape Town Convention and the Protocol and to the requirements and limitations imposed by the State of Registration in relation to the Cape Town Convention and Protocol), including:
(i) the remedies set forth in Articles 8, 9 and 34 of the Cape Town Convention and Article IX(1) of the Protocol;
(ii) relief pending final determination under Article 13 of the Cape Town Convention and Article X of the Protocol (including sale of the Aircraft and application of proceeds therefrom, but excluding the application of Article 13(2) of the Cape Town Convention); and
(iii) the procurement of the de-registration of the Aircraft and the export and physical transfer of the Aircraft or any Engine from the territory in which it is situated pursuant to Article IX of the Protocol, but excluding, solely to the extent permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention with regard to default remedies without prejudice to Article IX(1) of the Protocol, provided that such exclusion shall not be applicable (to the extent permitted by

	  	44	  	ARTICLE 17	
	  		  	REGISTRATION; PERFECTION OF	
	  		  	OWNER’S TITLE; LIENS	

Article 15 of the Cape Town Convention) to the extent such default remedies are exercised outside the territorial limits of the State of Registration and in a manner not involving the courts of the State of Registration or of its territorial units; and ( y ) where a remedy is available to it under the Cape Town Convention or the Protocol and also under this Agreement and the other Operative Documents or other applicable law, to the extent permitted by the Cape Town Convention and the Protocol and other applicable law, and subject to the provisions of the previous clause (x), Lessor (for itself and for and on behalf of Owner and any Financing Party) may elect under which of the foregoing it shall exercise such remedy.
(c) Without limiting the generality of the foregoing or any other provisions of the Operative Documents, Lessee hereby (i) agrees (without prejudice to its rights under Section 10.2) to exclude the application of Article XVI(1)(a) of the Protocol; and (ii) consents, pursuant to Article XV of the Protocol, to any assignment of associated rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the Operative Documents and further agrees that the provisions of this Section 17.6, shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such assignment of associated rights.
(d) In this Section 17.6 the following terms have the meanings given in the Cape Town Convention and the Protocol: international interest, prospective international interest, international registry, assignment of associated rights, prospective assignment of associated rights, registered, sale and prospective sale and proceeds .
17.7. Permitted Liens. Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to this Lease, any Item of Equipment, title thereto or any interest therein, except (i) the respective rights of Owner, Lessor and Lessee as herein provided; (ii) Lessor’s Liens; (iii) Liens for Taxes not yet due or being contested in good faith by appropriate proceedings so long as adequate reserves are maintained with respect to such Taxes in accordance with GAAP; (iv) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee); and (v) Liens for airport, navigation, and en-route charges arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee). Lessee shall not be permitted to contest any Lien if such contest gives rise to any reasonable likelihood of the sale, forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment or any interest therein in the course of any such proceedings, or as a result of any such Lien or the respective interests of Lessor, Owner or any Financing Party will be similarly adversely affected. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to any Item of Equipment.

	  	45	  	ARTICLE 17	
	  		  	REGISTRATION; PERFECTION OF	
	  		  	OWNER’S TITLE; LIENS	

17.8. Expenses. With respect to all filings, recordings and/or registrations to be made in accordance with the requirements of each of Sections 17.1 through 17.6, inclusive, Lessee shall bear all costs incurred in effecting and maintaining the registration of Owner’s and Lessor’s interests during the Lease Term, but Lessor shall bear any costs of filing, maintaining or otherwise perfecting the interests of Security Trustee, Servicer, Owner Participant and any Financing Party.

	  	46	  	ARTICLE 17	
	  		  	REGISTRATION; PERFECTION OF	
	  		  	OWNER’S TITLE; LIENS	

18. GENERAL INDEMNITY
18.1. Scope. Lessee agrees to indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee from and against any and all Claims which in any way may result from, pertain to or arise out of, or are in any manner related to:
(a) the Aircraft, this Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or
(b) the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or
(c) any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee, Lessor, Owner Participant or Servicer) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or
(d) any failure of Lessee to provide or maintain the Aircraft Documents in accordance with the relevant provisions of this Lease or any other Operative Document during the Lease Term; or
(e) any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or
(f) any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or
(g) any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof; or
(h) any transaction, approval, or document contemplated by this Lease or any other Operative Document or given or entered into in connection herewith or therewith.
Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be subrogated to all rights and remedies which such indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall give prompt written notice thereof to Lessee or such Indemnitee, as the case may be, but failure to give such notice shall not relieve Lessee of its obligations hereunder, except to the extent such failure precludes or restricts Lessee from contesting or otherwise defending any such Claim and except for any liability or obligation of Lessee to the extent the same is increased or would not have been incurred in the absence of any such failure.

	  	47	  	ARTICLE 18	
	  		  	GENERAL INDEMNITY	

18.2. Lessee’s Release. Lessee hereby waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such defect may be discovered, whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee, and regardless of the location of the Aircraft or any Item of Equipment at any such time.
18.3. Repayment. If an Indemnitee shall obtain a repayment of any amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default, promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
18.4. Payment. Subject to the provisions of Section 18.3 hereof, Lessee shall pay directly to each Indemnitee all amounts due under this Article 18 within ten (10) days of the receipt of written notice by Lessee from such Indemnitee that such payment is due, together with reasonable detail supporting Lessee’s obligations in respect of the relevant Claim(s) and the amount(s) thereof.
18.5. Exclusion. Notwithstanding the foregoing provisions of this Article 18, Lessee shall not be obligated to make any payment to an Indemnitee by way of indemnity in respect of any Claim against such Indemnitee, to the extent that such Claim results from or arises out of:
(a) the gross negligence or willful misconduct of such Indemnitee;
(b) any Lessor’s Lien, except to the extent any such Claim results from or arises out of (and in which case such Claim shall not be excluded from Lessee’s indemnity Obligations under this Article 18):
(i) the premature termination of any funding or other financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft following the occurrence and continuation of an Event of Default; or
(ii) any indemnity payment payable by an Indemnitee to another Person under any financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft and for which Lessee has expressly agreed to provide an indemnity pursuant to Section 18.1;
(c) any Taxes;

	  	48	  	ARTICLE 18	
	  		  	GENERAL INDEMNITY	

(d) acts or events which occur (i) before Delivery (except with respect to any Claims arising from or related to Lessee’s acts or omissions in connection with its activities under and pursuant to, among other things, the Participation Agreement) or (ii) after the Termination Date (except if such Claims arise as a result of an act or omission of Lessee which occurred during the Lease Term and are not attributable to any act or omission of an Indemnitee);
(e) ordinary and usual operating or overhead expenses of any Indemnitee, other than as arising as a result of and during the continuance of an Event of Default;
(f) in respect of an Indemnitee, a breach by such Indemnitee of any express covenant given to Lessee; or
(g) the sale, transfer, assignment or other disposition by an Indemnitee of any of its right, title and interest in and to the Aircraft or the Lease, except as a result of the occurrence and continuation of an Event of Default.
For purposes of this Clause 18.5 and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an exemption from the provisions of Section 18.1 in respect of any Claim shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
18.6. After-Tax Nature of Indemnity. Each indemnity payable pursuant to this Article 18 shall be paid on an After-Tax Basis.
18.7 Contest. Lessee shall be entitled, at its sole cost and expense, acting through counsel acceptable to the respective Indemnitee, (a) in any judicial or administrative proceeding that involves solely a claim for one or more Claims, to assume responsibility for and control thereof, (b) in any judicial or administrative proceeding involving a claim for one or more Claims and other claims related or unrelated to the transactions contemplated by this Lease, to assume responsibility for and control of such Claim or Claims to the extent that the same may be and are severed from such other claims (and each of Lessee and such Indemnitee shall use its commercially reasonable efforts to obtain such severance), and (c) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (i) while a Default or an Event of Default shall have occurred and be continuing, (ii) if such proceedings will involve any reasonable possibility of the sale, forfeiture or loss of, or the creation of any Lien (other than a Lessor’s Lien) on, the Aircraft, any Item of Equipment, this Lease, any other Operative Documents, or any part of the foregoing, (iii) if such Claims relate in any way to the business of any Indemnitee other than the transactions contemplated by this Lease or any of the other Operative Documents, (iv) if such Claims, in the opinion of independent counsel for such Indemnitee reasonably satisfactory to Lessee, have a reasonable possibility of otherwise compromising or jeopardizing any substantial interests of such Indemnitee, or (v) if Lessee shall not have furnished such Indemnitee with an opinion of independent counsel reasonably satisfactory to such Indemnitee to the effect that there exists a meritorious basis for contesting such Claims. The Indemnitee may participate with its own counsel, at its own expense, in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. Lessee shall not without the prior written consent of the relevant Indemnitee enter into a settlement or other compromise with respect to any Claims that may result in admission or culpability on the part of any Indemnitee, otherwise subject any Indemnitee to any civil or criminal penalty or other prejudice any Indemnitee or the Aircraft. If for any reason Lessee shall not be responsible

	  	49	  	ARTICLE 18	
	  		  	GENERAL INDEMNITY	

for and be in control of any contest contemplated in this Section 18.7, Lessee may, so long as no Default or Event of Default shall have occurred and be continuing, nonetheless participate in any such contest, at its sole cost and expense, in a manner reasonably acceptable to the relevant Indemnitee. The Indemnitee shall supply Lessee with such information reasonably requested by Lessee (and to the extent that it is commercially reasonable for the Indemnitee to do so) as is necessary or advisable for Lessee to assume responsibility for and control or participate in any proceeding to the extent permitted by this Section 18.7. As long as no Default or Event of Default has occurred and is continuing, such Indemnitee shall not enter into a settlement or other compromise with respect to any Claims without the prior written consent of Lessee, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified with respect to such Claims under this Section 18.7. Notwithstanding this Section 18.7, no Indemnitee shall be prevented from settling or paying any Claim immediately if required by Law to do so nor from assuming control of and terminating Lessee’s participation in any contest of a Claim if, in such Indemnitee’s judgment, the interest of any Indemnitee may be adversely affected or prejudiced by any delay, act, omission or continued contest by Lessee of such Claim.
18.8. Survival. The indemnities contained in this Article 18 shall continue in full force and effect notwithstanding the occurrence of the Termination Date, and are expressly made for the benefit of and shall be enforceable by each Indemnitee.

	  	50	  	ARTICLE 18	
	  		  	GENERAL INDEMNITY	

19. INSURANCE
19.1. Obligation to Insure. Throughout the Lease Term, Lessee shall maintain in full force and effect, at its own cost and expense, the Insurances.
19.2. Liability Insurance. Lessee shall maintain in effect comprehensive third party aircraft liability insurance against bodily injury and property damage losses arising from ground, flight and taxiing exposures, including, but not limited to, passenger legal liability, cargo liability and products liability insurance in the amount set forth in Section 4.1 of Appendix 2B, and in the aggregate with respect to products liability, or such higher amount as Lessee may maintain from time to time on similar aircraft, for any one accident, or series of accidents arising out of any one event, with respect to the Aircraft and Items of Equipment. Such policy shall include war and allied risks in accordance with standard market practice (currently “ The Extended Coverage Endorsement-AVN 52E ”) plus such excess coverage through government indemnity or commercial insurance up to the full limit required herein. Any such liability insurance policy shall not be subject to any deductible amount except with respect to baggage, cargo liability, and hangar keeper’s liability coverage, for which there may not be a deductible in an amount exceeding ***** or such higher amount as may constitute general industry practice and be approved by Lessor in writing from time to time. All Insurances shall:
(a) name the Additional Insureds as additional insureds;
(b) be primary without right of contribution from any other insurance which is carried by any Additional Insureds with respect to the Aircraft or any Engine when not installed on the Aircraft; and
(c) each liability policy shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
19.3. Contractual Liability; Tail Coverage for Liability Insurance. The Insurances referred to in Section 19.2 shall:
(a) include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 18;
(b) for a period of two (2) years after the Termination Date, at Lessee’s cost and expense, continue to name each Indemnitee as additional insureds; and
(c) should Lessor and/or Owner transfer their interests in the Aircraft and this Lease pursuant to and in accordance with the provisions of Article 25, for a period of two (2) years from the effective date of such transfer continue to name as additional insured(s) the transferring Lessor (and the relevant transferring Owner and Financing Parties and other related Indemnitees).
19.4. Insurance Against Loss or Damage to the Items of Equipment.
(a) Lessee shall maintain in effect with respect to the loss of or damage to the Items of Equipment:

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	51	  	ARTICLE 19	
	  		  	INSURANCE	

(i) all-risk ground, flight and ingestion aircraft hull insurance for the Agreed Value set forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine Agreed Value set forth in Appendix 2B, Section 4.3 covering each Engine when not installed on the Airframe and all risk insurance on a full replacement cost basis with respect to the Landing Gear, APU and Parts while not installed on or in the Aircraft, and
(ii) war risk insurance including, but not limited to, war, acts of terrorism, hijacking, confiscation, including confiscation by the Government of Registry, expropriation, nationalisation, seizure and where generally procured by carriers similarly situated with Lessee, further including coverage for electromagnetic, chemical and biological risks as the same is available on the standard commercial aviation insurance markets upon commercially reasonably terms.
(b) All such insurance shall be payable in Dollars and shall be, with respect to the Aircraft and each Engine, on an “agreed value” basis. Any hull insurance carried in accordance with this Section 19.4 shall not contain any provision for self-insured amounts or a deductible that exceeds the deductible amount appearing in Appendix 2B. Any policies carried in accordance with this Section 19.4 shall designate Security Trustee, as sole loss payee for an amount equal to the Agreed Value, on behalf of the Additional Insureds as their respective interests may appear, and Lessor as lessor of the Aircraft covered thereby.
(c) Installation of Other Engines on the Aircraft. If Lessee installs an engine not owned by Owner on the Aircraft, either ( x ) Lessee’s hull insurance on the Aircraft must automatically increase to such higher amount as is necessary in order to satisfy the requirement of this Section 19.4 that Owner receive the Agreed Value in the event of an Event of Loss and the amount required by the third party engine owner or ( y ) separate additional insurance on such engine will attach in order to satisfy separately the requirements of Lessee to such third party engine owner.
(d) Installation of Engines on other Airframes. If Lessee installs or permits the installation of an Engine on an airframe that is not the Airframe, either ( x ) the hull insurance maintained on such airframe must automatically increase by an amount equal to the Engine Agreed Value so that Owner receives the Engine Agreed Value in the event of an Event of Loss with respect to such Engine while installed on such airframe, or ( y ) separate additional insurance on such Engine will attach in order to satisfy separately the requirements of Lessee with respect to such Engine.
(e) Additional Lessee Coverage. Lessee may obtain additional hull insurance on the Aircraft, over and above the Agreed Value hereunder, provided that it does not adversely affect the coverage required to be maintained hereunder.
19.5. Reinsurance. If any of the risks required to be insured under this Article 19 are not placed in the manner required, then such risks shall be reinsured and shall:
(a) be on the same terms as the primary insurance required hereunder;

	  	52	  	ARTICLE 19	
	  		  	INSURANCE	

(b) be at levels of ***** of insurances required to be maintained under this Article 19;
(c) contain a “cut through” clause providing that, in the event of any claim arising under such reinsurance, the reinsurer shall (in lieu of payment to the primary insurer or its successors) pay to the relevant Indemnitee and/or loss payee, as applicable, that portion of any claim which the reinsurer would otherwise be liable to pay the primary insurer or its successors;
(d) provide for payment to be made directly to the relevant Indemnitee notwithstanding ( x ) any bankruptcy, insolvency, examinership, liquidation, administration, receivership, dissolution or other similar proceeding with respect to the primary insurer and/or ( y ) that the primary insurer has made no payment under the primary policies; and
(e) be evidenced by a reinsurance certificate and supported by a broker’s letter of undertaking reasonably satisfactory to Lessor.
19.6. Requirements for All Insurances. All Insurances shall:
(a) be maintained in effect with insurers reasonably acceptable to Lessor, and, if applicable, reinsurers reasonably acceptable to Lessor, of recognised responsibility, specialising and normally participating in the international aviation insurance market and carrying and maintaining an A.M. Best rating of not less than A-, Class VII;
(b) provide that in respect of the interests of the Additional Insureds such policies of insurance shall insure the Additional Insureds regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by Lessee or any other Person;
(c) provide that the Additional Insureds shall have no responsibility for any premiums, assessments, warranties or representations in connection with such insurance;
(d) include the geographic limits of all territories over which the Aircraft and any Engine will be operated;
(e) waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against the Additional Insureds and their respective successors, assigns, agents, officers, employees and servants, other than set-off for unpaid premiums in respect of the Aircraft; and
(f) provide that if the insurers cancel such insurance for any reason whatever, or the same is allowed to lapse for nonpayment of premium, or if there is any material change in policy terms and conditions, such cancellation, lapse or change shall not be effective until thirty (30) days after receipt by Lessee’s designated broker of written notice from such insurers of such cancellation, lapse or change (ten (10) days for nonpayment of premium and seven (7) days for cancellation with respect to war risk and allied perils insurance or such shorter period as shall be customary on the London market for such insurance in such area of the world). Lessee shall cause such designated broker to immediately notify the Additional Insureds of any such notice of cancellation or termination.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	53	  		  	ARTICLE 19	
	  		  		  	INSURANCE	

19.7. Reports. Lessee shall cause its brokers to advise Lessor in writing promptly of any default in the payment of any premium. On or before the Delivery Date, and thereafter on or prior to each renewal or replacement by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more original certificates of insurance or reinsurance and a broker’s letter of undertaking, each executed and delivered by an insurance broker appointed by Lessee, and, if applicable, a certified English translation thereof, reasonably satisfactory to Lessor, which shall describe in reasonable detail the insurance carried on the Aircraft. Lessee will cause its insurance brokers to identify to Lessor the insurers and reinsurers and shall advise Lessor in writing at least thirty (30) days (seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage and ten (10) days for reason of non-payment of premiums) prior to the cancellation by the underwriters of any such insurance or as soon as possible in respect of “non-renewal” or automatic termination for war risk insurance required hereunder. On or prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with faxed or other electronic confirmation from Lessee’s insurance brokers certifying that renewal certificates of insurance evidencing the renewal or replacement of such insurance pursuant to the provisions of this Article 19 will be issued effective as of the termination date of the prior certificate of insurance coverage. Within fifteen (15) days after such renewal, Lessee will furnish to Lessor an original or electronic certificate of such insurance coverage from such insurance broker.
19.8. Assignee of Lessor’s and/or Owner’s Interests. If Lessor, Owner, Owner Participant and/or any Financing Party assigns, in accordance with the provisions of Article 25, all or any of its rights or otherwise disposes of any interest in the Aircraft or this Lease to any other Person, Lessee shall, upon request, procure that such Person shall ( x ) be named as loss payee in substitution for Lessor, Owner, Owner Participant and/or such Financing Party, as applicable and/or as additional insured in the policies effected hereunder and ( y ) enjoy the same rights and insurance enjoyed by Lessor, Owner, Owner Participant and such Financing Party, as applicable, under such policies from and after the effective date of such assignment or disposition.
19.9. Failure to Insure. If at any time the Insurances are not maintained by Lessee in compliance with this Article 19, Lessor, Owner, Owner Participant and any Financing Party shall be entitled but not bound to do any of the following (without prejudice to any of the rights which any of them may have under the Operative Documents by reason of such failure):
(a) upon giving notice thereof to Lessee, to pay any premiums due or to effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor or, if applicable, any Financing Party considers appropriate (and Lessee shall upon demand reimburse Lessor or if applicable, the relevant Financing Party in full for any amount so expended in that connection); and/or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), subject to the Aircraft being adequately insured, proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.
19.10. Lessor’s Right to Insure. Lessee acknowledges that each of Lessor, Owner and each Financing Party has an insurable interest in the Aircraft and each Item of Equipment and may, at its own expense, obtain insurance or contingent insurance in its own name with respect to such insurable interest. Lessee shall provide to Lessor, Owner

	  	54	  	ARTICLE 19	
	  		  	INSURANCE	

and each Financing Party all reasonable assistance as from time to time requested by it in order to adequately protect such insurable interest. Neither Lessor, Owner nor any Financing Party shall maintain any such insurance that would prejudice the insurance maintained by Lessee pursuant to this Lease. Lessee shall have no right to any proceeds of any insurance policies maintained by Lessor.
19.11. Changes to Insurance Practice. If there is a material change in the generally accepted industry-wide practice with regard to the insurance of aircraft by air carriers operating similar aircraft on routes similar to Lessee or any material change with respect to the insurance of aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of Insurances required to be effected under this Article 19) such that Lessor shall, after consultation with Lessee and Lessee’s designated reinsurance or insurance brokers, be of the reasonable opinion that the Insurances required pursuant to this Article 19 are insufficient to protect the respective interests of Lessor and the other Indemnitees (bearing in mind the nature and route of operation of the Aircraft), the insurance requirements set forth in this Article 19 shall be amended, as soon as reasonably practicable following notice by Lessor to Lessee, so as to include such additional or varied requirements as may be reasonably necessary to ensure that the insurance as so varied shall provide comparable protection to Lessor and the other Indemnitees to that which it would have done if such change had not occurred. In such circumstances, Lessor will consult in good faith with Lessee in relation to any proposed change.
19.12. AVN 67B or AVN 67C. Notwithstanding anything to the contrary contained in this Article 19, Lessor shall accept the terms of AVN 67B or AVN 67C (“ Airline Finance/Lease Contract Endorsement ”) where such endorsement is contrary to the terms of this Lease as long as such endorsement is customary in the major international insurance markets for commercial passenger airlines.

	  	55	  	ARTICLE 19	
	  		  	INSURANCE	

20. LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT
20.1. Risk of Loss and Damage. Following Delivery, Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and each Item of Equipment and of any other occurrence which shall deprive Lessee of the Aircraft or any Item of Equipment for the time being of the use, possession or enjoyment thereof including, without limitation, any resulting loss in value of the Aircraft or any Item of Equipment due to any of the aforementioned circumstances (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
20.2. Notification of Loss and Damage.
(a) Lessee shall give Lessor written notice of and information regarding any Event of Loss as promptly as possible, and in any event within two (2) Business Days of the occurrence of such Event of Loss.
(b) Each of Lessee and Lessor shall supply to the other all necessary information, documentation and assistance which may reasonably be required in connection with making any claim under the Insurances.
20.3. Event of Loss – Aircraft. If an Event of Loss occurs in respect of the Aircraft (with or without the Engines), Lessee shall pay, or procure that the insurer pays, to Owner (or to any Financing Party named as loss payee under the Insurances) as soon as reasonably practicable but in any event within sixty (60) days after the Event of Loss Date or, if earlier, the date such insurance proceeds are received, the Agreed Value as at the Event of Loss Date (or such earlier date, as the case may be) together with all Rent and other amounts then due and payable under the Operative Documents.
(a) The Net Event of Loss Proceeds received by Owner (or such other person as may be designated as loss payee) from Lessee or the insurer pursuant to this Article 20 shall be applied as follows:
(i) first, in discharge of the Agreed Value;
(ii) second, in discharge of any unpaid Rent and any other unpaid amounts (other than the Agreed Value) due and payable by Lessee under the Operative Documents and any Related Lease; and
(iii) third, payment of the balance, if any, to Lessee.

	  	56	  	ARTICLE 20	
	  		  	LOSS AND DAMAGE TO THE AIRCRAFT	
	  		  	AND ITEMS OF EQUIPMENT	

(b) Lessee shall continue to pay Basic Rent on the days and in the amounts required under this Lease notwithstanding any such Event of Loss provided that no further installments of Basic Rent shall become due after the date on which all sums due under this Section 20.3 shall have been paid in full, and on such date the Lease Term shall terminate and Owner shall, at Lessee’s cost and subject to the rights (if any) of the insurer cause title to the Aircraft (and to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the case may be) on a quitclaim basis, without warranty or recourse, except that the same shall be free and clear of all rights of Lessor and Owner and Lessor’s Liens without representation, recourse to or warranty by Lessor, Owner or any Financing Party and, provided no Default or Event of Default has occurred and is continuing or upon a complete cure thereof, Lessor shall thereafter return the Security Deposit to Lessee in accordance with Section 4.5 and shall return ***** of the remaining balance of the Maintenance Reserves to Lessee.
20.4. Event of Loss – Engine or APU. Upon the occurrence of an Event of Loss with respect to an Engine or APU, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days after the Event of Loss Date, convey to Owner, free and clear of all Liens, title to another engine or, as applicable, auxiliary power unit of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Engine. The replacement engine shall have a value and utility at least equal to, and be in as good operating condition as, the Engine with respect to which such Event of Loss shall have occurred, based on but not limited to (i) Cycles accumulated on each Engine Life Limited Part, (ii) Flight Hours accumulated since new (and accumulated since completion of the most recent heavy maintenance shop visit that completed a workscope at least equivalent to that of an Engine Restoration if an Engine Restoration had previously been accomplished on the Engine that suffered such Event of Loss), and (iii) Flight Hours and Cycles accumulated since new (and accumulated since the most recent restoration or refurbishment of each engine module with respect to any module for which a restoration or refurbishment had previously been accomplished on the Engine that suffered such Event of Loss), assuming such Engine was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Replacement APU. The replacement auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the APU with respect to which such Event of Loss shall have occurred, based on but not limited to (i) APU Hours (and APU Cycles if applicable) accumulated since new with respect to each APU Life Limited Part (as applicable) and (ii) APU Hours accumulated since new (and since the most recent Overhaul for each auxiliary power unit module if an Overhaul had previously been accomplished on the APU that suffered such Event of Loss), assuming such APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessor Inspection. Lessee shall identify to Lessor a candidate replacement engine or auxiliary power unit (as applicable) and Lessor may inspect such candidate replacement engine or auxiliary power unit, which shall include, at Lessor’s option, (i) a full borescope inspection of the compressor, turbine and combustion sections of the replacement engine or auxiliary power unit and (ii) a records inspection, and the results of each such inspection must be satisfactory to Lessor.

*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	  	57	  	ARTICLE 20	
	  		  	LOSS AND DAMAGE TO THE AIRCRAFT	
	  		  	AND ITEMS OF EQUIPMENT	

(d) Replacement Subject to Lease. Upon acceptance by Lessor, such replacement engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or, as applicable, an “APU”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement Engine or APU shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Engine or APU replaced thereby.
20.5. Event of Loss – Landing Gear. Upon the occurrence of an Event of Loss with respect to a Landing Gear, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith replace such Landing Gear as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days from the Event of Loss Date, by duly conveying to Owner, free and clear of all Liens, title to another landing gear of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Landing Gear. The replacement landing gear shall have a value and utility at least equal to, and be in as good operating condition as, the Landing Gear with respect to which such Event of Loss shall have occurred, based on but not limited to (i) the maximum weight certified for such landing gear; (ii) Flight Hours, Cycles and calendar time accumulated since new with respect to each Landing Gear Life Limited Part (as applicable), and (iii) Flight Hours, Cycles and calendar time accumulated since new (and accumulated since Overhaul if an Overhaul had previously been accomplished on the Landing Gear that suffered such Event of Loss), assuming such Landing Gear was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Lessor Inspection. Lessee shall identify to Lessor a candidate replacement landing gear and Lessor may inspect such replacement landing gear, which shall include, at Lessor’s option, a records inspection, and the results of such inspection must be satisfactory to Lessor.
(c) Replacement Subject to Lease. Upon acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing Gear”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement landing gear shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Landing Gear replaced thereby.
20.6. Repairable Damage.
(a) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, subject to no Event of Default having occurred and continuing, all insurance proceeds which may be paid or payable by the insurers of the Aircraft shall, subject to (x)  receipt by Lessor of (A) a repair estimate acceptable to Lessor, (B) evidence of completion of such repair by an Approved Maintenance Organisation, provided such evidence and the Approved Maintenance Organisation are acceptable to Lessor and (C) a true and correct copy of the adjuster’s claim report, and ( y ) receipt by Lessee and the insurers of Lessor’s prior written approval for the release of such proceeds (such approval not to be unreasonably withheld), be paid to:

	  	58	  	ARTICLE 20	
	  		  	LOSS AND DAMAGE TO THE AIRCRAFT	
	  		  	AND ITEMS OF EQUIPMENT	

(i) Lessee in respect of all loss or damage Lessee has made good (or caused to be made good), or
(ii) the repairer for the cost of the completed repair works, or
(iii) to the vendor of any new or replacement Item of Equipment for the cost of such new or replacement Item of Equipment;
provided that Lessee shall have furnished to Lessor evidence satisfactory to Lessor, that the repairs have been fully completed and that all invoices in relation thereto have been paid and all such repairs have been performed in accordance with the terms of this Lease. Any such insurance proceeds payable following the occurrence and during the continuation of an Event of Default (or not otherwise applied in the manner described above) shall be applied in such manner as Lessor may direct, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
(b) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, if such insurance proceeds paid in respect thereof are insufficient to pay the cost or estimated cost of making good or repairing such damage or the cost of purchasing a replacement engine, auxiliary power unit, landing gear or part if the same is beyond economic repair, Lessee will pay the deficiency.
20.7. Documents Loss. Upon the occurrence of a Documents Loss under circumstances in which there has not occurred an Event of Loss with respect to an Item of Equipment to which such Lost Documents relate, Lessee shall within thirty (30) days from the date of such loss notify Lessor in writing and thereafter replace such Lost Documents (such replacement documents hereinafter “ Reconstructed Documents ”) by: 
(a) obtaining copies of such Lost Documents from the Approved Maintenance Organisation that accomplished the maintenance covered by the respective Lost Documents, each such copy to be certified by the Quality Assurance Department of the respective Approved Maintenance Organisation as to being a true copy of the respective Lost Document, or
(b) the re-accomplishment of Overhauls and Tasks specified in such Lost Documents as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) sixty (60) days following the Documents Loss, ( y ) the Scheduled Termination Date, and ( z ) the Termination Date. The Reconstructed Documents shall comply with all requirements for Required Approvals with respect to the Item of Equipment to which such Lost Documents relate and shall be sufficient to document the then current maintenance status of the affected Items of Equipment. Lessor shall be entitled to inspect the Reconstructed Documents and the results of each such inspection must be satisfactory to Lessor, acting reasonably. Upon acceptance by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined herein for all purposes hereunder.

	  	59	  	ARTICLE 20	
	  		  	LOSS AND DAMAGE TO THE AIRCRAFT	
	  		  	AND ITEMS OF EQUIPMENT	

20.8. Application of Payments from Governmental Authorities. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft or the Airframe, shall be retained by Lessor or Owner, if received by Lessor or Owner, or promptly paid over to Lessor, if received by Lessee, up to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due to Lessor or Owner hereunder or under any other Operative Documents or any Related Lease). At such time as Lessor or Owner has received such amounts in full, Lessor shall promptly remit (or cause Owner to promptly remit) the excess, if any, of such payments to Lessee. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting solely from the condemnation, confiscation or seizure of, or requisition of title to or use of any Engine shall be paid over to, or retained by, Lessee, provided that Lessee shall have fully performed its obligations under this Article 20 with respect to such Engine. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to a requisition of use during the Lease Term of the Aircraft, the Airframe or any of the Engines, which requisition does not constitute an Event of Loss, shall, so long as no Default or Event of Default has occurred and is continuing, be paid to, or retained by Lessee, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
20.9. No Lessor Liability to Repair or Replace Following Delivery. Lessor will not be liable for any expense in repairing or replacing any Item of Equipment or be liable to supply another aircraft or any item of equipment in lieu of the Aircraft or any Item of Equipment if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use or required to produce or provide Reconstructed Documents.

	  	60	  	ARTICLE 20	
	  		  	LOSS AND DAMAGE TO THE AIRCRAFT	
	  		  	AND ITEMS OF EQUIPMENT	

21. TAXES; TAX INDEMNITY
21.1. Indemnity .
(a) Indemnity. Except as provided in Section 21.1(b), Lessee shall pay (without duplication as among Lessor, Trust Company and Owner, to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee)), and shall indemnify and hold harmless each Indemnitee, for and against, all Taxes arising or resulting from or otherwise relating to any Item of Equipment, any Operative Document, or any of the transactions and activities provided for or contemplated in, or permitted by, the Operative Documents, including without limitation, the purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration, possession, use, operation, landing, take-off, storage, location, presence, maintenance, alteration, modification, improvement, servicing, repair, overhaul, pooling, interchange, exchange, substitution, replacement, loss, return, sale or other disposition of, or any damage, addition or transfer of title to, any Item of Equipment or any interest therein, the execution, delivery, filing, registration, recording, presence, performance of, payment under or enforcement of, or the cure of any default or the exercise of any remedy under, any Operative Document or any other documents executed from time to time pursuant to any Operative Document (regardless of how or when such Taxes are imposed or assessed, whether imposed on or assessed against any Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest therein or any use thereof, or otherwise) and all costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements) paid or incurred by any Indemnitee with respect to any Tax for which Lessee is required to indemnify such Indemnitee pursuant to this Article 21 (an “ Indemnified Tax ”) or in connection with the enforcement of this Article 21.
(b) Excluded Taxes . Lessee shall have no obligation under Section 21.1(a) to indemnify an Indemnitee for the following Taxes (each a “ Non-Indemnified Tax ”):
(i) any Tax imposed on or measured by the total net income, receipts, capital, net worth, franchise of, or conduct of business by, such Indemnitee except to the extent that such Tax would not have been payable in the absence of (A) the registration, use, presence or other connection of any Item of Equipment in or with, or any act or omission of Lessee or any Affiliate, agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the inaccuracy or breach of any of the representations, warranties, covenants or agreements of Lessee in the Operative Documents, or (C) an Event of Default, provided that the exclusion in this clause (i) shall not apply to any Tax that is, or is in the nature of, a sales, use, rental, value added, goods and services, consumption, service, transaction privilege, stamp, documentary, transfer, license, excise, withholding or property Tax;
(ii) any Tax imposed on or with respect to any sale or other transfer (x) by such Indemnitee of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2, or (y) by Owner Participant of the Beneficial Interest, provided that the exclusion in this clause (ii) shall not apply to any sale or transfer that occurs (A) in connection with or as a result of a Default, an Event of Default, an Event of Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of any Item of Equipment, or (B) at Lessee’s request, or (C) pursuant to a requirement in any Operative Document or any applicable Law; or

	  	61	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

(iii) any Tax to the extent such Tax is caused by, and would not have been incurred but for, any activities of an Indemnitee in the jurisdiction imposing such Tax that are unrelated to any Indemnitee’s dealings with Lessee or any Affiliate of Lessee, unrelated to the transactions contemplated in the Operative Documents, unrelated to any Related Lease, and unrelated to use of the Aircraft (or any aircraft subject to a Related Lease) or any part thereof by Lessee or any Affiliate of Lessee or any agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any such Aircraft (or any such aircraft) or any part thereof;
(iv) (A) any Tax to the extent imposed with respect to any event or period occurring before the date of this Agreement, except that the exclusion in this subclause (iv)(A) shall not apply to any such Tax which arises from any act or omission of Lessee or any Affiliate of Lessee or any director, officer, employee, agent or representative of Lessee or any Affiliate of Lessee;
(B) any Tax to the extent imposed with respect to any act or event or period of time occurring after the Aircraft has been returned by Lessee to Lessor in full compliance with Article 22 and is no longer subject to this Lease, provided that the exclusion in this subclause (iv)(B) shall not apply to any Tax that (1) relates to any act or event occurring or matter arising prior to or concurrently with the return of the Aircraft or (2) arises from or in connection with (x) an Event of Default or (y) any payment by or on account of any obligation of Lessee under the Operative Documents to which it is a party; or
(C) the performance of any other obligation of Lessee under the Operative Documents to which it is a party;
(v) any penalty, fine, addition to tax or interest imposed on such Indemnitee to the extent that such penalty, fine, addition to tax or interest is caused by, and would not have been payable but for:
(A) the failure by such Indemnitee to file any Tax return which such Indemnitee is required by applicable Law to file with respect to any Indemnified Tax before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax return, or
(B) the failure by such Indemnitee to pay any Tax which such Indemnitee is required by applicable Law to pay before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax payment,
unless (in each case) such failure is a result of:
(U) a failure by Lessee to provide as soon as reasonably practicable (and in any event within 60 days) after receipt of such Indemnitee’s request therefor, any information or documents that are reasonably requested by such Indemnitee and are in the possession or reasonable control of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or

	  	62	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

(V) the willful misconduct or gross negligence of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or
(W) a failure by Lessee to perform any of its obligations under this Lease, or
(X) an Event of Default, or
(Y) any circumstances beyond such Indemnitee’s reasonable control in any jurisdiction (other than the jurisdiction under the Laws of which such Indemnitee is incorporated or otherwise created and any jurisdiction in which an office or other fixed place of business of such Indemnitee is located) in which (1) any Item of Equipment is registered or used and (2) such Tax return is required to be filed or such Tax payment is required to be paid, or
(Z) any combination of the foregoing;
(vi) any Tax to the extent that such Tax would not have been payable but for a breach by such Indemnitee of any obligation of such Indemnitee under Section 21.3 or 21.4 hereof;
(vii) any Tax imposed on an Indemnitee to the extent such Tax is caused directly by, and would not have been incurred but for (A) the gross negligence or willful misconduct of any Indemnitee or (B) the inaccuracy or breach of any representation, warranty, covenant or agreement of such Indemnitee in this Lease or (C) the existence or enforcement of a Lessor’s Lien;
(viii) in the case of a Person that becomes the Lessor or Owner Participant after the Delivery Date by acquiring its interest in the Aircraft and the Lease by sale, assignment or other transfer from a prior Lessor pursuant to Section 25.2, Taxes if and to the extent that the aggregate amount of such Taxes exceeds the aggregate amount of Taxes that would have been imposed on or payable by the transferor Lessor or Owner Participant and for which Lessee would have been required to indemnify the transferor Lessor or Owner Participant pursuant to this Article 21, determined under applicable Laws in effect on the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant (the “Transfer Date”) (or enacted prior to the Transfer Date and effective from and after the first anniversary of the Transfer Date if as of the Transfer Date the effect of such Laws on Lessee can be reasonably determined), provided that the exclusion in this clause (viii) shall not apply to a transferee Lessor or Owner Participant that acquires its interest in the Aircraft pursuant to a transfer that occurs (A) in connection with or as a result of an Event of Default or (B) at Lessee’s request or (C) pursuant to a requirement in any Operative Document or any applicable Law and (for the avoidance of doubt) shall not apply to any Tax to the extent incurred or increased as a result of a change in any Law after the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant;
(ix) any Tax imposed on an Indemnitee to the extent that such Tax would not have been imposed but for an amendment to any Operative Document to which Lessee is not a party without the prior written consent of Lessee, unless such amendment occurs in connection with and during the continuance of an Event of Default or is required by applicable Law or is required by any Operative Document.

	  	63	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

For the avoidance of doubt and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an Excluded Tax shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
(c) No Reduction for Withholding. Lessee agrees that all amounts payable by Lessee (or by any other Person on account of any obligation of Lessee) pursuant to the Operative Documents shall be paid without any deduction or withholding on account of any Taxes, monetary transfer fees, or other charges or withholdings of any nature, except to the extent that the deduction or withholding of any Tax is required by applicable Law, in which event Lessee shall (i) pay to the Person entitled to receive such payment (the “ Payee ”) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any withholding with respect to such additional amount), an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made and (ii) deliver to Lessor within sixty (60) days after the date of such payment an official receipt of the relevant taxing authority (or, if an official receipt is not obtainable, other documentary evidence satisfactory to Lessor) showing that Lessee paid to such taxing authority the full amount of the Tax required to be deducted or withheld. If Lessee pays any additional amount to Lessor pursuant to clause (i) of the preceding sentence for any withholding Tax that is an Excluded Tax, then Lessor shall repay such additional amount to Lessee within thirty (30) days after receipt of Lessee’s written request therefor accompanied by the official receipt or other evidence of payment described in clause (ii) of the preceding sentence and a written statement describing in reasonable detail the reason that such withholding Tax is an Excluded Tax.
21.2. VAT.
(a) All amounts payable by Lessee pursuant to the Operative Documents are exclusive of VAT. Lessor and Lessee acknowledge and agree that any VAT that is required by any applicable Law to be paid with respect to any of the transactions, activities or payments contemplated in the Operative Documents is a Tax to which the provisions of this Article 21 apply.
(b) If requested by Lessor, Lessee shall deliver to Lessor on the Delivery Date and, thereafter, within thirty (30) days after receipt of Lessor’s written request made not more than annually during the Lease Term, the following documents to enable Lessor to comply with applicable Laws relating to VAT:
(i) a certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or
(ii) an Irish Revenue Form VAT 60B (or applicable successor form) with respect to this Lease.
21.3. Lessor Tax Certificates. Prior to the first payment of Basic Rent hereunder, and thereafter as soon as reasonably practicable after receipt of Lessee’s written request therefor (but not more frequently than once within any 12-month period):

	  	64	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

(i) in the case of the Person that is Lessor on the date hereof, Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority confirming that Lessor is a resident of Ireland for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of Lessor as a resident of Ireland for the purposes of taxation; or
(ii) in the case of a Person that acquires its interest in this Lease and the Aircraft by transfer from a prior Lessor, such Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority of the country in which the principal place of business of such Lessor is located confirming that such Lessor is a resident of such country for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of such Lessor as a resident of such country for the purposes of taxation.
21.4. Withholding Tax Exemption Certificates. Each Indemnitee will deliver to Lessee, as soon as reasonably practicable after receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English) such forms, certifications, and other documents as (i) such Indemnitee is entitled under applicable Law to execute or obtain and (ii) are required by applicable Law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Lease without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable Law to withhold in the absence of such document, provided that in the case of any such document that must be executed or endorsed by any Governmental Authority or other taxing authority, the failure of such Indemnitee or Lessee to receive such document from such Governmental Authority or other taxing authority within a reasonable time shall not be deemed to be a failure to comply with this Section 21.4 so long as such Indemnitee is using commercially reasonable efforts to obtain such document, and provided, further, that no Indemnitee shall have any obligation to deliver any document requested by Lessee pursuant to this Section 21.4 if such Indemnitee determines in good faith that delivering such document would result in a risk that any Indemnitee could incur a liability, loss, cost or expense for which Lessee is not required by any Operative Document to indemnify such Indemnitee unless Lessee delivers to such Indemnitee a written undertaking to indemnify such Indemnitee on an After-Tax Basis for any such liability, loss, cost or expense in a manner reasonably satisfactory to such Indemnitee.
21.5. Tax Filings; Information.
(a) Unless otherwise directed or agreed in writing by Lessor, Lessee shall properly prepare and timely file all reports, returns, declarations and other documents (each a “ Tax Document ”) that are required by applicable Law to be filed with any Governmental Authority or other taxing authority with respect to each Indemnified Tax.
(b) Lessee shall (i) deliver to Lessor within thirty (30) days after receipt of Lessor’s written request, a certificate of an officer of Lessee, in form and substance satisfactory to Lessor, demonstrating compliance with Lessee’s covenants in Section 11.6 during the period or periods specified in Lessor’s written request, and (ii) deliver to each Indemnitee as soon as reasonably practicable (and in any event within thirty (30) days) after receipt of such Indemnitee’s written request therefor, such information and copies of such records and other documents (including, without limitation, the flight log for the Aircraft) maintained or required to be maintained by Lessee or by any other user of any Item of Equipment in the regular course of its business as such Indemnitee may request from time to time to enable such Indemnitee to comply with applicable Tax reporting, audit, audit dispute resolution, and litigation requirements, and if requested by any Indemnitee, make such information, records and other documents available for inspection by such Indemnitee or its authorised representatives.

	  	65	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

21.6. Payment of Taxes and Indemnities.
(a) To the extent required or permitted by applicable Law, Lessee shall pay each Indemnified Tax when due directly to the proper taxing authority, unless otherwise directed or agreed in writing by Lessor.
(b) Any indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days after the date on which Lessee receives such Indemnitee’s written demand therefor (which demand shall provide a description in reasonable detail of the applicable Indemnified Taxes and the calculation of the amount of the indemnity payment demanded).
(c) All amounts payable by Lessee pursuant to this Article 21 shall be paid on an After-Tax Basis.
21.7. Contest.
(a) If any Indemnitee receives a written claim from any taxing authority for any Indemnified Tax (a “ Tax Claim ”), such Indemnitee shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim.
(b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment of such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a refund thereof), and such Indemnitee shall not settle or compromise such Tax Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such Tax Claim without the prior written consent of Lessee (which consent shall not be unreasonably withheld), provided that such Indemnitee shall have the right to refuse to begin or continue (or to permit Lessee to begin or continue) the contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (y) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements).

	  	66	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

(c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest:
(i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing;
(ii) contesting such Tax Claim would not, in the opinion of Lessor, result in any material reputational risk for any Indemnitee, any risk of criminal or civil penalty, or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein;
(iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if the Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, the sum of (A) the amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency);
(iv) if such Indemnitee decides to contest such Tax Claim by paying the Indemnified Tax that is the subject of such Tax Claim and taking action to obtain a refund thereof, Lessee shall have made an interest-free advance to such Indemnitee in an amount equal to the amount of the Indemnified Tax and shall have delivered to such Indemnitee a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse Tax consequences to such Indemnitee or any of its Affiliates resulting from such interest-free advance;
(v) Lessee shall be paying, on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements);
(vi) if requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and
(vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	67	  		  	ARTICLE 21	
	  		  		  	TAXES; TAX INDEMNITY	

sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim.
(d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “ Tax Saving ”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “ Refund ”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of:
 
 	(1)	the lesser of (x) the amount of such Tax Saving or Refund(as the case may be) minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such Refund or Tax Saving, or (y) the amount of the Indemnified Tax or indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus	
 
 	(2)	the amount of interest (if any) received by such Indemnitee on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such interest, provided that such Indemnitee shall not thereby be in a less favorable position than it would have been in if the Indemnified Tax had not been paid or incurred. A written statement of such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and interest shall be final and conclusive, except for any manifest error.	
(e) Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that are reasonably requested by Lessee and are in the possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax pursuant to this Section 21.7, provided, however, that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration, opinion or other document or information relating solely to one or more Excluded Taxes or (ii) in the case of any return, report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration, opinion or other document or information that relates to Excluded Taxes.
(f) Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Indemnitee pursuant to Section 21.1, without regard to the exclusions in Section 21.1(b) and without regard to the contest provisions of Sections 21.7(a) and 21.7(b).

	  	68	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

21.8. Survival. The respective obligations of Lessee and Lessor under this Article 21 shall remain in full force and effect, notwithstanding the occurrence of the Termination Date.
21.9. Change in Circumstances; Mitigation. If Lessee incurs an indemnity liability under Section 21.1(a) or 21.1(c) or if it becomes reasonably foreseeable that Lessee would (but for this Section 21.9) incur an indemnity liability under Section 21.1(a) or 21.1(c), then if requested by Lessee in writing, Lessor shall consult with Lessee in good faith with a view to restructuring the transactions contemplated in this Lease so that the indemnity liability can be avoided or minimized, provided that no Indemnitee shall have any obligation to take any action pursuant to this Section 21.9 if such Indemnitee determines in good faith that taking such action may result in a material economic, legal or regulatory disadvantage to such Indemnitee or any material reputational risk for such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee (as invoiced by Lessor or such other Indemnitee to Lessee and supported by evidence of such cost reasonably acceptable to Lessee), in connection with the consideration, negotiation, documentation, or closing of any restructuring requested by Lessee pursuant to this Section 21.9.

	  	69	  	ARTICLE 21	
	  		  	TAXES; TAX INDEMNITY	

22. RETURN OF AIRCRAFT
22.1. Time and Place. On the Scheduled Termination Date (or, if applicable, the Termination Date if such date is different than the Scheduled Termination Date) and unless the Aircraft has suffered an Event of Loss, Lessee, at its own expense, shall return the Aircraft to Lessor at the Redelivery Location. Lessor and Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any exceptions thereto, by executing a Return Acceptance Certificate. Unless a Default or an Event of Default shall have occurred and be continuing or unless this Lease shall have been cancelled by Lessor pursuant to Article 24, upon such execution and delivery, this Lease shall terminate, with neither party hereto having any further liability to the other hereunder except for those Obligations which specifically survive the expiration, cancellation or termination of this Lease or as are otherwise reserved in accordance with such Return Acceptance Certificate. If an Event of Default occurs by Lessee failing to complete Return on the Scheduled Termination Date or if an Event of Default occurs prior to or after the Scheduled Termination Date and Lessor exercises its remedy to thereafter repossess the Aircraft, Lessee is nonetheless obligated to comply, and to have the Aircraft comply, with the return requirements set forth in this Article 22 on the date of actual Return or repossession by Lessor.
22.2. Condition. Upon return of the Aircraft pursuant to Section 22.1, Lessee shall comply with the requirements of Appendix 2E and shall return the Aircraft in a condition in compliance with the provisions of this Lease, including this Article 22 and Appendix 2E.
22.3. Lessee’s Continuing Obligations.
(a) If Lessee shall, for any reason whatsoever, fail to return the Aircraft in a timely manner in the condition specified in this Lease, the Obligations of Lessee shall continue and the Lease Term shall be deemed to be extended, day-to-day, until Return of the Aircraft; provided that this paragraph shall not be construed as permitting Lessee to fail to meet its Obligation to return the Aircraft in accordance with the requirements of this Lease and shall not constitute a waiver by Lessor of any Default or Event of Default arising out of such failure or prejudice the rights of Lessor under Article 24 with respect thereto.
(b) If the Aircraft is not returned to Lessor in accordance with this Lease on the Scheduled Termination Date:
(i) with effect from and including the Scheduled Termination Date, Fixed Rent shall continue to be payable at the daily rate of one-thirtieth (1/30) of the Fixed Rent otherwise payable hereunder; and with effect from and including the fifteenth (15 th ) day following the Scheduled Termination Date, Fixed Rent shall be payable at the daily rate of one-twentieth (1/20) of the Fixed Rent otherwise payable hereunder; and with effect from and including the thirtieth (30 th ) day following the Scheduled Termination Date, Fixed Rent shall thereafter be payable at the daily rate of one-fifteenth (1/15) of the Fixed Rent otherwise payable hereunder; and
(ii) payments in respect of Maintenance Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis, prorated on a daily basis based on a month consisting of thirty (30) days;
each of which amounts shall be paid by Lessee at the earlier to occur of each next Fixed Rent Payment Date and Return. Notwithstanding the foregoing, in the event Lessee is unable to return the Aircraft to Lessor in accordance with this Lease on the Scheduled Termination Date primarily as a result of any act or omission of Lessor or any Person lawfully claiming by or through Lessor, Lessee’s continuing Fixed Rent payment obligations as set forth in sub-section (i) shall not apply.

	  	70	  	ARTICLE 22	
	  		  	RETURN OF AIRCRAFT	

(c) Lessor may elect, in its sole and absolute discretion and without prejudice to its rights under this Lease, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 22 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to accomplish such correction. Any direct, documented, out-of-pocket expenses incurred by Lessor for such correction will become Supplemental Rent payable by Lessee on demand following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such corrections in reasonable detail. Lessee’s Obligation to pay such Supplemental Rent will survive the Termination Date and until such time that the Aircraft is put into the condition required for Return and Lessee’s remaining Obligations due for performance on the Termination Date have been performed in full.
22.4. Legal Status Upon Return. At Return, the Aircraft shall be:
(a) free and clear of all Liens, except Lessor’s Liens; and
(b) duly registered in the name of Lessee, as lessee, and evidencing the ownership interest of Owner to the extent permitted under the Law of the State of Registration of the Aircraft.
At Return, Lessee shall, at its own cost and expense, procure or cooperate with Lessor in procuring the immediate deregistration of the Aircraft from the Register (including, without limitation, execution and delivery by Lessee of such documents as may be required to de-register the Aircraft from the Register and to terminate the Lease or to evidence the expiration, termination or cancellation of the Lease).
22.5. Airport and Navigation Charges. Lessee shall ensure that upon Return any and all airport, navigation and other similar charges in connection with the use and operation of the Aircraft or any other aircraft operated by or in Lessee’s fleet of aircraft which give rise or would if unpaid give rise to any Lien in relation to the Aircraft or any Item of Equipment have been paid and discharged in full and will at Lessor’s written request produce reasonable evidence thereof reasonably satisfactory to Lessor.

	  	71	  	ARTICLE 22	
	  		  	RETURN OF AIRCRAFT	

23. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an “ Event of Default ” under this Lease:
(a) Lessee shall fail to make any payment of Rent or in respect of Maintenance Reserves when due hereunder and such failure shall continue for five (5) Business Days; or
(b) Lessee shall fail to procure and maintain the Insurances, or Lessee shall operate the Aircraft at a time when or in a place where such Insurances shall not be in effect or otherwise outside the scope of coverage of the Insurances or Lessee fails to comply with the provisions of Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or
(c) Lessee shall fail to timely comply with the provisions of Article 4 (Security Deposit); or
(d) Lessee shall fail to timely comply with its Obligation to accept delivery of the Aircraft when validly tendered by Lessor hereunder, or Lessee fails in any material respect to satisfy the conditions precedent for Delivery under Article 7 hereof; or
(e) Lessee shall fail to timely comply with its Obligation to complete Return of the Aircraft to Lessor on the Scheduled Termination Date or, if applicable, the Relevant Date as defined in Section 27.1(b) and such failure is not primarily attributable to any act or omission of Lessor or any Person lawfully claiming by or through Lessor; provided that so long as Lessee is diligently endeavoring to return the Aircraft to Lessor in accordance with the provisions of this Lease, the time for compliance shall be extended for a period of up to fifteen (15) days from the Scheduled Termination Date or the Relevant Date, as the case may be; or
(f) Lessee (i) voluntarily suspends substantially all of its airline operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee are revoked, cancelled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline, or (ii) ceases to be a commercial air carrier or ceases to hold its current air operator’s certificate (or equivalent); or
(g) Any representation or warranty made by Lessee herein or in any document or certificate furnished to Lessor in connection herewith or pursuant hereto shall prove to have been incorrect in any material respect when made, and if capable of cure, is not cured within thirty (30) days of receipt of notice of the same; or
(h) The occurrence of a Related Lease Event of Default or an event of default (as defined therein) or material breach of any obligation under any Operative Document, which event of default or material breach is not cured within any applicable cure period set forth therein;
(i) Lessee shall at any time fail to maintain the Items of Equipment in accordance with the provisions of this Lease or to promptly correct any discrepancy which renders the Aircraft or any Item of Equipment unairworthy so that a current and valid certificate of airworthiness and continuing authority to operate the Aircraft in commercial revenue service by the Aeronautics Authority cannot be or is not maintained for the Aircraft; provided, however, that it shall not be deemed to be an Event of Default if all Airbus A319 series aircraft are the subject of a grounding order issued by the Aeronautics Authority or the EASA, unless Lessee fails to comply with any instructions to correct the reason(s) for such grounding order promptly following the issuance thereof or fails to make diligent efforts to obtain any necessary parts required for such correction, but giving due regard to the management of such corrections on a fleet-wide basis; or

	  	72	  	ARTICLE 23	
	  		  	EVENTS OF DEFAULT	

(j) This Lease, any Related Lease or any assignment for security of any Permitted Sublease shall cease to be a valid and enforceable agreement and in full force and effect for any reason due to any action or inaction of Lessee in breach of its obligations hereunder or Lessee otherwise repudiates the same; or
(k) Lessee shall fail to comply with its obligations pursuant to Sections 12.12(a) (Installation of other Engines), 17.5 (Perfection of Title), 17.6 (Cape Town Convention) or 17.7 (Permitted Liens) and such failure shall continue for a period of five (5) Business Days after notice thereof is given by Lessor to Lessee; or
(l) Lessee shall fail to perform or observe in any material respect any other of the covenants, conditions, or agreements to be performed or observed by it hereunder and such failure shall continue for a period in excess of thirty (30) days after written notice thereof is given by Lessor to Lessee of such failure; or
(m) Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for thirty (30) days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; or
(n) (i) Lessee shall commence any case, proceeding or other action (A) under any existing or future Law relating to bankruptcy, insolvency, examinership, administration, reorganisation or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Lessee any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Lessee any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Lessee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Lessee shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.
Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its Obligations.

	  	73	  	ARTICLE 23	
	  		  	EVENTS OF DEFAULT	

24. LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT
24.1. Lessor’s Rights Following an Event of Default. At any time after the occurrence and continuation of an Event of Default Lessor may treat such event as a repudiation by Lessee of the Lease generally and of its Obligations and may:
(a) in the event of the occurrence and continuation of an Event of Default before Delivery, by notice to Lessee terminate its obligation to lease the Aircraft to Lessee hereunder; and/or
(b) proceed by appropriate court action to enforce performance by Lessee of the applicable covenants and provisions of this Lease or the other Operative Documents or to recover damages for the breach thereof; and/or
(c) by notice to Lessee, (i) require the grounding of the Aircraft and or (ii) cancel this Lease on and as of the date specified in such notice and (without further notice to Lessee) retake possession of the Aircraft, and Lessee agrees that Lessor may by its agents or representatives for this purpose enter upon Lessee’s premises where the Aircraft may be located or cause the same to be redelivered to Lessor, and Lessor shall be entitled to act as attorney for Lessee in causing such redelivery or in directing pilots to fly the Aircraft to said airport for redelivery thereof to Lessor and shall have all the powers and authorisations legally necessary for taking such action (at Lessor’s election); and/or
(d) do anything that may be required to cure the Event of Default (notwithstanding Lessor having no obligation or responsibility to do so and without prejudice to Lessor’s right to treat any such non-compliance by Lessee as an Event of Default under this Lease) and recover from Lessee all costs and expenses incurred in doing so; and/or
(e) with or without taking possession thereof, sell all the Aircraft or any Item of Equipment at public or private sale, with or without advertisement, for cash or upon credit, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Aircraft or any Item of Equipment as Lessor in its sole discretion may determine appropriate, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds thereof, all in such manner and on such terms as Lessor considers appropriate in its absolute discretion, as if this Lease had never been entered into; and/or
(f) require Lessee to pay to Lessor all amounts due and payable by Lessee to Lessor and/or any Indemnitee under the Operative Documents to which it is a party as of the date of termination or cancellation of this Lease; and/or
(g) require Lessee to pay to Lessor on demand and to indemnify Lessor for, from and against all damages, costs, fees, disbursements and expenses incurred or recoverable (pursuant to Article 2A (Uniform Commercial Code – Leases) or other applicable Law) by Lessor or in connection with such Event of Default, including, but not limited to:

	  	74	  	ARTICLE 24	
	  		  	LESSOR’S RIGHTS AND REMEDIES	
	  		  	FOLLOWING AN EVENT OF DEFAULT	

(i) all losses, including lost profits (calculated on an After-Tax Basis) suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee or inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Lease and the other Operative Documents or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as leasing the Aircraft in accordance with the terms of this Lease and the other Operative Documents would have been, including, in each case, but without duplication, lost Rent payments during any remarketing period or during any period in which the Aircraft is placed in storage and which have not otherwise been paid by Lessee (and, without duplication, taking into account any expenses incurred by Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the Aircraft to meet the requirements of an alternative lessee); and
(ii) interest at the Past Due Rate on (A) any amounts due and payable by Lessee under this Lease, but not paid, and (B) any judgment against Lessee in respect of or related to this Lease or any other Operative Document issued by a court of competent authority until the same are paid in full; and
(iii) without duplication of any of the foregoing, any loss, cost, expense or liability sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Lease, including any costs, fees, disbursements and expenses incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing any Item of Equipment to the condition required by this Lease and (B) preparing any Item of Equipment for sale or lease, advertising the sale or lease of any such Items and selling or re-leasing the same; and
(iv) reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Default or Event of Default or the exercise of Lessor’s remedies with respect thereto; and/or
(h) without duplication of any of the foregoing, require Lessee to indemnify each Indemnitee on demand against any expense which such Indemnitee may sustain or incur as a result or consequence of such Event of Default, including (but not limited to) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or any Item of Equipment or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to any financings by Lessor or Owner in connection with this Lease, any Operative Document, any Item of Equipment or any rights thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums whatsoever paid or payable on account of funds borrowed, including funds borrowed in order to carry any unpaid Rent, any unpaid amount in respect of Maintenance Reserves, or other Obligations); and/or
(i) apply and/or set off against any Obligations and Lessor’s costs, damages, expenses and disbursements incurred in connection with such Event of Default, at Lessor’s discretion, all amounts paid to Lessor in respect of Maintenance Reserves or Security Deposit pursuant to this Lease, as well as any other amounts paid by Lessee under any Operative Document and Related Lease; and/or

	  	75	  	ARTICLE 24	
	  		  	LESSOR’S RIGHTS AND REMEDIES	
	  		  	FOLLOWING AN EVENT OF DEFAULT	

(j) require Lessee to redeliver possession of the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require); and/or
(k) exercise any of the rights, and avail itself of any of the remedies, provided by Article 2A (Uniform Commercial Code—Leases) and, to the extent applicable, Article 9 (Uniform Commercial Code—Secured Transactions) of the New York Uniform Commercial Code, or otherwise available under any other applicable Laws, including but not limited to the applicable rights and remedies provided by the Laws of the United Mexican States.
Without prejudice to Lessor’s other remedies under this Lease or any other Operative Document, Lessee agrees that the occurrence of an Event of Default shall entitle Lessor to automatically and unilaterally cancel or terminate this Lease without requirement of any prior notice or judicial intervention for all legal purposes. All costs and expenses incurred or advanced by Lessor for or on account of any Obligations following the occurrence and continuation of an Event of Default shall bear interest at the Past Due Rate from the date on which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment, if any).
24.2. De-Registration. If an Event of Default occurs and is continuing following Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) de-registration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease. Lessee hereby irrevocably and by way of security for its obligations under this Lease appoints (which appointment is coupled with an interest) Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing.
24.3. Present Value of Payments. In calculating Lessor’s damages hereunder, upon the occurrence of an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred, together with amounts, if any, scheduled to be paid by a new lessee after any re-lease of the Aircraft, will be calculated on a present value basis using a discount rate of ***** per annum, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof.
24.4. Remedies Cumulative. No remedy referred to in this Article 24 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
24.5. Lessor’s Exercise of Remedies. In effecting any repossession of the Aircraft (including the Aircraft Documents, any Item of Equipment, an Engine, or Part) (“ Repossessed Items ”), Lessor and its representatives and agents, to the extent permitted by Law, shall:
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	76	  	ARTICLE 24	
	  		  	LESSOR’S RIGHTS AND REMEDIES	
	  		  	FOLLOWING AN EVENT OF DEFAULT	

(a) have the right to enter upon any premises where it reasonably believes the Repossessed Items to be located;
(b) not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to any of the Repossessed Items; provided, however, that Lessor shall return to Lessee all personal property of Lessee and other Persons, including its employees or its passengers, which was on the Aircraft at the time Lessor repossessed the Aircraft;
(c) not be liable or responsible, in any manner, for any inadvertent damage to any of Lessee’s property in repossessing and holding any of the Repossessed Items, except to the extent caused directly by Lessor’s gross negligence or willful misconduct; and
(d) have the right to maintain possession of and dispose of the Repossessed Items on any premises owned by Lessee or under Lessee’s control.
24.6. Application of Payments Following Default or Event of Default. Any and all payments received by Lessor under this Lease and under any other Operative Document following the occurrence and during the continuation of a Default or Event of Default, whether in respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to the Obligations of Lessee in any manner or order as Lessor may determine in its sole discretion, notwithstanding any instructions, directions or notice given by Lessee or any other Person with respect to the application of such payments.
24.7. Use of Termination Date. If this Lease is cancelled or the leasing of the Aircraft is otherwise terminated and the Aircraft is repossessed in connection with Lessor’s exercise of remedies following the occurrence and during the continuation of an Event of Default prior to the Scheduled Termination Date, then notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Scheduled Termination Date” will be utilised in calculating the damages to which Lessor may be entitled to receive from Lessee pursuant to Section 24.1.
24.8. No Right to Maintain Possession. Upon cancellation of this Lease or termination of the leasing of the Aircraft following the occurrence and during the continuance of an Event of Default, Lessee shall have no right to maintain possession of the Aircraft or any Item of Equipment, and any de facto possession thereof exercised by Lessee shall be deemed illegitimate possession for all purposes of applicable Law with respect to the Aircraft and all Items of Equipment, and Lessee agrees to redeliver immediate possession of the Aircraft as directed by Lessor.

	  	77	  	ARTICLE 24	
	  		  	LESSOR’S RIGHTS AND REMEDIES	
	  		  	FOLLOWING AN EVENT OF DEFAULT	

25. ASSIGNMENT AND TRANSFER
25.1. No Assignment by Lessee. Except as permitted by Section 15.1, Lessee shall not transfer, assign, novate, mortgage or complete any other such or similar transfer of any interest in this Lease or any of its rights hereunder or in any Item of Equipment, and any such purported assignment shall be void ab initio .
25.2. Transfer of Lessor’s and/or Owner’s Interests. Each of Lessor, Owner, any Owner Participant and any Financing Party may at any time and without Lessee’s consent transfer to any Person (a “ Transferee ”) the Aircraft and/or all or any of its rights and obligations under this Lease and the other Operative Documents to which it is a party; provided that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party or its rights in respect of the Aircraft or any Item of Equipment, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer had not taken place; (ii) at the time of transfer, the Transferee shall have a net worth of no less than *****, or the obligations of Lessor under the Lease shall have been guaranteed by a guarantor having a net worth of no less than *****, or Transferee shall have agreed to hold all Security Deposits, Maintenance Reserves and insurance proceeds in excess of the Agreed Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer to or by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Lessee acknowledges that neither minimal increases in Lessee’s administrative obligations, including expenses, nor an increase in the number of Indemnitees and/or Additional Insureds as a result of such transfer shall not, in and of itself, constitute an increase in Lessee’s obligations hereunder. The foregoing shall apply with the same force and effect to the transfer of any beneficial interest in the Aircraft or any trust or similar entity.
25.3. Cooperation with Transfers. Lessee shall do such things and execute such documents as may be reasonably requested of it to give effect to a transfer contemplated by and made or to be made in accordance with the terms and provisions of Section 25.2, including (a) entering into an assignment and assumption agreement or novation deed with the Transferee in form and substance reasonably satisfactory to Lessee, and (b) providing Lessor reasonably requested scheduling and routing information for the Aircraft or the Item of Equipment being transferred. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses reasonably incurred by Lessee in connection with such transfer. Lessee shall make such amendments to the stated contracts and list of Additional Insureds in respect of the Insurances effected in respect of the Aircraft so as to ensure continued compliance with the requirements of Article 19 with regard to the interests of such Transferee and any new Financing Parties and shall provide to Lessor updated documentation evidencing such amendments.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	78	  	ARTICLE 25	
	  		  	ASSIGNMENT AND TRANSFER	

25.4. Financings. Owner, Lessor and any Owner Participant may at any time and without Lessee’s consent enter into any financing arrangements (which may include the conversion of the lease transaction contemplated by this Lease to a “leveraged lease” structure, a “head-lease, sub-lease” or other lease structure) with respect to the Aircraft pursuant to which (a) Lessor may assign its rights under this Lease and the other Operative Documents (by way of security) to Owner or to any Financing Parties and (b) Owner may execute a mortgage over the Aircraft in favour of the Financing Parties; provided, that (i) no such financing transaction shall increase Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional liabilities or obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party, based on laws enacted or in effect at the time of such transfer, than it would have had if such transfer had not taken place; (ii) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Basic Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Such financing arrangements may also take the form of a securitisation (a “ Securitisation ”) involving one or more loans from one or more financial institutions (each a “ Lender ”), and/or with notes, loan certificates, or pass through certificates issued pursuant to an indenture with a trustee (the “ Trustee ”), which notes, loan certificates or pass through certificates may be guaranteed (in whole or in part) by one or more monoline insurers (each, a “ Financial Guarantor ”).
25.5. Cooperation with Financings. Lessee shall cooperate with Lessor and do such things and execute such documents and make such filings and registrations in the State of Registration as may be requested of it by Lessor and/or Owner in order to protect the interests of the Financing Parties and/or Owner in connection with any financing contemplated by and made or to be made in accordance with the terms and provisions of Section 25.4 including, without limitation, (a) executing an acknowledgement of any assignment of Lessor’s rights under this Lease in favour of Owner or any relevant Financing Party, on terms customary in aircraft financing transactions or Securitisations, (b) providing Lessor scheduling and routing information for the Aircraft or any Item of Equipment being financed, (c) making such amendments to this Lease and any of the other Operative Documents and executing such additional documents, as may be reasonably be requested by Lessor in connection with the Securitisation, provided that any such amendment or additional documentation does not adversely affect the rights, or materially increase the obligations, of Lessee under the Lease and Operative Documents, and (d) making such amendments to the Insurances maintained in respect of the Aircraft to ensure continued compliance with the requirements of Article 19 with regard to the interests of Owner and any such Financing Party, and shall provide to Lessor updated documentation evidencing such amendments. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses incurred by Lessee in connection with such financing transaction.
25.6. Notice of Security Assignment. Lessor hereby provides irrevocable notice to Lessee that:
(a) pursuant to the Security Trust Agreement, Lessor has assigned to the Security Trustee by way of security, all of its right, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds (the “ Security Assignment ”), and Lessee is hereby authorised and required to make all payments to Security Trustee in accordance with the terms of this Lease until the Security Trustee otherwise directs, in writing, and Lessee is hereby authorised and required to comply with any such directions of the Security Trustee;

	  	79	  	ARTICLE 25	
	  		  	ASSIGNMENT AND TRANSFER	

(b) by executing and delivering the Lessee Acknowledgment, Lessee shall have confirmed its acknowledgment of an agreement for the benefit of the Security Trustee that the Security Trustee shall not be bound by, nor have any liability to Lessee for the performance of, any of the obligations of Lessor under this Lease save and to the extent otherwise expressly agreed in writing by the Security Trustee with Lessee, and Lessee is hereby irrevocably authorised to assume the obligations expressed to be assumed by Lessee under the Lessee Acknowledgment to the effect that, so far as the same would otherwise be incompatible with the Lease, Lessee’s obligations to Lessor under the Lease shall be modified accordingly; and
(c) by executing and delivering the Lessee Acknowledgment, Lessee shall have acknowledged that each of Owner and Lessor has appointed the Servicer as its servicer and attorney-in-fact in respect of the Lease and the Aircraft as contemplated in Section 27.3 hereof, and all communications received by Lessee from the Servicer in connection with this Lease and the Aircraft may and shall be relied upon (and complied with where the context calls for compliance) by Lessee as if Lessee received the same from Lessor and/or Owner, as the case may be, and Lessee may rely on this notice of such appointment until notified in writing to the contrary by Owner, Lessor or Security Trustee.
25.7. Transfer of Beneficial Interest. The provisions of Sections 25.2 and 25.3 shall be applicable to any sale, assignment, transfer or other conveyance by Owner Participant of all or any portion of its right, title and/or interest in or to the Aircraft, this Lease and/or the Beneficial Interest or by applicable Law as applied thereto.

	  	80	  	ARTICLE 25	
	  		  	ASSIGNMENT AND TRANSFER	

26. LAW AND JURISDICTION
26.1. Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
26.2. Consent to Jurisdiction. Each of Lessee and Lessor hereby expressly and irrevocably consents that any legal action or proceeding with respect to this Lease may be brought in any court of the State of New York or any Federal court of the United States of America located in New York, New York, located in the Borough of Manhattan, United States of America, or in any jurisdiction where Lessee or Lessor or any of their respective assets may be found, and by execution and delivery of this Lease, each of Lessee and Lessor hereby irrevocably and expressly submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts, irrevocably and expressly waiving the jurisdiction of any other courts to which it may be entitled by reason of its present or future domicile or otherwise.
26.3. Process Agent and Service of Process. Lessee shall, not later than the execution date of this Lease, irrevocably designate, appoint and empower a duly authorised agent for service of process in the State of New York reasonably acceptable to Lessor in any suit or proceeding with respect to this Lease. A copy of any such process served on such agent shall be promptly forwarded by airmail by the person commencing such proceeding to Lessee at its address set forth in Appendix 2B, but the failure of Lessee to receive such copies shall not affect in any way the service of such process as aforesaid. Lessee further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to Lessee at its address set forth in Appendix 2B. The foregoing, however, shall not limit the rights of Lessor to serve process in any other manner permitted by Law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction.
26.4. Jurisdiction and Forum. Lessee agrees that final judgment against Lessee in any action or proceeding in connection with this Lease shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of Lessee’s indebtedness. Lessee hereby irrevocably waives, to the fullest extent permitted by Law, any objection which Lessee may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the State of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York has been brought in an inconvenient forum. To the extent that Lessee may, in any jurisdiction in which proceedings may at any time be taken for the determination of any question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom), be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the Law of such jurisdiction.

	  	81	  	ARTICLE 26	
	  		  	LAW AND JURISDICTIONS	

26.5. Waiver of Jury Trial. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
26.6. Waiver of Immunity. Each party to this Lease agrees that in any legal action or proceedings against it or its assets in connection with this Lease and/or any other Operative Document no immunity from such legal action or proceedings (which shall include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) shall be claimed by or on behalf of it or with respect to its assets, irrevocably waives any such right of immunity which it or its assets now have or may hereafter acquire or which may be attributed to it or its assets and consents generally in respect of any such legal action or proceedings to the giving of any relief or the issue of any process in connection with such action or proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order of judgment which may be made or given in such action or proceedings.

	  	82	  	ARTICLE 26	
	  		  	LAW AND JURISDICTIONS	

27. MISCELLANEOUS
 
 	27.1.	Severability and Illegality.	
(a) Severability. Any provision of this Lease prohibited by or unlawful or unenforceable under any applicable Law actually applied by any court of competent jurisdiction shall, to the extent required by such Law, be severed from this Lease and rendered ineffective so far as is possible without modifying the remaining provisions of this Lease.
(b) Illegality.
(i) If at any time there is a change in any applicable Law binding upon Lessee or Lessor in its State of Organisation or where it has its principal office or in any jurisdiction in which any action is required to be performed by it for the purposes of any Operative Document which renders, or which will render, it unlawful for such party to perform any of its obligations or to exercise any of its rights under any Operative Document (an “ Illegality Event ”) and the parties are not able to restructure the transaction in accordance with Section 27.1(b)(iii), Lessor or Lessee (as the case may be) shall forthwith notify the other party hereto and Lessor or Lessee (as the case may be) shall be entitled by written notice (the “ Illegality Notice ”) to the other party, either:
(A) to terminate its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease; or
(B) if such event occurs after the Delivery Date, to terminate the Lease Term,
in each such case, on the Relevant Date.
(ii) In Section 27.1(b) “ Relevant Date ” means the later to occur of:
(A) the date of the Illegality Notice; and
(B) a future date specified in the Illegality Notice being prior to the date on which the Illegality Event takes effect.
(iii) Lessor and Lessee shall, for a period of ***** from the date Lessor or Lessee becomes aware that an Illegality Event will arise or has arisen, or such shorter period ending on the Business Day prior to the date on which such Illegality Event takes place, and provided that no Event of Default has occurred and is continuing, negotiate in good faith and take all commercially reasonable steps (subject to Section 27.1(b)(iv) below) which are available to mitigate the effects of such Illegality Event, with a view to restructuring the transaction in a manner such that the leasing of the Aircraft to Lessee may continue on the same commercial terms as under this Lease, including, without limitation, by way of amendment, novation or replacement to any Operative Document, or termination of, any Operative Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	83	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

(iv) Nothing in Section 27.1(b)(iii) above shall, or shall be construed so as to, oblige Lessor to take any mitigating steps (including, without limitation, omitting to act) if, in its reasonable opinion, to do so:
(A) would or would be likely to involve it in any unlawful activity or any activity that is contrary to any Law; or
(B) unless indemnified to its satisfaction, would involve it in any cost, loss, liability or Tax disadvantage; or
(C) would be prejudicial to it, the Aircraft or the other Indemnitees.
(v) The cost of any mitigation pursuant to this Section 27.1(b) shall be for the account of Lessee.
(vi) If Lessor or Lessee shall have terminated the Lease Term or its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease in accordance with Section 27.1(b)(i), then on the Relevant Date, Lessee shall:
(A) return the Aircraft to Lessor in accordance with the provisions of Article 22 if the Aircraft has been delivered to Lessee under this Lease, unless a Lessor Illegality Event has occurred in which case the Aircraft shall be returned to Lessor in its then as-is condition, but in any event, having been operated and maintained throughout the Lease Term in accordance with the provisions of this Lease; and
(B) pay to Lessor the amounts provided in Section 24.1, clauses (f), (g) and (h), and Section 24.3 as if references therein to an “Event of Default” were to the termination of the Lease Term pursuant to Section 27.1(b)(i).
27.2. Amendments. No term or provision of this Lease may be amended, modified, waived, discharged or terminated orally, but only by a written instrument signed by Lessor and Lessee.
27.3. Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer.
(a) If Lessee fails to perform or comply with any Obligations, Lessor shall have the right, but not the obligation, to discharge such obligation, and the amount of such payment made and the expenses of Lessor incurred in connection with such discharge shall be payable by Lessee upon demand, together with interest at the Past Due Rate from the date such expenses were incurred.
(b) (i) Lessor may delegate to any Person or Persons (including, without limitation, the Servicer) all or any of the rights, powers or discretions vested in it by this Lease or any of the other Operative Documents, and any such delegation may be made upon such terms and conditions and subject to such regulations (including the power to sub-delegate) as Lessor in its absolute discretion deems fit;

	  	84	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

(ii) Pursuant to a servicing agreement between Servicer, Owner and Lessor, Servicer has been appointed by Lessor and Owner as servicer for all matters related to this Lease and the Aircraft, and accordingly, except with respect to payments of Rent, Supplemental Rent, Maintenance Reserves and other amounts payable hereunder which shall be paid as provided herein, Lessee shall communicate with and deal with Servicer with respect to all matters relating to this Lease and the Aircraft as if the Servicer were the Owner and Lessor under this Lease, until notified in writing to the contrary by Owner, Lessor or Security Trustee;
(iii) Pursuant to a management agreement among Manager, Owner Participant, Security Trustee and other parties thereto, Manager has been appointed to provide certain administrative services for Owner Participant, Owner and Lessor in connection with this Lease and the Aircraft.
27.4. Counterparts. This Lease may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
27.5. Delivery of Documents by Electronic Means. Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or other electronic image file will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or other electronic image file will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
27.6. Survival. The representations, warranties, covenants, agreements and indemnities (including, without limitation, the indemnities contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the Termination Date to the extent required for full performance and satisfaction thereof.
27.7. Entire Lease. This Lease (including all Appendices) and the other Operative Documents executed pursuant hereto constitute the entire agreement between Lessor and Lessee regarding the Aircraft and any prior or contemporaneous written or oral understandings with regard to the subject matter hereof are superseded hereby in their entirety.
27.8. Successors and Assigns. Subject to the provisions of Article 25, the terms and provisions of this Lease and each other Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns.
27.9. Brokers. Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorney’s fees and disbursements) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the lease of the Aircraft, if such claim, damage, cost or expense arises out of any action or alleged action by the indemnifying

	  	85	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

party, its employees or agents. It is understood and agreed between the parties that this Lease has been concluded by direct negotiation without any intermediaries or agents. Lessee hereby represents and warrants that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Lease, to any employee of Lessor or to any Person.
27.10. Transaction Costs. Whether or not the transactions contemplated hereby are consummated, each party hereto agrees to pay its own costs and expenses incurred in connection with the preparation, execution and delivery of this Lease and any other documents delivered in connection herewith, including without limitation the fees, expenses and disbursements of counsel, except as otherwise expressly set forth herein. In addition, Lessee shall be solely responsible for (i) all costs, including attorneys’ fees and disbursements, incurred in registering the Aircraft and an executed counterpart of this Lease and the Lease Supplement in the State of Registration and any other jurisdiction wherein registration of the same is necessary as a result of the operation of the Aircraft by Lessee or any Permitted Sublessee, and (ii) all costs, including attorneys’ fees and disbursements, incurred in connection with the de-registration of the Aircraft from the Register or any other applicable Aeronautics Authority upon the cancellation or termination of this Lease in accordance with the provisions hereof. Each of Lessor and Lessee agrees to pay the reasonable costs and expenses (including attorneys’ fees and disbursements) of the other party incurred in connection with the entering into or giving or withholding of any future waiver, supplement or amendment or other action with respect to the Lease or any other document delivered in connection therewith that it may request, except in the case of an Event of Default in which case all of such costs shall be at the expense of Lessee.
27.11. Time is of the Essence. Time and strict and punctual performance are of the essence with respect to each provision of this Lease.
27.12. Language.
(a) This Lease is in the English language and all notices, opinions, financial statements and other documents given under this Lease shall be provided in the English language or, if not submitted in the English language, shall be accompanied by one certified copy of an English translation thereof for each copy of the foregoing so submitted.
(b) If this Lease or any other Operative Document is required to be translated into another language for the purposes of any filing or registration, (i) Lessee shall procure and pay for any such translation, and (ii) the English version shall prevail in the event of any conflict with any such non-English version.
27.13. No Rights of Third Parties. No third parties, other than Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed to have a right to ( x ) benefit from, or ( y ) seek to enforce, any of the provisions of this Lease.
27.14. Delegation. Lessor may delegate to any appropriately licensed and/or experienced person(s) all or any of the rights, powers or discretions vested in it by this Lease or any other Operative Document and any such delegation may be made upon such terms and conditions as between such person and Lessor as Lessor in its absolute discretion may determine.

	  	86	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

27.15. Further Assurances. Lessee shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by Law or reasonably requested in writing by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purposes of this Lease and the other Operative Documents.
27.16. Rights at Law. Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of Lessor hereunder or under any other Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of Lessor under the Operative Documents (i) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (ii) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and (iii) shall be cumulative and not mutually exclusive and the exercise of one shall not be deemed a waiver of the right to exercise any other.
27.17. Confidentiality.
(a) During the Lease Term all Information shall remain confidential and the parties hereto and their respective Affiliates will use their respective reasonable efforts not to disclose the Information to any other Person without prior written consent of each other party, which consent shall not be unreasonably withheld; provided, that Lessor and Lessee may, without the consent of each other party, disclose the Information in any of the following situations:
(i) To directors, officers, employees, permitted assigns and agents of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(ii) To auditors, accountants or legal advisors of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(iii) To actual or potential lenders/Financing Parties, purchasers or other permitted assigns of Lessor, Owner Participant, Lessee or any Affiliate of any of such parties, including but not limited to providing financial information about Lessee to potential lenders/Financing Parties to, and purchasers from, Lessor, provided that, upon the request of Lessee, such potential lenders/Financing Parties will agree to keep such Information confidential in a manner similar to the provisions hereunder and that their access to Information is solely for purposes of evaluating an investment in a Securitisation or other financing of the Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a form reasonably acceptable to Lessee; or
(iv) To rating agencies with respect to ratings of Lessor, Owner, Owner Participant, or a related Securitisation; or
(v) To such other parties as Lessor, Owner Participant, Servicer, Manager or Lessee may reasonably believe to be required by Law (including, without limitation any regulation or order of a bank regulatory agency), by subpoena or by any other legal process.

	  	87	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

(b) Notwithstanding any of the foregoing, Information will not be considered confidential, and Lessor, Owner Participant, Servicer, Manager and Lessee and their respective Affiliates may disclose any item of the Information without restriction in any of the following circumstances, if such item:
(i) is publicly available (either to the general public or to any relevant trade or industry) prior to any party’s receipt of it from another party hereto;
(ii) is thereafter made publicly available (either to the general public or to any relevant trade or industry) by another party hereto or by a third party which is entitled to make such item publicly available;
(iii) becomes available to any party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it; or
(iv) was known to any party hereto on a non-confidential basis prior to its disclosure to such party by another party hereto.
27.18. Notices. All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally, when telecopied, or if deposited in the mail, when received, to the addressees appearing in Appendix 2B or to such other address as any party may designate for itself by written notice to the other party or parties.

	  	88	  	ARTICLE 27	
	  		  	MISCELLANEOUS	

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 09 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	/s/ Mario E. Geyne Pliego	 		 	By:	 	/s/ Alan Geraghty	
Name:	 	Mario E. Geyne Pliego	 		 	Name:	 	Alan Geraghty	
Title:	 	Financial and Fleet Planning Director	 		 	Title:	 	Director	
					
By:	 	/s/ Sergio Rabago	 		 		 		
Name:	 	Sergio Rabago	 		 		 		
Title:	 	Legal Corporate Manager	 		 		 		
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	  		  	SIGNATURE PAGE	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 09 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	/s/ Mario E. Geyne Pliego	 		 	By:	 	/s/ Alan Geraghty	
Name:	 	Mario E. Geyne Pliego	 		 	Name:	 	Alan Geraghty	
Title:	 	Financial and Fleet Planning Director	 		 	Title:	 	Director	
					
By:	 	/s/ Sergio Rabago	 		 		 		
Name:	 	Sergio Rabago	 		 		 		
Title:	 	Legal Corporate Manager	 		 		 		
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

SECURITY TRUSTEE RECEIPT
 
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as the Security Trustee	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

	  		  	CHATTEL PAPER ORIGINAL SIGNATURE PAGE	

Appendix 1
to Aircraft Lease Agreement
DEFINITIONS
“ Acceptance Certificate ” means the acceptance certificate executed and delivered by Lessee to Lessor at Delivery in the form of Appendix 3.
“ Additional Insureds ” means the Indemnitees and each of them.
“ Aeronautics Authority ” means the DGAC or such other governmental department, bureau, commission or agency that under the Law of the State of Registration shall from time to time have control or supervision of civil aviation in that state or have jurisdiction over the registration, airworthiness, operation, or other matters relating to, the Aircraft.
“ Affiliate ” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified.
“ After-Tax Basis ” means, with respect to any indemnity or other amount (an “ Amount ”) which is required by any Operative Document to be paid on an “After-Tax Basis” by Lessee (or by any other Person on account of any Obligation of Lessee under the Operative Documents) to any Indemnitee (or to any other Person for the account or benefit of any Indemnitee), payment of such Amount supplemented to the extent necessary by a further payment or payments that will cause the sum of all such payments, reduced by the aggregate amount of all Taxes payable by any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments by any Indemnitee, net of any actual current reduction in any Indemnitee’s liability for Taxes caused by the allowance of any deduction, Tax credit or other Tax benefit for the Tax, Claim, cost or expense that gave rise to Lessee’s liability to pay such Amount, to be equal to the Amount that is required to be paid on an “After-Tax Basis”, provided, that for the purpose of calculating the amount of Taxes imposed on any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments, it shall be assumed that such Indemnitee is subject to each Tax that is imposed on or payable by such Indemnitee with respect to the accrual, actual receipt or constructive receipt of each such payment at the highest marginal statutory Tax rate applicable to such Indemnitee for the Tax accounting period in which such Indemnitee accrues or receives (actually or constructively) such payment.
“ Agreed Value ” means, with respect to the Aircraft, the amount set forth in Appendix 2B.
“ Aircraft ” means, as the context may require or permit, the Airframe together with (i) the Engines, whether or not installed on the Airframe, (ii) all Parts or components thereof, (iii) any spare parts or ancillary equipment or devices furnished with the Airframe or the Engines under this Lease, (iv) all items of equipment and other property, tangible and intangible, described in the Acceptance Certificate delivered on the Delivery Date and not otherwise described in the preceding portions of this definition, (v) all Aircraft Documents, (vi) all substitutions, replacements and renewals of any and all thereof, and (vii) all alterations, modifications and additions which may be made to, installed on or incorporated into the Aircraft, including but not limited to, those required pursuant to any Airworthiness Directive.
“ Aircraft Documents ” means, whether in paper, photographic, digital, electronic or other medium, (i) the manuals and records identified in the attachments to the Acceptance Certificate hereto and all other records and documentation pertaining to the Aircraft and delivered with the Aircraft on the Delivery Date

	  	App 1 - 1	  	APPENDIX 1	
	  		  	DEFINITIONS	

and (ii) all other Required Approvals, records and documentation generated during the Lease Term that are related to the maintenance, inspections and alterations, modifications and additions accomplished during the Lease Term with respect to the Aircraft and required to be maintained by Lessee either by the Aeronautics Authority or in order to comply with the provisions of this Lease.
“ Airframe ” means the Airbus A319-132 aircraft (except for the Engines) as more specifically described in the Lease Supplement, together with the APU, all Landing Gear and any and all Parts.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued by the Certificating Authority, in addition to any airworthiness directive issued by the Aeronautics Authority, each to the extent the same is applicable to the Aircraft and/or any Item of Equipment.
“ Alert Service Bulletin ” means any service bulletin issued by a Manufacturer that is designated as such by such Manufacturer.
“ Approved Maintenance Organisation ” means the Manufacturer or a maintenance facility approved by the Aeronautics Authority and also by the FAA pursuant to FAR Part 145 and/or the EASA pursuant to EASA Part-145 for the performance of maintenance, testing, inspection, repair, overhaul or modification on the Aircraft or any Item of Equipment.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date, or any replacement thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to such auxiliary power unit and any and all Parts removed therefrom.
“ APU Cycle ” means one complete continuous operation of the APU beginning at the moment the APU is started and continuing until it subsequently shuts down.
“ APU Hour ” means each hour or part thereof, rounded to the nearest minute, elapsing from the moment the APU is started to the moment when the APU is shut down.
“ APU Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “APU Overhaul Reserve”.
“ Basic Rent ” means the rent payable for the Aircraft under this Lease in the amount determined in Appendix 2B, and which shall include both PBH Rent and Fixed Rent.
“ Beneficial Interest ” means the entire beneficial interest in the trust established by the Trust Agreement.
“ Business Day ” means (a) in respect to the determination of LIBOR, a day on which U.S. Dollar deposits may be dealt in the London inter-bank market; (b) in the case of payments under this Lease or any Operative Document, any day (other than Saturday or Sunday) on which banks are open for business in New York, United States of America; and (c) in all other cases, any day (other than Saturday or Sunday) on which banks are open for business in Ireland, the State of Registration and if different from the State of Registration, Lessee’s State of Organisation.
“ C-Check ” means with respect to the Aircraft, (i) the accomplishment of Tasks that, at the time of such check, would require accomplishment prior to the next due c-check based upon the interval for each such Task in the MPD, and where such Tasks are controlled by Flight Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the rectification of each defect discovered during the accomplishment of such Tasks.

	  	App 1 - 2	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Calendar Month ” means the period commencing on and including the Delivery Date and ending on and including the last day of the calendar month in which the Delivery Date occurs and each of the consecutive calendar monthly periods thereafter throughout the Lease Term, provided that the final Calendar Month of the Lease Term may consist of less than a calendar month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a calendar month.
“ Cape Town Convention ” means, together, the official English language text of each of the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Protocol ”) each as opened for signature on 16 November 2001 at Cape Town, South Africa.
“ Cash Security Deposit ” means the portion of the Security Deposit paid in cash in the amounts in Appendix 2B.
“ Certificating Authority ” means the EASA.
“ Certificating Authority Form ” means an EASA Form One or an FAA Form 8130-3, any dual release form approved by both the EASA and the FAA, or any successor to either such forms.
“ Claims ” means any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any reasonable attorney’s fees and other reasonable and documented out-of-pocket costs and expenses in connection therewith or in establishing the right to indemnification hereunder, including any of the foregoing arising or imposed with or without the fault or negligence of any Indemnitee (whether passive or active) or under the doctrine of strict or absolute liability.
“ Credit Security Deposit ” means the portion of the Security Deposit paid by Lessee in the form of a Security Letter of Credit in the amount specified in Appendix 2B.
“ Cycle ” means one take-off and landing of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed).
“ Default ” means any event, condition or circumstance which, with the lapse of time and/or the giving of notice which would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft by Lessor to Lessee in accordance with this Lease and which shall be evidenced by execution and delivery of the Lease Supplement and the Acceptance Certificate.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Location ” means an airport in Europe or such other location as may be agreed to in writing by Lessor and Lessee.
“ DGAC ” means the Mexican General Department of Civil Aeronautics (Dirección General de Aeronáutica Civil) and any successor agency thereto established to regulate civil aircraft registered in the United Mexican States.
“ Documents Loss ” means the loss or destruction of the Aircraft Documents or any of them.

	  	App 1 - 3	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Dollars ” or “ $ ” means the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency, an agency of the European Union having responsibility for aviation safety, regulation and oversight of member states of the European Union, or any Person, governmental department, bureau, commission or agency succeeding to the functions of the European Aviation Safety Agency.
“ EASA Requirements ” means, as applicable to the Aircraft, (i) any of the regulations, rules, or decisions of, or governing the EASA, and (ii) EU-OPS 1.
“ Engine(s) ” means each of the engines identified in the Lease Supplement, or any replacement of any thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to any such Engine and any and all Parts removed therefrom.
“ Engine Agreed Value ” means, with respect to each Engine when not installed on the Airframe, the amount set forth in Appendix 2B.
“ Engine Life Limited Parts Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Life Limited Parts Reserve”.
“ Engine Loss ” means the occurrence of (a) an Event of Loss with respect to an Engine only (whether or not installed on the Airframe) or (b) any divestiture or impairment of any right, title or interest of Lessor in or to an Engine as a result of the installation of such Engine on any other airframe.
“ Engine Restoration ” means any engine shop visit having a workscope that at a minimum, includes a complete refurbishment or full overhaul of the high pressure turbine and combustion section of the relevant Engine, accomplished in accordance with the Engine Manufacturer’s Engine Maintenance Management Program applicable to the Engine.
“ Engine Restoration Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Restoration Reserve”.
“ EU-OPS 1 ” means the technical requirements and administrative procedures implemented pursuant to Council Regulation (EEC) No. 3922/91, as amended by Regulation (EC) No. 1899/2006 of the European Parliament and Council of the EU, and as the same is further amended from time to time.
“ European Union ” or “ EU ” means the union of countries established pursuant to the Treaty of Maastricht, which came into effect on November 1, 1993, as amended by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the Treaty of Nice signed on February 26, 2001, and as may be amended from time to time.
“ Event of Default ” means those events and circumstances listed in Article 23.
“ Event of Loss ” means, with respect to any Item of Equipment (excluding Parts), any of the following events:
(a) the agreed, actual, arranged, compromised or constructive total loss of such Item (including any damage to the same which results in an insurance settlement on the basis of a total loss, or requisition for use or hire of the same which results in an insurance settlement on the basis of a total loss); or

	  	App 1 - 4	  	APPENDIX 1	
	  		  	DEFINITIONS	

(b) the destruction or damage that permanently renders such Item to be unfit for normal use for any reason whatsoever; or
(c) the requisition of title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, condemnation or confiscation for any reason of such Item by a Governmental Authority or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title of such Item; or
(d) the hijacking, theft, or disappearance of such Item (i) for a period of sixty (60) days or more or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(e) the condemnation, confiscation, capture, deprivation, seizure or requisition for use or hire of the Airframe or the deprivation of the possession or use of the Airframe as a result of any Law or other action by the Aeronautics Authority or any Governmental Authority (other than where the same amounts to the circumstances provided in clause (c)) which deprives any Person entitled to have possession and/or use of the Item of its possession and/or use (i) for more than a period of sixty (60) consecutive days or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(f) any other case which by subsequent written agreement Lessor and Lessee may deem, with the agreement of the insurers, to be an Event of Loss.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“ Event of Loss Date ” means (a) with respect to any Event of Loss set forth in paragraph (a) of the definition thereof, the earliest of (i) the date of actual loss, (ii) the date on which the loss is agreed, arranged or compromised by the insurers and (iii) sixty (60) days after the date of notice to Lessee’s brokers or insurers claiming the loss, (b) with respect to any Event of Loss set forth in paragraph (b) or (c) of the definition thereof, the date such event, condition or circumstance occurs or, if such date is not known, the date on which the relevant property was last known to exist, (c) with respect to any Event of Loss set forth in paragraph (d) or (e) of the definition thereof, the earlier of (i) the date on which insurers make payment on the basis of an Event of Loss and (ii) the date falling thirty (30) days after the expiration of the period, or the continuation of the condition or circumstance beyond the date, described therein or (d) with respect to any Event of Loss set forth in paragraph (f) of the definition thereof, the date of the subsequent agreement reached by Lessor and Lessee, with the agreement of the insurers.
“ Event of Loss Proceeds ” means the proceeds of any Insurances or any compensation or similar payment arising, in respect of an Event of Loss.
“ Excluded Taxes ” has the meaning provided in Section 21.1(b) hereof.
“ Excusable Delay ” means any delay in Delivery not occasioned by the fault or negligence of Lessor and/or due to or arising from Lessor’s reasonable control including, without limitation, (i) acts of God or the public enemy, natural disasters, civil war, insurrection or riots, quarantine restrictions, strikes, lockouts, or labour stoppages (other than strikes, lockouts or labour stoppages of Lessor and/or its Affiliates), (ii) fires, floods, explosions, earthquakes, epidemics or serious accidents, (iii) delays relating to or arising out of maintenance work accomplished or to be accomplished on any Item of Equipment prior to Delivery hereunder, and/or (iv) delays relating to any failure of the Prior Operator to return the Aircraft at the time and location and in the condition required by the Prior Lease.

	  	App 1 - 5	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ FAA ” means the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any Person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“ FAR ” means the federal aviation regulations as set forth in Title 14 of the United States Code of Federal Regulations, Chapter 1 (Parts 1 - 199). 
“ Final Check ” shall have the meaning ascribed to such term in Section 3.1 of Appendix 2E. 
“ Financing Party ” means the Security Trustee, the Liquidity Provider, Servicer, Manager, and any other Person or Persons, from time to time notified by Lessor to Lessee, from whom financing for the acquisition or continued ownership of the Aircraft by Lessor (or Owner if Lessor is not the Owner) has been, is to be, or is for the time being, obtained and/or in whose favour or for whose benefit security over the Aircraft is to be, or is for the time being, granted by Lessor or Owner (as the case may be), any security trustee, owner trust or trustee, manager, servicer, lender and/or financial guarantor.
“ Fixed Rent ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Commencement Date ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Period ” means the period commencing on and including the Fixed Rent Commencement Date and ending on and including the last day of the Calendar Month in which the Fixed Rent Commencement Date occurs and each of the consecutive Calendar Month periods thereafter throughout the Lease Term, provided that the final Fixed Rent Period of the Lease Term may consist of less than a full Calendar Month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a full Calendar Month.
“ Flight Hour ” means each hour or fraction thereof, measured to two decimal places, elapsing from the moment the wheels of the Airframe (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed) leave the ground on take-off to the moment when the wheels of the Airframe (or such aircraft on which an Engine, Landing Gear, or Part is (or was) then currently installed) touch the ground on landing.
“ GAAP ” means (i) generally accepted accounting principles in effect in Mexico or (ii) International Financial Reporting Standards and International Accounting Standards (and interpretations thereof) as in effect at the relevant time, and applied on a basis consistent with prior periods except as may be disclosed in the pertinent Person’s financial statements.
“ Governmental Authority ” means and includes (whether having a distinct legal personality or not) (a) any national government, political subdivision thereof, or local jurisdiction therein, (b) any board, commission, department, division, organ, instrumentality, court or agency of any entity referred to in (a) above, however constituted, and (c) any association, organisation or institution (international or otherwise) of which any entity mentioned in (a) or (b) above is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.
“ Guarantee ” means that certain guarantee provided to Lessor by the Guarantor pursuant to which Guarantor has fully and irrevocably guaranteed all of Lessee’s Obligations.

	  	App 1 - 6	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Guarantor ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., a sociedad anónima de capital variable organized and existing under the laws of the United Mexican States.
“ I.A.T.A. ” means the International Air Transport Association.
“ Indemnified Tax(es) ” means any Tax for which Lessee has an obligation of indemnity pursuant to Article 21 of the Lease.
“ Indemnitee ” means Lessor, Owner, Trust Company, Owner Participant, Security Trustee and the institution acting as such in its individual capacity, Liquidity Provider, Servicer, Manager, any Financing Party, and their respective Affiliates, officers, directors, shareholders, members, managers, duly authorised agents, employees and attorneys-in-fact and their respective successors and permitted assigns.
“ Information ” means the terms and conditions of this Lease and any other Operative Document and any other information delivered to any party to this Lease in connection with this Lease or any Operative Document.
“ Insurances ” means any and all contracts or policies of insurance (or reinsurance) required to be maintained from time to time under this Lease.
“ International Registry ” or “ IR ” means the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
“ Item of Equipment ” or “ Item ” means individually or collectively, as the context requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear, the APU and any of the Parts, whether or not installed in or attached to the Aircraft or the Airframe.
“ Landing Gear ” means the complete strut assembly of each landing gear installed on the Airframe on the Delivery Date (or any replacement for any such landing gear made pursuant to the terms of this Lease) and shall consist of the inner and outer cylinders of the main landing gear and the nose landing gear, including the truck assembly and axles of such landing gear.
“ Landing Gear Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “Landing Gear Overhaul Reserve”.
“ Law ” means and includes (a) any statute, decree, constitution, regulation, rule, order, judgment, AD or other directive of any Governmental Authority; (b) any treaty, pact, compact or other agreement to which any Governmental Authority is a party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any of the foregoing.
“ Lease ” means this Aircraft Lease Agreement, including all appendices, exhibits and schedules hereto, as the same may be amended from time to time.
“ Lease Supplement ” means the lease supplement dated the Delivery Date in the form of Appendix 4.
“ Lease Term ” means the period appearing in Appendix 2A which otherwise commences on the Delivery Date and ends on the Termination Date.
“ Lease Term Extension ” has the meaning set forth in Appendix 2A.

	  	App 1 - 7	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Lessee Acknowledgment ” means Lessee’s acknowledgment of security assignment substantially in the form set out in Appendix 8.
“ Lessee’s Actual Cost ” means Lessee’s cost incurred in performing an Obligation under this Lease, determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then Lessee’s Actual Cost shall be the actual charges, including, without limitation, shipping, freight mark-ups and handling charges of such third party charged to and paid by Lessee (but excluding shipping and freight charges and mark-ups, handling charges or overhead added by Lessee), and (ii) if Lessee elects that such obligation be performed by Lessee, then Lessee’s Actual Cost shall be ***** per labor hour (which hourly labor rate shall be increased by ***** at each calendar anniversary of the Delivery Date during the Lease Term) plus Lessee’s direct cost for materials and services provided by third parties without Lessee-imposed mark-ups, handling charges or overhead added to such third-party charges by Lessee.
“ Lessor Illegality Event ” means any event which makes it illegal under applicable Law for Lessor to proceed with the transaction evidenced hereby because of illegality in Lessor’s State of Organisation, or such illegality arises as a result of any act or omission of Lessor, other than:
(a) where caused due to any bi-lateral or United Nations sanctions applicable in Lessor’s State of Organisation; or
(b) in circumstances where an Illegality Event has also occurred in Lessee’s State of Organisation.
“ Lessor’s Lien ” means any Lien on the Aircraft or any Item of Equipment (i) granted to any Financing Party with respect to the Aircraft or any Item of Equipment except where the same are granted in connection with and following the occurrence and during the continuation of an Event of Default, (ii) arising as a result of any act of Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner or Owner Participant that is in violation of any of the obligations of such Person under the Lease and the other Operative Documents, (iii) any Claim against Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner, Owner Participant or any Person lawfully claiming by or through any of them that is unrelated to the transactions contemplated by the Lease, (iv) any Liens arising in connection with a Claim for which Lessee is not required to indemnify an Indemnitee hereunder; or (v) Taxes (including claims therefor) imposed on Lessor or any Affiliate of Lessor for which Lessee is not obligated to indemnify Lessor or such Affiliate pursuant to any of the Operative Documents.
“ LIBOR ” means, for any period, the three-month rate of interest per annum at which deposits in Dollars are offered to major banks in the London interbank market at approximately 11:00 a.m. (London time) three (3) Business Days before the first day of such period, as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as may replace such page on such system for the purpose of reporting London Interbank Offered Rates of major banks) under the heading for British Bankers Association Interest Settlement Rates in the column designated “USD” (U.S. Dollar).
“ Lien ” means any mortgage, charge, pledge, lien, hypothecation, lease, title retention, assignment, trust arrangement, right of possession or detention or security interest of any kind, howsoever created or arising.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 1 - 8	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Life Limited Part ” or “ LLP ” means any Part that has a pre-determined life limit mandated by the Manufacturer or the Certificating Authority which requires any such Part to be discarded upon reaching such life limit.
“ Liquidity Provider ” means DVB Bank SE, its successors and assigns.
“ Lost Documents ” means Aircraft Documents that have suffered a Documents Loss.
“ Maintenance Check(s) ” means the 6 Year HMV Check and/or 12 Year HMV Check performed or to be performed on the Airframe, any Engine Restoration performed or to be performed on an Engine, any Engine LLP replacement or any Overhaul performed or to be performed on any Landing Gear or the APU. 
“ Maintenance Program ” mean Lessee’s maintenance program (as approved by the Aeronautics Authority) for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Aircraft and each Item of Equipment.
“ Maintenance Reserve Claim ” means any claim by Lessee for payment by Lessor from the applicable Maintenance Reserves of Reimbursable Expenses following completion by Lessee of a Maintenance Check.
“ Maintenance Reserve(s) ” means, collectively, as of any given time, the then current balance of payments received from Lessee and held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2C to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve, Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear Overhaul Reserve and APU Overhaul Reserve.
“ Manager ” means C.I.T. Leasing Corporation, a corporation organised under the laws of the State of Delaware, U.S.A. with its principal office located at 1 CIT Drive, Livingston, New Jersey, 07039-5703 U.S.A., its successors and assigns.
“ Manufacturer ” means, in the case of the Airframe, Airbus S.A.S., in the case of the Engines, IAE International Aero Engines AG, and in the case of any Item of Equipment, the manufacturer of such Item of Equipment.
“ Manufacturer’s Repair Manual ” means the most current revision of the respective (i) maintenance, repair or overhaul manual or (ii) the structural repair manual, each issued by the Manufacturer and applicable to the maintenance performed on the Aircraft or any Item of Equipment.
“ Mortgage Convention ” means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.
“ MPD ” means the Airframe Manufacturer’s Maintenance Planning Document, as revised from time to time to include all revisions up to and including the then most current revision issued by the Airframe Manufacturer.

	  	App 1 - 9	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Net Event of Loss Proceeds ” means any Event of Loss Proceeds actually received by Lessor or Owner (or such other person entitled to receipt thereof), less any expenses (including reasonable attorney’s fees and costs) and/or Taxes incurred by Lessor (or any other relevant Person) in connection with the collection or receipt of such funds which would not otherwise have been incurred by Lessor (or such other relevant Person) absent the occurrence of such Event of Loss.
“ Obligations ” means all of Lessee’s obligations and liabilities now existing or hereafter arising under any Operative Document.
“ Operative Document(s) ” means, either collectively or individually as the context requires, this Lease, the Lease Supplement, the Acceptance Certificate, the Guarantee, any warranty assignment, acknowledgment and consent, any Permitted Sublease, the Lessee Acknowledgment, the Security Letter of Credit (if any), and any and all other documents, instruments and agreements entered into in connection with any of the foregoing and to which Lessee is a party or which Lessee acknowledges, in writing, is an Operative Document.
“ Overhaul ” means (as applicable):
(i) with respect to any Landing Gear or Part, the complete refurbishment or major restoration of such Landing Gear or Part in accordance with the overhaul or restoration procedures in the respective Manufacturer’s Repair Manual for such Landing Gear or Part, the extent of which refurbishes or restores such Landing Gear or Part, as applicable, to a “zero time since overhaul” condition in accordance with such Manufacturer’s Repair Manual;
(ii) with respect to the APU, the complete refurbishment or restoration of the compressor, combustion section and turbine of the APU pursuant to the Manufacturer’s Repair Manual; and
(iii) with respect to any Engine, an Engine Restoration.
“ Owner ” means Lessor in its capacity as owner of the Aircraft or such other Person as Lessor may notify Lessee in writing from time to time as being the owner of the Aircraft.
“ Owner Participant ” means CIT Aviation Finance II Limited, a Bermuda limited liability company that is a tax resident in Ireland, which is the holder of the Beneficial Interest as owner participant under the Trust Agreement, its successors and permitted assigns.
“ Part(s) ” means all appliances, components, parts, instruments, appurtenances, accessories, furnishings, seats and other equipment and additions of whatever nature (other than Engines, the APU, any Landing Gear, and any temporary replacement parts installed pursuant to Article 12 of the Lease), which may from time to time be incorporated or installed in or attached to any Item of Equipment or which have been removed therefrom, but which remain associated with and/or form part of the Aircraft or any Item of Equipment pursuant to the terms of the Lease.
“ Past Due Rate ” means the lesser of (i) the rate per annum equal to LIBOR plus four hundred (400) basis points, and (ii) the maximum rate permitted by applicable Law.
“ PBH Period ” has the meaning set forth in Appendix 2B.
“ PBH Rent ” has the meaning set forth in Appendix 2B.
“ PBH Rent Payment Date ” the meaning set forth in Appendix 2B.

	  	App 1 - 10	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Permitted Liens ” means those Liens expressly permitted pursuant to Section 17.7 hereof.
“ Permitted Sublease ” means any sublease of the Aircraft to a Permitted Sublessee permitted under the terms and subject to the conditions of this Lease.
“ Permitted Sublessee ” means a Person:
(a) which is a commercial passenger air carrier that holds the requisite licenses and approvals for the maintenance and operation of the Aircraft; and
(b) with respect to which, at the time such Person becomes a Permitted Sublessee pursuant to the terms and conditions of this Lease and for the term of any Permitted Sublease to which such Permitted Sublessee is a party, no proceeding is pending or shall be instituted in connection with any insolvency, bankruptcy, reorganisation, examinership, administration, liquidation, moratorium or other Laws affecting the enforcement of creditors’ rights generally; and
(c) that is expressly consented to in writing by Lessor, which consent shall be in Lessor’s sole discretion, acting reasonably.
“ Person ” means an individual, general partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or limited partnership, Governmental Authority or other entity of whatever nature.
“ Prior Lease ” means that certain aircraft lease agreement with respect to the Aircraft between Lessor, as lessor, and Prior Operator, as lessee.
“ Prior Operator ” means SAS Aigle Azur Transports Aeriens.
“ Quiet Enjoyment Letters ” means letters from each of Owner Participant and Security Trustee to Lessee substantially in the forms set out in Appendix 8.
“ Redelivery Location ” means such airport in Mexico or El Salvador as specified in writing by Lessee to Lessor no less than ten (10) Business Days prior to the Scheduled Termination Date, or such other location as may be agreed in writing by Lessor and Lessee prior to the Scheduled Termination Date.
“ Register ” means the registry of aircraft which is maintained in the State of Registration by the Aeronautics Authority having authority with respect to the registration of the Aircraft.
“ Reimbursable Event ” means, subject to the provisions and exclusions of Appendix 2C, the completion by Lessee during the Lease Term of a Maintenance Check or the replacement of any Engine Life Limited Parts.
“ Reimbursable Expenses ” means, as the context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12 Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses, Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such terms are defined in Appendix 2C.

	  	App 1 - 11	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Related Lease(s) ” means any and all leases of aircraft between Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, or trustee on behalf of Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, as lessor, and Lessee or any Affiliate of Lessee, as lessee.
“ Related Lease Event of Default ” means, in relation to any Related Lease, any breach or default of Lessee’s obligations thereunder which constitute an “event of default” or similar event however termed thereunder under which the party to whom such obligations are owing would have the right to exercise remedies including the termination or cancellation of the Related Lease.
“ Related Obligations ” means the obligations and liabilities now existing or hereafter arising of Lessee or any Affiliate of Lessee under any Related Lease.
“ Rent ” means Basic Rent and Supplemental Rent payable pursuant to this Lease.
“ Required Approval ” means evidence documenting approval by the respective Airframe or Engine Manufacturer (as applicable) and the Certificating Authority with respect to (i) any repair to the Airframe or any Engine, where the accomplishment of such repair does not conform with the repair procedures set forth in the Manufacturer’s Repair Manual or an EASA approved service bulletin relevant to such repair and (ii) any alteration or modification of the Airframe or any Engine.
“ Return ” means the return of the Aircraft and all Items of Equipment to Lessor pursuant to and in accordance with Article 22 and the other provisions of this Lease.
“ Return Acceptance Certificate ” means the certificate substantially in the form of Appendix 7 to be executed and delivered by Lessor and Lessee at Return.
“ 6 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check and (b) each Task that has an initial interval of six (6) years and/or a repetitive interval of six (6) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 6 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “6 Year HMV Check Airframe Reserve”.
“ Scheduled Delivery Date ” means the scheduled date for Delivery identified in Appendix 2A which is the date Lessor expects the Prior Operator to return the Aircraft in accordance with the Prior Lease.
“ Scheduled Termination Date ” means the day on which the Lease Term is scheduled to expire (as provided in Appendix 2A), and which may be independent from the Termination Date as provided in the definition of such term.
“ Security Deposit ” means (i) the Cash Security Deposit and the Credit Security Deposit in the amounts set forth in Appendix 2B; including (ii) any amounts paid to Lessor pursuant to Sections 4.4 and 4.6(c); less (iii) any amounts applied or utilised by Lessor in accordance with the provisions of Sections 4.3 and 4.6(b), whether the same are paid in cash or in the form of a Security Letter of Credit.
“ Security Letter of Credit ” means an unconditional and irrevocable letter of credit, satisfactory to Lessor in form and substance, in the amount of the Security Deposit and otherwise in compliance with the requirements of Section 4.6 and (i) drawn upon an issuer located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland or (ii) issued by a bank outside of Ireland and confirmed by Allied Irish Banks, AIB International

	  	App 1 - 12	  	APPENDIX 1	
	  		  	DEFINITIONS	

Centre, IFSC, Dublin 1, Ireland (SWIFT: AIBKIE2D) or such other bank located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland, each issuing and confirming bank being acceptable to Lessor and having a credit rating not lower than A from Standard and Poor’s or A2 from Moody’s, and which shall include any replacements, supplements and amendments thereto.
“ Security Trust Agreement ” means that certain security trust agreement dated as of December 11, 2008 among Owner Participant, Security Trustee, and the other parties named therein, as amended and supplemented from time to time.
“ Security Trustee ” means Deutsche Bank Trust Company Americas, a New York banking corporation, as security trustee pursuant to the Security Trust Agreement, its successors and assigns.
“ Servicer ” means CIT Aerospace International, a company organised and existing under the Laws of Ireland and having its principal place of business at 3 George’s Dock, IFSC, Dublin 1, Ireland.
“ State of Organisation ” means the country and/or state under which Laws a Person is organised and existing, or, with respect to Lessor and Lessee, the country and/or state identified on the first page of this Lease.
“ State of Registration ” means the United Mexican States.
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent and payments in respect of Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under this Lease, including without limitation, and to the extent permitted by applicable Law, interest at the Past Due Rate calculated on any: (i) part of any installment of Basic Rent not paid on the date due hereunder for the period the same remains unpaid and (ii) Supplemental Rent or Maintenance Reserves not paid when due hereunder, until the same is paid.
“ 12 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check, (b) each Task that has a repetitive interval of six (6) years as set forth in the MPD, and (c) each Task that has an initial interval of twelve (12) years and/or a repetitive interval of twelve (12) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 12 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “12 Year HMV Check Airframe Reserve”.
“ Task(s) ” means each inspection or other requirement set forth in the MPD that (a) has a repetitive interval designated by a letter or combination of a letter and a number, or (b) is based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of calendar days, months and/or years.
“ Tax(es) ” means any taxes (including, without limitation, sales, use, business, gross or net income, personal property, license, documentation, transfer, import, export, fuel, leasing, occupational, value added, excess profits, excise, gross or net receipts, franchise, stamp, environmental and other taxes), levies, imposts, withholdings, fees, assessments, duties and other charges of any nature, and any penalties, fines, additions to tax, interest or other charges related thereto which are imposed by any Governmental Authority or other taxing authority in any jurisdiction or by any international or multinational taxing or regulatory authority.

	  	App 1 - 13	  	APPENDIX 1	
	  		  	DEFINITIONS	

“ Termination Date ” means:
(i) the Scheduled Termination Date if Return is completed on the Scheduled Termination Date; or
(ii) the date, if other than the Scheduled Termination Date, of Lessee’s Return of the Aircraft with all Obligations then due for performance having been performed; or
(iii) the date on which this Lease terminates in accordance with Section 20.3 following the occurrence of an Event of Loss with respect to the Aircraft or the Airframe following Delivery; or
(iv) the date of termination of this Lease following the occurrence of an Illegality Event in accordance with Section 27.1(b); or
(v) the date on which this Lease is cancelled or terminated pursuant to Article 24 following the occurrence of an Event of Default.
“ Time Controlled Part ” means any Item of Equipment, including any Life Limited Part, having a Task applicable to it based upon a predetermined time limit or interval in accordance with the MPD to the extent such Task requires such Item of Equipment to be discarded, overhauled, or re-certified upon reaching such time limit or interval.
“ Trust Agreement ” means the Amended and Restated Declaration of Trust (Aircraft 2296) dated as of December 19, 2008 between Owner Participant and Wilmington Trust SP Services (Dublin) Limited, as amended, supplemented and assigned, pursuant to which Owner holds legal title to the Aircraft and acts for the benefit of Owner Participant with respect to the Aircraft.
“ Trust Company ” means Wilmington Trust SP Services (Dublin) Limited, acting in its individual capacity, and its successors and assigns.
“ U.S. ” or “ U.S.A. ” means the United States of America.
“ VAT ” means any Tax that is, or is in the nature of, a value added, turnover, sales, use, rental, leasing, services, goods and services, consumption, or transaction privilege Tax.
“ Watch Item ” means any maintenance requirement or inspection of the Aircraft or applicable Item of Equipment following the Termination Date that results from a defect with respect to the Aircraft that was discovered during the Lease Term (and is not due to a routine inspection requirement for all aircraft of the same model as the Aircraft resulting from an Airworthiness Directive, service bulletin or Manufacturer’s recommendations) and is in addition to the maintenance and inspection requirements set forth in the MPD, and where such additional inspection shall be required prior to the later of the accumulation of (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles, or (iii) twenty (20) months, as applicable. 
“ Wet Lease(s) ” means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee shall at all times maintain full operational, technical and navigational control and maintenance oversight of the Aircraft, (ii) the Aircraft shall be operated solely by crews employed or contracted by Lessee possessing all current appropriate Aeronautics Authority certificates and licenses (it

	  	App 1 - 14	  	APPENDIX 1	
	  		  	DEFINITIONS	

is understood that cabin attendants need not be regular employees of Lessee), (iii) the Insurances shall remain in full force and effect ( provided that such Insurance with respect to legal liabilities for passenger and cargo may be on a contingent basis for the duration of any such arrangement as long as such third party under such arrangement maintains primary coverage for such insurance in favour of Lessor, Lessee, and any Indemnitee and Additional Insureds in accordance and strict compliance with the terms, conditions, and requirements of this Lease, evidence of which in the form of a certificate of insurance and letter of undertaking from the brokers of such third party under such arrangement shall be provided to Lessor prior to the commencement of such arrangement), (iv) the Aircraft shall be used and maintained by Lessee as otherwise required by and in accordance with the terms and conditions of this Lease.

	  	App 1 - 15	  	APPENDIX 1	
	  		  	DEFINITIONS	

Appendix 2
to Aircraft Lease Agreement
COMMERCIAL TERMS
[NOTE: THE TERMS OF THIS APPENDIX 2 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE
INFORMATION; THIS APPENDIX 2 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
Contents:

	 	Appendix 2A	  	Lease Term	
	 	Appendix 2B	  	Rent, Security Deposit, Insurance and other Financial Matters	
	 	Appendix 2C	  	Maintenance Reserves	
	 	Appendix 2D	  	Delivery Conditions	
	 	Appendix 2E	  	Return Conditions	

	  	App 2 - 1	  	APPENDIX 2	
	  		  	COMMERCIAL TERMS	

Appendix 2A
to Aircraft Lease Agreement
LEASE TERM
 
1.	Scheduled Delivery Date is on or about *****.	
 
2.	Lease Term	
Subject to Section 3 below, the Lease Term shall commence on the Delivery Date and shall end on, but not later than, 11:59 P.M. New York, New York time on the day immediately preceding the fortieth (40 th ) monthly anniversary of the Delivery Date (unless otherwise extended pursuant to the terms and conditions hereof), but which shall in any event end on the Termination Date.
 
3.	Lease Term Extension Option	
(a) Provided no Default or Event of Default shall have occurred and be continuing, Lessee may extend the Lease Term for ***** additional months (“ Lease Term Extension ”) on the same terms and conditions (except with respect to the amount of Basic Rent as more fully set forth in paragraph (b) below), provided that Lessee shall provide Lessor with irrevocable written notice of its intention to exercise such extension option at least ***** months prior to the Scheduled Termination Date.
(b) Basic Rent for the Lease Term Extension shall be in an amount reflecting the fair market rate at the time of extension as agreed between Lessor and Lessee prior to but not later than the time that Lessee exercises its option to extend the Lease Term of the Lease as set forth in paragraph (a) above. If Lessor and Lessee are unable to agree to an amount of Basic Rent for the Lease Term Extension, then Lessee’s option to extend the Lease Term shall lapse.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 2	  	APPENDIX 2A	
	  		  	LEASE TERM	

Appendix 2B
to Aircraft Lease Agreement
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS
 
1.	Basic Rent. Lessee shall pay Basic Rent during the Lease Term as follows:	
1.1 PBH Rent . For that portion of the Lease Term commencing on the Delivery Date and continuing through and including the fourteenth (14 th ) day after the Delivery Date (the “ PBH Period ”), Lessee shall pay Basic Rent to Lessor on a power-by-the-hour basis at the rate of ***** per Flight Hour (the “ PBH Rent ”). The PBH Rent shall be paid in arrears on or prior to the fifteenth (15 th ) day following the last day of the PBH Period (the “ PBH Rent Payment Date ”). For the avoidance of doubt and by way of example, if Delivery occurs on 19 November 2010, the PBH Period would commence on 19 November 2010 and continue through and including 02 December 2010, and the PBH Rent Payment Date would be 17 December 2010.
1.2 Fixed Rent . For the remainder of the Lease Term period commencing on the day immediately following the last day of the PBH Period (the “ Fixed Rent Commencement Date ”) and continuing through the end of the Lease Term (but not including any Lease Term Extension), Lessee shall pay Basic Rent to Lessor in advance on each Fixed Rent Payment Date in respect of each Fixed Rent Period in the amount of ***** per Fixed Rent Period (the “ Fixed Rent ”), prorated for any partial Fixed Rent Period.
 
2.	Security Deposit – Timing of Payments and Amounts.	
2.1. Prior to the execution of this Lease, Lessee has paid Lessor the amount of *****; one (1) Business Day following execution of this Lease, Lessee shall deposit with Lessor an additional amount of *****; and one (1) Business Day prior to the Scheduled Delivery Date, Lessee shall deposit with Lessor an additional amount of *****.
2.2. Notwithstanding the foregoing, subject to no Default or Event of Default having occurred during the first six (6) months of the Lease Term, the total Security Deposit requirement hereunder shall be reduced to *****, and Lessor shall automatically apply ***** of the Security Deposit towards Lessee’s Fixed Rent payment due for the seventh (7 th ) Fixed Rent Period during the Lease Term.
2.3. In the event a Default or Event of Default has occurred during the first six (6) months of the Lease Term, the total Security Deposit requirement hereunder shall remain at ***** throughout the Lease Term.
 
3.	Account	
All payments made under this Lease or any other Operative Document shall be made to the account set forth below by wire transfer of immediately available funds to its correspondent bank:
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 3	  	APPENDIX 2B	
	  		  	RENT, SECURITY DEPOSIT, INSURANCE	
	  		  	AND OTHER FINANCIAL MATTERS	

					
	 	Bank:	  	Deutsche Bank Trust Company Americas
60 Wall Street, 26 th Floor
Mail Stop NYC60-2606
New York, NY 10005	
			
	 	Account Number:	  	01419647	
			
	 	ABA Number:	  	021001033	
			
	 	SWIFT:	  	BKTRUS33	
			
	 	For the account of:	  		
	 	Account Name:	  	CIT Aviation Finance II Ltd.	
			
	 	Account Number:	  	PO0208.7	
			
	 	Reference:	  	Volaris; MSN 2296	
 
4.	Insurances	
4.1. Liability Insurance Coverage Amount: Seven Hundred Fifty Million Dollars ($750,000,000).
4.2. Agreed Value: Thirty-Five Million Dollars ($35,000,000), which amount shall be reduced by three percent (3%) at each anniversary of the Delivery Date during the Lease Term.
4.3. Engine Agreed Value (each Engine): Eight Million Dollars ($8,000,000).
4.4. Aircraft Hull Deductible Amount: Seven Hundred Fifty Thousand Dollars ($750,000) per occurrence.
 
5.	Legend	
“LEASED FROM WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, DUBLIN, IRELAND AS TRUSTEE/LESSOR”
 
6.	Notices	

If to Lessee:
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma No. 490
Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
 
Attention: Director Jurídico
Fax: +52 (55) 5211 9613	  	If to Lessor:
 
Wilmington Trust SP Services (Dublin) Limited
First Floor, 7 Exchange Place
International Financial Services Centre
Dublin 1
Ireland
Fax: +353 1 612 5550
 
with a copy to Servicer, as follows:
 
CIT Aerospace International
3 George’s Dock
IFSC

					
	  	App 2 - 4	  	APPENDIX 2B	
	  		  	RENT, SECURITY DEPOSIT, INSURANCE	
	  		  	AND OTHER FINANCIAL MATTERS	

			
	  	 
Dublin 1
Ireland
Attention: Chief Counsel
Fax: +353 1 656 1001
 
and, with respect to any insurance notification, with a copy to:
 
CIT Aerospace
11 West 42nd Street, 12th Floor
New York, NY 10036, USA
Attention: Portfolio Services
Fax: +1 (877) 525 9183
Email: alice.arazny@cit.com	

	  	App 2 - 5	  	APPENDIX 2B	
	  		  	RENT, SECURITY DEPOSIT, INSURANCE	
	  		  	AND OTHER FINANCIAL MATTERS	

Appendix 2C
to Aircraft Lease Agreement
MAINTENANCE RESERVES
 
1.	Maintenance Reserves — Airframe	
A. 6 Year HMV Check Airframe Reserve
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 6 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 6 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 6 Year HMV Check Airframe Reserve as of the date of commencement of such 6 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 6 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 6 Year HMV Check, the Tasks accomplished during such 6 Year HMV Check shall have included, as a minimum, (a) each six (6) year or seventy-two (72) month Task, (b) each Task that has an initial or repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 6 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
B. 12 Year HMV Check Airframe Reserve
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 12 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 12 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 12 Year HMV Check Airframe Reserve as of the date of commencement of such 12 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 12 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 12 Year HMV Check, the Tasks accomplished during such 12 Year HMV Check shall have included, as a minimum, (a) each twelve (12) year or one hundred forty-four (144) month Task, (b) each Task that has a repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000)
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 6	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

Flight Hours or less, (iii) four thousand five hundred (4,500) Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 12 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first 12 Year HMV Check to be accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the 12 Year HMV Check Airframe Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the 12 Year HMV Check Airframe Reimbursable Expenses incurred during the first 12 Year HMV Check accomplished following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the 12 Year HMV Check Airframe Reserve with respect to the Aircraft; or
(b) the amount equal to the 12 Year HMV Check Airframe Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months of operation) accumulated since the later of the date that the Aircraft was delivered new to the Prior Operator or the date of completion of the most recent 12 Year HMV Check accomplished on the Aircraft at the time of Delivery.
 
2.	Maintenance Reserves - Engines	
A. Engine Restoration Reserves
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor the amount determined under clause (ii) below multiplied by the number of Flight Hours of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as, with respect to each Engine, an “ Engine Restoration Reserve ” and collectively, the “ Engine Restoration Reserves ”). A separate Engine Restoration Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) The amount used to calculate Lessee’s payment due under clause (i) above shall be determined on a monthly basis and shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Calendar Month for which such payment is due:

	  	App 2 - 7	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

					
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(iii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Restoration Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an Engine Restoration on an Engine during the Lease Term for which such Engine Restoration Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Restoration Reimbursable Expenses ”), provided that at the time of completion of such Engine Restoration, as a minimum:
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 8	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

(a) the Engine was restored to a condition having an expected minimum of sixteen thousand five hundred (16,500) Flight Hours without any requirement for a shop visit prior to the expiration of such time; and
(b) each Life Limited Part installed in the Engine had no less than eight thousand five hundred (8,500) Cycles (and equivalent calendar time, if applicable, with calendar time determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer) remaining to its life limit, provided, however, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the minimum number of Cycles required for each Life Limited Part as set forth above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the minimum number of Cycles set forth above should be increased or decreased based upon the then current information available to both Lessee and Lessor as to the average Flight Hour to Cycle ratio operated by all similar model aircraft worldwide; and
(c) the Engine was in compliance with all AD’s to the extent that (i) such AD was issued prior to the date such Engine Restoration was completed and (ii) by the terms of such AD, compliance with such AD would otherwise be required on or prior to the commencement date of the next anticipated restoration shop visit of the relevant Engine.
(iv) Engine Restoration Reimbursable Expenses shall only include Lessee’s Actual Cost incurred in connection with Engine disassembly, repair, Overhaul, assembly and any required testing accomplished in connection with the accomplishment of such Engine Restoration.
(v) Engine Restoration Reimbursable Expenses shall not include the cost of replacement Life Limited Parts installed in connection with the accomplishment of such Engine Restoration.
(vi) Notwithstanding anything to the contrary in the preceding clause (iii), solely with respect to the first Engine Restoration accomplished by Lessee on each Engine following Delivery, in addition to the amount paid by Lessee with respect to the Engine Restoration Reserve applicable to the Engine on which such Engine Restoration was accomplished, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the Engine Restoration Reimbursable Expenses incurred by Lessee during the first Engine Restoration accomplished for such Engine following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the Engine Restoration Reserve with respect to such Engine; or
(b) the amount equal to the Engine Restoration Reserve Rate set forth in clause (ii) above (as of the Delivery Date without adjustment for inflation) multiplied by the number of Flight Hours of operation accumulated on such Engine since the later of the date that the Engine was delivered new or since the date of completion of the most recent Engine Performance Restoration accomplished on such Engine at the time of Delivery.

	  	App 2 - 9	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

B. Engine Life Limited Parts Reserves
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** multiplied by the number of Cycles of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Engine Life Limited Parts Reserve ”). A separate Engine Life Limited Parts Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Life Limited Parts Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the purchase by Lessee of any Engine Life Limited Part during the Lease Term that is installed in an Engine for which such Engine Life Limited Parts Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Life Limited Parts Reimbursable Expenses ”).
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first replacement of each Engine Life Limited Part of each Engine accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the applicable Engine Life Limited Parts Reserve, Lessor shall reimburse Lessee, or pay such other Person as directed by Lessee, the amount by which the Engine Life Limited Parts Reimbursable Expenses incurred by Lessee exceeds the amount paid by Lessee with respect to the Engine Life Limited Parts Reserve with respect to such Engine, but in no event shall the sum of all such excess Engine Life Limited Parts Reimbursable Expenses paid by Lessor exceed the amount that is equal to the product of the Engine Life Limited Parts Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustments applied during the Lease Term) multiplied by the total number of Cycles accumulated by each such replaced Engine Life Limited Part as at the time of Delivery as set forth in the Acceptance Certificate.
 
3.	Maintenance Reserves – Other Items	
A. Landing Gear Overhaul Reserve
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Landing Gear Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) the total prorated amount held by Lessor in the Landing Gear Overhaul Reserve account (as prorated in accordance with sub-section (iii) below) as of the commencement date of such Landing Gear Overhaul (such prorated account balance amount being hereinafter referred to as “ Landing Gear Overhaul Reimbursable Expenses ”), provided that at the time of completion of such Overhaul of any Landing Gear, such Landing Gear shall have no existing condition that would require the removal of such Landing Gear prior to completing the full Overhaul interval as set forth in the MPD.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 10	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

(iii) In no event shall any reimbursement for a Landing Gear Overhaul of any individual Landing Gear exceed an amount that is in excess of a percentage of the total amount, then currently held by Lessor in the Landing Gear Overhaul Reserve, equal to ***** for each of the left and right main Landing Gear, and ***** for the nose Landing Gear.
(iv) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first Overhaul of each Landing Gear accomplished by Lessee following the Delivery Date, in addition to the percentage amount with respect to such Landing Gear paid by Lessee with respect to the applicable Landing Gear Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the Landing Gear Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for each such Landing Gear following the Delivery Date exceeds (II) the percentage amount that Lessee was required under this Lease to pay with respect to the Landing Gear Overhaul Reserve with respect to such Landing Gear; or
(b) the amount equal to the applicable percentage amount of the Landing Gear Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months) of operation accumulated since the later of the date that such Landing Gear was delivered new or the date of accomplishment of the most recent Overhaul on such Landing Gear at the time of Delivery.
B. APU Overhaul Reserve
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay Lessor Forty-Four Dollars ($44.00) multiplied by the number of APU Hours of operation of the APU during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ APU Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the APU Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an APU Overhaul on the APU during the Lease Term (all such qualifying expenses are hereinafter referred to as “ APU Overhaul Reimbursable Expenses ”), provided that at the time of completion of such APU Overhaul, as a minimum:
(a) the APU was restored to a condition such that it can be reasonably expected to operate for a minimum of five thousand (5,000) APU Hours without any requirement for a shop visit prior to the expiration of such time;
(b) each Life Limited Part installed in the APU had no less than five thousand (5,000) APU Cycles remaining to its life limit; and
(c) the APU was in compliance with all AD’s to the extent that, by the terms of each AD, compliance was required within any of (i) five thousand APU Hours, or (ii) five thousand (5,000) APU Cycles, or (iii) twenty-four (24) months, as applicable.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 11	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first APU Overhaul accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the APU Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the APU Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for the APU following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the APU Overhaul Reserve with respect to the APU; or
(b) the amount equal to APU Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of APU Hours of operation accumulated since the later of the date that the APU was delivered new or the date of accomplishment of the most recent APU Overhaul on the APU at the time of Delivery.
 
4.	Maintenance Reserve Claims	
A. Prior to the accomplishment of any Maintenance Check for which Lessee intends to make a Maintenance Reserve Claim, Lessee shall provide Lessor with the workscope and, to the extent available from the Approved Maintenance Provider, the estimated cost of accomplishing such Maintenance Check, for approval by Lessor as to whether or not such workscope complies with the requirements for reimbursement as set forth in this Appendix 2C herein.
B. Following completion of such Maintenance Check in accordance with the approved workscope, Lessee may present its Maintenance Reserve Claim to Lessor for payment by delivery of an invoice for the amount of Reimbursable Expenses claimed by Lessee together with documentation satisfactory to Lessor evidencing completion of such Maintenance Check in accordance with the approved workscope and the cost associated therewith.
C. Lessor shall reimburse Lessee by paying ( x ) to Lessee (provided Lessee has delivered to Lessor evidence of payment by Lessee for the amount of such Reimbursable Expenses) or ( y ) upon receipt of written instruction from Lessee, to Lessee’s maintenance provider performing such Maintenance Check (provided Lessor has received evidence of payment by Lessee for the amount of all estimated expenses that exceed the amount to be paid by Lessor as set forth herein). Such amount shall equal the lesser of (i) the amount of such Reimbursable Expenses for such Maintenance Check, or (ii) the amount of the respective Maintenance Reserve for such Reimbursable Event. Notwithstanding the foregoing, upon Lessee’s request, and at Lessor’s option and sole discretion, Lessor may pay up to ***** of the amount then currently held by Lessor in the applicable Maintenance Reserve account directly to the maintenance provider performing the applicable Reimbursable Event (each an “ Induction Payment ”) following Lessor’s receipt of a copy of the intended workscope and a preliminary invoice related to such Reimbursable Event, all in form and substance reasonably satisfactory to Lessor.
D. In any case in which the amount paid to Lessee by Lessor hereunder is not sufficient to pay the cost of such Maintenance Check, Lessee shall be obligated to and shall pay directly any such shortfall, without further contribution from Lessor, and Lessee shall not subsequently be permitted to make a Maintenance Reserve Claim for such amounts under this Lease.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 12	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

5.	Exclusions from Reimbursable Expenses	
The following shall be and are specifically excluded from Reimbursable Expenses:
(i) with respect to all Maintenance Checks, expenses incurred in connection with or as a result of (A) an accident, faulty maintenance or installation, incident, improper operations, abuse, neglect, or misuse, (B) any maintenance and material required for or in connection with elective Parts replacement, AD compliance and Aeronautics Authority and/or Certificating Authority regulation compliance, (C) any maintenance and material covered by, or reimbursable by, a claim under any Manufacturer’s warranties or by insurance (with deductibles being treated as reimbursable by insurance for purposes of this exclusion), (D) modifications (including interior reconfiguration), (E) the accomplishment of service bulletins, (F) any deferred maintenance discrepancies (G) any maintenance and material required to correct or repair damage caused by the ingestion by an Engine or the APU of a foreign object external to such Engine or APU (“ FOD ”), (H) ( x ) the cost of shipping any Engine, Engine LLP, Landing Gear or the APU, or ( y ) ferrying the Aircraft to the maintenance facility performing such Maintenance Check, (I) any fees or expenses incurred by representatives of Lessee, (J) handling charges or other mark-ups by Lessee, (K) removal and installation charges with respect to (1) any Engine (for Engine Restoration or Engine LLP replacement) or (2) any Landing Gear or APU for Overhaul, (L) any maintenance or replacement of Parts (when such maintenance or replacement is as a result of (aa) Time Controlled Part requirements of the Maintenance Program or (bb) a routine requirement of any task card), provided, however, Reimbursable Expenses shall include the cost to repair or replace any Part that requires maintenance or replacement solely as a result of failing a routine requirement for an operational or functional test of any Task while installed on the Aircraft, and (M) Taxes paid or due and payable on or in connection with the accomplishment of the Maintenance Check and any labor and materials supplied thereunder;
(ii) with respect to an Engine Restoration, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for the removal and installation of quick engine change components and Parts (“ QEC ”), except when such QEC is removed or installed at the maintenance facility of the Approved Maintenance Organisation accomplishing such Engine Restoration, (B) replacement, repair or Overhaul of external engine Parts, including QEC, (C) rental of tooling or equipment for the removal, installation or shipping of the Engine and (D) charges incurred for the use of a temporary replacement engine;
(iii) with respect to the replacement of Engine LLPs, in addition to the exclusions listed in clause (i) above, (A) an amount equal to the product of ( x ) the Manufacturer’s then current catalogue price of the replacement LLP which is the subject of Lessee’s Maintenance Reserve Claim divided by its Cycle life limit, multiplied by ( y ) the Cycles remaining to its Cycle life limit on the LLP replaced, and (B) any labor or additional materials costs associated with the replacement of any such Engine LLP;
(iv) with respect to any Landing Gear Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) the repair, replacement or Overhaul of rotable parts such as wheels, tires, brakes, transducers, switch assemblies, side struts, braces, and uplock and downlock mechanisms, (B) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation accomplishing such Landing Gear Overhaul), (C) replacement, repair or Overhaul of external Landing Gear Parts, (D) rental of tooling or equipment for the removal, installation and shipping of the Landing Gear and (E) charges incurred for the use of a temporary replacement landing gear; and

	  	App 2 - 13	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

(v) with respect to an APU Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation in order to perform such APU Overhaul), (B) replacement, repair or Overhaul of external APU Parts, (C) rental of tooling or equipment for the removal, installation and shipping of the APU and (D) charges incurred for the use of a temporary replacement auxiliary power unit.
 
6.	Adjustment/Revision of Maintenance Reserve Rates	
A. Adjustment for Inflation. The Maintenance Reserve rates set forth in paragraphs 1, 2A and 3 above (inclusive of subsections and including the table appearing in Section 2A(ii)), shall be increased for inflation on 1 June of each calendar year (commencing 1 June 2011) by a percentage amount equal to ***** by adding: ( x)  the product of the then current Maintenance Reserve rate multiplied by the value of *****, and ( y ) the then current Maintenance Reserve rate, as the same has been increased in accordance with this paragraph 6A.
B. Revision of Engine LLP Parts Reserve Rate. The Engine Life Limited Parts Reserve rate set forth in paragraph 2B shall be revised on 1 June of each calendar year of the Lease Term so that it equals the sum of the then current cost per Cycle of each Engine Life Limited Part of each Engine. The cost per Cycle of each such Engine Life Limited Part shall be determined by dividing ( x ) the then current catalog list price of each Engine Life Limited Part for each Engine by ( y ) the Engine Manufacturer’s then published cyclic life for each respective Engine Life Limited Part.
 
7.	General	
A. All payments in respect of Maintenance Reserves that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
B. In no event shall Lessor be obligated to reimburse or make any payment to Lessee under this Appendix 2C, whether due to a Maintenance Reserve Claim or otherwise, (i) if and for so long as a Default or Event of Default has occurred and is continuing or (ii) with respect to a Maintenance Reserve Claim which has not been made within the time limits specified in Section 13.4 of the Lease. Lessor shall not be obligated to cure any such Default or Event of Default by granting an offset to Lessee for any amounts that would be payable hereunder in the absence of such Default or Event of Default.
C. All Maintenance Reserves shall be managed, held, applied and reimbursed strictly in accordance with the provisions of this Lease, and any determinations and/or calculations made or to be made in respect of any Maintenance Reserve Claims shall be managed by personnel who are experienced and familiar with aircraft and operating leases of this type, and the payment of any Maintenance Reserve reimbursement amounts due and owing to Lessee under this Appendix 2C shall not be unreasonably withheld.
D. The disposition of all Maintenance Reserves following the occurrence of an Event of Loss of the Aircraft shall be made in accordance with the provisions of Section 20.3(b) of the Lease.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 14	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

E. Each installment of Maintenance Reserves paid by Lessee shall accrue interest from the date of its receipt by Lessor. The rate at which interest shall accrue on the Maintenance Reserves from time to time shall be the “30 Day Dealer Commercial Paper Rate” as reported on Reuters Page 23. The rate of interest shall be initially determined as of the Delivery Date and shall be reset on each three (3) month anniversary of the Delivery Date thereafter during the Lease Term. Any interest earned on the Maintenance Reserves shall become part of the Maintenance Reserves, and shall be subject to the terms hereof applicable to Maintenance Reserves.
F. For the avoidance of doubt, Lessor acknowledges and agrees that reimbursement for any Engine Restoration or APU Overhaul shall be based on the accomplishment of a workscope encompassing the elements and requirements as set forth and contemplated in this Appendix 2C, regardless of whether or not the FAA Form 8130-3 issued in respect of the relevant Engine or APU specifically references that a “restoration” or “overhaul” was completed.

	  	App 2 - 15	  	APPENDIX 2C	
	  		  	MAINTENANCE RESERVES	

Appendix 2D
to Aircraft Lease Agreement
DELIVERY CONDITIONS
 
1.	GENERAL	
1.1. The Aircraft shall be airworthy with no existing condition that exceeds Manufacturer’s allowable limits and shall be eligible for the immediate issuance of a standard DGAC Certificate of Airworthiness for passenger operations.
1.2. The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings. Any placards shall be in both Spanish and English and shall be replaced if required, with Lessee to provide Lessor with such English and Spanish placards for installation prior to Delivery.
1.3. Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4. The Aircraft shall comply with all AD’s required by the Certificating Authority which by their terms require compliance within one hundred eighty (180) days from scheduled redelivery date of the Aircraft under the Prior Lease, notwithstanding any waiver, deviation or time extension obtained from any aeronautics authority or the Certificating Authority.
1.5. The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirement Part M, and certain conditions applicable to FAR Part 129 as required for Lessee’s flight operations.
1.6. The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessor shall repair any such leaks discovered.
1.7. Lessor shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the applicable aeronautics authority for certification of airworthiness for aircraft to be exported from the then current state of registration and acceptable to the DGAC).
1.8. All repairs accomplished prior to Delivery shall be permanent repairs completed in accordance with the Airframe Manufacturer’s structural repair manual or Manufacturer’s approved data for the Aircraft.
1.9. The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10. Lessor shall deliver to Lessee, without charge to Lessee, all service bulletin kits applicable to the Aircraft in Lessor’s possession for installation on the Aircraft by Lessee with appropriate instructions for installation provided with such kits.

	  	App 2 - 17	  	APPENDIX 2D	
	  		  	DELIVERY CONDITIONS	

1.11. The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.12. The Aircraft will:
 
 	(a)	be capable of operating to and from runways narrower than forty-five (45) meters;	
 
 	(b)	be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;	
 
 	(c)	possess both fuel and weight quantity indicators indicating kilograms;	
 
 	(d)	incorporate a EGPWS/TAWS system;	
 
 	(e)	possess a reinforced cockpit door; and	
 
 	(f)	be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.	
 
2.	PAINT	
2.1 At Delivery, the Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted white using a quality paint. All other areas of the Aircraft where paint is peeled, chipped or worn out, shall be restored as necessary to provide a uniform appearance. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant.
2.2 Following Delivery, Lessee may cause the Aircraft to be painted in Lessee’s standard livery in accordance with Lessee’s standard painting workscope and procedures and acceptable to the Aeronautics Authority (“ Post-Delivery Paint ”).
2.3 Prior to commencing such Post-Delivery Paint, Lessee shall provide Lessor with an estimate of its Actual Cost for labor and materials relating to the Post-Delivery Paint, and subject to Lessor having received and being reasonably satisfied with such cost estimate, Lessor shall promptly reimburse Lessee at Lessee’s Actual Cost for labor and materials associated with such repainting following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of the completion of the Post-Delivery Paint and the costs associated therewith.
 
3.	AIRFRAME	
The Aircraft shall not have been operated in commercial passenger service since completion of the redelivery check of the Aircraft pursuant to the Prior Lease, which shall have included the 6 Year HMV Check and the next due C-Check (4C) as per the Prior Operator’s maintenance program which shall have included the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) that were due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) months, as applicable, following the scheduled redelivery date of the Aircraft pursuant to the Prior Lease (such check being hereinafter referred to as the “ Delivery Check ”).

	  	App 2 - 18	  	APPENDIX 2D	
	  		  	DELIVERY CONDITIONS	

4.	INTERIOR	
4.1. Cockpit windows shall not have any (i) crazing, (ii) delamination or, (iii) any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.2. Passenger compartment windows shall have no visible crazing that obstructs the view from the window.
4.3. All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessor.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1. Lessee may (i) witness and accept Lessor’s borescope inspection of the Engines and APU in connection with the redelivery of the Aircraft by Prior Operator, or (ii) may accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessee’s representative or, at Lessee’s expense, an agency selected by Lessee. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessor’s expense.
5.2. (a) Each Engine shall have accumulated no more than sixteen thousand (16,000) Flight Hours since new or since completion of its most recent Engine Restoration.
(b) Each Engine Life Limited Part shall have a minimum of ten thousand (10,000 Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A maximum power assurance engine run-up shall be performed in the presence of Lessee’s representatives prior to Delivery of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees (30°) Celsius.
5.4. The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.
5.5. Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) thirty-six (36) months, and (ii) three thousand (3,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the Scheduled Delivery Date based upon the landing gear overhaul interval set forth in the MPD.

	  	App 2 - 19	  	APPENDIX 2D	
	  		  	DELIVERY CONDITIONS	

6.	INSPECTION	
6.1. (a) Subject to the consent of the Prior Operator, Lessee may have representatives on board the Aircraft as observers during a redelivery acceptance flight of the Aircraft performed by the Prior Operator using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and the Prior Operator. If Lessee’s representatives are on board during such redelivery acceptance flight by the Prior Operator, such acceptance flight shall be the acceptance flight for all purposes under this Lease. Lessee shall ensure Lessor’s representative (or the Prior Operator’s representative if Lessor’s representative is not on board during such redelivery acceptance flight) has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor (or the Prior Operator’s representative if Lessor’s representative was not on board during such redelivery acceptance flight). To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall reimburse Lessor at the cost actually paid by Lessor, if any, to the Prior Operator for such flight.
(b) If Lessee’s representatives are not on board during such redelivery acceptance flight by the Prior Operator, then the first flight following Delivery, with Lessor’s representatives on board and using the Airframe Manufacturer’s recommended acceptance flight procedures for used aircraft (or such other procedures acceptable to Lessor and Lessee), shall be the acceptance flight for all purposes set forth herein, and such acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessee shall ensure Lessor’s representative has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall be responsible for all costs with respect to such flight.
6.2. Lessee shall inspect the Aircraft and Aircraft Documents (the “ Acceptance Inspection ”) prior to the Delivery Date. To the extent permitted by the Prior Operator, the Acceptance Inspection of the Aircraft and the Aircraft Documents shall be accomplished in conjunction with the redelivery inspection to be accomplished by Lessor during the redelivery process of the Aircraft from the Prior Operator, and such Acceptance Inspection of the Aircraft shall include the opening or removal of panels as reasonably required by Lessee and include access to all compartments and bays opened during Lessor’s redelivery inspection, provided, however, panels that were previously opened, during the redelivery check accomplished by the Prior Operator, shall not be required to be opened again if Lessee was given an opportunity to inspect, but failed to inspect in such areas while such panels were previously open. All discrepancies discovered during such Acceptance Inspection (i) of the Aircraft, that exceed the Manufacturer’s Repair Manual allowable limits shall be permanently repaired by Lessor, and (ii) of the Aircraft Documents, to the extent such Aircraft Documents are not acceptable to Lessee, Lessor shall

	  	App 2 - 20	  	APPENDIX 2D	
	  		  	DELIVERY CONDITIONS	

make reasonable efforts to correct such discrepancies at no cost to Lessee. Lessee shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein.
6.3. On the Delivery Date, Lessor shall deliver to Lessee all Aircraft Documents required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and all other Aircraft Documents in the possession of Lessor, and all Aircraft Documents required for the importation of the Aircraft into Mexico shall be in English. The Aircraft Documents required pursuant to this Section 6.3, shall include, to the extent then in Lessor’s possession, (i) Overhaul records with respect to each Engine, Landing Gear and the APU, (ii) Time Controlled Part traceability to Overhaul for then currently installed Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (iii) Life Limited Part traceability to manufacture (“zero time since new”) for then currently installed Life Limited Parts, (iv) inspection records (including records with respect to the accomplishment of Tasks, (v) records pertaining to evidence of compliance with AD’s, (vi) burn test certification records, (vii) log books, (viii) FAA, EASA and other Aeronautics Authority forms, (ix) records of compliance with Manufacturer’s service bulletins, (x) time logs showing Aircraft and Engine Flight Hours and Cycles on any given prior date, and (xi) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
6.4. All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessee’s representative shall operationally check all systems prior to the delivery of the Aircraft and all defects found shall be permanently repaired by Lessor, at Lessor’s expense, prior to delivery of the Aircraft.

	  	App 2 - 21	  	APPENDIX 2D	
	  		  	DELIVERY CONDITIONS	

Appendix 2E
to Aircraft Lease Agreement
RETURN CONDITIONS
 
1.	GENERAL	
1.1. The Aircraft shall (i) be airworthy and have been maintained and operated in accordance with the Lease with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by Lessee and (ii) comply with the Airframe Manufacturer’s original type certificate specifications, as revised up to the Termination Date, subject to any modifications installed during the Lease Term in compliance with the terms of this Lease.
1.2. The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings, and any required placards pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be replaced if unreadable, missing or not in the English language. Placards that are not required pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be removed upon Lessor’s request.
1.3. Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment as were installed on the Aircraft on the Delivery Date or pursuant to Article 12 hereto, or were delivered by Lessor to Lessee pursuant to the terms of the Lease shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4. The Aircraft shall comply with all EASA AD’s which by their terms require compliance (without application or utilisation of any alternate method of compliance) on or before the date that is one hundred eighty (180) days after the Termination Date, notwithstanding any waiver, deviation or time extension obtained from the Aeronautics Authority, the Certificating Authority or any other aeronautics authority, or otherwise.
1.5. The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirements, Part M.
1.6. The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessee shall repair any such leaks discovered.
1.7. Lessee shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the Aeronautics Authority for certification of airworthiness for aircraft to be exported from the State of Registration) to a country advised by Lessor. At Lessor’s request, and provided the same shall not impact Lessee’s use of the Aircraft throughout the Lease Term or otherwise result in a delay in redelivery, Lessee shall modify the Aircraft to comply with the requirements of the aeronautics authority of such country to which the Aircraft will be exported, provided, however, if such Lessor requested modifications are not also a requirement of the Certificating Authority and/or EASA, Lessor shall reimburse Lessee for Lessee’s Actual Cost incurred in performing such modifications.

	  	App 2 - 22	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

1.8. All temporary repairs accomplished during the Lease Term, including repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair in accordance with the Airframe Manufacturer’s structural repair manual for the Aircraft) and those requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair and all external doublers (scab patches) installed during the Lease Term shall be replaced with flush repairs, all in accordance with ( x ) the Manufacturer’s Repair Manual, or ( y ) Required Approval, provided, however , such replacement of a doubler shall not be required where installation of such doubler is (i) the only approved repair in accordance with the Manufacturer’s Repair Manual, (ii) the result of a Manufacturer recommended service bulletin accomplishment, or (iii) where a flush repair cannot be accomplished due to inaccessibility of the area.
1.9. The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10. Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished to Lessee without charge and which have not been so installed together with appropriate instructions for installation provided with such kits.
1.11. The quantity of fuel on board the Aircraft at Return shall not be less than the quantity of fuel on board the Aircraft at Delivery.
1.12. On or prior to Return and on such later date as requested by Lessor, Lessee shall provide Lessor such excerpts from the Maintenance Program and/or general procedures manual as Lessor may reasonably request (i) in order to substantiate procedures followed by Lessee and/or documentation used by Lessee which are specific to the Maintenance Program, in connection with the Return of the Aircraft to Lessor, and (ii) to assist with the bridging of the Aircraft onto a maintenance program other than the Maintenance Program subsequent to the Return of the Aircraft to Lessor.
1.13. If the Manufacturer’s Repair Manuals for the Aircraft were customised for or by Lessee during the Lease Term, Lessee will, at Lessee’s cost and expense, cause the Airframe Manufacturer to restore the Manufacturer’s Repair Manuals, revised up to and including the most recent revisions issued by the Airframe Manufacturer, to the status as they were at Delivery (or to be re-customised to such other customisation as timely requested by Lessor, with Lessor to pay any incremental increase over the cost to restore the Manufacturer’s Repair Manuals to the customisation as at Delivery) on the basis of the Aircraft no longer being part of Lessee’s fleet of aircraft, and Lessee will return to Lessor with the Aircraft the Manufacturer’s Repair Manuals so revised and restored or re-customised (as the case may be). To the extent the same are not revised and restored as required herein, Lessee hereby grants Lessor a perpetual, worldwide, non-exclusive, fully paid license to use Lessee’s customised Manufacturer’s Repair Manuals for itself and to further sub-license the same to any other Person as Lessor deems necessary and reasonable in the circumstances, without payment or compensation to Lessee.
1.14. The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.15. The Aircraft will:
(a) be capable of operating to and from runways narrower than forty-five (45) meters;
(b) be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;

	  	App 2 - 23	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

(c) possess both fuel and weight quantity indicators indicating kilograms;
(d) incorporate a EGPWS/TAWS system;
(e) possess a reinforced cockpit door; and
(f) be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.
 
2.	PAINT	
The Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding or stripping the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted using a paint of a quality reasonably acceptable to Lessor, or as otherwise agreed by Lessor in writing, in a color scheme, including logo, as directed by Lessor, provided, however, (i) the Aircraft shall be painted white if Lessor is unable to supply the necessary patterns in sufficient time to permit completion of the painting of the color scheme and logo without causing a delay in the redelivery of the Aircraft and (ii) if painted in the color and logo as directed by Lessor, then Lessor shall reimburse Lessee for the incremental cost in excess of the cost Lessee would have incurred to paint the Aircraft in its own livery, and all such preparation and painting shall be in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant. All required placards and markings shall be in the English language and shall be replaced if not in English, or if deteriorated.
 
3.	AIRFRAME	
Immediately prior to Return, the Aircraft shall have completed ( x ) a C-Check and will include the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) which will be due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clauses (i), (ii) and (iii) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated in the MPD during the Lease Term), and ( y ) a 6 Year HMV Check or a 12 Year HMV Check, if such 6 Year HMV Check or 12 Year HMV Check would otherwise require accomplishment within (iv) six thousand (6,000) Flight Hours, (v) four thousand five hundred (4,500) Cycles and (vi) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clause (y) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated during the Lease Term (such checks being hereinafter referred to as the “ Final Check ”). The Aircraft shall not have been operated in revenue service since completion of the Final Check. The Final Check shall be performed by an Approved Maintenance Organisation approved by Lessor. Lessee shall give Lessor not less than ten (10) Business Days’ prior written notice of the commencement date of such Final Check. The Aircraft shall be weighed during such Final Check.
 
4.	INTERIOR	
4.1. The Aircraft shall be in the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) at Lessor’s option, (i) as when such Aircraft was originally delivered to Lessee hereunder, (ii) as subsequently provided or paid for by Lessor, or (iii) as otherwise set forth in this Lease or as otherwise agreed between the parties.

	  	App 2 - 24	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

4.2. Cockpit windows shall not have any crazing or delamination, nor shall the cockpit windows have any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
 
4.3.	Passenger compartment windows shall have no visible crazing.	
4.4. All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessee.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1. Prior to Return and following the redelivery flight for the Aircraft, Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessor’s representative or, at Lessor’s expense, an agency selected by Lessor. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessee’s expense.
5.2. (a) Each Engine shall have accumulated no more than ten thousand five hundred (10,500) Flight Hours since completion of its most recent Engine Restoration, if any.
(b) Each Engine Life Limited Part shall have a minimum of four thousand five hundred (4,500) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A full take-off power engine run-up (high power assurance test) shall be performed in the presence of Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees Celsius (30° C.). Lessee shall be responsible, at its expense, for correcting any deficiencies which exceed or are outside of the Airframe Manufacturer’s Repair Manual allowable limits for an installed engine.
5.4. The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.
5.5. Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) forty (40) months, and (ii) six thousand (6,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the earlier to occur of the Scheduled Termination Date or the Termination Date, based upon the landing gear overhaul interval set forth in the MPD.

	  	App 2 - 25	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

6.	INSPECTION	
6.1. Immediately prior to Return, Lessee shall perform a redelivery acceptance flight of the Aircraft with Lessor’s representatives on board (subject to any limitation imposed by either Lessee’s insurance or the Aeronautics Authority with respect to the number of Lessor’s representatives permitted to be on board during such redelivery acceptance flight), using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and Lessee. Upon request of Lessor, Lessee shall permit representatives of the next subsequent lessee or purchaser of the Aircraft to be on board during such redelivery acceptance flight as observers, with one such observer to be permitted to occupy the cockpit jump seat during the entire flight. Such redelivery acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessor shall ensure Lessee’s representative has observed each discrepancy found. Immediately following the redelivery acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits, Lessee shall correct such discrepancy. Lessee shall have no obligation to pay the cost of correcting any discrepancies discovered during such redelivery acceptance flight which were not acknowledged in writing by its representative by its representative. Lessor shall reimburse Lessee at Lessee’s Actual Cost for the fuel consumed during such redelivery acceptance flight and Lessee shall be responsible for all other expenses associated with such flight and shall furnish the necessary permits and crews.
6.2. Lessor shall inspect the Aircraft, including the Aircraft Documents, (the “ Final Inspection ”) prior to the Termination Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include the opening or removal of panels as reasonably required by Lessor, and access to all compartments and bays. All discrepancies discovered during such Final Inspection (a) of the Aircraft that exceed the Manufacturer’s Repair Manual allowable limits, or that are not pursuant to the terms of this Lease, shall be permanently repaired by Lessee and (b) of the Aircraft Documents, to the extent that such Aircraft Documents are missing or incomplete, shall be corrected at Lessee’s expense. Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by Lessor and Lessee but which shall be no later than thirty (30) days prior to the Scheduled Termination Date. All Aircraft Documents shall be prepared by Lessee prior to the commencement of the Final Inspection of such Aircraft Documents by Lessor and shall be complete and made available to Lessor at the time of commencement of the Final Inspection of such Aircraft Documents by Lessor. Any Aircraft Documents generated during the period following commencement of such Final Inspection of the Aircraft Documents shall be delivered to Lessor for inspection as promptly as possible, but in any event prior to Return.
6.3. On the Termination Date, Lessee shall deliver to Lessor all Aircraft Documents (a) delivered to Lessee with respect to the Delivery of the Aircraft to Lessee and (b) required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and (c) to the extent not provided in the preceding clauses (a) and (b), all other Aircraft Documents applicable to the Aircraft with respect to any maintenance, inspections, repairs and modifications accomplished during the Lease Term. The Aircraft Documents required pursuant to this Section 6.3 herein, shall include:
(i) with respect to clause (a), the most recent revision issued by the respective Manufacturer for the Manufacturer’s Repair Manuals and in the same format as on the Delivery Date;

	  	App 2 - 26	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

(ii) with respect to clause (b), (1) Tasks, repairs, and modifications accomplished during the Lease Term and (2) Time Controlled Parts and other Items installed during the Lease Term and then currently installed, as a minimum, (A) Overhaul records with respect to each Engine, Landing Gear and the APU, (B) traceability to Overhaul for Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (C) Life Limited Part traceability to manufacture (“zero time since new”) for LLPs then installed on the Airframe or either Engine, (D) FAA Form 8130-3 or EASA Form One, or any successor thereto, (E) records of modifications and repairs, (F) records of compliance with Manufacturer’s service bulletins, (G) documentation of Required Approvals (including applicable supplemental type certificates) required pursuant to this Lease, and in addition to such Required Approvals, documentation of Aeronautics Authority and Certificating Authority approval, (H) inspection records (including records with respect to the accomplishment of Tasks), (I) records pertaining to evidence of compliance with AD’s, and (J) burn test certification records for interior Items;
(iii) with respect to clause (c), to the extent then in Lessee’s possession, (A) log books, (B) FAA, EASA and other Aeronautics Authority forms not included in paragraph (ii) above, (C) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date during the Lease Term, and (D) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
Any discrepancies found in the Aircraft Documents shall be corrected, and any missing Aircraft Documents shall be reconstructed by Lessee at Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents of maintenance, inspection, modification, and Overhauls accomplished during the Lease Term shall be in the English language. In the event that any Aircraft Documents are not provided to Lessor, or are not in the English language, the Aircraft shall be deemed not to meet the return conditions of this Appendix 2E and of Article 22 of the Lease. If Lessee subscribes to Manufacturer’s on-line data access services, Lessee must nonetheless return the Manufacturer’s Repair Manuals with all current revisions provided by Manufacturer in a format acceptable to Lessor.
6.4. All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessor’s representative shall operationally check all systems prior to the return of the Aircraft and all defects found shall be permanently repaired by Lessee, at Lessee’s expense, prior to return of the Aircraft.

	  	App 2 - 27	  	APPENDIX 2E	
	  		  	RETURN CONDITIONS	

Appendix 3
to Aircraft Lease Agreement
[NOTE: THE TERMS OF THIS APPENDIX 3 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 3 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
ACCEPTANCE CERTIFICATE
(MSN 2296)
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”) hereby acknowledges that on this              day of                  20      , Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) did deliver for inspection and acceptance by Lessee under the Aircraft Lease Agreement made between Lessor and Lessee dated as of 09 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”) the Aircraft, as described below, together with all Aircraft Documents applicable thereto, in accordance with the Lease. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
(a) Airframe

	  	Aircraft Model:	  	Airbus A319-132	  		
				
	  	Manufacturer’s Serial Number:	  	2296	  		
				
	  	Certified Weights:	  	Max Take-off:
Max Zero Fuel:
Max Landing:
Max Taxi:
Operating Empty:	  	                        

                        

	  	Airframe Maintenance Status:	  		  		
Total Flight Hours: ___________
Total Cycles: ________________
Total Flight Hours Since Last 6 Year HMV Check: ____________
Total Cycles Since Last 6 Year HMV Check: ____________
Date Last 6 Year HMV Check Accomplished: ______________
Total Flight Hours Since Last 12 Year HMV Check: ____________
Total Cycles Since Last 12 Year HMV Check: ____________
Date Last 12 Year HMV Check Accomplished: ______________
Total Flight Hours Since Last C-Check: ____________
Total Cycles Since Last C-Check: ____________
Date Last C-Check Accomplished: ______________

	  	App 3 - 1	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

(b) Engines (Installed)
Engine Type:                                      IAE V2524-A5
Manufacturer ’ s Serial Numbers:     ____________________   and
                                                              ____________________
Maximum Takeoff Thrust Rating: _____________________    lbs.
Engines Maintenance Status:
Position 1
ESN: _____________
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Engine Restoration: __________
Total Cycles Since Last Engine Restoration: ___________
Date of Last Engine Restoration: ____________________
Position 2
ESN: _____________
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Engine Restoration: __________
Total Cycles Since Last Engine Restoration: ___________
Date of Last Engine Restoration: ____________________
(c) APU (Installed)
APU Type                                       ____________________
Manufacturer ’ s Serial Number: ____________________
APU Maintenance Status:
Total APU Hours: __________
Total APU Cycles: __________
Total APU Hours Since Last Overhaul: __________
Total APU Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
(d) Landing Gear (Installed)
Manufacturer ’ s Serial                         Left Main: _________________
Numbers:                                               Right Main: ________________
                                                                Nose: _____________________

	  	App 3 - 2	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

Landing Gear Maintenance Status:
Left Main
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
Right Main
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
Nose
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
 
 	(e)	Interior Configuration	

	 	Seating	  	 	  		
				
	 	Lavatories	  	 	  		
				
	 	Galleys	  	 	  		
				
	 	Passenger Service Units	  	 	  		
				
	 	PSIU	  	 	  		
 
 	(f)	Aircraft Documents; Aircraft Manuals; Hard Time Components; Avionics; Loose Equipment Inventory	
 
 	    	As identified in Attachment 1 to this Acceptance Certificate.	
 
 	(g)	Fuel on Board provided at Lessor’s cost: ______________ kgs.	
 
2.	Rent Payment Date: ______________________ 	

	  	App 3 - 3	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

3.	Acceptance for Delivery	
(a) Lessee hereby confirms to Lessor on __________________, 20____ at _____ GMT at ___________, ___________ that the above described Aircraft is in accordance with the specifications, terms and conditions for Delivery set forth in the Lease, is satisfactory in all respects and is in the condition required for Delivery under the Lease.
(b) The Scheduled Termination Date is _______________ 20__ *.
 
*	NOTE: This stated date is provided for the convenience of the parties only and the provisions of Article 2 of, and Appendix 2A to, the Lease shall be controlling.	
(c) Lessee confirms that the Aircraft has been examined by its duly appointed and authorised representatives and the same conforms to the information set forth above.
(d) To Lessee’s knowledge, (i) no Default or Event of Default has occurred and is continuing, (ii) and Lessee has no claims, offsets, deductions, set-offs or defenses of any kind or nature in connection with the Lease.
(e) The execution and delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes, as between Lessee and Lessor, conclusive proof that the Aircraft is delivered in accordance with the description set forth in and in the condition required by the Lease, (iii) Lessee hereby expressly waives any right it may have to revoke acceptance of the Aircraft pursuant hereto for any reason, notwithstanding any nonconformity, discovered, difficult of discovery, or undiscovered, on the date hereof, and (iv) Lessee hereby unconditionally and irrevocably waives its right to revoke acceptance of Delivery of any Item of Equipment.
 
4.	Governing Law	
THIS ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
IN WITNESS WHEREOF, this Acceptance Certificate has been executed and delivered this ___ day of __________ 20___.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

	  	App 3 - 4	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

Attachment 1 to Acceptance Certificate
Delivery Inventory

Aircraft Documents	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Aircraft Manuals	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Loose Equipment	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Avionics Inventory	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Hard Time Components Inventory	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		

	  	App 3 - 5	  	APPENDIX 3	
	  		  	ACCEPTANCE CERTIFICATE	

Appendix 4
to Aircraft Lease Agreement
LEASE SUPPLEMENT
(MSN 2296)
LEASE SUPPLEMENT dated as of                      , 20              , (this “ Lease Supplement ”), between WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, as lessor (“ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS), as lessee (“ Lessee ”).
Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of 09 November 2010, (as amended, supplemented, novated and/or assigned, the “ Lease ”) and the defined terms therein being hereinafter used with the same meaning. The Lease provides for the execution and delivery of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof.
The Lease and this Lease Supplement relate to the Aircraft as more precisely described below and in the Acceptance Certificate. A counterpart of the Lease is attached hereto and shall be filed together with this Lease Supplement with the Aeronautics Authority.
In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under and pursuant to the Lease the Aircraft described below, together with the Aircraft Documents described in the Lease (the “ Delivered Aircraft ”):

Aircraft Model:	 	Airbus A319-132	
		
Manufacturer’s Serial Number:	 	2296	
		
Installed Engines:	 	Two (2) IAE V2524-A5 Engines	
			
Manufacturer’s Serial Numbers:	 	 	  	and	

			
Mexican Registration Mark:	 	 	  		
2. The Delivery Date of the Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof.
3. By execution and delivery of this Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term subject to the Lease.

	  	App 4 - 1	  	APPENDIX 4	
	  		  	LEASE SUPPLEMENT	

4. The amount of Basic Rent for the Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.
5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of the Lease, (ii) the Aircraft is insured as required by the Lease, (iii) the representations and warranties of Lessee referred to in Article 9 of the Lease are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease, and (v) the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Lease.
6. THIS LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7. This Lease Supplement may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Lease Supplement; provided, that to the extent, if any, that this Lease Supplement constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
8. This Lease Supplement supplements and forms a part of the Lease. The Lease and all Operative Documents, as supplemented hereby, are hereby ratified, approved and confirmed in all respects.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

	  	App 4 - 2	  	APPENDIX 4	
	  		  	LEASE SUPPLEMENT	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	   	 		 	By:	 	   	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	   	 		 	 	 	 	
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		
[MSN 2296]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	  	App 4 - 3	  	APPENDIX 4	
	  		  	LEASE SUPPLEMENT	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	   	 		 	By:	 	   	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	   	 		 	 	 	 	
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		
[MSN 2296]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

SECURITY TRUSTEE RECEIPT	
	
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as the Security Trustee	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

	  	App 4 - 4	  	APPENDIX 4	
	  		  	LEASE SUPPLEMENT	

Appendix 5
to Aircraft Lease Agreement
[RESERVED]

	  	App 5 - 1	  	APPENDIX 5	
	  		  	[RESERVED]	

Appendix 6A
to Aircraft Lease Agreement
LESSOR’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 2296
Lease Execution Date: 09 November 2010
Scheduled Delivery Date: *****

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Chattel Paper Original of Lease (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Lease Execution Date	  		
				
2.	  	Lease Agreement, with Lessee’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
3.	  	Guarantee, with Guarantor’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
4.	  	Opinion of Lessee’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
5.	  	Opinion of Guarantor’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
6.	  	Powers of Attorney evidencing the appointment of Lessee’s and Guarantor’s Agent for Service of Process pursuant to Section 26.3 of the Lease and Section 15 of the Guarantee, respectively, together with Powers of Attorney evidencing such appointment, duly notarised under and pursuant to Mexican Law	  	Lease Execution Date	  		
				
7.	  	Security Deposit installment of ***** due under Appendix 2B	  	One (1) Business Day after Lease Execution	  		
				
8.	  	Written evidence of company action authorising Lessee’s lease of the Aircraft and execution, delivery and performance of the Lease	  	Seven (7) Business Days after Lease Execution	  		
				
9.	  	Written evidence of company action authorising Guarantor’s execution, delivery and performance of the Guarantee	  	Seven (7) Business Days after Lease Execution	  		
				
10.	  	Incumbency Certificate of person or persons authorised to execute the Lease and related Operative Documents on behalf of Lessee	  	Seven (7) Business Days after Lease Execution	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6 - 1	  	APPENDIX 6	
	  		  	CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
11.	  	Incumbency Certificate of person or persons authorised to execute the Guarantee on behalf of Guarantor	  	Seven (7) Business Days after Lease Execution	  		
				
12.	  	Pledge Agreement as required under Sections 4.2 and 13.3(a)(i)	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
13.	  	Such financial information concerning each of Lessee and Guarantor and other documents and matters incident to the foregoing as Lessor may reasonably request, all in a form reasonably satisfactory to Lessor	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
14.	  	Power of Attorney evidencing the authority of Lessee’s representatives designated to accept delivery of the Aircraft and execute the Lease Supplement and Acceptance Certificate on behalf of Lessee at Delivery, duly notarised under and pursuant to Mexican Law	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
15.	  	Letter of Undertaking executed by independent aircraft insurance brokers and, if applicable, reinsurance brokers, each acceptable to Lessor, together with certificates of insurance and, if applicable, reinsurance, evidencing the insurances required to be maintained by Lessee under the Lease	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
16.	  	Application for Registration of the Aircraft with the DGAC duly executed by Lessee, together with the Lease and all other relevant Operative Documents to be recorded thereunder and Spanish translations thereof, certified by a court-approved translator	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
17.	  	Evidence of Lessee having registered as a Transacting User Entity (“TUE”) with the IR and provision of the DGAC access codes necessary in order to complete the appropriate IR registrations. In connection with the foregoing, Lessor shall cooperate with Lessee to obtain the DGAC access codes and shall provide Lessee with such documents as Lessee may reasonably request in connection with the foregoing.	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
18.	  	Security Deposit balance payment of *****due under Appendix 2B	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
				
19.	  	Lessee Acknowledgment of Security Assignment	  	Delivery Date	  		
				
20.	  	Acceptance Certificate	  	Delivery Date	  		
				
21.	  	Chattel Paper Original of Lease Supplement (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Delivery Date	  		
				
22.	  	Lease Supplement, with Lessee’s signatures ratified before a notary public	  	Delivery Date	  		
				
23.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / French Aviation Authority	  	Delivery Date	  		
				
24.	  	Copy of Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority	  	Delivery Date	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6 - 2	  	APPENDIX 6	
	  		  	CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
25.	  	Copy of provisional Certificate of Registration for the Aircraft	  	Delivery Date	  		
				
26.	  	Evidence of Registration of the Aircraft, the Lease and related interests with the IR	  	Delivery Date	  		
				
27.	  	An opinion in a form acceptable to Lessor from Lessor’s special counsel in the State of Registration confirming, among other things, the due and proper registration of the Aircraft in the State of Registration and with the IR.	  	Delivery Date	  		
				
28.	  	An irrevocable power of attorney executed by Lessee in a form prescribed by Lessor, appointing Lessor or any other Person selected by Lessor as attorney-in-fact for Lessee to take all necessary actions on behalf of Lessee to obtain possession of and to remove the Aircraft from the jurisdiction of the State of Registration and from any other jurisdiction where the Aircraft may be located and/or registered and to de-register the Aircraft from the Register upon the cancellation, termination, or expiration of this Lease	  	Delivery Date	  		
				
29.	  	A duly executed Irrevocable De-Registration and Export Request Authorisation ( IDERA ) for filing with the IR	  	Delivery Date	  		
				
30.	  	Letters addressed (1) to air traffic control authority in the State of Registration, (2) in blank to relevant air traffic control authorities and airport authorities where Lessee operates or intends to operate the Aircraft and (3) to Eurocontrol (if the Aircraft is operated to or over Europe), authorising the recipient to issue to Lessor, upon Lessor’s request made from time to time, a statement of account of all sums due by Lessee to the authority with respect to the Aircraft and which letters shall survive the cancellation, termination and expiration of the Lease	  	Delivery Date	  		
				
31.	  	A certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or an Irish Revenue Form VAT 60B (or applicable successor form) with respect to the Lease, as requested by Lessor, to enable Lessor to comply with applicable Laws relating to VAT	  	Delivery Date	  		
				
32.	  	Follow up opinion of Lessee’s counsel in form and substance reasonably acceptable to Lessor	  	Delivery Date	  		
				
33.	  	Such other certificates, documents, opinions and agreements relating to the transactions contemplated by or related to this Lease and the other Operative Documents, as may be necessary or reasonably requested by Lessor	  	Delivery Date	  		
				
34.	  	Copy of permanent Certificate of Registration for the Aircraft showing due registration in the name of Lessor as owner and lessor and Lessee as lessee	  	Ninety (90) days following the Delivery Date	  		

	  	App 6 - 3	  	APPENDIX 6	
	  		  	CONDITIONS PRECEDENT	

Appendix 6B
to Aircraft Lease Agreement
LESSEE’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 2296
Lease Execution Date: 09 November 2010
Scheduled Delivery Date: *****

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Lease Agreement	  	Lease Execution Date	  		
				
2.	  	Power of Attorney evidencing the authority of Lessor’s representatives designated to execute the Lease and the Lease Supplement on behalf of Lessor	  	Lease Execution Date	  		
				
3.	  	Lease Supplement	  	Delivery Date	  		
				
4.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / French Aviation Authority	  	Delivery Date	  		
				
5.	  	Quiet Enjoyment Letter from Security Trustee	  	Delivery Date	  		
				
6.	  	Quiet Enjoyment Letter from Owner Participant	  	Delivery Date	  		
				
7.	  	Airframe Assignment of Warranties	  	Delivery Date	  		
				
8.	  	Engine Assignment of Warranties	  	Delivery Date	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6 - 4	  	APPENDIX 6	
	  		  	CONDITIONS PRECEDENT	

Appendix 7
to Aircraft Lease Agreement
RETURN ACCEPTANCE CERTIFICATE
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”) hereby acknowledges, pursuant to the Aircraft Lease Agreement made between Lessor and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”) dated as of 09 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”), that on this              day of              20      , at          :          GMT it has received from Lessee possession of the following Aircraft. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
 
 	(a)	Airframe	

	 	Aircraft Model:	  	Airbus A319-132	 		
				
	 	Manufacturer’s Serial Number:	  	2296	 		
				
	 	Certified Weights:	  	Max Take-off:
Max Zero Fuel:
Max Landing:
Max Taxi:
Operating Empty:	 	                                     

                                     
                                     	
Airframe Maintenance Status:
Total Flight Hours:                             
Total Cycles: ________________
Total Flight Hours Since Last 6 Year HMV Check: ____________
Total Cycles Since Last 6 Year HMV Check: ____________
Date Last 6 Year HMV Check Accomplished: ______________
Total Flight Hours Since Last 12 Year HMV Check: ____________
Total Cycles Since Last 12 Year HMV Check: ____________
Date Last 12 Year HMV Check Accomplished: ______________
Total Flight Hours Since Last C-Check: ____________
Total Cycles Since Last C-Check: ____________
Date Last C-Check Accomplished: ______________
 
 	(b)	Engines (Installed)	

	 	Engine Type:	  	IAE V2524-A5	 		
				
	 	Manufacturer’s Serial Numbers:	  	_____________________ and
_____________________	 		
				
	 	Maximum Takeoff Thrust Rating:	  	_____________________ lbs.	 		

	  	App 7 - 1	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Engines Maintenance Status:
Position 1
ESN: _____________
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Engine Restoration: __________
Total Cycles Since Last Engine Restoration: ___________
Date of Last Engine Restoration: ____________________
Position 2
ESN: _____________
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Engine Restoration: __________
Total Cycles Since Last Engine Restoration: ___________
Date of Last Engine Restoration: ____________________
(c) APU (Installed)
APU Manufacturer & Model:     ____________________
Manufacturer ’ s Serial Number: ____________________ and 
                                                            ___________________
APU Maintenance Status:
Total APU Hours: __________
Total APU Cycles: __________
Total APU Hours Since Last Overhaul: __________
Total APU Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
(d) Landing Gear (Installed)
Manufacturer ’ s Serial Numbers:         Left Main: _________________
                                                                    Right Main: ________________
                                                                   Nose: _____________________

	  	App 7 - 2	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Landing Gear Maintenance Status:
Left Main
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
Right Main
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
Nose
Total Flight Hours: __________
Total Cycles: ___________
Total Flight Hours Since Last Overhaul: __________
Total Cycles Since Last Overhaul: ___________
Date of Last Overhaul: _____________________
 
 	(e)	Interior Configuration	

	 	Seating	  	 	  		
				
	 	Lavatories	  	 	  		
				
	 	Galleys	  	 	  		
				
	 	Passenger Service Units	  	 	  		
				
	 	PSIU	  	 	  		
 
 	(f)	Aircraft Documents and Other Equipment	
 
 	    	As described in Attachment 1 to this Return Acceptance Certificate.	
 
 	(g)	Fuel On Board: ______________ kgs.	
 
2.	Maintenance Reserves (check one)	
 
 	             	There are no claims for reimbursement from the Maintenance Reserves outstanding and unpaid as of the date hereof.	
or
 
 	             	Claims for reimbursement from the Maintenance Reserves are outstanding as of the date hereof and are itemised or otherwise described in Attachment [      ] hereto.	

	  	App 7 - 3	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

3.	Return Acceptance	
The Aircraft and Aircraft Documents are hereby accepted by Lessor for return under the Lease subject to (i) the provisions of the Lease, and (ii) the correction by Lessee (or procurement by Lessee at Lessee’s cost) within          days following the date hereof of the discrepancies specified in Attachment 3 hereto.
 
4.	Termination of Lease	
Subject to the following paragraph, the Lease is hereby terminated without prejudice to Lessee’s continuing obligations and Lessor’s continuing rights under the Lease.
 
5.	Lessee’s Representations and Warranties	
Lessee represents and warrants that during the Lease Term all maintenance and repairs to the Aircraft and each Item of Equipment were performed in accordance with the requirements of the Lease.
 
6.	Governing Law	
THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance Certificate to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	   	 		 	By:	 	   	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	   	 		 	 	 	 	
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		
[MSN 2296]

	  	App 7 - 4	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Attachment 1 to Return Acceptance Certificate
Aircraft Documents and Equipment Inventory

Aircraft Documents	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Aircraft Manuals	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Loose Equipment	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Avionics Inventory	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		
	  		  		
Hard Time Components Inventory	
	  		  		
	  	1.	  	_______	
	  	2.	  	_______	
	  	.	  		
	  	.	  		
	  	.	  		

	  	App 7 - 5	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Attachment 2 to Return Acceptance Certificate
Maintenance Reserve Claims Outstanding at Return
[ Write “None” if there are no claims outstanding]

Type of Work	  	Service Provider 	  	Invoice Amount 	
—  	  	—  	  	—  	

	  	App 7 - 6	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Attachment 3 to Return Acceptance Certificate
Aircraft Discrepancies
[ Write “None” if there are no Aircraft Discrepancies]

	  	App 7 - 7	  	APPENDIX 7	
	  		  	RETURN ACCEPTANCE CERTIFICATE	

Appendix 8
to Aircraft Lease Agreement
FORMS

Form 1	  	Form of Aircraft Utilisation Report	
		
Form 2	  	Maintenance Status Report	
		
Form 3	  	Form of Air Traffic Control and Airport Authorities Letter	
		
Form 4	  	Form of Lease Termination Agreement	
		
Form 5	  	Form of Recognition of Rights (Engines)	
		
Form 6	  	Form of Lessee Acknowledgment of Security Assignment	
		
Form 7	  	Form of Quiet Enjoyment Letter - Security Trustee	
		
Form 8	  	Form of Quiet Enjoyment Letter - Owner Participant	

	  	App 8 - 1	  	APPENDIX 8	
	  		  	FORMS	

Form 1
Form of Aircraft Utilisation Report
UTILISATION REPORT
Lessee: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris)
Date of Report: __________ 20__
Report Period: ________ 20___ through ________ 20___

General Information

Aircraft Model: Airbus A319-132	  	Engine Type: IAE V2524-A5	
		
Airframe Serial Number: 2296	  	Lease Engine 1 Serial Number: __________	
		
Lease APU Serial Number: _______________	  	Lease Engine 2 Serial Number: __________	
		
Lease Nose Landing Gear S/N:_____________	  	Lease Left Main Gear S/N: ____________	
		
	  	Lease Right Main Gear S/N: ___________	

		
Installed 1 Engine S/N: _______________	  	Installed 2 Engine S/N: ______________	
		
Installed APU S/N: _________________	  	Installed Nose Landing Gear S/N: _______	
		
Installed Left Main Gear S/N: _________	  	Installed Right Main Gear S/N: ________	
Utilisation Information – Airframe

		
Airframe Flight Hours: _________________	  	Airframe Cycles: ______________	
		
Airframe Total FHSN: _________________	  	Airframe Total CSN: ______________	
		
Airframe Base: _________________	  	Airframe Status: ______________
[In Service; Check; etc.]	
Utilisation Information – Engines

	
Lease Engine 1 – Serial Number ________	
		
FH During Report Period: _____________	  	Cycles During Report Period: _________	
		
FH:Cycle Utilisation Ratio: ___:1	  	Cycles Since New: ____________	
		
FH Since New: _____________	  	Cycles Since Restoration: ____________	
		
FH Since Restoration: __________________	  	Installed On MSN: _____________	
		
Airframe Position: ________________	  	Airframe Reg Mark: __________	
	
Airframe Owner (if not Owner): ___________________________________________________	
		
Removed From Service: ____________ (Date)	  	Current Location: _______________	
	
Reason for Removal: ____________________________________________________	
	
Lease Engine 2 – Serial Number _________	
		
FH During Report Period: _____________	  	Cycles During Report Period: _____________	
		
FH:Cycle Utilisation Ratio: ___:1	  	Cycles Since New: ______________	
		
FH Since New: _____________	  	Cycles Since Restoration: _______________	

	  	App 8 - 2	  	APPENDIX 8	
	  		  	FORMS	

			
		
FH Since Restoration: __________________	  	Installed On MSN: ________________	
		
Airframe Position: ________________	  	Airframe Reg Mark: ____________	
	
Airframe Owner (if not Owner): ___________________________________________	
		
Removed From Service: ____________ (Date)	  	Current Location: _________________	
	
Reason for Removal: _________________________________________________________	
	
Installed Engine 1 – Serial Number ________ (if not Lease Engine)	
		
Engine Owner: _________________	  	Airframe Position: ________________	
	
Installed Engine 2 – Serial Number ________ (if not Lease Engine)	
		
Engine Owner: _________________	  	Airframe Position: ________________	
Utilisation Information – APU

	
Lease APU – S/N _________	
		
APU Hours During Report Period: __________	  	APU Cycles During Report Period: _________	
		
APU Hours Since New: _____________	  	APU Cycles Since New: ______________	
		
APU Hours Since Overhaul: ______________	  	APU Cycles Since Overhaul: ___________	
		
Installed On MSN: ________________	  	Removed From Service: ____________ (Date)	
		
Airframe Reg Mark: ____________	  	Current Location: _________________	
	
Airframe Owner (if not Owner): ___________________________________________________	
	
Reason for Removal: _________________________________________________________	
	
Installed APU – Serial Number ________ (if not Lease APU)	
		
APU Owner: _________________	  		
Utilisation Information – Landing Gear

	
Lease Nose Landing Gear – S/N _________	
		
FH During Report Period: _____________	  	Cycles During Report Period: _____________	
		
FH Since New: _____________	  	Cycles Since New: ______________	
		
FH Since Overhaul: __________________	  	Cycles Since Overhaul: _______________	
		
Removed From Service: ____________ (Date)	  	Current Location: _________________	
	
Reason for Removal: _________________________________________________________	
	
Installed Nose Landing Gear – S/N _________ (if not Lease Nose Landing Gear)	
		
NLG Owner: _________________	  		
	
Lease Left Main Landing Gear – S/N _________	
		
FH During Report Period: _____________	  	Cycles During Report Period: _____________	
		
FH Since New: _____________	  	FH Since Restoration: __________________	
		
Cycles Since New: ______________	  	Cycles Since Restoration: _______________	

	  	App 8 - 3	  	APPENDIX 8	
	  		  	FORMS	

			
Removed From Service: ____________ (Date)	  	Current Location: _________________	
	
Reason for Removal: _________________________________________________________	
	
Installed Left Main Landing Gear – S/N _________ (if not Lease Left Main Landing Gear)	
		
Left MLG Owner: _________________	  		
	
Lease Right Main Landing Gear – S/N _________	
		
FH During Report Period: _____________	  	Cycles During Report Period: _____________	
		
FH Since New: _____________	  	FH Since Restoration: __________________	
		
Cycles Since New: ______________	  	Cycles Since Restoration: _______________	
		
Removed From Service: ____________ (Date)	  	Current Location: _________________	
	
Reason for Removal: _________________________________________________________	
	
Installed Right Main Landing Gear – S/N _________ (if not Lease Right Main Landing Gear)	
	
Right MLG Owner: _________________	

CONCESIONARIA VUELA COMPAÑÍA  DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)	

(Name)	

(Title)	

(Date)	

					
	  	App 8 - 4	  	APPENDIX 8	
	  		  	FORMS	

Form 3
Maintenance Status Report – Required Information

1.      Airframe	
	
a.      Aircraft and Appliances Airworthiness Directive Summaries	
	
b.      Aircraft times and cycles log	
	
c.      Airframe Utilisation Report	
	
d.      Avionics Computerised Inventory	
	
e.      CPCP Summary as may be applicable	
	
f.       Dent and Damage Chart	
	
g.      Emergency Equipment Layout Drawing	
	
h.      Fire Blocking Certification	
	
i.       Maintenance last done next due task listing	
	
j.       Life Limited Parts Summary	
	
k.      Interior Layout configuration	
	
l.       Maintenance Program Summary and Time Interval Summary-Upon request	
	
m.     Service Bulletin, Engineering Orders, Major Repair and Alteration Summaries	
	
n.      Scheduled Maintenance Checks Tally Sheets	
	
o.      Time Controlled Components Summary	
	
2.      Engines	
	
a.      Airworthiness Directive Summaries	
	
b.      Last Shop visit/Engine Restoration Mini Package	
	
c.      Current Disk Sheet	
	
d.      Date, Flight Hours and Cycles of Engine at last Engine install (including Airframe Flight Hours and Cycles)	
	
e.      Service Bulletin Status / Engineering Orders and MOD Summaries	
	
f.       Trend Monitor Readout for the three (3) months prior to the report	
	
3.      Landing Gear	
	
a.      Aircraft date, Flight Hours and Cycles at installation	
	
b.      Landing Gear (each) Overhaul/restoration date, Flight Hours and Cycles.	
	
c.      Life Limited Parts Summary	
	
d.      Last shop visit/Overhaul report	
	
4.      APU	
	
a.      Airworthiness Directive Summary	
	
b.      Last shop visit/Overhaul mini package report	
	
c.      Flight Hours and Cycles formula (as applicable if recording device not utilised)	
	
d.      Aircraft/ APU date, APU Hours and APU Cycles at installation.	
	
e.      Life Limited Parts Summary	
	
f.       Service Bulletin Summary	

	  	App 8 - 5	  	APPENDIX 8	
	  		  	FORMS	

Form 3
Form of Air Traffic Control and Airport Authorities Letters
[LESSEE’S LETTERHEAD]
 
To:	All Relevant Air Traffic Control and Airport Authorities	
 
    	Mexican General Department of Civil Aeronautics*	
    	(Dirección General de Aeronáutica Civil)	
 
    	Eurocontrol Organisation for the Safety of Air Navigation	
    	Rue de la Fusée, 96	
    	B-1130 Bruxelles	
    	Belgium	
 
*	To be used with the DGAC or any other Mexican authority only following the occurrence and continuance of an Event of Default	
 
Re:	Air Navigation / Airport Charges – Airbus A319-132 Aircraft with Manufacturer’s Serial Number 2296 and Mexican Registration Mark XA-VOR (the “ Aircraft ”)	
Ladies and Gentlemen,
We hereby confirm that Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (the “ Lessee ”) has entered into an Aircraft Lease Agreement with Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) dated as of 09 November 2010 (the “ Lease ”) related to the above-referenced Aircraft, pursuant to which CIT Aerospace International (“ CITAI ”) serves as servicer.
We wish to enable each of Lessor and CITAI to monitor the value of air navigation and other charges incurred by us in relation to the Aircraft.
We hereby irrevocably and unconditionally authorise you to release to Lessor and CITAI (or its duly authorised representatives) upon its request from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and to the extent the same might result in a lien upon the Aircraft, all other aircraft operated by Lessee.
This authorisation may only be revoked or amended by a written instruction signed by us, Lessor and CITAI.
Yours faithfully,

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 6	  	APPENDIX 8	
	  		  	FORMS	

Form 4
Form of Lease Termination Agreement
LEASE TERMINATION
(MSN 2296)
By execution hereof (this “ Lease Termination ”), the undersigned, WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”), as lessor, and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”), as lessee, acknowledge and agree that the Lease Agreement defined and described on Exhibit A attached hereto, has by its terms expired or has otherwise been cancelled or terminated, and release the Equipment, which is also defined and described on Exhibit A attached hereto, from the terms and conditions of such Lease Agreement.
This Lease Termination is without prejudice to the surviving rights of the parties under the Lease Agreement and nothing in this Lease Termination shall relieve either party from its obligations under the Lease Agreement which are still unsatisfied and/or from any of its obligations under the Lease Agreement which may be due after the date of this Lease Termination.
This Lease Termination may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Dated this _____ day of ______________ 20__.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	
					
By:	 	 	 		 	By:	 	 	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	 	 		 		 		
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		

	  	App 8 - 7	  	APPENDIX 8	
	  		  	FORMS	

EXHIBIT A
The Equipment
[TO BE COMPLETED AT LEASE TERMINATION]
The Lease Agreement
[TO BE COMPLETED AT LEASE TERMINATION]

	  	App 8 - 8	  	APPENDIX 8	
	  		  	FORMS	

Form 5
Form of Recognition of Rights (Engines)
[ON THE LETTERHEAD OF THE OWNER/
LESSOR/SECURED PARTY OF THE AIRFRAME
ON WHICH THE ENGINE IS BEING INSTALLED]
[INSERT DATE]
[INSERT ADDRESS OF AIRCRAFT OWNER]
 
 	Re:	Acknowledgment of ownership of and waiver of lien interest in one (1) ___________ Aircraft Engine bearing Manufacturer’s Serial Number ___________ (the “ Engine ”)	
Dear Sirs:
The undersigned, _______________________ (“ Secured Party ”), is the legal and beneficial owner of one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number [              ] and [              ] registration mark [              ] (“ Secured Aircraft ”), which Secured Aircraft is on lease to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”). [NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S INTEREST AS NECESSARY]
We understand that, pursuant to an aircraft lease agreement dated as of 09 November 2010 (the “ Aircraft Lease ”) between Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee, as lessor (“ Lessor ”) and Lessee, you are the owner of and have leased one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 2296 and Mexican registration mark XA-VOR to Lessee and which Aircraft Lease includes the lease of one (1) IAE V2524-A5 aircraft engine bearing manufacturer’s serial number [              ] (the “ Leased Engine ”). We have been advised by Lessee that it desires to install the Leased Engine on the Secured Aircraft. [NOTE: PROVIDE MODIFIED STATEMENT AND DEFINITIONS IF LESSOR IS NOT OWNER OF THE AIRCRAFT]
At the request of Lessee and for its benefit and the benefit of CIT, Secured Party hereby (i) acknowledges and agrees that CIT is the owner and lessor to Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that Secured Party has not acquired or claimed nor will it acquire or claim, and hereby waives, releases and renounces any right, title or interest in the Leased Engine by reason of the Leased Engine being installed on the Secured Aircraft at any time and that the foregoing shall apply notwithstanding any contrary laws of accession, or the like, which may from time to time be enacted or in effect in any jurisdiction where the Leased Engine and/or Secured Aircraft may be located, and the same are expressly waived by Secured Party hereby, (iii) agrees not to impede or interfere with the exercise by CIT of its rights and remedies to regain possession of the Leased Engine pursuant to the Aircraft Lease, (iv) agrees that the foregoing acknowledgments and agreements of Secured Party shall inure to the benefit of CIT’s successors and assigns, and (v) if requested by CIT, consents to and agrees to cooperate with CIT (at no cost to Secured Party) in connection with the filing of any notices and registrations, in form and substance reasonably satisfactory to Secured Party, of CIT’s interest in the Leased Engine with the applicable governmental authorities in the country of registration of the Secured Aircraft, the country of Lessee’s organisation and such other jurisdiction as CIT may deem appropriate and, if applicable, the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.

	  	App 8 - 9	  	APPENDIX 8	
	  		  	FORMS	

THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Sincerely,

	  	App 8 - 10	  	APPENDIX 8	
	  		  	FORMS	

Form 6
Form of Lessee Acknowledgment of Security Assignment
 
From:	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)	
 
To:	Deutsche Bank Trust Company Americas, as Security Trustee (“ Security Trustee ”)	
Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”)
__________ 20___
Ladies and Gentlemen:
Reference is made to that certain Aircraft Lease Agreement dated as of 09 November 2010 (the “ Lease ”) entered into between Lessee and Lessor with respect to one (1) Airbus model A319-132 aircraft bearing manufacturer’s serial number 2296. Any and all initially capitalised terms used herein shall have the meanings ascribed thereto in the Lease, unless specifically defined herein.
We acknowledge that pursuant to Section 25.6 of the Lease, Lessor has advised us that the intent and effect of the Security Assignment is to confer upon Security Trustee all rights, title and interest of Lessor under the Lease. In consideration of payment to us of ***** and the issuance to us of the Quiet Enjoyment Letters, receipt of which we hereby acknowledge, and subject to the provisions of such Quiet Enjoyment Letters, we hereby agree as follows:
 
 	1.	Subject to Section 2 below, to comply with the provisions of the Lease, specifically including, but not limited to Article 25.	
 
 	2.	If Security Trustee issues to us a notice (a “ Relevant Notice ”) that its rights as assignee under the Security Assignment have become exercisable we agree that we shall thereafter (a) accomplish, observe and comply with all our other undertakings and obligations under the Lease in favour and for the benefit of Security Trustee as if Security Trustee were named as lessor therein instead of Lessor; and (b) if Security Trustee so requests, enter into a lease with Security Trustee or its nominee, on the same terms (mutatis mutandis) as the Lease, provided that (i) no such new lease shall have the effect of releasing Lessor from any of its obligations to us under the Lease, and (ii) Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result from entering into such lease.	
 
 	3.	If Lessor is in breach of any of its obligations, express or implied, under the Lease, or if any event occurs which would permit us to terminate, cancel or surrender the Lease we will, without waiving any such breach or right after the 14 day period referenced below if such breach has not been cured or a new lease has not been entered into, (a) promptly after becoming aware of it, give Security Trustee notice of such breach or event, (b) accept as adequate remedy for any such breach performance by Security Trustee of such obligations within 14 days of our written notice to Security Trustee; and (c) subject to Security Trustee’s performance and satisfaction in full of such obligations, if the Security Trustee so requests, enter into a lease with Security Trustee on	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 8 - 1	  	APPENDIX 8	
	  		  	FORMS	

 	terms identical to the Lease, mutatis mutandis; provided, however, that Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result on the date hereof from entering into such lease.	
 
 	4.	We agree that after issue by Security Trustee of any Relevant Notice, we shall not recognise the exercise by Lessor of any of its rights and powers under the Lease unless and until requested to do so by Security Trustee.	
 
 	5.	We agree that the Security Trustee shall have the benefits, rights and privileges of the indemnity provisions in Sections 18.1 and 21.1 of the Lease (without increasing the scope of such provisions) and agree that we are bound by the terms of such sections, as though the same were set out herein in full, mutatis mutandis, provided, however, that no additional cost or expense shall result.	
 
 	6.	Other than as set forth in Section 25.6 of the Lease, no notice of assignment has been received by Lessee or, if Lessee has received any notice of assignment, such notice has been terminated.	
 
 	7.	This acknowledgment shall be governed by and construed in accordance with New York Law.	

Very truly yours,
 
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN,
S.A.P.I. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 2	  	APPENDIX 8	
	  		  	FORMS	

Form 7
Form of Quiet Enjoyment Letter – Security Trustee
 
From:	Deutsche Bank Trust Company Americas, as Security Trustee (“ Security Trustee ”)	
 
To:	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)	
 
Dated:	[   ]	
 
Re:	Aircraft Lease Agreement dated as of 09 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 2296 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
Pursuant to that certain Security Trust Agreement dated as of December 11, 2008 among CIT Aviation Finance II Ltd., Lessor, the additional grantors referred to therein, and Security Trustee, Lessor has assigned to Security Trustee by way of security all of its rights, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us. We further confirm that if we have issued a Relevant Notice (as defined in the Lessee Acknowledgment) and we have succeeded to the interest of Lessor under the Lease, we shall thereafter honour, perform and accomplish all of Lessor’s obligations to Lessee accruing thereafter under the Lease.	
 
 	2.	To the extent we receive any amounts payable by Lessee to Lessor under the Lease, we shall hold, apply, reimburse and/or return such amounts in accordance with the relevant provisions of the Lease.	
 
 	3.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	

	  	App 8 - 1	  	APPENDIX 8	
	  		  	FORMS	

 	4.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	5.	This letter shall be governed by and construed in accordance with New York Law.	
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,
 
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but solely as Security Trustee	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

Agreed and Accepted
 
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 2	  	APPENDIX 8	
	  		  	FORMS	

Form 8
Form of Quiet Enjoyment Letter – Owner Participant
 
From:	CIT Aviation Finance II Limited (“ Owner Participant ”)	
 
To:	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)	
 
Dated:	[   ]	
 
Re:	Aircraft Lease Agreement dated as of 09 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 2296 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us.	
 
 	2.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	
 
 	3.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	4.	This letter shall be governed by and construed in accordance with New York Law.	

	  	App 8 - 1	  	APPENDIX 8	
	  		  	FORMS	

Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,
 
CIT AVIATION FINANCE II LIMITED	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

Agreed and Accepted
 
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 2	  	APPENDIX 8	
	  		  	FORMS	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.28
Execution Version
AIRCRAFT LEASE AGREEMENT
Dated as of 17 November 2010
BETWEEN
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED
(not in its individual capacity but solely as trustee)
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
( D / B / A VOLARIS)
as Lessee

 
One (1) Airbus A319-132 Aircraft
Manufacturer’s Serial Number 3252

 

This Aircraft Lease Agreement may be executed in several counterparts. To the extent, if any, that this Aircraft Lease Agreement or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Aircraft Lease Agreement or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.

 

CONTACTS - SERVICER
 
NOTE:	This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease	
Primary Business Contact:
Israel Padron
Vice President - Marketing
CIT Aerospace
1100 Lee Wagener Boulevard, Suite 204
Fort Lauderdale, Florida 33315, U.S.A.
Tel: +1 (954) 359 0113
Fax: +1 (954) 359 5542
e-mail: israel.padron@cit.com

Payment Inquiries:
 
Operations
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 1 656 1004
Fax: +353 1 656 1001
e-mail: citaioperations@cit.com	  	Technical Inquiries:
 
Asset Manager
e-mail: aerospaceassetmgmt@cit.com	
		
Utilisation Reporting:
 
Asset Manager
e-mail: aerospaceassetmgmt@cit.com
 
Operations
e-mail: citaioperations@cit.com	  	Financial Reporting:
 
Operations
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 1 656 1004
Fax: +353 1 656 1001
e-mail: citaioperations@cit.com	
		
Insurance Reporting:
 
Portfolio Services
CIT Aerospace
11 West 42 nd Street, 12 th Floor
New York, NY 10036
U.S.A.
Tel: +1 (212) 461 7844
Fax: +1 (877) 525 9183
e-mail: alice.arazny@cit.com	  	Legal Contact:
 
Thomas Schmid
CIT Aerospace
3 George’s Dock, IFSC
Dublin 1, Ireland
Tel: +353 1 656 1000
Fax: +353 1 656 1001
e-mail: thomas.schmid@cit.com	
 
- i -

CONTACTS - LESSEE
 
NOTE:	This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease	
Primary Business Contact
Mario Geyne
Financial, Fleet and Planning Director
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma No. 490 ~ Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210, México, D.F., México
Tel: +52 (55) 5261 6400
Fax: +52 (55) 5261 6460
e-mail: mario.geyne@volaris.com.mx

Payment Inquiries:
 
Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6428
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	  	Technical Inquiries:
 
Guillermo Cano
Director – Maintenance
 
Tel: +52 (55) 5261 6415
Fax: +52 (55) 5261 6460
e-mail: guillermo.cano@volaris.com.mx	
		
Utilisation Reporting:
 
Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6415
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	  	Financial Reporting:
 
Carlos Gonzalez
Financial Controller
 
Tel: +52 (55) 5261 6428
Fax: +52 (55) 5261 6460
e-mail: carlos.gonzalez@volaris.com.mx	
		
Insurance/Risk Management Contact:
 
Maria Elena Rodriguez
Risk Manager
 
Tel: +52 (55) 5261 6435
Fax: +52 (55) 5261 6460
e-mail: maelena.rodriguez@volaris.com.mx	  	Legal Contact:
 
Alfonso Ascencio
General Counsel
 
Tel: +52 (55) 5261 6412
Fax: +52 (55) 561 6460
e-mail: alfonso.ascencio@volaris.com.mx	
 
- ii -

CONTENTS

Article	  	 	  	 	  	Page	 	
			
1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
2.	  	LEASE TERM; NATURE OF LEASE	  	 	3	  	
	  	2.1.	  	Lease Term	  	 	3	  	
	  	2.2.	  	Nature of Lease	  	 	3	  	
3.	  	RENT	  	 	4	  	
	  	3.1.	  	Agreement to Pay Rent	  	 	4	  	
	  	3.2.	  	Basic Rent	  	 	4	  	
	  	3.3.	  	Supplemental Rent	  	 	4	  	
	  	3.4.	  	Obligation to Perform Unconditional	  	 	4	  	
4.	  	SECURITY DEPOSIT	  	 	5	  	
	  	4.1.	  	Security Deposit Amount	  	 	5	  	
	  	4.2.	  	Nature of Security Deposit	  	 	5	  	
	  	4.3.	  	Application of Security Deposit	  	 	5	  	
	  	4.4.	  	Effect of Application of Security Deposit	  	 	5	  	
	  	4.5.	  	Repayment of Security Deposit	  	 	5	  	
	  	4.6.	  	Security Letter of Credit	  	 	6	  	
5.	  	PAYMENTS	  	 	8	  	
	  	5.1.	  	Account	  	 	8	  	
	  	5.2.	  	Payments on Non-Business Days	  	 	8	  	
	  	5.3.	  	Timing of Payments	  	 	8	  	
	  	5.4.	  	Late Payment	  	 	8	  	
	  	5.5.	  	Calculation of Interest and Prorating of other Payments	  	 	8	  	
	  	5.6.	  	Payments in Dollars	  	 	8	  	
	  	5.7.	  	Retention of Certain Payments	  	 	9	  	
	  	5.8.	  	Application of Payments	  	 	9	  	
6.	  	AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION	  	 	10	  	
	  	6.1.	  	Aircraft Delivery Condition	  	 	10	  	
	  	6.2.	  	Lessee’s Inspection of Aircraft; No Lessor Liability	  	 	10	  	
7.	  	CONDITIONS PRECEDENT TO DELIVERY	  	 	11	  	
	  	7.1.	  	Conditions Precedent	  	 	11	  	
	  	7.2.	  	Waiver or Deferral of Conditions Precedent	  	 	11	  	
8.	  	DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	  	 	12	  	
	  	8.1.	  	Delivery Location and Timing	  	 	12	  	
	  	8.2.	  	Delivery Subject to Return from Prior Operator	  	 	12	  	
	  	8.3.	  	[Reserved]	  	 	12	  	
	  	8.4.	  	[Reserved]	  	 	12	  	
	  	8.5.	  	Event of Loss to Aircraft Prior to Delivery	  	 	12	  	
	  	8.6.	  	Lessee Acceptance of Aircraft	  	 	12	  	
	  	8.7.	  	Risk of Loss to Aircraft following Delivery	  	 	12	  	
	  	8.8.	  	Waiver of Remedies for Delay in Delivery	  	 	12	  	
9.	  	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	  	 	13	  	
	  	9.1.	  	Lessee’s Representations and Warranties	  	 	13	  	
	  	9.2.	  	Application of Representations and Warranties; Survival	  	 	15	  	
	  	9.3.	  	Lessee’s General Covenants	  	 	15	  	
10.	  	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	  	 	18	  	
	  	10.1.	  	General Representations and Warranties of Lessor	  	 	18	  	
 
- iii -

									
	  	10.2.	  	Covenant of Quiet Enjoyment	  	 	18	  	
	  	10.3.	  	Disclaimer; Waiver of Warranties as between Indemnitees and Lessee;	  				
	  		  	Waiver of Remedies	  	 	19	  	
	  	10.4.	  	Disclaimer and Waiver of Incidental, Consequential, Special and Punitive Damages	  	 	21	  	
	  	10.5.	  	No Duty of Indemnitees to Inspect, Etc.	  	 	21	  	
11.	  	GENERAL OPERATION OF THE AIRCRAFT	  	 	22	  	
	  	11.1.	  	General Operation	  	 	22	  	
	  	11.2.	  	Insured Operations	  	 	22	  	
	  	11.3.	  	Carriage of Goods	  	 	23	  	
	  	11.4.	  	Operational Expenses	  	 	23	  	
	  	11.5.	  	Compliance with Laws	  	 	23	  	
	  	11.6.	  	Lessee’s Covenants Regarding Use of the Aircraft	  	 	24	  	
	  	11.7.	  	Certain Tax Matters	  	 	25	  	
12.	  	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	  	 	26	  	
	  	12.1.	  	General	  	 	26	  	
	  	12.2.	  	Accomplishment of Tasks and Repairs	  	 	26	  	
	  	12.3.	  	Information on Maintenance	  	 	27	  	
	  	12.4.	  	Aircraft Documents in English Language	  	 	27	  	
	  	12.5.	  	Originals	  	 	27	  	
	  	12.6.	  	Performance of Maintenance	  	 	27	  	
	  	12.7.	  	Alterations, Modifications and Additions	  	 	28	  	
	  	12.8.	  	Replacement of Parts	  	 	29	  	
	  	12.9.	  	Title to Parts	  	 	30	  	
	  	12.10.	  	Temporary Replacement of Parts	  	 	31	  	
	  	12.11.	  	Exchanging Parts	  	 	31	  	
	  	12.12.	  	Temporary Attachment and Removal of Engines	  	 	32	  	
	  	12.13.	  	Installation of Items of Equipment on Other Aircraft	  	 	33	  	
	  	12.14.	  	Failure to Reinstall Engines and Items of Equipment on the Aircraft	  	 	33	  	
13.	  	MAINTENANCE RESERVES	  	 	34	  	
	  	13.1.	  	Maintenance Reserves	  	 	34	  	
	  	13.2.	  	Discrepancies	  	 	34	  	
	  	13.3.	  	Rights in Maintenance Reserves	  	 	34	  	
	  	13.4.	  	Claims for Reimbursement - Timing	  	 	35	  	
14.	  	MANUFACTURERS’ WARRANTIES	  	 	36	  	
	  	14.1.	  	Assignable Warranties	  	 	36	  	
	  	14.2.	  	Reassignment; Assignment of Lessee Warranties	  	 	36	  	
	  	14.3.	  	Warranty Claims	  	 	36	  	
15.	  	SUBLEASING AND WET LEASING	  	 	37	  	
	  	15.1.	  	Subleasing	  	 	37	  	
	  	15.2.	  	Wet Leasing	  	 	38	  	
	  	15.3.	  	No Independent Subleasing of Items of Equipment	  	 	39	  	
	  	15.4.	  	Expenses	  	 	39	  	
	  	15.5.	  	Lessee Remains Liable	  	 	39	  	
16.	  	REPORTING AND INSPECTIONS	  	 	40	  	
	  	16.1.	  	Financial Reporting	  	 	40	  	
	  	16.2.	  	Aircraft Utilisation and Other Reporting/Information	  	 	41	  	
	  	16.3.	  	Further Information; Inspections	  	 	41	  	
	  	16.4.	  	Technical Report Prior to Return of Aircraft	  	 	42	  	
17.	  	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	  	 	43	  	
	  	17.1.	  	Registration	  	 	43	  	
	  	17.2.	  	Identification Plates	  	 	43	  	
 
- iv -

									
	  	17.3.	  	Aeronautics Authority Acknowledgment	  	 	43	  	
	  	17.4.	  	Authorisation to Make Perfection Filings	  	 	43	  	
	  	17.5.	  	Perfection of Title	  	 	44	  	
	  	17.6.	  	Cape Town Convention	  	 	44	  	
	  	17.7.	  	Permitted Liens	  	 	46	  	
	  	17.8.	  	Expenses	  	 	47	  	
18.	  	GENERAL INDEMNITY	  	 	48	  	
	  	18.1.	  	Scope	  	 	48	  	
	  	18.2.	  	Lessee’s Release	  	 	49	  	
	  	18.3.	  	Repayment	  	 	49	  	
	  	18.4.	  	Payment	  	 	49	  	
	  	18.5.	  	Exclusion	  	 	49	  	
	  	18.6.	  	After-Tax Nature of Indemnity	  	 	50	  	
	  	18.7.	  	Contest	  	 	50	  	
	  	18.8.	  	Survival	  	 	51	  	
19.	  	INSURANCE	  	 	52	  	
	  	19.1.	  	Obligation to Insure	  	 	52	  	
	  	19.2.	  	Liability Insurance	  	 	52	  	
	  	19.3.	  	Contractual Liability; Tail Coverage for Liability Insurance	  	 	52	  	
	  	19.4.	  	Insurance Against Loss or Damage to the Items of Equipment	  	 	52	  	
	  	19.5.	  	Reinsurance	  	 	53	  	
	  	19.6.	  	Requirements for All Insurances	  	 	54	  	
	  	19.7.	  	Reports	  	 	55	  	
	  	19.8.	  	Assignee of Lessor’s and/or Owner’s Interests	  	 	55	  	
	  	19.9.	  	Failure to Insure	  	 	55	  	
	  	19.10.	  	Lessor’s Right to Insure	  	 	55	  	
	  	19.11.	  	Changes to Insurance Practice	  	 	56	  	
	  	19.12.	  	AVN 67B or AVN 67C	  	 	56	  	
20.	  	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	  	 	57	  	
	  	20.1.	  	Risk of Loss and Damage	  	 	57	  	
	  	20.2.	  	Notification of Loss and Damage	  	 	57	  	
	  	20.3.	  	Event of Loss – Aircraft	  	 	57	  	
	  	20.4.	  	Event of Loss – Engine or APU	  	 	58	  	
	  	20.5.	  	Event of Loss – Landing Gear	  	 	59	  	
	  	20.6.	  	Repairable Damage	  	 	59	  	
	  	20.7.	  	Documents Loss	  	 	60	  	
	  	20.8.	  	Application of Payments from Governmental Authorities	  	 	61	  	
	  	20.9.	  	No Lessor Liability to Repair or Replace Following Delivery	  	 	61	  	
21.	  	TAXES; TAX INDEMNITY	  	 	62	  	
	  	21.1.	  	Indemnity	  	 	62	  	
	  	21.2.	  	VAT	  	 	65	  	
	  	21.3.	  	Lessor Tax Certificates	  	 	65	  	
	  	21.4.	  	Withholding Tax Exemption Certificates	  	 	66	  	
	  	21.5.	  	Tax Filings; Information	  	 	66	  	
	  	21.6.	  	Payment of Taxes and Indemnities	  	 	67	  	
	  	21.7.	  	Contest	  	 	67	  	
	  	21.8.	  	Survival	  	 	70	  	
	  	21.9.	  	Change in Circumstances; Mitigation	  	 	70	  	
22.	  	RETURN OF AIRCRAFT	  	 	71	  	
	  	22.1.	  	Time and Place	  	 	71	  	
	  	22.2.	  	Condition	  	 	71	  	
 
- v -

									
	  	22.3.	  	Lessee’s Continuing Obligations	  	 	71	  	
	  	22.4.	  	Legal Status Upon Return	  	 	72	  	
	  	22.5.	  	Airport and Navigation Charges	  	 	72	  	
23.	  	EVENTS OF DEFAULT	  	 	73	  	
24.	  	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	  	 	75	  	
	  	24.1.	  	Lessor’s Rights Following an Event of Default	  	 	75	  	
	  	24.2.	  	De-Registration	  	 	77	  	
	  	24.3.	  	Present Value of Payments	  	 	77	  	
	  	24.4.	  	Remedies Cumulative	  	 	77	  	
	  	24.5.	  	Lessor’s Exercise of Remedies	  	 	77	  	
	  	24.6.	  	Application of Payments Following Default or Event of Default	  	 	78	  	
	  	24.7.	  	Use of Termination Date	  	 	78	  	
	  	24.8.	  	No Right to Maintain Possession	  	 	78	  	
25.	  	ASSIGNMENT AND TRANSFER	  	 	79	  	
	  	25.1.	  	No Assignment by Lessee	  	 	79	  	
	  	25.2.	  	Transfer of Lessor’s and/or Owner’s Interests	  	 	79	  	
	  	25.3.	  	Cooperation with Transfers	  	 	79	  	
	  	25.4.	  	Financings	  	 	80	  	
	  	25.5.	  	Cooperation with Financings	  	 	81	  	
	  	25.6.	  	Notice of Security Assignment	  	 	81	  	
	  	25.7.	  	Transfer of Beneficial Interest	  	 	82	  	
26.	  	LAW AND JURISDICTION	  	 	83	  	
	  	26.1.	  	Governing Law	  	 	83	  	
	  	26.2.	  	Consent to Jurisdiction	  	 	83	  	
	  	26.3.	  	Process Agent and Service of Process	  	 	83	  	
	  	26.4.	  	Jurisdiction and Forum	  	 	83	  	
	  	26.5.	  	Waiver of Jury Trial	  	 	84	  	
	  	26.6.	  	Waiver of Immunity	  	 	84	  	
27.	  	MISCELLANEOUS	  	 	85	  	
	  	27.1.	  	Severability and Illegality	  	 	85	  	
	  	27.2.	  	Amendments	  	 	86	  	
	  	27.3.	  	Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer	  	 	86	  	
	  	27.4.	  	Counterparts	  	 	87	  	
	  	27.5.	  	Delivery of Documents by Electronic Means	  	 	87	  	
	  	27.6.	  	Survival	  	 	87	  	
	  	27.7.	  	Entire Lease	  	 	87	  	
	  	27.8.	  	Successors and Assigns	  	 	87	  	
	  	27.9.	  	Brokers	  	 	88	  	
	  	27.10.	  	Transaction Costs	  	 	88	  	
	  	27.11.	  	Time is of the Essence	  	 	88	  	
	  	27.12.	  	Language	  	 	88	  	
	  	27.13.	  	No Rights of Third Parties	  	 	88	  	
	  	27.14.	  	Delegation	  	 	88	  	
	  	27.15.	  	Further Assurances	  	 	89	  	
	  	27.16.	  	Rights at Law	  	 	89	  	
	  	27.17.	  	Confidentiality	  	 	89	  	
	  	27.18.	  	Notices	  	 	90	  	
			
Appendices	  		  				
1	  	Definitions	  				
2	  	CommercialTerms	  				
 
- vi -

 	A.	Lease Term	
 	B.	Rent, Security Deposit, Insurance and other Financial Matters	
 	C.	Maintenance Reserves	
 	D.	Delivery Conditions	
 	E.	Return Conditions	
3	Acceptance Certificate	
4	Lease Supplement	
5	[Reserved]	
6	Conditions Precedent / Post-Delivery Items	
 	A.	Lessor’s Conditions Precedent/Post-Delivery Items	
 	B.	Lessee’s Conditions Precedent/Post-Delivery Items	
7	Return Acceptance Certificate	
8	Forms	
 
- vii -

THIS AIRCRAFT LEASE AGREEMENT is made as of 17 November 2010 by and between:
 
1.	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED , not in its individual capacity but solely as trustee, First Floor, 7 Exchange Place, International Financial Services Centre, Dublin 1, Ireland (“ Lessor ”); and	
 
2.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS) , a company organised and existing under the applicable laws of the United Mexican States and having its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F., México (“ Lessee ”).	
WHEREAS:
Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee the Aircraft on the terms and subject to the conditions of this Lease.
NOW THEREFORE IT IS AGREED as follows:
 
1.	DEFINITIONS AND INTERPRETATION	
1.1.    Unless the context otherwise requires, all capitalised terms used in this Lease shall have the meanings given such terms in Appendix 1 or as may otherwise be defined in this Lease.
1.2.    References to Articles, Sections and Appendices are to be construed as references to the articles, sections and appendices of and to this Lease and references to this Lease include the Appendices.
1.3.    Words importing the plural shall include the singular and vice versa.
1.4.    References to “Lessee”, “Lessor”, “Owner”, “Owner Participant”, “Financing Party”, “Security Trustee”, “Liquidity Provider”, “Servicer”, “Manager”, “Guarantor”, or any other Person shall include the successors, assigns and transferees of such Person.
1.5.    The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
1.6.    References to (or to any specified provision of) this Lease or any Operative Document shall mean this Lease or such Operative Documents as in force for the time being and as amended, novated, substituted or supplemented from time to time in accordance with this Lease or such Operative Document.
1.7.    References to “hereby”, “herein”, “hereof”, “hereunder”, and other like words shall refer to this Lease including, without limitation, as supplemented by the Lease Supplement.
1.8    Whenever it is stated in this Lease that the consent or other action of Lessee or Lessor is not to be “unreasonably withheld” it shall be deemed to mean that such consent or action shall not be “unreasonably withheld or delayed”.

	 		 		
	 		 	ARTICLE 1	
	 		 	DEFINITIONS	

1.9.    Whenever this Lease or any Operative Document refers to an obligation of Owner owing to Lessee, or of Lessor that requires the cooperation or conduct of Owner, unless such obligation is taken directly by Owner in favour of Lessee, this obligation shall be deemed to mean that Lessor shall cause Owner to act accordingly.

	 	2	 		
Volaris	 		 	ARTICLE 1	
Airbus A319-132; MSN 3252	 		 	DEFINITIONS	

2.	LEASE TERM; NATURE OF LEASE	
2.1.     Lease Term.
(a)    Lessor shall lease the Aircraft to Lessee for the period stated in Appendix 2A.
(b)    The Lease Term shall commence at Delivery and shall end on the Termination Date.
2.2.     Nature of Lease. At all times during the Lease Term, full legal title to the Aircraft and each Item of Equipment shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. This Lease and the Lease Supplement, together, transfer to Lessee with respect to the Aircraft a leasehold interest only and Owner is the owner and Lessor is the lessor of the Aircraft, and Lessee is the lessee of the Aircraft, for all purposes, including for purposes of the application of all relevant Laws and all relevant financial accounting principles.

	 	3	 		
	 		 	ARTICLE 2	
	 		 	LEASE TERM; NATURE OF LEASE	

3.	RENT	
3.1.     Agreement to Pay Rent. As rental for the Aircraft, Lessee shall pay Basic Rent to Lessor as set forth in Appendix 2B, as applicable.
3.2.     Basic Rent. The amount of Basic Rent due and payable by Lessee is set forth in Sections 1.1 and 1.2 of Appendix 2B.
3.3.     Supplemental Rent. Lessee shall pay to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental Rent within ten (10) days after demand or such other relevant period as may be provided herein.
3.4.     Obligation to Perform Unconditional. This Lease is a net lease and Lessee’s obligation to pay Rent and Supplemental Rent, calculated in accordance with this Lease, and to perform its other Obligations shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation:
(a)    any withholding, set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including, without limitation, any breach by Lessor of its warranties, agreements or covenants contained herein or in any of the other Operative Documents;
(b)    any defect in the title, registration, airworthiness, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee or any other Person for any reason whatsoever;
(c)    any Liens with respect to the Aircraft;
(d)    an Event of Loss with respect to the Aircraft or any Item of Equipment (subject to the terms of Section 20.3);
(e)    the invalidity or unenforceability or lack of due authorisation or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease;
(f)    any insolvency, bankruptcy, examinership, reorganisation, administration, liquidation or similar proceedings affecting the enforcement of creditor’s rights generally by or against Lessor, Owner Participant, or Lessee;
(g)    any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing; or
(h)    any imposition of Taxes.
Nothing in this Section 3.4 shall be construed so as to prevent Lessee from pursuing any Claim it may have against Lessor, Owner Participant or any other Person in such court of law or otherwise as Lessee may deem appropriate.

	 	4	 		
	 		 	ARTICLE 3	
	 		 	RENT	

4.	SECURITY DEPOSIT	
4.1.     Security Deposit Amount. Lessee shall pay the Security Deposit in cash into the bank account identified in and in accordance with the provisions of Appendix 2B.
4.2.     Nature of Security Deposit. Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.5 below, the Security Deposit shall be non-refundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor, may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of the Obligations and Lessee hereby assigns and charges in favour of Lessor, and hereby grants to Lessor a first priority security interest in, the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than created under this Lease, in or otherwise dispose of the Security Deposit. Lessee shall, from time to time, execute and file with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor with respect to the Security Deposit, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
4.3.     Application of Security Deposit. If an Event of Default has occurred and is continuing hereunder, in addition to all other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee or any Affiliate of Lessee, as applicable, under any Operative Document or Related Lease and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.
4.4.     Effect of Application of Security Deposit. If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other Person, of any Event of Default and Lessee shall, within three (3) Business Days after Lessor’s written demand, pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no other Default or Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.
4.5.     Repayment of Security Deposit. Provided no Default or Event of Default has occurred and is continuing, the Security Deposit, less the amount, if any, of any reasonable costs incurred by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or any Affiliate of Lessee, as applicable, is responsible hereunder or under any Related Lease in connection with the termination or cancellation of this Lease or a Related Lease or return of the Aircraft or an aircraft under any Related Lease, shall be paid over to Lessee promptly, and in any event within five (5) Business Days, after the Termination Date and the satisfaction by Lessee, in full,

	 	5	 		
	 		 	ARTICLE 4	
	 		 	SECURITY DEPOSIT	

of its Obligations and the Related Obligations, the payment or performance of which is then due (including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and to correct discrepancies identified in the Return Acceptance Certificate, but excluding those other Obligations or Related Obligations expressly provided herein to survive the Termination Date or the equivalent date in any Related Lease and which are not due for performance on or as of such date).
4.6.     Security Letter of Credit. In lieu of paying or maintaining the Security Deposit in cash, Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Cash Security Deposit.
(a)    If Lessee elects to provide a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than ten (10) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the Cash Security Deposit. The Security Letter of Credit shall remain in full force and effect during the Lease Term and for not less than ninety (90) days following the Scheduled Termination Date, shall permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit, and shall be freely assignable and transferable by Lessor without restriction or condition. Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee the equivalent amount of the Cash Security Deposit.
(b)    Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:
(i)    upon the occurrence of an Event of Default; and/or
(ii)    if Lessee has not delivered a replacement Security Letter of Credit to Lessor in accordance with the provisions of this Section 4.6 or deposited with Lessor cash in the amount of the Security Deposit by the required time set forth therein; and/or
(iii)    not sooner than five (5) Business Days prior to the expiration date of the Security Letter of Credit if (x) such expiration date is prior to the date required under Section 4.6(a), and ( y ) Lessee has not delivered a replacement letter of credit in substitution for the expiring Security Letter of Credit by such date or deposited with Lessor by such date the Security Deposit in cash;
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit to the same extent as provided in Sections 4.3 and 4.5, as if Lessee had paid the Security Deposit in cash.
(c)    If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall within three (3) Business Days after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement letter of credit to be issued in the total amount of the Security Deposit or pay the amount of such shortfall in the Security Deposit amount in cash.
(d)    If (i) any bankruptcy, insolvency, examinership, administration, reorganisation, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the issuer of the Security Letter of Credit (or any Person guaranteeing, confirming or assuming any

	 	6	 		
	 		 	ARTICLE 4	
	 		 	SECURITY DEPOSIT	

obligation as principal in respect thereof), (ii) the rating of obligations of the issuer of any Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by Moody’s Investors Services or Standard & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or (iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall within three (3) Business Days of receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Section 4.6 or deposit with Lessor cash in the amount of the Security Deposit.
(e)    Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.

	 	7	 		
	 		 	ARTICLE 4	
	 		 	SECURITY DEPOSIT	

5.	PAYMENTS	
5.1.     Account. All payments of Rent, Security Deposit and in respect of Maintenance Reserves shall be made by Lessee to the bank account identified in Appendix 2B or to such other account designated in writing by Security Trustee not less than two (2) Business Days prior to the due date of any relevant payment. Lessee shall, together with such payment, identify the institution from which such payment is being sent and refer to the make, model and Manufacturer’s serial number of the Aircraft, provided that the failure to do so shall not constitute a Default hereunder.
5.2.     Payments on Non-Business Days. When any payment under any Operative Document would otherwise be due to Lessor on a day that is not a Business Day, the due date for payment shall be the next succeeding Business Day.
5.3.     Timing of Payments. Payments due under this Lease shall be made by Lessee for credit to Lessor not later than 11:00 A.M. New York time on the due date.
5.4.     Late Payment. If Lessee fails to pay to Lessor any sum on its due date for payment under this Lease or any other Operative Document, including any payment of Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum from the due date up to the date of actual payment (including non-payment following the issuance of a judgment) at the Past Due Rate.
5.5.     Calculation of Interest and Prorating of other Payments.
(a)    All interest payable under this Lease or any other Operative Document shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
(b)    All payments of a monthly nature under this Lease and any other Operative Document, including, but not limited to payments of Fixed Rent and in respect of Maintenance Reserves, that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
5.6.     Payments in Dollars. All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. The specification of Dollars in this transaction is of the essence and Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transferred to Lessor under normal banking procedures does not yield the amount of Dollars owing to Lessor in respect of such payment. If Lessor receives an amount in respect of Lessee’s liability under this Lease or if such liability is converted into a claim, proof, judgment or order in a currency other than Dollars, Lessee will indemnify Lessor, on an After-Tax Basis, as an independent obligation against any loss arising out of or as a result of such receipt or conversion. If the amount received by Lessor, when converted into Dollars (at the market rate at which Lessor is able on the relevant date to purchase Dollars in New York with that other currency) is less than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor an amount in Dollars equal to the deficit. In addition, Lessee waives any right it may have in any jurisdiction to pay any amount due or to become due hereunder in a currency other than Dollars.

	 	8	 		
	 		 	ARTICLE 5	
	 		 	PAYMENTS	

5.7.     Retention of Certain Payments. Any amount referred to in any Operative Document which is payable to or retainable by Lessee shall not be paid to or retained by Lessee at any time when a Default or Event of Default shall have occurred and be continuing, but instead such amount shall be paid to or held by Lessor as additional security for Lessee’s Obligations to be held and applied in accordance with the provisions of this Lease. At such time as there shall not be continuing any Default or Event of Default, such amount shall be paid to Lessee to the extent not applied in accordance with the preceding sentence. Where Lessor would, but for this Section 5.7 or any similar provision, be obliged to make any payment to Lessee, Lessor may elect to make such payment but shall be entitled to deduct or withhold from such payment any amount then due and payable but unpaid by Lessee under or in respect of Lessee’s Obligations.
5.8.     Application of Payments. Lessor may apply any payment received from Lessee under any Operative Document which is less than the full amount then due and owing to Lessor in respect of Lessee’s Obligations in such proportions, order and manner as Lessor may, in its reasonable discretion, determine (except where an Event of Default is continuing, in which event such determination may be made in Lessor’s absolute discretion), notwithstanding any designation or instruction for application that may have been made by Lessee.

	 	9	 		
	 		 	ARTICLE 5	
	 		 	PAYMENTS	

6.	AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION	
6.1.     Aircraft Delivery Condition. The Aircraft shall be delivered to Lessee by Lessor on the Delivery Date in the condition set forth in Appendix 2D.
6.2.     Lessee’s Inspection of Aircraft; No Lessor Liability.
(a)    Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it meets the requirements of this Lease and specifically disclaims any reliance upon any representation or assurance by Lessor, Owner Participant, Servicer or any Affiliate of the foregoing or any representative or agent thereof in making such determination. Lessee further acknowledges that any assumption that Lessor will cure any nonconformity of the Aircraft and/or any Item of Equipment, discovered, difficult of discovery, or undiscovered, is not reasonable unless both ( x ) the nonconformity or possibility of nonconformity and ( y ) Lessor’s agreement to cure or cause the cure of such nonconformity are expressed in a written instrument signed by Lessor and Lessee delivered at or before the execution and delivery of the Acceptance Certificate and Lease Supplement, except as otherwise set forth herein. Except for any express commitment by Lessor to cure or cause the cure of any nonconformity evidenced by a written instrument of the type described in ( y ) above, including without limitation a list of discrepancies set forth as an attachment to the Acceptance Certificate, no Indemnitee will be liable for any failure of the Aircraft to conform with the requirements of this Lease at the time of acceptance of the Aircraft by Lessee.
(b)     Compliance. All representatives designated by Lessee to perform the pre-Delivery inspections of the Aircraft contemplated under this Section 6.2 shall comply with such occupational health and safety and security requirements as the same are advised by Servicer, or any duly appointed party acting by or through Servicer, in writing, and shall not unreasonably interfere with Lessor’s and/or Servicer’s performance of their respective obligations in connection with the return inspections conducted pursuant to the Prior Lease.

	 	10	 		
	 		 	ARTICLE 6	
	 		 	AIRCRAFT DELIVERY CONDITION;	
	 		 	LESSEE’S INSPECTION	

7.	CONDITIONS PRECEDENT TO DELIVERY	
7.1.     Conditions Precedent.
 
 	(a)	Lessor’s obligation to deliver and lease the Aircraft to Lessee is subject to:	
 
 	(i)	the Aircraft being in compliance with the condition required for Delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft;	
 
 	(iii)	no Default or Event of Default having occurred and be continuing;	
 
 	(iv)	there having been no material adverse change to the financial condition of Lessee from the date of execution of this Lease to the Delivery Date which would adversely affect Lessee’s ability to perform its Obligations;	
 
 	(v)	the receipt by Lessor of each item identified in Appendix 6A by the date required for such item appearing therein; and	
 
 	(vi)	Prior Operator having returned the Aircraft under the Prior Lease substantially in the condition required for return thereunder.	
 
 	(b)	Lessee’s obligation to take delivery and lease the Aircraft from Lessor is subject to:	
 
 	(i)	the Aircraft being in compliance with the condition required for Delivery under this Lease;	
 
 	(ii)	no Event of Loss having occurred with respect to the Aircraft; and	
 
 	(iii)	the receipt by Lessee of each item identified in Appendix 6B by the date required for such item appearing therein.	
7.2.     Waiver or Deferral of Conditions Precedent. If any condition precedent specified in Section 7.1(a)(v) is not satisfied before Delivery, Lessor may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessor may determine and notify to Lessee in writing. If any condition precedent specified in Section 7.1(b)(iii) is not satisfied before Delivery, Lessee may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessee may determine and notify to Lessor in writing.

	 	11	 		
	 		 	ARTICLE 7	
	 		 	CONDITIONS PRECEDENT TO DELIVERY	

8.	DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	
8.1.     Delivery Location and Timing. Lessor shall deliver the Aircraft in the condition required by this Lease to Lessee and Lessee shall accept the Aircraft when properly tendered under this Lease on the Delivery Date at the Delivery Location, whereupon the Lease Term shall commence.
8.2.     Delivery Subject to Return from Prior Operator. Delivery of the Aircraft is subject to and expressly conditioned upon return of the Aircraft by Prior Operator pursuant to the Prior Lease. Lessor shall not be liable or responsible to Lessee for and Lessee hereby expressly waives any right to any Claims arising or the exercise of any remedies from or in connection with any delay by Prior Operator in the return of, or failure to return, the Aircraft under the Prior Lease, and Lessee shall not be released from its Obligation to take delivery of the Aircraft under this Lease as a result of any such delay; provided that the foregoing release and waiver by Lessee shall not apply with respect to any Claims solely and directly attributable to Lessor’s willful misconduct.
8.3.     [Reserved].
8.4.     [Reserved].
8.5.     Event of Loss to Aircraft Prior to Delivery. If an Event of Loss with respect to the Aircraft occurs prior to Delivery, Lessor will notify Lessee promptly following Lessor’s knowledge of the same, and this Lease shall automatically terminate whereupon neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.6.     Lessee Acceptance of Aircraft. If Lessee fails to ( x ) comply with the conditions contained in this Lease so as to allow Delivery to take place or ( y ) take delivery of the Aircraft when properly tendered for delivery by Lessor in the condition required under this Lease, Lessee will be liable for and shall indemnify Lessor for all documented, out-of-pocket costs and expenses reasonably incurred by Lessor as a result thereof including any payments which Lessor becomes obliged to make, or has made, for or on account of Lessee’s delivery requirements in order to prepare the Aircraft for Delivery, but excluding payments which Lessor would otherwise have been required to make notwithstanding such failure of Lessee to take delivery.
8.7.     Risk of Loss to Aircraft following Delivery. Upon Delivery, risk of loss or damage to the Aircraft shall pass to Lessee for the Lease Term (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
8.8.     Waiver of Remedies for Delay in Delivery. Lessor shall not be liable to Lessee for any delay or failure in Delivery to Lessee which is an Excusable Delay. Pursuant to Section 10.3, Lessee’s only rights or remedies for a delay in delivery, or anticipated delay in delivery, of the Aircraft not caused or occasioned by a Default of Event of Default of Lessee are those rights and remedies provided for in Section 10.3.

	 	12	 		
	 		 	ARTICLE 8	
	 		 	DELIVERY	

9.	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	
9.1.     Lessee’s Representations and Warranties. Lessee represents and warrants to Lessor that:
(a)    Lessee is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted.
(b)    Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto such Operative Documents will constitute the valid and legally binding and enforceable obligations of Lessee (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization and other laws affecting the rights of creditors generally).
(c)    The execution and delivery of, the performance of its Obligations under, and compliance by Lessee with the provisions of, the Operative Documents will not (i) contravene any existing applicable Law of its State of Organisation or the State of Registration (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessee is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of its constitutional and/or organisational documents, or (iv) result in the creation or imposition of, or oblige it to create, any Lien over its undertaking or any of its material assets, rights or revenues.
(d)    Lessee is not in default under any material agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceeding is taking place or, to its knowledge, after reasonable inquiry, pending or threatened against Lessee which would have or could reasonably be expected to have a material adverse effect on its ability to perform its Obligations.
(e)    The audited annual financial statements of Lessee for each financial year are certified by independent auditors and, as most recently delivered to Lessor, have been prepared in accordance with GAAP and fairly present the financial position of Lessee as at such date and the results of the operations of Lessee for the financial year ended on the date set forth therein and there has, to the knowledge of Lessee, after reasonable inquiry, been no material adverse change in the financial condition of Lessee since publication of such financial statements, except as otherwise previously disclosed to Lessor in writing.
(f)    Other than making a filing in respect of this Lease in the State of Registration with the Aeronautics Authority and with the IR and the filing and registration in respect of the pledge under Mexican Law with the appropriate Governmental Authorities pursuant to Sections 4.2 and 13.3(a)(i), it is not necessary, in order to ensure the legality, validity, enforceability or admissibility in evidence of any Operative Document, that such Operative Document or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid in relation to any of the Operative Documents.

	 	13	 		
	 		 	ARTICLE 9	
	 		 	LESSEE’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS	

(g)    Lessee has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which it is a party, the validity and enforceability hereof and thereof and the compliance, satisfaction or performance by Lessee with or of all monetary and other Obligations hereunder and thereunder and all such authorisations are, or prior to the Delivery Date will be, valid and in full force and effect.
(h)    The choice by Lessee of New York Law to govern the Operative Documents and the submission by Lessee to the jurisdiction of the New York courts is valid and binding on Lessee.
(i)    In any proceedings taken in any jurisdiction in relation to any of the Operative Documents, Lessee will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(j)    Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing or navigation fees or charges in respect of the Aircraft or any other aircraft owned by or leased to or operated by it, which if unpaid are reasonably likely to result in the imposition of a Lien on the Aircraft.
(k)    Lessee has fully disclosed to Lessor all facts of which it has knowledge which in Lessee’s reasonable belief are material for disclosure to Lessor in the context of this Lease, Lessee knows of no material facts that would render any information previously furnished by or on behalf of Lessee to Lessor inaccurate or misleading in any material respect.
(l)    No Default or Event of Default has occurred and is continuing.
(m)    Lessee is solvent and able to pay its debts as the same fall due and the transactions contemplated by the Operative Documents are of commercial benefit to it and in its commercial interests.
(n)    With respect to Taxes:
(i)    Lessee has duly filed all Tax returns that it is required by applicable Laws to file, has duly paid all Taxes stated to be due and payable in such Tax returns and has duly paid all Taxes stated to be due in any demand for payment or similar communication issued by any taxing authority to Lessee other than:
(A)    Taxes (1) which are being contested in good faith by appropriate proceedings in accordance with applicable Law, (2) for which adequate reserves are maintained in accordance with GAAP, and (3) the contest of which does not involve any risk of imposition of any criminal penalty on any Indemnitee or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;

	 	14	 		
	 		 	ARTICLE 9	
	 		 	LESSEE’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS	

(B)    Tax returns, the non-filing of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein; and
(C)    Taxes, the non-payment of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition of any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(ii)    no Tax imposed by any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration is (or, subject to any change in law after the Delivery Date, will be) (A) required to be paid by Lessor or Owner Participant as a result of the execution, delivery, performance or enforcement of, or the transactions and activities provided for or contemplated in, the Operative Documents, or (B) required to be deducted or withheld from or with respect to any amount payable by Lessee to Lessor under any Operative Document; and
(iii)    neither of Lessor nor Owner Participant is (and, subject to any change in law after the Delivery Date, will be) required to give any notice to, make any registration with, or file any document or information with, any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration with respect to Taxes solely by reason of the execution, delivery, performance or enforcement of the Operative Documents.
9.2.     Application of Representations and Warranties; Survival. Each representation and warranty set out in Section 9.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft.
9.3.     Lessee’s General Covenants. Lessee covenants to Lessor that it will:
(a)    preserve and maintain (i) its corporate existence and (ii) all of its material rights, privileges and franchises in every jurisdiction in which the character of the property owned or the nature of the business transacted by it makes licensing or qualification necessary;
(b)    pay or cause to be paid (i) all Taxes required by applicable Laws to be paid by it (whether such Taxes are imposed upon it or upon its income and profits or upon any property belonging to it or otherwise) prior to the date on which any penalty accrues, except Taxes

	 	15	 		
	 		 	ARTICLE 9	
	 		 	LESSEE’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS	

described in sub-clause (A), (B) or (C) of Section 9.1(n)(i), and (ii) all other lawful claims which, if not paid, are reasonably likely to result in the imposition of a Lien upon its property or upon the Aircraft or any part thereof;
(c)    remain duly qualified to operate the Aircraft under applicable Law;
(d)    maintain in full force and effect all governmental consents, licenses, authorisations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to timely obtain or effect any new or additional governmental consents, licenses, authorisations, approvals, declarations, filings or registrations as may become necessary for Lessee’s performance of its Obligations;
(e)    not consolidate with, merge with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person, provided that Lessee may do so if Lessee establishes to the reasonable satisfaction of Lessor that such merger, conveyance, transfer or lease will not have a materially adverse effect on Lessee’s ability to perform its Obligations and that the surviving entity will assume all Obligations, unless (i) in the case of a merger or consolidation, the surviving entity of such merger or consolidation is Lessee or an entity which (x)  is a certificated air carrier or parent thereof and (y)  after giving effect to such merger or consolidation has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation and which has agreed in writing satisfactory to Lessor, to assume and perform all Obligations of Lessee hereunder, and such merger or consolidation will not have a materially adverse effect on the ability of the surviving entity to perform such Obligations; or, (ii) in the case of a transfer or lease, such transfer or lease will not have a materially adverse effect on Lessee or its ability to perform its Obligations hereunder;
(f)    notify Lessor of any change to Lessee’s registered office, principal place of business or chief executive office if there is more than one place of business not more than thirty (30) days following such change;
(g)    not (i) voluntarily suspend its certificated operations of the Aircraft or its fleet other than by reason of a merger or consolidation not otherwise prohibited by sub-clause (e) above; or (ii) permit to be revoked, canceled or otherwise terminated, whether by act or omission, all or substantially all of the material franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof, where such revocation, suspension or termination will have or could be deemed to have a material adverse effect on Lessee’s ability to perform its Obligations;
(h)    pay promptly when due all navigation and en-route charges and all other charges payable by Lessee for the use of or services provided at any airport, whether in respect of the Aircraft or any other aircraft in Lessee’s fleet where the failure to pay the same could reasonably be expected to (i) result in a Lien upon the Aircraft, except to the extent being contested in accordance with applicable law and in respect of which contest Lessee has taken adequate reserves in accordance with GAAP, provided such contest would not give rise to any material likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of Lessor or any Financing Party, and/or (ii) materially and adversely effect Lessee’s ability to perform its Obligations hereunder;

	 	16	 		
	 		 	ARTICLE 9	
	 		 	LESSEE’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS	

(i)    not represent or hold out Owner, Lessor (if not Owner), Owner Participant, any Financing Party or any Affiliate of the foregoing as carrying goods or passengers on the Aircraft or being in any way connected to operation of the Aircraft; and
(j)    if any items delivered to Lessor in connection with this Lease are required by this Lease to have a validity and effectiveness for the Lease Term, but have or are of a duration or effectiveness that is for less than the Lease Term when originally delivered, Lessee shall cause replacements, extensions or supplements thereof to be timely delivered to Lessor during the Lease Term to ensure that Lessor maintains at all times during the Lease Term the benefits initially afforded by such items and the continued effectiveness and validity of the same for the Lease Term.

	 	17	 		
	 		 	ARTICLE 9	
	 		 	LESSEE’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS	

10.	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	
10.1.     General Representations and Warranties of Lessor. Lessor represents and warrants to Lessee that:
(a)    Lessor is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted;
(b)    Lessor has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto the Operative Documents to which it is a party will constitute its valid and legally binding and enforceable obligations;
(c)    the execution and delivery of, the performance of its obligations under, and compliance by Lessor with the provisions of, the Operative Documents to which it is a party will not (i) contravene any existing applicable Law of its State of Organisation (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessor is a party or is subject or by which it or any of its property is bound, or (iii) contravene or conflict with any provision of its constitutional and/or organisational documents;
(d)    Lessor has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which Lessor is a party and the validity and enforceability hereof and thereof;
(e)    each representation set forth in this Section 10.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft;
(f)    on and as of Delivery, Lessor shall have the right to lease the Aircraft to Lessee and there is no actual, or to Lessor’s knowledge, after reasonable inquiry, pending or threatened litigation to prevent or prohibit Lessor from entering into and performing its obligations under the Operative Documents to which it is a party or otherwise affecting the Aircraft or Lessor’s rights, title and interest in and to the Lease; and
(g)    Lessor is solvent and able to pay its debts as the same fall due.
10.2.     Covenant of Quiet Enjoyment.
(a)    Notwithstanding the effect of any provision in the Cape Town Convention to the contrary, which by the terms of the Cape Town Convention may be derogated from or varied, Lessor covenants that so long as an Event of Default shall not have occurred and be continuing,

	 	18	 		
	 		 	ARTICLE 10	
	 		 	LESSOR’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS; DISCLAIMERS	

Lessee shall quietly enjoy the Aircraft without interference by Lessor or by any Person lawfully claiming by or through Lessor. The lawful exercise by Lessor of its rights under any Operative Document in conformity with the terms and conditions of such Operative Document shall not constitute a breach of this Section 10.2.
(b)    Prior to Delivery, Lessor shall cause each of Owner Participant and Security Trustee to provide Lessee with a Quiet Enjoyment Letter substantially in the forms set out in Appendix 8.
10.3.     Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies.
(a)    LESSEE AGREES THAT, AS BETWEEN ITSELF AND THE INDEMNITEES, IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS, WHERE-IS”. LESSEE ACKNOWLEDGES AND AGREES THAT NO INDEMNITEE HAS MADE, OR SHALL BE DEEMED TO HAVE MADE, (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, FOR ITSELF AND FOR EACH INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE OR CAPABLE OF DISCOVERY, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, FOR (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ITEM OF EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii) THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR) OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT ARE EXCLUSIVE AND IN LIEU

	 	19	 		
	 		 	ARTICLE 10	
	 		 	LESSOR’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS; DISCLAIMERS	

OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT.
(b)    LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY EACH MANUFACTURER. LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT (i) NO INDEMNITEE IS A SELLER, MANUFACTURER, REPAIRER OR PERSON MANAGING, DIRECTING OR PERFORMING SUCH SERVICES OF THE AIRCRAFT AND (ii) THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.
(c)    IN CONSIDERATION OF (i) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY AND ALL ASSIGNABLE WARRANTIES OF ALL MANUFACTURERS, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE UNDER APPLICABLE LAW. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
(d)    DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.
(e)    LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION,

	 	20	 		
	 		 	ARTICLE 10	
	 		 	LESSOR’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS; DISCLAIMERS	

( X ) ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND ( Y ) ON ACCOUNT OF ANY REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE COVENANT OR PROMISE RUNS. LESSEE AGREES THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS, AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT AND LESSEE HEREBY WAIVES ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER ARTICLE 2A (UNIFORM COMMERCIAL CODE—LEASES) OF THE NEW YORK UNIFORM COMMERCIAL CODE OR OTHERWISE IN RESPECT OF SUCH BREACH.
10.4.     DISCLAIMER AND WAIVER OF INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES. EACH OF LESSEE AND LESSOR (EXCEPT IN RESPECT OF LESSOR AS OTHERWISE SET FORTH HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT) AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES, AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR IN THE CASE OF LESSOR, EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 24, ANTICIPATED PROFITS AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF SUCH OTHER PARTY CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS.
10.5.     NO DUTY OF INDEMNITEES TO INSPECT, ETC. NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE ORGANISATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT PERFORMED DURING THE LEASE TERM.

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	 		 	ARTICLE 10
LESSOR’S REPRESENTATIONS,	
	 		 	WARRANTIES AND COVENANTS; DISCLAIMERS	

11.	GENERAL OPERATION OF THE AIRCRAFT	
11.1.     General Operation. Lessee will:
(a)    comply with the Law in any country or jurisdiction which may for the time being be applicable to the Aircraft and its use, maintenance and operation, including but not limited to the holding of all certificates, licenses, permits, authorisations and regulations, and take all reasonable steps to ensure that the Aircraft is not used for any illegal purpose;
(b)    not use any Item of Equipment in any manner contrary to:
(i)    any Manufacturer’s operating manuals or published instructions, or in violation of any airworthiness certificate or registration relating thereto; or
(ii)    any published recommendation of the Manufacturer of such Item of Equipment or regulation of the Aeronautics Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c)    ensure that all personnel directly or indirectly employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aeronautics Authority and applicable Law;
(d)    use the Aircraft solely in commercial passenger and cargo (provided such cargo is carried exclusively in the cargo compartments of the Aircraft) operations for which Lessee is duly authorised by the Aeronautics Authority and under applicable Law and, without prejudice to Lessee’s rights under Section 15.2 hereof, principally from one or more bases located within the State of Registration or Lessee’s State of Organisation (or such other location as Lessor may approve in writing from time to time, such approval not to be unreasonably withheld);
(e)    not utilise the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other similar model aircraft within Lessee’s fleet of aircraft; and
(f)    obtain and maintain in full force and effect all certificates, licenses, permits and authorisations required for the making of payments required by this Lease and the compliance by Lessee with its other Obligations.
11.2.     Insured Operations. Lessee will not use or locate or permit the Aircraft or any Item of Equipment to be used or located in any manner, for any purpose or at any location which is not covered by the insurance policies and the scope of coverage Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit the coverage provided under any such insurance policy or coverage provided thereunder.

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	 		 	GENERAL OPERATION OF THE AIRCRAFT	

11.3.     Carriage of Goods. Lessee shall not use the Aircraft for the carriage of:
(a)    whole animals living or dead except in compliance with I.A.T.A. regulations;
(b)    cargo to the extent forbidden pursuant to Section 2 (Limitations) of the I.A.T.A. Dangerous Goods Regulations, as revised, from time to time;
(c)    nuclear fuels or waste, illegal drugs, controlled substances or the like or any other goods, materials or items of cargo which are prohibited by Law; or
(d)    any other cargo which, whether due to size, content or packaging, (i) could reasonably be expected to cause damage to the Aircraft or (ii) the carriage of which might cause damage that would not be adequately covered by insurance.
11.4.     Operational Expenses. Lessee shall pay or procure payment of all expenses incurred in the operation of the Aircraft during the Lease Term including, without limitation, expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, landing and navigation fees, airport charges, passenger service and any and all other expenses or claims of any kind or nature incurred during the Lease Term, arising directly or indirectly in connection with or related to the use, movement, operation, storage or location of the Aircraft or any Item of Equipment. The obligations of Lessee under this Section 11.4 arising prior to any cancellation, termination or expiration of the Lease Term shall continue in full force and effect, notwithstanding such cancellation or termination (whether arising out of an Event of Default or otherwise) or expiration, and shall be enforceable by Lessor. Nothing herein shall be deemed to prevent Lessee from contesting any such expenses by appropriate proceedings, provided that no such contest shall give rise to any reasonable likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of any Indemnitee.
11.5.     Compliance with Laws. Lessee will:
(a)    not cause or permit the Aircraft to proceed to, or remain at, any location to the extent then prohibited by applicable Law by any Governmental Authority of the State of Registration or Lessee’s, Lessor’s or Owner’s State of Organisation or any Governmental Authority of the country in which such location is situated, except under exigent circumstances, when necessary to safeguard the Aircraft or the lives and well-being of passengers and crew, provided that the Aircraft is promptly removed from such location upon cessation of such exigent circumstances; and
(b)    not use or permit the use of the Aircraft or any Item of Equipment with, for or on behalf of any Person:
(i)    whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in effect during the Lease Term);
(ii)    in violation of the United States Bank Secrecy Act, as amended, or any applicable regulations thereunder;

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	 		 	GENERAL OPERATION OF THE AIRCRAFT	

(iii)    in violation of any of the sanctions programs administered by the Office of Foreign Assets Control of the United States Department of Treasury (“ OFAC ”), any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency, or any enabling legislation or executive order relating thereto ( ref : www.ustreas.gov/offices/enforcement/ofac/ );
(iv)    on the list of “Specially Designated Nationals” and “Blocked Persons” or prohibited under any OFAC regulation or executive order, as the same are amended from time to time;
(v)    in violation of a United Nations sanction or whose assets have been frozen by enabling legislation of the same in the State of Registration or Lessee’s State of Organisation; or
(vi)    in violation of any Laws similar to or consistent with the foregoing clauses (i) through (v) as the same are enacted in Lessee’s State of Organisation or the State of Registration;
as any or all of the same are amended or supplemented from time to time, and including any successor Laws as the same are enacted from time to time.
11.6.     Lessee’s Covenants Regarding Use of the Aircraft. Lessee covenants to Lessor that it will procure that ( x ) in each calendar year that begins and ends during the Lease Term and ( y ) in the case of the calendar year that includes the Delivery Date, during the part of such calendar year that begins on the Delivery Date and ( z ) in the case of the calendar year that includes the Termination Date, during the part of such calendar year that ends on the Termination Date:
(a)    either:
(i)    the Aircraft will be located outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii)    more than fifty percent (50%) of the miles traversed in the use of the Aircraft will be outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof),
provided that the Aircraft will be deemed to be in the U.S.A. at all times during which it is engaged in transport between the U.S.A. and Puerto Rico or between two points in the U.S.A. or between two points in Puerto Rico; and
(b)    either:
(i)    the Aircraft will be located outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty per cent (50%) of the time, or

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	 		 	GENERAL OPERATION OF THE AIRCRAFT	

(ii)    more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof); and
(c)    the Aircraft will not be used, pursuant to any sublease, wet lease, charter, or otherwise, by any Person that:
(i)    has a State of Organisation in or whose State of Organisation is (A) Canada or (B) Puerto Rico or the U.S.A., or
(ii)    is resident or principally based in (A) Canada or (B) Puerto Rico or the U.S.A., or
(iii)    has any right under any sublease, wet lease, charter or other agreement to use (or to permit or suffer any other Person to use) the Aircraft or any part thereof in a manner which is reasonably likely to result in a breach of any covenant of Lessee in this Section 11.6,
except that the Aircraft may be wet leased to a Person described in subclause (i)(B) or (ii)(B) provided that such Person will not have the right to use the Aircraft for more than a total of ninety (90) days in any calendar year, and Lessee provides Lessor written notice of such wet lease within ten (10) days after the date on which such wet lease is executed. For purposes of this Section 11.6(c), the term “wet lease” shall have the same meaning as the term Wet Lease except that it may include a “wet lease” of the Aircraft by a Permitted Sublessee (and in such case references to Lessee appearing in the definition of the term Wet Lease shall be deemed to refer to such Permitted Sublessee).
11.7.     Certain Tax Matters. If, after the Delivery Date, an amendment to Section 954 of the United States Internal Revenue Code of 1986, as amended (the “ U.S. Tax Code ”), is enacted or an amendment to the Treasury Regulations under Section 954 of the U.S. Tax Code is promulgated as a final regulation and if independent tax counsel engaged by Lessee and reasonably acceptable to Lessor delivers to Lessee and Lessor a written opinion to the effect that due to such amendment, Rent payable by Lessee pursuant to this Lease will be treated as “derived from leasing the Aircraft in foreign commerce” within the meaning of Section 954(c)(2)(A) of the U.S. Tax Code even if Lessee does not comply with its warranty and covenant in Section 11.6(a), then if requested by Lessee in writing and if no Event of Default shall have occurred and be continuing, Lessor will negotiate with Lessee in good faith with a view to amending Section 11.6 to reflect such amendment, provided that no such amendment shall give rise to a reasonable likelihood that any Indemnitee would incur any liability, loss, cost, expense or other adverse consequence that it would not have incurred in the absence of such amendment unless Lessee is required by this Lease or any other Operative Document to indemnify such Indemnitee therefor in a manner that is reasonably satisfactory to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee in connection with the negotiation, documentation, execution, delivery, filing or recording of any amendment requested by Lessee pursuant to this Section 11.7.

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	 		 	GENERAL OPERATION OF THE AIRCRAFT	

12.	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	
12.1.     General. Lessee, at its own expense, shall cause the Aircraft and each Item of Equipment to be serviced, repaired, overhauled, tested and maintained:
(a)    in accordance with the Maintenance Program and the applicable Manufacturer’s Repair Manuals including, without limitation, the Manufacturer’s recommended corrosion prevention and control program for the Aircraft;
(b)    so as to keep each such Item in as good operating condition and as necessary to maintain the value, utility and appearance of the Aircraft as when delivered to Lessee hereunder, reasonable wear and tear excepted;
(c)    in compliance with Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance during the Lease Term;
(d)    in compliance with all other Manufacturer’s service bulletins which require compliance in order to maintain the validity of warranties assigned or otherwise provided to Lessee; and
(e)    in compliance with all Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be accomplished in strict accordance with such AD. Notwithstanding the foregoing, compliance with any AD may be accomplished by the use of an alternate method of compliance, provided that such alternate method of compliance is approved by EASA and the Aeronautics Authority, without limitation.
12.2.     Accomplishment of Tasks and Repairs. Lessee shall cause, at its expense, all Tasks to be accomplished on the Aircraft as they become due, with no discrimination toward the Aircraft with respect to any maintenance accomplished on similar model aircraft within Lessee’s fleet of aircraft. To the extent that the Maintenance Program permits certain structural Tasks to be accomplished on a sampling basis, Lessee nevertheless shall accomplish on the Aircraft all such structural Tasks that, by the terms of such Tasks, are applicable to the Aircraft, provided, however, at Lessee’s option the accomplishment of such structural sampling Tasks may be deferred during the Lease Term, but in any event all such structural sampling Tasks that have been deferred shall be accomplished by Lessee not later than during the Final Check. Any damage, defects or corrosion discovered during the Lease Term shall be repaired in accordance with the applicable Manufacturer’s Repair Manual approved procedures at the sole expense of Lessee, and Lessee shall obtain Required Approval with respect to any repairs or modifications accomplished during the Lease Term which have not been approved by the Manufacturer and the Certificating Authority in addition to any approval received by Lessee from the Aeronautics Authority with respect to any such repairs or modifications.

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	 		 	MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

12.3.     Information on Maintenance. Lessee, at its cost and expense, shall furnish Lessor, at such times during the Lease Term as Lessor shall reasonably request, copies of records maintained relating to the Aircraft.
12.4.     Aircraft Documents in English Language. Lessee, at its cost and expense, shall maintain all Aircraft Documents produced during the Lease Term by or for the benefit of Lessee or any Permitted Sublessee or delivered to Lessee on the Delivery Date, in the English language, including such Aircraft Documents described above and required by the applicable Aeronautics Authority to be maintained in respect of each Item of Equipment, and promptly furnish to Lessor upon Lessor’s request such information as may be required to enable Lessor to file any reports required to be filed with any Governmental Authority because of Owner’s ownership of the Aircraft.
12.5.     Originals. All Aircraft Documents, including records and documentation of maintenance accomplished on the Aircraft and any Item of Equipment shall be retained by Lessee until the Termination Date, at which time all records and Aircraft Documents shall be returned to Lessor in original (not duplicate) form, or, to the extent delivered with the Aircraft at Delivery, in such form as received by Lessee at Delivery. Notwithstanding the preceding sentence, Lessee may return any such Aircraft Documents in electronic form, except with respect to documentation of Airworthiness Directive accomplishments which must be in original form with the signature of the Person authorized to accomplish such, subject to the following:
(a)    Lessee shall, unless already possessed by Lessor, provide Lessor with the software necessary to access such electronic documentation and the appropriate licenses for Lessor and any other owner or operator to use such software;
(b)    Lessee shall provide Lessor with the appropriate excerpts from Lessee’s operations or procedures manuals (in English), approved by the Aeronautics Authority, specifying the procedures to be adhered to by Lessee in the use of such form of electronic documentation in place of original documents; and
(c)     Lessee shall provide certification by a duly authorized officer of Lessee that the electronic documentation was maintained in accordance with the Aeronautics Authority approved procedures as set forth in clause (b) above.
12.6.     Performance of Maintenance. All Maintenance Checks, including the Final Check, shall be accomplished only at Approved Maintenance Organisations which shall be approved by Lessor, acting reasonably, in writing prior to the commencement of such Maintenance Check, such approval not to be unreasonably withheld. All other maintenance on the Aircraft will be performed by Lessee using personnel that are approved and appropriately certified by the Aeronautics Authority to perform such maintenance. Notwithstanding the preceding, at any time during the Lease Term, Lessee may provide Lessor with a list of Approved Maintenance Organisations that Lessee plans to use, and unless Lessor notifies Lessee in writing of its objection to any such Approved Maintenance Organisation at least thirty (30) days prior to the commencement of any Maintenance Check, such Maintenance Check may nevertheless be accomplished at such Approved Maintenance Organisation objected to by Lessor and such Approved Maintenance Organisation shall be deemed to be approved by Lessor for the accomplishment of such Maintenance Check, but otherwise such Approved Maintenance Organisation objected to by Lessor shall no longer be deemed to be approved.

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	 		 	MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

12.7.     Alterations, Modifications and Additions.
(a)     Required Alterations, Modifications and Additions. Lessee, at its own cost and expense, shall make such alterations, modifications and additions to the Aircraft and any Items of Equipment as may be required from time to time to comply with:
(i)    all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (1) is applicable to the respective Item of Equipment and (2) specify compliance during the Lease Term;
(ii)    Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be performed in strict accordance with such AD and without application or utilisation of any alternate method of compliance; and
(iii)    all Laws of the Aeronautics Authority which require compliance during the Lease Term.
(b)     Discretionary Alterations, Modifications and Additions.
(i)    Except as set forth in the preceding clause (a) or the following clause (ii), Lessee shall not make any alteration, modification or addition to the Aircraft or any Item of Equipment (including, but not limited to, galleys, lavatories, avionics or Engines) without the prior written consent of Lessor, which consent shall not be unreasonably withheld and shall be deemed given in the absence of a response within ten (10) Business Days following Lessor’s receipt of Lessee’s written request.
(ii)    Notwithstanding the provisions of the preceding clause (i), Lessor’s consent shall not be required for any discretionary alteration, modification or addition that Lessee wishes to perform to the Aircraft provided that any such alteration, modification or addition does not require or result in a modification to the Aircraft structure or electrical wiring system, and is:
(A)    for the installation of additional or enhanced Items of Equipment (and not in substitution for the same, unless replacing a Part with another Part that is of a higher modification status); or
(B)    cosmetic (and non-structural) in nature in order for Lessee to display its name, logo or other identification or advertising; or
(C)    to the Aircraft interior configuration that (1) utilises the existing seat track system (without modification), (2) does not require the addition to, removal of or modification of any Aircraft structure, (3) does not impair the

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	 		 	MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

value or utility of the Aircraft or any Item of Equipment or adversely affect compliance with the type certificate data sheet of the Aircraft, and (4) does not cause any change in the category or status of the Aircraft as defined by the Manufacturer.
(c)     Removed Items – Title and Risk of Loss. Subject to the provisions of Sections 12.8 and 12.9, title to any and all Items of Equipment removed from the Aircraft shall remain with Owner and risk of loss or damage to the same shall remain with Lessee during the Lease Term and Lessee shall keep, store and maintain the same in accordance with Manufacturer’s published procedures or written recommendations of the Manufacturer and standard industry practice (including the issuance of a Certificating Authority Form at the time of removal) for subsequent reinstallation or, at Lessor’s option, return to Lessor on the Termination Date.
(d)     De-Modification of Aircraft. Subject to the provisions of Sections 12.8 and 12.9, at Lessor’s option (unless otherwise agreed in writing by Lessor and Lessee), Lessee shall, in connection with Return, de-modify and restore the Aircraft to the condition and configuration it was in prior to the accomplishment of any alterations, modifications or additions performed in accordance with this Section 12.7, assuming such condition was in compliance with the terms of this Lease, notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i), if the same is provided, or otherwise.
12.8.     Replacement of Parts. Lessee, at its own cost and expense, shall promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall as promptly as practicable either reinstall such Part or replace such Part pursuant to the terms of this Article 12. Each replacement part prior to installation in the Aircraft or any Item of Equipment:
(a)    shall be free and clear of all Liens (other than Permitted Liens);
(b)    shall be in as good operating condition and shall have a value, utility, maintenance, modification and repair status at least equal to the Part replaced, assuming such replaced Part was in the condition and repair required to be maintained by the terms hereof;
(c)    shall have documentation evidencing compliance with all applicable Certificating Authority and Aeronautics Authority requirements, including, without limitation (but to the extent applicable):
(i)    a Certificating Authority Form and, if not indicated on such form, a teardown report indicating time since Overhaul and a description of work accomplished with respect to such part by an Approved Maintenance Organisation;
(ii)    Overhaul records with respect to Parts replacing Time Controlled Parts;
(iii)    documentation of modification status and compliance with Airworthiness Directives; and

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	 		 	MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

(iv)    any other appropriate documentation applicable to the maintenance and repair status of such part; and
(d)    shall:
(i)    have the same part number and be of the same Manufacturer as the replaced Part (an “ OEM Part ”), except (x) to the extent the Manufacturer has superseded the part number of such OEM Part, and in such an event the superseding part number shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual or a Required Approval or (y) if such OEM Part is no longer commercially available, an equivalent part with a different part number or from a different manufacturer shall be acceptable, and (z) non-OEM Parts manufactured by alternate manufacturers may be used to replace airframe consumable items, cosmetic items and standard hardware in the passenger cabin of the Aircraft, provided, however, each of sub-clauses (y) and (z) herein with respect to such equivalent parts or non-OEM Parts shall be subject to the approval of both the Airframe Manufacturer and the EASA for installation of such parts on the Aircraft;
(ii)    with respect to Time Controlled Parts, have not accumulated more time since new (and time since Overhaul if such replaced Part has previously been Overhauled) than that of the replaced Part.
12.9.     Title to Parts.
(a)     Parts Replacement in Connection with Maintenance. Any Part removed from the Airframe or any Item of Equipment shall remain the property of Owner and subject to this Lease, no matter where located, until such time as such Part shall be replaced by a part which has been incorporated or installed in or attached to the Aircraft or an Item of Equipment pursuant to the requirements for replacement parts specified in Section 12.8 and title to such replacement part has been vested in Owner. Except as set forth in Section 12.10, immediately upon any replacement part becoming incorporated, installed or attached to the Aircraft or an Item of Equipment as provided above, such part shall become the property of Owner, title to such replacement part shall immediately vest in Owner and such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. Once the replacement part has become subject to this Lease, title to the Part so replaced shall immediately vest in Lessee.
(b)     Parts Replacement in Connection with Discretionary Alterations, etc. So long as no Default or Event of Default shall have occurred and be continuing, at any time during the Lease Term, Lessee may remove any Part from an Item of Equipment that was installed pursuant to Lessee’s accomplishment of an alteration, modification or addition pursuant to Section 12.7(b), provided that:
(i)    such Part is in addition to and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to such Item at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part;

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	 		 	OPERATION OF THE AIRCRAFT	

(ii)    such Part is not required to be incorporated or installed in or attached or added to such Item pursuant to the terms hereof;
(iii)    such Part can be removed from such Item without diminishing or impairing the value, utility or airworthiness which such Item would have had at such time had such alteration, modification or addition not occurred; and
(iv)    such Part is not required to be installed on or attached to such Item of Equipment by the Aeronautics Authority or the Certificating Authority in order to maintain the airworthiness certification of the Aircraft for passenger operation.
Upon removal of any such Parts, Lessee shall restore the area where such Part was removed so that it is in the condition it would have been had such Part not been installed, assuming such condition was in compliance with the terms of this Lease, and so that such removal is undetectable. Title to any Part not removed by Lessee as above provided prior to the return of the respective Item of Equipment to Lessor hereunder shall remain with Owner.
12.10.     Temporary Replacement of Parts. Provided no Event of Default has occurred and is continuing, at any time during the Lease Term, any Part incorporated or installed in or attached or added to any Item of Equipment may be replaced temporarily with a part which does not satisfy the requirements of Section 12.8; provided that:
(a)    there shall not have been readily or economically available to Lessee at the time and in the place that such substitute or replacement part was required to be installed on the Airframe or Engine a replacement part complying with the requirements of Section 12.8;
(b)    it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee as an airline (as determined by Lessee) to have grounded the Aircraft until such time as a replacement part complying with the requirements of Section 12.8 became available for installation on the Aircraft;
(c)    as soon as practicable after installation of the same on the Airframe or Engine (and in any event no later than the earliest to occur of (i) the first C-Check following such installation, (ii) the Scheduled Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the requirements of Section 12.8 and replace the same with a part complying with such requirements.
Upon the replacement by Lessee of any such non-conforming part pursuant to the foregoing clause (c), title to such replacement part shall, without further act, vest in Owner and such part shall be deemed a Part hereunder.
12.11.     Exchanging Parts. Any Part removed from the Aircraft or any Item of Equipment in the course of performance of maintenance on the same may be subjected by Lessee to normal exchanges customary in the airline industry in the ordinary course of Lessee’s business provided that ( x ) the parts replacing such removed Parts are incorporated, installed in or attached to the Aircraft or such Item of Equipment promptly following the removal of such Parts, and ( y ) all applicable requirements of the Aeronautics Authority and the Certificating Authority shall be

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	 		 	MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

adhered to with respect to all such Parts being incorporated, installed, or attached, whether or not such Part was originally removed from the Aircraft or any Item of Equipment or is a replacement for any such removed Part. Lessee shall, whether or not such exchanged part is owned by Lessee at the time such exchange is completed, comply or ensure the continued compliance with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to installation of the same into the Aircraft or any Item of Equipment.
12.12.     Temporary Attachment and Removal of Engines.
(a)     Installation of Other Engines.
(i)    In the course of performance of Lessee’s Obligations under this Lease, Lessee may temporarily remove an Engine from the Airframe and install an engine on the Airframe that is owned by Lessee or which is subject to a lease, conditional sale agreement, trust indenture or other security agreement, provided that such other engine is ( x ) free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such engine and as the same are otherwise permitted to exist pursuant to Section 17.7, and ( y ) Lessee, or if Lessee is not the owner of the engine, the lessor, conditional seller, indenture trustee or secured party of any such engine agrees in writing in a form satisfactory to Lessor, acting reasonably, and which agreement may be set forth in the relevant lease, conditional sale agreement, mortgage, indenture or security agreement, that it will not acquire or claim, as against Lessor, any right, title or interest in or any adverse right, title or interest to the Airframe or any Item of Equipment as the result of any such engine being installed on the Airframe. Lessor agrees for the benefit of any such owner, lessor, conditional seller or secured party that, subject to such Person’s agreement as set forth above, Lessor shall not claim any interest in any such engine by virtue of its installation on the Airframe. If any of the respective interests of Lessor, Owner or any relevant Financing Party in any Item of Equipment is materially impaired by virtue of installation of such engine on the Airframe, Lessee shall promptly, following receipt of written notice from Lessor to such effect, remove such engine from the Airframe, failing which such impairment or adverse effect will be deemed an Event of Default pursuant to Section 23(k).
(ii)    Lessee shall comply with the requirements of Section 19.4(c) for as long as such engine is installed on the Airframe and the engine shall be removed from the Airframe and the removed Engine reinstalled on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not later than the Termination Date.
(b)     Installation of Engines on other Airframes. Provided no Event of Default has occurred and is continuing, Lessee may install an Engine removed from the Airframe on any other airframe of the same type operated by and in Lessee’s fleet of aircraft, but only if:
(i)    Lessee has title to such other airframe and such airframe is free and clear of all Liens (except as the same are permitted to exist pursuant to Section 17.7); or
(ii)    such other airframe is leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement, provided that (A) such airframe is free and

	 	32	 		
	 		 	ARTICLE 12
MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such airframe and as the same are otherwise permitted to exist pursuant to Section 17.7, and (B) there shall be in effect a written recognition of rights agreement of the lessor or secured party of such airframe substantially in the form appearing in Appendix 8 or substantially similar agreement to the effect that such lessor, conditional seller or secured party will not claim any interest in the Engine by virtue of such Engine being installed on such airframe, and which agreement may be set forth in any relevant lease, conditional sale agreement, mortgage or security agreement. If any of the respective interests of Lessor or any relevant Financing Party in an Engine is materially impaired by virtue of installation on any such other airframe, Lessee shall promptly remove such Engine from such other airframe, failing which such impairment or adverse effect will be deemed an Event of Default under Section 23(k) or in the event such continued installation of such Engine on such airframe has resulted in loss of title to the Engine by Lessor, an Engine Loss;
and in either case, Lessee shall comply with the requirements of Section 19.4 for as long as such Engine is installed on such other airframe and the Engine shall be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not less than thirty (30) days prior to the Scheduled Termination Date.
12.13.     Installation of Items of Equipment on Other Aircraft. Subject to the preceding provisions of this Article 12, Lessee may permit any Item (excluding Landing Gear) to be installed on another aircraft solely to the extent such aircraft is within Lessee’s fleet of aircraft; provided, however, upon the occurrence and continuation of an Event of Default following the removal of any such Item from the Aircraft, Lessee shall promptly, but in no event later than ten (10) Business Days following such Event of Default:
(a)    reinstall on the Aircraft each such Item not then currently installed thereon, assuming such Item is in airworthy condition, or
(b)    in the event such Item is not in an airworthy condition, such Item shall be restored promptly to an airworthy condition and reinstalled on the Aircraft or, in the case of a Part, such Part may be exchanged in accordance with Section 12.11.
12.14.     Failure to Reinstall Engines and Items of Equipment on the Aircraft. If (a) an Event of Default has occurred and is continuing which is the result of Lessee’s failure to make any payments when due or failure to maintain the airworthiness of the Items of Equipment, and (b) Lessee fails to comply with the requirements set forth in Sections 12.12 and 12.13, then in such instance and in recognition of the higher credit risk to which an aircraft lessor is exposed when an Engine, APU, or Part has been removed from an aircraft at a time when a Default or an Event of Default has occurred and is continuing, Lessee shall pay to Lessor an additional rental charge, incurred as Supplemental Rent and not as a penalty, in the amount of (X) ***** for each Engine, (Y) ***** for the APU, and (Z) ***** of the replacement cost for any Part, for each day each such Engine, APU or Part, as the case may be, remains in noncompliance with Sections 12.12 or 12.13, as the case may be.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	33	 		
	 		 	ARTICLE 12
MAINTENANCE, MODIFICATION AND	
	 		 	OPERATION OF THE AIRCRAFT	

13.	MAINTENANCE RESERVES	
13.1.     Maintenance Reserves. Lessee shall make payments to Lessor in respect of the Maintenance Reserves in accordance with Appendix 2C, on a monthly basis, within ten (10) days following the last day of each Calendar Month, with the first payment due ten (10) days following the first full Calendar Month of the Lease Term; provided that Lessee’s final payment in respect of Maintenance Reserves shall be made on the Termination Date.
13.2.     Discrepancies. If Lessee’s actual utilisation of the Aircraft is greater than Lessee’s utilisation of the Aircraft reported to Lessor in accordance with Article 16, Lessee shall make up any deficiency payments in respect of Maintenance Reserves to Lessor within three (3) Business Days of the date of receipt of written notice from Lessor.
13.3.     Rights in Maintenance Reserves.
(a)    All amounts paid by Lessee in respect of Maintenance Reserves are the sole and exclusive property of Lessor and Lessor shall be entitled to freely commingle such moneys with its several funds and deal with such moneys as Lessor sees fit. Notwithstanding such stated intent, if and to the extent that the Maintenance Reserves or any part thereof, under any applicable Law or otherwise, are determined to be security deposits or otherwise the property of Lessee or if it is so determined those monies are a debt owed to Lessee or that Lessee shall have any interest in those monies, Lessee and Lessor agree that subclauses (i) and (ii) below shall apply.
(i)    Pursuant to applicable Law, Lessee hereby grants to Lessor a first and prior perfected Lien and possessory security interest in the Maintenance Reserves as security for Lessee’s Obligations, including, without limitation, the obligations of Lessee to maintain and return the Aircraft and each Item of Equipment in the condition required by this Lease. Lessee agrees to execute and file, at Lessee’s expense, with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
(ii)    Lessee shall not assign, hypothecate or otherwise transfer its interests, if any, in the Maintenance Reserves.
(b)    Upon and during the continuance of an Event of Default, and in addition to all other rights Lessor may have under this Lease under applicable Law, Lessor may use, apply or retain all or any portion of the Maintenance Reserves, and, without limitation, Lessor may immediately or at any time thereafter, while any Event of Default is continuing, without prior notice to Lessee ( x ) offset all or any part of the Obligations or Related Obligations against the liabilities of Lessor in respect of any obligations of Lessor or Affiliate of Lessor under any Related Lease, or ( y ) apply the Maintenance Reserves in or towards the payment or discharge of the Obligations or Related Obligations in such order as Lessor reasonably sees fit. If Lessor uses or applies all or any portion of such Maintenance Reserves, such application shall not be deemed a cure of any Default or Event of Default unless and until Lessee shall have, and Lessee shall

	 	34	 		
	 		 	ARTICLE 13	
	 		 	MAINTENANCE RESERVES	

within three (3) Business Days after written demand therefor deposit with Lessor in cash an amount sufficient to fully restore each such Maintenance Reserve account to its original sum prior to such application plus any amount then due and payable by Lessee in respect of Maintenance Reserves.
13.4.     Claims for Reimbursement - Timing. Any claim by Lessee for reimbursement from the Maintenance Reserves made pursuant to this Lease shall be made within the earlier to occur of ( x ) one hundred eighty (180) days following the completion date of the Maintenance Check for which such claim is being made and ( y ) the Termination Date, provided that notification by Lessee to Lessor on or before the Termination Date that a claim exists and will be submitted no later than 180 days following completion of the respective Maintenance Check shall be deemed as complying with the timing requirement set forth herein. Should Lessee fail to make such claim within such time period (or agree with Lessor in writing concerning an alternate disposition for such claim), Lessee shall thereafter be forever barred and estopped from making a claim in respect of such maintenance.

	 	35	 		
	 		 	ARTICLE 13	
	 		 	MAINTENANCE RESERVES	

14.	MANUFACTURERS’ WARRANTIES	
14.1.     Assignable Warranties. At Delivery, Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by the Airframe Manufacturer and the Engine Manufacturer pursuant to airframe and engine warranty assignment agreements in form and substance satisfactory to Lessee, Lessor and such Manufacturer. In addition, at Delivery Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by any other Manufacturer, and at Lessee’s cost, Lessor shall cooperate with Lessee in respect of the enforcement of any such warranties.
14.2.     Reassignment; Assignment of Lessee Warranties. On the Termination Date:
(a)    the benefit of any warranty and other rights assigned or made available by Lessor to Lessee pursuant to this Lease will be reassigned automatically and without further act or writing to Lessor; provided that upon the occurrence and continuation of an Event of Default, Lessor may instruct any Manufacturer of any Item of Equipment to make any payments of monies under any warranty claims made by Lessee directly to Lessor for further credit to Lessee upon and subject to Lessee’s cure of such Event of Default; and
(b)    Lessee shall assign and shall be deemed to have assigned to Lessor on and as of the Termination Date, at no charge to Lessor, any and all warranties Lessee has obtained in connection with any maintenance or services performed on the Aircraft or any Item of Equipment during the Lease Term.
14.3.     Warranty Claims. Lessee will diligently and promptly pursue any valid claims it may have under the warranties assigned to it hereunder with respect to the Aircraft and other Items of Equipment. At the written request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of ( x ) fourteen (14) days prior to the Scheduled Termination Date and ( y ) the Termination Date of all such warranty claims made by Lessee during the Lease Term to the extent historical records of the same are maintained by Lessee (except to the extent such information shall have previously been provided to Lessor).

	 	36	 		
	 		 	ARTICLE 14	
	 		 	MANUFACTURERS’ WARRANTIES	

15.	SUBLEASING AND WET LEASING	
15.1.     Subleasing. Provided no Default or Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Permitted Subleases for the Aircraft with Permitted Sublessees provided that:
(a)    the term of such Permitted Sublease is not for a period exceeding the Lease Term and shall expressly prohibit sub-subleasing of the Aircraft and any Item of Equipment independent of the Airframe;
(b)    the rights of the Permitted Sublessee under such Permitted Sublease are at all times expressly subject and subordinate to the rights of Lessor hereunder and to the respective interests of Owner, Owner Participant and any Financing Parties and shall contain a provision substantially to the effect of:
“Anything in this sublease to the contrary notwithstanding, the sublessee’s rights hereunder to the possession, use and enjoyment of the Airframe, and if attached to the Airframe at the commencement of the sublease or if subsequently delivered to sublessee during the term of the sublease, the Engines in accordance with the terms hereof shall be subject to the Aircraft Lease Agreement dated as of 17 November 2010 (the ‘ Primary Lease ’) between Wilmington Trust SP Services (Dublin) Limited, as lessor (the ‘ Primary Lessor ’), and the sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the sublessee confirms and agrees that this sublease is in all respects subject and subordinate to the Primary Lease. Upon notice to the sublessee hereunder by the Primary Lessor that an Event of Default (as defined in the Primary Lease) has occurred and is continuing, and that the Primary Lease shall have been cancelled or terminated pursuant to the terms thereof, the Primary Lessor may, at its option, by written notice to the sublessee after the date of such cancellation or termination:
 
 	(i)	require the sublessee to enter into an agreement, in form and substance satisfactory to the Primary Lessor, recognising the Primary Lessor, as the sublessor hereunder and reconfirming all of the obligations of the sublessee hereunder, or	
 
 	(ii)	terminate this sublease and require prompt delivery by the sublessee of the Aircraft to the Primary Lessor, in accordance with the return provisions of this sublease.	
Unless the sublessee shall have received any such written notice from the Primary Lessor requiring attornment or terminating this sublease, the sublessee shall be and remain fully obligated hereunder notwithstanding the continuance of any Event of Default under the Primary Lease or the termination or cancellation thereof pursuant to the terms thereof.”;
(c)    Lessee causes the Permitted Sublessee under the Permitted Sublease to deliver to and for the benefit of Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease a supplemental power of attorney for deregistration of the Aircraft in the form delivered by Lessee to Lessor at Delivery;

	 	37	 		
	 		 	ARTICLE 15	
	 		 	SUBLEASING AND WET LEASING	

(d)    Lessee and such Permitted Sublessee shall not enter into any amendments, modifications, waivers or the like of any provision of the Permitted Sublease without Lessor’s prior written consent and should such consent be granted, Lessee shall deliver to Lessor a copy of any such duly executed agreements between Lessee and such Permitted Sublessee in connection with the same;
(e)    if necessary, Lessee and Permitted Sublessee shall authorise the filing of and deliver documents appropriate for perfection filings in the State of Registration and such other jurisdictions as Lessor, in good faith, deems reasonable and appropriate, in form and substance satisfactory to Lessor, covering the interests of Lessee and such Permitted Sublessee under such Permitted Sublease, together with any other documents requested by Lessor to protect or perfect the interest of Lessor, Owner, Owner Participant and any Financing Parties in the Permitted Sublease in the State of Registration and/or such other jurisdictions;
(f)    Lessee shall assign each Permitted Sublease and all rights and security deposits and maintenance and other reserves received thereunder to Lessor pursuant to a security assignment of the Permitted Sublease together with a consent and agreement of the Permitted Sublessee, each in form and substance satisfactory to Lessor and, if applicable, Owner, Owner Participant and each Financing Party, as security for Lessee’s Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding the enforceability and perfection of the Permitted Sublease and such assignments for security and the consent and agreement or other assurances reasonably satisfactory to Lessor;
(g)    the provisions of each Permitted Sublease shall provide for benefits and protections to Lessee, as sublessor, which are (in respect of material terms and in the aggregate) not less advantageous to Lessee, as sublessor, than the benefits and protections provided to Lessor by the provisions of this Lease;
(h)    Lessee shall ( x ) notify Lessor of the terms of each Permitted Sublease (and provide copies of the final drafts thereof) not less than fifteen (15) Business Days prior to the execution of such Permitted Sublease, and ( y ) furnish the “original” copy of such Permitted Sublease to Lessor as soon as possible after the execution thereof, but in any event prior to the delivery of the Aircraft to such Permitted Sublessee; and
(i)    neither Lessee nor Permitted Sublessee shall register any Permitted Sublease on the International Registry without Lessor’s prior consent, which consent shall not be unreasonably withheld.
15.2.     Wet Leasing. Provided no Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Wet Leases for the Aircraft to any Person provided that:
(a)    the rights of the lessee under the Wet Lease are at all times expressly subject to and subordinate to, and do not conflict in any respect with (or give such wet lessee any rights greater than the rights of Lessee under), the terms of this Lease and the rights of Lessor hereunder and the respective interests of Owner, Owner Participant and any Financing Party;
(b)    Lessee provides Lessor with ( x ) a certified copy of the applicable provisions from the Wet Lease or an officer’s certificate indicating whether Lessee or the wet lessee under the Wet

	 	38	 		
	 		 	ARTICLE 15	
	 		 	SUBLEASING AND WET LEASING	

Lease will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the Wet Lease, and ( y ) a certified copy or original of an insurance certificate and broker’s letter of undertaking confirming the maintenance of insurance coverage required by this Lease; and
(c)    in any event, unless otherwise agreed by Lessor in writing, the term of such Wet Lease ends on a day not later than thirty (30) days prior to the Scheduled Termination Date.
15.3.     No Independent Subleasing of Items of Equipment. No Item of Equipment may be subleased independently from the Aircraft.
15.4.     Expenses. Lessee shall pay or reimburse, without duplication, Lessor, Owner, Owner Participant, Servicer, Security Trustee and any other Financing Party on demand for their respective, documented, out of pocket costs and expenses reasonably incurred in connection with the review, negotiation and consummation of the transactions contemplated by any Permitted Sublease or Wet Lease.
15.5.     Lessee Remains Liable. Lessee shall remain primarily and fully responsible and liable for the performance of its Obligations under, and the observance of the terms of this Lease and the Operative Documents, notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted Sublease or Wet Lease had not occurred.

	 	39	 		
	 		 	ARTICLE 15	
	 		 	SUBLEASING AND WET LEASING	

16.	REPORTING AND INSPECTIONS	
16.1.     Financial Reporting. Lessee agrees to furnish to Lessor the following, which shall be deemed Information:
(a)     Semi-Annual Statements. As soon as reasonably practicable after the end of the second and fourth quarterly fiscal periods in each fiscal year of Lessee, and in any event within one hundred twenty (120) days thereafter, duplicate copies, in English, of:
(i)    a consolidated balance sheet of Lessee or Guarantor as at the end of such six month period;
(ii)    consolidated statements of income and retained earnings of Lessee or Guarantor for such six month period; and
(iii)    consolidated statements of cash flow of Lessee or Guarantor for the portion of the fiscal year ending with such six month period.
(b)     Annual Statements. As soon as practicable after the end of each fiscal year, and in any event within one hundred eighty (180) days thereafter, a copy, in English, of:
(i)    a consolidated balance sheet of Lessee or Guarantor as at the end of such year, and
(ii)    consolidated statements of income and retained earnings and of cash flow of Lessee or Guarantor for such year, prepared in accordance with GAAP (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognised standing in Lessee’s State of Organisation (which report may be adverse, qualified or disclaim an opinion).
(c)     Comparison. All statements furnished under clauses (a) or (b) above shall set forth in comparative form the amount for the end of the corresponding fiscal year, or corresponding period of the preceding fiscal year, as the case may be.
(d)     Satisfaction by Publication. Lessee’s obligations under Sections 16.1(a) through (c) above shall be deemed satisfied should Lessee or Guarantor publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee thereunder, and further notify Lessor in writing of the website address.
(e)     Notice of Proceedings. Prompt notice of any litigation or arbitral proceedings not covered by insurance (except for deductibles standard in the airline industry) and of all proceedings by or before any Governmental Authority (i) which might adversely affect Owner’s ownership or Owner’s or Lessor’s other interests in the Aircraft, (ii) which relate to the Aircraft and where the amount involved not covered by insurance is in excess of ***** or (iii) which might, in the reasonable and good faith judgment of Lessee, have a material adverse effect on the ability of Lessee to perform the Obligations.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	40	 		
	 		 	ARTICLE 16	
	 		 	REPORTING AND INSPECTIONS	

(f)     Additional Information. Lessee will furnish to Lessor (i) unless available on a website generally available free of charge to the public, promptly after the same has been made public, a copy of any announcement released by Lessee to any stock exchange on which Lessee is publicly traded by shares (if applicable), and (ii) a copy of any other information concerning Lessee’s business which Lessee releases or otherwise makes available to its creditors generally.
16.2.     Aircraft Utilisation and Other Reporting/Information. During the Lease Term, Lessee agrees to furnish to Lessor the following information in connection with Lessee’s utilisation of the Aircraft:
(a)    (i) within ten (10) days following the last day of the first full Calendar Month and each subsequent Calendar Month during the Lease Term, and (ii) on the Termination Date, a utilisation report in the form appearing in Appendix 8 reporting the utilisation of the Items of Equipment set forth therein for the immediately preceding Calendar Month or part thereof;
(b)    as promptly as reasonably practicable, but in no event later than the date of issuance of the next monthly utilisation report following the date of the removal of any Engine, Landing Gear or APU, advising of (i) the reason for such removal, (ii) the location of such Item of Equipment, (iii) the total accumulated Flight Hours and Cycles of such Item of Equipment (or total APU Hours with respect to the APU), (iv) the Flight Hours and Cycles accumulated since the most recent Engine Restoration with respect to any Engine or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the APU Hours accumulated since the most recent Overhaul with respect to the APU, and (vi) the intended workscope, in each case, as applicable;
(c)    written notice of and information of any accident or incident with respect to any Item of Equipment (other than Parts) as promptly as possible, and in any event within two (2) Business Days following the occurrence or detection thereof;
(d)    within a reasonable time (but not less than ten (10) days) prior to the commencement date for any Maintenance Check and in accordance with Section 12.6, the identity of the Approved Maintenance Organisation Lessee intends to have perform such check together with a copy of the workscope intended to be accomplished in connection with the same, to the extent available; and
(e)    upon written request of Lessor, a copy of the Maintenance Program, inclusive of all revisions issued as of the date of such request. Lessor agrees not to disclose such Maintenance Program to any Person (other than Lessor’s employees and consultants, who shall be instructed not to disclose the same other than as permitted by this Section 16.2(e)) except as necessary to bridge the Maintenance Program onto another maintenance program following the Termination of the Lease, and shall require any Person to whom it shall disclose the same as permitted by this Section 16.2(e), to agree in writing not to disclose the contents of such Maintenance Program.
16.3.     Further Information; Inspections.
(a)    Lessee shall provide to Lessor, following Lessor’s written request during the Lease Term (provided that long as no Event of Default has occurred and is continuing, such requests shall be made no more than once per year) and within one hundred eighty (180) days following the Termination Date, a list of the airports to which Lessee has operated the Aircraft during the (i) twelve (12) months preceding such request (or the Termination Date, if applicable).

	 	41	 		
	 		 	ARTICLE 16	
	 		 	REPORTING AND INSPECTIONS	

(b)    During the Lease Term, Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Items of Equipment as Lessor may reasonably request.
(c)    Lessee shall permit any Person (including prospective purchasers, financiers or lessees of the Aircraft) designated in writing by Lessor, to visit and inspect (at any reasonable time, provided that, so long as no Event of Default has occurred and is continuing, such inspection shall not unreasonably interfere with Lessee’s business, maintenance or operational commitments) the Items of Equipment, their condition, use and operation and the records maintained in connection therewith and, at Lessor’s cost, to make copies of such records as Lessor may reasonably designate (unless an Event of Default has occurred and is continuing, in which case such copies shall be provided to Lessor at Lessee’s cost).
(d)    Lessor shall be permitted to have representatives and/or agents present throughout the accomplishment of Maintenance Checks to observe all aspects of the same including, but not limited to, the workscope thereof; provided, however, that such representatives and agents shall not interfere with such Maintenance Checks and shall be bound by all rules and regulations of the relevant maintenance provider. Neither Lessor nor any person designated by Lessor shall have any duty to make any such inspection and none shall incur any liability or obligation by reason of making or not making such inspection.
16.4.     Technical Report Prior to Return of Aircraft.
(a)    Twenty (20) months prior to the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance status report detailing the information in the form appearing in Appendix 8.
(b)    At Lessor’s written request, Lessee will make copies available of (i) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at Return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) Time Controlled Part listings and current maintenance status of each, (v) a list of modifications and alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior material burn certificates, (vii) the complete workscope for the Maintenance Checks and other work to be performed prior to Return, (viii) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from any Manufacturer, (ix) current Engine disk sheets and a description of the work accomplished during the last shop visit for each Engine and (x) any other data which is reasonably requested by Lessor in connection with any of the foregoing.

	 	42	 		
	 		 	ARTICLE 16	
	 		 	REPORTING AND INSPECTIONS	

17.	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	
17.1.     Registration. At Delivery, Lessee shall register the Aircraft (or shall cause the same to be registered) with the Register in the State of Registration with the respective interests of Owner, Lessor and the Security Trustee and any relevant Financing Party recorded to the fullest extent permitted by applicable Law in the State of Registration and shall thereafter maintain such registration throughout the Lease Term. Lessor and Owner shall cooperate and shall cause Servicer, Owner Participant, Security Trustee and any Financing Party to cooperate with Lessee in effecting and maintaining such registration and shall provide to Lessee such documents as Lessee may reasonably request in connection therewith. Lessee shall not take or permit any action inconsistent with the continued registration of the Aircraft or the recordation of the various interests of Lessor, Owner and any Financing Party therein with the Register.
17.2.     Identification Plates. Lessee shall, throughout the Lease Term, maintain in respect of the Airframe, the APU and each Engine a fireproof identification plate of a reasonable size, in a clearly visible place in the cockpit of the Aircraft (or in the vicinity of the Airframe Manufacturer’s data plate) and in close proximity to the Manufacturer’s data plate on each Engine and the APU, that contains the legend in writing appearing in Appendix 2B. Lessee shall not remove, or cause or permit the removal or modification of such identification plate without Lessor’s prior written consent. Lessee shall not allow the name of any other Person (with the exception of Lessee) to be placed on the Airframe or any Engine as a designation that might be interpreted as a claim of ownership or of any interest therein. Lessee shall promptly replace any such nameplate that becomes illegible, lost, damaged or destroyed for any reason. If at any time Lessor and/or Owner transfer their respective interests in the Aircraft or this Lease as permitted hereunder or Lessor or Owner finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost, promptly affix such new nameplates to the Airframe and the Engines as may be required by Lessor.
17.3.     Aeronautics Authority Acknowledgment. If and to the extent that the same is customarily available in the State of Registration, Lessee shall use reasonable efforts to obtain and deliver to Lessor at Delivery, a letter from the Aeronautics Authority addressed to Lessor and (if so requested by Lessor) Owner and/or any Financing Party confirming that it will recognise Owner’s title to the Aircraft and the respective rights of Lessor, Owner and/or such Financing Party to deregister the Aircraft upon the cancellation, termination or expiration of the leasing of the Aircraft hereunder in accordance with the provisions hereof.
17.4.     Authorisation to Make Perfection Filings. The execution of this Lease by the parties hereto constitutes the authorisation by Lessee to Lessor’s legal counsel to make such perfection filings as Lessor and its counsel deem necessary or desirable to protect the interest of Lessor, Owner and any Financing Party hereunder. From time to time on reasonable written request made by Lessor, Lessee shall provide to Lessor a letter on the letterhead of Lessee, in form and substance reasonably satisfactory to Lessor and executed by an officer of Lessee, authorising such Persons as Lessor may specify to make such perfection filings as Lessor reasonably deems necessary or desirable to protect the interests of Lessor, Owner or any Financing Party hereunder.

	 	43	 		
	 		 	ARTICLE 17	
	 		 	REGISTRATION; PERFECTION OF	
	 		 	OWNER’S TITLE; LIENS	

17.5.     Perfection of Title.
(a)    Lessee shall, together with Owner, Owner Participant, Security Trustee and/or Lessor, cause, or, at Lessor’s request, assist Lessor in causing, this Lease, the Lease Supplement and any and all additional instruments which shall be executed pursuant to the terms hereof as permitted by applicable Law, to be kept, filed and recorded in the offices of any Governmental Authorities in the State of Registration as required by the Register, any applicable Aeronautics Authority and any applicable Law. Lessee shall not take any action which would conflict with or adversely affect such filings and recordation of the Lease and such other documents as provided herein.
(b)    If at any time subsequent to the initial recordation under the preceding clause (a), any filing or recording is reasonably necessary or desirable to protect the interests of Lessor, Owner Participant, Security Trustee and/or Owner, Lessee, upon written request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded or, as necessary to be re-filed and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor, Owner Participant, Security Trustee and Owner hereunder and in the Aircraft or any Item of Equipment. At the reasonable request of Lessor and at Lessor’s cost, Lessee shall furnish to Lessor, Owner (if not Lessor), Owner Participant and Security Trustee an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation.
(c)    Without limiting the foregoing, Lessee shall do or cause to be done any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and interests of Owner, Owner Participant, Security Trustee and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee does, or is reasonably likely to, operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Owner’s and Owner Participant’s ownership rights regarding the Aircraft within any such jurisdiction.
17.6.     Cape Town Convention.
(a)    Lessee shall promptly make or approve registrations, filings and recordings, and/or do or cause to be done such additional acts and things which may be reasonably requested by Lessor (for itself or for and on behalf of Owner and any Financing Party) as being required by or advisable under applicable law, in order (x) that the Operative Documents effectively constitute international interests, while retaining the commercial and business agreements of the parties as described therein in any such new Operative Documents, and provide to the such parties the full benefit of the Cape Town Convention with respect to the Aircraft and the Engines, and (y) the Operative Documents contain such provisions as may be necessary to confirm the commercial and business agreements of the parties therein to the greatest extent permitted under the Cape Town Convention, including, without limitation, with respect to:

	 	44	 		
	 		 	ARTICLE 17
REGISTRATION; PERFECTION OF	
	 		 	OWNER’S TITLE; LIENS	

(i)    matters concerning the documentation and registration in the International Registry of international interest(s) or prospective international interest(s) which are, or may be, vested in Lessor, Owner or any Financing Party under this Lease or any other Operative Documents and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(ii)    matters concerning sales and prospective sales which are required or permitted by this Lease or the other Operative Documents, including with respect to documentation and registration in the International Registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iii)    matters concerning any assignment of associated rights or prospective assignment of associated rights which is required or permitted or constituted by this Lease or any other Operative Document, the documentation and registration thereof in the international registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iv)    delivery and recording with the Register of an irrevocable de-registration and export request authorisation substantially in the form annexed to the Protocol, which may be exercised only after the occurrence and during the continuance of an Event of Default; and
(v)    subject to the preceding and the following provisions of this Section 17.6, including or excluding in writing the application of any provisions of the Cape Town Convention and/or the Protocol that Lessor (for itself or acting for an on behalf of Owner or any Financing Party), acting reasonably may deem advisable in connection with the foregoing.
(b)    In addition to the remedies set forth in this Lease or as may otherwise be available to Lessor, Owner or any Financing Party under any other Operative Documents, at law or in equity, upon the occurrence and during the continuation of an Event of Default, Lessor and/or Owner may, but shall not be obligated to, exercise any remedy available to it under the Cape Town Convention and/or the Protocol (subject, in each case to the requirements and limitations of the Cape Town Convention and the Protocol and to the requirements and limitations imposed by the State of Registration in relation to the Cape Town Convention and Protocol), including:
(i)    the remedies set forth in Articles 8, 9 and 34 of the Cape Town Convention and Article IX(1) of the Protocol;
(ii)    relief pending final determination under Article 13 of the Cape Town Convention and Article X of the Protocol (including sale of the Aircraft and application of proceeds therefrom, but excluding the application of Article 13(2) of the Cape Town Convention); and
(iii)    the procurement of the de-registration of the Aircraft and the export and physical transfer of the Aircraft or any Engine from the territory in which it is situated pursuant to Article IX of the Protocol, but excluding, solely to the extent permitted by

	 	45	 		
	 		 	ARTICLE 17	
	 		 	REGISTRATION; PERFECTION OF	
	 		 	OWNER’S TITLE; LIENS	

Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention with regard to default remedies without prejudice to Article IX(1) of the Protocol, provided that such exclusion shall not be applicable (to the extent permitted by Article 15 of the Cape Town Convention) to the extent such default remedies are exercised outside the territorial limits of the State of Registration and in a manner not involving the courts of the State of Registration or of its territorial units; and ( y ) where a remedy is available to it under the Cape Town Convention or the Protocol and also under this Agreement and the other Operative Documents or other applicable law, to the extent permitted by the Cape Town Convention and the Protocol and other applicable law, and subject to the provisions of the previous clause (x), Lessor (for itself and for and on behalf of Owner and any Financing Party) may elect under which of the foregoing it shall exercise such remedy.
(c)    Without limiting the generality of the foregoing or any other provisions of the Operative Documents, Lessee hereby (i) agrees (without prejudice to its rights under Section 10.2) to exclude the application of Article XVI(1)(a) of the Protocol; and (ii) consents, pursuant to Article XV of the Protocol, to any assignment of associated rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the Operative Documents and further agrees that the provisions of this Section 17.6, shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such assignment of associated rights.
(d)    In this Section 17.6 the following terms have the meanings given in the Cape Town Convention and the Protocol: international interest, prospective international interest, international registry, assignment of associated rights, prospective assignment of associated rights, registered, sale and prospective sale and proceeds .
17.7.     Permitted Liens. Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to this Lease, any Item of Equipment, title thereto or any interest therein, except (i) the respective rights of Owner, Lessor and Lessee as herein provided; (ii) Lessor’s Liens; (iii) Liens for Taxes not yet due or being contested in good faith by appropriate proceedings so long as adequate reserves are maintained with respect to such Taxes in accordance with GAAP; (iv) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee); and (v) Liens for airport, navigation, and en-route charges arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee). Lessee shall not be permitted to contest any Lien if such contest gives rise to any reasonable likelihood of the sale, forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment or any interest therein in the course of any such proceedings, or as a result of any such Lien or the respective interests of Lessor, Owner or any Financing Party will be similarly adversely affected. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to any Item of Equipment.

	 	46	 		
	 		 	ARTICLE 17
REGISTRATION; PERFECTION OF	
	 		 	OWNER’S TITLE; LIENS	

17.8.     Expenses. With respect to all filings, recordings and/or registrations to be made in accordance with the requirements of each of Sections 17.1 through 17.6, inclusive, Lessee shall bear all costs incurred in effecting and maintaining the registration of Owner’s and Lessor’s interests during the Lease Term, but Lessor shall bear any costs of filing, maintaining or otherwise perfecting the interests of Security Trustee, Servicer, Owner Participant and any Financing Party.

	 	47	 		
	 		 	ARTICLE 17
REGISTRATION; PERFECTION OF	
	 		 	OWNER’S TITLE; LIENS	

18.	GENERAL INDEMNITY	
18.1.     Scope. Lessee agrees to indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee from and against any and all Claims which in any way may result from, pertain to or arise out of, or are in any manner related to:
(a)    the Aircraft, this Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or
(b)    the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or
(c)    any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee, Lessor, Owner Participant or Servicer) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or
(d)    any failure of Lessee to provide or maintain the Aircraft Documents in accordance with the relevant provisions of this Lease or any other Operative Document during the Lease Term; or
(e)    any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or
(f)    any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or
(g)    any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof; or
(h)    any transaction, approval, or document contemplated by this Lease or any other Operative Document or given or entered into in connection herewith or therewith.
Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be subrogated to all rights and remedies which such indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall give prompt written notice thereof to Lessee or such Indemnitee, as the case may be, but failure to give such notice shall not relieve Lessee of its obligations hereunder, except to the extent such failure precludes or restricts Lessee from contesting or otherwise defending any such Claim and except for any liability or obligation of Lessee to the extent the same is increased or would not have been incurred in the absence of any such failure.

	 	48	 		
	 		 	ARTICLE 18	
	 		 	GENERAL INDEMNITY	

18.2.     Lessee’s Release. Lessee hereby waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such defect may be discovered, whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee, and regardless of the location of the Aircraft or any Item of Equipment at any such time.
18.3.     Repayment. If an Indemnitee shall obtain a repayment of any amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default, promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
18.4.     Payment. Subject to the provisions of Section 18.3 hereof, Lessee shall pay directly to each Indemnitee all amounts due under this Article 18 within ten (10) days of the receipt of written notice by Lessee from such Indemnitee that such payment is due, together with reasonable detail supporting Lessee’s obligations in respect of the relevant Claim(s) and the amount(s) thereof.
18.5.     Exclusion. Notwithstanding the foregoing provisions of this Article 18, Lessee shall not be obligated to make any payment to an Indemnitee by way of indemnity in respect of any Claim against such Indemnitee, to the extent that such Claim results from or arises out of:
(a)    the gross negligence or willful misconduct of such Indemnitee;
(b)    any Lessor’s Lien, except to the extent any such Claim results from or arises out of (and in which case such Claim shall not be excluded from Lessee’s indemnity Obligations under this Article 18):
(i)    the premature termination of any funding or other financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft following the occurrence and continuation of an Event of Default; or
(ii)    any indemnity payment payable by an Indemnitee to another Person under any financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft and for which Lessee has expressly agreed to provide an indemnity pursuant to Section 18.1;
(c)    any Taxes;
(d)    acts or events which occur (i) before Delivery (except with respect to any Claims arising from or related to Lessee’s acts or omissions in connection with its activities under and

	 	49	 		
	 		 	ARTICLE 18	
	 		 	GENERAL INDEMNITY	

pursuant to, among other things, the Participation Agreement) or (ii) after the Termination Date (except if such Claims arise as a result of an act or omission of Lessee which occurred during the Lease Term and are not attributable to any act or omission of an Indemnitee);
(e)    ordinary and usual operating or overhead expenses of any Indemnitee, other than as arising as a result of and during the continuance of an Event of Default;
(f)    in respect of an Indemnitee, a breach by such Indemnitee of any express covenant given to Lessee; or
(g)    the sale, transfer, assignment or other disposition by an Indemnitee of any of its right, title and interest in and to the Aircraft or the Lease, except as a result of the occurrence and continuation of an Event of Default.
For purposes of this Clause 18.5 and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an exemption from the provisions of Section 18.1 in respect of any Claim shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
18.6.     After-Tax Nature of Indemnity. Each indemnity payable pursuant to this Article 18 shall be paid on an After-Tax Basis.
18.7     Contest. Lessee shall be entitled, at its sole cost and expense, acting through counsel acceptable to the respective Indemnitee, (a) in any judicial or administrative proceeding that involves solely a claim for one or more Claims, to assume responsibility for and control thereof, (b) in any judicial or administrative proceeding involving a claim for one or more Claims and other claims related or unrelated to the transactions contemplated by this Lease, to assume responsibility for and control of such Claim or Claims to the extent that the same may be and are severed from such other claims (and each of Lessee and such Indemnitee shall use its commercially reasonable efforts to obtain such severance), and (c) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (i) while a Default or an Event of Default shall have occurred and be continuing, (ii) if such proceedings will involve any reasonable possibility of the sale, forfeiture or loss of, or the creation of any Lien (other than a Lessor’s Lien) on, the Aircraft, any Item of Equipment, this Lease, any other Operative Documents, or any part of the foregoing, (iii) if such Claims relate in any way to the business of any Indemnitee other than the transactions contemplated by this Lease or any of the other Operative Documents, (iv) if such Claims, in the opinion of independent counsel for such Indemnitee reasonably satisfactory to Lessee, have a reasonable possibility of otherwise compromising or jeopardizing any substantial interests of such Indemnitee, or (v) if Lessee shall not have furnished such Indemnitee with an opinion of independent counsel reasonably satisfactory to such Indemnitee to the effect that there exists a meritorious basis for contesting such Claims. The Indemnitee may participate with its own counsel, at its own expense, in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. Lessee shall not without the prior written consent of the relevant Indemnitee enter into a settlement or other compromise with respect to any Claims that may result in admission or culpability on the part of any Indemnitee, otherwise subject any Indemnitee to any civil or criminal penalty or other prejudice any Indemnitee or the Aircraft. If for any reason Lessee shall not be responsible

	 	50	 		
	 		 	ARTICLE 18	
	 		 	GENERAL INDEMNITY	

for and be in control of any contest contemplated in this Section 18.7, Lessee may, so long as no Default or Event of Default shall have occurred and be continuing, nonetheless participate in any such contest, at its sole cost and expense, in a manner reasonably acceptable to the relevant Indemnitee. The Indemnitee shall supply Lessee with such information reasonably requested by Lessee (and to the extent that it is commercially reasonable for the Indemnitee to do so) as is necessary or advisable for Lessee to assume responsibility for and control or participate in any proceeding to the extent permitted by this Section 18.7. As long as no Default or Event of Default has occurred and is continuing, such Indemnitee shall not enter into a settlement or other compromise with respect to any Claims without the prior written consent of Lessee, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified with respect to such Claims under this Section 18.7. Notwithstanding this Section 18.7, no Indemnitee shall be prevented from settling or paying any Claim immediately if required by Law to do so nor from assuming control of and terminating Lessee’s participation in any contest of a Claim if, in such Indemnitee’s judgment, the interest of any Indemnitee may be adversely affected or prejudiced by any delay, act, omission or continued contest by Lessee of such Claim.
18.8.     Survival. The indemnities contained in this Article 18 shall continue in full force and effect notwithstanding the occurrence of the Termination Date, and are expressly made for the benefit of and shall be enforceable by each Indemnitee.

	 	51	 		
	 		 	ARTICLE 18	
	 		 	GENERAL INDEMNITY	

19.	INSURANCE	
19.1.     Obligation to Insure. Throughout the Lease Term, Lessee shall maintain in full force and effect, at its own cost and expense, the Insurances.
19.2.     Liability Insurance. Lessee shall maintain in effect comprehensive third party aircraft liability insurance against bodily injury and property damage losses arising from ground, flight and taxiing exposures, including, but not limited to, passenger legal liability, cargo liability and products liability insurance in the amount set forth in Section 4.1 of Appendix 2B, and in the aggregate with respect to products liability, or such higher amount as Lessee may maintain from time to time on similar aircraft, for any one accident, or series of accidents arising out of any one event, with respect to the Aircraft and Items of Equipment. Such policy shall include war and allied risks in accordance with standard market practice (currently “ The Extended Coverage Endorsement-AVN 52E ”) plus such excess coverage through government indemnity or commercial insurance up to the full limit required herein. Any such liability insurance policy shall not be subject to any deductible amount except with respect to baggage, cargo liability, and hangar keeper’s liability coverage, for which there may not be a deductible in an amount exceeding ***** or such higher amount as may constitute general industry practice and be approved by Lessor in writing from time to time. All Insurances shall:
(a)    name the Additional Insureds as additional insureds;
(b)    be primary without right of contribution from any other insurance which is carried by any Additional Insureds with respect to the Aircraft or any Engine when not installed on the Aircraft; and
(c)    each liability policy shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
19.3.     Contractual Liability; Tail Coverage for Liability Insurance. The Insurances referred to in Section 19.2 shall:
(a)    include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 18;
(b)    for a period of two (2) years after the Termination Date, at Lessee’s cost and expense, continue to name each Indemnitee as additional insureds; and
(c)    should Lessor and/or Owner transfer their interests in the Aircraft and this Lease pursuant to and in accordance with the provisions of Article 25, for a period of two (2) years from the effective date of such transfer continue to name as additional insured(s) the transferring Lessor (and the relevant transferring Owner and Financing Parties and other related Indemnitees).
19.4.     Insurance Against Loss or Damage to the Items of Equipment.
(a)    Lessee shall maintain in effect with respect to the loss of or damage to the Items of Equipment:
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	52	 		
	 		 	ARTICLE 19	
	 		 	INSURANCE	

(i)    all-risk ground, flight and ingestion aircraft hull insurance for the Agreed Value set forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine Agreed Value set forth in Appendix 2B, Section 4.3 covering each Engine when not installed on the Airframe and all risk insurance on a full replacement cost basis with respect to the Landing Gear, APU and Parts while not installed on or in the Aircraft, and
(ii)    war risk insurance including, but not limited to, war, acts of terrorism, hijacking, confiscation, including confiscation by the Government of Registry, expropriation, nationalisation, seizure and where generally procured by carriers similarly situated with Lessee, further including coverage for electromagnetic, chemical and biological risks as the same is available on the standard commercial aviation insurance markets upon commercially reasonably terms.
(b)    All such insurance shall be payable in Dollars and shall be, with respect to the Aircraft and each Engine, on an “agreed value” basis. Any hull insurance carried in accordance with this Section 19.4 shall not contain any provision for self-insured amounts or a deductible that exceeds the deductible amount appearing in Appendix 2B. Any policies carried in accordance with this Section 19.4 shall designate Security Trustee, as sole loss payee for an amount equal to the Agreed Value, on behalf of the Additional Insureds as their respective interests may appear, and Lessor as lessor of the Aircraft covered thereby.
(c)     Installation of Other Engines on the Aircraft. If Lessee installs an engine not owned by Owner on the Aircraft, either ( x ) Lessee’s hull insurance on the Aircraft must automatically increase to such higher amount as is necessary in order to satisfy the requirement of this Section 19.4 that Owner receive the Agreed Value in the event of an Event of Loss and the amount required by the third party engine owner or ( y ) separate additional insurance on such engine will attach in order to satisfy separately the requirements of Lessee to such third party engine owner.
(d)     Installation of Engines on other Airframes. If Lessee installs or permits the installation of an Engine on an airframe that is not the Airframe, either ( x ) the hull insurance maintained on such airframe must automatically increase by an amount equal to the Engine Agreed Value so that Owner receives the Engine Agreed Value in the event of an Event of Loss with respect to such Engine while installed on such airframe, or ( y ) separate additional insurance on such Engine will attach in order to satisfy separately the requirements of Lessee with respect to such Engine.
(e)     Additional Lessee Coverage. Lessee may obtain additional hull insurance on the Aircraft, over and above the Agreed Value hereunder, provided that it does not adversely affect the coverage required to be maintained hereunder.
19.5.     Reinsurance. If any of the risks required to be insured under this Article 19 are not placed in the manner required, then such risks shall be reinsured and shall:
(a)    be on the same terms as the primary insurance required hereunder;

	 	53	 		
	 		 	ARTICLE 19	
	 		 	INSURANCE	

(b)    be at levels of not ***** of insurances required to be maintained under this Article 19;
(c)    contain a “cut through” clause providing that, in the event of any claim arising under such reinsurance, the reinsurer shall (in lieu of payment to the primary insurer or its successors) pay to the relevant Indemnitee and/or loss payee, as applicable, that portion of any claim which the reinsurer would otherwise be liable to pay the primary insurer or its successors;
(d)    provide for payment to be made directly to the relevant Indemnitee notwithstanding ( x ) any bankruptcy, insolvency, examinership, liquidation, administration, receivership, dissolution or other similar proceeding with respect to the primary insurer and/or ( y ) that the primary insurer has made no payment under the primary policies; and
(e)    be evidenced by a reinsurance certificate and supported by a broker’s letter of undertaking reasonably satisfactory to Lessor.
19.6.     Requirements for All Insurances. All Insurances shall:
(a)    be maintained in effect with insurers reasonably acceptable to Lessor, and, if applicable, reinsurers reasonably acceptable to Lessor, of recognised responsibility, specialising and normally participating in the international aviation insurance market and carrying and maintaining an A.M. Best rating of not less than A-, Class VII;
(b)    provide that in respect of the interests of the Additional Insureds such policies of insurance shall insure the Additional Insureds regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by Lessee or any other Person;
(c)    provide that the Additional Insureds shall have no responsibility for any premiums, assessments, warranties or representations in connection with such insurance;
(d)    include the geographic limits of all territories over which the Aircraft and any Engine will be operated;
(e)    waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against the Additional Insureds and their respective successors, assigns, agents, officers, employees and servants, other than set-off for unpaid premiums in respect of the Aircraft; and
(f)    provide that if the insurers cancel such insurance for any reason whatever, or the same is allowed to lapse for nonpayment of premium, or if there is any material change in policy terms and conditions, such cancellation, lapse or change shall not be effective until thirty (30) days after receipt by Lessee’s designated broker of written notice from such insurers of such cancellation, lapse or change (ten (10) days for nonpayment of premium and seven (7) days for cancellation with respect to war risk and allied perils insurance or such shorter period as shall be customary on the London market for such insurance in such area of the world). Lessee shall cause such designated broker to immediately notify the Additional Insureds of any such notice of cancellation or termination.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	54	 		
	 		 	ARTICLE 19	
	 		 	INSURANCE	

19.7.     Reports. Lessee shall cause its brokers to advise Lessor in writing promptly of any default in the payment of any premium. On or before the Delivery Date, and thereafter on or prior to each renewal or replacement by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more original certificates of insurance or reinsurance and a broker’s letter of undertaking, each executed and delivered by an insurance broker appointed by Lessee, and, if applicable, a certified English translation thereof, reasonably satisfactory to Lessor, which shall describe in reasonable detail the insurance carried on the Aircraft. Lessee will cause its insurance brokers to identify to Lessor the insurers and reinsurers and shall advise Lessor in writing at least thirty (30) days (seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage and ten (10) days for reason of non-payment of premiums) prior to the cancellation by the underwriters of any such insurance or as soon as possible in respect of “non-renewal” or automatic termination for war risk insurance required hereunder. On or prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with faxed or other electronic confirmation from Lessee’s insurance brokers certifying that renewal certificates of insurance evidencing the renewal or replacement of such insurance pursuant to the provisions of this Article 19 will be issued effective as of the termination date of the prior certificate of insurance coverage. Within fifteen (15) days after such renewal, Lessee will furnish to Lessor an original or electronic certificate of such insurance coverage from such insurance broker.
19.8.     Assignee of Lessor’s and/or Owner’s Interests. If Lessor, Owner, Owner Participant and/or any Financing Party assigns, in accordance with the provisions of Article 25, all or any of its rights or otherwise disposes of any interest in the Aircraft or this Lease to any other Person, Lessee shall, upon request, procure that such Person shall ( x ) be named as loss payee in substitution for Lessor, Owner, Owner Participant and/or such Financing Party, as applicable and/or as additional insured in the policies effected hereunder and ( y ) enjoy the same rights and insurance enjoyed by Lessor, Owner, Owner Participant and such Financing Party, as applicable, under such policies from and after the effective date of such assignment or disposition.
19.9.     Failure to Insure. If at any time the Insurances are not maintained by Lessee in compliance with this Article 19, Lessor, Owner, Owner Participant and any Financing Party shall be entitled but not bound to do any of the following (without prejudice to any of the rights which any of them may have under the Operative Documents by reason of such failure):
(a)    upon giving notice thereof to Lessee, to pay any premiums due or to effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor or, if applicable, any Financing Party considers appropriate (and Lessee shall upon demand reimburse Lessor or if applicable, the relevant Financing Party in full for any amount so expended in that connection); and/or
(b)    at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), subject to the Aircraft being adequately insured, proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.
19.10.     Lessor’s Right to Insure. Lessee acknowledges that each of Lessor, Owner and each Financing Party has an insurable interest in the Aircraft and each Item of Equipment and may, at its own expense, obtain insurance or contingent insurance in its own name with respect to such insurable interest. Lessee shall provide to Lessor, Owner

	 	55	 		
	 		 	ARTICLE 19	
	 		 	INSURANCE	

and each Financing Party all reasonable assistance as from time to time requested by it in order to adequately protect such insurable interest. Neither Lessor, Owner nor any Financing Party shall maintain any such insurance that would prejudice the insurance maintained by Lessee pursuant to this Lease. Lessee shall have no right to any proceeds of any insurance policies maintained by Lessor.
19.11.     Changes to Insurance Practice. If there is a material change in the generally accepted industry-wide practice with regard to the insurance of aircraft by air carriers operating similar aircraft on routes similar to Lessee or any material change with respect to the insurance of aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of Insurances required to be effected under this Article 19) such that Lessor shall, after consultation with Lessee and Lessee’s designated reinsurance or insurance brokers, be of the reasonable opinion that the Insurances required pursuant to this Article 19 are insufficient to protect the respective interests of Lessor and the other Indemnitees (bearing in mind the nature and route of operation of the Aircraft), the insurance requirements set forth in this Article 19 shall be amended, as soon as reasonably practicable following notice by Lessor to Lessee, so as to include such additional or varied requirements as may be reasonably necessary to ensure that the insurance as so varied shall provide comparable protection to Lessor and the other Indemnitees to that which it would have done if such change had not occurred. In such circumstances, Lessor will consult in good faith with Lessee in relation to any proposed change.
19.12.     AVN 67B or AVN 67C. Notwithstanding anything to the contrary contained in this Article 19, Lessor shall accept the terms of AVN 67B or AVN 67C (“ Airline Finance/Lease Contract Endorsement ”) where such endorsement is contrary to the terms of this Lease as long as such endorsement is customary in the major international insurance markets for commercial passenger airlines.

	 	56	 		
	 		 	ARTICLE 19	
	 		 	INSURANCE	

20.	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	
20.1.     Risk of Loss and Damage. Following Delivery, Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and each Item of Equipment and of any other occurrence which shall deprive Lessee of the Aircraft or any Item of Equipment for the time being of the use, possession or enjoyment thereof including, without limitation, any resulting loss in value of the Aircraft or any Item of Equipment due to any of the aforementioned circumstances (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
20.2.     Notification of Loss and Damage.
(a)    Lessee shall give Lessor written notice of and information regarding any Event of Loss as promptly as possible, and in any event within two (2) Business Days of the occurrence of such Event of Loss.
(b)    Each of Lessee and Lessor shall supply to the other all necessary information, documentation and assistance which may reasonably be required in connection with making any claim under the Insurances.
20.3.     Event of Loss – Aircraft. If an Event of Loss occurs in respect of the Aircraft (with or without the Engines), Lessee shall pay, or procure that the insurer pays, to Owner (or to any Financing Party named as loss payee under the Insurances) as soon as reasonably practicable but in any event within sixty (60) days after the Event of Loss Date or, if earlier, the date such insurance proceeds are received, the Agreed Value as at the Event of Loss Date (or such earlier date, as the case may be) together with all Rent and other amounts then due and payable under the Operative Documents.
(a)    The Net Event of Loss Proceeds received by Owner (or such other person as may be designated as loss payee) from Lessee or the insurer pursuant to this Article 20 shall be applied as follows:
(i)    first, in discharge of the Agreed Value;
(ii)    second, in discharge of any unpaid Rent and any other unpaid amounts (other than the Agreed Value) due and payable by Lessee under the Operative Documents and any Related Lease; and
(iii)    third, payment of the balance, if any, to Lessee.
(b)    Lessee shall continue to pay Basic Rent on the days and in the amounts required under this Lease notwithstanding any such Event of Loss provided that no further installments of Basic Rent shall become due after the date on which all sums due under this Section 20.3 shall

	 	57	 		
	 		 	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT	
	 		 	AND ITEMS OF EQUIPMENT	

have been paid in full, and on such date the Lease Term shall terminate and Owner shall, at Lessee’s cost and subject to the rights (if any) of the insurer cause title to the Aircraft (and to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the case may be) on a quitclaim basis, without warranty or recourse, except that the same shall be free and clear of all rights of Lessor and Owner and Lessor’s Liens without representation, recourse to or warranty by Lessor, Owner or any Financing Party and, provided no Default or Event of Default has occurred and is continuing or upon a complete cure thereof, Lessor shall thereafter return the Security Deposit to Lessee in accordance with Section 4.5 and shall return ***** of the remaining balance of the Maintenance Reserves to Lessee.
20.4.     Event of Loss – Engine or APU. Upon the occurrence of an Event of Loss with respect to an Engine or APU, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days after the Event of Loss Date, convey to Owner, free and clear of all Liens, title to another engine or, as applicable, auxiliary power unit of the same or an improved model and suitable for installation and use on the Airframe.
(a)     Replacement Engine. The replacement engine shall have a value and utility at least equal to, and be in as good operating condition as, the Engine with respect to which such Event of Loss shall have occurred, based on but not limited to (i) Cycles accumulated on each Engine Life Limited Part, (ii) Flight Hours accumulated since new (and accumulated since completion of the most recent heavy maintenance shop visit that completed a workscope at least equivalent to that of an Engine Restoration if an Engine Restoration had previously been accomplished on the Engine that suffered such Event of Loss), and (iii) Flight Hours and Cycles accumulated since new (and accumulated since the most recent restoration or refurbishment of each engine module with respect to any module for which a restoration or refurbishment had previously been accomplished on the Engine that suffered such Event of Loss), assuming such Engine was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b)     Replacement APU. The replacement auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the APU with respect to which such Event of Loss shall have occurred, based on but not limited to (i) APU Hours (and APU Cycles if applicable) accumulated since new with respect to each APU Life Limited Part (as applicable) and (ii) APU Hours accumulated since new (and since the most recent Overhaul for each auxiliary power unit module if an Overhaul had previously been accomplished on the APU that suffered such Event of Loss), assuming such APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c)     Lessor Inspection. Lessee shall identify to Lessor a candidate replacement engine or auxiliary power unit (as applicable) and Lessor may inspect such candidate replacement engine or auxiliary power unit, which shall include, at Lessor’s option, (i) a full borescope inspection of the compressor, turbine and combustion sections of the replacement engine or auxiliary power unit and (ii) a records inspection, and the results of each such inspection must be satisfactory to Lessor.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	58	 		
	 		 	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT	
	 		 	AND ITEMS OF EQUIPMENT	

(d)     Replacement Subject to Lease. Upon acceptance by Lessor, such replacement engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or, as applicable, an “APU”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement Engine or APU shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Engine or APU replaced thereby.
20.5.     Event of Loss – Landing Gear. Upon the occurrence of an Event of Loss with respect to a Landing Gear, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith replace such Landing Gear as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days from the Event of Loss Date, by duly conveying to Owner, free and clear of all Liens, title to another landing gear of the same or an improved model and suitable for installation and use on the Airframe.
(a)     Replacement Landing Gear. The replacement landing gear shall have a value and utility at least equal to, and be in as good operating condition as, the Landing Gear with respect to which such Event of Loss shall have occurred, based on but not limited to (i) the maximum weight certified for such landing gear; (ii) Flight Hours, Cycles and calendar time accumulated since new with respect to each Landing Gear Life Limited Part (as applicable), and (iii) Flight Hours, Cycles and calendar time accumulated since new (and accumulated since Overhaul if an Overhaul had previously been accomplished on the Landing Gear that suffered such Event of Loss), assuming such Landing Gear was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b)     Lessor Inspection. Lessee shall identify to Lessor a candidate replacement landing gear and Lessor may inspect such replacement landing gear, which shall include, at Lessor’s option, a records inspection, and the results of such inspection must be satisfactory to Lessor.
(c)     Replacement Subject to Lease. Upon acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing Gear”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement landing gear shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Landing Gear replaced thereby.
20.6.     Repairable Damage.
(a)    In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, subject to no Event of Default having occurred and continuing, all insurance proceeds which may be paid or payable by the insurers of the Aircraft shall, subject to (x)  receipt by Lessor of (A) a repair estimate acceptable to Lessor, (B) evidence of completion of such repair by an Approved Maintenance Organisation, provided such evidence and the Approved Maintenance Organisation are acceptable to Lessor and (C) a true and correct copy of

	 	59	 		
	 		 	ARTICLE 20	
	 		 	LOSS AND DAMAGE TO THE AIRCRAFT	
	 		 	AND ITEMS OF EQUIPMENT	

the adjuster’s claim report, and ( y ) receipt by Lessee and the insurers of Lessor’s prior written approval for the release of such proceeds (such approval not to be unreasonably withheld), be paid to:
(i)    Lessee in respect of all loss or damage Lessee has made good (or caused to be made good), or
(ii)    the repairer for the cost of the completed repair works, or
(iii)    to the vendor of any new or replacement Item of Equipment for the cost of such new or replacement Item of Equipment;
provided that Lessee shall have furnished to Lessor evidence satisfactory to Lessor, that the repairs have been fully completed and that all invoices in relation thereto have been paid and all such repairs have been performed in accordance with the terms of this Lease. Any such insurance proceeds payable following the occurrence and during the continuation of an Event of Default (or not otherwise applied in the manner described above) shall be applied in such manner as Lessor may direct, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
(b)    In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, if such insurance proceeds paid in respect thereof are insufficient to pay the cost or estimated cost of making good or repairing such damage or the cost of purchasing a replacement engine, auxiliary power unit, landing gear or part if the same is beyond economic repair, Lessee will pay the deficiency.
20.7.     Documents Loss. Upon the occurrence of a Documents Loss under circumstances in which there has not occurred an Event of Loss with respect to an Item of Equipment to which such Lost Documents relate, Lessee shall within thirty (30) days from the date of such loss notify Lessor in writing and thereafter replace such Lost Documents (such replacement documents hereinafter “ Reconstructed Documents ”) by:
(a)    obtaining copies of such Lost Documents from the Approved Maintenance Organisation that accomplished the maintenance covered by the respective Lost Documents, each such copy to be certified by the Quality Assurance Department of the respective Approved Maintenance Organisation as to being a true copy of the respective Lost Document, or
(b)    the re-accomplishment of Overhauls and Tasks specified in such Lost Documents as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) sixty (60) days following the Documents Loss, ( y ) the Scheduled Termination Date, and ( z ) the Termination Date. The Reconstructed Documents shall comply with all requirements for Required Approvals with respect to the Item of Equipment to which such Lost Documents relate and shall be sufficient to document the then current maintenance status of the affected Items of Equipment. Lessor shall be entitled to inspect the Reconstructed Documents and the results of each such inspection must be satisfactory to Lessor, acting reasonably. Upon acceptance by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined herein for all purposes hereunder.

	 	60	 		
	 		 	ARTICLE 20	
	 		 	LOSS AND DAMAGE TO THE AIRCRAFT	
	 		 	AND ITEMS OF EQUIPMENT	

20.8.     Application of Payments from Governmental Authorities. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft or the Airframe, shall be retained by Lessor or Owner, if received by Lessor or Owner, or promptly paid over to Lessor, if received by Lessee, up to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due to Lessor or Owner hereunder or under any other Operative Documents or any Related Lease). At such time as Lessor or Owner has received such amounts in full, Lessor shall promptly remit (or cause Owner to promptly remit) the excess, if any, of such payments to Lessee. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting solely from the condemnation, confiscation or seizure of, or requisition of title to or use of any Engine shall be paid over to, or retained by, Lessee, provided that Lessee shall have fully performed its obligations under this Article 20 with respect to such Engine. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to a requisition of use during the Lease Term of the Aircraft, the Airframe or any of the Engines, which requisition does not constitute an Event of Loss, shall, so long as no Default or Event of Default has occurred and is continuing, be paid to, or retained by Lessee, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
20.9.     No Lessor Liability to Repair or Replace Following Delivery. Lessor will not be liable for any expense in repairing or replacing any Item of Equipment or be liable to supply another aircraft or any item of equipment in lieu of the Aircraft or any Item of Equipment if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use or required to produce or provide Reconstructed Documents.

	 	61	 		
	 		 	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT	
	 		 	AND ITEMS OF EQUIPMENT	

21.	TAXES; TAX INDEMNITY	
21.1.     Indemnity.
(a)     Indemnity. Except as provided in Section 21.1(b), Lessee shall pay (without duplication as among Lessor, Trust Company and Owner, to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee)), and shall indemnify and hold harmless each Indemnitee, for and against, all Taxes arising or resulting from or otherwise relating to any Item of Equipment, any Operative Document, or any of the transactions and activities provided for or contemplated in, or permitted by, the Operative Documents, including without limitation, the purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration, possession, use, operation, landing, take-off, storage, location, presence, maintenance, alteration, modification, improvement, servicing, repair, overhaul, pooling, interchange, exchange, substitution, replacement, loss, return, sale or other disposition of, or any damage, addition or transfer of title to, any Item of Equipment or any interest therein, the execution, delivery, filing, registration, recording, presence, performance of, payment under or enforcement of, or the cure of any default or the exercise of any remedy under, any Operative Document or any other documents executed from time to time pursuant to any Operative Document (regardless of how or when such Taxes are imposed or assessed, whether imposed on or assessed against any Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest therein or any use thereof, or otherwise) and all costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements) paid or incurred by any Indemnitee with respect to any Tax for which Lessee is required to indemnify such Indemnitee pursuant to this Article 21 (an “ Indemnified Tax ”) or in connection with the enforcement of this Article 21.
(b)     Excluded Taxes. Lessee shall have no obligation under Section 21.1(a) to indemnify an Indemnitee for the following Taxes (each a “ Non-Indemnified Tax ”):
(i)    any Tax imposed on or measured by the total net income, receipts, capital, net worth, franchise of, or conduct of business by, such Indemnitee except to the extent that such Tax would not have been payable in the absence of (A) the registration, use, presence or other connection of any Item of Equipment in or with, or any act or omission of Lessee or any Affiliate, agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the inaccuracy or breach of any of the representations, warranties, covenants or agreements of Lessee in the Operative Documents, or (C) an Event of Default, provided that the exclusion in this clause (i) shall not apply to any Tax that is, or is in the nature of, a sales, use, rental, value added, goods and services, consumption, service, transaction privilege, stamp, documentary, transfer, license, excise, withholding or property Tax;
(ii)    any Tax imposed on or with respect to any sale or other transfer (x) by such Indemnitee of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2, or (y) by Owner Participant of the Beneficial Interest, provided that the exclusion in this clause (ii) shall not apply to any sale or transfer that occurs (A) in connection with or as a result of a Default, an Event of Default, an Event of Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of any Item of Equipment, or (B) at Lessee’s request, or (C) pursuant to a requirement in any Operative Document or any applicable Law; or

	 	62	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

(iii)    any Tax to the extent such Tax is caused by, and would not have been incurred but for, any activities of an Indemnitee in the jurisdiction imposing such Tax that are unrelated to any Indemnitee’s dealings with Lessee or any Affiliate of Lessee, unrelated to the transactions contemplated in the Operative Documents, unrelated to any Related Lease, and unrelated to use of the Aircraft (or any aircraft subject to a Related Lease) or any part thereof by Lessee or any Affiliate of Lessee or any agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any such Aircraft (or any such aircraft) or any part thereof;
(iv)    (A)    any Tax to the extent imposed with respect to any event or period occurring before the date of this Agreement, except that the exclusion in this subclause (iv)(A) shall not apply to any such Tax which arises from any act or omission of Lessee or any Affiliate of Lessee or any director, officer, employee, agent or representative of Lessee or any Affiliate of Lessee;
(B)    any Tax to the extent imposed with respect to any act or event or period of time occurring after the Aircraft has been returned by Lessee to Lessor in full compliance with Article 22 and is no longer subject to this Lease, provided that the exclusion in this subclause (iv)(B) shall not apply to any Tax that (1) relates to any act or event occurring or matter arising prior to or concurrently with the return of the Aircraft or (2) arises from or in connection with (x) an Event of Default or (y) any payment by or on account of any obligation of Lessee under the Operative Documents to which it is a party; or
(C)    the performance of any other obligation of Lessee under the Operative Documents to which it is a party;
(v)    any penalty, fine, addition to tax or interest imposed on such Indemnitee to the extent that such penalty, fine, addition to tax or interest is caused by, and would not have been payable but for:
(A)    the failure by such Indemnitee to file any Tax return which such Indemnitee is required by applicable Law to file with respect to any Indemnified Tax before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax return, or
(B)    the failure by such Indemnitee to pay any Tax which such Indemnitee is required by applicable Law to pay before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax payment,
unless (in each case) such failure is a result of:
(U)    a failure by Lessee to provide as soon as reasonably practicable (and in any event within 60 days) after receipt of such Indemnitee’s request therefor, any information or documents that are reasonably requested by such Indemnitee and are in the possession or reasonable control of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or

	 	63	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

(V)    the willful misconduct or gross negligence of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or
(W)    a failure by Lessee to perform any of its obligations under this Lease, or
(X)    an Event of Default, or
(Y)    any circumstances beyond such Indemnitee’s reasonable control in any jurisdiction (other than the jurisdiction under the Laws of which such Indemnitee is incorporated or otherwise created and any jurisdiction in which an office or other fixed place of business of such Indemnitee is located) in which (1) any Item of Equipment is registered or used and (2) such Tax return is required to be filed or such Tax payment is required to be paid, or
(Z)    any combination of the foregoing;
(vi)    any Tax to the extent that such Tax would not have been payable but for a breach by such Indemnitee of any obligation of such Indemnitee under Section 21.3 or 21.4 hereof;
(vii)    any Tax imposed on an Indemnitee to the extent such Tax is caused directly by, and would not have been incurred but for (A) the gross negligence or willful misconduct of any Indemnitee or (B) the inaccuracy or breach of any representation, warranty, covenant or agreement of such Indemnitee in this Lease or (C) the existence or enforcement of a Lessor’s Lien;
(viii)    in the case of a Person that becomes the Lessor or Owner Participant after the Delivery Date by acquiring its interest in the Aircraft and the Lease by sale, assignment or other transfer from a prior Lessor pursuant to Section 25.2, Taxes if and to the extent that the aggregate amount of such Taxes exceeds the aggregate amount of Taxes that would have been imposed on or payable by the transferor Lessor or Owner Participant and for which Lessee would have been required to indemnify the transferor Lessor or Owner Participant pursuant to this Article 21, determined under applicable Laws in effect on the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant (the “Transfer Date”) (or enacted prior to the Transfer Date and effective from and after the first anniversary of the Transfer Date if as of the Transfer Date the effect of such Laws on Lessee can be reasonably determined), provided that the exclusion in this clause (viii) shall not apply to a transferee Lessor or Owner Participant that acquires its interest in the Aircraft pursuant to a transfer that occurs (A) in connection with or as a result of an Event of Default or (B) at Lessee’s request or (C) pursuant to a requirement in any Operative Document or any applicable Law and (for the avoidance of doubt) shall not apply to any Tax to the extent incurred or increased as a result of a change in any Law after the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant;
(ix)    any Tax imposed on an Indemnitee to the extent that such Tax would not have been imposed but for an amendment to any Operative Document to which Lessee is not a party without the prior written consent of Lessee, unless such amendment occurs in connection with and during the continuance of an Event of Default or is required by applicable Law or is required by any Operative Document.

	 	64	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

For the avoidance of doubt and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an Excluded Tax shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
(c)     No Reduction for Withholding. Lessee agrees that all amounts payable by Lessee (or by any other Person on account of any obligation of Lessee) pursuant to the Operative Documents shall be paid without any deduction or withholding on account of any Taxes, monetary transfer fees, or other charges or withholdings of any nature, except to the extent that the deduction or withholding of any Tax is required by applicable Law, in which event Lessee shall (i) pay to the Person entitled to receive such payment (the “ Payee ”) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any withholding with respect to such additional amount), an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made and (ii) deliver to Lessor within sixty (60) days after the date of such payment an official receipt of the relevant taxing authority (or, if an official receipt is not obtainable, other documentary evidence satisfactory to Lessor) showing that Lessee paid to such taxing authority the full amount of the Tax required to be deducted or withheld. If Lessee pays any additional amount to Lessor pursuant to clause (i) of the preceding sentence for any withholding Tax that is an Excluded Tax, then Lessor shall repay such additional amount to Lessee within thirty (30) days after receipt of Lessee’s written request therefor accompanied by the official receipt or other evidence of payment described in clause (ii) of the preceding sentence and a written statement describing in reasonable detail the reason that such withholding Tax is an Excluded Tax.
21.2.     VAT.
(a)    All amounts payable by Lessee pursuant to the Operative Documents are exclusive of VAT. Lessor and Lessee acknowledge and agree that any VAT that is required by any applicable Law to be paid with respect to any of the transactions, activities or payments contemplated in the Operative Documents is a Tax to which the provisions of this Article 21 apply.
(b)    If requested by Lessor, Lessee shall deliver to Lessor on the Delivery Date and, thereafter, within thirty (30) days after receipt of Lessor’s written request made not more than annually during the Lease Term, the following documents to enable Lessor to comply with applicable Laws relating to VAT:
(i)    a certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or
(ii)    an Irish Revenue Form VAT 60B (or applicable successor form) with respect to this Lease.
21.3.     Lessor Tax Certificates. Prior to the first payment of Basic Rent hereunder, and thereafter as soon as reasonably practicable after receipt of Lessee’s written request therefor (but not more frequently than once within any 12-month period):

	 	65	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

(i)    in the case of the Person that is Lessor on the date hereof, Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority confirming that Lessor is a resident of Ireland for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of Lessor as a resident of Ireland for the purposes of taxation; or
(ii)    in the case of a Person that acquires its interest in this Lease and the Aircraft by transfer from a prior Lessor, such Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority of the country in which the principal place of business of such Lessor is located confirming that such Lessor is a resident of such country for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of such Lessor as a resident of such country for the purposes of taxation.
21.4.     Withholding Tax Exemption Certificates. Each Indemnitee will deliver to Lessee, as soon as reasonably practicable after receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English) such forms, certifications, and other documents as (i) such Indemnitee is entitled under applicable Law to execute or obtain and (ii) are required by applicable Law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Lease without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable Law to withhold in the absence of such document, provided that in the case of any such document that must be executed or endorsed by any Governmental Authority or other taxing authority, the failure of such Indemnitee or Lessee to receive such document from such Governmental Authority or other taxing authority within a reasonable time shall not be deemed to be a failure to comply with this Section 21.4 so long as such Indemnitee is using commercially reasonable efforts to obtain such document, and provided, further, that no Indemnitee shall have any obligation to deliver any document requested by Lessee pursuant to this Section 21.4 if such Indemnitee determines in good faith that delivering such document would result in a risk that any Indemnitee could incur a liability, loss, cost or expense for which Lessee is not required by any Operative Document to indemnify such Indemnitee unless Lessee delivers to such Indemnitee a written undertaking to indemnify such Indemnitee on an After-Tax Basis for any such liability, loss, cost or expense in a manner reasonably satisfactory to such Indemnitee.
21.5.     Tax Filings; Information.
(a)    Unless otherwise directed or agreed in writing by Lessor, Lessee shall properly prepare and timely file all reports, returns, declarations and other documents (each a “ Tax Document ”) that are required by applicable Law to be filed with any Governmental Authority or other taxing authority with respect to each Indemnified Tax.
(b)    Lessee shall (i) deliver to Lessor within thirty (30) days after receipt of Lessor’s written request, a certificate of an officer of Lessee, in form and substance satisfactory to Lessor, demonstrating compliance with Lessee’s covenants in Section 11.6 during the period or periods specified in Lessor’s written request, and (ii) deliver to each Indemnitee as soon as reasonably practicable (and in any event within thirty (30) days) after receipt of such Indemnitee’s written request therefor, such information and copies of such records and other documents (including, without limitation, the flight log for the Aircraft) maintained or required to be maintained by Lessee or by any other user of any Item of Equipment in the regular course of its business as such Indemnitee may request from time to time to enable such Indemnitee to comply with applicable Tax reporting, audit, audit dispute resolution, and litigation requirements, and if requested by any Indemnitee, make such information, records and other documents available for inspection by such Indemnitee or its authorised representatives.

	 	66	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

21.6.     Payment of Taxes and Indemnities.
(a)    To the extent required or permitted by applicable Law, Lessee shall pay each Indemnified Tax when due directly to the proper taxing authority, unless otherwise directed or agreed in writing by Lessor.
(b)    Any indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days after the date on which Lessee receives such Indemnitee’s written demand therefor (which demand shall provide a description in reasonable detail of the applicable Indemnified Taxes and the calculation of the amount of the indemnity payment demanded).
(c)    All amounts payable by Lessee pursuant to this Article 21 shall be paid on an After-Tax Basis.
21.7.     Contest.
(a)    If any Indemnitee receives a written claim from any taxing authority for any Indemnified Tax (a “ Tax Claim ”), such Indemnitee shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim.
(b)    If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment of such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a refund thereof), and such Indemnitee shall not settle or compromise such Tax Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such Tax Claim without the prior written consent of Lessee (which consent shall not be unreasonably withheld), provided that such Indemnitee shall have the right to refuse to begin or continue (or to permit Lessee to begin or continue) the contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (y) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements).

	 	67	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

(c)    An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest:
(i)    no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing;
(ii)    contesting such Tax Claim would not, in the opinion of Lessor, result in any material reputational risk for any Indemnitee, any risk of criminal or civil penalty, or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein;
(iii)    the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if the Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, the sum of (A) the amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency);
(iv)    if such Indemnitee decides to contest such Tax Claim by paying the Indemnified Tax that is the subject of such Tax Claim and taking action to obtain a refund thereof, Lessee shall have made an interest-free advance to such Indemnitee in an amount equal to the amount of the Indemnified Tax and shall have delivered to such Indemnitee a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse Tax consequences to such Indemnitee or any of its Affiliates resulting from such interest-free advance;
(v)    Lessee shall be paying, on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements);
(vi)    if requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and
(vii)    if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	68	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim.
(d)    If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “ Tax Saving ”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “ Refund ”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of:
 
 	(1)	the lesser of (x) the amount of such Tax Saving or Refund (as the case may be) minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such Refund or Tax Saving, or (y) the amount of the Indemnified Tax or indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus	
 
 	(2)	the amount of interest (if any) received by such Indemnitee on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such interest, provided that such Indemnitee shall not thereby be in a less favorable position than it would have been in if the Indemnified Tax had not been paid or incurred. A written statement of such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and interest shall be final and conclusive, except for any manifest error.	
(e)    Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that are reasonably requested by Lessee and are in the possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax pursuant to this Section 21.7, provided, however, that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration, opinion or other document or information relating solely to one or more Excluded Taxes or (ii) in the case of any return, report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration, opinion or other document or information that relates to Excluded Taxes.
(f)    Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Indemnitee pursuant to Section 21.1, without regard to the exclusions in Section 21.1(b) and without regard to the contest provisions of Sections 21.7(a) and 21.7(b).

	 	69	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

21.8.     Survival. The respective obligations of Lessee and Lessor under this Article 21 shall remain in full force and effect, notwithstanding the occurrence of the Termination Date.
21.9.     Change in Circumstances; Mitigation. If Lessee incurs an indemnity liability under Section 21.1(a) or 21.1(c) or if it becomes reasonably foreseeable that Lessee would (but for this Section 21.9) incur an indemnity liability under Section 21.1(a) or 21.1(c), then if requested by Lessee in writing, Lessor shall consult with Lessee in good faith with a view to restructuring the transactions contemplated in this Lease so that the indemnity liability can be avoided or minimized, provided that no Indemnitee shall have any obligation to take any action pursuant to this Section 21.9 if such Indemnitee determines in good faith that taking such action may result in a material economic, legal or regulatory disadvantage to such Indemnitee or any material reputational risk for such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee (as invoiced by Lessor or such other Indemnitee to Lessee and supported by evidence of such cost reasonably acceptable to Lessee), in connection with the consideration, negotiation, documentation, or closing of any restructuring requested by Lessee pursuant to this Section 21.9.

	 	70	 		
	 		 	ARTICLE 21	
	 		 	TAXES; TAX INDEMNITY	

22.	RETURN OF AIRCRAFT	
22.1.     Time and Place. On the Scheduled Termination Date (or, if applicable, the Termination Date if such date is different than the Scheduled Termination Date) and unless the Aircraft has suffered an Event of Loss, Lessee, at its own expense, shall return the Aircraft to Lessor at the Redelivery Location. Lessor and Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any exceptions thereto, by executing a Return Acceptance Certificate. Unless a Default or an Event of Default shall have occurred and be continuing or unless this Lease shall have been cancelled by Lessor pursuant to Article 24, upon such execution and delivery, this Lease shall terminate, with neither party hereto having any further liability to the other hereunder except for those Obligations which specifically survive the expiration, cancellation or termination of this Lease or as are otherwise reserved in accordance with such Return Acceptance Certificate. If an Event of Default occurs by Lessee failing to complete Return on the Scheduled Termination Date or if an Event of Default occurs prior to or after the Scheduled Termination Date and Lessor exercises its remedy to thereafter repossess the Aircraft, Lessee is nonetheless obligated to comply, and to have the Aircraft comply, with the return requirements set forth in this Article 22 on the date of actual Return or repossession by Lessor.
22.2.     Condition. Upon return of the Aircraft pursuant to Section 22.1, Lessee shall comply with the requirements of Appendix 2E and shall return the Aircraft in a condition in compliance with the provisions of this Lease, including this Article 22 and Appendix 2E.
22.3.     Lessee’s Continuing Obligations.
(a)    If Lessee shall, for any reason whatsoever, fail to return the Aircraft in a timely manner in the condition specified in this Lease, the Obligations of Lessee shall continue and the Lease Term shall be deemed to be extended, day-to-day, until Return of the Aircraft; provided that this paragraph shall not be construed as permitting Lessee to fail to meet its Obligation to return the Aircraft in accordance with the requirements of this Lease and shall not constitute a waiver by Lessor of any Default or Event of Default arising out of such failure or prejudice the rights of Lessor under Article 24 with respect thereto.
(b)    If the Aircraft is not returned to Lessor in accordance with this Lease on the Scheduled Termination Date:
(i)    with effect from and including the Scheduled Termination Date, Fixed Rent shall continue to be payable at the daily rate of one-thirtieth (1/30) of the Fixed Rent otherwise payable hereunder; and with effect from and including the fifteenth (15 th ) day following the Scheduled Termination Date, Fixed Rent shall be payable at the daily rate of one-twentieth (1/20) of the Fixed Rent otherwise payable hereunder; and with effect from and including the thirtieth (30 th ) day following the Scheduled Termination Date, Fixed Rent shall thereafter be payable at the daily rate of one-fifteenth (1/15) of the Fixed Rent otherwise payable hereunder; and
(ii)    payments in respect of Maintenance Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis, prorated on a daily basis based on a month consisting of thirty (30) days;

	 	71	 		
	 		 	ARTICLE 22	
	 		 	RETURN OF AIRCRAFT	

each of which amounts shall be paid by Lessee at the earlier to occur of each next Fixed Rent Payment Date and Return. Notwithstanding the foregoing, in the event Lessee is unable to return the Aircraft to Lessor in accordance with this Lease on the Scheduled Termination Date primarily as a result of any act or omission of Lessor or any Person lawfully claiming by or through Lessor, Lessee’s continuing Fixed Rent payment obligations as set forth in sub-section (i) shall not apply.
(c)    Lessor may elect, in its sole and absolute discretion and without prejudice to its rights under this Lease, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 22 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to accomplish such correction. Any direct, documented, out-of-pocket expenses incurred by Lessor for such correction will become Supplemental Rent payable by Lessee on demand following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such corrections in reasonable detail. Lessee’s Obligation to pay such Supplemental Rent will survive the Termination Date and until such time that the Aircraft is put into the condition required for Return and Lessee’s remaining Obligations due for performance on the Termination Date have been performed in full.
22.4.     Legal Status Upon Return. At Return, the Aircraft shall be:
(a)    free and clear of all Liens, except Lessor’s Liens; and
(b)    duly registered in the name of Lessee, as lessee, and evidencing the ownership interest of Owner to the extent permitted under the Law of the State of Registration of the Aircraft.
At Return, Lessee shall, at its own cost and expense, procure or cooperate with Lessor in procuring the immediate deregistration of the Aircraft from the Register (including, without limitation, execution and delivery by Lessee of such documents as may be required to de-register the Aircraft from the Register and to terminate the Lease or to evidence the expiration, termination or cancellation of the Lease).
22.5.     Airport and Navigation Charges. Lessee shall ensure that upon Return any and all airport, navigation and other similar charges in connection with the use and operation of the Aircraft or any other aircraft operated by or in Lessee’s fleet of aircraft which give rise or would if unpaid give rise to any Lien in relation to the Aircraft or any Item of Equipment have been paid and discharged in full and will at Lessor’s written request produce reasonable evidence thereof reasonably satisfactory to Lessor.

	 	72	 		
	 		 	ARTICLE 22	
	 		 	RETURN OF AIRCRAFT	

23.	EVENTS OF DEFAULT	
Any one or more of the following events shall constitute an “ Event of Default ” under this Lease:
(a)    Lessee shall fail to make any payment of Rent or in respect of Maintenance Reserves when due hereunder and such failure shall continue for five (5) Business Days; or
(b)    Lessee shall fail to procure and maintain the Insurances, or Lessee shall operate the Aircraft at a time when or in a place where such Insurances shall not be in effect or otherwise outside the scope of coverage of the Insurances or Lessee fails to comply with the provisions of Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or
(c)    Lessee shall fail to timely comply with the provisions of Article 4 (Security Deposit); or
(d)    Lessee shall fail to timely comply with its Obligation to accept delivery of the Aircraft when validly tendered by Lessor hereunder, or Lessee fails in any material respect to satisfy the conditions precedent for Delivery under Article 7 hereof; or
(e)    Lessee shall fail to timely comply with its Obligation to complete Return of the Aircraft to Lessor on the Scheduled Termination Date or, if applicable, the Relevant Date as defined in Section 27.1(b) and such failure is not primarily attributable to any act or omission of Lessor or any Person lawfully claiming by or through Lessor; provided that so long as Lessee is diligently endeavoring to return the Aircraft to Lessor in accordance with the provisions of this Lease, the time for compliance shall be extended for a period of up to fifteen (15) days from the Scheduled Termination Date or the Relevant Date, as the case may be; or
(f)    Lessee (i) voluntarily suspends substantially all of its airline operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee are revoked, cancelled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline, or (ii) ceases to be a commercial air carrier or ceases to hold its current air operator’s certificate (or equivalent); or
(g)    Any representation or warranty made by Lessee herein or in any document or certificate furnished to Lessor in connection herewith or pursuant hereto shall prove to have been incorrect in any material respect when made, and if capable of cure, is not cured within thirty (30) days of receipt of notice of the same; or
(h)    The occurrence of a Related Lease Event of Default or an event of default (as defined therein) or material breach of any obligation under any Operative Document, which event of default or material breach is not cured within any applicable cure period set forth therein;
(i)    Lessee shall at any time fail to maintain the Items of Equipment in accordance with the provisions of this Lease or to promptly correct any discrepancy which renders the Aircraft or any Item of Equipment unairworthy so that a current and valid certificate of airworthiness and continuing authority to operate the Aircraft in commercial revenue service by the Aeronautics Authority cannot be or is not maintained for the Aircraft; provided, however, that it shall not be deemed to be an Event of Default if all Airbus A319 series aircraft are the subject of a grounding order issued by the Aeronautics Authority or the EASA, unless Lessee fails to comply with any instructions to correct the reason(s) for such grounding

	 	73	 		
	 		 	ARTICLE 23	
	 		 	EVENTS OF DEFAULT	

order promptly following the issuance thereof or fails to make diligent efforts to obtain any necessary parts required for such correction, but giving due regard to the management of such corrections on a fleet-wide basis; or
(j)    This Lease, any Related Lease or any assignment for security of any Permitted Sublease shall cease to be a valid and enforceable agreement and in full force and effect for any reason due to any action or inaction of Lessee in breach of its obligations hereunder or Lessee otherwise repudiates the same; or
(k)    Lessee shall fail to comply with its obligations pursuant to Sections 12.12(a) (Installation of other Engines), 17.5 (Perfection of Title), 17.6 (Cape Town Convention) or 17.7 (Permitted Liens) and such failure shall continue for a period of five (5) Business Days after notice thereof is given by Lessor to Lessee; or
(l)    Lessee shall fail to perform or observe in any material respect any other of the covenants, conditions, or agreements to be performed or observed by it hereunder and such failure shall continue for a period in excess of thirty (30) days after written notice thereof is given by Lessor to Lessee of such failure; or
(m)    Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for thirty (30) days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; or
(n)    (i) Lessee shall commence any case, proceeding or other action (A) under any existing or future Law relating to bankruptcy, insolvency, examinership, administration, reorganisation or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Lessee any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Lessee any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Lessee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Lessee shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.
Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its Obligations.

	 	74	 		
	 		 	ARTICLE 23	
	 		 	EVENTS OF DEFAULT	

24.	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	
24.1.     Lessor’s Rights Following an Event of Default. At any time after the occurrence and continuation of an Event of Default Lessor may treat such event as a repudiation by Lessee of the Lease generally and of its Obligations and may:
(a)    in the event of the occurrence and continuation of an Event of Default before Delivery, by notice to Lessee terminate its obligation to lease the Aircraft to Lessee hereunder; and/or
(b)    proceed by appropriate court action to enforce performance by Lessee of the applicable covenants and provisions of this Lease or the other Operative Documents or to recover damages for the breach thereof; and/or
(c)    by notice to Lessee, (i) require the grounding of the Aircraft and or (ii) cancel this Lease on and as of the date specified in such notice and (without further notice to Lessee) retake possession of the Aircraft, and Lessee agrees that Lessor may by its agents or representatives for this purpose enter upon Lessee’s premises where the Aircraft may be located or cause the same to be redelivered to Lessor, and Lessor shall be entitled to act as attorney for Lessee in causing such redelivery or in directing pilots to fly the Aircraft to said airport for redelivery thereof to Lessor and shall have all the powers and authorisations legally necessary for taking such action (at Lessor’s election); and/or
(d)    do anything that may be required to cure the Event of Default (notwithstanding Lessor having no obligation or responsibility to do so and without prejudice to Lessor’s right to treat any such non-compliance by Lessee as an Event of Default under this Lease) and recover from Lessee all costs and expenses incurred in doing so; and/or
(e)    with or without taking possession thereof, sell all the Aircraft or any Item of Equipment at public or private sale, with or without advertisement, for cash or upon credit, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Aircraft or any Item of Equipment as Lessor in its sole discretion may determine appropriate, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds thereof, all in such manner and on such terms as Lessor considers appropriate in its absolute discretion, as if this Lease had never been entered into; and/or
(f)    require Lessee to pay to Lessor all amounts due and payable by Lessee to Lessor and/or any Indemnitee under the Operative Documents to which it is a party as of the date of termination or cancellation of this Lease; and/or
(g)    require Lessee to pay to Lessor on demand and to indemnify Lessor for, from and against all damages, costs, fees, disbursements and expenses incurred or recoverable (pursuant to Article 2A (Uniform Commercial Code – Leases) or other applicable Law) by Lessor or in connection with such Event of Default, including, but not limited to:

	 	75	 		
	 		 	ARTICLE 24	
	 		 	LESSOR’S RIGHTS AND REMEDIES	
	 		 	FOLLOWING AN EVENT OF DEFAULT	

(i)    all losses, including lost profits (calculated on an After-Tax Basis) suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee or inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Lease and the other Operative Documents or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as leasing the Aircraft in accordance with the terms of this Lease and the other Operative Documents would have been, including, in each case, but without duplication, lost Rent payments during any remarketing period or during any period in which the Aircraft is placed in storage and which have not otherwise been paid by Lessee (and, without duplication, taking into account any expenses incurred by Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the Aircraft to meet the requirements of an alternative lessee); and
(ii)    interest at the Past Due Rate on (A) any amounts due and payable by Lessee under this Lease, but not paid, and (B) any judgment against Lessee in respect of or related to this Lease or any other Operative Document issued by a court of competent authority until the same are paid in full; and
(iii)    without duplication of any of the foregoing, any loss, cost, expense or liability sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Lease, including any costs, fees, disbursements and expenses incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing any Item of Equipment to the condition required by this Lease and (B) preparing any Item of Equipment for sale or lease, advertising the sale or lease of any such Items and selling or re-leasing the same; and
(iv)    reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Default or Event of Default or the exercise of Lessor’s remedies with respect thereto; and/or
(h)    without duplication of any of the foregoing, require Lessee to indemnify each Indemnitee on demand against any expense which such Indemnitee may sustain or incur as a result or consequence of such Event of Default, including (but not limited to) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or any Item of Equipment or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to any financings by Lessor or Owner in connection with this Lease, any Operative Document, any Item of Equipment or any rights thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums whatsoever paid or payable on account of funds borrowed, including funds borrowed in order to carry any unpaid Rent, any unpaid amount in respect of Maintenance Reserves, or other Obligations); and/or
(i)    apply and/or set off against any Obligations and Lessor’s costs, damages, expenses and disbursements incurred in connection with such Event of Default, at Lessor’s discretion, all amounts paid to Lessor in respect of Maintenance Reserves or Security Deposit pursuant to this Lease, as well as any other amounts paid by Lessee under any Operative Document and Related Lease; and/or

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	 		 	ARTICLE 24	
	 		 	LESSOR’S RIGHTS AND REMEDIES	
	 		 	FOLLOWING AN EVENT OF DEFAULT	

(j)    require Lessee to redeliver possession of the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require); and/or
(k)    exercise any of the rights, and avail itself of any of the remedies, provided by Article 2A (Uniform Commercial Code—Leases) and, to the extent applicable, Article 9 (Uniform Commercial Code—Secured Transactions) of the New York Uniform Commercial Code, or otherwise available under any other applicable Laws, including but not limited to the applicable rights and remedies provided by the Laws of the United Mexican States.
Without prejudice to Lessor’s other remedies under this Lease or any other Operative Document, Lessee agrees that the occurrence of an Event of Default shall entitle Lessor to automatically and unilaterally cancel or terminate this Lease without requirement of any prior notice or judicial intervention for all legal purposes. All costs and expenses incurred or advanced by Lessor for or on account of any Obligations following the occurrence and continuation of an Event of Default shall bear interest at the Past Due Rate from the date on which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment, if any).
24.2.     De-Registration. If an Event of Default occurs and is continuing following Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) de-registration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease. Lessee hereby irrevocably and by way of security for its obligations under this Lease appoints (which appointment is coupled with an interest) Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing.
24.3.     Present Value of Payments. In calculating Lessor’s damages hereunder, upon the occurrence of an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred, together with amounts, if any, scheduled to be paid by a new lessee after any re-lease of the Aircraft, will be calculated on a present value basis using a discount rate of ***** per annum, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof.
24.4.     Remedies Cumulative. No remedy referred to in this Article 24 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
24.5.     Lessor’s Exercise of Remedies. In effecting any repossession of the Aircraft (including the Aircraft Documents, any Item of Equipment, an Engine, or Part) (“ Repossessed Items ”), Lessor and its representatives and agents, to the extent permitted by Law, shall:
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

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	 		 	ARTICLE 24	
	 		 	LESSOR’S RIGHTS AND REMEDIES	
	 		 	FOLLOWING AN EVENT OF DEFAULT	

(a)    have the right to enter upon any premises where it reasonably believes the Repossessed Items to be located;
(b)    not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to any of the Repossessed Items; provided, however, that Lessor shall return to Lessee all personal property of Lessee and other Persons, including its employees or its passengers, which was on the Aircraft at the time Lessor repossessed the Aircraft;
(c)    not be liable or responsible, in any manner, for any inadvertent damage to any of Lessee’s property in repossessing and holding any of the Repossessed Items, except to the extent caused directly by Lessor’s gross negligence or willful misconduct; and
(d)    have the right to maintain possession of and dispose of the Repossessed Items on any premises owned by Lessee or under Lessee’s control.
24.6.     Application of Payments Following Default or Event of Default. Any and all payments received by Lessor under this Lease and under any other Operative Document following the occurrence and during the continuation of a Default or Event of Default, whether in respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to the Obligations of Lessee in any manner or order as Lessor may determine in its sole discretion, notwithstanding any instructions, directions or notice given by Lessee or any other Person with respect to the application of such payments.
24.7.     Use of Termination Date. If this Lease is cancelled or the leasing of the Aircraft is otherwise terminated and the Aircraft is repossessed in connection with Lessor’s exercise of remedies following the occurrence and during the continuation of an Event of Default prior to the Scheduled Termination Date, then notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Scheduled Termination Date” will be utilised in calculating the damages to which Lessor may be entitled to receive from Lessee pursuant to Section 24.1.
24.8.     No Right to Maintain Possession. Upon cancellation of this Lease or termination of the leasing of the Aircraft following the occurrence and during the continuance of an Event of Default, Lessee shall have no right to maintain possession of the Aircraft or any Item of Equipment, and any de facto possession thereof exercised by Lessee shall be deemed illegitimate possession for all purposes of applicable Law with respect to the Aircraft and all Items of Equipment, and Lessee agrees to redeliver immediate possession of the Aircraft as directed by Lessor.

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	 		 	ARTICLE 24	
	 		 	LESSOR’S RIGHTS AND REMEDIES	
	 		 	FOLLOWING AN EVENT OF DEFAULT	

25.	ASSIGNMENT AND TRANSFER	
25.1.     No Assignment by Lessee. Except as permitted by Section 15.1, Lessee shall not transfer, assign, novate, mortgage or complete any other such or similar transfer of any interest in this Lease or any of its rights hereunder or in any Item of Equipment, and any such purported assignment shall be void ab initio .
25.2.     Transfer of Lessor’s and/or Owner’s Interests. Each of Lessor, Owner, any Owner Participant and any Financing Party may at any time and without Lessee’s consent transfer to any Person (a “ Transferee ”) the Aircraft and/or all or any of its rights and obligations under this Lease and the other Operative Documents to which it is a party; provided that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party or its rights in respect of the Aircraft or any Item of Equipment, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer had not taken place; (ii) at the time of transfer, the Transferee shall have a net worth of no less than *****, or the obligations of Lessor under the Lease shall have been guaranteed by a guarantor having a net worth of no less than *****, or Transferee shall have agreed to hold all Security Deposits, Maintenance Reserves and insurance proceeds in excess of the Agreed Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer to or by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Lessee acknowledges that neither minimal increases in Lessee’s administrative obligations, including expenses, nor an increase in the number of Indemnitees and/or Additional Insureds as a result of such transfer shall not, in and of itself, constitute an increase in Lessee’s obligations hereunder. The foregoing shall apply with the same force and effect to the transfer of any beneficial interest in the Aircraft or any trust or similar entity.
25.3.     Cooperation with Transfers. Lessee shall do such things and execute such documents as may be reasonably requested of it to give effect to a transfer contemplated by and made or to be made in accordance with the terms and provisions of Section 25.2, including (a) entering into an assignment and assumption agreement or novation deed with the Transferee in form and substance reasonably satisfactory to Lessee, and (b) providing Lessor reasonably requested scheduling and routing information for the Aircraft or the Item of Equipment being transferred. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses reasonably incurred by Lessee in connection with such transfer. Lessee shall make such amendments to the stated contracts and list of Additional Insureds in respect of the Insurances effected in respect of the Aircraft so as to ensure continued compliance with the requirements of Article 19 with regard to the interests of such Transferee and any new Financing Parties and shall provide to Lessor updated documentation evidencing such amendments.
 
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	 		 	ARTICLE 25	
	 		 	ASSIGNMENT AND TRANSFER	

25.4.     Financings. Owner, Lessor and any Owner Participant may at any time and without Lessee’s consent enter into any financing arrangements (which may include the conversion of the lease transaction contemplated by this Lease to a “leveraged lease” structure, a “head-lease, sub-lease” or other

	 	80	 		
	 		 	ARTICLE 25	
	 		 	ASSIGNMENT AND TRANSFER	

lease structure) with respect to the Aircraft pursuant to which (a) Lessor may assign its rights under this Lease and the other Operative Documents (by way of security) to Owner or to any Financing Parties and (b) Owner may execute a mortgage over the Aircraft in favour of the Financing Parties; provided, that (i) no such financing transaction shall increase Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional liabilities or obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party, based on laws enacted or in effect at the time of such transfer, than it would have had if such transfer had not taken place; (ii) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Basic Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Such financing arrangements may also take the form of a securitisation (a “ Securitisation ”) involving one or more loans from one or more financial institutions (each a “ Lender ”), and/or with notes, loan certificates, or pass through certificates issued pursuant to an indenture with a trustee (the “ Trustee ”), which notes, loan certificates or pass through certificates may be guaranteed (in whole or in part) by one or more monoline insurers (each, a “ Financial Guarantor ”).
25.5.     Cooperation with Financings. Lessee shall cooperate with Lessor and do such things and execute such documents and make such filings and registrations in the State of Registration as may be requested of it by Lessor and/or Owner in order to protect the interests of the Financing Parties and/or Owner in connection with any financing contemplated by and made or to be made in accordance with the terms and provisions of Section 25.4 including, without limitation, (a) executing an acknowledgement of any assignment of Lessor’s rights under this Lease in favour of Owner or any relevant Financing Party, on terms customary in aircraft financing transactions or Securitisations, (b) providing Lessor scheduling and routing information for the Aircraft or any Item of Equipment being financed, (c) making such amendments to this Lease and any of the other Operative Documents and executing such additional documents, as may be reasonably be requested by Lessor in connection with the Securitisation, provided that any such amendment or additional documentation does not adversely affect the rights, or materially increase the obligations, of Lessee under the Lease and Operative Documents, and (d) making such amendments to the Insurances maintained in respect of the Aircraft to ensure continued compliance with the requirements of Article 19 with regard to the interests of Owner and any such Financing Party, and shall provide to Lessor updated documentation evidencing such amendments. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses incurred by Lessee in connection with such financing transaction.
25.6.     Notice of Security Assignment. Lessor hereby provides irrevocable notice to Lessee that:
(a)    pursuant to the Security Trust Agreement, Lessor has assigned to the Security Trustee by way of security, all of its right, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds (the “ Security Assignment ”), and Lessee is hereby authorised and required to make all payments to Security Trustee in accordance with the terms of this Lease until the Security Trustee otherwise directs, in writing, and Lessee is hereby authorised and required to comply with any such directions of the Security Trustee;

	 	81	 		
	 		 	ARTICLE 25	
	 		 	ASSIGNMENT AND TRANSFER	

(b)    by executing and delivering the Lessee Acknowledgment, Lessee shall have confirmed its acknowledgment of an agreement for the benefit of the Security Trustee that the Security Trustee shall not be bound by, nor have any liability to Lessee for the performance of, any of the obligations of Lessor under this Lease save and to the extent otherwise expressly agreed in writing by the Security Trustee with Lessee, and Lessee is hereby irrevocably authorised to assume the obligations expressed to be assumed by Lessee under the Lessee Acknowledgment to the effect that, so far as the same would otherwise be incompatible with the Lease, Lessee’s obligations to Lessor under the Lease shall be modified accordingly; and
(c)    by executing and delivering the Lessee Acknowledgment, Lessee shall have acknowledged that each of Owner and Lessor has appointed the Servicer as its servicer and attorney-in-fact in respect of the Lease and the Aircraft as contemplated in Section 27.3 hereof, and all communications received by Lessee from the Servicer in connection with this Lease and the Aircraft may and shall be relied upon (and complied with where the context calls for compliance) by Lessee as if Lessee received the same from Lessor and/or Owner, as the case may be, and Lessee may rely on this notice of such appointment until notified in writing to the contrary by Owner, Lessor or Security Trustee.
25.7.     Transfer of Beneficial Interest. The provisions of Sections 25.2 and 25.3 shall be applicable to any sale, assignment, transfer or other conveyance by Owner Participant of all or any portion of its right, title and/or interest in or to the Aircraft, this Lease and/or the Beneficial Interest or by applicable Law as applied thereto.

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	 		 	ARTICLE 25	
	 		 	ASSIGNMENT AND TRANSFER	

26.	LAW AND JURISDICTION	
26.1.     Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
26.2.     Consent to Jurisdiction. Each of Lessee and Lessor hereby expressly and irrevocably consents that any legal action or proceeding with respect to this Lease may be brought in any court of the State of New York or any Federal court of the United States of America located in New York, New York, located in the Borough of Manhattan, United States of America, or in any jurisdiction where Lessee or Lessor or any of their respective assets may be found, and by execution and delivery of this Lease, each of Lessee and Lessor hereby irrevocably and expressly submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts, irrevocably and expressly waiving the jurisdiction of any other courts to which it may be entitled by reason of its present or future domicile or otherwise.
26.3.     Process Agent and Service of Process. Lessee shall, not later than the execution date of this Lease, irrevocably designate, appoint and empower a duly authorised agent for service of process in the State of New York reasonably acceptable to Lessor in any suit or proceeding with respect to this Lease. A copy of any such process served on such agent shall be promptly forwarded by airmail by the person commencing such proceeding to Lessee at its address set forth in Appendix 2B, but the failure of Lessee to receive such copies shall not affect in any way the service of such process as aforesaid. Lessee further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to Lessee at its address set forth in Appendix 2B. The foregoing, however, shall not limit the rights of Lessor to serve process in any other manner permitted by Law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction.
26.4.     Jurisdiction and Forum. Lessee agrees that final judgment against Lessee in any action or proceeding in connection with this Lease shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of Lessee’s indebtedness. Lessee hereby irrevocably waives, to the fullest extent permitted by Law, any objection which Lessee may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the State of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York has been brought in an inconvenient forum. To the extent that Lessee may, in any jurisdiction in which proceedings may at any time be taken for the determination of any question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom), be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the Law of such jurisdiction.

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	 		 	ARTICLE 26	
	 		 	LAW AND JURISDICTIONS	

26.5.     Waiver of Jury Trial. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
26.6.     Waiver of Immunity. Each party to this Lease agrees that in any legal action or proceedings against it or its assets in connection with this Lease and/or any other Operative Document no immunity from such legal action or proceedings (which shall include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) shall be claimed by or on behalf of it or with respect to its assets, irrevocably waives any such right of immunity which it or its assets now have or may hereafter acquire or which may be attributed to it or its assets and consents generally in respect of any such legal action or proceedings to the giving of any relief or the issue of any process in connection with such action or proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order of judgment which may be made or given in such action or proceedings.

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	 		 	ARTICLE 26	
	 		 	LAW AND JURISDICTIONS	

27.	MISCELLANEOUS	
27.1.     Severability and Illegality.
(a)     Severability. Any provision of this Lease prohibited by or unlawful or unenforceable under any applicable Law actually applied by any court of competent jurisdiction shall, to the extent required by such Law, be severed from this Lease and rendered ineffective so far as is possible without modifying the remaining provisions of this Lease.
(b)     Illegality.
(i)    If at any time there is a change in any applicable Law binding upon Lessee or Lessor in its State of Organisation or where it has its principal office or in any jurisdiction in which any action is required to be performed by it for the purposes of any Operative Document which renders, or which will render, it unlawful for such party to perform any of its obligations or to exercise any of its rights under any Operative Document (an “ Illegality Event ”) and the parties are not able to restructure the transaction in accordance with Section 27.1(b)(iii), Lessor or Lessee (as the case may be) shall forthwith notify the other party hereto and Lessor or Lessee (as the case may be) shall be entitled by written notice (the “ Illegality Notice ”) to the other party, either:
(A)    to terminate its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease; or
(B)    if such event occurs after the Delivery Date, to terminate the Lease Term,
in each such case, on the Relevant Date.
(ii)    In Section 27.1(b) “ Relevant Date ” means the later to occur of:
(A)    the date of the Illegality Notice; and
(B)    a future date specified in the Illegality Notice being prior to the date on which the Illegality Event takes effect.
(iii)    Lessor and Lessee shall, for a period of ***** days from the date Lessor or Lessee becomes aware that an Illegality Event will arise or has arisen, or such shorter period ending on the Business Day prior to the date on which such Illegality Event takes place, and provided that no Event of Default has occurred and is continuing, negotiate in good faith and take all commercially reasonable steps (subject to Section 27.1(b)(iv) below) which are available to mitigate the effects of such Illegality Event, with a view to restructuring the transaction in a manner such that the leasing of the Aircraft to Lessee may continue on the same commercial terms as under this Lease, including, without limitation, by way of amendment, novation or replacement to any Operative Document, or termination of, any Operative Document.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

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	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

(iv)    Nothing in Section 27.1(b)(iii) above shall, or shall be construed so as to, oblige Lessor to take any mitigating steps (including, without limitation, omitting to act) if, in its reasonable opinion, to do so:
(A)    would or would be likely to involve it in any unlawful activity or any activity that is contrary to any Law; or
(B)    unless indemnified to its satisfaction, would involve it in any cost, loss, liability or Tax disadvantage; or
(C)    would be prejudicial to it, the Aircraft or the other Indemnitees.
(v)    The cost of any mitigation pursuant to this Section 27.1(b) shall be for the account of Lessee.
(vi)    If Lessor or Lessee shall have terminated the Lease Term or its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease in accordance with Section 27.1(b)(i), then on the Relevant Date, Lessee shall:
(A)    return the Aircraft to Lessor in accordance with the provisions of Article 22 if the Aircraft has been delivered to Lessee under this Lease, unless a Lessor Illegality Event has occurred in which case the Aircraft shall be returned to Lessor in its then as-is condition, but in any event, having been operated and maintained throughout the Lease Term in accordance with the provisions of this Lease; and
(B)    pay to Lessor the amounts provided in Section 24.1, clauses (f), (g) and (h), and Section 24.3 as if references therein to an “Event of Default” were to the termination of the Lease Term pursuant to Section 27.1(b)(i).
27.2.     Amendments. No term or provision of this Lease may be amended, modified, waived, discharged or terminated orally, but only by a written instrument signed by Lessor and Lessee.
27.3.     Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer.
(a)    If Lessee fails to perform or comply with any Obligations, Lessor shall have the right, but not the obligation, to discharge such obligation, and the amount of such payment made and the expenses of Lessor incurred in connection with such discharge shall be payable by Lessee upon demand, together with interest at the Past Due Rate from the date such expenses were incurred.
(b)    (i)    Lessor may delegate to any Person or Persons (including, without limitation, the Servicer) all or any of the rights, powers or discretions vested in it by this Lease or any of the other Operative Documents, and any such delegation may be made upon such terms and conditions and subject to such regulations (including the power to sub-delegate) as Lessor in its absolute discretion deems fit;

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	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

(ii)    Pursuant to a servicing agreement between Servicer, Owner and Lessor, Servicer has been appointed by Lessor and Owner as servicer for all matters related to this Lease and the Aircraft, and accordingly, except with respect to payments of Rent, Supplemental Rent, Maintenance Reserves and other amounts payable hereunder which shall be paid as provided herein, Lessee shall communicate with and deal with Servicer with respect to all matters relating to this Lease and the Aircraft as if the Servicer were the Owner and Lessor under this Lease, until notified in writing to the contrary by Owner, Lessor or Security Trustee;
(iii)    Pursuant to a management agreement among Manager, Owner Participant, Security Trustee and other parties thereto, Manager has been appointed to provide certain administrative services for Owner Participant, Owner and Lessor in connection with this Lease and the Aircraft.
27.4.     Counterparts. This Lease may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
27.5.     Delivery of Documents by Electronic Means. Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or other electronic image file will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or other electronic image file will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
27.6.     Survival. The representations, warranties, covenants, agreements and indemnities (including, without limitation, the indemnities contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the Termination Date to the extent required for full performance and satisfaction thereof.
27.7.     Entire Lease. This Lease (including all Appendices) and the other Operative Documents executed pursuant hereto constitute the entire agreement between Lessor and Lessee regarding the Aircraft and any prior or contemporaneous written or oral understandings with regard to the subject matter hereof are superseded hereby in their entirety.
27.8.     Successors and Assigns. Subject to the provisions of Article 25, the terms and provisions of this Lease and each other Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns.

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	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

27.9.     Brokers. Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorney’s fees and disbursements) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the lease of the Aircraft, if such claim, damage, cost or expense arises out of any action or alleged action by the indemnifying party, its employees or agents. It is understood and agreed between the parties that this Lease has been concluded by direct negotiation without any intermediaries or agents. Lessee hereby represents and warrants that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Lease, to any employee of Lessor or to any Person.
27.10.     Transaction Costs. Whether or not the transactions contemplated hereby are consummated, each party hereto agrees to pay its own costs and expenses incurred in connection with the preparation, execution and delivery of this Lease and any other documents delivered in connection herewith, including without limitation the fees, expenses and disbursements of counsel, except as otherwise expressly set forth herein. In addition, Lessee shall be solely responsible for (i) all costs, including attorneys’ fees and disbursements, incurred in registering the Aircraft and an executed counterpart of this Lease and the Lease Supplement in the State of Registration and any other jurisdiction wherein registration of the same is necessary as a result of the operation of the Aircraft by Lessee or any Permitted Sublessee, and (ii) all costs, including attorneys’ fees and disbursements, incurred in connection with the de-registration of the Aircraft from the Register or any other applicable Aeronautics Authority upon the cancellation or termination of this Lease in accordance with the provisions hereof. Each of Lessor and Lessee agrees to pay the reasonable costs and expenses (including attorneys’ fees and disbursements) of the other party incurred in connection with the entering into or giving or withholding of any future waiver, supplement or amendment or other action with respect to the Lease or any other document delivered in connection therewith that it may request, except in the case of an Event of Default in which case all of such costs shall be at the expense of Lessee.
27.11.     Time is of the Essence. Time and strict and punctual performance are of the essence with respect to each provision of this Lease.
27.12.     Language.
(a)    This Lease is in the English language and all notices, opinions, financial statements and other documents given under this Lease shall be provided in the English language or, if not submitted in the English language, shall be accompanied by one certified copy of an English translation thereof for each copy of the foregoing so submitted.
(b)    If this Lease or any other Operative Document is required to be translated into another language for the purposes of any filing or registration, (i) Lessee shall procure and pay for any such translation, and (ii) the English version shall prevail in the event of any conflict with any such non-English version.
27.13.     No Rights of Third Parties. No third parties, other than Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed to have a right to ( x ) benefit from, or ( y ) seek to enforce, any of the provisions of this Lease.
27.14.     Delegation. Lessor may delegate to any appropriately licensed and/or experienced person(s) all or any of the rights, powers or discretions vested

	 	88	 		
	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

in it by this Lease or any other Operative Document and any such delegation may be made upon such terms and conditions as between such person and Lessor as Lessor in its absolute discretion may determine.
27.15.     Further Assurances. Lessee shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by Law or reasonably requested in writing by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purposes of this Lease and the other Operative Documents.
27.16.     Rights at Law. Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of Lessor hereunder or under any other Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of Lessor under the Operative Documents (i) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (ii) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and (iii) shall be cumulative and not mutually exclusive and the exercise of one shall not be deemed a waiver of the right to exercise any other.
27.17.     Confidentiality.
(a)    During the Lease Term all Information shall remain confidential and the parties hereto and their respective Affiliates will use their respective reasonable efforts not to disclose the Information to any other Person without prior written consent of each other party, which consent shall not be unreasonably withheld; provided, that Lessor and Lessee may, without the consent of each other party, disclose the Information in any of the following situations:
(i)    To directors, officers, employees, permitted assigns and agents of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(ii)    To auditors, accountants or legal advisors of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(iii)    To actual or potential lenders/Financing Parties, purchasers or other permitted assigns of Lessor, Owner Participant, Lessee or any Affiliate of any of such parties, including but not limited to providing financial information about Lessee to potential lenders/Financing Parties to, and purchasers from, Lessor, provided that, upon the request of Lessee, such potential lenders/Financing Parties will agree to keep such Information confidential in a manner similar to the provisions hereunder and that their access to Information is solely for purposes of evaluating an investment in a Securitisation or other financing of the Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a form reasonably acceptable to Lessee; or
(iv)    To rating agencies with respect to ratings of Lessor, Owner, Owner Participant, or a related Securitisation; or

	 	89	 		
	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

(v)    To such other parties as Lessor, Owner Participant, Servicer, Manager or Lessee may reasonably believe to be required by Law (including, without limitation any regulation or order of a bank regulatory agency), by subpoena or by any other legal process.
(b)    Notwithstanding any of the foregoing, Information will not be considered confidential, and Lessor, Owner Participant, Servicer, Manager and Lessee and their respective Affiliates may disclose any item of the Information without restriction in any of the following circumstances, if such item:
(i)    is publicly available (either to the general public or to any relevant trade or industry) prior to any party’s receipt of it from another party hereto;
(ii)    is thereafter made publicly available (either to the general public or to any relevant trade or industry) by another party hereto or by a third party which is entitled to make such item publicly available;
(iii)    becomes available to any party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it; or
(iv)    was known to any party hereto on a non-confidential basis prior to its disclosure to such party by another party hereto.
27.18.     Notices. All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally, when telecopied, or if deposited in the mail, when received, to the addressees appearing in Appendix 2B or to such other address as any party may designate for itself by written notice to the other party or parties.

	 	90	 		
	 		 	ARTICLE 27	
	 		 	MISCELLANEOUS	

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 17 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	

					
By:	 	/s/ Alfonso Ascencio Triujeque	 		 	By:	 	/s/ Alan Geraghty	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Alan Geraghty	
					
Title:	 	General Counsel	 		 	Title:	 	Director	

By:	 	/s/ Mario E. Geyne Pliego	
		
Name:	 	Mario E. Geyne Pliego	
		
Title:	 	Financial and Fleet Planning Director	
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	 		 	SIGNATURE PAGE	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 17 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
Lessee	 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor	

					
By:	 	/s/ Alfonso Ascencio Triujeque	 		 	By:	 	/s/ Alan Geraghty	
					
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Alan Geraghty	
					
Title:	 	General Counsel	 		 	Title:	 	Director	

By:	 	/s/ Mario E. Geyne Pliego	
		
Name:	 	Mario E. Geyne Pliego	
		
Title:	 	Financial and Fleet Planning Director	
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

SECURITY TRUSTEE RECEIPT	
	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Security Trustee	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

	 		 	CHATTEL PAPER ORIGINAL SIGNATURE PAGE	

Appendix 1
to Aircraft Lease Agreement
DEFINITIONS
“ Acceptance Certificate ” means the acceptance certificate executed and delivered by Lessee to Lessor at Delivery in the form of Appendix 3.
“ Additional Insureds ” means the Indemnitees and each of them.
“ Aeronautics Authority ” means the DGAC or such other governmental department, bureau, commission or agency that under the Law of the State of Registration shall from time to time have control or supervision of civil aviation in that state or have jurisdiction over the registration, airworthiness, operation, or other matters relating to, the Aircraft.
“ Affiliate ” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified.
“ After-Tax Basis ” means, with respect to any indemnity or other amount (an “ Amount ”) which is required by any Operative Document to be paid on an “After-Tax Basis” by Lessee (or by any other Person on account of any Obligation of Lessee under the Operative Documents) to any Indemnitee (or to any other Person for the account or benefit of any Indemnitee), payment of such Amount supplemented to the extent necessary by a further payment or payments that will cause the sum of all such payments, reduced by the aggregate amount of all Taxes payable by any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments by any Indemnitee, net of any actual current reduction in any Indemnitee’s liability for Taxes caused by the allowance of any deduction, Tax credit or other Tax benefit for the Tax, Claim, cost or expense that gave rise to Lessee’s liability to pay such Amount, to be equal to the Amount that is required to be paid on an “After-Tax Basis”, provided, that for the purpose of calculating the amount of Taxes imposed on any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments, it shall be assumed that such Indemnitee is subject to each Tax that is imposed on or payable by such Indemnitee with respect to the accrual, actual receipt or constructive receipt of each such payment at the highest marginal statutory Tax rate applicable to such Indemnitee for the Tax accounting period in which such Indemnitee accrues or receives (actually or constructively) such payment.
“ Agreed Value ” means, with respect to the Aircraft, the amount set forth in Appendix 2B.
“ Aircraft ” means, as the context may require or permit, the Airframe together with (i) the Engines, whether or not installed on the Airframe, (ii) all Parts or components thereof, (iii) any spare parts or ancillary equipment or devices furnished with the Airframe or the Engines under this Lease, (iv) all items of equipment and other property, tangible and intangible, described in the Acceptance Certificate delivered on the Delivery Date and not otherwise described in the preceding portions of this definition, (v) all Aircraft Documents, (vi) all substitutions, replacements and renewals of any and all thereof, and (vii) all alterations, modifications and additions which may be made to, installed on or incorporated into the Aircraft, including but not limited to, those required pursuant to any Airworthiness Directive.
“ Aircraft Documents ” means, whether in paper, photographic, digital, electronic or other medium, (i) the manuals and records identified in the attachments to the Acceptance Certificate hereto and all other records and documentation pertaining to the Aircraft and delivered with the Aircraft on the Delivery Date

	 	App 1 - 1	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

and (ii) all other Required Approvals, records and documentation generated during the Lease Term that are related to the maintenance, inspections and alterations, modifications and additions accomplished during the Lease Term with respect to the Aircraft and required to be maintained by Lessee either by the Aeronautics Authority or in order to comply with the provisions of this Lease.
“ Airframe ” means the Airbus A319-132 aircraft (except for the Engines) as more specifically described in the Lease Supplement, together with the APU, all Landing Gear and any and all Parts.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued by the Certificating Authority, in addition to any airworthiness directive issued by the Aeronautics Authority, each to the extent the same is applicable to the Aircraft and/or any Item of Equipment.
“ Alert Service Bulletin ” means any service bulletin issued by a Manufacturer that is designated as such by such Manufacturer.
“ Approved Maintenance Organisation ” means the Manufacturer or a maintenance facility approved by the Aeronautics Authority and also by the FAA pursuant to FAR Part 145 and/or the EASA pursuant to EASA Part-145 for the performance of maintenance, testing, inspection, repair, overhaul or modification on the Aircraft or any Item of Equipment.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date, or any replacement thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to such auxiliary power unit and any and all Parts removed therefrom.
“ APU Cycle ” means one complete continuous operation of the APU beginning at the moment the APU is started and continuing until it subsequently shuts down.
“ APU Hour ” means each hour or part thereof, rounded to the nearest minute, elapsing from the moment the APU is started to the moment when the APU is shut down.
“ APU Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “APU Overhaul Reserve”.
“ Basic Rent ” means the rent payable for the Aircraft under this Lease in the amount determined in Appendix 2B, and which shall include both PBH Rent and Fixed Rent.
“ Beneficial Interest ” means the entire beneficial interest in the trust established by the Trust Agreement.
“ Business Day ” means (a) in respect to the determination of LIBOR, a day on which U.S. Dollar deposits may be dealt in the London inter-bank market; (b) in the case of payments under this Lease or any Operative Document, any day (other than Saturday or Sunday) on which banks are open for business in New York, United States of America; and (c) in all other cases, any day (other than Saturday or Sunday) on which banks are open for business in Ireland, the State of Registration and if different from the State of Registration, Lessee’s State of Organisation.
“ C-Check ” means with respect to the Aircraft, (i) the accomplishment of Tasks that, at the time of such check, would require accomplishment prior to the next due c-check based upon the interval for each such Task in the MPD, and where such Tasks are controlled by Flight Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the rectification of each defect discovered during the accomplishment of such Tasks.

	 	App 1 - 2	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Calendar Month ” means the period commencing on and including the Delivery Date and ending on and including the last day of the calendar month in which the Delivery Date occurs and each of the consecutive calendar monthly periods thereafter throughout the Lease Term, provided that the final Calendar Month of the Lease Term may consist of less than a calendar month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a calendar month.
“ Cape Town Convention ” means, together, the official English language text of each of the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Protocol ”) each as opened for signature on 16 November 2001 at Cape Town, South Africa.
“ Cash Security Deposit ” means the portion of the Security Deposit paid in cash in the amounts in Appendix 2B.
“ Certificating Authority ” means the EASA.
“ Certificating Authority Form ” means an EASA Form One or an FAA Form 8130-3, any dual release form approved by both the EASA and the FAA, or any successor to either such forms.
“ Claims ” means any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any reasonable attorney’s fees and other reasonable and documented out-of-pocket costs and expenses in connection therewith or in establishing the right to indemnification hereunder, including any of the foregoing arising or imposed with or without the fault or negligence of any Indemnitee (whether passive or active) or under the doctrine of strict or absolute liability.
“ Credit Security Deposit ” means the portion of the Security Deposit paid by Lessee in the form of a Security Letter of Credit in the amount specified in Appendix 2B.
“ Cycle ” means one take-off and landing of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed).
“ Default ” means any event, condition or circumstance which, with the lapse of time and/or the giving of notice which would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft by Lessor to Lessee in accordance with this Lease and which shall be evidenced by execution and delivery of the Lease Supplement and the Acceptance Certificate.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Location ” means the facilities of Atitech S.p.A in Naples, Italy, or such other airport in Europe or such other location as may be agreed to in writing by Lessor and Lessee.
“ DGAC ” means the Mexican General Department of Civil Aeronautics (Dirección General de Aeronáutica Civil) and any successor agency thereto established to regulate civil aircraft registered in the United Mexican States.
“ Documents Loss ” means the loss or destruction of the Aircraft Documents or any of them.

	 	App 1 - 3	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Dollars ” or “ $ ” means the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency, an agency of the European Union having responsibility for aviation safety, regulation and oversight of member states of the European Union, or any Person, governmental department, bureau, commission or agency succeeding to the functions of the European Aviation Safety Agency.
“ EASA Requirements ” means, as applicable to the Aircraft, (i) any of the regulations, rules, or decisions of, or governing the EASA, and (ii) EU-OPS 1.
“ Engine(s) ” means each of the engines identified in the Lease Supplement, or any replacement of any thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to any such Engine and any and all Parts removed therefrom.
“ Engine Agreed Value ” means, with respect to each Engine when not installed on the Airframe, the amount set forth in Appendix 2B.
“ Engine Life Limited Parts Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Life Limited Parts Reserve”.
“ Engine Loss ” means the occurrence of (a) an Event of Loss with respect to an Engine only (whether or not installed on the Airframe) or (b) any divestiture or impairment of any right, title or interest of Lessor in or to an Engine as a result of the installation of such Engine on any other airframe.
“ Engine Restoration ” means any engine shop visit having a workscope that at a minimum, includes a complete refurbishment or full overhaul of the high pressure turbine and combustion section of the relevant Engine, accomplished in accordance with the Engine Manufacturer’s Engine Maintenance Management Program applicable to the Engine.
“ Engine Restoration Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Restoration Reserve”.
“ EU-OPS 1 ” means the technical requirements and administrative procedures implemented pursuant to Council Regulation (EEC) No. 3922/91, as amended by Regulation (EC) No. 1899/2006 of the European Parliament and Council of the EU, and as the same is further amended from time to time.
“ European Union ” or “ EU ” means the union of countries established pursuant to the Treaty of Maastricht, which came into effect on November 1, 1993, as amended by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the Treaty of Nice signed on February 26, 2001, and as may be amended from time to time.
“ Event of Default ” means those events and circumstances listed in Article 23.
“ Event of Loss ” means, with respect to any Item of Equipment (excluding Parts), any of the following events:
(a)    the agreed, actual, arranged, compromised or constructive total loss of such Item (including any damage to the same which results in an insurance settlement on the basis of a total loss, or requisition for use or hire of the same which results in an insurance settlement on the basis of a total loss); or

	 	App 1 - 4	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

(b)    the destruction or damage that permanently renders such Item to be unfit for normal use for any reason whatsoever; or
(c)    the requisition of title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, condemnation or confiscation for any reason of such Item by a Governmental Authority or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title of such Item; or
(d)    the hijacking, theft, or disappearance of such Item (i) for a period of sixty (60) days or more or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(e)    the condemnation, confiscation, capture, deprivation, seizure or requisition for use or hire of the Airframe or the deprivation of the possession or use of the Airframe as a result of any Law or other action by the Aeronautics Authority or any Governmental Authority (other than where the same amounts to the circumstances provided in clause (c)) which deprives any Person entitled to have possession and/or use of the Item of its possession and/or use (i) for more than a period of sixty (60) consecutive days or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(f)    any other case which by subsequent written agreement Lessor and Lessee may deem, with the agreement of the insurers, to be an Event of Loss.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“ Event of Loss Date ” means (a) with respect to any Event of Loss set forth in paragraph (a) of the definition thereof, the earliest of (i) the date of actual loss, (ii) the date on which the loss is agreed, arranged or compromised by the insurers and (iii) sixty (60) days after the date of notice to Lessee’s brokers or insurers claiming the loss, (b) with respect to any Event of Loss set forth in paragraph (b) or (c) of the definition thereof, the date such event, condition or circumstance occurs or, if such date is not known, the date on which the relevant property was last known to exist, (c) with respect to any Event of Loss set forth in paragraph (d) or (e) of the definition thereof, the earlier of (i) the date on which insurers make payment on the basis of an Event of Loss and (ii) the date falling thirty (30) days after the expiration of the period, or the continuation of the condition or circumstance beyond the date, described therein or (d) with respect to any Event of Loss set forth in paragraph (f) of the definition thereof, the date of the subsequent agreement reached by Lessor and Lessee, with the agreement of the insurers.
“ Event of Loss Proceeds ” means the proceeds of any Insurances or any compensation or similar payment arising, in respect of an Event of Loss.
“ Excluded Taxes ” has the meaning provided in Section 21.1(b) hereof.
“ Excusable Delay ” means any delay in Delivery not occasioned by the fault or negligence of Lessor and/or due to or arising from Lessor’s reasonable control including, without limitation, (i) acts of God or the public enemy, natural disasters, civil war, insurrection or riots, quarantine restrictions, strikes, lockouts, or labour stoppages (other than strikes, lockouts or labour stoppages of Lessor and/or its Affiliates), (ii) fires, floods, explosions, earthquakes, epidemics or serious accidents, (iii) delays relating to or arising out of maintenance work accomplished or to be accomplished on any Item of Equipment prior to Delivery hereunder, and/or (iv) delays relating to any failure of the Prior Operator to return the Aircraft at the time and location and in the condition required by the Prior Lease.

	 	App 1 - 5	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ FAA ” means the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any Person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“ FAR ” means the federal aviation regulations as set forth in Title 14 of the United States Code of Federal Regulations, Chapter 1 (Parts 1 - 199).
“ Final Check ” shall have the meaning ascribed to such term in Section 3.1 of Appendix 2E.
“ Financing Party ” means the Security Trustee, the Liquidity Provider, Servicer, Manager, and any other Person or Persons, from time to time notified by Lessor to Lessee, from whom financing for the acquisition or continued ownership of the Aircraft by Lessor (or Owner if Lessor is not the Owner) has been, is to be, or is for the time being, obtained and/or in whose favour or for whose benefit security over the Aircraft is to be, or is for the time being, granted by Lessor or Owner (as the case may be), any security trustee, owner trust or trustee, manager, servicer, lender and/or financial guarantor.
“ Fixed Rent ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Commencement Date ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Payment Date ” means the first day of each Fixed Rent Period of the Lease Term and which is the date on which payment of Fixed Rent is due and payable.
“ Fixed Rent Period ” means the period commencing on and including the Fixed Rent Commencement Date and ending on and including the last day of the Calendar Month in which the Fixed Rent Commencement Date occurs and each of the consecutive Calendar Month periods thereafter throughout the Lease Term, provided that the final Fixed Rent Period of the Lease Term may consist of less than a full Calendar Month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a full Calendar Month.
“ Flight Hour ” means each hour or fraction thereof, measured to two decimal places, elapsing from the moment the wheels of the Airframe (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed) leave the ground on take-off to the moment when the wheels of the Airframe (or such aircraft on which an Engine, Landing Gear, or Part is (or was) then currently installed) touch the ground on landing.
“ GAAP ” means (i) generally accepted accounting principles in effect in Mexico or (ii) International Financial Reporting Standards and International Accounting Standards (and interpretations thereof) as in effect at the relevant time, and applied on a basis consistent with prior periods except as may be disclosed in the pertinent Person’s financial statements.
“ Governmental Authority ” means and includes (whether having a distinct legal personality or not) (a) any national government, political subdivision thereof, or local jurisdiction therein, (b) any board, commission, department, division, organ, instrumentality, court or agency of any entity referred to in (a) above, however constituted, and (c) any association, organisation or institution (international or otherwise) of which any entity mentioned in (a) or (b) above is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

	 	App 1 - 6	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Guarantee ” means that certain guarantee provided to Lessor by the Guarantor pursuant to which Guarantor has fully and irrevocably guaranteed all of Lessee’s Obligations.
“ Guarantor ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., a sociedad anónima promotora de inversion de capital variable organized and existing under the laws of the United Mexican States.
“ I.A.T.A. ” means the International Air Transport Association.
“ Indemnified Tax(es) ” means any Tax for which Lessee has an obligation of indemnity pursuant to Article 21 of the Lease.
“ Indemnitee ” means Lessor, Owner, Trust Company, Owner Participant, Security Trustee and the institution acting as such in its individual capacity, Liquidity Provider, Servicer, Manager, any Financing Party, and their respective Affiliates, officers, directors, shareholders, members, managers, duly authorised agents, employees and attorneys-in-fact and their respective successors and permitted assigns.
“ Information ” means the terms and conditions of this Lease and any other Operative Document and any other information delivered to any party to this Lease in connection with this Lease or any Operative Document.
“ Insurances ” means any and all contracts or policies of insurance (or reinsurance) required to be maintained from time to time under this Lease.
“ International Registry ” or “ IR ” means the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
“ Item of Equipment ” or “ Item ” means individually or collectively, as the context requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear, the APU and any of the Parts, whether or not installed in or attached to the Aircraft or the Airframe.
“ Landing Gear ” means the complete strut assembly of each landing gear installed on the Airframe on the Delivery Date (or any replacement for any such landing gear made pursuant to the terms of this Lease) and shall consist of the inner and outer cylinders of the main landing gear and the nose landing gear, including the truck assembly and axles of such landing gear.
“ Landing Gear Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “Landing Gear Overhaul Reserve”.
“ Law ” means and includes (a) any statute, decree, constitution, regulation, rule, order, judgment, AD or other directive of any Governmental Authority; (b) any treaty, pact, compact or other agreement to which any Governmental Authority is a party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any of the foregoing.
“ Lease ” means this Aircraft Lease Agreement, including all appendices, exhibits and schedules hereto, as the same may be amended from time to time.
“ Lease Supplement ” means the lease supplement dated the Delivery Date in the form of Appendix 4.

	 	App 1 - 7	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Lease Term ” means the period appearing in Appendix 2A which otherwise commences on the Delivery Date and ends on the Termination Date.
“ Lease Term Extension ” has the meaning set forth in Appendix 2A.
“ Lessee Acknowledgment ” means Lessee’s acknowledgment of security assignment substantially in the form set out in Appendix 8.
“ Lessee’s Actual Cost ” means Lessee’s cost incurred in performing an Obligation under this Lease, determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then Lessee’s Actual Cost shall be the actual charges, including, without limitation, shipping, freight mark-ups and handling charges of such third party charged to and paid by Lessee (but excluding shipping and freight charges and mark-ups, handling charges or overhead added by Lessee), and (ii) if Lessee elects that such obligation be performed by Lessee, then Lessee’s Actual Cost shall be ***** per labor hour (which hourly labor rate shall be increased by ***** at each calendar anniversary of the Delivery Date during the Lease Term) plus Lessee’s direct cost for materials and services provided by third parties without Lessee-imposed mark-ups, handling charges or overhead added to such third-party charges by Lessee.
“ Lessor Brake Contribution Amount ” has the meaning set forth in Appendix 2B.
“ Lessor Illegality Event ” means any event which makes it illegal under applicable Law for Lessor to proceed with the transaction evidenced hereby because of illegality in Lessor’s State of Organisation, or such illegality arises as a result of any act or omission of Lessor, other than:
(a)    where caused due to any bi-lateral or United Nations sanctions applicable in Lessor’s State of Organisation; or
(b)    in circumstances where an Illegality Event has also occurred in Lessee’s State of Organisation.
“ Lessor’s Lien ” means any Lien on the Aircraft or any Item of Equipment (i) granted to any Financing Party with respect to the Aircraft or any Item of Equipment except where the same are granted in connection with and following the occurrence and during the continuation of an Event of Default, (ii) arising as a result of any act of Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner or Owner Participant that is in violation of any of the obligations of such Person under the Lease and the other Operative Documents, (iii) any Claim against Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner, Owner Participant or any Person lawfully claiming by or through any of them that is unrelated to the transactions contemplated by the Lease, (iv) any Liens arising in connection with a Claim for which Lessee is not required to indemnify an Indemnitee hereunder; or (v) Taxes (including claims therefor) imposed on Lessor or any Affiliate of Lessor for which Lessee is not obligated to indemnify Lessor or such Affiliate pursuant to any of the Operative Documents.
“ LIBOR ” means, for any period, the three-month rate of interest per annum at which deposits in Dollars are offered to major banks in the London interbank market at approximately 11:00 a.m. (London time) three (3) Business Days before the first day of such period, as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as may replace such page on such system for the purpose of reporting London Interbank Offered Rates of major banks) under the heading for British Bankers Association Interest Settlement Rates in the column designated “USD” (U.S. Dollar).
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 1 - 8	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Lien ” means any mortgage, charge, pledge, lien, hypothecation, lease, title retention, assignment, trust arrangement, right of possession or detention or security interest of any kind, howsoever created or arising.
“ Life Limited Part ” or “ LLP ” means any Part that has a pre-determined life limit mandated by the Manufacturer or the Certificating Authority which requires any such Part to be discarded upon reaching such life limit.
“ Liquidity Provider ” means DVB Bank SE, its successors and assigns.
“ Lost Documents ” means Aircraft Documents that have suffered a Documents Loss.
“ Maintenance Check(s) ” means the 6 Year HMV Check and/or 12 Year HMV Check performed or to be performed on the Airframe, any Engine Restoration performed or to be performed on an Engine, any Engine LLP replacement or any Overhaul performed or to be performed on any Landing Gear or the APU. 
“ Maintenance Program ” mean Lessee’s maintenance program (as approved by the Aeronautics Authority) for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Aircraft and each Item of Equipment.
“ Maintenance Reserve Claim ” means any claim by Lessee for payment by Lessor from the applicable Maintenance Reserves of Reimbursable Expenses following completion by Lessee of a Maintenance Check.
“ Maintenance Reserve(s) ” means, collectively, as of any given time, the then current balance of payments received from Lessee and held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2C to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve, Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear Overhaul Reserve and APU Overhaul Reserve.
“ Manager ” means C.I.T. Leasing Corporation, a corporation organised under the laws of the State of Delaware, U.S.A. with its principal office located at 1 CIT Drive, Livingston, New Jersey, 07039-5703 U.S.A., its successors and assigns.
“ Manufacturer ” means, in the case of the Airframe, Airbus S.A.S., in the case of the Engines, IAE International Aero Engines AG, and in the case of any Item of Equipment, the manufacturer of such Item of Equipment.
“ Manufacturer’s Repair Manual ” means the most current revision of the respective (i) maintenance, repair or overhaul manual or (ii) the structural repair manual, each issued by the Manufacturer and applicable to the maintenance performed on the Aircraft or any Item of Equipment.
“ Mortgage Convention ” means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.

	 	App 1 - 9	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ MPD ” means the Airframe Manufacturer’s Maintenance Planning Document, as revised from time to time to include all revisions up to and including the then most current revision issued by the Airframe Manufacturer.
“ Net Event of Loss Proceeds ” means any Event of Loss Proceeds actually received by Lessor or Owner (or such other person entitled to receipt thereof), less any expenses (including reasonable attorney’s fees and costs) and/or Taxes incurred by Lessor (or any other relevant Person) in connection with the collection or receipt of such funds which would not otherwise have been incurred by Lessor (or such other relevant Person) absent the occurrence of such Event of Loss.
“ Obligations ” means all of Lessee’s obligations and liabilities now existing or hereafter arising under any Operative Document.
“ Operative Document(s) ” means, either collectively or individually as the context requires, this Lease, the Lease Supplement, the Acceptance Certificate, the Guarantee, any warranty assignment, acknowledgment and consent, any Permitted Sublease, the Lessee Acknowledgment, the Security Letter of Credit (if any), and any and all other documents, instruments and agreements entered into in connection with any of the foregoing and to which Lessee is a party or which Lessee acknowledges, in writing, is an Operative Document.
“ Overhaul ” means (as applicable):
(i)    with respect to any Landing Gear or Part, the complete refurbishment or major restoration of such Landing Gear or Part in accordance with the overhaul or restoration procedures in the respective Manufacturer’s Repair Manual for such Landing Gear or Part, the extent of which refurbishes or restores such Landing Gear or Part, as applicable, to a “zero time since overhaul” condition in accordance with such Manufacturer’s Repair Manual;
(ii)    with respect to the APU, the complete refurbishment or restoration of the compressor, combustion section and turbine of the APU pursuant to the Manufacturer’s Repair Manual; and
(iii)    with respect to any Engine, an Engine Restoration.
“ Owner ” means Lessor in its capacity as owner of the Aircraft or such other Person as Lessor may notify Lessee in writing from time to time as being the owner of the Aircraft.
“ Owner Participant ” means CIT Aviation Finance I Limited, a Bermuda limited liability company that is a tax resident in Ireland, which is the holder of the Beneficial Interest as owner participant under the Trust Agreement, its successors and permitted assigns.
“ Part(s) ” means all appliances, components, parts, instruments, appurtenances, accessories, furnishings, seats and other equipment and additions of whatever nature (other than Engines, the APU, any Landing Gear, and any temporary replacement parts installed pursuant to Article 12 of the Lease), which may from time to time be incorporated or installed in or attached to any Item of Equipment or which have been removed therefrom, but which remain associated with and/or form part of the Aircraft or any Item of Equipment pursuant to the terms of the Lease.
“ Past Due Rate ” means the lesser of (i) the rate per annum equal to LIBOR plus four hundred (400) basis points, and (ii) the maximum rate permitted by applicable Law.

	 	App 1 -10	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ PBH Period ” has the meaning set forth in Appendix 2B.
“ PBH Rent ” has the meaning set forth in Appendix 2B.
“ PBH Rent Payment Date ” the meaning set forth in Appendix 2B.
“ Permitted Liens ” means those Liens expressly permitted pursuant to Section 17.7 hereof.
“ Permitted Sublease ” means any sublease of the Aircraft to a Permitted Sublessee permitted under the terms and subject to the conditions of this Lease.
“ Permitted Sublessee ” means a Person:
(a)    which is a commercial passenger air carrier that holds the requisite licenses and approvals for the maintenance and operation of the Aircraft; and
(b)    with respect to which, at the time such Person becomes a Permitted Sublessee pursuant to the terms and conditions of this Lease and for the term of any Permitted Sublease to which such Permitted Sublessee is a party, no proceeding is pending or shall be instituted in connection with any insolvency, bankruptcy, reorganisation, examinership, administration, liquidation, moratorium or other Laws affecting the enforcement of creditors’ rights generally; and
(c)    that is expressly consented to in writing by Lessor, which consent shall be in Lessor’s sole discretion, acting reasonably.
“ Person ” means an individual, general partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or limited partnership, Governmental Authority or other entity of whatever nature.
“ Prior Lease ” means that certain aircraft lease agreement with respect to the Aircraft between an Affiliate of Lessor, as lessor, and Prior Operator, as lessee.
“ Prior Operator ” means Olympic Air Anonimos Eteria Aeroporikon Metaforon, d/b/a Olympic Air.
“ Quiet Enjoyment Letters ” means letters from each of Owner Participant and Security Trustee to Lessee substantially in the forms set out in Appendix 8.
“ Redelivery Location ” means such airport in Mexico or El Salvador as specified in writing by Lessee to Lessor no less than ten (10) Business Days prior to the Scheduled Termination Date, or such other location as may be agreed in writing by Lessor and Lessee prior to the Scheduled Termination Date.
“ Register ” means the registry of aircraft which is maintained in the State of Registration by the Aeronautics Authority having authority with respect to the registration of the Aircraft.
“ Reimbursable Event ” means, subject to the provisions and exclusions of Appendix 2C, the completion by Lessee during the Lease Term of a Maintenance Check or the replacement of any Engine Life Limited Parts.

	 	App 1 -11	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Reimbursable Expenses ” means, as the context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12 Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses, Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such terms are defined in Appendix 2C.
“ Related Lease(s) ” means any and all leases of aircraft between Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, or trustee on behalf of Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, as lessor, and Lessee or any Affiliate of Lessee, as lessee.
“ Related Lease Event of Default ” means, in relation to any Related Lease, any breach or default of Lessee’s obligations thereunder which constitute an “event of default” or similar event however termed thereunder under which the party to whom such obligations are owing would have the right to exercise remedies including the termination or cancellation of the Related Lease.
“ Related Obligations ” means the obligations and liabilities now existing or hereafter arising of Lessee or any Affiliate of Lessee under any Related Lease.
“ Rent ” means Basic Rent and Supplemental Rent payable pursuant to this Lease.
“ Required Approval ” means evidence documenting approval by the respective Airframe or Engine Manufacturer (as applicable) and the Certificating Authority with respect to (i) any repair to the Airframe or any Engine, where the accomplishment of such repair does not conform with the repair procedures set forth in the Manufacturer’s Repair Manual or an EASA approved service bulletin relevant to such repair and (ii) any alteration or modification of the Airframe or any Engine.
“ Return ” means the return of the Aircraft and all Items of Equipment to Lessor pursuant to and in accordance with Article 22 and the other provisions of this Lease.
“ Return Acceptance Certificate ” means the certificate substantially in the form of Appendix 7 to be executed and delivered by Lessor and Lessee at Return.
“ 6 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check and (b) each Task that has an initial interval of six (6) years and/or a repetitive interval of six (6) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 6 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “6 Year HMV Check Airframe Reserve”.
“ Scheduled Delivery Date ” means the scheduled date for Delivery identified in Appendix 2A which is the date Lessor expects the Prior Operator to return the Aircraft in accordance with the Prior Lease.
“ Scheduled Termination Date ” means the day on which the Lease Term is scheduled to expire (as provided in Appendix 2A), and which may be independent from the Termination Date as provided in the definition of such term.
“ Security Deposit ” means (i) the Cash Security Deposit and the Credit Security Deposit in the amounts set forth in Appendix 2B; including (ii) any amounts paid to Lessor pursuant to Sections 4.4 and 4.6(c); less (iii) any amounts applied or utilised by Lessor in accordance with the provisions of Sections 4.3 and 4.6(b), whether the same are paid in cash or in the form of a Security Letter of Credit.

	 	App 1 -12	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Security Letter of Credit ” means an unconditional and irrevocable letter of credit, satisfactory to Lessor in form and substance, in the amount of the Security Deposit and otherwise in compliance with the requirements of Section 4.6 and (i) drawn upon an issuer located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland or (ii) issued by a bank outside of Ireland and confirmed by Allied Irish Banks, AIB International Centre, IFSC, Dublin 1, Ireland (SWIFT: AIBKIE2D) or such other bank located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland, each issuing and confirming bank being acceptable to Lessor and having a credit rating not lower than A from Standard and Poor’s or A2 from Moody’s, and which shall include any replacements, supplements and amendments thereto.
“ Security Trust Agreement ” means that certain security trust agreement dated as of December 11, 2008 among Owner Participant, Security Trustee, and the other parties named therein, as amended and supplemented from time to time.
“ Security Trustee ” means Deutsche Bank Trust Company Americas, a New York banking corporation, as security trustee pursuant to the Security Trust Agreement, its successors and assigns.
“ Servicer ” means CIT Aerospace International, a company organised and existing under the Laws of Ireland and having its principal place of business at 3 George’s Dock, IFSC, Dublin 1, Ireland.
“ State of Organisation ” means the country and/or state under which Laws a Person is organised and existing, or, with respect to Lessor and Lessee, the country and/or state identified on the first page of this Lease.
“ State of Registration ” means the United Mexican States.
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent and payments in respect of Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under this Lease, including without limitation, and to the extent permitted by applicable Law, interest at the Past Due Rate calculated on any: (i) part of any installment of Basic Rent not paid on the date due hereunder for the period the same remains unpaid and (ii) Supplemental Rent or Maintenance Reserves not paid when due hereunder, until the same is paid.
“ 12 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check, (b) each Task that has a repetitive interval of six (6) years as set forth in the MPD, and (c) each Task that has an initial interval of twelve (12) years and/or a repetitive interval of twelve (12) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 12 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “12 Year HMV Check Airframe Reserve”.
“ Task(s) ” means each inspection or other requirement set forth in the MPD that (a) has a repetitive interval designated by a letter or combination of a letter and a number, or (b) is based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of calendar days, months and/or years.

	 	App 1 -13	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

“ Tax(es) ” means any taxes (including, without limitation, sales, use, business, gross or net income, personal property, license, documentation, transfer, import, export, fuel, leasing, occupational, value added, excess profits, excise, gross or net receipts, franchise, stamp, environmental and other taxes), levies, imposts, withholdings, fees, assessments, duties and other charges of any nature, and any penalties, fines, additions to tax, interest or other charges related thereto which are imposed by any Governmental Authority or other taxing authority in any jurisdiction or by any international or multinational taxing or regulatory authority.
“ Termination Date ” means:
(i)    the Scheduled Termination Date if Return is completed on the Scheduled Termination Date; or
(ii)    the date, if other than the Scheduled Termination Date, of Lessee’s Return of the Aircraft with all Obligations then due for performance having been performed; or
(iii)    the date on which this Lease terminates in accordance with Section 20.3 following the occurrence of an Event of Loss with respect to the Aircraft or the Airframe following Delivery; or
(iv)    the date of termination of this Lease following the occurrence of an Illegality Event in accordance with
Section 27.1(b); or
(v)    the date on which this Lease is cancelled or terminated pursuant to Article 24 following the occurrence of an Event of Default.
“ Time Controlled Part ” means any Item of Equipment, including any Life Limited Part, having a Task applicable to it based upon a predetermined time limit or interval in accordance with the MPD to the extent such Task requires such Item of Equipment to be discarded, overhauled, or re-certified upon reaching such time limit or interval.
“ Trust Agreement ” means the Amended and Restated Declaration of Trust (Aircraft 3252) dated as of December 19, 2008 between Owner Participant and Wilmington Trust SP Services (Dublin) Limited, as amended, supplemented and assigned, pursuant to which Owner holds legal title to the Aircraft and acts for the benefit of Owner Participant with respect to the Aircraft.
“ Trust Company ” means Wilmington Trust SP Services (Dublin) Limited, acting in its individual capacity, and its successors and assigns.
“ U.S. ” or “ U.S.A. ” means the United States of America.
“ VAT ” means any Tax that is, or is in the nature of, a value added, turnover, sales, use, rental, leasing, services, goods and services, consumption, or transaction privilege Tax.
“ Watch Item ” means any maintenance requirement or inspection of the Aircraft or applicable Item of Equipment following the Termination Date that results from a defect with respect to the Aircraft that was discovered during the Lease Term (and is not due to a routine inspection requirement for all aircraft of the same model as the Aircraft resulting from an Airworthiness Directive, service bulletin or Manufacturer’s recommendations) and is in addition to the maintenance and inspection requirements set forth in the

	 	App 1 -14	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

MPD, and where such additional inspection shall be required prior to the later of the accumulation of (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles, or (iii) twenty (20) months, as applicable.
“ Wet Lease(s) ” means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee shall at all times maintain full operational, technical and navigational control and maintenance oversight of the Aircraft, (ii) the Aircraft shall be operated solely by crews employed or contracted by Lessee possessing all current appropriate Aeronautics Authority certificates and licenses (it is understood that cabin attendants need not be regular employees of Lessee), (iii) the Insurances shall remain in full force and effect ( provided that such Insurance with respect to legal liabilities for passenger and cargo may be on a contingent basis for the duration of any such arrangement as long as such third party under such arrangement maintains primary coverage for such insurance in favour of Lessor, Lessee, and any Indemnitee and Additional Insureds in accordance and strict compliance with the terms, conditions, and requirements of this Lease, evidence of which in the form of a certificate of insurance and letter of undertaking from the brokers of such third party under such arrangement shall be provided to Lessor prior to the commencement of such arrangement), (iv) the Aircraft shall be used and maintained by Lessee as otherwise required by and in accordance with the terms and conditions of this Lease.

	 	App 1 -15	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

Appendix 2
to Aircraft Lease Agreement
COMMERCIAL TERMS
[NOTE: THE TERMS OF THIS APPENDIX 2 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 2 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
Contents:
Appendix 2A   Lease Term
Appendix 2B   Rent, Security Deposit, Insurance and other Financial Matters
Appendix 2C   Maintenance Reserves
Appendix 2D   Delivery Conditions
Appendix 2E   Return Conditions

	 	App 2 - 1	 		
	 		 	APPENDIX 2	
	 		 	COMMERCIAL TERMS	

Appendix 2A
to Aircraft Lease Agreement
LEASE TERM
 
1.	Scheduled Delivery Date is on or about *****, but in any event, no later than *****.	
 
2.	Lease Term	
Subject to Section 3 below, the Lease Term shall commence on the Delivery Date and shall end on, but not later than, 11:59 P.M. New York, New York time on the later to occur of:
 
 	(a)	the day that is ***** and ***** from the Delivery Date, or	
 
 	(b)	the date on which the next anticipated 6 Year HMV Check (or, in the event the 6 Year HMV Check interval is extended or uses different terminology, such other structural inspection of equivalent scope and detail as the 6 Year HMV Check) is completed,	
but which shall in any event end on the Termination Date.
 
3.	Lease Term Extension Option	
(a)    Provided no Default or Event of Default shall have occurred and be continuing, Lessee may extend the Lease Term for ***** additional months (“ Lease Term Extension ”) on the same terms and conditions (except with respect to the amount of Basic Rent as more fully set forth in paragraph (b) below), provided that Lessee shall provide Lessor with irrevocable written notice of its intention to exercise such extension option at least ***** months prior to the Scheduled Termination Date.
(b)    Basic Rent for the Lease Term Extension shall be in an amount reflecting the fair market rate at the time of extension as agreed between Lessor and Lessee prior to but not later than the time that Lessee exercises its option to extend the Lease Term of the Lease as set forth in paragraph (a) above. If Lessor and Lessee are unable to agree to an amount of Basic Rent for the Lease Term Extension, then Lessee’s option to extend the Lease Term shall lapse.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 2	 		
	 		 	APPENDIX 1	
	 		 	DEFINITIONS	

Appendix 2B
to Aircraft Lease Agreement
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS
 
1.	Basic Rent. Lessee shall pay Basic Rent during the Lease Term as follows:	
1.1.     PBH Rent . For that portion of the Lease Term commencing on the Delivery Date and continuing through and including the twenty-eighth (28 th ) day after the Delivery Date (the “ PBH Period ”), Lessee shall pay Basic Rent to Lessor on a power-by-the-hour basis at the rate of ***** per Flight Hour (the “ PBH Rent ”). The PBH Rent shall be paid in arrears on or prior to the fifteenth (15 th ) day following the last day of the PBH Period (the “ PBH Rent Payment Date ”). For the avoidance of doubt and by way of example, if Delivery occurs on 12 December 2010, the PBH Period would commence on 12 December 2010 and continue through and including 08 January 2011, and the PBH Rent Payment Date would be 23 January 2011.
1.2.     Fixed Rent . Subject to Sections 1.3 and 1.4 below, for the remainder of the Lease Term period commencing on the day immediately following the last day of the PBH Period (the “ Fixed Rent Commencement Date ”) and continuing through the end of the Lease Term (but not including any Lease Term Extension), Lessee shall pay Basic Rent to Lessor in advance on each Fixed Rent Payment Date in respect of each Fixed Rent Period in the amount of ***** per Fixed Rent Period (the “ Fixed Rent ”), prorated for any partial Fixed Rent Period.
1.3.     Fixed Rent Reduction due to Change of Brakes.  Lessor has agreed to partially reimburse Lessee for the cost of changing the brakes on the Aircraft from Messier-manufactured brakes to Goodrich-manufactured brakes in an amount equal to ***** (the “ Lessor Brake Contribution Amount ”). In order to receive the Lessor Brake Contribution Amount and provided (i) no Event of Default has occurred and is continuing and (ii) Lessee has provided Lessor with documentation reasonably acceptable to Lessor providing evidence of the installation of such Goodrich-manufactured brakes, Lessee may offset the first five (5) non-prorated Fixed Rent payments by ***** each, such that Lessor’s Fixed Rent obligation for each of such five (5) Fixed Rent Periods will be *****. Lessee shall reinstall the Messier-manufactured brakes on the Aircraft prior to Return. For the avoidance of doubt, title to and ownership of the Messier-manufactured brakes and the Goodrich-manufactured brakes shall vest with Lessor throughout the Lease Term, with title to and ownership of the Goodrich-manufactured brakes to transfer to Lessee at the time of Return.
1.4.     Delayed Delivery . In the event Lessor tenders the Aircraft for delivery on or after *****, Lessee’s Obligation to pay Fixed Rent for the second Fixed Rent Period of the Lease Term shall automatically be waived by Lessor.
 
2.	Security Deposit – Timing of Payments and Amounts.	
2.1.    Prior to the execution of this Lease, Lessee has paid Lessor the amount of *****; one (1) Business Day following execution of this Lease, Lessee shall deposit with Lessor an additional amount of *****; and one (1) Business Day prior to the Scheduled Delivery Date, Lessee shall deposit with Lessor an additional amount of *****.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 3	 		
	 		 	APPENDIX 2B	
	 		 	RENT, SECURITY DEPOSIT, INSURANCE	
	 		 	AND OTHER FINANCIAL MATTERS	

2.2.    Notwithstanding the foregoing, subject to no Default or Event of Default having occurred during the first six (6) months of the Lease Term, the total Security Deposit requirement hereunder shall be reduced to *****, and Lessor shall automatically apply ***** of the Security Deposit towards Lessee’s Fixed Rent payment due for the seventh (7 th ) Fixed Rent Period during the Lease Term.
2.3.    In the event a Default or Event of Default has occurred during the first six (6) months of the Lease Term, the total Security Deposit requirement hereunder shall remain at ***** throughout the Lease Term.
 
3.	Account	
All payments made under this Lease or any other Operative Document shall be made to the account set forth below by wire transfer of immediately available funds to its correspondent bank:

Bank:	  	Deutsche Bank Trust Company Americas
60 Wall Street, 26 th Floor
Mail Stop NYC60-2606
New York, NY 10005	
Account Number:	  	*****	
ABA Number:	  	*****	
SWIFT:	  	*****	
		
For the account of:	  		
Account Name:	  	*****	
Account Number:	  	*****	
Reference:	  	*****	
 
4.	Insurances	
4.1. Liability Insurance Coverage Amount: *****.
4.2. Agreed Value: *****, which amount shall be reduced by ***** at each anniversary of the Delivery Date during the Lease Term.
4.3. Engine Agreed Value (each Engine): *****.
4.4. Aircraft Hull Deductible Amount: ***** per occurrence.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 4	 		
	 		 	APPENDIX 2B	
	 		 	RENT, SECURITY DEPOSIT, INSURANCE	
	 		 	AND OTHER FINANCIAL MATTERS	

5.	Legend	
“Leased from WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, dublin, ireland as TRUSTEE/LESSOR”
 
6.	Notices	

If to Lessee:
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma No. 490
Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210
México, D.F.
 
Attention: Director Jurídico
Fax: +52 (55) 5211 9613	  	If to Lessor:
 
Wilmington Trust SP Services (Dublin) Limited
First Floor, 7 Exchange Place
International Financial Services Centre
Dublin 1
Ireland
Fax: +353 1 612 5550
 
with a copy to Servicer, as follows:
 
CIT Aerospace International
3 George’s Dock
IFSC
Dublin 1
Ireland
Attention: Chief Counsel
Fax: +353 1 656 1001
 
and, with respect to any insurance notification,
with a copy to:
 
CIT Aerospace
11 West 42nd Street, 12th Floor
New York, NY 10036, USA
Attention: Portfolio Services
Fax: +1 (877) 525 9183
Email: alice.arazny@cit.com	

	 	App 2 - 5	 		
	 		 	APPENDIX 2B	
	 		 	RENT, SECURITY DEPOSIT, INSURANCE	
	 		 	AND OTHER FINANCIAL MATTERS	

Appendix 2C
to Aircraft Lease Agreement
MAINTENANCE RESERVES
 
1.	Maintenance Reserves - Airframe	
 
 	A.	6 Year HMV Check Airframe Reserve	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 6 Year HMV Check Airframe Reserve ”).
(ii)    Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 6 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 6 Year HMV Check Airframe Reserve as of the date of commencement of such 6 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 6 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 6 Year HMV Check, the Tasks accomplished during such 6 Year HMV Check shall have included, as a minimum, (a) each six (6) year or seventy-two (72) month Task, (b) each Task that has an initial or repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 6 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
(iii)    Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first 6 Year HMV Check to be accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the 6 Year HMV Check Airframe Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a)    the amount by which (I) the 6 Year HMV Check Airframe Reimbursable Expenses incurred during the first 6 Year HMV Check accomplished following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the 6 Year HMV Check Airframe Reserve with respect to the Aircraft; or
(b)    the amount equal to the 6 Year HMV Check Airframe Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months of operation) accumulated since the later of the date that the Aircraft was delivered new to the Prior Operator or the date of completion of the most recent 6 Year HMV Check accomplished on the Aircraft at the time of Delivery.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 6	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

B.	12 Year HMV Check Airframe Reserve	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 12 Year HMV Check Airframe Reserve ”).
(ii)    Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 12 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 12 Year HMV Check Airframe Reserve as of the date of commencement of such 12 Year HMV Check (all such qualifying expenses are hereinafter referred to as “12 Year HMV Check Airframe Reimbursable Expenses”), provided that at the time of completion of such 12 Year HMV Check, the Tasks accomplished during such 12 Year HMV Check shall have included, as a minimum, (a) each twelve (12) year or one hundred forty-four (144) month Task, (b) each Task that has a repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred (4,500) Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 12 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
(iii)    Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first 12 Year HMV Check to be accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the 12 Year HMV Check Airframe Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a)    the amount by which (I) the 12 Year HMV Check Airframe Reimbursable Expenses incurred during the first 12 Year HMV Check accomplished following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the 12 Year HMV Check Airframe Reserve with respect to the Aircraft; or
(b)    the amount equal to the 12 Year HMV Check Airframe Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months of operation) accumulated since the later of the date that the Aircraft was delivered new to the Prior Operator or the date of completion of the most recent 12 Year HMV Check accomplished on the Aircraft at the time of Delivery.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 7	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

2.	Maintenance Reserves - Engines	
 
 	A.	Engine Restoration Reserves	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor the amount determined under clause (ii) below multiplied by the number of Flight Hours of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as, with respect to each Engine, an “ Engine Restoration Reserve ” and collectively, the “ Engine Restoration Reserves ”). A separate Engine Restoration Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii)    The amount used to calculate Lessee’s payment due under clause (i) above shall be determined on a monthly basis and shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Calendar Month for which such payment is due:

Actual Flight
Hour/Cycle
(        :1)	    	Rate	
4.0	    	*****	
3.9	    	*****	
3.8	    	*****	
3.7	    	*****	
3.6	    	*****	
3.5	    	*****	
3.4	    	*****	
3.3	    	*****	
3.2	    	*****	
3.1	    	*****	
3.0	    	*****	
2.9	    	*****	
2.8	    	*****	
2.7	    	*****	
2.6	    	*****	
2.5	    	*****	
2.4	    	*****	
2.3	    	*****	
2.2	    	*****	
2.1	    	*****	
2.0	    	*****	
1.9	    	*****	
1.8	    	*****	
1.7	    	*****	
1.6	    	*****	
1.5	    	*****	
1.4	    	*****	
1.3	    	*****	
1.2	    	*****	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 8	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

			
Actual Flight
Hour/Cycle
(        :1)	    	Rate	
1.1	    	*****	
1.0	    	*****	
0.9	    	*****	
0.8	    	*****	
0.7	    	*****	
0.6	    	*****	
0.5	    	*****	
(iii)    Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Restoration Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an Engine Restoration on an Engine during the Lease Term for which such Engine Restoration Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Restoration Reimbursable Expenses ”), provided that at the time of completion of such Engine Restoration, as a minimum:
(a)    the Engine was restored to a condition having an expected minimum of sixteen thousand five hundred (16,500) Flight Hours without any requirement for a shop visit prior to the expiration of such time; and
(b)    each Life Limited Part installed in the Engine had no less than eight thousand five hundred (8,500) Cycles (and equivalent calendar time, if applicable, with calendar time determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer) remaining to its life limit, provided, however, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the minimum number of Cycles required for each Life Limited Part as set forth above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the minimum number of Cycles set forth above should be increased or decreased based upon the then current information available to both Lessee and Lessor as to the average Flight Hour to Cycle ratio operated by all similar model aircraft worldwide; and
(c)    the Engine was in compliance with all AD’s to the extent that (i) such AD was issued prior to the date such Engine Restoration was completed and (ii) by the terms of such AD, compliance with such AD would otherwise be required on or prior to the commencement date of the next anticipated restoration shop visit of the relevant Engine.
(iv)    Engine Restoration Reimbursable Expenses shall only include Lessee’s Actual Cost incurred in connection with Engine disassembly, repair, Overhaul, assembly and any required testing accomplished in connection with the accomplishment of such Engine Restoration.
(v)    Engine Restoration Reimbursable Expenses shall not include the cost of replacement Life Limited Parts installed in connection with the accomplishment of such Engine Restoration.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 9	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

(vi)    Notwithstanding anything to the contrary in the preceding clause (iii), solely with respect to the first Engine Restoration accomplished by Lessee on each Engine following Delivery, in addition to the amount paid by Lessee with respect to the Engine Restoration Reserve applicable to the Engine on which such Engine Restoration was accomplished, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a)    the amount by which (I) the Engine Restoration Reimbursable Expenses incurred by Lessee during the first Engine Restoration accomplished for such Engine following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the Engine Restoration Reserve with respect to such Engine; or
(b)    the amount equal to the Engine Restoration Reserve Rate set forth in clause (ii) above (as of the Delivery Date without adjustment for inflation) multiplied by the number of Flight Hours of operation accumulated on such Engine since the later of the date that the Engine was delivered new or since the date of completion of the most recent Engine Performance Restoration accomplished on such Engine at the time of Delivery.
 
 	B.     Engine	Life Limited Parts Reserves	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** multiplied by the number of Cycles of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Engine Life Limited Parts Reserve ”). A separate Engine Life Limited Parts Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii)    Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Life Limited Parts Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the purchase by Lessee of any Engine Life Limited Part during the Lease Term that is installed in an Engine for which such Engine Life Limited Parts Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Life Limited Parts Reimbursable Expenses ”).
(iii)    Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first replacement of each Engine Life Limited Part of each Engine accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the applicable Engine Life Limited Parts Reserve, Lessor shall reimburse Lessee, or pay such other Person as directed by Lessee, the amount by which the Engine Life Limited Parts Reimbursable Expenses incurred by Lessee exceeds the amount paid by Lessee with respect to the Engine Life Limited Parts Reserve with respect to such Engine, but in no event shall the sum of all such excess Engine Life Limited Parts Reimbursable Expenses paid by Lessor exceed the amount that is equal to the product of the Engine Life Limited Parts Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustments applied during the Lease Term) multiplied by the total number of Cycles accumulated by each such replaced Engine Life Limited Part as at the time of Delivery as set forth in the Acceptance Certificate.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 -10	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

3.	Maintenance Reserves – Other Items	
 
 	A.     Landing	Gear Overhaul Reserve	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Landing Gear Overhaul Reserve ”).
(ii)    Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) the total prorated amount held by Lessor in the Landing Gear Overhaul Reserve account (as prorated in accordance with sub-section (iii) below) as of the commencement date of such Landing Gear Overhaul (such prorated account balance amount being hereinafter referred to as “ Landing Gear Overhaul Reimbursable Expenses ”), provided that at the time of completion of such Overhaul of any Landing Gear, such Landing Gear shall have no existing condition that would require the removal of such Landing Gear prior to completing the full Overhaul interval as set forth in the MPD.
(iii)    In no event shall any reimbursement for a Landing Gear Overhaul of any individual Landing Gear exceed an amount that is in excess of a percentage of the total amount, then currently held by Lessor in the Landing Gear Overhaul Reserve, equal to ***** for each of the left and right main Landing Gear, and ***** for the nose Landing Gear.
(iv)    Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first Overhaul of each Landing Gear accomplished by Lessee following the Delivery Date, in addition to the percentage amount with respect to such Landing Gear paid by Lessee with respect to the applicable Landing Gear Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a)    the amount by which (I) the Landing Gear Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for each such Landing Gear following the Delivery Date exceeds (II) the percentage amount that Lessee was required under this Lease to pay with respect to the Landing Gear Overhaul Reserve with respect to such Landing Gear; or
(b)    the amount equal to the applicable percentage amount of the Landing Gear Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months) of operation accumulated since the later of the date that such Landing Gear was delivered new or the date of accomplishment of the most recent Overhaul on such Landing Gear at the time of Delivery.
 
 	B.     APU	Overhaul Reserve	
(i)    Pursuant to Section 13.1 of the Lease, Lessee shall pay Lessor ***** multiplied by the number of APU Hours of operation of the APU during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ APU Overhaul Reserve ”).
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 -11	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the APU Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an APU Overhaul on the APU during the Lease Term (all such qualifying expenses are hereinafter referred to as “ APU Overhaul Reimbursable Expenses ”), provided that at the time of completion of such APU Overhaul, as a minimum:
(a) the APU was restored to a condition such that it can be reasonably expected to operate for a minimum of five thousand (5,000) APU Hours without any requirement for a shop visit prior to the expiration of such time;
(b) each Life Limited Part installed in the APU had no less than five thousand (5,000) APU Cycles remaining to its life limit; and
(c) the APU was in compliance with all AD’s to the extent that, by the terms of each AD, compliance was required within any of (i) five thousand APU Hours, or (ii) five thousand (5,000) APU Cycles, or (iii) twenty-four (24) months, as applicable.
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first APU Overhaul accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the APU Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a)    the amount by which (I) the APU Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for the APU following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the APU Overhaul Reserve with respect to the APU; or
(b)    the amount equal to APU Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of APU Hours of operation accumulated since the later of the date that the APU was delivered new or the date of accomplishment of the most recent APU Overhaul on the APU at the time of Delivery.
 
4.	Maintenance Reserve Claims	
A. Prior to the accomplishment of any Maintenance Check for which Lessee intends to make a Maintenance Reserve Claim, Lessee shall provide Lessor with the workscope and, to the extent available from the Approved Maintenance Provider, the estimated cost of accomplishing such Maintenance Check, for approval by Lessor as to whether or not such workscope complies with the requirements for reimbursement as set forth in this Appendix 2C herein.
B. Following completion of such Maintenance Check in accordance with the approved workscope, Lessee may present its Maintenance Reserve Claim to Lessor for payment by delivery of an invoice for the amount of Reimbursable Expenses claimed by Lessee together with documentation satisfactory to Lessor evidencing completion of such Maintenance Check in accordance with the approved workscope and the cost associated therewith.

	 	App 2 -12	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

C.    Lessor shall reimburse Lessee by paying ( x ) to Lessee (provided Lessee has delivered to Lessor evidence of payment by Lessee for the amount of such Reimbursable Expenses) or ( y ) upon receipt of written instruction from Lessee, to Lessee’s maintenance provider performing such Maintenance Check (provided Lessor has received evidence of payment by Lessee for the amount of all estimated expenses that exceed the amount to be paid by Lessor as set forth herein). Such amount shall equal the lesser of (i) the amount of such Reimbursable Expenses for such Maintenance Check, or (ii) the amount of the respective Maintenance Reserve for such Reimbursable Event. Notwithstanding the foregoing, upon Lessee’s request, and at Lessor’s option and sole discretion, Lessor may pay up to ***** of the amount then currently held by Lessor in the applicable Maintenance Reserve account directly to the maintenance provider performing the applicable Reimbursable Event (each an “ Induction Payment ”) following Lessor’s receipt of a copy of the intended workscope and a preliminary invoice related to such Reimbursable Event, all in form and substance reasonably satisfactory to Lessor.
D.    In any case in which the amount paid to Lessee by Lessor hereunder is not sufficient to pay the cost of such Maintenance Check, Lessee shall be obligated to and shall pay directly any such shortfall, without further contribution from Lessor, and Lessee shall not subsequently be permitted to make a Maintenance Reserve Claim for such amounts under this Lease.
 
5.	Exclusions from Reimbursable Expenses	
The following shall be and are specifically excluded from Reimbursable Expenses:
(i)     with respect to all Maintenance Checks, expenses incurred in connection with or as a result of (A) an accident, faulty maintenance or installation, incident, improper operations, abuse, neglect, or misuse, (B) any maintenance and material required for or in connection with elective Parts replacement, AD compliance and Aeronautics Authority and/or Certificating Authority regulation compliance, (C) any maintenance and material covered by, or reimbursable by, a claim under any Manufacturer’s warranties or by insurance (with deductibles being treated as reimbursable by insurance for purposes of this exclusion), (D) modifications (including interior reconfiguration), (E) the accomplishment of service bulletins, (F) any deferred maintenance discrepancies (G) any maintenance and material required to correct or repair damage caused by the ingestion by an Engine or the APU of a foreign object external to such Engine or APU (“ FOD ”), (H) ( x ) the cost of shipping any Engine, Engine LLP, Landing Gear or the APU, or ( y ) ferrying the Aircraft to the maintenance facility performing such Maintenance Check, (I) any fees or expenses incurred by representatives of Lessee, (J) handling charges or other mark-ups by Lessee, (K) removal and installation charges with respect to (1) any Engine (for Engine Restoration or Engine LLP replacement) or (2) any Landing Gear or APU for Overhaul, (L) any maintenance or replacement of Parts (when such maintenance or replacement is as a result of (aa) Time Controlled Part requirements of the Maintenance Program or (bb) a routine requirement of any task card), provided, however, Reimbursable Expenses shall include the cost to repair or replace any Part that requires maintenance or replacement solely as a result of failing a routine requirement for an operational or functional test of any Task while installed on the Aircraft, and (M) Taxes paid or due and payable on or in connection with the accomplishment of the Maintenance Check and any labor and materials supplied thereunder;
(ii)     with respect to an Engine Restoration, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for the removal and installation of quick engine change components and Parts (“ QEC ”), except when such QEC is removed or installed at the maintenance facility of the
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 13	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

Approved Maintenance Organisation accomplishing such Engine Restoration, (B) replacement, repair or Overhaul of external engine Parts, including QEC, (C) rental of tooling or equipment for the removal, installation or shipping of the Engine and (D) charges incurred for the use of a temporary replacement engine;
(iii)     with respect to the replacement of Engine LLPs, in addition to the exclusions listed in clause (i) above, (A) an amount equal to the product of ( x ) the Manufacturer’s then current catalogue price of the replacement LLP which is the subject of Lessee’s Maintenance Reserve Claim divided by its Cycle life limit, multiplied by ( y ) the Cycles remaining to its Cycle life limit on the LLP replaced, and (B) any labor or additional materials costs associated with the replacement of any such Engine LLP;
(iv)     with respect to any Landing Gear Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) the repair, replacement or Overhaul of rotable parts such as wheels, tires, brakes, transducers, switch assemblies, side struts, braces, and uplock and downlock mechanisms, (B) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation accomplishing such Landing Gear Overhaul), (C) replacement, repair or Overhaul of external Landing Gear Parts, (D) rental of tooling or equipment for the removal, installation and shipping of the Landing Gear and (E) charges incurred for the use of a temporary replacement landing gear; and
(v)     with respect to an APU Overhaul, in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation in order to perform such APU Overhaul), (B) replacement, repair or Overhaul of external APU Parts, (C) rental of tooling or equipment for the removal, installation and shipping of the APU and (D) charges incurred for the use of a temporary replacement auxiliary power unit.
 
6.	Adjustment/Revision of Maintenance Reserve Rates	
A.     Adjustment for Inflation. The Maintenance Reserve rates set forth in paragraphs 1, 2A and 3 above (inclusive of subsections and including the table appearing in Section 2A(ii)), shall be increased for inflation on 1 June of each calendar year (commencing 1 June 2011) by a percentage amount equal to ***** by adding: ( x)  the product of the then current Maintenance Reserve rate multiplied by the value of *****, and ( y ) the then current Maintenance Reserve rate, as the same has been increased in accordance with this paragraph 6A.
B.     Revision of Engine LLP Parts Reserve Rate. The Engine Life Limited Parts Reserve rate set forth in paragraph 2B shall be revised on 1 June of each calendar year of the Lease Term so that it equals the sum of the then current cost per Cycle of each Engine Life Limited Part of each Engine. The cost per Cycle of each such Engine Life Limited Part shall be determined by dividing ( x ) the then current catalog list price of each Engine Life Limited Part for each Engine by ( y ) the Engine Manufacturer’s then published cyclic life for each respective Engine Life Limited Part.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 2 - 14	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

7.	General	
A.    All payments in respect of Maintenance Reserves that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
B.    In no event shall Lessor be obligated to reimburse or make any payment to Lessee under this Appendix 2C, whether due to a Maintenance Reserve Claim or otherwise, (i) if and for so long as a Default or Event of Default has occurred and is continuing or (ii) with respect to a Maintenance Reserve Claim which has not been made within the time limits specified in Section 13.4 of the Lease. Lessor shall not be obligated to cure any such Default or Event of Default by granting an offset to Lessee for any amounts that would be payable hereunder in the absence of such Default or Event of Default.
C.    All Maintenance Reserves shall be managed, held, applied and reimbursed strictly in accordance with the provisions of this Lease, and any determinations and/or calculations made or to be made in respect of any Maintenance Reserve Claims shall be managed by personnel who are experienced and familiar with aircraft and operating leases of this type, and the payment of any Maintenance Reserve reimbursement amounts due and owing to Lessee under this Appendix 2C shall not be unreasonably withheld.
D.    The disposition of all Maintenance Reserves following the occurrence of an Event of Loss of the Aircraft shall be made in accordance with the provisions of Section 20.3(b) of the Lease.
E.    Each installment of Maintenance Reserves paid by Lessee shall accrue interest from the date of its receipt by Lessor. The rate at which interest shall accrue on the Maintenance Reserves from time to time shall be the “30 Day Dealer Commercial Paper Rate” as reported on Reuters Page 23. The rate of interest shall be initially determined as of the Delivery Date and shall be reset on each three (3) month anniversary of the Delivery Date thereafter during the Lease Term. Any interest earned on the Maintenance Reserves shall become part of the Maintenance Reserves, and shall be subject to the terms hereof applicable to Maintenance Reserves.
F.    For the avoidance of doubt, Lessor acknowledges and agrees that reimbursement for any Engine Restoration or APU Overhaul shall be based on the accomplishment of a workscope encompassing the elements and requirements as set forth and contemplated in this Appendix 2C, regardless of whether or not the FAA Form 8130-3 issued in respect of the relevant Engine or APU specifically references that a “restoration” or “overhaul” was completed.

	 	App 2 -15	 		
	 		 	APPENDIX 2C	
	 		 	MAINTENANCE RESERVES	

Appendix 2D
to Aircraft Lease Agreement
DELIVERY CONDITIONS
 
1.	GENERAL	
1.1.    The Aircraft shall be airworthy with no existing condition that exceeds Manufacturer’s allowable limits and shall be eligible for the immediate issuance of a standard DGAC Certificate of Airworthiness for passenger operations.
1.2.    The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings. Any placards shall be in both Spanish and English and shall be replaced if required, with Lessee to provide Lessor with such English and Spanish placards for installation prior to Delivery.
1.3.    Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4.    The Aircraft shall comply with all AD’s required by the Certificating Authority which by their terms require compliance within ninety (90) days from scheduled redelivery date of the Aircraft under the Prior Lease, notwithstanding any waiver, deviation or time extension obtained from any aeronautics authority or the Certificating Authority.
1.5.    The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirement Part M, and certain conditions applicable to FAR Part 129 as required for Lessee’s flight operations.
1.6.    The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessor shall repair any such leaks discovered.
1.7.    Lessor shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the applicable aeronautics authority for certification of airworthiness for aircraft to be exported from the then current state of registration and acceptable to the DGAC).
1.8.    All repairs accomplished prior to Delivery shall be permanent repairs completed in accordance with the Airframe Manufacturer’s structural repair manual or Manufacturer’s approved data for the Aircraft.
1.9.    The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10.    Lessor shall deliver to Lessee, without charge to Lessee, all service bulletin kits applicable to the Aircraft in Lessor’s possession for installation on the Aircraft by Lessee with appropriate instructions for installation provided with such kits.

	 	App 2 -17	 		
	 		 	APPENDIX 2D	
	 		 	DELIVERY CONDITIONS	

1.11.    The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.12.    The Aircraft will:
 
 	(a)	be capable of operating to and from runways narrower than forty-five (45) meters;	
 
 	(b)	be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;	
 
 	(c)	possess both fuel and weight quantity indicators indicating kilograms;	
 
 	(d)	incorporate an EGPWS/TAWS system;	
 
 	(e)	possess a reinforced cockpit door; and	
 
 	(f)	be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.	
 
2.	PAINT	
The Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted in Lessee’s standard livery using a quality paint. All other areas of the Aircraft where paint is peeled, chipped or worn out, shall be restored as necessary to provide a uniform appearance. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant.
 
3.	AIRFRAME	
The Aircraft shall not have been operated in commercial passenger service since completion of the redelivery check of the Aircraft pursuant to the Prior Lease, which shall have included the next due complete C-Check (and HMV Check if such check is due within the intervals set forth for a block C-Check) as per the Prior Operator’s maintenance program which shall have included the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) that were due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) months, as applicable, following the scheduled redelivery date of the Aircraft pursuant to the Prior Lease (such check being hereinafter referred to as the “ Delivery Check ”).
 
4.	INTERIOR	
4.1.    Cockpit windows shall not have any (i) crazing, (ii) delamination or, (iii) any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.2.    Passenger compartment windows shall have no visible crazing that obstructs the view from the window.

	 	App 2 -18	 		
	 		 	APPENDIX 2D	
	 		 	DELIVERY CONDITIONS	

4.3.    All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessor.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1.    Lessee may (i) witness and accept Lessor’s borescope inspection of the Engines and APU in connection with the redelivery of the Aircraft by Prior Operator, or (ii) may accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessee’s representative or, at Lessee’s expense, an agency selected by Lessee. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessor’s expense.
5.2.    (a)    Each Engine shall have accumulated no more than thirteen thousand (13,000) Flight Hours since new or since completion of its most recent Engine Restoration.
          (b)    Each Engine Life Limited Part shall have a minimum of ten thousand (10,000) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A maximum power assurance engine run-up shall be performed in the presence of Lessee’s representatives prior to Delivery of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees (30°) Celsius.
5.4.    The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.
5.5.    Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) sixty (60) months, and (ii) seven thousand (7,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the Scheduled Delivery Date based upon the landing gear overhaul interval set forth in the MPD.
 
6.	INSPECTION	
6.1.    (a)    Subject to the consent of the Prior Operator, Lessee may have representatives on board the Aircraft as observers during a redelivery acceptance flight of the Aircraft performed by the Prior Operator using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and the Prior Operator. If Lessee’s representatives are on board during such redelivery acceptance flight by the Prior Operator, such acceptance flight shall be the acceptance flight for all purposes under this Lease. Lessee shall ensure Lessor’s representative (or the Prior Operator’s representative if Lessor’s representative is not on board during such redelivery acceptance flight) has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor (or the

	 	App 2 -19	 		
	 		 	APPENDIX 2D	
	 		 	DELIVERY CONDITIONS	

Prior Operator’s representative if Lessor’s representative was not on board during such redelivery acceptance flight). To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall reimburse Lessor at the cost actually paid by Lessor, if any, to the Prior Operator for such flight.
  (b)    If Lessee’s representatives are not on board during such redelivery acceptance flight by the Prior Operator, then the first flight following Delivery, with Lessor’s representatives on board and using the Airframe Manufacturer’s recommended acceptance flight procedures for used aircraft (or such other procedures acceptable to Lessor and Lessee), shall be the acceptance flight for all purposes set forth herein, and such acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessee shall ensure Lessor’s representative has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall be responsible for all costs with respect to such flight.
6.2.    Lessee shall inspect the Aircraft and Aircraft Documents (the “ Acceptance Inspection ”) prior to the Delivery Date. To the extent permitted by the Prior Operator, the Acceptance Inspection of the Aircraft and the Aircraft Documents shall be accomplished in conjunction with the redelivery inspection to be accomplished by Lessor during the redelivery process of the Aircraft from the Prior Operator, and such Acceptance Inspection of the Aircraft shall include the opening or removal of panels as reasonably required by Lessee and include access to all compartments and bays opened during Lessor’s redelivery inspection, provided, however, panels that were previously opened, during the redelivery check accomplished by the Prior Operator, shall not be required to be opened again if Lessee was given an opportunity to inspect, but failed to inspect in such areas while such panels were previously open. All discrepancies discovered during such Acceptance Inspection (i) of the Aircraft, that exceed the Manufacturer’s Repair Manual allowable limits shall be permanently repaired by Lessor, and (ii) of the Aircraft Documents, to the extent such Aircraft Documents are not acceptable to Lessee, Lessor shall make reasonable efforts to correct such discrepancies at no cost to Lessee. Lessee shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein.
6.3.    On the Delivery Date, Lessor shall deliver to Lessee all Aircraft Documents required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and all other Aircraft Documents in the possession of Lessor, and all Aircraft Documents required for the importation of the Aircraft into Mexico shall be in English. The Aircraft Documents required pursuant to this Section 6.3, shall include, to the extent then in Lessor’s possession, (i) Overhaul records with respect to each Engine, Landing Gear and the APU, (ii) Time Controlled Part traceability to Overhaul for then currently installed Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown

	 	APP 2 -20	 		
	 		 	APPENDIX 2D	
	 		 	DELIVERY CONDITIONS	

reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (iii) Life Limited Part traceability to manufacture (“zero time since new”) for then currently installed Life Limited Parts, (iv) inspection records (including records with respect to the accomplishment of Tasks, (v) records pertaining to evidence of compliance with AD’s, (vi) burn test certification records, (vii) log books, (viii) FAA, EASA and other Aeronautics Authority forms, (ix) records of compliance with Manufacturer’s service bulletins, (x) time logs showing Aircraft and Engine Flight Hours and Cycles on any given prior date, and (xi) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
6.4.    All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessee’s representative shall operationally check all systems prior to the delivery of the Aircraft and all defects found shall be permanently repaired by Lessor, at Lessor’s expense, prior to delivery of the Aircraft.

	 	App 2 - 21	 		
	 		 	APPENDIX 2D	
	 		 	DELIVERY CONDITIONS	

Appendix 2E
to Aircraft Lease Agreement
RETURN CONDITIONS
 
1.	GENERAL	
1.1.    The Aircraft shall (i) be airworthy and have been maintained and operated in accordance with the Lease with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by Lessee and (ii) comply with the Airframe Manufacturer’s original type certificate specifications, as revised up to the Termination Date, subject to any modifications installed during the Lease Term in compliance with the terms of this Lease.
1.2.    The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings, and any required placards pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be replaced if unreadable, missing or not in the English language. Placards that are not required pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be removed upon Lessor’s request.
1.3.    Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment as were installed on the Aircraft on the Delivery Date or pursuant to Article 12 hereto, or were delivered by Lessor to Lessee pursuant to the terms of the Lease shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4.    The Aircraft shall comply with all EASA AD’s which by their terms require compliance (without application or utilisation of any alternate method of compliance) on or before the date that is ninety (90) days after the Termination Date, notwithstanding any waiver, deviation or time extension obtained from the Aeronautics Authority, the Certificating Authority or any other aeronautics authority, or otherwise.
1.5.    The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirements, Part M.
1.6.    The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessee shall repair any such leaks discovered.
1.7.    Lessee shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the Aeronautics Authority for certification of airworthiness for aircraft to be exported from the State of Registration) to a country advised by Lessor. At Lessor’s request, and provided the same shall not impact Lessee’s use of the Aircraft throughout the Lease Term or otherwise result in a delay in redelivery, Lessee shall modify the Aircraft to comply with the requirements of the aeronautics authority of such country to which the Aircraft will be exported, provided, however, if such Lessor requested modifications are not also a requirement of the Certificating Authority and/or EASA, Lessor shall reimburse Lessee for Lessee’s Actual Cost incurred in performing such modifications.
1.8.    All temporary repairs accomplished during the Lease Term, including repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair in accordance with the Airframe Manufacturer’s structural repair manual for the Aircraft) and those

	 	App 2 - 22	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair and all external doublers (scab patches) installed during the Lease Term shall be replaced with flush repairs, all in accordance with ( x ) the Manufacturer’s Repair Manual, or ( y ) Required Approval, provided, however , such replacement of a doubler shall not be required where installation of such doubler is (i) the only approved repair in accordance with the Manufacturer’s Repair Manual, (ii) the result of a Manufacturer recommended service bulletin accomplishment, or (iii) where a flush repair cannot be accomplished due to inaccessibility of the area. For the avoidance of doubt, to the extent that any repair accomplished prior to Delivery was accomplished using an external doubler (scab patch) and requires inspection during the Lease Term, the parties agree that any such repair work accomplished prior to Delivery will be deemed to constitute a permanent repair for purposes of this paragraph 1.8.
1.9.    The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10.    Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished to Lessee without charge and which have not been so installed together with appropriate instructions for installation provided with such kits.
1.11.    The quantity of fuel on board the Aircraft at Return shall not be less than the quantity of fuel on board the Aircraft at Delivery.
1.12.    On or prior to Return and on such later date as requested by Lessor, Lessee shall provide Lessor such excerpts from the Maintenance Program and/or general procedures manual as Lessor may reasonably request (i) in order to substantiate procedures followed by Lessee and/or documentation used by Lessee which are specific to the Maintenance Program, in connection with the Return of the Aircraft to Lessor, and (ii) to assist with the bridging of the Aircraft onto a maintenance program other than the Maintenance Program subsequent to the Return of the Aircraft to Lessor.
1.13.    If the Manufacturer’s Repair Manuals for the Aircraft were customised for or by Lessee during the Lease Term, Lessee will, at Lessee’s cost and expense, cause the Airframe Manufacturer to restore the Manufacturer’s Repair Manuals, revised up to and including the most recent revisions issued by the Airframe Manufacturer, to the status as they were at Delivery (or to be re-customised to such other customisation as timely requested by Lessor, with Lessor to pay any incremental increase over the cost to restore the Manufacturer’s Repair Manuals to the customisation as at Delivery) on the basis of the Aircraft no longer being part of Lessee’s fleet of aircraft, and Lessee will return to Lessor with the Aircraft the Manufacturer’s Repair Manuals so revised and restored or re-customised (as the case may be). To the extent the same are not revised and restored as required herein, Lessee hereby grants Lessor a perpetual, worldwide, non-exclusive, fully paid license to use Lessee’s customised Manufacturer’s Repair Manuals for itself and to further sub-license the same to any other Person as Lessor deems necessary and reasonable in the circumstances, without payment or compensation to Lessee.
1.14.    The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.15.    The Aircraft will:
 
 	(a)	be capable of operating to and from runways narrower than forty-five (45) meters;	

	 	App 2 - 23	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

 	(b)	be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;	
 
 	(c)	possess both fuel and weight quantity indicators indicating kilograms;	
 
 	(d)	incorporate an EGPWS/TAWS system;	
 
 	(e)	possess a reinforced cockpit door; and	
 
 	(f)	be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.	
1.16.    The Messier-manufactured brakes that were installed on the Aircraft at Delivery shall be installed on the Aircraft at Return as contemplated in Section 1.3 of Appendix 2B to the Lease.
 
2.	PAINT	
The Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding or stripping the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted using a paint of a quality reasonably acceptable to Lessor, or as otherwise agreed by Lessor in writing, in a color scheme, including logo, as directed by Lessor, provided, however, (i) the Aircraft shall be painted white if Lessor is unable to supply the necessary patterns in sufficient time to permit completion of the painting of the color scheme and logo without causing a delay in the redelivery of the Aircraft and (ii) if painted in the color and logo as directed by Lessor, then Lessor shall reimburse Lessee for the incremental cost in excess of the cost Lessee would have incurred to paint the Aircraft in its own livery, and all such preparation and painting shall be in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant. All required placards and markings shall be in the English language and shall be replaced if not in English, or if deteriorated.
 
3.	AIRFRAME	
Immediately prior to Return, the Aircraft shall have completed ( x ) a C-Check and will include the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) which will be due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clauses (i), (ii) and (iii) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated in the MPD during the Lease Term), and ( y ) a 6 Year HMV Check or a 12 Year HMV Check, if such 6 Year HMV Check or 12 Year HMV Check would otherwise require accomplishment within (iv) six thousand (6,000) Flight Hours, (v) four thousand five hundred (4,500) Cycles and (vi) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clause (y) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated during the Lease Term (such checks being hereinafter referred to as the “ Final Check ”). The Aircraft shall not have been operated in revenue service since completion of the Final Check. The Final Check shall be performed by an Approved Maintenance Organisation approved by Lessor. Lessee shall give Lessor not less than ten (10) Business Days’ prior written notice of the commencement date of such Final Check. The Aircraft shall be weighed during such Final Check.

	 	App 2 - 24	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

4.	INTERIOR	
4.1.    The Aircraft shall be in the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) at Lessor’s option, (i) as when such Aircraft was originally delivered to Lessee hereunder, (ii) as subsequently provided or paid for by Lessor, or (iii) as otherwise set forth in this Lease or as otherwise agreed between the parties.
4.2.    Cockpit windows shall not have any crazing or delamination, nor shall the cockpit windows have any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.3.    Passenger compartment windows shall have no visible crazing.
4.4.    All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessee.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1.    Prior to Return and following the redelivery flight for the Aircraft, Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessor’s representative or, at Lessor’s expense, an agency selected by Lessor. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessee’s expense.
5.2.    (a)    In the event that an Engine Restoration is performed on an Engine, such Engine shall have accumulated no more than ten thousand five hundred (10,500) Flight Hours since completion of its most recent Engine Restoration.
          (b)    Each Engine Life Limited Part shall have a minimum of four thousand five hundred (4,500) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3.    Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A full take-off power engine run-up (high power assurance test) shall be performed in the presence of Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees Celsius (30° C.). Lessee shall be responsible, at its expense, for correcting any deficiencies which exceed or are outside of the Airframe Manufacturer’s Repair Manual allowable limits for an installed engine.
5.4.    The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.

	 	App 2 -25	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

5.5.    Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) forty (40) months, and (ii) six thousand (6,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the earlier to occur of the Scheduled Termination Date or the Termination Date, based upon the landing gear overhaul interval set forth in the MPD.
 
6.	INSPECTION	
6.1.    Immediately prior to Return, Lessee shall perform a redelivery acceptance flight of the Aircraft with Lessor’s representatives on board (subject to any limitation imposed by either Lessee’s insurance or the Aeronautics Authority with respect to the number of Lessor’s representatives permitted to be on board during such redelivery acceptance flight), using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and Lessee. Upon request of Lessor, Lessee shall permit representatives of the next subsequent lessee or purchaser of the Aircraft to be on board during such redelivery acceptance flight as observers, with one such observer to be permitted to occupy the cockpit jump seat during the entire flight. Such redelivery acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessor shall ensure Lessee’s representative has observed each discrepancy found. Immediately following the redelivery acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits, Lessee shall correct such discrepancy. Lessee shall have no obligation to pay the cost of correcting any discrepancies discovered during such redelivery acceptance flight which were not acknowledged in writing by its representative by its representative. Lessor shall reimburse Lessee at Lessee’s Actual Cost for the fuel consumed during such redelivery acceptance flight and Lessee shall be responsible for all other expenses associated with such flight and shall furnish the necessary permits and crews.
6.2.    Lessor shall inspect the Aircraft, including the Aircraft Documents, (the “ Final Inspection ”) prior to the Termination Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include the opening or removal of panels as reasonably required by Lessor, and access to all compartments and bays. All discrepancies discovered during such Final Inspection (a) of the Aircraft that exceed the Manufacturer’s Repair Manual allowable limits, or that are not pursuant to the terms of this Lease, shall be permanently repaired by Lessee and (b) of the Aircraft Documents, to the extent that such Aircraft Documents are missing or incomplete, shall be corrected at Lessee’s expense. Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by Lessor and Lessee but which shall be no later than thirty (30) days prior to the Scheduled Termination Date. All Aircraft Documents shall be prepared by Lessee prior to the commencement of the Final Inspection of such Aircraft Documents by Lessor and shall be complete and made available to Lessor at the time of commencement of the Final Inspection of such Aircraft Documents by Lessor. Any Aircraft Documents generated during the period following commencement of such Final Inspection of the Aircraft Documents shall be delivered to Lessor for inspection as promptly as possible, but in any event prior to Return.
6.3.    On the Termination Date, Lessee shall deliver to Lessor all Aircraft Documents (a) delivered to Lessee with respect to the Delivery of the Aircraft to Lessee and (b) required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and (c) to the extent not provided in the preceding clauses (a) and (b), all other Aircraft Documents applicable to the Aircraft with respect to any maintenance, inspections, repairs and modifications accomplished during the Lease Term. The Aircraft Documents required pursuant to this Section 6.3 herein, shall include:

	 	App 2 - 26	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

(i)    with respect to clause (a), the most recent revision issued by the respective Manufacturer for the Manufacturer’s Repair Manuals and in the same format as on the Delivery Date;
(ii)    with respect to clause (b), (1) Tasks, repairs, and modifications accomplished during the Lease Term and (2) Time Controlled Parts and other Items installed during the Lease Term and then currently installed, as a minimum, (A) Overhaul records with respect to each Engine, Landing Gear and the APU, (B) traceability to Overhaul for Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (C) Life Limited Part traceability to manufacture (“zero time since new”) for LLPs then installed on the Airframe or either Engine, (D) FAA Form 8130-3 or EASA Form One, or any successor thereto, (E) records of modifications and repairs, (F) records of compliance with Manufacturer’s service bulletins, (G) documentation of Required Approvals (including applicable supplemental type certificates) required pursuant to this Lease, and in addition to such Required Approvals, documentation of Aeronautics Authority and Certificating Authority approval, (H) inspection records (including records with respect to the accomplishment of Tasks), (I) records pertaining to evidence of compliance with AD’s, and (J) burn test certification records for interior Items;
(iii)    with respect to clause (c), to the extent then in Lessee’s possession, (A) log books, (B) FAA, EASA and other Aeronautics Authority forms not included in paragraph (ii) above, (C) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date during the Lease Term, and (D) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
Any discrepancies found in the Aircraft Documents shall be corrected, and any missing Aircraft Documents shall be reconstructed by Lessee at Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents of maintenance, inspection, modification, and Overhauls accomplished during the Lease Term shall be in the English language. In the event that any Aircraft Documents are not provided to Lessor, or are not in the English language, the Aircraft shall be deemed not to meet the return conditions of this Appendix 2E and of Article 22 of the Lease. If Lessee subscribes to Manufacturer’s on-line data access services, Lessee must nonetheless return the Manufacturer’s Repair Manuals with all current revisions provided by Manufacturer in a format acceptable to Lessor.
6.4.    All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessor’s representative shall operationally check all systems prior to the return of the Aircraft and all defects found shall be permanently repaired by Lessee, at Lessee’s expense, prior to return of the Aircraft.

	 	App 2 - 27	 		
	 		 	APPENDIX 2E	
	 		 	RETURN CONDITIONS	

Appendix 3
to Aircraft Lease Agreement
[NOTE: THE TERMS OF THIS APPENDIX 3 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 3 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
ACCEPTANCE CERTIFICATE
(MSN 3252)
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”) hereby acknowledges that on this             day of             20    , Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) did deliver for inspection and acceptance by Lessee under the Aircraft Lease Agreement made between Lessor and Lessee dated as of 17 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”) the Aircraft, as described below, together with all Aircraft Documents applicable thereto, in accordance with the Lease. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
 
 	(a)    Airframe		

Aircraft Model:	  	Airbus A319-132	
		
Manufacturer’s Serial Number:	  	3252	
		
Certified Weights:	  	Max Take-off:                                    
Max Zero Fuel:                                  
Max Landing:                                    
Max Taxi:                                           
Operating Empty:                             	
 
 	    Airframe	Maintenance Status:	

Total Flight Hours:                     	
Total Cycles:                     	
	
Total Flight Hours Since Last 6 Year HMV Check:                     	
Total Cycles Since Last 6 Year HMV Check:                     	
Date Last 6 Year HMV Check Accomplished:                     	
	
Total Flight Hours Since Last 12 Year HMV Check:                     	
Total Cycles Since Last 12 Year HMV Check:                     	
Date Last 12 Year HMV Check Accomplished:                     	
	
Total Flight Hours Since Last C-Check:                     	
Total Cycles Since Last C-Check:                     	
Date Last C-Check Accomplished:                     	

	 	App 3 -1	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

 	(b)	Engines (Installed)	

Engine Type:	  	 	IAE V2524-A5	  	
		
Manufacturer’s Serial Numbers:	  	  	                                   and                             	   	
		
Maximum Takeoff Thrust Rating:	  	  	                                                       lbs.	   	
		
Engines Maintenance Status:	  				
		
Position 1	  				

ESN:                     	  		
Total Flight Hours:                     	  		
Total Cycles:                      	  		
Total Flight Hours Since Last Engine Restoration:                     	  		
Total Cycles Since Last Engine Restoration:                     	  		
Date of Last Engine Restoration:                     	  		
		
Position 2	  		
		
ESN:                     	  		
Total Flight Hours:                     	  		
Total Cycles:                     	  		
Total Flight Hours Since Last Engine Restoration:                     	  		
Total Cycles Since Last Engine Restoration:                     	  		
Date of Last Engine Restoration:                     	  		
 
 	(c)         APU	(Installed)	

APU Type	  		
		
Manufacturer’s Serial Number:	  		
		
APU Maintenance Status:	  		
		
Total APU Hours:                     	  		
Total APU Cycles:                     	  		
Total APU Hours Since Last Overhaul:                     	  		
Total APU Cycles Since Last Overhaul:                     	  		
Date of Last Overhaul:                     	  		
 
 	(d)         Landing	Gear (Installed)	

Manufacturer’s Serial Numbers:	 	Left Main:                    
Right Main:                  
Nose:                             	

	 	App 3 - 2	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

 	Landing	Gear Maintenance Status:	

Left Main	
	
Total Flight Hours:                     	
Total Cycles:                     	
Total Flight Hours Since Last Overhaul:                     	
Total Cycles Since Last Overhaul:                     	
Date of Last Overhaul:                     	
	
Right Main	
	
Total Flight Hours:                     	
Total Cycles:                     	
Total Flight Hours Since Last Overhaul:                     	
Total Cycles Since Last Overhaul:                     	
Date of Last Overhaul:                     	
	
Nose	
	
Total Flight Hours:                     	
Total Cycles:                     	
Total Flight Hours Since Last Overhaul:                     	
Total Cycles Since Last Overhaul:                      	
Date of Last Overhaul:                      	
 
 	(e)	Interior Configuration	

Seating	
	
Lavatories	
	
Galleys	
	
Passenger Service Units	
	
PSIU	
 
 	(f)	Aircraft Documents; Aircraft Manuals; Hard Time Components; Avionics; Loose Equipment Inventory	
 
 	    	As identified in Attachment 1 to this Acceptance Certificate.	
 
 	(g)	Fuel on Board provided at Lessor’s cost:                      kgs.	
 
2.	Rent Payment Date:                     	

	 	App 3 - 3	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

3.	Acceptance for Delivery	
(a)    Lessee hereby confirms to Lessor on                         , 20            at             GMT at             ,             that the above described Aircraft is in accordance with the specifications, terms and conditions for Delivery set forth in the Lease, is satisfactory in all respects and is in the condition required for Delivery under the Lease.
(b)    The Scheduled Termination Date is                     20            *.
 
 	*	NOTE: This stated date is provided for the convenience of the parties only and the provisions of Article 2 of, and Appendix 2A to, the Lease shall be controlling.	
(c)    Lessee confirms that the Aircraft has been examined by its duly appointed and authorised representatives and the same conforms to the information set forth above.
(d)    To Lessee’s knowledge, (i) no Default or Event of Default has occurred and is continuing, (ii) and Lessee has no claims, offsets, deductions, set-offs or defenses of any kind or nature in connection with the Lease.
(e)    The execution and delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes, as between Lessee and Lessor, conclusive proof that the Aircraft is delivered in accordance with the description set forth in and in the condition required by the Lease, (iii) Lessee hereby expressly waives any right it may have to revoke acceptance of the Aircraft pursuant hereto for any reason, notwithstanding any nonconformity, discovered, difficult of discovery, or undiscovered, on the date hereof, and (iv) Lessee hereby unconditionally and irrevocably waives its right to revoke acceptance of Delivery of any Item of Equipment.
 
4.	Governing Law	
THIS ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	 	App 3 - 4	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

IN WITNESS WHEREOF, this Acceptance Certificate has been executed and delivered this             day of             20            .

	 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. de C.V. ( D / B / A VOLARIS)	
		
	 	By:                                                                              	
		
	 	Name:                                                                         	
		
	 	Title:                                                                           	
		
	 	By:                                                                              	
		
	 	Name:                                                                         	
		
	 	Title:                                                                           	

	 	App 3 - 5	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

Attachment 1 to Acceptance Certificate
Delivery Inventory
Aircraft Documents
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Aircraft Manuals
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Loose Equipment
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Avionics Inventory
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Hard Time Components Inventory
 
 	1.	-----------	
 	2.	-----------	
.
.
.

	 	App 3 - 6	 		
	 		 	APPENDIX 3	
	 		 	ACCEPTANCE CERTIFICATE	

Appendix 4
to Aircraft Lease Agreement
LEASE SUPPLEMENT
(MSN 3252)
LEASE SUPPLEMENT dated as of             , 20            , (this “ Lease Supplement ”), between WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, as lessor (“ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS), as lessee (“ Lessee ”).
Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of 17 November 2010, (as amended, supplemented, novated and/or assigned, the “ Lease ”) and the defined terms therein being hereinafter used with the same meaning. The Lease provides for the execution and delivery of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof.
The Lease and this Lease Supplement relate to the Aircraft as more precisely described below and in the Acceptance Certificate. A counterpart of the Lease is attached hereto and shall be filed together with this Lease Supplement with the Aeronautics Authority.
In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows:
1.    Lessor hereby delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under and pursuant to the Lease the Aircraft described below, together with the Aircraft Documents described in the Lease (the “ Delivered Aircraft ”):

Aircraft Model:	  	Airbus A319-132	
		
Manufacturer’s Serial Number:	  	3252	
		
Installed Engines:	  	Two (2) IAE V2524-A5 Engines	
		
Manufacturer’s Serial Numbers:	  	                                          and                                             	
		
Mexican Registration Mark:	  		
2.    The Delivery Date of the Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof.
3.    By execution and delivery of this Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term subject to the Lease.

	 	App 4 - 1	 		
	 		 	APPENDIX 4	
	 		 	LEASE SUPPLEMENT	

4.    The amount of Basic Rent for the Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.
5.    Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of the Lease, (ii) the Aircraft is insured as required by the Lease, (iii) the representations and warranties of Lessee referred to in Article 9 of the Lease are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease, and (v) the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Lease.
6.    THIS LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7.    This Lease Supplement may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Lease Supplement; provided, that to the extent, if any, that this Lease Supplement constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
8.    This Lease Supplement supplements and forms a part of the Lease. The Lease and all Operative Documents, as supplemented hereby, are hereby ratified, approved and confirmed in all respects.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

	 	App 4 - 2	 		
	 		 	APPENDIX 4	
	 		 	LEASE SUPPLEMENT	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. de C.V. ( D / B / A VOLARIS)
Lessee
 
By:                                                               
 
Name:                                                          
 
Title:                                                            
 
By:                                                               
 
Name:                                                          
 
Title:                                                           	  	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor
 
By:                                                              
 
Name:                                                          
 
Title:                                                           	
[MSN 3252]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	 	App 4 - 3	 		
	 		 	APPENDIX 4	
	 		 	LEASE SUPPLEMENT	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. de C.V. ( D / B / A VOLARIS)
Lessee
 
By:                                                               
 
Name:                                                          
 
Title:                                                            
 
By:                                                               
 
Name:                                                          
 
Title:                                                           	  	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor
 
By:                                                              
 
Name:                                                          
 
Title:                                                           	
[MSN 3252]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	  	SECURITY TRUSTEE RECEIPT
 
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as the Security Trustee
 
By:                                                              
 
Name:                                                          
 
Title:                                                           
 
By:                                                              
 
Name:                                                          
 
Title:                                                           	

	 	App 4 - 4	 		
	 		 	APPENDIX 4	
	 		 	LEASE SUPPLEMENT	

Appendix 5
to Aircraft Lease Agreement
[RESERVED]

	 	App 5 - 1	 		
	 		 	APPENDIX 5	
	 		 	[RESERVED]	

Appendix 6A
to Aircraft Lease Agreement
LESSOR’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 3252
Lease Execution Date: 17 November 2010
Scheduled Delivery Date: ***** 

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Chattel Paper Original of Lease (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Lease Execution Date	  		
				
2.	  	Lease Agreement, with Lessee’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
3.	  	Guarantee, with Guarantor’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
4.	  	Opinion of Lessee’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
5.	  	Opinion of Guarantor’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
6.	  	Powers of Attorney evidencing the appointment of Lessee’s and Guarantor’s Agent for Service of Process pursuant to Section 26.3 of the Lease and Section 15 of the Guarantee, respectively, together with Powers of Attorney evidencing such appointment, duly notarised under and pursuant to Mexican Law	  	Lease Execution Date	  		
				
7.	  	Security Deposit installment of ***** due under Appendix 2B	  	One (1) Business Day after Lease Execution	  		
				
8.	  	Written evidence of company action authorising Lessee’s lease of the Aircraft and execution, delivery and performance of the Lease	  	Seven (7) Business Days after Lease Execution	  		
				
9.	  	Written evidence of company action authorising Guarantor’s execution, delivery and performance of the Guarantee	  	Seven (7) Business Days after Lease Execution	  		
				
10.	  	Incumbency Certificate of person or persons authorised to execute the Lease and related Operative Documents on behalf of Lessee	  	Seven (7) Business Days after Lease Execution	  		
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 6 - 1	 		
	 		 	APPENDIX 6	
	 		 	CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
11.	  	Incumbency Certificate of person or persons authorised to execute the Guarantee on behalf of Guarantor	  	Seven (7) Business Days after Lease Execution	  		
				
12.	  	Pledge Agreement as required under Sections 4.2 and 13.3(a)(i)	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
13.	  	Such financial information concerning each of Lessee and Guarantor and other documents and matters incident to the foregoing as Lessor may reasonably request, all in a form reasonably satisfactory to Lessor	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
14.	  	Power of Attorney evidencing the authority of Lessee’s representatives designated to accept delivery of the Aircraft and execute the Lease Supplement and Acceptance Certificate on behalf of Lessee at Delivery, duly notarised under and pursuant to Mexican Law	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
15.	  	Letter of Undertaking executed by independent aircraft insurance brokers and, if applicable, reinsurance brokers, each acceptable to Lessor, together with certificates of insurance and, if applicable, reinsurance, evidencing the insurances required to be maintained by Lessee under the Lease	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
16.	  	Application for Registration of the Aircraft with the DGAC duly executed by Lessee, together with the Lease and all other relevant Operative Documents to be recorded thereunder and Spanish translations thereof, certified by a court-approved translator	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
17.	  	Evidence of Lessee having registered as a Transacting User Entity (“TUE”) with the IR and provision of the DGAC access codes necessary in order to complete the appropriate IR registrations. In connection with the foregoing, Lessor shall cooperate with Lessee to obtain the DGAC access codes and shall provide Lessee with such documents as Lessee may reasonably request in connection with the foregoing.	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
18.	  	Security Deposit balance payment of ***** due under Appendix 2B	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
				
19.	  	Lessee Acknowledgment of Security Assignment	  	Delivery Date	  		
				
20.	  	Acceptance Certificate	  	Delivery Date	  		
				
21.	  	Chattel Paper Original of Lease Supplement (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Delivery Date	  		
				
22.	  	Lease Supplement, with Lessee’s signatures ratified before a notary public	  	Delivery Date	  		
				
23.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / Greek Aviation Authority	  	Delivery Date	  		
				
24.	  	Copy of Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority	  	Delivery Date	  		
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 6 - 2	 		
	 		 	APPENDIX 6	
	 		 	CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
				
25.	  	Copy of provisional Certificate of Registration for the Aircraft	  	Delivery Date	  		
				
26.	  	Evidence of Registration of the Aircraft, the Lease and related interests with the IR	  	Delivery Date	  		
				
27.	  	An opinion in a form acceptable to Lessor from Lessor’s special counsel in the State of Registration confirming, among other things, the due and proper registration of the Aircraft in the State of Registration and with the IR.	  	Delivery Date	  		
				
28.	  	An irrevocable power of attorney executed by Lessee in a form prescribed by Lessor, appointing Lessor or any other Person selected by Lessor as attorney-in-fact for Lessee to take all necessary actions on behalf of Lessee to obtain possession of and to remove the Aircraft from the jurisdiction of the State of Registration and from any other jurisdiction where the Aircraft may be located and/or registered and to de-register the Aircraft from the Register upon the cancellation, termination, or expiration of this Lease	  	Delivery Date	  		
				
29.	  	A duly executed Irrevocable De-Registration and Export Request Authorisation ( IDERA ) for filing with the IR	  	Delivery Date	  		
				
30.	  	Letters addressed (1) to air traffic control authority in the State of Registration, (2) in blank to relevant air traffic control authorities and airport authorities where Lessee operates or intends to operate the Aircraft and (3) to Eurocontrol (if the Aircraft is operated to or over Europe), authorising the recipient to issue to Lessor, upon Lessor’s request made from time to time, a statement of account of all sums due by Lessee to the authority with respect to the Aircraft and which letters shall survive the cancellation, termination and expiration of the Lease	  	Delivery Date	  		
				
31.	  	A certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or an Irish Revenue Form VAT 60B (or applicable successor form) with respect to the Lease, as requested by Lessor, to enable Lessor to comply with applicable Laws relating to VAT	  	Delivery Date	  		
				
32.	  	Follow up opinion of Lessee’s counsel in form and substance reasonably acceptable to Lessor	  	Delivery Date	  		
				
33.	  	Such other certificates, documents, opinions and agreements relating to the transactions contemplated by or related to this Lease and the other Operative Documents, as may be necessary or reasonably requested by Lessor	  	Delivery Date	  		
				
34.	  	Copy of permanent Certificate of Registration for the Aircraft showing due registration in the name of Lessor as owner and lessor and Lessee as lessee	  	Ninety (90) days following the Delivery Date	  		

	 	App 6 - 3	 		
	 		 	APPENDIX 6	
	 		 	CONDITIONS PRECEDENT	

Appendix 6B
to Aircraft Lease Agreement
LESSEE’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 3252
Lease Execution Date: 17 November 2010
Scheduled Delivery Date: ***** 

Item
No.	  	Description	  	Date Due	  	Status	
1.	  	Lease Agreement	  	Lease Execution Date	  		
				
2.	  	Power of Attorney evidencing the authority of Lessor’s representatives designated to execute the Lease and the Lease Supplement on behalf of Lessor	  	Lease Execution Date	  		
				
3.	  	Lease Supplement	  	Delivery Date	  		
				
4.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / Greek Aviation Authority	  	Delivery Date	  		
				
5.	  	Quiet Enjoyment Letter from Security Trustee	  	Delivery Date	  		
				
6.	  	Quiet Enjoyment Letter from Owner Participant	  	Delivery Date	  		
				
7.	  	Airframe Assignment of Warranties	  	Delivery Date	  		
				
8.	  	Engine Assignment of Warranties	  	Delivery Date	  		
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 6 - 4	 		
	 		 	APPENDIX 6	
	 		 	CONDITIONS PRECEDENT	

Appendix 7
to Aircraft Lease Agreement
RETURN ACCEPTANCE CERTIFICATE
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”) hereby acknowledges, pursuant to the Aircraft Lease Agreement made between Lessor and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”) dated as of 17 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”), that on this             day of             20__, at             :            GMT it has received from Lessee possession of the following Aircraft. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.

1. Aircraft Details	  		
		
(a)     Airframe	  		
		
Aircraft Model:	  	Airbus A319-132	
		
Manufacturer’s Serial Number:	  	3252	
		
Certified Weights:	  	Max Take-off:                           
Max Zero Fuel:                         
Max Landing:                           
Max Taxi:                                    
Operating Empty:                         	
	
Airframe Maintenance Status:	
	
Total Flight Hours:                     	
Total Cycles:                     	
	
Total Flight Hours Since Last 6 Year HMV Check:                     	
Total Cycles Since Last 6 Year HMV Check:                     	
Date Last 6 Year HMV Check Accomplished:                     	
	
Total Flight Hours Since Last 12 Year HMV Check:                     	
Total Cycles Since Last 12 Year HMV Check:                     	
Date Last 12 Year HMV Check Accomplished:                     	
	
Total Flight Hours Since Last C-Check:                     	
Total Cycles Since Last C-Check:                     	
Date Last C-Check Accomplished:                     	
		
(b)     Engines (Installed)	  		
		
Engine Type:	  	IAE V2524-A5	
		
Manufacturer’s Serial Numbers:	  	                              and 

					
	 	App 7 -1	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Maximum Takeoff Thrust Rating:                                           lbs.
Engines Maintenance Status:
Position 1
ESN:                         
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Engine Restoration:                     
Total Cycles Since Last Engine Restoration:                     
Date of Last Engine Restoration:                     
Position 2
ESN:                     
Total Flight Hours:                     
Total Cycles:                     
Total Flight Hours Since Last Engine Restoration:                     
Total Cycles Since Last Engine Restoration:                     
Date of Last Engine Restoration:                     
 
 	(c)	APU (Installed)	
 
    	APU Manufacturer & Model:                                                      	
 
    	Manufacturer’s Serial Number:                                          and	

    	APU Maintenance Status:	
     Total APU Hours:                         
     Total APU Cycles:                     
     Total APU Hours Since Last Overhaul:                     
     Total APU Cycles Since Last Overhaul:                     
     Date of Last Overhaul:                             
 
 	(d)	Landing Gear (Installed)	

Manufacturer’s Serial Numbers:	  	Left Main:                         
Right Main:                       
Nose:                                 	
 
    	Landing Gear Maintenance Status:	
Left Main

	 	App 7 -2	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Total Flight Hours:             
Total Cycles:             
Total Flight Hours Since Last Overhaul:             
Total Cycles Since Last Overhaul:             
Date of Last Overhaul:             
Right Main
Total Flight Hours:             
Total Cycles:             
Total Flight Hours Since Last Overhaul:             
Total Cycles Since Last Overhaul:             
Date of Last Overhaul:             
Nose
Total Flight Hours:             
Total Cycles:             
Total Flight Hours Since Last Overhaul:             
Total Cycles Since Last Overhaul:             
Date of Last Overhaul:             
 
 	(e)	Interior Configuration	

    Seating	  	 	  		  		  		
					
     Lavatories	  	 	  		  		  		
					
     Galleys	  	 	  		  		  		
					
     PassengerService Units	  	 	  		  		  		
					
     PSIU	  	 	  		  		  		
 
 	(f)	Aircraft Documents and Other Equipment	
As described in Attachment 1 to this Return Acceptance Certificate.
 
 	(g)	Fuel On Board:                                      kgs.	
 
2.	Maintenance Reserves (check one)	
             There are no claims for reimbursement from the Maintenance Reserves outstanding and unpaid as of the date hereof.
or
             Claims for reimbursement from the Maintenance Reserves are outstanding as of the date hereof and are itemised or otherwise described in Attachment [        ] hereto.

	 	App 7 - 3	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

3.	Return Acceptance	
The Aircraft and Aircraft Documents are hereby accepted by Lessor for return under the Lease subject to (i) the provisions of the Lease, and (ii) the correction by Lessee (or procurement by Lessee at Lessee’s cost) within             days following the date hereof of the discrepancies specified in Attachment 3 hereto.
 
4.	Termination of Lease	
Subject to the following paragraph, the Lease is hereby terminated without prejudice to Lessee’s continuing obligations and Lessor’s continuing rights under the Lease.
 
5.	Lessee’s Representations and Warranties	
Lessee represents and warrants that during the Lease Term all maintenance and repairs to the Aircraft and each Item of Equipment were performed in accordance with the requirements of the Lease.
 
6.	Governing Law	
THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance Certificate to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. de C.V. ( D / B / A VOLARIS)
Lessee
 
By:                                                               
 
Name:                                                          
 
Title:                                                            
 
By:                                                               
 
Name:                                                          
 
Title:                                                           	  	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor
 
By:                                                              
 
Name:                                                          
 
Title:                                                           	
[MSN 3252]

	 	App 7 - 4	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Attachment 1 to Return Acceptance Certificate
Aircraft Documents and Equipment Inventory
Aircraft Documents
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Aircraft Manuals
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Loose Equipment
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Avionics Inventory
 
 	1.	-----------	
 	2.	-----------	
.
.
.
Hard Time Components Inventory
 
 	1.	-----------	
 	2.	-----------	
.
.
.

	 	App 7 - 5	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Attachment 2 to Return Acceptance Certificate
Maintenance Reserve Claims Outstanding at Return
[ Write “None” if there are no claims outstanding]

Type of Work	 	Service Provider	 	Invoice Amount	
            -----	 	-----	 	-----	

	 	App 7 - 6	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Attachment 3 to Return Acceptance Certificate
Aircraft Discrepancies
[ Write “None” if there are no Aircraft Discrepancies]

	 	App 7 - 7	 		
	 		 	APPENDIX 7	
	 		 	RETURN ACCEPTANCE CERTIFICATE	

Appendix 8
to Aircraft Lease Agreement
FORMS
 
Form 1     Form	of Aircraft Utilisation Report	
Form 2     Maintenance	Status Report	
Form 3     Form	of Air Traffic Control and Airport Authorities Letter	
Form 4     Form	of Lease Termination Agreement	
Form 5     Form	of Recognition of Rights (Engines)	
Form 6     Form	of Lessee Acknowledgment of Security Assignment	
Form 7     Form	of Quiet Enjoyment Letter - Security Trustee	
Form 8     Form	of Quiet Enjoyment Letter - Owner Participant	

	 	App 8 - 1	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 1
Form of Aircraft Utilisation Report
UTILISATION REPORT
Lessee: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris)
Date of Report:                 20    
Report Period:                 20     through             20    
 
General Information

Aircraft Model: Airbus A319-132	  	Engine Type: IAE V2524-A5	
Airframe Serial Number: 3252	  	Lease Engine 1 Serial Number:                     	
Lease APU Serial Number:                         	  	Lease Engine 2 Serial Number:                     	
Lease Nose Landing Gear S/N:                     	  	Lease Left Main Gear S/N:                     	
	  	Lease Right Main Gear S/N:                     	
		
=======	  	=======	
Installed 1 Engine S/N:                     	  	Installed 2 Engine S/N:                     	
Installed APU S/N:                     	  	Installed Nose Landing Gear S/N:                       	
Installed Left Main Gear S/N:                     	  	Installed Right Main Gear S/N:                     	
Utilisation Information – Airframe

Airframe Flight Hours:                     	  	Airframe Cycles:                     	
Airframe Total FHSN:                     	  	Airframe Total CSN:                      	
Airframe Base:                     	  	Airframe Status:                     
[In Service; Check; etc.]	
Utilisation Information – Engines
Lease Engine 1 – Serial Number             

FH During Report Period:                     	  	Cycles During Report Period:                      	
FH:Cycle Utilisation Ratio:      :1	  	Cycles Since New:                     	
FH Since New:                     	  	Cycles Since Restoration:                     	
FH Since Restoration:                     	  	Installed On MSN:                     	
Airframe Position:                     	  	Airframe Reg Mark:                     	
Airframe Owner (if not Owner):                                                                                                                             	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                        	
Lease Engine 2 – Serial Number             

FH During Report Period:                     	  	Cycles During Report Period:                      	
FH:Cycle Utilisation Ratio:      :1	  	Cycles Since New:                     	
FH Since New:                     	  	Cycles Since Restoration:                     	
FH Since Restoration:                     	  	Installed On MSN:                     	

	 	App 8 - 2	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

			
Airframe Position:                     	  	Airframe Reg Mark:                      	
Airframe Owner (if not Owner):                                                                                                                                	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                                	
Installed Engine 1 – Serial Number                  (if not Lease Engine)

Engine Owner:                     	  	Airframe Position:                      	
Installed Engine 2 – Serial Number      (if not Lease Engine)

Engine Owner:                     	  	Airframe Position:                      	
Utilisation Information – APU
Lease APU – S/N                     

APU Hours During Report Period:                     	  	APU Cycles During Report Period:                       	
APU Hours Since New:                     	  	APU Cycles Since New:                     	
APU Hours Since Overhaul:                     	  	APU Cycles Since Overhaul:                     	
Installed On MSN:                     	  	Removed From Service:                      (Date)	
Airframe Reg Mark:                     	  	Current Location:                     	
Airframe Owner (if not Owner):                     	  		
Reason for Removal:                     	  		
Installed APU – Serial Number              (if not Lease APU)

APU Owner:                         	
Utilisation Information – Landing Gear
Lease Nose Landing Gear – S/N                 

FH During Report Period:                     	  	Cycles During Report Period:                      	
FH Since New:                     	  	Cycles Since New:                     	
FH Since Overhaul:                     	  	Cycles Since Overhaul:                     	
Removed From Service:              (Date)	  	Current Location:                     	
Reason for Removal:                     	
Installed Nose Landing Gear – S/N              (if not Lease Nose Landing Gear)

NLG Owner:                     	
Lease Left Main Landing Gear – S/N                     

FH During Report Period:                     	  	Cycles During Report Period:                      	
FH Since New:                     	  	FH Since Restoration:                     	
Cycles Since New:                     	  	Cycles Since Restoration:                     	
Removed From Service:              (Date)	  	Current Location:                     	
Reason for Removal:                                                                                               	

	 	App 8 -3	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

			
Installed Left Main Landing Gear – S/N              (if not Lease Left Main Landing Gear)	
	
Left MLG Owner: _________________	
	
Lease Right Main Landing Gear – S/N                         	
FH During Report Period:                         	 	Cycles During Report Period:                         	
FH Since New:                         	 	FH Since Restoration:                         	
Cycles Since New:                     	 	Cycles Since Restoration:                         	
Removed From Service:                      (Date)	 	Current Location:                         	
Reason for Removal:                                              	
Installed Right Main Landing Gear – S/N                      (if not Lease Right Main Landing Gear)
Right MLG Owner:                             

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)

	 	(Name)	
		
	 	(Title)	
		
	 	(Date)	

	 	App 8 - 4	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 3
Maintenance Status Report – Required Information
 
1.	Airframe	
 
 	a.	Aircraft and Appliances Airworthiness Directive Summaries	
 	b.	Aircraft times and cycles log	
 	c.	Airframe Utilisation Report	
 	d.	Avionics Computerised Inventory	
 	e.	CPCP Summary as may be applicable	
 	f.	Dent and Damage Chart	
 	g.	Emergency Equipment Layout Drawing	
 	h.	Fire Blocking Certification	
 	i.	Maintenance last done next due task listing	
 	j.	Life Limited Parts Summary	
 	k.	Interior Layout configuration	
 	l.	Maintenance Program Summary and Time Interval Summary-Upon request	
 	m.	Service Bulletin, Engineering Orders, Major Repair and Alteration Summaries	
 	n.	Scheduled Maintenance Checks Tally Sheets	
 	o.	Time Controlled Components Summary	
 
2.	Engines	
 
 	a.	Airworthiness Directive Summaries	
 	b.	Last Shop visit/Engine Restoration Mini Package	
 	c.	Current Disk Sheet	
 	d.	Date, Flight Hours and Cycles of Engine at last Engine install (including Airframe Flight Hours and Cycles)	
 	e.	Service Bulletin Status / Engineering Orders and MOD Summaries	
 	f.	Trend Monitor Readout for the three (3) months prior to the report	
 
3.	Landing Gear	
 
 	a.	Aircraft date, Flight Hours and Cycles at installation	
 	b.	Landing Gear (each) Overhaul/restoration date, Flight Hours and Cycles.	
 	c.	Life Limited Parts Summary	
 	d.	Last shop visit/Overhaul report	
 
4.	APU	
 
 	a.	Airworthiness Directive Summary	
 	b.	Last shop visit/Overhaul mini package report	
 	c.	Flight Hours and Cycles formula (as applicable if recording device not utilised)	
 	d.	Aircraft/ APU date, APU Hours and APU Cycles at installation.	
 	e.	Life Limited Parts Summary	
 	f.	Service Bulletin Summary	

	 	App 8 - 5	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 3
Form of Air Traffic Control and Airport Authorities Letters
[LESSEE’S LETTERHEAD]

 
															
To:             All Relevant Air Traffic Control and Airport Authorities
 
        Mexican General Department of Civil Aeronautics*
         (Dirección General de Aeronáutica Civil)
 
        Eurocontrol Organisation for the Safety of Air Navigation
        Rue de la Fusée, 96
        B-1130 Bruxelles
        Belgium
 
* To be used with the DGAC or any other Mexican authority only following the occurrence and continuance of an Event of Default 	  		  		  		
 
Re:	Air Navigation / Airport Charges – Airbus A319-132 Aircraft with Manufacturer’s Serial Number 3252 and Mexican Registration Mark XA-[            ] (the “ Aircraft ”)	
Ladies and Gentlemen,
We hereby confirm that Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (the “ Lessee ”) has entered into an Aircraft Lease Agreement with Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) dated as of 17 November 2010 (the “ Lease ”) related to the above-referenced Aircraft, pursuant to which CIT Aerospace International (“ CITAI ”) serves as servicer.
We wish to enable each of Lessor and CITAI to monitor the value of air navigation and other charges incurred by us in relation to the Aircraft.
We hereby irrevocably and unconditionally authorise you to release to Lessor and CITAI (or its duly authorised representatives) upon its request from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and to the extent the same might result in a lien upon the Aircraft, all other aircraft operated by Lessee.
This authorisation may only be revoked or amended by a written instruction signed by us, Lessor and CITAI.
Yours faithfully,
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS)
By:                                              
Name:
Title:

	 	App 8 - 6	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

By:                                                  
Name:
Title:

	 	App 8 - 7	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 4
Form of Lease Termination Agreement
LEASE TERMINATION
(MSN 3252)
By execution hereof (this “ Lease Termination ”), the undersigned, WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”), as lessor, and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS) (“ Lessee ”), as lessee, acknowledge and agree that the Lease Agreement defined and described on Exhibit A attached hereto, has by its terms expired or has otherwise been cancelled or terminated, and release the Equipment, which is also defined and described on Exhibit A attached hereto, from the terms and conditions of such Lease Agreement.
This Lease Termination is without prejudice to the surviving rights of the parties under the Lease Agreement and nothing in this Lease Termination shall relieve either party from its obligations under the Lease Agreement which are still unsatisfied and/or from any of its obligations under the Lease Agreement which may be due after the date of this Lease Termination.
This Lease Termination may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Dated this             day of              20        .

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. de C.V. ( D / B / A VOLARIS)
Lessee
 
By:                                                               
 
Name:                                                          
 
Title:                                                            
 
By:                                                               
 
Name:                                                          
 
Title:                                                           	  	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
Lessor
 
By:                                                              
 
Name:                                                          
 
Title:                                                           	

	 	App 8 - 8	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

EXHIBIT A
The Equipment
[TO BE COMPLETED AT LEASE TERMINATION]
The Lease Agreement
[TO BE COMPLETED AT LEASE TERMINATION]

	 	App 8 - 9	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 5
Form of Recognition of Rights (Engines)
[ON THE LETTERHEAD OF THE OWNER/
LESSOR/SECURED PARTY OF THE AIRFRAME
ON WHICH THE ENGINE IS BEING INSTALLED]
[INSERT DATE]
[INSERT ADDRESS OF AIRCRAFT OWNER]
 
 	Re:	Acknowledgment of ownership of and waiver of lien interest in one (1)             Aircraft Engine bearing Manufacturer’s Serial Number             (the “ Engine ”)	
Dear Sirs:
The undersigned,                                     (“ Secured Party ”), is the legal and beneficial owner of one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number [            ] and [            ] registration mark [            ] (“ Secured Aircraft ”), which Secured Aircraft is on lease to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”). [NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S INTEREST AS NECESSARY]
We understand that, pursuant to an aircraft lease agreement dated as of 17 November 2010 (the “ Aircraft Lease ”) between Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee, as lessor (“ Lessor ”) and Lessee, you are the owner of and have leased one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3252 and Mexican registration mark XA-[                ] to Lessee and which Aircraft Lease includes the lease of one (1) IAE V2524-A5 aircraft engine bearing manufacturer’s serial number [                    ] (the “ Leased Engine ”). We have been advised by Lessee that it desires to install the Leased Engine on the Secured Aircraft. [NOTE: PROVIDE MODIFIED STATEMENT AND DEFINITIONS IF LESSOR IS NOT OWNER OF THE AIRCRAFT]
At the request of Lessee and for its benefit and the benefit of CIT, Secured Party hereby (i) acknowledges and agrees that CIT is the owner and lessor to Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that Secured Party has not acquired or claimed nor will it acquire or claim, and hereby waives, releases and renounces any right, title or interest in the Leased Engine by reason of the Leased Engine being installed on the Secured Aircraft at any time and that the foregoing shall apply notwithstanding any contrary laws of accession, or the like, which may from time to time be enacted or in effect in any jurisdiction where the Leased Engine and/or Secured Aircraft may be located, and the same are expressly waived by Secured Party hereby, (iii) agrees not to impede or interfere with the exercise by CIT of its rights and remedies to regain possession of the Leased Engine pursuant to the Aircraft Lease, (iv) agrees that the foregoing acknowledgments and agreements of Secured Party shall inure to the benefit of CIT’s successors and assigns, and (v) if requested by CIT, consents to and agrees to cooperate with CIT (at no cost to Secured Party) in connection with the filing of any notices and registrations, in form and substance reasonably satisfactory to Secured Party, of CIT’s interest in the Leased Engine with the applicable governmental authorities in the country of registration of the Secured Aircraft, the country of

	 	App 8 - 10	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Lessee’s organisation and such other jurisdiction as CIT may deem appropriate and, if applicable, the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Sincerely,

	 	App 8 - 11	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 6
Form of Lessee Acknowledgment of Security Assignment
From: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
To: Deutsche Bank Trust Company Americas, as Security Trustee (“ Security Trustee ”)
     Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”)
            20            
Ladies and Gentlemen:
Reference is made to that certain Aircraft Lease Agreement dated as of 17 November 2010 (the “ Lease ”) entered into between Lessee and Lessor with respect to one (1) Airbus model A319-132 aircraft bearing manufacturer’s serial number 3252. Any and all initially capitalised terms used herein shall have the meanings ascribed thereto in the Lease, unless specifically defined herein.
We acknowledge that pursuant to Section 25.6 of the Lease, Lessor has advised us that the intent and effect of the Security Assignment is to confer upon Security Trustee all rights, title and interest of Lessor under the Lease. In consideration of payment to us of ***** and the issuance to us of the Quiet Enjoyment Letters, receipt of which we hereby acknowledge, and subject to the provisions of such Quiet Enjoyment Letters, we hereby agree as follows:
 
 	1.	Subject to Section 2 below, to comply with the provisions of the Lease, specifically including, but not limited to Article 25.	
 
 	2.	If Security Trustee issues to us a notice (a “ Relevant Notice ”) that its rights as assignee under the Security Assignment have become exercisable we agree that we shall thereafter (a) accomplish, observe and comply with all our other undertakings and obligations under the Lease in favour and for the benefit of Security Trustee as if Security Trustee were named as lessor therein instead of Lessor; and (b) if Security Trustee so requests, enter into a lease with Security Trustee or its nominee, on the same terms (mutatis mutandis) as the Lease, provided that (i) no such new lease shall have the effect of releasing Lessor from any of its obligations to us under the Lease, and (ii) Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result from entering into such lease.	
 
 	3.	If Lessor is in breach of any of its obligations, express or implied, under the Lease, or if any event occurs which would permit us to terminate, cancel or surrender the Lease we will, without waiving any such breach or right after the 14 day period referenced below if such breach has not been cured or a new lease has not been entered into, (a) promptly after becoming aware of it, give Security Trustee notice of such breach or event, (b) accept as adequate remedy for any such breach performance by Security Trustee of such obligations within 14 days of our written notice to Security Trustee; and (c) subject to Security Trustee’s performance and satisfaction in full of such obligations, if the Security Trustee so requests, enter into a lease with Security Trustee on	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

	 	App 8 - 12	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

 	terms identical to the Lease, mutatis mutandis; provided, however, that Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result on the date hereof from entering into such lease.	
 
 	4.	We agree that after issue by Security Trustee of any Relevant Notice, we shall not recognise the exercise by Lessor of any of its rights and powers under the Lease unless and until requested to do so by Security Trustee.	
 
 	5.	We agree that the Security Trustee shall have the benefits, rights and privileges of the indemnity provisions in Sections 18.1 and 21.1 of the Lease (without increasing the scope of such provisions) and agree that we are bound by the terms of such sections, as thought the same were set out herein in full, mutatis mutandis, provided, however, that no additional cost or expense shall result.	
 
 	6.	Other than as set forth in Section 25.6 of the Lease, no notice of assignment has been received by Lessee or, if Lessee has received any notice of assignment, such notice has been terminated.	
 
 	7.	This acknowledgment shall be governed by and construed in accordance with New York Law.	
Very truly yours,
CONCESIONARIA VUELA COMPAÑÍA de AVIACIÓN,
S.A.P.I. de C.V. (d/b/a VOLARIS)
By:                                                      
Name:
Title:
By:                                     
Name:
Title:

	 	App 8 - 13	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 7
Form of Quiet Enjoyment Letter – Security Trustee
From: Deutsche Bank Trust Company Americas, as Security Trustee (“ Security Trustee ”)
To: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [    ]
 
Re:	Aircraft Lease Agreement dated as of 17 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3252 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
Pursuant to that certain Security Trust Agreement dated as of December 11, 2008 among CIT Aviation Finance I Ltd., Lessor, the additional grantors referred to therein, and Security Trustee, Lessor has assigned to Security Trustee by way of security all of its rights, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us. We further confirm that if we have issued a Relevant Notice (as defined in the Lessee Acknowledgment) and we have succeeded to the interest of Lessor under the Lease, we shall thereafter honour, perform, or cause to be performed, and accomplish all of Lessor’s obligations to Lessee accruing thereafter under the Lease.	
 
 	2.	To the extent we receive any funds as Security Deposits and/or Maintenance Reserves, we will hold, apply, retain and return such amounts as provided in the Lease, and in exercising our rights under or in respect of the Lease, we shall be bound by the terms and conditions thereof.	
 
 	3.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	

	 	App 8 - 14	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

 	4.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	5.	This letter shall be governed by and construed in accordance with New York Law.	
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but solely as Security Trustee
By:                                                      
Name:
Title:
By:                                                      
Name:
Title:

Agreed and Accepted
 
CONCESIONARIA VUELA COMPAÑÍA de
AVIACIÓN, S.A.P.I. de C.V. (d/b/a VOLARIS)	
	
By:                                                          
Name:
Title:	

By:                                                          
Name:
Title:	

	 	App 8 - 15	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Form 8
Form of Quiet Enjoyment Letter – Owner Participant
From: CIT Aviation Finance I Limited (“ Owner Participant ”)
To: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [    ]
 
Re:	Aircraft Lease Agreement dated as of 17 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3252 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us.	
 
 	2.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	
 
 	3.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	4.	This letter shall be governed by and construed in accordance with New York Law.	

	 	App 8 - 16	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
CIT AVIATION FINANCE I LIMITED

By:                                                          
Name:
Title:	

By:                                                          
Name:
Title:	

Agreed and Accepted
 
CONCESIONARIA VUELA COMPAÑÍA de
AVIACIÓN, S.A.P.I. de C.V. (d/b/a VOLARIS)	
	
By:                                                          
Name:
Title:	

By:                                                          
Name:
Title:	

	 	App 8 - 17	 		
	 		 	APPENDIX 8	
	 		 	FORMS	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.29
Execution Version
AIRCRAFT LEASE AGREEMENT
Dated as of 17 November 2010
BETWEEN
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED
(not in its individual capacity but solely as trustee)
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(D/B/A VOLARIS)
as Lessee

One (1) Airbus A319-132 Aircraft
Manufacturer’s Serial Number 3317

 
 
This Aircraft Lease Agreement may be executed in several counterparts. To the extent, if any, that this Aircraft Lease Agreement or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Aircraft Lease Agreement or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.

CONTACTS - SERVICER
NOTE : This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be under this Lease 
Primary Business Contact:
Israel Padron
Vice President - Marketing 
CIT Aerospace
1100 Lee Wagener Boulevard, Suite 204
Fort Lauderdale, Florida 33315, U.S.A.
Tel: +1 (954) 359 0113
Fax: +1 (954) 359 5542
e-mail: israel.padron@cit.com

Payment Inquiries:	  	Technical Inquiries:	
		
Operations	  	Asset Manager	
CIT Aerospace	  	e-mail: aerospaceassetmgmt@cit.com	
3 George’s Dock, IFSC	  		
Dublin 1, Ireland	  		
Tel: +353 1 656 1004	  		
Fax: +353 1 656 1001	  		
e-mail: citaioperations@cit.com	  		
		
Utilisation Reporting:	  	Financial Reporting:	
		
Asset Manager	  	Operations	
e-mail: aerospaceassetmgmt@cit.com	  	CIT Aerospace	
	  	3 George’s Dock, IFSC	
Operations	  	Dublin 1, Ireland	
e-mail: citaioperations@cit.com	  	Tel: +353 1 656 1004	
	  	Fax: +353 1 656 1001	
	  	e-mail: citaioperations@cit.com	
		
Insurance Reporting:	  	Legal Contact:	
		
Portfolio Services	  	Thomas Schmid	
CIT Aerospace	  	CIT Aerospace	
11 West 42 nd Street, 12 th Floor	  	3 George’s Dock, IFSC	
New York, NY 10036	  	Dublin 1, Ireland	
U.S.A.	  	Tel: +353 1 656 1000	
Tel: +1 (212) 461 7844	  	Fax: +353 1 656 1001	
Fax: +1 (877) 525 9183	  	e-mail: thomas.schmid@cit.com	
e-mail: alice.arazny@cit.com	  		
 
- i -

CONTACTS - LESSEE
NOTE : This list is for convenience only; refer to Section 27.18 for contacts for formal notices to be delivered under this Lease 
Primary Business Contact
Mario Geyne
Financial, Fleet and Planning Director
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma No. 490 ~ Piso 1
Colonia Santa Fe Peña Blanca
C.P. 01210, México, D.F., México
Tel: +52 (55) 5261 6400
Fax: +52 (55) 5261 6460
e-mail: mario.geyne@volaris.com.mx

Payment Inquiries:	  	Technical Inquiries:	
		
Carlos Gonzalez	  	Guillermo Cano	
Financial Controller	  	Director – Maintenance	
		
Tel: +52 (55) 5261 6428	  	Tel: +52 (55) 5261 6415	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: guillermo.cano@volaris.com.mx	
		
Utilisation Reporting:	  	Financial Reporting:	
		
Carlos Gonzalez	  	Carlos Gonzalez	
Financial Controller	  	Financial Controller	
		
Tel: +52 (55) 5261 6415	  	Tel: +52 (55) 5261 6428	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 5261 6460	
e-mail: carlos.gonzalez@volaris.com.mx	  	e-mail: carlos.gonzalez@volaris.com.mx	
		
Insurance/Risk Management Contact:	  	Legal Contact:	
		
Maria Elena Rodriguez	  	Alfonso Ascencio	
Risk Manager	  	General Counsel	
		
Tel: +52 (55) 5261 6435	  	Tel: +52 (55) 5261 6412	
Fax: +52 (55) 5261 6460	  	Fax: +52 (55) 561 6460	
e-mail: maelena.rodriguez@volaris.com.mx	  	e-mail: alfonso.ascencio@volaris.com.mx	
 
- ii -

CONTENTS

Article	  	Page	 	
			
1.    	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
2.	 	LEASE TERM; NATURE OF LEASE	  	 	2	  	
	 	2.1.       Lease Term.	  	 	2	  	
	 	2.2.       Nature of Lease	  	 	2	  	
3.	 	RENT	  	 	3	  	
	 	3.1.       Agreement to Pay Rent	  	 	3	  	
	 	3.2.       Basic Rent	  	 	3	  	
	 	3.3.       Supplemental Rent	  	 	3	  	
	 	3.4.       Obligation to Perform Unconditional	  	 	3	  	
4.	 	SECURITY DEPOSIT	  	 	4	  	
	 	4.1.       Security Deposit Amount	  	 	4	  	
	 	4.2.       Nature of Security Deposit	  	 	4	  	
	 	4.3.       Application of Security Deposit	  	 	4	  	
	 	4.4.       Effect of Application of Security Deposit	  	 	4	  	
	 	4.5.       Repayment of Security Deposit	  	 	4	  	
	 	4.6.       Security Letter of Credit	  	 	5	  	
5.	 	PAYMENTS	  	 	7	  	
	 	5.1.       Account	  	 	7	  	
	 	5.2.       Payments on Non-Business Days	  	 	7	  	
	 	5.3.       Timing of Payments	  	 	7	  	
	 	5.4.       Late Payment	  	 	7	  	
	 	5.5.       Calculation of Interest and Prorating of other Payments	  	 	7	  	
	 	5.6.       Payments in Dollars	  	 	7	  	
	 	5.7.       Retention of Certain Payments	  	 	7	  	
	 	5.8.       Application of Payments	  	 	8	  	
6.	 	AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION	  	 	9	  	
	 	6.1.       Aircraft Delivery Condition	  	 	9	  	
	 	6.2.       Lessee’s Inspection of Aircraft; No Lessor Liability	  	 	9	  	
7.	 	CONDITIONS PRECEDENT TO DELIVERY	  	 	10	  	
	 	7.1.       Conditions Precedent	  	 	10	  	
	 	7.2.       Waiver or Deferral of Conditions Precedent	  	 	10	  	
8.	 	DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	  	 	11	  	
	 	8.1.       Delivery Location and Timing	  	 	11	  	
	 	8.2.       Delivery Subject to Return from Prior Operator	  	 	11	  	
	 	8.3.       [Reserved]	  	 	11	  	
	 	8.4.       [Reserved]	  	 	11	  	
	 	8.5.       Event of Loss to Aircraft Prior to Delivery	  	 	11	  	
	 	8.6.       Lessee Acceptance of Aircraft	  	 	11	  	
	 	8.7.       Risk of Loss to Aircraft following Delivery	  	 	11	  	
	 	8.8.       Waiver of Remedies for Delay in Delivery	  	 	11	  	
9.	 	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	  	 	12	  	
	 	9.1.       Lessee’s Representations and Warranties	  	 	12	  	
	 	9.2.       Application of Representations and Warranties; Survival	  	 	14	  	
	 	9.3.       Lessee’s General Covenants	  	 	14	  	
 
- iii -

							
10.    	 	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	  	 	17	  	
	 	10.1.     General Representations and Warranties of Lessor	  	 	17	  	
	 	10.2.     Covenant of Quiet Enjoyment	  	 	17	  	
	 	10.3.     Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies	  	 	18	  	
	 	10.4.     DISCLAIMER AND WAIVER OF INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES	  	 	20	  	
	 	10.5.     NO DUTY OF INDEMNITEES TO INSPECT, ETC	  	 	20	  	
11.	 	GENERAL OPERATION OF THE AIRCRAFT	  	 	21	  	
	 	11.1.     General Operation	  	 	21	  	
	 	11.2.     Insured Operations	  	 	21	  	
	 	11.3.     Carriage of Goods	  	 	21	  	
	 	11.4.     Operational Expenses	  	 	22	  	
	 	11.5.     Compliance with Laws	  	 	22	  	
	 	11.6.     Lessee’s Covenants Regarding Use of the Aircraft	  	 	23	  	
	 	11.7.     Certain Tax Matters	  	 	24	  	
12.	 	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	  	 	25	  	
	 	12.1.     General	  	 	25	  	
	 	12.2.     Accomplishment of Tasks and Repairs	  	 	25	  	
	 	12.3.     Information on Maintenance	  	 	25	  	
	 	12.4.     Aircraft Documents in English Language	  	 	26	  	
	 	12.5.     Originals	  	 	26	  	
	 	12.6.     Performance of Maintenance	  	 	26	  	
	 	12.7.     Alterations, Modifications and Additions	  	 	27	  	
	 	12.8.     Replacement of Parts	  	 	28	  	
	 	12.9.     Title to Parts	  	 	29	  	
	 	12.10.  Temporary Replacement of Parts	  	 	30	  	
	 	12.11.  Exchanging Parts	  	 	30	  	
	 	12.12.  Temporary Attachment and Removal of Engines	  	 	31	  	
	 	12.13.  Installation of Items of Equipment on Other Aircraft	  	 	32	  	
	 	12.14.  Failure to Reinstall Engines and Items of Equipment on the Aircraft	  	 	32	  	
13.	 	MAINTENANCE RESERVES	  	 	33	  	
	 	13.1.     Maintenance Reserves	  	 	33	  	
	 	13.2.     Discrepancies	  	 	33	  	
	 	13.3.     Rights in Maintenance Reserves	  	 	33	  	
	 	13.4.     Claims for Reimbursement - Timing	  	 	34	  	
14.	 	MANUFACTURERS’ WARRANTIES	  	 	35	  	
	 	14.1.     Assignable Warranties	  	 	35	  	
	 	14.2.     Reassignment; Assignment of Lessee Warranties	  	 	35	  	
	 	14.3.     Warranty Claims	  	 	35	  	
15.	 	SUBLEASING AND WET LEASING	  	 	36	  	
	 	15.1.     Subleasing	  	 	36	  	
	 	15.2.     Wet Leasing	  	 	37	  	
	 	15.3.     No Independent Subleasing of Items of Equipment	  	 	38	  	
	 	15.4.     Expenses	  	 	38	  	
	 	15.5.     Lessee Remains Liable	  	 	38	  	
16.	 	REPORTING AND INSPECTIONS	  	 	39	  	
	 	16.1.     Financial Reporting	  	 	39	  	
	 	16.2.     Aircraft Utilisation and Other Reporting/Information	  	 	40	  	
	 	16.3.     Further Information; Inspections	  	 	40	  	
	 	16.4.     Technical Report Prior to Return of Aircraft	  	 	41	  	
 
- iv -

							
17.    	 	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	  	 	42	  	
	 	17.1.     Registration	  	 	42	  	
	 	17.2.     Identification Plates	  	 	42	  	
	 	17.3.     Aeronautics Authority Acknowledgment	  	 	42	  	
	 	17.4.     Authorisation to Make Perfection Filings	  	 	42	  	
	 	17.5.     Perfection of Title	  	 	42	  	
	 	17.6.     Cape Town Convention	  	 	43	  	
	 	17.7.     Permitted Liens	  	 	45	  	
	 	17.8.     Expenses	  	 	45	  	
18.	 	GENERAL INDEMNITY	  	 	46	  	
	 	18.1.     Scope	  	 	46	  	
	 	18.2.     Lessee’s Release	  	 	47	  	
	 	18.3.     Repayment	  	 	47	  	
	 	18.4.     Payment	  	 	47	  	
	 	18.5.     Exclusion	  	 	47	  	
	 	18.6.     After-Tax Nature of Indemnity	  	 	48	  	
	 	18.7.     Contest	  	 	48	  	
	 	18.8.     Survival	  	 	49	  	
19.	 	INSURANCE	  	 	50	  	
	 	19.1.     Obligation to Insure	  	 	50	  	
	 	19.2.     Liability Insurance	  	 	50	  	
	 	19.3.     Contractual Liability; Tail Coverage for Liability Insurance	  	 	50	  	
	 	19.4.     Insurance Against Loss or Damage to the Items of Equipment	  	 	51	  	
	 	19.5.     Reinsurance	  	 	51	  	
	 	19.6.     Requirements for All Insurances	  	 	52	  	
	 	19.7.     Reports	  	 	52	  	
	 	19.8.     Assignee of Lessor’s and/or Owner’s Interests	  	 	53	  	
	 	19.9.     Failure to Insure	  	 	53	  	
	 	19.10.  Lessor’s Right to Insure	  	 	53	  	
	 	19.11.  Changes to Insurance Practice	  	 	54	  	
	 	19.12.  AVN 67B or AVN 67C	  	 	54	  	
20.	 	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	  	 	55	  	
	 	20.1.     Risk of Loss and Damage	  	 	55	  	
	 	20.2.     Notification of Loss and Damage	  	 	55	  	
	 	20.3.     Event of Loss – Aircraft	  	 	55	  	
	 	20.4.     Event of Loss – Engine or APU	  	 	56	  	
	 	20.5.     Event of Loss – Landing Gear	  	 	57	  	
	 	20.6.     Repairable Damage	  	 	57	  	
	 	20.7.     Documents Loss	  	 	58	  	
	 	20.8.     Application of Payments from Governmental Authorities	  	 	58	  	
	 	20.9.     No Lessor Liability to Repair or Replace Following Delivery	  	 	59	  	
21.	 	TAXES; TAX INDEMNITY	  	 	60	  	
	 	21.1.     Indemnity	  	 	60	  	
	 	21.2.     VAT	  	 	63	  	
	 	21.3.     Lessor Tax Certificates	  	 	64	  	
	 	21.4.     Withholding Tax Exemption Certificates	  	 	64	  	
	 	21.5.     Tax Filings; Information	  	 	64	  	
	 	21.6.     Payment of Taxes and Indemnities	  	 	65	  	
	 	21.7.     Contest	  	 	65	  	
 
- v -

							
	 	21.8.     Survival	  	 	68	  	
	 	21.9.     Change in Circumstances; Mitigation	  	 	68	  	
22.    	 	RETURN OF AIRCRAFT	  	 	69	  	
	 	22.1.     Time and Place	  	 	69	  	
	 	22.2.     Condition	  	 	69	  	
	 	22.3.     Lessee’s Continuing Obligations	  	 	69	  	
	 	22.4.     Legal Status Upon Return	  	 	70	  	
	 	22.5.     Airport and Navigation Charges	  	 	70	  	
23.	 	EVENTS OF DEFAULT	  	 	71	  	
24.	 	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	  	 	73	  	
	 	24.1.     Lessor’s Rights Following an Event of Default	  	 	73	  	
	 	24.2.     De-Registration	  	 	75	  	
	 	24.3.     Present Value of Payments	  	 	75	  	
	 	24.4.     Remedies Cumulative	  	 	75	  	
	 	24.5.     Lessor’s Exercise of Remedies	  	 	75	  	
	 	24.6.     Application of Payments Following Default or Event of Default	  	 	76	  	
	 	24.7.     Use of Termination Date	  	 	76	  	
	 	24.8.     No Right to Maintain Possession	  	 	76	  	
25.	 	ASSIGNMENT AND TRANSFER	  	 	77	  	
	 	25.1.     No Assignment by Lessee	  	 	77	  	
	 	25.2.     Transfer of Lessor’s and/or Owner’s Interests	  	 	77	  	
	 	25.3.     Cooperation with Transfers	  	 	77	  	
	 	25.4.     Financings	  	 	77	  	
	 	25.5.     Cooperation with Financings	  	 	78	  	
	 	25.6.     Notice of Security Assignment	  	 	78	  	
	 	25.7.     Transfer of Beneficial Interest	  	 	79	  	
26.	 	LAW AND JURISDICTION	  	 	80	  	
	 	26.1.     Governing Law	  	 	80	  	
	 	26.2.     Consent to Jurisdiction	  	 	80	  	
	 	26.3.     Process Agent and Service of Process	  	 	80	  	
	 	26.4.     Jurisdiction and Forum	  	 	80	  	
	 	26.5.     Waiver of Jury Trial	  	 	81	  	
	 	26.6.     Waiver of Immunity	  	 	81	  	
27.	 	MISCELLANEOUS	  	 	82	  	
	 	27.1.     Severability and Illegality	  	 	82	  	
	 	27.2.     Amendments	  	 	83	  	
	 	27.3.     Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer	  	 	83	  	
	 	27.4.     Counterparts	  	 	84	  	
	 	27.5.     Delivery of Documents by Electronic Means	  	 	84	  	
	 	27.6.     Survival	  	 	84	  	
	 	27.7.     Entire Lease	  	 	84	  	
	 	27.8.     Successors and Assigns	  	 	84	  	
	 	27.9.     Brokers	  	 	84	  	
	 	27.10.  Transaction Costs	  	 	85	  	
	 	27.11.  Time is of the Essence	  	 	85	  	
	 	27.12.  Language	  	 	85	  	
	 	27.13.  No Rights of Third Parties	  	 	85	  	
	 	27.14.  Delegation	  	 	85	  	
	 	27.15.  Further Assurances	  	 	85	  	
	 	27.16.  Rights at Law	  	 	86	  	
	 	27.17.  Confidentiality	  	 	86	  	
	 	27.18.  Notices	  	 	87	  	
 
- vi -

Appendices
 
1	Definitions	
2	Commercial Terms	
 	A.	Lease Term	
 	B.	Rent, Security Deposit, Insurance and other Financial Matters	
 	C.	Maintenance Reserves	
 	D.	Delivery Conditions	
 	E.	Return Conditions	
3	Acceptance Certificate	
4	Lease Supplement	
5	[Reserved]	
6	Conditions Precedent / Post-Delivery Items	
 	A.	Lessor’s Conditions Precedent/Post-Delivery Items	
 	B.	Lessee’s Conditions Precedent/Post-Delivery Items	
7	Return Acceptance Certificate	
8	Forms	
 
- vii -

THIS AIRCRAFT LEASE AGREEMENT is made as of 17 November 2010 by and between:
 
1.	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED , not in its individual capacity but solely as trustee, First Floor, 7 Exchange Place, International Financial Services Centre, Dublin 1, Ireland (“ Lessor ”); and	
 
2.	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS) , a company organised and existing under the applicable laws of the United Mexican States and having its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Colonia Santa Fe Peña Blanca, C.P. 01210, México, D.F., México (“ Lessee ”).	
WHEREAS:
Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee the Aircraft on the terms and subject to the conditions of this Lease.
NOW THEREFORE IT IS AGREED as follows:
 
1.	DEFINITIONS AND INTERPRETATION	
1.1 Unless the context otherwise requires, all capitalised terms used in this Lease shall have the meanings given such terms in Appendix 1 or as may otherwise be defined in this Lease.
1.2 References to Articles, Sections and Appendices are to be construed as references to the articles, sections and appendices of and to this Lease and references to this Lease include the Appendices.
1.3 Words importing the plural shall include the singular and vice versa.
1.4 References to “Lessee”, “Lessor”, “Owner”, “Owner Participant”, “Financing Party”, “Security Trustee”, “Liquidity Provider”, “Servicer”, “Manager”, “Guarantor”, or any other Person shall include the successors, assigns and transferees of such Person.
1.5 The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
1.6 References to (or to any specified provision of) this Lease or any Operative Document shall mean this Lease or such Operative Documents as in force for the time being and as amended, novated, substituted or supplemented from time to time in accordance with this Lease or such Operative Document.
1.7 References to “hereby”, “herein”, “hereof’, “hereunder”, and other like words shall refer to this Lease including, without limitation, as supplemented by the Lease Supplement.
1.8 Whenever it is stated in this Lease that the consent or other action of Lessee or Lessor is not to be “unreasonably withheld” it shall be deemed to mean that such consent or action shall not be “unreasonably withheld or delayed”.
1.9 Whenever this Lease or any Operative Document refers to an obligation of Owner owing to Lessee, or of Lessor that requires the cooperation or conduct of Owner, unless such obligation is taken directly by Owner in favour of Lessee, this obligation shall be deemed to mean that Lessor shall cause Owner to act accordingly.

	  		  	ARTICLE 1
DEFINITIONS	

2.	LEASE TERM; NATURE OF LEASE	
2.1. Lease Term .
(a) Lessor shall lease the Aircraft to Lessee for the period stated in Appendix 2A.
(b) The Lease Term shall commence at Delivery and shall end on the Termination Date.
2.2. Nature of Lease . At all times during the Lease Term, full legal title to the Aircraft and each Item of Equipment shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. This Lease and the Lease Supplement, together, transfer to Lessee with respect to the Aircraft a leasehold interest only and Owner is the owner and Lessor is the lessor of the Aircraft, and Lessee is the lessee of the Aircraft, for all purposes, including for purposes of the application of all relevant Laws and all relevant financial accounting principles.

	  	2	  	ARTICLE 2
LEASE TERM; NATURE OF LEASE	

3.	RENT	
3.1. Agreement to Pay Rent . As rental for the Aircraft, Lessee shall pay Basic Rent to Lessor as set forth in Appendix 2B, as applicable.
3.2. Basic Rent . The amount of Basic Rent due and payable by Lessee is set forth in Sections 1.1 and 1.2 of Appendix 2B.
3.3. Supplemental Rent . Lessee shall pay to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental Rent within ten (10) days after demand or such other relevant period as may be provided herein.
3.4. Obligation to Perform Unconditional . This Lease is a net lease and Lessee’s obligation to pay Rent and Supplemental Rent, calculated in accordance with this Lease, and to perform its other Obligations shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation:
(a) any withholding, set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including, without limitation, any breach by Lessor of its warranties, agreements or covenants contained herein or in any of the other Operative Documents;
(b) any defect in the title, registration, airworthiness, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee or any other Person for any reason whatsoever;
(c) any Liens with respect to the Aircraft;
(d) an Event of Loss with respect to the Aircraft or any Item of Equipment (subject to the terms of Section 20.3);
(e) the invalidity or unenforceability or lack of due authorisation or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease;
(f) any insolvency, bankruptcy, examinership, reorganisation, administration, liquidation or similar proceedings affecting the enforcement of creditor’s rights generally by or against Lessor, Owner Participant, or Lessee;
(g) any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing; or
(h) any imposition of Taxes.
Nothing in this Section 3.4 shall be construed so as to prevent Lessee from pursuing any Claim it may have against Lessor, Owner Participant or any other Person in such court of law or otherwise as Lessee may deem appropriate.

	  	3	  	ARTICLE 3
RENT	

4.	SECURITY DEPOSIT	
4.1. Security Deposit Amount . Lessee shall pay the Security Deposit in cash into the bank account identified in and in accordance with the provisions of Appendix 2B.
4.2. Nature of Security Deposit . Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.5 below, the Security Deposit shall be non-refundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor, may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of the Obligations and Lessee hereby assigns and charges in favour of Lessor, and hereby grants to Lessor a first priority security interest in, the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than created under this Lease, in or otherwise dispose of the Security Deposit. Lessee shall, from time to time, execute and file with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor with respect to the Security Deposit, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
4.3. Application of Security Deposit . If an Event of Default has occurred and is continuing hereunder, in addition to all other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee or any Affiliate of Lessee, as applicable, under any Operative Document or Related Lease and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.
4.4. Effect of Application of Security Deposit . If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other Person, of any Event of Default and Lessee shall, within three (3) Business Days after Lessor’s written demand, pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no other Default or Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.
4.5. Repayment of Security Deposit . Provided no Default or Event of Default has occurred and is continuing, the Security Deposit, less the amount, if any, of any reasonable costs incurred by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or any Affiliate of Lessee, as applicable, is responsible hereunder or under any Related Lease in connection with the termination or cancellation of this Lease or a Related Lease or return of the Aircraft or an aircraft under any Related Lease, shall be paid over to Lessee promptly, and in any event within five (5) Business Days, after the Termination Date and the satisfaction by Lessee, in full, of its Obligations and the Related Obligations, the payment or performance of which is then due (including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and to correct discrepancies identified in the Return Acceptance Certificate,

	  	4	  	ARTICLE 4
SECURITY DEPOSIT	

but excluding those other Obligations or Related Obligations expressly provided herein to survive the Termination Date or the equivalent date in any Related Lease and which are not due for performance on or as of such date).
4.6. Security Letter of Credit . In lieu of paying or maintaining the Security Deposit in cash, Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Cash Security Deposit.
(a) If Lessee elects to provide a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than ten (10) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the Cash Security Deposit. The Security Letter of Credit shall remain in full force and effect during the Lease Term and for not less than ninety (90) days following the Scheduled Termination Date, shall permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit, and shall be freely assignable and transferable by Lessor without restriction or condition. Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee the equivalent amount of the Cash Security Deposit.
(b) Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:
(i) upon the occurrence of an Event of Default; and/or
(ii) if Lessee has not delivered a replacement Security Letter of Credit to Lessor in accordance with the provisions of this Section 4.6 or deposited with Lessor cash in the amount of the Security Deposit by the required time set forth therein; and/or
(iii) not sooner than five (5) Business Days prior to the expiration date of the Security Letter of Credit if ( x ) such expiration date is prior to the date required under Section 4.6(a), and ( y ) Lessee has not delivered a replacement letter of credit in substitution for the expiring Security Letter of Credit by such date or deposited with Lessor by such date the Security Deposit in cash;
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit to the same extent as provided in Sections 4.3 and 4.5, as if Lessee had paid the Security Deposit in cash.
(c) If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall within three (3) Business Days after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement letter of credit to be issued in the total amount of the Security Deposit or pay the amount of such shortfall in the Security Deposit amount in cash.
(d) If (i) any bankruptcy, insolvency, examinership, administration, reorganisation, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the issuer of the Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof), (ii) the rating of obligations of the issuer of any Security Letter of Credit (or any Person guaranteeing, confirming or assuming any obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by

	  	5	  	ARTICLE 4
SECURITY DEPOSIT	

Moody’s Investors Services or Standard & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or (iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall within three (3) Business Days of receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Section 4.6 or deposit with Lessor cash in the amount of the Security Deposit.
(e) Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.

	  	6	  	ARTICLE 4
SECURITY DEPOSIT	

5.	PAYMENTS	
5.1. Account . All payments of Rent, Security Deposit and in respect of Maintenance Reserves shall be made by Lessee to the bank account identified in Appendix 2B or to such other account designated in writing by Security Trustee not less than two (2) Business Days prior to the due date of any relevant payment. Lessee shall, together with such payment, identify the institution from which such payment is being sent and refer to the make, model and Manufacturer’s serial number of the Aircraft, provided that the failure to do so shall not constitute a Default hereunder.
5.2. Payments on Non-Business Days . When any payment under any Operative Document would otherwise be due to Lessor on a day that is not a Business Day, the due date for payment shall be the next succeeding Business Day.
5.3. Timing of Payments . Payments due under this Lease shall be made by Lessee for credit to Lessor not later than 11:00 A.M. New York time on the due date.
5.4. Late Payment . If Lessee fails to pay to Lessor any sum on its due date for payment under this Lease or any other Operative Document, including any payment of Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum from the due date up to the date of actual payment (including non-payment following the issuance of a judgment) at the Past Due Rate.
5.5. Calculation of Interest and Prorating of other Payments .
(a) All interest payable under this Lease or any other Operative Document shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
(b) All payments of a monthly nature under this Lease and any other Operative Document, including, but not limited to payments of Fixed Rent and in respect of Maintenance Reserves, that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
5.6. Payments in Dollars . All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. The specification of Dollars in this transaction is of the essence and Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transferred to Lessor under normal banking procedures does not yield the amount of Dollars owing to Lessor in respect of such payment. If Lessor receives an amount in respect of Lessee’s liability under this Lease or if such liability is converted into a claim, proof, judgment or order in a currency other than Dollars, Lessee will indemnify Lessor, on an After-Tax Basis, as an independent obligation against any loss arising out of or as a result of such receipt or conversion. If the amount received by Lessor, when converted into Dollars (at the market rate at which Lessor is able on the relevant date to purchase Dollars in New York with that other currency) is less than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor an amount in Dollars equal to the deficit. In addition, Lessee waives any right it may have in any jurisdiction to pay any amount due or to become due hereunder in a currency other than Dollars.
5.7. Retention of Certain Payments . Any amount referred to in any Operative Document which is payable to or retainable by Lessee shall not be paid to or retained by Lessee at any time when a

	  	7	  	ARTICLE 5
PAYMENTS	

Default or Event of Default shall have occurred and be continuing, but instead such amount shall be paid to or held by Lessor as additional security for Lessee’s Obligations to be held and applied in accordance with the provisions of this Lease. At such time as there shall not be continuing any Default or Event of Default, such amount shall be paid to Lessee to the extent not applied in accordance with the preceding sentence. Where Lessor would, but for this Section 5.7 or any similar provision, be obliged to make any payment to Lessee, Lessor may elect to make such payment but shall be entitled to deduct or withhold from such payment any amount then due and payable but unpaid by Lessee under or in respect of Lessee’s Obligations.
5.8. Application of Payments . Lessor may apply any payment received from Lessee under any Operative Document which is less than the full amount then due and owing to Lessor in respect of Lessee’s Obligations in such proportions, order and manner as Lessor may, in its reasonable discretion, determine (except where an Event of Default is continuing, in which event such determination may be made in Lessor’s absolute discretion), notwithstanding any designation or instruction for application that may have been made by Lessee.

	  	8	  	ARTICLE 5
PAYMENTS	

6.	AIRCRAFT DELIVERY CONDITION; LESSEE’S INSPECTION	
6.1. Aircraft Delivery Condition . The Aircraft shall be delivered to Lessee by Lessor on the Delivery Date in the condition set forth in Appendix 2D.
6.2. Lessee’s Inspection of Aircraft; No Lessor Liability .
(a) Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it meets the requirements of this Lease and specifically disclaims any reliance upon any representation or assurance by Lessor, Owner Participant, Servicer or any Affiliate of the foregoing or any representative or agent thereof in making such determination. Lessee further acknowledges that any assumption that Lessor will cure any nonconformity of the Aircraft and/or any Item of Equipment, discovered, difficult of discovery, or undiscovered, is not reasonable unless both ( x ) the nonconformity or possibility of nonconformity and ( y ) Lessor’s agreement to cure or cause the cure of such nonconformity are expressed in a written instrument signed by Lessor and Lessee delivered at or before the execution and delivery of the Acceptance Certificate and Lease Supplement, except as otherwise set forth herein. Except for any express commitment by Lessor to cure or cause the cure of any nonconformity evidenced by a written instrument of the type described in ( y ) above, including without limitation a list of discrepancies set forth as an attachment to the Acceptance Certificate, no Indemnitee will be liable for any failure of the Aircraft to conform with the requirements of this Lease at the time of acceptance of the Aircraft by Lessee.
(b) Compliance . All representatives designated by Lessee to perform the pre-Delivery inspections of the Aircraft contemplated under this Section 6.2 shall comply with such occupational health and safety and security requirements as the same are advised by Servicer, or any duly appointed party acting by or through Servicer, in writing, and shall not unreasonably interfere with Lessor’s and/or Servicer’s performance of their respective obligations in connection with the return inspections conducted pursuant to the Prior Lease.

	  	9	  	ARTICLE 6
AIRCRAFT DELIVERY CONDITION:
LESSEE’S INSPECTION	

7.	CONDITIONS PRECEDENT TO DELIVERY	
7.1. Conditions Precedent .
(a) Lessor’s obligation to deliver and lease the Aircraft to Lessee is subject to:
(i) the Aircraft being in compliance with the condition required for Delivery under this Lease;
(ii) no Event of Loss having occurred with respect to the Aircraft;
(iii) no Default or Event of Default having occurred and be continuing;
(iv) there having been no material adverse change to the financial condition of Lessee from the date of execution of this Lease to the Delivery Date which would adversely affect Lessee’s ability to perform its Obligations;
(v) the receipt by Lessor of each item identified in Appendix 6A by the date required for such item appearing therein; and
(vi) Prior Operator having returned the Aircraft under the Prior Lease substantially in the condition required for return thereunder.
(b) Lessee’s obligation to take delivery and lease the Aircraft from Lessor is subject to:
(i) the Aircraft being in compliance with the condition required for Delivery under this Lease;
(ii) no Event of Loss having occurred with respect to the Aircraft; and
(iii) the receipt by Lessee of each item identified in Appendix 6B by the date required for such item appearing therein.
7.2. Waiver or Deferral of Conditions Precedent . If any condition precedent specified in Section 7.1(a)(v) is not satisfied before Delivery, Lessor may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessor may determine and notify to Lessee in writing. If any condition precedent specified in Section 7.1(b)(iii) is not satisfied before Delivery, Lessee may, at its option, waive or defer satisfaction thereof on such terms and for such period as Lessee may determine and notify to Lessor in writing.

	  	10	  	ARTICLE 7
CONDITIONS PRECEDENT TO DELIVERY	

8.	DELIVERY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING DELIVERY	
8.1. Delivery Location and Timing . Lessor shall deliver the Aircraft in the condition required by this Lease to Lessee and Lessee shall accept the Aircraft when properly tendered under this Lease on the Delivery Date at the Delivery Location, whereupon the Lease Term shall commence.
8.2. Delivery Subject to Return from Prior Operator . Delivery of the Aircraft is subject to and expressly conditioned upon return of the Aircraft by Prior Operator pursuant to the Prior Lease. Lessor shall not be liable or responsible to Lessee for and Lessee hereby expressly waives any right to any Claims arising or the exercise of any remedies from or in connection with any delay by Prior Operator in the return of, or failure to return, the Aircraft under the Prior Lease, and Lessee shall not be released from its Obligation to take delivery of the Aircraft under this Lease as a result of any such delay; provided that the foregoing release and waiver by Lessee shall not apply with respect to any Claims solely and directly attributable to Lessor’s willful misconduct.
8.3. [Reserved] .
8.4. [Reserved] .
8.5. Event of Loss to Aircraft Prior to Delivery . If an Event of Loss with respect to the Aircraft occurs prior to Delivery, Lessor will notify Lessee promptly following Lessor’s knowledge of the same, and this Lease shall automatically terminate whereupon neither party will have any further liability to the other except that Lessor will return to Lessee the Security Deposit in accordance with Section 4.5 and any prepaid Rent.
8.6. Lessee Acceptance of Aircraft . If Lessee fails to (x) comply with the conditions contained in this Lease so as to allow Delivery to take place or (y) take delivery of the Aircraft when properly tendered for delivery by Lessor in the condition required under this Lease, Lessee will be liable for and shall indemnify Lessor for all documented, out-of-pocket costs and expenses reasonably incurred by Lessor as a result thereof including any payments which Lessor becomes obliged to make, or has made, for or on account of Lessee’s delivery requirements in order to prepare the Aircraft for Delivery, but excluding payments which Lessor would otherwise have been required to make notwithstanding such failure of Lessee to take delivery.
8.7. Risk of Loss to Aircraft following Delivery . Upon Delivery, risk of loss or damage to the Aircraft shall pass to Lessee for the Lease Term (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
8.8. Waiver of Remedies for Delay in Delivery . Lessor shall not be liable to Lessee for any delay or failure in Delivery to Lessee which is an Excusable Delay. Pursuant to Section 10.3, Lessee’s only rights or remedies for a delay in delivery, or anticipated delay in delivery, of the Aircraft not caused or occasioned by a Default of Event of Default of Lessee are those rights and remedies provided for in Section 10.3.

	  	11	  	ARTICLE 8
DELIVERY	

9.	LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS	
9.1. Lessee’s Representations and Warranties . Lessee represents and warrants to Lessor that:
(a) Lessee is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted.
(b) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto such Operative Documents will constitute the valid and legally binding and enforceable obligations of Lessee (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization and other laws affecting the rights of creditors generally).
(c) The execution and delivery of, the performance of its Obligations under, and compliance by Lessee with the provisions of, the Operative Documents will not (i) contravene any existing applicable Law of its State of Organisation or the State of Registration (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessee is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of its constitutional and/or organisational documents, or (iv) result in the creation or imposition of, or oblige it to create, any Lien over its undertaking or any of its material assets, rights or revenues.
(d) Lessee is not in default under any material agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceeding is taking place or, to its knowledge, after reasonable inquiry, pending or threatened against Lessee which would have or could reasonably be expected to have a material adverse effect on its ability to perform its Obligations.
(e) The audited annual financial statements of Lessee for each financial year are certified by independent auditors and, as most recently delivered to Lessor, have been prepared in accordance with GAAP and fairly present the financial position of Lessee as at such date and the results of the operations of Lessee for the financial year ended on the date set forth therein and there has, to the knowledge of Lessee, after reasonable inquiry, been no material adverse change in the financial condition of Lessee since publication of such financial statements, except as otherwise previously disclosed to Lessor in writing.
(f) Other than making a filing in respect of this Lease in the State of Registration with the Aeronautics Authority and with the IR and the filing and registration in respect of the pledge under Mexican Law with the appropriate Governmental Authorities pursuant to Sections 4.2 and 13.3(a)(i), it is not necessary, in order to ensure the legality, validity, enforceability or admissibility in evidence of any Operative Document, that such Operative Document or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid in relation to any of the Operative Documents.

	  	12	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(g) Lessee has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which it is a party, the validity and enforceability hereof and thereof and the compliance, satisfaction or performance by Lessee with or of all monetary and other Obligations hereunder and thereunder and all such authorisations are, or prior to the Delivery Date will be, valid and in full force and effect.
(h) The choice by Lessee of New York Law to govern the Operative Documents and the submission by Lessee to the jurisdiction of the New York courts is valid and binding on Lessee.
(i) In any proceedings taken in any jurisdiction in relation to any of the Operative Documents, Lessee will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(j) Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing or navigation fees or charges in respect of the Aircraft or any other aircraft owned by or leased to or operated by it, which if unpaid are reasonably likely to result in the imposition of a Lien on the Aircraft.
(k) Lessee has fully disclosed to Lessor all facts of which it has knowledge which in Lessee’s reasonable belief are material for disclosure to Lessor in the context of this Lease, Lessee knows of no material facts that would render any information previously furnished by or on behalf of Lessee to Lessor inaccurate or misleading in any material respect.
(l) No Default or Event of Default has occurred and is continuing.
(m) Lessee is solvent and able to pay its debts as the same fall due and the transactions contemplated by the Operative Documents are of commercial benefit to it and in its commercial interests.
(n) With respect to Taxes:
(i) Lessee has duly filed all Tax returns that it is required by applicable Laws to file, has duly paid all Taxes stated to be due and payable in such Tax returns and has duly paid all Taxes stated to be due in any demand for payment or similar communication issued by any taxing authority to Lessee other than:
(A) Taxes (1) which are being contested in good faith by appropriate proceedings in accordance with applicable Law, (2) for which adequate reserves are maintained in accordance with GAAP, and (3) the contest of which does not involve any risk of imposition of any criminal penalty on any Indemnitee or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;

	  	13	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(B) Tax returns, the non-filing of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein; and
(C) Taxes, the non-payment of which could not reasonably be expected to have a material adverse effect on the ability of Lessee to perform its Obligations or to result in a sale, forfeiture, confiscation, seizure or loss of, or the imposition of any criminal penalty on any Indemnitee or the imposition of a Lien (other than a Permitted Lien) on, any Item of Equipment or any interest therein;
(ii) no Tax imposed by any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration is (or, subject to any change in law after the Delivery Date, will be) (A) required to be paid by Lessor or Owner Participant as a result of the execution, delivery, performance or enforcement of, or the transactions and activities provided for or contemplated in, the Operative Documents, or (B) required to be deducted or withheld from or with respect to any amount payable by Lessee to Lessor under any Operative Document; and
(iii) neither of Lessor nor Owner Participant is (and, subject to any change in law after the Delivery Date, will be) required to give any notice to, make any registration with, or file any document or information with, any Governmental Authority or other taxing authority of, or having jurisdiction in, Lessee’s State of Organisation or the State of Registration with respect to Taxes solely by reason of the execution, delivery, performance or enforcement of the Operative Documents.
9.2. Application of Representations and Warranties; Survival . Each representation and warranty set out in Section 9.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft.
9.3. Lessee’s General Covenants . Lessee covenants to Lessor that it will:
(a) preserve and maintain (i) its corporate existence and (ii) all of its material rights, privileges and franchises in every jurisdiction in which the character of the property owned or the nature of the business transacted by it makes licensing or qualification necessary;
(b) pay or cause to be paid (i) all Taxes required by applicable Laws to be paid by it (whether such Taxes are imposed upon it or upon its income and profits or upon any property belonging to it or otherwise) prior to the date on which any penalty accrues, except Taxes described in sub-clause (A), (B) or (C) of Section 9.1(n)(i), and (ii) all other lawful claims which, if not paid, are reasonably likely to result in the imposition of a Lien upon its property or upon the Aircraft or any part thereof;
(c) remain duly qualified to operate the Aircraft under applicable Law;

	  	14	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(d) maintain in full force and effect all governmental consents, licenses, authorisations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to timely obtain or effect any new or additional governmental consents, licenses, authorisations, approvals, declarations, filings or registrations as may become necessary for Lessee’s performance of its Obligations;
(e) not consolidate with, merge with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person, provided that Lessee may do so if Lessee establishes to the reasonable satisfaction of Lessor that such merger, conveyance, transfer or lease will not have a materially adverse effect on Lessee’s ability to perform its Obligations and that the surviving entity will assume all Obligations, unless (i) in the case of a merger or consolidation, the surviving entity of such merger or consolidation is Lessee or an entity which (x) is a certificated air carrier or parent thereof and (y) after giving effect to such merger or consolidation has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation and which has agreed in writing satisfactory to Lessor, to assume and perform all Obligations of Lessee hereunder, and such merger or consolidation will not have a materially adverse effect on the ability of the surviving entity to perform such Obligations; or, (ii) in the case of a transfer or lease, such transfer or lease will not have a materially adverse effect on Lessee or its ability to perform its Obligations hereunder;
(f) notify Lessor of any change to Lessee’s registered office, principal place of business or chief executive office if there is more than one place of business not more than thirty (30) days following such change;
(g) not (i) voluntarily suspend its certificated operations of the Aircraft or its fleet other than by reason of a merger or consolidation not otherwise prohibited by sub-clause (e) above; or (ii) permit to be revoked, canceled or otherwise terminated, whether by act or omission, all or substantially all of the material franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof, where such revocation, suspension or termination will have or could be deemed to have a material adverse effect on Lessee’s ability to perform its Obligations;
(h) pay promptly when due all navigation and en-route charges and all other charges payable by Lessee for the use of or services provided at any airport, whether in respect of the Aircraft or any other aircraft in Lessee’s fleet where the failure to pay the same could reasonably be expected to (i) result in a Lien upon the Aircraft, except to the extent being contested in accordance with applicable law and in respect of which contest Lessee has taken adequate reserves in accordance with GAAP, provided such contest would not give rise to any material likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of Lessor or any Financing Party, and/or (ii) materially and adversely effect Lessee’s ability to perform its Obligations hereunder;
(i) not represent or hold out Owner, Lessor (if not Owner), Owner Participant, any Financing Party or any Affiliate of the foregoing as carrying goods or passengers on the Aircraft or being in any way connected to operation of the Aircraft; and

	  	15	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

(j) if any items delivered to Lessor in connection with this Lease are required by this Lease to have a validity and effectiveness for the Lease Term, but have or are of a duration or effectiveness that is for less than the Lease Term when originally delivered, Lessee shall cause replacements, extensions or supplements thereof to be timely delivered to Lessor during the Lease Term to ensure that Lessor maintains at all times during the Lease Term the benefits initially afforded by such items and the continued effectiveness and validity of the same for the Lease Term.

	  	16	  	ARTICLE 9
LESSEE’S REPRESENTATIONS,
WARRANTIES AND COVENANTS	

10.	LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS	
10.1. General Representations and Warranties of Lessor. Lessor represents and warrants to Lessee that:
(a) Lessor is a company duly organised and validly existing under the Laws of its State of Organisation and has the corporate power and authority to carry on its business as it is being conducted;
(b) Lessor has the corporate power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of each Operative Document to which it is a party and upon execution by the other parties thereto the Operative Documents to which it is a party will constitute its valid and legally binding and enforceable obligations;
(c) the execution and delivery of, the performance of its obligations under, and compliance by Lessor with the provisions of, the Operative Documents to which it is a party will not (i) contravene any existing applicable Law of its State of Organisation (or federal and other divisional governmental Laws applicable therein), (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which Lessor is a party or is subject or by which it or any of its property is bound, or (iii) contravene or conflict with any provision of its constitutional and/or organisational documents;
(d) Lessor has received and complied with or will, prior to the Delivery Date, receive and comply with, each authorisation required for the valid authorisation, execution, delivery and performance of this Lease and each other Operative Document to which Lessor is a party and the validity and enforceability hereof and thereof;
(e) each representation set forth in this Section 10.1 shall be deemed to be repeated on the Delivery Date by reference to the facts and circumstances existing on such date and shall survive the execution hereof and the delivery of the Aircraft;
(f) on and as of Delivery, Lessor shall have the right to lease the Aircraft to Lessee and there is no actual, or to Lessor’s knowledge, after reasonable inquiry, pending or threatened litigation to prevent or prohibit Lessor from entering into and performing its obligations under the Operative Documents to which it is a party or otherwise affecting the Aircraft or Lessor’s rights, title and interest in and to the Lease; and
(g) Lessor is solvent and able to pay its debts as the same fall due.
10.2. Covenant of Quiet Enjoyment .
(a) Notwithstanding the effect of any provision in the Cape Town Convention to the contrary, which by the terms of the Cape Town Convention may be derogated from or varied, Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the Aircraft without interference by Lessor or by any Person lawfully claiming by or through Lessor. The lawful exercise by Lessor of its rights under any Operative Document in conformity with the terms and conditions of such Operative Document shall not constitute a breach of this Section 10.2.

	  	17	  	ARTICLE 10
LESSOR’S REPRESENTATIONS
WARRANTIES AND COVENANTS; DISCLAIMERS	

(b) Prior to Delivery, Lessor shall cause each of Owner Participant and Security Trustee to provide Lessee with a Quiet Enjoyment Letter substantially in the forms set out in Appendix 8.
10.3. Disclaimer; Waiver of Warranties as between Indemnitees and Lessee; Waiver of Remedies .
(a) LESSEE AGREES THAT, AS BETWEEN ITSELF AND THE INDEMNITEES, IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS, WHERE-IS”. LESSEE ACKNOWLEDGES AND AGREES THAT NO INDEMNITEE HAS MADE, OR SHALL BE DEEMED TO HAVE MADE, (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, FOR ITSELF AND FOR EACH INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE OR CAPABLE OF DISCOVERY, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, FOR (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ITEM OF EQUIPMENT OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii) THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR) OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS LEASE OR IN ANY OTHER OPERATIVE DOCUMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT.

	  	18	  	ARTICLE 10
LESSOR’S REPRESENTATIONS
WARRANTIES AND COVENANTS; DISCLAIMERS	

(b) LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY EACH MANUFACTURER. LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT (i) NO INDEMNITEE IS A SELLER, MANUFACTURER, REPAIRER OR PERSON MANAGING, DIRECTING OR PERFORMING SUCH SERVICES OF THE AIRCRAFT AND (ii) THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.
(c) IN CONSIDERATION OF (i) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY AND ALL ASSIGNABLE WARRANTIES OF ALL MANUFACTURERS, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE UNDER APPLICABLE LAW. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
(d) DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.
(e) LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, ( X ) ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND ( Y ) ON ACCOUNT

	  	19	  	ARTICLE 10
LESSOR’S REPRESENTATIONS
WARRANTIES AND COVENANTS; DISCLAIMERS	

OF ANY REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE COVENANT OR PROMISE RUNS. LESSEE AGREES THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS, AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT AND LESSEE HEREBY WAIVES ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER ARTICLE 2A (UNIFORM COMMERCIAL CODE-LEASES) OF THE NEW YORK UNIFORM COMMERCIAL CODE OR OTHERWISE IN RESPECT OF SUCH BREACH.
10.4. DISCLAIMER AND WAIVER OF INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES . EACH OF LESSEE AND LESSOR (EXCEPT IN RESPECT OF LESSOR AS OTHERWISE SET FORTH HEREIN OR IN ANY OTHER OPERATIVE DOCUMENT) AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES, AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR IN THE CASE OF LESSOR, EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 24, ANTICIPATED PROFITS AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF SUCH OTHER PARTY CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS.
10.5. NO DUTY OF INDEMNITEES TO INSPECT, ETC . NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE ORGANISATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT PERFORMED DURING THE LEASE TERM.

	  	20	  	ARTICLE 10
LESSOR’S REPRESENTATIONS
WARRANTIES AND COVENANTS; DISCLAIMERS	

11.	GENERAL OPERATION OF THE AIRCRAFT	
11.1. General Operation . Lessee will:
(a) comply with the Law in any country or jurisdiction which may for the time being be applicable to the Aircraft and its use, maintenance and operation, including but not limited to the holding of all certificates, licenses, permits, authorisations and regulations, and take all reasonable steps to ensure that the Aircraft is not used for any illegal purpose;
(b) not use any Item of Equipment in any manner contrary to:
(i) any Manufacturer’s operating manuals or published instructions, or in violation of any airworthiness certificate or registration relating thereto; or
(ii) any published recommendation of the Manufacturer of such Item of Equipment or regulation of the Aeronautics Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) ensure that all personnel directly or indirectly employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aeronautics Authority and applicable Law;
(d) use the Aircraft solely in commercial passenger and cargo (provided such cargo is carried exclusively in the cargo compartments of the Aircraft) operations for which Lessee is duly authorised by the Aeronautics Authority and under applicable Law and, without prejudice to Lessee’s rights under Section 15.2 hereof, principally from one or more bases located within the State of Registration or Lessee’s State of Organisation (or such other location as Lessor may approve in writing from time to time, such approval not to be unreasonably withheld);
(e) not utilise the Aircraft for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other similar model aircraft within Lessee’s fleet of aircraft; and
(f) obtain and maintain in full force and effect all certificates, licenses, permits and authorisations required for the making of payments required by this Lease and the compliance by Lessee with its other Obligations.
11.2. Insured Operations . Lessee will not use or locate or permit the Aircraft or any Item of Equipment to be used or located in any manner, for any purpose or at any location which is not covered by the insurance policies and the scope of coverage Lessee is required to carry and maintain as set forth in this Lease. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit the coverage provided under any such insurance policy or coverage provided thereunder.
11.3. Carriage of Goods . Lessee shall not use the Aircraft for the carriage of:
(a) whole animals living or dead except in compliance with I.A.T.A. regulations;

	  	21	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(b) cargo to the extent forbidden pursuant to Section 2 (Limitations) of the I.A.T.A. Dangerous Goods Regulations, as revised, from time to time;
(c) nuclear fuels or waste, illegal drugs, controlled substances or the like or any other goods, materials or items of cargo which are prohibited by Law; or
(d) any other cargo which, whether due to size, content or packaging, (i) could reasonably be expected to cause damage to the Aircraft or (ii) the carriage of which might cause damage that would not be adequately covered by insurance.
11.4. Operational Expenses . Lessee shall pay or procure payment of all expenses incurred in the operation of the Aircraft during the Lease Term including, without limitation, expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, landing and navigation fees, airport charges, passenger service and any and all other expenses or claims of any kind or nature incurred during the Lease Term, arising directly or indirectly in connection with or related to the use, movement, operation, storage or location of the Aircraft or any Item of Equipment. The obligations of Lessee under this Section 11.4 arising prior to any cancellation, termination or expiration of the Lease Term shall continue in full force and effect, notwithstanding such cancellation or termination (whether arising out of an Event of Default or otherwise) or expiration, and shall be enforceable by Lessor. Nothing herein shall be deemed to prevent Lessee from contesting any such expenses by appropriate proceedings, provided that no such contest shall give rise to any reasonable likelihood of the loss, forfeiture or seizure of the Aircraft or any criminal liability on the part of any Indemnitee.
11.5. Compliance with Laws . Lessee will:
(a) not cause or permit the Aircraft to proceed to, or remain at, any location to the extent then prohibited by applicable Law by any Governmental Authority of the State of Registration or Lessee’s, Lessor’s or Owner’s State of Organisation or any Governmental Authority of the country in which such location is situated, except under exigent circumstances, when necessary to safeguard the Aircraft or the lives and well-being of passengers and crew, provided that the Aircraft is promptly removed from such location upon cessation of such exigent circumstances; and
(b) not use or permit the use of the Aircraft or any Item of Equipment with, for or on behalf of any Person:
(i) whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in effect during the Lease Term);
(ii) in violation of the United States Bank Secrecy Act, as amended, or any applicable regulations thereunder;
(iii) in violation of any of the sanctions programs administered by the Office of Foreign Assets Control of the United States Department of Treasury (“ OFAC ”), any regulations promulgated thereunder by OFAC or under any affiliated or successor governmental or quasi-governmental office, bureau or agency, or any enabling legislation or executive order relating thereto ( ref: www.ustreas.gov/offices/enforcement/ofac/ );

	  	22	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(iv) on the list of “Specially Designated Nationals” and “Blocked Persons” or prohibited under any OFAC regulation or executive order, as the same are amended from time to time;
(v) in violation of a United Nations sanction or whose assets have been frozen by enabling legislation of the same in the State of Registration or Lessee’s State of Organisation; or
(vi) in violation of any Laws similar to or consistent with the foregoing clauses (i) through (v) as the same are enacted in Lessee’s State of Organisation or the State of Registration;
as any or all of the same are amended or supplemented from time to time, and including any successor Laws as the same are enacted from time to time.
11.6. Lessee’s Covenants Regarding Use of the Aircraft . Lessee covenants to Lessor that it will procure that (x) in each calendar year that begins and ends during the Lease Term and (y) in the case of the calendar year that includes the Delivery Date, during the part of such calendar year that begins on the Delivery Date and (z) in the case of the calendar year that includes the Termination Date, during the part of such calendar year that ends on the Termination Date:
(a) either:
(i) the Aircraft will be located outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty percent (50%) of the time, or
(ii) more than fifty percent (50%) of the miles traversed in the use of the Aircraft will be outside the U.S.A. and outside Puerto Rico (in each case including the territorial sea extending two hundred (200) nautical miles from the coast thereof),
provided that the Aircraft will be deemed to be in the U.S.A. at all times during which it is engaged in transport between the U.S.A. and Puerto Rico or between two points in the U.S.A. or between two points in Puerto Rico; and
(b) either:
(i) the Aircraft will be located outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof) more than fifty per cent (50%) of the time, or
(ii) more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside Canada (including the territorial sea extending two hundred (200) nautical miles from the coast thereof); and

	  	23	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

(c) the Aircraft will not be used, pursuant to any sublease, wet lease, charter, or otherwise, by any Person that:
(i) has a State of Organisation in or whose State of Organisation is (A) Canada or (B) Puerto Rico or the U.S.A., or
(ii) is resident or principally based in (A) Canada or (B) Puerto Rico or the U.S.A., or
(iii) has any right under any sublease, wet lease, charter or other agreement to use (or to permit or suffer any other Person to use) the Aircraft or any part thereof in a manner which is reasonably likely to result in a breach of any covenant of Lessee in this Section 11.6,
except that the Aircraft may be wet leased to a Person described in subclause (i)(B) or (ii)(B) provided that such Person will not have the right to use the Aircraft for more than a total of ninety (90) days in any calendar year, and Lessee provides Lessor written notice of such wet lease within ten (10) days after the date on which such wet lease is executed. For purposes of this Section 11.6(c), the term “wet lease” shall have the same meaning as the term Wet Lease except that it may include a “wet lease” of the Aircraft by a Permitted Sublessee (and in such case references to Lessee appearing in the definition of the term Wet Lease shall be deemed to refer to such Permitted Sublessee).
11.7. Certain Tax Matters . If, after the Delivery Date, an amendment to Section 954 of the United States Internal Revenue Code of 1986, as amended (the “ U.S. Tax Code ”), is enacted or an amendment to the Treasury Regulations under Section 954 of the U.S. Tax Code is promulgated as a final regulation and if independent tax counsel engaged by Lessee and reasonably acceptable to Lessor delivers to Lessee and Lessor a written opinion to the effect that due to such amendment, Rent payable by Lessee pursuant to this Lease will be treated as “derived from leasing the Aircraft in foreign commerce” within the meaning of Section 954(c)(2)(A) of the U.S. Tax Code even if Lessee does not comply with its warranty and covenant in Section 11.6(a), then if requested by Lessee in writing and if no Event of Default shall have occurred and be continuing, Lessor will negotiate with Lessee in good faith with a view to amending Section 11.6 to reflect such amendment, provided that no such amendment shall give rise to a reasonable likelihood that any Indemnitee would incur any liability, loss, cost, expense or other adverse consequence that it would not have incurred in the absence of such amendment unless Lessee is required by this Lease or any other Operative Document to indemnify such Indemnitee therefor in a manner that is reasonably satisfactory to such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee in connection with the negotiation, documentation, execution, delivery, filing or recording of any amendment requested by Lessee pursuant to this Section 11.7.

	  	24	  	ARTICLE 11
GENERAL OPERATION OF THE AIRCRAFT	

12.	MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT	
12.1. General . Lessee, at its own expense, shall cause the Aircraft and each Item of Equipment to be serviced, repaired, overhauled, tested and maintained:
(a) in accordance with the Maintenance Program and the applicable Manufacturer’s Repair Manuals including, without limitation, the Manufacturer’s recommended corrosion prevention and control program for the Aircraft;
(b) so as to keep each such Item in as good operating condition and as necessary to maintain the value, utility and appearance of the Aircraft as when delivered to Lessee hereunder, reasonable wear and tear excepted;
(c) in compliance with Manufacturers’ service bulletins designated by such Manufacturer as either (x) an Alert Service Bulletin or (y) a mandatory service bulletin, either of which by their terms (i) is applicable to the respective Item of Equipment and (ii) specify compliance during the Lease Term;
(d) in compliance with all other Manufacturer’s service bulletins which require compliance in order to maintain the validity of warranties assigned or otherwise provided to Lessee; and
(e) in compliance with all Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be accomplished in strict accordance with such AD. Notwithstanding the foregoing, compliance with any AD may be accomplished by the use of an alternate method of compliance, provided that such alternate method of compliance is approved by EASA and the Aeronautics Authority, without limitation.
12.2. Accomplishment of Tasks and Repairs . Lessee shall cause, at its expense, all Tasks to be accomplished on the Aircraft as they become due, with no discrimination toward the Aircraft with respect to any maintenance accomplished on similar model aircraft within Lessee’s fleet of aircraft. To the extent that the Maintenance Program permits certain structural Tasks to be accomplished on a sampling basis, Lessee nevertheless shall accomplish on the Aircraft all such structural Tasks that, by the terms of such Tasks, are applicable to the Aircraft, provided, however, at Lessee’s option the accomplishment of such structural sampling Tasks may be deferred during the Lease Term, but in any event all such structural sampling Tasks that have been deferred shall be accomplished by Lessee not later than during the Final Check. Any damage, defects or corrosion discovered during the Lease Term shall be repaired in accordance with the applicable Manufacturer’s Repair Manual approved procedures at the sole expense of Lessee, and Lessee shall obtain Required Approval with respect to any repairs or modifications accomplished during the Lease Term which have not been approved by the Manufacturer and the Certificating Authority in addition to any approval received by Lessee from the Aeronautics Authority with respect to any such repairs or modifications.
12.3. Information on Maintenance . Lessee, at its cost and expense, shall furnish Lessor, at such times during the Lease Term as Lessor shall reasonably request, copies of records maintained relating to the Aircraft.

	  	25	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

12.4. Aircraft Documents in English Language . Lessee, at its cost and expense, shall maintain all Aircraft Documents produced during the Lease Term by or for the benefit of Lessee or any Permitted Sublessee or delivered to Lessee on the Delivery Date, in the English language, including such Aircraft Documents described above and required by the applicable Aeronautics Authority to be maintained in respect of each Item of Equipment, and promptly furnish to Lessor upon Lessor’s request such information as may be required to enable Lessor to file any reports required to be filed with any Governmental Authority because of Owner’s ownership of the Aircraft.
12.5. Originals . All Aircraft Documents, including records and documentation of maintenance accomplished on the Aircraft and any Item of Equipment shall be retained by Lessee until the Termination Date, at which time all records and Aircraft Documents shall be returned to Lessor in original (not duplicate) form, or, to the extent delivered with the Aircraft at Delivery, in such form as received by Lessee at Delivery. Notwithstanding the preceding sentence, Lessee may return any such Aircraft Documents in electronic form, except with respect to documentation of Airworthiness Directive accomplishments which must be in original form with the signature of the Person authorized to accomplish such, subject to the following:
(a) Lessee shall, unless already possessed by Lessor, provide Lessor with the software necessary to access such electronic documentation and the appropriate licenses for Lessor and any other owner or operator to use such software;
(b) Lessee shall provide Lessor with the appropriate excerpts from Lessee’s operations or procedures manuals (in English), approved by the Aeronautics Authority, specifying the procedures to be adhered to by Lessee in the use of such form of electronic documentation in place of original documents; and
(c) Lessee shall provide certification by a duly authorized officer of Lessee that the electronic documentation was maintained in accordance with the Aeronautics Authority approved procedures as set forth in clause (b) above.
12.6. Performance of Maintenance . All Maintenance Checks, including the Final Check, shall be accomplished only at Approved Maintenance Organisations which shall be approved by Lessor, acting reasonably, in writing prior to the commencement of such Maintenance Check, such approval not to be unreasonably withheld. All other maintenance on the Aircraft will be performed by Lessee using personnel that are approved and appropriately certified by the Aeronautics Authority to perform such maintenance. Notwithstanding the preceding, at any time during the Lease Term, Lessee may provide Lessor with a list of Approved Maintenance Organisations that Lessee plans to use, and unless Lessor notifies Lessee in writing of its objection to any such Approved Maintenance Organisation at least thirty (30) days prior to the commencement of any Maintenance Check, such Maintenance Check may nevertheless be accomplished at such Approved Maintenance Organisation objected to by Lessor and such Approved Maintenance Organisation shall be deemed to be approved by Lessor for the accomplishment of such Maintenance Check, but otherwise such Approved Maintenance Organisation objected to by Lessor shall no longer be deemed to be approved.

	  	26	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

12.7. Alterations, Modifications and Additions .
(a) Required Alterations, Modifications and Additions . Lessee, at its own cost and expense, shall make such alterations, modifications and additions to the Aircraft and any Items of Equipment as may be required from time to time to comply with:
(i) all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin, either of which by their terms (1) is applicable to the respective Item of Equipment and (2) specify compliance during the Lease Term;
(ii) Airworthiness Directives which by the terms of each such AD require compliance during the Lease Term and which shall be performed in strict accordance with such AD and without application or utilisation of any alternate method of compliance; and
(iii) all Laws of the Aeronautics Authority which require compliance during the Lease Term.
(b) Discretionary Alterations, Modifications and Additions .
(i) Except as set forth in the preceding clause (a) or the following clause (ii), Lessee shall not make any alteration, modification or addition to the Aircraft or any Item of Equipment (including, but not limited to, galleys, lavatories, avionics or Engines) without the prior written consent of Lessor, which consent shall not be unreasonably withheld and shall be deemed given in the absence of a response within ten (10) Business Days following Lessor’s receipt of Lessee’s written request.
(ii) Notwithstanding the provisions of the preceding clause (i), Lessor’s consent shall not be required for any discretionary alteration, modification or addition that Lessee wishes to perform to the Aircraft provided that any such alteration, modification or addition does not require or result in a modification to the Aircraft structure or electrical wiring system, and is:
(A) for the installation of additional or enhanced Items of Equipment (and not in substitution for the same, unless replacing a Part with another Part that is of a higher modification status); or
(B) cosmetic (and non-structural) in nature in order for Lessee to display its name, logo or other identification or advertising; or
(C) to the Aircraft interior configuration that (1) utilises the existing seat track system (without modification), (2) does not require the addition to, removal of or modification of any Aircraft structure, (3) does not impair the value or utility of the Aircraft or any Item of Equipment or adversely affect compliance with the type certificate data sheet of the Aircraft, and (4) does not cause any change in the category or status of the Aircraft as defined by the Manufacturer.

	  	27	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(c) Removed Items – Title and Risk of Loss . Subject to the provisions of Sections 12.8 and 12.9, title to any and all Items of Equipment removed from the Aircraft shall remain with Owner and risk of loss or damage to the same shall remain with Lessee during the Lease Term and Lessee shall keep, store and maintain the same in accordance with Manufacturer’s published procedures or written recommendations of the Manufacturer and standard industry practice (including the issuance of a Certificating Authority Form at the time of removal) for subsequent reinstallation or, at Lessor’s option, return to Lessor on the Termination Date.
(d) De-Modification of Aircraft . Subject to the provisions of Sections 12.8 and 12.9, at Lessor’s option (unless otherwise agreed in writing by Lessor and Lessee), Lessee shall, in connection with Return, de-modify and restore the Aircraft to the condition and configuration it was in prior to the accomplishment of any alterations, modifications or additions performed in accordance with this Section 12.7, assuming such condition was in compliance with the terms of this Lease, notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i), if the same is provided, or otherwise.
12.8. Replacement of Parts . Lessee, at its own cost and expense, shall promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall as promptly as practicable either reinstall such Part or replace such Part pursuant to the terms of this Article 12. Each replacement part prior to installation in the Aircraft or any Item of Equipment:
(a) shall be free and clear of all Liens (other than Permitted Liens);
(b) shall be in as good operating condition and shall have a value, utility, maintenance, modification and repair status at least equal to the Part replaced, assuming such replaced Part was in the condition and repair required to be maintained by the terms hereof;
(c) shall have documentation evidencing compliance with all applicable Certificating Authority and Aeronautics Authority requirements, including, without limitation (but to the extent applicable):
(i) a Certificating Authority Form and, if not indicated on such form, a teardown report indicating time since Overhaul and a description of work accomplished with respect to such part by an Approved Maintenance Organisation;
(ii) Overhaul records with respect to Parts replacing Time Controlled Parts;
(iii) documentation of modification status and compliance with Airworthiness Directives; and
(iv) any other appropriate documentation applicable to the maintenance and repair status of such part; and

	  	28	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(d) shall:
(i) have the same part number and be of the same Manufacturer as the replaced Part (an “ OEM Part ”), except (x) to the extent the Manufacturer has superseded the part number of such OEM Part, and in such an event the superseding part number shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual or a Required Approval or (y) if such OEM Part is no longer commercially available, an equivalent part with a different part number or from a different manufacturer shall be acceptable, and (z) non-OEM Parts manufactured by alternate manufacturers may be used to replace airframe consumable items, cosmetic items and standard hardware in the passenger cabin of the Aircraft, provided, however, each of sub-clauses (y) and (z) herein with respect to such equivalent parts or non-OEM Parts shall be subject to the approval of both the Airframe Manufacturer and the EASA for installation of such parts on the Aircraft;
(ii) with respect to Time Controlled Parts, have not accumulated more time since new (and time since Overhaul if such replaced Part has previously been Overhauled) than that of the replaced Part.
12.9. Title to Parts .
(a) Parts Replacement in Connection with Maintenance . Any Part removed from the Airframe or any Item of Equipment shall remain the property of Owner and subject to this Lease, no matter where located, until such time as such Part shall be replaced by a part which has been incorporated or installed in or attached to the Aircraft or an Item of Equipment pursuant to the requirements for replacement parts specified in Section 12.8 and title to such replacement part has been vested in Owner. Except as set forth in Section 12.10, immediately upon any replacement part becoming incorporated, installed or attached to the Aircraft or an Item of Equipment as provided above, such part shall become the property of Owner, title to such replacement part shall immediately vest in Owner and such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. Once the replacement part has become subject to this Lease, title to the Part so replaced shall immediately vest in Lessee.
(b) Parts Replacement in Connection with Discretionary Alterations, etc . So long as no Default or Event of Default shall have occurred and be continuing, at any time during the Lease Term, Lessee may remove any Part from an Item of Equipment that was installed pursuant to Lessee’s accomplishment of an alteration, modification or addition pursuant to Section 12.7(b), provided that:
(i) such Part is in addition to and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to such Item at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part;
(ii) such Part is not required to be incorporated or installed in or attached or added to such Item pursuant to the terms hereof;

	  	29	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

(iii) such Part can be removed from such Item without diminishing or impairing the value, utility or airworthiness which such Item would have had at such time had such alteration, modification or addition not occurred; and
(iv) such Part is not required to be installed on or attached to such Item of Equipment by the Aeronautics Authority or the Certificating Authority in order to maintain the airworthiness certification of the Aircraft for passenger operation.
Upon removal of any such Parts, Lessee shall restore the area where such Part was removed so that it is in the condition it would have been had such Part not been installed, assuming such condition was in compliance with the terms of this Lease, and so that such removal is undetectable. Title to any Part not removed by Lessee as above provided prior to the return of the respective Item of Equipment to Lessor hereunder shall remain with Owner.
12.10. Temporary Replacement of Parts . Provided no Event of Default has occurred and is continuing, at any time during the Lease Term, any Part incorporated or installed in or attached or added to any Item of Equipment may be replaced temporarily with a part which does not satisfy the requirements of Section 12.8; provided that:
(a) there shall not have been readily or economically available to Lessee at the time and in the place that such substitute or replacement part was required to be installed on the Airframe or Engine a replacement part complying with the requirements of Section 12.8;
(b) it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee as an airline (as determined by Lessee) to have grounded the Aircraft until such time as a replacement part complying with the requirements of Section 12.8 became available for installation on the Aircraft;
(c) as soon as practicable after installation of the same on the Airframe or Engine (and in any event no later than the earliest to occur of (i) the first C-Check following such installation, (ii) the Scheduled Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the requirements of Section 12.8 and replace the same with a part complying with such requirements.
Upon the replacement by Lessee of any such non-conforming part pursuant to the foregoing clause (c), title to such replacement part shall, without further act, vest in Owner and such part shall be deemed a Part hereunder.
12.11. Exchanging Parts . Any Part removed from the Aircraft or any Item of Equipment in the course of performance of maintenance on the same may be subjected by Lessee to normal exchanges customary in the airline industry in the ordinary course of Lessee’s business provided that ( x ) the parts replacing such removed Parts are incorporated, installed in or attached to the Aircraft or such Item of Equipment promptly following the removal of such Parts, and ( y ) all applicable requirements of the Aeronautics Authority and the Certificating Authority shall be adhered to with respect to all such Parts being incorporated, installed, or attached, whether or not such Part was originally removed from the Aircraft or any Item of Equipment or is a replacement for any such removed Part. Lessee shall, whether or not such exchanged part is owned by Lessee at the time such exchange is completed, comply or ensure the continued compliance with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to installation of the same into the Aircraft or any Item of Equipment.

	  	30	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

12.12. Temporary Attachment and Removal of Engines .
(a) Installation of Other Engines .
(i) In the course of performance of Lessee’s Obligations under this Lease, Lessee may temporarily remove an Engine from the Airframe and install an engine on the Airframe that is owned by Lessee or which is subject to a lease, conditional sale agreement, trust indenture or other security agreement, provided that such other engine is ( x ) free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such engine and as the same are otherwise permitted to exist pursuant to Section 17.7, and ( y ) Lessee, or if Lessee is not the owner of the engine, the lessor, conditional seller, indenture trustee or secured party of any such engine agrees in writing in a form satisfactory to Lessor, acting reasonably, and which agreement may be set forth in the relevant lease, conditional sale agreement, mortgage, indenture or security agreement, that it will not acquire or claim, as against Lessor, any right, title or interest in or any adverse right, title or interest to the Airframe or any Item of Equipment as the result of any such engine being installed on the Airframe. Lessor agrees for the benefit of any such owner, lessor, conditional seller or secured party that, subject to such Person’s agreement as set forth above, Lessor shall not claim any interest in any such engine by virtue of its installation on the Airframe. If any of the respective interests of Lessor, Owner or any relevant Financing Party in any Item of Equipment is materially impaired by virtue of installation of such engine on the Airframe, Lessee shall promptly, following receipt of written notice from Lessor to such effect, remove such engine from the Airframe, failing which such impairment or adverse effect will be deemed an Event of Default pursuant to Section 23(k).
(ii) Lessee shall comply with the requirements of Section 19.4(c) for as long as such engine is installed on the Airframe and the engine shall be removed from the Airframe and the removed Engine reinstalled on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not later than the Termination Date.
(b) Installation of Engines on other Airframes . Provided no Event of Default has occurred and is continuing, Lessee may install an Engine removed from the Airframe on any other airframe of the same type operated by and in Lessee’s fleet of aircraft, but only if:
(i) Lessee has title to such other airframe and such airframe is free and clear of all Liens (except as the same are permitted to exist pursuant to Section 17.7); or
(ii) such other airframe is leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement, provided that (A) such airframe is free and clear of all Liens except the rights of the parties to the lease or conditional sale or other security agreement covering such airframe and as the same are otherwise permitted to exist pursuant to Section 17.7, and (B) there shall be in effect a written recognition of rights agreement of the lessor or secured party of such airframe substantially in the form appearing in Appendix 8 or substantially similar agreement to the effect that such lessor,

	  	31	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

conditional seller or secured party will not claim any interest in the Engine by virtue of such Engine being installed on such airframe, and which agreement may be set forth in any relevant lease, conditional sale agreement, mortgage or security agreement. If any of the respective interests of Lessor or any relevant Financing Party in an Engine is materially impaired by virtue of installation on any such other airframe, Lessee shall promptly remove such Engine from such other airframe, failing which such impairment or adverse effect will be deemed an Event of Default under Section 23(k) or in the event such continued installation of such Engine on such airframe has resulted in loss of title to the Engine by Lessor, an Engine Loss;
and in either case, Lessee shall comply with the requirements of Section 19.4 for as long as such Engine is installed on such other airframe and the Engine shall be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of an Event of Default, but in any event, not less than thirty (30) days prior to the Scheduled Termination Date.
12.13. Installation of Items of Equipment on Other Aircraft . Subject to the preceding provisions of this Article 12, Lessee may permit any Item (excluding Landing Gear) to be installed on another aircraft solely to the extent such aircraft is within Lessee’s fleet of aircraft; provided, however, upon the occurrence and continuation of an Event of Default following the removal of any such Item from the Aircraft, Lessee shall promptly, but in no event later than ten (10) Business Days following such Event of Default:
(a) reinstall on the Aircraft each such Item not then currently installed thereon, assuming such Item is in airworthy condition, or
(b) in the event such Item is not in an airworthy condition, such Item shall be restored promptly to an airworthy condition and reinstalled on the Aircraft or, in the case of a Part, such Part may be exchanged in accordance with Section 12.11.
12.14. Failure to Reinstall Engines and Items of Equipment on the Aircraft . If (a) an Event of Default has occurred and is continuing which is the result of Lessee’s failure to make any payments when due or failure to maintain the airworthiness of the Items of Equipment, and (b) Lessee fails to comply with the requirements set forth in Sections 12.12 and 12.13, then in such instance and in recognition of the higher credit risk to which an aircraft lessor is exposed when an Engine, APU, or Part has been removed from an aircraft at a time when a Default or an Event of Default has occurred and is continuing, Lessee shall pay to Lessor an additional rental charge, incurred as Supplemental Rent and not as a penalty, in the amount of (X) ***** for each Engine, (Y) ***** for the APU, and (Z) ***** of the replacement cost for any Part, for each day each such Engine, APU or Part, as the case may be, remains in noncompliance with Sections 12.12 or 12.13, as the case may be.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	32	  	ARTICLE 12
MAINTENANCE MODIFICATION AND
OPERATION OF THE AIRCRAFT	

13.	MAINTENANCE RESERVES	
13.1. Maintenance Reserves . Lessee shall make payments to Lessor in respect of the Maintenance Reserves in accordance with Appendix 2C, on a monthly basis, within ten (10) days following the last day of each Calendar Month, with the first payment due ten (10) days following the first full Calendar Month of the Lease Term; provided that Lessee’s final payment in respect of Maintenance Reserves shall be made on the Termination Date.
13.2. Discrepancies . If Lessee’s actual utilisation of the Aircraft is greater than Lessee’s utilisation of the Aircraft reported to Lessor in accordance with Article 16, Lessee shall make up any deficiency payments in respect of Maintenance Reserves to Lessor within three (3) Business Days of the date of receipt of written notice from Lessor.
13.3. Rights in Maintenance Reserves .
(a) All amounts paid by Lessee in respect of Maintenance Reserves are the sole and exclusive property of Lessor and Lessor shall be entitled to freely commingle such moneys with its several funds and deal with such moneys as Lessor sees fit. Notwithstanding such stated intent, if and to the extent that the Maintenance Reserves or any part thereof, under any applicable Law or otherwise, are determined to be security deposits or otherwise the property of Lessee or if it is so determined those monies are a debt owed to Lessee or that Lessee shall have any interest in those monies, Lessee and Lessor agree that subclauses (i) and (ii) below shall apply.
(i) Pursuant to applicable Law, Lessee hereby grants to Lessor a first and prior perfected Lien and possessory security interest in the Maintenance Reserves as security for Lessee’s Obligations, including, without limitation, the obligations of Lessee to maintain and return the Aircraft and each Item of Equipment in the condition required by this Lease. Lessee agrees to execute and file, at Lessee’s expense, with the appropriate Governmental Authorities any and all documents necessary or reasonably requested by Lessor to evidence and perfect such security interest in favour of Lessor, including but not limited to the execution before a notary public of a pledge agreement under and pursuant to Mexican Law between Lessee, as pledgor, and Lessor, as pledgee, in form and substance reasonably acceptable to Lessor, and the filing and registration thereof with the appropriate Governmental Authorities.
(ii) Lessee shall not assign, hypothecate or otherwise transfer its interests, if any, in the Maintenance Reserves.
(b) Upon and during the continuance of an Event of Default, and in addition to all other rights Lessor may have under this Lease under applicable Law, Lessor may use, apply or retain all or any portion of the Maintenance Reserves, and, without limitation, Lessor may immediately or at any time thereafter, while any Event of Default is continuing, without prior notice to Lessee (x) offset all or any part of the Obligations or Related Obligations against the liabilities of Lessor in respect of any obligations of Lessor or Affiliate of Lessor under any Related Lease, or (y) apply the Maintenance Reserves in or towards the payment or discharge of the Obligations or Related Obligations in such order as Lessor reasonably sees fit. If Lessor uses or applies all or any portion of such Maintenance Reserves, such application shall not be deemed a cure of any Default or Event of Default unless and until Lessee shall have, and Lessee shall within three (3) Business Days after written demand therefor deposit with Lessor in cash an

	  	33	  	ARTICLE 13
MAINTENANCE RESERVES	

amount sufficient to fully restore each such Maintenance Reserve account to its original sum prior to such application plus any amount then due and payable by Lessee in respect of Maintenance Reserves.
13.4. Claims for Reimbursement - Timing . Any claim by Lessee for reimbursement from the Maintenance Reserves made pursuant to this Lease shall be made within the earlier to occur of (x) one hundred eighty (180) days following the completion date of the Maintenance Check for which such claim is being made and (y) the Termination Date, provided that notification by Lessee to Lessor on or before the Termination Date that a claim exists and will be submitted no later than 180 days following completion of the respective Maintenance Check shall be deemed as complying with the timing requirement set forth herein. Should Lessee fail to make such claim within such time period (or agree with Lessor in writing concerning an alternate disposition for such claim), Lessee shall thereafter be forever barred and estopped from making a claim in respect of such maintenance.

	  	34	  	ARTICLE 13
MAINTENANCE RESERVES	

14.	MANUFACTURERS’ WARRANTIES	
14.1. Assignable Warranties . At Delivery, Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by the Airframe Manufacturer and the Engine Manufacturer pursuant to airframe and engine warranty assignment agreements in form and substance satisfactory to Lessee, Lessor and such Manufacturer. In addition, at Delivery Lessor will assign and make available to Lessee for the duration of the Lease Term the benefit of all assignable warranties provided to Lessor by any other Manufacturer, and at Lessee’s cost, Lessor shall cooperate with Lessee in respect of the enforcement of any such warranties.
14.2. Reassignment; Assignment of Lessee Warranties . On the Termination Date:
(a) the benefit of any warranty and other rights assigned or made available by Lessor to Lessee pursuant to this Lease will be reassigned automatically and without further act or writing to Lessor; provided that upon the occurrence and continuation of an Event of Default, Lessor may instruct any Manufacturer of any Item of Equipment to make any payments of monies under any warranty claims made by Lessee directly to Lessor for further credit to Lessee upon and subject to Lessee’s cure of such Event of Default; and
(b) Lessee shall assign and shall be deemed to have assigned to Lessor on and as of the Termination Date, at no charge to Lessor, any and all warranties Lessee has obtained in connection with any maintenance or services performed on the Aircraft or any Item of Equipment during the Lease Term.
14.3. Warranty Claims . Lessee will diligently and promptly pursue any valid claims it may have under the warranties assigned to it hereunder with respect to the Aircraft and other Items of Equipment. At the written request of Lessor, Lessee shall provide an itemised list to Lessor not later than the earlier of (x) fourteen (14) days prior to the Scheduled Termination Date and (y) the Termination Date of all such warranty claims made by Lessee during the Lease Term to the extent historical records of the same are maintained by Lessee (except to the extent such information shall have previously been provided to Lessor).

	  	35	  	ARTICLE 14
MANUFACTURERS’ WARRANTIES	

15.	SUBLEASING AND WET LEASING	
15.1. Subleasing. Provided no Default or Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Permitted Subleases for the Aircraft with Permitted Sublessees provided that:
(a) the term of such Permitted Sublease is not for a period exceeding the Lease Term and shall expressly prohibit sub-subleasing of the Aircraft and any Item of Equipment independent of the Airframe;
(b) the rights of the Permitted Sublessee under such Permitted Sublease are at all times expressly subject and subordinate to the rights of Lessor hereunder and to the respective interests of Owner, Owner Participant and any Financing Parties and shall contain a provision substantially to the effect of:
“Anything in this sublease to the contrary notwithstanding, the sublessee’s rights hereunder to the possession, use and enjoyment of the Airframe, and if attached to the Airframe at the commencement of the sublease or if subsequently delivered to sublessee during the term of the sublease, the Engines in accordance with the terms hereof shall be subject to the Aircraft Lease Agreement dated as of 17 November 2010 (the ‘ Primary Lease’ ) between Wilmington Trust SP Services (Dublin) Limited, as lessor (the ‘ Primary Lessor’ ), and the sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the sublessee confirms and agrees that this sublease is in all respects subject and subordinate to the Primary Lease. Upon notice to the sublessee hereunder by the Primary Lessor that an Event of Default (as defined in the Primary Lease) has occurred and is continuing, and that the Primary Lease shall have been cancelled or terminated pursuant to the terms thereof, the Primary Lessor may, at its option, by written notice to the sublessee after the date of such cancellation or termination:
(i) require the sublessee to enter into an agreement, in form and substance satisfactory to the Primary Lessor, recognising the Primary Lessor, as the sublessor hereunder and reconfirming all of the obligations of the sublessee hereunder, or
(ii) terminate this sublease and require prompt delivery by the sublessee of the Aircraft to the Primary Lessor, in accordance with the return provisions of this sublease.
Unless the sublessee shall have received any such written notice from the Primary Lessor requiring attornment or terminating this sublease, the sublessee shall be and remain fully obligated hereunder notwithstanding the continuance of any Event of Default under the Primary Lease or the termination or cancellation thereof pursuant to the terms thereof.”;
(c) Lessee causes the Permitted Sublessee under the Permitted Sublease to deliver to and for the benefit of Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease a supplemental power of attorney for deregistration of the Aircraft in the form delivered by Lessee to Lessor at Delivery;

	  	36	  	ARTICLE 15
SUBLEASING AND WET LEASING	

(d) Lessee and such Permitted Sublessee shall not enter into any amendments, modifications, waivers or the like of any provision of the Permitted Sublease without Lessor’s prior written consent and should such consent be granted, Lessee shall deliver to Lessor a copy of any such duly executed agreements between Lessee and such Permitted Sublessee in connection with the same;
(e) if necessary, Lessee and Permitted Sublessee shall authorise the filing of and deliver documents appropriate for perfection filings in the State of Registration and such other jurisdictions as Lessor, in good faith, deems reasonable and appropriate, in form and substance satisfactory to Lessor, covering the interests of Lessee and such Permitted Sublessee under such Permitted Sublease, together with any other documents requested by Lessor to protect or perfect the interest of Lessor, Owner, Owner Participant and any Financing Parties in the Permitted Sublease in the State of Registration and/or such other jurisdictions;
(f) Lessee shall assign each Permitted Sublease and all rights and security deposits and maintenance and other reserves received thereunder to Lessor pursuant to a security assignment of the Permitted Sublease together with a consent and agreement of the Permitted Sublessee, each in form and substance satisfactory to Lessor and, if applicable, Owner, Owner Participant and each Financing Party, as security for Lessee’s Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding the enforceability and perfection of the Permitted Sublease and such assignments for security and the consent and agreement or other assurances reasonably satisfactory to Lessor;
(g) the provisions of each Permitted Sublease shall provide for benefits and protections to Lessee, as sublessor, which are (in respect of material terms and in the aggregate) not less advantageous to Lessee, as sublessor, than the benefits and protections provided to Lessor by the provisions of this Lease;
(h) Lessee shall ( x ) notify Lessor of the terms of each Permitted Sublease (and provide copies of the final drafts thereof) not less than fifteen (15) Business Days prior to the execution of such Permitted Sublease, and ( y ) furnish the “original” copy of such Permitted Sublease to Lessor as soon as possible after the execution thereof, but in any event prior to the delivery of the Aircraft to such Permitted Sublessee; and
(i) neither Lessee nor Permitted Sublessee shall register any Permitted Sublease on the International Registry without Lessor’s prior consent, which consent shall not be unreasonably withheld.
15.2. Wet Leasing. Provided no Event of Default has occurred and is continuing, Lessee may, subject to the restrictions contained in Section 11.6, enter into Wet Leases for the Aircraft to any Person provided that:
(a) the rights of the lessee under the Wet Lease are at all times expressly subject to and subordinate to, and do not conflict in any respect with (or give such wet lessee any rights greater than the rights of Lessee under), the terms of this Lease and the rights of Lessor hereunder and the respective interests of Owner, Owner Participant and any Financing Party;
(b) Lessee provides Lessor with (x) a certified copy of the applicable provisions from the Wet Lease or an officer’s certificate indicating whether Lessee or the wet lessee under the Wet

	  	37	  	ARTICLE 15
SUBLEASING AND WET LEASING	

Lease will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the Wet Lease, and (y) a certified copy or original of an insurance certificate and broker’s letter of undertaking confirming the maintenance of insurance coverage required by this Lease; and
(c) in any event, unless otherwise agreed by Lessor in writing, the term of such Wet Lease ends on a day not later than thirty (30) days prior to the Scheduled Termination Date.
15.3. No Independent Subleasing of Items of Equipment. No Item of Equipment may be subleased independently from the Aircraft.
15.4. Expenses. Lessee shall pay or reimburse, without duplication, Lessor, Owner, Owner Participant, Servicer, Security Trustee and any other Financing Party on demand for their respective, documented, out of pocket costs and expenses reasonably incurred in connection with the review, negotiation and consummation of the transactions contemplated by any Permitted Sublease or Wet Lease.
15.5. Lessee Remains Liable. Lessee shall remain primarily and fully responsible and liable for the performance of its Obligations under, and the observance of the terms of this Lease and the Operative Documents, notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted Sublease or Wet Lease had not occurred.

	  	38	  	ARTICLE 15
SUBLEASING AND WET LEASING	

16.	REPORTING AND INSPECTIONS	
16.1. Financial Reporting. Lessee agrees to furnish to Lessor the following, which shall be deemed Information:
(a) Semi-Annual Statements . As soon as reasonably practicable after the end of the second and fourth quarterly fiscal periods in each fiscal year of Lessee, and in any event within one hundred twenty (120) days thereafter, duplicate copies, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such six month period;
(ii) consolidated statements of income and retained earnings of Lessee or Guarantor for such six month period; and
(iii) consolidated statements of cash flow of Lessee or Guarantor for the portion of the fiscal year ending with such six month period.
(b) Annual Statements . As soon as practicable after the end of each fiscal year, and in any event within one hundred eighty (180) days thereafter, a copy, in English, of:
(i) a consolidated balance sheet of Lessee or Guarantor as at the end of such year, and
(ii) consolidated statements of income and retained earnings and of cash flow of Lessee or Guarantor for such year, prepared in accordance with GAAP (except as set forth in the auditor’s opinion) accompanied by an auditor’s report of a firm of independent certified public accountants of recognised standing in Lessee’s State of Organisation (which report may be adverse, qualified or disclaim an opinion).
(c) Comparison . All statements furnished under clauses (a) or (b) above shall set forth in comparative form the amount for the end of the corresponding fiscal year, or corresponding period of the preceding fiscal year, as the case may be.
(d) Satisfaction by Publication . Lessee’s obligations under Sections 16.1(a) through (c) above shall be deemed satisfied should Lessee or Guarantor publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee thereunder, and further notify Lessor in writing of the website address.
(e) Notice of Proceedings . Prompt notice of any litigation or arbitral proceedings not covered by insurance (except for deductibles standard in the airline industry) and of all proceedings by or before any Governmental Authority (i) which might adversely affect Owner’s ownership or Owner’s or Lessor’s other interests in the Aircraft, (ii) which relate to the Aircraft and where the amount involved not covered by insurance is in excess of ***** or (iii) which might, in the reasonable and good faith judgment of Lessee, have a material adverse effect on the ability of Lessee to perform the Obligations.
(f) Additional Information . Lessee will furnish to Lessor (i) unless available on a website generally available free of charge to the public, promptly after the same has been made
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	39	  	ARTICLE 16
REPORTING AND INSPECTIONS	

public, a copy of any announcement released by Lessee to any stock exchange on which Lessee is publicly traded by shares (if applicable), and (ii) a copy of any other information concerning Lessee’s business which Lessee releases or otherwise makes available to its creditors generally.
16.2. Aircraft Utilisation and Other Reporting/Information. During the Lease Term, Lessee agrees to furnish to Lessor the following information in connection with Lessee’s utilisation of the Aircraft:
(a)(i) within ten (10) days following the last day of the first full Calendar Month and each subsequent Calendar Month during the Lease Term, and (ii) on the Termination Date, a utilisation report in the form appearing in Appendix 8 reporting the utilisation of the Items of Equipment set forth therein for the immediately preceding Calendar Month or part thereof;
(b) as promptly as reasonably practicable, but in no event later than the date of issuance of the next monthly utilisation report following the date of the removal of any Engine, Landing Gear or APU, advising of (i) the reason for such removal, (ii) the location of such Item of Equipment, (iii) the total accumulated Flight Hours and Cycles of such Item of Equipment (or total APU Hours with respect to the APU), (iv) the Flight Hours and Cycles accumulated since the most recent Engine Restoration with respect to any Engine or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the APU Hours accumulated since the most recent Overhaul with respect to the APU, and (vi) the intended workscope, in each case, as applicable;
(c) written notice of and information of any accident or incident with respect to any Item of Equipment (other than Parts) as promptly as possible, and in any event within two (2) Business Days following the occurrence or detection thereof;
(d) within a reasonable time (but not less than ten (10) days) prior to the commencement date for any Maintenance Check and in accordance with Section 12.6, the identity of the Approved Maintenance Organisation Lessee intends to have perform such check together with a copy of the workscope intended to be accomplished in connection with the same, to the extent available; and
(e) upon written request of Lessor, a copy of the Maintenance Program, inclusive of all revisions issued as of the date of such request. Lessor agrees not to disclose such Maintenance Program to any Person (other than Lessor’s employees and consultants, who shall be instructed not to disclose the same other than as permitted by this Section 16.2(e)) except as necessary to bridge the Maintenance Program onto another maintenance program following the Termination of the Lease, and shall require any Person to whom it shall disclose the same as permitted by this Section 16.2(e), to agree in writing not to disclose the contents of such Maintenance Program.
16.3. Further Information; Inspections .
(a) Lessee shall provide to Lessor, following Lessor’s written request during the Lease Term (provided that long as no Event of Default has occurred and is continuing, such requests shall be made no more than once per year) and within one hundred eighty (180) days following the Termination Date, a list of the airports to which Lessee has operated the Aircraft during the (i) twelve (12) months preceding such request (or the Termination Date, if applicable).

	  	40	  	ARTICLE 16
REPORTING AND INSPECTIONS	

(b) During the Lease Term, Lessee shall furnish to Lessor such other information concerning the location, condition, use, maintenance and operation of the Items of Equipment as Lessor may reasonably request.
(c) Lessee shall permit any Person (including prospective purchasers, financiers or lessees of the Aircraft) designated in writing by Lessor, to visit and inspect (at any reasonable time, provided that, so long as no Event of Default has occurred and is continuing, such inspection shall not unreasonably interfere with Lessee’s business, maintenance or operational commitments) the Items of Equipment, their condition, use and operation and the records maintained in connection therewith and, at Lessor’s cost, to make copies of such records as Lessor may reasonably designate (unless an Event of Default has occurred and is continuing, in which case such copies shall be provided to Lessor at Lessee’s cost).
(d) Lessor shall be permitted to have representatives and/or agents present throughout the accomplishment of Maintenance Checks to observe all aspects of the same including, but not limited to, the workscope thereof; provided, however, that such representatives and agents shall not interfere with such Maintenance Checks and shall be bound by all rules and regulations of the relevant maintenance provider. Neither Lessor nor any person designated by Lessor shall have any duty to make any such inspection and none shall incur any liability or obligation by reason of making or not making such inspection.
16.4. Technical Report Prior to Return of Aircraft .
(a) Twenty (20) months prior to the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance status report detailing the information in the form appearing in Appendix 8.
(b) At Lessor’s written request, Lessee will make copies available of (i) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at Return, (ii) an Airworthiness Directive status list, (iii) a service bulletin incorporation list, (iv) Time Controlled Part listings and current maintenance status of each, (v) a list of modifications and alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior material burn certificates, (vii) the complete workscope for the Maintenance Checks and other work to be performed prior to Return, (viii) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by Lessee from any Manufacturer, (ix) current Engine disk sheets and a description of the work accomplished during the last shop visit for each Engine and (x) any other data which is reasonably requested by Lessor in connection with any of the foregoing.

	  	41	  	ARTICLE 16
REPORTING AND INSPECTIONS	

17.	REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS	
17.1. Registration. At Delivery, Lessee shall register the Aircraft (or shall cause the same to be registered) with the Register in the State of Registration with the respective interests of Owner, Lessor and the Security Trustee and any relevant Financing Party recorded to the fullest extent permitted by applicable Law in the State of Registration and shall thereafter maintain such registration throughout the Lease Term. Lessor and Owner shall cooperate and shall cause Servicer, Owner Participant, Security Trustee and any Financing Party to cooperate with Lessee in effecting and maintaining such registration and shall provide to Lessee such documents as Lessee may reasonably request in connection therewith. Lessee shall not take or permit any action inconsistent with the continued registration of the Aircraft or the recordation of the various interests of Lessor, Owner and any Financing Party therein with the Register.
17.2. Identification Plates. Lessee shall, throughout the Lease Term, maintain in respect of the Airframe, the APU and each Engine a fireproof identification plate of a reasonable size, in a clearly visible place in the cockpit of the Aircraft (or in the vicinity of the Airframe Manufacturer’s data plate) and in close proximity to the Manufacturer’s data plate on each Engine and the APU, that contains the legend in writing appearing in Appendix 2B. Lessee shall not remove, or cause or permit the removal or modification of such identification plate without Lessor’s prior written consent. Lessee shall not allow the name of any other Person (with the exception of Lessee) to be placed on the Airframe or any Engine as a designation that might be interpreted as a claim of ownership or of any interest therein. Lessee shall promptly replace any such nameplate that becomes illegible, lost, damaged or destroyed for any reason. If at any time Lessor and/or Owner transfer their respective interests in the Aircraft or this Lease as permitted hereunder or Lessor or Owner finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost, promptly affix such new nameplates to the Airframe and the Engines as may be required by Lessor.
17.3. Aeronautics Authority Acknowledgment. If and to the extent that the same is customarily available in the State of Registration, Lessee shall use reasonable efforts to obtain and deliver to Lessor at Delivery, a letter from the Aeronautics Authority addressed to Lessor and (if so requested by Lessor) Owner and/or any Financing Party confirming that it will recognise Owner’s title to the Aircraft and the respective rights of Lessor, Owner and/or such Financing Party to deregister the Aircraft upon the cancellation, termination or expiration of the leasing of the Aircraft hereunder in accordance with the provisions hereof
17.4. Authorisation to Make Perfection Filings. The execution of this Lease by the parties hereto constitutes the authorisation by Lessee to Lessor’s legal counsel to make such perfection filings as Lessor and its counsel deem necessary or desirable to protect the interest of Lessor, Owner and any Financing Party hereunder. From time to time on reasonable written request made by Lessor, Lessee shall provide to Lessor a letter on the letterhead of Lessee, in form and substance reasonably satisfactory to Lessor and executed by an officer of Lessee, authorising such Persons as Lessor may specify to make such perfection filings as Lessor reasonably deems necessary or desirable to protect the interests of Lessor, Owner or any Financing Party hereunder.
17.5. Perfection of Title .
(a) Lessee shall, together with Owner, Owner Participant, Security Trustee and/or Lessor, cause, or, at Lessor’s request, assist Lessor in causing, this Lease, the Lease Supplement

	  	42	  	ARTICLE 17
REGISTRATION; PERFECTION OF
OWNER’S TITLE; LIENS	

and any and all additional instruments which shall be executed pursuant to the terms hereof as permitted by applicable Law, to be kept, filed and recorded in the offices of any Governmental Authorities in the State of Registration as required by the Register, any applicable Aeronautics Authority and any applicable Law. Lessee shall not take any action which would conflict with or adversely affect such filings and recordation of the Lease and such other documents as provided herein.
(b) If at any time subsequent to the initial recordation under the preceding clause (a), any filing or recording is reasonably necessary or desirable to protect the interests of Lessor, Owner Participant, Security Trustee and/or Owner, Lessee, upon written request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded or, as necessary to be re-filed and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor, Owner Participant, Security Trustee and Owner hereunder and in the Aircraft or any Item of Equipment. At the reasonable request of Lessor and at Lessor’s cost, Lessee shall furnish to Lessor, Owner (if not Lessor), Owner Participant and Security Trustee an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation.
(c) Without limiting the foregoing, Lessee shall do or cause to be done any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and interests of Owner, Owner Participant, Security Trustee and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee does, or is reasonably likely to, operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Owner’s and Owner Participant’s ownership rights regarding the Aircraft within any such jurisdiction.
17.6. Cape Town Convention .
(a) Lessee shall promptly make or approve registrations, filings and recordings, and/or do or cause to be done such additional acts and things which may be reasonably requested by Lessor (for itself or for and on behalf of Owner and any Financing Party) as being required by or advisable under applicable law, in order (x) that the Operative Documents effectively constitute international interests, while retaining the commercial and business agreements of the parties as described therein in any such new Operative Documents, and provide to the such parties the full benefit of the Cape Town Convention with respect to the Aircraft and the Engines, and (y) the Operative Documents contain such provisions as may be necessary to confirm the commercial and business agreements of the parties therein to the greatest extent permitted under the Cape Town Convention, including, without limitation, with respect to:
(i) matters concerning the documentation and registration in the International Registry of international interest(s) or prospective international interest(s) which are, or may be, vested in Lessor, Owner or any Financing Party under this Lease or any other Operative Documents and the relative priority thereof contemplated in the Operative Documents as against competing interests;

	  	43	  	ARTICLE 17
REGISTRATION; PERFECTION OF
OWNER’S TITLE; LIENS	

(ii) matters concerning sales and prospective sales which are required or permitted by this Lease or the other Operative Documents, including with respect to documentation and registration in the International Registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iii) matters concerning any assignment of associated rights or prospective assignment of associated rights which is required or permitted or constituted by this Lease or any other Operative Document, the documentation and registration thereof in the international registry and the relative priority thereof contemplated in the Operative Documents as against competing interests;
(iv) delivery and recording with the Register of an irrevocable de-registration and export request authorisation substantially in the form annexed to the Protocol, which may be exercised only after the occurrence and during the continuance of an Event of Default; and
(v) subject to the preceding and the following provisions of this Section 17.6, including or excluding in writing the application of any provisions of the Cape Town Convention and/or the Protocol that Lessor (for itself or acting for an on behalf of Owner or any Financing Party), acting reasonably may deem advisable in connection with the foregoing.
(b) In addition to the remedies set forth in this Lease or as may otherwise be available to Lessor, Owner or any Financing Party under any other Operative Documents, at law or in equity, upon the occurrence and during the continuation of an Event of Default, Lessor and/or Owner may, but shall not be obligated to, exercise any remedy available to it under the Cape Town Convention and/or the Protocol (subject, in each case to the requirements and limitations of the Cape Town Convention and the Protocol and to the requirements and limitations imposed by the State of Registration in relation to the Cape Town Convention and Protocol), including:
(i) the remedies set forth in Articles 8, 9 and 34 of the Cape Town Convention and Article IX(1) of the Protocol;
(ii) relief pending final determination under Article 13 of the Cape Town Convention and Article X of the Protocol (including sale of the Aircraft and application of proceeds therefrom, but excluding the application of Article 13(2) of the Cape Town Convention); and
(iii) the procurement of the de-registration of the Aircraft and the export and physical transfer of the Aircraft or any Engine from the territory in which it is situated pursuant to Article IX of the Protocol, but excluding, solely to the extent permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention with regard to default remedies without prejudice to Article IX(1) of the Protocol, provided that such exclusion shall not be applicable (to the extent permitted by Article 15 of the Cape Town Convention) to the extent such default remedies are exercised outside the territorial limits of the State of Registration and in a manner not

	  	44	  	ARTICLE 17
REGISTRATION; PERFECTION OF
OWNER’S TITLE; LIENS	

involving the courts of the State of Registration or of its territorial units; and ( y ) where a remedy is available to it under the Cape Town Convention or the Protocol and also under this Agreement and the other Operative Documents or other applicable law, to the extent permitted by the Cape Town Convention and the Protocol and other applicable law, and subject to the provisions of the previous clause ( x ), Lessor (for itself and for and on behalf of Owner and any Financing Party) may elect under which of the foregoing it shall exercise such remedy.
(c) Without limiting the generality of the foregoing or any other provisions of the Operative Documents, Lessee hereby (i) agrees (without prejudice to its rights under Section 10.2) to exclude the application of Article XVI(1)(a) of the Protocol; and (ii) consents, pursuant to Article XV of the Protocol, to any assignment of associated rights within the scope of Article 33(1) of the Cape Town Convention which is permitted or required by the Operative Documents and further agrees that the provisions of this Section 17.6, shall apply, in particular, with respect to Articles 31(4) and 36(1) of the Cape Town Convention to the extent applicable to any such assignment of associated rights.
(d) In this Section 17.6 the following terms have the meanings given in the Cape Town Convention and the Protocol: international interest, prospective international interest, international registry, assignment of associated rights, prospective assignment of associated rights, registered, sale and prospective sale and proceeds .
17.7. Permitted Liens. Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to this Lease, any Item of Equipment, title thereto or any interest therein, except (i) the respective rights of Owner, Lessor and Lessee as herein provided; (ii) Lessor’s Liens; (iii) Liens for Taxes not yet due or being contested in good faith by appropriate proceedings so long as adequate reserves are maintained with respect to such Taxes in accordance with GAAP; (iv) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee); and (v) Liens for airport, navigation, and en-route charges arising in the ordinary course of business and for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings (and for which adequate reserves have been made in accordance with GAAP, or if required to contest the same, adequate security has been posted by Lessee). Lessee shall not be permitted to contest any Lien if such contest gives rise to any reasonable likelihood of the sale, forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment or any interest therein in the course of any such proceedings, or as a result of any such Lien or the respective interests of Lessor, Owner or any Financing Party will be similarly adversely affected. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to any Item of Equipment.
17.8. Expenses. With respect to all filings, recordings and/or registrations to be made in accordance with the requirements of each of Sections 17.1 through 17.6, inclusive, Lessee shall bear all costs incurred in effecting and maintaining the registration of Owner’s and Lessor’s interests during the Lease Term, but Lessor shall bear any costs of filing, maintaining or otherwise perfecting the interests of Security Trustee, Servicer, Owner Participant and any Financing Party.

	  	45	  	ARTICLE 17
REGISTRATION; PERFECTION OF
OWNER’S TITLE; LIENS	

18.	GENERAL INDEMNITY	
18.1. Scope. Lessee agrees to indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee from and against any and all Claims which in any way may result from, pertain to or arise out of or are in any manner related to:
(a) the Aircraft, this Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or
(b) the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or
(c) any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee, Lessor, Owner Participant or Servicer) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or
(d) any failure of Lessee to provide or maintain the Aircraft Documents in accordance with the relevant provisions of this Lease or any other Operative Document during the Lease Term; or
(e) any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or
(f) any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or
(g) any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof; or
(h) any transaction, approval, or document contemplated by this Lease or any other Operative Document or given or entered into in connection herewith or therewith.
Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be subrogated to all rights and remedies which such indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall give prompt written notice thereof to Lessee or such Indemnitee, as the case may be, but failure to give such notice shall not relieve Lessee of its obligations hereunder, except to the extent such failure precludes or restricts Lessee from contesting or otherwise defending any such Claim and except for any liability or obligation of Lessee to the extent the same is increased or would not have been incurred in the absence of any such failure.

	  	46	  	ARTICLE 18
GENERAL INDEMNITY	

18.2. Lessee’s Release. Lessee hereby waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such defect may be discovered, whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee, and regardless of the location of the Aircraft or any Item of Equipment at any such time.
18.3. Repayment. If an Indemnitee shall obtain a repayment of any amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default, promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
18.4. Payment. Subject to the provisions of Section 18.3 hereof, Lessee shall pay directly to each Indemnitee all amounts due under this Article 18 within ten (10) days of the receipt of written notice by Lessee from such Indemnitee that such payment is due, together with reasonable detail supporting Lessee’s obligations in respect of the relevant Claim(s) and the amount(s) thereof.
18.5. Exclusion. Notwithstanding the foregoing provisions of this Article 18, Lessee shall not be obligated to make any payment to an Indemnitee by way of indemnity in respect of any Claim against such Indemnitee, to the extent that such Claim results from or arises out of:
(a) the gross negligence or willful misconduct of such Indemnitee;
(b) any Lessor’s Lien, except to the extent any such Claim results from or arises out of (and in which case such Claim shall not be excluded from Lessee’s indemnity Obligations under this Article 18):
(i) the premature termination of any funding or other financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft following the occurrence and continuation of an Event of Default; or
(ii) any indemnity payment payable by an Indemnitee to another Person under any financing arrangements with a Financing Party with respect to Lessor’s or Owner’s financing of the acquisition or continued ownership of the Aircraft and for which Lessee has expressly agreed to provide an indemnity pursuant to Section 18.1;
(c) any Taxes;
(d) acts or events which occur (i) before Delivery (except with respect to any Claims arising from or related to Lessee’s acts or omissions in connection with its activities under and pursuant to, among other things, the Participation Agreement) or (ii) after the Termination Date (except if such Claims arise as a result of an act or omission of Lessee which occurred during the Lease Term and are not attributable to any act or omission of an Indemnitee);

	  	47	  	ARTICLE 18
GENERAL INDEMNITY	

(e) ordinary and usual operating or overhead expenses of any Indemnitee, other than as arising as a result of and during the continuance of an Event of Default;
(f) in respect of an Indemnitee, a breach by such Indemnitee of any express covenant given to Lessee; or
(g) the sale, transfer, assignment or other disposition by an Indemnitee of any of its right, title and interest in and to the Aircraft or the Lease, except as a result of the occurrence and continuation of an Event of Default.
For purposes of this Clause 18.5 and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an exemption from the provisions of Section 18.1 in respect of any Claim shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
18.6. After-Tax Nature of Indemnity . Each indemnity payable pursuant to this Article 18 shall be paid on an After-Tax Basis.
18.7. Contest . Lessee shall be entitled, at its sole cost and expense, acting through counsel acceptable to the respective Indemnitee, (a) in any judicial or administrative proceeding that involves solely a claim for one or more Claims, to assume responsibility for and control thereof, (b) in any judicial or administrative proceeding involving a claim for one or more Claims and other claims related or unrelated to the transactions contemplated by this Lease, to assume responsibility for and control of such Claim or Claims to the extent that the same may be and are severed from such other claims (and each of Lessee and such Indemnitee shall use its commercially reasonable efforts to obtain such severance), and (c) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (i) while a Default or an Event of Default shall have occurred and be continuing, (ii) if such proceedings will involve any reasonable possibility of the sale, forfeiture or loss of, or the creation of any Lien (other than a Lessor’s Lien) on, the Aircraft, any Item of Equipment, this Lease, any other Operative Documents, or any part of the foregoing, (iii) if such Claims relate in any way to the business of any Indemnitee other than the transactions contemplated by this Lease or any of the other Operative Documents, (iv) if such Claims, in the opinion of independent counsel for such Indemnitee reasonably satisfactory to Lessee, have a reasonable possibility of otherwise compromising or jeopardizing any substantial interests of such Indemnitee, or (v) if Lessee shall not have furnished such Indemnitee with an opinion of independent counsel reasonably satisfactory to such Indemnitee to the effect that there exists a meritorious basis for contesting such Claims. The Indemnitee may participate with its own counsel, at its own expense, in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. Lessee shall not without the prior written consent of the relevant Indemnitee enter into a settlement or other compromise with respect to any Claims that may result in admission or culpability on the part of any Indemnitee, otherwise subject any Indemnitee to any civil or criminal penalty or other prejudice any Indemnitee or the Aircraft. If for any reason Lessee shall not be responsible for and be in control of any contest contemplated in this Section 18.7, Lessee may, so long as no Default or Event of Default shall have occurred and be continuing, nonetheless participate in any such contest, at its sole cost and expense, in a manner reasonably acceptable to the relevant Indemnitee. The Indemnitee shall supply Lessee with such information reasonably requested by Lessee (and to the extent that it is commercially reasonable for the

	  	48	  	ARTICLE 18
GENERAL INDEMNITY	

Indemnitee to do so) as is necessary or advisable for Lessee to assume responsibility for and control or participate in any proceeding to the extent permitted by this Section 18.7. As long as no Default or Event of Default has occurred and is continuing, such Indemnitee shall not enter into a settlement or other compromise with respect to any Claims without the prior written consent of Lessee, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified with respect to such Claims under this Section 18.7. Notwithstanding this Section 18.7, no Indemnitee shall be prevented from settling or paying any Claim immediately if required by Law to do so nor from assuming control of and terminating Lessee’s participation in any contest of a Claim if, in such Indemnitee’s judgment, the interest of any Indemnitee may be adversely affected or prejudiced by any delay, act, omission or continued contest by Lessee of such Claim.
18.8. Survival . The indemnities contained in this Article 18 shall continue in full force and effect notwithstanding the occurrence of the Termination Date, and are expressly made for the benefit of and shall be enforceable by each Indemnitee.

	  	49	  	ARTICLE 18
GENERAL INDEMNITY	

19.	INSURANCE	
19.1. Obligation to Insure . Throughout the Lease Term, Lessee shall maintain in full force and effect, at its own cost and expense, the Insurances.
19.2. Liability Insurance . Lessee shall maintain in effect comprehensive third party aircraft liability insurance against bodily injury and property damage losses arising from ground, flight and taxiing exposures, including, but not limited to, passenger legal liability, cargo liability and products liability insurance in the amount set forth in Section 4.1 of Appendix 2B, and in the aggregate with respect to products liability, or such higher amount as Lessee may maintain from time to time on similar aircraft, for any one accident, or series of accidents arising out of any one event, with respect to the Aircraft and Items of Equipment. Such policy shall include war and allied risks in accordance with standard market practice (currently “ The Extended Coverage Endorsement-AVN 52E ”) plus such excess coverage through government indemnity or commercial insurance up to the full limit required herein. Any such liability insurance policy shall not be subject to any deductible amount except with respect to baggage, cargo liability, and hangar keeper’s liability coverage, for which there may not be a deductible in an amount exceeding ***** or such higher amount as may constitute general industry practice and e approved by Lessor in writing from time to time. All Insurances shall:
(a) name the Additional Insureds as additional insureds;
(b) be primary without right of contribution from any other insurance which is carried by any Additional Insureds with respect to the Aircraft or any Engine when not installed on the Aircraft; and
(c) each liability policy shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
19.3. Contractual Liability; Tail Coverage for Liability Insurance . The Insurances referred to in Section 19.2 shall:
(a) include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 18;
(b) for a period of two (2) years after the Termination Date, at Lessee’s cost and expense, continue to name each Indemnitee as additional insureds; and
(c) should Lessor and/or Owner transfer their interests in the Aircraft and this Lease pursuant to and in accordance with the provisions of Article 25, for a period of two (2) years from the effective date of such transfer continue to name as additional insured(s) the transferring Lessor (and the relevant transferring Owner and Financing Parties and other related Indemnitees).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	50	  	ARTICLE 19
INSURANCE	

19.4. Insurance Against Loss or Damage to the Items of Equipment .
(a) Lessee shall maintain in effect with respect to the loss of or damage to the Items of Equipment:
(i) all-risk ground, flight and ingestion aircraft hull insurance for the Agreed Value set forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine Agreed Value set forth in Appendix 2B, Section 4.3 covering each Engine when not installed on the Airframe and all risk insurance on a full replacement cost basis with respect to the Landing Gear, APU and Parts while not installed on or in the Aircraft, and
(ii) war risk insurance including, but not limited to, war, acts of terrorism, hijacking, confiscation, including confiscation by the Government of Registry, expropriation, nationalisation, seizure and where generally procured by carriers similarly situated with Lessee, further including coverage for electromagnetic, chemical and biological risks as the same is available on the standard commercial aviation insurance markets upon commercially reasonably terms.
(b) All such insurance shall be payable in Dollars and shall be, with respect to the Aircraft and each Engine, on an “agreed value” basis. Any hull insurance carried in accordance with this Section 19.4 shall not contain any provision for self-insured amounts or a deductible that exceeds the deductible amount appearing in Appendix 2B. Any policies carried in accordance with this Section 19.4 shall designate Security Trustee, as sole loss payee for an amount equal to the Agreed Value, on behalf of the Additional Insureds as their respective interests may appear, and Lessor as lessor of the Aircraft covered thereby.
(c) Installation of Other Engines on the Aircraft . If Lessee installs an engine not owned by Owner on the Aircraft, either ( x ) Lessee’s hull insurance on the Aircraft must automatically increase to such higher amount as is necessary in order to satisfy the requirement of this Section 19.4 that Owner receive the Agreed Value in the event of an Event of Loss and the amount required by the third party engine owner or ( y ) separate additional insurance on such engine will attach in order to satisfy separately the requirements of Lessee to such third party engine owner.
(d) I nstallation of Engines on other Airframes . If Lessee installs or permits the installation of an Engine on an airframe that is not the Airframe, either ( x ) the hull insurance maintained on such airframe must automatically increase by an amount equal to the Engine Agreed Value so that Owner receives the Engine Agreed Value in the event of an Event of Loss with respect to such Engine while installed on such airframe, or ( y ) separate additional insurance on such Engine will attach in order to satisfy separately the requirements of Lessee with respect to such Engine.
(e) Additional Lessee Coverage . Lessee may obtain additional hull insurance on the Aircraft, over and above the Agreed Value hereunder, provided that it does not adversely affect the coverage required to be maintained hereunder.
19.5. Reinsurance . If any of the risks required to be insured under this Article 19 are not placed in the manner required, then such risks shall be reinsured and shall:
(a) be on the same terms as the primary insurance required hereunder;
(b) be at levels of not ***** of insurances required to be maintained under this Article 19;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	51	  	ARTICLE 19
INSURANCE	

(c) contain a “cut through” clause providing that, in the event of any claim arising under such reinsurance, the reinsurer shall (in lieu of payment to the primary insurer or its successors) pay to the relevant Indemnitee and/or loss payee, as applicable, that portion of any claim which the reinsurer would otherwise be liable to pay the primary insurer or its successors;
(d) provide for payment to be made directly to the relevant Indemnitee notwithstanding ( x ) any bankruptcy, insolvency, examinership, liquidation, administration, receivership, dissolution or other similar proceeding with respect to the primary insurer and/or ( y ) that the primary insurer has made no payment under the primary policies; and
(e) be evidenced by a reinsurance certificate and supported by a broker’s letter of undertaking reasonably satisfactory to Lessor.
19.6. Requirements for All Insurances . All Insurances shall:
(a) be maintained in effect with insurers reasonably acceptable to Lessor, and, if applicable, reinsurers reasonably acceptable to Lessor, of recognised responsibility, specialising and normally participating in the international aviation insurance market and carrying and maintaining an A.M. Best rating of not less than A-, Class VII;
(b) provide that in respect of the interests of the Additional Insureds such policies of insurance shall insure the Additional Insureds regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by Lessee or any other Person;
(c) provide that the Additional Insureds shall have no responsibility for any premiums, assessments, warranties or representations in connection with such insurance;
(d) include the geographic limits of all territories over which the Aircraft and any Engine will be operated;
(e) waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against the Additional Insureds and their respective successors, assigns, agents, officers, employees and servants, other than set-off for unpaid premiums in respect of the Aircraft; and
(f) provide that if the insurers cancel such insurance for any reason whatever, or the same is allowed to lapse for nonpayment of premium, or if there is any material change in policy terms and conditions, such cancellation, lapse or change shall not be effective until thirty (30) days after receipt by Lessee’s designated broker of written notice from such insurers of such cancellation, lapse or change (ten (10) days for nonpayment of premium and seven (7) days for cancellation with respect to war risk and allied perils insurance or such shorter period as shall be customary on the London market for such insurance in such area of the world). Lessee shall cause such designated broker to immediately notify the Additional Insureds of any such notice of cancellation or termination.
19.7. Reports . Lessee shall cause its brokers to advise Lessor in writing promptly of any default in the payment of any premium. On or before the Delivery Date, and thereafter on or prior to each renewal or replacement by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more original certificates of insurance or reinsurance and a broker’s

	  	52	  	ARTICLE 19
INSURANCE	

letter of undertaking, each executed and delivered by an insurance broker appointed by Lessee, and, if applicable, a certified English translation thereof, reasonably satisfactory to Lessor, which shall describe in reasonable detail the insurance carried on the Aircraft. Lessee will cause its insurance brokers to identify to Lessor the insurers and reinsurers and shall advise Lessor in writing at least thirty (30) days (seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage and ten (10) days for reason of non-payment of premiums) prior to the cancellation by the underwriters of any such insurance or as soon as possible in respect of “non-renewal” or automatic termination for war risk insurance required hereunder. On or prior to the expiration or termination date of any insurance required hereunder, Lessee will provide Lessor with faxed or other electronic confirmation from Lessee’s insurance brokers certifying that renewal certificates of insurance evidencing the renewal or replacement of such insurance pursuant to the provisions of this Article 19 will be issued effective as of the termination date of the prior certificate of insurance coverage. Within fifteen (15) days after such renewal, Lessee will furnish to Lessor an original or electronic certificate of such insurance coverage from such insurance broker.
19.8. Assignee of Lessor’s and/or Owner’s Interests . If Lessor, Owner, Owner Participant and/or any Financing Party assigns, in accordance with the provisions of Article 25, all or any of its rights or otherwise disposes of any interest in the Aircraft or this Lease to any other Person, Lessee shall, upon request, procure that such Person shall ( x ) be named as loss payee in substitution for Lessor, Owner, Owner Participant and/or such Financing Party, as applicable and/or as additional insured in the policies effected hereunder and ( y ) enjoy the same rights and insurance enjoyed by Lessor, Owner, Owner Participant and such Financing Party, as applicable, under such policies from and after the effective date of such assignment or disposition.
19.9. Failure to Insure . If at any time the Insurances are not maintained by Lessee in compliance with this Article 19, Lessor, Owner, Owner Participant and any Financing Party shall be entitled but not bound to do any of the following (without prejudice to any of the rights which any of them may have under the Operative Documents by reason of such failure):
(a) upon giving notice thereof to Lessee, to pay any premiums due or to effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor or, if applicable, any Financing Party considers appropriate (and Lessee shall upon demand reimburse Lessor or if applicable, the relevant Financing Party in full for any amount so expended in that connection); and/or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), subject to the Aircraft being adequately insured, proceed to and remain at any airport designated by Lessor, until such failure is remedied to Lessor’s satisfaction.
19.10. Lessor’s Right to Insure . Lessee acknowledges that each of Lessor, Owner and each Financing Party has an insurable interest in the Aircraft and each Item of Equipment and may, at its own expense, obtain insurance or contingent insurance in its own name with respect to such insurable interest. Lessee shall provide to Lessor, Owner and each Financing Party all reasonable assistance as from time to time requested by it in order to adequately protect such insurable interest. Neither Lessor, Owner nor any Financing Party shall maintain any such insurance that would prejudice the insurance maintained by Lessee pursuant to this Lease. Lessee shall have no right to any proceeds of any insurance policies maintained by Lessor.

	  	53	  	ARTICLE 19
INSURANCE	

19.11. Changes to Insurance Practice . If there is a material change in the generally accepted industry-wide practice with regard to the insurance of aircraft by air carriers operating similar aircraft on routes similar to Lessee or any material change with respect to the insurance of aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of Insurances required to be effected under this Article 19) such that Lessor shall, after consultation with Lessee and Lessee’s designated reinsurance or insurance brokers, be of the reasonable opinion that the Insurances required pursuant to this Article 19 are insufficient to protect the respective interests of Lessor and the other Indemnitees (bearing in mind the nature and route of operation of the Aircraft), the insurance requirements set forth in this Article 19 shall be amended, as soon as reasonably practicable following notice by Lessor to Lessee, so as to include such additional or varied requirements as may be reasonably necessary to ensure that the insurance as so varied shall provide comparable protection to Lessor and the other Indemnitees to that which it would have done if such change had not occurred. In such circumstances, Lessor will consult in good faith with Lessee in relation to any proposed change.
19.12. AVN 67B or AVN 67C . Notwithstanding anything to the contrary contained in this Article 19, Lessor shall accept the terms of AVN 67B or AVN 67C (“ Airline Finance/Lease Contract Endorsement ”) where such endorsement is contrary to the terms of this Lease as long as such endorsement is customary in the major international insurance markets for commercial passenger airlines.

	  	54	  	ARTICLE 19
INSURANCE	

20.	LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT	
20.1. Risk of Loss and Damage . Following Delivery, Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and each Item of Equipment and of any other occurrence which shall deprive Lessee of the Aircraft or any Item of Equipment for the time being of the use, possession or enjoyment thereof including, without limitation, any resulting loss in value of the Aircraft or any Item of Equipment due to any of the aforementioned circumstances (save for any periods during which Lessor, or any Person lawfully claiming by or through Lessor, shall have taken possession and control of the Aircraft in breach of the covenant of quiet enjoyment set forth in Section 10.2).
20.2. Notification of Loss and Damage .
(a) Lessee shall give Lessor written notice of and information regarding any Event of Loss as promptly as possible, and in any event within two (2) Business Days of the occurrence of such Event of Loss.
(b) Each of Lessee and Lessor shall supply to the other all necessary information, documentation and assistance which may reasonably be required in connection with making any claim under the Insurances.
20.3. Event of Loss – Aircraft . If an Event of Loss occurs in respect of the Aircraft (with or without the Engines), Lessee shall pay, or procure that the insurer pays, to Owner (or to any Financing Party named as loss payee under the Insurances) as soon as reasonably practicable but in any event within sixty (60) days after the Event of Loss Date or, if earlier, the date such insurance proceeds are received, the Agreed Value as at the Event of Loss Date (or such earlier date, as the case may be) together with all Rent and other amounts then due and payable under the Operative Documents.
(a) The Net Event of Loss Proceeds received by Owner (or such other person as may be designated as loss payee) from Lessee or the insurer pursuant to this Article 20 shall be applied as follows:
(i) first, in discharge of the Agreed Value;
(ii) second, in discharge of any unpaid Rent and any other unpaid amounts (other than the Agreed Value) due and payable by Lessee under the Operative Documents and any Related Lease; and
(iii) third, payment of the balance, if any, to Lessee.
(b) Lessee shall continue to pay Basic Rent on the days and in the amounts required under this Lease notwithstanding any such Event of Loss provided that no further installments of Basic Rent shall become due after the date on which all sums due under this Section 20.3 shall have been paid in full, and on such date the Lease Term shall terminate and Owner shall, at Lessee’s cost and subject to the rights (if any) of the insurer cause title to the Aircraft (and to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the case may be) on a quitclaim basis, without warranty or recourse, except that the same shall be free and clear of all rights of Lessor and Owner and Lessor’s Liens without representation, recourse to or warranty by

	  	55	  	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT
AND ITEMS OF EQUIPMENT	

Lessor, Owner or any Financing Party and, provided no Default or Event of Default has occurred and is continuing or upon a complete cure thereof, Lessor shall thereafter return the Security Deposit to Lessee in accordance with Section 4.5 and shall return ***** of the remaining balance of the Maintenance Reserves to Lessee.
20.4. Event of Loss – Engine or APU . Upon the occurrence of an Event of Loss with respect to an Engine or APU, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days after the Event of Loss Date, convey to Owner, free and clear of all Liens, title to another engine or, as applicable, auxiliary power unit of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Engine . The replacement engine shall have a value and utility at least equal to, and be in as good operating condition as, the Engine with respect to which such Event of Loss shall have occurred, based on but not limited to (i) Cycles accumulated on each Engine Life Limited Part, (ii) Flight Hours accumulated since new (and accumulated since completion of the most recent heavy maintenance shop visit that completed a workscope at least equivalent to that of an Engine Restoration if an Engine Restoration had previously been accomplished on the Engine that suffered such Event of Loss), and (iii) Flight Hours and Cycles accumulated since new (and accumulated since the most recent restoration or refurbishment of each engine module with respect to any module for which a restoration or refurbishment had previously been accomplished on the Engine that suffered such Event of Loss), assuming such Engine was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Replacement APU . The replacement auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the APU with respect to which such Event of Loss shall have occurred, based on but not limited to (i) APU Hours (and APU Cycles if applicable) accumulated since new with respect to each APU Life Limited Part (as applicable) and (ii) APU Hours accumulated since new (and since the most recent Overhaul for each auxiliary power unit module if an Overhaul had previously been accomplished on the APU that suffered such Event of Loss), assuming such APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(c) Lessor Inspection . Lessee shall identify to Lessor a candidate replacement engine or auxiliary power unit (as applicable) and Lessor may inspect such candidate replacement engine or auxiliary power unit, which shall include, at Lessor’s option, (i) a full borescope inspection of the compressor, turbine and combustion sections of the replacement engine or auxiliary power unit and (ii) a records inspection, and the results of each such inspection must be satisfactory to Lessor.
(d) Replacement Subject to Lease . Upon acceptance by Lessor, such replacement engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or, as applicable, an “APU”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement Engine or APU shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Engine or APU replaced thereby.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	56	  	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT
AND ITEMS OF EQUIPMENT	

20.5. Event of Loss – Landing Gear . Upon the occurrence of an Event of Loss with respect to a Landing Gear, under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith replace such Landing Gear as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) the Scheduled Termination Date, ( y ) the Termination Date, and ( z ) sixty (60) days from the Event of Loss Date, by duly conveying to Owner, free and clear of all Liens, title to another landing gear of the same or an improved model and suitable for installation and use on the Airframe.
(a) Replacement Landing Gear . The replacement landing gear shall have a value and utility at least equal to, and be in as good operating condition as, the Landing Gear with respect to which such Event of Loss shall have occurred, based on but not limited to (i) the maximum weight certified for such landing gear; (ii) Flight Hours, Cycles and calendar time accumulated since new with respect to each Landing Gear Life Limited Part (as applicable), and (iii) Flight Hours, Cycles and calendar time accumulated since new (and accumulated since Overhaul if an Overhaul had previously been accomplished on the Landing Gear that suffered such Event of Loss), assuming such Landing Gear was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss.
(b) Lessor Inspection . Lessee shall identify to Lessor a candidate replacement landing gear and Lessor may inspect such replacement landing gear, which shall include, at Lessor’s option, a records inspection, and the results of such inspection must be satisfactory to Lessor.
(c) Replacement Subject to Lease . Upon acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing Gear”, as defined herein for all purposes hereunder. Lessee agrees to take such action and execute and deliver such documents, including, but not limited to a warranty bill of sale, a supplement hereto and legal opinions, as Lessor may reasonably request in order that any such replacement landing gear shall be duly and properly titled in the name of Owner and leased hereunder to the same extent as any Landing Gear replaced thereby.
20.6. Repairable Damage .
(a) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, subject to no Event of Default having occurred and continuing, all insurance proceeds which may be paid or payable by the insurers of the Aircraft shall, subject to ( x ) receipt by Lessor of (A) a repair estimate acceptable to Lessor, (B) evidence of completion of such repair by an Approved Maintenance Organisation, provided such evidence and the Approved Maintenance Organisation are acceptable to Lessor and (C) a true and correct copy of the adjuster’s claim report, and ( y ) receipt by Lessee and the insurers of Lessor’s prior written approval for the release of such proceeds (such approval not to be unreasonably withheld), be paid to:
(i) Lessee in respect of all loss or damage Lessee has made good (or caused to be made good), or

	  	57	  	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT
AND ITEMS OF EQUIPMENT	

(ii) the repairer for the cost of the completed repair works, or
(iii) to the vendor of any new or replacement Item of Equipment for the cost of such new or replacement Item of Equipment;
provided that Lessee shall have furnished to Lessor evidence satisfactory to Lessor, that the repairs have been fully completed and that all invoices in relation thereto have been paid and all such repairs have been performed in accordance with the terms of this Lease. Any such insurance proceeds payable following the occurrence and during the continuation of an Event of Default (or not otherwise applied in the manner described above) shall be applied in such manner as Lessor may direct, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
(b) In the event of repairable damage to any Item of Equipment for which insurance proceeds are paid or payable, if such insurance proceeds paid in respect thereof are insufficient to pay the cost or estimated cost of making good or repairing such damage or the cost of purchasing a replacement engine, auxiliary power unit, landing gear or part if the same is beyond economic repair, Lessee will pay the deficiency.
20.7. Documents Loss . Upon the occurrence of a Documents Loss under circumstances in which there has not occurred an Event of Loss with respect to an Item of Equipment to which such Lost Documents relate, Lessee shall within thirty (30) days from the date of such loss notify Lessor in writing and thereafter replace such Lost Documents (such replacement documents hereinafter “ Reconstructed Documents ”) by:
(a) obtaining copies of such Lost Documents from the Approved Maintenance Organisation that accomplished the maintenance covered by the respective Lost Documents, each such copy to be certified by the Quality Assurance Department of the respective Approved Maintenance Organisation as to being a true copy of the respective Lost Document, or
(b) the re-accomplishment of Overhauls and Tasks specified in such Lost Documents as soon as reasonably possible, but in any event, before the earliest to occur of ( x ) sixty (60) days following the Documents Loss, ( y ) the Scheduled Termination Date, and ( z ) the Termination Date. The Reconstructed Documents shall comply with all requirements for Required Approvals with respect to the Item of Equipment to which such Lost Documents relate and shall be sufficient to document the then current maintenance status of the affected Items of Equipment. Lessor shall be entitled to inspect the Reconstructed Documents and the results of each such inspection must be satisfactory to Lessor, acting reasonably. Upon acceptance by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined herein for all purposes hereunder.
20.8. Application of Payments from Governmental Authorities . Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft or the Airframe, shall be retained by Lessor or Owner, if received by Lessor or Owner, or promptly paid over to

	  	58	  	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT
AND ITEMS OF EQUIPMENT	

Lessor, if received by Lessee, up to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due to Lessor or Owner hereunder or under any other Operative Documents or any Related Lease). At such time as Lessor or Owner has received such amounts in full, Lessor shall promptly remit (or cause Owner to promptly remit) the excess, if any, of such payments to Lessee. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to an Event of Loss resulting solely from the condemnation, confiscation or seizure of, or requisition of title to or use of any Engine shall be paid over to, or retained by, Lessee, provided that Lessee shall have fully performed its obligations under this Article 20 with respect to such Engine. Payments received by Lessor, Owner or Lessee from any Governmental Authority with respect to a requisition of use during the Lease Term of the Aircraft, the Airframe or any of the Engines, which requisition does not constitute an Event of Loss, shall, so long as no Default or Event of Default has occurred and is continuing, be paid to, or retained by Lessee, and any remainder shall be returned to Lessee following the complete cure of any such Event of Default.
20.9. No Lessor Liability to Repair or Replace Following Delivery . Lessor will not be liable for any expense in repairing or replacing any Item of Equipment or be liable to supply another aircraft or any item of equipment in lieu of the Aircraft or any Item of Equipment if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use or required to produce or provide Reconstructed Documents.

	  	59	  	ARTICLE 20
LOSS AND DAMAGE TO THE AIRCRAFT
AND ITEMS OF EQUIPMENT	

21.	TAXES; TAX INDEMNITY	
21.1. Indemnity .
(a) Indemnity . Except as provided in Section 21.1(b), Lessee shall pay (without duplication as among Lessor, Trust Company and Owner, to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee)), and shall indemnify and hold harmless each Indemnitee, for and against, all Taxes arising or resulting from or otherwise relating to any Item of Equipment, any Operative Document, or any of the transactions and activities provided for or contemplated in, or permitted by, the Operative Documents, including without limitation, the purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration, possession, use, operation, landing, takeoff, storage, location, presence, maintenance, alteration, modification, improvement, servicing, repair, overhaul, pooling, interchange, exchange, substitution, replacement, loss, return, sale or other disposition of, or any damage, addition or transfer of title to, any Item of Equipment or any interest therein, the execution, delivery, filing, registration, recording, presence, performance of, payment under or enforcement of, or the cure of any default or the exercise of any remedy under, any Operative Document or any other documents executed from time to time pursuant to any Operative Document (regardless of how or when such Taxes are imposed or assessed, whether imposed on or assessed against any Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest therein or any use thereof, or otherwise) and all costs and expenses (including, without limitation, reasonable attorneys fees and disbursements) paid or incurred by any Indemnitee with respect to any Tax for which Lessee is required to indemnify such Indemnitee pursuant to this Article 21 (an “ Indemnified Tax ”) or in connection with the enforcement of this Article 21.
(b) Excluded Taxes . Lessee shall have no obligation under Section 21.1(a) to indemnify an Indemnitee for the following Taxes (each a “ Non-Indemnified Tax ”):
(i) any Tax imposed on or measured by the total net income, receipts, capital, net worth, franchise of, or conduct of business by, such Indemnitee except to the extent that such Tax would not have been payable in the absence of (A) the registration, use, presence or other connection of any Item of Equipment in or with, or any act or omission of Lessee or any Affiliate, agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the inaccuracy or breach of any of the representations, warranties, covenants or agreements of Lessee in the Operative Documents, or (C) an Event of Default, provided that the exclusion in this clause (i) shall not apply to any Tax that is, or is in the nature of, a sales, use, rental, value added, goods and services, consumption, service, transaction privilege, stamp, documentary, transfer, license, excise, withholding or property Tax;
(ii) any Tax imposed on or with respect to any sale or other transfer (x) by such Indemnitee of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2, or (y) by Owner Participant of the Beneficial Interest, provided that the exclusion in this clause (ii) shall not apply to any sale or transfer that occurs (A) in connection with or as a result of a Default, an Event of Default, an Event of Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of any Item of Equipment, or (B) at Lessee’s request, or (C) pursuant to a requirement in any Operative Document or any applicable Law; or

	  	60	  	ARTICLE 21
TAXES; TAX INDEMNITY	

(iii) any Tax to the extent such Tax is caused by, and would not have been incurred but for, any activities of an Indemnitee in the jurisdiction imposing such Tax that are unrelated to any Indemnitee’s dealings with Lessee or any Affiliate of Lessee, unrelated to the transactions contemplated in the Operative Documents, unrelated to any Related Lease, and unrelated to use of the Aircraft (or any aircraft subject to a Related Lease) or any part thereof by Lessee or any Affiliate of Lessee or any agent, representative or contractor of Lessee or any Person using or having possession, custody or control of any such Aircraft (or any such aircraft) or any part thereof;
(iv) (a) any Tax to the extent imposed with respect to any event or period occurring before the date of this Agreement, except that the exclusion in this subclause (iv)(A) shall not apply to any such Tax which arises from any act or omission of Lessee or any Affiliate of Lessee or any director, officer, employee, agent or representative of Lessee or any Affiliate of Lessee;
(A) any Tax to the extent imposed with respect to any act or event or period of time occurring after the Aircraft has been returned by Lessee to Lessor in full compliance with Article 22 and is no longer subject to this Lease, provided that the exclusion in this subclause (iv)(B) shall not apply to any Tax that (1) relates to any act or event occurring or matter arising prior to or concurrently with the return of the Aircraft or (2) arises from or in connection with (x) an Event of Default or (y) any payment by or on account of any obligation of Lessee under the Operative Documents to which it is a party; or
(B) the performance of any other obligation of Lessee under the Operative Documents to which it is a party;
(v) any penalty, fine, addition to tax or interest imposed on such Indemnitee to the extent that such penalty, fine, addition to tax or interest is caused by, and would not have been payable but for:
(A) the failure by such Indemnitee to file any Tax return which such Indemnitee is required by applicable Law to file with respect to any Indemnified Tax before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax return, or
(B) the failure by such Indemnitee to pay any Tax which such Indemnitee is required by applicable Law to pay before the time such penalty, fine, addition to tax or interest (as the case may be) accrued with respect to such Tax payment,
unless (in each case) such failure is a result of:
(U) a failure by Lessee to provide as soon as reasonably practicable (and in any event within 60 days) after receipt of such Indemnitee’s request therefor, any information or documents that are reasonably requested by such Indemnitee and are in the possession or reasonable control of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or

	  	61	  	ARTICLE 21
TAXES; TAX INDEMNITY	

(V) the willful misconduct or gross negligence of Lessee or any Affiliate of Lessee or any Person using or having possession, custody or control of the Aircraft or any part thereof, or
(W) a failure by Lessee to perform any of its obligations under this Lease, or
(X) an Event of Default, or
(Y) any circumstances beyond such Indemnitee’s reasonable control in any jurisdiction (other than the jurisdiction under the Laws of which such Indemnitee is incorporated or otherwise created and any jurisdiction in which an office or other fixed place of business of such Indemnitee is located) in which (1) any Item of Equipment is registered or used and (2) such Tax return is required to be filed or such Tax payment is required to be paid, or
(Z) any combination of the foregoing;
(vi) any Tax to the extent that such Tax would not have been payable but for a breach by such Indemnitee of any obligation of such Indemnitee under Section 21.3 or 21.4 hereof;
(vii) any Tax imposed on an Indemnitee to the extent such Tax is caused directly by, and would not have been incurred but for (A) the gross negligence or willful misconduct of any Indemnitee or (B) the inaccuracy or breach of any representation, warranty, covenant or agreement of such Indemnitee in this Lease or (C) the existence or enforcement of a Lessor’s Lien;
(viii) in the case of a Person that becomes the Lessor or Owner Participant after the Delivery Date by acquiring its interest in the Aircraft and the Lease by sale, assignment or other transfer from a prior Lessor pursuant to Section 25.2, Taxes if and to the extent that the aggregate amount of such Taxes exceeds the aggregate amount of Taxes that would have been imposed on or payable by the transferor Lessor or Owner Participant and for which Lessee would have been required to indemnify the transferor Lessor or Owner Participant pursuant to this Article 21, determined under applicable Laws in effect on the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant (the “Transfer Date”) (or enacted prior to the Transfer Date and effective from and after the first anniversary of the Transfer Date if as of the Transfer Date the effect of such Laws on Lessee can be reasonably determined), provided that the exclusion in this clause (viii) shall not apply to a transferee Lessor or Owner Participant that acquires its interest in the Aircraft pursuant to a transfer that occurs (A) in connection with or as a result of an Event of Default or (B) at Lessee’s request or (C) pursuant to a requirement in any Operative Document or any applicable Law and (for the avoidance of doubt) shall not apply to any Tax to the extent incurred or increased as a result of a change in any Law after the effective date of the transfer by the transferor Lessor or Owner Participant to the transferee Lessor or Owner Participant;
(ix) any Tax imposed on an Indemnitee to the extent that such Tax would not have been imposed but for an amendment to any Operative Document to which Lessee is not a party without the prior written consent of Lessee, unless such amendment occurs in connection with and during the continuance of an Event of Default or is required by applicable Law or is required by any Operative Document.

	  	62	  	ARTICLE 21
TAXES; TAX INDEMNITY	

For the avoidance of doubt and to the extent that Trust Company, Lessor and Owner are, at any given time, one and the same entity (whether in its individual capacity and/or as a trustee), any act or omission of the Trust Company, Lessor or Owner giving rise to an Excluded Tax shall be deemed an act or omission of any and/or all three of such Indemnitees such that the act or omission of any one of such Indemnitees shall be imputed to all three such Indemnitees.
(c) No Reduction for Withholding . Lessee agrees that all amounts payable by Lessee (or by any other Person on account of any obligation of Lessee) pursuant to the Operative Documents shall be paid without any deduction or withholding on account of any Taxes, monetary transfer fees, or other charges or withholdings of any nature, except to the extent that the deduction or withholding of any Tax is required by applicable Law, in which event Lessee shall (i) pay to the Person entitled to receive such payment (the “ Payee ”) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any withholding with respect to such additional amount), an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made and (ii) deliver to Lessor within sixty (60) days after the date of such payment an official receipt of the relevant taxing authority (or, if an official receipt is not obtainable, other documentary evidence satisfactory to Lessor) showing that Lessee paid to such taxing authority the full amount of the Tax required to be deducted or withheld. If Lessee pays any additional amount to Lessor pursuant to clause (i) of the preceding sentence for any withholding Tax that is an Excluded Tax, then Lessor shall repay such additional amount to Lessee within thirty (30) days after receipt of Lessee’s written request therefor accompanied by the official receipt or other evidence of payment described in clause (ii) of the preceding sentence and a written statement describing in reasonable detail the reason that such withholding Tax is an Excluded Tax.
21.2. VAT .
(a) All amounts payable by Lessee pursuant to the Operative Documents are exclusive of VAT. Lessor and Lessee acknowledge and agree that any VAT that is required by any applicable Law to be paid with respect to any of the transactions, activities or payments contemplated in the Operative Documents is a Tax to which the provisions of this Article 21 apply.
(b) If requested by Lessor, Lessee shall deliver to Lessor on the Delivery Date and, thereafter, within thirty (30) days after receipt of Lessor’s written request made not more than annually during the Lease Term, the following documents to enable Lessor to comply with applicable Laws relating to VAT:
(i) a certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or
(ii) an Irish Revenue Form VAT 60B (or applicable successor form) with respect to this Lease.

	  	63	  	ARTICLE 21
TAXES; TAX INDEMNITY	

21.3. Lessor Tax Certificates . Prior to the first payment of Basic Rent hereunder, and thereafter as soon as reasonably practicable after receipt of Lessee’s written request therefor (but not more frequently than once within any 12-month period):
(i) in the case of the Person that is Lessor on the date hereof, Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority confirming that Lessor is a resident of Ireland for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of Lessor as a resident of Ireland for the purposes of taxation; or
(ii) in the case of a Person that acquires its interest in this Lease and the Aircraft by transfer from a prior Lessor, such Lessor will deliver to Lessee a certificate or other document issued by the appropriate tax authority of the country in which the principal place of business of such Lessor is located confirming that such Lessor is a resident of such country for the purposes of taxation or, if such a certificate or other document is not then reasonably obtainable, equivalent official evidence of the status of such Lessor as a resident of such country for the purposes of taxation.
21.4. Withholding Tax Exemption Certificates . Each Indemnitee will deliver to Lessee, as soon as reasonably practicable after receipt of Lessees written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English) such forms, certifications, and other documents as (i) such Indemnitee is entitled under applicable Law to execute or obtain and (ii) are required by applicable Law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Lease without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable Law to withhold in the absence of such document, provided that in the case of any such document that must be executed or endorsed by any Governmental Authority or other taxing authority, the failure of such Indemnitee or Lessee to receive such document from such Governmental Authority or other taxing authority within a reasonable time shall not be deemed to be a failure to comply with this Section 21.4 so long as such Indemnitee is using commercially reasonable efforts to obtain such document, and provided, further, that no Indemnitee shall have any obligation to deliver any document requested by Lessee pursuant to this Section 21.4 if such Indemnitee determines in good faith that delivering such document would result in a risk that any Indemnitee could incur a liability, loss, cost or expense for which Lessee is not required by any Operative Document to indemnify such Indemnitee unless Lessee delivers to such Indemnitee a written undertaking to indemnify such Indemnitee on an After-Tax Basis for any such liability, loss, cost or expense in a manner reasonably satisfactory to such Indemnitee.
21.5. Tax Filings; Information .
(a) Unless otherwise directed or agreed in writing by Lessor, Lessee shall properly prepare and timely file all reports, returns, declarations and other documents (each a “ Tax Document ”) that are required by applicable Law to be filed with any Governmental Authority or other taxing authority with respect to each Indemnified Tax.
(b) Lessee shall (i) deliver to Lessor within thirty (30) days after receipt of Lessor’s written request, a certificate of an officer of Lessee, in form and substance satisfactory to Lessor, demonstrating compliance with Lessee’s covenants in Section 11.6 during the period or periods specified in Lessor’s written request, and (ii) deliver to each Indemnitee as soon as reasonably practicable (and in any event within thirty (30) days) after receipt of such Indemnitee’s written request therefor, such information and copies of such records and other documents (including, without limitation, the flight log for the Aircraft) maintained or required to be maintained by Lessee or by any other user of any Item of Equipment in the regular course of its business as such Indemnitee may request from time to time to enable such Indemnitee to comply with applicable Tax reporting, audit, audit dispute resolution, and litigation requirements, and if requested by any Indemnitee, make such information, records and other documents available for inspection by such Indemnitee or its authorised representatives.

	  	64	  	ARTICLE 21
TAXES; TAX INDEMNITY	

21.6. Payment of Taxes and Indemnities .
(a) To the extent required or permitted by applicable Law, Lessee shall pay each Indemnified Tax when due directly to the proper taxing authority, unless otherwise directed or agreed in writing by Lessor.
(b) Any indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days after the date on which Lessee receives such Indemnitee’s written demand therefor (which demand shall provide a description in reasonable detail of the applicable Indemnified Taxes and the calculation of the amount of the indemnity payment demanded).
(c) All amounts payable by Lessee pursuant to this Article 21 shall be paid on an After-Tax Basis.
21.7. Contest .
(a) If any Indemnitee receives a written claim from any taxing authority for any Indemnified Tax (a “ Tax Claim ”), such Indemnitee shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim.
(b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment of such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a refund thereof), and such Indemnitee shall not settle or compromise such Tax Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such Tax Claim without the prior written consent of Lessee (which consent shall not be unreasonably withheld), provided that such Indemnitee shall have the right to refuse to begin or continue (or to permit Lessee to begin or continue) the contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (y) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements).

	  	65	  	ARTICLE 21
TAXES; TAX INDEMNITY	

(c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest:
(i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing;
(ii) contesting such Tax Claim would not, in the opinion of Lessor, result in any material reputational risk for any Indemnitee, any risk of criminal or civil penalty, or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein;
(iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if the Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, the sum of (A) the amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency);
(iv) if such Indemnitee decides to contest such Tax Claim by paying the Indemnified Tax that is the subject of such Tax Claim and taking action to obtain a refund thereof, Lessee shall have made an interest-free advance to such Indemnitee in an amount equal to the amount of the Indemnified Tax and shall have delivered to such Indemnitee a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse Tax consequences to such Indemnitee or any of its Affiliates resulting from such interest-free advance;
(v) Lessee shall be paying, on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee in connection with the conduct of such contest (including, without limitation, reasonable attorneys’ and accountants’ fees and disbursements);
(vi) If requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and
(vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	66	  	ARTICLE 21
TAXES; TAX INDEMNITY	

sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim.
(d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “ Tax Saving ”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “ Refund ”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of:
 
 	(1)	the lesser of (x) the amount of such Tax Saving or Refund (as the case may be) minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such Refund or Tax Saving, or (y) the amount of the Indemnified Tax or indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus	
 
 	(2)	the amount of interest (if any) received by such Indemnitee on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to the receipt or accrual of such interest, provided that such Indemnitee shall not thereby be in a less favorable position than it would have been in if the Indemnified Tax had not been paid or incurred. A written statement of such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and interest shall be final and conclusive, except for any manifest error.	
(e) Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that are reasonably requested by Lessee and are in the possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax pursuant to this Section 21.7, provided, however, that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration, opinion or other document or information relating solely to one or more Excluded Taxes or (ii) in the case of any return, report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration, opinion or other document or information that relates to Excluded Taxes.
(f) Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Indemnitee pursuant to Section 21.1, without regard to the exclusions in Section 21.1(b) and without regard to the contest provisions of Sections 21.7(a) and 21.7(b).

					
	  	67	  	ARTICLE 21
TAXES; TAX INDEMNITY	

21.8. Survival . The respective obligations of Lessee and Lessor under this Article 21 shall remain in full force and effect, notwithstanding the occurrence of the Termination Date.
21.9. Change in Circumstances; Mitigation . If Lessee incurs an indemnity liability under Section 21.1(a) or 21.1(c) or if it becomes reasonably foreseeable that Lessee would (but for this Section 21.9) incur an indemnity liability under Section 21.1(a) or 21.1(c), then if requested by Lessee in writing, Lessor shall consult with Lessee in good faith with a view to restructuring the transactions contemplated in this Lease so that the indemnity liability can be avoided or minimized, provided that no Indemnitee shall have any obligation to take any action pursuant to this Section 21.9 if such Indemnitee determines in good faith that taking such action may result in a material economic, legal or regulatory disadvantage to such Indemnitee or any material reputational risk for such Indemnitee. Lessee shall pay the costs and expenses incurred by Lessor or any other Indemnitee (as invoiced by Lessor or such other Indemnitee to Lessee and supported by evidence of such cost reasonably acceptable to Lessee), in connection with the consideration, negotiation, documentation, or closing of any restructuring requested by Lessee pursuant to this Section 21.9.

	  	68	  	ARTICLE 21
TAXES; TAX INDEMNITY	

22.	RETURN OF AIRCRAFT	
22.1. Time and Place . On the Scheduled Termination Date (or, if applicable, the Termination Date if such date is different than the Scheduled Termination Date) and unless the Aircraft has suffered an Event of Loss, Lessee, at its own expense, shall return the Aircraft to Lessor at the Redelivery Location. Lessor and Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any exceptions thereto, by executing a Return Acceptance Certificate. Unless a Default or an Event of Default shall have occurred and be continuing or unless this Lease shall have been cancelled by Lessor pursuant to Article 24, upon such execution and delivery, this Lease shall terminate, with neither party hereto having any further liability to the other hereunder except for those Obligations which specifically survive the expiration, cancellation or termination of this Lease or as are otherwise reserved in accordance with such Return Acceptance Certificate. If an Event of Default occurs by Lessee failing to complete Return on the Scheduled Termination Date or if an Event of Default occurs prior to or after the Scheduled Termination Date and Lessor exercises its remedy to thereafter repossess the Aircraft, Lessee is nonetheless obligated to comply, and to have the Aircraft comply, with the return requirements set forth in this Article 22 on the date of actual Return or repossession by Lessor.
22.2. Condition . Upon return of the Aircraft pursuant to Section 22.1, Lessee shall comply with the requirements of Appendix 2E and shall return the Aircraft in a condition in compliance with the provisions of this Lease, including this Article 22 and Appendix 2E.
22.3. Lessee’s Continuing Obligations .
(a) If Lessee shall, for any reason whatsoever, fail to return the Aircraft in a timely manner in the condition specified in this Lease, the Obligations of Lessee shall continue and the Lease Term shall be deemed to be extended, day-to-day, until Return of the Aircraft; provided that this paragraph shall not be construed as permitting Lessee to fail to meet its Obligation to return the Aircraft in accordance with the requirements of this Lease and shall not constitute a waiver by Lessor of any Default or Event of Default arising out of such failure or prejudice the rights of Lessor under Article 24 with respect thereto.
(b) If the Aircraft is not returned to Lessor in accordance with this Lease on the Scheduled Termination Date:
(i) with effect from and including the Scheduled Termination Date, Fixed Rent shall continue to be payable at the daily rate of one-thirtieth (1/30) of the Fixed Rent otherwise payable hereunder; and with effect from and including the fifteenth (15 th ) day following the Scheduled Termination Date, Fixed Rent shall be payable at the daily rate of one-twentieth (1/20) of the Fixed Rent otherwise payable hereunder; and with effect from and including the thirtieth (30 th ) day following the Scheduled Termination Date, Fixed Rent shall thereafter be payable at the daily rate of one-fifteenth (1/15) of the Fixed Rent otherwise payable hereunder; and
(ii) payments in respect of Maintenance Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis, prorated on a daily basis based on a month consisting of thirty (30) days;
each of which amounts shall be paid by Lessee at the earlier to occur of each next Fixed Rent Payment Date and Return. Notwithstanding the foregoing, in the event Lessee is unable to return the Aircraft to Lessor in accordance with this Lease on the Scheduled Termination Date primarily as a result of any act or omission of Lessor or any Person lawfully claiming by or through Lessor, Lessee’s continuing Fixed Rent payment obligations as set forth in sub-section (i) shall not apply.

	  	69	  	ARTICLE 22
RETURN OF AIRCRAFT	

(c) Lessor may elect, in its sole and absolute discretion and without prejudice to its rights under this Lease, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 22 and thereafter have any such non-conformance corrected at such time as Lessor may deem appropriate and at commercial rates then charged by the Person selected by Lessor to accomplish such correction. Any direct, documented, out-of-pocket expenses incurred by Lessor for such correction will become Supplemental Rent payable by Lessee on demand following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such corrections in reasonable detail. Lessee’s Obligation to pay such Supplemental Rent will survive the Termination Date and until such time that the Aircraft is put into the condition required for Return and Lessee’s remaining Obligations due for performance on the Termination Date have been performed in full.
22.4. Legal Status Upon Return . At Return, the Aircraft shall be:
(a) free and clear of all Liens, except Lessor’s Liens; and
(b) duly registered in the name of Lessee, as lessee, and evidencing the ownership interest of Owner to the extent permitted under the Law of the State of Registration of the Aircraft.
At Return, Lessee shall, at its own cost and expense, procure or cooperate with Lessor in procuring the immediate deregistration of the Aircraft from the Register (including, without limitation, execution and delivery by Lessee of such documents as may be required to de-register the Aircraft from the Register and to terminate the Lease or to evidence the expiration, termination or cancellation of the Lease).
22.5. Airport and Navigation Charges . Lessee shall ensure that upon Return any and all airport, navigation and other similar charges in connection with the use and operation of the Aircraft or any other aircraft operated by or in Lessee’s fleet of aircraft which give rise or would if unpaid give rise to any Lien in relation to the Aircraft or any Item of Equipment have been paid and discharged in full and will at Lessor’s written request produce reasonable evidence thereof reasonably satisfactory to Lessor.

	  	70	  	ARTICLE 22
RETURN OF AIRCRAFT	

23.	EVENTS OF DEFAULT	
Any one or more of the following events shall constitute an “ Event of Default ” under this Lease:
(a) Lessee shall fail to make any payment of Rent or in respect of Maintenance Reserves when due hereunder and such failure shall continue for five (5) Business Days; or
(b) Lessee shall fail to procure and maintain the Insurances, or Lessee shall operate the Aircraft at a time when or in a place where such Insurances shall not be in effect or otherwise outside the scope of coverage of the Insurances or Lessee fails to comply with the provisions of Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or
(c) Lessee shall fail to timely comply with the provisions of Article 4 (Security Deposit); or
(d) Lessee shall fail to timely comply with its Obligation to accept delivery of the Aircraft when validly tendered by Lessor hereunder, or Lessee fails in any material respect to satisfy the conditions precedent for Delivery under Article 7 hereof; or
(e) Lessee shall fail to timely comply with its Obligation to complete Return of the Aircraft to Lessor on the Scheduled Termination Date or, if applicable, the Relevant Date as defined in Section 27.1(b) and such failure is not primarily attributable to any act or omission of Lessor or any Person lawfully claiming by or through Lessor; provided that so long as Lessee is diligently endeavoring to return the Aircraft to Lessor in accordance with the provisions of this Lease, the time for compliance shall be extended for a period of up to fifteen (15) days from the Scheduled Termination Date or the Relevant Date, as the case may be; or
(f) Lessee (i) voluntarily suspends substantially all of its airline operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee are revoked, cancelled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline, or (ii) ceases to be a commercial air carrier or ceases to hold its current air operator’s certificate (or equivalent); or
(g) Any representation or warranty made by Lessee herein or in any document or certificate furnished to Lessor in connection herewith or pursuant hereto shall prove to have been incorrect in any material respect when made, and if capable of cure, is not cured within thirty (30) days of receipt of notice of the same; or
(h) The occurrence of a Related Lease Event of Default or an event of default (as defined therein) or material breach of any obligation under any Operative Document, which event of default or material breach is not cured within any applicable cure period set forth therein;
(i) Lessee shall at any time fail to maintain the Items of Equipment in accordance with the provisions of this Lease or to promptly correct any discrepancy which renders the Aircraft or any Item of Equipment unairworthy so that a current and valid certificate of airworthiness and continuing authority to operate the Aircraft in commercial revenue service by the Aeronautics Authority cannot be or is not maintained for the Aircraft; provided, however, that it shall not be deemed to be an Event of Default if all Airbus A319 series aircraft are the subject of a grounding order issued by the Aeronautics Authority or the EASA, unless Lessee fails to comply with any instructions to correct the reason(s) for such grounding

	  	71	  	ARTICLE 23
EVENTS OF DEFAULT	

order promptly following the issuance thereof or fails to make diligent efforts to obtain any necessary parts required for such correction, but giving due regard to the management of such corrections on a fleet-wide basis; or
(j) This Lease, any Related Lease or any assignment for security of any Permitted Sublease shall cease to be a valid and enforceable agreement and in full force and effect for any reason due to any action or inaction of Lessee in breach of its obligations hereunder or Lessee otherwise repudiates the same; or
(k) Lessee shall fail to comply with its obligations pursuant to Sections 12.12(a) (Installation of other Engines), 17.5 (Perfection of Title), 17.6 (Cape Town Convention) or 17.7 (Permitted Liens) and such failure shall continue for a period of five (5) Business Days after notice thereof is given by Lessor to Lessee; or
(l) Lessee shall fail to perform or observe in any material respect any other of the covenants, conditions, or agreements to be performed or observed by it hereunder and such failure shall continue for a period in excess of thirty (30) days after written notice thereof is given by Lessor to Lessee of such failure; or
(m) Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for thirty (30) days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; or
(n) (i) Lessee shall commence any case, proceeding or other action (A) under any existing or future Law relating to bankruptcy, insolvency, examinership, administration, reorganisation or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Lessee any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Lessee any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Lessee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Lessee shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due.
Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its Obligations.

	  	72	  	ARTICLE 23
EVENTS OF DEFAULT	

24.	LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT	
24.1. Lessor’s Rights Following an Event of Default . At any time after the occurrence and continuation of an Event of Default Lessor may treat such event as a repudiation by Lessee of the Lease generally and of its Obligations and may:
(a) in the event of the occurrence and continuation of an Event of Default before Delivery, by notice to Lessee terminate its obligation to lease the Aircraft to Lessee hereunder; and/or
(b) proceed by appropriate court action to enforce performance by Lessee of the applicable covenants and provisions of this Lease or the other Operative Documents or to recover damages for the breach thereof; and/or
(c) by notice to Lessee, (i) require the grounding of the Aircraft and or (ii) cancel this Lease on and as of the date specified in such notice and (without further notice to Lessee) retake possession of the Aircraft, and Lessee agrees that Lessor may by its agents or representatives for this purpose enter upon Lessee’s premises where the Aircraft may be located or cause the same to be redelivered to Lessor, and Lessor shall be entitled to act as attorney for Lessee in causing such redelivery or in directing pilots to fly the Aircraft to said airport for redelivery thereof to Lessor and shall have all the powers and authorisations legally necessary for taking such action (at Lessor’s election); and/or
(d) do anything that may be required to cure the Event of Default (notwithstanding Lessor having no obligation or responsibility to do so and without prejudice to Lessor’s right to treat any such non-compliance by Lessee as an Event of Default under this Lease) and recover from Lessee all costs and expenses incurred in doing so; and/or
(e) with or without taking possession thereof, sell all the Aircraft or any Item of Equipment at public or private sale, with or without advertisement, for cash or upon credit, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Aircraft or any Item of Equipment as Lessor in its sole discretion may determine appropriate, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds thereof, all in such manner and on such terms as Lessor considers appropriate in its absolute discretion, as if this Lease had never been entered into; and/or
(f) require Lessee to pay to Lessor all amounts due and payable by Lessee to Lessor and/or any Indemnitee under the Operative Documents to which it is a party as of the date of termination or cancellation of this Lease; and/or
(g) require Lessee to pay to Lessor on demand and to indemnify Lessor for, from and against all damages, costs, fees, disbursements and expenses incurred or recoverable (pursuant to Article 2A (Uniform Commercial Code – Leases) or other applicable Law) by Lessor or in connection with such Event of Default, including, but not limited to:
(i) all losses, including lost profits (calculated on an After-Tax Basis) suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee or inability to place the Aircraft on lease with another lessee on terms as

	  	73	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES
FOLLOWING AN EVENT OF DEFAULT	

favourable to Lessor as this Lease and the other Operative Documents or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as leasing the Aircraft in accordance with the terms of this Lease and the other Operative Documents would have been, including, in each case, but without duplication, lost Rent payments during any remarketing period or during any period in which the Aircraft is placed in storage and which have not otherwise been paid by Lessee (and, without duplication, taking into account any expenses incurred by Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the Aircraft to meet the requirements of an alternative lessee); and
(ii) interest at the Past Due Rate on (A) any amounts due and payable by Lessee under this Lease, but not paid, and (B) any judgment against Lessee in respect of or related to this Lease or any other Operative Document issued by a court of competent authority until the same are paid in full; and
(iii) without duplication of any of the foregoing, any loss, cost, expense or liability sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Lease, including any costs, fees, disbursements and expenses incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing any Item of Equipment to the condition required by this Lease and (B) preparing any Item of Equipment for sale or lease, advertising the sale or lease of any such Items and selling or re-leasing the same; and
(iv) reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Default or Event of Default or the exercise of Lessor’s remedies with respect thereto; and/or
(h) without duplication of any of the foregoing, require Lessee to indemnify each Indemnitee on demand against any expense which such Indemnitee may sustain or incur as a result or consequence of such Event of Default, including (but not limited to) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or any Item of Equipment or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to any financings by Lessor or Owner in connection with this Lease, any Operative Document, any Item of Equipment or any rights thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums whatsoever paid or payable on account of funds borrowed, including funds borrowed in order to carry any unpaid Rent, any unpaid amount in respect of Maintenance Reserves, or other Obligations); and/or
(i) apply and/or set off against any Obligations and Lessor’s costs, damages, expenses and disbursements incurred in connection with such Event of Default, at Lessor’s discretion, all amounts paid to Lessor in respect of Maintenance Reserves or Security Deposit pursuant to this Lease, as well as any other amounts paid by Lessee under any Operative Document and Related Lease; and/or
(j) require Lessee to redeliver possession of the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require); and/or

	  	74	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES
FOLLOWING AN EVENT OF DEFAULT	

(k) exercise any of the rights, and avail itself of any of the remedies, provided by Article 2A (Uniform Commercial Code—Leases) and, to the extent applicable, Article 9 (Uniform Commercial Code—Secured Transactions) of the New York Uniform Commercial Code, or otherwise available under any other applicable Laws, including but not limited to the applicable rights and remedies provided by the Laws of the United Mexican States.
Without prejudice to Lessor’s other remedies under this Lease or any other Operative Document, Lessee agrees that the occurrence of an Event of Default shall entitle Lessor to automatically and unilaterally cancel or terminate this Lease without requirement of any prior notice or judicial intervention for all legal purposes. All costs and expenses incurred or advanced by Lessor for or on account of any Obligations following the occurrence and continuation of an Event of Default shall bear interest at the Past Due Rate from the date on which such expenditure is incurred by Lessor until the date of reimbursement thereof by Lessee (both before and after any relevant judgment, if any).
24.2. De-Registration . If an Event of Default occurs and is continuing following Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) de-registration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease. Lessee hereby irrevocably and by way of security for its obligations under this Lease appoints (which appointment is coupled with an interest) Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing.
24.3. Present Value of Payments . In calculating Lessor’s damages hereunder, upon the occurrence of an Event of Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of Default had not occurred, together with amounts, if any, scheduled to be paid by a new lessee after any re-lease of the Aircraft, will be calculated on a present value basis using a discount rate of ***** per annum, discounted to the earlier of the date on which Lessor obtains possession of the Aircraft or Lessee makes an effective tender thereof.
24.4. Remedies Cumulative . No remedy referred to in this Article 24 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor; and the exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
24.5. Lessor’s Exercise of Remedies . In effecting any repossession of the Aircraft (including the Aircraft Documents, any Item of Equipment, an Engine, or Part) (“ Repossessed Items ”), Lessor and its representatives and agents, to the extent permitted by Law, shall:
(a) have the right to enter upon any premises where it reasonably believes the Repossessed Items to be located;
(b) not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to any of the Repossessed Items; provided, however, that Lessor shall return to Lessee all personal property of Lessee and other Persons, including its employees or its passengers, which was on the Aircraft at the time Lessor repossessed the Aircraft;
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	75	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES
FOLLOWING AN EVENT OF DEFAULT	

(c) not be liable or responsible, in any manner, for any inadvertent damage to any of Lessee’s property in repossessing and holding any of the Repossessed Items, except to the extent caused directly by Lessor’s gross negligence or willful misconduct; and
(d) have the right to maintain possession of and dispose of the Repossessed Items on any premises owned by Lessee or under Lessee’s control.
24.6. Application of Payments Following Default or Event of Default . Any and all payments received by Lessor under this Lease and under any other Operative Document following the occurrence and during the continuation of a Default or Event of Default, whether in respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to the Obligations of Lessee in any manner or order as Lessor may determine in its sole discretion, notwithstanding any instructions, directions or notice given by Lessee or any other Person with respect to the application of such payments.
24.7. Use of Termination Date . If this Lease is cancelled or the leasing of the Aircraft is otherwise terminated and the Aircraft is repossessed in connection with Lessor’s exercise of remedies following the occurrence and during the continuation of an Event of Default prior to the Scheduled Termination Date, then notwithstanding the use of the term “Termination Date” in this Lease, the period of the Lease Term and the “Scheduled Termination Date” will be utilised in calculating the damages to which Lessor may be entitled to receive from Lessee pursuant to Section 24.1.
24.8. No Right to Maintain Possession . Upon cancellation of this Lease or termination of the leasing of the Aircraft following the occurrence and during the continuance of an Event of Default, Lessee shall have no right to maintain possession of the Aircraft or any Item of Equipment, and any de facto possession thereof exercised by Lessee shall be deemed illegitimate possession for all purposes of applicable Law with respect to the Aircraft and all Items of Equipment, and Lessee agrees to redeliver immediate possession of the Aircraft as directed by Lessor.

	  	76	  	ARTICLE 24
LESSOR’S RIGHTS AND REMEDIES
FOLLOWING AN EVENT OF DEFAULT	

25.	ASSIGNMENT AND TRANSFER	
25.1. No Assignment by Lessee . Except as permitted by Section 15.1, Lessee shall not transfer, assign, novate, mortgage or complete any other such or similar transfer of any interest in this Lease or any of its rights hereunder or in any Item of Equipment, and any such purported assignment shall be void ab initio .
25.2. Transfer of Lessor’s and/or Owner’s Interests . Each of Lessor, Owner, any Owner Participant and any Financing Party may at any time and without Lessee’s consent transfer to any Person (a “ Transferee ”) the Aircraft and/or all or any of its rights and obligations under this Lease and the other Operative Documents to which it is a party; provided that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party or its rights in respect of the Aircraft or any Item of Equipment, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer had not taken place; (ii) at the time of transfer, the Transferee shall have a net worth of no less than *****, or the obligations of Lessor under the Lease shall have been guaranteed by a guarantor having a net worth of no less than *****, or Transferee shall have agreed to hold all Security Deposits, Maintenance Reserves and insurance proceeds in excess of the Agreed Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer to or by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Lessee acknowledges that neither minimal increases in Lessee’s administrative obligations, including expenses, nor an increase in the number of Indemnitees and/or Additional Insureds as a result of such transfer shall not, in and of itself, constitute an increase in Lessee’s obligations hereunder. The foregoing shall apply with the same force and effect to the transfer of any beneficial interest in the Aircraft or any trust or similar entity.
25.3. Cooperation with Transfers . Lessee shall do such things and execute such documents as may be reasonably requested of it to give effect to a transfer contemplated by and made or to be made in accordance with the terms and provisions of Section 25.2, including (a) entering into an assignment and assumption agreement or novation deed with the Transferee in form and substance reasonably satisfactory to Lessee, and (b) providing Lessor reasonably requested scheduling and routing information for the Aircraft or the Item of Equipment being transferred. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses reasonably incurred by Lessee in connection with such transfer. Lessee shall make such amendments to the stated contracts and list of Additional Insureds in respect of the Insurances effected in respect of the Aircraft so as to ensure continued compliance with the requirements of Article 19 with regard to the interests of such Transferee and any new Financing Parties and shall provide to Lessor updated documentation evidencing such amendments.
25.4. Financings . Owner, Lessor and any Owner Participant may at any time and without Lessee’s consent enter into any financing arrangements (which may include the conversion of the lease transaction contemplated by this Lease to a “leveraged lease” structure, a “head-lease, sub-lease” or other
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	77	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

lease structure) with respect to the Aircraft pursuant to which (a) Lessor may assign its rights under this Lease and the other Operative Documents (by way of security) to Owner or to any Financing Parties and (b) Owner may execute a mortgage over the Aircraft in favour of the Financing Parties; provided, that (i) no such financing transaction shall increase Lessee’s liabilities or obligations hereunder or under any other Operative Document or create any additional liabilities or obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Operative Document to which it is a party, based on laws enacted or in effect at the time of such transfer, than it would have had if such transfer had not taken place; (ii) any Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Operative Documents, or in the case of a transfer by a Financing Party, the Transferee shall have agreed that (a) in exercising its rights under the Lease and/or other Operative Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts of Security Deposit, Basic Rent, Supplemental Rent or Agreed Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of the Lease. Such financing arrangements may also take the form of a securitisation (a “ Securitisation ”) involving one or more loans from one or more financial institutions (each a “ Lender ”), and/or with notes, loan certificates, or pass through certificates issued pursuant to an indenture with a trustee (the “ Trustee ”), which notes, loan certificates or pass through certificates may be guaranteed (in whole or in part) by one or more monoline insurers (each, a “ Financial Guarantor ”).
25.5. Cooperation with Financings . Lessee shall cooperate with Lessor and do such things and execute such documents and make such filings and registrations in the State of Registration as may be requested of it by Lessor and/or Owner in order to protect the interests of the Financing Parties and/or Owner in connection with any financing contemplated by and made or to be made in accordance with the terms and provisions of Section 25.4 including, without limitation, (a) executing an acknowledgement of any assignment of Lessor’s rights under this Lease in favour of Owner or any relevant Financing Party, on terms customary in aircraft financing transactions or Securitisations, (b) providing Lessor scheduling and routing information for the Aircraft or any Item of Equipment being financed, (c) making such amendments to this Lease and any of the other Operative Documents and executing such additional documents, as may be reasonably be requested by Lessor in connection with the Securitisation, provided that any such amendment or additional documentation does not adversely affect the rights, or materially increase the obligations, of Lessee under the Lease and Operative Documents, and (d) making such amendments to the Insurances maintained in respect of the Aircraft to ensure continued compliance with the requirements of Article 19 with regard to the interests of Owner and any such Financing Party, and shall provide to Lessor updated documentation evidencing such amendments. Lessor shall reimburse (or cause Lessee to be reimbursed) for any reasonable out-of-pocket expenses incurred by Lessee in connection with such financing transaction.
25.6. Notice of Security Assignment . Lessor hereby provides irrevocable notice to Lessee that:
(a) pursuant to the Security Trust Agreement, Lessor has assigned to the Security Trustee by way of security, all of its right, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds (the “ Security Assignment ”), and Lessee is hereby authorised and required to make all payments to Security Trustee in accordance with the terms of this Lease until the Security Trustee otherwise directs, in writing, and Lessee is hereby authorised and required to comply with any such directions of the Security Trustee;

	  	78	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

(b) by executing and delivering the Lessee Acknowledgment, Lessee shall have confirmed its acknowledgment of an agreement for the benefit of the Security Trustee that the Security Trustee shall not be bound by, nor have any liability to Lessee for the performance of, any of the obligations of Lessor under this Lease save and to the extent otherwise expressly agreed in writing by the Security Trustee with Lessee, and Lessee is hereby irrevocably authorised to assume the obligations expressed to be assumed by Lessee under the Lessee Acknowledgment to the effect that, so far as the same would otherwise be incompatible with the Lease, Lessee’s obligations to Lessor under the Lease shall be modified accordingly; and
(c) by executing and delivering the Lessee Acknowledgment, Lessee shall have acknowledged that each of Owner and Lessor has appointed the Servicer as its servicer and attorney-in-fact in respect of the Lease and the Aircraft as contemplated in Section 27.3 hereof, and all communications received by Lessee from the Servicer in connection with this Lease and the Aircraft may and shall be relied upon (and complied with where the context calls for compliance) by Lessee as if Lessee received the same from Lessor and/or Owner, as the case may be, and Lessee may rely on this notice of such appointment until notified in writing to the contrary by Owner, Lessor or Security Trustee.
25.7. Transfer of Beneficial Interest . The provisions of Sections 25.2 and 25.3 shall be applicable to any sale, assignment, transfer or other conveyance by Owner Participant of all or any portion of its right, title and/or interest in or to the Aircraft, this Lease and/or the Beneficial Interest or by applicable Law as applied thereto.

	  	79	  	ARTICLE 25
ASSIGNMENT AND TRANSFER	

26.	LAW AND JURISDICTION	
26.1. Governing Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
26.2. Consent to Jurisdiction . Each of Lessee and Lessor hereby expressly and irrevocably consents that any legal action or proceeding with respect to this Lease may be brought in any court of the State of New York or any Federal court of the United States of America located in New York, New York, located in the Borough of Manhattan, United States of America, or in any jurisdiction where Lessee or Lessor or any of their respective assets may be found, and by execution and delivery of this Lease, each of Lessee and Lessor hereby irrevocably and expressly submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts, irrevocably and expressly waiving the jurisdiction of any other courts to which it may be entitled by reason of its present or future domicile or otherwise.
26.3. Process Agent and Service of Process . Lessee shall, not later than the execution date of this Lease, irrevocably designate, appoint and empower a duly authorised agent for service of process in the State of New York reasonably acceptable to Lessor in any suit or proceeding with respect to this Lease. A copy of any such process served on such agent shall be promptly forwarded by airmail by the person commencing such proceeding to Lessee at its address set forth in Appendix 2B, but the failure of Lessee to receive such copies shall not affect in any way the service of such process as aforesaid. Lessee further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to Lessee at its address set forth in Appendix 2B. The foregoing, however, shall not limit the rights of Lessor to serve process in any other manner permitted by Law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction.
26.4. Jurisdiction and Forum . Lessee agrees that final judgment against Lessee in any action or proceeding in connection with this Lease shall be conclusive and may be enforced in any other jurisdiction within or outside the United States of America by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of Lessee’s indebtedness. Lessee hereby irrevocably waives, to the fullest extent permitted by Law, any objection which Lessee may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the State of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York has been brought in an inconvenient forum. To the extent that Lessee may, in any jurisdiction in which proceedings may at any time be taken for the determination of any question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom), be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the Law of such jurisdiction.

					
	  	80	  	ARTICLE 26
LAW AND JURISDICTIONS	

26.5. Waiver of Jury Trial . LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
26.6. Waiver of Immunity . Each party to this Lease agrees that in any legal action or proceedings against it or its assets in connection with this Lease and/or any other Operative Document no immunity from such legal action or proceedings (which shall include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) shall be claimed by or on behalf of it or with respect to its assets, irrevocably waives any such right of immunity which it or its assets now have or may hereafter acquire or which may be attributed to it or its assets and consents generally in respect of any such legal action or proceedings to the giving of any relief or the issue of any process in connection with such action or proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order of judgment which may be made or given in such action or proceedings.

	  	81	  	ARTICLE 26
LAW AND JURISDICTIONS	

27.	MISCELLANEOUS	
27.1. Severability and Illegality .
(a) Severability . Any provision of this Lease prohibited by or unlawful or unenforceable under any applicable Law actually applied by any court of competent jurisdiction shall, to the extent required by such Law, be severed from this Lease and rendered ineffective so far as is possible without modifying the remaining provisions of this Lease.
(b) Illegality .
(i) If at any time there is a change in any applicable Law binding upon Lessee or Lessor in its State of Organisation or where it has its principal office or in any jurisdiction in which any action is required to be performed by it for the purposes of any Operative Document which renders, or which will render, it unlawful for such party to perform any of its obligations or to exercise any of its rights under any Operative Document (an “ Illegality Event ”) and the parties are not able to restructure the transaction in accordance with Section 27.1(b)(iii), Lessor or Lessee (as the case may be) shall forthwith notify the other party hereto and Lessor or Lessee (as the case may be) shall be entitled by written notice (the “ Illegality Notice ”) to the other party, either:
(A) to terminate its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease; or
(B) if such event occurs after the Delivery Date, to terminate the Lease Term,
in each such case, on the Relevant Date.
(ii) In Section 27.1(b) “ Relevant Date ” means the later to occur of:
(A) the date of the Illegality Notice; and
(B) a future date specified in the Illegality Notice being prior to the date on which the Illegality Event takes effect.
(iii) Lessor and Lessee shall, for a period of ***** days from the date Lessor or Lessee becomes aware that an Illegality Event will arise or has arisen, or such shorter period ending on the Business Day prior to the date on which such Illegality Event takes place, and provided that no Event of Default has occurred and is continuing, negotiate in good faith and take all commercially reasonable steps (subject to Section 27.1(b)(iv) below) which are available to mitigate the effects of such Illegality Event, with a view to restructuring the transaction in a manner such that the leasing of the Aircraft to Lessee may continue on the same commercial terms as under this Lease, including, without limitation, by way of amendment, novation or replacement to any Operative Document, or termination of, any Operative Document.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	82	  	ARTICLE 27
MISCELLANEOUS	

(iv) Nothing in Section 27.1(b)(iii) above shall, or shall be construed so as to, oblige Lessor to take any mitigating steps (including, without limitation, omitting to act) if, in its reasonable opinion, to do so:
(A) would or would be likely to involve it in any unlawful activity or any activity that is contrary to any Law; or
(B) unless indemnified to its satisfaction, would involve it in any cost, loss, liability or Tax disadvantage; or
(C) would be prejudicial to it, the Aircraft or the other Indemnitees.
(v) The cost of any mitigation pursuant to this Section 27.1(b) shall be for the account of Lessee.
(vi) If Lessor or Lessee shall have terminated the Lease Term or its obligation to lease, or take on lease, the Aircraft pursuant to the terms of this Lease in accordance with Section 27.1(b)(i), then on the Relevant Date, Lessee shall:
(A) return the Aircraft to Lessor in accordance with the provisions of Article 22 if the Aircraft has been delivered to Lessee under this Lease, unless a Lessor Illegality Event has occurred in which case the Aircraft shall be returned to Lessor in its then as-is condition, but in any event, having been operated and maintained throughout the Lease Term in accordance with the provisions of this Lease; and
(B) pay to Lessor the amounts provided in Section 24.1, clauses (f), (g) and (h), and Section 24.3 as if references therein to an “Event of Default” were to the termination of the Lease Term pursuant to Section 27.1(b)(i).
27.2. Amendments . No term or provision of this Lease may be amended, modified, waived, discharged or terminated orally, but only by a written instrument signed by Lessor and Lessee.
27.3. Lessor’s Right to Perform; Lessor’s Right to Delegate a Servicer .
(a) If Lessee fails to perform or comply with any Obligations, Lessor shall have the right, but not the obligation, to discharge such obligation, and the amount of such payment made and the expenses of Lessor incurred in connection with such discharge shall be payable by Lessee upon demand, together with interest at the Past Due Rate from the date such expenses were incurred.
(b) (2) Lessor may delegate to any Person or Persons (including, without limitation, the Servicer) all or any of the rights, powers or discretions vested in it by this Lease or any of the other Operative Documents, and any such delegation may be made upon such terms and conditions and subject to such regulations (including the power to sub-delegate) as Lessor in its absolute discretion deems fit;
(i) Pursuant to a servicing agreement between Servicer, Owner and Lessor, Servicer has been appointed by Lessor and Owner as servicer for all matters related to

	  	83	  	ARTICLE 27
MISCELLANEOUS	

this Lease and the Aircraft, and accordingly, except with respect to payments of Rent, Supplemental Rent, Maintenance Reserves and other amounts payable hereunder which shall be paid as provided herein, Lessee shall communicate with and deal with Servicer with respect to all matters relating to this Lease and the Aircraft as if the Servicer were the Owner and Lessor under this Lease, until notified in writing to the contrary by Owner, Lessor or Security Trustee;
(ii) Pursuant to a management agreement among Manager, Owner Participant, Security Trustee and other parties thereto, Manager has been appointed to provide certain administrative services for Owner Participant, Owner and Lessor in connection with this Lease and the Aircraft.
27.4. Counterparts . This Lease may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease or the Lease Supplement hereunder constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease or such Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
27.5. Delivery of Documents by Electronic Means . Delivery of an executed counterpart of this Lease or of any other documents in connection with this Lease by fax or other electronic image file will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax or other electronic image file will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Lease or such other document will not affect the validity or effectiveness of this Lease or such other document.
27.6. Survival . The representations, warranties, covenants, agreements and indemnities (including, without limitation, the indemnities contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the Termination Date to the extent required for full performance and satisfaction thereof.
27.7. Entire Lease . This Lease (including all Appendices) and the other Operative Documents executed pursuant hereto constitute the entire agreement between Lessor and Lessee regarding the Aircraft and any prior or contemporaneous written or oral understandings with regard to the subject matter hereof are superseded hereby in their entirety.
27.8. Successors and Assigns . Subject to the provisions of Article 25, the terms and provisions of this Lease and each other Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns.
27.9. Brokers . Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorney’s fees and disbursements) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the lease of the Aircraft, if such claim, damage, cost or expense arises out of any action or alleged action by the indemnifying party, its employees or agents. It is understood and agreed between the parties that this Lease has been concluded by direct negotiation

	  	84	  	ARTICLE 27
MISCELLANEOUS	

without any intermediaries or agents. Lessee hereby represents and warrants that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Lease, to any employee of Lessor or to any Person.
27.10. Transaction Costs . Whether or not the transactions contemplated hereby are consummated, each party hereto agrees to pay its own costs and expenses incurred in connection with the preparation, execution and delivery of this Lease and any other documents delivered in connection herewith, including without limitation the fees, expenses and disbursements of counsel, except as otherwise expressly set forth herein. In addition, Lessee shall be solely responsible for (i) all costs, including attorneys’ fees and disbursements, incurred in registering the Aircraft and an executed counterpart of this Lease and the Lease Supplement in the State of Registration and any other jurisdiction wherein registration of the same is necessary as a result of the operation of the Aircraft by Lessee or any Permitted Sublessee, and (ii) all costs, including attorneys’ fees and disbursements, incurred in connection with the de-registration of the Aircraft from the Register or any other applicable Aeronautics Authority upon the cancellation or termination of this Lease in accordance with the provisions hereof. Each of Lessor and Lessee agrees to pay the reasonable costs and expenses (including attorneys’ fees and disbursements) of the other party incurred in connection with the entering into or giving or withholding of any future waiver, supplement or amendment or other action with respect to the Lease or any other document delivered in connection therewith that it may request, except in the case of an Event of Default in which case all of such costs shall be at the expense of Lessee.
27.11. Time is of the Essence . Time and strict and punctual performance are of the essence with respect to each provision of this Lease.
27.12. Language .
(a) This Lease is in the English language and all notices, opinions, financial statements and other documents given under this Lease shall be provided in the English language or, if not submitted in the English language, shall be accompanied by one certified copy of an English translation thereof for each copy of the foregoing so submitted.
(b) If this Lease or any other Operative Document is required to be translated into another language for the purposes of any filing or registration, (i) Lessee shall procure and pay for any such translation, and (ii) the English version shall prevail in the event of any conflict with any such non-English version.
27.13. No Rights of Third Parties . No third parties, other than Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed to have a right to ( x ) benefit from, or ( y ) seek to enforce, any of the provisions of this Lease.
27.14. Delegation . Lessor may delegate to any appropriately licensed and/or experienced person(s) all or any of the rights, powers or discretions vested in it by this Lease or any other Operative Document and any such delegation may be made upon such terms and conditions as between such person and Lessor as Lessor in its absolute discretion may determine.
27.15. Further Assurances . Lessee shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by Law or reasonably requested in writing by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purposes of this Lease and the other Operative Documents.

	  	85	  	ARTICLE 27
MISCELLANEOUS	

27.16. Rights at Law . Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of Lessor hereunder or under any other Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of Lessor under the Operative Documents (i) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (ii) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and (iii) shall be cumulative and not mutually exclusive and the exercise of one shall not be deemed a waiver of the right to exercise any other.
27.17. Confidentiality .
(a) During the Lease Term all Information shall remain confidential and the parties hereto and their respective Affiliates will use their respective reasonable efforts not to disclose the Information to any other Person without prior written consent of each other party, which consent shall not be unreasonably withheld; provided, that Lessor and Lessee may, without the consent of each other party, disclose the Information in any of the following situations:
(i) To directors, officers, employees, permitted assigns and agents of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(ii) To auditors, accountants or legal advisors of Lessor, Owner Participant, Servicer, Manager, Lessee or any Affiliate (direct or indirect) of any of such parties; or
(iii) To actual or potential lenders/Financing Parties, purchasers or other permitted assigns of Lessor, Owner Participant, Lessee or any Affiliate of any of such parties, including but not limited to providing financial information about Lessee to potential lenders/Financing Parties to, and purchasers from, Lessor, provided that, upon the request of Lessee, such potential lenders/Financing Parties will agree to keep such Information confidential in a manner similar to the provisions hereunder and that their access to Information is solely for purposes of evaluating an investment in a Securitisation or other financing of the Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a form reasonably acceptable to Lessee; or
(iv) To rating agencies with respect to ratings of Lessor, Owner, Owner Participant, or a related Securitisation; or
(v) To such other parties as Lessor, Owner Participant, Servicer, Manager or Lessee may reasonably believe to be required by Law (including, without limitation any regulation or order of a bank regulatory agency), by subpoena or by any other legal process.
(b) Notwithstanding any of the foregoing, Information will not be considered confidential, and Lessor, Owner Participant, Servicer, Manager and Lessee and their respective Affiliates may disclose any item of the Information without restriction in any of the following circumstances, if such item:
(i) is publicly available (either to the general public or to any relevant trade or industry) prior to any party’s receipt of it from another party hereto;

	  	86	  	ARTICLE 27
MISCELLANEOUS	

(ii) is thereafter made publicly available (either to the general public or to any relevant trade or industry) by another party hereto or by a third party which is entitled to make such item publicly available;
(iii) becomes available to any party hereto on a non-confidential basis from a source which has represented to such party that such source is entitled to disclose it; or
(iv) was known to any party hereto on a non-confidential basis prior to its disclosure to such party by another party hereto.
27.18. Notices . All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally, when telecopied, or if deposited in the mail, when received, to the addressees appearing in Appendix 2B or to such other address as any party may designate for itself by written notice to the other party or parties.

	  	87	  	ARTICLE 27
MISCELLANEOUS	

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 17 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	  		  	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED	
Lessee	  		  	Lessor	
			
By: /s/ Alfonso Ascencio Triujeque                                             	  		  	By: /s/ Alan Geraghty                                                         	
Name: Alfonso Ascencio Triujeque	  		  	Name: Alan Geraghty	
Title: General Counsel	  		  	Title: Director	
			
By: /s/ Mario E. Geyne Pliego                                                    	  		  		
Name: Mario E. Geyne Pliego	  		  		
Title: Financial and Fleet Planning Director	  		  		
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	  		  	SIGNATURE PAGE	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF , Lessor and Lessee have each caused this Aircraft Lease Agreement to be duly executed by their authorised representatives as of 17 November 2010.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	  		  	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED	
Lessee	  		  	Lessor	
			
By: /s/ Alfonso Ascencio Triujeque                                           	  		  	By: /s/ Alan Geraghty                                                             	
Name: Alfonso Ascencio Triujeque	  		  	Name: Alan Geraghty	
Title: General Counsel	  		  	Title: Director	
			
By: /s/ Mario E. Geyne Pliego                                                    	  		  		
Name: Mario E. Geyne Pliego	  		  		
Title: Financial and Fleet Planning Director	  		  		
TO THE EXTENT, IF ANY, THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

SECURITY TRUSTEE RECEIPT	
	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Security Trustee	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	
 
SIGNATURE PAGE

Appendix 1
to Aircraft Lease Agreement
DEFINITIONS
“ Acceptance Certificate ” means the acceptance certificate executed and delivered by Lessee to Lessor at Delivery in the form of Appendix 3.
“ Additional Insureds ” means the Indemnitees and each of them.
“ Aeronautics Authority ” means the DGAC or such other governmental department, bureau, commission or agency that under the Law of the State of Registration shall from time to time have control or supervision of civil aviation in that state or have jurisdiction over the registration, airworthiness, operation, or other matters relating to, the Aircraft.
“ Affiliate ” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified.
“ After-Tax Basis ” means, with respect to any indemnity or other amount (an “ Amount ”) which is required by any Operative Document to be paid on an “After-Tax Basis” by Lessee (or by any other Person on account of any Obligation of Lessee under the Operative Documents) to any Indemnitee (or to any other Person for the account or benefit of any Indemnitee), payment of such Amount supplemented to the extent necessary by a further payment or payments that will cause the sum of all such payments, reduced by the aggregate amount of all Taxes payable by any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments by any Indemnitee, net of any actual current reduction in any Indemnitee’s liability for Taxes caused by the allowance of any deduction, Tax credit or other Tax benefit for the Tax, Claim, cost or expense that gave rise to Lessee’s liability to pay such Amount, to be equal to the Amount that is required to be paid on an “After-Tax Basis”, provided, that for the purpose of calculating the amount of Taxes imposed on any Indemnitee with respect to the accrual, actual receipt or constructive receipt of such payments, it shall be assumed that such Indemnitee is subject to each Tax that is imposed on or payable by such Indemnitee with respect to the accrual, actual receipt or constructive receipt of each such payment at the highest marginal statutory Tax rate applicable to such Indemnitee for the Tax accounting period in which such Indemnitee accrues or receives (actually or constructively) such payment.
“ Agreed Value ” means, with respect to the Aircraft, the amount set forth in Appendix 2B.
“ Aircraft ” means, as the context may require or permit, the Airframe together with (i) the Engines, whether or not installed on the Airframe, (ii) all Parts or components thereof, (iii) any spare parts or ancillary equipment or devices furnished with the Airframe or the Engines under this Lease, (iv) all items of equipment and other property, tangible and intangible, described in the Acceptance Certificate delivered on the Delivery Date and not otherwise described in the preceding portions of this definition, (v) all Aircraft Documents, (vi) all substitutions, replacements and renewals of any and all thereof, and (vii) all alterations, modifications and additions which may be made to, installed on or incorporated into the Aircraft, including but not limited to, those required pursuant to any Airworthiness Directive.
“ Aircraft Documents ” means, whether in paper, photographic, digital, electronic or other medium, (i) the manuals and records identified in the attachments to the Acceptance Certificate hereto and all other records and documentation pertaining to the Aircraft and delivered with the Aircraft on the Delivery Date

	  	App 1 - 1	  	APPENDIX 1
DEFINITIONS	

and (ii) all other Required Approvals, records and documentation generated during the Lease Term that are related to the maintenance, inspections and alterations, modifications and additions accomplished during the Lease Term with respect to the Aircraft and required to be maintained by Lessee either by the Aeronautics Authority or in order to comply with the provisions of this Lease.
“ Airframe ” means the Airbus A319-132 aircraft (except for the Engines) as more specifically described in the Lease Supplement, together with the APU, all Landing Gear and any and all Parts.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued by the Certificating Authority, in addition to any airworthiness directive issued by the Aeronautics Authority, each to the extent the same is applicable to the Aircraft and/or any Item of Equipment.
“ Alert Service Bulletin ” means any service bulletin issued by a Manufacturer that is designated as such by such Manufacturer.
“ Approved Maintenance Organisation ” means the Manufacturer or a maintenance facility approved by the Aeronautics Authority and also by the FAA pursuant to FAR Part 145 and/or the EASA pursuant to EASA Part-145 for the performance of maintenance, testing, inspection, repair, overhaul or modification on the Aircraft or any Item of Equipment.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date, or any replacement thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to such auxiliary power unit and any and all Parts removed therefrom.
“ APU Cycle ” means one complete continuous operation of the APU beginning at the moment the APU is started and continuing until it subsequently shuts down.
“ APU Hour ” means each hour or part thereof, rounded to the nearest minute, elapsing from the moment the APU is started to the moment when the APU is shut down.
“ APU Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “APU Overhaul Reserve”.
“ Basic Rent ” means the rent payable for the Aircraft under this Lease in the amount determined in Appendix 2B, and which shall include both PBH Rent and Fixed Rent.
“ Beneficial Interest ” means the entire beneficial interest in the trust established by the Trust Agreement.
“ Business Day ” means (a) in respect to the determination of LIBOR, a day on which U.S. Dollar deposits may be dealt in the London inter-bank market; (b) in the case of payments under this Lease or any Operative Document, any day (other than Saturday or Sunday) on which banks are open for business in New York, United States of America; and (c) in all other cases, any day (other than Saturday or Sunday) on which banks are open for business in Ireland, the State of Registration and if different from the State of Registration, Lessee’s State of Organisation.
“ C-Check ” means with respect to the Aircraft, (i) the accomplishment of Tasks that, at the time of such check, would require accomplishment prior to the next due c-check based upon the interval for each such Task in the MPD, and where such Tasks are controlled by Flight Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the rectification of each defect discovered during the accomplishment of such Tasks.

	  	App 1 - 2	  	APPENDIX 1
DEFINITIONS	

“ Calendar Month ” means the period commencing on and including the Delivery Date and ending on and including the last day of the calendar month in which the Delivery Date occurs and each of the consecutive calendar monthly periods thereafter throughout the Lease Term, provided that the final Calendar Month of the Lease Term may consist of less than a calendar month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a calendar month.
“ Cape Town Convention ” means, together, the official English language text of each of the Convention on International Interests in Mobile Equipment (the “ Convention ”) and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Protocol ”) each as opened for signature on 16 November 2001 at Cape Town, South Africa.
“ Cash Security Deposit ” means the portion of the Security Deposit paid in cash in the amounts in Appendix 2B.
“ Certificating Authority ” means the EASA.
“ Certificating Authority Form ” means an EASA Form One or an FAA Form 8130-3, any dual release form approved by both the EASA and the FAA, or any successor to either such forms.
“ Claims ” means any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any reasonable attorney’s fees and other reasonable and documented out-of-pocket costs and expenses in connection therewith or in establishing the right to indemnification hereunder, including any of the foregoing arising or imposed with or without the fault or negligence of any Indemnitee (whether passive or active) or under the doctrine of strict or absolute liability.
“ Credit Security Deposit ” means the portion of the Security Deposit paid by Lessee in the form of a Security Letter of Credit in the amount specified in Appendix 2B.
“ Cycle ” means one take-off and landing of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed).
“ Default ” means any event, condition or circumstance which, with the lapse of time and/or the giving of notice which would constitute an Event of Default.
“ Delivery ” means the delivery of the Aircraft by Lessor to Lessee in accordance with this Lease and which shall be evidenced by execution and delivery of the Lease Supplement and the Acceptance Certificate.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Location ” means the facilities of Atitech S.p.A in Naples, Italy, or such other airport in Europe or such other location as may be agreed to in writing by Lessor and Lessee.
“ DGAC ” means the Mexican General Department of Civil Aeronautics ( Direction General de Aeronautica Civil ) and any successor agency thereto established to regulate civil aircraft registered in the United Mexican States.
“ Documents Loss ” means the loss or destruction of the Aircraft Documents or any of them.

	  	App 1 - 3	  	APPENDIX 1
DEFINITIONS	

“ Dollars ” or “ $ ” means the lawful currency of the U.S.
“ EASA ” means the European Aviation Safety Agency, an agency of the European Union having responsibility for aviation safety, regulation and oversight of member states of the European Union, or any Person, governmental department, bureau, commission or agency succeeding to the functions of the European Aviation Safety Agency.
“ EASA Requirements ” means, as applicable to the Aircraft, (i) any of the regulations, rules, or decisions of, or governing the EASA, and (ii) EU-OPS 1.
“Engine(s) ” means each of the engines identified in the Lease Supplement, or any replacement of any thereof made pursuant to this Lease, together, in any case, with any and all Parts which are from time to time incorporated in or attached to any such Engine and any and all Parts removed therefrom.
“ Engine Agreed Value ” means, with respect to each Engine when not installed on the Airframe, the amount set forth in Appendix 2B.
“ Engine Life Limited Parts Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Life Limited Parts Reserve”.
“ Engine Loss ” means the occurrence of (a) an Event of Loss with respect to an Engine only (whether or not installed on the Airframe) or (b) any divestiture or impairment of any right, title or interest of Lessor in or to an Engine as a result of the installation of such Engine on any other airframe.
“ Engine Restoration ” means any engine shop visit having a workscope that at a minimum, includes a complete refurbishment or full overhaul of the high pressure turbine and combustion section of the relevant Engine, accomplished in accordance with the Engine Manufacturer’s Engine Maintenance Management Program applicable to the Engine.
“ Engine Restoration Reserve ” has the meaning set forth in Appendix 2C, Section “Engine Restoration Reserve”.
“ EU-OPS 1 ” means the technical requirements and administrative procedures implemented pursuant to Council Regulation (EEC) No. 3922/91, as amended by Regulation (EC) No. 1899/2006 of the European Parliament and Council of the EU, and as the same is further amended from time to time.
“ European Union ” or “ EU ” means the union of countries established pursuant to the Treaty of Maastricht, which came into effect on November 1, 1993, as amended by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the Treaty of Nice signed on February 26, 2001, and as may be amended from time to time.
“ Event of Default ” means those events and circumstances listed in Article 23.
“ Event of Loss ” means, with respect to any Item of Equipment (excluding Parts), any of the following events:
(a) the agreed, actual, arranged, compromised or constructive total loss of such Item (including any damage to the same which results in an insurance settlement on the basis of a total loss, or requisition for use or hire of the same which results in an insurance settlement on the basis of a total loss); or

	  	App 1 - 4	  	APPENDIX 1
DEFINITIONS	

(b) the destruction or damage that permanently renders such Item to be unfit for normal use for any reason whatsoever; or
(c) the requisition of title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, condemnation or confiscation for any reason of such Item by a Governmental Authority or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title of such Item; or
(d) the hijacking, theft, or disappearance of such Item (i) for a period of sixty (60) days or more or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(e) the condemnation, confiscation, capture, deprivation, seizure or requisition for use or hire of the Airframe or the deprivation of the possession or use of the Airframe as a result of any Law or other action by the Aeronautics Authority or any Governmental Authority (other than where the same amounts to the circumstances provided in clause (c)) which deprives any Person entitled to have possession and/or use of the Item of its possession and/or use (i) for more than a period of sixty (60) consecutive days or (ii) if earlier, beyond the earlier of the Scheduled Termination Date and the Termination Date; or
(f) any other case which by subsequent written agreement Lessor and Lessee may deem, with the agreement of the insurers, to be an Event of Loss.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“ Event of Loss Date ” means (a) with respect to any Event of Loss set forth in paragraph (a) of the definition thereof, the earliest of (i) the date of actual loss, (ii) the date on which the loss is agreed, arranged or compromised by the insurers and (iii) sixty (60) days after the date of notice to Lessee’s brokers or insurers claiming the loss, (b) with respect to any Event of Loss set forth in paragraph (b) or (c) of the definition thereof, the date such event, condition or circumstance occurs or, if such date is not known, the date on which the relevant property was last known to exist, (c) with respect to any Event of Loss set forth in paragraph (d) or (e) of the definition thereof, the earlier of (i) the date on which insurers make payment on the basis of an Event of Loss and (ii) the date falling thirty (30) days after the expiration of the period, or the continuation of the condition or circumstance beyond the date, described therein or (d) with respect to any Event of Loss set forth in paragraph (f) of the definition thereof, the date of the subsequent agreement reached by Lessor and Lessee, with the agreement of the insurers.
“ Event of Loss Proceeds ” means the proceeds of any Insurances or any compensation or similar payment arising, in respect of an Event of Loss.
“ Excluded Taxes ” has the meaning provided in Section 21.1(b) hereof.
“ Excusable Delay ” means any delay in Delivery not occasioned by the fault or negligence of Lessor and/or due to or arising from Lessor’s reasonable control including, without limitation, (i) acts of God or the public enemy, natural disasters, civil war, insurrection or riots, quarantine restrictions, strikes, lockouts, or labour stoppages (other than strikes, lockouts or labour stoppages of Lessor and/or its Affiliates), (ii) fires, floods, explosions, earthquakes, epidemics or serious accidents, (iii) delays relating to or arising out of maintenance work accomplished or to be accomplished on any Item of Equipment prior to Delivery hereunder, and/or (iv) delays relating to any failure of the Prior Operator to return the Aircraft at the time and location and in the condition required by the Prior Lease.

	  	App 1 - 5	  	APPENDIX 1
DEFINITIONS	

“ FAA ” means the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any Person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“ FAR ” means the federal aviation regulations as set forth in Title 14 of the United States Code of Federal Regulations, Chapter 1 (Parts 1 - 199).
“ Final Check ” shall have the meaning ascribed to such term in Section 3.1 of Appendix 2E.
“ Financing Party ” means the Security Trustee, the Liquidity Provider, Servicer, Manager, and any other Person or Persons, from time to time notified by Lessor to Lessee, from whom financing for the acquisition or continued ownership of the Aircraft by Lessor (or Owner if Lessor is not the Owner) has been, is to be, or is for the time being, obtained and/or in whose favour or for whose benefit security over the Aircraft is to be, or is for the time being, granted by Lessor or Owner (as the case may be), any security trustee, owner trust or trustee, manager, servicer, lender and/or financial guarantor.
“ Fixed Rent ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Commencement Date ” has the meaning set forth in Appendix 2B.
“ Fixed Rent Payment Date ” means the first day of each Fixed Rent Period of the Lease Term and which is the date on which payment of Fixed Rent is due and payable.
“ Fixed Rent Period ” means the period commencing on and including the Fixed Rent Commencement Date and ending on and including the last day of the Calendar Month in which the Fixed Rent Commencement Date occurs and each of the consecutive Calendar Month periods thereafter throughout the Lease Term, provided that the final Fixed Rent Period of the Lease Term may consist of less than a full Calendar Month if this Lease expires, terminates or is cancelled effective as of or on a date other than the last day of a full Calendar Month.
“ Flight Hour ” means each hour or fraction thereof, measured to two decimal places, elapsing from the moment the wheels of the Airframe (or in respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine, Landing Gear, or Part is (or was) then currently installed) leave the ground on takeoff to the moment when the wheels of the Airframe (or such aircraft on which an Engine, Landing Gear, or Part is (or was) then currently installed) touch the ground on landing.
“ GAAP ” means (i) generally accepted accounting principles in effect in Mexico or (ii) International Financial Reporting Standards and International Accounting Standards (and interpretations thereof) as in effect at the relevant time, and applied on a basis consistent with prior periods except as may be disclosed in the pertinent Person’s financial statements.
“ Governmental Authority ” means and includes (whether having a distinct legal personality or not) (a) any national government, political subdivision thereof, or local jurisdiction therein, (b) any board, commission, department, division, organ, instrumentality, court or agency of any entity referred to in (a) above, however constituted, and (c) any association, organisation or institution (international or otherwise) of which any entity mentioned in (a) or (b) above is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

	  	App 1 - 6	  	APPENDIX 1
DEFINITIONS	

“ Guarantee ” means that certain guarantee provided to Lessor by the Guarantor pursuant to which Guarantor has fully and irrevocably guaranteed all of Lessee’s Obligations.
“ Guarantor ” means Controladora Vuela Companies de Aviación, S.A.P.I. de C.V., a sociedad anónima promotora de inversion de capital variable organized and existing under the laws of the United Mexican States.
“ LA.T.A. ” means the International Air Transport Association.
“ Indemnified Tax(es) ” means any Tax for which Lessee has an obligation of indemnity pursuant to Article 21 of the Lease.
“ Indemnitee ” means Lessor, Owner, Trust Company, Owner Participant, Security Trustee and the institution acting as such in its individual capacity, Liquidity Provider, Servicer, Manager, any Financing Party, and their respective Affiliates, officers, directors, shareholders, members, managers, duly authorised agents, employees and attorneys-in-fact and their respective successors and permitted assigns.
“ Information ” means the terms and conditions of this Lease and any other Operative Document and any other information delivered to any party to this Lease in connection with this Lease or any Operative Document.
“ Insurances ” means any and all contracts or policies of insurance (or reinsurance) required to be maintained from time to time under this Lease.
“ International Registry ” or “ IR ” means the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.
“ Item of Equipment ” or “ Item ” means individually or collectively, as the context requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear, the APU and any of the Parts, whether or not installed in or attached to the Aircraft or the Airframe.
“ Landing Gear ” means the complete strut assembly of each landing gear installed on the Airframe on the Delivery Date (or any replacement for any such landing gear made pursuant to the terms of this Lease) and shall consist of the inner and outer cylinders of the main landing gear and the nose landing gear, including the truck assembly and axles of such landing gear.
“ Landing Gear Overhaul Reserve ” has the meaning set forth in Appendix 2C, Section “Landing Gear Overhaul Reserve”.
“ Law ” means and includes (a) any statute, decree, constitution, regulation, rule, order, judgment, AD or other directive of any Governmental Authority; (b) any treaty, pact, compact or other agreement to which any Governmental Authority is a party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any of the foregoing.
“ Lease ” means this Aircraft Lease Agreement, including all appendices, exhibits and schedules hereto, as the same may be amended from time to time.
“ Lease Supplement ” means the lease supplement dated the Delivery Date in the form of Appendix 4.

	  	App 1 - 7	  	APPENDIX 1
DEFINITIONS	

“ Lease Term ” means the period appearing in Appendix 2A which otherwise commences on the Delivery Date and ends on the Termination Date.
“ Lease Term Extension ” has the meaning set forth in Appendix 2A.
“ Lessee Acknowledgment ” means Lessee’s acknowledgment of security assignment substantially in the form set out in Appendix 8.
“ Lessee’s Actual Cost ” means Lessee’s cost incurred in performing an Obligation under this Lease, determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then Lessee’s Actual Cost shall be the actual charges, including, without limitation, shipping, freight mark-ups and handling charges of such third party charged to and paid by Lessee (but excluding shipping and freight charges and mark-ups, handling charges or overhead added by Lessee), and (ii) if Lessee elects that such obligation be performed by Lessee, then Lessee’s Actual Cost shall be ***** per labor hour (which hourly labor rate shall be increased by ***** at each calendar anniversary of the Delivery Date during the Lease Term) plus Lessee’s direct cost for materials and services provided by third parties without Lessee-imposed mark-ups, handling charges or overhead added to such third-party charges by Lessee.
“ Lessor Brake Contribution Amount ” has the meaning set forth in Appendix 2B.
“ Lessor Illegality Event ” means any event which makes it illegal under applicable Law for Lessor to proceed with the transaction evidenced hereby because of illegality in Lessor’s State of Organisation, or such illegality arises as a result of any act or omission of Lessor, other than:
(a) where caused due to any bi-lateral or United Nations sanctions applicable in Lessor’s State of Organisation; or
(b) in circumstances where an Illegality Event has also occurred in Lessee’s State of Organisation.
“ Lessor’s Lien ” means any Lien on the Aircraft or any Item of Equipment (i) granted to any Financing Party with respect to the Aircraft or any Item of Equipment except where the same are granted in connection with and following the occurrence and during the continuation of an Event of Default, (ii) arising as a result of any act of Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner or Owner Participant that is in violation of any of the obligations of such Person under the Lease and the other Operative Documents, (iii) any Claim against Lessor, Owner, Owner Participant or any Affiliate of Lessor, Owner, Owner Participant or any Person lawfully claiming by or through any of them that is unrelated to the transactions contemplated by the Lease, (iv) any Liens arising in connection with a Claim for which Lessee is not required to indemnify an Indemnitee hereunder; or (v) Taxes (including claims therefor) imposed on Lessor or any Affiliate of Lessor for which Lessee is not obligated to indemnify Lessor or such Affiliate pursuant to any of the Operative Documents.
“ LIBOR ” means, for any period, the three-month rate of interest per annum at which deposits in Dollars are offered to major banks in the London interbank market at approximately 11:00 a.m. (London time) three (3) Business Days before the first day of such period, as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as may replace such page on such system for the purpose of reporting London Interbank Offered Rates of major banks) under the heading for British Bankers Association Interest Settlement Rates in the column designated “USD” (U.S. Dollar).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 1 - 8	  	APPENDIX 1
DEFINITIONS	

“ Lien ” means any mortgage, charge, pledge, lien, hypothecation, lease, title retention, assignment, trust arrangement, right of possession or detention or security interest of any kind, howsoever created or arising.
“ Life Limited Part ” or “ LLP ” means any Part that has a pre-determined life limit mandated by the Manufacturer or the Certificating Authority which requires any such Part to be discarded upon reaching such life limit.
“ Liquidity Provider ” means DVB Bank SE, its successors and assigns.
“ Lost Documents ” means Aircraft Documents that have suffered a Documents Loss.
“ Maintenance Check(s) ” means the 6 Year HMV Check and/or 12 Year HMV Check performed or to be performed on the Airframe, any Engine Restoration performed or to be performed on an Engine, any Engine LLP replacement or any Overhaul performed or to be performed on any Landing Gear or the APU.
“ Maintenance Program ” mean Lessee’s maintenance program (as approved by the Aeronautics Authority) for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Aircraft and each Item of Equipment.
“ Maintenance Reserve Claim ” means any claim by Lessee for payment by Lessor from the applicable Maintenance Reserves of Reimbursable Expenses following completion by Lessee of a Maintenance Check.
“ Maintenance Reserve(s) ” means, collectively, as of any given time, the then current balance of payments received from Lessee and held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2C to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve, Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear Overhaul Reserve and APU Overhaul Reserve.
“ Manager ” means C.I.T. Leasing Corporation, a corporation organised under the laws of the State of Delaware, U.S.A. with its principal office located at 1 CIT Drive, Livingston, New Jersey, 07039-5703 U.S.A., its successors and assigns.
“ Manufacturer ” means, in the case of the Airframe, Airbus S.A.S., in the case of the Engines, IAE International Aero Engines AG, and in the case of any Item of Equipment, the manufacturer of such Item of Equipment.
“ Manufacturer’s Repair Manual ” means the most current revision of the respective (i) maintenance, repair or overhaul manual or (ii) the structural repair manual, each issued by the Manufacturer and applicable to the maintenance performed on the Aircraft or any Item of Equipment.
“ Mortgage Convention ” means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.

	  	App 1 - 9	  	APPENDIX 1
DEFINITIONS	

“ MPD ” means the Airframe Manufacturer’s Maintenance Planning Document, as revised from time to time to include all revisions up to and including the then most current revision issued by the Airframe Manufacturer.
“ Net Event of Loss Proceeds ” means any Event of Loss Proceeds actually received by Lessor or Owner (or such other person entitled to receipt thereof), less any expenses (including reasonable attorney’s fees and costs) and/or Taxes incurred by Lessor (or any other relevant Person) in connection with the collection or receipt of such funds which would not otherwise have been incurred by Lessor (or such other relevant Person) absent the occurrence of such Event of Loss.
“ Obligations ” means all of Lessee’s obligations and liabilities now existing or hereafter arising under any Operative Document.
“ Operative Document(s) ” means, either collectively or individually as the context requires, this Lease, the Lease Supplement, the Acceptance Certificate, the Guarantee, any warranty assignment, acknowledgment and consent, any Permitted Sublease, the Lessee Acknowledgment, the Security Letter of Credit (if any), and any and all other documents, instruments and agreements entered into in connection with any of the foregoing and to which Lessee is a party or which Lessee acknowledges, in writing, is an Operative Document.
“ Overhaul ” means (as applicable):
(i) with respect to any Landing Gear or Part, the complete refurbishment or major restoration of such Landing Gear or Part in accordance with the overhaul or restoration procedures in the respective Manufacturer’s Repair Manual for such Landing Gear or Part, the extent of which refurbishes or restores such Landing Gear or Part, as applicable, to a “zero time since overhaul” condition in accordance with such Manufacturer’s Repair Manual;
(ii) with respect to the APU, the complete refurbishment or restoration of the compressor, combustion section and turbine of the APU pursuant to the Manufacturer’s Repair Manual; and
(iii) with respect to any Engine, an Engine Restoration.
“ Owner ” means Lessor in its capacity as owner of the Aircraft or such other Person as Lessor may notify Lessee in writing from time to time as being the owner of the Aircraft.
“ Owner Participant ” means CIT Aviation Finance II Limited, a Bermuda limited liability company that is a tax resident in Ireland, which is the holder of the Beneficial Interest as owner participant under the Trust Agreement, its successors and permitted assigns.
“ Part(s) ” means all appliances, components, parts, instruments, appurtenances, accessories, furnishings, seats and other equipment and additions of whatever nature (other than Engines, the APU, any Landing Gear, and any temporary replacement parts installed pursuant to Article 12 of the Lease), which may from time to time be incorporated or installed in or attached to any Item of Equipment or which have been removed therefrom, but which remain associated with and/or form part of the Aircraft or any Item of Equipment pursuant to the terms of the Lease.
“ Past Due Rate ” means the lesser of (i) the rate per annum equal to LIBOR plus four hundred (400) basis points, and (ii) the maximum rate permitted by applicable Law.

	  	App 1 - 10	  	APPENDIX 1
DEFINITIONS	

“ PBH Period ” has the meaning set forth in Appendix 2B.
“ PBH Rent ” has the meaning set forth in Appendix 2B.
“ PBH Rent Payment Date ” the meaning set forth in Appendix 2B.
“ Permitted Liens ” means those Liens expressly permitted pursuant to Section 17.7 hereof.
“ Permitted Sublease ” means any sublease of the Aircraft to a Permitted Sublessee permitted under the terms and subject to the conditions of this Lease.
“ Permitted Sublessee ” means a Person:
(a) which is a commercial passenger air carrier that holds the requisite licenses and approvals for the maintenance and operation of the Aircraft; and
(b) with respect to which, at the time such Person becomes a Permitted Sublessee pursuant to the terms and conditions of this Lease and for the term of any Permitted Sublease to which such Permitted Sublessee is a party, no proceeding is pending or shall be instituted in connection with any insolvency, bankruptcy, reorganisation, examinership, administration, liquidation, moratorium or other Laws affecting the enforcement of creditors’ rights generally; and
(c) that is expressly consented to in writing by Lessor, which consent shall be in Lessor’s sole discretion, acting reasonably.
“ Person ” means an individual, general partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or limited partnership, Governmental Authority or other entity of whatever nature.
“ Prior Lease ” means that certain aircraft lease agreement with respect to the Aircraft between an Affiliate of Lessor, as lessor, and Prior Operator, as lessee.
“ Prior Operator ” means Olympic Air Anonimos Eteria Aeroporikon Metaforon, d/b/a Olympic Air.
“ Quiet Enjoyment Letters ” means letters from each of Owner Participant and Security Trustee to Lessee substantially in the forms set out in Appendix 8.
“ Redelivery Location ” means such airport in Mexico or El Salvador as specified in writing by Lessee to Lessor no less than ten (10) Business Days prior to the Scheduled Termination Date, or such other location as may be agreed in writing by Lessor and Lessee prior to the Scheduled Termination Date.
“ Register ” means the registry of aircraft which is maintained in the State of Registration by the Aeronautics Authority having authority with respect to the registration of the Aircraft.
“ Reimbursable Event ” means, subject to the provisions and exclusions of Appendix 2C, the completion by Lessee during the Lease Term of a Maintenance Check or the replacement of any Engine Life Limited Parts.

	  	App 1 - 11	  	APPENDIX 1
DEFINITIONS	

“ Reimbursable Expenses ” means, as the context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12 Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses, Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such terms are defined in Appendix 2C.
“ Related Lease(s) ” means any and all leases of aircraft between Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, or trustee on behalf of Lessor, Owner Participant or Servicer, or any Affiliate of Lessor, Owner Participant or Servicer, as lessor, and Lessee or any Affiliate of Lessee, as lessee.
“ Related Lease Event of Default ” means, in relation to any Related Lease, any breach or default of Lessee’s obligations thereunder which constitute an “event of default” or similar event however termed thereunder under which the party to whom such obligations are owing would have the right to exercise remedies including the termination or cancellation of the Related Lease.
“ Related Obligations ” means the obligations and liabilities now existing or hereafter arising of Lessee or any Affiliate of Lessee under any Related Lease.
“ Rent ” means Basic Rent and Supplemental Rent payable pursuant to this Lease.
“ Required Approval ” means evidence documenting approval by the respective Airframe or Engine Manufacturer (as applicable) and the Certificating Authority with respect to (i) any repair to the Airframe or any Engine, where the accomplishment of such repair does not conform with the repair procedures set forth in the Manufacturer’s Repair Manual or an EASA approved service bulletin relevant to such repair and (ii) any alteration or modification of the Airframe or any Engine.
“ Return ” means the return of the Aircraft and all Items of Equipment to Lessor pursuant to and in accordance with Article 22 and the other provisions of this Lease.
“ Return Acceptance Certificate ” means the certificate substantially in the form of Appendix 7 to be executed and delivered by Lessor and Lessee at Return.
“ 6 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check and (b) each Task that has an initial interval of six (6) years and/or a repetitive interval of six (6) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 6 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “6 Year HMV Check Airframe Reserve”.
“ Scheduled Delivery Date ” means the scheduled date for Delivery identified in Appendix 2A which is the date Lessor expects the Prior Operator to return the Aircraft in accordance with the Prior Lease.
“ Scheduled Termination Date ” means the day on which the Lease Term is scheduled to expire (as provided in Appendix 2A), and which may be independent from the Termination Date as provided in the definition of such term.
“ Security Deposit ” means (i) the Cash Security Deposit and the Credit Security Deposit in the amounts set forth in Appendix 2B; including (ii) any amounts paid to Lessor pursuant to Sections 4.4 and 4.6(c); less (iii) any amounts applied or utilised by Lessor in accordance with the provisions of Sections 4.3 and 4.6(b), whether the same are paid in cash or in the form of a Security Letter of Credit.

	  	App 1 - 12	  	APPENDIX 1
DEFINITIONS	

“ Security Letter of Credit ” means an unconditional and irrevocable letter of credit, satisfactory to Lessor in form and substance, in the amount of the Security Deposit and otherwise in compliance with the requirements of Section 4.6 and (i) drawn upon an issuer located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland or (ii) issued by a bank outside of Ireland and confirmed by Allied Irish Banks, AIB International Centre, IFSC, Dublin 1, Ireland (SWIFT: AIBKIE2D) or such other bank located in Ireland (either a bank organised in Ireland or the Ireland branch of a bank organised outside Ireland) and with a branch office in Dublin, Ireland, each issuing and confirming bank being acceptable to Lessor and having a credit rating not lower than A from Standard and Poor’s or A2 from Moody’s, and which shall include any replacements, supplements and amendments thereto.
“ Security Trust Agreement ” means that certain security trust agreement dated as of December 11, 2008 among Owner Participant, Security Trustee, and the other parties named therein, as amended and supplemented from time to time.
“ Security Trustee ” means Deutsche Bank Trust Company Americas, a New York banking corporation, as security trustee pursuant to the Security Trust Agreement, its successors and assigns.
“ Servicer ” means CIT Aerospace International, a company organised and existing under the Laws of Ireland and having its principal place of business at 3 George’s Dock, IFSC, Dublin 1, Ireland.
“ State of Organisation ” means the country and/or state under which Laws a Person is organised and existing, or, with respect to Lessor and Lessee, the country and/or state identified on the first page of this Lease.
“ State of Registration ” means the United Mexican States.
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent and payments in respect of Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under this Lease, including without limitation, and to the extent permitted by applicable Law, interest at the Past Due Rate calculated on any: (i) part of any installment of Basic Rent not paid on the date due hereunder for the period the same remains unpaid and (ii) Supplemental Rent or Maintenance Reserves not paid when due hereunder, until the same is paid.
“ 12 Year HMV Check ” means a maintenance inspection (and rectification of defects discovered during such inspection) that as a minimum includes (a) the next due C-Check, (b) each Task that has a repetitive interval of six (6) years as set forth in the MPD, and (c) each Task that has an initial interval of twelve (12) years and/or a repetitive interval of twelve (12) years where such Task has previously been accomplished, each as set forth in the MPD.
“ 12 Year HMV Check Airframe Reserve ” has the meaning set forth in Appendix 2C, Section “12 Year HMV Check Airframe Reserve”.
“ Task(s) ” means each inspection or other requirement set forth in the MPD that (a) has a repetitive interval designated by a letter or combination of a letter and a number, or (b) is based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of calendar days, months and/or years.

	  	App 1 - 13	  	APPENDIX 1
DEFINITIONS	

“ Tax(es) ” means any taxes (including, without limitation, sales, use, business, gross or net income, personal property, license, documentation, transfer, import, export, fuel, leasing, occupational, value added, excess profits, excise, gross or net receipts, franchise, stamp, environmental and other taxes), levies, imposts, withholdings, fees, assessments, duties and other charges of any nature, and any penalties, fines, additions to tax, interest or other charges related thereto which are imposed by any Governmental Authority or other taxing authority in any jurisdiction or by any international or multinational taxing or regulatory authority.
“ Termination Date ” means:
(i) the Scheduled Termination Date if Return is completed on the Scheduled Termination Date; or
(ii) the date, if other than the Scheduled Termination Date, of Lessee’s Return of the Aircraft with all Obligations then due for performance having been performed; or
(iii) the date on which this Lease terminates in accordance with Section 20.3 following the occurrence of an Event of Loss with respect to the Aircraft or the Airframe following Delivery; or
(iv) the date of termination of this Lease following the occurrence of an Illegality Event in accordance with Section 27.1(b); or
(v) the date on which this Lease is cancelled or terminated pursuant to Article 24 following the occurrence of an Event of Default.
“ Time Controlled Part ” means any Item of Equipment, including any Life Limited Part, having a Task applicable to it based upon a predetermined time limit or interval in accordance with the MPD to the extent such Task requires such Item of Equipment to be discarded, overhauled, or re-certified upon reaching such time limit or interval.
“ Trust Agreement ” means the Amended and Restated Declaration of Trust (Aircraft 3317) as of December 19, 2008 between Owner Participant and Wilmington Trust SP Services (Dublin) Limited, as amended, supplemented and assigned, pursuant to which Owner holds legal title to the Aircraft and acts for the benefit of Owner Participant with respect to the Aircraft.
“ Trust Company ” means Wilmington Trust SP Services (Dublin) Limited, acting in its individual capacity, and its successors and assigns.
“ U.S. ” or “ U.S.A. ” means the United States of America.
“ VAT ” means any Tax that is, or is in the nature of, a value added, turnover, sales, use, rental, leasing, services, goods and services, consumption, or transaction privilege Tax.
“ Watch Item ” means any maintenance requirement or inspection of the Aircraft or applicable Item of Equipment following the Termination Date that results from a defect with respect to the Aircraft that was discovered during the Lease Term (and is not due to a routine inspection requirement for all aircraft of the same model as the Aircraft resulting from an Airworthiness Directive, service bulletin or Manufacturer’s recommendations) and is in addition to the maintenance and inspection requirements set forth in the

	  	App 1 - 14	  	APPENDIX 1
DEFINITIONS	

MPD, and where such additional inspection shall be required prior to the later of the accumulation of (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles, or (iii) twenty (20) months, as applicable.
“ Wet Lease(s) ” means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee shall at all times maintain full operational, technical and navigational control and maintenance oversight of the Aircraft, (ii) the Aircraft shall be operated solely by crews employed or contracted by Lessee possessing all current appropriate Aeronautics Authority certificates and licenses (it is understood that cabin attendants need not be regular employees of Lessee), (iii) the Insurances shall remain in full force and effect ( provided that such Insurance with respect to legal liabilities for passenger and cargo may be on a contingent basis for the duration of any such arrangement as long as such third party under such arrangement maintains primary coverage for such insurance in favour of Lessor, Lessee, and any Indemnitee and Additional Insureds in accordance and strict compliance with the terms, conditions, and requirements of this Lease, evidence of which in the form of a certificate of insurance and letter of undertaking from the brokers of such third party under such arrangement shall be provided to Lessor prior to the commencement of such arrangement), (iv) the Aircraft shall be used and maintained by Lessee as otherwise required by and in accordance with the terms and conditions of this Lease.

	  	App 1 - 15	  	APPENDIX 1
DEFINITIONS	

Appendix 2
to Aircraft Lease Agreement
COMMERCIAL TERMS
[NOTE: THE TERMS OF THIS APPENDIX 2 ARE CONFIDENTIAL AND CONTAIN 
COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 2 MUST BE REMOVED 
FROM ANY PUBLIC FILING OF THIS LEASE] 
Contents:
Appendix 2A     Lease Term 
Appendix 2B     Rent, Security Deposit, Insurance and other Financial Matters 
Appendix 2C     Maintenance Reserves 
Appendix 2D     Delivery Conditions 
Appendix 2E     Return Conditions

	  	App 2 - 1	  	APPENDIX 2
COMMERCIAL TERMS	

Appendix 2A
to Aircraft Lease Agreement
LEASE TERM
1. Scheduled Delivery Date is on or about *****, but in any event, no later than *****.
2. Lease Term
Subject to Section 3 below, the Lease Term shall commence on the Delivery Date and shall end on, but not later than, 11:59 P.M. New York, New York time on the later to occur of:
(a) the day immediately preceding the ***** monthly anniversary of the Delivery Date, or
(b) the date on which the next anticipated 6 Year HMV Check (or, in the event the 6 Year HMV Check interval is extended or uses different terminology, such other structural inspection of equivalent scope and detail as the 6 Year HMV Check) is completed,
but which shall in any event end on the Termination Date.
3. Lease Term Extension Option
(a) Provided no Default or Event of Default shall have occurred and be continuing, Lessee may extend the Lease Term for ***** additional months (“ Lease Term Extension ”) on the same terms and conditions (except with respect to the amount of Basic Rent as more fully set forth in paragraph (b) below), provided that Lessee shall provide Lessor with irrevocable written notice of its intention to exercise such extension option at least ***** months prior to the Scheduled Termination Date.
(b) Basic Rent for the Lease Term Extension shall be in an amount reflecting the fair market rate at the time of extension as agreed between Lessor and Lessee prior to but not later than the time that Lessee exercises its option to extend the Lease Term of the Lease as set forth in paragraph (a) above. If Lessor and Lessee are unable to agree to an amount of Basic Rent for the Lease Term Extension, then Lessee’s option to extend the Lease Term shall lapse.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 2	  	APPENDIX 2A
LEASE TERM	

Appendix 2B
to Aircraft Lease Agreement
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS
1. Basic Rent . Lessee shall pay Basic Rent during the Lease Term as follows:
1.1. PBH Rent . For that portion of the Lease Term commencing on the Delivery Date and continuing through and including the twenty-eighth (28 th ) day after the Delivery Date (the “ PBH Period ”), Lessee shall pay Basic Rent to Lessor on a power-by-the-hour basis at the rate of ***** per Flight Hour (the “ PBH Rent ”). The PBH Rent shall be paid in arrears on or prior to the fifteenth (15 th ) day following the last day of the PBH Period (the “ PBH Rent Payment Date ”). For the avoidance of doubt and by way of example, if Delivery occurs on 12 December 2010, the PBH Period would commence on 12 December 2010 and continue through and including 08 January 2011, and the PBH Rent Payment Date would be 23 January 2011.
1.2. Fixed Rent . Subject to Sections 1.3 and 1.4 below, for the remainder of the Lease Term period commencing on the day immediately following the last day of the PBH Period (the “ Fixed Rent Commencement Date ”) and continuing through the end of the Lease Term (but not including any Lease Term Extension), Lessee shall pay Basic Rent to Lessor in advance on each Fixed Rent Payment Date in respect of each Fixed Rent Period in the amount of ***** per Fixed Rent Period (the “ Fixed Rent ”), prorated for any partial Fixed Rent Period.
1.3. Fixed Rent Reduction due to Change of Brakes . Lessor has agreed to partially reimburse Lessee for the cost of changing the brakes on the Aircraft from Messier-manufactured brakes to Goodrich-manufactured brakes in an amount equal to ***** (the (the “ Lessor Brake Contribution Amount ”). In order to receive the Lessor Brake Contribution Amount and provided (i) no Event of Default has occurred and is continuing and (ii) Lessee has provided Lessor with documentation reasonably acceptable to Lessor providing evidence of the installation of such Goodrich-manufactured brakes, Lessee may offset the first five (5) non-prorated Fixed Rent payments by ***** each, such that Lessor’s Fixed Rent obligation for each of such five (5) Fixed Rent Periods will be *****. Lessee shall reinstall the Messier-manufactured brakes on the Aircraft prior to Return. For the avoidance of doubt, title to and ownership of the Messier-manufactured brakes and the Goodrich-manufactured brakes shall vest with Lessor throughout the Lease Term, with title to and ownership of the Goodrich-manufactured brakes to transfer to Lessee at the time of Return.
1.4. Delayed Delivery . In the event Lessor tenders the Aircraft for delivery on or after *****, Lessee’s Obligation to pay Fixed Rent for the second Fixed Rent Period of the Lease Teri automatically be waived by Lessor.
2. Security Deposit – Timing of Payments and Amounts .
2.1. Prior to the execution of this Lease, Lessee has paid Lessor the amount of *****; one (1) Business Day following execution of this Lease, Lessee shall deposit with Lessor an additional amount of *****; and one (1) Business Day prior to the Scheduled Delivery Date, Lessee shall deposit with Lessor an additional amount of *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 3	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

2.2. Notwithstanding the foregoing, subject to no Default or Event of Default having occurred during the first six (6) months of the Lease Term the total Security Deposit requirement hereunder shall be reduced to *****, and Lessor shall automatically apply ***** of the Security Deposit towards Lessee’s Fixed Rent payment due for the seventh (7 th ) Fixed Rent Period during the Lease Term.
2.3. In the event a Default or Event of Default has occurred during the first six (6) months of the Lease Term, the total Security Deposit requirement hereunder shall remain at ***** throughout the Lease Term.
3. Account
All payments made under this Lease or any other Operative Document shall be made to the account set forth below by wire transfer of immediately available funds to its correspondent bank:

Bank:	  	Deutsche Bank Trust Company Americas	
	  	60 Wall Street, 26 th Floor	
	  	Mail Stop NYC60-2606	
	  	New York, NY 10005	
		
Account Number:	  	*****	
		
ABA Number:	  	*****	
		
SWIFT:	  	*****	
		
For the account of:	  		
		
Account Name:	  	*****	
		
Account Number:	  	*****	
		
Reference:	  	*****	
4. Insurances
4.1. Liability Insurance Coverage Amount : *****.
4.2. Agreed Value : *****, which amount shall be reduced by ***** at each anniversary of the Delivery Date during the Lease Term.
4.3. Engine Agreed Value (each Engine) : *****.
4.4. Aircraft Hull Deductible Amount : ***** per occurrence.

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 4	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

5. Legend
“LEASED FROM WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, DUBLIN, IRELAND AS TRUSTEE/LESSOR”
6. Notices

If to Lessee:	  	If to Lessor:	
		
Concesionaria Vuela Compañía de	  	Wilmington Trust SP Services (Dublin) Limited	
Aviación S.A.P.I. de C.V.	  	First Floor, 7 Exchange Place	
Prolongación Paseo de la Reforma No. 490	  	International Financial Services Centre	
Colonia Santa Fe Peña Blanca	  	Dublin 1	
C.P. 01210	  	Ireland	
México, D.F.	  	Fax: +353 1 612 5550	
		
	  	with a copy to Servicer, as follows:	
Attention: Director Jurídico	  		
Fax: +52 (55) 5211 9613	  	CIT Aerospace International	
	  	3 George’s Dock	
	  	IFSC	
	  	Dublin 1	
	  	Ireland	
	  	Attention: Chief Counsel	
	  	Fax: +353 1 656 1001	
		
	  	and, with respect to any insurance notification,	
	  	with a copy to:	
		
	  	CIT Aerospace	
	  	1 West 42nd Street, 12th Floor	
	  	New York, NY 10036, USA	
	  	Attention: Portfolio Services	
	  	Fax: +1 (877) 525 9183	
	  	Email: alice.arazny@cit.com	

	  	App 2 - 5	  	APPENDIX 2B
RENT, SECURITY DEPOSIT, INSURANCE
AND OTHER FINANCIAL MATTERS	

Appendix 2C
to Aircraft Lease Agreement
MAINTENANCE RESERVES
 
1.	Maintenance Reserves - Airframe	
 
 	A.	6 Year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 6 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 6 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 6 Year HMV Check Airframe Reserve as of the date of commencement of such 6 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 6 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 6 Year HMV Check, the Tasks accomplished during such 6 Year HMV Check shall have included, as a minimum, (a) each six (6) year or seventy-two (72) month Task, (b) each Task that has an initial or repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 6 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first 6 Year HMV Check to be accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the 6 Year HMV Check Airframe Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the 6 Year HMV Check Airframe Reimbursable Expenses incurred during the first 6 Year HMV Check accomplished following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the 6 Year HMV Check Airframe Reserve with respect to the Aircraft; or
(b) the amount equal to the 6 Year HMV Check Airframe Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months of operation) accumulated since the later of the date that the Aircraft was delivered new to the Prior Operator or the date of completion of the most recent 6 Year HMV Check accomplished on the Aircraft at the time of Delivery.

	  	App 2 - 6	  	APPENDIX 2C
MAINTENANCE RESERVES	

 	B.	12 Year HMV Check Airframe Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ 12 Year HMV Check Airframe Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the 12 Year HMV Check Airframe Reserve the amount then currently held by Lessor in the 12 Year HMV Check Airframe Reserve as of the date of commencement of such 12 Year HMV Check (all such qualifying expenses are hereinafter referred to as “ 12 Year HMV Check Airframe Reimbursable Expenses ”), provided that at the time of completion of such 12 Year HMV Check, the Tasks accomplished during such 12 Year HMV Check shall have included, as a minimum, (a) each twelve (12) year or one hundred forty-four (144) month Task, (b) each Task that has a repetitive interval of (i) twenty (20) calendar months or less, (ii) six thousand (6,000) Flight Hours or less, (iii) four thousand five hundred (4,500) Cycles or less, and (iv) three thousand (3,000) APU Hours or less, and (c) the rectification of each defect discovered during the accomplishment of such Tasks set forth herein. Notwithstanding the preceding, except for the Final Check if the Manufacturer approves an extension of time for Lessee to accomplish the rectification of any defect solely due to lead time required by the Manufacturer to provide (x) any necessary parts, or (y) any necessary engineering, such extension of time will not prevent Lessee from claiming the 12 Year HMV Check Reimbursable Expenses, and in any event, any such defect must be rectified, in conformance with the requirements of this Lease, not later than the Termination Date and Lessee shall not claim any additional reimbursement for such rectification.
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first 12 Year HMV Check to be accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the 12 Year HMV Check Airframe Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the 12 Year HMV Check Airframe Reimbursable Expenses incurred during the first 12 Year HMV Check accomplished following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the 12 Year HMV Check Airframe Reserve with respect to the Aircraft; or
(b) the amount equal to the 12 Year HMV Check Airframe Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months of operation) accumulated since the later of the date that the Aircraft was delivered new to the Prior Operator or the date of completion of the most recent 12 Year HMV Check accomplished on the Aircraft at the time of Delivery.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 7	  	APPENDIX 2C
MAINTENANCE RESERVES	

2.	Maintenance Reserves - Engines	
 
 	A.	Engine Restoration Reserves	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor the amount determined under clause (ii) below multiplied by the number of Flight Hours of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as, with respect to each Engine, an “ Engine Restoration Reserve ” and collectively, the “ Engine Restoration Reserves ”). A separate Engine Restoration Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) The amount used to calculate Lessee’s payment due under clause (i) above shall be determined on a monthly basis and shall be the amount set forth in the table below that most closely corresponds to Lessee’s actual Flight Hour to Cycle utilisation ratio for each Engine during the Calendar Month for which such payment is due:

Actual Flight
Hour/Cycle
(    :1)	  	Rate	
4.0	  	*****	
3.9	  	*****	
3.8	  	*****	
3.7	  	*****	
3.6	  	*****	
3.5	  	*****	
3.4	  	*****	
3.3	  	*****	
3.2	  	*****	
3.1	  	*****	
3.0	  	*****	
2.9	  	*****	
2.8	  	*****	
2.7	  	*****	
2.6	  	*****	
2.5	  	*****	
2.4	  	*****	
2.3	  	*****	
2.2	  	*****	
2.1	  	*****	
2.0	  	*****	
1.9	  	*****	
1.8	  	*****	
1.7	  	*****	
1.6	  	*****	
1.5	  	*****	
1.4	  	*****	
1.3	  	*****	
1.2	  	*****	
1.1	  	*****	
1.0	  	*****	
0.9	  	*****	
0.8	  	*****	
0.7	  	*****	
0.6	  	*****	
0.5	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 8	  	APPENDIX 2C
MAINTENANCE RESERVES	

(iii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Restoration Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an Engine Restoration on an Engine during the Lease Term for which such Engine Restoration Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Restoration Reimbursable Expenses ”), provided that at the time of completion of such Engine Restoration, as a minimum:
(a) the Engine was restored to a condition having an expected minimum of sixteen thousand five hundred (16,500) Flight Hours without any requirement for a shop visit prior to the expiration of such time; and
(b) each Life Limited Part installed in the Engine had no less than eight thousand five hundred (8,500) Cycles (and equivalent calendar time, if applicable, with calendar time determined by the worldwide fleet average annual utilisation as reported by the Engine Manufacturer) remaining to its life limit, provided, however, Lessor and Lessee agree that during the first Engine Restoration to occur, either party may request that the minimum number of Cycles required for each Life Limited Part as set forth above be reviewed by the parties, and the parties agree that they shall review and discuss in good faith as to whether or not the minimum number of Cycles set forth above should be increased or decreased based upon the then current information available to both Lessee and Lessor as to the average Flight Hour to Cycle ratio operated by all similar model aircraft worldwide; and
(c) the Engine was in compliance with all AD’s to the extent that (i) such AD was issued prior to the date such Engine Restoration was completed and (ii) by the terms of such AD, compliance with such AD would otherwise be required on or prior to the commencement date of the next anticipated restoration shop visit of the relevant Engine.
(iv) Engine Restoration Reimbursable Expenses shall only include Lessee’s Actual Cost incurred in connection with Engine disassembly, repair, Overhaul, assembly and any required testing accomplished in connection with the accomplishment of such Engine Restoration.
(v) Engine Restoration Reimbursable Expenses shall not include the cost of replacement Life Limited Parts installed in connection with the accomplishment of such Engine Restoration.

	  	App 2 - 9	  	APPENDIX 2C
MAINTENANCE RESERVES	

(vi) Notwithstanding anything to the contrary in the preceding clause (iii), solely with respect to the first Engine Restoration accomplished by Lessee on each Engine following Delivery, in addition to the amount paid by Lessee with respect to the Engine Restoration Reserve applicable to the Engine on which such Engine Restoration was accomplished, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the Engine Restoration Reimbursable Expenses incurred by Lessee during the first Engine Restoration accomplished for such Engine following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the Engine Restoration Reserve with respect to such Engine; or
(b) the amount equal to the Engine Restoration Reserve Rate set forth in clause (ii) above (as of the Delivery Date without adjustment for inflation) multiplied by the number of Flight Hours of operation accumulated on such Engine since the later of the date that the Engine was delivered new or since the date of completion of the most recent Engine Performance Restoration accomplished on such Engine at the time of Delivery.
 
 	B.	Engine Life Limited Parts Reserves	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** multiplied by the number of Cycles of operation of each Engine during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Engine Life Limited Parts Reserve ”). A separate Engine Life Limited Parts Reserve shall be established and maintained separately for each Engine and the same shall not be cumulated or netted.
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the applicable Engine Life Limited Parts Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the purchase by Lessee of any Engine Life Limited Part during the Lease Term that is installed in an Engine for which such Engine Life Limited Parts Reserve is established (all such qualifying expenses are hereinafter referred to as “ Engine Life Limited Parts Reimbursable Expenses ”).
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first replacement of each Engine Life Limited Part of each Engine accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the applicable Engine Life Limited Parts Reserve, Lessor shall reimburse Lessee, or pay such other Person as directed by Lessee, the amount by which the Engine Life Limited Parts Reimbursable Expenses incurred by Lessee exceeds the amount paid by Lessee with respect to the Engine Life Limited Parts Reserve with respect to such Engine, but in no event shall the sum of all such excess Engine Life Limited Parts Reimbursable Expenses paid by Lessor exceed the amount that is equal to the product of the Engine Life Limited Parts Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustments applied during the Lease Term) multiplied by the total number of Cycles accumulated by each such replaced Engine Life Limited Part as at the time of Delivery as set forth in the Acceptance Certificate.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 10	  	APPENDIX 2C
MAINTENANCE RESERVES	

3.	Maintenance Reserves – Other Items 	
 
 	A.	Landing Gear Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay to Lessor ***** per Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ Landing Gear Overhaul Reserve ”).
(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) the total prorated amount held by Lessor in the Landing Gear Overhaul Reserve account (as prorated in accordance with sub-section (iii) below) as of the commencement date of such Landing Gear Overhaul (such prorated account balance amount being hereinafter referred to as “ Landing Gear Overhaul Reimbursable Expenses ”), provided that at the time of completion of such Overhaul of any Landing Gear, such Landing Gear shall have no existing condition that would require the removal of such Landing Gear prior to completing the full Overhaul interval as set forth in the MPD.
(iii) In no event shall any reimbursement for a Landing Gear Overhaul of any individual Landing Gear exceed an amount that is in excess of a percentage of the total amount, then currently held by Lessor in the Landing Gear Overhaul Reserve, equal to ***** for each of the left and right main Landing Gear, and ***** for the nose Landing Gear.
(iv) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first Overhaul of each Landing Gear accomplished by Lessee following the Delivery Date, in addition to the percentage amount with respect to such Landing Gear paid by Lessee with respect to the applicable Landing Gear Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the Landing Gear Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for each such Landing Gear following the Delivery Date exceeds (II) the percentage amount that Lessee was required under this Lease to pay with respect to the Landing Gear Overhaul Reserve with respect to such Landing Gear; or
(b) the amount equal to the applicable percentage amount of the Landing Gear Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of months (prorated for partial months) of operation accumulated since the later of the date that such Landing Gear was delivered new or the date of accomplishment of the most recent Overhaul on such Landing Gear at the time of Delivery.
 
 	B.	APU Overhaul Reserve	
(i) Pursuant to Section 13.1 of the Lease, Lessee shall pay Lessor ***** multiplied by the number of APU Hours of operation of the APU during each Calendar Month (the then current balance of all such payments received from Lessee and held by Lessor, net of disbursements made pursuant to this Appendix 2C, is hereinafter referred to as the “ APU Overhaul Reserve ”).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 11	  	APPENDIX 2C
MAINTENANCE RESERVES	

(ii) Subject to the conditions and exclusions contained in this Appendix 2C, Lessor will reimburse Lessee (or, at Lessee’s written instruction, pay on behalf of Lessee) from the APU Overhaul Reserve an amount equal to Lessee’s Actual Cost incurred in connection with the accomplishment by Lessee of an APU Overhaul on the APU during the Lease Term (all such qualifying expenses are hereinafter referred to as “ APU Overhaul Reimbursable Expenses ”), provided that at the time of completion of such APU Overhaul, as a minimum:
(a) the APU was restored to a condition such that it can be reasonably expected to operate for a minimum of five thousand (5,000) APU Hours without any requirement for a shop visit prior to the expiration of such time;
(b) each Life Limited Part installed in the APU had no less than five thousand (5,000) APU Cycles remaining to its life limit; and
(c) the APU was in compliance with all AD’s to the extent that, by the terms of each AD, compliance was required within any of (i) five thousand APU Hours, or (ii) five thousand (5,000) APU Cycles, or (iii) twenty-four (24) months, as applicable.
(iii) Notwithstanding anything to the contrary in the preceding clause (ii), solely with respect to the first APU Overhaul accomplished by Lessee following the Delivery Date, in addition to the amount paid by Lessee with respect to the APU Overhaul Reserve, Lessor shall reimburse Lessee, or pay Lessee’s maintenance provider as directed by Lessee, the lesser of:
(a) the amount by which (I) the APU Overhaul Reimbursable Expenses incurred during the first Overhaul accomplished for the APU following the Delivery Date exceeds (II) the amount that Lessee was required under this Lease to pay with respect to the APU Overhaul Reserve with respect to the APU; or
(b) the amount equal to APU Overhaul Reserve Rate set forth in clause (i) above (as of the Delivery Date and without adjustment for inflation) multiplied by the number of APU Hours of operation accumulated since the later of the date that the APU was delivered new or the date of accomplishment of the most recent APU Overhaul on the APU at the time of Delivery.
 
4.	Maintenance Reserve Claims	
A. Prior to the accomplishment of any Maintenance Check for which Lessee intends to make a Maintenance Reserve Claim, Lessee shall provide Lessor with the workscope and, to the extent available from the Approved Maintenance Provider, the estimated cost of accomplishing such Maintenance Check, for approval by Lessor as to whether or not such workscope complies with the requirements for reimbursement as set forth in this Appendix 2C herein.
B. Following completion of such Maintenance Check in accordance with the approved workscope, Lessee may present its Maintenance Reserve Claim to Lessor for payment by delivery of an invoice for the amount of Reimbursable Expenses claimed by Lessee together with documentation satisfactory to Lessor evidencing completion of such Maintenance Check in accordance with the approved workscope and the cost associated therewith.

	  	App 2 - 12	  	APPENDIX 2C
MAINTENANCE RESERVES	

C. Lessor shall reimburse Lessee by paying ( x ) to Lessee (provided Lessee has delivered to Lessor evidence of payment by Lessee for the amount of such Reimbursable Expenses) or ( y ) upon receipt of written instruction from Lessee, to Lessee’s maintenance provider performing such Maintenance Check (provided Lessor has received evidence of payment by Lessee for the amount of all estimated expenses that exceed the amount to be paid by Lessor as set forth herein). Such amount shall equal the lesser of (i) the amount of such Reimbursable Expenses for such Maintenance Check, or (ii) the amount of the respective Maintenance Reserve for such Reimbursable Event. Notwithstanding the, foregoing, upon Lessee’s request, and at Lessor’s option and sole discretion, Lessor may pay up to ***** of the amount then currently held by Lessor in the applicable Maintenance Reserve account direct y to the maintenance provider performing the applicable Reimbursable Event (each an “ Induction Payment ”) following Lessor’s receipt of a copy of the intended workscope and a preliminary invoice related to such Reimbursable Event, all in form and substance reasonably satisfactory to Lessor.
D. In any case in which the amount paid to Lessee by Lessor hereunder is not sufficient to pay the cost of such Maintenance Check, Lessee shall be obligated to and shall pay directly any such shortfall, without further contribution from Lessor, and Lessee shall not subsequently be permitted to make a Maintenance Reserve Claim for such amounts under this Lease.
 
5.	Exclusions from Reimbursable Expenses	
The following shall be and are specifically excluded from Reimbursable Expenses:
(i) with respect to all Maintenance Checks , expenses incurred in connection with or as a result of (A) an accident, faulty maintenance or installation, incident, improper operations, abuse, neglect, or misuse, (B) any maintenance and material required for or in connection with elective Parts replacement, AD compliance and Aeronautics Authority and/or Certificating Authority regulation compliance, (C) any maintenance and material covered by, or reimbursable by, a claim under any Manufacturer’s warranties or by insurance (with deductibles being treated as reimbursable by insurance for purposes of this exclusion), (D) modifications (including interior reconfiguration), (E) the accomplishment of service bulletins, (F) any deferred maintenance discrepancies (G) any maintenance and material required to correct or repair damage caused by the ingestion by an Engine or the APU of a foreign object external to such Engine or APU (“ FOD ”), (H) ( x ) the cost of shipping any Engine, Engine LLP, Landing Gear or the APU, or ( y ) ferrying the Aircraft to the maintenance facility performing such Maintenance Check, (I) any fees or expenses incurred by representatives of Lessee, (J) handling charges or other mark-ups by Lessee, (K) removal and installation charges with respect to (1) any Engine (for Engine Restoration or Engine LLP replacement) or (2) any Landing Gear or APU for Overhaul, (L) any maintenance or replacement of Parts (when such maintenance or replacement is as a result of (aa) Time Controlled Part requirements of the Maintenance Program or (bb) a routine requirement of any task card), provided, however, Reimbursable Expenses shall include the cost to repair or replace any Part that requires maintenance or replacement solely as a result of failing a routine requirement for an operational or functional test of any Task while installed on the Aircraft, and (M) Taxes paid or due and payable on or in connection with the accomplishment of the Maintenance Check and any labor and materials supplied thereunder;
(ii) with respect to an Engine Restoration , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for the removal and installation of quick engine change components and Parts (“ QEC ”) except when such QEC is removed or installed at the maintenance facility of the
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 13	  	APPENDIX 2C
MAINTENANCE RESERVES	

Approved Maintenance Organisation accomplishing such Engine Restoration, (B) replacement, repair or Overhaul of external engine Parts, including QEC, (C) rental of tooling or equipment for the removal, installation or shipping of the Engine and (D) charges incurred for the use of a temporary replacement engine;
(iii) with respect to the replacement of Engine LLPs , in addition to the exclusions listed in clause (i) above, (A) an amount equal to the product of ( x ) the Manufacturer’s then current catalogue price of the replacement LLP which is the subject of Lessee’s Maintenance Reserve Claim divided by its Cycle life limit, multiplied by ( y ) the Cycles remaining to its Cycle life limit on the LLP replaced, and (B) any labor or additional materials costs associated with the replacement of any such Engine LLP;
(iv) with respect to any Landing Gear Overhaul , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) the repair, replacement or Overhaul of rotable parts such as wheels, tires, brakes, transducers, switch assemblies, side struts, braces, and uplock and downlock mechanisms, (B) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation accomplishing such Landing Gear Overhaul), (C) replacement, repair or Overhaul of external Landing Gear Parts, (D) rental of tooling or equipment for the removal, installation and shipping of the Landing Gear and (E) charges incurred for the use of a temporary replacement landing gear; and
(v) with respect to an APU Overhaul , in addition to the exclusions listed in clause (i) above, expenses incurred in connection with or as a result of the cost of (A) labor and material necessary for removal and installation of external Parts (except when such external Parts are removed or installed at the Approved Maintenance Organisation in order to perform such APU Overhaul), (B) replacement, repair or Overhaul of external APU Parts, (C) rental of tooling or equipment for the removal, installation and shipping of the APU and (D) charges incurred for the use of a temporary replacement auxiliary power unit.
 
6.	Adjustment/Revision of Maintenance Reserve Rates	
A. Adjustment for Inflation . The Maintenance Reserve rates set forth in paragraphs 1, 2A and 3 above (inclusive of subsections and including the table appearing in Section 2A(ii)), shall be increased for inflation on 1 June of each calendar year (commencing 1 June 2011) by a percentage amount equal to ***** by adding: ( x ) the product of the then current Maintenance Reserve rate multiplied by the value of *****, and ( y ) the then current Maintenance Reserve rate, as the same has been increased in accordance with this paragraph 6A.
B. Revision of Engine LLP Parts Reserve Rate . The Engine Life Limited Parts Reserve rate set forth in paragraph 2B shall be revised on 1 June of each calendar year of the Lease Term so that it equals the sum of the then current cost per Cycle of each Engine Life Limited Part of each Engine. The cost per Cycle of each such Engine Life Limited Part shall be determined by dividing ( x ) the then current catalog list price of each Engine Life Limited Part for each Engine by ( y ) the Engine Manufacturer’s then published cyclic life for each respective Engine Life Limited Part.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 2 - 14	  	APPENDIX 2C
MAINTENANCE RESERVES	

7.	General	
A. All payments in respect of Maintenance Reserves that accrue on a monthly basis and for which the payment due is for less than a complete month shall be prorated on a daily basis based on a month consisting of thirty (30) days.
B. In no event shall Lessor be obligated to reimburse or make any payment to Lessee under this Appendix 2C, whether due to a Maintenance Reserve Claim or otherwise, (i) if and for so long as a Default or Event of Default has occurred and is continuing or (ii) with respect to a Maintenance Reserve Claim which has not been made within the time limits specified in Section 13.4 of the Lease. Lessor shall not be obligated to cure any such Default or Event of Default by granting an offset to Lessee for any amounts that would be payable hereunder in the absence of such Default or Event of Default.
C. All Maintenance Reserves shall be managed, held, applied and reimbursed strictly in accordance with the provisions of this Lease, and any determinations and/or calculations made or to be made in respect of any Maintenance Reserve Claims shall be managed by personnel who are experienced and familiar with aircraft and operating leases of this type, and the payment of any Maintenance Reserve reimbursement amounts due and owing to Lessee under this Appendix 2C shall not be unreasonably withheld.
D. The disposition of all Maintenance Reserves following the occurrence of an Event of Loss of the Aircraft shall be made in accordance with the provisions of Section 20.3(b) of the Lease.
E. Each installment of Maintenance Reserves paid by Lessee shall accrue interest from the date of its receipt by Lessor. The rate at which interest shall accrue on the Maintenance Reserves from time to time shall be the “30 Day Dealer Commercial Paper Rate” as reported on Reuters Page 23. The rate of interest shall be initially determined as of the Delivery Date and shall be reset on each three (3) month anniversary of the Delivery Date thereafter during the Lease Term. Any interest earned on the Maintenance Reserves shall become part of the Maintenance Reserves, and shall be subject to the terms hereof applicable to Maintenance Reserves.
F. For the avoidance of doubt, Lessor acknowledges and agrees that reimbursement for any Engine Restoration or APU Overhaul shall be based on the accomplishment of a workscope encompassing the elements and requirements as set forth and contemplated in this Appendix 2C, regardless of whether or not the FAA Form 8130-3 issued in respect of the relevant Engine or APU specifically references that a “restoration” or “overhaul” was completed.

	  	App 2 - 15	  	APPENDIX 2C
MAINTENANCE RESERVES	

Appendix 2D
to Aircraft Lease Agreement
DELIVERY CONDITIONS
 
1.	GENERAL	
1.1. The Aircraft shall be airworthy with no existing condition that exceeds Manufacturer’s allowable limits and shall be eligible for the immediate issuance of a standard DGAC Certificate of Airworthiness for passenger operations.
1.2. The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings. Any placards shall be in both Spanish and English and shall be replaced if required, with Lessee to provide Lessor with such English and Spanish placards for installation prior to Delivery.
1.3. Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4. The Aircraft shall comply with all AD’s required by the Certificating Authority which by their terms require compliance within ninety (90) days from scheduled redelivery date of the Aircraft under the Prior Lease, notwithstanding any waiver, deviation or time extension obtained from any aeronautics authority or the Certificating Authority.
1.5. The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirement Part M, and certain conditions applicable to FAR Part 129 as required for Lessee’s flight operations.
1.6. The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessor shall repair any such leaks discovered.
1.7. Lessor shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the applicable aeronautics authority for certification of airworthiness for aircraft to be exported from the then current state of registration and acceptable to the DGAC).
1.8. All repairs accomplished prior to Delivery shall be permanent repairs completed in accordance with the Airframe Manufacturer’s structural repair manual or Manufacturer’s approved data for the Aircraft.
1.9. The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10. Lessor shall deliver to Lessee, without charge to Lessee, all service bulletin kits applicable to the Aircraft in Lessor’s possession for installation on the Aircraft by Lessee with appropriate instructions for installation provided with such kits.

	  	App 2 - 16	  	APPENDIX 2D
DELIVERY CONDITONS	

1.11. The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.12. The Aircraft will:
(a) be capable of operating to and from runways narrower than forty-five (45) meters;
(b) be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;
(c) possess both fuel and weight quantity indicators indicating kilograms;
(d) incorporate a EGPWS/TAWS system;
(e) possess a reinforced cockpit door; and
(f) be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.
 
2.	PAINT	
The Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted in Lessee’s standard livery using a quality paint. All other areas of the Aircraft where paint is peeled, chipped or worn out, shall be restored as necessary to provide a uniform appearance. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant.
 
3.	AIRFRAME	
The Aircraft shall not have been operated in commercial passenger service since completion of the redelivery check of the Aircraft pursuant to the Prior Lease, which shall have included the next due complete C-Check (and HMV Check if such check is due within the intervals set forth for a block C-Check) as per the Prior Operator’s maintenance program which shall have included the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) that were due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) months, as applicable, following the scheduled redelivery date of the Aircraft pursuant to the Prior Lease (such check being hereinafter referred to as the “ Delivery Check ”).
 
4.	INTERIOR	
4.1. Cockpit windows shall not have any (i) crazing, (ii) delamination or, (iii) any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.2. Passenger compartment windows shall have no visible crazing that obstructs the view from the window.

	  	App 2 - 17	  	APPENDIX 2D
DELIVERY CONDITIONS	

4.3. All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessor.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1. Lessee may (i) witness and accept Lessor’s borescope inspection of the Engines and APU in connection with the redelivery of the Aircraft by Prior Operator, or (ii) may accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessee’s representative or, at Lessee’s expense, an agency selected by Lessee. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessor’s expense. Notwithstanding anything to the contrary herein, solely with respect to the Engine bearing Manufacturer’s serial number V12778 (“ ESN V12778 ”), in the event that any damage to the combustion section of ESN V12778 exceeds the Manufacturer’s allowable limits during the Lease Term and ESN V12778 is not inducted for a performance restoration as a result of such damage, and provided that such damage was not caused by the negligence of Lessee or any Person using or having possession, custody or control of the Aircraft and/or ESN V12778, Lessor shall contribute (by way of reimbursement to Lessee, or payment to Lessee’s maintenance provider, as directed by Lessee) towards Lessee’s Actual Costs solely related to the repair to the combustion section promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such repair(s) and the cost associated therewith. Lessor’s contribution amount is to be determined by calculating the total labor and material costs of the repair (at Lessee’s Actual Cost) of the combustion section divided by the total number of Flight Hours accumulated by ESN V12778 at the time of the repair multiplied by the total Flight Hours accumulated by ESN V12778 at Delivery. For the avoidance of doubt, in the event ESN V12778 is inducted for a performance restoration as a result of such damage to the combustion chamber, Lessor shall contribute to the cost of such performance restoration pursuant to Section 2.A(vi) of Appendix 2C to the Lease and not pursuant to this Section 5.1.
5.2.(a) Each Engine shall have accumulated no more than thirteen thousand (13,000) Flight Hours since new or since completion of its most recent Engine Restoration.
(b) Each Engine Life Limited Part shall have a minimum of ten thousand (10,000) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A maximum power assurance engine run-up shall be performed in the presence of Lessee’s representatives prior to Delivery of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees (30°) Celsius.
5.4. The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.

	  	App 2 - 18	  	APPENDIX 2D
DELIVERY CONDITIONS	

5.5. Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) sixty (60) months, and (ii) seven thousand (7,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the Scheduled Delivery Date based upon the landing gear overhaul interval set forth in the MPD.
 
6.	INSPECTION	
6.1.(a) Subject to the consent of the Prior Operator, Lessee may have representatives on board the Aircraft as observers during a redelivery acceptance flight of the Aircraft performed by the Prior Operator using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and the Prior Operator. If Lessee’s representatives are on board during such redelivery acceptance flight by the Prior Operator, such acceptance flight shall be the acceptance flight for all purposes under this Lease. Lessee shall ensure Lessor’s representative (or the Prior Operator’s representative if Lessor’s representative is not on board during such redelivery acceptance flight) has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor (or the Prior Operator’s representative if Lessor’s representative was not on board during such redelivery acceptance flight). To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall reimburse Lessor at the cost actually paid by Lessor, if any, to the Prior Operator for such flight.
(b) If Lessee’s representatives are not on board during such redelivery acceptance flight by the Prior Operator, then the first flight following Delivery, with Lessor’s representatives on board and using the Airframe Manufacturer’s recommended acceptance flight procedures for used aircraft (or such other procedures acceptable to Lessor and Lessee), shall be the acceptance flight for all purposes set forth herein, and such acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessee shall ensure Lessor’s representative has observed each discrepancy found. Immediately following the acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits and is not corrected prior to Delivery, Lessee shall correct such discrepancy in accordance with the Lease, with Lessor to reimburse Lessee at Lessee’s Actual Cost for the cost of correcting such discrepancy promptly following receipt by Lessor of an invoice and documentation reasonably acceptable to Lessor providing evidence of such correction and the cost associated therewith. Lessor shall have no obligation to pay the cost of correcting any discrepancies discovered during such acceptance flight which were not mutually agreed to in writing by Lessor and Lessee. Lessee shall be responsible for all costs with respect to such flight.
6.2. Lessee shall inspect the Aircraft and Aircraft Documents (the “ Acceptance Inspection ”) prior to the Delivery Date. To the extent permitted by the Prior Operator, the Acceptance Inspection of the Aircraft and the Aircraft Documents shall be accomplished in conjunction with the redelivery inspection to be accomplished by Lessor during the redelivery process of the Aircraft from the Prior Operator, and such Acceptance Inspection of the Aircraft shall include the opening or removal of panels as reasonably required by Lessee and include access to all compartments and bays opened during Lessor’s

	  	App 2 - 19	  	APPENDIX 2D
DELIVERY CONDITIONS	

redelivery inspection, provided, however, panels that were previously opened, during the redelivery check accomplished by the Prior Operator, shall not be required to be opened again if Lessee was given an opportunity to inspect, but failed to inspect in such areas while such panels were previously open. All discrepancies discovered during such Acceptance Inspection (i) of the Aircraft, that exceed the Manufacturer’s Repair Manual allowable limits shall be permanently repaired by Lessor, and (ii) of the Aircraft Documents, to the extent such Aircraft Documents are not acceptable to Lessee, Lessor shall make reasonable efforts to correct such discrepancies at no cost to Lessee. Lessee shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein.
6.3. On the Delivery Date, Lessor shall deliver to Lessee all Aircraft Documents required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and all other Aircraft Documents in the possession of Lessor, and all Aircraft Documents required for the importation of the Aircraft into Mexico shall be in English. The Aircraft Documents required pursuant to this Section 6.3, shall include, to the extent then in Lessor’s possession, (i) Overhaul records with respect to each Engine, Landing Gear and the APU, (ii) Time Controlled Part traceability to Overhaul for then currently installed Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (iii) Life Limited Part traceability to manufacture (“zero time since new”) for then currently installed Life Limited Parts, (iv) inspection records (including records with respect to the accomplishment of Tasks, (v) records pertaining to evidence of compliance with AD’s, (vi) burn test certification records, (vii) log books, (viii) FAA, EASA and other Aeronautics Authority forms, (ix) records of compliance with Manufacturer’s service bulletins, (x) time logs showing Aircraft and Engine Flight Hours and Cycles on any given prior date, and (xi) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
6.4. All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessee’s representative shall operationally check all systems prior to the delivery of the Aircraft and all defects found shall be permanently repaired by Lessor, at Lessor’s expense, prior to delivery of the Aircraft.

	  	App 2 - 20	  	APPENDIX 2D
DELIVERY CONDITIONS	

Appendix 2E
to Aircraft Lease Agreement
RETURN CONDITIONS
 
1.	GENERAL	
1.1. The Aircraft shall (i) be airworthy and have been maintained and operated in accordance with the Lease with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by Lessee and (ii) comply with the Airframe Manufacturer’s original type certificate specifications, as revised up to the Termination Date, subject to any modifications installed during the Lease Term in compliance with the terms of this Lease.
1.2. The Aircraft exterior shall be washed and the interior shall be clean. The cockpit shall be repainted if required to eliminate existing stains, excessive wear, and inappropriate markings, and any required placards pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be replaced if unreadable, missing or not in the English language. Placards that are not required pursuant to the Airframe Manufacturer’s aircraft maintenance manual shall be removed upon Lessor’s request.
1.3. Each Engine, the Landing Gear and the APU, and all Parts and all other Items of Equipment as were installed on the Aircraft on the Delivery Date or pursuant to Article 12 hereto, or were delivered by Lessor to Lessee pursuant to the terms of the Lease shall be installed on the Aircraft and each such Item shall function in accordance with its intended use.
1.4. The Aircraft shall comply with all EASA AD’s which by their terms require compliance (without application or utilisation of any alternate method of compliance) on or before the date that is ninety (90) days after the Termination Date, notwithstanding any waiver, deviation or time extension obtained from the Aeronautics Authority, the Certificating Authority or any other aeronautics authority, or otherwise.
1.5. The Airframe, Engines, Landing Gear, APU, and Parts shall comply with all applicable EASA Requirements for passenger operation as a transport category commercial aircraft, including, without limitation, EU-OPS 1 and EASA Requirements, Part M.
1.6. The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water that exceeds allowable limits as set forth in the Manufacturer’s Repair Manual. Lessee shall repair any such leaks discovered.
1.7. Lessee shall obtain an export certificate of airworthiness for the Aircraft (or such other equivalent form if the same are not issued by the Aeronautics Authority for certification of airworthiness for aircraft to be exported from the State of Registration) to a country advised by Lessor. At Lessor’s request, and provided the same shall not impact Lessee’s use of the Aircraft throughout the Lease Term or otherwise result in a delay in redelivery, Lessee shall modify the Aircraft to comply with the requirements of the aeronautics authority of such country to which the Aircraft will be exported, provided, however, if such Lessor requested modifications are not also a requirement of the Certificating Authority and/or EASA, Lessor shall reimburse Lessee for Lessee’s Actual Cost incurred in performing such modifications.
1.8. All temporary repairs accomplished during the Lease Term, including repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair in accordance with the Airframe Manufacturer’s structural repair manual for the Aircraft) and those

	  	App 2 - 21	  	APPENDIX 2E
RETURN CONDITIONS	

requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair and all external doublers (scab patches) installed during the Lease Term shall be replaced with flush repairs, all in accordance with (x) the Manufacturer’s Repair Manual, or (y) Required Approval, provided, however, such replacement of a doubler shall not be required where installation of such doubler is (i) the only approved repair in accordance with the Manufacturer’s Repair Manual, (ii) the result of a Manufacturer recommended service bulletin accomplishment, or (iii) where a flush repair cannot be accomplished due to inaccessibility of the area. For the avoidance of doubt, to the extent that any repair accomplished prior to Delivery was accomplished using an external doubler (scab patch) and requires inspection during the Lease Term, the parties agree that any such repair work accomplished prior to Delivery will be deemed to constitute a permanent repair for purposes of this paragraph 1.8.
1.9. The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any open, deferred or placarded maintenance items or Watch Items, nor shall they have any Flight Hour, Cycle or calendar time extensions or waivers.
1.10. Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished to Lessee without charge and which have not been so installed together with appropriate instructions for installation provided with such kits.
1.11. The quantity of fuel on board the Aircraft at Return shall not be less than the quantity of fuel on board the Aircraft at Delivery.
1.12. On or prior to Return and on such later date as requested by Lessor, Lessee shall provide Lessor such excerpts from the Maintenance Program and/or general procedures manual as Lessor may reasonably request (i) in order to substantiate procedures followed by Lessee and/or documentation used by Lessee which are specific to the Maintenance Program, in connection with the Return of the Aircraft to Lessor, and (ii) to assist with the bridging of the Aircraft onto a maintenance program other than the Maintenance Program subsequent to the Return of the Aircraft to Lessor.
1.13. If the Manufacturer’s Repair Manuals for the Aircraft were customised for or by Lessee during the Lease Term, Lessee will, at Lessee’s cost and expense, cause the Airframe Manufacturer to restore the Manufacturer’s Repair Manuals, revised up to and including the most recent revisions issued by the Airframe Manufacturer, to the status as they were at Delivery (or to be re-customised to such other customisation as timely requested by Lessor, with Lessor to pay any incremental increase over the cost to restore the Manufacturer’s Repair Manuals to the customisation as at Delivery) on the basis of the Aircraft no longer being part of Lessee’s fleet of aircraft, and Lessee will return to Lessor with the Aircraft the Manufacturer’s Repair Manuals so revised and restored or re-customised (as the case may be). To the extent the same are not revised and restored as required herein, Lessee hereby grants Lessor a perpetual, worldwide, non-exclusive, fully paid license to use Lessee’s customised Manufacturer’s Repair Manuals for itself and to further sub-license the same to any other Person as Lessor deems necessary and reasonable in the circumstances, without payment or compensation to Lessee.
1.14. The Aircraft shall be in full compliance with the Manufacturer’s recommended corrosion prevention and control program and aging program for the Aircraft.
1.15. The Aircraft will:
(a) be capable of operating to and from runways narrower than forty-five (45) meters;

	  	App 2 - 22	  	APPENDIX 2E
RETURN CONDITIONS	

(b) be capable of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;
(c) possess both fuel and weight quantity indicators indicating kilograms;
(d) incorporate a EGPWS/TAWS system;
(e) possess a reinforced cockpit door; and
(f) be in compliance with all Manufacturers’ service bulletins designated by such Manufacturer as either ( x ) an Alert Service Bulletin or ( y ) a mandatory service bulletin.
1.16. The Messier-manufactured brakes that were installed on the Aircraft at Delivery shall be installed on the Aircraft at Return as contemplated in Section 1.3 of Appendix 2B to the Lease.
 
2.	PAINT	
The Aircraft fuselage including radome, wing to body fairings, wheel well doors, vertical stabilizer, and engine cowlings (if previously painted) shall be prepared for repainting by sanding or stripping the paint pursuant to the Airframe Manufacturer’s recommended procedures for painting of aircraft, and shall be repainted using a paint of a quality reasonably acceptable to Lessor, or as otherwise agreed by Lessor in writing, in a color scheme, including logo, as directed by Lessor, provided, however, (i) the Aircraft shall be painted white if Lessor is unable to supply the necessary patterns in sufficient time to permit completion of the painting of the color scheme and logo without causing a delay in the redelivery of the Aircraft and (ii) if painted in the color and logo as directed by Lessor, then Lessor shall reimburse Lessee for the incremental cost in excess of the cost Lessee would have incurred to paint the Aircraft in its own livery, and all such preparation and painting shall be in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft. Preparation for such repainting shall include restoration of aerodynamic sealer in areas requiring aerodynamic sealer due to deterioration or missing sealant. All required placards and markings shall be in the English language and shall be replaced if not in English, or if deteriorated.
 
3.	AIRFRAME	
Immediately prior to Return, the Aircraft shall have completed ( x ) a C-Check and will include the accomplishment of all Tasks (including all systems, zonal, structural and corrosion inspection Tasks) which will be due for accomplishment within (i) six thousand (6,000) Flight Hours, (ii) four thousand five hundred (4,500) Cycles and (iii) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clauses (i), (ii) and (iii) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated in the MPD during the Lease Term), and ( y ) a 6 Year HMV Check or a 12 Year HMV Check, if such 6 Year HMV Check or 12 Year HMV Check would otherwise require accomplishment within (iv) six thousand (6,000) Flight Hours, (v) four thousand five hundred (4,500) Cycles and (vi) twenty (20) calendar months following the Scheduled Termination Date, each of the Tasks applicable to sub-clause (y) herein based upon the MPD interval for each such Task as was in effect on the Delivery Date and as subsequently escalated during the Lease Term (such checks being hereinafter referred to as the “ Final Check ”). The Aircraft shall not have been operated in revenue service since completion of the Final Check. The Final Check shall be performed by an Approved Maintenance Organisation approved by Lessor. Lessee shall give Lessor not less than ten (10) Business Days’ prior written notice of the commencement date of such Final Check. The Aircraft shall be weighed during such Final Check.

	  	App 2 - 23	  	APPENDIX 2E
RETURN CONDITIONS	

4.	INTERIOR	
4.1. The Aircraft shall be in the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) at Lessor’s option, (i) as when such Aircraft was originally delivered to Lessee hereunder, (ii) as subsequently provided or paid for by Lessor, or (iii) as otherwise set forth in this Lease or as otherwise agreed between the parties.
4.2. Cockpit windows shall not have any crazing or delamination, nor shall the cockpit windows have any other defects that exceed allowable limits set forth in the Manufacturer’s Repair Manual.
4.3. Passenger compartment windows shall have no visible crazing.
4.4. All equipment and furnishings in the interior of the Aircraft that are defective, damaged, or excessively worn shall be repaired in accordance with the Manufacturer’s recommended repair procedures, or replaced by Lessee.
 
5.	ENGINES, APU AND LANDING GEAR	
5.1. Prior to Return and following the redelivery flight for the Aircraft, Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine, and combustion sections of each Engine and the APU, to be performed by Lessor’s representative or, at Lessor’s expense, an agency selected by Lessor. All defects discovered as a result of such inspections, which exceed the Manufacturer’s allowable limits for an installed engine or auxiliary power unit shall be corrected at Lessee’s expense.
5.2.(a) In the event that an Engine Restoration is performed on an Engine, such Engine shall have accumulated no more than ten thousand five hundred (10,500) Flight Hours since completion of its most recent Engine Restoration.
(b) Each Engine Life Limited Part shall have a minimum of four thousand five hundred (4,500) Cycles (and, if applicable, equivalent Flight Hours and calendar time, based upon the actual average utilisation and Flight Hour to Cycle ratio of the Engine) remaining to the Engine Manufacturer’s then-published life limit for each such Engine Life Limited Part.
5.3. Each Engine shall be capable of developing full rated take-off power adjusted for the highest ambient outside air temperature for full rated take-off thrust without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed, etc.) as per the Manufacturer’s Repair Manual for an installed engine. A full take-off power engine run-up (high power assurance test) shall be performed in the presence of Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with Chapter 71-00-00 of the Airframe Manufacturer’s maintenance manual, or other comparable test (as agreed to by Lessor and Lessee), using temperature corrected charts in order to demonstrate that the Engine will be capable of reaching full take-off power at an outside air temperature of thirty degrees Celsius (30° C.). Lessee shall be responsible, at its expense, for correcting any deficiencies which exceed or are outside of the Airframe Manufacturer’s Repair Manual allowable limits for an installed engine.
5.4. The APU shall be in serviceable condition with no discrepancies that exceed maintenance manual allowable limits.

	  	App 2 - 24	  	APPENDIX 2E
RETURN CONDITIONS	

5.5. Each Landing Gear shall have remaining to its next due Overhaul a minimum of (i) forty (40) months, and (ii) six thousand (6,000) Cycles, and (iii) if applicable, equivalent Flight Hours, determined by the Flight Hour to Cycle ratio operated by the Aircraft during the twelve (12) month period immediately prior to the earlier to occur of the Scheduled Termination Date or the Termination Date, based upon the landing gear overhaul interval set forth in the MPD.
 
6.	INSPECTION	
6.1. Immediately prior to Return, Lessee shall perform a redelivery acceptance flight of the Aircraft with Lessor’s representatives on board (subject to any limitation imposed by either Lessee’s insurance or the Aeronautics Authority with respect to the number of Lessor’s representatives permitted to be on board during such redelivery acceptance flight), using the Airframe Manufacturer’s recommended acceptance flight procedures, or such other procedures acceptable to Lessor and Lessee. Upon request of Lessor, Lessee shall permit representatives of the next subsequent lessee or purchaser of the Aircraft to be on board during such redelivery acceptance flight as observers, with one such observer to be permitted to occupy the cockpit jump seat during the entire flight. Such redelivery acceptance flight shall be of a sufficient duration to complete all such acceptance flight procedures. Lessor shall ensure Lessee’s representative has observed each discrepancy found. Immediately following the redelivery acceptance flight, each such discrepancy shall be listed in writing and signed by the representatives of both Lessee and Lessor. To the extent any such discrepancy exceeds or is outside of the Airframe Manufacturer’s maintenance manual allowable limits, Lessee shall correct such discrepancy. Lessee shall have no obligation to pay the cost of correcting any discrepancies discovered during such redelivery acceptance flight which were not acknowledged in writing by its representative by its representative. Lessor shall reimburse Lessee at Lessee’s Actual Cost for the fuel consumed during such redelivery acceptance flight and Lessee shall be responsible for all other expenses associated with such flight and shall furnish the necessary permits and crews.
6.2. Lessor shall inspect the Aircraft, including the Aircraft Documents, (the “ Final Inspection ”) prior to the Termination Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include the opening or removal of panels as reasonably required by Lessor, and access to all compartments and bays. All discrepancies discovered during such Final Inspection (a) of the Aircraft that exceed the Manufacturer’s Repair Manual allowable limits, or that are not pursuant to the terms of this Lease, shall be permanently repaired by Lessee and (b) of the Aircraft Documents, to the extent that such Aircraft Documents are missing or incomplete, shall be corrected at Lessee’s expense. Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft and the Aircraft Documents comply with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by Lessor and Lessee but which shall be no later than thirty (30) days prior to the Scheduled Termination Date. All Aircraft Documents shall be prepared by Lessee prior to the commencement of the Final Inspection of such Aircraft Documents by Lessor and shall be complete and made available to Lessor at the time of commencement of the Final Inspection of such Aircraft Documents by Lessor. Any Aircraft Documents generated during the period following commencement of such Final Inspection of the Aircraft Documents shall be delivered to Lessor for inspection as promptly as possible, but in any event prior to Return.
6.3. On the Termination Date, Lessee shall deliver to Lessor all Aircraft Documents (a) delivered to Lessee with respect to the Delivery of the Aircraft to Lessee and (b) required by the EASA for issuance of a certificate of airworthiness and airworthiness review certificate and (c) to the extent not provided in the preceding clauses (a) and (b), all other Aircraft Documents applicable to the Aircraft with respect to any maintenance, inspections, repairs and modifications accomplished during the Lease Term. The Aircraft Documents required pursuant to this Section 6.3 herein, shall include:
(i) with respect to clause (a), the most recent revision issued by the respective Manufacturer for the Manufacturer’s Repair Manuals and in the same format as on the Delivery Date;

	  	App 2 - 25	  	APPENDIX 2E
RETURN CONDITIONS	

(ii) with respect to clause (b), (1) Tasks, repairs, and modifications accomplished during the Lease Term and (2) Time Controlled Parts and other Items installed during the Lease Term and then currently installed, as a minimum, (A) Overhaul records with respect to each Engine, Landing Gear and the APU, (B) traceability to Overhaul for Time Controlled Parts subject to an Overhaul interval pursuant to the MPD, and teardown reports for such Time Controlled Parts (except to the extent that the description of the work accomplished can be determined from other documentation), (C) Life Limited Part traceability to manufacture (“zero time since new”) for LLPs then installed on the Airframe or either Engine, (D) FAA Form 8130-3 or EASA Form One, or any successor thereto, (E) records of modifications and repairs, (F) records of compliance with Manufacturer’s service bulletins, (G) documentation of Required Approvals (including applicable supplemental type certificates) required pursuant to this Lease, and in addition to such Required Approvals, documentation of Aeronautics Authority and Certificating Authority approval, (H) inspection records (including records with respect to the accomplishment of Tasks), (I) records pertaining to evidence of compliance with AD’s, and (J) burn test certification records for interior Items;
(iii) with respect to clause (c), to the extent then in Lessee’s possession, (A) log books, (B) FAA, EASA and other Aeronautics Authority forms not included in paragraph (ii) above, (C) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date during the Lease Term, and (D) all other documentation pertaining to the Aircraft, including the Engines, the APU, the Landing Gear and Parts.
Any discrepancies found in the Aircraft Documents shall be corrected, and any missing Aircraft Documents shall be reconstructed by Lessee at Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents of maintenance, inspection, modification, and Overhauls accomplished during the Lease Term shall be in the English language. In the event that any Aircraft Documents are not provided to Lessor, or are not in the English language, the Aircraft shall be deemed not to meet the return conditions of this Appendix 2E and of Article 22 of the Lease. If Lessee subscribes to Manufacturer’s on-line data access services, Lessee must nonetheless return the Manufacturer’s Repair Manuals with all current revisions provided by Manufacturer in a format acceptable to Lessor.
6.4. All aircraft and engine systems (including those in galleys, passenger compartments and cargo compartments) shall be fully operational for their intended functions. Lessor’s representative shall operationally check all systems prior to the return of the Aircraft and all defects found shall be permanently repaired by Lessee, at Lessee’s expense, prior to return of the Aircraft.

	  	App 2 - 26	  	APPENDIX 2E
RETURN CONDITIONS	

Appendix 3
to Aircraft Lease Agreement
[NOTE: THE TERMS OF THIS APPENDIX 3 ARE CONFIDENTIAL AND CONTAIN COMMERCIALLY SENSITIVE INFORMATION; THIS APPENDIX 3 MUST BE REMOVED FROM ANY PUBLIC FILING OF THIS LEASE]
ACCEPTANCE CERTIFICATE
(MSN 3317)
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”) hereby acknowledges that on this              day of             20    , Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) did deliver for inspection and acceptance by Lessee under the Aircraft Lease Agreement made between Lessor and Lessee dated as of 17 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”) the Aircraft, as described below, together with all Aircraft Documents applicable thereto, in accordance with the Lease. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.
 
1.	Aircraft Details	
 
 	(a)	Airframe	

	  	Aircraft Model:	 	Airbus A319-132	  		  		
					
	  	Manufacturer’s Serial Number:	 	3317	  		  		
					
	  	Certified Weights:	 	Max Take-off:	  	 	  		
	  		 	Max Zero Fuel:	  	 	  		
	  		 	Max Landing:	  	 	  		
	  		 	Max Taxi:	  	 	  		
	  		 	Operating Empty:	  	 	  		
Airframe Maintenance Status :
Total Flight Hours:                     
Total Cycles:                       
Total Flight Hours Since Last 6 Year HMV Check :                      
Total Cycles Since Last 6 Year HMV Check :                      
Date Last 6 Year HMV Check Accomplished :                     
Total Flight Hours Since Last 12 Year HMV Check :                      
Total Cycles Since Last 12 Year HMV Check :                      
Date Last 12 Year HMV Check Accomplished :                     
Total Flight Hours Since Last C-Check :                      
Total Cycles Since Last C-Check :                      
Date Last C-Check Accomplished :                     

	  	App 3 - 1	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

(b)	Engines (Installed)	

	    	Engine Type:	 	IAE V2524-A5	 		
				
	    	Manufacturer’s Serial Numbers:	 	  	 	and	

				
	    	Maximum Takeoff Thrust Rating:	 	 	 	lbs.	
Engines Maintenance Status:
Position 1
ESN :                      
Total Flight Hours :                      
Total Cycles :                      
Total Flight Hours Since Last Engine Restoration :                      
Total Cycles Since Last Engine Restoration :                      
Date of Last Engine Restoration :                     
Position 2
ESN :                      
Total Flight Hours :                      
Total Cycles :                      
Total Flight Hours Since Last Engine Restoration :                      
Total Cycles Since Last Engine Restoration :                      
Date of Last Engine Restoration :                     
 
(c)	APU (Installed)	
APU Type                                                               
Manufacturer’s Serial Number :                         
APU Maintenance Status:
Total APU Hours:                      
Total APU Cycles :                      
Total APU Hours Since Last Overhaul :                      
Total APU Cycles Since Last Overhaul :                      
Date of Last Overhaul :                     
 
(d)	Landing Gear (Installed)	

	 		 		    	Manufacturer’s Serial	    	Left Main:	  	 	  		  		
	 		 		    	Numbers:	    	Right Main:	  	 	  		  		
	 		 		    		    	Nose:	  	 	  		  		

	  	App 3 - 2	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

Landing Gear Maintenance Status : 
             Left Main
             Total Flight Hours :                      
             Total Cycles :                      
             Total Flight Hours Since Last Overhaul :                      
             Total Cycles Since Last Overhaul :                      
             Date of Last Overhaul :                      
             Right Main
             Total Flight Hours :                      
             Total Cycles :                      
             Total Flight Hours Since Last Overhaul :                      
             Total Cycles Since Last Overhaul :                      
             Date of Last Overhaul :                      
             Nose
             Total Flight Hours :                      
             Total Cycles :                      
             Total Flight Hours Since Last Overhaul :                      
             Total Cycles Since Last Overhaul :                      
             Date of Last Overhaul :                      
 
 	(e)	Interior Configuration	

	 		 	Seating	 	 	 		 		
						
	 		 	Lavatories	 	 	 		 		
						
	 		 	Galleys	 	 	 		 		
						
	 		 	Passenger Service Units	 	 	 		 		
						
	 		 	PSIU	 	 	 		 		
 
 	(f)	Aircraft Documents; Aircraft Manuals; Hard Time Components; Avionics; Loose Equipment Inventory	
As identified in Attachment 1 to this Acceptance Certificate.
 
 	(g)	Fuel on Board provided at Lessor’s cost :              kgs.	
 
2.	Rent Payment Date :             	

	  	App 3 - 3	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

3.	Acceptance for Delivery	
(a) Lessee hereby confirms to Lessor on                      , 20      at                      GMT at                      ,                      that the above described Aircraft is in accordance with the specifications, terms and conditions for Delivery set forth in the Lease, is satisfactory in all respects and is in the condition required for Delivery under the Lease.
(b) The Scheduled Termination Date is                      20      *.
 
 	*	NOTE : This stated date is provided for the convenience of the parties only and the provisions of Article 2 of, and Appendix 2A to, the Lease shall be controlling.	
(c) Lessee confirms that the Aircraft has been examined by its duly appointed and authorised representatives and the same conforms to the information set forth above.
(d) To Lessee’s knowledge, (i) no Default or Event of Default has occurred and is continuing, (ii) and Lessee has no claims, offsets, deductions, set-offs or defenses of any kind or nature in connection with the Lease.
(e) The execution and delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes, as between Lessee and Lessor, conclusive proof that the Aircraft is delivered in accordance with the description set forth in and in the condition required by the Lease, (iii) Lessee hereby expressly waives any right it may have to revoke acceptance of the Aircraft pursuant hereto for any reason, notwithstanding any nonconformity, discovered, difficult of discovery, or undiscovered, on the date hereof, and (iv) Lessee hereby unconditionally and irrevocably waives its right to revoke acceptance of Delivery of any Item of Equipment.
 
4.	Governing Law	
THIS ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	  	App 3 - 4	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

IN WITNESS WHEREOF, this Acceptance Certificate has been executed and delivered this                      day of                      20    .

CONCESIONARIA VUELA COMPAÑÍA de AVIACIÓN, S.A.P.I. de C.V. (d/b/a VOLARIS)	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	

	  	App 3 - 5	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

Attachment 1 to Acceptance Certificate
Delivery Inventory
Aircraft Documents
1.             
2.             
.
.
.
Aircraft Manuals
1.             
2.             
.
.
.
Loose Equipment
1.             
2.             
.
.
.
Avionics Inventory
1.             
2.             
.
.
.
Hard Time Components Inventory
1.             
2.             
.
.
.

	  	App 3 - 6	  	APPENDIX 3
ACCEPTANCE CERTIFICATE	

Appendix 4
to Aircraft Lease Agreement
LEASE SUPPLEMENT
(MSN 3317)
LEASE SUPPLEMENT dated as of                     , 20    , (this “ Lease Supplement ”), between WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED, as lessor (“ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. ( D / B / A VOLARIS), as lessee (“ Lessee ”).
Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of 17 November 2010, (as amended, supplemented, novated and/or assigned, the “ Lease ”) and the defined terms therein being hereinafter used with the same meaning. The Lease provides for the execution and delivery of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof.
The Lease and this Lease Supplement relate to the Aircraft as more precisely described below and in the Acceptance Certificate. A counterpart of the Lease is attached hereto and shall be filed together with this Lease Supplement with the Aeronautics Authority.
In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under and pursuant to the Lease the Aircraft described below, together with the Aircraft Documents described in the Lease (the “ Delivered Aircraft ”):

Aircraft Model:	  	Airbus A319-132	
		
Manufacturer’s Serial Number:	  	3317	
		
Installed Engines:	  	Two (2) IAE V2524-A5 Engines	
		
Manufacturer’s Serial Numbers:    	  	___________________ and
___________________	
		
Mexican Registration Mark:	  	___________________	
2. The Delivery Date of the Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof.
3. By execution and delivery of this Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term subject to the Lease.

	  	App 4 - 1	  	APPENDIX 4
LEASE SUPPLEMENT	

4. The amount of Basic Rent for the Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.
5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of the Lease, (ii) the Aircraft is insured as required by the Lease, (iii) the representations and warranties of Lessee referred to in Article 9 of the Lease are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease, and (v) the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Lease.
6. THIS LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7. This Lease Supplement may be executed simultaneously in two or more counterparts and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Lease Supplement; provided, that to the extent, if any, that this Lease Supplement constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the original executed counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Security Trustee under and as defined in the Security Trust Agreement.
8. This Lease Supplement supplements and forms a part of the Lease. The Lease and all Operative Documents, as supplemented hereby, are hereby ratified, approved and confirmed in all respects.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

	  	App 4 - 2	  	APPENDIX 4
LEASE SUPPLEMENT	

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	 		  	WILMINGTON TRUST SP SERVICES (DUBLIN)
LIMITED	
Lessee	 		  	Lessor	
			
By:                                                                                                    	 		  	By:                                                                                                	
			
Name:                                                                                               	 		  	Name:                                                                                          	
			
Title:                                                                                                 	 		  	Title:                                                                                            	
			
By:                                                                                                    	 		  		
			
Name:                                                                                               	 		  		
			
Title:                                                                                                 	 		  		
[MSN 3317]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

	  	App 4 - 3	  	APPENDIX 4
LEASE SUPPLEMENT	

CHATTEL PAPER ORIGINAL
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S A P I. DE C.V. (D/B/A VOLARIS)	 		  	WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED	
Lessee	 		  	Lessor	
			
By:                                                                                                  	 		  	By:                                                                                             	
			
Name:                                                                                            	 		  	Name:                                                                                        	
			
Title:                                                                                               	 		  	Title:                                                                                          	
			
By:                                                                                                  	 		  		
			
Name:                                                                                            	 		  		
			
Title:                                                                                               	 		  		
[MSN 3317]
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE SECURITY TRUSTEE UNDER AND AS DEFINED IN THE SECURITY TRUST AGREEMENT.

SECURITY TRUSTEE RECEIPT	
	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Security Trustee	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	
	
By:                                                                                                   	
	
Name:                                                                                             	
	
Title:                                                                                               	

	  	App 4 - 4	  	APPENDIX 4
LEASE SUPPLEMENT	

Appendix 5
to Aircraft Lease Agreement
[RESERVED]

	  	App 5 - 1	  	APPENDIX 5
[RESERVED]	

Appendix 6A
to Aircraft Lease Agreement
LESSOR’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 3317
Lease Execution Date: 17 November 2010
Scheduled Delivery Date: *****

Item
No.	  	Description	  	Date Due	  	Status	
				
1.	  	Chattel Paper Original of Lease (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Lease Execution Date	  		
				
2.	  	Lease Agreement, with Lessee’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
3.	  	Guarantee, with Guarantor’s signatures ratified before a notary public	  	Lease Execution Date	  		
				
4.	  	Opinion of Lessee’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
5.	  	Opinion of Guarantor’s counsel as of the Lease Execution Date in form and substance reasonably satisfactory to Lessor	  	Lease Execution Date	  		
				
6.	  	Powers of Attorney evidencing the appointment of Lessee’s and Guarantor’s Agent for Service of Process pursuant to Section 26.3 of the Lease and Section 15 of the Guarantee, respectively, together with Powers of Attorney evidencing such appointment, duly notarised under and pursuant to Mexican Law	  	Lease Execution Date	  		
				
7.	  	Security Deposit installment of ***** due under Appendix 2B	  	One (1) Business Day after Lease Execution	  		
				
8.	  	Written evidence of company action authorising Lessee’s lease of the Aircraft and execution, delivery and performance of the Lease	  	Seven (7) Business Days after Lease Execution	  		
				
9.	  	Written evidence of company action authorising Guarantor’s execution, delivery and performance of the Guarantee	  	Seven (7) Business Days after Lease Execution	  		
				
10.	  	Incumbency Certificate of person or persons authorised to execute the Lease and related Operative Documents on behalf of Lessee	  	Seven (7) Business Days after Lease Execution	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6 - 1	  	APPENDIX 6
CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
				
11.	  	Incumbency Certificate of person or persons authorised to execute the Guarantee on behalf of Guarantor	  	Seven (7) Business Days after Lease Execution	  		
				
12.	  	Pledge Agreement as required under Sections 4.2 and 13.3(a)(i)	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
13.	  	Such financial information concerning each of Lessee and Guarantor and other documents and matters incident to the foregoing as Lessor may reasonably request, all in a form reasonably satisfactory to Lessor	  	Ten (10) Business Days prior to the Scheduled Delivery Date	  		
				
14.	  	Power of Attorney evidencing the authority of Lessee’s representatives designated to accept delivery of the Aircraft and execute the Lease Supplement and Acceptance Certificate on behalf of Lessee at Delivery, duly notarised under and pursuant to Mexican Law	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
15.	  	Letter of Undertaking executed by independent aircraft insurance brokers and, if applicable, reinsurance brokers, each acceptable to Lessor, together with certificates of insurance and, if applicable, reinsurance, evidencing the insurances required to be maintained by Lessee under the Lease	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
16.	  	Application for Registration of the Aircraft with the DGAC duly executed by Lessee, together with the Lease and all other relevant Operative Documents to be recorded thereunder and Spanish translations thereof, certified by a court-approved translator	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
17.	  	Evidence of Lessee having registered as a Transacting User Entity (“TUE”) with the IR and provision of the DGAC access codes necessary in order to complete the appropriate IR registrations. In connection with the foregoing, Lessor shall cooperate with Lessee to obtain the DGAC access codes and shall provide Lessee with such documents as Lessee may reasonably request in connection with the foregoing.	  	Five (5) Business Days prior to the Scheduled Delivery Date	  		
				
18.	  	Security Deposit balance payment of ***** due under Appendix 2B	  	One (1) Business Day prior to the Scheduled Delivery Date	  		
				
19.	  	Lessee Acknowledgment of Security Assignment	  	Delivery Date	  		
				
20.	  	Acceptance Certificate	  	Delivery Date	  		
				
21.	  	Chattel Paper Original of Lease Supplement (RECEIPT UNSIGNED AND DELIVERED TO SECURITY TRUSTEE WITHIN 10 DAYS OF EXECUTION)	  	Delivery Date	  		
				
22.	  	Lease Supplement, with Lessee’s signatures ratified before a notary public	  	Delivery Date	  		
				
23.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / Greek Aviation Authority	  	Delivery Date	  		
				
24.	  	Copy of Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority	  	Delivery Date	  		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

	  	App 6 - 2	  	APPENDIX 6
CONDITIONS PRECEDENT	

							
Item
No.	  	Description	  	Date Due	  	Status	
				
25.	  	Copy of provisional Certificate of Registration for the Aircraft	  	Delivery Date	  		
				
26.	  	Evidence of Registration of the Aircraft, the Lease and related interests with the IR	  	Delivery Date	  		
				
27.	  	An opinion in a form acceptable to Lessor from Lessor’s special counsel in the State of Registration confirming, among other things, the due and proper registration of the Aircraft in the State of Registration and with the IR.	  	Delivery Date	  		
				
28.	  	An irrevocable power of attorney executed by Lessee in a form prescribed by Lessor, appointing Lessor or any other Person selected by Lessor as attorney-in-fact for Lessee to take all necessary actions on behalf of Lessee to obtain possession of and to remove the Aircraft from the jurisdiction of the State of Registration and from any other jurisdiction where the Aircraft may be located and/or registered and to de-register the Aircraft from the Register upon the cancellation, termination, or expiration of this Lease	  	Delivery Date	  		
				
29.	  	A duly executed Irrevocable De-Registration and Export Request Authorisation ( IDERA ) for filing with the IR	  	Delivery Date	  		
				
30.	  	Letters addressed (1) to air traffic control authority in the State of Registration, (2) in blank to relevant air traffic control authorities and airport authorities where Lessee operates or intends to operate the Aircraft and (3) to Eurocontrol (if the Aircraft is operated to or over Europe), authorising the recipient to issue to Lessor, upon Lessor’s request made from time to time, a statement of account of all sums due by Lessee to the authority with respect to the Aircraft and which letters shall survive the cancellation, termination and expiration of the Lease	  	Delivery Date	  		
				
31.	  	A certificate of an officer of Lessee regarding use of aircraft, in form and substance satisfactory to Lessor, and/or an Irish Revenue Form VAT 60B (or applicable successor form) with respect to the Lease, as requested by Lessor, to enable Lessor to comply with applicable Laws relating to VAT	  	Delivery Date	  		
				
32.	  	Follow up opinion of Lessee’s counsel in form and substance reasonably acceptable to Lessor	  	Delivery Date	  		
				
33.	  	Such other certificates, documents, opinions and agreements relating to the transactions contemplated by or related to this Lease and the other Operative Documents, as may be necessary or reasonably requested by Lessor	  	Delivery Date	  		
				
34.	  	Copy of permanent Certificate of Registration for the Aircraft showing due registration in the name of Lessor as owner and lessor and Lessee as lessee	  	Ninety (90) days following the Delivery Date	  		

	  	App 6 - 3	  	APPENDIX 6
CONDITIONS PRECEDENT	

Appendix 6B
to Aircraft Lease Agreement
LESSEE’S CONDITIONS PRECEDENT / POST-DELIVERY ITEMS
Airbus A319-132
MSN 3317
Lease Execution Date: 17 November 2010
Scheduled Delivery Date: *****

Item
No.	  	Description	  	Date Due	    	Status	
				
1.	  	Lease Agreement	  	Lease Execution Date	    		
				
2.	  	Power of Attorney evidencing the authority of Lessor’s representatives designated to execute the Lease and the Lease Supplement on behalf of Lessor	  	Lease Execution Date	    		
				
3.	  	Lease Supplement	  	Delivery Date	    		
				
4.	  	Certificate of Airworthiness for Export for the Aircraft issued by the EASA / Greek Aviation Authority	  	Delivery Date	    		
				
5.	  	Quiet Enjoyment Letter from Security Trustee	  	Delivery Date	    		
				
6.	  	Quiet Enjoyment Letter from Owner Participant	  	Delivery Date	    		
				
7.	  	Airframe Assignment of Warranties	  	Delivery Date	    		
				
8.	  	Engine Assignment of Warranties	  	Delivery Date	    		

	  	App 6 - 4	  	APPENDIX 6
CONDITIONS PRECEDENT	

Appendix 7
to Aircraft Lease Agreement
RETURN ACCEPTANCE CERTIFICATE
WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”) hereby acknowledges, pursuant to the Aircraft Lease Agreement made between Lessor and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS) (“ Lessee ”) dated as of 17 November 2010 (as amended, supplemented, novated and/or assigned, the “ Lease ”), that on this              day of 20__, at __:              GMT it has received from Lessee possession of the following Aircraft. Capitalised terms used but not defined herein shall have the meanings given such terms in the Lease.

 
											
1.	  	Aircraft Details	    		    		 		  		
						
	  	(a)             Airframe	    		    		 		  		
						
	  	                Aircraft Model:	    		    	Airbus A319-132	 		  		
						
	  	                Manufacturer’s Serial  Number:	    		    	3317	 		  		
						
	  	                Certified Weights:	    		    	Max Take-off:	 	                        	  		
	  		    		    	Max Zero Fuel:	 	                        	  		
	  		    		    	Max Landing:	 	                        	  		
	  		    		    	Max Taxi:	 	                        	  		
	  		    		    	Operating Empty:	 	                        	  		
Airframe Maintenance Status :
Total Flight Hours:                                 
Total Cycles:                                 
Total Flight Hours Since Last 6 Year HMV Check:                                 
Total Cycles Since Last 6 Year HMV Check:                                 
Date Last 6 Year HMV Check Accomplished:                                 
Total Flight Hours Since Last 12 Year HMV Check:                                 
Total Cycles Since Last 12 Year HMV Check:                                 
Date Last 12 Year HMV Check Accomplished:                                 
Total Flight Hours Since Last C-Check:                                 
Total Cycles Since Last C-Check:                                 
Date Last C-Check Accomplished:                                 

	  		    		    		 		 		  		
	  	(b)             Engines (Installed)	    		    		 		 		  		
							
	  	                Engine Type:	    		    	IAE V2524-A5	 		 		  		
							
	  	                Manufacturer’s Serial  Numbers:	    		    	                                     	 	and    	 		  		

 
					
	  	App 7 - 1	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Maximum Takeoff Thrust Rating:                      lbs.
Engines Maintenance Status:
Position 1
ESN :                      
Total Flight Hours :                      
Total Cycles :                      
Total Flight Hours Since Last Engine Restoration :                      
Total Cycles Since Last Engine Restoration :                      
Date of Last Engine Restoration :                      
Position 2
ESN :                      
Total Flight Hours :                      
Total Cycles :                      
Total Flight Hours Since Last Engine Restoration :                      
Total Cycles Since Last Engine Restoration :                      
Date of Last Engine Restoration :                      
 
(c)	APU (Installed)	

	 		 	APU Manufacturer & Model:	 	 	  		  		
						
	 		 	Manufacturer’s Serial Number:	 	 	  	and	  		
	 		 		 	 	  		  		
APU Maintenance Status : 
Total APU Hours :                      
Total APU Cycles :                      
Total APU Hours Since Last Overhaul :                      
Total APU Cycles Since Last Overhaul :                      
Date of Last Overhaul :                      
 
(d)	Landing Gear (Installed)	

	 		 	        Manufacturer’s Serial Numbers:	    	Left Main:                     	  		
	 		 		    	Right Main:                   	  		
	 		 		    	Nose:                             	  		
Landing Gear Maintenance Status : 
Left Main

	  	App 7 - 2	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

					
	  	Total Flight Hours:                     	  		
	  	Total Cycles:                     	  		
	  	Total Flight Hours Since Last Overhaul:                     	  		
	  	Total Cycles Since Last Overhaul:                     	  		
	  	Date of Last Overhaul:                                     	  		
		
Right Main	  		
			
	  	Total Flight Hours :                      	  		
			
	  	Total Cycles:                     	  		
			
	  	Total Flight Hours Since Last Overhaul:                     	  		
			
	  	Total Cycles Since Last Overhaul:                     	  		
			
	  	Date of Last Overhaul:                                     	  		
		
Nose	  		
			
	  	Total Flight Hours :                      	  		
			
	  	Total Cycles:                     	  		
			
	  	Total Flight Hours Since Last Overhaul:                     	  		
			
	  	Total Cycles Since Last Overhaul:                     	  		
			
	  	Date of Last Overhaul:                                     	  		

			
(e)	 	Interior Configuration	 		
			
	 	Seating	 	 	
			
	 	Lavatories	 	 	
			
	 	Galleys	 	 	
			
	 	Passenger Service Units	 	 	
			
	 	PSIU	 	 	
			
(f)	 	Aircraft Documents and Other Equipment	 		
		
	 	As described in Attachment 1 to this Return Acceptance Certificate.	
		
(g)	 	Fuel On Board :                                      kgs.	
 
2.	Maintenance Reserves (check one)	
                 There are no claims for reimbursement from the Maintenance Reserves outstanding and unpaid as of the date hereof.
or
                 Claims for reimbursement from the Maintenance Reserves are outstanding as of the date hereof and are itemised or otherwise described in Attachment [              ] hereto.

	  	App 7 - 3	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

3.	Return Acceptance	
The Aircraft and Aircraft Documents are hereby accepted by Lessor for return under the Lease subject to (i) the provisions of the Lease, and (ii) the correction by Lessee (or procurement by Lessee at Lessee’s cost) within      days following the date hereof of the discrepancies specified in Attachment 3 hereto.
 
4.	Termination of Lease	
Subject to the following paragraph, the Lease is hereby terminated without prejudice to Lessee’s continuing obligations and Lessor’s continuing rights under the Lease.
 
5.	Lessee’s Representations and Warranties	
Lessee represents and warrants that during the Lease Term all maintenance and repairs to the Aircraft and each Item of Equipment were performed in accordance with the requirements of the Lease.
 
6.	Governing Law	
THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance Certificate to be duly executed by their authorised representatives on the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)
 
Lessee	 		 	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED
 
Lessor	
					
By:	 	 	 		 	By:	 	 	
					
Name:	 	 	 		 	Name:	 	 	
					
Title:	 	 	 		 	Title:	 	 	
					
By:	 	 	 		 		 		
					
Name:	 	 	 		 		 		
					
Title:	 	 	 		 		 		

	  	App 7 - 4	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 1 to Return Acceptance Certificate
Aircraft Documents and Equipment Inventory
Aircraft Documents
 
 	1.	            	
 	2.	            	
 	.	    	
 	.	    	
 	.	    	
Aircraft Manuals
 
 	1.	            	
 	2.	            	
 	.	    	
 	.	    	
 	.	    	
Loose Equipment
 
 	1.	            	
 	2.	            	
 	.	    	
 	.	    	
 	.	    	
Avionics Inventory
 
 	1.	            	
 	2.	            	
 	.	    	
 	.	    	
 	.	    	
Hard Time Components Inventory
 
 	1.	            	
 	2.	            	
 	.	    	
 	.	    	
 	.	    	

	  	App 7 - 5	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 2 to Return Acceptance Certificate
Maintenance Reserve Claims Outstanding at Return
[ Write “None” if there are no claims outstanding ]

Type of Work	  	Service Provider	  	Invoice Amount	
			
—  	  	—  	  	—  	

	  	App 7 - 6	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Attachment 3 to Return Acceptance Certificate
Aircraft Discrepancies
[ Write “None” if there are no Aircraft Discrepancies ]

	  	App 7 - 7	  	APPENDIX 7
RETURN ACCEPTANCE CERTIFICATE	

Appendix 8
to Aircraft Lease Agreement
FORMS

Form 1	  	Form of Aircraft Utilisation Report	
Form 2	  	Maintenance Status Report	
Form 3	  	Form of Air Traffic Control and Airport Authorities Letter	
Form 4	  	Form of Lease Termination Agreement	
Form 5	  	Form of Recognition of Rights (Engines)	
Form 6	  	Form of Lessee Acknowledgment of Security Assignment	
Form 7	  	Form of Quiet Enjoyment Letter - Security Trustee	
Form 8	  	Form of Quiet Enjoyment Letter - Owner Participant	

	  	App 8 - 1	  	APPENDIX 8
FORMS	

Form 1
Form of Aircraft Utilisation Report
UTILISATION REPORT
Lessee: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris)
Date of Report:                      20     
Report Period:                      20      through                      20     
General Information

Aircraft Model: Airbus A319-132	  	Engine Type: IAE V2524-A5	
Airframe Serial Number: 3317	  	Lease Engine 1 Serial Number:                     	
Lease APU Serial Number:                     	  	Lease Engine 2 Serial Number:                     	
Lease Nose Landing Gear S/N:                     	  	Lease Left Main Gear S/N:                     	
	  	Lease Right Main Gear S/N:                     	
		
Installed 1 Engine S/N:                     	  	Installed 2 Engine S/N:                     	
Installed APU S/N:                     	  	Installed Nose Landing Gear S/N                     	
Installed Left Main Gear S/N:                     	  	Installed Right Main Gear S/N:                     	
Utilisation Information — Airframe

Airframe Flight Hours:                     	  	Airframe Cycles:                     	
Airframe Total FHSN:                     	  	Airframe Total CSN:                     	
	  	Airframe Status:                     	
Airframe Base:                     	  	                [In Service; Check; etc.]	
Utilisation Information — Engines
Lease Engine 1 — Serial Number

FH During Report Period:                     	  	Cycles During Report Period: ___________	
FH:Cycle Utilisation Ratio:      :1	  	Cycles Since New: ___________	
FH Since New:                     	  	Cycles Since Restoration: ___________	
EH Since Restoration:                     	  	Installed On MSN: ___________	
Airframe Position:                     	  	Airframe Reg Mark: ___________	
Airframe Owner (if not Owner):                                                                                                                         	
Removed From Service:                      (Date)	  	Current Location: ___________	
Reason for Removal:                                                                                                                                            	
Lease Engine 2 — Serial Number

FH During Report Period:                     	  	Cycles During Report Period:                     	
FH:Cycle Utilisation Ratio:      :1	  	Cycles Since New:                     	
FH Since New:                     	  	Cycles Since Restoration:                     	

	  	App 8 - 2	  	APPENDIX 8
FORMS	

			
FH Since Restoration:                     	  	Installed On MSN:                     	
Airframe Position:                     	  	Airframe Reg Mark:                     	
Airframe Owner (if not Owner):                                                                                                               	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                  	
Installed Engine 1 — Serial Number              (if not Lease Engine)

Engine Owner:                     	  	Airframe Position:                     	
Installed Engine 2 — Serial Number              (if not Lease Engine)

Engine Owner:                     	  	Airframe Position:                     	
Utilisation Information — APU
Lease APU — S/N             

APU Hours During Report Period:                     	  	APU Cycles During Report Period:                     	
APU Hours Since New:                     	  	APU Cycles Since New:                     	
APU Hours Since Overhaul:                     	  	APU Cycles Since Overhaul:                     	
Installed On MSN:                     	  	Removed From Service:                      (Date)	
Airframe Reg Mark:                     	  	Current Location:                     	
Airframe Owner (if not Owner):                                                                                                                       	
Reason for Removal:                                                                                                                                          	
Installed APU — Serial Number              (if not Lease APU)

APU Owner:                     	  		
Utilisation Information — Landing Gear
Lease Nose Landing Gear — S/N             

FH During Report Period:                     	  	Cycles During Report Period:                     	
FH Since New:                     	  	Cycles Since New:                     	
FH Since Overhaul:                     	  	Cycles Since Overhaul:                     	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                    	
Installed Nose Landing Gear — S/N (if not Lease Nose Landing Gear)

NLG Owner:                     	  		
Lease Left Main Landing Gear — S/N             

FH During Report Period:                     	  	Cycles During Report Period:                     	
FH Since New:                     	  	FH Since Restoration:                     	
Cycles Since New:                     	  	Cycles Since Restoration:                     	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                  	

	  	App 8 - 3	  	APPENDIX 8
FORMS	

Installed Left Main Landing Gear — S/N              (if not Lease Left Main Landing Gear)

Left MLG Owner:                     	  		
Lease Right Main Landing Gear — S/N             

FH During Report Period:                     	  	Cycles During Report Period:                     	
FH Since New:                     	  	FH Since Restoration:                     	
Cycles Since New:                     	  	Cycles Since Restoration:                     	
Removed From Service:                      (Date)	  	Current Location:                     	
Reason for Removal:                                                                                                                                                     	
Installed Right Main Landing Gear — S/N              (if not Lease Right Main Landing Gear)

Right MLG Owner:                     	  		

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	

(Name)	
 	
(Title)	
 	
(Date)	

	  	App 8 - 4	  	APPENDIX 8
FORMS	

Form 3
Maintenance Status Report — Required Information
 
1.	Airframe	
 
 	a.	Aircraft and Appliances Airworthiness Directive Summaries	
 
 	b.	Aircraft times and cycles log	
 
 	c.	Airframe Utilisation Report	
 
 	d.	Avionics Computerised Inventory	
 
 	e.	CPCP Summary as may be applicable	
 
 	f.	Dent and Damage Chart	
 
 	g.	Emergency Equipment Layout Drawing	
 
 	h.	Fire Blocking Certification	
 
 	i.	Maintenance last done next due task listing	
 
 	j.	Life Limited Parts Summary	
 
 	k.	Interior Layout configuration	
 
 	1.	Maintenance Program Summary and Time Interval Summary-Upon request	
 
 	m.	Service Bulletin, Engineering Orders, Major Repair and Alteration Summaries	
 
 	n.	Scheduled Maintenance Checks Tally Sheets	
 
 	o.	Time Controlled Components Summary	
 
2.	Engines	
 
 	a.	Airworthiness Directive Summaries	
 
 	b.	Last Shop visit/Engine Restoration Mini Package	
 
 	c.	Current Disk Sheet	
 
 	d.	Date, Flight Hours and Cycles of Engine at last Engine install (including Airframe Flight Hours and Cycles)	
 
 	e.	Service Bulletin Status / Engineering Orders and MOD Summaries	
 
 	f.	Trend Monitor Readout for the three (3) months prior to the report	
 
3.	Landing Gear	
 
 	a.	Aircraft date, Flight Hours and Cycles at installation	
 
 	b.	Landing Gear (each) Overhaul/restoration date, Flight Hours and Cycles	
 
 	c.	Life Limited Parts Summary	
 
 	d.	Last shop visit/Overhaul report	
 
4.	APU	
 
 	a.	Airworthiness Directive Summary	
 
 	b.	Last shop visit/Overhaul mini package report	
 
 	c.	Flight Hours and Cycles formula (as applicable if recording device not utilised)	
 
 	d.	Aircraft/ APU date, APU Hours and APU Cycles at installation	
 
 	e.	Life Limited Parts Summary	
 
 	f.	Service Bulletin Summary	

	  	App 8 - 5	  	APPENDIX 8
FORMS	

Form 3
Form of Air Traffic Control and Airport Authorities Letters
[LESSEE’S LETTERHEAD]
 
To:	All Relevant Air Traffic Control and Airport Authorities	
Mexican General Department of Civil Aeronautics* (Dirección General de Aeronáutica Civil)
Eurocontrol Organisation for the Safety of Air Navigation
Rue de la Fusée, 96
B-1130 Bruxelles
Belgium
* To be used with the DGAC or any other Mexican authority only following the occurrence and continuance of an Event of Default
 
Re:	Air Navigation / Airport Charges — Airbus A319-132 Aircraft with Manufacturer’s Serial Number 3317 and Mexican Registration Mark .XA-[    ] (the “ Aircraft ”)	
Ladies and Gentlemen,
We hereby confirm that Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (the “ Lessee ”) has entered into an Aircraft Lease Agreement with Wilmington Trust SP Services (Dublin) Limited (“ Lessor ”) dated as of 17 November 2010 (the “ Lease ”) related to the above-referenced Aircraft, pursuant to which CIT Aerospace International (“ CITAI ”) serves as servicer.
We wish to enable each of Lessor and CITAI to monitor the value of air navigation and other charges incurred by us in relation to the Aircraft.
We hereby irrevocably and unconditionally authorise you to release to Lessor and CITAI (or its duly authorised representatives) upon its request from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and to the extent the same might result in a lien upon the Aircraft, all other aircraft operated by Lessee.
This authorisation may only be revoked or amended by a written instruction signed by us, Lessor and CITAI.
Yours faithfully,

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 6	  	APPENDIX 8
FORMS	

			
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 7	  	APPENDIX 8
FORMS	

Form 4
Form of Lease Termination Agreement
LEASE TERMINATION
( MSN 3317 )
By execution hereof (this “ Lease Termination ”), the undersigned, WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED (“ Lessor ”), as lessor, and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS) (“ Lessee ”), as lessee, acknowledge and agree that the Lease Agreement defined and described on Exhibit A attached hereto, has by its terms expired or has otherwise been cancelled or terminated, and release the Equipment, which is also defined and described on Exhibit A attached hereto, from the terms and conditions of such Lease Agreement.
This Lease Termination is without prejudice to the surviving rights of the parties under the Lease Agreement and nothing in this Lease Termination shall relieve either party from its obligations under the Lease Agreement which are still unsatisfied and/or from any of its obligations under the Lease Agreement which may be due after the date of this Lease Termination.
This Lease Termination may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Dated this              day of              20      .

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	    	WILMINGTON TRUST SP SERVICES
(DUBLIN) LIMITED	
Lessee	 		    	Lessor	  		
				
By:	 	 	    	By:	  	 	
Name:	 	 	    	Name:	  	 	
Title:	 	 	    	Title:	  	 	
				
By:	 	 	    		  		
Name:	 	 	    		  		
Title:	 	 	    		  		

	  	App 8 - 8	  	APPENDIX 8	
	  		  	FORMS	

EXHIBIT A
The Equipment
[TO BE COMPLETED AT LEASE TERMINATION]
The Lease Agreement
[TO BE COMPLETED AT LEASE TERMINATION]

	  	App 8 - 9	  	APPENDIX 8	
	  		  	FORMS	

Form 5
Form of Recognition of Rights (Engines)
[ON THE LETTERHEAD OF THE OWNER/
LESSOR/SECURED PARTY OF THE AIRFRAME
ON WHICH THE ENGINE IS BEING INSTALLED]
[INSERT DATE]
[INSERT ADDRESS OF AIRCRAFT OWNER]
 
 	Re:	Acknowledgment of ownership of and waiver of lien interest in one (1)                                  	
 	 	Aircraft Engine bearing Manufacturer’s Serial Number                      (the “ Engine’ )	
Dear Sirs:
The undersigned,                                                   (“ Secured Party ”), is the legal and beneficial owner of one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number [              ] and [              ] registration mark [              ] (“ Secured Aircraft ”), which Secured Aircraft is on lease to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”). [NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S INTEREST AS NECESSARY]
We understand that, pursuant to an aircraft lease agreement dated as of 17 November 2010 (the “ Aircraft Lease ”) between Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee, as lessor (“ Lessor ”) and Lessee, you are the owner of and have leased one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3317 Mexican registration mark XA-[ ] to Lessee and which Aircraft Lease includes the lease of one (1) IAE V2524-A5 aircraft engine bearing manufacturer’s serial number [              ] (the “ Leased Engine ”). We have been advised by Lessee that it desires to install the Leased Engine on the Secured Aircraft. [NOTE: PROVIDE MODIFIED STATEMENT AND DEFINITIONS IF LESSOR IS NOT OWNER OF THE AIRCRAFT]
At the request of Lessee and for its benefit and the benefit of CIT, Secured Party hereby (i) acknowledges and agrees that CIT is the owner and lessor to Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that Secured Party has not acquired or claimed nor will it acquire or claim, and hereby waives, releases and renounces any right, title or interest in the Leased Engine by reason of the Leased Engine being installed on the Secured Aircraft at any time and that the foregoing shall apply notwithstanding any contrary laws of accession, or the like, which may from time to time be enacted or in effect in any jurisdiction where the Leased Engine and/or Secured Aircraft may be located, and the same are expressly waived by Secured Party hereby, (iii) agrees not to impede or interfere with the exercise by CIT of its rights and remedies to regain possession of the Leased Engine pursuant to the Aircraft Lease, (iv) agrees that the foregoing acknowledgments and agreements of Secured Party shall inure to the benefit of CIT’s successors and assigns, and (v) if requested by CIT, consents to and agrees to cooperate with CIT (at no cost to Secured Party) in connection with the filing of any notices and registrations, in form and substance reasonably satisfactory to Secured Party, of CIT’s interest in the Leased Engine with the applicable governmental authorities in the country of registration of the Secured Aircraft, the country of Lessee’s organisation and such other jurisdiction as CIT may deem appropriate and, if applicable, the International Registry of Mobile Assets organised pursuant to the Cape Town Convention.

	  	App 8 - 10	  	APPENDIX 8	
	  		  	FORMS	

THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Sincerely,

	  	App 8 - 11	  	APPENDIX 8	
	  		  	FORMS	

Form 6
Form of Lessee Acknowledgment of Security Assignment

From :	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) ( “ Lessee ”)	
		
To :	  	Deutsche Bank Trust Company Americas, as Security Trustee ( “ Security Trustee ” )	
		
	  	Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee ( “ Lessor ” )	
                 20     
Ladies and Gentlemen:
Reference is made to that certain Aircraft Lease Agreement dated as of 17 November 2010 (the “ Lease ”) entered into between Lessee a d Lessor with respect to one (1) Airbus model A319-132 aircraft bearing manufacturer’s serial number 3317. Any and all initially capitalised terms used herein shall have the meanings ascribed thereto in t e ease, unless specifically defined herein.
We acknowledge that pursuant to Section 25.6 of the Lease, Lessor has advised us that the intent and effect of the Security Assignment is to confer upon Security Trustee all rights, title and interest of Lessor under the Lease. In consideration of payment to us of ***** and the issuance to us of the Quiet Enjoyment Letters, receipt of which we hereby acknowledge, and subject to the provisions of such Quiet Enjoyment Letters, we hereby agree as follows:
 
 	1.	Subject to Section 2 below, to comply with the provisions of the Lease, specifically including, but not limited to Article 25.	
 
 	2.	If Security Trustee issues to us a notice (a “ Relevant Notice ”) that its rights as assignee under the Security Assignment have become exercisable we agree that we shall thereafter (a) accomplish, observe and comply with all our other undertakings and obligations under the Lease in favour and for the benefit of Security Trustee as if Security Trustee were named as lessor therein instead of Lessor; and (b) if Security Trustee so requests, enter into a lease with Security Trustee or its nominee, on the same terms (mutatis mutandis) as the Lease, provided that (i) no such new lease shall have the effect of releasing Lessor from any of its obligations to us under the Lease, and (ii) Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result from entering into such lease.	
 
 	3.	If Lessor is in breach of any of its obligations, express or implied, under the Lease, or if any event occurs which would permit us to terminate, cancel or surrender the Lease we will, without waiving any such breach or right after the 14 day period referenced below if such breach has not been cured or a new lease has not been entered into, (a) promptly after becoming aware of it, give Security Trustee notice of such breach or event, (b) accept as adequate remedy for any such breach performance by Security Trustee of such obligations within 14 days of our written notice to Security Trustee; and (c) subject to Security Trustee’s performance and satisfaction in full of such obligations, if the Security Trustee so requests, enter into a lease with Security Trustee on	

	  	App 8 - 12	  	APPENDIX 8
FORMS	

 	terms identical to the Lease, mutatis mutandis; provided, however, that Lessee shall not be responsible for any additional costs, expenses or charges, including but not limited to increased withholding or any other tax liability, which result on the date hereof from entering into such lease.	
 
 	4.	We agree that after issue by Security Trustee of any Relevant Notice, we shall not recognise the exercise by Lessor of any of its rights and powers under the Lease unless and until requested to do so by Security Trustee.	
 
 	5.	We agree that the Security Trustee shall have the benefits, rights and privileges of the indemnity provisions in Sections 18.1 and 21.1 of the Lease (without increasing the scope of such provisions) and agree that we are bound by the terms of such sections, as thought the same were set out herein in full, mutatis mutandis, provided, however, that no additional cost or expense shall result.	
 
 	6.	Other than as set forth in Section 25.6 of the Lease, no notice of assignment has been received by Lessee or, if Lessee has received any notice of assignment, such notice has been terminated.	
 
 	7.	This acknowledgment shall be governed by and construed in accordance with New York Law.	
Very truly yours,
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	
Title:	
		
By:	 	 	
Name:	
Title:	

	  	App 8 - 13	  	APPENDIX 8
FORMS	

Form 7
Form of Quiet Enjoyment Letter — Security Trustee

From:	 	Deutsche Bank Trust Company Americas, as Security Trustee (“ Security Trustee ”)	
		
To:	 	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)	
		
Dated:	 	[    ]	
		
Re:	 	Aircraft Lease Agreement dated as of 17 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee (“ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3317 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
Pursuant to that certain Security Trust Agreement dated as of December 11, 2008 among CIT Aviation Finance II Ltd., Lessor, the additional grantors referred to therein, and Security Trustee, Lessor has assigned to Security Trustee by way of security all of its rights, title and interest in and to the Lease and the proceeds thereof, including certain insurance proceeds.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us. We further confirm that if we have issued a Relevant Notice (as defined in the Lessee Acknowledgment) and we have succeeded to the interest of Lessor under the Lease, we shall thereafter honour, perform, or cause to be performed, and accomplish all of Lessor’s obligations to Lessee accruing thereafter under the Lease.	
 
 	2.	To the extent we receive any funds as Security Deposits and/or Maintenance Reserves, we will hold, apply, retain and return such amounts as provided in the Lease, and in exercising our rights under or in respect of the Lease, we shall be bound by the terms and conditions thereof.	
 
 	3.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	

	  	App 8 - 14	  	APPENDIX 8
FORMS	

 	4.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	5.	This letter shall be governed by and construed in accordance with New York Law.	
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but solely as Security Trustee

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

Agreed and Accepted	
	
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 15	  	APPENDIX 8
FORMS	

Form 8
Form of Quiet Enjoyment Letter — Owner Participant
From: CIT Aviation Finance II Limited (“ Owner Participant ”)
To: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [     ]
 
Re:	Aircraft Lease Agreement dated as of 17 November 2010 (as amended and supplemented, the “ Lease ”) between Lessee and Wilmington Trust SP Services (Dublin) Limited, not in its individual capacity but solely as trustee “ Lessor ”) pertaining to one (1) Airbus A319-132 aircraft bearing manufacturer’s serial number 3317 (as more particularly described in the Lease, the “ Aircraft ”)	
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
 
 	1.	We hereby covenant and undertake to Lessee that during the Lease Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any Person lawfully claiming by or through us.	
 
 	2.	The foregoing covenant and undertaking is not to be construed as restricting our rights to dispose of the Aircraft to such Persons and on such terms as we consider appropriate. However, if we exercise such rights during the Lease Term and provided that no Event of Default has occurred and is continuing, we will (subject to any requirements or restrictions imposed by applicable Law) dispose of the Aircraft expressly subject to the Lease and on the terms that the purchaser issues an undertaking to Lessee that it will not, and will not permit any person lawfully claiming by or thorough it, to interfere with the quiet possession and use of the Aircraft by Lessee throughout the remaining period of the Lease Term, so long as no Event of Default has occurred and is continuing.	
 
 	3.	The rights conferred by this letter are granted only to Lessee and do not extend to any assignee, successor, or sublessee of Lessee.	
 
 	4.	This letter shall be governed by and construed in accordance with New York Law.	

	  	App 8 - 16	  	APPENDIX 8
FORMS	

Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
CIT AVIATION FINANCE II LIMITED

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

Agreed and Accepted	
	
CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		

	  	App 8 - 17	  	APPENDIX 8
FORMS	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.30
AIRCRAFT LEASE AGREEMENT
Dated as of April 7, 2011
BETWEEN
MASL IRELAND (22) LIMITED,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee,

Concerning: One Airbus A320-200 Aircraft, MSN 2204 and
Two IAE V2527-A5 Turbofan Engines

THIS AIRCRAFT LEASE AGREEMENT (THIS “LEASE”) HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO TRANSFER OR ASSIGNMENT OF THIS LEASE OR ANY INTEREST HEREIN MAY BE ACCOMPLISHED, AND NO SECURITY INTEREST HEREIN MAY BE CREATED OR PERFECTED, THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN THE ORIGINAL COUNTERPART IDENTIFIED AS THE “CHATTEL PAPER ORIGINAL” BY A RECEIPT THEREFOR EXECUTED BY LESSOR ON OR IMMEDIATELY FOLLOWING THE SIGNATURE PAGE HERETO.

Table of Contents

1.      DEFINITIONS, CONSTRUCTION AND INTERPRETATION	  	 	1	  	
		
2.      DELIVERY AND ACCEPTANCE	  	 	1	  	
		
3.      TERM	  	 	2	  	
		
4.      RENT AND OTHER PAYMENTS	  	 	2	  	
		
5.      REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE PARTIES	  	 	5	  	
		
6.      POSSESSION; USE; LAWFUL INSURED OPERATIONS; MAINTENANCE; INSIGNIA	  	 	14	  	
		
7.      INSPECTION	  	 	18	  	
		
8.      REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND ADDITIONS	  	 	19	  	
		
9.      TAXES	  	 	21	  	
		
10.    EVENTS OF LOSS	  	 	25	  	
		
11.    INSURANCES	  	 	26	  	
		
12.    GENERAL INDEMNIFICATION	  	 	30	  	
		
13.    LIENS	  	 	32	  	
		
14.    RETURN OF AIRCRAFT	  	 	32	  	
		
15.    EVENTS OF DEFAULT	  	 	32	  	
		
16.    RIGHTS AND REMEDIES	  	 	35	  	
		
17.    MISCELLANEOUS	  	 	40	  	
		
Schedule 1 Definitions and Construction	  	 	51	  	
		
Schedule 2 Conditions Precedent	  	 	64	  	
		
Schedule 3 Rent And Other Payments	  	 	67	  	
		
Schedule 4 Form of Certificate of Acceptance	  	 	74	  	
		
Schedule 5 Insurances	  	 	82	  	
		
Schedule 6 Delivery Condition and Redelivery Condition	  	 	85	  	
		
PART A Delivery Condition	  	 	85	  	
		
PART B Redelivery Condition	  	 	91	  	
		
Schedule 7 Form of Security Letter of Credit	  	 	98	  	
		
Schedule 8 Aircraft Records Standard	  	 	102	  	
		
Schedule 9 Post-Delivery Modifications	  	 	109	  	
		
Schedule 10 Form of Deregistration Power of Attorney	  	 	111	  	
		
Schedule 11 [Intentionally Omitted]	  	 	114	  	
		
Schedule 12 Lease Information	  	 	115	  	
		
Schedule 13 Form of Monthly Operating Report	  	 	117	  	

					
		
Schedule 14 Form of Redelivery Certificate	  	 	119	  	
		
Schedule 15 Financial and Other Confidential Information	  	 	130	  	
		
Schedule 16 Form of Lessee Acknowledgement	  	 	136	  	
		
Schedule 17 Form of Irrevocable De-Registration and Export Request Authorisation (IDERA)	  	 	141	  	

THIS AIRCRAFT LEASE AGREEMENT , dated as of April 7, 2011, between MASL IRELAND (22) LIMITED , a company incorporated under the laws of Ireland, with its registered office at Level 1, South Bank House, Barrow Street, Dublin 4, Ireland (“ Lessor ”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. , a Mexican company with its principal place of business at Prolongación Paseo de la Reforma No. 490, Piso 1, Col. Santa Fe Peña Blanca, Del. Álvaro Obregón, 01210 México, D.F., México (“ Lessee ”).
WITNESSETH:
WHEREAS , Lessee desires to lease from Lessor and Lessor is willing to lease to Lessee the Aircraft upon the terms and conditions set forth in this Lease.
NOW, THEREFORE , in consideration of the mutual covenants herein set forth, Lessor and Lessee hereby agree as follows:
 
1.	DEFINITIONS, CONSTRUCTION AND INTERPRETATION	
The capitalized terms used in this Lease (including in the paragraphs above) shall have the meanings specified in Schedule 1. The rules of construction and interpretation used in this Lease are also specified in Schedule 1.
 
2.	DELIVERY AND ACCEPTANCE	
 
2.1	Time and Place	
Subject to the satisfaction of the conditions set forth in Clause 2.3, Lessor shall deliver the Aircraft to Lessee on the Delivery Date at the Delivery Location or at such other location as may be mutually agreed. Subject to satisfaction of the conditions set forth in Clause 2.4, Lessee shall accept the Aircraft by executing the Certificate of Acceptance and delivering the same to Lessor and upon Lessor’s countersignature on the Certificate of Acceptance the Aircraft shall become subject to this Lease. Execution and delivery by Lessee of the Certificate of Acceptance shall constitute conclusive proof of Lessee’s unconditional acceptance of the Aircraft for lease under this Lease without any reservation whatsoever. The date of the Certificate of Acceptance shall be the Delivery Date of the Aircraft.
It is anticipated that the Delivery Date of the Aircraft will be the Anticipated Delivery Date. Lessor agrees to notify Lessee of any event of which it becomes aware which would cause a change in the Delivery Date. Lessee acknowledges and agrees that the Delivery Date may be delayed and that Lessor shall not be responsible for any losses (including loss of profit), costs or expenses arising from any such delay which are suffered or incurred by Lessee. Lessee shall not be entitled to terminate this Lease, or to reject the Aircraft when tendered for delivery on the grounds of any such delay, unless the Delivery Date is delayed beyond the Latest Delivery Date. If the Delivery Date is delayed beyond the Latest Delivery Date, either party may give written notice of termination to the other in which event Lessor shall pay to Lessee an amount equivalent to the Security Deposit it has actually received from Lessee promptly thereafter, and this Lease shall be without further force or effect. Notwithstanding the foregoing, Lessee shall not be entitled to give written notice of termination and Lessor shall not be obliged to pay to Lessee an amount equivalent to the Security Deposit if the delay has been caused by Lessee’s failure to satisfy any of the conditions precedent set forth in paragraph 1 of Schedule 2 by the respective times specified or by any other matter under Lessee’s control.
 
2.2	A Letting Only	
At all times during the Term, full legal title to and ownership of the Aircraft shall remain vested in Owner to the exclusion of Lessee, notwithstanding the delivery of the Aircraft to, and the possession and use thereof by, Lessee. Lessee shall bear all risks of loss, theft, damage or destruction of or to the Aircraft during the Term.

2.3	Lessor’s Conditions to Delivery	
Lessor’s obligation to deliver and lease the Aircraft to Lessee hereunder shall be subject to satisfaction of the conditions precedent set forth in paragraph 1 of Schedule 2 (which Lessee shall procure at the times specified) unless waived by Lessor.
 
2.4	Lessee’s Conditions to Delivery	
Lessee’s obligation to accept and lease the Aircraft from Lessor hereunder shall be subject to the satisfaction of the conditions precedent specified in paragraph 2 of Schedule 2 (which Lessor shall procure at the times specified) unless waived by Lessee.
 
2.5	Conditions Subsequent to Delivery	
Lessee shall deliver to Lessor, or fulfill to the reasonable satisfaction of Lessor, the conditions subsequent set forth in paragraph 3 of Schedule 2 (which delivery or fulfillment Lessee shall procure at the times specified) unless waived or deferred by Lessor.
 
3.	TERM	
The Term shall commence on the Delivery Date and shall continue, unless earlier terminated pursuant to any provision hereof, until the Expiry Date.
 
4.	RENT AND OTHER PAYMENTS	
 
4.1	Basic Rent	
Lessee shall pay Lessor rent for the Aircraft on each Basic Rent Payment Date, each such payment to be in the amount specified in Schedule 3 (“ Basic Rent ”).
 
4.2	Supplemental Payments	
Lessee shall also pay to Lessor or, at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Payments on the due date specified in the invoice from Lessor to Lessee for each such Supplemental Payment or, in the case of Maintenance Payment Amounts, on the due date determined in accordance with Schedule 3. Lessee shall pay to Lessor (as well after as before any judgment), as a Supplemental Payment, interest at the Incentive Rate on any part of any instalment of Rent not paid on the due date for such payment. All computations of interest under this Lease to be made on the basis of a 360-day year and actual days elapsed.
 
4.3	Prohibition Against Setoff, Counterclaim, Etc.	
Lessee’s obligation to pay Rent and make other payments in accordance with this Lease shall be absolute and unconditional irrespective of any contingency whatsoever including (but not limited to) (i) any right of setoff, counterclaim, recoupment, defence or other right which either party hereto may have against the other, (ii) any unavailability of the Aircraft or any part thereof for any reason, including, but not limited to, any loss, theft, damage or destruction of or to the Aircraft or any part thereof, any requisition of the Aircraft or any prohibition or interruption or interference with or other restriction against Owner’s or Lessor’s or Lessee’s use, operation or possession of the Aircraft, or any lack or invalidity of title or any other defect in title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or any Event of Loss (subject to the provision for cessation of Basic Rent as stated in Clause 10.1) in respect of or any damage to the Aircraft or any part thereof, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of Indebtedness, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Owner, Lessor, Lessee or any Financier, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, any of the Relevant Documents, and (v) any other cause which but for this provision would or might have the effect of terminating or in any way affecting any obligation of Lessee hereunder.
 
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4.4	Security Deposit	
 
 	4.4.1	Security Deposit. Lessee shall pay to Lessor the Security Deposit in cash in accordance with the provisions of Schedule 3.	
 
 	4.4.2	Nature of Security Deposit. Except as otherwise expressly provided in this Lease, and without waiver by Lessee of its rights under Section 4.4.5 below, the Security Deposit shall be non-refundable. The Security Deposit shall be the sole, absolute and unconditional property of Lessor and may be freely commingled by Lessor with its general funds and dealt with by Lessor in such manner as Lessor may see fit. No interest will accrue or be paid on the Security Deposit. If and to the extent that, under applicable law in any relevant jurisdiction, the Security Deposit is considered to be the property of Lessee, the Security Deposit shall be held by Lessor as security for the full, timely and faithful performance by Lessee of its obligations hereunder, and Lessee hereby grants to Lessor a first priority security interest in the Security Deposit to secure such payment and such performance, and in such circumstances Lessee shall not create or permit to exist any Lien, other than Permitted Liens, in or otherwise dispose of the Security Deposit.	
 
 	4.4.3	Application of Security Deposit. If an Event of Default has occurred and is continuing, in addition to all other rights Lessor has under this Lease or applicable law, Lessor may set off against, use, apply or retain all or any part of the Security Deposit in full or partial payment of amounts due and payable by Lessee under any Relevant Document to which the Lessee is a party or Other Leases and to compensate Lessor for any documented, out-of-pocket expense it shall have incurred as a result of the occurrence of such Event of Default, or to apply toward documented, out-of-pocket losses or expenses Lessor may suffer or incur as a result of the occurrence of an Event of Default.	
 
 	4.4.4	Effect of Application of Security Deposit. If Lessor uses or applies all or any part of the Security Deposit, such use or application shall not be deemed a cure by Lessee, or waiver by Lessor or any other person, of any Event of Default and Lessee shall promptly, and in any event within five (5) Business Days, after Lessor’s written demand pay to Lessor in cash such amount as may be necessary to restore the Security Deposit to its original amount. Notwithstanding the foregoing, provided that no other Event of Default has occurred and is continuing, Lessor’s receipt of such additional Security Deposit amount shall be deemed to cure the relevant Event of Default solely to the extent such Event of Default is curable by such amount.	
 
 	4.4.5	Repayment of Security Deposit. Provided no Default or Event of Default has occurred and is continuing, the remaining balance of the Security Deposit shall be paid over to Lessee promptly, and in any event within five (5) Business Days, following the earlier to occur of the following events:	
 
 	(a)	termination prior to the Delivery Date of the obligation of Lessee to lease the Aircraft pursuant to the Lease;	
 
 	(b)	return of the Aircraft to Lessor in satisfaction of its obligations under this Lease; and	
 
 	(c)	termination of the Term following an Event of Loss in relation to the Aircraft or the Airframe,	
 
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and after the satisfaction by Lessee, in full, of its obligations hereunder, the payment or performance of which is then due (including any obligations to pay Supplemental Payments and to redeliver the Aircraft in accordance with the redelivery conditions set forth in Schedule 6, Part B, but excluding those other obligations that are expressly provided herein to survive the Expiry Date or the equivalent date in any Other Lease and which are not due for performance on or as of such date).
 
 	4.4.6	Security Letter of Credit. Subject to no Event of Default having occurred which is continuing, in lieu of paying or maintaining the Security Deposit in cash, at any time following the Delivery Date Lessee may deliver to Lessor a Security Letter of Credit in the amount of the Security Letter of Credit Face Amount.	
 
 	(a)	If Lessee elects to provide a Security Letter of Credit, Lessee shall provide a draft of the same for approval by Lessor not less than five (5) Business Days prior to the date that Lessee desires to deliver the Security Letter of Credit to Lessor in substitution for the cash Security Deposit. The Security Letter of Credit shall:	
 
 	(i)	have a validity period of not less than one (1) year or, if shorter, a period which ends on the date occurring thirty (30) days following the Expiry Date and shall be renewed and delivered to Lessor not later than thirty (30) days prior to its then scheduled expiry;	
 
 	(ii)	permit partial and multiple draws without invalidating or terminating the remaining balance of the Security Letter of Credit; and	
 
 	(iii)	be freely assignable and transferable by Lessor without restriction or condition.	
Following receipt by Lessor of the Security Letter of Credit, Lessor shall promptly, and in any event within five (5) Business Days, repay to Lessee an amount equal to the then balance of the cash Security Deposit.
 
 	(b)	Any Security Letter of Credit delivered to Lessor hereunder is provided as a guarantee of Lessee’s obligations under the Lease, all other Relevant Documents and any Other Lease. Lessor may draw upon all or a portion of the amount of the Security Letter of Credit:	
 
 	(i)	upon the occurrence and during the continuance of an Event of Default; and/or	
 
 	(ii)	if Lessee fails to renew any Security Letter of Credit by the date falling thirty (30) days prior to its then scheduled expiry,	
and Lessor shall hold, apply, use, retain and return all or any portion of the funds paid pursuant to the Security Letter of Credit as the Security Deposit as provided in the foregoing provisions of this Clause 4.4.
 
 	(c)	If Lessor draws upon all or any portion of the Security Letter of Credit, such application shall not be deemed a cure of any Event of Default, and Lessee shall promptly, and in any event within five (5) Business Days, after written demand by Lessor cause the Security Letter of Credit to be reinstated to its original amount, cause a replacement Security Letter of Credit to be issued in the Security Letter of Credit Face Amount or pay the Security Deposit to Lessor in cash.	
 
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 	(d)	If (i) any bankruptcy, insolvency, examinership, administration, reorganization, liquidation or anything analogous thereto in any jurisdiction shall be commenced in relation to the Security Letter of Credit Issuer (or any person guaranteeing, confirming or assuming any obligation as principal in respect thereof), (ii) the rating of obligations of the Security Letter of Credit Issuer (or any person guaranteeing, confirming or assuming any obligation as principal in respect thereof) is lowered or placed on CreditWatch with negative implications by Moody’s Investors Services or Standard & Poor’s (or any recognised institution providing similar services) so that the minimum required credit rating of the issuing and/or confirming bank is or may not (by virtue of being placed on CreditWatch with negative implications) be maintained or (iii) the Security Letter of Credit shall cease to be valid and in full force and effect for any reason, Lessee shall promptly, and in any event within five (5) Business Days, following receipt of notice from Lessor provide to Lessor a substitute Security Letter of Credit in form and substance satisfactory to Lessor and otherwise in compliance with the requirements of this Clause 4.4.6 or pay to Lessor the Security Deposit in cash.	
 
 	(e)	Lessor shall return the Security Letter of Credit to Lessee for cancellation when Lessor is otherwise obligated under this Lease to repay the Security Deposit to Lessee had the same been paid in cash.	
 
4.5	Manner and Place of Payments	
All amounts to be paid by Lessee hereunder shall be paid to the account of Lessor at the bank and to the account specified in Schedule 12 hereto or to such other party or account as Lessor shall designate in writing for value on the due date prior to 12:00 noon at the place where payment is to be made and in such funds specified by Lessor as being customary at the time for settlement of transactions in Dollars in the place of payment. Subject to Clause 4.2, if any such amount is due to be paid on a day other than a Business Day, such amount shall be payable on the next succeeding Business Day and the amount thereof, if calculated by application of a per annum rate, shall be adjusted accordingly. Any payment of Rent received in Lessor’s bank account after 12:00 noon (at the place at which payment is to be made in accordance with the foregoing) on the due date shall be treated as having been received on the next succeeding Business Day.
 
4.6	No Deductions or Withholdings	
Rent and all other amounts payable by Lessee to Lessor hereunder and under each of the Relevant Documents will be made in full without any deduction or withholding (whether in respect of set-off, counterclaim, duties, tax, charges or otherwise) unless a deduction or withholding is required by any applicable law, in which event the provisions of Clause 9.2 shall apply.
 
5.	REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE PARTIES	
 
5.1	Lessor’s Representations and Warranties and Disclaimer	
Lessor represents and warrants that:
 
 	5.1.1	on the Delivery Date Lessor shall have the right to lease the Aircraft to Lessee hereunder. EXCEPT FOR THE FOREGOING REPRESENTATION, AND THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS CLAUSE 5.1 OR IN ANY OTHER RELEVANT DOCUMENT, NEITHER LESSOR NOR OWNER NOR ANY FINANCIER MAKES AND SHALL NOT BE DEEMED TO HAVE MADE OR TO MAKE ANY WARRANTIES,	
 
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 	REPRESENTATIONS, GUARANTEES OR UNDERTAKINGS OF ANY KIND, INCLUDING WITHOUT LIMITATION (I) AS TO THE AIRWORTHINESS, VALUE, CONDITION, DESIGN OR OPERATION OF, OR QUALITY OF THE MATERIAL OR WORKMANSHIP IN, OR THE ABSENCE OF ANY DEFECT IN, THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, LEASED, OR TRANSFERRED HEREUNDER, (II) ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR SUITABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, AGAINST INFRINGEMENT OF PATENTS OR TRADE MARKS OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) AS TO ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT WITH RESPECT TO THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, LEASED, OR TRANSFERRED HEREUNDER, WHETHER OR NOT IN STRICT OR ABSOLUTE LIABILITY OR ARISING FROM THE ACTUAL OR IMPUTED NEGLIGENCE OF OWNER OR LESSOR OR ANY FINANCIER, OR (IV) AS TO ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF, OR DAMAGE TO, THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING, FOR ANY LOSS OF USE, REVENUE OR PROFIT, OR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.	
 
 	5.1.2	Corporate Existence and Qualification. Lessor is a company duly incorporated and validly existing under the laws of its Home Jurisdiction.	
 
 	5.1.3	Tax Residence. Lessor is (a) liable to Tax in Ireland by reason of its domicile, residence or place of management in Ireland; and (b) beneficial owner of all Rent payable under this Lease.	
 
 	5.1.4	Authority. Lessor has full corporate power and authority to enter into and perform its obligations under the Relevant Documents to which Lessor is a party; and the execution, delivery and performance of the Relevant Documents have been duly authorized by all necessary corporate action on the part of Lessor, do not require any stockholder or shareholder approval or approval or consent of any trustee or holders of any Indebtedness or other obligations of Lessor except such as have been duly obtained and do not contravene any provision of any law, governmental rule, regulation or order binding on Lessor, or any applicable interpretation or administration of any such law, governmental rule, regulation or order, or contravene the constitutional documents of Lessor or any Lien, contract or other agreement or instrument to which Lessor is a party or by which it or any of its assets may be bound or affected.	
 
 	5.1.5	Binding Obligations. The Relevant Documents to which Lessor is a party constitute or, when executed and delivered will constitute, the legal, valid and binding obligations of Lessor, enforceable against Lessor in accordance with their terms except as any such enforcement may be affected by bankruptcy, moratorium and similar laws affecting creditors rights generally and by general equitable principles.	
 
 	5.1.6	Government Approval. The execution and delivery by Lessor of the Relevant Documents to which Lessor is a party do not (or when executed will not) require	
 
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 	the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any Government Entity or other person, except such as have been obtained, given or accomplished.	
 
 	5.1.7	No Immunity. Lessor is subject to civil commercial law with respect to its obligations under the Relevant Documents to which Lessor is a party and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of such Relevant Documents by Lessor constitute private and commercial acts.	
 
 	5.1.8	Litigation. Except as otherwise disclosed to Lessee in writing prior to the execution and delivery of this Lease, there are no suits or proceedings taking place, pending or, to the knowledge of Lessor, threatened in any court or before any arbiters, regulatory commission, board or other administrative or governmental agency in any jurisdiction against or affecting Lessor which relate to the Aircraft or the transactions contemplated by the Relevant Documents or which, if adversely determined, could reasonably be expected to have an adverse effect on Lessor’s right, title or interest in and to the Aircraft and this Lease and Relevant Documents.	
 
 	5.1.9	Choice of Law. The choice by Lessor of New York law to govern this Lease and the Relevant Documents is valid and binding on Lessor.	
 
 	5.1.10	Registration. Immediately prior to the registration of the Aircraft with the FAA as contemplated in this Lease, Owner shall be a “citizen of the United States” within the meaning of Section 40102(a)(15)(c) of Title 49 of the United States Code.	
 
5.2	Lessee’s Representations and Warranties	
 
 	5.2.1	Lessee represents and warrants that:	
 
 	(a)	Corporate Existence and Qualification. Lessee is a company duly incorporated and validly existing under the laws of its Home Jurisdiction and is duly qualified or otherwise authorized to do business in all jurisdictions in which it conducts business, except for jurisdictions where failure to so qualify or obtain authorization would not have a material adverse effect on the business of Lessee and would not involve any danger of the sale, forfeiture, detention or loss of the Aircraft or any part thereof or impairment of the value thereof.	
 
 	(b)	Authority. Lessee has full corporate power and authority to enter into and perform its obligations under the Relevant Documents; and the execution, delivery and performance of the Relevant Documents have been duly authorized by all necessary corporate action on the part of Lessee, do not require any stockholder or shareholder approval or approval or consent of any trustee or holders of any Indebtedness or other obligations of Lessee except such as have been duly obtained and do not contravene any provision of any law, governmental rule, regulation or order binding on Lessee, or any applicable interpretation or administration of any such law, governmental rule, regulation or order, or contravene the constitutional documents of Lessee or any Lien, contract or other agreement or instrument to which Lessee is a party or by which it or any of its assets may be bound or affected.	
 
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 	(c)	Governmental Approvals. None of the execution, delivery or performance by Lessee of the Relevant Documents or any other document to be executed by Lessee pursuant thereto, or the consummation of any of the transactions by Lessee contemplated thereby, nor the leasing by Lessee of the Aircraft thereunder requires the consent or approval of, the giving of notice to, the registration or filing for recordation with, or the taking of any other action in respect of, any Government Entity of Lessee’s Home Jurisdiction except for (i) the issuance of a certificate of airworthiness and a certificate of registration with respect to the Aircraft issued by the Aeronautics Authority naming Owner as the owner of the Aircraft, (ii) the filing with the Aeronautics Authority of the bill of sale conveying the Aircraft to Owner, and (iii) such other filings or actions as have either been made or taken or are not yet due or required but will be made or taken prior to the date when due or required.	
 
 	(d)	Binding Obligations. The Relevant Documents and all other documents executed by Lessee pursuant thereto constitute or, when executed and delivered will constitute, the legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their terms except as any such enforcement may be affected by bankruptcy, moratorium and similar laws affecting creditors rights generally and by general equitable principles.	
 
 	(e)	Licenses. Lessee holds all valid licenses, certificates and permits from all applicable Government Entities for the conduct of its business as a certified air carrier and performance of its obligations under this Lease and the other Relevant Documents.	
 
 	(f)	Litigation. Except as otherwise disclosed to Lessor in writing prior to the execution and delivery of this Lease, there are no suits or proceedings taking place, pending or, to the knowledge of Lessee, threatened in any court or before any arbiters, regulatory commission, board or other administrative or governmental agency in any jurisdiction against or affecting Lessee which relate to the Aircraft or the transactions contemplated by the Relevant Documents or which, if adversely determined, could reasonably be expected to have an adverse effect on the ability of Lessee to fulfill its obligations under the Relevant Documents to which it is a party.	
 
 	(g)	Financial Condition. The audited balance sheet of Lessee as at December 31, 2009, certified by the independent auditor of Lessee and furnished to Lessor prior to execution of this Lease, is complete and correct and has been prepared in accordance with GAAP.	
 
 	(h)	Use of Aircraft. The Aircraft will be used exclusively for the carriage of persons, property, cargo, and mail as permitted under applicable law.	
 
 	(i)	No Adverse Agreements. Lessee is not a party to any agreement or instrument or subject to any restriction which individually or in the aggregate is, in the reasonable judgment of Lessee, likely to adversely affect in any material respect its ability to perform its obligations under this Lease.	
 
 	(j)	No Default. No Default or Event of Default has occurred and is continuing.	
 
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 	(k)	Airport and Air Navigation Charges. Lessee has paid or caused to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing, parking or navigation fees or charges in respect of the Aircraft and any other aircraft owned by or leased to or operated by it other than any such fees or charges the non-payment of which does not give rise to any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft.	
 
 	(l)	Tax Returns. All necessary returns have been delivered by Lessee to all relevant taxation authorities in Lessee’s Home Jurisdiction and Lessee is not in default in the payment of any Tax other than Taxes being actively disputed by Lessee in good faith through appropriate proceedings and for the payment of which adequate reserves have been provided, and only to the extent that there is no danger of the sale, forfeiture, loss, or loss of use of the Aircraft, the Airframe, or any Engine or any interest therein.	
 
 	(m)	Pari Passu Ranking. The obligations of Lessee under the Relevant Documents are direct, general and unconditional obligations of Lessee and rank at least pari passu in right of payment with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee with the exception of such obligations as are mandatorily preferred by applicable law.	
 
 	(n)	Full Disclosure. The financial and other information furnished by Lessee in connection with the Relevant Documents is true and correct in all material respects and does not contain any untrue statement or omit any facts, the omission of which, in light of the circumstances under which they were made, makes or could make such information misleading in any material respect, and all expressions of expectation, impression, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by Lessee.	
 
 	(o)	Choice of Law. The choice by Lessee of New York law to govern this Lease and the Relevant Documents other than the Deregistration Power of Attorney is valid and binding on Lessee.	
 
 	(p)	No Immunity. Lessee is subject to civil commercial law with respect to its obligations under the Relevant Documents and neither Lessee nor any of its assets is entitled to any right of immunity and the entry into and performance of the Relevant Documents by Lessee constitute private and commercial acts.	
 
 	(q)	No Place of Business. Lessee has no established place of business in Ireland.	
 
 	(r)	International Operations. The Aircraft will be operated exclusively outside the European Union during the Term.	
 
 	(s)	Lessee’s Location. Lessee is, for the purposes of Article 3(1) of the Convention, situated in a Contracting State, being incorporated or formed under the laws of a Contracting State within the meaning of Article 4 of the Convention.	
 
 	5.2.2	Repetition. The representations and warranties contained in Clauses 5.1 and 5.2.1 are made on the date of this Lease and will be deemed to be repeated by Lessor and Lessee, as applicable, on the Delivery Date.	
 
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5.3	Covenants of Lessee	
Throughout the Term Lessee agrees that:
 
 	5.3.1	Financial Statements, Reports, etc. Lessee will furnish to Lessor:	
 
 	(a)	as soon as available, but in no event later than sixty (60) days after the end of each fiscal quarter and one hundred and twenty (120) days (or, following the change in Lessee’s accounting standards to IFRS, ninety (90) days) after the end of each fiscal year of Lessee, the balance sheet of Lessee as at the end of such quarter or year and the related statements of income for such quarter or year, prepared in accordance with GAAP or IFRS (at Lessee’s option) and otherwise on a basis consistent with that used in the preparation of the financial statements referred to in Clause 5.2.1(g), except as noted in such balance sheet and statements, and, in the case of year-end balance sheets and statements, certified by Lessee’s independent auditors and including their certificate and accompanying comments if any. Lessee’s obligations under this Clause 5.3.1(a) shall be deemed satisfied should Lessee or Lessee’s parent publish, on a website generally available free of charge to the public, within the time limits specified above the equivalent of the information required to be provided by Lessee under this Clause 5.3.1(a). Lessee shall notify Lessor in writing of the website address;	
 
 	(b)	promptly after Lessee shall have obtained knowledge of the occurrence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action Lessee has taken or is taking or proposes to take with respect thereto;	
 
 	(c)	(A) not later than 30 days prior to entering into or becoming bound or affected by any pooling or interchange agreement or arrangement by which any Engine or Part may be affected and prior to each amendment or modification of any such agreement or arrangement, a copy of such agreement, arrangement, amendment or modification, duly certified by an officer of Lessee as being a complete and correct copy, and (B) prompt notice of any relinquishment of possession of any Engine or Part permitted under Clause 6.1 and a copy of any documents relating thereto duly certified by an officer of Lessee as being a complete and correct copy;	
 
 	(d)	prompt notice of:	
 
 	(i)	any arrest, hi-jacking, attachment, seizure or detention of the Aircraft;	
 
 	(ii)	any accident involving the Aircraft; and	
 
 	(iii)	any incident involving the Aircraft where the cost of repair or correction is expected to exceed *****;	
 
 	(e)	within 10 days after receiving service of process or the equivalent written notice of (A) any litigation, including arbitration, involving any claim in ***** or the equivalent thereof in any other currency and (B) any proceeding by or before any Government Entity, in each case which litigation or proceeding is not frivolous in nature and which, if adversely determined, could materially adversely affect the financial condition of Lessee and its ability to meet its obligations under the Relevant Documents;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(f)	promptly provide Lessor with copies of any changes to the Maintenance Program and, at Lessor’s request, cooperate with Lessor to amend Clauses 6 and 14, as appropriate, to reflect such changes;	
 
 	(g)	from time to time such other information as Lessor may reasonably request; and	
 
 	(h)	on or before the 10th day of each month a report on the utilization and operation of the Aircraft during the immediately preceding calendar month in the form of Schedule 13.	
 
 	5.3.2	Authorizations . Lessee will obtain from time to time any and all such consents, approvals, licenses and authorizations and make any and all such filings and registrations as shall now or hereafter be required under applicable law and regulations (including foreign exchange laws) for the execution, delivery and performance by Lessee of the Relevant Documents and will promptly furnish copies thereof to Lessor.	
 
 	5.3.3	Recording . Subject to Lessor’s obligations set forth in Clause 8.6.4, Lessee shall, at its sole cost and expense, procure that at all times during the Term the Aircraft is registered in the State of Registration in the name of Owner and that this Lease, any Mortgage and such other instruments as are necessary or reasonably requested by Lessor to protect the right, title and interests of Lessor and/or Owner with respect to the Aircraft and the Relevant Documents and to perfect and maintain the interest of Mortgagee and/or any other Financier created pursuant to any Mortgage or any other Financing Document are likewise at all times registered with the Aeronautics Authority and any other appropriate Government Entities in the State of Registration or elsewhere as may be reasonably required by Lessor. Lessee will not do anything or permit anything to be done to prejudice any such registration or such interests. At no time during the Term will the Aircraft be registered other than in the State of Registration.	
 
 	5.3.4	Corporate Existence, Mergers, etc . Lessee will at all times throughout the Term of this Lease maintain its existence as a public or private company under the laws of its Home Jurisdiction. Lessee will not (a) sell, lease, exchange, transfer or otherwise dispose (whether in one transaction or in a series of related transactions) of all or substantially all its property, assets or revenues, whether now owned or hereafter acquired, or (b) consolidate with or merge with or merge into any other corporation unless (in the case of a consolidation or merger) (i) the surviving entity of such merger or consolidation is a certificated air carrier or parent thereof which, after giving effect to such merger or consolidation, has a net worth equal to or greater than that of Lessee immediately prior to such merger or consolidation, (ii) if the surviving entity of such merger or consolidation is not Lessee, such surviving entity has agreed in writing reasonably satisfactory to Lessor to assume and perform all obligations of Lessee hereunder and under the other Relevant Documents to which the Lessee is a party, and (iii) if the surviving entity of such merger or consolidation is not Lessee, Lessee establishes to the reasonable satisfaction of Lessor that such surviving entity will assume all such obligations (including, if requested by Lessor, providing Lessor with a legal opinion, in form and substance and from counsel reasonably satisfactory to Lessor, confirming that the surviving entity will be bound by the Relevant Documents to the same extent as Lessee was bound immediately prior to such consolidation or merger). Lessee shall not change its registered office without giving Lessor at least 30 days’ prior written notice. Nothing in this Clause 5.3.4 shall restrict Lessee’s ability to engage in a public offering of up to 100% of the voting equity shares of Lessee.	
 
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 	5.3.5	Aircraft Records . Lessee will at all times maintain the Aircraft Records, including the Maintenance Manual and the Maintenance Program, at Lessee’s engineering facility.	
 
 	5.3.6	Base of Aircraft . Lessee will procure that the Aircraft will be based at its Habitual Base (or such other airport as Lessor may approve in writing, such approval not to be unreasonably withheld).	
 
 	5.3.7	Agreement with Authorised Maintenance Performer . The agreements between Lessee and the Authorised Maintenance Performer (including the agreement referred to in paragraph 1.2.1 of Schedule 2) shall not be amended or varied without Lessor’s prior written consent (such consent not to be unreasonably withheld or delayed).	
 
 	5.3.8	Registration on the International Registry . The Lessee will do or cause to be done any and all acts which may be reasonably required of it (or which Lessor may require it to do) under the terms of the Cape Town Convention to perfect and preserve the respective interests of Lessor, the Owner and any Financier in and to the Aircraft and any part thereof. Lessee will not do anything to prejudice the registrations on the International Registry of the international interests constituted by this Lease in the Aircraft and the Engines or the registrations contemplated by this clause 5.3. Lessee will not, without the prior written consent of Lessor, effect or consent to (i) any person claiming through or under Lessee or (ii) any person who is a debtor or a creditor of Lessee (other than Lessor) effecting the registration (including any amendment or extension of any registration) on the International Registry of any registrable interest in relation to the Aircraft or the Engines and if Lessee or any such person, without the prior written consent of Lessor, effects the registration on the International Registry of any such interest Lessee will forthwith procure the discharge of such registration or the subordination of such interest as may be required by Lessor, in which case such subordination shall be registered on the International Registry at Lessee’s cost. Lessee will not issue any demand pursuant to Article 25(2) of the Convention in respect of the registration at the International Registry of any prospective international interests constituted by this Lease in relation to the Aircraft or the Engines. For the purposes of the said Article 25(2), Lessee acknowledges that Lessor will have incurred a commitment to give value in respect of such registration with effect from execution by it of this Lease. For the purposes of Article 20(1) of the Convention, Lessee hereby consents to any registrations effected by Lessor pursuant to this clause 5.3 and Lessee will forthwith, upon Lessor’s written request, advise the International Registry of such consent in such form as Lessor may reasonably require.	
 
 	5.3.9	Information about Proceedings . Lessee will notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee which could, if adversely determined, reasonably be expected to have an adverse effect on the ability of Lessee to fulfill its obligations under this Lease.	
 
 	5.3.10	Other Notices : If at any time any proceeding is commenced against Lessee by any airport or air navigation authorities that could result in a Lien being placed on the Aircraft, then immediately upon learning of such proceeding, Lessee shall provide notice to Lessor of such proceeding and Lessee will immediately take all reasonable actions to prevent the imposition of such Lien on the Aircraft.	
 
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 	5.3.11	Airport and Air Navigation Charges . Lessee shall pay or cause to be paid all fees or charges assessed and due against it (or against any aircraft owned by or leased to or operated by it) by any airport or air navigation authority assessing landing, parking or navigation fees or charges in respect of the Aircraft and any other aircraft owned by or leased to or operated by it other than any such fees or charges the non-payment of which does not give rise to any risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft.	
 
 	5.3.12	Tax Returns . Lessee shall deliver all necessary returns to all relevant taxation authorities in Lessee’s Home Jurisdiction such that Lessee is not in default in the payment of any Tax, other than Taxes being actively disputed by Lessee in good faith through appropriate proceedings and for the payment of which adequate reserves have been provided, and only to the extent that there is no danger of the sale, forfeiture, loss, or loss of use of the Aircraft, the Airframe, or any Engine or any interest therein.	
 
5.4	Covenants of Lessor	
 
 	5.4.1	Registration. Upon receipt of written request from Lessee, Lessor will take such action as may be reasonably necessary to assist Lessee in fulfilling its obligations under Clause 5.3.3 in relation to filing or recording this Lease, any Mortgage and any Financing Document and the registering of the Aircraft with the Aeronautics Authority; provided, however, that nothing herein shall require Lessor or any Financier to qualify for admission to do business under the laws of the State of Registration or any subdivision thereof, nor shall anything herein require Lessor or any Financier to take any other action which would (either alone or in connection with any other related or unrelated action) subject Lessor or any Financier to any liability to or the jurisdiction of taxing authorities in or for the State of Registration or any subdivision thereof. Lessor agrees to use commercially reasonable efforts to deliver to Lessee and to any other Government Entity specified by Lessee such notifications, certifications, reports or other documents as may be required by law as a condition to exemption or other relief from (or reduction of) any Taxes which otherwise would be imposed with respect to any amount payable by Lessee under this Lease.	
 
 	5.4.2	Quiet Enjoyment. Lessor covenants that, unless an Event of Default shall have occurred and be continuing, Lessor shall not disturb or interrupt, or permit any person lawfully claiming by or through Lessor to disturb or interrupt, Lessee’s quiet use, possession and enjoyment of the Aircraft. The exercise by Lessor of its rights under any Relevant Document in accordance with the terms thereof shall not constitute a breach of this Clause 5.4.2. The foregoing covenant is in lieu of any quiet enjoyment covenant of Lessor which may be available to Lessee under Section 2A-211(1) of the New York Uniform Commercial Code or any similar law or which might otherwise be implied under applicable law.	
 
 	5.4.3	Owner a US Citizen. For so long as the Aircraft is registered with the FAA, Lessor shall procure that Owner shall be a “citizen of the United States” within the meaning of Section 40102(a)(15)(c) of Title 49 of the United States Code.	
 
 	5.4.4	Deregistration Power of Attorney. Lessor agrees not to make use of the powers conferred on it by the Deregistration Power of Attorney unless and until an Event of Default has occurred which is continuing.	
 
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6.	POSSESSION; USE; LAWFUL INSURED OPERATIONS; MAINTENANCE; INSIGNIA	
 
6.1	Possession	
 
 	6.1.1	The Aircraft and the operations performed therewith, subject to applicable law, the rules and regulations of the Aeronautics Authority and the provisions hereof and of the other Relevant Documents, shall be under the exclusive control of Lessee until the Aircraft is returned pursuant to Clause 14. Lessee shall not without Lessor’s prior written consent deliver, relinquish or transfer possession of the Aircraft, any Engine or the APU, or any part of any of the foregoing, except for a transfer of possession and/or replacement of Parts as provided in Clause 8; provided, however, that, so long as no Default or Event of Default shall have occurred and be continuing, Lessee may, subject to the other provisions of this Clause 6: (a) deliver possession of the Aircraft or any part thereof to the Authorized Maintenance Performer for service, repair, maintenance or overhaul work required by the terms hereof, or for modifications, alterations or additions permitted by the provisions hereof; or (b) install an Engine or the APU on another airframe of the same type and model as the Airframe, which other airframe is owned or leased by Lessee, or hired or bailed or conditionally purchased by Lessee subject to a hire purchase or conditional sale agreement, provided that (i) such airframe is free and clear of all Liens except the right of the parties to the lease, hire purchase or conditional sale agreement or other security agreement covering such airframe, (ii) the owner of such airframe expressly agrees in the lease, hire purchase or conditional sale agreement and the holder of any Lien on such airframe expressly agrees in the security agreement that it will not acquire or claim any right, title or interest in any Engine or the APU by reason of such Engine or the APU being installed on such airframe at any time and (iii) no such other airframe on which an Engine or the APU is installed by virtue of this Clause 6.1 may be subleased to any other entity. No agreement or arrangement described in (b) above shall contemplate or require the transfer of title to any Engine or the APU. The rights of any person who receives possession by reason of a transfer permitted by this Clause 6.1 shall be subject and subordinate to all the terms of this Lease, any Superior Lease, any Financing Documents, and any Mortgage (including, without limitation, the restrictions on the use of the Aircraft contained in Clause 6.3 and Lessor’s right to terminate the Term upon the occurrence of an Event of Default which is continuing and to obtain possession of the Aircraft and each part thereof without regard to any such agreement and the rights of any person thereunder), and Lessee shall remain primarily liable hereunder for the performance of all of the terms hereof to the same extent as if such transfer had not occurred. Any transfer of any part of the Aircraft pursuant to this Clause 6.1 which results in a transfer of title to such part shall be an Event of Default. If Lessee installs any Engine or the APU on another airframe pursuant to this Clause 6.1, Lessor may, at any time after a Default shall have occurred which is continuing, by notice in writing require Lessee to remove such Engine or APU from such airframe and reinstall it on the Airframe, and Lessee shall forthwith comply with any such notice at Lessee’s expense.	
 
 	6.1.2	Lessor agrees and undertakes to and for the benefit of Lessee, any permitted sub-lessee, owner, lessor or secured party (each a “ Third Party Interest Holder ”) of any engine (excluding the Engines) (each a “ Third Party Engine ”):	
 
 	(a)	leased to Lessee or any permitted sub-lessee; or	
 
 	(b)	purchased by Lessee or any permitted sub-lessee or subject to a conditional sale or other security agreement in favour of such Third Party Interest Holder,	
 
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that none of Lessor, Owner, Beneficiary, any Financier or any person claiming by or through Lessor, Owner, Beneficiary or any Financier will acquire or claim, as against such Third Party Interest Holder, any right, title or interest in any Third Party Engine as a result of such Third Party Engine being installed on the Aircraft during the Term; provided however that the foregoing agreement and undertaking of Lessor shall only be for the benefit of each Third Party Interest Holder who has given an equivalent undertaking, mutatis mutandis, for the benefit of Lessor, Owner, Beneficiary and the Financiers with respect to the Engines while they are installed on another airframe in or with respect to which such Third Party Interest Holder has an interest.
 
6.2	Sublease; Assignment	
Except as provided in Clause 6.1, Lessee will not sublease or otherwise in any manner deliver, transfer or relinquish possession of the Aircraft or any part thereof without the prior written consent of Lessor, and Lessee will not assign or transfer any of its rights or obligations under any of the Relevant Documents. In no circumstances will Lessor give its approval to any sublease to a national of a Prohibited Country. Any such purported assignment shall be void ab initio. Lessee shall pay Lessor all reasonable costs incurred by Lessor or any Financier in assessing any request for consent to, or otherwise in connection with, any sub-lease. Any sublease to which Lessor in its sole discretion may consent shall (a) be subject and subordinate to this Lease, any Superior Lease and any Mortgage and terminate automatically upon termination of the leasing of the Aircraft hereunder, (b) require that the Aircraft be maintained by the Authorized Maintenance Performer under the approved Maintenance Program, and (c) require that the Aircraft remain on the aircraft registry of the State of Registration. Subject to Clause 6.5, this Clause 6.2 shall not prohibit Lessee from “wet leasing” the Aircraft to any person approved by Lessor, Owner and Mortgagee (such approval not to be unreasonably withheld) provided Lessee’s flight crews remain in full control of the Aircraft at all times during any such “wet lease” and provided further that Lessee shall remain primarily liable in respect of all of its obligations under this Lease and no such “wet lease” shall materially adversely affect the rights and interests of Lessor, Owner or any Financier.
 
6.3	Use of Aircraft	
Lessee shall permit the Aircraft to be used solely in commercial operations for which Lessee is duly authorized. Lessee shall not use, or permit the use of, the Aircraft or any part thereof for any purpose for which it is not suitable. Lessee shall comply with all regulations of the Aeronautics Authority. Lessee shall not at any time (a) represent or hold out Owner, Lessor or any Financier as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft or (b) pledge the credit of Owner, Lessor or any Financier.
 
6.4	Notice of Maintenance	
Lessee shall notify Lessor, not less than 30 days prior to the scheduled commencement thereof, of each upcoming “C check” (under and as defined in the Maintenance Program), of any Relevant Work which could be the subject of a claim for payment by the Lessor to Lessee under paragraph 5.3 of Schedule 3, and of any other major check or structural inspection to be performed on the Airframe and of any shop visit of an Engine or the APU.
 
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6.5	Lawful Insured Operations	
Lessee will not cause or permit the Aircraft or any part thereof to be maintained, used or operated in violation of any law, treaty, statute, rule, regulation, or order of any Government Entity having jurisdiction over Lessee or the Aircraft or any Engine or contrary to any manufacturer’s operating manuals and instructions, or in violation of any airworthiness certificate or registration relating thereto. Lessee agrees not to operate the Aircraft, or permit the same to be operated, (a) unless the Aircraft is covered by insurance as required by the provisions of Clause 11, or (b) contrary to the terms of the insurance required by the provisions of Clause 11. If the Aircraft is taken into any location or country in which the insurance required by Clause 11 is not in full force and effect, Lessee, in addition to its liability under Clauses 15 and 16, shall be liable to Lessor for loss or damage to the Aircraft up to the Insured Value. The Aircraft shall not be subleased or wet leased to (a) a national of any Prohibited Country, (b) a national of any country as to which the United States of America or the European Union has imposed an embargo, for the duration of such embargo, (c) any entities or nationals on the list of Specially Designated Nationals and Blocked Persons listed on the website of the U.S. Department of the Treasury, Office of Foreign Assets Control (www.ustreas.gov/ofac), or (d) entities or nationals as to which sub-leasing or wet-leasing is prohibited by the U.S. Department of Commerce pursuant to the Denied Persons List or the Entity List posted on the website of the U.S. Department of Commerce, Bureau of Export Administration (www.bis.doc.gov). Unless prohibited by the rules and regulations of the European Union, the foregoing shall not prohibit the use of the Aircraft for travel to any such countries if (a) such use would be permitted as a temporary sojourn under Part 740.15 of the Export Administration Regulations of the United States of America, posted at (www.bis.doc.gov), (b) Lessee retains operational control of the Aircraft at all times, as that term is defined in Part 740.15 of the Export Administration Regulations, and (c) such use is not otherwise prohibited under the laws of the United States of America.
 
6.6	Maintenance	
Lessee, at its own cost and expense, shall:
 
 	6.6.1	service, repair, maintain, overhaul and test, or cause the same to be done to the Aircraft and each part thereof, (i) so as to keep the Aircraft and each part thereof in the same condition as when delivered to Lessee hereunder, ordinary wear from normal flight operations excepted, and in good operating condition, (ii) so as to keep the Aircraft in the condition necessary to enable the airworthiness certificate of the Aircraft to be maintained in good standing at all times under the applicable laws and regulations of the Aeronautics Authority and the FAA and (iii) in strict compliance with the Maintenance Program;	
 
 	6.6.2	cause the Aircraft Records and all other records, logs and other materials required by the Aeronautics Authority in respect of the Aircraft to be maintained in the manner and with the content specified in Schedule 8. All such other records, logs and other materials shall be the property of Owner and shall be deemed to be part of the Aircraft Records;	
 
 	6.6.3	promptly furnish to Lessor such information as may be requested by Lessor to enable Lessor, Owner or any Financier to file any reports required to be filed with any Government Entity concerning the Aircraft;	
 
 	6.6.4	cause the Airframe, each Engine, the APU and all Parts to be maintained, serviced, repaired and overhauled to comply with all warranty requirements. No PMA Parts shall be installed on or in any Engine or the APU. PMA Parts may be installed in the Airframe provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior and have been approved on the basis	
 
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 	of identicality and/or an assist letter in accordance with FAA Order 8110.42C Chapter 2 paragraphs 3(a) and 3(b). Lessee shall, upon Lessor’s request, provide Lessor with (a) the name of the manufacturer of each PMA Part installed in the Airframe, and (b) evidence reasonably satisfactory to Lessor that the PMA Part has been approved for manufacture on the basis of identicality and/or an assist letter in accordance with FAA Order 8110.42C Chapter 2 paragraphs 3(a) and 3(b).	
 
 	6.6.5	cause all scheduled maintenance (other than line maintenance), modification (as and if permitted hereunder), service, repair, overhaul and testing to be accomplished by the Authorised Maintenance Performer;	
 
 	6.6.6	to the extent not performed by the Authorized Maintenance Performer, cause line maintenance to be performed by mechanics or maintenance performers licensed by the Aeronautics Authority;	
 
 	6.6.7	cause to be incorporated into the Aircraft (i) all Alert and Mandatory Service Bulletins, and (ii) if and to the extent that Lessee incorporates any Recommended Service Bulletins in other similar aircraft in its fleet, all such Recommended Service Bulletins. All Service Bulletins covered by this paragraph shall be incorporated in a timely and efficient manner and on a basis that the Aircraft is not discriminated against in comparison with other similar aircraft operated by Lessee;	
 
 	6.6.8	carry out, on the Aircraft, all Airworthiness Directives which may be issued from time to time during the Term and which have a compliance date falling within the Term; and	
 
 	6.6.9	maintain the original certificate of registration of the Aircraft on board the Aircraft, which certificate of registration shall reflect the rights of Lessor under the Lease, the ownership of the Aircraft by Owner and, if applicable, the rights of any security interests in favour of any Financiers.	
 
6.7	Insignia and Notices	
Lessor will affix and Lessee will maintain on the frame of the forward right door of the Aircraft an ownership data plate and in the cockpit of the Aircraft adjacent to and not less prominent than the airworthiness certificate therein and on each Engine the lease data plates, all such plates bearing the inscriptions set out in Attachment A to Schedule 12 or such other inscription as Lessor from time to time directs in order to show Lessor’s, Owner’s and any Financier’s interests in the Aircraft. Except as otherwise provided, Lessee will not allow the name of any person or entity to be placed on the Airframe or any Engine or the APU as a designation that might be interpreted as a claim of ownership, except that Lessee may place its customary colours and insignia on the Airframe.
 
6.8	Maintenance Payment Amounts	
Lessee shall pay Maintenance Payment Amounts at the time and in the amounts specified in Schedule 3 and shall perform the other obligations specified in Schedule 3 in relation thereto. The Maintenance Payment Amounts shall, once received, be the property of Lessor and shall not be subject to reimbursement to Lessee, and Lessee hereby waives and relinquishes all rights in the Maintenance Payment Amounts in favour of Lessor and charges, assigns, agrees to assign and transfers to the Lessor any and all of Lessee’s right, title and interest in the Maintenance Payment Amounts. This Clause 6.8 is without prejudice to Lessee’s rights pursuant to paragraph 5.3 of Schedule 3.
 
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6.9	Storage	
If at any time Lessee is not using the Aircraft in regularly scheduled service for a period in excess of 45 days, Lessee shall store the Aircraft with the Authorised Maintenance Performer in accordance with the recommended storage procedures of the Maintenance Manual and Lessee shall cause hangar keeper’s legal liability and all risks hull insurance to be maintained with respect to the Aircraft. Lessee shall notify Lessor at any time when the Aircraft is in storage and shall specify in such notice to Lessor the location at which the Aircraft is being stored. Lessor or Lessor’s agent or representative shall be entitled to inspect the Aircraft and the Aircraft Records, at Lessor’s own cost and expense, at any time while the Aircraft is being stored.
 
6.10	Benefit of Warranties	
Subject to Clause 6.11, as between Lessor and Lessee, Lessor will remain entitled to the benefit of each warranty or guarantee (including any performance guarantee), express or implied, given by any Manufacturer or Supplier to Owner or Lessor in relation to the Aircraft, any Engine or Part (a “ Supplier Warranty ”). Lessee will procure that the benefit of any unexpired Supplier Warranty given in relation to any Part or service supplied with respect to the Aircraft during the Term will vest in Owner or Lessor or any Financier, as Lessor shall require, when given or, if not reasonably practicable at that time, will take all steps necessary to ensure that the benefit of any such Supplier Warranty vests in Owner or Lessor or any Financier, as Lessor shall require, upon termination or expiry of the Term.
 
6.11	Right to Enforce Warranties	
For the duration of the Term (unless an Event of Default has occurred and is continuing) Lessor hereby authorises Lessee to take any action that Lessee reasonably thinks fit to enforce any rights, claims and/or remedies under a Supplier Warranty and Lessor shall, at the cost and expense of Lessee, render all assistance as may be reasonably required by Lessee in connection therewith, provided that any such action will be taken at Lessee’s expense and any sums paid by the relevant Supplier under the relevant Supplier Warranty shall be applied by Lessee to discharge the cost of rectifying the defect for which the relevant claim was made or in reimbursement of such cost, with any excess to be retained by Lessee.
 
7.	INSPECTION	
Lessee shall furnish to Lessor such information concerning the location, condition, use and operation of the Aircraft as Lessor may reasonably request. Lessee shall permit any person or entity designated in writing as Lessor’s agent or representative by Lessor to visit and inspect (at any reasonable time, provided that such inspection shall not materially interfere with Lessee’s operational commitments) the Aircraft, its condition, use and operation and the Aircraft Records and, at Lessor’s expense (unless an Event of Default has occurred and is continuing), to make copies of such records as Lessor or Lessor’s agent or representative may reasonably designate. Lessor shall have no duty to make any such inspection and shall not incur any liability or obligation by reason of not making any such inspection. The inspection rights set forth in this Clause 7 shall be limited to one visit in any twelve month period, provided that such restriction on the frequency of inspections shall not apply in any of the following circumstances: (a) any inspection of the Post-Delivery Modifications pursuant to Clause 8.6; (b) if an Event of Default has occurred and is continuing (or to verify cure of any such Event of Default); (c) in connection with any remarketing of the Aircraft by Owner or Lessor for sale or lease; (d) in connection with any scheduled major check or structural inspection of the Airframe or any shop visit of an Engine or the APU; (e) in connection with any repair of damage to the Aircraft or any Engine for which the cost of repairs is expected to *****; or (f) in the event the Aircraft is in storage for a period of greater than 30 consecutive days.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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8.	REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND ADDITIONS	
 
8.1	Replacement of Parts	
Lessee, at its own cost and expense, shall, as soon as practicable but in any event within 60 days, replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing, Lessee may remove any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that Lessee shall promptly replace such Part. All replacement Parts shall be free and clear of all Liens, be documented by EASA Form One or FAA Form 8130-3, and shall be in as good operating condition as, and shall have a value and utility at least equal to, the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and shall be owned by Lessee and capable of vesting in Owner free of all Liens.
 
8.2	Title to Replaced and Replacement Parts	
All Parts removed from the Airframe and the Engines shall remain the property of Owner and subject to this Lease, any Superior Lease and any Mortgage, no matter where located, until such Parts are replaced by Parts to which title shall have vested in Owner and which have been incorporated or installed in or attached to the Airframe or an Engine and which meet the requirements for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated, installed or attached as provided above, without further act, (a) title to the replaced Part shall thereupon vest in Lessee, free and clear of all Lessor Liens; (b) subject to the provisions of Clause 8.5, such replaced Part shall no longer be deemed a Part hereunder; (c) title to the replacement Part shall thereupon vest in Owner; and (d) subject to the provisions of Clause 8.5, such replacement Part shall become subject to this Lease, any Superior Lease and any Mortgage and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Airframe and the Engines.
 
8.3	Pooling	
Any Part removed from the Airframe or from any Engine as provided in Clause 8.1 may be subjected by Lessee to a normal pooling arrangement that is customary in the airline industry entered into in the ordinary course of Lessee’s business with the Authorised Maintenance Provider; provided that a part replacing such removed Part shall be incorporated or installed in or attached to such Airframe or Engine in accordance with Clauses 8.1 and 8.2 as promptly as possible after the removal of such removed Part. Parts removed from the Airframe or Engine may also be incorporated or installed in or attached to an airframe or engine subject to any Other Lease provided that such Part is replaced in accordance with the provisions of this Clause 8. The APU shall not be pooled or replaced (other than a temporary replacement during an APU shop visit) without Lessor’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned.
Any replacement part when incorporated or installed in or attached to the Airframe or an Engine from time to time may be owned by another air carrier, the Authorised Maintenance Performer or subject to a normal pooling arrangement; provided that Lessee, at its expense, as promptly thereafter as possible either (i) causes title to such replacement part to vest in Owner in accordance with Clause 8.2 by Lessee acquiring title thereto for the benefit of Owner, free and clear of all Liens, or (ii) replaces such replacement part by incorporating or installing in or attaching to the Airframe or an Engine a further replacement part owned by Lessee free and clear of all Liens which shall thereupon become subject to this Lease, any Superior Lease and any Mortgage and be deemed to be a “Part” hereunder.
 
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8.4	Alterations, Modifications and Additions	
Except as provided in this Clause 8 and in Clause 6.6 or as otherwise required by applicable law, Lessee shall not make any alteration, modification or addition to the Airframe or any of the Engines except such alterations, modifications or additions the cost (including labour costs of installation) of which is less than ***** and which can be removed from the Aircraft without diminishing or impairing the value of the Aircraft.
 
8.5	Title to Parts	
Subject to the provisions hereof, title to all Parts incorporated or installed in or attached or added to the Aircraft or any part thereof as the result of any alteration, modification or addition shall, without further act, vest in Owner and become subject to this Lease, any Superior Lease and any Mortgage; provided, however, that so long as no Default or Event of Default shall have occurred and be continuing, at any relevant time during the Term, Lessee may remove any Part from the Aircraft or any part thereof, provided that (a) such Part is in addition to, and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to the Aircraft or any part thereof at the time of delivery thereof hereunder or any Part in replacement of, or substitution for, any such original Part; (b) such Part is not required to be incorporated or installed in or attached or added to the Aircraft or any part thereof pursuant to the terms hereof; and (c) such Part can be removed from the Aircraft or any part thereof without diminishing or impairing the value, utility or airworthiness which the Aircraft or any part thereof would have had at such time had such addition not occurred. Upon the removal by Lessee of any such Part as above provided, title thereto shall, without further act, vest in Lessee free and clear of all Lessor Liens and such Part shall no longer be deemed a Part hereunder. Title to any Part not removed by Lessee as above provided prior to the return of the Aircraft to Lessor hereunder shall remain with Owner and subject to this Lease, any Superior Lease and any Mortgage.
 
8.6	Post-Delivery Modifications; Change in State of Registration	
 
 	8.6.1	Lessee agrees to complete the alterations, modifications and additions to the Aircraft outlined in Schedule 9 (collectively, the “ Post-Delivery Modifications ”) promptly (and, in any event, within three (3) months) following the date on which Lessor provides Lessee with all necessary Service Bulletins and data plates to enable Lessee to do so. Lessor’s representatives shall, subject to obtaining all necessary security clearances from the Authorised Maintenance Performer, be entitled to observe the Post-Delivery Modifications and inspect them upon completion. The date following the Delivery Date on which the Post-Delivery Modifications are completed shall be the “ Modification Completion Date ”.	
 
 	8.6.2	On the Modification Completion Date Lessee shall receive a credit against Basic Rent in an amount equal to *****, which shall be applied to the instalment of Basic Rent due on the Basic Rent Payment Date immediately following the Modification Completion Date.	
 
 	8.6.3	Lessor and Lessee shall cooperate with each other to ensure that, on the Modification Completion Date, the Aircraft is, at the cost of Lessor, de-registered from the registry of Mexico and simultaneously re-registered in the registry of the United States of America (which, for the avoidance of doubt, shall then be deemed to become the “State of Registration” under this Lease). Lessee agrees to perform and do all such acts and things and execute and deliver any and all such	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	instruments as Lessor may reasonably require to effect such de-registration and re-registration and to perfect or protect the interests of Lessor, Owner and any Financier in the registry of the United States of America and the International Registry including, without limitation, the execution of an IDERA and a new Deregistration Power of Attorney if requested by Lessor (acting reasonably). Without limiting the generality of the foregoing, in connection with such re-registration and to the extent required, Lessee shall facilitate inspection of the Aircraft (including the Aircraft Records) by an FAA Designated Airworthiness Representative and by applying for an FAA Standard Certificate of Airworthiness for the Aircraft.	
 
 	8.6.4	Following such re-registration, Lessor shall (or shall procure that Owner shall) file all renewal documentation required to be provided by the Lessor or Owner in order to effect the Aircraft’s continued registration with the FAA throughout the remainder of the Term.	
 
9.	TAXES	
 
9.1	General	
Lessee shall pay, assume liability for and indemnify, protect, defend, save and hold each Tax Indemnitee, harmless from and against, all Taxes which are imposed by any government (or any political subdivision or fiscal or taxing authority thereof) and are imposed on or with respect to, or are measured by, (a) this Lease or any other Relevant Document, (b) the Aircraft or any part thereof, (c) the acceptance, rejection, delivery, possession, use, presence, storage, registration, deregistration, modification, maintenance, operation, sale in connection with the exercise of remedies under Clause 16, return, import, export, subleasing, repair, overhaul, transportation, landing, redelivery, leasing or other disposition of the Aircraft or any part or portion thereof, or (d) the receipts, earnings, insurance proceeds or other amounts arising from the Aircraft or any Part, or the Relevant Documents, provided, however, the foregoing indemnity shall not apply to the following Taxes (collectively, “ Excluded Taxes ”): (i) Taxes imposed on or levied or measured on the net income, profits, gains, capital, net worth, capital stock, franchise, business activity Taxes or other similar Taxes imposed on the privilege of doing business or in the nature of an alternative minimum Tax, assessed on Lessor or any Tax Indemnitee by any Government Entity in the jurisdiction in which Lessor or a Tax Indemnitee is organized, based, maintains an office or other fixed place of business, carries on business through a permanent establishment or is deemed to have its principal place of business unless such Taxes result from (x) the use or location of the Aircraft in such jurisdiction or (y) Lessor or such Tax Indemnitee being deemed to be organized, based, maintain an office or other fixed place of business, or to carry on business through a permanent establishment, or is deemed to have its principal place of business, in any such case, in such jurisdiction solely as a result of Lessor having entered into this Lease or any other Relevant Document; (ii) Taxes imposed with respect to any period prior to the Delivery Date or after return of the Aircraft pursuant to Clause 14; (iii) Taxes imposed on or with respect to a voluntary or involuntary transfer, sale or other disposition by a Tax Indemnitee of all or any part of its right, title and interest in, to or under the Aircraft, the Airframe, any Engine (or any Part thereof except the transfer of a Part pursuant to Clause 8 or the transfer of any Engine pursuant to Clause 10.2) or any of the Relevant Documents or any loan secured by the foregoing to any person or entity, unless any such transfer occurs when an Event of Default has occurred and is continuing; (iv) Taxes which the relevant Tax Indemnitee is subject to as a result of business or transactions unrelated to the transactions contemplated by the Relevant Documents; (v) Taxes caused by the gross negligence, wilful misconduct, or breach by a Tax Indemnitee of its representations or covenants under this Lease or the
 
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Relevant Documents; (vi) any increase in Taxes imposed on a transferee Tax Indemnitee of any interest of a transferor Tax Indemnitee, or as a result of the change in jurisdiction of incorporation of the relevant Tax Indemnitee, in any such case under the law in effect on the date of such transfer or change of jurisdiction, or enacted on the date of such transfer or change of jurisdiction and scheduled to come into effect after the date of the relevant transfer; (vii) Taxes arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of adverse consequences and further provided that Lessee has notified such Tax Indemnitee of the relevant Tax, such certification and other requirement (if any) within sufficient time so as to allow such Tax Indemnitee, acting with reasonable diligence, to consider the implications thereof and comply with the applicable certification or other requirement; (viii) Taxes that would not have been imposed but for a Lessor Lien; (ix) Taxes that are being contested in accordance with the provisions of Section 9.6 hereof during the pendency of such contest, except to the extent that the Lessee is required to pay such Tax pursuant to Section 9.6; (x) Taxes imposed as a result of any Tax Indemnitee’s or its affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code; (xi) Taxes related to any U.S. federal withholding Tax imposed under FATCA, unless attributable to the status or acts or omissions of Lessee; or (xii) Taxes imposed to the extent such Tax would not have been imposed but for any amendment, supplement, modification, contest or waiver to this Lease or any other Relevant Agreements (but excluding any thereof (x) requested or consented to by Lessee or (y) entered into, concluded, undertaken or given following the occurrence of a Default or Event of Default).
 
9.2	Withholding Taxes	
Notwithstanding anything to the contrary contained in this Clause 9, if Lessee is required by law to make any withholding from Rent or any other amount payable by Lessee to an Indemnitee or Tax Indemnitee under any of the Relevant Documents, as soon as practicable after Lessee makes any withholding from any amount payable to an Indemnitee or Tax Indemnitee under any of the Relevant Documents, Lessee shall pay the relevant Tax to the relevant governmental authority and deliver to such Indemnitee or Tax Indemnitee a receipt or other document, reasonably satisfactory to such Indemnitee or Tax Indemnitee and reasonably obtainable by Lessee, evidencing such withholding and the payment of the amount withheld to the relevant governmental authority, for the purpose of enabling such Indemnitee or Tax Indemnitee to substantiate a claim for credit or deduction for income tax purposes of the amounts so withheld. With the exception of Excluded Taxes, Lessee shall pay to such Tax Indemnitee such additional amount as may be necessary to enable such Tax Indemnitee to receive (after such withholding) and retain an amount equal to the full amount then payable to such Tax Indemnitee absent such withholding. Each Indemnitee and each Tax Indemnitee shall cooperate with Lessee to recover or reclaim any Tax paid by Lessee hereunder and any amount recovered shall be repaid to Lessee. Lessee shall be responsible for all costs and expenses incurred by any Indemnitee or Tax Indemnitee as a result of such cooperation.
 
9.3	Amount of Indemnity	
Each indemnity provided for in Clauses 9.1, 9.2 or Clause 12, shall be in an amount which, after taking into account all Taxes (other than Excluded Taxes), fees or other charges payable or imposed with respect thereto or as a result of the receipt thereof by any Indemnitee or Tax Indemnitee in any jurisdiction (whether or not excepted above), shall be equal to the amount of such indemnity otherwise payable under this Lease, taking into account any deductions, credits or other Tax benefits claimable by the Indemnitee or Tax
 
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Indemnitee and the cash flow benefits, if any, of receipts and payments. Any payment required to be made by Lessee under Clause 9.1 shall be due and payable within 30 days following Lessee’s receipt of Lessor’s written demand therefor (accompanied by an invoice or a written statement of the Indemnitee or Tax Indemnitee describing in reasonable detail the Taxes for which the relevant Indemnitee or Tax Indemnitee is demanding an indemnity and the computation of the amount of the indemnity being demanded), subject to the provisions of Clause 9.4.
 
9.4	Tax Credit	
If any Indemnitee or Tax Indemnitee, in good faith, determines that it has realized and retained a Tax benefit (by way of deduction, credit or otherwise) as a result of any payment for which Lessee is liable under Section 9.1, or 9.2, the Indemnitee or Tax Indemnitee shall, provided no Default or Event of Default shall have occurred which is continuing, pay to Lessee as soon as practicable after the Tax benefit has been realized (but not before Lessee has made all payments and indemnities to a Tax Indemnitee required under this Section 9) an amount (including interest received and attributable thereto) which will ensure that (after taking account of the payment itself) the relevant Indemnitee or Tax Indemnitee is in no better and no worse position than it would have been if the Tax benefit had not been realized. Nothing in this Section 9.4 shall: (i) interfere with the right of Indemnitee or Tax Indemnitee to arrange its Tax affairs in whatever manner it thinks fit; (ii) oblige Indemnitee or Tax Indemnitee to disclose any information relating to its Tax affairs or any Tax computations, or (iii) make any payment if and to the extent that, as a result thereof, Lessor’s ability to retain such Tax benefit will be prejudiced.
 
9.5	Lessee Indemnity	
Lessor or any Tax Indemnitee shall indemnify and hold harmless Lessee on demand from any Excluded Taxes relating to the Aircraft or any Relevant Document which Lessee is required to pay (other than Excluded Taxes payable by Lessee as a result of its gross negligence, wilful misconduct, or breach of its representations or covenants under this Lease or the Relevant Documents) so that Lessee is left in exactly the same position as it would have been had such Excluded Taxes not been paid by it.
 
9.6	Contest	
Lessor will give Lessee written notice if any claim is made against any Tax Indemnitee for any Tax that is subject to indemnification under Clause 9.1. If Lessee so requests in writing within 30 days after receipt of such notice, the relevant Tax Indemnitee shall permit Lessee to contest the claim in the name of the Tax Indemnitee or in the name of Lessee, to the extent permitted by law. However, if such claim, whether alone or together with other claims which could be made with respect to other transactions to which the Tax Indemnitee is then a party could (if sustained) have an adverse effect on the Tax Indemnitee’s business or financial affairs (a “ Special Claim ”), or if Lessee shall not be permitted by law to contest a claim (other than a Special Claim) on behalf of the Tax Indemnitee, then the Tax Indemnitee shall contest such claim in good faith. Notwithstanding the foregoing, no claim shall be contested unless and until: (a) the Tax Indemnitee shall have received (i) an indemnity reasonably satisfactory to it for all expenses reasonably expected to be paid in contesting the claim (including attorneys’ and accountants’ fees and disbursements) and (ii) written acknowledgement by Lessee of its liability hereunder (if such contest is decided adversely) in respect of such Taxes; (b) the action to be taken will not involve any material risk of the sale, forfeiture, seizure or loss of, or the creation of any Lien (except a Lien which Lessee shall have provided security in an amount and manner reasonably satisfactory to Lessor) on, the Aircraft or any part thereof or any interest therein; (c) if such contest shall be conducted in a manner requiring the payment of the claim, Lessee shall have advanced the amount required on an interest-free
 
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after-tax basis; (d) no Event of Default shall have occurred and be continuing and Lessor shall be receiving all amounts of Rent when due, without reduction by reason of any Taxes; and (e) if such claim is a Special Claim, the relevant Tax Indemnitee shall have received a legal opinion (at the expense of Lessee) from counsel satisfactory to the Tax Indemnitee indicating that a reasonable basis for such contest exists. The relevant Tax Indemnitee and Lessee shall in good faith consider the other party’s views regarding the conduct of the contest. The relevant Tax Indemnitee and Lessee shall provide to each other, upon request, such reasonably obtainable information and such other reasonable assistance as may be necessary or advisable for the effective evaluation or conduct of such contest. Notwithstanding the foregoing provisions of this Clause 9.4, if at any time any Tax Indemnitee waives its right of indemnification under this Clause 9 in respect of a claim, or if, after having received payment of indemnification from Lessee hereunder in respect to such claim, such Tax Indemnitee tenders such payment to Lessee, then Lessee shall not be entitled to contest, or to continue to contest, any such claim. Each Tax Indemnitee shall (a) act in good faith when settling any claim for any Tax that is subject to indemnification under Clause 9.1, and (b) not settle any such claim without first consulting with Lessee.
 
9.7	Tax Returns	
Lessee will provide such information as may be reasonably requested by any Tax Indemnitee and reasonably obtainable by Lessee to enable any Tax Indemnitee to fulfil its tax filing requirements with respect to the transactions contemplated by the Relevant Documents. In the event that any return, statement or report is required to be made or filed by Lessee or, if Lessee has actual knowledge thereof, by any Tax Indemnitee with respect to any Tax required to be indemnified against by Lessee under this Clause 9, Lessee shall notify Lessor or the relevant Tax Indemnitee of such filing requirement and (a) to the extent permitted by law and timely requested by the relevant Tax Indemnitee or required by law, make and file in its own name such return, statement or report (together with any applicable Tax payment) in such manner as will show the ownership of the Aircraft in Owner and furnish Lessor with a copy of such return, statement or report or (b) where such return, statement or report is required to be in the name of or filed by any Tax Indemnitee, prepare and furnish such return, statement or report for filing by the relevant Tax Indemnitee in such manner as shall be reasonably satisfactory to the relevant Tax Indemnitee and send the same (together with any applicable Tax payment) to the relevant Tax Indemnitee for filing no later than 30 days prior to the due date. Where a Tax Indemnitee is required to make or file a return, statement or report reflecting items other than or in addition to Taxes indemnified against by Lessee under this Clause 9, Lessee shall, upon Lessor’s timely and reasonable request, provide the relevant Tax Indemnitee with information readily available to Lessee, within a reasonable time, sufficient to permit such return, statement or report to be properly made and timely filed.
If Lessee timely satisfies the requirement set out herein and Lessor does not timely file the relevant report, return or statement (together with any payment of Tax furnished by Lessee) that Lessor or the relevant Tax Indemnitee is required to file pursuant to the foregoing, and if such failure results in a Tax liability that is in excess of the Tax liability that Lessee would be obligated to pay and indemnify Lessor or such Tax Indemnitee for, Lessor shall indemnify Lessee for any such excess.
 
9.8	Certificate of Tax Residence	
Lessor shall provide or cause to be provided to Lessee, from time to time following Lessee’s request, letters from the Office of the Irish Revenue Commissioners (in such Office’s usual form) confirming that each of Lessor and Owner Participant is resident in Ireland for Tax purposes. Lessee may not request such letters more frequently than once in each year unless it requires more recent letters than those most recently provided by Lessor to satisfy a requirement of applicable law.
 
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10.	EVENTS OF LOSS	
 
10.1	With Respect to the Aircraft	
Upon the occurrence of an Event of Loss with respect to the Aircraft, Lessee shall forthwith (and in any event within three (3) Business Days after becoming aware of such occurrence) give Lessor written notice of such Event of Loss, and Lessor and Lessee shall proceed diligently and cooperate fully with each other in the recovery of any and all proceeds of insurance applicable thereto. Basic Rent shall continue to accrue and be paid hereunder until such time as Lessor has received the full amount due under this Clause 10.1. On the earlier of the date of receipt of the Event of Loss Proceeds or 60 days following the date of occurrence of such Event of Loss or, in the case of a constructive, compromised or agreed Event of Loss, the date of declaration thereof (the “ Event of Loss Payment Date ”), Lessee shall pay or procure the payment to Lessor of an amount equal to the aggregate of:
 
 	10.1.1	all arrears of Rent and other amounts due from Lessee but unpaid under any Relevant Document together (in respect of amounts not paid when due) with interest thereon from the due date thereof to the date of actual payment at the Incentive Rate; and	
 
 	10.1.2	the Insured Value; and	
 
 	10.1.3	without duplication of interest payable pursuant to Clause 10.1.1, if Lessee has not paid any of the amounts referred to in Clauses 10.1.1 or 10.1.2 on the Event of Loss Payment Date, an amount equal to interest on such unpaid amount for each day on which any of such amounts remain unpaid at the Incentive Rate,	
less an amount equal to (x) any Basic Rent already received by Lessor with respect to the period commencing on (but excluding) the Event of Loss Payment Date, and (y) any Event of Loss Proceeds already received by Lessor, Owner or any Financier, as the case may be.
At such time as Lessor has received the entire amount set forth above, Lessor, subject to the rights of the insurers, shall make a payment to Lessee in an amount equal to the aggregate of (a) the Security Deposit and (b) all Maintenance Payment Balances, and Lessor shall, subject to the rights of the insurers, cause to be executed all necessary bills of sale and other documents required to transfer to Lessee, free and clear of all Lessor Liens, all Owner’s right, title, and interest, “as is, where is,” without recourse or warranty, express or implied, in and to (a) the Aircraft, (b) all claims for damage to the Aircraft, if any, against third persons arising from the Event of Loss (unless any insurer requires that such claims be assigned to it), and (c) all rights to any insurance claims and proceeds under all insurance, except liability insurance, maintained by Lessee hereunder, all without representation, recourse or warranty of any kind whatsoever. Lessee shall be entitled to receive all insurance proceeds applicable to the Aircraft over and above the amount due to Lessor under the preceding paragraph, if any, as compensation for the loss of Lessee’s interest as Lessee in the Aircraft.
 
10.2	With Respect to an Engine or the APU	
Upon the occurrence of an Event of Loss with respect to an Engine or the APU under circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Lessee shall forthwith (and in any event within three (3) Business Days after such occurrence) give Lessor written notice thereof and Lessee shall replace such Engine or APU as soon as reasonably possible (and, in any event, within 90 days following such Event of Loss) by duly conveying to Owner, free and clear of all Liens, title to another engine or, as appropriate, auxiliary power unit of the same or an improved model and (in the case of a replacement engine) suitable for installation and use on the Airframe with the
 
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remaining Engine, which engine or auxiliary power unit shall have a value and utility at least equal to, and be in as good operating condition as, the Engine or APU with respect to which such Event of Loss shall have occurred, assuming such Engine or APU was of the value and utility and in the condition and repair as required by the terms hereof immediately prior to the occurrence of such Event of Loss. Such replacement engine or auxiliary power unit shall be deemed an “Engine” or “APU”, as appropriate and as defined herein for all purposes hereunder. Lessee agrees promptly to notify Lessor of any such substitution, provide Lessor with an officer’s certificate confirming compliance with this Clause 10.2 and to take such action and execute such documents, including a warranty bill of sale, as Lessor may reasonably request in order that title to any such replacement Engine or APU shall be duly and properly vested in Owner, and to ensure that such replacement Engine or APU is covered by any Mortgage and that the rights of the Mortgagee in respect of such replacement Engine or APU are duly and properly perfected and protected, and that any such replacement Engine or APU shall be duly and properly leased hereunder to the same extent as any Engine or APU replaced thereby. Lessor shall take such action, or shall cause such action to be taken, and shall execute, or shall cause to be executed, such documents as are reasonably necessary to transfer to Lessee, free and clear of Lessor Liens but subject to the rights of the insurers, all Owner’s right, title and interest, “as is, where is”, without recourse or warranty, express or implied in or to the Engine or APU replaced pursuant to the preceding sentence to Lessee or its designee. At the same time as title to the new Engine or APU is vested in Owner, the Maintenance Payment Balance attributable to such new Engine or APU shall be adjusted (upwards or downwards) to reflect the status of such new Engine or APU. Any upwards adjustment will be paid by Lessee to Lessor within ten (10) Business Days of receipt of Lessor’s invoice. Following any such downward adjustment, provided no Default or Event of Default has occurred which is continuing, Lessor will grant Lessee a credit against future Maintenance Payment Amounts due from Lessee in an amount equal to the amount of such adjustment.
 
10.3	Application of Payments from Government Entities	
Payments received by Lessor or Lessee from any Government Entity with respect to an Event of Loss resulting from the condemnation, confiscation or seizure of, or requisition of title to or use of the Aircraft, the Airframe or any of the Engines, shall, as between Lessor and Lessee, be retained by Lessor, if received by Lessor, or promptly paid over to Lessor, if received by Lessee and shall be applied in satisfaction of Lessee’s payment obligations under the Relevant Documents (including, without limitation, under Clause 10.1). If all amounts payable by Lessee to Lessor, any Indemnitee and/or any Tax Indemnitee pursuant to Clause 10.1 have been received by the relevant person in full, Lessor shall promptly remit to Lessee any payments described at the beginning of this Clause 10.3 exceeding such amounts payable to Lessor, any Indemnitee and/or any Tax Indemnitee pursuant to Clause 10.1. Payments received by Lessor or Lessee from any Government Entity with respect to a requisition of use not constituting an Event of Loss during the Term of the Aircraft, the Airframe or any of the Engines shall be paid to (or retained by) Lessee, and Lessee’s obligation to make all payments of Rent shall continue undiminished. Payments received by Lessor or Lessee with respect to periods after the end of the Term shall be paid to (or retained by) Lessor; provided, however, that if an Event of Loss has occurred with respect to the Aircraft and Lessor has received all amounts payable by Lessee under Clause 10.1, all such payments shall be retained by Lessee.
 
11.	INSURANCES	
 
11.1	Obligation to Insure	
 
 	11.1.1	Lessee will at all times during the Term at its own expense maintain in full force and effect insurances with respect to the Aircraft with insurers and through the intermediary of the Broker and upon terms reasonably satisfactory to Lessor.	
 
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 	11.1.2	The Insurances will be effected either:	
 
 	(a)	on a direct basis with insurers of recognised standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) reasonably satisfactory to Lessor; or	
 
 	(b)	with a single insurer or group of insurers reasonably satisfactory to Lessor which does not retain the risk but which effects substantial reinsurance (the “ Reinsurances ”) with reinsurers in the leading international insurance markets and through brokers of recognised standing and reasonably acceptable to Lessor for a percentage reasonably acceptable to Lessor of all risks insured.	
 
11.2	Requirements	
Lessor’s current requirements for the Insurances are as specified in this Clause 11 and in Schedule 5. Lessor may from time to time following consultation with Lessee upon the occurrence of a material change in aviation insurance practice affecting airline carriers operating aircraft similar to the Aircraft on routes similar to those of Lessee stipulate other reasonable requirements for the Insurances so that the scope and level of cover is maintained in line with best industry practice, as applied to airline carriers operating aircraft similar to the Aircraft on routes similar to those of Lessee, and so that the interests of Lessor and the other Indemnitees are protected.
 
11.3	Changes	
If at any time following a material change in the financial condition of any insurer or reinsurer Lessor, acting reasonably, wishes to revoke its approval of such insurer or reinsurer, Lessor and/or its insurance adviser will consult with Lessee and the Broker as to whether that approval should be revoked to protect the interests of the parties insured. If, following that consultation, Lessor reasonably considers that any change should be made, Lessee will promptly arrange or procure the arrangement of alternative cover satisfactory to Lessor, acting reasonably and in accordance with insurance industry practice, as applied to airline carriers operating aircraft similar to the Aircraft on routes similar to those of Lessee.
 
11.4	Insurance Covenants	
Lessee will:
 
 	11.4.1	ensure that all legal requirements relating to the insurance of the Aircraft which may from time to time be imposed by the laws of the State of Registration or any country to, from or within which the Aircraft may be operated are complied with and in particular comply with all requirements which are necessary to ensure that:	
 
 	(a)	the Aircraft is not in danger of detention or forfeiture;	
 
 	(b)	the Insurances remain valid and in full force and effect; and	
 
 	(c)	the interests of the Indemnitees in the Insurances and the Aircraft are not prejudiced;	
 
 	11.4.2	not permit the Aircraft to be used for any purpose or in any manner inconsistent with or not fully covered by the Insurances or outside any geographical limit imposed by the Insurances;	
 
 	11.4.3	comply with the terms and conditions of each policy of the Insurances and not do, consent or agree to any act or omission which:	
 
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 	(a)	invalidates or may invalidate the Insurances; or	
 
 	(b)	renders or may render void or voidable the whole or any part of any of the Insurances; or	
 
 	(c)	brings any particular liability within the scope of an exclusion or exception to the Insurances; or	
 
 	(d)	in any way results in discrimination between the insurance cover applicable to the Aircraft and the insurance cover applicable to other aircraft operated by Lessee;	
 
 	11.4.4	not take out any insurance or reinsurance in respect of the Aircraft other than that required under this Lease, provided, however, Lessee may, without prior written approval of, or notification to, Lessor, procure additional insurance coverage, under the condition that no additional insurance procured by Lessee shall have the effect of suspending, impairing, defeating, invalidating or rendering unenforceable or reducing, in whole or in part, the coverage of or the proceeds payable under any Insurance required to be provided and maintained by Lessee under this Lease;	
 
 	11.4.5	commence renewal or replacement procedures on a timely basis prior to expiry of any of the Insurances and provide to Lessor:	
 
 	(a)	if requested by Lessor, a status report of renewal or replacement negotiations fourteen (14) days prior to each such expiry date; and	
 
 	(b)	certificates of insurance (or where appropriate certificates of reinsurance), and Broker’s (or any reinsurance brokers’) letters of undertaking each in form and substance reasonably satisfactory to Lessor within seven (7) days after each renewal or replacement date;	
 
 	11.4.6	on request made from time to time and in each case subject to the confidentiality provisions of Clause 17.6, procure that copies of the policies and endorsements (excluding premium information) with respect to the Insurances required under this Clause 11 be made available to Lessor on reasonable notice for inspection by its representative during normal business hours at the principal place of business of Lessee or the Broker;	
 
 	11.4.7	promptly following Lessor’s request (such to be made not more often than once in each year unless an Event of Default has occurred which is continuing), provide to Lessor confirmation that the Insurance premiums have been paid;	
 
 	11.4.8	not make any material modification or alteration to the Insurances which is adverse to the interests of any of the Indemnitees;	
 
 	11.4.9	be responsible for any deductible under the Insurances;	
 
 	11.4.10	provide any other information or assistance in respect of the Insurances that Lessor may reasonably request in writing;	
 
 	11.4.11	effect and maintain, to the fullest extent customarily available in the international aviation insurance markets at a reasonable cost to Lessee, in respect of the Aircraft at all times cover in respect of risks associated with failure of any Computer System to be Year 2000 Compliant (so that if at any time “clause AVN2000A Date Recognition Clause” or any equivalent clause is endorsed on the Insurances, Lessee will ensure that “Clause AVN2001A Date Recognition Limited Coverage Clause” and “Clause AVN2002A Date Recognition Limited Coverage Clause” or equivalent clauses are endorsed on the Insurances), where;	
 
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 	(a)	“Computer System” means any computer hardware and software or any equipment operated by electronic means; and	
 
 	(b)	“Year 2000 Compliant” means, in relation to any Computer System, that any references to or use of a date before, on or after 31 December, 1999 in the operation of the Computer System will not have an adverse effect on the use of that Computer System.	
 
11.5	Failure to Insure	
If Lessee fails to maintain the Insurances in compliance with this Lease, Lessor may, but is not obliged to (without prior prejudice to any other rights of Lessor under this Lease):
 
 	11.5.1	effect and maintain Insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain a “Lessor’s interest” policy) as it reasonably considers appropriate. Any sums so expended by it will immediately become due and payable by Lessee to Lessor together with interest thereon at the Incentive Rate from the date of expenditure by it up to the date of reimbursement by Lessee; and	
 
 	11.5.2	at any time while such failure is continuing, require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by Lessor until the failure is remedied to its satisfaction.	
 
11.6	Settlement of Claims	
Lessee will not settle any claims arising under any of the physical loss or damage Insurances in excess of the Claims Limit or an equivalent amount in another currency without the prior written consent of Lessor, that consent not to be unreasonably withheld or delayed.
 
11.7	Loss Adjustment	
 
 	11.7.1	In the event of damage to the Aircraft or any part thereof not amounting to an Event of Loss, and provided that no Default or Event of Default has occurred and is continuing, Losses arising from the damage will be adjusted with Lessee and:	
 
 	(a)	if the Loss does not exceed the Claims Limit or an equivalent amount in another currency, the loss proceeds of insurance will be paid directly to Lessee; and	
 
 	(b)	if the Loss exceeds the Claims Limit or an equivalent amount in another currency, the loss proceeds of insurance will be paid directly to the repairer or, with Lessor’s express authorisation, to Lessee or as Lessee may direct.	
provided always that (for the avoidance of doubt) (i) if an Event of Loss occurs with respect to the Aircraft or any part thereof, the Losses, or (ii) if any Default or Event of Default has occurred and is continuing, all Losses, in each case arising in connection with the applicable damage to the Aircraft or part thereof will be adjusted with Lessor and all loss proceeds of insurance payable in connection therewith will be paid to Lessor or as Lessor may direct (save that upon the cure of any Default or Event of Default referred to in paragraph (ii) of this proviso, paragraph (ii) of this proviso shall no longer apply with respect to such Default or Event of Default).
 
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 	11.7.2	All insurance proceeds in respect of third party liability will, except to the extent paid by the Insurers to the relevant third party, be paid to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made.	
 
11.8	Continuance of Liability Cover	
 
 	11.8.1	From the date of expiration or termination of the Term, Lessee will continue to maintain the liability insurance referred to in Schedule 5 for the benefit of Lessor and the other Indemnitees (“ Tail Insurance ”) until the earlier of (a) the next Six Year Check or Twelve Year Check and (b) the second anniversary of the date the Aircraft was returned to Lessor.	
 
 	11.8.2	Lessee’s obligation in Clause 11.8.1 to maintain Tail Insurance will not be affected by Lessee ceasing to be the lessee of the Aircraft and/or any of the Indemnitees ceasing to have any interest in respect of the Aircraft.	
 
11.9	Lessor’s Right to Insure	
Lessee acknowledges that each of Lessor, Owner and each Financier has an insurable interest in the Aircraft. Lessor, Owner and each Financier shall have the right to obtain at its own expense insurance or contingent insurance in its own name with respect to such insurable interest. Lessee will render to Lessor, Owner and each Financier reasonable assistance as from time to time requested by Lessor, Owner or any Financier, as the case may be, in order that Lessor, Owner and each Financier may adequately protect such insurable interest. No insurance so obtained by Lessor, Owner or any Financier shall prejudice the insurance maintained by Lessee pursuant to this Lease or the right of Lessee, the Additional Insureds or any loss payee’s rights of recovery thereunder.
 
12.	GENERAL INDEMNIFICATION	
 
12.1	Scope	
Lessee shall indemnify each Indemnitee and hold each Indemnitee harmless from any and all Losses which may result from or arise out of (a) the condition, use or operation during the Term of the Aircraft or any part thereof either in the air or on the ground, (b) any maintenance, service, repair, overhaul, possession, delivery, performance management, registration, control, return or testing of the Aircraft or any part thereof during the Term, whether or not the Aircraft or any part thereof is at the time in the possession of Lessee, (c) any infringement or alleged infringement of any patent or other intellectual property rights as a result of any article, design or material in the Aircraft, (d) any redelivery flight, demonstration flight or inspection of the Aircraft during the Term, or (e) Lessee’s failure to take delivery of or to return the Aircraft; provided, however, that Lessee shall not be required to indemnify any Indemnitee for any Loss, (i) to the extent that such Loss is caused by acts or events which occur (X) prior to the Delivery Date or (Y) after expiration or earlier termination of the leasing of the Aircraft hereunder and return of the Aircraft to Lessor in accordance with Clause 14, unless attributable to acts, omissions, circumstances or events occurring prior thereto, (ii) which is a Tax or a loss of Tax benefit (it being understood that Clause 9 provides for Lessee’s liability with respect to Taxes), or (iii) to the extent that such Loss results from the gross negligence or wilful misconduct of such Indemnitee. Upon payment in full to any Indemnitee of any indemnities contained in this Clause 12 by Lessee, Lessee, to the extent permissible under applicable law, and provided no Default or Event of Default has occurred which is continuing, shall be subrogated to all rights and remedies which such Indemnitee has or may have against any Manufacturer, Supplier or other person.
 
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12.2	Lessee’s Release	
Lessee hereby waives and releases any claim now or hereafter existing against any Indemnitee on account of any and all claims, demands, suits, causes of action and all legal proceedings, whether civil or criminal, damages, losses, liabilities (including, but not limited to, strict liability in tort), obligations, penalties, judgments or fines and other sanctions, and any costs and expenses in connection therewith, including reasonable legal fees and expenses of whatever kind and nature, which may result from or arise out of injury to or death of personnel of Lessee or its agents or contractors or loss or damage to property of Lessee or the loss of use of any property which may result from or arise out of (a) the condition, use or operation during the Term of the Aircraft or any part thereof, either in the air or on the ground, (b) any maintenance, service, repair, overhaul, possession, delivery, performance management, registration, control, return or testing of the Aircraft or any part thereof during the Term, whether or not the Aircraft or any part thereof is at the time in the possession of Lessee, or (c) any acceptance flight, demonstration flight or inspection of the Aircraft prior to the commencement of the Term.
 
12.3	Notice and Contest	
An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Loss as to which indemnification is sought pursuant to Clause 12.1; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder except (other than in the case of any Loss suffered by a Financier or its shareholders, affiliates, directors, officers, agents, employees, successors and permitted assigns and transferees) to the extent Lessee’s successful defense of any such claimed Loss is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to Clause 12.1, Lessee shall have the right to investigate and, in its discretion, to defend or compromise (other than with respect to a compromise of a non-monetary Loss, the compromise of which may adversely affect the Indemnitee), any Loss for which indemnification is sought under Clause 12.1, and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that such proceedings do not involve any risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in all respects) or any risk of any civil or criminal penalty being assessed against any Indemnitee. Where Lessee or its insurers undertake the defence of an Indemnitee with respect to a Loss, no additional legal fees or expenses of such Indemnitee in connection with such defence of such Loss shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee a conflict of interest exists or reasonably likely to arise and, as a result, it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense (or at the expense of Lessee in the event of a conflict of interest as described in the immediately preceding sentence) in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in Clause 12.1. Nothing in Clause 12 shall be deemed to require an Indemnitee to contest any Loss or to assume responsibility for or control of any judicial proceeding with respect thereto.
 
12.4	Repayment	
If an Indemnitee shall obtain a repayment of any Indemnified Amount paid by Lessee, such Indemnitee shall, so long as there exists no Default or Event of Default (or promptly following cure thereof), promptly pay to Lessee the amount of such repayment, together with the amount of any interest received by such Indemnitee on account of such repayment.
 
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12.5	Payment	
Subject to the provisions of Clause 12.3, Lessee shall pay directly to the relevant Indemnitee all amounts due under this Clause 12 upon the earlier of (i) the date any such amount is stated to be due by and (ii) 60 days of the receipt of notice that such payment is due.
 
13.	LIENS	
Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien on or with respect to the Aircraft or any part thereof or any interest therein, except Permitted Liens. Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such Lien not excepted above if the same shall arise at any time with respect to the Aircraft or any part thereof. Lessee acknowledges, and agrees to acknowledge before any judicial or administrative authority as may be necessary the right of ownership of Lessor and/or Owner in respect of the Aircraft, and that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the transactions contemplated by this Lease, and that Lessee does not otherwise have any right, title or interest in or to the Aircraft and the Aircraft does not constitute any part of its assets.
 
14.	RETURN OF AIRCRAFT	
This Clause 14 shall not limit any rights or remedies under Clause 16. Upon the expiration or earlier termination of this Lease, Lessee shall return the Aircraft to Lessor at the Redelivery Location in the condition and in all respects in accordance with the provisions of Part B of Schedule 6, free and clear of all Liens (other than Lessor Liens). All references in this Lease or elsewhere to this Clause 14 shall be deemed to refer also to Part B of Schedule 6. Following return of the Aircraft, Lessee shall, if Lessor shall so request (a) if upon return the Aircraft was registered with the DGAC, procure the de-registration of the Aircraft from the Aeronautics Authority, (b) if upon return the Aircraft was registered with the FAA, de-register this Lease from the register maintained by the FAA, and (c) remove the Aircraft from its operating certificate.
 
15.	EVENTS OF DEFAULT	
Each of the following events shall constitute an Event of Default and shall be a material breach which Lessor is entitled to treat as a repudiation of this Lease by Lessee:
 
 	15.1.1	Lessee shall fail to make any payment of Basic Rent within three (3) Business Days of the date when the same is due and payable hereunder; or	
 
 	15.1.2	Lessee shall fail to procure and maintain all insurance required by Clause 11 or Lessee shall operate or permit the operation of the Aircraft at any time or in any geographic area when the insurance required by Clause 11 shall not be fully in effect; or	
 
 	15.1.3	Lessee shall fail to perform or observe any other of the covenants, conditions, or agreements to be performed or observed by it under the Relevant Documents and such failure shall continue for a period in excess of 20 Business Days from the date written notice is given by Lessor requiring the same to be remedied; or	
 
 	15.1.4	any representation or warranty made or deemed to be repeated by Lessee under any of the Relevant Documents or in any document or certificate furnished to Lessor in connection therewith or pursuant thereto shall prove to have been incorrect in any material respect when made or deemed to be repeated and, if the event giving rise to such incorrect representation or warranty is curable, such event shall not have been cured within fifteen (15) Business Days after the earlier of (a) receipt by Lessee of a written notice from Lessor advising Lessee of the existence of such misrepresentation or (b) actual knowledge of such misrepresentation by Lessee; or	
 
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 	15.1.5	Lessee disposes, or any Responsible Officer threatens that Lessee shall dispose, of all or a substantial or material part of its assets, rights or revenues; or	
 
 	15.1.6	either:	
 
 	(a)	an encumbrancer takes possession of, or an administrative or other receiver or manager or trustee or similar officer is appointed in respect of the whole or any substantial part of the assets, rights or revenues of Lessee or a liquidator or administrator is appointed in respect of Lessee; or	
 
 	(b)	a distress, execution, attachment, sequestration or other process is levied or enforced upon or sued out against any of the assets, rights or revenues of Lessee and is not discharged within 60 days; or	
 
 	(c)	a voluntary petition or application is presented by Lessee or on behalf of Lessee for the appointment of an administrator, receiver or manager or trustee or liquidator in respect of Lessee or all or any material part of its assets, rights or revenues; or	
 
 	(d)	an involuntary petition or application is presented for the appointment of an administrator, receiver or manager or trustee or liquidator in respect of Lessee or all or any material part of its assets, rights or revenues and such petition or application is not discharged within 60 days;	
 
 	15.1.7	Lessee is or becomes insolvent (in accordance with the Law of Insolvency Proceedings) or is or becomes unable or any Responsible Officer admits Lessee’s inability to pay its Indebtedness as it becomes due or suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business; or	
 
 	15.1.8	a resolution is passed or an order is made (and, except in the case of any such resolution or order passed or made at the request of Lessee, such resolution or order is not dismissed within 60 days) for any assignment, arrangement, rehabilitation, administration, custodianship, liquidation, dissolution concurso mercantil or other insolvency proceeding in respect of Lessee, or Lessee becomes subject to or enters into any of the foregoing; or	
15.1.9
 
 	(a)	any voluntary step (including a petition, proposal or the convening of a meeting) is taken by Lessee or its holding company with a view to a composition, assignment or arrangement with any creditors of, or the dissolution of, Lessee, or with a view to concurso mercantil or any other insolvency proceedings involving Lessee; or	
 
 	(b)	any involuntary step (including a petition, proposal or the convening of a meeting) is taken with a view to a composition, assignment or arrangement with any creditors of, or the dissolution of, Lessee, or with a view to concurso mercantil or any other insolvency proceedings involving Lessee and such proceedings are not discharged within 60 days; or	
 
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 	15.1.10	Lessee suspends payment of all or any class of its Indebtedness, or any Responsible Officer announces Lessee’s intention to do so, or a moratorium is declared in respect of any of its Indebtedness, or shall be adjudicated insolvent, or proceedings are commenced by Lessee under any law, regulation or procedure relating to reconstruction or readjustment of Indebtedness; or	
 
 	15.1.11	any steps are taken to enforce any Lien over any material part of the assets of Lessee; or	
 
 	15.1.12	in relation to Lessee, there occurs any event or any proceeding is taken, in any jurisdiction, which is analogous to or has an effect equivalent or similar to, any of those mentioned in Clauses 15.1.6, 15.1.7, 15.1.8, 15.1.9, 15.1.9 and 15.1.10 and 15.1.11; or	
 
 	15.1.13	the Aircraft or any part thereof shall be subleased or possession thereof transferred and such sublease or transfer does not comply with the provisions of Clauses 6.1 or 6.2; or	
 
 	15.1.14	any material adverse change occurs in the financial condition of Lessee which would materially and adversely affect Lessee’s ability to perform its obligations under any of the Relevant Documents; or	
 
 	15.1.15	SENEAM, ASA or any other relevant navigation, landing, fuel, airport, repair or similar fees or charges owed by Lessee shall not be fully paid when due or within any applicable period of grace for payment; provided that no Event of Default shall arise under this Clause 15.1.15 for so long as such fees or charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided, and there is no danger of detention, interference, sequestration, seizure or attachment with use or operation or sale, forfeiture or loss of the Aircraft; or	
 
 	15.1.16	Lessee fails to accept delivery of the Aircraft when validly tendered to Lessee in conformity with the delivery conditions set forth in Part A of Schedule 6 (and assuming satisfaction or waiver of the conditions set forth in Clause 2.4); or	
 
 	15.1.17	the existence, validity, enforceability in general or priority of the rights of Owner, as owner, or Lessor, as lessor, or the rights of any Financier in relation to the Aircraft are challenged by Lessee or any other person claiming by or through Lessee; or	
 
 	15.1.18	it becomes unlawful for Lessee to perform any of its obligations under any of the Relevant Documents or any of the Relevant Documents ceases to be in full force and effect or becomes wholly or partly invalid or unenforceable or otherwise ceases to be the legal, valid and binding obligation of Lessee; provided that, without prejudice to Lessor’s rights pursuant to this Lease as a result of the occurrence of such Event of Default, if Lessee shall so request in writing and no other Event of Default has then occurred which is continuing, Lessor and Lessee shall consult with each other in good faith for a period not to exceed 30 days following the occurrence of such event to determine whether this Lease and the transactions contemplated hereby can be restructured in a manner that will avoid the effects of such event, but without any obligation of Lessor or Lessee to implement any such restructuring; or	
 
 	15.1.19	any Indebtedness of Lessee the outstanding balance of which is in excess of ***** (or the equivalent in local currency) is not paid when due or becomes due prior to the date when it would otherwise have become due and has not been paid unless the validity of the obligation is being contested in good faith by appropriate proceedings; or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	15.1.20	any permits, licenses, consents, approvals and authorizations of or registrations with any Government Entity required by Lessee to authorize the execution, delivery, validity or enforceability of any of the Relevant Documents or the performance by Lessee of its obligations thereunder is modified or is not granted or is revoked, suspended, withdrawn or not renewed and the effect thereof is materially and adversely to affect the ability of Lessee to perform any of its obligations under any of the Relevant Documents; or	
 
 	15.1.21	the Aircraft or any part thereof is taken in execution, impounded, attached, seized, sequestered, detained or otherwise taken from the possession of Lessee by reason of any legal process (other than a requisition for use) or the Aircraft or any part thereof is attached, seized, sequestered, detained or otherwise taken from the possession of Lessee (other than a requisition for use) in the exercise of any Lien (other than a Lessor Lien), and Lessee shall fail to provide or to procure the release of the Aircraft and each part thereof within a period of ten (10) Business Days; or	
 
 	15.1.22	either:	
 
 	(a)	any consent, authorization, license or approval necessary to enable Lessor or any Financier to repossess the Aircraft upon expiration or termination of the leasing thereof hereunder and/or to de-register and export the Aircraft from the State of Registration thereupon, is modified or is not granted or is revoked, suspended, withdrawn, terminated or expires and is not renewed; or	
 
 	(b)	the registration of the Aircraft with the Aeronautics Authority is cancelled except as a result of any act or omission of Lessor, Owner Participant or any person lawfully claiming by or through either or as otherwise provided under this Lease; or	
 
 	(c)	the Deregistration Power of Attorney is not in full force and effect and not replaced within five (5) Business Days of Lessor’s demand; or	
 
 	15.1.23	Lessee ceases to be licensed as a commercial air carrier by the DGAC and such cessation continues for a period in excess of 30 days; or	
 
 	15.1.24	an Event of Default (as therein defined) shall occur under (a) any Other Lease, or (b) any other agreement between Lessor and Lessee or Lessee and any affiliate of Lessor; or	
 
 	15.1.25	Lessee shall fail to perform or observe any of the obligations to be performed or observed by it under the Cape Town Convention in relation to the Airframe, the Engines or any of the Relevant Documents; or	
 
 	15.1.26	any condition subsequent contained in paragraph 3 of Schedule 2 is not satisfied on or before the date and in the manner provided therein.	
 
16.	RIGHTS AND REMEDIES	
 
16.1	Remedies	
 
 	16.1.1	At any time following the occurrence of any Event of Default so long as the same shall be continuing, Lessor may, at its option and without need of any judicial	
 
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 	resolution or declaration, declare this Lease to be in default and at any time thereafter (without needing to comply with any particular notice or grace period except as expressly set forth herein), so long as Lessee shall not have remedied all outstanding Events of Default, Lessor may exercise one or more of the following remedies with respect to the Aircraft or any part thereof as Lessor, in its sole discretion, shall elect, to the extent available and permitted by, and subject to compliance with any mandatory requirements of, applicable law then in effect (but, for the avoidance of doubt, without needing to give formal notice of default and without need of judicial resolution or declaration):	
 
 	(a)	pursuant to Clause 4.4, apply all or any portion of the Security Deposit to sums due and payable by Lessee under any of the Relevant Documents;	
 
 	(b)	by notice in writing to Lessee, without need of judicial resolution or declaration, terminate the leasing of the Aircraft hereunder and demand that Lessee return the Aircraft, and Lessee shall upon written demand of Lessor and at Lessee’s expense, forthwith return the Aircraft to Lessor in the manner and condition required by, and otherwise in accordance with all of the provisions of, Clause 14 as if the Aircraft were being returned at the end of the Term; or Lessor or Lessor’s agent or representative to the extent permitted by law may enter upon the premises where the Aircraft or any part thereof is located and take immediate possession of and remove the same by summary proceedings or otherwise, all without liability for or by reason of such entry or taking of possession whether for the restoration of damage to property caused by such taking or otherwise;	
 
 	(c)	proceed by appropriate court action or actions, either at law or in equity, to enforce performance by Lessee of the applicable covenants of this Lease and to recover damages for the breach thereof;	
 
 	(d)	in addition to all other legal and equitable rights of Lessor, upon notice to Lessee, following an Event of Default, Lessor may lease the repossessed Aircraft or any part thereof to any third party upon such terms and conditions as Lessor may determine;	
 
 	(e)	if the Aircraft is not accepted by Lessee upon valid tender by Lessor on the delivery date, in any such case solely by reason of the failure of Lessee to satisfy any conditions to that delivery, Lessee will indemnify Lessor on demand against any Loss (including loss of profit), which Lessor may sustain or incur directly or indirectly as a result thereof including but not limited to:	
 
 	(i)	any loss of profit certified by Lessor as having been suffered by Lessor because of Lessor’s inability to place or any delay in placing, the Aircraft on lease with another lessee on terms as favourable to Lessor as this Lease or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Lease;	
 
 	(ii)	any loss, premium, penalty or expense which Lessor certifies may be incurred in repaying funds raised to finance the Aircraft; and	
 
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 	(iii)	without double-counting with paragraphs (i) or (ii), any amount of interest, fees or other sums whatsoever certified by Lessor as having been paid or payable on account of funds borrowed in order to carry any unpaid amount.	
 
 	16.1.2	Following the termination of the leasing of the Aircraft during the Term due to an Event of Default, Lessee will on written demand pay to Lessor as liquidated damages or, as the case may be, a debt (in each case without duplication):	
 
 	(a)	each instalment of Basic Rent that would have fallen due after the Termination Date but for such termination discounted at the Discount Rate over the period from but excluding the Termination Date to and including the Basic Rent Payment Date on which such payment would, but for the occurrence of the Termination Date, have been due, together with interest thereon at the Incentive Rate from the Termination Date to the date of receipt by Lessor;	
 
 	(b)	all arrears of Rent and all other amounts (including Maintenance Payment Amounts) payable by Lessee to Lessor under this Lease or any other Relevant Documents to which Lessee is a party but unpaid at the Termination Date, together with interest thereon at the Incentive Rate from the date on which such Rent or other sums fell due for payment to the date of their receipt by Lessor;	
 
 	(c)	all Losses incurred by Lessor in connection with:	
 
 	(i)	recovering or having possession of the Aircraft;	
 
 	(ii)	recovering Rent or other amounts due hereunder;	
 
 	(iii)	returning the Aircraft to the condition required hereunder and in accordance with the provisions of Part B of Schedule 6; and	
 
 	(iv)	exercising or enforcing any of its rights under any Relevant Documents to which Lessee is party,	
together with interest thereon at the Incentive Rate from and including the date that Lessor incurred such Losses until, but not including, the date of their recovery by Lessor;
 
 	(d)	any other properly evidenced Losses which Lessor may sustain or incur as a consequence of the occurrence of any Event of Default, including but not limited to:	
 
 	(i)	any amount of interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any amount which Lessee has failed to pay under this Lease or any other Relevant Document; and	
 
 	(ii)	any loss, premium, penalty, fees, or expense which may reasonably be incurred by Lessor in unwinding any financing of the Aircraft undertaken in connection with the leasing of the Aircraft to Lessee or unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to that financing,	
together with interest thereon at the Incentive Rate from and including the date that Lessor incurred such Losses until, but not including, the date of their recovery by Lessor.
 
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 	16.1.3	Without prejudice to the foregoing provisions of this Clause 16.1:	
 
 	(a)	the parties hereby agree that the occurrence of an Event of Default which is continuing shall constitute a “default” for the purposes of Article 11 of the Convention, giving rise to the rights and remedies specified in Articles 8-10 and 12-13 of the Convention and Article IX of the Aircraft Protocol and any other rights and remedies specified herein or available under applicable law. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Lease. For the purposes of Article 11, alternative B of the protocol to the Cape Town Convention, both parties hereby agree that the period required for the effects of Article 11, paragraph 2, shall be ten (10) days; and	
 
 	(b)	Lessee hereby agrees that upon the occurrence of an Event of Default which is continuing, Lessor shall be entitled, pending final determination of its claim, and with such prior notice to Lessee, if any, as may be required by applicable law, to obtain from a court speedy relief in the form of one or more of the following orders as Lessor requests:	
 
 	(i)	preservation of the Aircraft and the Engines and their value;	
 
 	(ii)	possession, control or custody of the Aircraft and the Engines;	
 
 	(iii)	immobilisation of the Aircraft and the Engines;	
 
 	(iv)	lease of the Aircraft and the Engines and the income therefrom; and	
 
 	(v)	sale of the Aircraft and the Engines and application of the proceeds therefrom.	
 
 	16.1.4	Lessee acknowledges that its obligation to pay the amounts (the “Termination Rental” ) referred to in Clause 16.1.2 is by way of liquidated damages and Lessor agrees that, in the event that it is able to place the Aircraft on lease (a “New Lease” ) with another lessee (a “New Lessee” ) for any part of the remainder of period prior to the originally scheduled Expiry Date, Lessor will, subject to Clause 16.1.4, pay to Lessee once it has received the same, an amount equal to each instalment of rental ( “New Rental” ) that it receives from the New Lessee in relation to that part of such period, after deducting from such amount any amount that may be necessary to compensate Lessor for:	
 
 	(a)	Tax suffered by it on such New Rental (if any); and	
 
 	(b)	any costs and expenses incurred by Lessor in entering into the New Lease.	
 
 	16.1.5	Lessor shall only be obliged:	
 
 	(a)	to pay any amount under Clause 16.1.4 if it has received all amounts that are due to it from Lessee under this Lease and the other Relevant Documents; or	
 
 	(b)	to pay any amount under Clause 16.1.4 to the extent that the aggregate of the amounts paid by it under Clause 16.1.4 would not exceed the aggregate of amounts received by it under 16.1.2; or	
 
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 	(c)	to solicit offers to lease the Aircraft to any potential New Lessee or to lease the Aircraft to any person if to do so would not conflict with interests of Lessor or of any affiliate of Lessor; or	
 
 	(d)	subject to Clause 16.1.5(c), to use its reasonable endeavours, in accordance with its standard business procedures, to place the Aircraft on a New Lease with a New Lessee for the remainder of the period prior to the originally scheduled Expiry Date.	
 
 	16.1.6	If Lessee fails to comply with any of its obligations under this Lease, Lessor shall be entitled to proceed by appropriate court action or actions to enforce performance of the Lease or to recover damages, including consequential damages (daños y perjuicios), sustained by Lessor by reason of Lessee’s breach of this Lease, and all other amounts payable by Lessee to Lessor or to any Indemnitee pursuant to the terms of this Lease or other Relevant Documents to which Lessee is a party.	
 
 	16.2	Further Rights	
 
 	16.2.1	Lessee shall be liable for all reasonable legal fees and other costs and expenses incurred by any Indemnitee by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto, including all costs and expenses incurred in connection with the return of the Aircraft or any part thereof in accordance with the terms of Clause 14 or in placing the Aircraft or any part thereof in the condition and with airworthiness certificates as required hereunder. Lessor and Lessee hereby agree and acknowledge that due to the inherent value of the Aircraft and the potential for significant losses related to its non-operation or non-payment of Rent following an Event of Default and the exercise of Lessor’s rights pursuant to this Lease, Lessor shall be unrestricted in its efforts to take immediate possession of the Aircraft pursuant to the terms of this Lease for the purpose of leasing the Aircraft to a new operator or delivering possession of the Aircraft to a purchaser thereof identified by Lessor, in either case, as Lessor may choose in its sole discretion.	
 
 	16.2.2	Lessee acknowledges and agrees that, upon termination of the leasing of the Aircraft hereunder in accordance with the terms hereof, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. In consideration of this, following termination of the leasing of the Aircraft hereunder in accordance with the terms hereof, Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps reasonably necessary or desirable to effect deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that, subject to the conditions set forth in this Lease, the right of Lessor to deregister may be exercised unilaterally, unconditionally and without restrictions and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor.	
 
 	16.2.3	Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be reasonably necessary or required following termination of the leasing of the Aircraft hereunder in accordance with the terms hereof (a) to remove the Aircraft from the operating certificate of Lessee, (b) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (c) to demonstrate termination of the Lease or to otherwise execute on behalf of Lessee any termination	
 
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agreement in respect of the Lease as may be required for deregistration purposes, (d) to demonstrate the consent of Lessee to deregister the Aircraft, and (e) to export the Aircraft from the Habitual Base and the State of Registration (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aeronautics Authority. In addition Lessee will take any other steps reasonably necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
16.3	Remedies Cumulative	
The rights of Lessor under this Lease are cumulative, may be exercised as often as Lessor considers appropriate and are in addition to its rights under any applicable law. The rights of Lessor against Lessee or in relation to the Aircraft shall not, as against or in favour of Lessee, be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any such other right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on its part or on its behalf shall in any way preclude it from exercising any such other right or constitute a suspension or any variation of any such right.
 
16.4	Further Assurances and Undertaking	
Lessee shall do all such acts and execute all such agreements, instruments and other documents as are necessary in order to give effect to the rights and remedies of Lessor. Lessee hereby undertakes that, in the event Lessor exercises its rights and remedies under Clause 16.1.1(b), Lessee shall take all such actions as are required in order to effect the return of the Aircraft and/or allow Lessor to take possession of the Aircraft and shall refrain from taking action that may in any way hinder, restrain or interfere with Lessor in so doing. Lessee expressly consents to the enforcement of the preceding undertakings, by injunctive or other similar relief, in ex parte proceedings or otherwise, in respect of Lessee or any of its employees or agents, in any court with jurisdiction.
 
16.5	Set-Off	
Lessor may, at any time during the continuance of an Event of Default, set-off from any sum payable by it to Lessee under any of the Relevant Documents any sum due and unpaid by Lessee to Lessor under or in relation to any of the Relevant Documents or any other document or agreement entered into pursuant to or in connection with any of the Relevant Documents. Notwithstanding the foregoing, Lessor shall have no obligation to make any payment to Lessee during the continuance of an Event of Default, provided, however, that any such payment shall be made promptly following cure of any such Event of Default.
 
17.	MISCELLANEOUS	
 
17.1	Severability, Amendment, Construction and Applicable Law	
 
 	17.1.1	Any provision of this Lease which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. No term or provision of this Lease may be changed, waived, discharged or terminated orally, but only by a written instrument signed by the party against which the enforcement of the change, waiver, discharge or termination is sought.	
 
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 	17.1.2	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, LESSOR AND LESSEE AGREE THAT THIS LEASE, AND ANY NON-CONTRACTUAL OBLIGATIONS ARISING FROM OR CONNECTED TO IT, SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BUT EXCLUDING CONFLICTS OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND WITHOUT REGARD TO THE CONFLICTS OF LAW RULES WHICH MIGHT RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).	
 
 	17.1.3	This Lease, together with all Schedules and attachments, is being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this Lease as a public document which shall be attached with the capacity to be enforced through an executive commercial process as set forth in the Commercial Code. Section 17.1.2 is without prejudice to Lessor’s right to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the Aircraft is located in Mexico.	
 
17.2	Notices	
Each notice, request, direction or other communication under this Lease shall:
 
 	17.2.1	be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile;	
 
 	17.2.2	be deemed to have been given:	
 
 	(a)	in the case of a facsimile, on confirmation by the recipient of actual receipt or, if earlier, on actual or deemed receipt by the recipient of a confirmation letter; and	
 
 	(b)	in the case of a letter when delivered personally or 10 days after it has been put into the post; and	
 
 	17.2.3	be sent:	
to Lessor:
MASL Ireland (22) Limited
Level One, South Bank House
Barrow Street
Dublin 4
Ireland
Attention: Contracts Management Group
Tel: +353 1 238 3200Fax: +353 1 238 3299
With a copy in all cases to:
Macquarie Aircraft Leasing Services (Ireland) Limited
 
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Level One, South Bank House
Barrow Street
Dublin 4, Ireland
Attn: Contracts Management Group
Tel: +353 1 238 3200
Fax: +353 1 238 3299
and an additional copy in all cases to:
Macquarie Aircraft Leasing Services (US) Inc.
Two Embarcadero Center, Suite 200
San Francisco, CA 94111
USA
Attn: Contracts Management Group
Tel: +1 415-829-6600
Fax: +1 415 829-6699
to Lessee:
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.
Av. Prolongación Paseo de la Reforma 490, Piso 1
Colonia Santa Fe Peña Blanca
Mexico, D.F.,
MEXICO
Attn: Director Jurídico
Fax: +52 (55) 5211 9613
or to such other address or facsimile number as is notified from time to time by one party hereto to the other party hereto.
All communications, notices and documents must be in English.
 
17.3	Lessor’s Right to Perform	
If Lessee fails to perform any of its obligations hereunder, Lessor may discharge such obligation and shall notify Lessee of the same, and the amount of the expenses of Lessor incurred in connection with such discharge together with interest thereon at the Incentive Rate shall be deemed Supplemental Payments, payable by Lessee upon demand.
 
17.4	Counterparts	
This Lease shall be executed in at least four counterparts, each of which will be an original, but all of which will constitute but one and the same instrument. To the extent that this Lease constitutes chattel paper under the Uniform Commercial Code in effect in any applicable jurisdiction, no security interest in this document may be created through the transfer of possession of any counterpart other than the “Original” counterpart as indicated by a receipt therefor executed by Lessor.
 
17.5	Assignment, Transfer and Financing by Lessor	
 
 	17.5.1	Lessee acknowledges and agrees that Lessor, Owner and Beneficiary, as the case may be, shall be entitled at any time to assign, transfer or grant any security interest over (i) any or all of its rights and obligations under this Lease and the other Relevant Documents (including, without limitation, its rights to receive the Security Deposit and any Rent) and/or (ii) its right, title and interest in and to the Aircraft to any person (a “ Transferee ”) without the consent of Lessee; provided	
 
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 	that (i) at the time of transfer, no such transfer shall result in any increase of Lessee’s liabilities or obligations hereunder or under any other Relevant Document or create any additional obligations on the part of Lessee hereunder or thereunder or adversely affect Lessee’s rights under this Lease or any other Relevant Document to which it is a party or its rights in respect of the Aircraft or any Part thereof, based on current laws in effect at the time of such transfer or enacted prior to but scheduled to come into effect subsequent to the date of such transfer, than it would have had if such transfer had not taken place; (ii) in the case of a transfer by Lessor, at the time of transfer the Transferee shall have a net worth of no less than *****, or its obligations shall have been guaranteed by a guarantor having a net worth of no less than *****, or Transferee shall have agreed to hold the Security Deposit, Maintenance Payment Amounts and insurance proceeds in excess of the Insured Value in a segregated account; (iii) no Transferee shall be an air carrier (or an Affiliate of the same) that competes with Lessee; (iv) in the case of a transfer by Lessor, the Transferee shall have agreed in writing for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under this Lease and the other Relevant Documents; and (v) in the case of a transfer by Owner or Beneficiary, Lessee shall receive from Transferee a covenant of quiet enjoyment in substantially the same terms as that contained in Clause 5.4.2. In the case of any such transfer, Lessee hereby agrees and undertakes that it will upon the request of Lessor execute such further documents (including, without limitation, an assignment agreement) and give such notices and take such action as Lessor may reasonably require in order to effect such transfer provided that any reasonable costs incurred by Lessee in connection therewith (including any reasonable legal expenses) shall be reimbursed by Lessor. For the purposes of Article 33 of the Convention, Lessee hereby consents to such assignment, transfer, grant or other disposition. Lessor’s rights under this Lease are associated with the Aircraft and the Engines for the purposes of Article 32 of the Convention.	
 
 	17.5.2	Lessee acknowledges and agrees that if Lessor should transfer to a third party all of Lessor’s obligations under this Lease, Lessor shall be relieved of all obligations as of the effective date of such transfer and Lessee shall thereafter look only to Lessor’s transferee. No transfer permitted hereunder shall relieve the transferor for obligations hereunder which may have accrued prior to the effective date of any such transfer.	
 
 	17.5.3	Lessor and/or Owner may at any time enter into any financing arrangements in connection with the Aircraft and in connection therewith, inter alia, Owner and/or Lessor may assign as security their respective rights under this Lease and the other Relevant Documents (or any of them) and/or execute a Mortgage over the Aircraft, in each case, for the benefit of the Financiers provided that:	
 
 	(a)	Lessee shall receive from any Financier having a Mortgage a covenant of quiet enjoyment in substantially the same terms as that contained in Clause 5.4.2;	
 
 	(b)	Lessee is not in breach of any applicable law as a consequence of the entry into of such financing by Lessor and/or Owner;	
 
 	(c)	except as provided in Clause 17.5.5, Lessee shall not, immediately following and as a consequence of such financing (A) incur any additional obligations or costs under any Relevant Document including, without limitation, with respect to withholding Taxes (it being acknowledged that any increase in the number of Indemnitees and/or Tax Indemnitees shall not constitute such an increase) or (B) suffer any diminution in its rights under any Relevant Document; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(d)	unless an Event of Default has occurred and is continuing, Lessee shall be reimbursed its reasonable costs and expenses (including reasonable legal expenses) incurred in connection with the implementation of such financing;	
 
 	(e)	any such Financier is not an air carrier (or an Affiliate of the same) that competes with Lessee;	
 
 	(f)	any such Financier shall have agreed that (a) in exercising its rights under the Lease and/or other Relevant Documents, it shall do so in accordance with the terms hereof and thereof and (b) to the extent it shall receive any amounts after its foreclosure on the Lease, whether of Security Deposit, Rent, Supplemental Payments or Insured Value, it shall receive, hold, apply, return, reimburse and pay, as applicable, such amounts in accordance with the applicable provisions of this Lease.	
 
 	17.5.4	Lessee agrees, at the reasonable cost of Lessor, that it shall do such things and execute such documents and make such filings and registrations in the State of Registration (including the registration and filing of any Financing Document) as may be reasonably requested of it by Lessor in order to protect the interests of the Financiers under the Financing Documents (including, without limitation, (i) entering into any direct acknowledgement of any security assignment with any Financier in substantially the form of Schedule 16 or otherwise in form and substance reasonably acceptable to Lessee and (ii) procuring that any Security Letter of Credit delivered or deliverable hereunder is issued or reissued naming as beneficiary thereunder any Financier designated by Lessor).	
 
 	17.5.5	If as a consequence of any financing arrangements Lessor (acting reasonably) requires Lessee to amend the Insurances (including, for the avoidance of doubt, providing that the Mortgagee or any other Financier shall be named as loss payee), Lessee will make such amendments and, to the extent that those amendments result in an increase in the cost to Lessee of effecting the Insurances, Lessor will reimburse Lessee an amount equal to the amount of that increased cost.	
 
17.6	Submission to Jurisdiction; Waiver of Immunities; Service of Process	
 
 	17.6.1	Each party hereto irrevocably agrees that any legal action or proceeding against it or any of its assets arising out of or relating to this Lease, which may arise in connection with the legal relationships established by this Lease, including any claim under the Cape Town Convention, shall be brought in the courts of the State of New York in the County of New York, Borough of Manhattan, and the United States District Court for the Southern District of New York are to have jurisdiction to settle any disputes (including claims for set-off and counterclaims) (and all related appellate courts).	
 
 	17.6.2	Without prejudice to Clause 17.6.1, Lessee irrevocably agrees that Lessor may take any legal action or proceeding against it or any of its assets arising out of or relating to this Lease, which may arise in connection with the legal relationships established by this Lease, including any claim under the Cape Town Convention, in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located from time to time. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.	
 
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 	17.6.3	By execution and delivery of this Lease (a) each of the parties hereto hereby irrevocably submits to and accepts with regard to any action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the courts referred to in Clause 17.6.1 and irrevocably agrees to be bound by any judgment rendered thereby, and (b) Lessee hereby irrevocably submits to and accepts with regard to any action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the courts referred to in Clause 17.6.2 and irrevocably agrees to be bound by any judgment rendered thereby.	
 
 	17.6.4	Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Lease in any other jurisdiction to which it may be entitled by virtue solely of its present or future domicile.	
 
 	17.6.5	Each of the parties waives to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in any court in the courts of the state of New York and the Superior Court of the state of New York (and all related appellate courts) and hereby further irrevocably waives, to the fullest extent permitted by law, any claim that any such suit, action or proceeding in the courts of the state of New York and the Superior Court of the state of New York (and all related appellate courts) has been brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Relevant Documents may not be enforced in or by such courts. Lessee waives to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Lease brought in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located and hereby further irrevocably waives, to the fullest extent permitted by law, any claim that any such suit, action or proceeding in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum that the venue of such suit, action or other proceeding is improper, or that any of the Relevant Documents may not be enforced in or by such courts.	
 
 	17.6.6	Each party hereto irrevocably and unconditionally:	
 
 	(a)	agrees that if the other party brings legal proceedings against it or its assets in relation to this Lease, no immunity from such legal proceedings (which will be deemed to include, without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) will be claimed by or on behalf of itself or with respect to its assets; and	
 
 	(b)	waives and agrees not to claim any immunity from suits and proceedings and from all forms of execution or attachment to which it or its property is now or may hereafter become entitled under the laws of any jurisdiction and declares that such waiver shall be effective to the fullest extent permitted by such laws, and for the purposes of Article XXII(2) of the Aircraft Protocol the relevant aircraft objects are the “Aircraft” and the “Engines” as defined in Schedule 1.	
 
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 	    17.6.7	Lessee shall at all times during the period commencing on the date hereof and ending on the date falling 6 months after Lessee redelivers the Aircraft to Lessor maintain an agent for service of process in New York. Lessor consents to service being made on Macquarie Aircraft Leasing Services (US), Inc. at its office at Two Embarcadero Center, Suite 200, San Francisco, CA 94111, USA. Lessee’s agent for service of process in New York shall be Lessee’s Process Agent. Any claim form, judgment or other notice of legal process shall be sufficiently served on Lessor or, as the case may be, Lessee if delivered to its agent specified above at its address for the time being. Each party undertakes not to revoke the authority of its agent specified above and if for any reason such agent no longer serves as its agent to receive service of process, that party shall promptly appoint another such agent and advise the other party thereof. If Lessee fails to appoint another such agent after being required by Lessor so to do, Lessor is irrevocably authorised to appoint any person (including itself), on such person’s standard or usual terms for acceptance of appointment (if any), as Lessee’s agent.	
 
 	    17.6.8	In the event that Lessor brings any proceedings before the courts of the Home Jurisdiction of Lessee, Lessee hereby and irrevocably waives any right or claim that it may have to defend, argue or protest those proceedings on the grounds that those proceedings, or any of Lessee’s obligations under the Relevant Documents, or any judgment which Lessor may have obtained against Lessee or the Aircraft in any other jurisdiction, are contrary to the public policy of Lessee’s Home Jurisdiction.	
 
17.7	Currency Indemnity	
The obligations of each party payable under this Lease in one currency (the “ first currency ”) may be discharged by an amount paid pursuant to any order or judgment of any court or other tribunal in another currency (a “ second currency ”), but only to the extent that the amount so paid in a second currency on prompt conversion to the first currency under normal banking procedures yields the amount of the first currency due hereunder, and each party shall indemnify the other party and any other person entitled to payments hereunder against any such shortfall and the cost of such conversion. In the event that any payment in a second currency by either party to any such person or entity, whether pursuant to a judgment or otherwise, upon conversion and transfer to the designated place of payment therefore does not result in payment of such amount of the first currency, such person or entity shall have a separate cause of action against such party for the additional amount necessary to yield the amount due and owing to such person.
 
17.8	Costs and Expenses	
 
 	    17.8.1	Lessee and Lessor shall be responsible for their own internal and external costs and expenses (including legal fees) in connection with the documentation and negotiation of the transaction contemplated by this Lease. Lessee shall be responsible for all reasonable costs and expenses of registering the Aircraft with the DGAC and of perfecting the interests of Lessor and Owner in the Aircraft and the Relevant Documents in Mexico (but not including the fees and expenses of counsel for Lessor in Mexico in connection with such registration or perfection, which will be for Lessor’s account). Lessor shall be responsible for all reasonable costs and expenses of registering the Aircraft with the FAA and of perfecting the interests of Lessor and Owner in the Aircraft and the Relevant Documents in the United States of America. The cost and expenses of documenting and registering any mortgage on the Aircraft created by Owner will be for Lessor’s account.	
 
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 	    17.8.2	Whether or not the Aircraft is delivered to Lessee under this Lease, Lessee will pay to Lessor on demand:	
 
 	(a)	all reasonable costs and expenses (including reasonable legal expenses) incurred by Lessor or any Financier in connection with any amendment to, or the granting of any waiver or consent or the preservation of any rights of Lessor under, any Relevant Document required in writing by Lessee; and	
 
 	(b)	all costs and expenses (including legal, survey and other costs) incurred by Lessor or any Financier in respect of the breach by Lessee of any representation, warranty, covenant, agreement, condition or stipulation contained in this Lease or in the other Relevant Documents, the occurrence of any Default or Event of Default, or otherwise in connection with the enforcement of any of the Relevant Documents or any rights of Lessor or any Financier in the Aircraft or as a consequence of the commencement of the Term being delayed as a consequence of any of the conditions precedent set forth in paragraph 1 of Schedule 2 not being satisfied other than as the direct result of any negligence or wilful default of or by Lessor or such Financier.	
 
17.9	Survival	
The representations, warranties, covenants, agreements and indemnities of Lessee and Lessor set forth in this Lease, and their respective obligations hereunder, shall survive the expiration or other termination of this Lease to the extent required for full performance and satisfaction thereof.
 
17.10	Further Assurances	
Each party hereto shall, at its respective expense, promptly and duly execute and deliver to the other party such further documents and promptly take such further action not inconsistent with the terms hereof as the other party may from time to time reasonably request in order to more effectively carry out the intent and purpose of this Lease or to perfect and protect the rights and, with respect to Lessor, remedies created or intended to be created hereunder.
 
17.11	Successors and Assigns	
This Lease shall be binding on and shall inure to the benefit of Lessee and its successors and Lessor and its successors and permitted assigns.
 
17.12	Actions by Servicer	
Unless and until Lessee has received prior written notice from Lessor to the contrary, Lessee shall be entitled to rely on notices given or actions taken by the Servicer on behalf of Lessor as if Lessor had given such notices or taken such actions directly.
 
17.13	Language	
While the Relevant Documents may be translated into other languages, in the event of any conflict between the English language version and a version in another language, the English language version shall govern in all respects.
 
17.14	Performance of the Essence	
Lessee acknowledges and agrees that punctual payment of all amounts payable by Lessee under each of the Relevant Documents (whether such amount relates to Rent or other amounts payable) and timely performance by Lessee of each of its obligations under each of the Relevant Documents shall, subject to applicable grace periods, be of the essence and shall be conditions of this Lease.
 
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17.15	Cape Town Convention	
 
 	    17.15.1	Inconsistency	
To the extent of any inconsistency between any provision of this Lease which relates to the Cape Town Convention and any other provision of this Lease, the provision of this Lease which relates to the Cape Town Convention shall prevail, except where the provision of this Lease grants Lessor greater rights or imposes fewer restrictions than the conflicting provision relating to the Cape Town Convention, in which case, limited to the extent of such conflict, the applicable provision of this Lease shall prevail.
 
 	    17.15.2	Separate Rights	
Separate rights attach to the Airframe and the Engines hereunder for the purposes of the Cape Town Convention.
 
 	    17.15.3	International Interest	
The parties acknowledge and agree that they intend that this Lease creates an international interest in the Airframe and the Engines in accordance with Article 2 of the Convention.
 
 	    17.15.4	Consents to Registrations	
For the purposes of Article 20(1) of the Convention, Lessee hereby consents (i) to any registrations to be effected by Lessor pursuant to this Lease if title to a replacement Engine is to be conveyed to Lessor pursuant to Clause 10.2 and to the registration on the International Registry of the international interest in the Engine replaced by such replacement Engine constituted by the relevant contract of sale to Lessee of such replaced Engine contemplated by Clause 10.2. Lessee shall promptly upon Lessor’s written request advise the International Registry of such consents in such form as Lessor may reasonably require.
 
 	    17.15.5	Discharge of Registrations	
Lessor may at any time following the expiration or earlier termination of the leasing of the Aircraft hereunder discharge or procure the discharge of any registration at the International Registry of the international interests constituted by this Lease in relation to the Aircraft or the Engines. If Lessor transfers to Lessee pursuant to Clause 10.2 its right, title and interest in and to any Engine Lessor will, promptly following such transfer, discharge or procure the discharge of any registration at the International Registry of the international interest constituted by this Lease in relation to such Engine.
 
17.16	Confidentiality	
Each of Lessee and Lessor acknowledges that the terms and conditions of this Lease and the other Relevant Documents and the commercial and financial arrangements evidenced hereby and thereby are considered by the other party as confidential information. Accordingly, each of Lessee and Lessor agrees that it will treat that information as confidential and will not without the prior written consent of the other party disclose or, in the case of Lessor, permit Owner Participant or any Financier to disclose that information to any person except to its professional advisers, as may be required by any applicable law; or in the case of disclosure by Lessor, to the Owner, any Servicer, any affiliate of Lessor or
 
- 48 -

to any Financiers or investors in or purchasers of, or prospective Financiers or investors in or purchasers of, the Aircraft; provided, however, in connection with any such disclosure, Lessee or Lessor, as applicable, will obtain, confidential treatment of that information by any such affiliate, Financier, prospective Financier, investor, prospective investor, purchaser or prospective purchaser.
[signature page follows]
 
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IN WITNESS WHEREOF , Lessor and Lessee have each caused this Lease to be duly executed by their authorized officers on the date first above written.
MASL IRELAND (22) LIMITED ,
as Lessor

By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in fact	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee

By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
 
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Schedule 1
Definitions and Construction
 
1.	Definitions	
Unless the context requires otherwise, the following terms have the following meanings for all purposes of the Lease and such meanings shall be equally applicable to both the singular and the plural forms of the terms defined:
“Additional Insureds” means Owner, Beneficiary, Lessor, Servicer, any Financier, any Mortgagee and their respective officers, directors, shareholders, servants, agents and employees and the successors and assigns of each of the foregoing.
“Aeronautics Authority” means, as the context requires, the airworthiness authority in the State of Registration, or any person, governmental department, bureau, commission or agency succeeding to the functions of the foregoing and, if different, the civil aviation authority of the State of Registration.
“Airbus” means Airbus S.A.S., legal successor of Airbus S.N.C. formerly Airbus G.I.E. and Airbus Industrie G.I.E.
“Aircraft” means (i) the Airframe, together with, as the context requires, (ii) the Engines whether or not installed thereon, (iii) the APU whether or not installed thereon, (iv) all Parts whether or not installed thereon, and (v) the Aircraft Records.
“Aircraft Protocol” means the Protocol to the Convention on Matters Specific to Aircraft Equipment opened for signature on 16 November 2001 at Cape Town, South Africa.
“Aircraft Records” means (i) the “Aircraft Records” as defined in the Certificate of Acceptance and (ii) all records, logs and other materials referred to in Clause 6.6.2.
“Airframe” means that certain Airbus A320-200 airframe bearing manufacturer’s serial number 2204 more particularly described in the Certificate of Acceptance (except for any engines or Engines installed thereon), and (except as otherwise provided in Clause 8.3) any and all Parts incorporated or installed therein or attached thereto or removed therefrom, so long as title thereto remains vested in Owner in accordance with the terms of Clause 8.
“Airworthiness Directive” or “AD” means any airworthiness directive or other mandatory comparable regulation issued by the aeronautics authority of the country of manufacture or the Aeronautics Authority and applicable to aircraft, engines and parts of the same type as the Aircraft, the Engines and the Parts.
“Alert Service Bulletin” whether or not capitalized, means a service bulletin identified as an “alert” by the Manufacturer or any mandatory Service Bulletin of any other Supplier.
“Anticipated Delivery Date” is specified in Schedule 12. The Anticipated Delivery Date is an estimate only and may be changed by notice from Lessor to Lessee, without prejudice to Clause 2.1.
“APU” means (a) the auxiliary power unit installed on the Aircraft and described in the Certificate of Acceptance, (b) any auxiliary power unit which may from time to time be substituted or be a replacement for such auxiliary power unit pursuant to Clause 10.2; (c) any replacement auxiliary power unit installed on the Aircraft with Lessor’s prior written consent pursuant to Clause 8.3; or (d) any replacement auxiliary power unit which is redelivered with the Aircraft pursuant to paragraph 3.2.2(i) of Part B of Schedule 6, in each case title to which is vested in Owner.
“APU Hour” means, in relation to the APU, each hour or part of an hour during which the APU is operated.
 
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“APU Heavy Repair” means disassembly and rework of the power section, load impeller and gearbox modules of the APU according to the APU manufacturer’s then current medium or heavy repair criteria in order to restore maximum service release life for all APU modules in accordance with industry norms.
“APU Maintenance” means a complete load compressor and turbine disassembly of the APU where exposed detail parts are inspected in accordance with the APU’s Inspection Repair Manual Requirements (provided always that APU Maintenance shall be deemed to have been accomplished on the APU if the APU manufacturer shall deem the APU (a) to have been freshly “Overhauled” or fresh from “Heavy Repair” or (b) to be in “Zero-Time” condition).
“APU Payment Rate” means the amount designated as such in paragraph 3.5 of Schedule 15 (as the same may be increased from time to time pursuant to paragraph 4.2.1 of Schedule 3).
“Authorised Maintenance Performer” means (i) Lessee (for so long as Lessee is approved as a maintenance provider by EASA under EASA Annex II - Part 145 or by the FAA under FAR Part 145), (ii) the Engine Manufacturer or IHI Corporation (with respect to the Engines), (iii) Aeromantenimiento S.A. (Aeroman) or any successor organization (with respect to the Airframe) or (iv) such other maintenance provider or providers selected by Lessee and approved by EASA under EASA Annex II - Part 145 or by the FAA under FAR Part 145.
“ASA” means Aeropuertos y Servicios Auxiliares , a Government Entity in charge of the supply of aircraft fuel and airport services at various airports in Mexico.
“Basic Rent” means the monthly rent payable pursuant to Clause 4.1.
“Basic Rent Payment Date” means:
 
 	(a)	the Delivery Date; and	
 
 	(b)	the day in the month after the month in which the Delivery Date falls which corresponds numerically to the Delivery Date and the same date in each month thereafter provided that if the Delivery Date has no corresponding numerical day in any month, the Basic Rent Payment Date shall be the last Business Day in such month.	
“Basic Rent Period” means a period from and including one Basic Rent Payment Date (or, in the case of the first Basic Rent Period, from and including the Delivery Date) to and including the day immediately preceding the next succeeding Basic Rent Payment Date thereafter (or, in the case of the final Basic Rent Period, to and including the Expiry Date).
“Beneficiary” means Macquarie Aircraft Leasing Limited, a company incorporated under the laws of Ireland, with its registered office at Level 1, South Bank House, Barrow Street, Dublin 4, Ireland.
“Broker” means AON or such other insurance broker in relation to the Insurances selected by Lessee and reasonably satisfactory to Lessor from time to time.
“Business Day” means any day other than a Saturday, Sunday or a day on which commercial banking institutions in the cities of New York, London, Dublin and Mexico City are authorised by law to be closed.
“Cape Town Convention” means, together, the Convention and the Aircraft Protocol.
“C Check” means (a) all inspections of the Aircraft (and all resulting repairs, if any) that, in accordance with the MPD, are recommended to be performed at an interval equal to the C Check Interval, and (b) such additional tasks (and all resulting repairs, if any) that, in accordance with the MPD, have less than a C Check Interval remaining before the date on
 
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which it is recommended they be accomplished (provided always that a C Check shall only be deemed to have been accomplished with respect to the Aircraft if (i) the Aircraft is cleared for operation for a C Check Interval once all inspections, tasks and repairs have been performed, and (ii) (if the Current Revision has been superseded) the inspections, tasks and repairs to be performed in connection therewith are at least as extensive as those that would have been recommended for such C Check in accordance with the Current Revision).
“C Check Interval” means (a) prior to any revision of the MPD subsequent to the Current Revision and with respect to any task carrying (i) a Flight Hour interval or limit, 6,000 Flight Hours, (ii) a Cycle interval or limit, 4,500 Cycles, and (iii) a calendar interval or limit, 20 months, and (b) following each revision of the MPD subsequent to the Current Revision (i) such Flight Hour, Cycle and calendar intervals or limits (as appropriate) as Lessor and Lessee agree (each acting reasonably) represent best industry practice relating to the delivery and redelivery of aircraft to commercial airlines under operating lease, or (ii) if Lessor and Lessee cannot agree such intervals or limits in a timely manner from time to time, such Flight Hour, Cycle and calendar intervals or limits (as appropriate) as Lessor may designate from time to time (acting reasonably in light of such best industry practice).
“Certificate of Acceptance” means an acceptance certificate in the form of Schedule 4 to be executed by Lessee and Lessor on the Delivery Date to evidence the delivery and acceptance of the Aircraft.
“Claims Limit” is specified in Schedule 12.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Consolidated Text” means the combination of the Convention and the Aircraft Protocol that was authorized and created pursuant to Resolution No. 1 adopted by the Cape Town Diplomatic Conference.
“Contracting State” is defined in the Convention.
“Convention” means the Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment opened for signature on 16 November 2001 at Cape Town, South Africa.
“Current Revision” means revision 34 of the MPD.
“Cycle” means each combination of the take-off and landing of the Airframe, or in the case of an Engine or any Part, the airframe on which such Engine or Part is then installed.
“Default” means any event or condition which, with the lapse of time or the giving of notice or both, would constitute an Event of Default.
“Delivery Date” means the date on which Lessee is obligated to accept delivery of the Aircraft pursuant to Clause 2 and is the date set forth in the Certificate of Acceptance.
“Delivery Location” is specified in Schedule 12.
“Deregistration Power of Attorney” means a power of attorney issued, or as the context may require, to be issued by Lessee substantially in the form set forth in Schedule 10.
“DGAC” means the Dirección General de Aeronáutica Civil of Mexico.
“Discount Rate” means a rate of interest equal to six per cent (6%) per annum.
“Dollars” and “$” means, whether capitalised or not, the lawful currency of the United States of America.
 
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“EASA” means the European Aviation Safety Agency (as successor to the EASA) or any person, governmental department, bureau, commission or agency succeeding to the functions of the foregoing.
“Engine” means: (a) each of the two IAE V2527-A5 turbofan engines more particularly described in the Certificate of Acceptance, whether or not from time to time installed on the Airframe (provided always that, with effect from completion of the Post Delivery Modification referred to in paragraph 1 of Schedule 9, the reference to “IAE V2527-A5 turbofan engines” in this paragraph (c) shall be deemed amended to read “IAE V2527E-A5 turbofan engines”); (b) any engine which may from time to time be substituted or be a replacement for any such engine pursuant to Clause 10.2; and (c) except as otherwise provided in Clause 8.3, any and all Parts incorporated or installed in or attached thereto or removed therefrom, so long as title thereto shall remain vested in Owner in accordance with the terms of Clause 8.
“Engine Agreed Value” is specified in Schedule 12.
“Engine Hour” means, in relation to any Engine, the period measured by reference to each hour or part of an hour elapsing from the moment the wheels of any airframe on which such Engine is installed leave the ground on take off until the wheels of such airframe next touch the ground on landing.
“Engine Payment Rate” means, with respect to an Engine and a month, the amount determined for such Engine and month pursuant to paragraph 3.2 of Schedule 15.
“Event of Default” is, subject to the provisions of the Lease, defined in Clause 15.
“Event of Loss” means, with respect to the Aircraft, the Airframe, any Engine or the APU, any of the following: (a) the destruction, damage beyond repair or rendition of the same permanently unfit for normal use for any reason whatsoever; (b) any damage to the same which results in an insurance settlement with respect to the same on the basis of a constructive, agreed or actual Event of Loss; (c) the condemnation, confiscation, requisition of title, sequestration, forfeiture or other loss of title to the same; (d) the confiscation, seizure, attachment, detention or sequestration thereof which deprives Lessee of the use or possession of the Aircraft, or requisition of use of the Aircraft, for any reason for a period in excess of 60 consecutive days or, if shorter, beyond the last day of the Term; or (f) requisition of title or other compulsory acquisition, confiscation, seizure, forfeiture, attachment, detention or other similar event, as may occur within any labour proceedings, including such cases where Lessee is appointed as depositary. An Event of Loss with respect to an Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe.
“Event of Loss Payment Date” has the meaning ascribed to such term in Clause 10.1.
“Event of Loss Proceeds” means the proceeds of any Insurances (other than amounts payable as a consequence of a claim under the liability insurances) or any compensation or similar payment, arising in respect of an Event of Loss in respect of the Aircraft.
“ Excluded Taxes” has the meaning ascribed to such term in Clause 9.1.
“Expiry Date” is specified in Schedule 12.
“FAA” means, as context requires, the United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration, or any person, governmental department, bureau, commission or agency succeeding to the functions of either of the foregoing.
“FAR” means the Federal Aviation Regulations contained in Title 14 of the Code of Federal Regulations.
 
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“FATCA” shall mean Sections 1471 through 1474 of the Code and any regulations or official interpretations thereof.
“Financiers” means together Owner, any Mortgagee and each of the persons designated from time to time by Lessor by notice in writing to Lessee as being a person directly or indirectly providing or participating in financial support to Owner or Lessor in relation to the Aircraft and any owner or intermediary person by, to whom or from whom the Aircraft is or is to be transferred, sold, leased or sub-leased in connection with the provision of such financial support.
“Financing Documents” means each of the agreements, deeds, instruments or other documents entered into by Lessor and/or any Financier in connection with the financing of the Aircraft (but excluding the Relevant Documents).
“Flight Hour” means each hour or portion thereof during each period commencing with the lift off from the runway of the wheels of the Airframe or an airframe to which an Engine is installed and concluding when the wheels of the Airframe or such other airframe touch down upon landing.
“GAAP” means the generally accepted accounting principles (or financial information norms) imposed on companies such as Lessee in Mexico.
“Government” means the government of the State of Registration or any instrumentality or agency thereof (provided the credit of such instrumentality or agency is backed by the full faith and credit of the State of Registration).
“Government Entity” means and includes (i) any state or territory or political sub-division of either thereof; (ii) any governmental authority, board, commission, department, division, organ, instrument, court, tribunal or agency of any of the persons specified in (i) above, however constituted and (iii) any association, organisation or institution of which any of the above persons is a member or to whose jurisdiction any thereof is subject or in whose activities any such person is a participant.
“Habitual Base” of the Aircraft shall be Aeropuerto International de Toluca, Estado de Mexico, Mexico.
“Hereby” , “herein” , “hereof” , “hereunder” , and other like words shall refer to the Lease as originally executed or as amended, modified or supplemented pursuant to the applicable provisions hereof, including, without limitation, as supplemented by the Certificate of Acceptance.
“Home Jurisdiction” is specified in Schedule 12.
“IDERA” means an irrevocable, deregistration and export request authorization addressed by Lessee to the FAA, substantially in the form attached hereto as Schedule 17.
“ IFRS ” means International Financial Reporting Standards or the equivalent as developed by the International Accounting Standards Board (or any successor body) from time to time.
“Incentive Rate” means a rate of interest equal to LIBOR in respect of such periods as Lessor shall select from time to time, plus the Margin, but in no event greater than the maximum rate permitted by applicable law.
“Indebtedness” of any person means, on any date, all indebtedness of such person as of such date, and shall include the following: (i) all indebtedness of such person for monies borrowed or raised; (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments; (iii) all obligations of such person to pay the deferred purchase price of property or services (other than trade liabilities due within 30 days); (iv) all obligations of such person under capital (finance) leases; (v) all indebtedness secured by
 
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a Lien on any asset of such person, whether or not such person has assumed or is otherwise liable for such indebtedness; (vi) all indebtedness of others guaranteed in any manner, directly or indirectly, by such person (or in effect guaranteed indirectly, by such person through an agreement intended to have the effect of indebtedness or to assure the holder of indebtedness of such obligor against loss, whether through an obligation of such person to purchase property or services or to maintain such obligor’s financial condition or otherwise); (vii) all reimbursement obligations of such person in respect of letters of credit, foreign currency sale agreements and bankers’ acceptances, except such as are obtained by such person to secure performance of obligations (other than for monies borrowed or raised or similar obligations) incurred in the ordinary course of such person’s business; and (viii) all obligations of such person under interest rate, currency, commodity or other swap or hedging transactions, marked to market as if termination had occurred.
“Indemnitee” means together Lessor, Beneficiary, Owner, each Financier and the Servicer and their respective shareholders, affiliates, directors, officers, agents, employees, successors and permitted assigns and transferees.
“Insurances” means any and all contracts and policies of insurance required to be effected and maintained by Lessee under the Lease.
“Insured Value” with respect to the Aircraft means the amount specified in Schedule 12.
“Insurers” means the insurers under the Insurances.
“International Registry” means the registry established pursuant to the Cape Town Convention.
“JAA” means the European Joint Aviation Authorities.
“Landing Gear” means the nose gear and both left hand and right hand main gear assemblies excluding the wheels, tyres and brakes.
“Landing Gear Overhaul” means any overhaul/restoration to zero time of the Landing Gear assembly in accordance with the manufacturer’s component manual at shop and does not include any replacement, repair or overhaul of any rotable components, any cleaning or replacement of seals, any repair of brakes, wheels or tyres, brake rods, struts or braces, in each case, that occurs any more frequently than a full overhaul.
“Landing Gear Payment Rate” means the amount designated as such in paragraph 3.4 of Schedule 15 (as the same may be increased from time to time pursuant to paragraph 4.2.1 of Schedule 3).
“Latest Delivery Date” is specified in Schedule 12.
“Law of Insolvency Proceedings” means the Ley de Concursos Mercantiles dated 12 May 2000.
“Lease” means this Aircraft Lease Agreement, as the same may be amended or supplemented from time to time, and, where appropriate, the Certificate of Acceptance.
“Lessee” is defined in the initial paragraph of the Lease and shall include its successors and permitted assigns.
“Lessee’s Process Agent” is specified in Schedule 12.
“Lessor” is defined in the initial paragraph of the Lease and shall include its successors and assigns and transferees.
“Lessor Lien” means any Lien with respect to the Aircraft or any part thereof which results from (a) non-payment by Lessor or Owner of any Taxes imposed on Lessor, Servicer, Owner, Beneficiary, any Financier or any person lawfully claiming by or through any of them (except Taxes as to which Lessee is obliged to provide indemnification
 
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hereunder), (b) claims against Lessor, Owner, Owner Participant, Servicer, any Financier or any person lawfully claiming by or through any of them in relation to the financing of the Aircraft, any Engine or Part or claims against any or all of them not related to the transactions described in the Lease or the leasing of the Aircraft, (c) an affirmative act, or failure to act (where action is required) of Lessor or Owner not related to the transactions contemplated by the Lease or (d) any Mortgage.
“Lessor’s Bank Account” is specified in Schedule 12.
“ Letter of Quiet Enjoyment ” means a written confirmation by each of Owner, Servicer, Beneficiary, Superior Lessor, and any collateral agent or security trustee and their respective successors and permitted assigns, in form and substance reasonably satisfactory to Lessee, confirming such person’s covenant not to interfere with Lessee’s quiet and peaceful use and enjoyment of the Aircraft in the absence of an Event of Default.
“LIBOR” means in relation to any period (a “reference period”):
 
 	(a)	the British Bankers’ Association Interest Settlement Rate (as such rate appears on certain pages of the Reuters or Telerate screens or such other page or service as may replace it for the purpose of displaying London inter-bank Dollar offered rates of leading reference banks) which is quoted as of 11 a.m. (London time) on the day which is two (2) London Business Days prior to the commencement of the relevant reference period as being the interest rate offered in the inter-bank Market for Dollar deposits of a comparable amount to the amount in question for the same or as close as possible to the relevant reference period; or	
 
 	(b)	if Lessor notifies Lessee that, due to circumstances affecting the London inter-bank market generally, deposits in Dollars are not in the ordinary course of business available in the London inter-bank market for a period similar to the reference period, Lessor will inform Lessee of the rate in place of LIBOR that Lessor is able to obtain in the international markets and which, in the reasonable opinion of Lessor, most closely equates to LIBOR. While the circumstances affecting the London inter-bank market persist, that alternative rate will apply as LIBOR for all purposes of the Lease.	
“Lien” means any mortgage, pledge, lien, charge, encumbrance, lease, exercise of rights, right of detention or retention, security interest or assignment by way of security.
“LLP” means a life limited part in an Engine.
“LLP Payment Balance” means, in relation to any Engine and subject to Clause 10.2 and paragraph 5.5 of Schedule 3, the aggregate of all Maintenance Payment Amounts received by Lessor with respect to such Engine pursuant to paragraph 4.1.1 of Schedule 3 less the aggregate of all amounts paid by Lessor with respect to such Engine pursuant to paragraph 5.3 of Schedule 3.
“LLP Payment Rate” means the amount designated as such in paragraph 3.1 of Schedule 15 (as the same may be increased from time to time pursuant to paragraph 4.2.1 of Schedule 3).
“London Business Day” means a day other than a Saturday, Sunday or a day on which commercial banking institutions in the city of London are authorised by law to be closed.
“Losses” includes all losses (whether direct, indirect, special, incidental or consequential) including daños y perjuicios , suits, damages, liabilities, claims, proceedings, actions, penalties, fines, duties, fees, rates, levies, charges, demands, royalties or other sanctions of a monetary nature, insurance premiums, calls, judgments, costs and expenses (including any and all reasonable legal fees and expenses and the reasonable fees and expenses of other professional advisers), (other than (i) Taxes and (ii) any of the foregoing items arising from any breach by any party to the Relevant Documents other than Lessee).
 
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“Maintenance Items” has the meaning given to it in paragraph 4.1 of Schedule 3.
“Maintenance Manual” means, as the context requires, either the Aircraft Maintenance Manual issued by the Airframe Manufacturer or the Engine Manual issued by the Engine Manufacturer or other maintenance manuals issued by Suppliers relating to Parts.
“Maintenance Payment Amounts” is defined in Schedule 3.
“Maintenance Payment Balance” means, in relation to any Maintenance Item at any time and subject to Clause 10.2 and paragraphs 5.4 and 5.5 of Schedule 3, the aggregate of all Maintenance Payment Amounts received by Lessor with respect to such Maintenance Item pursuant to paragraph 4.1 of Schedule 3 at such time less the aggregate of all amounts paid by Lessor with respect to such Maintenance Item pursuant to paragraph 5.3 of Schedule 3 prior to such time.
“Maintenance Payment Year” means the period commencing on and including the Delivery Date and ending on and including the last day of the year in which the Delivery Date occurs and thereafter each period commencing on and including the first day of the next year and ending on and including the last day of such year or, in the case of the final Maintenance Payment Year, ending on and including the last day of the Term.
“Maintenance Program” means Lessee’s overhaul and maintenance program for aircraft of the same type as the Aircraft, as approved by the Aeronautics Authority and accepted by Lessor (such acceptance not to be unreasonably withheld or delayed), which shall substantially conform to the MPD and the MRB Document then in effect, and which includes (i) the inspection schedule for the Aircraft (structure, components, systems and Engines), and (ii) the list of controlled component items (Airframe and Engines).
“Mandatory Service Bulletins” , whether capitalised or not, means all Service Bulletins identified as “mandatory” by the issuing Manufacturer or Supplier.
“Manufacturer” means (a) as to the Engines, International Aero Engines and (b) as to the Airframe, Airbus.
“Margin” is specified in Schedule 12.
“Mexico” means the United Mexican States.
“Module” means any of the six modules of an Engine, namely the high pressure compressor (“HPC”), high pressure turbine (“HPT”), combustor, fan booster/low pressure compressor (“Fan Booster/LPC”), low pressure turbine (“LPT”), and gearbox.
“Mortgage” means any security interest in the Aircraft granted by Owner from time to time.
“Mortgagee” means any entity or entities to which Owner grants a security interest in the Aircraft and such entity’s or entities’ successors and assigns provided that Lessor or Owner has given Lessee notice of any such assign.
“MPD” means the Manufacturer’s approved Maintenance Planning Document for aircraft of the same type as the Aircraft which is in effect at the relevant time.
“MRB Document” means the FAA Maintenance Review Board Document for aircraft of the same type as the Aircraft which is in effect at the relevant time.
“Other Leases” shall mean any other aircraft or engine lease agreement (excluding this Lease) from time to time entered into between Lessor or Owner or any person managed by the Servicer, as lessor, and Lessee, as lessee.
 
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“Owner” means Wells Fargo Bank Northwest, National Association (not in its individual capacity but solely as owner trustee under a trust agreement with Beneficiary), or any permitted assignee thereof notified by Lessor to Lessee as being the owner of the Aircraft.
“Parts” means any and all appliances, parts, instruments, accessories, furnishings, seats and other equipment of whatever nature (other than complete Engines or engines), which (a) are from time to time incorporated or installed in or attached to the Airframe or an Engine, or (b) having been so installed or attached, are later removed therefrom, so long as title thereto remains vested in Owner in accordance with Clause 8.
“ Performance Restoration ” means, in relation to an Engine, the accomplishment of (a) a Level 3 refurbishment workscope of the combustor, nozzle guide vane and high pressure turbine sub-modules in such Engine, and (b) such additional work to the sub-modules of such Engine designed to result in an estimated target run time of at least 7,000 Cycles of on wing operation of such Engine before its next anticipated removal, in each case in accordance with the Engine Manufacturer’s then current V2500-A5 Maintenance Management Plan.
“Permitted Liens” means, in connection with the Aircraft or any part thereof, (a) this Lease and the other Relevant Documents and the rights of the parties hereunder or thereunder; (b) Liens for Taxes, assessments, other governmental charges or charges due to air traffic control authorities or airports, in each case either not yet due (but excluding any such Lien for Taxes, assessments, other governmental charges or charges payable to air traffic control authorities or airports that would have been due but for a rescheduling of the due date thereof that has not been consented to in writing by Lessor) or being contested in good faith (and for the payment of which adequate reserves in accordance with GAAP or IFRS have been provided) by appropriate proceedings so long as such proceedings do not involve any danger of the sale, forfeiture, loss or loss of use of the Aircraft, the Airframe or any Engine or any interest therein; (c) materialmen’s, mechanics’, workers’, repairers’, employees’, or other like Liens arising in the ordinary course of business for amounts the payment of which is either not yet due or is being contested in good faith (and for the payment of which adequate reserves in accordance with GAAP or IFRS have been provided) by appropriate proceedings so long as such proceedings do not involve danger of the sale, forfeiture or loss of use of the Aircraft, the Airframe or any Engine or any interest therein; (d) any other Liens with respect to which Lessee shall have provided security in form and amount reasonably acceptable to Lessor; (e) the Lien of any Mortgage or any other Lien created pursuant to the Financing Documents; and (f) Lessor Liens.
“PMA Part” means a replacement part which has not been manufactured by the original manufacturer of the Part to be replaced, but which meets the requirements of FAR 21.303.
“Post-Delivery Modifications” has the meaning given to such expression in Clause 8.6.
“Prohibited Country” means any state, country or jurisdiction which is subject from time to time to any United Nations Sanctions Order, European Union imposed sanction, US Export Controls (taking into account the possibility of obtaining applicable consents or licences), the United Kingdom Export of Goods (Control) Order 1992, the Dual-Use and Related Goods (Export Control) (Amendment) Regulations 1997 pursuant to the European Communities Act 1972 or any statutory modification or re-enactment thereof or successor or similar or corresponding legislation then in effect in the United Kingdom, France, Spain or Germany, the effect of which taking into account the possibility of obtaining applicable consents or licences, prohibits the exporting of the Aircraft to and/or the operation of the Aircraft to, from or within such state, country or jurisdiction.
“Recommended Service Bulletin” whether capitalised or not, means a Service Bulletin identified as “recommended” by the issuing Manufacturer or Supplier.
 
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“Redelivery Certificate” means a certificate substantially in the form of Schedule 13 to be executed by Lessee and Lessor to evidence the redelivery of the Aircraft to Lessor.
“Redelivery Location” means the facility of the Authorised Maintenance Performer performing the inspections and repairs required under Schedule 6, Part B, or such other location as may be mutually agreed in writing between Lessor and Lessee.
“Reference Banks” means the respective principal London offices of Citibank and JP Morgan Chase and/or such other banks as may from time to time be designated by Lessor.
“Reinsurances” is defined in Clause 11.1.
“Relevant Documents” means the Lease, the Certificate of Acceptance, the Deregistration Power of Attorney and all other agreements, documents or instruments which may be entered into, executed and/or delivered in connection with or pursuant to any of the foregoing.
“Relevant Work” is defined in Schedule 3.
“Rent” means Basic Rent and Supplemental Payments, collectively.
“Responsible Officer” means the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer and Fleet Planning Director (or any person with an equivalent title to any of the foregoing) of Lessee.
“Security Deposit” means, as the context shall require, the cash amounts to be paid by Lessee to Lessor, or each letter of credit delivered by Lessee to Lessor from time to time, in accordance with Clause 4.4.
“Security Letter of Credit” means an irrevocable standby letter of credit issued by a Security Letter of Credit Issuer in the Security Letter of Credit Face Amount in the form and substance of Schedule 7, or such other form as may be agreed to by Lessor (acting reasonably).
“Security Letter of Credit Face Amount” is specified in paragraph 2.2 of Schedule 15.
“Security Letter of Credit Issuer” shall mean a major bank rated AA or better by Moody’s Investor Services or Standard & Poor’s based in New York, London or Frankfurt and otherwise reasonably acceptable to Lessor.
“SENEAM” means Servicios a la Navegación en el Espacio Aereo Mexicano , a Government Entity in charge of providing air navigation services to all air carriers, in Mexico.
“Service Bulletin” means a service bulletin which is issued by a Manufacturer or Supplier and is applicable to aircraft of the same type as the Aircraft or engines of the same type as the Engines or items of equipment of the same type as the Parts.
“Servicer” means (a) collectively Macquarie Aircraft Leasing Services (Ireland) Limited, Macquarie Aircraft Leasing Services (UK) Limited, Macquarie Aircraft Leasing Services (US) Inc. and Macquarie Aircraft Leasing Services (Singapore) Pte. Limited in their capacities as servicers or sub-servicers of or with respect to Lessor, or (b) such other entity or entities as Lessor may notify Lessee from time to time.
“Six Year Check” means (a) the intermediate airframe structural and zonal inspection of the Aircraft (and all resulting repairs, if any) that, in accordance with the MPD, are recommended to be performed at six year intervals, and (b) such additional tasks (and all resulting repairs, if any) that, in accordance with the MPD, have less than a C Check Interval remaining before the date on which it is recommended they be accomplished (provided always that a Six Year Check shall only be deemed to have been performed with respect to the Aircraft if (i) the Aircraft is cleared for operation for a C Check Interval once all inspections, tasks and repairs have been performed, and (ii) (in the case that the Current Revision has been superseded) the inspections, tasks and repairs to be performed in connection therewith are at least as extensive as those that would have been recommended for such Six Year Check in accordance with to the Current Revision).
 
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“Six Year Check Payment Rate” means the amount designated as such in paragraph 3.3.1 of Schedule 15 (as the same may be increased from time to time pursuant to paragraph 4.2.1 of Schedule 3).
“State of Registration” is specified in Schedule 12.
“Superior Lease” means that certain aircraft lease agreement of even date herewith between Owner and Lessor, and any other lease, conditional sale, instalment sale, hire purchase or other similar document entered into between Owner and Lessor in connection with the Aircraft.
“Supplemental Payments” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes, agrees or is obligated to pay under the Lease or any other Relevant Document.
“Supplier” means the manufacturer, vendor or supplier of any part of the Aircraft other than a Manufacturer.
“Tax” includes any present or future tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called (including stamp, documentary, registration, value added tax or other like tax, duty or charge), together with any penalties, fines or interest imposed thereon, imposed, levied, collected, withheld or assessed by any person in any jurisdiction.
“Tax Indemnitee” means each of Lessor, Beneficiary, Owner, Servicer, any Mortgagee, any Financier and each person with whom any of the foregoing files a consolidated Tax return.
“Twelve Year Check” means (a) a Six Year Check, and (b) the heavy airframe structural and zonal inspection of the Aircraft (and resulting repairs, if any) that, in accordance with the MPD, are recommended to be performed at twelve year intervals (provided always that a Twelve Year Check shall only be deemed to have been performed with respect to the Aircraft if (in the case that the Current Revision has been superseded) the inspections, tasks and repairs to be performed in connection therewith are at least as extensive as those that would have been recommended for such Twelve Year Check in accordance with to the Current Revision.
“Twelve Year Check Payment Rate” means the amount designated as such in paragraph 3.3.2 of Schedule 15 (as the same may be increased from time to time pursuant to paragraph 4.2.1 of Schedule 3).
“Term” means the period for which the Aircraft is leased under the Lease pursuant to Clause 3 of the Lease. If such period is shortened or extended, the word “Term” shall be deemed to refer to such period as so shortened or extended, and all provisions of the Lease shall apply until the expiration date of such period, except as may be otherwise specifically provided herein.
“Termination Date” means the date upon which Lessor terminates the leasing of the Aircraft under Clause 16 of the Lease.
 
2.	Construction	
Except to the extent that the context requires otherwise, any reference in the Lease to:

2.1.1	  	a statutory or legislative provision, shall be construed, at any particular time, as including a reference to any modification, extension or re-enactment thereof then in force and all instruments, orders and regulations then in force and made under or deriving validity from the relevant provision;	
 
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2.1.2	  	any other agreement or document shall be construed as a reference to such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented;	
		
2.1.3	  	a “Clause” or “Schedule” is a reference to a Clause of, or Schedule to, the Lease;	
		
2.1.4	  	a person being an “affiliate” of another means that that person directly or indirectly controls, is controlled by, or is under common control with, that other person;	
		
2.1.5	  	“consent” also includes an approval, authorisation, exemption, filing, licence, order, permission, recording or registration (and references to obtaining consents shall be construed accordingly);	
		
2.1.6	  	one person being “controlled” by another means that that other (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) has the power to appoint and/or remove all or the majority of the members of the board of directors or other governing body of that person or otherwise controls or has the power to control the affairs and policies of that person;	
		
2.1.7	  	“law” includes common, customary or civil law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement or any judicial or administrative decision, ruling, judgment, order (or interpretation or application of any of the same), whether or not having the force of law, but if not having the force of law, only if compliance with that law is in accordance with the general practice of persons to whom it is intended to apply;	
		
2.1.8	  	a “month” is a reference to a period starting on one day in a month of the year and ending on the numerically corresponding day in the next succeeding month, except that if there is no numerically corresponding day in the next month of the year, that period shall end on the last day of that next succeeding month;	
		
2.1.9	  	a “person” includes any individual, company, corporation, firm, partnership, joint venture, association, organisation, trust, state or agency of a state (in each case, whether or not having separate legal personality) and any assignee or successor in title to that person;	
		
2.1.10	  	the “winding up” of a person also includes the amalgamation, reconstruction, reorganisation, administration, dissolution, liquidation, merger or consolidation of that person, and any equivalent or analogous procedure under the law of any jurisdiction in which that person is incorporated, domiciled or resident or carries on business or has assets;	
		
2.1.11	  	the Table of Contents, the Lease Summary and Clause headings are for convenience only and are to be ignored in construing the Lease;	
		
2.1.12	  	where the context so admits, words importing the singular number only shall include the plural and vice versa;	
		
2.1.13	  	references to a provision of the Cape Town Convention will, unless it is specifically stated to be a reference to a provision of the Convention or, as the case may be, the Aircraft Protocol, be a reference, whether stated or not, to the relevant provision of the Consolidated Text, and reference to any provision of the Consolidated Text shall include a reference to the provision(s) of the Convention and/or the Aircraft Protocol from which such provision(s) is/are derived; and	
 
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2.1.14	  	unless the context requires otherwise, the terms “associated rights”, “Contracting State”, “creditor”, “debtor”, “de-registration of the aircraft”, “international interest”, “International Registry” and “prospective international interest” shall have for all purposes of the Lease the respective meanings given to them in the Cape Town Convention and such meanings shall be equally applicable to both the singular and the plural forms of such terms.	
 
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Schedule 2
Conditions Precedent
 
1.	Conditions Precedent to Lessor’s obligation to lease the Aircraft to Lessee	
 
1.1	On the date of execution of the Lease by Lessee, Lessor shall have received the following:	
 
 	1.1.1	written evidence of appropriate corporate action, certified by a duly authorised representative of Lessee, duly authorising the lease of the Aircraft hereunder and the execution, delivery and performance of the Relevant Documents to which Lessee is a party, together with appropriate evidence as to the authority of the person or persons executing and delivering the Relevant Documents on behalf of Lessee, all such documents to be in form and substance satisfactory to Lessor;	
 
 	1.1.2	a copy of the constitutional documents of Lessee, certified by a duly authorised representative of Lessee as a true and complete copy; and	
 
 	1.1.3	the management prepared balance sheet of Lessee as at December 31, 2010, and the audited statement of income of Lessee for the year ended on December 31, 2009.	
 
1.2	On or prior to the Anticipated Delivery Date, Lessor shall have received the following in form and substance satisfactory to Lessor:	
 
 	1.2.1	a copy of the Maintenance Program in form and substance satisfactory to Lessor (acting reasonably), which Lessor hereby agrees shall be subject to the confidentiality provisions of Clause 17.16;	
 
 	1.2.2	satisfactory evidence that the Aeronautics Authority has approved the Maintenance Program; and	
 
 	1.2.3	confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry.	
 
1.3	On or prior to the Anticipated Delivery Date, Lessor shall have received the remaining balance of the Security Deposit in the amount and manner provided for in Clause 4.4, paragraph 2.1 of Schedule 3 and paragraph 2.1 of Schedule 15.	
 
1.4	On or prior to the Delivery Date, Lessor shall have received the first payment of Basic Rent.	
 
1.5	On or prior to the Delivery Date, Lessor shall have received the following, each in form and substance satisfactory to Lessor:	
 
 	1.5.1	the Certificate of Acceptance, duly executed by Lessee, dated the Delivery Date;	
 
 	1.5.2	copies of all licenses and permits required for the operation of the Aircraft in the State of Registration;	
 
 	1.5.3	a certificate signed by a duly authorised officer of Lessee, dated the Delivery Date, to the effect that:	
 
 	(a)	the representations and warranties made by Lessee in the Relevant Documents are true and correct on and as of the Delivery Date as though made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case the relevant representations and warranties shall be correct as of such earlier date; and	
 
 	(b)	no Default or Event of Default has occurred and is continuing, or would result from the lease of the Aircraft hereunder;	
 
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 	1.5.4	the favourable written opinion of in-house counsel to Lessee, addressed to Lessor and Financiers, in form and substance reasonably acceptable to such parties;	
 
 	1.5.5	except for the post-delivery authorizations or filings set forth as conditions subsequent under paragraph 3 of this Schedule 2, all authorizations and approvals of, and notices to, and filings and recordings with, all regulatory bodies and authorities which are conditions to the validity and/or enforceability of the Lease or Lessee’s performance thereunder have been accomplished;	
 
 	1.5.6	insurance and reinsurance certificates and a letter of undertaking from independent aircraft insurance brokers evidencing Lessee’s compliance with the provisions of Clause 11;	
 
 	1.5.7	an acknowledgement of the security assignment of this Lease in favour of Citibank N.A., in the form of Schedule 16, executed on behalf of Lessee;	
 
 	1.5.8	a Deregistration Power of Attorney, duly executed by Lessee and notarized by a Mexican notary public;	
 
 	1.5.9	satisfactory evidence that Lessee’s agent for service of process specified in Clause 17.6 has accepted such appointment; and	
 
 	1.5.10	a Spanish translation of the Lease certified by a translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judiciary.	
 
1.6	No Default or Event of Default shall have occurred and be continuing and no default or event of default shall have occurred and be continuing under any Other Lease.	
These conditions are included for the sole benefit of Lessor and may be waived or deferred in whole or in part by Lessor who may attach to such waiver or deferral such further or other conditions as it reasonably thinks fit.
 
2.	Conditions Precedent to Lessee’s Obligation to Accept the Aircraft on Lease from Lessor	
 
2.1	The Aircraft shall be in the condition and configuration specified in Part A of Schedule 6, subject only to minor deviations therefrom acceptable to Lessee (acting reasonably); and	
 
2.2	On or before the Delivery Date, Lessee shall have received:	
 
 	2.2.1	a certificate signed by a duly authorised officer of the Servicer, to the effect that all appropriate action has been taken to authorise or ratify the lease by Lessor of the Aircraft hereunder and the execution, delivery and performance by Lessor of the Lease, together with an incumbency certificate as to the person or entity or persons authorised to execute and deliver said certification and said documents on behalf of Lessor;	
 
 	2.2.2	a certificate signed by a duly authorised officer of the Servicer, dated the Delivery Date, to the effect that the representations and warranties contained in Clause 5.1 are true and correct on and as of such date as though made on and as of such date in form and substance reasonably satisfactory to Lessee; and	
 
 	2.2.3	duly signed Letters of Quiet Enjoyment from each of Owner, Beneficiary, Servicer and Citibank, N.A. as collateral agent.	
 
3.	Conditions Subsequent	
 
3.1	Lessee covenants and agrees to provide to Lessor each of the following items as promptly as practicable and in any event within ten (10) Business Days following the Delivery Date:	
 
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 	3.1.1	evidence satisfactory to the Lessor that all applicable required import licenses ( pedimento de importación ) have been obtained and customs duties, if any, in respect of the Aircraft have been paid in full by Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by Lessee when they become payable), it being acknowledged that the document evidencing importation of the Aircraft will only be available upon Lessee’s import of the Aircraft into Mexico, and that it is expected that such import will be exempt from Taxes;	
 
 	3.1.2	evidence satisfactory to Lessor that this Lease and, at Lessor’s cost, any Superior Lease, any Mortgage and any security assignment of this Lease shall, to the extent possible and unless any failure results from an act or omission of Lessor or any person claiming by or through Lessor, have been duly filed with the Aeronautics Authority and any other appropriate Government Entities in the State of Registration or elsewhere, together with file-stamped copies of each such document (if available);	
 
 	3.1.3	a copy of the form containing the AEP Code required in respect to the Aircraft issued by the registry of the DGAC to enable the professional user entity designated by Lessor to register the international interests (and assignments thereof) created pursuant to this Lease, any Superior Lease, any Mortgage and any security assignment of this Lease (the “Specified Interests”) at the International Registry, and that Lessee has consented to such professional user entity acting as its professional user entity for dealings with the International Registry with respect to the Specified Interests;	
 
 	3.1.4	evidence satisfactory to Lessor that the international interests created by this Lease and, at Lessor’s cost, the other Specified Interests have been filed with the International Registry;	
 
 	3.1.5	evidence that Lessee has been assigned by the registry of the Aeronautics Authority with provisional registration marks for the Aircraft by means of an Oficio de Asignacion de Matricula Provisional and, on the basis of such provisional registration, obtained a Provisional Certificate of Airworthiness ( Certificado Provisional de Aeronavegabilidad ) issued by the Aeronautics Authority after conducting the corresponding on-site technical inspection of the Aircraft; and	
 
 	3.1.6	evidence that the details of the Aircraft have been added to the list of aircraft covered by the Maintenance Program.	
 
3.2	Lessee covenants and agrees that as promptly as practicable and in any event within thirty (30) Business Days of the Delivery Date, Lessee shall provide Lessor with evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft into its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft.	
 
3.3	Lessee covenants and agrees that as promptly as practicable following receipt thereof and in any event within sixty (60) Business Days of the Delivery Date, Lessee shall provide Lessor with a copy of the permanent Certificate of Registration of the Aircraft issued by the registry of the DGAC and such permanent Certificate of Registration shall (a) note the name of the Owner, as owner of the Aircraft, and (b) include the identifying details of the Lease (to the extent such details are customarily provided).	
 
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Schedule 3
Rent And Other Payments
 
1.	BASIC RENT	
 
1.1	Payment of Basic Rent	
 
 	1.1.1	Lessee will pay to Lessor Basic Rent each month throughout the Term.	
 
 	1.1.2	The first instalment of Basic Rent will be due and payable on the first Basic Rent Payment Date.	
 
 	1.1.3	Each subsequent instalment of Basic Rent will be due and payable on each subsequent Basic Rent Payment Date throughout the Term.	
 
1.2	Basic Rent Amounts	
The Basic Rent in respect of each Basic Rent Period during the Term will be calculated in accordance with paragraph 1 of Schedule 15.
 
2.	SECURITY DEPOSIT	
The amount of the Security Deposit and the timing of the payments of the same to Lessor are set forth in Schedule 15.
 
3.	[INTENTIONALLY OMITTED]	
 
4.	MAINTENANCE PAYMENT AMOUNTS	
 
4.1	Payment of Maintenance Payment Amounts	
In addition to the Basic Rent payable under paragraph 1 of this Schedule 3 and subject to the remaining provisions of this paragraph 4, Lessee will pay to Lessor on the fifteenth (15th) day of each consecutive month during the Term, commencing on the fifteenth (15th) day of the month immediately following the month in which the Delivery Date occurs, and on the last day of the Term, the following amounts ( “Maintenance Payment Amounts” ) in relation to the following parts, overhauls and inspections of the Aircraft ( “Maintenance Items” ):
 
 	4.1.1	in relation to the life limited parts ( “LLPs” ) in each Engine, an amount equal to the LLP Payment Rate multiplied by the number of Cycles accumulated on each Engine during the immediately preceding month;	
 
 	4.1.2	in relation to Engine Performance Restoration of an Engine, an amount equal to the Engine Payment Rate for such Engine and the immediately preceding month determined in accordance with paragraph 3.2 of Schedule 15 multiplied by the number of Engine Hours accumulated on such Engine during the immediately preceding month.	
 
 	4.1.3	in relation to the Airframe:	
 
 	(a)	for the Six Year Check, an amount equal to the Six Year Check Payment Rate for each month or part thereof, and	
 
 	(b)	for the Twelve Year Check, an amount equal to the Twelve Year Check Payment Rate for each month or part thereof;	
 
 	4.1.4	in relation to overhaul of the Landing Gear, an amount equal to the Landing Gear Payment Rate per month or part thereof; and	
 
 	4.1.5	in relation to APU Maintenance or APU Heavy Repair, an amount equal to the APU Payment Rate multiplied by the number of APU Hours accumulated on the APU during the immediately preceding month.	
 
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4.2	Assumptions and Adjustments	
 
 	4.2.1	The Maintenance Payment Rates and the amounts in the table set out in paragraph 3.2 of Schedule 15 (the “ Engine Table Amounts ”) have been calculated on the basis of economic conditions prevailing in January 2011 and shall be adjusted by Lessor on or about the 1 st day of January of each year after the Delivery Date, as follows:	
 
 	(a)	in the case of the LLP Payment Rate, utilising the then current LLP catalogue prices and changes in LLP life limits (assuming a ten percent (10%) stub life); and	
 
 	(b)	in the case of all other Maintenance Payment Rates and the Engine Table Amounts, at a rate of 3.0% per annum.	
All new Maintenance Payment Rates and the Engine Table Amounts will be supplied promptly to Lessee, and Lessee will pay Maintenance Payment Amounts in accordance with the adjusted Maintenance Payment Rates for that year. If the adjustment for any year takes place after February 1st in that year, it shall be retroactive to the first day of that year.
 
 	4.2.2	The Engine Table Amounts have been calculated on the assumptions that each Engine will be operated solely within Mexico and between Mexico and the United States of America (with at least one quarter of all departures being from the United States of America) at an average de-rate of 10%. If any or all of such assumptions proves to be incorrect for an Engine in any Maintenance Payment Year, Lessor (acting reasonably) may, following consultation with Lessee, or shall at Lessee’s reasonable request, after the end of such Maintenance Payment Year (or, in the case of the final Maintenance Payment Year, on the last day of the Term) (1) amend the Engine Table Amounts by reference to the changed assumptions, and (2) recalculate the Engine Maintenance Payment Amounts for such Maintenance Payment Year by reference to such amended Engine Table Amounts. If the effect of such recalculation is that the aggregate amount paid by Lessee pursuant to paragraph 4.1.2 for the Maintenance Payment Year in question:	
 
 	(a)	exceeds the amount which would have been paid by it had Lessee paid the recalculated amounts for the Maintenance Payment Year in question, Lessee shall be entitled to a credit equal to the excess, such credit to be applied evenly against the payments of Maintenance Payment Amounts to be made by Lessee in respect of Engine Performance Restoration for the subsequent 12 months of operation. If any such credit is remaining on the last day of the Term, Lessor shall off-set an amount equal to such remaining credit against any other amounts then due from Lessee under this Lease or any other Relevant Document and, provided no Event of Default shall have then occurred which is continuing or following cure of the same and provided Lessee shall have returned the Aircraft to Lessor in compliance with the requirements of this Lease, Lessor shall promptly pay any balance thereof to Lessee; or	
 
 	(b)	is less than the amount which would have been paid by it had Lessee paid the recalculated amounts for the Maintenance Payment Year in question, Lessee shall pay to Lessor an amount equal to the shortfall in 12 (twelve) equal monthly instalments over the subsequent 12 months of operation. If any amount of such shortfall is still owing by Lessee on the last day of the Term, such amount shall be paid in full by Lessee on the last day of the Term.	
 
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If Lessee fails to report the derate of an Engine in any month it shall be assumed to be ***** until the actual rate is reported provided the same is reported no later than 30 days following the end of the relevant maintenance year.
 
 	4.2.3	The Maintenance Payment Amounts for the Six Year Check and the Twelve Year Check include routine and non-routine labour and material for MPD structural and zonal tasks and MPD systems tasks having an interval greater than a C Check Interval carried out concurrently with the Six Year Check or the Twelve Year Check.	
 
4.3	Ownership of Maintenance Payment Amounts	
All Maintenance Payment Amount payments paid by Lessee to Lessor become the property of Lessor upon receipt. This paragraph 4.3 is without prejudice to Lessee’s rights under paragraph 5.3 below.
 
5.	LESSOR’S BASIC CONTRIBUTION TO THE COST OF RELEVANT WORK	
 
5.1	Payments by Lessor	
Lessor will, subject to no Default or Event of Default having occurred which is continuing (or promptly following cure thereof and to the extent such amounts are not used to effect such cure and are not reimbursed by Lessee), pay to Lessee the amounts referred to in paragraph 5.3 by way of contribution to the cost incurred by Lessee in performing the tasks specified in paragraph 5.2 (the “Relevant Work” ), in each case provided that:
 
 	5.1.1	Lessor has received Lessee’s claim (a “ Basic Contribution Claim ”) for payment together with (1) invoices from the Authorised Maintenance Performer evidencing the costs involved which (x) confirm that the Relevant Work has been carried out and paid for and (y) give in reasonable detail a summary of the work that has been performed, and the time, parts and manpower used to perform each separate task, and (2) responses to all reasonable requests from Lessor for clarifications or more information on any related issue have been complied with to the reasonable satisfaction of Lessor;	
 
 	5.1.2	Lessee has provided Lessor with (i) a copy of the proposed workscope relating to the Relevant Work reasonably in advance of commencement of the Relevant Work in order to allow Lessor a reasonable opportunity to review and approve the proposed workscope (such approval not to be unreasonably withheld, conditioned or delayed) and (ii) an estimate in reasonable detail of the cost of such Relevant Work which has been accepted by Lessor prior to the commencement of the Relevant Work (such acceptance not to be unreasonably withheld or delayed). If requested by Lessor, Lessee or Lessee’s agents will give Lessor or Lessor’s representatives reasonable access to observe the accomplishment of the Relevant Work and to inspect the completion of the Relevant Work (subject to obtaining all necessary security clearances from the Authorised Maintenance Performer);	
 
 	5.1.3	the Relevant Work has been performed in accordance with the Maintenance Program and documented in accordance with the Lease, including full traceability of LLPs;	
 
 	5.1.4	the Relevant Work is not required as a result of any ingestion, foreign object damage (FOD), faulty maintenance or repair, improper operation, abuse, misuse, neglect or accidental cause (“ Excluded Circumstances ”) provided that if as a result of any of the Excluded Circumstances a Performance Restoration is performed with Lessor’s prior written agreement (not to be unreasonably withheld, conditioned or delayed), then, without prejudice to paragraphs 5.1.1 through 5.1.3 above and paragraphs 5.1.5 through 5.1.9 below, this paragraph 5.1.4 shall not operate to block Lessor’s obligation to make a payment to Lessee in accordance with paragraph 5.3 for the costs of such Performance Restoration other than costs directly resulting from any of the Excluded Circumstances;	
 
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 	5.1.5	the amount of any Lessor contribution shall be reduced by an amount equal to the amount of any proceeds of Insurances or any Manufacturer or Supplier warranty, guarantee or concessionary adjustment available to Lessee by the insurers or any manufacturers in respect of the Relevant Work;	
 
 	5.1.6	Lessor will make a contribution to the cost of labour and materials in performing the Relevant Work (excluding the cost of labour for removal or installation of an Engine, Landing Gear or APU);	
 
 	5.1.7	Lessor will not make a contribution to the cost of a modification upgrade of a Maintenance Item to the extent that the cost of upgrading that Maintenance Item is greater than the cost of repairing or replacing the existing Maintenance Item;	
 
 	5.1.8	Lessor will not make a contribution to the cost of work to components not installed in the Modules of each Engine or installed in the APU (including but not limited to thrust reversers, nacelles, line replaceable units (LRUs), quick engine change parts (QECs) or accessories); and	
 
 	5.1.9	Lessor will not make a contribution to the cost of transportation or the cost of obtaining customs clearance for importation of parts (including, but not limited to, import/export duties, levies and other Taxes), nor will Lessor make a contribution to any handling fees, mark-ups or surcharges.	
Lessor will use reasonable efforts to ensure that each payment due under this paragraph 5.3 is made within thirty (30) days of the receipt by Lessor of the relevant Basic Contribution Claim. No Basic Contribution Claim may be submitted after the redelivery of the Aircraft except for any Basic Contribution Claim for which (i) an invoice remains outstanding for the Relevant Work at such time, and (ii) Lessee has notified Lessor in writing prior to such redelivery of any such outstanding invoice, and (iii) Lessee has notified Lessor in writing prior the redelivery of the Aircraft of the nature and estimated cost or costs of the Relevant Work.
 
5.2	Scope of Relevant Work	
The following items shall be the “Relevant Work” for which a Basic Contribution Claim may be made:
 
 	5.2.1	completion of the Six Year Check and/or Twelve Year Check, as applicable;	
 
 	5.2.2	Performance Restoration of an Engine;	
 
 	5.2.3	replacement LLPs installed in an Engine;	
 
 	5.2.4	APU Heavy Repair and/or APU Maintenance, as appropriate; and	
 
 	5.2.5	Landing Gear Overhauls.	
 
5.3	Amount of Lessor’s basic contribution to the cost of Relevant Work	
 
 	5.3.1	Lessor will, subject to no Default or Event of Default having occurred which is continuing (or following cure thereof), pay to Lessee in relation to any Relevant Work, an amount equal to the lesser of:	
 
 	(a)	the cost of that Relevant Work less any additional amount contributed by Lessor to the cost of that Relevant Work as contemplated by paragraph 7 below; and	
 
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 	(b)	an amount equal to the Maintenance Payment Balance with respect to the particular Maintenance Item at the date (the “ Commencement Date ”) of the commencement of (or removal of the particular item from the Airframe for) the Relevant Work.	
 
 	5.3.2	For the avoidance of doubt, when considering its obligation to make a payment under this paragraph 5.3 in relation to Relevant Work on any Maintenance Item, Lessor will not take into account any amounts paid by Lessee under paragraph 4.1 or 4.2 in relation to any other Maintenance Item.	
 
 	5.3.3	Lessee undertakes to use reasonable efforts to (i) obtain a fair and reasonable price when negotiating and agreeing with third party Authorized Maintenance Performers or any other repairer the cost of any Relevant Work (in the case of each third party Authorized Maintenance Performer, if the Relevant Work is covered by an agreement existing on the date hereof with such Authorized Maintenance Performer, to the extent allowed by such agreement) and (ii) before the performance of any Relevant Work to provide Lessor with copies of relevant documents including but not limited to estimates of the cost of routine and non-routine labour and materials in respect of any Relevant Work.	
 
 	5.3.4	Lessee will be responsible for payment of all costs in relation to any Relevant Work in excess of the amounts paid under this paragraph 5.3 and paragraph 7 of this Schedule 3. If at any time the Maintenance Payment Balance for the relevant Maintenance Item (at the Commencement Date for the Relevant Work) is insufficient to satisfy a claim for reimbursement, the shortfall may not be carried forward or made the subject of any further claim under this paragraph 5.3.	
 
 	5.3.5	Provided no Event of Default has occurred which is continuing or following cure thereof, and subject to the other conditions set out in this paragraph 5.3.5, Lessee may request Lessor to pay (and Lessor shall promptly pay) to the Authorised Maintenance Performer, at the time of induction of a Maintenance Item for any Relevant Work, an amount equal to the lesser of:	
 
 	(a)	50% of the estimated cost of such Relevant Work, based on an estimate in reasonable detail of the cost of such Relevant Work which has been accepted by Lessor (such acceptance not to be unreasonably withheld or delayed); and	
 
 	(b)	50% of the Maintenance Payment Balance with respect to the particular Maintenance Item at the Commencement Date for the Relevant Work,	
(such amount, an “ Advance Payment ”).
Any Advance Payment shall be subject to satisfaction of the conditions set forth in paragraphs 5.1.2, 5.1.4, 5.1.5, 5.1.6, 5.1.7, 5.1.8 and 5.1.9 above. Any Advance Payment shall be deemed to have been paid to Lessee for all purposes of this Lease, and the Maintenance Payment Balance with respect to the particular Maintenance Item shall be reduced by an amount equal to such Advance Payment. Following completion of the Relevant Work to which the Advance Payment relates, Lessee shall provide Lessor with (1) invoices from the Authorised Maintenance Performer evidencing the costs involved which (x) confirm that the Relevant Work has been carried out and paid for and (y) give in reasonable detail a summary of the work that has been performed, and the time, parts and manpower used to perform each separate task, and (2) responses to all reasonable requests from Lessor for clarifications or more information regarding the Relevant Work.
 
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5.4	Additional payments by Lessor in respect of Maintenance Payment Balances (other than the LLP Payment Balances)	
If, following any payment by Lessor under paragraph 5.3 in respect of any Relevant Work on a Maintenance Item (other than with respect to the replacement of an LLP in an Engine), the Maintenance Payment Balance for such Maintenance Item as of the Commencement Date is greater than the amount of such reimbursement, then Lessor will (provided no Default or Event of Default has occurred and is continuing) promptly pay to Lessee an amount equal to the difference between such amounts, and the Maintenance Payment Balance with respect to the Maintenance Item will be deemed to be reduced by the amount so paid by Lessor.
 
5.5	Additional payment by Lessor in respect of the LLP Payment Balances	
 
 	5.5.1	Following Lessor’s payment to Lessee pursuant to paragraph 5.3 above in respect of any replacement of an LLP or LLPs in an Engine (each a “ Replacement ”), Lessor will make the following calculations:	
 
 	(a)	With respect to each LLP installed in such Engine on the Completion Date next succeeding such Replacement, the amount that is “A”, where	
 
 	    	*****	
 
 	(b)	With respect to such Engine, the aggregate of all amounts that are equal to “A” for all LLPs installed in such Engine on the Completion Date next succeeding such Replacement (such aggregate amount being the “ Completion Date Stack Value ”);	
 
 	(c)	The Maintenance Payment Balance for the LLPs in such Engine as of the Completion Date next succeeding such Replacement (for these purposes, determined on the assumption that Lessor shall, prior to such date, have made the payment to Lessee pursuant to paragraph 5.3 required in respect of such Replacement) (such amount being the “ Completion Date Maintenance Payment Balance ”);	
 
 	(d)	With respect to each LLP installed in such Engine on the Delivery Date, the amount that is “E”, where *****:	
 
 	    	*****	
 
 	(e)	With respect to such Engine, the aggregate of all amounts that are equal to “E” for all LLPs installed in such Engine on the Delivery Date (such aggregate amount being the “ Delivery Date Stack Value ”);	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	(f)	The aggregate of (i) the amount contributed by Lessor, as contemplated by paragraph 7 below, to the cost of such Replacement (for these purposes, determined on the assumption that Lessor shall have made such contribution prior to the Completion Date next succeeding such Replacement) and (ii) all amounts contributed by Lessor, as contemplated by paragraph 7 below, to the cost of replacement of LLPs completed prior to the Replacement (such aggregate amount being the “ Lessor Subsequent Contribution ”); and	
 
 	(g)	The amount that is I (which amount may be positive or negative), where *****,	
in each case determined as of the Completion Date next succeeding such Replacement.
 
 	5.5.2	If the amount calculated by Lessor to be “I” with respect to any Replacement is a positive amount, Lessor will (provided no Default or Event of Default has occurred which is continuing) promptly pay to Lessee an amount equal to the lesser of (a) such amount, and (b) the Completion Date Maintenance Payment Balance for such Replacement, and the LLP Payment Balance with respect to the relevant Engine will be deemed to be reduced by the amount so paid by Lessor.	
 
 	5.5.3	In this paragraph 5.5:	
“Completion Date” means, with respect to any Replacement, the date on which the applicable Engine departs the applicable engine repair facility in serviceable condition following such Replacement; and
“Cost Per Cycle” means, in respect of an LLP and a Replacement, the cost per Cycle of such LLP determined by dividing the catalog price of such LLP by 90% of the then-current life limit (in Cycles) of such LLP (in each case determined as of the Completion Date next succeeding such Replacement).
 
6.	[INTENTIONALLY OMITTED]	
 
7.	LESSOR’S ADDITIONAL COST SHARING	
For as long as no Event of Default has occurred which is continuing (or promptly following cure thereof) and subject to the conditions specified in paragraph 5.1, Lessor shall make the further contributions to the costs of maintaining the Aircraft during the Term in the manner and in the amounts set forth in paragraph 5 of Schedule 15.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Schedule 4
Form of Certificate of Acceptance
THIS CERTIFICATE OF ACCEPTANCE is dated [            ], 2011 (this “ Certificate of Acceptance ”), between MASL IRELAND (22) LIMITED (“ Lessor ”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”).
WITNESSETH:
WHEREAS , Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement dated as of April 7, 2011 (the “ Lease ”), which provides for the execution and delivery of a Certificate of Acceptance in substantially the form hereof for the purpose of leasing the Aircraft in accordance with the terms thereof;
NOW , THEREFORE , in consideration of the premises, and pursuant to Clause 2 of the Lease, Lessor and Lessee hereby agree as follows:
 
1.	Definitions	
Unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings given them in the Lease.
 
2.	Delivery and Acceptance	
Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor under the Lease, as hereby supplemented:
Aircraft: One Airbus A320-200 aircraft consisting of the following:
 
 	2.1.	Airframe:	

Registration Mark:	 	XA-VOU	
Manufacturer’s Serial No.	 	2204	
Total Flight Hours:	 	[            ]	
Total Cycles:	 	[            ]	
Date of last 6 Year Check:	 	[            ]	
 
 	2.2.	Engines: Two IAE V2527-A5 turbofan engines installed on said Airframe, bearing, respectively, Manufacturer’s Serial Nos.:	

Engine
Number	  	Manufacturer’s
Serial Number	  	Total
Hours	  	Engine	  	Total
Cycles	
1.	  	V11674    	  		  		  		
2.	  	V11672    	  		  		  		
The status of the time controlled components, engine modules and life limited parts is set forth in Appendix I hereto.
 
 	2.3.	Auxilary Power Unit	

Make and	  	Mfr’s Serial	 	  	Total APU	 	  	Hours Since	 	  	Total APU	 	  	Cycles Since	 	
Model	  	 	Number	  	  	 	Hours	  	  	 	Heavy Repair	  	  	 	Cycles	  	  	 	Heavy Repair	  	
 
- 74 -

 	2.4.	Landing Gear	

Position	  	Date of Last Overhaul	  	Hours and Cycles Since
Overhaul	
Nose	  		  		
Main – Left	  		  		
Main – Right	  		  		
 
 	2.5.	Brake Wear Pin Measurements	

Position	  	Measurement	  	 	  	 	
 
 	2.6.	Lessor Furnished Equipment: The equipment furnished by Lessor and installed in the Aircraft (including avionics, safety equipment and galley equipment) is described in Appendix II hereto.	
Lessee confirms that the Aircraft has been examined by its duly appointed and authorized representatives and such items conform to the information set forth above.
 
3.	Aircraft Records	
Lessor hereby delivers and Lessee hereby accepts the manuals, log books, records and other documents relating to the Aircraft described in Appendix III hereto.
 
4.	Delivery Date	
The Delivery Date of the Aircraft is the date first set forth above, and the Aircraft is hereby delivered and accepted on such date at             hours local time at Montpellier Airport, France.
 
5.	Fuel	
At the time of delivery there were 3650 kg. of fuel in the Aircraft and each oil tank was full, each of which was paid for by Lessor.
 
6.	Condition of Aircraft	
The Aircraft is delivered in good working order and condition except for the open/miscellaneous items specified in Appendix IV hereto and Lessee and Lessor agree to the payments and commitments specified therein.
 
7.	Governing Law	
This Certificate of Acceptance shall in all respects be governed by, and construed in accordance with, the laws of the State of New York. Subject to Clause 17.6 of the Lease, the parties hereto agree that the courts of New York are to have jurisdiction to settle any disputes which may arise out of this Certificate of Acceptance.
 
8.	Technical Definition	
Lessee hereby confirms that the Aircraft complies with the requirements for delivery specified in Clause 2 of the Lease and Part A of Schedule 6 thereto.
 
9.	Basic Rent	
Lessee hereby confirms that it has become obliged to pay to Lessor Basic Rent in accordance with the provisions of the Lease.
 
- 75 -

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Certificate of Acceptance to be duly executed by their authorized officers on the date first above written.
MASL IRELAND (22) LIMITED

By:	 	 	
Name:	 	 	
Title:	 	Attorney In Fact	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name:	 	 	
Title:	 	 	
 
- 76 -

APPENDIX I
to Certificate of Acceptance
Airbus A320-200 MSN 2204
STATUS OF TIME CONTROLLED COMPONENTS, ENGINE MODULES AND LLPS.
 
 	1.	See attached [    ] pages for status of time controlled components and LLPs	
 
 	2.	Status of Engine Modules:	
 
 	(a)	Engine Serial Number V11674	

Module	  	Engine Hours since Performance Restoration	
Fan/Booster – LPC	  	[    ]	
HPC	  	[    ]	
Combustor	  	[    ]	
HPT	  	[    ]	
LPT	  	[    ]	
Gearbox	  	[    ]	
 
 	(b)	Engine Serial Number V11672	

Module	  	Engine Hours since Performance Restoration	
Fan/Booster – LPC	  	[    ]	
HPC	  	[    ]	
Combustor	  	[    ]	
HPT	  	[    ]	
LPT	  	[    ]	
Gearbox	  	[    ]	
Note that “Performance Restoration” is a defined term in the Lease.
 
- 77 -

APPENDIX II A
to Certificate of Acceptance
Airbus A320-200 MSN 2204
LESSOR FURNISHED EQUIPMENT
See attached      pages
 
- 78 -

APPENDIX II B
to Certificate of Acceptance
Aitbus A320-200 MSN 2204
LAYOUT OF PASSENGER ACCOMMODATIONS (LOPA)
See attached      pages
 
- 79 -

APPENDIX III
To Certificate of Acceptance
Airbus A320-200 MSN 2204
AIRCRAFT RECORDS
See attached      pages
 
- 80 -

APPENDIX IV
To Certificate of Acceptance
Airbus A320-200 MSN 2204
OPEN/MISCELLANEOUS ITEMS
See attached      pages.
 
- 81 -

Schedule 5
Insurances
 
1.	Required Cover	
Lessee is required to maintain the following Insurances with respect to the Aircraft:
 
 	1.1.1	Hull All Risks of Loss or Damage whilst flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Insured Value and with a deductible not exceeding ***** or such other amount agreed by Lessor and Lessee from time to time, and to include deductible insurances, if necessary, to achieve that limit.	
 
 	1.1.2	Hull War and Allied Perils , being such risks excluded from the Hull All Risks Policy including confiscation and requisition by the State of Registration (unless the State of Registration is the United States of America) and, if different, the state of the Habitual Base for the Insured Value.	
 
 	1.1.3	All Risks (Including War and Allied Risk) property insurance on all Engines and Parts when not installed on the Aircraft on an “agreed value” basis for the Engine Agreed Value (in the case of any Engine) and including engine test and running risks.	
 
 	1.1.4	Aircraft Third Party (Bodily Injury and Property Damage), Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability for a Combined Single Limit (Bodily Injury/Property Damage) of an amount not less than ***** any one occurrence (but in respect of products liability this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the Policy or a separate policy.	
 
2.	Special Requirements for Hull and Spares Cover	
The hull and spares insurance relating to the Aircraft referred to in paragraph 1 above will:
 
 	2.1.1	name Owner, Lessor and any Financier designated by Lessor as additional insured for its respective rights and interests;	
 
 	2.1.2	provide that any loss will be payable in Dollars and will:	
 
 	(a)	in respect of any claim that becomes payable on the basis of an Event of Loss or any claim that becomes payable while a Default or Event of Default has occurred and is continuing, provide that settlement shall be made to or to the order of Lessor or any Financier nominated by Lessor, as the case may be for the Insured Value;	
 
 	(b)	in respect of any other claim, provide that settlement (net of any policy deductible) shall be made with (i) such persons as may be necessary to repair the Aircraft or (ii) if the repairer has been paid in full following such repair, Lessee in reimbursement of the cost thereof or payment of any excess proceeds payable in connection therewith, in each case unless otherwise agreed after consultation between the Insurers, Lessee and Lessor;	
 
 	(c)	if separate Hull “all risk” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (being AVS. 103 in the current market language).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 82 -

3.	Special Requirements for Liability Cover	
The liability insurances referred to in paragraph 1 above will:
 
 	3.1.1	include each of the Additional Insureds as additional insureds for their respective rights and interests (excluding any claims arising solely out of any capacity that any other of the Additional Insureds may have as manufacturer of or performer of maintenance, repairs or other operational activities on the Aircraft, any Engine or any Part);	
 
 	3.1.2	operate in all respects as if a separate policy had been issued covering each party insured, but shall not include any claim under the hull and spares insurances referred to in paragraph 1 above, provided that the total liability of the Insurers shall not exceed the limits of liability stated in the relevant policy; and	
 
 	3.1.3	contain a provision confirming that the relevant policy is primary without right of contribution from any other insurance available to any Additional Insureds.	
 
4.	Requirements for all Insurances	
All Insurances will:
 
 	4.1.1	be in accordance with normal industry practice of persons operating aircraft similar to the Aircraft in similar circumstances;	
 
 	4.1.2	provide cover denominated in Dollars or in relation to liability insurance in the relevant currency of claim;	
 
 	4.1.3	operate on a world-wide basis subject to such limitations and exclusions as Lessor may agree (acting reasonably in light of aviation insurance industry practices as applied to airline carriers operating aircraft similar to the Aircraft on routes similar to those of Lessee);	
 
 	4.1.4	provide that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person which results in a breach of any term, condition or warranty of the policy, provided that the additional insured so protected has not caused, contributed to or knowingly condoned the said act or omission;	
 
 	4.1.5	provide that upon payment of any loss or claim to or on behalf of any additional insured:	
 
 	(a)	the Insurers shall to the extent and in respect of such payment be subrogated to all legal and equitable rights of that additional insured (other than its rights against any of the other additional insureds);	
 
 	(b)	the Insurers shall not exercise such rights without the consent of the relevant Indemnitee, such consent not to be unreasonably withheld; and	
 
 	(c)	at the expense of the Insurers the relevant additional insureds shall do all things reasonably necessary to assist the Insurers to exercise the rights referred to in this paragraph 4.1.6;	
 
 	4.1.6	provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due and that the Insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft which is the subject of the relevant claim; and	
 
 	4.1.7	provide that, except in respect of any provision for cancellation or automatic termination specified in the relevant policy or any endorsement thereof, cover provided by the Insurances may only be cancelled or materially altered in a	
 
- 83 -

 	manner adverse to the additional insureds by the giving of not less than thirty (30) days (or such lesser period as is customarily available in respect of war and allied risks) notice in writing to the Broker. Notice will be deemed to commence from the date on which that notice is given by the Insurers.	
 
5.	Reinsurance	
Where applicable, the Reinsurances will:
 
 	5.1.1	be on the same terms as the original Insurances and will include the provisions of this Schedule;	
 
 	5.1.2	provide that, notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings in any relevant jurisdiction affecting the reinsured, the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings in any relevant jurisdiction) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and	
 
 	5.1.3	contain a “cut-through” clause in substantially the following form (or otherwise, satisfactory to Lessor):	
 
 	5.1.4	“The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the reinsurances in respect of a total loss, such claim is to be paid to the person named as loss payee under the primary insurances. The Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as loss payee under the primary insurances effected by the Reinsured, that portion of any loss due for which the Reinsurers would otherwise be liable to pay the original Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith subject to such provisions not contravening any applicable law”.	
 
6.	Insurance Endorsement	
Lessee shall maintain Insurances in respect of the Aircraft for the purposes of this Lease which incorporate the terms and conditions of Airline Finance/Lease Contract Endorsement AVN67B or AVN67C (or such update of or replacement for Airline Finance/Lease Contract Endorsement AVN67B or AVN67C as may be introduced from time to time in the aviation insurance markets) (the “ Insurance Endorsement ”). In that event, to the extent that any provision of the Insurance Endorsement conflicts or is otherwise inconsistent with the requirements of this Lease relating to Insurances, then (so long as it is general practice to insure aircraft financed or leased on the basis of such endorsement) such conflicting or inconsistent provision of the Insurance Endorsement shall prevail and such endorsement shall be deemed to satisfy the requirements of this Lease. To the extent the same shall be relevant from time to time for the purposes of the Insurance Endorsement, the “Designated Contract Party” shall be Lessor or any Financier notified by Lessor to Lessee.
 
- 84 -

Schedule 6
Delivery Condition and Redelivery Condition
PART A
Delivery Condition
 
1.	Location	
On the Delivery Date, the Aircraft shall be delivered to, and, subject to the Aircraft being in the condition set out in this Part A, technically accepted by Lessee at the Delivery Location. On the Delivery Date the parties shall prepare and execute a Certificate of Acceptance in the form of Schedule 4 to the Lease.
 
2.	General	
 
2.1	Condition: The Aircraft shall be in good working order, condition and appearance, with all pilot discrepancies and deferred maintenance items cleared, clean by international commercial airline standards and ready for flight with all of the Aircraft equipment, components and systems operating within limits specified in the Maintenance Manual and functioning in accordance with their intended use.	
 
2.2	Regulatory Compliance: The Aircraft shall be (a) in full compliance with the rules and regulations of EASA and with applicable Type Certificate Data Sheets, (b) delivered with a currently valid Export Certificate of Airworthiness issued by the aeronautics authority of France; (c) in such condition as to be immediately eligible for issuance of a Standard Certificate of Airworthiness from the country of manufacture; (d) equipped for commercial passenger operations under FAR Part 129 and under current EU OPS 1; and (e) with the exception of the Post-Delivery Modifications, equipped for commercial passenger operations under FAR Part 129.	
 
2.3	Configuration: Lessor will deliver the Aircraft to Lessee with the equipment specified in Appendix II A to the Certificate of Acceptance and with the equipment and capabilities listed in the Appendix to this Part A of Schedule 6. The Aircraft shall be delivered in an all-economy passenger seat interior, consisting of 180 seats as detailed in Appendix II B to the Certificate of Acceptance.	
 
2.4	Documentation: Lessor shall ensure the delivery of the Aircraft Records in up-to-date status, as amended and supplemented through the Delivery Date.	
 
2.5	Lessee’s Inspection: Lessor shall arrange for the Aircraft to be made available to Lessee and/or Lessee’s designated representative(s) during and after completion of the Delivery Workscope (as defined in paragraph 3, below), for the purpose of conducting a detailed inspection in order to verify that the condition of the Aircraft complies with the requirements set forth herein (such inspection being hereinafter referred to as “Lessee’s Inspection”). Lessee’s Inspection shall be scheduled at the Delivery Location.	
 
2.6	Power Assurance Run and Acceptance Flight: Following completion of the Delivery Workscope and as part of Lessee’s Inspection, Lessor shall arrange for a maximum power assurance run of each Engine to be carried out in accordance with the Maintenance Manual followed by a functional acceptance flight of the Aircraft. In each case, Lessee or Lessee’s representatives shall be entitled to observe. The EGT of each Engine noted during the maximum power assurance run shall be recorded. The acceptance flight shall be based on a mutually agreed flight profile following the Manufacturer’s acceptance procedures for used aircraft and shall be for a duration not to exceed (2) two hours, provided that such time may be extended if necessary to complete the agreed procedures and profile. Flight crews (excluding Lessee’s) and fuel shall be furnished at the expense of Lessor. Lessor shall arrange for any deficiencies noted necessary for the delivery of the Aircraft in the condition required herein to be corrected and shall provide evidence satisfactory to Lessee of such correction. No components shall be changed following such flight except as required by the Maintenance Manual to correct deficiencies or as may be mutually agreed.	
 
- 85 -

2.7	Borescope Inspection: After the acceptance flight referred to above and immediately prior to the delivery of the Aircraft, Lessor shall allow and support Lessee in an inspection of each magnetic chip detector and in performing a full video borescope inspection of each Engine (including but not limited to the hot, cold and combustor sections) and the APU. Lessee’s and Lessor’s representatives shall be entitled to observe. Such inspections shall be carried out by an agency accepted by and paid for by Lessee. Lessor shall arrange for any deficiencies noted by Lessee or such agency necessary for the delivery of the Aircraft in the condition required herein and any other deficiency exceeding Manufacturer’s tolerances and guidelines to be corrected and shall provide evidence satisfactory to Lessee of such correction.	
 
3.	Delivery Workscope and Specific Delivery Conditions	
 
3.1	Delivery Workscope: Immediately prior to the delivery of the Aircraft to Lessee, at Lessor’s expense, the following work (the “ Delivery Workscope ”) will be accomplished:	
 
 	3.1.1	Inspections and checks which shall be at least equivalent in scope and content to a C Check and which shall encompass all systems, zonal and structural tasks listed in the MPD having MPD intervals equal to or less than the then current C Check Interval. In addition, each system, zonal and structural task listed in the MPD and having an interval greater than the then current C Check Interval shall have at least one C Check Interval remaining to next scheduled accomplishment. Lessor shall arrange for any deficiencies revealed during such checks and inspections to be corrected using Maintenance Manual limits.	
 
 	3.1.2	The exterior of the fuselage, vertical stabilizer and nacelles shall be sanded or stripped and freshly painted in Lessee’s livery (including all required stencils) in accordance with the Manufacturer’s then-applicable painting standards and procedures. Unless the same were sanded and freshly painted within a period equal to the then current C Check Interval, all other painted exterior surfaces will have been sanded and freshly repainted in accordance with such standards and procedures.	
 
 	3.1.3	The cabin interior shall be refurbished as follows: The passenger seats and seat cushions will be inspected in-situ cleaned, functionally checked, repaired or replaced, as necessary (in accordance with the Component Maintenance Manual and the Aircraft Maintenance Manual). All seat covers shall be cleaned and in good condition. Carpets shall be in good condition and in as-new appearance. Overhead bins, sidewall panels and ceiling panels will be free of defects (e.g., gouges, scratches, delamination or discoloration). The floor coverings in the galley area will be in good condition. The galleys and lavatories will be deep cleaned, inspected and repaired as necessary. The in-flight entertainment system will be inspected, operationally and functionally tested and repaired as necessary.	
 
 	3.1.4	The flight deck shall be refurbished as follows: The cockpit floor coverings will be replaced with new floor coverings, in good condition and as-new appearance. The cockpit seats will be inspected in-situ, cleaned, functionally checked, repaired or replaced, as necessary (in accordance with the Component Maintenance Manual and the Aircraft Maintenance Manual). The cockpit seat covers will be in good condition and as-new appearance.	
 
 	3.1.5	Each Airworthiness Directive issued by the country of manufacture and effective on or before the Delivery Date shall have at least one hundred and eighty (180) days remaining to the next required action. If the interval for any such AD is less	
 
- 86 -

 	than one hundred and eighty (180) days, the AD shall be freshly accomplished. If a kit required for accomplishment of any such AD is not yet available from the Manufacturer or supplier, it shall be supplied to Lessee without charge when it is received and Lessor will pay Lessee an agreed amount to accomplish the AD.	
 
 	3.1.6	The Engine intakes, cowls and thrust reversers shall be in good condition without debonding or delamination of material or corrosion and with all actuating systems in good operating condition. Any adverse findings will be corrected.	
 
 	3.1.7	Each brake shall have at least 50% time remaining to replacement or overhaul based upon brake wear pin measurement. Each tire shall be serviceable in accordance with the Aircraft Maintenance Manual.	
 
 	3.1.8	Such additional work as required to place the Aircraft in the condition set forth in this Schedule 6, Part A.	
 
3.2	Specific Conditions: On the Delivery Date, in addition to the requirements of Clause 3.1, the Aircraft shall meet or exceed the conditions stated below:	
 
 	3.2.1	Minimum conditions:	
 
 	(a)	Each Engine will be delivered with at least 2,000 Cycles remaining before the next anticipated removal for Performance Restoration or any repair, the foregoing to be based on the most current Engine disk sheets, the last ninety (90) (or, if available, one hundred and eighty (180)) days of engine trend monitoring, video borescope results, a maximum power assurance run and current takeoff EGT margin. If Lessor and Lessee do not agree upon the condition of an Engine, IAE will be used to analyse the foregoing data and determine the anticipated engine time remaining on wing.	
 
 	(b)	Each LLP in each Engine shall have at least 4,500 Cycles remaining until the next scheduled removal.	
 
 	(c)	Each time-controlled components (as listed in the MPD but excluding any LLP, the APU and the Landing Gear) installed on the Aircraft will have not less than 3,500 Flight Hours (with respect to any such component carrying a MPD designated time-control specified in Flight Hours), 1,500 Cycles (with respect to any such component carrying a MPD designated time-control specified Cycles) and 15 months (with respect to any such component carrying a MPD designated time-control specified calendar time) remaining to the next scheduled removal, bench check or overhaul (as applicable). Each time controlled component that has an MPD interval less than the previously stated minimums will have its full replacement interval remaining to its next scheduled removal, bench check or overhaul (as applicable).	
 
 	(d)	Each Landing Gear assembly shall have not less than 7,000 Cycles and 36 months remaining to the next overhaul. Each life limited part within the Landing Gear shall have not less than 7,000 Cycles remaining to replacement. The Landing Gear and each life limited part within the Landing Gear shall have accumulated no more calendar time and Cycles than the Airframe.	
 
 	3.2.2	Aircraft	
 
 	(a)	Lessor will have arranged for all impact damage to the Aircraft (regardless of cause) which exceeds the relevant Maintenance Manual limits to be permanently repaired in accordance with the Manufacturer’s	
 
- 87 -

 	Structural Repair Manual. There shall be no temporary repairs, time-limited repairs, or repairs requiring repetitive inspections (unless such inspection is part of the normal repair assessment program and is required no more frequently than each Six Year Check or Twelve Year Check). Structural repairs not described in the Manufacturer’s Structural Repair Manual will have been completed in accordance with the Manufacturer’s approved repair scheme and the approved repair scheme of either EASA or the FAA. Any external doubler repairs (“scab” patches) on the Aircraft shall be recorded in the Certificate of Acceptance. The records of all repairs carried out on the Aircraft shall be specified in a single document certified by an FAA Part 145 or EASA Part 145 repair agency.	
 
 	(b)	There will be no “on watch” conditions, special callouts, special repetitive inspections, waivers or exemptions in effect on the Aircraft.	
 
 	(c)	The Aircraft shall have been inspected for corrosion in accordance with the Manufacturer’s recommendations or the MRB Document then in effect; all mild and moderate corrosion found shall be cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s Structural Repair Manual.	
 
 	(d)	The installed APU shall be serviceable with all air and temperature outputs in the normal range.	
 
 	(e)	The Aircraft will be free of fuel, oil, hydraulic and pneumatic leaks. Any temporary repairs of leaks will have been replaced by permanent repairs.	
 
 	(f)	All signs, placards and decals shall be clean, secure and legible.	
 
 	(g)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in Lessee’s fleet or structural sampling of other aircraft.	
 
 	3.2.3	Engines	
 
 	(a)	If engine trend monitoring over the previous ninety (90) days of operation shows an accelerated rate in performance deterioration of any Engine, which is higher than normal based on the maintenance experience of the Engine Manufacturer or the experience of Lessor with the same type of engines, under similar conditions, Lessor shall, prior to delivery, cause to be corrected such conditions which are determined to have exceeded tolerances defined for such engines in the Maintenance Manual or are otherwise determined to be causing such performance deterioration.	
 
 	(b)	Each Engine shall be to the IAE V2527-A5 standard with 27,000 pounds thrust and in the then current modification standard. There will be no “on watch” conditions, special callouts, special repetitive inspections, waivers or exemptions on either Engine.	
 
 	3.2.4	Fuselage, windows and doors	
 
 	(a)	With the exception of those items noted in the Certificate of Acceptance at delivery of the Aircraft, the fuselage will be free of minor, abrasions and external doubler repairs;	
 
 	(b)	There shall be no loose, pulled or missing rivets;	
 
- 88 -

 	(c)	With the exception of those items noted in the Certificate of Acceptance at delivery of the Aircraft, the windows will be free from delamination, blemishes, crazing and will be properly sealed;	
 
 	(d)	The doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
 	3.2.5	Wings	
 
 	(a)	The leading edges will be free from damage, numerous dings and dents (e.g. no significant hail or other foreign object damage);	
 
 	(b)	The wings will be free of fuel leaks as demonstrated by the Manufacturer’s relevant testing guidelines.	
 
 	3.2.6	Horizontal and vertical stabilizers	
 
 	(a)	The leading edges will be free from damage, numerous dings and dents (e.g. no significant hail or other foreign object damage).	
 
 	3.2.7	Galleys, lavatories and passenger cabin interior	
 
 	(a)	The galleys, lavatories and passenger cabin interior shall be clean by international airline standards and in a condition consistent with an Aircraft fresh from C Check.	
 
 	3.2.8	Cockpit	
 
 	(a)	The flight deck shall be clean. Fairing panels will be free of stains and cracks. All systems shall function properly. All placards and decals shall be clean, secure and legible.	
 
 	3.2.9	Cargo compartments	
 
 	(a)	With the exception of those items noted in the Certificate of Acceptance at delivery of the Aircraft, all cargo compartment floor, sidewall and ceiling panels will be in good condition, free of holes, cracks, temporary repairs and significant dents in accordance with applicable Structural Repair Manual (SRM) limits of the Airframe Manufacturer;	
 
 	(b)	The cargo nets will be in good condition with no tears or frayed areas.	
 
 	3.2.10	Landing Gear	
 
 	(a)	The Landing Gear and wheel wells will be clean, free of leaks, stains and repaired as necessary.	
 
4.	Service Bulletins	
All vendor and manufacturer’s no-charge SB kits ordered and received by Lessor for the Aircraft but not installed therein shall be delivered with the Aircraft as part of the Aircraft at time of delivery, and shall be loaded on board the Aircraft as cargo. Lessee shall have the option to purchase at Lessor’s cost any vendor and manufacturer’s SB kits for which there has been material ordered and received by Lessor for the Aircraft but not installed therein.
 
5.	Fuel	
Upon delivery of the Aircraft, the amount of fuel in the fuel tank shall be recorded. Each oil tank shall be full.
 
- 89 -

APPENDIX
to Part A of Schedule 6
 
1.	The Aircraft shall be capable:	
 
 	(a)	of operating to and from airports at altitudes of up to nine thousand two hundred (9,200) feet;	
 
 	(b)	of operating to and from airports at OAT equal to ISA+40°C;	
 
 	(c)	of performing autoland at airport altitudes of up to nine thousand two hundred (9,200) feet;	
 
 	(d)	for RVSM operations;	
 
 	(e)	of CAT II/ CAT III Operations; and	
 
 	(f)	of operating to and from runways narrower than forty-five (45) meters.	
 
2.	The Aircraft shall possess both fuel and weight quantity indicators indicating kilograms.	
 
3.	The Aircraft shall incorporate the following:	
 
 	(a)	Noise Level Stage 3;	
 
 	(b)	a GPS Navigation System capable for RNP Operations;	
 
 	(c)	a SELCAL decoder;	
 
 	(d)	an approved cockpit voice recorder that meets the standards of TSO–C123a, or later revision. Such cockpit voice recorder must record the information that would be required to be recorded if the aircraft were operated under FAR Part 121 (as required by FAR Part 129);	
 
 	(e)	a fixed 406 Mhz ELT and a portable 406 Mhz ELT; and	
 
 	(f)	VHF 8.33 KHz Spacing.	
 
4.	The Aircraft shall possess a reinforced cockpit door.	
 
5.	The Aircraft shall be equipped with both interior and exterior placards in the English language.	
 
6.	The Aircraft shall be equipped with at least 50% of the aisle seats having movable aisle armrests.	
 
- 90 -

PART B
Redelivery Condition
 
1.	Location	
On the expiration or earlier termination of the leasing of the Aircraft hereunder, the Aircraft shall be redelivered to, and, subject to the Aircraft being in the condition set out in this Part B, technically accepted by Lessor at, the Redelivery Location. At the time of redelivery, the parties shall prepare and execute a Redelivery Certificate in the form of Schedule 13 to the Lease.
 
2.	General	
 
2.1	Condition: The Aircraft shall be in good working order, condition and appearance, with all pilot discrepancies and deferred maintenance items cleared, clean by international commercial airline standards and ready for flight with all of the Aircraft equipment, components and systems operating within limits specified in the Maintenance Manual and functioning in accordance with their intended use.	
 
2.2	Regulatory Compliance: The Aircraft shall be (i) in full compliance with the rules and regulations of the Aeronautics Authority and with applicable Type Certificate Data Sheets, (ii) redelivered with an Export Certificate of Airworthiness issued by the Aeronautics Authority which is valid at the date of return and for at least sixty (60) days thereafter; (iii) in such condition as to be immediately eligible for issuance of a Standard Certificate of Airworthiness from the country of manufacture; and (iv) equipped for commercial passenger operations under FAR Part 129 and, to the extent the Aircraft was so equipped at delivery, EU OPS 1.	
 
2.3	Configuration: Lessee will return the Aircraft to Lessor with the same equipment (including the loose equipment) as at the commencement of the Term, subject only to those replacements, additions and modifications which may have been made and properly documented pursuant to the Lease or as otherwise specifically approved in writing by Lessor. Lessee shall, at least ninety (90) days prior to return of the Aircraft, furnish Lessor with a listing of all such replacements, additions or modifications made during the Term and shall deliver to Lessor a detailed technical report regarding the Flight Hours and Cycles on the Aircraft and the components and the maintenance status of each. The interior configuration shall be an all economy class 174 seat configuration or, if requested in writing by Lessor, a standard high density all economy class 180 seat configuration provided that such request shall be made on the earlier of (i) that date which is five (5) Business Days following execution by Lessor of a lease with a new operator which requires a 180 seat configuration and (ii) that date which is three (3) months prior to the end of the Term.	
 
2.4	Documentation	
 
 	2.4.1	Nine (9) calendar months prior to the end of the Term, Lessee shall confirm to Lessor in writing the manufacturer’s serial number and location of each Engine.	
 
 	2.4.2	Not less than one hundred and eighty (180) days (nor more than three hundred and sixty (360) days) prior to the end of the Term, Lessee shall specify to Lessor in writing those provisions in the Maintenance Program which have changed from that version of the Maintenance Program delivered to Lessor at or about the Delivery Date and which may have an impact on the return conditions. Immediately thereafter Lessor and Lessee shall negotiate in good faith with a view towards reaching agreement on which changes to the Maintenance Program are adverse to Lessor and the adjustments to the return conditions necessitated thereby.	
 
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 	2.4.3	At least thirty (30) days prior to the end of the Term, Lessee shall provide Lessor access to, in up-to-date status and in English, at least one complete set of the Aircraft Records.	
 
 	2.4.4	Lessee shall ensure the return of the Aircraft Records in accordance with Schedule 8 as amended and supplemented through the date of return. Records shall be in an up-to-date status and shall include a certified true, current and complete copy of the Maintenance Program, which Lessor hereby agrees shall be subject to the confidentiality provisions of Clause 17.16.	
 
2.5	Lessor’s Inspection	
 
 	2.5.1	Lessor may, from time to time during the one hundred and eighty (180) days prior to the return of the Aircraft, make the Aircraft and its records available for inspection to the designated representatives or technical teams evaluating the Aircraft for use after the end of the Term. Lessor agrees to give Lessee not less than five (5) days’ advance notice of such inspection and Lessee agrees to co-operate fully with Lessor’s requests in making the Aircraft and records available to such authorized technical teams. Lessor agrees that such requests will be reasonable and will be co-ordinated with Lessee so as to cause minimal disturbance to Lessee’s operation or its personnel.	
 
 	2.5.2	Lessee shall make the Aircraft available to Lessor and Lessor’s representatives during and after completion of the Redelivery Workscope (as defined in paragraph 3, below), for the purpose of conducting a detailed inspection in order to verify that the condition of the Aircraft complies with the requirements set forth herein (such inspection being hereinafter referred to as the “Lessor’s Inspection”). Lessor’s Inspection shall be scheduled at the Redelivery Location.	
 
2.6	Engine Runs and Acceptance Flight: Following completion of the Redelivery Workscope and as part of Lessor’s Inspection, Lessee shall carry out a maximum power assurance run of each Engine in accordance with the Maintenance Manual followed by a functional acceptance flight of the Aircraft. In each case, Lessor’s representatives and the next operator’s designated representatives shall be entitled to observe. The EGT of each Engine noted during the maximum power assurance run shall be recorded. The acceptance flight shall be based on a mutually agreed flight profile following the Manufacturer’s acceptance procedures for used aircraft and shall be for a duration not to exceed (2) two hours, provided that such time may be extended if necessary to complete the agreed procedures and profile. Flight crews (excluding Lessor’s) and fuel shall be furnished by and at the expense of Lessee. Lessee shall correct any deficiencies noted necessary for the redelivery of the Aircraft in the condition required herein and shall provide evidence satisfactory to Lessor of such correction. No components shall be changed following such flight except as required by the Maintenance Manual to correct deficiencies or as may be mutually agreed.	
 
2.7	Borescope Inspection: After the acceptance flight referred to above and immediately prior to the redelivery of the Aircraft, Lessee will allow and support Lessor in an inspection of each magnetic chip detector and in performing a full video borescope inspection of each Engine (including, but not limited to, the hot, cold and combustor sections) and the APU. Such inspections shall be carried out by an agency accepted by and paid for by Lessor. Lessee’s and Lessor’s representatives shall be entitled to observe. Lessee shall correct any deficiencies noted by Lessor or such agency necessary for the return of the Aircraft in the condition required herein and any other deficiency exceeding Manufacturer’s tolerances and guidelines and shall provide evidence satisfactory to Lessor of such correction.	
 
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3.	Redelivery Workscope and Specific Redelivery Conditions	
 
3.1	Redelivery Workscope: Immediately prior to the return of the Aircraft to Lessor, at Lessee’s expense, the following work (the “ Redelivery Workscope ”) will be accomplished:	
 
 	3.1.1	Inspections and checks in accordance with the Maintenance Program which shall be at least equivalent in scope and content to a C Check and which shall encompass all systems, zonal and structural tasks listed in the MPD having MPD intervals equal to or less than the then current C Check Interval. In addition, each system, zonal and structural task listed in the MPD and having an interval greater than the then current C Check Interval shall have at least one C Check Interval remaining to next scheduled accomplishment. Lessee shall arrange for any deficiencies revealed during such checks and inspections to be corrected using Maintenance Manual limits. Lessee agrees to perform or cause to be performed, during such check, providing such work does not cause the planned grounding of the Aircraft or the redelivery date to be extended, any other work reasonably required by Lessor to enable the Aircraft to be placed on another maintenance schedule and Lessor shall pay the cost of such other work required by Lessor at Lessee’s best rate to third parties or the actual rate available to Lessee, as applicable.	
 
 	3.1.2	The exterior of the fuselage, vertical stabilizer and nacelles shall be sanded or stripped and freshly painted white in accordance with the Manufacturer’s then-applicable painting standards and procedures. Unless the same were sanded and freshly painted within a period equal to the then current C Check Interval, all other painted exterior surfaces will have been sanded and freshly repainted in accordance with such standards and procedures. If Lessor supplies Lessee with livery drawings and all necessary details (including stencils) not later than forty five (45) days prior to the Expiry Date, Lessee shall apply such livery provided that if it is more costly to apply than Lessee’s livery, Lessor shall reimburse Lessee such additional cost.	
 
 	3.1.3	The cabin interior shall be refurbished as follows: The passenger seats and seat cushions will be inspected in-situ, cleaned, functionally checked, repaired or replaced, as necessary (in accordance with the Component Maintenance Manual and the Aircraft Maintenance Manual). All seat covers shall be cleaned and in good condition. Carpets shall be in good condition and in as-new appearance. Overhead bins, sidewall panels and ceiling panels will be free of defects (e.g., gouges, scratches, delamination or discoloration). The floor coverings in the galley area will be in good condition. The galleys and lavatories will be deep cleaned, inspected and repaired as necessary. The in-flight entertainment system will be inspected, operationally and functionally tested and repaired as necessary.	
 
 	3.1.4	The flight deck shall be refurbished as follows: The cockpit floor coverings will be replaced with new floor coverings, in good condition and as-new appearance. The cockpit seats will be inspected in-situ, cleaned, functionally checked, repaired or replaced, as necessary (in accordance with the Component Maintenance Manual and the Aircraft Maintenance Manual). The seat covers will be in good condition and in as-new appearance.	
 
 	3.1.5	Each Airworthiness Directive issued by the country of manufacture and effective on or before the date of return of the Aircraft shall have at least one hundred and eighty (180) days remaining to the next required action. If the interval for any such AD is less than one hundred and eighty (180) days, the AD shall be freshly accomplished. If a kit required for accomplishment of any such AD is not yet available from the Manufacturer or supplier, it shall be supplied to Lessor without charge when it is received and Lessee will pay Lessor an agreed amount to accomplish the AD.	
 
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 	3.1.6	The Engine intakes, cowls and thrust reversers shall be in good condition without debonding or delamination of material or corrosion and with all actuating systems in good operating condition. Any adverse findings will be corrected.	
 
 	3.1.7	Each brake shall have at least 50% time remaining to replacement or overhaul based upon brake wear pin measurement. Each tire shall be serviceable in accordance with the Aircraft Maintenance Manual.	
 
 	3.1.8	Such additional work as required to place the Aircraft in the condition set forth in this Schedule 6, Part B.	
 
3.2	Specific Conditions: Upon redelivery of the Aircraft to Lessor, the Aircraft shall meet or exceed the conditions stated below:	
 
 	3.2.1	Minimums:	
 
 	(a)	Each Engine shall have at least 2,000 Cycles remaining before the next anticipated removal for Performance Restoration or any repair, the foregoing to be based on the most current disk sheets, the last ninety (90) (or, if available, one hundred and eighty (180)) days of engine trend monitoring, video borescope results, a maximum power assurance run and current take off EGT margin. If Lessor and Lessee do not agree upon the condition of an Engine, IAE will be used to analyse the foregoing data and determine the anticipated engine time remaining on wing.	
 
 	(b)	Each LLP in each Engine shall have at least 4,500 Cycles remaining until the next scheduled removal.	
 
 	(c)	Each time-controlled components (as listed in the MPD but excluding any LLP, the APU and the Landing Gear) installed on the Aircraft will have not less than 3,500 Flight Hours (with respect to any such component carrying a MPD designated time-control specified in Flight Hours), 1,500 Cycles (with respect to any such component carrying a MPD designated time-control specified Cycles) and ***** (with respect to any such component carrying a MPD designated time-control specified calendar time) remaining to the next scheduled removal, bench check or overhaul (as applicable). Each time controlled component that has an MPD interval less than the previously stated minimums will have its full replacement interval remaining to its next scheduled removal, bench check or overhaul (as applicable).	
 
 	(d)	Each Landing Gear assembly shall have not less than 7,000 Cycles and ***** remaining to the next overhaul. Each life limited part within the Landing Gear shall have not less than 7,000 Cycles remaining to replacement. The Landing Gear and each life limited part within the Landing Gear shall have accumulated no more calendar time and Cycles than the Airframe.	
 
 	(e)	Each Part shall be of the same or improved modification standard and same or later vintage as the Part installed at the Delivery Date.	
 
 	3.2.2	Aircraft	
 
 	(a)	Lessee will have arranged for all impact damage to the Aircraft (regardless of cause) which exceeds the relevant Maintenance Manual limits to be permanently repaired in accordance with the Manufacturer’s Structural Repair Manual. There shall be no temporary repairs, time-limited repairs, or repairs requiring repetitive inspections (unless such	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	inspection is part of the normal repair assessment program and is required no more frequently than each Six Year Check or Twelve Year Check). Structural repairs not described in the Manufacturer’s Structural Repair Manual will have been completed in accordance with the Manufacturer’s approved repair scheme and the approved repair scheme of EASA or the FAA. There will be no external doubler repairs (“scab” patches) on the Aircraft other than those existing on the Delivery Date and noted in the Certificate of Acceptance unless the Manufacturer specifically recommends such repair exclusive of other options. The records of all repairs carried out on the Aircraft shall be specified in a single document certified by the Authorized Maintenance Performer.	
 
 	(b)	There will be no “on watch” conditions, special callouts, special repetitive inspections, waivers or exemptions in effect on the Aircraft.	
 
 	(c)	The Aircraft shall have been inspected for corrosion in accordance with the Manufacturer’s recommendations or the MRB Document then in effect. All mild and moderate corrosion found shall be cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s Structural Repair Manual.	
 
 	(d)	The installed APU shall be serviceable with all air and temperature outputs in the normal range.	
 
 	(e)	The Aircraft will be free of fuel, oil, hydraulic and pneumatic leaks. Any temporary repairs of leaks will have been replaced by permanent repairs.	
 
 	(f)	All signs, placards and decals shall be clean, secure and legible.	
 
 	(g)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in Lessee’s fleet or structural sampling of other aircraft.	
 
 	(h)	The APU shall be the same serial number APU as described on the Certificate Acceptance provided that, if the amount of APU Hours calculated as “A” pursuant to paragraph 7.3 below exceeds the amount of APU Hours calculated as “C” pursuant to paragraph 7.3 below by an amount greater than 50%, Lessee may return the Aircraft with a replacement auxiliary power unit (which shall become an “APU” hereunder) provided all the following conditions are fulfilled to the reasonable satisfaction of the Lessor:	
 
 	(i)	such replacement auxiliary power unit shall be free and clear of all Liens;	
 
 	(ii)	such replacement auxiliary power unit shall be of the same or an improved model, shall have a value and utility at least equal to, shall not be older than the Airframe, and be in as good operating condition as, the APU that it is replacing, assuming such APU was of the value and utility and in the condition and repair required by the terms of this Lease; and	
 
 	(iii)	Lessee shall take such action and execute such documents, including a warranty bill of sale, as Lessor may reasonably request in order that title to any such replacement auxiliary power unit shall be duly and properly vested in Owner.	
 
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 	3.2.3	Engines	
 
 	(a)	If engine trend monitoring over the previous ninety (90) days of operation shows an accelerated rate in performance deterioration of any Engine, which is higher than normal based on the maintenance experience of the Engine Manufacturer or the experience of Lessee in operating the same type of engines, under similar conditions, Lessee shall, prior to return, cause to be corrected such conditions which are determined to have exceeded tolerances defined for such engines in the Maintenance Manual or are otherwise determined to be causing such performance deterioration.	
 
 	(b)	Each Engine shall be to the IAE V2527E-A5 standard with 27,000 pounds thrust rating (provided that Lessor shall have provided the Service Bulletins necessary to change the variant of each engine from V2527-A5 to V2527E-A5) and in the then current modification standard. There will be no “on watch” conditions, special callouts, special repetitive inspections, waivers or exemptions on either Engine.	
 
 	3.2.4	Fuselage, windows and doors	
 
 	(a)	With the exception of those items noted in the Certificate of Acceptance, the fuselage will be free of dents, abrasions and external doubler repairs;	
 
 	(b)	There shall be no loose, pulled or missing rivets;	
 
 	(c)	With the exception of those items noted in the Certificate of Acceptance, the windows will be free from delamination, blemishes, crazing and will be properly sealed;	
 
 	(d)	The doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
 	3.2.5	Wings	
 
 	(a)	The leading edges will be free from damage, numerous dings and dents (e.g. no significant hail or other foreign object damage).	
 
 	(b)	The wings will be free of fuel leaks as demonstrated by the Manufacturer’s relevant testing guidelines.	
 
 	3.2.6	Horizontal and vertical stabilizers	
The leading edges will be free from damage, numerous dings and dents (e.g. no significant hail or other foreign object damage).
 
 	3.2.7	Galleys, lavatories and passenger cabin interior	
The galleys, lavatories and passenger cabin interior shall be clean by international airline standards and in a condition consistent with an Aircraft fresh from C Check.
 
 	3.2.8	Cockpit	
The flight deck shall be clean. Fairing panels shall be free of stains and cracks. All systems shall function properly. All placards and decals shall be clean, secure and legible.
 
 	3.2.9	Cargo compartments	
 
 	(a)	With the exception of those items noted in the Certificate of Acceptance at delivery of the Aircraft, all cargo compartment floor, sidewall and ceiling panels will be in good condition, free of holes, cracks, temporary repairs and significant dents in accordance with applicable Structural Repair Manual (SRM) limits of the Airframe Manufacturer.	
 
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 	(b)	The cargo nets will be in good condition with no tears or frayed areas.	
 
 	3.2.10	Landing Gear	
  The Landing Gear and wheel wells will be clean, free of leaks, stains and repaired as necessary.
 
4.	Return of Essence	
Return of the Aircraft in the condition set out in this Part B at the Redelivery Location is of the essence of the Lease and if the Aircraft is not returned as provided herein, Lessor may obtain a court order requiring Lessee to return the Aircraft in accordance with the provisions hereof. In addition, and without waiving or limiting Lessor’s right to obtain such court order, if Lessee does not return the Aircraft to Lessor for any cause on the date of the expiration or termination of the Term, or does not return the Aircraft to Lessor in the condition set out in this Part B, then the obligations of Lessee under this Lease shall continue and such continued use shall not be considered a renewal of the terms of this Lease or a waiver of any right of Lessor hereunder and Lessor may terminate Lessee’s right to possess the Aircraft immediately on written notice to Lessee; and Lessee shall fully indemnify Lessor on demand against all losses, liabilities, actions, proceedings, costs and expenses thereby suffered or incurred by Lessor. During such continued use, Basic Rent shall continue to be paid by Lessee to Lessor on demand made by Lessor from time to time as follows: (a) during the period from and including the expiration of the Term to and including the day that is fifteen (15) days after the expiration of the Term, an amount equal to ***** for each day of such continued use, (b) during the period from and including the day that is sixteen (16) days after the expiration of the Term to and including the day that is thirty (30) days after the expiration of the Term, an amount equal to ***** for each day of such continued use, and (c) thereafter an amount equal to ***** for each day of such continued use, and all other terms and conditions of the Lease shall remain in full force and effect, provided that the payment by Lessee of such amounts will not constitute a renewal of the terms of the Lease or of the Term or a waiver of any of Lessor’s rights under the Lease and will not give Lessee any rights whatsoever in respect of the Aircraft or any part thereof other than as may be required to enable Lessee to comply with its obligations under Clause 14.
 
5.	Service Bulletins	
All vendor and manufacturer’s no-charge SB kits ordered and received by Lessee for the Aircraft but not installed therein shall be returned with the Aircraft and shall be loaded by Lessee on board the Aircraft as cargo. Lessor shall have the option to purchase from Lessee, at the price paid by Lessee plus a reasonable mark-up to be agreed, any vendor and manufacturer’s SB kits for which there has been material ordered and received by Lessee for the Aircraft but not installed therein.
 
6.	Fuel	
Upon return of the Aircraft, the fuel tank shall contain the same amount of fuel as was present on Delivery and paid for by Lessor and each oil tank shall be full.
 
7.	End of Term Adjustment Payments – Time Controlled Components and APU	
At the end of the Term, Lessee shall pay to Lessor, or Lessor shall pay to Lessee, as the case may be, an amount determined in accordance with paragraph 6 of Schedule 15, which payment shall reflect the difference in the maintenance condition of the Time Controlled Components and APU as of the Determination Date (as defined in Schedule 15) as compared with their maintenance condition as of the Delivery Date.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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Schedule 7
Form of Security Letter of Credit
[to be typed on the relevant LC Bank’s headed notepaper]
IRREVOCABLE STANDBY CREDIT NO: [insert number]

Issued by:	  	[insert name of LC Bank]	
		
Beneficiary:	  	MASL IRELAND (22) LIMITED	
		
Applicant’s Name:	  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
Ladies and Gentlemen:
 
1.	In accordance with instructions received from Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V., we, [insert name of LC Bank], hereby issue in favour of MASL Ireland (22) Limited (the “Beneficiary”) this Irrevocable Standby Letter of Credit No. [insert number] (this “ Letter of Credit ”) for [insert figure in words] US DOLLARS (US$[insert figure in numbers]) (the “ Stated Amount ”) which is available to the Beneficiary against one or more sight drafts (each a “ Draft ”) drawn on [insert name of Bank] and presented at [insert address of branch that draw documents are to be presented at] accompanied by a written certificate in the form of Appendix A attached hereto (each a “ Draw Certificate ”) signed by a person purporting to be an authorised signatory of Macquarie Aircraft Leasing Services (Ireland) Limited (the “ Servicer ”), as servicer of the Beneficiary, together with an incumbency certificate in the form of Appendix B attached hereto (each an “ Incumbency Certificate ”). Together the Drafts, Draw Certificates and Incumbency Certificates may be referred to as the “Draw Documents”. Drafts drawn hereunder must be marked “Drawn under [insert bank name]—Letter of Credit No. [insert number]”.	
 
2.	We undertake that Drafts and Draw Certificates drawn under and in strict conformity with the terms of this Letter of Credit will be honoured upon presentation. If a drawing made by the Beneficiary hereunder does not, in any respect, conform to the terms and conditions of this Letter of Credit, we shall give the Beneficiary prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor, and that we are holding any documents presented in connection therewith at the Beneficiary’s disposal or are returning the same to the Beneficiary, as we may elect.	
 
3.	Drawing in respect of payments hereunder honoured by us shall not, in the aggregate, exceed the Stated Amount, as from time to time in effect. For the avoidance of doubt, it is hereby declared that multiple drawings are permitted under this Letter of Credit. Each drawing honoured by us hereunder shall pro tanto reduce the Stated Amount.	
 
4.	Subject to paragraphs 5 and 6 below, the expiration of this Letter of Credit is [insert date].	
 
5.	It is a condition of this Letter of Credit that the expiration date will be automatically extended without amendment or other action for an additional year from the expiration date set forth in paragraph 4 above and for an additional year from each subsequent anniversary of the expiration date thereafter unless at least thirty (30) days prior to the then existing expiration date the Beneficiary shall have received a written notice from us that we elect not to renew this Letter of Credit for any such additional year. In the event the Beneficiary shall have received such notice, we will (on the terms and conditions set out in	
 
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 	this Letter of Credit (other than the requirement for a statement concerning default) honour any Draft and Draw Certificate signed by an authorised signatory of Servicer which Draw Certificate incorporates a statement that “the Beneficiary has received written notice that [insert issuing bank’s name] has elected not to renew Letter of Credit No. [insert number] and the Beneficiary has not received an acceptable replacement Letter of Credit”.	
 
6.	In any event this Letter of Credit shall have no force and effect at any time after [insert the date which is thirty (30) days after the Expiry/Termination Date—as defined in the Lease Agreement].	
 
7.	The Beneficiary may assign this Letter of Credit to any person to whom it assigns its rights under the Aircraft Lease Agreement dated as of [ ] between the Beneficiary as lessor and Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V. as lessee (the “ Lease ”) in accordance with Clause 17.5 of the Lease, but not otherwise.	
 
8.	Except as expressly provided herein, this Letter of Credit is subject to the Uniform Customs and Practices for Documentary Credits (2007 revision), International Chamber of Commerce, Publication No. 600) (the “Uniform Customs”). This Letter of Credit shall be deemed to be made under the laws of the State of New York and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York.	
Yours faithfully

Signed (Signature No. [    ])	 	Co-signed (Signature No. [    ])	
each for and on behalf of
[insert name of LC Bank]
 
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Appendix A to Letter of Credit no: [insert number]
[to be typed on the Servicer’s Letterhead]
DRAW CERTIFICATE FOR [INSERT LC BANK’S NAME]’S
LETTER OF CREDIT NO. [INSERT NUMBER]
The undersigned, a duly authorised signatory of Macquarie Aircraft Leasing Services (Ireland) Limited (the “ Servicer ”), as servicer for and on behalf of MASL Ireland (22) Limited (the “ Beneficiary ”), hereby certifies to [insert the name of the LC Bank] (the “ Bank ”) with reference to Irrevocable Standby Letter of Credit No. [insert number] issued by the Bank in favour of the Beneficiary (the “ Letter of Credit ”) (any capitalised term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) that:
 
1.	Demand is hereby made under the Letter of Credit for payment of the amount equal to US$[insert the relevant amount].	
 
[2.	An “Event of Default” (as defined in that certain Aircraft Lease Agreement dated as of April 7, 2011 between the Beneficiary as lessor and Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V. as lessee) has occurred and is continuing.]	
 
[2.	The Beneficiary has received written notice that [insert issuing bank’s name (or **insert confirming bank’s name)] has elected not to renew [**the confirmation of**] Letter of Credit No. [insert number] and the Beneficiary has not received an acceptable replacement [**confirmation of the**] Letter of Credit.]	
In Witness Whereof the Beneficiary has executed and delivered this Certificate as of the [    ] day of [    ], 20[    ]
Macquarie Aircraft Leasing Services (Ireland) Limited,
As Servicer of MASL Ireland (22) Limited,

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
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Appendix B to Letter of Credit no: [insert number]
[to be typed on the Servicer’s Letterhead]
INCUMBENCY CERTIFICATE
I, [insert name], Director of Macquarie Aircraft Leasing Services (Ireland) Limited (the “ Servicer ”), do hereby certify that each person whose name and signature appears below is authorised by the Servicer to sign drafts, statements and other memoranda pursuant to or in connection with that Standby Letter of Credit No. [insert number] dated [insert date] issued by [insert name of LC Bank]).

	  	  Name                                                                      Signature	
		
	  	  [insert name]	
		
	  	  [insert name]	
		
By:	  		
		
Name:	  		
		
Title:	  	  Director	
	  	  duly authorised for and on behalf of	
	  	  Macquarie Aircraft Leasing Services (Ireland) Limited	
 
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Schedule 8
Aircraft Records Standard
 
1.	Language	
Records shall be maintained in the English language.
 
2.	Minimum Standard	
At a minimum, Lessee shall maintain Aircraft Records in accordance with the requirements of the Aeronautics Authority in addition to the requirements contained in this Lease.
 
3.	Delivered Aircraft Records	
Lessee shall maintain all Aircraft Records delivered with the Aircraft without interruption. The Aircraft Records shall be located at all times at Lessee’s principal maintenance base at Toluca or such other location reasonably acceptable to Lessor. Lessee shall be responsible for return of all documents delivered with the Aircraft at termination of the Lease.
 
4.	Manufacturer and Vendor Manuals	
During the Term, Lessee shall maintain at its own cost revision service for all required Manufacturer and Supplier manuals which shall at all times contain the latest issued revisions and reflect current configuration and status of Aircraft, Airframe, Engines and Parts.
 
5.	Automated Aircraft Records	
Automated Aircraft Records produced by electronic data processing, or other means of automation, are acceptable under one of the two following conditions:
 
 	5.1.1	As summary documents accompanied by original, or manual, Aircraft Records.	
 
 	5.1.2	In automated format containing all pertinent data contained in original, or manual, Aircraft Records. In such case, each page of automated Aircraft Records shall be signed, initialled, or stamped in a manner to verify and authenticate its origin and content.	
Upon return, each page of all acceptable automated Aircraft Records shall be verified and authenticated with a signature or stamp representing Lessee Quality Assurance organization or other agreed to agent of Lessee, and dated. A letter identifying Lessee’s signatory agent shall accompany the Aircraft Records. Lessee shall provide upon Aircraft return a complete and current copy of Lessee’s automated Aircraft Records system procedures and security control approved by the Aeronautic Authority.
 
6.	Routine Maintenance	
All unsuperseded scheduled and routine maintenance checks and inspections accomplished during the Term shall be fully documented and identified to originating requirement in accordance with applicable regulations of the aviation authority. Aircraft Records resulting from such inspections shall be maintained until returned with the Aircraft.
 
7.	Non-Routine Tasks	
Non-routine tasks accomplished in conjunction with, or resulting from, routine maintenance tasks shall be fully documented as to engineering disposition and corrective action in accordance with applicable regulations of the aviation authority. Such documentation shall be maintained with the Aircraft Records until superseded. In the case of repairs and alterations, data shall be maintained until returned with the Aircraft.
 
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8.	Repairs	
Lessee shall construct and maintain a detailed and accurate summary list, complete with dates, references to pertinent documentation, affected assembly or part numbers and method of acceptance, of all repairs performed upon the Aircraft during the Term. All technical and engineering data, calculations, drawings covering these repairs shall become a permanent part of the Aircraft Records and shall be delivered to Lessor at redelivery of the Aircraft.
 
9.	Alterations and Modifications	
Lessee shall construct and maintain a detailed and accurate summary list complete with dates, references to pertinent documentation, affected assembly or part numbers, method of acceptance of all alterations, both major and minor, performed upon the Aircraft during the Term. All technical and engineering data, calculations and drawings covering those alterations that remain incorporated, in whole or in part, on the Aircraft at the end of the Term shall become a permanent part of Aircraft Records and shall be delivered to Lessor at redelivery of the Aircraft.
 
10.	Replacement Parts	
Serialized Aircraft Records detailing shop action of all replacement items, appliances, assemblies and component parts thereof which are installed on the Aircraft during the Term of the Lease shall be maintained until returned with the Aircraft.
 
11.	Life Limited Parts	
Life Limited Parts (LLPs) as specified by Aircraft, Airframe, Engine, and Appliance Type Data Sheets and Time Controlled Components identified by MPD shall possess all historic Aircraft Records necessary to establish origin, date, hours and cycles at each installation and removal, last shop visit findings and Return to Service where applicable, in addition to total service and authenticity.
 
12.	Flight Time and Cycles	
Lessee shall maintain accurate, complete, and current Aircraft Records of all flights and cycles made by, and all maintenance and inspection performed on the Aircraft Airframe, Engines, Appliances or component parts thereof.
 
13.	Airworthiness Directives	
All documentation necessary to assure and demonstrate method of compliance with ADs (and any mandatory program which comes into effect during the Term) shall become a permanent part of the Aircraft Records and shall be returned with the Aircraft.
 
14.	ADs and Service Bulletins	
Listings provided by Lessee, which summarize compliance with Service Bulletins and ADs, shall be returned with the Aircraft and verified in writing by Lessee’s quality assurance organization to be authentic and complete. In the event that a particular Service Bulletin was accomplished only in part, or in variance from Manufacturer’s specific instructions, such deviation will be plainly noted. In the event that a particular AD was accomplished in accordance with an approved alternate means of compliance, it will be plainly noted.
 
15.	Records List at Aircraft Redelivery	
The content of the Aircraft Records at redelivery will be as provided in Attachment 1 to this Schedule 8.
 
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Attachment 1
to Schedule 8
RECORDS LIST FOR AIRCRAFT REDELIVERY
 
1.	CONFIGURATION	
 
1.1	Aircraft Description (technical description of aircraft, engines, configuration, weights, etc.)	
 
1.2	Manufacturer’s Detail/Customized Specification	
 
1.3	Interior Configuration Drawing aka “LOPA” (approved by applicable regulatory authority)	
 
1.4	Emergency and Survival Equipment Installation Drawings (description, part number, quantity and location)	
 
1.5	Avionics Installation List (description, manufacturer, model number, part number and quantity)	
 
1.6	List of Supplemental Type Certificates (STC), or equivalent, issued against the aircraft by any Aviation Authority	
 
1.7	Manufacturer’s Delivery Inventory (i.e. Airbus List of Equipment)	
 
2.	CERTIFICATES	
 
2.1	Original Export Certificate of Airworthiness for Aircraft and Engines	
 
2.2	Current Export Certificate of Airworthiness (as applicable) for Aircraft and Engines	
 
2.3	Current Certificate of Airworthiness (photocopy; original shall be on board aircraft)	
 
2.4	Current Aircraft Registration Certificate (photocopy; original shall be on board aircraft)	
 
2.5	De-Registration (as applicable)	
 
2.6	Noise Certificate	
 
3.	SUMMARY RECORDS	
 
3.1	Lessee shall assure that each of the following documents are complete including any update required to reflect work performed in preparation for return to Lessor. Each summary report shall be certified by signature of Lessee’s Director of Quality Assurance or Director of Quality Control as being a complete and accurate description of aircraft status at return to Lessor.	
 
3.2	Aircraft record of flight time and cycles (listing of accumulated hours and cycles as of specific dates)	
 
3.3	Airworthiness Directive (AD) Applicability and Compliance Status – Lessee will supply a separate listing for Airframe, Appliances, APU and each Engine. Listings will include all ADs issued by the Aviation Authority of country of manufacture against the model and series of equipment leased and will clearly identify any exemptions, waivers, or alternate means of compliance granted by the regulatory authority to the operator. In addition to other pertinent data, the documents shall include manufacturer’s Service Bulletin(s) reference, AD and SB revision numbers, method of compliance, date and time (hours and cycles) of accomplishment, status (terminated, repetitive, open), and next due.	
 
3.4	Manufacturer Service Bulletin (SB) Compliance Summary – Lessee will supply a separate listing from Airframe, Appliances, APU and each Engine. Summary will clearly identify whether an SB was completed in full, in part or in variance to manufacturer data and shall detail which portions were accomplished or the nature of any variance.	
 
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3.5	List of Operator Modifications Incorporated (EOs, EAs, FCDs etc.) In addition to other pertinent data, this document shall include operator document reference, description, date and time of accomplishment.	
 
3.6	List of Structural Repairs – In addition to other pertinent data, this document shall include specific location, size, date repair made, specific authority for repair (i.e. SRM reference, Aviation Authority approval, manufacturer telex, etc.), and whether repair was classed as major or minor.	
 
3.7	List of Major Alterations – In addition to other pertinent data, this document shall include description, STC number, and date incorporated.	
 
3.8	Life Limited Parts (LLP) Status Reports (Airframe, Landing Gear, Engines, APU) (In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, total time (hours and cycles), life limit and time remaining.)	
 
3.9	Check/Inspection History (record of scheduled checks accomplished during lease term including date and time accomplished)	
 
3.10	Complete Status Summary for each special maintenance, modification or inspection program (Corrosion Prevention and Control, Supplemental Inspection, Aging Aircraft, etc.) in affect at time of return.	
 
3.11	Time-Controlled Components (TCC) Status Report (Shall address status of each TCC identified in the manufacturer’s MPD as well as each TCC listed in Lessee Maintenance Program. In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, date and aircraft time at installation, current time since overhaul (hours and cycles), limit, and time remaining.)	
 
3.12	List of Currently Installed Components and Equipment (In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, date installed and aircraft time at installation.)	
 
3.13	Emergency and Survival Equipment Inspection Status (In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, date of last inspection and when next due.)	
 
3.14	List of Deferred Maintenance Items (If no DMI, MEL or CDL items are “open” at transfer, a signed statement to that effect is required.)	
 
3.15	List and Status of any out-of-phase checks, special inspection requirements, time limited repairs, “watch” items, etc. (If none exist, then a signed statement to that effect is required.)	
 
4.	MAINTENANCE AND CHECK ACCOMPLISHMENT RECORDS	
 
4.1	Aircraft Flight and Maintenance Log Sheets	
 
4.2	Complete accomplishment records (task card summaries, work instruction cards, non-routines, etc.) for each unsuperseded scheduled check (i.e. “A”, “B”, “C” (Zonal/Systems) and “Structural” Checks / Inspections). In the event that a check is performed in phases, all phases necessary to constitute a complete block check are required. In the event that check content varies by multiples of the check, all multiples necessary to constitute a complete cycle are required.	
 
4.3	Accomplishment records for each special maintenance, modification or inspection programs (Corrosion Prevention and Control, Supplemental Inspection, Aging Aircraft, etc.) in affect at time of return.	
 
4.4	Aircraft weight records (including weight change ledger)	
 
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5.	AIRWORTHINESS DIRECTIVES, SERVICE BULLETINS AND MODIFICATIONS	
 
5.1	Airworthiness Directive Accomplishment Records for all Airworthiness Directives accomplished including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. (Records shall be returned in dedicated AD files segregated by Airframe, Engine, APU and Appliances and shall be in AD number order. Records for ADs requiring repetitive accomplishment of identical action may be restricted to initial and most recent accomplishment.)	
 
5.2	Service Bulletin Accomplishment Records for all Service Bulletins accomplished on the Aircraft, Engines, APU and Appliances including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. (Records shall be returned in dedicated SB files segregated by Airframe, Engine, APU and Appliances and shall be in SB number order. Records for SBs requiring repetitive accomplishment of identical action may be restricted to initial and most recent accomplishment. SBs carried out to satisfy AD requirements shall be returned with AD records and need not be duplicated in SB files.)	
 
5.3	Modification Accomplishment Records for all Modifications accomplished on the Aircraft, Engines, APU and Appliances including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. (Records shall be returned in dedicated Modification files segregated by Airframe, Engine, APU and Appliances and shall be organized in a fashion that allows documents for a particular modification to be located quickly and efficiently. Modifications carried out to satisfy AD requirements shall be returned with AD records and need not be duplicated in Modification files.)	
 
6.	REPAIRS AND ALTERATIONS	
 
6.1	Structural Repair Documents including task cards, engineering orders, drawings, manufacturer telexes, manufacturer approval, Aviation Authority approval, Supplemental Type Certificates, Master Change Notice, FAA Form 8130-3 or EASA Form 1, etc., as necessary to document work done, certification basis, and approval authority. (Records shall be returned in dedicated repair files and shall be organized in a fashion that allows documents for a particular repair to be located quickly and efficiently.)	
 
6.2	Diagram (aka “map”) showing general size and location of all external structural repairs	
 
6.3	Alteration Documents including task cards, engineering orders, drawings, manufacturer telexes, manufacturer approval, Aviation Authority approval, Supplemental Type Certificates, Master Change Notice, FAA Form 8130-3 or EASA Form 1, etc., as necessary to document work done, certification basis, and approval authority. (Records shall be returned in dedicated alteration files and shall be organized in a fashion that allows documents for a particular alteration to be located quickly and efficiently.)	
 
7.	ENGINE RECORDS	
 
7.1	Certified statement as to time and cycles since overhaul on each engine module	
 
7.2	Engine Log Book (as applicable to Lessee’s records keeping system)	
 
7.3	Engine Master Record (record of installation and removal and accumulated flight time and cycles)	
 
7.4	Accessory Status (including description, part number, serial number, date and time installed, and current time since overhaul)	
 
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7.5	Record of last overhaul (FAA Form 8130-3 or EASA Form One) for each of the accessory rotables requiring overhaul on a time specified basis	
 
7.6	Repair, overhaul and inspection records for each shop visit since and including the last overhaul of each module	
 
7.7	Documents demonstrating installation and full traceability to new for each life limited part	
 
7.8	Engine Condition Monitoring Report	
 
7.9	Most recent engine borescope (including copy of DVD or video tape)	
 
7.10	Most recent fuel, oil sampling, magnetic chip detector and vibration survey results (as available)	
 
7.11	Most recent on-wing ground performance run	
 
7.12	Last certified Test Cell Run specifying engine OATL (outside air temperature limit) at rated thrust	
 
7.13	Manufacturer delivery documents i.e. PWA Industry Item List , IAE Data Submittal, etc.	
 
7.14	Engine Oil used	
 
7.15	Any incidents during operation since last shop visit with action taken i.e. IFSD/FOD/oil loss etc.	
 
8.	APU RECORDS	
 
8.1	Certified statement as to hours and cycles since overhaul, hours and cycles since hot section inspection and operator’s method for APU time accrual	
 
8.2	APU Log Book (shall at a minimum contain a record of each installation and removal with accumulated time and cycles, complete and accurate Life Limited Parts History cards, maintenance release and FAA Form 337 for each shop visit)	
 
8.3	Accessory Status (including description, part number, serial number, date and time installed, and current time since overhaul)	
 
8.4	Record of last overhaul (FAA Form 8130-3 or EASA Form One) for each of the accessory rotables requiring overhaul on a time specified basis	
 
8.5	Repair, overhaul and inspection records for each shop visit since and including the last overhaul	
 
8.6	Documents demonstrating installation and full traceability to new for each life limited part	
 
8.7	Most recent certified APU borescope report	
 
8.8	Most recent APU on-wing health check datasheets	
 
8.9	Last certified test cell run	
 
9.	COMPONENT RECORDS	
 
9.1	Documents demonstrating installation and full traceability to new for each life limited part	
 
9.2	Time Controlled Component (TCC) Installation records and certified records of last overhaul (FAA Form 8130-3 or EASA Form One) for each TCC listed in the manufacturer’s MPD and/or Lessee’s approved program	
 
9.3	Installation records and serviceable tags (FAA Form 8130-3 or EASA Form One) for Components and Equipment	
 
9.4	Compass Swing (last recorded)	
 
9.5	VOR Equipment Check (last recorded)	
 
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9.6	Altimeter and Altitude Reporting Equipment Test and Inspection (last recorded)	
 
9.7	ATC Transponder Inspection (last recorded)	
 
9.8	Emergency Locator Battery Status (battery life, replacement times, etc.)	
 
9.9	Control Surface Balance (last recorded)	
 
9.10	Flight and Cockpit Voice Recorders (last bench test and inspection)	
 
10.	MISCELLANEOUS	
 
10.1	Aircraft Log Book (as applicable to Lessee’s records keeping system)	
 
10.2	Lessee’s Minimum Equipment List (MEL)	
 
10.3	Lessee’s Maintenance Program and copy of aviation authority approval of same (Maintenance Program documentation shall include a complete cross reference between Manufacturer’s Maintenance Planning Document task numbers and Lessee task numbers)	
 
10.4	Operator vs. Manufacturer Part Number Cross-Reference and any other reference material necessary for interpretation of status summaries	
 
10.5	List of Oils and Fluids used throughout the aircraft	
 
10.6	Galley Drawings	
 
10.7	Certificate of Conformity for all interior fabrics, carpets, wall and ceiling panels, cargo tape and seat covers/cushions indicating compliance with the relevant FAA Flammability requirements, including FAR 121.312	
 
10.8	Certification records of galleys and seats	
 
11.	QUALITY ASSURANCE STATEMENTS	
 
11.1	Statement of total hours and total cycles on the airframe, engines, APU and landing gear at aircraft transfer	
 
11.2	Automated Record System procedures and Security Control (as applicable to Lessee’s records keeping system)	
 
11.3	List of Repair Stations used by Lessee including Part 145 Certification and Letter to Repair Stations authorizing release of records to Lessor upon request	
 
11.4	Report detailing Incidents or Accidents (if none, signed statement to that effect)	
 
11.5	List of All Records and Documentation Transferred with Aircraft (inventory of boxes and content)	
 
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Schedule 9
Post-Delivery Modifications
 
1.	Engine Thrust Upgrade	
Lessor shall cause to be delivered to Lessee, the IAE and Airbus Service Bulletins and data-plate necessary to change the variant of each Engine from V2527-A5 to V2527E-A5. Lessee shall cause the Service Bulletins to be incorporated in each Engine and the Aircraft promptly following its receipt of such Service Bulletins (and in any event within 3 months of such receipt).
 
2.	FAR Part 129 Equipment	
Lessor shall cause to be delivered to Lessee the Airbus Service Bulletin necessary to make the Flight Data Recorder compliant with FAR Part 121.344. Lessee shall cause such Service Bulletin to be incorporated on the Aircraft promptly following its receipt of such Service Bulletin (and in any event within 3 months of such receipt).
 
3.	Cabin Reconfiguration	
Lessor shall cause to be delivered to Lessee the Service Bulletin(s) necessary for reconfiguration of the passenger seating arrangement from 180 all economy class to 174 all economy class in accordance with the layout of passenger accommodation (LOPA) set out in the Appendix to this Schedule 9. Lessee shall cause such Service Bulletin(s) to be incorporated in the Aircraft promptly following its receipt of such Service Bulletin(s) (and in any event within 3 months of such receipt). Lessor shall reimburse Lessee for the reasonable labour and materials to accomplish such reconfiguration promptly following receipt by Lessor of authentic, legible invoices evidencing the costs involved which (x) confirm that the work has been carried out and paid for and (y) give in reasonable detail a summary of the work that has been performed, and the time, parts and manpower used to perform each separate task.
 
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APPENDIX
to Schedule 9
LOPA

 
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Schedule 10
Form of Deregistration Power of Attorney

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
		
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY AMEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2011 (the “Lease”) between MASL IRELAND (22) LIMITED (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number 2204 y dos motores modelo IAE V2527E-A5 (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre MASL IRELAND (22) LIMITED (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante 2204 y dos motores modelo IAE V2527E-A5 (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to MASL IRELAND (22) LIMITED and MACQUARIE AIRCRAFT LEASING SERVICES (IRELAND) LIMITED (each an “Attorney” and together the “Attorneys”),
with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de MASL IRELAND (22) LIMITED y MACQUARIE AIRCRAFT LEASING SERVICES (IRELAND) LIMITED (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, a efecto de que los Apoderados actúen en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. y realicen todas las acciones y suscriba todos aquellos documentos que sean necesarios o convenientes para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC; (iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y	
 
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Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
 
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and	  	acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
	  	 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.	
	  	 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades”).	
	  	 
Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
	  	 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
	  	 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
	  	 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de	
 
- 112 -

			
purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  		
 
- 113 -

Schedule 11
[Intentionally Omitted]
 
- 114 -

Schedule 12
Lease Information

Aircraft:	 	 	
		
Manufacturer:	 	Airbus	
		
Type and Model:	 	A320-200	
		
Serial Number:	 	2204	
		
Engines:	 		
		
Manufacturer:	 	International Aero Engines	
		
Type and Model:	 	IAE V2527-A5	
		
Anticipated Delivery Date:	 	April 6, 2011	
		
Claims Limit:	 	The amount of the first deductible under the hull cover	
		
Delivery Location:	 	A maintenance facility in Portugal, Mexico, England, Germany or France to be designated in writing by Lessor	
		
Expiry Date:	 	May 22, 2015 or, if such date is not a Business Day, the next succeeding Business Day	
		
Lessee’s Process Agent:	 	Corporation Service Company of 1180 Avenue of the Americas, Suite 210, New York, New York 10036	
		
Lessor’s Bank Account:	 	See Schedule 15	
		
Margin:	 	See Schedule 15	
		
Latest Delivery Date:	 	The date which is 30 days after the Anticipated Delivery Date	
		
Home Jurisdiction:	 	Lessor: Ireland	
		
	 	Lessee: Mexico	
		
State of Registration:	 	Subject to Clause 8.6, Mexico	
		
Text of Fireproof Plate:	 	See Attachment A hereto	
		
Insured Value:	 	See Schedule 15	
		
Engine Agreed Value:	 	See Schedule 15	
 
- 115 -

ATTACHMENT A
to SCHEDULE 12
DATA PLATES
MSN 2204
 
1.	Lease Data Plates	
FLIGHT DECK
This Airbus A320-200 Aircraft, Manufacturer’s Serial No. 2204, is (1) owned by Wells Fargo Bank Northwest, N.A., as owner trustee, (2) leased to MASL Ireland (22) Limited and (3) sub-leased to Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V.
EACH ENGINE
This IAE V2527-A5 Engine, Manufacturer’s Serial No. [insert serial number], is (1) owned by Wells Fargo Bank Northwest, N.A., as owner trustee, (2) leased to MASL Ireland (22) Limited and (3) sub-leased to Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V.
 
2.	Ownership Data Plate	
To be affixed to the forward right doorframe:

AIRBUS	 	A320-200	
		
Serial No.	 	2204	
		
REGISTRATION	 	XA-[VOU]	
		
OWNER	 	WELLS FARGO BANK NORTHWEST, N.A.,
not individually but solely as owner trustee	
		
ADDRESS	 	299 SOUTH MAIN STREET
12TH FLOOR
SALT LAKE CITY
UTAH 84111
UNITED STATES OF AMERICA	
 
- 116 -

Schedule 13
Form of Monthly Operating Report
 
To:	                Macquarie Aircraft Leasing Services (Ireland) Limited	
 
Attention:        Technical	Department	
Date: [•]
Aircraft Lease Agreement (the “Lease Agreement”) dated as of April 7, 2011 between MASL Ireland (22) Limited, as lessor, and Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V., as lessee relating to one Airbus A320-200 Aircraft, MSN 2204 (the “Aircraft”)
Terms used in this Report have the meanings given to them in the Lease Agreement.
We confirm that during the period from • to • (the “Period”) or, as the context may require, as of the last day of the Period the following information was true with respect to the Aircraft:
 
1.	Engines	
 
1.1	Engine s/n             :	
 
 	1.1.1	If removed from Airframe during Period:	
 
 	(a)	Date [•]	
 
 	(b)	Reason [•]	
 
 	1.1.2	Location (i.e. aircraft on which installed if not the Aircraft): [•]	
 
 	1.1.3	Hours since New: [•]	
 
 	1.1.4	Cycles since New: [•]	
 
 	1.1.5	Engine Hours accumulated during Period: [•]	
 
 	1.1.6	Cycles accumulated during Period: [•]	
 
 	1.1.7	Module changes: [•]	
 
 	1.1.8	Average derate during Period: [•]	
 
1.2	Engine s/n             :	
 
 	1.2.1	If removed from Airframe during Period:	
 
 	(a)	Date [•]	
 
 	(b)	Reason [•]	
 
 	1.2.2	Location (i.e. aircraft on which installed if not the Aircraft): [•]	
 
 	1.2.3	Hours since New: [•]	
 
 	1.2.4	Cycles since New: [•]	
 
 	1.2.5	Engine Hours accumulated during Period: [•]	
 
 	1.2.6	Cycles accumulated during Period: [•]	
 
 	1.2.7	Module changes: [•]	
 
 	1.2.8	Average derate during Period: [•]	
 
1.3	APU s/n             :	
 
 	1.3.1	Total APU Hours since new: [•]	
 
- 117 -

 	1.3.2	APU Hours accumulated during Period:	
 
 	1.3.3	Location (if removed from Aircraft):	
(if installed on another airframe, please specify by MSN and registration mark)
 
 	(a)	Date of removal:	
 
 	(b)	Reason for removal:	
 
2.	Landing Gear	
 
2.1	Flight Hours completed during Period: [ — ]	
 
2.2	Block Hours completed during Period: [ — ]	
 
2.3	Cycles completed during Period: [ — ]	
 
3.	Airframe	
 
3.1	Hours since New: [ — ]	
 
3.2	Cycles since New: [ — ]	
 
3.3	Block Hours completed during Period: [ — ]	
 
3.4	Flight Hours completed during Period: [ — ]	
 
3.5	Cycles completed during Period: [ — ]	
 
3.6	Anticipated date of next C Check: [ — ]	
 
3.7	Anticipated date of next major structural check: [ — ]	
 
3.8	Average daily utilisation (in Hours) during Period: [ — ]	
 
3.9	Any specific information re: restriction of operating location.	
 
4.	Miscellaneous	
 
4.1	Any changes to Insurances over Period: [ — ]	
 
4.2	Airworthiness Directives or Mandatory Service Bulletins accomplished during Period: [ — ]	
 
4.3	Departure locations during period: [ — ]	
Authorised Signatory
for and on behalf of 
Concesionaria Vuela Compañía de Aviación, S.A. P.I. de C.V.

	  	cc:	  	        Macquarie Aircraft Leasing Services (US) Inc.	
	  	Two Embarcadero Center, Suite 200	
	  	San Francisco, California 94111	
	  	USA	

	 	Attention:	 		 	Contracts Administration	
	 	Telephone:	 		 	+1 415 829 6600	
	 	Fax:	 		 	+1 415 829 6689	
 
- 118 -

Schedule 14
Form of Redelivery Certificate
THIS REDELIVERY CERTIFICATE is dated [            ], 20[    ], (this “ Redelivery Certificate ”), between MASL IRELAND (22) LIMITED (“ Lessor ”) and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A. P.I. DE C.V. (“ Lessee ”).
WITNESSETH :
WHEREAS , Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement dated as of April 7, 2011 (the “ Lease ”), which provides for the execution and delivery of a Redelivery Certificate in substantially the form hereof for the purpose of acknowledging the return of the Aircraft in accordance with the terms of the Lease;
NOW, THEREFORE , in consideration of the premises, and pursuant to Clause 14 of the Lease, Lessor and Lessee hereby agree as follows:
 
1.	Definitions	
Unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings given them in the Lease.
 
2.	Redelivery and Acceptance	
Lessee hereby delivers and returns to Lessor, and Lessor hereby accepts from Lessee under the provisions of the Lease:
Aircraft: One Airbus A320-200 aircraft consisting of the following:
 
 	2.1.1	Airframe: Registration Mark: [    ]	

	  	Manufacturer’s Serial No. 2204	
	  	Total Flight Hours: [    ]	
	  	Total Cycles: [    ]	
	  	Date of last Six Year Check: [    ]	
	  	Date of last Twelve Year Check: [    ]	
 
 	2.1.2	Engines: Two IAE V2527E-A5 turbofan engines installed on said Airframe, bearing, respectively, Manufacturer’s Serial Nos.:	

Engine Number	  	Manufacturer’s Serial Number	  	Engine	  	Total Hours	  	Total Cycles	
1.	  		  		  		  		
2.	  		  		  		  		
 The status of the time controlled components, engine modules and life limited parts is set forth in Appendix I hereto.
 
 	2.1.3	Auxiliary Power Unit:	

Make And	 	Manufacturer’s	  	Total APU	 	APU Hours since	  	Total	  	Cycles since	
Model	 	Serial Numbers	  	Hours	 	APU Heavy Repair	  	Cycles	  	APU Heavy Repair	
 
- 119 -

 	2.1.4	Landing Gear	

Position	  	Date of Last Overhaul	  	Hours and Cycles Since Overhaul	
Nose	  		  		
Main – Left	  		  		
Main – Right	  		  		
 
 	2.1.5	Brake Wear Pin Measurements	

Position	  	Measurement	
 
 	2.1.6	Lessor Furnished Equipment: The equipment installed in the Aircraft (including avionics, safety equipment and galley equipment) and being returned to Lessor is described in Appendix II hereto.	
Lessor confirms that the Aircraft has been examined by its duly appointed and authorized representatives and such items conform to the information set forth above.
 
3.	Aircraft Records	
Lessee hereby redelivers and Lessor hereby accepts the manuals, log books, records and other documents relating to the Aircraft described in Appendix III hereto.
 
4.	Redelivery Date	
The redelivery date of the Aircraft is the date first set forth above, and the Aircraft is hereby redelivered and accepted on such date at             , hours local time at [location of redelivery].
 
5.	Fuel	
At the time of redelivery there were      kg. of fuel in the Aircraft and each oil tank was full.
 
6.	Condition of Aircraft	
The Aircraft is redelivered in good working order and condition except for the exceptions specified in Appendix IV hereto and Lessee and Lessor agree to the payments and commitments specified therein.
 
7.	Maintenance Payment Amounts	
Upon redelivery of the Aircraft, Lessee waives all rights, interests and claims to (i) any Maintenance Payment Amounts and (ii) make any claim for Lessor cost sharing under paragraph 4 of Schedule 15.
 
8.	Governing Law	
This Redelivery Certificate shall in all respects be governed by, and construed in accordance with, the laws of the State of New York. Subject to Clause 17.6 of the Lease, the parties hereto agree that the courts of New York are to have jurisdiction to settle any disputes which may arise out of this Redelivery Certificate.
 
- 120 -

IN WITNESS WHEREOF , Lessor and Lessee have each caused this Redelivery Certificate to be duly executed by their authorized officers on the date first above written.
MASL IRELAND (22) LIMITED

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
- 121 -

APPENDIX I
to Redelivery Certificate
Airbus A320-200 MSN 2204
STATUS OF TIME CONTROLLED COMPONENTS, ENGINES MODULES AND LLPS
See attached      pages.
 
- 122 -

This Appendix will be completed once the Certificate of Acceptance is executed and delivered,
pending return of the aircraft.
 
- 123 -

APPENDIX II
to Redelivery Certificate
Airbus A320-200 MSN 2204
LESSOR FURNISHED EQUIPMENT
See attached      pages.
 
- 124 -

This Appendix will be completed once the Certificate of Acceptance is executed and delivered,
pending return of the aircraft.
 
- 125 -

APPENDIX III
to Redelivery Certificate
Airbus A320-200 MSN 2204
AIRCRAFT RECORDS
See attached      pages.
 
- 126 -

This Appendix will be completed once the Certificate of Acceptance is executed and delivered,
pending return of the aircraft.
 
- 127 -

APPENDIX IV
to Redelivery Certificate
Airbus A320-200 MSN 2204
OPEN/MISCELLANEOUS ITEMS
See attached      pages.
 
- 128 -

This Appendix will be completed once the Certificate of Acceptance is executed and
delivered, pending return of the aircraft.
 
- 129 -

Schedule 15
Financial and Other Confidential Information
[all information below to be removed from FAA Filing Copy]
 
1.	Basic Rent Amounts	
 
1.1	The Basic Rent in respect of each Basic Rent Period during the Term will, subject to paragraph 1.2 below, be in the amount of *****.	
 
1.2	Where any Basic Rent Period is more or less than a full month, the Basic Rent for such period payable on the Basic Rent Payment Date which is the first day of such Basic Rent Period shall be prorated based on the actual number of days in such Basic Rent Period and a month of thirty (30) days.	
 
2.	Security Deposit	
 
2.1	*****.	
 
2.2	Security Letter of Credit Face Amount: *****.	
 
3.	Maintenance Payment Amounts	
 
3.1	LLP Payment Rate: *****. This rate assumes a 10% stub-life and is subject to adjustment in accordance with paragraph 4.2 of Schedule 3.	
 
3.2	Engine Payment Rates:	
The Engine Payment Rate for an Engine and a month shall be equal to the amount determined by reference to the table below and the average Engine Hour/Cycle ratio for such Engine during such month. If the average Engine Hour/Cycle ratio for an Engine during any month (rounded to the nearest one decimal place) falls between the ratios shown in the table below, the Engine Payment Rate for such Engine shall be calculated by linear interpolation:

Engine Hour
/Cycle Ratio	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
Amount per
Engine Hour	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
This numbers in the above table are subject to adjustment in accordance with paragraph 4.2 of Schedule 3.
 
3.3	Airframe Payment Rates:	
 
 	3.3.1	Six Year Check Payment Rate: *****.	
 
 	3.3.2	Twelve Year Check Payment Rate: *****.	
These rates are subject to adjustment in accordance with paragraph 4.2 of Schedule 3.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 130 -

3.4	Landing Gear Payment Rate: *****. This rate is subject to adjustment in accordance with paragraph 4.2 of Schedule 3	
 
3.5	APU Payment Rate: *****. This rate is subject to adjustment in accordance with paragraph 4.2 of Schedule 3.	
 
4.	Additional Lessor Cost Sharing	
 
4.1	Additional Cost Sharing of the First Performance Restoration of an Engine	
In addition to Lessor’s obligations under paragraph 5 of Schedule 3, Lessor will share with Lessee the reasonable cost of the first Performance Restoration of each Engine that occurs during the Term (“ First Lessee Restoration ”). Lessor’s share for the First Lessee Restoration of an Engine shall be:
 
 	4.1.1	in the case of the Engine with serial number *****, an amount equal to the lesser of (i) ***** and (ii) the actual cost of the First Lessee Restoration of such Engine; and	
 
 	4.1.2	in the case of the Engine with serial number *****, an amount equal to the lesser of (i) ***** and (ii) the actual cost of the First Lessee Restoration of such Engine.	
The requirements of the proviso to paragraph 5.1 (other than the proviso to paragraph 5.1.4) of Schedule 3 shall apply to the First Lessee Restoration of each Engine as if each such First Lessee Restoration were “Relevant Work” and any claim by Lessee under this paragraph 4.1 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of any such First Lessee Restoration unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
4.2	Cost Sharing of First Replacements of an LLP in an Engine	
In addition to Lessor’s obligations under paragraph 5 of Schedule 3, Lessor will share with Lessee the reasonable cost of the first scheduled replacement of each LLP in an Engine that occurs during the Term (each a “ First Lessee LLP Replacement ”). Lessor’s share for the First Lessee LLP Replacement in respect of an LLP shall be A, where:
*****
The requirements of the proviso to paragraph 5.1 of Schedule 3 shall apply to each First Lessee LLP Replacement as if such First Lessee LLP Replacement were “Relevant Work” and any claim by Lessee under this paragraph 4.2 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of any First Lessee LLP Replacement unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
4.3	Cost Sharing of First Scheduled Landing Gear Overhaul	
In addition to Lessor’s obligations under paragraph 5 of Schedule 3, Lessor will share with Lessee the reasonable cost of the first scheduled Landing Gear Overhaul that occurs during the Term (“ First Landing Gear Overhaul ”). Lessor’s share for the First Landing Gear Overhaul shall be A, where:
*****,
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 131 -

provided that Lessor’s share of the First Landing Gear Overhaul shall not exceed an amount equal to the product of Lessor’s Gear Usage and *****
The requirements of the proviso to paragraph 5.1 of Schedule 3 shall apply to the First Landing Gear Overhaul as if the First Landing Gear Overhaul were “Relevant Work” and any claim by Lessee under this paragraph 4.3 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of the First Landing Gear Overhaul unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
4.4	Cost Sharing of the next Scheduled Six Year Check	
In addition to Lessor’s obligations under paragraph 5 of Schedule 3, Lessor will share with Lessee the reasonable cost of the first scheduled Six Year Check that occurs during the Term (“ First Lessee Six Year Check ”). Lessor’s share for the First Lessee Six Year Check shall be A, where:
*****,
provided that Lessor’s share of the First Lessee Six Year Check shall not exceed an amount equal to the product of Lessor’s 6Y Usage and *****.
The requirements of the proviso to paragraph 5.1 of Schedule 3 shall apply to the First Lessee Six Year Check as if the First Lessee Six Year Check were “Relevant Work” and any claim by Lessee under this paragraph 4.4 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of the First Lessee Six Year Check unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
4.5	Cost Sharing of the next Scheduled Twelve Year Check	
In addition to Lessor’s obligations under paragraph 5 of Schedule 3, Lessor will share with Lessee the reasonable cost of the first scheduled Twelve Year Check that occurs during the Term (“ First Lessee Twelve Year Check ”). Lessor’s share for the First Lessee Twelve Year Check shall be A, where:
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 132 -

*****,
provided that Lessor’s share of the First Lessee Twelve Year Check shall not exceed an amount equal to the product of Lessor’s 12Y Usage and *****.
The requirements of the proviso to paragraph 5.1 of Schedule 3 shall apply to the First Lessee Twelve Year Check as if the First Lessee Twelve Year Check were “Relevant Work” and any claim by Lessee under this paragraph 4.5 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of the First Lessee Twelve Year Check unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
4.6	Cost Sharing of Airworthiness Directives	
In addition to Lessor’s obligations under paragraph 5.3 of Schedule 3, Lessor shall, subject to the remaining provisions of this paragraph 4.6, share in the reasonable cost of any modification or repair required as a result of any Airworthiness Directive issued by the country of manufacture of the Aircraft where such modification or repair is a terminating action for the Airworthiness Directive and where such cost is in excess of ***** for that Airworthiness Directive. Lessor’s share for any such Airworthiness Directive shall be an amount equal to 50% of such excess over *****.
The requirements of the proviso to paragraph 5.1 of Schedule 3 shall apply to any modification or repair referred to in this paragraph 4.6 as if such modification or repair were “Relevant Work” and any claim by Lessee under this paragraph 4.6 were a “Relevant Claim”, and Lessor shall not be required to share in the cost of any such modification or repair unless such requirements are satisfied (or in respect of any matter excluded thereunder).
 
5.	Schedule 12 Information	
 
5.1	Lessor’s Bank Account:	
Bank: Citigroup Europe plc
Branch: 1 North Wall Quay, Dublin 1, Ireland
*****
 
5.2	Margin: *****	
 
5.3	Insured Value: *****, reducing by ***** on each anniversary of the Delivery Date	
 
5.4	Engine Agreed Value: ***** (each Engine), for off-wing coverage	
 
6.	End of Term Adjustment Payments – Time Controlled Components and APU	
 
6.1	Introduction	
The payments required by paragraph 6 of Part B of Schedule 6 shall reflect the difference in the maintenance condition of the Time Controlled Components and APU as of the Determination Date as compared with their maintenance condition as of the Delivery Date. Paragraphs 6.2 and 6.3 below describe various calculations that must be made before the payment pursuant to paragraph 6.4 below can be determined. Paragraph 6.5 below sets forth various terms defined for the purposes of this paragraph 6.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 133 -

6.2	Time Controlled Component Amounts	
On or promptly after the Determination Date Lessor will calculate the amount for each Time Controlled Component in the Aircraft that is equal to ***** (each a “ Component Amount ”), each of which may be a positive or a negative amount, where:
*****
 
6.3	APU Amount	
On or promptly after the Determination Date Lessor will calculate the amount for the APU that is equal to ***** (the “ APU Amount ”), which may be a positive or a negative amount, where:
*****
 
6.4	Calculation and Payment of Settlement Amount	
Promptly after Lessor has made the calculations referred to in paragraphs 6.2 and 6.3 above, Lessor shall calculate and give Lessee notice of the amount (the “ Settlement
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 134 -

Amount ”) which is the aggregate of the APU Amount and all of the Time Controlled Component Amounts. Lessor and Lessee acknowledge that the Settlement Amount may be a positive or a negative amount, and if the Settlement Amount is (a) a positive amount, it shall represent a debt owed by Lessee to Lessor, and Lessee shall pay the amount thereof to Lessor promptly following Lessor’s first written demand, and (b) a negative amount, it shall represent a debt owed by Lessor to Lessee, and Lessor shall off-set the Settlement Amount (in whole or in part) against the other amounts (if any) then due from Lessee under the Lease or any other Relevant Document and, provided no Event of Default shall have then occurred which is continuing and Lessee shall have returned the Aircraft to Lessor in compliance with the requirements of this Lease, Lessor shall pay the balance thereof to Lessee promptly following Lessee’s first written demand.
 
6.5	Certain Defined Terms	
In this paragraph 6:
“ Check ” means, as the context may require, an APU Heavy Repair or an overhaul or replacement of a Time Controlled Component, in each case performed in accordance with the Maintenance Program and documented in accordance with the terms of the Lease;
“ Determination Date ” means the day on which the leasing of the Aircraft under this Lease expires or early terminates;
“ Item ” means, as the context may require, the APU or any Time Controlled Component;
“ Month ” signifies whole months with any part of a month expressed as a fraction of a month;
“ Qualified Facility ” means, with respect to a particular Check, a maintenance facility (a) holding FAA Part 145 and EASA Part 145 repair station certificates of approval to perform such Check and (b) not affiliated with Lessee or Lessor;
“ Reference Date ” means, with respect to any Item:
 
 	(a)	the most recent date on which a Check was performed on such Item; or	
 
 	(b)	if no Check has been performed on such Item, the date on which such Item was delivered new;	
“ Time Controlled Component ” means a component or part forming part of the Aircraft requiring overhaul or replacement on a time specified basis per the MPD (but solely with respect to the calculation of the Time Controlled Component Amounts, excluding (a) such components or parts forming part of the Landing Gear, (b) LLPs, and (c) life limited parts forming part of the APU).
 
- 135 -

Schedule 16
Form of Lessee Acknowledgement
 
From:	MASL Ireland (22) Limited (the “ Lessor ”)	
Citibank N.A., as collateral agent (the “ Collateral Agent ”)
 
To:	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (the “ Lessee ”)	
             2011
Dear Sirs:
We refer to the aircraft lease agreement described on the attached Schedule I (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A320-200 with manufacturer’s serial number 2204 (together with the engines described in the Lease Agreement, the “ Aircraft ”) together with all related agreements (including, without limitation, any supplements or amendments) entered into in connection with, or relating to, the lease of the Aircraft or letter of credit (together with the Lease Agreement, the “ Lease Documents ”). All terms defined in the Lease Agreement (including terms expressly defined therein or by reference to another document or otherwise), unless the context otherwise requires, have the same meanings in this Lessee Acknowledgement (this “Acknowledgement”).
We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:
1. By the Operating Lease Security Assignment made             , 2011 (the “ Security Assignment ”) between the Lessor (as assignor) and the Collateral Agent and the Security Agreement made 30 November 2006 (the “ Security Agreement ”) between, inter alios, the Lessor (as assignor) and the Collateral Agent, the Lessor has assigned and encumbered to the Collateral Agent, as security, all of its right, title and interest in and to all of its rights, title and interests, present and future, actual or contingent, in and to, inter alia (i) the Lease Documents (other than in relation to the Excluded Property) and all other rights and benefits whatsoever accruing to it under the Lease Documents including, without limitation, (a) the right to receive all amounts of rental and any other amounts due (other than in relation to the Excluded Property) under or in connection with the Lease Documents; (b) the right to compel performance by you of your obligations under the Lease Documents (other than in relation to the Excluded Property); (c) all claims for damages in respect of any breach by you of the Lease Documents (other than in relation to the Excluded Property); (d) all rights to receive payment of insurance proceeds payable with respect to the Aircraft or other property which is the subject of the Lease in accordance with the terms thereof; and (e) the right to give consents and grant waivers in respect of the Lease Documents (other than in relation to the Excluded Property); (ii) the Related Collateral; and (iii) any and all proceeds of the foregoing paragraphs (i) and (ii) (collectively, the “ Security Assignment Documents ”). By execution of the acknowledgement to this Acknowledgement you hereby consent, effective as of the date hereof, to the security assignment in favour of the Collateral Agent described in the preceding sentence. In this Acknowledgement, “ Excluded Property ” means all right, title and interest, present or future (actual or contingent) of the Lessor in and to the operational indemnities contained in the Lease Documents, to the extent such indemnities are given expressly for the benefit of the Lessor or any of its directors, officers, employees, servants or agents only.
2. From and after the date of this Acknowledgement and, unless and until the Collateral Agent otherwise directs in writing, you agree that all monies (other than in relation to the Excluded Property) that are payable by you under, or in respect of, any of the Security Assignment Documents shall be paid to the following account:
*****
 
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3. Save as provided in paragraph 2 above, until the Collateral Agent serves a Relevant Notice (as defined below) on you, you shall continue to deal directly with the Lessor in respect of the Lease Documents and the other Security Assignment Documents to which you are party.
4. From and after the date of this Acknowledgement, if the Collateral Agent delivers to you a written notice that it has exercised its rights under the Security Assignment and/or the Security Agreement (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Documents and the other Security Assignment Documents to which you are party for the benefit of the Collateral Agent as if the Collateral Agent were named in place of the Lessor as a party to the Security Assignment Documents. After the Collateral Agent delivers any Relevant Notice, you shall not recognize the exercise by the Lessor of any of its rights and powers under the Security Assignment Documents unless and until requested to do so by the Collateral Agent.
5. As from the date hereof it is irrevocably and unconditionally agreed that until such time as you have been otherwise notified by the Collateral Agent, the Collateral Agent is the sole person to whom the proceeds payable under the hull insurances in relation to the Aircraft in respect of a total loss shall be payable. In furtherance of the foregoing, please cause the hull and liability insurance required to be maintained under the Lease Agreement to be endorsed as specified in the attached Schedule II and to obtain from your insurance/reinsurance brokers, and send to the Lessor and the Collateral Agent as promptly as possible, revised certificates of insurance and broker’s letter of undertaking to evidence such endorsements.
6. Save as expressly provided herein, we hereby confirm that none of your rights and obligations under the Lease Documents will be affected (including, without limitation, any obligations in respect of the payment of Rent, Maintenance Payment Amounts, Taxes or other amounts due and payable under the Lease) as a result of (a) the giving of this Acknowledgement or any Relevant Notice; (b) the execution of the Security Assignment or (c) the exercise of our rights under the Security Assignment Documents as set forth in this Acknowledgement.
This Acknowledgement and the authorizations and instructions contained in this Acknowledgement are irrevocable unless and until you receive written notice to the contrary from the Collateral Agent. This Acknowledgement is for the benefit of the Lessee, the Collateral Agent and the Lessor. This Acknowledgement and the instructions contained herein cannot be amended or modified without the written consent of Lessee, the Collateral Agent and the Lessor. The Collateral Agent shall in exercising any right, privilege or remedy under or in respect of the Lease and the other Lease Documents be bound by and exercise the same in accordance with the terms of such documents and, to the extent it receives any sums after its foreclosure on the Lease, whether of Rent, proceeds of Insurances, Maintenance Payment Amounts or otherwise, it shall hold, invest, apply, retain and reimburse such sums as provided in the Lease Documents but otherwise shall have no liability for the performance of, any other of the Lessor’s obligations under the Security Assignment Documents unless expressly agreed to in writing by the Collateral Agent. The Collateral Agent hereby acknowledges receipt by it of copies of the Lease Documents.
 
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Yours faithfully,
For and on behalf of
MASL IRELAND (22) LIMITED

By:	 		
		
Name:	 		
		
Title:	 		
For and on behalf of
CITIBANK, N.A ., acting in its capacity as Collateral Agent under the Security Agreement

By:	 		
		
Name:	 		
		
Title:	 		
ACKNOWLEDGED AND AGREED this      day of April, 2011
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V.

By:	 		
		
Name:	 		
		
Title:	 		
 
- 138 -

SCHEDULE I
LEASE AGREEMENT, RELATED COLLATERAL AND AIRCRAFT
LEASE AGREEMENT:
Aircraft Lease Agreement dated as of April 7, 2011 between MASL Ireland (22) Limited, as Lessor and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., as Lessee.
AIRCRAFT:
One Airbus model A320-200 aircraft bearing manufacturer’s serial number *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 139 -

SCHEDULE II
INSURANCE
Without limiting the requirements of the Lease Agreement, all required hull, spares and hull war risk insurance shall name the Lessor and the Collateral Agent as additional insureds and (ii) if possible, designate the Collateral Agent as the sole loss payee in relation to any total loss. All required liability (including war risk liability) insurance shall include (i) each of the Contract Parties mentioned below and (ii) the respective shareholders, subsidiaries, directors, members, officers, agents, employees and indemnitees of such persons, as additional insureds.
For insurance coverage that includes AVN67B (or the substantive equivalent) the following should be identified in the insurance/reinsurance certificates.
Contract Parties:
MASL Ireland (22) Limited (the “ Lessor ”),
Macquarie Aircraft Leasing Services (Ireland) Limited,
Citibank, N.A., as Collateral Agent,
Citicorp North America, Inc., as Administrative Agent,
Each of the persons from time to time being Lenders under the Credit Agreements identified as a Contract below,
in each case, with their successor and assigns.
Contracts:
Lease Agreement dated as of April 7, 2011 between the Lessor, as lessor and the Lessee, as lessee in respect of one Airbus model A320-200 aircraft bearing manufacturer’s serial number 2204 (as amended, modified or supplemented from time to time, the “ Lease Agreement ”),
First-Priority Credit Agreement dated as of November 30, 2006 (as amended, modified or supplemented from time to time) among Macquarie Aircraft Leasing Finance S.A., Macquarie Aircraft Leasing Limited, Macquarie Aircraft Leasing Holdings (2) Limited, the First-Priority Lenders party thereto, Citicorp North America, Inc., as administrative agent for the First-Priority Lenders and the Collateral Agent,
Second-Priority Credit Agreement dated as of November 30, 2006 (as amended, modified or supplemented from time to time) among Macquarie Aircraft Leasing Finance S.A., Macquarie Aircraft Leasing Limited, Macquarie Aircraft Leasing Holdings (2) Limited, the Second-Priority Lenders party thereto, Citicorp North America, Inc., as administrative agent for the Second-Priority Lenders and the Collateral Agent,
Security Agreement dated as of November 30, 2006 (as amended, modified or supplemented from time to time) among Macquarie Aircraft Leasing Finance S.A., Macquarie Aircraft Leasing Limited, Macquarie Aircraft Leasing Holdings (2) Limited, the Lessor, certain other entities as more particularly described therein and the Collateral Agent,
Operating Lease Security Assignment dated as of             , 2011 (as amended, modified or supplemented from time to time) between the Lessor and the Collateral Agent,
Servicing Agreement dated as of November 30, 2006 (as amended, modified or supplemented from time to time) among Macquarie Aircraft Leasing Limited, Macquarie Aircraft Leasing Services (Ireland) Limited and certain other entities as more particularly described therein.
 
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Schedule 17
Form of Irrevocable De-Registration and Export Request Authorisation (IDERA)

Date:	  	[            ]	
		
To:	  	The Federal Aviation Administration	
		
Re:	  	IrrevocableDe-Registration and Export Request Authorisation	
The undersigned, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., is the operator of:
 
1.	the Airbus A320-200 aircraft	
 
2.	bearing manufacturers serial number 2204	
 
3.	and registration mark [            ]	
(together with all installed, incorporated or attached accessories, parts and equipment, the “ Aircraft ”).
This instrument is an irrevocable de-registration and export request authorization issued by the undersigned in favour of MASL Ireland (22) Limited (the “ Authorized Party ”) under the authority of Article XIII of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. In accordance with that Article, the undersigned hereby requests:

(a)	 	recognition that the Authorized Party or the person it certifies as its designee is the sole person entitled to:	
			
	 	(i)	 	procure the de-registration of the aircraft from the Federal Aviation Administration for the purposes of Chapter III of the Convention on International Civil Aviation, signed at Chicago, on 7 December 1944; and	
			
	 	(ii)	 	procure the export and physical transfer of the aircraft from the United States of America or any other jurisdiction where the Aircraft may be located.	
		
(b)	 	confirmation that the Authorized Party or the person it certifies as its designee may take the action specified in clause (i) above on written demand without the consent of the undersigned and that, upon such demand, the Federal Aviation Administration shall co-operate with the Authorized party with a view to speedy completion of such action.	
The rights in favour of the Authorized Party established by this instrument may not be revoked by the undersigned without the written consent of the Authorized Party.
Please acknowledge your agreement to this request and its terms by appropriate notation in the space provided below and lodging this instrument in the Federal Aviation Administration.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
- 141 -

Agreed to and lodged this [     ] day of [    ]

By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
- 142 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.31
Execution Version
DATED APRIL 13, 2011
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, NOT IN ITS
INDIVIDUAL CAPACITY, BUT SOLELY
AS OWNER TRUSTEE
LESSOR
AND
CONCESIONARIA VUELA COMPAÑIA DE AVIACIÓN S.A.P.I. DE C.V.
LESSEE

AIRCRAFT OPERATING LEASE
AGREEMENT (MSN 4741)
ONE (1) AIRBUS A320-233 AIRCRAFT [GENERIC
MODEL AIRBUS A320-200 AIRCRAFT] WITH
MANUFACTURER’S SERIAL NUMBER 4741

CONTENTS

Clause	  	Page	 	
			
1.	 	Definitions and Interpretation	  	 	1	  	
			
2.	 	Agreement to Lease	  	 	1	  	
			
3.	 	Representations and Warranties	  	 	4	  	
			
4.	 	Delivery and Acceptance	  	 	9	  	
			
5.	 	Payments	  	 	11	  	
			
6.	 	Absolute and Unconditional Obligations	  	 	16	  	
			
7.	 	Lessor’s Obligations	  	 	17	  	
			
8.	 	Information	  	 	19	  	
			
9.	 	Control of the Aircraft	  	 	21	  	
			
10.	 	Engines and Parts	  	 	23	  	
			
11.	 	Registration, Certification, Filing	  	 	27	  	
			
12.	 	Title Protection and Operation	  	 	30	  	
			
13.	 	Technical	  	 	33	  	
			
14.	 	Indemnities	  	 	35	  	
			
15.	 	Total Loss	  	 	44	  	
			
16.	 	Requisition	  	 	46	  	
			
17.	 	Insurance	  	 	47	  	
			
18.	 	Return of the Aircraft	  	 	50	  	
			
19.	 	Events of Default	  	 	51	  	
			
20.	 	Remedies	  	 	58	  	
			
21.	 	Illegality	  	 	63	  	
			
22.	 	Disclaimer	  	 	64	  	
			
23.	 	Assignment and Transfer	  	 	66	  	
			
24.	 	Miscellaneous	  	 	72	  	
			
25.	 	Law	  	 	75	  	
			
26.	 	Confidentiality	  	 	78	  	
			
27.	 	True Lease	  	 	79	  	
			
28.	 	[Intentionally Left Blank]	  	 	79	  	
			
29.	 	Time is of the Essence	  	 	79	  	
			
30.	 	Counterpart	  	 	79	  	
			
31.	 	Rights of Third Parties	  	 	80	  	
			
32.	 	Survival	  	 	80	  	
			
33.	 	No Brokers	  	 	80	  	
 
- i -

							
			
34.	 	Statements of Owner Trustee	  	 	80	  	
			
35.	 	Know Your Customer/OFAC Compliance	  	 	81	  	
			
36.	 	USA Patriot Act and Other Information:	  	 	82	  	
		
Schedule 1 Definitions and Interpretation	  	 	83	  	
		
Part A Definitions	  	 	83	  	
		
Part B Interpretation	  	 	101	  	
		
Schedule 2 Aircraft Particulars	  	 	102	  	
		
Schedule 3 Conditions Precedent	  	 	103	  	
		
Part A Lessee Conditions Precedent	  	 	103	  	
		
Part B Lessor Conditions Precedent	  	 	109	  	
		
Schedule 4 Aircraft Specification and Deliver	  	 	110	  	
		
Part A-1 Aircraft Specification	  	 	110	  	
		
Part B Delivery Procedure	  	 	120	  	
		
Part C Delivery Condition	  	 	121	  	
		
Schedule 5 Form of Acceptance Certificate	  	 	122	  	
		
Schedule 6 Payment	  	 	125	  	
		
Part A Rent	  	 	125	  	
		
Part B Maintenance Payments	  	 	126	  	
		
Part C End of Lease Maintenance Payment Adjustments	  	 	133	  	
		
Part D Other Economic Terms	  	 	134	  	
		
Part E Airworthiness Directive Cost Sharing Formula	  	 	135	  	
		
Schedule 6 [To Be Intentionally Left Blank in the FAA-Filed Version]	  	 	136	  	
		
Schedule 7 Reporting & Notice	  	 	137	  	
		
Part A Form of Technical Report	  	 	137	  	
		
Part B Notices	  	 	141	  	
		
Schedule 8 Insurance Requirements	  	 	142	  	
		
Schedule 9 Redelivery	  	 	147	  	
		
Part A Redelivery Procedure	  	 	147	  	
		
Part B Redelivery Condition	  	 	149	  	
		
Schedule 10 Form of Notice and Acknowledgement	  	 	155	  	
		
Schedule 11 Subleasing Requirements	  	 	166	  	
		
Schedule 12 List of Agreed Modification for FAA Registration	  	 	171	  	
 
- ii -

AIRCRAFT OPERATING LEASE AGREEMENT (MSN 4741)
THIS AGREEMENT is made as of April 13, 2011
BETWEEN
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , a national banking association organized and existing under the laws of the United States, whose address and principal place of business is at 299 South Main Street, 12 th Floor, Salt Lake City, Utah 84111, United States of America, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, as defined below (the “ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. , a company ( sociedad anónima promotora de inversión de capital variable ) incorporated under the laws of México, whose registered office is at Prolongación Paseo de la Reforma 490, 1 er piso, Col. Santa Fe Peña Blanca, 01210 México, D.F.,] México (the “ Lessee ”).	
IT IS AGREED:
 
1.	DEFINITIONS AND INTERPRETATION	
In this Agreement capitalised words and expressions have the meanings set out in Part A of Schedule 1 ( Definitions and interpretation ). The rules of interpretation and construction set out in Part B of Schedule 1 ( Definitions and interpretation ) shall apply to this Agreement.
 
2.	AGREEMENT TO LEASE	
 
2.1	Lease	
Subject to the terms of this Agreement, the Lessor agrees to lease the Aircraft to the Lessee and the Lessee agrees to take the Aircraft on lease for the Lease Period. The Lessee shall have the option to renew the leasing of the Aircraft hereunder pursuant to, and subject to the terms and conditions of, Clause 2.6, for a Renewal Lease Term. This Agreement is effective on the date that it is signed but the Lessor will have no obligation to deliver the Aircraft to the Lessee unless the Lessee has performed all the actions and the Lessor has received each of the documents and evidence listed in Part A of Schedule 3 ( Conditions precedent ) in a form and substance satisfactory to the Lessor and the Owner Participant on or before the Scheduled Delivery Date unless deferred by the Lessor and the Owner Participant in their absolute discretion.
 
2.2	No Default	
The Lessor will not have to deliver the Aircraft to the Lessee if, on the Scheduled Delivery Date, a Default has occurred and is continuing or would occur as a result of Delivery.
 
- 1 -

2.3	Lessee’s obligations	
The Lessor will not be responsible for any delay in Delivery if the Lessee fails to satisfy all its obligations listed in Part A of Schedule 3 ( Conditions precedent ) on the required date.
 
2.4	Deferral of conditions precedent	
If the Lessor delivers the Aircraft to the Lessee even though it has not received all the documents and evidence referred to in Clause 2.1 ( Lease ) on or prior to the date specified, the Lessor may defer any of the obligations of the Lessee listed in Schedule 3 ( Conditions precedent ) on specific conditions and at the Lessor’s and the Owner Participant’s sole discretion.
 
2.5	Waiver of Default	
The Lessor reserves all of its rights under this Agreement and pursuant to all Applicable Regulations in connection with any Event of Default even if it delivers the Aircraft to the Lessee whilst a Default is continuing.
 
2.6	Renewal Option	
 
 	2.6.1	Renewal Notice	
 
 	(a)	At least eighteen (18) months prior to the Scheduled Expiry Date, the Lessee may provide notice to the Lessor that the Lessee will extend the leasing of the Aircraft for a Renewal Lease Term (a “ Renewal Notice ”).	
 
 	(b)	Notwithstanding anything to the contrary in this Agreement or any other Transaction Document:	
 
 	(i)	No Renewal Notice shall be binding on the Lessor or oblige the Lessor to extend the leasing of the Aircraft hereunder for a Renewal Lease Term, and shall be considered not to have been given, if the Renewal Notice is received after the date eighteen (18) months prior to the Scheduled Expiry Date or if any Default shall have occurred and be continuing (y) on and as of the date of any such notice, which Default shall not have been subsequently cured or (z) on the date of the commencement of the Renewal Lease Term, and the occurrence of an Event of Default shall automatically terminate the Lessee’s rights hereunder to extend the Lease Period (but not its obligations hereunder if a Lease Amendment, as provided in Clause 2.6.2(a) below, for such extension has been executed).	
 
 	(ii)	A Renewal Notice shall be irrevocable and shall constitute an unconditional obligation of the Lessee and the Lessor to extend the leasing of the Aircraft hereunder for the Renewal Lease Term in accordance with the terms hereof and contained in any Lease Amendment contemplated under Clause 2.6.2(a) below.	
 
- 2 -

 	2.6.2	Renewal Rent and Documentation	
 
 	(a)	Upon receipt of the Renewal Notice, as provided in Clause 2.6.1 ( Renewal Notice ) above and provided no Default has occurred and is continuing, the Lessee and the Owner Participant shall enter into good faith negotiations, but otherwise with the right to act in their sole and absolute discretion, with respect to the amount to be paid by the Lessee as Rent during the Renewal Lease Term. If the amount of the Rent is agreed between the Lessee and the Owner Participant within sixty (60) days of the receipt of the Renewal Notice, such agreement of the Lessee and the Owner Participant shall be documented in a Lease Amendment within a further period of thirty (30) days, which subject to sub-clause (c) below, shall be in form and substance reasonably acceptable to the Lessee and the Owner Participant. Thereupon, each party hereto shall promptly execute and deliver to the other party such Lease Amendment and provide (i) written evidence of appropriate corporate action authorizing the execution, delivery and performance of such Lease Amendment, (ii) evidence of the issue of each approval, license and consent which may be required in connection with such Lease Amendment, and (iii) such other documents and filings as either of the parties (acting reasonably) may request.	
 
 	(b)	If the Lessee and the Owner Participant are unable to reach an agreement as to the amount to be paid by the Lessee as Rent in respect of the Renewal Lease Term within the period permitted under Clause 2.6.2(a), the option to extend the leasing of the Aircraft provided herein shall be deemed to be terminated and the Renewal Notice shall be considered not to have been given and the Lessee’s rights under this Clause 2.6 shall be deemed to be terminated.	
 
 	(c)	Except for the Rent payable during the Renewal Lease Term as provided above, all terms and conditions of this Agreement during the Base Lease Term shall remain in full force and effect during the Renewal Lease Term.	
 
2.7	Parent Guaranty	
The Lessee will cause the Parent to execute and deliver the Parent Guaranty on or before the date of this Agreement.
 
- 3 -

3.	REPRESENTATIONS AND WARRANTIES	
 
3.1	Representations and warranties	
Each party is making the statements in this Clause 3.1 in order to induce the other party to enter into this Agreement. Each party understands that the statements it makes in this Agreement must be true, when this Agreement is signed and on the Delivery Date. Pursuant to the Owner Participant Letter Agreement, the Owner Participant hereby makes the representations and warranties set out in this Clause 3.1 and the Clause 3.4. On this basis each party represents and warrants to the other that:
 
 	3.1.1	in the case of the Lessor, it is a national banking association, validly existing and in good standing under the laws of the United States of America, and since the date of its formation, it has been maintained in accordance with all Applicable Regulations; in the case of the Lessee, it is a sociedad anónima promotora de inversión de capital variable duly organized, validly existing and in good standing under the laws of the State of Incorporation and since the date of its organization, it has been maintained in accordance with all Applicable Regulations and in the case of the Owner Participant, it is a company incorporated under the laws of Cayman Islands, and since the date of its incorporation, it has been maintained in accordance with all Applicable Regulations;	
 
 	3.1.2	in entering into each Transaction Document to which it is a party and performing its obligations thereunder, it does not contravene, nor in respect of any Transaction Document to which it is a party which is entered into after the date of this Agreement will it contravene, any Applicable Regulations;	
 
 	3.1.3	all necessary corporate actions have been taken and all authorisations have been obtained for the execution by it of each Transaction Document to which it is a party and the performance of its obligations thereunder, it has the power to enter into the Transaction Documents to which it is a party and perform its obligations thereunder and this Agreement has been duly executed and delivered by it; and	
 
 	3.1.4	its obligations under each Transaction Document to which it is a party are, or if any Transaction Document to which it is a party is entered into after the date of this Agreement will be, from the date of execution of such Transaction Document to which it is a party, legal, valid and binding, enforceable against it in accordance with their respective terms (except as enforceability may be limited by (i) applicable bankruptcy, insolvency, examination, reorganization, concurso mercantil or other similar law, and (ii) general principles of equity).	
 
3.2	Lessee’s representations and warranties	
The Lessee further represents and warrants to the Lessor that:
 
 	3.2.1	no Default has occurred and is continuing or would occur as a result of Delivery;	
 
- 4 -

 	3.2.2	it is not involved in any litigation or other dispute nor is there (to its knowledge) any claim pending against it, the outcome of which could have a material adverse effect on its financial condition or its ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party;	
 
 	3.2.3	the Original Financial Statements and its most recently prepared management financial statements (subject to normal year-end adjustments) (which have been delivered to the Lessor):	
 
 	(a)	have been prepared in accordance with Mexican GAAP;	
 
 	(b)	fairly represent the financial condition of the Lessee as at the date to which they were drawn up; and	
 
 	(c)	do not contain any untrue statement or omit to state a material fact which could make them misleading;	
 
 	3.2.4	since the preparation of the financial statements referred to in (c) above, there has been no material adverse change in the Lessee’s ability to perform its obligations under this Agreement or its financial condition;	
 
 	3.2.5	all licences, authorisations, consents, registrations and notifications required in connection with the entry into, performance, validity and enforceability of, the Transaction Documents and the transactions contemplated therein, have been (or will promptly following the Delivery Date be) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect;	
 
 	3.2.6	it has paid or caused to be paid, all fees or charges assessed and due against it by any airport or air navigation authority assessing landing or navigation fees or charges in respect of aircraft operated by the Lessee the failure of which would have a material adverse effect on the Lessee’s ability to perform its obligations hereunder or which could reasonably be expected to result in a material risk of the sale, forfeiture, detention, impoundment or other loss of the Aircraft or the use thereof;	
 
 	3.2.7	it does not hold a contract or other obligation to operate the Aircraft to or from an Excluded Country;	
 
 	3.2.8	where the State of Registration is México, except for (1) the Lessor’s (or the Security Trustee’s) taking possession in New York of the tangible chattel paper original copy of this Agreement (insofar as this Agreement constitutes tangible chattel paper (as such term is defined in the UCC)), (2) the registration of a certified Spanish language translation of this Agreement and the Bill of Sale and the registration of the Aircraft with the Aviation Authority, (3) the effectuation of the Pre-Delivery Authorizations and Filings and the Post-Delivery Authorizations and Filings and the filing of any relevant document evidencing the interests of the Security Trustee (if any) with the DGAC, (4) the recordation of the International Interests arising hereunder and thereunder (if any) with the International Registry	
 
- 5 -

 	pursuant to the Cape Town Convention, (5) the issuance of a permanent certificate of airworthiness, (6) the placing on the Aircraft and on each Engine of the plates containing the legends referred to in Clause 12.1.1), (7) the import of the Aircraft into México and the payment of any applicable import duties related to such import and (8) the filing of UCC 1 financing statements in the District of Columbia, it is not necessary under the laws of the State of New York, the State of Registration, the State of Incorporation or the Habitual Base in order to:	
 
 	(a)	ensure the legality, validity, effectiveness, enforceability or admissibility in evidence; or	
 
 	(b)	establish, protect or perfect the rights and interests of the Lessor, the Owner and any Security Trustee in the Aircraft or any Engine or Part,	
that this Agreement or any other Transaction Document or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in the United States of America, the State of Incorporation, the Habitual Base or, if different, the State of Registration or that any other action be taken or that any stamp, registration or similar tax or charge be paid in the United States of America, the State of Incorporation, the Habitual Base or, if different, the State of Registration on or in relation to any of the Transaction Documents:
 
 	3.2.9	where the State of Registration is the United States of America, except for (1) the Lessor’s (or the Security Trustee’s) taking possession in New York of the tangible chattel paper original copy of this Agreement (insofar as this Agreement constitutes tangible chattel paper (as such term is defined in the UCC)), (2) the registration of the Aircraft with the FAA, (3) the filing of the FAA Filed Documents and any relevant document evidencing the interests of the Security Trustee (if any) with the FAA, (4) the recordation of the International Interests arising hereunder and thereunder (if any) with the International Registry pursuant to the Cape Town Convention, (5) the issuance of a permanent certificate of airworthiness, (6) the placing on the Aircraft and on each Engine of the plates containing the legends referred to in Clause 12.1.1) and (7) the filing of UCC-1 financing statements in the District of Columbia, it is not necessary under the laws of the United States of America, the State of Incorporation or the Habitual Base in order to:	
 
 	(a)	ensure the legality, validity, effectiveness, enforceability or admissibility in evidence; or	
 
 	(b)	establish, protect or (if possible under applicable law) perfect the rights and interests of the Lessor, the Owner Participant and any Security Trustee in the Aircraft or any Engine or Part,	
that this Agreement or any other Transaction Document or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in the United States of America, the State of Incorporation or the Habitual Base or that any other action be taken or that any stamp, registration or similar tax or charge be paid in the United States of America, the State of Incorporation or the Habitual Base on or in relation to any of the Transaction Documents;
 
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 	3.2.10	it is subject to civil commercial law with respect to its obligations under the Transaction Documents to which it is a party, neither it nor any of its assets is entitled to any right of immunity and the entry into and performance by it of the Transaction Documents to which it is a party constitute private and commercial acts;	
 
 	3.2.11	the choice by the Lessee of New York law to govern the Transaction Documents to which it is a party and the submission by the Lessee to the jurisdiction of the New York courts specified in Clause 25.1, hereof is valid and binding on the Lessee;	
 
 	3.2.12	its obligations under the Transaction Documents to which it is a party rank at least pari passu with all of its present and future unsecured and unsubordinated obligations (including contingent obligations) with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract;	
 
 	3.2.13	it has duly appointed and registered with the International Registry an administrator to act on behalf of the Lessee as a transacting user entity;	
 
 	3.2.14	it holds all licenses, certificates, permits and approvals necessary for the conduct of its business as a passenger commercial carrier and to operate on the routes that it currently operates and for the performance of its obligations under this Agreement and each other Transaction Document to which it is a party;	
 
 	3.2.15	its “location”, for purposes of Section 9-307 of the UCC, is the District of Columbia and the full and correct legal name and mailing address of the Lessee as of the Delivery Date are correctly set forth in Part B of Schedule 7 ( Reporting & notices ), and the Lessee is situated for the purposes of Article 3(1) of the Cape Town Convention in a “contracting state”, as such term is defined in the Cape Town Convention.	
 
 	3.2.16	no approvals, licenses or consents are necessary to enable the Lessor to export the Aircraft from the Habitual Base and to deregister the Aircraft from the State of Registration upon the termination of the leasing of the Aircraft under this Agreement.	
 
 	3.2.17	all required import licenses and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with or shall be obtained or complied with within the timeline provided in the definition of Post-Delivery Authorizations and Filings and all Taxes payable in connection with the import of the Aircraft into the Habitual Base have been paid or shall be paid when due;	
 
 	3.2.18	the Lessee is not required to deduct, from any payment hereunder, any Taxes other than applicable withholding tax at a rate, as of the date of this Agreement, of 5% (which may effectively be reduced by a Tax credit	
 
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 	available to the Lessee equivalent to 80% of the applicable withholding Tax and, without limiting Clause 3.1.4 the provisions of Clause 14.2 and Clause 14.4 requiring the Lessee to “gross-up” the Lessor for such withholding Tax and any applicable rate after the date of this Agreement, are legal, valid, binding and enforceable obligations of the Lessee in accordance with their terms.	
 
3.3	The Lessor’s representations and warranties	
The Lessor further represents and warrants that:
 
 	3.3.1	it is a Citizen of the United States:	
 
 	3.3.2	it is subject to civil commercial law with respect to its obligations under the Transaction Documents to which it is a party, neither it nor any of its assets is entitled to any right of immunity and the entry into and performance by it of the Transaction Documents to which it is a party constitute private and commercial acts;	
 
 	3.3.3	the choice by the Lessor of New York law to govern the Transaction Documents to which it is a party and the submission by the Lessor to the jurisdiction of the New York courts is valid and binding on the Lessor; and	
 
 	3.3.4	the Lessor has not received a notice from the Seller claiming that a “default” has occurred and is continuing under the Purchase Agreement and does not reasonably believe that it is in “default” under the Purchase Agreement.	
 
3.4	Owners Participant’s representation and warranties	
The Owner Participant further represents and warrants that:
 
 	3.4.1	it is an Irish resident corporation for Irish Tax purposes (by virtue of being managed and controlled in Ireland;	
 
 	3.4.2	it is entitled to treaty benefits under the Mexico-Ireland income Tax treaty;	
 
 	3.4.3	its or the OP Guarantor’s tangible net worth is at least *****.	
 
3.5	Survival of representations and warranties	
The representations and warranties given by the Lessor in Clauses 3.1 ( Representations and warranties ) and Clause 3.3 ( Lessor’s representations and warranties ) shall survive the execution of this Agreement and shall be deemed to be repeated by the Lessor on the Delivery Date.
 
3.6	Repetition of representations and warranties	
The representations and warranties given by the Lessee in Clause 3.1 ( Representations and warranties ) and Clause 3.2 ( Lessee’s representations and warranties ) will survive the execution of this Agreement and shall be deemed repeated by the Lessee on the Delivery Date.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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4.	DELIVERY AND ACCEPTANCE	
 
4.1	Delivery and Acceptance	
 
 	4.1.1	The Lessee acknowledges that the condition of the Aircraft on delivery to the Lessee, and its compliance or otherwise with the Purchase Agreement shall be the sole responsibility of the Lessee, and that the Lessor has agreed to purchase the Aircraft pursuant to the Purchase Agreement at the request of the Lessee and for the sole purpose of the Lessor leasing the Aircraft to the Lessee pursuant to this Agreement. Accordingly the Lessee acknowledges that neither the Lessor nor the Owner Participant shall have any responsibility whatsoever in respect of the condition of the Aircraft at Delivery and that the Lessee shall not be entitled for any reason whatsoever to refuse to accept the leasing of the Aircraft under this Agreement once the Lessor is obliged to accept title to the Aircraft under the Purchase Agreement. The Lessor hereby agrees that provided that the Lessee has executed the Indemnity Letter, the Lessee shall have a right to inspect the Aircraft on or prior to Delivery and to attend and observe the acceptance tests of the Aircraft on or prior to the Delivery, in each case pursuant to the Delegation Letter. Neither the Lessor nor the Owner Participant shall be liable for any Loss resulting directly or indirectly from any defect or alleged defect in the Aircraft or any failure or alleged failure of the Aircraft to comply with the Purchase Agreement.	
 
 	4.1.2	The Aircraft shall be new ex factory, as described in more detail in Part A of Schedule 4 provided that the Lessee hereby agrees that to the extent the modifications listed in Part A-2 of Schedule 4 ( Aircraft specifications and delivery ) have not been completed by the Manufacturer on or before the Delivery Date (such non-completed modifications hereinafter referred to as the “ Post Delivery Modifications ”), such Post Delivery Modifications shall be completed by the Lessee after Delivery but on or before the C Check Date and the Lessee shall be solely responsible for effecting and managing the implementation of such Post Delivery Modifications. Except as expressly set forth in the next sentence of this Clause 4.1.2, it is hereby agreed that that neither the Lessor nor the Owner Participant shall bear any risk or liability therewith. Notwithstanding the foregoing, the Lessor hereby agrees to pay the cost for installation of such Post Delivery Modifications, which shall be deemed to be a part of the FAA Modification Amount and shall be paid in accordance with the provisions of Clause 11.1.4. For the avoidance of doubt, it is hereby agreed that the Lessee shall not be entitled to terminate this Agreement or reject the Aircraft when it is offered for Delivery solely because of the non-completion of any Post Delivery Modifications on or before the Delivery Date.	
 
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4.2	Acceptance Certificate	
The Lessee shall evidence its acceptance of the Aircraft by executing the Acceptance Certificate and delivering it to the Lessor.
 
4.3	Risk	
As from Delivery, the Lessee shall bear all risks associated with any loss of or damage to the Aircraft until Redelivery, except solely during any periods during which the Lessor or the Security Trustee (or any person lawfully claiming by or through either) is in possession of the Aircraft as a result of a breach of the Lessor’s or the Security Trustee’s covenant of quiet enjoyment as contained herein in the case of the Lessor or in case of the Security Trustee, as contained in the quiet enjoyment letter provided by the Security Trustee, substantially in the form attached as Annex 2 of Schedule 10 ( Confirmation of quiet enjoyment ). In recognition of the foregoing, and notwithstanding the Lessor’s rights under this Agreement, including under Clause 13.4, the Lessee acknowledges and agrees that, as between the Lessor and the Lessee, the Lessee (a) is in sole operational control of the Aircraft and is in the business of operating commercial aircraft, (b) it is solely responsible for the condition, maintenance and repair of the Aircraft in accordance with this Agreement and for the security of the Aircraft and compliance with all requirements of the Applicable Regulations, and (c) has not relied upon, and shall not rely upon, any statement, act, or omission of the Lessor in connection with the use, operation, maintenance, repair, condition or security of the Aircraft.
 
4.4	Failure to take Delivery	
 
 	4.4.1	If the Lessee fails:	
 
 	(a)	to comply with the conditions contained in this Agreement so as to allow Delivery to take place immediately following tender of delivery of the Aircraft by the Manufacturer pursuant to the Purchase Agreement; or	
 
 	(b)	to take delivery of the Aircraft when tendered for delivery by the Lessor in accordance with the terms of the Transaction Documents,	
the Lessee will indemnify the Lessor for all costs and expenses, including Break Costs, incurred by the Lessor as a result of such failure.
 
 	4.4.2	The Lessor shall provide to the Lessee reasonable evidence of such costs and expenses.	
 
4.5	Delayed Delivery	
It is intended that Delivery shall occur on the Scheduled Delivery Date. If Delivery takes place after the Scheduled Delivery Date or not at all:
 
 	4.5.1	the Lessor will not be responsible for any Losses, including loss of profit, costs and expenses, the Lessee suffers resulting from Delivery taking place after the Scheduled Delivery Date or non delivery of the Aircraft, except for direct out-of-pocket costs incurred by the Lessee which result from a breach	
 
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 	by “buyer” of its obligations under the Purchase Agreement that does not relate to or arise out of any breach by the Lessee of its obligations hereunder or any other Transaction Document (including any failure on the part of the Lessee to fulfill any condition precedent to the leasing of the Aircraft hereunder or under the Indemnity Letter);	
 
 	4.5.2	the Lessee will not, except in the circumstances described in Clause 4.5.3 below, be entitled to terminate this Agreement or to reject the Aircraft when it is offered for Delivery on the grounds of the delay; and	
 
 	4.5.3	if for any reason other than the Lessee’s failure to satisfy any of the conditions precedents provided in Part A of Schedule 3 ( Conditions precedent ) or an Event of Default hereunder, the Aircraft has not been offered for Delivery in the condition required hereunder by the Cut-Off Date and the parties have not otherwise agreed in writing to extend the Cut-Off Date, either party may terminate this Agreement by serving notice to the other party within ten (10) days of such Cut-Off Date, at which time the obligations of each party will end from the date of that notice and the Lessor will have no liability to the Lessee arising from the non-delivery of the Aircraft except that, provided no Event of Default has occurred, the Lessor will promptly repay to the Lessee an amount equal to the Security Deposit and any Rent paid in advance by the Lessee under this Agreement and return to the Lessee, or agree to the cancellation, of any Security Deposit Letter of Credit.	
 
5.	PAYMENTS	
 
5.1	Rent and Maintenance Payments	
 
 	5.1.1	On each Rent Date (commencing on the Delivery Date) the Lessee will pay Rent to the Lessor as set out in Part A of Schedule 6.	
 
 	5.1.2	The Lessee will pay to the Lessor the Maintenance Payment amounts as set out in, and at the times specified in, Part B of Schedule 6 ( Payments ). The Lessee acknowledges and agrees that Maintenance Payments are additional payments for the leasing of the Aircraft and not cash collateral or other collateral security for the Lessee’s maintenance obligations under this Agreement. Once paid, all Maintenance Payment amounts are the sole and exclusive property of the Lessor and may be commingled by it with its and its Affiliates’ other funds, with no interest payable with respect thereto. Maintenance Payments shall otherwise be treated for all purposes of this Agreement as Rent, and the Lessor shall have the same remedies in respect of the Lessee’s failure to pay Maintenance Payment amounts when due as the Lessor has for the Lessee’s failure to pay Rent when due. For purposes of clarification, the foregoing shall not derogate from the Lessor’s independent, separate obligations to make a Maintenance Contribution.	
 
 	5.1.3	Without limiting or prejudicing Clause 5.1.2 above in any way, if and to the extent that in any jurisdiction any Maintenance Payment amounts paid by the Lessee, or any obligation of the Lessor or the Owner Participant, to make a Maintenance Contribution in respect thereof, is held to be the	
 
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 	property of the Lessee, or if it is so determined that all or any part of the Maintenance Payment amounts or the Maintenance Contribution obligations are a debt owed to the Lessee or that the Lessee shall have any interest in all or any part of the Maintenance Payment amounts or the Maintenance Contribution obligations, to the fullest extent permitted by any Applicable Regulations and by way of continuing security, the Lessee hereby charges and grants a security interest in the Maintenance Payments and all rights of the Lessee to payment of any Maintenance Contributions hereunder, and any proceeds thereof, general intangibles relating thereto, the debt represented thereby and/or any and all interest of the Lessee therein to the Lessor as secured party for itself under this Agreement and for its Affiliates under the Other Agreements, as applicable, and for the Owner Participant and its Affiliates by way of a first priority security interest, pledge and a first fixed charge as security for the Lessee’s and the Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by the Lessor or any of its Affiliates in respect of which the Lessee or any the Lessee Affiliate is obligated under this Agreement or any Other Agreement). The Lessee acknowledges and agrees that the Lessor has complete dominion and control over the foregoing collateral (within the meaning of the UCC) and possession thereof. The Lessee hereby agrees that the Lessee shall at its own expense take all such steps and enter into any additional documents and instruments necessary or reasonably requested by the Lessor and the Owner Participant, including the Mexican Pledge, to evidence, create or perfect the Lessor’s rights in the Maintenance Payment amounts and the Maintenance Contribution obligations granted hereunder.	
 
5.2	Rent Periods	
The first Rent Period will commence on the Delivery Date and each subsequent Rent Period will commence on the numerically corresponding day in the next calendar month throughout the Lease Period. Each Rent Period will end on the day preceding the numerically corresponding day in the next month, except that:
 
 	5.2.1	if there is no such numerically corresponding day in that month, it will end on the last day of that month; and	
 
 	5.2.2	if a Rent Period would otherwise overrun the Expiry Date, it will end on the Expiry Date.	
 
5.3	Security Deposit	
 
 	5.3.1	The Lessee shall pay to the Lessor, the Security Deposit no later than two (2) Business Days prior to the Delivery Date.	
 
 	5.3.2	The Lessor (or its designee) may co-mingle the Security Deposit with its own funds, the Lessor will not hold such funds as agent or on trust for the Lessee or in any similar fiduciary capacity, the Lessee may not create security over such funds. The Security Deposit (and any interest accrued thereon) will be the sole and absolute property of the Lessor and the Lessor	
 
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 	will only be obligated to pay amounts in respect thereof to the Lessee as set out in this Agreement. Except as otherwise expressly provided in this Agreement, the Security Deposit shall be non-refundable. Notwithstanding the above and without prejudice to the rights and interests of the Lessor in the Security Deposit, if and to the extent the Security Deposit, under any Applicable Regulations or otherwise, is determined to be the property of the Lessee, the Lessee hereby grants a security interest in and first fixed charge and pledge of the Security Deposit to the Lessor as security for the Lessee’s and the Lessee Affiliates’ obligations under this Agreement and all Other Agreements (including any and all Losses suffered or incurred by the Lessor or any of its Affiliates in respect of which the Lessee or any Lessee Affiliate is obligated under this Agreement or any Other Agreement). The Lessee acknowledges and agrees that the Lessor has complete dominion and control over the foregoing collateral and the collateral under Clause 5.3.7 (within the meaning of the UCC) and possession thereof. The Lessee hereby agrees that the Lessee shall at its own expense take all such steps and enter into any additional documents and instruments necessary or reasonably requested by the Lessor and the Owner Participant, including the Mexican Pledge, to evidence, create or perfect the Lessor’s rights in the Security Deposit granted hereunder or the Lessor’s rights in any amount drawn under any Security Deposit Letter of Credit, granted pursuant to Clause 5.3.7.	
 
 	5.3.3	The Lessor agrees that the Lessee may, by irrevocable notice in writing to the Lessor, from time to time, elect to substitute for the Security Deposit described in Clause 5.3.1, a letter of credit in form and substance satisfactory to the Lessor, the Owner Participant and any Security Trustee (the “ Security Deposit Letter of Credit ”). The Security Deposit Letter of Credit shall:	
 
 	(a)	be issued or confirmed and payable by a Permitted LC Bank and be denominated in and payable in Dollars in an amount of not less than the Security Deposit;	
 
 	(b)	name the Lessor or its nominee (including the Servicer) as the beneficiary;	
 
 	(c)	be a first demand, transferable, irrevocable and absolute payment undertaking of the Permitted LC Bank payable on written demand (without proof or evidence of entitlement, loss or cause required), presentable for payment at sight, by facsimile at an office of the Permitted LC Bank in New York or such other office of the Permitted LC Bank as the Lessor shall agree (in its reasonable discretion); and	
 
 	(d)	have a non-cancellable term up to the date falling thirty (30) days after the Expiry Date provided that such Security Deposit Letter of Credit may have a term expiring prior to such date provided that the Lessee shall either:	
 
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 	(i)	renew, extend or cause to be reissued such Security Deposit Letter of Credit not later than thirty (30) days prior to its expiry; or	
 
 	(ii)	substitute such Security Deposit Letter of Credit with a cash Security Deposit no later than thirty (30) days prior to its expiry,	
and, if such Security Deposit Letter of Credit is not so renewed, extended, reissued or substituted with cash by such time, an Event of Default shall be deemed to have occurred and be continuing and the Lessor shall be entitled to draw on all or any part of such Security Deposit Letter of Credit).
 
 	5.3.4	If the Lessee at any time elects, pursuant to Clause 5.3.3, to provide the Lessor with a Security Deposit Letter of Credit and the Lessee does so provide the Lessor with a Security Deposit Letter of Credit complying with the terms of Clause 5.3.3, then on receipt and acceptance of such Security Deposit Letter of Credit, the Lessor shall, promptly upon the cure of any Default and, provided no other Default has occurred and is then continuing, return to the Lessee the balance of the Security Deposit paid in cash pursuant to Clause 5.3.1 after such receipt and acceptance.	
 
 	5.3.5	If at any time:	
 
 	(a)	any events of the nature specified in Clauses 19.1.14 ( Insolvency ) or 19.1.15 ( Insolvency proceedings ) occur with respect to the bank issuing or confirming the Security Deposit Letter of Credit; or	
 
 	(b)	the rating of the bank issuing or confirming the Security Deposit Letter of Credit falls below the Minimum LC Rating; or	
 
 	(c)	a Security Deposit Letter of Credit ceases to constitute the legal, valid and binding obligations of the issuer thereof enforceable in accordance with its terms, or amounts payable under a Security Deposit Letter of Credit shall cease to be freely available for drawing,	
the Lessee shall promptly, and in any event within ten (10) Business Days, either:
 
 	(i)	provide the Lessor with a replacement Security Deposit Letter of Credit issued or confirmed, as the case may be, by a Permitted LC Bank that meets the requirements of Clause 5.3.3; or	
 
 	(ii)	provide a cash security deposit in the amount of the Security Deposit,	
in which event, upon receipt of such cash security deposit or replacement Security Deposit Letter of Credit, the Lessor will, promptly upon the cure of any Default and provided that no other Default has occurred and is then continuing, cause to be returned to the Lessee the original Security Deposit Letter of Credit.
 
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 	5.3.6	The Lessor may assign or pledge its interest in or otherwise create a Security Interest in respect of the Security Deposit or a Security Deposit Letter of Credit to the Security Trustee or to any permitted transferee or assignee (and the Lessee shall, at the cost and expense of the Lessor, perform such acts and deliver such instruments as the Lessor may reasonably request in order to carry out and effect any such assignment or pledge or Security Interest).	
 
 	5.3.7	Any amount drawn by the Lessor under a Security Deposit Letter of Credit shall, pending application and/or set-off in the manner contemplated hereunder be the absolute and unconditional property of the Lessor (but to the extent that in any jurisdiction any such amounts would be held to be the property of the Lessee, the Lessee hereby grants to and confers upon the Lessor, a Security Interest in the same to secure performance of its obligations and its Affiliates’ under this Agreement, the other Transaction Documents and any Other Agreement).	
 
 	5.3.8	In addition to all the rights and remedies under this Agreement, the Transaction Documents, any Other Agreement or under any Applicable Regulations, the Lessor may (in its absolute discretion) immediately or whenever it chooses, following the occurrence and during the continuation of any Event of Default, set-off against, use, retain, or apply all or any part of the Security Deposit, and/or draw under any Security Deposit Letter of Credit and apply the amounts drawn, in or towards the payment or discharge of any obligation owed by the Lessee or any Affiliate of the Lessee to the Lessor, the Owner Participant or any Affiliate of the Lessor or the Owner Participant under this Agreement, the other Transaction Documents or any Other Agreement, in such order as the Lessor chooses. The Lessor shall promptly notify the Lessee in writing following the exercise of any of its rights under this Clause 5.3.8 (but a failure to notify shall not affect the effectiveness of the set-off).	
 
 	5.3.9	If as a result of the exercise by the Lessor of its rights under this Agreement the Security Deposit is reduced or the Security Deposit Letter of Credit is drawn, the Lessee will either pay to the Lessor on demand an amount equal to such reduction or drawing, or, if applicable, otherwise procures the reinstatement of the full face value of the Security Deposit Letter of Credit, as applicable. Application of the Security Deposit or a drawing under the Security Deposit Letter of Credit shall not be deemed to cure any Event of Default otherwise cured by the application of such monies, unless and until the Lessee pays to the Lessor, within five (5) Business Days, an amount equal to the reduction in the Security Deposit, or the drawing under the Security Deposit Letter of Credit (or otherwise procures the reinstatement of the full face value of the Security Deposit Letter of Credit).	
 
 	5.3.10	Without prejudice to its rights under this Clause 5.3, the Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c.(b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law, including to the effect that the Lessor hold the Security Deposit in a separate interest bearing account do not apply.	
 
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 	5.3.11	Subject to no Default having occurred and then continuing under this Agreement, the Lessor will return an amount equal to any balance of the Security Deposit (without interest) not applied in accordance with this Agreement or, as the case may be, shall cause to be returned any Security Deposit Letter of Credit, within ten (10) Business Days following the Expiry Date.	
 
5.4	Manner of payments	
All sums payable by the Lessee to the Lessor in the performance of its obligations under the Transaction Documents will be paid on or prior to the due date, in Dollars and in immediately available funds not later than 12.00 p.m. (Noon) New York City time for value on the due date of payment into the account in New York provided in the Notice and Acknowledgment (or such other account as the Lessor may notify in writing to the Lessee at least three (3) Business Days prior to the date such payment is due). The Lessee must make reference to the Aircraft in the payment instructions to enable the payment to be more easily traced and any payment will only be considered as having been paid when it has been credited to the account of the Lessor.
 
5.5	Late payments	
If the Lessee fails to pay any amount payable under this Agreement or any other Transaction Document on the due date, it will pay default interest on the overdue amount at the Default Rate from (and including) the due date to (but excluding) the date on which such overdue amount is paid in full. Default interest will be payable at intervals as demanded by the Lessor (irrespective of whether the Lessor obtains a court judgment for sums owed to it in the meantime; provided, however, that there shall be no duplication of payment of Default interest) and any interest which remains unpaid after such interval shall thereafter bear interest at the Default Rate. All default interest will be calculated on the basis of the actual number of days elapsed and a 360 day year.
 
5.6	Payments on Business Days	
If any payment of Rent, Security Deposit, Maintenance Payments or Agreed Value under this Agreement would otherwise be due on a non-Business Day, it will be due on the preceding Business Day. If any other payment falls due on a non-Business Day, it will be due on the succeeding Business Day.
 
6.	ABSOLUTE AND UNCONDITIONAL OBLIGATIONS	
The Lessee’s obligations to pay Rent, Agreed Value, Maintenance Payments and any other amounts due under this Agreement and to perform all of its other obligations punctually under this Agreement and any other Transaction Document, are absolute and unconditional and shall be paid and performed in full when due without reduction, deduction, set-off, recoupment, claim or counter claim, and the Lessor shall have all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided therein; and the Lessee may not regard its obligations as
 
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cancelled, terminated, suspended, reduced or altered (and waives to the greatest extent permitted by the Applicable Regulations any rights which it may have at any time to cancel, terminate, suspend, reduce or alter such obligations), no matter what happens and no matter how fundamental or unforeseen the event and regardless of any partial or total failure of consideration, including without limitation:
 
 	6.1.1	any unavailability of the Aircraft for any reason, including, but not limited to, any defect in the airworthiness, merchantability, satisfactory condition, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft; or	
 
 	6.1.2	the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction; or	
 
 	6.1.3	the Total Loss (except as provided herein upon payment of the Agreed Value and all other amounts then due and payable hereunder) of, or any damage to, the Aircraft, Airframe or any Engine; or	
 
 	6.1.4	any set off, counterclaim, recoupment, reduction, reimbursement, withholding defence or other rights which the Lessee may have against the Lessor, the Owner Participant, any Financier or any other person, including without limitation, rights pursuant to Sections 2A-401 or 2A-402 of the UCC; or	
 
 	6.1.5	any failure or delay on the part of any party hereto in performing or complying with any of the terms or conditions of this Agreement or any other Transaction Document; or	
 
 	6.1.6	any insolvency, bankruptcy, administration, reorganisation, concurso mercantil , arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against the Owner, the Lessor, any Financier or the Lessee; or	
 
 	6.1.7	any lack of due authorisation of, or other defect in, this Agreement or any other Transaction Document.	
Nothing in this Clause 6 will be construed to extinguish or otherwise limit the Lessee’s right to institute legal proceedings against the Lessor or any other person in the event of the Lessor’s or such other person’s breach of its obligations under this Agreement or the other Transaction Documents.
 
7.	LESSOR’S OBLIGATIONS	
 
7.1	Quiet enjoyment	
 
 	(a)	So long as no Event of Default has occurred and is continuing, the Lessor will not interfere, and will not permit any person lawfully claiming by or through the Lessor to interfere, with the Lessee’s quiet use, enjoyment and possession of the Aircraft during the Lease Period. The exercise by the Lessor of its rights under or in connection with this Agreement or any other Transaction Document, in each case in accordance with the relevant provisions hereof or thereof (as applicable), will not constitute such interference.	
 
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 	(b)	The Lessor shall cause the Owner Participant to provide the Lessee on or prior to Delivery a letter of quiet enjoyment containing a covenant of quiet enjoyment substantially as provided by the Lessor in Clause 7.1(a) above and, if applicable, the Security Trustee to provide the Lessee on or prior to Delivery a letter of quiet enjoyment substantially in the form of Annex 2 of Schedule 10 ( Confirmation of quiet enjoyment ) hereto.	
 
7.2	Warranties	
 
 	7.2.1	The Lessee shall, during the Lease Period, enjoy the benefit of the Airframe Warranties and the Engine Warranties pursuant to the terms of the Airframe Warranties Agreement and the Engine Warranties Agreement respectively.	
 
 	7.2.2	Save as provided below, during the Lease Period, the Lessor will allow the Lessee to have the use and benefit of any other existing and transferable manufacturer, vendor or supplier warranties relating to the Aircraft in each case subject to any necessary consents of the relevant manufacturer, vendor or supplier. The Lessor agrees to take such steps at the cost and expense of the Lessee, as are reasonably necessary to enable the Lessee to receive the benefits of such warranties. The Lessee will have the benefit of any such warranties subject to any terms that the relevant manufacturer, vendor or supplier may require and the Lessee will enter into such agreements as may be reasonably required with such relevant manufacturer, vendor or supplier. The Lessee will diligently and promptly pursue and valid claims that it may have against any such relevant manufacturer, vendor or supplier and will give the Lessor prompt written notice of the same.	
 
 	7.2.3	The Lessee shall give the Lessor prompt written notice of any warranty claim in respect of the Aircraft in excess of ***** which is settled with the Lessee on the basis of a total or partial cash payment other than cash payments constituting reimbursements for work performed on the Aircraft by or at the direction of the Lessee. Any cash payments to the Lessee in respect of warranty claims concerning the Aircraft which are not applied to repair or remedy of defects in the Aircraft and which are not in respect of compensation for the condition of or loss of use of the Aircraft, an Engine or Part during the Lease Period due to a defect covered by such warranty, shall be for the Lessor’s account and shall to the extent received by the Lessee be promptly paid by the Lessee to the Lessor.	
 
 	7.2.4	The Lessee agrees promptly to apply any proceeds of any claims other than to the extent that they relate to compensation for the condition or loss of use of the Aircraft during the Lease Period or are to be paid to the Lessor in accordance with Clause 7.2.3 under any warranty relating to the Aircraft, any Engine or any Part received by the Lessee to remedy the defect, if any, in the Aircraft, any Engine or any Part giving rise to such claim or toward reimbursement for such remedy with any excess to be retained by the Lessee.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	7.2.5	Following an Event of Default which has occurred and is continuing, the Lessee’s authorization to exercise the Lessor’s warranty rights shall automatically terminate, and the Lessor may immediately:	
 
 	(a)	retain for its own account any such proceeds previously paid to the Lessor which would have been remitted to the Lessee under this Clause 7.2 in the absence of such Event of Default;	
 
 	(b)	cause any proceeds of any pending claims to be paid to the Lessor, rather than to the Lessee; and	
 
 	(c)	recover from the Lessee the proceeds of any such claims previously paid to the Lessee to the extent that such claims relate to any defect in the Aircraft, any Engine or any Part not rectified by the Lessee in accordance with the requirements of this Agreement and applicable manufacturer’s guidelines before such Event of Default;	
provided that, upon cure of any such Event(s) of Default, the Lessor shall promptly pay or return such proceeds to the Lessee.
 
 	7.2.6	On the Expiry Date, the Lessee’s rights under the warranties referred to in Clause 7.2.2 (excluding the Lessee’s rights to receive payments thereunder for claims previously made by the Lessee) shall immediately revert to the Lessor.	
 
 	7.2.7	On the Expiry Date, the Lessee will at its own cost and expense, take all steps necessary to ensure that the benefit of any unexpired warranties relating to the Aircraft shall vest in the Lessor pursuant to the terms of the applicable warranties assignment.	
 
7.3	Maintenance Contributions	
Notwithstanding references herein to the non-refundability of Maintenance Payment amounts, the Lessor shall pay Maintenance Contributions in respect of the Aircraft as a separate obligation not constituting a refund of Maintenance Payment amounts. Such Maintenance Contributions shall be calculated and paid in accordance with the relevant provisions of Part B of Schedule 6 ( Maintenance Payments ).
 
8.	INFORMATION	
 
8.1	Financial information	
During the Lease Period, the Lessee will deliver to the Lessor and any Security Trustee:
 
 	8.1.1	as soon as available, but, in any event, no later than one hundred twenty (120) days after the last day of each financial year of the Lessee or the Parent, as the case may be, the audited financial statements of the Lessee and the Parent, in each case prepared in accordance with IFRS or Mexican GAAP, as the Lessee may elect (provided that once the Lessee has elected to use IFRS, such election shall be final and the Lessee shall not then revert to Mexican GAAP to fulfill its reporting obligations hereunder) as of such	
 
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 	day and the audited consolidated profit and loss statement of the Lessee and the Parent for the year ending on such day (each may be in Spanish and in Mexican currency so long as such financial statements and the auditor’s opinion thereon shall be provided in English and in Dollars within forty-five (45) days thereof) certified by a reputable firm of accountants. The financial statements will fairly and accurately present the financial position of the Lessee and the Parent, as the case may be, as at the end of such financial period and the results of its operations for such financial period and will disclose all material liabilities (contingent or otherwise) of the Lessee and the Parent, as the case may be;	
 
 	8.1.2	copies of every report, notice or like document generally issued by the Lessee or the Parent to its creditors at the time that it is so issued;	
 
 	8.1.3	within forty-five (45) days after the end of each three (3) month period, the consolidated management prepared financial statements (in Dollars) of the Lessee and the Parent in English prepared for the most recent previous financial quarter certified by a qualified financial officer of the Lessee and the Parent, as the case may be, as being true and correct;	
 
 	8.1.4	to the extent that the Lessee and the Parent are permitted by the Applicable Regulations and are not prohibited therefrom by confidentiality undertakings to third parties, with reasonable promptness, such other financial, operational and other information and data with respect to the Lessee and the Parent as the Lessor and the Owner Participant may from time to time reasonably request in the context of the transactions contemplated hereby; and	
 
 	8.1.5	the Lessee’s obligations hereunder shall be deemed satisfied should the Lessee or the Parent publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by the Lessee hereunder. The Lessee shall notify the Lessor in writing of the website address.	
 
8.2	Technical Information	
Throughout the Lease Period, the Lessee will:
 
 	8.2.1	provide the Lessor within ten (10) days after the end of each calendar month, a technical report for the Aircraft in the form of Schedule 7 ( Reporting and notices ) which must have all requested information completed (to the extent applicable) and show whether an Engine, APU or Landing Gear has been removed (specifying the reason for any such removal) and the details of the airframe on which it has been installed or the actual physical location if not so installed and the address and contact details of the maintenance organisation responsible for the safekeeping and/or maintenance of such Engine, APU or Landing Gear;	
 
 	8.2.2	give the Lessor at least forty-five (45) days written notice as to the time and location of all major checks and all scheduled Qualifying Work;	
 
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 	8.2.3	give notification to the Lessor, as soon as reasonably possible, of any unscheduled Qualifying Work; and	
 
 	8.2.4	provide to the Lessor all information the Lessor may reasonably request from time to time regarding the maintenance of the Aircraft.	
 
8.3	Other information	
Throughout the Lease Period, the Lessee shall:
 
 	8.3.1	notify the Lessor and any Security Trustee as soon as practicable of any loss, theft, damage or destruction to the Aircraft, any Engine or any Part, or any modification to the Aircraft if the potential cost may exceed *****;	
 
 	8.3.2	notify the Lessor and any Security Trustee of any Default promptly after it occurs; and	
 
 	8.3.3	provide the Lessor, the Owner Participant and any Security Trustee, on request (not more frequently than twice annually), with evidence that all Taxes and charges incurred and payable by the Lessee in connection with the Aircraft and its operation and which, if unpaid, could give rise to Security Interest on the Aircraft, have been paid in full.	
 
9.	CONTROL OF THE AIRCRAFT	
 
9.1	No disposal or parting of possession	
The Lessee shall not, and shall not attempt or hold itself out as having any power to, sell, charge, lease or otherwise dispose of or part with possession of the Aircraft or any part thereof except as expressly provided herein.
 
9.2	Subleasing	
The Lessee will not, without the prior written consent (not to be unreasonably withheld) of the Lessor and any Security Trustee (and then subject to such terms and conditions as the Lessor or any Security Trustee may reasonably stipulate), sublease, or otherwise part with possession of the Aircraft, except that the Lessee may:
 
 	9.2.1	charter or wet lease the Aircraft in accordance with Clause 9.3 ( Charter or wet leasing );	
 
 	9.2.2	sublease the Aircraft in accordance with Clause 9.4 ( Permitted subleasing );	
 
 	9.2.3	part with possession of the Aircraft, an Engine or Part to the relevant manufacturer for testing or similar purposes or to the Maintenance Performer for service, repair, maintenance or overhaul work or alterations, modifications or additions to the extent required or permitted by this Agreement; and	
 
 	9.2.4	part with possession with respect to an Engine or Part as permitted by Clause 10 ( Engines and Parts ).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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9.3	Charter or wet leasing	
The Lessee shall be permitted to charter or wet lease the Aircraft in the ordinary course of the Lessee’s business on a short-term basis (and in any event for a period no greater than twelve (12) months and so that it does not extend beyond the Expiry Date) provided such charter or wet lease constitutes an arrangement whereby the Lessee agrees to furnish the Aircraft to a third party pursuant to which the Aircraft:
 
 	9.3.1	shall be operated solely by cockpit personnel under the operational control of the Lessee, possessing all current certificates and licences that are required by Applicable Regulations;	
 
 	9.3.2	shall remain subject to the insurance coverage required under Clause 17 ( Insurance );	
 
 	9.3.3	shall be maintained and operated by the Lessee in accordance with this Agreement;	
 
 	9.3.4	shall not be operated to or from an Excluded Country; and	
 
 	9.3.5	shall remain registered in the State of Registration,	
and provided always that such arrangement is expressly subordinated to this Agreement, the rights of the Lessor and any Security Trustee under this Agreement (and, if applicable, to the rights of any Security Trustee as assignee of the Lessor) and to the Aircraft. The Lessee’s obligations under this Agreement shall continue in full force and effect notwithstanding any such charter or wet lease and in no event shall any chartering or wet leasing of the Aircraft extend beyond the Expiry Date.
 
9.4	Permitted subleasing	
The Lessee may sublease the Aircraft to a Permitted Sublessee (such sublease, a “ Permitted Sublease ”) without the prior consent of the Lessor and any Security Trustee, upon and subject to the terms and conditions set out in Schedule 11.
 
9.5	Continuing obligations	
The Lessee acknowledges and agrees that, notwithstanding any sublease of the Aircraft, the Lessee will remain fully liable to perform its obligations under this Agreement and the other Transaction Documents to which it is a party but to the extent the relevant Permitted Sublessee properly performs an obligation under the sublease, the Lessor agrees that such performance shall be regarded as discharging (to such extent) any corresponding obligations of the Lessee under this Agreement.
 
9.6	Sublease Event of Default	
If an event of default (howsoever described) is continuing under a sublease whilst a Permitted Sublessee is in possession of the Aircraft, the Lessee shall promptly notify the Lessor and the Security Trustee of the steps that it is proposing to take to enforce the terms of the sublease or recover possession of the Aircraft.
 
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10.	ENGINES AND PARTS	
 
10.1	With The Lessor’s Consent	
Save as permitted in this Clause 10, the Lessee must not replace any Part or install any Engine or Part on any other aircraft whether by way of permanent title swap or for operational short term exchange without first obtaining the Lessor’s prior written consent, which consent shall not be unreasonably withheld.
 
10.2	Without The Lessor’s Consent	
 
 	10.2.1	The Lessee may permanently replace Parts (but not Engine modules without the Lessor’s prior written consent if:	
 
 	(a)	the replacement part was manufactured by the same manufacturer of the Part it replaces;	
 
 	(b)	the replacement part is in as good an operating condition, has as much useful life available until the next scheduled maintenance procedure, has the correct effectivity in accordance with the latest revision of the Manufacturer’s illustrated parts catalogue, is of the same or a more advanced make and model, is of the same interchangeable and mixable modification status as the replaced Part and is of equivalent or greater value and utility as the replaced Part;	
 
 	(c)	the replacement part must not have elapsed Flight Hours, Cycles or calendar time (whichever is limiting) in excess of 110 percent (110%) of the Flight Hours, Cycles or calendar time (whichever is limiting) for the Aircraft as a whole;	
 
 	(d)	the replacement part is not a PMA Part;	
 
 	(e)	the Lessee has full details in accordance with the FAA Regulations as to the source and maintenance records of the replacement part and in the case of life limited parts that a complete service-history is available (including traceability “back to birth”);	
 
 	(f)	the Part to be replaced is unserviceable, the servicing of the same is not cost effective, or the replacement part is required in order for the Aircraft to meet the redelivery condition or is an improvement to the Aircraft permitted in accordance with the terms of this Agreement;	
 
 	(g)	the replacement part is free and clear of all Security Interests (other than Permitted Security Interests); and	
 
 	(h)	the replacement part meets all Applicable Regulations.	
 
 	10.2.2	Upon the replacement part being installed on the Aircraft, it shall automatically and without further act:	
 
 	(a)	become and remain the property of the Lessor free from Security Interests (other than Permitted Security Interests) and without any	
 
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 	obligation and/or liability on the part of the Lessor, the Owner Participant and/or the Financiers, whether as to Taxes and/or otherwise; and	
 
 	(b)	become subject to this Agreement and the Financing Documents as if it had been attached to the Aircraft on Delivery.	
 
 	10.2.3	If the Lessor so requests, the Lessee shall, at its own cost, provide such documentary evidence and take such other action as the Lessor may reasonably request to evidence the transfer to the Lessor of full ownership of the replacement part (including the provision if requested by the Lessor or the Owner Participant of bills of sale, to the extent available).	
 
10.3	Temporary Installation of Parts on other aircraft	
A Part may be temporarily installed on an aircraft owned by or leased to the Lessee without the Lessor’s, the Owner Participant’s or any Security Trustee’s prior written consent if:
 
 	10.3.1	no Event of Default has occurred and is continuing;	
 
 	10.3.2	the Lessee has operational control over that aircraft and the terms of this Agreement will continue to apply to the Part as if it were still installed on the Aircraft;	
 
 	10.3.3	the Lessor retains title to the Part concerned;	
 
 	10.3.4	the Part does not become subject to a Security Interest (other than a Permitted Security Interest); and	
 
 	10.3.5	that Part is removed from that aircraft and reinstalled on the Aircraft as soon as practicable but no later than the earlier to occur of (A) the next “C” check or equivalent and (B) the Expiry Date.	
 
10.4	Temporary Installation of Parts	
If necessary to avoid the grounding of the Aircraft, the Lessee may temporarily install any part on the Aircraft by way of short term replacement without the Lessor’s prior written consent if:
 
 	10.4.1	no Event of Default has occurred and is continuing;	
 
 	10.4.2	as soon as practicable after installation of the part on the Aircraft but, in any event, no later than the earlier to occur of (A) the next “C” check or equivalent and (B) the Expiry Date, the Lessee removes that part and replaces it with the Part replaced by it or, in the case of a part, by a part complying with Clause 10.2.1 above; and	
 
 	10.4.3	the Insurance for the Aircraft is not affected.	
 
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10.5	Removal and Interchange of Engines	
 
 	10.5.1	The Lessee will ensure that no Engine is removed from the Airframe unless it is promptly replaced on the Airframe by an engine complying with the following conditions:	
 
 	(a)	it is of the same manufacture and model as the original Engine (or an improved model), it has not been involved in any incident or accident as defined in the FARs, it is certified in accordance with FAA rules and regulations for installation on the Aircraft, it is suitable for installation and use on the Airframe without impairing the value or utility of the Airframe and it is compatible with the remaining installed Engine, it has equivalent interchangeable modification status, equivalent or lower time elapsed since Engine Performance Restoration, equivalent or lower time Life Limited Parts life used and equivalent remaining warranty status as the original Engine, and it is of an equivalent or greater value and utility as the original Engine;	
 
 	(b)	the Lessee has full details of its source and maintenance records with back-to-birth traceability of LLPs;	
 
 	(c)	the original Engine is reinstalled on the Airframe on or prior to the Expiry Date unless replaced with a Replacement Engine as required hereunder; and	
 
 	(d)	the Insurance for the Aircraft is not affected.	
provided that if an engine complying with the conditions in Clause 10.5(a) is not available at the time and/or place where the engine is required to be installed on the Airframe and it would result in unreasonable disruption of the operation of the Aircraft and/or business of the Lessee to ground the Aircraft until an engine complying with Clause 10.5(a) becomes available for installation on the Aircraft, the Lessee may install any suitable engine on the Airframe by way of temporary replacement. As soon as reasonably practicable after the installation of the engine but in any event no later than one twenty days (120) days after such installation, the Lessee shall remove the engine and replace it with the original Engine or an engine complying with Clause 10.5.1(a) and (b), subject always to the requirement of Clause 10.5.1(c) and Clause 10.5.1(d).
 
 	10.5.2	The Lessee will:	
 
 	(a)	ensure that any Engine which is not installed on the Airframe if unserviceable is promptly delivered to the Maintenance Performer for repair with such repairs to be completed prior to the Expiry Date;	
 
 	(b)	ensure that any Engine which is not installed on the Airframe (or another aircraft permitted by Clause 10.5.3) is properly and safely stored and insured in accordance with this Agreement, free from Security Interests (other than Permitted Security Interests); and	
 
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 	(c)	on request by the Lessor, procure that any person to whom possession of an Engine is given acknowledges in writing to the Lessor and any Security Trustee, that it will respect the interests of the Lessor as owner and lessor of the Engine and any Financiers under any Security Interest (or assignment) in respect of the Engine and will not seek to exercise any rights whatsoever in relation to such Engine.	
 
 	10.5.3	The Lessee will be permitted, if no Default has occurred and is continuing, to install any Engine on an airframe owned by or leased to the Lessee and under the operational control of the Lessee, provided that :	
 
 	(a)	neither:	
 
 	(i)	the provisions of any Applicable Regulations; nor	
 
 	(ii)	the terms of any lease or other agreement or Security Interest to which such airframe is subject,	
prohibit such installation or will have the effect at any time of divesting or impairing the title and interests of the Lessor or owner of the Engine and/or any Financiers under any Security Interest or assignment in respect of the Engine;
 
 	(b)	the terms of any lease, agreement or Security Interest to which such airframe is subject contain an undertaking for the benefit of the Lessor that neither the relevant lessor, owner, seller or the holder of any Security Interest under such lease, agreement or Security Interest nor their successors or assigns will acquire, as against the Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe;	
 
 	(c)	the Lessor retains title to the Engine;	
 
 	(d)	the other aircraft is being operated at the same or lower engine thrust;	
 
 	(e)	the terms of this Agreement (including Insurance) will continue to apply to the Engine as if it were still installed on the Airframe; and	
 
 	(f)	such Engine is reinstalled on the Airframe on or prior to the Expiry Date.	
The Lessor hereby agrees for the benefit of any lessor or holder of any Security Interest in an engine which may be installed on the Airframe during the Lease Period, that the Lessor shall not, and shall not permit any person lawfully claiming by or through it to, acquire, as against such lessor or holder of such Security Interest in the engine, any right, title, or interest in such engine as a result of such engine being installed on the Airframe.
 
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11.	REGISTRATION, CERTIFICATION, FILING	
 
11.1	Registration with Aviation Authority	
 
 	11.1.1	Subject to Clause 11.1.3, during the period the Aircraft is to be registered with the DGAC, the Lessee will, save as provided in Schedule 11 ( Subleasing requirements ), register and maintain the registration of the Aircraft with the Aviation Authority throughout the Lease Period on terms satisfactory to the Lessor. The Lessor agrees to provide such assistance, at the Lessee’s cost and risk, as may be reasonably requested by the Lessee in order to enable the Lessee to comply with its obligations hereunder. Except as expressly provided in Clauses 11.1.3 and 11.1.4 below, all expenses associated with such registration shall be at the sole cost, expense and responsibility of the Lessee.	
 
 	11.1.2	Throughout the Lease Period, the Lessee will to the maximum extent within its control or will assist the Lessor in:	
 
 	(a)	if allowed under Applicable Regulations at its own cost, (i) record on the relevant register of the Aviation Authority that the Lessor is the owner of the Aircraft and, if applicable, that the Financiers have a Security Interest in the Aircraft and (ii) file this Agreement, the Bill of Sale and each Financing Document (or their main details) on that register;	
 
 	(b)	at the Lessee’s cost, make any changes to any registration or filing that may be necessary or advisable to take account of any change in any modification to the Aircraft (such as the permanent replacement of any Engine or Part) in accordance with this Agreement or of any change in any Applicable Regulations; and	
 
 	(c)	at the Lessor’s request and cost, make any changes to any registration or filing that may be necessary or advisable to take account of any change in the ownership of the Aircraft or the interests of any Financier in the Aircraft, save where such change in registration of filing is required as a result of a change of law which adversely effects the interests of the Lessor or the Financiers in the State of Registration or the Habitual Base, if different, in which case such change shall be made at the Lessee’s cost.	
 
 	11.1.3	From the Delivery Date until the FAA Registration Date, the Aircraft shall be registered with the DGAC. On and from the FAA Registration Date and for the duration of the remainder of the Lease Period, the Lessee shall, to the maximum extent within its control, cause the Aircraft to be registered with the FAA, which registration shall show the Lessor as the owner and the Lessee as the lessee and shall be effected at the Lessee’s expense except as expressly provided in Clause 11.1.4 below. The foregoing obligation of the Lessee to register and maintain the registration of the Aircraft with the FAA is subject to the Lessor being and remaining eligible for such registration and to the Lessor renewing the registration of the Aircraft with the FAA as contemplated by 14 C.F.R § 47. The Owner Participant shall at	
 
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 	its own cost and expense instruct the Lessor to take such actions, including execution and delivery of documents to the Lessee, that are required by the FAA to maintain (including renew) the registration of the Aircraft and the Lessor hereby agrees to take all such actions as are so instructed by the Owner Participant in connection with the foregoing. The Lessee shall cooperate with the Lessor at the Lessee’s expense to take such action as the Lessor may reasonably request in connection with such registration or any renewal thereof, provided that the Lessor shall be responsible for all of the Lessor’s legal costs in connection with such registration including all costs associated with perfecting and recording the Lessor’s, the Owner Participant’s and any Financier’s interests in the Aircraft and/or the Agreement, including the cost of the legal opinions of the FAA Counsel. The Lessee shall be solely responsible for and shall obtain at its cost a delegation for the DGAC of airworthiness surveillance of the Aircraft from the FAA. For the avoidance of doubt, except as expressly provided in Clause 11.1.4 below, it is hereby agreed that the Lessee shall be solely responsible for all costs and expenses associated with the registration of the Aircraft with the DGAC and with the perfecting and recording of the Lessor’s interests in the Aircraft and/or this Agreement, where the State of Registration of the Aircraft is México, including the cost of all legal opinions in form and substance and from counsel reasonably acceptable to the Lessor, while the Lessor shall be solely responsible for all costs and expenses associated with registering, perfecting and recording any Financier’s interest in the Aircraft and/or this Agreement.	
 
 	11.1.4	The Lessee shall be solely responsible for managing the implementation of the technical and specification modifications (as listed in Schedule 12) required to make the Aircraft eligible to be registered with the FAA and neither the Lessor nor the Owner Participant shall bear any risk or liability therewith. Notwithstanding the foregoing, once the Aircraft is registered with the FAA and the installation of the requisite modifications completed, the Lessor hereby agrees to pay the FAA Modification Amount promptly to the Lessee upon receipt of (i) evidence of payment of invoices for such modifications by the Maintenance Performer in accordance with the specifications therefor, and (ii) evidence reasonably satisfactory to the Lessor of the absence of any Security Interests on the Aircraft in favour of the Maintenance Performer or any supplier that could reasonably be expected to be claimed by the Maintenance Performer or such supplier in connection with such modifications, provided that in no event shall the Lessor be liable to, and nothing contained in this provision shall be construed as creating an obligation on part of the Lessor to, pay any amount in excess of the Lessor Cap. It is hereby agreed that any such excess amount shall be paid solely by the Lessee.	
 
11.2	Certification	
The Lessee will take all actions needed to ensure that a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) is maintained in full effect throughout the Lease Period.
 
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11.3	Filings and Documentary Taxes	
The Lessee will file or record each of the Transaction Documents and Financing Documents which can be filed or recorded by the Lessee and will pay any stamp duty or other documentary Taxes to which any of the Transaction Documents or Financing Documents are or may become subject, in each case punctually and as may be necessary or considered by the Lessor to be advisable under Applicable Regulations.
 
11.4	Cape Town Convention	
 
 	11.4.1	If the state in which the Lessee and/or a Permitted Sublessee is situated, the location of the Lessee’s principal place of business or registered office, or the State of Registration has, or at any time brings into force, any legislative or other provisions giving effect to the Cape Town Convention and/or the Protocol, the Lessee (i) shall immediately after Delivery, register any international interests with the International Registry with respect to the Aircraft and/or any Engine and constituted by this Agreement and/or the Transaction Documents, and (ii) at the Lessee’s cost and expense shall from time to time, do or cause to be done (and hereby consents to the Lessor, the Owner Participant or any Financier doing or causing to be done) any and all acts and things capable of being done by the Lessee which may be required or desirable (in the discretion of the Lessor (acting reasonably)) to ensure that the Lessee, the Lessor and any Financier has the full benefit of the Cape Town Convention and/or the Protocol in connection with the Aircraft and any Engine, including:	
 
 	(a)	any matters connected with registering, perfecting, and/or preserving and/or enhancing any international interest(s) vested in the Lessor, as owner and lessor, or any Financier with respect to the Aircraft and/or any Engine and constituted by this Agreement;	
 
 	(b)	constituting any international interest(s) to be vested in the Lessor or any Financier with respect to the Aircraft and/or any Engine in connection with this Agreement;	
 
 	(c)	entry into agreements (subordination or otherwise) to protect the priority of any international interest(s) referred to in the foregoing paragraph;	
 
 	(d)	agreeing to, consenting to and acknowledging any assignment the Lessor enters, or has entered, into with a Financier in connection with this Agreement;	
 
 	(e)	excluding in writing the application of any provisions of the Cap Town Convention and/or Protocol that the Lessor may deem desirable in connection with the foregoing;	
 
 	(f)	executing and delivering an irrevocable de-registration and export request authorisation in the form set out in the annex to the Cape Town Convention; and	
 
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 	(g)	not registering, or consenting to the registration of, any conflicting interests (whether or not taking priority over the Lessor’s or any Financier’s international interests) at the International Registry without the Lessor’s prior written consent.	
 
 	11.4.2	The Lessee and the Lessor agree that for all purposes of the Cape Town Convention, this Agreement upon its execution will constitute a separate International Interest with respect to the Airframe and/or each Engine identified in the Acceptance Certificate, (ii) the Airframe and each Engine constitute Aircraft Objects and (iii) this Agreement will constitute an agreement for the registration of the Airframe and Engines identified in the Acceptance Certificate.	
In this Clause 11.4 ( Cape Town Convention ), the following terms have the following meanings:
 
 	(a)	international interest has the meaning as expressed in the Cape Town Convention and Protocol;	
 
 	(b)	state has the meaning as expressed in the Cape Town Convention and Protocol; and	
 
 	(c)	state in which the Lessee is situated shall be construed in accordance with the expression “state in which the debtor is situated in” as set out in Article 4 of the Cape Town Convention.	
 
11.5	Status	
The Lessee shall at all times during the Lease Period maintain (i) its business as a commercial scheduled air carrier; (ii) its corporate existence; and (iii) in full force and effect, all consents, licenses, authorizations, approvals, permits, rights and privileges material to its business or to the performance of its obligations under this Agreement.
 
11.6	Lessee’s Jurisdiction	
The Lessee is a “foreign air carrier” within the meaning of the Act, it will cause itself to be located (as defined in Section 9-307 of the UCC) in the District of Columbia, and will not change such location except upon thirty (30) days prior written notice to the contrary to the Lessor.
 
12.	TITLE PROTECTION AND OPERATION	
 
12.1	Title protection	
Throughout the Lease Period, the Lessee will at its own cost:
 
 	12.1.1	install (or cause Manufacturer to install) and maintain fireproof nameplates not less than 7 cm by 5 cm affixed in a prominent position in the cockpit or cabin of the Aircraft and on each Engine showing the following:	
“THIS [AIRCRAFT][ENGINE] IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, [IS
 
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MORTGAGED TO [THE BANK OF NEW YORK MELLON, AS SECURITY TRUSTEE]] AND IS LEASED TO CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., [AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE BANK OF NEW YORK MELLON, AS SECURITY TRUSTEE]];
or such other legend as the Lessor may notify the Lessee from time to time; provided that, any cost related to a change in the nameplates not requested by the Lessee, or not following and resulting from an Event of Default which is continuing, shall be borne by the Lessor.
 
 	12.1.2	take all reasonable steps to ensure that the interests of the Lessor and the Security Trustee in the Aircraft are, when appropriate, made known to third parties dealing with the Lessee and the Aircraft and the Lessee will not:	
 
 	(a)	hold itself out as owner of the Aircraft or as having an economic interest in it equivalent to ownership (whether to obtain a particular Tax treatment or otherwise);	
 
 	(b)	take or refrain from any action if, as a consequence, the rights of the Lessor, as lessor and owner, or any Financier in the Aircraft or the validity, enforceability or priority of this Agreement or of any of the Financing Documents could be jeopardised;	
 
 	(c)	represent to third parties that the Lessor, the Owner Participant or any Financier is in any way associated with or responsible for the business activities of the Lessee; or	
 
 	(d)	pledge the credit of the Lessor, the Owner Participant or any Financier.	
 
12.2	Lessee’s rights	
The Lessee shall have no right, title or interest in or to any part of the Aircraft except the rights expressly set out in this Agreement, it being expressly agreed and acknowledged by the Lessee that title to the Aircraft shall remain vested in the Lessor subject to any Security Interests arising under the Financing Documents in favour of the Financiers (or any of them).
 
12.3	Operation	
 
 	12.3.1	The Lessee will not use or operate the Aircraft, or permit the Aircraft to be used or operated:	
 
 	(a)	in breach of any Applicable Regulations, or, knowingly, in a manner causing the Lessor, the Owner Participant or any Financier to be in breach of any Applicable Regulations;	
 
 	(b)	for any purpose for which the Aircraft was not designed or contrary to any recommendation of the Manufacturer, the Engine Manufacturer or the Aviation Authority;	
 
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 	(c)	for the carriage of:	
 
 	(i)	whole animals living or dead except in the cargo compartment according to IATA regulations (except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal);	
 
 	(ii)	acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assembles or components, except as permitted for passenger aircraft under the “Restriction of Goods” schedule issued by IATA from time to time and provided that all the requirements for packaging or otherwise contained therein are fulfilled;	
 
 	(iii)	any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or	
 
 	(iv)	any illegal items or substance;	
 
 	12.3.2	in any circumstances or geographic location where the Aircraft is not covered by the Insurance; or	
 
 	12.3.3	or permit the Aircraft to proceed to, or remain at, or operate from any location in an Excluded Country;	
 
 	12.3.4	for any training, demonstration or test flights but the Lessee will be entitled to undertake flight deck crew training of its own personnel (or any Permitted Sublessee’s personnel pursuant to a Permitted Sublease) provided that the use of the Aircraft for such crew training is not disproportionate to the amount of such crew training on other aircraft of the same type as the Aircraft operated by the Lessee.	
 
 	12.3.5	The Lessee will:	
 
 	(a)	base the aircraft at the Habitual Base;	
 
 	(b)	use the Aircraft solely in commercial or other operations for which the Lessee is duly authorised by the Aviation Authority and Applicable Regulations;	
 
 	(c)	ensure that the crew and engineers employed by the Lessee in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licences required by the Aviation Authority and Applicable Regulations; and	
 
 	(d)	obtain and maintain in full force any certificates, licences, permits and authorisations for the time being required for the use and operation of the Aircraft and for the making of payments required by, and the compliance by the Lessee with its other obligations under, this Agreement.	
 
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12.4	Operational Costs	
The Lessee will pay or cause to be paid all costs of operating the Aircraft, and, to the extent failure to pay the same could result in a Security Interest upon the Aircraft, all other aircraft operated by the Lessee, including all air navigation charges (including, to the extent applicable, Eurocontrol charges and the equivalent), licenses and other overflight and airport fees and charges and passenger Taxes when due.
 
13.	TECHNICAL	
 
13.1	Maintenance, overhaul and repair	
 
 	13.1.1	Throughout the Lease Period, the Lessee will at its own cost and provided it qualifies as a Maintenance Performer, maintain, overhaul and repair the Aircraft (or arrange for the Aircraft to be maintained, overhauled and repaired by a Maintenance Performer), so that:	
 
 	(a)	the Aircraft is kept safe for operation and airworthy in all respects in accordance with the requirements of the Aviation Authority and FAA Regulations and in as good operating condition and state of repair as on the Delivery Date (normal wear and tear excepted) and in compliance with all requirements of the FAA or EASA and the Aviation Authority;	
 
 	(b)	all maintenance is conducted in accordance with the Maintenance Programme by a Maintenance Performer; and	
 
 	(c)	the Aircraft is not discriminated against, in respect of modification status, maintenance or operation, as compared with any other aircraft of the same type in the Lessee’s fleet.	
 
 	13.1.2	No agreement relating to work done on the Aircraft may give the Maintenance Performer the right to hold the Aircraft in respect of work done on any other aircraft in the Lessee’s fleet.	
 
 	13.1.3	Any structural repairs required or allowed will be performed in accordance with the provisions of the most recent iteration of the Manufacturer’s structural repair manual applicable to the Aircraft or, if outside the scope of the such structural repair manual, in accordance with an FAA or EASA approved Manufacturer’s written instruction, and shall be permanent in nature. The Lessee will keep detailed records and associated maintenance data relating to such repairs in accordance with the requirements of the Aviation Authority and the FAA or EASA.	
 
13.2	Configuration	
The Lessee will not make any change to the configuration of the Aircraft other than those that may be required to comply with its obligations under Clause 13.5 ( Airworthiness Directives ) or, if the cost thereof exceeds *****, for which it has obtained the prior written consent of the Lessor. The Lessee will promptly report any change in configuration of the Aircraft to the Lessor. Notwithstanding the foregoing, the Lessor may require the Lessee to return the Aircraft hereunder in its original configuration.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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13.3	Aircraft Documents	
 
 	13.3.1	The Lessee will maintain the Aircraft Documents throughout the Lease Period:	
 
 	(a)	in the English language;	
 
 	(b)	in accordance with customary major international airline industry practice; and	
 
 	(c)	so as to comply with the requirements of the FAA, the Aviation Authority, all Applicable Regulations, the Maintenance Programme and the mandatory requirements of the original equipment manufacturer (as the case may be); and	
 
 	(d)	up to date to reflect the operation of the Aircraft and the current configuration of the Aircraft including all maintenance, repair and work performed and all “approved data” required by the FAA and the Aviation Authority.	
 
 	13.3.2	Except as required by applicable Regulation or the Manufacturer, the Maintenance Programme may not be changed without the prior written consent of the Lessor, except for any change which is more restrictive than the Manufacturer’s MPD.	
 
13.4	Inspection	
 
 	13.4.1	On request from the Lessor or the Owner Participant, the Lessee shall arrange that at any reasonable time during the Lease Period, the Lessor, the Owner Participant, any Financier and any prospective purchaser of the Aircraft or their authorized representatives may inspect the Aircraft and the Aircraft Documents and the Lessee shall provide reasonable assistance and co-operation in connection with such inspection (including facilitating access to the Aircraft and the Aircraft Documents) provided that, unless a Default and/or an Event of Default shall have occurred and be continuing, the Lessor shall give the Lessee reasonable notice of such inspection and shall ensure that such inspections shall be coordinated with the Lessee so as not to cause unreasonable interference with or delay to the Lessee’s operation of the Aircraft. The inspection of the Aircraft shall be limited to a visual, walk around inspection, which may include access to cargo bay areas, electronic bay, opening of Engine cooling and APU access panels as reasonably required by the inspecting person, and inspection of the Aircraft Records. The Lessee shall comply with the reasonable requests of the Lessor’s representatives during the course of an inspection including any request to open quick release panels or to travel on the flight deck of the Aircraft as an observer, subject to any Applicable Regulations or insurance restrictions. Any such inspection shall be conducted not more than once during any calendar year provided that while any Default and/or an Event	
 
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 	of Default has occurred and is continuing the number of inspections shall be unlimited and provided further that any follow-up inspection pursuant to Clause 13.4.2(ii) shall not be construed to be an exercise of the right of the inspection provided herein.	
 
 	13.4.2	The cost of conducting an inspection (including all reasonable out-of-pocket expenses) shall be borne by the Lessor unless: (i) an Event of Default has occurred and is continuing, in which case the cost shall be borne by the Lessee; or (ii) an inspection reveals that the Lessee has failed to comply in any material way with its obligations under this Agreement, in which case any follow-up inspection required to verify that remedial work has been completed will be at the Lessee’s cost.	
 
 	13.4.3	The Lessor, the Owner Participant and the Financier shall have no duty or obligation to inspect the Aircraft or arising out of such inspection and the Lessor, the Owner Participant and the Financier shall incur no liability as a result of exercise or non-exercise of any inspection rights in this Clause 13.4. In addition, any inspection of the Aircraft (including any Aircraft Documents) shall be solely for the Lessor’s, the Owner Participant’s or such Financier’s information and failure to notify the Lessee of any discrepancies thereafter shall not imply that the Lessee is in compliance with this Agreement, its Maintenance Programme or the Applicable Regulations.	
 
 	13.4.4	All repairs agreed at such inspection or required by this Agreement shall be made at the Lessee’s expense and shall be commenced and completed as soon as practicable after the date on which the Lessee receives notice from the Lessor or the Owner Participant requiring it to do so.	
 
 	13.4.5	The Lessee agrees that it will co-operate in all reasonable respects with the efforts of the Lessor to lease or sell the Aircraft (subject to the provisions of Clause 23 of this Agreement), including, without limitation, permitting potential lessees or purchasers to inspect the Aircraft and the Aircraft Documents provided that the same shall not interfere with the Lessee’s use or maintenance of the Aircraft or require the Lessee to incur out-of-pocket expenses for which it is not reimbursed by the Lessor.	
 
13.5	Airworthiness Directive	
The Lessee will incorporate in the Aircraft all Airworthiness Directives and mandatory Service Bulletins which apply to the Aircraft and which have a compliance date during the Lease Period or, to the extent the same exist as of the Expiry Date, which require compliance within one hundred and eighty (180) days after the Expiry Date.
 
14.	INDEMNITIES	
 
14.1	General Indemnity	
 
 	14.1.1	Subject to the exclusions set out in Clause 14.1.2, the Lessee shall immediately upon demand, indemnify and hold harmless each of the	
 
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 	Indemnitees against any and all Losses which an Indemnitee may suffer or incur, whether directly or indirectly (and regardless of when the same are suffered or incurred) as a result of or in connection with:	
 
 	(a)	the ownership, purchase, sale, control, management, service, maintenance, repair, overhaul, delivery, possession, transfer of title or possession, import, export, storage, modification, leasing, inspection, refurbishment, transportation, storing, testing, design, sub-leasing, pooling, wet-leasing, charter, interchange, replacement, condition, environmental damage, use, operation, registration or redelivery of the Aircraft, any Engine, any Part and/or which otherwise relate to the Aircraft whether or not such Losses may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of when the same arises or whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee;	
 
 	(b)	any act or omission which invalidates or which renders voidable any of the Insurances;	
 
 	(c)	preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft or in securing its release;	
 
 	(d)	any design, article or material in the Aircraft, any Engine or any Part or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right or a breach of any obligation of confidentiality owed to any person in respect of any of the matters referred to in this Clause 14.1.1;	
 
 	(e)	any latent or other defects or deficiencies therein, whether or not discoverable, known or unknown, apparent or concealed, exterior or interior;	
 
 	(f)	any breach by the Lessee of its obligations under the Transaction Documents; or	
 
 	(g)	any Security Interest (other than a Lessor Lien).	
Notwithstanding anything to the contrary herein, the foregoing shall not be construed as requiring the Lessee to indemnify the Indemnitees for the residual value of the Aircraft except to the extent provided here as a result of an Event of Default.
 
 	14.1.2	The Lessee will not be required to indemnify any Indemnitee under Clause 14.1.1 to the extent the Loss for which the indemnity claim is made:	
 
 	(a)	is caused by such Indemnitee’s fraud, wilful misconduct or Gross Negligence; or	
 
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 	(b)	is caused by a breach or default by such Indemnitee of its express obligations under a Transaction Document which does not result from any act or omission of any other person; or	
 
 	(c)	arises solely as a result of an event or occurrence occurring after the Expiry Date while no Default is in existence and redelivery of the Aircraft to the Lessor in accordance with this Agreement and is not attributable to any act, omission, event or circumstance occurring prior to such redelivery;	
 
 	(d)	is covered pursuant to another indemnity provision of this Agreement and payment to such Indemnitee under such other indemnity has actually been received by it;	
 
 	(e)	comprises the Lessor’s acquisition cost of the Aircraft or is an ordinary and usual overhead expense of such Indemnitee (but excluding any such Losses which is suffered or incurred as a result of or following the occurrence of an Event of Default); or	
 
 	(f)	arises as a result of any Lessor Lien or Lessor Tax; or	
 
 	(g)	consists of a Loss for which such Indemnitee has expressly agreed to be responsible in this Agreement.	
 
14.2	Withholdings	
 
 	14.2.1	The Lessee will not deduct any amount from any of its payments under the Transaction Documents, for or on account of any Taxes, unless the Lessee is obliged to do so under any Applicable Regulations.	
 
 	14.2.2	If the Lessee legally has to make a deduction as described in Clause 14.2.1, the Lessee must:	
 
 	(a)	deduct the minimum amount necessary to comply with any Applicable Regulations;	
 
 	(b)	pay the Tax to the relevant authority in accordance with all Applicable Regulations;	
 
 	(c)	with the exception of the exclusions set out in Section 14.4.2 below, pay to the Lessor and/or the Owner Participant (as applicable and without duplication) by way of additional rent such additional amounts, in the same currency as such payment as may be necessary in order that the amount of such payment received by the Lessor and/or the Owner Participant (as applicable and without duplication) on the date of such payment, after deduction or withholding for all such Taxes will be equal to the amount that the Lessor and/or the Owner Participant (as applicable and without duplication) would have received if such Taxes had not been deducted or withheld;	
 
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 	(d)	obtain a receipt or, if not legally possible, provide other evidence for the payment of such Tax from the relevant authority and give it to the Lessor; and	
 
 	(e)	following receipt of a written request therefor from the Lessee, which request shall not be more frequent than once per calendar year throughout the Lease Period, the Lessor shall provide the Lessee with a certificate relating to the Owner Participant’s tax residency, as requested, from the relevant tax authority, in such form as may be provided by such relevant tax authority.	
 
14.3	Payment of Taxes	
The Lessee shall promptly pay all Taxes imposed by any Government Entity with respect to the Aircraft, including without limitation with respect to the ownership, delivery, leasing, sub-leasing, possession, use, operation, importation, exportation, redelivery, sale or other disposition of the Aircraft, any payments under this Agreement and in respect of any premises where the Aircraft, any Engine or any Part thereof is located from time to time.
 
14.4	Tax Indemnity	
 
 	14.4.1	Subject to the exclusions set out in Clause 14.4.2, the Lessee shall immediately upon demand indemnify and hold harmless each of the Indemnitees against any and all Taxes which an Indemnitee may suffer or incur, whether directly or indirectly and which arise (and regardless of when the same are suffered or incurred) as a result of the purchase, sale, ownership, maintenance, service repair, overhaul, delivery, possession, transfer of title or possession, control, management, import, export, storage, modification, leasing, inspection, refurbishment, replacement, transportation, storing, testing, design, sub-leasing, pooling, wet leasing, charter, interchange, condition, environmental damage, use, operation, registration or redelivery of the Aircraft, any Engine, any Part and/or which otherwise relate to the Aircraft.	
 
 	14.4.2	The Lessee will not be required to indemnify any Indemnitee under Clause 14.4.1 to the extent the Tax for which the indemnity claim is made:	
 
 	(a)	is caused by such Indemnitee’s fraud, wilful misconduct or Gross Negligence;	
 
 	(b)	is a Tax liability which such Indemnitee has and which would have arisen even if the Transaction Documents had not been entered into;	
 
 	(c)	is covered pursuant to another indemnity provision of this Agreement and payment to such Indemnitee under such other indemnity has actually been received by it;	
 
 	(d)	is caused by a breach, misrepresentation or default by such Indemnitee of its express obligations under a Transaction Document which does not result from any act or omission of any other person other than an Indemnitee;	
 
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 	(e)	arises as a result of any Lessor Lien or Lessor Tax,	
 
 	(f)	arises from the failure of an Indemnitee to comply with any certification or documentation concerning residence, nationality or identity, or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from, or reduction of, such Tax to which such Indemnitee may be entitled; provided such certification, documentation or other requirement or compliance therewith would not expose such Indemnitee to any risk of material adverse consequences and further provided that the Lessee has notified such Indemnitee, or such Indemnitee has otherwise acquired knowledge, of the relevant Tax and such certification, documentation or other requirement within reasonably sufficient time so as to allow such Indemnitee, acting with diligence, to comply with such certification, documentation or requirement,	
 
 	(g)	arises from the voluntary or involuntary sale, assignment, transfer or other disposition (whether as security or otherwise) by an Indemnitee of all or any part of its interest in and to the Aircraft, the Airframe, any Engine, any Part, this Lease, any Transaction Document or any loan secured by any of the foregoing other than as a result of (a) the exercise of remedies in connection with an Event of Default or any transfer at any time during an Event of Default; or (b) the substitution, replacement, maintenance, repair or modification of the Aircraft or any Engine or Part or the pooling of an Engine or any Part or other transfer contemplated by this Agreement or any other Transaction Document other than under Clauses 23.4 though 23.10 hereof or made at the Lessee’s request,	
 
 	(h)	is related to a Tax imposed to the extent such Tax would not have been imposed but for any amendment, supplement, modification, contest or waiver to this Agreement or any Transaction Documents requested by the Lessor that is unrelated to any actual or potential Default or Event of Default; or	
 
 	(i)	is imposed on an Indemnitee that is a transferee of any interest of any transferor Indemnitee to the extent the Tax imposed on such transferee Indemnitee exceeds the amount of Tax which would have been imposed on the relevant transferor Indemnitee in the absence of any transfer, in each case solely as determined at the time of, and with reference to the Applicable Regulations in effect or enacted and scheduled to come into effect as of, the date of the relevant transfer.	
Notwithstanding the foregoing, in no event shall withholding Taxes imposed by México be a Lessor Tax unless and to the extent such withholding Tax arises as a result of a transfer by the Lessor or the Owner Participant of any of their respective right, title and interest in and to this Agreement, the Aircraft, any Engine or any Part, or any Transaction Document (except as requested by
 
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the Lessee or permitted or required under this Agreement, or while an Event of Default is in existence) and, as of the date of such transfer, no withholding Tax would have existed in the absence of such transfer.
 
 	14.4.3	If the Lessor and/or the Owner Participant (without duplication) is required by any Applicable Regulations, or by any third party, to deliver any report or return in connection with any Taxes for which the Lessee is obliged to indemnify the Lessor and/or the Owner Participant or any Indemnitee under this Agreement, the Lessee will complete the same and, on request, supply a copy of the report or return to the Lessor and/or the Owner Participant, as applicable.	
 
 	14.4.4	If any report, return or statement is required to be made by the Lessor or any Indemnitee with respect to any Tax for which there is an indemnity obligation of the Lessee under this Agreement, the Lessee will promptly notify the Lessor of the requirement, and:	
 
 	(a)	if permitted by Applicable Regulations, make and file in a timely manner such report, return or statement (except for any report, return or statement that the Lessor has notified the Lessee that the Lessor or any Indemnitee intends to prepare and file), prepare such return in such manner as will indicate the Lessor as owner and lessor of the Aircraft if required or appropriate, and provide the Lessor upon request a copy of each such report, return or statement filed by the Lessee, or	
 
 	(b)	if the Lessee is not permitted by the Applicable Regulations to file any such report, return or statement, the Lessee will prepare and deliver to the Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed. The Lessor or any Indemnitee will arrange (at the Lessee’s cost and expense) for any such report, return or statement to be filed with the relevant tax authorities.	
provided, however, that if notwithstanding the Lessee’s timely notification of such report or return to be filed by the Lessor or an Indemnitee, the Lessor or any Indemnitee, as the case may be, fails to file in a timely fashion any report or return with respect to any Tax for which there is an indemnity obligation of the Lessee, the Lessee shall have no obligation to indemnify the Lessor or any Indemnitee, for any penalties, addition to Tax, interest or fines with respect to such failure to file.
 
14.5	Lessee’s Indemnity	
If the Lessee pays to an Indemnitee any Tax that is not subject to indemnification under Clause 14.4.2 of this Agreement, such Indemnitee shall, so long as no Default is in existence, repay such amount to the Lessee within thirty (30) days after receipt of the Lessee’s written request therefore.
 
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14.6	Sales Tax	
Without limiting Clause 14.4 above, the Lessee shall pay to the Lessor and/or the Owner Participant (without duplication) (or, if permitted by the Applicable Regulations and if requested by the Lessor and/or the Owner Participant (without duplication), the Lessee shall pay to the relevant tax authority for the account of the Lessor and/or the Owner Participant (as applicable)):
 
 	14.6.1	all sales, use, rental, value added, goods and services and similar Taxes ( Sales Taxes ) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or in which the Aircraft, any Engine or any Part is located at the time of a transfer of any thereof permitted or required under this Agreement, in connection with a request of the Lessee or while an Event of Default is in existence or to the jurisdiction of the Habitual Base or the State of Incorporation with respect to the lease of the Aircraft to the Lessee pursuant to this Agreement or any such transfer unless the Lessee delivers to the Lessor and/or the Owner Participant (without duplication) on or prior to the Delivery Date or such other date upon which any such tax would otherwise become due, such documentation as may be required by the Applicable Regulations to evidence the Lessor’s and/or the Owner Participant’s (without duplication) entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Aircraft pursuant to this Agreement or any such transfer; and	
 
 	14.6.2	all Sales Taxes required to be paid to the tax authority of any jurisdiction in which the Aircraft may be used, operated or otherwise located from time to time unless the Lessee delivers to the Lessor and/or the Owner Participant (without duplication) such documentation as may be required by any Applicable Regulations to evidence the Lessee’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect thereto.	
 
14.7	VAT	
 
 	14.7.1	For the purposes of this Clause 14.7:	
 
 	(a)	VAT – includes value added Tax and any goods and services, sales or turnover Tax, or charges of a similar kind.	
 
 	(b)	Supply – includes anything on which VAT is charged.	
 
 	14.7.2	The Lessee must pay the Lessor and/or the Owner Participant (without duplication) or the relevant Tax authority (as applicable) the amount of any VAT which is chargeable for any Supply under any of the Transaction Documents.	
 
 	14.7.3	Each amount shown which the Lessee must pay under the Transaction Documents does not include VAT and if VAT is payable in respect of any amount, the Lessee shall pay all such VAT and shall indemnify the Lessor and/or the Owner Participant (without duplication) against any claims for the same (and where appropriate the Lessee shall increase the payments	
 
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 	which would otherwise be required to be made hereunder so that the Lessor and/or the Owner Participant (without duplication) is left in the same position as it would have been in had no VAT been payable); and the Lessee shall provide evidence to the Lessor and/or the Owner Participant (without duplication) in respect of payment of any such VAT.	
 
14.8	Currency protection	
 
 	14.8.1	The Lessee agrees to indemnify each Indemnitee against any Loss which such Indemnitee suffers in converting any sum into Dollars if:	
 
 	(a)	such Indemnitee receives an amount relating to the Lessee’s obligations in a different currency from that in which payments should be made under the Transaction Documents; or	
 
 	(b)	the Lessee pays a judgment or claim in a different currency from that in which payments should be made under the Transaction Documents.	
 
 	14.8.2	The Lessee waives any right it may have in any jurisdiction to pay any amount under the Transaction Documents or to pay a judgment or a claim in a currency other than the contractual currency.	
 
14.9	Notification and Contest	
 
 	14.9.1	The Lessor or any other Indemnitee shall notify the Lessee in writing of any matter or any Taxes of which the Lessor or such other Indemnitee has, through a responsible officer received formal notice and for which the Lessee is obligated to indemnify under this Clause 14 (each a Claim ); provided , however , the delay or failure of the Lessor to give notice to the Lessee in accordance with this Clause 14.9 will not discharge or release the Lessee from any of its indemnity obligations under Clause 14 except, and only to the extent, that such delay or failure was unreasonable and materially prejudices or precludes the Lessee’s right to defend and contest any such Claim or results in additional amounts payable by the Lessee which amounts would not have been imposed in the absence of such delay.	
 
 	14.9.2	If reasonably requested by the Lessee in writing within thirty (30) days of the Lessee’s receipt of notice of such Claim, the Lessor or any other Indemnitee shall at the Lessee’s risk and expense, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit the Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings. The Lessor or the relevant Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with the Lessee) control the conduct thereof; provided however, that the Lessor or the relevant Indemnitee shall not settle a Claim without the prior written consent of the Lessee. The Lessee shall determine (acting reasonably and in good faith) the method of any contest that is a Lessee-Controlled Contest and shall control the contest in good faith consultation with Lessor or the relevant Indemnitee. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under Applicable Regulations, may be conducted in the Lessee’s name and that does not involve	
 
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 	income Taxes or Lessor Taxes or (ii) which the Lessor or the relevant Indemnitee determines in good faith the contest of which by the Lessee will not adversely affect Lessor or the relevant Indemnitee. In no event shall the Lessor or the relevant Indemnitee be required or the Lessee be permitted to contest the imposition of any Tax for which the Lessee is obligated pursuant to this Clause 14.9.2 unless:	
 
 	(A)	the Lessee shall pay such Indemnitee on demand, and indemnify the such Indemnitee as applicable on an after-Tax basis against, all costs and expenses that such Indemnitee may incur in contesting such claim or arising out of or relating to such contest (including, without limitation, all reasonable legal and accounting fees, disbursements, penalties, interest and additions to Tax);	
 
 	(B)	the Lessee shall have provided to the Lessor and the relevant Indemnitee an opinion of tax counsel reasonably acceptable to the Lessor and such relevant Indemnitee that there is a “reasonable basis” (as such term is interpreted by the American Bar Association tax opinion standards) for such disputation, and the Lessee shall have acknowledged and agreed that it is responsible for indemnifying the relevant Indemnitee for such Tax;	
 
 	(C)	such Indemnitee shall have determined that there is no material risk that the action to be taken will result in a sale, forfeiture or loss of, or the creation of any Security Interest on, the Aircraft; and	
 
 	(D)	no Event of Default shall have occurred and be continuing.	
Nothing contained in this Section 14.9.2 shall require the Lessor or any Indemnitee to contest, or permit the Lessee to contest in the name of the Lessor or an Indemnitee, a Claim which the Lessor or Indemnitee would otherwise be required to contest pursuant to Section 14.9 if the Lessor or such Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by the Lessee under Section 14 in connection with such Claim. If the Lessor or any Indemnitee agrees to a settlement of any contest conducted pursuant to this Section 14.9.2 without the prior written consent of the Lessee, then the Lessor or the relevant Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Section 14 with respect to the Tax liability accepted in such settlement (and all directly-related Claims, and Claims based on the outcome of such Claim). So long as no Event of Default has occurred and is continuing, in the event that the Lessor or an Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, the Lessor or the relevant Indemnitee shall repay to the Lessee any amount previously paid or advanced to or on behalf of such Indemnitee with respect to such Claim, together with any interest that might have been generated therein.
 
14.10	Tax on indemnity payments	
The amount of any payment made under this Clause 14 ( Indemnities ) must take into account the Tax treatment of the payment and of the Loss in respect of which the payment is claimed so that the Indemnitee is fully compensated, after that Tax treatment has been taken into account, for the Loss for which the relevant claim is made.
 
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14.11	Tax Credit	
If an Indemnitee, in good faith, determines that it has realized a Tax benefit (by way of deduction, credit or otherwise) as a result of any payment which the Lessee has made under Clause 14.4 to or for the benefit of such Indemnitee, such Indemnitee shall pay to the Lessee as soon as practicable after the Tax benefit has been realized (but not before the Lessee has made all payments and indemnities to the Lessor required under this Clause 14 and so long as no Default is in existence) an amount which will ensure that (after taking account of the payment itself) such Indemnitee is in no better and no worse position than it would have been if the Tax benefit had not been realized. Nothing in this Clause 14.11 shall: (i) interfere with the right of any Indemnitee to arrange its Tax affairs in whatever manner it thinks fit; or (ii) oblige any Indemnitee to disclose any information relating to its Tax affairs or any Tax computations.
 
14.12	Duration	
The indemnities contained in this Agreement will continue in full force after the Expiry Date notwithstanding any breach or repudiation of this Agreement by the Lessor or the Lessee or the termination of the leasing of the Aircraft under this Agreement.
 
15.	TOTAL LOSS	
 
15.1	Risk of Loss	
The Lessee will be responsible for all risks associated with a Total Loss throughout the Lease Period.
 
15.2	Total Loss: Airframe	
 
 	15.2.1	If the Airframe or the Aircraft suffers a Total Loss at any time prior to Delivery, this Agreement will immediately terminate and neither party will have any further obligations hereunder except as expressly stated and save for accrued rights, obligations and claims and any obligations expressed to survive the termination of this Agreement provided that the Lessor will repay to the Lessee an amount equal to the Security Deposit paid by the Lessee and not applied in accordance with Clause 5.3 and return to the Lessee or agree to the cancellation of, any Security Deposit Letter of Credit.	
 
 	15.2.2	If the Airframe or the Aircraft suffers a Total Loss at any time after Delivery:	
 
 	(a)	the Lessee will pay the Agreed Value to the Loss Payee on the Total Loss Payment Date together with any unpaid Rent calculated up to and including that date and any Break Costs;	
 
 	(b)	the Lessee will continue to perform those of its obligations that remain capable of performance (including, for the avoidance of doubt, the payment of Rent) up to and including the Total Loss Payment Date; and	
 
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 	(c)	when the Lessor has received all amounts payable by the Lessee under this Agreement and under any Other Agreement and unless the insurers are entitled to the Aircraft by way of salvage, the Lessor will then ensure that it transfers title to the Aircraft to the Lessee or its nominee, if requested to do so. Ownership will be transferred on an “AS IS WHERE IS” basis without any recourse, representation or warranty except that there are no Lessor Liens. The Lessee shall indemnify the Lessor and the Owner Participant for all fees, expenses and Taxes incurred by the Lessor or the Owner Participant resulting from their compliance with this Clause 15.2.2(c).	
 
15.3	Total Loss: Engine or Part	
If an Engine or a Part suffers a Total Loss which does not also involve a Total Loss of the Airframe (and as if, for these purposes, all references in the definition of Total Loss to Aircraft were to Engine or Part as the context may require):
 
 	15.3.1	the Lessee must replace that Engine or Part;	
 
 	15.3.2	any replacement part must meet the requirements of Clause 10.2.1;	
 
 	15.3.3	in the case of a replacement engine, such engine must be a “ Suitable Replacement Engine ” which for the purposes of this Clause shall mean an engine:	
 
 	(a)	which is of the same model, or an improved or advanced version of the Engine it replaces, approved by the Manufacturer and the Aviation Authority for installation and operational use on the Airframe in conjunction with the other Engine;	
 
 	(b)	which is in the same or better operating condition and having equivalent or better time elapsed since hot section refurbishment and cold section refurbishment, reduction gear overhaul and remaining equivalent warranty status as the Engine it replaces;	
 
 	(c)	which has as much useful life available until the next scheduled maintenance procedure for performance restoration (shop visit) condition as the Engine it replaces;	
 
 	(d)	for which the Lessee can provide to the Lessor full details as to its source and full maintenance records (which in the case of life limited parts are sufficient to demonstrate to the Lessor’s satisfaction full back-to-birth traceability of such life limited parts);	
 
 	(e)	which has the same or greater value, utility, modification status and use as the Engine it replaces including life limited parts;	
 
 	(f)	which is free from any Security Interests (other than Permitted Security Interests) and for which the Lessee can provide to the Lessor and any Security Trustee such evidence of title as the Lessor or any Security Trustee may reasonably request; and	
 
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 	(g)	which meets all Applicable Regulations;	
 
 	15.3.4	upon installation of a Suitable Replacement Engine on the Aircraft, such Suitable Replacement Engine shall automatically and without any further act:	
 
 	(a)	become and remain the property of the Lessor, without any obligation and/or liability on the part of the Lessor, the Owner Participant and/or Financiers, whether as to Taxes and/or otherwise; and	
 
 	(b)	become subject to this Agreement and the Financing Documents as if it had been attached to the Aircraft on Delivery;	
 
 	15.3.5	if the Lessor, the Owner Participant or any Security Trustee requests, the Lessee shall, at its own cost, provide such documentary evidence and take such other action as the Lessor, the Owner Participant or any Security Trustee may request to evidence the transfer to the Lessor of full ownership of the Suitable Replacement Engine and to protect the rights of the Security Trustee and/or other Financiers as mortgagee(s) in respect of such Suitable Replacement Engine (including the provision, if required, to the Lessor of bills of sale, and legal opinions), and where the Cape Town Convention applies, cooperate with the prompt registration of the Contract of Sale on the International Registry;	
 
 	15.3.6	after the Lessee has carried out all of its obligations under this Clause 15.3 ( Total Loss: Engine or Part ), and unless the insurers are entitled to the replaced Engine or Part as salvage, the Lessor will, if requested, transfer ownership of the replaced Engine or Part to the Lessee or its nominee. Ownership will be transferred on an “AS IS WHERE IS” basis without any, recourse, representation or warranty except that there are no Lessor Liens. The Lessee shall indemnify the Lessor and the Owner Participant for all fees, expenses and Taxes incurred by the Lessor or the Owner Participant resulting from their compliance with this Clause 15.3.6; and	
 
 	15.3.7	a Total Loss of an Engine or Part shall not result in any reduction in the Rent or any other sums payable by the Lessee under this Agreement.	
 
16.	REQUISITION	
 
16.1	No Default	
If the Aircraft is requisitioned for use which does not constitute a Total Loss, then provided that all the provisions of this Agreement are complied with (including Insurance) there will be no Default as a result of such requisitioning and throughout the Requisitioning Period:
 
 	16.1.1	the Lessee will continue to pay Rent and Maintenance Payments and perform those of its obligations that remain capable of performance;	
 
 	16.1.2	the Lessee will be entitled to any hire paid by the requisitioning authority prior to the Expiry Date so long as no Default or Event of Default has occurred and is continuing;	
 
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 	16.1.3	if the Requisitioning Period extends beyond the Expiry Date, the Lessor will have an option, exercisable on notice to the Lessee either:	
 
 	(a)	to continue the leasing of the Aircraft until the date on which the Aircraft ceases to be subject to such requisition; or	
 
 	(b)	to treat the leasing of the Aircraft as terminated.	
 
16.2	Continuing Leasing	
 
 	16.2.1	If the Lessor chooses to continue the leasing of the Aircraft as set forth in Clause 16.1.3(a), all of the obligations of the Lessee which remain capable of performance (including the obligations to pay Rent and Maintenance Payments at the same rate and on the same basis as before the Expiry Date) will continue until the Expiry Date. In such circumstances, the Lessee will be entitled to any hire paid by the requisitioning authority which is attributable to the period in question, so long as no Default or Event of Default has occurred which is continuing.	
 
 	16.2.2	If the Lessor chooses to treat the leasing of the Aircraft as terminated, as set forth in Clause 16.1.3(b) the Lessor will be entitled to any hire paid by the requisitioning authority after the Expiry Date.	
 
 	16.2.3	At the end of the Requisitioning Period, and irrespective of the option chosen, the Lessee will put the Aircraft into the Redelivery Condition and redeliver it to the Lessor in accordance with Clause 18 ( Return of the Aircraft ).	
 
16.3	Compensation	
In the case of a requisition for use, the Lessor will be entitled to all compensation paid by the requisitioning authority for any structural change, damage or wear and tear to the Aircraft, but the Lessor will either use that compensation:
 
 	16.3.1	to reimburse the Lessee for the expense of complying with its obligations to put the Aircraft into the Redelivery Condition; or	
 
 	16.3.2	if a Default or an Event of Default has occurred and is continuing, towards settlement of any amounts owing by the Lessee under the Transaction Documents or any Other Agreement.	
 
17.	INSURANCE	
 
17.1	General Requirements	
 
 	17.1.1	The Lessee will keep the Aircraft covered by Insurance at all times during the Lease Period as required by this Clause 17 ( Insurance ) and Schedule 8 ( Insurance Requirements ). The Insurance Broker and the lead underwriters employed for this purpose shall be of internationally recognized reputation in the London or New York aviation insurance markets and shall be satisfactory to the Lessor (acting reasonably).	
 
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 	17.1.2	All insurance premiums and other costs of maintaining the Insurance will be for the account of the Lessee.	
 
 	17.1.3	The Lessee will ensure that each certificate of Insurance is in form and substance acceptable to the Lessor, the Owner Participant and any Security Trustee (each acting reasonably).	
 
17.2	Specific Requirements	
 
 	17.2.1	The specific requirements of the Lessor, at the date of this Agreement, with respect to Insurance for the Aircraft are set out in Schedule 8 ( Insurance Requirements ).	
 
 	17.2.2	In the event there shall occur a material change in international aviation insurance practices affecting operators operating similar aircraft or similar routes as the Lessee, the Lessor may, upon consultation with the Lessee and the Lessee’s broker of record, stipulate other requirements for the Insurance so that the scope and level of the cover is maintained in line with best industry practice for such operators and to ensure that the interests of each Indemnitee are properly protected and such conditions shall be binding upon the Lessee.	
 
17.3	Insurance Covenants	
 
 	17.3.1	The Lessee will comply with each Insurance policy and will not do or omit to do anything, or permit any act or omission, which:	
 
 	(a)	results in or could reasonably be expected to result in the Insurance not being valid in any respect or which renders it or may render it wholly or partially void or voidable; or	
 
 	(b)	could bring any particular liability, that would otherwise be covered by the Insurance, if a claim were made, within the scope of an exclusion from or an exception to it; or	
 
 	(c)	results in any alteration to, or the creation of any Security Interest (other than a Permitted Security Interest) in, the Insurances (or there being any other insurance cover on or in respect of the Aircraft) and which could prejudice the interests of any Indemnitee; or	
 
 	(d)	is in breach of or does not comply with Applicable Regulations as regards insurance requirements for the Aircraft.	
 
 	17.3.2	The Lessee shall:	
 
 	(a)	not without the prior written approval of the Lessor, the Owner Participant and the Security Trustee take out any insurance or reinsurance in respect of the Aircraft other than that required under this Agreement, except for total loss only insurance to the extent the same would not prejudice the coverage or recovery by the Lessor, the Owner Participant or the Security Trustee under the insurances required to be maintained hereunder (including by increasing the amount of damage that is required to constitute a total loss);	
 
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 	(b)	be responsible for any deductible under the Insurances; and	
 
 	(c)	provide any other insurance and reinsurance related information or assistance in respect of the Insurances that the Lessor, the Owner Participant or any Security Trustee may reasonably require, including, without limitation, in relation to the expiry and/or renewal of the Insurances.	
 
 	17.3.3	The Lessee will start renewal procedures in a timely manner prior to the expiry of any policy of Insurance and provide to the Lessor:	
 
 	(a)	upon written request at any time during the 30 day period prior to expiry, a report on the status of negotiations for renewal;	
 
 	(b)	on or prior to each renewal date, confirmation from the relevant insurance broker that the insurance coverage required to be effected in accordance with this Agreement has been renewed prior to the expiry of the current policy; and	
 
 	(c)	certificates of Insurance (and where reinsurance has been required by the Lessor or the Owner Participant, certificate of reinsurance) and Broker’s Letter of Undertaking, in a form acceptable to the Lessor, the Owner Participant and any Security Trustee (each acting reasonably) in English, detailing the coverage of each policy and evidencing compliance with the requirements of this Clause 17 and Schedule 8 of this Agreement, no later than seven (7) Business Days after each renewal date.	
 
17.4	Failure to Insure	
If the Lessee fails to insure the Aircraft in accordance with this Agreement:
 
 	17.4.1	any Indemnitee may (but is not obliged to) pay outstanding premiums or effect alternative insurance in respect of the Aircraft and any sums so expended by such Indemnitee will become immediately due and payable by the Lessee to such Indemnitee together with interest thereon at the Default Rate, from the date of expenditure by such Indemnitee up to the date of reimbursement by the Lessee; and	
 
 	17.4.2	the Lessor may (but is not obliged to) require the Aircraft to be grounded at an airport of its choice and to remain there until it is once again insured in accordance with this Agreement.	
 
17.5	Continuation of Insurance	
 
 	17.5.1	The Lessee will maintain liability insurance (at no cost to the Lessor) after the Expiry Date to cover the Lessee’s continuing liability under the indemnities in Clause 14.1 ( General Indemnity ), until the second anniversary of the Expiry Date.	
 
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 	17.5.2	Each Indemnitee will be named as additional insured under the insurance maintained under Clause 17.5.1 and neither the Lessee ceasing to lease the Aircraft, nor the Indemnitees ceasing to have any interest in it, will affect the Lessee’s obligations under this Clause 17 ( Insurance ).	
 
17.6	Application of Insurance Proceeds	
The proceeds of any policy of Insurance will be applied in accordance with Schedule 8 ( Insurance Requirements ).
 
18.	RETURN OF THE AIRCRAFT	
 
18.1	Return	
Unless the Aircraft has suffered a Total Loss, the Lessee will redeliver the Aircraft to the Lessor on the Expiry Date, at the Redelivery Location in the Redelivery Condition and free and clear of all Security Interests (other than Lessor Liens). The Lessee will bear the cost of ferrying the Aircraft to the Redelivery Location.
 
18.2	Rectification	
 
 	18.2.1	If during the Redelivery Procedure, the Lessor determines that the Lessee has not fully complied with any of its obligations under this Agreement, the Lessee will, at the Lessor’s option either:	
 
 	(a)	immediately rectify such non-compliance and all the Lessee’s obligations under this Agreement will remain in force until such non-compliance has been rectified and in particular (without limitation) the Lessee will continue to pay Rent to the Lessor for the first thirty (30) days at a rate equal to the rate of Rent payable immediately prior to the Scheduled Expiry Date or if applicable, the Scheduled Renewal Term Expiry Date prorated on a daily basis and thereafter at a rate equal to 150 per cent. (150%) of the equivalent of Rent payable immediately prior to the Scheduled Expiry Date prorated on a daily basis or if applicable, the Scheduled Renewal Term Expiry Date until the date such non-compliance shall have been rectified and Redelivery of the Aircraft shall have taken place, and the Lease Period will be automatically extended solely for the purpose of enabling such non-compliance to be rectified; or	
 
 	(b)	redeliver the Aircraft to the Lessor and indemnify the Lessor, and provide to the Lessor’s satisfaction cash as security for that indemnity, against the cost of putting the Aircraft into the Redelivery Condition.	
 
 	18.2.2	If the Lease Period is extended pursuant to Clause 18.2.1(a), the Lessee shall not be entitled to use the Aircraft in commercial or training operations during the period of such extension (it being understood that the sole purpose of such extension will be to allow the Lessee to put the Aircraft in the Redelivery Condition) and such extension shall not prejudice the Lessor’s right to treat the Lessee’s failure to comply with the Redelivery Procedure as an Event of Default at any time and to enforce such right and remedies as may be available to the Lessor in respect thereof under the terms of this Agreement and the Applicable Regulations.	
 
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18.3	Export and Deregistration	
Upon Redelivery, the Lessee will provide to the Lessor upon the Lessor’s request, all documents (a) necessary to export the Aircraft from the State of Registration (or, if different, the country where the Aircraft is located at Redelivery) (including a valid and subsisting export license for the Aircraft) and (b) reasonably requested by the Lessor in relation to the deregistration of the Aircraft from the aircraft register maintained by the Aviation Authority.
 
18.4	Acknowledgement	
Provided the Lessee has complied with its obligations under this Clause 18 ( Return of the Aircraft ) and Schedule 9 ( Redelivery ), following Redelivery of the Aircraft (including the Aircraft Documents) by the Lessee to the Lessor at the Redelivery Location and in the Redelivery Condition, the Lessor will deliver to the Lessee an acknowledgement confirming that the Lessee has redelivered the Aircraft to the Lessor in the Redelivery Condition, which acknowledgement shall be without prejudice to the Lessor’s accrued and continuing rights under this Agreement.
 
18.5	Licence	
The Lessee hereby grants to the Lessor an irrevocable non-exclusive licence to use, free of charge by the Lessee, any intellectual property rights of the Lessee needed to operate the Aircraft in its then condition and the right to use any item which may be installed on the Aircraft at Redelivery in which the Lessee has any intellectual property rights, in each case, solely to the extent the Lessee possesses such rights and is lawfully entitled to grant the license contemplated hereby without cost to the Lessee.
 
18.6	Title	
Title to any loose equipment installed in the Aircraft on Redelivery shall, without further act, vest in the Lessor, free and clear of Security Interests, unless otherwise agreed by the Lessor and the Lessee in writing.
 
18.7	Payment of End of Lease Maintenance Payment Adjustments	
On the Expiry Date, the Lessee shall pay to the Lessor the amounts specified in Part C of Schedule 6 ( End of Lease Maintenance Payment Adjustments ).
 
19.	EVENTS OF DEFAULT	
 
19.1	The following events will constitute Events of Default:	
 
 	19.1.1	Failure to take Delivery or to provide conditions precedent : The Lessee gives notice of its intention not to accept Delivery of the Aircraft or fails to accept Delivery of the Aircraft on the day the Aircraft has been tendered for Delivery in the condition required under this Agreement and otherwise in accordance with the terms of this Agreement or fails to provide all the documents and evidence listed in Part A of Schedule 3 ( Conditions precedent ) when due (to the extent not deferred by the Lessor).	
 
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 	19.1.2	Non-payment by the Lessee : The Lessee fails to make any payment of Rent, Security Deposit (after the full amount of the Security Deposit has been paid, it being agreed that there is no grace period for the payment of the initial Security Deposit), Maintenance Payments or Agreed Value under any of the Transaction Documents to which it is a party within three (3) Business Days after the date on which the payment is expressed to be due or fails to make any other payment within ten (10) Business Days after the date of the Lessor’s, the Owner Participant’s or the Security Trustee’s written demand for such payment.	
 
 	19.1.3	Failure to Insure :	
 
 	(a)	The Lessee fails to comply with any provision of Clause 17 ( Insurance ), or any insurance required to maintained under this Agreement is not maintained or is cancelled or terminated or becomes invalid or unenforceable as a result of any breach of their terms.	
 
 	(b)	The Aircraft is operated at any time when or in any place where any Insurance is not in full force and effect.	
 
 	19.1.4	Breach : The Lessee fails to observe or perform any of its obligations under this Agreement or any other Transaction Document (not specifically mentioned elsewhere in this Clause 19) and such failure (if remediable) is not remedied within thirty (30) days after the Lessee has been notified or becomes aware of such failure;	
 
 	19.1.5	Loss of possession : The Lessee parts with possession of the Aircraft except as permitted by this Agreement (other than as a consequence of a Total Loss or due to the Lessor, the Owner Participant or the Security Trustee taking possession of the Aircraft in breach of their respective covenants of quiet enjoyment).	
 
 	19.1.6	Security Interest : The Lessee permits the Aircraft, or any interest of the Lessor, the Owner Participant or of any Financier in it, or any party’s rights under this Agreement or any other Transaction Document, to become subject to any Security Interest (other than a Permitted Security Interest).	
 
 	19.1.7	Representation : Any representation or warranty made by the Lessee in any of the Transaction Documents or deemed to be repeated, proves to have been incorrect in any material respect at the time made or repeated and the circumstances giving rise to the breach of such representation or warranty if remediable are not remedied within thirty (30) days after notice from the Lessor requiring such remedy.	
 
 	19.1.8	Cessation of business : The Lessee suspends or ceases or threatens to suspend or cease to carry on its business as a scheduled air carrier or disposes or threatens to dispose of all or a part of its undertaking, properties, assets, rights or revenues (other than a transfer or disposal in the ordinary course of business for full commercial value).	
 
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 	19.1.9	Existence : Neither the Lessee nor the Parent may consolidate with or merge into or with any other corporation or other person, and convey, transfer, lease or otherwise dispose of all or substantially all of their respective property and other assets (whether in one transaction or a series of transactions) to, any person, unless the Lessee or the Parent has, as the case may be, provided the Lessor and the Owner Participant with not less than thirty (30) days prior written notice of such transaction describing such transaction in reasonable detail and providing the Lessor and the Owner Participant with evidence reasonably satisfactory to the Lessor and the Owner Participant that such transaction will comply with the following requirements:	
 
 	(a)	the Lessee or the Parent, as may be the case, or the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall have acquired or succeeded to all or substantially all of the property and other assets of the Lessee or the Parent, as applicable, as an entirety, and shall have a tangible net worth of not less than the Lessee’s or the Parent’s tangible net worth (as applicable) (determined in each case in accordance with IFRS) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; (C) is a corporation or company organized under the laws of Mexico or a state of the United States, and if a Successor Entity of the Lessee, is a United States or Mexican duly certificated air carrier and (D) the Lessee or the Parent, as the case may be, shall, unless it is the surviving person in a merger, cause such Successor Entity to execute and deliver to the Lessor an agreement, in form and substance reasonably satisfactory to the Lessor which is a valid, binding and enforceable assumption and agreement to be bound by and perform by such Successor Entity of the obligations and limitations of the Lessee or the Parent (as the case may be) under this Agreement and/or the other Transaction Documents to which the Lessee or the Parent (as applicable) is a party, and delivers to the Lessor (i) a certificate signed by an officer of the Lessee, the Parent or the Successor Entity, as the case may be, confirming that such consolidation, merger or transfer and the assumption agreement mentioned in sub-clause (D) complies with this Clause 19.1.9 and all conditions precedent provided herein relating to such transaction have been complied with and (ii) a legal opinion from independent counsel reasonably satisfactory to the Lessor to such effect and otherwise in such form and substance reasonably satisfactory to the Lessor; and	
 
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 	(b)	no Default or Event of Default shall have occurred and be continuing immediately after giving effect thereof.	
Upon any such consolidation or merger of the Lessee or the Parent with or into, or the conveyance, transfer or lease by the Lessee or the Parent of all or substantially all of its assets to, any Successors Entity in accordance with this Clause 19.1.9, such Successors Entity will succeed to, and be substituted for, and may exercise every right and power of, the Lessee or the Parent, as the case may be under the Transaction Documents to which the Lessee or the Parent is a party with the same effect as if such Successors Entity had been named as the “Lessee” or the “Parent”, as the case may be, therein and thereafter, the Lessee or the Parent, as the case may be shall be released and discharged from all obligations and covenants under the Transaction Documents to which the Lessee or the Parent is a party. No such consolidation or merger, or conveyance, transfer or lease, shall have the effect of releasing the Lessee, the Parent or such Successors Entity from any of the obligations, liabilities, covenants or undertakings of the Lessee or the Parent, as the case may be under this Agreement and this Clause shall not be construed as permitting any sublease or other arrangement for the use, operation or possession of the Aircraft except as permitted under the applicable provision of this Agreement.
The Lessee or the Parent shall pay all reasonable costs and expenses incurred by the Lessor, the Owner Participant and the Financiers (including reasonable and documented legal fees and expenses) in relation to any such consolidation or merger.
 
 	19.1.10	Change of Control : Any single person or group of persons acquires control of the Lessee or the Parent without the previous consent in writing of the Lessor which consent shall not be unreasonably withheld or delayed and for the purposes of this Clause 19.1.10 “ control ” means the ability to direct the management and policy of the Lessee or the Parent, as the case may be, whether by control of the management, board of directors or similar governing body of the Lessee or the Parent, or by ownership of or rights over the voting capital of the Lessee or the Parent, provided that , for purposes of clarification, a bona fide public offering of up to 100% of the voting equity shares of the Lessee or the Parent shall not be deemed a change of control under this Clause 19.1.10 so long as no concurrent change in the management of the Lessee or the Parent occurs.	
 
 	19.1.11	Corporate existence : Except as otherwise contemplated hereunder, the Lessee or the Parent fails to maintain its corporate existence in the jurisdiction in which it is incorporated at the date of this Agreement.	
 
 	19.1.12	Registration : The registration of the Aircraft in the State of Registration is cancelled otherwise than as permitted by this Agreement or as a result of a Total Loss or any failure of the Lessor to comply with its obligations hereunder or under the other Transaction Documents or any failure of the Owner Participant to instruct the Lessor to take any actions where the Owner Participant is obligated to provide such instructions.	
 
 	19.1.13	Arrest : The Aircraft is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained, in each case in exercise or purported exercise of any possessory lien or other claim, or otherwise taken from the	
 
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 	possession of the Lessee or any operator thereof (otherwise than a requisition for hire or in circumstances which constitute, or would with the passage of time constitute, a Total Loss unless the same is due to a breach by the Lessor, the Owner Participant or the Security Trustee of their respective covenants of quiet enjoyment).	
 
 	19.1.14	Cross Default :	
 
 	(a)	any Financial Indebtedness, the outstanding balance of which is in excess of ***** or its equivalent in one or more other currencies, of the Lessee or the Parent is not paid when due; or	
 
 	(b)	any such Financial Indebtedness in excess of ***** or its equivalent in one or more other currencies, becomes due or capable of being declared due prior to the date when it would otherwise have become due; or	
 
 	(c)	the security for any such Financial Indebtedness in excess of ***** or its equivalent in one or more of currencies, becomes enforceable; or	
 
 	(d)	any event of default or termination event, howsoever described, occurs under any Other Agreement.	
 
 	19.1.15	Insolvency : Any of the following occurs in respect of the Lessee, or the Parent:	
 
 	(a)	it is unable to pay its debts generally as they fall due or it is insolvent;	
 
 	(b)	it admits its inability to pay its debts generally as they fall due;	
 
 	(c)	it suspends making payments of its debts generally or announces an intention to do so;	
 
 	(d)	a moratorium is declared by the Lessee and/or the Parent in respect of its indebtedness generally or a class thereof; or	
 
 	(e)	any similar local law process not described in Clauses 19.1.15(a) to (d).	
 
 	19.1.16	Insolvency proceedings : Any of the following occurs in respect of the Lessee or the Parent:	
 
 	(a)	a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any registrar for, its winding-up, administration or dissolution or any such resolution is passed;	
 
 	(b)	any person presents a petition, or files documents with a court or any registrar for, for its winding-up, administration, dissolution or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise (including any concurso mercantil or	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	suspension de pagos proceedings)) and, only in the case of an involuntary petition or filing, the same is not discharged, dismissed, remedied or relinquished within sixty (60) days;	
 
 	(c)	an order for its winding-up, administration or dissolution is made	
 
 	(d)	any liquidator, trustee in bankruptcy, conciliator in a concurso mercantil , judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets;	
 
 	(e)	its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, conciliator in a concurso mercantil , judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer;	
 
 	(f)	An order for relief under the Bankruptcy Code is granted or issued; or	
 
 	(g)	any other analogous step or procedure is taken in any jurisdiction.	
 
 	19.1.17	Approvals : any Post-Delivery Authorization and Filing is not made or obtained as provided in the definition of such term by within the time period specified in the definition of such term; or any consent, authorisation, licence, certificate or approval of or registration with or declaration to any Government Entity required in connection with this Agreement, including, without limitation:	
 
 	(a)	any authorisation required by the Lessee to obtain and transfer freely Dollars out of any relevant country; or	
 
 	(b)	any authorisation required by the Lessee or the Parent to authorise, or required in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of any Transaction Document to which each is a party or the performance by the Lessee or the Parent of its obligations under any Transaction Document to which each is a party; or	
 
 	(c)	the registration of the Aircraft (other than to the extent the same is the result of an omission or act of the Lessor to perform an action required to be performed by it for the registration of the Aircraft) or the Aircraft’s certificate of airworthiness; or	
 
 	(d)	any airline licence or air transport licence required by the Lessee,	
is modified in a manner unacceptable to the Lessor or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and, in the case of (a) or (b) above, steps (reasonably acceptable to the Lessor) are not being taken by the Lessee to obtain or reinstate the same and the same is not reinstated within thirty (30) days.
 
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 	19.1.18	Material Adverse Changes : Any event or series of events occurs which has, had or which could reasonably be expected to have a material adverse effect on the ability of the Lessee to perform its obligations under the Transaction Documents;	
 
 	19.1.19	Litigation : A final judgment of a court for the payment of money in an amount not covered by insurance equal to or more than ***** or its equivalent in one or more other currencies, is rendered against the Lessee or the Parent and the same remains unpaid for a period of sixty (60) days, unless during such period, execution of such judgment shall have been effectively stayed by agreement of the parties involved or by court order or such judgment shall have been adequately bonded.	
 
 	19.1.20	Unlawful : It is or becomes unlawful by reason of any act, omission or default of the Lessee or the Parent, as the case may be, for the Lessee or the Parent to perform any of its obligations under any Transaction Document to which each is a party, or any Transaction Document is or becomes wholly or partly invalid or unenforceable by reason of any act, omission or default of the Lessee.	
 
 	19.1.21	Rights and Remedies : The Lessee or any other person claiming by or through the Lessee challenges the existence, validity, enforceability or priority of the rights of the Lessor as owner or as lessor in respect of the Aircraft or of the rights of the Security Trustee as mortgagee or assignee.	
 
 	19.1.22	Redelivery : The Lessee fails to redeliver the Aircraft to the Lessor on the Expiry Date in accordance with Clause 18 ( Return of the Aircraft ).	
 
 	19.1.23	Charges : Navigation, overflight, landing, airport, terminal or other operational charges due from the Lessee are not paid within the period of ten (10) days after their original due date for payment or within any payment period applicable pursuant to agreement between the Lessee and the relevant aviation authority, and such charges relate to the Aircraft or such failure could result in a Security Interest upon or detention, impoundment or other adverse action or circumstances with respect to the Aircraft.	
 
 	19.1.24	Letters of Credit : Where applicable (i) a Security Deposit Letter of Credit is not renewed or reissued within the time required by this Agreement; (ii) the issuer or confirming bank under any Security Deposit Letter of Credit fails to make payment upon any draw thereunder pursuant to the terms thereof or (iii) any of the events described in Clause 5.3.5 in relation to the issuer or any confirming bank occurs and the Lessee fails to provide the Lessor with a replacement Security Deposit Letter of Credit or provide a cash Security Deposit within the period specified in Clause 5.3.5.	
 
 	19.1.25	Registration Amendments : without the previous consent in writing of the Lessor, which consent shall not be unreasonably withheld or delayed, the Lessee amends or otherwise modifies any of the filings or registrations with the Aviation Authority described herein.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	19.1.26	C Check : the first C Check of the Aircraft does not occur on or before the C Check Date (except as required by applicable Regulation).	
 
 	19.1.27	FAA Registration : The implementation of the specifications and modifications (as listed in Schedule 12) and any Post Delivery Modifications required to make the Aircraft eligible for the FAA registration does not occur in a timely manner so as to enable the Aircraft to be registered on or before the FAA Registration Date or the Lessee fails to cause the de-registration of the Aircraft with the DGAC and the notification of such de-registration to the FAA during such C Check or the Lessee fails to take any other action required to be taken by the Lessee to effect the registration of the Aircraft with the FAA on or before the FAA Registration Date, subject to the Lessor’s compliance with its obligations in respect of such registration.	
 
20.	REMEDIES	
 
20.1	Rights	
If an Event of Default occurs and during the continuation of the same, the Lessor may, at its option and without prejudice to any other rights it may then have, at any time thereafter (without notice to the Lessee except as required by Applicable Regulations or as provided below):
 
 	20.1.1	proceed by appropriate court action to enforce performance of the Transaction Documents or to recover damages for breach by the Lessee;	
 
 	20.1.2	accept the Lessee’s repudiation of this Agreement and by notice in writing to the Lessee cancel the leasing of the Aircraft and:	
 
 	(a)	if the Lessor’s notice is issued before the Delivery Date, the obligation of the Lessor to lease the Aircraft to the Lessee will be cancelled on the date of the notice; and	
 
 	(b)	if the Lessor’s notice is issued after the Delivery Date, the leasing of the Aircraft under this Agreement will be cancelled on the date specified in the Lessor’s notice but in any event the Lessee will remain bound to perform all of its obligations under this Agreement;	
 
 	20.1.3	direct the Lessee to ground the Aircraft at a location required by the Lessor or to return the Aircraft in accordance with Clause 18 ( Return of the Aircraft ), as if it were being returned on the Expiry Date; and/or	
 
 	20.1.4	repossess the Aircraft (including the Aircraft Documents) and the Lessee agrees that the Lessor may enter onto the Lessee’s premises where the Aircraft may be located or cause the Aircraft to be redelivered to the Lessor or its designee at the Redelivery Location (or such other location as the Lessor may require), and the Lessor is hereby irrevocably by way of security for the Lessee’s obligations under this agreement, appointed attorney (which appointment is coupled with an interest) for the Lessee in causing such redelivery or in directing pilots to fly the Aircraft to the	
 
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 	Redelivery Location (or such other location as the Lessor may require) for redelivery thereof to the Lessor and shall have all the powers and authorisations legally necessary for taking such action.	
The Lessee and the Lessor hereby agree that the Lessor shall not be required to provide notice to the Lessee as set forth in Article IX(6) of the Protocol in connection with a proposal to procure the de-registration and export of the Aircraft without a court order. The Lessee expressly agrees to permit the Lessor to obtain from any applicable court, pending final determination of any claim resulting from an Event of Default hereunder, which is continuing, speedy relief in the form of any of the orders specified in Article 13 of the Cape Town Convention and Article X of the Protocol as the Lessor shall determine in its sole and absolute discretion, subject to any procedural requirements prescribed by the Applicable Regulations. The Lessee hereby consents to the exercise by the Lessor of the remedies granted herein and in the Cape Town Convention (in accordance with the terms of the Cape Town Convention). The Lessee and the Lessor hereby agree that paragraph 2 of Article 13 of the Cape Town Convention shall not apply to this Agreement or to the exercise of any remedy by the Lessor under this Agreement or the Cape Town Convention. The Lessee agrees to immediately discharge, upon demand by the Lessor, and agrees that the Lessor is empowered to immediately discharge, any registration made with the International Registry regarding this Agreement, the Transaction Documents and any other arrangements contemplated thereunder.
 
20.2	Interim Remedies	
The Lessee agrees that if an Event of Default occurs which is continuing:
 
 	20.2.1	in addition to all other remedies available, the Lessor will be entitled to obtain any of the orders specified in Article 20(1) of the Cape Town Convention and that Article 20(4) of the Cape Town Convention will not apply; and	
 
 	20.2.2	the Lessor may procure the de-registration of the Aircraft, its export and physical transfer from the territory in which it is situated.	
 
20.3	Payments	
If an Event of Default occurs and, as a result of such Event of Default, the Lessor terminates the leasing of the Aircraft under this Agreement or, to the extent expressly provided in Clause 21 ( Illegality ), the Lessee will indemnify the Lessor and pay to the Lessor from time to time on demand against any Loss which the Lessor or the Owner Participant may sustain or incur directly or indirectly as a result of such Event of Default, including (without duplication):
 
 	20.3.1	all Rent, Maintenance Payments and other amounts which are or become due and payable (including under this Clause 20.3) under the Transaction Documents to which the Lessee is a party prior to the earlier to occur of the date the Lessor or the Owner Participant sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to Clause 20.3.2 below	
 
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 	and all other amounts payable under this Clause 20.3 and the Lessor has been tendered or otherwise has obtained uncontested and unfettered possession of the Aircraft but without regard to the condition thereof (the “ Reference Date ”);	
 
 	20.3.2	an amount equal to the aggregate Rent for the remainder of the Lease Period (determined without reference to any right of the Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by the Lessee to the Lessor, less the applicable amount set forth below:	
 
 	(Y)	in the event that the Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, the Lessor or the Owner Participant reasonably regards as being substantially similar to the terms of this Agreement, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Lease Period (determined without reference to any right of the Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by the Lessee;	
 
 	(Z)	in the event that the Lessor or the Owner Participant has not re-let the Aircraft, or the Lessor has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, the Lessor and the Owner Participant do not reasonably regard as being substantially similar to the terms of this Agreement, an amount equal to the Fair Market Rental Value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the Reference Date and ending with the date that the Lease Period was scheduled to expire (determined without reference to any right of the Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by the Lessee.	
The “ Fair Market Rental Value ” of the Aircraft shall be the then “As is, Where is” rental value which would be obtained in an arm’s-length transaction between an informed and willing lessee under no compulsion to lease, and an informed and willing lessor in possession under no compulsion to lease, based upon the actual condition and location of the Aircraft and the then existing market conditions and assuming an immediate delivery to the lessee and a lease term equal to the remaining Lease Period of this Agreement determined by an appraisal completed in accordance with the Appraisal Procedure. The “ Appraisal Procedure ” shall mean an appraisal of the Aircraft prepared on the basis of market practices and procedures and the code of ethics established by the International Society of Transport Aircraft Traders and delivered by an internationally recognized reputable firm of independent aircraft appraisers
 
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experienced in appraising aircraft of the make and model of the Aircraft, selected by the Lessor and the Owner Participant. The fees and expenses of the appraiser shall be paid by the Lessee. Notwithstanding the foregoing, “Fair Market Rental Value” shall be deemed to be zero if the Lessor does not have possession and effective control over the Aircraft for release or sale thereof;
 
 	20.3.3	without duplication of the amounts payable elsewhere under this Section 20.3, in lieu of exercising its rights above with respect to the Airframe or any Engine, or any Part thereof, the Lessor, by written notice to the Lessee specifying a purchase date (the “ Default Purchase Date ”), cause the Lessee to pay to the Lessor, and the Lessee in such event shall pay to the Lessor, on the Default Purchase Date, as liquidated damages for loss of a bargain and not as a penalty, in lieu of future Rent (but not in respect of other damages) for the Aircraft payable for all periods commencing on or after the Default Purchase Date, the following amounts:	
 
 	(i)	all unpaid Rent due and payable at any time before the Default Purchase Date specified in such notice, but not including any portion of Rent allocable to any period following the Default Purchase Date; plus	
 
 	(ii)	the Agreed Value of the Aircraft as of the Default Purchase Date; plus	
 
 	(iii)	interest on the amounts specified in the foregoing clause (i) at the Interest Rate from and including the date on which any such amount was due to the date of payment of such amount; plus	
 
 	(iv)	interest on the amount specified in the foregoing clause (ii) at the Interest Rate from and including the Default Purchase Date specified in such notice to the date of payment of such amount.	
Upon Lessee’s payment in full of the foregoing amounts and all other Rent then due and payable (other than any portion of Rent allocable to any period following the Default Purchase Date), Lessor shall transfer to the Lessee or its designee the Aircraft in accordance with Clause 15.2.2(c)
 
 	20.3.4	an amount equal to the Lessor’s and the Owner Participant’s actual or reasonably anticipated costs, expenses and other incidental damages and losses associated with the Lessor’s exercise of its remedies under this Agreement or otherwise incurred by the Lessor or the Owner Participant as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and, without duplication, any costs to place the Aircraft in the return condition) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in the Redelivery Condition or in the location provided for in this Agreement, or otherwise, and, without duplication, any	
 
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 	loss, cost, expenses or liability, or damage to the Lessor’s or the Owner Participant’s residual interest in the Aircraft, sustained by the Lessor or the Owner Participant due to the Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or the Lessee’s failure to redeliver the Aircraft in the Redelivery Condition, including any consequential loss of profits (“ Enforcement and Remarketing Costs ”); and	
 
 	20.3.5	without duplication, such additional amount, if any, as may be necessary to place the Lessor and the Owner Participant in the same economic position as the Lessor and the Owner Participant would have been in if the Lessee had timely performed each of its obligations under this Agreement;	
 
 	20.3.6	without duplication, all costs and expenses incurred by the Lessor in recovering possession of the Aircraft and in carrying out any works or modifications required to put the Aircraft into the Redelivery Condition and in storing and insuring the Aircraft following such repossession;	
 
 	20.3.7	all legal fees and out-of-pocket expenses, stamp, documentary, registration or other like duties, taxes or charges incurred by the Lessor and/or the Lessor’s professional advisers, in connection with enforcing, protecting, or preserving (or attempting to enforce, perfect, protect or preserve) any of the Lessor’s rights, or in suing for or recovering any sum, under the Transaction Documents;	
 
 	20.3.8	without duplication, any Break Costs.	
 
 	20.3.9	without duplication, any incremental amount of principal, interest, fees or other sums whatsoever paid or payable on account of funds borrowed in order to carry any unpaid amount; and	
 
 	20.3.10	without duplication, all Losses (including any loss of profit) suffered by the Lessor or the Owner Participant because of the Lessor’s inability to re-lease or sell the Aircraft concurrently with the Expiry Date as a result of the Lessee’s failure to redeliver the Aircraft on the date and in the condition provided herein. The Lessor will use reasonable efforts to mitigate such Losses (to the extent within its control to do so), but (i) the Lessor shall not be obliged to consult with the Lessee concerning any proposed course of action or to notify the Lessee of the taking of any particular action, and (ii) this provision is without prejudice to the Lessor’s rights under Clause 20.4 ( Sale or re-lease of the Aircraft ).	
 
20.4	Sale or re-lease of the Aircraft	
Without prejudice to the obligations of the Lessor under Clause 20.3 above, upon any termination described in Clauses 20.1 ( Rights ) or 21 ( Illegality ) the Lessor may sell or re-lease or otherwise deal with the Aircraft at such time and in such manner and on such terms as the Lessor considers appropriate in its absolute discretion, free and clear of any interest of the Lessee, as if this Agreement had never been entered into. Except as set forth in Clause 20.3.10, the Lessor shall have no obligation or duty to sell the Aircraft and the Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC.
 
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20.5	Deregistration	
Upon any such termination as is mentioned in Clauses 20.1 ( Rights ) or 21 ( Illegality ), the Lessee shall cooperate with the Lessor to enable the Lessor to effect or cause to be effected deregistration of the Aircraft from the State of Registration and the export of the Aircraft from the country where the Aircraft is for the time being situated and any other steps reasonably necessary to enable the Aircraft to be redelivered to the Lessor in accordance with this Agreement. Without limiting the foregoing, the Lessor may take any and all actions provided for in any Deregistration Power of Attorney executed by or on behalf of the Lessee.
 
20.6	No Exclusive Remedy : No remedy referred to in this Clause 20 is intended to be exclusive, but, to the extent permissible under this Agreement or under any Applicable Regulations, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to the Lessor at law or in equity or under the Cape Town Convention and in the Lessor’s sole and absolute discretion; and the exercise by the Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by the Lessor of any or all of such other remedies. No waiver by the Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future subsequent Default or Event of Default.	
 
21.	ILLEGALITY	
If as a result of any change in Applicable Regulations after the date of this Agreement it becomes unlawful for the Lessor or the Lessee to give effect to any of their material obligations as contemplated by this Agreement or any other Transaction Document, the either party may give notice thereof to the other and the parties hereto shall negotiate in good faith to restructure the transactions contemplated herein and amend this Agreement in order to lawfully address such illegality event with the same commercial effect as this Agreement; provided, however, that if such negotiations are unable to produce a satisfactory outcome for both the Lessor and the Lessee within 60 days of the original notice of illegality, then either may, by notice in writing to the other within 90 days of the original notice of illegality, terminate the leasing of the Aircraft under this Agreement, such termination to take effect on the latest date (the “ Effective Date ”) on which the Lessor or the Lessee, as the case may be, may continue such leasing and such obligations without being in breach of Applicable Regulations, and the Lessee will forthwith redeliver the Aircraft to the Lessor in accordance with Clause 18 ( Return of the Aircraft ) and, if and only if, such illegality is under Mexican Regulations or otherwise in any way relates to Mexico (whether under US Regulations or Irish Regulations or otherwise), or to the status of the Lessee (including the nationality of the owner or its activities), Lessee shall pay to the Lessor amounts equal to those specified in Clause 20.3 ( Payments ). In all cases, the provisions of Clause 20.4 ( Sale or re-lease of the Aircraft ) and 20.5 ( Deregistration ) shall apply in respect of any such termination.
 
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22.	DISCLAIMER	
 
22.1	Disclaimers	
THE LESSOR AND THE LESSEE AGREE THAT AS BETWEEN LESSOR AND THE OTHER INDEMNITEES AND LESSEE THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN CLAUSES 22.2 (EXCLUSION) TO 22.6 (CONFIRMATION) SHALL APPLY AT ALL TIMES WITH EFFECT FROM THE LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH CLAUSE 4, WHICH SHALL BE CONCLUSIVE EVIDENCE THAT THE LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS ARE AS BETWEEN THE LESSOR (AND THE OTHER PROTECTED PARTIES, AS DEFINED BELOW) AND THE LESSEE, TECHNICALLY ACCEPTABLE TO THE LESSEE AND SATISFY THE DELIVERY CONDITION SPECIFICATION AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY THE LESSEE.
 
22.2	Exclusion	
THE AIRCRAFT IS TO BE LEASED AND DELIVERED “AS IS, WHERE IS”, THAT IS IN ITS ACTUAL STATE AND CONDITION AT DELIVERY AND THE LESSEE AGREES AND ACKNOWLEDGES THAT, SAVE AS EXPRESSLY STATED IN THIS AGREEMENT:
 
 	22.2.1	AS BETWEEN LESSOR AND THE OTHER INDEMNITEES AND LESSEE, NONE OF THE LESSOR, THE OWNER PARTICIPANT, THE SECURITY TRUSTEE, THE FINANCIERS, THE SERVICER OR ANY OTHER INDEMNITEE (COLLECTIVELY, THE “ PROTECTED PARTIES ”) WILL HAVE ANY LIABILITY TO THE LESSEE OR ANY OTHER PERSON IN RELATION TO, AND NO PROTECTED PARTY HAS MADE OR GIVEN, NOR WILL BE DEEMED TO HAVE MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, OR ANY ENGINE OR PART UNDER THIS AGREEMENT, INCLUDING (BUT NOT LIMITED TO) THE DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, SATISFACTORY QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, CONDITION, OR DESIGN OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY FROM A COURSE OF PERFORMANCE, DEALING, USAGE OR TRADE WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR PART OR ANY SERVICES PROVIDED BY THE LESSOR OR THE OWNER PARTICIPANT UNDER THIS AGREEMENT); AND	
 
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 	22.2.2	NO PROTECTED PARTY WILL HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO THE LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OF THE PROTECTED PARTIES OR OTHERWISE) (EXCLUDING, HOWEVER, ACTS OR OMISSIONS CONSTITUTING SUCH PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT THAT IS NOT ATTRIBUTABLE TO AN INTEREST IN THE AIRCRAFT OR THIS AGREEMENT) FOR:	
 
 	(a)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH;	
 
 	(b)	THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO;	
 
 	(c)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(d)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT.	
 
22.3	Waiver	
THE LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND THE PROTECTED PARTIES:
 
 	22.3.1	ALL ITS RIGHTS IN RESPECT OF ANY CONDITION, WARRANTY OR REPRESENTATION), EXPRESS OR IMPLIED, ON THE PART OF THE PROTECTED PARTIES; AND	
 
 	22.3.2	ALL CLAIMS AGAINST THE PROTECTED PARTIES, HOWEVER AND WHENEVER ARISING	
IN EACH CASE, IN RESPECT OF OR OUT OF ANY OF THE MATTER REFERRED TO IN CLAUSE 22 ( DISCLAIMER ).
 
22.4	DISCLAIMER OF CONSEQUENTIAL DAMAGES	
EACH PARTY AGREES THAT IT SHALL NOT BE ENTITLED TO RECEIVE AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER LOST PROFITS, LOST REVENUE OR OTHER CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED
 
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BREACH BY THE OTHER PARTY OR THE OWNER PARTICIPANT OF ANY OF THE AGREEMENTS CONTAINED IN THIS AGREEMENT: PROVIDED HOWEVER NOTWITHSTANDING THE FOREGOING THE LESSOR AND THE OWNER PARTICIPANT SHALL IN ALL CASES BE ENTITLED TO RECOVER ANY AND ALL DAMAGES DESCRIBED IN CLAUSE 20 IN CONNECTION WITH AN EVENT OF DEFAULT.
 
22.5	NO DUTIES	
THE LESSEE ACKNOWLEDGES AND AGREES THAT NEITHER OF THE LESSOR NOR THE OWNER PARTICIPANT HAS ANY FIDUCIARY OR OTHER DUTIES TO LESSEE WHATSOEVER, AND THAT THE LESSOR AND THE OWNER PARTICIPANT’S ONLY OBLIGATIONS TO THE LESSEE ARE THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN.
 
22.6	CONFIRMATION	
THE LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE 22 ( DISCLAIMER ) AND ACKNOWLEDGES THAT THE RENT AND OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT HAVE BEEN CALCULATED BASED ON ITS PROVISIONS.
 
23.	ASSIGNMENT AND TRANSFER	
 
23.1	Benefit of Agreement	
This Agreement shall be binding on and ensure to the benefit of the parties hereto and their respective successors and permitted transferees and assignees.
 
23.2	No Lessee Transfer or Security Interest	
THE LESSEE WILL NOT ASSIGN, NOVATE, DELEGATE OR OTHERWISE TRANSFER (WHETHER VOLUNTARILY OR INVOLUNTARILY, BY OPERATION OF LAW (EXCEPT AS EXPRESSLY PERMITTED BY CLAUSE 19.1.9) OR OTHERWISE) OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST (OTHER THAN PERMITTED SECURITY INTERESTS) OVER ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT.
 
23.3	Transfer by the Lessor	
 
 	23.3.1	Subject to Clauses 23.4 ( Conditions to any Absolute Assignment ), 23.5 ( Conditions to Assignment by the Owner Participant ), 23.6 ( Conditions to any Security Transfer ), 23.7 ( Conditions to any Head Lease ), 23.8 ( Introduction/Change of Financiers ) and 23.10 ( Conditions to Change of Financiers ), the Lessor may:	
 
 	(a)	assign, charge, transfer or declare a trust over all or any part of its rights under this Agreement and the other Transaction Documents by way of security for its obligations to any Financier under the Financing Documents (a “ Security Transfer ”); or	
 
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 	(b)	sell, assign or otherwise transfer (whether by way of outright sale or for the purposes of effecting any financing arrangements) all or any part of its right, title and interest in and to the Aircraft to any person including, without limitation, on terms whereby the Lessor continues to lease the Aircraft to the Lessee pursuant to this Agreement (and in connection therewith the Lessor may assign, charge, transfer or declare a trust over all or any part of its rights under this Agreement and the other Transaction Documents by way of security for its obligations to the owner (a “ Head Lease ”)); or	
 
 	(c)	sell, assign or otherwise transfer all or any part of its right, title or interest in and to the Aircraft or all or any part of its rights and obligations under this Agreement and the other Transaction Documents to any assignee (an “ Absolute Assignment ”).	
 
 	23.3.2	Subject to Clauses 23.4 ( Conditions to any Absolute Assignment ), 23.5 ( Conditions to Assignment by the Owner Participant ), 23.6 ( Conditions to any Security Transfer ), 23.7 ( Conditions to any Head Lease ), 23.8 ( Introduction/Change of Financiers ) and 23.10 ( Conditions to Change of Financiers ), the Lessee shall from time to time upon request from the Lessor, at the Lessor’s cost as hereinafter provided:	
 
 	(a)	execute any agreements, acknowledgements or other instruments (including, without limitation, any supplement or amendment to this Agreement) and take any other action which may be reasonably required or requested in order to give effect to or perfect any Security Transfer, Head Lease, Absolute Assignment or OP Assignment;	
 
 	(b)	in the case of an Absolute Assignment:	
 
 	(i)	enter into an assignment agreement with the Lessor and the assignee, reasonably acceptable to Lessee, under which the Lessor assigns to the assignee the applicable rights and, if applicable, of the Lessor under this Agreement arising on or after the effective time of such transfer, and the Lessor either retains all the Lessor’s obligations under this Agreement or retains the Lessor’s obligations as assumed by the assignee; and	
 
 	(ii)	deliver to the Lessor (or as the Lessor directs) conditions precedent reasonably requested in connection with such assignment agreement, including without limitation revised insurance certificates;	
 
 	23.3.3	Notwithstanding any Security Transfer, Head Lease, Owner Participant Assignment or Absolute Assignment, (for the purposes of this Clause 23.3.3 a “ Relevant Transfer ”), the Lessor or Owner Participant effecting such Relevant Transfer (and its related Indemnitees) shall remain Indemnitees and entitled to the benefit of each indemnity expressed to be for the benefit of the Indemnitees under the Transaction Documents and to the liability insurance cover required by Clause 17 (Insurance) provided that in the case of an Absolute Assignment or Owner Participant Assignment such entitlement shall end the second anniversary of the Absolute Assignment or Owner Participant Assignment.	
 
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23.4	Conditions to any Absolute Assignment	
In relation to any Absolute Assignment by the Lessor:
 
 	23.4.1	the assignee shall have or shall be guaranteed by an entity that has a tangible net worth of at least ***** on the date of the assignment;	
 
 	23.4.2	the Lessor will procure that any new owner holding title to the Aircraft (save where such new owner is also the “Lessor” hereunder) shall have executed and delivered to the Lessee an undertaking substantially in the form of Clause 7.1 ( Quiet enjoyment ) upon acquiring such title;	
 
 	23.4.3	the transferring Lessor, upon receipt of reasonably satisfactory documentary evidence, shall reimburse to the Lessee an amount equal to its out-of-pocket costs reasonably incurred and reasonable legal expenses properly incurred by the Lessee in connection with such Absolute Assignment;	
 
 	23.4.4	if applicable, the obligations of the Lessor under the Transaction Documents and which arise from and after any such Absolute Assignment shall have been assumed by the assignee; provided that, the transferring Lessor shall remain liable for any and all obligations of “Lessor” arising prior to (or otherwise not assumed by the assignee pursuant to) such Absolute Assignment;	
 
 	23.4.5	the assignee shall have agreed to be bound by, and exercise its rights in and to the Aircraft and this Lease in accordance with, the terms and conditions set forth herein;	
 
 	23.4.6	as at the date of such Absolute Assignment, the Lessee will not be in breach of any Applicable Regulations as a consequence of such Absolute Assignment; and	
 
 	23.4.7	the Lessee will execute and deliver in favor of any such new Financiers the Notice and Acknowledgement;	
 
 	23.4.8	the Lessee shall incur no greater financial obligations under this Agreement as a result of such Absolute Assignment, based on applicable laws in effect as at the date of such sale, assignment, transfer, novation or disposal, provided that this paragraph shall not apply to any increase in the number of Indemnitees or the compliance by the Lessee with its obligations under Clauses 23.3.2(b)(ii).	
 
 	23.4.9	the assignee will not be an air carrier in competition with Lessee or be domiciled in an Excluded Country, and it or one of its affiliates will be experienced in, or be assisted by a servicer or other advisor with experience in cross-border aircraft leasing; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	23.4.10	either the assignee will be (a) a “Citizen of the United States” within the meaning of Section 40102(a)(15)(c) of Title 49 or (b) will, by means of a control, voting trust, voting powers or similar arrangement cause the Aircraft to be eligible for registration with the FAA, if the Aircraft is so registered at such time.	
 
23.5	Conditions to the Assignment by the Owner Participant	
In relation to any assignment by the Owner Participant of all or any part of its interest in and of the Trust Estate and/or the Trust Agreement (the “ OP Assignment ”):
 
 	23.5.1	the assignee shall have or shall be guaranteed by an entity that has a tangible net worth of at least ***** on the date of the assignment;	
 
 	23.5.2	the Owner Participant will procure that any new owner participant shall have executed and delivered to the Lessee an undertaking substantially in the form of Clause 7.1 ( Quiet enjoyment ) upon acquiring such title;	
 
 	23.5.3	the transferring Owner Participant, upon receipt of reasonably satisfactory documentary evidence, shall reimburse to the Lessee an amount equal to its out-of-pocket costs reasonably incurred and reasonable legal expenses properly incurred by the Lessee in connection with such OP Assignment;	
 
 	23.5.4	the obligations of the Owner Participant under the Transaction Documents and which arise from and after any such OP Assignment shall have been assumed by the assignee; provided that, the transferring Owner Participant shall remain liable for any and all obligations of “Owner Participant” arising prior to (or otherwise not assumed by the assignee pursuant to) such OP Assignment;	
 
 	23.5.5	the assignee shall have agreed to be bound by, and exercise its rights in and to the Aircraft and this Agreement in accordance with the terms and conditions set forth herein;	
 
 	23.5.6	as at the date of such OP Assignment, the Lessee will not be in breach of any Applicable Regulations as a consequence of such OP Assignment; and	
 
 	23.5.7	the Lessee shall incur no greater financial obligations under this Agreement as a result of such OP Assignment, based on applicable laws in effect as at the date of such OP Assignment, provided that this paragraph shall not apply to any increase in the number of Indemnitees or the compliance of the Lessee with its obligations under Clause 23.3.2(b)(ii).	
 
 	23.5.8	the assignee will not be an air carrier in competition with Lessee or be domiciled in an Excluded Country, and it or one of its affiliates will be experienced in, or be assisted by a servicer or other advisor with experience in cross-border aircraft leasing; and	
 
 	23.5.9	either the assignee will be (a) a “Citizen of the United States” within the meaning of Section 40102(a)(15)(c) of Title 49 or (b) will, by means of a	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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 	control, voting trust, voting powers or similar arrangement cause the Aircraft to be eligible for registration with the FAA, if the Aircraft is so registered at such time.	
 
23.6	Conditions to any Security Transfer	
In relation to any Security Transfer by the Lessor:
 
 	23.6.1	the Lessor will procure that any assignee holding title to, or a Security Interest over, the Aircraft shall have executed and delivered to the Lessee a quiet enjoyment undertaking substantially in the form of set out in Annex 2 of Schedule 10 ( Confirmation of Quiet Enjoyment ) upon acquiring such title or Security Interest;	
 
 	23.6.2	the Lessor, upon receipt of reasonably satisfactory documentary evidence, shall reimburse to the Lessee an amount equal to its out-of-pocket costs reasonably incurred and reasonable legal expenses properly incurred by the Lessee in connection with such Security Transfer;	
 
 	23.6.3	as at the date of such Security Transfer, the Lessee will not be in breach of any Applicable Regulations as a consequence of such Security Transfer; and	
 
 	23.6.4	the Lessee shall incur no greater financial obligations under this Agreement as a result of such Security Transfer, based on applicable laws in effect as at the date of such Security Transfer, provided that this paragraph shall not apply to any increase in the number of Indemnitees or the compliance of the Lessee with its obligation under Clause 23.3.2(b)(ii).	
 
23.7	Conditions to any Head Lease	
In relation to any Head Lease by the Lessor
 
 	23.7.1	the Lessor will procure that any new owner holding title to the Aircraft shall have executed and delivered to the Lessee an undertaking substantially in the form of Clause 7.1 ( Quiet enjoyment ) (or such other form as the Lessee, acting reasonably, may agree with such assignee) upon acquiring such title;	
 
 	23.7.2	the Lessor, upon receipt of reasonably satisfactory documentary evidence, shall reimburse to the Lessee an amount equal to its out-of pocket costs reasonably incurred and reasonable legal expenses properly incurred by the Lessee in connection with such Head Lease;	
 
 	23.7.3	as at the date of such Head Lease, the Lessee will not be in breach of any Applicable Regulations as a consequence of such Head Lease; and	
 
 	23.7.4	the Lessee shall incur no greater financial obligations under this Agreement as a result of such Head Lease, based on applicable laws in effect as at the date of such Security Transfer, provided that this paragraph shall not apply to any increase in the number of Indemnitees or the compliance of the Lessee with its obligation under Clause 23.3.2(b)(ii).	
 
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23.8	Introduction/Change of Financiers	
 
 	23.8.1	Subject to Clause 23.10 ( Conditions to Change of Financiers ), the Lessee acknowledges that the Lessor, the Owner Participant and/or the Financiers may from time to time finance or refinance the Aircraft and/or restructure the financing arrangements contemplated by the Financing Documents (which may include, without limitation, the imposition or substitution of any Head Lease or a tax structured lease, tranched debt, sale of receivables or securitisation) and may, in connection therewith, enter into new Financing Documents. Prior to the time of completion of any such financing or restructuring, the Lessor shall deliver a written notice (a Financing Notice) to the Lessee identifying the new Financiers, and the Lessee shall (without prejudice to the Lessee’s obligations under Clause 12.1 ( Title protection )):	
 
 	(a)	at the Lessor’s cost, make all such filings and registrations as may be necessary or reasonably advisable, as requested by the Lessor, in each relevant jurisdiction to perfect or protect the priority of any security interest constituted by any new Financing Document;	
 
 	(b)	at the Lessor’s cost, replace the name plates required by Clause 12.1 ( Title protection ) to record any change in the identity of any relevant Finance Party (if appropriate); and	
 
 	(c)	procure a revised certificate of insurance naming the new Financiers as additional insured and noting any new Financing Document.	
 
 	23.8.2	If, pursuant to the introduction of, or a change in the identity of, any Financiers in accordance with the terms of this Agreement, a person ceases to be a Financier, notwithstanding such change, such person (and its related Indemnitees) shall remain Indemnitees and entitled to the benefit of each indemnity expressed to be for the benefit of the Indemnitees and to the liability insurance cover required by Clauses 17 ( Insurance ), 23 ( Assignment and Transfer ) and Schedule 7 ( Insurance Requirements ) until the second anniversary of such change.	
 
23.9	Financing Documents	
The Lessee acknowledges that the Lessor will not be obliged to disclose the content of, or provide copies of, any Financing Document to the Lessee.
 
23.10	Conditions to Change of Financiers	
In connection with any change of Financiers detailed in Clause 23.8 ( Introduction/Change of Financiers ):
 
 	23.10.1	the Lessor will procure that any new Financiers holding title to, or a Security Interest over, the Aircraft shall have executed and delivered to the Lessee a quiet enjoyment undertaking substantially in the form set out in Annex 2 of Schedule 10 ( Confirmation of Quiet Enjoyment ) upon acquiring such title of such Security Interest;	
 
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 	23.10.2	as at the date of such change, the Lessee will not be in breach of any Applicable Regulations as a consequence of such change;	
 
 	23.10.3	the Lessor, upon receipt of reasonably satisfactory documentary evidence, shall reimburse to the Lessee an amount equal to its reasonable out-of pocket costs and reasonable legal expenses properly incurred by the Lessee in connection with such change of Financiers; and	
 
 	23.10.4	the Lessee shall incur no greater financial obligations under this Agreement as a result of change of Financier, based on applicable laws in effect as at the date of such change, provided that this paragraph shall not apply to any increase in the number of Indemnitees or the compliance by the Lessee with its obligation under Clause 23.3.2(b)(ii).	
 
23.11	No restriction	
Nothing in this Clause 23 ( Assignment and transfer ) shall impose any conditions or restrictions on the Lessor’s rights:
 
 	23.11.1	pursuant to Clause 14.9 ( Tax on indemnity payments ) (to the extent a Head Lease, Security Transfer, Absolute Assignment or a change in Financiers is affected pursuant thereto) or Clause 21 ( Illegality ); or	
 
 	23.11.2	following termination of the leasing of the Aircraft due to an Event of Default pursuant to Clause 20 ( Remedies ).	
 
23.12	Cape Town Convention	
For the purposes of clarification, the Lessee hereby consents to an assignment of associated rights represented by this Agreement in connection with any assignment or other transfer pursuant to Clause 23 for purposes of Article 32 of the Cape Town Convention.
 
24.	MISCELLANEOUS	
 
24.1	Notice	
All notices under or in connection with this Agreement and will unless otherwise stated be given in writing by letter (delivered personally or sent with an internationally recognized courier service), fax, or by electronic mail (including PDF). Any approval, consent or permission from any party hereto must be in writing. Any notice will be deemed to have been delivered as follows.
 
 	24.1.1	if the notice is by letter, it will be effective when delivered personally or where sent with an internationally recognized courier service, on the date shown as the delivery date (or, if delivery was refused, the date of such refusal) in the records of the person who effected such delivery;	
 
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 	24.1.2	if the notice is by fax, it will be effective when it is transmitted and the sender received a good transmission report; and	
 
 	24.1.3	in the case of an electronic mail, at the time of dispatch with confirmed receipt.	
provided always that where delivery by hand or by electronic email occurs after 5:00 p.m. on a Business Day, or on a day which is not a Business Day, service shall be deemed to occur at 9:00 a.m. on the next Business Day
The current address, fax and phone numbers and email address of the Lessor and the Lessee are in Part B of Schedule 7 ( Reporting & notices ) and may only be amended by notice in writing.
 
24.2	Language	
All notices and documents to be given under this Agreement must be in English. If they are not in English, they must be given with a certified English translation. If there is any difference between the English version of this Agreement and any version in any other language, the English version will apply.
 
24.3	Rights	
 
 	24.3.1	The Lessor’s rights under this Agreement may be used as often as the Lessor considers appropriate, are cumulative and apply in addition to its rights under any law.	
 
 	24.3.2	The Lessor only loses any of its rights if it specifically waives them in writing. If the Lessor decides not to use any of its rights or delays in using such rights, that does not mean it cannot exercise such rights at a future date.	
 
24.4	Certificates	
Any certificate or decision given by the Lessor about any rate of interest or any other amount due under this Agreement will be presumed to be correct, save in the case of manifest error.
 
24.5	Application of receipts	
If any amount the Lessee pays or the Lessor recovers from the Lessee under this Agreement is less than the amount then due, the Lessor may use the funds in any proportion the Lessor chooses towards the different amounts due.
 
24.6	Severability	
If a provision of this Agreement is or becomes illegal, invalid or cannot be enforced, in any jurisdiction that will not affect:
 
 	24.6.1	the legality, validity or enforceability in that jurisdiction of any of the other provisions of this Agreement; or	
 
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 	24.6.2	the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Agreement.	
 
24.7	Remedy	
If the Lessee does not carry out any obligation under this Agreement the Lessor may without being obliged to do so, with prior notice to the Lessee and without prejudice to its rights to treat that failure as an Event of Default, carry it out without any responsibility. The Lessee will pay the Lessor’s out-of-pocket cost of so doing promptly on demand.
 
24.8	Expenses	
The Lessee must pay to the Lessor on demand all reasonable out-of-pocket expenses (including (in the case of clause (a) below only reasonable legal and other costs) the Lessor has to pay to:
 
 	24.8.1	any amendment to or extension of or other documentation in connection with, or the granting of any waiver or consent under this Agreement unless requested by the Lessor; or	
 
 	24.8.2	preserve any of the Lessor’s rights under this Agreement; or	
 
 	24.8.3	enforce or the Lessee’s obligations or repossess the Aircraft following the occurrence of an Event of Default which is continuing.	
 
24.9	[Intentionally left blank]	
 
24.10	The whole agreement	
This Agreement is the whole agreement between the Lessor and the Lessee for leasing the Aircraft and replaces all previous agreements. This Agreement can only be amended, supplemented, waived or otherwise modified only by a writing signed by both parties.
 
24.11	Counterparts	
Any Transaction Document may be executed in any number of counterparts and by the parties on separate counterparts. Each counterpart shall constitute an original of the relevant Transaction Document, but together the counterparts shall constitute one document.
 
24.12	Set-off	
 
 	24.12.1	In this Clause 24.12, references to the Lessee include the Affiliates of the Lessee.	
 
 	24.12.2	The Lessor and the Owner Participant may set-off any matured obligation owed by the Lessee under the Transaction Documents or any of the Other Agreements against any obligation (whether or not matured) the Lessor or the Owner Participant or any Affiliate thereof owes the Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, the Lessor may convert either obligation at the market rate of exchange available in London or (at the Lessor’s option) New York.	
 
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 	24.12.3	If an obligation is unascertained or unliquidated, the Lessor may in good faith estimate that obligation and set off in respect of the estimated amount, in which case when the obligation is ascertained or liquidated the Lessor or the Lessee shall make a payment to the other (as appropriate) in respect of any amount by which the ascertained or liquidated amount differs from the estimated amount.	
 
 	24.12.4	Notwithstanding any other provisions of this Agreement, the Lessor, the Owner Participant and their Affiliates shall not be obliged to pay any amount to the Lessee under the Transaction Documents or any of the Other Agreements so long as any sums which are then due and outstanding from the Lessee under the Transaction Documents or any Other Agreements remain unpaid or if any Event of Default has occurred and is continuing, and any such amount which would otherwise be due shall fall due only if and when the Lessee has paid all such sums and cured all Events of Default, except to the extent that the Lessor otherwise agrees in writing or sets off such amounts against such payment pursuant to Clause 24.12.2.	
 
24.13	Lease manager	
The Lessor has appointed the Servicer as its agent to act on its behalf under this Agreement generally. The Lessee shall and shall be entitled to deal with and rely on the instructions and directions of the Servicer (and any replacement servicer) appointed by the Lessor.
 
24.14	Delegation	
The Lessor may delegate to the Servicer or any other person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as the Lessor in its absolute discretion thinks fit.
 
24.15	Further Assurances	
Each party shall, and shall use all reasonable efforts to procure that third parties shall, execute and sign such documents and do such acts and things as any other party hereto shall reasonably request in order to carry out the intended purpose of this Agreement or to establish, perfect, preserve or enforce that party’s rights under this Agreement.
 
24.16	[Intentionally left blank]	
 
25.	LAW	
 
25.1	Law	
PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THIS AGREEMENT AND ANY CLAIM RELATED TO THIS
 
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AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY WHETHER IN CONTRACT OR TORT OR FOR BREACH OF DUTY OR OTHERWISE IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THIS AGREEMENT). THE PARTIES AGREE THAT THIS AGREEMENT WAS DELIVERED IN THE STATE OF NEW YORK.
 
25.2	Jurisdiction	
 
 	25.2.1	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, the Lessee and the Lessor each irrevocably agrees that (i) the United States District Court for the Southern District of New York sitting in The Borough of Manhattan and any New York state court sitting in the County of New York, New York, and all related appellate courts, (ii) the competent courts of the domicile of the Lessee on the date of this Agreement ( Distrito Federal ), and (iii) the courts of the jurisdictions in which the Aircraft at the relevant time is located in the case of enforcement proceedings in respect of remedies hereunder have exclusive jurisdiction to settle any disputes arising out of or relating to this Agreement or any of the other Transaction Documents and submits itself and its property to the jurisdiction of the foregoing courts with respect to such dispute, hereby waiving any other jurisdictions which may be available thereto by reason of domicile or otherwise.	
 
 	25.2.2	This Clause 25 shall survive, continue to take full effect and not merge in any order or judgment and this Clause 25 prohibits either party to bring proceedings against the other in connection with this Agreement or any other Transaction Document in any court other than as provided in Clause 25.2.1 above.	
 
25.3	Process Agent	
 
 	25.3.1	The Lessee appoints Corporation Service Company at 1180 Avenue of the Americas, Suite 210, New York, New York 10036 as its agent for service of process in the State of New York in any suit or proceeding with respect to this Agreement. Each of the Lessor and the Owner Participant appoint Corporation Service Company as its agent for service of process in the State of New York in any suit or proceeding with respect to this Agreement. Each party must maintain a valid agent for service of process in the State of New York from the date of this Agreement until the Expiry Date and may not change the identity of such agent without giving prior notice to the other party hereto.	
 
 	25.3.2	Each party agrees that if its process agent does not notify such party about any court documents served on it, this will not affect the proceeding concerned.	
 
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 	25.3.3	Each party irrevocably consents to the service of process on it by faxing, by prepaid mailing by air mail, certified or registered mail, or by personal delivery of a copy to such party’s process agent at the address above or its address on Schedule 7. The foregoing, however, shall not limit the rights of the other party hereto the service process in any other manner permitted by law.	
 
25.4	Courts	
Each of the Lessee and the Lessor agrees that:
 
 	25.4.1	it will not claim, and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the courts referred to in Clause 25.2.1, and will not claim, and hereby further irrevocably waives any claim, that any such suit, action or proceeding brought in the courts referred to in Clause 25.2.1, has been brought in an inconvenient forum; and	
 
 	25.4.2	a judgment or order of a court referred to in Clause 25.2.1, regarding this Agreement is final and binding and can be enforced elsewhere in the world, subject to applicable laws.	
 
25.5	Intentionally left blank	
 
25.6	Waiver of Sovereign Immunity	
Each of the Lessee and the Lessor irrevocably and unconditionally:
 
 	25.6.1	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement or any other Transaction Document no immunity from such legal proceedings (which will be deemed to include without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement, and any interlocutory proceedings or the execution of any judgment or award arising therefrom) will be claimed by or on behalf of itself or with respect to its assets;	
 
 	25.6.2	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for the purposes of such Act; and	
 
 	25.6.3	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings.	
 
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25.7	Cape Town Immunity	
Each of the Lessee and the Lessor hereby waives any immunity from suit, from the jurisdiction of any court or from any legal or judicial process or remedy and, without limiting the generality of the foregoing, each of the Lessee and the Lessor hereby waives in accordance with Article XXII of the Cape Town Aircraft Protocol any sovereign immunity from jurisdiction of the courts specified in Clause 25.2 ( Jurisdiction ) or relating to the enforcement of rights and interests relating to the Aircraft, the Airframe and/or any Engine.
 
25.8	Waiver of Trial by Jury	
EACH OF THE LESSEE AND THE LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE LESSOR AND THE LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR OTHER MODIFICATIONS TO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO WHICH LESSOR OR LESSEE, AS APPLICABLE, IS A PARTY. IN THE EVENT OF LITIGATION, THIS CLAUSE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 
26.	CONFIDENTIALITY	
The Lessor and the Lessee agree that the Transaction Documents are to be kept confidential. Neither party (including its respective officers, directors, agents and advisors) will disclose any information from or in connection with the Transaction Documents without the consent of the other, except for:
 
 	26.1.1	disclosures made by the Lessor to potential assignees, transferees, financiers and/or rating agencies or to their respective professional advisors, provided that in case of potential assignees, transferees and financiers, each such person has signed a non-disclosure agreement;	
 
 	26.1.2	disclosures made by either party to its professional advisers, servicers, managers or as may be required by Applicable Regulations;	
 
 	26.1.3	disclosure made by the Lessor to its Affiliates; and	
 
 	26.1.4	disclosures made by the Lessee to its Affiliates.	
 
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27.	TRUE LEASE	
The parties intend and agree that this Agreement:
 
 	27.1.1	constitutes a “true lease” and not a “security interest” as defined in Section 1-201(37) of the UCC; and	
 
 	27.1.2	confers only a leasehold interest on the Lessee in and to the Aircraft on and subject to the terms of this Agreement, and no ownership or other interest with respect to the Aircraft is provided to the Lessee under this Agreement.	
The Lessor and the Lessee intend that this Agreement be treated as a “true lease” for United States federal income Tax purposes and for purposes of article 188 of the Ley del Impusto Sobre la Renta and the Lessee shall not file a Tax return that is inconsistent with the provisions of this Clause.
The Lessee hereby authorizes the Lessor to file such UCC-1 or UCC-3 financing statements as the Lessor reasonably deems necessary or desirable to protect the interest of the Lessor or the Security Trustee hereunder; provided that the Lessor shall provide the Lessee with a copy of any such financing statement for review prior to filing.
 
28.	[INTENTIONALLY LEFT BLANK]	
 
29.	TIME IS OF THE ESSENCE	
The time stipulated in this Agreement or the other Transaction Documents for all payments by the Lessee to the Lessor and for the prompt, punctual performance of the Lessee’s other obligations under this Agreement or the other Transaction Documents shall be of the essence for this Agreement or the other Transaction Documents.
 
30.	COUNTERPART	
To the extent, if any, that this Agreement constitutes tangible chattel paper (as such term is defined in the UCC) no security interest in this Agreement may be perfected through the transfer or possession of any counterpart other than the original counterpart, which shall be so identified. Delivery of an executed counterpart of this Agreement by fax or electronic transmission shall be deemed effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Agreement by fax or electronic transmission shall also deliver an originally executed counterpart; however, the failure of any party to deliver an originally executed counterpart of this Agreement shall not affect the validity or effectiveness of this Agreement.
 
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31.	RIGHTS OF THIRD PARTIES	
 
31.1	All rights expressed to be granted to each Indemnitee (other than the Lessor) under this Agreement are given to the Lessor on behalf of that Indemnitee, and each Indemnitee is an express third party beneficiary hereof. Except for the Lessor, the Owner Participant, the Financiers and each Indemnitee, no other Person shall be a third party beneficiary of this Agreement. Without limiting the foregoing and in consideration of the Owner Participant Letter Agreement, the Lessee agrees with the Owner Participant that:	
 
 	31.1.1	the Owner Participant is an express third party beneficiary of all of the obligations and liabilities of the Lessee under and in conformity with this Agreement;	
 
 	31.1.2	all notices and communications given by the Lessee to the Lessor shall also be given to the Owner Participant;	
 
 	31.1.3	any approval, consent, waiver, amendment, supplement or other modification of this Agreement shall require the written consent or instruction of the Owner Participant to be binding against the Lessor, and the Owner Participant agrees that, where the Lessor has agreed to give or not unreasonably withhold such consent or instruction, it shall give such consent or instruction or not unreasonably withhold such consent or instruction. For the avoidance of doubt, any instructions for an approval, consent, waiver, amendment, supplement or other modification of this Agreement issued by the Owner Participant to the Lessor shall be binding on the Lessor;	
 
31.2	Any third party beneficiary who is not a party to this Agreement may enforce the terms of this Agreement expressed to be for the benefit of or given by the Lessee or the Lessor, as applicable, to or in favour of such third party beneficiary.	
 
31.3	All terms of this Agreement may be varied, amended or otherwise released by an agreement between the Lessor and the Lessee without reference to any third party beneficiary.	
 
32.	SURVIVAL	
All indemnities, representations, warranties and other obligations of the Lessee and the Lessor shall survive, and remain in full force and effect, notwithstanding the leasing of the Aircraft hereunder and in the case of Clauses 12, 14, 15, 16, 17, 18, 20, 22, 24 and 25, expiration or other termination of this Agreement.
 
33.	NO BROKERS	
Each of the parties represents and warrants to the other that it has not paid, agreed to pay, or caused to be paid directly or indirectly in any form, any commission percentage contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement to any person (except the fees and expenses of Santos Dumont, the technical advisor of the Owner Participant, for which fees and expenses the Owner Participant shall be solely responsible).
 
34.	STATEMENTS OF OWNER TRUSTEE	
The parties hereto agree that all of the statements, representations, covenants and agreements made by the Owner Trustee (when made in such capacity) contained in this Agreement and any agreement referred to herein, unless expressly otherwise stated, are made and intended only for the purpose of binding the Trust Estate and establishing the existence of rights and remedies which can be exercised and enforced against the Trust Estate. Therefore, anything
 
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contained in this Agreement or such other agreements to the contrary notwithstanding (except for any express provisions that the Owner Trustee is responsible for in its individual capacity), no recourse shall be had with respect to this Agreement or such other agreements against the Owner Trustee in its individual capacity or against any institution or person which becomes a successor trustee or co-trustee or any officer, director, trustee, servant or direct or indirect parent or controlling person or persons of any of them; provided, however, that this Clause 34 shall not be construed to prohibit any action or proceeding against any party hereto for its own wilful misconduct or grossly negligent conduct for which it would otherwise be liable; and provided further, that nothing contained in this Clause 34 shall be construed to limit the exercise and enforcement in accordance with the terms of this Agreement or such other agreements of rights and remedies against the Trust Estate. The foregoing provisions of this Clause 34 shall survive the termination of this Agreement.
 
35.	KNOW YOUR CUSTOMER/OFAC COMPLIANCE	
 
35.1	Anti-Terrorism Law	
 
 	35.1.1	The Lessee represents, warrants and agrees that neither the Lessee nor any of its Affiliates is in violation of any Law relating to terrorism or money laundering (“ Anti-Terrorism Laws ”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “ Executive Order ”), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the “ Patriot Act ”).	
 
 	35.1.2	The Lessee represents, warrants and agrees that neither the Lessee nor any of its Affiliates is any of the following:	
 
 	(a)	a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(b)	a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;	
 
 	(c)	a person with which the Lessor and/or the Owner Participant (without duplication), is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;	
 
 	(d)	a person that commits, threatens or conspires to commit or support “terrorism” as defined in the Executive Order; or	
 
 	(e)	a person that is named as a “special designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“ OFAC ”) at its official website or any replacement website or other replacement official publication of such list.	
The Lessee represents, warrants and agrees that neither the Lessee nor any of its Affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in the preceding paragraph (b),
 
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(ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
 
36.	USA PATRIOT ACT AND OTHER INFORMATION:	
The Lessee agrees that pursuant to the requirements of the Patriot Act, other “Know Your Customer” requirements, money laundering information requirements and similar requirements of Law, the Lessor and/or the Owner Participant (without duplication) may obtain, verify, and record information from the Lessee that identifies the Lessee, which information may include the name and address of the Lessee, and its officers, directors and shareholders, and other information that will allow the Lessor and/or the Owner Participant (without duplication) to identify the Lessee and to perform the appropriate checks in accordance and for purposes of compliance with the Patriot Act, other “Know Your Customer” requirements, money laundering information requirements and similar requirements of Law.
[Signature page follows]
 
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IN WITNESS WHEREOF the Lessor and the Lessee have executed this Agreement both as of the date shown at the beginning of this Agreement.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C.V., as the Lessee 

By:	 	 /s/ Alfonso Ascencio Triujeque	
Name: Alfonso Ascencio	
Title: General Counsel	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee, as the Lessor 

By:	 	 /s/ Scott Rosevear	
Name: Scott Rosevear	
Title: Vice President	
Aircraft Operating Lease Agreement
Signature Page

SCHEDULE 1
DEFINITIONS AND INTERPRETATION
PART A
DEFINITIONS
In this Agreement:
“ Absolute Assignment ” has the meaning given to such term in Clause 23.3.1.
“ Acceptance Certificate ” means the acceptance certificate in substantially the form of Schedule 5 ( Acceptance Certificate ).
“ Act ” means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States of America as enacted in substitution or replacement thereof.
“ Affiliate ” in relation to any person means any person directly or indirectly controlling, controlled by or under common control with that person and includes any trust for which such person or any of its Affiliates is a beneficiary.
“ Agent ” means the person or persons appointed as agent to, or trustee for, any Financiers pursuant to the Financing Documents and any other person identified as an “Agent” for the purposes of this Agreement, as may be notified by the Lessor to the Lessee from time to time.
“ Agreed Value ” has the meaning given to such term in Part D of Schedule 6 ( Payments ).
“ Aircraft ” means the aircraft described in Part A of Schedule 2 ( Aircraft particulars ) (and includes a separate reference to all Engines, Parts and Aircraft Documents except where it would not make sense to interpret the reference to Aircraft in that way).
“ Aircraft Documents ” means the documents, data and records set out in the Annex to the Acceptance Certificate and all additions, renewals, revisions and replacements required or permitted by this Agreement.
“ Aircraft Object ” has the meaning given to such term in the Cape Town Convention.
“ Airframe ” means the Aircraft, excluding the Engines and the Aircraft Documents.
“ Airframe 6Y Structural Check ” means the airframe 6-year check which shall include the completion of the 6 year structural tasks, system and zonal tasks and inspections and all lower level tasks in accordance with the latest revision of the MPD.
“ Airframe 12Y Structural Check ” means the airframe 12-year check which shall include the completion of the 12 year structural tasks, system and zonal tasks and inspections in accordance with the latest revision of the MPD.
“ Airframe Warranties Agreement ” means the agreement entered into or to be entered into on or prior to the Delivery Date, between the Lessor, the Lessee, the Manufacturer and (if applicable) the Security Trustee in respect of the Airframe Warranties.
 
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“ Airframe Warranties ” means the package of airframe warranties specified in the Airframe Warranties Agreement.
“ Airworthiness Directive ” means each airworthiness directive issued by any of the Aviation Authority, EASA or the FAA specifying conditions, limitations or corrective actions to be taken in respect of the Aircraft.
“ Anti-Terrorism Laws ” has the meaning given to such term in Clause 35.1.
“ Applicable Regulations ” means any applicable law, treaty, court order, judgement, decree, regulation, official guideline (including any administrative interpretation or application of any Applicable Regulations), official directive, mandatory requirement or contractual undertaking which takes effect in the relevant circumstances and, without limitation, includes any applicable resolution, directive or embargo of the United Nations, the United States of America, the European Union or any constituent member of either of those bodies.
“ APU ” means the auxiliary power unit installed in the Airframe on the Delivery Date until replaced in accordance with this Agreement and includes any such replacement unit.
“ APU Gas Path Refurbishment ” means, in respect of the APU, the performance of a shop visit which shall include a gas path refurbishment in accordance with the then current overhaul manual to a zero time inspection criteria, with a scheduled Life Limited Part and Airworthiness Directive release of no less than 6,000 Cycles and 3 years and on-condition release of no less than 9,000 APU Operating Hours, and 6,000 Cycles and 3 years.
“ APU Operating Hour ” means each hour or part thereof elapsing from the moment the APU is started to the moment when the APU is shut down as recorded on the APU Data Memory Module (DMM). For the purposes of all calculations under this Agreement measured in APU Operating Hours, such hours, rounded to the nearest minute, shall be accumulated since the most recent APU Gas Path Refurbishment (or since new if no previous overhaul has been accomplished with respect to the APU).
“ Assignment of Insurances ” means the assignment of insurances entered into, or to be entered into as the context may require, between the Lessee as assignor and the Lessor and/or the Security Trustee as assignee.
“ Assignment of Reinsurances ” means the assignment of reinsurances entered into, or to be entered into as the context may require, between the insurer as assignor and the Lessor and/or the Security Trustee as assignee.
“ Available Balance ” has the meaning given to that term in paragraph 5(c) of Part B of Schedule 6 ( Payments ).
“ Aviation Authority ” means each of the authorities which, under the Applicable Regulations of the State of Registration may from time to time control or supervise civil aviation in State of Registration or exercise jurisdiction over matters relating to the Aircraft.
“ Bankruptcy Code ” means Title 11 of the United States Code, as amended from time to time, and any successor statute.
 
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“ Base Lease Term ” means the period beginning on and including the Delivery Date and ending on the Scheduled Expiry Date, or such earlier date on which the Lease Period terminates in accordance with the provisions of this Agreement.
“ Bill of Sale ” means the warranty bill of sale in respect of the Aircraft executed by the Seller in favour of the Lessor pursuant to the Purchase Agreement.
“ Break Costs ” means any Loss, premium or penalty which the Lessor, the Owner Participant (or any of their Affiliates) may have to pay in order to repay funds raised to finance the Aircraft or in unwinding (or maintaining or continuing to make payments under) any swap, hedge, cap, forward interest agreement or other financial instrument entered into in whole or in part in connection with the leasing or financing of the Aircraft in each case in connection with a delay in delivery (not caused by a default by the “buyer” under the Purchase Agreement), an Event of Default or a Total Loss.
“ Broker’s Letter of Undertaking ” means an undertaking from the Insurance Broker in the form as recognised by the Lloyds Insurance Broker’s Committee or otherwise reasonably acceptable to the Lessor and any Security Trustee.
“ Business Day ” means:
 
(a)	a day (other than a Saturday or Sunday) on which business of the nature required by this Agreement is carried out in Dublin, London, México City and New York.	
 
(b)	where used in relation to payments, a day (other than a Saturday or Sunday) on which banks are open for business in New York and México City; and	
 
(c)	where used in relation to determination of LIBOR, a day (other than a Saturday or Sunday) on which banks are open for business in London.	
“ Cape Town Convention ” means the English language version of the Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment signed at Cape Town, South Africa on 16 November 2001.
“ C Check ” means a major inspection of the Aircraft (and resulting repairs, if any), as defined in the Manufacturer’s MPD.
“ C Check Date ” means the date on which the first C Check of the Aircraft is accomplished which shall be no later than the day that is the twentieth (20th) month anniversary of the Delivery Date.
“ Citizen of the United States ” has the meaning set forth in Section 40102(a)(15)(c) of the Title 49 of the United States Code.
“ Claim ” has the meaning given to such term in Clause 14.8 ( Notification ).
“ Code ” means the United States Internal Revenue Code of 1986, as amended.
“ Cut-Off Date ” means the last day of the ninth (9 th ) month after the month in which the Scheduled Delivery Date is stated to occur.
 
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“ Cycle ” means (i) with respect to the Airframe, one take-off and landing of the Aircraft, (ii) with respect to an Engine, one take-off and landing of the aircraft on which the relevant Engine is installed (each “touch and go” will be one Cycle).
“ Default ” means an Event of Default or any event which, with the giving of notice, lapse of time, determination of materiality or fulfilment of any other applicable condition, may constitute an Event of Default.
“ Default Rate ” means the rate per annum which is four per cent (4%) above one month Dollar LIBOR.
“ Delegation Letter ” means the delegation letter entered into or to be entered into among the Manufacturer and the Seller whereby the Lessor and the Lessee shall, amongst other things, be permitted to attend and observe the acceptance tests of the Aircraft at the Manufacturer’s facility.
“ Delivery ” means the delivery of the Aircraft to and its acceptance by the Lessee under this Agreement, as evidenced by execution of the Acceptance Certificate by the Lessee.
“ Delivery Condition ” means the condition and requirements in respect of the Aircraft at Delivery, as described in Schedule 4 ( Aircraft Specifications and delivery ).
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means the Manufacturer’s facilities in Toulouse, France.
“ Deregistration Power of Attorney ” means a duly executed (and if applicable, duly notarized) irrevocable power of attorney from the Lessee and, if applicable, any Permitted Sublessee, in favour of the Lessor and any Security Trustee, in form and substance reasonably satisfactory to the Lessor and the Security Trustee, empowering the Lessor or any Security Trustee:
 
(a)	to de-register the Aircraft n the name of the Lessee from the aircraft register in the State of Registration;	
 
(b)	to export the Aircraft from the State of Registration; and	
 
(c)	to take any action required to release the Aircraft from any Security Interest and to take all action which the Lessor or the Security Trustee considers necessary or desirable in relation thereto. The Lessor agrees that it shall use such power of attorney only if an Event of Default has occurred and is continuing.	
“ DGAC ” means the Mexican Dirección General de Aeronáutica Civil .
“ Discount Rate ” means 6% (six percent) per annum.
“ Dollars ” or “$” or “US$” means the lawful currency of the United States of America.
“ EASA ” means the European Aviation Safety Agency or any other organisation or authority that, under the laws of the European Union, shall from time to time have jurisdiction over amongst other things, aircraft airworthiness standards for the European Union.
 
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“ EMP ” means the Engine Manufacturer generic Engine Management Programme for the Engines.
“ Engine ” means each engine (whether or not installed on the Airframe) specified in the Acceptance Certificate unless and/or until replaced in accordance with this Agreement.
“ Engine LLPs ” means those Parts, defined by the Engine Manufacturer in the engine manual, or by the FAA or the Aviation Authority through Airworthiness Directives, requiring retirement and subsequent replacement on a mandatory basis prior to or upon the expiration of the Engine Manufacturer’s certified life, such life being expressed in terms of Cycles, Flight Hours, landings or calendar time.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration Shop Visit ” means, in respect of an Engine, a shop visit which shall include a performance restoration of the major modules (at a minimum HPC, CC and HPT modules) in accordance with the then current Engine Manufacturer’s Maintenance Management Plan, with a scheduled Life Limited Parts and Airworthiness Directive release life of no less than 10,000 Cycles and on-condition release of no less than 20,000 Flight Hours and 9,000 Cycles.
“ Engine Warranties ” means a package of engine warranties specified in the Engine Warranties Agreement.
“ Engine Warranties Agreement ” means the agreement entered into or to be entered into on or prior to the Delivery Date, between the Lessor, the Lessee, the Engine Manufacturer and (if applicable) the Security Trustee in relation to the Engine Warranties.
“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation;
“ Event of Default ” means an event specified in Clause 19 ( Events of Default ).
“ Excluded Country ” means, to the extent of such prohibition, any country to which the export or operation to, from or in of an Airbus A320 aircraft is expressly prohibited under any Applicable Regulation from time to time promulgated by any of the United States of America, the European Union or any Government Entity of the State of Registration the effect of which prohibits the export or operation to, from or in of an Airbus A320 aircraft with respect to such country or could impose penalties or other sanctions on Lessor, Owner Participant, Security Trustee or any Financier in connection therewith, including with respect to revenue related thereto. If any such laws restrict, but do not prohibit, export or operation, from or in such country of an Airbus A320 aircraft, failure of the Lessee or any Permitted Sublessee to comply with such restrictions shall result in such country being an Excluded Country and an Event of Default hereunder.
“ Executive Order ” has the meaning given to it in Clause 35.1.
“ Expiry Date ” means:
 
(a)	the Scheduled Expiry Date or if the Lessee exercises the option to extend the leasing of the Aircraft in accordance with Clause 2.6 ( Renewal Option ), the Schedule Renewal Term Expiry Date; or	
 
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(b)	the Total Loss Payment Date; or	
 
(c)	the date on which the leasing, of the Aircraft to the Lessee is expressed to terminate under this Agreement	
whichever is the earlier or, if the Redelivery of the Aircraft has been extended pursuant to Clause 18.2.1, the actual Redelivery Date
“ FAA ” means, as the context requires, the Federal Aviation Administration of the United States of America and/or the Department of Transportation of the United States of America and/or any successor of either of them.
“ FAA Bill of Sale ” means the bill of sale in respect of the Aircraft to be executed by the Seller in favour of the Lessor pursuant to the Purchase Agreement, in due form for filing with the FAA.
“ FAA Counsel ” means Daugherty, Fowler, Peregrin, Haught & Jenson PC.
“ FAA Filed Documents ” means this Agreement, the Trust Agreement, the FAA Bill of Sale (if applicable) and an application for registration of the Aircraft with the FAA in the name of the Lessor.
“ FAA Modification Amount ” means the lesser of (i) an amount equal to the sum of (y) the net cost of the technical and specification modifications (as listed in Schedule 12) required to make the Aircraft eligible to be registered with the FAA, and (z) if applicable, the net cost of the Post Delivery Modifications, and (ii) Lessor Cap.
“ FAA Registration Date ” means the date on which the Aircraft is registered with the FAA, which shall be no later than ten (10) Business Days after the C Check Date.
“ FAR ” means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations.
“ Financial Indebtedness ” means, in respect of any person, any indebtedness for or in respect of:
 
(a)	moneys borrowed;	
 
(b)	any acceptance credit;	
 
(c)	any bond, note, debenture, loan stock or other similar instrument issued by such person;	
 
(d)	any agreement treated as a finance or capital lease in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the Lessee;	
 
(e)	the acquisition cost of any asset to the extent payable more than ninety (90) days after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset;	
 
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(f)	any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing;	
 
(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the market to market value shall be taken into account);	
 
(h)	any counter-indemnity obligation in respect of any guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; or	
 
(i)	any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in the above paragraphs.	
“ Financial Statements ” mean a consolidated balance sheet, cash flow statement and profit and loss statement in each case, prepared in accordance with (and subject to Clause 8.1.1) Mexican GAAP or IFRS, as applicable.
“ Financier ” means any person or persons through which the Lessor or the Owner Participant may from time to time finance or refinance its interest in the Aircraft and/or for whose benefit security over, or rights relating to, the Aircraft and/or any Transaction Document may be granted (including by way of a declaration of trust) by the Lessor or the Owner Participant or at its request, and includes the Security Trustee and the Agent as well as any underwriter, placement agent, or syndication agent and any other person identified as a “Financier” for the purposes of this Agreement, as may be notified by the Lessor to the Lessee from time to time.
“ Financing Documents ” means each present and/or future document which is from time to time related to any financing of the Aircraft (including for such purpose any mortgage or leasing arrangements whether or not constituting a financing and any documents ancillary thereto).
“ Flight Hour ” means:
 
(a)	with respect to the Airframe, each hour or part of an hour elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground; and	
 
(b)	with respect to an Engine, each hour or part of an hour such Engine is operated, elapsing from the moment the wheels of the aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground.	
“ French DGAC ” means the Direction Générale de l’Aviation Civile of France.
“ Government Entity ” means:
 
(a)	any national government, political subdivision thereof, or local jurisdiction therein;	
 
(b)	any instrumentality, board, commission, court, or agency of any thereof, however constituted; and	
 
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(c)	any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.	
“ Gross Negligence ” means any intentional action or decision of a person which is taken or made by such person with reckless disregard for the consequences of such action or decision.
“ Habitual Base ” means México, or (i) if a sublease complying with the terms of Clause 9.2 this Agreement is in effect, and subject to Lessee providing such additional documents as Lessor may reasonably request in connection therewith, such location as set forth in the sublease, or (ii) such other main operational base of the Aircraft agreed by the Lessor (acting reasonably).
“ IATA ” means the International Air Transport Association.
“ IDERA ” means an irrevocable deregistration and export request authorisation, in English and Spanish suitable for filing with the relevant Aviation Authority, substantially in the form referred to in the Cape Town Convention or other in form and substance satisfactory to the Security Trustee and the Lessor.
“ IFRS ” means the International Financial Reporting Standards.
“ Indemnitee ” means the Lessor, the Owner Participant, the Financiers, the Servicer, the Technical Servicer, the Manufacturer, the Seller and any and each of their respective shareholders, subsidiaries, affiliates, partners, directors, agents, employees, members, officers, indemnitees and representatives.
“ Indemnity Letter ” means the indemnity letter from the Owner Participant and the Lessee to the Seller in connection with the Delegation Letter.
“ Insurance ” means the insurance cover (including any reinsurance) to be taken out under Clause 17 ( Insurance ) and Schedule 8 ( Insurance Requirements ).
“ Insurance Broker ” means an insurance broker approved by the Lessor for the purposes of this Agreement.
“ International Registry ” has the meaning given to such term in the Cape Town Convention.
“ Landing Gear ” means the landing gear assembly of the Aircraft, excluding any rotable components.
“ Landing Gear Overhaul ” means the off-wing overhaul and restoration of the entire Landing Gear (including disassembly) to satisfy the system and structural and corrosion requirements in accordance with the latest revision of the MPD.
“ Lease Amendment ” means any agreement entered into between the Lessor and the Lessee in connection with the exercise by the Lessee of the option to extend the leasing of the Aircraft pursuant to Clause 2.6 ( Renewal Option );
“ Lease Period ” means the period commencing on the Delivery Date and ending on the Expiry Date and shall include the Base Lease Term and, if applicable, the Renewal Lease Term.
 
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“ Lessor AD Contribution ” has the meaning given to such term in Part E of Schedule 6 ( Payments ).
“ Lessor Cap ” means an amount equal to Lessor’s Cost less the purchase price paid by the Lessor to the Seller.
“ Lessor’s Cost ” has the meaning given to such term in Part D of Schedule 6 ( Other economic terms ).
“ Lessor Lien ” means any Security Interest over the Aircraft:
 
(a)	created by the Lessor or the Owner Participant through the Lessor or the Owner Participant in connection with the financing of the Aircraft; or	
 
(b)	resulting from acts of or claims against the Lessor or any Indemnitee not relating to the operation of the Aircraft or the transactions contemplated by or permitted under this Agreement (other than as a consequence of the occurrence of a Event of Default) or to any act or omission of the Lessee; or	
 
(c)	a Head Lease or Security Interest created as part of a Security Transfer.	
“ Lessor Tax ” means Taxes:
 
(a)	imposed as a direct result of activities of the Lessor or the Owner Participant in the jurisdiction imposing the liability unrelated to the Lessor’s dealings with the Lessee or to the transactions contemplated by this Agreement or the operation, use, presence or registration of the Aircraft in the jurisdiction imposing the Tax; or	
 
(b)	imposed or levied on or measured on the net income, profits, gains capital, net worth, capital stock, franchise, business activity Taxes or other similar Taxes imposed on the privilege of doing business or in the nature of an alternative minimum Tax, assessed on Lessor or an Indemnitee by any Government Entity in the jurisdiction in which Lessor or an Indemnitee is organized, based, maintains an office or other fixed place of business, carries on business through a permanent establishment or is deemed to have its principal place of business, other than:	
 
 	(i)	Taxes payable by the Lessor or the Owner Participant solely as a result of the Lessor or the Owner Participant being required to include in its gross income any amount attributable to any improvement, alteration, substitution or addition to the Aircraft;	
 
 	(ii)	Taxes which are imposed by reason of the presence of the Lessee (including place of business, situs of organization or any other activity of the Lessee) of the presence, registration, use or operation of the Aircraft or any Engine (including in México, the United States of America or Ireland);	
 
 	(iii)	Taxes which are imposed by reason of or consequent upon any Default or any breach by the Lessee of, or any failure by the Lessee to perform any of its obligations under, or any misrepresentation made by the Lessee in, this Agreement; or	
 
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(c)	imposed with respect to any period commencing or event occurring (x) prior to the Delivery Date (except where the Aircraft has been purchased from Lessee (or a Lessee Affiliate) and is to be leased back to Lessee under the Lease) or (y) solely as a result of an event occurring after the Expiry Date which is not related to the Lessor’s dealings with the Lessee or the transactions contemplated by this Agreement or the operation of the Aircraft by the Lessee.	
“ LIBOR ” means, in respect of the applicable period for the calculation of Rent, the Default Rate or other interest hereunder:
 
(a)	the applicable Screen Rate; or	
 
(b)	if no Screen Rate is available for Dollars for the applicable interest period, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Lessor at its request, quoted by the Reference Banks to leading banks in the London interbank market,	
for the offering of deposits in Dollars for the applicable interest period as of 11.00 a.m. (London time) two (2) Business Days before the first day of such period.
“ Life Limited Parts ” means those Parts, defined by the Manufacturer or by the FAA or the Aviation Authority through Airworthiness Directives, requiring retirement and subsequent replacement on a mandatory basis prior to, or upon the expiration of, the Manufacturer’ certified life, such life being expressed in terms of Cycles, Flight Hours, landings and calendar time.
“ Loss ” means any cost, expense (including the legal fees and out-of-pocket expense incurred to enforce any indemnity under the Agreement), proceeding, action, claim, obligation penalty, fine, liability, damage or loss of any kind.
“ Loss Payee ” means the Lessor or, if the Lessor so notifies the Lessee in writing, the Security Trustee.
“ Maintenance Contribution ” has the meaning given to such term in paragraph 6 of Part of Schedule 6 ( Payments ).
“ Maintenance Payments ” means all amounts payable pursuant to Clause 5.1 ( Rents and Maintenance Payment ) and Part B of Schedule 6 ( Payments ).
“ Maintenance Performer ” means the maintenance performer for the Airframe and the Engines approved by the Aviation Authority and the FAA or EASA and the Lessor.
“ Maintenance Programme ” means the maintenance programme of the Lessee for the Aircraft which shall be in conformance with the maintenance program specified in the MPD and approved by the Lessor and the Aviation Authority as amended from time to time in accordance with the provisions of Clause 13.3.2.
“ Manufacturer ” means Airbus S.A.S.
“ Material Adverse Change ” means (a) a material adverse change in the financial condition of the Lessee since the date of the most recent Financial Statements of the Lessee provided to the Lessor prior to the date hereof or (b) the occurrence, since such date of any event or
 
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circumstances which has, had or which is, could reasonably be expected to have a material adverse effect on Lessee’s ability or future ability to perform its obligations under this Agreement or any other Transaction Document.
“ Mexican GAAP ” means the generally accepted accounting principles in México.
“ México ” means the United Mexican States.
“ Mexican Counsel ” means Ritch Mueller S.C.
“ Mexican Pledge ” means a pledge without transfer of possession ( prenda sin transmisión de posesión ) in form and substance acceptable to the Lessor and the Owner Participant, granting the Lessor a first priority Security Interest in any rights the Lessee may have, or claim to have, from time to time, in the Maintenance Payments, any Maintenance Contribution obligations, the Security Deposit and any amounts drawn under a Security Deposit Letter of Credit, pursuant to Clauses 5.1.3, 5.3.2 and 5.3.7.
“ MPD ” means the latest version of the Maintenance Planning Document issued by the Manufacturer setting out the maintenance tasks for the Aircraft and the thresholds and/or intervals at which such tasks should be completed.
“ Notice and Acknowledgement ” means a notice and acknowledgement entered into, or to be entered into as the context may require, between the Lessor, the Security Trustee and the Lessee substantially in the form set out Schedule 10 ( Forms of notices and acknowledgement ) or such other form as may be reasonably required by the Lessor or any Security Trustee.
“ OFAC ” has the meaning given to such term in Clause 35.
“ Owner Trustee ” means Wells Fargo Bank Northwest, National Association, a national banking association, in its capacity as Owner Trustee under the Trust Agreement.
“ OP Guarantor ” means Avolon Aerospace Leasing Limited.
“ OP Guaranty ” means a guaranty agreement in form and substance reasonably satisfactory to the Lessee, executed by the OP Guarantor, guaranteeing the obligations of the Owner Participant under the Transaction Documents to which it is a party.
“ Original Financial Statements ” means the Lessee’s consolidated audited financial statements for its financial year ended 31 December 2010.
“ Other Agreements ” means:
 
(a)	each of the aircraft lease agreements between the Lessor in its capacity as the Owner Trustee under the Trust Agreement (or any Affiliate of the Owner Participant, including a trust of which the beneficiary is the Owner Participant or an Affiliate of the Owner Participant) and the Lessee (or any Affiliate of the Lessee) relating to the Other Aircraft; and	
 
(b)	any and all agreements (other than this Agreement) entered into at any time and from time to time between (i) the Lessor, any Affiliate of the Lessor, any trustee or the Owner Participant or any Affiliate of the Owner Participant or any special purpose lessor in respect of which the Servicer provides lease management services and (ii) the Lessee or any of its Affiliates.	
 
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“ Other Aircraft ” means each Airbus A320 aircraft leased (i) by the Lessee or any of its Affiliates, from (ii) the Lessor, any Affiliate of the Lessor, any trustee on behalf of the Lessor or the Owner Participant or any Affiliate of the Lessor or any special purpose lessor in respect of which the Servicer provides lease management services.
“ Owner Participant ” means Avolon Aerospace AOE 3 Limited and its permitted assigns as set forth in Clause 23.3.
“ Owner Participant Letter Agreement ” means the Owner Participant Letter Agreement with respect to the Aircraft and this Agreement between the Owner Participant and the Lessee;
“ Parent Guaranty ” means a guaranty agreement in form and substance reasonably satisfactory for the Lessor executed by the Parent, guaranteeing the obligations of the Lessee under this Agreement and the other Transaction Documents to which it is a party.
“ Parent ” means Controladora Vuela Compañia de Aviación, S.A.P.I. de C.V.
“ Part ” means each component, furnishing or part (other than a complete Engine) supplied with the Aircraft on the Delivery Date, in each case until replaced in accordance with this Agreement and includes any such replacement, and all technical data (including historical, operational and maintenance records related thereto).
“ Partial Loss Threshold ” has the meaning given to such term on Part D of Schedule ( Payments ).
“ Patriot Act ” has the meaning given to it in Clause 35.1 ( Know Your Customer/OFAC Compliance ).
“ Permitted LC Bank ” means a major international bank reasonably acceptable to the Lessor for the purposes of issuing or confirming a Security Deposit Letter of Credit.
“ Permitted Security Interest ” means:
 
(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or which are being contested in good faith by appropriate proceedings;	
 
(b)	any lien of a repairer, carrier, hangar keeper, mechanic, material-man, carrier, employee or other similar lien arising in the ordinary course of business by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings;	
but, in each case of (a) and (b) above, only if:
 
 	(i)	adequate reserves have been provided by the Lessee for the payment of the Taxes or obligations in accordance with IFRS or Mexican GAAP; and	
 
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 	(ii)	such proceedings, or the continued existence of the lien do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest in the Aircraft or of any criminal liability on any Indemnitee; and	
 
(c)	any Lessor Lien; and	
 
(d)	any Security Interest arising from the Financing Documents and the Transaction Documents.	
“ Permitted Sublease ” has the meaning given to such term in Clause 9.4 ( Permitted Subleasing ).
“ Permitted Sublessee ” means Avianca S.A., TACA International Airlines, or any other sublessee as the Lessor, the Owner Participant and the Security Trustee, if any, may from time to time approve in writing in their sole and absolute discretion provided that (A) the consent of the Lessor, the Owner Participant and the Security Trustee shall not be unreasonably withheld in the case of any air carrier which is (i) a part of the Avianca-Taca group or the Indigo group; (ii) principally based and domiciled in El Salvador, Colombia or Brazil; (iii) certified as an air carrier by the Aviation Authority of such jurisdiction; (iv) paying its debts as they become due and (v) is not subject to any bankruptcy, insolvency or similar proceedings, and has not announced that any such proceedings are under consideration and (B) in case of an air carrier which is a part of the Avianca-Taca group based in Costa Rica, Peru or Ecuador and meets the other conditions provided herein, the Lessor shall make reasonable efforts to procure the approval of the Financiers to sublease to such air carrier and if such approval is obtained Lessor shall not unreasonably withhold its consent to a sublease thereto if it meets the conditions in clause (A).
“ PMA Part ” means a part manufactured under an FAA Parts Manufacturer Approval which has not been approved for use on the Airframe by the Manufacturer or on an Engine by the Engine Manufacturer.
“ Post-Delivery Authorizations and Filings ” means each of the following:
 
(a)	evidence that the Bill of Sale, duly notarized and legalized and accompanied by Spanish translation thereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission, which shall be obtained (and a copy provided to the Lessor) within five Business Days following the Delivery Date;	
 
(b)	Certificate of Airworthiness ( Certificado de Aeronavegabilidad ) and designation of a definitive registration mark ( Oficio de Asignación de Matrícula Definitiva ) for the Aircraft issued by the DGAC, which shall be obtained (and a copy provided to the Lessor) within five (5) Business Days following the Delivery Date;	
 
(c)	temporary import license for the Aircraft in México, which shall be obtained (and evidence thereof provided to the Lessor), together with evidence that such permit has been filed with the Aviation Authority, that the Lessee has paid all import duties related to the transaction contemplated by this Agreement and that the import of the Aircraft into México is exempt from Taxes, within five (5) Business Days following the Delivery Date;	
 
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(d)	certificate of registration and definitive registration of this Agreement (including the Acceptance Certificate) and the Bill of Sale with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), which registration shall show the Lessor as owner and lessor and the Lessee as operator and possessor of the Aircraft and shall be completed (and evidence thereof provided to the Lessor) within sixty (60) days following the Delivery Date, but evidence of the submission of this Agreement, the Acceptance Certificate and the Bill of Sale (each duly notarized and legalized and accompanied by a Spanish translation thereof certified by a Mexican court registered translator as true and correct) to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) and the payment of all fees and Taxes in connection with such submission shall be provided to the Lessor within ten (10) Business Days following the Delivery Date; and	
 
(e)	a copy of the Lessee’s air operator’s certificate annotated to reflect the addition of the Aircraft to the Lessee’s fleet, within thirty (30) days following the Delivery Date.	
“ Post Delivery Modifications ” has the meaning given to such term in Clause 4.1.3.
“ Pre-Delivery Authorizations and Filings ” means each of the following:
 
(a)	evidence that this Agreement, duly notarized and legalized and accompanied by a Spanish translation hereof certified by a Mexican court registered translator as true and correct, and an application for registration thereof, have been submitted to the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ), together with payment of all fees and Taxes in connection with such submission;	
 
(b)	evidence that the Lessee has received from the DGAC a temporary Mexican registration mark;	
 
(c)	such other authorizations, filings, registrations and other like action to made with or obtained from any Government Entity as the Lessor may reasonably request.	
“ Protocol ” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, concluded in Cape Town South Africa, on November 16, 2001 (utilising the English language version thereof).
“ Purchase Agreement ” means the aircraft sale and purchase agreement dated on or about the date hereof as amended from time to time between the Seller and the Owner Participant with respect to the Aircraft.
“ Qualifying Work ” has the meaning given to such term in paragraph 6 of Part B of Schedule 6 ( Maintenance Payments ).
“ Redelivery ” means the Redelivery of the Aircraft to the Lessor in compliance with the terms of this Agreement.
“ Redelivery Condition ” means the condition in which the Aircraft must be on Redeliver described in Part B of Schedule 9 ( Redelivery ).
 
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“ Redelivery Date ” means the date on which the Lessor accepts the Aircraft for Redeliver.
“ Redelivery Location ” means the Adolfo Lopez Mateos International Airport in Toluca Estado de México, México, the Benito Juarez International Airport in México City, Mexico or such other location as the Lessor and the Lessee may reasonably agree.
“ Redelivery Procedure ” means the inspection and other procedures to verify that the Aircraft is in the Redelivery Condition, as described in Part A of Schedule 9 (Redelivery ).
“ Relevant Directive ” has the meaning given to such term in Part E of Schedule 6 ( Payments ).
“ Renewal Lease Term ” means, if applicable, any renewal of the Lease Period pursuant to Clause 2.6 ( Renewal Option ) for a period of twelve (12) months duration beginning on the Scheduled Expiry Date and ending on the Scheduled Renewal Term Expiry Date or such earlier date on which the Lease Period terminates in accordance with the provisions of this Agreement.
“ Renewal Notice ” has the meaning given to it in Clause 2.6.1 ( Renewal Notice ).
“ Rent ” means all amounts payable as rent in accordance with Clause 5.1 ( Rent and Maintenance Payments ) and Part A of Schedule 6 ( Rent ).
“ Rent Date ” means the first day of each Rent Period.
“ Rent Period ” means each period ascertained in accordance with Clause 5.2 ( Rent Periods ).
“ Requisitioning Period ” means any period from the date when the Aircraft is requisitioned for use to the earlier of (i) the Redelivery of the Aircraft to the Lessee and (ii) payment of the Agreed Value by the Lessee.
“ Scheduled Delivery Date ” means a day in the Scheduled Delivery Month to be notified by the Lessee to the Lessor in writing not less than 30 days prior to such day.
“ Scheduled Delivery Month ” means June 2011 or such later month up to and including the Cut-off Date, as the Lessor and the Lessee may agree.
“ Scheduled Expiry Date ” means the day immediately before the day falling one hundred thirty-two (132) months after the Delivery Date.
“ Scheduled Renewal Term Expiry Date ” means in respect of the Renewal Lease Term, the scheduled last day of the term thereof as provided in Clause 2.6.1 ( Renewal Notice );
“ Screen Rate ” means the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Lessor may specify another page or service displaying the appropriate rate after consultation with the Lessee.
“ Security Deposit ” has the meaning given to such term in Part D of Schedule 6 ( Payments ).
“ Security Deposit Letter of Credit ” has the meaning given to that term in Clause 5.3.3.
 
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“ Security Interest ” means any mortgage, charge, assignment, pledge, conditional sale, preference, equity or encumbrance of any kind, lien, including Tax liens, mechanics liens and any liens that attach by operation of law, declaration of trust or any other arrangement which has the effect of giving another person any security claim or interest.
“ Security Transfer ” has the meaning given to such term in Clause 23.3.1.
“ Security Trustee ” means the person or persons appointed as security trustee, collateral agent or similar representative for any of the Financiers and any other person identified as a “Security Trustee” for the purposes of this Agreement, as notified by the Lessor to the Lessee from time to time.
“ Seller ” means Wizz Air Hungary Ltd.
“ Service Bulletins ” means publications from any relevant manufacturer recommending or requiring that the Aircraft be inspected or modified.
“ Servicer ” means:
 
(a)	Avolon Aerospace Leasing Limited; and/or	
 
(b)	any other person providing services to the Lessor or the Owner Participant related to the Aircraft or the Transaction Documents, identified as a “Servicer” for the purposes of this Agreement, as notified by the Lessor to the Lessee from time to time provided that, if payments by the Lessee hereunder are to be made directly to such Servicer, the appointment of any replacement servicer shall not, determined at the time of such appointment, result in a withholding Tax or increase the amount of any withholding Tax which the Lessee is liable to pay, solely because of any payments made by the Lessee to such replacement servicer.	
“ State of Incorporation ” means México.
“ State of Registration ” means México until the FAA Registration Date and thereafter the United States of America as provided in Clause 11.1.3, or such other country in which the Aircraft is permitted to be registered in accordance with Clause 9.4 ( Permitted subleasing ).
“ Subsidiary ” means:
 
(a)	in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of the Lessee in accordance with accounting principles generally accepted under accounting standards of the United Arab Emirates;	
 
(b)	for any other purpose, an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirect more than 50 percent of the voting share capital; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation.	
“ Suitable Replacement Engine ” has the meaning given to that term in Clause 15.3.3.
 
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“ Taxes ” means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including value added tax or any similar tax and any franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp, gross income, personal property, fuel, leasing, occupational, turnover, excess profits, excise, gross receipts, franchise, registration, licence, corporation, capital gains, export, import, customs income, levies, imposts, withholdings or other taxes or duties of any nature whatsoever (or any other amount corresponding to any of the foregoing) now or hereafter imposed, levied, collected, withheld or assessed by any national or regional taxing or fiscal authority or agency or other Government Entity, together with any penalties, additions to tax, fines or interest thereon, and “ Tax ” and “ Taxation ” shall be construed accordingly.
“ Technical Servicer ” means Santos Dumont Technical Services Limited or such other person as the Lessor may notify the Lessee from time to time.
“ Total Loss ” means:
 
(a)	the actual, constructive, compromised, arranged or total loss of the Aircraft agreed by insurers;	
 
(b)	if the Aircraft is destroyed, damaged beyond economic repair or becomes permanently unfit for normal use for any reason (including any damage to the Aircraft or it being requisitioned for use where the insurers agree a total loss settlement);	
 
(c)	if the Aircraft is requisitioned for title, confiscated, detained, forfeited, compulsorily purchased; or	
 
(d)	if the Aircraft is requisitioned for hire, hi-jacked, stolen or disappears for thirty (30) days or longer.	
“ Total Loss Payment Date ” means with respect to a Total Loss the earlier of:
 
(a)	the first Business Day which falls on or after the date falling sixty (60) days after the Total Loss happened; and	
 
(b)	the date the Insurance proceeds are received by the person entitled to such proceeds under this Agreement for that Total Loss.	
“ Transaction Documents ” means this Agreement, the Owner Participant Letter Agreement, the Trust Agreement, the Purchase Agreement, the Delegation Letter, the Indemnity Letter, the IDERA, the Security Deposit Letter of Credit (if any), the Lease Amendment (if any), the Parent Guaranty, the OP Guaranty, the Mexican Pledge, the Airframe Warranties Agreement, the Engine Warranties Agreement, the Notice and Acknowledgement, the Acceptance Certificate, the Deregistration Power of Attorney, the Assignment of Insurances and the Assignment of Reinsurances (if any), any Permitted Sublease and any other document which is entered into in connection with any of those agreements, as each of the same may be amended from time to time.
“ Trust Agreement ” means the Trust Agreement between the Owner Trustee and the Owner Participant in respect of the Aircraft.
“ Trust Estate ” has the meaning set out in the Trust Agreement.
 
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“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction.
“ U.S.C. ” means the United States Code.
 
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PART B
INTERPRETATION
The following rules of interpretation apply throughout the Agreement.
 
1.	Unless otherwise stated, a reference to:	
 
 	(a)	any Applicable Regulations includes any change or addition to it or replacement of it;	
 
 	(b)	“ month ” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:	
 
 	(i)	if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;	
 
 	(ii)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.	
The above rules will only apply to the last month of any period;
 
 	(c)	this Agreement or any other agreement or document includes any changes replacements or substitutions;	
 
 	(d)	“ indebtedness ” includes any obligation (whether incurred as principal or surety) for the payment or repayment of money, whether present or future, actual or contingent;	
 
 	(e)	a “ person ” may, depending on the context, include an individual, any form of corporate or business association or any state or form of governmental or official body, whether having a distinct legal identity or not;	
 
 	(f)	the Lessor, the Lessee or any other person includes their respective successors transferees and assignees; and	
 
 	(g)	“ includes ”, “ including ”, “ include ” or similar terms shall not be construed as limiting and shall mean “including, without limitation”.	
 
2.	The Clause headings and sub-headings are used in this Agreement only to make it easier to read. They are not intended to affect its meaning.	
 
3.	Certain technical terms used but not defined have the meaning given in Annex six and eight of the Convention of International Civil Aviation in force from time to time.	
 
4.	Default is continuing if it has not been waived or remedied	
 
5.	Any reference to this Agreement includes its Schedules.	
 
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SCHEDULE 2
AIRCRAFT PARTICULARS
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications (which description shall not be deemed a covenant representation warranty or guaranty to the Lessee with respect to the Aircraft, all of which are waived and disclaimed as and to the extent expressly provided in the Agreement):

Manufacturer:	  	Airbus S.A.S.	
		
Model:	  	A320-233	
		
Registration:	  	As specified in the Acceptance Certificate	
		
Engine Model:	  	V2527-A5	
		
Engine Serial Numbers:	  	As specified in the Acceptance Certificate	
		
APU Model:	  	GTCP 131-9A	
		
APU Serial Number:	  	As specified in the Acceptance Certificate	
		
Aircraft Specification:	  	As per Schedule 4, Part A	
 
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SCHEDULE 3
CONDITIONS PRECEDENT
PART A
LESSEE CONDITIONS PRECEDENT
 
A.	On or before the date of execution of this Agreement and at the Lessee’s cost, the Lessor shall have received in form and substance satisfactory to it:	
 
 	(a)	a copy, certified by a duly authorised representative of each of the Lessee and the Parent to be a true, complete and up to date copy, of the constitutional documents ( estatutos sociales ) of the Lessee and the Parent;	
 
 	(b)	a copy, certified by a duly authorised representative of the Lessee to be a true copy, and as being in full force and effect and not amended or rescinded, of resolution of the board of directors of the Lessee:	
 
 	(iii)	approving the transactions contemplated by the Transaction Documents; and	
 
 	(iv)	authorising a person or persons to execute and deliver on behalf of the Lessee the Transaction Documents and any notices or other documents to be given pursuant thereto;	
 
 	(c)	a copy, certified by a duly authorized representative of the Parent to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of the Parent:	
 
 	(i)	approving the transaction contemplated by the Parent Guaranty;	
 
 	(ii)	authorizing a person or persons to execute and deliver on behalf of the Parent, the Parent Guaranty and any notices and other documents to be given pursuant thereto;	
 
 	(d)	a certified true copy of the power of attorney issued by or on behalf of the Lessee, and not amended or rescinded, authorising the execution by the attorneys named therein of the Transaction Documents to which the Lessee is a party and specimen signatures of the attorneys;	
 
 	(e)	a certified true copy of the power of attorney issued by or on behalf of the Parent and not amended or rescinded authorising the execution by the attorneys named therein of the Parent Guaranty and specimen signature of the attorneys;	
 
 	(f)	specimen signatures of the signatories of the Lessee and the Parent, certified by an officer of the Lessee and the Parent;	
 
 	(g)	all such documentation and information from the Lessee as requested by the Lessor or the Owner Participant in respect of its “Know Your Customer” checks, anti-money laundering checks and any other similar requirements; and all such checks and requirements shall be satisfactory to the Lessor and the Owner Participant in their sole and absolute discretion;	
 
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 	(h)	a copy of the Original Financial Statements	
 
 	(i)	a letter from the process agent appointed by the Lessee pursuant to Clause 25.3 ( Process Agents ) in respect of this Agreement, accepting such appointment and a power of attorney granted to the process agent by the Lessee in accordance with the Mexican law, in form and substance satisfactory to the Lessor and the Owner Participant;	
 
 	(j)	on original of the Parent Guaranty, duly executed and delivered by the Parent, the Mexican Pledge, duly executed and delivered by the Lessee and this Agreement containing the chattel paper legend on the cover thereof, executed and delivered by the Lessee, and additional original copies without such legend as reasonably requested by the Lessor;	
 
 	(k)	a legal opinion addressed to the Lessor, the Owner Participant (and if applicable, the Security Trustee (on behalf of itself and the Financiers) from the General Counsel of the Parent in a form and substance reasonably satisfactory to the Lessor;	
 
B.	On or before the Delivery Date and at the Lessee’s cost, the Lessor shall have received in form and substance satisfactory to it:	
 
1.	Lessee corporate documents	
 
 	(a)	a copy, certified by a duly authorised representative of the Lessee to be a true, complete and up to date copy, of the business license, air operator’s certificate, concession and all other licenses, certificates and permits required by the Lessee in relation to, or in connection with, the operation of the Aircraft; and constitutional documents of the Lessee;	
 
 	(b)	certificate of an officer of Lessee:	
 
 	(i)	certifying that the transactions contemplated by the Transaction Documents have been approved by the board of directors of the Lessee and	
 
 	(ii)	authorising a person or persons to execute and deliver on behalf of the Lessee the Transaction Documents and any notices or other documents to be given pursuant thereto; and	
 
 	(iii)	specimen signatures of the signatories of the Lessee, certified by an officer of the Lessee.	
 
 	(c)	a certified true copy of the power of attorney issued by or on behalf of the Lessee, and not amended or rescinded, authorising the execution by the attorneys named therein of the Lessee Documents and specimen signatures of the attorneys; and	
 
2.	Transaction documents	
 
 	(a)	an original of each Transaction Document to which the Lessee is a party, the Bill of Sale, and the Deregistration Power of Attorney, each in Spanish and in	
 
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 	English, where applicable, duly notarized and legalized, where applicable, and the Notice and Acknowledgement executed and delivered by the respective party or parties thereto (other than the Lessor); and	
 
 	(b)	certified copies of the Engine Warranties and Airframe Warranties.	
 
3.	Acceptance documents	
 
 	(a)	an original of the Acceptance Certificate;	
 
 	(b)	evidence that the process agent of the Lessee referred to in any Transaction Document has been appointed and accepted its appointment.	
 
4.	Security Deposit	
The Security Deposit described in Clause 5.3 and/or the Security Deposit Letter of Credit in lieu thereof, as the case may be.
 
5.	Legal opinion	
A legal opinion addressed to the Lessor, the Owner Participant (and, if applicable, the Security Trustee (on behalf of itself and the Financiers)), each in form and substance reasonably acceptable to the Lessor, the Owner Participant and any Security Trustee, from:
 
 	(a)	Greenberg Traurig, LLP, special New York counsel to the Lessee;	
 
 	(b)	the General Counsel of the Lessee, as to matters relating to the Lessee; and	
 
 	(c)	the Mexican Counsel to the Lessor as to the matters relating to the State of Registration, the Habitual Base and the State of Incorporation and while the Aircraft is registered with the DGAC, as to the matters relating to the Cape Town Convention.	
 
6.	Registrations and approvals	
Evidence that:
 
 	(a)	on the Delivery Date, all Pre-Delivery Authorizations and Filings and all other authorisations (except for the Post-Delivery Authorizations and Filings) necessary for any matter or thing contemplated by the Transaction Documents and for the legality, validity, enforceability, admissibility in evidence and effectiveness of the Transaction Documents to which the Lessee is a party (including, without limitation, the approvals of the Aviation Authority) have been obtained or effected on an unconditional basis and remain in full force and effect (or, in the case of effecting of any registrations and filings, that arrangements satisfactory to the Lessor, the Owner Participant and the Security Trustee have been made for the effecting of the same within any applicable time limit);	
 
 	(b)	on the Delivery Date, all Pre-Delivery Authorizations and Filings and all other documents (except for the Post-Delivery Authorizations and Filings) as	
 
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 	evidencing the respective interests of the Lessor, the Owner Participant and the Security Trustee in the Aircraft, this Agreement and the other Transaction Documents as contemplated by the Transaction Documents shall have been filed with the Aviation Authority or the District of Columbia and registered with the International Registry (or, where applicable, in case of the Post-Delivery Authorizations and Filings, be in due form for such filing or registration and arrangements satisfactory to the Lessor, the Owner Participant and the Security Trustee have been made for the effecting of the same within any applicable time limit); and	
 
 	(c)	all registration, notarial, consular and translation fees (if any) due and payable in any applicable jurisdiction in connection with any Transaction Documents have been duly paid in full.	
 
7.	Import	
Evidence that all required import approval and licence, and all customs formalities relating to the import of the Aircraft into the Habitual Base have been obtained or complied with.
 
8.	Air Traffic Control Letter	
A letter from the Lessee addressed to the Servicios a la Navegación en el Espacio Aéreo Mexicano, Aeropuertos y Servicios Auxiliares , Eurocontrol and each other relevant air traffic control authority pursuant to which the Lessee authorised the addressee to issue to the Lessor and any Security Trustee, upon the Lessor’s or any Security Trustee’s request from time to time, a statement of account of all sums due by the Lessee to such authority in respect of all aircraft (including, without limitation, the Aircraft) operated by the Lessee. The Lessor agrees that such letter shall be used and no request shall be sent to any navigation or similar authority unless a Default shall have occurred and be continuing or the Lessor reasonably believes that any amount due has not been paid by the Lessee.
 
9.	IDERA	
A certified true copy of IDERA, in English and Spanish, duly signed by and on behalf of the Lessee and the Aviation Authority, and notarized and legalized, if applicable, together with (a) a Consent to Deregister addressed to the Aviation Authority and signed by the Lessee and (b) a consent letter from the Lessee relating to the IDERA.
 
10.	Insurance documents	
 
 	(a)	a copy of a certificate or certificates of insurance from the Insurance Broker evidencing the Insurances to be maintained pursuant to and in accordance with Clause 17 ( Insurances ) and Schedule 8 ( Insurance requirements ) to be in full force and effect;	
 
 	(b)	a copy of a certificate or certificates of reinsurance from the Lessee’s reinsurer or reinsurance broker evidencing the reinsurances to be maintained pursuant to and in accordance with Clause 17 ( Insurances ) to be in full force and effect;	
 
 	(c)	a copy of the Broker’s Letter of Undertaking; and	
 
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 	(d)	an insurance opinion from the Lessor’s insurance advisor, at no cost to the Lessee.	
 
11.	Aircraft documents	
 
 	(a)	Copies of each of the following documents in relation to the Aircraft certified by a duly authorised officer of the Lessee to be current and valid:	
 
 	(i)	subject to the confidentiality requirements of Clause 26 hereof, Maintenance Programme (in CD format); and	
 
 	(ii)	temporary approval by the Aviation Authority of operation of the Aircraft and aircraft of the same type as the Aircraft;	
 
 	(b)	Evidence satisfactory to the Lessor and the Owner Participant that a certificate of registration in respect of the Aircraft will be issued by the Aviation Authority in the name of the Lessee as lessee and also noting on the certificate of registration (to the extent applicable in the State of Registration) the interests of (a) the Lessor as lessor and (b) any Financier as mortgagee, in each case, in respect of the Aircraft;	
 
 	(c)	Evidence satisfactory to the Lessor and the Owner Participant that a certificate of airworthiness will be issued by the Aviation Authority in respect of the Aircraft:	
 
 	(d)	Current air carrier operating certificate and airline operating license issued by the Aviation Authority in respect of the Lessee; and	
 
 	(e)	All other governmental or other approvals, licences and consents which may be required in relation to, or in connection with the performance by, the Lessee of any of its obligations hereunder that are not Post-Delivery Authorization and Filings.	
 
12.	Intentionally left blank	
 
13.	General Conditions Precedent	
 
 	(a)	no Default is continuing or would result from the delivery of the Aircraft;	
 
 	(b)	all monies payable to the Lessor by the Lessee on or prior to the Delivery Date (including, without limitation, payment of the first installment of Rent) have been received or the Lessor is satisfied that such monies will be paid on the Delivery Date;	
 
 	(c)	each of the Lessee’s representations in Clause 3 ( Representations and warranties ) of this Agreement is true and accurate in all respects, except to the extent any such representation relates to a specific time, in which case, such representation shall be correct as of such time;	
 
 	(d)	each of the Parent’s representation in the Parent Guaranty is true and accurate in all respects, except to the extent any such representation relates to a specific time, in which case, such representation shall be correct as of such time;	
 
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 	(e)	no circumstance exists or has come into being that is a Material Adverse Change;	
 
 	(f)	the Aircraft has not suffered a Total Loss (or any event which, with the lapse of time would constitute a Total Loss) or any unrepaired damage, the cost of which to repair (in the opinion of the Security Trustee) exceeds the Damage Notification Threshold;	
 
 	(g)	the Lessor shall have received such ‘know your customer’ documents as the Financiers may require from the Lessee;	
 
 	(h)	the Manufacturer shall have transferred title to the Aircraft (and any seller purchased equipment installed thereon) to the Lessor and the Lessor shall have accepted title to the Aircraft in accordance with the Purchase Agreement; and	
 
 	(i)	any other conditions the Lessor may reasonably require.	
 
- 108 -

PART B
LESSOR CONDITIONS PRECEDENT
 
1.	On or before the date of execution of this Agreement and at no cost to the Lessee, the Lessee shall have received in form and substance reasonably satisfactory to it:	
 
 	(a)	a corporate certificate of the Lessor signed by an authorised officer of the Lessor to which is attached complete and up to date copies of the resolutions of the board of directors of the Lessor authorising one or more persons to sign those of the Transaction Documents to which the Lessor is a party;	
 
 	(b)	a copy of the constitutional documents of the Lessor and the Owner Participant;	
 
 	(c)	a corporate certificate of the Owner Participant signed by an authorised officer of the Owner Participant to which is attached complete and up to date copies of the resolutions of the board of directors of the Owner Participant authorising one or more persons to sign those of the Transaction Documents to which the Owner Participant is a party;	
 
 	(d)	specimen signatures of the signatories of the Lessor, certified by an officer of the Lessor;	
 
 	(e)	if the Owner Participant’s tangible net worth is not at least *****, an original of the OP Guaranty executed and delivered by the OP Guarantor; and	
 
 	(f)	a letter from the process agent appointed by the Lessor and the Owner Participant pursuant to Clause 25.3 ( Process Agents ) in respect of this Agreement, accepting such appointment.	
 
2.	On or before the Delivery Date and at no cost to the Lessee	
 
 	(a)	the Lessee shall have received in form and substance reasonably satisfactory to it:	
 
 	(i)	an original of each Transaction Document to which it is a party executed and delivered by the Lessor;	
 
 	(ii)	if applicable, a Notice and Acknowledgement substantially in the form set out in Schedule 10, executed and delivered by the Lessor and the Security Trustee, together with any quiet enjoyment letter required to be issued thereunder: and	
 
 	(b)	each of the Lessor’s representations and warranties in Clause 3.1 ( Representations and warranties ) and Clause 3.3 ( Lessor’s Representations and warranties ) and each of the Owner Participant’s representations and warranties in Clause 3.1 ( Representations and warranties ) and Clause 3.4 ( Owner Participant’s Representations and warranties ), is true and accurate in all respects.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 109 -

SCHEDULE 4
AIRCRAFT SPECIFICATION AND DELIVER
PART A-1
AIRCRAFT SPECIFICATION
In order for the Lessor to be obligated to purchase the Aircraft and lease it to the Lessee hereunder, the Aircraft shall be new “ex-factory” and comply with the following specifications (which description shall not be deemed a covenant representation, warranty or guaranty to the Lessee with respect to the Aircraft, all of which are waived and disclaimed as and to the extent expressly provided in the Agreement):
Based on Std Spec A320-200 Issue 6.0 dated 31 January 2005

EPAC	  	TDU	  	Title	  	Vendor
selected by the
Seller	
-	  	-	  	General requirements 02	  		
02.10.120	  	02	  	15 knows tailwind certification at Landing	  		
02.10.123	  	01	  	Aircraft Operation on runways less than 45m wide	  		
02.40.101	  	01	  	External livery - Wizz Air livery	  		
				
-	  	-	  	General aircraft design criteria 03	  		
				
03.20.151	  	19	  	A320-200 multiple operational weights capability – dual MTOW 73.5T and 71.5T	  		
03.20.400	  	8	  	A320 Basic Design weight – MTOW 73.5T; MLW 64.5 T; MZFW 61 T	  		
				
-	  	-	  	Placards and markings 11	  		
				
11.20.103	  		  	Engine area decals – Wizz defined (on transparent background)	  		
11.30.110	  		  	Passenger placards and signs alternate markings – English/Hungarian/Ukranian/Bulgarian	  		
11.30.111	  	Std	  	Monolingual EEPMS exit identifier – English only (horizontal arrangement) – AIRSIGNA	  		
 
- 110 -

							
-	  	-	  	Air conditioning 21	  		
				
21.20.108	  	06	  	Cabin air recirculation filter cartridges equipment selection	  	LE BOZEC	
21.27.108	  	Std	  	Avionics ventilation air filter alternate equipment	  	LE BOZEC	
21.50.050	  	02	  	Installation of A318 type Environmental control System	  		
				
-	  	-	  	Auto flight 22	  		
				
22.70.100	  	Std	  	Flight management kits release 1 alternate equipment	  	Honeywell	
22.82.102	  	20	  	Multipurpose Control and Display Unit (MCDU) alternate equipment	  	Honeywell	
				
-	  	-	  	Communications 23	  		
				
23.00.132	  	34	  	Automatic ELT (BFE) associated with remote control panel in cockpit	  	Honeywell	
23.12.130	  	13	  	VHF Data Radio (VDR) alternate equipment capable of VDL mode 2	  	Honeywell	
23.51.136	  	10	  	Boomsets alternate equipment - SENNHEISER	  		
23.70.110	  	02	  	Installation of cockpit door surveillance system	  	Goodrich	
23.71.103	  	10	  	Solid State Cockpit Voice Recorder (SSCVR) alternate equipment	  	Honeywell	
23.73.019	  	40	  	Cabin Ready (Flight Phases) indication on ECAM	  		
23.73.208	  	22	  	CIDS alternate equipment - A318 Type	  		
				
	  		  	CIDS changes - as per WZZ list	  		
			
-	  	-	  	Electrical power 24	
				
24.00.100	  		  	Installation of Enhanced Electrical Power Generation System (EEPGS)	  		
 
- 111 -

							
-	  	-	  	Equipment/furnishings 25	  		
				
25.00.001	  	0	  	Cockpit and Cabin Emergency Equipment	  		
				
25.20.001	  	00	  	CABIN LAYOUT DEFINITION A320 - Single Class 180 Pax - two BFE Galleys - 3 SFE lavatories - Std SFE CAS - No stowage - A320 Family Enhanced Cabin	  		
				
25.23.103	  	01	  	Customized interior colour specification	  		
25.50.137	  	01	  	Installation of rubber seal profiles for floor panels in fwd and aft cargo holds	  		
				
25.50.101	  	00	  	CARGO DEFINITION 25.50.510/01 - Basic full bulk configuration without ACT provision 25.50.520/01 - Reinforced cargo floor panels for heavy usage for FWD and AFT cargo	  		
				
25.65.305	  		  	Installation of portable ELT survival type (BFE)	  	Honeywell	
25.65.306	  		  	Non installation of curtains and rails (curtain only stays at G1 galley)	  		
				
-	  	-	  	Fire protection 26	  		
				
26.20.103	  	Std	  	Alternate APU fire extinguisher	  	Pacific
Scientific	
26.21.104	  	Std	  	Engine fire extinguishers alternate equipment	  	Pacific
Scientific	
26.24.111	  	03	  	Cockpit portable fire extinguisher alternate equipment - TOTAL FEUERSCHUTZ, PN 74-20	  		
				
-	  	-	  	Flight controls 27	  		
				
27.92.101	  		  	Indication for simultaneous side stick action	  		
				
-	  	-	  	Hydraulic power 29	  		
				
29.10.110	  		  	Hydraulic Engine Driven Pumps (EDPs)	  	Parker	
29.10.133	  		  	Power Transfer Unit (PTU)	  	Frisby	
 
- 112 -

							
29.21.104	  	Std	  	Electropumps alternate	  	Parker	
				
-	  	-	  	Ice and rain protection 30	  		
				
30.11.101	  	01	  	Wing anti-ice valves	  	Honeywell	
				
-	  	-	  	Indicating/recording systems 31	  		
				
31.00.107	  	Std	  	Basic metric units for indicators and labels	  		
31.33.050	  	74	  	Flight Data Interface and Management Unit (FDIMU) alternate equipment	  	TELEDYNE	
31.33.200	  	14	  	Solid state flight data recorder (SSFDR) alternate equipment	  	Honeywell	
31.36.111	  	02	  	Provision for Wireless Ground Link DAR (WGL-DAR)	  		
31.52.102	  	02	  	Activation of Electronic Centralized Aircraft Monitoring (ECAM) OEB reminder function on FWC	  		
31.60.114	  	01	  	Indication of metric altitude on Primary Flight Display (PFD)	  		
31.60.120	  	01	  	Installation of LCD EIS 2 - Thales Avionics	  		
				
-	  	-	  	Landing gear 32	  		
				
32.00.100	  	02	  	Installation of full electrically signalled braking system	  		
32.40.113	  	Std	  	Wheels and brakes alternate equipment	  	MESSIER	
32.41.111	  	30	  	MLG tires selection (46X17-R20 radial tires)	  	Goodyear	
32.41.120	  	14	  	NLG tires selection (30X8.8-R15 radial tires)	  	Goodyear	
				
-	  	-	  	Lights 33	  		
				
33.50.110	  		  	Installation of floor-mounted EEPMS – LUFTHANSA TECHNIK (without cover) / Exit identifier – AIRSIGNA	  		
 
- 113 -

							
-	    	-	  	Navigation 34	  		
34.10.117	    	07	  	ADIRS alternate equipment	  	Honeywell	
34.10.120	    	01	  	Activation of auto alignment function on ADIRU	  		
34.13.106	    	01	  	Pilot probes alternate equipment	  	Goodrich	
34.15.101	    	01	  	Angle of Attack (AOA) sensors alternate equipment	  	Goodrich	
34.20.202	    	02	  	Installation of ISIS – Thales	  		
34.41.300	    	03	  	Single Weather Radar (WXR) System alternate equipment	  	Honeywell	
34.41.300	    	03	  	Activation of the AUTOTILT function in the WRX	  		
34.42.101	    	09	  	Radio altimeters alternate equipment	  	Honeywell	
34.43.200	    	07	  	TCAS (BFE) & TCAS antennae (BFE) / ATC (SFE) equipment selection	  	Honeywell	
34.43.200	    	07	  	TCAS 7 Change – HONEYWELL TPA 100	  		
34.48.132	    	01	  	Activation of the GEOMETRIC ALTITUDE function in the EGPWS	  		
34.48.132	    	02	  	Activation of the Peaks function in the EGPWS	  		
34.48.132	    	03	  	Activation of the Obstacle function in the EGPWS	  		
34.51.101	    	09	  	Distance Measuring Equipment (DME) interrogators alternate equipment	  	Honeywell	
34.53.111	    	03	  	Single Automatic Direction Finder (ADF) system alternate equipment	  	Honeywell	
34.55.102	    	10	  	VHF Omnidirectional Range (VOR)/Marker receivers alternate equipment	  	Honeywell	
34.58.31	    	21	  	Multi mode receiver (MMR) alternate equipment	  	Honeywell	
 
- 114 -

							
3	  		  		  		
				
-	  	-	  	Oxygen 35	  		
				
35.11.201	  	Std	  	Portable oxygen cylinder in cockpit - 77.1 cu ft (composite) - AVOX SYSTEM	  	Intertechnique	
35.20.010	  	01	  	INSTALLATION OF OXYGEN MASKS IN CABIN	  	Intertechnique	
				
-	  	-	  	Phneumetic 36	  		
				
36.11.005	  	01	  	Engine bleed air alternate supply system (A318 type)	  		
				
-	  	-	  	Information systems 46	  		
				
46.21.000	  	07	  	ATSU alternate equipment (H/W -070, S/W CSB3.2) - ARINC 615A data loading & capable of VDL Mode 2	  		
46.21.102	  	09	  	Installation of AIRBUS standard Airline Operational Communication (AOC) software for ATSU (units in Kg)	  	Honeywell	
46.21.142	  	01	  	INSTALLATION OF FANS B	  	Airbus / Smith	
				
-	  	-	  	Auxiliary Power Unit (APU) 49	  		
				
49.00.105	  	Std	  	APU alternate equipment (GTCP 131-9A)	  	Honeywell	
				
-	  	-	  	Structures 51	  		
				
51.22.300	  	02	  	Alternate paint systems (LOW VOC) on standard areas (fuselage, vertical stab. & nacelles)	  	ANAC	
				
-	  	-	  	Windows 56	  		
				
56.10.102	  	02	  	Cockpit windows alternate Front windows	  	SGS	
56.10.102	  	12	  	Cockpit windows alternate Equipment - Lateral Windows	  	SGS	
				
-	  	-	  	Engine 72	  		
				
72.00.120	  	31	  	Engines selection and alternate equipment (A320)	  	IAE	
				
71.00.100	  	02	  	INSTALLATION OF IAE SELECTONE OPTION PACKAGE	  	IAE	
				
-	  	-	  	Oil 79	  		
				
79.00.101	  	Std	  	Engine, engine accessories and Auxiliary Power Unit (APU) alternate lubricating oil	  	Mobil	
 
- 115 -

The Seller’s BFE List

ATA/Item	  	    Description    	  	A/C Qty	  	Unit	  	Manufacturer	  	P/N	
25.21.41.30	  	Slim HD, LH Triple
Seat IAT No Recline	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-103-1WZ	
						
25.21.41.30	  	Slim HD, RH Triple
Seat IAT No Recline	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-104-1WZ	
						
25.21.41.30	  	Slim HD, LH Triple
Seat No Recline	  	24	  	Ea	  	GEVEN Srl.	  	C5-03-131-1WZ	
						
25.21.41.30	  	Slim HD, RH Triple
Seat No Recline	  	24	  	Ea	  	GEVEN Srl.	  	C5-03-132-1WZ	
						
25.21.41.30	  	Slim HD, LH Triple
Seat No Recline Special Table Latch	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-133-1WZ	
						
25.21.41.30	  	Slim HD, RH Triple
Seat No Recline Special Table Latch	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-134-1WZ	
						
25.21.41.30	  	Slim HD, LH Triple
Seat No Recline No Outboard Armrest	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-135-1WZ	
						
25.21.41.30	  	Slim HD, RH Triple
Seat No Recline No Outboard Armrest	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-136-1WZ	
						
25.21.41.30	  	Slim HD, LH Triple
Seat No Recline No Outboard Armrest	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-137-1WZ	
 
- 116 -

											
						
25.21.41.30	  	Slim HD, RH Triple
Seat No recline No Outboard Armrest	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-138-1WZ	
						
25.21.41.30	  	Slim HD, LH
Triple Seat Narrow No recline	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-185-1WZ	
						
25.21.41.30	  	Slim HD, RH
Triple Seat Narrow No recline	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-186-1WZ	
						
25.21.41.30	  	Slim HD, LH
Triple Seat Narrow No recline No Backrest Table	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-187-1WZ	
						
25.21.41.30	  	Slim HD, RH
Triple Seat Narrow No recline No Backrest Table	  	1	  	Ea	  	GEVEN Srl.	  	C5-03-188-1WZ	
						
25.21.20.00	  	Leather Seat Cover	  		  	SET	  	ICE (supplied by Geven)	  		
						
25.26.50.10	  	Curtain Material	  	1	  	5 LM	  	BOTANY
WEAVING
MILL LTD	  		
						
25.28.20.00	  	Carpet	  		  	SET	  	BOTANY
WEAVING
MILL LTD	  		
						
25.30.00.00	  	Galley G 1	  	1	  	Ea	  	AEROSUD
AVIATION	  	A1142530E
002503	
						
25.30.00.00	  	Galley G 5	  	1	  	Ea	  	AEROSUD
AVIATION	  	A1152530E
002501	
						
25.35.10.00	  	Water Boiler	  	4	  	Ea	  	SELL GMBH	  	62197-001-001	
						
25.35.20.00	  	Trolley F/S	  	11	  	Ea	  	DRIESSEN	  	TK721002	
						
25.35.20.00	  	Standard Container	  	24	  	Ea	  	DRIESSEN	  	BB722001	
						
25.60.10.00	  	First aid kit	  	2	  	Ea	  	AEROMEDIC	  	52001-33	
 
- 117 -

											
						
25.60.10.12	  	Remote control panel	  	1	  	Ea	  	HONEYWELL
ASCA INC	  	1153008-1	
						
25.60.10.13	  	Emergency Locator Transmitter (ELT)	  	1	  	Ea	  	HONEYWELL
ASCA INC	  	1152682-3	
						
25.60.10.13	  	Emergency Locator Transmitter (ELT)	  	1	  	Ea	  	HONEYWELL
ASCA INC	  	1152780-1	
						
25.60.10.13	  	Emergency Locator Transmitter (ELT)	  	1	  	Ea	  	HONEYWELL
ASCA INC	  	1153426-1MXXX	
						
25.60.00.00	  	Safety Belt	  	189	  	Ea	  	AMSAFE INC	  	2007-1-511-8050	
						
25.65.00.10	  	Safety Belt, infant	  	18	  	Ea	  	AMSAFE INC	  	1027-2-011-8008	
						
25.65.00.10	  	Safety Belt, demo	  	2	  	Ea	  	AMSAFE INC	  	2010-6-011-2849	
						
25.66.00.00	  	Life Vest, infant	  	18	  	Ea	  	AERAZUR	  	216200-0	
						
25.66.00.00	  	Life Vest, demo	  	2	  	Ea	  	AIR
CRUISERS	  	66532-101	
						
25.66.00.00	  	Life Vest, passenger	  	190	  	Ea	  	AIR
CRUISERS	  	66601-101	
						
25.66.00.00	  	Life Vest, cockpit/cabin crew	  	8	  	Ea	  	AIR
CRUISERS	  	66601-501	
						
34.43.11.00	  	TCAS directional antenna	  	2	  	Ea	  	HONEYWELL
INC.	  	071-50001-8104	
						
34.43.34.00	  	TCAS II computer	  	1	  	Ea	  	HONEYWELL
INC.	  	940-0300-001	
						
35.32.10.00	  	Protective Breathing Equipment (PBE)	  	5	  	Ea	  	AVOX
SYSTEMS
INC.	  	802300-14	
						
35.32.10.00	  	PBE bracket	  	3	  	Ea	  	AVOX
SYSTEMS
INC.	  	803436-22	
 
- 118 -

Part A-2
Modifications to be installed/included on or before the Delivery Date

EPAC/TDU	 	   	  	Title	
Additional
from
Definition	 	SCNs
Volaris	  	 	
WZZ02D4011316S1B	  	External livery change (all Materhorn M8001 white)	
		
WZZ02D1210801S1B	  	Extended environmental envelope (ISA + 40)	
		
WZZ03D2053312SB	  	A320-233 increased design weights - MTOW to 77 t, MLW to 66 t, MZFW to 62.5 t (wv 012)	
		
WZZ22D0010406S1B	  	Automatic landing capability extension for IAE engines (9200 ft)	
		
CN23.71.110.01	  	Recorder Independent Power Supply (RIPS) - 28VDC power supply for CVR	
		
WZZ31D3305164S1B	  	FDIMU ED48A200 - FDIU S/W (-040), DMU S/W (-030) for IAE – SAGEM	
		
CN31.33.200.21	  	SSFDR alternate equipment (1024 w/s capable) – HONEYWELL	
		
CN31.33.210.03	  	Digital Flight Data Recorder System (DFDRS) 1024 w/s activation	
		
CN72.00.120.35	  	IAE engines - V2527-A5 at 26 500 lbf nominal thrust (A320-233)	
		
Supplier Changes	  	 	
WZZ22D7010042S1B	  	FM kits (Rel. lA - FMGC S6I1 1) / MCDU altern. equip. - THALES AVIONICS/SMITH assoc. with IAE engines - Honeywell	
		
WZZ32D4111101S1B	  	MLG tires selection - MICHELIN (46X17-R20 radial tires)	
		
WZZ32D4112005S1B	  	NLG tires selection - MICHELIN (30X8.8-R15 radial tires)	
		
WZZ46D2110213S1B	  	AIRBUS standard AOC software from ROCKWELL COLLINS with units in kg	
		
WZZ32D4011325S1B	  	Wheels and brakes alternate equipment (DURACARB) - GOODRICH	
		
WZZ32D4820012S1B	  	Installation of universal brake cooling fans on BF-GOODRICH wheels and brakes	
 
- 119 -

PART B
DELIVERY PROCEDURE
N/A
 
- 120 -

PART C
DELIVERY CONDITION
AS-IS, WHERE-IS, UPON DELIVERY NEW FROM MANUFACTURER
 
- 121 -

SCHEDULE 5
FORM OF ACCEPTANCE CERTIFICATE
This Acceptance Certificate relates to the operating lease agreement (the “ Agreement ”) dated [ — ] and made between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee (the “ Lessor ”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “ Lessee ”) in respect of the Airbus A320-233 aircraft with manufacturer’s serial number 4741 registration mark [ — ] and having two (2) IAE V2527-A5 Engines with serial numbers [ — ] and installed thereon (as more particularly described in the Agreement as the Aircraft).
Unless otherwise defined in this certificate, capitalised words and expressions used in this certificate shall have the same meanings as given to them in the Agreement.
 
1.	The Aircraft has been delivered to us together with its Aircraft Documents on the [ — ] day of [ — ] 20[ — ]. Delivery took place on that date at [[ — ] ( state Delivery Location )], at [ — ] hours.	
 
2.	We confirm that the Aircraft meets all of the requirements necessary for us to accept Delivery of it and that the Lessor has fully performed all of its obligations under the Agreement with respect to that Delivery. We acknowledge that the Aircraft has been delivered to us “AS-IS WHERE-IS”.	
 
3.	The installed APU is a GTCP 131-9A model APU with Serial Number [ — ].	
 
4.	At Delivery the Aircraft had [ — ] fuel on board.	
 
5.	Other statistics evidencing the condition of the Aircraft at Delivery (including Flight Hours and Cycles) are attached.	
 
6.	The Lessee confirms to the Lessor that, as at the time indicated above, being the Delivery Date:	
 
 	(a)	no Default has occurred or would result from the Delivery of the Aircraft;	
 
 	(b)	the representations and warranties of the Lessee contained in Clause 3 ( Representations and Warranties ) of the Agreement remain and are true and accurate in all respects as of the Delivery Date (unless any such representation and warranty relates to an earlier date in which case it is true and accurate as of such earlier date);	
 
 	(c)	no circumstances exist or have come into being that is a Material Adverse Change;	
 
 	(d)	the Aircraft is insured as required by the Agreement; and	
 
 	(e)	the Aircraft is accepted for all purposes of the Agreement.	
 
- 122 -

			
Signed:	 	 	
Name (capitals):	 		
Title:	 		
	
duly authorised for and on behalf of
[•]	
	
We hereby acknowledge and accept the above	
		
Signed:	 	 	
Name (capitals):	 		
Title:	 		
duly authorised for and on behalf of
[•]
 
- 123 -

Annex – Aircraft Document
As detailed on the attached Airbus Delivery Documents List.
 
- 124 -

SCHEDULE 6
PAYMENT
PART A
RENT
The fixed rate Rent shall be calculated as follows:
*****
where:
“ Base Rent ” equals *****;
“ Actual Rate ” means the ***** as shown on Bloomberg IRSB 18, rounded to two decimal places and expressed as a number rather than a percentage) on the date falling two (2) Business Days before the Delivery Date;
“ Assumed Rate ” means *****
“ N ” equals *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 125 -

PART B
MAINTENANCE PAYMENTS
 
1.	Maintenance Payments rates	
The Lessee will pay Maintenance Payments to the Lessor, calculated at rates specified below for each whole calendar month (commencing with the first whole calendar month following the Delivery Date). For the period between the Delivery Date and the start of the next calendar month (if the Delivery Date is not the first day of the month), and the period from the end of the last full calendar month prior to the Expiry Date and the Expiry Date, Maintenance Payments shall be calculated on a pro-rated basis. Maintenance Payments will be paid within fifteen (15) days following the end of each calendar month to which they apply or, with respect to the final payment of Maintenance Payments, on the Expiry Date. The rates referred to above are as follows:
 
 	(a)	for the Airframe	
 
 	(i)	***** per calendar month in respect of the Airframe 6Y Structural Check (the “ 6Y Check Payment Amount ”);	
 
 	(ii)	***** per calendar month in respect of the Airframe 12Y Structural Check (the “ 12Y Check Payment Amount ”); and	
 
 	(b)	for the Landing Gear, ***** per calendar month (“ Landing Gear Payment Amount ”). The balance of Landing Gear Maintenance Payments shall be divided into sub-accounts (each a Landing Gear Maintenance Sub-Account ) as follows:	
 
 	(i)	Nose Landing Gear 30%;	
 
 	(ii)	hand Main Landing Gear 35%; and	
 
 	(iii)	hand Main Landing Gear 35%.	
 
 	(c)	for each Engine number of Flight Hours recorded on each Engine multiplied by the rate of ***** per Engine for each Flight Hour of the first run of such Engine, and ***** per Engine for each Flight Hour of the subsequent runs using each calendar month (the “ Engine Payment Amount ”).	
 
 	(d)	for Engine LLPs, the number of Cycles recorded on each Engine multiplied by the Engine Manufacturer’s then applicable catalogue cost per Cycle (as notified by the Lessor or the Owner Participant to the Lessee from time to time) during each calendar month (“ Engine LLP Payment Amount ”); and	
 
 	(e)	for the APU, the number of APL Operating Hours recorded on the APU multiplied by the rate of ***** during each calendar month “ APU Payment Amount ”).	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
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2.	Notification of Flight Hours and Cycles	
Within the first ten (10) days of each calendar month of the Lease Period, the Lessee will notify the Lessor and the Owner Participant of the Flight Hours and Cycles recorded on the Airframe, each Engine, and the Landing Gear during such period. If in any calendar month the Lessee fails to provide such utilisation information by the required date, Maintenance Payments shall be payable by the Lessee on the basis of the average utilisation of the Aircraft since Delivery and any subsequent discrepancies shall be reconciled following receipt by the Lessor and the Owner Participant of the required utilisation information.
 
3.	Annual Increase	
The Maintenance Payments rates are stated in January 2011 Dollars and will be adjusted on January 1, 2012 and thereafter annually on January 1 of each year during the Lease Period, as follows:
 
 	(a)	with respect to the 6Y Check Rent Amount, the 12Y Check Rent Amount, the Landing Gear Rent Amount, the Engine Rent Amount and the APU Rent Amount by ***** per annum by way of agreed inflation adjustment; and	
 
 	(b)	with respect to the Engine LLP Rent Amount, in accordance with the then current Engine Manufacturer’s Price Catalogue.	
 
4.	Flight Hour/Cycle adjustment	
The Engine Payment Amount rates are based on (a) an assumed Flight Hour to Cycle ratio of 2.2:1 (the “ Assumed Ratio ”), and an annual utilisation of 4,000 Flight Hours (“ Assumed Utilisation ”).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 127 -

If the Assumed Ratio or the Assumed Utilisation prove to be incorrect at any time throughout the Lease Period based on the Lessee’s actual operation, the rate of Engine Amounts payable by the Lessee may be adjusted by the Lessor (a) with written notice to the Lessee (where the rate per Flight Hour shall be increased) and (b) upon receipt of written notice from the Lessee (where the rate per Flight Hour shall be decreased). Any such adjustment shall be calculated by the Lessor based on the following tables (Table A in case of the first run for each Engine and Table B in case of subsequent runs for each Engine) and where the actual Flight Hour to Cycle ratio is not specified in the table, the revised rate shall be determined by linear interpolation between the closest observed ratio, and once notified by the Lessor to the Lessee, shall apply for the purposes of this Agreement:
Table A (for the first run for each Engine):

Flight Hour
Cycle Ratio	  	Derate	 	  	1	 	1.35	 	1.5	 	1.65	 	2	 	2.5	 	3	
Engine Rent amount (January 2011 Dollars)	  	 	Up to 10%	  	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
	  	 	11% to 18%	  	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
	  	 	Higher 18%	  	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
Table B (for subsequent runs for each Engine):

Flight Hour
Cycle Ratio	  	Derate	  	1	 	1.35	 	1.5	 	1.65	 	2	 	2.5	 	3	
Engine Rent amount (January 2011 Dollars)	  	Up to 10%	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
	  	11% to 18%	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
	  	Higher 18%	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The Lessee shall notify the Lessor and the Owner Participant in writing, promptly following the Assumed Ratio or the Assumed Utilisation ceasing to be correct for any twelve (12) month period.
 
5.	Notional Account	
 
 	(a)	All Maintenance Payments paid by the Lessee to the Lessor will, on receipt by the Lessor, irrevocably and unconditionally be the sole and exclusive property of the Lessor, subject only to the express provisions of this Agreement. The Lessor (or its designee) or the Owner Participant may co-mingle Maintenance Payments with its general funds and will not hold such funds as agent or on trust for the Lessee or in any similar capacity. The Lessor or the Owner Participant may assign or pledge its interest in, or otherwise create a Security Interest in respect of, the Maintenance Payments, to the Security Trustee. No interest shall accrue or be paid by the Lessor any time to the Lessee.	
 
 	(b)	The Lessor will establish separate notional accounts for each item in respect of which Maintenance Payments are paid. References in this Part B of Schedule 6 ( Maintenance Payments ) to separate notional accounts are to ledger entries that allocate the payments to applicable types of maintenance (and, as applicable, further allocate the payments by Engine, Engine module,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 128 -

 	Engine Life Limited parts and Landing Gear) as provided therein and herein solely to facilitate the calculation of Lessor’s Maintenance Contribution obligation for such item of maintenance (and, as applicable, allocated by Engine, Engine module, Engine Life Limited Parts and Landing Gear), with there being no actual accounts with such amounts credited therein. The Maintenance Payments paid in respect of the Engines and Engine LLPs will be identified by the respective Engine serial number and module. The Maintenance Contribution obligations for one Engine module cannot be used in connection with the maintenance or the Engine LLP replacement relating to another Engine and module.	
 
 	(c)	The Lessor will calculate the balance (the “ Available Balance ”) of each notional account being all sums received by it in respect of relevant maintenance task less sums paid out by the Lessor in respect of such maintenance task in accordance with this Agreement to calculate the Lessor’s’ further Maintenance Contribution obligations.	
 
 	(d)	Following the termination of the leasing of the Aircraft, the then Available Balance of each notional account, following the payment of any claims in accordance with this Schedule, will be retained by the Lessor free from any claim or interest of the Lessee.	
 
6.	Qualifying Work	
Subject to the terms of this Agreement, the Lessee can claim for reimbursement (Lessor’s “ Maintenance Contribution ” obligations) in respect of the following work and net costs thereof (“ Qualifying Work ”):
 
 	(a)	with respect to the Airframe and the 6Y Check Rent related Available Balance the performance of the Airframe 6Y Structural Check;	
 
 	(b)	with respect to the Airframe and the 12Y Check Rent related Available Balance, the Airframe 12Y Structural Check;	
 
 	(c)	with respect to each Engine, the performance of an Engine Performance Restoration Shop Visit;	
 
 	(d)	with respect to each Landing Gear, the performance of a Landing Gear Overhaul;	
 
 	(e)	with respect to the APU, the performance of an APU Gas Path Refurbishment; and	
 
 	(f)	with respect to each Engine LLP, the cost of the replacement Engine LLP (less any credits obtained for the remaining life) on its reaching its life limit, in connection with any Engine Performance Restoration Shop Visit.	
Prior to the commencement of any Qualifying Work, the Lessee shall notify the Lessor and the Owner Participant of the Maintenance Performer who will perform the Qualifying Work and shall provide the Lessor with a draft of the relevant workscope and a Statement setting forth such Maintenance Performer’s qualifications to perform such work. The Lessor or the Owner Participant may (at its cost and expense) request
 
- 129 -

additional work to be added to the workscope which does not unreasonably affect the time necessary to complete such Qualifying Work. In respect of any Qualifying Work and prior to the commencement thereto, the relevant final workscope shall be approved by the Lessor (such approval not to be unreasonably withheld or delayed).
 
7.	Making a Claim	
To make a claim in respect of Qualifying Work, the Lessee must provide to the Lessor full details of the Qualifying Work performed in accordance with this Agreement including invoices and receipts, relevant repair orders, full shop visit reports and relevant pages from the Aircraft’s technical log book, or component history cards and any other Aircraft Document, together with a statement from the Maintenance Performer confirming that there is no outstanding balance due in relation to such Qualifying Work and in the case of an Engine Performance Restoration Shop Visit, the relevant Engine must have been released and certified as serviceable by the Maintenance Performer.
 
8.	Payment by the Lessor	
The Lessor will pay to the Lessee
(i) in the case of Airframe 6 Year Structural Check, Airframe 12 Year Structural Check, APU Gas Path Refurbishment and Landing Gear Overhaul, an amount equal to the Available Balance in the relevant notional account as at the time of commencement of the relevant Qualifying Work;
(ii) in the case of Engine Performance Restoration, an amount equal to the lesser of (y) the cost of such Engine Performance Restoration (z) and the Available Balance in the relevant notional account, as at the time of commencement of the relevant Qualifying Work;
(iii) in the case of Engine LLPs, an amount equal to the lesser of (y) the cost of the replacement Engine LLPs (z) and the Available Balance in the relevant notional account, spilt into individual Engine LLP funds, as at the time of commencement of the relevant Qualifying Work;
reasonably promptly after the Lessor having received all evidence required pursuant to the terms of this Agreement subject to:
 
 	(a)	the Lessor (acting reasonably) being satisfied that the work performed qualifies for reimbursement in accordance with this Agreement;	
 
 	(b)	no Default having occurred and then continuing; and	
 
 	(c)	the claim not being excluded pursuant to paragraph 9 below.	
Subject to terms of this Agreement, at the Lessee’s request, the Lessor shall: (i) upon the satisfactory completion of the relevant Qualifying Work pay up to 75% of the Available Balance in the notional account for that item to the Maintenance Performer performing the Qualifying Work and (ii) upon receipt of the final invoice from the Maintenance Performer pay to such Maintenance Performer or the Lessee by way of reimbursement for amounts expended in respect of such Qualifying Work, the lesser
 
- 130 -

of (A) the unpaid portion of the invoice and (B) the remaining Available Balance in the notional account for that item. To the extent the Available Balance of the relevant notional account is insufficient to pay any claim in full, any shortfall will not be credited against future Qualifying Work in relation to that item nor to another notional account and will be for the Lessee’s account.
 
9.	Excluded Work	
No reimbursement will be made by the Lessor in respect of the following:
 
 	(a)	repair of damage resulting from operation of the Aircraft outside the Aircraft operational limits established by the equipment type certificate holder (operational mishandling);	
 
 	(b)	any customs fees, removal, reinstallation or transport costs, parking costs, exchange, handling or similar charges and those items resulting from repairs covered by the Lessee’s insurance (deductibles also being for the account of the Lessee);	
 
 	(c)	any costs incurred as a result of negligent maintenance or installation operational mishandling, negligence, accident, ingestion, or other accident cause;	
 
 	(d)	with respect to Parts, any cost which is in excess of the relevant Manufacturer’s list price for the relevant Parts;	
 
 	(e)	provisioning, maintenance, replacement and repair of engine QEC kits;	
 
 	(f)	Aircraft modifications made in accordance with Airworthiness Directives or Manufacturer’s Service Bulletins;	
 
 	(g)	costs of labour and/or materials recovered or recoverable (and in respect of which the Manufacturer has confirmed coverage) under the Manufacturer’s or the Engine Manufacturer’s warranties, other vendor warranties or under any insurances, or in respect of which the Lessee otherwise receives a credit, discount, allowance or similar reduction in price;	
 
 	(h)	provisions, exchange, repair, and/or replacement of vendor proprietary accessories;	
 
 	(i)	repair, replacement or modification of thrust reversers, inlet, fan cowls, engine cowlings, nozzle and plug;	
 
 	(j)	components, unless they are scheduled to be overhauled at that check and their lives are fully restored (and if this is not the case, a pro-rating payment adjustment will be made in respect of overhauls or replacements that are made before the relevant component scheduled life limit); and	
 
 	(k)	repair of damage not occurring in normal operation ( e.g. foreign object damage, damage resulting from atmospheric conditions, hostile acts or negligence of any personnel).	
 
- 131 -

10.	Total Loss	
In the event there shall occur a Total Loss, upon receipt by the Lessor or the Security Trustee of the Agreed Value and all other amounts then due and payable to the Lessor hereunder, and so long as no Default has occurred and is continuing, the Lessor shall pay to the Lessee an amount equal to the total of all Maintenance Payments received less an amount equal to all Maintenance Contributions theretofor made by the Lessor hereunder.
 
- 132 -

PART C
END OF LEASE MAINTENANCE PAYMENT ADJUSTMENTS
 
1.	On or prior to the Expiry Date and as a condition to the Redelivery of the Aircraft, the Lessee shall compensate the Lessor for each engine LLP installed on each Engine, where such Engine LLP has ***** of the Engine Manufacturer’s total approved life remaining.	
 
2.	Compensation for each Engine LLP shall be calculated as follows:	
*****
where:
*****;
*****
*****.
The compensation for each Engine shall be the aggregate of the compensation payable for each Engine LLP installed in such Engine
 
3.	So long as no Default has occurred and is continuing, any Engine LLP Payment related Available Balance in regard of the applicable Engine (only) notionally held by the Lessor as of the Expiry Date shall be applied by the Lessor towards satisfaction of the Engine LLP Compensation.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 133 -

PART D
OTHER ECONOMIC TERMS
“ Agreed Value ” means ***** reducing by ***** on each annual insurance renewal date during the Lease Period beginning on the renewal date falling on or after first anniversary of the Delivery Date.
“ Lessor’s Cost ” means *****.
“ Security Deposit ” means an amount equal to *****.
“ Partial Loss Threshold ” means *****.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 134 -

PART E
AIRWORTHINESS DIRECTIVE COST SHARING FORMULA
Where the cost of the performance for implementing on a terminating basis during the Lease Period any:
 
(a)	individual Airworthiness Directive issued by the FAA;	
 
(b)	Manufacturer mandatory Service Bulletin (other than those mandatory service bulletins which do not become FAA Airworthiness Directives); and	
 
(c)	FAA mandated modifications;	
(each item at (a) - (c) being a “ Relevant Directive ”) exceeds *****, the Lessor shall pay a portion of the cost to the Lessee, upon redelivery of the Aircraft in the Redelivery Condition at the Expiry Date, in accordance with the following formula:
*****
where:
*****
provided that no Default shall have occurred and be continuing (or promptly upon cure thereof and in the absence of any other Default) and the Lessee shall have presented substantiating documentation reasonably acceptable to the Lessor in the same manner and using the same process as undertaken in connection with any Maintenance Contribution payment. Upon any extension of the Lease Period hereof and as a condition thereto, the Lessee shall repay to the Lessor any portion of a payment made pursuant to the foregoing to the extent and solely to the extent such payment relates to the extended Lease Period and would not have been made had the Lease Period been extended prior to such payment.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 135 -

SCHEDULE 6
[TO BE INTENTIONALLY LEFT BLANK IN THE FAA-FILED VERSION]
 
- 136 -

SCHEDULE 7
REPORTING & NOTICE
PART A
FORM OF TECHNICAL REPORT

Monthly Data Return Document	
Operator: [ — ]	  	 	  	 	
Registration: [ — ]	  	 	  	 	
Aircraft serial number:            	  	Type:                                                                          	  	Month ending:                                                      	
 
1.	Aircraft utilisation	

Aircraft total Flight Hours	  	 	
Aircraft total Cycles	  	 	
Flight Hours for month	  	 	
Cycles for month	  	 	
 
2.	Engine status (originally installed Engines at Delivery	

   	  	Pos.l	  	Pos.2	
Engine Serial Number:	  	 	  	 	
Flight Hours for the month:	  	 	  	 	
Cycles for the month:	  	 	  	 	
Flight Hours/Cycles since last shop visit:	  	 	  	 	
Next limiter:	  	 	  	 	
Remaining Cycles to next limiter:	  	 	  	 	
 
3.	APU — serial number	

   	  	Flight Hours/Cycle
since new	  	Flight Hours/Cycle
for the month	  	Flight Hours/Cycle
since  last shop visit	
 	  	 	  	 	  	 	
Limiter:	  	 	  	Cycles Remaining	  	 	
 
- 137 -

4.	Landing Gears	

   	  	Total Flight
Hours/Cycles	  	Flight
Hours/Cycles
since last
overhaul	  	Date of next
OVH	  	Cycles till next
OVH	
Nose	  	 	  	 	  	 	  	 	
Right	  	 	  	 	  	 	  	 	
Left	  	 	  	 	  	 	  	 	
Centre	  	 	  	 	  	 	  	 	
Major Maintenance Events reporting (only as applicable)
 
 	•	 	C-check / 8 year / 10 year / 12 year check: complete section 5	
 
 	•	 	Major damage: complete section 6	
 
 	•	 	APU change: complete section 7	
 
 	•	 	Engine change: complete section 8	
 
 	•	 	Maintenance program change: complete section 9	
 
 	•	 	Other significant events: complete section 10	
 
5.	Major Check Report	

Date of Check:	  	Total Flight Hours:	  	Total Cycles:	
Location:	  	Agent:	  	Downtime:	
Type of check:	
Description of work to be carried out:	

 	

 	
NEXT DUE: C-check date	  	8 year/12 year date:	
(which C [ — ])	  	 	  	 	
 
- 138 -

6.	Major Damage Report	

Major Damage Description: (if outside SRM only)	

 	

 	

 	

7.	APU Removal	

 	

 	

 	

 	
 
8.	Engine removal and shop visit report – for removed Engine: (only original Engines): provide shop visit report later when available .	

Serial Number:	  	Date of removal:	
Position:	  	Airframe Flight Hours at removal:	
Engine Total Hours:	  	Airframe Cycles at removal:	
Flight Hours/Cycles since last shop visit:	  	 	
Shop visit:	  	 	
Reason for removal:	  	 	

 	 	
 	  	 	
Repair Agent:	  	Location:	
 
- 139 -

	
Intended work scope: (incl. AD/SB):	

 	

9.	Maintenance Programme Revisions	

Date	
Details of revisions/correspondence with MPD task numbers	
Effective date:	
 
10.	Significant Event	

 	
 	
For
Name:
Signature:
Date:
 
- 140 -

PART B
NOTICES
Lessee

Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Address:	  	Prolongación Paseo de la Reforma No. 490	
	  	Piso 1 (Edificio GE)	
	  	Colonia Santa Fé Peña Blanca	
	  	Del. Alvaro Obregón	
	  	México D.F. 01012	
	  	México	
		
Facsimile:	  	+ 011 52 55 5261 6460	
		
Email:	  	alfonso.ascencio@volaris.com.mx.	
		
Attention:	  	General Counsel	
		
Lessor	  		
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, as owner trustee	
		
Address:	  	299 South Main Street, 12th Floor	
	  	Salt Lake City, Utah 84111	
	  	United States of America	
		
Fax:	  	+1 801-246-5053	
		
Email:	  	CorporateLeaseGroup@wellsfargo.com	
		
Attention:	  	Corporate Trust Department	
		
with a copy to:                    	  	Avolon Aerospace Leasing Limited	
	  	The Oval, Building 3	
	  	Shelbourne Road	
	  	Ballsbridge	
	  	Dublin 4	
	  	Ireland	
		
Fax:	  	+353 1 485 3242	
		
Email:	  	notices@avolon.aero	
		
Attention:	  	Chief Operating Officer	
 
- 141 -

SCHEDULE 8
INSURANCE REQUIREMENTS
 
1.	Scope of cover	
 
1.1	The Lessee will at its own cost maintain the following concerning the Aircraft:	
 
 	(a)	Hull and Spares All Risks Insurance (which may be contained in separate policies) which will cover the Aircraft for not less than the Agreed Value and Engines and Parts for their replacement cost, against all risks of loss or damage sustained (i) by the Aircraft or (ii) by Engines or Parts which are for the time being not treated for insurance purposes as part of the Aircraft.	
 
 	(b)	Hull, Spares, War and Allied Perils Insurance which will cover the Aircraft for not less than the Agreed Value and Engines and Parts for their replacement cost against all of those risks currently enumerated in Lloyds Endorsement AVN 48B (War, Hi-jacking and Other Perils Exclusion Clause (Aviation) other than paragraph (b) of that Form) or equivalent.	
 
 	(c)	Airline Liability Insurance for a combined single limit of liability of not less than ***** for operations in the passenger configuration, for any one accident or series of accidents for each aircraft arising out of any one occurrence and for an unlimited number of occurrences, which will include (but may not be limited to) aircraft third party (bodily injury/property damage), passenger (including passengers’ checked and unchecked baggage and personal effects), cargo and mail legal liability and general third party liability insurance including products, hangar keepers’ and premises liability. This policy shall include the AVN 52D Extended Coverage Endorsement Aviation Liabilities and additional coverage in respect of War and Allied Perils Third Party Baggage Cargo Legal Liabilities of not less than ***** each occurrence each aircraft.	
 
2.	Additional Terms of Hull and Spares Insurance	
 
2.1	The Lessee will ensure that each Insurance policy taken out as specified in paragraphs 1.1 (a) and 1.1(b):	
 
 	(a)	includes the Lessor, the Owner Participant and each of the Financiers and their respective successors and assigns as an additional insured;	
 
 	(b)	provides that any payment of proceeds in an amount equal to the Agreed Value in respect of a Total Loss will be paid directly to the Loss Payee or as the Loss Payee may direct, for the account of all interests, and any other loss will be settled jointly with the Lessor and the Lessee and will be payable to the Loss Payee; and	
 
 	(c)	provides in the form of AVS 103 or equivalent that the underwriters subscribing to each relevant insurance policy agree between themselves to a 50/50 claims funding arrangement in the event of any dispute as to which insurance is applicable.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 142 -

2.2	The Lessee will ensure that each Insurance policy taken out as specified in paragraph 1(a) will provide that:	
 
 	(a)	any deductibles will be no greater than the following:	
 
 	(i)	Hull All Risks : ***** each claim;	
 
 	(ii)	Spares : ***** each claim, but in respect of test bed running of Engines the relevant deductible will be that in (a) above.	
 
 	(b)	the insurers have no right to replace the Aircraft on a Total Loss (arranged, constructive or otherwise).	
 
 	(c)	the insurers recognise that the Lessee and the Lessor have agreed that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.	
 
 	(d)	the insurers confirm that under Clause 17 ( Insurance ) and this Schedule, if the insured has installed an engine owned by a third party on the Aircraft either (a) the Hull Insurance will automatically increase to such higher amount as is necessary in order to satisfy both the Lessor’s requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner; or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirement of the insured to such third party owner.	
 
3.	Additional terms of liability insurance	
The Lessee will ensure in respect of each liability Insurance policy that it:
 
 	(a)	contains a provision insuring (to the extent of the risks covered by the policy) the indemnity provisions of this Agreement, if available in the relevant market;	
 
 	(b)	includes each Indemnitee as an addition insured;	
 
 	(c)	does not provide for any deductible other than in respect of cargo and baggage;	
 
 	(d)	contains a provision that the Insurance policy be primary and without any right of contribution from any other insurance which may be available to the Lessor and	
 
 	(e)	contains a severability of interests clause which provides that the Insurance, except for the limit of liability, will operate to give each assured the same protection as if there was a separate policy issued to each assured.	
 
4.	Terms common to all Insurance	
The Lessee will ensure that each Insurance policy:
 
 	(a)	is in accordance with industry practice of prudent international air carrier operating similar aircraft on routes similar to those of the Lessee and covers at least such risks as are customarily insured against in the airline industry;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 143 -

 	(b)	provides cover denominated in Dollars (other than in respect of Liability Claims which may be payable in the currency of demand);	
 
 	(c)	provides for worldwide coverage, subject only to such exceptions as the Lessor, the Owner Participant and the Security Trustee may agree;	
 
 	(d)	incorporates the provisions of Lloyds Endorsement AVN67B, AVN67C or equivalent provisions satisfactory to the Lessor, the Owner Participant and the Security Trustee;	
 
 	(e)	provides that, in relation to the interests of each of the additional insureds, the Insurances will not be invalidated by any act or omission by the Lessee, or any other person other than the respective additional insureds seeking protection and shall insure the interests of each of the additional insureds regardless of any breach or violation by the Lessee, or any other person other than the respective additional insureds seeking protection of any warranty, declaration or condition, contained in such Insurances;	
 
 	(f)	provides that the insurers will hold harmless and waive any rights of recourse against the additional assureds or to be subrogated to any rights of the Lessor of the Lessee;	
 
 	(g)	provides that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim; and	
 
 	(h)	provides that the Insurances will continue unaltered for the benefit of the additional insureds for at least thirty (30) days after written notice by registered mail or fax of any cancellation, material adverse change, event of non-payment of premium or installment thereof has been issued by insurers, except in the case of war risks for which seven (7) days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the five great powers or nuclear peril for which termination is automatic.	
 
5.	Reinsurance	
The Lessor may require that the original insurers maintain ***** reinsurance for so long as the original Insurance is required in force under this Agreement. Such reinsurance will be placed with approved underwriters through the Insurance Broker and will reinsure such percentage of all risks insured by the original Insurance as the Lessor, the Owner Participant or the Security Trustee may specify. Such reinsurance will be:
 
 	(a)	be on the same terms as the original Insurance;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
 
- 144 -

 	(b)	contain a “cut-through” clause in terms satisfactory to the Lessor, the Owner Participant and the Security Trustee; and	
 
 	(c)	provide for payment to be made notwithstanding:	
 
 	(i)	any bankruptcy, insolvency, concurso mercantil , liquidation or dissolution of any of the original insurers; and/or	
 
 	(ii)	that the original insurers have made no payment under the original Insurance policies.	
 
6.	Application of insurance proceeds	
The following are the directions of the Indemnitees for the application of any proceeds of the Insurance:
 
 	(a)	in respect of a Total Loss, all proceeds of the Insurance in an amount equal to the Agreed Value will be paid to the Loss Payee without any deduction whatsoever;	
 
 	(b)	insurance proceeds for damage or loss (not amounting to a Total Loss) exceeding the Partial Loss Threshold: all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Lease Period not constituting a Total Loss and in excess of the Partial Loss Threshold will be paid to the Loss Payee and applied in payment (or to reimburse the Lessee) for repairs or replacement property upon the Lessor being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Subject to paragraph (e) below, any balance remaining may be retained by the Lessee;	
 
 	(c)	insurance proceeds for damage or loss (not amounting to a Total Loss) equal to or less than the Partial Loss Threshold: insurance proceeds in amounts equal to or less than the Partial Loss Threshold may be paid by the insurer directly to the Lessee;	
 
 	(d)	Liability Proceeds: all insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to the Loss Payee to be paid directly in satisfaction of the relevant liability or to the Lessee in reimbursement of any payment so made; and	
 
 	(e)	Default or Event of Default: notwithstanding the foregoing paragraphs, if at the time of the payment of any such insurance proceeds a Default or Event of Default has occurred and is continuing, all such proceeds (other than the proceeds of any third party liability Insurances) will be paid to or retained by the Loss Payee to be applied toward payment of any amounts which may be or become payable by the Lessee or any of its Affiliates under their Agreement or any Other Agreement in such order as the Loss Payee may elect and, upon cure of such Event of Default, the unapplied remainder shall be paid to the Lessee.	
 
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To the extent that insurance proceeds are paid to the Lessee, the Lessee agrees to comply with the foregoing provisions and apply or pay over such proceeds as so required.
 
7.	Contract parties and documents	
The Lessee will ensure that for the purposes of Lloyds Endorsement AVN 67B or AVN67C:
 
 	(a)	this Agreement and such other of the Transaction Documents and/or the Financing Documents as the Lessor requires are identified as “contracts”; and	
 
 	(b)	the Indemnitees are named as the “contract parties”.	
 
8.	AVN67B	
Notwithstanding the provisions of this Schedule 8, for so long as Airline Finance/Lease Contract Endorsement AVN67B or AVN67C is in effect and it remains the general aviation insurance market practice to insure equipment financed or leased on the basis of such endorsement, the Lessee may maintain insurances in respect of the Aircraft for the purposes of this Agreement which incorporate the terms and conditions of AVN67B or AVN67C (as applicable). To the extent any provision of AVN67B conflicts or is otherwise inconsistent with the requirements of this Schedule 8, then such AVN67B endorsement will be deemed to satisfy the relevant requirements of this Agreement. An insurance certificate in the form of AVN67B or AVN67C (as applicable) will be deemed to satisfy the requirements of this Schedule 8.
 
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SCHEDULE 9
REDELIVERY
PART A
REDELIVERY PROCEDURE
 
1.	Inspection	
 
1.1	On, or immediately prior to the Expiry Date, the Lessee shall perform a redelivery check flight of the Aircraft of up to two (2) hours duration with not more than two (2) of the Lessor’s representatives on board, using the Manufacturer’s recommended acceptance flight procedures (including take-off performance test and Engine ground runs, to demonstrate that each Engine performance including EGT margin is consistent with the Engine Flight Hours and Cycles operated since the previous Engine Performance Restoration, but in any event no less than 30 degrees Celsius at maximum rated take off power 27,000 lbs thrust at sea level, standard ambient pressure conditions and an outside temperature of 30 degrees Celsius), or such other procedures reasonably acceptable to the Lessor. All discrepancies found during such check flight which exceed maintenance manual allowable limits shall be corrected by the Lessee at the Lessee’s expense. The Lessee shall be responsible for all expenses associated with such flight and shall furnish the necessary crews and fuel.	
 
1.2	The Lessor shall inspect the Aircraft (the “ Final Inspection ”) prior to the Expiry Date. The Final Inspection of the Aircraft shall commence after its last revenue flight and shall include (a) a complete video borescope inspection of all Engine modules, (b) an inspection of all of the Aircraft Documents and (c) the opening or removal of panels as reasonably required by the Lessor, and access to all compartments and bays, which are customarily opened in connection with maintenance redelivery services. All discrepancies discovered during such Final Inspection, exceeding maintenance manual allowable limits or not in compliance with this Agreement shall be repaired by the Lessee in compliance with the Manufacturers’ maintenance requirements which are not interim in nature. The Lessor shall be given the opportunity to conduct all activity necessary to verify that the Aircraft complies with the requirements set forth herein. The Final Inspection of the Aircraft Documents shall commence on a date as mutually agreed by the Lessor and the Lessee. To the extent that (a) any repairs to the Aircraft or (b) correction of discrepancies found in the Aircraft Documents, extend beyond the Expiry Date, the Lease Period shall be deemed to have been automatically extended in accordance with Clause 18.2.1 ( Rectification ).	
 
1.3	All Aircraft Documents and other current and historical records delivered with the Aircraft on the Delivery Date, and all other Aircraft Documents acquired or prepared by the Lessee during the Lease Period shall be returned with the Aircraft including, without limitation, (a) time logs showing Aircraft and Engine Flight Hours and Cycles on any given date, (b) documents, (c) manuals (revised up to and including the most current revisions issued by the Manufacturer), (d) data, (e) Overhaul records, (f) time controlled Part traceability to overhaul and to “zero time since new” for time controlled Parts which have life limits as determined by the Manufacturer or EASA and the FAA, (g) log books, (h) original Aircraft and Engine delivery documents, (i) EASA Form One or FAA 8130-3 with EASA dual release (or any successor thereto) for all then currently installed Parts which have replaced by the Lessee, (j) teardown reports for time controlled Parts certifying overhaul of such Part in	
 
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 	accordance with Manufacturer’s overhaul manual if not indicated as such on the EASA Form One or FAA 8130-3 with EASA dual release for time controlled Parts then currently installed on the Aircraft and which have been overhauled or installed during the Lease Period, (k) EASA, FAA and/or other Aviation Authority forms (as applicable), (1) records of modification accomplished during the Lease Period with respect to the Airframe, Engines, Landing Gear and APU, (m) Airframe and Engine inspection records (including NDT documentation such as x-ray, eddy current, etc.), (n) burn test certification records, including without limitation, those required by EASA and the FAA for seat covers, cushions and carpeting, and (o) all other documentation in the possession of the Lessee, pertaining to the Airframe, Engines and Parts. All discrepancies found in the Aircraft Documents shall be corrected and any missing Aircraft Documents shall be reconstructed by the Lessee at the Lessee’s sole cost and expense prior to the return of the Aircraft. All Aircraft Documents shall be in the English language. In the event any Aircraft Documents are not provided to the Lessor, or are not in the English language, on the Expiry Date, the Aircraft shall be deemed to not meet return conditions and the Lease Period shall be deemed to have been automatically extended in accordance with Clause 18.2.1 ( Rectification ).	
 
1.4	All aircraft and engine systems (including galleys, passenger and cargo compartments) shall be fully operational for their intended functions. The Lessor shall be entitled to operationally check all systems prior to the return of the Aircraft and all defects found shall be repaired by the Lessee in compliance with the Manufacturers’ maintenance requirements which are not interim in nature, at the Lessee’s expense prior to return of the Aircraft.	
 
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PART B
REDELIVERY CONDITION
In addition to the requirements set forth in Clause 18 ( Return of the Aircraft ) of this Agreement, on or before the Expiry Date, or earlier termination of this Agreement (except upon a Total Loss of the Aircraft or Airframe), the Lessee, at the Lessee’s expense, shall return the Aircraft to the Lessor at the Redelivery Location in compliance with all of the following provisions:
 
1.	General	
 
1.1	The Aircraft shall be airworthy and have therefore been maintained and operated in accordance with the Agreement with the same care and consideration for the technical condition of the Aircraft as if it were to have been kept in continued regular service by the Lessee.	
 
1.2	The Aircraft exterior shall be washed and the interior shall be clean by commercial airline standards with all carpets freshly replaced. The cockpit shall be repainted as required, and placards replaced as required.	
 
1.3	All repairs to the Aircraft will have been accomplished and certified to a permanent standard, with no repeat inspections (if no terminating repair is available from the SRM or from the Manufacturer, then the repair is to be performed to the highest possible standard) in accordance with Manufacturer’s FAA and EASA approved data for the Aircraft.	
 
1.4	The Aircraft shall have no deferred maintenance items, carryovers, watch items or Parts which are not serviceable or are in inoperative condition. There shall be no additional or repair inspection requirement supplemental to the Manufacturer’s MPD.	
 
1.5	The Aircraft shall have no special or unique Manufacturer, Engine Manufacturer or Aviation Authority inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types)	
 
1.6	The Aircraft shall be in the same configuration as on the Delivery Date or as otherwise acceptable to the Lessor, and have installed the full complement of Engines and other items of equipment, Part and accessories as delivered and as would remain installed on the Aircraft were the Lessee to continue operating the same in continued regular passenger service, each such Item functioning in accordance with its intended use.	
 
1.7	The Aircraft shall comply with the Manufacturer’s original FAA approved type certificate specifications, as revised up to the Expiry Date, in accordance with supplemental type certificates approved, and Airworthiness Directives issued by the FAA and EASA applicable to the Aircraft.	
 
1.8	The Aircraft shall comply with all applicable EASA and FAA requirements and Airworthiness Directives on a terminating action basis which by their terms require compliance (i) on or before the Redelivery Date, (ii) falling due within one hundred and eighty days (180) thereafter, (iii) requiring compliance prior to the next C Check falling due after the Redelivery Date, if C Check level access is required for such	
 
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 	compliance, notwithstanding any waiver, deviation or time extension obtained by the Lessee from the Aviation Authority or otherwise. Any Airworthiness Directive not having a terminating option, shall be cleared on the basis of the highest level of inspection and/or maintenance option permitted by such Airworthiness Directive on the Redelivery Date.	
 
1.9	The Aircraft shall be in condition and certification standard, by modification if required, to (a) comply with all requirements for issuance of a current and effective FAA standard airworthiness certificate for passenger transport and commercial passenger operation by a US part 121 operator (except for installation of installation of an ozone filter (modification 21215) and the emergency exit inscription & marking (modification 21562) (b) shall comply with all EASA requirements (to the extent that such compliance does not affect the Lessee’s compliance with FAA requirements) for passenger operation as a transport category commercial aircraft in accordance with EU OPS to qualify for issuance of a EASA certificate of airworthiness immediately upon registration of the Aircraft with a EASA member state and permit immediate entry into service with an EU OPS operator and (c) have a valid export certificate of airworthiness issued by the Aviation Authority.	
 
1.10	Cockpit windows shall have no crazing or delamination that exceed maintenance manual allowable limits, and passenger compartment windows shall have no crazing which unsatisfactorily obstructs the view from the inside of the cabin of the Aircraft to the outside. All equipment and furnishings in the interior of the Aircraft which are defective, damaged, or excessively worn shall be repaired or replaced by the Lessee.	
 
1.11	The Aircraft shall have no leakage of fuel, oil, hydraulic fluid, or water which exceed the Manufacturers’ maintenance manual allowable limits.	
 
1.12	The Aircraft and Engines shall be in compliance with (a) all Manufacturer’s alert Service Bulletins which by the terms of such Service Bulletins, require compliance on or before the Expiry Date, and (b) all other Manufacturer’s Service Bulletins to the same extent that the Lessee has accomplished such Service Bulletins on similar model aircraft and engines of the same manufacture in the Lessee’s fleet, without discrimination.	
 
1.13	The Aircraft (including each Engine, Landing Gear, APU, and Part) shall not have any Flight Hour, Cycle, or calendar time extensions, or waivers with respect to any maintenance requirements.	
 
1.14	Prior to the Expiry Date, all repairs accomplished during the Lease Period of a temporary or interim nature, including permanent repairs with repeat inspection requirement and repairs using blind fasteners (except to the extent that the use of blind fasteners is considered a permanent repair with no repeat inspections in accordance with the latest revision structural repair manual for the Aircraft) and those requiring repetitive inspections or future upgrading, shall be upgraded to a permanent repair with no repeat inspection requirements and all external doublers (scab patches) installed during the Lease Period (except to the extent that installation of a doubler is the only approved repair or where a flush repair cannot be accomplished due to inaccessibility of the area), shall be replaced with flush repairs, all in accordance with the latest revision Manufacturer’s maintenance manual, structural repair manual, and Manufacturer’s FAA and EASA approved data, except if a flush repair is not allowable by the aforementioned documents or approved data.	
 
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1.15	The Lessee shall deliver to the Lessor, at no cost to the Lessor, all mandatory or alert service bulletin kits furnished without charge by a vendor or the manufacturer for installation on the Aircraft which have not been so installed together with appropriate instructions for installation provided with such kits. In the event such installation kits were purchased or manufactured by the Lessee, the Lessor shall have the exclusive right to purchase such kits at the Lessee’s actual cost for a period of ninety (90) days after return of the Aircraft and the non-exclusive right to purchase such kits thereafter.	
 
1.16	All fluid reservoirs shall be serviced to full levels in accordance with the maintenance manual.	
 
1.17	The Aircraft shall have all non-structural repairs, modifications and alteration accomplished in accordance with Manufacturer’s Service Bulletins or Manufacturer’s written approval with a statement of conformity to type certificate data.	
 
1.18	The Aircraft shall have no less than the following aircraft flight manual approved weights;	
 
 	(a)	MTOW – 77,000 kg	
 
 	(b)	MLW – 66,000 kg; and	
 
 	(c)	MZFW – 62,500 kg.	
 
2.	Paint	
The Aircraft fuselage, the wings, including radome, wing to body fairings, empennage, pylons and engine cowlings shall be prepared for repainting by sanding or stripping the paint, and repainted in a livery to be advised by the Lessor, using a quality paint acceptable to the Lessor, all in accordance with standard airline industry procedures. In the case the new livery is more complex than at Delivery, then the extra cost associated with applying such livery shall be borne by the Lessor. All other areas of the Aircraft where paint is peeled, chipped or worn out shall be restored as necessary to provide a uniform appearance. The Lessee shall prepare the Aircraft for such repainting by restoring aerodynamic sealer to areas requiring aerodynamic sealer due to deterioration or missing sealant. All required internal placards and markings shall be in the English language or in English and Spanish and shall be replaced if deteriorated. The external placards shall be as per the livery specification, and the costs associated therewith assigned as, described above.
 
3.	Airframe	
 
3.1	Immediately prior to the return of the Aircraft, the Aircraft will have accomplished an Airframe 12Y Structural Check and block C Check in accordance with the then current MPD so that all structural, systems, zonal and CPCP Airframe inspections in accordance with the then current MPD falling due within the next 6,000 Flight Hours, 4,500 Flight Cycles and twenty (20) calendar months after the Expiry Date have been accomplished, with all discrepancies permanently repaired. The Lessee shall give the Lessor not less than thirty (30) days prior written notice of the commencement date of	
 
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 	such Checks and the workscope to be accomplished, which notice shall specify the maintenance facility where such Checks shall be accomplished, which shall be reasonably acceptable to the Lessor. During the performance of such Checks, the Lessor shall, subject to the rules and requirements of such maintenance facility, be entitled to have representatives present in order to verify that such Checks comply with the requirements set forth herein. The Aircraft shall be weighed during such Check post completion repainting in accordance with this Schedule 9.	
 
3.2	Each Hard Time Component shall have a minimum of 6,000 Flight Hours, 4,500 Cycles and twenty (20) calendar months (or 100% of Hard-Time life if this interval is less), or the then current C Check interval per the MPD as applicable remaining to its next expected overhaul or removal in accordance with the then current MPD. No Part of the Aircraft or Engine (excluding Engine Life Limited Parts) will have total hours and total cycles since new greater than one hundred ten percent (110%) of that of the Airframe and with respect to all Parts as a group, the Parts will have an average total time since new no greater than that of the Airframe. Each “on-condition” and “condition-monitored” component will be serviceable and shall be supported by appropriate certification documentation such as EASA Form 1 or FAA Form 8130-3 with EASA dual release or approved equivalent.	
 
3.3	The fuselage shall be free of dents, abrasions and loose or pulled rivets which exceed the requirements of the Manufacturers Structural Repair Manual.	
 
3.4	The fuselage shall be substantially free from corrosion and the Aircraft shall be in compliance with the Manufacturer’s corrosion prevention and control document (CPCP) and the MPD and EASA and FAA CPCP Airworthiness Directive requirements.	
 
4.	Interior	
 
4.1	The Aircraft shall be in the configuration (including interior seating configuration, galleys and lavatories) as set forth in this Agreement other than any modifications required as permitted hereunder (unless the Lessor’s approval is conditioned on removal) or modification required to register and maintain the registration of the Aircraft with the FAA.	
 
4.2	Ceilings, sidewalls and bulkhead panels shall be clean, in good condition and free of all delamination, cracks and stains.	
 
4.3	All seats shall be serviceable, in good working condition with no cracked plastic	
 
4.4	All galleys compartments shall be clean, in good working condition and free of damage and corrosion. All plumbing and electrical connections and wiring shall be in good condition and the floor area properly sealed.	
 
4.5	All galley catering inserts including trolleys, containers, ovens, hot cups, coffee makers and water boilers shall be serviceable and in good condition.	
 
4.6	All lavatories shall be clean, in good condition, free of crack and stains and repainted as necessary, and floors shall be free of delamination.	
 
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5.	Engines, APU and Landing Gear	
 
5.1	Immediately prior to the return of the Aircraft, which shall be after the redelivery flight for the Aircraft, the Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine and combustion chamber section of each Engine, to be performed by the Lessor’s representative or an agency of the Lessor’s choosing, in accordance with the Manufacturer’s maintenance manual. All defects discovered as a result of such inspections, which (a) are within the maintenance manual limits and have repetitive inspection/maintenance requirements or (b) exceed the maintenance manual allowable limits for an installed engine, shall be corrected at the Lessee’s expense.	
 
5.2	Where the Lessee has not exercised the Renewal Option pursuant to Clause 2.6, each Engine shall have a minimum of 13,000 Flight Hours and 6,000 Flight Cycles remaining to its next expected removal for any required maintenance, Engine Performance Restoration Shop Visit, refurbishment, or overhaul and shall have no defect which will result in the foregoing minimum limits not being complied with. Each Engine LLP shall have a minimum of 15,000 Cycles remaining to its respective certified life limit. Where the Lessee has exercised the Renewal Option pursuant to Clause 2.6, each Engine shall have a minimum of 9,000 Flight Hours and 5,200 Flight Cycles remaining to its next expected removal for any required maintenance, Engine Performance Restoration Shop Visit, refurbishment, or overhaul and shall have no defect which will result in the foregoing minimum limits not being complied with. Each Engine LLP shall have a minimum of 13,000 Cycles remaining to its respective certified life limit. The Flight Hours remaining to the next expected removal with respect to each Engine shall be determined, without limitation, by (a) borescope inspection results, (b) analysis of trend monitoring of the respective Engine for the previous six (6) months, (c) time remaining on each Engine LLP, (d) Maintenance Programme requirements, (e) Manufacturer’s data, and (f) comparison with the average number of Flight Hours accumulated between full Performance Restoration Shop Visits during the prior 24 month period for all similar model engines operated in the Lessee’s fleet, with approximately the same number of total Flight Hours and Cycles accumulated.	
 
5.3	Each Engine shall be capable of developing full rated take-off power adjusted to the highest ambient outside air temperature for full rate take-off thrust at sea level, without exceeding the maximum limits for all parameters (temperature, fuel flow, rotor speed etc) as per the Manufacturer’s specifications. A full take-off power engine run-up shall be performed in the presence of the Lessor’s representatives immediately prior to the return of the Aircraft, in accordance with the performance test in the maintenance manual, or other comparable test (as agreed to by the Lessor), using temperature corrected charts. Each Engine shall have an EGT margin consistent with the number of Flight Hours and Cycles operated since the most recent Engine Performance Restoration Shop Visit and in any event have no less than the appropriate EGT margin to ensure an on-wing life of 13,000 Flight Hours and 6,000 Cycles (9,000 Flight Hours and 5,200 Cycles in the case where the Lessee has exercised the Renewal Option pursuant to Clause 2.6) as. The test results shall not exceed the corrected limits in the charts for any parameter.	
 
5.4	No Engine shall exhibit and adverse health trends as monitored by trend monitoring such parameters to include and not limited to EGT margin at take off and cruise, fuel flow oil pressure and vibration.	
 
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5.5	The APU shall (i) be serviceable, (ii) will have accomplished an APU Gas Path Refurbishment and have not more than 2,000 APU Operating Hours since such APU Gas Path Refurbishment and (iii) have not less than 6,000 APU Operating Cycles to the first life limited part restriction. The Lessor shall have the right to accomplish a complete borescope inspection of the compressor, turbine and combustion chamber sections of the APU. Such borescope inspection shall be performed by the Lessor’s representative, or an agency of the Lessor’s choosing, shall be accomplished immediately prior to return, and all discrepancies found beyond allowable limits for an installed APU shall be corrected by the Lessee.	
 
5.6	The original Landing Gear must be fitted to the Aircraft at Redelivery. Where the Lessee has not exercised the Renewal Option pursuant to Clause 2.6, the Landing Gear shall have no less than 13,000 Flight Hours and eighty four (84) months (whichever is most limiting) life remaining to the next scheduled removal for Landing Gear Overhaul. Where the Lessee has exercised the Renewal Option pursuant to Clause 2.6, the Landing Gear shall have no less than 11,500 Flight Hours and seventy two (72) months (whichever is most limiting) life remaining to the next scheduled removal for Landing Gear Overhaul. No life limited part shall have more than 110% of the Airframe total Cycles since new. The Landing Gear shall be clean and repaired as necessary, stripped and painted. The Landing Gear modification standard will meet the Manufacturer requirements for an Aircraft MTOW of 77,000 kg.	
 
5.7	Tires, wheels and brakes will, on an average, have no less than half of their useful life remaining but in no event shall individually have less than 25% of their useful life remaining.	
 
6.	Corrosion	
 
6.1	The Aircraft shall be in compliance with the Manufacturer’s corrosion prevention and control programme (CPCP) document, the CPCP requirements of the Manufacturer’s Maintenance Planning Document and EASA CPCP airworthiness directive requirements on a 100% basis without the Lessee fleet sampling; and	
 
6.2	The entire fuselage will be substantially free from corrosion and all mild and moderate corrosion found will be adequately cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s structural repair manual.	
 
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SCHEDULE 10
FORM OF NOTICE AND ACKNOWLEDGEMENT
 
From:	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee (the “ Lessor ”)	
 
To:	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “ Lessee ”)	
[ — ] 20[ — ]
Ladies and Gentlemen
We refer to the Aircraft Operating Lease Agreement (MSN 4741) described on the attached Annex 1 (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A320-233 Aircraft with manufacturer’s serial number 4741 (together with the engines described in the Lease Agreement, the “ Aircraft ”). All terms defined in the Lease Agreement shall, unless the context otherwise requires, have the same meanings in this Notice and Acknowledgment (this “ Notice ”).
We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:
 
1.	By the Security Trust and Guarantee Agreement, the Aircraft Mortgage and Security Agreement and the Local Law Aircraft Mortgage, each as more particularly described in Annex C attached hereto (the “ Local Law Mortgage ”) between The Bank of New York Mellon (the “ Collateral Agent ”) and ourselves, we have, among other things, assigned to the Collateral Agent as security, and granted to the Collateral Agent a security interest in, all of our right, title and interest in and to (a) the Aircraft, (b) the Lease Agreement, and all other agreements (including any side letters, guarantees, or subleases) entered into in connection with, or relating to, the Lease Agreement (collectively, the “ Security Assignment Documents ”) and (c) the rent payable under the Lease Agreement and, if any, all letters of credit, maintenance reserves, security deposits, other supporting obligations and arrangements, indemnity payments covering loss of or damage to the Aircraft, and insurance proceeds, and all proceeds of any of the foregoing (collectively, “ Security Amounts ”) relating to the Aircraft or the Security Assignment Documents. In connection with such assignment and grant, the Collateral Agent has agreed to execute and deliver to you a Confirmation of Quiet Enjoyment in the form attached hereto as Annex 2. The Lessee hereby consents, effective as of the date hereof, to such security assignment and grant in favor of the Collateral Agent.	
 
2.	From and after the date of this Notice, Avolon Aerospace Leasing Limited (“ Avolon ”), in its capacity as servicer for the Lessor, will act as the Lessor’s attorney-in-fact, servicer and agent for all matters related to the Aircraft, the Security Assignment Documents and the Security Amounts (in such capacity, the “ Servicer ”). We hereby authorize and direct you, and you agree, to rely upon (and to comply with, where the context calls for such compliance) communications you receive from Avolon (or any successor Servicer whose appointment you receive written notice from the Collateral Agent) in connection with the Security Assignment Documents and the Security Amounts as if received from the Lessor, subject in all cases to the	
 
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 	rights of the Collateral Agent as provided in this Notice. In the event of any conflict between the communications received by the Lessee from the Servicer and the Lessor, the Lessee is entitled to rely upon the communications received from the Servicer.	
 
3.	From and after the date of this Notice, you agree to provide a copy of all notices you send to the Lessor under the Lease Agreement to Avolon at the address set forth below (and to any such successor Servicer at the address set forth in such notice of appointment):	
with a copy to:
Avolon Aerospace Leasing Limited
Block 3, The Oval
Shelbourne Road
Ballsbridge
Dublin 4
Ireland

Attention:	 	Chief Operating Office	
		
Telefax:	 	+353 1 485 3242	
 
4.	From and after the date of this Notice, unless and until the Collateral Agent otherwise directs in writing:	
 
 	(a)	all monies (other than Maintenance Payments and the Security Deposit) that are payable by you under the Lease Agreement or any other Security Assignment Document to which the Lessee is a party shall be paid to:	
The Bank of New York Mellon
ABA No.             021000018
Account No.       GLA/111-565
Account Name:  Corporate Trust Agency
For further credit to:
Account No.       237123
Account Name:  Avolon Collection Account
Ref: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.; MSN 4741
 
 	(b)	all monies in respect of Maintenance Payments that are payable by you under the Lease Agreement or any other Security Assignment Document to which the Lessee is a party shall be paid to:	
The Bank of New York Mellon
ABA No.             021000018
Account No.       GLA/111-565
Account Name:  Corporate Trust Agency
For further credit to:
Account No.       237125
Account Name:  Avolon Maintenance Reserve Account
Ref: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.; MSN 4741
 
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 	(c)	all monies in respect of the Security Deposit that are payable by you under the Lease Agreement or any other Security Assignment Document to which the Lessee is a party shall be paid to:	
The Bank of New York Mellon
ABA No.             021000018
Account No.       GLA/111-565
Account Name:  Corporate Trust Agency
For further credit to:
Account No.       237126
Account Name:  Avolon Security Deposit Account
Ref:     Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.; MSN 4741.
 
5.	From and after the date of this Notice, if the Collateral Agent delivers to you a written notice that it has exercised its rights under the Security Trust Agreement or the Mortgage or the Local Law Mortgage (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Agreement and the other Security Assignment Documents to which you are a party for the benefit of the Collateral Agent as if the Collateral Agent were named in place of the Lessor in such Security Assignment Documents. After the Collateral Agent delivers any Relevant Notice, you shall not recognize the exercise by the Lessor (or Avolon or any successor Servicer) of any of its rights and powers under the Security Assignment Documents unless and until requested to do so by the Collateral Agent in writing. After issuance of a Relevant Notice, if the Collateral Agent so requests, you agree, at no cost and expense to yourselves, to enter into a replacement lease with the Collateral Agent or its nominee, on the same terms ( mutatis mutandis ) as the Lease Agreement, provided that :	
 
 	(a)	no such replacement lease shall have the effect of releasing the Lessor from any of its obligations to you under the Lease Agreement; and	
 
 	(b)	you shall not be responsible for any additional costs, liability, obligations, expenses or charges, including, without limitation, any increased withholding tax liability which result from entering into such replacement lease.	
 
6.	You agree to cause the hull and liability insurance (including war-risk insurance) required to be maintained under the Lease Agreement to be endorsed as specified in the attached Annex C and to obtain from your insurance/reinsurance brokers revised certificates of insurance and broker’s letter of undertaking to evidence such endorsements.	
 
7.	You agree that the Lease Agreement is hereby, effective as of the date hereof, amended to include the parties listed in Annex C as Indemnitees and additional insured without increasing the scope of such indemnities. The Lessor agrees for the benefit of the Collateral Agent that the Lessor will not rescind this notification or give any conflicting notice to the Lessee without the consent of the Collateral Agent, until such time as the parties named as “Financing Parties” in Annex C attached hereto no longer have any interest in, to or under the Lease Agreement.	
 
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8.	Collateral Agent hereby acknowledges that it has received a copy of the Lease Agreement. Until such time as the Collateral Agent has notified you in writing that the Collateral Agent no longer has any interest in, or under the Lease Agreement, you will not amend or modify, or consent to the amendment or modification of, the Lease Agreement, or deregister, or consent to the deregistration of, the Aircraft, in each case without the prior written consent of the Collateral Agent, such consent not to be unreasonably withheld or delayed.	
 
9.	If the Lessor is in breach of any of its obligations, express or implied, under the Lease Agreement, or if any event occurs which would permit you to terminate, cancel or surrender the Lease Agreement, you will, without waiving any such breach or right after the 14-day period referred to below if such breach has not been performed or a replacement lease has not been entered into:	
 
 	(a)	promptly upon becoming aware of it, give the Collateral Agent notice of such breach or event;	
 
 	(b)	accept as adequate remedy for any such breach performance by the Collateral Agent of such obligations within 14 days of your written notice to the Collateral Agent; and/or	
 
 	(c)	if the Collateral Agent so requests, enter into a replacement lease in accordance with paragraph 5 above.	
 
10.	Any consent or waiver required to be obtained from the Lessor by you under Clause 9 ( Control of the Aircraft ) of the Lease Agreement shall at all times require the consent or waiver of the Lessor and the Collateral Agent (which consent shall be given in accordance with the terms and conditions applicable to the Lessor thereunder); provided that , after the Collateral Agent has sent you a Relevant Notice and until the Collateral Agent sends you and the Lessor a notice withdrawing the Relevant Notice, any such consent or waiver shall require the consent or waiver of the Collateral Agent, which consent shall be given in accordance with the terms and conditions applicable to the Lessor thereunder.	
 
11.	You represent and warrant to each Indemnitee as follows:	
 
 	(a)	this Notice and the Security Assignment Documents to which the Lessee is a party have each been duly authorized, executed and delivered by, and constitute a legal, valid and binding agreement of, the Lessee, enforceable (except as enforceability may be limited by (i) applicable bankruptcy, insolvency, concurso mercantil , examination, reorganization or other similar law, and (ii) general principles of equity) against the Lessee in accordance with their respective terms;	
 
 	(b)	no “Total Loss” or similar event as defined in the Lease Agreement has occurred as to the Aircraft or the related engines, and the Certificate of Airworthiness for the Aircraft remains in full force and effect;	
 
- 158 -

 	(c)	on the date of this Notice, no “Event of Default” as defined in the Lease Agreement has occurred and is continuing;	
 
 	(d)	the Lessee is not entitled to any offset against any amounts payable under the Security Assignment Documents and to the Lessee’s knowledge after reasonable inquiry (without prejudice to any rights of the Lessee against the Lessor in respect of claims of which the Lessee does not have such knowledge) the Lessee has no present claim against the Lessor with respect to the Aircraft, the Security Assignment Documents or the Security Amounts;	
 
 	(e)	the representations and warranties of the Lessee contained in Clause 3 ( Representations and warranties ) and Clause 3.2 ( Lessee’s representations and warranties ) of the Lease Agreement are true and correct as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct on and as of such earlier date;	
 
 	(f)	other than this Notice, you have not received a notice of assignment in respect of the Lease Agreement or, if you have received any notice of assignment, you have subsequently been notified of the termination of such notice.	
 
12.	At no cost to you, you will install identification plates on the Aircraft (airframe and each engine) in accordance with Clause 12 ( Title Protection ) of the Lease Agreement to note that the Lessor is the owner of the Aircraft and the Collateral Agent is the mortgagee of the Aircraft. You will do so as promptly as practicable but in any event not later than the earlier of (a) the date that is sixty (60) days following the date hereof and (b) the date required for the installation of such plates under the terms of such section. You will as promptly as practicable take any action reasonably requested by the Lessor, that may be taken only by you as operator of the Aircraft to cause the interest of the Lessor and Collateral Agent in the Aircraft and Lease Agreement to be appropriately noted in the aircraft registry of the country in which the Aircraft is registered. You will also take any action reasonably requested by the Lessor that may be taken only by you as operator of the Aircraft to record the Mortgage and the Local Law Mortgage on such aircraft registry. You will cause such notation and registration to be appropriately maintained under applicable law during the term of the Lease.	
 
13.	This Notice and the authorizations and instructions contained in this Notice are irrevocable unless and until you receive written notice to the contrary from the Collateral Agent. Except as expressly provided for in this Notice, the Collateral Agent shall not have any liability for the performance of, any of the Lessor’s obligations under the Security Assignment Documents (whether undertaken by the Lessor, Avolon or any successor attorney-in-fact and manager) unless expressly agreed to in writing by the Collateral Agent following the exercise by the Collateral Agent of remedies under the Security Assignment or Mortgage or the Local Law Mortgage.	
Yours faithfully
 
- 159 -

			
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,	
not in its individual capacity but solely as owner trustee
 	
By:	 	 	
			
Name:	 		
Title:	 		
 
- 160 -

Acknowledged and agreed
this             day of             , 20
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name:	 	 	
Title:	 	 	
THE BANK OF NEW YORK MELLON (as “Collateral Agent”)

By:	 	 	
Name:	 	 	
Title:	 	 	
 
- 161 -

ANNEX 1
LEASE AGREEMENT
Aircraft Operating Lease Agreement (MSN 4741) dated             2011, between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee as lessor and the Lessee as lessee in respect of the Aircraft.
 
- 162-

ANNEX 2
CONFIRMATION OF QUIET ENJOYMENT
 
To:	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (the “ Lessee ”)	
    	Prolongación Paseo de la Reforma No. 490	
    	Piso 1 (Edificio GE)	
    	Colonia Santa Fé Peña Blanca	
    	Del. Alvaro Obregón	
    	México D.F. 01012	
    	México	
Attention: General Counsel
                                                     , 2011
Ladies and Gentlemen:
We refer to the Aircraft Operating Lease Agreement (MSN 4741), dated as of [            ] between Wells Fargo Bank Northwest National Association, not in its individual capacity but solely as owner trustee and the Lessee (as assigned, supplemented and amended from time to time, the “ Lease Agreement ”), relating to one Airbus A320-233 aircraft bearing manufacturer’s serial number 4741 and [            ] registration mark (the “ Aircraft ”). Words and expressions defined in Lease Agreement shall have the same respective meaning when used herein.
In consideration of your consent, acknowledgment and agreements to the Notice and Acknowledgment of Assignment, dated this date, from the Lessor to you (the “ Notice ”), we hereby agree that so long as no Event of Default shall have occurred and be continuing, we will not, take any action that would interfere, or permit any person lawfully claiming by or through us to interfere, with your rights, as the Lessee under the Lease Agreement, to quiet and peaceful use, enjoyment and possession of the Aircraft during the Lease Period under and in accordance with the terms of the Lease Agreement.
Yours faithfully,
for and on behalf of
THE BANK OF NEW YORK MELLON,
as Collateral Agent
 
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ANNEX C
INSURANCE
1. Without limiting the requirements of the Lease Agreement, all required hull, spares and hull war risk insurance shall (i) name each “Indemnitee” referred to in paragraph 8 of the Notice and Acknowledgement to which this Annex is attached as additional insureds and (ii) designate the Collateral Agent as the sole loss payee in relation to any total loss.
All required liability (including war risk liability) insurance shall include (i) the Lessor, (ii) the Owner Trustee, (iii) Wells Fargo Bank Northwest, National Association, (iv) Avolon Aerospace (Warehouse 1) Limited, (v) Avolon Aerospace Leasing Limited, (vi) the Collateral Agent, (vii) UBS Real Estate Securities Inc.; Credit Agricole Corporate and Investment Bank; Deutsche Bank AG, London Branch; KfW IPEX-Bank GmbH; BNP Paribas SA; (viii) UBS AG, Stamford Branch, as Administrative Agent, on behalf of the Class A Lenders and the Class B Lenders (together with the parties listed in sub-clause (vi) and (vii) the “ Financing Parties ”), (ix) the Trust Estate, (x) the Owner Participant (xi) the Technical Servicer, the Manufacturer, the Seller and (xii) the respective successors and assigns of such parties, and (xiii) the respective shareholders, subsidiaries, directors, members, officers, agents, employees and indemnitees of such parties as additional insureds.
For insurance coverage that includes AVN67B (or the substantive equivalent) the following should be identified in the insurance/reinsurance certificates.
Contract Parties :
Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee
Avolon Aerospace (Warehouse 1) Limited
Avolon Aerospace Leasing Limited
UBS Real Estate Securities Inc.
Credit Agricole Corporate and Investment Bank
Deutsche Bank AG, London Branch
KfW IPEX-Bank GmbH
BNP Paribas SA
UBS AG, Stamford Branch
The Bank of New York Mellon
the Owner Trustee, Wells Fargo Bank Northwest, National Association, the Trust Estate, the Owner Participant, the Technical Servicer, the Manufacturer, the Seller
in each case, with its successor and assigns
 
- 164 -

Contracts :
1. Credit Agreement dated May 19, 2010, as amended and restated May 27, 2010, among Avolon Aerospace (Warehouse 1) Limited, as borrower, Avolon Aerospace Leasing Limited, UBS AG, Stamford Branch, as Administrative Agent and a Funding Agent; the other Funding Agents from time to time party thereto; UBS Real Estate Securities Inc; Credit Agricole Corporate and Investment Bank; Deutsche Bank AG, London Branch; KfW IPEX-Bank GmbH; other persons from time to time party thereto as Class A Lenders and Class B Lenders; and The Bank of New York Mellon, as Collateral Agent and Account Bank.
2. Security Trust and Guarantee Agreement dated May 27, 2010 among Avolon Aerospace (Warehouse 1) Limited, certain additional grantors identified therein, UBS AG, Stamford Branch, as Administrative Agent, and The Bank of New York Mellon, as Collateral Agent and Account Bank.
3. Servicing Agreement dated May 27, 2010 among Avolon Aerospace (Warehouse Limited, Avolon Aerospace Leasing Limited, as Servicer, the aircraft owning entities and applicable intermediaries identified therein, and UBS AG, Stamford Branch, as Administrative Agent.
4, [Aircraft Mortgage and Security Agreement dated [•], 2011 between [Lessor] and The Bank of New York Mellon, as Collateral Agent].
5. [Local law Aircraft Mortgage dated [•], 2011 between [Lessor] and The Bank of New York Mellon, as Collateral Agent].
6. Aircraft Operating Lease Agreement (MSN 4741) dated as of April 13, 2011, between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee as lessor and the Lessee as lessee in respect of the Aircraft.
 
- 165 -

SCHEDULE 11
SUBLEASING REQUIREMENTS
 
1.	Subleasing	
 
1.1	The Lessee shall provide to the Lessor, the Owner Participant and any Security Trustee (in case of sub-clause (d) below to the Security Trustee):	
 
 	(a)	no later than ten (10) Business Days prior to the proposed date of execution of the proposed sublease, a copy of the form of the proposed sublease which is to be executed;	
 
 	(b)	no later than fifteen (15) Business Days prior to the proposed date of commencement of the leasing under such sublease, a true and correct copy of such sublease together with:	
 
 	(i)	a duly executed copy of an acknowledgment from the Permitted Sublessee that the rights under the sublease are subject and subordinate to this Agreement and the rights of the Lessor, the Owner Participant and any Security Trustee, under the Transaction Documents, provided that such acknowledgment may be contained within the text of the sublease:	
 
 	(ii)	if so requested by the Lessor, the Owner Participant or any Security Trustee, a security assignment (in form and substance satisfactory to the Lessor, the Owner Participant or any Security Trustee), assigning all of the Lessee’s rights, title and interest to, in and under such sublease to the Lessor or any Security Trustee, as applicable;	
 
 	(c)	no later than five (5) Business Days prior to the proposed sublease taking effect, a certificate of the Lessee, confirming that the proposed sublease complies with the provisions of this Schedule; and	
 
 	(d)	on or prior to the date of execution of the proposed sublease, the tangible chattel paper original of the sublease (insofar as such sublease would constitute tangible chattel paper (as such term is defined in the UCC)).	
 
1.2	The sublease shall:	
 
 	(a)	be consistent with this Agreement and shall not permit the Permitted Sublessee to take any action not permitted under this Agreement;	
 
 	(b)	not permit the Aircraft to be operated to or from an Excluded Country;	
 
 	(c)	not permit further subleasing; and	
 
 	(d)	expressly acknowledge:	
 
 	(i)	the ownership interests of the Lessor in the Aircraft;	
 
 	(ii)	any interests of the Security Trustee under any mortgage granted to the Security Trustee; and	
 
- 166 -

 	(iii)	the interests of the Lessor under this Agreement;	
 
1.3	The term of the sublease shall not extend beyond the date falling six (6) months before the Expiry Date;	
 
1.4	The rights of the Permitted Sublessee under the sublease shall be expressly stated in the sublease to be subject and subordinate to this Agreement and to the rights and interests of the Lessor, the Owner Participant and any Security Trustee;	
 
1.5	If the term of the sublease is greater than one year, the Lessee shall immediately upon the sublease being executed:	
 
 	(a)	grant to the Lessor a perfected first priority security assignment of the sublease in form and substance satisfactory to the Lessor, the Owner Participant and any Security Trustee and deliver such assignment duly executed and perfected; and	
 
 	(b)	provide to the Lessor, the Owner Participant and any Security Trustee a notice and acknowledgement duly executed by the sublessee in the form set out in Schedule 10 ( Form of notice and acknowledgement ), but with the following amendments: (i) references to the “Lessee” amended to references to the Permitted Sublessee; (ii) references to “Lease” amended to refer to the sublease and (iii) references to sublease assignment to be inserted, or such other form as may be reasonably required by the Lessor;	
 
1.6	If the new State of Registration or the jurisdiction of incorporation of the Permitted Sublessee is a Contracting State for the purposes of the Cape Town Convention or the Permitted Sublessee is situated in a Contracting State for the purposes of Article 4 of the Cape Town Convention, the Lessee shall provide to the Lessor, the Owner Participant and any Security Trustee, a satisfactory confirmation of the registration at the International Registry of the prospective international interest to be vested in the Lessee under the sublease, without a limit on the duration of the registration;	
 
1.7	If a new State of Registration is proposed:	
 
 	(a)	the Lessor, the Owner Participant and any Security Trustee shall be satisfied that, as compared to the State of Registration as at the date of this Agreement, such proposed State of Registration provides substantially equivalent or better protection for the rights of lessors, owners, lenders and mortgagees and imposes no less stringent aircraft maintenance standards taken as a whole; and	
 
 	(b)	the Lessee shall provide to the Lessor, the Owner and any Security Trustee, a Deregistration Power of Attorney from the proposed Permitted Sublessee and, if the new State of Registration or the jurisdiction of incorporation of the Permitted Sublessee is a Contracting State for the purposes of the Cape Town Convention or the Permitted Sublessee is situated in a Contracting State of the purposes of Article 4 of the Cape Town Convention, an IDERA;	
 
- 167 -

1.8	The Lessee shall provide to the Lessor, the Owner and any Security Trustee, evidence satisfactory to the Lessor, the Owner and any Security Trustee that:	
 
 	(a)	the Lessee will remain in compliance with Clause 17 ( Insurance ) and Clause 8 ( Information ) during the term of the sublease; or	
 
 	(b)	if the proposed sublessee is to maintain insurance coverage during the term of the sublease, the proposed insurance coverage is on terms equivalent to the Insurances and is in all respects satisfactory to the Lessor, the Owner and any Security Trustee;	
 
1.9	The Lessee shall demonstrate, by way of a legal opinion from independent counsel reasonably acceptable to the Lessor, the Owner Participant and any Security Trustee, to the satisfaction of the Lessor, the Owner Participant and any Security Trustee:	
 
 	(a)	that the rights and interests of the Lessor, the Owner Participant and any Security Trustee in respect of the Aircraft or any Transaction Document (including any security interest) and the right to repossess the Aircraft in the case of an Event of Default will not be adversely affected by the subleasing;	
 
 	(b)	the perfection of the interests of the Lessor, the Owner Participant and any Security Trustee in respect of the Aircraft and under the Transaction Documents (including the enforceability of any mortgage granted by the Lessor to the Security Trustee as a first priority perfected Security Interest over the Aircraft), including in the International Registry if applicable;	
 
 	(c)	the due execution by the proposed Permitted Sublessee of the proposed sublease and any other document required to be delivered by the proposed Permitted Sublessee pursuant to the Agreement or this Schedule and the validity and enforceability against the proposed Permitted Sublessee of such documents;	
 
 	(d)	that such sublease is subject and subordinate on the terms as set out in this Agreement; and	
 
 	(e)	if a new State of Registration is proposed;	
 
 	(i)	that the terms of the Lease are legal, valid, binding and enforceable in such country;	
 
 	(ii)	that it is not necessary for the Lessor or the Security Trustee to register or qualify to do business in such country;	
 
 	(iii)	that there is no tort liability of the owner of an Aircraft not in possession thereof under the laws of such country;	
 
 	(iv)	that the laws of such country require fair compensation for requisition of title or use of the Aircraft by the government of registration;	
 
- 168 -

 	(v)	as to:	
 
 	(aa)	the due registration of the Aircraft in the name of the Permitted Sublessee or the Lessor (as applicable);	
 
 	(bb)	the absence of any other Security Interests other than Lessor Liens and Permitted Security Interests;	
 
 	(cc)	each Deregistration Power of Attorney or IDERA required to be delivered by the Lessee or the proposed Permitted Sublessee has been duly authorised, executed and delivered, and is suitable in form and substance for the purpose of permitting the Security Trustee to deregister and export the Aircraft upon presentation of the same at the applicable aircraft registry, without the need to obtain the consent of, or take any other action with respect to the Lessee, the proposed Permitted Sublessee or governmental authority other than such presentation; and	
 
 	(dd)	such other matters as the Security Trustee may reasonably request (which may include, without limitation, advice to any Financiers as to creditors’ rights, including rights of recovery and repossession of the Aircraft);	
 
 	(vi)	if the new State of Registration or the jurisdiction of incorporation of the proposed Permitted Sublessee is a Contracting State for the purposes of the Cape Town Convention or the Permitted Sublessee is situated in a Contracting State for the purposes of Article 4 of the Cape Town Convention, addressing the effectiveness of the filings made under paragraph 1.6 above, the perfection and the absence of Security Interests other than Lessor Liens and Permitted Security Interests recorded at the International Registry;	
 
 	(vii)	that such sublease will not result in the imposition of, or increase in the amount of, any Taxes, fees or expenses imposed on any Indemnitee for which the Lessee is not required to indemnify or is not then willing to enter into a binding agreement to indemnify each Indemnitee to their satisfaction against such imposed or increased Taxes, fees or expenses.	
 
1.10	The Lessee shall, upon first demand, reimburse to the Lessor and any Security Trustee all reasonable costs and expenses incurred by any of them in connection with the consideration and/or implementation of such sublease.	
 
2.	IDERA	
If any prospective international interest or international interest has been registered at the International Registry under paragraph 1 above the Lessee shall promptly procure the execution of an IDERA by the Permitted Sublessee and its recordation by the relevant Aviation Authority to the extent such recordation is permissible by the relevant Aviation Authority, irrevocably appoint the Lessor or its certified designee under the IDERA. Following recordation or the execution of the IDERA as the case may be, the Lessee shall deliver the IDERA to the Lessor.
 
- 169 -

3.	Change of registration	
 
3.1	Where the Aircraft is subleased pursuant to Clause 9.4 of the Lease ( Permitted subleasing ) the Aircraft may be re-registered with the Aviation Authority of the country in which the Permitted Sublessee is organised, subject to satisfaction of the relevant conditions of Clause 9.4 ( Permitted subleasing ) and this Schedule.	
 
3.2	Upon the termination of any such sublease, the Lessee shall:	
 
 	(a)	in the event the registration of the Aircraft was changed pursuant to such sublease and except as otherwise permitted under this Agreement, procure that the Aircraft is reregistered in the State of Registration as of the date immediately preceding the effectiveness of the sublease and provide a. legal opinion from counsel approved by the Lessor and the Security Trustee, such approval not to be unreasonably withheld (to be in form and substance reasonably satisfactory to the Lessor and the Security Trustee) addressed to the Owner Participant, the Lessor and the Security Trustee as to their rights and interests (and the perfection of such interests) in respect of the Aircraft or any Transaction Document and the right to repossess the Aircraft in such State of Registration; and	
 
 	(b)	pay all reasonable costs and expenses (if any) of the Owner Participant, the Lessor and the Security Trustee incurred or payable in connection with the change in registry.	
 
- 170 -

SCHEDULE 12
LIST OF AGREED MODIFICATION FOR FAA REGISTRATION
 
 	•	 	CN47.11.100.01: System provision for Fuel Tank Inerting System (FTIS)	
 
 	•	 	CN47.11.101.01: Installation of Fuel Tank Inerting System (FTIS)	
 
 	•	 	Dedicated 15” wheelchair stowage	
 
 	•	 	Reduction in passenger seats to maximum 179	
 
 	•	 	if applicable, such other Post Delivery Modifications as shall be listed in an annex to the Acceptance Certificate at the time of the Delivery.	
 
- 171 -

IN WITNESS WHEREOF the Lessor and the Lessee have executed this Agreement, both as of the date shown at the beginning of this Agreement.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., as the Lessee

By:	 	/s/ Mario E. Geyne Pliego	
			
Name: Mario E. Geyne Pliego	
Title: Financial and Fleet Planning Director	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION , not in its individual capacity but solely as owner trustee, as the Lessor

By:	 	/s/ Scott Rosevear	
			
Name: Scott Rosevear	
Title: Vice President	
 
- 172 -

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.32
EXECUTION VERSION
Date      April 2013
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
- and -
AMENTUM AIRCRAFT LEASING NO. THREE LIMITED
as Lessor

AIRCRAFT LEASE AGREEMENT

in respect of one (1) Airbus A320-200 aircraft
bearing MSN 3524

INDEX

Clause	  	Page	 	
			
1	  	INTERPRETATION	  	 	1	  	
			
2	  	REPRESENTATIONS AND WARRANTIES	  	 	1	  	
			
3	  	CONDITIONS PRECEDENT	  	 	1	  	
			
4	  	DELIVERY AND ACCEPTANCE	  	 	1	  	
			
5	  	PAYMENTS	  	 	3	  	
			
6	  	TAXATION	  	 	5	  	
			
7	  	QUIET ENJOYMENT	  	 	8	  	
			
8	  	LESSEE’S COVENANTS	  	 	8	  	
			
9	  	INSURANCE AND TOTAL LOSS	  	 	8	  	
			
10	  	MANUFACTURER’S WARRANTIES	  	 	9	  	
			
11	  	INDEMNITY	  	 	9	  	
			
12	  	RETURN OF AIRCRAFT	  	 	10	  	
			
13	  	DEFAULT	  	 	10	  	
			
14	  	ASSIGNMENT	  	 	11	  	
			
15	  	ILLEGALITY	  	 	11	  	
			
16	  	NOTICES	  	 	11	  	
			
17	  	DISCLAIMERS AND WAIVERS	  	 	12	  	
			
18	  	CONFIDENTIALITY	  	 	13	  	
			
19	  	LAW AND JURISDICTION	  	 	13	  	

APPENDIX 1 PART 1 DEFINITIONS	  	 	16	  	
		
APPENDIX 1 PART 2 CONSTRUCTION	  	 	29	  	
		
APPENDIX 2 DESCRIPTION OF AIRCRAFT	  	 	31	  	
		
APPENDIX 3 PART 1 LESSEE’S REPRESENTATIONS AND WARRANTIES	  	 	32	  	
		
APPENDIX 3 PART 2 LESSOR’S REPRESENTATIONS AND WARRANTIES	  	 	34	  	
		
APPENDIX 4 PART 1 LESSOR CONDITIONS PRECEDENT	  	 	36	  	
		
APPENDIX 4 PART 2 LESSEE CONDITIONS PRECEDENT	  	 	40	  	
		
APPENDIX 5 PART 1 ADDITIONAL PAYMENT PROVISIONS	  	 	41	  	
		
APPENDIX 5 PART 2 PAYMENT OF MAINTENANCE RESERVES	  	 	43	  	
		
APPENDIX 5 PART 3 REFUND OF MAINTENANCE RESERVES	  	 	47	  	
		
APPENDIX 6 LESSEE’S COVENANTS	  	 	51	  	
		
APPENDIX 7 PART 1 INSURANCE COVENANTS	  	 	67	  	
		
APPENDIX 7 PART 2 INSURANCE REQUIREMENTS	  	 	71	  	
		
APPENDIX 7 PART 3 TOTAL LOSS	  	 	74	  	
		
APPENDIX 7A PART 1 PRE-DELIVERY PROCEDURE	  	 	76	  	

					
APPENDIX 7A PART 2 DELIVERY CONDITION	  	 	77	  	
		
APPENDIX 7A PART 3 AIRCRAFT DOCUMENTS AT DELIVERY	  	 	82	  	
		
APPENDIX 8 PART 1 RETURN OF THE AIRCRAFT	  	 	91	  	
		
APPENDIX 8 PART 2 OPERATING CONDITION AT REDELIVERY	  	 	95	  	
		
APPENDIX 8 PART 3 AIRCRAFT DOCUMENTS AT REDELIVERY	  	 	101	  	
		
APPENDIX 9 PART 1 EVENTS OF DEFAULT	  	 	111	  	
		
APPENDIX 9 PART 2	  	 	114	  	
		
APPENDIX 10 ASSIGNMENT	  	 	116	  	
		
EXHIBIT A PART 1 ACKNOWLEDGEMENT OF ASSIGNMENT OF GUARANTEE	  	 	119	  	
		
EXHIBIT A PART 2 ACKNOWLEDGEMENT OF ASSIGNMENT OF LEASE	  	 	121	  	
		
EXHIBIT B FORM OF CERTIFICATE OF ACCEPTANCE	  	 	123	  	
		
EXHIBIT C PART 1 AIR TRAFFIC CONTROL LETTER	  	 	126	  	
		
EXHIBIT C PART 2 AIR TRAFFIC CONTROL LETTER	  	 	127	  	
		
EXHIBIT D DEREGISTRATION AND EXPORT POWER OF ATTORNEY	  	 	128	  	
		
EXHIBIT E QUIET ENJOYMENT LETTER	  	 	130	  	
		
EXHIBIT F FORM OF MONTHLY REPORT	  	 	132	  	
		
EXHIBIT G PROCESS AGENT POWER OF ATTORNEY (LESSEE)	  	 	135	  	
		
EXHIBIT H PROCESS AGENT POWER OF ATTORNEY (GUARANTOR)	  	 	136	  	

THIS AIRCRAFT LEASE AGREEMENT is made on    April 2013
BETWEEN:
 
(1)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I.DE C.V. a company duly organised and validly existing under the laws of Mexico and having its address at Av. Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Pena Blanca, 01210 Mexico (“ Lessee ”) and	
 
(2)	AMENTUM AIRCRAFT LEASING NO . THREE LIMITED, a company duly incorporated and validly existing under the laws of the Ireland and having its registered office at 28 Upper Mount Street, Dublin 2, Ireland (“ Lessor ”)	
RECITALS:
Lessor has agreed to lease and Lessee has agreed to take on lease the Aircraft upon the terms and subject to the conditions set out in this Agreement.
NOW IT IS AGREED as follows:
 
1	INTERPRETATION	
 
1.1	In this Agreement, unless the context otherwise provides, capitalised terms and expressions have the meanings given to them in Part 1 of Appendix 1 and the conventions of construction and usage set out in Part 2 of Appendix 1 shall apply to this Agreement.	
 
1.2	References to “ this Agreement ” include the Appendices and the Exhibits and accordingly Lessee and Lessor hereby agree to comply with the terms of each such Appendix and Exhibit as if set out in this Agreement in full.	
 
2	REPRESENTATIONS AND WARRANTIES	
 
2.1	Lessee represents and warrants to Lessor in the terms set out in Part 1 of Appendix 3.	
 
2.2	Lessor represents and warrants to Lessee in the terms set out in Part 2 of Appendix 3 on execution of this Agreement.	
 
2.3	Lessor represents and warrants to Lessee in the terms set out in Part 3 of Appendix 3 on the Delivery Date and each Rent Date (save as set out therein).	
 
3	CONDITIONS PRECEDENT	
 
3.1	Lessor’s obligation to deliver and lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 1 of Appendix 4.	
 
3.2	Lessee’s obligation to accept delivery of the Aircraft and to lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 2 of Appendix 4.	
 
4	DELIVERY AND ACCEPTANCE	
 
4.1	The Parties shall follow the Pre-Delivery Procedure.	
 
4.2	The Aircraft is scheduled to be delivered during the Scheduled Delivery Month. Lessor shall notify Lessee of the scheduled delivery date (the “ Scheduled Delivery Date ”) no later than ten (10) Business Days prior to such date.	

(a)	On the Scheduled Delivery Date, subject to the terms and conditions of this Agreement and satisfaction or, as the case may be, waiver, of the conditions precedent set forth in Appendix 4, Lessor will tender the Aircraft for Delivery at the Delivery Location and Lessee will thereupon accept the Aircraft.	
 
(b)	Immediately upon Delivery, the Aircraft shall be deemed to have been delivered to and accepted by Lessee in an “as is, where is” condition and shall become subject to and governed by this Agreement and the Term shall commence and Lessee shall thereupon sign and deliver to Lessor the Certificate of Acceptance. For the avoidance of doubt, the execution and delivery of the Certificate of Acceptance by Lessee shall without further act constitute absolute, unconditional and irrevocable acceptance by Lessee of the Aircraft under this Agreement.	
 
4.3	Lessee will not be obliged to accept delivery of the Aircraft if it does not meet the Delivery Condition. If the Aircraft is not accepted by Lessee because the Aircraft does not meet the Delivery Condition, Lessor shall have the option to remedy any discrepancies by reference to the Delivery Condition and, prior to the Final Delivery Date, offer the Aircraft for Delivery and (if the Aircraft then meets the Delivery Condition) the Lessee will thereupon accept the delivery of the Aircraft at the Delivery Location in an “as is, where is” condition and the provisions of Clause 4.2(b) shall apply.	
 
4.4	If the Aircraft is tendered for Delivery and meets the Delivery Condition on or before the Final Delivery Date, Lessee shall not be entitled for any reason whatsoever to refuse to accept the Aircraft for all purposes of this Agreement (including, without limitation, refuse to execute and deliver to Lessor, the Certificate of Acceptance).	
 
4.5	Lessor shall not be responsible for any Loss (including any loss of profit), arising from any delay in the delivery of, or failure to deliver, the Aircraft to Lessee under this Agreement unless such delay or failure arises as a direct consequence of the wilful default, wilful misconduct or Gross Negligence of Lessor.	
4.6
 
(a)	If the Aircraft has been tendered for delivery and meets the Delivery Condition on or before the Final Delivery Date, but notwithstanding its obligation under Clause 4.4 (and without prejudice to Lessor’s remedies in respect of such non-compliance), Lessee has not accepted delivery of the Aircraft on or prior to the Final Delivery Date, then Lessor may cancel the obligation contained in this Agreement to lease the Aircraft to Lessee by giving notice in writing to Lessee to that effect and Lessee shall reimburse to Lessor forthwith on demand all amounts which the Lessor shall have expended since 17 February 2011 in order to be able to deliver the Aircraft to the Lessee (including, without limitation, all documented costs and expenses related to putting the Aircraft in the Delivery Condition and reasonable costs and expenses related to preparation of this Agreement and other Transaction Documents), together with interest on each amount so demanded at the rate specified in Clause 5.5 from the date of demand until the date of payment (both before and after any relevant judgment).	
 
(b)	If Delivery does not occur on or prior to the Final Delivery Date for any reason other than a default by the Lessee (including, without limitation, pursuant to Clause 4.4), then Lessee may cancel the obligation contained in this Agreement to take the Aircraft on lease from Lessor by giving notice to Lessor in writing to that effect.	
 
(c)	Upon the service of a notice of cancellation by Lessor or Lessee under this Clause 4.6, neither party shall have any obligations under this Agreement other than: (i) in relation to Lessee, as specified in paragraph (a) above and in paragraph 3 of Part 2 of Appendix 9; and (ii) in relation to Lessor, if paragraph (b) above is applicable, Lessor shall return to Lessee any payments previously made by Lessee to Lessor under this Agreement (without prejudice to Clause 5.7).	
 
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5	PAYMENTS	
 
5.1	Lessee shall pay to Lessor (or shall have paid to Lessor, as the case may be) the Deposit in cash (the “ Cash Deposit ”) in the following instalments:	
 
(a)	***** on 23 February 2011 (the receipt of which is hereby acknowledged); and	
 
(b)	*****, no later than ***** prior to the Delivery Date.	
5.2
 
(a)	The Cash Deposit shall be placed by Lessor in an interest bearing account with HSH Nordbank AG, or any other person who may be the Security Trustee from time to time and any interest earned on the Deposit (net of any Taxes) shall be added to and form part of the Deposit for all purposes of this Agreement (and shall be returned to Lessee upon return of the Deposit pursuant to and in accordance with the terms of this Agreement). Lessor agrees to use reasonable endeavours to obtain interest on the Cash Deposit at the rate from time to time quoted by HSH Nordbank AG, or the Security Trustee, as applicable, to customers generally for deposits in an amount equal to the Deposit and for a term equal to the Term. Lessee agrees that upon payment to Lessor, the Deposit shall irrevocably and unconditionally become the property of Lessor and Lessor shall be entitled to commingle the Deposit with Lessor’s and/or its Affiliates’ general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
(b)	At any time during the Term, and provided no Default has occurred which is continuing, Lessee shall have the option to substitute the Cash Deposit with a Letter of Credit in an amount equal to the Deposit (“ LC Amount ”). Upon receipt of a Letter of Credit, Lessor shall, promptly and in any event within seven (7) Business Days following receipt of such Letter of Credit (and provided no Default has occurred and is continuing at such time) refund to Lessee an amount equal to the remaining Cash Deposit which has not been applied by Lessor pursuant to Clause 5.5(a) or set off by Lessor pursuant to Clause 5.7 (without prejudice to Lessee’s obligations under Clause 5.5(b)).	
 
5.3	The Term shall be divided into successive periods (each, a “ Rental Period ”). The first Rental Period shall begin on the Delivery Date and each subsequent Rental Period shall begin on the next following Rent Date. Each Rental Period shall end on (but not include) the date numerically corresponding to the date at which it commences and which falls one (1) month after the commencement of that Rental Period, except that if there is no such numerically corresponding date in the relevant month, it will end on the last day of that month and provided that the last Rental Period shall end on the Expiry Date.	
 
5.4	The Rent payable by Lessee to Lessor for each Rental Period shall be *****. Lessee will pay the first instalment of Rent for the first Rental Period to the Lessor on the Delivery Date. Rent for each subsequent Rental Period shall be payable monthly in advance on each Rent Date.	
5.5
 
(a)	If Lessee or the Guarantor fails to comply with any provision of the Transaction Documents, any Event of Default (including, without limitation, under paragraph (q)(iv) of Part 1 of Appendix 9) shall have occurred and be continuing or any event of default (howsoever defined) shall have occurred and be continuing under any Other Agreement, in addition to all rights and remedies accorded to Lessor elsewhere under the Transaction Documents or under any applicable law, Lessor may immediately or at any time thereafter, without prior notice to Lessee (but Lessor shall, without prejudice to Lessor’s	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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rights or Lessee’s obligations under this Agreement, notify Lessee of any application by Lessor pursuant to this Clause 5.5, promptly after such application by Lessor), apply the Cash Deposit (or, if applicable, make a drawing under the Letter of Credit) and/or the Maintenance Reserves, in each case, in or towards the payment or discharge of any matured obligation (including, without limitation, under paragraph 2(b) of Part 1 of Appendix 5) owed by Lessee, the Guarantor or any Affiliate of Lessee under the Transaction Documents or any Other Agreement, in such order as Lessor sees fit and/or exercise any of the rights of set-off described in Clause 5.7, against all or part of the Deposit and/or Maintenance Reserves.
 
(b)	If Lessor exercises the rights described in Clause 5.5(a) above, Lessee shall, following a demand in writing from Lessor, within ten (10) Business Days restore the Cash Deposit, LC Amount (if applicable) and/or Maintenance Reserves to the level at which it stood immediately prior to such exercise.	
 
5.6	If Lessee fails to pay any amount payable under any Transaction Document on the due date, Lessee will pay on demand from time to time to Lessor interest (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor, at the rate calculated by Lessor to be LIBOR plus *****. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a *****.	
5.7
 
(a)	Lessor may set off any matured obligation owed under any Transaction Document or any Other Agreement against any obligation (whether or not matured) owed by Lessor to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or at its option New York for the purpose of the set-off. If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained or liquidated. Lessor will not be obliged to pay any amounts to Lessee under any Transaction Document so long as any sums which are then due from Lessee under the Transaction Documents or any Other Agreement remain unpaid and any such amounts which would otherwise be due from Lessor hereunder will fall due only if and when Lessee has paid all such sums except to the extent Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing.	
 
(b)	If any sum paid or recovered in respect of the liabilities of Lessee under any Transaction Document is less than the amount then due, Lessor may apply that sum to amounts due under the Transaction Documents in such proportions and order and generally in such manner as Lessor may determine.	
 
5.8	Except as otherwise provided in this Agreement, each party shall pay its own legal and professional costs in respect of the transactions contemplated by the Transaction Documents. Lessee shall pay all costs associated with registering the Aircraft, the Bill of Sale, this Agreement, any documents contemplated under the Transaction Documents and the interests of Lessor (but not the Security Trustee or any Lender) in the Aircraft in the State of Registration including, without limitation, the cost, if applicable, of notarising and apostilling this Agreement and the Bill of Sale.	
 
5.9	Lessee’s obligations under this Agreement are absolute and unconditional irrespective of any contingency whatsoever including (but not limited to):	
 
(a)	any right of set-off, counterclaim, recoupment, defence or other right which either party to this Agreement may have against the other;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(b)	any unavailability of the Aircraft for any reason (except as a result of a Total Loss, following receipt by Lessor or the Security Trustee of the Agreed Value and any other amounts due and owing as at the date of receipt by Lessor or Security Trustee of the Agreed Value pursuant to and in accordance with paragraph 2 of Part 3 of Appendix 7), including, but not limited to, a requisition of the Aircraft or any prohibition or interruption of or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft;	
 
(c)	any lack or invalidity of title or any other defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind or nature of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or in respect of or any damage to the Aircraft;	
 
(d)	any insolvency, bankruptcy, reorganisation, concurso mercantil, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor, Lessee or any other person;	
 
(e)	any invalidity or unenforceability or lack of due authorisation of, or other defect in, any Transaction Document; and	
 
(f)	any other cause which but for this provision would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under, and in accordance with the terms of, this Agreement.	
 
5.10	The time stipulated in the Transaction Documents for all payments payable by Lessee thereunder and for the performance of Lessee’s other obligations under the Transaction Documents will be of the essence.	
 
5.11	If any payment under any Transaction Document falls due on a day which is not a Business Day, that payment will be due on the immediately preceding Business Day.	
 
5.12	Lessee shall comply with the additional payment provisions set out in Part 1 of Appendix 5.	
 
5.13	Lessee shall pay Maintenance Reserves to Lessor upon the terms and subject to the conditions set out in Part 2 of Appendix 5. Lessee agrees that upon payment to Lessor, all Maintenance Reserves shall irrevocably and unconditionally become the property of Lessor and Lessor shall be entitled to commingle the Maintenance Reserves with Lessor’s and/or its Affiliates’ general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity (without prejudice to the provisions set out Part 2 and Part 3 of Appendix 5).	
 
5.14	Lessor will release funds to Lessee from the Maintenance Reserves upon the terms and subject to the conditions set out in Part 3 of Appendix 5.	
 
6	TAXATION	
 
6.1		
 
(a)	All payments by Lessee under or in connection with the Transaction Documents will be made without set-off or counterclaim, free and clear of and without deduction or withholding for or on account of any Taxes (other than Lessor Taxes) unless such deduction or withholding is required by law in which event (but subject always to Clause 6.1(b)) Lessee shall:	
 
 	(i)	deduct or withhold the amount legally required;	
 
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 	(ii)	pay to the relevant Government Entities within the period for payment permitted by applicable law the amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor or the relevant Indemnitee after each payment an official receipt of the relevant Government Entities involved (or other evidence reasonably acceptable to Lessor or such Indemnitee) for all amounts so deducted or withheld.	
 
(b)	If Lessee is compelled by law to make any payment under or in connection with the Transaction Documents subject to any Tax (other than a Lessor Tax) and Lessor does not actually receive for its own benefit on the due date a net amount equal to the full amount provided for under the Transaction Documents, Lessee will pay all necessary additional amounts to ensure receipt by Lessor of the full amount so provided for.	
 
6.2	Lessee will on demand pay and indemnify the Indemnitees against all Taxes (other than Lessor Taxes) levied or imposed against or upon Lessor or Lessee or any other Indemnitee and relating to or attributable to Lessee, the Transaction Documents, including the payments due under the Transaction Documents, or the Aircraft directly or indirectly in connection with the importation, exportation, registration, ownership, leasing, sub-leasing, wet-leasing, purchase, delivery, possession, use, operation, repair, maintenance, overhaul, transportation, landing, storage, presence or redelivery of the Aircraft or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom.	
 
6.3		
 
(a)	If and to the extent that any sums payable to an Indemnitee by Lessee under any Transaction Document by way of indemnity or under this Clause 6 are insufficient, by reason of any Taxes (other than Lessor Taxes) payable in respect of those sums, for the Indemnitee to discharge the corresponding liability to the relevant third party (including any Taxation authority), or to reimburse the Indemnitee for the cost incurred by it to a third party (including any Taxation authority) Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied leave the Indemnitee with the same amount as it would have been entitled to receive in the absence of that Tax liability together with interest on the amount of the deficit at the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any person other than an Indemnitee are treated as taxable in the hands of an Indemnitee, Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied indemnify that Indemnitee to the same extent as it would have been indemnified in the absence of such Tax liability together with interest on the amount payable by Lessee under this Clause 6.3(b) at the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
6.4	Lessee will promptly pay:	
 
(a)	all licence and registration fees, Taxes (other than Lessor Taxes) and other amounts of any nature imposed by any Government Entity upon or with respect to the Aircraft including without limitation the importation, leasing, possession, use, operation or return of the Aircraft;	
 
(b)	all rent, fees, charges, Taxes (other than Lessor Taxes) and other amounts in respect of any premises where the Aircraft or any Part thereof is located from time to time; and	
 
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(c)	any and all charges incurred during the Term in connection with (i) the furnishing, issue or provision of information, directions and other facilities in connection with the navigation or movement of aircraft (including the control or movement of vehicles in any part of an airport used for the movement of aircraft) and (ii) the landing, parking or taking off of aircraft at airports or for the use of, or services provided at, airports (including, without limitation, all charges due to SENEAM),	
except to the extent such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and the non-payment of which does not give rise to any risk of the Aircraft or any interest therein being sold, forfeited, arrested, detained or otherwise lost or of civil or criminal liability on the part of any Indemnitee.
 
6.5	Lessee shall promptly pay any stamp or other documentary duties and Taxes (other than Lessor Taxes), and any notarial, translation or similar fees, to which this Agreement or any other Transaction Document (other than any Mortgage) may be subject, or which is necessary for purposes of registration of this Agreement and the Bill of Sale with the Air Authority and Lessee shall pay to Lessor on demand the amount of Losses which Lessor may incur as a result of any delay by Lessee in paying the same or any omission by the Lessee to pay the same.	
 
6.6	If Lessee is liable to gross-up or indemnify under Clause 6.1 or Clause 6.2, then, without in any way limiting, reducing or otherwise qualifying any rights of any Indemnitee or any obligations of Lessee under this Clause 6, Lessor shall:	
 
(a)	promptly upon becoming aware of the liability arising notify Lessee thereof; and	
 
(b)	in consultation in good faith with Lessee, for a period of up to thirty (30) days from the date of such notification, take such steps at the expense of Lessee as may be open to it to mitigate the effects of such circumstances on Lessee, including, if requested by Lessee, the filing of any Tax form or return which any Indemnitee is legally able to file;	
provided that neither Lessor nor any Indemnitee shall be under any obligation to take or continue to take any such action or other steps if an Event of Default has occurred and is continuing or if it is satisfied, in its absolute discretion, to do so would interfere with the right of Lessor or such Indemnitee to arrange its affairs (tax or otherwise) in whatever manner it thinks fit or oblige Lessor or such Indemnitee to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax, or have a material adverse effect on its business, or operations or financial condition or reputation or the financial basis under which, inter alia , the Transaction Documents have been entered into or would entail any cost or expense to Lessor or that Indemnitee (unless, in the case of any cost or expense, Lessor or that Indemnitee shall have been indemnified or otherwise secured to its satisfaction) or is otherwise prejudicial to it.
 
6.7	If any Indemnitee in good faith determines that it has realised a tax benefit (by way of deduction, credit or otherwise) as a result of any payment for which Lessee is responsible under this Clause 6, Lessor shall pay or use all reasonable endeavours to procure that the relevant Indemnitee pays to Lessee as soon as practicable after the tax benefit has been realised, an amount which the Indemnitee determines will ensure that (after taking into account of the payment itself) such Indemnitee is in no better and no worse position than it would have been if the deduction had not applied.	
 
6.8	Without prejudice to the obligations of Lessee pursuant to Clause 6.1, Lessor will use reasonable endeavours to deliver to Lessee and will use reasonable endeavours to procure that each other Indemnitee delivers to Lessee, as soon as reasonably practicable following receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English), such forms, certifications and	
 
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 	other documents as (i) an Indemnitee is entitled under applicable law to execute or obtain and (ii) are required by applicable law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Agreement without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable law to withhold in the absence of such document provided that nothing in this Clause 6.8 shall oblige Lessor or any other Indemnitee to take any action if in its reasonable opinion, acting in good faith, to do so would have a material adverse effect on its business, operations or reputation or the financial basis on which the Transaction Documents have been entered into or would entail any cost or expense to Lessor or any other Indemnitee unless, in the case of any cost or expense, Lessee and each other Indemnitee shall have been indemnified or otherwise secured to its satisfaction. Without prejudice to the generality of the foregoing provisions of this Clause 6.8, Lessor will use reasonable endeavours to provide to Lessee as soon as reasonably practicable after Delivery, and in any event, no later than the first Rent Date falling after Delivery and on each anniversary of the Delivery Date falling during the Term, a statement from the Irish Tax Revenue Commissioners that Lessor is resident for tax purposes in Ireland.	
 
7	QUIET ENJOYMENT	
 
7.1	Provided no Event of Default has occurred and is continuing under this Agreement, neither Lessor, the Lease Manager nor any person lawfully claiming by or through Lessor or the Lease Manager will interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee, but the exercise by Lessor, the Security Trustee or any Lender of its rights under or in connection with this Agreement or the Assignment, in each case, pursuant to and in accordance with the terms of this Agreement or the Assignment (as the case may be) will not constitute such an interference.	
 
7.2	Simultaneously with delivery of the Aircraft from Lessor to Lessee under this Agreement, Lessor shall procure that the Security Trustee provides to Lessee the Quiet Enjoyment Letter subject to Lessee providing the Security Trustee with the Acknowledgement of the Assignment.	
 
7.3	Lessor will not exercise any rights pursuant to the Deregistration Power of Attorney save where an Event of Default has occurred and is continuing.	
 
7.4	Lessor will not exercise any rights pursuant to the letter set out in Part 2 of Exhibit C save where an Event of Default has occurred and is continuing.	
 
7.5	Lessor will not exercise any rights pursuant to the letter set out in Part 1 of Exhibit C more frequently than quarterly, save where a Default has occurred and is continuing.	
 
8	LESSEE’S COVENANTS	
 
8.1	Lessee hereby covenants with Lessor in the terms set out in Appendix 6.	
 
9	INSURANCE AND TOTAL LOSS	
 
9.1	Lessee hereby covenants with Lessor in the terms set out in Appendix 7.	
 
9.2	The provisions of Part 3 of Appendix 7 shall apply if a Total Loss occurs or if there is any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss.	
 
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10	MANUFACTURER’S WARRANTIES	
 
10.1		
 
(a)	Pursuant to the terms of the Airframe Warranty Agreement and the Engine Warranties Agreement, with effect from the Delivery Date, Lessor will authorise Lessee to exercise, such rights as Lessor may have in respect of the Airframe Warranties and the Engine Warranties respectively upon the terms and subject to the conditions contained in the Airframe Warranty Agreement and the Engine Warranties Agreement.	
 
(b)	Lessee shall give Lessor prompt written notice of any warranty claim which is settled with Lessee on the basis of a total or partial cash payment in excess of *****. Lessee shall apply any cash payments whether above or below ***** to remedy the defect or, if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, as compensation to Lessee for any loss of use of the Aircraft arising as a result of such defect. Any cash payments to Lessee in respect of warranty claims which are not applied to the repair or remedy of defects in the Aircraft, and which are not in respect of compensation for loss of use of the Aircraft during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall be paid by Lessee to Lessor.	
 
(c)	Upon the occurrence of the earlier of an Event of Default or termination or expiry of the leasing of the Aircraft under this Agreement (each a “ Termination Event ”):	
 
 	(i)	all rights under the Airframe Warranties and the Engine Warranties will immediately revert to Lessor, including all claims thereunder (whether or not perfected except (aa) to the extent necessary to reimburse Lessee the actual costs incurred by it for the repair of any defect or, (bb) if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, to compensate Lessee for any loss of use of the Aircraft suffered by it during the Term as a result of the defect) and Lessee will immediately take all steps and execute all documents required by Lessor to perfect such reversion; and	
 
 	(ii)	Lessor may retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this Clause 10 in the absence of such Event of Default or such Termination Event (arising otherwise than as a result of an Event of Default), as the case may be, cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee and recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft not fully and completely rectified by Lessee before such Event of Default or Termination Event (arising otherwise than as a result of an Event of Default), as the case may be and, in the absence of such an Event of Default, not constituting compensation for loss of use during the Term.	
 
10.2	To the extent any warranties relating to the Aircraft are made available under an agreement between any manufacturer, seller, subcontractor or supplier and Lessee, Lessee will:	
 
(a)	pay the proceeds of any claim thereunder in accordance with Clause 10.1 and pending such payment will hold the claim and the proceeds on trust for Lessor; and	
 
(b)	Lessee will take all such steps as are necessary at the end of the Term to ensure the benefit of any of those warranties which have not expired are vested in Lessor.	
 
11	INDEMNITY	
 
11.1	Lessee agrees to defend, indemnify and hold harmless the Indemnitees from and against any and all claims, proceedings, losses, liabilities, suits, judgments, costs, expenses, penalties or fines (each a “ Claim ”) regardless of when the same is made or incurred, whether during or after the Term:	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(a)	which may at any time be suffered or incurred directly or indirectly as a result of or connected with the possession, importation, delivery, performance, management, ownership, registration, control, maintenance, condition, service, repair, overhaul, leasing, use, operation, storage, transport or return of the Aircraft, any Engine or Part (either in the air or on the ground) whether or not the Claim may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of when the same arises or whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee;	
 
(b)	which arise out of any act or omission which invalidates or which renders voidable any of the Insurances; and	
 
(c)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right or a breach of any obligation of confidentiality owed to any person,	
but excluding any Claim in relation to a particular Indemnitee to the extent that such Claim:
 
 	(i)	is covered pursuant to another indemnity provision of any Transaction Document; or	
 
 	(ii)	arises solely as a result of the wilful misconduct or Gross Negligence of that Indemnitee under any Transaction Document; or	
 
 	(iii)	relates to Lessor Taxes or a Lessor Lien attributable to that Indemnitee; or	
 
 	(iv)	arises solely as a result of any breach by that Indemnitee of any express obligation owed to Lessee under this Agreement or any other Transaction Document; or	
 
 	(v)	relates solely to either (a) any period or event occurring prior to the Delivery Date (save for any stamp duty or other Taxes imposed in connection with the execution and/or registration of any of the Transaction Documents) or (b) any period commencing or event occurring after the Expiry Date and return of the Aircraft in the condition required by this Agreement and which is unrelated to any act or omission of Lessee or the use or possession by Lessee of the Aircraft during the Term or the transactions contemplated by the Transaction Documents.	
 
11.2	The indemnities contained in this Agreement will continue in full force after the Expiry Date.	
 
11.3	All rights expressed to be granted to each Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of each such Indemnitee.	
 
12	RETURN OF AIRCRAFT	
The provisions of Appendix 8 shall govern the parties’ respective rights and obligations regarding the return of the Aircraft.
 
13	DEFAULT	
 
13.1	Each of the events specified in Part 1 of Appendix 9 will constitute an Event of Default and a repudiation of this Agreement by Lessee.	
 
13.2	The provisions of Part 2 of Appendix 9 shall govern the respective rights and obligations of the parties following the occurrence of a Default or an Event of Default.	
 
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13.3	If Lessee fails to comply with any provision of any Transaction Document, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat the non-compliance as an Event of Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection therewith.	
 
13.4	The rights of Lessor under the Transaction Documents may be exercised as often as necessary, are cumulative and not exclusive of its rights under any law and may be waived only in writing and specifically. Delay in exercising or non-exercise of any such right will not constitute a waiver of that right.	
 
14	ASSIGNMENT	
 
14.1	The provisions set out in Appendix 10 shall govern assignment and/or transfer of Lessee’s and Lessor’s rights and obligations under this Agreement.	
 
15	ILLEGALITY	
 
15.1	If it becomes, or will become, illegal for either Lessor or Lessee to perform its obligations or to enforce its rights under any Transaction Document or to participate in the transactions contemplated thereby, Lessor or Lessee (as the case may be) shall, promptly upon becoming aware of such cessation or illegality, notify the other party thereof (such notice being referred to herein as an “ Illegality Notice ”). Subject to any restrictions imposed on the party affected by such illegality and provided that the rights of the other party are not adversely impacted by such illegality, the parties shall, following service or receipt of an Illegality Notice, negotiate in good faith for a period (the “ Consultation Period ”) of up to thirty (30) days from the date of the Illegality Notice (or such shorter period as may end on the date on which such illegality takes effect) with a view to restructuring the arrangements contemplated by the Transaction Documents so as to avoid such illegality. The party for whom it becomes illegal to perform its obligations or to enforce its rights under the Transaction Documents or to participate in the transactions contemplated thereby shall reimburse the other parties involved in such consultations for their reasonable legal and other expenses incurred in connection with such consultations and the implementation of arrangements (if any) agreed during such consultations. Lessee acknowledges that the Security Trustee or any Lender may, at no cost to Lessee, also participate in such consultations.	
 
15.2	If no satisfactory arrangement for restructuring the transactions contemplated by the Transaction Documents is agreed by the end of the Consultation Period, Lessor may, by written notice to Lessee, terminate the leasing of the Aircraft under this Agreement with effect from the date of such notice (if the illegality has become effective on or before such date) or otherwise with effect from the last Business Day before the illegality takes effect, whereupon the Lessee shall forthwith redeliver the Aircraft to Lessor in accordance with Appendix 8.	
 
16	NOTICES	
 
16.1	All notices under, or in connection with, the Transaction Documents will, unless otherwise stated, be given in writing by letter or facsimile. Any such notice is deemed effectively to be given as follows:	
 
(a)	if by letter, when delivered personally or, if sent by registered post, on the third day after posting; and	
 
(b)	if by facsimile, when transmitted and confirmed by the transmitting party’s fax machine.	
 
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16.2	The address, facsimile and telephone numbers of Lessee and Lessor are as follows:	

(a)         Lessee:	  	Address:	  	Av. Prolongación Paseo de la Reforma 490 Piso 1,	
	  		  	Col. Santa Fe Pena Blanca,	
	  		  	01210 Mexico	
			
	  	Attn:	  	General Counsel/Director Juridico	
	  	Facsimile:	  	+52 55 52 61 6460	
	  	Telephone:	  	+52 55 52 61 6400	
			
(b)         Lessor:	  	Address:	  	28 Upper Mount Street	
	  		  	Dublin 2	
	  		  	Ireland	
			
	  	Attn:	  	Company Secretary	
	  	Facsimile:	  	+353 1 639 8118	
	
(with a copy to Amentum Capital Limited:	
			
	  	Address:	  	28 Upper Mount Street	
	  		  	Dublin 2	
	  		  	Ireland	
			
	  	Attn:	  	Company Secretary	
	  	Facsimile:	  	+353 1 639 8118	
	  	Telephone:	  	+353 1 6398111)	
 
16.3	All notices to be given under the Transaction Documents will be in English. All documents delivered to Lessor pursuant to the Transaction Documents will be in English, or if not in English, will be accompanied by a certified English translation.	
 
17	DISCLAIMERS AND WAIVERS	
 
17.1	THE AIRCRAFT IS DELIVERED “ AS IS, WHERE IS ” AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR, LESSEE AND THE INDEMNITEES NEITHER LESSOR NOR ANY OTHER INDEMNITEE WILL HAVE ANY LIABILITY IN RELATION TO, AND NEITHER LESSOR NOR ANY OTHER INDEMNITEE HAS NOR WILL BE DEEMED TO HAVE MADE OR GIVEN, ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT, INCLUDING BUT NOT LIMITED TO:	
 
(a)	THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY USE OR PURPOSE, VALUE, CONDITION, OR DESIGN, OF THE AIRCRAFT OR ANY PART; OR	
 
(b)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM LESSOR’S OR ANY OTHER INDEMNITEE’S NEGLIGENCE, ACTUAL OR IMPUTED; OR	
 
(c)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR ANY LIABILITY OF LESSEE TO ANY THIRD PARTY, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.	
 
17.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND EACH INDEMNITEE, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF ANY INDEMNITEE AND ALL CLAIMS AGAINST EACH INDEMNITEE HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE OPERATION OR PERFORMANCE OF THE AIRCRAFT.	
 
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17.3	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE AND THE OTHER TERMS OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE TERMS OF THIS AGREEMENT HAVE BEEN AGREED AND THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED NOTWITHSTANDING ITS PROVISIONS.	
 
18	CONFIDENTIALITY	
 
18.1	Lessor and Lessee agree that the Transaction Documents and information supplied pursuant to the Transaction Documents are to be kept confidential, subject to the exceptions, set forth in this Clause 18. Neither party will disclose or permit its officers, agents or advisers to disclose any information from or in connection with the Transaction Documents without the consent of the other or to use any such information for any purpose other than for the purpose of the transactions contemplated by the Transaction Documents, except:	
 
(a)	for disclosures of the terms of the Transaction Documents and any information provided under this Agreement made by Lessor to any actual or potential assignee or transferee permitted by Appendix 10 or to any actual or potential Lender or Security Trustee or to their respective professional advisers, provided that (i) Lessor has obtained a confidentiality undertaking in respect of such information from each such person or (ii) such person is subject to a recognised duty of confidentiality;	
 
(b)	for disclosures made by either party to its professional advisers, shareholders and any rating agency or as may be required by law or legal process or by the administrative or regulatory requirements of any recognised stock exchange on which such party’s or its shareholders’ shares are listed;	
 
(c)	for disclosures made by or on behalf of either party or any Indemnitee to any governmental or other official body in connection with the registration of any Transaction Document, the Mortgage or the Assignment or otherwise reasonably advisable in order to establish, maintain, protect and enforce the rights and remedies of either party hereto or any Indemnitee under the Transaction Documents, the Mortgage or the Assignment;	
 
(d)	Lessee may deliver a copy of this Agreement to International Finance Corporation (“ IFC ”) pursuant to and in accordance with the facility agreement between Lessee and the Guarantor and IFC and IFC may disclose this Agreement to its legal advisers and other professional advisers provided such persons are under a recognised duty of confidentiality or have executed a confidentiality undertaking or to a rating agency or to any potential assignee or transferee of IFC, subject to the receipt by Lessee of a confidentiality undertaking from each such assignee or transferee,	
provided that notwithstanding the foregoing provisions of this Clause 18, Lessor may only disclose the Agreed Maintenance Programme to third parties who are either bound by a duty of confidentiality or have executed a confidentiality undertaking.
 
19	LAW AND JURISDICTION	
 
19.1	This Agreement, including any non-contractual obligations arising out of or in connection with, this Agreement is governed by and this Agreement shall be construed in accordance with the laws of Ireland.	
 
19.2	The parties hereto irrevocably agree that any legal action or proceedings in connection with this Agreement may be brought in the courts of Ireland. The parties further agree that any party may take proceedings against the other in the courts of the domicile of the	
 
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 	parties or where the Aircraft is located, hereby waiving any jurisdiction not referred to in this Clause 19.2. The courts agreed to in this paragraph shall have jurisdiction to settle any disputes arising out of or in connection with this Agreement.	
 
19.3	Lessee hereby irrevocably designates, appoints and empowers Matsack Trust Limited, 70 Sir John Rogerson’s Quay, Dublin 2, Ireland, to receive for it and on its behalf service of process issued out of the Irish courts in any legal action or proceeding arising out of or in connection with this Agreement and/or any other Transaction Document to which it is a party.	
 
19.4	Each of the parties irrevocably waives any objection it may now or hereafter have to the laying of venue of any action or proceeding in any court and any claim it may now or hereafter have that any action or proceeding has been brought in an inconvenient forum.	
 
19.5	Each party irrevocably and unconditionally:	
 
(a)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement, no immunity from such legal proceedings will be claimed by it;	
 
(b)	waives any such right of immunity which it or its assets now has or may in the future acquire; and	
 
(c)	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings.	
 
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IN WITNESS whereof the parties hereto have executed this Agreement on the date shown at the beginning of this Agreement.

SIGNED  on behalf of  CONCESIONARIA VUELA	
COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	
		
By:	 	/s/ Fernando Suárez Gerard	
Name:	 	Fernando Suárez Gerard	
Title:	 	CFO	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
SIGNED on behalf of AMENTUM AIRCRAFT LEASING NO. THREE LIMITED

By:	 	/s/ Mitchel Simpson	
Name:	 	Mitchel Simpson	
Title:	 	Chief Financial Officer	
 
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APPENDIX 1
PART 1
DEFINITIONS
“ “ A ” Check ” means a package of scheduled maintenance tasks with repeat intervals up to 600 Flight Hours, 6 months and 500 Cycles (including any lesser tasks) performed by an Agreed Maintenance Performer in accordance with the Agreed Maintenance Programme.
“ Acknowledgement of Assignment of Guarantee ” means the acknowledgement from the Guarantor to Lessor and the Security Trustee in respect of the Assignment in the form of Part 1 of Exhibit A.
“ Acknowledgement of Assignment of Lease ” means the acknowledgement from Lessee to Lessor and the Security Trustee in respect of the Assignment in the form of Part 2 of Exhibit A.
“ Agreed Maintenance Performer ” means Lessee, Aeromantenimiento S.A. and any person which is approved by, and holds all necessary licences from, the Air Authority and holding a valid repair station certificate for maintenance work on the Airframe, Landing Gear, APU, Engine and Parts issued by the FAA or EASA or, in respect of any “A” Check, any maintenance facility approved by the Air Authority.
“ Agreed Maintenance Programme ” means the Maintenance Programme for the Aircraft from time to time as approved by the Air Authority which shall be based on the Maintenance Planning Document.
“ Agreed Value ” means with respect to the period from the Delivery Date up to but excluding the first anniversary of the Delivery Date, ***** and thereafter reducing on each anniversary of the Delivery Date by an amount equal to ***** of the amount of the Agreed Value on the previous such anniversary or the Delivery Date as applicable.
“ Affiliate ” means in relation to any person (the “ First Person ”):
 
(a)	any person controlled by the First Person;	
 
(b)	any person who controls such First Person;	
 
(c)	any person controlled by the same person who controls the First Person,	
(and for this purpose “ Control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Air Authority ” means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
(a)	have control or supervision of civil aviation in that state; or	
 
(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.	
“ Aircraft ” means the aircraft described in Appendix 2, (which term includes where the context admits a separate reference to the Engines, Parts and Aircraft Documents) (but for the avoidance of doubt excludes any engine or part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Aircraft Documents ” means all such technical data, documents, manuals and log books and any other records relating to the Aircraft which Lessee is required to keep and maintain to comply with the regulations of the Air Authority and FAA and all additions, renewals, revisions and replacements from time to time made in accordance with this Agreement and shall include:
 
(a)	without limitation, at Delivery, those documents delivered to Lessee by Lessor; and	
 
(b)	at redelivery, those documents set out in Part 3 of Appendix 8.	
“ Airframe ” means the Aircraft, excluding the Engines and Aircraft Documents.
“ Airframe Manufacturer ” means Airbus S.A.S.
“ Airframe Warranties ” means the warranties in respect of the Aircraft specified in the Airframe Warranty Agreement.
“ Airframe Warranty Agreement ” means the airframe warranty agreement entered into or to be entered into on or prior to the Delivery Date between Lessee, Lessor, the Security Trustee and the Airframe Manufacturer.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued or endorsed by the FAA, the EASA and/or the Air Authority applicable to the Airframe, any Engine, any Part or the Aircraft Documents.
“ APU ” means the auxiliary power unit installed on the Aircraft at Delivery and any replacement auxiliary power unit installed on the Aircraft in accordance with this Agreement and in each case includes any attaching Part.
“ APU Available Balance ” shall have the meaning ascribed to such term in part 2 of Appendix 5.
“ APU Hours ” means each hour or part of an hour during which the APU is operated.
“ APU Initial Balance ” shall have the meaning ascribed to such term in part 2 of Appendix 5.
“ APU Performance Restoration ” means a shop visit which restores performance and durability of the APU so as to return the APU to service for a complete APU run interval and shall include a Heavy Repair (as defined in the Honeywell Shop Maintenance Philosophy) or APU overhaul as required by the APU manufacturer’s component maintenance manual.
“ Arranger ” means HSH Nordbank AG, in its capacity as head arranger under Lessor’s financing arrangements.
“ Assignment ” means any present or future assignment in favour of the Security Trustee of Lessor’s rights in respect of, amongst other things, this Agreement, the Insurances, any Letter of Credit, the Guarantee, the Deposit and the Maintenance Reserves as security for Lessor’s obligation to the Lenders.
“ Assignment of Insurances ” means the assignment of Lessee’s rights, title, benefit and interest in and to the Insurances (other than the liability insurances) entered into or to be entered into on or prior to the Delivery Date between Lessor as assignee and Lessee as assignor.
“ Bill of Sale ” means the bill of sale transferring ownership of the Aircraft from the Airframe Manufacturer to Lessor.
“ Business Day ” means a day (other than a Saturday or Sunday) on which business of the nature required by this Agreement is carried out in Ireland and Mexico or, where used in relation to payments, on which banks are open for business in Dublin, Ireland and New York.
 
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“ Certificate of Acceptance ” means a certificate of acceptance in respect of the Aircraft duly executed by Lessee substantially in the form of Exhibit B.
““ C ” Check ” means a package of scheduled maintenance tasks with repeat intervals of 20 months 6,000 Flight Hours or 4,500 Cycles performed by an Agreed Maintenance Performer in accordance with the Maintenance Planning Document in effect on the relevant date.
“ Claim ” has the meaning given to it in Clause 11.1.
“ Consolidated Text ” means the Consolidated Text of the Convention and the Protocol attached to resolution No. 1 of the Final Act of the Diplomatic conference to adopt the Convention and the Protocol held under the auspices of ICAOP and UNIDROIT at Cape Town, South Africa from 29 October to 16 November, 2001.
“ Convention ” means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November, 2001.
“ CPCP ” means corrosion prevention and control programme.
“ Cycle ” means , in relation to the Airframe, one take-off and landing of the Aircraft, and in relation to an Engine, an APU, or a Landing Gear, or any fitted component installed in any of the foregoing one take off and landing of any aircraft on which that Engine, APU, or Landing Gear or any other fitted component, as the case may be, is installed.
“ Default ” means any Event of Default and any event which with the giving of notice, lapse of time or determination of materiality would constitute an Event of Default.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee under this Agreement.
“ Delivery Check Flight ” has the meaning given to such term in Part 1 of Appendix 7A.
“ Delivery Condition ” means the condition of the Aircraft as specified in Part 2 of Appendix 7A.
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means Lufthansa Technik Philippines facility in Manila, Philippines.
“ Deposit ” means the amount equal to ***** paid or payable to by Lessee to Lessor in cash or provided or to be provided by Lessee to Lessor by way of Letter of Credit, in each case, in accordance with Clause 5.
“ Deregistration Power of Attorney ” means a deregistration and export power of attorney in the form of Exhibit D or in such other form agreed by Lessor.
“ Dollars ” and “ $ ” means the lawful currency of the United States of America.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 or any other organisation or authority that, under the laws of the European Union, shall from time to time have jurisdiction over, amongst other things, aircraft airworthiness and aircraft safety standards for the European Union.
“ Emergency Operations ” means any deviation in an agreed flight path of the Aircraft to a Prohibited Jurisdiction made solely in order to protect the Aircraft or the lives, safety and/or wellbeing of the passengers and crew and provided Lessee shall promptly remove the Aircraft from such Prohibited Jurisdiction upon cessation of the conditions giving rise to the relevant flight path deviation.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ EMMP ” means the latest revision of the engine maintenance management programme of Lessee for the Engines adapted from the latest revision of the Engine Manufacturer’s engine maintenance management programme.
“ Engine ” means whether or not installed on the Aircraft:
 
(a)	each engine of the manufacture and model specified in Appendix 2 such engines being described as to serial numbers on the Certificate of Acceptance to be executed by Lessee upon delivery of the Aircraft under this Agreement; and	
 
(b)	any Suitable Replacement Engine which has replaced that engine in accordance with the terms of this Agreement,	
and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any Replaced Engine title to which has passed to Lessee pursuant to this Agreement (and, for the avoidance of doubt, the term “ Engine ” excludes any engine installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Engine LLPs ” means each or any of the Engine Manufacturer’s certified cyclic life controlled parts as specified in the Engine Manufacturer’s “Time Limits Manual”.
“ Engine Loss ” means the occurrence of any of the events referred to in the definition of “Total Loss” but with references therein to “Aircraft” being construed as references to any Engine.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, in respect of any Engine, the performance of a refurbishment of such Engine to clear it until its next anticipated Engine Performance Restoration (including, without limitation, the completion of a Level 3 Refurbishment on each of the high pressure turbine, the high pressure compressor and the combuster) in all cases in accordance with the maintenance procedures and soft times as defined in the EMMP (excluding any LRU’s on such Engine).
“ Engine Warranties ” means, in respect of each Engine, the warranties in respect of those Engines specified in the Engine Warranties Agreement.
“ Engine Warranties Agreement ” means the engine warranties agreement entered into or to be entered into on or before the Delivery Date between the Engine Manufacturer, the Security Trustee, Lessor and Lessee.
“ Event of Default ” means any of the events listed in Part 1 of Appendix 9.
“ Expiry Date ” means:
 
(a)	the Scheduled Expiry Date; or	
 
(b)	the date on which the leasing of the Aircraft to Lessee is terminated or expressed to expire under and in accordance with the provisions of this Agreement; or	
 
(c)	the date on which Lessor receives the Agreed Value following a Total Loss.	
“ FAA ” means the Federal Aviation Administration of the United States of America and any successor thereof.
“ Facility Agent ” means HSH Nordbank AG or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ Final Delivery Date ” means ***** or such later date as the parties may agree.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Financial Indebtedness ” means any indebtedness for or in respect of:
 
(a)	moneys borrowed;	
 
(b)	any amount raised by acceptance under any acceptance credit facility;	
 
(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;	
 
(d)	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with Mexican GAAP or IFRS (whichever methodology is used by Lessee with respect to the preparation of its financial statements) be treated as a finance or capital lease;	
 
(e)	receivables sold or discounted as a means of raising money (other than any receivables to the extent they are sold on a non-recourse basis);	
 
(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;	
 
(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the market to market value shall be taken into account);	
 
(h)	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and	
 
(i)	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.	
“ Fleet Aircraft ” means any other aircraft owned or operated by Lessee.
“ Flight Hour ” means in relation to the Aircraft, each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground and in relation to an Engine, a Landing Gear, an APU and a Part each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of an aircraft on which that Engine, the Landing Gear, the APU or the Part, as the case may be, is installed leaves the ground on take off until the wheels of that aircraft next touch the ground.
“ Government Entity ” means (a) any national government, political subdivision thereof, or local jurisdiction therein; or (b) any instrumentality, board, commission, court, tribunal or agency of any thereof, however constituted; or (c) any association, organisation, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Gross Negligence ” means an act or omission which is done deliberately with intent to cause loss or damage or recklessly and with knowledge, that damage, death, delay, injury or loss would possibly result.
“ Guarantee ” means the guarantee dated the date of this Agreement executed by the Guarantor in favour of Lessor in respect of Lessee’s obligations to Lessor under the Transaction Documents.
“ Guarantor ” means Controladora Vuela Compañía de Aviación, S.A.P.I.de C.V., a company organised and validly existing under the laws of Mexico.
 
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“ Habitual Base ” means Mexico or such other jurisdiction as agreed to by Lessor pursuant to the terms of this Agreement.
“ IDERA ” means an irrevocable deregistration and export request authority in the form set out in Annex 1 to the Convention.
“ IFRS ” means the International Financial Reporting Standards, being the guidelines and rules set from time to time by the International Accounting Standard Board that companies and organisations can follow when compiling financial statements;
“ Indemnitees ” means:
 
(a)	each of Lessor, the Lease Manager, the Security Trustee, the Facility Agent, the Arranger and the Lenders, including, any of their respective successors and permitted assigns, shareholders, Subsidiaries and Affiliates and their respective directors, officers, agents and employees; and	
 
(b)	Lufthansa Technik AG and Lufthansa Technik Philippines Inc. (including their respective successors, and each of their respective employees, directors and officers) for:	
 
 	(i)	a period of ***** commencing on the Delivery Date; and	
 
 	(ii)	the purposes of the aviation general legal liability insurance only (and it being agreed that none of the persons listed in this paragraph (b) shall constitute an Indemnitee for any other purpose whatsoever) other than any claims arising out of or in connection with their capacity as manufacturer, repairer or servicing agent.	
“ Insurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ International Interest ” has the meaning given to it in the Convention.
“ International Registry ” has the meaning given to it in the Convention.
“ Landing Gear ” means the landing gear assembly of the Aircraft including any attaching Part.
“ Landing Gear Overhaul ” means a full overhaul of the Landing Gear as required by the Maintenance Planning Document and in accordance with the manufacturer’s procedures.
“ LC Amount ” has the meaning given to such terms in Clause 5.2;
“ Lease Manager ” means Amentum Capital Limited, a company incorporated in Ireland or such other entity the Lessor notifies to the Lessee.
“ Lenders ” means such financial institution(s) which from time to time participate in the financing of the Aircraft for Lessor and/or for whose benefit security over, or rights relating to, the Aircraft and/or this Agreement and/or the Insurances is granted by Lessor or at Lessor’s request.
“ Lessor Lien ” means:
 
(a)	any Assignment, any Mortgage and any security interest whatsoever from time to time created by or through Lessor in connection with the financing of the Aircraft; or	
 
(b)	any other security interest in respect of the Aircraft which results from acts of or claims against Lessor, the Lease Manager or their respective Affiliates or Subsidiaries not related to the transactions contemplated by or permitted under this Agreement; or	
 
(c)	liens in respect of the Aircraft for Lessor Taxes.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Lessor Taxes ” means Taxes in respect of any Indemnitee:
 
(a)	imposed as a direct result of activities of that Indemnitee in the jurisdiction imposing the liability unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(b)	imposed on the net income, gross profits or gains of that Indemnitee by any Government Entity in the country of incorporation of the Indemnitee or any other jurisdiction where that Indemnitee has a place of business, in each case unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(c)	imposed with respect to either (a) any period or event occurring prior to the Delivery Date (save for any stamp duty or other Taxes imposed in connection with the execution and/or registration of any of the Transaction Documents) or (b) any period commencing or event occurring after the Expiry Date and unrelated to the transactions contemplated by the Transaction Documents or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(d)	imposed solely as a direct result of the Gross Negligence or wilful misconduct of that Indemnitee or breach by that Indemnitee of any of its express obligations to Lessee and/or Guarantor under any of the Transaction Documents, but excluding any such breach which is attributable to or arises out of any breach by Lessee of its obligations under this Agreement or any other Transaction Document or any Event of Default; or	
 
(e)	imposed solely as a direct result of a voluntary or involuntary sale, transfer, assignment, novation or other disposition by such Indemnitee of all or part of an interest in the Aircraft or any part thereof or this Agreement, save for the Assignment, the Mortgage and/or any such sale, transfer, assignment or disposition which has occurred directly or indirectly as a result of an Event of Default and/or any such sale, assignment, transfer or disposition which has occurred with the consent of Lessee pursuant to Clause 6.6, Clause 15 or Clause 19; or	
 
(f)	to the extent that the same are imposed or arise solely as a result of a Lessor Lien attributable to that Indemnitee; or	
 
(g)	to the extent attributable to the failure of that Indemnitee to comply with Clause 6.8 of this Agreement;	
 
(h)	to the extent that the same arise as a result of any financing arrangements entered into by such Indemnitee in connection with this Agreement and are not related to the use, operation, leasing, maintenance, condition, design, defect, insurance or any other matters set forth in Clauses 11.1(a) to (c) inclusive of this Agreement; or	
 
(i)	to the extent that the same are increased solely by reason of Lessor voluntarily changing, after the date of this Agreement the jurisdiction in which it is resident for tax.	
“ Letter of Credit ” means a letter of credit which meets the requirements set out in paragraph 2 of Part 1 of Appendix 5;
“ Level 3 Refurbishment ” has the meaning given to it in the latest revision of the Engine Manufacturer’s engine management programme.
“ LIBOR ” means, in respect of the applicable period for the calculation of default interest hereunder or in respect of any Rental Period for the calculation of Rent under Clause 5:
 
(a)	the applicable Screen Rate; or	
 
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(b)	if no Screen Rate is available for Dollars for the applicable interest period or Rental Period, as the case may be, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Lessor at its request, quoted by the Reference Banks to leading banks in the London interbank market,	
for the offering of deposits in Dollars for the applicable interest period or Rental Period, as the case may be, as of 11.00 a.m. (London time) two (2) Business Days before the first day of such period.
“ Life Limited Part” means any Part that has a pre-determined life limit as mandated by Manufacturer, the Air Authority, FAA, EASA or any other Government Entity, as the context requires, which requires any such Part to be discarded upon reaching such life limit.
“ Loan Agreement ” means the Loan Agreement dated 19 June 2008 between Lessor, as borrower and HSH Nordbank AG as arranger, original lender, the agent and the security trustee (as amended and/or supplemented from time to time).
“ Loss ” means any cost, expense, financial liability, damage or monetary loss of any kind.
“ LRU ” means a line replacement unit.
“ Maintenance Planning Document ” or “ MPD ” means the latest revision of the maintenance planning document issued by the Airframe Manufacturer in respect of the same type of aircraft as the Aircraft.
“ Maintenance Programme ” means Lessee’s Air Authority approved maintenance programme for the Aircraft in accordance with the Maintenance Planning Document encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including but not limited to, servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, corrosion control, inspection and treatments.
“ Maintenance Reserves ” has the meaning given to it in Part 2 of Appendix 5.
“ Major Checks ” means the 6 Year Check and the 12 Year Check.
“ Mandatory Service Bulletin ” means any service bulletin affecting the airworthiness or safety of the Aircraft which is issued by the Manufacturer and compliance with which is required within a defined period of time.
“ Manufacturer ” means in respect of: (a) the Airframe, the Airframe Manufacturer; the Engines, the Engine Manufacturer; and (c) with respect to a Part (other than a complete Engine), the manufacturer of such Part.
“ Mexico ” means the United Mexican States.
“ Mexican GAAP ” means the generally accepted and consistently applied accounting principles and practices in the State of Incorporation.
“ Minimum Liability Coverage ” means ***** or such higher amount carried by Lessee on its fleet policy.
“ Mortgage ” means any present or future aircraft mortgage, pledge or security agreement made by Lessor in favour of the Security Trustee in respect of the Aircraft.
“ Other Agreements ” means together
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
23

(a)	the lease agreement dated on or about the date hereof between the Lessor and Lessee with respect to the Airbus A320-200 aircraft with manufacturer’s serial number 3524; and	
 
(b)	any other lease agreement entered into or to be entered into between Lessor (or any Affiliate of Lessor) with Lessee (or any Affiliate of Lessee).	
“ Part ” means whether or not installed on the Aircraft:
 
(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft at Delivery; and	
 
(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has passed to Lessor pursuant to this Agreement,	
but excludes any such items title to which has passed to Lessee pursuant to this Agreement (and for the avoidance of doubt the term “ Part ” excludes any part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Permanent Repairs ” means any and all repairs relating to the Aircraft which:
 
(a)	subject to (c) and (d) below, are of a permanent nature;	
 
(b)	shall have been reviewed and completed in accordance with the latest revision of the Manufacturer’s published guidelines applicable at the time of repair and supported by documentation evidencing accomplishment in accordance with FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Airframe Manufacturer’s written approval (wherein a statement of no technical objection does not constitute the Airframe Manufacturer’s written approval and a statement of conformity to type certificate will be required)) or EASA or FAA STC (Supplemental Type Certificate) or otherwise approved by the FAA and/or EASA;	
 
(c)	shall be flush unless not available from the Airframe Manufacturer or the original equipment manufacturer;	
 
(d)	shall be approved for unlimited continued service, without time limitations for removal, repair or replacement and shall have no special or distinct repetitive inspection requirements, unless no such repair exists, in which case:	
 
 	(i)	Lessee shall provide to Lessor, at the time the repair is being carried out, written confirmation from the Manufacturer that no further repair is currently available or is reasonably capable of being developed within a reasonable period; and	
 
 	(ii)	notwithstanding the written confirmation, Lessee shall carry out the repair with the least number of repeat inspections or the greatest time between and with the least potential impact for future operators as is reasonably possible given Manufacturer’s guidelines.	
“ Permitted Lien ” means:
 
(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
(b)	any lien of a repairer, mechanic, carrier, hangarkeeper or other similar lien arising in the ordinary course of business or by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
 
(c)	any Lessor Lien,	
 
24

but only if (in the case of both (a) and (b)) (i) adequate reserves have been provided by Lessee for the payment of the Taxes or obligations; and (ii) such proceedings, or the continued existence of the lien, do not give rise to any likelihood of the sale, forfeiture, detention or other loss of the Aircraft or any interest therein or of criminal liability or unindemnified civil liability on Lessor, the Security Trustee or any Lender.
“ Permitted Sublease ” means a sublease in compliance with Clause 4.1(c) and (d) of Appendix 6.
“ Permitted Sub-Lessee ” means any of:
 
(a)	Taca International Airlines, S.A.;	
 
(b)	Aerovias Del Continente Americano S.A. AVIANCA;	
 
(c)	Trans American Airlines, S.A.;	
 
(d)	Lineas Aereas Costarricenses, S.A.;	
 
(e)	Aviateca, S.A.;	
 
(f)	Aerolineas Galapagos S.A. Aerogal; and	
 
(g)	Spirit Airlines.	
“ Permitted Transferee ” means any person who (a) is not a competitor, or any Affiliate of a competitor, of Lessee; (b) is experienced in cross border leasing or owned or managed by a person who is so experienced; and (c) has a net worth of at least ***** (or whose obligations under this Agreement are guaranteed by a person with at least such a net worth).
“ PMA Part ” means a Part which has not been manufactured by the Airframe Manufacturer, the Engine Manufacturer or the manufacturer of the relevant replaced Part (as applicable) and is not approved by the Airframe Manufacturer or the Engine Manufacturer for installation in the Aircraft or an Engine (as applicable).
“ Pre-Delivery Procedure ” means the procedure set out in Part 1 of Appendix 7A.
“ Process Agent Power of Attorney (Lessor) ” means a process agent power of attorney substantially in the form of Exhibit G or in such other form requested by Lessor.
“ Process Agent Power of Attorney (Guarantor) ” means a process agent power of attorney substantially in the form of Exhibit H or in such other form requested by Lessor.
“ Prohibited Jurisdiction ” means any jurisdiction which, at any relevant time, is subject to an embargo or sanction or prohibition order (or any similar order or directive) of:
 
(a)	the United Nations Security Council or the European Union; or	
 
(b)	the United States of America,	
any which is applicable to the Lessee or any Indemnitee or the ownership, leasing or financing of the Aircraft or the transactions contemplated by the Transaction Documents and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemptions which would be available and any operations to the extent that they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
25

“ Protocol ” means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November, 2001.
“ Quiet Enjoyment Letter ” means a letter from the Security Trustee to Lessee in the form of Exhibit E.
“ Recognition of Rights Agreement ” means an agreement in form and substance satisfactory to the Lessor and the Security Trustee (acting reasonably) concerning recognition of rights between Lessee, Lessor, the Security Trustee and any other owners, financiers or lessors of engines of the same make and model as the Engines (or any other engines compatible therewith) operated by Lessee.
“ Redelivery ” means the redelivery of the Aircraft by Lessee to Lessor in accordance with Appendix 8.
“ Redelivery Date ” means the date on which Redelivery occurs.
“ Redelivery Location ” has the meaning given to it in Part 1 of Appendix 8.
“ Reference Banks ” means the principal London branches of HSH Nordbank AG, Barclays Bank plc and Citibank N.A.
“ Reinsurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ Rent ” means each amount calculated pursuant to Clause 5.4.
“ Rental Period ” has the meaning given to it in Clause 5.3.
“ Rent Date ” means the first day of each Rental Period.
“ Replacement Part ” means, in relation to any Part to be replaced under this Agreement, a component, furnishing or part (other than a complete Engine) (provided that such component, furnishing or Part is not a PMA Part) that has the same or interchangeable specifications and modification status, is in as good an operating condition as, and a value, utility and remaining life equal to or greater than, the Part to be replaced (assuming such replaced Part was in the condition and repair required by the terms of this Agreement) and which has not accumulated more than 110% of the accumulated calendar time, Flight Hours and Cycles of the Aircraft and in respect of which title is capable of passing to Lessor free and clear of all Security Interests other than Permitted Liens.
“ Return Condition ” has the meaning given to it in Part 1 of Appendix 8.
“ Scheduled Delivery Date ” means the date notified by Lessor to Lessee pursuant to Clause 4.2.
“ Scheduled Delivery Month ” means *****.
“ Scheduled Expiry Date ” means the date falling sixty (60) months after the Delivery Date.
“ Screen Rate ” means the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Bloomberg screen. If the agreed page is replaced or service ceases to be available, Lessor may specify another page or service displaying the appropriate rate after consultation with Lessee.
“ Security Interest ” means any mortgage, charge, pledge, lien, assignment, hypothecation, right of set-off, right of detention or any agreement or arrangement having the effect of creating a security interest other than a Permitted Lien.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
26

“ Security Trustee ” means HSH Nordbank AG, or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ SENEAM ” means Servicios a la Navegación en el Espacio Aéreo Mexicano .
“ State of Incorporation ” means Mexico.
“ State of Registration ” means Mexico or such other jurisdiction as agreed to by Lessor pursuant to the terms of this Agreement.
“ Subsidiary ” means:
 
(a)	in relation to any reference to accounts, any entity whose accounts are consolidated with the accounts of Lessee in accordance with Mexican GAAP or IFRS;	
 
(b)	for any other purpose an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation,	
(and for this purpose “ control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Suitable Replacement Engine ” means an engine:
 
(a)	which is of the same model, and has the same thrust rating as, or is an improved or advanced version of, the Engine it replaces (the “ Replaced Engine ”), approved by the Air Authority for installation and operational use on the Airframe in conjunction with the other Engine;	
 
(b)	(unless otherwise agreed by Lessor, acting reasonably) which shall have undergone no more Engine Performance Restorations since new than the Replaced Engine; and	
 
(c)	which has a value and utility at least equal to the Replaced Engine assuming the Replaced Engine was in the condition and repair required by the terms of this Agreement.	
“ Taxes ” means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) any registration tax in respect of the Aircraft, any withholding taxes, any value added tax or any other tax in respect of added value and any franchise, transfer, sales, use, business, occupation, excise, fuel, carbon, personal property, real property, stamp or other tax imposed by any Government Entity together with any penalties, additions to tax, fines or interest thereon and tax, taxes and taxation shall be construed accordingly.
“ Term ” means the period commencing on the Delivery Date and ending on Expiry Date.
“ Termination Event ” has the meaning assigned to it in Clause 10.1(c).
“ Total Loss ” has the meaning assigned to it in Part 3 of Appendix 7.
“ Transaction Documents ” means this Agreement, the Engine Warranties Agreement, the Airframe Warranty Agreement, the Certificate of Acceptance, the Assignment of Insurances, the Acknowledgement of Assignment of Lease, the Acknowledgement of Assignment of Guarantee, the Guarantee, the Deregistration Power of Attorney, the IDERA, the Process Agent Power of
 
27

Attorney (Lessor), the Process Agent Power of Attorney (Guarantor), the Quiet Enjoyment Letter and any other document which is entered into in connection with any of those agreements and is designated as such by Lessor and Lessee.
“ Wet Lease ” means a lease agreement with respect to the Aircraft:
 
(a)	pursuant to which Lessee agrees to operate the Aircraft under its air operator’s certificate on behalf of a third party airline under terms where all payment, operational (including crew), maintenance, re-delivery and insurance obligations under this Agreement and for the Aircraft remain the responsibility of Lessee and Lessee remains fully liable to comply with all such obligations under or in connection with this Agreement;	
 
(b)	where there is no change in the Habitual Base or the State of Registration;	
 
(c)	pursuant to which it is specifically stated in such wet lease that such agreement is expressly subordinated to the terms of this Agreement, any Mortgage, any Assignment and the interests of Lessor, the Security Trustee and the Lenders in and to the Aircraft, this Agreement, any Mortgage and any Assignment (as the case may be);	
 
(d)	the term of which, when aggregated with (i) any renewals or extensions thereof and (ii) the term of any consecutive such lease agreements (if any and as applicable), does not exceed 6 months unless Lessee shall have procured the consent of Lessor and the Security Trustee (which consent shall not be unreasonably withheld or delayed); and	
 
(e)	pursuant to which the expiry date thereunder occurs on or before the Expiry Date and the termination of this Agreement for any reason whatsoever will automatically result in such wet lease terminating and Lessor or (if applicable) the Security Trustee shall be entitled to promptly repossess and de-register the Aircraft thereafter.	
“ 6 Year Check ” means a 6 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 6 years which shall include all system, zonal and structural tasks with an interval of 6 years or lower, all Flight Hour or Cycles driven tasks which are not due to be carried out at 6 years as a result of utilisation but which for planning and access reasons would be performed at this 6 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
“ 6 Year Check Available Balance ” shall have the meaning ascribed to such term in Part 2 of Appendix 5.
“ 6 Year Check Initial Balance ” shall have the meaning ascribed to such term in Part 2 of Appendix 5.
“ 12 Year Check ” means a 12 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 12 years which shall include all system, zonal and structural tasks with an interval of 12 years or lower, all Flight Hour or Cycles driven tasks which are not due to be carried out at 12 years as a result of utilisation but which for planning and access reasons would be performed at this 12 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
 
28

APPENDIX 1
PART 2
CONSTRUCTION
 
(a)	In this Agreement, unless the contrary intention is stated, a reference to:	
 
 	(i)	each of “ Lessor ”, “ Lessee ”, “ Guarantor ” or any other person includes without prejudice to the provisions of this Agreement any successor in title to it and any permitted assignee or transferee;	
 
 	(ii)	words importing the plural shall include the singular and vice versa;	
 
 	(iii)	any document shall include that document as amended, novated or supplemented;	
 
 	(iv)	a law (1) includes any statute, decree, constitution, regulation, order, judgment or directive of any Government Entity; (2) includes any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (3) includes any judicial or administrative interpretation or application thereof and (4) is a reference to that provision as amended, substituted or re-enacted;	
 
 	(v)	a Clause, or a Recital or an Appendix or an Exhibit is a reference to a Clause, or recital of, or an appendix or an exhibit to, this Agreement;	
 
 	(vi)	an “ amendment ” includes a supplement, novation, restatement or re-enactment and “ amended ” will be construed accordingly;	
 
 	(vii)	an “ approval ” shall be construed as a reference to any approval, consent, authorisation, exemption, permit, licence, registration, filing or enrolment by or with any competent authority;	
 
 	(viii)	an “ authorisation ” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;	
 
 	(ix)	the words “ other ” and “ otherwise ” shall not be construed ejusdem generis with any foregoing words where a wider construction is possible and the words “ including ” and “ in particular ” shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any foregoing words; and	
 
 	(x)	“ indebtedness ” means indebtedness for or in respect of money borrowed or any other obligation for the payment or repayment of money.	
 
 	(xi)	In this Agreement a reference to a period of “ months ” is a reference to a period beginning in one calendar month and ending in the relevant calendar month on the day numerically corresponding to the day of the calendar month in which the period started:	
provided that:
 
 	(i)	if the period started on the last Business Day in a calendar month or if there is no numerically corresponding day, the period shall end on the last Business Day in the relevant calendar month; and	
 
 	(ii)	if the numerically corresponding day is not a Business Day the period shall end on the preceding Business Day;	
 
29

 	(iii)	(and “ month ” and “ monthly ” shall be construed accordingly).	
 
 	(iv)	In this Agreement references to the “ winding up ”, “ dissolution ”, “ examination ” or “ court protection ” of a company or corporation, or the appointment of a “ liquidator ”, “ receiver ”, “ examiner ” or “ administrator ” shall be construed so as to include any equivalent or analogous proceedings or officer under the law of the jurisdiction in which such company or corporation is incorporated or established or any jurisdiction in which such company or corporation carries on business, including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, examination, arrangement, adjustment, protection or relief of debtors.	
 
(b)	The headings in this Agreement are to be ignored in construing this Agreement.	
 
(c)	If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:	
 
 	(i)	the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or	
 
 	(ii)	the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Agreement.	
 
(d)	This Agreement may be executed in counterparts each of which will constitute one and the same document.	
 
(e)	This Agreement and the other Transaction Documents are the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft, and supersede all previous agreements in relation to that leasing.	
 
(f)	The terms of this Agreement may only be amended with the written consent of the parties hereto.	
 
(g)	The rights of Lessor under the Transaction Documents may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
 
30

APPENDIX 2
DESCRIPTION OF AIRCRAFT

AIRCRAFT	  		  		
			
MANUFACTURER:	  		  	Airbus S.A.S.	
			
MODEL:	  		  	A320-200	
			
SERIAL NUMBER:	  		  	3524	
			
MTOW	  		  	77 tons	
			
ENGINES	  		  		
			
MANUFACTURER:	  		  	IAE International Aero Engines AG	
			
ENGINE TYPE:	  		  	V2527E-A5	
			
SERIAL NOS:	  		  	V12957 and V12961	
 
31

APPENDIX 3
PART 1
LESSEE’S REPRESENTATIONS AND WARRANTIES
 
1		
 
(a)	Each of Lessee and the Guarantor is a sociedad anõnima promotora de inversion de capital variable duly organised and validly existing under the laws of the State of Incorporation and has the power to own its assets and carry on its business as it is being conducted and is the holder of all necessary licences required in connection therewith.	
 
(b)	Each of Lessee and the Guarantor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated thereby and all other authorisations, consents, registrations and notifications required in connection with the entry into, performance, validity and enforceability of, the Transaction Documents to which it is a party and the transactions contemplated thereby, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect except for any authorisations, consents, registrations or notifications listed in paragraph 4 of Part 1 of Appendix 4.	
 
(c)	The Transaction Documents to which Lessee and/or the Guarantor is a party constitute each of Lessee’s and Guarantor’s legal, valid and binding obligations enforceable in accordance with the terms thereof, except as enforcement may be limited by bankruptcy, insolvency, reorganisation and other laws generally affecting the rights of creditors.	
 
(d)	The entry into, delivery and performance by each of Lessee and the Guarantor of, and the transactions contemplated by, the Transaction Documents do not and will not:	
 
 	(i)	conflict with any laws binding on Lessee or the Guarantor; or	
 
 	(ii)	conflict with the constitutional documents of Lessee or the Guarantor; or	
 
 	(iii)	conflict with or result in default under any document which is binding upon Lessee or the Guarantor or any of its assets.	
 
(e)	Each of Lessee and the Guarantor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party and neither Lessee, the Guarantor nor any of their respective assets is entitled to any right of immunity and the entry into, delivery and performance of the Transaction Documents constitute private and commercial acts.	
 
(f)		
 
 	(i)	The consolidated financial statements of the Guarantor and the financial statements of Lessee most recently delivered to Lessor have been prepared in accordance with Mexican GAAP or IFRS and fairly represent the financial condition of Lessee and the Guarantor as at the date to which they were drawn up; and	
 
 	(ii)	there has been no material adverse change in the financial condition of Lessee or the Guarantor since the date to which those financial statements were drawn up and the financial and other information furnished by Lessee to Lessor in	
 
32

 	connection with the Transaction Documents does not contain any untrue statement or omit to state facts, the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter to Lessor and all forecasts and opinions contained therein were made on reasonable grounds after due and reasonable enquiry by Lessee or the Guarantor.	
 
(g)	No litigation, arbitration or administrative proceedings are pending or to Lessee’s knowledge threatened against Lessee or the Guarantor which, if adversely determined, could reasonably be expected to have a material adverse effect upon the financial condition of Lessee or the Guarantor or the ability of Lessee or the Guarantor to perform its obligations under the Transaction Documents to which it is a party.	
 
(h)	The obligations of each of Lessee and the Guarantor under the Transaction Documents to which it is a party rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee and the Guarantor, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract.	
 
(i)	No Default has occurred and is continuing or might result from the entry into or performance of the Transaction Documents and no other event has occurred and is continuing which constitutes (or with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or any combination of the foregoing, might constitute) a material default under any document which is binding on Lessee or the Guarantor or any of its assets.	
 
(j)	Save as specified in any qualification as to matters of law in any legal opinion furnished to Lessor pursuant to and in accordance with this Agreement, it is not necessary or advisable under the laws of the State of Registration, the Habitual Base or the State of Incorporation, in order to ensure the validity, effectiveness and enforceability of the Transaction Documents to which Lessee and/or the Guarantor is a party or any Security Interest expressed to be created thereunder or to, establish, perfect or protect the property rights of Lessor in the Aircraft that the Transaction Documents to which Lessee and/or Guarantor is a party or any other instrument relating thereto be filed, registered or recorded or that any other action be taken except for the filing of this Agreement and the Bill of Sale for registration with the Mexican Aeronautics Registry, or if any such filings, registrations, recordings or other actions are necessary or advisable, the same have been effected or will have been effected or will have been applied for on or before the Delivery Date and under all such laws the property rights of Lessor in the Aircraft have been fully established, perfected and protected.	
 
(k)	Neither Lessee nor the Guarantor is in default in the payment of any Taxes of a material amount which have been assessed and demanded of it other than Taxes which Lessee or the Guarantor is contesting in good faith by appropriate proceedings and in respect of which adequate reserves have been made and the non payment of which does not give rise to any material likelihood of the Aircraft being sold, arrested, detained or otherwise lost.	
 
(l)	Neither Lessee nor the Guarantor has engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents and the transactions contemplated thereby.	
 
2	The representations and warranties in Part 1 of this Appendix 3 and under any other Transaction Document will survive the execution of this Agreement and such other Transaction Document and will be deemed to be repeated by Lessee on the Delivery Date and, with respect to those representations and warranties set out in (a) to (f), (h), (i), (j) and (m) above and any representations and warranties contained in the Assignment of Insurances, on each Rent Date with reference to the facts and circumstances then existing.	
 
33

APPENDIX 3
PART 2
LESSOR’S REPRESENTATIONS AND WARRANTIES ON SIGNING
 
1		
 
(a)	Lessor is a company duly incorporated and validly existing under the laws of Ireland and has the power to own its assets and carry on its business as it is now being conducted.	
 
(b)	Lessor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement, the Guarantee and the transactions contemplated by thereby.	
 
(c)	This Agreement and the Guarantee constitute Lessor’s legal, valid and binding obligations enforceable against Lessor in accordance with their terms except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganisation or other similar laws affecting creditors’ rights generally or by equitable principles.	
 
(d)	The entry into and performance by Lessor of, and the transactions contemplated by, this Agreement and the Guarantee do not and will not:	
 
 	(i)	conflict with any laws binding on Lessor; or	
 
 	(ii)	conflict with the constitutional documents of Lessor; or	
 
 	(iii)	conflict with or result in a default under any document which is binding upon Lessor or any of its assets.	
 
(e)	So far as concerns the obligations of Lessor, all authorisations, consents, registrations and notifications required under the laws of Ireland in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, this Agreement and the Guarantee have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect.	
 
(f)	Lessor is subject to civil and commercial law with respect to its obligations under this Agreement and the Guarantee, and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement and the Guarantee by Lessor constitute private and commercial acts.	
 
(g)	Lessor has not engaged the services of a broker or similar representative or agent for the purposes of this Agreement, the Guarantee, or the transactions contemplated thereby.	
 
(h)	Lessor is a resident of Ireland for tax purposes.	
 
34

APPENDIX 3
PART 3
LESSOR’S REPRESENTATIONS AND WARRANTIES ON DELIVERY AND EACH
RENT DATE
 
1		
 
(a)	Lessor is a company duly incorporated and validly existing under the laws of Ireland and has the power to own its assets and carry on its business as it is now being conducted.	
 
(b)	Lessor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by thereby.	
 
(c)	The Transaction Documents to which Lessor is a party constitute Lessor’s legal, valid and binding obligations enforceable against Lessor in accordance with their terms except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganisation or other similar laws affecting creditors’ rights generally or by equitable principles.	
 
(d)	The entry into and performance by Lessor of, and the transactions contemplated by, the Transaction Documents to which it is a party do not and will not:	
 
 	(i)	conflict with any laws binding on Lessor; or	
 
 	(ii)	conflict with the constitutional documents of Lessor; or	
 
 	(iii)	conflict with or result in a default under any document which is binding upon Lessor or any of its assets.	
 
(e)	So far as concerns the obligations of Lessor, all authorisations, consents, registrations and notifications required under the laws of Ireland in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Transaction Documents have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect.	
 
(f)	Lessor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party, and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of the Transaction Documents to which it is a party by Lessor constitute private and commercial acts.	
 
(g)	Lessor has not engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents or the transactions contemplated thereby.	
 
(h)	Lessor is a resident of Ireland for tax purposes.	
 
2	The representations and warranties of Lessor in this Part 3 of Appendix 3 will survive the execution of this Agreement and will be deemed to be repeated at Delivery and (other than the representation and warranty at (h) above) on each Rent Date.	
 
35

APPENDIX 4
PART 1
LESSOR CONDITIONS PRECEDENT
 
1		
 
1.1	Receipt by Lessor from Lessee not less than two (2) Business Days prior to Delivery Date of the following satisfactory in form and substance to Lessor (acting reasonably):	
 
(a)	a corporate certificate of each of Lessee and the Guarantor signed by an authorised officer of the Lessee or the Guarantor (as applicable) to which is attached complete and up to date copies of:	
 
 	(i)	the constitutional documents (estatutos sociales) of Lessee or the Guarantor (as applicable);	
 
 	(ii)	a resolution of the board of directors of Lessee or the Guarantor (as applicable) approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party, resolving that Lessee or the Guarantor (as applicable) enter into the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party;	
 
 	(iii)	any power of attorney of Lessee or the Guarantor (as applicable) approved at the meeting of the directors referred to at (ii) above; and	
 
 	(iv)	an incumbency certificate setting out the names and signatures of the persons specified by Lessee or the Guarantor (as applicable) in (ii) above.	
 
(b)	evidence that an opinion in such form as may be approved by Lessor and the Security Trustee and addressed to Lessor, the Security Trustee and the Lease Manager will be issued on the Delivery Date by:	
 
 	(i)	Lessee’s and Guarantor’s in house legal counsel in the State of Incorporation;	
 
 	(ii)	Ritch Mueller, Lessor’s and the Security Trustee’s legal counsel in the State of Registration; and	
 
 	(iii)	Lessor’s insurance advisers in relation to the Insurances (such opinion to be obtained by Lessor at Lessor’s cost);	
 
(c)	evidence of the issue of each approval, licence and consent which may be required in relation to, or in connection with, the performance by each of Lessee and the Guarantor of any of its obligations under the Transaction Documents (including, without limitation, the remittance by Lessee or the Guarantor (as applicable) to Lessor in US Dollars of all amounts payable under the Transaction Documents);	
 
(d)	copies of Lessee’s concession title, air operator’s certificate and all other licences, certificates and permits required by Lessee or the Guarantor in relation to, or in connection with, the Transaction Documents to which it is a party and the leasing and/or operation (as the case may be) of the Aircraft;	
 
(e)	the latest available consolidated financial statements of the Guarantor and the latest available financial statements of Lessee;	
 
36

(f)	two letters, in the form of Part 1 of Exhibit C and Part 2 of Exhibit C, from Lessee addressed to SENEAM and each other relevant air traffic control authority pursuant to which Lessee authorises the addressee to issue to Lessor, the Lease Manager and the Security Trustee, upon Lessor’s, the Lease Manager’s or the Security Trustee’s request (i) from time to time (subject always to Clause 7.5) in the case of the letter set out in Part 1 of Exhibit C and (ii) upon the occurrence of an Event of Default which is continuing in the case of the letter set out in Part 2 of Exhibit C, a statement of account of all sums due by Lessee to the authority in respect of all aircraft (including, without limitation, the Aircraft) operated by Lessee;	
 
(g)	the IDERA and the Deregistration Power of Attorney;	
 
(h)	the Process Agent Power of Attorney (Lessor) and the Process Agent Power of Attorney (Guarantor) and any other special power of attorney which Lessee or the Guarantor is required to execute and deliver pursuant to the terms of any other Transaction Document;	
 
(i)	all such documentation and information from Lessee and the Guarantor as requested by Lessor in respect of “Know Your Customer” checks, anti-money laundering checks and other similar requirements; and	
 
(j)	a letter from the process agent appointed by Lessee and Guarantor under each Transaction Document to accept service of process, accepting that appointment.	
 
1.2	Receipt by Lessor from Lessee on or prior to the Delivery Date (or in the case of the Deposit, the balance of the Cash Deposit at least five (5) days prior to the Delivery Date) of the following satisfactory in form and substance to Lessor:	
 
(a)	the Transaction Documents to which Lessee or the Guarantor is a party duly executed by Lessee or the Guarantor and the other parties thereto (other than Lessor), it being acknowledged by each of Lessee and Lessor that Lessor will use all reasonable endeavours, subject to satisfaction of the conditions precedent contained in the Loan Agreement to arrange for the Security Trustee to execute the Transaction Documents to which the Security Trustee is a party;	
 
(b)	a signed copy of each opinion referred to it at 1.1(b) above;	
 
(c)	all sums due to Lessor under the Transaction Documents on or before the Delivery Date including, without limitation, the Deposit and the first payment of Rent;	
 
(d)	certificates of insurance and reinsurance and an undertaking from Lessee’s insurance and reinsurance brokers evidencing compliance with the provisions of this Agreement as to Insurances and Reinsurances;	
 
(e)	the Certificate of Airworthiness for Export for the Aircraft issued by the Irish Aviation Authority, the temporary Certificate of Airworthiness for the Aircraft issued by the Air Authority and the temporary registration marks for the Aircraft issued by the Air Authority (to the extent available); and	
 
(f)	such other documents as Lessor may reasonably request.	
 
1.3	The representations and warranties of Lessee under Part 1 of Appendix 3 of this Agreement and the representations and warranties of the Guarantor in any Transaction Document to which it is a party are correct and would be correct if repeated at Delivery.	
 
1.4	Receipt by Lessor of written confirmation from the Security Trustee that the Transaction Documents to which Lessee and/or the Guarantor is a party are in form and substance satisfactory to the Lenders and accordingly the Aircraft will continue to be financed by such Lenders on terms and conditions satisfactory to Lessor and such confirmation being in full force and effect on the Delivery Date.	
 
37

1.5	Lessor having reviewed the Agreed Maintenance Programme under which it is proposed the Aircraft will be maintained. For the purposes of such review, Lessee shall prior to the Delivery Date provide Lessor with all necessary information and documents as Lessor may reasonably require with respect to the Agreed Maintenance Programme.	
 
2	The conditions specified in this Part 1 of Appendix 4 are for the benefit of Lessor and may be waived or deferred in whole or in part and with or without conditions by Lessor.	
 
3	If any original document or certified copy of any document specified in Part 1 of this Appendix 4 is provided to Lessor by facsimile copy or pdf copy on or prior to Delivery, Lessee shall provide the original of each such document to Lessor as soon as reasonably possible after Delivery but in any event no later than ten (10) Business Days after Delivery.	
 
4	As soon as reasonably practicable after Delivery, but in any event not later than the relevant day specified in column two below, Lessee shall provide the following to Lessor:	

Conditions Subsequent	  	Time Period	
			
(a)	    	A search certificate from the International Registry showing compliance by Lessee with the provisions at paragraph 4.4(b) of Appendix 6	  	Ten (10) Business Days	
			
(b)	    	Evidence that filing of this Agreement and the Bill of Sale and the Aircraft has been made on the Delivery Date with the Mexican Aeronautics Registry under the laws of the State of Registration	  	On closing	
			
(c)	    	Evidence that all other filings, registrations, recordings and other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of the Transaction Documents, the Mortgage and the Assignment and any Security Interest expressed to be created thereunder and to protect the property rights of Lessor, and the Security Interests of the Security Trustee and the Lenders in the Aircraft or any Part.	  	Ten (10) Business Days	
			
(d)	    	Certificate of Import stamped by relevant Government Entity in Mexico evidencing that any required import licence, and all customs formalities, relating to the import of the Aircraft into the State of Registration will be complied with and that the import of the Aircraft into the State of Registration is exempt from Taxes	  	Ten (10) Business Days	
			
(e)	    	Certificate of registral status (certificado de estado registral) issued by the Mexican Aeronautics Registry, evidencing registration of the items provided in (b) and (c) above.	  	Thirty (30) days	
			
(f)	    	Permanent Certificate of Airworthiness issued by the Air Authority	  	Ten (10) Business Days	
 
38

					
Conditions Subsequent	  	Time Period	
			
(g)	    	Permanent Certificate of Registration issued by the Air Authority	  	One hundred and fifty (150) days	
			
(h)	    	Inclusion of the Aircraft in Lessee’s Air Operator’s Certificate	  	Fifteen (15) days	
			
(i)	    	Bringdown opinion of Ritch Mueller, Lessor’s and the Security Trustee’s legal counsel in the State of Registration, concerning relevant filings at the DGAC and International Registry	  	Ten (10) Business Days	
 
39

APPENDIX 4
PART 2
LESSEE CONDITIONS PRECEDENT
 
1		
 
1.1	Receipt by Lessee from Lessor not less than two (2) Business Days prior to the Delivery Date of the following satisfactory in form and substance to Lessee:	
 
(a)	a copy of the constitutional documents of Lessor certified by an officer of Lessor to be true, complete and up to date;	
 
(b)	a copy of a resolution of the board of directors of Lessor approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessor is a party, resolving that Lessor enter into the Transaction Documents to which Lessor is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessor is a party.	
 
1.2	Receipt by Lessee from Lessor on or prior to the Delivery Date of:	
 
(a)	the Transaction Documents to which Lessor is a party (other than this Agreement) executed by Lessor;	
 
(b)	the Quiet Enjoyment Letter; and	
 
(c)	evidence that an opinion in such form as may be approved by Lessee (acting reasonably) and addressed to Lessee will be issued on the Delivery Date by McCann FitzGerald, Lessor’s counsel in Ireland, as to the due execution and enforceability of this Agreement.	
 
1.3	The representations and warranties of Lessor in Part 2 of Appendix 3 of this Agreement are correct and would be correct if repeated at Delivery.	
 
1.4	Following completion of the Pre-Delivery Procedure, Lessee shall have ascertained that the Aircraft meets the Delivery Condition.	
 
2	The conditions precedent in this Part 2 of Appendix 4 are for the benefit of Lessee and may be waived or deferred in whole or in part and with or without conditions by Lessee.	
 
40

APPENDIX 5
PART 1
ADDITIONAL PAYMENT PROVISIONS
 
1	Payments	
All payments by Lessee to Lessor under the Transaction Documents will be made for value on the due dates in Dollars and in same day funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of international payments in Dollars by telegraphic transfer to such account as Lessor may advise Lessee in writing from time to time but no later than two (2) Business Days prior to the date on which any payment is due by Lessee under any Transaction Document.
 
2	Letter of Credit Requirements	
 
(a)	Each Letter of Credit shall:	
 
 	(i)	be irrevocable and issued and payable by a bank acceptable to Lessor and the Security Trustee and in form and substance acceptable to Lessor and the Security Trustee and, if Lessor requests (acting reasonably), confirmed by the London or New York branch of a major international bank acceptable to Lessor and the Security Trustee (each acting reasonably) as security for all payment obligations of Lessee to Lessor under the Transaction Documents (including damages);	
 
 	(ii)	remain in full force and effect and available for drawing by Lessor upon first demand at any time or number of times until the earlier of: (A) sixty (60) days after the Scheduled Expiry Date; and (B) the date on which Lessee has redelivered the Aircraft to Lessor pursuant to and in accordance with this Agreement and complied with all of its obligations under the Transaction Documents (the “ Required LC Expiry Date ”);	
 
(b)	With the prior written consent of Lessor and the Security Trustee (such consent not to be unreasonably withheld or delayed), any Letter of Credit may have a validity period or periods ending prior to the Required LC Expiry Date, provided that (i) such Letter of Credit shall, in each case, be renewed and delivered to Lessor not later than ten (10) Business Days prior to its expiry; and (ii) such Letter of Credit shall remain in force at all times up to and including the Required LC Expiry Date.	
 
(c)	If at any time during the Term, Lessor determines that the current issuing or confirming bank of the Letter of Credit is no longer an acceptable issuing or confirming bank (whether by virtue of a material adverse change in its financial condition or for any other reason) Lessee shall promptly procure that, such Letter of Credit is replaced either by a Letter of Credit issued by another bank acceptable to Lessor and the Security Trustee (each acting reasonably) and (if deemed appropriate by Lessor or the Security Trustee) confirmed by another bank acceptable to Lessor and Security Trustee or by an amount in cash equal to the Deposit (assuming no accrued interest) upon the terms and subject to the conditions of Clause 5 of this Agreement.	
 
3	Value Added Tax	
Lessee will pay to Lessor or the applicable Tax authority the amount of any value added tax, any sales or turnover tax, imposition or levy of a like nature (together “ VAT ”) chargeable in respect of any supply for VAT purposes under any Transaction Document
 
41

and each amount stated as payable by Lessee under any Transaction Document is exclusive of VAT (if any) and is accordingly to be construed as a reference to that amount plus any VAT in respect of it.
 
4	Currency and Currency Indemnity:	
 
(a)	If Lessor receives an amount in respect of Lessee’s liability under any Transaction Document or if such liability is converted into a claim, proof, judgment or order in a currency other than the currency (the “ contractual currency ”) in which the amount is expressed to be payable under any Transaction Document:	
 
 	(i)	Lessee will indemnify Lessor as an independent obligation against any loss arising out of or as a result of such conversion;	
 
 	(ii)	if the amount received by Lessor, when converted into the contractual currency (at the market rate at which Lessor is able on the relevant date to purchase the contractual currency in London or at its option New York with that other currency) is less than the amount owed in the contractual currency, Lessee will, forthwith on demand, pay to Lessor an amount in the contractual currency equal to the deficit; and	
 
 	(iii)	Lessee will pay to Lessor on demand any exchange costs and Taxes actually incurred by Lessor in connection with the conversion.	
 
(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under any Transaction Document in a currency other than that in which it is expressed to be payable.	
 
5	Certificates	
Save where expressly provided otherwise in the Transaction Documents, any certificate or determination made in accordance with the relevant provisions (if any) of the Transaction Documents by Lessor as to any rate of interest or as to any other amount payable under the Transaction Documents will, in the absence of manifest error, be conclusive and binding on Lessee.
 
6	Information	
 
(a)	If Lessee is required by any applicable law, or by any third party, to deliver any report or return in connection with any Taxes relating to the Aircraft or the Transaction Documents, Lessee will complete the same within any applicable time period and in a manner satisfactory to Lessor and, if relevant, will state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee will, on request supply a copy of the report or return to Lessor; and	
 
(b)	Lessee will, on request but not more frequently than once annually unless a Default has occurred and is continuing, furnish to Lessor evidence satisfactory to Lessor, with respect to the Aircraft, that all Taxes and charges incurred by Lessee including without limitation all withholdings and payments due to SENEAM or any other relevant air traffic control or airport authorities, have been paid and discharged in accordance with the terms governing payment of such amounts.	
 
42

APPENDIX 5
PART 2
PAYMENT OF MAINTENANCE RESERVES
 
1	Amount	
 
1.1	Lessee shall pay the following amounts (“ Maintenance Reserves ”) to Lessor (or to its order) by reference to each calendar month or part thereof following the Delivery Date during the Term on the tenth (10th) day following the end of that calendar month:	
 
(a)	in respect of the Airframe:	
 
 	(i)	***** or part thereof (the “ Airframe 6 Year Maintenance Reserves ”); and	
 
 	(ii)	***** or part thereof (the “ Airframe 12 Year Maintenance Reserves ”);	
 
(b)	in respect of each Engine, ***** (or part thereof) operated by that Engine during any calendar month (“ Engine Maintenance Reserves ”);	
 
(c)	in respect of the Engine LLPs within each Engine, ***** accomplished by that Engine during that calendar month (together “ Engine LLP Maintenance Reserves ”). The Engine LLP Maintenance Reserves are an aggregate amount of all Engine LLP’s, assume a ***** and will be divided and held in sub accounts for each Engine LLP as per the Attachment 1 to Part 2 of this Appendix 5.	
 
(d)	in respect of the APU, ***** (or part thereof) accomplished by the APU during that calendar month (“ APU Maintenance Reserves ”); and	
 
(e)	in respect of the Landing Gear, ***** or part thereof (“ Landing Gear Maintenance Reserves ”).	
 
2	Adjustment	
 
2.1	The amount of the Maintenance Reserves in paragraph 1 are specified in January 2011 Dollars and will be adjusted by the Lessor on 1 January of each year (or in the case of the Engine LLP Maintenance Reserves at such later date as the Engine Manufacturer releases its annual Engine LLP prices, should the new annual prices not be available on 1 January of the relevant year) after the date of this Agreement as follows:	
 
(a)	the amount of the Maintenance Reserves (other than the Engine LLP Maintenance Reserves) shall be increased for inflation by a fixed amount of *****. The Engine LLP Maintenance Reserves shall be subject to increases in the relevant manufacturer’s catalogue price;	
 
(b)	if there is any variation, based upon the information provided in the monthly status reports (supported, if requested by Lessor, by the flight logbook entries or aircraft systems readout) delivered pursuant to paragraph 2.2(c) of Appendix 6 for the preceding month from (i) the assumed Flight Hour to Cycle ratio of 2.0:1 (the “ Assumed Ratio ”) or (ii) the assumed engine derate of ***** (the “ Assumed Derate ”), the amount of the Engine Maintenance Reserves payable shall be adjusted in accordance with the applicable table set out in attachment 2 to part 2 of this Appendix 5.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
43

(c)	if Lessee does not issue a monthly status report pursuant to paragraph 2.2(c) of Appendix 6, Lessor will assume a zero derate and Flight Hour to Flight Cycle ratio of 1:1.	
 
2.2	The amount of the Maintenance Reserves in paragraph 1 may be adjusted at any time by an amount determined by Lessor, if (i) any major change is made to the Approved Maintenance Programme or the operating procedures relating to the Aircraft; (ii) there is, in the reasonable opinion of Lessor, any material change in the operating environment of Lessee in which the Aircraft is operated; or (iii) if the certified thrust of the Engines (judged at Delivery) is increased through modification, upgrades or otherwise.	
 
3	Starting Balances	
 
3.1	As at Delivery, the balance of accrued maintenance reserve payments attributable to the Eligible Maintenance Events set out below is as follows:	

Account	 	Amount	
6 Year Check	 	*****
 
“ 6 Year Check Initial Balance ”.	
		
APU Performance Restoration	 	*****
 
“ APU Initial Balance ”.	
 
3.2	The amount calculated by Lessor to be the sum of the 6 Year Check Initial Balance and the accumulated balance of Airframe 6 Year Maintenance Reserves held by the Lessor at any given time shall be referred to as the “ 6 Year Check Available Balance ”.	
 
3.3	The amount calculated by Lessor to be the sum of the APU Initial Balance and the accumulated balance of APU Maintenance Reserves held by the Lessor at any given time shall be referred to as the “ APU Available Balance ”.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
44

Attachment 1
Engine LLP Maintenance Reserves Sub Accounts

Item	  	P/N	  	Rate per FC in USD	
			
Stage 1 (fan) disk	  	*****	  	*****	
			
Stub shaft (LPC)	  	*****	  	*****	
			
Stage 1.5 to 2.5 disk (LPC)	  	*****	  	*****	
			
Stage 3 to 8 disk (HPC)	  	*****	  	*****	
			
Stage 9 to 12 disk (HPC)	  	*****	  	*****	
			
Rear Shaft (HPC)	  	*****	  	*****	
			
Rear rotating seal (HPC)	  	*****	  	*****	
			
Stage 1 HPT disk	  	*****	  	*****	
			
Stage 1 HPT inner seal	  	*****	  	*****	
			
Stage 1 HPT outer seal	  	*****	  	*****	
			
Stage 2 HPT seal	  	*****	  	*****	
			
Stage 2 HPT disk	  	*****	  	*****	
			
Stage 2 HPT plate	  	*****	  	*****	
			
Stage 3 LPT disk	  	*****	  	*****	
			
Stage 4 LPT disk	  	*****	  	*****	
			
Stage 5 LPT disk	  	*****	  	*****	
			
Stage 6 LPT disk	  	*****	  	*****	
			
Stage 7 LPT disk	  	*****	  	*****	
			
Stage 3 LPT seal	  	*****	  	*****	
			
Stage 4 LPT seal	  	*****	  	*****	
			
Stage 5 LPT seal	  	*****	  	*****	
			
Stage 6 LPT inner seal	  	*****	  	*****	
			
Stage 6 LPT seal	  	*****	  	*****	
			
Stage 7 LPT seal	  	*****	  	*****	
			
LPT shaft	  	*****	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
45

Attachment 2
Engine Maintenance Reserve Adjustment for changes to Assumed Ratio

Actual Flight Hour to Cycle ratio	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
First Engine Maintenance Reserve	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
Engine Derate Adjustment Table

Engine Derate %	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
Adjustment Factors	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
46

APPENDIX 5
PART 3
REFUND OF MAINTENANCE RESERVES
 
1	Eligible Maintenance Events	
 
1.1	Lessor shall have no obligation to distribute the Maintenance Reserves (or the 6 Year Check Initial Balance and/or the APU Initial Balance, as the case may be) accumulated pursuant to Part 2 of this Appendix 5 other than in respect of the following events (each an “ Eligible Maintenance Event ”), in each case, if approved in advance by Lessor as specified in paragraph 1.2 below:	
 
(a)	with respect to the 6 Year Check Available Balance, upon the accomplishment of the first 6 Year Check relating to the Airframe in accordance with the MPD (it being agreed that the 6 Year Check Initial Balance shall only be made available to Lessee if the Airframe 6 Year Maintenance Reserves have been utilised in full first with respect to the first 6 Year Check);	
 
(b)	with respect to the Landing Gear Maintenance Reserves, upon the accomplishment of any Landing Gear Overhaul in accordance with the MPD;	
 
(c)	with respect to the Engine Maintenance Reserves, upon the accomplishment of the Engine Performance Restoration on the relevant Engine;	
 
(d)	with respect to the Engine LLP Maintenance Reserves for an Engine LLP, upon the replacement of that Engine LLP in accordance with the Engine Manufacturer limits; and	
 
(e)	with respect to the APU Available Balance, upon accomplishment of APU Performance Restoration (it being agreed that APU Initial Balance shall only be made available to Lessee if the APU Maintenance Reserves have been utilised in full first with respect to an APU Performance Restoration).	
 
1.2	Lessee shall have obtained written approval from Lessor (which shall not be unreasonably withheld or delayed) in respect of the workscope for the relevant Eligible Maintenance Event prior to the commencement of the relevant Eligible Maintenance Event.	
 
1.3	Subject to paragraph 2.5, any remaining balance of the Maintenance Reserves on the expiry of the Term (unless the Term has terminated as a result of a Total Loss of the Aircraft and Lessor has received the Agreed Value) shall be retained by Lessor as its sole property.	
 
2	Release of Maintenance Reserves	
 
2.1		
 
(a)	Lessee will provide Lessor with:	
 
 	(i)	an invoice signed by Lessee in an amount equal to the relevant Maintenance Reserves to be refunded to Lessee; and	
 
 	(ii)	written confirmation from the Agreed Maintenance Performer within sixty (60) days after the completion of the relevant Eligible Maintenance Event that such Eligible Maintenance Event has been completed and paid for in full, accompanied by such other supporting documentation and invoices evidencing the performance	
 
47

 	of the relevant work and receipt of payment in relation to the same (including but not limited to, invoices evidencing the cost of replacement of any Engine LLPs), as Lessor may reasonably request in writing within fifteen (15) Business Days following receipt of an invoice from Lessee pursuant to paragraph (i) above, provided, however, that in the case of the performance of any Engine Performance Restoration, the supporting documentation to be provided to Lessor hereunder shall be limited to a duly completed FAA Form 337 and last shop visit report attached to the relevant invoice (a “ Confirmation ”).	
 
(b)	Other than as specifically provided in paragraph 2.3, the amount payable by Lessor to Lessee (and Lessee’s entitlement to claim the same from Lessor) with respect to any Eligible Maintenance Event shall not exceed the then current balance of Maintenance Reserves (or in the case of an Airframe 6 Year Check and a APU Performance Restoration, the 6 Year Check Available Balance and the APU Available Balance respectively) held by Lessor for the account of such Eligible Maintenance Event.	
 
2.2	Provided that no Default has occurred and is continuing, Lessor shall promptly (and in any event within fifteen (15) Business Days) following the receipt of a Confirmation make payment (such payment date, the “ Reserve Payment Date ”) in accordance with paragraph 2.3 below to Lessee, or upon receipt of written instructions from Lessee, to the Agreed Maintenance Performer accomplishing the Eligible Maintenance Event.	
2.3
 
(a)	If during the Term:	
 
 	(i)	the Airframe undergoes a 6 Year Check, Lessor will on the relevant Reserve Payment Date pay the full amount, if any, of the Airframe 6 Year Check Maintenance Reserves held by Lessor as at the time of the completion of the 6 Year Check, provided that, Lessee is entitled to claim the full amount of the Airframe 6 Year Check Maintenance Reserves at such time;	
 
 	(ii)	an Engine undergoes its first Engine Performance Restoration and the actual cost thereof exceeds the then current balance of Engine Maintenance Reserves for that Engine (and provided that Lessee would be entitled to claim the full amount of such cost from such Engine Maintenance Reserves, but for such shortfall), Lessor shall contribute towards such shortfall provided, however, that Lessor’s liability under this paragraph 2.3(a)(ii) shall not exceed *****;	
 
 	(iii)	the APU undergoes an APU Performance Restoration, Lessor will on the relevant Reserve Payment Date pay the full amount of the APU Maintenance Reserves held by Lessor as at the time of completion of the APU Performance Restoration, provided that, Lessee is entitled to claim the full amount of the APU Performance Restoration Reserves at such time; and	
 
 	(iv)	an Engine LLP is replaced pursuant to and in accordance with this Agreement, Lessor will on the relevant Reserve Payment Date pay the lesser of the amount of the Engine LLP Maintenance Reserves held by Lessor for that Engine LLP at the date of its replacement and the amount specified in the Engine Manufacturer’s catalogue price list for that Engine LLP at such time and should there be a shortfall between the Engine LLP Maintenance Reserves held by Lessor for that Engine LLP and the amount specified in the Manufacturer’s catalogue price list, in each case at the relevant time (and provided that Lessee would be entitled to claim the full amount such cost from the applicable Engine LLP Maintenance Reserves, but for such shortfall), Lessor shall contribute towards the shortfall provided, however, that Lessor’s aggregate liability for all Engine LLPs under this paragraph 2.3 (a)(iv) shall not exceed *****,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
48

provided always that in no event shall payment be made in respect of:
 
 	(A)	components unless they are scheduled to be overhauled at that check and their lives are fully restored (and if this is not the case, a pro-rating payment adjustment will be made in respect of overhauls or replacements that are made before the relevant component scheduled life limit);	
 
 	(B)	any maintenance resulting from design faults or damage covered by warranty or caused by accidental damage, (subject as provided below) foreign objects, faulty maintenance, abnormal wear and tear, operational mishandling or line related quick engine change (QEC) kit maintenance (unless such maintenance is carried out at a different facility to the relevant Airframe check) or LRU component maintenance;	
 
 	(C)	any cost items which are the costs of removal, reinstallation, transportation or are exchange or similar costs or charges;	
 
 	(D)	any cost which is in excess of the relevant manufacturer’s list price for the relevant parts or maintenance work (other than handling charges); or	
 
 	(E)	any maintenance, overhaul, renewal, replacement or repair which is reimbursable out of any insurance claim,	
(collectively, “ Excluded Maintenance Events ”). If any Engine suffers any foreign objects damage and as a result an Engine Performance Restoration is required to be carried out on that Engine, then Lessee shall provide Lessor with full details of the foreign object damage and if Lessor (acting reasonably) agrees that the performance of an Engine Performance Restoration on the Engine is advisable and will not impact adversely on the Engine or the future marketability of the Aircraft, then any such Engine Performance Restoration shall not be an Excluded Maintenance Event.
 
(b)	For the avoidance of doubt, any remaining 6 year Check Initial Balance and APU Initial Balance will not be taken into account when calculating the amounts payable by Lessor pursuant to paragraphs (a)(i) and (a)(iii) above.	
 
(c)	If the documentation in paragraphs 2.1(a) and (b) above, as applicable, relating to the completion of an Eligible Maintenance Event has been received by Lessor on or before the expiry of the Term and Lessor requests other supporting documentation evidencing the performance of the relevant work or Lessee has notified Lessor prior to the expiry of the Term that an Eligible Maintenance Event has been completed and has not yet provided such documentation to Lessor, Lessee shall be entitled to receive payment in respect of such Eligible Maintenance Event at any time after the expiry of the Term.	
 
2.4	If during the Term	
 
(a)	the Aircraft suffers Total Loss and the Agreed Value is paid to Lessor, Lessor will pay an amount equal to the balance of Maintenance Reserves then held by Lessor to Lessee;	
 
(b)	an Engine suffers Engine Loss and is replaced by a Suitable Replacement Engine, title to which Lessor obtains in accordance with paragraph 3.3 of Appendix 6, Lessor shall pay to Lessee and amount equal to the balance of Engine Maintenance Reserves for such Engine, provided that the Suitable Replacement Engine is fresh out of Engine Performance Restoration shop visit when it is installed on the Airframe. If such Suitable Replacement Engine is not fresh out of Engine Performance Restoration when it is installed on the Airframe Lessor shall pay the Lessee an amount calculated as follows	
 
49

*****
Where
*****.
 
(c)	For the avoidance of doubt, any remaining 6 Year Check Initial Balance and APU Initial Balance will not be taken into account when calculating the amounts payable by Lessor pursuant to paragraphs (a) and (b) above.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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APPENDIX 6
LESSEE’S COVENANTS
 
1	GENERAL COVENANTS	
 
1.1	Information	
Lessee will:
 
(a)	notify Lessor forthwith of the occurrence of any Event of Default under this Agreement and, upon the written request of Lessor, confirm to it that, save as specified in such confirmation or as previously notified no such Event of Default has occurred and is continuing hereunder; and	
 
(b)	furnish to Lessor:	
 
 	(i)	as soon as possible, but in any event not later than ninety (90) days after the last day of each financial quarter, the consolidated financial statements for the Guarantor and the financial statements for Lessee prepared by management for the financial quarter ending on such day;	
 
 	(ii)	as soon as available but not in any event later than one hundred and twenty (120) days after the last day of each financial year of Lessee, the audited consolidated balance sheet of the Guarantor as of such day and the audited balance sheet of Lessee as of such day and the audited consolidated profit and loss statement of the Guarantor and the audited profit and loss statement of Lessee, in each case, for the year ending on such day (in Spanish with an English language copy to be provided within forty five (45) days thereafter),	
unless in the case of (i) and (ii) above the same are available free of charge on Lessee’s or the Guarantor’s website notified in writing by Lessee to Lessor and provided further that if there is a successful public offering of the Guarantor’s shares, then Lessee shall only provide the information at (i) above upon receipt of a request to do so from Lessor;
 
 	(iii)	at the same time as it is issued to the creditors generally of Lessee or the Guarantor, a copy of each notice or circular issued to Lessee’s or the Guarantor’s creditors generally; and	
 
 	(iv)	on request from time to time such other information regarding Lessee and/or the Guarantor as Lessor may reasonably request.	
 
1.2	General	
Lessee will:
 
(a)	not make any substantial change in the nature of the business (it being agreed that an extension of Lessee’s route network is not a change in the nature of its business for this purpose) in which it is engaged, will preserve its existence (other than in connection with a solvent reconstruction the terms of which have been approved by Lessor, such approval not to be unreasonably withheld), and will conduct its business in accordance with all applicable laws;	
 
(b)	ensure that no change will occur in the Habitual Base or the State of Registration of the Aircraft without the prior written consent of Lessor;	
 
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(c)	procure that no person lawfully claiming by or through Lessee or which is an Affiliate or Subsidiary of Lessee or in respect of whom Lessee may exercise control whether as a matter of law or contract or otherwise, will act in any manner inconsistent with its obligations under this Agreement and that all persons will comply with those obligations as if references to “Lessee” included a separate reference to those persons;	
 
(d)	ensure that its obligations under the Transaction Documents rank and will at all times rank at least pari passu with all its other present and future unsecured indebtedness (save for obligations which are mandatorily preferred by operation of law and not by contract);	
 
(e)	Lessee agrees from time to time to do and perform such other and further acts and execute and deliver any and such other instruments as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor under, and to carry out and effect the intent and purposes of, the Transaction Documents; and	
 
(f)	if, during the Term, Lessee’s insurer agrees to provide an assignment of reinsurances to the lessor or financier of any other aircraft operated by Lessee, promptly notify Lessor in writing of such circumstances and shall use commercially reasonable efforts to procure that such insurer provides an assignment of reinsurances on no less favourable terms to Lessor or Security Trustee.	
 
1.3	Authorisations	
Lessee shall:
 
(a)	obtain and maintain in full force and effect all authorisations for the time being required by the laws or regulations of the State of Registration and any other relevant jurisdiction to enable Lessee to perform its obligations under the Transaction Documents; and	
 
(b)	obtain and promptly renew from time to time, and will promptly, upon written request, deliver to Lessor copies of all and any authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation as may be necessary or in Lessor’s opinion (acting reasonably) desirable to ensure the validity, enforceability or priority of Lessee’s and the Guarantor’s liabilities and obligations, and (to the extent within Lessee’s power and control) Lessor’s and the Security Trustee’s rights, under the Transaction Documents.	
 
2	OPERATIONAL COVENANTS	
 
2.1	Lawful and Safe Operation	
Lessee will:
 
(a)	not use the Aircraft or permit the Aircraft to be used:	
 
 	(i)	in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Air Authority or any applicable law; or	
 
 	(ii)	for any purpose for which the Aircraft is not designed or reasonably suitable; or	
 
 	(iii)	in a manner not covered by Insurances required under this Agreement (except for Emergency Operations);	
 
(b)	ensure that the crew, mechanics and engineers employed in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licences and/or approvals required by the Air Authority and applicable law;	
 
52

(c)	procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorised by the Air Authority and applicable law;	
 
(d)	not use the Aircraft nor permit the Aircraft to be used for the carriage of:	
 
 	(i)	whole animals living or dead except in the cargo compartments according to the International Air Transport Association regulations, and except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal; or	
 
 	(ii)	acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assemblies or components, except as permitted for passenger aircraft under the “Restriction of Goods” schedule issued by International Air Transport Association from time to time and provided that all the requirements for packaging or otherwise contained therein are fulfilled; or	
 
 	(iii)	any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or	
 
 	(iv)	any illegal item or substance;	
 
(e)	not utilise the Aircraft nor permit the Aircraft to be utilised for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
(f)	except for Emergency Operations, not cause or permit the Aircraft to proceed to, or remain at, any location in a Prohibited Jurisdiction or which is for the time being the subject of a prohibition order (or any similar order or directive) by:	
 
 	(i)	any Government Entity of the State of Registration and/or the Habitual Base; or	
 
 	(ii)	any Government Entity of the country in which such location is situated; or	
 
 	(iii)	any Government Entity having jurisdiction over Lessee, Lessor, the Security Trustee, the Lenders or the Aircraft	
and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemption which would be available and any operations to the extent that they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction;
 
(g)	obtain and maintain in full force all authorisations required for the use and operation of the Aircraft for the time being, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Transaction Documents.	
 
2.2	Information	
Lessee will:
 
(a)	subject to paragraph (c) below, keep Lessor informed as to current serial numbers of the Engines, the current serial number of the APU, any engine or auxiliary power unit installed on the Aircraft and the location of any Engine or the APU removed from the Aircraft and the reasons for it being removed;	
 
53

(b)	subject to paragraph (c) below, promptly furnish to Lessor all information Lessor from time to time reasonably requests regarding the Aircraft, any Engine, the APU or any Part, its use, location and condition including, without limitation, the hours available on the Aircraft, the APU, the Landing Gear and any Engine until the next scheduled check, inspection, overhaul or shop visit, as the case may be;	
 
(c)	within ten (10) days after the end of each calendar month during the Term, provide Lessor with a monthly utilisation report on the Aircraft and each Engine in the form specified in Exhibit F or such other form as may be required from time to time by Lessor (and the inclusion in such monthly report of the information referred to in paragraphs (a) and (b) above shall satisfy Lessee’s obligations under those paragraphs); and	
 
(d)	give Lessor not less than sixty (60) days written notice as to the time and location of all scheduled C Checks, Major Checks, any Engine Performance Restoration, any APU Performance Restoration and any Landing Gear Overhaul and prompt prior notice of any non-scheduled or unplanned Engine Performance Restoration, APU Performance Restoration and any Landing Gear Overhaul.	
 
2.3	Inspection:	
 
(a)	Lessor, the Security Trustee, the Lease Manager and any person designated by Lessor, the Security Trustee or the Lease Manager (the “ Inspecting Parties ”) may at any time visit, inspect, examine and survey the Aircraft, any Engine, any Part or the Aircraft Documents and for such purpose may, subject to any applicable insurance requirements and Air Authority regulation, travel on the flight deck as observer;	
 
(b)	Lessee will pay to Lessor on demand all reasonable out-of-pocket expenses incurred by the Inspecting Parties in connection with any such visit, inspection or survey where there exists a Default in respect of Lessee’s maintenance covenants under this Appendix 6 or where the inspection is required following the occurrence of an Event of Default; and	
 
(c)	no Inspecting Party will have a duty or liability to make or assume liability arising out of, any such visit, inspection or survey and so long as no Default has occurred and is continuing, no Inspecting Party will exercise such right more than once annually (unless a shop visit or check has occurred in which case any Inspecting Party may inspect the Aircraft and the Aircraft Documents after any such shop visit or check) other than at reasonable times and on reasonable notice and so as not to disrupt the normal commercial operations of Lessee.	
 
2.4	Records	
Lessee will:
 
(a)	procure that accurate, complete and current records of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation) are kept in accordance with the requirements of the Air Authority, the FAA and EASA; keep the records in such manner as the Air Authority, the FAA and EASA may from time to time require, and ensure that they comply with the recommendations of the manufacturers of the Aircraft, any Engine or any Part. The records will form part of the Aircraft Documents;	
 
(b)	procure access to a revision service in respect of, and will maintain with appropriate revisions in English, all Aircraft Documents, records, logs, and other materials required by applicable laws and best practice of major international air transport operators in respect of the Aircraft;	
 
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(c)	at Delivery and Redelivery and at each time that the Agreed Maintenance Programme is amended, maintain a cross reference list between all Maintenance Planning Document tasks and the tasks in the Agreed Maintenance Programme; and	
 
(d)	on request (but not more frequently than once a year provided no Default has occurred and is continuing) permit Lessor, the Lease Manager and any other person designated by Lessor to electronically scan the Aircraft Documents.	
 
3	MAINTENANCE COVENANTS	
 
3.1	Maintenance and Repair	
Lessee will maintain and repair the Aircraft in the same manner as similar Fleet Aircraft without in any way materially discriminating against the Aircraft and will in addition:
 
(a)	keep the Aircraft airworthy in all respects (except when undergoing maintenance repair, overhaul or modification pursuant to and in accordance with the provisions of this Agreement where a certificate of release to service will return the Aircraft to an airworthy condition) and in good repair and condition;	
 
(b)	not make any major change to the Agreed Maintenance Programme or the schedule of the Agreed Maintenance Programme unless:	
 
 	(i)	required by the Air Authority or the Manufacturer; or	
 
 	(ii)	consented to by Lessor, such consent not to be unreasonably withheld;	
 
(c)	maintain the Aircraft in accordance with any requirements and recommendations of the Manufacturers and the Agreed Maintenance Programme through the Agreed Maintenance Performer and perform (at the respective intervals provided in the Agreed Maintenance Programme) all checks on a ***** (no sampling permitted);	
 
(d)	maintain and certify the Aircraft at an EASA and FAA approved maintenance facility acceptable to Lessor and maintain the Aircraft and the Aircraft Documents in accordance with EASA and FAA Federal Air Regulations Part 129 and the Air Authority (except to the extent of any conflict with the Air Authority requirements) and as otherwise required by this Agreement;	
 
(e)	comply with all mandatory inspection and modification requirements/recommendations, Airworthiness Directives, Mandatory Service Bulletins (which are either mandatory or in respect of which Lessee is complying for its other Fleet Aircraft) and similar mandatory requirements applicable to the Aircraft, any Engine or Part having a compliance date during the Term and which are required by the Air Authority, the FAA and/or EASA;	
 
(f)	comply with all applicable laws and regulations of the Air Authority and other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed and which relate to the maintenance, condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;	
 
(g)	maintain in good standing a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Air Authority and will from time to time provide to Lessor a copy on request;	
 
(h)	maintain current certification as to maintenance issued by or on behalf of the Air Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request, such request to be given no more than once annually unless a Default has occurred and is continuing; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
55

(i)	procure promptly the replacement of any Engine or Part which has become time, cycle or calendar expired, lost, stolen, seized, confiscated, destroyed, damaged beyond repair, unserviceable or permanently rendered unfit for use, with an engine or part complying with the conditions set out in paragraph 3.3(a) (subject to the terms of paragraph 3.3 (b) if applicable).	
 
3.2	Removal of Engines and Parts	
Lessee will ensure that no Engine or Part installed on the Aircraft is at any time removed from the Aircraft other than:
 
(a)	if replaced as expressly permitted by this Agreement; or	
 
(b)	if the removal is of an obsolete item and is in accordance with the Agreed Maintenance Programme; or	
 
(c)		
 
 	(i)	during the course of maintaining, servicing, repairing, overhauling or testing that Engine or the Aircraft, as the case may be; or	
 
 	(ii)	as part of a normal engine or part rotation programme; or	
 
 	(iii)	for the purpose of making such modifications to the Engine or the Aircraft, as the case may be, as are permitted under this Agreement;	
and then in each case only if it is reinstalled or replaced by a Suitable Replacement Engine or Replacement Part complying with paragraph 3.3(a) below (and subject to the terms of paragraph 3.3(b) where applicable) as soon as practicable and in any event no later than the Expiry Date in the case of a Replacement Part and no later than three (3) months prior to the Expiry Date in the case of a Suitable Replacement Engine. Without prejudice to the generality of the foregoing, Lessee may not replace an Engine with a Suitable Replacement Engine save in the case of a Total Loss of an Engine.
 
3.3	Installation of Engines and Parts	
 
(a)	Subject always to paragraph 3.2 above, Lessee may install an engine or part on the Aircraft if:	
 
 	(i)	in the case of an engine, it is a Suitable Replacement Engine;	
 
 	(ii)	in the case of a part, it is a Replacement Part;	
 
 	(iii)	in each case, it has become and remains the property of Lessor free from Security Interests and on installation on the Aircraft will without further act be subject to the Mortgage and this Agreement; and	
 
 	(iv)	in each case, Lessee has such details as to its source, maintenance records and life remaining as are required by the Air Authority and Lessee has for each Replacement Part or Suitable Replacement Engine, such technical and maintenance records as would be included for the purposes of this Agreement in the Aircraft Documents in Part 3 of Appendix 8 for each such Suitable Replacement Engine or Replacement Part if each such Suitable Replacement Engine or Replacement Part was then redelivered to Lessor pursuant to and in accordance with Appendix 8 of this Agreement;	
 
(b)	Lessee will, if no Default has occurred which is continuing, be entitled to install any engine or part on the Aircraft by way of replacement notwithstanding paragraph 3.3(a) if:	
 
 	(i)	there is not available to Lessee at the time and in the place that that engine or part is required to be installed on the Aircraft, a replacement engine or, as the case may be, part complying with the requirements of paragraph 3.3(a);	
 
56

 	(ii)	it would result in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee to ground the Aircraft until an engine or part, as the case may be, complying with paragraph 3.3(a) becomes available for installation on the Aircraft; and	
 
 	(iii)	as soon as practicable after installation of the same on the Aircraft but, in any event, no later than the Expiry Date in the case of a part and three (3) months prior to the Expiry Date in the case of an engine, Lessee removes any such engine or part and replaces it with the Engine or Part replaced by it or by a Suitable Replacement Engine (if expressly permitted by paragraph 3.2 of this Appendix 6) or a Replacement Part and otherwise complying with paragraph 3.3(a).	
 
3.4	Non-Installed Engines and Parts	
Lessee will:
 
(a)	ensure that any Engine or Part which is not installed on the Aircraft (or any other aircraft as permitted by this Agreement) is, except as expressly permitted by this Agreement, properly and safely stored, and kept free from Security Interests;	
 
(b)	notify Lessor whenever any Engine is removed from the Aircraft and, from time to time, on request procure that any person (other than an Agreed Maintenance Performer) to whom possession of an Engine is given executes, prior to receipt of possession, a Recognition of Rights Agreement (or the relevant agreement with such person contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 under English law or pursuant to the relevant governing law of the relevant agreement; and	
 
(c)	(notwithstanding the foregoing provisions of this sub-paragraph), be permitted, if no Default has occurred and is continuing, to install any Engine (provided any such Engine continues to be maintained by the Agreed Maintenance Performer) or Part on an aircraft, or in the case of a Part, an engine:	
 
 	(i)	owned and operated by Lessee free from Security Interests; or	
 
 	(ii)	leased or hired to Lessee pursuant to a lease or conditional sale agreement on a long-term basis and on terms whereby Lessee has full operational control of that aircraft or engine; or	
 
 	(iii)	acquired by Lessee and/or financed or refinanced, and operated by Lessee, on terms that ownership of that aircraft or engine, as the case may be, pursuant to a lease or conditional sale agreement, or a Security Interest therein, is vested in or held by any other person;	
provided that in all cases Lessee gives Lessor reasonable prior written notice and in the case of (ii) and (iii):
 
 	(A)	the terms of any such lease, conditional sale agreement or Security Interest will not have the effect of prejudicing the interests of Lessor, the Security Trustee or the Lenders in that Engine or Part or the interests of Lessor, the Security Trustee and the Lenders in respect thereof under the Assignment and the Mortgage; and	
 
57

 	(B)	the lessor under such lease, the seller under such conditional sale agreement or the holder of such Security Interest, as the case may be, has, prior to installation, entered into a Recognition of Rights Agreement (or the lease, conditional sale agreement or the relevant security interest contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 under English law or pursuant to the relevant governing law of the relevant lease, conditional sale agreement or other security agreement.	
 
3.5	Equipment Changes	
 
(a)	Lessee will not make any modification or addition to the Aircraft (each an “ Equipment Change ”), except for an Equipment Change which:	
 
 	(i)	is expressly permitted by this Agreement; or	
 
 	(ii)	is required to in order to change the interior configuration of the Aircraft from 180Y to 174Y; or	
 
 	(iii)	has the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where the Equipment Change does not diminish or impair the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iv)	arises as a result of the requirements of the Air Authority, the Manufacturer, EASA or FAA which Equipment Change shall be for the account of Lessee; or	
 
 	(v)	has a cost (including labour, overheads, engineering supplies, materials and third party costs) no greater than ***** and which is performed pursuant to the original equipment manufacturer service bulletin;	
 
(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove any Equipment Change provided such removal does not diminish or impair the value, utility, condition or airworthiness of the Aircraft; and	
 
(c)	Lessor may require Lessee to remove any Equipment Change and to restore the Aircraft to its condition as it was prior to that Equipment Change except to the extent such Equipment Change is required to comply with the Return Condition.	
 
3.6	Title on an Equipment Change:	
 
(a)	Title to all Engines and Parts installed on the Aircraft whether by way of replacement, as the result of an Equipment Change or otherwise (except those installed pursuant to paragraph 3.3(b)) will on installation, without further act, vest in Lessor subject to the Mortgage, this Agreement and the Assignment free and clear of all other Security Interests. Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable laws. At any time when requested by Lessor, Lessee will provide evidence to Lessor’s satisfaction (including the provision, if required, to Lessor of one or more legal opinions, the cost of any English law opinion to be borne by Lessor) that title has so passed to Lessor.	
 
(b)	Any Engine or Part at any time removed from the Aircraft will remain the property of Lessor until a replacement has been made in accordance with this Agreement and until title in the Suitable Replacement Engine or Replacement Part, as applicable, has passed, according to applicable laws, to Lessor subject to the Mortgage, the Assignment and this Agreement free of all Security Interests whereupon title to the replaced Engine or Part will pass to Lessee free and clear of Lessor Liens.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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3.7	Pooling of Parts	
So long as no Default has occurred and is continuing Lessee may lease, let or hire or charter or otherwise part with possession of a Part (on terms conferring no more than a contractual right against Lessee but not rights against the Part) pursuant to pooling arrangements to which Lessee is a party and which either:
 
(a)		
 
 	(i)	are arrangements involving responsible, solvent scheduled commercial air carriers or aircraft operators or the manufacturers, servicers or suppliers of the Part; and	
 
 	(ii)	do not contemplate transfer of title to the pooled Part except where title to the relevant Replacement Part passes, in accordance with paragraph 3.3(a) above at the same time to Lessor; or	
 
(b)	are otherwise acceptable to Lessor in its sole discretion.	
 
3.8	Title to Engines	
Lessor agrees, for the benefit of Lessee and for the benefit of any mortgagee, indenture trustee, or other holder of a security interest in any engine (other than an Engine) owned by Lessee, any lessor of any engine (other than an Engine) leased to Lessee and any conditional vendor of any engine (other than an Engine) purchased by Lessee subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor, the Security Trustee or any Lender nor their successors or assigns will acquire or claim, as against Lessee or any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided however that such agreement of Lessor shall not be for the benefit of any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof unless it has expressly agreed substantially on the same terms as set out herein or otherwise on terms satisfactory to Lessor acting reasonably (which agreement may be contained in such lease, conditional sale or other security agreement, indenture or mortgage or in a Recognition of Rights Agreement) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on an airframe (other than the Airframe).
 
4	PRESERVATION OF ASSET	
 
4.1	Sub-Leasing	
 
(a)	Lessee shall not, without the prior written consent of Lessor, sublease, charter, hire or otherwise part with the possession or operational control of the Aircraft except:	
 
 	(i)	for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted under this Agreement; or	
 
 	(ii)	so long as no Default is continuing (or may result from the proposed Wet Lease or Permitted Sublease), on terms of a Wet Lease or a Permitted Sublease.	
 
(b)	Lessee shall give Lessor written notice prior to entering into any Wet Lease, save where it is not operationally practicable to do so, in which case, Lessee shall give Lessor written notice of any such Wet Lease as soon as reasonably practicable after entering into any such Wet Lease.	
 
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(c)	A sublease will only be a Permitted Sublease where Lessee has complied with the requirements of Clause 4.1(d) and:	
 
 	(i)	the sublessee is a Permited Sublessee; and	
 
 	(ii)	the proposed sublease:	
 
 	(A)	does not permit further subleasing without the consent of Lessor;	
 
 	(B)	does not have a term (including any extension options) that extends beyond the date falling one (1) month prior to the Expiry Date; and	
 
 	(C)	the rights of the Permitted Sublessee under the sublease are expressly stated in the sublease to be subject and subordinate to this Agreement and to the rights and interests of Lessor, the Lenders and the Security Trustee hereunder and the other Transaction Documents.	
 
(h)	Prior to entry into the sublease:	
 
 	(i)	Lessee shall give Lessor and the Security Trustee, no later than thirty (30) days prior to the proposed commencement of the sublease, a notice specifying the name of the proposed sublessee (which shall be a Permitted Sublessee) and, if applicable, the name of any proposed new State of Registration and/or Habitual Base;	
 
 	(ii)	Permitted Sublessee shall provide Lessor and the Security Trustee with an acknowledgment in writing, in form and substance satisfactory to Security Trustee, no later than five (5) Business Days prior to delivery of the Aircraft under the relevant sublease, acknowledging that the rights of the sublessee under the sublease are subject and subordinate to this Agreement and to the rights and interests of the Lessor, the Lenders and the Security Trustee under this Agreement and the other Transaction Documents and that the termination of this Agreement or the leasing of the Aircraft hereunder shall (without any further action) result in the termination of the relevant sublease or the leasing of the Aircraft thereunder;	
 
 	(iii)	Lessee shall provide Lessor and the Security Trustee with a satisfactory confirmation of the registration at the International Registry of:	
 
 	(A)	any International Interest to be vested in Lessee under the sublease; and	
 
 	(B)	an assignment of all of the associated rights and related International Interest of Lessee in favour of the Security Trustee,	
if either:
 
 	(1)	the new State of Registration or the jurisdiction of incorporation of the Permitted Sublessee is a Contracting State for the purposes of the Cape Town Convention; or	
 
 	(2)	the Permitted Sublessee is situated in a Contracting State for the purposes of Article 4 of the Cape Town Convention;	
 
 	(iv)	if the new State of Registration is a Contracting State for the purposes of the Cape Town Convention, Lessee shall: (i) procure the execution of an IDERA by the Permitted Sublessee irrevocably appointing the Security Trustee as its certified designee under the IDERA and, to the extent permitted by applicable law, its recordation by the relevant Air Authority, and authorising the Security Trustee to exercise the remedies specified in Article 15(1) of the Cape Town Convention at Security Trustee’s sole discretion; and (ii) following recordation, deliver the IDERA to the Security Trustee;	
 
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 	(v)	Lessee shall provide to Lessor and the Security Trustee evidence satisfactory to Lessor and the Security Trustee (acting reasonably) that:	
 
 	(A)	Lessee will remain in compliance with Appendix 7 during the term of the sublease; or	
 
 	(B)	if the proposed sublease is to maintain insurance coverage during the term of the sublease, the proposed insurance coverage is on terms equivalent to the Insurances	
 
 	(vi)	Lessor and the Security Trustee shall be satisfied (acting reasonably) that:	
 
 	(A)	the rights and interests of Lessor, the Lenders and the Security Trustee in respect of the Aircraft or any Transaction Document and the right to repossess the Aircraft in the case of an Event of Default or an Event of Default (as defined under the Loan Agreement) (as applicable) will not be adversely affected by the subleasing;	
 
 	(B)	the perfection of the interests of Lessor, the Lenders and the Security Trustee in respect of the Aircraft and under the Transaction Documents;	
 
 	(C)	if a new State of Registration or Habitual Base is proposed, that as compared to the State of Registration or Habitual Base, respectively, as at the Delivery Date, the jurisdiction of the proposed new State of Registration and Habitual Base provides substantially equivalent or better protection for the rights of lessors, owners, lenders and mortgagees and imposes no less stringent aircraft maintenance standards taken as a whole;	
 
 	(D)	such sublease will not result in the imposition of, or increase in the amount of, any Tax, fees, costs or expenses for which Lessee does not then enter into a binding agreement to indemnify, each Indemnitee to its satisfaction against such imposed or increased Taxes, fees, costs or expenses; and	
 
 	(E)	the due execution by Lessee and the Permitted Sublessee of the proposed sublease and effectiveness of the subordination undertaking referred to in Clause 4.1(d)(ii) above,	
and Lessee shall provide such assistance as may be reasonably required to demonstrate sub-paragraphs (A) to (E) above, including, but not limited to, procuring opinions from independent legal and/or tax counsel (and/or, as applicable, independent technical advisers) in each case acceptable to Lessor and the Security Trustee (acting reasonably).
 
(e)	Where the Aircraft is subleased under a Permitted Sublease pursuant to this Clause 4.1:	
 
 	(i)	the Aircraft may be registered with the Air Authority of the country in which the Permitted Sublessee is organised, subject to the satisfaction of the relevance conditions of Clauses 4.1(c) and (d) above; and	
 
 	(ii)	upon the termination of any such sublease, at the election of Lessor, either (x) in connection with Redelivery under this Agreement, Lessee shall procure that the Aircraft is deregistered from the then current jurisdiction of registration, or (y) Lessee shall procure that the Aircraft is re-registered in the State of Registration as at the Delivery Date and provide (1) a confirmation in form and substance	
 
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 	satisfactory to Lessor and the Security Trustee (acting reasonably) from counsel acceptable to the Security Trustee and addressed to Lessor and the Security Trustee that the relevant legal opinion provided pursuant to Appendix 4, Part 1, Clause 1.1(b)(ii) remains valid, correct and applicable to such re-registration in such State of Registration and the rights and interests of Lessor, the Lenders and the Security Trustee or (2) a new legal opinion, from counsel approved by Lessor and the Security Trustee (acting reasonably) on substantially similar terms to that set out in Appendix 4, Part 1, Clause 1.1(b)(ii).	
 
(f)	Notwithstanding any sublease of the Aircraft, Lessee shall remain fully liable to perform its obligations under this Agreement and the other Transaction Documents to which it is a party but to the extent the relevant Permitted Sublessee properly performs an obligation under the Permitted Sublease, Lessor agrees that such performance shall be regarded as discharging (to such extent) any corresponding obligations of Lessee under the Transaction Documents to which it is a party.	
 
(g)	Lessee shall (i) deliver to Lessor and the Security Trustee, within seven (7) Business Days after the date of execution of any Permitted Sublease, a duly executed copy of it, (ii) not materially amend or vary the terms thereof without the prior approval of Lessor, and (iii) deliver to Lessor and the Security Trustee, within seven (7) Business Days after the date of execution of any such material amendment, a duly executed copy of it.	
 
(h)	If the International Interest vesting in Lessee under the Permitted Sublease has been registered at the International Registry, Lessee shall discharge the registration and each registration of any related assignment promptly on request by Lessor or the Security Trustee or promptly following termination of the period of subleasing of the Aircraft under the sublease and redelivery of the Aircraft thereunder.	
 
(i)	If an event of default (howsoever described), or event which with the giving of notice, lapse of time or fulfilment of any other condition may constitute such an event, is continuing under a Permitted Sublease whilst a Permitted Sublessee is in possession of the Aircraft, Lessee shall (i) promptly notify Lessor (with a copy to the Security Trustee) of the events and the steps that it is proposing to take to enforce the terms of the Permitted Sublease and the steps that it is proposing to take to enforce the terms of the Permitted Sublease or recover possession of the Aircraft and (ii) take all such steps as Lessor or the Security Trustee may instruct (acting reasonably).	
 
(j)	Lessee shall pay on demand all reasonable costs and expenses associated with entering into a Permitted Sublease or change of State of Registration including the reasonable costs and expenses of Lessor and the Security Trustee (including reasonable legal fees and expenses).	
 
4.2	Title	
Lessee will:
 
(a)	not do or knowingly permit to be done or omit or knowingly permit to be omitted to be done any act or thing which might reasonably be expected to jeopardise the rights of Lessor hereunder or as owner of the Aircraft or the rights of the Security Trustee as mortgagee of the Aircraft and as assignee under the Assignment or the validity, enforceability or priority of the Mortgage and the Assignment;	
 
(b)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor subject to the Mortgage;	
 
(c)	not at any time (i) represent or hold out Lessor, the Security Trustee, the Lease Manager or the Lenders as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee or (ii) pledge the credit of Lessor, the Lease Manager, the Security Trustee or the Lenders;	
 
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(d)	ensure that there is always affixed, and not removed or in any way obscured, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a reasonably prominent position on the Aircraft and on each Engine stating:	
“This Aircraft/Engine is owned by Amentum Aircraft Leasing No. Three Limited, is operated by Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., is subject to a mortgage in favour of [the Security Trustee] and may not be operated by any other person without the prior written consent of [the Security Trustee]”;
 
(e)	not create or permit to exist any Security Interest upon the Aircraft, any Engine or any Part;	
 
(f)	not do or permit to be done anything which may reasonably be expected to expose the Aircraft, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, damage or destruction and without prejudice to the foregoing, if any such penalty, forfeiture, impounding, detention or appropriation, damage or destruction occurs, give Lessor notice and use best endeavours to procure the immediate release of the Aircraft, any Engine or the Part, as the case may be;	
 
(g)	not abandon the Aircraft, any Engine or any Part;	
 
(h)	pay and discharge or cause to be paid and discharged when due and payable or make adequate provision by way of security or otherwise for all debts, damages, claims and liabilities which have given or may reasonably be expected to give rise to a Security Interest created by Lessee over or affecting the Aircraft, any Engine or any Part; and	
 
(i)	not attempt, or hold itself out as having any power, to sell, lease or otherwise dispose of the Aircraft, any Engine or any Part.	
 
4.3	Protection	
Lessee will:
 
(a)	maintain the registration of the Aircraft with the Air Authority reflecting (so far as permitted by applicable law) the respective interests of Lessor, and at Lessor’s cost, the Security Trustee and the Lenders and not do or suffer to be done anything which might adversely affect that registration; and	
 
(b)	do all acts and things (including, without limitation, making any filing or registration with the Air Authority or any other Government Entity) and execute and deliver all documents (including, without limitation, any amendment to this Agreement) as may be required by Lessor:	
 
 	(i)	at Lessor’s expense, following any change or proposed change in the ownership or financing of the Aircraft or in the manner of securing Lessor’s obligations to the Security Trustee and Lenders and/or Lessee’s obligations to Lessor provided that any transfer complies with the provisions of Appendix 10 or are otherwise agreed to by Lessee; or	
 
 	(ii)	following any modification of the Aircraft, any Engine or any Part or the permanent replacement of any Engine or Part in accordance with this Agreement, so as to ensure that the rights of Lessor under this Agreement and the rights of the Security Trustee and the Lenders under the Mortgage and the Assignment in respect thereof apply with the same effect as before; or	
 
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 	(iii)	to establish, maintain, preserve, perfect and protect the respective rights of Lessor under this Agreement and as owner of the Aircraft and, at Lessor’s cost and expense, the Security Trustee and the Lenders in the Mortgage and the Assignment.	
 
4.4	Cape Town Convention	
 
(a)	In this Agreement, the Convention and the Protocol shall be read and interpreted together as a single instrument as required by Article 6(1) of the Convention. In this paragraph 4.4 the following expressions have the respective meanings given to them in Article 1 of the Consolidated Text:	
aircraft engines
aircraft object
assignment
associated rights
contract of sale
creditor
international interest
leasing agreement
registry authority
security agreement
State of registry
 
(b)	Lessor and Lessee agree that:	
 
 	(i)	without prejudice to paragraphs 4.1, 4.2 and 4.3 of this Appendix 6, the Aircraft shall be registered on the aircraft register of the State of Registration, which is the State of registry for the purposes of the Convention;	
 
 	(ii)	the Airframe is an airframe and, accordingly, is an aircraft object to which this Agreement relates for the purposes of the Convention and is an A320-200 aircraft with manufacturer’s serial number 3524 and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and are V2527E-A5 engines with manufacturer’s serial numbers V12957 and V12961;	
 
 	(iii)	the international interest of Lessor, as a creditor, in the Airframe and each of the Engines, being the lessor under a leasing agreement of an aircraft object, shall be registered, with the consent of each of Lessor and Lessee, as an international interest under the Convention in each of the Airframe and the Engines, and such registration may be amended or extended prior to its expiry by either Lessor or Lessee, with the consent in writing of the other, such consent not to be unreasonably withheld or delayed;	
 
 	(iv)	the events which are referred to in Part 1 of Appendix 9 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 12 to 15 and 20 of the Consolidated Text;	
 
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 	(v)	Lessor shall have the remedies referred to in Articles 15(1) and 20(1) of the Consolidated Text;	
 
 	(vi)	Lessor has power to dispose of the Airframe and the Engines for the purpose of Article 10(b) of the Consolidated Text subject to and in accordance with the Transaction Documents;	
 
 	(vii)	Lessee shall, on or prior to Delivery, execute and deliver to Lessor an IDERA in favour of the Lessor in the form annexed as an Annex to the Protocol;	
 
 	(viii)	Lessor may assign the associated rights (as defined in Article 1 of the Consolidated Text) under the Assignment or any other assignment permitted in accordance with Appendix 10, which associated rights consist of all rights to payment or other performance by Lessee (as debtor) under this Agreement and are associated with the Airframe and the Engines being aircraft objects for the purposes of the Convention. Any such assignment shall be made in accordance with and subject to the conditions specified in Appendix 10 and shall transfer to the relevant assignee the related international interests of Lessor; and	
 
 	(ix)	Lessee shall cooperate with Lessor, at Lessee’s expense, with respect to effecting registration pursuant to the Convention of the international interests of any Lender or the Security Trustee as creditor in respect of the security agreement and the assignment constituted by any Mortgage and any Assignment and of any associated agreement related to the ranking of priority between the various international interests and/or the interests of Lessee;	
 
(c)	If any of the Engines is replaced by a Suitable Replacement Engine pursuant to and in accordance with this Agreement, Lessor and Lessee shall, at Lessee’s expense and on or prior to title to the Suitable Replacement Engine being vested in Lessor, take such steps as shall be available to them under the terms of the Convention and as are necessary:	
 
 	(i)	to constitute in favour of Lessor as a creditor (being the lessor under a leasing agreement of an aircraft object) an international interest in the Suitable Replacement Engine, including, for this purpose, entering into a supplement to this Agreement in such form as Lessor shall reasonably require providing that the Suitable Replacement Engine (which shall be identified in such supplement in the same manner as is provided in paragraph 4.4(b)(ii)above) shall be leased by Lessor to Lessee with effect from title to the same vesting in Lessor under the contract of sale referred to in paragraph 4.4(c)(iii) below and that the Suitable Replacement Engine shall be an Engine for the purposes of this Agreement;	
 
 	(ii)	to register such international interest in accordance with Chapter V of the Consolidated Text;	
 
 	(iii)	to enter into a contract of sale with respect to the Suitable Replacement Engine which complies with the formalities of Article 11 of the Consolidated Text;	
 
 	(iv)	to register the contract of sale with respect to the Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text;	
 
 	(v)	if required by any person who has acquired title to the Replaced Engine from Lessor, to enter into a contract of sale with respect to the Replaced Engine which complies with the formalities of Article 11 of the Consolidated Text and consent to the registration of such contract of sale in accordance with Chapter V of the Consolidated Text; and	
 
 	(vi)	to subject the relevant Suitable Replacement Engine to the security constituted by any Mortgage, and to register the international interest of the Security Trustee under any Mortgage in respect of such Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text.	
 
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(d)	Without prejudice to any of the foregoing provisions of this paragraph 4.4, Lessee shall do or cause to be done (in conjunction with Lessor where necessary) any and all acts which may be required or desirable in connection with the terms of the Convention, to the extent permitted by the law of the State of Registration, to register, perfect, preserve and/or enhance any international interests of Lessor and/or the Security Trustee with respect to aircraft objects to which the Transaction Documents to which Lessee is a party relate.	
 
(e)	Pursuant to Article XI, Option B of the Protocol and Article XXX(3) the parties hereby agree that the time period required by Article XI, Alternative B of the Protocol shall be the twenty (20) day period referred to in article 92 of the Mexican Ley de Concursos Mercantiles in respect of any procedure referred to in said law.	
4.5
 
(a)	If the State of Registration has ratified the terms of the Geneva Convention, do all acts and things in the State of Registration which Lessor may reasonably require to preserve the title, rights and interest of Lessor, and, at Lessor’s cost, the Security Trustee, to and in the Aircraft within the jurisdiction of any state which is a party to the Geneva Convention.	
 
(b)	In the event of any other enactments or provisions being made or becoming operative relating to recognition of rights in aircraft and which may apply to the Aircraft, promptly do and join with Lessor and, if appropriate, the Security Trustee and the Lenders in doing all such acts or things as may be necessary or reasonably desirable to perfect recognition of the title, rights and interest of Lessor, the Security Trustee and the Lenders in respect of the Aircraft.	
 
4.6	Lessor’s Financing	
Lessee acknowledges that Lessor may at any time during the Term grant new or further Security Interests over the Aircraft and the benefit of the Transaction Documents to the Lenders and the Security Trustee or any new or replacement lenders or security trustee as security for Lessor’s obligations to the Lenders or such new or replacement lenders. Lessee undertakes to provide all reasonable assistance and co-operation to Lessor, any Lenders and any Security Trustee and their respective representatives and advisers (at Lessor’s cost) in connection with the perfection and maintenance of such Security Interests, including (without limitation) the effecting of all necessary filings and registrations in the State of Registration and the Habitual Base and with the International Registry and Lessor agrees to take all reasonable steps available to it to ensure that such assistance and co-operation will not interfere with Lessee’s commercial operations provided that any security interests or assignment in favour of new or replacement lenders shall comply with the provisions of Appendix 10. To the extent that Lessor is aware of the identity of any new or replacement Lenders, Lessor shall (subject always to any duty of confidentiality) give Lessee the names of any such Lenders.
 
4.7	Costs	
Unless otherwise specified in the Transaction Documents, all costs associated with compliance by Lessee with its obligations under the Transaction Documents shall be for the account of Lessee.
 
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APPENDIX 7
PART 1
INSURANCE COVENANTS
 
1	Lessee will maintain or cause to be maintained in full force during the Term, and thereafter as expressly provided by this Agreement, insurances in respect of the Aircraft (the “ Insurances ” which expression includes, where the context so admits, any relevant reinsurance(s)). The Insurances will be effected and maintained on a non-discriminatory basis compared with similar aircraft in Lessee’s fleet. The Insurances will be effected either:	
 
(a)	on a direct basis with insurers of recognised standing who normally participate in aviation insurances in the leading international insurance markets and led by internationally recognised and reputable underwriter(s); or	
 
(b)	with a single internationally recognised and reputable insurer or group of internationally recognised and reputable insurers who does or do not retain the risk but effects ***** reinsurance of all risks insured with reinsurers in the leading international insurance markets and through brokers each of internationally recognised standing in the international aviation insurance markets (the “ Reinsurances ”).	
 
2	Lessor’s current requirements as to required Insurances are as specified in Part 2 of this Appendix 7. Lessor or the Security Trustee may from time to time upon reasonable consultation with Lessee and its insurance advisers stipulate other requirements (other than as to the level of the deductible or the Agreed Value) for the Insurances so that the scope and level of cover is maintained in line with the prudent practice of reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft and the interests of Lessor, the Security Trustee and the Lenders are protected in accordance with such practices.	
 
3	If at any time Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change in circumstances may occur or has occurred which in the reasonable opinion of such brokers may materially affect or has materially affected the rights of Lessor and other Indemnitees in and to the Insurances, then Lessor, the Security Trustee and their brokers will consult with Lessee and Lessee’s brokers regarding what action is required to protect the interests of the parties insured. If, following the consultation, Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change should be made (other than as to the level of the deductible or the Agreed Value) having regard to the level and type of Insurances, and the terms and conditions thereof, then maintained by reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft, Lessee will then arrange or procure the arrangement of alternative cover satisfactory to Lessor’s and the Security Trustee’s insurance brokers (acting reasonably).	
 
4	Lessee will:	
 
(a)	ensure that all legal requirements as to insurance of the Aircraft, any Engine or any Part which may from time to time be imposed by the laws of the State of Registration, the Habitual Base or any state to, from or over which the Aircraft may be flown, in so far as they affect or concern the operation of the Aircraft, are complied with to ensure that (i) the Aircraft is not in danger of detention or forfeiture, (ii) the Insurances remain valid and in full force and effect, and (iii) the interests of the Indemnitees in the Insurances and the Aircraft, the Engines or any Part are not thereby prejudiced;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(b)	not use, cause or permit the Aircraft, any Engine or any Part to be used for any purpose or in any manner not covered by the Insurances or outside any geographical limit imposed by the Insurances;	
 
(c)	comply with the terms and conditions of each policy of the Insurances and not do, consent or agree to any act or omission which invalidates or might reasonably be expected to invalidate the Insurances, or renders or might reasonably be expected to render void or voidable the whole or any part of any of the Insurances; or brings any particular liability within the scope of an exclusion or exception to the Insurances;	
 
(d)	not take out without the prior written approval of Lessor any insurance or reinsurance in respect of the Aircraft other than those required under this Agreement which would prejudice the rights or interest of Lessor or any of the other Indemnitees under or in respect of the Insurances and in no event maintain hull insurance in an amount in excess of ***** of the Agreed Value from time to time, unless relating solely to business interruption, profit commission and deductible risk;	
 
(e)	commence renewal procedures on a timely basis prior to expiry of any of the Insurances and provide to Lessor:	
 
 	(i)	if requested by Lessor, a written status report of renewal negotiations fourteen (14) days prior to each expiry date;	
 
 	(ii)	faxed confirmation of completion of renewal prior to each expiry date; and	
 
 	(iii)	certificates of insurance (and where appropriate certificates of reinsurance), and broker’s (and any reinsurance brokers’) letter of undertaking in a form acceptable to Lessor and the Security Trustee (each acting reasonably) in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within 7 days after each renewal date;	
 
(f)	on request, provide to Lessor copies of such other documents as Lessor may reasonably request evidencing the Insurances provided that nothing in this paragraph (f) shall require Lessee to give to Lessor a copy of Lessee’s fleet policy;	
 
(g)	on request but no more frequently than once a year, unless a Default has occurred and is continuing, provide to Lessor evidence that the Insurance premiums have been paid;	
 
(h)	not make or accept any modification or alteration to the Insurances material and adverse to the interests of any of the Indemnitees;	
 
(i)	be responsible for any deductible under the Insurances;	
 
(j)	provide any other insurance and reinsurance related information, or assistance, in respect of the Insurances as Lessor may reasonably request but no more frequently than once a year, unless a Default has occurred and is continuing; and	
 
(k)	promptly notify Lessor of:	
 
 	(i)	any loss, theft, damage or destruction to the Aircraft, any Engine or any Part, or any modification to the Aircraft if the potential cost may exceed *****; and	
 
 	(ii)	any claim or other occurrence likely to give rise to a claim under the Insurances in excess of ***** and reasonably sufficient details of any negotiations with the insurance brokers over any such claim.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(l)	ensure or procure that insurance cover is maintained in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe; and	
 
(m)	maintain separate insurance cover in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe.	
 
5	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound, (without prejudice to any other rights of Lessor under this Agreement):	
 
(c)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an “ owner’s interest ” policy) as it considers appropriate. Any sums so expended by it will become immediately due and payable by Lessee to Lessor together with interest thereon at the rate specified in Clause 5.5, from the date of expenditure by the relevant Indemnitee up to the date of reimbursement by Lessee; and	
 
(d)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
 
6	Lessee shall effect and maintain liability insurance after the Expiry Date with respect to its liability under the indemnities in Clause 11 for such period as Lessor may reasonably require (but in any event not more than two (2) years or until completion of the next scheduled Major Check, whichever is earlier) which provides for each Indemnitee to be named as additional insured. Lessee’s obligation in this paragraph shall not be affected by Lessee ceasing to be lessee of the Aircraft and/or any of the Indemnitees ceasing to have any interest in respect of the Aircraft.	
 
7	Application of Insurance Proceeds	
 
(a)	All hull insurance payments up to and including the Agreed Value received as the result of a Total Loss occurring during the Term will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and Lessor will pay or procure the payment of the balance of those amounts to Lessee after deduction of all amounts which may be or become payable by Lessee to Lessor under this Agreement.	
 
(b)	All insurance proceeds of any property damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of ***** will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied (acting reasonably) that the repairs or replacement have been or are to be effected in accordance with this Agreement and any balance remaining (after deducting therefrom any amount of such insurance proceeds paid by the insurers in respect of a claim by Lessee for compensation for its loss of use of the Aircraft) may be retained by the Security Trustee or Lessor, as the case may be. Insurance proceeds in amounts below ***** may be paid by the insurer directly to Lessee.	
 
(c)	All insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to the Security Trustee or as directed by the Security Trustee, to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made.	
 
(d)	Notwithstanding paragraphs 7(a), (b) or (c), if at the time of the payment of any such insurance proceeds an Event of Default has occurred and is continuing, all such proceeds will be paid to or retained by the Security Trustee (or if requested by the Security Trustee, to Lessor) to be applied toward payment of any amounts which may be or become payable by Lessee during any period when such Event of Default is continuing in such order as Lessor sees fit or as Lessor may elect.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(e)	To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions of this paragraph 7 and apply or pay over such proceeds as so required.	
 
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APPENDIX 7
PART 2
INSURANCE REQUIREMENTS
The Insurances required to be maintained are as follows:
 
(a)	HULL ALL RISKS of Loss or Damage whilst flying and on the ground with respect to the Aircraft on an “ agreed value basis ” for an amount not less than the Agreed Value, and not greater than ***** of the Agreed Value from time to time, and with a deductible (other than in respect of a Total Loss) not exceeding ***** or such other amount agreed by Lessor from time to time;	
 
(b)	HULL WAR AND ALLIED PERILS, covering such risks excluded from the Hull All Risks Policy to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft and at least as extensive as AVB48B (or its equivalent in respect of liabilities, other than paragraph (b)) and LSW 555D (or its equivalent in respect of Hull) from the leading international insurance markets including confiscation and requisition by the State of Registration for an amount not less than the Agreed Value and not greater than ***** of the Agreed Value from time to time;	
 
(c)	SPARES ALL RISKS (INCLUDING WAR AND ALLIED PERILS) property insurance on all Engines and Parts when not installed on the Aircraft on an “ agreed value ” basis for their full replacement value and including engine test and running risks;	
 
(d)	AVIATION THIRD PARTY LEGAL LIABILITY to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft from leading international insurance markets including but not limited to aircraft third party, passenger, baggage, cargo, mail and general third party legal liability for a Combined Single Limit of an amount not less than the Minimum Liability Coverage or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for the time being any one occurrence but in respect of products and completed operations this limit may be an aggregate limit for any and all losses occurring during the currency of the policy and further limited to ***** (or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft) any one occurrence and in the aggregate in respect of personal injury coverage. War and Allied Risks are also to be covered under Extended Coverage Endorsement AVN52E (or its equivalent) for an amount not less than ***** or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for any one occurrence and in the annual aggregate. Any aggregation of limits will be subject to limits being restored following any claims which have been paid;	
 
(e)	all required hull, hull war and spares insurance (as specified in (a), (b) and (c)), so far as it relates to the Aircraft will:	
 
 	(i)	name the Security Trustee as loss payee (in an amount up to and including the Agreed Value) in respect of a Total Loss and name Lessor, the Lease Manager, the Security Trustee and the Lenders as additional assureds for their respective rights and interests;	
 
 	(ii)	provide that any loss (other than a Total Loss, the proceeds of which in an amount up to and including the Agreed Value will be payable to the Security Trustee) will be settled with Lessee, subject to final prior approval of the Security Trustee and Lessor and will be payable in Dollars to the Security Trustee in an amount up to the Agreed Value for the account of all interests except where the loss does notexceed *****, and neither Lessor nor the Security Trustee has notified the insurers to the contrary, in which case the loss will be settled with and paid to Lessee;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(iii)	if separate Hull “ all risks ” and “ war risks ” insurances are arranged, include a 50/50 provision in accordance with market practice;	
 
(f)	all required liability insurances (as specified in (d) above) will:	
 
 	(i)	include each of the Indemnitees as additional assureds for their respective rights and interests, warranted, each as to itself only, no operational interest;	
 
 	(ii)	include a Severability of Interest Clause which provides that the insurance, except for the limit of liability, will operate to give each assured the same protection as if there was a separate policy issued to each assured;	
 
 	(iii)	contain a provision confirming that the policy is primary without right of contribution from any other insurance which may be available to the additional assureds;	
 
(g)	all Insurances will:	
 
 	(i)	provide cover denominated in Dollars and, in relation to liability insurance, in the currency of the claim;	
 
 	(ii)	operate on a worldwide basis subject to such limitations and exclusions as Lessor may agree;	
 
 	(iii)	acknowledge the insurer is aware that the Aircraft is owned by Lessor and is subject to the Mortgage and that the Insurances are subject to the Assignment and the Assignment of Insurances;	
 
 	(iv)	provide that the cover provided to each additional assured shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any person which results in a breach of any term, condition or warranty of the policy PROVIDED that the additional assured so protected has not caused, contributed to or knowingly condoned the said act or omission;	
 
 	(v)	provide that the insurers will waive any rights of subrogation against the additional assureds;	
 
 	(vi)	provide that the additional assureds will have no obligation or responsibility for the payment of any premiums due and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional assureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(vii)	except in respect of any provision for Cancellation or Automatic Termination specified in the policy or any endorsement thereof, the Insurances may only be cancelled or materially altered in a manner adverse to the additional assureds by the giving of not less than thirty (30) days’ (7 days’ or such other period as is customary in respect of War and Allied Perils) notice in writing. Notice shall be deemed to commence from the date such notice is given by the insurers to Lessee’s designated brokers. It is accepted that such notice will NOT, however, be given at normal expiry date of the Insurances or any endorsement;	
 
 	(viii)	if Reinsurance is a requirement of this Agreement such Reinsurance will (i) be on the same terms as the original Insurances and will include the provisions of this	
 
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 	Appendix (ii) provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of Reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original Insurance policies in respect of which the then relevant policy of Reinsurance has been effected; and (iii) contain a “cut-through” Clause in the following form (or otherwise, satisfactory to Lessor): “The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the Reinsurances in respect of a total loss or other claim where as provided by the Aircraft Lease Agreement dated 2011 and made between [Lessor] and [Lessee] such claim is to be paid to the person named as designated loss payee under the primary Insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as sole loss payee under the primary Insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith”; subject to such provisions not contravening any law of the State of Incorporation; and	
 
 	(ix)	include and insure the indemnity provisions of Clause 11 of this Agreement to the extent of the risks covered by the policies;	
 
(h)	Lessee may maintain Insurances in respect of the Aircraft and any Engines for the purposes of this Agreement which incorporate the terms and conditions of Lloyd’s Airline Finance Endorsement AVN67B (“ AVN67B ”) (or AVN67C) provided that Lessee will ensure that for the purposes of AVN67B (or AVN67C, as the case may be):	
 
 	(i)	this Agreement, the Mortgage, the Assignment and the Assignment of Insurances are identified as “ Contracts ”; and	
 
 	(ii)	the Indemnitees are named as the “ Contract Parties ”;	
 
(i)	for so long as Insurance or Reinsurance is placed in the London market (it being agreed that, without prejudice to the obligations of Lessee pursuant to Part 1 of this Appendix 7, Lessee is not obliged to place any Insurance or Reinsurance in the London market), in the event of any conflict or inconsistency between this Appendix and AVN67B (or its equivalent) (and subject always to compliance by Lessee with (h) above), the relevant provisions of AVN67B (or its equivalent) shall be acceptable to Lessor for so long as, insurance Clause AVN67B (or its equivalent) represents, at the relevant time in the international insurance markets, best aviation insurance practice; and	
 
(j)	all insurances will contain a provision entitling Lessor or any additional assured to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so.	
 
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APPENDIX 7
PART 3
TOTAL LOSS
 
1	For the purpose of this Agreement, “ Total Loss ” means with respect to the Aircraft (including for the purposes of this definition the Airframe):	
 
(a)	the actual or constructive total loss of the Aircraft (including any damage to the Aircraft which results in an insurance settlement on the basis of a total loss, or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
(b)	it being destroyed, damaged beyond repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
(c)	the requisition of title, or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft by the government of the State of Registration, Habitual Base or other competent authority (whether de jure or de facto ), but excluding requisition for use or hire not involving requisition of title; or	
 
(d)	the hi-jacking, theft, condemnation, confiscation, seizure or requisition for use or hire of the Aircraft which deprives any person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days.	
 
2		
 
(a)	If a Total Loss occurs prior to delivery of the Aircraft to Lessee, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement except that Lessor will return to Lessee any amounts of Rent or Deposit received by Lessor under this Agreement; and	
 
(b)	If a Total Loss occurs after delivery of the Aircraft to Lessee, Lessee will pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	the day falling sixty (60) days after the Total Loss; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
Until the Agreed Value and all other amounts which are then due and owing by Lessee to Lessor pursuant to the Transaction Documents and any Other Agreement are received by Lessor, Lessee shall continue to comply with its obligations hereunder to pay Rent. Once the Agreed Value and all other amounts which are then due and payable under this Agreement and the Transaction Documents and which are then due and payable under any Other Agreement have been paid in full to Lessor, Lessee’s obligation hereunder for the payment of Rent shall cease as and from the date on which Lessor receives the Agreed Value and Lessor will pay to Lessee all Maintenance Reserves and any Deposit (plus interest accrued thereon in accordance with this Agreement) then held by Lessor and return any Letter of Credit.
 
3	During any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss:	
 
(a)	the Rent and other charges payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under this Agreement other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition; and	
 
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(b)	so long as no Default has occurred and is continuing, Lessee will be entitled to any hire amounts paid by the requisitioning authority in respect of the Term. Lessee will, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement. Lessor will be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor will apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, but so that, if any Default has occurred and is continuing, Lessor may apply the compensation or hire in or towards settlement of any amounts owing by Lessee under this Agreement.	
 
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APPENDIX 7A
PART 1
PRE-DELIVERY PROCEDURE
 
1	Upon reasonable notice prior to the Scheduled Delivery Date, Lessor will make the Aircraft available to Lessee for inspection and during such inspection the Lessee shall be permitted to:	
 
(a)	inspect the Aircraft and its conformity with the Delivery Conditions specified herein;	
 
(b)	to perform a maximum power assurance run on the Engines and an acceptance flight of the Aircraft of a maximum duration of two hours (the “ Delivery Check Flight ”) taking off from and landing at the Delivery Location to demonstrate satisfactory operation of the Aircraft and its conformity with the Delivery Conditions set out herein; and	
 
(c)	inspect the Engines by performing a complete hot and cold video borescope inspection (conducted after the Delivery Check Flight) of each Engine at Lessee’s cost.	
 
2	If Lessee notifies Lessor promptly of any non-conformity of the Aircraft with the Delivery Condition observed during the inspection or Delivery Check Flight (and such non-conformity is recorded in the flight log in the case of a demonstration flight), Lessor will, at its cost, correct or procure the correction of such non-conformity as soon as reasonably practicable and make the Aircraft available for re-inspection by Lessee.	
 
3	The Delivery Check Flight shall be performed in accordance with the Manufacturer’s procedures in respect of demonstration flights for used aircraft (or such other procedures acceptable to Lessor and Lessee).	
 
4	The cost of the Delivery inspection (other than costs relating to (i) obtaining insurance for the Delivery Check Flight and (ii) Lessor’s employees or representatives) shall be borne by Lessee.	
 
5	Lessee is responsible for and shall indemnify and hold harmless the Indemnitees from and against all Losses arising from death or injury to any observer representative or any employee of Lessee in connection with any demonstration flight or inspection of the Aircraft by Lessee save for any Losses arising out of or in connection with the gross negligence or wilful misconduct of any Indemnitee.	
 
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APPENDIX 7A
PART 2
DELIVERY CONDITION
 
1	GENERAL CONDITION	
Lessee shall ascertain that the Aircraft meets the conditions set out in the following provisions of this Part 2 of Appendix 7A.
The Aircraft shall:
 
(a)	be in airworthy and in good operating condition, conforming to EASA type design certification; and be clean by scheduled passenger airline standards;	
 
(b)	not have been operated in commercial passenger service since completion of the last C Check in accordance with the latest Maintenance Planning Document accomplished prior to Delivery falling due for accomplishment within 20 months, 6,000 Flight Hours and 4,500 Cycles (whichever is the most limiting factor);	
 
(c)	be free of damages, tears, stains and inappropriate markings and shall comply with relevant EASA fire resistance regulations;	
 
(d)	have installed the full complement of systems, equipment, parts, accessories, furnishings and loose equipment functioning in accordance with the Airbus Aircraft Inspection Report, the Aircraft Type Certificate and their intended use and in compliance with, and eligible for immediate operation under EU OPS 1 equipment standards;	
 
(e)	have a currently valid airworthiness review certificate and certificate of airworthiness for export and a deregistration certificate;	
 
(f)	meet all requirements for, and be eligible for immediate operations in full compliance with FAA Part 129 regulations;	
 
(g)	have no leakage of fuel, oil, hydraulic fluid, or water which exceed the limits laid down in the Manufacturer’s applicable maintenance manual;	
 
(h)	comply with all EASA Airworthiness Directives which require compliance prior to Delivery;	
 
(i)	be in its existing external livery;	
 
(j)	have all signs and decals clean, secure and legible in English;	
 
(k)	have no open, deferred, continued, carry over or placard log book items and have no temporary or time-limited structural repairs. No special or unique inspection or check requirements which are specific to the Aircraft (as opposed to all aircraft of the same model) will exist with respect to the Aircraft;	
 
(l)	have all non-structural repairs, modifications and alterations accomplished in accordance with Airframe Manufacturer’s service bulletins or Airframe Manufacturer’s written approval (with a statement of conformity to type certificate data); and	
 
(m)	have no less than the Aircraft flight manual approved design weights.	
 
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2	COMPONENTS	
 
(a)	Each Flight Hour and Cycle controlled Hard Time Component (other than the Landing Gear and APU) shall have not less than 6,000 Flight Hours and 4,500 Cycles (or 100% of Hard-Time life if this interval is less) of life remaining to the next scheduled removal, in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document (including the “Airworthiness Limitations”). Each calendar controlled Hard Time Component including safety equipment will have not less than 20 months or 100% life remaining (whichever is less) to the next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document. Hard Time Components shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as EASA form 1 or FAA form 8130-3. For this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and which can have life fully restored through appropriate maintenance.	
 
(b)	Each Airframe Life-Limited Component will have not less than 6,000 Flight Hours and 4,500 Cycles and 20 months remaining to next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and Aircraft EASA type certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth. For this purpose “ Airframe-Life Limited Component ” means a component with an ultimate life which cannot be restored through appropriate maintenance.	
 
(c)	Each “ on-condition ” and “ condition-monitored ” component will be serviceable and shall be supported by appropriate certification documentation such as EASA form 1 or FAA form 8130-3 at the point of last installation on the Aircraft if replaced since Aircraft new delivery. The “ condition-monitored ” components shall be supported by an appropriate reliability programme and data in accordance with the Agreed Maintenance Programme.	
 
(d)	The installed components will have total Flight Hours and Cycles since new no more than 110% of the Aircraft total Flight Hours and Cycles since new.	
 
(e)	There shall be no PMA Parts on the Aircraft, save for consumable parts or parts used as consmetic items in the passenger cabin. For these purposes “ consumable parts ” means any non-serialised item of aircraft material which is used only once and is not re-usable, such as (but not limited to) filters, seals, lubricants, cements, compounds, paints, chemicals, dyes and sealants.	
 
3	ENGINES	
Each Engine installed on the Aircraft (and each Engine LLP installed on an Engine) shall comply with the following:
 
(a)	have no less than 4,500 Cycles scheduled life remaining in respect of Engine Life Limited Parts and no more than 110% of the Aircraft total Flight Hours and Cycles since new. Engine LLPs will be supported by certification documentation necessary to demonstrate traceability back to birth;	
 
(b)	shall have accumulated no more than 7,000 Flight Hours and 7,000 Cycles since new;	
 
(c)	shall be serviceable and capable of full rated performance without limitations throughout the entire operating envelop of the Aircraft as defined in the EASA AFM. Each Engine shall have at least 25C sea level hot day exhaust gas temperature (“ EGT ”) margin; and	
 
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(d)	no Engine shall be on watch for any reason requiring any special or out of sequence inspection or reduced interval inspections or exhibit any adverse trends or indicate a rate of performance deterioration that is higher than normal.	
 
4	FUSELAGE, WINDOWS AND DOORS	
 
(a)	The fuselage and doors will be free of major dents and abrasions exceeding the limits in the Manufacturer’s structural repair manual.	
 
(b)	Windows will be free of major delamination and blemishes in excess of Maintenance Manual limits allowing continued in service operation without special inspection or other action and will be properly sealed.	
 
(c)	Doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
(d)	All external repairs for the pressurised fuselage shall have been reviewed in accordance with the latest revision of the Manufacturer’s repair assessment programme (if issued, and otherwise in accordance with the Manufacturer’s published guidelines) applicable at the time of repair and supported by certified documentation evidencing accomplishment in accordance with EASA or FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Manufacturer’s written approval or FAA/EASA STC (Supplemental Type Certificate) or FAA Form 8110- 3/8100-9 approval or otherwise approved by the EASA or FAA.	
 
5	WINGS AND EMPENNAGE	
 
(a)	The wings including nacelles and empennage will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits.	
 
(b)	The wings will be free of fuel leaks in accordance with the maintenance manual allowing continued in service operation without special inspection or other action.	
 
6	INTERIOR AND COCKPIT	
 
(a)	The Aircraft shall be in 180Y configuration.	
 
(b)	The Aircraft interior including cockpit, windows, main cabin and cargo compartments shall have been maintained in accordance with the Agreed Maintenance Programme will be clean by normal industry standards, with all components free of excessive levels of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operation;	
 
(c)	No less than 50 per cent (50%) of aisle seats shall have moveable armrests.	
 
(d)	Interior panels (including overhead bins, sidewall and ceiling panels, bulkheads and cargo compartment panels), and related seals (including window seals) shall be clean and substantially free of holes, cracks, temporary repairs and dents.	
 
(e)	The Aircraft shall have reinforced a cockpit door.	
 
(f)	All signs and decals shall be clean secure and legible in English.	
 
(g)	Safety belts and harnesses shall be free of stains, discolouration, and fraying other than minor stains and discolouration.	
 
(h)	Seats, lavatories and galleys shall be to an international airline standard and shall be fully serviceable, in good condition and repainted as necessary.	
 
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(i)	All panels and nets in the cargo compartment shall be in good condition; all rollers and cargo restraint / nets and moving mechanisms shall be serviceable; and all compartments shall meet the then current the EASA and FAA fire regulations; all doors shall be rigged and functioning properly.	
 
(j)	All interior placards shall be in the English language.	
 
7	LANDING GEAR; WHEELS AND BRAKES	
 
(a)	The Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary and the Landing Gear shall have been stripped and repainted during any Landing Gear Overhaul (if applicable).	
 
(b)	Each installed Landing Gear shall have no less than 4,500 Cycles and 24 months (whichever is the most limiting factor) life remaining to the next scheduled removal in accordance with Agreed Maintenance Programme and the Maintenance Planning Document. Life Limited Part within each installed Landing Gear shall have not more than 110% of the Airframe total Cycles since new and certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The Landing Gear modification standard will meet the manufacturer requirements for an Aircraft maximum take-off weight as at Delivery.	
 
8	AUXILIARY POWER UNIT	
 
(a)	The APU will be serviceable in accordance with the requirements of the Maintenance Manual as evidenced by the Manufacturer’s maintenance manual tests and inspections.	
 
(b)	APU Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The APU will have not accumulated more than 7000 APU Hours of operation since new or last APU Performance Restoration.	
 
9	AIRCRAFT SPECIFICATION	
The Aircraft will have the following specifications:
 
(a)	have the following operational weights: 77t MTOW, 66t MLW, 62.5t MZFW;	
 
(b)	be capable of CATII/CATIII operations;	
 
(c)	have noise level Stage 3;	
 
(d)	have fuel and weight quantity indicators in kg;	
 
(e)	be capable of RVSM operations;	
 
(f)	incorporate SELCAL decoder;	
 
(g)	have VHF 8.33kHz spacing;	
 
(h)	incorporate ACARS/ATSU system;	
 
(i)	incorporate EGPWS/TAWS system;	
 
(j)	be capable of operating to and from airports up to 9200ft;	
 
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(k)	be capable of operating to and from airports with OAT equal to ISA +40°C;	
 
(l)	incorporate GPS navigation system capable for RNP operations;	
 
(m)	incorporate an approved cockpit voice recorder that meets the standards of TSO-C123a or later revision;	
 
(n)	incorporate a fixed 406MHz ELT and a portable 406MHz ELT; and	
 
(o)	incorporate brake cooling fans.	
 
10	AIRCRAFT DOCUMENTS	
The Aircraft shall be delivered with the Aircraft Documents listed in Part 3 of Appendix 7A (other than those documents listed in the Certificate of Acceptance as not delivered).
 
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APPENDIX 7A
PART 3
AIRCRAFT DOCUMENTS AT DELIVERY
 
1	Certificates	
 
(a)	Certificate of Airworthiness;	
 
(b)	Certificate of Registration;	
 
(c)	Aircraft De-Registration Confirmation;	
 
(d)	Export Certificate of Airworthiness issued by the last country of registry;	
 
(e)	Noise Limitation Certificate (AFM page);	
 
(f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	(i)	Certification of compliance with fire blocking requirements as outlined in the applicable regulation;	
 
 	(ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(v)	Carpets;	
 
 	(vi)	Curtains; and	
 
 	(vii)	Interior Surfaces (if refurbished).	
 
2	Manuals	
 
(c)	EASA/FAA Approval Airplane Flight Manual;	
 
(d)	Weight and Balance Control and Supplements (in U.S. units), including last weigh paperwork;	
 
(e)	Operations Manual (Manufacturer’s generic);	
 
(f)	Quick Reference Handbook (Manufacturer’s generic);	
 
(g)	Structural Repair Manual;	
 
(h)	Aircraft Maintenance Manual;	
 
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(i)	Component Maintenance Manuals, (CMM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	(i)	Galleys;	
 
 	(ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	(iii)	Lavatories;	
 
 	(iv)	Toilet Assemblies;	
 
 	(v)	Closets;	
 
 	(vi)	Class Dividers (if applicable); and	
 
 	(vii)	Passenger Seats;	
 
(j)	Aircraft Illustrated Parts Catalog (I.P.C.);	
 
(k)	Aircraft Wiring List;	
 
(l)	Aircraft Schematics Manual;	
 
(m)	Engine CMM, IPC;	
 
(n)	APU CMM, IPC;	
 
(o)	Latest operator’s Maintenance Program;	
 
(p)	Latest operator’s Minimum Equipment List;	
 
(q)	Configuration Deviation List; and	
 
(r)	Any other Manual originally delivered by Airbus to the Lessee, Technical documentation, Manuals).	
 
3	Airworthiness Directives Documentation	
 
(a)	The Aircraft shall have all records associated with AD compliance:	
 
 	(i)	A complete and current applicable AD status list of each Airframe, appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	AD number and revision number;	
 
 	(2)	AD title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
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 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected); and	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability.	
 
(b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at redelivery of the Aircraft, and countersigned by Lessor at Delivery or by Lessee at redelivery of the Aircraft. The list shall also be delivered in workable electronic format.	
 
(c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each AD. If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work.	
 
(d)	Exemptions or deviations granted by the FAA or EASA (or other applicable civil aviation authority with jurisdiction over the Aircraft) on AD compliance, including copy of exemption request.	
 
(e)	Items (c) and (d) will be provided in document packages for each AD. Each package will contain all documents relative to the AD/Aircraft combination, and include copies of the AD.	
 
4	Engineering Documentation	
 
(a)	A current list (in paper and workable electronic format) of Airframe, appliance, Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Aircraft, each Engine and the APU. For appliances, only AD related Service Bulletins and Engineering Orders are required.	
 
(b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	(i)	SB number and revision number;	
 
 	(ii)	SB title;	
 
 	(iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	(iv)	Engineering documentation reference;	
 
 	(v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(vi)	Specify terminated or repetitive status;	
 
 	(vii)	Date of initial accomplishment of each portion of such engineering document;	
 
 	(viii)	Date of last maintenance accomplishment, if repetitive;	
 
 	(ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable; and	
 
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 	(x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected).	
 
(c)	EASA or FAA approvals (DER Form 8110-3 or Form 8100-9) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances).	
 
(d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any seller.	
 
(e)	Data packages covering all non-manufacturer/non-FAA/non-EASA designed repairs or alterations, including the submittal to the FAA or EASA for an STC or Form 337, if applicable. The data packages shall include the following:	
 
 	(i)	engineering orders;	
 
 	(ii)	drawings;	
 
 	(iii)	parts lists;	
 
 	(iv)	installation documentation;	
 
 	(v)	engineering analysis as submitted to obtain the STC or Form 337 approval;	
 
 	(vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	(vii)	maintenance program supplements; and	
 
 	(viii)	any and all reference documents referenced by documents contained in this section (4).	
 
(f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts.	
 
(g)	Digital Flight Data Recorder System technical description.	
 
5	Aircraft Maintenance Status Summaries	
 
(a)	Certified current Time in Service (Flight Hours & Cycles);	
 
(b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
(c)	Certified status of system, zonal and structural tasks, including SSI (including last accomplished and next due) and other scheduled tasks as per MPD number (in paper and workable electronic format);	
 
(d)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
(e)	Certified listing of Aircraft, Landing Gear, Engine and APU components status to the extent required by the Air Authority or EASA by P/N – S/N – Description Position –TSO - TSN, CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
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(f)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent EASA or FAA approval;	
 
(g)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any);	
 
(h)	Declaration of Aircraft Accident/Incident Report and major repairs, if any; and	
 
(i)	Structural repairs and damage report (including Dent & Damage Chart) for pressure vessel, and unpressurized areas.	
 
6	Aircraft Maintenance Records	
 
(a)	Aircraft maintenance log from the past 24 months;	
 
(b)	Cabin maintenance log from the past 24 months;	
 
(c)	A Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of A Checks (or equivalent);	
 
(d)	C Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of C Checks (or equivalent);	
 
(e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (or equivalent);	
 
(f)	Last Weight & Balance Report including Schedule;	
 
(g)	Last FDR parameter check;	
 
(h)	Last Test Flight Report; and	
 
(i)	Certified Cross reference list for each MPD task number vs. last operator’s Task Card number including date/time/cycles of last accomplished and next due.	
 
7	Configuration Status	
 
(a)	EASA Approved and certified LOPA;	
 
(b)	Galley Drawings;	
 
(c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
(d)	Inventory Listing of Avionics installed units;	
 
(e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Manual;	
 
(f)	List of applicable STC’s;	
 
(g)	Aircraft Detail Specification; and	
 
(h)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.).	
 
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8	Aircraft Historical Records	
 
(a)	Copy of original Export Certificate of Airworthiness;	
 
(b)	Manufacturer’s AD Report;	
 
(c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
(d)	Manufacturer’s repair/alteration report (at new delivery), or statement that no such report was produced;	
 
(e)	Manufacturer’s SB Report;	
 
(f)	Copies of all Supplemental Type Certificates;	
 
(g)	Last Flight Data Recorder Read-out and calibration standards;	
 
(h)	Weighing reports; and	
 
(i)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, landing gear and APU changes, etc.	
 
9	Engine Records	
 
(a)	Engine log book or Engine Data Submittal;	
 
(b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
(c)	Manufacturer Delivery Documents;	
 
(d)	Complete copies of all historical engine/ module shop visit reports and engine last shop visit report;	
 
(e)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of each module;	
 
(f)	On Wing Repair records;	
 
(g)	Engine Log Book/ Master Records of Installation/Removals;	
 
(h)	Last Borescope Report, including video if available;	
 
(i)	Test Cell Run Report for any shop visit;	
 
(j)	If the Engines have not been involved in an incident, certified Statement that Engines are not involved in an accident;	
 
(k)	Certified “On-Watch” statement;	
 
(l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
(m)	List of repetitive inspections that are not required by AD;	
 
(n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
(o)	Certified Accessory LRU List with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1) for installed LRU’s;	
 
(p)	Last engine run and power assurance report;	
 
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(q)	All Life Limited Parts (“LLPs”) will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total cycles accumulated in each Engine or module;	
 
(r)	Each LLP will have a signed and certified cover page including engine or module total hours, total cycles, part total hours, total cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
(s)	Engine Manufacturer’s or FAA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation; and	
 
(t)	Engine Manufacturer’s, EASA or FAA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
10	APU	
 
(a)	Certified Statement on Status of APU;	
 
(b)	In house modifications (if applicable);	
 
(c)	Approved Release to Service Certification for installed units;	
 
(d)	APU Log Book/ Master Record of Installation/ Removals;	
 
(e)	Complete copies of all APU Shop Visit Reports & reason for removal;	
 
(f)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of the APU;	
 
(g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
(h)	Last APU Borescope Report;	
 
(i)	Last Test Run Report for any shop visit;	
 
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(j)	All Life Limited Parts will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total Cycles accumulated in each Engine or module;	
 
(k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
(l)	APU manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the APU Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation; and	
 
(m)	APU manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the APU Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
11	Components	
 
(a)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/overhaul records for hard time components (whether tracked on an individual component basis or controlled as part of scheduled airframe check); and	
 
(b)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/ overhaul records for on condition and condition monitored components.	
 
12	Landing Gear	
 
(a)	Approved Release to Service Certification for each fully built gear assembly, or major assemblies on each gear, as applicable, including either FAA 8130-3 or JAA/EASA Form 1;	
 
(b)	Last Shop Visit Report; and	
 
(c)	Statement which indicates if the Aircraft operates with BSCU software L4.1 or L4.5.	
 
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13	Repairs	
 
(a)	Manufacturer’s or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
(b)	all repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or EASA approved data. Repairs will not have any time limitations for removal, repair, or replacement. There shall be no special or distinct inspection requirements;	
 
(c)	all repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent;	
 
(d)	all repairs to un-pressured parts of the Aircraft shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent; and	
 
(e)	a repair and dent map shall be provided which includes the following:	
 
 	(i)	Photo (if available) or drawing of the location, type and form of the repair;	
 
 	(ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3 or Form 8100-9 if applicable, material utilized in the repair, DER paperwork, and any engineering data utilized; and	
 
 	(iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire Aircraft to include fuselage, empennage, and wings as well as an additional separate map of all dents on the aircraft.	
 
14	Software	
 
(a)	All software and databases associated with or relating to any electronic or avionic equipment, if any, shall be compliant with the manufacturer’s recommended standards at time of delivery, except for Lessee customized or Lessee proprietary software and databases. Any proprietary software or databases shall be replaced by generic equivalents;	
 
(b)	a certified listing of onboard loadable software and databases to include the following:	
 
 	(i)	ATA chapter;	
 
 	(ii)	nomenclature;	
 
 	(iii)	part number;	
 
 	(iv)	revision date; and	
 
 	(v)	expiration date;	
 
(c)	controlled diskettes or other seller provided physical media as appropriate for directly loading the software onto the Aircraft shall be provided as part of the documentation (subject to express licensing or patent restrictions); and	
 
(d)	procedures for obtaining downloadable software from the internet.	
 
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APPENDIX 8
PART 1
RETURN OF THE AIRCRAFT
 
1	Return	
On the Scheduled Expiry Date or termination of the leasing of the Aircraft under this Agreement Lessee will, unless a Total Loss has occurred, at its expense, redeliver the Aircraft and Aircraft Documents to Lessor at an FAA or EASA approved maintenance facility at a location in Mexico or European Union agreed between Lessor and Lessee or, in absence of any agreement, as specified by Lessor (the “ Redelivery Location ”), in a condition complying with Part of 2 of this Appendix 8, (the “ Return Condition ”) free and clear of all Security Interests and Permitted Liens (other than Lessor Liens) and thereupon, at Lessor’s request cause the Aircraft to be deregistered by the Air Authority.
 
2	Pre-Redelivery Technical Report and Inspection	
No later than six (6) months prior to the Scheduled Expiry Date, Lessee will provide Lessor with a technical report in a form to be agreed between Lessee and Lessor (each acting reasonably) summarising the current specification and maintenance status of the Aircraft, the equipment fitted on the Aircraft and status of the Aircraft Documents and allow Lessor to perform an inspection of the Aircraft and the Aircraft Documents.
 
3	Aircraft Document Review	
At least ten (10) days prior to the Scheduled Expiry Date Lessee shall make all key Aircraft Documents available to Lessor for review.
 
4	Final Inspection	
Immediately prior to Redelivery, Lessee will make the Aircraft available to Lessor and the Security Trustee for a full-systems functional and operational inspection and other types of reasonable inspections based on the Aircraft type, age, use and other known factors with respect to the Aircraft (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with this Agreement. The Final Inspection will take place in conjunction with the Major Check to be carried out prior to Redelivery and in no event less than 2 weeks prior to Redelivery in accordance with this Agreement and be long enough to permit Lessor to:
 
(a)	perform a full inspection of the Aircraft Documents;	
 
(b)	inspect the Aircraft and uninstalled Parts;	
 
(c)	inspect the Engines (at Lessor’s cost), including without limitation (i) a hot and cold section video boroscope inspection of all areas (ii) engine condition runs and (iii) trend monitoring data in accordance with the Engine Manufacturer’s maintenance manual; and	
 
(d)	inspect the APU, including without limitation:	
 
 	(i)	perform an APU condition run; and	
 
 	(ii)	hot and cold section video borescope inspection of all areas.	
 
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Any deviations from the Return Condition will be discussed in good faith between Lessor and Lessee with a view to resolving each discrepancy prior to the Acceptance Flight (as defined in paragraph 5 below).
The cost of the Final Inspection (including the cost of rectifying any deviations from Return Condition but excluding any costs relating to Lessor’s employees or representatives) shall be borne by Lessee and any defects or deficiencies found during such inspection shall be rectified at Lessee’s cost.
 
5	Acceptance Flight	
Immediately prior to the redelivery of the Aircraft, Lessee will carry out for Lessor a demonstration flight in accordance with the Manufacturers’ standard flight operation check flight procedures for in service aircraft (the “ Acceptance Flight ”), or, if agreed to in writing by Lessor, in accordance with an airline acceptance flight procedure, either of which will be for the duration necessary to perform such acceptance flight procedures. The costs of such acceptance flight, up to a maximum duration of two (2) hours, will be on account of Lessee.
 
6	Non-Compliance	
To the extent that, at the time of the Acceptance Flight, the condition of the Aircraft does not comply with this Agreement, Lessee will at Lessor’s option:
 
(a)	immediately rectify the non-compliance and to the extent the non-compliance extends beyond the Expiry Date, the Term will be automatically extended and this Agreement will remain in force until the non-compliance has been rectified; or	
 
(b)	redeliver the Aircraft to Lessor and indemnify Lessor, and provide to Lessor’s satisfaction cash as security for that indemnity, against the cost of putting the Aircraft into the condition required by this Agreement.	
In respect of minor discrepancies in the Return Condition, Lessor and Lessee shall negotiate in good faith with a view to agreeing arrangements whereby Lessee rectifies the discrepancies immediately after redelivery and if such arrangements are agreed between Lessee and Lessor the provisions of paragraph (b) above shall not apply.
 
7	Redelivery	
Simultaneously with redelivery Lessee will provide to Lessor all documents necessary to export the Aircraft from the State of Registration and Habitual Base (including, without limitation, a valid and subsisting export certificate of airworthiness stating the exceptions (if any) and applicable waivers from the Aircraft type certificate for the Aircraft) and required in relation to the deregistration of the Aircraft with the Air Authority.
 
8	Acknowledgement	
Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.
 
9	Maintenance Programme:	
 
(a)	Prior to the Expiry Date and upon Lessor’s request, Lessee will provide Lessor or, subject always to Clause 18, its agents reasonable access to the Agreed Maintenance Programme and the Aircraft Documents in order to facilitate the Aircraft’s integration into any subsequent operator’s fleet.	
 
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(b)	Lessee will, if requested by Lessor to do so, before the return of the Aircraft deliver to Lessor a certified true current and complete copy of the Agreed Maintenance Programme. Lessor agrees that it will not disclose the contents of the Agreed Maintenance Programme to any person or entity except to the extent necessary to monitor Lessee’s compliance with this Agreement and/or to bridge the maintenance programme for the Aircraft from the Agreed Maintenance Programme to another programme after the Expiry Date.	
 
(c)	If at redelivery, there are any missing or incomplete documents or records, Lessee will, at its cost and expense, re-accomplish, or cause to be re-accomplished, the tasks necessary to produce such records prior to redelivery of the Aircraft.	
 
10	Storage	
Upon redelivery of the Aircraft, Lessee shall if given at least thirty (30) days prior written notice by Lessor use its reasonable endeavours to assist Lessor having regard to, inter alia, Lessee’s space and operational requirements and any required approvals, to store, maintain and insure the Aircraft at Lessor’s cost at Lessee’s principal operating base for a period not exceeding sixty (60) days from the redelivery of the Aircraft. For the avoidance of doubt, Lessee shall not be required to store, maintain and insure the Aircraft under this paragraph, if Lessee reasonably determines that to do so would adversely affect its commercial operations.
 
11	Ferry Flight	
Upon redelivery of the Aircraft, Lessee will, at Lessor’s sole risk and expense, and provided that: (a) Lessor has irrevocably and unconditionally accepted Redelivery of the Aircraft as evidenced by the delivery to Lessee of a certificate confirming technical acceptance in form and substance satisfactory to Lessee (acting reasonably) and has executed and delivered in escrow an acknowledgement confirming acceptance of the Aircraft satisfactory to Lessee (acting reasonably) with instructions to release the same to Lessee immediately upon arrival of the Aircraft to the Ferry Flight destination; and (b) Lessee receives not less than thirty (30) days prior written notice from Lessor, fly the Aircraft from the Redelivery Location to such location as Lessor may designate (the “ Ferry Flight ”) (provided that Lessee is licensed and fully authorized to do so by all relevant authorities). Lessee will provide insurance coverage for the duration thereof equivalent to that provided by the policies required upon Appendix 7. The Lessor shall promptly reimburse Lessee the actual costs incurred by Lessee (without any element of Lessee profit or Lessee mark up) in performing such Ferry Flight, including maintaining the insurances in connection therewith, upon presentation of appropriate invoices.
 
12	Fuel	
Immediately after redelivery of the Aircraft to Lessor, an adjustment will be made in respect of fuel on board on the Delivery Date and the Expiry Date at the price then prevailing at the Redelivery Location.
 
13	Rent	
Within five (5) Business Days after:
 
(a)	Redelivery in accordance with and in the condition required by this Agreement; or	
 
(b)	payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date;	
or in each case such later time as Lessor is satisfied that Lessee has irrevocably paid to Lessor all amounts which may then become payable under this Agreement and any Other Agreement, Lessor will:
 
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 	(i)	pay to Lessee the amount of any Rent received in respect of any period falling after the Redelivery Date or payment of the Agreed Value, as the case may be; and	
 
 	(ii)	if so requested by Lessee, return the balance of any Deposit (together with any interest accrued thereon pursuant to this Agreement) then held by Lessor.	
 
14	Warranties	
Lessee shall comply with its obligations under Clause 10.
 
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APPENDIX 8
PART 2
OPERATING CONDITION AT REDELIVERY
On the Expiry Date the Aircraft, subject to fair wear and tear generally, will be in the condition set out below:
 
1	GENERAL CONDITION	
The Aircraft will:
 
(a)	be airworthy and in good operating condition, conforming to FAA or EASA type design certification and be clean by scheduled, passenger airline standards and will be configured in the same configuration as at Delivery (except for the cabin which shall be 174Y) or such other configuration as Lessor may agree;	
 
(b)	be returned with Lessor’s Engines and all Parts installed and with the same equipment as at Delivery, subject to replacements permitted under this Agreement;	
 
(c)	have installed the full complement of systems, equipment, parts, accessories, furnishings and loose equipment as normally installed in the Aircraft for continued regular airline service operating within limits specified in the Manufacturer’s maintenance manual and functioning in accordance with their intended use and in compliance with operations under EU OPS 1, EASA Part M, or its successors equipment standards;	
 
(d)	have a currently valid certificate of airworthiness issued by the Air Authority and a valid export certificate of airworthiness (and a deregistration certificate) issued by the Air Authority to such a country as will be specified by the Lessor and be in a condition qualifying for immediate issue of certificate of airworthiness pursuant to a Lessor specified EASA/EASA member state to EU OPS 1, EASA Part M, or its successors standard;	
 
(e)	have immediately prior to redelivery, completed a C Check and no structural, systems, zonal and CPCP Airframe inspections will be due within the next following 6,000 Flight Hours and 4,500 Cycles and 20 months in accordance with the Maintenance Planning Document;	
 
(f)	be in compliance with all Airworthiness Directives issued by FAA and EASA existing as at the Expiry Date and Mandatory Service Bulletins (which are mandatory or in respect of which Lessee is complying for its other Fleet Aircraft), which require compliance prior to the redelivery;	
 
(g)	if any waivers, alternate means of compliance, dispensations, extensions or carryovers with respect to any Airworthiness Directives or mandatory orders are granted by the Air Authority or permitted by the Agreed Maintenance Programme, the Lessee will nonetheless perform such Airworthiness Directives or mandatory orders as if such waivers, alternate means of compliance, dispensations or extensions did not exist;	
 
(h)	have installed all applicable original equipment manufacturer’s and manufacturer’s service bulletin kits received free of charge by the Lessee that are appropriate for the Aircraft and to the extent not installed, those kits will be furnished free of charge to the Lessor;	
 
(i)	at redelivery, be painted in Lessee’s exterior livery with such painting having been accomplished in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft;	
 
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(j)	have all signs and decals clean, secure and legible;	
 
(k)	meet the requirements of ICAO Annex 16, Chapter 3 noise compliance (as stated in the Air Authority issued noise certificate) without waiver or restriction;	
 
(l)	have no open, deferred, continued, carry over or placard log book items and have no temporary or time-limited structural repairs. No special or unique inspection or check requirements which are specific to the Aircraft (as opposed to all aircraft of the same model) will exist with respect to the Aircraft;	
 
(m)	be free of fuel, oil, hydraulic and pneumatic leaks in excess of maintenance manual limits allowing continued in service operation without special inspection. Hydraulic and pneumatic leaks will be within maintenance manual limits for continued operation. Any temporary leak repairs will have been replaced by Permanent Repairs. All oil and hydraulic tanks and reservoirs and systems along with lavatory and potable water tanks and systems shall have been freshly and full serviced;	
 
(n)	have all non-structural repairs, modifications and alterations accomplished in accordance with Airframe Manufacturer’s service bulletins or Airframe Manufacturer’s written approval (with a statement of conformity to type certificate data);	
 
(o)	have no less than the Aircraft flight manual approved design weights; and	
 
(p)	be in compliance with all Maintenance Planning Document structural tasks as single aircraft, without reliance upon the compliance status or structural sampling of the other Fleet Aircraft.	
 
1.2	The Lessee agrees if requested in writing by Lessor at least ninety (90) days prior to Redelivery to perform or cause to be performed, during the Final Inspection, providing such work does not cause the planned grounding of the Aircraft to be extended or for Redelivery to be delayed, any other work reasonably requested by the Lessor to enable the Aircraft to be placed on another maintenance programme and the Lessor shall reimburse the Lessee for the reasonable actual cost of such other work required by the Lessor at the Lessee’s best rate to third parties where the work is performed by Lessee or pay all costs incurred by Lessee for such work where such work is performed by a third party.	
 
2	COMPONENTS	
 
(a)	Each Flight Hour and Cycle controlled Hard Time Component (other than the Landing Gear and APU) shall have not less than 6,000 Flight Hours and 4,500 Cycles (or 100% of Hard-Time life if this interval is less) of life remaining to the next scheduled removal, in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document (including the Airworthiness Limitations). Each calendar controlled Hard Time Component including safety equipment will have not less than 20 months or 100% life remaining (whichever is less) to the next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document. Hard Time Components shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as EASA/EASA form 1 or FAA form 8130-3. For this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and which can have life fully restored through appropriate maintenance.	
 
(b)	Each Airframe Life-Limited Component will have not less than 6,000 Flight Hours and 4,500 Cycles and 20 months remaining to next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and Aircraft EASA type certificates and will be supported by certification documentation necessary to	
 
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 	demonstrate traceability back to birth. For this purpose “ Airframe-Life Limited Component ” means a component with an ultimate life which cannot be restored through appropriate maintenance.	
 
(c)	Each “ on-condition ” and “ condition-monitored ” component will be serviceable and shall be supported by appropriate certification documentation such as EASA form 1 or FAA form 8130-3 at the point of last installation on the Aircraft if replaced since Aircraft new delivery. The “ condition-monitored ” components shall be supported by an appropriate reliability programme and data in accordance with the Agreed Maintenance Programme.	
 
(d)	The installed components will have total Flight Hours and Cycles since new no more than 110% of the Aircraft total Flight Hours and Cycles since new.	
 
(e)	There shall be no PMA Parts on the Aircraft, save for consumable parts. For these purposes “ consumable parts ” means any non-serialised item of aircraft material which is used only once and is not re-usable, such as (but not limited to) filters, seals, lubricants, cements, compounds, paints, chemicals, dyes and sealants.	
 
3	ENGINES	
The original Engine or Suitable Replacement Engine (in case of Total Loss) is in the configuration as permitted under this Agreement installed on the Aircraft shall comply with the following:
 
(a)	have no less than 4,500 Cycles scheduled life remaining in respect of Engine LLPs and no more than 110% of the Aircraft total Flight Hours and Cycles since new. Engine Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(b)	will have accumulated no more than 7,000 Flight Hours and 7,000 Cycles since new or last Engine Performance Restoration shop visit.	
 
(c)	shall be serviceable and capable of full rated performance without limitations throughout the entire operating envelop of the Aircraft as defined in the EASA AFM. Each Engine shall have at least 25C sea level hot day EGT margin;	
 
(d)	all items beyond the Engine Manufacturer’s in-service limits will be repaired;	
 
(e)	will have just completed at the Redelivery Location on or about the Redelivery Date an all module, hot and cold section video borescope inspection. Lessee will also have just completed in respect of each Engine an inspection of each magnetic chip detector, laboratory oil sample analysis, main oil screen and oil and fuel filter inspections. Any defects discovered in such inspections which exceed the Engine Manufacturer’s in-service limits shall be corrected at the Lessee’s expense. No Engine shall be “ on watch ” for any reason requiring any special or out of sequence inspection or reduced interval inspections. Each such Engine will comply with and have been maintained in accordance with the Agreed Maintenance Programme without waiver or exceptions. All items beyond the Engine manufacturer’s in-service limits shall be repaired; and	
 
(f)	have trend or condition monitoring data over at least the previous year; if Engine trend or condition monitoring data indicates a rate of acceleration in performance deterioration over at least the previous ninety days, which is higher than normal based on the maintenance experience of the Engine Manufacturer in operating the same model of engines, under similar conditions, the Lessee will, prior to redelivery, cause to be corrected such conditions which are determined to have exceeded tolerances defined for such engines in the Manufacturer’s maintenance manual or are otherwise determined to be causing such performance deterioration.	
 
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4	FUSELAGE, WINDOWS AND DOORS	
 
(a)	The fuselage and doors will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs.	
 
(b)	Windows will be free of major delamination, blemishes and crazing in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and will be properly sealed.	
 
(c)	Doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
(d)	All external repairs for the pressurised fuselage shall have been reviewed in accordance with the latest revision of the Manufacturer’s repair assessment programme (if issued, and otherwise in accordance with the Manufacturer’s published guidelines) applicable at the time of repair and supported by certified documentation evidencing accomplishment in accordance with EASA or FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Manufacturer’s written approval or FAA/EASA STC (Supplemental Type Certificate) or FAA Form 8110- 3/8100-9 approval or otherwise approved by the EASA or FAA.	
 
5	WINGS AND EMPENNAGE	
 
(a)	The wings including nacelles and empennage will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs.	
 
(b)	Unpainted surfaces will be in the same condition as at Delivery, fair wear and tear accepted.	
 
(c)	The wings will be free of fuel leaks in accordance with the maintenance manual allowing continued in service operation without special inspection or other action. The fuel tanks will have recently undergone an anti-fungal and biological growth contamination laboratory evaluation, with appropriate correction taken in accordance with the Manufacturer’s maintenance manual in the event excessive levels of contamination are identified.	
 
6	INTERIOR AND COCKPIT	
 
(a)	The aircraft shall be in 174Y configuration or a configuration agreed between the Lessor and the Lessee.	
 
(b)	The Aircraft interior including cockpit, windows, main cabin and cargo compartments shall have been maintained in accordance with the Agreed Maintenance Programme will be clean by normal industry standards, with all components free of excessive levels of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operation.	
 
(c)	No less than 50 per cent (50%) of aisle seats shall have moveable armrests.	
 
(d)	The Aircraft shall have reinforced cockpit door.	
 
(e)	The flight deck shall be clean, substantially free of stains and cracks in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and all systems shall function properly.	
 
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(f)	Soft furnishings including galley floor coverings, carpets, curtains, seat covers and seat cushions will be in good condition, freshly cleaned and free of stains and meet EASA/FAA 25.853 and any subsequent EASA/FAA fire resistance regulations.	
 
(g)	Interior panels (including overhead bins, sidewall and ceiling panels, bulkheads and cargo compartment panels), and related seals (including window seals) shall be clean and substantially free of holes, cracks, temporary repairs and numerous dents.	
 
(h)	All signs and decals shall be clean secure and legible.	
 
(i)	Lessee’s logos, insignias and proprietary markings shall be removed and the surface restored or repainted such that no evidence of such items remains.	
 
(j)	Safety belts and harnesses shall be free of stains, discolouration, and fraying other than minor stains, discolouration and fraying.	
 
(k)	Seats, lavatories and galleys shall be to an international airline standard and shall be fully serviceable, in good condition and repainted as necessary.	
 
(l)	All panels and nets in the cargo compartment shall be in good condition; all rollers and cargo restraint / nets and moving mechanisms shall be serviceable; and all compartments shall meet the then current the EASA and FAA fire regulations; all doors shall be rigged and functioning properly; and the compartments shall be freshly painted.	
 
(m)	All interior placards shall be in the English language.	
 
7	LANDING GEAR; WHEELS AND BRAKES	
 
(a)	The Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary and the Landing Gear shall have been stripped and repainted during any Landing Gear Overhaul (if applicable).	
 
(b)	Each installed Landing Gear shall have no less than 4,500 Cycles and 24 months (whichever is the most limiting factor) life remaining to the next scheduled removal in accordance with Agreed Maintenance Programme and the Maintenance Planning Document. Life Limited Part within each installed Landing Gear shall have not more than 110% of the Airframe total Cycles since new and certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The Landing Gear modification standard will meet the manufacturer requirements for an Aircraft Maximum Take-Off Weight as of delivery.	
 
(d)	The brakes will incorporate brake cooling fans.	
 
(e)	The tyres, wheels and brakes will have on average, not less than half of their useful life remaining but in no case, less than 25% of their useful life remaining.	
 
(f)	The wheels and brakes of the Landing Gear shall be manufactured by either Goodrich or Messier.	
 
8	AUXILIARY POWER UNIT	
 
(a)	The APU will be serviceable in accordance with the requirements of the Maintenance Manual as evidenced by Maintenance Manual tests and inspections.	
 
(b)	APU Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
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(c)	The APU will have not accumulated more than 4,000 APU Hours of operation since new or last APU Performance Restoration.	
 
(d)	The APU will have completed a video borescope inspection prior to redelivery and any defects discovered in such inspection, which exceed the APU manufacturer in-service limits, will be corrected.	
 
9	CORROSION	
 
(a)	The Aircraft shall be in compliance with the Manufacturer’s CPCP document, the CPCP requirements of the Maintenance Planning Document and FAA CPCP airworthiness directive requirements.	
 
(b)	The entire fuselage will be substantially free from corrosion and all mild and moderate corrosion found will be adequately cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s structural repair manual.	
 
10	WEIGHT AND BALANCE	
The weight and balance Schedule will be accurate, current and represent the Aircraft’s configuration at the time of redelivery.
 
11	FUEL TANKS AND SYSTEMS	
There will be no untreated or uncorrected fungus or corrosion including fungus or corrosion within the fuel tanks and fuel systems, and the Lessee will ensure that all fuel tanks are tested for fungus or other contamination, rectified and treated when applicable and certified clear.
 
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APPENDIX 8
PART 3
AIRCRAFT DOCUMENTS AT REDELIVERY
All Aircraft Documents will be in the condition as on Delivery, amended as required by the terms of this Agreement, by the Air Authority and by the EASA and FAA up to the Redelivery Date.
All of the Aircraft Documents referred to in the preceding sentence will be made available at Redelivery to the Lessor for inspection and will be in accordance with the regulations of the Air Authority.
The Aircraft Documents will include a list of all tasks performed by the Lessee between Delivery and Redelivery.
The following documentation and information is part of the Aircraft and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate. Workable electronic copies should be provided if available.
Bulk storage media (CD, DVD) shall be in an industry standard format, requiring no proprietary or “ fee added ” software to access.
Any costs associated with decustomisation of manuals provided by the Manufacturer’s online service shall be borne by Lessee.
 
(1)	Certificates	
 
 	(c)	Certificate of Airworthiness;	
 
 	(d)	Certificate of Registration;	
 
 	(e)	Aircraft De-Registration Confirmation (if applicable);	
 
 	(f)	Export Certificate of Airworthiness issued by the last country of registry;	
 
 	(g)	Noise Limitation Certificate (AFM page); and	
 
 	(h)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	(i)	Certification of compliance with fire blocking requirements as outlined in the applicable regulation;	
 
 	(ii)	Bottom Seat cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iii)	Back rest cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(v)	Carpets;	
 
 	(vi)	Curtains; and	
 
 	(vii)	Interior Surfaces (if refurbished).	
 
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(2)	Manuals	
 
 	(a)	EASA/FAA Approval Airplane Flight Manual;	
 
 	(b)	Weight and Balance Manual and Supplements (in U.S. units), including last weigh paperwork;	
 
 	(c)	Operations Manual (Manufacturer’s generic);	
 
 	(d)	Quick Reference Handbook (Manufacturer’s generic);	
 
 	(e)	Structural Repair Manual;	
 
 	(f)	Aircraft Maintenance Manual;	
 
 	(g)	Component Maintenance Manuals, (CMM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	(i)	Galleys;	
 
 	(ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	(iii)	Lavatories;	
 
 	(iv)	Toilet Assemblies;	
 
 	(v)	Closets;	
 
 	(vi)	Class Dividers (if applicable); and	
 
 	(vii)	Passenger Seats;	
 
 	(h)	Aircraft Illustrated Parts Catalog (I.P.C.) (Operator Customized), if Lessee uses a numbering system which differs from the system used by the Manufacturers, Lessee will provide a certified cross reference listing, which shall include each part number used by Lessee and cross referenced to the Manufacturer’s part number;	
 
 	(i)	Operator part number to manufacturer part number cross reference;	
 
 	(j)	Aircraft Wiring List;	
 
 	(k)	Aircraft Schematics Manual;	
 
 	(l)	Engine CMM, IPC;	
 
 	(m)	APU CMM, IPC;	
 
 	(n)	Latest operator’s Maintenance Program;	
 
 	(o)	Latest operator’s Minimum Equipment List;	
 
 	(p)	Configuration Deviation List; and	
 
 	(q)	Any other Manual originally delivered by Airbus to the Lessee, Technical documentation, Manuals).	
 
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(3)	Airworthiness Directives Documentation	
 
 	(a)	The Aircraft shall have all records associated with AD compliance:	
 
 	(i)	A complete and current applicable AD status list of each Airframe, appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	AD number and revision number;	
 
 	(2)	AD title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected); and	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability.	
 
 	(b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at redelivery of the Aircraft, and countersigned by Lessor at Delivery or by Lessee at redelivery of the Aircraft. The list shall also be delivered in workable electronic format.	
 
 	(c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each AD If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work.	
 
 	(d)	Exemptions or deviations granted by the FAA or EASA (as applicable) on AD compliance, including copy of exemption request.	
 
 	(e)	Items c) and d) will be provided in document packages for each AD. Each package will contain all documents relative to the AD/Aircraft combination, and include copies of the AD.	
 
(4)	Engineering Documentation	
 
 	(a)	A current list (in paper and workable electronic format) of Airframe, appliance, Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Aircraft, each Engine and the APU. For appliances, only AD related Service Bulletins and Engineering Orders are required.	
 
 	(b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	(i)	SB number and revision number;	
 
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 	(ii)	SB title;	
 
 	(iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	(iv)	Engineering documentation reference;	
 
 	(v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(vi)	Specify terminated or repetitive status;	
 
 	(vii)	Date of initial accomplishment of each portion of such engineering document;	
 
 	(viii)	Date of last maintenance accomplishment, if repetitive;	
 
 	(ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable; and	
 
 	(x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected).	
 
 	(c)	FAA or EASA approvals (as applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances).	
 
 	(d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any seller.	
 
 	(e)	Data packages covering all non-manufacturer/non-EASA/non-FAA-designed repairs or alterations, including the submittal to the FAA or EASA for an STC or Form 337, if applicable. The data packages shall include the following:	
 
 	(i)	engineering orders;	
 
 	(ii)	drawings;	
 
 	(iii)	parts lists;	
 
 	(iv)	installation documentation;	
 
 	(v)	engineering analysis as submitted to obtain the STC or Form 337 approval;	
 
 	(vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	(vii)	maintenance program supplements; and	
 
 	(viii)	any and all reference documents referenced by documents contained in this section (4);	
 
 	(f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts.	
 
 	(g)	Digital Flight Data Recorder System technical description.	
 
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(5)	Aircraft Maintenance Status Summaries	
 
 	(a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	(b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	(c)	Certified status of system, zonal and structural tasks, including SSI (including last accomplished and next due) and other scheduled tasks as per MPD number (in paper and workable electronic format);	
 
 	(d)	Certified status of CPCP (including last accomplished and next due);	
 
 	(e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine LLPs and, to the extent any Engine LLPs have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
 	(f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status to the extent required by the Air Authority or EASA by P/N – S/N – Description Position TSO - TSN, CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	(g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent EASA or FAA approval;	
 
 	(h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any);	
 
 	(i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any; and	
 
 	(j)	Structural repairs and damage report (including Dent & Damage Chart) for pressure vessel, and unpressurized areas.	
 
(6)	Aircraft Maintenance Records	
 
 	(a)	Aircraft maintenance log from the past 24 months;	
 
 	(b)	Cabin maintenance log from the past 24 months;	
 
 	(c)	A Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of A Checks (or equivalent);	
 
 	(d)	C Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of C Checks (or equivalent);	
 
 	(e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (or equivalent);	
 
 	(f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	(g)	Last Weight & Balance Report including Schedule;	
 
 	(h)	Last FDR parameter check;	
 
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 	(i)	Last Test Flight Report; and	
 
 	(j)	Certified Cross reference list for each MPD task number vs. last operator’s Task Card number including date/time/cycles of last accomplished and next due.	
 
(7)	Configuration Status	
 
 	(a)	EASA or FAA Approved and certified LOPA;	
 
 	(b)	Galley Drawings;	
 
 	(c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	(d)	Inventory Listing of Avionics installed units;	
 
 	(e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	(f)	List of applicable STC’s;	
 
 	(g)	Aircraft Detail Specification;	
 
 	(h)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	(i)	Electrical Load Analysis documents and data.	
 
(8)	Aircraft Historical Records	
 
 	(a)	Copy of original Export Certificate of Airworthiness;	
 
 	(b)	Manufacturer’s AD Report;	
 
 	(c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	(d)	Manufacturer’s repair/alteration report (at new delivery), or statement that no such report was produced;	
 
 	(e)	Manufacturer’s SB Report;	
 
 	(f)	Copies of all Supplemental Type Certificates;	
 
 	(g)	Last Flight Data Recorder Read-out and calibration standards;	
 
 	(h)	Weighing reports;	
 
 	(i)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, landing gear and APU changes, etc.; and	
 
 	(j)	any other documents as per List of Technical Documents provided by Airbus at new delivery.	
 
(9)	Engine Records	
 
 	(a)	Engine log book or Engine Data Submittal;	
 
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 	(b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	(c)	Manufacturer Delivery Documents;	
 
 	(d)	Complete copies of all historical engine/ module shop visit reports and engine last shop visit report;	
 
 	(e)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of each module;	
 
 	(f)	On Wing Repair records;	
 
 	(g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	(h)	Last Borescope Report, including video if available;	
 
 	(i)	Last Test Cell Run Report for any shop visit;	
 
 	(j)	If the Engines have not been involved in an incident, certified Statement that Engines are not involved in an accident;	
 
 	(k)	Certified “ On-Watch ” statement;	
 
 	(l)	List of “ On-Watch Items ” items requiring repetitive inspections;	
 
 	(m)	List of repetitive inspections that are not required by AD;	
 
 	(n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	(o)	Certified Accessory LRU List with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1) for installed LRU’s;	
 
 	(p)	Engine Trend Monitoring data for the last 12 months of operation (it being agreed that Lessor and Lessee shall discuss in good faith the cost in connection with the provision of such report prior to Redelivery);	
 
 	(q)	Last engine run and power assurance report;	
 
 	(r)	All Life Limited Parts (“ LLPs ”) will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total cycles accumulated in each Engine or module;	
 
 	(s)	Each LLP will have a signed and certified cover page including engine or module total hours, total cycles, part total hours, total cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	(t)	Engine Manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
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 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation;	
 
 	(u)	Engine Manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
(10)	APU	
 
 	(a)	Certified Statement on Status of APU;	
 
 	(b)	In house modifications (if applicable);	
 
 	(c)	Approved Release to Service Certification for installed units;	
 
 	(d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	(e)	Complete copies of all APU Shop Visit Reports & reason for removal;	
 
 	(f)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of the APU;	
 
 	(g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	(h)	Last APU Borescope Report;	
 
 	(i)	Last Test Run Report for any shop visit;	
 
 	(j)	All Life Limited Parts will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total Cycles accumulated in each Engine or module;	
 
 	(k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	(l)	APU manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the APU Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
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 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation;	
 
 	(m)	APU manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the APU Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
(11)	Components	
 
 	(a)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/overhaul records for hard time components (whether tracked on an individual component basis or controlled as part of scheduled airframe check); and	
 
 	(b)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/ overhaul records for on condition and condition monitored components.	
 
(12)	Landing Gear	
 
 	(a)	Approved Release to Service Certification for each fully built gear assembly, or major assemblies on each gear, as applicable, including either FAA 8130-3 or JAA/EASA Form 1;	
 
 	(b)	Last Shop Visit Report; and	
 
 	(c)	Statement which indicates if the Aircraft operates with BSCU software L4.1 or L4.5.	
 
(13)	Repairs	
 
 	(a)	Manufacturer’s or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	(b)	All repairs will be in accordance with the Manufacturer’s maintenance manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or EASA approved data. Repairs will not have any time limitations for removal, repair, or replacement. There shall be no special or distinct inspection requirements;	
 
 	(c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent;	
 
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 	(d)	All repairs to un-pressured parts of the Aircraft shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent; and	
 
 	(e)	A repair and dent map shall be provided which includes the following:	
 
 	(i)	Photo (if available) or drawing of the location, type and form of the repair;	
 
 	(ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3 or Form 8100-9 if applicable, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	(iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire Aircraft to include fuselage, empennage, and wings as well as an additional separate map of all dents on the aircraft.	
 
(14)	Software	
 
 	(a)	All software and databases associated with or relating to any electronic or avionic equipment, if any, shall be compliant with the manufacturer’s recommended standards at time of delivery, except for Lessee customized or Lessee proprietary software and databases. Any proprietary software or databases shall be replaced by generic equivalents;	
 
 	(b)	A certified listing of onboard loadable software and databases to include the following:	
 
 	(i)	ATA chapter;	
 
 	(ii)	nomenclature;	
 
 	(iii)	part number;	
 
 	(iv)	revision date; and	
 
 	(v)	expiration date;	
 
 	(c)	Controlled diskettes or other seller provided physical media as appropriate for directly loading the software onto the Aircraft shall be provided as part of the documentation (subject to express licensing or patent restrictions); and	
 
 	(d)	Procedures for obtaining downloadable software from the internet.	
 
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APPENDIX 9
PART 1
EVENTS OF DEFAULT
 
(a)	Lessee fails to make any payment of Rent or Agreed Value or Total Loss proceeds on the due date and such payment remains unpaid for three (3) Business Days after the due date therefor; or	
 
(b)	Lessee or the Guarantor fails to make any other payment (other than those specified in (a) above) under any of the Transaction Documents to which it is a party within ten (10) days of Lessor’s written demand for such payment; or	
 
(c)	Lessee fails to comply with any provision of Appendix 7 or any Insurance required to be maintained under that Appendix is cancelled or terminated or notice of cancellation is given in respect of any such Insurance; or	
 
(d)	Lessee or the Guarantor fails to comply with any other provision of any of the Transaction Documents to which it is a party and, if such failure is capable of remedy, the failure continues for thirty (30) days after notice from Lessor to Lessee; or	
 
(e)	any representation or warranty made (or deemed to be repeated) by Lessee or the Guarantor in or pursuant to any of the Transaction Documents to which it is a party or in any document or certificate or statement delivered pursuant thereto is or proves to have been incorrect in any material respect when made or deemed to be repeated and if capable of remedy shall not have been remedied within thirty (30) days after receipt by Lessee of written notice from Lessor; or	
 
(f)	any Financial Indebtedness of Lessee or the Guarantor individually or in the aggregate in excess of ***** is not paid when due or on demand, if payable on demand, or becomes due prior to the date when it would otherwise have become due; or the security for any such Financial Indebtedness becomes enforceable; or	
 
(g)	any consent, authorisation, licence, certificate or approval of or registration with or declaration to any Government Entity in connection with any Transaction Document (including, without limitation):	
 
 	(i)	any authorisation required by Lessee or the Guarantor to obtain and transfer freely Dollars (or any other relevant currency) out of any relevant country; or	
 
 	(ii)	required by Lessee or the Guarantor to authorise, or in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of any of the Transaction Documents to which it is a party or the performance by Lessee or the Guarantor of its obligations thereunder; or	
 
 	(iii)	the registration of the Aircraft; or	
 
 	(iv)	any air operator certificate or concession title,	
is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and in the case of (iv) is not reinstated within thirty (30) days in circumstances where Lessor is satisfied (acting reasonably) that Lessee is using its best endeavours to reinstate the same and the revocation, suspension, cancellation, withdrawal, termination or non renewal is not related to any act, omission or default of Lessee; or
 
(h)		
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	(i)	Lessee or the Guarantor is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or any responsible officer or shareholder of Lessee or the Guarantor or any person authorised by any of the above to do so, admits the inability of Lessor or the Guarantor to pay its debts as they fall due; or	
 
 	(ii)	Lessee or the Guarantor suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
(i)		
 
 	(i)	any step (including petition proposal or convening a meeting of the shareholders or directors) is taken with a view to considering a resolution to present an application for, or with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration, custodianship, liquidation, or dissolution of Lessee or the Guarantor or any other insolvency proceedings involving Lessee or the Guarantor; or	
 
 	(ii)	any order is made or resolution passed for any such composition, assignment, arrangement, rehabilitation, administration, custodianship, liquidation consurso mercantil, dissolution or insolvency proceedings, or Lessee or the Guarantor becomes subject to or enters into any of the foregoing; or	
 
 	(iii)	any liquidator, trustee in bankruptcy, judicial custodian, statutory manager, compulsory manager, receiver, síndico, administrator, examiner or the like is appointed in respect of Lessee or the Guarantor or any of its assets;	
but excluding: (X) in each case, any proceedings for the purposes of an amalgamation or reorganisation the terms of which shall have received the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where Lessor is satisfied (acting reasonably) that any such amalgamation or reorganisation will not have an adverse effect on Lessor’s or the Guarantor’s ability to perform its obligations under the Transaction Documents or on the rights of Lessor, the Security Trustee or the Lenders under the Transaction Documents to which Lessee is a party, the Assignment or the Mortgage unless during or because of such amalgamation or reorganisation Lessee or the Guarantor becomes or is declared insolvent and (Y) in the case of any non bona fide petition or action referred to in (i)(i) above taken by a creditor or creditors of Lessee or the Guarantor, Lessor is satisfied (acting reasonably) that each of Lessee or the Guarantor, as applicable, is using its best endeavours to dismiss any such petition or action and the same is dismissed or discharged within sixty (60) days; or
 
(j)		
 
 	(i)	an administrative or other receiver or manager is appointed in respect of Lessee or the Guarantor or any part of its assets; or	
 
 	(ii)	Lessee or the Guarantor requests any person to appoint such a receiver or manager; or	
 
 	(iii)	any other steps are taken to enforce any Security Interest over all or any part of the assets of Lessee or the Guarantor; or	
 
 	(iv)	any attachment, sequestration, requisa , distress or execution affects any assets of Lessee or the Guarantor and is not discharged within 14 days or where Lessor is satisfied (acting reasonably) that Lessee or the Guarantor is using its best endeavours to discharge the same, within sixty (60) days; or	
 
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(k)	there occurs in relation to Lessee or the Guarantor any event anywhere which, in the reasonable opinion of Lessor, corresponds with any of those mentioned in paragraphs (h), (i) or (j); or	
 
(l)	Lessee or the Guarantor suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business; or	
 
(m)	Lessee breaches the provisions set out in Appendix 10 paragraph 4 and/or the Guarantor breaches the provisions set out in clause 8.1 of the Guarantee; or	
 
(n)	Lessee or the Guarantor or any other person claiming by or through Lessee or the Guarantor challenges the property rights of Lessor as owner and lessor in respect of the Aircraft or the security interests of the Security Trustee and the Lenders as mortgagee and as assignee under the Mortgage and the Assignment; or	
 
(o)	any event or series of events occurs (including, without limitation, any litigation, arbitration or administrative proceedings are commenced against Lessee or the Guarantor which, if adversely determined would have a material adverse effect on Lessee’s or the Guarantor’s ability to comply with its obligations under the Transaction Documents) which, in the reasonable opinion of Lessor might have a material adverse effect on the ability of Lessee or the Guarantor to comply with its obligations under any of the Transaction Documents to which it is a party; or	
 
(p)	any event of default (howsoever defined) is continuing beyond any applicable grace period under any Other Agreement; or	
 
(q)		
 
 	(i)	the issuer of any Letter of Credit fails to make a payment under such Letter of Credit when due; or	
 
 	(ii)	any Letter of Credit is not in full force and effect, or for any reason ceases to constitute the legal, valid and binding obligations of the issuer of such Letter of Credit; or	
 
 	(iii)	the occurrence of the event listed in paragraph (g)(i) above, with respect to the performance by the issuer of such Letter of Credit of its obligations under the relevant Letter of Credit; and/or (y) paragraphs (h), (i), (j) or (k) above apply to the issuer of the relevant Letter of Credit (references in those paragraphs to Lessee being deemed to be to the issuer of such Letter of Credit); and/or (z) the issuer of such Letter of Credit ceases or suspends its business operations; or	
 
 	(iv)	the relevant Letter of Credit is not renewed within the time period specified in paragraph 2 of Appendix 5,	
unless, in the case of paragraphs (q)(ii), (iii) and (iv) above, the relevant Letter of Credit is replaced by a new Letter of Credit complying with the requirements set out in paragraph 2 of Appendix 5 or with cash in an amount equal to the Deposit, in each case, pursuant to and in accordance with the provisions of this Agreement, and each reference in this paragraph (q) to “the issuer” shall include a reference to any confirming bank for the Letter of Credit (if applicable); or
 
(r)	any air traffic control authority (or any authority on their behalf) or any other authority or airport notifies Lessor that there are navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of thirty (30) days from the date of such notice or such longer period for payment specified in such notice provided however that the failure to pay the same would give rise to the likelihood of a sale, forfeiture, detention or other loss of the Aircraft or an interest therein or to civil or criminal liability on Lessor, the Security Trustee or any Lender.	
 
113

APPENDIX 9
PART 2
 
1	Rights	
If an Event of Default occurs, Lessor may at its option (and without prejudice to any of Lessor’s other rights under this Agreement) at any time thereafter:
 
(a)	accept such repudiation and by notice to Lessee and with immediate effect terminate the letting of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
(b)	proceed by appropriate court action or actions to enforce performance of this Agreement or to recover damages for breach of this Agreement; and/or	
 
(c)	either:	
 
 	(i)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require); or	
 
 	(ii)	by serving notice require Lessee to redeliver the Aircraft to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require).	
 
2	Deregistration	
If an Event of Default occurs, Lessor may sell or otherwise deal with the Aircraft as if this Agreement had never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement.
 
3	Default Payments	
If:
 
(a)	an Event of Default occurs, and/or the Aircraft is not redelivered on the Expiry Date or the Aircraft is not delivered to and accepted by Lessee on the Scheduled Delivery Date, other than as a result of any default by Lessor (save where such default arises as a result of any act, omission or default of Lessee or any Manufacturer and/or maintenance contractor). Lessee will indemnify Lessor on demand against any loss (including loss of profit), damage, expense, cost or liability which Lessor may sustain or incur directly or indirectly as a result including but not limited to (but without duplication of amounts referred to in (i) to (iv) below):	
 
 	(i)	any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Agreement or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(ii)	any amount of principal, interest, fees or other sums whatsoever paid or payable on account of additional funds borrowed in order to carry any unpaid amount;	
 
 	(iii)	any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to Lessor’s financing of the Aircraft; and	
 
114

 	(iv)	any loss, cost, expense or liability actually sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Agreement; and	
 
(b)	Lessor will use reasonable endeavours to mitigate any loss, damages, cost or expenses incurred by it as a result of the foregoing.	
 
115

APPENDIX 10
ASSIGNMENT AND TRANSFER
 
1	Security Interest	
Lessee will not assign, or create or permit to exist any Security Interest over any of its rights under this Agreement.
 
2	Lessor Assignment	
 
(a)	Lessor shall, in connection with the financing of the Aircraft, be entitled to assign all or any of its rights under any of the Transaction Documents by way of security.	
 
(b)	Lessor may at any time assign all or any of its rights under the Transaction Document by way of security to any new or replacement lenders as contemplated by paragraph 4.6 of Appendix 6 of this Agreement provided that no such assignment by way of security shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including any new or replacement lenders or security trustee in the list of Indemnitees. For the avoidance of doubt, the provisions of this paragraph 2(b) shall not apply to any changes in Lenders or any other parties to the Loan Agreement made pursuant to and in accordance with the provisions of the Loan Agreement.	
 
(c)	Lessor may assign all or any of its rights absolutely (otherwise than by way of security) under this Agreement and in the Aircraft to any Permitted Transferee provided that Lessor will have no further obligations under this Agreement following such assignment (except any liability and obligations in respect of any retained rights) but, notwithstanding that assignment, will remain entitled to the benefit of each indemnity under, and subject to the terms of, this Agreement. Lessee will comply with all reasonable requests of Lessor, its successors and assigns in respect of any assignment referred to above. Lessor will promptly notify Lessee of any assignment. No such assignment shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.	
 
3	Lessor Transfer	
Lessee agrees that Lessor may at any time during the Term transfer its rights and obligations under this Agreement to any Permitted Transferee and upon completion of any such transfer Lessor will be released from and will have no further obligation under this Agreement (except any liability and obligations in respect of any retained rights). Lessee will promptly execute all documents reasonably requested by Lessor to effect, perfect, record or implement any such transfer, and will promptly comply with any other reasonably requests of Lessor, its successors and assigns in respect of any such transfer (including, without limitation, the execution of any novation agreement between Lessor, Lessee and the Permitted Transferee). No such transfer shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such transfer not been made save
 
116

where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such transfer and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.
For the purposes of paragraphs 2 and 3 above, references to “law” includes any law which at the date of the assignment or transfer, as the case may be, has been enacted but is not yet in force.
 
4	Lessee Transfer and Change of Control	
 
(a)	Lessee shall not convey, transfer, lease or otherwise dispose of all or substantially all of its assets to any entity or person and/or assign or transfer its rights or obligations (whether voluntarily or involuntarily, by merger or consolidation or by operation of law or otherwise) under this Agreement and/or the other Transaction Documents to which it is a party (each a “ Lessee Disposal ”) except to a Successor Entity, and provided that the following conditions are satisfied:	
 
 	(i)	such Successor Entity has a tangible net worth equal to or greater than the tangible net worth of Lessee immediately prior to such Lessee Disposal (determined in accordance with Mexican GAAP or IFRS, whichever methodology is used by Lessee with respect to the preparation of its financial statements immediately prior to such Lessee Disposal);	
 
 	(ii)	such Successor Entity’s obligations under this Agreement and the other Transaction Documents are guaranteed by the Guarantor or any Successor Entity thereof (provided that the tangible net worth of such Successor Entity is equal to or greater than the tangible net worth of the Guarantor immediately prior to such transfer (determined in accordance with Mexican GAAP or IFRS, whichever methodology of Guarantor with respect to the preparation of its financial statements immediately prior to such Lessee Disposal) in substantially the same form of the Guarantee; and	
 
 	(iii)	where any such Lessee Disposal occurs other than in connection with a public offering of Lessee’s shares, the prior written consent of Lessor has been obtained (which consent shall not be unreasonably withheld or delayed).	
 
(b)	Lessee’s entitlement to effect a Lessee Disposal in accordance with paragraph (a) above, shall be further subject to the following conditions:	
 
 	(i)	Lessee shall give Lessor no less than thirty (30) days’ advance written notice of any proposed Lessee Disposal;	
 
 	(ii)	Lessee and/or Successor Entity shall make such recordations and filings with any Government Entity as are reasonably necessary to evidence and/or perfect the right, title and interest of Lessor and the Security Trustee in and to the Aircraft and the Transaction Documents;	
 
 	(iii)	the relevant Successor Entity shall either: (A) execute and deliver, or cause to be executed and delivered to Lessor an agreement in writing, in form and substance satisfactory to Lessor and Security Trustee, which evidences the legal, binding and enforceable assumption by such Successor Entity of Lessee’s rights and obligations under this Agreement (or, if applicable, Guarantor’s rights and obligations under the Guarantee) and/or the other Transaction Documents to which Lessee and/or Guarantor is a party; or (B) if the relevant Successor Entity, by operation of law becomes bound by this Agreement (or, if applicable, the Guarantee) and the other Transaction Documents, such Successor Entity shall	
 
117

 	deliver to Lessor an officer’s certificate confirming the same, and in each case Lessor shall have received a legal opinion in form and substance satisfactory to Lessor from independent counsel satisfactory to Lessor;	
 
 	(iv)	no Default shall have occurred and be continuing at the time of such Lessee Disposal or occur as a result of the same;	
 
 	(v)	in connection with any Lessee Disposal, Lessee or the relevant Successor Entity shall pay all reasonable costs and expenses of Lessor and Security Trustee (including, reasonable and documented legal fees and expenses) in relation to the evidencing and/or perfection of Lessor’s and the Security Trustee’s rights, title and interests in and to the Aircraft and the Transaction Documents; and	
 
 	(vi)	Lessee or the relevant Successor Entity shall provide such other evidence and/or enter into such documents reasonably requested by Lessor and Security Trustee in connection with the evidencing and/or perfection of Lessor’s and the Security Trustee’s rights, title and interests in and to the Aircraft and the Transaction Documents.	
 
(c)	For the purposes of this paragraph 4 of Appendix 10, “ Successor Entity ” means in relation to Lessee and the Guarantor, the surviving entity or person formed by a consolidation or merger of any person with Lessee or Guarantor (as the case may be), provided that such surviving entity or person acquires all of the property, assets and stock of Lessee or the Guarantor (as applicable) and to whom the rights and obligations of Lessee and/or the Guarantor under the relevant Transaction Documents may be transferred in accordance with the provisions of this Agreement or the Guarantee (as the case may be).	
 
(d)	For the avoidance of doubt, the disposal by the shareholders of the Lessee of their respective shares (including any treasury shares which may be deemed to be held by the Lessee) in the Lessee, including, without limitation, pursuant to a public offering shall not constitute a Lessee Disposal.	
 
118

EXHIBIT A
Part 1
ACKNOWLEDGEMENT OF ASSIGNMENT OF GUARANTEE
 
To:	HSH Nordbank AG, as Security Trustee	
Amentum Aircraft Leasing No. Three Limited as Assignor
Airbus A320-200 aircraft bearing manufacturer’s serial number 3524
The Guarantor acknowledges receipt of a notice (the “ Notice ”) of an assignment of even date herewith (the “ Assignment ”) between the Assignor and the Security Trustee and of a copy of the Assignment.
Terms and expressions defined or referred to in the Assignment (whether incorporated by reference to another document or otherwise) shall have the same meanings when used in this Acknowledgement.
 
1	In consideration of the payment to the Guarantor by the Security Trustee of *****, and of other good and valuable consideration, the receipt and sufficiency of which the Guarantor acknowledges, the Guarantor confirms its agreement to the terms of the Assignment and irrevocably undertakes:	
 
(a)	to pay all moneys that may be payable by it pursuant to the Guarantee in accordance with the terms of the Notice and the Guarantee;	
 
(b)	that, if the Security Trustee issues to the Guarantor written notice (“ Enforcement Notice ”) stating that an Enforcement Event has occurred, the Guarantor shall thereafter:	
 
 	(i)	perform, observe and comply with all the Guarantor’s undertakings and obligations under the Guarantee in accordance with the terms thereof in the Security Trustee’s favour and for the Security Trustee’s benefit and to the exclusion of the Assignor;	
 
 	(ii)	if the Security Trustee so requests (and at no cost to the Guarantor, save where such Enforcement Event is attributable to an Event of Default (as defined in the Operating Lease Agreement), enter into a Guarantee with the Security Trustee or the Security Trustee’s nominee on terms identical ( mutatis mutandis ) to the terms of the Guarantee; and	
 
 	(iii)	not recognise the exercise by the Assignor of any of the Assignor’s rights and powers under the Guarantee unless and until requested to do so by the Security Trustee and the Assignor confirms that the Guarantor shall not be in breach of its obligations under the Guarantee to the extent that the Guarantor complies with the provisions of this paragraph 1(c); and	
 
(c)	to deliver to the Security Trustee a copy of any document, written information, notice, request or other communication given by it to the Assignor pursuant to the Guarantee at the same time as to the Assignor. Such copy shall be notified to the Security Trustee in the manner set forth in the notice provisions of clause 9.12 of the Guarantee save that for this purpose the notice details of the Security Trustee are:	

	 	Address:	  	Martensdamm 6	
	 		  	24103 Kiel	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
119

					
			
 	 	 	  	Germany	
			
	 	Fax:	  	+49 431 900 6 12822	
			
	 	Attention:	  	Restructuring / Transportation	
 
2	Notwithstanding anything to the contrary in any Transaction Document, the Guarantor confirms that, without prejudice to any other persons constituting “Indemnitees” as defined in the Operating Lease Agreement and subject to the relevant provisions of the Operating Lease Agreement, the Agent, the Security Trustee, the Arranger, the Lease Manager and any Lender constitute “Indemnitees” under the Operating Lease Agreement and without prejudice to, and independent of, the Assignment and the Security Trustee’s rights thereunder, the Security Trustee on behalf of itself and each of the Agent, the Arranger, the Lease Manager and, each Lender shall be entitled to rely on, make a claim directly under and/or otherwise enforce the Guarantee insofar as the relevant claim and/or other enforcement is in respect of the provisions of the Operating Lease Agreement which are expressed to be in favour of such Indemnitees, as if the Guarantee had been granted in favour of the Indemnitees.	
This Acknowledgement (and any non contractual obligations in connection with the same) is governed by, and shall be construed in accordance with the laws of England.

Yours faithfully	  		  		

			

 	  	Date:            	  	2011	
for and on behalf of	  		  		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN S.A.P.I DE C.V.
 
120

EXHIBIT A
PART 2
ACKNOWLEDGEMENT OF ASSIGNMENT OF LEASE
 
To:	HSH Nordbank AG, as Security Trustee	
Amentum Aircraft Leasing No. Three Limited as Assignor
Airbus A320-200 aircraft bearing manufacturer’s serial number 3524
Lessee acknowledges receipt of a notice of assignment of even date herewith by the Assignor and Security Trustee (“ Notice ”). In consideration of payment to Lessee by the Security Trustee and the Assignor of ***** and of other good and valuable consideration, receipt and sufficiency of which Lessee hereby acknowledges, Lessee irrevocably agrees with the instructions contained in the Notice and as follows:
 
1	it confirms that any conditions required to be satisfied under clause 3.2 of the Operating Lease Agreement have been satisfied or unconditionally and irrevocably waived by Lessee;	
 
2	it shall pay all moneys that may be payable by it pursuant to the Operating Lease Agreement or any other Transaction Document to which the Lessee is a party and shall perform its obligations, in each case in accordance with the terms of the Notice, the Operating Lease Agreement and the Transaction Documents;	
 
3	it acknowledges and agrees that (a) prior to its receipt of an Enforcement Notice the Assignor shall, notwithstanding the assignment to the Security Trustee contained in the Assignment, be entitled to exercise all rights relating to the Relevant Collateral subject to the terms of the Notice and the provisions of the Operating Lease Agreement and other Transaction Documents and (b) after receipt of an Enforcement Notice the Assignor shall pay all moneys payable by it under or in relation to the Relevant Collateral to such account or accounts as the Security Trustee may from time to time designate and the Assignor shall cease to be entitled to exercise any and all rights in or in relation to the Relevant Collateral and the Security Trustee shall exclusively be entitled to exercise any and all rights in or in relation to the Relevant Collateral in accordance with the provisions of the Operating Lease Agreement and the Transaction Documents;	
 
4	it hereby confirms that it consents to the terms of the Assignment, has not received notice of any interest of any third party in the Relevant Collateral or of any security interest (howsoever called) in the Relevant Collateral except as created or contemplated by the Assignment and hereby confirms receipt of a copy of the Assignment;	
 
5	notwithstanding anything to the contrary in any Transaction Document, Lessee confirms that, without prejudice to any other persons constituting “Indemnitees” as defined in the Operating Lease Agreement and subject to the relevant provisions of the Operating Lease Agreement, the Agent, the Security Trustee, the Arranger, the Lease Manager and any Lender shall constitute “Indemnitees” under the Operating Lease Agreement and the Security Trustee on behalf of itself and each of the Agent, the Arranger, the Lease Manager and each Lender shall be entitled to rely on all provisions of the Operating Lease Agreement which are expressed to be in favour of such Indemnitees and to exercise all rights expressed to be granted to such parties thereunder in each case as if the same were set forth in full herein (subject to any limitations or conditions contained therein);	
 
6	it shall permit the Security Trustee to inspect the Aircraft on the same basis as set out in paragraph 2.3 of Appendix 6 and paragraph 4 of Appendix 8 of the Operating Lease Agreement; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
121

7	it acknowledges the restrictions placed on the discretion of the Assignor pursuant to paragraph 3 of the Notice.	
Lessee confirms that it has received a copy of the Assignment together with such other documents and information as it has required in connection therewith.

 	

	
 	
for and on behalf of	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN S.A.P.I DE C.V.
Date:             2011
 
122

EXHIBIT B
FORM OF CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance relates to the operating lease agreement (the “ Agreement ”) dated [ — ] 2011 and made between Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (the “ Lessee ”) in respect of the one (1) Airbus A320-200 aircraft with manufacturer’s serial number 3524 and having two (2) IAE V2527E-A5 Engines with serial numbers V12957 and V12961 installed thereon (as more particularly described in the Agreement as the “ Aircraft ”).
Unless otherwise defined in this certificate, capitalised words and expressions used in this certificate shall have the same meanings as given to them in the Agreement.
 
1	The Aircraft has been delivered to us together with its Aircraft Documents on [ — ]. Delivery took place on that date at [ — ], at [ — ] hours local time.	
 
2	We confirm that we have inspected the Aircraft in accordance with the Pre-Delivery Procedure and the Aircraft meets all of the requirements necessary for us to accept Delivery of it and that the Lessor has fully performed all of its obligations under the Agreement with respect to the Delivery and this Certificate of Acceptance constitutes conclusive proof of our unconditional and irrevocable acceptance of the Aircraft under the Agreement.	
 
3	We have no rights and/or claims against the Lessor with respect to the Delivery Condition of the Aircraft.	
 
4	The Lessee confirms to the Lessor that, as at the time indicated above, being the Delivery Date:	
 
(a)	the representations and warranties made by the Lessee in Part 1 of Appendix 3 to the Agreement remain true and correct;	
 
(b)	no Default or Event of Default is continuing;	
 
(c)	the Aircraft is insured as required by the Agreement;	
 
(d)	Attached hereto as Annex 1 is the utilisation status of the Aircraft at Delivery;	
 
(e)	[Save for the documents listed in Annex [ — ], the Lessee confirms that all documents listed in Part 3 of Appendix 7A of the Agreement were delivered to it;]	
 
(f)	Attached hereto as Annex [ — ] is a layout of passenger accommodation drawing showing the seating configuration of the Aircraft on Delivery;	
 
(g)	Attached hereto as Annex [ — ] is a list of emergency equipment delivered to Lessee on Delivery;	
 
(h)	Attached hereto as Annex [ — ] is a list of loose equipment delivered to Lessee on Delivery; [and]	
 
(i)	[Attached hereto as Annex [ — ] is a list of open items and discrepancies to be rectified on or before [ — ]].	
 
123

			
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	
		
By:	 	 	
Title:	 	 	
		
By:	 	 	
Title:	 	 	
	
Agreed and acknowledged	
	
AMENTUM AIRCRAFT LEASING NO. THREE LIMITED	
		
By:	 	 	
Title:	 	 	
 
124

ANNEX 1
The utilisation status of the Aircraft at Delivery was as follows:
Airframe

Aircraft Type	  		
Manufacturer’s Serial Number	  		
Aircraft Registration	  		
Cabin Configuration	  		
Total Flight Hours Since New	  		
Total Cycles Since New	  		
Engines

Position	 	1	 	2	
Engine Type	 		 		
Serial Number	 		 		
Total Flight Hours Since New	 		 		
Total Cycles Since New	 		 		
APU

APU Model	  		
Serial Number	  		
Total APU Hours	  		
Total APU Cycles	  		
Landing Gear

 	  	LH Main
Landing Gear	  	Nose Landing
Gear	  	Centre body
Landing Gear	  	RH Main
Landing Gear	
Part Number	  		  		  		  		
Serial Number	  		  		  		  		
Total Cycles	  		  		  		  		
 
125

EXHIBIT C
PART 1
AIR TRAFFIC CONTROL LETTER
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
2011
Dear Sirs
One (1) Airbus A320-200 Aircraft MSN 3524 (the “Aircraft”)
In connection with an aircraft lease agreement dated              2011 between Amentum Aircraft Leasing No. Three Limited, (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG (as security trustee for certain financiers of the Aircraft) at its address for notices being Martensdamm 6, 24103 Kiel, Germany (facsimile: +49 431 900 6 12822; Attention: Restructuring / Transportation),	
(together with the Lessee, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us. Any request which you receive from an Authorised Party shall not be construed by you as evidence that an Event of Default (under and as defined in the Lease Agreement) has occurred and is continuing.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.

Yours faithfully	

For and on behalf of	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.
 
126

EXHIBIT C
PART 2
AIR TRAFFIC CONTROL LETTER
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
2011
Dear Sirs
One (1) Airbus A320-200 Aircraft MSN 3524 (the “Aircraft”)
In connection with an aircraft lease agreement dated              2011 between Amentum Aircraft Leasing No. Three Limited (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG (as security trustee for certain financiers of the Aircraft) at its address for notices being Martensdamm 6, 24103 Kiel, Germany (facsimile: +49 431 900 6 12822; Attention: Restructuring / Transportation),	
(together with the Lessee, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.

Yours faithfully	

	

   	
For and on behalf of	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.
 
127

EXHIBIT D
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
DEREGISTRATION AND EXPORT POWER OF ATTORNEY
SPECIAL IRREVOCABLE POWER-OF-ATTORNEY FOR LAWSUITS AND COLLECTIONS AND FOR ACTS OF ADMINISTRATION IN FAVOUR OF EACH OF AMENTUM AIRCRAFT LEASING NO. THREE LIMITED, HSH NORDBANK AG , AND AMENTUM CAPITAL LIMITED TO BE EXERCISED ON BEHALF OF THE GRANTOR OF SAID POWER OF ATTORNEY, CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE ACCORDING TO THE FOLLOWING
CLAUSES:
 
1	Mr. [                             ] in his capacity as LEGAL REPRESENTATIVE of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE (the “ Lessee ”), hereby grants in favour of each of Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”), HSH Nordbank AG and Amentum Capital Limited and each of their respective employees and representatives (with the right of substitution and re-substitution, and with the right to revoke any substitution or re-substitution granted), acting jointly and severally as its true and lawful attorneys (each an “ Attorney ”), a SPECIAL POWER OF ATTORNEY IN AN IRREVOCABLE CHARACTER, as it is a condition under a bilateral contract pursuant to the Lease Agreement entered into between Lessor and Lessee dated [ — ] 2011, (the “ Lease ”), in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic where this power shall be exercised, LIMITED WITH RESPECT TO ITS OBJECT, in order that, including, but not limited, each Attorney may, act on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTARA DE INVERSION DE CAPITAL VARIABLE, and pursuant to the Laws of the United Mexican States carry out the necessary procedures, actions and proceedings to obtain the registration and cancellation of the registration and export the aircraft which is subject to the Lease, being one (1) Airbus A320-200 aircraft with manufacturer’s serial number [ — ] (the “ Aircraft ”), and the exportation of said Aircraft with any relevant governmental or private authority or entity, including, without limitation, the General Direction of Civil Aviation, the Mexican Aeronautics Registry, the Secretaría de Hacienda y Crédito Público and the Sistema de Administración Tributaria or before any other administrative or judicial authority in Mexico or in any other jurisdiction, or before any customs broker, in order for each Attorney to:	
 
(a)	release, terminate and void any and all interest of the Lessee in respect of the Aircraft;	
 
(b)	deregister and/or consent to the transfer (to any registry inside or outside Mexico or such other jurisdiction in which the Aircraft is, for the time being, registered) of the registration of the Aircraft and all other engines, accessories or items in use at the time of such transfer thereon or therein or otherwise held or used in substitution or replacement therefor in whatsoever manner, such transfer to be on such terms and conditions as may be determined by the Attorney in its absolute discretion;	
 
(c)	represent the Lessee wheresoever and whatsoever in all matters and affairs in connection with the registration, deregistration or re-registration of the Aircraft (including on the	
 
128

 	aircraft register maintained, for the time being, by the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) and/or any interest of the Lessee registered in any personal property security register;	
 
(d)	remove the Aircraft from Mexico or any other jurisdiction and to submit a report to and apply for and obtain permits, licences or approvals from any governmental authorities of Mexico (including, without limitation, the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) or any such other jurisdiction with respect to any of the above matters so that the Attorney is empowered to do and perform all things which the Lessee is now or would hereafter be entitled and empowered to do and perform, without any exception, in relation to those matters, all for the account of the Lessee;	
 
(e)	sign, seal (if appropriate), deliver, execute or otherwise perfect any and all documents, agreements, applications, consents or other instruments of whatsoever nature as the Attorney considers in its absolute discretion necessary or desirable in connection with any or all of the matters referred to in (a) to (d) inclusive above; and	
 
(f)	request any and all information with respect to registration status, servicing fees, taxes or any other type of payment status related to any procedures, process, lawsuits, including without limitation, judicial or administrative, which may be necessary to be obtained by each Attorney in connection with the Lease, the Aircraft, any of its engines or its related equipment thereto, from the Dirección General de Aeronáutica Civil (DGAC), Registro Aeronáutico Mexicano (RAM) and Servicios a la Navegación en el Espacio Aéreo Mexicano , (SENEAM).	
 
2	Each Attorney is authorised to delegate to such person or persons as it may choose the exercise of any or all of the powers conferred on such Attorney hereunder.	
 
3	In this Power of Attorney words and expressions defined in the Lease shall have the same meanings when used in this Power of Attorney.	
 
4	The powers conferred by the Lessee in this Power of Attorney are irrevocable pursuant Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, and unconditional and are granted for value and secure proprietary interests, as a condition to a bilateral agreement as stated in paragraph 1 above, in and the performance of obligations owed to the respective donees and shall not terminate unless and until all obligations owing by the Lessee to the Lessor in relation to the Aircraft have been irrevocably discharged in full in writing by Lessor and any and all amounts outstanding, or which may become outstanding, in relation to the Aircraft from the Lessee to the Lessor.	
 
5	No failure or delay on the part of any Attorney to exercise, and no delay in exercising any right, power or privilege under this Power of Attorney shall operate as a waiver thereof, nor shall the exercise of any right, power or privilege under this Power of Attorney preclude any other or further exercise thereof or the exercise of any other right, power or privilege.	
 
6	The powers as set out in this Power of Attorney shall become effective in accordance with the provisions hereof from the date hereof.	
 
7	Any person dealing with an Attorney shall not be required to make any determination or require any further evidence as to whether the Attorney’s rights hereunder have become exercisable.	
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V. has executed this Power of Attorney as a deed on              2011.
 
129

EXHIBIT E
QUIET ENJOYMENT LETTER
 
From:	HSH Nordbank AG	
 
To:	Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	
  	Av. Prolongación Paseo de la Reforma 490 Piso 1,	
  	Col. Santa Fe Pena Blanca,	
  	01210 Mexico	
Dated:              2011
Dear Sirs
One Airbus A320-200 Aircraft Manufacturer’s Serial Number 3524
 
1	We refer to the aircraft lease agreement dated [ — ] 2011 between Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación S.A.P.I de C.V. (the “ Lessee ”) in respect of the leasing of one Airbus A320-200 aircraft with manufacturer’s serial number 3524 (the “ Aircraft ”) (the “ Lease ”).	
 
2	Words and expressions defined in the Lease shall, unless the context otherwise requires, have the same meanings where used in this letter.	
 
3	In consideration of the Lessee agreeing to enter into the acknowledgement of assignment of the Lease pursuant to a borrower security assignment dated on or about the date hereof between the Lessor (as assignor) and HSH Nordbank AG (as assignee) in relation to the Aircraft (the “ Borrower Security Assignment ”), we hereby undertake that, so long as no Event of Default has occurred and is continuing, neither we (nor anyone lawfully claiming through us) will interfere with the Lessee’s right to quiet use and possession of the Aircraft during the Term. The exercise by us of our rights under, or in connection with, the Lease or any of the other Assigned Documents (as defined in the Borrower Security Assignment) to which the Lessee is a party in accordance with the terms of the Lease or such other Assigned Document, will not constitute such interference.	
 
4	The foregoing undertaking is not to be construed as restricting any of our rights as Security Trustee (i) to sell or otherwise dispose of the Aircraft to such persons and on such terms as we consider appropriate (subject to any requirements or restrictions imposed by applicable law and subject, unless an Event of Default has occurred and is continuing, to the Lease and other Transaction Documents), or (ii) (as assignee of the Lessor’s rights under the Lease) to enforce, in accordance with the provisions of the Lease and the other Transaction Documents, any of the Lessor’s rights under the Lease which are exercisable prior to the occurrence of an Event of Default which is continuing.	
 
5	The rights conferred by this letter are granted only to the Lessee and do not extend to any assignee or sub-lessee of the Lessee.	
 
6	This letter shall be governed by, and construed in accordance with, the laws of England.	
 
130

Please acknowledge your agreement to the terms of this letter by counter-signature below.

Yours faithfully	

For and on behalf of	
HSH NORDBANK AG (as Security Trustee)

Agreed and accepted	

	

   	
For and on behalf of	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.
 
131

EXHIBIT F
FORM OF MONTHLY REPORT
 
To:	Amentum Aircraft Leasing No. Three Limited	
 
From:	Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	
 
Aircraft:	Airbus A320-200 Aircraft	
Manufacturer’s Serial Number 3524
Month of:                     
AIRFRAME

Aircraft Total Flight Hours Since New:	  		
Aircraft Total Cycles Since New:	  		
Airframe Flight Hours Operated During Month:	  		
Airframe Cycles Operated During Month:	  		
Time Remaining to **         Check:	  		
ENGINES

Engine Serial Number:	  		  	Engine Serial Number:	  		
New Aircraft MSN (if applicable):	  		  	New Aircraft MSN (if applicable):	  		
Original Position:	  		  	Original Position:	  		
Actual Location:	  		  	Actual Location:	  		
Total Flight Hours Since New:	  		  	Total Flight Hours Since New:	  		
Total Cycles Since New:	  		  	Total Cycles Since New:	  		
Flight Hours During Month:	  		  	Flight Hours During Month:	  		
Cycles During Month:	  		  	Cycles During Month:	  		
Average Engine Derate During Month:	  		  	Average Engine Derate During Month:	  		
Exact Flight Hours and Cycles since new of the Engine and the Airframe at the moment of removal/installation of Engine during the month are to be recorded.
Note: If an Engine is removed or installed on another Aircraft (subject to the provisions of the Agreement) it must be reported monthly on this form.
APU

APU Serial Number:	  		
Original Position:	  		
Total Flight Hours Since New:	  		
Total Cycles Since New:	  		
Flight Hours Operated During Month:	  		
Cycles Operated During Month:	  		
 
132

Exact Flight Hours and Cycles since new of the APU and the Airframe at the moment of removal/installation of the APU during the month are to be recorded.

Landing Gear:	  	Flight Hours
Since Overhaul:	  	Flight Hours
Since New:	  	Cycles Since
Overhaul:	  	Cycles Since
New:	
RH Main:	  		  		  		  		
Central Main:	  		  		  		  		
LH Main:	  		  		  		  		
Nose:	  		  		  		  		
Exact Flight Hours and Cycles since new of the Landing Gear and the Airframe at the moment of removal/installation of the Landing Gear during the month are to be recorded.
Details of any engineering modifications or changes during the month:

	

 

	
   	
Details of any Service Bulletins and Airworthiness Directives accomplished for during the month:

	

 

	
   	
Details of any routine checks (A check and above) or replacement of major items (Engine, APU, Landing Gear) performed during the month:

	

 

	

133

Details of any incident, accident and damage to the Aircraft during the month:

	

 

	
   	
Details of any upcoming major upcoming maintenance event (C and above, major modification or replacement of major items as Engine, APU, Landing Gear) scheduled for the next 12 months:

	

 

	
   	
Details of any claims under the Airframe Warranties or the Engine Warranties under *****:

	

 

	

			
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	
		
Name:	 	 	
		
Title:	 	 	
		
Date:	 	 	
		
Name:	 	 	
		
Title:	 	 	
		
Date:	 	 	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
134

EXHIBIT G
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (LESSEE)
Mr. [                             ], in his capacity as Legal Representative of Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., hereby grants in favour of                             , with address at                              [        ], [        ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Lease Agreement to be entered into by and between Amentum Aircraft Leasing No. Three Limited and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., or any other document derived or related therewith, including to one (1) Airbus A320-200 with manufacturer’s serial number 3524 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.
[                    ]
Legal Representative
 
135

EXHIBIT H
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (GUARANTOR)
Mr. [                            ], in his capacity as Legal Representative of Controladora Vuela Compañía de Aviación, S.A.P.I de C.V., hereby grants in favour of                             , with address at                              [        ], [        ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Controladora Vuela Compañía de Aviación, S.A.P.I de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Guarantee to be entered into by and between Amentum Aircraft Leasing No. Three Limited and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., or any other document derived or related therewith, including to one (1) Airbus A320-200 with manufacturer’s serial number 3524 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Controladora Vuela Compañía de Aviación, S.A.P.I de C.V.
[                    ]
Legal Representative
 
136

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.33
EXECUTION VERSION
Date      April 2013
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
- and -
AMENTUM AIRCRAFT LEASING NO. THREE LIMITED
as Lessor

AIRCRAFT LEASE AGREEMENT

in respect of one (1) Airbus A320-200 aircraft
bearing MSN 3543

INDEX

Clause	  	Page	 	
			
1	 	INTERPRETATION	  	 	1	  	
			
2	 	REPRESENTATIONS AND WARRANTIES	  	 	1	  	
			
3	 	CONDITIONS PRECEDENT	  	 	1	  	
			
4	 	DELIVERY AND ACCEPTANCE	  	 	1	  	
			
5	 	PAYMENTS	  	 	3	  	
			
6	 	TAXATION	  	 	5	  	
			
7	 	QUIET ENJOYMENT	  	 	8	  	
			
8	 	LESSEE’S COVENANTS	  	 	8	  	
			
9	 	INSURANCE AND TOTAL LOSS	  	 	8	  	
			
10	 	MANUFACTURER’S WARRANTIES	  	 	9	  	
			
11	 	INDEMNITY	  	 	10	  	
			
12	 	RETURN OF AIRCRAFT	  	 	10	  	
			
13	 	DEFAULT	  	 	10	  	
			
14	 	ASSIGNMENT	  	 	11	  	
			
15	 	ILLEGALITY	  	 	11	  	
			
16	 	NOTICES	  	 	11	  	
			
17	 	DISCLAIMERS AND WAIVERS	  	 	12	  	
			
18	 	CONFIDENTIALITY	  	 	13	  	
			
19	 	LAW AND JURISDICTION	  	 	13	  	
		
APPENDIX 1 PART 1 DEFINITIONS	  	 	16	  	
		
APPENDIX 1 PART 2 CONSTRUCTION	  	 	29	  	
		
APPENDIX 2 DESCRIPTION OF AIRCRAFT	  	 	31	  	
		
APPENDIX 3 PART 1 LESSEE’S REPRESENTATIONS AND WARRANTIES	  	 	32	  	
		
APPENDIX 3 PART 2 LESSOR’S REPRESENTATIONS AND WARRANTIES	  	 	34	  	
		
APPENDIX 4 PART 1 LESSOR CONDITIONS PRECEDENT	  	 	36	  	
		
APPENDIX 4 PART 2 LESSEE CONDITIONS PRECEDENT	  	 	40	  	
		
APPENDIX 5 PART 1 ADDITIONAL PAYMENT PROVISIONS	  	 	41	  	
		
APPENDIX 5 PART 2 PAYMENT OF MAINTENANCE RESERVES	  	 	43	  	
		
APPENDIX 5 PART 3 REFUND OF MAINTENANCE RESERVES	  	 	47	  	
		
APPENDIX 6 LESSEE’S COVENANTS	  	 	51	  	
		
APPENDIX 7 PART 1 INSURANCE COVENANTS	  	 	67	  	
		
APPENDIX 7 PART 2 INSURANCE REQUIREMENTS	  	 	71	  	
		
APPENDIX 7 PART 3 TOTAL LOSS	  	 	74	  	
		
APPENDIX 7A PART 1 PRE-DELIVERY PROCEDURE	  	 	76	  	

							
	 	APPENDIX 7A PART 2 DELIVERY CONDITION	  	 	77	  	
			
	 	APPENDIX 7A PART 3 AIRCRAFT DOCUMENTS AT DELIVERY	  	 	82	  	
			
	 	APPENDIX 8 PART 1 RETURN OF THE AIRCRAFT	  	 	91	  	
			
	 	APPENDIX 8 PART 2 OPERATING CONDITION AT REDELIVERY	  	 	95	  	
			
	 	APPENDIX 8 PART 3 AIRCRAFT DOCUMENTS AT REDELIVERY	  	 	101	  	
			
	 	APPENDIX 9 PART 1 EVENTS OF DEFAULT	  	 	111	  	
			
	 	APPENDIX 9 PART 2	  	 	114	  	
			
	 	APPENDIX 10 ASSIGNMENT	  	 	116	  	
			
	 	EXHIBIT A PART 1 ACKNOWLEDGEMENT OF ASSIGNMENT OF GUARANTEE	  	 	119	  	
			
	 	EXHIBIT A PART 2 ACKNOWLEDGEMENT OF ASSIGNMENT OF LEASE	  	 	121	  	
			
	 	EXHIBIT B FORM OF CERTIFICATE OF ACCEPTANCE	  	 	123	  	
			
	 	EXHIBIT C PART 1 AIR TRAFFIC CONTROL LETTER	  	 	126	  	
			
	 	EXHIBIT C PART 2 AIR TRAFFIC CONTROL LETTER	  	 	127	  	
			
	 	EXHIBIT D DEREGISTRATION AND EXPORT POWER OF ATTORNEY	  	 	128	  	
			
	 	EXHIBIT E QUIET ENJOYMENT LETTER	  	 	130	  	
			
	 	EXHIBIT F FORM OF MONTHLY REPORT	  	 	132	  	
			
	 	EXHIBIT G PROCESS AGENT POWER OF ATTORNEY (LESSEE)	  	 	135	  	
			
	 	EXHIBIT H PROCESS AGENT POWER OF ATTORNEY (GUARANTOR)	  	 	136	  	

THIS AIRCRAFT LEASE AGREEMENT is made on      April 2013
BETWEEN:
 
(1)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. a company duly organised and validly existing under the laws of Mexico and having its address at Av. Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Pena Blanca, 01210 Mexico (“ Lessee ”) and	
 
(2)	AMENTUM AIRCRAFT LEASING NO. THREE LIMITED , a company duly incorporated and validly existing under the laws of the Ireland and having its registered office at 28 Upper Mount Street, Dublin 2, Ireland (“ Lessor ”)	
RECITALS:
Lessor has agreed to lease and Lessee has agreed to take on lease the Aircraft upon the terms and subject to the conditions set out in this Agreement.
NOW IT IS AGREED as follows:
 
1	INTERPRETATION	
 
1.1	In this Agreement, unless the context otherwise provides, capitalised terms and expressions have the meanings given to them in Part 1 of Appendix 1 and the conventions of construction and usage set out in Part 2 of Appendix 1 shall apply to this Agreement.	
 
1.2	References to “ this Agreement ” include the Appendices and the Exhibits and accordingly Lessee and Lessor hereby agree to comply with the terms of each such Appendix and Exhibit as if set out in this Agreement in full.	
 
2	REPRESENTATIONS AND WARRANTIES	
 
2.1	Lessee represents and warrants to Lessor in the terms set out in Part 1 of Appendix 3.	
 
2.2	Lessor represents and warrants to Lessee in the terms set out in Part 2 of Appendix 3 on execution of this Agreement.	
 
2.3	Lessor represents and warrants to Lessee in the terms set out in Part 3 of Appendix 3 on the Delivery Date and each Rent Date (save as set out therein).	
 
3	CONDITIONS PRECEDENT	
 
3.1	Lessor’s obligation to deliver and lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 1 of Appendix 4.	
 
3.2	Lessee’s obligation to accept delivery of the Aircraft and to lease the Aircraft under this Agreement is subject to satisfaction or waiver of each of the conditions precedent specified in Part 2 of Appendix 4.	
 
4	DELIVERY AND ACCEPTANCE	
 
4.1	The Parties shall follow the Pre-Delivery Procedure.	
 
4.2	The Aircraft is scheduled to be delivered during the Scheduled Delivery Month. Lessor shall notify Lessee of the scheduled delivery date (the “ Scheduled Delivery Date ”) no later than ten (10) Business Days prior to such date.	

(a)	On the Scheduled Delivery Date, subject to the terms and conditions of this Agreement and satisfaction or, as the case may be, waiver, of the conditions precedent set forth in Appendix 4, Lessor will tender the Aircraft for Delivery at the Delivery Location and Lessee will thereupon accept the Aircraft.	
 
(b)	Immediately upon Delivery, the Aircraft shall be deemed to have been delivered to and accepted by Lessee in an “as is, where is” condition and shall become subject to and governed by this Agreement and the Term shall commence and Lessee shall thereupon sign and deliver to Lessor the Certificate of Acceptance. For the avoidance of doubt, the execution and delivery of the Certificate of Acceptance by Lessee shall without further act constitute absolute, unconditional and irrevocable acceptance by Lessee of the Aircraft under this Agreement.	
 
4.3	Lessee will not be obliged to accept delivery of the Aircraft if it does not meet the Delivery Condition. If the Aircraft is not accepted by Lessee because the Aircraft does not meet the Delivery Condition, Lessor shall have the option to remedy any discrepancies by reference to the Delivery Condition and, prior to the Final Delivery Date, offer the Aircraft for Delivery and (if the Aircraft then meets the Delivery Condition) the Lessee will thereupon accept the delivery of the Aircraft at the Delivery Location in an “as is, where is” condition and the provisions of Clause 4.2(b) shall apply.	
 
4.4	If the Aircraft is tendered for Delivery and meets the Delivery Condition on or before the Final Delivery Date, Lessee shall not be entitled for any reason whatsoever to refuse to accept the Aircraft for all purposes of this Agreement (including, without limitation, refuse to execute and deliver to Lessor, the Certificate of Acceptance).	
 
4.5	Lessor shall not be responsible for any Loss (including any loss of profit), arising from any delay in the delivery of, or failure to deliver, the Aircraft to Lessee under this Agreement unless such delay or failure arises as a direct consequence of the wilful default, wilful misconduct or Gross Negligence of Lessor.	
 
4.6		
 
(a)	If the Aircraft has been tendered for delivery and meets the Delivery Condition on or before the Final Delivery Date, but notwithstanding its obligation under Clause 4.4 (and without prejudice to Lessor’s remedies in respect of such non-compliance), Lessee has not accepted delivery of the Aircraft on or prior to the Final Delivery Date, then Lessor may cancel the obligation contained in this Agreement to lease the Aircraft to Lessee by giving notice in writing to Lessee to that effect and Lessee shall reimburse to Lessor forthwith on demand all amounts which the Lessor shall have expended since 17 February 2011 in order to be able to deliver the Aircraft to the Lessee (including, without limitation, all documented costs and expenses related to putting the Aircraft in the Delivery Condition and reasonable costs and expenses related to preparation of this Agreement and other Transaction Documents), together with interest on each amount so demanded at the rate specified in Clause 5.5 from the date of demand until the date of payment (both before and after any relevant judgment).	
 
(b)	If Delivery does not occur on or prior to the Final Delivery Date for any reason other than a default by the Lessee (including, without limitation, pursuant to Clause 4.4), then Lessee may cancel the obligation contained in this Agreement to take the Aircraft on lease from Lessor by giving notice to Lessor in writing to that effect.	
 
(c)	Upon the service of a notice of cancellation by Lessor or Lessee under this Clause 4.6, neither party shall have any obligations under this Agreement other than: (i) in relation to Lessee, as specified in paragraph (a) above and in paragraph 3 of Part 2 of Appendix 9; and (ii) in relation to Lessor, if paragraph (b) above is applicable, Lessor shall return to Lessee any payments previously made by Lessee to Lessor under this Agreement (without prejudice to Clause 5.7).	
 
2

5	PAYMENTS	
 
5.1	Lessee shall pay to Lessor (or shall have paid to Lessor, as the case may be) the Deposit in cash (the “ Cash Deposit ”) in the following instalments:	
 
(a)	two hundred and ***** on 23 February 2011 (the receipt of which is hereby acknowledged); and	
 
(b)	*****, no later than five (5) Business Days prior to the Delivery Date.	
 
5.2		
 
(a)	The Cash Deposit shall be placed by Lessor in an interest bearing account with HSH Nordbank AG, or any other person who may be the Security Trustee from time to time and any interest earned on the Deposit (net of any Taxes) shall be added to and form part of the Deposit for all purposes of this Agreement (and shall be returned to Lessee upon return of the Deposit pursuant to and in accordance with the terms of this Agreement). Lessor agrees to use reasonable endeavours to obtain interest on the Cash Deposit at the rate from time to time quoted by HSH Nordbank AG, or the Security Trustee, as applicable, to customers generally for deposits in an amount equal to the Deposit and for a term equal to the Term. Lessee agrees that upon payment to Lessor, the Deposit shall irrevocably and unconditionally become the property of Lessor and Lessor shall be entitled to commingle the Deposit with Lessor’s and/or its Affiliates’ general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity.	
 
(b)	At any time during the Term, and provided no Default has occurred which is continuing, Lessee shall have the option to substitute the Cash Deposit with a Letter of Credit in an amount equal to the Deposit (“ LC Amount ”). Upon receipt of a Letter of Credit, Lessor shall, promptly and in any event within seven (7) Business Days following receipt of such Letter of Credit (and provided no Default has occurred and is continuing at such time) refund to Lessee an amount equal to the remaining Cash Deposit which has not been applied by Lessor pursuant to Clause 5.5(a) or set off by Lessor pursuant to Clause 5.7 (without prejudice to Lessee’s obligations under Clause 5.5(b)).	
 
5.3	The Term shall be divided into successive periods (each, a “ Rental Period ”). The first Rental Period shall begin on the Delivery Date and each subsequent Rental Period shall begin on the next following Rent Date. Each Rental Period shall end on (but not include) the date numerically corresponding to the date at which it commences and which falls one (1) month after the commencement of that Rental Period, except that if there is no such numerically corresponding date in the relevant month, it will end on the last day of that month and provided that the last Rental Period shall end on the Expiry Date.	
 
5.4	The Rent payable by Lessee to Lessor for each Rental Period shall be *****. Lessee will pay the first instalment of Rent for the first Rental Period to the Lessor on the Delivery Date. Rent for each subsequent Rental Period shall be payable monthly in advance on each Rent Date.	
5.5
 
(a)	If Lessee or the Guarantor fails to comply with any provision of the Transaction Documents, any Event of Default (including, without limitation, under paragraph (q)(iv) of Part 1 of Appendix 9) shall have occurred and be continuing or any event of default (howsoever defined) shall have occurred and be continuing under any Other Agreement, in addition to all rights and remedies accorded to Lessor elsewhere under the Transaction Documents or under any applicable law, Lessor may immediately or at any time thereafter, without prior notice to Lessee (but Lessor shall, without prejudice to Lessor’s	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
3

 	rights or Lessee’s obligations under this Agreement, notify Lessee of any application by Lessor pursuant to this Clause 5.5, promptly after such application by Lessor), apply the Cash Deposit (or, if applicable, make a drawing under the Letter of Credit) and/or the Maintenance Reserves, in each case, in or towards the payment or discharge of any matured obligation (including, without limitation, under paragraph 2(b) of Part 1 of Appendix 5) owed by Lessee, the Guarantor or any Affiliate of Lessee under the Transaction Documents or any Other Agreement, in such order as Lessor sees fit and/or exercise any of the rights of set-off described in Clause 5.7, against all or part of the Deposit and/or Maintenance Reserves.	
 
(b)	If Lessor exercises the rights described in Clause 5.5(a) above, Lessee shall, following a demand in writing from Lessor, within ten (10) Business Days restore the Cash Deposit, LC Amount (if applicable) and/or Maintenance Reserves to the level at which it stood immediately prior to such exercise.	
 
5.6	If Lessee fails to pay any amount payable under any Transaction Document on the due date, Lessee will pay on demand from time to time to Lessor interest (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor, at the rate calculated by Lessor to be LIBOR plus *****. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year.	
5.7
 
(a)	Lessor may set off any matured obligation owed under any Transaction Document or any Other Agreement against any obligation (whether or not matured) owed by Lessor to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or at its option New York for the purpose of the set-off. If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained or liquidated. Lessor will not be obliged to pay any amounts to Lessee under any Transaction Document so long as any sums which are then due from Lessee under the Transaction Documents or any Other Agreement remain unpaid and any such amounts which would otherwise be due from Lessor hereunder will fall due only if and when Lessee has paid all such sums except to the extent Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing.	
 
(b)	If any sum paid or recovered in respect of the liabilities of Lessee under any Transaction Document is less than the amount then due, Lessor may apply that sum to amounts due under the Transaction Documents in such proportions and order and generally in such manner as Lessor may determine.	
 
5.8	Except as otherwise provided in this Agreement, each party shall pay its own legal and professional costs in respect of the transactions contemplated by the Transaction Documents. Lessee shall pay all costs associated with registering the Aircraft, the Bill of Sale, this Agreement, any documents contemplated under the Transaction Documents and the interests of Lessor (but not the Security Trustee or any Lender) in the Aircraft in the State of Registration including, without limitation, the cost, if applicable, of notarising and apostilling this Agreement and the Bill of Sale.	
 
5.9	Lessee’s obligations under this Agreement are absolute and unconditional irrespective of any contingency whatsoever including (but not limited to):	
 
(a)	any right of set-off, counterclaim, recoupment, defence or other right which either party to this Agreement may have against the other;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
4

(b)	any unavailability of the Aircraft for any reason (except as a result of a Total Loss, following receipt by Lessor or the Security Trustee of the Agreed Value and any other amounts due and owing as at the date of receipt by Lessor or Security Trustee of the Agreed Value pursuant to and in accordance with paragraph 2 of Part 3 of Appendix 7), including, but not limited to, a requisition of the Aircraft or any prohibition or interruption of or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft;	
 
(c)	any lack or invalidity of title or any other defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind or nature of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or in respect of or any damage to the Aircraft;	
 
(d)	any insolvency, bankruptcy, reorganisation, concurso mercantil, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor, Lessee or any other person;	
 
(e)	any invalidity or unenforceability or lack of due authorisation of, or other defect in, any Transaction Document; and	
 
(f)	any other cause which but for this provision would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under, and in accordance with the terms of, this Agreement.	
 
5.10	The time stipulated in the Transaction Documents for all payments payable by Lessee thereunder and for the performance of Lessee’s other obligations under the Transaction Documents will be of the essence.	
 
5.11	If any payment under any Transaction Document falls due on a day which is not a Business Day, that payment will be due on the immediately preceding Business Day.	
 
5.12	Lessee shall comply with the additional payment provisions set out in Part 1 of Appendix 5.	
 
5.13	Lessee shall pay Maintenance Reserves to Lessor upon the terms and subject to the conditions set out in Part 2 of Appendix 5. Lessee agrees that upon payment to Lessor, all Maintenance Reserves shall irrevocably and unconditionally become the property of Lessor and Lessor shall be entitled to commingle the Maintenance Reserves with Lessor’s and/or its Affiliates’ general or other funds, and Lessor will not hold any such funds as agent or on trust for Lessee or in any similar fiduciary capacity (without prejudice to the provisions set out Part 2 and Part 3 of Appendix 5).	
 
5.14	Lessor will release funds to Lessee from the Maintenance Reserves upon the terms and subject to the conditions set out in Part 3 of Appendix 5.	
 
6	TAXATION	
6.1
 
(a)	All payments by Lessee under or in connection with the Transaction Documents will be made without set-off or counterclaim, free and clear of and without deduction or withholding for or on account of any Taxes (other than Lessor Taxes) unless such deduction or withholding is required by law in which event (but subject always to Clause 6.1(b)) Lessee shall:	
 
 	(i)	deduct or withhold the amount legally required;	
 
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 	(ii)	pay to the relevant Government Entities within the period for payment permitted by applicable law the amount of the deduction or withholding; and	
 
 	(iii)	furnish to Lessor or the relevant Indemnitee after each payment an official receipt of the relevant Government Entities involved (or other evidence reasonably acceptable to Lessor or such Indemnitee) for all amounts so deducted or withheld.	
 
(b)	If Lessee is compelled by law to make any payment under or in connection with the Transaction Documents subject to any Tax (other than a Lessor Tax) and Lessor does not actually receive for its own benefit on the due date a net amount equal to the full amount provided for under the Transaction Documents, Lessee will pay all necessary additional amounts to ensure receipt by Lessor of the full amount so provided for.	
 
6.2	Lessee will on demand pay and indemnify the Indemnitees against all Taxes (other than Lessor Taxes) levied or imposed against or upon Lessor or Lessee or any other Indemnitee and relating to or attributable to Lessee, the Transaction Documents, including the payments due under the Transaction Documents, or the Aircraft directly or indirectly in connection with the importation, exportation, registration, ownership, leasing, sub-leasing, wet-leasing, purchase, delivery, possession, use, operation, repair, maintenance, overhaul, transportation, landing, storage, presence or redelivery of the Aircraft or any part thereof or any rent, receipts, insurance proceeds, income or other amounts arising therefrom.	
6.3
 
(a)	If and to the extent that any sums payable to an Indemnitee by Lessee under any Transaction Document by way of indemnity or under this Clause 6 are insufficient, by reason of any Taxes (other than Lessor Taxes) payable in respect of those sums, for the Indemnitee to discharge the corresponding liability to the relevant third party (including any Taxation authority), or to reimburse the Indemnitee for the cost incurred by it to a third party (including any Taxation authority) Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied leave the Indemnitee with the same amount as it would have been entitled to receive in the absence of that Tax liability together with interest on the amount of the deficit at the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
(b)	If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any person other than an Indemnitee are treated as taxable in the hands of an Indemnitee, Lessee will pay to that Indemnitee such sum as will after the Tax liability has been fully satisfied indemnify that Indemnitee to the same extent as it would have been indemnified in the absence of such Tax liability together with interest on the amount payable by Lessee under this Clause 6.3(b) at the rate of interest stated in Clause 5.5 in respect of the period commencing on the date on which the payment of taxation is finally due until payment by Lessee (both before and after judgment).	
 
6.4	Lessee will promptly pay:	
 
(a)	all licence and registration fees, Taxes (other than Lessor Taxes) and other amounts of any nature imposed by any Government Entity upon or with respect to the Aircraft including without limitation the importation, leasing, possession, use, operation or return of the Aircraft;	
 
(b)	all rent, fees, charges, Taxes (other than Lessor Taxes) and other amounts in respect of any premises where the Aircraft or any Part thereof is located from time to time; and	
 
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(c)	any and all charges incurred during the Term in connection with (i) the furnishing, issue or provision of information, directions and other facilities in connection with the navigation or movement of aircraft (including the control or movement of vehicles in any part of an airport used for the movement of aircraft) and (ii) the landing, parking or taking off of aircraft at airports or for the use of, or services provided at, airports (including, without limitation, all charges due to SENEAM),	
except to the extent such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and the non-payment of which does not give rise to any risk of the Aircraft or any interest therein being sold, forfeited, arrested, detained or otherwise lost or of civil or criminal liability on the part of any Indemnitee.
 
6.5	Lessee shall promptly pay any stamp or other documentary duties and Taxes (other than Lessor Taxes), and any notarial, translation or similar fees, to which this Agreement or any other Transaction Document (other than any Mortgage) may be subject, or which is necessary for purposes of registration of this Agreement and the Bill of Sale with the Air Authority and Lessee shall pay to Lessor on demand the amount of Losses which Lessor may incur as a result of any delay by Lessee in paying the same or any omission by the Lessee to pay the same.	
 
6.6	If Lessee is liable to gross-up or indemnify under Clause 6.1 or Clause 6.2, then, without in any way limiting, reducing or otherwise qualifying any rights of any Indemnitee or any obligations of Lessee under this Clause 6, Lessor shall:	
 
(a)	promptly upon becoming aware of the liability arising notify Lessee thereof; and	
 
(b)	in consultation in good faith with Lessee, for a period of up to thirty (30) days from the date of such notification, take such steps at the expense of Lessee as may be open to it to mitigate the effects of such circumstances on Lessee, including, if requested by Lessee, the filing of any Tax form or return which any Indemnitee is legally able to file;	
provided that neither Lessor nor any Indemnitee shall be under any obligation to take or continue to take any such action or other steps if an Event of Default has occurred and is continuing or if it is satisfied, in its absolute discretion, to do so would interfere with the right of Lessor or such Indemnitee to arrange its affairs (tax or otherwise) in whatever manner it thinks fit or oblige Lessor or such Indemnitee to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax, or have a material adverse effect on its business, or operations or financial condition or reputation or the financial basis under which, inter alia , the Transaction Documents have been entered into or would entail any cost or expense to Lessor or that Indemnitee (unless, in the case of any cost or expense, Lessor or that Indemnitee shall have been indemnified or otherwise secured to its satisfaction) or is otherwise prejudicial to it.
 
6.7	If any Indemnitee in good faith determines that it has realised a tax benefit (by way of deduction, credit or otherwise) as a result of any payment for which Lessee is responsible under this Clause 6, Lessor shall pay or use all reasonable endeavours to procure that the relevant Indemnitee pays to Lessee as soon as practicable after the tax benefit has been realised, an amount which the Indemnitee determines will ensure that (after taking into account of the payment itself) such Indemnitee is in no better and no worse position than it would have been if the deduction had not applied.	
 
6.8	Without prejudice to the obligations of Lessee pursuant to Clause 6.1, Lessor will use reasonable endeavours to deliver to Lessee and will use reasonable endeavours to procure that each other Indemnitee delivers to Lessee, as soon as reasonably practicable following receipt of Lessee’s written request therefor (accompanied by a copy of each requested document, any published instructions for such document, and an English translation of each such document and instruction that is not in English), such forms, certifications and	
 
7

other documents as (i) an Indemnitee is entitled under applicable law to execute or obtain and (ii) are required by applicable law to permit Lessee to make any payment to or for the account of such Indemnitee pursuant to this Agreement without withholding (or withholding at a reduced rate, as the case may be) any withholding Tax that Lessee would be required by any applicable law to withhold in the absence of such document provided that nothing in this Clause 6.8 shall oblige Lessor or any other Indemnitee to take any action if in its reasonable opinion, acting in good faith, to do so would have a material adverse effect on its business, operations or reputation or the financial basis on which the Transaction Documents have been entered into or would entail any cost or expense to Lessor or any other Indemnitee unless, in the case of any cost or expense, Lessee and each other Indemnitee shall have been indemnified or otherwise secured to its satisfaction. Without prejudice to the generality of the foregoing provisions of this Clause 6.8, Lessor will use reasonable endeavours to provide to Lessee as soon as reasonably practicable after Delivery, and in any event, no later than the first Rent Date falling after Delivery and on each anniversary of the Delivery Date falling during the Term, a statement from the Irish Tax Revenue Commissioners that Lessor is resident for tax purposes in Ireland.
 
7	QUIET ENJOYMENT	
 
7.1	Provided no Event of Default has occurred and is continuing under this Agreement, neither Lessor, the Lease Manager nor any person lawfully claiming by or through Lessor or the Lease Manager will interfere with the quiet use, possession and enjoyment of the Aircraft by Lessee, but the exercise by Lessor, the Security Trustee or any Lender of its rights under or in connection with this Agreement or the Assignment, in each case, pursuant to and in accordance with the terms of this Agreement or the Assignment (as the case may be) will not constitute such an interference.	
 
7.2	Simultaneously with delivery of the Aircraft from Lessor to Lessee under this Agreement, Lessor shall procure that the Security Trustee provides to Lessee the Quiet Enjoyment Letter subject to Lessee providing the Security Trustee with the Acknowledgement of the Assignment.	
 
7.3	Lessor will not exercise any rights pursuant to the Deregistration Power of Attorney save where an Event of Default has occurred and is continuing.	
 
7.4	Lessor will not exercise any rights pursuant to the letter set out in Part 2 of Exhibit C save where an Event of Default has occurred and is continuing.	
 
7.5	Lessor will not exercise any rights pursuant to the letter set out in Part 1 of Exhibit C more frequently than quarterly, save where a Default has occurred and is continuing.	
 
8	LESSEE’S COVENANTS	
 
8.1	Lessee hereby covenants with Lessor in the terms set out in Appendix 6.	
 
9	INSURANCE AND TOTAL LOSS	
 
9.1	Lessee hereby covenants with Lessor in the terms set out in Appendix 7.	
 
9.2	The provisions of Part 3 of Appendix 7 shall apply if a Total Loss occurs or if there is any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss.	
 
8

10	MANUFACTURER’S WARRANTIES	
 
10.1		
 
(a)	Pursuant to the terms of the Airframe Warranty Agreement and the Engine Warranties Agreement, with effect from the Delivery Date, Lessor will authorise Lessee to exercise, such rights as Lessor may have in respect of the Airframe Warranties and the Engine Warranties respectively upon the terms and subject to the conditions contained in the Airframe Warranty Agreement and the Engine Warranties Agreement.	
 
(b)	Lessee shall give Lessor prompt written notice of any warranty claim which is settled with Lessee on the basis of a total or partial cash payment in excess of *****. Lessee shall apply any cash payments whether above or below ***** to remedy the defect or, if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, as compensation to Lessee for any loss of use of the Aircraft arising as a result of such defect. Any cash payments to Lessee in respect of warranty claims which are not applied to the repair or remedy of defects in the Aircraft, and which are not in respect of compensation for loss of use of the Aircraft during the Term due to a defect covered by such warranty, shall be for Lessor’s account and shall be paid by Lessee to Lessor.	
 
(c)	Upon the occurrence of the earlier of an Event of Default or termination or expiry of the leasing of the Aircraft under this Agreement (each a “ Termination Event ”):	
 
 	(i)	all rights under the Airframe Warranties and the Engine Warranties will immediately revert to Lessor, including all claims thereunder (whether or not perfected except (aa) to the extent necessary to reimburse Lessee the actual costs incurred by it for the repair of any defect or, (bb) if any part of the cash payment has been made by the Manufacturer in respect of Lessee’s loss of use of the Aircraft, to compensate Lessee for any loss of use of the Aircraft suffered by it during the Term as a result of the defect) and Lessee will immediately take all steps and execute all documents required by Lessor to perfect such reversion; and	
 
 	(ii)	Lessor may retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this Clause 10 in the absence of such Event of Default or such Termination Event (arising otherwise than as a result of an Event of Default), as the case may be, cause any proceeds of any pending claims to be paid to Lessor, rather than to Lessee and recover from Lessee the proceeds of any such claims previously paid to Lessee to the extent that such claims relate to any defect in the Aircraft not fully and completely rectified by Lessee before such Event of Default or Termination Event (arising otherwise than as a result of an Event of Default), as the case may be and, in the absence of such an Event of Default, not constituting compensation for loss of use during the Term.	
 
10.2	To the extent any warranties relating to the Aircraft are made available under an agreement between any manufacturer, seller, subcontractor or supplier and Lessee, Lessee will:	
 
(a)	pay the proceeds of any claim thereunder in accordance with Clause 10.1 and pending such payment will hold the claim and the proceeds on trust for Lessor; and	
 
(b)	Lessee will take all such steps as are necessary at the end of the Term to ensure the benefit of any of those warranties which have not expired are vested in Lessor.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
9

11	INDEMNITY	
 
11.1	Lessee agrees to defend, indemnify and hold harmless the Indemnitees from and against any and all claims, proceedings, losses, liabilities, suits, judgments, costs, expenses, penalties or fines (each a “ Claim ”) regardless of when the same is made or incurred, whether during or after the Term:	
 
(a)	which may at any time be suffered or incurred directly or indirectly as a result of or connected with the possession, importation, delivery, performance, management, ownership, registration, control, maintenance, condition, service, repair, overhaul, leasing, use, operation, storage, transport or return of the Aircraft, any Engine or Part (either in the air or on the ground) whether or not the Claim may be attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise, and regardless of when the same arises or whether it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee;	
 
(b)	which arise out of any act or omission which invalidates or which renders voidable any of the Insurances; and	
 
(c)	which may at any time be suffered or incurred as a consequence of any design, article or material in the Aircraft, any Engine or any Part or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right or a breach of any obligation of confidentiality owed to any person,	
but excluding any Claim in relation to a particular Indemnitee to the extent that such Claim:
 
 	(i)	is covered pursuant to another indemnity provision of any Transaction Document; or	
 
 	(ii)	arises solely as a result of the wilful misconduct or Gross Negligence of that Indemnitee under any Transaction Document; or	
 
 	(iii)	relates to Lessor Taxes or a Lessor Lien attributable to that Indemnitee; or	
 
 	(iv)	arises solely as a result of any breach by that Indemnitee of any express obligation owed to Lessee under this Agreement or any other Transaction Document; or	
 
 	(v)	relates solely to either (a) any period or event occurring prior to the Delivery Date (save for any stamp duty or other Taxes imposed in connection with the execution and/or registration of any of the Transaction Documents) or (b) any period commencing or event occurring after the Expiry Date and return of the Aircraft in the condition required by this Agreement and which is unrelated to any act or omission of Lessee or the use or possession by Lessee of the Aircraft during the Term or the transactions contemplated by the Transaction Documents.	
 
11.2	The indemnities contained in this Agreement will continue in full force after the Expiry Date.	
 
11.3	All rights expressed to be granted to each Indemnitee (other than Lessor) under this Agreement are given to Lessor on behalf of each such Indemnitee.	
 
12	RETURN OF AIRCRAFT	
The provisions of Appendix 8 shall govern the parties’ respective rights and obligations regarding the return of the Aircraft.
 
13	DEFAULT	
 
13.1	Each of the events specified in Part 1 of Appendix 9 will constitute an Event of Default and a repudiation of this Agreement by Lessee.	
 
13.2	The provisions of Part 2 of Appendix 9 shall govern the respective rights and obligations of the parties following the occurrence of a Default or an Event of Default.	
 
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13.3	If Lessee fails to comply with any provision of any Transaction Document, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat the non-compliance as an Event of Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection therewith.	
 
13.4	The rights of Lessor under the Transaction Documents may be exercised as often as necessary, are cumulative and not exclusive of its rights under any law and may be waived only in writing and specifically. Delay in exercising or non-exercise of any such right will not constitute a waiver of that right.	
 
14	ASSIGNMENT	
 
14.1	The provisions set out in Appendix 10 shall govern assignment and/or transfer of Lessee’s and Lessor’s rights and obligations under this Agreement.	
 
15	ILLEGALITY	
 
15.1	If it becomes, or will become, illegal for either Lessor or Lessee to perform its obligations or to enforce its rights under any Transaction Document or to participate in the transactions contemplated thereby, Lessor or Lessee (as the case may be) shall, promptly upon becoming aware of such cessation or illegality, notify the other party thereof (such notice being referred to herein as an “ Illegality Notice ”). Subject to any restrictions imposed on the party affected by such illegality and provided that the rights of the other party are not adversely impacted by such illegality, the parties shall, following service or receipt of an Illegality Notice, negotiate in good faith for a period (the “ Consultation Period ”) of up to thirty (30) days from the date of the Illegality Notice (or such shorter period as may end on the date on which such illegality takes effect) with a view to restructuring the arrangements contemplated by the Transaction Documents so as to avoid such illegality. The party for whom it becomes illegal to perform its obligations or to enforce its rights under the Transaction Documents or to participate in the transactions contemplated thereby shall reimburse the other parties involved in such consultations for their reasonable legal and other expenses incurred in connection with such consultations and the implementation of arrangements (if any) agreed during such consultations. Lessee acknowledges that the Security Trustee or any Lender may, at no cost to Lessee, also participate in such consultations.	
 
15.2	If no satisfactory arrangement for restructuring the transactions contemplated by the Transaction Documents is agreed by the end of the Consultation Period, Lessor may, by written notice to Lessee, terminate the leasing of the Aircraft under this Agreement with effect from the date of such notice (if the illegality has become effective on or before such date) or otherwise with effect from the last Business Day before the illegality takes effect, whereupon the Lessee shall forthwith redeliver the Aircraft to Lessor in accordance with Appendix 8.	
 
16	NOTICES	
 
16.1	All notices under, or in connection with, the Transaction Documents will, unless otherwise stated, be given in writing by letter or facsimile. Any such notice is deemed effectively to be given as follows:	
 
(a)	if by letter, when delivered personally or, if sent by registered post, on the third day after posting; and	
 
(b)	if by facsimile, when transmitted and confirmed by the transmitting party’s fax machine.	
 
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16.2	The address, facsimile and telephone numbers of Lessee and Lessor are as follows:	

(a)	  	Lessee:	  	Address:	  	Av. Prolongación Paseo de la Reforma 490 Piso 1,
Col. Santa Fe Pena Blanca,
01210 Mexico	
				
	  		  	Attn:	  	General Counsel/Director Juridico	
	  		  	Facsimile:	  	+52 55 52 61 6460	
	  		  	Telephone:	  	+52 55 52 61 6400	
				
(b)	  	Lessor:	  	Address:	  	28 Upper Mount Street
Dublin 2
Ireland	
				
	  		  	Attn:	  	Company Secretary	
	  		  	Facsimile:	  	+353 1 639 8118	
		
	  	(with a copy to Amentum Capital Limited :	
				
	  		  	Address:	  	28 Upper Mount Street
Dublin 2
Ireland	
				
	  		  	Attn:	  	Company Secretary	
	  		  	Facsimile:	  	+353 1 639 8118	
	  		  	Telephone:	  	+353 1 6398111)	
 
16.3	All notices to be given under the Transaction Documents will be in English. All documents delivered to Lessor pursuant to the Transaction Documents will be in English, or if not in English, will be accompanied by a certified English translation.	
 
17	DISCLAIMERS AND WAIVERS	
 
17.1	THE AIRCRAFT IS DELIVERED “ AS IS, WHERE IS ” AND LESSEE AGREES AND ACKNOWLEDGES THAT AS BETWEEN LESSOR, LESSEE AND THE INDEMNITEES NEITHER LESSOR NOR ANY OTHER INDEMNITEE WILL HAVE ANY LIABILITY IN RELATION TO, AND NEITHER LESSOR NOR ANY OTHER INDEMNITEE HAS NOR WILL BE DEEMED TO HAVE MADE OR GIVEN, ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT, INCLUDING BUT NOT LIMITED TO:	
 
(a)	THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY USE OR PURPOSE, VALUE, CONDITION, OR DESIGN, OF THE AIRCRAFT OR ANY PART; OR	
 
(b)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM LESSOR’S OR ANY OTHER INDEMNITEE’S NEGLIGENCE, ACTUAL OR IMPUTED; OR	
 
(c)	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR ANY LIABILITY OF LESSEE TO ANY THIRD PARTY, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.	
 
17.2	LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND EACH INDEMNITEE, ALL ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF ANY INDEMNITEE AND ALL CLAIMS AGAINST EACH INDEMNITEE HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE OPERATION OR PERFORMANCE OF THE AIRCRAFT.	
 
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17.3	LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS CLAUSE AND THE OTHER TERMS OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE TERMS OF THIS AGREEMENT HAVE BEEN AGREED AND THE RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED NOTWITHSTANDING ITS PROVISIONS.	
 
18	CONFIDENTIALITY	
 
18.1	Lessor and Lessee agree that the Transaction Documents and information supplied pursuant to the Transaction Documents are to be kept confidential, subject to the exceptions, set forth in this Clause 18. Neither party will disclose or permit its officers, agents or advisers to disclose any information from or in connection with the Transaction Documents without the consent of the other or to use any such information for any purpose other than for the purpose of the transactions contemplated by the Transaction Documents, except:	
 
(a)	for disclosures of the terms of the Transaction Documents and any information provided under this Agreement made by Lessor to any actual or potential assignee or transferee permitted by Appendix 10 or to any actual or potential Lender or Security Trustee or to their respective professional advisers, provided that (i) Lessor has obtained a confidentiality undertaking in respect of such information from each such person or (ii) such person is subject to a recognised duty of confidentiality;	
 
(b)	for disclosures made by either party to its professional advisers, shareholders and any rating agency or as may be required by law or legal process or by the administrative or regulatory requirements of any recognised stock exchange on which such party’s or its shareholders’ shares are listed;	
 
(c)	for disclosures made by or on behalf of either party or any Indemnitee to any governmental or other official body in connection with the registration of any Transaction Document, the Mortgage or the Assignment or otherwise reasonably advisable in order to establish, maintain, protect and enforce the rights and remedies of either party hereto or any Indemnitee under the Transaction Documents, the Mortgage or the Assignment;	
 
(d)	Lessee may deliver a copy of this Agreement to International Finance Corporation (“ IFC ”) pursuant to and in accordance with the facility agreement between Lessee and the Guarantor and IFC and IFC may disclose this Agreement to its legal advisers and other professional advisers provided such persons are under a recognised duty of confidentiality or have executed a confidentiality undertaking or to a rating agency or to any potential assignee or transferee of IFC, subject to the receipt by Lessee of a confidentiality undertaking from each such assignee or transferee,	
provided that notwithstanding the foregoing provisions of this Clause 18, Lessor may only disclose the Agreed Maintenance Programme to third parties who are either bound by a duty of confidentiality or have executed a confidentiality undertaking.
 
19	LAW AND JURISDICTION	
 
19.1	This Agreement, including any non-contractual obligations arising out of or in connection with, this Agreement is governed by and this Agreement shall be construed in accordance with the laws of Ireland.	
 
19.2	The parties hereto irrevocably agree that any legal action or proceedings in connection with this Agreement may be brought in the courts of Ireland. The parties further agree that any party may take proceedings against the other in the courts of the domicile of the	
 
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 	parties or where the Aircraft is located, hereby waiving any jurisdiction not referred to in this Clause 19.2. The courts agreed to in this paragraph shall have jurisdiction to settle any disputes arising out of or in connection with this Agreement.	
 
19.3	Lessee hereby irrevocably designates, appoints and empowers Matsack Trust Limited, 70 Sir John Rogerson’s Quay, Dublin 2, Ireland, to receive for it and on its behalf service of process issued out of the Irish courts in any legal action or proceeding arising out of or in connection with this Agreement and/or any other Transaction Document to which it is a party.	
 
19.4	Each of the parties irrevocably waives any objection it may now or hereafter have to the laying of venue of any action or proceeding in any court and any claim it may now or hereafter have that any action or proceeding has been brought in an inconvenient forum.	
 
19.5	Each party irrevocably and unconditionally:	
 
(a)	agrees that if the other brings legal proceedings against it or its assets in relation to this Agreement, no immunity from such legal proceedings will be claimed by it;	
 
(b)	waives any such right of immunity which it or its assets now has or may in the future acquire; and	
 
(c)	consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings.	
 
14

IN WITNESS whereof the parties hereto have executed this Agreement on the date shown at the beginning of this Agreement.
SIGNED on behalf of CONCESIONARIA VUELA
COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.

By:	 	/s/ Fernando Suárez Gerard	
Name:	 	Fernando Suárez Gerard	
Title:	 	CFO	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
SIGNED on behalf of AMENTUM AIRCRAFT LEASING NO. THREE LIMITED

By:	 	/s/ Mitchel Simpson	
Name:	 	Mitchel Simpson	
Title:	 	Chief Financial Officer	
 
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APPENDIX 1
PART 1
DEFINITIONS
““ A ” Check ” means a package of scheduled maintenance tasks with repeat intervals up to 600 Flight Hours, 6 months and 500 Cycles (including any lesser tasks) performed by an Agreed Maintenance Performer in accordance with the Agreed Maintenance Programme.
“ Acknowledgement of Assignment of Guarantee ” means the acknowledgement from the Guarantor to Lessor and the Security Trustee in respect of the Assignment in the form of Part 1 of Exhibit A.
“ Acknowledgement of Assignment of Lease ” means the acknowledgement from Lessee to Lessor and the Security Trustee in respect of the Assignment in the form of Part 2 of Exhibit A.
“ Agreed Maintenance Performer ” means Lessee, Aeromantenimiento S.A. and any person which is approved by, and holds all necessary licences from, the Air Authority and holding a valid repair station certificate for maintenance work on the Airframe, Landing Gear, APU, Engine and Parts issued by the FAA or EASA or, in respect of any “A” Check, any maintenance facility approved by the Air Authority.
“ Agreed Maintenance Programme ” means the Maintenance Programme for the Aircraft from time to time as approved by the Air Authority which shall be based on the Maintenance Planning Document.
“ Agreed Value ” means with respect to the period from the Delivery Date up to but excluding the first anniversary of the Delivery Date, ***** and thereafter reducing on each anniversary of the Delivery Date by an amount equal to ***** of the amount of the Agreed Value on the previous such anniversary or the Delivery Date as applicable.
“ Affiliate ” means in relation to any person (the “ First Person ”):
 
(a)	any person controlled by the First Person;	
 
(b)	any person who controls such First Person;	
 
(c)	any person controlled by the same person who controls the First Person,	
(and for this purpose “ Control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Air Authority ” means all and any of the authorities, government departments, committees or agencies which under the laws of the State of Registration shall from time to time:
 
(a)	have control or supervision of civil aviation in that state; or	
 
(b)	have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.	
“ Aircraft ” means the aircraft described in Appendix 2, (which term includes where the context admits a separate reference to the Engines, Parts and Aircraft Documents) (but for the avoidance of doubt excludes any engine or part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Aircraft Documents ” means all such technical data, documents, manuals and log books and any other records relating to the Aircraft which Lessee is required to keep and maintain to comply with the regulations of the Air Authority and FAA and all additions, renewals, revisions and replacements from time to time made in accordance with this Agreement and shall include:
 
(a)	without limitation, at Delivery, those documents delivered to Lessee by Lessor; and	
 
(b)	at redelivery, those documents set out in Part 3 of Appendix 8.	
“ Airframe ” means the Aircraft, excluding the Engines and Aircraft Documents.
“ Airframe Manufacturer ” means Airbus S.A.S.
“ Airframe Warranties ” means the warranties in respect of the Aircraft specified in the Airframe Warranty Agreement.
“ Airframe Warranty Agreement ” means the airframe warranty agreement entered into or to be entered into on or prior to the Delivery Date between Lessee, Lessor, the Security Trustee and the Airframe Manufacturer.
“ Airworthiness Directive ” or “ AD ” means any airworthiness directive issued or endorsed by the FAA, the EASA and/or the Air Authority applicable to the Airframe, any Engine, any Part or the Aircraft Documents.
“ APU ” means the auxiliary power unit installed on the Aircraft at Delivery and any replacement auxiliary power unit installed on the Aircraft in accordance with this Agreement and in each case includes any attaching Part.
“ APU Available Balance ” shall have the meaning ascribed to such term in part 2 of Appendix 5.
“ APU Hours ” means each hour or part of an hour during which the APU is operated.
“ APU Initial Balance ” shall have the meaning ascribed to such term in part 2 of Appendix 5.
“ APU Performance Restoration ” means a shop visit which restores performance and durability of the APU so as to return the APU to service for a complete APU run interval and shall include a Heavy Repair (as defined in the Honeywell Shop Maintenance Philosophy) or APU overhaul as required by the APU manufacturer’s component maintenance manual.
“ Arranger ” means HSH Nordbank AG, in its capacity as head arranger under Lessor’s financing arrangements.
“ Assignment ” means any present or future assignment in favour of the Security Trustee of Lessor’s rights in respect of, amongst other things, this Agreement, the Insurances, any Letter of Credit, the Guarantee, the Deposit and the Maintenance Reserves as security for Lessor’s obligation to the Lenders.
“ Assignment of Insurances ” means the assignment of Lessee’s rights, title, benefit and interest in and to the Insurances (other than the liability insurances) entered into or to be entered into on or prior to the Delivery Date between Lessor as assignee and Lessee as assignor.
“ Bill of Sale ” means the bill of sale transferring ownership of the Aircraft from the Airframe Manufacturer to Lessor.
“ Business Day ” means a day (other than a Saturday or Sunday) on which business of the nature required by this Agreement is carried out in Ireland and Mexico or, where used in relation to payments, on which banks are open for business in Dublin, Ireland and New York.
 
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“ Certificate of Acceptance ” means a certificate of acceptance in respect of the Aircraft duly executed by Lessee substantially in the form of Exhibit B.
““ C ” Check ” means a package of scheduled maintenance tasks with repeat intervals of 20 months 6,000 Flight Hours or 4,500 Cycles performed by an Agreed Maintenance Performer in accordance with the Maintenance Planning Document in effect on the relevant date.
“ Claim ” has the meaning given to it in Clause 11.1.
“ Consolidated Text ” means the Consolidated Text of the Convention and the Protocol attached to resolution No. 1 of the Final Act of the Diplomatic conference to adopt the Convention and the Protocol held under the auspices of ICAOP and UNIDROIT at Cape Town, South Africa from 29 October to 16 November, 2001.
“ Convention ” means the Convention on International Interests in Mobile Equipment signed in Cape Town, South Africa on 16 November, 2001.
“ CPCP ” means corrosion prevention and control programme.
“ Cycle ” means , in relation to the Airframe, one take-off and landing of the Aircraft, and in relation to an Engine, an APU, or a Landing Gear, or any fitted component installed in any of the foregoing one take off and landing of any aircraft on which that Engine, APU, or Landing Gear or any other fitted component, as the case may be, is installed.
“ Default ” means any Event of Default and any event which with the giving of notice, lapse of time or determination of materiality would constitute an Event of Default.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee under this Agreement.
“ Delivery Check Flight ” has the meaning given to such term in Part 1 of Appendix 7A.
“ Delivery Condition ” means the condition of the Aircraft as specified in Part 2 of Appendix 7A.
“ Delivery Date ” means the date on which Delivery takes place.
“ Delivery Location ” means Lufthansa Technik Philippines facility in Manila, Philippines.
“ Deposit ” means the amount equal to ***** paid or payable to by Lessee to Lessor in cash or provided or to be provided by Lessee to Lessor by way of Letter of Credit, in each case, in accordance with Clause 5.
“ Deregistration Power of Attorney ” means a deregistration and export power of attorney in the form of Exhibit D or in such other form agreed by Lessor.
“ Dollars ” and “ $ ” means the lawful currency of the United States of America.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 or any other organisation or authority that, under the laws of the European Union, shall from time to time have jurisdiction over, amongst other things, aircraft airworthiness and aircraft safety standards for the European Union.
“ Emergency Operations ” means any deviation in an agreed flight path of the Aircraft to a Prohibited Jurisdiction made solely in order to protect the Aircraft or the lives, safety and/or wellbeing of the passengers and crew and provided Lessee shall promptly remove the Aircraft from such Prohibited Jurisdiction upon cessation of the conditions giving rise to the relevant flight path deviation.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ EMMP ” means the latest revision of the engine maintenance management programme of Lessee for the Engines adapted from the latest revision of the Engine Manufacturer’s engine maintenance management programme.
“ Engine ” means whether or not installed on the Aircraft:
 
(a)	each engine of the manufacture and model specified in Appendix 2 such engines being described as to serial numbers on the Certificate of Acceptance to be executed by Lessee upon delivery of the Aircraft under this Agreement; and	
 
(b)	any Suitable Replacement Engine which has replaced that engine in accordance with the terms of this Agreement,	
and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any Replaced Engine title to which has passed to Lessee pursuant to this Agreement (and, for the avoidance of doubt, the term “ Engine ” excludes any engine installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Engine LLPs ” means each or any of the Engine Manufacturer’s certified cyclic life controlled parts as specified in the Engine Manufacturer’s “Time Limits Manual”.
“ Engine Loss ” means the occurrence of any of the events referred to in the definition of “Total Loss” but with references therein to “Aircraft” being construed as references to any Engine.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, in respect of any Engine, the performance of a refurbishment of such Engine to clear it until its next anticipated Engine Performance Restoration (including, without limitation, the completion of a Level 3 Refurbishment on each of the high pressure turbine, the high pressure compressor and the combuster) in all cases in accordance with the maintenance procedures and soft times as defined in the EMMP (excluding any LRU’s on such Engine).
“ Engine Warranties ” means, in respect of each Engine, the warranties in respect of those Engines specified in the Engine Warranties Agreement.
“ Engine Warranties Agreement ” means the engine warranties agreement entered into or to be entered into on or before the Delivery Date between the Engine Manufacturer, the Security Trustee, Lessor and Lessee.
“ Event of Default ” means any of the events listed in Part 1 of Appendix 9.
“ Expiry Date ” means:
 
(a)	the Scheduled Expiry Date; or	
 
(b)	the date on which the leasing of the Aircraft to Lessee is terminated or expressed to expire under and in accordance with the provisions of this Agreement; or	
 
(c)	the date on which Lessor receives the Agreed Value following a Total Loss.	
“ FAA ” means the Federal Aviation Administration of the United States of America and any successor thereof.
“ Facility Agent ” means HSH Nordbank AG or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ Final Delivery Date ” means ***** or such later date as the parties may agree.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Financial Indebtedness ” means any indebtedness for or in respect of:
 
(a)	moneys borrowed;	
 
(b)	any amount raised by acceptance under any acceptance credit facility;	
 
(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;	
 
(d)	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with Mexican GAAP or IFRS (whichever methodology is used by Lessee with respect to the preparation of its financial statements) be treated as a finance or capital lease;	
 
(e)	receivables sold or discounted as a means of raising money (other than any receivables to the extent they are sold on a non-recourse basis);	
 
(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;	
 
(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the market to market value shall be taken into account);	
 
(h)	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and	
 
(i)	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.	
“ Fleet Aircraft ” means any other aircraft owned or operated by Lessee.
“ Flight Hour ” means in relation to the Aircraft, each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground and in relation to an Engine, a Landing Gear, an APU and a Part each hour or part thereof (rounded up to two decimal places) elapsing from the moment the wheels of an aircraft on which that Engine, the Landing Gear, the APU or the Part, as the case may be, is installed leaves the ground on take off until the wheels of that aircraft next touch the ground.
“ Government Entity ” means (a) any national government, political subdivision thereof, or local jurisdiction therein; or (b) any instrumentality, board, commission, court, tribunal or agency of any thereof, however constituted; or (c) any association, organisation, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Gross Negligence ” means an act or omission which is done deliberately with intent to cause loss or damage or recklessly and with knowledge, that damage, death, delay, injury or loss would possibly result.
“ Guarantee ” means the guarantee dated the date of this Agreement executed by the Guarantor in favour of Lessor in respect of Lessee’s obligations to Lessor under the Transaction Documents.
“ Guarantor ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., a company organised and validly existing under the laws of Mexico.
 
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“ Habitual Base ” means Mexico or such other jurisdiction as agreed to by Lessor pursuant to the terms of this Agreement.
“ IDERA ” means an irrevocable deregistration and export request authority in the form set out in Annex 1 to the Convention.
“ IFRS ” means the International Financial Reporting Standards, being the guidelines and rules set from time to time by the International Accounting Standard Board that companies and organisations can follow when compiling financial statements;
“ Indemnitees ” means:
 
(a)	each of Lessor, the Lease Manager, the Security Trustee, the Facility Agent, the Arranger and the Lenders, including, any of their respective successors and permitted assigns, shareholders, Subsidiaries and Affiliates and their respective directors, officers, agents and employees; and	
 
(b)	Lufthansa Technik AG and Lufthansa Technik Philippines Inc. (including their respective successors, and each of their respective employees, directors and officers) for:	
 
 	(i)	a period of ***** commencing on the Delivery Date; and	
 
 	(ii)	the purposes of the aviation general legal liability insurance only (and it being agreed that none of the persons listed in this paragraph (b) shall constitute an Indemnitee for any other purpose whatsoever) other than any claims arising out of or in connection with their capacity as manufacturer, repairer or servicing agent.	
“ Insurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ International Interest ” has the meaning given to it in the Convention.
“ International Registry ” has the meaning given to it in the Convention.
“ Landing Gear ” means the landing gear assembly of the Aircraft including any attaching Part.
“ Landing Gear Overhaul ” means a full overhaul of the Landing Gear as required by the Maintenance Planning Document and in accordance with the manufacturer’s procedures.
“ LC Amount ” has the meaning given to such terms in Clause 5.2;
“ Lease Manager ” means Amentum Capital Limited, a company incorporated in Ireland or such other entity the Lessor notifies to the Lessee.
“ Lenders ” means such financial institution(s) which from time to time participate in the financing of the Aircraft for Lessor and/or for whose benefit security over, or rights relating to, the Aircraft and/or this Agreement and/or the Insurances is granted by Lessor or at Lessor’s request.
“ Lessor Lien ” means:
 
(a)	any Assignment, any Mortgage and any security interest whatsoever from time to time created by or through Lessor in connection with the financing of the Aircraft; or	
 
(b)	any other security interest in respect of the Aircraft which results from acts of or claims against Lessor, the Lease Manager or their respective Affiliates or Subsidiaries not related to the transactions contemplated by or permitted under this Agreement; or	
 
(c)	liens in respect of the Aircraft for Lessor Taxes.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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“ Lessor Taxes ” means Taxes in respect of any Indemnitee:
 
(a)	imposed as a direct result of activities of that Indemnitee in the jurisdiction imposing the liability unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(b)	imposed on the net income, gross profits or gains of that Indemnitee by any Government Entity in the country of incorporation of the Indemnitee or any other jurisdiction where that Indemnitee has a place of business, in each case unrelated to the transactions contemplated by the Transaction Documents, such Indemnitee’s dealings with Lessee or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(c)	imposed with respect to either (a) any period or event occurring prior to the Delivery Date (save for any stamp duty or other Taxes imposed in connection with the execution and/or registration of any of the Transaction Documents) or (b) any period commencing or event occurring after the Expiry Date and unrelated to the transactions contemplated by the Transaction Documents or the use or operation of the Aircraft or any part thereof by Lessee; or	
 
(d)	imposed solely as a direct result of the Gross Negligence or wilful misconduct of that Indemnitee or breach by that Indemnitee of any of its express obligations to Lessee and/or Guarantor under any of the Transaction Documents, but excluding any such breach which is attributable to or arises out of any breach by Lessee of its obligations under this Agreement or any other Transaction Document or any Event of Default; or	
 
(e)	imposed solely as a direct result of a voluntary or involuntary sale, transfer, assignment, novation or other disposition by such Indemnitee of all or part of an interest in the Aircraft or any part thereof or this Agreement, save for the Assignment, the Mortgage and/or any such sale, transfer, assignment or disposition which has occurred directly or indirectly as a result of an Event of Default and/or any such sale, assignment, transfer or disposition which has occurred with the consent of Lessee pursuant to Clause 6.6, Clause 15 or Clause 19; or	
 
(f)	to the extent that the same are imposed or arise solely as a result of a Lessor Lien attributable to that Indemnitee; or	
 
(g)	to the extent attributable to the failure of that Indemnitee to comply with Clause 6.8 of this Agreement;	
 
(h)	to the extent that the same arise as a result of any financing arrangements entered into by such Indemnitee in connection with this Agreement and are not related to the use, operation, leasing, maintenance, condition, design, defect, insurance or any other matters set forth in Clauses 11.1(a) to (c) inclusive of this Agreement; or	
 
(i)	to the extent that the same are increased solely by reason of Lessor voluntarily changing, after the date of this Agreement the jurisdiction in which it is resident for tax.	
“ Letter of Credit ” means a letter of credit which meets the requirements set out in paragraph 2 of Part 1 of Appendix 5;
“ Level 3 Refurbishment ” has the meaning given to it in the latest revision of the Engine Manufacturer’s engine management programme.
“ LIBOR ” means, in respect of the applicable period for the calculation of default interest hereunder or in respect of any Rental Period for the calculation of Rent under Clause 5:
 
(a)	the applicable Screen Rate; or	
 
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(b)	if no Screen Rate is available for Dollars for the applicable interest period or Rental Period, as the case may be, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Lessor at its request, quoted by the Reference Banks to leading banks in the London interbank market,	
for the offering of deposits in Dollars for the applicable interest period or Rental Period, as the case may be, as of 11.00 a.m. (London time) two (2) Business Days before the first day of such period.
“ Life Limited Part” means any Part that has a pre-determined life limit as mandated by Manufacturer, the Air Authority, FAA, EASA or any other Government Entity, as the context requires, which requires any such Part to be discarded upon reaching such life limit.
“ Loan Agreement ” means the Loan Agreement dated 7 July 2008 between Lessor, as borrower and HSH Nordbank AG as arranger, original lender, the agent and the security trustee (as amended and/or supplemented from time to time).
“ Loss ” means any cost, expense, financial liability, damage or monetary loss of any kind.
“ LRU ” means a line replacement unit.
“ Maintenance Planning Document ” or “ MPD ” means the latest revision of the maintenance planning document issued by the Airframe Manufacturer in respect of the same type of aircraft as the Aircraft.
“ Maintenance Programme ” means Lessee’s Air Authority approved maintenance programme for the Aircraft in accordance with the Maintenance Planning Document encompassing scheduled maintenance (including block maintenance), condition monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including but not limited to, servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, corrosion control, inspection and treatments.
“ Maintenance Reserves ” has the meaning given to it in Part 2 of Appendix 5.
“ Major Checks ” means the 6 Year Check and the 12 Year Check.
“ Mandatory Service Bulletin ” means any service bulletin affecting the airworthiness or safety of the Aircraft which is issued by the Manufacturer and compliance with which is required within a defined period of time.
“ Manufacturer ” means in respect of: (a) the Airframe, the Airframe Manufacturer; the Engines, the Engine Manufacturer; and (c) with respect to a Part (other than a complete Engine), the manufacturer of such Part.
“ Mexico ” means the United Mexican States.
“ Mexican GAAP ” means the generally accepted and consistently applied accounting principles and practices in the State of Incorporation.
“ Minimum Liability Coverage ” means ***** or such higher amount carried by Lessee on its fleet policy.
“ Mortgage ” means any present or future aircraft mortgage, pledge or security agreement made by Lessor in favour of the Security Trustee in respect of the Aircraft.
“ Other Agreements ” means together
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
23

(a)	the lease agreement dated on or about the date hereof between the Lessor and Lessee with respect to the Airbus A320-200 aircraft with manufacturer’s serial number 3543; and	
 
(b)	any other lease agreement entered into or to be entered into between Lessor (or any Affiliate of Lessor) with Lessee (or any Affiliate of Lessee).	
“ Part ” means whether or not installed on the Aircraft:
 
(a)	any component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft at Delivery; and	
 
(b)	any other component, furnishing or equipment (other than a complete Engine) title to which has passed to Lessor pursuant to this Agreement,	
but excludes any such items title to which has passed to Lessee pursuant to this Agreement (and for the avoidance of doubt the term “ Part ” excludes any part installed on the Aircraft title to which is not required by this Agreement to be passed to or vested in Lessor).
“ Permanent Repairs ” means any and all repairs relating to the Aircraft which:
 
(a)	subject to (c) and (d) below, are of a permanent nature;	
 
(b)	shall have been reviewed and completed in accordance with the latest revision of the Manufacturer’s published guidelines applicable at the time of repair and supported by documentation evidencing accomplishment in accordance with FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Airframe Manufacturer’s written approval (wherein a statement of no technical objection does not constitute the Airframe Manufacturer’s written approval and a statement of conformity to type certificate will be required)) or EASA or FAA STC (Supplemental Type Certificate) or otherwise approved by the FAA and/or EASA;	
 
(c)	shall be flush unless not available from the Airframe Manufacturer or the original equipment manufacturer;	
 
(d)	shall be approved for unlimited continued service, without time limitations for removal, repair or replacement and shall have no special or distinct repetitive inspection requirements, unless no such repair exists, in which case:	
 
 	(i)	Lessee shall provide to Lessor, at the time the repair is being carried out, written confirmation from the Manufacturer that no further repair is currently available or is reasonably capable of being developed within a reasonable period; and	
 
 	(ii)	notwithstanding the written confirmation, Lessee shall carry out the repair with the least number of repeat inspections or the greatest time between and with the least potential impact for future operators as is reasonably possible given Manufacturer’s guidelines.	
“ Permitted Lien ” means:
 
(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings;	
 
(b)	any lien of a repairer, mechanic, carrier, hangarkeeper or other similar lien arising in the ordinary course of business or by operation of law in respect of obligations which are not overdue or are being contested in good faith by appropriate proceedings; and	
 
(c)	any Lessor Lien,	
 
24

but only if (in the case of both (a) and (b)) (i) adequate reserves have been provided by Lessee for the payment of the Taxes or obligations; and (ii) such proceedings, or the continued existence of the lien, do not give rise to any likelihood of the sale, forfeiture, detention or other loss of the Aircraft or any interest therein or of criminal liability or unindemnified civil liability on Lessor, the Security Trustee or any Lender.
“ Permitted Sublease ” means a sublease in compliance with Clause 4.1(c) and (d) of Appendix 6.
“ Permitted Sub-Lessee ” means any of:
 
(a)	Taca International Airlines, S.A.;	
 
(b)	Aerovias Del Continente Americano S.A. AVIANCA;	
 
(c)	Trans American Airlines, S.A.;	
 
(d)	Lineas Aereas Costarricenses, S.A.;	
 
(e)	Aviateca, S.A.;	
 
(f)	Aerolineas Galapagos S.A. Aerogal; and	
 
(g)	Spirit Airlines.	
“ Permitted Transferee ” means any person who (a) is not a competitor, or any Affiliate of a competitor, of Lessee; (b) is experienced in cross border leasing or owned or managed by a person who is so experienced; and (c) has a net worth of at least ***** (or whose obligations under this Agreement are guaranteed by a person with at least such a net worth).
“ PMA Part ” means a Part which has not been manufactured by the Airframe Manufacturer, the Engine Manufacturer or the manufacturer of the relevant replaced Part (as applicable) and is not approved by the Airframe Manufacturer or the Engine Manufacturer for installation in the Aircraft or an Engine (as applicable).
“ Pre-Delivery Procedure ” means the procedure set out in Part 1 of Appendix 7A.
“ Process Agent Power of Attorney (Lessor) ” means a process agent power of attorney substantially in the form of Exhibit G or in such other form requested by Lessor.
“ Process Agent Power of Attorney (Guarantor) ” means a process agent power of attorney substantially in the form of Exhibit H or in such other form requested by Lessor.
“ Prohibited Jurisdiction ” means any jurisdiction which, at any relevant time, is subject to an embargo or sanction or prohibition order (or any similar order or directive) of:
 
(a)	the United Nations Security Council or the European Union; or	
 
(b)	the United States of America,	
any which is applicable to the Lessee or any Indemnitee or the ownership, leasing or financing of the Aircraft or the transactions contemplated by the Transaction Documents and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemptions which would be available and any operations to the extent that they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
25

“ Protocol ” means the Protocol to the Convention on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on 16 November, 2001.
“ Quiet Enjoyment Letter ” means a letter from the Security Trustee to Lessee in the form of Exhibit E.
“ Recognition of Rights Agreement ” means an agreement in form and substance satisfactory to the Lessor and the Security Trustee (acting reasonably) concerning recognition of rights between Lessee, Lessor, the Security Trustee and any other owners, financiers or lessors of engines of the same make and model as the Engines (or any other engines compatible therewith) operated by Lessee.
“ Redelivery ” means the redelivery of the Aircraft by Lessee to Lessor in accordance with Appendix 8.
“ Redelivery Date ” means the date on which Redelivery occurs.
“ Redelivery Location ” has the meaning given to it in Part 1 of Appendix 8.
“ Reference Banks ” means the principal London branches of HSH Nordbank AG, Barclays Bank plc and Citibank N.A.
“ Reinsurances ” has the meaning given to it in paragraph 1 of Part 1 of Appendix 7.
“ Rent ” means each amount calculated pursuant to Clause 5.4.
“ Rental Period ” has the meaning given to it in Clause 5.3.
“ Rent Date ” means the first day of each Rental Period.
“ Replacement Part ” means, in relation to any Part to be replaced under this Agreement, a component, furnishing or part (other than a complete Engine) (provided that such component, furnishing or Part is not a PMA Part) that has the same or interchangeable specifications and modification status, is in as good an operating condition as, and a value, utility and remaining life equal to or greater than, the Part to be replaced (assuming such replaced Part was in the condition and repair required by the terms of this Agreement) and which has not accumulated more than 110% of the accumulated calendar time, Flight Hours and Cycles of the Aircraft and in respect of which title is capable of passing to Lessor free and clear of all Security Interests other than Permitted Liens.
“ Return Condition ” has the meaning given to it in Part 1 of Appendix 8.
“ Scheduled Delivery Date ” means the date notified by Lessor to Lessee pursuant to Clause 4.2.
“ Scheduled Delivery Month ” means *****.
“ Scheduled Expiry Date ” means the date falling sixty (60) months after the Delivery Date.
“ Screen Rate ” means the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Bloomberg screen. If the agreed page is replaced or service ceases to be available, Lessor may specify another page or service displaying the appropriate rate after consultation with Lessee.
“ Security Interest ” means any mortgage, charge, pledge, lien, assignment, hypothecation, right of set-off, right of detention or any agreement or arrangement having the effect of creating a security interest other than a Permitted Lien.
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
26

“ Security Trustee ” means HSH Nordbank AG, or such other institution or institutions as Lessor may from time to time advise Lessee in writing.
“ SENEAM ” means Servicios a la Navegación en el Espacio Aéreo Mexicano .
“ State of Incorporation ” means Mexico.
“ State of Registration ” means Mexico or such other jurisdiction as agreed to by Lessor pursuant to the terms of this Agreement.
“ Subsidiary ” means:
 
(a)	in relation to any reference to accounts, any entity whose accounts are consolidated with the accounts of Lessee in accordance with Mexican GAAP or IFRS;	
 
(b)	for any other purpose an entity from time to time:	
 
 	(i)	of which another has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting share capital; or	
 
 	(ii)	which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation,	
(and for this purpose “ control ” means either the ownership of more than fifty per cent. (50%) of the voting share capital (or equivalent right of ownership) of a person or power to direct its policies and management whether by contract or otherwise).
“ Suitable Replacement Engine ” means an engine:
 
(a)	which is of the same model, and has the same thrust rating as, or is an improved or advanced version of, the Engine it replaces (the “ Replaced Engine ”), approved by the Air Authority for installation and operational use on the Airframe in conjunction with the other Engine;	
 
(b)	(unless otherwise agreed by Lessor, acting reasonably) which shall have undergone no more Engine Performance Restorations since new than the Replaced Engine; and	
 
(c)	which has a value and utility at least equal to the Replaced Engine assuming the Replaced Engine was in the condition and repair required by the terms of this Agreement.	
“ Taxes ” means all present and future taxes, levies, imposts, duties or charges of any nature whatsoever, and wheresoever imposed, including (without limitation) any registration tax in respect of the Aircraft, any withholding taxes, any value added tax or any other tax in respect of added value and any franchise, transfer, sales, use, business, occupation, excise, fuel, carbon, personal property, real property, stamp or other tax imposed by any Government Entity together with any penalties, additions to tax, fines or interest thereon and tax, taxes and taxation shall be construed accordingly.
“ Term ” means the period commencing on the Delivery Date and ending on Expiry Date.
“ Termination Event ” has the meaning assigned to it in Clause 10.1(c).
“ Total Loss ” has the meaning assigned to it in Part 3 of Appendix 7.
“ Transaction Documents ” means this Agreement, the Engine Warranties Agreement, the Airframe Warranty Agreement, the Certificate of Acceptance, the Assignment of Insurances, the Acknowledgement of Assignment of Lease, the Acknowledgement of Assignment of Guarantee, the Guarantee, the Deregistration Power of Attorney, the IDERA, the Process Agent Power of
 
27

Attorney (Lessor), the Process Agent Power of Attorney (Guarantor), the Quiet Enjoyment Letter and any other document which is entered into in connection with any of those agreements and is designated as such by Lessor and Lessee.
“ Wet Lease ” means a lease agreement with respect to the Aircraft:
 
(a)	pursuant to which Lessee agrees to operate the Aircraft under its air operator’s certificate on behalf of a third party airline under terms where all payment, operational (including crew), maintenance, re-delivery and insurance obligations under this Agreement and for the Aircraft remain the responsibility of Lessee and Lessee remains fully liable to comply with all such obligations under or in connection with this Agreement;	
 
(b)	where there is no change in the Habitual Base or the State of Registration;	
 
(c)	pursuant to which it is specifically stated in such wet lease that such agreement is expressly subordinated to the terms of this Agreement, any Mortgage, any Assignment and the interests of Lessor, the Security Trustee and the Lenders in and to the Aircraft, this Agreement, any Mortgage and any Assignment (as the case may be);	
 
(d)	the term of which, when aggregated with (i) any renewals or extensions thereof and (ii) the term of any consecutive such lease agreements (if any and as applicable), does not exceed 6 months unless Lessee shall have procured the consent of Lessor and the Security Trustee (which consent shall not be unreasonably withheld or delayed); and	
 
(e)	pursuant to which the expiry date thereunder occurs on or before the Expiry Date and the termination of this Agreement for any reason whatsoever will automatically result in such wet lease terminating and Lessor or (if applicable) the Security Trustee shall be entitled to promptly repossess and de-register the Aircraft thereafter.	
“ 6 Year Check ” means a 6 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 6 years which shall include all system, zonal and structural tasks with an interval of 6 years or lower, all Flight Hour or Cycles driven tasks which are not due to be carried out at 6 years as a result of utilisation but which for planning and access reasons would be performed at this 6 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
“ 6 Year Check Available Balance ” shall have the meaning ascribed to such term in Part 2 of Appendix 5.
“ 6 Year Check Initial Balance ” shall have the meaning ascribed to such term in Part 2 of Appendix 5.
“ 12 Year Check ” means a 12 year check performed by an Agreed Maintenance Performer in accordance with the MPD in effect when such check is carried out and required to be performed at a threshold/interval of 12 years which shall include all system, zonal and structural tasks with an interval of 12 years or lower, all Flight Hour or Cycles driven tasks which are not due to be carried out at 12 years as a result of utilisation but which for planning and access reasons would be performed at this 12 year check, all lower level checks, cabin refurbishment, out of phase work and cleaning and repair.
 
28

APPENDIX 1
PART 2
CONSTRUCTION
 
(a)	In this Agreement, unless the contrary intention is stated, a reference to:	
 
 	(i)	each of “ Lessor ”, “ Lessee ”, “ Guarantor ” or any other person includes without prejudice to the provisions of this Agreement any successor in title to it and any permitted assignee or transferee;	
 
 	(ii)	words importing the plural shall include the singular and vice versa;	
 
 	(iii)	any document shall include that document as amended, novated or supplemented;	
 
 	(iv)	a law (1) includes any statute, decree, constitution, regulation, order, judgment or directive of any Government Entity; (2) includes any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (3) includes any judicial or administrative interpretation or application thereof and (4) is a reference to that provision as amended, substituted or re-enacted;	
 
 	(v)	a Clause, or a Recital or an Appendix or an Exhibit is a reference to a Clause, or recital of, or an appendix or an exhibit to, this Agreement;	
 
 	(vi)	an “ amendment ” includes a supplement, novation, restatement or re-enactment and “ amended ” will be construed accordingly;	
 
 	(vii)	an “ approval ” shall be construed as a reference to any approval, consent, authorisation, exemption, permit, licence, registration, filing or enrolment by or with any competent authority;	
 
 	(viii)	an “ authorisation ” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation;	
 
 	(ix)	the words “ other ” and “ otherwise ” shall not be construed ejusdem generis with any foregoing words where a wider construction is possible and the words “ including ” and “ in particular ” shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any foregoing words; and	
 
 	(x)	“ indebtedness ” means indebtedness for or in respect of money borrowed or any other obligation for the payment or repayment of money.	
 
 	(xi)	In this Agreement a reference to a period of “ months ” is a reference to a period beginning in one calendar month and ending in the relevant calendar month on the day numerically corresponding to the day of the calendar month in which the period started:	
provided that:
 
 	(i)	if the period started on the last Business Day in a calendar month or if there is no numerically corresponding day, the period shall end on the last Business Day in the relevant calendar month; and	
 
 	(ii)	if the numerically corresponding day is not a Business Day the period shall end on the preceding Business Day;	
 
29

 	(iii)	(and “ month ” and “ monthly ” shall be construed accordingly).	
 
 	(iv)	In this Agreement references to the “ winding up ”, “ dissolution ”, “ examination ” or “ court protection ” of a company or corporation, or the appointment of a “ liquidator ”, “ receiver ”, “ examiner ” or “ administrator ” shall be construed so as to include any equivalent or analogous proceedings or officer under the law of the jurisdiction in which such company or corporation is incorporated or established or any jurisdiction in which such company or corporation carries on business, including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, examination, arrangement, adjustment, protection or relief of debtors.	
 
(b)	The headings in this Agreement are to be ignored in construing this Agreement.	
 
(c)	If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:	
 
 	(i)	the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or	
 
 	(ii)	the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Agreement.	
 
(d)	This Agreement may be executed in counterparts each of which will constitute one and the same document.	
 
(e)	This Agreement and the other Transaction Documents are the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft, and supersede all previous agreements in relation to that leasing.	
 
(f)	The terms of this Agreement may only be amended with the written consent of the parties hereto.	
 
(g)	The rights of Lessor under the Transaction Documents may be exercised as often as Lessor considers appropriate, are cumulative and are in addition to its rights under any law. The rights of Lessor against Lessee or in relation to the Aircraft (whether arising under this Agreement or any law) cannot be waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessor’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.	
 
30

APPENDIX 2
DESCRIPTION OF AIRCRAFT

AIRCRAFT	  		
		
MANUFACTURER:	  	Airbus S.A.S.	
		
MODEL:	  	A320-200	
		
SERIAL NUMBER:	  	3543	
		
MTOW	  	77 tons	
		
ENGINES	  		
		
MANUFACTURER:	  	IAE International Aero Engines AG	
		
ENGINE TYPE:	  	V2527E-A5	
		
SERIAL NOS:	  	V12938 and V12972	
 
31

APPENDIX 3
PART 1
LESSEE’S REPRESENTATIONS AND WARRANTIES
1     
 
(a)	Each of Lessee and the Guarantor is a sociedad anõnima promotora de inversion de capital variable duly organised and validly existing under the laws of the State of Incorporation and has the power to own its assets and carry on its business as it is being conducted and is the holder of all necessary licences required in connection therewith.	
 
(b)	Each of Lessee and the Guarantor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated thereby and all other authorisations, consents, registrations and notifications required in connection with the entry into, performance, validity and enforceability of, the Transaction Documents to which it is a party and the transactions contemplated thereby, have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect except for any authorisations, consents, registrations or notifications listed in paragraph 4 of Part 1 of Appendix 4.	
 
(c)	The Transaction Documents to which Lessee and/or the Guarantor is a party constitute each of Lessee’s and Guarantor’s legal, valid and binding obligations enforceable in accordance with the terms thereof, except as enforcement may be limited by bankruptcy, insolvency, reorganisation and other laws generally affecting the rights of creditors.	
 
(d)	The entry into, delivery and performance by each of Lessee and the Guarantor of, and the transactions contemplated by, the Transaction Documents do not and will not:	
 
 	(i)	conflict with any laws binding on Lessee or the Guarantor; or	
 
 	(ii)	conflict with the constitutional documents of Lessee or the Guarantor; or	
 
 	(iii)	conflict with or result in default under any document which is binding upon Lessee or the Guarantor or any of its assets.	
 
(e)	Each of Lessee and the Guarantor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party and neither Lessee, the Guarantor nor any of their respective assets is entitled to any right of immunity and the entry into, delivery and performance of the Transaction Documents constitute private and commercial acts.	
 
(f)	    	
 
 	(i)	The consolidated financial statements of the Guarantor and the financial statements of Lessee most recently delivered to Lessor have been prepared in accordance with Mexican GAAP or IFRS and fairly represent the financial condition of Lessee and the Guarantor as at the date to which they were drawn up; and	
 
 	(ii)	there has been no material adverse change in the financial condition of Lessee or the Guarantor since the date to which those financial statements were drawn up and the financial and other information furnished by Lessee to Lessor in	
 
32

 	connection with the Transaction Documents does not contain any untrue statement or omit to state facts, the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter to Lessor and all forecasts and opinions contained therein were made on reasonable grounds after due and reasonable enquiry by Lessee or the Guarantor.	
 
(g)	No litigation, arbitration or administrative proceedings are pending or to Lessee’s knowledge threatened against Lessee or the Guarantor which, if adversely determined, could reasonably be expected to have a material adverse effect upon the financial condition of Lessee or the Guarantor or the ability of Lessee or the Guarantor to perform its obligations under the Transaction Documents to which it is a party.	
 
(h)	The obligations of each of Lessee and the Guarantor under the Transaction Documents to which it is a party rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee and the Guarantor, with the exception of such obligations as are mandatorily preferred by law and not by virtue of any contract.	
 
(i)	No Default has occurred and is continuing or might result from the entry into or performance of the Transaction Documents and no other event has occurred and is continuing which constitutes (or with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or any combination of the foregoing, might constitute) a material default under any document which is binding on Lessee or the Guarantor or any of its assets.	
 
(j)	Save as specified in any qualification as to matters of law in any legal opinion furnished to Lessor pursuant to and in accordance with this Agreement, it is not necessary or advisable under the laws of the State of Registration, the Habitual Base or the State of Incorporation, in order to ensure the validity, effectiveness and enforceability of the Transaction Documents to which Lessee and/or the Guarantor is a party or any Security Interest expressed to be created thereunder or to, establish, perfect or protect the property rights of Lessor in the Aircraft that the Transaction Documents to which Lessee and/or Guarantor is a party or any other instrument relating thereto be filed, registered or recorded or that any other action be taken except for the filing of this Agreement and the Bill of Sale for registration with the Mexican Aeronautics Registry, or if any such filings, registrations, recordings or other actions are necessary or advisable, the same have been effected or will have been effected or will have been applied for on or before the Delivery Date and under all such laws the property rights of Lessor in the Aircraft have been fully established, perfected and protected.	
 
(k)	Neither Lessee nor the Guarantor is in default in the payment of any Taxes of a material amount which have been assessed and demanded of it other than Taxes which Lessee or the Guarantor is contesting in good faith by appropriate proceedings and in respect of which adequate reserves have been made and the non payment of which does not give rise to any material likelihood of the Aircraft being sold, arrested, detained or otherwise lost.	
 
(l)	Neither Lessee nor the Guarantor has engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents and the transactions contemplated thereby.	
 
2	The representations and warranties in Part 1 of this Appendix 3 and under any other Transaction Document will survive the execution of this Agreement and such other Transaction Document and will be deemed to be repeated by Lessee on the Delivery Date and, with respect to those representations and warranties set out in (a) to (f), (h), (i), (j) and (m) above and any representations and warranties contained in the Assignment of Insurances, on each Rent Date with reference to the facts and circumstances then existing.	
 
33

APPENDIX 3
PART 2
LESSOR’S REPRESENTATIONS AND WARRANTIES ON SIGNING
1     
 
(a)	Lessor is a company duly incorporated and validly existing under the laws of Ireland and has the power to own its assets and carry on its business as it is now being conducted.	
 
(b)	Lessor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement, the Guarantee and the transactions contemplated by thereby.	
 
(c)	This Agreement and the Guarantee constitute Lessor’s legal, valid and binding obligations enforceable against Lessor in accordance with their terms except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganisation or other similar laws affecting creditors’ rights generally or by equitable principles.	
 
(d)	The entry into and performance by Lessor of, and the transactions contemplated by, this Agreement and the Guarantee do not and will not:	
 
 	(i)	conflict with any laws binding on Lessor; or	
 
 	(ii)	conflict with the constitutional documents of Lessor; or	
 
 	(iii)	conflict with or result in a default under any document which is binding upon Lessor or any of its assets.	
 
(e)	So far as concerns the obligations of Lessor, all authorisations, consents, registrations and notifications required under the laws of Ireland in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, this Agreement and the Guarantee have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect.	
 
(f)	Lessor is subject to civil and commercial law with respect to its obligations under this Agreement and the Guarantee, and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement and the Guarantee by Lessor constitute private and commercial acts.	
 
(g)	Lessor has not engaged the services of a broker or similar representative or agent for the purposes of this Agreement, the Guarantee, or the transactions contemplated thereby.	
 
(h)	Lessor is a resident of Ireland for tax purposes.	
 
34

APPENDIX 3
PART 3
LESSOR’S REPRESENTATIONS AND WARRANTIES ON DELIVERY AND EACH
RENT DATE
1
 
(a)	Lessor is a company duly incorporated and validly existing under the laws of Ireland and has the power to own its assets and carry on its business as it is now being conducted.	
 
(b)	Lessor has the power to enter into and perform, and has taken all necessary corporate action to authorise the entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by thereby.	
 
(c)	The Transaction Documents to which Lessor is a party constitute Lessor’s legal, valid and binding obligations enforceable against Lessor in accordance with their terms except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganisation or other similar laws affecting creditors’ rights generally or by equitable principles.	
 
(d)	The entry into and performance by Lessor of, and the transactions contemplated by, the Transaction Documents to which it is a party do not and will not:	
 
 	(i)	conflict with any laws binding on Lessor; or	
 
 	(ii)	conflict with the constitutional documents of Lessor; or	
 
 	(iii)	conflict with or result in a default under any document which is binding upon Lessor or any of its assets.	
 
(e)	So far as concerns the obligations of Lessor, all authorisations, consents, registrations and notifications required under the laws of Ireland in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Transaction Documents have been (or will on or before the Delivery Date have been) obtained or effected (as appropriate) and are (or will on their being obtained or effected be) in full force and effect.	
 
(f)	Lessor is subject to civil and commercial law with respect to its obligations under the Transaction Documents to which it is a party, and neither Lessor nor any of its assets is entitled to any right of immunity and the entry into and performance of the Transaction Documents to which it is a party by Lessor constitute private and commercial acts.	
 
(g)	Lessor has not engaged the services of a broker or similar representative or agent for the purposes of the Transaction Documents or the transactions contemplated thereby.	
 
(h)	Lessor is a resident of Ireland for tax purposes.	
 
2	The representations and warranties of Lessor in this Part 3 of Appendix 3 will survive the execution of this Agreement and will be deemed to be repeated at Delivery and (other than the representation and warranty at (h) above) on each Rent Date.	
 
35

APPENDIX 4
PART 1
LESSOR CONDITIONS PRECEDENT
1
 
1.1	Receipt by Lessor from Lessee not less than two (2) Business Days prior to Delivery Date of the following satisfactory in form and substance to Lessor (acting reasonably):	
 
(a)	a corporate certificate of each of Lessee and the Guarantor signed by an authorised officer of the Lessee or the Guarantor (as applicable) to which is attached complete and up to date copies of:	
 
 	(i)	the constitutional documents (estatutos sociales) of Lessee or the Guarantor (as applicable);	
 
 	(ii)	a resolution of the board of directors of Lessee or the Guarantor (as applicable) approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party, resolving that Lessee or the Guarantor (as applicable) enter into the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessee or the Guarantor (as applicable) is a party;	
 
 	(iii)	any power of attorney of Lessee or the Guarantor (as applicable) approved at the meeting of the directors referred to at (ii) above; and	
 
 	(iv)	an incumbency certificate setting out the names and signatures of the persons specified by Lessee or the Guarantor (as applicable) in (ii) above.	
 
(b)	evidence that an opinion in such form as may be approved by Lessor and the Security Trustee and addressed to Lessor, the Security Trustee and the Lease Manager will be issued on the Delivery Date by:	
 
 	(i)	Lessee’s and Guarantor’s in house legal counsel in the State of Incorporation;	
 
 	(ii)	Ritch Mueller, Lessor’s and the Security Trustee’s legal counsel in the State of Registration; and	
 
 	(iii)	Lessor’s insurance advisers in relation to the Insurances (such opinion to be obtained by Lessor at Lessor’s cost);	
 
(c)	evidence of the issue of each approval, licence and consent which may be required in relation to, or in connection with, the performance by each of Lessee and the Guarantor of any of its obligations under the Transaction Documents (including, without limitation, the remittance by Lessee or the Guarantor (as applicable) to Lessor in US Dollars of all amounts payable under the Transaction Documents);	
 
(d)	copies of Lessee’s concession title, air operator’s certificate and all other licences, certificates and permits required by Lessee or the Guarantor in relation to, or in connection with, the Transaction Documents to which it is a party and the leasing and/or operation (as the case may be) of the Aircraft;	
 
(e)	the latest available consolidated financial statements of the Guarantor and the latest available financial statements of Lessee;	
 
36

(f)	two letters, in the form of Part 1 of Exhibit C and Part 2 of Exhibit C, from Lessee addressed to SENEAM and each other relevant air traffic control authority pursuant to which Lessee authorises the addressee to issue to Lessor, the Lease Manager and the Security Trustee, upon Lessor’s, the Lease Manager’s or the Security Trustee’s request (i) from time to time (subject always to Clause 7.5) in the case of the letter set out in Part 1 of Exhibit C and (ii) upon the occurrence of an Event of Default which is continuing in the case of the letter set out in Part 2 of Exhibit C, a statement of account of all sums due by Lessee to the authority in respect of all aircraft (including, without limitation, the Aircraft) operated by Lessee;	
 
(g)	the IDERA and the Deregistration Power of Attorney;	
 
(h)	the Process Agent Power of Attorney (Lessor) and the Process Agent Power of Attorney (Guarantor) and any other special power of attorney which Lessee or the Guarantor is required to execute and deliver pursuant to the terms of any other Transaction Document;	
 
(i)	all such documentation and information from Lessee and the Guarantor as requested by Lessor in respect of “Know Your Customer” checks, anti-money laundering checks and other similar requirements; and	
 
(j)	a letter from the process agent appointed by Lessee and Guarantor under each Transaction Document to accept service of process, accepting that appointment.	
 
1.2	Receipt by Lessor from Lessee on or prior to the Delivery Date (or in the case of the Deposit, the balance of the Cash Deposit at least five (5) days prior to the Delivery Date) of the following satisfactory in form and substance to Lessor:	
 
(a)	the Transaction Documents to which Lessee or the Guarantor is a party duly executed by Lessee or the Guarantor and the other parties thereto (other than Lessor), it being acknowledged by each of Lessee and Lessor that Lessor will use all reasonable endeavours, subject to satisfaction of the conditions precedent contained in the Loan Agreement to arrange for the Security Trustee to execute the Transaction Documents to which the Security Trustee is a party;	
 
(b)	a signed copy of each opinion referred to it at 1.1(b) above;	
 
(c)	all sums due to Lessor under the Transaction Documents on or before the Delivery Date including, without limitation, the Deposit and the first payment of Rent;	
 
(d)	certificates of insurance and reinsurance and an undertaking from Lessee’s insurance and reinsurance brokers evidencing compliance with the provisions of this Agreement as to Insurances and Reinsurances;	
 
(e)	the Certificate of Airworthiness for Export for the Aircraft issued by the Irish Aviation Authority, the temporary Certificate of Airworthiness for the Aircraft issued by the Air Authority and the temporary registration marks for the Aircraft issued by the Air Authority (to the extent available); and	
 
(f)	such other documents as Lessor may reasonably request.	
 
1.3	The representations and warranties of Lessee under Part 1 of Appendix 3 of this Agreement and the representations and warranties of the Guarantor in any Transaction Document to which it is a party are correct and would be correct if repeated at Delivery.	
 
1.4	Receipt by Lessor of written confirmation from the Security Trustee that the Transaction Documents to which Lessee and/or the Guarantor is a party are in form and substance satisfactory to the Lenders and accordingly the Aircraft will continue to be financed by such Lenders on terms and conditions satisfactory to Lessor and such confirmation being in full force and effect on the Delivery Date.	
 
37

1.5	Lessor having reviewed the Agreed Maintenance Programme under which it is proposed the Aircraft will be maintained. For the purposes of such review, Lessee shall prior to the Delivery Date provide Lessor with all necessary information and documents as Lessor may reasonably require with respect to the Agreed Maintenance Programme.	
 
2	The conditions specified in this Part 1 of Appendix 4 are for the benefit of Lessor and may be waived or deferred in whole or in part and with or without conditions by Lessor.	
 
3	If any original document or certified copy of any document specified in Part 1 of this Appendix 4 is provided to Lessor by facsimile copy or pdf copy on or prior to Delivery, Lessee shall provide the original of each such document to Lessor as soon as reasonably possible after Delivery but in any event no later than ten (10) Business Days after Delivery.	
 
4	As soon as reasonably practicable after Delivery, but in any event not later than the relevant day specified in column two below, Lessee shall provide the following to Lessor:	

 	  	Conditions Subsequent	  	Time Period	
				
	  	(a)	  	A search certificate from the International Registry showing compliance by Lessee with the provisions at paragraph 4.4(b) of Appendix 6	  	Ten (10) Business Days	
				
	  	(b)	  	Evidence that filing of this Agreement and the Bill of Sale and the Aircraft has been made on the Delivery Date with the Mexican Aeronautics Registry under the laws of the State of Registration	  	On closing	
				
	  	(c)	  	Evidence that all other filings, registrations, recordings and other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of the Transaction Documents, the Mortgage and the Assignment and any Security Interest expressed to be created thereunder and to protect the property rights of Lessor, and the Security Interests of the Security Trustee and the Lenders in the Aircraft or any Part.	  	Ten (10) Business Days	
				
	  	(d)	  	Certificate of Import stamped by relevant Government Entity in Mexico evidencing that any required import licence, and all customs formalities, relating to the import of the Aircraft into the State of Registration will be complied with and that the import of the Aircraft into the State of Registration is exempt from Taxes	  	Ten (10) Business Days	
				
	  	(e)	  	Certificate of registral status (certificado de estado registral) issued by the Mexican Aeronautics Registry, evidencing registration of the items provided in (b) and (c) above.	  	Thirty (30) days	
				
	  	(f)	  	Permanent Certificate of Airworthiness issued by the Air Authority	  	Ten (10) Business Days	
 
38

							
 	  	Conditions Subsequent	  	Time Period	
				
	  	(g)	 	Permanent Certificate of Registration issued by the Air Authority	  	One hundred and fifty (150) days	
				
	  	(h)	 	Inclusion of the Aircraft in Lessee’s Air Operator’s Certificate	  	Fifteen (15) days	
				
	  	(i)	 	Bringdown opinion of Ritch Mueller, Lessor’s and the Security Trustee’s legal counsel in the State of Registration, concerning relevant filings at the DGAC and International Registry	  	Ten (10) Business Days	
 
39

APPENDIX 4
PART 2
LESSEE CONDITIONS PRECEDENT
1
 
1.1	Receipt by Lessee from Lessor not less than two (2) Business Days prior to the Delivery Date of the following satisfactory in form and substance to Lessee:	
 
(a)	a copy of the constitutional documents of Lessor certified by an officer of Lessor to be true, complete and up to date;	
 
(b)	a copy of a resolution of the board of directors of Lessor approving the terms of, and the transactions contemplated by, the Transaction Documents to which Lessor is a party, resolving that Lessor enter into the Transaction Documents to which Lessor is a party and authorising a specified person or persons to execute the Transaction Documents to which Lessor is a party.	
 
1.2	Receipt by Lessee from Lessor on or prior to the Delivery Date of:	
 
(a)	the Transaction Documents to which Lessor is a party (other than this Agreement) executed by Lessor;	
 
(b)	the Quiet Enjoyment Letter; and	
 
(c)	evidence that an opinion in such form as may be approved by Lessee (acting reasonably) and addressed to Lessee will be issued on the Delivery Date by McCann FitzGerald, Lessor’s counsel in Ireland, as to the due execution and enforceability of this Agreement.	
 
1.3	The representations and warranties of Lessor in Part 2 of Appendix 3 of this Agreement are correct and would be correct if repeated at Delivery.	
 
1.4	Following completion of the Pre-Delivery Procedure, Lessee shall have ascertained that the Aircraft meets the Delivery Condition.	
 
2	The conditions precedent in this Part 2 of Appendix 4 are for the benefit of Lessee and may be waived or deferred in whole or in part and with or without conditions by Lessee.	
 
40

APPENDIX 5
PART 1
ADDITIONAL PAYMENT PROVISIONS
 
1	Payments	
All payments by Lessee to Lessor under the Transaction Documents will be made for value on the due dates in Dollars and in same day funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of international payments in Dollars by telegraphic transfer to such account as Lessor may advise Lessee in writing from time to time but no later than two (2) Business Days prior to the date on which any payment is due by Lessee under any Transaction Document.
 
2	Letter of Credit Requirements	
 
(a)	Each Letter of Credit shall:	
 
 	(i)	be irrevocable and issued and payable by a bank acceptable to Lessor and the Security Trustee and in form and substance acceptable to Lessor and the Security Trustee and, if Lessor requests (acting reasonably), confirmed by the London or New York branch of a major international bank acceptable to Lessor and the Security Trustee (each acting reasonably) as security for all payment obligations of Lessee to Lessor under the Transaction Documents (including damages);	
 
 	(ii)	remain in full force and effect and available for drawing by Lessor upon first demand at any time or number of times until the earlier of: (A) sixty (60) days after the Scheduled Expiry Date; and (B) the date on which Lessee has redelivered the Aircraft to Lessor pursuant to and in accordance with this Agreement and complied with all of its obligations under the Transaction Documents (the “ Required LC Expiry Date ”);	
 
(b)	With the prior written consent of Lessor and the Security Trustee (such consent not to be unreasonably withheld or delayed), any Letter of Credit may have a validity period or periods ending prior to the Required LC Expiry Date, provided that (i) such Letter of Credit shall, in each case, be renewed and delivered to Lessor not later than ten (10) Business Days prior to its expiry; and (ii) such Letter of Credit shall remain in force at all times up to and including the Required LC Expiry Date.	
 
(c)	If at any time during the Term, Lessor determines that the current issuing or confirming bank of the Letter of Credit is no longer an acceptable issuing or confirming bank (whether by virtue of a material adverse change in its financial condition or for any other reason) Lessee shall promptly procure that, such Letter of Credit is replaced either by a Letter of Credit issued by another bank acceptable to Lessor and the Security Trustee (each acting reasonably) and (if deemed appropriate by Lessor or the Security Trustee) confirmed by another bank acceptable to Lessor and Security Trustee or by an amount in cash equal to the Deposit (assuming no accrued interest) upon the terms and subject to the conditions of Clause 5 of this Agreement.	
 
3	Value Added Tax	
Lessee will pay to Lessor or the applicable Tax authority the amount of any value added tax, any sales or turnover tax, imposition or levy of a like nature (together “ VAT ”) chargeable in respect of any supply for VAT purposes under any Transaction Document
 
41

and each amount stated as payable by Lessee under any Transaction Document is exclusive of VAT (if any) and is accordingly to be construed as a reference to that amount plus any VAT in respect of it.
 
4	Currency and Currency Indemnity:	
 
(a)	If Lessor receives an amount in respect of Lessee’s liability under any Transaction Document or if such liability is converted into a claim, proof, judgment or order in a currency other than the currency (the “ contractual currency ”) in which the amount is expressed to be payable under any Transaction Document:	
 
 	(i)	Lessee will indemnify Lessor as an independent obligation against any loss arising out of or as a result of such conversion;	
 
 	(ii)	if the amount received by Lessor, when converted into the contractual currency (at the market rate at which Lessor is able on the relevant date to purchase the contractual currency in London or at its option New York with that other currency) is less than the amount owed in the contractual currency, Lessee will, forthwith on demand, pay to Lessor an amount in the contractual currency equal to the deficit; and	
 
 	(iii)	Lessee will pay to Lessor on demand any exchange costs and Taxes actually incurred by Lessor in connection with the conversion.	
 
(b)	Lessee waives any right it may have in any jurisdiction to pay any amount under any Transaction Document in a currency other than that in which it is expressed to be payable.	
 
5	Certificates	
Save where expressly provided otherwise in the Transaction Documents, any certificate or determination made in accordance with the relevant provisions (if any) of the Transaction Documents by Lessor as to any rate of interest or as to any other amount payable under the Transaction Documents will, in the absence of manifest error, be conclusive and binding on Lessee.
 
6	Information	
 
(a)	If Lessee is required by any applicable law, or by any third party, to deliver any report or return in connection with any Taxes relating to the Aircraft or the Transaction Documents, Lessee will complete the same within any applicable time period and in a manner satisfactory to Lessor and, if relevant, will state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom, and Lessee will, on request supply a copy of the report or return to Lessor; and	
 
(b)	Lessee will, on request but not more frequently than once annually unless a Default has occurred and is continuing, furnish to Lessor evidence satisfactory to Lessor, with respect to the Aircraft, that all Taxes and charges incurred by Lessee including without limitation all withholdings and payments due to SENEAM or any other relevant air traffic control or airport authorities, have been paid and discharged in accordance with the terms governing payment of such amounts.	
 
42

APPENDIX 5
PART 2
PAYMENT OF MAINTENANCE RESERVES
 
1	Amount	
 
1.1	Lessee shall pay the following amounts (“ Maintenance Reserves ”) to Lessor (or to its order) by reference to each calendar month or part thereof following the Delivery Date during the Term on the tenth (10th) day following the end of that calendar month:	
 
(a)	in respect of the Airframe:	
 
 	(i)	***** per calendar month or part thereof (the “ Airframe 6 Year Maintenance Reserves ”); and	
 
 	(ii)	***** per calendar month or part thereof (the “ Airframe 12 Year Maintenance Reserves ”);	
 
(b)	in respect of each Engine, ***** (or part thereof) operated by that Engine during any calendar month (“ Engine Maintenance Reserves ”);	
 
(c)	in respect of the Engine LLPs within each Engine, ***** accomplished by that Engine during that calendar month (together “ Engine LLP Maintenance Reserves ”). The Engine LLP Maintenance Reserves are an aggregate amount of all Engine LLP’s, assume a ***** stub life and will be divided and held in sub accounts for each Engine LLP as per the Attachment 1 to Part 2 of this Appendix 5.	
 
(d)	in respect of the APU, ***** for each APU Hour (or part thereof) accomplished by the APU during that calendar month (“ APU Maintenance Reserves ”); and	
 
(e)	in respect of the Landing Gear, ***** per calendar month or part thereof (“ Landing Gear Maintenance Reserves ”).	
 
2	Adjustment	
 
2.1	The amount of the Maintenance Reserves in paragraph 1 are specified in January 2011 Dollars and will be adjusted by the Lessor on 1 January of each year (or in the case of the Engine LLP Maintenance Reserves at such later date as the Engine Manufacturer releases its annual Engine LLP prices, should the new annual prices not be available on 1 January of the relevant year) after the date of this Agreement as follows:	
 
(a)	the amount of the Maintenance Reserves (other than the Engine LLP Maintenance Reserves) shall be increased for inflation by a fixed amount of *****. The Engine LLP Maintenance Reserves shall be subject to increases in the relevant manufacturer’s catalogue price;	
 
(b)	if there is any variation, based upon the information provided in the monthly status reports (supported, if requested by Lessor, by the flight logbook entries or aircraft systems readout) delivered pursuant to paragraph 2.2(c) of Appendix 6 for the preceding month from (i) the assumed Flight Hour to Cycle ratio of ***** (the “ Assumed Ratio ”) or (ii) the assumed engine derate of ***** (the “ Assumed Derate ”), the amount of the Engine Maintenance Reserves payable shall be adjusted in accordance with the applicable table set out in attachment 2 to part 2 of this Appendix 5.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
43

(c)	if Lessee does not issue a monthly status report pursuant to paragraph 2.2(c) of Appendix 6, Lessor will assume a zero derate and Flight Hour to Flight Cycle ratio of 1:1.	
 
2.2	The amount of the Maintenance Reserves in paragraph 1 may be adjusted at any time by an amount determined by Lessor, if (i) any major change is made to the Approved Maintenance Programme or the operating procedures relating to the Aircraft; (ii) there is, in the reasonable opinion of Lessor, any material change in the operating environment of Lessee in which the Aircraft is operated; or (iii) if the certified thrust of the Engines (judged at Delivery) is increased through modification, upgrades or otherwise.	
 
3	Starting Balances	
 
3.1	As at Delivery, the balance of accrued maintenance reserve payments attributable to the Eligible Maintenance Events set out below is as follows:	

Account	 	Amount	
6 Year Check	 	*****
 
“ 6 Year Check Initial Balance ”.	
		
APU Performance Restoration	 	*****
 
“ APU Initial Balance ”.	
 
3.2	The amount calculated by Lessor to be the sum of the 6 Year Check Initial Balance and the accumulated balance of Airframe 6 Year Maintenance Reserves held by the Lessor at any given time shall be referred to as the “ 6 Year Check Available Balance ”.	
 
3.3	The amount calculated by Lessor to be the sum of the APU Initial Balance and the accumulated balance of APU Maintenance Reserves held by the Lessor at any given time shall be referred to as the “ APU Available Balance ”.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
44

Attachment 1
Engine LLP Maintenance Reserves Sub Accounts

Item	  	P/N	  	Rate per FC in USD	
Stage 1 (fan) disk	  	*****	  	*****	
			
Stub shaft (LPC)	  	*****	  	*****	
			
Stage 1.5 to 2.5 disk (LPC)	  	*****	  	*****	
			
Stage 3 to 8 disk (HPC)	  	*****	  	*****	
			
Stage 9 to 12 disk (HPC)	  	*****	  	*****	
			
Rear Shaft (HPC)	  	*****	  	*****	
			
Rear rotating seal (HPC)	  	*****	  	*****	
			
Stage 1 HPT disk	  	*****	  	*****	
			
Stage 1 HPT inner seal	  	*****	  	*****	
			
Stage 1 HPT outer seal	  	*****	  	*****	
			
Stage 2 HPT seal	  	*****	  	*****	
			
Stage 2 HPT disk	  	*****	  	*****	
			
Stage 2 HPT plate	  	*****	  	*****	
			
Stage 3 LPT disk	  	*****	  	*****	
			
Stage 4 LPT disk	  	*****	  	*****	
			
Stage 5 LPT disk	  	*****	  	*****	
			
Stage 6 LPT disk	  	*****	  	*****	
			
Stage 7 LPT disk	  	*****	  	*****	
			
Stage 3 LPT seal	  	*****	  	*****	
			
Stage 4 LPT seal	  	*****	  	*****	
			
Stage 5 LPT seal	  	*****	  	*****	
			
Stage 6 LPT inner seal	  	*****	  	*****	
			
Stage 6 LPT seal	  	*****	  	*****	
			
Stage 7 LPT seal	  	*****	  	*****	
			
LPT shaft	  	*****	  	*****	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
45

Attachment 2
Engine Maintenance Reserve Adjustment for changes to Assumed Ratio

Actual Flight Hour to Cycle ratio	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
							
First Engine Maintenance Reserve	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
Engine Derate Adjustment Table

Engine Derate %	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
												
Adjustment Factors	  	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	 	 	*	**** 	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
46

APPENDIX 5
PART 3
REFUND OF MAINTENANCE RESERVES
 
1	Eligible Maintenance Events	
 
1.1	Lessor shall have no obligation to distribute the Maintenance Reserves (or the 6 Year Check Initial Balance and/or the APU Initial Balance, as the case may be) accumulated pursuant to Part 2 of this Appendix 5 other than in respect of the following events (each an “ Eligible Maintenance Event ”), in each case, if approved in advance by Lessor as specified in paragraph 1.2 below:	
 
(a)	with respect to the 6 Year Check Available Balance, upon the accomplishment of the first 6 Year Check relating to the Airframe in accordance with the MPD (it being agreed that the 6 Year Check Initial Balance shall only be made available to Lessee if the Airframe 6 Year Maintenance Reserves have been utilised in full first with respect to the first 6 Year Check);	
 
(b)	with respect to the Landing Gear Maintenance Reserves, upon the accomplishment of any Landing Gear Overhaul in accordance with the MPD;	
 
(c)	with respect to the Engine Maintenance Reserves, upon the accomplishment of the Engine Performance Restoration on the relevant Engine;	
 
(d)	with respect to the Engine LLP Maintenance Reserves for an Engine LLP, upon the replacement of that Engine LLP in accordance with the Engine Manufacturer limits; and	
 
(e)	with respect to the APU Available Balance, upon accomplishment of APU Performance Restoration (it being agreed that APU Initial Balance shall only be made available to Lessee if the APU Maintenance Reserves have been utilised in full first with respect to an APU Performance Restoration).	
 
1.2	Lessee shall have obtained written approval from Lessor (which shall not be unreasonably withheld or delayed) in respect of the workscope for the relevant Eligible Maintenance Event prior to the commencement of the relevant Eligible Maintenance Event.	
 
1.3	Subject to paragraph 2.5, any remaining balance of the Maintenance Reserves on the expiry of the Term (unless the Term has terminated as a result of a Total Loss of the Aircraft and Lessor has received the Agreed Value) shall be retained by Lessor as its sole property.	
 
2	Release of Maintenance Reserves	
 
2.1	    	
 
(a)	Lessee will provide Lessor with:	
 
 	(i)	an invoice signed by Lessee in an amount equal to the relevant Maintenance Reserves to be refunded to Lessee; and	
 
 	(ii)	written confirmation from the Agreed Maintenance Performer within sixty (60) days after the completion of the relevant Eligible Maintenance Event that such Eligible Maintenance Event has been completed and paid for in full, accompanied by such other supporting documentation and invoices evidencing the performance	
 
47

 	of the relevant work and receipt of payment in relation to the same (including but not limited to, invoices evidencing the cost of replacement of any Engine LLPs), as Lessor may reasonably request in writing within fifteen (15) Business Days following receipt of an invoice from Lessee pursuant to paragraph (i) above, provided, however, that in the case of the performance of any Engine Performance Restoration, the supporting documentation to be provided to Lessor hereunder shall be limited to a duly completed FAA Form 337 and last shop visit report attached to the relevant invoice (a “ Confirmation ”).	
 
(b)	Other than as specifically provided in paragraph 2.3, the amount payable by Lessor to Lessee (and Lessee’s entitlement to claim the same from Lessor) with respect to any Eligible Maintenance Event shall not exceed the then current balance of Maintenance Reserves (or in the case of an Airframe 6 Year Check and a APU Performance Restoration, the 6 Year Check Available Balance and the APU Available Balance respectively) held by Lessor for the account of such Eligible Maintenance Event.	
 
2.2	Provided that no Default has occurred and is continuing, Lessor shall promptly (and in any event within fifteen (15) Business Days) following the receipt of a Confirmation make payment (such payment date, the “ Reserve Payment Date ”) in accordance with paragraph 2.3 below to Lessee, or upon receipt of written instructions from Lessee, to the Agreed Maintenance Performer accomplishing the Eligible Maintenance Event.	
2.3
 
(a)	If during the Term:	
 
 	(i)	the Airframe undergoes a 6 Year Check, Lessor will on the relevant Reserve Payment Date pay the full amount, if any, of the Airframe 6 Year Check Maintenance Reserves held by Lessor as at the time of the completion of the 6 Year Check, provided that, Lessee is entitled to claim the full amount of the Airframe 6 Year Check Maintenance Reserves at such time;	
 
 	(ii)	an Engine undergoes its first Engine Performance Restoration and the actual cost thereof exceeds the then current balance of Engine Maintenance Reserves for that Engine (and provided that Lessee would be entitled to claim the full amount of such cost from such Engine Maintenance Reserves, but for such shortfall), Lessor shall contribute towards such shortfall provided, however, that Lessor’s liability under this paragraph 2.3(a)(ii) shall not exceed *****;	
 
 	(iii)	the APU undergoes an APU Performance Restoration, Lessor will on the relevant Reserve Payment Date pay the full amount of the APU Maintenance Reserves held by Lessor as at the time of completion of the APU Performance Restoration, provided that, Lessee is entitled to claim the full amount of the APU Performance Restoration Reserves at such time; and	
 
 	(iv)	an Engine LLP is replaced pursuant to and in accordance with this Agreement, Lessor will on the relevant Reserve Payment Date pay the lesser of the amount of the Engine LLP Maintenance Reserves held by Lessor for that Engine LLP at the date of its replacement and the amount specified in the Engine Manufacturer’s catalogue price list for that Engine LLP at such time and should there be a shortfall between the Engine LLP Maintenance Reserves held by Lessor for that Engine LLP and the amount specified in the Manufacturer’s catalogue price list, in each case at the relevant time (and provided that Lessee would be entitled to claim the full amount such cost from the applicable Engine LLP Maintenance Reserves, but for such shortfall), Lessor shall contribute towards the shortfall provided, however, that Lessor’s aggregate liability for all Engine LLPs under this paragraph 2.3 (a)(iv) shall not exceed *****,	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
48

provided always that in no event shall payment be made in respect of:
 
 	(A)	components unless they are scheduled to be overhauled at that check and their lives are fully restored (and if this is not the case, a pro-rating payment adjustment will be made in respect of overhauls or replacements that are made before the relevant component scheduled life limit);	
 
 	(B)	any maintenance resulting from design faults or damage covered by warranty or caused by accidental damage, (subject as provided below) foreign objects, faulty maintenance, abnormal wear and tear, operational mishandling or line related quick engine change (QEC) kit maintenance (unless such maintenance is carried out at a different facility to the relevant Airframe check) or LRU component maintenance;	
 
 	(C)	any cost items which are the costs of removal, reinstallation, transportation or are exchange or similar costs or charges;	
 
 	(D)	any cost which is in excess of the relevant manufacturer’s list price for the relevant parts or maintenance work (other than handling charges); or	
 
 	(E)	any maintenance, overhaul, renewal, replacement or repair which is reimbursable out of any insurance claim,	
(collectively, “ Excluded Maintenance Events ”). If any Engine suffers any foreign objects damage and as a result an Engine Performance Restoration is required to be carried out on that Engine, then Lessee shall provide Lessor with full details of the foreign object damage and if Lessor (acting reasonably) agrees that the performance of an Engine Performance Restoration on the Engine is advisable and will not impact adversely on the Engine or the future marketability of the Aircraft, then any such Engine Performance Restoration shall not be an Excluded Maintenance Event.
 
(b)	For the avoidance of doubt, any remaining 6 year Check Initial Balance and APU Initial Balance will not be taken into account when calculating the amounts payable by Lessor pursuant to paragraphs (a)(i) and (a)(iii) above.	
 
(c)	If the documentation in paragraphs 2.1(a) and (b) above, as applicable, relating to the completion of an Eligible Maintenance Event has been received by Lessor on or before the expiry of the Term and Lessor requests other supporting documentation evidencing the performance of the relevant work or Lessee has notified Lessor prior to the expiry of the Term that an Eligible Maintenance Event has been completed and has not yet provided such documentation to Lessor, Lessee shall be entitled to receive payment in respect of such Eligible Maintenance Event at any time after the expiry of the Term.	
 
2.4	If during the Term	
 
(a)	the Aircraft suffers Total Loss and the Agreed Value is paid to Lessor, Lessor will pay an amount equal to the balance of Maintenance Reserves then held by Lessor to Lessee;	
 
(b)	an Engine suffers Engine Loss and is replaced by a Suitable Replacement Engine, title to which Lessor obtains in accordance with paragraph 3.3 of Appendix 6, Lessor shall pay to Lessee and amount equal to the balance of Engine Maintenance Reserves for such Engine, provided that the Suitable Replacement Engine is fresh out of Engine Performance Restoration shop visit when it is installed on the Airframe. If such Suitable Replacement Engine is not fresh out of Engine Performance Restoration when it is installed on the Airframe Lessor shall pay the Lessee an amount calculated as follows	
 
49

*****
Where
*****.
 
(c)	For the avoidance of doubt, any remaining 6 Year Check Initial Balance and APU Initial Balance will not be taken into account when calculating the amounts payable by Lessor pursuant to paragraphs (a) and (b) above.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
50

APPENDIX 6
LESSEE’S COVENANTS
 
1	GENERAL COVENANTS	
 
1.1	Information	
Lessee will:
 
(a)	notify Lessor forthwith of the occurrence of any Event of Default under this Agreement and, upon the written request of Lessor, confirm to it that, save as specified in such confirmation or as previously notified no such Event of Default has occurred and is continuing hereunder; and	
 
(b)	furnish to Lessor:	
 
 	(i)	as soon as possible, but in any event not later than ninety (90) days after the last day of each financial quarter, the consolidated financial statements for the Guarantor and the financial statements for Lessee prepared by management for the financial quarter ending on such day;	
 
 	(ii)	as soon as available but not in any event later than one hundred and twenty (120) days after the last day of each financial year of Lessee, the audited consolidated balance sheet of the Guarantor as of such day and the audited balance sheet of Lessee as of such day and the audited consolidated profit and loss statement of the Guarantor and the audited profit and loss statement of Lessee, in each case, for the year ending on such day (in Spanish with an English language copy to be provided within forty five (45) days thereafter),	
unless in the case of (i) and (ii) above the same are available free of charge on Lessee’s or the Guarantor’s website notified in writing by Lessee to Lessor and provided further that if there is a successful public offering of the Guarantor’s shares, then Lessee shall only provide the information at (i) above upon receipt of a request to do so from Lessor;
 
 	(iii)	at the same time as it is issued to the creditors generally of Lessee or the Guarantor, a copy of each notice or circular issued to Lessee’s or the Guarantor’s creditors generally; and	
 
 	(iv)	on request from time to time such other information regarding Lessee and/or the Guarantor as Lessor may reasonably request.	
 
1.2	General	
Lessee will:
 
(a)	not make any substantial change in the nature of the business (it being agreed that an extension of Lessee’s route network is not a change in the nature of its business for this purpose) in which it is engaged, will preserve its existence (other than in connection with a solvent reconstruction the terms of which have been approved by Lessor, such approval not to be unreasonably withheld), and will conduct its business in accordance with all applicable laws;	
 
(b)	ensure that no change will occur in the Habitual Base or the State of Registration of the Aircraft without the prior written consent of Lessor;	
 
51

(c)	procure that no person lawfully claiming by or through Lessee or which is an Affiliate or Subsidiary of Lessee or in respect of whom Lessee may exercise control whether as a matter of law or contract or otherwise, will act in any manner inconsistent with its obligations under this Agreement and that all persons will comply with those obligations as if references to “Lessee” included a separate reference to those persons;	
 
(d)	ensure that its obligations under the Transaction Documents rank and will at all times rank at least pari passu with all its other present and future unsecured indebtedness (save for obligations which are mandatorily preferred by operation of law and not by contract);	
 
(e)	Lessee agrees from time to time to do and perform such other and further acts and execute and deliver any and such other instruments as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor under, and to carry out and effect the intent and purposes of, the Transaction Documents; and	
 
(f)	if, during the Term, Lessee’s insurer agrees to provide an assignment of reinsurances to the lessor or financier of any other aircraft operated by Lessee, promptly notify Lessor in writing of such circumstances and shall use commercially reasonable efforts to procure that such insurer provides an assignment of reinsurances on no less favourable terms to Lessor or Security Trustee.	
 
1.3	Authorisations	
Lessee shall:
 
(a)	obtain and maintain in full force and effect all authorisations for the time being required by the laws or regulations of the State of Registration and any other relevant jurisdiction to enable Lessee to perform its obligations under the Transaction Documents; and	
 
(b)	obtain and promptly renew from time to time, and will promptly, upon written request, deliver to Lessor copies of all and any authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation as may be necessary or in Lessor’s opinion (acting reasonably) desirable to ensure the validity, enforceability or priority of Lessee’s and the Guarantor’s liabilities and obligations, and (to the extent within Lessee’s power and control) Lessor’s and the Security Trustee’s rights, under the Transaction Documents.	
 
2	OPERATIONAL COVENANTS	
 
2.1	Lawful and Safe Operation	
Lessee will:
 
(a)	not use the Aircraft or permit the Aircraft to be used:	
 
 	(i)	in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Air Authority or any applicable law; or	
 
 	(ii)	for any purpose for which the Aircraft is not designed or reasonably suitable; or	
 
 	(iii)	in a manner not covered by Insurances required under this Agreement (except for Emergency Operations);	
 
(b)	ensure that the crew, mechanics and engineers employed in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licences and/or approvals required by the Air Authority and applicable law;	
 
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(c)	procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorised by the Air Authority and applicable law;	
 
(d)	not use the Aircraft nor permit the Aircraft to be used for the carriage of:	
 
 	(i)	whole animals living or dead except in the cargo compartments according to the International Air Transport Association regulations, and except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal; or	
 
 	(ii)	acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assemblies or components, except as permitted for passenger aircraft under the “Restriction of Goods” schedule issued by International Air Transport Association from time to time and provided that all the requirements for packaging or otherwise contained therein are fulfilled; or	
 
 	(iii)	any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or	
 
 	(iv)	any illegal item or substance;	
 
(e)	not utilise the Aircraft nor permit the Aircraft to be utilised for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee;	
 
(f)	except for Emergency Operations, not cause or permit the Aircraft to proceed to, or remain at, any location in a Prohibited Jurisdiction or which is for the time being the subject of a prohibition order (or any similar order or directive) by:	
 
 	(i)	any Government Entity of the State of Registration and/or the Habitual Base; or	
 
 	(ii)	any Government Entity of the country in which such location is situated; or	
 
 	(iii)	any Government Entity having jurisdiction over Lessee, Lessor, the Security Trustee, the Lenders or the Aircraft	
and which order or directive prohibits or restricts or could reasonably be interpreted to prohibit or restrict the export (taking into account any exemption which would be available and any operations to the extent that they are not absolutely prohibited or restricted) of the Aircraft to, and/or the use or operation of the Aircraft on flights to, and/or from such jurisdiction;
 
(g)	obtain and maintain in full force all authorisations required for the use and operation of the Aircraft for the time being, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Transaction Documents.	
 
2.2	Information	
Lessee will:
 
(a)	subject to paragraph (c) below, keep Lessor informed as to current serial numbers of the Engines, the current serial number of the APU, any engine or auxiliary power unit installed on the Aircraft and the location of any Engine or the APU removed from the Aircraft and the reasons for it being removed;	
 
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(b)	subject to paragraph (c) below, promptly furnish to Lessor all information Lessor from time to time reasonably requests regarding the Aircraft, any Engine, the APU or any Part, its use, location and condition including, without limitation, the hours available on the Aircraft, the APU, the Landing Gear and any Engine until the next scheduled check, inspection, overhaul or shop visit, as the case may be;	
 
(c)	within ten (10) days after the end of each calendar month during the Term, provide Lessor with a monthly utilisation report on the Aircraft and each Engine in the form specified in Exhibit F or such other form as may be required from time to time by Lessor (and the inclusion in such monthly report of the information referred to in paragraphs (a) and (b) above shall satisfy Lessee’s obligations under those paragraphs); and	
 
(d)	give Lessor not less than sixty (60) days written notice as to the time and location of all scheduled C Checks, Major Checks, any Engine Performance Restoration, any APU Performance Restoration and any Landing Gear Overhaul and prompt prior notice of any non-scheduled or unplanned Engine Performance Restoration, APU Performance Restoration and any Landing Gear Overhaul.	
 
2.3	Inspection:	
 
(a)	Lessor, the Security Trustee, the Lease Manager and any person designated by Lessor, the Security Trustee or the Lease Manager (the “ Inspecting Parties ”) may at any time visit, inspect, examine and survey the Aircraft, any Engine, any Part or the Aircraft Documents and for such purpose may, subject to any applicable insurance requirements and Air Authority regulation, travel on the flight deck as observer;	
 
(b)	Lessee will pay to Lessor on demand all reasonable out-of-pocket expenses incurred by the Inspecting Parties in connection with any such visit, inspection or survey where there exists a Default in respect of Lessee’s maintenance covenants under this Appendix 6 or where the inspection is required following the occurrence of an Event of Default; and	
 
(c)	no Inspecting Party will have a duty or liability to make or assume liability arising out of, any such visit, inspection or survey and so long as no Default has occurred and is continuing, no Inspecting Party will exercise such right more than once annually (unless a shop visit or check has occurred in which case any Inspecting Party may inspect the Aircraft and the Aircraft Documents after any such shop visit or check) other than at reasonable times and on reasonable notice and so as not to disrupt the normal commercial operations of Lessee.	
 
2.4	Records	
Lessee will:
 
(a)	procure that accurate, complete and current records of all flights made by, and all maintenance carried out on, the Aircraft (including in relation to each Engine and Part subsequently installed, before the installation) are kept in accordance with the requirements of the Air Authority, the FAA and EASA; keep the records in such manner as the Air Authority, the FAA and EASA may from time to time require, and ensure that they comply with the recommendations of the manufacturers of the Aircraft, any Engine or any Part. The records will form part of the Aircraft Documents;	
 
(b)	procure access to a revision service in respect of, and will maintain with appropriate revisions in English, all Aircraft Documents, records, logs, and other materials required by applicable laws and best practice of major international air transport operators in respect of the Aircraft;	
 
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(c)	at Delivery and Redelivery and at each time that the Agreed Maintenance Programme is amended, maintain a cross reference list between all Maintenance Planning Document tasks and the tasks in the Agreed Maintenance Programme; and	
 
(d)	on request (but not more frequently than once a year provided no Default has occurred and is continuing) permit Lessor, the Lease Manager and any other person designated by Lessor to electronically scan the Aircraft Documents.	
 
3	MAINTENANCE COVENANTS	
 
3.1	Maintenance and Repair	
Lessee will maintain and repair the Aircraft in the same manner as similar Fleet Aircraft without in any way materially discriminating against the Aircraft and will in addition:
 
(a)	keep the Aircraft airworthy in all respects (except when undergoing maintenance repair, overhaul or modification pursuant to and in accordance with the provisions of this Agreement where a certificate of release to service will return the Aircraft to an airworthy condition) and in good repair and condition;	
 
(b)	not make any major change to the Agreed Maintenance Programme or the schedule of the Agreed Maintenance Programme unless:	
 
 	(i)	required by the Air Authority or the Manufacturer; or	
 
 	(ii)	consented to by Lessor, such consent not to be unreasonably withheld;	
 
(c)	maintain the Aircraft in accordance with any requirements and recommendations of the Manufacturers and the Agreed Maintenance Programme through the Agreed Maintenance Performer and perform (at the respective intervals provided in the Agreed Maintenance Programme) all checks on a ***** (no sampling permitted);	
 
(d)	maintain and certify the Aircraft at an EASA and FAA approved maintenance facility acceptable to Lessor and maintain the Aircraft and the Aircraft Documents in accordance with EASA and FAA Federal Air Regulations Part 129 and the Air Authority (except to the extent of any conflict with the Air Authority requirements) and as otherwise required by this Agreement;	
 
(e)	comply with all mandatory inspection and modification requirements/recommendations, Airworthiness Directives, Mandatory Service Bulletins (which are either mandatory or in respect of which Lessee is complying for its other Fleet Aircraft) and similar mandatory requirements applicable to the Aircraft, any Engine or Part having a compliance date during the Term and which are required by the Air Authority, the FAA and/or EASA;	
 
(f)	comply with all applicable laws and regulations of the Air Authority and other aviation authorities with jurisdiction over Lessee or the Aircraft, any Engine or Part regardless of upon whom such requirements are imposed and which relate to the maintenance, condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;	
 
(g)	maintain in good standing a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Air Authority and will from time to time provide to Lessor a copy on request;	
 
(h)	maintain current certification as to maintenance issued by or on behalf of the Air Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request, such request to be given no more than once annually unless a Default has occurred and is continuing; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(i)	procure promptly the replacement of any Engine or Part which has become time, cycle or calendar expired, lost, stolen, seized, confiscated, destroyed, damaged beyond repair, unserviceable or permanently rendered unfit for use, with an engine or part complying with the conditions set out in paragraph 3.3(a) (subject to the terms of paragraph 3.3 (b) if applicable).	
 
3.2	Removal of Engines and Parts	
Lessee will ensure that no Engine or Part installed on the Aircraft is at any time removed from the Aircraft other than:
 
(a)	if replaced as expressly permitted by this Agreement; or	
 
(b)	if the removal is of an obsolete item and is in accordance with the Agreed Maintenance Programme; or	
 
(c)		
 
 	(i)	during the course of maintaining, servicing, repairing, overhauling or testing that Engine or the Aircraft, as the case may be; or	
 
 	(ii)	as part of a normal engine or part rotation programme; or	
 
 	(iii)	for the purpose of making such modifications to the Engine or the Aircraft, as the case may be, as are permitted under this Agreement;	
and then in each case only if it is reinstalled or replaced by a Suitable Replacement Engine or Replacement Part complying with paragraph 3.3(a) below (and subject to the terms of paragraph 3.3(b) where applicable) as soon as practicable and in any event no later than the Expiry Date in the case of a Replacement Part and no later than three (3) months prior to the Expiry Date in the case of a Suitable Replacement Engine. Without prejudice to the generality of the foregoing, Lessee may not replace an Engine with a Suitable Replacement Engine save in the case of a Total Loss of an Engine.
 
3.3	Installation of Engines and Parts	
 
(a)	Subject always to paragraph 3.2 above, Lessee may install an engine or part on the Aircraft if:	
 
 	(i)	in the case of an engine, it is a Suitable Replacement Engine;	
 
 	(ii)	in the case of a part, it is a Replacement Part;	
 
 	(iii)	in each case, it has become and remains the property of Lessor free from Security Interests and on installation on the Aircraft will without further act be subject to the Mortgage and this Agreement; and	
 
 	(iv)	in each case, Lessee has such details as to its source, maintenance records and life remaining as are required by the Air Authority and Lessee has for each Replacement Part or Suitable Replacement Engine, such technical and maintenance records as would be included for the purposes of this Agreement in the Aircraft Documents in Part 3 of Appendix 8 for each such Suitable Replacement Engine or Replacement Part if each such Suitable Replacement Engine or Replacement Part was then redelivered to Lessor pursuant to and in accordance with Appendix 8 of this Agreement;	
 
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(b)	Lessee will, if no Default has occurred which is continuing, be entitled to install any engine or part on the Aircraft by way of replacement notwithstanding paragraph 3.3(a) if:	
 
 	(i)	there is not available to Lessee at the time and in the place that that engine or part is required to be installed on the Aircraft, a replacement engine or, as the case may be, part complying with the requirements of paragraph 3.3(a);	
 
 	(ii)	it would result in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee to ground the Aircraft until an engine or part, as the case may be, complying with paragraph 3.3(a) becomes available for installation on the Aircraft; and	
 
 	(iii)	as soon as practicable after installation of the same on the Aircraft but, in any event, no later than the Expiry Date in the case of a part and three (3) months prior to the Expiry Date in the case of an engine, Lessee removes any such engine or part and replaces it with the Engine or Part replaced by it or by a Suitable Replacement Engine (if expressly permitted by paragraph 3.2 of this Appendix 6) or a Replacement Part and otherwise complying with paragraph 3.3(a).	
 
3.4	Non-Installed Engines and Parts	
Lessee will:
 
(a)	ensure that any Engine or Part which is not installed on the Aircraft (or any other aircraft as permitted by this Agreement) is, except as expressly permitted by this Agreement, properly and safely stored, and kept free from Security Interests;	
 
(b)	notify Lessor whenever any Engine is removed from the Aircraft and, from time to time, on request procure that any person (other than an Agreed Maintenance Performer) to whom possession of an Engine is given executes, prior to receipt of possession, a Recognition of Rights Agreement (or the relevant agreement with such person contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 under English law or pursuant to the relevant governing law of the relevant agreement; and	
 
(c)	(notwithstanding the foregoing provisions of this sub-paragraph), be permitted, if no Default has occurred and is continuing, to install any Engine (provided any such Engine continues to be maintained by the Agreed Maintenance Performer) or Part on an aircraft, or in the case of a Part, an engine:	
 
 	(i)	owned and operated by Lessee free from Security Interests; or	
 
 	(ii)	leased or hired to Lessee pursuant to a lease or conditional sale agreement on a long-term basis and on terms whereby Lessee has full operational control of that aircraft or engine; or	
 
 	(iii)	acquired by Lessee and/or financed or refinanced, and operated by Lessee, on terms that ownership of that aircraft or engine, as the case may be, pursuant to a lease or conditional sale agreement, or a Security Interest therein, is vested in or held by any other person;	
provided that in all cases Lessee gives Lessor reasonable prior written notice and in the case of (ii) and (iii):
 
 	(A)	the terms of any such lease, conditional sale agreement or Security Interest will not have the effect of prejudicing the interests of Lessor, the Security Trustee or the Lenders in that Engine or Part or the interests of Lessor, the Security Trustee and the Lenders in respect thereof under the Assignment and the Mortgage; and	
 
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 	(B)	the lessor under such lease, the seller under such conditional sale agreement or the holder of such Security Interest, as the case may be, has, prior to installation, entered into a Recognition of Rights Agreement (or the lease, conditional sale agreement or the relevant security interest contains language substantially similar to the provisions of paragraph 3.8 of this Appendix 6) each of which is enforceable by Lessor and the Security Trustee under the Contracts (Rights of Third Parties) Act 1999 under English law or pursuant to the relevant governing law of the relevant lease, conditional sale agreement or other security agreement.	
 
3.5	Equipment Changes	
 
(a)	Lessee will not make any modification or addition to the Aircraft (each an “ Equipment Change ”), except for an Equipment Change which:	
 
 	(i)	is expressly permitted by this Agreement; or	
 
 	(ii)	is required to in order to change the interior configuration of the Aircraft from 180Y to 174Y; or	
 
 	(iii)	has the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where the Equipment Change does not diminish or impair the value, utility, condition, or airworthiness of the Aircraft; or	
 
 	(iv)	arises as a result of the requirements of the Air Authority, the Manufacturer, EASA or FAA which Equipment Change shall be for the account of Lessee; or	
 
 	(v)	has a cost (including labour, overheads, engineering supplies, materials and third party costs) no greater than ***** and which is performed pursuant to the original equipment manufacturer service bulletin;	
 
(b)	So long as no Event of Default has occurred and is continuing, Lessee may remove any Equipment Change provided such removal does not diminish or impair the value, utility, condition or airworthiness of the Aircraft; and	
 
(c)	Lessor may require Lessee to remove any Equipment Change and to restore the Aircraft to its condition as it was prior to that Equipment Change except to the extent such Equipment Change is required to comply with the Return Condition.	
 
3.6	Title on an Equipment Change:	
 
(a)	Title to all Engines and Parts installed on the Aircraft whether by way of replacement, as the result of an Equipment Change or otherwise (except those installed pursuant to paragraph 3.3(b)) will on installation, without further act, vest in Lessor subject to the Mortgage, this Agreement and the Assignment free and clear of all other Security Interests. Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable laws. At any time when requested by Lessor, Lessee will provide evidence to Lessor’s satisfaction (including the provision, if required, to Lessor of one or more legal opinions, the cost of any English law opinion to be borne by Lessor) that title has so passed to Lessor.	
 
(b)	Any Engine or Part at any time removed from the Aircraft will remain the property of Lessor until a replacement has been made in accordance with this Agreement and until title in the Suitable Replacement Engine or Replacement Part, as applicable, has passed, according to applicable laws, to Lessor subject to the Mortgage, the Assignment and this Agreement free of all Security Interests whereupon title to the replaced Engine or Part will pass to Lessee free and clear of Lessor Liens.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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3.7	Pooling of Parts	
So long as no Default has occurred and is continuing Lessee may lease, let or hire or charter or otherwise part with possession of a Part (on terms conferring no more than a contractual right against Lessee but not rights against the Part) pursuant to pooling arrangements to which Lessee is a party and which either:
 
(a)	    	
 
 	(i)	are arrangements involving responsible, solvent scheduled commercial air carriers or aircraft operators or the manufacturers, servicers or suppliers of the Part; and	
 
 	(ii)	do not contemplate transfer of title to the pooled Part except where title to the relevant Replacement Part passes, in accordance with paragraph 3.3(a) above at the same time to Lessor; or	
 
(b)	are otherwise acceptable to Lessor in its sole discretion.	
 
3.8	Title to Engines	
Lessor agrees, for the benefit of Lessee and for the benefit of any mortgagee, indenture trustee, or other holder of a security interest in any engine (other than an Engine) owned by Lessee, any lessor of any engine (other than an Engine) leased to Lessee and any conditional vendor of any engine (other than an Engine) purchased by Lessee subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor, the Security Trustee or any Lender nor their successors or assigns will acquire or claim, as against Lessee or any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided however that such agreement of Lessor shall not be for the benefit of any such mortgagee, indenture trustee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof unless it has expressly agreed substantially on the same terms as set out herein or otherwise on terms satisfactory to Lessor acting reasonably (which agreement may be contained in such lease, conditional sale or other security agreement, indenture or mortgage or in a Recognition of Rights Agreement) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on an airframe (other than the Airframe).
 
4	PRESERVATION OF ASSET	
 
4.1	Sub-Leasing	
 
(a)	Lessee shall not, without the prior written consent of Lessor, sublease, charter, hire or otherwise part with the possession or operational control of the Aircraft except:	
 
 	(i)	for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted under this Agreement; or	
 
 	(ii)	so long as no Default is continuing (or may result from the proposed Wet Lease or Permitted Sublease), on terms of a Wet Lease or a Permitted Sublease.	
 
(b)	Lessee shall give Lessor written notice prior to entering into any Wet Lease, save where it is not operationally practicable to do so, in which case, Lessee shall give Lessor written notice of any such Wet Lease as soon as reasonably practicable after entering into any such Wet Lease.	
 
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(c)	A sublease will only be a Permitted Sublease where Lessee has complied with the requirements of Clause 4.1(d) and:	
 
 	(i)	the sublessee is a Permited Sublessee; and	
 
 	(ii)	the proposed sublease:	
 
 	(A)	does not permit further subleasing without the consent of Lessor;	
 
 	(B)	does not have a term (including any extension options) that extends beyond the date falling one (1) month prior to the Expiry Date; and	
 
 	(C)	the rights of the Permitted Sublessee under the sublease are expressly stated in the sublease to be subject and subordinate to this Agreement and to the rights and interests of Lessor, the Lenders and the Security Trustee hereunder and the other Transaction Documents.	
 
(h)	Prior to entry into the sublease:	
 
 	(i)	Lessee shall give Lessor and the Security Trustee, no later than thirty (30) days prior to the proposed commencement of the sublease, a notice specifying the name of the proposed sublessee (which shall be a Permitted Sublessee) and, if applicable, the name of any proposed new State of Registration and/or Habitual Base;	
 
 	(ii)	Permitted Sublessee shall provide Lessor and the Security Trustee with an acknowledgment in writing, in form and substance satisfactory to Security Trustee, no later than five (5) Business Days prior to delivery of the Aircraft under the relevant sublease, acknowledging that the rights of the sublessee under the sublease are subject and subordinate to this Agreement and to the rights and interests of the Lessor, the Lenders and the Security Trustee under this Agreement and the other Transaction Documents and that the termination of this Agreement or the leasing of the Aircraft hereunder shall (without any further action) result in the termination of the relevant sublease or the leasing of the Aircraft thereunder;	
 
 	(iii)	Lessee shall provide Lessor and the Security Trustee with a satisfactory confirmation of the registration at the International Registry of:	
 
 	(A)	any International Interest to be vested in Lessee under the sublease; and	
 
 	(B)	an assignment of all of the associated rights and related International Interest of Lessee in favour of the Security Trustee,	
if either:
 
 	(1)	the new State of Registration or the jurisdiction of incorporation of the Permitted Sublessee is a Contracting State for the purposes of the Cape Town Convention; or	
 
 	(2)	the Permitted Sublessee is situated in a Contracting State for the purposes of Article 4 of the Cape Town Convention;	
 
 	(iv)	if the new State of Registration is a Contracting State for the purposes of the Cape Town Convention, Lessee shall: (i) procure the execution of an IDERA by the Permitted Sublessee irrevocably appointing the Security Trustee as its certified designee under the IDERA and, to the extent permitted by applicable law, its recordation by the relevant Air Authority, and authorising the Security Trustee to exercise the remedies specified in Article 15(1) of the Cape Town Convention at Security Trustee’s sole discretion; and (ii) following recordation, deliver the IDERA to the Security Trustee;	
 
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 	(v)	Lessee shall provide to Lessor and the Security Trustee evidence satisfactory to Lessor and the Security Trustee (acting reasonably) that:	
 
 	(A)	Lessee will remain in compliance with Appendix 7 during the term of the sublease; or	
 
 	(B)	if the proposed sublease is to maintain insurance coverage during the term of the sublease, the proposed insurance coverage is on terms equivalent to the Insurances	
 
 	(vi)	Lessor and the Security Trustee shall be satisfied (acting reasonably) that:	
 
 	(A)	the rights and interests of Lessor, the Lenders and the Security Trustee in respect of the Aircraft or any Transaction Document and the right to repossess the Aircraft in the case of an Event of Default or an Event of Default (as defined under the Loan Agreement) (as applicable) will not be adversely affected by the subleasing;	
 
 	(B)	the perfection of the interests of Lessor, the Lenders and the Security Trustee in respect of the Aircraft and under the Transaction Documents;	
 
 	(C)	if a new State of Registration or Habitual Base is proposed, that as compared to the State of Registration or Habitual Base, respectively, as at the Delivery Date, the jurisdiction of the proposed new State of Registration and Habitual Base provides substantially equivalent or better protection for the rights of lessors, owners, lenders and mortgagees and imposes no less stringent aircraft maintenance standards taken as a whole;	
 
 	(D)	such sublease will not result in the imposition of, or increase in the amount of, any Tax, fees, costs or expenses for which Lessee does not then enter into a binding agreement to indemnify, each Indemnitee to its satisfaction against such imposed or increased Taxes, fees, costs or expenses; and	
 
 	(E)	the due execution by Lessee and the Permitted Sublessee of the proposed sublease and effectiveness of the subordination undertaking referred to in Clause 4.1(d)(ii) above,	
and Lessee shall provide such assistance as may be reasonably required to demonstrate sub-paragraphs (A) to (E) above, including, but not limited to, procuring opinions from independent legal and/or tax counsel (and/or, as applicable, independent technical advisers) in each case acceptable to Lessor and the Security Trustee (acting reasonably).
 
(e)	Where the Aircraft is subleased under a Permitted Sublease pursuant to this Clause 4.1:	
 
 	(i)	the Aircraft may be registered with the Air Authority of the country in which the Permitted Sublessee is organised, subject to the satisfaction of the relevance conditions of Clauses 4.1(c) and (d) above; and	
 
 	(ii)	upon the termination of any such sublease, at the election of Lessor, either (x) in connection with Redelivery under this Agreement, Lessee shall procure that the Aircraft is deregistered from the then current jurisdiction of registration, or (y) Lessee shall procure that the Aircraft is re-registered in the State of Registration as at the Delivery Date and provide (1) a confirmation in form and substance	
 
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 	satisfactory to Lessor and the Security Trustee (acting reasonably) from counsel acceptable to the Security Trustee and addressed to Lessor and the Security Trustee that the relevant legal opinion provided pursuant to Appendix 4, Part 1, Clause 1.1(b)(ii) remains valid, correct and applicable to such re-registration in such State of Registration and the rights and interests of Lessor, the Lenders and the Security Trustee or (2) a new legal opinion, from counsel approved by Lessor and the Security Trustee (acting reasonably) on substantially similar terms to that set out in Appendix 4, Part 1, Clause 1.1(b)(ii).	
 
(f)	Notwithstanding any sublease of the Aircraft, Lessee shall remain fully liable to perform its obligations under this Agreement and the other Transaction Documents to which it is a party but to the extent the relevant Permitted Sublessee properly performs an obligation under the Permitted Sublease, Lessor agrees that such performance shall be regarded as discharging (to such extent) any corresponding obligations of Lessee under the Transaction Documents to which it is a party.	
 
(g)	Lessee shall (i) deliver to Lessor and the Security Trustee, within seven (7) Business Days after the date of execution of any Permitted Sublease, a duly executed copy of it, (ii) not materially amend or vary the terms thereof without the prior approval of Lessor, and (iii) deliver to Lessor and the Security Trustee, within seven (7) Business Days after the date of execution of any such material amendment, a duly executed copy of it.	
 
(h)	If the International Interest vesting in Lessee under the Permitted Sublease has been registered at the International Registry, Lessee shall discharge the registration and each registration of any related assignment promptly on request by Lessor or the Security Trustee or promptly following termination of the period of subleasing of the Aircraft under the sublease and redelivery of the Aircraft thereunder.	
 
(i)	If an event of default (howsoever described), or event which with the giving of notice, lapse of time or fulfilment of any other condition may constitute such an event, is continuing under a Permitted Sublease whilst a Permitted Sublessee is in possession of the Aircraft, Lessee shall (i) promptly notify Lessor (with a copy to the Security Trustee) of the events and the steps that it is proposing to take to enforce the terms of the Permitted Sublease and the steps that it is proposing to take to enforce the terms of the Permitted Sublease or recover possession of the Aircraft and (ii) take all such steps as Lessor or the Security Trustee may instruct (acting reasonably).	
 
(j)	Lessee shall pay on demand all reasonable costs and expenses associated with entering into a Permitted Sublease or change of State of Registration including the reasonable costs and expenses of Lessor and the Security Trustee (including reasonable legal fees and expenses).	
 
4.2	Title	
Lessee will:
 
(a)	not do or knowingly permit to be done or omit or knowingly permit to be omitted to be done any act or thing which might reasonably be expected to jeopardise the rights of Lessor hereunder or as owner of the Aircraft or the rights of the Security Trustee as mortgagee of the Aircraft and as assignee under the Assignment or the validity, enforceability or priority of the Mortgage and the Assignment;	
 
(b)	on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, make clear to third parties that title is held by Lessor subject to the Mortgage;	
 
(c)	not at any time (i) represent or hold out Lessor, the Security Trustee, the Lease Manager or the Lenders as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee or (ii) pledge the credit of Lessor, the Lease Manager, the Security Trustee or the Lenders;	
 
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(d)	ensure that there is always affixed, and not removed or in any way obscured, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a reasonably prominent position on the Aircraft and on each Engine stating:	
“This Aircraft/Engine is owned by Amentum Aircraft Leasing No. Three Limited, is operated by Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., is subject to a mortgage in favour of [the Security Trustee] and may not be operated by any other person without the prior written consent of [the Security Trustee]”;
 
(e)	not create or permit to exist any Security Interest upon the Aircraft, any Engine or any Part;	
 
(f)	not do or permit to be done anything which may reasonably be expected to expose the Aircraft, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, damage or destruction and without prejudice to the foregoing, if any such penalty, forfeiture, impounding, detention or appropriation, damage or destruction occurs, give Lessor notice and use best endeavours to procure the immediate release of the Aircraft, any Engine or the Part, as the case may be;	
 
(g)	not abandon the Aircraft, any Engine or any Part;	
 
(h)	pay and discharge or cause to be paid and discharged when due and payable or make adequate provision by way of security or otherwise for all debts, damages, claims and liabilities which have given or may reasonably be expected to give rise to a Security Interest created by Lessee over or affecting the Aircraft, any Engine or any Part; and	
 
(i)	not attempt, or hold itself out as having any power, to sell, lease or otherwise dispose of the Aircraft, any Engine or any Part.	
 
4.3	Protection	
Lessee will:
 
(a)	maintain the registration of the Aircraft with the Air Authority reflecting (so far as permitted by applicable law) the respective interests of Lessor, and at Lessor’s cost, the Security Trustee and the Lenders and not do or suffer to be done anything which might adversely affect that registration; and	
 
(b)	do all acts and things (including, without limitation, making any filing or registration with the Air Authority or any other Government Entity) and execute and deliver all documents (including, without limitation, any amendment to this Agreement) as may be required by Lessor:	
 
 	(i)	at Lessor’s expense, following any change or proposed change in the ownership or financing of the Aircraft or in the manner of securing Lessor’s obligations to the Security Trustee and Lenders and/or Lessee’s obligations to Lessor provided that any transfer complies with the provisions of Appendix 10 or are otherwise agreed to by Lessee; or	
 
 	(ii)	following any modification of the Aircraft, any Engine or any Part or the permanent replacement of any Engine or Part in accordance with this Agreement, so as to ensure that the rights of Lessor under this Agreement and the rights of the Security Trustee and the Lenders under the Mortgage and the Assignment in respect thereof apply with the same effect as before; or	
 
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 	(iii)	to establish, maintain, preserve, perfect and protect the respective rights of Lessor under this Agreement and as owner of the Aircraft and, at Lessor’s cost and expense, the Security Trustee and the Lenders in the Mortgage and the Assignment.	
 
4.4	Cape Town Convention	
 
(a)	In this Agreement, the Convention and the Protocol shall be read and interpreted together as a single instrument as required by Article 6(1) of the Convention. In this paragraph 4.4 the following expressions have the respective meanings given to them in Article 1 of the Consolidated Text:	
aircraft engines
aircraft object
assignment
associated rights
contract of sale
creditor
international interest
leasing agreement
registry authority
security agreement
State of registry
 
(b)	Lessor and Lessee agree that:	
 
 	(i)	without prejudice to paragraphs 4.1, 4.2 and 4.3 of this Appendix 6, the Aircraft shall be registered on the aircraft register of the State of Registration, which is the State of registry for the purposes of the Convention;	
 
 	(ii)	the Airframe is an airframe and, accordingly, is an aircraft object to which this Agreement relates for the purposes of the Convention and is an A320-200 aircraft with manufacturer’s serial number 3543 and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and are V2527E-A5 engines with manufacturer’s serial numbers V12938 and V12972;	
 
 	(iii)	the international interest of Lessor, as a creditor, in the Airframe and each of the Engines, being the lessor under a leasing agreement of an aircraft object, shall be registered, with the consent of each of Lessor and Lessee, as an international interest under the Convention in each of the Airframe and the Engines, and such registration may be amended or extended prior to its expiry by either Lessor or Lessee, with the consent in writing of the other, such consent not to be unreasonably withheld or delayed;	
 
 	(iv)	the events which are referred to in Part 1 of Appendix 9 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 12 to 15 and 20 of the Consolidated Text;	
 
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 	(v)	Lessor shall have the remedies referred to in Articles 15(1) and 20(1) of the Consolidated Text;	
 
 	(vi)	Lessor has power to dispose of the Airframe and the Engines for the purpose of Article 10(b) of the Consolidated Text subject to and in accordance with the Transaction Documents;	
 
 	(vii)	Lessee shall, on or prior to Delivery, execute and deliver to Lessor an IDERA in favour of the Lessor in the form annexed as an Annex to the Protocol;	
 
 	(viii)	Lessor may assign the associated rights (as defined in Article 1 of the Consolidated Text) under the Assignment or any other assignment permitted in accordance with Appendix 10, which associated rights consist of all rights to payment or other performance by Lessee (as debtor) under this Agreement and are associated with the Airframe and the Engines being aircraft objects for the purposes of the Convention. Any such assignment shall be made in accordance with and subject to the conditions specified in Appendix 10 and shall transfer to the relevant assignee the related international interests of Lessor; and	
 
 	(ix)	Lessee shall cooperate with Lessor, at Lessee’s expense, with respect to effecting registration pursuant to the Convention of the international interests of any Lender or the Security Trustee as creditor in respect of the security agreement and the assignment constituted by any Mortgage and any Assignment and of any associated agreement related to the ranking of priority between the various international interests and/or the interests of Lessee;	
 
(c)	If any of the Engines is replaced by a Suitable Replacement Engine pursuant to and in accordance with this Agreement, Lessor and Lessee shall, at Lessee’s expense and on or prior to title to the Suitable Replacement Engine being vested in Lessor, take such steps as shall be available to them under the terms of the Convention and as are necessary:	
 
 	(i)	to constitute in favour of Lessor as a creditor (being the lessor under a leasing agreement of an aircraft object) an international interest in the Suitable Replacement Engine, including, for this purpose, entering into a supplement to this Agreement in such form as Lessor shall reasonably require providing that the Suitable Replacement Engine (which shall be identified in such supplement in the same manner as is provided in paragraph 4.4(b)(ii)above) shall be leased by Lessor to Lessee with effect from title to the same vesting in Lessor under the contract of sale referred to in paragraph 4.4(c)(iii) below and that the Suitable Replacement Engine shall be an Engine for the purposes of this Agreement;	
 
 	(ii)	to register such international interest in accordance with Chapter V of the Consolidated Text;	
 
 	(iii)	to enter into a contract of sale with respect to the Suitable Replacement Engine which complies with the formalities of Article 11 of the Consolidated Text;	
 
 	(iv)	to register the contract of sale with respect to the Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text;	
 
 	(v)	if required by any person who has acquired title to the Replaced Engine from Lessor, to enter into a contract of sale with respect to the Replaced Engine which complies with the formalities of Article 11 of the Consolidated Text and consent to the registration of such contract of sale in accordance with Chapter V of the Consolidated Text; and	
 
 	(vi)	to subject the relevant Suitable Replacement Engine to the security constituted by any Mortgage, and to register the international interest of the Security Trustee	
 
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 	under any Mortgage in respect of such Suitable Replacement Engine in accordance with Chapter V of the Consolidated Text.	
 
(d)	Without prejudice to any of the foregoing provisions of this paragraph 4.4, Lessee shall do or cause to be done (in conjunction with Lessor where necessary) any and all acts which may be required or desirable in connection with the terms of the Convention, to the extent permitted by the law of the State of Registration, to register, perfect, preserve and/or enhance any international interests of Lessor and/or the Security Trustee with respect to aircraft objects to which the Transaction Documents to which Lessee is a party relate.	
 
(e)	Pursuant to Article XI, Option B of the Protocol and Article XXX(3) the parties hereby agree that the time period required by Article XI, Alternative B of the Protocol shall be the twenty (20) day period referred to in article 92 of the Mexican Ley de Concursos Mercantiles in respect of any procedure referred to in said law.	
4.5
 
(a)	If the State of Registration has ratified the terms of the Geneva Convention, do all acts and things in the State of Registration which Lessor may reasonably require to preserve the title, rights and interest of Lessor, and, at Lessor’s cost, the Security Trustee, to and in the Aircraft within the jurisdiction of any state which is a party to the Geneva Convention.	
 
(b)	In the event of any other enactments or provisions being made or becoming operative relating to recognition of rights in aircraft and which may apply to the Aircraft, promptly do and join with Lessor and, if appropriate, the Security Trustee and the Lenders in doing all such acts or things as may be necessary or reasonably desirable to perfect recognition of the title, rights and interest of Lessor, the Security Trustee and the Lenders in respect of the Aircraft.	
 
4.6	Lessor’s Financing	
Lessee acknowledges that Lessor may at any time during the Term grant new or further Security Interests over the Aircraft and the benefit of the Transaction Documents to the Lenders and the Security Trustee or any new or replacement lenders or security trustee as security for Lessor’s obligations to the Lenders or such new or replacement lenders. Lessee undertakes to provide all reasonable assistance and co-operation to Lessor, any Lenders and any Security Trustee and their respective representatives and advisers (at Lessor’s cost) in connection with the perfection and maintenance of such Security Interests, including (without limitation) the effecting of all necessary filings and registrations in the State of Registration and the Habitual Base and with the International Registry and Lessor agrees to take all reasonable steps available to it to ensure that such assistance and co-operation will not interfere with Lessee’s commercial operations provided that any security interests or assignment in favour of new or replacement lenders shall comply with the provisions of Appendix 10. To the extent that Lessor is aware of the identity of any new or replacement Lenders, Lessor shall (subject always to any duty of confidentiality) give Lessee the names of any such Lenders.
 
4.7	Costs	
Unless otherwise specified in the Transaction Documents, all costs associated with compliance by Lessee with its obligations under the Transaction Documents shall be for the account of Lessee.
 
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APPENDIX 7
PART 1
INSURANCE COVENANTS
 
1	Lessee will maintain or cause to be maintained in full force during the Term, and thereafter as expressly provided by this Agreement, insurances in respect of the Aircraft (the “ Insurances ” which expression includes, where the context so admits, any relevant reinsurance(s)). The Insurances will be effected and maintained on a non-discriminatory basis compared with similar aircraft in Lessee’s fleet. The Insurances will be effected either:	
 
(a)	on a direct basis with insurers of recognised standing who normally participate in aviation insurances in the leading international insurance markets and led by internationally recognised and reputable underwriter(s); or	
 
(b)	with a single internationally recognised and reputable insurer or group of internationally recognised and reputable insurers who does or do not retain the risk but effects ***** reinsurance of all risks insured with reinsurers in the leading international insurance markets and through brokers each of internationally recognised standing in the international aviation insurance markets (the “ Reinsurances ”).	
 
2	Lessor’s current requirements as to required Insurances are as specified in Part 2 of this Appendix 7. Lessor or the Security Trustee may from time to time upon reasonable consultation with Lessee and its insurance advisers stipulate other requirements (other than as to the level of the deductible or the Agreed Value) for the Insurances so that the scope and level of cover is maintained in line with the prudent practice of reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft and the interests of Lessor, the Security Trustee and the Lenders are protected in accordance with such practices.	
 
3	If at any time Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change in circumstances may occur or has occurred which in the reasonable opinion of such brokers may materially affect or has materially affected the rights of Lessor and other Indemnitees in and to the Insurances, then Lessor, the Security Trustee and their brokers will consult with Lessee and Lessee’s brokers regarding what action is required to protect the interests of the parties insured. If, following the consultation, Lessor’s or the Security Trustee’s insurance brokers (acting reasonably) consider that any change should be made (other than as to the level of the deductible or the Agreed Value) having regard to the level and type of Insurances, and the terms and conditions thereof, then maintained by reputable and experienced international operators of aircraft operating aircraft similar to the Aircraft, Lessee will then arrange or procure the arrangement of alternative cover satisfactory to Lessor’s and the Security Trustee’s insurance brokers (acting reasonably).	
 
4	Lessee will:	
 
(a)	ensure that all legal requirements as to insurance of the Aircraft, any Engine or any Part which may from time to time be imposed by the laws of the State of Registration, the Habitual Base or any state to, from or over which the Aircraft may be flown, in so far as they affect or concern the operation of the Aircraft, are complied with to ensure that (i) the Aircraft is not in danger of detention or forfeiture, (ii) the Insurances remain valid and in full force and effect, and (iii) the interests of the Indemnitees in the Insurances and the Aircraft, the Engines or any Part are not thereby prejudiced;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(b)	not use, cause or permit the Aircraft, any Engine or any Part to be used for any purpose or in any manner not covered by the Insurances or outside any geographical limit imposed by the Insurances;	
 
(c)	comply with the terms and conditions of each policy of the Insurances and not do, consent or agree to any act or omission which invalidates or might reasonably be expected to invalidate the Insurances, or renders or might reasonably be expected to render void or voidable the whole or any part of any of the Insurances; or brings any particular liability within the scope of an exclusion or exception to the Insurances;	
 
(d)	not take out without the prior written approval of Lessor any insurance or reinsurance in respect of the Aircraft other than those required under this Agreement which would prejudice the rights or interest of Lessor or any of the other Indemnitees under or in respect of the Insurances and in no event maintain hull insurance in an amount in excess of ***** of the Agreed Value from time to time, unless relating solely to business interruption, profit commission and deductible risk;	
 
(e)	commence renewal procedures on a timely basis prior to expiry of any of the Insurances and provide to Lessor:	
 
 	(i)	if requested by Lessor, a written status report of renewal negotiations fourteen (14) days prior to each expiry date;	
 
 	(ii)	faxed confirmation of completion of renewal prior to each expiry date; and	
 
 	(iii)	certificates of insurance (and where appropriate certificates of reinsurance), and broker’s (and any reinsurance brokers’) letter of undertaking in a form acceptable to Lessor and the Security Trustee (each acting reasonably) in English, detailing the coverage and confirming the insurers’ (and any reinsurers’) agreement to the specified insurance requirements of this Agreement within 7 days after each renewal date;	
 
(f)	on request, provide to Lessor copies of such other documents as Lessor may reasonably request evidencing the Insurances provided that nothing in this paragraph (f) shall require Lessee to give to Lessor a copy of Lessee’s fleet policy;	
 
(g)	on request but no more frequently than once a year, unless a Default has occurred and is continuing, provide to Lessor evidence that the Insurance premiums have been paid;	
 
(h)	not make or accept any modification or alteration to the Insurances material and adverse to the interests of any of the Indemnitees;	
 
(i)	be responsible for any deductible under the Insurances;	
 
(j)	provide any other insurance and reinsurance related information, or assistance, in respect of the Insurances as Lessor may reasonably request but no more frequently than once a year, unless a Default has occurred and is continuing; and	
 
(k)	promptly notify Lessor of:	
 
 	(i)	any loss, theft, damage or destruction to the Aircraft, any Engine or any Part, or any modification to the Aircraft if the potential cost may exceed *****; and	
 
 	(ii)	any claim or other occurrence likely to give rise to a claim under the Insurances in excess of ***** and reasonably sufficient details of any negotiations with the insurance brokers over any such claim.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(l)	ensure or procure that insurance cover is maintained in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe; and	
 
(m)	maintain separate insurance cover in accordance with the provisions of this Part 1 of this Appendix 7 in respect of an Engine at all times while it is removed from the Airframe.	
 
5	If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound, (without prejudice to any other rights of Lessor under this Agreement):	
 
(c)	to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an “ owner’s interest ” policy) as it considers appropriate. Any sums so expended by it will become immediately due and payable by Lessee to Lessor together with interest thereon at the rate specified in Clause 5.5, from the date of expenditure by the relevant Indemnitee up to the date of reimbursement by Lessee; and	
 
(d)	at any time while such failure is continuing to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction.	
 
6	Lessee shall effect and maintain liability insurance after the Expiry Date with respect to its liability under the indemnities in Clause 11 for such period as Lessor may reasonably require (but in any event not more than two (2) years or until completion of the next scheduled Major Check, whichever is earlier) which provides for each Indemnitee to be named as additional insured. Lessee’s obligation in this paragraph shall not be affected by Lessee ceasing to be lessee of the Aircraft and/or any of the Indemnitees ceasing to have any interest in respect of the Aircraft.	
 
7	Application of Insurance Proceeds	
 
(a)	All hull insurance payments up to and including the Agreed Value received as the result of a Total Loss occurring during the Term will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and Lessor will pay or procure the payment of the balance of those amounts to Lessee after deduction of all amounts which may be or become payable by Lessee to Lessor under this Agreement.	
 
(b)	All insurance proceeds of any property damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting a Total Loss and in excess of ***** will be paid to the Security Trustee (or if requested by the Security Trustee, to Lessor) and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied (acting reasonably) that the repairs or replacement have been or are to be effected in accordance with this Agreement and any balance remaining (after deducting therefrom any amount of such insurance proceeds paid by the insurers in respect of a claim by Lessee for compensation for its loss of use of the Aircraft) may be retained by the Security Trustee or Lessor, as the case may be. Insurance proceeds in amounts below ***** may be paid by the insurer directly to Lessee.	
 
(c)	All insurance proceeds in respect of third party liability will, except to the extent paid by the insurers to the relevant third party, be paid to the Security Trustee or as directed by the Security Trustee, to Lessor to be paid directly in satisfaction of the relevant liability or to Lessee in reimbursement of any payment so made.	
 
(d)	Notwithstanding paragraphs 7(a), (b) or (c), if at the time of the payment of any such insurance proceeds an Event of Default has occurred and is continuing, all such proceeds will be paid to or retained by the Security Trustee (or if requested by the Security Trustee, to Lessor) to be applied toward payment of any amounts which may be or become payable by Lessee during any period when such Event of Default is continuing in such order as Lessor sees fit or as Lessor may elect.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(e)	To the extent that insurance proceeds are paid to Lessee, Lessee agrees to comply with the foregoing provisions of this paragraph 7 and apply or pay over such proceeds as so required.	
 
70

APPENDIX 7
PART 2
INSURANCE REQUIREMENTS
The Insurances required to be maintained are as follows:
 
(a)	HULL ALL RISKS of Loss or Damage whilst flying and on the ground with respect to the Aircraft on an “ agreed value basis ” for an amount not less than the Agreed Value, and not greater than ***** of the Agreed Value from time to time, and with a deductible (other than in respect of a Total Loss) not exceeding ***** or such other amount agreed by Lessor from time to time;	
 
(b)	HULL WAR AND ALLIED PERILS, covering such risks excluded from the Hull All Risks Policy to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft and at least as extensive as AVB48B (or its equivalent in respect of liabilities, other than paragraph (b)) and LSW 555D (or its equivalent in respect of Hull) from the leading international insurance markets including confiscation and requisition by the State of Registration for an amount not less than the Agreed Value and not greater than ***** of the Agreed Value from time to time;	
 
(c)	SPARES ALL RISKS (INCLUDING WAR AND ALLIED PERILS) property insurance on all Engines and Parts when not installed on the Aircraft on an “ agreed value ” basis for their full replacement value and including engine test and running risks;	
 
(d)	AVIATION THIRD PARTY LEGAL LIABILITY to the fullest extent maintained by prudent, experienced international operators of aircraft similar to the Aircraft from leading international insurance markets including but not limited to aircraft third party, passenger, baggage, cargo, mail and general third party legal liability for a Combined Single Limit of an amount not less than the Minimum Liability Coverage or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for the time being any one occurrence but in respect of products and completed operations this limit may be an aggregate limit for any and all losses occurring during the currency of the policy and further limited to ***** (or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft) any one occurrence and in the aggregate in respect of personal injury coverage. War and Allied Risks are also to be covered under Extended Coverage Endorsement AVN52E (or its equivalent) for an amount not less than ***** or such higher amount as may be applicable to Lessee’s policy covering its Fleet Aircraft for any one occurrence and in the annual aggregate. Any aggregation of limits will be subject to limits being restored following any claims which have been paid;	
 
(e)	all required hull, hull war and spares insurance (as specified in (a), (b) and (c)), so far as it relates to the Aircraft will:	
 
 	(i)	name the Security Trustee as loss payee (in an amount up to and including the Agreed Value) in respect of a Total Loss and name Lessor, the Lease Manager, the Security Trustee and the Lenders as additional assureds for their respective rights and interests;	
 
 	(ii)	provide that any loss (other than a Total Loss, the proceeds of which in an amount up to and including the Agreed Value will be payable to the Security Trustee) will be settled with Lessee, subject to final prior approval of the Security Trustee and Lessor and will be payable in Dollars to the Security Trustee in an amount up to the Agreed Value for the account of all interests except where the loss does not	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	exceed *****, and neither Lessor nor the Security Trustee has notified the insurers to the contrary, in which case the loss will be settled with and paid to Lessee;	
 
 	(iii)	if separate Hull “ all risks ” and “ war risks ” insurances are arranged, include a 50/50 provision in accordance with market practice;	
 
(f)	all required liability insurances (as specified in (d) above) will:	
 
 	(i)	include each of the Indemnitees as additional assureds for their respective rights and interests, warranted, each as to itself only, no operational interest;	
 
 	(ii)	include a Severability of Interest Clause which provides that the insurance, except for the limit of liability, will operate to give each assured the same protection as if there was a separate policy issued to each assured;	
 
 	(iii)	contain a provision confirming that the policy is primary without right of contribution from any other insurance which may be available to the additional assureds;	
 
(g)	all Insurances will:	
 
 	(i)	provide cover denominated in Dollars and, in relation to liability insurance, in the currency of the claim;	
 
 	(ii)	operate on a worldwide basis subject to such limitations and exclusions as Lessor may agree;	
 
 	(iii)	acknowledge the insurer is aware that the Aircraft is owned by Lessor and is subject to the Mortgage and that the Insurances are subject to the Assignment and the Assignment of Insurances;	
 
 	(iv)	provide that the cover provided to each additional assured shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any person which results in a breach of any term, condition or warranty of the policy PROVIDED that the additional assured so protected has not caused, contributed to or knowingly condoned the said act or omission;	
 
 	(v)	provide that the insurers will waive any rights of subrogation against the additional assureds;	
 
 	(vi)	provide that the additional assureds will have no obligation or responsibility for the payment of any premiums due and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional assureds other than outstanding premiums relating to the Aircraft, any Engine or Part the subject of the relevant claim;	
 
 	(vii)	except in respect of any provision for Cancellation or Automatic Termination specified in the policy or any endorsement thereof, the Insurances may only be cancelled or materially altered in a manner adverse to the additional assureds by the giving of not less than thirty (30) days’ (7 days’ or such other period as is customary in respect of War and Allied Perils) notice in writing. Notice shall be deemed to commence from the date such notice is given by the insurers to Lessee’s designated brokers. It is accepted that such notice will NOT, however, be given at normal expiry date of the Insurances or any endorsement;	
 
 	(viii)	if Reinsurance is a requirement of this Agreement such Reinsurance will (i) be on the same terms as the original Insurances and will include the provisions of this	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	Appendix (ii) provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers’ liability will be to make such payments as would have fallen due under the relevant policy of Reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original Insurance policies in respect of which the then relevant policy of Reinsurance has been effected; and (iii) contain a “cut-through” Clause in the following form (or otherwise, satisfactory to Lessor): “The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the Reinsurances in respect of a total loss or other claim where as provided by the Aircraft Lease Agreement dated 2011 and made between [Lessor] and [Lessee] such claim is to be paid to the person named as designated loss payee under the primary Insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as sole loss payee under the primary Insurances effected by the Reinsured that portion of any loss due for which the Reinsurers would otherwise be liable to pay the Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith”; subject to such provisions not contravening any law of the State of Incorporation; and	
 
 	(ix)	include and insure the indemnity provisions of Clause 11 of this Agreement to the extent of the risks covered by the policies;	
 
(h)	Lessee may maintain Insurances in respect of the Aircraft and any Engines for the purposes of this Agreement which incorporate the terms and conditions of Lloyd’s Airline Finance Endorsement AVN67B (“ AVN67B ”) (or AVN67C) provided that Lessee will ensure that for the purposes of AVN67B (or AVN67C, as the case may be):	
 
 	(i)	this Agreement, the Mortgage, the Assignment and the Assignment of Insurances are identified as “ Contracts ”; and	
 
 	(ii)	the Indemnitees are named as the “ Contract Parties ”;	
 
(i)	for so long as Insurance or Reinsurance is placed in the London market (it being agreed that, without prejudice to the obligations of Lessee pursuant to Part 1 of this Appendix 7, Lessee is not obliged to place any Insurance or Reinsurance in the London market), in the event of any conflict or inconsistency between this Appendix and AVN67B (or its equivalent) (and subject always to compliance by Lessee with (h) above), the relevant provisions of AVN67B (or its equivalent) shall be acceptable to Lessor for so long as, insurance Clause AVN67B (or its equivalent) represents, at the relevant time in the international insurance markets, best aviation insurance practice; and	
 
(j)	all insurances will contain a provision entitling Lessor or any additional assured to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so.	
 
73

APPENDIX 7
PART 3
TOTAL LOSS
 
1	For the purpose of this Agreement, “ Total Loss ” means with respect to the Aircraft (including for the purposes of this definition the Airframe):	
 
(a)	the actual or constructive total loss of the Aircraft (including any damage to the Aircraft which results in an insurance settlement on the basis of a total loss, or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or	
 
(b)	it being destroyed, damaged beyond repair or permanently rendered unfit for normal use for any reason whatsoever; or	
 
(c)	the requisition of title, or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft by the government of the State of Registration, Habitual Base or other competent authority (whether de jure or de facto ), but excluding requisition for use or hire not involving requisition of title; or	
 
(d)	the hi-jacking, theft, condemnation, confiscation, seizure or requisition for use or hire of the Aircraft which deprives any person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days.	
2
 
(a)	If a Total Loss occurs prior to delivery of the Aircraft to Lessee, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement except that Lessor will return to Lessee any amounts of Rent or Deposit received by Lessor under this Agreement; and	
 
(b)	If a Total Loss occurs after delivery of the Aircraft to Lessee, Lessee will pay the Agreed Value to Lessor on or prior to the earlier of:	
 
 	(i)	the day falling sixty (60) days after the Total Loss; and	
 
 	(ii)	the date of receipt of insurance proceeds in respect of that Total Loss.	
Until the Agreed Value and all other amounts which are then due and owing by Lessee to Lessor pursuant to the Transaction Documents and any Other Agreement are received by Lessor, Lessee shall continue to comply with its obligations hereunder to pay Rent. Once the Agreed Value and all other amounts which are then due and payable under this Agreement and the Transaction Documents and which are then due and payable under any Other Agreement have been paid in full to Lessor, Lessee’s obligation hereunder for the payment of Rent shall cease as and from the date on which Lessor receives the Agreed Value and Lessor will pay to Lessee all Maintenance Reserves and any Deposit (plus interest accrued thereon in accordance with this Agreement) then held by Lessor and return any Letter of Credit.
 
3	During any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute a Total Loss:	
 
(a)	the Rent and other charges payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under this Agreement other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition; and	
 
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(b)	so long as no Default has occurred and is continuing, Lessee will be entitled to any hire amounts paid by the requisitioning authority in respect of the Term. Lessee will, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement. Lessor will be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor will apply such compensation in reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, but so that, if any Default has occurred and is continuing, Lessor may apply the compensation or hire in or towards settlement of any amounts owing by Lessee under this Agreement.	
 
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APPENDIX 7A
PART 1
PRE-DELIVERY PROCEDURE
 
1	Upon reasonable notice prior to the Scheduled Delivery Date, Lessor will make the Aircraft available to Lessee for inspection and during such inspection the Lessee shall be permitted to:	
 
(a)	inspect the Aircraft and its conformity with the Delivery Conditions specified herein;	
 
(b)	to perform a maximum power assurance run on the Engines and an acceptance flight of the Aircraft of a maximum duration of two hours (the “ Delivery Check Flight ”) taking off from and landing at the Delivery Location to demonstrate satisfactory operation of the Aircraft and its conformity with the Delivery Conditions set out herein; and	
 
(c)	inspect the Engines by performing a complete hot and cold video borescope inspection (conducted after the Delivery Check Flight) of each Engine at Lessee’s cost.	
 
2	If Lessee notifies Lessor promptly of any non-conformity of the Aircraft with the Delivery Condition observed during the inspection or Delivery Check Flight (and such non-conformity is recorded in the flight log in the case of a demonstration flight), Lessor will, at its cost, correct or procure the correction of such non-conformity as soon as reasonably practicable and make the Aircraft available for re-inspection by Lessee.	
 
3	The Delivery Check Flight shall be performed in accordance with the Manufacturer’s procedures in respect of demonstration flights for used aircraft (or such other procedures acceptable to Lessor and Lessee).	
 
4	The cost of the Delivery inspection (other than costs relating to (i) obtaining insurance for the Delivery Check Flight and (ii) Lessor’s employees or representatives) shall be borne by Lessee.	
 
5	Lessee is responsible for and shall indemnify and hold harmless the Indemnitees from and against all Losses arising from death or injury to any observer representative or any employee of Lessee in connection with any demonstration flight or inspection of the Aircraft by Lessee save for any Losses arising out of or in connection with the gross negligence or wilful misconduct of any Indemnitee.	
 
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APPENDIX 7A
PART 2
DELIVERY CONDITION
 
1	GENERAL CONDITION	
Lessee shall ascertain that the Aircraft meets the conditions set out in the following provisions of this Part 2 of Appendix 7A.
The Aircraft shall:
 
(a)	be in airworthy and in good operating condition, conforming to EASA type design certification; and be clean by scheduled passenger airline standards;	
 
(b)	not have been operated in commercial passenger service since completion of the last C Check in accordance with the latest Maintenance Planning Document accomplished prior to Delivery falling due for accomplishment within 20 months, 6,000 Flight Hours and 4,500 Cycles (whichever is the most limiting factor);	
 
(c)	be free of damages, tears, stains and inappropriate markings and shall comply with relevant EASA fire resistance regulations;	
 
(d)	have installed the full complement of systems, equipment, parts, accessories, furnishings and loose equipment functioning in accordance with the Airbus Aircraft Inspection Report, the Aircraft Type Certificate and their intended use and in compliance with, and eligible for immediate operation under EU OPS 1 equipment standards;	
 
(e)	have a currently valid airworthiness review certificate and certificate of airworthiness for export and a deregistration certificate;	
 
(f)	meet all requirements for, and be eligible for immediate operations in full compliance with FAA Part 129 regulations;	
 
(g)	have no leakage of fuel, oil, hydraulic fluid, or water which exceed the limits laid down in the Manufacturer’s applicable maintenance manual;	
 
(h)	comply with all EASA Airworthiness Directives which require compliance prior to Delivery;	
 
(i)	be in its existing external livery;	
 
(j)	have all signs and decals clean, secure and legible in English;	
 
(k)	have no open, deferred, continued, carry over or placard log book items and have no temporary or time-limited structural repairs. No special or unique inspection or check requirements which are specific to the Aircraft (as opposed to all aircraft of the same model) will exist with respect to the Aircraft;	
 
(l)	have all non-structural repairs, modifications and alterations accomplished in accordance with Airframe Manufacturer’s service bulletins or Airframe Manufacturer’s written approval (with a statement of conformity to type certificate data); and	
 
(m)	have no less than the Aircraft flight manual approved design weights.	
 
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2	COMPONENTS	
 
(a)	Each Flight Hour and Cycle controlled Hard Time Component (other than the Landing Gear and APU) shall have not less than 6,000 Flight Hours and 4,500 Cycles (or 100% of Hard-Time life if this interval is less) of life remaining to the next scheduled removal, in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document (including the “Airworthiness Limitations”). Each calendar controlled Hard Time Component including safety equipment will have not less than 20 months or 100% life remaining (whichever is less) to the next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document. Hard Time Components shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as EASA form 1 or FAA form 8130-3. For this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and which can have life fully restored through appropriate maintenance.	
 
(b)	Each Airframe Life-Limited Component will have not less than 6,000 Flight Hours and 4,500 Cycles and 20 months remaining to next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and Aircraft EASA type certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth. For this purpose “ Airframe-Life Limited Component ” means a component with an ultimate life which cannot be restored through appropriate maintenance.	
 
(c)	Each “ on-condition ” and “ condition-monitored ” component will be serviceable and shall be supported by appropriate certification documentation such as EASA form 1 or FAA form 8130-3 at the point of last installation on the Aircraft if replaced since Aircraft new delivery. The “ condition-monitored ” components shall be supported by an appropriate reliability programme and data in accordance with the Agreed Maintenance Programme.	
 
(d)	The installed components will have total Flight Hours and Cycles since new no more than 110% of the Aircraft total Flight Hours and Cycles since new.	
 
(e)	There shall be no PMA Parts on the Aircraft, save for consumable parts or parts used as consmetic items in the passenger cabin. For these purposes “ consumable parts ” means any non-serialised item of aircraft material which is used only once and is not re-usable, such as (but not limited to) filters, seals, lubricants, cements, compounds, paints, chemicals, dyes and sealants.	
 
3	ENGINES	
Each Engine installed on the Aircraft (and each Engine LLP installed on an Engine) shall comply with the following:
 
(a)	have no less than 4,500 Cycles scheduled life remaining in respect of Engine Life Limited Parts and no more than 110% of the Aircraft total Flight Hours and Cycles since new. Engine LLPs will be supported by certification documentation necessary to demonstrate traceability back to birth;	
 
(b)	shall have accumulated no more than 7,000 Flight Hours and 7,000 Cycles since new;	
 
(c)	shall be serviceable and capable of full rated performance without limitations throughout the entire operating envelop of the Aircraft as defined in the EASA AFM. Each Engine shall have at least 25C sea level hot day exhaust gas temperature (“ EGT ”) margin; and	
 
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(d)	no Engine shall be on watch for any reason requiring any special or out of sequence inspection or reduced interval inspections or exhibit any adverse trends or indicate a rate of performance deterioration that is higher than normal.	
 
4	FUSELAGE, WINDOWS AND DOORS	
 
(a)	The fuselage and doors will be free of major dents and abrasions exceeding the limits in the Manufacturer’s structural repair manual.	
 
(b)	Windows will be free of major delamination and blemishes in excess of Maintenance Manual limits allowing continued in service operation without special inspection or other action and will be properly sealed.	
 
(c)	Doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
(d)	All external repairs for the pressurised fuselage shall have been reviewed in accordance with the latest revision of the Manufacturer’s repair assessment programme (if issued, and otherwise in accordance with the Manufacturer’s published guidelines) applicable at the time of repair and supported by certified documentation evidencing accomplishment in accordance with EASA or FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Manufacturer’s written approval or FAA/EASA STC (Supplemental Type Certificate) or FAA Form 8110- 3/8100-9 approval or otherwise approved by the EASA or FAA.	
 
5	WINGS AND EMPENNAGE	
 
(a)	The wings including nacelles and empennage will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits.	
 
(b)	The wings will be free of fuel leaks in accordance with the maintenance manual allowing continued in service operation without special inspection or other action.	
 
6	INTERIOR AND COCKPIT	
 
(a)	The Aircraft shall be in 180Y configuration.	
 
(b)	The Aircraft interior including cockpit, windows, main cabin and cargo compartments shall have been maintained in accordance with the Agreed Maintenance Programme will be clean by normal industry standards, with all components free of excessive levels of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operation;	
 
(c)	No less than 50 per cent (50%) of aisle seats shall have moveable armrests.	
 
(d)	Interior panels (including overhead bins, sidewall and ceiling panels, bulkheads and cargo compartment panels), and related seals (including window seals) shall be clean and substantially free of holes, cracks, temporary repairs and dents.	
 
(e)	The Aircraft shall have reinforced a cockpit door.	
 
(f)	All signs and decals shall be clean secure and legible in English.	
 
(g)	Safety belts and harnesses shall be free of stains, discolouration, and fraying other than minor stains and discolouration.	
 
(h)	Seats, lavatories and galleys shall be to an international airline standard and shall be fully serviceable, in good condition and repainted as necessary.	
 
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(i)	All panels and nets in the cargo compartment shall be in good condition; all rollers and cargo restraint / nets and moving mechanisms shall be serviceable; and all compartments shall meet the then current the EASA and FAA fire regulations; all doors shall be rigged and functioning properly.	
 
(j)	All interior placards shall be in the English language.	
 
7	LANDING GEAR; WHEELS AND BRAKES	
 
(a)	The Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary and the Landing Gear shall have been stripped and repainted during any Landing Gear Overhaul (if applicable).	
 
(b)	Each installed Landing Gear shall have no less than 4,500 Cycles and 24 months (whichever is the most limiting factor) life remaining to the next scheduled removal in accordance with Agreed Maintenance Programme and the Maintenance Planning Document. Life Limited Part within each installed Landing Gear shall have not more than 110% of the Airframe total Cycles since new and certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The Landing Gear modification standard will meet the manufacturer requirements for an Aircraft maximum take-off weight as at Delivery.	
 
8	AUXILIARY POWER UNIT	
 
(a)	The APU will be serviceable in accordance with the requirements of the Maintenance Manual as evidenced by the Manufacturer’s maintenance manual tests and inspections.	
 
(b)	APU Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The APU will have not accumulated more than 7000 APU Hours of operation since new or last APU Performance Restoration.	
 
9	AIRCRAFT SPECIFICATION	
The Aircraft will have the following specifications:
 
(a)	have the following operational weights: 77t MTOW, 66t MLW, 62.5t MZFW;	
 
(b)	be capable of CATII/CATIII operations;	
 
(c)	have noise level Stage 3;	
 
(d)	have fuel and weight quantity indicators in kg;	
 
(e)	be capable of RVSM operations;	
 
(f)	incorporate SELCAL decoder;	
 
(g)	have VHF 8.33kHz spacing;	
 
(h)	incorporate ACARS/ATSU system;	
 
(i)	incorporate EGPWS/TAWS system;	
 
(j)	be capable of operating to and from airports up to 9200ft;	
 
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(k)	be capable of operating to and from airports with OAT equal to ISA +40°C;	
 
(l)	incorporate GPS navigation system capable for RNP operations;	
 
(m)	incorporate an approved cockpit voice recorder that meets the standards of TSO-C123a or later revision;	
 
(n)	incorporate a fixed 406MHz ELT and a portable 406MHz ELT; and	
 
(o)	incorporate brake cooling fans.	
 
10	AIRCRAFT DOCUMENTS	
The Aircraft shall be delivered with the Aircraft Documents listed in Part 3 of Appendix 7A (other than those documents listed in the Certificate of Acceptance as not delivered).
 
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APPENDIX 7A
PART 3
AIRCRAFT DOCUMENTS AT DELIVERY
 
1	Certificates	
 
(a)	Certificate of Airworthiness;	
 
(b)	Certificate of Registration;	
 
(c)	Aircraft De-Registration Confirmation;	
 
(d)	Export Certificate of Airworthiness issued by the last country of registry;	
 
(e)	Noise Limitation Certificate (AFM page);	
 
(f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	(i)	Certification of compliance with fire blocking requirements as outlined in the applicable regulation;	
 
 	(ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(v)	Carpets;	
 
 	(vi)	Curtains; and	
 
 	(vii)	Interior Surfaces (if refurbished).	
 
2	Manuals	
 
(c)	EASA/FAA Approval Airplane Flight Manual;	
 
(d)	Weight and Balance Control and Supplements (in U.S. units), including last weigh paperwork;	
 
(e)	Operations Manual (Manufacturer’s generic);	
 
(f)	Quick Reference Handbook (Manufacturer’s generic);	
 
(g)	Structural Repair Manual;	
 
(h)	Aircraft Maintenance Manual;	
 
(i)	Component Maintenance Manuals, (CMM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
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 	(i)	Galleys;	
 
 	(ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	(iii)	Lavatories;	
 
 	(iv)	Toilet Assemblies;	
 
 	(v)	Closets;	
 
 	(vi)	Class Dividers (if applicable); and	
 
 	(vii)	Passenger Seats;	
 
(j)	Aircraft Illustrated Parts Catalog (I.P.C.);	
 
(k)	Aircraft Wiring List;	
 
(l)	Aircraft Schematics Manual;	
 
(m)	Engine CMM, IPC;	
 
(n)	APU CMM, IPC;	
 
(o)	Latest operator’s Maintenance Program;	
 
(p)	Latest operator’s Minimum Equipment List;	
 
(q)	Configuration Deviation List; and	
 
(r)	Any other Manual originally delivered by Airbus to the Lessee, Technical documentation, Manuals).	
 
3	Airworthiness Directives Documentation	
 
(a)	The Aircraft shall have all records associated with AD compliance:	
 
 	(i)	A complete and current applicable AD status list of each Airframe, appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	AD number and revision number;	
 
 	(2)	AD title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
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 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected); and	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability.	
 
(b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at redelivery of the Aircraft, and countersigned by Lessor at Delivery or by Lessee at redelivery of the Aircraft. The list shall also be delivered in workable electronic format.	
 
(c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each AD. If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work.	
 
(d)	Exemptions or deviations granted by the FAA or EASA (or other applicable civil aviation authority with jurisdiction over the Aircraft) on AD compliance, including copy of exemption request.	
 
(e)	Items (c) and (d) will be provided in document packages for each AD. Each package will contain all documents relative to the AD/Aircraft combination, and include copies of the AD.	
 
4	Engineering Documentation	
 
(a)	A current list (in paper and workable electronic format) of Airframe, appliance, Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Aircraft, each Engine and the APU. For appliances, only AD related Service Bulletins and Engineering Orders are required.	
 
(b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	(i)	SB number and revision number;	
 
 	(ii)	SB title;	
 
 	(iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	(iv)	Engineering documentation reference;	
 
 	(v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(vi)	Specify terminated or repetitive status;	
 
 	(vii)	Date of initial accomplishment of each portion of such engineering document;	
 
 	(viii)	Date of last maintenance accomplishment, if repetitive;	
 
 	(ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable; and	
 
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 	(x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected).	
 
(c)	EASA or FAA approvals (DER Form 8110-3 or Form 8100-9) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances).	
 
(d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any seller.	
 
(e)	Data packages covering all non-manufacturer/non-FAA/non-EASA designed repairs or alterations, including the submittal to the FAA or EASA for an STC or Form 337, if applicable. The data packages shall include the following:	
 
 	(i)	engineering orders;	
 
 	(ii)	drawings;	
 
 	(iii)	parts lists;	
 
 	(iv)	installation documentation;	
 
 	(v)	engineering analysis as submitted to obtain the STC or Form 337 approval;	
 
 	(vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	(vii)	maintenance program supplements; and	
 
 	(viii)	any and all reference documents referenced by documents contained in this section (4).	
 
(f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts.	
 
(g)	Digital Flight Data Recorder System technical description.	
 
5	Aircraft Maintenance Status Summaries	
 
(a)	Certified current Time in Service (Flight Hours & Cycles);	
 
(b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
(c)	Certified status of system, zonal and structural tasks, including SSI (including last accomplished and next due) and other scheduled tasks as per MPD number (in paper and workable electronic format);	
 
(d)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
(e)	Certified listing of Aircraft, Landing Gear, Engine and APU components status to the extent required by the Air Authority or EASA by P/N – S/N – Description Position –TSO - TSN, CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
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(f)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent EASA or FAA approval;	
 
(g)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any);	
 
(h)	Declaration of Aircraft Accident/Incident Report and major repairs, if any; and	
 
(i)	Structural repairs and damage report (including Dent & Damage Chart) for pressure vessel, and unpressurized areas.	
 
6	Aircraft Maintenance Records	
 
(a)	Aircraft maintenance log from the past 24 months;	
 
(b)	Cabin maintenance log from the past 24 months;	
 
(c)	A Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of A Checks (or equivalent);	
 
(d)	C Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of C Checks (or equivalent);	
 
(e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (or equivalent);	
 
(f)	Last Weight & Balance Report including Schedule;	
 
(g)	Last FDR parameter check;	
 
(h)	Last Test Flight Report; and	
 
(i)	Certified Cross reference list for each MPD task number vs. last operator’s Task Card number including date/time/cycles of last accomplished and next due.	
 
7	Configuration Status	
 
(a)	EASA Approved and certified LOPA;	
 
(b)	Galley Drawings;	
 
(c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
(d)	Inventory Listing of Avionics installed units;	
 
(e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Manual;	
 
(f)	List of applicable STC’s;	
 
(g)	Aircraft Detail Specification; and	
 
(h)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.).	
 
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8	Aircraft Historical Records	
 
(a)	Copy of original Export Certificate of Airworthiness;	
 
(b)	Manufacturer’s AD Report;	
 
(c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
(d)	Manufacturer’s repair/alteration report (at new delivery), or statement that no such report was produced;	
 
(e)	Manufacturer’s SB Report;	
 
(f)	Copies of all Supplemental Type Certificates;	
 
(g)	Last Flight Data Recorder Read-out and calibration standards;	
 
(h)	Weighing reports; and	
 
(i)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, landing gear and APU changes, etc.	
 
9	Engine Records	
 
(a)	Engine log book or Engine Data Submittal;	
 
(b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
(c)	Manufacturer Delivery Documents;	
 
(d)	Complete copies of all historical engine/ module shop visit reports and engine last shop visit report;	
 
(e)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of each module;	
 
(f)	On Wing Repair records;	
 
(g)	Engine Log Book/ Master Records of Installation/Removals;	
 
(h)	Last Borescope Report, including video if available;	
 
(i)	Test Cell Run Report for any shop visit;	
 
(j)	If the Engines have not been involved in an incident, certified Statement that Engines are not involved in an accident;	
 
(k)	Certified “On-Watch” statement;	
 
(l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
(m)	List of repetitive inspections that are not required by AD;	
 
(n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
(o)	Certified Accessory LRU List with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1) for installed LRU’s;	
 
(p)	Last engine run and power assurance report;	
 
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(q)	All Life Limited Parts (“LLPs”) will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total cycles accumulated in each Engine or module;	
 
(r)	Each LLP will have a signed and certified cover page including engine or module total hours, total cycles, part total hours, total cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
(s)	Engine Manufacturer’s or FAA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation; and	
 
(t)	Engine Manufacturer’s, EASA or FAA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
10	APU	
 
(a)	Certified Statement on Status of APU;	
 
(b)	In house modifications (if applicable);	
 
(c)	Approved Release to Service Certification for installed units;	
 
(d)	APU Log Book/ Master Record of Installation/ Removals;	
 
(e)	Complete copies of all APU Shop Visit Reports & reason for removal;	
 
(f)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of the APU;	
 
(g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
(h)	Last APU Borescope Report;	
 
(i)	Last Test Run Report for any shop visit;	
 
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(j)	All Life Limited Parts will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total Cycles accumulated in each Engine or module;	
 
(k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
(l)	APU manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the APU Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation; and	
 
(m)	APU manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the APU Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
11	Components	
 
(a)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/overhaul records for hard time components (whether tracked on an individual component basis or controlled as part of scheduled airframe check); and	
 
(b)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/ overhaul records for on condition and condition monitored components.	
 
12	Landing Gear	
 
(a)	Approved Release to Service Certification for each fully built gear assembly, or major assemblies on each gear, as applicable, including either FAA 8130-3 or JAA/EASA Form 1;	
 
(b)	Last Shop Visit Report; and	
 
(c)	Statement which indicates if the Aircraft operates with BSCU software L4.1 or L4.5.	
 
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13	Repairs	
 
(a)	Manufacturer’s or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
(b)	all repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or EASA approved data. Repairs will not have any time limitations for removal, repair, or replacement. There shall be no special or distinct inspection requirements;	
 
(c)	all repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent;	
 
(d)	all repairs to un-pressured parts of the Aircraft shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent; and	
 
(e)	a repair and dent map shall be provided which includes the following:	
 
 	(i)	Photo (if available) or drawing of the location, type and form of the repair;	
 
 	(ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3 or Form 8100-9 if applicable, material utilized in the repair, DER paperwork, and any engineering data utilized; and	
 
 	(iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire Aircraft to include fuselage, empennage, and wings as well as an additional separate map of all dents on the aircraft.	
 
14	Software	
 
(a)	All software and databases associated with or relating to any electronic or avionic equipment, if any, shall be compliant with the manufacturer’s recommended standards at time of delivery, except for Lessee customized or Lessee proprietary software and databases. Any proprietary software or databases shall be replaced by generic equivalents;	
 
(b)	a certified listing of onboard loadable software and databases to include the following:	
 
 	(i)	ATA chapter;	
 
 	(ii)	nomenclature;	
 
 	(iii)	part number;	
 
 	(iv)	revision date; and	
 
 	(v)	expiration date;	
 
(c)	controlled diskettes or other seller provided physical media as appropriate for directly loading the software onto the Aircraft shall be provided as part of the documentation (subject to express licensing or patent restrictions); and	
 
(d)	procedures for obtaining downloadable software from the internet.	
 
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APPENDIX 8
PART 1
RETURN OF THE AIRCRAFT
 
1	Return	
On the Scheduled Expiry Date or termination of the leasing of the Aircraft under this Agreement Lessee will, unless a Total Loss has occurred, at its expense, redeliver the Aircraft and Aircraft Documents to Lessor at an FAA or EASA approved maintenance facility at a location in Mexico or European Union agreed between Lessor and Lessee or, in absence of any agreement, as specified by Lessor (the “ Redelivery Location ”), in a condition complying with Part of 2 of this Appendix 8, (the “ Return Condition ”) free and clear of all Security Interests and Permitted Liens (other than Lessor Liens) and thereupon, at Lessor’s request cause the Aircraft to be deregistered by the Air Authority.
 
2	Pre-Redelivery Technical Report and Inspection	
No later than six (6) months prior to the Scheduled Expiry Date, Lessee will provide Lessor with a technical report in a form to be agreed between Lessee and Lessor (each acting reasonably) summarising the current specification and maintenance status of the Aircraft, the equipment fitted on the Aircraft and status of the Aircraft Documents and allow Lessor to perform an inspection of the Aircraft and the Aircraft Documents.
 
3	Aircraft Document Review	
At least ten (10) days prior to the Scheduled Expiry Date Lessee shall make all key Aircraft Documents available to Lessor for review.
 
4	Final Inspection	
Immediately prior to Redelivery, Lessee will make the Aircraft available to Lessor and the Security Trustee for a full-systems functional and operational inspection and other types of reasonable inspections based on the Aircraft type, age, use and other known factors with respect to the Aircraft (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with this Agreement. The Final Inspection will take place in conjunction with the Major Check to be carried out prior to Redelivery and in no event less than 2 weeks prior to Redelivery in accordance with this Agreement and be long enough to permit Lessor to:
 
(a)	perform a full inspection of the Aircraft Documents;	
 
(b)	inspect the Aircraft and uninstalled Parts;	
 
(c)	inspect the Engines (at Lessor’s cost), including without limitation (i) a hot and cold section video boroscope inspection of all areas (ii) engine condition runs and (iii) trend monitoring data in accordance with the Engine Manufacturer’s maintenance manual; and	
 
(d)	inspect the APU, including without limitation:	
 
 	(i)	perform an APU condition run; and	
 
 	(ii)	hot and cold section video borescope inspection of all areas.	
 
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Any deviations from the Return Condition will be discussed in good faith between Lessor and Lessee with a view to resolving each discrepancy prior to the Acceptance Flight (as defined in paragraph 5 below).
The cost of the Final Inspection (including the cost of rectifying any deviations from Return Condition but excluding any costs relating to Lessor’s employees or representatives) shall be borne by Lessee and any defects or deficiencies found during such inspection shall be rectified at Lessee’s cost.
 
5	Acceptance Flight	
Immediately prior to the redelivery of the Aircraft, Lessee will carry out for Lessor a demonstration flight in accordance with the Manufacturers’ standard flight operation check flight procedures for in service aircraft (the “ Acceptance Flight ”), or, if agreed to in writing by Lessor, in accordance with an airline acceptance flight procedure, either of which will be for the duration necessary to perform such acceptance flight procedures. The costs of such acceptance flight, up to a maximum duration of two (2) hours, will be on account of Lessee.
 
6	Non-Compliance	
To the extent that, at the time of the Acceptance Flight, the condition of the Aircraft does not comply with this Agreement, Lessee will at Lessor’s option:
 
(a)	immediately rectify the non-compliance and to the extent the non-compliance extends beyond the Expiry Date, the Term will be automatically extended and this Agreement will remain in force until the non-compliance has been rectified; or	
 
(b)	redeliver the Aircraft to Lessor and indemnify Lessor, and provide to Lessor’s satisfaction cash as security for that indemnity, against the cost of putting the Aircraft into the condition required by this Agreement.	
In respect of minor discrepancies in the Return Condition, Lessor and Lessee shall negotiate in good faith with a view to agreeing arrangements whereby Lessee rectifies the discrepancies immediately after redelivery and if such arrangements are agreed between Lessee and Lessor the provisions of paragraph (b) above shall not apply.
 
7	Redelivery	
Simultaneously with redelivery Lessee will provide to Lessor all documents necessary to export the Aircraft from the State of Registration and Habitual Base (including, without limitation, a valid and subsisting export certificate of airworthiness stating the exceptions (if any) and applicable waivers from the Aircraft type certificate for the Aircraft) and required in relation to the deregistration of the Aircraft with the Air Authority.
 
8	Acknowledgement	
Provided Lessee has complied with its obligations under this Agreement, following redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement.
 
9	Maintenance Programme:	
 
(a)	Prior to the Expiry Date and upon Lessor’s request, Lessee will provide Lessor or, subject always to Clause 18, its agents reasonable access to the Agreed Maintenance Programme and the Aircraft Documents in order to facilitate the Aircraft’s integration into any subsequent operator’s fleet.	
 
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(b)	Lessee will, if requested by Lessor to do so, before the return of the Aircraft deliver to Lessor a certified true current and complete copy of the Agreed Maintenance Programme. Lessor agrees that it will not disclose the contents of the Agreed Maintenance Programme to any person or entity except to the extent necessary to monitor Lessee’s compliance with this Agreement and/or to bridge the maintenance programme for the Aircraft from the Agreed Maintenance Programme to another programme after the Expiry Date.	
 
(c)	If at redelivery, there are any missing or incomplete documents or records, Lessee will, at its cost and expense, re-accomplish, or cause to be re-accomplished, the tasks necessary to produce such records prior to redelivery of the Aircraft.	
 
10	Storage	
Upon redelivery of the Aircraft, Lessee shall if given at least thirty (30) days prior written notice by Lessor use its reasonable endeavours to assist Lessor having regard to, inter alia, Lessee’s space and operational requirements and any required approvals, to store, maintain and insure the Aircraft at Lessor’s cost at Lessee’s principal operating base for a period not exceeding sixty (60) days from the redelivery of the Aircraft. For the avoidance of doubt, Lessee shall not be required to store, maintain and insure the Aircraft under this paragraph, if Lessee reasonably determines that to do so would adversely affect its commercial operations.
 
11	Ferry Flight	
Upon redelivery of the Aircraft, Lessee will, at Lessor’s sole risk and expense, and provided that: (a) Lessor has irrevocably and unconditionally accepted Redelivery of the Aircraft as evidenced by the delivery to Lessee of a certificate confirming technical acceptance in form and substance satisfactory to Lessee (acting reasonably) and has executed and delivered in escrow an acknowledgement confirming acceptance of the Aircraft satisfactory to Lessee (acting reasonably) with instructions to release the same to Lessee immediately upon arrival of the Aircraft to the Ferry Flight destination; and (b) Lessee receives not less than thirty (30) days prior written notice from Lessor, fly the Aircraft from the Redelivery Location to such location as Lessor may designate (the “ Ferry Flight ”) (provided that Lessee is licensed and fully authorized to do so by all relevant authorities). Lessee will provide insurance coverage for the duration thereof equivalent to that provided by the policies required upon Appendix 7. The Lessor shall promptly reimburse Lessee the actual costs incurred by Lessee (without any element of Lessee profit or Lessee mark up) in performing such Ferry Flight, including maintaining the insurances in connection therewith, upon presentation of appropriate invoices.
 
12	Fuel	
Immediately after redelivery of the Aircraft to Lessor, an adjustment will be made in respect of fuel on board on the Delivery Date and the Expiry Date at the price then prevailing at the Redelivery Location.
 
13	Rent	
Within five (5) Business Days after:
 
(a)	Redelivery in accordance with and in the condition required by this Agreement; or	
 
(b)	payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date;	
or in each case such later time as Lessor is satisfied that Lessee has irrevocably paid to Lessor all amounts which may then become payable under this Agreement and any Other Agreement, Lessor will:
 
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 	(i)	pay to Lessee the amount of any Rent received in respect of any period falling after the Redelivery Date or payment of the Agreed Value, as the case may be; and	
 
 	(ii)	if so requested by Lessee, return the balance of any Deposit (together with any interest accrued thereon pursuant to this Agreement) then held by Lessor.	
 
14	Warranties	
Lessee shall comply with its obligations under Clause 10.
 
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APPENDIX 8
PART 2
OPERATING CONDITION AT REDELIVERY
On the Expiry Date the Aircraft, subject to fair wear and tear generally, will be in the condition set out below:
 
1	GENERAL CONDITION	
The Aircraft will:
 
(a)	be airworthy and in good operating condition, conforming to FAA or EASA type design certification and be clean by scheduled, passenger airline standards and will be configured in the same configuration as at Delivery (except for the cabin which shall be 174Y) or such other configuration as Lessor may agree;	
 
(b)	be returned with Lessor’s Engines and all Parts installed and with the same equipment as at Delivery, subject to replacements permitted under this Agreement;	
 
(c)	have installed the full complement of systems, equipment, parts, accessories, furnishings and loose equipment as normally installed in the Aircraft for continued regular airline service operating within limits specified in the Manufacturer’s maintenance manual and functioning in accordance with their intended use and in compliance with operations under EU OPS 1, EASA Part M, or its successors equipment standards;	
 
(d)	have a currently valid certificate of airworthiness issued by the Air Authority and a valid export certificate of airworthiness (and a deregistration certificate) issued by the Air Authority to such a country as will be specified by the Lessor and be in a condition qualifying for immediate issue of certificate of airworthiness pursuant to a Lessor specified EASA/EASA member state to EU OPS 1, EASA Part M, or its successors standard;	
 
(e)	have immediately prior to redelivery, completed a C Check and no structural, systems, zonal and CPCP Airframe inspections will be due within the next following 6,000 Flight Hours and 4,500 Cycles and 20 months in accordance with the Maintenance Planning Document;	
 
(f)	be in compliance with all Airworthiness Directives issued by FAA and EASA existing as at the Expiry Date and Mandatory Service Bulletins (which are mandatory or in respect of which Lessee is complying for its other Fleet Aircraft), which require compliance prior to the redelivery;	
 
(g)	if any waivers, alternate means of compliance, dispensations, extensions or carryovers with respect to any Airworthiness Directives or mandatory orders are granted by the Air Authority or permitted by the Agreed Maintenance Programme, the Lessee will nonetheless perform such Airworthiness Directives or mandatory orders as if such waivers, alternate means of compliance, dispensations or extensions did not exist;	
 
(h)	have installed all applicable original equipment manufacturer’s and manufacturer’s service bulletin kits received free of charge by the Lessee that are appropriate for the Aircraft and to the extent not installed, those kits will be furnished free of charge to the Lessor;	
 
(i)	at redelivery, be painted in Lessee’s exterior livery with such painting having been accomplished in accordance with the Airframe Manufacturer’s recommended procedures for painting of aircraft;	
 
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(j)	have all signs and decals clean, secure and legible;	
 
(k)	meet the requirements of ICAO Annex 16, Chapter 3 noise compliance (as stated in the Air Authority issued noise certificate) without waiver or restriction;	
 
(l)	have no open, deferred, continued, carry over or placard log book items and have no temporary or time-limited structural repairs. No special or unique inspection or check requirements which are specific to the Aircraft (as opposed to all aircraft of the same model) will exist with respect to the Aircraft;	
 
(m)	be free of fuel, oil, hydraulic and pneumatic leaks in excess of maintenance manual limits allowing continued in service operation without special inspection. Hydraulic and pneumatic leaks will be within maintenance manual limits for continued operation. Any temporary leak repairs will have been replaced by Permanent Repairs. All oil and hydraulic tanks and reservoirs and systems along with lavatory and potable water tanks and systems shall have been freshly and full serviced;	
 
(n)	have all non-structural repairs, modifications and alterations accomplished in accordance with Airframe Manufacturer’s service bulletins or Airframe Manufacturer’s written approval (with a statement of conformity to type certificate data);	
 
(o)	have no less than the Aircraft flight manual approved design weights; and	
 
(p)	be in compliance with all Maintenance Planning Document structural tasks as single aircraft, without reliance upon the compliance status or structural sampling of the other Fleet Aircraft.	
 
1.2	The Lessee agrees if requested in writing by Lessor at least ninety (90) days prior to Redelivery to perform or cause to be performed, during the Final Inspection, providing such work does not cause the planned grounding of the Aircraft to be extended or for Redelivery to be delayed, any other work reasonably requested by the Lessor to enable the Aircraft to be placed on another maintenance programme and the Lessor shall reimburse the Lessee for the reasonable actual cost of such other work required by the Lessor at the Lessee’s best rate to third parties where the work is performed by Lessee or pay all costs incurred by Lessee for such work where such work is performed by a third party.	
 
2	COMPONENTS	
 
(a)	Each Flight Hour and Cycle controlled Hard Time Component (other than the Landing Gear and APU) shall have not less than 6,000 Flight Hours and 4,500 Cycles (or 100% of Hard-Time life if this interval is less) of life remaining to the next scheduled removal, in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document (including the Airworthiness Limitations). Each calendar controlled Hard Time Component including safety equipment will have not less than 20 months or 100% life remaining (whichever is less) to the next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document. Hard Time Components shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as EASA/EASA form 1 or FAA form 8130-3. For this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and which can have life fully restored through appropriate maintenance.	
 
(b)	Each Airframe Life-Limited Component will have not less than 6,000 Flight Hours and 4,500 Cycles and 20 months remaining to next scheduled removal in accordance with the Agreed Maintenance Programme and the Maintenance Planning Document and Aircraft EASA type certificates and will be supported by certification documentation necessary to	
 
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 	demonstrate traceability back to birth. For this purpose “ Airframe-Life Limited Component ” means a component with an ultimate life which cannot be restored through appropriate maintenance.	
 
(c)	Each “ on-condition ” and “ condition-monitored ” component will be serviceable and shall be supported by appropriate certification documentation such as EASA form 1 or FAA form 8130-3 at the point of last installation on the Aircraft if replaced since Aircraft new delivery. The “ condition-monitored ” components shall be supported by an appropriate reliability programme and data in accordance with the Agreed Maintenance Programme.	
 
(d)	The installed components will have total Flight Hours and Cycles since new no more than 110% of the Aircraft total Flight Hours and Cycles since new.	
 
(e)	There shall be no PMA Parts on the Aircraft, save for consumable parts. For these purposes “ consumable parts ” means any non-serialised item of aircraft material which is used only once and is not re-usable, such as (but not limited to) filters, seals, lubricants, cements, compounds, paints, chemicals, dyes and sealants.	
 
3	ENGINES	
The original Engine or Suitable Replacement Engine (in case of Total Loss) is in the configuration as permitted under this Agreement installed on the Aircraft shall comply with the following:
 
(a)	have no less than 4,500 Cycles scheduled life remaining in respect of Engine LLPs and no more than 110% of the Aircraft total Flight Hours and Cycles since new. Engine Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(b)	will have accumulated no more than 7,000 Flight Hours and 7,000 Cycles since new or last Engine Performance Restoration shop visit.	
 
(c)	shall be serviceable and capable of full rated performance without limitations throughout the entire operating envelop of the Aircraft as defined in the EASA AFM. Each Engine shall have at least 25C sea level hot day EGT margin;	
 
(d)	all items beyond the Engine Manufacturer’s in-service limits will be repaired;	
 
(e)	will have just completed at the Redelivery Location on or about the Redelivery Date an all module, hot and cold section video borescope inspection. Lessee will also have just completed in respect of each Engine an inspection of each magnetic chip detector, laboratory oil sample analysis, main oil screen and oil and fuel filter inspections. Any defects discovered in such inspections which exceed the Engine Manufacturer’s in-service limits shall be corrected at the Lessee’s expense. No Engine shall be “ on watch ” for any reason requiring any special or out of sequence inspection or reduced interval inspections. Each such Engine will comply with and have been maintained in accordance with the Agreed Maintenance Programme without waiver or exceptions. All items beyond the Engine manufacturer’s in-service limits shall be repaired; and	
 
(f)	have trend or condition monitoring data over at least the previous year; if Engine trend or condition monitoring data indicates a rate of acceleration in performance deterioration over at least the previous ninety days, which is higher than normal based on the maintenance experience of the Engine Manufacturer in operating the same model of engines, under similar conditions, the Lessee will, prior to redelivery, cause to be corrected such conditions which are determined to have exceeded tolerances defined for such engines in the Manufacturer’s maintenance manual or are otherwise determined to be causing such performance deterioration.	
 
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4	FUSELAGE, WINDOWS AND DOORS	
 
(a)	The fuselage and doors will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs.	
 
(b)	Windows will be free of major delamination, blemishes and crazing in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and will be properly sealed.	
 
(c)	Doors will be free moving, correctly rigged and be fitted with serviceable seals.	
 
(d)	All external repairs for the pressurised fuselage shall have been reviewed in accordance with the latest revision of the Manufacturer’s repair assessment programme (if issued, and otherwise in accordance with the Manufacturer’s published guidelines) applicable at the time of repair and supported by certified documentation evidencing accomplishment in accordance with EASA or FAA approved data (that is, the Manufacturer’s structural repair manual or the Manufacturer’s service bulletin or the Manufacturer’s written approval or FAA/EASA STC (Supplemental Type Certificate) or FAA Form 8110- 3/8100-9 approval or otherwise approved by the EASA or FAA.	
 
5	WINGS AND EMPENNAGE	
 
(a)	The wings including nacelles and empennage will be free of major dents and abrasions, loose or pulled or missing rivets in excess of maintenance manual limits and all repairs are Permanent Repairs.	
 
(b)	Unpainted surfaces will be in the same condition as at Delivery, fair wear and tear accepted.	
 
(c)	The wings will be free of fuel leaks in accordance with the maintenance manual allowing continued in service operation without special inspection or other action. The fuel tanks will have recently undergone an anti-fungal and biological growth contamination laboratory evaluation, with appropriate correction taken in accordance with the Manufacturer’s maintenance manual in the event excessive levels of contamination are identified.	
 
6	INTERIOR AND COCKPIT	
 
(a)	The aircraft shall be in 174Y configuration or a configuration agreed between the Lessor and the Lessee.	
 
(b)	The Aircraft interior including cockpit, windows, main cabin and cargo compartments shall have been maintained in accordance with the Agreed Maintenance Programme will be clean by normal industry standards, with all components free of excessive levels of foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and rips and ready to be placed into immediate commercial airline operation.	
 
(c)	No less than 50 per cent (50%) of aisle seats shall have moveable armrests.	
 
(d)	The Aircraft shall have reinforced cockpit door.	
 
(e)	The flight deck shall be clean, substantially free of stains and cracks in excess of maintenance manual limits allowing continued in service operation without special inspection or other action and all systems shall function properly.	
 
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(f)	Soft furnishings including galley floor coverings, carpets, curtains, seat covers and seat cushions will be in good condition, freshly cleaned and free of stains and meet EASA/FAA 25.853 and any subsequent EASA/FAA fire resistance regulations.	
 
(g)	Interior panels (including overhead bins, sidewall and ceiling panels, bulkheads and cargo compartment panels), and related seals (including window seals) shall be clean and substantially free of holes, cracks, temporary repairs and numerous dents.	
 
(h)	All signs and decals shall be clean secure and legible.	
 
(i)	Lessee’s logos, insignias and proprietary markings shall be removed and the surface restored or repainted such that no evidence of such items remains.	
 
(j)	Safety belts and harnesses shall be free of stains, discolouration, and fraying other than minor stains, discolouration and fraying.	
 
(k)	Seats, lavatories and galleys shall be to an international airline standard and shall be fully serviceable, in good condition and repainted as necessary.	
 
(l)	All panels and nets in the cargo compartment shall be in good condition; all rollers and cargo restraint / nets and moving mechanisms shall be serviceable; and all compartments shall meet the then current the EASA and FAA fire regulations; all doors shall be rigged and functioning properly; and the compartments shall be freshly painted.	
 
(m)	All interior placards shall be in the English language.	
 
7	LANDING GEAR; WHEELS AND BRAKES	
 
(a)	The Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary and the Landing Gear shall have been stripped and repainted during any Landing Gear Overhaul (if applicable).	
 
(b)	Each installed Landing Gear shall have no less than 4,500 Cycles and 24 months (whichever is the most limiting factor) life remaining to the next scheduled removal in accordance with Agreed Maintenance Programme and the Maintenance Planning Document. Life Limited Part within each installed Landing Gear shall have not more than 110% of the Airframe total Cycles since new and certificates and will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
(c)	The Landing Gear modification standard will meet the manufacturer requirements for an Aircraft Maximum Take-Off Weight as of delivery.	
 
(d)	The brakes will incorporate brake cooling fans.	
 
(e)	The tyres, wheels and brakes will have on average, not less than half of their useful life remaining but in no case, less than 25% of their useful life remaining.	
 
(f)	The wheels and brakes of the Landing Gear shall be manufactured by either Goodrich or Messier.	
 
8	AUXILIARY POWER UNIT	
 
(a)	The APU will be serviceable in accordance with the requirements of the Maintenance Manual as evidenced by Maintenance Manual tests and inspections.	
 
(b)	APU Life Limited Parts will be supported by certification documentation necessary to demonstrate traceability back to birth.	
 
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(c)	The APU will have not accumulated more than 4,000 APU Hours of operation since new or last APU Performance Restoration.	
 
(d)	The APU will have completed a video borescope inspection prior to redelivery and any defects discovered in such inspection, which exceed the APU manufacturer in-service limits, will be corrected.	
 
9	CORROSION	
 
(a)	The Aircraft shall be in compliance with the Manufacturer’s CPCP document, the CPCP requirements of the Maintenance Planning Document and FAA CPCP airworthiness directive requirements.	
 
(b)	The entire fuselage will be substantially free from corrosion and all mild and moderate corrosion found will be adequately cleaned and treated and all severe or exfoliated corrosion shall be repaired in accordance with the Manufacturer’s structural repair manual.	
 
10	WEIGHT AND BALANCE	
The weight and balance Schedule will be accurate, current and represent the Aircraft’s configuration at the time of redelivery.
 
11	FUEL TANKS AND SYSTEMS	
There will be no untreated or uncorrected fungus or corrosion including fungus or corrosion within the fuel tanks and fuel systems, and the Lessee will ensure that all fuel tanks are tested for fungus or other contamination, rectified and treated when applicable and certified clear.
 
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APPENDIX 8
PART 3
AIRCRAFT DOCUMENTS AT REDELIVERY
All Aircraft Documents will be in the condition as on Delivery, amended as required by the terms of this Agreement, by the Air Authority and by the EASA and FAA up to the Redelivery Date.
All of the Aircraft Documents referred to in the preceding sentence will be made available at Redelivery to the Lessor for inspection and will be in accordance with the regulations of the Air Authority.
The Aircraft Documents will include a list of all tasks performed by the Lessee between Delivery and Redelivery.
The following documentation and information is part of the Aircraft and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate. Workable electronic copies should be provided if available.
Bulk storage media (CD, DVD) shall be in an industry standard format, requiring no proprietary or “ fee added ” software to access.
Any costs associated with decustomisation of manuals provided by the Manufacturer’s online service shall be borne by Lessee.
 
(1)	Certificates	
 
 	(c)	Certificate of Airworthiness;	
 
 	(d)	Certificate of Registration;	
 
 	(e)	Aircraft De-Registration Confirmation (if applicable);	
 
 	(f)	Export Certificate of Airworthiness issued by the last country of registry;	
 
 	(g)	Noise Limitation Certificate (AFM page); and	
 
 	(h)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	(i)	Certification of compliance with fire blocking requirements as outlined in the applicable regulation;	
 
 	(ii)	Bottom Seat cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iii)	Back rest cushions (including “ in combination ” burn certification), Passenger and Cabin attendant;	
 
 	(iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	(v)	Carpets;	
 
 	(vi)	Curtains; and	
 
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 	(vii)	Interior Surfaces (if refurbished).	
 
(2)	Manuals	
 
 	(a)	EASA/FAA Approval Airplane Flight Manual;	
 
 	(b)	Weight and Balance Manual and Supplements (in U.S. units), including last weigh paperwork;	
 
 	(c)	Operations Manual (Manufacturer’s generic);	
 
 	(d)	Quick Reference Handbook (Manufacturer’s generic);	
 
 	(e)	Structural Repair Manual;	
 
 	(f)	Aircraft Maintenance Manual;	
 
 	(g)	Component Maintenance Manuals, (CMM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	(i)	Galleys;	
 
 	(ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	(iii)	Lavatories;	
 
 	(iv)	Toilet Assemblies;	
 
 	(v)	Closets;	
 
 	(vi)	Class Dividers (if applicable); and	
 
 	(vii)	Passenger Seats;	
 
 	(h)	Aircraft Illustrated Parts Catalog (I.P.C.) (Operator Customized), if Lessee uses a numbering system which differs from the system used by the Manufacturers, Lessee will provide a certified cross reference listing, which shall include each part number used by Lessee and cross referenced to the Manufacturer’s part number;	
 
 	(i)	Operator part number to manufacturer part number cross reference;	
 
 	(j)	Aircraft Wiring List;	
 
 	(k)	Aircraft Schematics Manual;	
 
 	(l)	Engine CMM, IPC;	
 
 	(m)	APU CMM, IPC;	
 
 	(n)	Latest operator’s Maintenance Program;	
 
 	(o)	Latest operator’s Minimum Equipment List;	
 
 	(p)	Configuration Deviation List; and	
 
 	(q)	Any other Manual originally delivered by Airbus to the Lessee, Technical documentation, Manuals).	
 
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(3)	Airworthiness Directives Documentation	
 
 	(a)	The Aircraft shall have all records associated with AD compliance:	
 
 	(i)	A complete and current applicable AD status list of each Airframe, appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	AD number and revision number;	
 
 	(2)	AD title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected); and	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability.	
 
 	(b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at redelivery of the Aircraft, and countersigned by Lessor at Delivery or by Lessee at redelivery of the Aircraft. The list shall also be delivered in workable electronic format.	
 
 	(c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each AD If the AD is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work.	
 
 	(d)	Exemptions or deviations granted by the FAA or EASA (as applicable) on AD compliance, including copy of exemption request.	
 
 	(e)	Items c) and d) will be provided in document packages for each AD. Each package will contain all documents relative to the AD/Aircraft combination, and include copies of the AD.	
 
(4)	Engineering Documentation	
 
 	(a)	A current list (in paper and workable electronic format) of Airframe, appliance, Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Aircraft, each Engine and the APU. For appliances, only AD related Service Bulletins and Engineering Orders are required.	
 
 	(b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	(i)	SB number and revision number;	
 
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 	(ii)	SB title;	
 
 	(iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	(iv)	Engineering documentation reference;	
 
 	(v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(vi)	Specify terminated or repetitive status;	
 
 	(vii)	Date of initial accomplishment of each portion of such engineering document;	
 
 	(viii)	Date of last maintenance accomplishment, if repetitive;	
 
 	(ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable; and	
 
 	(x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected).	
 
 	(c)	FAA or EASA approvals (as applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances).	
 
 	(d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any seller.	
 
 	(e)	Data packages covering all non-manufacturer/non-EASA/non-FAA-designed repairs or alterations, including the submittal to the FAA or EASA for an STC or Form 337, if applicable. The data packages shall include the following:	
 
 	(i)	engineering orders;	
 
 	(ii)	drawings;	
 
 	(iii)	parts lists;	
 
 	(iv)	installation documentation;	
 
 	(v)	engineering analysis as submitted to obtain the STC or Form 337 approval;	
 
 	(vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	(vii)	maintenance program supplements; and	
 
 	(viii)	any and all reference documents referenced by documents contained in this section (4);	
 
 	(f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts.	
 
 	(g)	Digital Flight Data Recorder System technical description.	
 
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(5)	Aircraft Maintenance Status Summaries	
 
 	(a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	(b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	(c)	Certified status of system, zonal and structural tasks, including SSI (including last accomplished and next due) and other scheduled tasks as per MPD number (in paper and workable electronic format);	
 
 	(d)	Certified status of CPCP (including last accomplished and next due);	
 
 	(e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine LLPs and, to the extent any Engine LLPs have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
 	(f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status to the extent required by the Air Authority or EASA by P/N – S/N – Description Position TSO - TSN, CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	(g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent EASA or FAA approval;	
 
 	(h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any);	
 
 	(i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any; and	
 
 	(j)	Structural repairs and damage report (including Dent & Damage Chart) for pressure vessel, and unpressurized areas.	
 
(6)	Aircraft Maintenance Records	
 
 	(a)	Aircraft maintenance log from the past 24 months;	
 
 	(b)	Cabin maintenance log from the past 24 months;	
 
 	(c)	A Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of A Checks (or equivalent);	
 
 	(d)	C Checks - Complete work card packages, tally sheets, material data sheets and maintenance releases for a complete cycle of C Checks (or equivalent);	
 
 	(e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (or equivalent);	
 
 	(f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	(g)	Last Weight & Balance Report including Schedule;	
 
 	(h)	Last FDR parameter check;	
 
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 	(i)	Last Test Flight Report; and	
 
 	(j)	Certified Cross reference list for each MPD task number vs. last operator’s Task Card number including date/time/cycles of last accomplished and next due.	
 
(7)	Configuration Status	
 
 	(a)	EASA or FAA Approved and certified LOPA;	
 
 	(b)	Galley Drawings;	
 
 	(c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	(d)	Inventory Listing of Avionics installed units;	
 
 	(e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	(f)	List of applicable STC’s;	
 
 	(g)	Aircraft Detail Specification;	
 
 	(h)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	(i)	Electrical Load Analysis documents and data.	
 
(8)	Aircraft Historical Records	
 
 	(a)	Copy of original Export Certificate of Airworthiness;	
 
 	(b)	Manufacturer’s AD Report;	
 
 	(c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	(d)	Manufacturer’s repair/alteration report (at new delivery), or statement that no such report was produced;	
 
 	(e)	Manufacturer’s SB Report;	
 
 	(f)	Copies of all Supplemental Type Certificates;	
 
 	(g)	Last Flight Data Recorder Read-out and calibration standards;	
 
 	(h)	Weighing reports;	
 
 	(i)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, landing gear and APU changes, etc.; and	
 
 	(j)	any other documents as per List of Technical Documents provided by Airbus at new delivery.	
 
(9)	Engine Records	
 
 	(a)	Engine log book or Engine Data Submittal;	
 
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 	(b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	(c)	Manufacturer Delivery Documents;	
 
 	(d)	Complete copies of all historical engine/ module shop visit reports and engine last shop visit report;	
 
 	(e)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of each module;	
 
 	(f)	On Wing Repair records;	
 
 	(g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	(h)	Last Borescope Report, including video if available;	
 
 	(i)	Last Test Cell Run Report for any shop visit;	
 
 	(j)	If the Engines have not been involved in an incident, certified Statement that Engines are not involved in an accident;	
 
 	(k)	Certified “ On-Watch ” statement;	
 
 	(l)	List of “ On-Watch Items ” items requiring repetitive inspections;	
 
 	(m)	List of repetitive inspections that are not required by AD;	
 
 	(n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	(o)	Certified Accessory LRU List with Approved Release to Service Certification (FAA 8130-3 or JAA/EASA Form 1) for installed LRU’s;	
 
 	(p)	Engine Trend Monitoring data for the last 12 months of operation (it being agreed that Lessor and Lessee shall discuss in good faith the cost in connection with the provision of such report prior to Redelivery);	
 
 	(q)	Last engine run and power assurance report;	
 
 	(r)	All Life Limited Parts (“ LLPs ”) will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total cycles accumulated in each Engine or module;	
 
 	(s)	Each LLP will have a signed and certified cover page including engine or module total hours, total cycles, part total hours, total cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	(t)	Engine Manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
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 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation;	
 
 	(u)	Engine Manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
(10)	APU	
 
 	(a)	Certified Statement on Status of APU;	
 
 	(b)	In house modifications (if applicable);	
 
 	(c)	Approved Release to Service Certification for installed units;	
 
 	(d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	(e)	Complete copies of all APU Shop Visit Reports & reason for removal;	
 
 	(f)	Copies of all dirty finger print shop work cards and material data sheets covering the last overhaul of the APU;	
 
 	(g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	(h)	Last APU Borescope Report;	
 
 	(i)	Last Test Run Report for any shop visit;	
 
 	(j)	All Life Limited Parts will have complete life traceability of time consumed (cycles and/or hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total hours and LLP total Cycles accumulated in each Engine or module;	
 
 	(k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA/EASA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	(l)	APU manufacturer’s, EASA or FAA approved data shall be provided for any discrepancies outside of the APU Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
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 	(ii)	Complete description of the discrepancy; and	
 
 	(iii)	Supporting analysis and documentation;	
 
 	(m)	APU manufacturer’s or FAA approved data shall be provided for any repairs not in accordance with the APU Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	(i)	Approval form;	
 
 	(ii)	Complete description of repair; and	
 
 	(iii)	Supporting analysis and documentation.	
 
(11)	Components	
 
 	(a)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/overhaul records for hard time components (whether tracked on an individual component basis or controlled as part of scheduled airframe check); and	
 
 	(b)	Approved Release to Service Certification including either FAA 8130-3 or JAA/EASA Form 1 and last repair/ overhaul records for on condition and condition monitored components.	
 
(12)	Landing Gear	
 
 	(a)	Approved Release to Service Certification for each fully built gear assembly, or major assemblies on each gear, as applicable, including either FAA 8130-3 or JAA/EASA Form 1;	
 
 	(b)	Last Shop Visit Report; and	
 
 	(c)	Statement which indicates if the Aircraft operates with BSCU software L4.1 or L4.5.	
 
(13)	Repairs	
 
 	(a)	Manufacturer’s or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	(b)	All repairs will be in accordance with the Manufacturer’s maintenance manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or EASA approved data. Repairs will not have any time limitations for removal, repair, or replacement. There shall be no special or distinct inspection requirements;	
 
 	(c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent;	
 
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 	(d)	All repairs to un-pressured parts of the Aircraft shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or the EASA equivalent; and	
 
 	(e)	A repair and dent map shall be provided which includes the following:	
 
 	(i)	Photo (if available) or drawing of the location, type and form of the repair;	
 
 	(ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3 or Form 8100-9 if applicable, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	(iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire Aircraft to include fuselage, empennage, and wings as well as an additional separate map of all dents on the aircraft.	
 
(14)	Software	
 
 	(a)	All software and databases associated with or relating to any electronic or avionic equipment, if any, shall be compliant with the manufacturer’s recommended standards at time of delivery, except for Lessee customized or Lessee proprietary software and databases. Any proprietary software or databases shall be replaced by generic equivalents;	
 
 	(b)	A certified listing of onboard loadable software and databases to include the following:	
 
 	(i)	ATA chapter;	
 
 	(ii)	nomenclature;	
 
 	(iii)	part number;	
 
 	(iv)	revision date; and	
 
 	(v)	expiration date;	
 
 	(c)	Controlled diskettes or other seller provided physical media as appropriate for directly loading the software onto the Aircraft shall be provided as part of the documentation (subject to express licensing or patent restrictions); and	
 
 	(d)	Procedures for obtaining downloadable software from the internet.	
 
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APPENDIX 9
PART 1
EVENTS OF DEFAULT
 
(a)	Lessee fails to make any payment of Rent or Agreed Value or Total Loss proceeds on the due date and such payment remains unpaid for three (3) Business Days after the due date therefor; or	
 
(b)	Lessee or the Guarantor fails to make any other payment (other than those specified in (a) above) under any of the Transaction Documents to which it is a party within ten (10) days of Lessor’s written demand for such payment; or	
 
(c)	Lessee fails to comply with any provision of Appendix 7 or any Insurance required to be maintained under that Appendix is cancelled or terminated or notice of cancellation is given in respect of any such Insurance; or	
 
(d)	Lessee or the Guarantor fails to comply with any other provision of any of the Transaction Documents to which it is a party and, if such failure is capable of remedy, the failure continues for thirty (30) days after notice from Lessor to Lessee; or	
 
(e)	any representation or warranty made (or deemed to be repeated) by Lessee or the Guarantor in or pursuant to any of the Transaction Documents to which it is a party or in any document or certificate or statement delivered pursuant thereto is or proves to have been incorrect in any material respect when made or deemed to be repeated and if capable of remedy shall not have been remedied within thirty (30) days after receipt by Lessee of written notice from Lessor; or	
 
(f)	any Financial Indebtedness of Lessee or the Guarantor individually or in the aggregate in excess of ***** is not paid when due or on demand, if payable on demand, or becomes due prior to the date when it would otherwise have become due; or the security for any such Financial Indebtedness becomes enforceable; or	
 
(g)	any consent, authorisation, licence, certificate or approval of or registration with or declaration to any Government Entity in connection with any Transaction Document (including, without limitation):	
 
 	(i)	any authorisation required by Lessee or the Guarantor to obtain and transfer freely Dollars (or any other relevant currency) out of any relevant country; or	
 
 	(ii)	required by Lessee or the Guarantor to authorise, or in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of any of the Transaction Documents to which it is a party or the performance by Lessee or the Guarantor of its obligations thereunder; or	
 
 	(iii)	the registration of the Aircraft; or	
 
 	(iv)	any air operator certificate or concession title,	
is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and in the case of (iv) is not reinstated within thirty (30) days in circumstances where Lessor is satisfied (acting reasonably) that Lessee is using its best endeavours to reinstate the same and the revocation, suspension, cancellation, withdrawal, termination or non renewal is not related to any act, omission or default of Lessee; or
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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(h)	    	
 
 	(i)	Lessee or the Guarantor is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or any responsible officer or shareholder of Lessee or the Guarantor or any person authorised by any of the above to do so, admits the inability of Lessor or the Guarantor to pay its debts as they fall due; or	
 
 	(ii)	Lessee or the Guarantor suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or	
 
(i)	    	
 
 	(i)	any step (including petition proposal or convening a meeting of the shareholders or directors) is taken with a view to considering a resolution to present an application for, or with a view to a composition, assignment or arrangement with any creditors of, or the rehabilitation, administration, custodianship, liquidation, or dissolution of Lessee or the Guarantor or any other insolvency proceedings involving Lessee or the Guarantor; or	
 
 	(ii)	any order is made or resolution passed for any such composition, assignment, arrangement, rehabilitation, administration, custodianship, liquidation consurso mercantil, dissolution or insolvency proceedings, or Lessee or the Guarantor becomes subject to or enters into any of the foregoing; or	
 
 	(iii)	any liquidator, trustee in bankruptcy, judicial custodian, statutory manager, compulsory manager, receiver, síndico, administrator, examiner or the like is appointed in respect of Lessee or the Guarantor or any of its assets;	
but excluding: (X) in each case, any proceedings for the purposes of an amalgamation or reorganisation the terms of which shall have received the prior written approval of Lessor which approval will not be unreasonably withheld or delayed where Lessor is satisfied (acting reasonably) that any such amalgamation or reorganisation will not have an adverse effect on Lessor’s or the Guarantor’s ability to perform its obligations under the Transaction Documents or on the rights of Lessor, the Security Trustee or the Lenders under the Transaction Documents to which Lessee is a party, the Assignment or the Mortgage unless during or because of such amalgamation or reorganisation Lessee or the Guarantor becomes or is declared insolvent and (Y) in the case of any non bona fide petition or action referred to in (i)(i) above taken by a creditor or creditors of Lessee or the Guarantor, Lessor is satisfied (acting reasonably) that each of Lessee or the Guarantor, as applicable, is using its best endeavours to dismiss any such petition or action and the same is dismissed or discharged within sixty (60) days; or
 
(j)	    	
 
 	(i)	an administrative or other receiver or manager is appointed in respect of Lessee or the Guarantor or any part of its assets; or	
 
 	(ii)	Lessee or the Guarantor requests any person to appoint such a receiver or manager; or	
 
 	(iii)	any other steps are taken to enforce any Security Interest over all or any part of the assets of Lessee or the Guarantor; or	
 
 	(iv)	any attachment, sequestration, requisa , distress or execution affects any assets of Lessee or the Guarantor and is not discharged within 14 days or where Lessor is satisfied (acting reasonably) that Lessee or the Guarantor is using its best endeavours to discharge the same, within sixty (60) days; or	
 
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(k)	there occurs in relation to Lessee or the Guarantor any event anywhere which, in the reasonable opinion of Lessor, corresponds with any of those mentioned in paragraphs (h), (i) or (j); or	
 
(l)	Lessee or the Guarantor suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business; or	
 
(m)	Lessee breaches the provisions set out in Appendix 10 paragraph 4 and/or the Guarantor breaches the provisions set out in clause 8.1 of the Guarantee; or	
 
(n)	Lessee or the Guarantor or any other person claiming by or through Lessee or the Guarantor challenges the property rights of Lessor as owner and lessor in respect of the Aircraft or the security interests of the Security Trustee and the Lenders as mortgagee and as assignee under the Mortgage and the Assignment; or	
 
(o)	any event or series of events occurs (including, without limitation, any litigation, arbitration or administrative proceedings are commenced against Lessee or the Guarantor which, if adversely determined would have a material adverse effect on Lessee’s or the Guarantor’s ability to comply with its obligations under the Transaction Documents) which, in the reasonable opinion of Lessor might have a material adverse effect on the ability of Lessee or the Guarantor to comply with its obligations under any of the Transaction Documents to which it is a party; or	
 
(p)	any event of default (howsoever defined) is continuing beyond any applicable grace period under any Other Agreement; or	
 
(q)	    	
 
 	(i)	the issuer of any Letter of Credit fails to make a payment under such Letter of Credit when due; or	
 
 	(ii)	any Letter of Credit is not in full force and effect, or for any reason ceases to constitute the legal, valid and binding obligations of the issuer of such Letter of Credit; or	
 
 	(iii)	the occurrence of the event listed in paragraph (g)(i) above, with respect to the performance by the issuer of such Letter of Credit of its obligations under the relevant Letter of Credit; and/or (y) paragraphs (h), (i), (j) or (k) above apply to the issuer of the relevant Letter of Credit (references in those paragraphs to Lessee being deemed to be to the issuer of such Letter of Credit); and/or (z) the issuer of such Letter of Credit ceases or suspends its business operations; or	
 
 	(iv)	the relevant Letter of Credit is not renewed within the time period specified in paragraph 2 of Appendix 5,	
unless, in the case of paragraphs (q)(ii), (iii) and (iv) above, the relevant Letter of Credit is replaced by a new Letter of Credit complying with the requirements set out in paragraph 2 of Appendix 5 or with cash in an amount equal to the Deposit, in each case, pursuant to and in accordance with the provisions of this Agreement, and each reference in this paragraph (q) to “the issuer” shall include a reference to any confirming bank for the Letter of Credit (if applicable); or
 
(r)	any air traffic control authority (or any authority on their behalf) or any other authority or airport notifies Lessor that there are navigation, landing, airport or similar charges due from Lessee, and such charges remain outstanding for a period of thirty (30) days from the date of such notice or such longer period for payment specified in such notice provided however that the failure to pay the same would give rise to the likelihood of a sale, forfeiture, detention or other loss of the Aircraft or an interest therein or to civil or criminal liability on Lessor, the Security Trustee or any Lender.	
 
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APPENDIX 9
PART 2
 
1	Rights	
If an Event of Default occurs, Lessor may at its option (and without prejudice to any of Lessor’s other rights under this Agreement) at any time thereafter:
 
(a)	accept such repudiation and by notice to Lessee and with immediate effect terminate the letting of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease; and/or	
 
(b)	proceed by appropriate court action or actions to enforce performance of this Agreement or to recover damages for breach of this Agreement; and/or	
 
(c)	either:	
 
 	(i)	take possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require); or	
 
 	(ii)	by serving notice require Lessee to redeliver the Aircraft to Lessor at Dublin Airport, Ireland (or such other location as Lessor may require).	
 
2	Deregistration	
If an Event of Default occurs, Lessor may sell or otherwise deal with the Aircraft as if this Agreement had never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Agreement.
 
3	Default Payments	
If:
 
(a)	an Event of Default occurs, and/or the Aircraft is not redelivered on the Expiry Date or the Aircraft is not delivered to and accepted by Lessee on the Scheduled Delivery Date, other than as a result of any default by Lessor (save where such default arises as a result of any act, omission or default of Lessee or any Manufacturer and/or maintenance contractor). Lessee will indemnify Lessor on demand against any loss (including loss of profit), damage, expense, cost or liability which Lessor may sustain or incur directly or indirectly as a result including but not limited to (but without duplication of amounts referred to in (i) to (iv) below):	
 
 	(i)	any loss of profit suffered by Lessor because of Lessor’s inability to place the Aircraft on lease with another lessee on terms as favourable to Lessor as this Agreement or because whatever use, if any, to which Lessor is able to put the Aircraft upon its return to Lessor, or the funds arising upon a sale or other disposal of the Aircraft, is not as profitable to Lessor as this Agreement;	
 
 	(ii)	any amount of principal, interest, fees or other sums whatsoever paid or payable on account of additional funds borrowed in order to carry any unpaid amount;	
 
 	(iii)	any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any swap, forward interest rate agreement or other financial instrument relating in whole or in part to Lessor’s financing of the Aircraft; and	
 
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 	(iv)	any loss, cost, expense or liability actually sustained or incurred by Lessor owing to Lessee’s failure to redeliver the Aircraft on the date, at the place and in the condition required by this Agreement; and	
 
(b)	Lessor will use reasonable endeavours to mitigate any loss, damages, cost or expenses incurred by it as a result of the foregoing.	
 
115

APPENDIX 10
ASSIGNMENT AND TRANSFER
 
1	Security Interest	
Lessee will not assign, or create or permit to exist any Security Interest over any of its rights under this Agreement.
 
2	Lessor Assignment	
 
(a)	Lessor shall, in connection with the financing of the Aircraft, be entitled to assign all or any of its rights under any of the Transaction Documents by way of security.	
 
(b)	Lessor may at any time assign all or any of its rights under the Transaction Document by way of security to any new or replacement lenders as contemplated by paragraph 4.6 of Appendix 6 of this Agreement provided that no such assignment by way of security shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including any new or replacement lenders or security trustee in the list of Indemnitees. For the avoidance of doubt, the provisions of this paragraph 2(b) shall not apply to any changes in Lenders or any other parties to the Loan Agreement made pursuant to and in accordance with the provisions of the Loan Agreement.	
 
(c)	Lessor may assign all or any of its rights absolutely (otherwise than by way of security) under this Agreement and in the Aircraft to any Permitted Transferee provided that Lessor will have no further obligations under this Agreement following such assignment (except any liability and obligations in respect of any retained rights) but, notwithstanding that assignment, will remain entitled to the benefit of each indemnity under, and subject to the terms of, this Agreement. Lessee will comply with all reasonable requests of Lessor, its successors and assigns in respect of any assignment referred to above. Lessor will promptly notify Lessee of any assignment. No such assignment shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such assignment not been made save where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such assignment and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.	
 
3	Lessor Transfer	
Lessee agrees that Lessor may at any time during the Term transfer its rights and obligations under this Agreement to any Permitted Transferee and upon completion of any such transfer Lessor will be released from and will have no further obligation under this Agreement (except any liability and obligations in respect of any retained rights). Lessee will promptly execute all documents reasonably requested by Lessor to effect, perfect, record or implement any such transfer, and will promptly comply with any other reasonably requests of Lessor, its successors and assigns in respect of any such transfer (including, without limitation, the execution of any novation agreement between Lessor, Lessee and the Permitted Transferee). No such transfer shall impose on Lessee any additional obligation or liability, including, without limitation, Taxes, which exceeds the obligations or liabilities which would have existed had such transfer not been made save
 
116

where such obligation or liability arises due to a change in law or the interpretation or application of any law after the date of such transfer and save that Lessee’s indemnity obligations under this Agreement shall not be deemed to be increased merely as a consequence of including the Permitted Transferee (and its related indemnitees as per the definition of “Indemnitee” set forth in Schedule 1 hereto) in the list of Indemnitees.
For the purposes of paragraphs 2 and 3 above, references to “law” includes any law which at the date of the assignment or transfer, as the case may be, has been enacted but is not yet in force.
 
4	Lessee Transfer and Change of Control	
 
(a)	Lessee shall not convey, transfer, lease or otherwise dispose of all or substantially all of its assets to any entity or person and/or assign or transfer its rights or obligations (whether voluntarily or involuntarily, by merger or consolidation or by operation of law or otherwise) under this Agreement and/or the other Transaction Documents to which it is a party (each a “ Lessee Disposal ”) except to a Successor Entity, and provided that the following conditions are satisfied:	
 
 	(i)	such Successor Entity has a tangible net worth equal to or greater than the tangible net worth of Lessee immediately prior to such Lessee Disposal (determined in accordance with Mexican GAAP or IFRS, whichever methodology is used by Lessee with respect to the preparation of its financial statements immediately prior to such Lessee Disposal);	
 
 	(ii)	such Successor Entity’s obligations under this Agreement and the other Transaction Documents are guaranteed by the Guarantor or any Successor Entity thereof (provided that the tangible net worth of such Successor Entity is equal to or greater than the tangible net worth of the Guarantor immediately prior to such transfer (determined in accordance with Mexican GAAP or IFRS, whichever methodology of Guarantor with respect to the preparation of its financial statements immediately prior to such Lessee Disposal) in substantially the same form of the Guarantee; and	
 
 	(iii)	where any such Lessee Disposal occurs other than in connection with a public offering of Lessee’s shares, the prior written consent of Lessor has been obtained (which consent shall not be unreasonably withheld or delayed).	
 
(b)	Lessee’s entitlement to effect a Lessee Disposal in accordance with paragraph (a) above, shall be further subject to the following conditions:	
 
 	(i)	Lessee shall give Lessor no less than thirty (30) days’ advance written notice of any proposed Lessee Disposal;	
 
 	(ii)	Lessee and/or Successor Entity shall make such recordations and filings with any Government Entity as are reasonably necessary to evidence and/or perfect the right, title and interest of Lessor and the Security Trustee in and to the Aircraft and the Transaction Documents;	
 
 	(iii)	the relevant Successor Entity shall either: (A) execute and deliver, or cause to be executed and delivered to Lessor an agreement in writing, in form and substance satisfactory to Lessor and Security Trustee, which evidences the legal, binding and enforceable assumption by such Successor Entity of Lessee’s rights and obligations under this Agreement (or, if applicable, Guarantor’s rights and obligations under the Guarantee) and/or the other Transaction Documents to which Lessee and/or Guarantor is a party; or (B) if the relevant Successor Entity, by operation of law becomes bound by this Agreement (or, if applicable, the Guarantee) and the other Transaction Documents, such Successor Entity shall	
 
117

 	deliver to Lessor an officer’s certificate confirming the same, and in each case Lessor shall have received a legal opinion in form and substance satisfactory to Lessor from independent counsel satisfactory to Lessor;	
 
 	(iv)	no Default shall have occurred and be continuing at the time of such Lessee Disposal or occur as a result of the same;	
 
 	(v)	in connection with any Lessee Disposal, Lessee or the relevant Successor Entity shall pay all reasonable costs and expenses of Lessor and Security Trustee (including, reasonable and documented legal fees and expenses) in relation to the evidencing and/or perfection of Lessor’s and the Security Trustee’s rights, title and interests in and to the Aircraft and the Transaction Documents; and	
 
 	(vi)	Lessee or the relevant Successor Entity shall provide such other evidence and/or enter into such documents reasonably requested by Lessor and Security Trustee in connection with the evidencing and/or perfection of Lessor’s and the Security Trustee’s rights, title and interests in and to the Aircraft and the Transaction Documents.	
 
(c)	For the purposes of this paragraph 4 of Appendix 10, “ Successor Entity ” means in relation to Lessee and the Guarantor, the surviving entity or person formed by a consolidation or merger of any person with Lessee or Guarantor (as the case may be), provided that such surviving entity or person acquires all of the property, assets and stock of Lessee or the Guarantor (as applicable) and to whom the rights and obligations of Lessee and/or the Guarantor under the relevant Transaction Documents may be transferred in accordance with the provisions of this Agreement or the Guarantee (as the case may be).	
 
(d)	For the avoidance of doubt, the disposal by the shareholders of the Lessee of their respective shares (including any treasury shares which may be deemed to be held by the Lessee) in the Lessee, including, without limitation, pursuant to a public offering shall not constitute a Lessee Disposal.	
 
118

EXHIBIT A
Part 1
ACKNOWLEDGEMENT OF ASSIGNMENT OF GUARANTEE
 
To:	HSH Nordbank AG, as Security Trustee	
Amentum Aircraft Leasing No. Three Limited as Assignor
Airbus A320-200 aircraft bearing manufacturer’s serial number 3543
The Guarantor acknowledges receipt of a notice (the “ Notice ”) of an assignment of even date herewith (the “ Assignment ”) between the Assignor and the Security Trustee and of a copy of the Assignment.
Terms and expressions defined or referred to in the Assignment (whether incorporated by reference to another document or otherwise) shall have the same meanings when used in this Acknowledgement.
 
1	In consideration of the payment to the Guarantor by the Security Trustee of ***** and of other good and valuable consideration, the receipt and sufficiency of which the Guarantor acknowledges, the Guarantor confirms its agreement to the terms of the Assignment and irrevocably undertakes:	
 
(a)	to pay all moneys that may be payable by it pursuant to the Guarantee in accordance with the terms of the Notice and the Guarantee;	
 
(b)	that, if the Security Trustee issues to the Guarantor written notice (“ Enforcement Notice ”) stating that an Enforcement Event has occurred, the Guarantor shall thereafter:	
 
 	(i)	perform, observe and comply with all the Guarantor’s undertakings and obligations under the Guarantee in accordance with the terms thereof in the Security Trustee’s favour and for the Security Trustee’s benefit and to the exclusion of the Assignor;	
 
 	(ii)	if the Security Trustee so requests (and at no cost to the Guarantor, save where such Enforcement Event is attributable to an Event of Default (as defined in the Operating Lease Agreement), enter into a Guarantee with the Security Trustee or the Security Trustee’s nominee on terms identical ( mutatis mutandis ) to the terms of the Guarantee; and	
 
 	(iii)	not recognise the exercise by the Assignor of any of the Assignor’s rights and powers under the Guarantee unless and until requested to do so by the Security Trustee and the Assignor confirms that the Guarantor shall not be in breach of its obligations under the Guarantee to the extent that the Guarantor complies with the provisions of this paragraph 1(c); and	
 
(c)	to deliver to the Security Trustee a copy of any document, written information, notice, request or other communication given by it to the Assignor pursuant to the Guarantee at the same time as to the Assignor. Such copy shall be notified to the Security Trustee in the manner set forth in the notice provisions of clause 9.12 of the Guarantee save that for this purpose the notice details of the Security Trustee are:	

Address:	  	Martensdamm 6	
	  	24103 Kiel	
	  	Germany	
		
Fax:	  	+49 431 900 6 12822	
		
Attention:	  	Restructuring / Transportation	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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2	Notwithstanding anything to the contrary in any Transaction Document, the Guarantor confirms that, without prejudice to any other persons constituting “Indemnitees” as defined in the Operating Lease Agreement and subject to the relevant provisions of the Operating Lease Agreement, the Agent, the Security Trustee, the Arranger, the Lease Manager and any Lender constitute “Indemnitees” under the Operating Lease Agreement and without prejudice to, and independent of, the Assignment and the Security Trustee’s rights thereunder, the Security Trustee on behalf of itself and each of the Agent, the Arranger, the Lease Manager and, each Lender shall be entitled to rely on, make a claim directly under and/or otherwise enforce the Guarantee insofar as the relevant claim and/or other enforcement is in respect of the provisions of the Operating Lease Agreement which are expressed to be in favour of such Indemnitees, as if the Guarantee had been granted in favour of the Indemnitees.	
This Acknowledgement (and any non contractual obligations in connection with the same) is governed by, and shall be construed in accordance with the laws of England.

Yours faithfully	 		

		

 	 	Date:            2011	
for and on behalf of	 		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN S.A.P.I DE C.V.	
 
120

EXHIBIT A
PART 2
ACKNOWLEDGEMENT OF ASSIGNMENT OF LEASE
 
To:	HSH Nordbank AG, as Security Trustee	
Amentum Aircraft Leasing No. Three Limited as Assignor
Airbus A320-200 aircraft bearing manufacturer’s serial number 3543
Lessee acknowledges receipt of a notice of assignment of even date herewith by the Assignor and Security Trustee (“ Notice ”). In consideration of payment to Lessee by the Security Trustee and the Assignor of ***** and of other good and valuable consideration, receipt and sufficiency of which Lessee hereby acknowledges, Lessee irrevocably agrees with the instructions contained in the Notice and as follows:
 
1	it confirms that any conditions required to be satisfied under clause 3.2 of the Operating Lease Agreement have been satisfied or unconditionally and irrevocably waived by Lessee;	
 
2	it shall pay all moneys that may be payable by it pursuant to the Operating Lease Agreement or any other Transaction Document to which the Lessee is a party and shall perform its obligations, in each case in accordance with the terms of the Notice, the Operating Lease Agreement and the Transaction Documents;	
 
3	it acknowledges and agrees that (a) prior to its receipt of an Enforcement Notice the Assignor shall, notwithstanding the assignment to the Security Trustee contained in the Assignment, be entitled to exercise all rights relating to the Relevant Collateral subject to the terms of the Notice and the provisions of the Operating Lease Agreement and other Transaction Documents and (b) after receipt of an Enforcement Notice the Assignor shall pay all moneys payable by it under or in relation to the Relevant Collateral to such account or accounts as the Security Trustee may from time to time designate and the Assignor shall cease to be entitled to exercise any and all rights in or in relation to the Relevant Collateral and the Security Trustee shall exclusively be entitled to exercise any and all rights in or in relation to the Relevant Collateral in accordance with the provisions of the Operating Lease Agreement and the Transaction Documents;	
 
4	it hereby confirms that it consents to the terms of the Assignment, has not received notice of any interest of any third party in the Relevant Collateral or of any security interest (howsoever called) in the Relevant Collateral except as created or contemplated by the Assignment and hereby confirms receipt of a copy of the Assignment;	
 
5	notwithstanding anything to the contrary in any Transaction Document, Lessee confirms that, without prejudice to any other persons constituting “Indemnitees” as defined in the Operating Lease Agreement and subject to the relevant provisions of the Operating Lease Agreement, the Agent, the Security Trustee, the Arranger, the Lease Manager and any Lender shall constitute “Indemnitees” under the Operating Lease Agreement and the Security Trustee on behalf of itself and each of the Agent, the Arranger, the Lease Manager and each Lender shall be entitled to rely on all provisions of the Operating Lease Agreement which are expressed to be in favour of such Indemnitees and to exercise all rights expressed to be granted to such parties thereunder in each case as if the same were set forth in full herein (subject to any limitations or conditions contained therein);	
 
6	it shall permit the Security Trustee to inspect the Aircraft on the same basis as set out in paragraph 2.3 of Appendix 6 and paragraph 4 of Appendix 8 of the Operating Lease Agreement; and	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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7	it acknowledges the restrictions placed on the discretion of the Assignor pursuant to paragraph 3 of the Notice.	
Lessee confirms that it has received a copy of the Assignment together with such other documents and information as it has required in connection therewith.

 	

	
 	
for and on behalf of	
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN S.A.P.I DE C.V.
Date:              2011
 
122

EXHIBIT B
FORM OF CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance relates to the operating lease agreement (the “ Agreement ”) dated [ — ] 2011 and made between Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (the “ Lessee ”) in respect of the one (1) Airbus A320-200 aircraft with manufacturer’s serial number 3543 and having two (2) IAE V2527E-A5 Engines with serial numbers V12938 and V12972 installed thereon (as more particularly described in the Agreement as the “ Aircraft ”).
Unless otherwise defined in this certificate, capitalised words and expressions used in this certificate shall have the same meanings as given to them in the Agreement.
 
1	The Aircraft has been delivered to us together with its Aircraft Documents on [ — ]. Delivery took place on that date at [ — ], at [ — ] hours local time.	
 
2	We confirm that we have inspected the Aircraft in accordance with the Pre-Delivery Procedure and the Aircraft meets all of the requirements necessary for us to accept Delivery of it and that the Lessor has fully performed all of its obligations under the Agreement with respect to the Delivery and this Certificate of Acceptance constitutes conclusive proof of our unconditional and irrevocable acceptance of the Aircraft under the Agreement.	
 
3	We have no rights and/or claims against the Lessor with respect to the Delivery Condition of the Aircraft.	
 
4	The Lessee confirms to the Lessor that, as at the time indicated above, being the Delivery Date:	
 
(a)	the representations and warranties made by the Lessee in Part 1 of Appendix 3 to the Agreement remain true and correct;	
 
(b)	no Default or Event of Default is continuing;	
 
(c)	the Aircraft is insured as required by the Agreement;	
 
(d)	Attached hereto as Annex 1 is the utilisation status of the Aircraft at Delivery;	
 
(e)	[Save for the documents listed in Annex [ — ], the Lessee confirms that all documents listed in Part 3 of Appendix 7A of the Agreement were delivered to it;]	
 
(f)	Attached hereto as Annex [ — ] is a layout of passenger accommodation drawing showing the seating configuration of the Aircraft on Delivery;	
 
(g)	Attached hereto as Annex [ — ] is a list of emergency equipment delivered to Lessee on Delivery;	
 
(h)	Attached hereto as Annex [ — ] is a list of loose equipment delivered to Lessee on Delivery; [and]	
 
(i)	[Attached hereto as Annex [ — ] is a list of open items and discrepancies to be rectified on or before [ — ]].	
 
123

			
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	
		
By:	 	 	
Title:	 	 	
		
By:	 	 	
Title:	 	 	
	
Agreed and acknowledged	
	
AMENTUM AIRCRAFT LEASING NO. THREE LIMITED	
		
By:	 	 	
Title:	 	 	
 
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ANNEX 1
The utilisation status of the Aircraft at Delivery was as follows:
Airframe

Aircraft Type	  		
Manufacturer’s Serial Number	  		
Aircraft Registration	  		
Cabin Configuration	  		
Total Flight Hours Since New	  		
Total Cycles Since New	  		
Engines

Position	 	1	 	2	
Engine Type	 		 		
Serial Number	 		 		
Total Flight Hours Since New	 		 		
Total Cycles Since New	 		 		
APU

APU Model	  		
Serial Number	  		
Total APU Hours	  		
Total APU Cycles	  		
Landing Gear

 	  	LH Main
Landing Gear	  	Nose Landing
Gear	  	Centre body
Landing Gear	  	RH Main
Landing Gear	
Part Number	  		  		  		  		
Serial Number	  		  		  		  		
Total Cycles	  		  		  		  		
 
125

EXHIBIT C
PART 1
AIR TRAFFIC CONTROL LETTER
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
             2011
Dear Sirs
One (1) Airbus A320-200 Aircraft MSN 3543 (the “Aircraft”)
In connection with an aircraft lease agreement dated 2011 between Amentum Aircraft Leasing No. Three Limited, (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG (as security trustee for certain financiers of the Aircraft) at its address for notices being Martensdamm 6, 24103 Kiel, Germany (facsimile: +49 431 900 6 12822; Attention: Restructuring / Transportation),	
(together with the Lessee, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us. Any request which you receive from an Authorised Party shall not be construed by you as evidence that an Event of Default (under and as defined in the Lease Agreement) has occurred and is continuing.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.

Yours faithfully	

For and on behalf of	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	
 
126

EXHIBIT C
PART 2
AIR TRAFFIC CONTROL LETTER
 
TO:	Servicios a la Navegación en el Espacio Aéreo Mexicano	
             2011
Dear Sirs
One (1) Airbus A320-200 Aircraft MSN 3543 (the “Aircraft”)
In connection with an aircraft lease agreement dated 2011 between Amentum Aircraft Leasing No. Three Limited (as lessor) (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., (as lessee) (the “ Lessee ”) (as may be amended, novated or supplemented from time to time) (the “ Lease Agreement ”), we hereby authorise you to issue to:
 
(i)	the Lessor, at its address for notices being 28 Upper Mount Street, Dublin 2, Ireland (facsimile: +353 1 639 8118; Attention: Company Secretary); and	
 
(ii)	HSH Nordbank AG (as security trustee for certain financiers of the Aircraft) at its address for notices being Martensdamm 6, 24103 Kiel, Germany (facsimile: +49 431 900 6 12822; Attention: Restructuring / Transportation),	
(together with the Lessee, the “ Authorised Parties ”),
in each case upon their request, from time to time, a statement of account of all sums due by us to you, as at the date of each such request, in respect of the Aircraft and any other aircraft operated by us.
You shall only regard the authority herein in respect of an Authorised Party as having been revoked upon receipt of written revocation signed by such Authorised Party and us confirming such revocation.

Yours faithfully	

	

 	
For and on behalf of	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	

127

EXHIBIT D
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
DEREGISTRATION AND EXPORT POWER OF ATTORNEY
SPECIAL IRREVOCABLE POWER-OF-ATTORNEY FOR LAWSUITS AND COLLECTIONS AND FOR ACTS OF ADMINISTRATION IN FAVOUR OF EACH OF AMENTUM AIRCRAFT LEASING NO. THREE LIMITED, HSH NORDBANK AG , AND AMENTUM CAPITAL LIMITED TO BE EXERCISED ON BEHALF OF THE GRANTOR OF SAID POWER OF ATTORNEY, CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE ACCORDING TO THE FOLLOWING
CLAUSES:
 
1	Mr. [                             ] in his capacity as LEGAL REPRESENTATIVE of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE (the “ Lessee ”), hereby grants in favour of each of Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”), HSH Nordbank AG and Amentum Capital Limited and each of their respective employees and representatives (with the right of substitution and re-substitution, and with the right to revoke any substitution or re-substitution granted), acting jointly and severally as its true and lawful attorneys (each an “ Attorney ”), a SPECIAL POWER OF ATTORNEY IN AN IRREVOCABLE CHARACTER, as it is a condition under a bilateral contract pursuant to the Lease Agreement entered into between Lessor and Lessee dated [ — ] 2011, (the “ Lease ”), in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic where this power shall be exercised, LIMITED WITH RESPECT TO ITS OBJECT, in order that, including, but not limited, each Attorney may, act on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA PROMOTARA DE INVERSION DE CAPITAL VARIABLE, and pursuant to the Laws of the United Mexican States carry out the necessary procedures, actions and proceedings to obtain the registration and cancellation of the registration and export the aircraft which is subject to the Lease, being one (1) Airbus A320-200 aircraft with manufacturer’s serial number 3543 (the “ Aircraft ”), and the exportation of said Aircraft with any relevant governmental or private authority or entity, including, without limitation, the General Direction of Civil Aviation, the Mexican Aeronautics Registry, the Secretaría de Hacienda y Crédito Público and the Sistema de Administración Tributaria or before any other administrative or judicial authority in Mexico or in any other jurisdiction, or before any customs broker, in order for each Attorney to:	
 
(a)	release, terminate and void any and all interest of the Lessee in respect of the Aircraft;	
 
(b)	deregister and/or consent to the transfer (to any registry inside or outside Mexico or such other jurisdiction in which the Aircraft is, for the time being, registered) of the registration of the Aircraft and all other engines, accessories or items in use at the time of such transfer thereon or therein or otherwise held or used in substitution or replacement therefor in whatsoever manner, such transfer to be on such terms and conditions as may be determined by the Attorney in its absolute discretion;	
 
(c)	represent the Lessee wheresoever and whatsoever in all matters and affairs in connection with the registration, deregistration or re-registration of the Aircraft (including on the	
 
128

 	aircraft register maintained, for the time being, by the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) and/or any interest of the Lessee registered in any personal property security register;	
 
(d)	remove the Aircraft from Mexico or any other jurisdiction and to submit a report to and apply for and obtain permits, licences or approvals from any governmental authorities of Mexico (including, without limitation, the Mexican Aeronautics Registry ( Registro Aeronáutico Mexicano ) and the Dirección General de Aeronáutica Civil ) or any such other jurisdiction with respect to any of the above matters so that the Attorney is empowered to do and perform all things which the Lessee is now or would hereafter be entitled and empowered to do and perform, without any exception, in relation to those matters, all for the account of the Lessee;	
 
(e)	sign, seal (if appropriate), deliver, execute or otherwise perfect any and all documents, agreements, applications, consents or other instruments of whatsoever nature as the Attorney considers in its absolute discretion necessary or desirable in connection with any or all of the matters referred to in (a) to (d) inclusive above; and	
 
(f)	request any and all information with respect to registration status, servicing fees, taxes or any other type of payment status related to any procedures, process, lawsuits, including without limitation, judicial or administrative, which may be necessary to be obtained by each Attorney in connection with the Lease, the Aircraft, any of its engines or its related equipment thereto, from the Dirección General de Aeronáutica Civil (DGAC), Registro Aeronáutico Mexicano (RAM) and Servicios a la Navegación en el Espacio Aéreo Mexicano , (SENEAM).	
 
2	Each Attorney is authorised to delegate to such person or persons as it may choose the exercise of any or all of the powers conferred on such Attorney hereunder.	
 
3	In this Power of Attorney words and expressions defined in the Lease shall have the same meanings when used in this Power of Attorney.	
 
4	The powers conferred by the Lessee in this Power of Attorney are irrevocable pursuant Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, and unconditional and are granted for value and secure proprietary interests, as a condition to a bilateral agreement as stated in paragraph 1 above, in and the performance of obligations owed to the respective donees and shall not terminate unless and until all obligations owing by the Lessee to the Lessor in relation to the Aircraft have been irrevocably discharged in full in writing by Lessor and any and all amounts outstanding, or which may become outstanding, in relation to the Aircraft from the Lessee to the Lessor.	
 
5	No failure or delay on the part of any Attorney to exercise, and no delay in exercising any right, power or privilege under this Power of Attorney shall operate as a waiver thereof, nor shall the exercise of any right, power or privilege under this Power of Attorney preclude any other or further exercise thereof or the exercise of any other right, power or privilege.	
 
6	The powers as set out in this Power of Attorney shall become effective in accordance with the provisions hereof from the date hereof.	
 
7	Any person dealing with an Attorney shall not be required to make any determination or require any further evidence as to whether the Attorney’s rights hereunder have become exercisable.	
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V. has executed this Power of Attorney as a deed on              2011.
 
129

EXHIBIT E
QUIET ENJOYMENT LETTER

From:	  	HSH Nordbank AG	
		
To:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	
	  	Av. Prolongación Paseo de la Reforma 490 Piso 1,	
	  	Col. Santa Fe Pena Blanca,	
	  	01210 Mexico	
Dated:              2011
Dear Sirs
One Airbus A320-200 Aircraft Manufacturer’s Serial Number 3543
 
1	We refer to the aircraft lease agreement dated [ — ] 2011 between Amentum Aircraft Leasing No. Three Limited (the “ Lessor ”) and Concesionaria Vuela Compañía de Aviación S.A.P.I de C.V. (the “ Lessee ”) in respect of the leasing of one Airbus A320-200 aircraft with manufacturer’s serial number 3543 (the “ Aircraft ”) (the “ Lease ”).	
 
2	Words and expressions defined in the Lease shall, unless the context otherwise requires, have the same meanings where used in this letter.	
 
3	In consideration of the Lessee agreeing to enter into the acknowledgement of assignment of the Lease pursuant to a borrower security assignment dated on or about the date hereof between the Lessor (as assignor) and HSH Nordbank AG (as assignee) in relation to the Aircraft (the “ Borrower Security Assignment ”), we hereby undertake that, so long as no Event of Default has occurred and is continuing, neither we (nor anyone lawfully claiming through us) will interfere with the Lessee’s right to quiet use and possession of the Aircraft during the Term. The exercise by us of our rights under, or in connection with, the Lease or any of the other Assigned Documents (as defined in the Borrower Security Assignment) to which the Lessee is a party in accordance with the terms of the Lease or such other Assigned Document, will not constitute such interference.	
 
4	The foregoing undertaking is not to be construed as restricting any of our rights as Security Trustee (i) to sell or otherwise dispose of the Aircraft to such persons and on such terms as we consider appropriate (subject to any requirements or restrictions imposed by applicable law and subject, unless an Event of Default has occurred and is continuing, to the Lease and other Transaction Documents), or (ii) (as assignee of the Lessor’s rights under the Lease) to enforce, in accordance with the provisions of the Lease and the other Transaction Documents, any of the Lessor’s rights under the Lease which are exercisable prior to the occurrence of an Event of Default which is continuing.	
 
5	The rights conferred by this letter are granted only to the Lessee and do not extend to any assignee or sub-lessee of the Lessee.	
 
6	This letter shall be governed by, and construed in accordance with, the laws of England.	
 
130

Please acknowledge your agreement to the terms of this letter by counter-signature below.

Yours faithfully	

For and on behalf of	
	
HSH NORDBANK AG (as Security Trustee)	

Agreed and accepted	

	

 	
For and on behalf of	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I DE C.V.	
 
131

EXHIBIT F
FORM OF MONTHLY REPORT

To:	  	Amentum Aircraft Leasing No. Three Limited	
		
From:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	
		
Aircraft:	  	Airbus A320-200 Aircraft	
	
Manufacturer’s Serial Number 3543	
		
Month of:	  		
AIRFRAME

Aircraft Total Flight Hours Since New:	
	
Aircraft Total Cycles Since New:	
	
Airframe Flight Hours Operated During Month:	
	
Airframe Cycles Operated During Month:	
	
Time Remaining to **     Check:	
ENGINES

Engine Serial Number:	  		  	Engine Serial Number:	  		
				
New Aircraft MSN (if applicable):	  		  	New Aircraft MSN (if applicable):	  		
				
Original Position:	  		  	Original Position:	  		
				
Actual Location:	  		  	Actual Location:	  		
				
Total Flight Hours Since New:	  		  	Total Flight Hours Since New:	  		
				
Total Cycles Since New:	  		  	Total Cycles Since New:	  		
				
Flight Hours During Month:	  		  	Flight Hours During Month:	  		
				
Cycles During Month:	  		  	Cycles During Month:	  		
				
Average Engine Derate During Month:	  		  	Average Engine Derate During Month:	  		
Exact Flight Hours and Cycles since new of the Engine and the Airframe at the moment of removal/installation of Engine during the month are to be recorded.
Note: If an Engine is removed or installed on another Aircraft (subject to the provisions of the Agreement) it must be reported monthly on this form.
APU

APU Serial Number:	
	
Original Position:	
	
Total Flight Hours Since New:	
	
Total Cycles Since New:	
	
Flight Hours Operated During Month:	
	
Cycles Operated During Month:	
 
132

Exact Flight Hours and Cycles since new of the APU and the Airframe at the moment of removal/installation of the APU during the month are to be recorded.

Landing Gear:	  	Flight Hours
Since Overhaul:	  	Flight Hours
Since New:	  	Cycles Since
Overhaul:	  	Cycles Since
New:	
RH Main:	  		  		  		  		
					
Central Main:	  		  		  		  		
					
LH Main:	  		  		  		  		
					
Nose:	  		  		  		  		
Exact Flight Hours and Cycles since new of the Landing Gear and the Airframe at the moment of removal/installation of the Landing Gear during the month are to be recorded.
Details of any engineering modifications or changes during the month:

	

  

	
 	
Details of any Service Bulletins and Airworthiness Directives accomplished for during the month:

	

 

	
 	
Details of any routine checks (A check and above) or replacement of major items (Engine, APU, Landing Gear) performed during the month:

	

 

	

133

Details of any incident, accident and damage to the Aircraft during the month:

	

 

	
 	
Details of any upcoming major upcoming maintenance event (C and above, major modification or replacement of major items as Engine, APU, Landing Gear) scheduled for the next 12 months:

	

 

	
 	
Details of any claims under the Airframe Warranties or the Engine Warranties under *****:

	

 

	

			
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.	

Name:	 	 	
		
Title:	 	 	
		
Date:	 	 	
		
Name:	 	 	
		
Title:	 	 	
		
Date:	 	 	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
134

EXHIBIT G
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (LESSEE)
Mr. [                             ], in his capacity as Legal Representative of Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., hereby grants in favour of                             , with address at                              [            ], [            ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Lease Agreement to be entered into by and between Amentum Aircraft Leasing No. Three Limited and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., or any other document derived or related therewith, including to one (1) Airbus A320-200 with manufacturer’s serial number 3543 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V.
[                             ]
Legal Representative
 
135

EXHIBIT H
[TO BE GRANTED BEFORE A MEXICAN NOTARY PUBLIC IN SPANISH]
PROCESS AGENT POWER OF ATTORNEY (GUARANTOR)
Mr. [                             ], in his capacity as Legal Representative of Controladora Vuela Compañía de Aviación, S.A.P.I de C.V., hereby grants in favour of                             , with address at                              [            ], [            ], a special power of attorney, in accordance with the provisions of Article 2596 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of Article 2554 and Article 2587 of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of Controladora Vuela Compañía de Aviación, S.A.P.I de C.V., any and all notifications, service of process and in general any type of documents, related to any procedures, process, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with the Guarantee to be entered into by and between Amentum Aircraft Leasing No. Three Limited and Concesionaria Vuela Compañía de Aviación, S.A.P.I de C.V., or any other document derived or related therewith, including to one (1) Airbus A320-200 with manufacturer’s serial number 3543 and to all and any other document related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any notice and documentation related to the transactions described above.
Controladora Vuela Compañía de Aviación, S.A.P.I de C.V.
[                             ]
Legal Representative
 
136

Exhibit 10.34
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Execution Form

ENGINE LEASE
COMMON TERMS AGREEMENT

DATED AS OF 28 JUNE, 2007
BETWEEN
GE COMMERCIAL AVIATION SERVICES LIMITED
And
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.

CONTENTS

SECTION	  	PAGE	 	
			
1.	 	INTERPRETATION	  	 	3	  	
2.	 	REPRESENTATIONS AND WARRANTIES	  	 	4	  	
3.	 	CONDITIONS PRECEDENT	  	 	4	  	
4.	 	COMMENCEMENT	  	 	4	  	
5.	 	PAYMENTS	  	 	5	  	
6.	 	MANUFACTURER’S WARRANTIES	  	 	15	  	
7.	 	LESSOR’S COVENANTS	  	 	16	  	
8.	 	LESSEE’S COVENANTS	  	 	17	  	
9.	 	INSURANCE	  	 	25	  	
10.	 	INDEMNITY	  	 	27	  	
11.	 	EVENTS OF LOSS	  	 	28	  	
12.	 	RETURN OF ENGINES	  	 	29	  	
13.	 	DEFAULT	  	 	31	  	
14.	 	TRANSFER	  	 	35	  	
15.	 	MISCELLANEOUS	  	 	36	  	
16.	 	DISCLAIMERS AND WAIVERS	  	 	40	  	
17.	 	BROKERS AND OTHER THIRD PARTIES	  	 	41	  	
							
Schedule 1	  	Definitions	  	 	43	  	
Schedule 2	  	Representations and Warranties	  	 	51	  	
Schedule 3	  	Conditions Precedent	  	 	53	  	
Schedule 4	  	Pre-Delivery Procedures and Delivery Condition	  	 	57	  	
Schedule 5	  	Certificate of Acceptance	  	 	58	  	
Schedule 6	  	Procedures and Operating Condition at Redelivery	  	 	60	  	
Schedule 7	  	Insurance Requirements	  	 	67	  	
Schedule 8	  	Form of Lessee’s Legal Opinion	  	 	71	  	
Schedule 9	  	Events of Default	  	 	74	  	
Schedule 10	  	Form of Incident Statement	  	 	78	  	
Schedule 11	  	Recognition of Rights Agreement	  	 	81	  	
Schedule 12A	  	Form of Power of Attorney	  	 	82	  	
Schedule 12B	  	Form of Irrevocable Deregistration and export request Authorisation	  	 	84	  	
Schedule 13	  	Process Agent Power of Attorney	  	 	85	  	
 
2

ENGINE LEASE
COMMON TERMS AGREEMENT
THIS COMMON TERMS AGREEMENT (this “ CTA ”) is made as of June     , 2007 BETWEEN :
 
(1)	GE COMMERCIAL AVIATION SERVICES LIMITED (“GECAS”); and	
 
(2)	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. (“Lessee”).	
WHEREAS:
 
(A)	From time to time, Lessee or one of its Affiliates may wish to lease commercial aircraft engines and related equipment from GECAS or one of its Affiliates, and GECAS or one of its Affiliates may wish to lease commercial aircraft engines and related equipment to Lessee or one of its Affiliates;	
 
(B)	Each party hereto wishes to provide in one document for certain common terms and conditions, as hereinafter provided in this CTA, that will be applicable, unless otherwise stated, to each such lease referred to in Recital (C); and	
 
(C)	Each such lease transaction will be concluded only on the terms of an agreement entitled “Engine Lease Agreement,” which together with this CTA (which will be incorporated into and become part of such Engine Lease Agreement), will constitute the Lease for the applicable Engine including such related equipment as identified therein, and will also constitute an International Interest within the meaning of the Cape Town Convention recordable at the International Registry, as and to the extent such convention is applicable thereto.	
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
 
1.	INTERPRETATION	
 
1.1	Definitions	
In the Lease, capitalized words and expressions are defined in Schedule 1 ( Interpretation ) or in the Engine Lease Agreement, and the Lease shall be construed in accordance with such Schedule 1 and the Engine Lease Agreement.
 
1.2	Construction	
 
 	(a)	In the Lease, unless otherwise stated, a reference to:	
 
 	(i)	“Lessor,” “Lessee,” “GECAS,” “Owner” or any other Person includes any of their successors and permitted assignees;	
 
 	(ii)	plural concepts shall include the singular and vice versa;	
 
 	(iii)	any document (except this CTA, unless Lessor and Lessee otherwise expressly agree) shall include any changes to that document and any replacement for it;	
 
 	(iv)	a Section or a Schedule is a reference to a section of or a schedule to this CTA or the Engine Lease Agreement as so indicated;	
 
3

 	(v)	any Regulation shall include any changes to that Regulation and any replacement for it;	
 
 	(vi)	an obligation of a Person refers to any obligation that Person has under or in relation to the Lease;	
 
 	(vii)	“includes,” “including”, “include” or similar terms shall not be construed as limiting and shall mean “including, without limitation”; and	
 
 	(viii)	in the event of a conflict between the provisions of the Engine Lease Agreement and the provisions of this CTA, the provisions of the Engine Lease Agreement shall control.	
 
 	(b)	Headings to Sections and Schedules in the Lease are not intended to affect their meaning.	
 
2.	REPRESENTATIONS AND WARRANTIES.	
 
2.1	Lessee’s Representations and Warranties.	
 
 	(a)	Lessee hereby makes the representations and warranties set out in Section 1.1 of Schedule 2 ( Representations and Warranties ) as of the date of execution of the Engine Lease Agreement and as of the Delivery Date thereunder, and Lessee understands that these statements must be true, both when the Engine Lease Agreement is executed and on the Delivery Date thereunder.	
 
2.2	Lessor’s Representations and Warranties.	
 
 	(a)	Lessor hereby makes the representations and warranties set out in Section 1.2 of Schedule 2 ( Representations and Warranties ) as of the date of execution of the Engine Lease Agreement and as of the Delivery Date thereunder, and Lessor understands that these statements must be true, both when the Engine Lease Agreement is executed and on the Delivery Date thereunder.	
 
3.	CONDITIONS PRECEDENT . Lessor need not deliver and start the leasing of the Engine under the Lease unless each of the Lessor Conditions Precedent is satisfied or waived in writing by Lessor. If any of the Lessor Conditions Precedent is not satisfied, or waived by Lessor, on or before the Delivery Date and Lessor, in its absolute discretion, agrees to deliver the Engine to Lessee and to start the leasing of the Engine, Lessee will ensure that such Lessor Condition Precedent is fulfilled within thirty (30) days after the Delivery Date, and Lessor may treat as an Event of Default the failure of Lessee to do so. Lessee need not accept and start the leasing of the Engine under the Lease unless each of the Lessee Conditions Precedent is satisfied or waived in writing by Lessee.	
 
4.	COMMENCEMENT	
 
4.1	Leasing	
 
 	(a)	Subject to Sections 3 ( Conditions Precedent ) and 4.4( Delayed Delivery ), Lessor will lease that Engine to Lessee and Lessee will take that Engine on lease for the Term, which shall commence on the Delivery Date, and which shall be evidenced by Lessee’s execution of (i) an Engine Lease Agreement for such Engine on or before the Delivery Date and (ii) any additional documents as required by such Engine Lease Agreement. Lessor shall notify Lessee of the Scheduled Delivery Date in the Scheduled Delivery Month.	
 
 	(b)	Lessee will be responsible for all risks associated with any loss of or damage to the Engine from the Rent Commencement Date until possession of the Engine is returned to Lessor on the Return Occasion and Lessor executes and delivers to Lessee the acknowledgement contemplated by Section 12.4( Acknowledgement ).	
 
4

4.2	Pre-Delivery Procedure . Lessor and Lessee will follow the Pre-Delivery Procedure. 	
 
4.3	Delivery and Acceptance . After the Pre-Delivery Procedure has been completed and subject to Section 3 ( Conditions Precedent ):	
 
 	(a)	Lessor will tender delivery of the Engine to Lessee at the Delivery Location.	
 
 	(b)	Lessee will accept the Engine and provide evidence of its acceptance by signing and delivering a Certificate of Acceptance to Lessor.	
Lessee’s acceptance of the Engine shall be regarded as absolute, unconditional and irrevocable. After Delivery, Lessee shall bear all risk of loss for the Engine from any cause whatsoever.
 
4.4	Delayed Delivery . Lessor shall not be liable for any Losses suffered or incurred by Lessee, arising from or in connection with any delay in delivery or failure to deliver the Engine (except to the extent such delay in delivery or failure to deliver the Engine is caused by Lessor’s gross negligence or willful misconduct). Lessor, may, but shall have no obligation to, tender delivery of any Engine to Lessee after the Final Delivery Date if such Date is applicable under the Engine Lease Agreement.	
 
5.	PAYMENTS	
 
5.1	Deposit. Lessee shall pay Lessor any Deposit.	
 
5.2	Rental Periods . The first Rental Period will start on the Rent Commencement Date and each subsequent Rental Period will start on the date immediately following the last day of the previous Rental Period. Each Rental Period will end on the date immediately before the numerically corresponding day in the next month, except that:	
 
 	(a)	if there is no numerically corresponding day in that month, it will end on the last day of that month; and	
 
 	(b)	if a Rental Period would otherwise extend beyond the Expiry Date, it will end on the Expiry Date.	
 
5.3	Rent	
 
 	(a)	Time of Payment : Lessee will pay to Lessor or its order Rent in advance on each Rent Date. Lessor must receive value for the payment on each Rent Date. If a Rental Period begins on a day which is not a Business Day, the Rent payable in respect of that Rental Period shall be paid on the Business Day immediately before that day.	
 
 	(b)	Amount : The Rent payable during the Term shall be calculated in accordance with Schedule B of the Engine Lease Agreement.	
 
5.4	Supplemental Rent; Maintenance Adjustment	
 
 	(a)	Amount : lf, under the Engine Lease Agreement, Lessee is required to pay Supplemental Rent or a Maintenance Adjustment or both, Lessee will pay that Supplemental Rent and Maintenance Adjustment, at the rates referred to in the	
 
5

 	Engine Lease Agreement, to Lessor in relation to each calendar month (or part of a month) of the Term, on the fifteenth day following the end of that calendar month (except that the last payment of Supplemental Rent during the Term shall be paid on the Expiry Date).	
 
 	(b)	Adjustment : If, under the Engine Lease Agreement, Lessee is required to pay Supplemental Rent, the Supplemental Rent rates shall be adjusted after the Delivery Date not more frequently than annually (with any such adjustment having retrospective application as appropriate to reflect the provisions of paragraphs (ii) and (iii) below) based on the following:	
 
 	(i)	Annual Supplemental Rent Adjustment : by the Annual Supplemental Rent Adjustment, compounded annually commencing on the first anniversary of the Delivery Date.	
 
 	(ii)	Hour to Cycle Ratio Adjustment : Lessor and Lessee acknowledge that the Engine Supplemental Rent rate and the Engine LLP Supplemental Rent rate are based upon the assumption that the Engine will operate on an Assumed Ratio. If that assumption proves to be incorrect at any time for any period of ***** consecutive months during the Term based upon Lessee’s actual operating experience during such *****, and the hour to cycle ratio differs from the Assumed Ratio by more than ***** during such *****, (i) Lessor shall have the right, upon written notice to Lessee, to adjust the Engine Supplemental Rent rate and the Engine LLP Supplemental Rent rate (in the case of a decrease in the ratio below the Assumed Ratio) and (ii) Lessor, upon written request from Lessee, will make that adjustment (in the case of an increase in the ratio above the Assumed Ratio). Any adjustment shall be based on a table contained in the Engine Lease Agreement. Actual hour to cycle ratios may fall outside the ratios identified in that table. In that case, the actual values shall be determined by extrapolating the closest observed intervals in the table.	
 
 	(iii)	Engine-Thrust-Rating Adjustment : Lessor and Lessee acknowledge that any amounts of Engine Supplemental Rent payable by Lessee are based upon the assumption that the Engines will operate at certain assumed engine thrust ratings. If that assumption proves to incorrect by more than ***** at any time for a period of ***** consecutive months during the Term based upon Lessee’s actual operating experience during such ***** months, Lessor may make, and notify Lessee of, such adjustment as Lessor determines is necessary in its reasonable discretion to maintain the rates of Engine Supplemental Rent at levels which accurately reflect the costs associated with obtaining relevant maintenance services at prevailing industry rates.	
 
 	(iv)	Material Revision to Maintenance Program : If the Maintenance Program is materially revised, Lessor may make, following consultation with Lessee, an adjustment (upwards or downwards as the case may be) which the parties, in good faith, determine is reasonable to maintain the Supplemental Rent at levels which accurately reflect the costs associated with obtaining relevant maintenance services at prevailing industry rates. If the parties are unable to make such determination within thirty (30) days following the commencement of such consultation process, the same shall be submitted for review to an independent, internationally recognized maintenance repair organization for determination and the parties shall he bound by such determination.	
 
6

 	(c)	Lessor’s Property : Lessee acknowledges and agrees that Supplemental Rent is additional rent for the leasing of the Engine and not cash collateral or other collateral security for Lessee’s maintenance obligations under the Lease. Once paid, all Supplemental Rent is the property of Lessor; without prejudice to Lessee’s rights to receive maintenance contributions pursuant to Section 7.2, or its rights to receive the payments described in Section 5.12(d)(iv) in accordance with the provisions of such Section, and it is not refundable to Lessee under any circumstances whatsoever and Lessee has no interest therein whatsoever.	
 
 	(d)	Letter of Credit in Lieu of Cash Supplemental Rent : if Lessee is required to make payments of Supplemental Rent pursuant to the International Aircraft Lease Agreement, then at Lessee’s request, Lessor shall consider with Lessee whether Lessor would be willing to accept Letter(s) of Credit from Lessee complying with Section 5.14 in lieu of requiring Lessee to make cash payments of Supplemental Rent; provided no Default has occurred and is continuing, Lessor shall act reasonably in connection with such consideration and shall not refuse such request on an unreasonable basis.	
 
5.5	Payments . All payments by Lessee to Lessor under the Lease will be made for value on the due date in Dollars and in immediately available funds by wire transfer to the Lessor’s Account.	
 
5.6	Withholding and Tax Credit	
 
 	(a)	Withholding : Lessee must not deduct any amount from any of its payments under the Lease, for or on account of any Taxes, unless it is required by Law to do so, in which case Lessee must:	
 
 	(i)	deduct the minimum amount necessary to comply with the Law;	
 
 	(ii)	pay Lessor an extra amount so that Lessor receives a net amount on the relevant payment date, that is equal to the amount that it would have received if the reduction had not been made. The amount of any such payment to Lessor must take into account the tax treatment of that payment to Lessor applying the principles of Section 5.10( Indemnity Payments – After Tax Basis ) such that Lessor shall be in no worse position than it would have been if the deduction had not applied in the first place;	
 
 	(iii)	pay the Tax to the relevant taxing authority according to relevant Law; and	
 
 	(iv)	obtain a receipt (if one is available) from the relevant taxing authority and give it to Lessor.	
 
 	(b)	Tax Credit : If Lessor, in good faith, determines that it has realized a tax benefit (by way of deduction, credit or otherwise) as a result of any payment which Lessee has made under Section 5.6(a)( Withholding ), Lessor shall pay to Lessee as soon as practicable after the tax benefit has been realized (but not before Lessee has made all payments and indemnities to Lessor required under this Section), an amount which will ensure that (after taking account of the payment itself) Lessor is in no better and no worse position than it would have been if the deduction had not applied.	
Nothing in this Section 5.6(b) shall:
 
 	(i)	interfere with the right of Lessor to arrange its tax affairs in whatever manner it thinks fit; or	
 
 	(ii)	oblige Lessor to disclose any information relating to its Tax affairs or any Tax computations.	
 
7

5.7	Tax Indemnity	
 
 	(a)	General:	
 
 	(i)	Except as provided in Section 5.8 ( Lessor Taxes ), Lessee will on demand pay and indemnify each Tax Indemnitee against any and all Taxes levied or imposed against or upon or payable by such Tax Indemnitee or Lessee and arising from, with respect to or in connection with the transactions pursuant to the Lease, including all Taxes relating or attributable to Lessee, the Lease or the Engine, directly or indirectly, in connection with the importation, exportation, registration, ownership (but only to the extent relating to or attributable to or arising as a result of the possession, operation, use or maintenance of the Engine by Lessee), leasing, subleasing, purchase, delivery, possession, use, operation, repair, maintenance, overhaul, transportation, landing, storage, presence or redelivery of the Engine or any part thereof or any rent, receipts, insurance proceeds, income, indemnification payment or other amounts arising therefrom, or the making of any Equipment Change or the permanent replacement of any Engine.	
 
 	(ii)	All Taxes indemnified pursuant to this Section 5.7(a) shall be paid by Lessee directly to the appropriate taxing authority (to the extent permitted by applicable Law) at or before the time prescribed by applicable Law.	
 
 	(iii)	Any amount payable by Lessee to a Tax Indemnitee pursuant to this Section 5.7(a) ( General ) shall be paid within ten days after receipt of a written demand therefor from the relevant Tax Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable.	
 
 	(b)	Sales and Use Taxes :	
 
 	(i)	Without limiting Section 5.7(a) ( General ) above, Lessee shall pay to Lessor (or, if permitted by applicable Law and if requested by Lessor, Lessee shall pay to the relevant tax authority for the account of Lessor) all sales, use, rental, value added, goods and services and similar taxes (“ Sales Taxes ”) required to be paid to the tax authority of the jurisdiction in which the Delivery Location is situated or to the jurisdiction of the Habitual Base or the State of Incorporation, or to the tax authority of any jurisdiction in which the Engine may be used, operated or otherwise located from time to time, with respect to the lease of the Engine to Lessee, including any “supply” for Sales Tax purposes under the Lease, unless Lessee delivers to Lessor on or prior to the Delivery Date such exemption certificate or other document as may be required by applicable Law to evidence Lessor’s entitlement to exemption from all Sales Taxes imposed by each such jurisdiction with respect to the lease of the Engine.	
 
 	(ii)	Lessee will cooperate with Lessor in connection with the preparation and filing of any exemption application or similar document that is reasonably necessary or desirable under applicable Law to avoid the imposition of any Sales Taxes with respect to the transactions contemplated by the Lease.	
 
 	(iii)	The specific obligations with respect to sales and use taxes set forth in this Section 5.7(b) are in addition to, and are not in substitution for, Lessee’s obligation to indemnify for sales and use taxes pursuant to Section 5.7(a) ( General ).	
 
 	(c)	Lessee will also indemnify each Tax Indemnitee, on an After-Tax Basis, as set forth in the Section entitled “Special Tax Indemnity” in Schedule B of the Engine Lease Agreement, and the provisions of Section 5.9 ( Tax Contest and Information ) shall apply thereto.	
 
8

5.8	Lessor Taxes . Lessee is not required to indemnify any Tax Indemnitee under Section 5.7(a)( General ) to the extent that the Tax arises because of:	
 
 	(i)	the gross negligence or wilful misconduct of such Tax Indemnitee or breach of the Lease or any other agreement delivered in connection herewith or therewith by such Tax Indemnitee (except to the extent that such breach is attributable to the occurrence of a Default by Lessee);	
 
 	(ii)	a Tax liability any Tax Indemnitee has which would have arisen even if the Lease had not been entered into;	
 
 	(iii)	a Tax liability arising in connection with, charged on or calculated with respect to any Tax Indemnitee’s income, profits, gains, capital, net worth or capital stock, or any franchise or similar Taxes imposed on any Tax Indemnitee by any Government Entity in a jurisdiction in which such Tax Indemnitee is organized, maintains an office or other fixed place of business or carries on business through a permanent establishment; but excluding any Tax that is a sales tax or that is imposed by any government or taxing authority of any jurisdiction if and to the extent that such Tax results from (x) the use, operation, presence, registration or location of the Engine or any Part in the jurisdiction imposing the Tax, or (y) the situs of organization, any place of business or any activity of Lessee or any other Person having use, possession or custody of the Engine or any Part in the jurisdiction imposing the Tax; or	
 
 	(iv)	a Tax liability with respect to any period or event occurring (x) prior to the Delivery Date or (y) after the Expiry Date and, in either case, unrelated to Lessor’s dealings with Lessee or to the transactions contemplated by the Lease.	
 
 	(v)	a Tax liability to the extent the same would not have arisen or been incurred but for the failure of a Tax Indemnitee to file proper and timely tax reports, returns, declarations or other documents to the extent required of such Tax Indemnitee (except when such failure is due to Lessee’s failure to request the same and/or to provide timely and accurate information when requested by Lessor);	
 
 	(vi)	a Tax liability arising as a result of or in connection with any failure by a Tax Indemnitee to comply with any certification or other procedure required by governing law of the jurisdiction imposing the Tax as a precondition to any exemption from, or reduction of, such Tax to which such Tax Indemnitee may be entitled, so long as (a) such Indemnitee is eligible to comply with such requirement, (b) such procedure or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and (c) Lessee provides such Tax Indemnitee with written notice of the relevant Tax and other the relevant certification or procedure in sufficient time to allow such Tax Indemnitee to timely comply with such certification or procedure;	
 
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 	(vii)	a Tax liability arising as a result of or in connection with the voluntary or involuntary sale, assignment, transfer or other disposition by a Tax Indemnitee of the Engine or any Part, this Lease, any loan secured by any of the foregoing or any right, title or interest of such Tax Indemnitee in or to any thereof other than as a result of or in connection with (a) the proper exercise of any remedy in connection with any Event of Default, (b) an Event of Loss, or (c) the substitution, replacement, maintenance, repair, modification, improvement or pooling of an Engine or any Part; and	
 
 	(viii)	Taxes imposed on a transferee of a Tax Indemnitee, to the extent the aggregate amount of such Taxes exceeds the aggregate amount of Taxes which would have been imposed on the transferor Tax Indemnitee and indemnified against had there not been such transfer, under applicable laws in effect on the date of such transfer.	
Lessee will also indemnify each Tax Indemnitee, on an After-Tax Basis, as set forth in the Section entitled “Special Tax Indemnity” in Schedule B of the Engine Lease Agreement.
 
5.9	Mitigation : If circumstances are such that Lessor intends to claim indemnification from Lessee under Section 5.7 and no Default has occurred and is continuing, Lessor shall, after consultation with Lessee and to the extent that it can do so lawfully and without prejudice to its own position and/or to Lessee’s indemnity and other obligations, consider and will agree what steps it might reasonably take at Lessee’s expense with a view to mitigating the effect of such circumstances on Lessee.	
 
5.10	Tax Contest . If Lessee disputes the payment of any Taxes payable by Lessor or any Tax Indemnitee or any loss of tax benefits as provided for by the Lease for which Lessee is responsible under the Lease, Lessor will take such action as Lessee may reasonably request at Lessee’s expense to contest that payment or permit Lessee to contest such payment, but neither Lessor nor any Tax Indemnitee will be obliged to take any such action which (x) Lessor or such Tax Indemnitee considers in its good faith determination (i) may prejudice it or (ii) in relation to income taxes, does not have a reasonable prospect of success or (y) involves a sum of less than $25,000.	
 
5.11	Tax Information	
 
 	(i)	If Lessee is required by any applicable Law, or by any Government Entity or any taxing authority having jurisdiction over Lessee, to deliver any report or return in connection with any Taxes for which Lessee would be obligated to indemnify Lessor or any other Tax Indemnitee under the Lease, Lessee will complete the same and, on request, supply a copy of the report or return to Lessor.	
 
 	(ii)	If any report, return or statement is required to be made by Lessor or any other Tax lndemnitee with respect to any Tax for which there is an indemnity obligation of Lessee under the Lease, and Lessee knows of, or reasonably should have known of, such return, report or statement, Lessee will promptly notify Lessor of the requirement and:	
 
 	(y)	if permitted by applicable Law, make and timely file such report, return or statement (except for any report, return or statement that Lessor has notified Lessee that Lessor or any other Tax Indemnitee	
 
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 	intends to prepare and file), prepare such return in such manner as will show Lessor as lessor of the Engine and the ownership of the Engine in Lessor if required or appropriate, and provide Lessor upon request a copy of each such report, return or statement filed by Lessee, or	
 
 	(z)	if Lessee is not permitted by applicable Law to file any such report, return or statement, Lessee will prepare and deliver to Lessor a proposed form of such report, return or statement within a reasonable time prior to the time such report, return or statement is to be filed.	
 
 	(iii)	Lessee will provide such information and documents as Lessor may reasonably request to enable Lessor or any other Tax Indemnitee to comply with its tax filing, audit and litigation obligations. Lessor or any other Tax Indemnitee will provide such information or documents, at Lessee’s expense, that Lessee does not otherwise have as Lessee may reasonably request and which are necessary to enable Lessee to comply with its obligations under the Lease (including Sections 5.6 ( Withholding and Tax Credit ) and 5.7 ( Tax Indemnity ) of the CTA and Schedule B of the Engine Lease Agreement).	
 
5.12	Indemnity Payments - After-Tax Basis . The amount of any payment made under Section 5.7 ( Tax Indemnity ), Section 5.21 ( Expenses ) or Section 10 ( Indemnity ) to or for the benefit of any Indemnitee, shall include such amount as may be necessary to hold such Indemnitee harmless on an After-Tax Basis from all Taxes required to be paid by such Indemnitee with respect to such payment or indemnity (including any payments pursuant to this Section 5.12).	
 
5.13	Lessor Obligations Following Expiry Date . Within ten (10) Business Days after the Expiry Date (unless Lessor reasonably determines that there is a material likelihood of any payment made under the Lease being avoided (or otherwise rescinded) under Section 547 of the United States Bankruptcy Code of 1978, as amended, or any similar occurrence under any analogous provision of applicable United States federal or state Law, in which case such period shall be extended to ninety-one (91) days) following:	
 
 	(a)	redelivery of the Engine to Lessor in accordance with and in the condition required by the Lease; or	
 
 	(b)	payment to Lessor of the Agreed Value following an Event of Loss after the Delivery Date;	
or in each case such later time as Lessor is reasonably satisfied that Lessee has irrevocably paid to Lessor all amounts which may then be due and payable under the Lease and the Other Agreements and in each case so long as no other Default has occurred and is continuing:
 
 	(i)	Lessor will pay to Lessee the balance of the Deposit (if any);	
 
 	(ii)	Lessor will pay to Lessee the amount of any Rent received in respect of any period falling after the date of redelivery of the Engine or payment of the Agreed Value, as the case may be;	
 
 	(iii)	Lessor will return to Lessee or cancel any Letter of Credit; and	
 
 	(iv)	In the case of an Event of Loss, the amount by which any Supplemental Rent paid by Lessee in respect of the Engine under Section 5.4 exceeds any maintenance contributions paid by Lessor in respect of the Engine under Section 7.2.	
 
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5.14	Net Lease	
The Lease is a net lease. The Lessee’s obligation to pay Rent and to perform all of its other obligations under the Lease is absolute and unconditional no matter what happens and no matter how fundamental or unforeseen the event, including any of the following: (a) any right of set-off, counterclaim, recoupment, defense or other right which either party to the Lease may have against the other (including any right of reimbursement) or which Lessee may have against the Manufacturer, any manufacturer or seller of or any Person providing services with respect to the Engine or any Part or any other Person, for any reason whatsoever; (b) any unavailability of the Engine for any reason, including a requisition of the Engine or any prohibition or interruption of or interference with or other restriction against Lessee’s use, operation or possession of the Engine (whether or not the same would, but for this provision, result in the termination of the Lease by operation of Law); (c) any lack or invalidity of title or any other defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind or nature of the Engine for any particular use or trade, or for registration or documentation under the Law of any relevant jurisdiction, or any Event of Loss in respect of or any damage to the Engine, provided always that Lessee shall not be required to pay any Rent or Supplemental Rent for any subsequent period following the occurrence of an Event of Loss in respect of the Aircraft and receipt by Lessor of the Agreed Value; (d) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against Lessor, Lessee or any other Person; (e) any invalidity or unenforceability or lack of due authorization of, or other defect in, the Lease; (f) any Security Interests or Taxes; and/or (g) any other cause or circumstance which but for this provision would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under the Lease. Lessee acknowledges and agrees that it has used its own judgement in selecting the Engine, and has not relied on Lessor or on any information supplied by Lessor, that Lessor is not a manufacturer of or dealer in engines and that Lessor has all of the rights and benefits of a lessor under a lease to which Section 2A-407 of the UCC applies as provided in such Section 2A-407.
Except as expressly set forth elsewhere in the Lease, Lessee hereby waives, to the extent permitted by applicable Law, any and all right which it may now have or which at any time hereafter may be conferred upon it, by statute or otherwise, to terminate, abate, cancel, quit, reduce, defer, suspend or surrender the Lease or the Engine or any obligation imposed upon Lessee under the Lease (including payment of Rent or Supplemental Rent),
Each payment of Rent or Supplemental Rent made by Lessee shall be final. Lessee will not seek to recover all or any part of any payment of Rent or Supplemental Rent for any reason whatsoever except manifest error.
Nothing in this Section 5.14 will be construed or otherwise deemed to limit Lessee’s right to institute separate legal proceedings against Lessor in the event of Lessor’s breach of the Lease subject to the provisions of Sections 7.1 and 16.3 of this Common Terms Agreement, or to limit Lessee’s rights and remedies against any other Person.
 
5.15	Further Provisions regarding Deposit	
 
 	(a)	lf, under the Lease, Lessee is required to pay a Deposit, Lessee hereby grants a security interest in the Deposit to Lessor and the remaining provisions of this Section shall apply. Lessee agrees that Lessor shall be entitled to commingle the Deposit with Lessor’s general or other funds, Lessor will have no obligation to pay any interest thereon and Lessor will not hold any such funds as agent or in trust for Lessee or in	
 
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 	any similar fiduciary capacity. In this regard, Lessee acknowledges and agrees that it is not located in the State of New York within the meaning of Section 7-101 1-c. (b) of the New York General Obligations Law and, therefore, the requirements of Section 7-101 of the New York General Obligations Law to the effect that Lessor hold the Deposit in a separate, interest bearing account do not apply.	
 
 	(b)	If Lessee fails to comply with any provision of the Lease or the Other Agreements, or any Default shall have occurred and be continuing, in addition to all rights and remedies accorded to Lessor elsewhere in the Lease or under Law in respect of the Deposit, Lessor may immediately or at any time thereafter, without prior notice to Lessee, apply all or part of the Deposit in or towards the payment or discharge of any matured obligation owed and outstanding by Lessee or any Affiliate of Lessee under the Lease or the Other Agreements, in such order as Lessor sees fit, and/or exercise any of the rights of set-off described in Section 5.20 ( Set-Off ) against all or part of the Deposit.	
 
 	(c)	If Lessor exercises the rights described in Section 5.13(b) ( Application of Deposit ), Lessee shall, following a demand in writing from Lessor, immediately restore the Deposit to the level at which it stood immediately prior to such exercise.	
 
5.16	Letter of Credit	
 
 	(a)	If, under the Lease, Lessee is required or elects to provide Lessor with a Letter of Credit, such Letter of Credit will be issued and payable by a Pre-Approved Bank or another bank acceptable to Lessor in its sole and absolute discretion and in form and substance acceptable to Lessor in its sole and absolute discretion; provided, however, that if the form of the Letter of Credit is substantially in the form of Schedule 13, then such form will be acceptable to Lessor, acting reasonably.	
 
 	(b)	The Letter of Credit may have a validity period or periods ending prior to the Required LC Expiry Date, provided that (i) the Letter of Credit shall, in each case, be renewed, extended or reissued and delivered to Lessor not later than 30 Business Days prior to its expiry (if not renewed or extended in such time, Lessor may draw on the Letter of Credit); and (ii) a Letter of Credit shall remain in force at all times up to the Required LC Expiry Date unless replaced by a cash deposit in the amount required pursuant to the terms of the Lease. Lessee acknowledges and agrees that its failure to renew, extend or reissue the Letter of Credit when and as provided in the foregoing sentence shall constitute an immediate Event of Default, which shall entitle Lessor to immediately draw upon the Letter of Credit in the full amount thereof.	
 
 	(c)	If at any time during the Term, Lessor determines in its sole and absolute discretion that the current issuing or confirming bank for the Letter of Credit is no longer an acceptable issuing or confirming bank (whether by virtue of a material adverse change in its financial condition, a decrease in any credit rating of its long-term unsecured debt obligations, or for any other reason), Lessor shall notify Lessee of such fact and Lessee shall within ten (10) Business Days after the receipt of any such notice from Lessor cause the Letter of Credit to be replaced by a Letter of Credit issued by another bank acceptable to Lessor in its sole and absolute discretion and (if requested by Lessor in its sole and absolute discretion) that such replacement Letter of Credit is confirmed by another bank acceptable to Lessor in its sole discretion. In exercising its sole discretion in this Section 5.16(c), Lessor shall act reasonably at all times.	
 
 	(d)	If Lessor makes a drawing under the Letter of Credit, Lessee shall, following receipt of a demand in writing by Lessor, immediately cause the maximum amount available for drawing under the Letter of Credit to be restored to the level required under the Lease.	
 
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5.17	Guarantee . If, under the Engine Lease Agreement, Lessee is required to provide Lessor with a Guarantee, Lessee will on or prior to the Delivery Date provide Lessor with the Guarantee.	
 
5.18	Late Payment Interest . If Lessee fails to pay any amount due and payable under the Lease on the due date, Lessee will pay on demand from time to time to Lessor interest (both before and after judgement) on that amount, from the due date to the date of payment in full by Lessee to Lessor, at the Interest Rate. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed in the month, assuming a 30 day month and a 360 day year.	
 
5.19	Currency	
 
 	(a)	Except for Losses suffered or incurred by Lessor, which shall be payable by Lessee to Lessor in the currency and in the amount in which such Loss is suffered or incurred, all amounts payable to Lessor under the Lease shall be payable in Dollars in New York and payment in Dollars in New York is of the essence. Lessee must indemnify Lessor against any Loss Lessor suffers if:	
 
 	(i)	Lessor receives an amount relating to Lessee’s obligations in a different currency from that in which payments should be made under the Lease; or	
 
 	(ii)	Lessee pays a judgement or claim in a different currency from that in which payments should be made under the Lease.	
 
 	(b)	Lessee waives any right to pay any amount under the Lease in a currency which is different from the currency provided in the Lease. Notwithstanding any such receipt, judgement or claim described in Section 5.17(a), Lessee shall have a separate obligation to pay, and Lessor shall have a separate claim against Lessee for, amounts to be indemnified by Lessee under this Section 5.17.	
 
5.20	Certificates . Except where expressly provided in the Lease, any certificate or determination by Lessor properly made in accordance with the provisions of this Lease, as to any applicable rate of interest or as to any other amount payable under the Lease (other than Rent) will, in the absence of manifest error, be presumed to be correct.	
 
5.21	Appropriation . If any sum paid or recovered by Lessor in respect of the liabilities of Lessee under the Lease is less than the amount then due, Lessor may apply that sum to amounts due under the Lease in such proportions and order and generally in such manner as Lessor may determine in its sole discretion.	
 
5.22	Set-off . Lessor may, without notice, set-off any obligations owed by Lessee under the Lease or under the Other Agreements against any obligation Lessor or any of its Affiliates owes Lessee under the Lease or under the Other Agreements, regardless of the place of payment or currency. Promptly after making any such set-off, Lessor shall notify Lessee thereof, but failure to give such notice shall not affect the effectiveness of any such set-off. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in New York. If the amount of an obligation is unknown, Lessor may, in good faith and using reasonable assumptions, estimate the amount. Any difference between the estimated obligation and the actual obligation will be paid by either Lessor or Lessee, as appropriate, when the amount becomes known.	
 
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5.23	Expenses . Lessee will pay to Lessor promptly, after receipt of written demand, all reasonable and documented expenses (including all legal fees and expenses and the fees and expenses of other professional advisers) that the Lessor suffers or incurs:	
 
 	(a)	to deal with any amendments, extensions, consents or waivers that are required in connection with the Lease (but excluding any expenses incurred by Lessor or Owner in connection with any change in the ownership or financing of the Engine or a change in the Lease that is otherwise requested by Lessor or Owner, and in each case unrelated to any consent, waiver or amendment requested by Lessee or any other act or omission of Lessee) or to deal with any replacement of any Engine or Part (except for the replacement of an Engine by or at the request of Lessor prior to the Delivery Date);	
 
 	(b)	to act upon any advice and obtain assistance to perfect the Lease in the State of Registry, the State of Incorporation and under the Cape Town Convention to the extent applicable (and any other appropriate place); and	
 
 	(c)	in contemplation of, or otherwise in connection with, the enforcement or preservation of any of Lessor’s rights under the Lease (including under Section 10) ( Indemnity )) or in respect of the repossession of any Engine.	
All amounts payable pursuant to this Section 5.23 will be paid in the currency in which they are incurred by Lessor.
 
5.24	Other Expenses . Lessee will promptly pay when due all Taxes, other than any Lessor Taxes described in Section 5.8, which it is required to pay and all other amounts of any nature imposed by any Government Entity with respect to the Engine and/or the Lease except to the extent that the applicability, imposition and/or amount of any such Tax is being contested in good faith by appropriate proceedings in respect of which adequate reserves have been provided by Lessee and non-payment or contest of which does not give rise to any material risk of the Engine or any interest therein being sold, forfeited or otherwise lost or any risk of criminal liability on the part of Lessor or Owner.	
 
6.	MANUFACTURER’S WARRANTIES	
 
 	(a)	So long as no Event of Default has occurred which is continuing, Lessor shall, with effect from the Delivery Date, assign to Lessee and authorize Lessee to exercise during the Term all manufacturers’ warranties in relation to the repair or remedy of any defect in the Engine (including compensation for loss of use of the Engine) and other product support for the Engine to the extent that such warranties and product support are assignable by Lessor. In furtherance of the foregoing assignment, Lessor shall take such actions, at Lessor’s cost and expense, as Lessee may reasonably request to make such warranties and product support available to Lessee. Lessee will give Lessor prompt written notice of any warranty claim that is settled with Lessee on the basis of a cash payment. To the extent that any manufacturer warranties are assignable in respect of the Engine, Lessor shall cause the applicable manufacturer of the Aircraft or Engines, as the case may be, to give their respective consent to such assignment on the Delivery of the Engine.	
 
 	(b)	If an Event of Default has occurred and is continuing Lessor may immediately recover from Lessee the proceeds of any warranty claims previously paid to Lessee to the extent that such claims relate to any defect in the Engine not fully and completely rectified by Lessee before such Event of Default and Lessor may:	
 
 	(i)	retain for its own account any such proceeds previously paid to Lessor which would have been remitted to Lessee under this Section 6 in the absence of such Event of Default; and	
 
 	(ii)	cause any proceeds of any pending claims to be paid to Lessor, rather than Lessee.	
 
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If Lessee cures such Event of Default prior to the termination of the leasing of the Engine by Lessor, then Lessor shall release to Lessee any such proceeds not applied by Lessor in or towards remedying such Event of Default and which would otherwise have been received by Lessee under this Section 6 in the absence of such Event of Default.
 
 	(c)	Lessee will take all steps as are necessary at the end of the Term to ensure that the benefit of any warranties relating to the Engine which have not expired is vested in Lessor.	
 
7.	LESSOR’S COVENANTS	
 
7.1	Quiet Enjoyment . So long as no Event of Default has occurred and is continuing, Lessor will not nor will it permit any Person lawfully claiming by or through it to interfere with or otherwise disturb Lessee’s right to quiet use and possession of the Engine during the Term. The proper exercise by Lessor of its rights of inspection or other rights provided to it under the Lease in the absence of an of Event Default in accordance with the terms of the Lease shall not be considered to be a breach of the foregoing covenant. Lessee agrees that as between itself and Lessor its only right with respect to a default by Lessor under the Lease is to make a claim against Lessor for actual damages resulting directly therefrom, subject to Section 16.3 hereof. Lessee hereby waives any and all other rights or remedies it may have under Section 2A-211 of the UCC or Section 2A-508 through 2A-522 of the UCC or otherwise.	
 
7.2	Maintenance Contributions	
 
 	(a)	If, under the Engine Lease Agreement for the’ Engine, Lessee is required to pay Supplemental Rent, then provided no Event of Default has occurred and is continuing, Lessor will pay as maintenance contributions (as a separate and independent obligation and not as a return of Supplemental Rent), subject to Section 7.2(b) ( Exclusions ), the following amounts to Lessee or, at Lessee’s written request, the applicable Maintenance Performer (it being understood and agreed, however, that no such Maintenance Performer shall be a third-party beneficiary of this Lease) by way of contribution to the cost of maintenance of the Engine, UPON RECEIPT BY LESSOR, WITHIN SIX MONTHS AFTER COMMENCEMENT OF SUCH MAINTENANCE AND BEFORE THE EXPIRY DATE, of an invoice or other form of evidence of payment by Lessee reasonably satisfactory to Lessor together with supporting documentation reasonably satisfactory to Lessor evidencing performance of the following work during a completed Engine shop visit when the Engine requires off-wing tear down and/or disassembly by the Maintenance Performer:	
 
 	(i)	Engine Life-Limited Parts : The Engine LLP Supplemental Rent payable by Lessee for the Engine will be designated and will be reimbursable solely for the replacement of LLP in the Engine and Lessor will reimburse Lessee from the Engine LLP Supplemental Rent for the actual out-of-pocket materials cost :(without overhead, mark-up or profit factor)] of the LLP in connection with the replacement of LLP in the Engine, with parts required for all other purposes or causes excluded, including those causes set forth in Section 7.2(b) ( Exclusions ). Reimbursement, excluding exchange fees and handling, packing and shipping charges, for the replacement cost of LLP	
 
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 	will be made up to the amount of the Engine LLP Supplemental Rent held by Lessor in respect of that Engine at the time of removal of the Engine from the Related Airframe to which it was attached immediately prior to the replacement of LLP for which reimbursement is sought;	
 
 	(ii)	Engine Refurbishment : With respect to the Engine Refurbishment of any Engine, the performance restoration, in accordance with the Lease, of such Engine, or a module thereof, accomplished by a FAR Part 145-approved agency in accordance with the Manufacturer’s work scope planning guide, including all Manufacturer-recommended reliability SBs, alert SBs and FAA Ads (to the extent required during such performance restoration shop visit and due for termination within the cyclic release period to a maximum of two years), the lesser of (A) the amount of that invoice and (B) the amount of the Engine Supplemental Rent held by Lessor in respect of that Engine at the time of removal of the Engine from the Related Airframe to which it was attached immediately prior to the restoration. If a flight hour agreement has been entered into by Lessee in relation to the Engine (and consented to by Lessor in writing), then this subparagraph (ii) shall only apply to the extent expressly agreed to by Lessee and Lessor in the applicable Engine Lease Agreement.	
 
 	(b)	Exclusions . Lessor will not pay any maintenance contributions:	
 
 	(i)	For repairs covered by insurance or warranty or arising as a result of accidents or incidents (whether or not eligible for recovery under Lessee’s insurance), operational or maintenance mishandling or AD work (except as specifically provided in Section 7.2(a)(ii) ( Engine Refurbishment ); nor	
 
 	(ii)	For repairs arising as a result of foreign object damage (“FOD”), the removal, installation, maintenance and repair of QEC and/or any elective replacement (unless mutually agreed by Lessor and Lessee) of Parts not required under the Maintenance Program to be replaced as part of the maintenance described in Section 7.2(a)(i) ( Engine Life-Limited Parts ) and (ii) ( Engine Refurbishment ), as the case may be.	
 
 	(c)	Supplemental Rent Accounts . Separate accounts will be established for performance restoration and LLP. Lessee will be entitled to draw on the appropriate reserve account, during the Term and for the purpose of meeting return conditions, to restore performance of the Engine or replace LLP to the extent that the account is in credit. Any costs for performance restoration or replacement of LLP in excess of the reserves paid for such work will be the responsibility of Lessee. Without prejudice to Lessee’s rights to receive Maintenance Contributions in accordance with the provisions of the Lease, any balances in the Supplemental Rent accounts remaining at the end of the Lease Term will be retained by Lessor.	
 
8.	LESSEE’S COVENANTS	
 
8.1	Duration: Lessee shall perform and comply, or cause its Permitted Sub-Lessee or Maintenance Performer to perform and comply, with its undertakings and covenants in the Lease at all times during the Term. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of Lessee.	
 
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8.2	Information	
Lessee will:
 
 	(a)	provide Lessor with a Technical Report for the Engine within ten (10) days after the end of each calendar month throughout the. Term and shall promptly provide Lessor with such additional information in relation to such Technical Report(s) as Lessor may reasonably request.;	
 
 	(b)	promptly provide or, as applicable, make available to Lessor the Financial Information (provided however, that if Lessee’s shares are listed on a recognized stock exchange, such that Lessee’s Financial Information is generally available through Lessee’s investor website, then Lessee shall only be required to provide the Financial Information to Lessor to the extent to which Lessor is unable to access such Financial Information on Lessee’s investor website);	
 
 	(c)	promptly after the occurrence thereof, notify Lessor of any Event of Loss and of any event which is likely to result in an insurance claim in excess of the Damage Notification Threshold and details of any negotiations with insurers or insurance brokers relating to such claim;	
 
 	(d)	promptly after the occurrence thereof, notify Lessor of any Event of Default;	
 
 	(e)	provide Lessor, upon request, with evidence that all Taxes and charges that are due and payable and were incurred by Lessee in connection with the Engine, its location and its operations, have been paid in full (or are being contested in good faith by appropriate proceedings in respect of which adequate reserves have been provided by Lessee and non-payment of which does not give rise to any likelihood of the Engine or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of Lessor or Owner);	
 
 	(f)	provide Lessor with such other information concerning the location, condition, use and operation of the Engine or concerning the business or financial affairs of Lessee, as Lessor may from time to time reasonably request; provided that information pertaining to the financial affairs of Lessee shall not be requested by Lessor more frequently than quarterly where no Event of Default has occurred and is continuing; and	
 
 	(g)	notify Lessor, promptly, of any Engine Refurbishment not otherwise contemplated by the relevant Technical Report,	
 
8.3	Lawful and Safe Operation . Lessee will operate the Engine for commercial purposes from the Delivery Date until the Return Occasion from a base within the State of Registry or from such other base outside the State of Registry pursuant to a sub-lease or a wet-lease complying with Section 8.4(a) ( Subleasing ), provided, always that Lessee must not use or operate. the Engine or permit the Engine to be used or operated:	
 
 	(a)	in violation of any applicable Regulations or in a manner causing Lessor, Owner, any Financing Party or GECAS to be in violation of any applicable Regulations, except where in extraordinary or exceptional circumstances (such as severe meteorological conditions or malfunction of the aircraft on which the Engine is located) and in order to preserve or protect the Engine, the Related Airframe or its passengers or crew, Lessee operates the Engine to a destination which would violate such Regulations, provided that Lessee shall promptly take all necessary action to remove the Engine from such destination;	
 
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 	(b)	for any purpose for which the Engine was not designed or, subject to the provision in paragraph (a) of this Section 8.3, which is illegal;	
 
 	(c)	in any circumstances or place where the Engine is not covered by the Insurances; or	
 
 	(d)	for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee’s or a Permitted Sub-Lessees cockpit personnel, and then only if the use of the Engine for such purpose is not disproportionate to the use for such purpose of other engine of the same type operated by Lessee or any Permitted Sub-Lessee, as the case may be.	
 
8.4	Subleasing . AT NO TIME PRIOR TO THE RETURN OCCASION WILL LESSEE SUB-LEASE OR OTHERWISE GIVE POSSESSION OR CONTROL OF THE ENGINE TO, OR OTHERWISE PERMIT THE ENGINE TO BE IN THE POSSESSION OR CONTROL OF, ANY OTHER PERSON EXCEPT:	
 
 	(a)	where the Engine is delivered to a manufacturer or maintenance facility for work to be done on it as required or permitted under the Lease; or	
 
 	(b)	to a Pre-Approved Sub-Lessee or to such other sub-lessee of the Engine to which Lessor consents in writing (in each case, a “ Permitted Sub-Lessee ”), pursuant to a sub-lease to which Lessor consents in writing (a “ Permitted Sub-Lease ”) on such terms as Lessor may reasonably require, and provided always that no Event of Default shall have occurred and be continuing at the commencement of such sublease and all reasonable out of pocket costs connected with Lessor’s review of the sub-lease and preparation, negotiation, execution and filing of all documents connected thereto shall be for Lessee’s account. Upon giving Lessee at least five (5) Business Days’ notice, Lessor shall have the right to remove any of the Persons from the list of Pre-Approved Sub-Lessees from time to time if Lessor has reasonable cause to believe that the right, title or interest of Lessor or Owner in the Engine would be materially adversely affected if the Engine were to be sub-leased to such Person or if Lessor has: reasonable concerns about such a Person’s solvency or ability to operate and maintain the Engine in accordance with the Lease; or	
 
 	(c)	as permitted under Section 8.11 ( Removal or Engines and Parts ).	
 
 	(d)	Notwithstanding anything to the contrary set forth herein, Lessee shall be permitted to place the Engine on a Related Airframe which Lessee wet leases to a third party; provided that, during such operations (i) the Related Airframe on which the Engine is installed shall be operated solely by regular employees of or contracted by Lessee possessing all current certificates and licenses that are required by applicable Regulations, including by the State of Registry, and shall remain in the operational control and possession of Lessee, (ii) the Engine shall be subject to insurance coverage as provided for in the Lease, (iii) the Engine shall be used and operated in accordance with the Lease and shall be maintained or caused to be maintained by Lessee in the manner required by this Lease, and (iv) the Engine shall not be subject to any change in State of Registry; and provided always that, such arrangement is expressly subordinated to the Lease and the rights of Lessor and Owner thereunder and to the Engine.	
 
8.5	Inspection	
 
 	(a)	Lessee will permit Lessor’s, Owner’s and the Financing Parties’ Representative representatives to inspect the Engine at any reasonable time. Unless an Event of Default has occurred and is continuing, any such Person will give Lessee reasonable prior notice of such inspection and will ensure that it does not result in an	
 
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 	unreasonable disruption to the scheduled operation of such Engine. Lessee shall comply with the reasonable requests of Lessor’s, Owner’s and the Financing Parties’ Representative representatives during the course of an inspection.	
 
 	(b)	The cost of conducting an inspection shall be borne by Lessor, Owner or the Financing Parties, as the case may be, unless, (i) an Event of Default has occurred and is continuing or (ii) if as a result of that inspection, Lessee is found to be in material default of its obligations under the Lease, in which case the cost shall be borne by Lessee.	
 
 	(c)	No liability or obligation will be incurred by Lessor, Owner, Financing Parties’ Representative or the Financing Parties, as the case may be, by reason of non-exercise by any of them of the inspection rights referred to in this Section 8.5.	
 
8.6	Ownership; Property Interests; Related Matters	
 
 	(a)	Lessee will:	
 
 	(i)	fix and maintain Nameplates containing the Nameplate Inscription in a prominent position on each Engine;	
 
 	(ii)	in any circumstance where such interests are relevant, take all reasonable steps to make sure that all relevant Persons know about the interests of Owner, Lessor and Financing Parties’ Representative in the Engine; and	
 
 	(iii)	pay all navigation charges, air traffic control charges, landing charges or other amounts of any nature imposed by any Government Entity with respect to Lessee, each Related Airframe, each Engine and/or the Lease except to the extent that, in the reasonable opinion of Lessor, such payment is being contested in good faith by appropriate proceedings in respect of which adequate reserves have been provided by Lessee and non-payment of which does not give rise to any material likelihood of the Engine or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of Lessor or Owner.	
 
 	(b)	Lessee will not:	
 
 	(i)	represent that it is the owner of the Engine or that it has an economic interest (equivalent to ownership) in the Engine for Tax treatment or other purposes, except for the election to consider the Engine as part of its assets under the Mexican Asset Tax Law (Ley del Impusto al Activo);	
 
 	(ii)	take any action or fail to take any action, other than action required under the Lease (including under Section 7.1) ( Quiet Enjoyment ) to be taken by Lessor, Affiliates of Lessor, Owner or a Financing Party, if such action or omission could result in a forfeiture or seizure of the Engine or otherwise similarly put Owner’s and/or Lessor’s and/or Financing Parties’ Representative’s rights or interests at risk;	
 
 	(iii)	represent to others that Owner, Lessor or Financing Parties’ Representative is associated with or responsible for the business activities and/or flight operations of Lessee;	
 
 	(iv)	allow the Engine or Owner’s, Lessor’s or Financing Parties’ Representative’s interest in it or the Lease to become or remain subject to any Security Interest (other than a Permitted Lien); or	
 
 	(v)	allow the name of any Person to he placed on the Engine as a designation that could reasonably be interpreted as a claim of ownership or as a Security Interest; provided that, Lessee may place thereon, or a Permitted Sub-Lessee to place thereon, its livery, colors and insignia.	
 
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8.7	General	
 
 	(a)	Lessee will:	
 
 	(i)	maintain its business as a commercial scheduled airline, will preserve its corporate existence (other than as permitted in connection with a solvent reorganization on terms which shall have been previously approved in writing by Lessor and Section 8.7 (vii) below) and will maintain all rights, privileges, licenses and franchises material thereto or material to performing its obligations under the Lease;	
 
 	(ii)	not operate, maintain, insure or deal with, or keep records with respect to, the Engine in a manner which discriminates against the Engine adversely insofar as Lessor’s, Owner’s or Financing Parties’ interests are concerned, when compared with the manner in which Lessee operates, maintains, insures or deals with, or keep records with respect to, similar engines or parts in Lessee’s fleet;	
 
 	(iii)	not change (1) the location of its chief executive office from that described in the heading of the Engine Lease Agreement, (ii) the designated service of process agent set forth in Section 15.8(c), or (iii) otherwise be located (as defined in Section 9-103(3)(d) of the UCC) at any place in the United States other than the location described in Schedule 2, except upon ten (10) days prior written notice thereof to Lessor;	
 
 	(iv)	not liquidate or dissolve, except in the case where a mandatory liquidation occurs or pursuant to a solvent reorganization, consolidation or merger permitted hereunder or with the prior written consent of Lessor which consent, in each case, shall not be unreasonably withheld;	
 
 	(v)	not consolidate with or merge into or with any other corporation or other Person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or any substantial part of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger), any corporation or other Person, unless Lessee provides Lessor with not less than thirty (30) days prior written notice of such transaction describing such transaction in reasonable detail and providing Lessor with evidence reasonably satisfactory to Lessor demonstrating that such transaction (x) shall not have any material adverse effect on the rights of Lessor, Owner or the Financing Parties’ Representative under or in respect of the Lease or the Engine; and all applicable requirements of the Financing Documents shall have been complied with in connection therewith and (y) no Default shall have occurred and be continuing or shall occur as a result thereof; and	
 
 	(vi)	act as both the importer and exporter of record and shall, at its expense, obtain and maintain all certificates, licenses, permits, approvals and other governmental authorizations from time to time required for the use and operation of the Engine or which may be necessary to import, export or transport the Engine from the Delivery Location and to the Redelivery Location.	
 
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8.8	Records . Lessee will keep all Engine Documents;	
 
 	(a)	in English;	
 
 	(b)	according to prudent standard international practice airline practice of similar carriers to Lessee; and	
 
 	(c)	in accordance with prudent standard international practice and so they meet the requirements of applicable Regulations (including at minimum all IAA and FAA requirements, including specifically FAR 91.417) and Lessee’s Maintenance Program.	
 
8.9	Protection . Lessee will:	
 
 	(a)	take all actions requested by Lessor that are within Lessee’s control to keep each Related Airframe registered with the Air Authority;	
 
 	(b)	make any and all filings required to be made with the Air Authority registry that are within its control and take all other actions within its control that are necessary or advisable to reflect on the Air Authority registry or as otherwise appropriate under applicable Law any change in the ownership of the Engine, or in the interests of Lessor, Owner or the Financing Parties’ Representative in the Lease or the Engine, any modification to the Engine (such as the permanent replacement of the Engine or Part in accordance with the Lease) or as a result of any change in applicable Regulations. Lessor will bear any costs incurred as a consequence of a transfer by Lessor, Owner or the Financing Parties’ Representative of the interests of Lessor, Owner or the Financing Parties’ Representative in the Lease or the Engine or a change in the identity of Lessor, Owner or the Financing Parties’ Representative (in each case, unrelated to the replacement of any Engine or Part or an Event of Default), and Lessee will bear any other costs incurred in complying with this Section 8.9, including in connection with the replacement of any Engine or Part;	
 
 	(c)	reasonably cooperate with the Lessor, Owner and/or any Financing Party, so that as soon as practicable from time to time registrations shall be made to permit the interests of the Lessor, Owner and/or any Financing Party (or any of them) in connection with the Engine to be perfected and recorded as “international interests” under the Cape Town Convention in accordance and to the extent permitted under applicable Law; and	
 
 	(d)	take any actions reasonably requested by Lessor to ensure that the Cape Town Convention is applicable to the Lease and that the interests of any Indemnitee in relation to the Engine are effectively registered at the International Registry in accordance and to the extent permitted under applicable Law.	
 
8.10	Maintenance and Repair . Lessee will maintain, overhaul and repair the Engine (or arrange for the Engine to be maintained, overhauled and repaired, through the Maintenance Performer), so that:	
 
 	(a)	the Engine is kept in as good operating condition and repair as the condition of the Engine as at Delivery and after giving effect to any post-Delivery modifications, repairs or maintenance paid for or otherwise provided by or on behalf of Lessor, except for ordinary wear and tear, for purposes of any Engine, ordinary wear and tear does not include POD, damage from accident, neglect and improper use, operation and handling;	
 
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 	(b)	Lessee has a current certificate of airworthiness (issued by the Air Authority in the appropriate public transport category) for the Related Airframe;	
 
 	(c)	the Engine complies with (i) all applicable Regulations and the standards stipulated by FAR Part 121 Subpart I_ (or its JAA equivalent) and any other rules and regulations of the FAA (or J AA) and in at least the same manner and with at least the some care, including record keeping, maintenance scheduling, modification status and technical condition, as is the case with respect to similar engines owned or otherwise operated by Lessee and as if Lessee were to retain and continue operating the Engine in its fleet after the Expiry Date, including all maintenance to the Engine or any Part required to maintain all warranties, performance guaranties or service life policies in full force and effect; and (ii) the requirements of all ADs and SBs designated by the State of Design or State of Registry as “mandatory,” and to be carried out before the Return Occasion or within the AD Compliance Period; and	
 
 	(d)	all maintenance and repair is carried out according to Lessee’s Maintenance Program in at least the same manner and with at least the same care, including Line Maintenance, maintenance scheduling, modification status and technical condition, as is the case with respect to similar engines owned or otherwise operated by Lessee, provided always that such repair of any Part of the Engine shall not include DER repairs.	
 
8.11	Removal of Parts; Installation of Engine	
 
 	(a)	General : Lessee must replace, at its sole expense, in accordance with Section 8.11(b) ( Permanent Replacement ) within ninety (90) days thereof, any Part which is permanently removed from the Engine, provided, however, that any Engine which has suffered an Event of Loss shall be subject to Section 11.1 ( Events of Loss ). Any Part which otherwise is lost, stolen, destroyed, seized, obsolete, confiscated, damaged beyond repair or permanently rendered unfit for any reason, must be replaced in accordance with Section 8.11(b). Any Engine may be installed on an aircraft Lessee owns, leases or wet leases in accordance with Section 8.11(c) ( Installation ). Lessee shall obtain from any person to whom possession of an Engine is given, and from the lessor of any Related Airframe and from any holder of a Security Interest in any Related Airframe a Recognition of Rights Agreement prior to the installation of such Engine on any Related Airframe unless the applicable lease/security document relating to such Related Airframe contains a provision whereby the lessor and/or owner of the Related Airframe recognize the rights of lessors and owners of spare engines attached from time to time on the Related Airframe, subject to such provision being disclosed to Lessor and acceptable to Lessor in its reasonable discretion prior to such installation occurring.	
 
 	(b)	Permanent Replacement : If Lessee permanently replaces a Part, subject to any additional terms and conditions in the Lease:	
 
 	(i)	the replacement part must be an OEM approved Part, be in good operating condition, be made by the same manufacturer as the Part it is replacing (to the extent possible provided always that such replacement part shall be an OEM approved Part), have a value, warranty status and utility the same or better than the Part it is replacing, have as much useful life available until the next scheduled maintenance procedure, be of the same or a more advanced make and model and of the same interchangeable modification status as the Part it is replacing;	
 
 	(ii)	the replacement part must have become and remain, until replaced in accordance with this Section 8.11, the property of Owner free from Security Interests (other than Permitted Liens), and subject to the applicable Financing Documents; and	
 
 	(iii)	Lessee must have full details of the source and maintenance records of the replacement part. In the case of replacement life-limited serialized parts, documentation shall be back to birth (and acceptable to Lessor acting reasonably or, if FAA/JAA requirements apply to such documentation, then such documentation shall be in compliance with the applicable FAA/JAA requirements) and in the case of serialized rotable parts, shall have a complete service history in accordance with Aviation Authority or FAA requirements, whichever are more stringent.	
 
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 	(c)	Installation : An Engine may be installed on an aircraft which Lessee owns, leases or wet leases if:	
 
 	(i)	no Event of Default has occurred and is continuing;	
 
 	(ii)	Lessee has operational control over the Engine;	
 
 	(iii)	Owner keeps the ownership of the Engine;	
 
 	(iv)	the Engine does not become subject to a Security Interest and the Related Airframe is not subject to any Security Interest except a Permitted Lien or a lease or Security Interest described in Section 8.11(a) ( General ) above;	
 
 	(v)	Lessee obtains and delivers to Lessor a Recognition of Rights Agreement in respect of any Related Airframe on which the Engine is to be installed unless the applicable lease/security document relating to such Related Airframe contains a provision whereby the lessor and/or owner of the Related Airframe recognize the rights of lessors and owners of spare engines attached from time to time on the Related Airframe , subject to such provision being disclosed to Lessor and acceptable to Lessor in its reasonable discretion; and	
 
 	(vi)	the Engine is removed from the Related Airframe as soon as practicable under Lessee’s engine rotation program but not later than the Expiry Date;	
 
 	(d)	Temporary Replacement : Lessee may install any part on the Engine as a temporary replacement if:	
 
 	(i)	no Event of Default has occurred and is continuing;	
 
 	(ii)	there is not available a part complying with the requirements of the Lease for a replacement part;	
 
 	(iii)	it would result in an unreasonable disruption of the operation of the Engine or the business of Lessee to have the Engine grounded until such time as a part complying with the requirements of the Lease for a replacement part becomes available for installation;	
 
 	(iv)	as soon as practicable after a part is installed on the Engine, but before the earlier of the next scheduled removal from service for the performance of an Engine Refurbishment or major maintenance event or the Expiry Date, Lessee removes that part and replaces it with the original Part (or by a part which complies with Section 8.11(b) ( Permanent Replacement )); and	
 
 	(v)	the Insurance for the Engine is not adversely affected.	
 
 	(e)	Pooling/Interchange : Lessee shall not subject any Engine or Part to any pooling, interchange, lease or similar arrangement unless Lessee obtains Lessor’s prior written consent thereto, which consent shall not be unreasonably withheld.	
 
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8.12	Equipment Changes . Lessee will not make any modification or addition to the Engine (each an “Equipment Change”), except for an Equipment Change which:	
 
 	(i)	is required by Law or Regulation or is otherwise expressly permitted or required by the Lease; or	
 
 	(ii)	has (x) a cost (including labor) of less than the Modification Approval Amount or (y) the prior written approval of Lessor, which approval shall not be unreasonably withheld, and (z) in either case, does not diminish the condition, utility, airworthiness or value of the Engine.	
So long as no Event of Default has occurred and is continuing, Lessee may remove or reverse any Equipment Change provided that the Equipment Change is not required pursuant to the terms of the Lease or to maintain the Insurance and removal or reversal does not diminish the value, utility, airworthiness or condition of the Engine assuming that such Equipment Change was not made and that the Engine is maintained in accordance with the Lease. Furthermore, Lessor may require Lessee to remove or reverse any Equipment Change prior to the Return Occasion so that, on the Expiry Date, the Engine is restored to the condition it was in prior to that Equipment Change. Any Equipment Change not so removed or reversed becomes the property of Lessor or Owner, as the case may be, at the Expiry Date.
 
8.13	Title on an Equipment Change . Title to any Part that is installed on the Engine shall, except in the case of a temporary replacement of a Part, vest in Owner solely by virtue of its attachment to the Engine and it shall then be subject to the Lease and, if applicable, the Financing Documents, as if it were attached to the Engine at Delivery. If so requested by Lessor, Lessee will provide a properly executed bill of sale or similar instrument to evidence the vesting of good and marketable title, free and clear of any Security Interest (except Lessor Liens), to any such replaced part in Owner and all documents required under the Financing Documents. After Lessor has determined that Lessee has permanently replaced any Part in accordance with Section 8.11(b) ( Removal of Parts ) and this Section 8.13, Lessor will, or will procure that Owner will, without recourse or warranty (except as to the absence of Lessor’s Liens), transfer to Lessee or will procure that Owner will transfer to Lessee all of Lessor’s or Owner’s, as the case may be, rights to the Parts that has been replaced, on an AS IS, WHERE IS basis, and will at Lessee’s expense provide or will procure that Owner provides a bill of sale or similar instrument as Lessee may reasonably request to evidence such transfer. Lessee shall indemnify, on an After-Tax Basis, Lessor, Owner and each other Tax Indemnitee for all fees, expenses and Taxes incurred by Lessor, Owner or any other Tax Indemnitee in connection with any such transfer, except for Lessor Taxes.	
 
8.14	Off-Wing Storage . If the Engine is not installed on any airframe for a continuous period in excess of 30 days, Lessee will store the Engine, at Lessee’s sole cost, in accordance with the recommendations of Manufacturer and the FAA and the requirements of the Air Authority.	
 
9.	INSURANCE	
 
9.1	Insurance . Lessee will maintain the Insurance in full force during the Term, and thereafter as expressly required in the Lease, which Insurance shall comply with prudent industry practice for comparable operators, and shall be through such brokers and with such insurers as shall be acceptable to Lessor acting reasonably, and having such deductibles and subject to such exclusions as may be approved by Lessor from time to time, which approvals shall not be	
 
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 	unreasonably withheld. The Insurance shall in any event meet the requirements set forth in Schedule 7 ( Insurance Requirements ), which may be amended from time to time by Lessor (acting reasonably) (other than in respect of the amount of any deductible or the amount of the “Agreed Value” as all such amendments to amounts shall require the prior written consent of Lessee) following a material change in international aviation insurance practices so that the scope and level of cover is maintained, and the interests of Lessor and each Indemnitee are reasonably protected, in line with usual and customary industry practice.	
 
9.2	Insurance Undertakings and information : Lessee will:	
 
 	(a)	comply with the terms and conditions of each policy of any Insurance and not do, consent or agree to any act or omission which:	
 
 	(i)	invalidates or may invalidate any Insurance; or	
 
 	(ii)	renders or may render void or voidable the whole or any part of any Insurance;	
 
 	(b)	not take out without the prior written approval of Lessor any insurance or reinsurance in respect of the Engine which adversely affects the Insurance required to be maintained hereunder;	
 
 	(c)	commence renewal procedures in a timely manner prior to expiry of any of the Insurance and provide to Lessor:	
 
 	(i)	if requested by Lessor, in writing, a written status report of renewal negotiation 14 days prior to each expiry date;	
 
 	(ii)	telecopy confirmation of completion of renewal prior to each policy expiry date; and	
 
 	(iii)	certificates and broker’s letters which comply with Section 9.2(d).	
 
 	(d)	on reasonable request, provide to Lessor copies of documents or other information evidencing the Insurances, including certificates of insurance (and where appropriate certificates of reinsurance), and broker’s (and any reinsurance broker’s) letters of undertaking in a form acceptable to Lessor (acting reasonably), detailing the coverage and confirming compliance with the specified insurance requirements of the Lease within seven (7) days after each renewal date; and	
 
 	(e)	provide any other insurance and reinsurance related information, or assistance, in respect of the Insurance as Lessor may reasonably require.	
Nothing herein shall be deemed to prevent Lessee, at its expense, from carrying insurance covering the Engine or any Part in addition to the Insurances required under this Section 9 or in reasonable amounts greater than those required under this Section 9; provided that any such Additional Insurance shall not adversely affect the rights of Lessor, Owner or any other Additional Insured to make any claim or obtain recovery or coverage under any of the Insurances required to be maintained pursuant to this Section 9. The proceeds of any such Additional Insurance shall be paid directly to and shall be deemed the sole property of Lessee.
 
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9.3	Failure to Insure . If Lessee fails to maintain any of the Insurance in compliance with the Lease:	
 
 	(a)	each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under the Lease) to pay the premiums due or to effect and maintain insurance satisfactory to it or otherwise remedy Lessee’s failure in such manner (including, without limitation to effect and maintain an “owner’s interest” policy) as it considers appropriate. Any sums so expended by it will become immediately due and payable by Lessee on demand by Lessor together with interest thereon at the Interest Rate, from the date of expenditure by it up to the date of reimbursement by Lessee; and	
 
 	(b)	Lessor at any time while such failure is continuing to require the Engine to remain at any airport, or such other location where such Engine is then located, or to proceed to and remain at any airport, or such other location designated by Lessor until the failure is remedied to its reasonable satisfaction.	
 
9.4	Continuing Indemnity . Lessee shall effect and maintain Insurance after the Expiry Date with respect to its liability under Section 10 ( Indemnity ) for two years, and such insurance shall name each Indemnitee as an additional insured.	
 
9.5	Change . If at any time Lessor wishes to revoke its approval of any insurer, reinsurer, insurance or reinsurance, Lessor and/or its brokers will consult with Lessee and Lessee’s brokers (as for the time being approved by Lessor) regarding whether that approval should he revoked to protect the interests of the parties insured. If, following such consultation, Lessor considers that any change should be made, Lessee will then arrange or procure the arrangement of alternative cover satisfactory to Lessor acting reasonably.	
 
10.	INDEMNITY	
 
 	(a)	Except as provided in Section 10(b) below, Lessee agrees to indemnify and hold harmless each of the Indemnitees from and against all Losses which an Indemnitee may at any time suffer or incur at any time, whether directly or indirectly, arising out of, related to or in any way connected with:	
 
 	(i)	the ownership, maintenance, overhaul, service, repair, delivery, possession, transfer of ownership or possession, import, export, registration, control, storage, modification, leasing, insurance, inspection, testing, design, subleasing, use, condition, redelivery or other matters relating to any Engine any Part or any Related Airframe (regardless of whether in the air or on the ground, and regardless of whether such Losses are based on strict liability in tort, any act or omission, including the negligence, of any Indemnitee, or otherwise); or	
 
 	(ii)	any breach by the Lessee of any of its obligations under the Lease, or with respect to any Engine, for any breach by Lessee of its obligations under any agreement for a Related Airframe; or	
 
 	(iii)	the design, testing or use of or any article or material in, any Engine or any Part or its use or operation, including any defect in design and regardless of whether it is discoverable, and any infringement of patent, copyright, trademark, design or other proprietary right claimed by any Person or a breach of any obligation of confidentiality claimed to be owed to any Person.	
 
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For the avoidance of doubt, the reference to “ownership” in clause (i) shall not require Lessee to indemnify Lessor in respect of (y) any defect in Lessor’s or Owner’s title to the Engine or any Losses arising as a result of, in connection with or relating to such defect, or (z) any decline in the residual value of the Engine if Lessee shall have fully complied with its obligations under the Lease (subject to any applicable grace periods).
 
 	(b)	Notwithstanding the provisions of Section 10(a), Lessee is not required to indemnify any particular Indemnitee (provided that Lessor and its Subsidiaries and Affiliates and its and their officers, directors and employees shall be treated as a single Indemnitee) under this Section, to the extent a particular Loss is:	
 
 	(i)	caused by the wilful misconduct of or gross negligence of that Indemnitee, other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Engine or the Lease;	
 
 	(ii)	caused by Lessor’s breach of the Lease;	
 
 	(iii)	related to any Taxes (but without prejudice to any Indemnitee’s rights under any other provision of this Lease relating to Taxes);	
 
 	(iv)	caused by an event which occurs before the commencement of the Term (except where the Loss is suffered during the Term as a result of a pre-Delivery defect in or otherwise arises out of or relates to or is any way connected with the manufacture, design, maintenance, repair, rebuilding, overhaul or modification of the Engine);	
 
 	(v)	caused by an event which occurs after the redelivery of the Engine to Lessor in compliance with the Lease and is not attributable to any act, omission, event or circumstance occurring prior to such redelivery;	
 
 	(vi)	caused by any sale, assignment, transfer or other disposition (whether voluntary or involuntary) by such lndemnitee of any Engine or any interest therein that is not a replacement thereof under the Lease, and unless such sale, transfer or other disposition has resulted from or occurred following a Default; or	
 
 	(vii)	consists of normal administrative costs, overhead and expenses of such Indemnitee (but excluding any such costs or expenses resulting from the occurrence of any Event of Default);	
 
 	(viii)	consists of costs or expenses for which Lessor has expressly agreed to be responsible under any other provision of the Lease; or	
 
 	(ix)	consists of costs or expenses of entering into amendments not requested by Lessee or required hereunder.	
 
11.	EVENTS OF LOSS	
 
11.1	Events of Loss	
 
 	(a)	If an Event of Loss occurs prior to Delivery of the Engine, the Lease will immediately terminate and except as expressly stated in the Lease neither party will have any further obligation other than pursuant to Section 5.21 ( Expenses ) and Section 3 of Schedule 4 ( Pre-Delivery Procedures and Delivery Condition Requirements ), except that Lessor will return any Deposit to Lessee and return to Lessee or cancel any Letter of Credit.	
 
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 	(b)	If an Event of Loss occurs after Delivery, Lessee will pay the Agreed Value to Lessor on or prior to the earlier of (i) thirty (30) days after the Event of Loss and (ii) the date of receipt of insurance proceeds in respect of that Event of Loss.	
 
 	(c)	Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under the Lease, and if Lessee requests such transfer, Lessor will, or will procure that Owner will, without recourse or warranty (except as to the absence of Lessor’s Liens) transfer to Lessee or will procure that Owner transfers to Lessee legal and beneficial title, subject to no Lessor’s Liens (but otherwise without warranty), to the Engine, on an AS IS, WHERE IS basis, and will at Lessee’s expense, execute and deliver or will procure that Owner executes and delivers such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Owner and Lessor Liens. Lessee shall indemnify Lessor, Owner and each other Tax Indemnitee for all fees, expenses and Taxes incurred by Lessor, Owner or any other Tax Indemnitee in connection with any such transfer, except for Lessor Taxes.	
 
11.2	Requisition . During any requisition for use or hire of any Engine or Part which does not constitute an Event of Loss:	
 
 	(a)	the Rent and other charges payable under the Lease will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition); and	
 
 	(b)	so long as no Default has occurred and is continuing or upon Lessee remedying such Default, Lessee will be entitled to any compensation paid by the requisitioning authority in respect of such authority’s use of the Engine or such Part during the Term. Lessee will, as soon as practicable after the end of any such requisition, cause the Engine to be put into the condition required by the Lease. Lessor will be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Engine arising during the period of requisition, and Lessor will apply such compensation in reimbursing Lessee for the cost of complying with its obligations under the Lease in respect of any such change, but, if any Default has occurred and is continuing, Lessor may apply the compensation in or towards settlement of any amounts owing by Lessee under the Lease and/or under any Other Agreement, but if not so applied, shall pay the same to Lessee upon Lessee remedying any such Default and all other Defaults then existing.	
 
12.	RETURN OF ENGINES	
 
12.1	Return . On the Expiry Date or redelivery of the Engine pursuant to Section 13.2 ( Rights and Remedies ) or termination of the leasing of the Engine under the Lease, Lessee will, unless an Event of Loss or any event which but for the passage of time would constitute an Event of Loss has occurred, redeliver the Engine and the Engine Documents at Lessee’s expense to Lessor at the Redelivery Location, in accordance with the procedures and in compliance with the conditions set forth in Schedule 6 ( Procedures and Operating Condition at Redelivery ), free and clear of all Security Interests (other than Lessor Liens) and in a condition qualifying for and having a valid and fully effective certification of airworthiness under FAR Part 121.	
 
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12.2	Non-Compliance . If at the time of Final inspection Lessee has not fully complied with any of its obligations under the Lease (including Schedule 6 ( Procedures and Operating Condition at Redelivery ) or Lessee fails to make the Engine available to Lessor on a timely basis for inspection and redelivery pursuant to Section 12.1 ( Return ) and such Schedule 6 (whether such failure is due to any act or omission of Lessee or any other circumstance whatsoever (other than (i) to the extent that the delay is caused by a failure on the part of Lessor to inspect the Engine for the purposes of the Final Inspection in accordance with the Lease, except where that failure arises due to the occurrence of a Default by Lessee, or (ii) any request by Lessor to perform work, repair, maintenance or modification to the Engine other than as necessary to meet the redelivery conditions set forth herein)), the Term shall be extended until the time when the Engine has been redelivered to Lessor in full compliance with the Lease, for the sole purpose of enabling such non-compliance or failure to be promptly rectified, and during such extension period:	
 
 	(a)	Lessee shall not use the Engine in flight operations except those related directly to the redelivery of the Engine to Lessor;	
 
 	(b)	all Lessee’s obligations and covenants under the Lease will remain in full force until Lessee so redelivers the Engine; and	
 
 	(c)	Lessee shall pay Rent to Lessor at a rate per month equal to: (i) the amount of Rent payable in respect of the last scheduled Rental Period for the first ***** days following the Scheduled Expiry Date, (ii) the amount of Rent payable in respect of the scheduled Rental Period plus ***** thereof for the ***** through to the ***** following the Scheduled Expiry Date and (iii) from and after the ***** day following the Scheduled Expiry Date, the amount of Rent payable in respect of the last scheduled Rental Period plus ***** thereof, in each case calculated on a per diem basis.	
Any such extension shall not prejudice Lessor’s right to treat such non-compliance or failure as an Event of Default at any time, and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of the Lease or applicable Law. Without limiting the generality of the foregoing, Lessee’s Rent obligation under paragraph (c) above shall be without prejudice to Lessor’s rights to terminate the letting of the Engine and to indemnification pursuant to Section 13.3 ( Default ).
Lessor may elect (either on first tender of the Engine by Lessee or at any time during the said extension period) to accept redelivery of the Engine notwithstanding non-compliance with Section 12.1 or Schedule 6 , in which case Lessee will indemnify Lessor on an After-Tax Basis, and provide cash to Lessor (in an amount satisfactory to Lessor) as security for that indemnity, in respect of the actual, out of pocket cost to Lessor of putting the Engine into the condition required by the Lease.
 
12.3	Redelivery . Upon redelivery Lessee will provide to Lessor, upon Lessor’s request, all documents necessary to export the Engine from the State of Registry (including a valid and subsisting export certificate of airworthiness for the Engine).	
 
12.4	Acknowledgement . Provided Lessee has complied with its obligations under this Section 12 and Schedule 6 ( Procedures and Operating Condition at Redelivery ), of the Lease, following redelivery of the Engine by lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgement confirming that lessee has redelivered the Engine to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement.	
 
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13.	DEFAULT	
 
13.1	Events . The occurrence of any of the Events of Default will constitute a repudiation (but not a termination) of the Lease by Lessee (whether the occurrence of any such Event of Default is voluntary or involuntary or occurs by operation of Law or pursuant to or in compliance with any judgement, decree or order of any court or any order, rule or regulation of any Government Entity).	
 
13.2	Rights and Remedies . If an Event of Default occurs and Lessee has not remedied such Event of Default, Lessor may at its option (and without prejudice to any of its other rights under the Lease), at any time thereafter (without notice to Lessee except as required under applicable Law) and subject to compliance with non-waivable mandatory requirements of Law:	
 
 	(a)	accept such repudiation and by notice to Lessee and with immediate effect cancel the leasing of the Engine (but without prejudice to the continuing rights and obligations of the parties hereunder that survive cancellation), whereupon all rights of Lessee under the Lease shall cease; and/or	
 
 	(b)	proceed by appropriate court action or actions to enforce performance of the Lease including the payment of all Rent and all other amounts payable by Lessee to Lessor or any Indemnitee pursuant to the terms of the Lease; and/or	
 
 	(c)	proceed by appropriate court action or actions to recover damages for the breach of the Lease which shall include (without duplication of recovery):	
 
 	(i)	all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Engine or receives payment of the amount calculated pursuant to clause (ii) below;	
 
 	(ii)	an amount equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below:	
 
 	A.	in the event that Lessor has re-leased the Engine on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as being substantially similar to the terms of the Lease, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or	
 
 	B.	in the event that Lessor has not re-leased the Engine or has sold the Engine or has re-leased the Engine on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the fair market rental value (determined pursuant to the Appraisal Procedure) of the Engine for the period commencing with the date that Lessor reasonably anticipates that the Engine could be re-leased at such rental rate and ending with the date that	
 
31

 	the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the date of payment by Lessee.	
 
 	(iii)	all reasonable and documented costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including repossession costs, reasonable legal fees, Engine storage, maintenance and insurance costs, and Engine re-lease or sale costs (including, in the case of a re-lease, any costs incurred to transition the Engine to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “ Enforcement and Remarketing Costs ”;	
 
 	(iv)	any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Engine or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Engine, all such amounts being referred to herein collectively as “ Unwind Expenses ”;	
 
 	(v)	any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Engine, sustained by Lessor due to Lessee’s failure to maintain the Engine in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Engine in the condition required by this Agreement, all such amounts being referred to herein collectively as “ Engine Condition Damages ”; and	
 
 	(vi)	such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or	
 
 	(d)	either:	
 
 	(i)	enter upon the premises where all or any part of the Engine is located and take immediate possession of and, at Lessor’s sole option in accordance with applicable Law, remove the Engine, all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or wilful misconduct; or	
 
 	(ii)	by delivering notice to Lessee, require Lessee to redeliver the Engine to Lessor at GE’s On Wing Support facility in London, England (or such other location as Lessor may require) on the date specified in such notice and in all respects in the condition required by the Lease upon the Return Occasion (it being understood that Lessee shall not delay any such return for the purpose of placing the Engine in such condition, but shall nevertheless be liable to Lessor for the failure of the Engine to be in such condition); and/or	
 
 	(e)	sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Engine as Lessor in its sole discretion may reasonably determine, all free and clear of any rights of Lessee; and/or	
 
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 	(f)	by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:	
 
 	(i)	all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;	
 
 	(ii)	an amount equalling the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the payment date specified by Lessee to Lessor, less the applicable amount set forth below:	
 
 	A.	in the event that Lessor has re-leased the Engine on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as being substantially similar to the terms of the Lease, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or	
 
 	B.	in the event that Lessor has not re-leased the Engine or has sold the Engine or has re-leased the Engine on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the fair market rental value (determined pursuant to the Appraisal Procedure) of the Engine for the period commencing with the date that Lessor reasonably anticipates that the Engine could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Engine, whether or not such right is exercised), discounted periodically (equal to instalment frequency) to present worth at the Discount Rate to the date of payment by Lessee;	
 
 	(iii)	an amount equal to Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Engine Condition Damages; and	
 
 	(iv)	such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;	
 
 	(v)	it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (y) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay	
 
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 	the amount demanded by Lessor (subject to such subsequent adjustment), and (z) notwithstanding the amount specified in such demand. Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder; and/or	
 
 	(g)	draw upon the Deposit or the Letter of Credit and apply such amounts to any owing to Lessor hereunder and/or make demand against any Guarantor for any or all of the foregoing.	
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable Law and Lessee shall be liable on an After-Tax basis for, and shall pay Lessor on demand: (i) ***** (by way of contribution to Lessor’s internal costs and expenses) following the occurrence of an Event of Default under paragraph (a) of Schedule 9 and service by Lessor of a default notice on Lessee in respect of such Event of Default, regardless of whether or not such Event of Default is subsequently cured by Lessee after receipt of such default notice (ii) interest on all unpaid amounts at the Interest Rate from the due date until the date of payment in full; (iii) all reasonable legal fees and other reasonable costs and expenses incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto; and (iv) all reasonable expenses, disbursements, costs and fees incurred in (A) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing the Engine or any Part to the condition required by Section 12 ( Return of Engines ) hereof and (B) preparing the Engine or Part for sale or lease, advertising the sale or lease of the Engine or Part and selling or releasing the Engine or Part.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Engine or Part to the condition required by such Section 12 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Engine Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned Lessor, if assignable.
No remedy referred to in this Section 13 is intended to be exclusive, but, to the extent permissible under the Lease or under applicable Law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at Law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Section 13 shall be construed to permit Lessor to obtain a duplicate recovery of any element of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
 
13.3	Power of Attorney : Lessee hereby appoints Lessor as the attorney-in-fact of Lessee, with full authority in the place and stead of Lessee and in the name of Lessee or otherwise, for the purpose of carrying out the provisions of the Lease and taking any action and executing any instrument that Lessor may deem necessary or advisable to accomplish the purposes hereof; provided, however, that Lessor may only take action or execute instruments under this Section 13 after an Event of Default has occurred and is continuing. Lessee hereby declares that the foregoing powers are granted for valuable consideration, constitute powers granted as security for the performance of the obligations of Lessee hereunder and are coupled with an interest and shall be irrevocable. Without limiting the generality of the foregoing or any other rights of Lessor under the Lease, upon the occurrence and during the continuation of an Event of Default, Lessor shall	
 
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 	have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Engine, or the Lease and (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to the Lease, and settle, adjust or compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies.	
 
13.4	Sale or Re-Lease . If an Event of Default occurs and the leasing of the Engine under the Lease is terminated in accordance with the provisions hereof, Lessor may sell or re-lease or otherwise deal with the Engine at such time and in such manner and on such terms as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if the Lease had never been entered into. Lessor shall have no duty or obligation to sell the Engine, and Lessor shall be obligated to attempt to re-lease the Engine only to the extent, if any, that it is required to do so pursuant to the terms hereof or under Article 2A of the UCC, and Lessee hereby disclaims any right to compel Lessor to sell or otherwise re-lease the Engine.	
 
13.5	Removal of Lease from the State of Registry . If an Event of Default occurs, Lessee will at the request of Lessor immediately take all steps necessary to enable the Engine to be redelivered to Lessor in accordance with and free and clear of the Lease and Lessee hereby irrevocably and by way of security for its obligations under the Lease appoints (which appointment is coupled with an interest) Lessor as its attorney-in-fact to execute and deliver any documentation and to do any act or thing not prohibited by Law required in connection with the foregoing during the continuance of an Event of Default. Without limiting the foregoing, Lessor may file with the State of Registry the Lease Termination provided to Lessor under the Lease.	
 
14.	TRANSFER	
 
14.1	Lessee . LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THE LEASE (INCLUDING THE ENGINE LEASE AGREEMENT OR THIS CTA), OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY OF ITS RIGHTS UNDER THE LEASE (INCLUDING THE ENGINE LEASE AGREEMENT OR THIS CTA), AND ANY ATTEMPT TO DO SO SHALL BE NULL AND VOID. The foregoing shall not be construed to prohibit a Permitted Sub-Lease.	
 
14.2	Lessor . Lessor may, without the consent of Lessee, sell, assign, transfer or grant to any Person, any interest in all or any part of Lessor’s rights, obligations, title or interest in any Engine, any Lease and/or any Rent, whereupon such Person shall become the “Lessor” for all purposes of this Lease, including the rights of assignment pursuant to this Section 14.2. Lessee agrees to execute acknowledgments and other documents that may be reasonably requested by Lessor or any assignee hereunder (an “Assignee”). Each Assignee will have and may enforce all of the rights and benefits of Lessor transferred to it as if such Assignee were in fact Lessor, including without limitation the rights to indemnification by Lessee and the right to be named as additional insured and loss payee with respect to the insurance policies maintained by Lessee pursuant to the Lease. Lessor shall reimburse Lessee for all reasonable out of pocket costs and expenses incurred by Lessee in connection with any assignment or transfer under this Section 14.2. Any sale, assignment, transfer or other disposition pursuant to this Section 14.2 shall not increase the obligations of Lessee under the Lease. Notwithstanding any such assignment or transfer, Lessor, Owner, Financing Parties’ Representative and each other Indemnitee shall continue to be entitled to indemnification under Section 10 ( Indemnity ), and shall continue to be named as an additional insured under all Insurances referred to in Section 9 ( Insurance ) for a period of not less than two years after such transfer.	
 
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14.3	Binding on Assignees . The terms and provisions of this Lease shall be binding upon and inure to the benefit of Lessor, Lessee and their respective successors and permitted assigns.	
 
14.4	Conditions	
In connection with any such assignment or transfer by Lessor:
 
 	(a)	Quiet Enjoyment : as a condition precedent to such assignment or transfer becoming effective, Lessor will procure that the transferee or any new owner of the Engine (except where such new owner is also the “Lessor” under the Lease) or any new holder of a security interest over the Engine or any holder of an interest in the Engine or the Lease (by way of security or otherwise), as the case may be, shall execute and deliver to Lessee a letter of quiet enjoyment in respect of Lessee’s use and possession of the Engine in a form substantially similar to Lessor’s covenant in Section 7.1, and other than in the case of an assignment solely for security purposes, shall agree, in writing, for the benefit of Lessee to be bound by and perform all obligations of “Lessor” under the Lease;	
 
 	(b)	Costs : Lessor shall reimburse to Lessee its reasonable out-of-pocket expenses (including reasonable legal fees and expenses) actually incurred in connection with co-operating with Lessor in relation to any such assignment or transfer referred to in this Section 14, provided that (i) such expenses are substantiated to Lessor’s reasonable satisfaction and (ii) no Default has occurred and is continuing;	
 
 	(c)	No additional cost : Lessor shall not be entitled to assign the Lease if at the time of such assignment or transfer an increase in Lessee’s financial or indemnity obligations would result, or Lessee’s rights in respect of the Lease or the Engine would be restricted or diminished in any material way without the express prior written consent of Lessee (which consent shall not be unreasonably withheld );	
 
 	(d)	No alteration of terms : No such assignment or transfer may be made to the extent such assignment or transfer would increase the financial or indemnity obligations of Lessee or diminish the rights of Lessee or result in the performance of its then existing obligations being materially more onerous unless and to the extent expressly consented to by Lessee in writing;	
 
 	(e)	Credit : Lessor shall not, without the prior written consent of Lessee, assign or transfer its obligations under the Lease to an entity having a net worth of less than ***** immediately after the assignment or transfer. This requirement shall not apply if post transfer, the Engine either continues to be managed by GECAS or the relevant assignee’s or transferee’s obligations to Lessee are supported by guarantee otherwise) by an entity with a net worth of at least *****; and	
 
 	(f)	Competitor of Lessee : No such assignment or transfer shall be made by Lessor to an airline or its parent company in competition with Lessee (in the sense that (i) the airline operates a comparable service to that of Lessee on at least ***** of the routes operated by Lessee or (ii) the routes operated by such airline account for at least ***** of the revenue generated by Lessee on such routes).	
 
15.	MISCELLANEOUS	
 
15.1	Survival . Lessee’s obligations under any provision of the Lease providing for an obligation on the part of Lessee to indemnify Lessor or any other Indemnitee shall survive the expiration or any termination of the leasing of the Engine under the Lease and continue in full force and effect. Lessor’s obligations under any provision of the Lease providing for an obligation on	
 
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 	the part of Lessor to pay any amounts due and owing to Lessee following the termination of the leasing of the Engine under the Lease shall survive the expiration or any termination of the Lease and continue in full force and effect.	
 
15.2	Waivers, Remedies Cumulative . The rights of the parties under the Lease mar be exercised as often as necessary, are cumulative and not exclusive of its rights under any Law; and may be waived only in writing and specifically by the party against whom enforcement of such provision is sought. A delay by any party in exercising, or non-exercise of, any such right will not constitute a waiver of that right.	
 
15.3	Delegation . Lessor may delegate to any Person all or any of the rights, powers or discretions vested in it by the Lease, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its reasonable discretion thinks fit; provided however, that the exercise of any such rights, powers or discretions shall always remain subject to and be exercised in accordance with the terms of the Lease and Lessee’s rights in respect thereof.	
 
15.4	Severability . If a provision of the Lease is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect the legality, validity or enforceability in that jurisdiction of any other provision of the Lease or the legality, validity or enforceability in any other jurisdiction of that or any other provision of the Lease.	
 
15.5	Remedy . If Lessee fails to comply with any provision of the Lease and such failure shall continue beyond any applicable cure period, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay upon demand any sums expended by Lessor together with all costs and expenses (including reasonable legal fees and expenses) in connection with the noncompliance.	
 
15.6	Time of Essence . The time stipulated for all payments and the prompt, punctual performance of all obligations under the Lease are of the essence.	
 
15.7	Notices . All notices under, or in connection with, the Lease will, unless otherwise stated, be given in writing by means of an overnight courier service or facsimile. Any such notice is deemed effectively to be given when received by the recipient (or if receipt is refused by the intended recipient, when so refused).	
The addresses and facsimile and telephone numbers of Lessee and Lessor are as set forth in the Engine Lease Agreement.
 
15.8	Governing Law; Jurisdiction; WAIVER OF JURY TRIAL	
 
 	(a)	PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THE LEASE IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES, AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THE LEASE) THE PARTIES AGREE THAT THE LEASE WAS EXECUTED AND DELIVERED IN THE STATE OF NEW YORK.	
 
 	(b)	Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each agree that the United States District Court for the Southern District of New York and any New York court sitting in the	
 
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 	County of New York, New York, and all related appellate courts, are to have nonexclusive jurisdiction to settle any disputes arising out of or relating to the Lease and submits itself and its property to the non-exclusive jurisdiction of the foregoing courts with respect to such disputes.	
 
 	(c)	Without prejudice to any other mode of service, Lessee:	
 
 	(i)	appoints Corporation Service Company (CSC), 1133 Avenue of the Americas, Suite 3100, New York, New York 10036, as its agent for service of process relating to any proceedings before the New York courts in connection with the Lease and agrees to maintain the process agent in New York notified to Lessor;	
 
 	(ii)	agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned;	
 
 	(iii)	consents to the service of process relating to any such proceedings by prepaid mailing of a copy of the process to Lessee’s agent at the address identified in paragraph (i) or by prepaid mailing by air mail, certified or registered mail of a copy of the process to Lessee at the address set forth in Section 15.7.	
 
 	(d)	Each of Lessor and Lessee:	
 
 	(i)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in Section 15.8(b) above on grounds of inconvenient forum or otherwise as regards proceedings in connection with the Lease;	
 
 	(ii)	waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Lease brought in the courts referred to in Section 15.8(b); and	
 
 	(iii)	agrees that a final, non-appealable judgement or order of any court referred to in Section 15.8(b) in connection with the Lease is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.	
 
 	(e)	Nothing in this Section 15.8 limits the right of either party to bring proceedings against the other in connection with the Lease in any other court of competent jurisdiction or concurrently in more than one jurisdiction.	
 
 	(f)	Each of Lessee and Lessor irrevocably and unconditionally:	
 
 	(i)	agrees that if the other brings legal proceedings against it or its assets in relation to the Lease no sovereign or other immunity from such legal proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgement, attachment in aid of execution of a judgement, other attachment, the obtaining of judgement, execution of a judgement or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets; and	
 
 	(ii)	waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign immunities Act of 1976 of the United States and is intended to be irrevocable for the purposes of such Act.	
 
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 	(g)	EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LEASE OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED THEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, including, without limitation, contract claims, tort claims, breach of duty claims and other common law and statutory claims. Each of Lessor and Lessee represents and warrants that each has reviewed and voluntarily waives its jury trial rights following consultation with its legal counsel. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LEASE. In the event of litigation, this Section may be filed as & written consent to a trial by the court.	
 
15.9	Sole and Entire Agreement; True Lease	
 
 	(a)	Entire Agreement : The Lease is the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Engine, and supersedes all previous agreements in relation to that leasing. Any amendments to the Lease must be made in writing and signed on behalf of Lessor and Lessee.	
 
 	(b)	True Lease : The parties intend and agree that the Lease:	
 
 	(i)	constitutes a “true lease”, and not a “security interest” as defined in Section1-201(37) of the UCC;	
 
 	(ii)	constitutes a “true lease” for United States Federal income tax purposes; and	
 
 	(iii)	confers only a leasehold interest on Lessee in and to the Engine on and subject to the terms of the Lease, and no ownership or other interest with respect to the Engine is provided to Lessee under the Lease.	
Subject to Section 8.6(b), Lessee shall not file a tax return that is inconsistent with the provisions of this Section 15.9(b).
 
15.10	Beneficiaries . The Lease shall be binding upon and inure to the benefit of Lessor, Lessee and their permitted successors and assigns. All rights expressed to be granted to each Indemnitee (other than Lessor) under the Lease are given to Lessor on behalf of that Indemnitee, and each Indemnitee is an express third party beneficiary thereof.	
 
15.11	Counterparts . The Lease may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that the Lease constitutes chattel paper (as such term is defined in the UCC or similar legislation), no security interest in the Lease may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of the Engine Lease Agreement by Financing Parties’ Representative, Owner or Lessor, as the case may be.	
 
15.12	Language . All notices to be given under the Lease will be in English. All documents delivered to Lessor pursuant to the Lease (including any documents to be delivered pursuant to the Conditions Precedent) will be in English, or if not in English, will be accompanied by a certified English translation.	
 
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16.	DISCLAIMERS AND WAIVERS	
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN SECTIONS 16.1 TO 16.4 BELOW SHALL APPLY AT ALL TIMES DURING THE TERM. LESSEE’S ACCEPTANCE OF THE ENGINE IN ACCORDANCE WITH SECTION 4.3 ( DELIVERY AND ACCEPTANCE ) SHALL BE CONCLUSIVE EVIDENCE AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS FULLY INSPECTED THE ENGINE AND EVERY PART THEREOF AND THAT THE ENGINE, THE PARTS AND THE ENGINE DOCUMENTS ARE TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE DELIVERY CONDITION REQUIREMENTS AND ARE IN SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE.
 
16.1	Exclusion . THE ENGINE IS LEASED AND DELIVERED UNDER THE LEASE “ AS IS , WHERE IS ,” AND LESSEE AGREES AND ACKNOWLEDGES THAT:	
 
 	(a)	LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE ACCEPTED, MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THE LEASE OR OTHERWISE), ANY GUARANTEES, COVENANTS, WARRANTIES OR REPRESENTATIONS (OTHER THAN AS SET FORTH IN SCHEDULE 2 HERETO IN RELATION TO LESSOR), EXPRESS OR IMPLIED, WITH RESPECT TO, THE ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THE LEASE, INCLUDING (BUT NOT LIMITED TO) THE TITLE  (EXCEPT AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 7.1 ( QUIET ENJOYMENT )), DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY , QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE , VALUE, DURABILITY, DATE PROCESSING, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE) WITH RESPECT TO THE ENGINE OR ANY PART OR. ANY SERVICES PROVIDED BY LESSOR UNDER THE LEASE; AND	
 
 	(b)	LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE, MISREPRESENTATION OR STRICT LIABILITY OF LESSOR OR OTHERWISE) FOR:	
 
 	(i)	ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH (EXCEPT FOR DIRECT DAMAGES DUE TO LESSOR’S BREACH AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 7.1 ( QUIET ENJOYMENT ) HEREOF);	
 
 	(ii)	THE USE, OPERATION OR PERFORMANCE OF THE ENGINE OR ANY RISKS RELATING THERETO;	
 
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 	(iii)	ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT (EXCEPT FOR DIRECT DAMAGES DUE TO LESSOR’S BREACH AS PROVIDED IN SECTION 7.1), SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR	
 
 	(iv)	THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE ENGINE OR ANY PART.	
 
16.2	Waiver . LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY CONDITION, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF ANY OF THE MATTERS REFERRED TO IN SECTION 16.1.	
 
16.3	Disclaimer Of Consequential Damages .	
 
 	(a)	LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, FOR INTERRUPTION OF SERVICE, LOSS OF BUSINESS, LOST PROFITS OR REVENUES OR CONSEQUENTIAL DAMAGES (AS DEFINED IN SECTION 2A-520 OF THE UCC OR OTHERWISE) OR ANY SPECIAL OR INDIRECT DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF LESSOR CONTAINED IN THE LEASE (INCLUDING A BREACH BY LESSOR UNDER SECTION 7.1).	
 
 	(b)	LESSOR AGREES THAT IT SHALL NOT BE ENTITLED (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN) TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER CONSEQUENTIAL DAMAGES OR ANY SPECIAL DAMAGES AS A RESULT OF ANY BREACH OF ALLEGED BREACH BY LESSEE OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF LESSEE CONTAINED IN THE LEASE.	
 
16.4	Confirmation . LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS SECTION 16 AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THE LEASE HAVE BEEN CALCULATED BASED ON ITS PROVISIONS.	
 
17.	BROKERS AND OTHER THIRD PARTIES	
 
17.1	No Brokers . Each of the parties hereby represents and warrants to the other that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of the Lease, to any Person (other than fees payable to legal advisers or portfolio services).	
 
17.2	Indemnity . Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, reasonable legal fees and expenses) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the Lease or the Engine, if such claim, suit, damage, cost or expense arises out of any breach by the indemnifying party, its employees or agents of Section 17.1.	
 
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IN WITNESS WHEREOF the parties hereto have duly executed and delivered this Common Terms Agreement on the date shown at the beginning of the document.

GE COMMERCIAL AVIATION SERVICES LIMITED	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V.	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	

SCHEDULE 1
DEFINITIONS
The following words and expressions have the respective meanings set forth below:
Act means the Federal Aviation Act of 1958 , as amended, and as recodified in Title 49 U.S.C. pursuant to public Law 103-272, or any similar legislation of the United States enacted in substitution or replacement thereof.
AD or AD/CN means an airworthiness directive or equivalent issued by the State of Design or the State of Registry.
Affiliate means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 50% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
After-Tax Basis means in the case of any amount payable on an “After-Tax Basis” to or for the benefit of any Person (including any amount payable pursuant to this definition), after deduction of the net amount of all Taxes required to be paid by such Person with respect to the receipt or accrual by it of such amount (and assuming that such Person is subject to (i) United States federal income tax at the highest marginal statutory rate imposed on corporations in the highest taxable income bracket for the relevant period, (ii) United States state and local income taxes at the composite of the highest marginal statutory rates imposed on such Person for the relevant period, as such composite rate shall be certified by a financial officer of such Person, and (iii) income taxes (if any) imposed by countries outside the United States at the actual rates imposed on such Person), that Person receives the required amount.
Air Authority means the civil aviation authority (howsoever described) of the State of Registry.
Appraisal Procedure means the following procedure for determining the “fair market rental value” of the Engine: (a) Lessor shall, acting reasonably, select two (2) internationally recognized and independent engine appraisers who shall make a determination of “fair market rental value” of the Engine based on customary market practices and procedures, and the “fair market rental value” assessed by such two appraisers shall be averaged to the extent to which there is a difference in the values assessed by such appraisers; and (b) the reasonable fees and expenses of the appraisers shall be paid by Lessee. “Fair market rental value” shall mean the value determined by an appraisal completed on an “as-is” and “where-is” basis which would be obtained in an arm’s length transaction between an informed and willing lessee under no compulsion to lease and an informed and willing lessor in possession and under no compulsion to lease, assuming a lease term equal to the remaining Term of the Lease (determined without reference to any right of Lessor to cancel the leasing of the Engine whether or not such right is exercised).
Business Day means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York or Mexico City are authorized or required by Law to be closed.
Cape Town Convention means the Convention on International Interests in Mobile Equipment and its Protocol on Matters Specific to Aircraft Equipment, concluded in Cape Town on 16 November 2001.
Certificate of Acceptance means a certificate of acceptance in the form of Schedule 5 ( Certificate of Acceptance ).
CSN means Engine Cycles since new.
 
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CSO means Engine Cycles since overhaul.
CTA the meaning given in the heading of this Agreement.
Default means any Event of Default or any event or circumstance which, with the giving of notice and/or lapse of time and/or determination of materiality and/or fulfillment of any other condition, would constitute an Event of Default.
Delivery means delivery of the Engine by Lessor to Lessee under the Lease.
Delivery Date means the date on which Delivery occurs.
DER means a designated engineering representative.
Dollars and $ means the lawful currency of the United States.
EASA means the European Aviation Safety Agency.
EMM means the Manufacturer’s Engine Maintenance Manual.
Engine means each Engine as defined in one or more Engine Lease Agreements, including any engine stand and any other equipment related to any Engine as described in and subject to that Engine Lease Agreement and in each case includes all modules and Parts from time to time belonging to or installed in that Engine but excludes any properly replaced Part, title to which has passed to Lessee pursuant to the Lease.
Engine Cycle means operation of an Engine on a Related Airframe from and including a take-off to and including the landing of that Related Airframe.
Engine Documents means the documents, data and records identified in the list attached to the Certificate of Acceptance, and any other documents and records required in connection with Lessee’s obligations under Section 8.8 ( Records ), and all additions, renewals, revisions and replacements from time to time made to any of the foregoing in accordance with the Lease.
Engine Flight Hour means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of a Related Airframe on which such Engine is installed leave the ground until the wheels of such Related Airframe next touch the ground.
Engine Lease Agreement means an Engine Lease Agreement entered, or to be entered into, between Lessor and Lessee with respect to an Engine and any related equipment as further described therein.
Engine Refurbishment means, with respect to any Engine, the complete visual inspection and repair as necessary in accordance with the shop manual of the combustion section of an Engine in an engine repair/overhaul station, including, (without limitation) complete unsticking of the high pressure turbine and low pressure turbine (including both high and low compressors); complete visual inspection, de-blading of discs as required; visual inspections of all discs; verification that all snap diameters on discs are within limits; inspection of all blades for proper chord dimensions and cracking; repair or replacement of all blades below minimums; inspection and repair of stators as necessary; blade-up of discs using new lock plates; assembly of rotors in the turbine; balance of all rotors; and installation of rotors in the Engine.] [ Modified wording is necessary for Rolls-Royce engines: please refer to Engine Management .]
Equipment Change has the meaning given in Section 8.12 ( Equipment Change ).
Event of Default means any event or condition specified in Schedule 9 ( Events of Default ).
 
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Event of Loss means with respect to any Engine:
 
 	(a)	the actual or constructive, compromised, arranged or agreed total loss of the Engine; or	
 
 	(b)	the Engine being destroyed, damaged beyond reasonable economic repair as determined by Lessor (acting reasonably) or permanently rendered unfit for normal use for any reason whatsoever; or	
 
 	(c)	the Engine being condemned, confiscated or requisitioned for title, or title to the Engine being otherwise compulsorily acquired by the government of the State of Registry or any other Government Entity, but excluding requisition for use not involving requisition of title; or	
 
 	(d)	the Engine being hijacked, stolen, confiscated, detained, seized, condemned or requisitioned for use or hire for the lesser of (i) a period of more than 30 days (or 90 days in the case of requisition for use or hire by the government of the State of Registry) or (ii) a period equal to or exceeding the remaining balance of the Term; or	
 
 	(e)	as a result of any rule, regulation, order or other action by the FAA or the Air Authority the use of the Engine by Lessee or any Permitted Sub-Lessee shall have been prohibited for a period of twelve (12) consecutive months.	
Expiry Date means the Scheduled Expiry Date or, if earlier (i) the date when Lessor acting in accordance with the provisions of the Lease, terminates the leasing of the Engine to Lessee under the Lease, or (ii) subject to the provisions of Section 11.1 ( Events of Loss ) and 11.2 ( Requisition ), the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lease and the Other Agreements following an Event of Loss; provided, that if the Term is extended pursuant to Section 12.2 ( Non-Compliance ), the Expiry Date shall be extended to the date to which the Term is extended pursuant to Section 12.2.
FAA means the Federal Aviation Administration of the United States and any successor thereof.
FAR means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations, as amended and modified from time to time.
FAR Part 121 means Part 121 of the FAR, as amended or modified from time to time.
FAR Part 145 means Part 145 of the FAR, as amended or modified from time to time.
Final Inspection has the meaning given in Section 1.1 of Schedule 6 ( Procedures and Operating Condition at Redelivery ).
Financial Indebtedness means any indebtedness in respect of:
 
 	(a)	moneys borrowed or raised;	
 
 	(b)	any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security;	
 
 	(c)	the acquisition cost of any asset to the extent payable before or after the time of acquisition or possession (exclusive of trade payables); or	
 
 	(d)	any guarantee, indemnity or similar assurance against financial loss of any person in respect of the above.	
 
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Financial Information means:
 
 	(a)	as soon as available but not in any event later than 60 days after the last day of each fiscal quarter of Lessee, the consolidated financial statements of Lessee (consisting of a balance sheet and statements of operations and of retained earnings and cash flows) prepared for the most recent previous fiscal quarter certified by a qualified financial officer of Lessee as being true and correct and fairly presenting its financial condition and results of operation in accordance with GAAP (subject to year-end adjustments); and	
 
 	(b)	as soon as available but not in any event later than 120 days after the last day of each fiscal year of Lessee, the audited combined financial statements of Lessee (consisting of a balance sheet and statements of operations and of retained earnings and cash flows), prepared for the fiscal year then most recently ended certified by the independent auditors of Lessee without qualification.	
Financing Statements means UCC Financing Statements in respect of the Lease and the Engines leased thereunder prepared in a form acceptable for filing with the applicable Government Entities in the state in which Lessee’s chief executive office is located (as the term “chief executive office” is defined in Article 9 of the UCC as in effect in such state) and such other jurisdictions as Lessor shall reasonably require.
FOD means foreign object damage.
GAAP means, unless otherwise agreed by Lessor and Lessee in writing, generally accepted accounting principles in the United Mexican States.
GE Capital means General Electric Capital Corporation.
GECAS means either or both of GE Commercial Aviation Services, LLC and GE Commercial Aviation Services Limited.
Government Entity means (a) a national government, political subdivision thereof, or local jurisdiction therein; (b) any instrumentality, board, commission, court, or agency of any of the above, however constituted; and (c) any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
Guarantee means, if applicable, a guarantee in form and substance reasonably acceptable to Lessor, and references to the Guaranty include any replacement or re-issued guaranty.
Habitual Base means the location of the Engine’s primary base of operation, as specified in the Engine Lease Agreement.
IFSD means in-flight service difficulty.
Insurance means the insurance in respect of the Engine in form and substance satisfactory to Lessor, and includes any insurance and reinsurance required by Section 9 ( Insurance ) and Schedule 7 ( Insurance Requirements ).
International Registry means the registry established pursuant to the Cape Town Convention.
Law means and includes (a) any statute, decree, constitution, regulation, order, judgement or other directive of any Government Entity; (b) any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any Law described in (a), (b) or (c) above.
 
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Lease means an Engine Lease Agreement for an Engine (of which this CTA forms a part), any schedules or documents executed pursuant to the Schedules hereto or pursuant to the Engine Lease Agreement, any Lease Supplement to the Lease, and any side letters related to the Lease.
Lease Termination means a Certificate of Lease Termination, substantially in the form of Schedule 10 ( Form of Lease Termination Certificate ).
Lessee Conditions Precedent means the conditions specified in Part B of Schedule 3 ( Conditions Precedent ).
Lessor Conditions Precedent means the conditions specified in Part A of Schedule 3 ( Conditions Precedent ).
Lessor Lien means any Security Interest whatsoever from time to time created by Lessor or Owner in connection with the financing of the Engine, including the Financing Documents, and any other Security Interest in the Engine which results from acts or omissions of or claims against Lessor or Owner that do not relate to the transactions contemplated by the Lease and is not attributable to Lessee.
Lessor Taxes means Taxes for which Lessee is not obligated to indemnify Lessor and/or Owner and/or a Financing Party as provided in Section 5.8 ( Lessor Taxes ).
Letter of Credit means any letter of credit issued in relation to the Lease pursuant to Section 5.14 ( Letter of Credit ) and any replacement or renewal of that letter of credit.
Line Maintenance means with respect to any Engine, routine scheduled line maintenance of any Engine, including without limitation, preventive maintenance tests, system checks and related necessary work as recommended by Manufacturer or required by the Air Authority.
LLP means life limited Parts.
Losses means any and all cost, expense (including any and all reasonable legal fees and expenses and the fees and expenses of other professional advisers), claims, proceedings, losses, liabilities, obligations, damages (whether direct, indirect, special, incidental or consequential), suits, judgements, fees, penalties or fines (whether criminal or civil) of any kind or nature whatsoever, including any of the foregoing arising or imposed with or without any Indemnitee’s fault or negligence, whether passive or active or under the doctrine of strict liability.
Maintenance Adjustment means an amount as specified in the Engine Lease Agreement in respect of Engine Supplemental Rent and Engine LLP Supplemental Rent.
Maintenance Contributions means, as and if applicable, all amounts payable by Lessor pursuant to Section 7.2 ( Maintenance Contributions ).
Maintenance Performer means such Person as is approved by the Air Authority to perform maintenance and/or modification services on commercial aircraft engines, which Person shall be agreed by Lessee and Lessor to have recognized standing and experience, and suitable facilities and equipment to perform such services on aircraft engines of the same or improved model as the Engines.
Maintenance Program means an Air Authority and FAA approved maintenance program for the Engine in accordance with the Manufacturer’s specifications, service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance, condition-monitored
 
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maintenance, and/or on-condition maintenance of Engines and Parts, including servicing, testing. preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, engineering orders, ADs, corrosion control, inspections and treatments.
Manufacturer means the manufacturer of each Engine or any separate item of Equipment as identified in Schedule A to each Engine Lease Agreement.
MPD means Manufacturer’s Maintenance Planning Document.
Nameplate Inscription means the inscription to be included on the Nameplates as reasonably requested by Lessor from time to time.
Nameplates means the fireproof plates to be installed on the Engine in accordance with Section 8.6(a).
OEM means, in relation to any Part, the original equipment manufacturer of such Part.
Other Agreements means any aircraft, engine or spare parts related lease or financing agreement or other agreement (including an aircraft, engine or spare parts related loan, hire purchase, conditional sale, credit sale or security agreement) from time to time entered into between Lessor (or any Subsidiary, Associate or Affiliate of Lessor), on the one hand, and Lessee on the other hand.
Part means, whether or not installed on any Engine:
 
 	(a)	any component, module, furnishing or equipment (other than a complete Engine or engine) incorporated or installed in or attached to or furnished with the Engine on the Delivery Date or thereafter if paid for or otherwise provided by or on behalf of Lessor; and	
 
 	(b)	any other component, furnishing or equipment (other than a complete Engine or engine), with effect from the time when title thereto has passed to Owner pursuant to the Lease;	
 
 	(c)	but excludes any such items title to which has passed to Lessee pursuant to the Lease.	
Part 121 or FAR Part 121 means Part 121 of the FAR, as amended or modified from time to time.
Permitted Lien means:
 
 	(a)	any lien for Taxes not assessed or, if assessed, not yet due and payable, or being diligently contested in good faith by appropriate proceedings;	
 
 	(b)	any lien of a repairer, mechanic, hangar-keeper, airport or air navigation authority or other similar lien arising in the ordinary course of business by operation of Law in respect of obligations which are not overdue or are being diligently contested in good faith by appropriate proceedings;	
 
 	(c)	any Lessor Lien;	
 
 	(d)	the rights of Lessor and Lessee respectively under the Lease; and	
 
 	(e)	rights of others under any sub-lease or arrangements to the extent expressly permitted under Section 8.4 ( Subleasing );	
but only if (in the case of both (a) and (b)) (i) adequate reserves have been provided by Lessee for the payment of such Faxes or obligations; and (ii) such proceedings, or the continued existence of the lien. do not give rise to any risk of the sale, forfeiture or other loss of the Engine or any interest therein or of criminal liability on the part of Lessor or Owner.
 
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Permitted Sub-Lease means any sub-lease of the Engine to a Permitted Sub-Lessee to which Lessor has consented as provided for in Section 8.4(a) ( Subleasing ).
Permitted Sub-Lessee means any sub-lessee of the Engine to which Lessor has consented as provided in Section 8.4(a) ( Subleasing ).
Person means any individual person, any form of corporate or business association, trust, Government Entity, or organization or association of which any of the above is a member or a participant.
Pre-Delivery Procedure means the procedure leading to Delivery as specified in Schedule 4  ( Pre-Delivery Procedures and Delivery Condition Requirements ).
Protocol means the Protocol to the Cape Town Convention On Matters Specific To Aircraft Equipment signed in November 2001, which is sometimes also referred to as the “Aircraft Equipment Protocol.”
QEC means quick engine change kits as specified in the Engine Lease Agreement.
Recognition of Rights Agreement means an executed acknowledgement substantially in the form of Schedule 11 ( Recognition of Rights Agreement ).
Regulations means any Law or regulation, official directive or recommendation, mandatory requirement, or contractual undertaking, or airworthiness requirements or limitations, which applies to Lessee or the Engine and any Law or regulation, official directive or recommendation or mandatory requirement which applies to Lessor, Owner, Financing Parties’ Representative or GECAS.
Related Airframe means with respect to any Engine, the airframe, of the Related Airframe Type, on which such Engine is, or is to be, installed, as identified in the Engine Lease Agreement or otherwise, but such airframe shall be a Related Airframe only so long as the Engine is so installed thereon, being installed thereon or being removed therefrom.
Related Airframe Type has the meaning given in the Engine Lease Agreement.
Rental Period means each period ascertained in accordance with Section 5.2 ( Rental Periods ).
Rent Date means the first day of each Rental Period.
Required LC Expiry Date means the date being ninety-one (91) days after the Expiry Date.
Return Occasion means the date on which the Engine is redelivered to Lessor in accordance with Section 12 ( Return of Engines ).
SB means service bulletin.
Scheduled Delivery Date is defined in the Engine Lease Agreement or, if no such date is defined therein, the date notified to Lessee by Lessor pursuant to Section 4.1(a).
Scheduled Delivery Month is defined in the Engine Lease Agreement.
Security Interest means any mortgage, chattel mortgage, security interest, charge, pledge, lien, conditional sale agreement, title retention agreement, equipment trust agreement, encumbrance, assignment, hypothecation, right of detention, right of set-off or any other agreement or arrangement having the effect of conferring security.
 
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State of Design means the state having jurisdiction over the Person responsible for the type design of the Engine or Part.
State of Incorporation means the state of organization of the applicable Person as identified in the heading of the Engine Lease Agreement.
State of Registry means the state of registry of any Related Airframe as defined in the Engine Lease Agreement.
Subsidiary means:
 
 	(a)	in relation to any reference to financial statements, any Person whose financial statements are consolidated with the accounts of Lessee in accordance with GAAP; and	
 
 	(b)	for any other purpose, an entity from time to time of which another has direct or indirect control or owns directly or indirectly more than 50 percent of the voting share capital or similar equity interests.	
Supplemental Rent means, as and if applicable, all amounts payable under the Lease in respect of each of Engine Supplemental Rent and Engine LLP Supplemental Rent.
Taxes means any and all present and future taxes, duties, withholdings, levies, assessments, imposts, fees and other governmental charges of all kinds (including any value added or similar tax and any stamp, documentary, license, registration or similar fees or tax) imposed by a Government Entity, together with any penalties, fines, surcharges and interest thereon and any additions thereto.
Technical Report means a monthly report of the Engine Flight Hours and Engine Cycles operated by the each Engine in respect of each calendar month in the form reasonably required by Lessor.
Term means the period commencing on the Delivery Date and ending on the Expiry Date.
TSN means time (Engine Flight Hours) since new.
TSO means time (Engine Flight Hours) since overhaul.
UCC means the Uniform Commercial Code as in effect in the State of New York.
United States means the United States of America.
U.S.C. means the United States Code .
The terms Ad Compliance Period, Agreed Value, Annual Supplemental Rent Adjustment, Assumed Ratio, Damage Notification Threshold, Deductible Amount, Delivery Condition Requirements, Deposit, Delivery Location, Discount Rate, Engine Cycles Restriction, Engine Flight Hours Restriction, Engine LLP Supplemental Rent, Engine Supplemental Rent, Final Delivery Date, Financing Documents, Financing Parties, Financing Parties Representative, Guarantor, Indemnitee, Interest Rate, Lessee, Lessor, Lessor’s Account, Manufacturer, Minimum Component Calendar Life, Minimum Engine Cycles, Minimum Engine Flight Hours, Minimum Liability Coverage, Modification Approval Amount, Owner, Pre-Approved Bank, Pre-Approved Sub-Lessee, Redelivery Location, Rent, Rent Commencement Date, Scheduled Delivery Date, Scheduled Delivery Month, Scheduled Expiry Date, Spares Deductible Amount, and Tax Indemnitee are all defined in the Engine Lease Agreement.
 
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SCHEDULE 2
REPRESENTATIONS AND WARRANTIES
 
1.1	Lessee’s Representations and Warranties	
Lessee’s representations and warranties to Lessor as of the date of execution of the Lease and the Delivery Date are as follows:
 
 	(a)	Status : It is duly organized as a company (sociedad anónima de capital variable), validly existing and in good standing (according to all Regulations applicable to Lessee) in its State of Incorporation.	
 
 	(b)	Licenses : It is an air carrier with a concession to transport passengers, mail and cargo throughout Mexico on scheduled flights, is registered, licensed or otherwise certified by the Ministry of Communication and Transportation (Secretaría de Comunicaciones y Transportes) authorizing it to engage in such air transportation.	
 
 	(c)	Non-Conflict : Execution, delivery and performance of the Lease do not contravene or breach any Regulation applicable to Lessee.	
 
 	(d)	Power and Authority : It has all corporate and other power and authority to execute, deliver and perform the Lease, and the Lease has been duly authorized, executed and delivered by Lessee.	
 
 	(e)	Legal Validity : The Lease is its legal, valid and binding obligation, enforceable against Lessee in accordance with its terms, except to the extent the same may be limited by insolvency, bankruptcy, moratorium and other laws affecting creditors’ rights in general and general principles of equity.	
 
 	(f)	No Event of Default : No Event of Default has occurred and is continuing or would occur because of Delivery.	
 
 	(g)	Litigation : It is not involved in any litigation or other dispute which, if adversely determined, would materially and adversely affect its financial condition or its ability to perform its obligations under the Lease.	
 
 	(h)	Financial Information : Its audited financial statements most recently delivered to Lessor:	
 
 	(i)	have been prepared in accordance with GAAP; and	
 
 	(ii)	are true and correct and present fairly the financial condition and results of operations of Lessee as at the date thereof and for the period then ending.	
 
 	(i)	Full Disclosure : Neither the audited financial statements referred to in paragraph (g) nor any other financial, operational or credit related information provided to Lessor by Lessee for the purposes of the Lease contains as of the date thereof any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading in the light of the circumstances under which they were made.	
 
 	(j)	Location : Lessee’s chief executive office (as that term is defined in Article 9 of the UCC) is located at the address set forth in the heading of the Engine Lease Agreement; and the records of the Lessee concerning the Engine are maintained at such chief executive office or at the Habitual Base of the Engine.	
 
 	(k)	Material Adverse Change : there has been no material adverse change in the financial condition or operations of Lessee or in the ability of Lessee to comply with its obligations under the Lease since the date of the financial statements most recently provided to Lessor on or prior to the date of the Engine Lease Agreement.	
 
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1.2	Lessor’s Representations and Warranties	
Lessor’s representations and warranties to Lessee as of the date of execution of the Lease and the Delivery Date are as follows:
 
 	(a)	Status : It is duly organized, validly existing and in good standing in its State of Incorporation and is an Affiliate of GE Commercial Aviation Services Limited.	
 
 	(b)	Non-Conflict : Execution, delivery and performance of the Lease do not contravene or breach any Regulation applicable to Lessor.	
 
 	(c)	Power and Authority : It has all corporate and other power and authority to execute, deliver and perform the Lease, and the Lease has been duly authorized, executed and delivered by Lessor.	
 
 	(d)	Legal Validity : The Lease is its legal, valid and binding obligation, enforceable against Lessor in accordance with its terms.	
 
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SCHEDULE 3
CONDITIONS PRECEDENT
Part A - Lessor Conditions Precedent
The conditions precedent to Lessor’s obligation to deliver and to commence the leasing of the Engine are as follows. All documents delivered to Lessor pursuant to this Schedule 3 will be in English, or if not in English will be accompanied by a certified English translation:
 
1.1	Preliminary Conditions	
Lessor will receive from Lessee, prior to the Scheduled Delivery Date, each of the following, reasonably satisfactory in form and substance to Lessor:
 
 	(a)	Opinion(s) : if requested by Lessor, forms of the opinion(s) substantially conforming to Schedule 8 ( Form of Lessee’s Legal Opinion ) that will be issued on the Delivery Date by legal counsel(s) reasonably acceptable to Lessor (which Lessor agrees may be Lessee’s in-house counsel) with respect to the laws of the State of Incorporation, the State of Registry and, if different from the preceding jurisdictions, the Habitual Base and the state where Lessee is situated (as provided in Article 4 of the Cape Town Convention), including filing for due recordation of the Lease and the Financing Documents and filing of notice in the International Registry, if applicable;	
 
 	(b)	Approvals : (i) evidence that Lessee has elected to consider the Engine as part of its assets for the purpose of the Mexican Asset Tax Law (Ley del Impuesto al Activo), in the form of a letter from Lessee to the Mexican Ministry of Finance and Public Credit in which Lessee makes such election, file-stamped to evidence receipt by such Ministry; and (ii) evidence of issue of all other applicable approvals, licenses and consents, if any, which are required in relation to, or in connection with the performance by Lessee of any of its obligations under the Lease;	
 
 	(c)	Import : evidence that any required license, and all customs formalities, relating to the import of the Engine into the Habitual Base have been obtained or complied with, and that the import of the Engine into the Habitual Base is exempt from Taxes;	
 
 	(d)	Process Agent : a letter from the process agent appointed by Lessee in the Lease accepting that appointment, together with a copy of a power of attorney granted by Lessee to each such process agent in accordance with the requirements of Mexican law empowering such process agent to accept process on behalf of Lessee in connection with any legal proceeding in substantially the form of Schedule 13 (which copy shall be certified by an officer of Lessee as a true and complete copy of the power of attorney);	
 
 	(e)	Licenses : copies of Lessee’s air transport license;	
 
 	(f)	Title : copies of the historical bills of sale for the Engine establishing valid title thereto;	
 
 	(g)	UCC : Financing Statements with respect to the Lease and, if applicable, the Engine in a form reasonably acceptable to Lessor shall have been delivered by Lessee to Lessor and Lessee hereby authorizes Lessor to file such Financing Statements duly completed in accordance with the terms of the Lease with the appropriate authority in each jurisdiction reasonably required by Lessor;	
 
 	(h)	Deregistration Authorisation : a notarised and legalized Power of Attorney substantially in the form of Schedule 12A and, if the Cape Town Convention including Article XIII of the Protocol is applicable to this Lease, an irrevocable	
 
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 	deregistration and export request authorisation substantially in the form of Schedule 12B attached in each case (in both English and Spanish) duly executed by Lessee and each shall comply with the requirements of Mexican law and where necessary or advisable, shall be filed, registered and/or recorded with the appropriate authorities;	
 
 	(i)	Letter of Credit (if applicable): the form of the Letter of Credit;	
 
 	(j)	General : such other documents as Lessor may reasonably request.	
 
1.2	Final Conditions	
 
 	(a)	Final Documents : Lessor shall receive on or before the Delivery Date each of the following:	
 
 	(i)	Certificate of Acceptance and Engine Lease Agreement : each of the Certificate of Acceptance and Engine Lease Agreement, dated and fully completed, and executed by Lessee, and, in the case of the Engine Lease Agreement, filed (together with the CTA) for recording at the Air Authority ;	
 
 	(ii)	Opinions : a signed original (or facsimile transmission thereof) of each of the opinions referred to in Section 1.1(a) of this Schedule 3 , dated the Delivery Date;	
 
 	(iii)	Payments : all sums due to Lessor under the Lease on or before the Delivery Date, including the first payment of Rent and, if applicable, the balance of the Deposit;	
 
 	(iv)	Insurance : certificates of insurance, an opinion and undertaking from Lessee’s insurance broker and other evidence reasonably satisfactory to Lessor that Lessee is taking the required steps to ensure due compliance with the provisions of the Agreement as to Insurance with effect on and after the Delivery Date;	
 
 	(v)	Financial Information : the latest Financial Information of Lessee requested by Lessor;	
 
 	(vi)	Letter of Credit (if applicable): the Letter of Credit;	
 
 	(vii)	Guarantee (if applicable): the Guarantee, duly executed and delivered by the Guarantor, and an opinion of legal counsel acceptable to Lessor (which Lessor agrees may be Lessee’s in-house counsel) in respect of the Guarantee in form and substance reasonably acceptable to Lessor and its legal counsel;	
 
 	(viii)	Lessee’s Maintenance Program : such information and documents relating to the Lessee’s Maintenance Program as Lessor may reasonably require;	
 
 	(ix)	Filings : evidence that on the Delivery Date all filings, registrations, recordings and other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of the Lease and to protect the interests of Owner and, if applicable, the Financing Parties in the Engine or any Part and in the Lease, with notice thereof filed in the International Registry, if applicable;	
 
 	(x)	Acknowledgement and Agreement re Assignment (if applicable): an acknowledgement of and certain agreements with respect to the assignment	
 
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 	by Lessor of this Lease to Owner and Financing Parties’ Representative in the form previously provided to Lessee or as Owner or Financing Parties Representative may otherwise reasonably request; and	
 
 	(xi)	Purchase Agreement : if applicable, the Purchase Agreement relating to the purchase by Lessor of the Engines from Lessee has been duly executed and delivered, the delivery condition requirements have been satisfied in full and no default or breach of such Agreement has occurred or is continuing.	
 
 	(b)	Representations/Warranties : the representations and warranties of Lessee in Schedule 2 ( Representations and Warranties ) shall be true and correct in all material respects, and would be true and correct in all material respects if repeated on Delivery; and	
 
 	(c)	No Event of Default : no Event of Default shall have occurred and be continuing on Delivery or could reasonably be expected to result from the leasing of the Engine to Lessee under the Lease.	
 
1.3	Conditions Subsequent to be satisfied by Lessee	
Lessee shall comply with the following conditions subsequent:
 
 	(a)	No later than thirty (30) Business Days from the Delivery Date but prior to the operation of the Engine, provide evidence that Lessee has added the Engine to its fleet;	
 
 	(b)	No later than thirty (30) Business Days from but not including the Delivery Date, Lessee shall provide to Lessor evidence that Lessee has received all required import licenses and customs clearances relating to the import of the Engine into the Habitual Base, which evidence shall include, but not be limited to, a copy of the temporary import license for the Engine (pedimento de importación);	
 
 	(c)	No later than forty-five (45) Business Days from the Delivery Date, Lessee shall provide Lessor with evidence reasonably satisfactory to Lessor that the Lease has been filed with the Air Authority and as soon as the same shall become available, Lessee shall provide Lessor with a certified true copy of the Air Authority’s confirmation of the registration of the Lease; and	
 
 	(d)	Prior to installing the Engine on any Related Airframe, Lessee shall obtain from any person to whom possession of an Engine is given, and from the lessor of any Related Airframe and from any holder of a Security Interest in any Related Airframe, a Recognition of Rights Agreement unless the applicable lease/security document relating to such Related Airframe contains a provision whereby the lessor and/or owner of the Related Airframe recognize the rights of lessors and owners of spare engines attached from time to time on the Related Airframe, subject to such provision being disclosed to Lessor and being acceptable to Lessor in its reasonable discretion prior to such installation occurring. In addition, Lessee shall provide Lessor with a copy of the Certificate of Airworthiness and Registration for each Related Airframe prior to installation of the Engine on such Related Airframe.	
Part B - Lessee Conditions Precedent
The conditions precedent to Lessee’s obligation to accept and to commence the leasing of the Engine are as follows. All documents delivered to Lessee pursuant to this Schedule 3 will be in English.
 
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 	(a)	Final Documents : Lessee shall receive on or before the Delivery Date for the Engine each of the following:	
 
 	(i)	Engine Lease Agreement : the applicable Engine Lease Agreement, dated and executed by Lessor and filed (together with the CTA) for recording at the Air Authority; and	
 
 	(ii)	Acknowledgement re Quiet Enjoyment : if Lessee is required to deliver an acknowledgement of or agreement with respect to the assignment by Lessor of the Lease to Owner or Financing Parties’ Representative, an agreement by each such Person (Owner, Financing Parties’ Representative or both, as the case may be) as to itself to the effect set forth in Section 7.1 ( Quiet Enjoyment );	
 
 	(b)	Representations/Warranties : the representations and warranties of Lessor in Schedule 2 ( Representations and Warranties ) shall be true and correct in all material respects, and would be true and correct in all material respects if repeated on Delivery; and	
 
 	(c)	Delivery Condition Requirements : tender by Lessor of delivery of the Engine incompliance with the Delivery Condition Requirements.	
 
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SCHEDULE 4
PRE-DELIVERY PROCEDURES AND DELIVERY CONDITION
REQUIREMENTS
 
1.	Licenses	
 
 	(a)	It is the responsibility of Lessee to obtain all licenses, permits or approvals necessary to export or transport the Engine from the Delivery Location.	
 
 	(b)	Lessor will provide Lessee with any required data and information relating to the Engine or Lessor as are reasonably available to Lessor for the purposes of obtaining any such licenses, permits or approvals.	
 
2.	Inspection	
 
 	(a)	Subject to any applicable lease agreement or purchase agreement, Lessee may inspect the Engine (including a test cell or power assurance run) to ensure that the Engine fulfils the Delivery Condition Requirements.	
 
 	(b)	If Lessee’s inspection of the Engine shows that the Engine does not fulfil the Delivery Condition Requirements, Lessor will correct any defects and make the Engine available for re-inspection by Lessee provided that, in Lessor’s reasonable opinion, it is not impracticable or prohibitively expensive to correct the defect.	
 
 	(c)	If Lessor notifies Lessee that it does not intend to correct the defect, either party may terminate the Lease.	
If the Engine has been purchased from Lessee (or one of its Affiliates) by Owner and immediately leased back by Lessor to Lessee, the provisions of this Section 2 shall not apply to the leasing of the Engine.
 
3.	Indemnity	
Lessee is responsible for and will indemnify each Indemnitee against all Losses arising from death or injury to any observer, representative or any employee of Lessee in connection with the inspection of the Engine whether or not such Losses arise out of or are attributable to any act or omission, negligent or otherwise, of any Indemnitee other than the wilful misconduct of such Indemnitee.
 
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SCHEDULE 5
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is delivered, on the date set out below by [LESSEE] (“ Lessee ”), to [Name of Lessor] (“ Lessor ”), pursuant to the Common Terms Agreement, dated                     , between Lessor and Lessee and the Engine Lease Agreement, dated                     , between Lessor and Lessee incorporation the terms of the Common Terms Agreement (the “ Agreement ”). The capitalized terms used in this Certificate shall have the meaning given to such terms in the Agreement.
 
1.	DETAILS OF ACCEPTANCE	
Lessee hereby confirms to Lessor that Lessee has at [    ] o’clock on this      day of         ,         , at                     , accepted delivery of the following:
 
(a)	[                    ] Engine:	
Manufacturer’s Serial Number:         
 
(b)	Engine Document Check List: as attached hereto.	
 
(c)	QEC Check List: as attached hereto.	
 
(d)	LRU Check List: as attached hereto.	
 
(e)	Other Accessories Check List: as attached hereto.	
 
(f)	Engine stand/Engine cover: as attached hereto.	
 
(g)	Data Plate certification: as attached hereto.	
 
2.	HOURS AND CYCLES DATA (as of Delivery Date)	
Engine:
Number of Engine Flight Hours since new:          hours
Number of Engine Flight Hours since last refurbishment:          hours
Number of Engine Flight Cycles since new:          cycles
Number of Engine Flight Cycles since last refurbishment:          cycles
Risk Sheet:
Hot Section Inspection:
 
Interval:	                    	
 
Time	Since (S/N         ):         	
 
Time	Remaining to First Restriction:	

Hours:	 	 	 		 	Restriction:	 	 	
Cycles:	 	 	 		 	Restriction:	 	 	
Average Cycles in LLP (see attached Schedule):         
 
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3.	ACCEPTANCE:	
Lessee hereby confirms that the Engine, engine stand, QEC, Parts and Engine Documents described in this Certificate of Acceptance have been received; (ii) the Engine has been duly marked with the Nameplate in accordance with the terms of Section 8.6(a) of the Lease; (iii) the Engine is insured as required by the Lease; (iv) the representations and warranties of Lessee referred to in Section 2.1 ( Lessee’s Representations and Warranties ) of the Lease are hereby repeated with effect as of the date first above written; (v) having inspected the Engine, Lessee acknowledges that the Engine satisfies all conditions required for Lessee’s acceptance of delivery as set forth in the Lease; and (vi) the execution and delivery of this Certificate signifies absolute and irrevocable acceptance by Lessee of the Engine for all purposes hereof and of the Lease.
IN WITNESS WHEREOF, Lessee and Lessor have, by their duly authorized representative, executed this Certificate of Acceptance on the date in paragraph 1 above.

LESSEE:	 		 	LESSOR:	
					
By:	 	 	 		 	By:	 	 	
Title:	 	 	 		 	Title:	 	 	
 
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SCHEDULE 6
PROCEDURES AND OPERATING CONDITION AT REDELIVERY
(Engines)
On the Return Occasion of the Engine, subject to ordinary wear and tear of a kind and to an extent consistent with similar engines engaged in commercial airline operations, will be redelivered to Lessee in accordance with the proved ores and in any event in the condition set out below.
 
1.1	Final Inspection	
Immediately prior to the Return Occasion, Lessee will make the Engine available to Lessor for inspection (“ Final Inspection ”) in order to verify that the condition of the Engine complies with the Lease. The Final Inspection will include, and be long enough to permit Lessor to:
 
 	(a)	inspect the Engine Documents;	
 
 	(b)	observe a test cell run or an engine maximum power assurance run, at Lessor’s option, in accordance with the EMM, at Lessee’s cost;	
 
 	(c)	following the test cell run or the engine maximum power assurance run, inspect the Engine and the uninstalled Parts, including a complete video borescope inspection of all stages of (A) the low pressure and high pressure compressors (performed by cold section video borescope) and (B) the high pressure turbine and low pressure turbine modules (performed by hot section video borescope).	
Furthermore, Lessee acknowledges that the next operator of the Engine will need to inspect the Engine and the Engine Documents prior to redelivery and Lessee hereby agrees to cooperate with Lessor and/or such next operator in order to coordinate and grant access for inspections and/or meetings as necessary.
Lessor is responsible for and will indemnify Lessee against all Losses arising from the death or injury to an observer or any employee of Lessor in connection with the inspection of the Engine under this Clause 1.1 whether or not such Losses arise out of or are attributable to any act or omission, negligent or otherwise of Lessee.
 
1.2	General Condition	
The Engine will:
 
 	(a)	be in at least as good operating and physical condition, excluding normal wear and tear, as when delivered to Lessee by Lessor, subject to ordinary operating wear and tear and changes and alterations properly made by Lessee as permitted under, and otherwise in accordance with, the Lease. The Engine will have been maintained to at least the same standard and modification status as other similar engines within Lessee’s fleet. The Engine will be free of any concessions, technical variances, repairs or modifications not approved by Manufacturer, maintenance deferrals, carry-overs, extensions or any on-watch items requiring a special, reduced period or out of sequence inspection or maintenance;	
 
 	(b)	have a valid certificate of airworthiness and export certificate of airworthiness, if applicable;	
 
 	(c)	be fully serviceable as evidenced by a FAA/EASA approved serviceability tag in accordance with the Maintenance Program and an FAA 8130-3 or JAR Form 1;	
 
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 	(d)	be in such condition as to permit the immediate use in commercial airline service under the current regulations of the FAA and EASA (including FAA/EASA shop release documentation if requested by Lessor);	
 
 	(e)	have complete back to birth records acceptable to Lessor (acting reasonably) available for all LLP and components;	
 
 	(f)	have engine trend monitoring data evidencing no adverse trends or rate of deterioration or operating abnormality which would require corrective action or a shop visit in advance of next scheduled shop visit;	
 
 	(g)	have an incident statement signed by Lessee which shall be substantially in the form set out in Schedule 10;	
 
 	(h)	be operating within the limits established by Manufacturer;	
 
 	(i)	be in compliance (either by means of repetitive inspection, modification or terminating action) with the FAA/EASA and Air Authority’s ADs and mandatory SBs the compliance with which is required on or before the date Lessor accepts redelivery or completion on or before the 6th month following Lessor’s acceptance of redelivery, accompanied by records showing the method and date of compliance and compliance documents showing accomplishment with no variance, extension, carry-overs or deferrals (other than those variances, extensions or deferrals which are applicable to all engines of like make and model as the Engine, if any). Any airworthiness directives of the Air Authority, EASA or FAA which must be completed on a terminating action basis during the Term by the Lessee or are completed on a terminating action basis by Lessee on other engines of the same type in its fleet will be performed on a terminating action basis by Lessee at Lessee’s cost;	
 
 	(j)	have installed the full complement of equipment, parts, accessories, furnishings and loose equipment, including, but not limited to, QEC and engine build up (EBU) parts, if any, as when originally delivered to Lessee and as normally installed in the Engine for continued regular service, and will be in the same external configuration as when originally delivered to Lessee except for any manufacturer, EASA, FAA approved modifications or improvements or any other Engine changes permitted or required by the Lease;	
 
 	(k)	have no open, deferred, continued, carry over or placarded log book items; and	
 
 	(l)	have the Nameplate in accordance with the provisions of the Lease.	
 
1.3	Components	
 
(a)	Each Engine Flight Hour and Engine Cycle controlled Hard Time Component shall have not less than the Minimum Hard Time Component Flight Hours and the Minimum Hard Time Component Cycles of life remaining to the next expected Engine Refurbishment based on the Manufacturer’s mean time between removals for such Engine and shall be supported by appropriate certification documentation indicating TSN, CSN, TSO and CSO such as JAR form 1 or FAA form 8130-1; for this purpose “ Hard Time Component ” means any component which has a limited on-wing life in accordance with the Maintenance Programme and which can have life fully restored through appropriate maintenance;	
 
(b)	Each calendar-limited component including safety equipment will have not less than its Minimum Component Calendar Life remaining to the next scheduled removal in accordance with the Maintenance Program;	
 
(c)	Each “on-condition” and “condition-monitored” component will be serviceable;	
 
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If the Engine will not meet these conditions without a shop visit in the six months preceding termination of the Lease, Lessee will consult with Lessor prior to committing the Engine to the shop and Lessor will re-evaluate the requirement for maximum time since shop visit based on the then current circumstances. All components (excluding LLP) shall have a minimum of fifty percent (50%) life remaining (Engine Flight Hours, Engine Cycles or months whichever is applicable and most limiting). Average total time since new on installed components and Parts in the aggregate shall have no more than one hundred ten percent (110%) of the total time on the Engine.
 
1.4	Engines:	
Each Engine will:
 
 	(a)	have not less than the Minimum Engine Flight Hours life remaining to the next expected removal and each of the LLPs shall have not less than the Minimum Engine Cycles release life remaining. The expected life remaining will be determined by the inspection and checks accomplished by Lessor in accordance with the Lease;	
 
 	(b)	be free of all Security Interests, other than Security Interests granted by Lessor;	
 
 	(c)	have undergone the inspections as set forth in Section 1.1(b) and (c) herein. If any inspection procedure identifies any Engine defect(s), Lessee will immediately notify Lessor in writing, correct such defect(s) at Lessee’s cost and provide evidence satisfactory to Lessor that defects have been corrected in accordance with the EMM and the Maintenance Program;	
 
 	(d)	be prepared for shipment by (i) capping and plugging all openings, (ii) preserving the Engine for 90 days or more storage and (iii) otherwise preparing the Engine for shipment in accordance with Manufacturer’s recommendations;	
 
 	(e)	be zero time since the last complete hot and cold section video borescope inspection in accordance with Manufacturer’s and the Related Airframe manufacturer’s maintenance manual and will be in compliance with requirements of the EMM, Lessee’s operations specifications, and the requirements and recommendations of the Air Authority;	
 
 	(f)	together with installed components, not be subject to any reduced frequency inspections in comparison to the Related Airframe manufacturer’s maintenance manual limits;	
 
 	(g)	immediately prior to redelivery, will have the required EGT Margin. In addition, the EGT Margin shall be sufficient, and the Engine shall otherwise be in a condition, to permit the operation of the Engine for at least the Minimum Engine Flight Hours and the Minimum Engine Cycles until its next expected Engine Refurbishment. The Engine shall have performance characteristics consistent with engines of a similar manufacturer, made, model, thrust, age and time since performance restoration and, if (i) fresh from an Engine Refurbishment, be zero time since a full parameter test cell run which will demonstrate, including at full take-off power, performance characteristics consistent with Lessee’s approved Related Airframe operating requirements, or (ii) the Engine has been removed from an aircraft immediately prior to redelivery, will have performed a full parameter test cell run or on-wing maximum power assurance run, at Lessor’s election, demonstrating maximum permitted power take-off performance as per Lessee’s Related Airframe operating requirement. In all cases, the engine condition monitoring (ECM) data will be available for Lessor’s review, will cover periods of installation sufficient to have initialized a baseline on the trend plot and will exhibit no abnormal trends or acceleration in the deterioration of the performance of the Engine;	
 
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 	(h)	Lessee will bear all costs of packaging, including the provision of an engine shipping stand, transportation, including the return of the engine stand to Lessee (if applicable), insurance duties, taxes and other costs associated with the return of the Engine, Delivered Duty Paid ( Incoterms 2000 ) to the Redelivery Location. Any vehicles and trailers used for shipment of the Engine shall be air ride equipped. On a given shipment, such vehicle shall be dedicated to the Engine belonging solely to Lessor; except, that (i) the Engine or other related equipment may be off-loaded at the Redelivery Location without disturbing any of the additional items included in such shipment; and (ii) Lessee shall not handle or reposition any of the additional items included in such shipment on such vehicle;	
 
 	(i)	have no defect which places less than the Engine Flight Hours Restriction and the Engine Cycles Restriction of remaining life, each including in respect of LLPs, pursuant to Manufacturer’s or Air Authority’s requirements until removal.	
 
1.5	Engine Documents:	
The Engine Documents will:
 
 	(a)	be delivered by Lessee to Lessor, together with the records generated by Lessee and records maintained or obtained, or required to be maintained or obtained, under the applicable rules and regulations of the Air Authority or any other applicable Law. With respect to any Part installed by Lessee during the Term and not removed prior to Redelivery, the records returned to Lessor will include: (i) part number, description and serial number (if Part is serialized); (ii) historical record, including but not limited to (A) serviceability status at installation, (B) for a time-controlled Part, total time and cycles, time and cycles since overhaul as may be applicable, and total time and cycles of the Engine at the time of Part installation, and (C) for an LLP, “back-to-birth” documentation tracing usage of the Part since new. The Engine Documents will be accurate and complete and satisfy all other requirements so as to permit immediate use of the Engine under the rules and regulations of the Air Authority. At minimum, the Engine Documents shall include the following:	
 
 	1.	Certified statement as to Engine Flight Hours and Engine Cycles since overhaul on each Engine module.	
 
 	2.	Engine Log Book (as applicable to Lessee’s records keeping system).	
 
 	3.	Engine Master Record (record of installation and removal and accumulated Engine Flight Hours and Engine Cycles).	
 
 	4.	Accessory status (including description, part number, serial number, date and time installed, and current time since overhaul).	
 
 	5.	Record of last overhaul (FAA Form 8130-3 or JAA Form One) for each of the accessory rotables requiring overhaul on a time specified basis.	
 
 	6.	Repair, overhaul and inspection records for each shop visit since and including the last overhaul of each module.	
 
 	7.	Documents demonstrating installation and full traceability to new for each LLP.	
 
 	8.	Engine condition monitoring report.	
 
 	9.	Most recent engine borescope (if videotaped, include copy of video).	
 
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 	10.	Most recent fuel, oil sampling, magnetic chip detector and vibration survey results (as available).	
 
 	11.	Most recent on-wing ground performance run.	
 
 	12.	Last certified test cell run.	
 
 	13.	Manufacturer delivery documents.	
 
 	14.	Engine oil used.	
 
 	15.	Any incidents during operation since last shop visit with action taken (e.g. IFSD/ FOD/ oil loss, etc.).	
 
 	(b)	Summary Records. Lessee shall cause each of the following Engine Documents to be complete including any update required to reflect work performed in preparation for return to Lessor. Each summary report shall be certified by signature of Lessee’s Director of Quality Assurance or Director of Quality Control as being a complete and accurate description of Engine status at return to Lessor.	
 
 	1.	AD/CN Applicability and Compliance Status. Listings will include all AD/CNs issued by the Air Authority against the model and series of each item and will clearly identify any exemptions, waivers or alternate means of compliance granted by the Air Authority to the operator. In addition to other pertinent data, the documents shall include Manufacturer’s SB(s) reference, AD/CN and SB revision numbers, method of compliance, date and time (Engine Flight Hours and Engine Cycles) of accomplishment, status (terminated, repetitive, open), and next due.	
 
 	2.	Manufacturer SB Compliance Summary. Summary will clearly identify whether an SB was completed in full, in part or in variance to manufacturer data and shall detail which portions were accomplished or the nature of any variance.	
 
 	3.	List of Lessee Modifications Incorporated (EO’s, EA’s, FCD’s, etc.). In addition to other pertinent data, this document shall include operator document reference, description, date and time of accomplishment.	
 
 	4.	LLP Status Reports. In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, total time (Engine Flight Hours and Engine Cycles), life limit and time remaining.	
 
 	5.	Check/Inspection History (record of scheduled checks accomplished during the Term including date and time accomplished).	
 
 	6.	Complete Status Summary for each special maintenance, modification or inspection program (corrosion prevention and control, supplemental inspection, aging engine, etc.) in effect at time of return.	
 
 	7.	Time-Controlled Components (TCC) Status Report. This shall address status of each TCC installed in the Engine. The list of TTCs shall be that listed in the MPD plus those listed in the Maintenance Program. In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, date and Engine time at installation, current time since overhaul (Engine Flight Hours and Engine Cycles), limit, and time remaining.	
 
 	8.	List of currently installed Parts. In addition to other pertinent information, this document shall include description, location, manufacturer part number, manufacturer serial number, date installed and aircraft time at installation.	
 
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 	(c)	The Engine Documents shall include the following AD/CNs, SBs and Modifications:	
 
 	1.	AD/CN Accomplishment Records for all AD/CNs accomplished including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. Records shall be returned in dedicated AD/CN files segregated by Engine and Parts and shall be in AD/CN number order. Records for AD/CNs requiring repetitive accomplishment of identical action may be restricted to initial and most recent accomplishment.	
 
 	2.	SB Accomplishment Records for all SBs accomplished on the Engine and Parts including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. Records shall be returned in dedicated SB files segregated by the Engine and Parts and shall be in SB number order. Records for SBs requiring repetitive accomplishment of identical action may be restricted to initial and most recent accomplishment. SBs carried out to satisfy AD requirements shall be returned with AD records and need not be duplicated in SB files.	
 
 	3.	Modification Accomplishment Records for all modifications accomplished on the Engine and Parts including task cards, engineering orders, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance and approval authority. Records shall be returned in dedicated modification files segregated by Engine and Parts and shall be organized in a fashion that allows documents for a particular modification to be located quickly and efficiently. Modifications carried out to satisfy AD/CN requirements shall be returned with AD/CN records and need not be duplicated in modification files.	
 
 	(d)	The Engine Documents shall include the following Quality Assurance Statements:	
 
 	1.	Statement of total Engine Flight Flours and total Engine Cycles on the Engine at Engine transfer.	
 
 	2.	Automated Record System procedures and Security Control (as applicable to Lessee’s records keeping system).	
 
 	3.	List of Repair Stations used by Lessee including Part 145 Certification and Letter to Repair Stations authorizing release of records to Lessor upon request.	
 
 	4.	Report detailing Incidents or Accidents (if none, signed statement to that effect).	
 
 	(e)	The Engine Documents shall include a list of all records and documentation transferred with the Engine.	
 
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1.6	Redelivery Acceptance. Upon redelivery as required by the Lease, Lessor will deliver to Lessee the acknowledgement required pursuant to Section 12.4 ( Acknowledgement ).	
 
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SCHEDULE 7
INSURANCE REQUIREMENTS
 
1.1	Types of Insurance	
The Insurances required to be maintained are as follows:
 
 	(a)	Hull All Risks of loss or damage while flying, taxiing and on the ground with respect to the Engine on an agreed value basis for the Agreed Value and with a deductible not exceeding the Deductible Amount or such other amount agreed by Lessor from time to time;	
 
 	(b)	Hull War and Allied Perils , being such risks excluded from the Hull All Risks Policy, to the extent usual and customary from the leading international insurance markets for comparable operators operating similar Engines in similar circumstances;	
 
 	(c)	All Risks Coverage (including war and allied risk and spares insurance except when on the ground or in transit other than by air as is customarily available) property insurance on all Engines and Parts when not installed on any aircraft, including engine test and running risks, on the basis of their fair market replacement value; provided, however, that Lessee shall carry all risk spares insurance with respect to all Engines subject to an Engine Lease Agreement, which insurance shall include in-transit coverage, covering any damage which may occur while such Engine is in Lessee’s care, custody and control, but not then attached to an aircraft, in a minimum amount not less than the Agreed Value for such Engine, with a deductible not exceeding the Spares Deductible Amount or such other amount agreed by Lessor from time to time; and	
 
 	(d)	Comprehensive Aircraft Third Party, Property Damage, Passenger, Baggage, Cargo and Mail and Airline General Third Party (including Products) Legal Liability. Coverage for a combined single limit (bodily injury/property damage) of an amount not less than the Minimum Liability Coverage for the time being for any one occurrence (but in respect of products and personal injury liability, this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks cover is to be maintained from leading international insurance markets (AVN 52D is the current London market language) and shall be for an amount not less than the greater of (i) the Minimum Liability Coverage and (ii) the amount carried by Lessee in respect of similar aircraft owned or otherwise operated by Lessee.	
 
 	(e)	Gross Up : When the Engine is installed on an aircraft, the insured agreed value of that aircraft shall be automatically increased by the amount of the Agreed Value for such Engine, and shall be so noted on the insurance certificate.	
 
1.2	Terms of Hull and Spares Insurance	
All required hull and spares insurance, so far as it relates to the Engine, will:
 
 	(a)	Additional Insureds : name Lessor, Owner, Financing Parties’ Representative and the Person serving as the Financing Parties’ Representative in its individual capacity as additional insureds for their respective rights and interests (without imposing on any such Person any obligation imposed on the insured, including the liability to pay any calls, commissions or premiums);	
 
 	(b)	Settlement of Losses : provide that any loss will be settled jointly with Lessor and Lessee, and will be payable in Dollars to Lessor, as sole loss payee, for the account of	
 
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 	all interests, except where the insurance payment does not exceed the Damage Notification Threshold, and no Default is in existence, in which case the loss will be settled with and paid to Lessee;	
 
 	(c)	50/50 Provision : if separated Hull “all risks” and “war risks” insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current London market language);	
 
 	(d)	No Option to Replace : confirm that the insurers are not entitled to replace the Engine in the event of an insured Event of Loss.	
 
1.3	Terms of Liability Insurance	
All required liability insurances will:
 
 	(a)	Additional Insureds : include each lndemnitee, as additional insureds for its respective rights and interests, warranted, each as to itself only, no operational interest (without imposing on any such Person any obligation imposed on the insured, including the liability to pay any calls, commissions or premiums);	
 
 	(b)	Severability : include a severability of interests clause which provides that the insurance, except for the limit of liability, will operate to give each insured the same protection as if there was a separate policy issued to each insured; and	
 
 	(c)	Primary Policy : contain a provision confirming that the policy is primary without right of contribution and the liability of the insurers will not be affected by any other insurance of which Lessor, each lndemnitee or Lessee have the benefit so as to reduce the amount payable to the additional insureds under such policies.	
 
1.4	Terms of All Insurances	
All Insurances will:
 
 	(a)	Prudent Industry Practice : be in accordance with prudent industry practice of persons operating similar engine in similar circumstances;	
 
 	(b)	Dollars : provide cover denominated in Dollars;	
 
 	(c)	Worldwide : operate on a worldwide basis subject to such limitations and exclusions as Lessor may reasonably agree;	
 
 	(d)	Breach of Warranty : provide that, in relation to the interests of each of the additional assureds, the Insurances will not be invalidated by any act or omission by Lessee, or any other person other than the respective additional assureds seeking protection and shall insure the interests of each of the additional assureds regardless of any breach or violation by Lessee, or any other person other than the respective additional assured seeking protection of any warranty, declaration or condition, contained in such insurances;	
 
 	(e)	Subrogation : provide that the insurers will hold harmless and waive any rights of recourse or subrogation against the additional insureds. Upon indemnification of an additional insured under Insurance, the insurers may, with the consent of such additional insured (such consent not to be unreasonably withheld) exercise subrogation rights;	
 
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 	(f)	Premiums : provide that the additional insureds will have no obligation or responsibility for the payment of any premiums due (but reserve the right to pay the same should any of them elect so to do) and that the insurers will not exercise any right of set-off, counter-claim or other deduction, by attachment or otherwise, in respect of any premium due against the respective interests of the additional insureds other than outstanding premiums relating to the any Engine or Part the subject of the relevant claim;	
 
 	(g)	Cancellation/Change : provide that the Insurances will continue unaltered for the benefit of the additional insureds for at least 30 days after written notice by registered mail or telex of any cancellation, change, event of non-payment of premium or installment thereof has been sent by insurer(s) to Lessor, or where an insurance broker is appointed to the insurance broker who shall promptly send on such notice to Lessor, except in the case of war risks for which 7 days (or such lesser period as is or may be customarily available in respect of war risks or allied perils) will be given, or in the case of war between the 5 great powers or nuclear peril for which termination is automatic;	
 
 	(h)	Initiating Claims : contain a provision entitling any lndemnitee to initiate a claim under any policy in the event of the refusal or failure of Lessee to do so; and	
 
 	(i)	Indemnities : accept and insure the indemnity provisions of the Lease to the extent of the risks covered by the policies.	
 
1.5	Deductibles	
Lessee shall be responsible for any and all deductibles under the Insurances.
 
1.6	Application of Insurance Proceeds	
The Insurances will be endorsed to provide for payment of proceeds as follows:
 
 	(a)	Event of Loss : all insurance payments received as the result of an Event of Loss occurring during the Term will be paid to Lessor as sole loss payee, and Lessor will pay or cause to be paid any remaining balance of those amounts to Lessee after deduction of all amounts which may be or become payable by Lessee to Lessor under the Lease and the Other Agreements (including under Section 11.1(b));	
 
 	(b)	Exceeding Damage Notification Threshold : all insurance proceeds of any property, damage or loss to any Engine or any Part occurring during the Term not constituting an Event of Loss and in excess of the Damage Notification Threshold will be paid to Lessor as sole loss payee, and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor being satisfied that the repairs or replacement have been effected in accordance with the Lease. Any balance remaining shall he paid to or retained by Lessor or Owner, as the case may be;	
 
 	(c)	Below Damage Notification Threshold : insurance proceeds in amounts below the Damage Notification Threshold shall be paid by the insurer directly to Lessee;	
 
 	(d)	Liability Proceeds : all insurance proceeds in respect of third party liability will be paid by the insurers to the relevant third party in satisfaction of the relevant liability or to Owner, Lessor, Financing Partners’ Representative or Lessee, as the case may be, in reimbursement of any payment so made;	
 
 	(e)	Default : notwithstanding any of the foregoing paragraphs if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all	
 
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 	such proceeds will be paid to Lessor, Owner or Financing Parties’ Representative, as the case may be, or retained to be applied toward payment of any amounts which may be or become payable by Lessee in such order as Lessor or Owner, as the case may be, may elect until such time as no Default is continuing and then applied as described above; and to the extent that insurance proceeds are paid to Lessee, Lessee agrees to hold such proceeds in trust and comply with the foregoing provisions and apply or pay over such proceeds as so required.	
 
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SCHEDULE 8
FORM OF LESSEE’S [AND GUARANTOR’S] LEGAL OPINION
[DATE]
[CELESTIAL AVIATION TRADING 50 LIMITED]
Ladies and Gentlemen:
 
 	1.1	You have asked us to render an opinion in connection with the transaction governed by or subject to, inter alia, the under-mentioned documents:	
 
 	(a)	the Engine Lease Agreement dated [                    ] (the “Engine Lease Agreement”), between [Celestial Aviation Trading 50 Limited] (“Lessor”) and Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“Lessee”) in respect of one [        ] engine with engine serial number [        ] (the “Engine”);	
 
 	(b)	the Common Terms Agreement (as defined in the Engine Lease Agreement);	
 
 	(c)	the By-laws of Lessee, public deed 92,750 dated October 27, 2004 granted before Mr. Emiliano Zubiría Maqueo, Public Notary 25 of the Federal District, which contains the constitutional documents of the Lessee and of public deed 83,539 dated October 27, 2005, granted before Mr. José Visoso del Valle, Public Notary 92 of the Federal District, which contains amendments thereto which have not been further amended through the date hereof; and	
 
 	(d)	all other documents, approvals and consents of whatever nature and wherever kept which it was, in our judgment and to our knowledge, necessary or appropriate to examine to enable us to give the opinion expressed below.	
Words and expressions used and not otherwise defined herein will bear the same meanings as defined in an Engine Lease Agreement. As used herein the term “Lease” means and includes the Engine Lease Agreement which incorporates the Common Terms Agreement (as defined therein).
 
2.	Having considered the documents listed in paragraph 1 above, and having regard to the relevant laws of Mexico we are pleased to advise that in our opinion:	
 
(a)	Lessee is a company ( sociedad anónima de capital variable ), duly organized, validly existing and in good standing under the laws of Mexico and has the corporate power and all requisite governmental authority necessary to carry on its respective business as presently conducted;	
 
(b)	Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorize the entry into, and the execution, delivery and performance by it of, the Lease and the transactions contemplated by the Lease;	
 
(c)	the entry into and performance by Lessee of, and the transactions contemplated by, the Lease do not and will not:	
 
 	(i)	conflict with any Laws binding on Lessee; or	
 
 	(ii)	conflict with the By-laws of Lessee; or	
 
 	(iii)	conflict with or result in default under any agreement or instrument which is binding upon Lessee or any of its assets or result in the creation of any Security Interest.	
 
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(d)	no authorizations, consents, licenses, approvals and registrations (other than those which have been obtained and of which copies are attached hereto) are necessary or desirable to be obtained from any governmental or other regulatory authorities in Mexico or any other jurisdiction having jurisdiction over Lessee, its operations or its properties to enable Lessee:	
 
 	(i)	to enter into and perform the transactions contemplated by the Lease;	
 
 	(ii)	to import the Engine into Mexico for the duration of the Term;	
 
 	(iii)	to operate the Engine in Mexico; or	
 
 	(iv)	to make the payments provided for in the Lease;	
 
(e)	except for the filing and recordation of the Lease with the Mexican Aeronautical Registry ( Registro Aeronáutico Mexicano ) of the Air Authority (which filing will be made in accordance with the terms of the Lease), it is not necessary or desirable, to ensure the priority, validity and enforceability of all the obligations of Lessee under the Lease, as against Lessee and all third parties, or to perfect the interests of Lessor, that the Lease be filed, registered, recorded or notarized in any public office or elsewhere or that any other instrument be signed, delivered, filed, registered or recorded, that any tax or duty be paid or that any other action whatsoever be taken;	
 
(f)	the Lease has been duly executed and delivered on behalf of Lessee and constitutes the legal, valid and binding obligation of Lessee, enforceable against Lessee in accordance with its terms;	
 
(g)	Mexican withholding tax may apply however the Lessee has initiated legal proceedings regarding the applicability of such tax. No other withholding or deduction of any other Tax or other amount in respect of payments to be made by Lessee pursuant to the Lease; with respect to any withholdings, the provisions of Section 5.6 of the Lease are fully effective; and the arrangements contemplated by the Lease do not give rise to Taxes in Mexico;	
 
(h)	there is no applicable usury or interest limitation law in Mexico applicable to payments in accordance with the Lease;	
 
(i)	there are no registration, stamp or other taxes or duties of any kind payable in Mexico in connection with the execution, performance or enforcement by legal proceedings of the Lease;	
 
(j)	the choice of New York law to govern the Lease will be upheld as a valid choice of law in any action in the competent courts of Mexico, pursuant to Article 1347A of the Commerce Code ( Código de Comercio ), which provides, inter alia , that any judgment rendered outside Mexico maybe enforced by Mexican courts, provided that:	
 
 	1)	such judgment is obtained in compliance with the legal requirements of the jurisdiction of the court rendering such judgment and in compliance with all legal requirements of the Operative Documents;	
 
 	2)	such judgment is strictly for the payment of a certain sum of money, based on an in personam (as opposed to an in rem ) action;	
 
 	3)	service of process was made personally on the defendant or on the appropriate process agent;	
 
 	4)	such judgment does not contravene Mexican law, public policy of Mexico, international treaties or agreements binding upon Mexico or generally accepted principles of international law;	
 
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 	5)	the applicable procedure under the laws of Mexico with respect to the enforcement of foreign judgments (including the issuance of a letter rogatory by the competent authority of such jurisdiction requesting enforcement of such judgment and the certification of such judgment as authentic by the corresponding authorities of such jurisdiction in accordance with the laws thereof), is complied with;	
 
 	6)	the action in respect of which judgment is rendered is not the subject matter of a lawsuit among the same parties pending before a Mexican court;	
 
 	7)	such judgment is final in the jurisdiction where obtained; and	
 
 	8)	the courts of such jurisdiction recognize the principles of reciprocity in connection with the enforcement of Mexican judgments in such jurisdiction.	
 
(k)	the consent to the jurisdiction by Lessee contained in the Lease is valid and binding on Lessee;	
The foregoing opinion is subject to the following qualifications:
 
1.	enforcement of the Lease may be limited by bankruptcy, concurso mercantil , insolvency, liquidation, reorganization, moratorium and other similar laws of general application relating to or affecting the rights of creditors generally;	
 
2.	in any proceedings brought to the courts of Mexico for the enforcement of the Lease against the Lessee, a Mexican court would apply Mexican procedural law in such proceedings;	
 
3.	in the event that any legal proceedings are brought in the courts of Mexico, a Spanish translation of the documents required in such proceedings, prepared by a court-approved translator, would be approved by the court after the defendant had been given an opportunity to be heard with respect to the accuracy of the translation, and proceeding would thereafter be based upon the translated documents;	
 
4.	in a bankruptcy proceeding initiated in Mexico pursuant to the laws of Mexico labor claims, claims of tax authorities for unpaid taxes, social security quotas, worker’s housing fund quotas and retirement fund quotas may have priority over claims of the Lessor; and	
I express no opinion as to any laws other that the laws of Mexico.
This opinion is furnished to you solely for your and your successors’ and permitted assigns’ benefit and it is not to be transferred to anyone else nor is it to be relied upon by anyone else or for the purpose or quoted or referred to in any public document or filed with anyone without my prior written consent.

Very truly yours,	
	
[                    ]	
	
General Counsel	
 
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SCHEDULE 9
EVENTS OF DEFAULT
Each of the following events or conditions constitutes an Event of Default:
 
 	(a)	Non-payment : Lessee fails to make any payment of Rent, Supplemental Rent or any other amount payable under the Lease on the due date and such failure continues for three (3) Business Days or more; or	
 
 	(b)	Insurance : Lessee fails to comply with any provision of Section 9 or Schedule 7, or any insurance required to be maintained under the Lease is cancelled or terminated, or a notice of cancellation is given in respect of any such insurance arising as a result of non-payment of insurance premium and such notice is not cancelled or rescinded or the relevant insurance substituted without lapse of coverage within 10 Business Days of receipt by Lessee’s designated insurance broker; or	
 
 	(c)	Breach : Lessee fails to comply with any other provision of the Lease not referenced in this Schedule 9 and, if such failure is in the opinion of Lessor capable of remedy, such failure continues for 30 days after notice from Lessor to Lessee; or	
 
 	(d)	Representation : any representation or warranty made (or deemed to be repeated) by Lessee in or pursuant to the Lease or in any document or certificate or statement is or proves to have been incorrect in any material respect when made or deemed to be repeated and if capable of being cured, is not cured within 30 days following notice from Lessor to Lessee; or	
 
 	(e)	Cross-Default :	
 
 	(i)	any Financial Indebtedness of Lessee in excess of ***** is not paid when due after giving effect to any applicable grace periods;	
 
 	(ii)	any such Financial Indebtedness becomes due or capable of being declared due prior to the date when it would otherwise have become due; or becomes due as a result of an event of default or termination event, howsoever described, on the part of Lessee or any other Person prior to the date when it would otherwise have become due; or	
 
 	(iii)	the security for any such Financial Indebtedness becomes enforceable; or	
 
 	(iv)	any event of default or termination event, howsoever described, occurs under any Other Agreement, or any other lease, hire purchase, conditional sale or credit sale agreement of Lessee and the same is not cured under the applicable grace period (if any); or	
 
 	(f)	Approvals : any consent, authorization, licence, certificate or approval of or registration with or declaration to any Government Entity required to be obtained or maintained by Lessee in connection with the Lease and/or the operation of the Engine (including any airline licence or air transport licence including authority to operate the Engine under Part 121 of the FARs, a Certificate of Convenience and Necessity issued under the Act and an air carrier operating certificate issued under the Act) is modified in a materially prejudicial manner or is withheld, or is revoked, suspended, cancelled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force except where the unacceptable modification, withholding, revocation, suspension, cancellation, withdrawal, termination or non-renewal (i) of the Lessee’s authority to operate the Engine affects all operators of engines of the same type as the Engine, or (ii) may in so far as the airline license or air transport license required by Lessee are concerned, be capable of being remedied by Lessee within 30 days of receipt of notice by Lessee of such event occurring; or	
 
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 	(g)	Bankruptcy, etc :	
 
 	(i)	Lessee consents to the appointment of a custodian, receiver, trustee or liquidator of itself or all or a material part of its property or its consolidated property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or voluntary petition seeking reorganization in a proceeding under any bankruptcy or insolvency laws (as now or hereafter in effect), or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency or other similar law providing for the reorganization or winding-up of debtors, or provides for an agreement, composition, extension or adjustment with its creditors, or any board of directors or shareholder action is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished; or	
 
 	(ii)	An order, judgement or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee or liquidator of or sequestering any of Lessee’s property, and any such order, judgement or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 60 days after the date of entry thereof or at any time an order for relief is granted; or	
 
 	(iii)	An involuntary petition against Lessee or other proceeding under the United States Federal Bankruptcy laws or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 60 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganisation or winding-up of debtors which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or any material part of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding; or	
 
 	(h)	Suspension of Business : Lessee suspends or ceases or takes substantive steps to suspend or cease to carry on all or a material part of its business as a commercial air carrier [(other than as a result of a labor dispute with Lessee’s employees); or	
 
 	(i)	Rights and Remedies : Lessee or any other Person claiming by or through Lessee challenges the existence, validity, enforceability or priority of the Lease or the rights of Lessor as lessor or of Owner as owner in respect of the Engine or Financing Parties’ Representative as holder of a first priority Security Interest in the Engine and the Lease; or	
 
 	(j)	Change of Control : without the previous consent in writing of Lessor (in circumstances where the consent of Lessor is required under the Lease and has not been unreasonably withheld), any single Person or group of Persons (other than a Person that is a shareholder of Lessee, or as a group of Persons who are shareholders of Lessee, on the date of the Lease) acquires (i) the direct or indirect ability to vote in excess of 50% of the voting shares of Lessee, or (ii) the direct or indirect ability to appoint or remove more than 50% of the directors with voting rights or officers of	
 
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 	Lessee or (iii) the direct or indirect ability to give effective directions with respect to and control the management and operations and financial policies and decisions of Lessee, with which the directors or other equivalent officers of Lessee are obligated to comply; provided, for purposes of clarification, a bona fide initial public offering of up to 70% of the voting equity shares of the Lessee shall not be deemed a change of control under this Schedule 9(j) unless and until a circumstance described in clause (i), (ii) or (iii) otherwise exists; or	
 
 	(k)	Delivery : Lessee fails to comply with its obligation under Section 4 to accept delivery of the Engine; or	
 
 	(i)	Adverse Change : any event or series of events occurs which, in the reasonable opinion of Lessor, could be expected to have a material adverse effect on the financial condition, operations or prospects of Lessee or any Guarantor or on the ability of Lessee to comply with its obligations under the Lease or on the ability of any Guarantor to comply with its obligations under the Guarantee (if any); or	
 
 	(m)	Letter of Credit :	
 
 	(i)	the issuer of the Letter of Credit (if any) fails to make any payment under that Letter of Credit when due and Lessor has not received a cash deposit from Lessee in respect of the amount drawn down under the Letter of Credit; or	
 
 	(ii)	any such Letter of Credit is not in full force or, for any reason ceases to constitute the legal, valid and binding obligation of the issuer and such Letter of Credit has not been replaced by a cash deposit from Lessee in an amount corresponding to such Letter of Credit or has not been replaced by a substitute Letter of Credit complying with the provisions of Section 5.14; or	
 
 	(iii)	any authorization required by the issuer to obtain and transfer freely Dollars is withheld, revoked, suspended, cancelled, withdrawn, terminated or not renewed or otherwise ceases to be in full force and effect or paragraph (g) above applies to such issuer (references in those sub-paragraphs to Lessee being deemed to be to the issuer) and Lessor has not received a cash deposit from Lessee in an amount corresponding to the sum available for draw down under the Letter of Credit upon Lessee becoming aware of any of the foregoing circumstances; or	
 
 	(iv)	where applicable, any Letter of Credit is not renewed, extended or reissued within the time, or replaced when, required by Section 5.14;	
and each reference in this paragraph (m) to “the issuer” shall include a reference to any confirming bank for the Letter of Credit.
 
 	(n)	Redelivery : Lessee fails to return the Engine to Lessor on the Expiry Date in accordance with Section 12; or	
 
 	(o)	Litigation : a final, non-appealable judgment for the payment of money not covered by insurance in excess of ***** (or the equivalent thereof in other currencies) shall be rendered against Lessee and the same shall remain undischarged for a period of 30 days, unless during such period, execution of such judgement shall have been effectively stayed by agreement of the parties involved or by court order or such judgement shall have been adequately bonded; or	
 
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 	(p)	Guarantee :	
 
 	(i)	any representation or warranty made by any Guarantor is or proves to have been incorrect in any material respect when made or deemed to be repeated and, if capable of being cured, has not been so cured within 30 days following notice from Lessor to Guarantor or Guarantor fails to make any payment or comply with any other obligation under any Guarantee when due; or	
 
 	(ii)	any Guarantor repudiates, revokes or claims in writing that it has no further obligations under any Guarantee or such Guarantee ceases to be in full force or, for any reason, ceases to be the legal, valid and binding obligation of such Guarantor; or	
 
 	(iii)	any of the events listed in paragraph (e)(i) or (g) above occurs in respect of any Guarantor (and for purposes of this paragraph(s), references in those paragraphs to Lessee shall be deemed to be references to Guarantor); or	
 
 	(q)	Unlawful : it becomes unlawful for Lessee to perform any of its obligations under the Lease or the Lease becomes wholly or partly invalid or unenforceable; or	
 
 	(r)	Transfer/Lessee Requirements : Lessee makes or permits any assignment or transfer of the Lease, or any interest herein, or of the right to possession of the Engine or any Part, or any obligations under the Lease, or Lessee subleases the Engine, in any case except as expressly permitted in the Lease; or Lessee breaches any provision of Section 8.7 and if capable of being cured, has not been cured within 30 days following notice from Lessor to Lessee; or	
 
 	(s)	Engine Loss : Lessee fails to timely comply with its obligations under Sections 8.11(a) and 8.11(b) with respect to an Event of Loss.	
 
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SCHEDULE 10
FORM OF INCIDENT STATEMENT
PLEASE PRINT OUT AND TRANSFER TO AIRLINE LETTERHEAD.
 
1.	Engine Serial Number:             	
 
2.	Reason for Removal:             	

3.    	  	Utilization:	 	Engine TSN              CSN              at 1 st installation.	
	  		 	 
Engine TSN              CSN              at 1 st removal.
 
Aircraft TSN              CSN              at 1 st installation.
 
Aircraft TSN              CSN              at 1 st removal.
 
Engine TSN              CSN              at 2 nd installation. (If applicable)
 
Engine TSN              CSN              at 2 nd removal. (If applicable)
 
Aircraft TSN              CSN              at 2 nd installation. (lf applicable)
 
Aircraft TSN              CSN              at 2 nd removal. (If applicable)	
 
4.	Date of installation:                      , removal:              at 1st installation/removal.	
Date of installation:                      , removal:              at 2nd installation/removal. (If applicable)
 
5.	Aircraft Tail #,              Position installed:              at 1st installation/removal.	
Thrust rating at which the Engine was operated at 1st installation/removal -             
Aircraft Tail #,              Position installed:              at 2nd installation/removal.
Thrust rating at which the Engine was operated at 2 nd installation / removal: (if applicable) -             
 
6.	Has the Engine, including any component(s) installed or replaced by the Operator during the term of the lease, been operated on any U.S. and/or Foreign Government or military aircraft, been subjected to any extreme heat or other form of extreme stress, e.g. Major Engine failure, fire and extreme heat, or incident/accident as defined by lessee’s regulatory authority, been immersed in salt water, or otherwise exposed to corrosive agents outside normal operation. YES            NO          	
 
7.	Have PMA/non-OEM material (S) or material (S) containing non-OEM repairs been installed onto the engine during the term of the lease. YES           NO          	
 
8.	Have there been ANY Deviations from Manual (Including any OEM approved deviations) issued to the Engine, or any hardware or component(s) attached to the Engine, during the term of the lease. YES           NO          	
Note : If Yes please provide supporting OEM documentation, CDR and FAA 8110-3
 
78

9.	Has the engine been returned to GEEL with the same inventory as at delivery, per the lease agreement?	
YES           NO          
NOTE - GEEL WILL ADDITIONALLY PERFORM A FULL INVENTORY CONTROL CHECK AT ENGINE REDELIVERY HOUSEKEEPER.
NB :- If you are returning any items that have been removed from the engine and are being shipped loose, they must have an accompanying EASA Form 1/8130 Form.
 
10.	WWAS THE ENGINE OPERATED AND MAINTAINED IN ACCORDANCE WITH THE AMM? YES           NO          	
 
11.	Were there any Deferred items noted during the term of the Lease? YES           NO          	
If YES, list the Deferred items and provide documentation.

 	
 
12.	Has the Engine experienced an EGT or RPM exceedence? YES           NO          	
If YES, supply details of troubleshooting and RECTIFICATION.
 
13.	Were any Service Bulletins incorporated during the term of the Lease?	
YES           NO          
If YES, list the SB’s complied with below and provide documentation of compliance to include maintenance log records, date of compliance, and technician sign off.

 	
 
14.	Were any Airworthiness Directives (or AMOC) incorporated during the term of the Lease?	
YES           NO          
If YES, list the AD’s complied with below and provide documentation of compliance to include maintenance log records, date of compliance, and technician sign off.

 	
Note - An Alternative Method of Compliance or adjustment of the AD compliance requirements may be used if approved by the appropriate Air Regulatory Authority Manager as noted under the parent AD. Where an AMOC has been applied, the operator must provide supporting documentation showing compliance with the AMOC, and the approval documentation of any such AMOC from the appropriate Air Regulatory Authority Aircraft Certification Office.
 
15.	Were any LLP’s replaced during the term of the Lease?	
YES           NO          
Note : If Yes please supply copies of original EASA Form 1/8130 and documents required per Section 2 reference          LLP replacement.
 
79

16.A.	Oil type used:                     	
 
     B.	Oil consumption rate:                     	
 
17.	Was the Engine properly stored (if applicable) in accordance with the AMM/Engine Manual during the Term of the Lease?	
YES           NO          
 
18.	Was the Engine properly transported in accordance with the AMM/Engine Manual during the term of the lease?	
YES           NO          
 
19.	Per Special Provision A70 in the IATA Dangerous Goods Regulation, the fuel system has been completely emptied of fuel and therefore is not subject to IATA regulations.	
YES           NO          
 
20.	Has a “C” Check been completed on the Engine iaw the applicable AMM/MPD and certified on the FAA 8130-3 or	
EASA Form One Release Certificate “C” Check accomplished.?
YES           NO          

		
Signature:	 	 	

Title:	 	 	

Date:	 	 	 		

		 	

	 		 	 	

		
Stamp:	 		

80

SCHEDULE 11
RECOGNITION OF RIGHTS AGREEMENT
RECOGNITION AGREEMENT dated             , 2007, among: (i) [Celestial Aviation Trading 50 Limited (Celestial)],; and [                    ] (Airframe Lessor/Owner).
WHEREAS:
(A) [Airframe Lessor/Owner] is the lessor/owner of one or more [Airbus model         ] aircraft, bearing manufacturer’s serial number(s) [        ] (the “Aircraft”) operated by Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“Volaris”); and
(B) Celestial is the lessor and owner of one or more [        ] engines, bearing manufacturer’s serial number(s) [        ] (the “Celestial Engine”) and is leasing them to Volaris. The Celestial Engines may from time to time be installed upon the Aircraft.
NOW IT IS AGREED:
1. Celestial and GECAS hereby agree in favor of [Airframe Lessor/Owner] [and [        ] (as mortgagee of the Aircraft)] to recognize the rights and interests of [Airframe Lessor/Owner] [and [        ] in the Aircraft and any engine owned/leased by [Airframe Lessor/Owner] and operated by Volaris.
2. Each of [Airframe Lessor/Owner] [and [        ] hereby undertakes:
(i) to recognize the rights and interests of Celestial and any creditor of Celestial in (a) any Celestial Engine installed on the Aircraft and (b) insurance proceeds payable in respect of any Celestial Engine in excess of the agreed value of the Aircraft on which it is installed; and
(ii) not to claim or assert, as against Celestial or any relevant creditor of Celestial, any right, title or interest in any Celestial Engine and such insurance proceeds arising by virtue of the installation of any Celestial Engine on the Aircraft.
3. Each party hereto hereby agrees to waive, to the extent in conflict with this Recognition Agreement, the benefit of any contrary provisions of applicable law.
4. This Recognition of Rights Agreement shall be governed by and construed in accordance with the laws of the State of New York, USA.

[ insert name of Airframe Lessor/Owner ]	
		
By:	 	 	
		
Title:	 	 	

CELESTIAL AVIATION TRADING 50 LIMITED	 		 	GE COMMERCIAL AVIATION SERVICES LIMITED	
					
By:	 	 	 		 	By:	 	 	
					
Title:	 		 		 	Title:	 		
 
81

SCHEDULE 12A
FORM OF POWER OF ATTORNEY
PRIMERA.- El señor         , en su calidad de representante legal de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, otorga en favor de GE COMMERCIAL AVIATION SERVICES LIMITED y [Financing Parties’ Representative], para ser ejercitado conjunta o separadamente, PODER ESPECIAL CON CARÁCTER DE IRREVOCABLE, por ser condición en un contrato bilateral según lo previsto en el artículo dos mil quinientos noventa y seis del Código Civil para el Distrito Federal y su correlativo del Código Civil Federal y de los Códigos Civiles de los Estados de la República Mexicana en donde se ejercite, con facultades generales para PLEITOS Y COBRANZAS y para ACTOS DE ADMINISTRACIÓN, en los términos de los dos primeros párrafos del artículo dos mil quinientos cincuenta y cuatro y del artículo dos mil quinientos ochenta y siete del Código Civil para el Distrito Federal y su correlativo del Código Civil Federal y de las Códigos Civiles de los Estados de la República Mexicana en donde se ejercite, LIMITADO EN CUANTO A SU OBJETO, para que en forma enunciativa mas no limitativa, en caso de incumplimiento o cualquier otra causa de terminación según se establece en (i) el contrato de términos comunes de arrendamiento de motor de fecha      de          de         , celebrado per GE Commercial Aviation Services Limited y Concesionaria Vuela Campañía de Aviación, S.A. de C.V., y en (ii) el contrato de arrendamiento de motor de fecha      de          de         , celebrado por         , en su carácter de arrendador y Concesionaria Vuela Compañía de Aviación, S.A. de C.V., en su carácter de arrendatario, en relation con el motor modelo          con número de serie          actúe en representación de Concesionaria Vuela Compañía de Aviación, S.A. de C.V. y Ileve a cabo las acciones, los trámites y procedimientos necesarios para la obtención de los permisos, derechos, información, autorizaciones y aprobaciones requeridos para la cancelación de registros e inscripciones ante la Dirección General de Aeronáutica Civil y/o el Registro Aeronáutico Mexicano, así como para la entrega, recuperación, exportación y transportacíon al extranjero de unmotor         , (        ), con número de serie del fabricante     , (        ), así como para comparecer en representacíon de Concesionaria Vuela Campania de Aviación, S.A. de C.V., ante cualquier autoridad, instancia o entidad competente, ya sea Gubernamental a Judicial o de otra indole con respecto de dicho propósito y para ejercitar todos aquellos derechos que de conformidad con las !eyes y reglamentos aplicables puedan asistir en la obtención de dichos permisos, derechos, autorizaciones o aprobaciones en relacíon con dicho motor. Asimismo, en forma enunciativa más no limitativa, el apoderado queda facultado para: promover, solicitar y gestionar para que en representación de Concesionaria vuela Compañía de Aviación, S.A. de C.V., lleve a cabo los trámites, procedimientos, y para que firmen cualesquiera documentos necesarios con respecto a cualesquiera seguros y/o para la cobranza de los productos de seguros relacionados on motor         , (        ), con número de serie del fabricante         , (        ).
SEGUNDA. En el ejercicio de sus facultades la apoderada estará facultada para sustituir total o parcialmente dichas facultades y revocar tales substituciones.
TERCERA. Este poder se otorga con el carácter de irrevocable por ser un medio para cumplir con una obligación con traída con anterioridad.
CUARTA. Los apoderados, indistintamente, podrán llevar a cabo los actos u operaciones que haga necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado del motor         , (        ), con número de serie del fabricante         , (        ) en el Registro Internacional de conformidad con la Convención de Cape Town.

Por:	 	 	
		
Cargo:	 	 	
 
82

UNIVERSAL ENGLISH TRANSLATION OF THE FORM OF POWER OF ATTORNEY IN SPANN
First, Mr                     , in his capacity as attorney in fact of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, [SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE], hereby grants in favor of GE COMMERCIAL AVIATION SERVICES LIMITED and [Financing Parties’ Representative], to be exercised jointly or severally, a SPECIAL POWER OF ATTORNEY IN AN IRREVOCABLE CHARACTER, as it is a condition set forth under certain bilateral agreement according to the provisions of article two thousand five hundred ninety-six of the of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised, with general powers for LAWSUITS AND COLLECTIONS and for ACTS OF ADMINISTRATION, under the terms of the first two paragraphs of article two thousand five hundred fifty-four and article two thousand five hundred eighty-seven of the Civil Code for the Federal District and its related one of the Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power shall be exercised, LIMITED WITH RESPECT TO ITS OBJECT, in order that as an enumeration but not as a limitation, in case there occurs an event of default or any other termination event as set forth in (i) certain engine lease common terms agreement dated     ,                 , entered into by and between GE Commercial Aviation Services Limited y Concesionaria Vuela Compañía de Aviación, S.A. de CV., and (ii) the engine lease agreement dated                     , entered into and between          in its capacity as lessor and Concesionaria Vuela Compañía de Aviación, S.A. de CV., in its capacity as lessee, in connection with an engine          (            ), with manufacturers serial number          (        ), he/she acts on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, and he/she carries out the necessary procedures, actions and proceedings for the obtainment of the permits, duties, information, authorizations and approvals required for the cancellation of registrations, records of the engine with the Direction General of Civil Aeronautics and/or Mexican Aeronautics Registry, as well as for the delivery, recovery and exportation of an engine          (        ), [with manufacturers serial number          (        ), as well as to appear on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN SOC1EDAD ANÓNIMA DE CAPITAL VARIABLE, before any competent authority, instance or entity, whether Governmental or Judicial or of other kind with respect to such purpose and to exercise all those rights that pursuant to the applicable laws and regulations may assist in the obtainment of such permits, duties, authorizations or approvals relating to such engine. Likewise, as an enumeration but not as a limitation the attorney in fact is authorized to: promote, request and negotiate in order that on behalf of “LESSEE”, Concesionaria Vuela Compañía de Aviación, S.A. de C.V., he/she takes the necessary steps and carries out the procedures to execute any documents that may be necessary with respect to any insurance and/or the collection of the proceeds under any related to an engine          (        ), manufacturers serial number          (        ), [with certificate of registration with the United Mexican States].
SECOND.- In exercise of his/her faculties the attorney in fact shall be authorized to substitute in whole or in part such faculties and revoke such substitutions.
THIRD.- This power of attorney is granted in an irrevocable character as it is a mean to comply with an obligation previously assumed.
FOURTH.- Each attorney in fact shall be authorized to carry out the acts or transactions that are necessary due to the nature and object of this power of attorney, haying authority as well to execute the public or private documents that may be necessary for its full compliance
 
83

SCHEDULE 12B
FORM OF IRREVOCABLE DE-REGISTRATION AND EXPORT REQUEST AUTHORISATION
Pursuant to Article XIII
Of the
Cape Town Convention and
Aircraft Equipment Protocol
[Insert Date]
 
To:	[Insert Name of Registry Authority]	
 
Re:	Irrevocable De-Registration and Export Request Authorisation	
The undersigned is the registered [operator] [owner] of the [insert the engine manufacturer name and model number] bearing manufacturer’s serial number [insert manufacturer’s serial number] and registration [number] [mark] [insert registration number/mark] (together with all installed, incorporated or attached accessories, parts and equipment, the “Engine”).
This instrument is an irrevocable de-registration and export request authorisation issued by the undersigned in favour of [insert name of lessor/creditor] (“the authorised party”) under the authority of Article XIII of the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. In accordance with that Article, the undersigned hereby requests:
 
(i)	recognition that the authorised party or the person it certifies as its designee is the sole person entitled to:	
 
 	(a)	[procure the de-registration of the Engine from the [insert name of aircraft register] maintained by the [insert name of registry authority] for the purposes of Chapter III of the Convention on International Civil Aviation, signed at Chicago, on 7 December 1944,] and	
 
 	(b)	procure the export and physical transfer of the Engine from [insert name of country]; and	
 
(ii)	confirmation that the authorised party or the person it certifies as its designee may take the action specified in clause (i) above on written demand without the consent of the undersigned and that, upon such demand, the authorities in [insert name of country] shall cooperate with the authorised party with a view to the speedy completion of such action.	
The rights in favour of the authorised party established by this instrument may not be revoked by the undersigned without the written consent of the authorised party.
Please acknowledge your agreement to this request and its terms by appropriate notation in the space provided below and lodging this instrument to
[insert name of registry authority].
 
84

SCHEDULE 13
PROCESS AGENT POWER OF ATTORNEY
UNICA.-CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, según lo previsto en el artículo dos mil quinientos cincuenta y tres del Código Civil para el Distrito Federal y su correlativo del Códigos Civil Federal y de los Códigos Civiles de los Estados de la República Mexicana en donde se ejercite otorga poder especial, a favor de Incluir denominación de Agente de Proceso], con domicilio en [Incluir domicilio de Agente de Proceso], pero tan amplio como sea necesario en cuanto a las facultades que comprende para ser ejercitado en cualquier jurisdición, para que reciba, en nombre y representación de CONCESIONAR1A VUELA COMPAÑÍA DE AVIACIÓN SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, todas y cada una de las notificaciones, emplazamientos y en general documentos de cualquier índole, en relación con cualquier procedimiento, incluyendo sin limitación, procedimientos judiciales, administrativos o arbitrales, en relación con (i) une contrato de términos comunes de arrendamiento de motor de fecha      de          de         , celebrado por GE Comercial Aviation Services Limited y Concesionaria Vuela Compañía de Aviación, S.A. de C.V., y (ii) el contrato de arrendamiento de motor de fecha      de          de         , celebrado por Celestial Aviation trading 50 Limited, en su carácter de arrendador y Concesionaria Vuela Compañía de Aviación, S.A. de C.V., en su carácter de arrendatario, en relació con el motor modelo          con número de serie         , o de cualquier documento derivado o que tenga relación con dichos instrumentos.
El presente mandato, aunque especial, se otorga tan amplio, cumplido y bastante como en derecho se requiera, para que el apoderado pueda recibir toda documentación relacionada con los negocios mencionados en el párrafo anterior, en forma expresamente establecida.
UNOFFICIAL ENGLISH TRANSLATION OF THE FORM OF POWER OF ATTORNEY IN SPANISH
SOLE.         , SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, according to the provisions of article two thousand five hundred and fifty three of the Civil Code for the Federal District and its related Federal Civil Code and of the Civil Codes for all the States of the Mexican Republic in which this power of attorney shall be exercised hereby grants in favor of [INCLUDE NAME OF AGENT FOR SERVICE OF PROCESS], with address at [ADDRESS OF AGENT FOR SERVICE OF PROCESS] a SPECIAL POWER OF ATTORNEY, but as broad as required by law to be exercised in any jurisdiction, in order to receive, in the name and on behalf of          SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, any and all notifications, service of process and in general any type of documents, related to any procedures, processes, lawsuits, including without limitation, judicial, administrative or arbitration procedures, in connection with (i) certain engine lease common terms agreement dated     ,                  entered into by and between GE Commercial Aviation Services Limited y Concesionaria Vuela Compañía de Aviación, S.A. de C.V., and (ii) the engine lease agreement dated                     , entered into by and between         , in its capacity as lessor and Concesionaria Vuela Compañía de Aviación, S.A. de C.V, in its capacity as lessee, in connection with an engine         (            ), with manufacturers serial number          (        ) or any other document derived or related therewith.
This power of attorney, although special, is granted in the broadest way permitted by law, in order that the attorney-in-fact may receive any documentation related to the transactions described above.
 
85

Exhibit 10.35
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
WORLD FUEL SERVICES AVIATION GROUP OF COMPANIES
FUEL SALES AGREEMENT
This Fuel Sales Agreement dated on January 1, 2012 (the “Agreement”) is between World Fuel Services, Inc., on behalf of itself and as agent for each of its subsidiaries and affiliates listed herein, each of which contracts severally hereunder (“SELLER”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“BUYER”), together also called the “Parties”.
WHEREBY THE PARTIES AGREE AS FOLLOWS

1.	  	SCOPE : Subject to and in accordance with the conditions set forth in the World Fuel Services Aviation Group of Companies’ General Terms and Conditions, which are attached hereto and incorporated herein by reference as Annex 1 (the “General Terms and Conditions”), SELLER agrees to sell and deliver or cause to be sold and delivered and BUYER agrees to purchase, receive and pay for fuel for consumption in BUYER’s aircraft(s) as detailed in this Agreement and the Delivery Locations, Volumes, Prices And Conditions, which are attached hereto and incorporated herein by reference as Annex 2 (the “Prices And Conditions”).	
		
2.	  	CONTRACT PERIOD : January 1, 2012-December 31, 2013	
		
3.	  	INVOICING CURRENCY : United States Dollars	
		
4.	  	SELLING WORLD FUEL ENTITIES : World Fuel Services, Inc.	
			
5.	  	NOTICES :	  		
			
	  	SELLER’s address:	  	World Fuel Services, Inc.	
	  		  	Suite 400	
	  		  	9800 NW 41 st Street	
	  		  	Miami, FL 33178	
	  		  	United States of America	
	  		  	Attn: General Counsel	
	  		  	Fax: (305) 351-4497	
			
	  	BUYER’s address:	  	Prolongación Paseo de la Reforma 490 piso 1	
	  		  	Colonia Santa Fe Peña Blanca	
	  		  	Delegación Álvaro Obregón	
	  		  	México, Distrito Federal; C.P. 01210	
	  		  	México	
	  		  	Attn: Joseph Prieto	
	  		  	With a copy to: General Counsel	
		
6.	  	ORDER OF PRECEDENCE Any inconsistency in the provisions of this Agreement will be resolved by giving precedence in the following order, from highest (a) to lowest (c):	
		
	  	(a)       The main body of this Agreement;	
 
Page 1 of 15

 	(b)	Annex 2 to this Agreement, “Delivery Locations, Volumes, Prices And Conditions”;	
 
 	(c)	Annex 1 to this Agreement, “World Fuel Services Group Of Companies General Terms And Conditions For Aviation Fuel Sales”;	
IN WITNESS WHEREOF the undersigned parties, intending to be legally bound, have executed this Agreement in duplicate originals.

Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (Volaris)	 		 	World Fuel Services, Inc.	
			
/s/ Fernando Suarez Gerard	 		 	/s/ Richard McMichael	
By:	  	Fernando Suarez Gerard	 		 	By:	 	Richard McMichael	
Title:	  	Chief Financial Officer	 		 	Title:	 	Sr. Vice President Finance, Aviation	
	  		 		 	Date: January 1, 2012	
/s/ Holger Blankenstein	 		 		 		
By:	  	Holger Blankenstein	 		 		 		
Title:	  	Chief Commercial Officer	 		 		 		
Date: January 1, 2012	 		 		 		
This signature page is part of the World Fuel Services Aviation Group Of Companies Fuel Sales Agreement executed by World Fuel Services, Inc. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. on January 1, 2011.
 
Page 2 of 15

ANNEX 1
To World Fuel Services Aviation Group Of Companies Fuel Sales Agreement
dated January 1, 2012 (Hereinafter referred as the “Agreement”)
WORLD FUEL SERVICES GROUP OF COMPANIES’
GENERAL TERMS AND CONDITIONS FOR
AVIATION FUEL SALES
 
1.	DEFINITIONS	
The following terms shall have the meaning defined hereinafter, unless the context otherwise requires:
Agreement: any agreement for aviation fuel sales into which these General Terms and Conditions have been incorporated;
Buyer’s Aircraft: the aircraft owned, leased or operated by or on behalf of BUYER;
Deliverer: the company or entity or group of entities in addition to SELLER that, on behalf of SELLER, performs SELLER’s supply and delivery obligations under the Agreement;
Delivery Ticket: a document, produced in writing or by electronic means, in accordance with SELLER’s normal practices, stating the date and time of receipt, the registration number of BUYER’s Aircraft, the flight number, aircraft type, product description, meter readings and quantity delivered in kilograms, litres or gallons and any additional information the parties may agree upon;
Fuel: aviation jet fuel;
Gross negligence: any act or omission done or omitted to be done with deliberate or reckless disregard for the reasonably foreseeable consequences of such act or omission;
Location: any of the airports listed in the Agreement;
Off-spec Fuel: Fuel which is found not to be in accordance with the relevant quality specifications set forth in the Agreement or these General Terms and Conditions.
 
2.	REPRESENTATION	
SELLER agrees to sell and deliver or procure the sale and delivery of Fuel to BUYER, who will in turn buy, receive and pay for the Fuel for consumption in BUYER’s Aircraft.
 
3.	QUALITY	
 
3.1	SELLER warrants that the Fuel supplied by it shall meet one of the specifications set forth hereunder:	
 
•	 	Grade Jet A-1, Joint Fuelling System Check List, “Aviation Fuel Quality Requirements for Jointly Operated Systems”, Kerosene Type Fuel, latest issue;	
 
Page 3 of 15

•	 	ASTM Standard D 1655, “Specification for Aviation Turbine Fuels” Jet A / Jet A-1, latest issue;	
 
•	 	British Ministry of Defence Standard DEF STAN 91-91, Turbine Fuel, Aviation “Kerosene Type”, Jet A-1, latest issue;	
 
•	 	IATA Guidance Material for Aviation Turbine Fuels Specifications, Jet A / Jet A-1, latest issue;	
 
•	 	Canadian specification Can/CGSB-3.23-M86, Jet A Fuel, latest issue;	
 
•	 	Canadian specification Can/CGSB-3.23-97, “Aviation Fuel, Kerosene Type” Jet A / Jet A-1, latest issue;	
 
•	 	Grade TS-1: GOST10227-86 “Jet Fuel Specifications”, latest issue; or	
 
•	 	Mexican Turbine Fuel Normative, NMX-L-004-1994-SCFI, latest issue.	
Any other specifications that may apply shall be set forth in the schedule listing the Locations attached to the Agreement.
 
3.2	EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE 3.1 ABOVE, SELLER MAKES NO REPRESENTATIONS, WARRANTIES OR GUARANTEES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, FITNESS OR SUITABILITY OF THE FUEL FOR ANY PARTICULAR PURPOSE OR OTHERWISE.	
 
4.	QUANTITY	
 
4.1	SELLER shall sell and deliver, or cause to be sold and delivered, and BUYER shall purchase the quantities agreed upon between the parties, provided however that BUYER shall in no event be obligated to purchase more than its actual requirements.	
 
4.2	Unless otherwise set forth in the Agreement, the annual volume by Location will be divided into equal monthly quantities throughout the contract year, subject to normal seasonal variations.	
 
4.3	BUYER acknowledges that the quantities mentioned in the Agreement are BUYER’s good faith estimates. BUYER shall give SELLER reasonable advance written notice of any major change in its estimates, but in no event less than thirty (30) days.	
 
4.4	If BUYER fails over a period of at least ***** of the quantity deliverable at any Location pursuant to the Agreement, SELLER shall be entitled to give BUYER thirty (30) days written notice of termination of the Agreement with respect to that Location.	
 
4.5	If BUYER from time to time has requirements for Fuel at delivery locations that are not set forth in the Agreement, BUYER shall submit written requests for such supply at least three (3) business days in advance to SELLER. SELLER may, but shall have no obligation to, fulfill such requests. To constitute a binding order, BUYER’s request must be accepted in writing by SELLER and included in an amendment to the Agreement or a separate agreement.	
 
Page 4 of 15

5.	DELIVERY	
 
5.1	Should the Fuel be delivered by SELLER or Deliverer into BUYER’s Aircraft tanks (“into-plane delivery”), the following shall apply:	
 
 	5.1.A	SELLER shall take all reasonable measures to ensure the prompt refuelling of BUYER’s Aircraft if such Aircraft is scheduled for servicing and arrives on time. If BUYER’s Aircraft arrives late, ahead of its scheduled time of arrival, or operates a non-scheduled flight, SELLER shall endeavour to promptly refuel BUYER’s Aircraft, subject to operational requirements imposed by SELLER’s other delivery commitments either to aircrafts operating scheduled flights or to other aircrafts operating non-scheduled flights arriving before BUYER’s Aircraft.	
 
 	5.1.B	Title to and risk of loss of the Fuel shall pass to BUYER at the time the Fuel passes the inlet coupling of the receiving aircraft.	
 
 	5.1.C	SELLER’s or Deliverer’s measurement shall be accepted as prima facie evidence of the quantities of Fuel delivered, but BUYER shall be entitled to check the accuracy of the instruments used by SELLER or Deliverer upon reasonable notice during SELLER’s or Deliverer’s normal operating hours, and in the presence of SELLER’s or Deliverer’s representative. Determinations of quantities made in accordance with international industry practice shall be binding.	
 
 	5.1.D	Upon BUYER’s request to SELLER, SELLER may provide the most current density measurement of Fuel from airport storage, or provide BUYER with appropriate devices to measure the Fuel at BUYER’s Aircraft. Notwithstanding the foregoing, BUYER shall not hold SELLER or Deliverer responsible for any claims and expenses related to SELLER or Deliverer providing the density measurement or any measuring devices to BUYER, or BUYER’s use of such devices.	
 
 	5.1.E	Except as otherwise agreed in writing by SELLER, SELLER or Deliverer shall not be obligated to deliver any Fuel to BUYER unless a representative of BUYER is present. SELLER or Deliverer shall provide a copy of a Delivery Ticket to BUYER’s Aircraft crew as necessary pursuant to local requirements.	
 
 	5.1.F	Any Fuel sold or caused to be sold by SELLER under the Agreement which is found to be Off-spec Fuel may be rejected by BUYER, at BUYER’s sole discretion, provided that BUYER shall give SELLER immediate notice that the Fuel is Off-spec and the opportunity to make its own inspection prior to unloading such Fuel.	
 
 	5.1.G	If Fuel is defuelled at BUYER’s request for being Off-spec and such Fuel is subsequently found to meet the specifications as to quality set forth in the Agreement, BUYER shall be responsible for the payment of such Fuel and all costs and expenses associated with such defuelling. If such defuelled Fuel can be reloaded into BUYER’s Aircraft in a reasonable time, or if segregated storage facilities for defuelled Fuel are available, the Fuel shall at SELLER’s option be reloaded or stored for BUYER’s use. BUYER shall pay SELLER the costs associated with the storage or reloading of Fuel under this Article 5.1.G. If the defuelled Fuel is not reloaded or stored as aforesaid, SELLER shall at any time within its discretion have full power to sell or otherwise dispose of such Fuel on BUYER’s behalf. BUYER shall be credited the proceeds realized by SELLER from the sale of such Fuel net of SELLER’s expenses.	
 
Page 5 of 15

 	5.1.H	Notwithstanding anything to the contrary contained in the Agreement, SELLER shall not be obliged to deliver Fuel into or defuel any BUYER’s Aircraft if such aircraft is or is reasonably believed by SELLER or Deliverer to be under the control of hijackers or if any other circumstance whatsoever of a similar nature (including, without limitation, circumstances of duress) exist or are reasonably believed to exist by SELLER or Deliverer. Any fuelling by SELLER of such Aircraft shall be carried out on terms and conditions agreed by the parties at the time of that fuelling.	
 
 	5.1.I	If BUYER requests that a delivery be made by the SELLER or Deliverer under the circumstances set forth in Article 5.1.H and such a delivery is made, then BUYER hereby agrees (a) that the Fuel delivered shall be for the account of BUYER and (b) to indemnify and hold SELLER and Deliverer harmless pursuant to the provisions of Article 17 herein.	
 
5.2	Should the Fuel be delivered by SELLER or Deliverer into a fuel storage facility or at another point of delivery, the following shall apply:	
 
 	5.2.A	Title to and risk of loss of the Fuel shall pass to BUYER as the Fuel passes the delivery point on the designated pipeline or storage facility, or at the time of book, stock or inventory transfer. SELLER shall retain full security interest in the Fuel until SELLER receives payment in full.	
 
 	5.2.B	SELLER’s or Deliverer’s measurement shall be accepted as prima facie evidence of the quantities of Fuel delivered, but BUYER shall be entitled to check the accuracy of the instruments used by SELLER or Deliverer upon reasonable notice during SELLER’s or Deliverer’s normal operating hours, and in the presence of SELLER’s or Deliverer’s representative. Determinations of quantities made in accordance with customary international industry practice shall be binding.	
 
 	5.2.C	Any Fuel sold under the Agreement which is found to be Off-spec Fuel may be rejected by BUYER, at BUYER’s sole discretion provided that BUYER shall give SELLER immediate notice that the Fuel is Off-spec and the opportunity to make its own inspection prior to unloading such Fuel.	
 
5.3	In the event that the SELLER’s or Deliverer’s equipment is commandeered by the authorities and/or used as cover for military type operations, liability for resulting damage and injuries to BUYER’s property or personnel is disclaimed to the fullest extent permitted by law.	
 
5.4	SELLER’s obligation to deliver Fuel to BUYER in Locations where SELLER has arrangements with Deliverer to make deliveries on SELLER’s behalf shall be contingent on the continuance of its arrangements with said Deliverer. If such arrangements at any Location terminate for any reason, and regardless of whether SELLER’s performance is otherwise excused, SELLER shall have, in addition to any other rights it may have hereunder, the right to terminate the Agreement with respect to any such Location by notice to BUYER given no later than thirty (30) days after such arrangements with Deliverer cease.	
 
Page 6 of 15

6.	DELIVERIES OUTSIDE NORMAL ARRANGEMENTS	
If BUYER requests SELLER to make deliveries:
 
 	(a)	at an area at any of the Locations other than the areas usually and regularly used by BUYER for the uplift of Fuel;	
 
 	(b)	by a different method than the one normally used for supplies of Fuel to BUYER’s Aircraft;	
 
 	(c)	outside SELLER’s or Deliverer’s normal service hours; or	
 
 	(d)	otherwise outside the scope of normal under-wing into-plane delivery.	
then the following shall apply:
 
 	(i)	The parties shall enter into a separate written agreement; provided however that, SELLER reserves the right to either refuse Fuel deliveries or charge BUYER the additional costs and expenses incurred by SELLER in making such deliveries;	
 
 	(ii)	BUYER will have sole liability for an any and all damages arising out of the performance of such services and shall indemnify and hold SELLER and Deliverer harmless in accordance with the provisions of Article 17 hereof.	
For purposes of this Article 6, “normal under-wing into-plane delivery” includes but is not limited to, opening the aircraft fuelling station panels, removing the adaptor caps, connecting the nozzles to the adaptors and providing Fuel up to the adaptors, and on completion of Fuel delivery, disconnecting the nozzles, replacing adaptor caps and closing the fuelling panels.
 
7.	DEFUELLING	
BUYER may request and SELLER may agree upon a defuelling of BUYER’s Aircraft. ***** The parties shall agree upon the value of the Fuel so defuelled.
If however defuelling of BUYER’s Aircraft is necessary due to SELLER’s delivery of Off-spec Fuel or delivery of a larger quantity than agreed upon, SELLER or Deliverer shall defuel or procure the defuelling of BUYER’s Aircraft, at BUYER’s request and at SELLER’s sole cost and expense.
 
8.	PAYMENT	
 
8.1	SELLER shall notify BUYER, by submission of invoices, of the cost of Fuel, duties, taxes, fees and any other charges under the Agreement. If credit terms have been extended to BUYER, BUYER shall pay such invoice within the periods established in the Agreement. Otherwise, all payments shall be made prior to the delivery of any Fuel. All sums due under the Agreement but not paid *****, as published on the due date of any invoice or the first banking day thereafter in the Wall Street Journal, New York. SELLER reserves the right to apply BUYER’s payments to any outstanding invoices or obligations of BUYER, as determined by SELLER in its sole discretion, without regard to the aging of any account. BUYER shall be liable for all fees and costs, including without limitation attorney’s fees, incurred by SELLER in connection with any collection activities undertaken by SELLER for the non-payment of any amounts due hereunder by BUYER.	
 
8.2	Unless otherwise specified in the Agreement, all payments shall be made in US Dollars, by wire transfer of immediately available funds to the account of SELLER shown on the invoice. BUYER shall be responsible for its respective banking charges.	
 
8.3	To the extent that SELLER extends credit terms to BUYER, BUYER’s outstanding balance shall never exceed the credit limit specified by SELLER. Availability under the credit limit shall be calculated by adding the total of the invoiced balance, plus the good faith estimate of the dollar amount of uplifted Fuel and other related services obtained and utilized but not yet billed to BUYER, and subtracting same from BUYER’s total credit limit. BUYER may request a weekly written or verbal estimate of any unbilled Fuel and other related services obtained and SELLER shall provide such good	
 
Page 7 of 15

 	faith estimate in response as soon as commercially practicable. Both BUYER and SELLER hereby acknowledge that: (i) the good faith estimate is merely an estimate and can deviate from the actual unbilled amount, due to forces outside of either party’s control, including but not limited to, charges and fees from third party vendors, and (ii) SELLER shall not be liable for any delay in providing such estimate. Nonetheless, both parties agree to be bound by the good faith estimates of SELLER as to the unbilled portion of the credit limit and BUYER shall have no recourse against SELLER for any inaccuracies in the calculation thereof. SELLER reserves the right to modify or cancel the credit limit or credit terms provided to BUYER at any time, in its sole discretion upon notice to BUYER. If SELLER elects not to extend or cancels any credit terms provided to BUYER, prior to each delivery of Fuel or other related services, BUYER shall: (a) make a prepayment to SELLER; (b) cause to be issued a letter of credit in favor of SELLER in a form, in an amount and from a bank that is acceptable to SELLER from time to time in its sole discretion, or (c) give other security to SELLER in a manner, of a type, in a form and in an amount that is acceptable to SELLER in its sole discretion. BUYER’s complete compliance with the foregoing provision shall be a condition precedent to SELLER’s obligation to deliver Fuel or services under the Agreement.	
 
8.4	SELLER reserves the right, in addition to all other rights and remedies available to it under the law, in equity or otherwise, to suspend further deliveries of Fuel, and demand payment of all outstanding balances, if BUYER fails to make any payment as herein provided, if BUYER’s outstanding balances exceed the applicable credit limit, or if SELLER, in its sole discretion, at any time deems itself insecure with regard to the creditworthiness or financial condition of BUYER.	
 
8.5	In consideration of any credit terms extended to BUYER and as security for the payment of amounts due from BUYER to SELLER, BUYER, either as owner of the BUYER’s Aircraft or as duly authorized agent of the owner, hereby grants SELLER (a) a first priority security interest in the Fuel until the purchase price therefor (and any sum payable under any invoice) is paid in full and (b) a lien on and a security interest in each BUYER’s Aircraft (including all engines and equipment) as to which Fuel or Services have been provided (collectively, “Collateral”). The Collateral includes any BUYER’s Aircraft described in BUYER’s account application submitted to SELLER. The Agreement and these General Terms and Conditions constitute a security agreement for purposes of the Uniform Commercial Code. SELLER has the right to file any documents (including Uniform Commercial Code financing statements) relating to said Collateral, without BUYER’s signature or consent, as may be necessary or appropriate to perfect SELLER’s security interest in the Collateral. In addition, BUYER agrees to sign any such documents if requested by SELLER. In the event of default on the part of BUYER SELLER shall have the right, in addition to all other rights and remedies available under law, in equity or otherwise, to retain and/or repossess and sell, without court order, the Collateral at public or private sale, and SELLER may be the purchaser at such sale for reasonable value. BUYER shall be responsible to pay all reasonable attorneys’ fees and costs of repossession, insurance, storage and sale of the Collateral. In the event repossession occurs, BUYER shall sign and deliver to SELLER documents of title to the Collateral (including a bill of sale and any existing certificate of registration). In the event of default, SELLER shall be authorized to retain and/or repossess the Collateral without demand, and for this purpose to enter upon the premises where the Collateral is located and remove such Collateral. SELLER shall, in addition, have all rights and remedies available under law, in equity or otherwise, by statute or otherwise, including the right to enforce any non-consensual or other lien arising by operation of law, by statute or otherwise.	
 
8.6	BUYER acknowledges and agrees that SELLER shall have the right to offset any amounts owed by BUYER to SELLER against any amounts owed by SELLER to BUYER under any derivatives contract between SELLER and BUYER, including without limitation, swaps and options based on fixed and/or floating prices.	
 
Page 8 of 15

9.	PRICE ADJUSTMENT	
 
9.1	The prices payable for the Fuel to be supplied hereunder shall be those specified in the Agreement, which may be amended from time to time by mutual written agreement of the parties.	
 
9.2	If due to circumstances beyond its control, SELLER’s cost of supplying Fuel to BUYER increases as a result of SELLER being unable, or able only on commercially unreasonable terms, to obtain supplies of Fuel from its normal sources and recognized routes for such supplies, then SELLER may give BUYER written notice of its intention to increase the price payable at an affected Location, by the addition of a surcharge to reflect such increase in cost. If at the time of giving such notice, SELLER is unable to specify the amount of any surcharge applicable to a delivery Location, the surcharge to be applied to that Location shall be SELLER’s best estimate of such amount and the necessary adjustment shall be made as a soon as possible thereafter. If BUYER is unwilling to accept the surcharge, the surcharge shall nevertheless apply with effect from the date of SELLER’s notice, but BUYER shall have the right, within ten (10) days of the date of SELLER’s notice, to give written notice to SELLER withdrawing the Location in question from the Agreement. Withdrawal of the delivery Location shall be effective fifteen (15) days after the date of BUYER’s notice of withdrawal.	
 
9.3	The prices of the Fuel may be varied by SELLER to reflect wholly, and from the effective date, any changes in any duty, tax or charge of any kind included in the prices of the Fuel (or any new duty, tax or charge of any kind to be included in the price of the Fuel). Notwithstanding the foregoing, increases in prices related to published “ex-refinery quotations” and prices related to conditions set forth by local official government authorities or government controlled entities shall change on the day the price increase becomes effective (whether retroactive or otherwise).	
 
9.4	Notwithstanding the provisions of Article 9.3 hereto, if any law or governmental decree, order, regulation or ruling shall prevent the parties from establishing prices of Fuel in the manner provided under the Agreement, SELLER and BUYER shall promptly meet to determine whether the Agreement can be modified by mutual agreement to cause it to conform with such law, decree, order, regulation or ruling. If within fifteen (15) days after such meeting, no such modification is mutually agreed to in writing, either party shall then have the right, notwithstanding anything herein contained to the contrary, to terminate the Agreement by giving the other party not less than fifteen (15) days’ notice in writing.	
 
9.4	Notwithstanding the provisions of Article 9, BUYER shall nevertheless be liable for any amounts or obligations that have accrued prior to the termination of the Agreement.	
 
10.	DUTIES, TAXES, FEES AND CHARGES	
 
10.1	BUYER shall pay any duties, taxes, fees or other charges, public or private, imposed on the importation, transportation, delivery, sale, inspection, storage, withdrawal or use of Fuel or on SELLER, or required to be paid or collected by SELLER, except for taxes	
 
Page 9 of 15

 	on SELLER’s income. To the extent allowed, SELLER shall show these duties, taxes, fees and other charges as separate items on the invoice for account of BUYER. If any amount of taxes for the account of BUYER is collectable from any person other than BUYER, it shall be paid by BUYER on demand.	
 
10.2	SELLER shall endeavour to keep BUYER informed at all times about the duties, taxes, fees and charges existing or to be charged to BUYER. Should SELLER, however, in good faith provide inaccurate or incomplete information to BUYER, BUYER shall not be relieved of the obligation to pay.	
 
10.3	If BUYER is entitled to purchase any Fuel sold pursuant to the Agreement free of any duties, taxes, fees or charges, BUYER shall deliver to SELLER a valid exemption certificate, license, or other required document necessary for SELLER to apply the exemption to such purchase prior to the date any payment is required under the Agreement.	
 
11.	BUYER’S RESPONSIBILITIES	
 
11.1	BUYER shall have sole responsibility for operating all appropriate aircraft fuelling switches, valves and pre-set quantity gauges.	
 
11.2	If BUYER requests that SELLER or Deliverer perform the services described in Article 11.1 or any services other than those set forth in the Agreement, and SELLER agrees to perform same, the parties shall enter into a separate written agreement. If notwithstanding the foregoing, SELLER or Deliverer does perform additional delivery services in the absence of a separate written agreement as aforesaid, BUYER shall indemnify SELLER in accordance with Article 17 hereof.	
 
12.	INSPECTIONS, SAMPLES	
 
12.1	BUYER or its representative shall have the right to perform a (technical) survey or inspection of:	
 
 	(a)	SELLER’s or Deliverer’s records on quality control and checks of the Fuel; and	
 
 	(b)	SELLER’s or Deliverer’s refuelling services at the aircraft.	
The items mentioned under this Article 12.1 shall be made available for inspection or survey, as the case may be, to BUYER at the facility where they are utilised for deliveries to BUYER. A (technical) survey or inspection shall be made during normal working hours. BUYER shall give reasonable notice of its intention to perform a (technical) survey or inspection as provided in this Article 12.1, and shall not hinder, delay or disrupt SELLER’s or Deliverer’s fuelling activities.
 
12.2	At any given Location where SELLER does not itself have the authority to grant a right to inspect or survey, BUYER’s right to inspect or survey shall be subject to approval being obtained from the requisite controlling body. SELLER shall use reasonable endeavours to obtain such approval.	
 
12.3	BUYER or its representative shall have the right to obtain samples of the Fuel intended to be delivered to BUYER under the Agreement. Such samples shall be taken by SELLER or Deliverer with BUYER having the right to be present. BUYER shall give SELLER reasonable advance notice of its intention to obtain samples. The point at which the samples are taken and the method of sampling shall be as agreed between BUYER and SELLER or Deliverer.	
 
Page 10 of 15

13.	COMPLAINTS, CLAIMS	
 
13.1	Complaints by BUYER as to short delivery or delays shall be issued to SELLER at the time of delivery, followed by a written claim to be made within ten (10) days of delivery.	
Complaints by BUYER as to defects in quality or any other matter shall be issued to SELLER promptly and followed by a written claim to be made within three (3) days of delivery. Furthermore, SELLER shall be given the opportunity to examine the Fuel in question and reserves the right to request additional supporting documentation.
In the event that the terms of any government-controlled supplier for any given Location provide for shorter periods than the ones specified herein, BUYER shall comply with said shorter periods.
If the claim is not made within the ten (10) day period specified herein, and/or no opportunity is given to SELLER to examine the Fuel in question, BUYER shall be deemed to have waived its right to make any claims with respect to such Fuel.
 
13.2	Unless otherwise agreed by SELLER, the pendency of any such claim shall not entitle BUYER to delay or withhold payment of any portion of the face amount of any invoice for Fuel delivered pursuant to the Agreement (including the Fuel subject to the claim).	
 
13.3	BUYER’s sole remedy in the event of a defect in the quality of Fuel supplied hereunder shall be the defuelling of BUYER’s Aircraft pursuant to Article 7 and in the case of a shortage, the re-delivery of Fuel in accordance with Article 5.	
 
14.	FUELLING/DEFUELLING WITH PASSENGERS ON BOARD OR EMBARKING OR DISEMBARKING	
 
14.1	Into-plane deliveries and defuelling shall take place only where there are no passengers or other persons on board or embarking or disembarking the aircraft. However, to the extent permitted by local regulations, into-plane delivery or defuelling may be made when there are passengers or other persons on board the aircraft or embarking or disembarking. In such event, BUYER shall be solely responsible for ensuring that (i) the provisions of the local airport regulations relating to such delivery or removal are carried out; (ii) that appropriate instructions are issued by BUYER to its employees, agents and independent contractors for the safety of said persons during such delivery or removal; (iii) that such instructions are strictly observed by its employees and said persons; and (iv) that passengers joining or leaving the aircraft are safely moved under the supervision of a competent person over a safe route away from such operations and are actually prevented from lingering, smoking or causing any other potential source of ignition.	
 
14.2	BUYER shall have sole responsibility and liability for any and all injury to or death of any said passengers or other persons caused by or arising out of any fuelling or defuelling performed under the circumstances described in Article 14.1 and shall indemnify SELLER in accordance with Article 17 hereof.	
 
15.	FORCE MAJEURE	
 
15.1	No failure or omission by either party to carry out or observe any of the provisions of the Agreement or delay in so doing shall give rise to any claim against that party, or be deemed to be a breach of the Agreement, if such failure or omission shall be excused by law or if the same shall arise out of Force Majeure, which is hereinafter defined as	
 
Page 11 of 15

 	(a) any cause or circumstances not reasonably within the control of that party, whether or not foreseen, including (without limitation) such causes as labour disputes, strikes, embargoes, governmental intervention, or the party’s response to the insistence of any governmental instrumentality or person purporting to act therefor, wars, civil commotion, hijacking, fire, flood, accident, storm or any Act of God or (b) any curtailment, failure or cessation of the supplies of Fuel the SELLER’s suppliers’ (whether in fact sources of supply for the purposes of the Agreement or not). The party who claims the benefit of this Article shall give prompt notice thereof and shall use every reasonable means to resume full performance as promptly as possible. When the term “party” as used in this Article 15 applies to SELLER, it shall also include SELLER’s subsidiaries and affiliates.	
 
15.2	Notwithstanding the provisions of Article 15.1, neither party shall be relieved of any accrued obligation to make payments under the Agreement.	
 
15.3	The party delayed or prevented by Force Majeure shall use all reasonable endeavours to remove the cause of such interruption or mitigate the effects thereof, and upon remedying of such cause, said party shall promptly resume the performance of its obligations, provided, however, that a party in removing such cause of interruption or mitigating such efforts shall not be required to settle strikes or lockouts or government claims by acceding to any demands if, in the discretion of that party, it would be inappropriate to do so. Upon the cessation of the event of Force Majeure, performance under the Agreement shall be resumed, provided that the term of this Agreement shall not be extended, nor shall either party be required to perform obligations delayed, interfered with or prevented by reason of such Force Majeure.	
 
15.4	In the event deliveries are withheld, reduced or suspended due to Force Majeure on SELLER’s part, BUYER shall be free, for so long as deliveries hereunder are withheld, reduced or suspended, to purchase Fuel from third parties during such period but only to the extent that SELLER does not supply Fuel to BUYER.	
 
15.5	Under no circumstances shall SELLER be obligated to purchase or acquire Fuel to replace supplies lost as a result of Force Majeure. Should SELLER thereafter purchase or otherwise acquire additional supplies whether from an existing supplier or otherwise, SELLER shall not be required to allocate any such supplies to BUYER.	
 
15.6	Force Majeure on the part of either party’s suppliers, agents or independent contractors at any given Location shall, as to that specific Location, be considered Force Majeure of that party.	
 
16.	GENERAL SHORTAGE OF FUEL	
Regardless of whether caused by the occurrence of any of the events referred to in Article 15 above, if in SELLER’s reasonable opinion, there is such a shortage(s) of Fuel or any other fuel product, at any of its present or future regular sources of supply, or at any of those of its suppliers (whether or not at the sources designated in the Agreement, if any), that makes SELLER unable to meet its own requirements and those of its subsidiaries and/or affiliates and its sales obligations to customers, then SELLER may allocate, on any fair and reasonable basis, in its reasonable discretion, its available fuel supplies among itself, its subsidiaries or affiliates, and its customers, including BUYER.
 
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17.	LIABILITY AND INDEMNITY	
 
17.1	With respect to any activities undertaken by SELLER or Deliverer pursuant to Articles 5.1.D, 5.1.I, 6, 11.2 and 14.1, BUYER hereby agrees to indemnify and hold SELLER and Deliverer harmless from and against any and all claims, demands, proceedings, damages, losses, penalties , taxes, liabilities, cost or expenses (including reasonable attorneys’ fees) (collectively “Liabilities”) for loss of or damage to any property whatsoever or for injury, including fatal injury or disease to any person whatsoever.	
BUYER acknowledges that the indemnities set forth herein extend to the respective directors, officers, employees, agents and sub-contractors of SELLER, its subsidiaries, affiliates and any of its Deliverers, and that SELLER is acting as the agent and trustee of such other persons in accepting such indemnities.
 
17.2	Notwithstanding anything to the contrary in these General Terms and Conditions or the Agreement and to the extent permitted by law, in no event shall the liability of SELLER in connection with any Fuel, products, services or this Agreement, whether by reason of breach of contract, tort, statute or otherwise exceed the amount paid by BUYER to SELLER for such Fuel, products or services. Furthermore, in no event shall either party have any liability for loss of profits, loss of business, indirect, incidental, consequential, special, punitive or exemplary damages.	
 
18. 	(EARLY) TERMINATION	
 
18.1	Either party may terminate the Agreement upon in whole or in part upon thirty (30) days prior written notice to the other party. The termination will be effective no earlier than the date of written notice to the other party.	
 
18.2	A party may terminate the Agreement in whole or in part by means of written notice to the other party without need of judicial recourse and with immediate effect if the other party:	
 
 	(a)	commits a material breach of the Agreement, but only insofar as the breaching party has not cured such breach, if curable, within ten (10) days (within two (2) days if non-payment) of receiving written notice of the default breach from the first party. For the avoidance of doubt, BUYER’s failure to meet any of its payment obligations shall be deemed a material breach.	
 
 	(b)	becomes insolvent, makes a general assignment for the benefit of its creditors or commits an act of bankruptcy or if a petition for its reorganisation or readjustment of its indebtedness is filed by or against it, or if a receiver, trustee or liquidator of all or substantially all of its property is appointed.	
 
18.4	Termination effected by a party under this Article 18 shall not affect any other rights or remedies of such party under the law or otherwise.	
 
18.5	Notwithstanding (early) termination, each party shall fulfill all obligations accrued under the Agreement prior to the time the termination becomes effective.	
 
19.	ASSIGNMENT AND SUBCONTRACTING	
Except as provided in this Article 19, neither party may assign its rights or delegate its obligations hereunder, with respect to any Location mentioned in the Agreement, in whole or in part without the prior written consent of the other party. SELLER may however assign its rights and/or delegate its obligations to its affiliated companies without prior written consent of BUYER.
 
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20.	NON-WAIVER	
No failure or delay of any party (including their employees and agents) to exercise any right or power under the Agreement or at law shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power under the Agreement, and no waiver of any party of any provision or part of any provision of the Agreement shall be binding unless expressly confirmed in writing.
 
21.	NON-DISCLOSURE	
The terms contained in the Agreement are confidential between the parties. The parties shall only disclose such information to persons outside their organisation, and their respective affiliates or Deliverers to the extent necessary to perform the Agreement and upon the prior written consent of the other party. However, each party shall be permitted to disclose the information contained in the Agreement to extent required by law or governmental order.
 
22.	TRADE SANCTIONS AND EXPORT CONTROLS	
BUYER acknowledges that the Government of the United States of America has imposed trade sanctions and export restrictions against certain countries and political areas and companies, nationals and U.S. Government-designated nationals of such countries and areas, and that it further has imposed restrictions on U.S. companies and nationals doing business with them. In addition, it has imposed restrictions on U.S. companies and nationals doing business with certain companies and persons who it has determined have violated the restrictions. BUYER agrees that it shall keep itself informed of and shall comply with such sanctions and restrictions as they are revised from time to time, and that neither BUYER nor any of the parties receiving or purchasing Fuel on behalf of BUYER hereunder shall be entities or individuals subject to such sanctions and restrictions.
 
23.	NOTICES	
Notices under the Agreement shall be made in writing and may be given or sent by: (a) hand; (b) registered post; or (c) facsimile transmission, to the other party at the address stated in the Agreement. Upon request of a party, the other party will reconfirm the receipt of any notice. Any notice or other document or communication shall be deemed to have been duly served upon and received by the addressee: (a) if delivered by hand, at the time of delivery; (b) if sent by registered post, five (5) days after being put in the post; and (c) if transmitted by way of facsimile transmission, at the time of transmission, subject to a confirmation copy being sent by registered post to the address specified in the Agreement within twenty-four (24) hours from transmission.
 
24.	DISPUTES	
In the event of any litigation between the parties to this Agreement relating to or arising out of this Agreement, the prevailing party shall be entitled to an award of attorney’s fees on a full indemnity basis, and costs, including such fees and costs at trial and all appellate levels. The Agreement shall be considered as having been entered into in the State of Florida, United States of America and shall be construed and interpreted in accordance with the laws of thereof. In any action or proceeding arising out of or relating to the Agreement (an “Action”), each of the parties hereby irrevocably submits to the non-exclusive jurisdiction of any Federal or state court sitting in Miami, Florida and further agrees that any Action may be heard and determined in such Florida Federal or state court.
 
Page 14 of 15

25.	WAIVER OF IMMUNITY	
To the fullest extent permitted by applicable law, BUYER expressly and irrevocably waives, and agrees not to assert, a defence of immunity on the grounds of sovereign immunity or other similar grounds in any action or proceeding which may be commenced or asserted by SELLER against BUYER or BUYER’s revenues and/or assets, whether in whole or in part or otherwise, which status would otherwise entitle BUYER to assert such a defence in any claim against it from: (a) suit; (b) jurisdiction of any court; (c) relief by way of injunction, order for specific performance or for recovery of property; (d) attachment of BUYER’s revenues and/or assets (whether before or after judgment); and (e) execution or enforcement of any judgment to which BUYER or BUYER’s revenues and/or assets might otherwise be subject in any proceedings in the courts of any jurisdiction.
 
26.	TRIAL BY JURY	
The Parties hereby knowingly, voluntarily and intentionally waive the right any of them may have to a trial by jury with respect to any litigation based hereon or arising out of this Agreement or any transactions or course of dealing hereunder.
 
27.	ENTIRE AGREEMENT	
The Agreement and these General Terms and Conditions contain all agreements, arrangements and stipulations between the parties with respect to the supply of Fuel for the Location(s) specified herein and supersede all prior agreements, arrangements and stipulations with respect to the same subject.
In case of discrepancies between any provision in these General Terms and Conditions and any provision in the Agreement, the provisions in the Agreement shall prevail.
 
28.	SEVERABILITY	
The provisions of the Agreement and these General Terms and Conditions are severable and the invalidity of any provision in the Agreement shall not affect all other provisions, which will remain valid and binding.
 
29.	MODIFICATIONS	
Modifications or amendments to the Agreement and these General Terms and Conditions shall only be valid when expressly agreed upon in writing executed by duly authorised representatives of the parties.
 
30.	OFFICIAL VERSION	
These General Terms and Conditions and the Agreement shall be executed in the English language and the English language will be the only official language. Translations in any other language may be made for convenience purposes, but those translations shall in no event limit, alter, interpret, define or amend the contents of the English version of the General Terms and Conditions or the Agreement.
 
Page 15 of 15

ANNEX 1
To Aviation Fuel Supply Agreement dated January 1st, 2012 (Hereinafter referred as the “Agreement”)
DELIVERY LOCATIONS, VOLUMES, PRICES AND CONDITIONS
Buyer: CONCESIONARIA VUELA COMPAÑIA DE AVIACION S A P I DE CV
Seller: WORLD FUEL SERVICES, INC.
SCHEDULED LOCATIONS AND VOLUMES

AIRPORT	  	VOLUME
Gallons per year	 	  	PRICE
Basis	  	Differential
US Cents per
gallon	 	  	AGREEMENT
Initial Date	
					
Denver (DEN)	  	 	*****	  	  	GCPipeMidWkly	  	 	*****	  	  	November 01st, 2012	
Sacramento (SMF)	  	 	*****	  	  	LAOpisMidWkly	  	 	*****	  	  	November 01st, 2012	
Agreement Termination Date: October 31th, 2013.
Fuel is delivered by Seller Into Aircraft Wing.
Prices are subject to all taxes, duties and fees imposed by Government Authorities.
CREDIT TERMS AND CONDITIONS
According to credit line *****
Seller reserves the right to modify the credit terms based upon the financial condition of Buyer and/or a change in market conditions, so long as Seller provides Buyer with prior written notice of the modified credit terms. Buyer as well, reserves the right to request credit terms modifications due to changes in market or operations conditions.

Signed by

WORLD FUEL SERVICES, INC	 		 	CONCESIONARIA VUELA COMPAÑIA DE AVIACION S A P I DE CV	
			
/s/ Richard McMichael	 		 	/s/ Fernando Suárez Gerard	
Name:	 	Richard McMichael	 		 	Name:	 	Fernando Suárez Gerard	
	 	SVP Finance, Aviation.	 		 		 	Chief Financial Officer	
				
	 		 		 	/s/ Holger Blankenstein	
	 		 		 	Name:	 	Holger Blankenstein	
	 		 		 		 	Chief Commercial Officer	

ANNEX 1
To Aviation Fuel Supply Agreement dated January 1st, 2012 (Hereinafter referred as the “Agreement”)
DELIVERY LOCATIONS, VOLUMES, PRICES AND CONDITIONS
Buyer: CONCESIONARIA VUELA COMPAÑIA DE AVIACION S A P I DE CV
Seller: WORLD FUEL SERVICES, INC.
SCHEDULED LOCATIONS AND VOLUMES

AIRPORT	  	VOLUME
Gallons per year	 	  	PRICE
Basis	  	Differential
US Cents per
gallon	 	  	AGREEMENT
Initial Date	
Orlando (MCO)	  	 	*****	  	  	GCWtrMidWliy	  	 	*****	  	  	July 14th, 2012	
Agreement Termination Date: June 30th, 2013.
Fuel is delivered by Seller Into Aircraft Wing.
Prices are subject to all taxes, duties and fees imposed by Government Authorities.
CREDIT TERMS AND CONDITIONS
According to credit line *****
Seller reserves the right to modify the credit terms based upon the financial condition of Buyer and/or a change in market conditions, so long as Seller provides Buyer with prior written notice of the modified credit terms. Buyer as well, reserves the right to request credit terms modifications due to changes in market or operations conditions.

Signed by

WORLD FUEL SERVICES, INC	 		 	CONCESIONARIA VUELA COMPANIA DE AVIACION S A P I DE CV	
			
/s/ Richard McMichael	 		 	/s/ Fernando Suárez Gerard	
Name:	 	Richard McMichael	 		 	Name:	 	Fernando Suárez Gerard	
	 	SVP Finance, Aviation.	 		 		 	Chief Financial Officer	
				
	 		 		 	/s/ Holger Blankenstein	
	 		 		 	Name:	 	Holger Blankenstein	
	 		 		 		 	Chief Commercial Officer	

ANNEX 1
To Aviation Fuel Supply Agreement dated January 1st, 2012 (Hereinafter
referred as the “Agreement”)
DELIVERY LOCATIONS, VOLUMES, PRICES AND CONDITIONS
Buyer: CONCESIONARIA VUELA COMPAÑIA DE AVIACION S A P I DE CV
Seller: WORLD FUEL SERVICES, INC.
SCHEDULED LOCATIONS AND VOLUMES

AIRPORT	  	VOLUME
Gallons per year	 	  	PRICE
Basis	  	Differential
US Cents per
gallon	 	  	AGREEMENT
Initial Date	
					
Los Angeles (LAX)	  	 	*****	  	  	LAPipeMidWkly	  	 	*****	  	  	January 01st, 2013	
Oakland (OAK)	  	 	*****	  	  	LAXOpisMidWkly	  	 	*****	  	  	January 01st, 2013	
San Jose (SJC)	  	 	*****	  	  	LAPipeMidWkly	  	 	*****	  	  	January 01st, 2013	
Las Vegas (LAS)	  	 	*****	  	  	LAPipeMidWkly	  	 	*****	  	  	January 01st, 2013	
Fresno (FAT)	  	 	*****	  	  	LAPipeMidWkly	  	 	*****	  	  	January 01st, 2013	
San Diego (SAN)	  	 	*****	  	  	LAPipeMidWkly	  	 	*****	  	  	January 01st, 2013	
Agreement Termination Date: June 30th, 2013.
Fuel is delivered by Seller Into Aircraft Wing.
Prices are subject to all taxes, duties and fees imposed by Government Authorities.
CREDIT TERMS AND CONDITIONS
According to credit line *****
Seller reserves the right to modify the credit terms based upon the financial condition of Buyer and/or a change in market conditions, so long as Seller provides Buyer with prior written notice of the modified credit terms. Buyer as well, reserves the right to request credit terms modifications due to changes in market or operations conditions.

Signed by

WORLD FUEL SERVICES, INC	 		 	CONCESIONARIA VUELA COMPAÑIA DE AVIACION S A P I DE CV	
			
/s/ Richard McMichael	 		 	/s/ Fernando Suárez Gerard	
Name:	 	Richard McMichael	 		 	Name:	 	Fernando Suárez Gerard	
	 	SVP Finance, Aviation.	 		 		 	Chief Financial Officer	
				
	 		 		 	/s/ Holger Blankenstein	
	 		 		 	Name:	 	Holger Blankenstein	
	 		 		 		 	Chief Commercial Officer	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.36
AIRCRAFT LEASE AGREEMENT [4798]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4798
United States Registration Mark N505VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
CLAUSE 1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	 	Definitions	  	 	1	  	
1.2	 	Interpretation	  	 	13	  	
			
CLAUSE 2.	 	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	 	Lessee’s Representations and Warranties	  	 	14	  	
2.2	 	Lessor’s Representations and Warranties	  	 	17	  	
2.3	 	No Prejudice	  	 	19	  	
			
CLAUSE 3.	 	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	 	Lessor’s Conditions Precedent	  	 	19	  	
3.2	 	Waiver	  	 	22	  	
3.3	 	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	 	COMMENCEMENT	  	 	22	  	
			
4.1	 	Term of Leasing	  	 	22	  	
4.2	 	Delivery	  	 	23	  	
4.3	 	Licenses	  	 	23	  	
4.4	 	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	 	DISCLAIMERS	  	 	25	  	
			
5.1	 	General Disclaimers	  	 	25	  	
5.2	 	Deficiencies and Delays	  	 	26	  	
5.3	 	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	 	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	 	Rent	  	 	26	  	
6.2	 	Security	  	 	26	  	
6.3	 	Maintenance Payments	  	 	27	  	
6.4	 	Payment Obligations Unconditional	  	 	27	  	
6.5	 	Currency of Payments	  	 	28	  	
6.6	 	Currency Indemnity	  	 	28	  	
6.7	 	Authorizations for Payments	  	 	28	  	
6.8	 	Set-off	  	 	28	  	
6.9	 	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
			
CLAUSE 7.	 	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	 	GENERAL UNDERTAKINGS	  	 	29	  	
			
8.1	 	Duration	  	 	29	  	
8.2	 	Notice of Event of Default; Certificate	  	 	30	  	
8.3	 	Financial and Other Information	  	 	30	  	
8.4	 	Existence	  	 	32	  	
8.5	 	ERISA	  	 	32	  	
8.6	 	Lessee’s Jurisdiction	  	 	32	  	
8.7	 	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	 	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	 	Registration, Title and Nameplates	  	 	34	  	
9.2	 	Liens	  	 	36	  	
9.3	 	Possession and Subleases	  	 	37	  	
9.4	 	Information and Records	  	 	38	  	
9.5	 	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	 	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	 	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	 	General	  	 	42	  	
10.2	 	Specific Requirements	  	 	42	  	
10.3	 	Substitution of Parts; Ownership	  	 	43	  	
10.4	 	Pooling of Parts	  	 	45	  	
10.5	 	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	 	ENGINES	  	 	46	  	
			
11.1	 	General Principles	  	 	46	  	
11.2	 	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	 	TITLE	  	 	48	  	
			
CLAUSE 13.	 	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	 	INSURANCES	  	 	48	  	
			
14.1	 	Obligation to Insure	  	 	48	  	
14.2	 	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	 	Terms Specific to Hull Insurance	  	 	49	  	
14.4	 	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	 	Provisions Relating to all Insurance	  	 	50	  	
14.6	 	Information	  	 	51	  	
14.7	 	Additional Insurance; No Lien	  	 	52	  	
14.8	 	Failure to Insure	  	 	53	  	
14.9	 	Settlement of Claims	  	 	53	  	
 
(ii)

							
14.10	 	Assignment	  	 	53	  	
14.11	 	Post Termination	  	 	54	  	
			
CLAUSE 15.	 	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	 	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	 	Total Loss of Engine(s)	  	 	54	  	
15.3	 	Other Loss or Damage	  	 	56	  	
15.4	 	Requisition	  	 	56	  	
			
CLAUSE 16.	 	DEFAULT	  	 	56	  	
			
16.1	 	Events of Default	  	 	56	  	
16.2	 	Rights and Remedies	  	 	59	  	
16.3	 	Power of Attorney	  	 	62	  	
16.4	 	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	 	REDELIVERY	  	 	63	  	
			
17.1	 	Redelivery	  	 	63	  	
17.2	 	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	 	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	 	Compliance after Term	  	 	65	  	
17.5	 	Deregistration and Export	  	 	66	  	
17.6	 	Ferry Flight	  	 	66	  	
17.7	 	Storage	  	 	66	  	
			
CLAUSE 18.	 	INDEMNITIES.	  	 	67	  	
			
18.1	 	General Indemnities	  	 	67	  	
18.2	 	General Tax Indemnity	  	 	69	  	
18.3	 	Notice and Contest Rights	  	 	71	  	
18.4	 	Mitigation	  	 	73	  	
18.5	 	Payments on After-Tax Basis	  	 	73	  	
18.6	 	No Deductions or Withholdings	  	 	73	  	
18.7	 	Tax Benefit	  	 	74	  	
18.8	 	Reports	  	 	74	  	
18.9	 	Continuation of Indemnities	  	 	75	  	
18.10	 	Forms	  	 	75	  	
18.11	 	Non-Parties	  	 	75	  	
			
CLAUSE 19.	 	FURTHER PROVISIONS	  	 	75	  	
			
19.1	 	Nature of Lessee’s Obligations	  	 	75	  	
19.2	 	Benefit of Agreement	  	 	76	  	
19.3	 	Further Assurances	  	 	77	  	
19.4	 	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	 	Delegation	  	 	78	  	
19.6	 	Evidence of Indebtedness	  	 	78	  	
19.7	 	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	 	Notices	  	 	78	  	
19.9	 	Invalidity of any Provision	  	 	79	  	
19.10	 	Lessor’s Right to Remedy	  	 	79	  	
19.11	 	Entire Agreement	  	 	79	  	
19.12	 	Governing Law	  	 	79	  	
19.13	 	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	 	Waiver of Jury Trial	  	 	81	  	
19.15	 	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	 	Confidentiality	  	 	81	  	

SCHEDULE 1	 	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	 	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	 	LEASE SUPPLEMENT	
		
SCHEDULE 3	 	CERTIFICATE	
		
SCHEDULE 4	 	REDELIVERY CONDITION	
		
SCHEDULE 5	 	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	 	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	 	TECHNICAL ACCEPTANCE CERTIFICATE	
		
SCHEDULE 8	 	PART A LESSEE FURNISHED EQUIPMENT	
		
	 	PART B IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	 	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	 	PERMITTED SUBLESSEES	
		
SCHEDULE 11	 	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	 	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4798] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4798] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.
 
-1-

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4798, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
-3-

“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
-4-

“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in July, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4798 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to
 
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have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the
 
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Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE
 
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LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until
 
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expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [            ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set
 
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forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and
 
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model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications .
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
 
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(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights
 
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whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the
 
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U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice),
 
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Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding
 
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60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this
 
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Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair,
 
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replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
			
Telephone:	 	(801) 246-5630	
Attention:	 	Corporate Trust Services	
 
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with a copy to:
JSA Aircraft 4798, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
			
Telephone:	 	(415) 821-8300	
Attention:	 	General Counsel	
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
			
Telephone:	 	(52 55) 5261-6400	
Attention:	 	General Counsel	
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
 
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The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any
 
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claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are
 
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within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4798] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4798

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4798
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: July, 2011
Seating Configuration: *****

Weights & Capacity	  	Tonnes	
		
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
Schedule 1A-2

 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of                  , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N             , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers              and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $        .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
		
By:	 	 	
	 	Name:	 		
	 	Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,                      of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [            ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of              20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                      of Lessee, DO HEREBY CERTIFY that              is a duly elected and qualified                      of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of             , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe:	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines:	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		  	Report Data From	  		
				
Aircraft S/N	 		  	Report Data To	  		
				
Type	 		  		  		
				
Total Flight Hours	 		  	FH Utilization for Period	  		
				
Total Cycles	 		  	FC Utilization for Period	  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
TSO	  		  		  		  		  		  		
CSO	  		  		  		  		  		  		
DSO	  		  		  		  		  		  		
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	 	 	 	NEXT CHECK DUE	
CHECK TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	 	 	 	CHECK TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		 		 	A-Check	  		  		  		  		
C-Check	  		  		  		  		 		 	C-Check	  		  		  		  		
D-Check	  		  		  		  		 		 	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	

(Lessee)	 		
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of             , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on             , 20     being the Delivery Date at                                         :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$        ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and             ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:             :	

Total Flight Hours Since New	    	 	  		
Total Cycles Since New	    	 	  		
Flight Hours Since Last C-Check:	    	N/A	  		
Calendar Months Since Last D-Check	    	N/A	  		
Flight Hours Since Last D-Check	    	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	

Position	    	1	    	2	  		
Serial No:	    	[              ]	    	[              ]	  		
				
Total Flight Hours:	    	 	    	 	  		
Total Cycles:	    	 	    	 	  		
				
Flight Hours since last Engine Performance Restoration:	    	N/A	    	N/A	  		
				
Cycles since last Engine Performance Restoration:	    	N/A	    	N/A	  		
				
Cycles remaining to next expected Engine Performance Restoration	    	 	    	 	  		
 
 	(c)	APU Model:	

Serial No:	    	 	  		
			
Total [Flight]/[APU] Hours:	    	 	  		
			
Total Cycles:	    	 	  		
			
[APU]/[Flight] Hours since the APU Heavy Repair:	    	N/A	  		
 
 	(d)	Landing Gear:	

Position	    	LH Main	    	Nose	    	RH Main	  		
					
Model:	    	 	    	 	    	 	  		
					
Serial No:	    	 	    	 	    	 	  		
					
Total Flight Hours:	    	 	    	 	    	 	  		
					
Total Cycles:	    	 	    	 	    	 	  		
					
Flight Hours since last Landing Gear Overhaul:	    	N/A	    	N/A	    	N/A	  		
					
Cycles since last Landing Gear Overhaul:	    	N/A	    	N/A	    	N/A	  		
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
July 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN 4798	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
 
Schedule 8-1

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
 
Schedule 8-2

CONFIDENTIAL TREATMENT REQUESTED

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ATA 25	  	Cabin & cockpit	  		  		
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Schedule 8-3

CONFIDENTIAL TREATMENT REQUESTED

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ATA 29	  	Hydraulic Power	  		  		
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ATA 31	  	Indicating/Recording	  		  		
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ATA 32	  	Landing gear	  		  		
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Schedule 8-4

CONFIDENTIAL TREATMENT REQUESTED

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ATA 33	  	Lights	  		  		
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ATA 34	  	Navigation	  		  		
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ATA 35	  	Oxygen	  		  		
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ATA 38	  	Water/Waste	  		  		
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ATA 46	  	ATSU	  		  		
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ATA 47	  	Inerting Gas System	  		  		
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ATA 49	  	APU	  		  		
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ATA 51	  	Structure	  		  		
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ATA 52	  	Doors	  		  		
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ATA 55	  	Stabilizers	  		  		
 
Schedule 8-5

CONFIDENTIAL TREATMENT REQUESTED

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ATA 56	  	Windows	  		  		
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ATA 57	  	Wings	  		  		
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ATA 71	  	Power Plant - General	  		  		
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ATA 72	  	Engines	  		  		
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SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
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Schedule 8-6

CONFIDENTIAL TREATMENT REQUESTED

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BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery
Date	  	Delivery
Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
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Schedule 8-7

CONFIDENTIAL TREATMENT REQUESTED
 
PART B
IN FLIGHT ENTERTAINMENT

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
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Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]
 
The undersigned, [                                        ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated                  , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                                        ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [                    ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] and JSA AIRCRAFT [                    ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [            ] y JSA AIRCRAFT [                    ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
Schedule 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
		
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  		
 
Schedule 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
Schedule 11-3

CONFIDENTIAL TREATMENT REQUESTED
ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
2. Maintenance Payments .
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
 
ANNEX A-1

CONFIDENTIAL TREATMENT REQUESTED
 
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
 
ANNEX A-2

CONFIDENTIAL TREATMENT REQUESTED
 
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
 
ANNEX A-3

CONFIDENTIAL TREATMENT REQUESTED
 
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
ANNEX A-4

CONFIDENTIAL TREATMENT REQUESTED
 
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.37
AIRCRAFT LEASE AGREEMENT [5207]
Dated as of June 26, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as owner trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5207
United States Registration Mark N510VL
Two (2) IAE International Aero V2527E-A5 Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	 	 	  	Page	 	
CLAUSE 1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	 	Definitions	  	 	1	  	
1.2	 	Interpretation	  	 	14	  	
			
CLAUSE 2.	 	REPRESENTATIONS AND WARRANTIES	  	 	15	  	
			
2.1	 	Lessee’s Representations and Warranties	  	 	15	  	
2.2	 	Lessor’s Representations and Warranties	  	 	18	  	
2.3	 	No Prejudice	  	 	20	  	
			
CLAUSE 3.	 	CONDITIONS PRECEDENT	  	 	20	  	
			
3.1	 	Lessor’s Conditions Precedent	  	 	20	  	
3.2	 	Waiver	  	 	23	  	
3.3	 	Lessee’s Conditions Precedent	  	 	24	  	
			
CLAUSE 4.	 	COMMENCEMENT	  	 	24	  	
			
4.1	 	Term of Leasing	  	 	24	  	
4.2	 	Delivery	  	 	24	  	
4.3	 	Licenses	  	 	25	  	
4.4	 	Quiet Enjoyment; Lessor Party Covenants	  	 	25	  	
			
CLAUSE 5.	 	DISCLAIMERS	  	 	26	  	
			
5.1	 	General Disclaimers	  	 	26	  	
5.2	 	Deficiencies and Delays	  	 	27	  	
5.3	 	Repairs and Replacement	  	 	27	  	
			
CLAUSE 6.	 	RENT AND OTHER PAYMENTS	  	 	27	  	
			
6.1	 	Rent	  	 	27	  	
6.2	 	Security	  	 	28	  	
6.3	 	Maintenance Payments	  	 	28	  	
6.4	 	Payment Obligations Unconditional	  	 	28	  	
6.5	 	Currency of Payments	  	 	29	  	
6.6	 	Currency Indemnity	  	 	29	  	
6.7	 	Authorizations for Payments	  	 	30	  	
6.8	 	Set-off	  	 	30	  	
6.9	 	Lessor’s Account; Receipt of Payment	  	 	30	  	
 
(i)

							
 	 	 	  	Page	 	
CLAUSE 7.	 	FEES AND EXPENSES	  	 	30	  	
			
CLAUSE 8.	 	GENERAL UNDERTAKINGS	  	 	31	  	
			
8.1	 	Duration	  	 	31	  	
8.2	 	Notice of Event of Default; Certificate	  	 	31	  	
8.3	 	Financial and Other Information	  	 	32	  	
8.4	 	Existence	  	 	33	  	
8.5	 	ERISA	  	 	34	  	
8.6	 	Lessee’s Jurisdiction	  	 	34	  	
8.7	 	Cape Town Convention	  	 	34	  	
			
CLAUSE 9.	 	OPERATIONAL UNDERTAKINGS	  	 	35	  	
			
9.1	 	Registration, Title and Nameplates	  	 	35	  	
9.2	 	Liens	  	 	38	  	
9.3	 	Possession and Subleases	  	 	38	  	
9.4	 	Information and Records	  	 	40	  	
9.5	 	Lawful and Safe Operation; Costs of Operation	  	 	41	  	
9.6	 	Right of Inspection	  	 	43	  	
			
CLAUSE 10.	 	MAINTENANCE AND REPAIR	  	 	43	  	
			
10.1	 	General	  	 	43	  	
10.2	 	Specific Requirements	  	 	44	  	
10.3	 	Substitution of Parts; Ownership	  	 	45	  	
10.4	 	Pooling of Parts	  	 	46	  	
10.5	 	Permitted Modifications	  	 	47	  	
			
CLAUSE 11.	 	ENGINES	  	 	48	  	
			
11.1	 	General Principles	  	 	48	  	
11.2	 	Removal of Engines	  	 	49	  	
			
CLAUSE 12.	 	TITLE	  	 	50	  	
			
CLAUSE 13.	 	MANUFACTURER’S WARRANTIES	  	 	50	  	
			
CLAUSE 14.	 	INSURANCES	  	 	50	  	
			
14.1	 	Obligation to Insure	  	 	50	  	
14.2	 	Insurance with Respect to the Aircraft	  	 	51	  	
14.3	 	Terms Specific to Hull Insurance	  	 	51	  	
14.4	 	Liability Insurance with Respect to the Aircraft	  	 	52	  	
14.5	 	Provisions Relating to all Insurance	  	 	52	  	
14.6	 	Information	  	 	53	  	
14.7	 	Additional Insurance; No Lien	  	 	54	  	
14.8	 	Failure to Insure	  	 	55	  	
14.9	 	Settlement of Claims	  	 	55	  	
 
(ii)

							
 	 	 	  	Page	 	
14.10	 	Assignment	  	 	55	  	
14.11	 	Post Termination	  	 	56	  	
			
CLAUSE 15.	 	LOSS, DAMAGE AND REQUISITION	  	 	56	  	
			
15.1  	 	Total Loss of Aircraft or Airframe	  	 	56	  	
15.2  	 	Total Loss of Engine(s)	  	 	56	  	
15.3  	 	Other Loss or Damage	  	 	58	  	
15.4  	 	Requisition	  	 	58	  	
			
CLAUSE 16.	 	DEFAULT	  	 	58	  	
			
16.1  	 	Events of Default	  	 	58	  	
16.2  	 	Rights and Remedies	  	 	61	  	
16.3  	 	Power of Attorney	  	 	64	  	
16.4  	 	Mitigation Credit	  	 	65	  	
			
CLAUSE 17.	 	REDELIVERY	  	 	65	  	
			
17.1  	 	Redelivery	  	 	65	  	
17.2  	 	Condition of Aircraft and the Aircraft Documents	  	 	65	  	
17.3  	 	Inspection; Corrections; Additional Work	  	 	66	  	
17.4  	 	Compliance after Term	  	 	68	  	
17.5  	 	Deregistration and Export	  	 	68	  	
17.6  	 	Ferry Flight	  	 	68	  	
17.7  	 	Storage	  	 	69	  	
			
CLAUSE 18.	 	INDEMNITIES	  	 	69	  	
			
18.1  	 	General Indemnities	  	 	69	  	
18.2  	 	General Tax Indemnity	  	 	71	  	
18.3  	 	Notice and Contest Rights	  	 	74	  	
18.4  	 	Mitigation	  	 	75	  	
18.5  	 	Payments on After-Tax Basis	  	 	75	  	
18.6  	 	No Deductions or Withholdings	  	 	75	  	
18.7  	 	Tax Benefit	  	 	76	  	
18.8  	 	Reports	  	 	76	  	
18.9  	 	Continuation of Indemnities	  	 	77	  	
18.10	 	Forms	  	 	77	  	
18.11	 	Non-Parties	  	 	77	  	
			
CLAUSE 19.	 	FURTHER PROVISIONS	  	 	78	  	
			
19.1  	 	Nature of Lessee’s Obligations	  	 	78	  	
19.2  	 	Benefit of Agreement	  	 	78	  	
19.3  	 	Further Assurances	  	 	79	  	
19.4  	 	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	79	  	
19.5  	 	Delegation	  	 	80	  	
19.6  	 	Evidence of Indebtedness	  	 	80	  	
19.7  	 	Applications of Moneys	  	 	80	  	
 
(iii)

							
 	 	 	  	Page	 	
19.8  	 	Notices	  	 	80	  	
19.9  	 	Invalidity of any Provision	  	 	81	  	
19.10	 	Lessor’s Right to Remedy	  	 	81	  	
19.11	 	Entire Agreement	  	 	81	  	
19.12	 	Governing Law	  	 	82	  	
19.13	 	Jurisdiction; Service of Process; Inconvenient Forum	  	 	82	  	
19.14	 	Waiver of Jury Trial	  	 	83	  	
19.15	 	Lease for U.S. Federal Income Tax Law Purposes	  	 	84	  	
19.16	 	Confidentiality	  	 	84	  	

SCHEDULE 1	 	AIRCRAFT DESCRIPTION	  		
			
SCHEDULE 1A	 	AIRCRAFT DOCUMENTS	  		
			
SCHEDULE 2	 	LEASE SUPPLEMENT	  		
			
SCHEDULE 3	 	CERTIFICATE	  		
			
SCHEDULE 4	 	REDELIVERY CONDITION	  		
			
SCHEDULE 5	 	MONTHLY MAINTENANCE STATUS REPORT	  		
			
SCHEDULE 6	 	FORM OF QUIET ENJOYMENT LETTER	  		
			
SCHEDULE 7	 	TECHNICAL ACCEPTANCE CERTIFICATE	  		
			
SCHEDULE 8	 	PART A             LESSEE FURNISHED EQUIPMENT	  		
			
	 	PART B             IN FLIGHT ENTERTAINMENT	  		
			
SCHEDULE 9	 	LESSEE’S CONDITIONS PRECEDENT	  		
			
SCHEDULE 10	 	[RESERVED]	  		
			
SCHEDULE 11	 	IRREVOCABLE POWER OF ATTORNEY	  		
			
SCHEDULE 12	 	FORM OF EUROCONTROL LETTER	  		
			
ANNEX A	 	CERTAIN DEFINITIONS AND PAYMENTS	  		
 
(iv)

AIRCRAFT LEASE AGREEMENT [5207 ] dated as of June 26, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as owner trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Antonio Dovali Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, Delegación Alvaro Obregon, CP 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5207] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Owner pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft Ireland 5207 Limited, a private limited liability company incorporated in Ireland, having its registered address at 70 Sir John Rogerson’s Quay, Dublin, Ireland, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Owner at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Coface ” means Compagnie Francaise d’Assurance pour le Commerce Extérieur.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
 
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“ Damage Notification Threshold ” has the meaning provided in Annex A.
“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Owner Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ ECA Finance Party ” means (i) Crédit Agricole CIB (“CA”), in its capacity as lender, national agent, facility agent and security trustee under the ECA Loan Agreement dated on or about June 27, 2012 relating to the Aircraft, and the transferees, successors and assigns of CA in any such capacity and (ii) ECGD, Coface and Euler Hermes.
“ ECGD ” means The Secretary of State of Her Britannic Majesty’s Government acting by the Export Credits Guarantee Department.
 
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“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Owner and leased to Lessor under the Head Lease and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Owner pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Owner pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines A.G.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ EU ETS ” means both (a) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC and (b) Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, together with any related, connected or successive law, statute, decree, constitution, regulation, authorization, judgment, injunction or other directive of any Government Entity of the European Union.
“ Euler Hermes ” means Euler Hermes Deutschland A.G.
“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation.
 
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“Eurocontrol Letter ” means a letter in the form set out in Schedule 12 hereto.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, Head Leases, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Owner or Lessor or any third party by way of security for, or as a guarantee of the performance by, Owner, Lessor or any Affiliate of Owner or Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
 
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“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ Head Lease ” means the lease between Lessor, as lessee, and Owner, as lessor, with respect to the Aircraft.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: each Lessor Party, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Owner in accordance with this Agreement.
“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
 
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“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor, Owner or an Affiliate of Lessor or Owner in relation to Lessor’s, Owner’s or such Affiliate’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders, and any ECA Finance Party.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s or Owner’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Party ” means Owner, Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
 
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“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s or Owner’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document, and which includes requirements for long-term storage during extended periods of non-use of the Aircraft.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
 
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“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Owner ” means Jackson Square A320 Leasing (Ireland) Limited, a private limited liability company incorporated in Ireland.
“ Owner Certificate of Acceptance ” means the certificate of acceptance from Owner confirming acceptance of the Aircraft from the Manufacturer.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in-flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Owner pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien created by or pursuant to or permitted by the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any person holding all relevant certificates and consents for the operation of the Aircraft whose habitual base of operation is not located in a Prohibited Country and which is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and
 
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substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part which has not been manufactured by or with the written permission of the original manufacturer of that Part.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Prohibited Country ” means any state, country or jurisdiction (a) which is subject to any sanction or embargo by the United Nations, the European Union (or the United Kingdom, France or Germany), the United States of America, the State of Registration or the Habitual Base or (b) with which any of France, Germany or the United Kingdom does not maintain diplomatic relations.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Owner.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about June 27, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means each Lessor Party, and each Lender, and each of their respective Affiliates, officers, directors, agents and employees.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor or the Security Trustee as loss payee under Lessee’s policies of insurance/reinsurance receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5207) dated as of June 25, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the
 
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Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor or Owner in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor and Owner in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor or Owner to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever rights in the Aircraft as were conveyed to it by Owner under the Head Lease and shall have all requisite authority to lease the Aircraft to Lessee hereunder;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, and JSA in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of DeBee Gilchrist, FAA counsel, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
 
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(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transacting user entity with the International Registry and has granted authorization to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a priority search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY JACKSON SQUARE A320 LEASING (IRELAND) LIMITED, IS MORTGAGED TO CRÉDIT AGRICOLE CIB AS SECURITY TRUSTEE, IS LEASED TO WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE) AND IS SUB-LEASED TO CONCESIONARIA VUELA COMPAŇIA DE AVIACIÓN, S.A.P.I. DE C.V. - VOLARIS”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney in favor of Lessor and the Security Trustee, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
 
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3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that
 
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Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to or at the direction of Lessor or, as applicable, the Security Trustee, of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the
 
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Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS
 
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HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights,
 
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powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the
 
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laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of any Lessor Party or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
 
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6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe
 
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and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true
 
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and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Owner and leased to Lessor in accordance with the terms of the Head Lease, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or Owner, acknowledge before any judicial or administrative authority the right of ownership of Owner and the
 
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leasehold interest of Lessor in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or Owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
 
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8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver the IDERA to the Lessor, and the Lessor shall promptly secure its recordation by the relevant Aviation Authority should the Aircraft become registered in the name of the Lessee;	
 
 	(c)	If the IDERA has been filed with the relevant Aviation Authority, the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5207, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are International Aero Engines V2500- A5 engines as more particularly described in the Technical Acceptance Certificate;	
 
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 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft with the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Owner as owner and the Security Trustee as trustee on behalf of the Lenders as creditors in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition to the Replacement Engine being vested in the Owner, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each
 
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other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Owner or Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Owner or Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor, Owner and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(r) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
 
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(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor, Owner and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Owner and the Aircraft is leased to Lessee by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Owner and Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
 
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(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to a Permitted Sublessee that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
 
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(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14;
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Owner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
 
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Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
 
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(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Owner, Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all (i) laws, statutes, decrees, regulations, authorizations, judgments, injunctions and other directives of any Government Entity (including, without limitation, when and if the Aircraft is operated to, from or within European airspace, EU ETS legislation, including any international treaty or similar instrument or agreement relating thereto which is applicable to Volaris), (ii) any treaty, pact, compact or other binding agreement to which any Government Entity is a signatory and (iii) any judicial or administrative interpretation with binding characteristics or application of those described in (i) and (ii), is a signatory or party which in each case is then applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof or the failure to comply with which would result in any criminal liability on the part of any Indemnitee and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
 
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(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions in each case relevant to the export, location, use, leasing or financing of the Aircraft or matters arising therefrom, and the effect of which prohibition order (or similar order or directive), sanction or restriction is to prohibit flights to and from such jurisdiction or to prevent the Aircraft from remaining at such jurisdiction; in each case, in violation of such prohibition order (or similar order or directive), sanction or restriction except as may be necessary to safeguard the Aircraft, passengers or crew in the case of urgent circumstances resulting from atmospheric or climatic conditions, technical failure or other reasonable safety concerns (provided that in such case, Lessee shall take all measures to remove the Aircraft from such location as soon as such circumstances or conditions shall cease) whether made by or under:
(i) any Government Entity of the State of Registration, the Habitual Base, France, Germany, the United Kingdom or the United States of America; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over any Lessor Party, or any Lender, of which Lessee has notice, or over the Aircraft;
(iv) the United Nations Security Council or the European Union;
(g) obtain and maintain in full force, and operate the Aircraft in accordance with, all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses
 
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of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and be continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; provided that, unless an Event of Default has occurred and is continuing, and without in any way affecting the right of the ECA Finance Parties to perform their own annual inspection, the Lessor agrees that, should the ECA Finance Parties elect to perform an inspection during any calendar year, Lessor shall coordinate with the ECA Finance Parties so as to participate in such inspection or shall rely on the inspection report generated by the ECA Finance Parties for such calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall include a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor, any Lender or any ECA Finance Party shall have any obligation to make any inspection.
9.7 EU Operations . In the event the Aircraft is at any time to be operated in any jurisdiction in which Eurocontrol has jurisdiction over airport operations, Lessee shall, prior to commencing such operations, provide Lessor and the Lenders with a Eurocontrol Letter.
CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
 
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(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory requirements, all mandatory requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
 
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(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. For so long as the financing with respect to the Aircraft provided by the ECA Finance Parties remains outstanding, and unless otherwise permitted under subsequent Financing
 
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Documents, PMA Parts may not be installed on the Airframe; provided, that Lessor shall promptly notify Lessee should Lessor become aware of a change in ECA policy regarding the use of PMA Parts, and in such event Lessor and Lessee will take appropriate action to permit Lessee to make use of cosmetic, non-structural and non-critical interior cabin PMA Parts to the extent permitted by the new ECA policy.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become the property of Owner subject to the Head Lease and this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Owner, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Owner, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Owner (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Owner) remain with Owner free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Owner.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
 
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(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Owner until the Part which replaced it becomes the property of Owner or is replaced by a Part which thereupon becomes the property of Owner, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Owner remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Owner, or will, upon fitting, become the property of Owner.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Owner free of all Liens (other than Permitted Liens); provided
 
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that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor or Owner, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Owner; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Owner at all times and the Removed Engine shall remain subject to this Agreement and the Security
 
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Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor, Owner or any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Owner.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Owner, Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Owner, Lessor and any Lender, that it will respect the interests of Owner, Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Owner. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the
 
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airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Owner, Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Owner subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Owner or Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Owner or Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have and to cause Owner to enforce such rights as it may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Owner or Lessor, as the case may be, including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself, Owner and/or Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such
 
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insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include each Lessor Party and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that no Lessor Party nor any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against any Lessor Party and any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days’ notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to any Lessor Party or any Lender, to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Owner, Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, except as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Owner transfers the Aircraft or Lessor transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Owner or Lessor, as the case may be, may have from time to time under such insurances. In addition, if Owner transfers title to the Aircraft or Lessor transfers such rights in this Agreement and thereafter Lessor ceases to be lessor of the Aircraft or Owner ceases to be the owner of the Aircraft(any such person
 
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effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay or cause to be paid the Agreed Value to the Security Trustee for the benefit of the “Contract Parties” under Lessee’s policy of reinsurance, within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full of the Agreed Value as set forth above and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Owner acquires (at no expense to Lessor)
 
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title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Owner and Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition of title by Owner, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Owner and become subject to this Agreement, the Head Lease and any Security Documents executed by Owner or Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Owner with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Owner, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Owner’s, Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Owner and Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Owner and Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Owner all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Owner, Lessor and the Lenders, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will or will cause Owner to, transfer to or at the direction of Lessee without recourse or warranty (except
 
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as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Owner’s or Lessor’s, as the case may be, right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
 
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(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Owner or Lessor in respect of the Aircraft hereunder or under the Head Lease, as applicable, is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
 
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(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor or Owner sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor or, without duplication of such costs and damages, any Lessor Party as a result of an Event of Default, including, but not limited
 
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to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to the residual interest of Lessor or, without duplication of such loss, cost, expense, liability or damage, any Lessor Party in the Aircraft, sustained by such Lessor Party due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
 
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(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to
 
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repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”). Lessee’s redelivery of the Aircraft to Lessor in accordance with the terms of this Agreement will be evidenced by execution and delivery by Lessor and Lessee of a redelivery acceptance certificate in form and substance satisfactory to Lessor and Lessee.
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
 
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(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
 
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(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
 
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17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the
 
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Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
 
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(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or (in the case of any Indemnitee other than an ECA Finance Party) recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than (i) any Claim made against an ECA Finance Party, which Lessee may defend or compromise only upon receipt of the prior written consent of such ECA Finance Party and (ii) with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and
 
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expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax
 
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indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
 
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(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement; provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
 
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18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent
 
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thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee; provided that in no event will Lessee control any contest as it relates to an ECA Finance Party without such ECA Finance Party’s prior written consent. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
 
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18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
 
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18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
 
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CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Each of Lessor, Owner and Owner Participant may at its own expense assign or transfer its interest in the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document, in each case, to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender or head lessor as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents. Lessor shall procure that each of Owner and Owner Participant shall agree, in writing, in favor of Lessee, to be bound by the provisions of this Clause 19.2
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry
 
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that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Owner, Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in
 
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writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
 
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(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft Ireland [5207] Limited c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Antonio Dovali Jaime No. 70
Torre B, Piso 13
Col. Zedec Santa Fe
Delegación Alvaro Obregon
CP 01210 México, D.F.
México
Telephone: (52 55) 1105 2300
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
 
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19.12 Governing Law . (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
(b) NOTWITHSTANDING AND WITHOUT PREJUDICE TO SECTION 19.12(a), IN CASE ANY LEGAL ACTION, SUIT OR PROCEEDING IS BROUGHT IN ANY COURT OF COMPETENT JURSIDICTION IN THE UNITED MEXICAN STATES OR ANY POLITICAL SUBDIVISION THEREOF TO RECOVER THE AIRCRAFT OR ANY PART THEREOF (OR ANY LEGAL ACTION, SUIT OR PROCEEDING RELATED THERETO TO RECOVER ASSETS OR THAT CAN RESULT IN THE ATTCHMENT OF ASSETS IS BROUGHT IN ANY OF THE AFORESAID COURTS), THE PARTIES HERETO HEREBY AGREE, PURSUANT TO ARTICLE VIII (2) OF THE PROTOCOL TO THE CONVENTION ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT, THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, EXCEPT TO THE EXTENT THAT THE PARTY BRINGING ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING ELECTS AT THE TIME OF THE COMMENCEMENT THEREOF THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, IN WHICH CASE AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH RIGHTS AND/OR OBLIGATIONS, AS THE CASE MAY BE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement or any of the Operative Documents (“Proceedings”) may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), and in the case of Proceedings brought to recover the Aircraft, (or Proceedings related thereto to recover assets or that could result in the attachment of assets), in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the
 
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assets to be recovered or attached) may be located. By execution and delivery of this Agreement, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such Proceedings, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby and hereby irrevocably waives any right to resort to any other jurisdiction to which it may be entitled by virtue of its present or future domicile or otherwise.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring Proceedings or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Proceeding arising out of or relating to this Agreement or any of the other Operative Documents brought in the State of New York and the Supreme Court of the State of New York (and all related appellate courts) and, in the case of Proceedings brought to recover the Aircraft (or Proceedings related thereto to recover assets or that could result in the attachment of assets) in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located, and hereby further irrevocably waives any claim that any Proceedings in any of the aforesaid courts has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any Proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such Proceedings are brought in an inconvenient forum, that the venue of such Proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all
 
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other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal
 
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Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5207] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Title:	 	Financial and Fleet Planning Director	

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name:	 	David Wall	
Title:	 	Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn 5207

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5207
Engine Manufacturer and Model: IAE International Aero Engines A.G. V2500-A5
Engine Serial Numbers: V16294 and V16300
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: P-5119.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: 12B12182 (Nose); 12MDG2639 (LH Gear); 12MDG2670 (RH Gear)
Date of Manufacture: June, 2012
Seating Configuration: *****

Weights & Capacity	  	Tonnes	 	
Maximum Take Off Weight	  	 	77.0	  	
Maximum Landing Weight	  	 	66.0	  	
Maximum Zero Fuel Weight	  	 	62.5	  	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ 5207 ], dated June     , 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ 5207 ] dated as of June 26, 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N510VL, Manufacturer’s Serial No.5207; and
Engines: Two IAE International Aero Engines A.G. V2527E-A5 engines installed thereon bearing Engine Manufacturer’s Serial Numbers V16294 and V16300 (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., Lessee	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned, an officer of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”), a sociedad anónima promotora de inversión de capital variable organized and existing under the laws of Mexico, DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as the same may be supplemented, amended or modified from time to time, the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement (5207) and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. Attached hereto as Exhibit A is a copy of the constitutional documents and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
3. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which resolution also includes the power of attorney and which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
4. Each person whose name, title and signature appears in the attached Exhibit C hereto have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions set opposite their names and the signatures set opposite their names are their genuine signatures.
5. The representations and warranties of Lessee under Section 2.1 of the Lease and each of the other Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
7. No Event of Default or default by Lessee under the Lease or any other Lessee’s Document have occurred and is continuing as of this date or would arise by reason of the occurrence of the transactions contemplated in the Lessee’s Documents.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this     day of         20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                     of Lessee, DO HEREBY CERTIFY that                     is a duly elected and qualified                     of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this     day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg
 	  	 	  		  	Report Data From	  	 	
Aircraft S/N
 	  	 	  		  	Report Data To	  	 	
Type

Total Flight Hours
 	  	 	  		  	FH Utilization for Period	  	 	
	  		  		  		  		
Total Cycles
 	  	 	  		  	FC Utilization for Period	  	 	
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter
Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	 	 	 	NEXT CHECK DUE	
CHECK
TYPE	 	CHECK #	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	 	 	 	CHECK
TYPE	 	CHECK #	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	
A-Check	 	 	 	 	 	 	 	 	 		 	A-Check	 	 	 	 	 	 	 	 	
C-Check	 	 	 	 	 	 	 	 	 		 	C-Check	 	 	 	 	 	 	 	 	
D-Check	 	 	 	 	 	 	 	 	 		 	D-Check	 	 	 	 	 	 	 	 	
TECHNICAL ACTIVITY DURING PERIOD
 
 	1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

 	2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

    	
    	
DEFERRAL LIST
 
 	3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
 	4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	 	  	 	
AD STATUS REPORT
 
 	5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

 
(Lessee)	
Title:	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Lessor Party][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number 5207 (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Lessor Party][Security Trustee]

By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [5207] dated as of June 26, 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. relating to Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at      hours on             , 20     being the Delivery Date at                     :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$            ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are V16294 and V16300;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No: 5207:	

	 	Total Flight Hours Since New	  		  		
	 	Total Cycles Since New	  		  		
	 	Flight Hours Since Last	  		  		
	 	C-Check:	  	N/A	  		
	 	Calendar Months Since Last	  		  		
	 	D-Check	  	N/A	  		
	 	Flight Hours Since Last	  		  		
	 	D-Check	  	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5:	

	 	Position	  	1	  	2	  		  		
	 	Serial No:	  	V16294	  	V16300	  		  		
						
	 	Total Flight Hours:	  		  		  		  		
	 	Total Cycles:	  		  		  		  		
						
	 	Flight Hours since last	  		  		  		  		
	 	Engine Performance Restoration:	  	N/A	  	N/A	  		
						
	 	Cycles since last	  		  		  		  		
	 	Engine Performance Restoration:	  	N/A	  	N/A	  		
					
	 	Cycles remaining to next expected Engine Performance Restoration	  		  		  		
 
 	(c)	APU Model: Honeywell P/N 3800708-1	

	 	Serial No:                     P-5119	  		  		  		
					
	 	Total [Flight]/[APU] Hours:	  		  		  		
					
	 	Total Cycles:	  		  		  		
					
	 	[APU]/[Flight] Hours since	  		  		  		
	 	the APU Heavy Repair:	  		  	N/A	  		
 
 	(d)	Landing Gear:	

	  	Position	  	LH Main	  	Nose	  	RH Main	  		
			
	  	Model:	  	Messier Dowty Messier Dowty Messier DowtySerial No:	
	  	12MDG2639	  	12B12181	  	12MDG2670	  		  		
						
	  	Total Flight	  		  		  		  		
						
	  	Hours:	  		  		  		  		
						
	  	Total Cycles:	  		  		  		  		
					
	  	Flight Hours since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	
						
	  	Cycles since	  		  		  		  		
	  	last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
June 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC    	  	Title	 	  MSN TBD  	 	  Comments  	
 	  	Introduction of A320-200 Standard Specification at Issue 6	 	X	 	 	
 	  	Introduction of A320-200 Standard Specification at Issue 7	 	X	 	 	
ATA 02    	  	Certification	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 03    	  	Weights	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 03    	  	Placards and markings	 	 	 	 	
*****    	  	*****	 	*****	 	 	
(No ATA #)    	  	Air Conditioning	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 22    	  	Auto Flight	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 23    	  	Communications	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 25    	  	Cabin & cockpit	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 29    	  	Hydraulic Power	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 31    	  	Indicating/Recording	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 32    	  	Landing gear	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 33    	  	Lights	 	 	 	 	
*****    	  	*****	 	*****	 	 	
 
Schedule 8-1

							
ATA 34	  	Navigation	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 35	  	Oxygen	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 38	  	Water/Waste	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 46	  	ATSU	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 47	  	Inerting Gas System	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 49	  	APU	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 51	  	Structure	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 52	  	Doors	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 55	  	Stabilizers	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 56	  	Windows	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 57	  	Wings	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 71	  	Power Plant - General	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 72	  	Engines	 	 	 	 	
*****    	  	 	 	*****	 	 	

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	Delivery Date  	  	Mar-12  	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue  	  	6	  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N  	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	 	  	*****	  	*****	
 
Schedule 8-2

													
Airline:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	Contractual  
Delivery
Date	  	Delivery  
Date	  	Mar-12  	
Operator:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	MSN	  	MSN	  	TBD	
A/C Type:	 	320-200	  	Issue  	  	5	  		  		  		
ATA/Item	 	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	 	*****	  	*****	  	*****  	  	*****	  	*****	  	*****	
 
Schedule 8-3

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-4

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary, Owner and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
[Reserved]
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY/PODER IRREVOCABLE
 
Form of Irrevocable Power of Attorney
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated              , 2012 (the “Lease”) entered it by and between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [    ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [    ] and CRÉDIT AGRICOLE CIB (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Federal Civil Code and its correlative articles of the several Civil Codes ruling in the federal entities of the Mexican United States, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i)	request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America;	
 
(ii)	to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign;	
Formato de Poder Irrevocable
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2012 (el “Arrendamiento”) celebrado por y entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [    ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [    ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [    ] y CRÉDIT AGRICOLE CIB (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los establecido en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil Federal y sus artículos correlativos de los diversos Códigos Civiles que rigen en las entidades federativas de los Estados Unidos Mexicanos, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i)	solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del Registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América;	
 
(ii)	solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera;	

Schedule 11-1

(iii)	to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC;	
 
(iv)	to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located;	
 
(v)	to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located;	
 
(vi)	to notify the termination of the Lease to the RAM or any other relevant authority;	
 
(vii)	to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form;	
 
(viii)	in case of an event of total loss of the Aircraft and/or the Engines (as such term is defined in the Lease), to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases;	
 
(ix)	to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and	
 
(x)	to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ” procedure; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to

(iii)	solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
(iv)	solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre;	
 
(v)	realizar todos los trámites necesarios y conducentes para la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave;	
 
(vi)	notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes;	
 
(vii)	realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera;	
 
(viii)	en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores (según dicho es definido en el Arrendamiento), para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación;	
 
(ix)	solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y	
 
(x)	delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y desistirse de cualquier acción o procedimiento incluidos el juicio de amparo; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y absolver posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no

Schedule 11-2

represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
For purposes of this power of attorney, the term “Aircraft” includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
SECOND.- This Power of Attorney is granted to be exercised within the Mexican United States and/or the United States of America according to the Inter-American Convention on the Legal Regime of Powers of Attorney to be Used Abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
THIRD.- This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
FOURTH.- Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federales, estatales o municipales de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).
Para todos los efectos previstos en este poder, el término “Aeronave” incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que en un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de los Estados Unidos Mexicanos y/o los Estados Unidos de América de conformidad con la Convención Interamericana del Régimen Legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, la Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
TERCERA.- Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
CUARTA.- Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil firmado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.

 
Schedule 11-3

FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.
In terms of Article VI of the Washington Protocol, the Spanish language which appears in this instrument is the authorized translation of the English language which also appears in this instrument, in all of its parts.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	 		
Name:	 	[ — ]	 		
Title:	 	[ — ]	 		
QUINTA.- La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.
De conformidad con el Artículo VI del Protocolo de Washington, el idioma español que aparece en este instrumento es la traducción autorizada del idioma inglés que también aparece en este instrumento, en todas sus partes.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

Por:	 	 	 		
Nombre:	 	[ — ]	 		
Cargo:	 	[ — ]	 		

Schedule 11-4

SCHEDULE 12
FORM OF EUROCONTROL LETTER
[PRINT ON LESSEE HEADED PAPER]
DATE                     
The Director of the Central Route Charges Office
European Organisation for the Safety of Air Navigation (EUROCONTROL)
Rue de la Fusée, 96
1130 BRUXELLES
BELGIUM
Dear Sirs
AUTHORISATION LETTER
Aircraft model Airbus A320-200: registration mark N510VL, MSN 5207 - the “Aircraft”
We have leased the above Aircraft from Wells Fargo Bank Northwest, National Association (not in its individual capacity, but solely as owner trustee) (the “ Lessor ”) in accordance with a lease agreement dated [ — ] between us and the Lessor (the “ Initial Sub-Lease ”).
We hereby authorise you to provide the Lessor (or its duly authorised representative) with a general statement of account in relation to air navigation charges incurred by us and due to EUROCONTROL. Access to the statement(s) of account will be provided in accordance with the procedures established by EUROCONTROL.
The authorisation contained in this letter may only be revoked or amended by a written instruction signed by us and the Lessor.
Yours faithfully,
For and on behalf of
[LESSEE]

 	 	(Name)	
		
 	 	(Title)	
 
Schedule 12-1

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” $337,500.00, such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
 
Annex A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : ****** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
 
Annex A-2

Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** days after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
Annex A-3

 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Annex A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
 
Annex A-5

Exhibit 10.38
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
AIRCRAFT LEASE AGREEMENT [4828]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4828
United States Registration Mark N506VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page 	 	
			
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	22	  	
			
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	30	  	
			
8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	32	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	  	General	  	 	42	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	45	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	48	  	
			
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
 
(ii)

							
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	75	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
			
SCHEDULE 8	  	PART A	  	LESSEE FURNISHED EQUIPMENT	
			
	  	PART B	  	IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4828] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4828] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.
 
-1-

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4828, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in September, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4828 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [                    ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set
 
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forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and
 
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model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
 
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(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights
 
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whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the
 
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U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
 
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(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location
 
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selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such
 
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participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the
 
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Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone:     (801) 246-5630
Attention:       Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4828, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone:     (415) 821-8300
Attention:      General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone:     (52 55) 5261-6400
Attention:      General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that
 
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such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
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disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4828] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial And Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust
Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4828

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4828
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: September, 2011
Seating Configuration: *****

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $            .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [                    ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

			

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of         20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-2

I, the undersigned,                 of Lessee, DO HEREBY CERTIFY that                 is a duly elected and qualified                 of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		 		  	Report Data From	  		  		
						
Aircraft S/N	 		 		  	Report Data To	  		  		
						
Type	 		 		  		  		  		
						
Total Flight Hours	 		 		  	FH Utilization for Period	  		  		
						
Total Cycles	 		 		  	FC Utilization for Period	  		  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
							
TSO	  		  		  		  		  		  		
							
CSO	  		  		  		  		  		  		
							
DSO	  		  		  		  		  		  		
							
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		

(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of               , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on              , 20      being the Delivery Date at                      :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$          ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:          :	

Total Flight Hours Since New	  	                    	
Total Cycles Since New	  	                        	
Flight Hours Since Last	  		
C-Check:	  	            N/A    	
Calendar Months Since Last	  		
D-Check	  	            N/A    	
Flight Hours Since Last	  		
D-Check	  	            N/A    	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                        1                                                      2                                                                     
Serial No:                    [                      ]                                [                       ]                                                 
Total Flight
Hours:                                                                                                                                                        
Total Cycles:                                                                                                                                                       
 
Flight Hours since last                                                                                                                                                       
Engine Performance Restoration:                 N/A                               N/A                                                                                               
Cycles since last
Engine Performance Restoration:                 N/A                               N/A                                                                                       
Cycles remaining
to next expected
Engine Performance Restoration                                                                                                                        
 
 	(c)	APU Model:                                         	
Serial No:                                              
Total [Flight]/[APU] Hours:                                                      
Total Cycles:                                                                                  
[APU]/[Flight] Hours since
the APU Heavy Repair:                                     N/A         
 
 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  	                    	  	                    	  	                    	
				
Serial No:	  	                    	  	                    	  	                    	
				
Total Flight	  		  		  		
				
Hours:	  	                    	  	                    	  	                    	
				
Total Cycles:	  	                    	  	                    	  	                    	
				
Flight Hours since
last Landing Gear Overhaul:	  	    N/A    	  	    N/A    	  	        N/A        	
				
Cycles since	  		  		  		
last Landing Gear Overhaul:	  	            N/A    	  	      N/A      	  	      N/A        	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
September 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	 	Title	  	MSN 4828	 	Comments	
	 	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	 	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	 	Certification	  		 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
ATA 03	 	Weights	  		 		
*****	 	*****	  	*****	 		
 
Schedule 8-1

CONFIDENTIAL TREATMENT REQUESTED

ATA 03	 	Placards and markings	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
	 	Air conditioning	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 22	 	Auto Flight	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 23	 	Communications	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
 
Schedule 8-2

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 25	 	Cabin & cockpit	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-3

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 29	 	Hydraulic Power	  		  		
*****	 	*****	  	*****	  		
 
Schedule 8-4

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
ATA 31	 	Indicating/Recording	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 32	 	Landing gear	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 33	 	Lights	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 34	 	Navigation	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
ATA 35	 	Oxygen	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 38	 	Water/Waste	  		  		
*****	 	*****	  	*****	  		
ATA 46	 	ATSU	  		  		
*****	 	*****	  	*****	  	*****	
ATA 47	 	Inerting Gas System	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-5

CONFIDENTIAL TREATMENT REQUESTED

ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant - General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4828	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

CONFIDENTIAL TREATMENT REQUESTED
BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4828	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY
LESSEE IN A PUBLIC DEED PREPARED BY A
MEXICAN NOTARY PUBLIC]
 
The undersigned, [                    ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
 
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] and JSA AIRCRAFT [            ], LLC (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                    ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
 
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y JSA AIRCRAFT [            ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
 
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

CONFIDENTIAL TREATMENT REQUESTED
ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
ANNEX A-1

CONFIDENTIAL TREATMENT REQUESTED
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
 
ANNEX A-2

CONFIDENTIAL TREATMENT REQUESTED
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

CONFIDENTIAL TREATMENT REQUESTED
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
ANNEX A-4

CONFIDENTIAL TREATMENT REQUESTED
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.39
AIRCRAFT LEASE AGREEMENT [4832]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4832
United States Registration Mark N507VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.          OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

							
   	  	 	  	Page	 	
CLAUSE 1. DEFINITIONS AND INTERPRETATION	  	 	1	  	
        1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
		
CLAUSE 2. REPRESENTATIONS AND WARRANTIES	  	 	14	  	
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
		
CLAUSE 3. CONDITIONS PRECEDENT	  	 	19	  	
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
		
CLAUSE 4. COMMENCEMENT	  	 	22	  	
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
		
CLAUSE 5. DISCLAIMERS	  	 	25	  	
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
		
CLAUSE 6. RENT AND OTHER PAYMENTS	  	 	26	  	
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
   	  	 	  	Page	 	
CLAUSE 7. FEES AND EXPENSES	  	 	29	  	
		
CLAUSE 8. GENERAL UNDERTAKINGS	  	 	30	  	
        8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	31	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
		
CLAUSE 9. OPERATIONAL UNDERTAKINGS	  	 	34	  	
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
		
CLAUSE 10. MAINTENANCE AND REPAIR	  	 	41	  	
10.1	  	General	  	 	41	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	44	  	
10.5	  	Permitted Modifications	  	 	45	  	
		
CLAUSE 11. ENGINES	  	 	46	  	
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
		
CLAUSE 12. TITLE	  	 	48	  	
		
CLAUSE 13. MANUFACTURER’S WARRANTIES	  	 	48	  	
		
CLAUSE 14. INSURANCES	  	 	48	  	
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	49	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	52	  	
14.9	  	Settlement of Claims	  	 	53	  	
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	53	  	
 
(ii)

							
   	  	 	  	Page	 	
CLAUSE 15. LOSS, DAMAGE AND REQUISITION	  	 	54	  	
        15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
		
CLAUSE 16. DEFAULT	  	 	56	  	
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	62	  	
		
CLAUSE 17. REDELIVERY.	  	 	63	  	
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
		
CLAUSE 18. INDEMNITIES	  	 	67	  	
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
		
CLAUSE 19. FURTHER PROVISIONS	  	 	75	  	
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	75	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
   	  	 	  	Page	 	
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
        19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	
 
SCHEDULE 1	AIRCRAFT DESCRIPTION	
 
SCHEDULE 1A	AIRCRAFT DOCUMENTS	
 
SCHEDULE 2	LEASE SUPPLEMENT	
 
SCHEDULE 3	CERTIFICATE	
 
SCHEDULE 4	REDELIVERY CONDITION	
 
SCHEDULE 5	MONTHLY MAINTENANCE STATUS REPORT	
 
SCHEDULE 6	FORM OF QUIET ENJOYMENT LETTER	
 
SCHEDULE 7	TECHNICAL ACCEPTANCE CERTIFICATE	
 
SCHEDULE 8	PART A LESSEE FURNISHED EQUIPMENT	
 
    	PART B IN FLIGHT ENTERTAINMENT	
 
SCHEDULE 9	LESSEE’S CONDITIONS PRECEDENT	
 
SCHEDULE 10	PERMITTED SUBLESSEES	
 
SCHEDULE 11	IRREVOCABLE POWER OF ATTORNEY	
 
ANNEX A	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4832] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4832] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4832, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in September, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4832 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the
 
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transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
 
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(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
 
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(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
 
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(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
 
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“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
 
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(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
 
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(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [              ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [                      ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
 
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(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
 
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(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
 
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(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
 
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Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from
 
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any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
 
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11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
 
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CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
 
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14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
 
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(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
 
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(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
 
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(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including,
 
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without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
 
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CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing,
 
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Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
 
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15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
 
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(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or
 
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winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
 
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(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
 
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(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
 
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(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
 
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(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
 
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(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
 
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(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
 
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CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
 
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18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply
 
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only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
 
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(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have
 
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occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest
 
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of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
 
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(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
 
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18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee
 
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shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
 
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19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
 
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19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone: (801) 246-5630
Attention: Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4832, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone: (52 55) 5261-6400
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
 
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Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
-81-

disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4832] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.              OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn. 4832

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4832
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: September, 2011
Seating Configuration: *****

Weights & Capacity	  	Tonnes	  		
Maximum Take Off Weight	  	*****	  		
Maximum Landing Weight	  	*****	  		
Maximum Zero Fuel Weight	  	*****	  		

Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
Schedule 1A-2

 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks—Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks—Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [              ], 20__, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N              , Manufacturer’s Serial No.               ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers              and              .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $              .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
			
        Name:	 	 	
			
        Title:	 	 	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
			
        Name:	 	 	
			
        Title:	 	 	

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,              of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [__] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	  	Office	  	Signature	

 	  	 	  	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this              day of              20__.

		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,              of Lessee, DO HEREBY CERTIFY that              is a duly elected and qualified              of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this              day of              , 20__.

		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
2. Check and Part Lives
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
a) Airframe :
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
b) Engines :
At the date of redelivery, no individual Engine shall *****. A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
c) APU:
The APU will be in serviceable condition and will have *****. The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
d) Landing Gear:
 
 	(i)	The Landing Gear shall *****. In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

e) Components:
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 	 	  	Report Data From	  	 	
				
Aircraft S/N	 	 	  	Report Data To	  	 	
				
Type	 	 	  		  		
				
Total Flight Hours	 	 	  	FH Utilization for Period	  	 	
				
Total Cycles	 	 	  	FC Utilization for Period	  	 	
Installed Equipment at Delivery
(Engines, APU, Landing Gear)

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear)

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
TSO	  		  		  		  		  		  		
CSO	  		  		  		  		  		  		
DSO	  		  		  		  		  		  		
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		

Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	
 
2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

(Lessee)
Title:                       
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To:     CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [ ]
Re:     Aircraft Lease Agreement [MSN] dated as of [ ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Beneficiary][Security Trustee]

By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                                     
Aircraft Lease Agreement [ MSN ] dated as of                       , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                              relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at              hours on                  , 20      being the Delivery Date at                                                       :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$                              ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:              :	

	  	Total Flight Hours Since New	  	 	  		
	  	Total Cycles Since New	  	 	  		
	  	Flight Hours Since Last	  		  		
	  	C-Check:	  	N/A	  		
	  	Calendar Months Since Last	  		  		
	  	D-Check	  	N/A	  		
	  	Flight Hours Since Last	  		  		
	  	D-Check	  	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                             1                              2
Serial No:                          [                  ]            [                  ]
Total Flight
Hours:                                                                             
Total Cycles:                                                                                     
Flight Hours since last
Engine Performance Restoration:             N/A                 N/A
Cycles since last
Engine Performance Restoration:             N/A                 N/A
Cycles remaining
to next expected
Engine Performance Restoration                                                    
 
(c)	APU Model:                                                                  	
Serial No:                                                                       
Total [Flight]/[APU] Hours:                                                          
Total Cycles:                                                              
[APU]/[Flight] Hours since
the APU Heavy Repair:                             N/A
 
(d)	Landing Gear:	
Position                         LH Main         Nose         RH Main
Model:                                                                                                           
Serial No:                                                                                            
Total Flight
Hours:                                                                                   
Total Cycles:                                                                                   
Flight Hours since
last Landing Gear Overhaul:             N/A             N/A             N/A

Schedule 7-2

Cycles since
last Landing Gear Overhaul:                 N/A                 N/A                 N/A
 
 	(e)	Fuel on Board:                                                                  	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
September 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN 4828	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
 
Schedule 8-1

							
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Schedule 8-2

							
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Schedule 8-3

							
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Schedule 8-4

							
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Schedule 8-5

							
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant—General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	  	MSN	  	4832	
A/C Type:	  	320-200	  	 	Issue	  	  	 	6	  	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

											
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
BFE
 
Schedule 8-7

													
Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery
Date	  	Delivery
Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4832	
A/C
Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
		
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [                  ] in its capacity as [                  ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated          , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [          ] dated [          ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [          ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [                  ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha                  , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [                  ] de fecha [          ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [          ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.—The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [          ] dated [          ] and JSA AIRCRAFT [          ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.—La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [          ] de fecha [          ] y JSA AIRCRAFT [          ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
		
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “amparo”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.	
		
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
		
SECOND.—This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	SEGUNDA.—Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
		
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
		
FIFTH.—The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****.
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****.
“ Discount Rate ” means *****.
“ Security Amount ” means at any time the amount equal to *****.
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****.
(b) *****per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
 
ANNEX A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH:

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be
 
ANNEX A-2

applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
 
(b)	US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.	
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for *****. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
 
ANNEX A-5

Exhibit 10.40
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
AIRCRAFT LEASE AGREEMENT [4950]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 4950
United States Registration Mark N508VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page 	 	
			
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	22	  	
			
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	23	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
 	  	 	  	Page 	 	
			
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	29	  	
			
8.1	  	Duration	  	 	29	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	31	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	41	  	
			
10.1	  	General	  	 	41	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	44	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	48	  	
			
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
 
(ii)

							
 	  	 	  	Page 	 	
			
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	62	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	75	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
 	  	 	  	Page 	 	
			
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
			
SCHEDULE 8	  	PART A	  	LESSEE FURNISHED EQUIPMENT	
			
	  	PART B	  	IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4950] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4950] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4950, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
-3-

“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in November, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4950 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to the ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [    ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
 
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(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and
 
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shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
 
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(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided
 
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that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security
 
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Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed
 
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Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
 
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14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
 
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(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60
 
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days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
 
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18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair,
 
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replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone:     (801) 246-5630
Attention:       Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4950, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone:     (415) 821-8300
Attention:      General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone:     (52 55) 5261-6400
Attention:      General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that
 
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such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
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disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4950] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust
Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4950

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4950
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: November, 2011
Seating Configuration: *****

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $            .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [                    ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

			

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of         20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-2

I, the undersigned,                 of Lessee, DO HEREBY CERTIFY that                 is a duly elected and qualified                 of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall *****. A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have *****. The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall *****. In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		 		  	Report Data From	  		  		
						
Aircraft S/N	 		 		  	Report Data To	  		  		
						
Type	 		 		  		  		  		
						
Total Flight Hours	 		 		  	FH Utilization for Period	  		  		
						
Total Cycles	 		 		  	FC Utilization for Period	  		  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
							
TSO	  		  		  		  		  		  		
							
CSO	  		  		  		  		  		  		
							
DSO	  		  		  		  		  		  		
							
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		

(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of               , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on              , 20      being the Delivery Date at                      :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$          ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:          :	

Total Flight Hours Since New	  	                    	
Total Cycles Since New	  	                        	
Flight Hours Since Last	  		
C-Check:	  	            N/A    	
Calendar Months Since Last	  		
D-Check	  	            N/A    	
Flight Hours Since Last	  		
D-Check	  	            N/A    	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                        1                                                      2                                                                     
Serial No:                    [                      ]                                [                       ]                                                 
Total Flight
Hours:                                                                                                                                                        
Total Cycles:                                                                                                                                                       
 
Flight Hours since last                                                                                                                                                       
Engine Performance Restoration:                 N/A                               N/A                                                                                               
Cycles since last
Engine Performance Restoration:                 N/A                               N/A                                                                                       
Cycles remaining
to next expected
Engine Performance Restoration                                                                                                                        
 
 	(c)	APU Model:                                         	
Serial No:                                              
Total [Flight]/[APU] Hours:                                                      
Total Cycles:                                                                                  
[APU]/[Flight] Hours since
the APU Heavy Repair:                                     N/A         
 
 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  	                    	  	                    	  	                    	
				
Serial No:	  	                    	  	                    	  	                    	
				
Total Flight	  		  		  		
				
Hours:	  	                    	  	                    	  	                    	
				
Total Cycles:	  	                    	  	                    	  	                    	
				
Flight Hours since
last Landing Gear Overhaul:	  	    N/A    	  	    N/A    	  	        N/A        	
				
Cycles since	  		  		  		
last Landing Gear Overhaul:	  	            N/A    	  	      N/A      	  	      N/A        	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
November 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	 	Title	  	MSN 4828	 	Comments	
	 	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	 	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	 	Certification	  		 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
ATA 03	 	Weights	  		 		
*****	 	*****	  	*****	 		
 
Schedule 8-1

							
ATA 03	 	Placards and markings	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
	 	Air conditioning	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 22	 	Auto Flight	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 23	 	Communications	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
 
Schedule 8-2

							
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 25	 	Cabin & cockpit	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-3

							
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	******	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 29	 	Hydraulic Power	  		  		
*****	 	*****	  	*****	  		
 
Schedule 8-4

							
*****	 	*****	  	*****	  		
ATA 31	 	Indicating/Recording	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 32	 	Landing gear	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 33	 	Lights	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 34	 	Navigation	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
ATA 35	 	Oxygen	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 38	 	Water/Waste	  		  		
*****	 	*****	  	*****	  		
ATA 46	 	ATSU	  		  		
*****	 	*****	  	*****	  	*****	
ATA 47	 	Inerting Gas System	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-5

							
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
******	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant - General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Nov-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4950	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

											
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Nov-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4950	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY
LESSEE IN A PUBLIC DEED PREPARED BY A
MEXICAN NOTARY PUBLIC]
 
The undersigned, [                    ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
 
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] and JSA AIRCRAFT [            ], LLC (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                    ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
 
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y JSA AIRCRAFT [            ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
 
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****.
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****.
“ Discount Rate ” means *****.
“ Security Amount ” means at any time the amount equal to *****.
*****.
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
 
ANNEX A-1

Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be

applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof,*****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
*****
*****
*****
*****
*****
*****
*****
*****

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.41
AIRCRAFT LEASE AGREEMENT [5062]
Dated as of March 15, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5062
United States Registration Mark N509VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.             OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page	 	
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	23	  	
			
4.1	  	Term of Leasing	  	 	23	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	27	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	29	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	30	  	
			
8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	31	  	
8.4	  	Existence	  	 	32	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	33	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	37	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	39	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	  	General	  	 	42	  	
10.2	  	Specific Requirements	  	 	43	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	45	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	49	  	
			
14.1	  	Obligation to Insure	  	 	49	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
 
(ii)

							
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	67	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	72	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	75	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	76	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	76	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	80	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	82	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
		
SCHEDULE 8	  	PART A         LESSEE FURNISHED EQUIPMENT	
		
	  	PART B         IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [5062 ] dated as of March 15, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5062] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 5062, LLC (formerly known as JSA Aircraft A320-A, LLC), a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
-3-

“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Re-Novation, (b) the Bill of Sale, (c) the Lessor Certificate of Acceptance, (d) the Delivery Purchase Agreement Assignment, and (e) the Delivery Consent Agreement.
“ Delivery Location ” means the *****
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
 
-4-

“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
 
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“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Re-Novation ” means the novation agreement to be delivered by the Beneficiary, as buyer under the Participation Agreement, to the Seller, at or prior to Delivery.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about March 30, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5062) dated as of March 15, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than
 
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New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
 
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(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
 
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(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF WILMINGTON TRUST COMPANY, AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
 
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CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the
 
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Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
 
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(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
 
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(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
 
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6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative
 
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Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
 
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6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
 
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8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
 
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8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5062, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are IAE V2527E-A5 Select One engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
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 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
 
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(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s).
 
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Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
 
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Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
 
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(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
 
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9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
 
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(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
 
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(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
 
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10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in
 
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Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
 
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(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
 
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Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
 
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CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
 
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In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that
 
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such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
 
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(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy
 
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the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the
 
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destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
 
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Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
 
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(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
 
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(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
 
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(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
 
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(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
 
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(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
 
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Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
 
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(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which
 
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are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry
 
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Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under
 
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Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
 
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(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an
 
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Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
 
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(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such
 
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Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
 
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18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable
 
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appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
 
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(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
 
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18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
 
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CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee
 
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undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
 
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(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
 
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to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft 5062, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone: (52 55) 5261-6400
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
 
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19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in
 
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the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
 
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19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5062] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name:	 	David Wall	
Title:	 	Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn 5062

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5062
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: V16154 and V16151
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: March, 2012
Seating Configuration: *****

Weights & Capacity	    	    Tonnes    	  	 	
Maximum Take Off Weight	    	*****	  		
Maximum Landing Weight	    	*****	  		
Maximum Zero Fuel Weight	    	*****	  		
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [                    ], 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of                     , 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [        ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	  	Office	 	Signature	

 	  	 	 	 	

 	  	 	 	 	

 	  	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this             day of             20    .

By:	 	 	
	 	    Name:
    Title:	
 
Schedule 3-2

I, the undersigned,                     of Lessee, DO HEREBY CERTIFY that                     is a duly elected and qualified             of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this             day of             , 20    .

By:	 	 	
Name:
Title:	
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe:	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to the *****	
 
 	b)	Engines:	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

 
Aircraft Reg	  	 	  		  	Report Data From	  	 	  		
 
Aircraft S/N	  	 	  		  	Report Data To	  	 	  		
 
Type	  	 	  		  		  		  		

Total Flight Hours	  	 	  		  	FH Utilization for Period	  	 	  		

Total Cycles	  	 	  		  	FC Utilization for Period	  	 	  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	 	NEXT CHECK DUE	
CHECK
TYPE	 	CHECK
#	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	  	 	 	CHECK
TYPE	 	CHECK
#	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	
A-Check	 	 	 	 	 	 	 	 	  		 	A-Check	 	 	 	 	 	 	 	 	
C-Check	 	 	 	 	 	 	 	 	  		 	C-Check	 	 	 	 	 	 	 	 	
D-Check	 	 	 	 	 	 	 	 	  		 	D-Check	 	 	 	 	 	 	 	 	
TECHNICAL ACTIVITY DURING PERIOD
 
 	  1.	Engine, APU and Landing Gears – details of removal activity	
					
S/N OFF	  	S/N ON	  	REASON / CAUSE	

 	  2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

 	

 
	
DEFERRAL LIST
 	
 	3.	See following pages for current open deferrals report.	

AIRCRAFT ACCIDENT/INCIDENT REPORT	
 
 	4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	 	  	 	
 
Schedule 5-2

AD STATUS REPORT
 
5.	See following pages for current AD status report.	

AIRCRAFT STATUS CERTIFICATION	
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

 	
(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [    ]
Re: Aircraft Lease Agreement [MSN] dated as of [ ] 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Beneficiary][Security Trustee]

By	 	 	
Name:
Title:	
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:
Title:	
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                                                  
Aircraft Lease Agreement [ MSN ] dated as of                     , 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                     relating to Airbus A320-233 Aircraft, manufacturer’s serial number             (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at             hours on             , 20     being the Delivery Date at                     :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$            ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are             and             ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:             :	

Total Flight Hours Since New	  		  		
	  	 	  		
Total Cycles Since New	  		  		
	  	 	  		
Flight Hours Since Last
C-Check:	  	        N/A    	  		
	  	 	  		
Calendar Months Since Last
D-Check	  	        N/A    	  		
	  	 	  		
Flight Hours Since Last
D-Check	  	        N/A    	  		

 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	

Position	  	1	 	2	
Serial No:	  	[                                  ]	 	[                                  ]	
			
Total Flight	  		 		
Hours:	  		 		
	  	 	 	 	
Total Cycles:	  		 		

Flight Hours since last
Engine Performance Restoration:	  	N/A	 	N/A	

Cycles since last
Engine Performance Restoration:	  	N/A	 	N/A	

Cycles remaining
to next expected
Engine Performance Restoration	  		 		

 	(c)	APU Model:                            	

Serial No:	  		

Total [Flight]/[APU] Hours:	  		

Total Cycles:	  		

[APU]/[Flight] Hours since
the APU Heavy Repair:	  	N/A	

 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  		  		  		

Serial No:	  		  		  		

Total Flight Hours:	  		  		  		

Total Cycles:	  		  		  		

Flight Hours since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	

Cycles since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	

Schedule 7-2

 	(e)	Fuel on Board:            	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

	

By:	 	 	

Name:	 	 	

Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
March 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN TBD	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
				
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
				
ATA 02	  	Certification	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 03	  	Weights	  		  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-1

							
				
ATA 03	  	Placards and markings	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
	  	Air conditioning	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 22	  	Auto Flight	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 23	  	Communications	  		  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-2

							
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 25	  	Cabin & cockpit	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-3

							
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-4

							
				
ATA 29	  	Hydraulic Power	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 31	  	Indicating/Recording	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 32	  	Landing gear	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 33	  	Lights	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 34	  	Navigation	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 35	  	Oxygen	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 38	  	Water/Waste	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 46	  	ATSU	  		  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 47	  	Inerting Gas System	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-5

							
				
ATA 49	  	APU	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 51	  	Structure	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 52	  	Doors	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 55	  	Stabilizers	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 56	  	Windows	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 57	  	Wings	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 71	  	Power Plant—General	  		  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 72	  	Engines	  		  		
				
*****	  	*****	  	*****	  		

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

											
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  	*****	  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

													
Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery Date	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
		
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2012 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [        ] dated [        ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [        ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2012 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [        ] de fecha [        ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [        ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [        ] dated [        ] and JSA AIRCRAFT [        ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [        ] de fecha [        ] y JSA AIRCRAFT [        ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 	
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 	
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
2. Maintenance Payments .
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
 
ANNEX A-2

Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.42
AIRCRAFT LEASE AGREEMENT [5212]
Dated as of June 26, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as owner trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5212
United States Registration Mark N511VL
Two (2) IAE International Aero V2527E-A5 Engines
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

   	  	Page	 	
CLAUSE 1. DEFINITIONS AND INTERPRETATION	  	 	1	  	
		
1.1 Definitions	  	 	1	  	
1.2 Interpretation	  	 	14	  	
		
CLAUSE 2. REPRESENTATIONS AND WARRANTIES	  	 	15	  	
		
2.1 Lessee’s Representations and Warranties	  	 	15	  	
2.2 Lessor’s Representations and Warranties	  	 	18	  	
2.3 No Prejudice	  	 	20	  	
		
CLAUSE 3. CONDITIONS PRECEDENT	  	 	20	  	
		
3.1 Lessor’s Conditions Precedent	  	 	20	  	
3.2 Waiver	  	 	23	  	
3.3 Lessee’s Conditions Precedent	  	 	24	  	
		
CLAUSE 4. COMMENCEMENT	  	 	24	  	
		
4.1 Term of Leasing	  	 	24	  	
4.2 Delivery	  	 	24	  	
4.3 Licenses	  	 	25	  	
4.4 Quiet Enjoyment; Lessor Party Covenants	  	 	25	  	
		
CLAUSE 5. DISCLAIMERS	  	 	26	  	
		
5.1 General Disclaimers	  	 	26	  	
5.2 Deficiencies and Delays	  	 	27	  	
5.3 Repairs and Replacement	  	 	27	  	
		
CLAUSE 6. RENT AND OTHER PAYMENTS	  	 	27	  	
		
6.1 Rent	  	 	27	  	
6.2 Security	  	 	28	  	
6.3 Maintenance Payments	  	 	28	  	
6.4 Payment Obligations Unconditional	  	 	28	  	
6.5 Currency of Payments	  	 	29	  	
6.6 Currency Indemnity	  	 	29	  	
6.7 Authorizations for Payments	  	 	30	  	
6.8 Set-off	  	 	30	  	
6.9 Lessor’s Account; Receipt of Payment	  	 	30	  	
 
(i)

					
CLAUSE 7. FEES AND EXPENSES	  	 	30	  	
		
CLAUSE 8. GENERAL UNDERTAKINGS	  	 	31	  	
		
8.1 Duration	  	 	31	  	
8.2 Notice of Event of Default; Certificate	  	 	31	  	
8.3 Financial and Other Information	  	 	32	  	
8.4 Existence	  	 	33	  	
8.5 ERISA	  	 	34	  	
8.6 Lessee’s Jurisdiction	  	 	34	  	
8.7 Cape Town Convention	  	 	34	  	
		
CLAUSE 9. OPERATIONAL UNDERTAKINGS	  	 	35	  	
		
9.1 Registration, Title and Nameplates	  	 	35	  	
9.2 Liens	  	 	38	  	
9.3 Possession and Subleases	  	 	38	  	
9.4 Information and Records	  	 	40	  	
9.5 Lawful and Safe Operation; Costs of Operation	  	 	41	  	
9.6 Right of Inspection	  	 	43	  	
		
CLAUSE 10. MAINTENANCE AND REPAIR	  	 	44	  	
		
10.1 General	  	 	44	  	
10.2 Specific Requirements	  	 	44	  	
10.3 Substitution of Parts; Ownership	  	 	45	  	
10.4 Pooling of Parts	  	 	47	  	
10.5 Permitted Modifications	  	 	47	  	
		
CLAUSE 11. ENGINES	  	 	48	  	
		
11.1 General Principles	  	 	48	  	
11.2 Removal of Engines	  	 	49	  	
		
CLAUSE 12. TITLE	  	 	50	  	
		
CLAUSE 13. MANUFACTURER’S WARRANTIES	  	 	50	  	
		
CLAUSE 14. INSURANCES	  	 	51	  	
		
14.1 Obligation to Insure	  	 	51	  	
14.2 Insurance with Respect to the Aircraft	  	 	51	  	
14.3 Terms Specific to Hull Insurance	  	 	51	  	
14.4 Liability Insurance with Respect to the Aircraft	  	 	52	  	
14.5 Provisions Relating to all Insurance	  	 	52	  	
14.6 Information	  	 	53	  	
14.7 Additional Insurance; No Lien	  	 	54	  	
14.8 Failure to Insure	  	 	55	  	
14.9 Settlement of Claims	  	 	55	  	
14.10 Assignment	  	 	56	  	
14.11 Post Termination	  	 	56	  	
 
(ii)

					
CLAUSE 15. LOSS, DAMAGE AND REQUISITION	  	 	56	  	
		
15.1 Total Loss of Aircraft or Airframe	  	 	56	  	
15.2 Total Loss of Engine(s)	  	 	57	  	
15.3 Other Loss or Damage	  	 	58	  	
15.4 Requisition	  	 	58	  	
		
CLAUSE 16. DEFAULT	  	 	59	  	
		
16.1 Events of Default	  	 	59	  	
16.2 Rights and Remedies	  	 	61	  	
16.3 Power of Attorney	  	 	64	  	
16.4 Mitigation Credit	  	 	65	  	
		
CLAUSE 17. REDELIVERY	  	 	65	  	
		
17.1 Redelivery	  	 	65	  	
17.2 Condition of Aircraft and the Aircraft Documents	  	 	66	  	
17.3 Inspection; Corrections; Additional Work	  	 	67	  	
17.4 Compliance after Term	  	 	68	  	
17.5 Deregistration and Export	  	 	68	  	
17.6 Ferry Flight	  	 	69	  	
17.7 Storage	  	 	69	  	
		
CLAUSE 18. INDEMNITIES	  	 	69	  	
		
18.1 General Indemnities	  	 	69	  	
18.2 General Tax Indemnity	  	 	71	  	
18.3 Notice and Contest Rights	  	 	74	  	
18.4 Mitigation	  	 	76	  	
18.5 Payments on After-Tax Basis	  	 	76	  	
18.6 No Deductions or Withholdings	  	 	76	  	
18.7 Tax Benefit	  	 	76	  	
18.8 Reports	  	 	77	  	
18.9 Continuation of Indemnities	  	 	77	  	
18.10 Forms	  	 	77	  	
18.11 Non-Parties	  	 	78	  	
		
CLAUSE 19. FURTHER PROVISIONS	  	 	78	  	
		
19.1 Nature of Lessee’s Obligations	  	 	78	  	
19.2 Benefit of Agreement	  	 	78	  	
19.3 Further Assurances	  	 	79	  	
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	80	  	
19.5 Delegation	  	 	80	  	
19.6 Evidence of Indebtedness	  	 	80	  	
19.7 Applications of Moneys	  	 	80	  	
19.8 Notices	  	 	81	  	
 
(iii)

					
19.9 Invalidity of any Provision	  	 	81	  	
19.10 Lessor’s Right to Remedy	  	 	82	  	
19.11 Entire Agreement	  	 	82	  	
19.12 Governing Law	  	 	82	  	
19.13 Jurisdiction; Service of Process; Inconvenient Forum	  	 	83	  	
19.14 Waiver of Jury Trial	  	 	84	  	
19.15 Lease for U.S. Federal Income Tax Law Purposes	  	 	84	  	
19.16 Confidentiality	  	 	84	  	
		
SCHEDULE 1 AIRCRAFT DESCRIPTION	  				
		
SCHEDULE 1A AIRCRAFT DOCUMENTS	  				
		
SCHEDULE 2 LEASE SUPPLEMENT	  				
		
SCHEDULE 3 CERTIFICATE	  				
		
SCHEDULE 4 REDELIVERY CONDITION	  				
		
SCHEDULE 5 MONTHLY MAINTENANCE STATUS REPORT	  				
		
SCHEDULE 6 FORM OF QUIET ENJOYMENT LETTER	  				
		
SCHEDULE 7 TECHNICAL ACCEPTANCE CERTIFICATE	  				
		
SCHEDULE 8 PART A LESSEE FURNISHED EQUIPMENT	  				
		
                           PART B IN FLIGHT ENTERTAINMENT	  				
		
SCHEDULE 9 LESSEE’S CONDITIONS PRECEDENT	  				
		
SCHEDULE 10 [RESERVED]	  				
		
SCHEDULE 11 IRREVOCABLE POWER OF ATTORNEY	  				
		
SCHEDULE 12 FORM OF EUROCONTROL LETTER	  				
		
ANNEX A CERTAIN DEFINITIONS AND PAYMENTS	  				
 
(iv)

AIRCRAFT LEASE AGREEMENT [5212 ] dated as of June 26, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as owner trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Antonio Dovali Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, Delegación Alvaro Obregon, CP 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5212] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Owner pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft Ireland 5212 Limited, a private limited liability company incorporated in Ireland, having its registered address at 70 Sir John Rogerson’s Quay, Dublin, Ireland, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Owner at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Coface ” means Compagnie Francaise d’Assurance pour le Commerce Extérieur.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
 
-3-

“ Damage Notification Threshold ” has the meaning provided in Annex A.
“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Owner Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ ECA Finance Party ” means (i) Crédit Agricole CIB (“CA”), in its capacity as lender, national agent, facility agent and security trustee under the ECA Loan Agreement dated on or about June 29, 2012 relating to the Aircraft, and the transferees, successors and assigns of CA in any such capacity and (ii) ECGD, Coface and Euler Hermes.
“ ECGD ” means The Secretary of State of Her Britannic Majesty’s Government acting by the Export Credits Guarantee Department.
 
-4-

“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Owner and leased to Lessor under the Head Lease and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Owner pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Owner pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines A.G.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ EU ETS ” means both (a) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC and (b) Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, together with any related, connected or successive law, statute, decree, constitution, regulation, authorization, judgment, injunction or other directive of any Government Entity of the European Union.
“ Euler Hermes ” means Euler Hermes Deutschland A.G.
“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation.
 
-5-

“Eurocontrol Letter ” means a letter in the form set out in Schedule 12 hereto.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, Head Leases, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Owner or Lessor or any third party by way of security for, or as a guarantee of the performance by, Owner, Lessor or any Affiliate of Owner or Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
 
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“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ Head Lease ” means the lease between Lessor, as lessee, and Owner, as lessor, with respect to the Aircraft.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: each Lessor Party, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Owner in accordance with this Agreement.
“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of
this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
 
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“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor, Owner or an Affiliate of Lessor or Owner in relation to Lessor’s, Owner’s or such Affiliate’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders, and any ECA Finance Party.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s or Owner’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Party ” means Owner, Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
 
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“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s or Owner’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document, and which includes requirements for long-term storage during extended periods of non-use of the Aircraft.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
 
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“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Owner ” means Jackson Square A320 Leasing (Ireland) Limited, a private limited liability company incorporated in Ireland.
“ Owner Certificate of Acceptance ” means the certificate of acceptance from Owner confirming acceptance of the Aircraft from the Manufacturer.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in-flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Owner pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien created by or pursuant to or permitted by the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any person holding all relevant certificates and consents for the operation of the Aircraft whose habitual base of operation is not located in a Prohibited Country and which is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
 
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“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part which has not been manufactured by or with the written permission of the original manufacturer of that Part.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Prohibited Country ” means any state, country or jurisdiction (a) which is subject to any sanction or embargo by the United Nations, the European Union (or the United Kingdom, France or Germany), the United States of America, the State of Registration or the Habitual Base or (b) with which any of France, Germany or the United Kingdom does not maintain diplomatic relations.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Owner.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about June 29, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means each Lessor Party, and each Lender, and each of their respective Affiliates, officers, directors, agents and employees.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor or the Security Trustee as loss payee under Lessee’s policies of insurance/reinsurance receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5212) dated as of June 25, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the
 
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Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor or Owner in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor and Owner in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor or Owner to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
 
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(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever rights in the Aircraft as were conveyed to it by Owner under the Head Lease and shall have all requisite authority to lease the Aircraft to Lessee hereunder;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, and JSA in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of DeBee Gilchrist, FAA counsel, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance acceptable to Lessor and the Lenders;
 
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(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transacting user entity with the International Registry and has granted authorization to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a priority search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
 
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(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY JACKSON SQUARE A320 LEASING (IRELAND) LIMITED, IS MORTGAGED TO CRÉDIT AGRICOLE CIB AS SECURITY TRUSTEE, IS LEASED TO WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE) AND IS SUB-LEASED TO CONCESIONARIA VUELA COMPAŇIA DE AVIACIÓN, S.A.P.I. DE C.V.—VOLARIS”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney in favor of Lessor and the Security Trustee, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
 
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3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that
 
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Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to or at the direction of Lessor or, as applicable, the Security Trustee, of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
 
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(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS
 
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HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights,
 
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powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the
 
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laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of any Lessor Party or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
 
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6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe
 
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and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
 
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8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Owner and leased to Lessor in accordance with the terms of the Head Lease, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or Owner, acknowledge before any judicial or administrative authority the right of ownership of Owner and the
 
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leasehold interest of Lessor in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or Owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
 
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8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver the IDERA to the Lessor, and the Lessor shall promptly secure its recordation by the relevant Aviation Authority should the Aircraft become registered in the name of the Lessee;	
 
 	(c)	If the IDERA has been filed with the relevant Aviation Authority, the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5212, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are International Aero Engines V2500- A5 engines as more particularly described in the Technical Acceptance Certificate;	
 
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 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft with the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Owner as owner and the Security Trustee as trustee on behalf of the Lenders as creditors in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition to the Replacement Engine being vested in the Owner, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each
 
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other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Owner or Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Owner or Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor, Owner and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(r) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
 
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(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor, Owner and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Owner and the Aircraft is leased to Lessee by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the
 
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perfection of Owner and Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to a Permitted Sublessee that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
 
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(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14;
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Owner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
 
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Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
 
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(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Owner, Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all (i) laws, statutes, decrees, regulations, authorizations, judgments, injunctions and other directives of any Government Entity (including, without limitation, when and if the Aircraft is operated to, from or within European airspace, EU ETS legislation, including any international treaty or similar instrument or agreement relating thereto which is applicable to Volaris), (ii) any treaty, pact, compact or other binding agreement to which any Government Entity is a signatory and (iii) any judicial or administrative interpretation with binding characteristics or application of those described in (i) and (ii), is a signatory or party which in each case is then applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof or the failure to comply with which would result in any criminal liability on the part of any Indemnitee and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
 
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(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions in each case relevant to the export, location, use, leasing or financing of the Aircraft or matters arising therefrom, and the effect of which prohibition order (or similar order or directive), sanction or restriction is to prohibit flights to and from such jurisdiction or to prevent the Aircraft from remaining at such jurisdiction; in each case, in violation of such prohibition order (or similar order or directive), sanction or restriction except as may be necessary to safeguard the Aircraft, passengers or crew in the case of urgent circumstances resulting from atmospheric or climatic conditions, technical failure or other reasonable safety concerns (provided that in such case, Lessee shall take all measures to remove the Aircraft from such location as soon as such circumstances or conditions shall cease) whether made by or under:
(i) any Government Entity of the State of Registration, the Habitual Base, France, Germany, the United Kingdom or the United States of America; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over any Lessor Party, or any Lender, of which Lessee has notice, or over the Aircraft;
(iv) the United Nations Security Council or the European Union;
(g) obtain and maintain in full force, and operate the Aircraft in accordance with, all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
 
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Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and be continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; provided that, unless an Event of Default has occurred and is continuing, and without in any way affecting the right of the ECA Finance Parties to perform their own annual inspection, the Lessor agrees that, should the ECA Finance Parties elect to perform an inspection during any calendar year, Lessor shall coordinate with the ECA Finance Parties so as to participate in such inspection or shall rely on the inspection report generated by the ECA Finance Parties for such calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall include a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor, any Lender or any ECA Finance Party shall have any obligation to make any inspection.
9.7 EU Operations . In the event the Aircraft is at any time to be operated in any jurisdiction in which Eurocontrol has jurisdiction over airport operations, Lessee shall, prior to commencing such operations, provide Lessor and the Lenders with a Eurocontrol Letter.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory requirements, all mandatory requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
 
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(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version
 
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thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. For so long as the financing with respect to the Aircraft provided by the ECA Finance Parties remains outstanding, and unless otherwise permitted under subsequent Financing Documents, PMA Parts may not be installed on the Airframe; provided, that Lessor shall promptly notify Lessee should Lessor become aware of a change in ECA policy regarding the use of PMA Parts, and in such event Lessor and Lessee will take appropriate action to permit Lessee to make use of cosmetic, non-structural and non-critical interior cabin PMA Parts to the extent permitted by the new ECA policy.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become the property of Owner subject to the Head Lease and this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Owner, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Owner, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Owner (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Owner) remain with Owner free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Owner.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Owner until the Part which replaced it becomes the property of Owner or is replaced by a Part which thereupon becomes the property of Owner, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Owner remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Owner, or will, upon fitting, become the property of Owner.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Owner free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor or Owner, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Owner; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
 
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(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Owner at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor, Owner or any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Owner.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Owner, Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
 
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Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Owner, Lessor and any Lender, that it will respect the interests of Owner, Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Owner. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Owner, Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Owner subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Owner or Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Owner or Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have and to cause Owner to enforce such rights as it may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Owner or Lessor, as the case may be, including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself, Owner and/or Lessor.
 
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CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include each Lessor Party and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
 
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In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);

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(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that no Lessor Party nor any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against any Lessor Party and any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days’ notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
 
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(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to any Lessor Party or any Lender, to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Owner, Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
 
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(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, except as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
 
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14.10 Assignment . If Owner transfers the Aircraft or Lessor transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Owner or Lessor, as the case may be, may have from time to time under such insurances. In addition, if Owner transfers title to the Aircraft or Lessor transfers such rights in this Agreement and thereafter Lessor ceases to be lessor of the Aircraft or Owner ceases to be the owner of the Aircraft(any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay or cause to be paid the Agreed Value to the Security Trustee for the benefit of the “Contract Parties” under Lessee’s policy of reinsurance, within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full of the Agreed Value as set forth above and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
 
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15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Owner acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Owner and Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition of title by Owner, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Owner and become subject to this Agreement, the Head Lease and any Security Documents executed by Owner or Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Owner with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Owner, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Owner’s, Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Owner and Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Owner and Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Owner all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the
 
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United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Owner, Lessor and the Lenders, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will or will cause Owner to, transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Owner’s or Lessor’s, as the case may be, right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
 
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CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
 
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(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Owner or Lessor in respect of the Aircraft hereunder or under the Head Lease, as applicable, is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or
 
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any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor or Owner sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
 
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(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor or, without duplication of such costs and damages, any Lessor Party as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to the residual interest of Lessor or, without duplication of such loss, cost, expense, liability or damage, any Lessor Party in the Aircraft, sustained by such Lessor Party due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
 
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(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and
 
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(b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in
 
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respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”). Lessee’s redelivery of the Aircraft to Lessor in accordance with the terms of this Agreement will be evidenced by execution and delivery by Lessor and Lessee of a redelivery acceptance certificate in form and substance satisfactory to Lessor and Lessee.
 
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17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
 
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17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
 
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17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
 
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(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
 
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(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or (in the case of any Indemnitee other than an ECA Finance Party) recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than (i) any Claim made against an ECA Finance Party, which Lessee may defend or compromise
 
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only upon receipt of the prior written consent of such ECA Finance Party and (ii) with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
 
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(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the
 
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jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
 
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(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in
 
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the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee; provided that in no event will Lessee control any contest as it relates to an ECA Finance Party without such ECA Finance Party’s prior written consent. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
 
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18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2,
 
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18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in
 
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order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Each of Lessor, Owner and Owner Participant may at its own expense assign or transfer its interest in the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document, in each case, to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender or head lessor as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents. Lessor shall procure that each of Owner and Owner Participant shall agree, in writing, in favor of Lessee, to be bound by the provisions of this Clause 19.2
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
 
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(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Owner, Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
 
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19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
 
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19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft Ireland 5212 Limited c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Antonio Dovali Jaime No. 70
Torre B, Piso 13
Col. Zedec Santa Fe
Delegación Alvaro Obregon
CP 01210 México, D.F.
México
Telephone: (52 55) 1105 2300
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
 
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19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
(b) NOTWITHSTANDING AND WITHOUT PREJUDICE TO SECTION 19.12(a), IN CASE ANY LEGAL ACTION, SUIT OR PROCEEDING IS BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE UNITED MEXICAN STATES OR ANY POLITICAL SUBDIVISION THEREOF TO RECOVER THE AIRCRAFT OR ANY PART THEREOF (OR ANY LEGAL ACTION, SUIT OR PROCEEDING RELATED THERETO TO RECOVER ASSETS OR THAT CAN RESULT IN THE ATTACHMENT OF ASSETS IS BROUGHT IN ANY OF THE AFORESAID COURTS), THE PARTIES HERETO HEREBY AGREE, PURSUANT TO ARTICLE VIII (2) OF THE PROTOCOL TO THE CONVENTION ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT, THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, EXCEPT TO THE EXTENT THAT THE PARTY BRINGING ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING ELECTS AT THE TIME OF THE COMMENCEMENT THEREOF THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, IN WHICH CASE AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH RIGHTS AND/OR OBLIGATIONS, AS THE CASE MAY BE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
 
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19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement or any of the Operative Documents (“Proceedings”) may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), and in the case of Proceedings brought to recover the Aircraft, (or Proceedings related thereto to recover assets or that could result in the attachment of assets), in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located. By execution and delivery of this Agreement, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such Proceedings, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby and hereby irrevocably waives any right to resort to any other jurisdiction to which it may be entitled by virtue of its present or future domicile or otherwise.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring Proceedings or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Proceeding arising out of or relating to this Agreement or any of the other Operative Documents brought in the State of New York and the Supreme Court of the State of New York (and all related appellate courts) and, in the case of Proceedings brought to recover the Aircraft (or Proceedings related thereto to recover assets or that could result in the attachment of assets) in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located, and hereby further irrevocably waives any claim that any Proceedings in any of the aforesaid courts has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any Proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such Proceedings are brought in an inconvenient forum, that the venue of such Proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
 
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19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
 
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(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5212] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	/s/ Mario E. Geyne	
Name: Mario E. Geyne	
Title: Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name: David Wall	
Title: Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement
MSN 5212

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5212
Engine Manufacturer and Model: IAE International Aero Engines A.G. V2500-A5
Engine Serial Numbers: V16302 and V16304
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: P-5131].
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: 12B12481 (Nose); 12MDG2645 (LH Gear); 12MDG2676 (RH Gear)
Date of Manufacture: June, 2012
Seating Configuration: *****

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
 	e)	Structural Repair Manual;	
 
Schedule 1A-1

 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
10) APU
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ 5212 ], dated June     , 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ 5212 ] dated as of June 26, 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N511VL, Manufacturer’s Serial No.5212; and
Engines: Two IAE International Aero Engines A.G. V2527E-A5 engines installed thereon bearing Engine Manufacturer’s Serial Numbers V16302 and V16304 (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name: 	 	 	
	 	Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., Lessee	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned, an officer of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”), a sociedad anónima promotora de inversión de capital variable organized and existing under the laws of Mexico, DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement [5212] dated as of June 26, 2012 (as the same may be supplemented, amended or modified from time to time, the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement (5212) and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number 5212 (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. Attached hereto as Exhibit A is a copy of the constitutional documents and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
3. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which resolution also includes the power of attorney and which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
4. Each person whose name, title and signature appears in the attached Exhibit C hereto have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions set opposite their names and the signatures set opposite their names are their genuine signatures.
5. The representations and warranties of Lessee under Section 2.1 of the Lease and each of the other Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
7. No Event of Default or default by Lessee under the Lease or any other Lessee’s Document have occurred and is continuing as of this date or would arise by reason of the occurrence of the transactions contemplated in the Lessee’s Documents.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this          day of          20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                  of Lessee, DO HEREBY CERTIFY that                  is a duly elected and qualified                  of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this                  day of         , 20        .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
1. General Condition
(a) The Aircraft shall:
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
2. Check and Part Lives
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to the *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 	 	    	Report Data From	  	 	
Aircraft S/N	 	 	    	Report Data To	  	 	
Type	 	 	    		  		
	 		    		  		
Total Flight Hours	 	 	    	FH Utilization for Period	  	 	
	 		    		  		
Total Cycles	 	 	    	FC Utilization for Period	  	 	
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	 	  	CHECK #	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  	 	  	 	  	 	  	 	  		  	 	A-Check	  	  	 	  	 	  	 	  	 	
C-Check	  	 	  	 	  	 	  	 	  		  	 	C-Check	  	  	 	  	 	  	 	  	 	
D-Check	  	 	  	 	  	 	  	 	  		  	 	D-Check	  	  	 	  	 	  	 	  	 	
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

   	
   	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	   	  	   	
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		 		 		 		

(Lessee)	 		 		 		 		
Title:	 	 	 		 		 		
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Lessor Party][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (“ Lessee ”)
Dated: [     ]
Re: Aircraft Lease Agreement [5212] dated as of June 26, 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number 5212 (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,
[Lessor Party][Security Trustee]	
		
By	 	 	
Name:	
Title:	
 
Schedule 6-1

			
Agreed and Accepted:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	 	
Name:	
Title:	
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement	
DATE:                                              
Aircraft Lease Agreement [5212] dated as of June 26, 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. relating to Airbus A320-233 Aircraft, manufacturer’s serial number 5212 (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at              hours on                 , 20     being the Delivery Date at                    :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$                    ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are V16302 and V16304;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No: 5212:	

Total Flight Hours Since New	  	_______________	
Total Cycles Since New	  	______________	
Flight Hours Since Last C-Check:	  	N/A	
Calendar Months Since Last D-Check	  	N/A	
Flight Hours Since Last D-Check	  	N/A	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5:	

Position	  	1	  	2	
Serial No:	  	V16302	  	V16304	
			
Total Flight	  		  		
Hours:	  		  		
	  	 	  	 	
Total Cycles:	  		  		

Flight Hours since last
Engine Performance Restoration:	  	N/A	  	N/A	

Cycles since last
Engine Performance Restoration:	  	N/A	  	N/A	

Cycles remaining
to next expected
Engine Performance Restoration	  		  		

(c)    APU Model: Honeywell P/N 3800708-1	  		  		
			
Serial No:	  	P-5131	  		
			
Total Flight/APU Hours:	  		  		

Total Cycles:	  		  		

APU]/[Flight Hours since
the APU Heavy Repair:	  		  	N/A	

 	(d)	Landing Gear:	

				
Position	 	LH Main	 	Nose	 	RH Main	
				
Model:
Serial No:	 	Messier Dowty
12MDG2645	 	Messier Dowty
12B12481	 	Messier Dowty
12MDG2676	

Total Flight Hours:	 		 		 		

Total Cycles:	 		 		 		

Flight Hours since
last Landing Gear Overhaul:	 	N/A	 	N/A	 	N/A	

Cycles since
last Landing Gear Overhaul:	 	N/A	 	N/A	 	N/A	

 	(e)	Fuel on Board:                      	
 
Schedule 7-2

 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
June 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN TBD	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
				
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
			
ATA 02 Certification	  		  		
				
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ATA 03 Weights	  		  		
				
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Schedule 8-1

							
ATA 03 Placards and markings	  		  		
				
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	  	Air conditioning	  		  		
				
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ATA 22 Auto Flight	  		  		
				
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Schedule 8-2

							
ATA 23 Communications	  		
				
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ATA 25 Cabin & cockpit	  		
				
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Schedule 8-3

							
				
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Schedule 8-4

							
ATA 29 Hydraulic Power	  		
				
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ATA 31 Indicating/Recording	  		
				
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ATA 32 Landing gear	  		
				
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ATA 33 Lights	  		
				
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ATA 34 Navigation	  		
				
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ATA 35 Oxygen	  		
				
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ATA 38 Water/Waste	  		
				
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ATA 46 ATSU	  		
				
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ATA 47 Inerting Gas System	  		
				
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Schedule 8-5

							
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ATA 49 APU	  		
				
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ATA 51 Structure	  		
				
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ATA 52 Doors	  		
				
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ATA 55 Stabilizers	  		
				
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ATA 56 Windows	  		
				
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ATA 57 Wings	  		
				
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ATA 71 Power Plant—General	  		
				
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ATA 72 Engines	  		
				
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Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
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Schedule 8-6

											
						
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Airline:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Mar-12	
Operator:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	TBD 	
A/C
Type:	 	320-200	  	Issue	  	5	  		  		  		
							
ATA/Item	 	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
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Schedule 8-7

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary, Owner and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
[Reserved]
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY/PODER IRREVOCABLE

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated         , 2012 (the “Lease”) entered it by and between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [            ] dated [            ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha         , 2012 (el “Arrendamiento”) celebrado por y entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [            ] dated [            ] and CRÉDIT AGRICOLE CIB (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Federal Civil Code and its correlative articles of the several Civil Codes ruling in the federal entities of the Mexican United States, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y CRÉDIT AGRICOLE CIB (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los establecido en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil Federal y sus artículos correlativos de los diversos Códigos Civiles que rigen en las entidades federativas de los Estados Unidos Mexicanos, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i)     request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America;	  	(i)     solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del Registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América;	
 
Schedule 11-1

			
(ii)     to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign;	  	(ii)     solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera;	
		
(iii)   to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC;	  	(iii)   solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
		
(iv)    to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located;	  	(iv)    solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre;	
		
(v)     to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located;	  	(v)     realizar todos los trámites necesarios y conducentes para la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave;	
		
(vi)    to notify the termination of the Lease to the RAM or any other relevant authority;	  	(vi)    notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes;	
		
(vii)  to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form;	  	(vii)  realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera;	
		
(viii)  in case of an event of total loss of the Aircraft and/or the Engines (as such term is defined in the Lease), to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases;	  	(viii)  en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores (según dicho es definido en el Arrendamiento), para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación;	
		
(ix)    to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and	  	(ix)    solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y	
		
(x)     to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(x)     delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
		
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ” procedure; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y desistirse de cualquier acción o procedimiento incluidos el juicio de amparo; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y absolver posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.	
 
Schedule 11-2

			
		
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federales, estatales o municipales de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
		
For purposes of this power of attorney, the term “Aircraft” includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término “Aeronave” incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que en un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
		
SECOND.- This Power of Attorney is granted to be exercised within the Mexican United States and/or the United States of America according to the Inter-American Convention on the Legal Regime of Powers of Attorney to be Used Abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	SEGUNDA.- Este poder se otorga para ser ejercitado dentro de los Estados Unidos Mexicanos y/o los Estados Unidos de América de conformidad con la Convención Interamericana del Régimen Legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, la Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
		
THIRD.- This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	TERCERA.- Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH.- Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	CUARTA.- Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil firmado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
 
Schedule 11-3

			
		
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	QUINTA.- La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
		
In terms of Article VI of the Washington Protocol, the Spanish language which appears in this instrument is the authorized translation of the English language which also appears in this instrument, in all of its parts.	  	De conformidad con el Artículo VI del Protocolo de Washington, el idioma español que aparece en este instrumento es la traducción autorizada del idioma inglés que también aparece en este instrumento, en todas sus partes.	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	 	 		 	Por:	 	 	
Name:	 	[•]	 		 	Nombre:	 	[•]	
Title:	 	[•]	 		 	Cargo:	 	[•]	
 
Schedule 11-4

SCHEDULE 12
FORM OF EUROCONTROL LETTER
[PRINT ON LESSEE HEADED PAPER]
DATE                         
The Director of the Central Route Charges Office
European Organisation for the Safety of Air Navigation (EUROCONTROL)
Rue de la Fusée, 96
1130 BRUXELLES
BELGIUM
Dear Sirs
AUTHORISATION LETTER
Aircraft model Airbus A320-200: registration mark N511VL, MSN 5212—the “Aircraft”
We have leased the above Aircraft from Wells Fargo Bank Northwest, National Association (not in its individual capacity, but solely as owner trustee) (the “ Lessor ”) in accordance with a lease agreement dated [ Ÿ ] between us and the Lessor (the “ Initial Sub-Lease ”).
We hereby authorise you to provide the Lessor (or its duly authorised representative) with a general statement of account in relation to air navigation charges incurred by us and due to EUROCONTROL. Access to the statement(s) of account will be provided in accordance with the procedures established by EUROCONTROL.
The authorisation contained in this letter may only be revoked or amended by a written instruction signed by us and the Lessor.
Yours faithfully,
For and on behalf of

[LESSEE]	  		  		
			
 	  	(Name)	  		
			
 	  	(Title)	  		
 
Schedule 12-1

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” *****, such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.

Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).

If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	

The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
*****

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.43
AIRCRAFT LEASE AGREEMENT [A]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 17 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
*****	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	September, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
 
2

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	

Account for payments:	  		 		
			
	  	Transfer To :	 	*****	
			
	  	SWIFT Code :	 	*****	
			
	  	For Credit To :	 	*****	
			
	  	Account No:	 	*****	
			
	  	Sort Code:	 	*****	
			
	  	IBAN:	 	*****	
			
	  	US Correspondent Bank Details:	 	*****	
			
	  	US Correspondent Bank SWIFT Code:	 	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn :     Corporate Trust Department
 
Fax :     (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 17 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn : Contracts Leader
 
Fax : +353 61 706867
 
E-mail : asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma
490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn : Director Juridicio
 
Fax : +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [A]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
 
A-1

EXHIBIT A
 
Exhibit A

****

****

****

****

****

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
	    	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	    	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	    	Certification	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
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*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
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ATA 03	    	Weights	  		  		
*****	    	*****	  	*****	  		
ATA 03	    	Placards and markings	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
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*****	    	*****	  	*****	  		
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*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
	    	Air conditioning	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 22	    	Auto Flight	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 23	    	Communications	  		  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
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*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
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ATA 25	    	Cabin & cockpit	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
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*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 29	    	Hydraulic Power	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
ATA 31	    	Indicating/Recording	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 32	    	Landing gear	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 33	    	Lights	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 34	    	Navigation	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
ATA 35	    	Oxygen	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 38	    	Water/Waste	  		  		
*****	    	*****	  	*****	  		
ATA 46	    	ATSU	  		  		
*****	    	*****	  	*****	  	*****	
ATA 47	    	Inerting Gas System	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 49	    	APU	  		  		
*****	    	*****	  	*****	  		
ATA 51	    	Structure	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 52	    	Doors	  		  		
*****	    	*****	  	*****	  		
ATA 55	    	Stabilizers	  		  		
*****	    	*****	  	*****	  		
ATA 56	    	Windows	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 57	    	Wings	  		  		
*****	    	*****	  	*****	  		
ATA 71	    	Power Plant – General	  		  		
*****	    	*****	  	*****	  	*****	
ATA 72	    	Engines	  		  		
*****	    	*****	  	*****	  		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

		
Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be ***** lbs.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition	  	Any replacement life limited Part installed in the Landing Gear	
Requirements:	  	and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-1

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.
*****
 
D-2

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.44
AIRCRAFT LEASE AGREEMENT [B]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.
The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:

Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 17 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
*****	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	September, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
2

					
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:	 		  		
	 	Transfer To :	  	*****	
			
	 	SWIFT Code :	  	*****	
			
	 	For Credit To :	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent
Bank Details:	  	*****	
			
	 	US Correspondent
Bank SWIFT Code:	  	*****	
 
3

					
Notice Details:	 	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn:     Corporate Trust Department
 
Fax:       (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 17 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [B]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
-Signature Page-
-Aircraft Lease Agreement [B]-

EXHIBIT A

*****

*****

*****

*****

*****

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	  	Certification	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 03	  	Weights	  		 		
*****	  	*****	  	*****	 		
ATA 03	  	Placards and markings	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
	  	Air conditioning	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 22	  	Auto Flight	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 23	  	Communications	  		 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 25	  	Cabin & cockpit	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 29	  	Hydraulic Power	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
ATA 31	  	Indicating/Recording	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 32	  	Landing gear	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 33	  	Lights	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 34	  	Navigation	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
ATA 35	  	Oxygen	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 38	  	Water/Waste	  		 		
*****	  	*****	  	*****	 		
ATA 46	  	ATSU	  		 		
*****	  	*****	  	*****	 	*****	
ATA 47	  	Inerting Gas System	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 49	  	APU	  		 		
*****	  	*****	  	*****	 		
ATA 51	  	Structure	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 52	  	Doors	  		 		
*****	  	*****	  	*****	 		
ATA 55	  	Stabilizers	  		 		
*****	  	*****	  	*****	 		
ATA 56	  	Windows	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
VOI56D001B	  	Installation of dummy windows according to referenced cabin layout	  	X	 		
ATA 57	  	Wings	  		 		
*****	  	*****	  	*****	 		
ATA 71	  	Power Plant – General	  		 		
*****	  	*****	  	*****	 	*****	
ATA 72	  	Engines	  		 		
*****	  	*****	  	*****	 		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-1

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

*****	
*****	 	*****	 		
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*****	
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	 	*****	 	*****
 
*****
 
*****
 
*****
 
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*****

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D-2

																					
	 	*****
 
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*****
 
*****
 
*****	
		
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	 	*****	 	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
											
	 	*****	 	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
											
	 	*****	 		  		  		  		  		  		  		  		  		
											
	 	*****	 	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
											
	 	*****	 	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
		
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*****	
		
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D-3

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.45
AIRCRAFT LEASE AGREEMENT [C]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 19 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
*****	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	October, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
****	  	****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
 
2

					
			
*****	  	As set forth in Schedule D.	  		
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican ****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	
			
Account for payments:	  	Transfer To :	  	*****	
			
	  	SWIFT Code :	  	*****	
			
	  	For Credit To :	  	*****	
			
	  	Account No:	  	*****	
			
	  	Sort Code:	  	*****	
			
	  	IBAN:	  	*****	
			
	  	US Correspondent Bank Details:	  	*****	
			
	  	US Correspondent Bank SWIFT Code:	  	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn:    Corporate Trust Department
 
Fax:      (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 19 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail: sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [C]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.

EXHIBIT A

****

****

****

****

****

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

		
Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
 
B-1

			
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

*****	
*****	  	*****	
*****	  	*****	
*****	
*****	  	                             *****	
*****	  	*****	
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	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  		  		  		  		  		  		  		  		  		  		
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	
 
D-1

																					
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
D-2

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.46
AIRCRAFT LEASE AGREEMENT [D]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 19 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
 
1

			
State of Registry:	  	means the United States of America.	
		
*****	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	November, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
 
2

					
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	
		
Account for payments:	  	Transfer To: *****
 
SWIFT Code: *****
 
For Credit To: *****
 
Account No: *****
Sort Code: *****
 
IBAN: *****
 
US Correspondent
Bank Details: *****
 
US Correspondent
Bank SWIFT Code: *****	
			
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association, as
Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 19 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma
490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
	  	Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  		
 
3

ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
4

IN WITNESS WHEREOF , the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	  	 	  	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A., not in its individual capacity, but solely as Owner Trustee under the Trust Agreement	  		  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	  	/s/ David Wall	  		  	By:	  	/s/ Mario E. Geyne	
Name:   David Wall	  		  	Name:   Mario E. Geyne	
Title:   Assistant Vice President	  		  	Title:   Financial and Fleet Planning Director	
Signed at:   Utah	  		  	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [D]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
 
A-1

EXHIBIT A

-Exhibit A-

****

****

****

****

****

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
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ATA 03	  	Weights	  		  		
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ATA 03	  	Placards and markings	  		  		
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	  	Air conditioning	  		  		
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ATA 22	  	Auto Flight	  		  		
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ATA 23	  	Communications	  		  		
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Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
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ATA 25	  	Cabin & cockpit	  		  		
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ATA 29	  	Hydraulic Power	  		  		
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Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
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ATA 32	  	Landing gear	  		  		
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ATA 33	  	Lights	  		  		
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ATA 34	  	Navigation	  		  		
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ATA 35	  	Oxygen	  		  		
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ATA 38	  	Water/Waste	  		  		
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ATA 46	  	ATSU	  		  		
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ATA 47	  	Inerting Gas System	  		  		
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ATA 49	  	APU	  		  		
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ATA 51	  	Structure	  		  		
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ATA 52	  	Doors	  		  		
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ATA 55	  	Stabilizers	  		  		
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ATA 56	  	Windows	  		  		
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ATA 57	  	Wings	  		  		
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ATA 71	  	Power Plant – General	  		  		
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ATA 72	  	Engines	  		  		
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Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be ***** lbs.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
(a) Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:
(i) the Aircraft will be located outside the United States more than ***** percent of the time; or
(ii) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
(b)(i) Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.
(ii) Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U.S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

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D-2

			

 

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.47
Agreement
on
Technical Services for A319/A320 Aircraft

between	  	Concesionaria Vuela Compañía de Aviación
S.A.P.I. de C.V.
Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13
Col. Zedec Santa Fe
01210, México D.F., México
(hereinafter referred to as VOLARIS)	
		
and	  	Lufthansa Technik AG
Weg beim Jäger 193
22335 Hamburg
Germany
(hereinafter referred to as LHT	

	  	- 1 -	  		

			

 
 
Contents
BASIC AGREEMENT

Preamble	  	 	5	  	
		
1 SCOPE OF AGREEMENT	  	 	6	  	
		
2 Definitions and Abbreviations	  	 	7	  	
		
3 Cooperation between the Parties and Responsibilities towards the Airworthiness Authorities/ Third Parties / manage/m™	  	 	13	  	
		
4 Subcontracting	  	 	16	  	
		
5 Turnaround Time, Performance Date	  	 	17	  	
		
6 Prices and Price Adjustment	  	 	18	  	
		
7 Payment Terms	  	 	20	  	
		
8 Security for payment	  	 	23	  	
		
9 Quality and Warranty	  	 	24	  	
		
10 Delivery and Redelivery	  	 	26	  	
		
11 Liability and Indemnification – Insurance	  	 	27	  	
		
12 Term and Termination	  	 	28	  	
		
13 Confidentiality, No Transfer of Intellectual Property Rights	  	 	29	  	
		
14 Notices and Communication	  	 	31	  	
		
15 Law and jurisdiction	  	 	32	  	
		
16 Miscellaneous	  	 	34	  	

Basic Agreement	  	- 2 -	  	Execution Version	

			

 
 
ATTACHMENTS / ANNEXE

Basic Agreement	  	- 3 -	  	Execution Version	

			

 
 
BASIC AGREEMENT

Basic Agreement	  	- 4 -	  	Execution Version	

			

 
 
This Agreement is made and entered into as of this xx day of June, 2012 , between Concesionaria Vuela Compañia de Aviación S.A.P.I. de C.V., a company organized under the laws of Mexico having its registered offices at Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, 01210 Mexico City, Mexico (hereinafter referred to as “Volaris”) and Lufthansa Technik AG, a company incorporated under the Laws of the Federal Republic of Germany, having its registered offices at Weg beim Jäger 193, 22335 Hamburg, Germany (hereinafter referred to as “ LHT ” or “ Lufthansa Technik ”)
Preamble
WHEREAS LHT is a corporation in the business of providing aircraft-related technical services, such as, but not limited to, the Maintenance of aircraft, Engines and Components and is duly authorized and certified in accordance with the EASA Part-145, EASA Part 21, and FAA Part-145 requirements and/or aviation requirements of certain other authorities; and
WHEREAS Volaris wishes to have certain aircraft-related Services performed by LHT in accordance with such standards and experience and in accordance with the relevant provisions hereof, and
WHEREAS LHT wishes to perform such Services for Volaris in accordance with LHT’s quality standards and experience and as described herein.
NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and in connection of mutual promises and covenants set forth hereunder, Volaris and LHT agree upon the following:

Basic Agreement	  	- 5 -	  	Execution Version	

			

 
 
1 SCOPE OF AGREEMENT
The Basic Agreement sets forth the general terms of the contractual relationship between LHT and Volaris and the provisions contained herein shall apply to any Attachments, Annexes or any other documents referencing or amending this Agreement.
The Services to be provided by LHT are defined and specified in the respective Attachments. They shall be performed under applicable aviation Authority approvals or the applicable aviation Authority approvals of LHT’s Subcontractors in accordance with the respective Maintenance Data and in accordance with the terms and conditions of this Agreement.
Capitalized terms used in this Basic Agreement shall have the meaning ascribed to them in Article 2 and – to the extent used in one of the Attachments – shall have an identical meaning throughout the entire Agreement, unless otherwise defined with reference to the deviation in the respective Attachment.

Basic Agreement	  	- 6 -	  	Execution Version	

			

 
 
2 DEFINITIONS AND ABBREVIATIONS
The following terms, expressions and abbreviations shall have the following meanings:
 
Agreement	This Basic Agreement, and all Attachments and General Annexes, all as the same may be modified, supplemented or amended from time to time in accordance with the provisions hereof.	
 
Airworthiness	An aircraft or Component is airworthy if it conforms to the applicable approved type, i.e. if it complies with the valid type certificate data sheet and if the Maintenance was carried out in accordance with the applicable Maintenance requirements and if the aircraft or Component was released to service and, in each case, complies with the requirements of the applicable airworthiness Authorities.	
 
AAR/AD	Any mandatory aviation authority requirement, including, but not limited to FAA Airworthiness Directives, EASA Airworthiness Directives, LBA “Lufttuechtigkeitsanweisungen”, DGAC “Consignes de Navigabilités” and Mexican DGAC directives and other mandatory orders.	
 
AOG	Aircraft on Ground.	
 
APU	Auxiliary Power Unit.	
 
APU	Operating Hour	
Each full or partial hour that the APU is in operation.
 
ATA 300	Air Transport Association specification 300.	
 
Attachments	All specific attachments with corresponding annexes, side letters and any other mutually agreed documents referencing this Agreement that state to be a part of this Agreement.	
Attachment Assumptions
Has the meaning set forth in Article 6.3.1.
 
Authority	Either the approving authority(ies) of the aircraft operator or the approving authority of the Maintenance organization, production organization, design organization and/or the continuing airworthiness management organization or, as the context requires or permits, both.	
Base Maintenance
All scheduled Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.

Basic Agreement	  	- 7 -	  	Execution Version	

			

 
 
Basic Agreement
This document has the meaning set forth in Article 1.
 
Beneficiary	Has the meaning set forth in Article 13.3.	
 
BER	Beyond Economic Repair	
 
Business Day	Any Day on which banks are open in Hamburg, Germany, Mexico City, Mexico and, in relation to payments, New York, New York.	
CLP                     In respect of any Component, the Catalog List Price for such Component most recently published by the original equipment manufacturer for such Component.
 
Components	Devices, modules or individual parts of an aircraft, including Engines, flight equipment and/or emergency equipment. They are always identified by a part number in the Maintenance or operational documents issued by the respective aircraft or Component design organization.	
Confidential Information
Has the meaning set forth in Article 13.1.
 
Consumables	Semi-finished products such as metal or plastic sheets or profiles, etc., fluids such as cleaning agents, pickling agents, primers, paints, etc. for surface treatment, adhesives, additional material for welding or plasma jet welding or other material or additives such as lubricants or fuels that are used for Maintenance or operation of aircraft or Components. They are distinguished from Components or Standard Parts in that they can never be used without processing. They are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by a design organization.	
 
CRS	Certificate of release to service	
 
CSN	Cycles Since New; means the aggregate number of Flight Cycles of an aircraft or an Engine, as applicable, since its manufacturing date.	
Data Release Agreement
An agreement in the form as attached to this Agreement signed by Volaris and by which Volaris authorizes Airbus to give LHT access to customized data included in the Airbus On-Line Services subject to the applicable rules and limits imposed by Airbus.
 
Day	Calendar day	
 
Delivery	The act of Volaris giving LHT possession of an aircraft, Engine or a Component to be serviced.	
 
DGAC	The French Direction Générale de l’Aviation Civile	

Basic Agreement	  	- 8 -	  	Execution Version	

			

 
 
DOD	Domestic Object Damage; damage of Material caused by objects which are part of the damaged aircraft or Engine.	
 
EASA	European Aviation Safety Agency also being the approving authority of the LHT design organisation and for each European STC (if applicable and/or required).	
 
Engine	A basic engine assembly and its accessories.	
Engine Flight Hour
Each full or partial hour that the Engine is in operation.
Excluded Taxes
shall mean Taxes based on income, capital gains, net worth or property payable by LHT or any subcontractor or affiliate of LHT to any tax authority in Germany or any other jurisdiction in which LHT, or any of its subcontractor(s) maintains a place of business or permanent establishment; (b) Taxes of any nature which are not directly related to the services rendered Volaris hereunder or the presence of any Component in the taxing jurisdiction; (c) Taxes of any nature to the extent the same relate to services or goods provided to any other person or entity other than Volaris; Taxes for which LHT, any affililate or subcontrator becomes liable by reason of its willful misconduct, or gross negligence or breach of agreement or as a result of any failure to file any tax or similar return or declaration in a timely mannerExpendable                     An item for which no authorized repair procedure exists and for which standard cost of repair exceeds cost of replacement, including Standard Parts. Expendable inventory is controlled by quantity and its scrapped after removal.
Fixed Price (F/P)
A predetermined price or a fee for Services in accordance with Article 7.2.
 
Flat Rate (F/R)	A price or fee for Services on a recurring reference, e.g. ‘Flight Hour’, in accordance with Article 7.1.	
 
Flight Cycle	One take-off and landing event.	
 
Flight Hour	Each hour that the aircraft is airborne.	
 
FOD	Foreign Object Damage, any damage to an aircraft, Engine or other aircraft part that is caused by any external impact, including, but not limited to, objects which are not part of such aircraft, Engine or other aircraft part (other than as a result of any act or omission of either Party, any of its affilates, subcontracors or employees or agents which constitute the negligence or willful misconduct of either Party or any of its affliates, subcontractors, employees or agents) and/or lightning.	
General Annex
Those documents named General Annexes and attached to this Agreement.

Basic Agreement	  	- 9 -	  	Execution Version	

			

 
 
Interchangeability
Means that design, function and characteristics of a certain Component or part are sufficiently alike to be replaceable with each other under applicable Airworthiness laws and regulations, in the understanding that PMA Parts are not allowed..
 
JPM	Joint Procedures Manual.	
 
Layover Period	Any downtime of an aircraft during which Maintenance of aircraft, aircraft Parts, Engine or Components is performed.	
 
LBA	The German Luftfahrtbundesamt.	
Line Maintenance
All routine Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.
 
LLP	Life Limited Parts	
 
LRU	Line Replaceable Unit: Component which can be readily changed on an aircraft during Line Maintenance operations.	
 
Maintenance	One or a combination of the following actions: Overhaul, repair, inspection, testing, replacement, modification or rectification of discrepancies on an aircraft, an Engine or a Component.	
Maintenance Data
Approved data for an aircraft or Component which has been issued by the design organization which has developed the aircraft or Component or another approved design organization, such as, but not limited to, LHT as EASA Part 21/J, FAA and Mexican DGAC approved design organisation, to define the extent of Maintenance to be performed on an aircraft or a Component.
Maintenance Program
A Maintenance program that has been approved by the authority of the country of aircraft registration.
 
manage/ m ™	Has the meaning set forth in Article 3.5.	
 
Material	Components, Consumables, Expendables and Raw Material, in each case meeting the requirements of this Agreement and any and all requirements and standards of the National Authority, the FAA and EASA, as applicable.	
Mexican DGAC
The Direccion General de Aeronautica Civil of the United Mexican States

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Minimum Flight Hours
A certain number of Flight Hours during a certain period, agreed between the Parties for the purposes of calculating the minimum Flat Rate payment by Volaris.
 
Modification	The alteration of the aircraft, any Material or other aircraft-related part, such as Components, Engines, APU’s or LDG’s in conformity with an approved standard.	
 
MRO	Maintenance Repair Organization	
 
NAA	National Aviation Authority means the approving Authority of the aircraft operator, as applicable.	
 
OEM	Original equipment manufacturer.	
OEM Catalog List Price
The most current OEM Officially Published Catalog List Price, without any discount or reductions, made public and available to any customer.
 
Party/Parties	LHT or Volaris / LHT and Volaris collectively.	
Planned Flight Hours
The estimated number of Flight Hours during a certain period as agreed between the Parties for the purposes of calculating Volaris’s Flat Rate payment.
 
Raw Material	Semi-finished products such as metal or plastic sheets or profiles, etc. Raw Materials are distinguished from Components in that they can never be used without processing and are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by a design organization.	
 
Redelivery	The act of LHT giving Volaris possession of an aircraft, Engine or a Component.	
Release to Service
The issuance of a CRS by the Maintenance organization approved by the responsible Authority confirming, unless otherwise specified, that the Maintenance Services listed therein have been carried out in conformity with the applicable requirements (e.g. EASA Part-145, FAA Part-145, the National Authority requirements) by appropriate authorized personnel of the Maintenance organization and in accordance with the applicable Maintenance organization exposition, and that the aircraft or Component has been released to service.
 
SB	Service Bulletin.	
Serviceable Condition
The status required for the issuance of a CRS.
 
Services	The work to be performed by LHT as agreed in the Attachments	

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Standard Parts	Individual parts that are identified by a standard rather than by a part number in the Maintenance or operational documents issued by the respective aircraft or aircraft Component design organization or any other approved design organisation, such as but not limited to, LHT as an EASA Part 21/J approved design organisation.	
Standard OEM Warranty
The warranty that is given by the OEM of the Material concerned to any customer according to its published warranty terms.
 
STC	Supplemental type certificate.	
 
Subcontractor	Any person, legal or natural (other than employees of LHT and Suppliers), engaged by LHT to support LHT in the performance of its obligations under this Agreement.	
 
Supplier	Any person, legal or natural, supplying Material to a Party, the manufacturing of which is not such Party’s own contractual obligation vis-à-vis the other Party under this Agreement, e.g. off-the-shelf-parts or OEM parts and documentation.	
 
Taxes	Any and all present and future taxes, duties, withholdings, levies, assessments, imposts, fees and other governmental charges of all kinds (including without limitation, any value added or similar tax and any stamp, documentary, registration or similar tax) and any amount treated as such whenever created or imposed and whether of the government of Germany or elsewhere and whether imposed by a local, municipal, governmental, state, federal or other body and, will include, without limitation, all fines, penalties, costs, charges and expenses payable in connection with any failure to pay or delay in paying the same (except and to the extent that any such fines, penalties, costs, charges and expenses arise as a result of acts or omissions or delay of LHT, any affiliate or subcontractor) but not “Excluded Taxes” and references to “Taxes” will be construed accordingly.	
 
TC	Type certificate.	
Time and Material
A price or fee for Services based on 1. the applicable man-hour and / or machine-hour rates for the actual time spent and 2. the applicable prices for the Material spent, in accordance with Article 7.3.
 
TSN	Time Since New; means the aggregate number of Flight Hours of an aircraft or an Engine or APU Operating Hour, as applicable, since its manufacturing date.	
Turnaround Time / TAT
The period of time between scheduled Delivery and Redelivery, unless expressly otherwise stated in an Attachment.
Value Added Tax
Sales tax or value added tax on any goods and services, sales or turnover tax, taxes on the importation of goods, customs duties, imposition or levy of a like nature including, without limitation, value added tax payable under the German VAT Act 1993 as amended or supplemented from time to time.

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3 COOPERATION BETWEEN THE PARTIES AND RESPONSIBILITIES TOWARDS
THE AIRWORTHINESS AUTHORITIES/ THIRD PARTIES / MANAGE/M™
 
3.1	Communication	
The Parties agree to establish a communication system and to define meetings and points of contact in order to enable Volaris and LHT to comply with their mutual obligations under the applicable Airworthiness regulations.
 
3.2	Liaison Person	
Each Party shall nominate at least one person to secure the necessary liaison between Volaris and LHT.
 
3.3	Responsibility towards the Authorities/ Third Parties	
Notwithstanding LHT’s obligations under this Agreement, Volaris shall be solely responsible for Volaris’ compliance with all applicable requirements imposed by any Authority or government agency or instrumentality. LHT shall grant Volaris access to any and all necessary information concerning LHT’s compliance with EASA-requirements, FAA-requirements and NAA-requirements, as applicable, in order for Volaris to exercise its Airworthiness responsibility and obtain and maintain, in accordance with applicable law and on a timely basis, all Airworthiness certifications which are required under EASA, FAA.
For the avoidance of doubt this Agreement does not affect the contractual relationship between Volaris and third parties. Volaris shall remain the prime contractor in relation to the aircraft and Components manufacturers or to the lessor, if applicable, of the aircraft and Components.
In particular, LHT shall not have the responsibility towards the Authority or the manufacturer or other Supplier to follow-up manufacturer’s and other Supplier’s SBs or AARs issued by the respective Authority unless otherwise stipulated herein.
Notwithstanding the foregoing, LHT shall cooperate reasonably with Volaris in connection with Volaris’ compliance with all covenants and obligations of Volaris affecting Maintenance and redelivery of Aircraft, Engines and Components including, without limitation, all information, reporting and inspection covenants and obligations.
 
3.4	Maintenance Data	
 
3.4.1	Responsibility of Volaris for supply of Maintenance Data	
Volaris shall provide to LHT the required Maintenance Data no later than on the date specified in the Attachments and ensure that the Maintenance Data reflect the current status of the respective aircraft, Engine or Component.

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If Volaris does not provide Maintenance Data on time or if such Maintenance Data does not reflect the current status of the respective aircraft, Engine or Component, and provided LHT has complied with its obligations under this Section 3.4.1, LHT may, but is not obliged to take appropriate actions to collect Maintenance Data to be able to start or continue performing the agreed Services.
 
3.4.2	Right to access and use Maintenance Data	
Volaris will make reasonable commercial efforts to provide LHT a non-exclusive, royalty-free license, limited to the services performed under this Agreement (including the right to grant sublicenses to LHT’s Subcontractors) to use all trade secrets and copyrights belonging to Volaris and related to the Maintenance Data solely for the purposes of performing the Services under this Agreement. LHT shall ensure that such trade secrets and copyrights related to such Maintenance Data are used solely for the purposes of performing its obligations or, the the case of a Subcontractor, such Subcontractor’s obligations under this Agreement.
Volaris shall make reasonable commercial efforts to ensure that LHT can access Maintenance Data electronically. To the extent LHT and the respective OEM have an agreement regarding LHT’s access and use of such data, Volaris shall, at no cost to Volaris, comply with any reasonable requirements of LHT and the OEM to secure access to such data. Volaris shall in particular execute upon LHT’s request all necessary agreements (e.g. the MRO Airbus World Data Release Agreement, if applicable).
 
3.4.3	Cost for provisioning and access to Maintenance Data	
Any cost, expenses, royalties or other charges, incurred by LHT or LHT’s Subcontractors in connection with the provisioning, access and use of any Maintenance Data shall be borne by the Party as agreed in the respective Attachment.
 
3.5	manage/m™	
To the extent stated in the Attachments, LHT provides a web-based Technical Operation Websuite (“ manage/ m ™ ”) for certain Services. manage/ m ™ enables Volaris to establish and manage its core operation functions relating to those Services on a web-based system and supports Volaris in the fulfilment of its obligations towards the Authorities as an aircraft operator.
 
3.6	Reporting of failures, malfunctions or defects attributable to LHT originated design	
If in the course of operation a failure, malfunction or defect or other occurrence, which causes or might cause adverse effects on the continuing airworthiness of the product, part or appliance and if such are attributable to or otherwise result from an LHT originated design change, arises, Volaris shall notify the LHT Office of Airworthiness HAM TT/L without unreasonable delay under Fax-No. +49 40 5070 4855 or E-mail: hamtolmus@lht.dlh.de or mobile no. +49 172 4044 238.

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Such notification shall include all reasonable and relevant details, e.g. operating conditions, flight hour and cycle information of the affected product and other data allowing LHT to investigate such failure, malfunction or defect to the LHT attributable design change and establish corrective action, as necessary.
LHT shall inform Volaris and all involved authorities on any known unsafe condition resulting from a LHT design, as required by FAA and/or in EASA Part 21A.3.

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4 SUBCONTRACTING
 
4.1	LHT may subcontract Services to any other EASA//FAA/NAA-approved Maintenance facility.	
The Services provided by LHT may be subcontracted to any other Maintenance facility to which LHT’s Authority approved management system has been extended. LHT may, subject to all applicable provisions hereof, provide a Subcontractor with such information about Volaris that is required to perform the subcontracted Services.
 
4.2	LHT shall inform Volaris about any engagement of a Subcontractor and shall supply Volaris with relevant information about the Subcontractor. Subcontracting of a Base Maintenance check of an aircraft or a complete workshop Maintenance check or overhaul of an Engine shall be subject to Volaris’ prior written approval.	
 
4.3	The engagement of a Subcontractor shall not affect LHT’s obligations, including, without limitation, warranty obligations as stipulated in Article 9, vis-à-vis Volaris under this Agreement and LHT shall remain fully responsible for the timely and proper performance of such obligations.	

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5 TURNAROUND TIME, PERFORMANCE DATE
 
5.1	The Parties agree that the required Turnaround Times orand other performance dates and time limits are set forth in Attachments to this Agreement.	
 
5.2	*****	
 
5.2.1	*****	
 
5.2.2	*****	
 
5.2.3	*****	
 
5.2.4	*****	
 
5.2.5	*****	
 
5.2.6	*****	
 
5.3	*****	

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6 PRICES AND PRICE ADJUSTMENT
 
6.1	Prices	
The applicable prices for the Services and Material are specified in the Attachments (and corresponding Annexes) to this Basic Agreement.
 
6.2	Escalation	
Unless expressly otherwise stated in the relevant Attachments all prices shall be revised and automatically adjusted *****
The prices have been calculated assuming that the Services involve a certain Material and labor element. The ratio of that labor and Material element is set forth in the applicable Attachment..
 
6.2.1	The portion of the prices corresponding to the labor portion of the Services shall be adjusted in accordance with *****	
*****
*****
*****
*****
*****
*****
*****
*****
*****
 
6.2.2	The portion of the prices corresponding to the Material portion of the Services shall be adjusted in accordance *****.	
 
6.2.3	Volaris hereby accepts any adjustment made in accordance with article 6.2.	
 
6.3	Changes of Assumptions	
 
6.3.1	In the event that *****	
 
6.3.2	*****.	
 
6.4	Taxes	
 
6.4.1	All prices under this Agreement are exclusive of any Value Added Tax or similar tax on the sale of goods or services, which tax, if any, will be payable by Volaris in addition thereto and at the same time. Subject to this Article 6.4.1, all payments made by Volaris under this Agreement shall be made gross without any tax deductions or withholdings of a similar nature.	

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6.4.2	If Volaris is required by law to make any deduction or withholding of any Tax from any payment hereunder, it shall do so and the sum due from Volaris in respect of such payment will be increased to the extent necessary to ensure that, after the making of such deduction or withholding, LHT receives and retains (free of any liability in respect of any such deduction or withholding) a net sum equal to the sum it would have received and retained had no deduction or withholding been required to be made.	
 
6.4.3	LHT shall be responsible for Excluded Taxes Volaris shall assume full responsibility for and indemnify and hold harmless LHT on LHT’s demand from and against any and all Taxes and customs duties of any nature whatsoever which may arise from this Agreement and the transaction, contemplated hereby. In the event any such Taxes or customs duties are recoverable, LHT shall use reasonable efforts to recover such Taxes or customs duties paid.	

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7 PAYMENT TERMS
As consideration for LHT’s Services under this Agreement, the Parties may agree on Flat Rate payments, Fixed Price payments or prices calculated on a Time and Material basis.
 
7.1	Flat Rates	
To the extent that the Parties agree upon “ Flat Rate ” payments for certain Services in the Attachments, the following shall apply:
 
7.1.1	Volaris shall pay to LHT the Flat Rate payment ***** or, if such Day is not a Business Day, on the last Business Day preceding such Day.	
 
7.1.2	In the event that a Flat Rate is based on Flight Hours, the Parties shall agree upon a number of Planned Flight Hours and Minimum Flight Hours in the relevant Attachment. The monthly Flat Rate payment of Volaris shall be based on the Planned Flight Hours of the respective month.	
 
7.1.3	Volaris shall supply LHT with the monthly Flight Hours and monthly Flight Cycles once per month.	
 
7.1.4	*****	
 
7.1.5	*****	
 
7.1.6	This Article 7.1 shall apply respectively in the event that the Flat Rate is not based on Flight Hours but on Engine Flight Hours or APU Operating Hours or any other recurring reference.	
 
7.2	Fixed Prices	
To the extent that the Parties agree upon “ Fixed Prices ” for certain Services in the Attachments, the following shall apply:
 
7.2.1	Volaris shall pay the Fixed Price *****.	
 
7.2.2	*****	
 
7.3	Pricing on the basis of Time and Material	
To the extent that the Parties agree upon pricing on the basis of “ Time and Material ” for certain Services in the Attachments, the following shall apply:
 
7.3.1	*****	
 
7.3.2	In deviation to article 7.3.1, for payments exceeding an amount of *****.	
 
7.3.2.1	LHT may issue a supplementary invoice for any actually performed Services not included in the aforementioned invoice. This supplementary invoice shall be issued within ***** after Redelivery and be paid within ***** from *****.	
 
7.4	Other pricing terms / Invoicing	

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7.4.1	Any other charges calculated on a monthly basis shall be payable *****.	
 
7.4.2	LHT shall be entitled to dispatch all invoices electronically (e-billing) by e-mail or via upload to Volaris’s server. This will not yet apply for settlement via IATA Clearing House. Special requirements concerning e-billing in Volaris’s country (e.g. verification, archiving) have to be fulfilled by Volaris. In case LHT dispatches the invoices by e-mail the e-mail shall contain the invoice as well as related documentation, if any, and shall fully substitute a hard copy invoice. All such electronic invoices shall be dispatched to the below e-mail address of Volaris. Volaris’s mailbox shall have a capacity to receive e-mails up to 5 MB in size and be permanently accessible. To the extent that Volaris provides LHT with the required digital key, LHT will send electronic invoices by encrypted e-mail. Volaris names the following contact person in the event of any transmission problems: *****.	
 
7.5	LHT Bank Accounts and Address for Payments by Check	
 
7.5.1	Payments by bank transfer to LHT in EURO shall be made to:	
*****
or
Lufthansa Technik AG
*****
 
7.5.2	Payments by bank transfer to LHT in United States dollars shall be made to:	
Lufthansa Technik AG
*****
 
7.5.3	In case of payments to LHT by check drawn on a US-Bank, the check shall be sent by first class mail to:	
*****
*****
*****
 
7.5.4	*****	
 
7.6	Disputes	
 
7.6.1	Any dispute of Volaris with regard to a payment obligation shall not affect Volaris’s obligation to make payment of the undisputed part of such payment obligation. Such dispute must be made in writing, stating the date and number of the concerned invoice, the reason for Volaris’s objection and the disputed amount.	
 
7.6.2	In case of a dispute LHT and Volaris shall negotiate in good faith to resolve such dispute within *****.	

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7.6.3	If such dispute is resolved in favour of LHT, Volaris shall pay to LHT the amount determined by such negotiations within ***** after the end of negotiations. Such dispute shall have no impact on the initial due date.	
 
7.6.4	Volaris agrees that any dispute with regard to a payment obligation and any claim for reimbursement shall be made within ***** after the respective Services have been performed. Volaris shall be precluded from raising any such dispute or claim if not made within this period.	
 
7.7	Late Payment Charge	
 
7.8	Should Volaris fail to make any payment when due hereunder, such amount shall bear interest at the rate of ***** per annum from the date due until but exclusive of the date when paid.	

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8 SECURITY FOR PAYMENT
 
8.1	Transfer of title	
Title to all Material supplied by LHT under this Agreement shall remain with LHT until complete payment of all amounts due under this Agreement.For avoidance of doubt, title of Materials provided by Volaris shall remain with Volaris until such point.
 
8.2	Volaris security	
Volaris shall provide LHT with an unconditional and irrevocable stand-by letter of credit in the amount as specified in the respective Attachment, securing all amounts due and payable to LHT. Any cost and fees associated with such bank guarantee shall be borne by Volaris.
LHT is not required to commence or continue Services until such security is provided.
 
8.3	Retention right / lien	
In the event that Volaris fails to comply with its payment obligations under this Agreement, LHT has by virtue of its Services performed a contractual right of retention and a contractual lien with respect to the serviced item of Volaris in its custody as well as with respect to other items of Volaris in LHT’s custody to secure any undisputed claims of LHT against Volaris arising out of and/or in connection with the payment for Services performed under this Agreement as well as to secure any claims of affiliates of LHT against Volaris. These rights as well as a set-off right may also be claimed for amounts due and owing in respect of Services performed or Material supplied by LHT to Volaris under and in accordance with the requirements of this Agreement previously. *****
*****

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9 QUALITY AND WARRANTY
 
9.1	Quality	
 
9.1.1	LHT shall perform all Services under this Agreement in accordance with LHT’s Authority approved management system and in conformity with all requirements of the FAA, EASA and the National Authority.	
 
9.1.2	Upon prior written request by Volaris to LHT, Volaris, the NAA and the FAA shall have the right to perform quality audits of LHT’s organization. If the audit refers to an LHT’s Subcontractor, Volaris will request LHT to perform such audit. In the event that such audit leads to any objections, the Parties shall meet and discuss appropriate remedies to reinstate compliance with LHT’s Authority approved management system, and /or (as applicable) to effectuate compliance with the requirements of EASA, the FAA and the National Authority.	
 
9.2	Warranty	
 
9.2.1	Subject to the limitations of Article 9.2.2, LHT warrants that all Services performed and all Material manufactured by LHT or its Subcontractors shall be free from defects in workmanship and shall in all material aspects comply with the quality system described in Article 9.1.	
 
9.2.2	The warranty is limited as follows, unless expressly agreed otherwise in the Attachments:	
9.2.2.1 A defect shall only be subject to warranty if it arises within ***** or within ***** whichever may occur first.
9.2.2.2 A warranty claim must be raised by Volaris within ***** after the defect has become reasonably apparent and LHT must be provided with the defective part for inspection and repair within an additional ***** after the warranty claim has been raised. If a defect arises on a non-removable part of an aircraft the Parties shall in good faith agree how to remedy such defect in a way convenient for Volaris and reasonably acceptable for LHT.
9.2.2.3 LHT does not warrant any defect in Material not manufactured by LHT or a Subcontractor or services not provided by LHT or a Subcontractor.
For such Material or services not covered by this warranty any assignable rights to warranty granted to LHT by its Suppliers shall be assigned to Volaris. LHT shall support Volaris in pursuing such warranty claim.
9.2.2.4 The defective part must not have been serviced, repaired, overhauled, maintained or modified by anyone other than LHT or its Subcontractors unless otherwise agreed.
9.2.2.5 If upon Volaris’ special request LHT or its Subcontractors perform a provisional repair the Material installed and the Services performed during such repair are not subject to warranty.

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9.2.2.6 Material must at all times have been stored, handled and operated in accordance with manufacturer’s published recommendations.
 
9.2.3	LHT shall correct any defect covered by this warranty at its own cost and expense at one of its technical facilities or at any other place Volaris and LHT may agree upon from time to time. In such case Volaris shall arrange at its own risk and expense for the removal and the transport of the defective parts to and from the location where the repair shall be made and for the reinstallation of the respective parts.	
 
9.2.4	*****	
 
9.3	Flat Rate Agreement	
 
9.3.1	Defective Services or Material covered by a Flat Rate agreement shall be corrected without reference to Articles 9.2.1 to 9.2.3, unless otherwise agreed in the Attachments.	
Upon termination of such Flat Rate agreement the remedy contained in Article 9.2.3 shall be fully available to Volaris under the terms and conditions stated in Article 9.2. In such case the time periods stated therein shall begin at the date an aircraft, Engine or Component was last redelivered to Volaris.
 
9.3.2	The Parties agree that any warranty claim of Volaris against its Suppliers as well as any other comparable credits or benefits relating to Services and an aircraft, Engine or Material covered by a Flat Rate shall be to the benefit of LHT.	
Volaris hereby assigns its claims relating to such warranties, credits or benefits to LHT and undertakes to transfer any proceeds, credits or benefits obtained directly from its Supplier to LHT. Volaris shall make any further declarations eventually necessary to effect such assignment and/or transfer; Article 9.4 shall apply respectively. In the event that LHT is legally or otherwise prevented from pursuing any assigned claims directly, Volaris shall pursue such claims in close cooperation with LHT and any corresponding proceeds shall be passed on to LHT.
 
9.3.3	Volaris further guarantees to LHT that any aircraft or Material serviced by LHT under a Flat Rate agreement is at least covered by a Standard OEM Warranty and that LHT will be able to obtain the benefit of such Standard OEM Warranty.	
 
9.4	Warranty Handling	
In the event that Volaris either assigns warranty claims to LHT for enforcement in LHT’s name or appoints LHT as an agent for the administration of warranty claims for enforcement on Volaris’s behalf, the Parties shall confirm such assignment or appointment by completing and signing General Annex Warranty Handling or any other appropriate documentation provided by LHT. Volaris shall make available to LHT any documents and information required to administer and enforce the respective claims.

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10 DELIVERY AND REDELIVERY
 
10.1	Terms of Delivery and Redelivery	
Unless otherwise agreed herein, the Delivery and Redelivery terms shall be set forth in the Attachments.
 
10.2	Shipping arrangements	
Volaris may request that LHT supports Volaris in arranging for shipment of the Material or aircraft concerned. Any shipment arrangements made by LHT shall be in accordance with the Incoterms set forth in the Attachments, if no such Incoterms are stated in the Attachments, shipment arrangement made by LHT shall be in the name and on behalf of Volaris.
 
10.3	CRS / Acceptance Certificate	
Upon completion of the Services and at the latest upon Redelivery, LHT and/or its authority approved Subcontractor, as the case may be, shall issue and provide to Volaris a CRS, unless Volaris issues the CRS through its own approved organization.
Upon Redelivery, Volaris shall sign and provide to LHT a document of acceptance to confirm that the agreed Services have been completed in accordance with this Agreement or stating any objections. In the event that the aforementioned signed document is not provided to LHT prior to or upon Redelivery, the Services shall be deemed to have been completed as agreed.
 
10.4	Packaging	
Any Material shall be packed for shipment using appropriate shipping containers that are in compliance with ATA 300 specification. To the extent that shipping containers are provided by LHT Volaris shall return such reusable shipping containers to LHT after Redelivery within ten (10) Business Days unless otherwise agreed in writing.

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11 LIABILITY AND INDEMNIFICATION – INSURANCE
 
11.1	Liability and Indemnification	
 
11.1.1	Each Party will be liable towards the other Party for damage to or loss of property and for the injury to or death of any person caused by the gross negligence or the willful misconduct of its directors, officers, employees, agents or Subcontractors in connection with or as a result of the Services rendered under this Agreement.	
 
11.1.2	LHT will indemnify and hold harmless Volaris, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damage, loss, injury or death caused by the gross negligence or the willful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.	
 
11.1.3	Volaris will indemnify and hold harmless LHT, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damages, loss, injury or death unless such damage, loss, injury or death is caused by the gross negligence or the willful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.	
 
11.1.4	*****	
 
11.1.5	*****	
 
11.2	Insurance	
 
11.2.1	During the term and for a minimum period of ***** after the termination or expiration of this Agreement Volaris will effect and maintain and will provide LHT with a certificate of insurance evidencing the following coverages:	
11.2.1.1 *****
11.2.1.2 *****
*****
 
11.2.2	The insurances named in Article 11.2.1.1 and Article 11.2.1.2 and any other insurances of Volaris by which Volaris insures its property will contain *****	
*****
 
11.2.3	*****	
 
11.2.4	*****	
 
11.2.5	Termination of Insurances	
In case any of the insurances are not provided or are revoked or canceled at any time for any reason, LHT will have the right to *****.

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12 TERM AND TERMINATION
 
12.1	The Basic Agreement shall remain in force and be effective at least as long as one Attachment is still effective.	
 
12.2	Subject to Article 12.1, the Basic Agreement shall be concluded for a minimum term of *****.	
In the event of a material breach of this Agreement by a Party, the other Party may terminate this Agreement as a whole or—if the material breach relates only to a particular Attachment—the Attachment concerned by prior written notice, unless the breaching Party cures the breach within ***** after having been notified by the non-breaching Party of the respective breach.
 
12.3	*****	
 
12.4	*****	
 
12.5	The premature termination of this Agreement as a whole or any Attachment by act of the Parties or otherwise shall not relieve the Parties of any liabilities, obligations, expenses or charges accrued up to the date when such termination takes effect and shall be without prejudice to any rights accruing to either Party up to said date of termination.	

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13 CONFIDENTIALITY, NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS
 
13.1	The Parties shall treat as strictly confidential the provisions of this Agreement, including the document itself as well as individual provisions contained therein (“Confidential Information”). Confidential Information shall include, but not be limited to, the contents of the negotiations leading up to this Agreement, any business, technical and strategic data disclosed by the other Party or its Subcontractors at any time for any reason—comprising any and all such information in oral or visual form—including but not limited to prices for Materials and Services, the scope of Services offered, legal provisions, Turnaround Times and man-hours needed.	
 
13.2	Neither Party shall disclose any Confidential Information to any employee, except where such disclosure is reasonably necessary in order to fulfill the obligations of such party under this Agreement and the employee commits to comply with the respective Party’s confidentiality obligations, in the understanding that all claims shall be addressed to the applicable Party and not its employees. Either Party may disclose Confidential Information to its certified accountants, auditors and attorneys, such persons to be instructed to adhere to the terms of this Article and as required by applicable law and may disclose such Confidential Information as required by applicable laws, regulations and legal process, including applicable securities laws and regulations. In case Volaris is not the owner of the aircraft, Engine, Material or Component serviced subject to this Agreement LHT and Volaris may upon request by the owner and/or lessor of such aircraft, Engine, Material or Component disclose to the owner and/or lessor Confidential Information regarding such aircraft, Engine, Material or Component. LHT and Volaris may disclose Confidential Information to their respective affiliates, subsidiaries, shareholders, officers and directors. Confidential Information shall only be disclosed to a Subcontractor if such Subcontractor has agreed, in favour of the Party whose information is disclosed, to limitations on disclosure substantially similar to those set forth in this Article 13.2.	
 
13.3	Any Party receiving Confidential Information from the other Party in connection with this Agreement (“Recipient”) shall not be bound by the confidentiality obligations under this Article 13 if the Recipient can prove that the Confidential Information:	
was already known to the public prior to the date the Beneficiary received said information;
has become known to the public after the date the Beneficiary received said information, except if the Beneficiary is the originator of the publication of said information;
has been communicated to him at any date by a third party with the right to communicate it;

Basic Agreement	  	- 29 -	  	Execution Version	

			

 
 
must be disclosed by binding and final order of a competent court or authority, in which case the Beneficiary will immediately inform the other Party about such mandatory disclosure and limit the disclosure to the extent legally permissible.
The aforementioned exceptions to the confidentiality obligations under this Article 13 shall apply to a combination of single pieces of Confidential Information only if such combination is subject to one of the aforementioned exceptions but not if only each individual piece of Confidential Information is subject of said exceptions.
 
13.4	All obligations of confidentiality imposed under this Article 13 shall survive the term of this Agreement for a period of *****.	
 
13.5	LHT shall at all time retain all right, title and interest in and to its intellectual property contained in the Services, products and processes, including but not limited to all rights under patents, copyrights, trademarks and trade secrets which belong to LHT and all renewals and extensions thereto. The disclosure of any documents, data and other information in connection with this Agreement, including without limitation when such disclosure is made in fulfillment of a contractual obligation hereunder, shall not be construed as a grant or transfer of such rights.	

Basic Agreement	  	- 30 -	  	Execution Version	

			

 
 
14 NOTICES AND COMMUNICATION
 
14.1	Except as otherwise stated in Article 7.4.3, for messages and correspondence exchanged in connection with this Agreement in day-to-day business, each Party may notify the other Party in writing about suitable postal, e-mail or other addresses and telephone numbers. The addresses given in Article 14.4 below may also be used.	
 
14.2	No Party may claim that the other Party has received such messages or correspondence if other addresses than those exchanged or given below were used.	
 
14.3	Messages sent by e-mail or other electronic means shall be deemed received only when the message has been opened by the recipient. The burden of proof for the receipt and time of receipt of such messages shall lie with the Party sending the message.	
 
14.4	Whenever written notification or notice is required under this Agreement such notification or notice shall be given by mail or internationally recognized courier service to the following address:	
 
 	Postal Address:	Lufthansa Technik AG	
 	    	Dept.: Marketing and Sales, HAM TS	
 	    	Weg beim Jäger 193 (P.O. Box 63 03 00)	
 	    	22335 Hamburg	
 	    	Germany	
 
 	Postal Address:	Volaris	
 	    	Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13,	
 	    	Col. Zedec Santa Fe	
 	    	01210 Mexico City, Mexico	
 
14.5	Volaris shall report Flight Hours and Flight Cycles, if required, by using the Lufthansa Technik Customer Lounge web application “Airborne” accessible at www.lufthansa-technik.com .	
Contact addresses for individual communication are:

        e- mail address:	  	abadzfe@lht.dlh.de	
		
        Phone:	  	+49-40-5070 -2699 or -2912	
		
        Fax:	  	+49-40-5070-5008	
		
        Telex:	  	HAMIDLH	

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15 LAW AND JURISDICTION
 
15.1	Governing Law	
This Agreement and any dispute shall be governed by and construed in accordance with the laws of the State of New York, U.S.A. without regard to its conflicts of laws principles (other than Sections 5-1401 of the General Obligations Law of the State of New York).
 
15.2	Dispute Resolution / Arbitration	
 
15.2.1	Prior to commencing arbitration, the Parties may, if they so agree, seek the opinion of the relevant manufacturer in relation to the Services under dispute with a view to settling the dispute in good faith. This procedure shall not prejudice either Party’s right to commence arbitration at any time.	
 
15.2.2	Any dispute between the Parties out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the Rules. The place of arbitration shall be New York, New York. The language of the arbitration shall be English. All proceedings in the arbitration shall be scheduled and conducted so that the arbitral tribunal may render the award as expeditiously as possible.	
 
15.2.3	The award shall be final and binding. No Party shall seek recourse to a court of law or other authorities to appeal or otherwise set aside the award. The award shall be in writing and in English, and shall specify the factual and legal basis for the award. The award may be enforced in any court having jurisdiction.	
 
15.2.4	The Parties consent to the exclusive jurisdiction of the United States District Court for the Southern District of New York in any action, suit or proceeding with respect to the enforcement of the arbitration agreement, this Article 15.2 and to the non-exclusive jurisdiction of that court with respect to the enforcement of any award thereunder.	
 
15.2.5	Nothing in this Agreement shall prevent any Party, before an arbitration has commenced pursuant to this Article 15.2, from seeking interim or injunctive relief from any court of competent jurisdiction, provided however such application is made before the arbitral tribunal is constituted. The arbitral tribunal shall have the authority, inter alia, to order interim measures of protection, to award monetary compensation, to order specific performance of this Agreement, and to issue declaratory relief. After the constitution of the arbitral tribunal, only the arbitral tribunal shall have the authority to issue interim or injunctive relief.	
 
15.2.6	The Parties agree to keep any arbitration confidential, and shall not disclose to any person the existence of the arbitration, any document submitted or exchanged in connection with it, any oral submissions or testimony, any transcripts, or any award, unless such disclosure is required by law.	

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15.2.7	The Parties agree that this Agreement and the resulting obligations and relationships are commercial and that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on International Commercial Arbitration of 1975 apply to this Agreement and to any order or arbitral award resulting from any arbitration conducted in accordance with this Agreement.	
 
15.2.8	The Parties hereby appoint:	
For Volaris:
CT Corporation System
111 Eighth Avenue, 13th Floor
New York, New York 10011.
For LHT:
Lufthansa Technik Logistik of America LLC
Attn.: MOLINS, ARTHUR
Street: 1640 HEMPSTEAD TURNPIKE
City: 11554 New York, NY
Phone-No: +1-516-296-9234
 
15.2.9	as its agent for service of process in New York in any dispute; provided, however, that the agent may be replaced by another agent in New York upon thirty (30) Days’ written notice. Service of process on the designated agent at the designated address shall be deemed, for all purposes, to be due and effective service, and service shall be deemed completed whether or not forwarded to or received by the respective Party. Any correspondence sent to a Party’s agent for service of process shall also be copied to the Party directly pursuant to Article 14.4; provided, however, that the failure to copy any Party directly shall not affect the effectiveness of any service of process.	
 
15.2.10	The prevailing Party, if any, shall be entitled to recover its reasonable costs, including agreed arbitrators’ fees and expenses, and reasonable attorneys’ fees and expenses.	
 
15.2.11	NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY DISPUTE.	

Basic Agreement	  	- 33 -	  	Execution Version	

			

 
 
16 MISCELLANEOUS
 
16.1	Change of Law / Compliance with foreign export and import regulations	
 
16.1.1	The Parties have agreed that certain laws and regulations regarding certification and regulatory requirements are to be observed in the performance of Services under this Agreement. Neither Party can foresee to what extent those laws and regulations will change after the execution of this Agreement. LHT will use all reasonable efforts to mitigate any impact on the performance and the agreed terms of the Services because of a change of laws, regulations or their interpretation by the relevant Authority, any such impact and any resulting additional cost incurred by LHT, to the extent it arises solely as a result of a change by the Government of Mexico or the NAA shall be the responsibility of and be borne by Volaris; otherwise, the same shall be borne by LHT, unless Volaris would have to bear such costs if it would perform the Services itself.	
 
16.1.2	Article 16.1.2 shall apply respectively if LHT is not able to comply with any export or import regulations of other countries than Germany without measurable negative impact on the agreed terms of the Services. LHT shall not be held responsible for any such impact, even if due to such impact certain Services cannot be performed at all.	
 
16.2	Assignment	
Volaris agrees that LHT may assign its rights under this Agreement in total or in part to any of LHT’s affiliates, in which case LHT shall inform Volaris of such assignment. LHT shall also have the right to assign its obligations under this Agreement in total or in part with the prior written consent of Volaris, which shall not be unreasonably withheld or delayed. The assignee shall perform the Services under this Agreement in the quality and standards and in accordance with the terms and conditions set forth in this Agreement. Any other assignment of rights or obligations arising from this Agreement shall require the prior written approval of the other Party. Form of Agreement
 
16.2.1	Two counterpart originals of this Agreement shall be signed and executed by the Parties. One original shall remain with each Party. Each page of each original of the Agreement shall be initialed by each Party.	
 
16.2.2	This Agreement shall not be varied in terms or amended except by an instrument in writing explicitly named an amendment to this Agreement and signed by duly authorized representatives of the Parties.	
 
16.2.3	This Agreement is the entire understanding between the Parties subject matter herein. There are no oral, written or implied agreements with regard to the subject matter herein. In no event shall any general terms and conditions for purchase and/or sale of either Party apply.	
 
16.2.4	All communication between the Parties shall be in English and all documentation shall be made available to the other Party in English. In case any other language is used or any document including this Agreement is translated into any other language it shall be for convenience only. The version in English shall be binding.	

Basic Agreement	  	- 34 -	  	Execution Version	

			

 
 
16.3	Incoterms	
Any reference to any Incoterm shall be a reference to Incoterms 2010.
 
16.4	Order of Precedence	
In the event that a provision in an Attachment, General Annex or any related contractual document with reference to the Basic Agreement deviates from or conflicts with a provision in the Basic Agreement the provision in such Attachment, General Annex or any related contractual document with reference to the Basic Agreement shall prevail only if explicit reference is made to the conflicting or deviating provision of the Basic Agreement which it shall supersede. Article 12.1 shall remain unaffected.
 
16.5	Waiver and Severability	
 
16.5.1	The failure by either Party to enforce any of the provisions of this Agreement shall not be construed as a waiver of its rights.	
 
16.5.2	Nothing contained in this Agreement shall require either Party to take any action contrary to the law or to any order or regulation of any government or contrary to any permit or authorization granted to either Party by any governmental authority. If any of the provisions of this Agreement are held unlawful or otherwise ineffective by any court of competent jurisdiction, the remainder of this Agreement shall remain in full force and the unlawful or otherwise ineffective provision shall be substituted by a new provision reflecting the intent of the provision so substituted.	
 
16.6	Export Clause	
 
16.6.1	Each of LHT and Volaris shall comply with all applicable domestic and foreign export compliance requirements, including applicable US export laws and regulations (e.g. ITAR, EAR and OFAC sanctions regulations) and those of other relevant foreign jurisdictions. Upon reasonable request of a Party, the other Party shall promptly provide appropriate certifications as required by such applicable export laws and regulations to the extent necessary to ensure or evidence compliance with such applicable export laws and regulations.	
---------- signature page to follow ----------

Basic Agreement	  	- 35 -	  	Execution Version	

			

 
 
---signature page to Basic Agreement between LHT and Volaris---
IN WITNESS WHEREOF Volaris and LHT have caused this Agreement to be executed as of the Day and year written below.

Hamburg, Germany
 
Date:	 		 	For and on behalf of
 
Lufthansa Technik AG:	
					
	 	/s/ Joerg Femerling	 		 		 	/s/ Burkhard Andrich	
Name:	 	Joerg Femerling	 		 		 	Dr. Burkhard Andrich	
Title:	 	Sales Director	 		 		 	Senior Vice President	
	 		 		 		 	Aircraft Component Services
Lufthansa Technik AG	

Mexico City, Mexico	 		 	For and on behalf of	
	
Date: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
	 	/s/ Holger Blakenstein	 		 		 	/s/ Fernando Suárez Gerard	
Name:	 	Holger Blakenstein	 		 		 	Fernando Suárez Gerard	
Title:	 	Director Commercial
CCO	 		 		 	Director de Finanzas
CFO	

Basic Agreement	  	- 36 -	  	Execution Version	

			

 
 
ATTACHMENT 1: TOTAL COMPONENT SUPPORT (TCS)

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1 GENERAL
This TCS Attachment is an Attachment to the Basic Agreement between the Parties, dated August 15th, 2012.
During the term of this TCS Attachment LHT shall perform Component support services for Volaris as agreed upon hereunder.

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2 DEFINITIONS
Capitalized terms contained herein shall have the meaning ascribed to them in Article 2 of the Basic Agreement and as follows:

“50_50”	 	A set amount of part numbers listed in the column “Package” of the positive list in Article 17 of Annex TCS.	
		
“Agreed HBS Level”	 	Has the meaning set forth in Article 17 of Annex TCS.	
		
“Common Modification Standard”	 	Has the meaning set forth in Article 3.1.5.	
		
“Component Pool”	 	A pool or pools of Components that are owned, maintained and administered by LHT at one of its facilities and that LHT makes available to Aircraft operators within a short period of time.	
		
“Deemed Removal Date”	 	Has the meaning set forth in Article 5.3.	
		
“Flat Rate Components”	 	Components marked as “Flat Rate Components” in Article 17 of Annex TCS and removed from Volaris’ Aircraft and Engines.	
		
“Home Base”	 	The location listed in Article 17 of Annex TCS where the Maintenance of Volaris Aircraft is regularly performed.	
		
“Home Base Stock”	 	The stock of Home Base Stock Components owned by LHT.	
		
“Home Base Stock Components”	 	The Components defined in the list referenced in Article 17 of Annex TCS and located at Volaris’ Home Base owned by LHT	
		
“Home Base Stock Replacement”	 	Has the meaning set forth in Article 3.1	
		
“Home Base Stock Replenishment”	 	Has the meaning set forth in Article 3.1	
		
“Initial Procurement”	 	The procurement of the Home Base Stock and its allocation at Volaris’ Home Base	
		
“Non Pool Component”	 	A Component to which Volaris has no access to the Component Pool. These are those Components in Article 17 of Annex TCS not marked as “Pool Components” as well as any other Component removed from Volaris Aircraft.	

TCS Attachment	  	- 3 -	  	Execution Version	

			

 

“pbth”	 	A set amount of part numbers listed in the column “Package” of the positive list in Article 17 of Annex TCS.	
		
“Pool Access Fee”	 	The fee for accessing the Pool Components as set out in Article 0 of Annex TCS (Pool Access Fee).	
		
“Pool Aircraft”	 	Those Volaris Aircraft marked as Pool Aircraft in Article 0 of Annex TCS (Volaris’ Aircraft and Engines) for which Volaris has access to the Component Pool.	
		
“Pool Component”	 	A Flat Rate Component in the Home Base Stock or the Component Pool to which Volaris is granted access for its Pool Aircraft. Those Components are marked as “Pool Components” in Article 17 of Annex TCS.	
		
“Pool Component Adjustment”	 	Has the meaning set forth in Article 3.1.5.	
		
“Provisioning Period”	 	The Provisioning Period is measured from the time when LHT receives Volaris’ written request and until LHT provides the relevant Pool Component according to the Incoterms agreed in Article 5.1.	
		
“Removal Date”	 	Has the meaning set forth in Article 5.3.	
		
“Return Pool Component”	 	Pool Components to be returned by Volaris to LHT because:
 
•   the Pool Component is unserviceable and Volaris has received a serviceable Pool Component ; or
 
•   the serviceable Pool Component delivered by LHT is not needed for installation; or
 
•   the Agreed HBS Level for this Pool Component is exceeded.	
		
“TCS Attachment”	 	This Attachment entitled “Total Component Support (TCS)”.	
		
“Volaris’ Aircraft and Engines”	 	Has the meaning set forth in Article 0 of Annex TCS.	
References in this Attachment shall be references to Articles of this TCS Attachment or its Annex, unless expressly otherwise stated herein.

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3 SCOPE OF SERVICES
 
3.1	Component Pool	
LHT shall grant Volaris access to serviceable Pool Components available in the Component Pool in order to replace Volaris’ unserviceable Components by serviceable Components on a 1:1 forward exchange basis.
Volaris may request during the term of this Agreement Pool Components in order to:
 
 	•	 	replace unserviceable Pool Components from the Pool Aircraft during a line maintenance or heavy maintenance.	
 
 	•	 	replace Pool Components in the Aircraft due to Modifications, layovers or hard times.	
 
 	•	 	replace Pool Components on attrition due to upgrades, retrofits, service bulletins, airworthiness directives or reliability improvements.	
 
 	•	 	Replace Pool Components in the Aircraft due to Soft Times.	
 
 	•	 	replace Pool Components in the Home Base Stock that have to be replaced due to a change in Modification standard or the expiry of storage limits (“ Home Base Stock Replacement ”).	
 
 	•	 	replenish the quantity of Pool Components in the Home Base Stock to the Agreed HBS Level (“ Home Base Stock Replenishment ”). Such replenishment may be refused if:	
 
 	•	 	— Volaris loaned a Pool Component to a third party (Article 3.1.7),	
 
 	•	 	— Volaris exchanged a Pool Component with a third party and received in exchange a Pool Component that is in need of repair or Modification before it can be used by Volaris (Article 3.1.7).	
3.1.1     Requesting Pool Components
Volaris shall request in writing (or in accordance with any other procedure agreed upon) Pool Components and related AOG Services at LHT’s service desk which will be available twenty-four (24) hours a day, seven (7) days a week.
3.1.2     Content and Time Frame
 
 	A)	Volaris shall place a request for Pool Components at LHT in writing (or according to any other procedure agreed upon) immediately after the necessity therefore has arisen. Such request shall contain:	

TCS Attachment	  	- 5 -	  	Execution Version	

			

 
 
 	•	 	the part number,	
 
 	•	 	the request category as specified in Article 3.1.3,	
 
 	•	 	Tailsign in case of an AOG, CRIT or SCHEDULED request,	
 
 	•	 	the scheduled replacement date and any other relevant information relating to such request.	
 
 	B)	Category “SCHEDULED” requests shall be made within the following time frames:	
 
 	•	 	In case of Base Maintenance, at least four (4) weeks before the scheduled replacement date,	
 
 	•	 	In case of a component exchange due to a Modification, as soon as possible but at least two (2) months prior to the scheduled replacement date,	
 
 	•	 	in all other cases at least ten (10) Days before the scheduled replacement date, except for those AD’s or mandatory Service Bulletin, where a timeframe is established.	
3.1.3     Provisioning Periods
LHT shall provide the requested Pool Components to Volaris within the time frames set out in the table below.

Request Category	  	Description	  	Prerequisites	  	Provisioning Period	  	Target Service Level	
AOG	  	*****	  	*****	  	*****	  	*****	
CRIT A	  	*****	  	*****	  	*****	  	*****	
CRIT B	  	*****	  	*****	  	*****	  	*****	
SCHEDULED	  	*****	  	*****	  	*****	  	*****	
SCHEDULED AD’s or mandatory Service Bulletin	  	*****	  	*****	  	*****	  	*****	
REPLENISHMENT	  	*****	  	*****	  	*****	  	*****	
Note 1: *****
Note 2: *****
Note 3: *****
Note 4: *****

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3.1.3.1     Target Service Level Parameters
LHT shall fulfil the “ Target Service Levels ” as stated in the right column of the table above. In this respect, the following shall apply:
 
 	A)	The Target Service Levels shall only be relevant if Volaris complies with its obligations under this Agreement.	
 
 	B)	*****	
 
 	C)	When calculating the Target Service Level parameters, a request will be disregarded for calculation purposes if any of the following applies:	
 
 	(i)	*****	
 
 	(ii)	*****	
 
 	(iii)	*****	
 
 	(iv)	*****	
 
 	(v)	The Agreed HBS Level has not been established for the respective Pool Component.	
 
 	(vi)	Volaris fails to fulfil its obligations to deliver the component to LHT in accordance with the Purchase Terms Agreement.	
 
 	D)	*****	
3.1.3.2     Penalty Application:
The Parties agree that *****.
 
 	A.	Penalties for LHT: In the event that LHT fails to comply with the Target Service Level specified in section 3.1.3. as calculated in accordance with section 3.1.3.1 paragraph D) above, LHT shall pay Volaris the penalty described below:	
 
 	    	*****	
 
 	    	*****	

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For avoidance of doubt, an example of Service Level measurement and discount is described below:

	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
AOG	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Crit A	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Crit B	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Scheduled	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Replenishment	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Total	  	*****	  	*****	  	*****	  		  		  		  		
Weighted deviation from target	  		  		  		  	*****	
Cumulative Invoice (Pool Rate)	  		  		  		  	*****	
Adjustment (credit/debit)	  		  		  		  		  	*****	
 
 	B.	Penalties for Volaris: In the event that Volaris fails to comply with the following Performance Parameters, Volaris shall pay LHT the penalty described below:	

Performance Parameters	  	*****	  	*****	
Return Pool Components:	  	*****	  	*****	
***** of Return Pool Components removed in Mexico to be delivered to the freight forwarder within ***** after *****. For San Salvador fourteen (14) days after Deemed Removal Date	  		  		
***** AOG and CRIT A requests as defined 3.1.3.4	  	*****	  	*****	
***** of Removal Reason as specified below	  	*****	  	*****	

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Removal Reasons
Unserviceable Flat Rate Components delivered to LHT shall be accompanied with Post Flight Reports (“PFR”) in addition to the required documentation. In case that no PFR is available Volaris has to ensure that a qualified removal reason description is stated in the removal tag to prevent redundant trouble shooting in the LHT workshops.
It is the target of Volaris to ensure that ***** of the removed Flat Rate Components are accompanied with such PFR’s and/ or qualified removal reasons.
For the avoidance of doubt, in the event that the actual Volaris Performance Parameters are as follows:
 
 	•	 	Return Pool Components: *****	
 
 	•	 	Quota for AOG and CRIT A: *****	
 
 	•	 	Removal Reason: ***** Components are accompanied with PFR and/ or qualified removal reasons.	
Solely as an example, the percentage figure of the Target Service Level for all categories will be reduced by:
*****
 
 	C.	Starting on February 1 st 2014, the Parties will make annual reconciliations on the amounts that each Party owes the other as a result of the application of the penalties described in subparagraphs A. and B. above. LHT and Volaris agree that if amounts are due to the other Party as a consequence of the penalties described above, they will set-off such amounts on the next applicable invoice.	
 
 	D.	The Parties agree the penalties set forth in this Article may be subject to modifications as agreed by both Parties in writing, as their intention is to maintain and improve performance.	
3.1.3.3 AOG-Service
For category “AOG” requests, the following shall apply:
 
 	A)	*****	
 
 	B)	*****	
 
 	    	*****	
******
******
*****
*****

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3.1.3.4 Quota of AOG and CRIT A requests
*****
3.1.4 Provision of interchangeable Pool Components
LHT may alternatively provide an interchangeable Pool Component to Volaris together with Interchangeability information available to LHT.
LHT shall provide VOLARIS with a proposed list of interchangeable part numbers according to LHT IT system at the beginning of the contract and on a regular basis *****. The sole responsibility for the confirmation of the Interchangeability remains with Volaris.
LHT will provide to Volaris a fully interchangeable Pool Component (in accordance to the relevant interchangeable information). LHT provides Pool Components with same FFF in comparison to the removed one. All Pool Components provided by LHT meets the agreed pool standard.
3.1.5 Adjustment of the List of Pool Components
Any Modification to the Pool list and Home Base Stock shall be mutually agreed by LHT and Volaris every ***** as well as any change on fee resulting from such modification.
LHT shall be entitled to define in its sole discretion a common Modification standard for the Component Pool (“Common Modification Standard”). LHT shall maintain the Common Modification Standard for all Pool Components.
LHT and Volaris may agree to—in deviation from Article 15.4.2 of the Basic Agreement—exclude such Pool Component from the Component Pool and adjust the Pool Access Fee accordingly. After their exclusion from the Component Pool these Components shall be treated as Non Pool Components.
3.1.6 Transfer of Title
Transfer of title of Pool Components shall be governed by the following provisions:
 
 	A)	Title to each serviceable Pool Component shipped by LHT to Volaris shall remain with LHT until the Return Pool Component that it replaces has been received by LHT, whereupon title to the serviceable Pool Component shall transfer to Volaris and simultaneously title to the Return Pool Component shall transfer to LHT.	

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 	B)	Title to each serviceable Home Base Component taken out of the Home Base Stock to be installed in a pool aircraft, shall remain with LHT until the Return Pool Component that it replaces has been received by LHT, whereupon title to the serviceable Home Base Component shall transfer to Volaris and simultaneously title to the Return Pool Component shall transfer to LHT.	
 
 	C)	However, in the case of leased Pool Aircraft, if the lease terms do not permit the installation of a Component that is subject to a retention of title in favour of LHT, the title to the serviceable Pool Component shall pass to Volaris (or Pool Aircraft lessor) upon its installation on such leased Pool Aircraft, and simultaneously title to the Return Pool Component shall transfer to LHT.	
 
 	D)	If the Return Pool Component has not been received by LHT within the time frames outlined in Article 5.3 and LHT therefore purchases a Component at the expense of Volaris as permitted by Article 5.3.4, then	
 
 	i)	the Component shall be owned by LHT,	
 
 	ii)	title of the serviceable Pool Component provided to Volaris shall pass to Volaris upon LHT’s receipt of payment by Volaris of the sums payable to LHT in respect of its purchase of the Component in accordance with that Article,	
 
 	iii)	title to the Return Pool Component shall remain with Volaris.	
However, if Article 3.1.6 B) above applies and thus title to the Return Pool Component has already passed to LHT upon the installation of the serviceable Pool Component on the leased Pool Aircraft
 
 	E)	In case of Home Base Stock allocated by LHT:	
Other than set forth in Article 8.1 of the Basic Agreement, title to Pool Components and Home Base Stock Components shall transfer as follows:
Title to each Home Base Stock Component taken out of the Home Base Stock to be installed on a Pool Aircraft shall remain with LHT until the replaced Return Pool Component has been received by LHT. Upon receipt by LHT, title to the serviceable Pool Component or the Home Base Stock Component, as the case may be, transfers to Volaris. At the same time the title to the Return Pool Component transfers to LHT. The Title to all Pool Components for Home Base Stock Replacement and Home Base Stock Replenishment remains with LHT.
Title shall transfer pursuant to each of the provisions above free and clear of all liens, encumbrances and other third party rights.

TCS Attachment	  	- 11 -	  	Execution Version	

			

 
 
3.1.7 Impact of Volaris exchange on ad-hoc basis
Volaris may exchange Pool Components within its Home Base Stock with third parties on a 1:1 exchange basis, provided that LHT has given its consent in advance of the exchange (such consent not to be unreasonably withheld). LHT shall be entitled to deny the use of Home Base Stock for any purpose other than to replace Return Pool Components removed from Pool Aircraft if such other use would increase the likelihood of increased requests by Volaris to LHT under Article 3.1. If a Pool Component received by Volaris pursuant to an exchange with a third party is subsequently sent to LHT for repair or Modification, the repair and Modification (if any) shall be charged to Volaris on a Time and Material basis.
Volaris may, on an ad hoc basis only and at its own cost, loan Pool Components from a source other than LHT to support its fleet (for example on line stations), but shall promptly inform LHT of such ad hoc occurrences.
 
3.2	Home Base Stock	
In order to fulfil short term requirements, e.g. for No-Go and MEL A items, and, consequently, to reach high technical dispatch reliability Volaris shall maintain a Home Base Stock.
Such Home Base Stock is an integral part of the pool concept acting as a local emergency stock with eliminated shipping time.
The Home Base Stock shall only be used by Volaris to replace Pool Components removed from Pool Aircraft or spare engines/APUs. It may be used for other purposes only after prior written consent of LHT (which shall not be unreasonably withheld).
As the Home Base Stock is part of the entire Component Pool LHT may withhold its consent for such alternative use in cases where this will likely lead to increased AOG or CRIT A requests by Volaris.
The Home Base Stock has been defined in Article 17, Annex TCS.

TCS Attachment	  	- 12 -	  	Execution Version	

			

 
 
3.2.1 Material Delivery and Allocation
LHT has decided to deliver to ***** the required Home Base Stock in accordance with this TCS Attachment.
*****
LHT shall provide the Pool Components defined in the Agreed HBS Level.
*****
3.2.2 Management of Home Base
For the effective management of the Component Pool through LHT it is essential that Volaris manages its Home Base Stock to fulfil Volaris’ operational requirements. *****
*****
*****
*****
3.2.3 Adjustment of the Home Base Stock
Whenever parameters with influence on the Home Base Stock change (for example changed Pool Aircraft, Volaris line stations or Authority regulations), the composition of the Home Base Stock shall be adjusted respectively, if necessary. The following procedure will apply: Volaris shall inform LHT of the changed parameters, whereupon LHT shall recommend the respective adjustment to the Home Base Stock. The Parties shall then mutually in good faith define the final adjustments without delay, and LHT shall then add the additional Pool Components to the Home Base Stock. In the event that the Parties cannot agree on the final adjustment, the service level parameters have to be adjusted.
3.2.4 Access Right of LHT
LHT shall be entitled to access anytime the premises where the Home Base Stock is stored, in order to verify compliance with this TCS Attachment. LHT will inform Volaris at least ***** in advance prior to such a planned visit.
*****
3.2.5 Home Base stock Allocation
LHT shall provide to Volaris the Home Base Components defined in the Agreed HBS Level.
*****
*****

TCS Attachment	  	- 13 -	  	Execution Version	

			

 
 
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
3.2.5.1 Material Allocation Period
The Material allocation period corresponds to the term of this TCS Attachment, except if the Home Base allocation is terminated earlier in accordance with the provisions set forth herein or otherwise agreed by the Parties. In case the Material allocation period is terminated prematurely partially or in whole Article 10.3 shall apply.
3.2.5.2 Amendments
The scope of the Material allocation, including the Material allocation period, may be changed at any time by mutual agreement duly signed by the legal representative of both Parties between the Parties.
3.2.5.3 Release of Home Base Components to LHT
*****
3.2.5.4 Shipping
With reference to Article 9 of the Basic Agreement, the initial delivery to Volaris and the redelivery to LHT of the Home Base Components shall be made in accordance with the following Incoterms 2010:

To Volaris	  	To LHT	
*****	  	*****	

TCS Attachment	  	- 14 -	  	Execution Version	

			

 
 
3.3	Maintenance of Components	
3.3.1 Maintenance / Modifications
LHT shall perform the applicable Services, such as repair, overhaul, test and Modification on all Flat Rate Components, in order to return these Components into Serviceable Condition. Such Services will be performed in accordance with the applicable Maintenance Data and as set forth in Article 1 of the Basic Agreement.
Modifications shall be performed on the following basis:
 
 	•	 	mandatory Modifications required by EASA or FAA	
 
 	•	 	Modifications upon Volaris’ written request (only Components which are not Flat Rate Components).	
 
 	•	 	Modifications considered cost-effective by LHT. A Modification shall be considered cost-effective if LHT reasonably expects that the savings on Maintenance of the Component will exceed the cost for Modification of such component. Such savings shall be estimated based on a three years period.	
 
 	•	 	Modifications considered for reliability improvement.	
 
 	•	 	To ensure the common Modification Standard of the Component Pool.	

	  	Note:	  	For Non Flat Rate Component modifications or reliability improvement suggested by Volaris, LHT shall offer Volaris a preferred rate.	
3.3.2 Turnaround Time for Non Pool Components
LHT shall perform the respective Maintenance on the Non Pool Components within the average Turnaround Times (TAT):
 
 	•	 	Avionics = *****	
 
 	•	 	None avionics: = *****	
 
 	•	 	Engine parts = *****	
 
 	•	 	Subcontractors = *****	

TCS Attachment	  	- 15 -	  	Execution Version	

			

 
 
The average TAT is the sum of all completed TAT per part number (per full contractual year), divided by the number of completed Component repair events per range of such part number.
For Maintenance on Pool Components, no TAT applies.
3.3.3 Exchange or Loan of Non Pool Components
In order to reduce the TAT of Non Pool Components, LHT may propose an exchange free of charge for an unserviceable Component with a serviceable Component owned by LHT.
Title of the Non Pool Component exchanged will transfer between the Parties with Redelivery of the exchange Component to Volaris.
Volaris may, in its own discretion and at its cost, request a serviceable Component on the basis of a 1:1 exchange or loan. The provisioning of such Component will be subject to availability and conclusion of a separate agreement between the Parties at the terms set forth in Article 12 of Annex TCS.
In the event of an exchange or loan, LHT may provide an interchangeable Component to Volaris. The sole responsibility for the confirmation of the Interchangeability remains with Volaris.
3.3.4 Material required for Maintenance
All Material, including Modification Material, required to perform Maintenance on Components shall be provided by LHT, unless—in the event of Non Pool Components—Volaris has requested in writing to provide the Material and has confirmed that it is able to deliver the Material on time and in accordance with Article 6.2.5.
*****

TCS Attachment	  	- 16 -	  	Execution Version	

			

 
 
4 SIGNING BONUS
***** with an amount of three million five hundred thousand (3,500,000) USD . A payment with an amount of two million (2,000,000) USD upon contract signature, whereas the remaining one million five hundred thousand (1,500,000) USD shall be paid in the form of annual credit notes of seven hundred and fifty thousand (750,000) USD each in 2013 and 2014 to be balanced with invoices on technical services issued by LHT. The initial two million (2,000,000) USD may be balanced with any open invoices due to LHT. LHT shall pay interest at a rate of five per cent (5%) per annum on any unbalanced amount of the initial two million (2,000,000) USD.

TCS Attachment	  	- 17 -	  	Execution Version	

			

 
 
5 DELIVERY/ REDELIVERY
 
5.1	Shipping	
With reference to Article 10 of the Basic Agreement, the Components shall be shipped according to the following Incoterms:

Components covered by	  	To Volaris	 	To LHT	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****
It shall be the shipping Party’s responsibility to ensure that all Components are shipped using the appropriate shipping containers according to ATA 300 specification.
In the event of AOG requests, LHT shall make use of the fastest standard transport options available according to LHT’s reasonable discretion. At Volaris’ written request, the Pool Components shall be personally delivered by an on-board courier. Any costs associated with such transportation shall be borne by Volaris.
 
5.2	Receiving Inspection	
LHT shall inspect a Component upon its arrival at the agreed LHT Maintenance facility for visible defects. *****
Volaris shall inspect a Component upon its arrival at the agreed location for visible defects. *****

TCS Attachment	  	- 18 -	  	Execution Version	

			

 
 
5.3	Time Frames for Delivery of Pool Components to LHT	
5.3.1 Return Pool Component
*****
*****
*****
*****
*****
5.3.2 Serviceable Pool Component no longer required
If Volaris does no longer require a serviceable Pool Component on the date specified in its request to LHT, Volaris shall return such Pool Component to LHT as set on 5.3.1.
For the avoidance of doubt, Volaris shall (unless otherwise agreed with LHT) return such Pool Component to LHT even if the Pool Component is subsequently required but at a later date.
5.3.3 Loan Fee in the event of delayed return
*****
*****
5.3.4 Replacement purchase in the event of delayed return
*****
*****
 
5.4	Redelivery of Material for non Flat Rate Components to Volaris	
On Volaris’ request, Material removed from any unserviceable non Flat Rate Component and neither re-installed nor exchanged shall be returned to Volaris together with the respective Component. Such request shall be made in writing latest with the Delivery of the Component.

TCS Attachment	  	- 19 -	  	Execution Version	

			

 
 
If such Material was subject to Maintenance or repair that could not be completed until Redelivery, it shall be returned to Volaris as soon as reasonably possible thereafter.
 
5.5	BER	
5.5.1 BER of Pool Components
If a Pool Component returned to LHT is BER (as defined in Article 12.3 of Annex TCS), LHT shall inform Volaris about the serial number of the relevant Pool Component, the Pool Aircraft from which the Pool Component was removed and LHT’s findings. ***** except for BER caused by Volaris (e.g. mishandling), in which case, LHT shall dispose the Component at Volaris’ expense against payment ***** of the respective Component’s *****.
5.5.2 BER of Non Pool Components
*****
 
5.6	Rogue Unit:	
Volaris reserves the right to refuse Pool Parts/ Exchanges where the Part is recognized as a “Rogue Part”. A Rogue Part is defined as a Part that has been removed from an aircraft ***** within the last ***** regardless of whether a failure was found or not. If a Part has been identified as a Rogue Part before the start of the definitive contract, it will be paid for under “Time and Material” Pricing. If a Part becomes a Rogue Part under the Service Provider’s maintenance care under the Program Services, it is the responsibility of the Service Provider to replace the Rogue Part.
In order to isolate potential Rogue Parts during the course of the Agreement, Volaris reserves the right to request a “full in-depth investigation” for those parts that have ***** during the last ***** and have been determined to be NFF. If a part fails a consecutive third time within the last twelve months, then it shall be considered under the Rogue Parts procedure.

TCS Attachment	  	- 20 -	  	Execution Version	

			

 
 
6 DOCUMENTATION AND APPROVAL
 
6.1	Certification	
Each Component shall be provided to Volaris with the relevant CRS certificate according to EASA Part-145.A.42 and/or an equivalent FAA release.
 
6.2	Documentation	
6.2.1 Documentation
Volaris shall send the Components to LHT with the documentation and information set forth in Article 16 of Annex TCS (Specific Documents).
In the event that Volaris does not provide such documentation together with the Component, LHT shall ask Volaris to provide such documentation. In case documentation is not available at all LHT shall be entitled to repair/overhaul the respective Component at Volaris’ expense.
In the event that LHT does not provide such documentation together with the Component, Volaris shall ask LHT to provide such documentation. In case documentation is not available at all, Volaris shall claim for another unit or be entitled to purchase, lease or acquire in any other way the respective Component at LHT’s expense in case LHT does not provide the second unit in the required period of time.
6.2.2 Maintenance Records
LHT shall make available the Maintenance records as listed in Article 16 of Annex TCS to Volaris upon Redelivery of the Components.
6.2.3 Supply of and Responsibility for documentation
Volaris will provide LHT with all required documentation listed in Article 16 of Annex TCS no later than on the date specified therein.
Without prejudice to any further requirements in Article 3 of the Basic Agreement, Volaris hereby warrants that LHT and its Subcontractors are granted the right to use such documentation for the purpose of this Agreement.
It is the responsibility of Volaris that the documentation is supplied and to assure that the documentation reflects the current technical status of the Components.
In case the data does not reflect the Component status necessary, or is not supplied to LHT in time, LHT may, but is not under obligation to, undertake measures as are necessary to begin/continue with the Services. The cost of such measures provided by LHT will be charged to Volaris.

TCS Attachment	  	- 21 -	  	Execution Version	

			

 
 
Any cost associated with the access and/ or use of any documentation by LHT and/ or its Subcontractors shall be borne by Volaris.
6.2.4 Supply of Documentation in Electronic Form
If documentation is to be accessed in electronic form by LHT, Volaris will ensure that LHT is granted access to and is granted the right to use such data in electronic form. To the extent LHT and the respective OEM have an agreement regarding LHT’s access to and use of such data, Volaris will comply with any reasonable requirements of LHT and/or the OEM to secure such access to and use of such data.
Volaris shall send all Return Pool Components to LHT and LHT shall send all serviceable Pool Components to Volaris with the documentation and information set forth in Article 16 of Annex TCS at the times specified therein.
6.2.5 Certification of Material
All Material used by LHT or its Subcontractors shall have EASA—and/or FAA-certification.
Any Material provided by Volaris or purchased by LHT on behalf of Volaris must carry the certification and documentation required by FAA Part 145 and/or EASA Part-145.A.42.

TCS Attachment	  	- 22 -	  	Execution Version	

			

 
 
7 PRICES/CHARGES
 
7.1	Pool Access Fee	
Volaris shall pay a Component Pool Access Fee as set forth in Article 10.17.1 of Annex TCS.
 
7.2	Additional Administration Fee	
*****
7.2.1 Flat Rate
Work performed and Material consumed on Flat Rate Components as listed in Article 17 of Annex TCS shall be charged per aircraft Flight Hour (FH) as specified in Article 10.17.1 of Annex TCS.
Volaris shall pay for all Flight Hours flown but in any case per aircraft ***** specified in Article 10.12 and Article 10.19 of Annex TCS.
7.2.2 Exclusions from the Flat Rate
The Flat Rate charges do not include those items listed in Article 10.18 of Annex TCS. Those exclusions shall be charged on a Time and Material basis pursuant to Article 10.20.

TCS Attachment	  	- 23 -	  	Execution Version	

			

 
 
7.2.3 No Failure Found Rate (NFF Rate)
Without additional charge the Flat Rate includes an NFF Rate at 15% (fifteen per cent) as a yearly average calculated over the calendar year. All NFF events above such value will be charged at seven hundred and fifty (750) USD per event. All NFF events below NFF Rate fifteen per cent (15%) and calculated in the period described in this same article 6.3.1 will be credited to Volaris at a rate of seven hundred and fifty (750) USD per event.
The criteria to determine NFF will be Airbus official policy as amended from time to time.
If, after one year from the execution of this Attachment, Volaris’ NFF rate is higher than defined under Article 10.22.4 of Annex TCS Volaris and LHT shall jointly review and Volaris shall take appropriate corrective actions. LHT’s rights under Article 6.3 of the Basic Agreement shall remain unaffected.
The NFF Rate will be calculated by using the following formula:

A removal is unjustified if the acceptance test in accordance with the respective component Maintenance manual is passed without any findings.
7.2.4 *****
*****
*****
7.2.5 Maintenance of non Flat Rate Components
All Components removed from Volaris’ Aircraft and Engines which are non Flat Rate Components as per Article 17 of Annex TCS or excluded from the Flat Rate as per Article 10.18 of Annex TCS and Services relating thereto shall be charged according to the Time and Material rates defined in Article 10.20 of Annex TCS, unless the Parties agreed separately on a Fixed Price.

TCS Attachment	  	- 24 -	  	Execution Version	

			

 
 
7.3	Transportation	
Volaris shall pay for transportation for all items listed in the column “Package” marked as pbth listed in the positive list of Article 17 of Annex TCS as specified in Article 10.17.2.
 
7.4	Attachment Assumptions	
The fees set forth in Articles 7.1 to 7.2 hereof are based on the Attachment Assumptions specified in Article 10.22.1 of Annex TCS. Articles 7.2.3 and 7.2.4 shall remain unaffected.

TCS Attachment	  	- 25 -	  	Execution Version	

			

 
 
8 SECURITIES
***** shall provide ***** with a security in cash corresponding to the amount of *****
*****
*****

TCS Attachment	  	- 26 -	  	Execution Version	

			

 
 
9 WARRANTY
 
9.1	LHT’s Warranty	
In accordance with Article 9.2.2.1 of the Basic Agreement a defect shall be regarded as subject to warranty if the same defect arises within ***** after Redelivery of the Component, whichever may occur first.
*****
 
9.2	OEM Warranties	
For Flat Rate Components LHT will perform warranty administration on behalf of Volaris. The provisions of Article 9 of the Basic Agreement shall apply.
Volaris shall provide all necessary documents and/ data which are required to claim such warranty rights, including, but not limited to, those specified in Article 16 of Annex TCS.
In case the warranty claim assigned from Volaris to LHT is rejected by the Original Equipment Manufacturer (OEM) because Volaris failed to provide LHT with such Specific Documents / data, or Volaris supplied such data later than defined, Volaris shall pay the related repair cost on a Time and Material basis.
 
9.3	Liability	
*****
*****

TCS Attachment	  	- 27 -	  	Execution Version	

			

 
 
10 TERM AND TERMINATION
 
10.1	Conditions Precedent	
*****
*****
*****
 
10.2	Fix Term and Termination	
This TCS Attachment shall be concluded for a fix term of six (6) years from the date of the fulfilment of the conditions precedent according to Article 10.1. After the fixed six (6) year period, the TCS-Attachment shall
*****
*****
Article 12 of the Basic Agreement remains unaffected.
 
10.3	Premature Termination	
10.3.1 *****
*****
*****
*****
*****
*****
*****
*****
 
10.4	Termination due to malperformance	
If the Performance Measurement, as shown in Article 3.1.3 is not achieved during ***** consecutive ***** or during ***** within a period of *****.
*****

TCS Attachment	  	- 28 -	  	Execution Version	

			

 
 
10.5	Termination for market conditions	
******
*****
*****
 
10.6	Maintenance Facility	
LHT shall render the Services at one or more of the Maintenance facilities listed in Article 11 of Annex TCS (Maintenance Facilities) but may perform Services also at other Maintenance facilities approved by LHT.
 
10.7	LHT to Solely Support Volaris	
During the term of this Attachment, all Flat Rate Components removed from Volaris’ Aircraft and Engines shall only be serviced by LHT in accordance with this TCS Attachment.
In the event Volaris adds further aircraft and/or Engines of the same aircraft family as specified in Article 0 of Annex TCS to its fleet, these aircraft and Engines shall also be considered Volaris’ Aircraft and Engines within the meaning of this TCS Attachment. Accordingly, the Components of these additional Volaris Aircraft and Engines which qualify as Flat Rate Components and/or Pool Components—see Article 17 of Annex TCS (List of Covered Components)—shall from the start of operation of the additional aircraft be treated like Flat Rate Components and/or Pool Components under this TCS Attachment and be solely maintained by LHT in accordance with the terms of this TCS Attachment. The Pool Access Fee and the Flat Rate as agreed in Articles 7.1 and 7.2 shall also apply to the additional aircraft and Engines. Without prejudice to the foregoing, if an additional aircraft or Engine has a different basic configuration than the aircraft specified in Article 0 of Annex TCS LHT and Volaris will negotiate in good faith about an adjustment of the list of Flat Rate Components according to Article 17.1 of Annex TCS (Adjustment of Flat Rate Components and Pool Components).
 
10.8	Cost for provisioning and access to Maintenance Data	
Subject to Article 3.4 of the Basic Agreement, any cost, expenses, royalties or other charges, incurred by LHT or LHT’s Subcontractors in connection with the provisioning, access and use of any Maintenance Data that ***** shall be borne by *****.
 
10.9	Subcontractors	
If Volaris believes that the Subcontractor is responsible for continual and/or repetitive breaches of the quality, turnaround time and/or workmanship commitments in this Agreement, Volaris shall notify LHT in writing providing full details accompanied by any supporting evidence. Within five (5) Business Days of receipt of such notice from Volaris, Volaris and LHT will agree upon a date, time and place whereby senior management representatives from LHT and Volaris will meet to review such claim and supporting evidence. Should LHT agree with Volaris’ claim, then within five (5) business days of such meeting, LHT shall arrange

TCS Attachment	  	-29 -	  	Execution Version	

			

 
 
to conduct an audit of the Subcontractor in light of Volaris claim and make appropriate recommendations. Should the Subcontractor fail to comply with LHT’s recommendations, if any, within fifteen (15) days or fail to achieve a consistent improvement in quality, turnaround time, and/or workmanship, as the case may be, as soon as reasonably practicable after receipt of LHT’s recommendations, Volaris shall have the right to refuse the designated Subcontractor under this Agreement.
*****
*****
*****

TCS Attachment	  	- 30 -	  	Execution Version	

			

 

									
Hamburg, Germany
 
Date:	 		 	For and on behalf of
 
LUFTHANSA TECHNIK AG:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

Mexico City, Mexico
 
Date:	 		 	For and on behalf of
 
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

TCS Attachment	  	- 31 -	  	Execution Version	

			

 
 
ANNEX TCS/ TOTAL COMPONENT SUPPORT

TCS Attachment	  	- 32 -	  	Execution Version	

			

 

EFH:	  	Engine Flight Hour	  	FH:	  	Aircraft Flight Hour	
				
10.11	  	Volaris’ Aircraft and Engines	  		  		

No.	  	TAIL	  	MSN	  	*****	  	*****	  	*****	  	MODEL	  	TYPE	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
1	  	N473TA	  	1140	  	*****	  	*****	  	*****	  	1999	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
2	  	N474TA	  	1159	  	*****	  	*****	  	*****	  	2000	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
3	  	XA-VOI	  	2657	  	*****	  	*****	  	*****	  	2006	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
4	  	XA-VOL	  	2666	  	*****	  	*****	  	*****	  	2006	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
5	  	XA-VOA	  	2771	  	*****	  	*****	  	*****	  	2006	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
6	  	XA-VOB	  	2780	  	*****	  	*****	  	*****	  	2006	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
7	  	N501VL	  	2979	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
8	  	XA-VOC	  	2997	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
9	  	XA-VOD	  	3045	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10	  	XA-VOE	  	3069	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
11	  	XA-VOF	  	3077	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
12	  	XA-VOG	  	3175	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
13	  	XA-VOH	  	3253	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
14	  	XA-VOJ	  	3279	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15	  	XA-VOK	  	3450	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
16	  	N502VL	  	3463	  	*****	  	*****	  	*****	  	2008	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
17	  	N503VL	  	3491	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
18	  	N504VL	  	3590	  	*****	  	*****	  	*****	  	2008	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
19	  	XA-VOM	  	3624	  	*****	  	*****	  	*****	  	2008	  	A320-233	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20	  	XA-VON	  	3672	  	*****	  	*****	  	*****	  	2008	  	A320-233	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
21	  	XA-VOO	  	3705	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
22	  	XA-VOP	  	4403	  	*****	  	*****	  	*****	  	2010	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
23	  	XA-VOQ	  	4422	  	*****	  	*****	  	*****	  	2010	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
24	  	XA-VOR	  	2296	  	*****	  	*****	  	*****	  	2004	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
25	  	XA-VOS	  	3252	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
26	  	XA-VOT	  	3317	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
27	  	XA-VOU	  	*****	  	*****	  	*****	  		  	2004	  	A320-232	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
28	  	XA-VOV	  	*****	  		  	*****	  		  	2008	  	A320-232	  		  	*****	  	*****	  	*****	  	*****	  	*****	
29	  	XA-VOW	  	*****	  		  	*****	  		  	2008	  	A320-232	  		  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		

TCS Attachment	  	- 33 -	  	Execution Version	

			

 

*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		

TCS Attachment	  	- 34 -	  	Execution Version	

			

 

 
					
TCS Attachment	  	- 35 -	  	Execution Version	

			

 
 
10.12 Flight Hours per year, Leg Length

A/C-Type
(A/C; Engine)	  	Planned FH per
AC	 	Minimum FH
per AC for
MRO	 	Minimum
quantity of AC for
pool	 	FH /Cycle
Ratio	
*****	  	*****	 	*****	 	*****	 	*****	
*****
10.13 Home Base
The home base shall be allocated as needed in Volaris’ facilities. LHT will deliver components for the Home Base at *****.

TCS Attachment	  	- 36 -	  	Execution Version	

			

 
 
10.14 Price Validity
The prices specified in the present Article Error! Reference source not found. of Annex TCS shall be valid upon execution of this Agreement and until December 31 st 2012 and shall be adjusted in accordance with the arrangements set forth in the Basic Agreement.
10.15 Pool Access Fee

Pool Aircraft type	  	Charge
[USD/FH]	 	
*****	  	 	*	**** 	
10.16 Additional Administration Fee for Home Base Components
*****
10.17 Component Maintenance Services
10.17.1 Price for Flat Rate Components
*****

A/C age A/C type	  	*****	 	*****
year	 	*****
year	 	*****
year	 	*****
year	 	***** year and
following	
*****	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The dates of aircraft manufacture are defined in Article 0 of this Annex TCS (Volaris’ Aircraft and Engines).
*****
10.17.2 Price for transportation of Flat Rate Components
*****

TCS Attachment	  	- 37 -	  	Execution Version	

			

 

Transportation	  	Charge
[USD/FH]	 	
*****	  	 	*	**** 	
10.18 Flat Rate Component Exclusions
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	

TCS Attachment	  	- 38 -	  	Execution Version	

			

 
 
10.19 Fleet Utilization Adjustment Factor (Fleet Average)
A/C type

FH per Cyc	  	 	*	**** 	
FH per Year	  				
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	

TCS Attachment	  	- 39 -	  	Execution Version	

			

 
 
10.20 Time and Material rates
10.20.1 Man-Hour Rates

Type of Service	  	Rate per hour in USD	
Component Maintenance Services	  	*****	
The rate of 49 USD per hour are intended for the components repaired under the 50 – 50 cost share model and as defined in the 50 – 50 table under Article 16.
10.20.2 Machine-Hour Rates

Type of Service	  	Rate per hour in USD	
Pneumatic test field	  	*****	
ATEC-6000	  	*****	
10.20.3 Handling Charge

 	  	Handling	 	Ceiling per Order [USD]	
 	  	Charge	 	Minimum	 	Maximum	
Subcontracted Work	  	*****	 	*****	 	*****	
Material	  	*****	 	*****	 	*****	
Material shall be charged at the manufacturer’s CLP plus a handling charge defined in the table above.
Subcontracted work shall be charged at the Subcontractor’s invoice plus a handling charge defined in the table above.
10.21 Material Sale
10.21.1 Handling Charge

 	  	Handling	 	Ceiling per Order [USD]	
 	  	Charge	 	Minimum	 	Maximum	
Material	  	*****	 	*****	 	*****	
10.22 Attachment Assumptions
10.22.1 *****

TCS Attachment	  	- 40 -	  	Execution Version	

			

 
 
10.22.2 *****
*****
*****
10.22.3 Removal Practice
*****
10.22.4 NFF Rate
*****
10.22.5 Ratio of Material and Labor element

Material	  	Labor	
*****	  	*****	
The annual escalation for the prices under Article 12.2.1 shall be capped ***** or the OEM material increase for the given year within the contract period of five years. *****
10.22.6 AOG and Crit A Requests
Volaris shall maintain AOG and CRIT A requests at a maximum of ***** of the total number of requests, pursuant to article 3.1.3.4 herein.
10.22.7 Volaris Assumptions:
*****
10.22.8 Flight hours
During the term of this TCS Attachment, Volaris shall have a minimum of *****
10.22.9 Minimum number of Aircraft
During the term of this TCS Attachment Volaris shall have a minimum ***** Aircrafts.
10.22.10 Consequences
*****

TCS Attachment	  	- 41 -	  	Execution Version	

			

 
 
11 MAINTENANCE FACILITIES
LHT Hamburg
LHT Frankfurt
LTCS Avionics Tulsa

TCS Attachment	  	- 42 -	  	Execution Version	

			

 
 
12 1:1 EXCHANGE / LOAN CONDITIONS
 
12.1	Material Loan	
*****
 
12.2	Material Exchange	
*****
12.3 BER
*****

TCS Attachment	  	- 43 -	  	Execution Version	

			

 
 
16 TCS SPECIFIC DOCUMENTS

*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  		  		  		  		  		  		  		
	  	*****	  		  	*****	  	*****	  		  		  	*****	
	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  	*****	  	*****	  		  		  	*****	
	  	*****	  		  	*****	  	*****	  		  		  	*****	
*****	  	*****	  		  	*****	  	*****	  		  		  		
*****	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  	*****	  	*****	  	*****	  		  		
*****	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  		  	*****	  		  		  		

TCS Attachment	  	- 44 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  	*****	  		  	*****	
	  	*****	  		  		  	*****	  	*****	  		  		
	  	*****	  		  		  	*****	  	*****	  		  	*****	
	  	*****	  		  		  	*****	  		  		  		
	  	*****	  		  		  	*****	  		  		  	*****	

TCS Attachment	  	- 45 -	  	Execution Version	

			

 
 
17 LIST OF COVERED AND HOME BASE COMPONENTS
 
17.1	The list of covered and Home Base Components is set out on the attached list.Adjustment of Flat Rate Components and Pool Components	
The list of Flat Rate Components and, accordingly, the relevant Flat Rate may be adjusted by an amendment agreement between the Parties.
The list of Pool Components and, accordingly, the relevant Pool Access Fee may be adjusted by an amendment agreement between the Parties.

TCS Annexes	  	- 46 -	  	Execution Version	

			

 

No	  	Pool Non Pool	  	ATA	  	Part Number	  	PN family	  	Package	  	Description	  	ESS	  	new HB Rec. 40 AC	  	new HB Rec. 48 AC	  	new HB Rec. 61 AC	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 47 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 48 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 49 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 50 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 51 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 52 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 53 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 54 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 55 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 56 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 57 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 58 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 59 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 60 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 61 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 62 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 63 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 64 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 65 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 66 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 67 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 68 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 69 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 70 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 71 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 72 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 73 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 74 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 75 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 76 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 77 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 78 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 79 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 80 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 81 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 82 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 83 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 84 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 85 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 86 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 87 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 88 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 89 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 90 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
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*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 91 -	  	Execution Version	

			

 
 
18 GENERAL ANNEX WARRANTY HANDLING
PART I: WARRANTY ASSIGNMENT / APPOINTMENT AS AGENT FOR WARRANTY ADMINISTRATION
On                      LHT and Volaris entered into an Agreement on                      . This Agreement includes the below listed Attachments under which LHT agreed to render certain services to Volaris with respect to certain Volaris aircraft, Engines or Components (individually the “ Attachment ” or collectively the “ Attachments ”).
Assignment of warranty claims
As of the day of the signing of the respective Attachment listed below (“Assignment Date”) Volaris hereby assigns to LHT all contractual and statutory warranty claims Volaris may have against the manufacturer or any other third party with respect to the aircraft, Engines or Components or any other Material that is or becomes a part thereof after the Assignment Date and is serviced by LHT under the Attachment. LHT hereby accepts such assignment. Volaris shall notify the manufacturer or third party concerned about the assignment with the form according to part II of this General Annex Warranty Handling.
Name of Attachment                     Date (Assignment Date)
Appointment as agent for administration of warranty claims
As of the day of the signing of the respective Attachment listed below (“ Appointment Date ”) Volaris hereby appoints LHT as Volaris’ agent to administer all contractual and statutory warranty claims Volaris may have against the manufacturer or any other third party with respect to the aircraft, Engines or Components or any other Material that is or becomes a part thereof after the Appointment Date and is serviced by LHT under the Attachment. LHT hereby accepts such appointment. In particular, LHT shall have the right to receive any payments made by the manufacturer as a result of claims made LHT on behalf of Volaris. Volaris shall notify the manufacturer or third party concerned about the appointment with the form according to part II of this General Annex Warranty Handling.

TCS Annexes	  	- 92 -	  	Execution Version	

			

 

Name of Attachment
 
Hamburg, Germany
 
Date:	 		 	Date (Appointment Date)
 
For and on behalf of
 
LUFTHANSA TECHNIK AG:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

Mexico City, Mexico
 
Date:	 		 	For and on behalf of
 
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

TCS Annexes	  	- 93 -	  	Execution Version	

			

 
 
PART II: Volaris’ Warranty Assignment / Administration
Notice to OEM
To Whom it may concern
Subject: Warranty Adminstration LETTER
VOLARIS has signed a comprehensive maintenance agreement with Lufthansa Technik AG (“ LHT ”), which includes the [ x ] assignment to LHT of contract rights related to warranty claims (“ Assignment ”) and/ or [ x ] the appointment of LHT as our agent to administer warranty claims (“ Appointment ”), pursuant to the terms of the agreement(s) listed below. Such rights include, without limitation, the right to receive any payments made by the manufacturer (“ Manufacturer ”) as a result of warranty claims made by LHT on our behalf. Volaris confirms to Manufacturer that it owns or controls the rights it purports to transfer.
The Assignment and/or Appointment, as the case may be, only applies to warranty claims made during the period of time from the date a notice is received and acknowledged by Manufacturer from LHT with this letter attached, until the date of receipt by Manufacturer of written notice to the contrary from either LHT or Volaris. Such notices will be addressed to the particular address provided by Manufacturer to LHT for such purposes and we agree that such notice will only be effective with regard to Manufacturer if received by Manufacturer at such address. We agree that all actions taken by LHT or agreements entered into by LHT during the period prior to Manufacturer‘s receipt of such notice are final and binding on Volaris. Communications with Volaris should be addressed as follows:

 	 		  		  		  		
 	 		  		  		  		
 	 	.	  		  		  		

TCS Annexes	  	- 94 -	  	Execution Version	

			

 
 
Appointment : We request that Manufacturer accepts warranty claims from LHT on our behalf with regard to the following agreement(s) and aircraft:
Assignment : We request that Manufacturer accept warranty claims assigned by us to LHT with regard to the following agreement(s) and aircraft:
Volaris authorizes Manufacturer to treat LHT as if Volaris were making warranty claims itself and request that Manufacturer settle such claims as appropriate with LHT. Volaris agrees that, by rendering a remedy to LHT, Manufacturer will have complied with its warranty obligation and that Manufacturer owes such remedy only once.
Yours sincerely,

 	 	(signature)	  		  		  		
 	 	(printed name)	  		  		  		
 	 	(title)	  		  		  		
 	 	(date)	  		  		  		

TCS Annexes	  	- 95 -	  	Execution Version	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.48
AIRCRAFT LEASE AGREEMENT [A]
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5488

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:	
		
Lessee:	 	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	 	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	 	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	 	Celestial Aviation Trading 4 Limited	
		
Trust Agreement:	 	that certain Trust Agreement (2013 A320-200 A) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	 	As set forth in Schedule D.	
		
Guarantor:	 	As set forth in Schedule D.	
		
Aircraft:	 	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5488, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	 	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	 	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	 	United States of America	
		
*****	 	*****	
		
Manufacturer:	 	Airbus S.A.S	
	
Payments	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
 
1

			
		
*****	 	*****	
		
*****	 	*****	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	 	February 2013.	
		
Final Delivery Date:	 	December 31, 2014.	
		
Delivery Location:	 	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	 	*****	
		
Lease Supplement:	 	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Insurance	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and	
 
2

			
	 	Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)    the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;
 
(b)    following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)    immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican residents. If the foregoing *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
		
Account for payments:	 	Transfer To:                    *****	
		
	 	SWIFT Code:                 *****	
		
	 	For Credit To:                *****	
		
	 	Account No:                     *****	
		
	 	Sort Code:                       *****	
		
	 	IBAN:                               *****	
		
	 	US Correspondent          *****
Bank Details:               	
		
	 	US Correspondent          *****
Bank SWIFT Code:  	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 4 Limited
c/o GE Capital Aviation Services
Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70
piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A., not in its individual capacity, but solely as Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	/s/ Carlos Sierra	 		 	By:	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Signed at:	 	 	 		 	Signed at:	 	 	
-Signature Page-
-Aircraft Lease Agreement [A]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	
 
A-1

EXHIBIT A
 
-Exhibit A-

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120951-08	
SCHEDULE E
*****
 
22

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	
*****
 
23

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	
*****
 
24

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	
*****
 
25

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	
*****
 
26

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 1 of 3

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
VOI56D001B	  	Installation of dummy windows according to referenced cabin layout	  	X	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

	

 

   	

	

	

	

	

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	 	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, *****Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	 	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	 	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	 	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	 	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	 	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	 	***** Cycles.	
		
Minimum Engine LLP Cycles:	 	***** Cycles.	
		
Minimum Engine Flight Hours:	 	***** Flight Hours.	
		
Required EGT Margin	 	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	 	***** months.	
		
Minimum Landing Gear Cycles:	 	***** Cycles.	
		
Landing Gear:	 	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
Minimum Component Calendar Life:	 	***** months.	
		
Minimum Component Cycles:	 	***** Cycles.	
		
Minimum Component Flight Hours:	 	***** Flight Hours.	
		
Minimum APU Limit:	 	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	 	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

*****	
*****	  	*****	
*****	  	*****	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  		  		  		  		  		  		  		  		  		
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	
 
D-1

			
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
D-2

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.49
AIRCRAFT LEASE AGREEMENT [B]
 
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5510

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 4 Limited	
		
Trust Agreement:	  	that certain Trust Agreement (2013 A320-200 B) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5510, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	United States of America	
		
Duration of Term:	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
 
1
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

			
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	March 2013.	
		
Final Delivery Date:	  	December 31, 2014.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
2
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

					
	
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)    the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;
 
(b)    following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)    immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:	 		  	*****	
			
	 	Transfer To :	  	*****	
			
	 	SWIFT Code :	  	*****	
			
	 	For Credit To :	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent
Bank Details:	  	*****	
			
	 	US Correspondent Bank
SWIFT Code:	  	*****	
 
3
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

					
Notice Details:	 	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn : Corporate Trust Department
 
Fax : (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 4 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn : Contracts Leader
 
Fax : +353 61 706867
 
E-mail : asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70 piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn : Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
 
4
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	/s/ Carlos Sierra	 		 	By:	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Signed at:	 	 	 		 	Signed at:	 	 	
-Signature Page-
-Aircraft Lease Agreement [B]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	
 
A-1

EXHIBIT A

 
Exhibit A

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	
*****
SCHEDULE E
 
-22-

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20820950-08	
*****
 
23

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	
*****
 
24

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	
*****
 
25

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	
*****
 
26

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
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ATA 03	  	Weights	  		  		
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ATA 03	  	Placards and markings	  		  		
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	  	Air conditioning	  		  		
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ATA 22	  	Auto Flight	  		  		
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ATA 23	  	Communications	  		  		
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Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
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ATA 25	  	Cabin & cockpit	  		  		
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ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
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Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
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ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
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ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
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ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
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ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
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ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
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ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
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ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
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ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

	

 

	

 

	

 

	

 

	

 

	

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, ***** Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
 
B-1

			
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

*****	  		
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B-2

			
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B-3

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.50
AIRCRAFT LEASE AGREEMENT [C]
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5595

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.
The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:

Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 40 Limited	
		
Trust Agreement:        	  	that certain Trust Agreement (2013 A320-200 C) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5595, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	United States of America	
		
Duration of Term:	  	One hundred forty-four (144) months	
		
Manufacturer:	  	Airbus S.A.S	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	May 2013.	
		
Final Delivery Date:	  	December 31, 2014.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:    	  	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)      the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;	
 
2

					
	 	(b)     following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)     immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:    	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:    	 	Transfer To:	  	*****	
			
	 	SWIFT Code:	  	*****	
			
	 	For Credit To:	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent Bank Details:	  	*****	
			
	 	US Correspondent Bank SWIFT Code:    	  	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest, National
Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 40 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70
piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By: 	 	/s/ Carlos Sierra	 		 	By: 	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Director Signed at:                                                                             	 		 	Signed at:                                                                                         	
-Signature Page-
-Aircraft Lease Agreement [C]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	

EXHIBIT A

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08
*****

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08
*****

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08
*****

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08
*****

****

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

	

Page 4 of 6

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, ***** Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
		
Minimum Component Calendar Life:	  	*****months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

*****	
*****	  	*****	
*****	  	*****	
	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  		  		  		  		  		  		  		  		  		
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  		
*****	  	*****	
*****	  	*****	
 
D-1

			
*****	  	*****	
*****	  	*****	
	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	
*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
	
*****	
*****	  	*****	
 
D-2

Exhibit 10.51
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
ENGINE LEASE EXTENSION AND AMENDMENT AGREEMENT
Dated March 27 2013
between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
(not in its individual capacity except as expressly set
forth herein but solely as owner trustee)
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. as
Lessee
in respect of
Engine Lease Agreement dated 28 June 2007
relating to one (1) IAE V2527M-A5 engine bearing serial number V12671
 
Engine Lease Extension & Amendment Agreement – ESN V12671

THIS ENGINE LEASE EXTENSION & AMENDMENT AGREEMENT (“ Agreement ”) is made on March 27, 2013
BETWEEN:
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (not in its individual capacity except as expressly set forth herein but solely as owner trustee) with its principal place of business at 260 North Charles Lindbergh Drive, MAC: U1240-026, Salt Lake City, UT 84116, United States of America ( “Lessor” ); and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (previously known as Concesionaria Vuela Compañía de Aviación, S.A. de C.V.), a sociedad anónima promotora de inversión de capital variable (previously, a sociedad anónima de capital variable) organized under the laws of Mexico ( “Lessee” ).
WHEREAS:
 
(A)	On the terms and conditions of an Engine Lease Agreement dated 28 June 2007 (as amended, assigned, assumed, modified and supplemented from time to time) (the “ ELA ”), incorporating by reference the terms of an Engine Lease Common Terms Agreement dated as of June 28, 2007 between GE Commercial Aviation Services Limited (now known as GE Capital Aviation Services Limited) and Lessee (the “ Common Terms Agreement ” or “ CTA ”), as amended, modified or supplemented from time to time (collectively, the “ Lease ”), Lessee has on lease from Lessor one (1) IAE V2527M-A5 engine bearing serial number V12671 (the “Engine” )	
 
(B)	Lessor and Lessee wish to enter into this Agreement for the purpose of amending the Lease as provided below and in particular to extend the term of the Lease until 28 February 2018.	
IT IS AGREED as follows:
 
1.	INTERPRETATION	
Definitions : Capitalised terms used but not defined in this Agreement shall mean the same as when used in the Lease. References to a Clause or Schedule, unless otherwise stated, are references to clauses and schedules of this Agreement.
 
2.	REPRESENTATIONS AND WARRANTIES	
Lessor and Lessee now repeat the representations and warranties they made in the Lease, though as if made with reference to the facts and circumstances now existing and the references in such representations and warranties to “this Agreement” shall instead be construed as references to the Lease as hereby amended.
 
3.	LEASE AMENDMENTS	
Subject to satisfaction of the conditions precedent specified in Clause 4 below (or as otherwise indicated below):
 
 	(a)	Lease extension : The period for which the Engine is leased to Lessee pursuant to the Lease is extended from 28 February 2013 to 28 February 2018. Accordingly, the definition of “Scheduled Expiry Date” in Section 1.1 of the ELA shall be amended and restated as “ Scheduled Expiry Date means 28 February 2018”.	
 
 	(b)	Rent : Effective from 01 March 2013 (the “ Extension Date ”) until the expiration of the Term, Part III of Schedule B of the ELA shall be amended and restated in its entirety to read as follows:	
“The Rent payable in respect of each Rental Period during the Term shall be *****, payable in advance on each Rent Date.”
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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 	(c)	Agreed Value : Effective from 01 March 2013 (the “ Extension Date ”) until the expiration of the Term, the definition of Agreed Value in Part I of Schedule B of the ELA shall be amended and restated in its entirety to read as follows:	
“Agreed Value *****, it being agreed, however, that, notwithstanding the foregoing, the Agreed Value shall be decreased by ***** on and with effect from each anniversary of the Delivery Date during the Term.”
 
 	(d)	Supplemental Rent Definitions : The Lease shall be further amended as follows:	
 
 	(i)	The definition of Assumed Ratio in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Assumed Ratio means a ***** ratio (*****).”
 
 	(ii)	The definition of Assumed Ratio Adjustment in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Assumed Ratio Adjustment : For the purposes of Section 5.4 (Supplemental Rent) of the CTA, any adjustment from the Assumed Ratio shall be based upon the following table:

Ratio	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	
Engine Supplemental Rent Rate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
 	(iii)	The definition of Engine LLP Supplemental Rent in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
Engine LLP Supplemental Rent means in respect of the LLP for each Engine ***** for each Engine Cycle operated by that Engine during that calendar month or any part of such calendar month during the Term.
 
 	(iv)	The definition of Engine Supplemental Rent Rate in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Engine Supplemental Rent Rate : means in respect of the Engine, ***** for each Engine Flight Hour (or fraction thereof) operated by that Engine, regardless of whether the Engine is operated at a thrust rating of ***** or ***** during the Term.”
 
4.	CONDITIONS PRECEDENT	
 
4.1	Lessee shall provide the following, which are conditions precedent to Lessor’s obligations under this Agreement, in form and substance satisfactory to Lessor within 30 days from the date hereof (or as otherwise indicated below).	
 
 	(a)	Corporate Documents : a copy of the resolutions of the shareholders of Lessee approving the terms of, and transactions contemplated by, this Agreement, resolving that it enter into this Agreement, and authorising a specified person or persons to execute this Agreement;	
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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 	(b)	Approvals : evidence of the issue of each filing, approval, license and consent which may be required by applicable Law in relation to, or in connection with the performance by Lessee of any of its respective obligations under this Agreement and the transactions contemplated by this Agreement;	
 
 	(c)	Insurances : certificates of insurance, an undertaking from Lessee’s insurance broker and other evidence satisfactory to Lessor of Lessee’s due compliance with the provisions of the Lease (as amended hereby) regarding Insurances;	
 
 	(d)	Process Agent Letter : Receipt by Lessor of evidence that the process agent appointment is extended to the new Schedule Expiry Date, i.e. 28 February 2018 or a new process agent has been appointed until that date;	
 
 	(e)	Filings : evidence of a filing and registration of this Agreement with the Air Authority and the International Registry; and	
 
 	(f)	Legal Opinion : a legal opinion from Lessee’s counsel acceptable to Lessor confirming that Lessee has received all required corporate approvals for this Agreement and that the person executing and delivering this Agreement on behalf of Lessee has the requisite corporate authority to do so and further confirming that this Lease and Lessee’s obligations thereunder are enforceable in accordance with their terms.	
Lessor’s obligations under this Agreement shall only take effect when Lessor notifies Lessee in writing ( “Lessor Notice” ) that Lessor is satisfied that the above conditions have been fulfilled.
 
4.2	Further Conditions Precedent : Lessor’s obligations under this Agreement are also subject to the conditions precedent that as of the date of the Lessor Notice: (a) the representations and warranties of Lessee (both under Clause 2 of this Agreement and under the Lease) shall be true and correct and (b) no Default shall have occurred and be continuing or might result from the leasing of the Engine to Lessee.	
 
4.3	Waiver : The conditions specified in this Clause 4 are for the sole benefit of Lessor and may be waived or deferred (in whole or in part and with or without conditions) by Lessor.	
 
5.	MISCELLANEOUS	
 
5.1	Further Assurances : Lessee agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purpose of this Agreement.	
 
5.2	Counterparts : This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by fax or email will be deemed as effective as delivery of an originally executed version. Any party delivering an executed version of this Agreement by fax or email shall also deliver an originally executed counterpart but the failure to do so will not affect the validity or effectiveness of this Agreement.	
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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5.3	Governing Law and Jurisdiction : This Agreement and all non contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the Governing Law, and the provisions of Sections 15.8 (Governing Law; Jurisdiction; WAIVER OF JURY TRIAL) of the CTA shall apply to this Agreement as if set out in full.	
 
5.4	Variation : The provisions of this Agreement shall not be varied otherwise than by an instrument in writing executed by or on behalf of Lessor and Lessee.	
 
5.5	Invalidity of any Provision : If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
 
5.6	Costs and Expenses : Each party shall bear its own fees, costs and expenses in connection with the preparation, negotiation and completion of this Agreement and performance of the transactions contemplated hereby.	
 
6.	CONTINUATION OF LEASE	
Save as expressly amended by this Agreement, the Lease shall continue in full and unvaried force and effect as the legal, valid and binding rights and obligations of each of Lessor and Lessee enforceable in accordance with their respective terms.
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first above written.
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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IN WITNESS WHEREOF, the parties hereto have executed this Engine Lease Extension & Amendment Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Engine Lease Extension & Amendment Agreement.
LESSOR:

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (not in its individual capacity, except as expressly set forth herein,	
but solely as Owner Trustee under the Trust Agreement)	
		
By:	 	/s/ Jessi Saba Mussali	
		
Name:	 	Jessi Saba Mussali	
		
Title:	 	Attorney in Fact	
		
Signed at:	 	 	
LESSEE:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,	
		
By:	 	/s/ Mario E. Geyne	
		
Name:	 	Mario E. Geyne	
		
Title:	 	Financial and Fleet Planning Director	
		
Signed at:	 	 	

Exhibit 10.52
[Translation for information purposes only]
REVOLVING CREDIT LINE AGREEMENT
REVOLVING CREDIT LINE AGREEMENT (THE “ AGREEMENT ”) DATED JULY 27, 2011, ENTERED INTO BY AND BETWEEN DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS TRUSTEE OF TRUST NUMBER F/1498, REPRESENTED HEREIN BY CARLOS JÁUREGUI BALTAZAR (HEREINFATER THE “ BORROWER ”); BANCO SANTANDER (MEXICO), S.A., INSTITUCIÓN DE BANCA MÚTLIPLE, GRUPO FINANCIERO SANTANDER, (“ SANTANDER ”, OR THE “ ADMINISTRATIVE AGENT ”) REPRESENTED HEREIN BY MAURICIO REBOLLEDO FERNÁNDEZ AND OSVALDO RANCÉ CACHAFEIRO, AS LENDER AND ADMINISTRATIVE AGENT AND BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (“ BANCOMEXT ”), REPRESENTED HEREIN BY EDUARDO MUÑIZ JUÁREZ AND RICARDO RAMOS SAN MARTÍN, AS LENDER (HEREINAFTER SANTANDER AND BANCOMEXT MAY BE REFFERRED TO COLLECTIVELY AS THE “ BANKS ”, OR INDIVIDUALLY AS, APPLICABLE, THE “ BANK ”); AND CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., REPRESENTED HEREIN BY FERNANDO SUÁREZ GERARD (HEREINAFTER REFERRED TO AS “ CONTROLADORA ”) AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., REPRESENTED HEREIN BY FERNANDO SUÁREZ GERARD (HEREINAFTER “ CONCESIONARIA ”, HEREINAFTER, CONTROLADORA AND CONCESIONARIA, MAY BE REFERRED TO, INDIVIDUALLY, EACH A “ JOINT OBLIGOR ”, AND JOINTLY THE “ JOINT OBLIGORS ”), PURSUANT TO THE FOLLOWING RECITALS, REPRESENTATIONS, DEFINITIONS AND CLAUSES:
RECITALS
I. On October 28, 2005, Controladora, as the original purchaser (the “ Original Purchaser ” named the original purchaser in the Original Purchase Agreement), and Airbus S.A.S. (“ Airbus ”) as seller (the “ Seller ”, named seller , in the Original Purchase Agreement) entered into an aircraft purchase agreement (named Purchase Agreement “ Original Purchase Agreement ”), pursuant to which, in accordance with the terms and conditions set forth therein, Airbus agreed to sell and Controladora agreed to purchase and receive, among others, seven (7) Airbus aircraft, model A320 identified with rank numbers from 24 (twenty four) to 30 (thirty), along with its engines, manuals and technical documents related to each of them (the “ Financed Aircraft ”, named as the Financed Aircraft in the Step-In Agreement referred in recital VI of this Agreement), as described with more detail in the Original Purchase Agreement which, together with other aircraft, were the object of the Original Purchase Agreement.
II. On July 27, 2011, Controladora as trustor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee, entered into an irrevocable trust agreement identified with number F/1497, (the “ Trust PDP Santander/Bancomext 1 ”), for the purpose stated in such document.

III. On July 27, 2011, once the Trust PDP Santander/Bancomext 1 has been executed, Controladora, the trustee of the Trust PDP Santander/Bancomext 1, as the immediate purchaser, and Airbus, entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircraft (defined in the Step-In Agreement as the “ First PA Novation ”) in order to partially novate and amend the terms of such Original Purchase Agreement (defined in the Step-In Agreement as the First Novated Purchase Agreement) (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement ”). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement, Airbus agreed to sell and the Trustee of the Trust PDP Santander/Bancomext 1 agreed to purchase and to receive the Financed Aircraft, pursuant to the First Novated Purchase Agreement, which would become part of the Trust PDP Santander/Bancomext 1 assets in trust.
IV. On July 27, 2011, in accordance with the instructions and powers granted in favor of the Trustee of the Trust PDP Santander/Bancomext 1, such Trustee, as Trustor and acting exclusively as trustee under said Trust PDP Santander/Bancomext 1, entered into, with Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trustee, the irrevocable Administration trust number F/1498 (the “ Trust PDP Santander/Bancomext 2 ), for the purpose set forth therein.
V. On July 27, 2011, in accordance with the instructions and powers granted in favor of the trustee of the Trust PDP Santander/Bancomext 1 and of the trustee of the Trust PDP Santander/Bancomext 2, them and Airbus, entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircraft (defined on the Step-In Agreement as the Second PA Novation) (the “ Second PA Novation ”), to partially novate and amend the terms of such First Novated Purchase Agreement (defined in the Step-In Agreement as Second Novated Purchase Agreement (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement ” and together with the Purchase Agreement and the First Novation, the “ Novated Purchase Agreement ”), as well as to assign all rights and obligations part of the assets in trust of the Trust PDP Santander/Bancomext 1 estate in favor of the assets in trust of the Trusr PDP Santander/Bancomext 2, for the purposes set forth in the applicable agreement and in order to set forth the terms and conditions under which Airbus agreed to sell and the Trustee of the Trust PDP Santander/Bancomext 2 agreed to acquire and receive the Financed Aircraft in accordance with the Second Novated Purchase Agreement, in order to become a part of the assets in trust of the Trust PDP Santander/Bancomext 2.
VI. On July 27, 2011, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee of the Trust PDP Santander/Bancomext 2, Santander, as the Administrative Agent, Airbus and Controladora, entered into a Step-In Agreement (the “ Step-In Agreement ”), in order to, in certain cases, grant and acknowledge certain rights in favor of the Banks pursuant to the Second Novated Purchase Agreement.
 
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VII. By virtue of the execution of Trust PDP Santander/Bancomext 2, in accordance with the instructions and powers granted in favor of its Trustee, as well as in accordance with the purpose set forth therein, the Fiduciary of the Trust PDP Santander/Bancomext 2 is empowered to enter into this Agreement in order for the Trust PDP Santander/Bancomext 2 obtains financing in the terms and subject to the conditions set forth in this Agreement.
REPRESENTATIONS
I. Santander represents, through its representatives, that:
a. It is a corporation duly organized in accordance with the laws of Mexico, authorized by the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público ) to act as a Multiple Lendering Institution.
b. Its legal representatives have sufficient power and authority necessary to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of its represented by means of the documents that are hereby transcribed on the Section of Personality of this Agreement.
II. Bancomext represents, through its representatives, that:
a. It is a national corporation duly organized in accordance with the Organic Law of the External Commerce National Bank ( Ley Orgánica del Banco Nacional de Comercio Exterior ), published in the official gazette on January 20, 1986 .
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of the Lender by means of the documents that are hereby transcribed on the Section of Personality of this Agreement.
III. The Borrower represents, through its representatives, that:
a. It is a trust duly created and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and authority to execute this Agreement, which have not been revoked, limited or modified whatsoever.
c. On July 27, 2011, in accordance with the instructions given and powers granted in favor of the trustee of the Trust PDP Santander/Bancomext 1, it executed with the Trustee of the Trust PDP Santander/Bancomext 2, as trustee, the Trust PDP Santander/Bancomext 2.
d. Pursuant to the above, this Agreement is entered into by the Trustee not in its individual capacity but solely as Trustee of the Trust PDP Santander/Bancomext 2, in
 
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accordance with its terms, in compliance with the purposes thereof and in exercise of the powers and authority that were granted as Trustee. The representations and commitments in accordance with this Agreement should not be construed as representations and commitments made individually by the Trustee, nor do they have the purpose or the intention to bind the Trustee personally, but they are made and intended to bind only the assets in trust of the Trust PDP Santander/Bancomext 2.
e. By affecting in trust to the Trust PDP Santander/Bancomext 2 mentioned in the paragraph above, the Trustee of the Trust PDP Santander/Bancomext 1 acting as Trustor will transfer to the assets in said Trust PDP Santander/Bancomext 2, among other things, the property following rights and assets: ( i ) all the rights and obligations under the Original Purchase Agreement on the Financed Aircraft, as may have been amended pursuant to the First Novation and Second Novation; (ii)  the property to the Financed Aircraft, once such aircraft have been delivered by Airbus pursuant to the provisions set forth in the Second Novated Purchase Agreement; (iii)  the exclusive property to the interest reserve account as provided herein; (iv)  the property upon any net resources received by the Trust PDP Santander/Bancomext 2 estate, whether they are distributions, capital contributions, proceeds obtained from financing or from investments of liquid assets forming part of the assets in trust in the Trust PDP Santander/Bancomext 2; (v)  the product or products substituting any of the assets in trust in the Trust PDP Santander/Bancomext 2; and (vi)  any other rights or assets forming part of the assets in trust in the Trust PDP Santander/Bancomext 2 (the “ Assets in Trust PDP Santander/Bancomext 2 ”), representing herein, that on the date of execution of this Agreement, said Assets in Trust PDP Santander/Bancomext 2 have not been modified in any way, as well as that the Agreements assigned as part of such assets in trust are in full force and effect.
f. The obligations in accordance with the Operative Documents are legal, valid, binding and enforceable.
g. The execution and fulfillment of the operations referenced in this Agreement or in the Operative Documents of which it is a part of, are not and will not be in any conflict with (i) any applicable law or regulation, (ii) the Trust PDP Santander/Bancomext 2 or (iii) any agreement or instrument to which the Borrower or its assets is subject to.
h. It doesn’t require any authorization or that may be advisable to obtain in order to fulfill its obligations under this Agreement and in accordance with any of the Operative Documents of which it is a part of.
i. It is not required to carry out any process to formalize the agreement of the parties in accordance with this agreement and in accordance with the Operative Documents to which it is or will be a part of n such date and none of the documents requires registry in any court or government office in Mexico nor is it required to pay any tax under any of the Operative Documents of which it is or will be a part of, in order to formalize them and perfect the rights and obligations of the parties under them, as well to be enforceable among the executing parties.
 
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k. It has carried out the on time payment of all taxes of the Borrower and/or its assets and there is no tax pending to be paid by it; it has carried out the presentation of its tax returns and there is no delay in them.
l. In addition to the operations and documents set forth in this Agreement, it has not entered into any operation or business or carried out any activity except for those expressly allowed by this Agreement, and has not entered into any agreement that is not a part of the Operative Documents.
m. The execution of and fulfillment of the obligations under the Operative Documents will not result or reasonably be expected to result in an Event of Default under this Agreement.
n. Its obligations in accordance with the Operative Documents of which it is or will be a part of, are and have the same preference in payment ( pari passu ) with respect to the rest of its non-guaranteed non-subordinated obligations acquired with third parties, except by those set forth in applicable law.
o. There is no and to its knowledge no litigation, arbitration or proceeding has initiated before any tribunal or court against the Borrower.
p. It has no right to claim in its favor or in favor of its assets, any immunity of jurisdiction right, execution, embargo, enforceability or other legal process with respect to nay procedure carried out in accordance with this Agreement or the Operative Documents.
IV. Each of the Joint Obligors represents, through its representative, that:
a. It is a corporation ( sociedad anónima promotora de inversion de capital variable ) duly organized and validly existing in accordance with the laws of Mexico.
b. Its representative has the power and authority to execute this Agreement in accordance with the special powers granted to them for such effects, which have not been revoked, modified or limited in any manner whatsoever.
c. The execution and fulfillment of this Agreement is authorized under its charter and the execution and compliance with the obligations set forth herein have been duly authorized by all relevant corporate bodies, and do not violate: (i) its current corporate bylaws or (ii) any law, regulation or executive order binding for Controladora or Concesionaria or (iii) any agreement, amendment or instrument binding Controladora or Concesionaria or its assets.
 
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d. It doesn’t require authorization or registration from or before any governmental authority or governing body to execute, deliver, and fulfill, by Controladora and Concesionaria, with this Agreement.
e. This Agreement and the Trust PDP Santander/Bancomext 1 constitute valid, enforceable, and binding obligations of Controladora and Concesionaria, respectively, enforceable against them in accordance with its terms.
f. There is no pending, or to the best of Controladora and Concesionaria’s knowledge, there is no proceeding before any court, whether judicial, administrative or arbitral, including, without limitation, in environmental, fiscal or labor law that may result in a Material Adverse Change pr affect the fulfillment of its obligations under this Agreement.
g. On October 28, 2005, Controladora entered into the Original Purchase Agreement.
h. On July 27, 2011, Controladora, acting as the trustor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee, entered into the Trust PDP Santander/Bancomext 1.
i. They have requested Santander and Bancomext to establish and grant in favor of the Borrower a revolving line of credit of up to a principal amount that will not exceed the amount set forth in the First clause, which shall be made available to the Borrower in different disbursements during the Availability Period, regarding each Aircraft, as set forth in Annex I of this Agreement.
j. No Event of Default has occurred, nor has any condition on on or before the date of this Agreement, or on the date of execution of the Trust PDP Santander/Bancomext 1 that has or could have a Material Adverse Change on its business, assets, liabilities, or financial situation or of any other nature of Controladora and/or Concesionaria, that could affect the results of its operations, business or projects of Controladora and/or Concesionaria or that may restrict or impede Controladora and Concesionaria to fulfill its obligations under this Agreement and the Trust PDP Santander/Bancomext 1, as applicable.
k. There has not occurred an Event of Default or any condition of any party under the Original Purchase Agreement, the First Novation or the Step-In Agreement that may affect the Financed Aircraft, nor has there been any amendment to the First Novation that may result in a Material Adverse Change under this Agreement.
l. It acknowledges and accepts the following: (i) the accuracy and authenticity of the representations under the Trust PDP Santander/Bancomext 1; (ii) the validity and enforceability of this Agreement, the Original Purchase Agreement and the Trust PDP Santander/Bancomext 1 as well as the obligations of Controladora and Concesionaria, as applicable, thereunder (iii) the validity, legal effect and enforceability of the Step-In
 
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Agreement and the First Novation, as well as the novation under such agreement of the rights and obligations of the Original Purchase Agreement, and recognizes it didn’t reserve any enforceable rights that may modify the terms under such agreements, (iv) that the Step-in Agreement and the Original Purchase Agreement contain substantially the same terms, conditions and obligations with respect to the Financed Aircraft (including without limitation, with respect to: the terms and conditions related to the delivery of the Financed Aircraft, delivery dates, price of the Financed Aircraft, escalation formulas and additional costs, technical specifications, covenants, penalties, etc.) and (v) there are no obligations of the Borrower pursuant to the First Novation or the Second Novation that have a consequence that the Borrower must fulfill with obligations covenants substantially more burdensome than those set forth in the Original Purchase Agreement.
m. This Agreement and Operative Documents entered into in connection thereof, once executed, shall constitute legal and valid obligations of the Joint Obligor, enforceable against the Borrower and each Joint Obligor in accordance with its terms subject to the laws of Mexico regarding concursos mercantiles , bankruptcy or that may limit the rights creditors in general.
n. All of its tax returns (regarding any period) of each Joint Obligor and those of its subsidiaries (as such term is defined herein) that in accordance with the applicable legislation ought to and have been filed, and all taxes, rights, and other contributions in connection with their incomes, sales or assets of which the Joint Obligors and any of their subsidiaries should be aware of or should be withheld have been withheld, except for those that have been contested in good faith and are pending resolution by a competent authority.
o. It is in compliance with all laws, regulations, statutes, orders, decrees and other precepts applicable, as well as all restrictions applicable, imposed by any governmental authority, except for those which fulfillment is not, or may not reasonably be expected to, individually or jointly, have a Material Adverse Change (as defined herein) in its business, rights, assets or financial situation, or that in any other form may affect the validity and enforceability of this Agreement.
p. Its consolidated financial statements, where applicable, and audited to December 31, 2010 and its consolidated financial statements, where applicable, interim to March 31, 2011, copy of which have been delivered to the Banks, reflect correctly, sufficiently and reasonably its consolidated financial situation to such dates, and they have been prepared in accordance with the accounting principles applicable to them, applied constantly, and to the date of this Agreement, there has not occurred a Material Adverse Effect in the financial situation, operations, projects of each Joint Obligor regarding the financial situation reflected in such financial statements.
q. It is Solvent.
r. Its payment obligations under this Agreement constitute direct and unconditional obligations and except for the specified guarantees granted herein, they have and will
 
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have at least the same legal treatment and rights ( pari passu) with respect to all other unsecured, unsubordinated debt present or future (except for preferred payment obligations in accordance with applicable law).
s. On the date hereof, neither the Joint Obligors or its subsidiaries, if any, is in default with respect to any debt, or any agreement whatsoever to which they are a party to or that obligates them, and that such default results or may be reasonably expected to result in a Material Adverse Change upon each Joint Obligor or its subsidiaries, if any.
t. The Joint Obligors and each of its subsidiaries (i) has good title to all property material to its business, (ii) has all necessary federal or local licenses, certificates, and authorizations in order to run business and to undertake any action in connection with its property as they are now being operated, and (iii) has insurance from reputable insurance companies, up to the amounts and with risk coverage for each Joint Obligor and in accordance with the industry business for similar companies with similar assets in same or similar business areas in which each of the Joint Obligors or its subsidiaries operate.
u. Both the Joint Obligors and any subsidiaries that have employees, have entered into collective bargaining agreements, which are in full force and have been fully complied with, and to this date and to the best of its knowledge there are no collective labor claims, to date, that threaten either of Joint Obligors or any of its subsidiaries.
v. Both the Joint Obligors and its subsidiaries, are in compliance with social security, worker housing, and retirement regulations, and similar provisions, and none of them have debts with any governmental authority whatsoever or with their workers in such matters, except for those that have been contested in good faith and that are pending resolution from the competent authorities.
w. All outstanding capital stock shares have been validly issued and fully paid, and there are no rights over such shares in favor of any person other than the shareholders.
x. Except for the loan agreements entered into International Finance Corporation , Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa and Pasprot, S.A. de C.V., there is no agreement in which the Joint Obligors or any of its subsidiaries are a party to, that directly or indirectly limits or restricts, or that imposes any condition regarding, the returns, dividend payments, or other contributions in connection with any class of shares of any subsidiary of either of the Joint Obligors, or the granting if loans, disposing of or transferring any property of any subsidiary.
y. Both the Joint Obligors and any of its subsidiaries are in full possession of all necessary licenses, franchises, patents, copyrights, and brands, or any other necessary rights, in order to operate their business as to date and s it intends to operate it and does not violate any rights of others in connection with any of such matters.
z. It intends to execute this Agreement in order to be bound with Santander and Bancomext in the fulfillment of all the payment obligations of the Borrower pursuant to
 
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it. Therefore, it is their intention to act as joint obligors with respect of such payment obligations, as well as to execute as a joint guarantor of applicable promissory notes under this Agreement.
aa. The process agents to receive notices that they are obligated to appoint confirm the Operation Documents have been appointed and have accepted their appointment to this date.
DEFINITIONS
The terms used in this Agreement that have initial capital letter, whether they are or not in quotation marks, including those contained in the representations or any other part of this Agreement, as well as those detailed herein, shall have the following meanings, which may be equally applicable in plural or singular.
“Borrower” means Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as Trustee in the Trust Number F/1498.
“Notice of Change of Specifications” has the meaning set forth in the Step-In Agreement.
“Banks”, mean Banco Santander (México), Sociedad Anónima, Institución de Banca Múltiple, Grupo Financiero Santander and Banco Nacional de Comercio Exterior, Sociedad Nacional de Crédito, as well as their respective successors and assigns, as parties to this Agreement and “Bank” shall mean each of Santander and Bancomext, as well as their respective succesors and assigns, as applicable.
“Material Advserse Change” means a change of any nature that significantly and adversely affects the financial or operational condition, the results, prospects, businesses and assets, as well as the fact that the Agreement, the Trust Agreement, and/or any document related directly or indirectly with the Agreement turns out to be illegal, null or not enforceable, and as a result the Borrower and/or Joint Obligors are not able to fulfill its obligations under this Agreement or any other document related directly or indirectly to this Agreement.
“Netting Letter”, means the document named Netting Letter that Airbus, the Borrower and Controladora will execute.
“BFE Agreements” means, with respect to each and all of the Financed Aircrafts, the agreements related to equipment installed in the Financed Aircrafts and delivered to the Buyer by Airbus (named “ Buyer Furnished Equipments ” o “BFE”), including the guarantees obtained by the Borrower and the Joint Obligors relating to them.
“SSBFE Agreement” means the agreements named Seller-Supplied Buyer Furnished Equipment with respect to the Financed Aircrafts.
 
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“Structuring Commission” has the meaning set forth in the third paragraph of the First clause of this Agreement.
“IAE Engine Support Letter Agreement” means the document named Engine Support Letter Agreement entered into by IAE International Aero Engines AG, Controladora, Concesionaria and the Administrative Agent regarding the engines installed in each of the Financed Aircrafts.
“Loan Agreement” or “Agreement” means this revolving credit line agreement.
“Checking Account” means the deposit and account administration agreement ser forth in Annex 4 herein and that the Borrower has with the Bank in which the amount of the disbursements of the Loan will be deposited.
“Business Day” means any day in which the Mexican banking institutions are not authorized to close.
“Disbursement” means each disbursement of the Loan, made by the Borrower during the Availability Period in accordance with this Agreement.
“Operative Documents” means this Agreement, its Annexes, the Trust PDP Santander/Bancomext 1, the Trust PDP Santander/Bancomext 2, the Step-In Agreement, the First Novation, the Second Novation, the Promissory Notes, the IAE Engine Support Letter Agreement and the Netting Letter that parties enter into related to them.
“Dollars” means dollars, currency valid in the United States of America.
“Evento de Incumplimiento” o “Incumplimiento” significa cualquier evento o circunstancia de las descritas en la Cláusula Décima Novena.
“Airbus Event of Termination” has the meaning set forth in the Step-In Agreement.
“Date of Disbursement” means, with respect to a Disbursement, the date in which such Disbursement is or must be made.
“KYC” means with respect to the Borrower and each of the Joint Obligors, the documents and information requested by the Banks in order to comply with the legal and internal dispositions regarding the “ know your customer ” policies and all other related to avoid money laundering.
“Mexico” means the United Mexican States.
“Interests Period” means the period to determine interests on each disbursement of the Loan, based on which the accrued interests of the unpaid balance of the Loan are calculated, in the understanding that the initial “Interests Period” shall begin on the date in which the Loan disbursement is made and will en don the day that numerically
 
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corresponds to such date on the third following month and each following “Interests Period” shall begin on the next day of the last day of the “Interests Period” that has lapsed and will end on the one numerically corresponding to such day of the following third month.
“Maximum Term of Disbursement” means December 31, 2013.
“Disbursement Request” means the document with which the Borrower requests the Banks to make a Loan Disbursement in terms substantially equal to the document hereby attached as Annex “2” and that is delivered to the Administrative Agent in the domicile set forth in this Agreement.
“Solvent” means with respect to each Joint Obligor, at any time, that each Joint Obligors not within the causes to be declared in concurso menrcantil in accordance with the terms of articles 9, 10 and 11 if the Ley de Concursos Mercantiles (or any legal disposition that substitutes it).
“Ordinary Interest Rate” means oa rate equivalent to the LIBOR Rate plus the sum of 265 (two hundred and sixty five) base points to be calculated at the beginning of each Interests Period.
“LIBOR Rate” means, with respect to each Interests Period, the rateo r arithmetic average of the interests rates for United States Dollars (rounded up to the next eighteenth of percent point) listed in the Libor Page (as such term is defined herein) in the date of the beginning of Interests Period as corresponding to the maturity of 3 (three) months at 11:00 A.M., hour of London, England, the Libor Day prior to the commencement of the applicable (as “Libor Day” is defined herein). For the effects of this definition, (i) “Libor Page” means the 3750 screen of the Dow Jones Telerate Service named “British Banker Association Interest Settlement Rates”, or the screen that substitutes it on such Service, and (ii) “Libor Day” means a day in which at least one interest rate for United States Dollars is listed in the Libor Page. The parties agree that the Interest Rate may be modified each Interests Period in accordance with the variations of the LIBOR Rate. The Borrower accepts all adjustments based on the terms set forth herein that may result without the need to amend this Agreement.
“Alternate Dollars Rate” means the Prime rate published in The Wall Street Journal precisely on the date in which the determination of such rate is made. If for any reason, the interest Prime rate is not published for such newspaper on the date set forth herein or in case such newspaper is not published in such date, then “Prime Rate” will be the average of the Prime rates offered by Bank of America, N.A . or Citibank, N.A., precisely on the date in which such interest rate must be determined in accordance with this Agreement. Any modification to the Prime rates in accordance with the above, will be fully enforceable against the parties on the Business Day in which the modification is published.
 
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Based on the foregoing Representations and Definitions, the parties herein agree as follows:
CLAUSES
FIRST.- PURPOSE AND CREDIT AMOUNT.- Pursuant to the provisions herein, Santander and Bancomext shall make available to the Borrower a revolving line of credit (the “ Credit Line ”) that will not exceed a total amount of US$62,714,000 (sixty two million seven hundred fourteen thousand Dollars 00/100), as follows: i) Santander will grant in favor of the Borrower a revolving line of credit up to an amount of US$37,714,000 (thirty seven million seven hundred fourteen thousand Dollars 00/100) (the “ Santander Portion ”), and ii) Bancomext will grant in favor of the Borrower a revolving line of credit up to an amount of US$25,000,000 (twenty five million Dollars 00/100) (the “ Bancomext Portion ”). Within the Credit Line amount shall not be comprised of commissions, interests, and expenses payable to the Borrower under this Agreement.
Any principal amount of the Revolving Credit Line that is repaid may be Disbursed again until the date of conclusion of the Maximum Term of Disbursement: (i) no Default has occurred, (ii) the disbursements are made in accordance with the format found in Annex 1 of this Agreement, and (iii) the conditions set forth in the Fourth clause of this Agreement have been fulfilled.
The Borrower will pay the Banks, upon the initial disbursement made in accordance with the conditions set forth in Annex 1, a Structuring Fee equivalent to the amount that results from calculating a 1.50% (one point fifty percent) of the Credit Line amount (the “ Structuring Fee ”). The Structuring Fee shall be paid with the resources of the first Disbursement in the following manner: (i) Bancomext shall receive a commission equal to the amount that results of calculating a 1.00% (one percent) of the Bancomext Portion, and (ii) Santander shall receive the remainder of the Structuring Fee. The Value Added Tax (V.A.T.) resulting from these payments shall be made by the Borrower and shall be paid to each Bank, as applicable, together with the payment of the corresponding amount of the Structuring Fee.
SECOND.- USE.- The Borrower, is obligated to use the total amount of this Credit to the payment and fulfillment of the obligations assumed by the Borrower in the Second Novation Agreement of the Original Purchase Agreement of the Financed Aircraft, including the repayment set forth in the Netting Letter, being the Borrower obligated to fulfill completely the purposes set forth in such Trust PDP Santander/Bancomext 2 and to the terms of the Step-In Agreement.
THIRD.- CREDIT TERM.- Subject to the terms set forth in the Seventh clause of this Agreement, the Credit Line term shall be 41 (forty one) months, meaning until December 31, 2014, from the execution date of this Agreement and up until the Maximum Term of Disbursement. Notwithstanding the foregoing, and subject to the terms set forth in the Seventh clause of this Agreement, the Banks may exercise the rights set forth in the Eighteenth clause for any disbursement made hereunder.
 
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FOURTH.- CONDITIONS FOR THE CREDIT DISBURSEMENT.- (1)  Initial Disbursement . The Borrower may use the Initial Disbursement, once the following documents have been delivered to the Administrative Agent:
a. Delivery of information . The Borrower and the Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent: (i) copies of documents demonstrating the valid existence and powers granted in favor of their legal representatives; (ii) copies of the financial statements or trust’ estate balance sheet, as applicable, required by the Banks, and (iii) any other information reasonably required by the Banks for their analysis and compliance with internal regulation such as KYC forms.
b. Approval of the Operation . The Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent, copies of the resolutions of their internal government bodies to carry out: (i) the execution of this Agreement, (ii) if applicable the granting of any guarantees as may be required under this Agreement.
c. Legal opinions . The Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent, a legal opinion of its General Counsel directed to the Banks in which the following, among other, is confirmed, in accordance with Mexican Law: (i) the legal existence of the Borrower and the Joint Obligors, (ii) the validity of the powers granted to their legal representatives to enter into this Agreement, and (iii) the valid execution of the Operative Documents in which the Joint Obligors are a party and f the Obligations set forth for each of them in accordance with them.
d. Payment of fees and expenses . The Borrower has paid any and all fees, costs, and expenses that have arisen in accordance with this Agreement and the opening of the Interest Reserve Account or, if applicable, authorize to be settled against it such amounts from the Credit Line amounts to be disbursed by the Borrower.
e. Operative Documents . The Borrower and the Joint Obligors have delivered, in form and content reasonably satisfactory for the banls, each Operative Document, with the exception of the First Novation and the Second Novation, duly entered into by each party in accordance with its terms.
f. Veracity of the Representations; asbsence of Default . That the Borrower and each of each of the Joint Obligors have confirmed, in terms of the format annexed herein as Annex 5, that on the corresponding Date of Disbursement: (i) all representations made by them are true and correct, (ii) there is no Default nor any Default may arise from the corresponding Disbursement, (iii) no Event of Termination pursuant to the Purchase Agreement exists and (iv) the Purchase Agreement, the First Novation and the Second Novation are valid.
 
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g. Promissory Notes . The Borrower and the Joint Obligors have delivered to the Administrative Agent the Promissory notes issued in favor of each of the Banks, in a format substantially similar to the attached hereto as Annex 3, executed by the Borrower, as debtor, and by the Joint Obligors, as guarantors, for the amount of each Disbursement, to be made by each Bank (jointly, the “ Promissory Notes ” and, each a “ Promissory Note ”). The applicable Promissory Note will contain the date of execution, the corresponding Disbursement date and its final expiration shall be the Expiration Date. The parties agree that in case of any discrepancy between the terms of this Agreement and the Promissory Notes, the terms set in this Agreement shall supersede.
Once the foregoing conditions shall be fulfilled, at the Administrative Agents consideration, it is obligated to communicate through electronic means to Bancomext that the conditions have been satisfactorily fulfilled in order to carry out the first Disbursement. Additionally, the Administrative Agent is obligated to send Bancomext the information that proves the fulfillment of the conditions, in a term of no less than 3 (three) Business Days prior to the date of the applicable disbursement.
2. Subsequent Disbursements . In order to carry out the subsequent Disbursements besides the payment of the fees and expenses payable to such date to the Banks pursuant to this Agreement, the Borrower or the Joint Obligors must deliver to the Administrative Agent the following documents and information, and the following assumptions must have been fulfilled:
a) A statement from Airbus that proves the amount and date of payment and pre-delivery set forth in the applicable Disbursement Request and that to such date there has not occurred an Airbus Event of Termination;
b) A certificate in terms of subparagraph f) 1 above.
c) That there is no amendment to the applicable law after the date of execution of this Agreement and no change in the circumstances in which it was entered into and nor is there a situation or condition that, in the reasonable opinion of each of the Banks, has as a consequence that the delivery of the applicable portion of the Credit Line for each Bank may be considered ilegal under applicable law; and
d) That the Borrower and the Joint Obligors have delivered to the Administrative Agent the applicable Promissory Notes corresponding to each Bank regarding each Disbursement.
Once the foregoing conditions shall be fulfilled, at the Administrative Agents consideration, it is obligated to communicate through electronic means to Bancomext that the conditions have been satisfactorily fulfilled in order to carry out the first Disbursement. Additionally, the Administrative Agent is obligated to send Bancomext the information that proves the fulfillment of the conditions, in a term of no less than 3 (three) Business Days prior to the date of the applicable disbursement.
 
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Asimismo, una vez cumplidas las condiciones anteriormente señaladas respecto de la Disposición inicial o las Disposiciones subsecuentes, la Acreditada podrá llevar a cabo una Disposición conforme a lo siguiente:
Additionally, once all of the foregoing conditions have been satisfied with respect to the initial Disbursement or the subsequent Disbursements, the Borrower may make a Disbursement as follows:
(i) The Credit shall be disbursed by the Borrower in accordance with the calendar applicable to each Financed Aircraft set for in Annex 1, in the understanding that: (i) the Banks will not be obligated to make available to the Borrower any amount once the Maximum Term of Disbursement has occurred and in excess of the Maximum Term of Disbursement and it is understood that the Borrower will not be authorized to make any disbursements in a larger number of Disbursements tan those set forth in Annex 1, (ii) the sum of the disbursements delivered to the Borrower will not exceed the amount available in the Credit Line in accordance with this Agreement, and un any case, each of the Disbursements, must be made within 5 (five) days, except for the first Disbursement which may be made within 2 (two) days, as of the fulfillment of each of the conditions and prior delivery to each of the Banks in the domiciles set forth in this Agreement, of a Request of Disbursement.
(ii) The Disbursement of the Credit will be made by the deposit that each of the Banks make of the amount that appears in each Request of Disbursement, in the Account set forth in Annex 4 that the Administrative Agent has for the Borrower. In the statement it will not be necessary to describe the motive or purpose if such deposits.
(iii) The Disbursement made by the Borrower pursuant to this Agreement shall be registered by the accounting records made by the Banks, therefore the parties herein agree that the accounting of the Banks and/or the Checking Account statements referred to in this clause constitute evidence of the Disbursement made by the Borrower, therefore once the Banks have deposited the requested amounts, it shall be understood that the Borrower has made a Disbursement up to the amount deposited or delivered in terms of this Agreements or those settled by the Banks in accordance with the instructions of the Borrower.
(iv) In order to effectuate each Disbursement, the Banks should consider the amount already disbursed to the Borrower as well as the total available amount of Credit at the time, in order to: (i) the revolving line of credit is given only in respect to the amounts that have been paid by the Borrower, and (ii) the Borrower does not disburse of any initial quantities nor has at its disposal a revolving amount that exceeds the total Credit Line or of the limit of Disbursements permitted under this Contract. “Disbursements limit” will mean the total of all amounts that are available under this Contract pursuant to the disbursements described in Annex 1 herein.
 
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FIFTH.- ORDINARY INTERESTS.- The Borrower shall pay the Bank, without prior request, ordinary interests on all outstanding amounts payable, which shall be calculated and payable per “Interests Period” at the Ordinary Interest Rate. The calculation of interest will be performed using the number of calendar days that have elapsed with a base year of three hundred and sixty (360) days. The interests will be calculated and payable quarterly on the last day of each Interest Period; in the understanding that , if such day is not a Business Day, the payment will be made on the Business Day immediately thereafter.
Notwithstanding the foregoing, the Borrower, the Joint Obligors and the Bank agree if the LIBOR Rate cannot be determined for a specific Interests Period, then: (a) the applicable interest rate will be the Alternate Rate in Dollars, or (b) in the event that the Alternate Rate in Dollars cannot be determined, the Banks, Borrower and the Joint Obligors shall negotiate in good faith and agree on the interest rate that will be used for the corresponding Interest Period, and (c) in the case that the parties do not agree on the applicable interest rate for the applicable Interests Period within 10 (ten) Business Days from the Determination Date for the interests, the Bank shall determine (and shall deliver to the Borrower and the Joint Obligors a certificate containing the basis for such determination) the applicable interest rate over such period reflecting the financial costs of the Banks, and such rate shall be applied for the applicable Interest Period.
SIXTH.- DEFAULT INTERESTS.- In the event of default on the payment of any amounts corresponding to the principal amount of the Credit Line, the Borrower shall pay to the Lender default interests over the outstanding capital at an interest rate equal to the result of multiplying the Ordinary Interest Rate, by 1.25 (one point twenty five) times, in the understanding that the default interests will be calculated on a daily basis over the entire default period.
SEVENTH.- AMORTIZATIONS.- The Borrower agrees to repay each of the Banks the amount of credit disbursed in consecutive payments on the dates and amounts set forth for each Financed Aircraft in Annex 1 herein and in each applicable Promissory Note. If on the date of delivery of a Financed Aircraft with which a Disbursement is related is modified, the Borrower will repay the Banks each Disbursement on the date that first occurs any of the following: (i) the effective date of delivery of the Financed Aircraft or (ii) December 31, 2014.
EIGHT.- PREPAYMENTS.- The Borrower is authorized to perform any prepayments on amounts owed or prepay the total amount of the Credit, without penalty or premium, and without requiring authorization from the Banks, as long as the Borrower notifies such prepayment with at least 10 (ten) prior Business Days, in the understanding that any prepayment shall be made for the amount corresponding for each Disbursement or in multiples of such payments as set forth in the Seventh clause of this Agreement. Prepayments may only be made on a date of payment of principal amount in accordance
 
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with the Promissory Note which amount is being paid, and must be for the total outstanding principal amount and interests corresponding to such Promissory Note. The prepayments shall be applied in accordance with the Ninth clause herein.
NINTH.- PAYMENTS IN GENERAL.- The amounts that the Borrower and the Joint Obligors pay to the Banks shall be applied to satisfy payment obligations in the following order:
 
 	(i)	expenses,	
 
 	(ii)	fees,	
 
 	(iii)	commissions,	
 
 	(iv)	default interests,	
 
 	(v)	ordinary interests, and	
 
 	(vi)	capital residuals.	
In the event that the date in which the Borrower must make any payment under this Agreement is not a Business Day, the Borrower shall pay such payment on the next “ Business Day ”, in the understanding that: (a) the relevant extension shall be taken into consideration in order to calculate the correspondent interests; and (b) the days corresponding to such extension shall not be added to the next “Interests Period”.
Interests shall be paid without any deduction and free of any tax, contributions, liability, deductions or withholdings of any nature imposed or charged by any authority.
TENTH.- PLACE OF PAYMENT.- All payments that the Borrower must make to the Banks pursuant to this Agreement, shall be made without requiring a request of payment or collection of any nature, in immediately available funds in the account corresponding to each Bank, as set forth in Annex 4 herein.
In order for the transfer of funds to be made pursuant to this section, the relevant payment shall be considered as completed only if the Borrower delivers to the Banks, no later than 12:00 pm of the maturity payment day, a copy of the deposit slip or a document evidencing the transfer of funds.
ELEVENTH.- AUTHORIZATION FOR SETTLEMENT AGAINST THE CHECKING ACCOUNT OF THE BORROWER.- Notwithstanding the terms of the Ninth clause, the Borrower hereby authorizes Santander to settle against the checking account held by the Borrower with Santander, and without prior requirement or collection, the amounts owed under this Agreement. The Borrower shall maintain a valid account during the term of this Agreement and shall have sufficient funds in such account on the date each payment shall be made. In the event that the account held by the Borrower is cancelled due to the Borrower’s Default of the obligation to maintain sufficient funds in the account or for any other reason, the Borrower agrees to make payments pursuant to the Tenth clause. The parties agree that any and all amounts disbursed by Santander in the mentioned account, will be exclusively to pay the amounts due and payable by the Borrower to Santander under this Agreement.
 
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The provisions aforementioned shall be in full force and effect and shall apply to any other account assigned by the Santander to the Borrower in substitution of the account specified herein. Notwithstanding the foregoing, it is expressly agreed that even if Santander by any circumstance does not make any disbursements of the required amount the Credit Line, the Borrower’s obligation to pay to Santander pursuant to the Tenth clause of this Agreement shall remain in full effect.
The parties agree that the authorization granted to Santander pursuant to this Clause to settle against the checking account held by the Borrower with Santander and without previous payment requirement or collection, the amounts due and payable to Santander pursuant to this Agreement it is understood that Santander is authorized to settle from the available funds in such account, the principal amount that corresponds to Santander in accordance with the Santander Portion, meaning, the 60.136493% of such available amount on the date of the operation. Pursuant to the above, Santander will not be entitled to settle any amount that corresponds to the Bancomext portion of the Credit.
TWELFTH.- INTERESTS RESERVE ACCOUNT.- The Borrower is hereby obligated to open and maintain as part of the assets on Trust PDP Santander/Bancomext 2, during the term of this Agreement, a special interests reserve account. To such effect, the Borrower is hereby obligated to maintain in such account funds equivalent to approximately 3 (three) months of the amount payable for Ordinary interests in accordance with the terms of this Agreement (hereinafter referred to as the “ Interests Reserve Account ”). The Joint Obligors are hereby obligated to guarantee that such Interests Reserve Account has at least the funds set forth above during the term of this Agreement. If the Borrower disburses the funds of the Interests reserve account, the Borrower and the Joint Obligors shall restitute the amounts used to pay the Banks within 5 (five) Business Days following the date in which the Borrower used such funds, in the understanding that the Default of the obligation to restitute such amounts shall be considered an Event of Default of this Agreement.
The parties agree that he Interests Reserve Account set forth in this Clause shall be calculated using as reference the maximum amount of credit for the following 6 months in accordance with the payment and disbursements dates set forth in Annex 1; considering such amounts the Ordinary Interests for the following 3 (three) months will be determined. Additionally, the parties agree that such calculation may be reviewed every 6 (six) months and that h LIBOR of reference to be used will be the result applicable precisely for the respective Interests Period at the moment of review.
THIRTEENTH.- JOINT OBLIGATION.- (a) Each of the Joint Obligors, by means hereof agree, absolutely, unconditionally, completely, and irrevocably to comply in a joint and unlimited manner with the Borrower, in terms of the articles 1987, 1988, and other applicable articles of the Federal Civil Code, and the corresponding articles of the Civil Codes of the other federative entities of the Mexican United States and the Federal District the obligation to make all and any payments of principal, interests, commissions, and other payable amounts pursuant to this Agreement and any other documents related hereto, therefore the Banks may require payment of such amount indistinctly to the Borrower and/or to any of the Joint Obligors.
 
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(b) Each of the Joint Obligors agree that each and any payments that for principal amounts, interests, commissions, and other amounts due and payable in accordance with this Agreement will be paid and made available for the Banks at all times in accordance with the Tenth Clause.
(c) Along with the joint obligation assumed in this clause, the Joint Obligors agree to subscribe all other documents needed to be executed into in accordance with this Agreement, including without limitation, the execution of any Promissory Notes documenting the Credit Line granted pursuant to this Agreement acting as guarantor, in terms of the form attached hereto as Annex 3.
(d) The Joint Obligors will relieve their payment obligation directly through the payment to the Banks or through deposit in the account of the Borrower in order for it in turn to use such amounts to pay the corresponding amounts to the Banks.
(e) Also, in the event in which the Joint Obligors perform a payment on behalf of the Borrower, the Joint Obligors agree that their rights to receive any payment for such matter will be subordinated to the right of the Banks to receive the total amount due and payable in accordance with this Agreement, therefore the Joint Obligors agree that they may only receive such payments until the Credit and all other owed amounts in accordance with this Agreement have been fully paid, therefore the Joint Obligors will exercise its rights against the Borrower resulting from a subrogation as long as the Borrower has acted in accordance with its purpose, until the Banks have received all amounts due pursuant to this Agreement.
(f) Each of the Joint Obligors, by means hereof, accept that it is not necessary for the Banks to (i) deliver any notification, compliance requirement, or any right they have against the Borrower at any given time, (ii) deliver acceptance notices of this Joint Obligation and notices indicating that the Borrower is on default with any obligation, (iii) deliver notice of any actions or claims notices initiated by the Banks against the Borrower based on any agreement, instrument or exercise of any right in accordance with the obligations hereunder, (iv) deliver any other kind of notice, requirement, or notification, as well as any other formality in connection with the enforceability of the obligations in accordance with this Agreement against the Joint Obligors, or against the enforceability of the Borrower obligations under this Agreement, which omission or delay, except for what is set forth herein, can provide basis in order to release the Joint Obligors from their obligations hereunder, (v) exercise any right to require the assets of the Borrower to be used as payment of the Borrower obligations, prior to the requirement of the legal payment of the Joint Obligors, (vi) exercise any right to require the Borrower to be claimed or required to pay prior to the Joint Obligors
(g) The Banks shall have the right, at any time and from time to time, without requiring any notice or consent given from the Joint Obligors, and without implying the
 
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impairment, termination or amendment to the unconditional and absolute Joint Obligors obligations hereunder, to: (i) exercise or not to exercise any rights against the Borrower or other propter rem guarantee or others, and (ii) exchange or free any lien or guarantee or to waive, modify, free or consent the retirement of any other guarantee related with any obligation. In addition, the Joint Obligors obligations under this Agreement shall be absolute and unconditional, regardless of (a) any lack of validity or enforceability of any obligation hereunder or under any agreement or document in accordance with any obligation, (b) any current or subsequent law, regulation or executive order in any jurisdiction affecting any of the terms of the obligations or the Banks rights arising hereunder, or (c) any other circumstances, not referred to above, that could constitute an available defense for, or a way to release the Borrower or the Joint Obligors. The Joint Obligors, by means hereof, waive to any defense or proceed required to be exhausted in previous terms against the Borrower, until the Banks have received all of which is owed to them under this Agreement.
(h) This document shall be in full force and effects until the obligations and any other obligations arising hereunder have been fully satisfied.
FOURTEENTH.- COVENANTS. As long as any payable amount remain outstanding, the Borrower and, as applicable, each of the Joint Obligors hereby agrees that:
I. The Borrower agrees to:
(a) Net Worth Statements and Other Reports . The Borrower shall deliver to the Bank:
(i) as soon as available, but in any event within 120 (one hundred and twenty) calendar days after the end of each fiscal year of the Borrower, the net worth statement for such fiscal year; and
(ii) together with the financial information delivered pursuant to the previous paragraph, the Borrower shall deliver to each Bank a certificate regarding the compliance with the terms herein and stating the non existence of any condition or event that constitutes a default or an event of default or, if any such condition or event existed or exists, specifying the nature and what action the Borrower has taken or proposes to take with respect thereto.
(b) Notices . The Borrower shall give notice to the Administrative Agent promptly, but in any case within the 5 (five) calendar days after the occurrence any of the following: (i) Default or an Event of Default, or event of termination of the Original Purchase Agreement or an Airbus Termination Event, by means of a Borrower representation stating such Events details and the actions the Borrower has taken or proposes to take with respect thereto; (ii) any change in any laws in Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or that could be reasonably expected to have a Material Adverse Change, (iii) any default or event of default of any agreed obligation of the Borrower affecting or that could reasonably be expected to have a Material Adverse Change, (iv) any litigation,
 
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claim or proceeding before any court, governmental authority or arbitration panel that could be expected to have a Material Adverse Change, and (v) any development or event of any nature, which has had or could have a Material Adverse Change.
(c) Compliance with the Law and Contractual Obligations
The Borrower shall comply with the applicable law, regulations, executive orders, judgments or requirements of any Governmental Authority (including, licenses, certificates, permits, notices, registries, and other governmental authorizations of any nature), needed in order to maintain the property or possession of his assets, including without limitation, the compliance with all the obligations set forth in the Operative Documents, as well as all its relevant or necessary obligations arising from any agreement, contract or amendment to which it is a party or has entered into (in any way) relevant in order to fulfill its purposes.
(d) Payment obligations . The Borrower shall pay: (i) all payments due under this Agreement, taking in consideration preference order and terms indicated herein, (ii) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required, and (iii) all the claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; in the understanding, however that, the Borrower shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate reserves shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, if applicable.
(e) Amendments to the Original Purchase Agreement . The Borrower agrees to comply with all terms and conditions provided in the Novated Purchase Agreement. The Borrower agrees to not carry out, without the prior approval of the Banks any of the following:
 
 	(i)	terminate, cancel or allow the termination of the Novated Purchase Agreement or execute any agreement with Airbus that may result in the termination or cancellation of the Novated Purchase Agreement, in each case as related to the Financed Aircraft (or any portion thereof), except in such cases where such termination or cancellation is made in such circumstances that Airbus has the obligation to return the pre-delivery payments related to the Financed Aircraft and that Airbus has agreed with the Administrative Agent to carry out such returns directly to the Administrative Agent;	
 
 	(ii)	grant its consent so that Airbus may have the possibility to assign or tranfer its rights under the Purchase Agreement (as far as it is related with the Financed Aircraft) or the Step-In Agreement; or	
 
 	(iii)	request, allow, accept or grant consent so that any pre-delivery payment may be transferred or applied with respect to any aircraft that is not a Financed Aircraft.	
 
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Additionally, the Borrower is obligated to not execute, without the prior approval of the Banks, any agreement with Airbus that may modify or amend any term of the Purchase Agreement (as far as it is related to any Financed Aircraft, or any portion thereof) that may result in:
 
 	1.	the cancellation of the purchase of any Financed Aircraft, except for the currently set forth in the Purchase Agreement, with respect to the loss of any Aircraft or for any circumstance under which paid by the Banks have been reimbursed or paid to them;	
 
 	2.	the change in the pre-delivery payment date or amount, except when notified to the Banks at least 10 (ten) Business Days prior to such change and in the understanding that it must not exceed in any case the term set forth in Annex 1;	
 
 	3.	that the price of purchase of any Financed Aircraft increases in an amount that exceeds 2% (two per cent) of such purchase price;	
 
 	4.	that the date programmed for delivery of any Financed Aircraft be postponed or delayed for more than 180 (one hundred and eighty) days;	
 
 	5.	that the technical specifications of any Financed Aircraft be modified in such manner that may materially reduce the value, life or possibility of commercialization of such Financed Aircraft, except as required by applicable law; and	
 
 	6.	that any BFE is added to a Financed Aircraft that exceeds the amount of US$200,000.00 (two hundred thousand Dollars 00/100) with the exception of (i) it is required to replace a BFE due to the fact that its production has been discontinued, definitely ceased or delayed or that the approved manufacturer has ceased to be an approved manufacturer by Airbus or IAE,(ii) it is required by applicable law; or (iii) that the cost of such additional BFE is pre-paid to the applicable manufacturer or deposited to Airbus for its application on the day of the Aircraft.	
The parties agree that any other amendment that may be considered to modify the rights and interests of the Banks with respect to the Financed Aircrafts, in the reasonable opinion of the Banks must be approved by the Banks, whose approval will not be denied by the applicable Bank when there is a reasonable motive for such change.
(f) Books and Records . The Borrower shall keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Borrower in accordance with the generally accepted accounting principles or other applicable generally accepted accounting principles.
 
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(g) Use of the Credit Line . The Borrower shall use the total amounts of the proceeds gained in accordance with this Agreement for the purposes set forth in the Second clause and in accordance with the provisions set forth in Trust PDP Santander/Bancomext 2. The Banks shall not be responsible for the use given by the Borrower to the Credit Line resources.
(h) Priority of Payment . The Borrower shall ensure that its obligations hereunder constitute obligations of the Borrower in accordance with this Agreement ranking at least pari passu in the right of payment with all other present or future direct unsecured and unsubordinated obligations of the Borrower (except with those obligations having priority by operation of law).
(i) Reports and Information . The Borrower shall provide (i) reports and information required by the Banks in connection with the Financed Aircraft and (ii) such information that is necessary to comply with any requisites of KYC. Such information shall be delivered by the Borrower upon the request of the corresponding Bank, within 5 (five) business days following such Bank request.
(j) Status . The Borrower shall maintain its status as duly incorporated and validly existing trust under the laws of Mexico.
(k) Authorizations . The Borrower shall timely obtain, fulfill and will take all necessary actions to maintain in effect; and will provide the Banks with a copy of any such authorization required under any applicable law in order to be allowed to perform its obligations in accordance with the Operative Documents of which it is a part, and secure the legality, validity, enforceability or admissibility as evidence of any Operative Document of which it is a part of.
(l) Liens . The Borrower is obligated to not create, incur in, assume or allow the existence, directly or indirectly, of any guaranteed right or interest over (a) any of the Financed Aircraft (b) any of its assets, or (c) the Original Purchase Agreement or any Operative Document.
(m) Acts in prejudice of interests . The Borrower will not perform any act or will cease to make any decision or act that has or that may reasonably be expected to have as effect to prejudice the interests of any of the Banks regarding any Financed Aircraft or any Operative Document.
(n) Taxes . The Borrower will pay and comply with all taxes over it or its assets in the terms set forth in the applicable law, without allowing any fines or contingencies, with the exception of: (i) the payment if a specific tax has been contested by the Borrower in good faith; (ii) has reserved the required amounts for such taxes; and (iii) the payment may be legally retained.
 
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(o) Additional Obligations . The Borrower will perform all acts, carry out all required actions and execute all documents that may reasonably be required in order to protect and/or perfect the interests of each party under the Operative Documents and so as to allow the involved parties to obtain all necessary rights and benefits expected for them under the Operative Documents.
(p) Businesses . The Borrower will not perform any business or activity that may be different tan: (i) those allowed in the Trust PDP Santander/Bancomext 2.
(q) Rights under the Step-In Agreement . The parties recognize and agree that pursuant to Clause 7.7 of the Step-In Agreement, any amounts to be received by the Borrower in the terms set forth therein will be destined to pay any amounts due under this Agreement in favor of the Banks, and in such cases the Borrower and the Joint Obligors will be subject to the terms set forth in paragraph g) of Clause Thirteenth of this Agreement and will not exercise any defense or resource that may be required to be carried out first against the Borrower, until the Banks have received all that is owed pursuant to this Agreement. Pursuant to the above, the Borrower and Joint Obligors hereby recognize the rights granted in favor o the Banks pursuant to the Step-In Agreement.
II. The Joint Obligors agree that:
(a) Financial Statements and Other Reports . Each Joint Obligor shall deliver to the Bank:
(i) as soon as possible, but in any event within 120 (one hundred and twenty) calendar days after the end of each fiscal year of each Joint Obligor and any of its subsidiaries the audited individual and consolidated financial statements for the Joint Obligor and each of its subsidiaries for such fiscal year, including, as applicable, the balance sheet, individual and consolidated profit and loss statement, cash flow statement, and capital variations statement of the Joint Obligor and its subsidiaries for such fiscal year, accompanied by an opinion thereon of the External Auditor, as applicable. Such information must be accompanied by a letter of a legal representative of each Joint Obligor, certifying the fulfillment of the Debt covenants contained in subparagraph a) of clause Fifteenth; and
(ii) as soon as available, but in any event not later than 60 (sixty) calendar days after the end of each of the first three quarterly periods of each fiscal year of the Joint Obligor and its subsidiaries, as the case may be, the consolidated balance sheet corresponding to the period starting at the end of the previous quarter and ending at the end of such quarter, signed by a Joint Obligor officer stating that were prepared in accordance with the applicable accounting principles. Said balance sheet must be accompanied by a letter of a legal representative of each Joint Obligor, certifying the fulfillment of the Debt covenants contained in subparagraph a) of clause Fifteenth;
 
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(b) Notices . Each Joint Obligor shall promptly notify the Banks, in any case within the 5 (five) calendar days after the occurrence of any of the following: (i) Default or an Event of Default through the declaration of the Joint Obligor stating the details of such Default or Event of Default and the actions that the Joint Obligor has taken or proposes to take with respect thereto; (ii) any change in any laws of Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or that could be reasonably expected to have a Material Adverse Change, (iii) any Default or Event of Default of any agreed obligation of the Joint Obligor affecting or that could reasonably be expected to constitute a Material Adverse Change, (iv) any litigation, claim or proceeding before any court, governmental authority or arbitration panel affecting or that could reasonably be expected to have a Material Adverse Change, and (v) any notice of strike or labor stoppage of the Joint Obligor affecting or that could reasonably be expected to constitute a Material Adverse Change, and (vi) any significant change in its accounting principles, policy and guidelines, if any.
(c) Compliance with Law and Contractual Obligations
The Joint Obligors shall comply and shall make all of their subsidiaries comply with applicable law, regulations, executive orders, judgments or requirements of any applicable Governmental Authority (including, in licenses, certificates, permits, notices, registries, and other governmental authorizations of any nature, needed in order to maintain the property or possession of his assets or the performance of his activities, competition law, environmental law (including technical norm and disposal of toxic and hazardous materials, environmental regulations related with the preservation, restore and improvement of the environment, protection of natural areas, wild and aquatic flora and fauna, sustainable use of natural elements, precision and control of air, water and soil contamination, as well as all other set forth in the Mexican Environmental equilibrium and protection law, as applicable, as well as make sure that the design, operation and maintenance of the equipments and any of their parts comply with the requisite set forth in the applicable environmental regulations, federal, state or local), tax laws and laws regarding the social security administration and pension funds) as well as all its relevant or necessary obligations arising from any agreement, contract, issued security relevant or necessary to maintain the ordinary course of business, and which lack of compliance, shall not result or reasonably be expected to result in a Material Adverse Change.
(d) Payment Obligations . The Joint Obligors shall pay, and shall cause each of their subsidiaries to pay, prior to any default, (i) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required (including, without limitation, in social security, worker housing, and retirement regulations, real estate tax, water supply rights payment, and any other similar tax that could in the future substitute o replace such, and including all payments that they must make related with its concession title and Air Operator Certificate and all payments that they must make regarding air navigation services in the Mexican air space, as well as all others related to Airport Use Tariff (TUA for its initials in Spanish) and regarding fuel bough from Aeropuertos y Servicios Auxiliares ) and (ii) all claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; on the understanding, however that,
 
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the Joint Obligor and its subsidiaries shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate exceptions shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, as applicable.
(e) Insurance maintenance . The Joint Obligors shall maintain, and each of the Joint Obligors shall cause that each of its subsidiaries, maintain insurance with insurance companies with an established reputation, reasonable for the Banks, consistent and in accordance with the practices of similar businesses, owning similar assets, and located in the same general areas or similar areas of business that the Joint Obligors or their subsidiaries operate.
(f) Business conduct and Existence . Each Joint Obligor shall, and shall cause their subsidiaries to, continue to engage and conduct the same general type of business and activities and preserve, renew and keep in full force its legal existence, permits, licenses, registrations and in general necessary authorizations to conduct his business.
(g) Books and Records . Each Joint Obligor shall, and shall cause their subsidiaries to keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Joint Obligors and its subsidiaries in accordance with the applicable accounting principles or other applicable generally accepted accounting principles, in a consistent manner with the accountant policies and guidelines used on the previous fiscal years.
(h) Inspection Rights . The Joint Obligor shall allow, and each Joint Obligor shall cause their subsidiaries to allow that the written designated representatives of the applicable Bank inspect the accounting registries, collection activities and/or assets of the Joint Obligors and their subsidiaries, if any. Such inspections shall be made prior request, previously noticed in writing to the Joint Obligor (as the case may be) with at least 5 (five) Business Days in advance (except in the event in which a default or early termination exists and continues, in which case such notice shall not be required), being such expenses charged to the Banks (except in the event in which a default or early termination exists and continues, in which case such expenses shall be charged to the Joint Obligors). Such inspections shall be undertaken in Business Days and in labor hours, so as not to interfere or interrupt the Joint Obligors operations. The Banks, in compliance with the Financial Institutions Law and other applicable provisions, shall maintain the Lender client privilege and in consequence shall maintain (and shall cause its representatives to maintain) in a confidential manner, all the information of the Borrower, of the Joint Obligor and of their subsidiaries obtained as a result of the reviews or inspections provided hereto, as such information does not acquire the character of public by different means of the Banks or its representatives; in the understanding that, the Banks may disclose such information, when is binding to do so pursuant the applicable law or by virtue of a requirement of a competent authority, prior written notice to the applicable Joint Obligor.
 
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(i) Asset preservation . The Joint Obligors shall maintain and conserve, and shall cause each of their subsidiaries to maintain and preserver, all their assets that are used or that are useful for the development of their activities in good and normal conditions, except for the use and ordinary waste; in the understanding that, such obligation shall not prevent that each Joint Obligor or any of their subsidiaries discontinue the operation and maintenance of any of their assets, such discontinue is desirable in the conduction of its business and such discontinue, individually or jointly, shall not result in a Material Adverse Change.
(j) Transactions . The Joint Obligors shall carry out, and shall cause each of their subsidiaries to carry out, all its transactions, including those carried out with any of its affiliated, under market conditions.
(k) Governmental Authorizations . The Joint Obligors shall maintain, and shall cause each of their respective subsidiaries to maintain, in full force and effect, all licenses granted by, authorizations of, and registries before any governmental authority that are necessary pursuant to the applicable law or pursuant to reasonable practice of business for the performance of their activities and/or the rendering of air transportation services for passengers and cargo, including without limitation, in compliance with the antitrust legislation, legislation related to environmental protection or legislation related to health, and for the fulfillment of their obligations pursuant to this Agreement and for validity or enforceability of this Agreement and whose loss or cancelation results in a Material Adverse Change, including specifically all authorizations, concessions and certificates granted by the Transportation and Communications Ministry ( Secretaría de Comunicaciones y Transportes ), to Concesionaria to act as service provider of air transportation services pursuant to Mexican law.
(l) External Auditor . The Joint Obligors agree that their respective subsidiaries will maintain the same external auditor.
(m) Compliance with the Novated Purchase Agreement
(n) Amendments to the Original Purchase Agreement . The Joint Obligors agree to comply and cause the Borrower to comply with all terms and conditions provided in the Purchase Agreement. The Joint Obligors agree to not carry out, and cause the Borrower to not carry out, without the prior approval of the Banks any of the following:
 
 	(i)	terminate, cancel or allow the termination of the Novated Purchase Agreement or execute any agreement with Airbus that may result in the termination or cancellation of the Novated Purchase Agreement, in each case as related to the Financed Aircraft (or any portion thereof), except in such cases where such termination or cancellation is made in such circumstances that Airbus has the obligation to return the pre-delivery payments related to the Financed Aircraft and that Airbus has agreed with the Administrative Agent to carry out such returns directly to the Administrative Agent;	
 
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 	(ii)	grant its consent so that Airbus may have the possibility to assign or transfer its rights under the Purchase Agreement (as far as it is related with the Financed Aircraft) or the Step-In Agreement; or	
 
 	(iii)	request, allow, accept or grant consent so that any pre-delivery payment may be transferred or applied with respect to any aircraft that is not a Financed Aircraft.	
Additionally, the Joint Obligors are obligated to not execute, without the prior approval of the Banks, nor allow the Borrower to execute, any agreement with Airbus that may modify or amend any term of the Purchase Agreement (as far as it is related to any Financed Aircraft, or any portion thereof) that may result in:
 
 	1.	the cancellation of the purchase of any Financed Aircraft, except for the currently set forth in the Purchase Agreement, with respect to the loss of any Aircraft or for any circumstance under which paid by the Banks have been reimbursed or paid to them;	
 
 	2.	the change in the pre-delivery payment date or amount, except when notified to the Banks at least 10 (ten) Business Days prior to such change and in the understanding that it must not exceed in any case the term set forth in Annex 1;	
 
 	3.	that the price of purchase of any Financed Aircraft increases in an amount that exceeds 2% (two per cent) of such purchase price;	
 
 	4.	that the date programmed for delivery of any Financed Aircraft be postponed or delayed for more than 180 (one hundred and eighty) days;	
 
 	5.	that the technical specifications of any Financed Aircraft be modified in such manner that may materially reduce the value, life or possibility of commercialization of such Financed Aircraft, except as required by applicable law; and	
 
 	6.	that any BFE is added to a Financed Aircraft that exceeds the amount of US$400,000.00 (four hundred thousand Dollars 00/100) with the exception of (i) it is required to replace a BFE due to the fact that its production has been discontinued, definitely ceased or delayed or that the approved manufacturer has ceased to be an approved manufacturer by Airbus or IAE,(ii) it is required by applicable law; or (iii) that the cost of such additional BFE is pre-paid to the applicable manufacturer or deposited to Airbus for its application on the day of the Aircraft.	
 
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For purposes of this clause the term “Purchase Agreement” shall mean the Original Purchase Agreement, as it is executed to this date, in accordance with the First and Second Novations. The parties agree that any other amendment that may be considered to modify the rights and interests of the Banks with respect to the Financed Aircrafts, in the reasonable opinion of the Banks must be approved by the Banks.
(n) Reimbursements and BFE and SSBFE Agreements . The Joint Obligors are hereby obligated to transfer definitely and irrevocably in favor of the assets on trust of the Borrower, any rights related to any reimbursement of the Financed Aircraft, except for the reimbursement payments referred in the Netting Letter, as well as any other right related to the BFE and SSBFE Agreements, and to maintain valid such BFE Agreements during the term of this Agreement. Such transfer shall be made no later than 6 (six) months before the delivery date of the Financed Aircraft.
(o) Exercise of Rights . The Joint Obligors will only exercise their rights or carry out any acts (including, without limitation instructions to the Borrower) that they may carry out by virtue of the powers granted in favor or derived from the Trust PDP Santander/Bancomext 1, the Trust PDP Santander/Bancomext 2 and the Step-In Agreement, prior written consent of the Banks.
FIFTEENTH.- Negative Covenants. So long as any amount payable according to this Agreement remains unpaid and is outstanding, the Borrower and each of the Joint Obligors:
(a) Debt . The Joint Obligors and their subsidiaries agree not to obtain any additional Debt without previous agreement in writing by the Banks to the extent that: (i) the execution of any agreements with respect to such Debt result in the Default of any of the payment obligations contained herein, and/or (ii) an Event of Default cause has occurred and is continuing (unless the resources of such additional Debt are put forth for the payment of the Credit Line, to the extent that is necessary for the total payment of the amounts owed under the Credit Line).
For the purposes of this section, “Debt” means with respect to the Joint Obligors and the Borrower, at any date, (a) financing agreements executed to this date, (b) financing agreements related to the purchase and sale of aircraft, and their engines; (c) financing of an amount up to USD$100,000,000 (one hundred million Dollars 00/100) for working capital; (d) financing among subsidiaries and/or affiliates of the Joint Obligors; (e) financings that substitute the aforementioned; (f) financings regarding derivatives transactions in order to cover fuel risks, exchange rate risks and interests rate risks in accordance with the risk management policies authorized by the Board of Directors of the Joint Obligors; and (g) financings in general, as long as they comply with the following financial ratio: that the adjusted long term debt be less or equal to 5.5 (five point five) times EBITDAR, that on any determination date, which will be obtain with the result of dividing:
 
 	1.	The sum of (a) the long term financial debt in such date, plus (b) the result of multiplying by 7 (seven) times the amount if the rent of aircraft, engines and parts of leased aircraft of the next 4 (four) quarters under the agreements documenting the lease of flight equipment, minus (c) the the unrestricted cash; the result of the foregoing divided by ,	
 
 	2.	the EBITDAR of the last 4 (four) quarters concluded to such date.	
 
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Additionally, for the effects of this clause, “EBITDAR” shall mean, at any date, the sum of (i) operating income (loss); (ii) depreciation and amortization; and (iii) rents of aircraft, engines and spares, under pure lease agreements
(b) Encumbrances . Agree, and agree that none of their subsidiaries, shall create, assume or permit any encumbrances to exist in relation to: (i) the assets that belong to Trust PDP Santander/Santander 2, unless they constitute an encumbrance in relation with this Agreement and (ii) assets, whether tangible or intangible (including stocks representing an interest in the capital stock of any subsidiary and any intellectual or industrial property), whether they are at the moment its property or were acquired after this date, unless, regarding the assets referred under this section (ii), which are the following Encumbrances (the “ Allowed Encumbrances ”):
 
 	(i)	encumbrances that are result of any tax, labor or social security obligation or those created by ministry of law, provided that any of the encumbrances has been opposed in good faith through the corresponding procedures and of which reserves or any other necessary provision according to the applicable accounting principles in Mexico or other accounting principles that are generally accepted, if it be the case;	
 
 	(ii)	encumbrances that exist as a result of any judgment or court order of any court of law, provided that such judgment has been denied or its effects have been suspended through a court order within 60 (sixty) calendar days following the date it was ruled; and	
 
 	(iii)	encumbrances in order to guarantee the permitted debt according to paragraph (a) above.	
 
 	(iv)	all other encumbrances necessary for the operations and activities related with its social purpose.	
(c) Mergers and Consolidations . The Joint Obligors may not, without previous written authorization from the Banks, in one or more related operations, (i) consolidate, divest or merge (as acquiring corporation or acquired corporation) with any other entity or (ii) directly or indirectly, transfer, sell, or in any other way transfer all or most of its assets in favor of any entity, notwithstanding, in respect to any of the operations described in paragraphs (i) and (ii) above, the entity with which such operation was carried out is a subsidiary of the Joint Obligors, and immediately after such operation becomes effective:
 
 	(1)	the entity that results or is established by virtue of such merger or consolidation is established as a Joint Obligor in accordance with this Agreement,	
 
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 	(2)	the Joint Obligor, or its successor, expressly agrees to indemnify the Lender regarding any tax, levy or government burden, of any nature, that may be imposed on the Lender as a consequence of the operation of which the case may be, in relation to payments under this Agreement;	
 
 	(3)	its consequence is an event of default or an early termination cause; and	
 
 	(4)	the Joint Obligor has delivered the Banks a certificate and a legal opinion by an independent firm, reasonably acceptable to the Administrative Agent, each of which points out, given the case, that such consolidation, divestiture, merger, transfer, and the agreements relating to such operation, comply with the applicable provisions of this clause. This being understood that the legal opinion to which this subsection refers is not required in the case that a Joint Obligor carries out the registration of representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).	
(d) Transfer of Assets . The Joint Obligors wont allow and each subsidiaries will not allow, without previous authorization from the Lender sell, or in any other way transfer its assets (including interest representing the capital stock pertaining to any subsidiary), except for:
 
 	(i)	the selling or transfer of the inventory of the Borrower, Joint Obligors and their subsidiaries in the natural course of their business; and	
 
 	(ii)	the selling or transfer of assets in favor of any of the Borrower, Joint Obligors or its subsidiaries; and	
 
 	(iii)	the authorized transfer of assets by means of a Sale and Lease Back of aircraft, engines or their parts, as long as they are carried out in the ordinary course of business.	
The above being understood that the Joint Obligors may carry out the activities referred to in subsections (i) and (ii) above, provided that the total aggregate annual amount of such operations, and excluding those operations performed in the ordinary course of business, shall not exceed US$5,000,000.00 (five million Dollars 00/100) or its equivalent in another currency.
(e) Additional Financings . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, grant any kind of Credit Line, credit or advance, with or without security, except those credits that are granted within the natural course of business between the Joint Obligors, as long as it has not incurred or continues in an event of default or an early termination cause.
 
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(f) Change in the Nature of Business . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, substantially change the commercial name or nature, in the Borrower’s case, of its purposes, and in the case of the Joint Obligors, of its principal activities as they have been carried out to the date of this Agreement.
(g) Amendments to the Trust PDP Santander/Bancomext 2 . The Borrower and the Joint Obligors will not modify, complement or change in any way, and will not allow any other party to modify, complement or change any term of the Trust PDP Santander/Bancomext 2 nor the Step-In Agreement, without the prior written consent of the Bank.
(h) Payment of Dividends .
 
 	(i)	The Joint Obligors agree and shall cause their subsidiaries to refrain from celebrating o undertaking any obligation or agreement that, directly or indirectly, prohibits o restrains, or that has the effect of prohibiting or restraining, or imposing any condition to the declaration or payment of any kind of dividends or distributions to their shareholders or granting of credits or Credit Lines by any subsidiary to the Joint Obligors.	
 
 	(ii)	The Joint Obligors agree not to declare or pay dividends o make distributions to their shareholders as long as any amount payable according to this Agreement remains unpaid; except for distributions that do not exceed 15% of the pre-tax earnings determined according to the accounting principles applicable to the immediately preceding fiscal year and as long as the Borrower is not currently in an event of default or an early termination cause.	
The above in the understanding that the obligation to which subsection (g) refers will not applicable in the case that the Joint Obligor carries out the registration of its representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(i) Settlement and Dissolution of the Joint Obligors . The Joint Obligors may not initiate a lawsuit or approve a ruling to be settled or diluted (or in order to undergo a settlement or dissolution) or to settle or dilute any of its subsidiaries, except (i) that such subsidiaries should not be necessary and (ii) in the Banks reasonable judgment, such settlement or dissolution does not significantly affect the Borrower or the Joint Obligor subject according to this Agreement.
(j) Waivers. The Joint Obligors may not, and shall not allow their subsidiaries to, cancel or grant reductions concerning payable debt to any of them, except (i) concerning debt between the Borrower and the Joint Obligors, and (ii) cancellations or reductions made in the natural course of their business.
 
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(k) Capital Investment . The Joint Obligors may not, and shall not allow their subsidiaries to, incur in expenses or compromise expenses related to the acquisition of fixed assets or other assets, if an event of default or early termination cause has occurred and continues, or if, in the Banks’ reasonable judgment, as a result of such investment an event of default or an early termination cause may occur.
(l) Bylaws . The Joint Obligors may not, and shall not allow their subsidiaries to, modify the corporate purpose of its bylaws or any disposition of its bylaws that could reasonably be expected to have a Material Adverse Change, without previous consent of the Bank, except for those bylaw modifications that are required pursuant to a corporate restructuring in order to adapt them to the requirements of the Foreign Investment Law ( Ley de Inversión Extranjera ) and/or the Securities Market Law ( Ley del Mercado de Valores ) for stock corporations and for the purpose that the Joint Obligors register their representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(m) Decreases in Capital Stock . The Joint Obligors agree to abstain from celebrating or permitting their subsidiaries to celebrate shareholders meetings in which it is resolved, in any way, to repay or reduce its capital stock, except for those reductions and reimbursements of capital that are found directly related to the registration process for representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(n) Compensation. The Joint Obligors agree not to compensate or settle in any law suit, action, claim, dispute or pending process, for an amount that, individually, exceeds USD$10,000,000 (ten million Dollars 00/100) or its equivalent in any other currency or that they result in a Material Adverse Change.
(o) Concession . Concesionaria is hereby obligated to not modify in any way the Concession Title for the rendering of air transportation services of which Concesionaria is the holder, nor any other concession or government authorization related to the rendering of public air transportation services, except for those amendments to the Concession Title that: (i) correspond to an incorporation or change of aircraft registration marks (Annex 1); (ii) incorporation or domestic and/or international routes (Annex 2), (iii) amendment to the operation stations and/or maintenance and/or incorporation of sub-stations of operation or maintenance (Annex 3), (iv) update of the programmed development (Annex 4), and (v) any other amendment necessary to render the air transportation service, nor assign, transfer or encumbrance the rights derived from such title.
 
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SIXTEENTH.- LIMITED REPRESENTATIVE OF THE BANKS.
(a) Appointment of Administrative Agent . In order to comply with the terms of the Step-In Agreement, and the Trust PDP Santander/Bancomext 2, and in order to have one representation before the parties of such agreements and thus Agreement, each Bank hereby irrevocably appoints, designates and authorizes Santander as the administrative agent (hereinafter referred to as the “ Administrative Agent ”) to take the actions and exercise the rights and comply with their obligations under this Agreement, and all documents related, along with the powers incidental for such effect. Furthermore, each Bank hereby authorizes and appoints the Administrative Agent as an agent ( comisionista ) under the terms of Articles 273 other related of the Mexican Commerce Code ( Código de Comercio ) to execute, deliver and perform any document related to this Agreement, the Trust PDP Santander/Bancomext 2 and the Step-In Agreement. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other related document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth in this Agreement, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other related document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “representative” or “administrative agent” herein and in the other related documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
Notwithstanding any disposition to the contrary contained in this Agreement or any of the related documents, the Administrative Agent shall have no more duties or responsibilities than those set forth expressly herein, nor will the Administrative Agent have, or be considered to have, a fiduciary relationship with any Bank, and it will not imply the existence of any agreement, performance, responsibility, duty or obligation of this Agreement or any other related document with the Agreement, nor will they exist against the Administrative Agent. Without limiting the generality of this sentence, the term “representative” or “administrative agent” in this Agreement and the related documents referring to the Administrative Agent, shall not be construed as to imply any fiduciary obligation or others, implied (or express), that may arise from the representation theory under any applicable law. Instead, such term is only used commercially and is intended to create or reflect an administrative relationship between independent contracting parties.
The parties recognize that the Joint Obligors and the Borrower may direct any notice for the Banks in accordance with this Agreement to the Administrative Agent, who must in turn send copy of them to the Banks within the 3 (three) days following reception, in the understanding that the Joint Obligors and the Borrower are not responsible for such copy. Consistent with the foregoing, except as expressly provided otherwise herein, any amendment made or received by the Administrative Agent will have the same effects as if made or received by all the Banks.
 
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Regarding notifications sent by the Administrative Agent to Bancomext with respect to which an answer is required from Bancomext, it is hereby understood that Bancomext has consented to the actions taken by the Administrative Agent if such Administrative Agent does not receive a response within 10 (ten) Business Days following receipt of such notice by Bancomext from the Administrative Agent.
The parties agree that the payments due to the Banks in terms of this Agreement shall be made directly to each Bank and that the Agent will not act as collector, receiver or hub of funds owed to the Banks and payer of the same. Additionally, each Bank must make the Disbursements that correspond to each of them directly to the Borrower, being that the Agent will also act as hub of such amounts for the Disbursements to the Borrower.
(b) Delegation of Duties . The Administrative Agent may execute any of its duties found in this Agreement or any other related document by or through any one or more sub-agents appointed by it, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.
(c) Liability of Administrative Agent . Neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys in fact shall
(i) be liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other related document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any Bank for any recital, statement, representation or warranty made by the Borrower, the Joint Obligors or any of their officers, contained in this Agreement or in any other related document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other related document, or for any failure of the Borrower or the the Joint Obligors to perform its obligations hereunder or thereunder.
(iii) responsible to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, or facts stated in, this Agreement or any other related document, or to inspect the properties, books or records of the Borrower, Joint Obligors or any of its Subsidiaries.
(iv) responsible of proving the veracity or fulfillment of the commitments assumed by the Borrower or the Joint Obligors and/or investigate the existence of possible Defaultes or diminishing of solvency of them.
(v) responsible for the suitability, precision or integrity of the information made available by the Borrower, the Joint Obligors or any person related to the documents of this financing operation.
 
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The Banks hereby exempt the Administrative Agent of any responsibility by error or omission in the performance of the activities that are attributed to them in this Agreement, except those that arise from negligence or willful misconduct.
(d) Reliance .
 
 	i.	The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, teletype or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other related document unless it shall first receive such advice or concurrence of the Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request or consent of the Banks, and such request or any action taken or refrain from acting, in accordance with this Agreement, shall be enforceable against all Banks.	
 
 	ii.	For purposes of determining compliance with the conditions specified in this Section, each Bank that has executed this Agreement shall be deemed to have consented to, approved, accepted or to be satisfied with, each document or other matter either provided by Administrative Agent to such Bank for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to such Bank unless the Administrative Agent shall have received notice from such Bank prior to the proposed Closing Date specifying its objection thereto.	
(e) Notice of Default . The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Administrative Agent shall have received written notice from a Bank or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “Notice of Default”. The Administrative Agent will notify the Bank of its receipt of any such notice. The Administrative Agent shall take such action with
 
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respect to such Default or Event of Default before Airbus or the other parties of the Step-In Agreement, in the understanding however , that unless and until the Administrative Agent has received any such written direction, the Administrative Agent may (but is not be obligated to) take such action, or refrain from taking such action.
(f) Credit Decision . Each Bank acknowledges that neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact have made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment or any review of the affairs of the Borrower, the Joint Obligors and its Subsidiaries, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank as to any matter, including whether the Administrative Agent has disclosed material information in its possession.
Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Joint Obligors and its Subsidiaries and all applicable Bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.
Each Bank also represents that it will, independently and without reliance upon the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action in accordance with this Agreement and the other related documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Joint Obligors and its Subsidiaries. Except for notices, reports and other documents expressly herein required to be furnished to the Banks by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower or Joint Obligors which may come into the possession of any of the Administrative Agent or any of their Affiliates, officers, directors, employees, agents or attorneys-in-fact.
(g) Indemnification . Whether or not the transactions contemplated hereby are consummated, the Banks shall indemnify upon demand the Administrative Agent and its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the Company to do so), pro rata , and hold the Administrative Agent harmless from and against any and all consequences incurred in by error or omission; provided , however , that no Bank shall be liable for the payment to the Administrative Agent of any portion of such Indemnified Liabilities to the extent determined in a final judgment by a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful
 
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misconduct. Without limitation of the foregoing, each Bank shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other related document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertakings in this Section shall survive the payment of all other Obligations and the resignation or removal of the Administrative Agent.
(h) Administrative Agent acting . Santander and Bancomext agree and acknowledge that a consent obtained from both of the Banks shall be required in order for the Administrative Agent to perform any of the following actions or restrain which may result in affecting any rights of the Banks under this Agreement, in the understanding that the Administrative Agent is not allowed to agree on any amendment to the term, amount, rate or any other condition of the Credit Line without the prior consent of Bancomext. Pursuant to the above, the Banks accept that any action to be taken by the Banks against the Borrower and the Joint Obligors pursuant to the default of their obligations under this Agreement, shall always be initiated collectively by all of the Banks, in the understanding that the Administrative Agent does not assumes any liability of any nature in connection with such actions.
Santander and Bancomext agree that if the Administrative Agent receives any amounts derived of an action performed by it, with the unanimous consent of the Banks and the exercise of a right in favor of them, such amounts will be distributed by Santander and Bancomext in proportion of the Bancomext Portion and the Santander Portion in this Agreement.
(i) Administrative Agent in its Individual Capacity . Notwithstanding the provisions contained under Section (h) above, Santander and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of lending, trust, financial advisory, underwriting or other business with the Borrower, the Joint Obligors or the Borrower’s subsidiaries as though Santander was not the Administrative Agent hereunder and without notice to or consent of the Banks, and without the need to obtain their consent, as long as such activities don’t have as a result to affect the rights of the Banks under this Agreement. The Bank acknowledge that, pursuant to such activities, Santander or its Affiliates may receive information regarding the Borrower or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Santander shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not an Affiliate of the Administrative Agent, and the terms “Bank” and “Banks” include Santander in its individual capacity.
 
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(j) Successor Administrative Agent . The Administrative Agent may resign upon thirty (30) days’ notice to the Banks. If the Administrative Agent resigns or is removed in accordance with this Agreement, the Banks shall appoint from among the Banks a successor agent for the Banks, which successor agent shall be subject to the prior approval of the Borrower at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation of the relevant existing Administrative Agent, then such existing Administrative Agent may appoint, after consulting with the Banks and the Borrower, a successor agent from among the Banks. Upon the acceptance of its appointment as the successor agent hereunder, such successor agent shall thereupon succeed to and become vested with all the rights, powers and duties of the retiring Administrative Agent, and the term “Administrative Agent” shall mean such successor agent. After the Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation or removal shall nevertheless thereupon become effective and the Banks shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Banks appoint a successor agent as provided for above.
SIXTEENTH.- ASSIGNMENT.- In terms of Article 299 of the General Law of Negotiable Instruments and Credit Operations, the Banks are hereby authorized to assign, discount, endorse, or in any other way negotiate, partially or in whole and even before they become due, the right to collect the Credit herein granted with the previous written consent granted by the Borrower and by the Joint Obligors (in the understanding that such consent may not be unreasonably denied and if a period of 15 Business Days have passed after the request from the Bank without receiving an answer from the Borrower and by the Joint Obligors, it shall be construed as granted by them). Likewise, the Bank may assign, discount, endorse or in any way transfer, totally or partially, their rights pursuant to this Agreement through a notice previously carried out to the Borrower and the Joint Obligors in the following cases: (i) in the case that such assignment takes place in favor of any affiliate of the Bank, and (ii) in favor of any financial institution in case that an event of default occurs pursuant to this Agreement.
In case the assignment referred in the paragraph above is carried out to any person that because of its domicile or for any other reason, creates tax burdens for the Borrower and/or Joint Obligors, greater or additional to those they currently have with respect to the Credit Line with the Banks, said additional tax burdens shall be borne by the assignee, in the understanding that the Borrower and the Joint Obligors will not be obligated to pay any additional amount to that effect.
Notwithstanding the above, the Banks may not make any assignments ton ay person related to the competitors of the Joint Obligors.
 
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The Borrower may not assign its rights or obligations under this Agreement, without the prior written consent of the Banks.
EIGHTEENTH.- UNILATERAL TERMINATION OR RESTRICTION OF THE AGREEMENT.- The parties agree that the Banks are authorized to restrict the amount of the Credit Line or the term of which to disburse such credit, or both, as well as to unilaterally terminate this agreement at any time, through a simple written notice directed to the Borrower, consequently, any right to use the unspent balance will be similarly limited or restricted, as the case may be. This clause is subject to Article 294 of the General Law of Negotiable Instruments and Credit Operations.
NINETEENTH.- EARLY TERMINATION.- The Lender may early terminate the term for the payment of the benefits on behalf the Borrower and immediately require the total amount of the Credit Line, its interests and other legal accessories, if the Borrower or any Joint Obligor does not comply with any of the obligations assumed by this Agreement and especially in the following events (each one a “ Default ” or an “ Event of Default ”:
(a) Failure to make payments . If the Borrower or any Joint Obligor shall fail to pay when due (whether at stated maturity, by acceleration or pre-payment) any principal of or interest or any other amount required by this Agreement.
(b) Misrepresentation . If any representation made by the Borrower or by any Joint Obligor herein or which is contained in any certificate, document or financial statement furnished by it in compliance with this Agreement or any information or documentation furnished by the Borrower or by any Joint Obligor herein: (i) shall prove to have been false in any material respect, or (ii) shall prove to be mistaken or erroneous in any material respect and such error, incorrectness, is not remedied or cured within a period of 30 (thirty) calendar days from the (a) the Borrower or any Joint Obligor first becomes aware of such error or mistake, or (ii) the Administrative Agent or any of the Banks gives written notice to the Borrower of such error or mistake.
(c) Specific non-performance . The Borrower or any Joint Obligor, as the case may be, shall default in the observance or performance of any covenant contained in Clause Thirteen and Fourteen or such default continues for more than any applicable period of grace.
(d) Other Defaults . The Borrower or either of the Joint Obligors, as the case may be, shall default in the observance or performance of any other obligations contained in this Agreement (other than as provided in paragraphs (a) through (c) above), as well as any other document related to this Agreement, and such default shall continue uncured for a period of 30 (thirty) calendar days from the first of (i) the day the Borrower or any Joint Obligor first becomes aware of such default, or (ii) the Administrative Agent or any of the Banks gives written notice to the Borrower of such default.
(e) Default of other Agreements . (i) If any Joint Obligor or any of its subsidiaries default with, or incurs in an event of default with respect to any issuance deed, agreement
 
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or instrument related with any debt of such Joint Obligor or any of its subsidiaries (other that the debt incurred under this Agreement), and such default or event of default shall prove to have the early termination of such debt, or (ii) if any Joint Obligor or any of its subsidiaries shall fail to pay when due any principal, or interest or any other amount whatsoever payable by such Joint Obligors or any of its subsidiaries (other than the Allowed Debt incurred under this Agreement), involving an amount exceeding, jointly or separately, the amount of USD$5,000,000.00 (five million Dollars 00/100) or the equivalent thereof in any currency or (iii) that any Airbus Event of Default or allows any third party other than the Borrower and the Joint Obligors, to terminate or cancel the Original Purchase Agreement and the Step-In Agreement, or (v) that a Step-In Event exists (as defined in the Step-In Agreement).
(f) Default with Authorities . If the Borrower, any Joint Obligors or any of its subsidiaries shall default in the observance or performance of its obligations with any governmental authority, including without limitation, the Secretaría de Hacienda y Crédito Público , Instituto Mexicano del Seguro Social , Instituto del Fondo Nacional para la Vivienda de los Trabajadores or Sistema de Ahorro para el Retiro , and such default shall prove to have or may reasonable expect to have a Material Adverse Change.
(g) Insolvency . (i) if any Joint Obligor or any of their subsidiaries commences any proceeding or action (A) under any existing or future law of any jurisdiction (domestic or foreign) relating to concurso mercantil , insolvency, bankruptcy reorganization or relief of debtors, seeking to adjudicate it a concurso mercantil, Lenderrupt or insolvent, or seeking reorganization, arrangement, liquidation, dissolution, or other relief with respect to it or its debts, or (B) seeking appointment of a síndico , conciliador , receiver, auditor, custodian, manager, conservator, or other similar official for all or any substantial part of its assets, or if any Joint Obligor or any of its subsidiaries makes a general assignment for the benefit of its creditors; or (ii) any proceeding or other action of similar nature as such referred to in this clause (i) above has commenced against the Joint Obligor or any of its subsidiaries which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) any action related thereto remains undismissed for a period of 60 (sixty) calendar days; or (iii) there shall be commenced under any existing or future law of Mexico or by any competent jurisdiction against the Joint Obligor or any of its subsidiaries, any proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been discharged, or stayed or bonded pending appeal within 60 (sixty) calendar days from the entry thereof; or (iv) the Borrower or any of the Joint Obligors or its subsidiaries is unable to, or admits in writing its inability to, pay its debts as they become due.
(h) Judgments . Any judgments that may not be contested, involving in the aggregate an amount exceeding, jointly or separately, USD$5,000,000 (five million Dollars 00/100) or the equivalent thereof in any currency, against the Borrower, any Joint Obligor and/or any of its subsidiaries, and that it has as a consequence a Material Adverse Effect.
 
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(i) Effectiveness of the Agreement . (i) The Borrower and any Joint Obligor or its subsidiaries appeal the effectiveness and enforcement of any document related herewith, (ii) a judicial, arbitral or administrative proceeding commences in order to appeal the effectiveness and enforcement of this Agreement, or (iii) any covenant of the Joint Obligors under this Agreement ceases to be valid and enforceable.
(j) Authorizations . (i) If any license, approval, registry, permit or government authorization or of any other nature necessary for the execution or compliance by the Borrower or by any of the Joint Obligors or its subsidiaries of this Agreement, or for the validity or enforceability of this Agreement, the Promissory Notes or any other related documents that is not obtained, maintained or has been revoked, modified or is no longer valid and if any license, concession, certificate, consent, registry, permit or government authorization or of any other nature of the Borrower and the Joint Obligors to carry out its activities in the ordinary course of business, including, without limitation, any other authorizations, concessions and certificates, granted by the Ministry of Transportation and Communications to the Joint Obligors to act as concessionaire of public air transportation services in accordance with Mexican law are not obtained, maintained or revoked or cease to be valid and such situation is not cured within 60 (sixty) days, as long as such term does not result in a Material Adverse Effect under the el Step-In Agreement.
(k) Expropriation . If any governmental authority nationalizes, seizes, intervenes or otherwise expropriates all or any substantial part of the assets of any of the Borrower or of any Joint Obligor or of its subsidiaries or the shares issued by, or property of (as the case may be) any of the Joint Obligor or its subsidiaries, or takes any action (including the aforesaid) that would prevent the Borrower or any Joint Obligor from performing any of their obligations under this Agreement.
(l) Material Adverse Effect . If any circumstance, event or condition on the business, operations, assets, conditions (financial or otherwise) or substantial part of the Borrower, any Joint Obligor or its subsidiaries, occurs that affects (a) the capacity of the Borrower or any of the Joint Obligors to punctually perform any of its covenants under this Agreement, (b) the legality, validity or enforceability of this Agreement, or (c) the rights and remedies of the Banks under this Agreement. In order to determine if an adverse effect is substantial the general financial and operational situation of the Borrower and the Joint Obligors shall be considered, jointly (a “ Material Adverse Effect ”).
(m) Share structure and Change of Control . If there occurs any Change of Control without prior written consent of the Banks, in the understanding that the Joint Obligors can make modifications to their share structure only in the case that such change is the effect of registering representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ) and any sale of shares thereafter.
 
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(n) Material Adverse Change . Any event shall occur affecting adversely and substantially the economic situation or the business in which the Joint Obligors participate.
(o) Business Irruption . In any event that any of the Joint Obligors shall stop or in any way cease the activities considered substantial in its regular course of business.
(p) Default of other obligations . If any of the Borrower and/or the Joint Obligors cease to make the contributions or in any manner alter, modify, cancel or terminate their contribution and/or assignment in favor of the assets of the Borrower, of nay rights related to any reimbursement of the PDP’s with respect to the Financed Aircraft as well as any rights related to the BFE and SSBFE Agreements, as well as credits for engines.
(q) Reserve Account . If the Borrower or the Joint Obligors do not restitute the amounts disbursed by the Borrower to the Reserve Account in order to make payments to the Banks in accordance with this Agreement in a maximum term of 5 (five) days following the date in which the Borrower has disbursed such amounts.
TWENTIETH.- SURVEILLANCE.- The Banks shall have at all time the right to ensure that the amount of the Credit Line is destined to the purposes specified herein and may designate a person that ensures the accurate compliance of the Borrower’s covenants. With respect to accounting aspects, the Banks are entitled to order, at their cost, audits as often as deem appropriate performed by auditors designated by the Banks, as long as the operations of the Borrower are not affected. The Borrower agrees to deliver the Banks all the documents or data reasonably requested in connection with the faculty contained in this clause.
TWENTYFIRST.- CERTIFICATION.- The parties agree that the accounting balance statement of this instrument certified by the Lender’s Accountant shall be an executive instrument and shall be conclusive evidence with respect to the balance of indebtedness the Borrower, for all applicable legal effects, in accordance with Article 68 of the Financial Institution Law.
TWENTYSECOND.-NOTICES .- All notices and in general other communications to be given or made under this Agreement, including service of process, shall be delivered to the following domiciles, and in every case, the notice shall be effective when made at the following domiciles:

Banks:	  	Santander
Domicile:
 
Prolongación Paseo de la Reforma No. 500, Colonia Lomas de Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01219. Module 403	
 
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	  	Attention: Osvaldo Rancé Cachafeiro / Francisco García
Tel.: + 52 (55) 5269-2836 / +52 (55) 5261-7392
Fax.: + 52 (55) 5269-2227 / + 52 (55) 5269-1833
Email: orance@santander.com.mx / fjgarcias@santander.com.mx	
		
	  	Bancomext
Domicile:
 
Periférico Sur 4333, Colonia Jardines en la Montaña, Delegación Tlalpan, México, Distrito Federal, C.P. 14210.
 
Attention:
 
Attention: Ricardo Luis Ramos San Martín y René Ross Valenzuela
Tel.: 5449-9235 / 5449-9126
Fax.: 5449-9485
Email: rramos@bancomext.gob.mx / rross@bancomext.gob.mx	
		
Borrower	  	Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trastee under Trust No. F/[*]
 
Domicile:
 
Blvd. Manuel Avila Camacho No. 40, Piso 17
Colonia Lomas de Chapultepec
C.P. 11000
México, Distrito Federal
Attention: Carlos Jáuregui Baltazar and/or Luis Alberto Ramírez
Trust Division
Tel: 5201-8000
Fax: 5201-8144
Email: carlos.jauregui@db.com , luis-alberto.ramirez@db.com	
		
Joint Obligors:	  	CONTROLADORA
Domicile: Avenida Prolongación Paseo de la Reforma # 490, Primer Piso
Colonia Santa Fe Peña Blanca
Código Postal 01210
México Distrito Federal
 
Attention: General Counsel
Tel.: 52616400
 
CONCESIONARIA
Domicile: Avenida Prolongación Paseo de la Reforma # 490, Primer Piso	
	  	Colonia Santa Fe Peña Blanca
Código Postal 01210
México Distrito Federal
 
Attention: General Counsel
Tel.: 526166400	
 
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The parties may amend the domiciles hereof, provided that such amendment shall be notified by written notice to the other parties.
TWENTYTHIRD.- WAIVER.- If any of the Banks fail to exercise or delays in the exercise of any right or privilege pursuant to this Agreement, shall not be construed, for such fact, that that such Bank has waived said rights or privileges. Likewise, any total or partial exercise of any right or privilege under this Agreement shall not prevent any future exercise or the exercise of any other right or privilege. The remedies stated herein, shall not exclude the present or future provisions of the applicable law.
TWENTYFOURTH.- CREDIT LINE REPORTS.- The Borrower and the Joint Obligors hereby authorize each of the Banks to furnish and, if applicable, request information related to its economic situation, financial and credit operations, and to the credit information institutions referred to in the Ley para Regular las Sociedades de Información Crediticia, and other financial institutions which are members of Santander Financial Group, prior or after the execution of this Agreement.
TWENTYFIFTH.- GOVERNING LAW, SUBMITTION TO JURISDICTION AND COMPLIANCE.- All the matters not considered under this Agreement the parties shall be governed by and construed in accordance with the General Law of Negotiable Instruments and Credit Operations, the Law of Credit Institutions and any other applicable provisions. For the interpretation and compliance of this Agreement, the parties hereby irrevocably and unconditionally submit to the jurisdiction of the courts of Mexico, Federal District, in any legal action, suit or proceeding arising out of or relating to this Agreement, and the parties expressly waive any other forum or court that may correspond by reason of their present or future domiciles or otherwise.
TWENTYSEVENTH.- EXHIBITS.- The parties agree that the exhibits referred to in this agreement form part of this Contract.
[SIGNATURE PAGE FOLLOWS]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement in 5 (five) copies each one considered as an original and together the same instrument, as of the date first above written.
THE BANKS
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
	 	Name:	 	Mauricio Rebolledo Fernández	 		 		 	Name:	 	Osvaldo Rancé Cachafeiro	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	 	 		 	By:	 	 	
	 	Name:	 	Eduardo Muñiz Juárez	 		 		 	Name:	 	Ricardo Ramos San Martín	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
ADMINISTRATIVE AGENT
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
	 	Name:	 	Mauricio Rebolledo Fernández	 		 		 	Name:	 	Osvaldo Rancé Cachafeiro	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
 
46

THE BORROWER
DEUTSCHE BANK MÉXICO, S. A.,
INSTITUCIÓN DE BANCA MÚLTIPLE,
DIVISIÓN FIDUCIARIA ACTING AS TRUSTEE OF THE
TRUST No. F/1498

By:	 	 	
	 	Name:	 	Carlos Jáuregui Baltazar	
	 	Title:	 	Fiducairy delegate	
THE JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
 
47

ANNEX 1
DISBURSEMENTS AND AMORTIZATIONS

 	  	 	  	 	  	AC # 24	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Aug-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Feb-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Aug-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 25	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Sep-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Mar-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Sep-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Sep-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 26	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Nov-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-May-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Nov-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Nov-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 27	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Dec-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Jun-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Dec-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Dec-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
 
48

																	
 	  	 	  	 	  	AC # 28	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	764,672.28	  	 	 	459,847.09	  	 	 	304,825.19	  	
PDP	  	24M	  	01-Aug-11	  	 	1,529,344.57	  	 	 	919,694.18	  	 	 	609,650.39	  	
PDP	  	18M	  	01-Feb-12	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Feb-13	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	03-Mar-14	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 29	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-Feb-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Aug-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-Feb-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Aug-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Sep-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
				
 	  	 	  	 	  	AC # 30	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
PDP/Reimbursement	  	Concepto	  	Fecha de Pago	  	Monto Total	 	 	Porción
Santander	 	 	Porción
Bancomext	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-May-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Nov-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-May-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Nov-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Dec-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
 
49

ANNEX 2
DISBURSEMENT REQUEST
[Letterhead of the Borrower]
Mexico, Federal District, [*], [*], 2011
Banco Nacional de Comercio Exterior, S.N.C.
Periférico Sur 4333
Colonia Jardines en la Montaña
Delegación Tlalpan, México
Distrito Federal, C.P. 14210
Attention: Ricardo Ramos San Martín
Banco Santander (México), S.A.
Institución de Banca Múltiple
Grupo Financiero Santander
Prol. Paseo de la Reforma 500 4o Piso
Modulo 403
México, D.F. 01219
Attention: Osvaldo Rancé Cachafeiro
Ref: Credit Agreement
Dear sirs:
We make reference to the Revolving Credit Line Agreement, dated as of July 27, 2011, (the “ Credit Line Agreement ”) among Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as Trustee of the Trust number F/1498, as borrower (the “ Borrower ” or, as trustee pursuant to the Trust number F/1498, the “ Trustee ”), and Banco Santander (Mexico), S.A., Institución de Banca Mútliple, Grupo Financiero Santander and Banco Nacional de Comercio Exterior, S.N.C., acting as Lenders (the “ Bank ” or “ Banks ”); with the acknowledgement and consent of Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., as Joint Obligors of the Borrower. Capitalized terms used but not defined herein shall have the meaning specified in the Credit Line Agreement.
In connection with the aforementioned and pursuant to the terms of the Credit Line Agreement, we hereby and irrevocably notify that the Borrower wishes to disburse on [*] [*], 2011, an amount of US$[            ] ([million] Dollars 00/100), which must be deposited in the account set forth herein.
 
50

By virtue of the aforementioned, we irrevocably instruct the Lender to deposit the amounts corresponding to the applicable disbursementin the following account:
Bank: [*]
Beneficiary: Deutsche Bank México, S.A., Trust F/1498
Clave SWIFT: [*]
Account No.: [*]
CLABE: [*]

Very truly yours,	
	
Deutsche Bank México, S.A.,
Institución de Banca Múltiple, División Fiduciaria,
acting solely as Trustee of Trust number F/1498,	

Name:	 	Carlos Jáuregui Baltazar	
Title:	 	Fiducairy delegate	
 
51

ANNEX 3
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
Pursuant to value hereby received, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee of the Trust Number F/1498 (the “ Trustee ”) by this Promissory Note unconditionally promises to pay to the order of Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander and of Banco Nacional de Comercio Exterior, S.N.C. (the “ Lender ”) the principal sum of US$[            ] ([            ] Dollars 00/100) (the “Principal Sum”) payable in [            ] ([            ]) installments, in each of the following dates (each of which dates are a “ Payment Day ” and the last of which is the “ Expiration Date ”) for the amounts set forth as follows:
[INCLUDE THE CALENDAR CORRESPONDING TO EACH PROMISSORY NOTE]

 	  	 	  	 	  	AC # 24	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Aug-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Feb-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Aug-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 25	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Sep-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Mar-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Sep-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Sep-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 26	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Nov-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-May-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Nov-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Nov-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
 
52

																	
 	  	 	  	 	  	AC # 27	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Dec-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Jun-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Dec-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Dec-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 28	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	764,672.28	  	 	 	459,847.09	  	 	 	304,825.19	  	
PDP	  	24M	  	01-Aug-11	  	 	1,529,344.57	  	 	 	919,694.18	  	 	 	609,650.39	  	
PDP	  	18M	  	01-Feb-12	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Feb-13	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	03-Mar-14	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 29	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-Feb-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Aug-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-Feb-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Aug-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Sep-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
				
 	  	 	  	 	  	AC # 30	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
PDP/Reimbursement	  	Concepto	  	Fecha de Pago	  	Monto Total	 	 	Porción
Santander	 	 	Porción
Bancomext	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-May-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Nov-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-May-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Nov-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Dec-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
Likewise, the Borrower also unconditionally promises to pay the Lender, without prior request, ordinary interests over the unpaid Principal Sum during each Interest Period due (as this term is defined herein) since the date of this Promissory Note and until the Expiration Date, on an annual rate equivalent to the Ordinary Interest Rate (as this term is defined herein).
 
53

Interests will be due quarterly on the last day of each Period of Interests; in the understanding that, in case such day is not a Business Day, such payment shall be made on the next Business Day (each one an “ Interest Payment Date ”); in the understanding that the last Interest Payment Day shall occur precisely on the Expiration Date.
In case of an event of default concerning the payment of any amount due under this Note (except for ordinary interest) default interest will generate over the due and unpaid amount, beginning on the date in which such amount should have been paid until it is paid in full, at an annual interest rate of 1.25 (one point twenty five) times the Ordinary Interest Rate applicable during the period in which the default occurs and continues (the “ Default Interest Rate ”).
If any Payment Date or any Interest Payment Date occurs on a day which is not a Business day, such payment shall be made on the next Business Day.
Ordinary Interest hereunder shall be calculated on the basis of the actual number of days elapsed divided by 360 (three hundred sixty), including the first day but excluding the last day of the corresponding calculation period.
Default Interest due under this Note shall be calculated by dividing the Default Interest Rate applicable by three hundred sixty (360) and the result will be applied to the amounts due and unpaid, the result will be the default interest of each day that the Borrower agrees to pay on demand according to this Promissory Note.
For purposes of this Promissory Note, the following terms shall have the following meanings:
“ Business Day ” means any day in which the banking institutions in Mexico are not authorized to be closed.
“ Dollars ” or “ $ ” means the legal currency of the United States of America.
“ Interest Period ” means, for the first interest period, the period that begins on the date of this Promissory Note and ends on the Payment Date, and for each subsequent period, the period that begins the last day of the Interest Period next succeeding and that concludes on the next Payment Date.
“ Ordinary Interest Rate ” means, a rate equivalent to the LIBOR rate plus a margin of 265 (two hundred and sixty five) base points.
The Borrower will makes all payments of principal, interest, commissions and any other amount due under this Promissory Note free of interest, contributions, withholdings, deductions, fees or any other fiscal responsibility due under the laws, regulations and
 
54

other applicable legal dispositions in the United Mexican States, without any compensation, in immediately available funds, before 12:00PM (Mexico City, Federal District, United Mexican States) of the day in which the amount concerning becomes due. All payments made by the Borrower according to this Promissory Note shall be made in Dollars, through the account held between the Borrower and Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander.
The Borrower agrees to repay upon demand, in the same way and using the same funds, any costs and reasonable and duly justified amounts incurred in relation to the compliance or execution of this Promissory Note (including, without limitation, all documented legal costs).
The Borrower hereby waives any judicial proceedings, file, presentation, notice or lawsuit of any nature en relation to this Promissory Note.
Pursuant to Article 128 of the General Law of Credit Instruments of the United Mexican States, the period of presentment of this Promissory Note is hereby irrevocably extended until the date that is 6 (six) months after its Expiry Date; provided, however, that such extension does not imply that this Promissory Note cannot be presented for payment at an earlier date.
This Promissory Note shall be governed and interpreted according to the laws of the United Mexican States.
Concerning everything related to this Promissory Note, the Trustee hereby irrevocably submits to the jurisdiction of the courts of Mexico City, federal District, United States of Mexico, renouncing any other jurisdiction that by reason of his address, present or future, or any other reason, might correspond.
In case of a discrepancy between this Promissory Note and the Credit Line Agreement dated July 27, 2011 entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as trustee of Trust f/1498; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent and Banco Nacional de Comercio Exterior, S.N.C.; and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., (the “ Credit Line Agreement ”), the Credit Line Agreement will prevail.
This Promissory Note is executed in      pages which constitute one document.
 
55

Mexico City, Mexico, on              201
The Borrower
Deutsche Bank México, S.A., Institución de Banca Múltiple,
División Fiduciaria, acting solely as Trustee in Trust F / 1498

By:	 	 	
	 	Name:	 	Carlos Jáuregui Baltazar	
	 	Title:	 	Fiduciary Delegate	
Domicile:
Blvd. Manuel Ávila Camacho No 40, Piso 17
Colonia Lomas de Chapultepec, C.P. 11000
Mexico City, Mexico
As Joint Obligor
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
 
56

ANNEX 4
BANK ACCOUNTS

THE BORROWER	  		
		
BANCOMEXT	  		
		
Account in the U.S	  		
Currency : US Dollars	  		
		
Standard Chartered Bank	  		
Nueva York, N. Y.	  		
		
Account number	  	3544 034 030 001 MATRIZ	
FEDWIRE	  	026002561	
CHIPS	  	0256	
SWIFT	  	SCBLUS33	
	
ADDRESS:
One Madison Avenue Third Floor, Nueva York, N. Y., C.P. 10010	

SANTANDER	  		
		
Account Name:	  	Banco Santander (Mexico), S.A.	
Bank:	  	JP Morgan Chase Bank, N.A.	
Account Number:	  	400047144	
Address:	  	4 New York Plaza, 15 th floor, 10004 New York, NY, USA	
FEDWIRE	  		
CHIPS	  		
SWIFT	  		
 
57

ANNEX 5
RESPONSIBLE OFFICER CERTIFICATE
[NAME OF THE BORROWER/JOINT OBLIGORS]
[Name of the Responsible Officer], as [title] of [Name of Borrower]/[Joint Obligors], a company [ — ] duly organized and existing under the laws of Mexico (the “Company”), pursuant to certain revolving credit line agreement dated July 27, 2011 (the “Credit Line Agreement”), entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee in Trust f/1498, as borrower; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent, and Banco Nacional de Comercio Exterior, S.N.C. as lender and on the other hand Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., each, individually, as a joint obligor and jointly as the joint obligors, I hereby certify that to this date:
1. The representations made by [Name of the Borrower] / [Nam of the Joint Obligors] pursuant to the credit Line Agreement and/or the agreements, certificates, instruments and documents related with it, are true and correct in all respects and are valid and fully enforceable to this date.
2. There has been no default in the obligations of [Name of the Borrower] / [Nam of the Joint Obligors], pursuant to the Credit Line Agreement and/or the agreements, certificates, instruments and documents executed by the [Borrower] / [Joint Obligors], and there cannot be a default of such documents as a consequence of the disposition that pursuant to the Credit Line Agreement that is requested on this date;
3. There is no Event of Default pursuant to the Purchase Agreement.
4. The Purchase Agreement, the First Novation and the Second Novation are valid and fully enforceable to this date.
The capitalized terms used in this Certificate and not defined otherwise, shall have the same meaning as set forth in the Credit Line Agreement.
IN WITNESS WHEREOF, this Certificate has been executed on July     , 2011.

By:	 	 	
	 	Name:	 	[ — ]	
	 	Title:	 	[ — ]	
 
58

FIRST AMENDMENT TO THE REVOLVING CREDIT LINE AGREEMENT DATED JULY 27, 2011 ENTERED INTO BY AND BETWEEN DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA ACTING SOLELY AS TRUSTEE IN THE TRUST NUMBER F/1498 (HEREINAFTER REFERRED TO AS THE “BORROWER”); BANCO SANTANDER (MÉXICO), S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER (HEREINAFTER REFERRED TO AS “SANTANDER”); BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (HEREINAFTER REFERRED TO AS “BANCOMEXT”; SANTANDER AND BANCOMEXT MAY BE REFERRED TO JOINTLY AS THE “BANKS” AND, EACH ONE, AS APPLICABLE, AS “BANK”); CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (HEREINAFTER REFERRED TO AS “CONTROLADORA”) AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (HEREINAFTER REFERRED TO AS “CONCESIONARIA” AND HEREINAFTER, CONCESIONARIA AND CONTROLADORA MAY BE REFERRED TO AS, INDIVIDUALLY, A “JOINT OBLIGOR” AND JOINTLY, AS “JOINT OBLIGORS”), PURSUANT TO THE FOLLOWING RECITAL, REPRESENTATIONS AND CLAUSES:
RECITAL
I. That the Parties have entered into on July 27, 2011, a revolving Credit Line Agreement, pursuant to which Santander and Bancomext have made available to the Borrower, a revolving credit line agreement, with the appearance and agreement of the Joint Obligors of the Borrower (hereinafter referred to as the “Agreement”).
REPRESENTATIONS
 
 	I.	Santander represents, through its legal representatives that:	
a. It is a corporation duly organized in accordance with the laws of Mexico, authorized by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) to act as a Multiple Lendering Institution.
b. Its legal representatives have sufficient power and authority necessary to execute this Agreement, which has not been revoked or limited in any manner whatsoever.
 
 	II.	Bancomext represents, through its legal representatives that:	
a. It is a national corporation duly organized in accordance with the Organic Law of the External Commerce National Bank (Ley Orgánica del Banco Nacional de Comercio Exterior), published in the official gazette on January 20, 1986.
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever.
 
59

 	III.	The Borrower represents, through its legal representatives that:	
a. It is a trust duly created and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and authority to execute this Agreement, which have not been revoked, limited or modified whatsoever.
 
 	IV.	Each of the Joint Obligors, through its legal representatives that:	
a. It is a corporation (sociedad anónima promotora de inversion de capital variable) duly organized and validly existing in accordance with the laws of Mexico.
b. Its representative has the power and authority to execute this Agreement in accordance with the special powers granted to them for such effects, which have not been revoked, modified or limited in any manner whatsoever.
 
 	V.	The Parties represent, through its legal representatives that:	
a. It is their intention to modify certain Clauses of the Agreement in order to modify the dates of payment of interests of outstanding amounts, pursuant to the terms of this Amendment.
b. The parties recognize the authority of each of them.
The terms not defined herein or that are modified by this agreement, shal have the same meaning as set forth in the Agreement.
Pursuant to the above, the Parties hereby agree as follows:
CLAUSES
F IRST . The Parties agree that to the date of this Amendment, the “BORROWER” has made certain disbursements pursuant to the Agreement, which are set forth herein (the “Performed Disbursements”):
Disbursement 1: made on 29 July 2011.
Disbursement 2: made on 01 August 2011.
Disbursement 3: made on 01 September 2011.
Disbursement 4: made on 01 November 2011.
Disbursement 5: made on 28 December 2011.
Disbursement 6: made on de 01 February 2012.
Therefore, the Parties agree that the date of payment of interests of the Performed Disbursements, be made in accordance with the following calendar:
Disbursement 1: On April 30, 2012 and the next date of payment of interests shall be on May 1, 2012.
 
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Disbursement 3: On March 01 2012, and the next date of payment of interests shall be on May 01 2012.
Disbursement 5: On March 28 2012, and the next date of payment of interests shall be on May 01 2012.
Disbursement 2, 4 and 6: On May 01 2012.
In the understanding that subsequent payments of interests shall be made in accordance with clause Third of this amendment.
S ECOND . The Parties agree that as of May 1, 2012, the payment of interests of outstanding amounts as a result of the Performed Disbursements and regarding all those to be made in the future by the Borrower porsuant to the Agreement, are modified in terms of clause third herein.
T HIRD
3.1 The Parties agree to modify the definition of “Interests Period” of the “DEFINITIONS” of the Agreement, to be set forth as follows:
““Interests Period” shall mean the period to calculate the interests base don which interests shall be calculated on the outstanding amount of the Credit, and will start on the next day on the Interest Payment Date immediately preceding and will end on the Interest Payment Date immediately following. For such effect the interests shall be calculated and payable on February 1, May 1, August 1 and November 1 of each year in the understanding that, in case such day is not a Business Day immediately following (each an “Interests Payment Date”)””.
3.2 The Parties agree to modify the clause fifth of the Agreemene regarding the “Ordinary Interests” to be set forth as follows:
““FIFTH.- ORDINARY INTERESTS.- The Borrower shall pay the Bank, without prior request, ordinary interests on all outstanding amounts payable, which shall be calculated and payable per expired Interests Period at the Ordinary Interest Rate. The interests shall be calculated and payable on the corresponding Interests Payment Date. The calculation of interest will be performed using the number of calendar days that have elapsed between each Interests Payment Date and the following, with a base year of three hundred and sixty (360) days.
Notwithstanding the foregoing, the Borrower, the Joint Obligors and the Banks agree that if the LIBOR Rate cannot be determined for a specific Interests Period, then: (a) the applicable interest rate will be the Alternate Rate in Dollars, or (b) in the event that the Alternate Rate in Dollars cannot be determined, the Banks, Borrower and the Joint Obligors shall negotiate in good faith and agree on the interest rate that will be used for the corresponding Interest Period, and (c) in the case that the parties do not agree on the applicable interest rate for the applicable Interests Period within 10 (ten) Business Days from the Determination Date for the interests, the Banks shall determine (and shall deliver to the Borrower and the Joint Obligors a certificate containing the basis for such determination) the applicable interest rate over such period reflecting the financial costs of the Banks, and such rate shall be applied for the applicable Interest Period.””
 
61

F OURTH . The Parties agree to modify Annex 3 of the Agreement “Promissory Note Format”, therefore as of the date of this amendment, the terms and conditions set forth in the document attached hereto as Annex A shall be in effect.
Additionally, the Parties agree to substitute the Promissory Notes pursuant to the performed Disbursements for others that contain the terms set forth in Annex A.
F IFTH . The Parties agree and accept that the execution of this amendment, is not an will not, under any circumstance, be construed as a novation, therefore the parties agree that, except as set forth above, the rest of the terms and conditions of the Agreement and its annexes will remain fully valid and without amendment.
S IXTH . All the matters not considered under this Agreement the parties shall be governed by and construed in accordance with the General Law of Negotiable Instruments and Credit Operations, the Law of Credit Institutions and any other applicable provisions. For the interpretation and compliance of this Agreement, the parties hereby irrevocably and unconditionally submit to the jurisdiction of the courts of Mexico, Federal District, in any legal action, suit or proceeding arising out of or relating to this Agreement, and the parties expressly waive any other forum or court that may correspond by reason of their present or future domiciles or otherwise.
S ÉPTIMA . The Parties set forth as their domiciles for all notices related to this amendment the ones set out in the Agreement.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
 
62

IN WITNESS WHEREOF, the parties have caused this Agreement in 5 (five) copies each one considered as an original and together the same instrument, in Mexico City, on February 28, 2012.
THE BANKS
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
			
Title: Legal representative	 		 	Title: Representante legal	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	 	 		 	By:	 	 	
Name:	 	Eduardo Muñiz Juárez	 		 	Name:	 	Ricardo Ramos San Martín	
			
Title: Legal representative	 		 	Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
63

THE ADMINISTRATIVE AGENT
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
			
Title: Legal representative	 		 	Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
64

THE BORROWER
DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE
DIVISIÓN FIDUCIARIA, EN SU CARÁCTER DE FIDUCIARIO
DEL FIDEICOMISO NÚMERO F/1498

By:	 	 	
Name: Carlos Jáuregui Baltazar	
	
Title: Fiduciary Delegate	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
65

THE JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
	
Title: Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
	
Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
66

ANNEX A
PROMISSORY NOTE FORMAT
PROMISSORY NOTE
Pursuant to value hereby received, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee of the Trust Number F/1498 (the “Trustee”) by this Promissory Note unconditionally promises to pay to the order of Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander and of Banco Nacional de Comercio Exterior, S.N.C. (the “Lender”) the principal sum of US$[        ] ([        ] Dollars 00/100) (the “Principal Sum”) payable in [    ] ([    ]) installments, in each of the following dates (each of which dates are a “Payment Day” and the last of which is the “Expiration Date”) for the amounts set forth as follows:
[INCLUDE THE CALENDAR CORRESPONDING TO EACH PROMISSORY NOTE]
Likewise, the Borrower also unconditionally promises to pay the Lender, without prior request, ordinary interests over the unpaid Principal Sum during each Interest Period due (as this term is defined herein) since the date of this Promissory Note and until the Expiration Date, on an annual rate equivalent to the Ordinary Interest Rate (as this term is defined herein).
Interests will be due on February 1, May 1, August 1 and November 1. In case such day is not a Business Day, such payment shall be made on the next Business Day (each one an “Interest Payment Date”); in the understanding that the last Interest Payment Day shall occur precisely on the Expiration Date.
In case of an event of default concerning the payment of any amount due under this Note (except for ordinary interest) default interest will generate over the due and unpaid amount, beginning on the date in which such amount should have been paid until it is paid in full, at an annual interest rate of 1.25 (one point twenty five) times the Ordinary Interest Rate applicable during the period in which the default occurs and continues (the “Default Interest Rate”).
If any Payment Date or any Interest Payment Date occurs on a day which is not a Business day, such payment shall be made on the next Business Day.
Ordinary Interest hereunder shall be calculated on the basis of the actual number of days elapsed between each Interests Payment Dates and the following one, on a basis of a year of 360 (three hundred sixty) days, including the first day but excluding the last day of the corresponding calculation period.
Default Interest due under this Note shall be calculated by dividing the Default Interest Rate applicable by three hundred sixty (360) and the result will be applied to the amounts due and unpaid, the result will be the default interest of each day that the Borrower agrees to pay on demand according to this Promissory Note.
 
67

For purposes of this Promissory Note, the following terms shall have the following meanings:
“ Business Day ” means any day in which the banking institutions in Mexico are not authorized to be closed.
“ Dollars ” or “ $ ” means the legal currency of the United States of America.
“ Período de Intereses ” significa el período para el cómputo de intereses con base en el cual se calcularán los intereses que devengue el saldo insoluto del Crédito, e iniciará al día siguiente de la Fecha de Pago de Intereses inmediata anterior y terminará en la Fecha de Pago de Intereses inmediata siguiente. Para tales efectos los intereses serán calculados y pagaderos los días 1 de febrero, 1 de mayo, 1 de agosto y 1 de noviembre de cada año en el entendido que, en caso de que dicho día no sea un Día Hábil, dicho pago se realizará el Día Hábil inmediato siguiente (cada una, una “Fecha de Pago de Intereses”).
“ Interest Period ” means, the period for the calculations of interests based on which generated interests shall be calculated on outstanding amounts of the Credit Line, and will begin on the next day of the Interests Payment Date immediately preceding and will end on the Interests Payment Date immediately following. For such effect, interests shall be calculated and paid on February 1, May 1 and November 1 of each year, in the understanding that, if such date is not a Business Day, payment will be made on the next Business Day (each, an “Interests Payment Date”).
“ Ordinary Interest Rate ” means, a rate equivalent to the LIBOR rate plus a margin of 265 (two hundred and sixty five) base points.
The Borrower will make all payments of principal, interest, commissions and any other amount due under this Promissory Note free of interest, contributions, withholdings, deductions, fees or any other fiscal responsibility due under the laws, regulations and other applicable legal dispositions in the United Mexican States, without any compensation, in immediately available funds, before 12:00PM (Mexico City, Federal District, United Mexican States) of the day in which the amount concerning becomes due. All payments made by the Borrower according to this Promissory Note shall be made in Dollars, through the account held between the Borrower and Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander.
The Borrower agrees to repay upon demand, in the same way and using the same funds, any costs and reasonable and duly justified amounts incurred in relation to the compliance or execution of this Promissory Note (including, without limitation, all documented legal costs).
The Burrower hereby waives any judicial proceedings, file, presentation, notice or lawsuit of any nature en relation to this Promissory Note.
Pursuant to Article 128 of the General Law of Credit Instruments of the United Mexican States, the period of presentment of this Promissory Note is hereby irrevocably extended until the date that is 6 (six) months after its Expiry Date; provided, however, that such extension does not imply that this Promissory Note cannot be presented for payment at an earlier date.
 
68

This Promissory Note shall be governed and interpreted according to the laws of the United Mexican States.
In case of a discrepancy between this Promissory Note and the Credit Line Agreement dated July 27, 2011 entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as trustee of Trust f/1498; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent and Banco Nacional de Comercio Exterior, S.N.C.; and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., (the “Credit Line Agreement”), the Credit Line Agreement will prevail.
Concerning everything related to this Promissory Note, the Trustee hereby irrevocably submits to the jurisdiction of the courts of Mexico City, federal District, United States of Mexico, renouncing any other jurisdiction that by reason of his address, present or future, or any other reason, might correspond.
This Promissory Note is executed in      pages which constitute one document.
Mexico City, Mexico, on      201
The Borrower
Deutsche Bank México, S.A., Institución de Banca Múltiple,
División Fiduciaria, acting solely as Trustee in Trust F / 1498

By:	 	 	
Name: Carlos Jáuregui Baltazar	
Title: Fiduciary Delegate	
Domicile:	
Blvd. Manuel Ávila Camacho No 40, Piso 17
Colonia Lomas de Chapultepec, C.P. 11000
Mexico City, Mexico
As Joint Obligor
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
Title: Legal representative	
 
69

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
Title: Legal representative	
 
70

Exhibit 10.53
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
MASTER AGREEMENT
This Master Agreement (the “ Agreement ”) is made and entered into effective as of July 20, 2009 (“ Effective Date ”) by and between Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a. Volaris), a company duly organized and existing under the laws of the United Mexican States (“Mexico”), whose address is Avenida Prolongación Paseo de la Reforma 490, Piso 1 Col. Santa Fe Peña Blanca 01210, Mexico , (“ Customer ”) and Sabre Inc., a Delaware corporation located at 3150 Sabre Drive, Southlake, TX 76092 (“ Sabre ”).
The terms of this Agreement shall apply to each Work Order and to all System(s) and Services provided to Customer by Sabre hereunder. The terms and conditions set forth in this Agreement and in any Work Order shall control if there are different or additional terms in any Customer purchase order form or Sabre’s acceptance form or invoice. In the event of a conflict between the terms and conditions of the Agreement and any Work Order, the Work Order shall supersede the Agreement only for the engagement covered under the specific Work Order.
 
1. Definitions . For purposes of this Agreement, certain defined terms will have the meanings set forth in Exhibit A to this Agreement.
2. Term and Termination .
a) Term. This Agreement will commence as of the Effective Date and continue until the later of (i) five (5) years following the Effective Date, or (ii) the expiration of all Work Orders to this Agreement.
b) Termination. Either party may terminate any Work Order under this Agreement if the other party commits a Material Breach of the Work Order and fails to cure such Material Breach within thirty (30) days following receipt of written notice from the non-breaching party describing the breach in detail (except for a breach regarding failure to pay amounts due, in which case the period to cure shall be thirty (30) days). Sabre may terminate this Agreement and/or any Work Order if Sabre has given Customer written notice of a default in payment of any undisputed amounts due and payable more than three (3) times in any twelve (12) month period during the term. Notwithstanding the above, if the Material Breach cannot reasonably be cured within a thirty (30) day cure period, the non-breaching party’s right to terminate will not be permitted so long as the breaching party (i) provides a written remediation plan to the non-breaching party prior to the expiration of the thirty (30) day cure period; and (ii) starts the remediation process as set forth in the plan during the thirty (30) day cure period; and (iii) completes the remediation within sixty (60) days from the date of the original default notice. In addition to all other remedies, upon written notice to Customer as set forth in Section 9(g) below, Sabre shall also have the right to suspend Customer’s access to any System or any Service without terminating this Agreement or any related Work Order if Customer fails to pay an undisputed sum for a period in excess of thirty (30) days after it becomes payable.
c) Early Termination. Sabre and Customer agree that each Work Order will contain and define provisions regarding early termination. The terms and conditions for early termination will be set forth in each Work Order to this Agreement.
d) Effects of Termination. Upon the expiration or termination of this Agreement or any Work Order, unless provided otherwise in a Work Order, all license or access rights granted therein will immediately cease to exist, Customer shall promptly discontinue all use of the System(s), erase all copies of the System(s) from Customer’s computers, and return to Sabre all copies of the System(s), Documentation, and any other Sabre Confidential Information in Customer’s possession or control, and have an officer of Customer certify to Sabre in writing that it has fully complied with these requirements, except that Customer may retain a copy of such information if it is required by law and consistent with its record retention policies so long as Customer holds such Confidential Information in confidence in accordance with Section 7 below. Sabre shall return all Customer’s Confidential Information to Customer to Sabre, and have an officer of Sabre certify to Customer in writing that it has fully complied with these requirements, except that Sabre may retain a copy of such information if it is required by law and consistent with its record retention policies so long as Sabre holds such Confidential Information in confidence in accordance with Section 7 below.
3. Fees and Payment .
a) Fees. Customer shall pay Sabre the fees and charges set forth in the Work Orders to this Agreement.
b) Travel and Out-of-Pocket Expenses. Customer shall reimburse Sabre for all reasonable and pre-approved in writing Project related travel and incidental (T&I) out-of-pocket expenses incurred by

			
Sabre Inc. — Confidential	 	1	

Sabre in connection with this Work Order. Customer will provide Sabre with confirmed coach class travel within its network for Sabre employees conducting the work under this Agreement. If travel is not possible or available on Customers network, then Sabre employees will purchase and be reimbursed for coach class travel on another airline. Out of pocket expenses associated with the project include, but are not limited to, ground transportation expenses while on-site and during transit; lodging, food and incidental expenses incurred in the performance of this Agreement in accordance with the related Work Order. 
c) Payment Procedures Payment will be made by wire transfer to an account designated to Customer by Sabre. All fees and charges shall be due and payable forty-five (45) days after receipt of invoice from Sabre. Each monthly invoice will itemize the fees and charges, and will be accompanied by reasonable detail. If an Affiliate of Sabre performs any of Services, Sabre may opt for such Affiliate to invoice Customer for the Services it provides, in which case Customer will pay that Affiliate directly. Interest on any late payments shall accrue at the rate of one and one half percent (1.5%) per month or the highest rate permitted by applicable law, whichever is less, from the date such amount is due until finally paid. 
d) Payments without Set-Off. All payments by the parties hereunder shall be paid to the other party without set-off or reduction for any amounts owed, or claimed, from the parties. Parties hereby waive and disclaim any rights of offset or set-off.
e) Taxes. The fees and charges listed in this Agreement and Work Orders do not include taxes, duties or other assessments. Customer will be responsible for and will reimburse Sabre for all taxes or similar charges that are related to this Agreement or to payments made under this Agreement, other than taxes imposed on the net income of Sabre (collectively, “Taxes”). If Customer is required by law to make any deduction or withholding of Taxes from any payment due to Sabre under this Agreement, Customer will (i) timely and properly prepare and submit any necessary filings and remit such Taxes to the appropriate taxing authority, (ii) provide Sabre with governmental receipts evidencing Customer’s withholding and payment to the appropriate tax authorities in a timely manner and (iii) increase each payment related to this Agreement to the extent necessary to ensure that Sabre actually receives the amount that Sabre would have received if such payment had not been subject to Taxes. 
Sabre hereby agrees to provide Customer any documentation reasonably requested by Customer to allow Customer to comply with its obligations under
the applicable tax law with respect to the transactions covered by this Agreement, including without limitation, (i) a tax residency certificate, currently Form 6166, issued by the U.S. Department of the Treasury (Internal Revenue Service) or any substitute thereto, and (ii) upon request from Customer seek a provide Customer a new Form 6166 (or any substitute thereto), from the U.S. Department of Treasury.
4. Intellectual Property
a) Sabre Retention of Rights. Sabre retains exclusive ownership of all worldwide Intellectual Property Rights in the System(s) and Documentation, including any derivative work, modification, Update or Version thereof. Sabre and its suppliers reserve all rights in and to the System and Documentation not expressly granted to Customer in this Agreement.
b) Express Restrictions. The System(s), and its structure, organization, and source code constitute valuable trade secrets of Sabre. Unless otherwise permitted under the applicable Work Order, Customer agrees not to (i) modify, adapt, alter, translate, or create derivative works from a System; (ii) merge a System with other software; (iii) sublicense, lease, rent, or loan a System to any third party; (iv) reverse engineer, decompile, disassemble, or otherwise attempt to derive the source code for a System; or (v) otherwise use or copy the System except as expressly allowed in this Agreement. Decompiling a System is permitted to the extent the laws of Customer’s jurisdiction give Customer the right to do so to obtain information necessary to render a System interoperable with other software; provided, however, that Customer must first request such information from Sabre and Sabre may, in its discretion, either provide such information to Customer or impose reasonable restrictions, including a reasonable fee, on such use of a System to ensure that Sabre’s and its suppliers’ proprietary rights in the System are protected.
c) Backup Copies. For Systems and Documentation delivered to Customer by Sabre, Customer may make a reasonable number of copies solely for the permitted use and for backup purposes. Customer shall reproduce on each copy and on each partial copy of a System or Documentation any copyright notice and proprietary rights legend contained therein, as such notice and legend appear in the original.
5. Indemnification .
a) Sabre will defend, indemnify and hold harmless, at its expense, any action brought against Customer, Customer Affiliates, and their respective directors, officers and employees, to the extent that such action is based on a claim of Infringement. Sabre will pay any and all damages and costs (including reasonable attorney fees) incurred by

			
Sabre Inc. — Confidential	 	2	

Customer that are attributable to the Infringement, provided that Sabre is promptly informed in writing and furnished a copy of each communication, notice or other action identifying any third party patent or copyright or relating to the alleged Infringement and is given information and assistance necessary to defend or settle such claim. Customer’s failure to promptly notify Sabre of an Infringement claim shall not relieve Sabre of any liability under this Section except to the extent that the defense of such action is prejudiced thereby.
b) Should any portion of a System as delivered by Sabre hereunder become, or in Sabre’s opinion is likely to become the subject of a claim of Infringement, then Sabre may, at its option and expense: (i) procure for Customer the right to use the System free of any liability for Infringement; or (ii) replace or modify the applicable portion of the System with a non-Infringing substitute otherwise complying substantially with the description of the System in the Work Order. If (i) or (ii) are not commercially and/or economically feasible, Sabre may accept return of the System and reimburse Customer for the implementation and license fees (but not Access Fees) actually paid to Sabre by Customer depreciated on a three year straight line depreciation schedule.
c) If any action is brought against Sabre based on a claim that (i) software code or documentation written by Customer or any data or information added to a System by Customer or by any other person or entity at Customer’s request; (ii) use of a System in combination with, or in addition to, equipment or computer programs not licensed or developed by Sabre; (iii) any modification or alteration of a System by Customer or its third party agents or contractors; or (iv) any breach of this Agreement by Customer, constitutes an Infringement, then the indemnity obligation stated in this Section “Indemnification” with respect to Sabre shall reciprocally apply to Customer. If the parties cannot clearly determine whether the Infringement action is based on the actions of Sabre or of Customer, Sabre may exercise sole control over the defense and Customer will cooperate with Sabre in such defense. No compromise or settlement of any claim or proceeding may be affected or committed to by Sabre without Customer’s prior written consent, which consent shall not be unreasonably withheld or delayed.
d) The foregoing shall constitute Sabre’s sole and exclusive obligation, and Customer’s sole and exclusive remedy, for any Infringement by a System of any Intellectual Property Rights.
e) Except as expressly provided for in this Section, Customer shall defend, indemnify and hold harmless Sabre from any and all claims or causes of action arising out of Customer’s use of a System, including but not limited to Customer’s use of the System in combination with, or in addition to, any
equipment or computer programs not licensed or recommended by Sabre. Customer shall pay any and all damages and expenses (including reasonable attorney fees incurred by Sabre) in connection with such claims, regardless of the circumstances of the claim or damage.
6. Disclaimer of Warranty .
SABRE DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SYSTEM(S) AND SERVICES, INCLUDING ANY WARRANTIES OF, MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, TITLE, AND NONINFRINGEMENT. NO REPRESENTATION OR OTHER AFFIRMATION OF FACT SHALL BE DEEMED A WARRANTY FOR ANY PURPOSE OR GIVE RISE TO ANY LIABILITY OF SABRE WHATSOEVER. CUSTOMER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT.
7. Non-Disclosure .
a) Confidential Information. As between the parties, the Confidential Information of each party will remain its sole property. All Confidential Information shall be held and protected by the recipient in strict confidence, and shall be used by the recipient only as required to render performance or to exercise rights and remedies under this Agreement. Each party will protect the other party’s Confidential Information from unauthorized use, access or disclosure with the same measures that the recipient takes to protect its own proprietary information of like importance, but in no event less than reasonable care. No Confidential Information will be disclosed to any third party by the recipient party without the prior written consent of the disclosing party, except that each party may disclose this Agreement and the other party’s Confidential Information to its Affiliates and their respective directors, employees, attorneys, agents, auditors, insurers and subcontractors who require access to such information in connection with their employment or engagement and who are obligated to keep such information confidential in a manner no less restrictive than set forth in this Section. The party employing or engaging such persons is responsible and liable for their compliance with such confidentiality obligations.
b) Required Disclosures . Each party may disclose the Confidential Information of the other party in response to a request for disclosure by a court or another governmental authority, including a subpoena, court order, or audit-related request by a taxing authority, if that party; (i) promptly notifies the other party of the terms and the circumstances of that request, (ii) consults with the other party, and cooperates with the other party’s reasonable requests to resist or narrow that request, (iii) furnishes only information that, according to written advice of its

			
Sabre Inc. — Confidential	 	3	

legal counsel, that party is legally compelled to disclose, and (iv) uses reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded the information disclosed.
8. LIMITATION OF LIABILITY . WITH THE EXCEPTION OF LIABILITY FOR DEATH OR PERSONAL INJURY CAUSED BY THE NEGLIGENCE OF EITHER PARTY (FOR WHICH NO LIMIT SHALL APPLY), EACH PARTY WAIVES ALL LIABILITY OF THE OTHER PARTY, ITS LICENSORS AND SUPPLIERS FROM NEGLIGENCE, WHETHER CONTRIBUTORY, SOLE OR JOINT. EXCEPT FOR EITHER PARTY’S BREACH OF THE NON-DISCLOSURE OBLIGATIONS OR CUSTOMER’S BREACH OF THE USE RESTRICTIONS PLACED ON THE SYSTEM(S) UNDER THIS AGREEMENT AND THE APPLICABLE WORK ORDERS, NEITHER CUSTOMER, SABRE OR SABRE’S LICENSORS OR SUPPLIERS SHALL BE LIABLE FOR ANY LOST PROFITS, REVENUE OR SAVINGS OR FOR ANY INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGES, UNDER ANY CIRCUMSTANCES, EVEN IF SUCH PARTY HAD BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN, OF THE POSSIBILITY THEREOF. UNDER NO CIRCUMSTANCES SHALL SABRE’S AGGREGATE CUMULATIVE LIABILITY HEREUNDER, WHETHER IN CONTRACT, TORT, OR OTHERWISE, *****.
9. General Terms and Conditions.
a) As soon as reasonably possible following the Customer placing a System into Productive Use under any Work Order, Customer, individually or jointly with Sabre, will issue, with the prior written consent of the Costumer a press release that makes reference in the lead that the applicable technology was enabled by Sabre Airline Solutions and specifically identify the applicable System(s) and/or Services within the body of the release. This press release will be approved by both parties prior to issuance. Sabre may also identify Customer as one of its clients in general promotional literature and disclose to current and prospective clients that Sabre has provided Customer with the System(s) and/or Services covered under Work Orders hereunder. In addition, from time to time the parties may also issue a mutually agreed upon press releases in connection with this Agreement.
b) Choice of Law. This Agreement and any dispute arising hereunder shall be construed in accordance with the laws of the State of New York without regard to principles of conflict of laws. This Agreement will not be governed by the U.N. Convention on Contracts for the International Sale of Goods, the application of which is expressly excluded. The parties hereby irrevocably submit to the jurisdiction of the United States District Court
located in the borough of Manhattan, New York and each party waives any objection which it may have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in such Court.
Notwithstanding anything herein to the contrary, in the event of an actual or threatened breach of the use restrictions placed on the System(s) and Documentation or the Confidentiality provisions contained herein, the non-breaching party will be entitled, without waiving any other rights and remedies and without obligation to post a bond, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction.
c) Force Majeure . Either party shall be excused from performing hereunder (except for the payment of money) to the extent that it is prevented from performing as a result of any act or event which occurs and is beyond its reasonable control, including, without limitation, acts of God, war, action of a governmental entity, strikes, lockouts, insurrection, protest, security breaches or other hostilities, embargos, blockades, fuel or energy shortages, transportation delays or the inability to obtain necessary labor, materials or utilities from usual sources; provided that the party experiencing the force majeure provides the other with prompt written notice thereof and uses all reasonable efforts to remove or avoid such causes. If the inability to perform or deliver continues for longer than fifteen (15) days, either party may terminate this Agreement by providing written notice to the other party.
d) Savings Clause . If any provision of this Agreement is prohibited by law or held to be unenforceable, the remaining provisions hereof shall not be affected, and this Agreement shall continue in full force and effect as if such unenforceable provision had never constituted a part hereof, and the unenforceable provision shall be automatically amended to so as to best accomplish the objectives of such unenforceable provision within the limits of applicable law.
e) Relationship. Sabre is an independent contractor hereunder and no employee of either party shall be deemed to be an employee of the other for any purpose whatsoever. Nothing shall be construed to create a partnership, joint venture or agency relationship between the parties. Each party shall comply, at its own expense, with the provisions of all applicable state and municipal requirements and with all state and federal laws applicable to it as an employer and otherwise.
f) Assignment. Neither party may transfer or assign this Agreement to any other person or entity, whether by operation of law or otherwise, without the prior written consent of the other party except that (i) the parties may assign this Agreement to an Affiliate

			
Sabre Inc. — Confidential	 	4	

provided that the assigning party remain primarily liable for the assignee’s on-going performance hereunder, and (ii) either party may assign this Agreement to an third party who acquires all or substantially all of the assignors assets (whether by merger, change of control or otherwise) as long as the assignee expressly agrees to assume all rights and obligations hereunder of the assignor..
g) Notices. All notices required to be sent and service of process hereunder shall be in writing and deemed to have been given upon delivery (i) by commercial courier with delivery tracking capabilities, or (ii) if by certified mail return receipt requested, or (iii) by hand delivery to the addresses set forth below the signature line below, or to such other address or individual as the parties may specify from time to time by written notice to the other party. Each party agrees that any notice or service of process by any of the methods set forth above is adequate for all purposes and each party expressly waives any requirement of any other form of notice or service of process.
h) Export. If required, Sabre will use commercially reasonable efforts to obtain all approvals necessary to export the System to Customer’s location. In the event that such approvals are refused, either party may terminate this Agreement or a relevant Work Order, and neither party shall be liable to the other for any resulting loss or expense. Customer will comply fully with all applicable United States and foreign government export and import control laws and regulations in its use of a System and, in particular, Customer will not export or re-export any System without all required United States and foreign government licenses. Customer will defend, indemnify and hold harmless Sabre from and against any violation of such laws or regulations by Customer or any of its agents, officers, directors or employees. Without limiting the generally of the foregoing, Customer shall not, and shall cause its representatives not to, export, directly or indirectly, re-export, divert, or transfer the System(s),
Documentation or any direct product thereof to any destination, company or person restricted or prohibited by the United States Export Control.
j) Waiver. The waiver by either party of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach. Except for actions for nonpayment or breach of Sabre’s Intellectual Property Rights in the System(s) or Documentation, no action, regardless of form, arising out of this Agreement may be brought by either party more than one year after the cause of action has accrued.
k) Miscellaneous. All obligations hereunder are subject to the receipt of all necessary government approvals. This Agreement, together with each Work Order referencing this Agreement, constitutes the entire agreement between the parties related to the subject matter thereof, supersedes any prior or contemporaneous agreement between the parties relating to the performance of work under a Work Order, and shall not be changed except by written agreement signed by an officer of each party. If any terms in the Work Order conflict with the terms of this Agreement, the terms of the Work Order shall supersede the terms of this Agreement for that engagement. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by fax shall be sufficient to bind the parties to the terms and conditions of this Agreement.
l) Survival . All terms of this Agreement, which by their nature are intended to survive termination of this Agreement, including without limitation, sections entitled “Effects of Termination”, “Fees and Payment”, “Intellectual Property”, “Indemnification”, “Disclaimer of Warranty:, “Non-Disclosure”, “Limitation of Liability”, “Choice of Law”, “Claims Period”, “Savings Clause”, “Notices”, “Export:, “Miscellaneous”, and “Survival”, shall survive termination.

[SIGNATURE PAGE FOLLOWS]

Sabre Inc. — Confidential	 	5	

IN WITNESS WHEREOF, Customer and Sabre have executed this Agreement as of the Effective Date set forth above.

Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	 		 	Sabre Inc.	
	 	 	 		 		 	 	
By:	 	/s/ Enrique Javier Beltranena Mejicano	 		 	By:	 	/s/ Stephen M. Clampett	
Name:	 	Enrique Javier Beltranena Mejicano	 		 	Name:	 	Stephen M. Clampett	
Title:	 	Chief Executive Officer	 		 	Title:	 	President, Airline Products & Solutions	

By:	 	/s/ Alfonso Ascencio Triujeque	 		 		 	 	
Name:	 	Alfonso Ascencio Triujeque	 		 		 	 	
Title:	 	General Counsel	 		 		 		

Notice Address:	    	Notice Address:	
	  	Avenida Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca 01210, Mexico, D.F. Mexico
Attn: IT Director	    	3150 Sabre Blvd.
Southlake, TX 76092-2129
Attn: President, Airline Solutions	
			
	  	with a copy to:	    	with a copy to:	
	  	Avenida Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca 01210, Mexico, D.F. Mexico_
Attn: General Counsel / Director Jurídico	    	3150 Sabre Blvd. MD 8314
Southlake, TX 76092-2129
Attn: General Counsel 	

			
Sabre Inc. — Confidential	 	6	

E XHIBIT A
Definitions
a) “Access Fees” means a monthly fee paid by Customer to Sabre for access and use a System, the amount and timing of which shall be set forth in the respective Work Orders.
b) “Affiliate” means an entity controlled by, controlling, or under common control with another party. “Control” shall mean the ownership of more than fifty percent (50%) of the voting equity of an entity. An entity will be an “Affiliate” only for so long as such control exists.
c) “Confidential Information” means (i) the terms and conditions of this Agreement and Work Orders and the parties performance hereunder, (ii) information relating to a party’s business, customers, financial condition, or operations, (iii) Sabre’s information technology systems, Documentation and the Intellectual Property Rights in its System and Documentation and any derivative works thereof; and (iv) any other information, whether in a tangible medium or oral and marked or clearly identified by a party as confidential or proprietary at the time of disclosure; except such information that (a) is known to the recipient prior to its first receipt of such information from the disclosing party, provided that such information is not subject to another confidentiality agreement of which Customer and Sabre are a party, (b) is or becomes generally known to the public other than as a result of an unauthorized disclosure by any of the recipient’s directors, officers, employees, agents or advisors, or (c) is independently developed by the recipient without access to or use of the Confidential Information. The Confidential Information of a party also includes Confidential Information provided to that party by a third party licensor, supplier, vendor or the like.
d) “Documentation” means Sabre’s then current published guides, manuals and on-line help for System. Documentation may be provided in paper, computer disk, over the web or via online help in a System.
e) “Error” means a reproducible failure of a System (as delivered by Sabre to Customer) to perform substantially in accordance with the description of the System given in a Work Order.
e) “Infringement” means a claim of direct infringement of any duly issued United States patent or copyright resulting from the supply to Customer by Sabre, or the use by Customer, of any System as delivered hereunder by Sabre under this Agreement.
f) “Intellectual Property Rights” means all copyrights, trademarks, service marks, trade secrets, patents, patent applications, moral rights, contract rights, and other proprietary rights.
g) “ Material Adverse Effect ” means a material adverse effect on the assets, properties, business prospects, operations or financial condition of any party.
h) “ Material Breach ” means the occurrence or existence of any event(s), circumstance(s) or condition(s) that constitutes a failure of a party to perform its obligations under the Agreement or a Work Order that has a material adverse effect on the other party, unless the breaching party cures such failure within the timeline set out in the Agreement or the applicable Work Order.
i) “Patch” means urgent issue resolution(s) issued to the Customer as part of the Support Services.
j) “Professional Services” means consulting and technical services provided by Sabre in connection with a System, such as calibration, connectivity, customization, training and implementation support of a System, but does not include Support Services.
k) “Productive Use” means the ability to routinely use the functionality of a System in Customer’s business operations for productive purposes.
l) “Project Schedule” means the estimated delivery schedule for a System or Services.
m) “Support Services” means the services made available by Sabre for a System as described in Appendix H of a Work Order.
n) “Support Services Fee” means the fee to be paid to Sabre by Customer for the performance of the Support Services as specified in the Work Order.
o) “System” means the software system, including any Updates or new Versions provided by Sabre to Customer under this Agreement.
p) “Travel Expenses” means all actual documented out-of-pocket expenses incurred by Sabre in the performance of this Agreement, including but not limited to, air and ground transportation, lodging, meals and incidental expenses.
q) “Update” means a group of patches and/or minor functionality, covered by the Support Services.
r) “Version” means a major enhancement of a System that contains significant new or improved functionality and/or architecture changes that Sabre makes generally available to licensees of the System for an additional charge. The equipment to use a new Version may cascade into the need to revise interfaces, infrastructure and hardware/server platforms. Additional implementation and upgrade license fees may be required to upgrade to a new Version.

Sabre Inc. — Confidential	 	7	

s) “Work Order” means a supplement to this Agreement signed by the parties to describe Services, the addition of a System or to implement a change order. A Work Order shall not be effective unless signed by both Customer and Sabre and will then be incorporated by reference into this Agreement and made a part hereof.

Sabre Inc. — Confidential	 	8	

WORK ORDER NUMBER 1
TO
MASTER AGREEMENT
SABRESONIC RES, SABRESONIC CHECK-IN and SABRESONIC WEB
This Work Order is to the Master Agreement dated as of July 20, 2009, (the “ Agreement ”) by and between Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“ Customer ”) and Sabre Inc. (“ Sabre ”). This Work Order, together with the terms of the Agreement, shall constitute a single contract and shall be effective as of August 21, 2009 (the “ Work Order Effective Date ”).
 
1.	DEFINITIONS	
In addition to the terms defined in parenthesis herein, all capitalized terms will have the meanings indicated in the Agreement, or, if not defined in the Agreement or parenthetically, in Appendix J attached hereto.
 
2.	DESCRIPTION OF SYSTEM, SERVICES AND OTHER DELIVERABLES	
 
2.1	Systems	
Sabre will provide Customer with a license to access and use the SabreSonic Res, SabreSonic Check-In and SabreSonic Web solutions, including all modules thereto, (each a “System” and collectively the “Systems”) as described in the attached Appendix A.
 
2.2	Professional Services	
Sabre will provide Customer with the Professional Services described in the attached Appendix B, as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
2.3	Customer Responsibilities	
In connection with the Systems and Professional Services to be provided by Sabre hereunder, Customer shall be responsible for the activities described in Appendix C, as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E. Customer will perform the Customer Responsibilities in accordance with the timeline set out the Project Schedule.
 
2.4	Documentation	
Sabre will provide Customer with System(s) Documentation, in English only, as described in Appendix D.
 
2.5	Project Schedule	
Sabre will:
 
 	(a)	perform all Professional Services,	
 
 	(b)	provide all Deliverables to Customer; and	
 
 	(c)	make the Systems available for use by Customer and its Affiliates as set forth in this Work Order,	
all in accordance with the Project Schedule set forth in the attached Appendix E, as the Project Schedule may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
2.6	System Requirements	
The hardware and infrastructure described in the attached Appendix F (the “System Requirements”) is necessary for the proper functioning of the Systems. Customer will be responsible for the System Requirements as described in Appendix F as the System Requirements may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E. Sabre hereby covenants and agrees with Customer that on the Work Order Commencement Date, the Systems will be compatible with the System Requirements.

2.7	Maintenance Services	
For the Systems delivered under this Work Order and during both the Work Order Term, Sabre shall provide Customer with the Maintenance Services described in Appendix G. The Maintenance Services will commence on the Work Order Commencement Date.
 
2.8	System Performance	
In connection with the hosting of the Systems and during both the Work Order Term, Sabre will comply with the Service Level Agreement set forth in the attached Appendix H.
 
2.9	Hosting of Systems and Customer Data	
Sabre shall establish the Systems, as modified by Sabre through the Professional Services, and make them available for use by Customer and its Affiliates via the Internet and/or a direct telecommunications connection. In consideration of the fees payable by Customer to Sabre under this Work Order, Sabre will establish and maintain all necessary physical lines from the Systems to the Internet via an Internet services provider and/or through a dedicated direct telecommunication connection provided by Customer. The Systems shall reside on a server or cluster of servers which are physically located at Sabre’s or its designee’s place of business and may be used for the applications of other Sabre customers or third parties. At its expense, Customer shall be responsible for obtaining and installing the equipment, the network from the Customer’s private network to the Sabre Data Center, an Internet and/or direct telecommunications connection, and the software applications identified in Appendix C or Appendix F (as such Appendix may be revised in the PDD and PPP documents delivered by Sabre to Customer) that are required for Customer to access and utilize the Systems. The minimum requirements will be finally determined and agreed upon in the PDD and PPP. Sabre will otherwise be responsible for obtaining, installing and maintaining all of the equipment, hardware, software and other materials that are required to make the Systems available for use by Customer and its Affiliates from the Sabre Data Center. Sabre is not responsible for the operation of any Internet or other communication services. In addition to the foregoing, Sabre will, as part of the hosting services collect, store and process the Customer Data (as defined below in Section 4). For clarity, the point of demarcation for each party’s responsibilities shall be as follows: Sabre shall be responsible for the operation of all equipment and network within the Sabre Data Center and Customer shall be responsible for the operation of any equipment, network and communication services outside the Sabre Data Center.
 
2.10	Customer Specific Deliverables	
Sabre will provide Customer with the Customer Specific Deliverables described in the attached Appendix I (the “Deliverables”), as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
3.	LICENSE/USAGE RIGHTS GRANTED	
 
3.1	Use Rights	
The following usage rights shall be provided to Customer for the Systems covered under this Work Order.
 
 	(a)	With respect to the Systems other than SabreSonic Web, effective upon Commencement Date, Sabre hereby grants to Customer and its Affiliates a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to (i) access and use the Systems via the Internet and/or direct telecommunication line solely for the Customer’s and its Affiliate’s internal airline operations and Ancillary Services, and (ii) to use the associated Documentation in support of the Customer and its Affiliate’s authorized use of the Systems. With respect to the Kiosk Check-In System and any other portion of the Systems that provide Customer’s passengers with self service options, the license granted hereunder shall include the ability of the Customer and its Affiliate’s permitting their passengers to access and use the relevant portions of the Systems for the purpose of exercising the passenger self service options that are available, including, without limitation, for the purpose of checking in on the Customer and its Affiliate’s flights and Ancillary Services.	

Confidential	  	Page 2	  		

 	(b)	With respect to SabreSonic Web, effective upon Commencement Date for the System, Sabre hereby grants to the Customer and its Affiliates a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to (i) use the Site over the World Wide Web to make Customer’s Content available for access and use by third parties, and (ii) to use the associated Documentation in support of the Customer’s and its Affiliate’s authorized use of the Site and the System.	
 
 	(c)	The Documentation for the Systems covered under this Work Order may be provided on paper, computer disk, over the web or via on-line help.	
 
 	(d)	Customer shall be primarily liable for the of its Affiliates compliance with the terms and conditions of this Work Order.	
 
3.2	Express Restrictions on Use	
In addition to the restrictions contained in Section 4(b) of the Agreement, and except as expressly permitted in the Agreement or this Work Order, Customer agrees not to (a) copy, re-sell, reproduce, distribute, republish, download, post, frame or transmit in any form or by any means or allow another to use or access the Systems; (b) knowingly transmit any data to the Systems that contains software viruses or other harmful or deleterious computer code, files or programs; or (c) knowingly interfere with or disrupt services or networks connected to the Systems, or knowingly violate the regulations, policies or procedures of such networks.
 
3.3	Customer Content	
With respect to the Content provided by Customer in connection the Site supported by Sabre under the SabreSonic Web System, Customer grants to Sabre a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to use, reproduce, electronically distribute, and publicly display the Content as required by this Work Order. Customer represents and warrants that it has all rights, title and interest in and to the Content as necessary for its use as contemplated by this Work Order.
 
4.	CUSTOMER DATA / CUSTOMER DATABASE	
Customer will be solely responsible for the accuracy of the “Customer Data” and the timely inputting of such Customer Data into the Systems and any changes thereto. The “Customer Database” shall be and remain the property of Customer. Only equipment specified by Customer may be used to access the Customer Database. Subject always to Section 2.9 above, Sabre and its subcontractors’ data processing personnel shall have access to the Customer Database as needed to ensure the integrity and performance of the System. The location of the Customer Database may or may not be physically separate from the databases of other Customers of Sabre, but will nonetheless remain secure against improper access. Sabre shall maintain, or cause to be maintained, the Customer Database and shall make backup archival copies of the Customer Database at least once every twelve (12) hours so that if the Customer Database is for any reason erased or destroyed, Sabre shall begin to restore from the latest archival copy. If the Customer Database is erased or destroyed for causes within Sabre’s control, Sabre will restore the archival copy at no additional charge. Otherwise, Customer will pay Sabre for all labor incurred in restoring the archival copy at Sabre’s then current standard labor rate.
Upon expiration or termination of this Work Order, and upon Customer’s request Sabre will return to Customer, in Sabre’s then existing machine-readable format and media, all Customer Data in Sabre’s possession. Customer will pay Sabre on a time and materials basis for the extraction and return of the Customer Data at Sabre’s then-current standard labor rates. In addition, upon Customer’s request during the Work Order Term, Sabre will provide Customer a copy, in Sabre’s then existing machine-readable format and media, all Customer Data in Sabre’s possession. Customer will pay Sabre on a time and materials basis for the copy of the Customer Data at Sabre’s then-current standard labor rates.
Sabre will not use the Customer Data for any purpose other than providing the Services. Subject to applicable laws, Sabre may use the Customer Data for the purpose of determining, using and distributing aggregate statistical and marketing information from which the identity of Customer or its customers cannot be determined through the use of reasonable effort.
Sabre personnel having access to the Customer Data will be informed of their duties to maintain its confidentiality and to use it only for purposes permitted hereunder. Customer may establish backup security for the Customer Data and retain backup data files if it so chooses. With the written permission of Customer, Sabre may have access to such backup data files as is reasonably required by Sabre.

Confidential	  	Page 3	  		

Sabre will restrict access to data contained within the System by functional identification (“Duty Codes”) to facilitate data security. Customer agrees that the Duty Codes used by Customer, unless otherwise agreed to by Sabre, shall be identical to those used by Sabre.
The Systems shall be resident on equipment at the Sabre Data Center and Customer will not receive a copy thereof (Customer’s rights being limited to the access and use of the System resident at the Sabre Data Center). Customer shall receive only one copy of any non-hosted software and one copy of the Documentation therefore. Customer may make a reasonable number of copies of the non-hosted software and Documentation solely for the permitted use and for back-up purposes. Customer shall reproduce and include on each copy and on each partial copy any copyright notice and proprietary rights legend contained in the non-hosted software and Documentation, as such notice and legend appear in or on the original.
 
5.	TERM AND TERMINATION	
The term of this Work Order shall commence as of the Work Order Effective Date and continue for a period of five (5) years from the Commencement Date. For purposes of this Work Order, the “Commencement Date” shall be the date that the Systems are placed into productive use by Customer. If Customer elects not to implement functionality as permitted under Section 6.9 below, such functionality shall not be deemed a part of the System for purposes of establishing the Commencement Date.
Notwithstanding anything herein to the contrary, *****:
 
 	(a)	*****: and	
 
 	(b)	*****	
*****
 
6.	FEES AND CHARGES	
Customer shall pay Sabre the following fees and charges for Sabre’s provision of access and use to the Systems and performance of the Services described herein. For the Systems defined in Appendix A of this Work Order No. 1 and in Appendix A of Work Order No. 2, the RPB Fee will *****
 
6.1	Professional Service Fees	
Customer will pay Sabre a fee of ***** for the Professional Services outlined in Appendix B of Work No. 1 and Work Order No. 2 to be executed contemporaneously with Work Order No. 1.
Sabre and Customer agree ***** payable as follows:
 
 	(a)	*****: *****	
 
 	(i)	*****	
 
 	(ii)	*****	
 
 	(iii)	*****	
 
 	(iv)	*****; and	
 
 	(v)	*****	
 
 	(b)	*****: *****	
 
 	(i)	*****	
 
 	(ii)	*****	

Confidential	  	Page 4	  		

6.2	RPB and System Usage Fees	
For access and use of the Systems described in Appendix A of this Work Order, Customer will pay Sabre a monthly fee equal to the amount set forth in the chart below per RPB for the applicable Contract Year (the “RPB Fee”) times the actual number of Customer’s RPB (as defined below) for such month (collectively, the “System Usage Fee”). The System Usage Fee paid by Customer shall be subject to the Minimum Commitment as set forth in Section 6.4 below. Additional fees for some functionality are listed separately below.

Contract Year(s)	  	RPB Fee	 	
*****	  	 	*****	  	
*****	  	 	*****	  	
 
6.3	Acquisition Clause	
*****
 
6.4	Minimum Commitment	
The System Usage Fee set forth in Section 6.2 above are subject to the Customer having a minimum number of committed RPBs per Contract Year (the “Minimum Commitment”). In any Contract Year, Sabre will invoice Customer monthly for the greater of either 1) Customer’s actual RPBs for the prior month multiplied by the PB Fee; or, 2) one-twelfth of the Minimum Commitment for the applicable Contract Year, as outlined in the table below:

Contract Year	  	Minimum Commitment
of Revenue Passengers
Boarded (RPB)	 	
1	  	 	*****	  	
2	  	 	*****	  	
3	  	 	*****	  	
4	  	 	*****	  	
5	  	 	*****	  	
If at the end of any Contract Year, Customer has failed to meet the Minimum Commitment for such year, the amount payable to Sabre by the Customer will be reconciled at the conclusion of the relevant Contract Year with the Customer making an additional payment equal to the Minimum Commitment level minus the actual RPBs times the RPB Fee for the applicable “Contract Year”.
 
6.5	Renegotiation Clause	
During the period commencing ***** the following may apply:
 
 	(a)	*****	
 
 	(b)	*****	
 
 	(c)	*****	
 
6.6	Revenue Passenger Boarded Reporting, Invoicing and Adjustment	
By the 15th day of each month from and after the Commencement Date, Customer will provide Sabre with the actual number of RPBs carried during the preceding month (on all Customer and its Affiliates and on all Customer Codeshare Carriers). If Customer fails to timely report its actual RPBs, the most recent number provided by Customer will be used for the monthly invoices.

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6.7	Increases in Messages	
The System Usage Fees set forth in Section 6.2 are based on *****. Following a period of the *****, Sabre and Customer will measure *****
In the event *****
In the event *****, System Usage Fee for that month will be adjusted as follows:

Average number of Messages per RPB per Month	  	Additional
Fee Per
Month
per PB	 	
*****	  	 	*****	  	
*****	  	 	*****	  	
During the term of the Work Order, *****
 
6.8	Travel and Out-of-Pocket Expenses	
Customer shall reimburse Sabre for all reasonable, pre-approved Travel Expenses in accordance with Section 3 (b) of the Agreement and Appendix K to this Work Order.
 
6.9	Timing of Implementation	
Customer may request in writing that Sabre not implement all the functionality identified in Appendix A for the Systems during the assessment and project planning phase described in Appendix B. Should Customer later choose to implement any portion of the delayed functionality at a later date, Customer will notify Sabre and the parties will agree in writing upon the timing of such implementation. Customer will pay Sabre for any incremental costs incurred by Sabre for the implementation, including but not limited to associated incremental travel, labor, training, etc.
 
6.10	Out of Cycle Processing and Additional Implementations	
Customer will pay Sabre then current rates for any requested out of cycle off-line processing or for any requested new programs and additional data that require off-line processing. Customer shall also pay Sabre for installation and implementation services in connection with the hosted Systems at new Customer Sites installed after the Commencement Date at the labor rate set forth in Section 6.11 below.
 
6.11	Change Request Labor Rate	
The labor rate for any Change Request under this Work Order will be ***** per hour for system changes. The labor rate for any Change Request under this Work Order for business process or management consulting professional services will be ***** per hour.
 
7.	ACCEPTANCE TESTING	
Acceptance Testing for the Systems, as modified by Sabre through the Professional Services, will be conducted toward the end of the implementation process as agreed in the project schedule prior to final cutover for each System The purpose of such testing shall be to confirm the Systems materially conform to the description of the System set out in the attached Appendix A. The detailed acceptance testing procedure (i.e., test scripts, identification of testers and test sites, etc.) will be established jointly by the parties and set out in writing prior to the commencement of the acceptance testing. The specific test scripts and processes that will be used by the parties during the Acceptance Testing for the Systems will be mutually agreed upon by the parties and documented in the Program Process and Procedures Document. Sabre will provide Customer with its standard test scripts and Customer will revise and update as it deems reasonably necessary. So long as the test scripts are designed to confirm that Sabre’s delivery of the functionality meets the descriptions set forth in this Work Order, then Sabre will accept the test scripts proposed by Customer. Acceptance testing for the Project Definition Document, the Program Process and Procedures Document, the deliverables provided in connection with the Business Transformation Services, will be conducted by Customer within five (5) to ten (10) business days from

Confidential	  	Page 6	  		

Sabre’s delivery of such deliverables to Customer (“Deliverable Testing Period”). The Customer will identify to Sabre any material inadequacies or deficiencies in these deliverables on or before the expiration of the Deliverable Testing Period. Sabre will thereafter promptly remediate such inadequacies and re-submit the relevant deliverable to Customer for review and approval. If Customer fails to identify any material inadequacies with the relevant deliverables within five (5) to ten (10) business days from receipt of any resubmission, the deliverables shall be deemed to have been accepted by Customer.
 
8.	SPECIAL TERMS AND CONDITIONS	
 
8.1	PCI Compliance	
Sabre acknowledges its role as a PCI Service Provider and will, at its own expense, pursue and use commercially reasonable efforts to obtain an annual PCI DSS compliance renewal consistent with the standards defined by the Payment Card Industry Security Standards Council and the data protection programs of the respective payment card companies. Updates on the status of annual renewal will be available to Customer on request.
 
8.2	SAS 70 Audits	
Promptly following the execution of this Work Order, Sabre will provide Customer with its latest SAS 70 Type II audit report for the processing center at which the System is hosted. Thereafter upon Customer’s request, which shall not be requested more frequently than once per year, Sabre will provide Customer with its SAS 70 Type II or other industry recognized assessments for the data processing center at which the System is hosted.
 
8.3	Development Hours	
Sabre will provide Customer with up to ***** development labor hours *****. These development hours are *****.
 
8.4	SabreSonic Web	
*****
 
8.5	Sabre Roadmap Enhancements	
*****
 
9.	CONFLICTS	
If any term in this Work Order conflicts with a term of the Agreement, the terms of the Work Order shall supersede the terms of the Agreement for this Work Order only.
 
10.	FULL FORCE AND EFFECT	
Except as otherwise expressly modified herein, all other terms and conditions of the Agreement shall remain in full force and effect.

Confidential	  	Page 7	  		

IN WITNESS WHEREOF, Customer and Sabre have executed this Work Order as of the Work Order Effective date.

CONCESIONARIA VUELA COMPAÑIA	 		 		
DE AVIACION, S.A DE C.V	 		 	SABRE INC.	
					
By:	 	/s/ Alfonso Ascencio Triujeque	 		 	By:	 	/s/ Stephen M. Clampett	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Stephen M. Clampett	
Title:	 	General Counsel	 		 	Title:	 	President, Airline Products & Solutions	
					
By:	 	/s/ Fernando Suárez	 		 		 		
Name:	 	Fernando Suárez	 		 		 		
Title:	 	Chief Financial Officer	 		 		 		

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APPENDIX A
DESCRIPTION OF SYSTEMS
Summary Functionality for Customer
 
1.	SabreSonic® Res	
 
1.1	Reservations, Pricing and Reporting	
 
1.2	Pricing, Fare and Rules Display	
 
1.3	Codeshare	
 
 	(a)	Unlimited codeshare flights are included in this Work Order for up to three (3) codeshare partner airlines to be implemented either at cutover or during the term of the Work Order.	
 
 	(b)	Additional codeshare partners beyond the three (3) listed above are not included in the fees in this Work Order.	
 
1.4	Command Center™ Interface	
 
1.5	Credit Suite	
 
1.6	Customer Relation Management Suite	
 
 	(a)	CDD (both PNR and VCR)	
 
 	(b)	Customer Insight	
 
 	(c)	Customer Value Calculator	
 
1.7	Interact™ Interface	
 
1.8	Net Access™	
 
1.9	Qik® Schedule Interface	
 
1.10	SabreSonic® MyFares	
 
1.11	Business Intelligence Analytic Module	
 
1.12	SabreSonic® Inventory (base inventory option)	
 
2.	SabreSonic® Ticket	
 
2.1	Basic Ticketing	
 
2.2	Electronic Ticketing	
 
2.3	Interline Electronic Ticketing Hub with three (3) carriers	
 
2.4	Automated Exchange and Refunds	
 
3.	SabreSonic® Check-In	
 
3.1	Sabre® Check-In™ passenger check-in system	

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3.2	EDIFACT Thru Check-In	
 
 	(a)	Three (3) EDIFACT Thru Check-In links are included in the Work Order.	
 
 	(b)	Additional EDIFACT links beyond the three (3) listed above are not included in the fees in this Work Order.	
 
 	(c)	Customer and Sabre will agree to the specific links during the project planning phase of the implementation.	
 
4.	SabreSonic® Web	
 
 	(a)	Three (3) additional storefronts	
 
5.	Kiosk Check-in	
 
6.	Mobile Check-in	
 
7.	Roving Agent Check-in	
 
8.	Web Check-in	
 
9.	Sabre® Agency Activity	
 
10.	Sabre® Corporate Loyalty	
 
11.	Sabre® Virtually There®	
 
12.	Sabre® Enterprise Mobile Services (EMS)	
 
 	(a)	Text and email messaging.	
 
13.	Revenue Integrity Manager	
 
 	(a)	Existing processes	
 
 	(b)	Customer specific processes	
 
 	(c)	Real-time Revenue Integrity	
 
14.	Travel Bank	
 
15.	SabreSonic® Merchandising Services	
 
15.1	Branded Fares	
 
15.2	Ancillary Sales	
 
15.3	Pay for Preferred Seats	
 
16.	Sabre® Web Services	
 
17.	SabreSonic® Sell	
 
18.	Host Frequent Traveler	

Confidential	  	Page 10	  		

1.	SABRESONIC® RES:	
 
1.1	Reservations, Pricing and Reporting	
 
 	(a)	The ARINC Lost and Stolen Ticket function allows utilization of the SabreSonic Passenger Solution mirrored ARINC industry automated accountable passenger traffic documents database in order to protect the user against lost and stolen documents. The carrier must have a signed contract with ARINC for this service.	
 
 	(b)	The Automated Reference System (Focus) is an on-line help facility. It contains 3 levels of information referred to as the Main Function List, Specific Functions and Detailed Information. The Specific Functions level contains detailed formats and the Detailed Information level contains more specific format information. Access to this information is obtained through the use of qualifiers, which are words used to describe the information being requested. The user may have one unique on-line reference manual for information specific to their operation.	
 
 	(c)	The FMH/REM (Focus Multihost / Restricted Entry Manual) online reference manuals contain over 100 topics ranging from SabreSonic formats to Help Desk numbers.	
 
 	(d)	The Calculator function performs arithmetic calculations (addition, subtraction, multiplication and division); displays monthly calendars and calculates past and future dates (useful in calculating advance purchase dates); converts Celsius and Fahrenheit, metric and decimal; time zone differences can also be calculated.	
 
 	(e)	The Car Availability function represents 50 car rental companies in over 100 countries. Sabre CARS PLUS is an automated, dynamic car availability and rate system that displays both corporate and local vendor information. This system also provides policy and rule information. The booking is created from the shoppers and rate quote entries. The Rental Car Availability System (RCAS) is a manual sell system providing the basic functions of general availability by city and arrival date and the car sell entry directly from car availability.	
 
 	(f)	The Catering Message Table (PMMT) contains booked passenger counts by flight. Utilizing the Time Initiated Function Table (TIFT), these counts may be automatically transmitted to a catering facility.	
 
 	(g)	The Clock function provides the capability for the user to select time displays in either a 12-hour or 24-hour clock. An entry to display local time for the desired city is also provided.	
 
 	(h)	The Check Authorization (Dishonored Check Information and Exchange Service <DCIES>) function provides the verification of bank checking account numbers and driver’s license numbers used to complete a check form of payment ticketing transaction. This information is input by the user and is sent across a DCIES link for verification. This function is valid for checks drawn on U.S. or Canadian banks. ARINC monthly charges billed.	
 
 	(i)	The E-mail Address in the Passenger Name Record (PNR) function allows for the storing of e-mail addresses in the PNR and the ability to send passenger notification updates using Sabre ® Virtually There™ or Sabre ® InformSM. The e-mail address can be inserted with or without using the name select entry. Users can display the e-mail address by name selection and attach multiple names to a single e-mail address. This function is applicable to all PNR types, except Block Space Group (BSG) bookings.	
 
 	(j)	The Encode/Decode function provides the ability to decipher system codes for airports, cities, airlines, travel agencies, equipment, cars, hotels and tour associates. The Encode/Decode entries provide additional information such as ticketing and baggage agreements and Prepaid Ticket Advice (PTA) acceptance when decoding airlines, as well as, buffer zone information used in tax calculations when decoding cities/airports. Encode/Decode also provides the ability to encode the aircraft equipment type by the manufacturer name or decode the aircraft type to obtain a description and number of seats.	
 
 	(k)	The Flight Information (FLIFO) function tracks the movement of host aircraft and provides the ability to record flight information about specific flight/date within the current inventory period of 331 days. FLIFO keeps track of the movement of host aircraft. For carriers utilizing the Dispatcher Environmental Control System (DECS), the OUT, OFF, IN, estimated time of arrival (ETA), estimated time of departure (ETD), etc. times are relayed to FLIFO.	

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 	(l)	The Frequent Traveler in the Passenger Name Record (PNR) function allows a SabreSonic hosted client or partner airline’s frequent traveler number to be entered in the PNR. No validation is performed on the frequent traveler number entered.	
 
 	(m)	The General Sales Agent (GSA) function provides travel agency access within a partition. Travel agents can access only those Passenger Name Records (PNRs) in the designated city code of the partition or PNRs released to that location by the SabreSonic hosted client. This functionality is available solely for GSAs as defined by IATA. GSAs implemented at cutover included.	
 
 	(n)	The Hotel Availability function is an automated system which offers property and rate information from more than 60,000 hotel properties. This product provides the ability to search, view and reserve participating hotels.	
 
 	(o)	The Itinerary Print function provides the customer with a printed detail of all Passenger Name Record (PNR) itinerary data in an easy to read format. The printed itinerary contains the user’s home station, date the itinerary was printed, PNR locator, passenger name(s), segment information, pre-reserved seats, multiple meal types, special meals and itinerary remarks. Additional options are available with the Itinerary Print function, including foreign language (French or Spanish) and requesting specific name numbers. Itinerary Print will also include Mexican regulations’ requirement for Customer’ VAT registry number and information.	
 
 	(p)	The List Displays function provides various passenger information in a list format, which includes number in party, last name/first name, class of service and record locator.	
 
 	(q)	The Name List (LD, etc) function provides passenger lists based on the command for complete flight list, pre-reserved seats, top tier frequent traveler members, infants, waitlisted passengers, positive space passengers, last booked passengers, etc.	
 
 	(r)	The Passenger Boarding Information (PBI) function displays the number of passengers booked on each flight, as well as, each fare class, by boarding city and destination. The PBI list also provides a breakdown of inbound connecting passengers and the number of passengers booked on connecting flights for downline stations. The PBI list indicates employee positive space bookings and non-revenue space available (NRSA) information.	
 
 	(s)	The Large Party Process HOST (Group Host) function provides the ability to set parameters for a host booked Passenger Name Record (PNR) to a maximum number in party of 99. The large party parameter is determined by the carrier. PNRs within the set parameters are automatically queue placed to the booking city for manual handling. Large Party PNRs received within 2 days of departure are queue placed to the board point city for manual handling.	
 
 	(t)	Group Need Processing provides carriers a means to control large party bookings containing host inventory. This allows host agents to sell segments with a NN status code, but automatically change the segments to Group Need status if it is a group booking as identified in the large party definition within the carrier partition. The Group Need status will not decrement from inventory. PNRs with Group Need segment status will be automatically queue placed for an agent to confirm or deny the request.	
 
 	(u)	The Minimum Connect Time function provides the display of minimum connection times for each airport and airline. Official minimum connect times are supplied by OAG Inc., and customer supplied sub-minimum connecting times are used to automatically build connections	
 
 	(v)	The Passenger Name Record (PNR) is a stored record that contains all the details concerning the creation and modification of the reservations agreement between the SabreSonic hosted client and the passenger. A PNR is created, stored and maintained for every passenger for whom airspace and an auxiliary service has been requested, reserved or waitlisted. A PNR can be created by the booking agent or via a teletype message. The PNR contains both mandatory and optional fields. The mandatory fields include the passenger name, itinerary, ticketing or time limit, phone number and received from. The optional fields include Special Service Request (SSR), Other Service Information (OSI), e-mail	

Confidential	  	Page 12	  		

 	address, frequent traveler numbers, Pre-reserved seats (PRS), remarks and address. All PNRs include a signature line containing the time/date/year, agent sign, creation location, record locator and indicators to notify an agent if history or pre-reserved seats exist. On the day of departure, a PNR itinerary is updated with flight information (FLIFO) to show if a flight is on time, delayed or cancelled. A PNR can be displayed by flight number, date and name or by the unique 6 alpha record locator assigned at end transaction. There are also various display capabilities for other airline segments booked in the host partition, by waitlisted flights or by using a prepaid ticket advice (PTA) number if a prepaid ticket exists in the PNR.	
 
 	(w)	The Block Space Group Bookings (BSG) function provides the ability for wholesalers or retail subscribers to block air space without submitting specific passenger names. The BSG Passenger Name Record (PNR) serves as an inventory record. Requests for specific passenger air space are satisfied by the BSG without decrementing general inventory levels. The BSG is the controlling record and the specific passenger PNRs associated to it are called Associated PNRs.	
 
 	(x)	The Change/Delete/Insert Passenger Data Fields function provides the ability to change or remove passenger data fields from the Passenger Name Record (PNR).	
 
 	(y)	The Corporate Passenger Name Record (PNR) function allows a PNR to contain an itinerary with or without passenger names and seats by utilizing a group name. The individual names may be added one at a time at a later date, but must be present for ticketing. Corporate PNRs can also be displayed by specific flight, date and board city using the Corporate Passenger Name List.	
 
 	(z)	The Clone function provides the automated cloning of an entire Passenger Name Record (PNR) or only certain parts of a PNR, such as itinerary, through a single transaction and each of the PNRs can be cross referenced to each other if desired.	
 
 	(aa)	The Duplicate Segment Check function validates the airline itinerary in a Passenger Name Record (PNR) at end transaction to search for segments where the airline code, date of departure, board point and off point are equal. If duplicate segments are found, a warning response is displayed. The warning response can be overridden with a second end transaction entry.	
 
 	(bb)	The Infant Passenger Name Record (PNR) function provides an additional name field used to identify an infant traveling in the PNR. An infant is defined as being at least 7 days old, but less than 2 years old.	
 
 	(cc)	The Passenger Name Record (PNR) History function contains all actions taken on the PNR, as well as, the signature line identifying the location, date and agent sign for each action. At end transaction, SabreSonic automatically updates PNR history with each change made.	
 
 	(dd)	The Divide Passenger Name Record (PNR) function provides the ability to divide multiple name PNRs in a single entry. A line of remarks containing the record locator is automatically added to both PNRs for cross-referencing purposes.	
 
 	(ee)	The Reduce Passenger Name Record (PNR) function provides the ability to reduce the number in party before or after ending the transaction. This function also requires that the name field be reduced to match the number in party prior to ending transaction.	
 
 	(ff)	The Increase Passenger Name Record (PNR) function provides the ability to increase the number in party prior to end transaction on a newly created PNR. This entry cannot be applied to a retrieved PNR.	
 
 	(gg)	The Past Date Information (PDI) CD-ROM Basic product contains Passenger Name Record (PNR) data that has been purged from the system and itinerary segments that have been flown. The Purged PNR CD-ROM file captures the entire PNR 48 hours after the final itinerary segment has been flown and the PNR is purged from SabreSonic. The Flown PNR CD-ROM file captures certain fields of the PNR each time an itinerary segment is flown. Search capabilities can be performed by carrier code, date, flight number, last name/first name or record locator.	
 
 	(hh)	A Prepaid Ticket Advice (PTA) generally involves the payment for a ticket by someone other than the passenger at a location other than the passenger’s point of origin. The authority to issue a ticket for the specified passenger is forwarded to the appropriate ticketing location at the passenger’s point of origin.	

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The prepaid function provides for PTA information to be entered, directly into a Passenger Name Record (PNR). Because a prepaid ticket may be purchased before the passenger has confirmed specific flights, the PTA function allows for the creation of a PNR with an “OPEN” segment itinerary. A PTA PNR can be retrieved by the PTA number if desired.
 
 	(ii)	The Automated Teletype Prepaid Ticket (PTA) function allows a prepaid ticket message, using AIRIMP standards, to be sent to the ticketing carrier in order to arrange a prepaid ticket as a service to the passenger. SabreSonic automatically sends an acknowledgment (ACK) message to the sender of the prepaid ticket. The PTA information is automatically updated in the Passenger Name Record (PNR).	
 
 	(jj)	The Printer function provides automated printing for ticketing, boarding passes, hard copy, print screen and miscellaneous non-transport documents.	
 
 	(kk)	The Queues function is designed to provide the user with automated and manual capabilities to place a Passenger Name (PNR), message or teletype message to a predetermined location (queue) in the system to be retrieved later for further action. Queue locations are identified by city codes and a numeric or alpha character. Each city code can contain up to 511 numeric queues and 24 alpha queues.	
 
 	(ll)	The Atlas function can be used to offer customers a choice of airports to reach their intended destination, which could result in lower fares or better flight schedules. The Atlas function can determine the 10 closest airports to a specified city, airport or military base and will provide a proximity display of these airports. This function also provides the mileage between cities.	
 
 	(mm)	The Special Meals (ML*) Table validates special meal requests and automatically creates a name associated Special Service Request (SSR) item in the Passenger Name Record (PNR). The SSR item provides the airport, catering and flight personnel with a passenger’s special meal information.	
 
 	(nn)	The Special Travelers Account Record System (STARS) is a reference source for storing frequently used information, procedures, training data, station or city information on-line. Each STAR allows up to 200 lines of information. STARS allow the automatic transfer of lines directly into the Passenger Name Record (PNR). Each STAR also has a signature line that contains the create city/date/agent sign, purge date, date viewed and a count for the number of times the STAR has been retrieved.	
 
 	(oo)	The Special Service Request (SSR) function is used by the Teletype function to automatically process inbound and outbound messages containing a SSR code. SSR processing allows each carrier to select the type of action to be taken by SabreSonic based on the specific SSR code. The SSR table is created and maintained by SabreSonic, utilizing IATA SSR codes.	
 
 	(pp)	The Terminal Monitor function provides the user with the capability of monitoring the input and output of a terminal or multiple terminals by another terminal, multiple terminals, or by a hard-copy printer within their partition. This monitoring functionality allows a user’s entries and responses to be viewed and helps to determine performance problems or detect misuse. The Employee Profile Record (EPR) keyword MNTSET is required to perform this function.	
 
 	(qq)	The Minimum Connection Alert function sends an error message to the user at End Transaction when any segment in the PNR does not meet the published minimum connection times. The error response contains the affected segment number and city, as well as, the minimum connection time for that city. This alert message can be modified by performing the End Transaction entry again.	
 
 	(rr)	The Agent Productivity Reporting Information System (APRIS) is an on-line report that integrates airline reservation booking activity with call data and city pair revenue information to produce an analysis of reservations agent productivity. The user inputs the call data and revenue information using the APRIS mask online in the SabreSonic system. Reservation booking data is captured daily from off-line SabreSonic sources.	
 
 	(ss)	The Ticket Control Number (TCN) File contains information from the auditor’s coupon of all tickets, including exchanges and voids. The TCN file contains all of the information required by ATPCo. All ticketing information is collected during nightly file maintenance. A TCN record consists of one Sabre Generated Ticket Number (SGTN) transaction.	

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 	(tt)	The Non-Transport Data File (NTP) contains all miscellaneous sales (non-transport) transactions. This includes all transactions entered into the Miscellaneous (MISC) Mask, (i.e., kennels, excess baggage, unaccompanied minor, unpaid taxes, etc.), the Refund (RFND) Mask, the Prepaid Ticket Advice (PTA) Mask, all voided transportation transactions, and all taxes that were collected as a combined sum (XT). A NTP record equals each line of data in the file. There are nine data types: Miscellaneous Sales, Prepaid Ticket Advice, Refunds, Interline Passes, Vouchers, Non Transport MSR Tax Records, Voided Transactions, Passenger Facilities Charge and Combined Taxes.	
 
 	(uu)	The TMR 1 - Advance Booking Report contains the booking counts of host airline flights, categorized by commuter airline, date and city pair. The report is sorted by date range, city pair, board point, class code and commuter airline. It can also be used as a summary of total passengers boarded by date and by station to assist airport manning projections.	
 
 	(vv)	The TMR 2 - Post Departure Report provides detailed post departure data for host and commuter flights for a maximum of 3 days prior to the request date. Also provides previous days boardings by city.	
 
 	(ww)	The TMR 3 - Interline Booking Report contains booking cancellation counts on host and other airline flights. Collects daily booking counts made by other airlines on the host, host airline on itself, and host airline on all other airlines. This information is obtained from the signature line of the Passenger Name Record (PNR).	
 
 	(xx)	The TMR 4 - Group Booking Report indicates the total number of large party and corporate Passenger Name Records (PNRs) for all host flights. The report is sorted by date range, board point and flight numbers.	
 
 	(yy)	The TMR 5 - Dupe Check Facility Report contains the passenger names and Passenger Name Record (PNR) locators of suspected duplicate bookings. Search logic checks the first 36 consonants of the last name and matches the first initial, as well as, title (i.e.: Mr., Mrs., Ms., etc.). This report may be requested for a specific flight in a market, specific date or date range or teletype booked PNRs. The search can also be limited to only corporate or Blocked Space Group (BSG) PNRs. The printed report also includes the flight number, class, date, status code, board and off points, first available telephone contact number from the PNR and the booking source.	
 
 	(zz)	The TMR 6 - Sabre Performance Summary Report displays the number of Passenger Name Records (PNRs) and high-speed message counts generated for the current month. Previous month and year-to-date information is also available.	
 
 	(aaa)	The TMR 7 - Daily Bookings Report contains booking counts on host airline flights, classified by date. All of the bookings for each day of a period of up to 7 months are calculated and displayed.	
 
 	(bbb)	The Teletype Reject Message function allows for the processing of inbound messages from other CRS’ rejected due to a mis-match of passenger name or itinerary information. Teletype rejects are sorted by departure date and placed on high, medium or low priority queues. The user determines the date range of each queue. The manual handling of teletype rejects is duty code restricted. Large party bookings are sent to a specific queue for group desk handling.	
 
 	(ccc)	Group Fare Processing (GRPF ) allows the host carrier to determine the large party number for requests sent from other airlines. Passenger Name Records (PNRs) containing the GFAX SSR “GRPF” entry are queue placed to the group processing queue for manual handling. Group bookings received without the GRPF option, are automatically sent back to the booking source with a segment status code “NO”, indicating no action taken.	
 
 	(ddd)	The Teletype Name Change Reject/Name Reject function rejects name change messages sent via teletype. These messages can then be manually reviewed.	
 
 	(eee)	The Large Party Process OA (Group OA) allows a user defined large party number to be designated for bookings received via teletype. These Passenger Name Records (PNRs) are automatically queue placed for manual processing rather than denying the booking.	

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 	(fff)	The Passenger Name List/Add and Delete List (PNL/ADL) is an IATA formatted message used to transmit Passenger Name Lists (PNL) to up to 6 teletype addresses. This is useful for carriers when ground handling another carrier’s flights. The PNL is generated to that pre-determined address of the ground handler, which then takes the data and automatically creates Passenger Name Records (PNRs) or Check-in data in the ground handler’s CRS. The Add and Delete List (ADL) refreshes and updates the original PNL with new, cancelled or modified passenger information.	
 
 	(ggg)	The Special Service Request (SSR) function enables SabreSonic to automatically process various inbound SSR requests and send the appropriate outbound teletype message reply. Each carrier can select the type of action to be taken by the system for each type of request, and the desired response to be automatically generated by the system back to the originator. This function can also be set-up to queue place Passenger Name Records (PNRs) containing pre-defined SSRs for manual handling.	
 
 	(hhh)	The Special Meal (SPML) Code function allows a reply to be sent back to the originator based on parameters contained in the Special Meal Table. The parameters determine the lead time for ordering meal, the class of service, the meal service availability on flight and the flight’s board point.	
 
 	(iii)	The IATA Mandated NAR (New Arrival) Segment and NCO (New Continuing Onward) Segment Teletype Message Changes function is a teletype message tag identifier that generates and sends the entire itinerary to other airlines occupying the same itinerary when changes are made to the arrival or continuing segments.	
 
 	(jjj)	The Electronic Travel Authority System (ETAS) is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access the ETAS system to apply for and receive travel visas to Australia. The visa is electronically transmitted via SabreSonic connectivity to the ETAS system.	
 
 	(kkk)	The Weather System is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access the National Weather Service system for current and forecasted weather conditions and temperatures around the world.	
 
 	(lll)	The World Tracer Baggage System link is a forward host Multi-Access connectivity function that enables SabreSonic to use World Tracer for bag searches among many world carriers. A SITA contract is required.	
 
 	(mmm)	The Baggage Management Analysis System (BMAS) tracks and locates mishandled baggage. This system has the ability to take passenger information from the Passenger Name Record (PNR) and enter it into the worldwide baggage tracking database.	
 
 	(nnn)	The Agent Sign Security (AgSS) function provides a defense against unauthorized users gaining access to SabreSonic, and deters certain system functions and entries through an Employee Profile Record (EPR). AgSS authenticates the identity of an agent at sign in to the system and establishes security through the use of keywords, duty codes and passwords. Specific SabreSonic functions may be performed, only with appropriate duty codes and/or keywords in the EPR, preventing inappropriate users from engaging in unauthorized functional activities.	
 
 	(ooo)	The Flight in Trouble (FIT) function is a table updated by the user that restricts flight data from viewership in the event of an incident. Once a flight is loaded into the FIT table, entries involving the affected flight number are restricted. For example, entries to display a Passenger Name Record (PNR), List Displays (LD), inventory displays, Airport check-in entries, flight information (FLIFO) and electronic ticketing entries and displays are all restricted. Updates to the FIT table are duty code restricted. Users possessing the appropriate keyword in their Employee Profile Record (EPR) can view restricted information.	
 
 	(ppp)	The OUS/OUB Message function allows messages to be generated, from unsolicited messages, to a specific CRT address (OUS) or all CRTs (OUB) on a specific line allowing rapid communication between users. The message is capacity controlled by an Employee Profile Record (EPR) keyword.	
 
 	(qqq)	The Pre-reserved Seat Selection (PRS) function provides the ability to issue advanced seat assignments, at the time of the reservation. A seat map is available for each flight and can be displayed by flight number or segment number. Seat assignments can be designated by area preference (either	

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 	smoking or non-smoking, window or aisle) or by specific seat number. A seat can be reserved up to 330 days in advance and boarding passes can be issued up to 30 days prior to departure. Seats can be cancelled by segment, specific seat number or by all segments without canceling the itinerary. Changes to pre-reserved seats are contained in seat history. All pre-reserved seats are name associated in the Passenger Name Record (PNR).	
 
 	(rrr)	The Sign in Message function allows authorized personnel to add a message to SabreSonic to be displayed on user sign in. Messages can vary by sign in location. These messages are Employee Profile Record (EPR) keyword controlled. Sign in messages provide timely communication of important information/training to specific locations or to all locations.	
 
 	(sss)	The Message Switching (MSW) function provides a method for processing teletype messages that are generated within and between airline/CRS and related companies around the world through the use of direct circuits and ARINC or SITA. MSW is also used to transmit Passenger Name Record (PNR) bookings and Passenger Name Lists/Add Delete Lists (PNL/ADL) to other CRS systems. MSW processes all of the administrative messages direct to SabreSonic printers. Messages can be addressed to a single location or simultaneously to multiple locations.	
 
 	(ttt)	The Scan File provides the ability to track high speed messages in the customer’s system and generate the following reports:	
 
 	(i)	Top Twenty Action Codes	
 
 	(ii)	Top Twenty Agent Signs	
 
 	(uuu)	The Condensed Report by Action code provides the number of times a specific entry is entered into SabreSonic. The Top Twenty Agent Signs provides the number of times a specific agent enters any command.	
 
 	(vvv)	Timatic is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access travel documentation requirements and regulations for nearly 200 countries.	
 
 	(www)	The Time Initiated Function Table (TIFT) function allows for the automatic generation of specific SabreSonic entries at specified times which are defined by the user. These specified entries and responses can be sent to either a printer, SabreSonic set address, or teletype address.	
 
1.2	Pricing, Fare and Rules Display	
 
 	(a)	Itinerary Pricing is a database with more than 45 million fares from over 650 airlines worldwide submitted by the Airline Tariff Publishing Company (ATPCO) and SITA. This database maintains fare filings, comprehensive rules, currencies and Banker Selling Rates (BSR)	
 
 	(b)	Price Quote (PQ) functionality allows tickets to be issued directly from the pricing information stored in the Price Quote Record in the PNR. PQ ensures tickets are issued at fare quoted until expiration of the Price Quote Record, which is controlled by the airline.	
 
 	(c)	The No Passenger Name Record (PNR) pricing function allows easy-to-use formats to price multi-leg itineraries without creating a PNR. A fill-in mask is available which provides flexibility to add or change information as needed. No PNR Pricing can accommodate a simple one-way or a complicated 16 segment itinerary for up to four different passenger types.	
 
 	(d)	The Tax Database function in SabreSonic includes both a Tax Database Summary Display and a Tax Database Detail Display. The Tax Summary displays a list of all taxes applicable to a specified country. The Tax Detail Display allows the user to request information regarding a particular tax.	
 
 	(e)	A Ticket Designator is used in pricing and ticketing entries to apply discounts to filed fares or to designate specific promotional rates. Ticket designators can be limited to a single validating carrier, by the inventory booking code, by travel validity dates or by geographical area. Ticket designators can be applied by segment, by trip or by itinerary.	

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 	(f)	Sabre Air Pricing Operations is responsible for all air itinerary pricing operations. This includes fare and rule data processing, development and maintenance of all pricing applications.	
 
 	(g)	The ATPCO: Automatic Fare Updates function electronically transmits the carrier’s filed fares from ATPCO to Sabre. This automatic process updates the carrier’s fares 5 times daily.	
 
 	(h)	The Fare Construction function provides principals that are used to calculate fares for international itineraries. Sabre pricing adheres to IATA standards of fare construction including global direction, directionality of fares, governing carrier, mileage parameters, limitations on indirect travel, higher intermediate fares (HIF or HIP), precedence of through fares, routings, differentials, around the world fares, minimum fare checks, cabotoge rules including French, British and Dutch and Neutral Units of Construction (NUCs). All local currency amounts are converted using the Rate of Exchange (ROE) to a NUC amount. The cost for the itinerary is then calculated in NUCs. The total NUC is then converted using the ROE to the currency of the country of origin.	
 
 	(i)	The Negotiated Fares function provides airlines with the ability to manage the distribution of non-published fares and defined viewership. Automated Negotiated Fares eliminate the need for paper tariffs or a privately managed database of negotiated air rates. The integration of negotiated fares with published fares can be displayed with a single fare quote entry. The automation of negotiated fares is accomplished through the Airline Tariff Publishing Company (ATPCO) privates fares tariff filing.	
 
 	(j)	Guaranteed Fare Pricing computes and saves the lowest applicable fare for a booked itinerary; validates an itinerary against all airline fare rules and displays detailed fare, tax, and surcharge information to the user; allows users to price an entire itinerary or specific segments of an itinerary. Also offers users the ability to price specific passenger types (e.g., adult, child, senior citizen, military, negotiated, etc.), using over 150 industry-standard codes	
 
 	(k)	Price by cabin returns the lowest available fare within a desired cabin for a desired itinerary taking into consideration current fare class availability. Price by cabin also allows users to append qualifiers that find the lowest fare regardless of availability, exclude penalty fares, with or without restrictions, and/or based on a specified purchase date. The user can also append a qualifier that automatically rebooks the itinerary in the lower class-of-service. Evaluates up to eight segments in one itinerary. (WPNCB)	
 
 	(l)	The U.S. government/state fare pricing (GST Pricing) function provides ability to price the lowest published fare, negotiated fares and U.S. state government fare in one entry.	
 
 	(m)	Fare & Rules Displays provide users with up-to-date information on airline fares, rules, government taxes, passenger fees, currency rate & exchange, and baggage allowance.	
 
 	(n)	The Fare / Shoppers Quote Display function displays all published fares for a carrier in the requested market for the specified date or dates of travel. Fares for future travel or up to 60 days past date EEDcan be displayed. Variations to the entry sort fares by fare type, currency, specified booking class, etc. Once the fare has been displayed, shortcut entries can be used to quickly change a part of the fare quote, such as the arrival city or the carrier. All fare and rule information is sent to Sabre from the Air Tariff Publishing Company (ATPCO) and SITA. The Fare Shoppers entry allows the user to view fares from all airlines that publish fares in the requested market. Fares are shown in ascending order, with comparison information regarding frequency and type of service (non-stop, direct, on-line connection) for each airline at the top of the display.	
 
 	(o)	The Electronic Rules Display (RD) function provides an automated display of fare rules submitted by each airline via their fares vendor to Sabre. This display contains 28 fare rule categories including seasons and blackouts, transfers, combinability, fare by rule information, minimum/maximum stay and groups. Specific rule categories may be accessed individually or in groups.	
 
 	(p)	The Rules Display – RD function returns fare rules for a carrier, including 28 categories.	
 
 	(q)	The Booking Code Validation (RB) Table displays booking code requirements to qualify for a specified fare basis as outlined by the publishing carrier.	
 
 	(r)	The ROE Display – FC function displays IATA quarterly NUC conversion rates of exchange.	

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 	(s)	The Currency Management (Conversion Functions) function displays the Bankers Selling Rate (BSR) for the country requested. This function converts currency at the market rate. Currency Management also contains an alpha listing of all country currencies, as well as, a conversion for the BSR.	
 
 	(t)	The Tax Display – TX function displays country or city specific taxes.	
 
 	(u)	The MPM Mileage Display – WN function displays applicable maximum permitted mileage for MPM fare levels.	
 
 	(v)	The Ticketed Point Mileage Display – WN function calculates miles traveled between ticketed points for fare and routing applicability.	
 
 	(w)	The PFC Display – PXC function calculates applicable passenger facility charge for domestic and international itineraries.	
 
1.3	Codeshare	
Unlimited codeshare flights are included in this Work Order for up to three (3) codeshare partner airlines to be implemented at cutover. Additional Codeshare partners implemented after cutover are not included. Codeshare flights refer to flight numbers, either marketing or operating. An agreement with the other carrier is required.
 
 	(a)	The Codeshare function provides the ability for an airline to partner with another airline to offer services to cities where the host airline does not fly. Additional market availability is provided without the added cost of aircraft, flight crew and airport facilities. The SabreSonic system currently supports IATA Options 1, 2, 3, and 4. The SabreSonic codeshare product is very flexible; allowing the carrier many choices in how various bookings and responses will be sent and processed. When a passenger checks in on the SabreSonic—hosted carrier’s flight that connects with a marketing flight, SabreSonic recognizes the codeshare flight; if the operating carrier has an EDIFACT agreement with the operating carrier, then EDIFACT Through Check-In is performed. This product requires a Codeshare agreement.	
 
 	(b)	The Codeshare Marketing TCS Date Relate functionality allows carriers participating in codeshare arrangements to link classes of service to dates in the TCS (Teletype Codeshare Table) enabling them to add effective and discontinue dates ensuring the marketing carriers classes of service are mapped and translated to the operating carrier’s classes of service for the exchange of booking data.	
 
 	(c)	The Operating TCS Table gives the operating carrier more control over what classes of service are being booked by the marketing carrier. This table is used to validate the fare class mapping translations for inbound IATA Option 1 and 4 booking messages sent by the marketing carrier. It is also used to translate the marketing carrier class to the operating carrier class of service for IATA Option 2 bookings and AVS messages.	
 
 	(d)	The PNL Check-In Enhancement function searches for existing PNR’s within SabreSonic when an inbound PNL/ADL message is received and merges the data found in the PNL with the existing Sabre PNR. This eliminates dupe bookings. It also enables the system to perform “ through check-in” on their passengers from their origin city to their final destination.	
 
 	(e)	The AVS Leg and Segment Support function applies the Availability Status (AVS) messages to both the operating and marketing carriers when an AVS message is sent.	
 
 	(f)	The Request Availability Status Message (RAS) function allows additional control of a carrier’s marketing flights. This product enables the marketing carrier to send an Availability Status (AVS) recap request to the operating carrier at any given time. Upon receipt of the message, the operating carrier will automatically return an AVS message (recap) to the marketing carrier. SabreSonic has the capability to send and receive RAS messages.	
 
 	(g)	The Passenger Name Record (PNR) Identification by Record Locator (RLOC) function attempts to retrieve a PNR in two ways in order to process inbound Teletype messages. The first check searches the OA RLOC (Other Airline Record Locator) Index for the originating airline’s RLOC; if the PNR is not found, the system will attempt to retrieve the PNR via flight, name, date.	

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 	(h)	The Open Seat Indicator on Boarding Passes function enables EDIFACT to print ‘OPN’ in the seat assignment field on ATB2 boarding passes issued via EDIFACT for OA open seating flights. This functionality is available for all EDIFACT partners who send an open seating indicator in the check-in response (DCRCKA).	
 
 	(i)	The LDX function will produce the Codeshare PNR Reconciliation Report from the Marketing Carrier’s Partition. The report will include an item for each PNR that was booked by the Marketing Carrier and is missing from either the Marketing or Operating Flight.	
 
 	(j)	The Flight Segment Included in Teletype Reply to SSR Request function provides for the flight segment associated to an SSR to be included in the SSR reply message.	
 
 	(k)	The Inbound Passenger Reconciliation List (PRL) Enhancement provides information collected during the check-in process that can be used to update a ground handled/marketed airlines’ reservation system, as necessary. The PRL message reflects a list of accommodated onboard passengers and associated information.	
 
 	(l)	The “SOLD AS” Identifier on Boarding Passes function modifies the current boarding pass stub to include a “SOLD AS” field to reflect the Marketing carrier’s code and flight number when operated by a codeshare partner. This provides the passenger with information associating the codeshare partner’s base operating flight number to the flight originally booked.	
 
 	(m)	The IATA Passenger Final Sales - Outbound Message is a teletype message generated during the post departure reconciliation process to provide post departure control statistical and/or amended passenger information to codeshare/contracted 3rd parties. The Post Final Sales message lists all “exception” passengers, or passengers who did not check in “normally”. The passengers are listed first by category, then class of service, and lastly alphabetically. A passenger will appear in only one category.	
 
 	(n)	The Codeshare Prepaid Ticket Advice provides the ability for the passenger to pickup a prepaid ticket from either the marketing or operating carrier’s ticket office. Upon issuance of the ticket a teletype message is automatically sent advising that the PTA has been ticketed.	
 
 	(o)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 1 messages. With IATA Option 1, the marketing carrier performs the translation to the operating carrier information. The marketing flight information is included at the end of the air segment. Therefore, the marketing carrier sends both marketing and operating carrier details within the booking message.	
 
 	(p)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 2 messages. With IATA Option 2, the operating carrier performs the translation to the operating carrier information. The marketing carrier sends marketing flight information only.	
 
 	(q)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 3 messages. With IATA Option 3, the marketing carrier performs the translation to the operating carrier information. The marketing carrier sends operating flight information only.	
 
 	(r)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 4 messages. Codeshare IATA Option 4 is similar to Option 1, however the booking format is slightly different. The marketing carrier performs the translation to the operating carrier information and both flights are included in the air segment.	
 
 	(s)	The Codeshare Automated Passenger Protection (APP) function allows the operating and marketing carrier to determine who will be responsible for reaccommodating the marketing codeshare passengers during schedule change. If it is determined that the operating carrier will be responsible for reaccommodating the marketing passengers, teletype messages are created to update the marketing PNRs and processed according to the rules of each partner. Additionally, the SabreSonic operating carrier may protect marketing carrier’s passengers separately from their own non-codeshare passengers. Each codeshare may be protected differently as well.	

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 	(t)	The Codeshare Availability Status Messages (AVS) Reapply function re-applies AVS inhibits, previously applied by the operating carrier from an AVS open or close message, after the marketing carrier’s schedule change.	
 
 	(u)	True Availability allows a marketing flight’s Inventory Detail record (IND) to be programmatically linked to the IND of the operating carrier, when both airlines reside in the SabreSonic system. Therefore, the availability of the marketing flight will mirror the availability of the operating flight, reflecting its “true availability”. A ‘TAI’ indicator in the city pair availability demonstrates to the marketing carrier that the city pair is displayed as ‘true availability’. Additionally, True Availability supports all Sabre inventory structures (Net, Threshold, Virtual and Continuous Nesting).	
 
 	(v)	The FLIFO Cancellation function appends a FLIFO cancellation message on the marketing flight when the operating flight is cancelled with a CN or CS action code.	
 
 	(w)	The Codeshare Seat Return-Outbound function provides the ability to return seats to the operating carrier by cabin, date range, time and origin or destination for codeshare block space agreements. Codeshare Seat Return also creates the ability to retain a minimum number of block seats, to set new seat authorizations with adjustable overbooking levels, to provide return seat percentages and to establish additional addresses for seat release messages.	
 
 	(x)	The Dual Flight Number Validation function provides the ability to validate the dual flight number information is correct when it is received from the marketing carrier. This function is applicable to IATA Option 4 codeshare partnerships only.	
 
 	(y)	Codeshare Ticket Number Advice (TKNA) notifies the marketing carrier when the operating carrier tickets the PNR using paper ticketing. Upon completion of ticketing the operating codeshare PNR, teletype will send an SSR TKNA to the marketing carrier, which will input a T- 20JUN (date ticket was issued by operating carrier), followed by the ticketing information in the marketing carrier’s ticketing field. This will eliminate the possibility of the PNR being cancelled due to a ticketing time limit imposed by the marketing carrier at the time of booking.	
 
 	(z)	Codeshare Flight Default permits the check-in agent to use the marketing carrier code and flight number when defaulting to a flight for check-in.	
 
 	(aa)	The Codeshare Agreement Table is a centralized location of all codeshare tables. This table will give the customer and the Sabre Codeshare representative the ability to view all features that have been activated for any particular codeshare partnership without having to search different codeshare tables.	
 
 	(bb)	Codeshare Numeric Availability Status Messages (AVA) provides the ability for a SabreSonic user to send and receive AVA messages for Availability Status Messaging. AVA is an additional free flow availability message that provides more accurate inventory synchronization between codeshare partners. The availability message is in numeric format that includes all mapped classes of service (RBDs), both public and non-public, for each compartment (F/C/Y). This differs from the standard AVS message, which includes only the classes affected by the change. By including the current availability for all RBDs, there is an inherent control feature that allows the marketing carrier to maintain an accurate availability at all times. This functionality also includes the sending and receiving of AVA Recap Request messages (RVR) and AVA Recap Responses (AVR).	
 
 	(cc)	Guaranteed Sell for Codeshare Flights enables the system to verify availability on the operating carrier’s codeshare flight prior to confirming an inbound booking message from the marketing carrier. This will eliminate the number of codeshare overbookings on the operating carrier’s flight.	
 
 	(dd)	The Automate Codeshare Schedule Change feature will automatically update the SabreSonic hosted marketing carrier’s flights and passengers when an operating carrier’s schedule changes. For Sabre to OA codeshares, this feature will automatically generate a Standard Schedules Message (SSM) to the OA marketing carrier in order to update the marketing flight when the operating flight is created or changed, reducing the number of flights with possible schedules out-of-synch.	
 
 	(ee)	Ticket and Time Limit Notification notifies the booking source when the operating carrier tickets or adds a ticket time-limit to the Passenger Name Record (PNR). This applies to interline and codeshare PNRs. Notification is generated in the form of an SSR TKNE, TKNA, or TKTL.	

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1.4	Command CenterTM Interface	
Command CenterTM Interface is a web based graphical user interface (GUI) giving SabreSonic customers a tool to easily perform the system configuration, table maintenance, and information reporting tasks for functions including: Market Tariff Table; Codeshare configuration and management; Pre-Reserved Seat Map configuration; Agreements management (Ticketing & Baggage Agreements, Credit Card Acceptance agreements, and Frequent Flyer Agreements
 
1.5	Credit Suite	
 
 	(a)	Basic Authorization	
The Credit Authorization (CAS) function provides the carrier the ability to obtain real-time, instantaneous credit authorization for major credit cards accepted as form of payment. Credit card numbers are first validated for accuracy upon input into the system. After that, direct links between SabreSonic and the major credit card associations provide the carrier the means of obtaining a real-time approval code prior to issuance of a ticket. Alternatively, the automated approval code may be substituted by the use of an on-line entry to approve credit prior to document issuance.
 
 	(b)	Credit Suite	
The Data Delivery function (also known as Accelerated Credit Card Billing or ACCB ) allows carriers to accelerate settlement of American Express, Discover, MasterCard, Visa, JCB and Diners Club/Carte Blanche credit card transactions. Credit card settlement data is captured and formatted according to preferences of airline’s credit card merchant bank(s)/processor(s). This information is transmitted “on behalf” of the carrier directly to the bank(s)/processor(s). The data is sent daily, seven days a week, being electronically downloaded into the banks’ accounting systems, and therefore accelerating the process of recovery of credit card revenue by 5-8 days on average, considerably improving airline’s cash flows. Credit card purchases for transportation tickets, as well as refund, exchange and miscellaneous transactions completed through the use of masks can be accelerated. Requires Sabre generated Ticket Number. Sabre supports encrypted FTP/IP connectivity via Internet for the transmission of Credit Suite files. However, in specific cases, a dedicated communications link to the credit processor/bank may need to be installed.
Interchange Optimization (also known as Payment Services 2000 or PS2000 ) represents Sabre’s flexibility to meet local requirements from the card associations, in order to qualify the carrier for the lowest possible discount fees on transactions processed via the Data Delivery product. As an example, in the US, Visa and MasterCard’s “Passenger Transport” qualification requirements are met by the inclusion of additional data fields in the settlement files sent to banks. Specific requirements need to be analyzed on a country by country basis. Magnetic card swipe reader devices may be required. Interchange Optimization programs may require a contractual agreement between the carrier and the card associations.
 
 	(c)	Credit Suite - Fraud Prevention	
Address Verification Service (AVS) is an enhanced fraud tool that verifies that the address in the credit card data field matches the address on file with the card issuer, allowing for more secure transactions. Currently available in the U.S., Puerto Rico and the U.S. Virgin Islands.
 
1.6	Customer Relationship Management Suite	
 
 	(a)	CDD	
Customer Data Delivery – PNR and VCR Data (“ CDD – PNR and CDD – VCR Data Feed ”) enables Sabre hosted airlines to receive structured data files containing normalized host airline Passenger Name Record (PNR) and Virtual Coupon Record (VCR) data. Information on all active PNRs and electronic tickets (VCRs) from airline direct, agency, and other interline booking channels that are active in the host airline database in the Sabre ® Passenger Reservation System after date/time of implementation is included. The data is extracted from the hosted airline database and is transmitted via scheduled batch feeds.
Data will be delivered to Customer via FTP on a daily basis, in flat files, delimited data string format.

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 	(b)	Customer Insight	
Customer Insight is a profile system that can be used as a central repository for customer profiles. The database is located on an open platform and supports flexible data access and update methods: Batch file updates via FTP, manual updates via the Sabre system or the SabreSonic Agent Interface, and a web service interface based on OTA (Open Travel Alliance) standards. The data model utilized provides the ability for hosted airlines to store a wide variety of information regarding their customers, for example: personal information, such as name, contact information and travel document information; air travel information such as customer value score, service needs such as airline seating, meals and class of service, also travel preferences, frequent traveler information and employment information. Frequent Traveler profiles can be used during the booking process to quickly build a Passenger Name Record (PNR) by automatically moving profile information into the PNR with reduced keystrokes and increased accuracy. The reservations and check-in functions integrate with Customer Insight in order to recognize an airline’s most loyal frequent flyer members.
 
 	(c)	Customer Value Calculator	
The Customer Value Calculator is a model which calculates a customer value score for each customer with a profile given a set of airline specified parameters. The application currently consists of three main areas:
 
 	•	 	Parameter Inputs	
 
 	•	 	Graphical Distribution	
 
 	•	 	Parameter Set Management	
The information below contains a description of these specific areas.
Parameter Inputs: The model allows the user to configure three different parameters: Recency, Frequency, and Monetary Value. Recency represents the number of segments flown by a customer in a user specified period of time. This time period is generally short in duration and is used to capture recent travel activity. Similarly, Frequency also represents the number of segments flown by a customer in a user specified period of time. However, the time period for this is generally longer than the Recency time period. For example, whereas the time period of consideration for Recency might be 12 months, the Frequency time period may be 36 months. The final parameter in the model is monetary value. This parameter captures the amount of spend by a customer in a user specified period of time.
The user has the ability to control each of these parameters in three ways: time periods, ranges, and weights. Time periods, as discussed previously, define the time period for which the parameter will be calculated. Ranges give the airline the ability to tier the values for a particular parameter. For example an airline may choose to assign values for recency like:
 
 	•	 	Less than or equal to 2 would indicate a recency score of 0	
 
 	•	 	Between 3 and 6 (inclusive) segments would indicate a recency score of 30	
 
 	•	 	Between 7 and 10 (inclusive) segments would indicate a recency score of 70	
 
 	•	 	11 or more segments flown in the time period would indicate a recency score of 100	
Finally, the airline can set the relative weights of the parameters. For example, recency may compose of 20% of the customer value score, frequency may compose of 30% of the customer value score, and monetary value may compose of 50% of the value score.
Once all of these parameters are set then a customer value score can be calculated for each customer with a customer profile. The user can then save this parameter set under a unique name for further reference.
Parameter Set Management: The third and final area of the Customer Value Calculator is the area of parameter set management. Airlines can have multiple parameter sets with different goals and experiments using the what-if functionality of the model.
The Parameter Set Management area allows users of the system to perform general management functions. This includes viewing, sorting, deleting, and renaming parameter sets. From the parameter set management area, a user can also tell which parameter set is currently loaded in production as well as the next one queued for production if a change has been designated.

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1.7	Interact™ Interface	
Interact is a graphical user interface for airline agents to manage reservations and check-in functions from a single, easy-to-use tool. The Interface supports all native host functionality required for call center or airport agents. In addition, the product provides graphical seat maps, consistent and easy-to-use tab-based navigation, easy-to-read graphical output and the ability to work equally well with or without a mouse.
 
1.8	Net Access™	
Net Access is an internet based emulator solution for airline customers. Airline staff and Global Sales Agents (GSA’s) would use this emulator to access the native Sabre System. It may be used at Reservations offices, City Ticket offices, Airports, or any other location where Sabre access is needed and hardwire is not available. Net Access is intended to address the need for infrequent service (i.e., seasonal or charter), or in non-traditional situations (an airline has a representative stationed on-site at a convention to assist customers). Net Access is offered as an alternate product rather than a replacement for existing Airline Solutions products.
Below are some of the benefits of using Net Access:
 
 	(a)	Increased productivity – easy, convenient, one-stop shopping tool that reduces time consuming research for products and services that are difficult to find today	
 
 	(b)	Low cost – browser based, available 24/7 over any Internet connection	
 
 	(c)	Global – localized at the country and regional level	
 
 	(d)	Customizable – can be configured	
Sabre airlines are utilizing Net Access in the following ways:
 
 	(a)	Global Sales Agents (GSA’s)	
 
 	(b)	Small office environments, such as:	
 
 	(i)	Reservations offices	
 
 	(ii)	City Ticket offices	
 
 	(iii)	Work from Home capabilities	
 
 	(c)	Unique airport needs, such as:	
 
 	(i)	Early start-up service before wiring is installed	
 
 	(ii)	Charter service	
 
 	(iii)	Or other situations where hardwire is too costly or not available	
 
 	(d)	Net Access is distributed via a web link	
 
 	(e)	Because some airlines may have difficulty downloading the emulator due to an internal firewall, a CD will be provided upon request	
 
 	(f)	Net Access provides a low cost alternative to hardware	
 
 	(g)	Connectivity is achieved through the internet and may be connected via any Internet Service Provider (ISP)	
 
 	(i)	No dedicated circuits required	
 
 	(ii)	Eliminates legacy communication connections (x.25)	
 
 	(iii)	Eliminates need for dedicated routers	

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 	(h)	No software to distribute or install	
 
 	(i)	Installation completed by the customer	
 
 	(ii)	Easy to use installation script	
 
 	(iii)	Java is downloaded during the installation process	
 
 	(i)	Supports Sabre host functionality	
 
 	(i)	Includes all standard configuration functions	
 
 	(ii)	Including font size, colors, window display	
 
 	(iii)	Includes support for PF Keys, Quick Keys etc.	
 
 	(iv)	Enables the Interact Airport and Reservations interface to connect to Sabre from a computer with internet access with no dedicated circuits required	
 
 	(j)	Supports point-and-click functionality not available in a regular native Sabre emulator	
 
 	(k)	Supports Sabre ticket, boarding pass, and bag tag printing	
 
 	(l)	System architecture designed for automated updates	
 
 	(i)	No repeat installation required	
 
1.9	Qik® Schedule Interface	
The Sabre® Qik-Schedule™ product is a graphical user interface for airline employees to modify schedules from an easy-to-use tool.
 
1.10	MyFares	
Sabre MyFares offers near-real time fare transmission processing and sales channel targeting to provide increased control over when and where fares are distributed. Fare content can be distributed to specific airline geographic groups, including area, zone, nation, state/province, city/airport and department code. In addition, users have the option to distribute to the extensive worldwide Sabre ConnectedSM agency network. MyFares serves as a supplemental direct fare filing option to ATPCO and SITA fare filings.
 
1.11	Business Intelligence Essential Analytics module	
The SabreSonic Essential Analytics reports module (the “System”) is a separate module of the SabreSonic Business Intelligence product family. It consists of a base set of reports with Customer configurable parameters for narrowing the scope and focus of the reports. Examples of the types of reports included in this reports module are described below (subject to change as the product evolves based on customer input and usage factors):
 
 	(a)	Bookings and Cancellations Reports	
 
 	(i)	Accessible via SabreSonic Airline Community Portal	
 
 	(ii)	Bookings and Last-minute Cancellation Counts / Sources	
 
 	(b)	Market Analysis Reports	
 
 	(i)	Top Markets	
 
 	(ii)	Specific City Pairs, Departure Cities or Arrival Cities	
 
 	(c)	Flight Level Reports	

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 	(d)	Daily / Date Range Perspective	
 
 	(e)	YOY / YTD, QOQ / QTD, MOM / MTD option for Booking Count Report	
 
 	(f)	Segment and Airline O&D Perspective for Booking Reports	
 
 	(g)	Graphic Summary Representations (Pie Chart, Bar Chart)	
 
1.12	SabreSonic® Inventory base inventory option	
SabreSonic Inventory provides airlines flexibility in designing nesting structures by supporting the following:
 
 	(a)	Serial - fare classes nested one into another	
 
 	(b)	SabreSonic Inventory supports advanced point of sale control, including:	
 
 	(i)	Capability to control POS by the IATA EDIFACT standard levels—country, city/airport, agency (IATA ARC number)	
 
 	(ii)	Point of sale search may be serial or hierarchical (based on level of match)	
 
 	(iii)	Additional POS differentiators are duty code and agent sign-in ID	
 
 	(iv)	Point of sale relationships may be defined in a table	
 
 	(v)	Ability to control availability by discrete channels such as off-tariff fares negotiated with travel agencies and online channels.	
 
 	(vi)	Agency blacklists are also supported by SabreSonic Inventory and managed through the point of sale rules.	
 
 	(c)	SabreSonic Inventory supports extensive control of availability through the use of flexible rule-based actions to be taken during the availability process. Controls are provided at the host, market, point of sale and flight number level of detail.	
 
 	(d)	SabreSonic Inventory currently supports the following actions:	
 
 	(i)	Inhibit a fare class – no availability, long sell permitted	
 
 	(ii)	Inhibit a fare class from availability – no availability, no short sell, long sell permitted	
 
 	(iii)	Inhibit a fare class from sell – shows in availability, no sell permitted	
 
 	(iv)	Suppress availability to zero – shows in availability with zero seats, no short sell, long sell permitted	
 
 	(v)	Suppress segment limit – overrides segment limits for all fare classes	
 
 	(vi)	Block availability – applies to all fare classes	
 
 	(vii)	Block sell – applies to all fare classes	
 
 	(viii)	Uninhibited fare class – reverses inhibit for availability and sell	
 
 	(ix)	Uninhibited fare class for availability – reverses an availability inhibit	
 
 	(x)	Uninhibited fare class for sell– reverses a sell inhibit	
 
 	(xi)	Adjust fare class availability with multiplicative and additive factors	
 
 	(xii)	Adjust fare class authorization with multiplicative and additive factors	
 
 	(e)	The following is a list of conditions users can apply to qualify the above actions:	
 
 	(i)	Rule effective and discontinue date	
 
 	(ii)	Frequency (days of the week)	

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 	(iii)	Sales date ranges	
 
 	(iv)	Seasonality (Travel date ranges)	
 
 	(v)	Sale days open restriction (inclusive)	
 
 	(vi)	Sale days closed restriction (inclusive)	
 
 	(vii)	Sale hours open restriction (inclusive)	
 
 	(viii)	Sale hours closed restriction (inclusive)	
 
 	(ix)	Sale date/time open restriction (inclusive)	
 
 	(x)	Sale date/time closed restriction (inclusive)	
 
 	(xi)	Travel departure time bands (times local to point of origin) (inclusive or exclusive)	
 
 	(xii)	Travel arrival time bands (times local to point of destination) (inclusive or exclusive)	
 
 	(xiii)	Routing (or, and, consecutive)	
 
 	(xiv)	Trip type (non-stop, multi-stop direct, online connection, interline connection, 1, 2 or 3 connect points)	
 
 	(xv)	Departure region	
 
 	(xvi)	Arrival region	
 
 	(xvii)	Point of sale (country, city, agency IATA fare qualification rules number)	
 
 	(xviii)	Interline partner carrier code list	
 
 	(xix)	Operational type – normal, funnel, overlap, code share (applies to a segment	
 
 	(f)	SabreSonic Inventory manages waitlist placement using client defined percentage limits, which initiates the waitlist clearance review. SabreSonic Inventory also supports clearance with availability and sell processing.	
 
 	(g)	Note – O&D Controls are not included.	
 
 	(h)	SabreSonic Inventory also supports the following types of AVS generation:	
 
 	(i)	Segment AVS provides the capability to send other airlines and/or CRSs open and close messages for a specific origin and destination without affecting other cities in the line of flight.	
 
 	(ii)	Leg AVS provides the capability to send other airlines/CRSs open and close messages for a specific origin and destination which will open or close other cities in the line of flight.	
 
 	(iii)	Numeric AVS provides the capability to send specific availability levels to other airlines and/or CRSs.	
 
 	(i)	The Schedule Change function furnishes the means to create and alter flight schedules and related elements of data.	
 
 	(j)	The Dynamic Schedule Change function allows the user to add, modify, cancel and reinstate current flight schedules into SabreSonic. These changes are stored in a database and are updated in SabreSonic twice weekly.	
 
 	(k)	The On Demand Schedule Change function allows the user to add, modify or cancel flight schedules and have the updates shown in SabreSonic immediately.	
 
 	(l)	The Schedule Change Passenger Protection Reports are online displays that contain detailed information on the flights and passenger PNRs affected by schedule change reaccommodation. Reports include: Summary of flight numbers and passengers affected; Flight Detail with detailed reaccommodation information for each PNR; Basic Airline Segment (BAS) Display, containing basic airline segment details for each PNR; and Candidate Display, which included a list of protection candidates used by the system to protect a PNR by flight and Record Locator	

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 	(m)	The Extra Sections function allows for the addition of extra flights to the system outside of the schedule change process. Extra sections are used when the market requires an additional flight for a limited operation - i.e.: 1 day or 1 day a week for the next month.	
 
 	(n)	The Charters function enables two ways for charters to be input into the system. Charters input through a schedule change entry appear as any other flight. Charters input with an inventory type entry using a specific flight number range are not shown in city pair availability. Seat maps and seat assignments, boarding passes, positive name match, on-board counts, no-shows and IATA Passenger Name Lists (PNLs) and Add and Delete Lists (ADLs) are provided for charter flights.	
 
 	(o)	The Schedule Change Reaccommodation function is an automated passenger reaccommodation process for passengers affected by schedule change. SabreSonic automatically builds a candidate list for protection where the highest-ranking candidate (flight) is determined and used for the reaccommodation process. The ranking is determined by parameters defined by the carrier. Each carrier can also assign criteria values to passenger PNR’s to determine the reaccommodation order by PNR attributes, such as frequent flyer, class of service, etc. The carriers also have the ability to define limits for flight overbookings during reaccommodation. There are two reaccommodation options an airline can chose to implement:	
 
 	(i)	O&D – Identifies protection for the whole journey, from origin to destination.	
 
 	(ii)	Leg Based – Identifies protection for the affected legs.	
 
 	(p)	The Commuter function provides the ability to designate up to 15 additional airlines as commuters, under the host airline code, by assigning a specific flight number range and using an asterisk in the city pair availability display. Additionally, a message can be appended to flights in order to identify the name of the commuter airline in the city pair availability display. The Encode/Decode table contains the commuter carrier name.	
 
 	(q)	The Automated Overlap Flights function provides an automatic method for inventory control of the shared legs. Specifically, the Automated Funnel Flights function provides an automatic method of updating seats sold for a change of aircraft which results in a connecting flight appearing as a direct flight in city pair availability. The Automated Overlap Flights function allows for the utilization of one aircraft to operate as two flight numbers over a common city pair and automatically decrements inventory when a seat is sold. Overlap flights may or may not be a change of aircraft, which may result in passenger deplaning and enplaning. Only one of the flight numbers will appear in the city pair availability for the common leg.	
 
 	(r)	The Inventory Authorization - Flight Load Predictor (FLP) function is a nightly process used to adjust authorizations of flights. The authorizations specify the number of seats available for sale in each class for a specific period before flight departure date. Manual entries exist to change or override these authorizations. FLP allows the ability to retain authorization levels through a schedule change.	
 
 	(s)	SSM provides the automated message transmission of SabreSonic schedule changes to be generated to another CRS. ASM provides the automated message transmission of adhoc changes to be generated to another CRS, such as flight cancellation, entries changing arrival or departure times, and equipment changes. Available only with Amadeus, Galileo and Worldspan	
 
2.	SABRESONIC® TICKET	
 
2.1	Basic Ticketing	
 
 	(a)	The Inclusive Tour / Bulk Ticketing (ITBT) function allows the pricing and ticketing of inclusive tour (IT) and contract bulk (BT) tours. The ticketing entry prints either IT or BT, as applicable, in the base fare box on the ticket instead of the base fare. Taxes are calculated unless a tax override is used, however no total is printed. For ATB ticket stock, the actual fare amount is printed on the auditor coupon.	

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 	(b)	Ticketing Masks provide an automated method for exchanging tickets and collecting funds for the sale of prepaid tickets, miscellaneous service items and non-transport fees. Requires Sabre generated Ticket Numbers.	
 
 	(c)	The Exchange Ticketing function is an automated process utilizing a mask to complete the exchange transaction. Use of this mask provides exchange information to revenue accounting systems in the Ticket Control Numbers (TCN) off-line file. Data Delivery for exchanges is possible with the mask.	
 
 	(d)	The Paper Ticket Surcharge functionality automatically displays paper ticket surcharges as a “Q” surcharge on the ticket in the fare calculation line, eliminating the need to enter a miscellaneous charge order (MCO) and maximizing the use of electronic ticketing.	
 
 	(e)	The Automated Teletype Prepaid Ticket Advice (PTA) mask is an automated method used to issue a system-generated PTA document and automatically record all PTA data in the Passenger Name Record (PNR). The mask automatically fills with itinerary and pricing information captured from the PNR, the user enters purchaser and other relevant information. SabreSonic edits for required information, calculates totals, prints the PTA document and when applicable, updates the Agent Sales Report.	
 
 	(f)	The Refund mask provides an automated method for users to issue refunds for unused tickets, downgrades, denied boarding compensation, or overcharges. Each refund transaction is performed through a series of user fill-in masks. Upon completion of the transaction, a refund document is issued and the Agent Sales Report is updated. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(g)	The Transportation Voucher mask enables users to generate a document that can be used at a later date for airline travel. Vouchers could be used in the case of over sales, as a promotional tool or as a goodwill gesture. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(h)	The Miscellaneous Sales mask provides an automated method to collect funds for the sale of miscellaneous service items (i.e.: oxygen, pet kennels, bicycles, change fees, excess baggage charges, etc.) or taxes. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(i)	The Ticket Print Routine function provides automated ticket issuance for both automatically priced itineraries and manually updated ticket images. In addition to Automated Ticket and Boarding Pass (ATB1 and ATB2), SabreSonic has several transitional ticket print routines (TAT). Automated ticketing provides qualifiers for group, passenger type, name and segment select and tax-exempt. Automated ticketing is also available for industry/reduced rate ticketing. The ability to exchange tickets is also provided.	
 
 	(j)	The Customer Service Authorization (CSA) function provides airport agents ability to issue automated Customer Service Authorizations (CSA) on ATB ticket stock. The CSA application allows EPR AAA city database updates and systemwide CSA database viewership. Airport agents can issue CSA amenities vouchers for local accommodation or accommodation in other cities. The passengers PNR’s will be updated with historical remarks.	
 
 	(k)	The Sabre Generated Ticket Number (SGTN) function provides ticket numbers generated by SabreSonic from a ticket number range provided by the carrier. SGTN uses a ‘MOD 7’ check digit algorithm for ticket number security. SGTNs are automatically generated to the Agent Sales Report and the Ticket Control Number (TCN) off-line file.	
 
 	(l)	The Universal Charge Coupon function provides an additional coupon which can be signed by the passenger and used as the credit card document to be sent to the customer’s credit card company. The Universal Charge Coupon is offered in ATB1 and ATB2 print routines.	
 
 	(m)	The Agent Coupon - Automated Ticket/Boarding Pass (ATB) function provides an additional copy of the auditor’s coupon.	
 
 	(n)	The Reservations Ticketing function identifies reservation ticketing centers and regional offices in order to separate and distribute reservations ticketed Passenger Name Records (PNRs) by the form of	

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 	payment (credit card or invoice) which is derived from the ticketing field, or by PNR type which is determined by the date of travel. The distribution is accomplished by queuing the PNRs to the reservations ticketing center or regional offices for handling. The reservations ticketing function provides the ability to issue an electronic ticket for travel.	
 
 	(o)	The Reservations Ticketing Print Routine product provides the ability to print invoice name, address and form of payment information, from the remarks section of a retrieved reservations ticketing Passenger Name Record (PNR), in the appropriate places on the reservations ticket and invoice. The Reservations Ticketing Print Routine has ATB2 capabilities.	
 
 	(p)	Agent Sales Report (ASR) provides a method to accurately record all ticketing transactions. ASR records daily ticket sales (manual and Sabre generated), coupon exchanges, checks, cash transaction, all credit card transactions by credit card company and Sabre issued miscellaneous sales, prepaid tickets, vouchers and refunds. All agent sales reports will be sent offline when the station close entry is completed and be available for revenue accounting purposes in an off-line file.	
 
2.2	Electronic Ticketing	
 
 	(a)	The Airline Direct Electronic Ticketing product provides computerized storage of the passenger’s entitlement to travel. The host airline maintains the accountable travel and payment information in a real-time environment. Itineraries with up to 4 segments can be issued electronically. Electronic tickets are retained in the system until seven days after the last flight segment becomes inactive. An inactive status could be flown, refunded or exchanged. If there is at least one active flight segment, the electronic ticket is retained for up to 396 days from the date of the first flight coupon. After all flight coupons have been used, the electronic ticket is retained in the system for 7 days.	
 
 	(b)	The Electronic Ticket Flown Virtual Coupon Record (VCR) contains data from the flown flights of tickets issued by the electronic ticketing product. The VCR is marked as lifted/used when it has undergone post departure processing. A VCR record consists of an individual flown or lifted flight coupon.	
 
 	(c)	The Virtual Coupon Record (VCR) Purged File contains a daily capture of ticket and coupon information for all VCRs being purged from the system.	
 
2.3	Interline Electronic Ticketing	
 
 	(a)	The Interline Electronic Ticketing Sabre function allows a SabreSonic hosted electronic ticketing carrier to use electronic tickets for interline passengers with a non-Sabre hosted carrier. Airline Direct E-Ticketing is required.	
 
2.4	Automated Exchanges and Refunds	
 
 	(a)	The Change Fee Collection feature of the Automated Exchange product gives an airline the ability to ensure change fees are collected, or to waive and document the reason for the waiver. For itineraries changed with the SabreSonic Res System prior to a passenger’s airport check-in, boarding pass issuance is inhibited at time of check-in until the agent either collects the fee or documents the reason for waiver. The requirement of an explanation as well as the legend of waiver codes/ reasons is controlled by the airline via a user updateable table. In order for an airline to inhibit boarding pass issuance when an outstanding fee exists, an airline must use SabreSonic Check-In in conjunction with the Change Fee Collection feature. The use of the Change Fee Collection feature includes the following reports:	
 
 	(b)	Change Fees Collected file – Agent location, date, sine, and amount collected	
 
 	(c)	Change Fee Override report – Agent location, date, sine, reason code and (optional) text explanation of override	
 
 	(d)	The Paper Ticket Capture feature of the Automated Exchange product provides a means to populate the paper ticket database with TCN (Ticket Control Number) data received from ATPCO and Sabre. This allows Customer to view paper ticket images. (Carrier must have signed agreement with ATPO to receive this feed)	

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 	(e)	The Ticket From Price Quote Record feature of the Automated Exchange product extends the airline’s fare validity period to ensure a passenger receives the ticket price they were quoted per each carrier’s criteria in the Price Quote Record Expiration Table.	
 
 	(f)	The Automated Exchanges feature of the Automated Exchange product automates an airline’s process for completing ticket reissues and exchanges, including the ability to address downgrades, denied boarding compensation and overcharges. Mask processing within this product automates the calculation of taxes, fares and ticketing for complex itinerary combinations and enables agents to use published and private fares and override fare rules. When used in conjunction with SabreSonic Check-In, this feature can also automatically notify an agent when an add-collect amount is due and suspends the boarding pass issuance until the money has been collected.	
 
 	(g)	The Automated Refunds feature enables airlines to automate their current manual refund process, including support for the recall of taxes from governments (when appropriate) to expedite the entire refund process.	
 
3.	SABRESONIC® CHECK-IN	
 
3.1	Sabre® ACSTM	
 
 	(a)	The Sabre® ACS™ passenger check-in system facilitates check-in by performing a multitude of functions including most aspects of baggage handling and routing, baggage security, passenger information, passenger check-in, boarding, onboard reconciliation, flight control and post-departure control. ACS helps agent’s process passengers quickly and efficiently by presenting passenger information in a consistent, uncomplicated format with logical entry sequences and graphical representations that expedite the check-in process.	
 
 	(b)	The Automated Bag Tags function allows for the automatic issuance of bag tags as passengers are checked-in. Automatic updates to the Passenger Name Record (PNR) and Passenger Item, with the bag tag number and the final destination of the checked bag(s), are performed. Other features include the ability to modify or cancel the number of bags for previously checked-in passengers. Bag tag numbers are not duplicated for the current flight.	
 
 	(c)	The Automated Boarding Pass feature provides printed boarding passes which contain the passenger name, gate information, departure information, destination, frequent traveler number, sequence number and seat assignment. Boarding pass information will also indicate whether the flight is a codeshare, wet-lease or change-of-gauge segment.	
 
 	(d)	The Baggage Sortation Message function provides reconciliation, license plate (bag tag bar codes), piece count and weight information for the processing of baggage by automated baggage sortation systems. Transfer messaging expedites the transfer of interline baggage, by providing the bag tag information and carrier to the downline station.	
 
 	(e)	The Post Departure Control function transfers flight control, enabling passenger check-in, to downline stations. This function enables updates of Passenger Name Records (PNRs) with no record (NOREC), alternate space, frequent traveler participation, and electronic ticket data. Updates to individual PNRs with boarded and not boarded passenger information is also provided.	
 
 	(f)	The Standby Listings function records the passenger name, time of check-in, destination and desired cabin of service for all airport standby passengers. This function is used to track and accommodate both revenue standby and non-revenue standby passengers.	
 
 	(g)	The Standby by Seniority function allows the option to prioritize employee non-revenue pleasure standby passengers by specific code and company seniority.	
 
 	(h)	The Third Party Handling function allows stations to ground handle other airline’s flights within their own partition/CRT via IATA messaging. PNL/ADL, PRL, and PFS are supported on behalf of third party handling.	
 
 	(i)	The Passport Name List function records and processes passenger passport information for most international flights at the time of check-in. This information is then sent via teletype to the downline	

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 	U.S. Customs station. Passenger emergency contact (PCTC) information is collected at check-in and noted in the Passenger Name Record (PNR) for carrier and U.S. Government uses in case of an incident.	
 
 	(j)	The Automated Passenger Profile System (APPS) profiles those passengers who could be a possible security risk on domestic flights. This system was created in conjunction with a FAA mandate to U.S. carriers. Passengers are ‘scored’ prior to check-in, then again when checking baggage to determine the security risk. Agents are then alerted to perform positive bag match procedures for such passengers prior to the flight’s departure.	
 
 	(k)	Positive Bag Match provides airlines with the ability to display those passengers with checked bags who have not yet boarded the aircraft.	
 
 	(l)	The Pre-cleared Baggage Edit provides the ability to establish when baggage has been cleared through an extraneous device.	
 
 	(m)	The Connecting Passenger Information (CPI) Display Enhancement improves existing connecting information by gathering and including the outbound connecting gate, terminal assignments, and departure times for other Sabre airlines in addition to the host carrier.	
 
 	(n)	The Passenger Information List provides a final list of information used by the flight crew, which contains a list of names and seat numbers of all accommodated first class passengers, a comments field that identifies passengers with special service requests, and members of elite mileage status. Provides ground personnel information and contact numbers, identifies smoking rows and number of meals originally catered for the flight. It also contains a list of all passengers on standby status regardless of whether or not they were accommodated.	
 
 	(o)	Automated Excess Baggage automates calculation and collection of excess baggage fees. Boarding pass issuance is inhibited until the fees are collected or overridden by the agent. Excess Baggage Report is also included.	
 
3.2	EDIFACT Thru Check-In	
 
 	(a)	The EDIFACT Thru Check-in (ETCI) function provides the ability to check-in passengers on other airlines with whom the host carrier has an agreement. Agents can issue and/or reissue boarding passes for an other airline (OA) connection. Additionally, agents can display the OA seat map, change OA seat assignments, transmit manual bag tag edits to the OA for bag security purposes, send Special Service Request (SSR) information directly to the OA as a Passenger Manifest Item (PMF) item and can also display passenger lists.	
 
4.	SABRESONIC® WEB	
Three (3) additional storefronts
Sabre will host a Site for Customer. For purposes of this Work Order, a “Site” means the set of World Wide Web pages hosted by Sabre through which a customer of Customer utilizing the Site may access the Customer’s Reservation data via SabreSonic Web software with incorporated product features set forth in this Work Order. The term “Site” shall include all sites and sub sites.
 
4.1	SabreSonic® Web Functionality	
 
 	(a)	Air Flexibility. User can select a number of options when making travel plans:	
 
 	(i)	Flexible (dates and times are flexible)	
 
 	(ii)	Semi-Flexible (dates are firm but times are flexible)	
 
 	(iii)	Non-Flexible (dates and times are firm)	
 
 	(iv)	Multiple destination	

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 	(b)	Fare Led Pricing. Users who choose the flexible path can select an air itinerary based upon availability for their selected dates or, if they are unavailable, select from available alternate dates for their itinerary.	
 
 	(c)	Corporate Bookings. The SabreSonic Web tool can also be used as a corporate travel booking site for users. With this feature, a user with a Corporate Discount code in their user profile identifies whether they want to make a personal or corporate booking upon commencing the booking process. If the user identifies that they want to make a corporate travel booking, then the system will apply the corporate discount as defined by the CAT25 filing that the Customer has made for the relevant corporation.	
 
 	(d)	Negotiated Pricing. Published fares, negotiated and contract bulk fares filed via ATPCO as well as manually discounted fares can be utilized.	
 
 	(e)	Passenger Types. Adult, Children, Infants with no seat, Infants with seats, Youth, Student, Senior Citizen, and Military fares are available for use.	
 
 	(f)	Class of Service. First, Business, and Economy class of service can be offered.	
 
 	(g)	Guest Login. A user may log into the SabreSonic Web application using their user ID or they may log in as a Guest.	
 
 	(h)	Language. Customer can select their Web site’s language to be in up to twelve existing languages:	
 
 	(i)	American English	
 
 	(ii)	Arabic	
 
 	(iii)	French	
 
 	(iv)	German	
 
 	(v)	Italian	
 
 	(vi)	Japanese	
 
 	(vii)	Portuguese	
 
 	(viii)	Simplified Chinese	
 
 	(ix)	Spanish	
 
 	(x)	Swedish	
 
 	(xi)	Traditional Chinese	
 
 	(xii)	UK English	
 
 	(i)	Users can change their language preference dynamically within the customers booking engine at any time.	
 
 	(j)	Currency. Users can select a currency conversion feature to convert a selected fare/rate to the currency of their choosing.	
 
 	(k)	E-mail confirmation. Users receive an e-mail message after they create a profile, complete a new reservation, or change a reservation in the preferred language established in their profile. If provided, the e-mail address is automatically inserted into the Remarks section of the PNR.	
 
 	(l)	Multiple Payment Options. User payment options are credit card, debit card (PIN-less transactions), invoice or pay-at-retail location(s) cash in airports	
 
 	(m)	Multiple Delivery Options. Customer can offer validated electronic ticketing, pick up at customer locations. Separate addresses can be entered for billing	
 
 	(n)	Delivery Fee Options. Customer can customize the booking engine to charge delivery fees for paper tickets sent to their users. Via email	

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 	(o)	Processing Fee Options. Customer can customize their Web site to charge processing fees for new reservations made by their users.	
 
 	(p)	Member Profile. Users can input their personal travel preferences. The profile stores basic user information and preferences that are used for processing air, car or hotel reservations. Users can edit their profile at any time. Customer can configure whether credit card details are optional or mandatory.	
 
 	(q)	Password Reminder. Registered Web site users/members who forgot their password can follow a link from the customer’s Member Login page to:	
 
 	(i)	Receive their password by e-mail or	
 
 	(ii)	Answer a password reminder question and the user/member is logged into the site.	
 
 	(r)	Credit Card Validation. Users can input their credit card information into their member profile or upon booking a reservation. The booking engine performs a “checksum” validation of the credit card number upon confirmation of the booking. SabreSonic Web can also provide additional security via the Credit Card Security code feature, provided the Credit Suite has been activated by the Customer.	
 
 	(s)	Flight Information. Enables users to check gate and flight arrival and departure information.	
 
 	(t)	Flight Schedules. Flight arrival and departure schedule information is presented to users in a timetable format.	
 
 	(u)	Cancel/View Reservations. Users are provided with a “My Reservations” feature that can be used to view or change their future itineraries. Historical reservations details are also available for viewing.	
 
 	(v)	An upcoming release of SabreSonic Web will also support exchanges of booked itineraries for personal travel. This feature will be available provided that the Customer has implemented Sabre’s Automated Exchange Suite.	
 
 	(w)	Seat Maps. The Customer can enable graphical, interactive seat maps from which the user can select a specific seat assignment after PNR is created. Based on the airplane configuration	
 
 	(x)	Shopping Cart. Users can shop for air travel and place their selection in a “shopping cart” prior to purchase. This stage in the booking process is optional and can be disabled. Other things can be put in the shopping cart related or not related to air travel	
 
 	(y)	Instant Ticketing. SabreSonic Web provides the ability to automate the fulfillment process for E-ticketing eligible PNRs. This feature requires the Sabre Credit Card Authorization module to be activated. Eligible PNRs are also the ones that are paid in retail stores 48hrs later of the reservation.	
 
 	(z)	Miscellaneous Credit Cards. Customer has the option to add up to 5 miscellaneous credit cards. Visa, MasterCard, Amex, Corporate, UATP, for pesos and USD and also the ability to have it in installments (3, 6 months)	
 
 	(aa)	Main Menu Bypass. This allows users to have access via buttons on the customer home page to the “request” air providing them with extremely quick access to shop and book travel.	
 
4.2	Site Manager Website Configuration Options	
 
 	(a)	Logo Branding. Customer can display their logo on their Web site.	
 
 	(b)	Color. The customer can select one of 15 pre-defined color themes, or they can individually define the color parameters for certain GUI elements. Additionally, Customer can upload cascading style sheets for booking engine look and feel.	
 
 	(c)	Business Information. Customers can display their business’ name, address, telephone numbers, e-mail, and hours of operation as page footer on all pages.	

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 	(d)	Banner Advertisement. Two banner spaces are available per section (four sections total) that can be configured by the customer. The customer can provide gif and hyperlink per each banner space.	
 
 	(e)	Hold And Purchase Itinerary. Enables users to hold a booking online and then subsequently purchase travel from the customer’s office or Web site within a specified time period configurable by the customer. Or payment in retail stores	
 
 	(f)	Additional URL’s. Customer may enable five additional URL’s that can be accessed from the SabreSonic Web menu list. Many domains will forward to our Customer home page.	
 
 	(g)	Booking change Fee. This provides the ability to charge change charges for a multiple type reservation and determine the associated fee with each type.	
 
 	(h)	Website Traffic Reporting Tool. Access to Website traffic reports is available via 3rd party vendors such as WebSideStory’s Hit Box, Net Iqs WebTrends and Nedstat’s Nedstat Pro and Sitestat We need OK to put tags on pages for another vendor if necessary. Are this reports included in the quote?. Can we get a demo URL to see what kind of reports they generate? Can we link to emarketing strategies?	
 
 	(i)	http://www.hitboxenterprise.com/	
 
 	(ii)	http://www.Webtrendslive.com/enterprise_default.htm	
 
 	(iii)	http://www.nedstat.com/	
 
 	(iv)	KIOSK CHECK-IN	
 
4.3	Initiate Check In with the following:	
 
 	(a)	Magnetic card swipe. Application will support ATB2 ticket, Credit Card or Frequent Flyer Card in standard Visa/MasterCard CC format.	
 
 	(b)	Record Locator. Match on Last Name	
 
 	(c)	Flight #. Match on First and Last Name	
 
 	(d)	Destination City. Match on First and Last Name	
 
 	(e)	Check-in for single, multiple name records. Up to 7 in reservation	
 
 	(f)	Process up to three segments.	
 
 	(g)	Process for duplicate PNRs. Info card will be generated (same as similar names)	
 
 	(h)	Exit option on every screen. Buttons will be consistent	
 
 	(i)	Display seat map, allow for seat selection and seat changes. Will auto assign if not selected by passenger	
 
 	(j)	Identify undesirable seats on the seat map. Seats by exits, etc.	
 
 	(k)	Seat selection origin and connecting flight	
 
 	(l)	Exit row seating – provide disclaimer. Need Customer text for disclaimer	
 
 	(m)	Allow frequent flyer data entry	
 
4.4	Boarding Pass /Bag Tag Print functionality	
 
 	(a)	Bar Code on boarding pass. IATA BCBP compliant	

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 	(b)	Print boarding pass for origin and connecting flight, passenger name, FFP number, seat, departure and destination city	
 
 	(c)	Print dept city and time plus arrival city, time	
 
 	(d)	Print additional information card. For example, Lounge Invitation (if applicable)	
 
 	(e)	Restrict to maximum number of bags at check in. If more than 3, see agent prompt	
 
 	(f)	Ability to turn off bag function. Configurable by unit	
 
 	(g)	CUSS Compliant. Requirement for standard installation	
 
 	(h)	Same Day Return Check-in	
 
 	(i)	EDIFACT Through Check-In. If enabled in Host	
 
5.	MOBILE CHECK IN	
The SabreSonic Check-in Mobile Check-in application will enable passengers to perform check-in functions on their mobile phone and wireless devices.
The goal of this project is to provide a smooth, seamless, simple and easily understood process flow for passengers utilizing Mobile devices to check-in for a flight departing today or tomorrow. Through a series of screens, the passenger will be prompted through the ability to:
 
 	(a)	Indicate they desire to check-in	
 
 	(b)	Input required data	
 
 	(i)	Flight number	
 
 	(ii)	Departure city or airport code	
 
 	(iii)	Last name, first name	
 
 	(iv)	Record Locator (Sabre or Other GDS)	
 
 	(c)	Respond with name(s) list, or single name match for party of 1	
 
 	(i)	User will select name(s) from list	
 
 	(ii)	User will select Gender Type (only ACSI)	
 
 	(iii)	Display Itinerary in subsequent page.	
 
 	(iv)	Option to Add FF Number to the PNR.	
 
 	(v)	Option to Add APIS data for International Flights	
 
 	(vi)	Display seat map for subsequent seat selection	
 
 	(d)	Respond with ‘check-in successful’	
 
 	(e)	Display Boarding Pass Page with 2D barcode	
 
 	(f)	Option to Save the Boarding Pass on the Mobile as device Image.	
 
 	(g)	Option to Email the Boarding Pass	
 
6.	ROVING AGENT CHECK IN	
The SabreSonic Check-in Roving Agent Check-in module is a web-based airport check-in application that employs a mobile, hand-held PDA device and printer, HTML browser-based software and connectivity to an

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airline host partition. This module provides airport staff with mobility and flexibility to move from behind gate and ticket counters to assist customers with check-in and other flight-related processes. Key functionality includes:
 
 	(a)	Secure log-in with agent id and password	
 
 	(b)	Access to Customer flight information, including: Flight status retrieval (gate, ETA, ETD)	
 
 	(c)	Domestic Flight check-in, including:	
 
 	(i)	Single, Multiple passenger check-in by PNR lookup (up to 9 passengers in the same PNR and 3 segments)	
 
 	(ii)	Similar names list display and check-in (based on first letter of passenger last name and flight number)	
 
 	(iii)	Seat map display and Seat selection for the first segment	
 
 	(iv)	Boarding pass issuance (thermal printer paper, bar-coded boarding pass). Print branded fare and fare class. Also should be able to print text configurable to Customer	
 
 	(d)	Other functions include	
 
 	(i)	Add FF number functionality	
 
 	(ii)	Statistics	
 
 	(iii)	Bagtag Printing to host addressable printer	
 
 	(iv)	Re-print of thermal paper boarding pass by selection of passenger at passenger details display	
 
 	(v)	Ability to offload a passenger	
 
7.	WEB CHECK IN	
 
7.1	Web Check-In Application	
 
 	(a)	Airline branding. Per Customer requirements (header, footer, Customer verbiage, colors, home web page link, font size, modify buttons per Customer requirements)	
 
 	(b)	Integration with SabreSonic Web. Where applicable	
 
 	(c)	Data Capture for transaction logging. Departure Time, Record locator line to identify booking source	
 
 	(d)	Initiate check-in with the following:	
 
 	(i)	Passenger Name, Flight #, Departure City, First and Last Name, or	
 
 	(ii)	Passenger Name, Record Locator, Match on RLOC, or	
 
 	(iii)	Frequent Flyer Number, Match on FFP#, VCR	
 
 	(e)	Should be able to sell rows when defined that (for example) the exit row is $X more if you choose that seat. Cabins must be defined and could have different prices for a window seat that a middle one.	
 
 	(f)	Should be able to sell some ancillaries (before printing pass) online using credit cards	
 
 	(g)	The boarding pass (html) should be able to be configurable by Customer to make changes	
 
 	(h)	Webcki could be enable for some routes but not necessary all. This should be configurable by Customer (defined by airports, by international/national flights, etc)	

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7.2	Check-in Parameters	
 
 	(a)	Flight window configuration. Normally set for 24 hrs – 90 minutes	
 
 	(b)	Display seat map. Disallow seat selection for 1st row of seat map	
 
 	(c)	Identify children & infants. Inhibit passenger check-in with PLUS INF	
 
 	(d)	Check-in for single and multiple name records. Up to 7 in reservation (based on screen size and presentation format)	
 
 	(e)	Process up to three segments	
 
 	(f)	Process for duplicate PNRs. Info card will be generated (same as similar names)	
 
 	(g)	Identify open seats, allow seat changes	
 
 	(h)	Seat selection origin and connecting flight	
 
 	(i)	Single/multiple name records	
 
 	(j)	Exit row seating – provide disclaimer. Need Customer text for disclaimer	
 
 	(k)	Same day return check-in. According to system, Customer parameters	
 
7.3	Boarding Pass Print Parameters	
 
 	(a)	Print e-ticket # on boarding pass. Per Customer requirements	
 
 	(b)	Print carrier code on boarding pass	
 
 	(c)	IATA BCBP Bar Code on boarding pass	
 
 	(d)	Print boarding pass for origin, connecting flights	
 
 	(e)	Print customer name, seat number	
 
 	(f)	Print branded fare and fare class	
 
 	(g)	Print text configurable by Customer	
 
8.	SABRE® AGENCY ACTIVITY	
The Agency Activity system is composed of two main modules. The Customer Access module provides access to account information by corporations. The Airline Administration module provides access to customer data and program rules by customer service agents and marketing analysts.
 
8.1	Customer Access Module	
The Customer Access module is offered as a multi-language web site that is branded with the look and feel of your airline’s web site. With secure account access and a user-friendly interface, the Customer Access module provides the following features:
 
 	(a)	Enrollment. Corporate enrolment can be direct or by invitation. A corporation is defined as either a business or travel agency. The enrolment pages can be offered to the end user in their preferred language and communicates the terms and conditions of the program.	

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 	(b)	Profiles. The profile contains the corporation’s, associated travel agencies and account administrator’s details. Data collected about the company can be mandatory or optional. Information can be changed by the user at any time once they have logged in.	
 
 	(c)	Account Statements. These monthly statements provide details of transactions, both accrual and redemption, in an easy-to-read layout. Clickable links provide detailed transactional information.	
 
 	(d)	Program Feedback. ¬Users can provide feedback and ask questions about the program via two links. Contact Us and the Feedback Form let users interact with the airline, if desired, in an easy-to-use online format, helping to reduce calls to the airline customer care center.	
 
 	(e)	Customer Touch Points. A number of options are available that let you communicate with your customers either through rules that trigger an e-mail or via the e-mail tool that enables you to send emails to a group of users or all users keeping them informed of new program features or other marketing information.	
 
8.2	Airline Administration Module	
The Airline Administration module consists of six sub-modules.
 
 	(a)	Translation. The translation tool enables airlines to dynamically change the text on the Web site to the chosen language. You can input text in the languages presented to your users differing per market or use the entered default text in all markets. The translation tool supports double-byte characters and non-Western languages.	
 
 	(b)	Multi Level Security Access. This sub-module enables airlines to control access to the administration module on a per tool basis. The tool let you provide overall access or access to just one tool within the administration GUI. This allows the airline to grant access to various site functionality based on the needs of different groups within the airline, such as reporting or the ability to update text on the Web site without allowing access to all of the tools.	
 
 	(c)	Promotions. This set of tools provides the ability to set up promotions such as a bonus for users when they join the program based on travel information such as class of travel, date of travel or origin and destination. Promotion rules can be set within each tool, and each promotion can be offered in all or specific markets.	
 
 	(d)	Revenue Growth. This sub-module provides the airline with the ability to set revenue growth targets either by market or corporation. Additional accrual can apply if target levels are reached.	
 
 	(e)	Account Administration. This sub-module provides airlines with the ability to log into an account in read-only mode to assist the end user, add/deduct credits to an account and view profile information and a list of sold tickets associated with the selected account. Agency account configurations such as commission and tax on commission levels, whether credit is extended or not and the credit limit, credit card payment only details and the GSA (general sales agent) associated to an agency.	
 
 	(f)	Credit Limits – the airline allocates a credit limit to the agency and once the credit limit is reached no further sales can be made where the agency is using a distribution channel that has real time integration. The airline is alerted when an agency reaches their credit limit. The agency is alerted when they are within a % of using their available credit. An airline would typically set the credit limit in line with a financial guarantee that they have in place with the agency. On an agreed timetable the statement will generate to the account in the form of an invoice for payment to the airline.	
 
 	(g)	Pre paid accounts – if the currency is monetary, funds can be deposited in a travel agency account when the agency makes a payment to the airline. Sales are then decremented against that prepayment. Both the agency and the airline are advised when the agency is with a % of using all available funds. This allows an airline the ability to receive an upfront payment and deposit those funds for future purchases.	
 
 	(h)	Credit card – transactions completed by credit card (airline must be the merchant on the card) must be settled through the airlines credit card vendor. However the system allows tracking of the sale and calculates the commission owed to the agency by the airline.	

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 	(i)	Direct Communications. This email module allows the airline to send bulk or individual marketing or program e-mails to agencies or corporations based on selected criteria. To begin with this tool is only for sending the confirmation of the reservation, recommendation for travel, conditions, etc. Email marketing is currently handled in another tool.	
 
 	(j)	Reports. The report sub-module offers the ability to run reports based on all of the information gathered within the program.	
 
 	(i)	Liability Report – This report provides the airline with current account balances for agencies based on a given date.	
 
 	(ii)	Manual Transaction Report – This report provides the airline with a detailed list of all of the airline agent instigated manual transactions, both debit and credit, by airline agent or account for a specified date range.	
 
 	(iii)	Refund Report – Specific information on refunds is available via this report.	
 
 	(iv)	Daily Transactions Report – provides a report of all the account transactions processed for a 24 hour period	
 
 	(v)	End of Reporting Period Report – provides a report by account for the billing period that shows the revenue generated commissions and tax on commissions and net amount due to the airline or agency.	
 
8.3	System Interfaces	
 
 	(a)	Web Services – These services interact with the Agency Activity system and provide the airline with the ability to connect other applications to the data.	
 
 	(i)	Create Account	
 
 	(ii)	Update Account profile	
 
 	(iii)	Balance Request	
 
 	(iv)	Hold Funds	
 
 	(v)	Purchase Transaction	
 
 	(vi)	Refund Transaction	
 
 	(vii)	Void Transaction	
 
 	(b)	The web services is not only for agencies. We use it also for integrators (for vacation packages)	
 
 	(c)	In web services we need the selling process in fare families and multicurrency with different payment types (credit card, credit of the organization, and payment in retail stores)	
 
 	(d)	To access the web services the partner of Customer will need a VPN to our network and from there access the web services	
 
 	(e)	We need the change process in this distribution method.	
 
 	(f)	We need to identify sales in web services in a report	
 
 	(g)	Data Import and Export – The Agency Activity system collects the airlines output file, GDS files or BSP file via FTP on an agreed timetable from daily to monthly, depending on requirements, and processes the batch file to the agency accounts.	
 
 	(i)	Sales Revenue data import processes the transactions received based on a sale. Rebates or commission are calculated on the ticket sale or refund.	
 
 	(ii)	Payment data import processes the payment transactions for an account.	
 
 	(iii)	Balanced HOT file is produced and sent to the airlines FTP server for upload to the airlines Revenue Accounting system.	
 
 	(iv)	Profile extract, in IATA layout, is sent to the airlines FTP server for upload to the Revenue Accounting system. The Daily file contains incremental updates and the fortnightly file contains all profile data.	

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9.	SABRE® CORPORATE LOYALTY	
The Corporate Loyalty system is composed of two main modules. The Customer Access module provides access to account information by corporations. The Airline Administration module provides access to customer data and program rules by customer service agents and marketing analysts.
 
9.1	Customer Access Module	
The Customer Access module is offered as a multi-language web site that is branded with the look and feel of your airline’s web site. With secure account access and a user-friendly interface, the Customer Access module provides the following features:
 
 	(a)	Enrollment. Corporate enrolment can be direct or by invitation. A corporation is defined as either a business or travel agency. The enrolment pages can be offered to the end user in their preferred language and communicates the terms and conditions of the program.	
 
 	(b)	Profiles. The profile contains the corporation’s, associated travel agencies and account administrator’s details. Data collected about the company can be mandatory or optional. Information can be changed by the user at any time once they have logged in.	
 
 	(c)	Account Statements. These monthly statements provide details of transactions, both accrual and redemption, in an easy-to-read layout. Clickable links provide detailed transactional information.	
 
 	(d)	Award Redemption . Approved users are able to make redemptions based on the awards that an airline offers. Flights, upgrades, vouchers and partner offerings are all possibilities. A variety of fulfillment options to match the award offerings include online flight redemption via SabreSonic™ Web, eCertificates, third-party vendors or call center integration. Users can choose the award that provides the best value and suits their needs.	
 
 	(e)	Program Feedback. ¬Users can provide feedback and ask questions about the program via two links. Contact Us and the Feedback Form let users interact with the airline, if desired, in an easy-to-use online format, helping to reduce calls to the airline customer care center.	
 
 	(f)	Customer Touch Points. A number of options are available that let you communicate with your customers either through rules that trigger an e-mail or via the e-mail tool that enables you to send emails to a group of users or all users keeping them informed of new program features or other marketing information.	
 
9.2	Airline Administration Module	
The Airline Administration module consists of six sub-modules.
 
 	(a)	Translation. The translation tool enables airlines to dynamically change the text on the Web site to the chosen language. You can input text in the languages presented to your users differing per market or use the entered default text in all markets. The translation tool supports double-byte characters and non-Western languages.	
 
 	(b)	Multi Level Security Access. This sub-module enables airlines to control access to the administration module on a per tool basis. The tool let you provide overall access or access to just one tool within the administration GUI. This allows the airline to grant access to various site functionality based on the needs of different groups within the airline, such as reporting or the ability to update text on the Web site without allowing access to all of the tools.	
 
 	(c)	Promotions. This set of tools provides the ability to set up promotions such as a bonus for users when they join the program based on travel information such as class of travel, date of travel or origin and destination. Promotion rules can be set within each tool, and each promotion can be offered in all or specific markets.	

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 	(d)	Revenue Growth. This sub-module provides the airline with the ability to set revenue growth targets either by market or corporation. Additional accrual can apply if target levels are reached.	
 
 	(e)	Redemptions. This module allows for the setup of the awards being offered. Select the category, add a picture if needed and nominate the value required to redeem the award. Awards can be offered in all markets, or you can select the markets in which a particular award is offered, including setting different redemption levels per market.	
 
 	(f)	Account Administration. This module provides airlines with the ability to log into an account in read-only mode to assist the end user, add/deduct credits to an account and view profile information and a list of flown tickets associated with the selected account. The Outbound Email Tool lets the airline send bulk e-mails to program members based on selected criteria.	
 
 	(g)	Direct Communications. This eMail module allows the airline to send bulk or individual marketing or program e-mails to agencies or corporations based on selected criteria. The initial use will be for sending the confirmation email. Email marketing is used with a specialialized tool	
 
 	(h)	Pre-Paid Accounts. If the currency in an account is monetary, funds can be put in a travel agency or corporate account using this module. This allows an airline the ability to receive an upfront payment and deposit those funds for future purchases.	
 
 	(i)	Reports. The report module offers the ability to run reports based on all of the information gathered within the program.	
 
 	(i)	Survey Results – This report provides an overview of the answers to the survey questions per market asked by the airline during the enrollment process.	
 
 	(ii)	Liability Report – This report provides the airline with current account balances for corporations based on a given date.	
 
 	(iii)	Manual Transaction Report – This report provides the airline with a detailed list of all of the airline agent instigated manual transactions, both debit and credit, by airline agent for a specified date range.	
 
 	(iv)	Credits Report – With this tool, you can run a report that considers the overall accrual of program currency either across the entire program, by market or by corporation. The report can be queried on different groupings to provide snapshots based on profile information.	
 
 	(v)	Ticket Report – Specific accrual of flown tickets are viewable through this report. Reports can be run based on classes of travel, city pairs or bonus accruals based on the information captured for the net flown revenue of the company.	
 
 	(vi)	Debits Report – This report allows for view of redemptions made by corporations and manual debits made by airline agents.	
 
 	(vii)	Refund Report – Specific information on refunds – available only when integration with SabreSonic Web – is available on this report.	
 
9.3	System Interfaces	
 
 	(a)	Corporate Loyalty Web Services. These services interact with the Corporate Loyalty system and provide the airline with flexibility to integrate with their internal systems	
 
 	(b)	Call Center Module. This module enables award-redemption interaction with your call center. Redemptions are placed on queue within a Corporate Loyalty GUI, and the call center staff can action their designated queue. Built-in supervisor monitoring and Service Level Agreement performance provide additional monitoring of service levels.	

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 	(c)	SabreSonic Web and Interact. This product provides integration for online award redemption. Flights can be booked and paid for with corporate credits	
 
 	(d)	Revenue Data Import. The Corporate Loyalty system automatically picks up the airlines output file of flown revenue on an agreed timetable from daily to monthly, depending on requirements, and processes the flown revenue to the corporation or agency accounts	
 
9.4	Host Frequent Traveler	
 
 	(a)	The Passenger List (manifest) displays a frequent flyer name list, the record locator and any top tier members for all SabreSonic hosted frequent flyers on a specified flight and date.	
 
 	(b)	The Banners and Tags in Passenger Name Record (PNR) function displays headers at the top of the PNR which identify frequent traveler top tier members. In addition, a 3 character “tag” is displayed in the frequent flyer (FF) field of the PNR designating the specific tier and is used for internal processing to recognize tier status for functions such as pre-reserved seat blocking, waitlist processing or automated upgrade and redemption priority, print frequent traveler number and top tier tag on the boarding pass.	
 
 	(c)	Block Adjacent Pre-reserved Seats (PRS) Provides the ability to block the adjacent seat or row next to a frequent traveler member when assigning advance pre-reserved seats.	
 
 	(d)	The FQTV Number Validation Algorithm function is performed when the frequent flyer number is entered into the Passenger Name Record (PNR) or while creating a Frequent Traveler Profile. This algorithm is either a ‘MOD 7’ or ‘MOD 10’ check digit routine that ensures the frequent flyer number entered is valid. An error message is displayed when an incorrect number is entered.	
 
 	(e)	The Name/Number Match function matches the name on the frequent flyer account against the name in the passenger name record (PNR) when the number is added to the PNR. An error message is displayed if the last name and first initial of the name in the PNR does not match the name on the frequent flyer account.	
 
 	(f)	The Frequent Traveler Post Departure Off-line File contains frequent flyer and flight segment data extracted from Passenger Name Records (PNRs). The file contains data for each flown segment and all actions taken during post departure processing. A Frequent Flyer Off-line File Record equals one line of data in the file. Each record is one passenger on one flight plus a record total line at the end of each file.	
 
 	(g)	The Name Search function allows agents to search the database for the customer’s frequent flyer number by name. A file transfer process is required to populate the Frequent Traveler (FQTV) database for this functionality.	
 
 	(h)	The Restricted Line Display function displays additional account information such as the frequent flyer’s enrollment date, number of miles in account, the last award issued and any lounge memberships.	
 
 	(i)	Instant Enrollment functionality provides convenience to a new member who enrolls in the airline’s frequent flyer program over the phone or during check-in, so the new member can begin accruing mileage immediately, without filling out an enrollment form	
 
 	(j)	The Automated Upgrade functionality allows airlines to define their unique business rules to be used to automatically process upgrade requests for frequent traveler members.	
 
 	(k)	Re-accommodation functionality allows the airline to manage the re-accommodation process based on tier level information of the traveler.	
 
 	(l)	Waitlist Clearance gives the airline the ability to manage the order of processing the waitlist based on tier level information of the traveler.	

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10.	SABRE® VIRTUALLY THERE®	
Sabre® Virtually There™ provides a personal travel web site with real-time itinerary, travel information and destination content for the carrier’s travelers.
Features include: Personal travel plans available 24 hours a day, 7 days a week; Online travel documents include current itinerary and eTicket Receipts; Airline branding displayed on site and provides the ability to link to the airline Web site; Automated delivery of the itinerary and other travel information through a hyperlink in an e-mail message. Should also include weather service to the place the client travels, other content that could be added and maintained by Customer. Airport information and destination information. Also we could add banners depending of client itinerary (if going to Cancun a banner of Cancun restaurant or hotels).
Itinerary should be dynamic, this means that we could send an itinerary with different banners depending on the customer, origin and/or destination. Also based on language.
 
11.	SABRE® ENTERPRISE MOBILE SERVICES	
Sabre® Enterprise Mobile Services leverages the direct access to real-time, Customer traveler itinerary information which is hosted by Sabre in addition to the Sabre Enterprise Mobile Services (EMS) messaging platform.
Travelers will have messaging coverage globally as the EMS platform includes over 600 wireless carrier providers worldwide to ensure that real-time, SMS messaging to traveler’s mobile devices is accurate and timely.
Sabre® Enterprise Mobile Services includes:
 
 	(a)	Real-time monitoring of traveler itineraries.	
 
 	(b)	Trip reminder messaging in advance of flight departure.	
 
 	(c)	Flexibility for travelers to choose which flight interruptions they wish to be alerted for. Options include flight delays, flight cancellations and terminal/gate changes.	
Traveler has ability to choose whether they wish to receive a SMS text message or email or both for their flight notification alerts.
This needs to have the ability to charge for a service (ex: SMS) and only those who have paid they get the service.
 
12.	REVENUE INTEGRITY MANAGER	
System(s) provided under the Work Order include the following:
The Revenue Integrity product is a hosted solution provided by Sabre to help airlines with flight firming and ensure that seat availability is not wasted. Airlines routinely lose valuable dollars through unnecessary spoilage of seats, caused by expired ticket time limits, duplicate segments in a PNR, etc. as it is a very cumbersome and time consuming task to search for such PNRs.
The Revenue Integrity product provides an automated way to search for undesirable PNRs using data available in our off-host PNR storage warehouse. The advantage of searching on Sabre’s off-host PNR storage warehouse is that host partition access is minimized, thus saving on expensive message count hits.
A user may configure which PNRs are processed and actioned using configurable business rules. The system also provides the capability for the user to status their own particular processes at any time. Status will show the time that the process initiated and completed, as well as the number of PNR’s processed up to that point. The system also provides the capability for users to view their own results data in a report form online via HTML web pages and/or be exporting to MS EXCEL.
Note: Revenue Integrity provides nine (9) of the pre-defined processes (as documented below), which the airline can choose to configure and run via the Command GUI.

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The following is a description of all nine of the current Revenue Integrity pre-defined processes to choose from:
 
 	(a)	Ticket Time Limit Processing. The “Ticketing Time Limit” process aims to minimize the effects of agents who book seats without ticketing the bookings. Agents do this to ‘keep hold’ of a seat. There are a variety of reasons why they might do this. They might do this in good faith because a passenger needs a little bit more time to confirm and pay for the booking. Alternatively, they might do this in bad faith to block off seats on a flight with the expectation that they will be able to sell these seats closer to the date of departure.	
 
 	(b)	Duplicate Segment Processing (in the same PNR). The “Duplicate Segment” process aims to minimize the effects of agents who book multiple segments with the same origin and destination and the same departure date (or a date within 1 day of each other) in the same PNR. Agents might do this to allow a customer to hedge their bets.	
 
 	(c)	Duplicate PNR Processing (across multiple PNRs). The “Duplicate PNR” process aims to minimize the effects of agents who book multiple segments with the same origin and destination and the same departure date (or a date within 1 day of each other) for the same passenger in different PNRs.	
 
 	(d)	Passive Segment Processing. The “Passive Segment” process aims to reduce GDS costs associated with abusive use of passive segments. It should be noted that a segment that is booked as a passive segment results in GDS costs for the airline unless cancelled promptly. Note Pre-requisite: Airlines must have the Passive Segment Notification feature activated in the SabreSonic host system in order to use this Revenue Integrity process.	
 
 	(e)	Fictitious Booking Processing. The “Fictitious Booking Process” aims to minimize the effects of agents who make bookings with closely similar names, fictitious names (Mouse/Mickey, Test, etc). There are normally two sources of fictitious bookings, abusive agents or developers working in the airline industry who are testing their software. Abusive agents create fictitious bookings in order to block off seats on a flight with the expectation that they will be able to sell these seats closer to the date of departure, or to earn GDS credits. Developers often forget to remove fictitious bookings after their testing is complete and are also a source of unnecessarily blocked seated availability. Note: This process requires the Airline to provide a list of any known fictitious names (i.e. names possibly used for testing purposes and / or those names known as frequently used by travel agencies to hold space) and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible fictitious / duplicate names used within PNRs.	
 
 	(f)	Fictitious Ticket Number Processing . The “Fictitious Ticket Number Process” aims to minimize the effects of agents who create bookings and then pretend to ticket them in order to avoid cancellation of the booking after the ticketing time limit. Agents do this to ‘keep hold’ of a seat so that they will be able to sell these seats closer to the date of departure. The “Fictitious Ticket Number” check does a search on a ticket number match against a list that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known fictitious ticket numbers and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible fictitious ticket numbers found in all PNRs.	
 
 	(g)	Special Passenger Processing. The “Special Passenger Process” is used to check for PNRs that contain passengers that the airline wishes to flag at the time of booking. This can include VIP or restricted passengers. The “Special Passenger” check does a search on a name match against the special passenger list(s) that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known “special passenger names” and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to identify a list of PNRs that match known “special passengers” so the airline can then action as needed.	
 
 	(h)	Restricted Credit Card Processing. The “Restricted Credit Card Process” is used to check for PNRs that contain bookings made with a credit card that the airline has restricted. The “Restricted Credit Card” check does a search on credit card numbers against a restricted credit card list that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known restricted credit card numbers and upload that list into the	

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 	Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible matches of PNRs that contain identified restricted credit card numbers	
 
 	(i)	Auto Teletype Reject Message Queue Processing. The “Auto Teletype Reject Queue Process” offers a configurable robotic application to automatically work a vast majority of an airline’s teletype reject messages on a queue. This process allows a set of User-configured rules to be applied to each teletype reject message type. Each TTY message is read as it falls on the carrier-specified queue and is then actioned according to the rules defined by the User. Although 100% of all teletype reject message scenarios cannot be automatically processed, airlines can now automate the processing of a significantly higher percentage of the most common reject scenarios and reduce the amount of resources previously allocated to manually work TTY reject queues.	
 
12.2	Newly Developed Revenue Integrity	
The Revenue Integrity System will include the newly developed Revenue Integrity processes and enhanced process capability upon Customer’s cutover including:
 
 	(a)	Enhancement to the Fictitious Ticketing process. Sabre agrees to enhance the existing Fictitious Ticket Process to contain an “embedded list of known lost and stolen ticket numbers (from ARINC subscription list) and also do automatic comparison with all ticket numbers previously shown as issued in Customer Sabre partition PNRs. Note: Customer must subscribe to ARINC Lost and Stolen Ticket Number data solution.	
 
 	(b)	New Watchlist Fraud Detection Process. The new Revenue Integrity Watchlist Fraud Protection process will be created to augment the Sabre host Watchlist process that matches on name only. The new Revenue Integrity Watchlist Fraud Protection process will work 24 X 7 in addition to the host Watchlist process and will enable the airline to enter additional elements into a Table that will be used to better identify potential scenarios of traveler fraud. A User will enter elements specific to a known traveler name into a Revenue Integrity Table that automatically sends that Table content to Sabre Traveler Data Warehouse to use in search and comparison to return PNRs that match on specific elements. Customer can have the process automatically queue place PNRs to one or multiple queues so that different actions can be taken based on which element(s) is /was matched. Elements used for matching that Customer can input into the Table will include:	
 
 	(i)	Passport number	
 
 	(ii)	Address	
 
 	(iii)	Date of birth	
 
 	(iv)	Email address	
 
 	(v)	Phone number	
 
 	(vi)	Origin and Destination	
 
 	(vii)	Credit card number	
 
 	(viii)	Name	
 
 	(ix)	IP address if known from past or present booking	
 
 	(c)	New Credit Card Fraud Check Process. This new process will work behind the scenes (To be determined if this can be done before ticketing on every ticket or right after issuance on some tickets) – this process will need to read the BIN number on the credit card (first 6 digits of the credit card tells type of credit card and the specific bank that issued the card) and the process will call a table or use a web service to send a message to the specific bank to validate if the card owner did in fact purchase a ticket with this credit card number. Credit Card company will contact card holder and if the bank verifies that the card holder did not purchase the ticket, the process will receive a response (possibly via web service – To be determined) and the process will email a specific airport contact based on the email address Customer provides for all Airport locations to prevent passenger boarding.	

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 	(i)	An additional part of this process needs to support other responses from the Credit Card Company such as notification that the card number in question is approved, declined, reported as stolen / hot, or to pick up the credit card and prevent use.	
 
 	(ii)	Also as part of the new credit card fraud protection capability, this process will include the ability for Customer to set a “credit card charge limit or threshold”. This will enable the system to alert Customer staff when multiple charges on the same day or over a set period of time occur on the same credit card number and exceed a pre-specified dollar amount. Example is to find same credit card charged multiple times and prevent any additional charges once the dollar amount totals XX amount. (I.e. Limit charges to same credit card in a day to no more than USD$4000. (Customer to instruct threshold amount.)	
 
 	(d)	Enhancement to the Duplicate PNR and Duplicate Segment Processes. An enhancement will be completed to enable the process to look for additional elements to determine true duplicate including the addition of using name, credit card number and ticket number and coupon number, and even fake email addresses such as viajes@yahoo.com , viajes@hotmail.com (as an examples) Other example is that this process must have the ability to find and extract all PNRs with the same credit card numbers and different names. Goal is to allow Customer to find PNRs with patterns of duplication when PNRs are booked and / or on day of departure – as close to flight time as possible.	
 
 	(i)	An additional Customer requirement that will be met upon cutover through this process is to allow this process to search and identify “duplicates” on the same day that occur more than FOUR times – such as … find all purchases or “buys” that are made on the same day either by same passenger name, or where same credit card has been used for payment, searching all points of sale.	
 
 	(e)	Auto Teletype Reject Message Queue Processing. The Auto Teletype Reject Queue Process offers a configurable robotic application to automatically work a vast majority of an airline’s teletype reject messages on a queue.	
 
 	(i)	This process allows a set of User-configured rules to be applied to each teletype reject message type. Each TTY message is read as it falls on the carrier-specified queue and is then actioned according to the rules defined by the User. Although 100% of all teletype reject message scenarios cannot be automatically processed, airlines can now automate the processing of a significantly higher percentage of the most common reject scenarios and reduce the amount of resources previously allocated to manually work TTY reject queues.	
In addition, Customer is entitled to the following new processes planned for delivery in 2010 for the entire Revenue Integrity Community including:
 
 	(a)	Group Booking Management Process. The Group Booking Management Process will assist Customer in managing group travel PNRs and enforce group fare and ticketing policies. The new process will allow an Airline to apply group time limits for multiple things such as:	
 
 	(i)	Deposit receipt date (% milestones and full receipt)	
 
 	(ii)	Receipt of Passenger Names	
 
 	(iii)	Messaging to booking source	
 
 	(iv)	Enforcement of group numbers for contracted price	
 
 	(v)	Enforcement of ticketing dates	
Additionally the process will perform checks to review that all passengers within a group are ticketed at the right fare, the number of passengers at that fare meets contract requirements, and audit the actual fare ticketed with that booked.
 
 	(b)	Enhanced Restricted Credit Card process matching. This process is to be enhanced to include the automatic comparison of credit card numbers shown and used in Customer PNRs to those known credit card numbers found on the Industry credit card Blacklist. If credit card number is found to match any black listed numbers (or numbers uploaded into Revenue Integrity by Customer from their own managed lists) then the process will make an entry to inhibit check in and alert specific Customer staff via email and / or queuing of PNR. The process will also need to send a SSR message to the booking source (agency) to “contact airline”. Customer will require the matched traveler to pay cash at the	

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 	airport in order to travel. This process must have the ability to find and extract all PNRs with the same credit card numbers and different names. Customer will have access to this enhanced Restricted Credit Card process upon its release to the Revenue Integrity User Community in 2010.	
 
 	(c)	Waitlist Segment Cancellation Process. The Customer will have access to the new Waitlist Segment Cancellation Process, without additional charge, upon the delivery of this process to the Revenue Integrity User Community in 2010. The process is described as follows:	
 
 	(i)	The new Waitlist Segment Cancellation Process will automate the ability for airlines to identify PNRs earlier on that have waitlisted segments and either work to clear those segments or cancel the waitlisted segments out of the PNR to avoid excessive segment fees. Airlines will have the ability to build rules to find all PNRs with waitlisted segments at specified intervals of time prior to flight time and:	
 
 	(ii)	Cancel waitlist segments at least 72 hours (or at any time interval) before departure	
 
 	(iii)	Track and notify travel agents of unacceptable waitlist practices and alert commercial department of violations for possible fee assessment	
 
 	(iv)	Identify waitlisted segments where clearance is unlikely and cancel to avoid GDS fee	
 
 	(v)	Reduce total waitlist expenses by automatically cancelling all waitlisted segments in all PNRs X days before departure	
 
 	(vi)	Track and report details on all waitlisted segments cancelled	
 
 	(d)	Sabre Real Time Revenue Integrity . As part of our SabreSonic roadmap for Revenue Integrity, Customer will have access to the Real Time Revenue Integrity solution upon its release to the Revenue Integrity User Community. The newly enhanced Real Time Revenue Integrity solution will apply your airline’s process rules, enforce policies, send alerts and take directed actions within minutes after a PNR has been created or modified to protect and maximize revenue right up to flight departure time.	
 
13.	TRAVEL BANK	
The SabreSonic Ticket Travel Bank product includes the following functionality:
 
 	(a)	Create an Individual Travel Bank Account through Interact at RES/ATO/CTO or through SabreSonic Web Booking Engine	
 
 	(i)	upon full or partial exchange with residual amount upon full or partial refund	
 
 	(b)	Create a Corporate Travel Bank Account through SabreSonic Web Booking Engine	
 
 	(i)	upon creation of corporate profile in the system	
 
 	(c)	Credit a Travel Bank Account through Interact at RES/ATO/CTO or through SabreSonic Web Booking Engine interface	
 
 	(i)	upon full or partial exchange with residual amount	
 
 	(ii)	upon full or partial refund	
 
 	(iii)	upon voiding a ticket	
 
 	(iv)	as a result of internal system failure	
 
 	(v)	as a result of a manual adjustment to the account by an airline representative with appropriate security level (i.e. customer service)	
 
 	(d)	Debit a Travel Bank Account through Agent Interface at RES/ATO/CTO or through Sabre Sonic Web	
 
 	(i)	upon ticket issuance	
 
 	(ii)	upon exchange transaction with additional collection	
 
 	(iii)	as a result of internal system failure	
 
 	(iv)	as a result of a manual adjustment to the account by an airline representative with appropriate security level (i.e. customer service)	

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 	(e)	View a Travel Bank Account statement through Sabre Sonic Web – direct link	
 
 	(i)	Available to Individual account owner or corporate administrator	
 
 	(ii)	Available to airline staff with the appropriate security level	
 
 	(f)	Query Travel Bank account balance and business usage rules	
 
 	(i)	upon retrieval of the traveler profile by an airline staff thru Interact	
 
 	(ii)	upon display thru Interact of the FOP page	
 
 	(iii)	upon sign in SabreSonic Web Booking engine by an airline traveler (configurable by carrier)	
 
 	(iv)	upon display thru SabreSonic Web Booking engine of the FOP page	
 
 	(g)	Manage a Travel Bank Account	
 
 	(i)	by the Individual account owner thru SabreSonic Web Booking engine to add/delete additional users to the account	
 
 	(ii)	by the corporate administrator thru SabreSonic Web Booking engine to add/delete/enable/disable association of business traveler to the corporate account	
 
 	(iii)	by the airline staff with appropriate security level thru Travel Bank administration site.	
 
 	(iv)	manual adjustment to an account balance(credit/debit)	
 
 	(v)	change status of an account – active/suspended/closed	
 
 	(vi)	set business usage rules at account level – which of the fare components the account balance can apply	
 
 	(h)	Reporting	
 
 	(i)	upon request by an airline staff with appropriate security level thru Travel Bank administration site	
 
 	(i)	Report Offerings – Instant reporting of liability against customer Travel Bank accounts which include:	
 
 	(i)	Liability Report – provides the balance of available total credits within a market or the balance of each account for a selected date range. Provides the airline with a snapshot of its financial liability	
 
 	(ii)	Credit Expiry Report – provides a report of all the expired credits within a market or by account for selected time frame	
 
 	(iii)	Redemption Report – provides a report of all the debits applied to end-user accounts	
 
 	(iv)	Refund Report – ability to look at the refunds at a market, account or agent level	
 
 	(v)	Admin Manual Transaction Report – provides an overview of the manual transactions at a market, account or airline agent level	

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14.	MERCHANDISING SERVICES	
 
14.1	Branded Fares:	
The SabreSonic® Branded Fares solution provides the capability to create and sell “brands” (a.k.a. fare families) by categorizing different fare classes (a.k.a. Reservation Booking Designator) into a brand with associated attributes. The following modules/features are provided with this option:
 
 	(a)	Sabre Merchandising Manager TM – an online GUI based application that allows the Customer to define which fare classes are mapped to a particular brand and to define which fare basis codes are excluded from a brand. Sabre Merchandising Manager also allows the Customer to define what attributes are associated with the branded fare and then distribute this information as a textual message via a web service.	
 
 	(b)	Enhanced SabreSonic Sell features – include the capability to shop by branded fares. Branded fare shopping is included with Interact and with SabreSonic Web (if included in the Agreement). The SabreSonic Branded Fare shopping service can also be delivered as a web service or integrated with SabreSonic direct sales channels.	
 
 	(c)	Branded Fare Fulfillment features – include the capability to print branded fares on the boarding coupon, within the check-in GUI, and on the passenger manifest	
 
14.2	Ancillary or “ala carte” Sales:	
 
 	(a)	The Ancillary Sales solution provides the Customer the capability to define up to 99 ancillaries. Ancillaries are tracked with airline specified Special Service Requests (SSR’s), which are defined in the SSR Inventory solution, which the Customer can access via an online GUI. The first ancillary covered under this framework is “pay for excess bags” (scheduled for 2Q 2010). Configuration work may be required in SabreSonic direct channels (i.e. SabreSonic Web and Interact) to support the display of new ancillaries, and SabreSonic Check-in work may be required to support fulfillment of new ancillaries. Additional ancillaries will be rolled out as per the SabreSonic CSS roadmap.	
 
14.3	Pay for Preferred Seat:	
The “Pay for Preferred Seat” solution provides the capability to charge for pre-reserving a specific seat. The solution can be configured to charge for pre-reserving at seat at time of booking creation or extending the requirement to charge for reserving a seat through the check-in period.
This option provides additional capabilities in the following modules:
 
 	(a)	SabreSonic Seat Map – an additional seat block (P Block) is used to designate seats that require a fee to pre-reserve. Seat blocks are set by the Customer using the SabreSonic Command GUI. The seat fee can vary by seat type and market.	
 
 	(b)	SabreSonic Inventory – provides a capability to control whether the P Blocked seats can be pre-reserved based on the fare class of the purchased ticket. For example, based on the fare class of the purchased ticket, P Blocked seats can be restricted from selection, pre-reserved for a fee, or pre-reserved at no charge.	
 
 	(c)	SabreSonic Web (if included in the Agreement) – provides the capability to show a seat map and which seats require a fee payment in order to pre-reserve them, as well as showing what the fee amount is. SabreSonic Web also supports the collection and fulfillment of the ancillary fee for pre-reserving the “preferred seat”.	
 
 	(d)	Interact Reservation and Check-in GUI – provides the capability to charge a fee to pre-reserve “preferred seats”, either at time of booking, or at the check-in (if Customer elects to charge for selecting a “preferred seat” during the check-in period). For the seat fees collected at time of booking, an automated robot is provided to handle the fulfillment of the purchase and speed up the booking process. Graphical indicators are used on the Interact availability screen to indicate to the reservation agent which flights have “preferred seats”. Capabilities also exist to override the fees for “preferred seats” and specify a reason for the override.	

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 	(e)	Sabre Virtually There TM – provides additional documentation on the seat information line indicating when a “preferred seat” has been selected, as well as the amount paid for the “preferred seat” on the electronic receipt.	
 
 	(f)	SabreSonic Web Check-in (if included in the Agreement) – provides additional capabilities to prompt the passenger about the existence of “preferred seats” and to collect a fee for “preferred seats” at time of web check-in using a major credit card.	
 
 	(g)	SabreSonic Kiosk Check-in (if included in the Agreement) – provides additional capabilities to prompt the passenger about the existence of “preferred seats” and to collect a fee for “preferred seats” at time of kiosk check-in using a major credit card.	

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15.	SABRE® WEB SERVICES	
The Web Services feature is used to gain access to discrete pieces of travel products or functions so that airlines can build these pieces into their own travel points of sale or applications. Web Services provides a simplified, standard and consistent method of access to the Sabre system infrastructure and travel services giving the airline control to build their own travel application.
The Web Services listed below will be available to Customer immediately. Additional Web Services may be added at a later date.

Sabre Web Services
Service Category / Name	 	Sabre Host Command	 	Services Pricing
Category *	
USG Session Services	 		 		
SessionCloseRQ	 	Not Applicable	 	Not Applicable	
SessionCreateRQ	 	Not Applicable	 	Not Applicable	
SessionValidateRQ	 	Not Applicable	 	Not Applicable	
Air Services	 		 		
AirConnectionPointLLSRQ	 	T*CP-	 	Basic	
AirConnectionTimeLLSRQ	 	T*CT-	 	Basic	
AirSeatCancelLLSRQ	 	4GX	 	Basic	
AirSeatLLSRQ	 	4G	 	Basic	
AirTicketLLSRQ	 	W‡	 	Basic	
BargainFinderPlusLLSRQ	 	WPNI	 	Search	
DisplayAirPriceLLSRQ	 	*PQ	 	Basic	
DisplayPriceQuoteLLSRQ	 	*PQ	 	Basic	
FareLLSRQ	 	FQ	 	Fare	
IMAP_AirSeatMapLLSRQ	 	4G*	 	Basic	
OTA_AirAvailLLSRQ	 	1	 	Basic	
OTA_AirBookLLSRQ	 	JA	 	Basic	
OTA_AirFlifoLLSRQ	 	2	 	Basic	
OTA_AirLowFareSearchLLSRQ	 	JR	 	Search	
OTA_AirPriceLLSRQ	 	WP	 	Fare	
OTA_AirRulesLLSRQ	 	RD	 	Fare	
OTA_AirScheduleLLSRQ	 	S	 	Basic	
OTA_AirSeatMapLLSRQ	 	4G*	 	Basic	

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ShortSellLLSRQ	 	0	 	Basic	
VerifyFlightDetailsLLSRQ	 	V*	 	Basic	
Hotel Services	 		 		
Air Services	 		 		
HotelPropertyDescriptionLLSRQ	 	HOD	 	Basic	
HotelRateDescriptionLLSRQ	 	HRD*	 	Basic	
HotelResModifyLLSRQ	 	HOM	 	Basic	
OTA_HotelAvailLLSRQ	 	HOT	 	Basic	
OTA_HotelResLLSRQ	 	0H	 	Basic	
Vehicle Services	 		 		
OTA_VehAvailRateLLSRQ	 	CF, CQ	 	Basic	
OTA_VehLocDetailLLSRQ	 	CP*	 	Basic	
OTA_VehResLLSRQ	 	0CAR	 	Basic	
VehLocationFinderLLSRQ	 	CLF	 	Basic	
VehLocationListLLSRQ	 	CLL	 	Basic	
VehQuoteLocationListLLSRQ	 	CQL	 	Basic	
VehRateRulesLLSRQ	 	CF*R	 	Basic	
VehResModifyLLSRQ	 	CM	 	Basic	
PNR Services	 		 		
TravelItineraryAddInfoLLSRQ	 	“-”, 9, DK, FF, PE, 6	 	Basic	
AddAccountingLineLLSRQ	 	AAC	 	Basic	
AddRemarkLLSRQ	 	5	 	Basic	
ModifyRemarkLLSRQ	 	5[line number]¤	 	Basic	
SpecialServiceLLSRQ	 	3 or 4 OSI or SSR	 	Basic	
DeleteSpecialServiceLLSRQ	 	3 or 4[line number]¤	 	Basic	
EndTransactionLLSRQ	 	6, E	 	Basic	
IgnoreTransactionLLSRQ	 	I	 	Basic	
OTA_CancelLLSRQ	 	XI	 	Basic	
OTA_TravelItineraryReadLLSRQ	 	JX	 	Basic	

Confidential	  	Page 53	  		

					
TravelItineraryModifyInfoLLSRQ	 	‘¤”	 	Basic	
ResReconfirmLLSRQ	 	0RCF	 	Basic	
MiscSegmentSellLLSRQ	 	0OTH	 	Basic	
Queues Services	 		 		
PersonalQDisplayLLSRQ	 	QS*	 	Basic	
QAccessLLSRQ	 	Q/	 	Basic	
QAnalysisLLSRQ	 	QA/	 	Basic	
QCountLLSRQ	 	QC/	 	Basic	
QMoveLLSRQ	 	QMOV/	 	Basic	
QPlaceLLSRQ	 	QP/	 	Basic	
RestrictedQDisplayLLSRQ	 	QMR/*	 	Basic	
Miscellaneous Services	 		 		
AddressVerificationLLSRQ	 	CK*AV	 	Basic	
ChangeAAALLSRQ	 	AAA	 	Basic	
CreditVerificationLLSRQ	 	CK*IK	 	Basic	
DesignatePrinterLLSRQ	 	W*, GY, PTR/,DS	 	Basic	
DisplayCurrencyLLSRQ	 	DC*CC/CUR	 	Basic	
InvoiceItineraryLLSRQ	 	DIT	 	Basic	
MileageLLSRQ	 	WN	 	Fare	
ProfileAddInfoLLSRQ	 	NB	 	Basic	
ProfileDisplayLLSRQ	 	N*	 	Basic	
ProfileModifyInfoLLSRQ	 	NB¤	 	Basic	
SabreCommandLLSRQ	 	Various host command strings	 	Basic, Fare, or Search	
VendorCodesLLSRQ	 	DU	 	Basic	

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APPENDIX B
PROFESSIONAL SERVICES
 
1.	BUSINESS TRANSFORMATION SERVICES	
In connection with the implementation and cutover of the Systems for Customer, Sabre will provide Customer with consulting services to assist in the orderly transition to the Systems
 
1.1	Description of Transformation Services	
Sabre shall assist Customer in the development of its mutually agreed and formally defined functions related to the deployment of the Systems. Such assistance shall include:
 
 	(a)	Solution Assessment Phase – Sabre shall review Customer’s current procedures and practices in all of the following areas:	
 
 	(i)	Reservations Center – Sales, payments, special services, premium services, flight information and flight change notification	
 
 	(ii)	Reservations Control – Queue processing, waitlist management, re-accommodation and flight firming, inventory control	
 
 	(iii)	Airports Departure Control – Check-in, passenger movement, gate processing and boarding	
 
 	(iv)	Web-site and e-Commerce – Client’s B2C, Client’s B2B, 3rd Party B2C, 3rd Party B2B, tour operators, wholesalers and consolidators	
 
 	(v)	Direct Sales Outlets – Airline sales offices, vacation sales and General Sales Agents	
 
 	(vi)	Global Distribution – Connectivity, presence, performance, and invoice management	
 
 	(vii)	Indirect Sales Outlets – Travel Agencies, tour operators and consolidators	
 
 	(viii)	Interline Management – Special Prorate Agreements, Code-share management, ticketing agreements and Clearinghouse management	
 
 	(ix)	Revenue Quality and Integrity – Booking abuse control, ticketing abuse control and revenue quality management	
 
 	(x)	E-ticketing/Ticketless – Host-based, GDS-based and interline	
 
 	(xi)	Fares Management – Fare class alignment, fares structures, reactive pricing practices and proactive pricing practices	
 
 	(b)	Interactive Pilot Phase. Sabre shall assist Customer with the implementation of the specific improvements to the business procedures and practices, organization structures and measurement practices associated each of the functional areas reviewed in the Solution Assessment.	
 
 	(c)	Solution Adoption Phase . Sabre shall assist Customer with the introduction of the Systems and help implement the Improvements that Customer elects to incorporate.	
 
 	(d)	Transition Phase . Sabre shall transfer all management and control functions associated with the Improvements over to Customer in a controlled manner in order to help the Improvements to deliver the expected benefits.	
 
1.2	Deliverables	
Each of the deliverables set forth below will be represented by either a document prepared by Sabre and provided to Customer or by the performance of specific activities. Each of the scope areas outlined in the section above has its own specific deliverables:
 
 	(a)	Solution Assessment Deliverables :	
 
 	(i)	Solution Assessment – a document in presentation format detailing the Customer’s current organization structures, procedures and practices associated with each of the areas detailed in Solution Assessment above.	

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 	(ii)	Recommended Improvements – a document in presentation format detailing recommended changes to the functional area’s organization structures, procedures and practices of Customer for the areas detailed in the Solution Assessment above (the “Recommended Improvements”).	
 
 	(iii)	Benefits Analysis – a document in presentation format detailing the anticipated benefits associated with implementing of the Recommended Improvements.	
 
 	(iv)	Master Project Plan – a plan of all tasks, milestones and assignments associated with the implementation of the Recommended Improvements in order to achieve the expected benefits illustrated by the deliverable described in Benefits analysis above.	
 
 	(b)	Interactive Pilot Phase Deliverables:	
 
 	(i)	Functional Improvements – preparation of Recommended Improvements as defined above for each of the scope areas associated with the Solution Assessment.	
 
 	(ii)	Organization Structures – assistance with the establishment of recommended organization structures associated with each scope area identified in the Solution Assessment. Such organization structures shall include: a) recommended organization chart, and b) recommended roles and responsibilities for key positions on the organization chart.	
 
 	(iii)	Procedures and Practices – recommended procedures and practices for each of the areas of scope detailed in the Solution Assessment above.	
 
 	(iv)	Key Performance Indicators – recommended KPIs for each areas of scope detailed in the Solution Assessment above.	
 
 	(v)	Standard Performance Reports – creation of recommended standard reports for the KPIs including: a) formats of the reports, b) instructions for preparation of the reports, c) recommended frequency of report creation, d) recommended approach to distribution of the reports.	
 
 	(c)	Solution Adoption Phase Deliverables:	
 
 	(i)	Improvements Implementation – implementation of the agreed Recommended Improvements for the scope areas associated with the Solution Assessment	
 
 	(ii)	Business Training – training of designated Customer personnel on each of the following: a) implementation of the organization structures developed above, b) implementation of the procedures and practices above, c) implementation of the KPIs developed above, and d) implementation of standard reports developed above.	
 
 	(d)	Transition Phase Deliverables:	
 
 	(i)	Implementation Assistance – assistance with the cutover to production of the Systems as well as concurrent implementation of the organization structures, procedures and practices and KPIs	
 
 	(ii)	Performance Monitoring – review of the on-going operation of Customer’s performance under the new structures, procedures and practices.	

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2.	DESCRIPTION OF CODESHARE SERVICES	
Sabre consultants shall assist Customer to prepare for implementation of Codeshares, herein after termed “Consulting Services”:
 
2.1	Fundamentals	
 
 	(a)	Sabre shall perform an executive level seminar titled Codeshare Fundamentals. Key activities include:	
 
 	(i)	Sabre will lead a discussion on the types of alliances and the opportunities and challenges of each alliance type.	
 
 	(ii)	Sabre will provide an overview of each of the seminar sessions to be provided in section 2.2 and lead a discussion on the impacts to each of the commercial and operational areas. Participants will be requested to develop a list of “hot” items that will be provided to the participants of the seminar sessions to be provided in section 2.2.	
 
2.2	Codeshare Applications	
Sabre will provide seminars titled Codeshare Applications. The following business and/or operational units will be provided Codeshare Applications Seminars:
 
 	(a)	Network Planning and Scheduling: The codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Scheduling systems (database, forecasting and optimization systems)	
 
 	(ii)	Schedule development	
 
 	(iii)	Schedule coordination	
 
 	(iv)	Schedule publication	
 
 	(v)	Schedule synchronization	
 
 	(b)	Revenue Management and Pricing: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Fare class mapping between codeshare partners	
 
 	(ii)	Revenue sharing	
 
 	(iii)	Fare filing practices	
 
 	(iv)	Technology requirements	
 
 	(c)	Reservations and Reservations Control: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Availability	
 
 	(ii)	PNR synchronization	
 
 	(iii)	Security	
 
 	(iv)	Country, Passport and Visa information (TIMATIC)	
 
 	(v)	Payment Solutions and Fraud	
 
 	(vi)	Seat assignments and seat maps	
 
 	(vii)	Re-accommodation and protection	
 
 	(viii)	Groups processing	
 
 	(ix)	Flight movement messaging	
 
 	(x)	Technology requirements	
 
 	(d)	Airport Ground Operations: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Customer recognition	
 
 	(ii)	Security	
 
 	(iii)	Country, Passport and Visa information	

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 	(iv)	Payment Solutions and Fraud	
 
 	(v)	Ticketing processes including exchanges and refunds	
 
 	(vi)	Re-accommodation and protection	
 
 	(vii)	Frequent Flyer program topics	
 
 	(viii)	Baggage transfer	
 
 	(ix)	Signage	
 
 	(x)	Back Office considerations	
 
 	(xi)	Technology requirements	
 
 	(e)	Loyalty and Customer Relations: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Status mapping	
 
 	(ii)	Accruals between disparate programs	
 
 	(iii)	Redemptions	
 
 	(iv)	Points (or other mechanism) transfer	
 
 	(v)	Customer complaint/resolution management between partners	
 
 	(vi)	Back Office considerations	
 
 	(vii)	Technology requirements	
 
 	(f)	Sales and Marketing Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Corporate Agreements	
 
 	(ii)	Branding	
 
 	(iii)	Web site requirements	
 
 	(g)	Revenue Accounting and Finance Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	International payment type and credit card usage	
 
 	(ii)	Fraud management	
 
 	(iii)	Impacts of currency exchange rates	
 
 	(iv)	Currency repatriation	
 
 	(v)	General Ledger impacts	
 
 	(vi)	Proration	
 
 	(h)	Legal: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Setting up business in another country	
 
 	(ii)	Responsibilities of marketing vs. operating carrier	
 
 	(iii)	Immigration and customs rules	
 
 	(iv)	Labor laws	
 
 	(v)	Duty free	
 
 	(vi)	Bonding for Cargo	
 
 	(vii)	Taxation	
 
 	(viii)	Jurisdiction	

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 	(ix)	Competition regulations	
 
 	(x)	Data privacy	
 
 	(xi)	Advertising Fairness/Disclosures	
 
 	(i)	Technology: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Technology requirements for each functional area	
 
 	(ii)	Technology requirements for financial systems	
 
2.3	Debrief Sessions	
 
 	(a)	Following each Codeshare Applications seminar, Sabre will lead a de-brief session with core team members selected by Customer. Key activities include:	
 
 	(i)	Consolidating learnings from the Codeshare Applications seminars	
 
 	(ii)	Identifying critical processes than span functional units	
 
 	(iii)	Determining criticality of gaps between current codeshare business processes and technology and industry standard codeshare business processes and technology	
 
 	(iv)	Outlining implications of learnings to Customer	
 
 	(v)	Outlining Considerations for future planning	
 
 	(vi)	Reconciliation of implications and considerations to current processes and initiatives	
 
 	(vii)	Creation of a data flow model for codeshare processes and technology	
 
2.4	Scenario and Assumption Review Session	
Sabre shall lead and collaborate with Customer to validate initial international codeshare assumptions and scope.
 
2.5	Codeshare Departmental Workplan Development	
 
 	(a)	Sabre shall lead and collaborate with Customer in the preparation of workplans for Codeshare from the output of the Codeshare Workshops as outlined above. Workplans will be developed for the following business areas:	
 
 	(i)	Network Planning and Scheduling	
 
 	(ii)	Revenue Management and Pricing	
 
 	(iii)	Reservations and Reservations Control	
 
 	(iv)	Airport Ground Operations	
 
 	(v)	Loyalty and Customer Relations	
 
 	(vi)	Sales and Marketing	
 
 	(vii)	Revenue Accounting and Finance	
 
 	(viii)	Legal	
 
 	(ix)	Cargo	
 
 	(x)	Security and Facilities	
 
 	(xi)	Emergency Response	
 
 	(xii)	Technology	
 
 	(b)	Key activities include:	
 
 	(i)	Define Business Process Impacts.	

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 	(ii)	Conduct reviews of the output from the international codeshare seminars with Customer teams.	
 
 	(iii)	Identify business process codeshare impacts. Combine the business process impact output from the codeshare seminars with any additional impacts identified above.	
 
 	(iv)	Identify technology impacts. Combine technology impact output from the codeshare seminars and any additional impacts identified above.	
 
 	(v)	Identify criticality of impacts.	
 
 	(vi)	Assist Customer to Develop Workplan.	
 
 	(vii)	Identify resource constraints among Team members from each department.	
 
 	(viii)	Develop preliminary plan.	
 
 	(ix)	Quantify Impact.	
 
 	(x)	Identify resource and timeline impacts to other non-codeshare related initiatives.	
 
 	(xi)	Identify interdependencies with technology and other business processes.	
 
 	(xii)	Refine workplan to minimize impacts.	
 
2.6	Identify critical path	
 
 	(a)	Determine which business process or technology impact items will have the most significant impact on the implementation of international codeshare and highlight these items in the workplan.	
 
 	(b)	During the development of the workplan, the Sabre consultants and Customer will conduct review sessions or “checkpoints” to ensure that the project is on target.	
 
2.7	Integrated Codeshare Workplan Development	
 
 	(a)	Lead and collaborate with Customer Teams to develop an integrated international codeshare workplan. Key activities include:	
 
 	(i)	Identify interdependencies between departmental workplans.	
 
 	(ii)	Map departmental plans to an integrated timeline.	
 
 	(iii)	Identify integrated critical path. Determine which business process or technology impact items will have the most significant impact on the integrated workplan for implementation of international codeshare and highlight these items in the workplan.	
 
2.8	DELIVERABLES	
 
 	(a)	Codeshare Fundamentals Deliverables:	
 
 	(i)	A document in presentation style that details the opportunities and challenges associated with codeshare.	
 
 	(ii)	Seminar covering the key business and technology issues associated with codeshare in each of the subject areas to be presented in section 2.2 above.	
 
 	(iii)	List of key items generated by participants to be provided to participants of Codeshare Applications to be presented in section 2.2 above.	
 
 	(b)	Codeshare Applications Deliverables:	
 
 	(i)	Function-specific detailed seminars focused on the impact to individual areas of responsibility as outlined in section 2.3 above.	
 
 	(ii)	Documents for each functional area that detail the key areas of impact to that specific function based on Customer’s current business practices	

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 	(iii)	De-brief sessions with Customer’s core codeshare team members focused on the creation of considerations and deliverables for a work plan to be used in future planning activities as outlined in section 2.4 above.	
 
 	(iv)	Document of consolidated learnings from each codeshare applications seminar.	
 
 	(v)	Document of consolidated implications from each codeshare seminar.	
 
 	(vi)	Document of consolidated considerations for future planning from each codeshare seminar.	
 
 	(vii)	Document identifying critical codeshare business process and technology gaps and level of criticality of each gap.	
 
 	(viii)	Codeshare data flow model.	
 
 	(c)	Scenario and Assumption Review Session Deliverables:	
 
 	(i)	Documented assumptions based on selected scenarios identified in 2.2 above that will be used to develop workplans.	
 
 	(d)	Codeshare Departmental Workplan Deliverables:	
 
 	(i)	Documented workplans for each business area as identified in 2.3 above.	
 
 	(ii)	Network Planning and Scheduling Workplan	
 
 	(iii)	Revenue Management and Pricing Workplan	
 
 	(iv)	Reservations and Reservations Control Workplan	
 
 	(v)	Airport Ground Operations Workplan	
 
 	(vi)	Loyalty and Customer Relations Workplan	
 
 	(vii)	Sales and Marketing Workplan	
 
 	(viii)	Revenue Accounting and Finance Workplan	
 
 	(ix)	Legal Workplan	
 
 	(x)	Cargo Workplan	
 
 	(xi)	Security and Facilities Workplan	
 
 	(xii)	Emergency Response Workplan	
 
 	(xiii)	Technology Workplan	
 
 	(e)	Workplan Content. Each workplan will include:	
 
 	(i)	Resource requirements. Numbers of individuals required from specific work areas as identified in 2.3.2 above.	
 
 	(ii)	Time estimates. Amount of elapsed time required to minimize business process or technology impacts as identified in 2.3.2 above.	
 
 	(iii)	Critical path as identified in 2.3.4	
 
 	(f)	Integrated Master Workplan for codeshare. A workplan derived from the activities as identified in 2.3 above.	
 
 	(i)	Interdependencies between workplans.	
 
 	(ii)	Integrated timeline. A timeline indicating elapsed time and which integrates each of the departmental workplans and associated critical path items.	

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3.	PROJECT DEFINITION DOCUMENT AND PROGRAM PROCESS AND PROCEDURES DOCUMENT	
Customer and Sabre will mutually agree and formally define the agreed to professional services related to the implementation and delivery of the System and services to be provided to Customer by Sabre during the project initiation phase of the project. Such agreement will be documented in the Project Definition Document (“ PDD ”) and the Program Process and Procedures document (“ PPP ”).
The PDD will include, but not limited to the following items:
 
 	(a)	Project Summary Statement	
 
 	(b)	Key Business Objectives and Benefits	
 
 	(c)	Solution Overview	
 
 	(d)	Project Definition, including:	
 
 	(i)	Project Is / Is Not List	
 
 	(ii)	Major Project Deliverables	
 
 	(iii)	Project Completion Criteria	
 
 	(iv)	Project Dependencies	
 
 	(v)	Assumptions	
 
 	(vi)	Constraints & Project Flexibility Matrix	
 
 	(e)	Roles & Responsibilities	
The PPP will include, but not limited to the following mutually agreed terms:
 
 	(a)	Issue Management	
 
 	(i)	Process Overview	
 
 	(ii)	Issue Management Definitions, including:	
 
 	(iii)	Issue	
 
 	(iv)	Issue Priority	
 
 	(v)	Submitter	
 
 	(vi)	Owner	
 
 	(vii)	Status Code	
 
 	(viii)	Escalation	
 
 	(ix)	Issue Management Process Flow	
 
 	(x)	Issue Management Process Flow Steps	
 
 	(b)	Change Request Management	
 
 	(i)	Process Overview	
 
 	(ii)	CR Service Level Targets	
 
 	(iii)	Change Management Definitions, including:	
 
 	(iv)	Change	
 
 	(v)	Change Types	
 
 	(vi)	Change Request Priority	
 
 	(vii)	Owner	

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 	(viii)	Change Management Review Team	
 
 	(ix)	Steering Committee	
 
 	(x)	Status Codes	
 
 	(xi)	Submitter	
 
 	(xii)	Approval Authority	
 
 	(xiii)	Change Management Process Diagram	
 
 	(xiv)	Change Management Process Steps	
 
 	(c)	Communications Plan	
 
 	(d)	Risk Management	
 
 	(i)	Overview	
 
 	(ii)	Tracking Project and Program Risks	
 
 	(iii)	Risk Management Process, including:	
 
 	(iv)	Initiation Phase	
 
 	(v)	Planning Phase, including:	
 
 	(vi)	Risk Identification	
 
 	(vii)	Qualitative Analysis	
 
 	(viii)	Quantitative Analysis	
 
 	(ix)	Risk Response Planning	
 
 	(x)	Schedule Updates	
 
 	(xi)	Monitoring and Controlling Phase	
 
 	(e)	Quality Management	
 
 	(i)	Overview	
 
 	(ii)	End to End Testing	
 
 	(iii)	Customer Testing	
 
 	(iv)	Business Simulation	
 
 	(f)	Cost Management	
 
 	(i)	Travel & Incidentals	
 
4.	PROJECT PLANNING	
Sabre and Customer will perform data collection and create a detailed project plan for implementation of the Systems covered under this Work Order, outlining the major milestones. The project plan will be mutually agreed between Sabre and Customer.
Sabre Project Planning Responsibilities:
 
 	•	 	Assign at least one Project Manager for the duration of the implementation process.	
 
 	•	 	Develop and deliver a project plan	
 
 	•	 	Manage the Change Request process as required by Customer	
 
 	•	 	Make available System for use by Customer.	

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5.	MIGRATION	
PNR conversion will be either manual or automatic. For automatic conversion, Customer is required to provide record layouts, PNR and Credit Shell (if applicable) captures from their current CRS vendor as mutually agreed in order to validate that automatic conversion is possible. A delay in providing this information to Sabre may delay the project schedule. If automatic conversion is not possible, conversion will be manual.
Sabre is not responsible for any Customer’ third-party system integration, unless otherwise specified in this Work Order or as defined in the PDD, PPP or Project Plan.
Sabre shall provide a mutually agreed number of data migration rehearsals during the implementation of this Work Order prior to Commencement Date or until a mutually agreed success rate has been accomplished.
 
6.	TRAINING	
All training services provided by Sabre will be defined in the training plan and/or PDD / PPP / Project Plan.
 
6.1	Train the Trainers	
 
 	(a)	Sabre will provide training to Customer in the form of “train the trainers” or “specialists” as part of implementation Service to Customer.	
 
 	(b)	Sabre will provide a certification process of completion to all Customer “train the trainers” trainers.	
 
6.2	Training Materials and Location	
 
 	(a)	The class duration is an estimate and will be finalized after the business requirements are completed for each training topic. The maximum class size is 12 people and cannot be increased.	
 
 	(b)	One “train the trainer” or train the “specialist” class will be provided for the products included in the contract.	
 
 	(c)	Sabre shall provide Customer training documentation via Sabre’s website. Customer is responsible for downloading and printing the necessary training materials.	
 
 	(d)	Training will be in English unless otherwise specified in this Work Order.	
 
 	(e)	Customer is responsible for providing training equipment and facilities OR Training will be provided at Sabre office facilities in Southlake, Texas.	
 
6.3	On-going Training	
After implementation, Customer will have the opportunity to attend periodic ongoing training sessions that may be offered by Sabre as part of the Sabre Continuous Learning Series. Up to four seats per session will be provided to Customer. No fees will be payable to Sabre for attendance; however, Customer will be responsible for its own expenses related to attendance, such as travel and incidental costs incurred.

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7.	NETWORK SERVICES	
Sabre will provide network services in corporation and upon mutually agreement with Customer as described below:
 
 	(a)	Obtain communications network cost estimates for Customer’s locations requiring System access, provided that Customer provides the necessary requirement information.	
 
 	(b)	Perform one network survey	
 
 	(c)	Design Sabre network connectivity and provide Sabre circuits	
 
 	(d)	Install and configure Sabre router on Customer network and test connectivity	
 
 	(e)	Assist Customer to establish frame relay connectivity from Customer’s Wide Area Network to Sabre host	
 
 	(f)	Assist Customer in establishing connectivity from Customer’s locations not connected on Customer’s Wide Area Network to Sabre host via the SITA network	
 
 	(g)	Assist Customer with selection and installation of hardware and software requirements	
 
 	(h)	Provide technical training to Customer’s personnel in installation, maintenance and support procedures for Sabre’s client software (including gateway software)	
 
 	(i)	Support PNR conversion and cutover	
 
 	(j)	Provide technical support personnel at Customer’s designated primary location for up to thirty (30) days following cutover of the SabreSonic Res System	
 
 	(k)	Sabre reserves the rights to all its hosts IP addresses and maintains unconditional access for their sole use with our core routers. Any Customer installing routers in a common or shared airport network environment must NAT all Sabre IP addresses.	
Additional Network Services beyond the scope of this Work Order may require additional fees. Services, if applicable, will be outlined in cost quotes and sent to Customer for approval. Additional services may include the following:
 
 	(a)	Integration testing of Customer equipment	
 
 	(b)	Installation and monthly fees for circuits obtained by Sabre on Customer’s behalf	
 
 	(c)	Hardware and software for Sabre operation. I.E.: PC’s, printers, cables, etc.	
 
 	(d)	Installation of infrastructure at Airports, CTO, ATO, Reservation centers	
 
 	(e)	Installation of customer LAN/WAN where applicable	
 
 	(f)	Site surveys other than at the HDQ	
 
 	(g)	Installation of temporary training facility	
 
 	(h)	Installation in shared airport systems (SITA, ARINC)	
 
 	(i)	LNIATA setup charges after conversion	
 
 	(j)	Third party connections to the host (incur a monthly fee and installation charge)	

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APPENDIX C
CUSTOMER RESPONSIBILITIES
 
1.	CUSTOMER RESPONSIBILITIES	
The following is a list of expected customer responsibilities necessary for the project. The Customer responsibilities will be updated and documented in the PDD and PPP. In connection with the Systems and Services to be provided by Sabre, Customer shall be responsible for the following at Customer’s expense:
 
1.1	General Responsibilities	
 
 	(a)	Designate a Project Coordinator who will be the primary Sabre contact during the implementation and training phases. This individual shall help assure a smooth installation, including installation of the Systems infrastructure, making the appropriate Customer marketing, customer service and system staff available during the training period, etc.	
 
 	(b)	Provide the assistance reasonably requested by Sabre in the implementation of the Systems, including but not limited to obtaining the necessary participation and cooperation from Customer’s third party vendors (affiliated or non-affiliated)	
 
 	(c)	Provide executive oversight and fully participate in the project governance process including regular joint executive steering committee meetings	
 
 	(d)	Facilitate process and procedure improvements/transformation as specified by the PDD	
 
 	(e)	Provide the necessary resources and focus to facilitate and implement the Codeshare program	
 
 	(f)	Provide the necessary internal process change management and employee communications throughout the project	
 
 	(g)	Designate support personnel at every cutover location	
 
 	(h)	File Customer’s fare levels with a Sabre approved fares vendor (e.g. ATPCO)	
 
 	(i)	Utilize the Sabre Air Pricing package for fares and pricing requirements	
 
 	(j)	File schedules with a Sabre approved schedules vendor (e.g. OAG)	
 
 	(k)	Procure, install and maintain Sabre certified equipment for use to access System. Customer will be responsible for any costs associated with certifying equipment, including printers, which are not already Sabre certified. Customer will also be responsible for procuring support services from the equipment vendor, if such is equipment is not procured through Sabre.	
 
 	(l)	Procure, install and maintain communications circuits to Customer’s sites requiring access to System	
 
 	(m)	Order and install any necessary hardware and network configurations necessary to support the Systems	
 
 	(n)	Customer shall pay install and monthly connections fees for all infrastructure terminating at the Sabre Data Center. This includes SITA ASCUs	
 
 	(o)	Provide Sabre, in a timely manner, any reasonably requested information concerning Customer’s network and hardware configurations and requirements	
 
 	(p)	Perform training as outlined in this Work Order.	
 
 	(q)	Have the necessary agreements in place with the appropriate GDSs	

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 	(r)	Meet any other, mutually agreed, defined requirements as specified in the Project Plan provided by Sabre	
 
 	(s)	Obtaining, installing and maintaining all equipment and telecommunication facilities and necessary interfaces, at its own expense, in order to communicate with the Systems	
 
 	(t)	Creation, management, security, and change controls for any and all passwords and user IDs. Any Sabre-assigned passwords shall likewise be maintained by Customer as secret and confidential. Customer agrees that it is and shall remain solely and completely liable for any communications or other uses that are made using its or its users’ passwords and user IDs, as well as for any obligation that may result from such use. Customer is responsible for changing any password it believes has been stolen or might otherwise be misused. Customer shall notify Sabre immediately of any unauthorized use of any password or user ID or any other breach of security suspected by Customer.	
 
 	(u)	Customer will make available, as promptly as possible (as defined in the Project Schedule), all information, data, facilities and personnel support reasonably requested by Sabre, including the support specified in this Work Order.	
 
 	(v)	Executing the test plan that tests the material conformity of the System to the description provided in Appendix A of this Work Order. The test plan and testing should include:	
 
 	(i)	Testing of any existing applications necessary to validate the operation of the interfaces beyond the boundaries of the System (i.e., testing each of the applications integrated with the System to validate that each is functioning properly).	
 
 	(ii)	Maintenance of the test data in the test environment during the course of Customer Testing.	
 
 	(iii)	Tests and validation of Customers business requirement and processes.	
 
 	(w)	During Customer Testing Period Customer shall notify Sabre immediately of any material non-conformity between the System and the Description of System as contained in Appendix A of this Work Order.	
 
 	(x)	Customer shall ensure that the appropriate personnel have been trained	
 
1.2	Credit Suite	
 
 	(a)	Customer acknowledges that it is solely responsible for the security of Customers’ Payment Card Data while such data is in Customer’s possession or under its control. Customer shall be solely liable for loss or compromise of Payment Card Data while in its possession and for any damage or liability resulting therefrom. Payment Card Data means account number, in conjunction with either the name, address, date of expiration or any applicable security code of the cardholder.	
 
 	(b)	Customer shall ensure that all Cardholder Information, if / when stored, remains encrypted, is appropriately masked for viewing, and that viewership is allowed only on a ‘need to know’ basis at all times for the duration of this Agreement. Customer acknowledges that it is solely responsible for the security of Cardholder data while such data is in Customer’s possession or under its control. Customer shall be solely liable for loss or compromise of Cardholder data in its possession and for any damage or liability resulting therefrom. Cardholder data means (but not limited to) first name or initial and last name in combination with: social security number or Social Insurance Number, driver’s license number, or State Identification Card number, financial account number, credit or debit card number with personal identification number such as an access code, security codes or password that would permit access to an individual’s financial account information.	
 
1.3	SabreSonic Check In – Self-Service Kiosks Check In	
 
 	(a)	Customer will provide Branding Graphics and Marketing Media (logos, artwork, color specifications) provided as camera-ready artwork or as digital images (.jpg, .gif, etc.).	
 
 	(b)	Customer will be responsible for the selection of the self-service kiosk hardware and vendor; self-service kiosk hardware and software must be CUSS-compliant, otherwise incremental effort and project cost will be incurred; Sabre will provide contact information for recommended hardware vendors and can provide consultation for the planned deployment as part of this project	

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1.4	SabreSonic Check In – Web Check In	
Customer will provide Branding Graphics and Marketing Media (logos, artwork, color specifications) provided as camera-ready artwork or as digital images (.jpg, .gif, etc.).
 
1.5	SabreSonic Web	
 
 	(a)	Customer is responsible for handling all communications with end-user travelers utilizing the SabreSonic Web Site.	
 
 	(b)	Customer will provide the Content and periodic updates to the Content.	
 
 	(c)	Customer is responsible for all unlawful purchases on the Site (which may include, without limitation, identity theft and other credit card fraud). Any credit card charge-back that Sabre receives as a result of an unlawful act on the Site will be billed back to the Customer in the month following receipt and research of such charge-back. Customer agrees to notify Sabre immediately through a mutually agreed upon email address and/or phone number, of any known schemes poised by persons or groups or any technical issues that could generate a charge-back. Customer agrees to co-join Sabre in all fraud prevention efforts to include manual, automated and future technology.	

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APPENDIX D
USER DOCUMENTATION
Sabre shall provide Customer training documentation for the Systems via Sabre’s customer support web site. Customer is responsible for downloading and printing the necessary training materials.
The Systems Documentation will be updated periodically by Sabre as New Functions and Enhancements are released. Customer may make a reasonable number of copies of the System(s) Documentation solely for the permitted use and for back-up purposes. Customer will reproduce and include on each copy and on each partial copy any copyright notice and proprietary rights legend contained in the System(s) Documentation, as such notice and legend appear in or on the original.

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APPENDIX E
PROJECT SCHEDULE
Sabre and Customer agree that the following high level dates provided below are illustrative of the overall Project Schedule.
Start Date: August 17 th , 2009 but not later than the August 31 st , 2009
Commencement Date: Mid-May 2010 but not later than Mid-June 2010
The detailed project schedule will be developed jointly between Customer and Sabre and defined in the PDD, PPP and Project Plan as agreed.

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APPENDIX F
SYSTEM REQUIREMENTS
The following minimum requirements are required for use and access to the SabreSonic solution. Customer and Sabre are currently conducting a study, the results of which will be included in the PDD and may result in changes to the System Requirements identified below.
 
1.	MINIMUM REQUIREMENTS – SABRESONIC PASSENGER SOLUTION	
 
1.1	IP Frame / OFEP Requirements	
Sabre OFEP/NOFEP provides connectivity to hosts in Tulsa via TCP/IP. Sabre OFEP supports workstations utilizing the Interface to SabreSonic and Sabre client, as well as, applications written to the Sabre Windows API. TCP/IP is used for the communications between Sabre Clients and Sabre Hosts.
 
1.2	Hardware Requirements	
 
 	(a)	Cisco router will be provided by Sabre within the Sabre Data Center	
 
 	(b)	Workstations with 10/100 Mbps Ethernet Cards	
 
 	(c)	10/100 Switches	
 
1.3	Workstation Minimum Hardware Requirements for Sabre Client	
 
 	(a)	CPU: Pentium III	
 
 	(b)	Microprocessor speed: 500 MHz or faster	
 
 	(c)	Hard Drive: 1 GB	
 
 	(d)	RAM: 1 GB	
 
 	(e)	Monitor: 17 inch	
 
 	(f)	Drive: CD ROM	
 
 	(g)	Operating system: XP, 2000, Vista or NT	
 
 	(h)	Operating platform: 32 bit	
 
 	(i)	Network adapters: Ethernet	
 
 	(j)	Network protocols: TCP/IP	
 
 	(k)	Keyboard: 101-key	
 
 	(l)	Mouse: IBM compatible	
 
 	(m)	Ports: Serial	
 
1.4	Workstation Minimum Hardware Requirements for SabreSonic Interact	
 
 	(a)	CPU: Pentium III	
 
 	(b)	Microprocessor speed: 500 MHz or faster	
 
 	(c)	Hard Drive: 1 GB	

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 	(d)	RAM: 1 GB	
 
 	(e)	Monitor: 17 inch	
 
 	(f)	Drive: CD ROM	
 
 	(g)	Operating system: XP, 2000, Vista or NT	
 
 	(h)	Operating platform: 32 bit	
 
 	(i)	Network adapters: Ethernet	
 
 	(j)	Network protocols: TCP/IP	
 
 	(k)	Keyboard: 101-key	
 
 	(l)	Mouse: IBM compatible	
 
 	(m)	Ports: Serial	
 
*	Note: No remote management software has been certified for use with Sabre emulators. Sabre emulators must run locally on all workstations.	
 
1.5	Technical Infrastructure Requirements	
 
 	(a)	10/100 Mbps Ethernet cards	
 
 	(b)	Category 5 cabling	
Sabre Recommendation: Install a second router running HSRP (Hot Standby Routing Protocol) for redundancy at the primary site.
 
1.6	Additional Minimum Requirements	
 
 	(a)	Customer needs to provide three public IP addresses	
 
 	(b)	Routers must be installed by Sabre	
 
 	(c)	Routers are procured, owned, and managed by Sabre	
 
 	(d)	Customer must provide all existing subnetworks	
 
2.	MINIMUM REQUIREMENTS – SABRESONIC CHECK IN – GATE READERS	
Common-use environment – any CUTE/MUSE certified gate reader device
In an airport where Customer has purchased the hardware, following is the current list of certified scanners that will work with Sabre Gate Reader application. Sabre will provide the Customer with updates to the below list when additional devices gets certified by Sabre.
 
 	•	 	IER801BC	
 
 	•	 	Access IS BGR120M	
 
 	•	 	Access IS BGR120S	
 
 	•	 	Symbol LS2208 (1D barcode scanner, serial)	
 
 	•	 	Symbol 4407 (1D, 2D barcode scanner, wedge)	

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In addition to the above devices, Sabre can certify any 2D scanner. Should Customer find a 2D scanner that they would like to purchase/deploy that is not on the above list, Customer may request Sabre to test and certify the device at no additional charge. Customer will be required to provide Sabre with a sample device to be used in Sabre lab for testing and certification purpose.
 
3.	MINIMUM REQUIREMENTS – SABRESONIC CHECK IN – SALES SERVICE KIOSK CHECK IN	
Customer will be responsible for the selection of a self-service kiosk vendor, hardware and software platform. The self-service kiosk hardware and software must be CUSS-compliant, otherwise incremental effort and project cost will be incurred. An example SSK unit configuration follows:
Hardware: IATA CUSS-compliant Self-Service Kiosk unit configured with Touch-screen, Pentium 4 CPU, 256M RAM, 2GB Disk, Thermal printer (for boarding pass issuance), ATB Reader and/or Magnetic Card Reader, Network Interface Card
Optional: Bag Tag printer, Passport Reader, Infrared scanner
Software: Vendor kiosk management software, IATA CUSS compliant software platform
Communications: Airport LAN, IP connectivity (to Sabre eMergo data center); Minimum 64KB circuit, although 128KB circuit is recommended to ensure optimal performance and response time

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APPENDIX G
MAINTENANCE SERVICES
 
1.	MAINTENANCE SERVICES	
This Appendix G defines the Maintenance Services to be provided for the Systems covered by this Work Order No 5.
 
2.	CUSTOMER’S IT ENVIRONMENT	
Unless otherwise provided herein, Customer shall be responsible for obtaining, installing and maintaining the equipment, telecommunication facilities and interfaces that Customer has expressly agreed to provide in accordance with Section 2(i) of the main body of this Work Order, at its own expense, in order to communicate with the Systems. Customer may change its IT environment used in connection with the Systems or Services (including Customer’s desktop environment, and including changes to personal computers, hardware, software, network configuration or telecommunications network); provided, that such change conforms to Sabre’s standards and complies with minimum specifications set forth in Appendix F.
 
3.	MANAGEMENT OF SYSTEM	
Subject always to Section 2(j) of the Work Order, Hosting Systems and Data. Sabre shall have the right to subcontract any of its obligations under this Work Order to any third party without having to obtain Customer’s prior written consent. In the event that Sabre provides any communications circuits utilized with the Systems, Customer acknowledges that Sabre is not a licensed provider of communications circuits and therefore shall arrange for the provision of the communication circuits through a third-party provider selected by Sabre. Sabre will monitor such provider’s performance of its obligation to provide and maintain the communications circuits, work with such provider and Customer to resolve any problems with the communications circuits, and take all reasonable actions to cause such provider to perform such obligations. Sabre will not, however, be responsible for any damages caused by the communications circuits and/or acts or omissions by the communications circuit provider.
 
4.	SABRE CHANGES TO SYSTEM	
Sabre may modify, amend, enhance, update or provide an appropriate replacement for any of the Systems, or any element thereof, at any time. Further, Sabre shall have the right to manage all resources used in providing the Systems as Sabre deems appropriate. From time to time, the functionality of the Systems may be modified by Sabre creating Enhancements and adding New Functions. If Sabre offers these Enhancements or New Functions without charge to Customer, then Customer agrees to accept them for use with the Systems. Customer is under no obligation to purchase any Enhancement or New Function that Sabre makes available for an additional charge and Sabre hereby agrees that it will continue to support the underlying version of the System without such new Enhancement or New Function. If, following the Work Order Effective Date, Sabre removes functionality from all or any portion of the Systems without providing similar substitute functionality, and such removal has a material adverse effect on Customer, then at the Customer’s request Sabre will continue to make the prior Version or Release (i.e. last Version or Release containing the removed functionality) available to Customer for its access and use, and Sabre will provide Maintenance Services for that prior Version or Release until the eliminated functionality is restored into the relevant portion of the System.
 
5.	ENHANCEMENT AND NEW FUNCTION IMPLEMENTATION	
Sabre will use reasonable efforts to provide Customer with prior notice of the scheduled implementation of Enhancements and New Functions. Such notice shall be provided to Customer in the same manner and at the same time as such notice is provided to other Sabre customers utilizing the Systems. Sabre shall provide training materials to Customer with respect to such Enhancement and New Functions. The training materials shall be substantially similar to those that Sabre provides to other Sabre customers who utilize the Systems, and at minimum provide sufficient detail to and content to enable a reasonably skilled end user to use the Enhancements and New Functions without interruption of the existing features and functions. Except where precluded by operational emergencies to correct a Level 1 or 2 Error, Sabre shall test all System capabilities, including without limitation, Enhancements and New Functions, under an internal test environment. Despite such testing, conditions may develop that lead to error conditions, malfunctions, or a breakdown in the operation of the System. Should any of the foregoing occur, Sabre shall use reasonable efforts to correct any such condition with the same degree of effort afforded a similar problem affecting Other Customers. Nothing in this Section may be construed to excuse Sabre from performing to the Service Level Commitments contained in Appendix H.

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6.	SCOPE OF MAINTENANCE SERVICES	
During the Maintenance Term, Sabre will provide the services necessary to remedy any Level 1 or Level 2 Errors in the Systems and to acknowledge evaluate and record any Level 3 or Level 4 Errors in the Systems. Fixes for Level 3 and Level 4 Errors will be prioritized after all Level 1 and Level 2 Errors are remedied. Maintenance Services will commence promptly after Customer has identified an Error with the Systems, or any portion thereof, and has notified Sabre’s Support Desk of the Error.
 
7.	FIRST LINE SUPPORT/SECOND LINE OF SUPPORT	
Customer shall establish and maintain the organization and processes to provide “First Line Support” to its users of a System through one or more designated technical coordinators trained in software/database administration, operations and preventative maintenance procedures (the “Technical Coordinator”). First Line Support shall include, but not be limited to, (a) a direct response to users with respect to inquiring concerning the performance, functionality or operation of the System, (b) a direct response to users with respect to problems or performance deficiencies of the System, (c) an initial diagnosis of problems or performance deficiencies of the System, and (d) an initial attempt to resolve any such problems or performance deficiencies of the System. If after reasonable commercial efforts, the Customer Technical Coordinator is unable to diagnose or resolve the problems or performance deficiencies of the System, the Technical Coordinator shall contact the Sabre Support Desk for “Second Line Support”, and Sabre will provide such support as set forth herein. Second Line Support shall include a diagnosis of problems or performance deficiencies of the System and a resolution of Level 1 or Level 2 Errors with the System. Second Line Support shall also include a diagnosis of problems or performance deficiencies of the System and a record and possible resolution of Level 3 or Level 4 Errors with the System. Customer shall provide Sabre with the necessary remote access (e.g. modem) to Customer’s operating system so that Sabre may provide remote diagnostic capability. Sabre does not assure performance of the Maintenance Services if such remote access is not provided by Customer when requested by Sabre.
 
8.	SUPPORT DESK	
During the Work Order Term and any Transition Period, Customer will have access to a Sabre Support Desk twenty-four (24) hours a day, seven (7) days a week, accessible via the internet, email, teletype and/or telephone support. The Support Desk will be responsible for facilitating the Second Line of Support. A Support Desk coordinator will be responsible for logging and tracking Errors after they have been reported by Customer, contacting the Customer’s Technical Coordinator, if deemed necessary, to confirm receipt of an Error report and determining the priority level of the Error. In the event the parties disagree on the severity level placed by Sabre on any Error, the Customer may escalate to the Sabre Account Director, and may further escalate to Sabre Regional Vice President, for discussion and agreement. Error levels will be determined as follows:
Level 1 – A complete loss of service of the System or “Critical Business Function”. The System is inoperable and work cannot continue.
Level 2 – A severe loss of service of the System. Problem affects a Critical Business Function, however, use of the System can continue in a restricted fashion.
Level 3 – A moderate loss of service of the System. A workaround is available permitting use of the System’s functionality.
Level 4 – No loss of service of the System. Problem is minor and no workaround is required.
Customer may report a System Error by contacting the Sabre Help Desk using any of the following methods:
 
 	•	 	Internet Access: Go to “http://customersupport.sabre.com/”	
 
 	•	 	Email: Send to res.helpdesk@sabre.com	
 
 	•	 	Teletype: Send to SAAHD1S	
 
 	•	 	Phone in Mexico: 01-800-123-8537 or 001-682-605-5500. Note: all Level 1 Errors are to be reported by telephone, if possible, for the quickest response.	

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9.	USER GROUP	
Customer will be entitled to attend Sabre’s User Group Meetings for the SabreSonic Passenger Solution. All expenses associated with Customer’s attendance of such meetings shall be the responsibility of Customer.

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APPENDIX H
SERVICE LEVEL AGREEMENT
 
1.	INTRODUCTION	
 
 	(a)	This Service Level Agreement describes the service levels applicable to the System provided under this Work Order. This Service Level Agreement shall supersede and replace any existing service level agreements or performance standards under the Agreement.	
 
 	(b)	The Service Level Commitments and Service Level Targets with respect to the Systems are set forth in this Appendix H. Sabre’s failure to achieve a Service Level Commitment and Service Level Targets shall be considered a Service Level Default, resulting in a Service Credit as set forth in this Appendix H.	
 
 	(c)	In the event of System changes or other changes which adversely affect the System performance, both parties will agree in advance the impact on Service Level Commitments and Service Level Targets (such agreement to be negotiated in good faith).	
 
2.	EXCEPTIONS TO SERVICE LEVEL COMMITMENTS AND TARGETS	
Sabre shall not be responsible for its failure to meet any Service Level Commitment if such failure is attributable to any of the following:
 
 	(a)	Customer’s failure to perform its obligations under the Agreement or Work Order that impact the performance of the System defined in Appendix C;	
 
 	(b)	Force Majeure Events except for (i) strikes, lockouts, insurrection, protest, security breaches or other hostilities, (ii) fuel and energy shortages or (iii) transportation delays or the inability to obtain necessary labor, materials or utilities from usual sources;	
 
 	(c)	The performance of a third party not under Sabre’s control (for clarity, a Sabre subcontractor shall be considered to be under Sabre’s control and Sabre will not be excused for failure to meet a Service Level Commitments as a results of acts or omissions of a Sabre subcontractor);	
 
 	(d)	Service or resource reductions mutually agreed with Customer provided that Sabre has previously notified Customer in writing that the implementation of such request may result in a failure to meet a Service Level Commitment;	
 
 	(e)	Unforeseen capacity increases based on changes in Customer’s business operations, processes or methodology that adversely impact the System(s), provided, however, increases of capacity demands resulting from Customer fare sales shall not be considered unforeseen;	
 
 	(f)	Failure of the System Requirements provided by Customer; or	
 
 	(g)	Failure of the Internet or other telecommunication connections.	
 
3.	ROUTINE DOWNTIME	
Up to ten (10) times in any calendar year, Sabre may schedule downtime for maintenance and or modifications to the Systems for period not to exceed four (4) hours each time (“Routine Downtime”). Except for operational necessity, Routine Downtime shall occur between 2100 and 0700 United States Central Time, using reasonable efforts to exclude Tuesdays. Sabre will provide Customer with at least ten (10) days prior notice of any scheduled Routine Downtime and the anticipated duration of such Routine Downtime; provided, however, Sabre may defer the scheduled Routine Downtime upon not less than twenty-four (24) hour prior advance notice for operational necessity.

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4.	MONITORING AND REPORTING	
 
 	(a)	Unless otherwise specified, Sabre will provide the monitoring systems and/or tools (“Monitoring System”) for monitoring all Service Levels Commitments and Service Level Targets.	
 
 	(b)	By the fifteenth (15th) day of each month, Sabre will provide Customer with a monthly performance report to verify Sabre’s performance and compliance with the Service Level Commitments and Service Level Targets. The data and detailed supporting information shall be Sabre Confidential Information.	
 
 	(c)	Sabre will provide Customer access to Sabre’s Monitoring System, and metrics as soon such a reporting system is available for direct access.	
 
 	(d)	Upon mutual agreement and if technically feasible Customer will use its own Monitoring System to monitor the System.	
 
5.	RIGHT TO AUDIT	
 
 	(a)	Upon Customer’s reasonable written notice to Sabre, and for the purpose of verifying compliance with this Work Order, Customer shall have access on an annual basis, during regular business hours at mutually acceptable times and places, to all records which reasonably relate to this Work Order, for audit and copy.	
 
 	(b)	Both parties reserve the right to have an outside independent audit performed to substantiate overall conformance to this Work Order	
 
 	(c)	The auditing party shall be responsible for all reasonable costs incurred by the non auditing party in connection with each such examination; provided, however, that the auditing party shall not be responsible for such costs if the audit reveals that the non auditing party is not performing in accordance with this Work Order.	
 
 	(d)	In the event that the audit reveals that the non auditing party has not complied with the Service Level Commitment and Service Targets, the non auditing party shall immediately provide Service Credits as described in Section 5 of Appendix H.	
 
 	(e)	During each audit, neither party shall materially interfere with the ability of the non auditing party to perform its duties.	
 
6.	SERVICE CREDITS	
In the event Sabre fails to meet a Service Level Commitment and Service Level Targets identified in this Appendix H, and such failure is not excused or otherwise permitted under the terms of this Appendix H, then, as Sabre’s sole and exclusive liability and Customer’s sole and exclusive remedy, Sabre shall provide Customer with the Service Credit(s) as described in this Appendix H.
 
6.1	Settlement of Service Credits	
 
 	(a)	Within the standard monthly reporting Sabre shall provide information about Service Credits due for the preceding month.	
 
 	(b)	Any Service Credit(s) due to Customer will be applied on the next month invoice. Service Credits are not redeemable for cash.	
 
6.2	Service Credit Calculation	
 
 	(a)	Service Level Commitments	
In the event Sabre fails to meet a Service Level Commitment, it will provide Customer with a Service Level Credit which shall be calculated as a percentage of the System Usage Fee for the month corresponding to the Measurement Window for an affected period.

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Availability	  	Service Credit for failure to achieve
Service Level	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
The maximum Service Credit available to Customer for any given month shall in no event exceed ***** of the System Usage Fees for the applicable month.
 
6.3	Service Level Targets	
 
 	(a)	Service Credits will be paid for each Level 1 and Level 2 error not resolve in ***** business days (or as mutually agreed if longer than ***** business days)	
 
 	(b)	For each Level 1 not met Sabre pays Customer a Service Credit equal to ***** of the monthly committed RPB fee on the next months invoice	
 
 	(c)	For each Level 2 not met Sabre pays Customer a Service Credit equal to ***** of the monthly committed RPB fee based on the next month invoice	
 
 	(d)	Service Credits capped at a maximum of ***** of the RPB expense on any one month invoice	
 
 	(e)	In any one calendar month if the Service Credit due Customer meets or exceeds ***** of the RPB expense on the applicable month’s invoice Sabre will be deemed as Service Level Default for that month	

Service Target Level	  	Service Credit for Default	
Level 1	  	*****	
Level 2	  	*****	
 
7.	SERVICE LEVEL COMMITMENTS	
Sabre will meet the following Service Level Commitments in connection with its performance under this Work Order:
 
 	(a)	Availability – the System will collectively be Available ***** of the time.	
For purposes of calculating the Availability of a System, the following metric shall apply:
 
 	(a)	Availability: This Performance Metric is a measure of the time of the System is available to Customer for Productive Use at Sabre’s Data Center (“Availability” or “Available”). It is expressed as a percentage of the Agreed Service Time, during the “Measurement Window” (i.e., a calendar month), for a specific System. The Availability shall be measured in percentage points to ***** decimal places as follows:	
***** = *****/***** x 100%

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 	(b)	Agreed Service Time is equal to the total time available in the Measurement Window excluding Routine Downtime.	
 
 	(c)	For any period that a System is not Available other than for Routine Downtime (“Unscheduled Outage”), the period of such Unscheduled Outage shall be measured from the point in time when Sabre determines that the Unscheduled Outage began, which shall be the earliest of:	
 
 	(i)	the point in time that such Unscheduled Outage is detected by Sabre through its Monitoring System; or	
 
 	(ii)	Customer reports such Unscheduled Outage to the Sabre Help Desk; or	
 
 	(iii)	any other manner in which Sabre has actual knowledge that the System(s) is not available to Customer	
 
 	(d)	The Unscheduled Outage shall end at the point in time which is earlier of:	
 
 	(i)	the time Sabre registers in its Monitoring System that the affected System(s) is Available; or	
 
 	(ii)	the time Sabre registers traffic from Customer which generates responses from the affected System(s).	
 
8.	SERVICE LEVEL TARGETS	
In addition to the Service Level Commitments provided above, Sabre will endeavor to meet the following Service Level Targets:
 
 	(a)	The “Response Time” is the period measured from the time a request is received by the System at Sabre’s data processing center and the time a response is provided by the System at Sabre’s data processing center. If Sabre’s average Response Time during a monthly period persistently falls below ***** after excluding complex fare shopping transactions (e.g., searches involving multiple routing and/or days for travel), then notwithstanding anything herein to the contrary, Customer shall have the right to terminate this Work Order for cause pursuant to Section 2(b) of the Agreement. For purposes of this section, a “persistent failure” of Sabre to meet the ***** Response Time as described above shall mean (i) Sabre’s failure to meet such Response Time for ***** consecutive months, or (ii) Sabre’s failure to meet such Response Time for ***** months in any ***** month period.	
 
 	(b)	In the case that Customer reports a Level 1 Error, Sabre and Customer must mutually agree to modify the Level reported by Customer. Once both parties mutually consent the change of Level, Sabre must notify Customer in writing the reason of such change.	

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 	(c)	The target response and remediation times for Level 1 and 2 Errors (as described in Section 8 of Appendix G) after an Error has been logged is as follows:	

Severity
Level	  	Source	  	Acknowledgement	  	Engagement
(2 nd  and 3 rd  level)
after
acknowledgement	  	Customer
Update
Frequency	  	Restore*	  	Remediation**	  	Escalation	
1	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
2	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  		  		  		
3	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  	*****	  		  		
4	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  	*****	  		  		
 
*/**	see definitions in Appendix J	
 
9.	TERMINATION FOR PERSISTENT SERVICE LEVEL DEFAULT	
 
9.1	Service Level Commitments	
Notwithstanding the above, Customer shall have the right to terminate this Agreement for cause upon written notice to Sabre (and without the provision of a cure period) in the event that the Availability of the System falls below (i) *****, (ii) ***** for any ***** consecutive months, or (iii) ***** for any ***** months in any *****. Customer may only exercise its right to terminate as permitted under this provision within ***** from the end of the month in which such termination right was triggered.
 
 	(a)	Customer then has ***** days from the point in time that Sabre is deemed in Default of the Service Level to notify Sabre that it will terminate the agreement.	
 
 	(b)	Customer then will migrate-off of the System at least ***** days after this notification date.	
 
 	(c)	Customer will provide Sabre at least ***** days advance notification of the date it will migrate off the System	
 
9.2	Service Level Targets	
Notwithstanding the above, Customer shall have the right to terminate this Agreement for cause upon written notice to Sabre (and without the provision of a cure period) in the event that the Service Credits for Service Level Targets paid to Customer exceeds ***** percent (i) for any ***** consecutive months, or (ii) for any ***** months in any ***** month period.
 
 	(a)	Customer then has ***** days from the point in time that Sabre is deemed in Default of the Service Level to notify Sabre that it will terminate the agreement.	
 
 	(b)	Customer then will migrate-off of the System at least ***** days after this notification date	
 
 	(c)	Customer will provide Sabre at least ***** days advance notification of the date it will migrate off the System	

Confidential	  	Page 81	  		

APPENDIX I
CUSTOMER SPECIFIC DELIVERABLES
Customer Specific Deliverables will be mutually agreed upon by the parties in and defined in the Project Definition Document. Any subsequent Customer Specific Deliverables will be mutually agreed upon by the parties through the Change Request process. Sabre will deliver to Customer the following Customer Specific Deliverables:
 
 	(a)	Interface Deliverables as will be defined in the PDD	
 
 	(b)	Sabre Roadshow	
 
 	(c)	eCommerce Workshop	
 
 	(d)	Work with Customer to define Critical Business Process for clarity related to the Service Level Agreement	
Sabre will be responsible for ensuring compliance with Mexican government regulations
 
 	(a)	Registro Federal de Causantes (RFC)	
 
 	(b)	Tax requirements	
 
 	(c)	Financial Sector mandates (Mexican credit cards may not be charged in USD; Authorization of credit cards (PROSA)	
 
 	(d)	Mexican aviation industry requirements	
 
 	(e)	Local and Federal government mandate	

Confidential	  	Page 82	  		

APPENDIX J
DEFINITIONS
The following terms when capitalized in this Work Order shall have the meanings set forth below:
“ Ancillary Services ” means the third party products and services that Customer distributes to its airline passengers in connection with its airline services, including but not limited to airport shuttle services, travel insurance, in-flight meal purchases, car rental, hotel services, and in-flight entertainment operations.
“ Codeshare Carriers ” means a carrier with whom Customer has an arrangement whereby such other airline and Customer market and operate any of their respective airline flight segments under the airline designator code (issued by the International Air Transport Association, or its successor) of the other party;
“ Content ” means the Customer-specific content provided by Customer and made available by Sabre through the Site. The Content will be provided by Customer in the format mutually agreed upon by the parties.
“ Contract Year ” shall mean a consecutive twelve month period, with the Contract Year 1 beginning on the Commencement Date and ending twelve months thereafter.
“ Critical Business Function ” means any functionality mutually agreed and documented by both parties during the implementation of the System in an Amendment to Appendix G.
“ Customer Data ” means all data and information that is input by or on behalf of Customer into any application database forming part of or used by Customer in connection with the Systems, including data and information that is processed by the Systems by or on behalf of Customer, or that is automatically generated or created through Customer’s use of the Systems.
“ Customer Database ” shall mean the database that includes the Customer Data, including information that relates to Customer’s air schedules, fares, and passengers (including inventory records of Customer’s flights, and passenger name records that include airlines segments), and that is stored in and processed by the Sabre Data Center. “ Deliverables ” means
“ Enhancement ” means any change to the method of operation or display of the functions that exist in the software.
“ Expected Monthly Messages per RPB ” shall mean the measured and agreed messages per RPB with a 20% buffer added onto the agreed messages per RPB
“ Hosting Services ” means the Sabre services described in Section 2.9 of the Work Order;
“ Message ” shall mean each time data is sent by or on behalf of Customer to a System at the Sabre Data Center and data is then sent from a System at the Sabre Data Center in response to an inquiry by or on behalf of Customer. For clarity, a Message is a round trip response
“ Milestone ” means a significant event occurring as part of the Professional Services as identified on the Project Schedule set forth on Appendix E, as the Project Schedule may be revised in the Project Definition Document and the Program Process and Procedures Document delivered by Sabre to Customer at Milestone 1, and as more particularly described in Section 2(2) of this Work Order;
“ Monitoring System ” means a system used to monitor System performance in data center.
“ Non-critical Users ” means employees or customers other than Critical Users.
“ New Function ” shall mean any modification that adds a function not provided by with the software on the date the parties entered into this Work Order.
“ Restore ” means that a work around is identified and implemented in order to restore the operations of the System.
“ Remediate ” means the root cause analysis has been completed and a final resolution has been identified and implemented to correct the cause of the Error.

Confidential	  	Page 83	  		

“ RPB Fee ” means the fee per Revenue Passenger Boarded as set forth in Section 6 of this Work Order that Customer pays for access and use of the Systems.
“ Revenue Passenger Boarded ” or “ RPB ” shall mean a passenger with a paid ticket excluding non-revenue passengers, who is boarded on a Customer flight or on a flight marketed or operated under a Customer Entity’s airline designator code. A Revenue Passenger Boarded on a direct flight that makes one or more intermediate stops, whether or not including a change of equipment, shall be counted as one Revenue Passenger Boarded. A passenger traveling on a Funnel Flight shall be regarded as more than one Revenue Passenger Boarded. A passenger making a connection at an intermediate point by deplaning from one flight and boarding another flight shall be considered as more than one Revenue Passenger Boarded. “Funnel Flight” shall mean a Flight (i)(a) for which a single flight number (“through flight number”) has been assigned to two or more connecting Flight segments, and (b) for which the through flight number is different than the flight numbers of the component Flight segments, or (ii) for which the assigned Flight number has a single point of origin and multiple destination or multiple points of origin and a single destination. “Flight” shall mean a schedule or chartered airline flight segment operated by Customer or by another person using a Customer Entity’s airlines designator code. A series of flight segments operated under a single flight number without a scheduled change of aircraft shall be single Flight, except that each separately numbered flight segment of a Funnel Flight shall be a separate flight.
“ Project Definition Document ” or “ PDD ” means the project definition document described at Section 3 of Appendix B of this Work Order; and
“ Program Process and Procedures Document ” or “ PPP ” means the program process and procedures document described at Section 3 of Appendix B of this Work Order.
“ Sabre Date Center ” means any computer data processing facility operated by or on behalf of Sabre.
“ Site ” means the set of World Wide Web pages hosted by Sabre through which a customer may access the Customer’s reservation data via SabreSonic Web software with incorporated product features set forth in the description of SabreSonic Web set forth in this Work Order. The term “Site” shall include all sites and sub sites.
“ System Usage Fee ” means the total of the PB Fees, subject to the Minimum Commitment set forth in Section 6.2 of the Work Order, paid each month for Customer to access and use the Systems.

Confidential	  	Page 84	  		

APPENDIX K
TRAVEL & INCIDENTALS
 
1.	Travel & Expense Categories	
Sabre and Customer agree that Travel & Expenses will be managed by the following categories:
 
1.1	Air Travel	
 
 	(a)	Includes all air fare expenses including taxes that allow Sabre to travel to and from their home base to Mexico.	
 
 	(b)	Air travel will be space positive economy seating to/from Continental United States to/from Mexico;	
 
 	(c)	Sabre will use reasonable efforts to notify Customer fifteen (15) days in advance about travel arrangements;	
 
 	(d)	Customer will approve, coordinate and purchase travel itineraries for Sabre;	
 
 	(e)	All expenses such as change fees and additional airfare will be responsibility of the party that requests the change.	
 
1.2	Lodging Expense	
 
 	(a)	Includes expenses related to lodging in Mexico including breakfast expense and daily internet service;	
 
 	(b)	All lodging expenses listed above will be direct billed to Customer	
 
1.3	Meals & Incidentals	
 
 	(a)	A daily Per Diem allowance that provides for:	
 
 	(i)	Lunch and Dinner	
 
 	(ii)	Fees and tips	
 
 	(iii)	Transportation between places of lodging or Customer offices and places where meals are taken	
 
 	(iv)	Laundry and Dry Cleaning	
 
 	(b)	Sabre will invoice Customer for Per Diem expenses	
 
1.4	Mexico Airport Transportation	
 
 	(a)	Includes ground transportation expenses to and from a Mexican airport to the hotel where Sabre personal will be lodging;	
 
 	(b)	Sabre will invoice Customer actual expenses for Mexico Airport Transportation expenses and provide the respective documents that support such expense.	
 
1.5	Local Transportation	
 
 	(a)	Includes ground transportation expenses to and from Customer’ offices and the hotel where Sabre personal will be lodging	
 
 	(b)	Sabre will invoice Customer actual expenses for Mexico Airport Transportation expenses and provide the respective documents that support such expense.	

Confidential	  	Page 85	  		

1.6	Point of Origin Ground Transportation	
 
 	(a)	A Per Diem allowance for ground transportation and/or airport parking for travel from point of origin airport to Customer site;	
 
 	(b)	This Per Diem allowance paid only once per trip	
 
 	(c)	Sabre will invoice Customer for Per Diem expenses	
 
2.	Per Diem Rates	
Sabre and Customer agree on the following Per Diem rates described in the table below:

Travel & Expense Category	  	Per Diem Rate	
Meals & Incidentals	  	US $50 per day including travel day	
Point of Origin Ground Transportation	  	US $70 per trip	
The management process for travel & incidentals will be mutually described in detail in the PPP.

Confidential	  	Page 86	  		

Exhibit 10.54
Hosted Services Agreement
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
CONFIDENTIAL
VOLARIS – JANUARY 29, 2013
NAVITAIRE HOSTED SERVICES AGREEMENT
Table of Contents

1	    	Definitions	  	 	3	  	
2	    	Scope of Services	  	 	5	  	
3	    	NAVITAIRE Obligations	  	 	5	  	
4	    	Customer Obligations	  	 	6	  	
5	    	Term and Termination	  	 	8	  	
6	    	Price and Payment	  	 	9	  	
7	    	License, Title, Modifications, and Covenants	  	 	11	  	
8	    	Indemnification	  	 	14	  	
9	    	Confidential Information	  	 	15	  	
10	    	Disclaimers and Limitations	  	 	16	  	
11	    	Publicity	  	 	16	  	
12	    	Relationship of the Parties	  	 	17	  	
13	    	No Assignment	  	 	17	  	
14	    	Force Majeure	  	 	17	  	
15	    	Industry Event	  	 	17	  	
16	    	Notices	  	 	18	  	
17	    	Waiver	  	 	18	  	
18	    	General	  	 	18	  	
EXHIBIT A	  	 	21	  	
HOSTED RESERVATION SERVICES - NEW SKIES®	  	 	21	  	
1	    	Definitions	  	 	21	  	
2	    	Scope of Services	  	 	24	  	
3	    	Implementation Services	  	 	24	  	
4	    	Data Circuits	  	 	30	  	
5	    	Support Center Support	  	 	30	  	
6	    	New Skies by NAVITAIRE Functionality Included in Hosted Reservation Services	  	 	31	  	
7	    	Customer Hardware, Software, Connectivity and Network Requirements	  	 	55	  	
8	    	Service Levels and Service Level Targets	  	 	58	  	
EXHIBIT B	  	 	66	  	
(INTENTIONALLY OMITTED)	  	 	66	  	
EXHIBIT C	  	 	67	  	
NAVITAIRE CONTACTS	  	 	67	  	
1	    	NAVITAIRE Support Center	  	 	67	  	
2	    	NAVITAIRE Commercial Account Manager	  	 	67	  	
3	    	NAVITAIRE Account Executive Sponsor	  	 	67	  	
4	    	NAVITAIRE Financial Contacts	  	 	67	  	
 
1

							
EXHIBIT D	  	 	68	  	
CUSTOMER CONTACTS	  	 	68	  	
1	    	Customer Emergency Contact	  	 	68	  	
2	    	Customer Account Liaison	  	 	68	  	
3	    	Customer Executive Sponsor	  	 	68	  	
4	    	Customer Authorized Support Contact	  	 	68	  	
5	    	Customer Financial/Accounts Payable Contact	  	 	69	  	
EXHIBIT E	  	 	70	  	
POWERED BY NAVITAIRE® MARK	  	 	70	  	
1	    	Mandatory Use of the Mark	  	 	70	  	
2	    	Guidelines for Using the NAVITAIRE Wired Mark	  	 	70	  	
3	    	License Grants and Restrictions	  	 	71	  	
4	    	No Further Conveyances	  	 	71	  	
5	    	No Endorsement	  	 	71	  	
6	    	Termination	  	 	71	  	
7	    	The Mark	  	 	71	  	
EXHIBIT F	  	 	72	  	
(INTENTIONALLY OMITTED)	  	 	72	  	
EXHIBIT G	  	 	73	  	
HOSTED REVENUE ACCOUNTING SERVICES - SKYLEDGER®	  	 	73	  	
1	    	Definitions	  	 	73	  	
2	    	Scope of Services	  	 	73	  	
3	    	Implementation Services	  	 	73	  	
4	    	Data Circuits	  	 	77	  	
5	    	Included Support	  	 	78	  	
6	    	Scheduled Maintenance	  	 	79	  	
7	    	Hosted Revenue Accounting Services Functionality	  	 	79	  	
8	    	Customer Hardware, Software, Connectivity and Network Requirements	  	 	83	  	
9	    	System Errors and System Changes	  	 	84	  	
EXHIBIT H	  	 	88	  	
(INTENTIONALLY OMITTED)	  	 	88	  	
EXHIBIT I	  	 	89	  	
EXHIBIT J	  	 	90	  	
EXHIBIT K	  	 	91	  	
PRICE AND PAYMENT	  	 	91	  	
1	    	Fee Schedule	  	 	91	  	
WORK ORDER TERMS AND FORM	  	 	97	  	
1	    	Additional Terms	  	 	97	  	
2	    	Form of Work Order	  	 	99	  	
Appendix A	  	 	102	  	
Change Request Form	  	 	102	  	
 
2

Hosted Services Agreement
 
NAVITAIRE HOSTED SERVICES AGREEMENT
This Hosted Services Agreement (the “Agreement”) is made between Navitaire LLC, a Delaware corporation (“NAVITAIRE”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d.b.a. Volaris) a Mexican sociedad anónima promotora de inversion de capital variable , (“Customer”), and shall be effective as of January 29, 2013 (“Effective Date”).
Recitals
 
A.	Accenture LLP is a global management consulting, technology services and outsourcing company.	
 
B.	NAVITAIRE, wholly owned by Accenture LLP, is an airline technology services company, which provides various services such as hosted reservation and revenue management services to airline companies worldwide.	
 
C.	The parties desire that NAVITAIRE provide to Customer Hosted Services (as defined in Section 1), and Customer desires to purchase such Hosted Services on the terms contained in this Agreement.	
NOW, THEREFORE, the parties agree as follows:
 
1	Definitions	
As used herein, the following terms shall have the meanings accorded them in this Section 1. In the event of any conflict between a definition set forth in this Section 1 and in any one contained in an Exhibit to this Agreement, the definition contained within such Exhibit shall control.
 
 	1.1	Affiliate of a party means any entity, whether incorporated or not, that is controlled by, controls, or is under common control with such party. “Control” means the ability, whether directly or indirectly, to direct the affairs of another by means of ownership, contract or otherwise.	
 
 	1.2	API(s) means Application Program Interface(s).	
 
 	1.3	Confidential Information has the meaning set forth in Section 9.1 hereof.	
 
 	1.4	Configurable Template means any of the templates comprising from time to time a part of the Hosted Services System and designed to permit Customer to configure the presentation and interfaces of the Hosted Services through the use of API(s) made available by NAVITAIRE as a part of Hosted Services for such purpose.	
 
 	1.5	Contract Year means each twelve (12) month period commencing at the Target Date listed for Hosted Reservation Services in Exhibit A. If Hosted Reservation Services are not in scope of the Agreement, the Target Date in the applicable exhibit is used to determine the Contract Year.	
 
 	1.6	Customer Authorized Support Contact(s) has the meaning set forth in Exhibit D.	
 
 	1.7	Custom Enhancement Request means a request by Customer to modify the Hosted Services System used by NAVITAIRE to provide the Hosted Services.	
 
 	1.8	Customer Account Liaison has the meaning set forth in Exhibit D.	
 
 	1.9	Customer Personal Data means data which is owned or controlled by Customer, which NAVITAIRE has access to and/or otherwise processes for the purpose and during the provision of the Services, and which names or identifies a natural person including, without limitation: (a) data that is explicitly defined as a regulated category of data under data protection laws applicable to Customer; (b) non-public personal data, such as national identification number, passport number, social security number, driver’s license number; (c) health or medical information, such as insurance information, medical prognosis, diagnosis information or genetic information; (d) financial information, such as a policy number, credit card number and/or bank account number; and/or (e) sensitive personal data, such as race, religion, marital status, disability, or sexuality.	
 
3

Hosted Services Agreement
 
 	1.10	Deliverables mean Materials that are originated and prepared for Customer by the Service Provider (either independently or in concert with Customer or third parties) and delivered to Customer during the course of the NPS Services under this Agreement, within the scope of a Work Order, as described in the Work Order form included in Exhibit L of this Agreement.	
 
 	1.11	Emergency has the meaning set forth in Section 5 of Exhibits A and G.	
 
 	1.12	Enhancement has the meaning set forth in Section 8 of Exhibit A and Section 9 of Exhibit G.	
 
 	1.13	Hosted Reservation Services means the services described in Exhibit A; provided that if Hosted Reservation Services are not designated as being contracted for in Section 2, Exhibit A shall be blank or not appended and this Agreement shall not cover such type of services.	
 
 	1.14	Hosted Revenue Accounting Services means the services described in Exhibit G; provided that if Hosted Revenue Accounting Services are not designated as being contracted for in Section 2, Exhibit G shall be blank or not appended and this Agreement shall not cover such type of services.	
 
 	1.15	Hosted Services or Services means Hosted Reservation Services and/or Hosted Revenue Accounting Services, as designated in Section 2 of this Agreement. Hosted Services are provided by NAVITAIRE and its Affiliates.	
 
 	1.16	Hosted Services System means with respect to Hosted Reservation Services and Hosted Revenue Accounting Services, the hardware and software used by NAVITAIRE to provide such Services as well as in each case any user or other documentation associated therewith (including Configurable Templates and any associated API(s)).	
 
 	1.17	Implementation Services has the meaning set forth in Section 3 of Exhibits A and G.	
 
 	1.18	Included Support has the meaning set forth in Section 5 of Exhibits A and G.	
 
 	1.19	Initial Term has the meaning set forth in Section 5.1 hereof.	
 
 	1.20	Interrupted Service means a complete system availability outage of ***** due to the following:	
 
 	•	 	NAVITAIRE controlled primary circuit network line being down;	
 
 	•	 	NAVITAIRE controlled server or router being down; or	
 
 	•	 	System Error which causes the system to be completely unavailable.	
 
 	1.21	Invoicing Currency means the currency that NAVITAIRE uses in preparation of monthly Customer invoices. The Invoicing Currency for this Agreement is *****	
 
 	1.22	Major Release has the meaning set forth in Exhibit A, Section 8.	
 
 	1.23	Mark has the meaning set forth in Section 4.11 hereof and in Exhibit E.	
 
 	1.24	Materials mean work product and other materials, including without limitation, reports, documents, templates, studies, software programs in both source code and object code, specifications, business methods, tools, methodologies, processes, techniques, solution construction aids, analytical frameworks, algorithms, know-how, processes, products, documentation, abstracts and summaries thereof.	
 
 	1.25	NAVITAIRE Account Manager means the NAVITAIRE Commercial Account Manager and/or other NAVITAIRE representatives as designated in Customer’s copy of the NAVITAIRE Procedures Manual, provided by the NAVITAIRE Support Center.	
 
 	1.26	NAVITAIRE Property has the meaning set forth in Section 7.2 hereof.	
 
4

Hosted Services Agreement
 
 	1.27	NPS means Navitaire Professional Services. , a division of Navitaire LLC that specializes in providing custom solutions to NAVITAIRE customers.	
 
 	1.28	Passive/Informational Segment means a Segment on the host PNR for informational notice of flights on other airlines, which does not directly affect the host’s flight inventory.	
 
 	1.29	PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, which may contain one or more passenger names, but does not necessarily contain active or inactive booked Segments.	
 
 	1.30	Professional Services means the services performed for Customer by NAVITAIRE, as the Service Provider, pursuant to Exhibit L of this Agreement and a mutually agreed, written Work Order, as contemplated by the Work Order form included in Exhibit L of this Agreement.	
 
 	1.31	Segment or Host Segment means a nonstop individual booked flight segment or passive/informational segment.	
 
 	1.32	Service Fees means the fees payable by Customer as specified in Exhibit K.	
 
 	1.33	Service Levels means targets included in Exhibit A, Section 8.	
 
 	1.34	Service Provider means the entity described in the Professional Services definition.	
 
 	1.35	Support Center or NAVITAIRE Support Center means the NAVITAIRE facility that accepts phone and Internet based customer support tool service requests related to Hosted Services.	
 
 	1.36	Support Center Support has the meaning set forth in Section 5 of Exhibit A and G.	
 
 	1.37	Support Fees means fees payable by Customer for applicable NAVITAIRE Support Center Support as specified in Exhibit K.	
 
 	1.38	Target Date means the completion date for Implementation Services for each of the defined Hosted Services as outlined in Section 3 of Exhibits A and G unless the Target Date has been changed as outlined in Exhibit K. In the event that Customer utilizes the Hosted Services for live production use before the Target Date, the Target Date will be deemed to be the first date of production use of such Hosted Services. The specific Target Date for each of the Services is located in Section 3.9.1 of Exhibits A and G.	
 
2	Scope of Services	
For purposes of this Agreement, Hosted Services include (as designated by ‘X’) the following:

‘X’
or ‘N/A’	  	Hosted Services	
X	  	Hosted Reservation Services (or certain types thereof), as designated in and the provision of which is governed by Exhibit A hereto.	
X	  	Hosted Revenue Accounting Services, as designated in and the provision of which is governed by Exhibit G hereto.	
In addition, the parties may further agree that NAVITAIRE will provide Professional Services pursuant to Exhibit L, if the parties agree and execute a written Work Order in a form similar to the example contained within Exhibit L.
Unless expressly identified as being hosted by NAVITAIRE in the table above, Customer shall be responsible for managing any hosted environments required to support any NAVITAIRE or third party products.
 
3	NAVITAIRE Obligations	
NAVITAIRE shall perform the Hosted Services in accordance with this Agreement ***** NAVITAIRE may utilize subcontractors to perform its obligations under this Agreement. *****
 
5

Hosted Services Agreement
 
4	Customer Obligations	
 
 	4.1	General Obligations. Customer shall comply with the obligations set forth herein including, but not limited to, those set forth in Exhibits A and G.	
 
 	4.2	Access and Cooperation. Customer will provide NAVITAIRE with access to and use of its data, internal resources, and facilities, and shall otherwise cooperate with NAVITAIRE as reasonably required by NAVITAIRE, ***** in connection with the implementation and provision of Hosted Services. Customer gives permission to NAVITAIRE to transmit data to third parties *****.	
 
 	4.3	Notice of Increased Usage and Hosted Reservation and/or Web Services Processing Capacity. Customer agrees to provide NAVITAIRE, on a confidential basis and according to a NAVITAIRE pre-defined process, at least ***** advance written notice of any marketing initiatives, acquisitions, alliances, schedule changes, or promotions that may materially increase Customer’s usage of the Hosted Reservation and/or Web Services or otherwise adversely impact the Hosted Reservation and/or Web Services System performance. Examples of this include, without limitation, free ticket/$0 fare promotions, new hub announcements, significant additional aircraft purchases, etc. For the purposes of this Section, a material increase is an increase that generates a response greater than the peak Hosted Reservation and/or Web Services Processing Capacity, comprised of Segments booked per hour and Availability Requests made per hour, as described in this Section. If Customer requires additional capacity above the peak Segments booked per hour and/or peak Availability Requests made per hour, NAVITAIRE will endeavor to provide a quote to Customer based on the requirements and scope desired, and the timeline on which such additional capacity can be made available to Customer.	
NAVITAIRE’s Hosted Reservation and/or Web Services Processing Capacity for ***** is based on multiplying the Monthly Minimum Segment Guarantee by ***** and dividing the result by *****). For the purposes of illustration, if the Monthly Minimum Segment guarantee is ***** that number is multiplied by ***** and then divided by ***** The resulting ***** constitute the peak Hosted Services Processing Capacity for *****.
The Hosted Reservation and/or Web Services Processing Capacity for Availability Requests (as defined in Exhibit A, Section 1) is based on multiplying the number of looks defined in the Look to Booked Segment ratio (as provided in Exhibit K) by the monthly minimum Segment guarantee *****. For the purposes of illustration, if the Monthly Minimum Segment Guarantee is ***** the monthly minimum Segment guarantee ***** is ***** divided by *****). The resulting ***** is the monthly minimum Segment guarantee *****. If the Look to Booked Segment ratio is defined as *****, the Hosted Reservation and/or Web Services Processing Capacity for Availability Requests is calculated by taking the ***** and multiplying it by ***** The resulting ***** is the Hosted Services Processing Capacity for Availability Requests.
NAVITAIRE will not be obligated to fulfill Service Level parameters, as outlined in Exhibit A, Section 8 when Customer’s volume exceeds the peak Hosted Reservation and/or Web Services Processing Capacity for ***** and/or Availability Requests made per hour, as defined in this paragraph *****.
 
 	4.4	Notice of Additional Data Storage Requirements. During the Term of this Agreement NAVITAIRE agrees to provide Customer with completed travel historical data storage capacity equal to ***** of historical PNR level booking activity detail available in the On-Line Transaction Processing (“OLTP”) database and accessible from the Hosted System interfaces, along with an additional ***** of read-only historical PNR data available in the archive database and accessible from SkySpeed. If Customer desires additional data storage in excess of ***** available, Extended PNR Archiving may be contracted for as outlined in Exhibit K.	
 
6

Hosted Services Agreement
 
 	4.5	Annual Segment Forecast Update. Customer agrees to provide NAVITAIRE each ***** with projected annual Segment volume forecast for the following year. NAVITAIRE will use Customer’s Segment forecast for business planning purposes for providing Hosted Services.	
 
 	4.6	Customer Contacts. Customer initially designates the person set forth in Exhibit D, Section 2 as the Customer Account Liaison, being the primary authorized contact for account management, project funding, performance, payment, and other commercial issues with respect to the Hosted Services. Customer further initially designates the person(s) set forth in Exhibit D, Section 6 as the Customer Authorized Support Contact(s), being the authorized contact(s) to utilize the telephone support and Internet technical support system. Customer will ensure that all Customer Authorized Support Contact(s) will have received adequate training on the Hosted Services. Customer may change their designated Customer Account Liaison or Customer Authorized Support Contact(s) by written notice to NAVITAIRE.	
 
 	4.7	Customer Costs. Customer will be responsible for all its own costs and expenses except for those specifically assumed by NAVITAIRE under this Agreement.	
 
 	4.8	Use by Customer. Hosted Services and Confidential Information of NAVITAIRE are for the sole and exclusive use of Customer and excludes any Affiliates of Customer ***** Customer may, however, permit agents hired by Customer or Customer’s subcontractors to access the Hosted Services solely for the purpose of procuring Hosted Services for and on behalf of Customer; provided that ***** (a) Customer promptly provides NAVITAIRE with the names of each such agent; and (b) each such agent agrees to be bound by: ***** confidentiality provisions ***** Section 9, ***** hereof. Customer may not transfer any Confidential Information of NAVITAIRE, in any form whatsoever, to any other third party or allow any third party to access or use the Hosted Services or Confidential Information of NAVITAIRE without the prior written consent of NAVITAIRE. Any transfer of or access to the Hosted Services or Confidential Information of NAVITAIRE in violation of this Section shall constitute a material breach of this Agreement. For purposes of reference, Section 7 contains further terms and conditions regarding Customer’s use of the Hosted Services System.	
 
 	4.9	Training. Except for any initial training provided by NAVITAIRE as described in Exhibits A and G, Customer will be responsible for training its employees and authorized agents and subcontractors in the use of Hosted Services including, but not limited to, use of any new functions or Enhancements. *****.	
 
 	4.10	Telecommunications and Equipment. Unless otherwise specified in Exhibits A and G, Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s). Customer shall provide, install, and operate compatible hardware and communications equipment, which meets NAVITAIRE required specifications as listed in Exhibit A, Section 7 and Section 8 of Exhibit G, necessary for connecting to the Hosted Services System. Customer is required to have Internet access and Internet electronic mail capability in order to communicate with NAVITAIRE support. Customer agrees to order all required circuits it is responsible for within ***** of execution of this Agreement. In the event that the Target Date is greater than ***** following the Effective Date of this Agreement, Customer may order all required circuits at a later date but no less than ***** prior to the Target Date. The data circuits must be of capacity sufficient to accommodate all Hosted Services and meet any defined Service Levels. All Customer connections to the NAVITAIRE network must be a Layer 3 connection via a router or firewall. Included in the standard pricing are ***** network rack space in the NAVITAIRE data center for Customer network hardware. All Customer network devices must include rack mounting hardware and any device used for serial connections must include built-in CSU/DSUs. All Customer devices housed in the NAVITAIRE data center require console connections for remote access and maintenance (i.e., Out-of-band or Lights-out management). NAVITAIRE will provide ***** console connections to Customer in the standard pricing for this remote access and maintenance. Additional rates***** will apply if Customer requires more console connections or rack space.	
 
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 	4.11	Acknowledgment. Customer agrees to include the Powered by NAVITAIRE® Mark (the “Mark***** under the terms and conditions set forth in Exhibit E of this Agreement. *****.	
 
 	4.12	Post Implementation Upgrade Release Management. Customer agrees to use Hosted Services that are provided through the latest release of the NAVITAIRE software***** included in the Hosted Services System and available for general distribution. ***** It is the intention of NAVITAIRE to make available and provide Support Center Support in respect to the most current version, or the latest version “minus one”, of NAVITAIRE software included in the Hosted Services System, however *****, NAVITAIRE reserves the right to require Customer to utilize the then most current version. Customer will be responsible, on a time and materials basis, for all costs associated with implementing an upgrade release including, but not limited to: project management; training; technical support; system integration services; business process analysis; and any required data transformation*****. Upgrade release requests will be initiated using the standard NAVITAIRE Work Order process *****.	
 
5	Term and Termination	
 
 	5.1	Term. Unless otherwise terminated earlier under this Section 5, this Agreement shall commence on the Effective Date and continue for an Initial Term period of ten (10) years following the first day of the month immediately following the Target Date for the respective Hosted Services. This Agreement will renew automatically for ***** additional ***** renewal terms unless one party provides written notice of termination to the other party at least ***** prior to the end of the initial or any renewal term. NAVITAIRE may increase the Service Fees payable by Customer with respect to any renewal term; provided that NAVITAIRE gives Customer written notice of such increase in Service Fees at least ***** prior to the end of the then current term, but otherwise the terms hereof and the Monthly Minimum Segment Guarantees applicable for the last year of the Initial Term shall likewise apply to each renewal term.	
 
 	5.2	Termination for Cause	
 
 	5.2.1	This Agreement may be terminated as follows:	
(a) by a party upon written notice to the other party in the event of material breach of the terms hereof by the other party which is not cured within ***** of written notice thereof;
(b) by NAVITAIRE upon written notice to Customer, if Customer fails to pay any amount due hereunder within ***** of the due date, NAVITAIRE provides written notice of such failure to Customer (which notice also constitutes the notice described in Section 6.5 hereof), and within ***** of delivery of such written notice such amount remains unpaid;
(c) by a party if the other party becomes, or is party as debtor to a proceeding in which it is alleged to be, bankrupt, insolvent or unable to pay its debts when due; or if it ceases to operate in the normal course of business, has a receiver appointed, or makes an assignment for the benefit of its creditors;
(d) by Customer upon written notice to NAVITAIRE *****(e) *****
(f) by Customer in the event*****
 
 	5.2.2	NAVITAIRE shall not be in breach ***** if its failure to perform hereunder is due to problems caused by Customer software and associated data, or by Customer hardware other than that recommended by NAVITAIRE in Exhibit A, Section 7 and Section 8 of Exhibit G herein or other equipment failures for hardware or other equipment not maintained by NAVITAIRE.	
 
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 	5.2.3	If Customer terminates due to material breach by NAVITAIRE, NAVITAIRE will ***** upon Customer’s request, provide Customer with Customer’s data for contracted Hosted Services, which will be provided in a NAVITAIRE defined data extract format and delivered via electronic media*****.	
 
 	5.2.4	If NAVITAIRE terminates due to Customer’s material breach, Customer will pay NAVITAIRE a sum comprised of: (i) *****; (ii) any reasonable attorneys’ costs that NAVITAIRE incurs as a result of Customer’s material breach and subsequent termination. NAVITAIRE will, upon Customer’s request ***** provide Customer with duplicates of Customer’s data for contracted Hosted Services, which will be provided in a NAVITAIRE defined data extract format and delivered via electronic media.	
 
 	5.3	Termination for Convenience.	
 
 	5.3.1	Upon the ***** anniversary of the live production use of the Hosted Reservation Services and for a period of ***** thereafter, *****:	
 
 	a)	In the ***** prior to the *****.; and	
 
 	b)	*****:	
 
 	(i)	*****, or	
 
 	(ii)	*****.	
 
 	c)	For example under ***** above*****and *****.	
 
 	5.4	Survival. No termination hereof shall release Customer from its obligation to pay NAVITAIRE in full for all Hosted Services performed by NAVITAIRE up to the date of termination, nor shall it affect any other obligations hereunder which expressly or by reasonable implication is intended to survive termination, including those set forth in Sections 6, 7, 8, 9, 10, and 19 hereof.	
 
6	Price and Payment	
 
 	6.1	Service Fees. In consideration for the provision of Hosted Services by NAVITAIRE as set forth in this Agreement, Customer will pay NAVITAIRE the Service Fees as set forth in Exhibit K and, as applicable, elsewhere in this Agreement.	
 
 	6.2	Expenses. Customer shall bear all ***** expenses incurred by NAVITAIRE personnel in connection with travel to Customer’s site(s) to prepare for and to implement the Hosted Services or to provide training, consulting, support, or other services at Customer’s site(s)*****. Such expenses shall include, without limitation, reasonable and timely air travel (it is NAVITAIRE’s policy to have all personnel travel business class for all flights ***** ground transportation, quality lodging including high-speed internet access, and NAVITAIRE’s standard per-diems for meals and ***** incidentals. NAVITAIRE shall, whenever reasonably possible, obtain advance written approval from Customer of applicable travel expenses and Customer may select one of the following options:	
 
 	a)	Customer Arranged Travel. Customer may arrange any such flight with a view to obtaining good value or for industry confirmed discounted space travel, ground transportation, and quality lodging, including high speed internet access.	
 
 	b)	NAVITAIRE Arranged Travel. NAVITAIRE can obtain travel arrangements through the NAVITAIRE corporate travel agency. In this case and in recognition of volume corporate discounts provided, NAVITAIRE will bill Customer, and Customer agrees to pay, the actual cost of such expenses.	
 
 	6.3	Payment Terms. All payments made under this Agreement shall be made in the Invoicing Currency either: (a) by electronic funds transfer, prepaid, to the bank account designated on the invoice; or (b) by check drawn on a United States bank and delivered to the address indicated on the invoice. Except where otherwise specifically set forth in	
 
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 	this Agreement, all payments under this Agreement are due within ***** Service Fees as stated in Exhibit K will be invoiced in advance at the beginning of each month for the Service Fees for the monthly minimum Segment guarantees listed in the monthly recurring Service Fees for the Hosted Services to be rendered for that month. Following the actual service month, NAVITAIRE will reconcile actual Customer transactions, and invoice Customer for any remaining balance. (By way of example, NAVITAIRE will invoice Customer on ***** for the Service Fees for the monthly minimum Segment guarantees for services to be performed from ***** through ***** *****, NAVITAIRE will reconcile using Customer’s actual transaction activity for February and invoice Customer for any transaction fees exceeding the previously invoiced minimum Service Fees.) Any amounts not paid when due will bear interest at the lesser of: (a) *****; or (b) the maximum rate allowable by law. In addition to any interest charge, any payments due that are more than ***** late will be subject to an automatic ***** late fee.	
 
 	6.4	Fee Adjustment	
 
 	6.4.1	Service Fees. The Service Fees identified in Exhibit K are all subject to the adjustments as set out in this Section 6.4.1 (the “Adjustable Amounts”). The Adjustable Amounts shall be adjusted annually on ***** of each year ***** and each following one year anniversary thereafter (the “Adjustment Date”) to account for inflation. On the Adjustment Date, if the U.S. Bureau of Labor Statistics Employment Cost Index for Compensation/Civilian Workers/White Collar/Professional and related Occupations (Not Seasonally Adjusted) as published by the Bureau of Labor Statistics of the Department of Labor (the “ECI”), (the “Current Index”), increases from the ECI applicable twelve (12) months prior thereto (the “Base Index”), then effective as of such Adjustment Date, the Adjustable Amounts, as previously adjusted, will be increased by the percentage that the Current Index increased from the Base Index. In such event, NAVITAIRE will provide to Customer a recalculation of the Adjustable Amounts. If the U.S. Bureau of Labor Statistics stops publishing the ECI or substantially changes the content of the ECI, the parties will substitute another comparable measure published by a mutually agreeable source. The parties agree that ***** During the Initial Term as stated in Section 5.1 hereof, NAVITAIRE will not otherwise increase the Service Fees for the Hosted Services functionality specified in Exhibit A, Section 6 and Section 7 of Exhibit G or for any subsequent functionality changes that are not defined as a Major Release.	
NAVITAIRE reserves the right to offer a Major Release which may include additional significant Enhancements such as API(s), Codeshare, Customer Value Rules, Recognition and Intelligent Seating Enhancement Set, GoNow, and GDS Type A/EDIFACT connectivity, at an additional charge above the fees described in Exhibit K of this Agreement. Customer has the option***** of paying such additional charges to enable such functionality or remain with current functionality and Hosted Services and fees as stated in Exhibit K. In the event that Customer accepts a significant Enhancement which will incur additional Service Fees, such fees will be communicated to Customer in advance, in writing, and upon Customer’s written acceptance, will be added to the applicable Service Fees.
 
 	6.4.2	Support Fees. The Support Fees identified in Exhibit K are all subject to the adjustments as set out in this Section 6.4.2 (the “Adjustable Amounts”). The Adjustable Amounts shall be adjusted annually on ***** of each year following the Effective Date (the “Adjustment Date”) to account for inflation. During the term, if the U.S. Bureau of Labor Statistics Employment Cost Index for Compensation/Civilian Workers/White Collar/Professional and related Occupations (Not Seasonally Adjusted) as published by the Bureau of Labor Statistics of the Department of Labor (the “ECI”), (the “Current Index”), increases from the ECI applicable ***** prior thereto (the “Base Index”), then effective as of such Adjustment Date, the Adjustable Amounts, as previously adjusted, will be	
 
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Hosted Services Agreement
 
 	increased by the percentage that the Current Index increased from the Base Index. In such event, NAVITAIRE will provide to Customer a recalculation of the Adjustable Amounts. If the U.S. Bureau of Labor Statistics stops publishing the ECI or substantially changes the content of the ECI, the Parties will substitute another comparable measure published by a mutually agreeable source. The parties agree that*****	
 
 	6.4.3	Notice. NAVITAIRE shall give Customer not less than ***** prior written notice of any increase in the Service Fees or Support Fees.	
 
 	6.5	Failure to Pay. If Customer fails to pay any ***** within ***** of the date due, NAVITAIRE may provide written reminder notice of such failure to Customer (this notice also constitutes the notice described in Section 5.2.1 (b) of this Agreement). If, within ***** of delivery of such written notice such sum remains unpaid, NAVITAIRE may, without breach of this Agreement, discontinue performing under this Agreement until all due but unpaid payments are received*****.	
 
 	6.6	Taxes. Customer shall pay or, if NAVITAIRE so requires, reimburse NAVITAIRE for all taxes in connection with this Agreement***** ***** including, sales, use, excise, value-added, goods and services, consumption, and other similar taxes or duties ***** any payment for service, product or technology provided by NAVITAIRE be subject to withholding tax *****, Customer shall reimburse NAVITAIRE for such withholding tax. Each Party shall provide and make available to the other Party any resale, exemption, multiple points of use certificates, treaty certification and other exemption information reasonably requested by the other Party. If Customer shall pay any tax incurred in connection with this Agreement, Customer agrees to remit to NAVITAIRE within ***** of issue, tax documents which support the payment of such taxes. Customer agrees to reimburse and hold NAVITAIRE harmless from any deficiency (including penalties and interest) relating to taxes that are the responsibility of Customer under this paragraph. ***** Each party shall be responsible for taxes based on its own net income, employment taxes of its own employees, and for taxes on any property it owns or leases. For purposes of this Agreement, taxes shall include taxes incurred on transactions between and among NAVITAIRE and its Affiliates.	
*****
 
7	License, Title, Modifications, and Covenants	
 
 	7.1	License. NAVITAIRE will grant such access to Customer to the Hosted Services System as is necessary to use such System to obtain the Hosted Services in accordance with NAVITAIRE policies and procedures, and subject to Section 7.2 of this Agreement, NAVITAIRE hereby grants Customer a non-exclusive, non-transferable, worldwide license to use the Hosted Services System to the extent of the access provided during the term of this Agreement solely for the purposes of obtaining Hosted Services in accordance herewith *****.	
All licenses will be transferred by remote telecommunications from NAVITAIRE’s place of business, to or through Customer’s computer, and Customer will not obtain possession of any tangible personal property, such as electronic storage media.
 
 	7.2	Title. Subject to Sections 7.1 and 7.3 of this Agreement, NAVITAIRE hereby retains all of its right, title, and interest in and to the Hosted Services System, and copyrights, patents, trademarks, service marks, design rights (whether registered or unregistered), trade secrets, know-how, expertise, and all other similar proprietary rights associated therewith (“Intellectual Property Rights”) and/or which are developed in connection with this Agreement, irrespective of whether developed by NAVITAIRE individually or by NAVITAIRE and Customer jointly (the “NAVITAIRE Property”), which shall include without limitation: (a) the source code of software included in the NAVITAIRE Property, where applicable; and (b) all modifications, extensions, upgrades, and derivative works of the NAVITAIRE Property. In confirmation of NAVITAIRE’s right, title and interest in the	
 
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 	NAVITAIRE Property as set forth in the preceding sentence of this Section 7.2, Customer hereby assigns to NAVITAIRE all of its right, title and interest in and to the NAVITAIRE Property. *****	
 
 	7.3	Modifications	
 
 	7.3.1	By NAVITAIRE. Without prejudice to Section 6.4 of this Agreement or any other provision of this Agreement, NAVITAIRE may upgrade, modify and replace the Hosted Services System or any part thereof at any time during the term of this Agreement, provided that:	
 
 	a)	NAVITAIRE notifies Customer at least ***** prior to implementation of any upgrades or replacements of the Hosted Services System which are likely to materially alter the delivery of Hosted Services;	
 
 	b)	all upgrades and replacements which might reasonably be expected to materially alter the delivery of Hosted Services are scheduled for implementation as reasonably required by NAVITAIRE*****; and	
 
 	c)	with introduction of any upgrades***** or replacements, NAVITAIRE maintains the comparable level of services.	
Nothing in this Section 7.3.1: (i) releases NAVITAIRE from providing Hosted Services under the terms and conditions of this Agreement; or (ii) obligates NAVITAIRE to upgrade or replace the Hosted Services System at any time. It is the intention of NAVITAIRE to make available and provide Support Center Support in respect to the most current version, or the most recent prior release of the current version, of NAVITAIRE software included in the Hosted Services System; however, ***** NAVITAIRE reserves the right to require Customer to utilize the then most current version.
 
 	7.3.2	By Customer . Customer shall not reverse engineer, disassemble, decompile, unlock, copy, alter, modify, change, create derivatives of or in any other way reproduce or use any of the software code, programs, or components of the Hosted Services System, provided that:	
 
 	a)	Customer may use the API(s) provided by NAVITAIRE from time to time for such purpose as a part of Hosted Services solely to configure the Configurable Templates for use as a part of such Services; and	
 
 	b)	Without prejudice to the rights of Customer in its trademarks and services, Customer shall have no right following termination of this Agreement to use the Configurable Templates or any configurations thereof, or any API(s) or source code provided by NAVITAIRE, or any modifications, changes or derivatives thereof created, in any such case whether created by or for Customer or otherwise, all of which are hereby assigned by Customer to NAVITAIRE as contemplated by Section 7.2 hereof.	
 
 	7.4	Customer Covenants. Customer hereby covenants and agrees that:	
 
 	a)	the NAVITAIRE Property may be used by NAVITAIRE and its Affiliated companies to facilitate delivery of similar services to other customers; and	
 
 	b)	Customer shall not access or use any API(s) embedded in the Hosted Services System except as authorized by NAVITAIRE and in connection with the Hosted Services; and	
 
 	c)	without limiting the provisions set forth in Section 4.8 of this Agreement, no person other than Customer ***** (including no Affiliate of Customer, merger, acquisition, or otherwise), shall obtain access to Hosted Services or use the Hosted Services System absent a written agreement signed by NAVITAIRE; and	
 
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 	d)	NAVITAIRE has enabled features in its Hosted Services to allow Customers and third parties to access the Hosted Services and to modify certain NAVITAIRE products and applications, using software products and applications not developed by NAVITAIRE. Should there be a failure of a software product or application not developed by NAVITAIRE, or should such software product or application cause NAVITAIRE provided Hosted Services to fail or to be adversely impacted, NAVITAIRE shall, at its sole ***** discretion, disable the offending software product or application, deny access to NAVITAIRE Hosted Services, and hold Customer liable for all damages incurred by NAVITAIRE in such circumstance. Software products and applications or modification to software products or applications not developed by NAVITAIRE that fail or cause NAVITAIRE Hosted Services to fail shall also suspend any Service Levels in this Agreement or other commitments previously agreed between the parties.	
 
 	7.5	Mutual Covenants. Each party represents and warrants to the other party that as of the Effective Date of this Agreement:	
 
 	a)	it has the requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement; and	
 
 	b)	the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement shall not constitute a material default under any material contract by which it or any of its material assets are bound, or an event that would, with notice of lapse of time or both, constitute such a default.	
 
 	7.6	Compliance With Laws	
 
 	7.6.1	Notwithstanding any other provision of this Agreement to the contrary other than Section 7.6.2 below, each party will retain responsibility for its compliance with all applicable laws and regulations relating to its respective business and facilities and the provision of services to third parties. In performing their respective obligations under this Agreement, neither party will be required to undertake any activity that would violate any applicable laws or regulations.	
 
 	7.6.2	Notwithstanding any other provision of this Agreement to the contrary:	
 
 	a)	Each party shall retain responsibility for its compliance with all applicable export control laws and economic sanctions programs relating to its respective business, facilities, and the provision of services to third parties; and	
 
 	b)	Neither Party shall be required by the terms of this Agreement to be directly or indirectly involved in the provision of goods, software, Deliverables, work, services and/or technical data that may be prohibited by applicable export control or economic sanctions programs.	
Applicable export control or economic sanctions programs may include U.S. export control laws such as the Export Administration Regulations and the International Traffic in Arms Regulations, and U.S. economic sanctions programs that are or may be maintained by the U.S. Government, including sanctions currently imposed against Belarus, Burma (Myanmar), Cuba, Iran, Iraq, Ivory Coast, Liberia, North Korea, Sudan, Syria and Zimbabwe, as well as Specially Designated Nationals and Blocked Persons programs. NAVITAIRE and Customer will comply with U.S. export control and U.S. economic sanctions laws with respect to the export or re-export of U.S. origin goods, software, services and/or technical data, or the direct product thereof.
The parties understand and agree that this Agreement shall not require NAVITAIRE to provide or support services involving Cuba, Iran, Myanmar (Burma), Sudan, Syria, North Korea, Specially Designated Nationals, and/or Blocked Persons, either directly or indirectly, including through the use of subcontractors.
 
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Prior to providing NAVITAIRE with any goods, software, Deliverables, work, services and/or technical data subject to export controls controlled at a level other than EAR99/AT, Customer shall provide written notice to NAVITAIRE specifying the nature of the controls and any relevant export control classification numbers. NAVITAIRE may decline to receive goods, software, services and/or technical data subject to export controls at a level other than EAR99/AT. Customer shall take steps to ensure that where NAVITAIRE is required to provide any entity/third party with any goods, software, Deliverables, work, services and/or technical data arising from or under the performance of this Agreement, Customer shall take steps to ensure that any such provision of goods, software, Deliverables, work, services and/or technical data to such entity is not subject to restrictions or prohibitions under applicable export control or economic sanctions programs.
NAVITAIRE shall have the right, at its sole discretion, to refrain from being directly or indirectly involved in the provision of goods, software, Deliverables, work, services and/or technical data that may be prohibited by applicable export control laws or economic sanctions programs, without liability to Customer.
 
8	Indemnification	
 
 	8.1	Rights to Indemnification. Each party shall defend the other party from any claims that any product, service, information, materials or other item provided by such party under this Agreement infringes *****; and indemnify such party for ***** in relation to such claim; provided that, however, a party shall have no defense or indemnity obligation under this Section 8.1 to the extent any such infringement results from: (a) the use of any software provided by the indemnifying party in combination, operation or use with software or hardware not provided by such indemnifying party; provided that, however, such exclusion shall not apply to the use by Customer of the Hosted Services System in connection with the hardware and software identified on the applicable Exhibit hereto; (b) the use of any Hosted Services System in a modified state which was not authorized by the indemnifying party; or (c) use of a version of the software included in the Hosted Services System without having implemented all of the updates within a reasonable period after such updates were provided by the indemnifying party and the indemnified party was advised that such update was intended to address an alleged infringement. Without limiting the foregoing indemnification obligations, if any product, service, information, material or other item of the indemnifying party is, or in the indemnifying party’s opinion is likely to be held to be, an infringing material, then the indemnifying party may, at its option: (i) procure the right to continue using it; (ii) replace it with a non-infringing equivalent; (iii) modify it to make it non-infringing*****; or (iv) if none of the foregoing can be accomplished in a commercially reasonable manner, cease using, and require the indemnified party to cease using such item, and if such cessation renders it impractical to continue the contractual relationship contemplated hereby, either party may also terminate this Agreement. The foregoing remedies constitute the indemnified party’s sole and exclusive remedies and the indemnifying party’s entire liability with respect to infringement.	
 
 	8.2	Notice and Control of Action. The party seeking indemnification in respect of any actual or potential claim or demand shall notify the other party within ***** after it receives written documents relating to such claim. The indemnifying party shall have no obligation to indemnify the other party to the extent such other party fails to give the notice within the specified period set forth in the preceding sentence and such failure materially prejudices the indemnifying party. The indemnifying party shall have the right, at its sole cost, expense, and liability, to appoint counsel of its choice and to litigate, defend, settle or otherwise attempt to resolve any such claim, provided that the indemnified party shall have the right to consent to any settlement, which consent will not be unreasonably withheld.	
 
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9	Confidential Information	
 
 	9.1	Notification. During the term of this Agreement, either party may receive or have access to ***** technical information, as well as information about product plans and strategies, promotions, customers, ***** and related non-technical business information that the disclosing party considers to be ***** confidential and which each party agrees shall be marked as confidential at the time of disclosure, or if disclosed orally but stated to be confidential, shall be designated as confidential in a document prepared by the disclosing party that summarizes the Confidential Information disclosed and sent to the receiving party within ***** after such verbal disclosure *****; provided that the Hosted Services System shall in any event be dealt with as confidential information of NAVITAIRE (with respect to a party its “Confidential Information”). The fees payable under, and the material terms of, this Agreement are agreed to be Confidential Information of each party.	
 
 	9.2	Use and Protection of Information. Confidential Information may be used by the receiving party only in furtherance of the transactions contemplated by this Agreement, and only by those employees of the receiving party and its agents or subcontractors who have a need to know such information for purposes related to this Agreement, provided that such agents or subcontractors have signed separate agreements containing substantially similar confidentiality provisions. Except as permitted in this Agreement, ***** The receiving party and its agents and subcontractors shall protect the Confidential Information of the disclosing party by using the same degree of care (but not less than a reasonable degree of care) to prevent the unauthorized use, dissemination, or publication of such Confidential Information as the receiving party uses to protect its own confidential information of a like nature and value. The receiving party’s, as well as its agents’ and subcontractors’, obligation under this Section shall be for a period of ***** after the date of disclosure or ***** from the end of the Agreement term, whichever is greater; provided that the obligation of Customer to refrain from using, and to protect the confidentiality of the Hosted Services System and Professional Services and Deliverables shall continue indefinitely.	
 
 	9.3	Exclusions. Nothing in this Agreement shall prohibit or limit either party’s use of information which it can demonstrate by written evidence was: (a) previously known to it without obligation of confidence; (b) independently developed by it; (c) acquired by it from a third party which is not, to its knowledge, under an obligation of confidence with respect to such information; or (d) which is or becomes publicly available through no breach of this Agreement.	
 
 	9.4	Subpoena. In the event a receiving party or its agents and subcontractors receives a subpoena or other validly issued administrative or judicial process requesting Confidential Information of the other party, the receiving party shall provide prompt notice to the other of such subpoena or other process. The receiving party, its agents and subcontractors, as the case may be, shall thereafter be entitled to comply with such process to the extent required by law. If a party or its agents and subcontractors is served with a subpoena or other validly issued administrative or judicial process in relationship to the matters contemplated hereby and arising from a proceeding in which the other party is a defendant and the served party, its agents and subcontractors, is not, such other party shall pay all the reasonable out-of-pocket expenses of the served party, its agents and subcontractors, associated with such subpoena or other administrative or judicial process.	
 
 	9.5	Privacy of Information. NAVITAIRE shall protect Customer Personal Data during performance of the Services in accordance with laws to which NAVITAIRE is subject as a service provider or data processor and any specific written instructions or protocols that are agreed in writing by the parties as may be reasonably needed in order to support Customer’s compliance with laws to which it is subject.	
 
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In the event that NAVITAIRE will process Customer Personal Data of EU origin (as those terms are defined by EU Data Protection Directive 95/46/EC), then NAVITAIRE and Customer shall execute the standard contractual clauses for transfers to Processors located in third countries authorized by EU Commission Decision 85/2010 (“EU Model Clauses”).
 
 	9.6	Upon termination of this Agreement, *****.	
 
10	Disclaimers and Limitations	
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT:
 
 	10.1	THE AGGREGATE LIABILITY OF NAVITAIRE UNDER OR IN CONNECTION WITH THIS AGREEMENT AND THE PROVISION OF HOSTED SERVICES TO CUSTOMER, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT, OR OTHERWISE), SHALL NOT EXCEED THE LARGER OF ***** OR THE AGGREGATE AMOUNT PAID BY CUSTOMER FOR SERVICE FEES DURING THE ***** PRECEDING THE DATE SUCH LIABILITY IS PAID;	
 
 	10.2	NAVITAIRE HEREBY DISCLAIMS AND EXCLUDES ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS BASED ON THE USE OR POSSESSION OF ANY PRODUCT, SERVICE OR RELATED MATERIALS PROVIDED UNDER THIS AGREEMENT BY NAVITAIRE;	
 
 	10.3	NAVITAIRE INTERRUPTED SERVICE WILL NOT INCLUDE DOWNTIME DUE TO DENIAL OF SERVICE (“DOS”) ATTACKS ON CUSTOMER WEB SITES;	
 
 	10.4	NEITHER PARTY SHALL BE LIABLE FOR ANY EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES OF ANY KIND, OR LOSS OR EXPENSES (INCLUDING, BUT NOT LIMITED TO, BUSINESS INTERRUPTION, LOST BUSINESS, LOST PROFITS, OR LOST SAVINGS) EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;	
 
 	10.5	WITH THE EXCEPTION OF THE PROVISION SET FORTH IN SECTION 8.1, NAVITAIRE SHALL NOT BE LIABLE FOR ANY CLAIMS OF THIRD PARTIES RELATING TO THIS AGREEMENT AND TO THE PROVISION OF HOSTED SERVICES, AND CUSTOMER SHALL DEFEND NAVITAIRE FROM, AND INDEMNIFY AND HOLD NAVITAIRE HARMLESS AGAINST, ALL SUCH CLAIMS;	
 
 	10.6	EACH PARTY HAS A DUTY ***** TO MITIGATE THE DAMAGES THAT WOULD OTHERWISE BE RECOVERABLE FROM THE OTHER PARTY PURSUANT TO THIS AGREEMENT, BY TAKING APPROPRIATE AND COMMERCIALLY REASONABLE ACTIONS TO REDUCE OR LIMIT THE AMOUNT OF SUCH DAMAGES OR AMOUNTS; AND	
 
 	10.7	***** *****.	
THE FOREGOING STATES THE ENTIRE LIABILITY OF NAVITAIRE WITH REGARD TO THIS AGREEMENT AND THE PROVISION OF HOSTED SERVICES HEREUNDER. THE LIMITATIONS OF LIABILITY CONTAINED IN THIS SECTION 10 ARE A FUNDAMENTAL PART OF THE BASIS OF NAVITAIRE’S BARGAIN HEREUNDER, AND NAVITAIRE WOULD NOT ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATIONS.
 
11	Publicity	
All advertising, press releases, public announcements and public disclosures by either party relating to this Agreement which includes: (i) the other party’s name, trade names, trademarks, logos, service marks or trade dress (collectively, “Name”); or (ii) language from which the connection of such Name may be inferred or implied, will be coordinated with and subject to approval by both parties prior to release; provided, however, that (iii) either party may indicate to
 
16

Hosted Services Agreement
 
third parties that NAVITAIRE is providing services to Customer, including NAVITAIRE’s right to use Customer’s Name within an airline “tailfin” shape for that purpose; and (iv) NAVITAIRE may use Customer as a reference.
 
12	Relationship of the Parties	
The relationship of the parties under this Agreement is and at all times shall remain that of independent contractors. Nothing in this Agreement or the attached Exhibits shall be construed to create a joint venture, partnership, franchise, employment or agency relationship between the parties to this Agreement, and accordingly, neither party shall represent itself as having, nor does either party have, the right, power, or authority to bind or otherwise create any obligation or duty, express or implied, on behalf of the other party in any manner whatsoever. *****
 
13	No Assignment	
Neither party to this Agreement shall have the right to assign this Agreement or any right or obligation hereunder, whether by operation of law or otherwise, without the prior written consent of the other party*****, provided that NAVITAIRE may assign or delegate obligations ***** to: (i) any of its Affiliates; and/or (ii) to any entity that acquires all or substantially all of the assets of NAVITAIRE or to successor in a merger or acquisition of NAVITAIRE *****.
 
14	Force Majeure	
 
 	14.1	Each Party will be excused from performance under this Agreement (other than obligations to make payments that have become due and payable pursuant to this Agreement *****) for any period and to the extent that it is prevented from performing any obligations pursuant to this Agreement, in whole or in part, as a result of a Force Majeure Event. If either Party is prevented from, or delayed in performing any of its obligations under this Agreement by a Force Majeure Event, it will promptly notify the other Party by telephone (to be confirmed in writing within five days of the inception of the delay) of the occurrence of a Force Majeure Event and describe, in reasonable detail, the circumstances constituting the Force Majeure Event and of the obligations, the performance of which are thereby delayed or prevented. Such Party will continue to use commercially reasonable efforts to recommence performance whenever and whatever extent possible without delay.	
 
 	14.2	A “Force Majeure Event” will mean the occurrence of an event or circumstance beyond the reasonable control of a Party, and will include, without limitation; (i) explosions, fires, flood, earthquakes, catastrophic weather conditions, diseases, or elements of nature or acts of God; (ii) acts of war (declared or undeclared), acts of terrorism, insurrection, riots, civil disorders, rebellion or sabotage; (iii) acts of national, prefectural, local or foreign governmental authorities or courts, national or state of emergencies, or changes in laws; (iv) labor disputes, lockouts, strikes or other industrial action, whether direct or indirect and whether lawful or unlawful; (v) failures or fluctuations in electrical power or telecommunications service or equipment, expropriation, condemnation of facilities or destruction, in whole or part, of the equipment or property necessary to perform the Services; and (vi) delays or failures caused by the other Party or the other Party’s performance or third party nonperformance (except that a Party will not be excused for delays or failures caused by such Party’s ***** subcontractors or agents unless the event or circumstance is a Force Majeure Event as to such ***** subcontractor or agent).	
 
 	14.3	In case such Force Majeure Event *****.	
 
 	14.4	If the Force Majeure Event continues for a period of *****, *****.	
 
15	Industry Event	
In the event of *****Factors to be considered include but are not limited to the following*****
 
17

Hosted Services Agreement
 
16	Notices	
All notices and communications that are permitted or required under this Agreement shall be in writing and shall be sent to the address of the parties as set forth immediately below, or such other address as the representative of each party may designate by notice given in accordance with this Section. Any such notice may be delivered by hand, by overnight courier or by facsimile transmission, and shall be deemed to have been delivered upon receipt.
As of the date of this Agreement, the addresses of the parties are as follows:

   	  	VOLARIS	  	NAVITAIRE	
			
Attention:	  	*****	  	*****	
			
Address:	  	*****	  	*****	
			
Telephone:	  	*****	  	*****	
			
Fax:	  	*****	  	*****	
 
17	Waiver	
Neither party’s failure to exercise any of its rights under this Agreement shall constitute or be deemed to constitute a waiver or forfeiture of such rights.
 
18	General	
 
 	18.1	Entire Agreement, Amendments, and Work Orders. This Agreement and its Exhibits constitute the entire agreement between NAVITAIRE and Customer, and supersede any prior or contemporaneous communications, representations, or agreements between the parties, whether oral or written, regarding the subject matter of this Agreement. The terms and conditions of this Agreement may not be changed except by an amendment signed by an authorized representative of each party. Professional Services and Deliverables will be requested in a Work Order, in a form similar to the example attached as Exhibit L, and shall be executed by an authorized representative of Customer and Service Provider.	
 
 	18.2	Headings and Counterparts. The headings in this Agreement are for the convenience of the parties only and are in no way intended to define or limit the scope or interpretation of the Agreement or any provision hereof. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original, but all of which together will constitute one agreement binding on the parties, notwithstanding that both parties are not signatories to the original or the same counterpart.	
 
 	18.3	Applicable Law and Jurisdiction. This Agreement is made under and shall be construed in accordance with the laws of the State of New York without giving effect to that jurisdiction’s choice of law rules. For the sole and exclusive purpose of seeking injunctive relief in accordance with Section 18.5 below, both parties hereby consent and submit to the sole and exclusive jurisdiction of the federal courts of the Southern District of New York, in all questions and controversies arising out of this Agreement, and agree that such court is the most appropriate and convenient court to settle any dispute, and accordingly waive the right to argue to the contrary.	
 
 	18.4	Severability. If any term or provision of this Agreement is held to be illegal or unenforceable, the validity or enforceability of the remainder of this Agreement shall not be affected.	
 
 	18.5	Dispute Resolution. Any dispute between the parties with respect to interpretation of any provision of this Agreement or with respect to performance by NAVITAIRE or Customer shall be resolved as specified in this Section 18.5.	
 
 	18.5.1	Upon the request of either party, each party will appoint a designated representative whose task it will be to meet for the purpose of endeavoring to	
 
18

Hosted Services Agreement
 
 	resolve such dispute. The designated representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. *****.	
 
 	18.5.2	If the designated representatives do not resolve the dispute within ***** after the request to appoint a designated representative is delivered to a party, then the dispute shall escalate to the Vice President, Customer Operations of NAVITAIRE and the Chief Commercial Officer of Customer, for their review and resolution within the next *****. During such time, the amount subject to dispute shall be placed in a mutually agreed escrow account and held there pending resolution of the dispute. All other applicable fees not affected by the dispute are due as specified within this Agreement.	
 
 	18.5.3	If the dispute is not resolved by the parties under Section 18.5.1 or 18.5.2 hereof, the parties may initiate formal proceedings. With the sole exception of an action seeking only injunctive relief for a breach hereof *****, any controversy or claim arising out of or relating to this Agreement, or the making, performance or interpretation thereof, including without limitation alleged fraudulent inducement thereof, ***** be settled ***** *****, New York by one arbitrator in accordance with the Rules of Commercial Arbitration of the American Arbitration Association. Judgment upon any arbitration award may be entered in any court having jurisdiction thereof. *****.	
 
 	18.5.4	The parties hereby agree that if any dispute or controversy proceeds to arbitration, the arbitrator appointed pursuant to Section 18.5 shall award the prevailing party its costs, including reasonable attorneys’ fees and costs, to the degree of such prevailing party’s success.	
 
 	18.5.5	The parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved; provided, however, if the dispute is regarding nonpayment by Customer, NAVITAIRE shall not be required to continue performance of its obligations: (a) unless Customer continues to pay all disputed amounts to NAVITAIRE or to an escrow account structured by agreement of the parties; or (b) if the continuing provision of services to Customer in the absence of receipt by NAVITAIRE of the disputed payment poses a material financial burden on NAVITAIRE.	
 
 	18.6	Third Party Procurement. NAVITAIRE has a number of relationships with third party vendors for products and services made available to users of the NAVITAIRE suite. NAVITAIRE utilizes these third party vendors in order to provide a comprehensive offering for the benefit of the customer base. In some cases, NAVITAIRE may receive compensation from these third party vendors.	
 
 	18.7	Exhibits. The Exhibits attached and listed below are part of this Agreement:	
 
 	•	 	Exhibit A: Hosted Reservation Services - New Skies®	
 
 	•	 	Exhibit B: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit C: NAVITAIRE Contacts	
 
 	•	 	Exhibit D: Customer Contacts	
 
 	•	 	Exhibit E: Powered by NAVITAIRE® Mark	
 
 	•	 	Exhibit F: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit G: Hosted Revenue Accounting Services - SkyLedger®	
 
 	•	 	Exhibit H: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit I: (INTENTIONALLY OMITTED)	
 
19

Hosted Services Agreement
 
 	•	 	Exhibit J: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit K: Price and Payment	
 
 	•	 	Exhibit L: Work Order Terms and Form	
IN WITNESS WHEREOF, NAVITAIRE and Customer, each acting with proper authority, have caused this Agreement to be executed as of the date set forth below.

Signed for and on behalf of:	 		 	Signed for and on behalf of:	
			
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d.b.a. VOLARIS)	 		 	Navitaire, LLC	
					
Signature:	 	/s/ Holger Blankenstein	 		 	Signature:	 	/s/ John Dabkowski	
					
Printed Name:	 	Holger Blankenstein	 		 	Printed Name:	 	John Dabkowski	
					
Title:	 	Director Comercial CCO	 		 	Title:	 	Chief Executive Officer	
					
Date:	 		 		 	Date:	 		
					
Signature:	 	/s/ Fernando Suarez	 		 		 		
					
Printed Name:	 	Fernando Suarez	 		 		 		
					
Title:	 	Chief Financial Officer	 		 		 		
					
Date:	 		 		 		 		
 
20

Hosted Services Agreement
 
EXHIBIT A
HOSTED RESERVATION SERVICES – NEW SKIES®
Conflict and Exhaustion of Provisions
In the event that there exists any conflict between any term, condition or provision contained within this Exhibit and in any term, condition, or provision contained within the Agreement, the term, condition, or provision contained within this Exhibit shall control. Further, the rights, obligations, and privileges of the parties shall be determined first by reference to this Exhibit, as opposed to the Agreement. For purposes of clarification, the rights, obligations, and privileges contained within this Exhibit shall control and govern any dispute between the parties until all such rights, obligations, and privileges have been exhausted in their entirety; and only after such time shall the rights, obligations, and privileges of the parties be determined by reference to the Agreement.
 
1	Definitions	
As used in and for purposes of this Exhibit, the following terms shall be defined as set forth in this Exhibit. In the event that there exists any conflict between a definition set forth in this Exhibit and in any definition contained within Section 1 of the Hosted Services Agreement (the “Agreement”), the definition set forth in this Exhibit shall control.
 
 	1.1	Ancillary Component means a product or service other than Customer-originating flights sold by Customer using the Hosted Reservation Services. Examples include: an insurance policy purchase, a car hire/rental, a hotel reservation/purchase, an add-on activity such as a 1-hour helicopter tour, souvenir t-shirt, etc. For clarification purposes, Ancillary Components (i) are usually non-flight products or services but can also include flights not provided by Customer, but sold through the Travel Commerce functionality; and (ii) exclude any Segment under this Agreement.	
 
 	1.2	Authorization Services has the meaning set forth in Section 7.4.1 hereof.	
 
 	1.3	Availability Request means a request for a fare and/or inventory and/or Ancillary Component across *****. Availability Requests are further defined as:	
 
 	a)	Standard Availability Calls are single or multi-day searches for fares, inventory or ancillary components (e.g. *****) and are calculated as ***** Journey or Ancillary Component *****, across *****. For purposes of illustration, a request for flights from ***** would be ***** whereas a request for flights from *****, 2012 would be *****.	
A round trip or multi-city search using a Standard Availability Call requesting flights are computed as ***** for each *****, for each *****. For purposes of illustration, ***** request for a ***** is calculated as *****. For additional purposes of illustration, *****is calculated as *****
Technical call types that are defined as Standard Availability Calls are GetAvailability, GetTripAvailability, GetUpgradeAvailability, or similarly functioned future calls.
 
 	b)	Low Fare Availability Calls are utilized in the Low Fare Finder tool and are further defined as either Unloaded or Loaded:	
Unloaded Low Fare Availability Calls are calculated as ***** for each set of *****. For purposes of illustration, where the Low Fare Finder is configured to return ***** on either side of the requested booking date, for each outbound ***** and/or return ***** the unloaded low fare search in all cases is ***** for each requested *****, regardless of the *****. For additional clarification, *****is calculated as *****.
 
Exhibit A - 21

Hosted Services Agreement
 
Unloaded Low Fare Availability Calls, when utilized in a *****, will be calculated as ***** for each requested ***** of low fare searches. For purposes of illustration, *****is calculated as *****
Loaded Low Fare Availability Calls are calculated as ***** for each ***** across *****. For purposes of illustration, where the Low Fare Finder is configured to return ***** on either side of the requested booking date, for each outbound ***** or return *****, the Loaded Low Fare Availability Calls are calculated as *****for the requested booking date and *****on either side of the requested booking date*****. For additional clarification, *****is calculated as *****
Loaded Low Fare Availability Calls, when utilized in a *****, will be calculated as ***** for each requested day of low fare searches
Technical call types that are defined as Low Fare Availability Calls are GetLowFareAvailability, GetLowFareTripAvailability, or similarly-functioned future calls.
 
 	1.4	Change Assistance List (CAL) is a list of passenger changes that occurred since the initial PAL or previous CAL was generated.	
 
 	1.5	Change Control has the meaning set forth in Section 8.7.1 hereof.	
 
 	1.6	Codeshare, Marketing or Codeshare Marketing Carrier means when Customer markets and sells a flight under its own host airline code and the flight is operated by another airline. A codeshare marketing partner is an airline participating in a codeshare as the Codeshare Marketing Carrier.	
 
 	1.7	Codeshare, Operating or Codeshare Operating Carrier means when another airline markets and sells a flight under its own host airline code and the flight is operated by Customer. A codeshare operating partner is an airline participating in a codeshare as the Codeshare Operating Carrier.	
 
 	1.8	Codeshare PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, containing one or more passenger names and booked Segments which contains at least one Segment booked via NAVITAIRE’s free-sale codeshare functionality.	
 
 	1.9	Common Use Airport means an airport whose technology infrastructure including network, hardware, and software is managed by a third party company or organization. Typically common use providers manage a large number of airport infrastructures with a common platform and protocol. SITA CUTE and ARINC MUSE are examples of the larger common use platforms.	
 
 	1.10	Confirmed Status means when a reservation has been: (a) systematically acknowledged and accepted in the Hosted Reservation System by issuing a record locator or PNR number; and (b) the PNR has achieved a confirmed state in the Hosted Reservation System via either: (i) application of full or partial payment to the PNR; or (ii) application of an alternative mechanism such that payment for the PNR has been otherwise fulfilled.	
 
 	1.11	Content Provider means a provider of Ancillary Components sold in a Super PNR or Non-Flight Related Fee Record.	
 
 	1.12	CRS/GDS/ARS PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, containing one or more passenger names and booked Segments which contains at least one Segment booked via a CRS/GDS/ARS using Type B/Teletype Connectivity, or via a CRS/GDS using Type A/EDIFACT Booking Connectivity, or via Web Services/API Connectivity. A CRS/GDS/ARS source is based on unique user code and user type.	
 
 	1.13	Electronic Ticket (E-Ticket) means the document stored in electronic form, used in lieu of a paper document to be exchanged for the use of transportation and/or related services involving a single carrier.	
 
Exhibit A - 22

Hosted Services Agreement
 
 	1.14	Electronic Ticketing (E-Ticketing) means the method used to document in electronic form, the sale of transportation and/or related services for a single carrier in lieu of the issuance of a paper document.	
 
 	1.15	Electronic Ticketing Interchange and Database Provider means the third party provider that Customer has contracted with to process, exchange and store Customer E-Ticket records.	
 
 	1.16	Electronic Ticketing Services Agreement (ETSA) means the agreement Customer enters into with the Electronic Ticketing Interchange and Database Provider for Electronic Ticketing services.	
 
 	1.17	Executive Review Meeting means a formal meeting attended by Customer, NAVITAIRE and any related third party required, in response to non-compliance to the specified service level measures.	
 
 	1.18	Executive Sponsors has the meanings set forth in Exhibits C and D.	
 
 	1.19	Incident (INC) means a Customer reported Hosted Services trouble report and description logged and submitted through the INC schema in NAVITAIRE’s Internet based customer support tool (Remedy).	
 
 	1.20	Interline Electronic Ticket (Interline E-Ticket) means the document stored in electronic form, used in lieu of a paper document, to be exchanged for the use of transportation and/or related services involving more than one carrier.	
 
 	1.21	Interrupted Service Minutes means, with respect to a given Reporting Period, the total number of minutes during which Hosted Reservation Services is unavailable due to Interrupted Service, excluding Planned Downtime Minutes. This time is tracked by the minute, rounded up to the nearest minute per incident.	
 
 	1.22	Interrupted Service Report has the meaning set forth in Section 8.6.2 hereof.	
 
 	1.23	Journey means the true origination and destination city pair in a one way request. For example, Flight 100 originates in LAX with a stop in SLC on the way to BOS, where it connects to Flight 200 departing from BOS and arriving in JFK. A request for LAX-JFK on *****, which happens to include both Flight 100 and Flight 200 as the connecting pair, would be one Journey.	
 
 	1.24	Look to Booked Segment Ratio means the numeric result of the number of Availability Requests divided by the number of booked Segments where the Segment resides in a PNR that has reached a Confirmed Status.	
 
 	1.25	Load Factor means the ratio between the number of Loaded to Unloaded Low Fare Availability Calls based on the Low Fare Finder configured parameters. For purposes of illustration, if the Low Fare Finder is configured to return ***** on either side of the requested booking date, in a round trip search the resulting calls would be *****and*****. The Load Factor is determined by dividing the Loaded Low Fare Availability Calls by the Unloaded Low Fare Availability Calls, with the result in this scenario *****).	
 
 	1.26	Look to Booked Segment Ratio for CRS/GDS/ARS Type A/EDIFACT Bookings means the numeric result of the number of PAOREQ Availability Requests divided by the number of CRS/GDS/ARS Type A/EDIFACT booked Segments where the Segment resides in a PNR that has reached a Confirmed Status.	
 
 	1.27	Maximum Availability Requests Allowed means the numeric result of multiplying the Monthly Minimum Segment Guarantee by the Look to Booked Segment Ratio.	
 
 	1.28	Minimum System Availability Target has the meaning set forth in Section 8.2.1 hereof.	
 
 	1.29	Monthly Performance Report has the meaning set forth in Section 8.6.2 hereof.	
 
Exhibit A - 23

Hosted Services Agreement
 
 	1.30	MQSeries is a popular system for messaging across multiple platforms including Microsoft Windows, Linux, IBM mainframe and midrange, UNIX, and others. It allows independent applications on distributed systems to communicate with each other.	
 
 	1.31	Negotiated Allotment or NegoAllotment means allocation of a Customer’s seats to tour operators, cruise lines, or other non-affiliate third party entity through negotiated contracts.	
 
 	1.32	Non-Flight Related Fee Record means any data record materially referring to an Ancillary Component that is stored along with its corresponding fee in a PNR rather than as an Ancillary Component.	
 
 	1.33	Passenger Assistance List (PAL) is a list of Passengers with Reduced Mobility (PRM) for a particular flight and board point.	
 
 	1.34	Passengers with Reduced Mobility (PRM) describes functionality arising out of industry standards issued by IATA in respect of rights of disabled persons and persons with reduced mobility traveling by air within the European Community.	
 
 	1.35	Planned Downtime has the meaning set forth in Section 8.2.1(b) hereof.	
 
 	1.36	Planned Downtime Minutes means, with respect to a given Reporting Period, the total number of minutes in a Reporting Period during which Hosted Reservation Services are unavailable due to: (a) an act or omission of Customer with respect to matters described in Section 7.1 of this Exhibit; (b) an event of Force Majeure; or (c) a planned, scheduled, and approved event including Hosted Services System maintenance during which a particular service, upgrade or Hosted Services System routine requires Planned Downtime as defined in Section 8.2.1(b) hereof. Customer may request the event be rescheduled, providing there is reasonable cause for such a delay. This notification must be made to NAVITAIRE at least ***** in advance of the scheduled event. Planned Downtime Minutes will be tracked by the minute, rounded up to the nearest minute per incident.	
 
 	1.37	Reporting Period will be a calendar month. The NAVITAIRE Account Manager will measure monthly calculations simultaneous to account reviews.	
 
 	1.38	Reporting Period Minutes means, with respect to a given Reporting Period, the total number of minutes during such Reporting Period.	
 
 	1.39	Stabilization Period has the meaning set forth in Section 8.7.5 hereof.	
 
 	1.40	Strategic Business Review has the meaning set forth in Section 3.5 hereof.	
 
 	1.41	Super PNR means a passenger name record that includes one or more Ancillary Components. For the avoidance of doubt, a Super PNR includes any Ancillary Component regardless of booking source.	
 
 	1.42	Utilized Availability Requests Allowed means the numeric total result of the count of executed Standard Availability Calls and Low Fare Availability Calls.	
 
2	Scope of Services	
NAVITAIRE will provide certain services and support functions during the term of this Agreement related to the Hosted Reservation Services and related applicable products. Of the available Hosted Reservation Services, Customer has selected the products and/or services outlined in Exhibit K.
 
3	Implementation Services	
 
 	3.1	Data Center Implementation Services. NAVITAIRE will configure, install, activate, and test the necessary data center hardware and software for providing the Hosted Reservation Services to Customer. Unless otherwise specified, this service does not include communication circuits, wireless data services, or any remote communication	
 
Exhibit A - 24

Hosted Services Agreement
 
 	devices, including routers or network hardware. Client personal computers, workstations, or other Customer devices connected to the Hosted Services System are the responsibility of Customer and must meet the minimum specifications as required by NAVITAIRE.	
 
 	3.2	Virtual Private Network (VPN) Connectivity. If Customer desires to use a virtual private network (VPN) for connectivity to Hosted Reservation Services, NAVITAIRE will evaluate such a request to determine the viability of the use of a VPN connection for either a primary or back-up data circuit. After review, NAVITAIRE will advise Customer if the request is approved and the additional costs that will apply *****	
 
 	3.3	Network Configuration and Design Services. NAVITAIRE will supply recommended technical diagrams and will advise Customer on required network hardware requirements, for client portion of application as necessary. Customer shall have internal or third party network expertise available for the installation and configuration of their required network.	
 
 	3.4	System Integration Services. During the implementation of Hosted Reservation Services and before production use of such services, NAVITAIRE will assist in the assessment of the compatibility of third party hardware and software with the Hosted Services System. Customer shall be responsible for the cost of modifying or replacing any third party systems including hardware and software. For future integration services, NAVITAIRE will, upon request, provide an estimate; however, any services will be provided on a time and materials basis *****	
 
 	3.5	Strategic Business Review. NAVITAIRE will conduct a Strategic Business Review to gather information on Customer’s desired use of the Hosted Reservation Services and outline functional capabilities of the Hosted Services System. During the Strategic Business Review, NAVITAIRE will work with Customer to create a project plan and project schedule, including NAVITAIRE and Customer responsibilities, used to determine the Target Date.	
 
 	3.6	Customer Site Installation Services. NAVITAIRE will assist Customer with the installation and testing of the required telecommunications connection between the NAVITAIRE data center and the designated Customer facility. Customer shall be responsible for the cost of troubleshooting or connecting Customer’s internal network. Additional technical support for on-site assistance after the initial conversion to production use of the Hosted Reservation Services shall be quoted on a project basis at the request of Customer using the rates as outlined in Exhibit K.	
 
 	3.7	Initial Training Services. NAVITAIRE will supply the following training and Customer agrees to participate in such training for the Hosted Reservation Services:	
 
 	3.7.1	Core Reservation System Training: Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE office located in Salt Lake City, Utah or up to ***** Customer employees at the NAVITAIRE office located in *****. An additional ***** training will be required if GDS, Codeshare, and/or Interline functionality is implemented. If the training is not held at a NAVITAIRE facility, NAVITAIRE requires that ***** trainers be on-site at the alternate location and additional fees will apply. Also, if training is not held at a NAVITAIRE facility, Customer will be responsible for trainer transportation, quality lodging including high-speed internet access, additional costs for trainer’s time away from their home office, NAVITAIRE standard per-diems for meals and incidentals, and for meeting the NAVITAIRE requirements for a stable training technical environment. . All training will be conducted in English. Topics will include use of SkySpeed, Airport Check-in, Irregular Operations, Flight Scheduling and Fare Maintenance, and Reservations and Supervisory Features. Customer must complete basic computer familiarization and Windows training for all trainees before the initial training.	
 
Exhibit A - 25

Hosted Services Agreement
 
 	3.7.2	SkySales Training: Up to ***** which may be attended by up to ***** of Customer’s technical employees at the NAVITAIRE offices in Salt Lake City, Utah. The course includes time for hands-on development.	
Please note that the SkySales Training has been designed with the assumption that the developer(s) performing the carrier customization has a base level understanding of the Microsoft ASP.NET technology and knowledge of C# (C-sharp), XML, XSLT, HTML, and CSS. If additional assistance is required for this base understanding or additional development support after the course, the NAVITAIRE Professional Services organization can be engaged via a work order.
 
 	3.7.3	Data Store Products Training (if applicable): Up to ***** of technical training which may be attended by up to ***** Customer technical employees at Customer’s location. The course covers the data model, performance tuning, use of the Data Warehouse, replication, and how to avoid impacting the replication process. Classroom requirements for the on-site Data Store training are located in the Data Store course syllabus.	
 
 	3.7.4	Intelligent Seating Training (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.5	GoNow Agent (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.6	Travel Commerce Training (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.7	Loyalty Training (if applicable): Up to a maximum of ***** days which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah or.	
 
 	3.7.8	Launch Support: *****, up to ***** with up to ***** NAVITAIRE employees on-site with Customer, during cutover to the production Hosted Reservation Services.	
 
 	3.7.9	Manuals: Customer will be provided an electronic copy of the user reference manuals in Adobe Acrobat (PDF) format for download via the NAVITAIRE Customer care web site or by CD. Technical specification and technical reference manuals are for internal NAVITAIRE use only, unless otherwise specified in this Agreement or by other arrangement. All materials provided by NAVITAIRE are in the English language unless otherwise specified within this Agreement.	
 
 	3.7.10	Customer’s Travel Costs: Customer’s travel and lodging costs for training at a NAVITAIRE facility will be paid by Customer.	
 
 	3.8	Project Reporting. During the course of Implementation Services, the NAVITAIRE Project Manager will provide Customer with: (a) Weekly Project Plan Update and Status Report; (b) Weekly Updated Issues/Resolution List; and (c) Executive Summary.	
 
 	a)	Weekly Project Plan Update and Status Report. Weekly status reports will be transmitted to Customer on a weekly basis during the provision of Implementation Services. This report will include updated status on the implementation process and an updated project plan. A list of the following week’s tasks and goals will be included in the report.	
 
 	b)	Weekly Updated Issues/Resolution List. Weekly updated issues/resolution lists will be forwarded to Customer on the same schedule as the Weekly Project Plan	
 
Exhibit A - 26

Hosted Services Agreement
 
 	Update and Status Report. The Issues/Resolution List will include specific additional items discovered in the project analysis, or critical issues that deserve heightened priority apart from the project plan. The Issues/Resolution List will include the task, the responsible party, date, open/close status, priority, and date of closed task. Every issue will be given a priority relative to a mutually agreed priority with Customer. Priorities will be ranked 1-5, 1 being most critical. Below is a description of each priority:	
 
 	•	 	Priority 1 - Urgent. All issues included in this priority are deemed critical and will be given priority attention. These issues may affect a milestone or dependency related to the completion of conversion services. Issues in this category are critical to resolve prior to other project dependencies and milestones being completed.	
 
 	•	 	Priority 2 - High. Issues included in this priority may affect the Target Date and require resolution prior to the completion of conversion services.	
 
 	•	 	Priority 3 - Medium. Issues included in this priority are not required prior to completion of conversion services, but must be finished prior to the end of Implementation Services.	
 
 	•	 	Priority 4 - Low. These items are not critical to either the completion of conversion services or Implementation Services but require monitoring for subsequent follow up or entry into NAVITAIRE’s Internet based customer support tool.	
 
 	•	 	Priority 5 - Excluded. These items are deemed excluded and are either unnecessary or may be addressed in a business process change or work-around.	
 
 	c)	Executive Summary. An Executive Summary will be provided to both the NAVITAIRE and Customer Executive Sponsors upon reaching critical milestones. These milestones will be established mutually with Customer as the final project plan has been established.	
 
 	3.9	Implementation Services Time Frame	
 
 	3.9.1	During the course of planning discussions related to this Agreement, NAVITAIRE acknowledges the Target Date as requested by Customer for completion of applicable portions of the Implementation Services. The Target Date for completion of the Implementation Services is no later than ***** NAVITAIRE and Customer will detail dates and dependencies of the project plan, as summarized in the table in Section 3.9.2 below, in order to confirm the Target Date achievability.	
 
 	3.9.2	Upon receipt of the Implementation Fees due at signing, NAVITAIRE agrees to work with Customer, to plan, coordinate, and to make progress toward completion of the required Implementation Services within the time frame preceding the Target Date. NAVITAIRE further agrees to initiate, mutually with Customer, project-scope-analysis and project-planning communication to establish the final schedule for Implementation Services.	
The following table outlines the key milestone activities that will be discussed during the Strategic Business Review:

 	  	Primary Responsibility	  	Duration to	  	 	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  	Complete	  	Milestone Dependency	
0	  	Agreement Signature and Project Start Date	  	ü	  	ü	  	*****	  	Agreement Signed*	
1	  	Account Setup Complete	  		  		  	*****	  	Milestone 0	
	  	Current version of software loaded	  	ü	  		  		  		
	  	Equipment ordered, received and setup	  	ü	  		  		  		
	  	Final version of software loaded	  	ü	  		  		  		
 
Exhibit A - 27

Hosted Services Agreement

 	  	Primary Responsibility	  	Duration to	  	 	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  	Complete	  	Milestone Dependency	
2	  	New Skies Training	  		  		  	*****	  	Milestone 1	
	  	New Skies core training complete	  		  	ü	  		  		
	  	SkySales training	  		  	ü	  		  		
	  	Other training, as mutually agreed	  		  	ü	  		  		
3	  	Third Party Development	  		  		  	*****	  	Milestone 2	
	  	Website development	  		  	ü	  		  		
	  	API development	  		  	ü	  		  		
4	  	User Acceptance Testing	  		  		  	*****	  	Milestones 2, 3 and 5	
	  	UAT plan and cases outlining business critical functionality completed & forwarded to NAVITAIRE	  		  	ü	  		  		
	  	Confirm business critical functionality available in New Skies release	  	ü	  		  		  		
	  	Data validation of converted data	  		  	ü	  		  		
	  	Approved functionality is working as documented	  		  	ü	  		  		
5	  	Third Party Certification	  		  		  	*****	  	Milestone 3	
	  	SkyPay certification complete	  	ü	  	ü	  		  		
	  	Website certification complete	  		  	ü	  		  		
	  	API certification complete	  		  	ü	  		  		
6	  	Operational Readiness	  		  		  	*****	  	Milestone 4	
	  	All code changes required for go-live in production account	  	ü	  		  		  		
	  	Final skins are published to website, if self-hosted	  		  	ü	  		  		
7	  	Dry Run	  		  		  	*****	  	Milestone 5	
	  	Pull data from production	  		  	ü	  		  		
	  	Convert data	  		  	ü	  		  		
	  	Perform data integrity check	  		  	ü	  		  		
	  	Move data to production environment	  	ü	  		  		  		
	  	Simulate go-live activities	  	ü	  	ü	  		  		
8	  	Go-Live Readiness Review	  		  		  	*****	  	Milestone 7	
	  	Confirm go-live date with all necessary teams	  	ü	  	ü	  		  		
9	  	Go-Live	  		  		  	*****	  	Milestone 8	
	  	Pull data from production	  		  	ü	  		  		
	  	Convert data	  		  	ü	  		  		
	  	Perform data integrity check	  		  	ü	  		  		
	  	Move data to production environment	  	ü	  		  		  		
	  	Perform go-live activities	  	ü	  		  		  		
	  	Approve go-live	  		  	ü	  		  		
 
*	Implementation services will not be scheduled until this Agreement is fully-executed and any implementation fees due and payable by Customer as outlined in Exhibit K have been received by NAVITAIRE.	
 
 	3.9.3	Customer understands that the Target Date is subject to change as such date is dependent on, among other matters, certain third party agreements/activities on behalf of both Customer and NAVITAIRE. These third party agreements/activities may include, but are not limited to, the following:	
 
 	•	 	Airport facility use agreements.	
 
 	•	 	All telecommunications and data circuits.	
 
 	•	 	Credit card settlement and authorization agreements.	
 
 	•	 	Centralized Reservation System/Global Distribution System/Airline Reservation System (CRS/GDS/ARS) agreements and host provider(s) certification process.	
 
 	•	 	Content Provider agreements and certification process.	
 
Exhibit A - 28

Hosted Services Agreement
 
 	•	 	Data conversion systems.	
 
 	•	 	Bilateral agreements for marketing codeshare terms with other airline partners.	
 
 	•	 	Codeshare marketing partner host provider certification process.	
 
 	•	 	IATA carrier code assignment.	
Customer will immediately establish a primary technical Project Manager contact that will be assigned to interact with the Project Manager appointed by NAVITAIRE. Failure to appoint this individual will jeopardize the delivery of Implementation Services by NAVITAIRE.
 
 	3.9.4	Upon ‘Go Live’, Customer is expected to fully open functionality to the public. If Customer requests a two phase launch (e.g., initial “soft launch” for limited release), Customer must recognize that the appropriate NAVITAIRE resources may not be available for appropriate on-site or data center support for a second launch outside of the ’Go Live’ date. Additional implementation fees will apply for any two phase launch scheme.	
 
 	3.9.5	Upon completion of the Implementation Services as described in this Exhibit A, Section 3, NAVITAIRE will provide written notification to the Customer Account Liaison named in Exhibit D, Section 2.	
 
 	3.10	Data Conversion and Import Services	
 
 	3.10.1	Conversion Services. If Customer has been using a third party reservation system, Customer will be responsible for converting existing reservations data into the required Hosted Reservation Services format. Hosted Reservation Services file format requirements and specifications are available to Customer upon request.	
 
 	3.10.2	Data Conversion Assistance. If Customer desires assistance with data conversion services from a third party reservation system, NAVITAIRE will review this request, and if accommodated, such assistance will be provided on a time and materials fee basis, *****	
 
 	3.10.3	Data Import Services. NAVITAIRE will automatically convert and process Customer’s PNR(s) into the Hosted Services System. The data conversion process will take place in three steps:	
 
 	•	 	Extract. An extract process will retrieve all reservations that have a flight record with a date after *****. Only complete, or valid, reservations will be extracted from the previous reservation system data file.	
 
 	•	 	Conversion. After a ‘block’ of reservation data is extracted, the corresponding output file will be transferred to the new environment. A data validations routine will perform audits of the data quality.	
 
 	•	 	Import. Upon completion of the first extract file of clean data, an import routine will transfer the clean data to the New Skies compliant databases in segmented extracts. While the first is transferring, a concurrent process will commence on the second extract, transfer and import to expedite data transfer.	
 
 	3.11	Reservations History Capture for Third Party Revenue Management Systems	
If Customer is not yet using a revenue management system, or is using a third party revenue management system, additional fees will apply to capture reservations booking history data from Hosted Reservation Services. Applicable charges are outlined in Exhibit K.
 
Exhibit A - 29

Hosted Services Agreement
 
4	Data Circuits	
 
 	4.1	Primary and Backup Data Circuits. Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s), as stated in Section 4.10 of the Agreement.	
 
 	4.2	Facility Locations. The facility locations provided for in this Agreement are as follows:	
 
 	•	 	The NAVITAIRE Hosted Reservation data center will be located in *****	
 
 	•	 	Customer’s primary facility will be located in *****	
 
5	Support Center Support	
 
 	5.1	Included Support. NAVITAIRE will include English-speaking Support Center Support via email, an Internet based customer support tool (English version only), or telephone. A customized version of the NAVITAIRE Procedures Manual will be provided to Customer.	
The allotment of ***** for included support is for the specified period only and may not be carried forward. Allotted monthly ***** of Support Center Support are not deducted for System Error reporting and use of the online support system. All other related ***** are deducted in ***** increments with a minimum of ***** per occurrence. Included Support for Hosted Reservation Services is provided at the following levels:
 
 	5.1.1	Initial Support. Included in the first ***** following the implementation of Hosted Reservation Services, Customer is allotted, at no additional charge, a maximum number of included Support Center Support ***** as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of *****, the Support Fees in Section 5.3 hereof will apply.	
 
 	5.1.2	Basic Support. After the expiration of initial support, Customer is allotted, at no additional charge, a maximum number of included Support Center Support hours as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of ***** the Support Fees in Section 5.3 hereof will apply.	
 
 	5.2	Hours - Non-Emergency. NAVITAIRE Support Center Support is available *****, excluding NAVITAIRE holidays (Christmas Eve, Christmas Day and New Year’s Day).	
 
 	5.3	Support Rate. ***** more than the applicable initial or basic support for the Support Center will be invoiced at the rate specified in Exhibit K, Section 1.3.	
 
 	5.4	Available Assistance. The NAVITAIRE Support Center may be contacted for assistance in the following areas. All services are in English, unless otherwise specified in this Agreement.	
 
 	5.4.1	System Error Reporting. Customer may report an identified Hosted Reservation Services System Error at no additional cost through the Customer Support line or the Internet based customer support tool.	
 
 	5.4.2	Emergency. An Emergency is defined as an aircraft incident or emergency on behalf of Customer, or Interrupted Service. Hosted Services System outages due to Customer misuse of the Hosted Services System will incur Support Fees at the rate specified in Exhibit K, Section 1.3. Interrupted Service due to Customer misuse of the Hosted Services System will be excluded from Interrupted Service Minutes.	
The NAVITAIRE Support Center may be reached, without charge, in the event of an Emergency ***** by calling the number provided in Exhibit C, Section 1.
 
Exhibit A - 30

Hosted Services Agreement
 
Customer will be requested to call the Support Center and report the Emergency, in English, to the representative, or if all representatives are busy with other calls, a message may be left in English on the voicemail response system, which will page an appropriate contact. A representative of NAVITAIRE will return Customer’s call within ***** with an acknowledgement and initial response to Customer.
Provided the Emergency is due to a complete system availability outage of the Hosted Reservation Services, NAVITAIRE will advise Customer as described in this Exhibit A, Section 8, regarding the status of the error or problem and the anticipated period to resolution. During normal business hours, both the NAVITAIRE Account Manager and Customer Account Liaison will be notified and briefed on the situation, with a further escalation to the Executive Sponsors for any outage exceeding *****. The Executive Sponsors will determine whether further escalation to the CEO, President or Managing Director level of each company is necessary.
Customer is required to provide NAVITAIRE with an after-hours emergency contact number in Exhibit D, which will be answered by Customer when called by the NAVITAIRE support representative.
 
 	5.4.3	Request Reporting. Customer may utilize the NAVITAIRE Internet support tool to contact the NAVITAIRE Support Center electronically for the following service requests:	
 
 	•	 	Custom Enhancement requests;	
 
 	•	 	New product concepts or requests;	
 
 	•	 	Additional training requests; and	
 
 	•	 	Product expertise.	
These services are subject to the Support and/or Other Fees as described in Exhibit K, Section 1.3 and/or 1.4, and are accepted at the sole discretion of NAVITAIRE. If the request is accepted by NAVITAIRE, a price quote and time schedule will be generated. Customer will then decide whether to authorize the work to be performed by NAVITAIRE.
 
 	5.5	Third Party Interfaces.	
 
 	5.5.1	NAVITAIRE will supply and support defined interfaces to third party systems utilized by Customer only if listed in this Section.	
 
 	5.5.2	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
 	5.5.3	In the event that a Travel Commerce or Content Provider connection causes severe performance issues or downtime to the Hosted Reservation Services System, NAVITAIRE reserves the right to temporarily disable the offending connection. Customer will be notified if such actions become necessary. NAVITAIRE will reestablish the connection once the supplier has resolved the issue.	
 
6	New Skies by NAVITAIRE Functionality Included in Hosted Reservation Services	
The following pages itemize the basic and optional products and features as of the Effective Date of this Agreement. Depending on the terms of this Agreement, as defined in this Exhibit A, Section 2 Scope of Services, not all optional products and features are included in this Agreement. This functionality list may be modified or expanded in the future based upon new releases, provided that no material functionality will be eliminated unless mutually agreed with Customer and NAVITAIRE.
 
Exhibit A - 31

Hosted Services Agreement
 
Customer and NAVITAIRE.
Hosted Reservation Services – New Skies
Base Functionality
SkySpeed – Call Center Reservation System
General Features – SkySpeed
 
 	•	 	Graphical reservations screens.	
 
 	•	 	Fee entry and payment collection.	
 
 	•	 	On-demand itinerary print capability.	
 
 	•	 	Auto-queue capability.	
 
 	•	 	Role-based user security.	
General Features – Availability and Fare Look-up
 
 	•	 	Search for travel components (flight, train, bus, ferry, etc.) and fare availability according to multiple search criteria.	
 
 	•	 	Display travel components (flight, train, bus, ferry, etc.) and fare results, including real-time pricing and availability.	
 
 	•	 	Interactive calendar.	
 
 	•	 	Graphical display of price by passenger type, fees and taxes, multiple currencies, fare rules, manifest and SSR availability. Multiple-airport cities (MAC) functionality.	
General Features – SkySpeed Booking Module
 
 	•	 	Book, change, divide, and cancel reservations.	
 
 	•	 	Book unlimited number of passengers per PNR as defined by role.	
 
 	•	 	Reserve unlimited number of travel Segments per passenger, per PNR.	
 
 	•	 	Book multiple flight connections.	
 
 	•	 	Book non-revenue and revenue standby passengers.	
 
 	•	 	Override fares dependent on user security settings.	
 
 	•	 	Assign multiple Special Service Request (SSR) codes to individual passengers based on availability.	
 
 	•	 	Add individual passenger identification documents.	
 
 	•	 	Optional seat map display showing actual seat availability.	
 
 	•	 	Optional pre-assigned seating.	
 
 	•	 	Associate seat fees with pre-assigned seats.	
 
 	•	 	Dynamic seating legend to display seat properties.	
 
 	•	 	Store multiple addresses and phone numbers on a single booking.	
 
 	•	 	Auto-populate name and address from stored phone numbers.	
 
 	•	 	Issue itinerary at the airport or station, or by mail, fax, email or XML feed to the desired system.	
 
 	•	 	Multiple language support for itinerary printing.	
 
 	•	 	Carrier defined mandatory comments.	
 
 	•	 	Ability to create Agent and carrier defined Freeform, Manifest, and Itinerary comments.	
 
 	•	 	Display of real-time travel status information (e.g. FLIFO).	
 
 	•	 	Move passengers to new travel components.	
 
 	•	 	Apply promotion codes to bookings.	
 
 	•	 	Use vouchers as payment on bookings.	
 
 	•	 	Apply discount codes for selected passenger(s) on a booking.	
 
 	•	 	Apply penalty fees at the PNR and passenger level.	
 
 	•	 	Auto-assign seats at the passenger and booking level, with Intelligent Seating for optimal seat selection.	
 
 	•	 	Quick search options to retrieve PNRs.	
 
 	•	 	View available and expired fares within a date range.	
 
 	•	 	Direct refunds to spoilage fees so they are not refunded to passengers.	
 
 	•	 	Directional fares	
 
 	•	 	Place traffic restrictions on flight routes according to IATA standards.	
 
 	•	 	Support for Change of Gauge on equipment (aircraft, train, bus, and ferry).	
 
 	•	 	Support for payment by installments.	
General Features – Customer Management
 
 	•	 	Manage customer profiles, including personal information, travel preferences and booking information.	
 
 	•	 	Support for system-generated and third-party Customer IDs	
General Features – Travel Agent Support
 
 	•	 	Support for travel agency, corporate and third-party profiles.	
 
 	•	 	Automatic entry of travel agency, corporate or third-party organization ID upon agent login.	
 
 	•	 	Private fares and fare discounts based on organization.	
 
 	•	 	PNR retrieval using CRS, GDS and third-party record locators.	
 
 	•	 	Support for parent/child relationships within travel agencies.	
 
Exhibit A - 32

Hosted Services Agreement
 
General Features – Airline Specific PNR Preferences
 
 	•	 	Configure which fields are required, optional and disabled for passenger information, contact information, payment information and customer profile information.	
 
 	•	 	Automatically place bookings on hold for declined credit cards (configurable).	
 
 	•	 	Configure validation for phone number format.	
 
 	•	 	Auto-populate city and state based on postal code (US & Canadian postal codes).	
 
 	•	 	Configure default booking values for country, language, culture and nationality.	
General Features – Agent and Airline Support Tools
 
 	•	 	Create and manage system agents.	
 
 	•	 	Apply role-based permissions to agents and agent groups.	
 
 	•	 	Password-protected login for individual agents.	
 
 	•	 	Temporary supervisory login to perform secure functions.	
 
 	•	 	Configurable logoff time value for inactive sessions.	
 
 	•	 	Scratch pad for call-specific notes.	
 
 	•	 	Customizable reference system to maintain and manage carrier policy and procedure information.	
 
 	•	 	Online help documentation.	
 
 	•	 	Password-protected queue access.	
SkySales – Internet Reservation System
General Features – SkySales Booking Module
 
 	•	 	Book, change and cancel reservations.	
 
 	•	 	Trip types include one-way, round-trip and open jaw travel components.	
 
 	•	 	Travel components may be multi-leg, multi-segment (flights, trains, buses, ferries, etc.).	
 
 	•	 	Configurable day-of-travel booking.	
 
 	•	 	Interactive calendar.	
 
 	•	 	Assign multiple Special Service Request (SSR) codes to passengers, based on availability.	
 
 	•	 	Optional Special Service Request (SSR) fees.	
 
 	•	 	Support for passenger types, including discounts.	
 
 	•	 	Search Again feature to retain previous query settings.	
 
 	•	 	Display selected travel components and fares prior to purchase.	
 
 	•	 	Optional “I Agree To Terms” enforcement check box.	
 
 	•	 	Display of confirmed or held booking, including booking details.	
 
 	•	 	Flight following interface.	
 
 	•	 	Link to external pages, such as third-party payment providers and loyalty programs.	
 
 	•	 	Self-service passenger moves without fee or fare change within a carrier-defined timeframe.	
General Features – Pricing/Promotions
 
 	•	 	Online redemption of promotion code discounts.	
 
 	•	 	Online redemption of vouchers.	
 
 	•	 	Request a single fare class, single fare level or multiple fare levels.	
 
 	•	 	Display of single or multiple fares per travel component.	
 
 	•	 	Display of “Discounted Web” and “Regular Price” comparisons.	
 
 	•	 	Fare display by passenger type.	
 
 	•	 	Summary and detailed price quotes, including fee and tax breakdown.	
 
 	•	 	Configurable fare rules display.	
 
 	•	 	Configurable promotional fares, such as Buy One, Get One Free.	
 
 	•	 	Directional fares.	
General Features – Passenger/Contact
 
 	•	 	Associate passenger titles with passenger types.	
 
 	•	 	Configure the maximum number of passengers allowed per booking, by booking source.	
 
 	•	 	Configure drop-down lists, input boxes and required fields for passenger and contact information.	
 
 	•	 	Option to include infant name/age and adult passenger association in manifest comments.	
General Features – Availability
 
 	•	 	Multiple-airport cities (MAC) functionality.	
 
 	•	 	Show product class or class of service for fare display.	
 
 	•	 	Advanced move functionality.	
 
 	•	 	Route-aware origin and destination lists.	
 
 	•	 	Availability for single day and date ranges.	
 
 	•	 	Place traffic restrictions on flight routes according to IATA standards.	
 
 	•	 	Support for Change of Gauge on equipment (aircraft, trains, bus, ferry, etc.).	
 
 	•	 	Search by lowest fare in market for a number of days out (Premium Service).	
 
Exhibit A - 33

Hosted Services Agreement
 
General Features – Payments
 
 	•	 	Facilitates communication for credit card validation and authorization with Customer’s third party provider.	
 
 	•	 	Configurable controls for pending and declined cards.	
 
 	•	 	Configure and store data related to installment payments.	
General Features – Travel Agency Support
 
 	•	 	Discounts, promotions, commissions, tracking, reporting and billing for travel agencies and corporations.	
 
 	•	 	Online travel agency registration, including IATA/ARC/ATOL/BSP number and password.	
 
 	•	 	Online corporate business registration, including account number and password.	
 
 	•	 	Booking for unregistered/unrecognized agencies prior to carrier validation.	
 
 	•	 	Carrier validation/activation of pending online registrations.	
 
 	•	 	Online support for updates to travel agency/corporate account information.	
 
 	•	 	Individualized logins for agents within a travel agency/corporation.	
 
 	•	 	Travel agency/corporate ID and contact information included on bookings.	
 
 	•	 	Parent-child relationships for travel agencies and corporations.	
General Features – Seat Functionality
 
 	•	 	Customizable, graphical seat map display.	
 
 	•	 	Dynamic, unique seat map for each travel component.	
 
 	•	 	Seat selection from seat map or system-assigned based on customer preferences and Intelligent Seating algorithms.	
 
 	•	 	Individual seating and group seating, including seat assignment restrictions.	
 
 	•	 	Dynamic seat legend to display seat properties.	
 
 	•	 	Seat fees and SSR fees.	
General Features – Technical Details
 
 	•	 	Ability to customize graphics and HTML display elements (“look and feel”) through CSS and XSLT.	
 
 	•	 	Server-enforced, role-based configuration controls to define application business logic.	
 
 	•	 	Customizable market data (origin and destination airport codes, currency codes and time zone settings).	
 
 	•	 	Customizable lists and codes for aircraft types and credit cards.	
 
 	•	 	Customizable contact information lists (for example, states/provinces, and countries).	
 
 	•	 	Configurable itinerary distribution options (for example, email, fax, print).	
 
 	•	 	Support for localization (multiple languages) through customization libraries.	
 
 	•	 	Support for local time settings by city.	
 
 	•	 	Retrieve and view traveled bookings for registered members.	
 
 	•	 	Full validation of form elements using JavaScript.	
 
 	•	 	Future expandability through modular architecture.	
 
 	•	 	Supported browsers include Internet Explorer 6.0 or higher, Firefox 2.0 or higher, Opera or the latest version of Safari.	
 
 	•	 	Optional Secure SSL Encryption, No Encryption, or both (generally compliant with secure SSL encryption).	
Limitations and Exclusions
 
 	•	 	SkySales is not designed for use on a platform without web session locking.	
 
 	•	 	Implementing locking per NAVITAIRE and Microsoft® recommendations and practices is required.	
 
 	•	 	SkySales support obligations and Service Level targets and/or penalty/rebate calculations do not apply for any Service Level issues attributable to non-compliant session provisioning.	
 
 	•	 	SkySales hosting by NAVITAIRE is not included within the scope of Hosted Reservation Services.	
SkySchedule – Scheduling Application
General Features – SkySchedule
 
 	•	 	Create and maintain schedules.	
 
 	•	 	Re-accommodate passengers to other travel components – flight, train, bus, ferry, etc.	
 
 	•	 	View PNR(s) and passengers affected by a schedule change.	
 
 	•	 	Create non-stop travel components.	
 
 	•	 	Create direct and/or connecting, multiple-leg travel components.	
 
 	•	 	Maintain routing mileage table for reporting.	
 
 	•	 	Maintain and compare multiple schedules.	
 
 	•	 	Change travel time, flight/train number, status, equipment type, and cabin/car configuration.	
 
 	•	 	Automatically update cabin/car configuration based on Authorized Unit (AU) changes.	
 
 	•	 	Maintain automated or user-defined schedule change queuing.	
 
 	•	 	Create and modify preliminary schedules offline prior to activation.	
 
 	•	 	Display detailed inventory and change history.	
 
 	•	 	Configure availability display for real-time travel component modifications.	
 
 	•	 	Print schedules.	
 
 	•	 	Maintain carrier-specific cities or airport/station codes in the airport/station table.	
 
 	•	 	Generate schedules in industry-standard formats.	
 
 	•	 	Import and export SSIM files.	
 
 	•	 	Maintain standby priority of a re-accommodated passenger.	
 
Exhibit A - 34

Hosted Services Agreement
 
 	•	 	Create a preliminary schedule for comparison of active schedule.	
 
 	•	 	Flag certain travel components and indicate whether they are for general use or not.	
 
 	•	 	Dynamic seating legend to display system and custom seat properties.	
 
 	•	 	Create circle travel components.	
 
 	•	 	Support for travel segments crossing the International Date Line.	
General Features – Fare and Inventory Management – SkyFare/SkyManager
 
 	•	 	Support for multiple currencies.	
 
 	•	 	Set the booking default currency based on origin city.	
 
 	•	 	Create and maintain fare rules.	
 
 	•	 	Apply advance purchase requirement.	
 
 	•	 	One-way, return (round-trip), and open jaw fares.	
 
 	•	 	Apply seasonality criteria to fares.	
 
 	•	 	Specify minimum number of passengers required.	
 
 	•	 	Specify day-of-week stay over requirement.	
 
 	•	 	Specify minimum/maximum stay requirement.	
 
 	•	 	Specify combinability rules.	
 
 	•	 	Specify directional fares.	
 
 	•	 	Specify travel date and sales date restrictions.	
 
 	•	 	Specify valid passenger discount types.	
 
 	•	 	Organization-specific fares.	
 
 	•	 	Fare branding to bundle distinct services with a recognized product name.	
 
 	•	 	Combine base fare, sales taxes, and travel fees for end user display (excludes GDS).	
 
 	•	 	Maintain discrete fare classes (unaffected by standard nesting rules).	
 
 	•	 	Create and modify fares using file import/export.	
 
 	•	 	Apply global fare changes.	
 
 	•	 	Differentiate between CRS/GDS and internal AU application.	
 
 	•	 	Support for revenue management interface files.	
 
 	•	 	Define fare classes and fare access by user role.	
 
 	•	 	Role- and fare-based hold settings.	
 
 	•	 	Validate standby fare classes.	
 
 	•	 	Create and maintain SkySpeed and SkySales fare rule files for passenger advice.	
 
 	•	 	Create and maintain fee types, descriptions, amounts, and currencies.	
 
 	•	 	Negative fees.	
 
 	•	 	Refunds.	
 
 	•	 	Implement availability status (AVS) RECAP and/or RESYNC either automatically or manually.	
 
 	•	 	Manage AU(s) at a leg and route level.	
 
 	•	 	Run a pending batch of fares manually, on demand.	
 
 	•	 	Negotiated space functionality for third parties, such as tour operators.	
SkyPay – Payment Processing and Settlement
General Features – SkyPay – Payment Processing and Settlement
 
 	•	 	Create and maintain payment types.	
 
 	•	 	Enter multiple payments on an individual PNR.	
 
 	•	 	Allow PNR(s) to be ended with partial payment, based on role.	
 
 	•	 	Allow PNR(s) to be ended with a negative balance.	
 
 	•	 	Authorize credit cards manually; with processor approval.	
 
 	•	 	Restrict refunds by payment type and/or user group.	
 
 	•	 	Reverse a previously-entered payment.	
 
 	•	 	Support credit card processing as outlined in Section 7.4 of Exhibit A of this Agreement.	
 
 	•	 	Select bank direct payments via SkySpeed and SkySales. (Settlement is dependent on Bank file.)	
 
 	•	 	Require AVS and CVV for payment verification purposes via SkySales and/or SkySpeed. (AVS is not supported in all regions.)	
 
 	•	 	Support the configuration and storage of data related to installment payments.	
SkyPort – Airport Check-in System
General Features – SkyPort – Airport Check-in System
 
 	•	 	Check in one or more passengers on the same PNR at the same time.	
 
 	•	 	Board one or more passengers on the same PNR at the same time.	
 
 	•	 	Issue boarding passes and bag tags for standby passengers.	
 
 	•	 	Display travel segment data and remarks.	
 
 	•	 	Open, close, and lock travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Create and modify PNR(s) in real-time.	
 
 	•	 	Associate or disassociate passengers with customer credit files.	
 
 	•	 	Display passenger lists, such as confirmed, standby, connecting, no-show, same PNR, etc.	
 
 	•	 	Display list of travel segments according to numerical order of flight/train/bus/ferry.	
 
Exhibit A - 35

Hosted Services Agreement
 
 	•	 	Make changes to passenger information directly on the PNR.	
 
 	•	 	Change the priority code of standby passengers.	
 
 	•	 	Print passenger manifests.	
 
 	•	 	Print passenger receipts/itineraries to peripheral boarding pass printers. (Supported printers may be found under Customer Requirements; Equipment Specifications).	
 
 	•	 	Display passenger ticket numbers on boarding passes.	
 
 	•	 	Scan boarding passes to print bag tags.	
 
 	•	 	Automatic generation and printing of bag tags.	
 
 	•	 	Pre-assigned seating.	
 
 	•	 	Assign seats or change seat assignments.	
 
 	•	 	Hold or block seats.	
 
 	•	 	Dynamic seating legend to display seat properties.	
 
 	•	 	Support for multiple equipment configurations.	
 
 	•	 	Assign or remove SSR codes.	
 
 	•	 	Display multiple SSR codes assigned to a passenger.	
 
 	•	 	Add SSR fees after check-in.	
 
 	•	 	Assign a voucher to a passenger.	
 
 	•	 	Input and retrieve Flight Following information.	
 
 	•	 	Re-accommodate passengers for irregular operations (IROP).	
 
 	•	 	Maintain checked and boarded status on international flights during an irregular operation (IROP).	
 
 	•	 	Create ad hoc connections between cities and markets where connections are not routinely created (IROP).	
 
 	•	 	Allow or restrict agents from checking in selected passengers.	
 
 	•	 	Allow or restrict the ability for agents to log in to a location other than the assigned default location.	
 
 	•	 	Display historical manifests, including checked and no-show passenger details.	
 
 	•	 	Report gender count and weight categories for passenger-driven weight-and-balance calculation.	
 
 	•	 	Support for station add/collects.	
 
 	•	 	Support for cash-out sales by agent.	
 
 	•	 	Support for agent login security.	
 
 	•	 	Display daily station-specific note pages for company updates.	
 
 	•	 	Customizable reference system for carrier policies and procedures.	
 
 	•	 	Online help system.	
 
 	•	 	Agent reports, Flight Following, Irregular Operations (IROP), and message generation (internal and Teletype).	
 
 	•	 	Display inventory.	
 
 	•	 	Cancel or suspend inventory.	
 
 	•	 	Support for ARINC/MUSE and SITA/CUTE (certification required).	
 
 	•	 	Allow or prevent agents from viewing or editing passengers who are on Lock or Warning queues.	
 
 	•	 	Specify the amount of time allowed to open or close travel segments after departure.	
 
 	•	 	Prompt for AU updates during equipment swap.	
 
 	•	 	Generate outbound BSM messages.	
 
 	•	 	Accept and process MVT messages for travel segment information updates.	
 
 	•	 	Support the configuration and storage of data related to installment payments.	
 
 	•	 	Transmit APIS data to government authorities via EDIFACT messaging. (NAVITAIRE APIS solution has been certified by customers with U.S. and Canadian customs authority. APIS requirements from other countries may require additional development and testing.)	
 
 	•	 	Address in country/CBP - APIS enhancements. (NAVITAIRE APIS solution has been certified by customers with U.S. and Canadian customs authority. APIS requirements from other countries may require additional development and testing.)	
 
 	•	 	Includes the NAVITAIRE Terminal Emulator, which is required to access SkyPort.	
New Skies Reports – Reporting System
General Features – New Skies Reports
 
 	•	 	Run reports “on-demand’ on the NAVITAIRE Reporting platform.	
 
 	•	 	Reports may be exported in various data formats, including CSV (Comma Delimited), XML, and PDF. (Microsoft Excel can open and import CSV and XML file formats.)	
 
 	•	 	Detail reports that generate output based on a user-specified time frame can produce at least one full day of detail data.	
 
 	•	 	Summary reports that generate output based on a user-specified time frame can produce up to one month of summary data.	
 
 	•	 	Option to request NAVITAIRE report development at an additional charge.	
 
 	•	 	Report files generated by the New Skies Reports subscription functionality will be retained for up to fourteen (14) days from the date they are generated.	
General Features – Standard Reports
The following is an alphabetical list by function, which contains a description of the standard reports available as a part of the Hosted Reservation Services. These reports may be added to, deleted, modified, changed, eliminated or substituted for at the discretion of NAVITAIRE at any time. The reports are viewed online via a browser interface.
 
Exhibit A - 36

Hosted Services Agreement
 
Accounting General
 
 	•	 	AG Payments -Displays information about activity within a travel agency during a specified period of time.	
 
 	•	 	Agency List -Displays information about the travel agency, corporate or Air Travel Organizer’s License (ATOL) accounts that have been entered for your carrier.	
 
 	•	 	Agency List Summary -Displays a summary view of the agencies associated with your carrier.	
 
 	•	 	Availability Information -Displays flight availability information, including lid, capacity, seats sold	
 
 	•	 	Bank Reconciliation - Reconciles bank transactions.	
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
 	•	 	Cancellation After Travel Date -Displays passenger and fare information about cancelled booking segments.	
 
 	•	 	Checked Baggage -Displays baggage information for flights.	
 
 	•	 	Checked In Passengers By Fare Class -Displays the total number of passengers by fare class who were checked-in.	
 
 	•	 	Commissions Incurred - Provides commissions information for each of the travel agency that generates bookings for your carrier.	
 
 	•	 	Credit File Commissions -Displays commission information on travel agency bookings.	
 
 	•	 	Credit Shell File -Displays credit shell/file activity and balances.	
 
 	•	 	Credit Shell File Expired - Lists expired credit files and credit shells.	
 
 	•	 	Customer ID By Flight -Displays the customer IDs associated with passengers booked on a selected flight.	
 
 	•	 	Daily Agency Charges -Displays the number of charges and activity performed by each agency during a specified day.	
 
 	•	 	Enplanement Deplanement -Displays either enplanements or deplanements by airport.	
 
 	•	 	Fare Overrides -Displays fare override information by agent.	
 
 	•	 	Fees And Discounts -Displays passenger-level service fees, SSR fees, seat fees, and penalty fees.	
 
 	•	 	Fees And Discounts By Date -Displays fees that were manually added to the booking.	
 
 	•	 	Fees And Discounts By Location And Agent -Displays fees that were manually added to the booking by location and by agent.	
 
 	•	 	Fees And Discounts By Location And Fee Type -Displays fees that were manually added to the booking by location and by fee type.	
 
 	•	 	Gender Count By Fare Class - Lists and breaks down passenger information by fare class.	
 
 	•	 	Generic Tax History -Displays information about the selected tax.	
 
 	•	 	Net Sales - Summarizes net sales figures.	
 
 	•	 	No Shows -Displays the names, PNRs, flight dates, and flight numbers for no-show passengers.	
 
 	•	 	Payment Detail -Displays information about payments made.	
 
 	•	 	Payment Detail Consolidation -Displays information about payments made and is further organized by booking source.	
 
 	•	 	Payment Receipts -Displays information about all payments made on the payment approval date.	
 
 	•	 	Payment Receipts Restricted -Displays information about all payments made on a specified date.	
 
 	•	 	Payments By Batch Code -Displays information on the batch codes used to make payments on bookings.	
 
 	•	 	PNR Out of Balance - Queries for reservations that have a credit and/or balance due.	
 
 	•	 	Refunds -Displays refunds made by specific departments.	
 
 	•	 	Sales Exceptions -Displays the information on PNRs when the balance of the PNR and the payments made differ.	
 
 	•	 	Seat Assignments By Agent - Provide the total number of seat assignments made by specific agents.	
 
 	•	 	Segment Activity By City Pair -Displays information on confirmed and/or unconfirmed booking amounts and passenger totals by city pairs.	
 
 	•	 	Segment Activity By Flight Date -Displays information on segment activity by flight date.	
 
 	•	 	Segment Activity Detail -Displays information on segment activity for a specific date or date range.	
 
 	•	 	Segments By Agent - Shows the number of segments that were created or cancelled during the period and the charges associated with those segments made by individual agents.	
 
 	•	 	Unapproved Payments -Displays all payments, by payment type that have not been approved.	
 
 	•	 	US Security Fees - Provides information required by the TSA.	
Accounting – Travel Agency Specific
 
 	•	 	Account Charges -Displays charges to agency accounts.	
 
 	•	 	AG Payments -Displays information about activity within a travel agency during a specified period of time.	
 
 	•	 	Agency List -Displays information about the travel agency, corporate or Air Travel Organizer’s License (ATOL) accounts that have been entered for your carrier.	
 
 	•	 	Agency List Summary -Displays a summary view of the agencies associated with your carrier.	
 
 	•	 	Commissions Incurred - Provides commissions information for each of the travel agency that generates bookings for your carrier.	
 
 	•	 	Daily Agency Charges -Displays the number of charges and activity performed by each agency during a specified day.	
 
 	•	 	Travel Agency Aging - Determines the outstanding and/or unused amounts for an agency as of the report date.	
 
 	•	 	Travel Agency Payments -Displays information on payments made by an agency.	
Add-on Services
 
 	•	 	Ancillary Services Detail - Generates detailed information on car rentals, insurance, and hotels.	
 
 	•	 	Ancillary Services Summary - Generates summary information on car rentals, insurance, and hotels.	
 
 	•	 	Car Rental -Displays information on car hire auxiliary services.	
 
 	•	 	Insurance - Tracks the amount of revenue generated by passengers purchasing insurance.	
Booking
 
 	•	 	Bookings By Agent -Displays total bookings created by an agent.	
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
Exhibit A - 37

Hosted Services Agreement
 
 	•	 	Bookings By Agent Detail Restricted - Provides detailed information on bookings made by individual booking agents restricted by the agent’s location and domain.	
 
 	•	 	Bookings By Agent Restricted - Provides detailed information on bookings made by individual booking agents restricted by the agent’s location.	
 
 	•	 	Bookings By Fare Class with Equipment -Displays passenger/segment booking and fare totals by fare class.	
 
 	•	 	Bookings By Market -Displays passenger totals, booking amounts, and average fares for individual markets.	
 
 	•	 	Bookings By Origin -Displays segment booking information (total segments and fare amounts by currency) for each originating city.	
 
 	•	 	Bookings By Schedule - Monitors bookings for a specified origin/destination (city pair) on a specific date.	
 
 	•	 	Bookings By Source - Provides a count of active (not cancelled) booking Segments and Journeys by booking source or channel.	
 
 	•	 	Booking Statistics - Determine flown and unflown revenue by booking source.	
 
 	•	 	Bookings By Time -Displays booking information in hourly increments.	
 
 	•	 	Days Out Bookings -Displays information about segment bookings made on a specific date, the number of segments sold in future dates following the selected booking date, and the actual travel date when these bookings were made.	
 
 	•	 	Duplicate Bookings - Lists different PNRs for the same flight and date that contain identical passenger names.	
 
 	•	 	E-Ticket On Demand -Displays information on the dates E-Tickets were issued for billing purposes.	
 
 	•	 	Group Bookings Out of Balance - displays information on group reservations that have a credit and/or balance due.	
 
 	•	 	Net Booking Transactions - determines revenue from confirmed bookings by booking source using the date created.	
 
 	•	 	Transaction By Channel - Provides booking, segment, and availability call transaction counts that are used to generate monthly invoices for billing.	
Codeshare
 
 	•	 	IATCI Reporting - Provides Inter Airline Through Check-in (IATCI) data to carriers expanding their existing code share partnerships with other airlines.	
Department of Transportation (DOT)
 
 	•	 	DOT Non Stop Market -Displays non-stop market information required by the U.S. Department of Transportation.	
 
 	•	 	DOT On-Flight Market -Displays passenger totals for flown flights required by the U.S. Department of Transportation.	
Inventory
 
 	•	 	Cancelled Inventory With Passengers - Provides the number of passengers who may need to be re-accommodated to another flight due to a cancellation	
 
 	•	 	Flight Capacity Lid -Displays information on seat capacity (or lid) and availability.	
 
 	•	 	Flight Schedule -Displays scheduled departure cities and times for flights	
 
 	•	 	Inventory Capacity - Lists capacity, lid, net seats sold, and seats sold today for flights.	
 
 	•	 	Load Factor Search -Displays load factor information.	
 
 	•	 	Seat Property Match -Displays counts of how many passengers requested seat assignments and how many got the seats they actually requested.	
 
 	•	 	Seating Exceptions - Designed to identify PNRs with particularly low match rates on desired properties.	
 
 	•	 	Seats Sold By Cabin -Displays the number of seats sold, and fare amounts, by cabin.	
 
 	•	 	Seats Sold By Fare Class -Displays the number of seats sold in each fare class.	
Management Performance
 
 	•	 	City Pair Load Factor - Provides information about the productivity of flights servicing different city pairs.	
 
 	•	 	Flight Specific Load Factor -Displays flight specific load factor information.	
 
 	•	 	Revenue By Flight -Displays revenue by average seat mile/kilometer for each date and for individual flights.	
Marketing
 
 	•	 	Promo Codes By Booking Date -Displays information on PNRs with promotion codes by booking date.	
 
 	•	 	Promo Codes By City Pair -Displays information on promotion codes by city pairs.	
Operations
 
 	•	 	Availability Information -Displays flight availability information, including lid, capacity, seats sold, and GDS triggers for selected flights on selected dates.	
 
 	•	 	Checked Baggage -Displays baggage information for flights.	
 
 	•	 	Checked In Passengers By Fare Class -Displays the total number of passengers by fare class who were checked-in.	
 
 	•	 	Flight Line -Displays passenger counts for a specific flight on a specified date.	
 
 	•	 	Flight Load -Displays passenger totals for flights.	
 
 	•	 	Flight Manifest -Displays passenger information for selected flights.	
 
 	•	 	Flight Schedule -Displays scheduled departure cities and times for flights.	
 
 	•	 	Flight Specific Load Factor -Displays load factor information.	
 
 	•	 	Gender Count By Fare Class -Breaks down passenger information by fare class.	
 
 	•	 	IROP And Moved Passengers - Lists all PNR’s that have been moved by IROP.	
 
 	•	 	Lock List - Allows you to print all data associated with a name on the watch list.	
 
 	•	 	Lock List History - Allows you to print all data associated with activity on the lock list including those who have been moved on as well as cleared from the list.	
 
 	•	 	Manifest With Connection Information - Lists connection information for booked passengers.	
 
 	•	 	Selectee Report - Lists the number of passengers that have been identified for additional security screening.	
 
 	•	 	SSR Flight Information - Provides a list of passengers with SSRs on a flight by flight basis and the SSR counts by flight.	
 
Exhibit A - 38

Hosted Services Agreement
 
 	•	 	SSRs By Agent - Lists and subtotals SSR code assignments by the Agent ID that assigned them.	
 
 	•	 	SSRs By Flight - Allows you to generate SSR statistics for inbound, outbound, thru, connection or all flight types.	
 
 	•	 	Watch List - Allows you to print all data for a single Watch ID, a range of Watch IDs, or all Watch IDs	
Payment
 
 	•	 	Payment Detail -Displays information about payments made.	
 
 	•	 	Payment Detail Consolidation - displays information about payments made. Information may be further organized by booking source, transaction type, department, and agent.	
 
 	•	 	Payment Receipts -Displays information about all payments made on the payment approval date.	
 
 	•	 	Payment Receipts Restricted -Displays information about all payments made by payment type, agent, location, and department.	
 
 	•	 	Payments By Batch Code -Displays information on the batch codes used to make payments.	
 
 	•	 	Payment Summary -Displays information on what location and department received the payment, the payment method, and how much of the payment was collected.	
 
 	•	 	Unapproved Payments -Displays all payments, by payment type that have not been approved.	
PNR Diagnostics
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
 	•	 	Duplicate Bookings - Lists different PNRs for the same flight and date that contain identical passenger names.	
 
 	•	 	PNR Activity -Displays transaction activity performed on individual PNRs.	
 
 	•	 	PNR Out of Balance - Allows you to query for reservations that have a credit and/or balance due.	
 
 	•	 	PNRs On Queue -Displays information about all PNRs that are currently awaiting processing in one or more queues including subqueues.	
Revenue
 
 	•	 	City Pair Load Factor - Provides an extensive array of information about the productivity of flights servicing different city pairs.	
 
 	•	 	Earned Unearned Revenue - Allows you to view information on earned (flown) revenue, unearned (no-show, unflown) revenue, or both earned and unearned revenue.	
 
 	•	 	Earned Unearned Revenue Detail - Provides details in addition to those generated in the Earned Unearned Revenue Report	
 
 	•	 	Enplanement Deplanement -Displays either enplanements or deplanements by airport.	
 
 	•	 	Revenue By Fare Class -Displays earned revenue by fare class.	
 
 	•	 	Revenue By Flight -Displays revenue by average seat mile/kilometer for each date and for individual flights.	
 
 	•	 	Revenue By Market -Displays base and gross revenue information by market.	
Flight Information Control and Display (FLIFO)
General Features – Flight Information Control and Display (FLIFO)
 
 	•	 	Input and update departure and arrival information for travel segments.	
 
 	•	 	Accept and transmit industry MVT messages via Type B/Teletype with applicable Operational Message Add-on Suite.	
Agency Billing and Commissions
General Features – Agency Billing and Commissions
 
 	•	 	Create, maintain and retrieve travel agency commissions, charges and payments data.	
 
 	•	 	Set up to individual commission rates based on distribution channel for each agency.	
 
 	•	 	Create an invoice line of credit for travel agencies and corporations.	
 
 	•	 	Access the ODS to extract agency billing and commission data.	
 
 	•	 	Calculate commissions at the booking date.	
 
 	•	 	Include the journey details in the Agency Billing and Commission Extract.	
 
 	•	 	Use the add-on commission field to specify and additional percent to represent GST.	
 
 	•	 	Recall commissions based upon agency.	
 
 	•	 	Invoice multiple agencies for one booking.	
 
 	•	 	Create multiple commission records, as long as an agency is tied to each activity.	
SkyManager – Configuration and Management Utility
General Features – SkyManager Management Console
 
 	•	 	Graphical interface for management of system settings, carrier, and user configurations.	
 
 	•	 	Configure security roles and login requirements for agents, including individual permissions for a variety of tasks, such as creating and modifying reservations, access to various system components, seat assignments, overbooking, discounts, promotion codes, fees, moves, passenger types, fare quotes, etc.	
 
 	•	 	Configure passenger discount codes.	
 
 	•	 	Configure vouchers.	
 
 	•	 	Maintain various codes, such as country codes, currency code, and delay codes.	
 
 	•	 	Support for currency conversion rate imports.	
 
 	•	 	Configure daily and real-time company notes.	
 
Exhibit A - 39

Hosted Services Agreement
 
 	•	 	Manage IATA and carrier-specific SSR codes.	
 
 	•	 	Configure taxes and various fees - such as travel fees, SSR fees, payment fees, seat fees, spoilage fees, etc.	
 
 	•	 	Set fee amounts based on channel.	
 
 	•	 	Apply or exempt penalty fees based on organization, role, and fare class.	
 
 	•	 	Exempt stations from certain taxes and fees (such as rural airports where PFC does not apply).	
 
 	•	 	Configure variable taxes for fees.	
 
 	•	 	Configure passenger discount types.	
 
 	•	 	Configure queues and queue events.	
 
 	•	 	Set restriction levels on individual queue categories.	
 
 	•	 	Password-protect queues.	
 
 	•	 	Manage inventory for fares and SSRs.	
 
 	•	 	Synchronize inventory between multiple systems.	
 
 	•	 	Configure variable credit expiration criteria for credit types.	
 
 	•	 	Configure payment validation and authorization restrictions.	
 
 	•	 	Manage Web Service permissions at the method (function) level. (System Master only.)	
 
 	•	 	Enable users to search by the lowest fare in a market for a number of days out. (Premium Service.)	
 
 	•	 	Define a declined payment “hold period” based on booking channel.	
General Features – Message Interface (Type B/Teletype)
 
 	•	 	Support for the following Type B/Teletype messages:	
 
 	•	 	Baggage Service Messages - BSM	
 
 	•	 	Operation System Messages - PXA, PXB, MVT	
 
 	•	 	AIRIMP Messages (accept and reply)	
General Features – Security
 
 	•	 	Configure whether the credit card number used as booking payment is concealed or displayed.	
 
 	•	 	Create & manage a table of restricted credit cards.	
 
 	•	 	Manage Security Watch List functionality. (Optional)	
 
 	•	 	Create & manage government or carrier watch list for reservation/passenger matching, queuing, and check-in lock.	
 
 	•	 	Require a unique customer ID for each passenger booked on a reservation. (Optional)	
 
 	•	 	Automate updates to the U.S. Securities Watch List through a scheduled job.	
PNR Archiving
General Features – PNR Archiving
 
 	•	 	Moves PNR data from production to the archive fifteen (15) months after the last flight segment in the PNR is marked as flown or no-show and the booking is in balance.	
 
 	•	 	Retains PNR data in the archive for eighty one (81) months, for a total of ninety six (96) months of data retention.	
 
 	•	 	Archived data is viewable only through SkySpeed.	
 
 	•	 	Comments can be added to an individual archived PNR through SkySpeed.	
Note: If Extended PNR Archiving is not selected by Customer, PNR data will be purged ninety six (96) months after the last travel segment in a PNR has been marked as traveled (e.g. flown) or no-show.
Limitations and Exclusions
 
 	•	 	PNR Archiving does not include schedules, SkyPort, or any other non-PNR data.	
 
 	•	 	Changes to archived data are prohibited except for the ability to add a comment through SkySpeed, as noted above.	
 
 	•	 	While bookings in the archive database appear exactly as they appeared in SkySpeed prior to being archived, including the full history, the archive database does not contain version history records which enable “as-of” reporting.	
 
 	•	 	Reporting on archived data includes the following reports:	
 
 	•	 	Archive Booking; and	
 
 	•	 	Archive Flight Manifest.	
 
 	•	 	Data Store access does not include access to the PNR Archive database.	
Hosted Reservation Services – New Skies
Add-On Functionality
CRS/GDS/ARS Type B/Teletype or Type A/EDIFACT Connectivity
General Features – CRS/GDS/ARS Type B/Teletype Connectivity
 
 	•	 	Support for IATA/AIRIMP standard free-sale distribution using Teletype (Type B) formatting with host carrier receiving inbound sales from CRS/GDS/ARS, or host carrier making outbound sales from Call Center or Website on targeted ARS interline partners.	
 
 	•	 	Support for IATA/AIRIMP Type B/Teletype message processing. The product has been certified with the following third party CRS/GDS/ARS providers: ***** all of which support the IATA AIRIMP Type B/Teletype message format.	
 
 	•	 	Host-to-host direct connectivity to exchange messages with *****	
 
 	•	 	Guarantee inbound reservation sales with automated credit card approval/settlement through SkyPay.	
 
Exhibit A - 40

Hosted Services Agreement
 
 	•	 	Confirm inbound CRS/GDS/ARS bookings with SSR ticket number form of payment notification, which includes the following IATA E-Ticket TKNE support:	
 
 	•	 	Generate post-departure E-Ticket ‘Lifted/Boarded’ status updates to an Electronic Ticketing Interchange and Database Provider using standard teletype ETL (E-Ticket List) messages.	
 
 	•	 	Transmit E-Ticket number data generated by the NAVITAIRE system via standard teletype automated SSR TKNE to host outbound interline carriers.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by and validated on another airline that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on the host carrier’s accounting code.	
 
 	•	 	Store E-Ticket numbers in the NAVITAIRE system at the passenger and segment level.	
 
 	•	 	Note: Customer is responsible for negotiating and maintaining the appropriate agreements with an Electronic Ticketing Interchange and Database Provider as well as bi-lateral Interline E-Ticketing agreements with other carriers.	
 
 	•	 	Auto-cancel or hold bookings when payment is not received inbound in the established timeframe, and to send notification to the CRS/GDS/travel agency.	
 
 	•	 	Notify CRS/GDS/travel agency of Automatic Schedule Changes (ASC).	
 
 	•	 	Capture and validate IATA/ARC Terminal IDs, non-registered agency, or third-party account in Organizations.	
 
 	•	 	Support Automated Inventory (AVS) LC, LA, and LR messages to and from CRS/GDS/ARS customers.	
 
 	•	 	Process and reply to initial booking requests, change and cancel requests, and other update requests including DVD (divide number in party) and CHNT (change name) messages.	
 
 	•	 	Calculate price and reply to CRS/GDS/ARS travel agency/carrier with the “amount due” for the external booking request.	
 
 	•	 	View inbound Teletype communications with the CRS/GDS/ARS travel agencies within the PNR history.	
 
 	•	 	View and process rejected Teletype messages.	
 
 	•	 	Maintain travel agency and third-party Organization accounts.	
 
 	•	 	Set last seat availability or inventory open/close trigger levels for CRS/GDS/ARS bookings.	
 
 	•	 	Configure CRS/GDS/ARS booking configurations to allow or disallow: hold time, promotion codes, and agency payment automatic confirmation.	
 
 	•	 	Specify which classes of service may be sold by the CRS/GDS/ARS.	
 
 	•	 	Auto-debit agency credit account for PNR booked or use agency credit when an appropriate SSR or OSI message is received.	
 
 	•	 	Automatically create credits for cancellation requests via booking configuration.	
 
 	•	 	Support a set of IATA/ARIMP Special Service Requests (SSR/OSI) including seat requests.	
 
 	•	 	Settle via Agency, Billing and Commission module functionality (optional).	
 
 	•	 	Support for industry-standard group name formats and SSR GRPS for group requests originated by a CRS/GDS/ARS. Group names must include at least three (3) characters, including slashes and spaces. For example: 10IP/, 10IP/TOUR, 10IP TOUR, 10I/P, 10IPA.	
 
 	•	 	Selectively allow holds for CRS/GDS/ARS bookings based on any combination of User Group, Fare Class, Agency ID, flight (Segment) number, flight (Segment) range, origin, or destination.	
 
 	•	 	Apply payment to group bookings, including the ability to accept group deposits (i.e., partial payments) using AG credit accounts.	
 
 	•	 	Consolidators to apply payment to exiting, on hold PNRs transferred to the consolidator by a sub-agency without making the process visible to the sub-agency.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically full availability participation) and for travel agency settlement.
General Features – CRS/GDS/ARS Type A/EDIFACT Booking Connectivity
 
 	•	 	Type A/EDIFACT Booking Connectivity includes all features listed in Type B/Teletype Connectivity for CRS/GDS as listed above, in addition to the following:	
 
 	•	 	Support interactive selling via EDIFACT ITAREQ/RES messages.	
 
 	•	 	Support PNR wrap-up via EDIFACT HWPREQ/RES messages.	
 
 	•	 	Support session clear or terminate via EDIFACT CLTREQ/RES messages.	
 
 	•	 	Accept and reply to sell requests for Segments (flights) marketed by Customer under their carrier code.	
 
 	•	 	Support for IATA/AIRIMP Type A/EDIFACT Booking messages. The product has been certified with the following third-party CRS/GDS/ARS providers: *****, all of which support the IATA AIRIMP Type A/EDIFACT message formats.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically higher GDS participation levels) and for travel agency settlement and/or other carrier settlement.
General Features – CRS/GDS/ARS Type A/EDIFACT Availability Connectivity
 
 	•	 	Type A/EDIFACT Availability includes the ability to receive and reply to the following inbound Product Availability Offering messages:	
 
 	•	 	Support for interactive availability via EDIFACT PAOREQ/RES messages.	
 
 	•	 	Support for market-based availability EDIFACT Message Types 44 and 45.	
 
 	•	 	Support for flight (Segment)-specific availability EDIFACT Message Types 46 and 47.	
 
 	•	 	Return real-time availability for Segments (flights) marketed by Customer under their own carrier code.	
 
 	•	 	Return a numeric inventory value for each class of service configured for use with the external system.	
 
Exhibit A - 41

Hosted Services Agreement
 
 	•	 	Support for segment type indicators in a market request, including non-stop, direct/through, and connections.	
 
 	•	 	Support multiple-airport (station) code (MAC) requests.	
 
 	•	 	Accept and reply to market availability requests that contain a specific class of service.	
 
 	•	 	Support for IATA/AIRIMP Type A EDIFACT Availability messages. The product has not been certified for use with any CRS/GDS/ARS provider at this time.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically higher GDS participation levels) and for travel agency settlement and/or other carrier settlement.
General Features – Instant Pay™ (requires Type B/Teletype or Type A/EDIFACT Booking Connectivity, as applicable, with partner(s))
 
 	•	 	Accept and process passenger or agency credit card for booking confirmation.	
 
 	•	 	Auto-debit travel agency credit account for booking confirmation or debit agency credit when applicable SSR message is received.	
 
 	•	 	Payment amount notification returned to travel agent via participating CRS/GDS.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Codeshare Distribution
General Features – Codeshare Distribution
 
 	•	 	Support for IATA/AIRIMP standard codeshare free-sale distribution using Option 2 or Option 4 Type B/Teletype formatting with host carrier as operating carrier and/or marketing carrier and;	
 
 	•	 	Support codeshare schedules.	
 
 	•	 	Support Option 2 or Option 4 booking requests.	
 
 	•	 	Support automated inventory (AVS) messages to codeshare partner.	
 
 	•	 	Support automated schedule change messages (ASC).	
 
 	•	 	Support receipt, storage of IATA SSR ticket number notifications (TKNA, E, M) per passenger.	
 
 	•	 	Control pricing and fares for codeshare segments.	
 
 	•	 	Support fare class mapping with partner.	
 
 	•	 	Support partner account payments, with ad-hoc or default IATA/agency accounts.	
 
 	•	 	Support dual record locator and TRL messages.	
 
 	•	 	Form of payment using payment methods used for other booking channels as enabled via New Skies reservation system configuration utility.	
 
 	•	 	Unique codeshare indicator on reservation PNR displays.	
 
 	•	 	Support interline through check-in of baggage.	
 
 	•	 	Support optional booking record content of OA (other airline) passive/information segments.	
 
 	•	 	Add OA passive/informational segments during the check in process to facilitate through baggage check-in.	
 
 	•	 	View inbound teletype communications from codeshare partners within the PNR history.	
 
 	•	 	Process and reply to initial booking requests, change and cancel requests, and other updates including DVD (divide number in party) and CHNT (change name) messages.	
 
 	•	 	View and process rejected teletype messages.	
 
 	•	 	Configure codeshare booking configurations to allow or disallow: hold time, promotion codes, and agency payment automatic confirmation.	
 
 	•	 	Specify which classes of service may be sold by the codeshare partner.	
 
 	•	 	Support a set of IATA/AIRIMP special service requests (SSR/OSI) including seat requests, ticket number advisories, passenger service information such as wheelchairs, pets, and more.	
 
 	•	 	Settlement via Agency, Billing, and Commissions module functionality.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically full availability participation) and for codeshare settlement.
Block Space Codeshare (non-automated booking inventory)
General Features – Block Space Codeshare (non-automated booking inventory)
 
 	•	 	Product support for block space codeshare distribution, host carrier as operating or marketing carrier.	
 
 	•	 	Ability to sell codeshare inventory from availability displays.	
Note: Contact NAVITAIRE for additional functionality available for related support processes and configuration available for non-automated booking inventory process for block space arrangements.
E-Ticket Issuance and Connectivity (from SkySpeed)
General Features – E-Ticket Issuance and Connectivity (from SkySpeed)
 
 	•	 	Generate the following TKTREQ ticketing messages to an Electronic Ticketing Interchange and Database Provider using standard EDIFACT version 03:2 (#130 Issue, #131 Display, #79 System Cancel, and #134 Exchange/Reissue).	
 
 	•	 	Configure the data required to support Interline E-Ticketing in the NAVITAIRE system.	
 
Exhibit A - 42

Hosted Services Agreement
 
 	•	 	Place host marketing codeshare and outbound interline bookings on a PNR queue for ticketing.	
 
 	•	 	Issue host carrier validated adult and infant Interline E-Tickets using the NAVITAIRE system.	
 
 	•	 	Reissue host carrier validated adult and infant Interline E-Tickets using the NAVITAIRE system.	
 
 	•	 	Reissue adult and infant Interline E-Tickets issued by and validated on another carrier when E-Ticket number and applicable fare data is stored in the NAVITAIRE system.	
 
 	•	 	Reissue adult and infant Interline E-Tickets issued by a GDS subscriber and validated on another carrier when E-Ticket number and applicable fare data is stored in the NAVITAIRE system.	
 
 	•	 	Display host carrier validated E-Ticket data using the NAVITAIRE system.	
 
 	•	 	Generate post-departure E-Ticket ‘Lifted/boarded’ status updates to an Electronic Ticketing Interchange and Database Provider using standard teletype ETL (E-Ticket List) messages.	
 
 	•	 	Ability to transmit E-Ticket number data generated by the NAVITAIRE system via standard teletype automated SSR TKNE to host marketing codeshare and outbound interline carriers.	
 
 	•	 	Ability to accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Ability to accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on the host carrier’s accounting code.	
 
 	•	 	Ability to store E-Ticket numbers in the NAVITAIRE system at the passenger and segment level.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements with an Electronic Ticketing Interchange and Database Provider as well as bi-lateral Interline E-Ticketing agreements with other carriers. Functionality is available on ***** and higher.
E-Ticket Display for externally hosted E-Ticket database (from SkySpeed)
General Features – E-Ticket Display for externally hosted E-Ticket database (from SkySpeed)
 
 	•	 	Generate the following TKTREQ ticketing message to an Electronic Ticketing Interchange and Database Provider using standard EDIFACT version 03:2 (#131 Display).	
 
 	•	 	Display host carrier validated E-Ticket data stored in the host carrier’s external E-Ticket database, using SkySpeed.	
 
 	•	 	Display interline partner validated E-Ticket data stored in the host carrier’s external E-Ticket database, using SkySpeed.	
 
 	•	 	Booking details displayed from partner from host carrier E-Ticket database.	
Note: Customer is responsible for establishing an E-Ticket database hosting agreement with a third party vendor and negotiating the appropriate bi-lateral Interline E-Ticketing agreements with other airlines and any costs associated with such. Functionality is available on ***** and higher.
Limitations and Exclusions
 
 	•	 	E-Tickets displayed must be included in host carrier E-Ticket database.	
 
 	•	 	E-Ticket will be displayed only when the host carrier is a participating carrier on the E-Ticket.	
 
 	•	 	Only E-Tickets are included in E-Ticket display. For example, paper tickets will not be displayed.	
 
 	•	 	Functionality that allows coupon status updates is not included.	
 
 	•	 	E-Ticket number format supported is 13 digits.	
 
 	•	 	Search to display E-Ticket is driven solely by E-Ticket number.	
GoNow – Agent
General Features – GoNow – Agent
 
 	•	 	Agent login security and permission settings.	
 
 	•	 	Integration with NAVITAIRE Terminal Emulator (NAVTE) to support SkyPort functions.	
 
 	•	 	Search for and select passengers.	
 
 	•	 	Display passenger, itinerary, and charge summary for selected passengers.	
 
 	•	 	Assign or modify seat assignments.	
 
 	•	 	Collect seat fees.	
 
 	•	 	Advanced baggage functionality.	
 
 	•	 	Support for special service requests (SSRs), with or without fees.	
 
 	•	 	Add service fees to bookings.	
 
 	•	 	Collect and authorize credit card and pre-paid payments.	
 
 	•	 	Check-in confirmed and standby passengers for hosted segments.	
 
 	•	 	Check-in using New Skies IATCI functionality.	
 
 	•	 	Modify booking information.	
 
 	•	 	Print and reprint boarding passes and passenger invoices.	
 
 	•	 	Travel component search and manifest display.	
 
 	•	 	Board passengers.	
 
 	•	 	Security document collection and enforcement.	
 
 	•	 	Receive interactive boarding directives (based on supported New Skies government security connections.)	
 
 	•	 	Support of New Skies Fly-Ahead functionality.	
 
 	•	 	Add and view booking comments.	
 
Exhibit A - 43

Hosted Services Agreement
 
 	•	 	Display Aircraft Zone Report.	
 
 	•	 	Support for SITA/CUTE interface. (Customer is responsible for certification.)	
 
 	•	 	Support for ARINC/MUSE interface. (Customer is responsible for certification.)	
Note : Functionality is compatible with ***** and higher. *****
Limitations and Exclusions
 
 	•	 	Off-line check-in functionality.	
 
 	•	 	Common use support for ARINC, ULTRA, and RESA: Further development is required to interface with hardware peripherals for document printing and receiving inputs from the reader and scanning devices via common use API. Development and certification for these common use providers is not included with the GoNow base offering.	
GoNow – Touch (Kiosk)
General Features – GoNow – Touch (Kiosk)
 
 	•	 	Self-serve check-in using a touch screen interface software application.	
 
 	•	 	Support for CUSS hardware device interface framework, integrating with the hardware via the CUSS API as referenced in the Common Use Self Service technical Specifications Version 1.0 published by IATA.	
 
 	•	 	Support for the following hardware devices (not currently certified with any CUSS provider):	
 
 	•	 	API-boarding pass printer;	
 
 	•	 	Magnetic card swipe;	
 
 	•	 	Passport scanner; and	
 
 	•	 	Bar code reader.	
 
 	•	 	Support for multi-language interfaces using translation files provided by Customer.	
 
 	•	 	Customization of GoNow–Touch pages with color themes and branding provided by Customer.	
 
 	•	 	Retrieve reservation and select up to six (6) passengers for check-in and service via the following:	
 
 	•	 	Credit card magnetic swipe, based on cardholder name stored in track data;	
 
 	•	 	Confirmation number, using touch screen keyboard input; and	
 
 	•	 	Passenger ID number (i.e., Passenger VIP number), using touch screen keyboard input.	
 
 	•	 	Management of duplicate values resulting from multiple matching passenger names.	
 
 	•	 	Display error message(s) for passengers who cannot be checked in, including add comment to booking.	
 
 	•	 	Display and review itinerary details and flight status.	
 
 	•	 	Select seat(s) from a graphical seat map, restricting configured blocked seats from being assigned.	
 
 	•	 	Select number of bags.	
 
 	•	 	Check in selected passenger(s).	
 
 	•	 	Add customer ID to passenger record.	
 
 	•	 	Print boarding pass(es).	
 
 	•	 	Display input track data from CUSS hardware while in test mode.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity. *****
Limitations and Exclusions
 
 	•	 	Customer is responsible for scheduling and costs associated with common use certification, including additional development required to achieve ARINC CUSS certification (i.e., CUSS or ARINC required exception and deployment requirements).	
 
 	•	 	Kiosk hardware support and monitoring is not included.	
 
 	•	 	NAVITAIRE will provide default GoNow Touch web skins. Customer is responsible for development and testing of any branding, localization, and customization.	
Customer Value and Recognition Rules Engine and Intelligent Seating
Includes:
 
 	•	 	Customer Value and Recognition Rules Engine.	
 
 	•	 	Intelligent Seating.	
 
 	•	 	Customer Value Based Irregular Operations and Schedule Changes.	
 
 	•	 	Customer Value Seat Assignment Scheduler (Interface to Seat or Re-seat all Passengers on a Travel Segment).	
 
 	•	 	Day of Departure FlyAhead Functions (Interface to Establish Alternative Same Day Travel and Associated Fees Offers).	
Note: Features of this suite are available in a series of New Skies releases beginning with New Skies 3.2, with more features added in 3.3 and 3.4. New Skies target release 3.4 is considered the baseline release with all functionality listed in this section.
General Features – Customer Value and Recognition Rules Engine
 
 	•	 	Configure rules for customer value score.	
 
 	•	 	Apply rules and score passengers in a PNR.	
 
 	•	 	Rules based on certain PNR criteria (e.g., program level, fare, ancillary products, class of service, origin/destination).	
 
 	•	 	Configure display value for passenger score range (e.g., High, Medium, Low).	
 
 	•	 	Display customer value default score in SkySpeed and SkyPort.	
 
 	•	 	Use customer value to set priority during operational disruptions (IROP) or schedule changes (reaccommodation).	
 
Exhibit A - 44

Hosted Services Agreement
 
 	•	 	Use customer value during seat assignment scheduler service.	
 
 	•	 	Use customer value to determine FlyAhead (same day confirmed) eligibility for operational involuntary or customer convenience offers.	
 
 	•	 	Expose scoring service via APIs.	
General Features – Intelligent Seating
 
 	•	 	Seat assignment by multiple factors, such as seat groups, togetherness, priority, seat sets, and uniform allocation.	
 
 	•	 	Search for, view, and reserve seats with specific properties.	
 
 	•	 	Mouse over seats to view seat properties.	
 
 	•	 	Search for forward-facing seats.	
 
 	•	 	Store seat preferences on the booking for reseating, including cancel-rebook.	
 
 	•	 	Manage access to seat properties by role.	
 
 	•	 	Create custom images for physical seat maps in all booking channels.	
 
 	•	 	Vector-based seat maps.	
 
 	•	 	Automatically re-assign seats during reaccommodation, IROP, and equipment swap.	
 
 	•	 	Manage seat fulfillment with automated queues.	
 
 	•	 	Track seat satisfaction and seating behavior with standard reports.	
Advanced Features – Intelligent Seating
 
 	•	 	Seat assignment by additional factors, such as customer recognition value, origin/destination, zone, weight-balance, and segment optimization.	
 
 	•	 	Create custom seat properties, including various options for search and seat assignment behavior.	
 
 	•	 	Restrict seats based on SSR.	
 
 	•	 	Use marketing configurations for flexible physical inventory and seat properties.	
 
 	•	 	Automated moveable class curtain.	
 
 	•	 	Modify physical inventory and seat properties daily according to travel segment or market.	
 
 	•	 	Run on-demand reseating in AU Grid, SkySchedule and at the airport/station via GoNow.	
 
 	•	 	Automatically seat passengers before departure, including batch processing.	
 
 	•	 	Test and preview ad hoc reseating results.	
 
 	•	 	View reseating progress in a Batch Job Viewer.	
 
 	•	 	Configure seat assignment satisfaction threshold for passengers.	
 
 	•	 	Track seat satisfaction at the travel segment level and booking/passenger level.	
 
 	•	 	Manage seat fulfillment via automated reseating queue events.	
Limitations and Exclusions
 
 	•	 	Interface is “as is” in SkySpeed.	
 
 	•	 	There is no interface in SkyPort.	
 
 	•	 	Functionality does not include SkySales customization.	
 
 	•	 	Functionality is not supported in GDS or similar external channels - this is not an industry-based product.	
Booking History Files
General Features – Booking History Files
 
 	•	 	Capture and store booking activity files from the Hosted Reservation Services to be used as input for a Revenue Management System.	
 
 	•	 	Customer is responsible for formatting booking history files to be compatible with a third party Revenue Management System.	
 
 	•	 	NAVITAIRE will provide the layout of the booking history file to Customer’s third party Revenue Management System services provider upon request.	
Note: If Customer is not currently using a Revenue Management System, NAVITAIRE will store the booking history files until such time Customer determines they wish to use a Revenue Management System.
API Suites
General Features – Booking and Voucher API Suite
 
 	•	 	Obtain inventory and fare availability for travel segments (flight, train, bus, ferry, etc.) in a market.	
 
 	•	 	Obtain inventory and fare availability for a whole itinerary.	
 
 	•	 	Price an itinerary including all fares and taxes.	
 
 	•	 	Display fare rule content.	
 
 	•	 	Create or cancel bookings for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Obtain SSR availability for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Book or cancel specified SSR(s).	
 
 	•	 	Retrieve a booking by record locator.	
 
 	•	 	Provide a list of names.	
 
 	•	 	Display seat maps for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Assign or unassign seats on specified travel segments (flight, train, bus, ferry, etc.) for one or more passengers.	
 
 	•	 	Accept schedule changes made to segments in a booking.	
 
Exhibit A - 45

Hosted Services Agreement
 
 	•	 	Retrieve bookings by specified search criteria including 3rd party record locators.	
 
 	•	 	Display booking history and payment information.	
 
 	•	 	Retrieve stored baggage information by record locator.	
 
 	•	 	Add, commit, and retrieve accounts and account transactions.	
 
 	•	 	Manage queues, including add, update, and delete from a booking queue.	
 
 	•	 	Search by lowest fare in a market for a number of days out. (Premium service in which additional Fees apply.)	
 
 	•	 	Booking APIs can be used to develop and provide booking applications available on mobile devices.	
 
 	•	 	Third-party vendor capabilities to create, void, and reinstate vouchers.	
General Features – Check-in API Suite
 
 	•	 	Interact with third-party vendors, including kiosk check-in service providers.	
 
 	•	 	Retrieve manifest or travel segment information.	
 
 	•	 	Display seat maps.	
 
 	•	 	Request or change seat assignments for specified passengers at time of check-in.	
 
 	•	 	Confirm check-in status for specified passengers and generate boarding passes.	
 
 	•	 	Generate baggage tags for specified passengers.	
 
 	•	 	Reprint boarding passes for checked-in passengers.	
 
 	•	 	Security control for check-in of selected passengers.	
 
 	•	 	Generate Advance Passenger Information System (APIS) messages. (Premium service in which additional Fees apply.)	
 
 	•	 	Check-In APIs can be used to develop and provide check-in services on mobile devices.	
General Features – Weight and Balance API Suite
The Weight and Balance API supports data transfer between the Hosted Reservation Services and a third-party weight-and-balance application, as follows:
 
 	•	 	Schedule and Operational event data are sent to a dedicated travel queue so flight data and status can be retrieved via the API and used by a third-party weight-and-balance application.	
 
 	•	 	The Webservice API method allows third parties to:	
 
 	•	 	Retrieve flight details and flight event details; and	
 
 	•	 	Retrieve summarized sales and check-in data.	
 
 	•	 	The summarized passenger, passenger seat zone, baggage counts, and check-in status, can be requested at any time during the selling period through the post departure period.	
Limitations and Exclusions
 
 	•	 	Summarized travel component information is provided at the leg level. Information is not provided at the thru or connecting Segment level.	
 
 	•	 	Technical support or development needed to integrate with a third-party application is the responsibility of Customer.	
 
 	•	 	Use of data to calculate and produce final weight-and-balance load instructions or compliance reports is Customer’s responsibility.	
Negotiated Allotment (NegoAllotment)
General Features – Negotiated Allotment (NegoAllotment)
 
 	•	 	Search and view existing negotiated allotment contract details.	
 
 	•	 	Create, update, and release allotment space.	
 
 	•	 	Configure price per seat and fare rule options.	
 
 	•	 	Restrict sales of allotment inventory to specified distributors.	
 
 	•	 	Support for all standard reservation functions on allotment bookings.	
 
 	•	 	Protect and re-accommodate allotment passengers and space.	
 
 	•	 	User interface to administer contracts.	
 
 	•	 	Support for integration with a contract management system and processing of name lists through the Allotment API, which includes the following:	
 
 	•	 	Search and view existing negotiated allotment contract details.	
 
 	•	 	Create, update, and release allotment space.	
 
 	•	 	Configure price per seat and fare rule options.	
 
 	•	 	Add, commit, and retrieve accounts and account transactions.	
 
 	•	 	Access to the Negotiated Allotment (NegoAllotment) functionality.	
 
 	•	 	Support for tour operator fares using negotiated fares.	
Limitations and Exclusions
 
 	•	 	Booking of blocked space via SkySales and GDS booking channels are not supported.	
 
 	•	 	Requires Allotment API Suite add-on functionality.	
 
 	•	 	Name lists are not supported; this is handled via the Booking API.	
Hosted Web Check-in
General Features – Hosted Web Check-in
 
 	•	 	Retrieve passenger and travel component information by information such as credit card, record locator, travel component/passenger name, and customer number.	
 
Exhibit A - 46

Hosted Services Agreement
 
 	•	 	Display seat maps.	
 
 	•	 	Request or change seat assignments for specified passengers.	
 
 	•	 	Confirm check-in status for specified passengers.	
 
 	•	 	Generate boarding passes.	
3-D Secure Programs
General Features – 3-D Secure Programs
 
 	•	 	Support for Verified by Visa and MasterCard Secure Code (3-D Secure Programs), which are optional programs, available at additional cost, for Customer to participate in with their acquiring banks and/or payment service provider. Functionality is fully dependent upon the acquiring bank and/or payment service provider.	
 
 	•	 	Ability to send passenger credit card detail to Cardinal Commerce.	
 
 	•	 	Ability to receive 3-D Secure response from Cardinal Commerce.	
 
 	•	 	Ability to continue processing for transaction within New Skies based upon response from Cardinal Commerce, either continue to authorization or decline transaction.	
 
 	•	 	Ability to pass response from Cardinal Commerce to authorization and/or settlement file.	
 
 	•	 	A timeout with Cardinal Commerce, length as configured in SkyPay, will bypass 3-D Secure and continue with authorization.	
Limitations and Exclusions
 
 	•	 	NAVITAIRE’s responsibility is limited to sending the data to Cardinal Commerce and continuing processing within New Skies based upon the response from Cardinal Commerce.	
 
 	•	 	NAVITAIRE has no responsibility as to the evaluation of the credit card 3-D Secure status.	
 
 	•	 	NAVITAIRE has no responsibility as to the security of the credit card data once that data is passed to Cardinal Commerce.	
 
 	•	 	Agreement on the 3-D Secure scope, processing, functionality and any applicable Cardinal Commerce costs are the responsibility of Customer and are subject to separate agreement between Cardinal Commerce and Customer, to the exclusion of NAVITAIRE.	
Dynamic Currency Conversion (DCC)
General Features – Dynamic Currency Conversion (DCC)
 
 	•	 	Allows the cardholder to connect to a third-party vendor, who facilitates payment for an international transaction in their local currency. The Foreign Currency Exchange Provider works with acquiring banks to offer multiple currencies, which are then made available to Customer and cardholder.	
 
 	•	 	Sends a call to the core New Skies system to check if DCC is available for the card being entered and returns the result to SkySales without leaving the payment page.	
 
 	•	 	Supports:	
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval.	
 
 	•	 	Reporting to identify and track DCC acceptance.	
 
 	•	 	Payment reporting details transactions and currencies.	
Limitations and Exclusions
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval requires separate commercial agreement directly with an approved vendor.	
 
 	•	 	Currency Conversion is only available on Visa and MasterCard credit card transactions.	
 
 	•	 	NAVITAIRE cannot guarantee the validity of the rates provided by any Foreign Currency Exchange Provider.	
Multi-Currency Conversion (MCC)
General Features – Multi-Currency Conversion (MCC)
 
 	•	 	To be provided	
Limitations and Exclusions
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval requires separate commercial agreement directly with RBS for their “FX Micropay” product.	
 
 	•	 	Available for SkySales bookings only.	
 
 	•	 	Acquiring Bank must provide multi-currency merchant account.	
 
 	•	 	NAVITAIRE cannot guarantee the validity of the rates provided by any Foreign Currency Exchange Provider.	
Data Store Products
General Features – Data Store
 
 	•	 	The Data Store (DS) offers customers read only access to ***** of data in the Operational Data Store (ODS) and Data Warehouse (DW) for custom reporting needs.	
 
 	•	 	Customers cannot create custom objects in or modify the ODS or DW data.	
 
Exhibit A - 47

Hosted Services Agreement
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Data Store:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****	
 
 	•	 	Transactional Data Integrity where the data committed to the New Skies database are replicated to the DS.	
 
 	•	 	Supports ***** user logins.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the Data Store architecture, replication, and support processes.	
Note: Due to the detailed transactional nature of the data store database, this product supports custom reports but is not suited for large, time consuming queries (e.g., table scans to summarize large time frames of detailed data) or data Extraction, Transformation, and Loading (ETL) purposes. If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Data Store that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Data Store are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Data Store will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Data Store
The Data Store is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Data Store. Service level measurements and/or penalties do not apply for replication delays.
General Features – Data Store Workbench
 
 	•	 	The Data Store Workbench (DSW) offers customers read only access to the Operational Data Store (ODS) and Data Warehouse (DW) data, as well as read/write access to the Data Store Workbench (DSW) database, for custom reporting, extraction, transformation, and loading.	
 
 	•	 	Customers can create and store custom objects in the DSW database, located on the same physical server as the ODS and DW, but cannot create custom objects in or modify the ODS or DW data.	
 
 	•	 	The DSW database size is capped *****	
 
 	•	 	Database user privileges are limited to DDL_ADMIN.	
 
 	•	 	NAVITAIRE IT staff provides basic database administration services for the DSW database which include standard data backup and recovery support.	
 
 	•	 	Job scheduling is not permitted on the DSW database server. If implemented, customers will host scheduling services on their servers at their location (e.g., SQL Server Integration Services packages).	
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Data Store Workbench:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****	
 
 	•	 	Transactional Data Integrity where the data committed to the New Skies database are replicated to the DS.	
 
 	•	 	Supports ten (10) standard user logins and ***** user login.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the data store architecture, replication, and support processes.	
Note: This product is designed for light custom reporting and moving reservations data to another database, data warehouse, or other system outside of the New Skies environment for processing. Due to the detailed transactional nature of the data store database, this product does not support heavy data processing tasks. If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Data Store Workbench that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Data Store Workbench are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Data Store Workbench will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Data Store Workbench
The Data Store Workbench is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Data Store Workbench. Service level measurements and/or penalties do not apply for replication delays.
General Features – Enhanced Data Store
 
 	•	 	The Enhanced Data Store (EDS) offers customers the same features as the Data Store Workbench (DSW) and provides greater reporting flexibility to separate critical standard reporting from heavy, ad-hoc reporting. The Enhanced Data Store (EDS) provides an additional copy of the Operational Data Store (ODS) and is designed to support special reporting and ETL, read-only needs.	
 
Exhibit A - 48

Hosted Services Agreement
 
 	•	 	Customers can create and store custom objects in the DSW database, located on the same physical server as the ODS and DW, but cannot create customer objects in or modify the EDS data.	
 
 	•	 	The primary distinction between the EDS and DSW products is that the EDS is designed to provide significantly more processing power by offloading the ETL, custom reporting, and custom queries to dedicated hardware.	
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Enhanced Data Store:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****Transactional Data Integrity where the data committed to the New Skies database are replicated to both the DS and EDS.	
 
 	•	 	Supports ten (10) standard user logins and ***** user login.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the data store architecture, replication, and support processes.	
Note: If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Enhanced Data Store that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Enhanced Data Store are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Enhanced Data Store will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Enhanced Data Store
The Enhanced Data Store is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Enhanced Data Store. Service level measurements and/or penalties do not apply for replication delays.
Extended PNR Archiving
General Features – Extended PNR Archiving
 
 	•	 	General Features, Limitations, and Exclusions of PNR Archiving are applicable for the Extended PNR Archiving.	
 
 	•	 	Retains PNR data in the Extended PNR Archive as long as specified in Exhibit K of the Agreement.	
Note: If Extended PNR Archiving is not selected by Customer, PNR data will be removed from the production system ***** after the last flight segment in a PNR has been marked as flown or no-show.
Ticket Services and Sales Data Interchange (TCN File)
General Features – Ticket Services and Sales Data Interchange (TCN File)
 
 	•	 	User interface to update ticket ranges in use, including MCOs, MPDs and Refunds.	
 
 	•	 	Assigns a document number to each booking.	
 
 	•	 	Converts all ticketless booking data into ticketed type records.	
 
 	•	 	Daily file of sales, exchanges, refunds, lifts and no-shows.	
 
 	•	 	File format conforms to NAVITAIRE TCN specification.	
Note: Customer must obtain a range of ticket numbers which can be used in this New Skies module specifically for reporting New Skies data to a third-party passenger revenue accounting system.
Low Fare Finder
General Features – Low Fare Finder
 
 	•	 	Ability to search for the lowest fares within a specified time frame (up to a ***** period on either side of a target date and in a user-specific market).	
 
 	•	 	Search results display the lowest fares in a calendar format within the specific time frame.	
 
 	•	 	Ability to allow passenger to view promotional fares without forcing passenger to conduct a search.	
 
 	•	 	Ability to allow passenger to view all available flights over a range of dates, rather than limiting search to a single departure date and arrival date.	
Limitations and Exclusions
 
 	•	 	Service Level targets and/or penalty/rebate calculations do not apply for this product or for any Service Level issues caused by this product.	
 
 	•	 	Tests have been performed on the functionality to confirm basic operating requirements, but in the event that the Low Fare Finder functionality is determined to have impact on other functions, NAVITAIRE reserves the right to temporarily disable functionality.	

Exhibit A - 49

Hosted Services Agreement
 
All-Inclusive Pricing
General Features – All-Inclusive Pricing
 
 	•	 	Provides Customer with the ability to build base fares and then configure the system to display the all-inclusive price in SkySpeed, SkySales, and SkyPort.	
 
 	•	 	Provides Customer with the ability to implement a flexible solution, disclosing unavoidable costs associated with the booking at the time of sale, only when specifically configured to do so.	
 
 	•	 	Ability to configure by market and by specific user role (“All Markets” setting is available).	
 
 	•	 	Displays a combined base fare plus all applicable taxes and travel fees for the passenger.	
Limitations and Exclusions – All-Inclusive Pricing
 
 	•	 	The system will only apply taxes and additional travel fees as set up by Customer.	
 
 	•	 	Does not communicate an all-inclusive price to CRS/GDS/ARS booking channels.	
Disaster Recovery Services
General Features – Disaster Recovery Services
Disaster Recovery Services will provide a backup location for the Hosted Reservation Services Base Functionality. If Disaster Recovery Services are not selected in Section 2 of Exhibit A, no backup environment will exist for Customer at a site geographically independent from the primary data center. Customer understands that there is an inherent risk to declining Disaster Recovery Services. Customer has chosen to DECLINE Disaster Recovery Services.
FTP Connectivity for Operational Messages
General Features – FTP Connectivity for Operational Messages – Outbound Messaging
 
 	•	 	Deliver outbound messages to a single IP address, as an alternate to Type B/Teletype delivery.	
 
 	•	 	Outbound messages adhere to the same formats and data structures outlined in the New Skies GDS Reference Guide.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	ADL - Additions and Deletions List	
 
 	•	 	BSM - Baggage Service Message	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	NAM - Lid/Sold custom message	
 
 	•	 	PIS - Advanced Passenger Information System	
 
 	•	 	PNL - Passenger Name List	
 
 	•	 	PXA - Actual Passenger ‘checked-in’ counts	
 
 	•	 	PXB - Actual Passenger ‘booked’ counts	
General Features – FTP Connectivity for Operational Messages – Inbound Messaging
 
 	•	 	Receive inbound messages to an established FTP account as an alternative to Type B/Teletype.	
 
 	•	 	Process inbound messages from the FTP account, consistent with processing messages received via Type B/Teletype connectivity.	
 
 	•	 	Inbound messages adhere to the same formats and data structures outlined in the New Skies GDS Reference Guide.	
 
 	•	 	Support for the following inbound message types:	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	OPS - Weather/Flight-Release file	
 
 	•	 	PFS - Passenger Final Status	
 
 	•	 	PXA - Actual Passenger “checked-in” counts	
 
 	•	 	PXB - Actual Passenger “booked” counts	
Limitations and Restrictions
 
 	•	 	The FTP message transport service is not guaranteed like Type B/Teletype delivery. If there is a failure during message transmission, data may be lost. However, the circuits and servers supporting this feature in the ESC environment are stable and do not normally experience issues.	
 
 	•	 	Messages delivered via FTP connectivity are transmitted over a private connection to Customer’s FTP server. They are not transmitted over the internet due to security concerns and/or industry compliance standards.	
 
 	•	 	Customer is responsible for forwarding Outbound FTP messages from their FTP server to the final destination, when required. NAVITAIRE does not transmit FTP messages directly to the final destination.	
FTP Connectivity for XML Itineraries
General Features – FTP Connectivity for XML Itineraries
 
 	•	 	Deliver outbound messages to a single IP address.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	XML Itineraries	
Limitations and Restrictions
 
 	•	 	The FTP message transport service is not guaranteed like Type B/Teletype delivery. If there is a failure during message transmission, data may be lost; however, the notification infrastructure supporting this feature is stable and does not normally experience issues.	
 
Exhibit A - 50

Hosted Services Agreement
 
 	•	 	Messages delivered via FTP connectivity are transmitted over a private connection to Customer’s FTP server. They are not transmitted over the internet due to security concerns and/or industry compliance standards.	
 
 	•	 	Customer is responsible for forwarding Outbound FTP messages from their FTP server to the final destination, when required. NAVITAIRE does not transmit FTP messages directly to the final destination.	
 
 	•	 	For itinerary transmission via notification services, the transmission is done in the clear-text and no sensitive data should be included. Customer should “mask” the data.	
Type B/Teletype Connectivity for Operational Messages
General Features – Type B/Teletype Connectivity for Operational Messages
Outbound Messaging
 
 	•	 	Deliver outbound messages to Type B/Teletype addresses.	
 
 	•	 	Outbound messages adhere to the same formats and data structures outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	ADL - Additions and Deletions List	
 
 	•	 	BSM - Baggage Service Message	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	NAM - Lid/Sold custom message	
 
 	•	 	PNL - Passenger Name List	
 
 	•	 	PXA - Actual Passenger ‘checked-in’ counts	
 
 	•	 	PXB - Actual Passenger ‘booked’ counts	
 
 	•	 	PAL - Passenger Assistance List	
 
 	•	 	CAL - Change Assistance List	
 
 	•	 	Support for the following for PAL/CAL messages:	
 
 	•	 	Meets requirements identified in IATA Document 1708a, Any Passenger Assistance List (PAL) and Change Assistance List (CAL) messages will be forwarded via Type-B Messaging.	
 
 	•	 	A PAL list will be generated one time for each designated flight.	
 
 	•	 	A CAL list will be generated only if there are changes since the delivery of the flight’s initial PAL list. Multiple CAL lists may be generated, if necessary, due to subsequent changes to passenger information and their reduced mobility qualification status (add, change, delete).	
 
 	•	 	PAL and CAL lists are automatically generated and contain the following information:	
 
 	•	 	Flight Information	
 
 	•	 	Passenger name	
 
 	•	 	SSR code (BNLD, DEAF, DPNA, MAAS, WCHC, WCHR, WCHS)	
 
 	•	 	Flight Details	
 
 	•	 	One inbound connection	
 
 	•	 	One outbound connection	
 
 	•	 	If a designated flight has no PRMs on board, a PAL and/or CAL list is still generated. In such cases, a NIL value is provided.	
Inbound Messaging
 
 	•	 	Receive inbound messages to a Type B/Teletype address.	
 
 	•	 	Process inbound messages received via Type B/Teletype connectivity.	
 
 	•	 	Inbound messages adhere to the same formats and data structures outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
 	•	 	Support for the following inbound message types:	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	OPS - Weather/Flight-Release file	
 
 	•	 	PFS - Passenger Final Status	
 
 	•	 	PXA - Actual Passenger “checked-in” counts	
 
 	•	 	PXB - Actual Passenger “booked” counts	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Type B/Teletype Connectivity for AVS Messages
General Features – Type B/Teletype Connectivity for AVS Messages
 
 	•	 	Deliver Type B/Teletype Availability Status (AVS) Messages either automatically or manually to selected partner.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
MQSeries Connectivity for Operational Messages
General Features – MQSeries Connectivity for Operational Messages
 
 	•	 	Receive inbound messages and deliver outbound to the final destination as an alternate to Type-B/Teletype delivery	
 
 	•	 	Provides for improved support from the NAVITAIRE operations and support teams.	
 
 	•	 	Provides a higher degree of reliability when compared to FTP type messaging and has built error handling, correction, and retry logic.	
 
 	•	 	Provide for Type B/Teletype guaranteed delivery.	
 
 	•	 	Support for receipt of any message or data with a Type B/Teletype header over the MQ links.	
 
 	•	 	Outbound messages adhere to the same formats and data structures as outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
Exhibit A - 51

Hosted Services Agreement
 
Limitations and Restrictions
 
 	•	 	Available only for hosted Customers that have their own MQ Server.	
 
 	•	 	NAVITAIRE will transmit via MQ series directly to the final destination.	
 
 	•	 	Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)	
Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)
General Features – Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)
 
 	•	 	Receive and send the following SSM sub-messages: NEW, TIM, REV, EQT, FLT, ADM, RPL, SKD, CNL	
 
 	•	 	Receive and sent the following ASM sub-messages: NEW, TIM, RRT, EQT, CON, FLT, ADM, RPL, CNL	
 
 	•	 	Update individual flight lines via SSM as opposed to the now standard SSIM process.	
 
 	•	 	Update individual flight dates via ASM (operational changes).	
 
 	•	 	Target individual partners on a message / sub-message basis with outbound SSM’s and ASM’s.	
 
 	•	 	Setup an email distribution list that is contacted when an SSM results in the creation of a reaccommodation batch.	
 
 	•	 	Process TTY queue entries for rejected messages that failed to process within New Skies.	
 
 	•	 	Messages are delivered by either Type B/Teletype or FTP.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Limitations and Exclusions
 
 	•	 	SSM’s not currently supported: ACK, NAC, REV, RSO	
 
 	•	 	ASM’s not currently supported: RIN, ACK, NAC	
Note: Ad-hoc Schedule Messages (ASM) are only supported on New Skies release 3.4.5 or higher
Advanced Passenger Information System (APIS)
General Features – Advanced Passenger Information System (APIS)
 
 	•	 	Collect via travel document information from various sources during the booking process and at check-in. (Some restrictions apply based on government requirements.)	
 
 	•	 	APIS is supported in the following products:	
 
 	•	 	Call center applications (SkySpeed)	
 
 	•	 	Airport (SkyPort) via passport scanner or manual input	
 
 	•	 	API (booking and check-in)	
 
 	•	 	GDS	
 
 	•	 	Codeshare	
 
 	•	 	System supports document verification processes during check-in and passenger boarding (as required).	
 
 	•	 	APIS data is transmitted via SITA/ARINC in UN-EDIFACT/PAXLST format with the following information:	
 
 	•	 	Flight	
 
 	•	 	Passenger	
 
 	•	 	Travel Documents (mandatory and optional)	
 
 	•	 	Functionality is available in ***** and higher.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
APIS Quick Query (AQQ)
General Features – APIS Quick Query (AQQ)
 
 	•	 	Request real-time automated screening and processing of passenger data prior to printing a boarding pass.	
 
 	•	 	Process can be invoked via:	
 
 	•	 	Web Check-In	
 
 	•	 	Airport Counter Check-In	
 
 	•	 	Kiosk Check-in	
 
 	•	 	Boarding Process	
 
 	•	 	Includes integration with SkySpeed, SkySales, New Skies Reports, and core New Skies processing.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Electronic Borders (E-Borders)
General Features – Electronic Borders (E-Borders)
 
 	•	 	Generate a Passenger Check-in message in UN-EDIFACT/PAXLST format for all checked in passengers, or checked in and boarded passengers, with verified documents.	
 
 	•	 	Determine transmission time of the Passenger Check-in message based on airline preference.	
 
 	•	 	Generate a Passenger Departure message in UN-EDIFACT/PAXLST format for all checked in and boarded passengers at flight close.	
 
Exhibit A - 52

Hosted Services Agreement
 
Limitations and Exclusions
 
 	•	 	Airline should verify the document status during the check-in period and after boarding to confirm all passengers have verified documents.	
Customs and Border Protection (CBP) PNR Push
General Features – Customs and Border Protection (CBP) PNR Push
 
 	•	 	Push PNR data to US Customs and Border Protection for reservations where one or more Segments are for travel inbound to or outbound from the United States.	
 
 	•	 	PNR data push will be performed upon completion of initial booking, modification to booking, and flight close.	
 
 	•	 	Data will be provided in plain text form.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Inter Airline Through Check-in (IATCI)
General Features – Inter Airline Through Check-in (IATCI)
 
 	•	 	Generate through check-in messages to another airline’s departure control system.	
 
 	•	 	Generate through check-in update messages to another airline’s departure control system.	
 
 	•	 	Generate through check-in cancel messages to another airline’s departure control system.	
 
 	•	 	Print boarding passes with seat assignments for flights operated by another airline.	
 
 	•	 	Exchange baggage details and APIS information via through check-in messages.	
 
 	•	 	Check in host carrier passengers when through check-in queries are received.	
 
 	•	 	Update host carrier passenger data when through check-in update messages are received.	
 
 	•	 	“Uncheck” host carrier passengers when through check-in cancel messages are received.	
 
 	•	 	Respond to boarding pass reprint queries received from another airline.	
 
 	•	 	Support IATA EDIFACT version 03:1 for through check-in messages.	
Secure Flight
General Features – Secure Flight
 
 	•	 	Collect Secure Flight Passenger Data (SFPD) through all booking channels and during the check-in process.	
 
 	•	 	Create and transmit SFPD UN-E DIFACT messages to the United States Department of Homeland Security (US-DHS) message router for passengers.	
 
 	•	 	Collect Gate Pass Holder information with subsequent creation and transmission of SFPD Gate Pass UN-EDIFACT messages to US-DHS message router prior to issuance of gate passes via SkyPort. The gate pass is a document issued to non-travelers, allowing them entry though airport security to a sterile area normally reserved for passengers.	
 
 	•	 	Process US-DHS response messages by assigning boarding pass printing results and Electronic System for Travel Authorization (ESTA) status to the passenger.	
 
 	•	 	Process US-DHS unsolicited messages by creating and transmitting acknowledgement messages to the US-DHS router.	
 
 	•	 	Evaluate the Boarding Pass Printing Result and ESTA status during the check-in and boarding process.	
 
 	•	 	Display the Boarding Pass Printing Result and ESTA status in SkyPort.	
 
 	•	 	Perform batch and interactive transmission of SFPD messages during the Secure Flight transmission window (the 72 hours prior to departure).	
 
 	•	 	Collect, store, and include Passenger Redress Number in SFPD messages.	
 
 	•	 	Collect, store, and include Known Traveler Number in SFPD messages.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Limitations and Exclusions
 
 	•	 	Transmission of crew data is not supported.	
 
 	•	 	Domestic to domestic international flights for United States carriers (e.g. ORY to NCE).	
 
 	•	 	Receive Passenger Redress number and Known Traveler number is not currently available via IATCI messaging.	
 
 	•	 	Additional industry or IATA requirements not specifically included above.	
Travel Commerce Services
General Features – Travel Commerce Services
 
 	•	 	Search for and book ancillary components in SkySales or SkySpeed as part of the travel booking process and store the component within the Super PNR.	
 
 	•	 	Search for and book ancillary components in SkySales or SkySpeed without travel components and store the component(s) within the Super PNR.	
 
Exhibit A - 53

Hosted Services Agreement
 
 	•	 	View the Travel Commerce components in an existing PNR, including Supplier confirmation number and other relevant booking details.	
 
 	•	 	Add an ancillary component to an existing booking through SkySales or SkySpeed.	
 
 	•	 	Cancel an ancillary component booking from SkySpeed or SkySales.	
 
 	•	 	Locally host inventory for insurance.	
 
 	•	 	Configure product availability by supplier and location.	
 
 	•	 	Include ancillary components in the traveler’s itinerary email notification.	
 
 	•	 	Configure markups within a component’s pricing for locally hosted components.	
 
 	•	 	Store supplier confirmation numbers within the Super PNR.	
 
 	•	 	Add a markup by supplier.	
 
 	•	 	Specify cancellation fees by supplier.	
 
 	•	 	Aggregate available products from multiple Suppliers in a single search result.	
 
 	•	 	Manage product inventory as a retail item, free-sell, or inventory by day (i.e., block space).	
 
 	•	 	Query multiple sub-locations within a parent location during a single product search.	
Supplier Connectivity
 
 	•	 	Support for direct interfaces to Content Providers via XML API connections. List of available connections is subject to change and will evolve with each product release.	
 
 	•	 	Additional connections can be requested through the enhancement process or via a NAVITAIRE work order.	
Standard Reports (Travel Commerce specific)
Reports are viewed on-line via a browser interface.
 
 	•	 	The following standard reports related to Travel Commerce functionality are available:	
 
 	•	 	Ancillary Services Summary - Summary of revenue by provider.	
 
 	•	 	Ancillary Services Detail - Transaction level report.	
 
 	•	 	Insurance Report - Details by transaction on each policy sold/canceled.	
 
 	•	 	Car Rental Report - Details by transaction on each car rental booking or cancellation	
Note: Reports may be added to, deleted, modified, changed, eliminated, or substituted at the discretion of NAVITAIRE at any time.
Loyalty Services
General Features – Loyalty Services
 
 	•	 	Ability to set up the parameters of Customer’s Frequent Traveler Program.	
 
 	•	 	Ability to upgrade or downgrade a member account.	
 
 	•	 	Ability to track customer travel by points/miles/credits for flown segments.	
 
 	•	 	Ability to look up and adjust members’ accounts.	
 
 	•	 	Built-in rules engine for configuring awards and promotions. Each rule has an effective and discontinue date, and includes the ability to define award rules using numerous criteria:	
 
 	•	 	Ability to test rules in the Rules Engine.	
 
 	•	 	Supports two options for computing points:	
 
 	•	 	Fixed amount (e.g. 1 point for every segment flown); and	
 
 	•	 	Percentage amount (e.g. 10% of the fare as points, or 50% of the mileage).	
 
 	•	 	Supports accrual of qualifying (elite) points/ mileage/ credits while accruing redeemable points.	
 
 	•	 	Supports multi-level programs such as silver/gold/platinum.	
 
 	•	 	Supports automatic upgrades and downgrades to/from a higher status level.	
 
 	•	 	Supports expiration of points after a specified time period.	
 
 	•	 	Customizable on-line account statement.	
 
 	•	 	Service desk UI for adding missing flight credits, customer service adjustments, researching activity, etc.	
 
 	•	 	Support for call center redemptions.	
 
 	•	 	Support for points fares published in SkyFare.	
 
 	•	 	Support for third-party accruals via batch file of API, including accrual rules engine with different criteria for each partner type.	
 
 	•	 	Support for retro credit for past flight requests through the call center.	
 
 	•	 	Supports reverse redemption with the ability to maintain and observe original expiration dates.	
 
 	•	 	Supports an Error Log with a descriptive reason included in the detail. Ability to sort by field names.	
 
 	•	 	Reports:	
 
 	•	 	Flight Redemption Activity - detail report of host flight redemptions;	
 
 	•	 	Redemption Activity - report of redemptions by third-party partners;	
 
 	•	 	Host Accrual Activity Summary - summary of all accrual activity;	
 
 	•	 	Partner Accrual Activity Summary - summary of all accrual activity, which can be filtered by partner;	
 
 	•	 	Loyalty Program Member Accrual - report with accrual details by program member;	
 
 	•	 	Outstanding Award point balance for use in accounting to track outstanding liability;	
 
 	•	 	Adjustment report - report of manual adjustments made to customer accounts; and	
 
 	•	 	Recognition Level Log and Summary Reports- includes manual an automatic upgrade details.	
 
 	•	 	Ability for members to register on-line and manage on-line profile.	
Loyalty Services – New Skies interfaces
 
 	•	 	Real-time interface for boarded passengers for posting points at time of boarding of flight close.	
 
 	•	 	Integration for market distances and customer levels.	
 
 	•	 	Integration of member account statement into SkySpeed 360 degree passenger profile view.	
 
Exhibit A - 54

Hosted Services Agreement
 
7	Customer Hardware, Software, Connectivity and Network Requirements	
 
 	7.1	Upgrades. Customer is required to maintain the latest version ***** of supported NAVITAIRE and ***** related third party software as directed by the NAVITAIRE Support Center, *****. Upon receipt of upgraded software, newer versions of software, or notification of third party software updates, Customer must update their software versions within *****. Failure to complete the advised upgrades may result, at NAVITAIRE’s option, in the suspension of Included Support as described in this Exhibit A, Section 5.	
 
 	7.2	Equipment Specifications. These equipment specifications outline the required, supported hardware and software necessary for the proper function and efficient operation of the Hosted Reservation Services and applicable products. Unless otherwise specified in this Agreement, the equipment and software listed below are the responsibility of Customer. This list may not be all-inclusive, depending on the technical requirements of Customer.	
All specifications are subject to change. Customer will be provided with not less than thirty (30) days’ notice of incremental hardware upgrade requirements.
Call Center PC/Workstation (for SkySpeed)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 1 GHz). This includes Pentium 4 and M class machines.	
 
 	•	 	Disk space: Minimum of 10 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Microsoft Windows version currently supported via standard Microsoft support. Customer must upgrade workstations to the .NET 3.5 SP1 release if running clients such as SkySpeed on New Skies release 3.2 or higher. This is a free downloadable upgrade available from Microsoft.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 256 Megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: PS/2 Mouse or other Microsoft Compatible Pointing Device.	
Airport Check-in PC/Workstation (for Skyport)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 500 MHz). This includes Pentium II, and Pentium III class.	
 
 	•	 	Disk space: Minimum of 4 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Airport Check-in software runs with the terminal emulation software listed below and Microsoft Windows XP or Windows 7 if running NAVITAIRE’s NAVTE.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 128 megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: Mouse or other Microsoft Compatible Pointing Device.	
 
 	•	 	Terminal emulation software: NAVITAIRE Terminal Emulator per client workstation.	
 
 	•	 	Serial ports: Minimum of two required.	
Airport PC/Workstation (for GoNow – Agent UI)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 1 GHz). This includes Pentium 4 and M class machines.	
 
 	•	 	Disk space: Minimum of 10 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Microsoft Windows version currently supported via standard Microsoft support. Customer must upgrade workstations to the .NET 3.5 SP1 release if running clients such as GoNow on New Skies release 3.2 or higher. This is a free downloadable upgrade available from Microsoft.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 256 Megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: PS/2 Mouse or other Microsoft Compatible Pointing Device.	
 
Exhibit A - 55

Hosted Services Agreement
 
Airport Peripheral Equipment
Bag Tag Printers
 
 	•	 	IER or VidTroniX bag tag printers with TCP/IP, Serial, or Parallel connections.	
 
 	•	 	Specific models compatible with NAVITAIRE Hosted Services systems available upon request.	
 
 	•	 	The manufacturer of the printer may supply additional bag tag stock information and specification.	
 
 	•	 	Epson L90 bag tag printer with USB connection.	
 
 	•	 	Characteristics controlled by the software driver.	
 
 	•	 	Uses small rolls of paper.	
 
 	•	 	ARINC/SITA Common Use Environments.	
Boarding Pass Printers
 
 	•	 	Epson TMT-88 or TMT-90 thermal receipt printers. Specifications for thermal roll stock are available from the printer manufacturer.	
 
 	•	 	ARINC/SITA Common Use Environments.	
New Skies Reports
The supported browsers for New Skies Reports are Microsoft browser versions currently supported via standard Microsoft support and Internet Explorer 8 working in IE7 compatibility mode.
Print Server
 
 	•	 	Hardware Requirements	
Equipment must be found on the Microsoft HCL ( http://www.microsoft.com/whdc/hcl/default.mspx )
 
 	•	 	Single/Dual Processor Intel Pentium XEON Class server	
 
 	•	 	2 GB RAM	
 
 	•	 	72GB of available hard disk space	
 
 	•	 	100MB Ethernet Adapter	
 
 	•	 	Software Requirements	
 
 	•	 	Microsoft Windows Server 2008	
 
 	•	 	Microsoft Printing Services (installed from Windows Operating System CD)	
 
 	•	 	Supported Windows Server 2003 Print drivers for all print devices (See print device details below)	
 
 	•	 	Technical documentation for setting up Printing for Windows Server 2003	
http://www.microsoft.com/technet/prodtechnol/windowsserver2003/library/ServerHelp/f119ea8c-834e-4dd0-9744-6c7cc879ddba.mspx
 
 	•	 	Print Device Requirements	
 
 	•	 	Ethernet/IP (LPR/LPD) enabled printers	
 
 	•	 	PCL 5 compliant / HP LaserJet 2100 (driver supported/PCL5)	
 
 	•	 	Requires a manufacture or Microsoft supported driver for Windows Server 2003 (not Windows XP/2000)	
 
 	•	 	Generic Plain Text Driver supported	
 
 	•	 	Additional Recommendations	
 
 	•	 	Printers should be PCL5 compliant (able to utilize the HP LaserJet 2100 print driver). The 2100 print driver in the Microsoft Windows platform is the most generic PCL5 print driver.	
 
 	•	 	Printers should have the ability to print using the Generic plain text print driver that ships with Windows Server 2003.	
Email Server
 
 	•	 	Must be scalable and robust to handle anticipated email volume for receipt emailing to passenger.	
 
 	•	 	Refer to email software instructions and technical documentation for proper hardware configuration.	
 
 	•	 	Customer may consider third party email hosting or email broadcast services available.	
 
 	•	 	Software Requirements	
 
 	•	 	SMTP compatible mail server	
 
 	•	 	Host relaying must be supported (configured to allow SMTP relay from NAVITAIRE network)	
Microsoft Recommended Solution:
Exchange Server 2010: http://www.microsoft.com/exchange/default.mspx
Setup for Mail relay for Exchange Server 2010: http://support.microsoft.com/default.aspx?scid=kb;en-us;260973
Network Hardware, Software, and Data Circuits
 
 	•	 	Data Circuits: Customer must already have or must install the necessary equipment and circuits to support their primary call center sites and remote locations, including field stations. NAVITAIRE requires a LAN/WAN network supporting TCP/IP protocols.	
 
 	•	 	Routers, DSU/CSUs, and Modems: Customer should contact NAVITAIRE for recent information regarding recommended routers and other network communication equipment.	
 
 	•	 	IP Addressing: NAVITAIRE requires that Customers present NAVITAIRE with an Internet Registered IP address for all traffic from Customer workstations or devices that require connectivity to the Hosted Reservation Services by utilizing either: (a) the actual Internet Registered IP address assigned to a Customer workstation or device or (b) a NAT (Network Address Translation) configured on Customer’s network equipment which changes the source IP address of the Customer workstation or device to an Internet Registered IP address prior to communicating with NAVITAIRE.	
 
 	•	 	Customer Provided Data Circuits: NAVITAIRE requires a review of the proposed primary or backup data circuit(s) prior to a third party agreement and installation. Where possible, NAVITAIRE will use reasonable effort to provide all necessary specifications and extend management of the data circuit as permitted by Customer and the third party supplying the data circuit(s).	
 
Exhibit A - 56

Hosted Services Agreement
 
 	7.3	Third Party Software. Customer is required to purchase directly from providers other related third party software licenses necessary to use the Hosted Reservation Services, including the following: 	
 
 	•	 	Local network server operating system(s) license: Microsoft Windows NT 4.0, Novell, or similar Operating System supporting TCP/IP protocols.	
 
 	•	 	Reporting: Microsoft Reporting Services for New Skies report development and access.	
 
 	•	 	Airports: Re-certification of the ARINC/SITA emulators to support the New Skies airport interface.	
 
 	7.4	Credit Card Processing	
 
 	7.4.1	Authorization and Settlement Services. Customer will be allowed ***** payment authorization services connection with a third party, and ***** settlement services connection with a third party, any additional connections will be quoted upon request.	
 
 	7.4.2	Card and Payment Types.	
 
 	•	 	Supported Credit Cards: NAVITAIRE currently supports VISA, American Express, MasterCard, JCB, Diners Club, and Discover Card.	
 
 	•	 	Supported Debit Cards: NAVITAIRE currently supports regional debit cards such as Visa Electron (EL), Visa Delta, Visa Connect, Switch/Solo, Maestro, and Laser.	
 
 	•	 	Not Supported: Debit cards requiring a Personal Identification Number [PIN], ATM cards, or private label credit cards are not supported.	
 
 	•	 	ELV: Ability to use an Elektronisches Lastschriftverfahren (ELV) form of payment through a European payment gateway is supported.	
 
 	•	 	UATP: Ability to use the UATP form of payment through either the shard ARINC circuit or via Customer’s PSP, depending upon regional requirements.	
 
 	7.4.3	PCI Compliance. NAVITAIRE will remain in compliance with the Payment Card Industry’s Data Security Standards (“PCI Standards”) in force at the time of execution of this Agreement, and to the extent applicable to the Hosted Reservation Services provided by NAVITAIRE. ***** Any subsequent changes to the PCI Standards requiring a modification to the Hosted Services shall be borne by Customer.	
 
 	7.4.4	Data Circuits. Customer must arrange and pay for necessary circuits for authorization and settlement file transmissions.	
 
 	7.4.5	Data Transmission. By selecting external and/or third party payment related services such as credit card authorization, settlement, 3-D Secure, DCC, etc., Customer authorizes NAVITAIRE to electronically transmit certain Customer data to providers of such services in order to facilitate the provision of payment related services.	
 
 	7.4.6	Authorization and Settlement Providers. Customer shall be responsible for contracting with third party authorization and settlement providers, and shall be responsible for the use, disclosure and treatment of any Customer Personal Data by such third parties. A list of NAVITAIRE supported authorization and settlement providers will be provided to Customer upon request. Should Customer elect to use an authorization or settlement provider not currently	
 
Exhibit A - 57

Hosted Services Agreement
 
 	certified by NAVITAIRE, such authorization or settlement provider is subject to NAVITAIRE approval and the certification costs, including development, are payable by Customer.	
 
 	7.5	CRS/GDS/ARS Agreements and Connection Fees (to Support Optional CRS/GDS/ARS Type B/Teletype, Type A/EDIFACT, and/or Codeshare Connectivity). Customer must negotiate and have in place, no later than ***** prior to the Target Date, the necessary participating agreements with each of the NAVITAIRE supported Computerized Reservation System/Global Distribution System (CRS/GDS) providers or airline and associated Airline Reservation System (ARS) providers. Implementation, integration, connection and Service Fees as described in Exhibit K and line charges may apply. NAVITAIRE will order and facilitate the installation of all circuits required to process CRS/GDS/ARS bookings, upon written notice from Customer.	
 
8	Service Levels and Service Level Targets	
 
 	8.1	Service Level Scope. The Service Levels contained in this Section represent the target service performance for the provision of the Hosted Reservation Services. Metrics, measurement, and reporting will create performance assessment measures that apply to operations services in the following three service categories:	
 
 	•	 	System availability targets.	
 
 	•	 	Metrics, measurement, and reporting.	
 
 	•	 	Remedies and corrective action.	
 
 	8.2	Service Level Targets	
 
 	8.2.1	System Availability. NAVITAIRE will seek to provide Customer with an overall Minimum System Availability Target of ***** of all Reporting Period Minutes for the applicable Reporting Period. Interrupted Service minutes will be measured and used to determine the percentage of monthly Hosted Services System availability.	
 
 	a)	Network Responsibilities. The diagram below shows those hardware components, network components (excluding the internet), and the software that resides on those components that are owned from a service level perspective by NAVITAIRE and those items that are owned by Customer. Items that are contained within the dotted-line (on the right side of the diagram) are the responsibility of Customer. During the event of an Interrupted Service, NAVITAIRE is responsible for errors that occur involving the hardware components, network components, and the software that reside outside of the dotted-line area.	
 
Exhibit A - 58

Hosted Services Agreement

 
 	b)	Planned Downtime. Planned Downtime will be used to provide hardware and software maintenance services. Planned Downtime is scheduled at a time that is agreeable for NAVITAIRE and Customer, generally between ***** local time for Customer. NAVITAIRE will notify Customer no later than ***** the day prior to the scheduled event if the time is needed for Change Control purposes.	
 
 	8.2.2	Incident (INC) Service Response. NAVITAIRE will commit to the response targets below for each Emergency INC logged System Error.	

Customer Communication	  	Emergency INC Response	
Acknowledgement and Initial Response	  	*****	
Update	  	Every *****	
 
 	8.3	System Errors and Emergencies	
 
 	8.3.1	System Errors. A System Error occurs when functionality that is included in the NAVITAIRE product user documentation is currently not working on Customer’s site in all material respects consistent with the manner that it is described in the documentation.	
 
 	Note:	Customer must refer to the documentation that matches the version of software they are running. If Customer wants a feature that is not currently included in their software version, but the feature is included in a later software version, Customer must upgrade their software to that version to be able to take advantage of the new features and functionality.	
System Errors detected during testing in Customer’s test environment should also be logged through the Internet based customer support tool with a reference to the test database code. NAVITAIRE will respond to all Emergency INCs for the test environment within *****
No failure of any reconfiguration by Customer of a Configurable Template shall be deemed to be or can create a System Error.
 
Exhibit A - 59

Hosted Services Agreement
 
 	8.3.2	System Error Reporting. Customer may report an identified Hosted Reservation Services System Error at no additional cost using the Internet based customer support tool INC schema. A System Error is defined in this Exhibit A, Section 8.3.1.	
 
 	8.3.3	System Error Classification. When Customer reports an INC for a System Error, it will be assigned a priority based on the severity of the issue. These priorities will be assigned using the following table:	

Impact Analysis	  	Business Functionality	
	  	No loss of
business
function	  	Partial loss
of business
function.
Work-around
exists.	  	Partial loss of
business
function. No
work-around
exists.	  	Complete
loss of
business
function.
Work-
around
exists.	  	Complete
loss of
business
function.
No work-
around
exists.	
Immediate impact is significant. Affects many and/or critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is moderate. Affects few and/or non-critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is marginal. Affects few or no users.	  	*****	  	*****	  	*****	  	*****	  	*****	
An example of an ***** System Error might include:
*****
An example of a ***** System Error might include:
*****An example of a ***** System Error might include:
 
 	8.3.4	***** Emergency Response Procedure. In the event of a Customer Emergency, the NAVITAIRE Support Center may be contacted for assistance, according to the procedures outlined in this Exhibit A, Section 5.4.	
 
 	8.3.5	NAVITAIRE Support Communication Targets. For High, Medium, and Low INCs, response targets are provided in the table below. NAVITAIRE’s resolution targets are provided in the Support User Guide, available on NAVITAIRE’s Customer Care web site.	

Customer Communication	  	INC Severity Classification and Response Targets	
	  	High	  	Medium	  	Low	
Acknowledgement and Initial Routing	  	*****	  	*****	  	*****	
Updates	  	Customer will receive electronic notification whenever data is needed or incident is resolved, status changed or notes updated.	
 
 	8.4	Service Levels Reporting	
 
 	8.4.1	General. Regular, standardized Service Levels reporting provides a common denominator, which measures and evaluates service performance. This provides a basis on which conclusions can more easily be drawn as to the actual Service	
 
Exhibit A - 60

Hosted Services Agreement
 
 	Levels achieved. NAVITAIRE will monitor and measure performance of specified Service Levels items and send a Monthly Performance Report to Customer for review and approval. The report will be structured for Customer’s internal use and metrics will be generated and distributed on a monthly basis.	
 
 	8.4.2	Report Information	
 
 	•	 	Monthly Performance Report. NAVITAIRE will submit a Monthly Performance Report by the ***** of the subsequent month following the Reporting Period to the Customer Account Liaison. The report will contain the monthly indicator of Service Levels statistics and will be transmitted via email unless otherwise requested by Customer. The report will also summarize all Interrupted Service Reports for the Reporting Period.	
 
 	•	 	Interrupted Service Report. NAVITAIRE will provide an Interrupted Service Report, created by the NAVITAIRE Support Center, following an Interrupted Service event. This report will summarize circumstances, identified cause (if known) and will outline any identified corrective action. Interrupted Service Reports can be tracked by the associated INC number for reference on the Monthly Performance Report.	
 
 	8.4.3	Report Follow Up. If Customer has any questions or objections to the Interrupted Service Report, they will notify their NAVITAIRE Account Manager within ***** of receiving the report and NAVITAIRE shall respond within ***** of notification. If the parties cannot agree on the measurements reported, the matter will be escalated to the respective Executive Sponsors, and, if still unresolved, will be escalated as outlined in Section 17.5 of the Agreement (Dispute Resolution).	
 
 	8.5	Review and Correction	
 
 	8.5.1	NAVITAIRE Account Manager Review. In addition to Support Center Support and Emergency services, the NAVITAIRE Account Manager will coordinate a teleconference with the Customer Account Liaison within ***** of the Interrupted Service to discuss the details of the Interrupted Service and to update Customer on any identified cause or status. The NAVITAIRE Account Manager will close the Interrupted Service Report with the Customer Account Liaison upon final report of identified cause and any outline of corrective action.	
 
 	8.5.2	Executive Review. Upon the request of the NAVITAIRE or Customer Account Liaison, an Executive Sponsor teleconference and a further escalation to the CEO, President, or Managing Director level of each company may be made depending on the severity of the Interrupted Service.	
 
 	8.6	Corrective Action, *****. The corrective action ***** described below will be applied with respect to each Reporting Period, which commences after ***** following completion of Implementation Services. Conflict and Exhaustion of Provisions as stated at the beginning of this Exhibit A will apply to this Section.	
 
 	8.6.1	Corrective Action. The NAVITAIRE Account Manager shall monitor corrective action and report to the Executive Sponsors. In the event that Minimum System Availability Targets are not met during the Reporting Period, the NAVITAIRE Account Manager shall initiate corrective action during the subsequent Reporting Period. *****, NAVITAIRE shall, at its own expense, use commercially reasonable efforts to correct the deficiency in order to meet future Minimum System Availability Targets.	
 
 	8.6.2	Failure Notification. Upon a ***** failure of NAVITAIRE to meet Minimum System Availability Targets during successive Reporting Periods, the issue shall be escalated to the CEO, President, or Managing Director level of each company. Customer may notify NAVITAIRE, in writing, of the failure to meet	
 
Exhibit A - 61

Hosted Services Agreement
 
 	Minimum System Availability Targets. Upon receipt of such notice, NAVITAIRE will begin reporting System Availability in ***** Reporting Periods and will communicate to Customer within ***** and in writing the status of improvement in performance.	
 
 	8.6.3	***** If NAVITAIRE *****, NAVITAIRE shall provide Customer with ***** pursuant to the following tables:	
Table 1. Where the Service Interruption concerns **********

*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
Table 2. Where the Service Interruption concerns **********

*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
 	a)	Customer shall have the right to terminate this Agreement in the following events *****If NAVITAIRE *****,	
 
 	b)	If NAVITAIRE *****.	
 
 	c)	If NAVITAIRE *****.	
***** require NAVITAIRE to use its commercially reasonable efforts to work with Customer and its selected vendor to move the data to another reservation system vendor, charging the Customer time and materials.
The foregoing remedies constitute Customer’s sole and exclusive remedies and NAVITAIRE’s entire liability with respect to a failure to meet the Minimum System Availability Targets *****
 
 	8.7	System Changes	
 
 	8.7.1	Change Control. Change control covers all events that impact application software, custom software, system software, or hardware. The Change Control process effectively plans and facilitates changes to the Hosted Services System, including ownership for mitigating problems that may occur with a change to minimize any associated downtime. This function is responsible for coordinating and controlling all change administration activities (i.e., document, impact, authorize, schedule, implementation control), and determining if and when a change will be implemented in the production environment.	
 
Exhibit A - 62

Hosted Services Agreement
 
Planned Downtime will be used to provide hardware and software maintenance services. Planned Downtime is scheduled at a time that is agreeable for NAVITAIRE and Customer, generally between ***** local time for Customer. NAVITAIRE will notify Customer no later than ***** the day prior to the scheduled event if the time is needed for Change Control purposes.
 
 	8.7.2	Enhancements. An “Enhancement” is a request for a new report or application or an improvement to an existing application related to usability, performance, additional functionality, or flexibility. Enhancements will be logged in the Internet based customer support tool. Such requests can be in response to:	
 
 	a)	Mandates controlled by external third parties including governments, governing industry bodies such as International Air Transport Association [IATA], Société Internationale de Télécommunications Aéronautiques [SITA], or airport authorities. Examples include:	
 
 	•	 	Taxes, fees, security issues, immigration.	
 
 	•	 	Airport technology issues that impact airlines such as bag tag, Common Use Terminal Emulator (CUTE), or CUBE.	
 
 	b)	Customer requests that are initiated through a direct request, user conference, or through Customer’s NAVITAIRE Account Manager. Examples include:	
 
 	•	 	Competitive advantage.	
 
 	•	 	Improved passenger services.	
 
 	•	 	Specific client requirements.	
 
 	•	 	Improved business management.	
 
 	c)	Internal requests that are initiated through the sales cycle, Technology, Development, or NAVITAIRE line of business. Examples include:	
 
 	•	 	Cost reduction initiatives.	
 
 	•	 	Product obsolescence.	
 
 	•	 	Corporate business plan objective.	
Efforts required to develop, implement, document, and/or train on Enhancements are payable by Customer.
 
 	8.7.3	Urgency Classifications for Enhancements. Enhancements will be assigned a priority according to the criteria in the table below. If there is a disagreement as to the priority of the requested Enhancements, these will be decided between the NAVITAIRE Account Manager and the Customer Account Liaison. If this cannot be resolved at this level, it will be escalated to the respective Executive Sponsors for determination.	

Urgency	    	Description	
		
*****	    	A requirement from a business critical third party or other outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact. Such requests are Urgent only if a third party controls the requirement, it is non-discretionary to the customer, and the third party places an immediate time constraint on the customer.
 
Note: Documentation from the governing entity, which clearly states the nature of the requirement, the time frame allowed for implementation, and the penalties for non-compliance may be required. Due to the nature of an Emergency request, NAVITAIRE expects to receive no more than ***** such requests per year. Every attempt will be made to meet the established regulatory deadline communicated in these instances; however should the deadline be compromised NAVITAIRE will communicate specific issues that may make this deadline unattainable with an estimate of when it can be completed.	
 
Exhibit A - 63

Hosted Services Agreement

	    	Examples:
 
•   Adding Security Watch - a government or industry requirement that would inflict severe financial penalties if not met and demanded a quick implementation.
 
•   Adding the EURO as a form of currency - a specific governmental requirement that was dictated to the customers and demanded a quick implementation.	
		
*****	    	A requirement from a business critical third party or outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact, but DOES NOT have an immediate time constraint placed on Customer by the third party.
 
Note : Such requests are classified as High to prevent them from becoming Very High/Emergencies. A new business requirement that cannot be completed in a manual nature without severe negative impact. Such requests are not Emergencies because the request is discretionary to the customer.
 
Examples:
 
•   Printing French Itineraries for domestic French flights - a governmental requirement that provided sufficient time to respond to the need. Changing to a new bank - a customer-driven requirement that is critical to customer daily operations.	
		
*****	    	Supports all required Hosted Services System operations; the request is required eventually but could wait until a later release if necessary. Would enhance the product, but the product is not unacceptable if absent. More of a want than a need, but would provide benefit to the customer.
 
Examples:
 
•   Adding support of seat assignment capability for Computerized Reservation System (CRS) bookings.
 
•   Adding new check-in commands or short-cuts that would save time and effort for the agents.
 
•   Adding new features or functions in the Irregular Operations (IROP) program to increase efficiency of passenger handling.	
		
*****	    	A functional or quality enhancement that corrects an aesthetic problem or improves usability from the customer’s perspective. It does not greatly affect or alter core functionality.
 
Examples:
 
•   Enabling a pop-up message of “Are you sure” for bags weighing > 100Kg.
 
•   Adding the ability to alter the ‘flow’ of the SkySpeed booking process as a user configurable option.
 
•   Adding support for additional languages for SkySpeed (localization).
 
•   Adding more feeds (imports or exports) to third party packages for data sharing.
 
•   Making minor adjustments to screen layouts or design to increase readability.
 
•   Adjusting reports to increase readability and decrease questions to support.	
 
Exhibit A - 64

Hosted Services Agreement
 
 	8.7.4	Releases. NAVITAIRE software changes are bundled into work units called releases. As previously stated in Section 4.12 of the Agreement, Customer is responsible for maintaining ***** current version ***** of the NAVITAIRE software and all costs associated with implementing a release. Upgrade requests will be initiated using the standard NAVITAIRE Work Order process. The type and content of each release will vary according to criteria listed in the chart below:	

Criteria	  	Releases	
	  	*****	  	*****	  	*****	
				
Driven By	  	Strategy and product direction	  	Bug fixes to previous releases of software	  	Very High / Emergency bug fixes or emergency enhancements	
				
Target Content	  	Enhancement *****
Bug Fix *****
Emergency *****	  	Enhancement *****
Bug Fix *****
Emergency *****	  	Enhancement *****
Bug Fix *****
Emergency *****	
				
Description	  	Changes in the architecture, to the database, or that affect many different products in the NAVITAIRE product suite	  	Bug fixes, new reports, new stand-alone programs or features. Data structure changes that do not impact the database or architecture	  	Critical changes to the software stemming from Very High / Emergency bug fixes or emergency enhancements	
				
Approximate
Schedule	  	Annual	  	Quarterly to monthly	  	As needed or in the next available release	
				
Implementation
Requirement	  	Overnight customer downtime	  	Implementation may require minimal customer downtime	  	Downtime as required by the software change	
				
Data Conversion
Requirement	  	Rolling transformation likely required	  	Data transformation likely required	  	Non or minimum (i.e., database deltas)	
				
QA Requirement	  	Full regression, performance, and other testing as required	  	Full regression testing	  	Component level testing only	
				
Notes	  	A Major Release requires post-release code Stabilization Period of *****	  	Minor releases have a rolling schedule, which allows for consistency in planning, development and release	  		
 
 	8.7.5	Release Stabilization Period. ***** Major Release as defined in this Exhibit A, Section 8.7.4, Hosted Services System performance for all or some of the Minimum System Availability Targets are subject to exemption during periods of time identified as Stabilization Periods. A Stabilization Period is defined as follows:	
 
 	•	 	As used herein, the term “Stabilization Period” means the first ***** following a Major Release. During the Stabilization Period incidents related to the functionality added for a particular third party service in the release that are directly related to that third party service are exempted from the Service Levels performance target. The Stabilization Period will not apply to Major Release ‘sub-releases’, fixes, *****	
During this time NAVITAIRE will work with Customer to periodically evaluate and refine the service level measures applicable to such third party service offerings.
 
 	8.8	Notification of Increased Usage. As previously stated in Section 4.3 of the Agreement, Customer agrees to use commercially reasonable efforts to provide NAVITAIRE with the designated advance notice of significant volume increases, according to a NAVITAIRE defined process.	
Due to the anticipated impact on performance of the Hosted Reservation Services, the first ***** following the increase in volume will be defined as a Stabilization Period. The purpose of this Stabilization Period is to allow the operation of the solution and the service level to stabilize from the influence of the increase in volume. During the Stabilization Period, NAVITAIRE will work with Customer to evaluate and refine the Service Levels targets. At the conclusion of the Stabilization Period, NAVITAIRE and Customer may mutually agree to revise Service Levels performance targets.
 
Exhibit A - 65

Hosted Services Agreement
 
EXHIBIT B
(INTENTIONALLY OMITTED)
 
Exhibit B - 66

Hosted Services Agreement
 
EXHIBIT C
NAVITAIRE CONTACTS
NAVITAIRE agrees to provide contacts for the following areas. Customer should use these contacts as necessary.
 
1	NAVITAIRE Support Center	
The following number is to be utilized as described in Exhibits A and G:

Telephone:	  	*****	
 
2	NAVITAIRE Commercial Account Manager	
NAVITAIRE agrees that the following individual is authorized to communicate with Customer on behalf of NAVITAIRE with respect to account management, project funding, contractual performance, and other commercial issues with respect to the Hosted Services:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
3	NAVITAIRE Account Executive Sponsor	
NAVITAIRE agrees that the following individual is responsible for Executive Sponsorship and for business issue escalation:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
4	NAVITAIRE Financial Contacts	
Customer may contact the NAVITAIRE Finance Department at the following regarding payments, invoices or other financial issues:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Facsimile:	  	*****	
Email:	  	*****	
 
Exhibit C - 67

Hosted Services Agreement
 
EXHIBIT D
CUSTOMER CONTACTS
NAVITAIRE agrees to use the following for its initial and primary contacts with Customer:
 
1	Customer Emergency Contact	
Customer agrees that the following number is available and will be answered after-hours for NAVITAIRE’s use in case of an emergency related to the Hosted Services. Failure for NAVITAIRE to obtain an answer from this Emergency Contact will prevent NAVITAIRE from providing support during an emergency. This may cause the system to be unavailable until such time that a Customer Emergency Contact may be reached.

Name:	  		
Telephone:	  	*****	
 
2	Customer Account Liaison	
Customer agrees that the following individual is authorized to communicate with NAVITAIRE and make decisions on behalf of Customer with respect to account management, project funding, performance, payment, and other commercial issues with respect to the Hosted Services:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Email:	  	*****	
 
3	Customer Executive Sponsor	
Customer agrees that the following individual is responsible for Executive Sponsorship and for Emergency escalation:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Email:	  	*****	
 
4	Customer Authorized Support Contact	
Customer may designate up to two (2) primary Customer Authorized Support Contacts. The Customer Authorized Support Contact shall be the only person authorized to access the NAVITAIRE telephone and Internet technical support systems, as described in Exhibits A and G, on behalf of Customer:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
Exhibit D - 68

Hosted Services Agreement
 
In addition, Customer may designate up to two (2) individuals that will act as alternates for the Customer Authorized Support Contacts. The designated alternate(s) for the Customer Authorized Support Contact(s) are:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
5	Customer Financial/Accounts Payable Contact	
Customer agrees that the following individual(s) is (are) the proper accounting contacts to whom all invoices and accounting documents will be delivered. These contacts will see to the timely payment of all invoices for services rendered under this Agreement.

Name:	  	Octavio Benitez	
Title:	  	Head of Accounts Payable	
Telephone:	  	(52 55) 11052300 ext 5523	
Email:	  	octavio.benitez@volaris.com	
Address:	  	Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, C.P. 01210, México, D.F., Mexico	
 
Exhibit D - 69

Hosted Services Agreement
 
EXHIBIT E
POWERED BY NAVITAIRE® MARK
The following terms and conditions shall apply to Customer’s use of the Powered by NAVITAIRE Mark (the “Mark”), as described in Section 4.11 of the Agreement.
 
1	Mandatory Use of the Mark	
*****
 
2	Guidelines for Using the NAVITAIRE Wired Mark	
 
 	2.1	Sizing and Placement Requirements. Customer is required to use the Mark to credit NAVITAIRE as follows:	
 
 	2.1.1	*****.	
 
 	2.1.2	*****. ***** *****.	
 
 	2.1.3	*****.	
 
 	2.1.4	*****.	
 
 	2.1.5	Individual graphic elements of the Mark may not be used as design features on the travel product, travel product packaging, documentation, collateral materials, advertising, or for any purpose other than as permitted herein.	
 
 	2.1.6	The Mark is an official mark and shall at all times remain the property of NAVITAIRE. The Mark includes graphic elements and accompanying words. The Mark shall always be expressed as an integrated whole.	
 
 	2.1.7	NAVITAIRE may change the Mark or substitute a different mark at any time; provided however that NAVITAIRE provides ninety (90) days prior written notice and further provided that such change or substitute Mark do not have substantially different sizing and placement requirements.	
 
 	2.2	Color Treatment. Approved Mark colors (included in the Mark as supplied by NAVITAIRE) are:	
 
 	2.2.1	Two Color Applications. The Mark must be used in the colors supplied by NAVITAIRE, which are medium blue for “Powered by NAVITAIRE” and light blue for the ‘swoosh’ below the NAVITAIRE portion of the graphic.	
 
 	2.2.2	Black and White Applications. An all black Mark or an all white Mark may be used if this color scheme is more compatible with Customer’s website branding.	
 
 	2.3	Location. *****	
 
 	2.4	Quality Control	
 
 	2.4.1	*****.	
 
 	2.4.2	*****.	
 
 	2.4.3	(INTENTIONALLY LEFT BLANK).	
 
 	2.4.4	*****.	
 
 	2.4.5	*****.	
 
 	2.4.6	*****.	
 
Exhibit E - 70

Hosted Services Agreement
 
3	License Grants and Restrictions	
 
 	3.1	*****.	
 
 	3.2	All rights not expressly granted are reserved by NAVITAIRE. Customer acknowledges that nothing in this Exhibit shall give it any right, title or interest in the Mark or any part thereof, other than the license rights granted herein. Customer may not use or reproduce the Mark in any manner whatsoever other than as described in this Exhibit E, Section 2.	
 
 	3.3	Customer agrees that it will not at any time dispute or contest: (a) the validity of the Mark or any registrations of the Mark, whether now existing or hereafter obtained; (b) the exclusive ownership by NAVITAIRE, its successors or assigns, of the Mark or of any registrations of the Mark, whether now existing or hereafter obtained; (c) the exclusive ownership by NAVITAIRE of the present and future goodwill of the business pertaining to the Mark; or (d) NAVITAIRE’s right to grant to Customer the rights and privileges conferred by the foregoing license.	
 
4	No Further Conveyances	
Customer shall not assign, transfer or sublicense any right granted herein in any manner without the prior written consent of NAVITAIRE.
 
5	No Endorsement	
 
 	5.1	Customer may not use the Mark in any way as an endorsement or sponsorship of the travel product by NAVITAIRE.	
 
 	5.2	Customer shall not use the Mark in any manner that disparages NAVITAIRE or its products or services, infringes any NAVITAIRE intellectual property or other rights, or violates any state, federal or international law.	
 
6	Termination	
 
 	6.1	NAVITAIRE reserves the right at its sole discretion to terminate or modify Customer’s license to use the Mark at any time.	
 
 	6.2	Customer may terminate its use of the Mark by: (a) terminating the Agreement as permitted therein; and (b) terminating Customer and/or Users access to the Hosted Services System.	
 
 	6.3	Upon termination of the Agreement, any and all rights and or privileges to use the Mark shall expire and use of the Mark shall be discontinued.	
 
7	The Mark	

 
 	Note:	The Mark above is depicted for print clarity. The required minimum size of 115 pixels in width is smaller than the above depiction.	
 
Exhibit E - 71

Hosted Services Agreement
 
EXHIBIT F
(INTENTIONALLY OMITTED)
 
Exhibit F - 72

Hosted Services Agreement
 
EXHIBIT G
HOSTED REVENUE ACCOUNTING SERVICES - SKYLEDGER®
Conflict and Exhaustion of Provisions
In the event that there exists any conflict between any term, condition or provision contained within this Exhibit and in any term, condition, or provision contained within the Agreement, the term, condition, or provision contained within this Exhibit shall control. Further, the rights, obligations, and privileges of the parties shall be determined first by reference to this Exhibit, as opposed to the Agreement. For purposes of clarification, the rights, obligations, and privileges contained within this Exhibit shall control and govern any dispute between the parties until all such rights, obligations, and privileges have been exhausted in their entirety; and only after such time shall the rights, obligations, and privileges of the parties be determined by reference to the Agreement.
 
1	Definitions	
As used in and for purposes of this Exhibit, the following terms shall be defined as set forth in this Exhibit. In the event that there exists any conflict between a definition set forth in this Exhibit and in any definition contained within Section 1 of the Agreement, the definition set forth in this Exhibit shall control.
 
 	1.1	Customer Revenue Accounting Contact means either the Customer Account Liaison or Customer Authorized Support Contact set forth in Exhibit D, Sections 2 and 4.	
 
 	1.2	Executive Sponsors has the meanings set forth in Exhibits C and D.	
 
 	1.3	Strategic Business Review has the meaning set forth in Section 3.5 hereof.	
 
 	1.4	Support Center means the NAVITAIRE facility that accepts phone and Internet based customer support tool service requests related to Hosted Services.	
 
 	1.5	System Error has the meaning set forth in Section 9 hereof.	
 
2	Scope of Services	
NAVITAIRE will provide certain services and support functions during the term of this Agreement related to the Hosted Revenue Accounting Services and related applicable products. Of the available Hosted Revenue Accounting Services, Customer has selected the products and/or services outlined in Exhibit K. The Hosted Services System infrastructure capacity will be established and configured for Customer’s operations based on flight Segment volume estimates provided by Customer.
Customer will be responsible for transferring data from the Hosted Revenue Accounting Services to Customer’s general ledger. Such functionality is specifically excluded from NAVITAIRE’s Hosted Revenue Accounting Services.
 
3	Implementation Services	
 
 	3.1	Data Center Implementation Services. NAVITAIRE will configure, install, activate, and test the necessary data center hardware and software for providing the Hosted Revenue Accounting Services to Customer. Unless otherwise specified, these services do not include communication circuits, wireless data services, or any remote communication devices, including routers or network hardware. Client personal computers, workstations, or other Customer devices connected to the Hosted Services System are the responsibility of Customer and must meet the minimum specifications as required by NAVITAIRE.	
 
Exhibit G - 73

Hosted Services Agreement
 
 	3.2	Virtual Private Network (VPN) Connectivity. If Customer desires to use a virtual private network (VPN) for connectivity to Hosted Revenue Accounting Services, NAVITAIRE will evaluate such a request to determine the viability of the use of a VPN connection for either a primary or back-up data circuit. After review, NAVITAIRE will advise Customer if the request is approved and the additional costs that will apply *****	
 
 	3.3	Network Configuration and Design Services. NAVITAIRE will supply recommended technical diagrams and will advise Customer on required network hardware requirements for client portion of application, as necessary. Customer shall have internal or third party network expertise available for the installation and configuration of their required network.	
 
 	3.4	System Integration Services. As Customer uses the NAVITAIRE Hosted Reservation Services, NAVITAIRE will integrate daily reservations activity XML extract files from NAVITAIRE Hosted Reservation Services into the Hosted Revenue Accounting Services.	
During the implementation of the Hosted Revenue Accounting Services and before production use of such services, NAVITAIRE will assist in the assessment of the transfer of the general ledger output file from the Hosted Revenue Accounting Services application. Customer shall be responsible for the cost of modifying or replacing any third party systems including hardware and software. For future integration services, NAVITAIRE will, upon request, provide an estimate; however, any services will be provided on a time and materials basis *****
 
 	3.5	Strategic Business Review	
 
 	3.5.1	NAVITAIRE will conduct a Strategic Business Review to gather information on Customer’s desired use of the Hosted Revenue Accounting Services and outline functional capabilities of the Hosted Services System. During the Strategic Business Review, NAVITAIRE will work with Customer to create a project plan and project schedule, including NAVITAIRE and Customer responsibilities, used to determine the Target Date.	
 
 	3.5.2	The Hosted Revenue Accounting Services installation process will include:	
 
 	•	 	Set up of physical and database environments	
 
 	•	 	Data import services	
 
 	•	 	Initialization of the Hosted Revenue Accounting Services software	
 
 	•	 	Import/load of reference data	
 
 	•	 	Technical and functional testing	
 
 	•	 	User Training with New Skies test data	
 
 	•	 	Conversion plan for open PNR liability data	
 
 	•	 	Load ***** of reservation data	
 
 	•	 	Complete ***** accounting close	
These elements will be incorporated into the project plan with input from Customer.
 
 	3.6	Customer Site Services. NAVITAIRE will assist Customer with the testing of the required telecommunications connection between the NAVITAIRE data center and the designated Customer facility. Customer shall be responsible for the cost of troubleshooting or connecting Customer’s internal network. Additional technical support for on-site assistance after the initial conversion for production use of the Hosted Revenue Accounting Services shall be quoted on a project basis at the request of Customer using the rates as outlined in Exhibit K, Section 1.3.	
 
Exhibit G - 74

Hosted Services Agreement
 
 	3.7	Initial Training Services. NAVITAIRE will supply the following training and Customer agrees to participate in such training for the Hosted Revenue Accounting Services:	
 
 	3.7.1	System Training: Up to a maximum of ***** which may be attended by up to a maximum of ***** Customer employees at the NAVITAIRE corporate offices located in Minneapolis, Minnesota. If Customer desires on-site initial training, Customer will be responsible for providing the training site, all required computer hardware, stable technical environment, and any related expenses including NAVITAIRE trainer(s) travel, quality lodging including high-speed internet access, NAVITAIRE standard per-diem for meals and incidentals, and additional costs for the trainer’s time away from their home office. All training will be conducted in English.	
Topics will include the definition of the expected daily and month-end activities required to support the Hosted Revenue Accounting Services and user and administrative features and functions. Customer must complete basic computer familiarization and Windows training for all trainees prior to the initial training. As Customer is contracting to use the NAVITAIRE Hosted Reservation Services, and the Hosted Revenue Accounting Services uses the data extracts from this system, trainees must also have completed a basic course on the features and functions of the Hosted Reservation Services.
Customer will be provided an electronic copy of the manual in Adobe Acrobat (PDF) format for download via the NAVITAIRE web site. Technical specification and technical reference manuals are for internal NAVITAIRE use only, unless otherwise specified in this Agreement or by other arrangement. All materials provided by NAVITAIRE are in the English language unless otherwise specified within this Agreement.
*****
 
 	3.8	Project Reporting	
 
 	3.8.1	During the course of Implementation Services, the NAVITAIRE Hosted Revenue Accounting Services Project Manager will coordinate status reporting with the NAVITAIRE Hosted Reservation Services Project Manager. Following completion of installation of the Hosted Reservation Services, the NAVITAIRE Hosted Revenue Accounting Services Project Manager will provide Customer with status on the remaining Implementation Services for Hosted Revenue Accounting Services as follows: (a) Weekly Project Plan Update and Status Report; (b) Weekly Updated Issues/Resolution List; and (c) Executive Summary.	
 
 	a)	Weekly Project Plan Update and Status Report. Weekly status reports will be transmitted to Customer on a weekly basis during the provision of Implementation Services. This report will include updated status on the process and an updated project plan. A list of the following week’s tasks and goals will be included in the report.	
 
 	b)	Weekly Updated Issues/Resolution List. Weekly updated issues/resolution lists will be forwarded to Customer on the same schedule as the Weekly Project Plan Update and Status Report. The Issues/Resolution List will include specific additional items discovered in the project analysis, or critical issues that deserve heightened priority apart from the project plan. The Issues/Resolution List will include the task, the responsible party, date, open/close status, priority, and date of closed task. Every issue will be given a priority relative to a mutually agreed priority with Customer. Priorities will be ranked 1-5, 1 being most critical. Below is a description of each priority:	
 
 	•	 	Priority 1 - Urgent. All issues included in this priority are deemed critical and will be given priority attention. These issues may affect a milestone or dependency related to the completion of conversion services. Issues in this category are critical to resolve prior to other project dependencies and milestones being completed.	
 
Exhibit G - 75

Hosted Services Agreement
 
 	•	 	Priority 2 - High. Issues included in this priority may affect the Target Date and require resolution prior to the completion of conversion services.	
 
 	•	 	Priority 3 - Medium. Issues included in this priority are not required prior to completion of conversion services, but must be finished prior to the end of Implementation Services.	
 
 	•	 	Priority 4 - Low. These items are not critical to either the completion of conversion services or Implementation Services but require monitoring for subsequent follow up or entry into NAVITAIRE’s Internet based customer support tool.	
 
 	•	 	Priority 5 - Excluded. These items are deemed excluded and are either unnecessary or may be addressed in a business process change or work-around.	
 
 	c)	Executive Summary. An Executive Summary will be provided to both the NAVITAIRE and Customer Executive Sponsors upon reaching critical milestones. These milestones will be established mutually with Customer as the final project plan has been established.	
 
 	3.9	Implementation Services Time Frame	
 
 	3.9.1	Upon receipt of the Implementation Fees due at signing, NAVITAIRE agrees to work with Customer to plan, coordinate, and to make progress toward completion of the required Implementation Services within the time frame preceding the Target Date. NAVITAIRE further agrees to initiate, mutually with Customer, project-scope-analysis and project-planning communication to establish the final schedule for Implementation Services. Depending on requirements for the loading of data included in the ***** Input files outlined as Interface Files in Section 7 below, into the Hosted Revenue Accounting Services and conversion, the project timeline and Target Date for Implementation Services of Hosted Revenue Accounting Services will be determined as part of the implementation project plan.	
 
 	3.9.2	During the court of planning discussions related to this Agreement, NAVITAIRE acknowledges the Target Date as requested by Customer for completion of applicable portions of Implementation Services. For Customers who are converting to the NAVITAIRE Hosted Reservation Services, the Target Date for completion of Implementation Services is no later than ***** after the first date that passengers are checked in at the airport using the Host Reservation Services. NAVITAIRE and Customer will detail dates and dependencies of the project plan, as summarized in the table below, in order to confirm the Target Date achievability.	

 	 	 	  	Primary
Responsibility	  	Duration to
Complete	  	Milestone Dependency	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  		  		
0	 	Agreement Signature and Project Start Date	  	ü	  	ü	  	*****	  	Agreement Signed*	
1	 	Project Start Components	  		  		  	*****	  	Milestone 0	
	 	SkyLedger data collector	  		  	ü	  		  		
	 	Project Statement of Work signoff	  	ü	  	ü	  		  		
2	 	Account Setup Complete	  		  		  	*****	  	Milestones 0 and 1	
	 	SkyLedger software loaded	  	ü	  		  		  		
	 	Connectivity to NAVITAIRE data center	  	ü	  	ü	  		  		
3	 	SkyLedger Training	  		  		  	*****	  	Milestone 2	
	 	SkyLedger training complete	  		  	ü	  		  		
 
Exhibit G - 76

Hosted Services Agreement

Key Milestones & Supporting Tasks	  	Primary
Responsibility	  	Duration to
Complete	  	Milestone
Dependency	
4	 	User Acceptance Testing	  		  		  	*****	  	Milestone 3	
	 	Confirm business critical functionality that is available in SkyLedger release	  	ü	  		  		  		
	 	Approved functionality is working as documented	  		  	ü	  		  		
5	 	Go-Live Readiness Review	  		  		  	*****	  	Milestone 4	
	 	Go-live walk-through	  	ü	  	ü	  		  		
	 	Confirm go-live date with all necessary teams	  	ü	  	ü	  		  		
6	 	Go-Live	  		  		  	*****	  	Milestone 5	
	 	Load data	  	ü	  		  		  		
	 	Perform data integrity check	  		  	ü	  		  		
	 	Perform go-live activities	  	ü	  		  		  		
	 	Approve go-live	  		  	ü	  		  		
7	 	First Monthly Close	  		  		  	*****	  	Milestone 6	
	 	Execute first monthly close	  	ü	  		  		  		
	 	Review monthly close	  		  	ü	  		  		
	 	Approve monthly close	  		  	ü	  		  		
 
*	Implementation services will not be scheduled until this Agreement is fully-executed and any implementation fees due and payable by Customer as outlined in Exhibit K, have been received by NAVITAIRE.	
 
 	3.9.3	NAVITAIRE recommends at least ***** of data included in the ***** Input files outlined as Interface Files in Section 7 below, containing Customer’s open PNR data from NAVITAIRE’s Hosted Reservation Services, prior to activation and initialization of the Hosted Revenue Accounting Services. Open PNR data will include unflown future Segments which still have a positive remaining balance.	
 
 	3.9.4	Typical timelines for implementation average ***** for full project implementation. The Hosted Revenue Accounting Services implementation process will be conducted in parallel with the NAVITAIRE Hosted Reservation Services implementation (if applicable); however, the Hosted Reservation Services conversion to production will normally precede the conversion of the Hosted Revenue Accounting Services implementation.	
 
 	3.9.5	The NAVITAIRE Hosted Revenue Accounting Services implementation team will have an assigned project lead and central contact point that will interface with the Customer Revenue Accounting Contact during the Implementation Services period.	
 
 	3.9.6	If Customer is implementing Hosted Reservation Services concurrently with the Hosted Revenue Accounting Services implementation, the NAVITAIRE Revenue Accounting project lead will communicate and coordinate with the primary Hosted Reservation Services project manager during the Hosted Reservation Services implementation effort. After Hosted Reservation Services conversion, the NAVITAIRE Revenue Accounting project lead will communicate status with the Customer Project Manager.	
 
 	3.9.7	Upon completion of the Implementation Services as described in this Exhibit G, Section 3, NAVITAIRE will provide written notification to the Customer Revenue Accounting Contact or Customer Account Liaison named in Exhibit D of this Agreement.	
 
4	Data Circuits	
 
 	4.1	Primary and Backup Data Circuits. Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s), as stated in Section 4.10 of this Agreement. It is anticipated that Customer will use the same primary and back-up	
 
Exhibit G - 77

Hosted Services Agreement
 
 	data circuits to transmit data for the Hosted Revenue Accounting Services as those used to support the delivery of the Hosted Reservation Services. Customer shall be responsible to ensure that the data circuits are capable of handling the additional data volume required for the Hosted Revenue Accounting Services. If Customer wishes to use any alternative arrangement to the Hosted Reservation Services data circuits, Customer must submit this request to NAVITAIRE for approval.	
 
 	4.2	Facility Locations. The facility locations provided for in this Agreement are as follows:	
 
 	•	 	The NAVITAIRE Hosted Revenue Accounting Services data center will be located in *****	
 
 	•	 	Customer’s primary facility will be located in *****.	
 
5	Included Support	
 
 	5.1	Support Center Support. NAVITAIRE will include English-speaking Support Center Support via email, an Internet based customer support tool (English version only), or telephone. A customized version of the NAVITAIRE Procedures Manual will be provided to Customer.	
The allotment of ***** for included support is for the specified period only and may not be carried forward. Allotted monthly ***** of Support Center Support are not deducted for System Error reporting and use of the online support system. All other related hours are deducted in ***** increments with a minimum of ***** per occurrence.
Customer is allotted, at no additional charge, a maximum number of included Support Center Support hours as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of ***** the Support Fees in Section 5.3 hereof will apply.
 
 	5.2	Hours - Non-Emergency. NAVITAIRE Support Center Support is available *****, excluding NAVITAIRE holidays (Christmas Eve, Christmas Day and New Year’s Day).	
 
 	5.3	Support Rate. Charges for additional support ***** exceeding the applicable included support for the Support Center will be invoiced at the rate specified in Exhibit K, Section 1.3.	
 
 	5.4	Available Assistance. The NAVITAIRE Support Center may be contacted for assistance. All services are in English, unless otherwise specified in this Agreement. This Section 5.4 outlines procedures for reporting Emergencies, errors, and requests.	
 
 	5.4.1	Emergency. An Emergency is defined as the Hosted Revenue Accounting Services not functioning for Customer due to an Interrupted Service which prevents the delivery of the daily Postings Report or the general ledger output file on the last day of the accounting period. Interrupted Service due to Customer misuse of the Hosted Services System will incur Support Fees at the rate specified in Exhibit K, Section 1.3.	
 
 	•	 	The NAVITAIRE Support Center may be reached, without charge, in the event of an Emergency ***** by calling the number provided in Exhibit C, Section 1.	
 
 	•	 	Customer will be requested to call the Support Center and report the Emergency, in English, to the representative, or if all representatives are busy with other calls, a message may be left in English on the voicemail response system, which will page an appropriate contact. A representative of NAVITAIRE will return Customer’s call within ***** with an acknowledgment and initial response to Customer.	
 
 	•	 	Provided the Emergency is due to an Interrupted Service event pertaining to the provision of the Hosted Revenue Accounting Services, NAVITAIRE will	
 
Exhibit G - 78

Hosted Services Agreement
 
 	advise Customer regarding the status of the error or problem and the anticipated period to resolution. During normal business hours, the NAVITAIRE Account Manager and Customer Account Liaison will be notified and briefed on the situation.	
 
 	•	 	Customer is required to provide NAVITAIRE with an after-hours emergency contact number in Exhibit D, Section 1, which will be answered by Customer when called by the NAVITAIRE support representative.	
 
 	5.4.2	Error Reporting. Customer may report an identified Hosted Revenue Accounting Services System Error at no additional cost through the Support Center or the Internet based customer support tool.	
 
 	5.4.3	Request Reporting. Customer may utilize the NAVITAIRE Internet support tool to contact the NAVITAIRE Support Center electronically for the following service requests:	
 
 	•	 	Custom Enhancement requests	
 
 	•	 	New product concepts or requests	
 
 	•	 	Additional training requests	
 
 	•	 	Product expertise	
These services are subject to the Support and/or Other Fees as described in Exhibit K, Section 1.3 and/or 1.4, and are accepted at the sole discretion of NAVITAIRE. If the request is accepted by NAVITAIRE, a price quote and time schedule will be generated. Customer will then decide whether to authorize the work to be performed by NAVITAIRE.
 
 	5.5	Third Party Interfaces	
 
 	5.5.1	NAVITAIRE will only supply and support defined interfaces to third party systems utilized by Customer if listed in this Section.	
 
 	5.5.2	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit G, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
6	Scheduled Maintenance	
The Hosted Revenue Accounting Services will be available to Customer for normal application operations Monday - Friday from *****, local Customer time. The hours of ***** will be used by NAVITAIRE for daily processing, including updates, optimization and creation of scheduled reports. Saturdays and Sundays will be used by NAVITAIRE for software installations, database backups, database maintenance, operating system patches, third party software upgrades, hardware maintenance, and hardware upgrades. If Customer requires access to the Hosted Revenue Accounting Services outside of normally available hours, Customer may request additional access through an INC, with at least ***** advance notice. NAVITAIRE will make a concerted effort to minimize impacts of scheduled downtime during Customer’s normal business hours.
 
7	Hosted Revenue Accounting Services Functionality	
The table below outlines the basic and optional products and features in NAVITAIRE’s Hosted Revenue Accounting Services that, depending on terms of the contract, as defined in this Exhibit G, Section 2, may be included in this Agreement. Such list describes features that are in force as of the Effective date. This list may be expanded or modified in the future based upon new releases.
 
Exhibit G - 79

Hosted Services Agreement
 
Hosted Revenue Accounting Services – SkyLedger
Base Functionality
General Features – SkyLedger
 
 	•	 	Captures financial events for NAVITAIRE reservation activity and relates the activity to the relevant financial accounting period.	
 
 	•	 	Maintains a historical PNR, Voucher, and Credit Shell database with a separate version whenever a financial change occurs.	
 
 	•	 	Provides periodic financial reporting with accounting period integrity.	
 
 	•	 	Provides a financial audit trail for financial activity related to the life of each PNR.	
 
 	•	 	Provides a financial audit trail for each accounting entry down to the specific transaction event detail.	
 
 	•	 	Provides data retention for PNR(s), Vouchers, Credit Shells, and accounting details.	
 
 	•	 	Includes a web based report creation tool which enables the user to create and view a set of reports.	
 
 	•	 	Provides the ability to map accounting events to airline specified general ledger accounts for reporting or electronically interfacing to the airline’s general ledger system.	
 
 	•	 	Provides financial detail in the airline’s designated “host” accounting currency without loss of the sales currency in the reporting data.	
 
 	•	 	Provides the ability to re-map transactions and automatically reprocess those affected by the mapping changes.	
 
 	•	 	Provides a pre-defined set of reports for critical accounting events with the flexibility of these reports being available in text, PDF, or Excel.	
 
 	•	 	Provides simple proration of fare over each leg within a given through segment.	
 
 	•	 	Provides flexibility to map account numbers to specific transactional data elements, e.g. aircraft type, tax code, or country code.	
Standard Reports
Accounting Reports
 
 	•	 	Account Center Balance Report. Displays account/center balances for each of the carrier’s accounts.	
 
 	•	 	Journal Entry Detail Report. Displays account/center balances grouped by Journal Entry.	
 
 	•	 	Activity Balance Report. Summarizes daily postings by account event/account type.	
 
 	•	 	Account Mappings Report. Displays all relevant information related to an account mapping for a user-specified company code, effective period, account event and account type.	
 
 	•	 	Suspense Report. Displays account items that are currently in suspense.	
Revenue Reports
 
 	•	 	Revenue by Distance. Displays base and gross revenue by seat mile/kilometer on a specific date or within a specified date range for flights between two cities.	
 
 	•	 	Revenue by Fare Class. Displays revenue by fare class on a specific date or within a specified date range.	
 
 	•	 	Revenue by Flight. Displays revenue by average seat mile/kilometer for individual flights.	
 
 	•	 	City Pair Load Factor. Displays passenger totals, load factor, ASM, Revenue, RPM, yield, RASM, and other data by city pair as well as by individual flights serving each city pair.	
 
 	•	 	Earned/Unearned Revenue. Displays information on earned and unearned revenue for flights between a designated city pair including analysis by booking date and equipment type.	
 
 	•	 	Route Profitability Report. Displays a summary of revenue and costs by route. Costs must be entered through the Expenses User Interface before the report can be used.	
Business Reports
 
 	•	 	Credit Shell/Voucher Expiration. Lists expired credit files, credit shells and vouchers for a specified time period.	
 
 	•	 	Fees and Discounts. Displays fees and discounts, by currency and type, entered into the system.	
 
 	•	 	Tax History. Displays information for selected tax payments.	
 
 	•	 	Payment Report. Displays information about payments made against a PNR grouped by date, agent or type based on parameters specified.	
 
 	•	 	Flight Reconciliation Report. Displays Flight Statistics and what has been received and accounted for within SkyLedger.	
 
 	•	 	Unearned Revenue Liability Report. This report displays unearned revenue, earned revenue, no-show revenue, expired revenue, and unearned revenue liability at an accounting period level. This report will provide the user with exposure to their unearned revenue liability (items sold, but not flown).	
 
 	•	 	Delta Report. Displays all transactions for which the total debit and credit amount do not balance for the account specified by the user	
Operational Reports
 
 	•	 	Extract Load Errors Report. Displays all transactions that could not be successfully loaded to the historical database.	
 
 	•	 	Reconciliation Report. Daily report that is used to ensure all transactions listed on the historical database are also posted to the accounting detail database with the appropriate amounts. Only discrepancies between the historical and accounting database are displayed.	
 
Exhibit G - 80

Hosted Services Agreement
 
Modules and Interfaces
Modules
 
 	•	 	PNR Load. Accept PNR XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Voucher Load. Accept Voucher XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Credit Shell Load. Accept Credit Shell XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Flight Following Load. Accept Flight Following XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	PNR Version History. Version incoming PNR and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Voucher Version History. Version incoming Voucher and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Credit Shell Version History. Version incoming Credit Shell and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Flight Following Version History. Version incoming Flight and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Accounting Generator. Generate accounting transactions based on prior versions of PNR, Voucher and Credit Shell comparing differences to determine what financial events have changed.	
 
 	•	 	Account Mapping. Assign an account period, company code, journal entry, debit/ credit account/ center to a specific accounting transaction.	
 
 	•	 	Remap Request. Identify and process the transactions that must be reversed and remapped as a result of modifications to the account mapping table.	
 
 	•	 	Re-conversion Request. Identify and process the transactions that must be reversed and reposted as a result of modifications to the currency conversion rate table.	
 
 	•	 	Account Reversal. Update the accounting detail table to reverse all accounting related to the transaction key provided.	
 
 	•	 	Transaction Reconciliation. Ensure the accounting database is in sync with the historical transaction database.	
 
 	•	 	Monthly Close Processing. Perform a variety of actions related to the close of an accounting period.	
 
 	•	 	Simple Proration. Retrieve air miles for each leg within a given through segment and divide the fare among the constituent legs. Alternatively the square root of air miles can be used to divide the fare among the constituent legs.	
 
 	•	 	Expiration. Generate accounting to relieve liability related to unused transactions (PNR(s), Credit Shells, and Vouchers) following a user-specified expiration period.	
 
 	•	 	Purge. Delete fully-used, closed transactions from the historical and accounting databases following a user-specified retention period.	
 
 	•	 	General Ledger Creation. Extract all accounting records in local and/or host currency on a daily or monthly basis to be fed via XML interface into Customer’s General Ledger system.	
 
 	•	 	Agency Billing and Commission Load. Accept Agency Billing and Commission file from the NAVITAIRE reservation system, validate file, and load to database (optional).	
Interface Files
SkyLedger is populated by the XML extract files provided by the NAVITAIRE Reservation System. The main output of the SkyLedger system will be the general ledger feed, which supplies the data that can be interfaced into Customer’s financial system. Please note that each of the interface files listed below has a standard file specification and all files accepted or created by the SkyLedger system must be formatted in accordance with these file specifications.
Inputs
 
 	•	 	PNR Booking Data Extract from the NAVITAIRE Reservation System with PNR/Passenger information such as booking, flown, or payments.	
 
 	•	 	Credit Shell XML. Daily XML Extract from the NAVITAIRE Reservation System with Credit Shell information such as creation of, usage.	
 
 	•	 	Voucher XML. Daily XML Extract from the NAVITAIRE Reservation System with Voucher information such as creation of, usage.	
 
 	•	 	Flight Following XML. Daily XML Extract from the NAVITAIRE Reservation System with flight information such as origin, destination, or passenger counts.	
 
 	•	 	Agency Data XML. XML extract from the NAVITAIRE Reservation System with agent and contact information. This information is used to allow mapping by department and location for certain accounting events.	
Outputs
 
 	•	 	Standard General Ledger Feed. The NAVITAIRE standard general ledger feed, which provides SkyLedger data to Customer’s general ledger system to update the journal entry/account balances, is included at no extra cost to Customer.	
User Interfaces
SkyLedger provides a user interface for: a) viewing and managing accounts, b) viewing journals and account mappings to allow customization accounts, and c) viewing journal entries to track how transactions are applied to those specific accounts. The following six user interfaces will be included in SkyLedger:
 
 	•	 	Accounts. The accounts user interface will be used to insert, update, and delete entries from the SkyLedger account table, center table, and company account center table. These tables in turn are used to validate entries to the SkyLedger account mapping table.	
 
 	•	 	Journal Maintenance. The journal maintenance user interface will be used to insert, update, and delete entries on the SkyLedger journal entry table. This table in turn will be used to validate entries to the SkyLedger account mapping table.	
 
Exhibit G - 81

Hosted Services Agreement
 
 	•	 	Journal Approval. The journal approval user interface will be used to approve the debit/credit balance for each journal entry. Please note that this interface is intended to be used in conjunction with the SkyLedger journal entry detail report. Quality Assurance and management approval of a journal entry is required before data related to this journal entry may be bridged to the user via the automated monthly G/L feed (where the carrier has requested user-approval of the journal entry balance).	
 
 	•	 	Mappings. The mappings user interface will be used to insert, update, and delete entries from the SkyLedger account mapping table. This table in turn will be used to assign a debit account/center and credit account/center to accounting transactions based upon the type of accounting event (account event/account code) and the specific characteristics of the transaction (mapping fields). The account mapping table also enables individual accounting transactions to be classified under the proper company code and journal entry.	
 
 	•	 	Currency Maintenance. This user interface will allow the user to enter the exchange rate from each currency to the host currency at the company level with an effective date for each exchange rate.	
 
 	•	 	Service Types. This user interface will allow the carrier to identify each service type and specify whether or not the revenue related to that service will be earned at the time of booking or the time of flight.	
Revenue Accounting System Data Storage and Access
 
 	•	 	Online access for historical revenue accounting system data up to ***** from current date.	
 
 	•	 	Access to historical revenue accounting system data more than ***** to the current date is the responsibility of Customer.	
Standard General Ledger Extract
 
 	•	 	Provides a daily or monthly extract file containing account postings data.	
 
 	•	 	Allows Customer to upload the data into their financial system.	
Month End Close Process
 
 	•	 	User initiated process which is executed by NAVITAIRE operations staff.	
 
 	•	 	Provides automated closure of each accounting period.	
Hosted Revenue Accounting Services – SkyLedger
Add-on Functionality
Custom General Ledger Feed
General Features – Custom General Ledger Feed
 
 	•	 	Provides SkyLedger data to Customer’s general ledger system to update the journal entry/account balances and is based upon a custom file specification.	
Credit Card Settlement Data
General Features – Credit Card Settlement Data
 
 	•	 	Accepts credit card settlement data at the PNR level if provided by Customer’s Payment Service Provider (PSP) or NAVITAIRE’s payment service.	
 
 	•	 	Performs accounting for settled and chargeback amounts.	
 
 	•	 	Includes sixty (60) days of historical data storage.	
 
 	•	 	Must be enabled for each credit card payment service provider or bank.	
 
 	•	 	Test data will be provided to NAVITAIRE from the payment service provider or bank, to ensure the data is successful prior to going into production.	
Inbound Interline/Operating Codeshare Settlement
General Features – Inbound Interline/Operating Codeshare Settlement
 
 	•	 	Identifies bookings associated with inbound interline and operating Codeshare requests and consolidates the information for accounting and billing purposes.	
 
 	•	 	Facilitates billing and settlement by creating invoices, reports and output files.	
 
 	•	 	Functionality must be enabled for each interline/operation codeshare partner.	
 
 	•	 	NAVITIARE charges a flat fee per interline/operation codeshare partner to cover the cost of generating the settlement file.	
Additional Reports
Outward Billing Report
 
 	•	 	Displays revenue and billable tax information by flight and partner for interline transactions.	
 
Exhibit G - 82

Hosted Services Agreement
 
Additional Modules and Interfaces
Additional Interface Files
 
 	•	 	Invoice Summary Report. Displays interline invoice summary information based on the ATA/IATA Interline Passenger Summary Invoice format.	
 
 	•	 	Invoice Coupon Report. Displays interline invoice details based on the ATA/IATA Interline Passenger Summary Invoice format.	
 
 	•	 	Billing File. This file is created by SkyLedger and contains invoice and transaction details for interline billable activity. File format is based on the Interline Data Exchange Centre (IDEC) format.	
 
 	•	 	Passenger Reconciliation Data File. This file is created by SkyLedger and should be sent to the partner airline to advise them a flight has operated.	
 
 	•	 	Web F12 File. This file is an electronic claims file created by SkyLedger containing Forms One and invoice details only and enables Clearing House members to electronically communicate with the Clearing House system in order to submit electronic Forms One and generate an electronic Forms Two.	
 
 	•	 	Currency Conversion File. This file is required for SkyLedger. It can either be the IATA 5-day rate if settling through the clearinghouse, or a file of currency rates from New Skies.	
Additional User Interfaces
 
 	•	 	Interline Configuration. Allows an airline to configure various properties related to outward billing for each partner airline.	
 
 	•	 	Billing Request. Enables the airline to request the creation and transfer of one or more outward billing files/reports.	
 
 	•	 	ISC Detail Application. Allows an airline to specify specific ISC rates that apply at the segment level.	
 
 	•	 	Fares Settlement. Allows an airline to use an amount for interline and codeshare settlement which differs from the fare in the booking.	
ARC Reporting
General Features – ARC Reporting
 
 	•	 	SkyLedger accepts ARC CAT files which are validated against PNR details for fare, tax and payment.	
 
 	•	 	ARC Reconciliation report details any variances between the ARC and PNR data for fare, tax and payment	
 	•	 	Creates accounting for commission and agency debit and credit memos	
 
8	Customer Hardware, Software, Connectivity and Network Requirements	
 
 	8.1	Software Use and Upgrades. Customer is required to maintain the latest version ***** of supported NAVITAIRE and ***** related third party software as directed by the NAVITAIRE Support Center, ***** Upon receipt of upgraded software, newer versions or software, or notification of third party software updates, Customer must update their software version(s) within *****. Failure to complete the advised upgrades may result, at NAVITAIRE’s option, in the suspension of Included Support, as described in this Exhibit G, Section 5.	
 
 	8.1.1	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit G, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
 	8.2	Equipment Specifications. The equipment specifications below outline the required, supported hardware and software necessary for the proper function and efficient operation of the Hosted Revenue Accounting Services and applicable products. Unless otherwise specified in this Section, the equipment and software listed below are the responsibility of Customer. All specifications are subject to change. Customer will be provided a minimum of thirty (30) days’ notice of incremental hardware upgrade requirements.	
SkyLedger
Workstation:
 
 	•	 	Windows XP	
 
 	•	 	Microsoft Office	
 
 	•	 	2.0 GHz Intel Pentium 4 Processor with MMX (or higher)	
 
 	•	 	512 MB RAM (or higher); AGP and PCI bus; 100-133 MHz FSB	
 
 	•	 	17” Monitor minimum	
 
 	•	 	Internet Explorer Version 7 or higher	
 
 	•	 	100 MB Network Card (with 100 MB network, end to end)	
 
Exhibit G - 83

Hosted Services Agreement
 
Network Hardware, Software, and Data Circuits
 
 	•	 	Data Circuits: Customer must already have or must install the necessary equipment and circuits to support their primary revenue accounting site and any remote locations. NAVITAIRE requires a LAN/WAN network supporting TCP/IP protocols.	
 
 	•	 	Routers, DSU/CSUs, and Modems: Customer should contact NAVITAIRE for recent information regarding supported routers and other network communication equipment.	
 
 	•	 	IP Addressing: NAVITAIRE requires that all hosted Customers use Internet Registered IP addresses on all client workstations or devices that require connectivity to the Hosted Revenue Accounting Services. Alternatively, NAVITAIRE requires a NAT (Network Address Translation) router to be installed behind the NAVITAIRE gateway router. The NAT must then have the Internet Registered IP address.	
 
 	•	 	Customer Provided Data Circuits: NAVITAIRE requires a review of the proposed primary or backup data circuit(s) prior to a third party agreement and installation. Where possible, NAVITAIRE will use reasonable effort to provide all necessary specifications and extend management of the data circuit as permitted by Customer and the third party supplying the data circuit(s).	
 
 	8.2.1	Data Circuits. Customer must arrange and pay for necessary circuits for Hosted Revenue Accounting Services file transmissions. NAVITAIRE may act as Customer’s agent to order and facilitate installation of these circuits upon written request by Customer.	
 
9	System Errors and System Changes	
 
 	9.1	System Errors	
 
 	9.1.1	System Error Definition. A System Error occurs when functionality that is included in the NAVITAIRE product user documentation is currently not working on Customer’s site in all material respects consistent with the manner that it is described in the documentation.	
 
 	Note:	Customer must refer to the documentation that matches the version of software they are running. If Customer wants a feature that is not currently included in their software version, but the feature is included in a later software version, Customer must upgrade their software to that version to be able to take advantage of the new features and functionality.	
System Errors detected during testing in Customer’s test environment should also be logged through the NAVITAIRE internet support tool with a reference to the test database code. NAVITAIRE will respond to all Emergency INCs for the test environment within *****
 
 	9.1.2	System Error Reporting. Customer may report an identified Hosted Revenue Accounting Services System Error at no additional cost using the Internet based customer support tool INC schema. A System Error is defined in Section 9.1.1 above.	
 
 	9.1.3	System Error Classification. When Customer reports an INC for a System Error, it will be assigned a priority based on the severity of the issue. These priorities will be assigned using the following table:	

 	  	Business Functionality	
Impact Analysis	  	No loss of
business
function	  	Partial loss
of business
function.
Work-around
exists.	  	Partial loss of
business
function. No
work-around
exists.	  	Complete
loss of
business
function.
Work-
around
exists.	  	Complete
loss of
business
function.
No work-
around
exists.	
Immediate impact is significant. Affects many and/or critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is moderate.
Affects few and/or non-critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is marginal.
Affects few or no users.	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Exhibit G - 84

Hosted Services Agreement
 
An example of an ***** System Error might include:
 
 	•	 	*****.	
 
 	•	 	*****.	
An example of a ***** System Error might include:
 
 	•	 	****tely.	
An example of a ***** System Error might include:
 
 	•	 	*****.	
 
 	9.1.4	Emergency Response Procedure. In the event of a Customer Emergency, the NAVITAIRE Support Center may be contacted for assistance, according to the procedures outlined in this Exhibit G, Section 5.4.	
 
 	9.2	System Changes	
 
 	9.2.1	Change Control. Change control covers all events that impact application software, custom software, systems software, or hardware. The Change Control process effectively plans and facilitates changes to the Hosted Revenue Accounting Services system, including ownership for mitigating problems that may occur with a change to minimize any associated downtime. This function is responsible for coordinating and controlling all change administration activities (i.e., document, impact, authorize, schedule, implementation control), and determining if and when a change will be implemented in the production environment.	
 
 	9.2.2	Enhancements. An “Enhancement” is a request for a new report or application or an improvement to an existing application related to usability, performance, additional functionality, or flexibility. Enhancements will be logged in the Support Center Support tool. Such requests can be in response to:	
 
 	a)	Mandates controlled by external third parties including governments, governing industry bodies such as International Air Transport Association [IATA], Société Internationale de Télécommunications Aéronautiques [SITA], or airport authorities.	
 
 	b)	Customer requests that are initiated through a direct request, user conference, or through Customer’s NAVITAIRE Account Manager. Examples include:	
 
 	•	 	Competitive advantage	
 
 	•	 	Improved passenger services	
 
 	•	 	Specific client requirements	
 
 	•	 	Improved business management	
 
 	c)	Internal requests that are initiated through the sales cycle, Technology, Development, or NAVITAIRE line of business. Examples include:	
 
 	•	 	Cost reduction initiatives	
 
Exhibit G - 85

Hosted Services Agreement
 
 	•	 	Product obsolescence	
 
 	•	 	Corporate business plan objective	
Efforts required to develop, implement, document, and/or train on Enhancements are payable by Customer.
 
 	9.2.3	Urgency Classifications for Enhancements. Enhancements will be assigned a priority according to the criteria in the table below. If there is a disagreement as to the priority of the requested Enhancements, these will be decided between the NAVITAIRE Account Manager and the Customer Account Liaison. If this cannot be resolved at this level, it will be escalated to the respective Executive Sponsors for determination.	

Urgency	    	Description	
		
*****	    	A requirement from a business critical third party or other outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact. Such requests are Urgent only if a third party controls the requirement, it is non-discretionary to the customer, and the third party places an immediate time constraint on the customer.
 
Note: Documentation from the governing entity, which clearly states the nature of the requirement, the time frame allowed for implementation, and the penalties for non-compliance may be required. Due to the nature of an Emergency request, NAVITAIRE expects to receive no more than ***** such requests per year. Every attempt will be made to meet the established regulatory deadline communicated in these instances; however should the deadline be compromised NAVITAIRE will communicate specific issues that may make this deadline unattainable with an estimate of when it can be completed.	
*****	    	 
A requirement from a business critical third party or outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact, but DOES NOT have an immediate time constraint placed on the customer by the 3rd party.
 
Note: Such requests are classified as High to prevent them from becoming Very High/Emergencies. A new business requirement that cannot be completed in a manual nature without severe negative impact. Such requests are not Emergencies because the request is discretionary to the customer.	
*****	    	 
Supports all required Hosted Services System operations; the request is required eventually but could wait until a later release if necessary. Would enhance the product, but the product is not unacceptable if absent. More of a want than a need, but would provide benefit to the customer.	
*****	    	 
A functional or quality enhancement that corrects an aesthetic problem or improves usability from the customer’s perspective. It does not greatly affect or alter core functionality.
 
Examples:
 
•   Adding more feeds (imports or exports) to 3rd party packages for data sharing.
 
•   Making minor adjustments to screen layouts or design to increase readability.
 
•   Adjusting reports to increase readability and decrease questions to support.	
 
 	9.2.4	Releases . NAVITAIRE software changes are bundled into work units called releases. The type and content of each release will vary. As previously stated in Section 4.12 of the Agreement, Customer is responsible for maintaining current versions ***** of the NAVITAIRE software and all costs associated with implementing a release.	
 
 	9.2.5	Month End Closure. SkyLedger operates with ***** accounting periods open at all times. Prior to closing the accounting month end, Customers must ensure that following are managed:	
 
 	•	 	All flights for that month have been set to “Close” within the NAVITAIRE Reservation System.	
 
 	•	 	All no-show passengers on all flights for the month have been set to “No-Show”.	
 
 	•	 	Balance in the SkyLedger Suspense account has been cleared to “Nil” balance or to a reasonable level.	
 
Exhibit G - 86

Hosted Services Agreement
 
Customers are required to close the accounting period within the first ***** of the next month (e.g. ***** accounting month would be set to close by *****). Customers are requested to log an INC to request NAVITAIRE Operations to close the accounting month. For example:
 
 	•	 	***** accounting periods are open	
 
 	•	 	***** accounting period is closed no later than *****As soon as ***** is closed ***** accounting period will be open	
In the event Customer has not requested the earliest accounting period to be closed prior to the start of the ***** (in the example above this is *****) NAVITAIRE Operations will close the accounting period (***** in the above example). Customer will be provided ***** notice that the accounting period will be scheduled for closure. This is to ensure that September booking data can be loaded and accounting is generated without any delays.
If NAVITAIRE Operations confirms the accounting close is to be scheduled and Customer does not accept this, Customer will be responsible for any incurred costs associated with holding back and the loading of data for subsequent months. This effort is chargeable based on time and materials at the rates listed in Exhibit K.
 
Exhibit G - 87

Hosted Services Agreement
 
EXHIBIT H
(INTENTIONALLY OMITTED)
 
Exhibit H - 88

Hosted Services Agreement
 
EXHIBIT I
(INTENTIONALLY OMITTED)
 
Exhibit I - 89

Hosted Services Agreement
 
EXHIBIT J
(INTENTIONALLY OMITTED)
 
Exhibit J - 90

Hosted Services Agreement
 
EXHIBIT K
PRICE AND PAYMENT
 
1	Fee Schedule	
All fees in this Exhibit are specified in USD.
 
 	1.1	Service Fees	
 
 	1.1.1	Monthly Recurring Service Fees – Core Services:	

***** Tier	  	Hosted Reservation
Services – New Skies	 	Hosted Revenue
Accounting Services
– SkyLedger	
	  	Per *****	 	Per *****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
SELECTED	  	X	 	X	
 
 	a) 	***** Guarantees. Customer agrees to guarantee and pay as a ***** the total number of ***** according to the table below. This table will also be used for the purposes of calculating the minimum recurring Service Fees, effective upon the Target Date:	

*****	  	***** Guarantees*	
	  	*****	
1 (First *****)	  	*****	
2 (Following *****)	  	*****	
3 (Following *****)	  	*****	
4 (Following *****)	  	*****	
5 (Following *****)	  	*****	
*****	  	*****	
***** *****)	  	*****	
*****)	  	*****	
*****)	  	*****	
*****	  	*****	
 
*	All Host Segments and Segments booked via SkySpeed, SkySales Internet Suite, Booking API Suite, or Allotment API Suite in excess of these monthly minimum guarantees will be invoiced per terms described in Section 6.3 of the Agreement.	
*****Factors to be considered include but are not limited to the following: *****
 
 	b)	Availability Request Overage Fee is the fee applied to each Utilized Availability Request in excess of the Maximum Availability Requests Allowed *****. The fee is determined by the following Load Factor sliding scale, based on the average monthly Load Factor, and will be applied to each excess call:	
 
 	•	 	Load Factor lower *****	
 
Exhibit K - 91

Hosted Services Agreement
 
 	•	 	Load Factor between *****	
 
 	•	 	Load Factor between *****	
 
 	•	 	Load Factor greater *****	
The average monthly Load Factor is rounded to the nearest whole number to determine the fee to be applied.
Should Customer not utilize the Low Fare Finder functionality, a ***** will apply per Standard Availability Call in excess of the Maximum Availability Requests Allowed *****
 
 	c) 	***** Ratio. A ***** Ratio of ***** will apply to ***** as described in Section 1 of Exhibit A. If the established ***** Ratio is exceeded, the excess usage fees will be calculated in accordance with the Availability Request Overage Fee.	
 
 	d) 	*****.	
 
 	•	 	***** .	
For example:

 	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
 	•	 	*****means the *****.	
*****For Example: *****
 
 	1.1.2	Monthly Recurring Service Fees – Hosted Reservation Services – New Skies Add-On Products/Services:	

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Monthly
Minimum
Recurring
Service Fee
(per partner
/
connection)	  	Included
in
Monthly
Recurring
Service
Fee	  	Monthly
Overage
Fee	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Reservation Services – New Skies
Add-On Products/Services	
							
X	  	API Suites**	  	Booking and Voucher API Suites	  	N/A	  	*****	  	*****	  	*****	
	  		  	Check-In API Suite	  	N/A	  		  		  		
X	  	Data Store	  	Data Store Workbench	  	N/A	  	*****	  	*****	  	*****	
 
Exhibit K - 92

Hosted Services Agreement

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Monthly
Minimum
Recurring
Service Fee
(per partner
/
connection)	  	Included
in
Monthly
Recurring
Service
Fee	  	Monthly
Overage
Fee	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
X	  	Type B / Teletype
Connectivity for
Operational Messaging*	  	BSM or BTM
messages
(outbound only)	  	Type B / Teletype	  	*****	  	*****	  	*****	
X	  		  	PNL/ADL/PFS
messages
(inbound and/or
outbound)	  	Type B / Teletype	  	*****	  	*****	  	*****	
X	  		  	MVT (PXA/PXB)
messages
(inbound and/or
outbound)	  	Type B / Teletype	  	*****	  	*****	  	*****	
							
X	  	All-Inclusive Pricing	  	All-Inclusive Pricing	  	N/A	  	*****	  	*****	  	*****	
N/A	  	Travel Commerce	  	Travel Commerce	  	Insurance Partners:
TBD	  	*****	  	*****	  	*****	
N/A	  		  		  	Car Partners:
TBD	  		  	*****	  	*****	
N/A	  		  		  	Hotel Partners:
TBD	  		  	*****	  	*****	
N/A	  		  		  	Activity Partners:
TBD	  		  	*****	  	*****	
							
X	  	Secure Flight/AQQ	  	Secure Flight/AQQ	  	N/A	  	*****	  	*****	  	*****	
							
X	  	Revenue Management Extract	  	Revenue
Management Extract	  	N/A	  	*****	  	*****	  	*****	
							
X	  	GoNow Agent and Kiosk***	  	GoNow Agent and
Kiosk	  	N/A	  	*****	  	*****	  	*****	
 
*	Any applicable message fees, Segment fees, or data circuits pertaining to the CRS/GDS/ARS, SITA/ARINC, and/or other Connectivity Providers are the responsibility of Customer; including, but not limited to the following:	
 
 	(1)	CRS/GDS/ARS Imposed Message Fees (applicable to CRS/GDS/ARS messages only):	
Per CRS/GDS/ARS agreement with NAVITAIRE, additional CRS/GDS/ARS fees may be billed to NAVITAIRE. Any and all such fees and/or charges attributable to Customer’s Hosted Reservations Services, will be payable by Customer to NAVITAIRE, on a monthly basis. Upon request and on a time and materials basis, NAVITAIRE will provide Customer with a copy of the CRS/GDS invoice for Type A/EDIFACT, Type B/Teletype, or other related charges with each monthly invoice.
These fees are in addition to the standard Host Reservation Services charges and are subject to any increases imposed upon NAVITAIRE by CRS/GDS/ARS. If CRS/GDS/ARS begins to assess message fees for test messages, these will also be billed cost to Customer at cost.
 
 	(2)	SITA/ARINC or other Connectivity Provider Fees:	
All fees from SITA/ARINC and/or other Connectivity Providers for routing of traffic need to be billed directly to Customer. Customer should pursue an arrangement with these providers independent of NAVITIARE.
 
 	(3)	Any hardware required.	
 
**	Customer is required to obtain a valid NAVITAIRE API NDA with each API partner prior to initiating API development efforts.	
*****		
 
Exhibit K - 93

Hosted Services Agreement
 
 	1.1.3	*****	

SELECTED	  	*****	  	*****	  	*****	  	*****)	  	*****	  	*****	
*****	  		  		  		  		  		  		
*****	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****
 
 	1.2	Implementation Fees	

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Installation
Price
(per partner  /
connection)	  	Installation
*****
(additional
*****)	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Reservation Services – New Skies
Core Products/Services	
						
X	  	New Skies*	  	Hosted Reservation Services	  	N/A	  	*****	  	*****	
	
Hosted Reservation Services – New Skies
Add-On Products/Services	
						
X	  	API Suites	  	Booking and Voucher API Suites	  	N/A	  	*****	  	*****	
	  		  	Check-In API Suite	  	N/A	  		  		
						
X	  	Data Store	  	Data Store Workbench	  	N/A	  	*****	  	*****	
						
X	  	Type B / Teletype Connectivity for
Operational
Messaging	  	BSM messages, BTM
messages;
PNL/ADL/PFS
messages	  	Type B / Teletype	  	*****	  	*****	
						
N/A	  	Travel Commerce	  	Travel Commerce	  	Insurance Partners:
TBD	  	 
*****	  	 
*****	
	  		  		  	 
Car Partners:
TBD	  		  		
N/A	  		  		  	 
Hotel Partners:
TBD	  		  		
N/A	  		  		  	 
Activity
Partners:
TBD	  		  		
						
X	  	Secure Flight/AQQ	  	Secure Flight/AQQ	  	N/A	  	*****	  	*****	
						
X	  	Revenue
Management Extract	  	Revenue Management Extract	  	N/A	  	*****	  	*****	
						
X	  	GoNow Agent and
Kiosk**	  	GoNow Agent and Kiosk	  	N/A	  	*****	  	*****	
 
Exhibit K - 94

Hosted Services Agreement

SELECTED	  	Products and/or
Services	  	Description	  	Partners or
Connections	  	Installation
Price
(per partner  /
connection)	  	Installation
*****
(additional
*****)	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Revenue Accounting Services – SkyLedger
Core Products/Services	
						
X	  	SkyLedger	  	Hosted Revenue
Accounting Services	  	N/A	  	*****	  	*****	
 
*	Price includes *****.	
**	Price excludes *****.	
 
 	1.3	Support Fees	

Support Center Support	  	Fees	
Initial Support: For first ***** after implementation, ***** of included Support Center Support.	  	*****	
		
Basic Support: After initial support, ***** included Support Center Support.	  	*****	
		
Additional Training Requests Scheduled through NAVITAIRE	  	*****	
		
Additional Support, Engineer Direct Support and/or Custom Solution Development: Support Center Support and/or custom solution development resources requested through an INC or Work Order.	  	Dependent on level of resource:
 	
	  	Level	  	***** Rate	
	  	Director	  	*****	
	  	Manager	  	*****	
	  	Senior	  	*****	
	  	Engineer	  	*****	
	  	Associate	  	*****	
 
 	1.4	Other Fees	

Other Fees	  	Fees	
		
Custom Programming/Professional Services	  	*****	
		
Dedicated Account Management	  	*****	
		
Business Process and Professional Services	  	*****	
 
 	1.5	Payment of Security Deposit and Implementation Fees. *****	
***** this Agreement, ***** of all Implementation Fees are due and payable. The Implementation Fees due ***** are ***** The remaining balances of all Implementation Fees are due and payable on the earlier of: ***** as detailed in Section 3 of Exhibits A and G provided, however, that NAVITAIRE does not request a delay as described in the Exhibits. Work on the Implementation Services will commence once the Implementation Fees due ***** are paid in full.
*****
 
Exhibit K - 95

Hosted Services Agreement
 
 	1.6	Fee Commencement after Implementation. The following four (4) scenarios will determine the commencement schedule for the monthly recurring Service Fees as outlined in this Exhibit and the due date for the remaining balances of the implementation fees:	
 
 	1.6.1	Implementation by Target Date. Upon ***** availability of the Hosted Services for use by Customer; or (b) the Target Dates as detailed in Exhibits A and G; all remaining implementation fees are due and applicable monthly recurring Service Fees will commence. These fees will commence regardless of actual use of Hosted Service(s) or subsequent delay by Customer.	
 
 	1.6.2	Requested Delay by NAVITAIRE. In the event that NAVITAIRE requests a delay in order to complete remaining Implementation Services, the remaining implementation fees will be due and applicable monthly recurring Service Fees will commence only on the earlier of the actual date of completion of Implementation Services or the new Target Date and ***** NAVITAIRE will provide written notice of the new planned Target Date and outline remaining Implementation Services.	
 
 	1.6.3	Requested Delay by Customer. In the event Customer requests a delay in the completion of Implementation Services past the Target Date, remaining implementation fees are due and any monthly recurring Service Fees will remain effective. Such requested delay may result in rescheduling portions or all of the remaining Implementation Services to the next available timeframe as evaluated by NAVITAIRE, unless mutually agreed in writing otherwise. Customer will provide written notice of the new requested Target Date.	
 
 	1.6.4	Mutual Agreement for Delay. In the event that both NAVITAIRE and Customer agree to delay in order to complete the required Implementation Services, the remaining implementation fees will be due and the applicable monthly recurring Service Fees will commence on the newly agreed Target Date for the Implementation Services. ***** will document the new planned Target Date.	
 
Exhibit K - 96

Hosted Services Agreement
 
EXHIBIT L
WORK ORDER TERMS AND FORM
The purpose of this Exhibit L is to define additional Terms exclusively applicable to Professional Services and provide the Work Order form under which such Professional Services will be provided.
 
1	Additional Terms	
 
 	1.1	Acceptance: Customer’s Operation and Use of Deliverables	
 
 	1.1.1	Unless otherwise set forth in a Work Order, all Professional Services and Deliverables will be deemed accepted if Customer does not reject the Professional Services and Deliverables by providing written notice within ***** after delivery specifically identifying the manner in which the Professional Services or Deliverables fail to materially comply with their applicable specifications. Customer is responsible for its operation and use of the Deliverables and for ensuring that the Deliverables meet Customer’s requirements.	
 
 	1.2	Liability and Limited Warranties and Remedies	
 
 	1.2.1	Notwithstanding anything contained in this Agreement, the following sections will apply to the Professional Services and Deliverables, in lieu of Section 10.1 of the Agreement.	
THE AGGREGATE LIABILITY OF NAVITAIRE UNDER OR IN CONNECTION WITH ANY WORK ORDER FOR PROFESSIONAL SERVICES REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT, OR OTHERWISE), SHALL NOT EXCEED THE FEES RECEIVED BY NAVITAIRE WITH RESPECT TO THE PROFESSIONAL SERVICES AND DELIVERABLES UNDER THE APPLICABLE WORK ORDER.
For the avoidance of doubt, Section 10.4 of the Agreement shall apply to all Work Orders.
 
 	1.2.2	Notwithstanding anything contained in this Agreement, the following sections will apply to the Professional Services and Deliverables, in lieu of Section 10.2 of the Agreement:	
 
 	1.2.3	NAVITAIRE warrants that its Services will be performed in a good and workmanlike manner. NAVITAIRE agrees to re-perform any Professional Services not in compliance with this warranty brought to its attention in writing within ***** after those Professional Services are performed. Additionally, NAVITAIRE warrants that its Deliverables which are original content shall materially conform to their relevant specifications, for a period of ***** from delivery to Customer. NAVITAIRE agrees to correct any such Deliverable not in compliance with this warranty brought to its attention in writing within ***** after delivery of such Deliverable to Customer. THIS SECTION IS NAVITAIRE’S ONLY EXPRESS WARRANTY CONCERNING THE PROFESSIONAL SERVICES, ANY DELIVERABLES AND ANY WORK PRODUCT, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, INFORMATIONAL CONTENT, SYSTEMS INTEGRATION, NON-INFRINGEMENT, INTERFERENCE WITH ENJOYMENT OR OTHERWISE.	
 
 	1.2.4	Exclusions. The NAVITAIRE warranties under Section 1.3.2 of this Exhibit do not apply to any noncompliance resulting from any: (a) items furnished by Customer; (b) use not in accordance with this Agreement or any applicable Work	
 
Exhibit L - 97

Hosted Services Agreement
 
 	Orders; (c) modification, damage, misuse or other action of Customer or any third party; (d) combination with any goods, services or other items provided by Customer or any third party to the extent that the noncompliance arises out of such combination with the Deliverables provided under this work order, or (e) any failure of Customer to comply with this Agreement or any applicable Work Order to the extent that the failure to comply by the Customer causes NAVITAIRE’s noncompliance. Further, NAVITAIRE does not warrant that the Deliverables or any other items furnished by NAVITAIRE under this Agreement or any Work Order are free from bugs, errors, defects or deficiencies.	
 
 	1.2.5	Customer-Furnished Items. NAVITAIRE MAKES NO WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY CUSTOMER-FURNISHED ITEMS.	
 
 	1.2.6	Remedy. Customer’s sole and exclusive remedy for any claim arising out of the Professional Services and Deliverables shall be for NAVITAIRE, upon receipt of written notice, to use commercially reasonable efforts to re-perform the Professional Services or correct the Deliverables as stated above, or failing that, NAVTIAIRE will return the fees paid to NAVITAIRE for the portion of the work related to the breach.	
 
 	1.3	License	
 
 	1.3.1	Notwithstanding anything contained in this Agreement, the following section will apply to the Professional Services and Deliverables, in lieu of Section 7.1 of the Agreement.	
 
 	1.3.2	After acceptance of a Deliverable by the Customer, and pending final payment, NAVITAIRE hereby grants to Customer a revocable, nontransferable, non-exclusive unpaid right and license to use, copy, modify and prepare derivative works of such Deliverable for purposes of Customer’s internal business only. Upon final payment, NAVITAIRE shall grant to Customer a perpetual, nontransferable, non-exclusive, paid-up right and license to use, copy, modify and prepare derivative works of the Deliverables, for purposes of Customer’s internal business only. All licenses granted will be subject to any restrictions applicable to any third party materials embodied in the Deliverables. To the extent any Deliverable contains NAVITAIRE Confidential Information it shall be subject to Section 9 of the Agreement. All other intellectual property rights in the Deliverables shall consist of NAVITAIRE Property, as defined in Section 7.2 of the Agreement.	
 
 	1.3.3	The License does not include the right to, and Customer will not directly or indirectly: (a) grant any sublicense or other rights to any Deliverables; (b) authorize any other party to grant any sublicense with respect to any Deliverables; (c) reverse engineer, disassemble or decompile any of the Deliverables or attempt to discover or recreate the source code to any Deliverables; or (d) remove, obscure, or alter any notice of copyright, trademark, trade secret, or other proprietary right related to the Deliverables.	
 
 	1.4	Termination	
 
 	1.4.1	Unless otherwise set forth in a Work Order, either party may, upon giving ***** written notice identifying specifically the basis for such notice, terminate a Work Order for breach of a material term unless the party receiving the notice cures such breach within the ***** period. In the event a Work Order is terminated, Customer will pay NAVITAIRE for all Services rendered and expenses incurred prior to the date of termination. All provisions of this Work Order which are by their nature intended to survive the expiration or termination of this Work Order will survive such expiration or termination.	
 
Exhibit L - 98

Hosted Services Agreement
 
2	Form of Work Order	
[Customer]
WORK ORDER
INC ######
PROJECT NAME: Project Name
NAVITAIRE TEAM: Navitaire Professional Services (NPS)
NAVITAIRE POINT OF CONTACT: [SAM, CAM, or IPM]
NOTE: the rates and the dates of performance contained in this Work Order are subject to change if this Work Order is not executed within fourteen (14) days of first receipt by Customer.
This Work Order is effective as of Month Day, 20XX (engagement start date) and is entered pursuant to the                     , as amended, (the “Agreement”) by and between Navitaire LLC, a Delaware limited liability company (“NAVITAIRE”), and                     , a                      corporation (“Customer”), dated as of Month Day, 20XX.
 
1.	Scope of Work: NAVITAIRE will perform the following activities (on and/or off-site):	
 
 	•	 	Plan	
 
 	•	 	    	
 
 	•	 	Analyze	
 
 	•	 	    	
 
 	•	 	Design	
 
 	•	 	    	
 
 	•	 	Build	
 
 	•	 	    	
 
 	•	 	Test	
 	•	 	Assist Customer in resolving issues identified during QA and/or user acceptance testing results.	
 
 	•	 	Deploy	
 
 	•	 	    	
 
 	•	 	Manage Project	
 
 	•	 	Status reports will be sent to the Customer on a weekly basis.	
Out of Scope: Customer is responsible for the following:
 
 	•	 	[Add out of scope here if needed]	
 
 	•	 	Performing project management duties as required by Customer’s business needs.	
 
 	•	 	Creating and executing QA test cases and performing user acceptance testing on the solution.	
 
2.	Assumptions: The following assumptions are made:	
 
 	•	 	[Add assumptions here if needed]	
 
 	•	 	Customer shall perform those tasks and fulfill those responsibilities specified in this Work Order (“Customer Responsibilities”) so that the Service Provider can perform NPS Services and provide Deliverables. Customer understands that Service Provider’s performance is dependent on Customer’s timely and effective performance of Customer Responsibilities under this Work Order and timely decisions and approvals by Customer.	
 
 	•	 	Service Provider shall be entitled to rely on all decisions and approvals of the Customer in connection with the NPS Services or Deliverables.	
 
Exhibit L - 99

Hosted Services Agreement
 
 	•	 	NPS project management will be limited to monitoring the overall health of the engagement and is not intended to replace a project manager to manage the engagement in accordance with Customer’s needs.	
 
 	•	 	Any changes required to the Scope of Work outlined above will be addressed as follows:	
 
 	•	 	The party requesting the change(s) will submit a Change Request Form (attached hereto as Appendix A to this Work Order) and complete the details found in Section 1, Description of Change.	
 
 	•	 	Both parties will review the Change Request Form and Service Provider will complete the details found in Section 2, Scope of Change.	
 
 	•	 	If the Change Request is approved and signed by both parties, the Change Request Form will be incorporated as an attachment to this Work Order.	
 
 	•	 	If the change request is disputed by either party, the following will occur:	
 
 	•	 	The dispute will be brought to the attention of the Project Managers.	
 
 	•	 	If the Project Managers are unable to resolve the dispute they will escalate to the Customer Account Manager.	
 
 	•	 	If, after ten (10) business days, the dispute remains unresolved, either party may request that the issue be raised to an appropriate senior executive.	
 
 	•	 	Changes to the Scope of Work may be initiated at any time, prior to the completion of this Work Order, by either party if there is reasonable good faith belief that such change is required.	
 
3.	*****: The following ***** will be provided to Customer:	
 
 	•	 	***** as described in section 1, Scope of Services above.	
 
 	•	 	[Add deliverables here if needed]	
 
4.	Payment: Customer agrees to pay NAVITAIRE for the total actual work performed under this Work Order and for NAVITAIRE’s expenses outlined in Section 6 below. The actual fees and expenses for this Work Order will be invoiced to Customer on a monthly basis subject to the payment terms specified in the Agreement.	
 
5.	Estimated Dates of Performance: [Project Duration – Month Day, Year – Month Day, Year]	
The total effort estimated for this project by component:

Project Component	  	Hours	 	  	% of Total	 	
Plan	  	 	0	  	  	 	0	% 	
Analyze	  	 	0	  	  	 	0	% 	
Design	  	 	0	  	  	 	0	% 	
Build	  	 	0	  	  	 	0	% 	
Test	  	 	0	  	  	 	0	% 	
Deploy	  	 	0	  	  	 	0	% 	
Admin	  	 	0	  	  	 	0	% 	
	  	 	 	 	  	 	 	 	
ESTIMATED TOTAL	  	 	0	  	  	 	0	% 	
	  	 	 	 	  	 	 	 	
The date(s) listed are provided as an estimate only and will be modified if necessary to reflect the expected dates of performance upon execution of this Work Order. If modified, the new dates will be communicated to Customer via the Remedy INC. Work may progress up to two (2) weeks beyond the estimated completion date without any further action required by either party.
 
Exhibit L - 100

Hosted Services Agreement
 
6.	Estimated Total Dollar Amount: *****:	

Expense Component	  	Cost	 	
Resources*	  	$	0	  	
	  	$	0	  	
	  	 	 	 	
TOTAL	  	$	0	  	
	  	 	 	 	
This is a time and materials based Work Order. The hours and dollar amounts represent a good faith estimate based on information provided by Customer to the Service Provider. As such, the actual hours required to complete the NPS Services and Deliverables and/or the actual Travel and other related expenses may be more or less than the total estimated above.
 
*	Resources are applied at the rate of $XXX.XX per hour as provided for in ***** of ***** of the Agreement.	
**	Travel and other related expenses are applied as provided under ***** of the Agreement.	
 
7.	Planned Hosting Solution	
 
 	¨	Customer Hosted	
 
 	¨	NAVITAIRE Hosted (Agreement between Customer and NAVITAIRE must be reached prior to deployment of the solution)	
 
 	¨	N/A or covered in existing Hosted Reservation Services Agreement	
If the proposed solution is to be hosted by NAVITAIRE and is not already included within the scope of the Agreement, an Amendment for the hosting services will be required.
 
8.	For the avoidance of doubt, the terms and conditions of ***** of ***** of the Agreement shall apply to this Work Order.	
IN WITNESS WHEREOF , the parties hereto have executed this Work Order as of the date set forth below.

Signed for and on behalf of	 		 	Signed for and on behalf of	
			
CUSTOMER*	 		 	NAVITAIRE LLC	
					
By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
					
Title:	 	 	 		 	Title:	 	 	
					
Company:	 	 	 		 	Date:	 	 	
					
Date:	 	 	 		 		 		
 
*	Please indicate your agreement by signing and sending to:	
Navitaire LLC
Attn: Gordon P. Evans
Fax Number: +1 (801) 947-7801
A fully-executed copy will be returned for your records.
 
Exhibit L - 101

Hosted Services Agreement
Appendix A
Change Request Form
Customer Name:
Change Request Number:
Requested By:
Customer
NAVITAIRE
Work Order INC Number:
INC
Date Submitted:
Project Name:
This Change Request is effective as of Month Day, 20xx and unless it is fully-executed by both parties: (a) the estimated dates of performance and total dollar amount will expire five (5) days after the effective date shown above; and (b) the work outlined herein will not commence.
1. Description of Change:
Provide a brief description of the change being requested. Include the reason for the change and why it should be incorporated into the current Work Order and not submitted as its own Work Order.
2. Scope of Change
Outline the impact of the change, the scope of the change, and any assumptions. List specific exclusions if they have not been addressed in the initial Work Order.
The Estimated Completion Date of Performance is Month Day, 20xx. The hours and cost are adjusted as follows:
Component
Hours
Cost
Original Work Order
$
Previously Approved Change Requests
+/-
$
Current Change Request
+/-
$
NEW ESTIMATED TOTAL
+/-
$
Exhibit L - 102

Hosted Services Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Change Request as of the date set forth below.
Signed for and on behalf of
Signed for and on behalf of
CUSTOMER*
SERVICE PROVIDER
By:
By:
Name:
Name:
Gordon P. Evans
Title:
Title:
Vice President
Company:
Date:
Date:
* Please indicate your agreement by signing and sending to:
NAVITAIRE LLC
Attn: Gordon P. Evans
Fax Number: +1 (801) 947-7801
A fully executed copy will be returned for your records.
Exhibit L - 103

Exhibit 21.1
Subsidiaries of Controladora Vuela Compañía de Aviación, S.A.B. de C.V.
 
 	1.	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., a variable capital investment promotion stock corporation organized under the laws of Mexico	
 
 	2.	Comercializadora Volaris, S.A. de C.V., a variable capital stock corporation organized under the laws of Mexico	
 
 	3.	Servicios Administrativos Volaris, S.A. de C.V. a variable capital stock corporation organized under the laws of Mexico	
 
 	4.	Servicios Corporativos Volaris, S.A. de C.V., a variable capital stock corporation organized under the laws of Mexico	

Exhibit 23.1
 
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption “Experts” and to the use of our report dated June 11, 2013 in the Amendment No. 1 to the Registration Statement No. 333-189121 on Form F-1 and related Prospectus of Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

			
Mancera, S.C.
A member practice of
Ernst & Young Global	 		
		
/s/ Francisco Álvarez del Campo	 	 	
 
Mexico City, Mexico
June 20, 2013

Exhibit 99.1
[Translation for informational purposes only]
CONCESSION TO RENDER THE PUBLIC SERVICE OF NATIONAL REGULAR AIR TRANSPORTATION OF PASSENGERS, CARGO AND MAIL GRANTED BY THE FEDERAL GOVERNMENT BY MEANS OF THE MINISTRY OF COMMUNICATIONS AND TRANSPORT, HEREINAFTER “THE MINISTRY”, IN FAVOR OF “CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN”, S.A. DE C.V., HEREINAFTER “THE CONCESSION HOLDER”, IN ACCORDANCE WITH THE FOLLOWING BACKGROUND AND CONDITIONS.
BACKGROUND
 
 	I.	“THE CONCESSION HOLDER” was incorporated as a business corporation named “Concesionaria Vuela Compañía de Aviación”, Sociedad Anónima de Capital Variable, in accordance with the Mexican laws, as evidenced in public instrument number 92,750, dated October 27, 2004, attested by Emiliano Zubiría Maqueo, Notary Public Number Twenty-five for the Federal District, acting as alternate and in the protocol of Francisco Javier Arce Gargollo, Notary Public Number 74 for the Federal District, which was entered under Mercantile folio number 325178 of the Public Registry of the Real Estate Property and Commerce for the Federal District on October 27, 2004.	
 
 	II.	The domicile stated by “THE CONCESSION HOLDER” to hear and receive notifications is that located at Boulevard Manuel Ávila Camacho No. 36, piso 22, Colonia Lomas de Chapultepec, Mexico D. F., C.P. 11000.	
 
 	III.	“THE CONCESSION HOLDER” , based on the provisions set forth in the Civil Aviation Law and the Regulations thereto, requested in writing “THE MINISTRY” to be granted a concession to render the public service of national regular air transport of passengers, cargo and mail.	
 
 	IV.	“THE CONCESSION HOLDER” evidenced before “THE MINISTRY” its technical, financial, legal and administrative capacity to render the abovementioned service, in quality, security, opportunity, staying and price conditions, as well as the availability of infrastructure necessary for the operations and trained aviation and administrative technical personnel, required to comply with its obligations stated in this Concession, under the terms of the provisions set forth in article 9 of the Law of Civil Aviation and all other related articles of its Regulations.	
 
 	V.	Legal representative of “THE CONCESSION HOLDER” , Messrs. Alberto Moreno Ruiz Esparza and Luis Rubio Barnetche, evidenced their legal capacity by means of public instrument number 92,750 dated October 27, 2004, attested by Emiliano Zubiría Maqueo, Notary Public Number Twenty-five for the Federal District, acting as alternate and in the protocol of Francisco Javier Arce Gargollo, Notary Public number 74 for the Federal District, which was entered under Mercantile folio number 325178 of the Public Registry of the Real	

 	Estate Property and Commerce for the Federal District on October 27, 2004, including the variable capital stock corporation agreement of the business corporation named “Concesionaria Vuela Compañía de Aviación”, S.A. de C.V., and the power-of-attorney with the powers to represent the company in favor of Messrs. Alberto Moreno Ruiz Esparza and Luis Rubio Barnetche, as Attorneys-in-fact, the powers and capacity of whom have not been revoked nor modified in any form whatsoever, powers which are enough to execute this Concession.	
Based on the abovementioned background and based on the provisions set forth in articles 36, fraction IV, of the Judiciary Law of the Federal Public Administration; 51 of the Law of General Communication and Transportation Means; 4, 5, fraction I, paragraph a), 6, fraction II, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 42, 61, 74, 86, 87, 89 and all other related articles of the Civil Aviation Law; 1, 2, 3, 18, 19, 20, 21, 22, 23, 24, 49, 50, 51, 51-A, 51-B, 52, 54, 64, 65, 66, 67, 197 and 198 of its Regulations, and 5, fraction XI, of the Internal Regulations of the Ministry of Communications and Transport, “THE MINISTRY” hereby grants the Concession in name in “THE CONCESSION HOLDER” , which shall be subject to the provisions set forth in the following:
CONDITIONS
Chapter I
Definitions
 
1.	Definitions. For purposes of this Concession, the following words shall have the following meanings:	
Concession: The concession granted in name of “THE CONCESSION HOLDER” under the terms hereof.
Scale for non-commercial purposes: Landing for purposes other than boarding or unboarding of passengers, and cargo and mail loading and unloading.
Frequency: The round trip(s) made by the aircraft in an authorized route during a certain period.
Schedules-Itineraries: Air operations authorized to “THE CONCESSION HOLDER” by “THE MINISTRY” comprising the route(s), frequency(ies) and arrival and departure schedules on local times and/or zulu in each airfield.
Law: The Civil Aviation Law.
Regulations: The Civil Aviation Law Regulations,
Service: Shall have the meaning indicated in condition 2.1 of this Concession.
Zulu: Time Z, Hour GTM, Greenwich Time.
All other terms used in this title shall have the meanings attributed thereto in the Law, the Regulations and all other applicable legal provisions.

Chapter II
Purposes and Scopes
 
2.1.	Purpose. The purpose of this Concession is that “THE CONCESSION HOLDER” renders the public service of national regular air transport of passengers, cargo and mail.	
 
2.2.	Rendering of the Service by third parties. The rendering of the Service shall be directly provided by “THE CONCESSION HOLDER” , except when “THE CONCESSION HOLDER” has executed business and cooperation agreements with other concession holders or permit holder, having the nature of a third party to render the Service. A copy thereof shall be delivered to “THE MINISTRY” before becoming effective, in accordance with the provisions set forth in article 26 of the Law.	
Without detriment to the provisions set forth in article 16 of the Law and condition number II .7 below, the rendering of the Service by third parties under the terms of the business agreements executed by “THE CONCESSION HOLDER” shall not be construed for any reason whatsoever as a total or partial assignment of the rights conferred by this Concession, specially the air traffic rights.
 
2.3.	Joint liability. As regards the case referred to in the foregoing condition, “THE CONCESSION HOLDER” shall be jointly responsible for rendering the Service and be liable for the damages and losses which, if applicable, may be caused to users and third parties; the terms to render the Service in no event shall be agreed upon in conditions inferior to those originally agreed by “THE CONCESSION HOLDER” . The routes, considerations and corresponding liabilities shall be determined in the agreements executed to such end by “THE CONCESSION HOLDER” with third parties.	
Chapter III
Applicable Legislation
 
3.1.	Applicable legislation. Rendering of the Service that is subject matter of this Concession, shall be subject, without limitation, to the provisions set forth in the Political Constitution of the United Mexican States; the Law and the Regulations; the International Treaties executed and to be executed by the President of the Country, with the approval of the Senate and the Inter-institutional Agreements; the General Communications and Transportation Means Laws, the General Law of National Property, the Federal Law of Administrative Procedures; the Codes of Commerce, the Federal Civil Law and the Civil Procedures Federal Law, the Airport Laws, the Federal Law on Metrology and Standardization, the Federal Law on Economic Competition, the General Law of Ecologic Balance and Protection to the Environment and Regulations thereto; all other technical and administrative applicable preventions as regards the matters stated by “THE MINISTRY” ; the provisions set forth in this Concession and the Exhibits thereto, as well as the	

 	Mexican Official Standards that due to their nature shall apply to this Concession and all the provisions on mitigation of the environmental impact rendered by the competent authorities; and all other legal provisions that due to their nature and purpose may apply thereto. “THE CONCESSION HOLDER” agrees to observe and comply with all of the foregoing.	
“THE CONCESSION HOLDER” agrees that if the legal precepts and the administrative provisions referred to in the foregoing paragraph may be derogated, amended or added, it shall be subject, at any time, to the new legislation and the new legal and administrative provisions rendered on such matter, as from the time they become effective.
Chapter IV
Aircraft
 
4.1.	Aircraft. “THE CONCESSION HOLDER” shall render the Service referred to in this Concession with the aircraft authorized by “THE MINISTRY” , which shall be detailed in Exhibit 1 hereof.	
“THE CONCESSION HOLDER” shall be responsible for the aircrafts, the operation of which shall be carried out according to the provisions set forth in this Concession, to carry on board all documents and official proofs to evidence compliance with the obligations of this Concession, the Law and all other applicable provisions.
“THE CONCESSION HOLDER” agrees to notify “THE MINISTRY” of the registration and de-registration of its aircrafts in the Mexican Aviation Registry to render the service granted under concession, in order for “THE MINISTRY” to amend, if applicable, Exhibit I of this title.
To perform any change to the number or type of aircrafts described in Exhibit 1 of this Concession, “THE CONCESSION HOLDER” shall request authorization to “THE MINISTRY” in accordance with the provisions set forth in article 20 of the Regulations.
 
4.2.	Maintenance of aircrafts. “THE CONCESSION HOLDER” agrees to keep and maintain during the term of this Concession on an airworthy condition all its aircrafts in operation and service, in accordance with the provisions set forth in the applicable provisions.	
Maintenance of aircrafts shall be performed according to the provisions set forth in the manufacturer’s manuals, the service bulletins and airworthiness directives, acknowledged by the aviation authority of the country manufacturing the aircraft and validated by “THE MINISTRY” , as well as in the corresponding Mexican official standard and be performed at the aviation workshops of “THE CONCESSION HOLDER” or on those workshops contracted thereby to such end, which shall be authorized by “THE MINISTRY” . If such works were to be carried out abroad, it shall have the prior authorization by “THE MINISTRY” , and provide “THE MINISTRY” , when so required, the results thereof and the documents evidencing that all corresponding works have been performed.

Chapter V
Routes and Operation Base
 
5.1.	Routes. “THE CONCESSION HOLDER” may perform flights only and exclusively in the routes authorized thereto, according to Exhibit 2 of this Concession. In addition, these routes shall be the base on which “THE CONCESSION HOLDER” shall submit its schedules-itineraries request subject to authorization by “THE MINISTRY” .	
Likewise, “THE MINISTRY” , according to the Law, the Regulations and all other applicable provisions shall authorize “THE CONCESSION HOLDER” the combination of its routes included in Exhibit 2 of this Concession, as well as the increase or decrease of frequencies, by means of the authorization procedure to its schedules-itineraries, without such changes implying any amendment to the abovementioned Exhibit, sufficing to be added the corresponding authorization official communications to such Exhibit.
If “THE CONCESSION HOLDER” tries to add or exclude routes, it shall request it in writing to “THE MINISTRY” in order, if applicable, to amend Exhibit 2 of this Concession.
 
5.2.	Operation base. The operation base of “THE CONCESSION HOLDER” shall be the public service civil airfield authorized by “THE MINISTRY” to be used in most of its flights as the origin point and final destination of operations of its aircrafts, where, generally, all preservation, administration, operation and airworthiness condition controls are kept by the aviation authority and which is stated in Exhibit 3 of this Concession. The Operation Base may be modified prior to authorization by “THE MINISTRY” without this implying an amendment to the Concession.	
“THE CONCESSION HOLDER” may have a sub-base(s) of operations, which shall be understood as the civil airfields of alternate public service authorized by “THE MINISTRY” , acknowledged as origin and destination of any of its flights, and sometimes for maintenance services. If applicable, the operation sub-bases of “THE CONCESSION HOLDER” shall be those detailed in Exhibit 3 of this Concession.
 
5.3.	Passenger boarding and unboarding, cargo and mail loading and unloading position. “THE CONCESSION HOLDER” agrees to accept the assignment of positions for boarding and unboarding of passengers, loading and unloading of cargo and mail, as well as for an extended staying of aircrafts, stated by the airport administrator in question, in accordance with the provisions set forth in the Airport Law. Likewise, “THE CONCESSION HOLDER” shall be responsible for complying with all contractual obligations, derived from actions performed with the airport administrator, as regards the rendering of airport and supplementary services.	
Chapter VI
Limits, Term and Beginning of Operations
 
6.1.	Limits of Concession rights. “THE CONCESSION HOLDER” may not benefit from, exploit or in any other form whatsoever use the Concession for a purpose other than that stated in condition 2.1. above. Likewise, “THE CONCESSION HOLDER” shall neither render services other than or additional to those included in this Concession.	

“THE MINISTRY” is entitled to freely grant other concessions in favor of third parties in order to render the Service, in such a way that this Concession shall not confer exclusivity rights to the “CONCESSION HOLDER” .
“THE MINISTRY” may unilaterally amend this Concession and the Exhibits thereto in accordance with the applicable provisions and by means of the competent public servants thereof. In the event “THE CONCESSION HOLDER” requests any amendments to the Concession and the Exhibits thereto, it shall evidence compliance with all and any of the obligations entrusted thereto, derived from this Concession.
 
6.2.	Term. This Concession shall have a term of 5 years, as from the date when granted.	
“THE CONCESSION HOLDER” may request the extension of the term of this Concession under the terms of the provisions set forth in article 10 of the Law and 24 of the Regulations thereto.
 
6.3.	Beginning of operations. To start the rendering of the Service, “THE CONCESSION HOLDER” shall comply with the requirements set forth in article 20 of the Regulations and evidence to “THE MINISTRY” that:	
a) It has the technical proof granted by “THE MINISTRY” stating that its equipment has satisfactorily complied with the technical requirements;
b) Its schedules-itineraries have been authorized;
c) Its rates are registered;
d) It has the corresponding insurance policies;
e) It has contracted the air transit services;
f) It requested and made payment of corresponding duties for registry of this Concession before the Mexican Aviation Registry;
g) Aircrafts to be used to render the Service also have Mexican registration marks or, if applicable, have the authorization from “THE MINISTRY” for aircrafts with foreign registration marks leased by “THE CONCESSION HOLDER” to render the Service, in accordance with article 45 of the Law, and
h) Regarding the participation of foreign investment, it has the proofs or authorizations necessary to render the Service in accordance with the provisions set forth in the Foreign Investment Law and all other applicable legal provisions.
“THE CONCESSION HOLDER” shall start operations within a term not exceeding one hundred eighty natural days, as from the date when this concession is granted, in accordance with article 15 faction I of the Law.

6.4.	Suspension of operations. Once the requirements set forth in condition 6.3 above are evidenced, “THE MINISTRY” shall authorize “THE CONCESSION HOLDER” the beginning of operations. And as from such time, “THE CONCESSION HOLDER” shall render on an uninterrupted basis the Service under the terms and conditions stated in this Concession.	
“THE MINISTRY” shall authorize the total or partial suspension of the Service, provided that “THE CONCESSION HOLDER” : a) evidences that the cause of such suspension is fully justified, or b) evidences the occurrence of an act of God or force majeure.
Chapter VII
Rendering of the public service of national regular air transportation
 
7.1.	Equity to render the services. “THE CONCESSION HOLDER” agrees to render the Service to requesting users, on a permanent basis, uniformly and in equal and non-discriminating conditions, under the terms of the provisions set forth in article 17 of the Law, in order to foster an efficient development of regular aviation in Mexico.	
 
7.2.	Operational security. “THE CONCESSION HOLDER” shall be responsible for the Service to be rendered according to the quality and security standards set forth by “THE MINISTRY” , taking into consideration the provisions set forth in the conditions 4.2., 5.1., 7.4., 7.5., 7.8. and 11.1 of this Concession, as well as by those determined within the international field.	
In addition to the foregoing, “THE CONCESSION HOLDER” shall comply with the provisions regarding management, packaging and material, substances and hazardous objects transportation matters, established in the Treaties, the Law, the Regulations and the corresponding Mexican Official Standards.
 
7.3.	Airport security. “THE CONCESSION HOLDER” agrees to apply in the development of its activities, ordinary and emergency security programs approved by “THE MINISTRY” , within the National Airport Security Program and the amendments thereto. Such programs shall indicate, without limitation, the methods and procedures to be adopted to protect passengers, flight crew, aircrafts, facilities and services, as well as preventive actions against unlawful interference actions.	
 
7.4.	Aviation technical personnel. “THE CONCESSION HOLDER” shall be bound to observe within the contracting of personnel process referred to in this item with that set forth in article 32 of the Political Constitution of the United Mexican States, which, to render the services shall have the licenses to be issued and authorized by “THE MINISTRY” to such purpose, as set forth in article 38 of the Law.	
Likewise, “THE CONCESSION HOLDER” shall be responsible that such personnel, to operate the Service, comply with the requirements stated by Law, the Regulations and all other applicable provisions.

7.5.	Training and coaching. “THE CONCESSION HOLDER” shall develop training and coaching programs for its personnel and to such end it shall coordinate with several institutions it deems convenient. As regards the aviation technical personnel, such training and coaching shall be through institutions having current permit from “THE MINISTRY” , in compliance with the provisions set forth in articles 11 and 39 of the Law and Title Three Chapter 11 of the Regulations.	
“THE MINISTRY” may grant “THE CONCESSION HOLDER” permits to contract foreign technicians as advisors or instructors of the aviation technical personnel, provided that foreigners have the aviation authority certification from their country and when regarding courses the purpose of which is to improve the Service or use new equipment.
 
7.6.	Telecommunication services. “THE CONCESSION HOLDER” shall have the telecommunication services and internal systems necessary for due operation of the Service. To such end, it may install a private telecommunications network and its own systems or else, contract with authorized third parties the rendering thereof.	
 
7.7.	Air traffic control services. “THE CONCESSION HOLDER” shall be responsible for contracting and using the air traffic services, assistance by radio, meteorology, telecommunications, aviation information and all other aids to air navigation, provided by “THE MINISTRY” or the persons empowered thereby to such purpose, as well as the airways systems established by “THE MINISTRY” itself.	
 
7.8.	Technical requirements. To operate flights, “THE CONCESSION HOLDER” shall be bound to comply with the technical requirements set forth by “THE MINISTRY” and evidence compliance therewith by evidence issued by “THE MINISTRY” itself to such end, which shall be in full force and effect.	
Chapter VIII
Development Program
 
8.	Development program. “THE CONCESSION HOLDER” , by exercising the rights conferred thereto according to this Concession, shall be subject to the Service Development Program authorized by “THE MINISTRY” , which is included as Exhibit 4 of this Concession and embodies the technical-operational study and the Service investment program and its projection at a term not below three years.	
Any amendment to the Development program rendered by “THE CONCESSION HOLDER” to “THE MINISTRY” shall be justified with the technical-operational and economic-financial studies prepared thereby.

Chapter IX
Rates
 
9.	Rates. “THE CONCESSION HOLDER” shall freely fix the rates for Service under the terms allowing their rendering under satisfactory quality, competitiveness, security and staying conditions which shall be registered, along with their restrictions, before “THE MINISTRY” in order to be effective. For rates established by “THE MINISTRY” referred to in article 43 of the Law and all other related articles of the Regulations, “THE CONCESSION HOLDER” shall be bound to apply them during the term determined to such end by “THE MINISTRY” .	
“THE MINISTRY” , in accordance with the provisions set forth in article 43 of the Law, may establish the rating regulation basis by itself or else, upon request of “THE CONCESSION HOLDER” through the request submitted thereby in writing.
If “THE CONCESSION HOLDER” applies rates not duly recorded before “THE MINISTRY” , it shall be imposed the corresponding sanctions and, if applicable, the revocation procedure for the Concession shall be in accordance with that set forth in the applicable provisions, without detriment to the actions that user may decide to exercise against “THE CONCESSION HOLDER” due to damages and losses caused thereto.
Chapter X
Duties
 
10.	Duties. As from the time this Concession is granted, “THE CONCESSION HOLDER” shall pay the Federal Government the duties established by the Government Service Charges Law for services related to the granting of the Concession, under the terms and frequency stated in such law.	
Chapter XI
General Provisions
 
11.1.	Environmental protection. “THE CONCESSION HOLDER” shall comply with all the legal and administrative provisions, as well as with the International Treaties applicable regarding ecological balance and protection to the environment matters.	
“THE CONCESSION HOLDER” shall be responsible for damages that, as regards ecologic and environmental protection matters are derived from the beginning of the operations by “THE CONCESSION HOLDER” and that result from acts or omission entrusted thereto, according to the applicable laws and provisions regarding such matter.
“THE CONCESSION HOLDER” shall comply, within the terms stated in Exhibit 5 hereof, with the Mexican official standard establishing within the Mexican Republic, the maximum allowable limits for noise emission produced by aircrafts of sub-sonic reaction, propeller-driven, supersonic and helicopters, their measurement method, as well as a requirements to comply with such limits.

11.2.	Damage liability. “THE CONCESSION HOLDER” shall be responsible for damages caused to passengers, luggage and cargo during the transport, as well as before third parties, as set forth by the Law, the Regulations and all other applicable provisions.	
 
11.3.	Insurances. “THE CONCESSION HOLDER” agrees to have the insurance policies for the amounts to be maintained under the terms of the Law and the Regulations thereto and to keep them in force during the entire time the Concession is effective.	
 
11.4.	Verification and information. “THE CONCESSION HOLDER” shall be bound to allow the access to its facilities to “THE MINISTRY’s” inspectors or third parties authorized thereby, as well as to transport them on their equipment in order to carry out the corresponding verification and, in general, to grant them all facilities and guaranties for such purposes; as well as to cover the legal expenses incurred due to such function.	
Without detriment to the powers of “THE MINISTRY” to require any other documentation and information of technical, financial, legal or administrative nature to “THE CONCESSION HOLDER” , “THE CONCESSION HOLDER” shall deliver, not later than in May of each year, its annual audited financial statements for the prior year. Accounting data shall be provided under the terms of the provisions set forth in articles 120 and 121 of the General Communications and Transportation Means Law.
“THE CONCESSION HOLDER” shall submit “THE MINISTRY” an annual economic-statistical report, as well as a quarterly report within the fifteen days after the current quarter, which shall include, regarding the three prior months, the following information: a) Technical, financial, administrative and statistics data on air and services activities being performed; b) statistic traffic information, per routes, occupation, performance or other parameters generated due to the operation of the service under concession, and c) the information of the air fleet, as well as the personnel used.
Such information shall be provided in the formats established by “THE MINISTRY” .
 
11.5	Capital stock. In order for “THE MINISTRY” to be able to verify the financial situation of “THE CONCESSION HOLDER” , any amendment made to its corporate by-laws and/or the integration of its capital stock shall be notified to “THE MINISTRY” within the thirty days following the date when such amendments become effective.	
 
11.6.	Foreign investment. Foreign investment in capital stock of “THE CONCESSION HOLDER” shall be subject to the provisions set forth in the Statutory Law.	
For foreign partners, the same shall not have more rights than those granted to nationals by the Mexican laws.

11.7.	Assignment of rights and obligations. “THE CONCESSION HOLDER” may request authorization to “THE MINISTRY” in order to totally or partially assign the rights and obligations derived from this Concession. “THE MINISTRY” may authorize such assignment within a term of 90 natural days as from the date when the corresponding request is submitted, provided that the concession holder is not a government or foreign State and expressly agrees before “THE MINISTRY” to comply with the obligations entrusted to “THE CONCESSION HOLDER” derived from this Concession, as well as with those additionally established by “THE MINISTRY” .	
“THE CONCESSION HOLDER” may not grant in any event any irrevocable power-of-attorney for acts of administration and ownership, in favor of persons implying directly or indirectly the transfer of rights and obligations stated hereunder.
 
11.8.	Termination. This Concession shall terminate for any of the causes stated in article 14 of the Law.	
 
11.9.	Revocation. In addition to all causes stated in article 15 of the Law, if “THE CONCESSION HOLDER” provides “THE MINISTRY” at any time false documentation or information shall also be a revocation cause for this Concession. Likewise, the enactment of an amendment made without notifying “THE MINISTRY” of the information evidencing the technical, legal or administrative capacity that may substantially alter the circumstances that were taken into consideration to grant this Concession shall also be cause for revocation.	
If, due to noncompliance with any of the conditions set forth in this Concession, or else, that derived from the verification referred in condition 11.4 of the results given in the annual financial statements duly audited that “THE CONCESSION HOLDER” submits to “THE MINISTRY” , “THE MINISTRY” determines that it is not possible for “THE CONCESSION HOLDER” to continue operating with the technical and operational security levels being required, both for aircrafts and equipment in order to protect the physical integrity of its personnel, users and property, as well as that of third parties, “THE MINISTRY” may order the temporary suspension of the service under concession. The suspension shall last for the period necessary in order for “THE CONCESSION HOLDER” to comply with the corresponding conditions or evidences the technical, operational or financial capacity, guaranteeing the rendering of the Service according to the security levels established in the applicable legislation, as the case may be.
 
11.10.	Procedure to impose sanctions and declare the suspension of operations. In order to declare the revocation of this Concession, or the imposition of sanctions, the provisions set forth in the Federal Law of Administrative Procedures shall apply.	
If the service is suspended, the provisions set forth in articles 61 and 81 in the law mentioned in the foregoing paragraph shall apply.

11.11.	Sanctions. Noncompliance by “THE CONCESSION HOLDER” with any of the obligations referred to in this Concession, without justified cause, shall be sanctioned according to the provisions set forth in the Law and the Regulations.	
 
11.12.	Requisition. The Federal Government may, if any natural disaster may occur, as well as a war, a gross alteration of public order or when any threatening danger for the national security is expected, the internal peace of the country or for national economy, to make a requisition of the aircrafts and all other Service equipment of the private properties and real estates necessary and to dispose of all of it as it deems convenient, under the terms of the provisions set forth in article 83 of the Law and all other applicable provisions.	
 
11.13.	Competent courts. For anything related to the construction and, compliance with this Concession, except for that that which “THE MINISTRY” is administratively responsible for resolving, “THE CONCESSION HOLDER” agrees to submit itself to the jurisdiction of the federal competent courts for the Federal District, therefore, both parties waive to the forum that may correspond thereto by reason of their present or future domiciles.	
 
11.14.	Notifications. “THE CONCESSION HOLDER” agrees to notify in writing “THE MINISTRY” of any change of domicile during the term of this Concession, provided that if failing to do so, the notifications shall be effective at the domicile stated in Background II hereof.	
 
11.15.	Exhibits. Exhibits referred to in this Concession, which are stated below, are an integral part thereof. Exhibit 1. List of aircrafts; Exhibit 2. List of routes; Exhibit 3. Base and Sub-bases of operations; Exhibit 4 . Development Program and Exhibit 5. Terms to comply with the Mexican Official Standard establishing within the Mexican Republic the maximum limits allowable for emission of noise produced by aircrafts of subsonic reaction, propeller-driven, supersonic and helicopters, their measurement method, as well as the requirements to comply with such limits.	
Signature of this Concession by “THE CONCESSION HOLDER” implies the unconditional acceptance of the terms and conditions thereof.
This Concession is granted in Mexico City, Federal District, on May nine, two thousand five.
THE MINISTRY OF COMMUNICATIONS AND TRANSPORT
MR. PEDRO CERISOLA Y WEBER

By: “CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN S.A. DE C. V.	
				
	 	Alberto Moreno Ruiz Esparza	 	Luis Rubio Barnetche	 		
	 	Attorney-in-fact	 	Attorney-in-fact